ISETANN DEPARTMENT STORE, INC., PETITIONER, VS. THE NATIONAL LABOR RELATIONS COMMISSION, SECOND DIVISION AND ROSITA BAUTISTA, RESPONDENTS.

Petitioner Isetann Department Store, Inc. seeks to annul and set
aside the Resolution issued on August 29, 1990 by the Second Division of the
National Labor Relations Commission^[1] in
NLRC Case No. 00-01-0071-88, entitled “Rosita R. Bautista, Complainant-Appellee
vs. Isetann Department Store, Inc., Respondent-Appellant.” It is alleged
that the assailed resolution, which dismissed the appeal of petitioner Isetann
from the decision of Labor Arbiter Felipe P. Pati dated July 31, 1989, was
rendered arbitrarily, capriciously and with grave abuse of discretion because
contrary to law and the evidence.^[2]

We agree with this assessment.

Private respondent Rosita Bautista was Floor Supervisor at the
third floor of petitioner’s store at Carriedo, Manila. Her sister, Yolanda
Chan, was a regular supplier of shoes to petitioner. On June 2, 1987, Yolanda
Chan delivered to petitioner assorted styles of ladies shoes consisting of
1,379 pairs of “Valencia” shoes and 940 pairs of deerskin shoes. The “Valencia”
shoes were priced at P22.00 a pair, or a total of P30,338.00, while the
deerskin shoes were priced at P25.00 a pair, or a total of P23,500.00, adding
up to P53,838.00 overall.

Because of the difference in price and material, the shoes had to
be sorted out, which task was undertaken beginning June 13, 1987 under the
supervision of Head of Stock, Connie Capua. Sorting, however, was completed
under another Head of Stock, Iglesia (Liza) Mangoba, as Capua went on leave.
After the shoes had been sorted out, Mangoba prepared a Purchase Order
erroneously listing the number of “Valencia” shoes at 940 pairs and
the deerskin shoes at 1,379 pairs and giving these a total value of P55,155.00.

The switch in figures was discovered sometime in July, 1987 when
the shoes were transferred to petitioner’s Cubao branch. The purchase order was
cancelled and a new check for the correct amount of P53,838.00 was prepared and
paid to Yolanda Chan, who continued to supply shoes to petitioner until
September, 1987. When confronted with the error by Alice Luro, Buyer, and Mr.
K. C. Tan, Merchandiser, Mangoba admitted her mistake in sorting out the shoes
and in preparing the purchase order.

Subsequently, however, or on November 28, 1987, Mangoba executed
a written statement stating inter
alia that when she took over the sorting job from Connie Capua, she
was instructed by the latter to mix some “Valencia” shoes with the
deerskin shoes so that Yolanda Chan would not lose from the transaction. She
did as instructed, but when she was preparing the purchase order, private
respondent approached her and seeing that the “Valencia” shoes still
outnumbered the deerskin shoes, told her to interchange the respective numbers
indicated for the Valencia and deerskin shoes. When subsequently confronted
with the switched figures, she had to own the error and take the blame because
private respondent Bautista was staring at her.^[3]

On the basis of Mangoba’s written statement, petitioner conducted
a preliminary investigation, in the course of which, Capua likewise executed a
written statement on December 2, 1987 stating that she was instructed by
private respondent to mix the “Valencia” shoes with the deerskin shoes to
avert loss on the part of Chan, and had
given the same instruction to Mangoba when the latter took over the sorting
job. She was given P400.00 and a pair of shoes by respondent Bautista for her
cooperation.^[4]

Bautista was asked to explain her alleged participation in the
incident. Hearings were conducted on
December 11, 14 and 16, 1987. On December 24, 1987, petitioner wrote Bautista,
terminating her services effective December 28, 1987, for:

“willful breach of the trust reposed
on you by the Company thru violations you have committed against our Company
Rules and Regulations as provided below:

Rule XIV – Sec. 2. Bribery or
offering or accepting anything of value in exchange for a job work, assignment,
work location, or favorable condition or employment.

Rule
XIV – Sec. 32. Engaging or
conniving in anomalous transactions.

Rule XVIII – Sec. 9. Using Company
time, or materials or equipment to do unauthorized work within or without the
Company premises for personal gain.

Rule XIV – Sec. 17. Causing loss of
time/and/or money to the Company because of negligence or inefficiency in the
performance of official duties or persistently doing unsatisfactory work.”^[5]

Bautista contested her dismissal through a complaint filed before
the NLRC NCR Arbitration Branch. No amicable settlement having been reached,
hearing on the merits ensued.

On July 31, 1989, Labor Arbiter Felipe P. Pati rendered judgment
“ordering the respondent (Isetann) to reinstate the complainant to her
former position without loss of seniority rights and to pay her full backwages
and other benefits from the time she was illegally dismissed until actual
reinstatement plus ten (10) percent of the total award as Attorney’s fees
payable to counsel.”^[6] The
Labor Arbiter ruled that no fraud or anomaly attended the accomplishment of the
purchase order of Chan’s June 2, 1987 shoe delivery but only an error in its
preparation as admitted by Mangoba when first confronted therewith. No credence
was given to the testimonies of Capua and Mangoba that they were instructed by
private respondent to mix the shoes to avoid loss on the part of Chan because
nobody would “agree to outrightly transact or enter into a losing
proposition or business” and Chan herself testified that she would already
be getting a marginal profit from the correct price of the shoes. Moreover,
Arbiter Pati noted that petitioner’s own version that the anomaly was discovered
in July, 1987 was irreconcilable with the fact that Chan was paid the correct
amount as early as June, 1987 and she was still allowed to supply shoes to
petitioner until September 1987. In fine, the Labor Arbiter concluded that
petitioner Isetann had failed to substantiate the charges imputed to private
respondent and that there was no basis for her dismissal on the ground of loss
of trust and confidence.

On appeal by petitioner Isetann, the National Labor Relations
Commission sustained the Arbiter’s conclusion that the fact of payment on June
29, 1987 of the cost of the delivery rendered incredible the testimonies of
Capua and Mangoba that after the anomaly was discovered either in July or
November, the purchase order was cancelled and a new check for the correct
amount was prepared and their conflicting testimonies that the anomaly was
discovered in July or November, as Chan was allowed to deliver shoes to
petitioner until September, 1987. The
NLRC also considered as grounds for rejecting the confessions of Mangoba and
Capua the delay in their execution as well as the statement of Mangoba during
her cross-examination that “they were threatening me”,
“they” being taken to mean petitioner. Taking note of the amount
involved, the NLRC found the testimony of respondent Bautista that she had
nothing to do with the alleged fraudulent mixing of shoes easier to believe
since she would not risk her supervisorial job and seven years of service for a
measly sum of P1,317.00.

In the petition at bar, petitioner assails the affirmance by the
NLRC of the Labor Arbiter’s decision as constituting grave abuse of discretion
because the Arbiter not only failed to accord due weight to petitioner’s
testimonial and documentary evidence, but more importantly, misapprehended the
same, thereby drawing conclusions that were entirely incongruent and
fallacious.

The recognized rule is that the employer has a distinct
prerogative to dismiss an employee if the former has ample reason to distrust
the latter or if there is sufficient evidence to show that the employee has
been guilty of breach of trust. The law does not require proof beyond
reasonable doubt of the employee’s misconduct before the employer can invoke
such authority. It is sufficient that there is some basis for the loss of trust
or that the employer has reasonable grounds to believe that the employee is
guilty of misconduct and that the nature of the employee’s action renders him
or her unworthy of the trust and confidence demanded by the position.^[7]

In the case at bar, Bautista’s involvement in the anomaly
complained of was sufficiently shown by the corroborating testimonies of Capua
and Mangoba. Both the Labor Arbiter and the NLRC gravely abused their
discretion in rejecting said testimonies, acting as they did under gross
misapprehension of facts. No contradiction arises from the fact of payment on
June 29, 1987 and petitioner’s witnesses’ statement that the anomaly was
discovered in July or November of the same year. What was discovered in July
was only the switch of figures in the purchase order then ascribed to nothing
more than inattention or carelessness. It was not until November, when Mangoba
executed her written statement, that respondent Bautista’s hand in said
interchanging was discovered. Only then when what appeared to be a mere error
in the preparation of the purchase order was revealed to be an aborted
fraudulent scheme involving private respondent. Thus, it was likewise not
illogical that Chan continued to supply shoes to petitioner until September.

Another reason given by the Labor Arbiter for rejecting the
testimonies of Capua and Mangoba is that nobody would “agree to outrightly
transact or enter into a losing proposition or business.”^[8]
This exemplifies what petitioner terms an incongruous and fallacious conclusion. Whether or not Chan really stood to lose in
the transaction if no switch in figures was made is immaterial. What matters is not the truth or falsity of
that statement, but rather that this was the reason given by private respondent
in urging and convincing Capua to fraudulently mix the “Valencia” with the
deerskin shoes.

Equally “incongruous and fallacious” is the
interpretation given by the NLRC to the following portion of Mangoba’s cross
examination:

“ATTY. FULE:

Q. Madam witness, in your statement you stated
therein and I quote the last paragraph, ‘Sana po ay maunawaan po ninyo ang
aking katayuan sa hindi ko po pagtatapat kaagad.’ What do you mean by the term
‘katayuan’?

“Witness:

A. Because I was afraid because they are threatening
me.”^[9]

Said the labor tribunal:

“The revelation, coming as it does from Isetann’s principal
witness on cross-examination, is worthy of belief. It is also significant
because threat having been employed — to be sure by
Isetann’s management for to suppose otherwise would lead to absurdity — the
credibility of the so-called confession has been reduced to naught, more so
considering that absence of any plausible reason why it took Iglesia Mangoba
several months to come up with the alleged confession for the same reason, the
alleged confession of Connie Capua, made after Mangoba’s confession, could
hardly be considered also.”^[10]

Contrarily, this response of Mangoba strengthened, rather than
diminished her credibility, as it explained why it took her several months to
disclose private respondent’s involvement in the anomaly. In fact, she was
asking management to understand her plight in not revealing the scheme sooner
because respondent Bautista was threatening her. “They” in her response
did not refer to management, but to private respondent and her husband, the
latter reputedly a policeman. We echo petitioner’s observation that it would be
absurd to suppose that the reason Mangoba did not immediately report the anomalous activity of private respondent
is because she was threatened by petitioner. For why would petitioner prevent
Mangoba from divulging said information when such disclosure would certainly
redound to its benefit? Would it not
serve management’s interest if an anomaly in the company is reported
immediately to it once discovered?

It was, therefore, grave abuse of discretion on the part of
respondent NLRC to affirm the conclusions reached by the Labor Arbiter based on
gross misapprehension of facts and itself to reach conclusions clearly contrary
to the evidence presented. We rule that petitioner has shown by sufficient
evidence respondent Bautista’s involvement in the fraudulent transaction. There
was valid cause for petitioner’s losing the trust and confidence reposed upon
her as a supervisorial employee, and consequently, in dismissing her from its
service.

WHEREFORE, the petition is hereby GRANTED. The assailed
Resolution of the NLRC Second Division, and decision of the Labor Arbiter are
ANNULLED and SET ASIDE, and private petitioner’s complaint for illegal
termination of employment DISMISSED.

SO ORDERED.

Padilla, Regalado, Nocon, and
Puno, JJ., concur.

^[1]
Composed of Presiding Commissioner Edna Bonto Perez, Commissioners Rustico L.
Diokno (Ponente) and Domingo H. Zapata.

^[2]
Petition, p. 8. Rollo, p. 9.

^[3]
Annex “B”, Petition, Rollo, pp. 36-42.

^[4]
Annex “C”, Petition, Rollo, pp. 43-46.

^[5]
Annex “F”, Petition, Rollo, p. 53.

^[6]
Annex “I”. Petition, Rollo, pp. 77-78.

^[7]
Top Form Mfg. Co. Inc. vs. NLRC, G.R. No. 6655706, December 11, 1992, 216
SCRA 313; citing Valladolid vs. Inciong, 121 SCRA 205 [1983]; DOLE
Philippines. Inc. vs. NLRC, 123 SCRA 673 [1983]; Ocean Terminal
Services, Inc. vs. NLRC, 197 SCRA 491 [1991]; Baguio Country Club
Corporation vs. NLRC and GENOVE, G. R. No. 102397, September 4. 1992.

^[8]
p. 6, Labor Arbiter’s Decision, Annex “I” Petition, p, 76, Rollo.

^[9]
TSN, p. 32,, April 25, 1988; italics supplied

^[10]
page 9, NLRC Resolution, Annex “A”, Petition, p. 35, Rollo.