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JEROME M. DAABAY, petitoner v.

BOTTLERS PHILS., INC., respondent
G.R. No. 199890 | August 19, 2013
Petitioner Jerome Daabay was employed as Sales
Logistics Checker with Coca-Cola Bottlers Phils., Inc.
until his termination in June 2005, following receipt of
information that he was part of a conspiracy that allowed
the pilferage of company property. The losses to the
company comprised of cases of assorted softdrinks,
empty bottles, missing shells and missing pallets valued
at P20,860,913.00.
After requiring Daabay to explain in writing his
participation in the scheme, followed by a formal
investigation, Coca-Cola served upon Daabay a Notice
of Termination that cited pilferage, serious misconduct
and loss of trust and confidence as grounds.
Daabay filed a complaint for illegal dismissal, illegal
suspension, unfair labor practice and monetary claims
against Coca-Cola Bottlers Phils., Inc. and three officers
of the company.
On April 18, 2008. Executive Labor Arbiter Noel
Magbanua rendered a decision in favor of Daabay. He
ruled that Daabay was illegally dismissed because his
participation in the alleged conspiracy was not proved by
substantial evidence. He further ordered the payment to
Daabay of backwages and separation pay (1 month for
every year of service) or retirement benefits, as may be
Upon Coca-Cola et al's appeal with the NLRC, the NLRC
reversed the finding of illegal dismissal. It held that there
was "reasonable and well-founded basis to dismiss
Daabay, not only for serious misconduct, but also for
breach of trust or loss of confidence arising from such
company losses". It ruled that Daabay's participation in
the conspiracy was sufficiently established, evidenced
by his signature in several documents that made the
fraudulent scheme possible, as well as in his failure to
detect the pilferage, considering that such is necessarily
connected with his duties and functions. Despite the
ruling on the legality of the dismissal, however, the
NLRC awarded retirement benefits in favor of
Coca-Cola filed a partial motion for reconsideration to
assail the award of retirement benefits. NLRC denied the
MR, explaining that "there was a need to humanize
the severe effects of dismissal" and "tilt the scales
of justice in favor of labor as a measure of equity
and compassionate social justice."
Coca-Cola appealed to the CA. The CA agreed that the
award of retirement benefits lacked basis, considering

that Daabay was dismissed for just cause. It granted

Coca-Cola's petition and deleted the portion of the NLRC
resolution remanding the case to the Executive Labor
Arbiter or Regional Arbitration Branch of origin for
computation of retirement benefits.
Whether Daabay is entitled to the retirement benefits
awarded by NLRC, despite his dismissal for a just
No. Being intended as a mere measure of equity and
social justice, the NLRCs award was then akin to a
financial assistance or separation pay that is granted
to a dismissed employee notwithstanding the legality of
his dismissal. Jurisprudence on such financial
assistance and separation pay then equally apply to this
case. The Court has ruled, time and again, that financial
assistance, or whatever name it is called, as a
measure of social justice is allowed only in
instances where the employee is validly dismissed
for causes other than serious misconduct or those
reflecting on his moral character. As explained in
PLDT v NLRC: "[S]eparation pay shall be allowed as a
measure of social justice only in those instances where
the employee is validly dismissed for causes other than
serious misconduct or those reflecting on his moral
character. Where the reason for the valid dismissal is, for
example, habitual intoxication or an offense involving
moral turpitude, like theft or illicit sexual relations with a
fellow worker, the employer may not be required to give
the dismissed employee separation pay, or financial
assistance, or whatever other name it is called, on the
ground of social justice."
A contrary rule would have the effect of rewarding rather
than punishing the rring employee of his offense. If the
employee who steals from the company is granted
separation pay even as he is validly dismissed, it is not
unlikely that he will commit a similar offense in his next
employment because he thinks he can expect a like
leniency if he is again found out. This kind of misplaced
compassion is not going to do labor in general any good
as it will encourage the infiltration of its ranks by those
who do not deserve the protection and concern of the
Considering that Daabay was declared by the NLRC to
have been lawfully dismissed by Coca-Cola on the
grounds of serious misconduct, breach of trust and loss
of confidence, the award based on equity is