MANILA, Philippines — In Reno Foods, Inc., et al. v. Nagkakaisang Lakas ng Manggagawa – Katipunan on Behalf of its Member, Nenita Capor (G.R. No. 164016, March 15, 2010) the Supreme Court held:
“There is no legal or equitable justification for awarding financial assistance to an employee who was dismissed for stealing company property. Social justice and equity are not magical formulas to erase the unjust acts committed by the employee against his employer. While compassion for the poor is desirable, it is not meant to coddle those who are unworthy of such consideration.”
This case involves Reno Foods, a manufacturer of canned meat products, and one its employees, Nenita Capor (Capor). One day, before leaving the company premises, the guard on duty found six Reno canned goods wrapped in nylon leggings inside Capor’s fabric clutch bag. Because of this, Reno Foods terminated her employment.
Reno Foods also filed a criminal case for qualified theft against Capor.
For her part, Capor filed a complaint for illegal dismissal, reinstatement, back wages and other money claims against Reno Foods. She claimed that she was unaware that her clutch bag contained the pilfered canned products and theorized that Reno Foods had planted the canned goods in her belongings in order to avoid payment of her retirement benefits considering that after 39 years with the company, she was set to retire in about a year’s time.
The labor arbiter found that Capor was validly dismissed on the ground of serious misconduct. As such, she was not entitled to damages, reinstatement and back wages or separation pay.
On Appeal, the National Labor Relations Commission (NLRC) affirmed the dismissal of Capor but modified the ruling of the labor arbiter by awarding to Capor financial assistance in the form of separation pay equivalent to one-half month pay for each year of service.
The Court of Appeals affirmed the financial assistance to Capor, stressing that the laborer’s welfare should be the primordial and paramount consideration when carrying out and interpreting provisions of the Labor Code.
During the proceedings, Capor informed the Court of Appeals that she was acquitted in the criminal case for qualified theft filed by Reno Foods to further support her claim that she had been illegally terminated.
When the case was elevated to the Supreme Court, it affirmed Capor’s dismissal but reversed the award of financial assistance. In its decision, the Supreme Court made several significant pronouncements.
Acquittal in the criminal case
Capor claimed that since she was acquitted in the criminal case for qualified theft, it also means that Reno Foods had failed to present substantial evidence to justify her termination.
The Supreme Court rejected this argument on the ground that a criminal conviction is not necessary to find just cause for termination of employment.
An acquittal in a criminal case that is grounded on the existence of reasonable doubt does not preclude a determination in a labor case that the employee is guilty of acts inimical to the employer’s interests. As explained by the Supreme Court, criminal cases require proof beyond reasonable doubt, whereas labor disputes only require substantial evidence — or one that a reasonable mind might accept as adequate to justify a conclusion.
In the case of Capor, the Court of Appeals and two labor tribunals all found substantial evidence to conclude that Capor had been validly dismissed for dishonesty and serious misconduct.
READ: Issues on separation pay
Length of service and financial assistance
Previously decided cases have held that long years in service might generally be considered in the award of separation benefits or some form of financial assistance to mitigate the effects of termination. (Security Bank Savings Corporation v. Singson, GR 214230, Feb. 10, 2016)
However, in the case of Capor, who was employed by Reno for 39 years, the Supreme Court declared that financial assistance cannot be awarded as this is not only against the law but will also amount to a retrogressive public policy.
The Supreme Court declared that a dishonest employee cannot be rewarded with separation pay or any financial benefit after his culpability is established. To hold otherwise, even in the name of compassion, would send the wrong signal that not only does crime pay, but also that one can enrich himself at the expense of another in the guise of social justice. Courts and quasi-judicial entities would then be overrun by petitioners mouthing dubious pleas for social justice.
Before there can be an occasion for compassion and mercy, there must first be justice for all. Otherwise, employees will be encouraged to steal and misappropriate, expecting that eventually, in the name of social justice and compassion, they will not be penalized but instead be financially rewarded.
Length of service is not a bargaining chip that can simply be stacked against the employer. After all, the employer-employee relationship is symbiotic, where both parties benefit from mutual loyalty and dedicated service. If an employer has treated his or her employee well, according this employee fairness and adequate compensation as determined by law, it is only fair to expect a long-time employee to return such fairness with at least some respect and honesty.
READ: Does a losing business still need to provide separation pay?
Financial assistance
The Supreme Court also laid down guidelines on the grant of financial assistance or separation pay to validly dismissed employees, as a measure of social justice, as follows:
a. Financial assistance can only be granted when the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character;
b. Separation pay may only be allowed as a measure of social justice in instances where the employee is validly dismissed for causes other than the causes for dismissal provided for under Art. 282 (now 297) of the Labor Code of the Philippines, which are serious misconduct, willful disobedience, gross and habitual neglect of duty, fraud or willful breach of trust, commission of a crime against the employer or his family, or those reflecting on his moral character. /dda
READ: Businesses must release workers’ final pay on time
Your subscription could not be saved. Please try again.
Your subscription has been successful.
(The author, Atty. John Philip C. Siao, is a practicing lawyer and founding partner of Tiongco Siao Bello & Associates Law Offices, an arbitrator of the Construction Industry Arbitration Commission of the Philippines, and teaches law at the De La Salle University Tañada-Diokno School of Law. He may be contacted at [email protected]. The views expressed in this article belong to the author alone.)
