030 Hocheng Philippines Corporation vs Antonio Farrales (GR No.

211497 | 18 March 2015)

J. Reyes | Topic: Construction In Favor of Labor

Quick Summary: Due to an incident regarding an allegedly stolen motorcycle helmet, HPC terminated Farrales, then in a
supervisory position in the company. Farrales filed a complaint for illegal dismissal. The LA ruled for Farrales, but on appeal to
the NLRC the decision was reversed. The NLRC found substantial evidence of just cause to terminate Farrales. On appeal, the CA
reversed the decision of the NLRC because they said that Farrales’ taking of the helmet did not amount to theft. The SC held that
although findings of administrative agencies are respected, there are certain exceptional cases where the SC would delve into the
factual findings of the NLRC, such as when the LA and the NLRC have conflicting positions. They then held that the CA was
correct in affirming the LA decision. There was no intent to gain when Farrales took the helmet, as evidenced by the promptness
of his return of the helmet when he was made to realize his error. The case was dismissed.

Facts:

• Hocheng Philippines Corporation (HPC) first employed Farrales as Production Operator and he was promoted up the ranks until
Assistant Unit Chief of Production in 2008 (a supervisory position with a monthly salary of P17,600)
• consistent recipient of citations for outstanding performance and appraisal + year end bonuses
• Dec 2, 2009 — report reached management that an employee’s (Reymar Solas’) motorcycle helmet was stolen in their parking
lot on Nov 27
• Next day, Security Officer Paragas confirmed a cctv recording that around 3 PM, Farrales was seen to have taken the missing
helmet from the parked motorcycle

• Farrales was asked to explain. In his explanation, he said that he borrowed a helmet from his co-worker Eric Libutan since they
live in the same barangay. He said that they agreed Eric could get it from his house later or when they see each other again. Eric
told him that his motorcycle was color black. Since there were a lot of motorcycles, Farrales asked Andy Lopega (another
employee) who was in the parking area, where he could find Eric’s helmet. Andy handed over the supposed helmet, and Farrales
went home
• A few days later on Dec 3, when Farrales saw Eric at their workplace, he asked why Eric hadn’t yet gotten his helmet. Eric
then told him that his helmet wasn’t the one that Farrales took. Farrales asked the guards to help him locate the helmet’s
owner and after they found out that the owner is Jun Reyes’ nephew Reymar. Farrales apologized to Jun and undertook to
return the helmet and explained it was a mistake.

• Hearing — There were some inconsistencies with Farrales’ explanation, which Farrales said was because he could no longer
remember some of the details of what happened

• Feb 15, 2010 — HPC issued Notice of Termination

• dismissed him for violation of HPC Code of Discipline
• “stealing from company, its employees … is akin to serious misconduct and fraud or willful breach by the employee of the
trust reposed in him by his employer or duly authorized representative” —> just causes for termination under Art 282 of the
Labor Code

• Mar 25, 2010 — Farrales filed a complaint for illegal dismissal, non-payment of appraisal and mid-year bonuses, SIL pay and
13th month pay

• Mandatory conference — HPC paid Farrales P10,914.51 representing 13th month pay and vacation leace/sickl leave. Farrales
agreed to waive claim for incentive bonus

Proceedings in LC:

• LA: ruled in favor of Farrales

• found HPC and officers guilty of illegal dismissal
• HPC appealed. NLRC: reversed LA and denied Farrales’ MR
• found that there was substantial evidence of just cause to terminate Farrales
• CA: Reversed NLRC, affirmed LA
• CA agreed with LA that Farrales’ act of taking Reymar’s helmet did not amount to theft and held that HPC failed to prove
that Farrales’ conduct was induced by a perverse and wrongful intent to gain (because of Eric’s admission that he did let
Farrales borrow 1 of his 2 helmets, but Farrales mistook Reymar’s helmet as the one belonging to Eric)
HPC Argument:

• Because Farrales is a supervisorial employee, he is subject to stricter rules of trust and confidence and so pursuant to their
management prerogative HPC has a wider latitude of discretion to assess Farrales’ continuing trustworthiness. HPC thus argues
that only substantial proof of Farrales’ guilt for theft is needed to establish the just causes to dismiss him, as the NLRC discussed.

W/N the Court can look into the NLRC’s factual conclusions? - YES.

• Art 4 of LC mandates that all doubts in the implementation and interpretation of the provisions thereof shall be resolved in favor
of labor

• Consistent with State’s avowed policy to afford protection to labor (Art 3 of LC and Sec 3, Art 13 of 1987 Consti) Court
has held that “to be lawful, the cause for termination must be a serious and grave malfeasance to justify the deprivation
of a means of livelihood.”

• Also, penalty imposed on erring employee must be proportionate to the offense, taking into account its nature and surrounding
circumstances

• Therefore, in exceptional cases, the Court has not hesitated to delve into the NLRC’s factual conclusions where evidence was
found insufficient to support them or too much was deduced from the bare facts submitted by the parties, or the LA and the
NLRC came up with conflicting positions as is true in the case

Application to Instant Case:

• LA pointed out that HPC wasn’t able to discharge burden of proof that Farrales’ took Reymar’s helmet with intent to gain
because —
• Farrales looked for and received permission of Eric (co-employee and barangay co-resident) to borrow his helmet
• In the parking lot, Farrales asked another employee (Andy) to fetch a yellow helmet from one of the parked motorcycles,
mistakenly thinking it belonged to Eric (who he knew had 2 helmets)
• The next day, Farrales asked Eric why he hadn’t gone to Farrales’ house to get his helmet and Eric answered that Farrales
got the wrong helmet
• Farrales immediately sought the help of the company guards to locate the owner of the yellow helmet who turned out to be
Reymar
• Farrales apologized to Reymar and his apology was accepted

• NLRC found out that Farrales lied when 1) he told Any that the yellow helmet belonged to him; and 2) when he claimed that
Eric was his neighbor
• they ruled that Farrales’ hazy recollection of events was doubtful
• these circumstances comprised substantial proof belying Farrales’ good faith

• Court agrees with CA that Farrales committed no serious or willful misconduct or disobedience as to warrant his
dismissal
• Not disputed that Farrales didn’t waste time in returning the helmet to Reymar when he was told of his mistake
• This proves that there was no such depravity of conduct that would justify HPC losing their trust in him
• Where there is no showing of a clear, valid and legal cause for termination of employment, the law considers the case a matter
of illegal dismissal. If doubts exist between the evidence presented by the employer and that of the employee, the scales of justice
must be tilted in favor of the latter. The employer must affirmatively show rationally adequate evidence that the dismissal was
for a justifiable cause.

RULING: Petition denied.