RELIANCE ON EQUIPOISE DOCTRINE WILL NOT DISCHARGE THE EMPLOYER’S BURDEN TO PROVE VALIDITY OF DISMISSAL

Rodfhel Baclaan Torrefiel, et al. Vs. Beauty Lane Phils., Inc./Ms. Ma. Henedina D. Tobojka, G.R. No. 214186. August 3, 2016

Facts:

Respondent Beauty Lane Phils., Inc. (Beauty Lane is a company engaged in the importation and distribution of certain beauty, aesthetic, and grooming products including, among others, a product called “Brazilian Blowout.” “Brazilian Blowout” is a set of grooming products composed of five (5) items worth a total of P40,000.00. It has a short lifespan and may only be used for a maximum of 50 times.

As exclusive distributor of “Brazilian Blowout,” Beauty Lane provides free training to its prospective buyers through its “beauty educators” who conduct trainings and demonstrations at the company’s training center, located in its three (3)-storey warehouse in Las Piñas City.

On January 3 to 5, 2013, respondents conducted an inventory in the warehouse and discovered discrepancies between the recorded stocks and the actual stocks of supply, particularly its “Brazilian Blowout” product. On January 25, 2013, Beauty Lane received information from its Sales Manager, Mark Quibral (Quibral), that one of its former employees is selling sets of “Brazilian Blowout” at a much lower price.

This prompted the warehouse supervisors to meet and discuss the results of the inventory, by virtue of which it was discovered that some sets of “Brazilian Blowout” were incomplete. It appeared that a different item is taken from each set and the items taken are combined to make a complete set. Respondents conducted a full-blown investigation, summoning and questioning employees on their involvement in the apparent pilferage. After comparing its client list vis-a-vis the salons and online sellers offering “Brazilian Blowout,” respondents discovered that Rean Metro Salon, a client registered under the account of Torrefiel who is a Sales Coordinator, had not been ordering “Brazilian Blowout” for months but continued to offer it and its allied services. Various salons and online sites were also selling whole sets of “Brazilian Blowout” as well as incomplete sets, which respondents surmised were leftovers from the sets used during training sessions. They also discovered that Torrefiel and Lao, a beauty educator, sold Gigi Professional Waxing System to Angelic Nails Spa and Waxing Salon, which is not among respondents’ approved clients.

Respondents issued Notices to Explain and Preventive Suspension against petitioners and two (2) other employees, including Marcel Mendoza (Mendoza), a beauty educator who also happened to operate his own salon. Torrefiel and Lao denied any participation in the alleged pilferage and maintained that they had no access to the “Brazilian Blowout” products. Lao further clarified that her access is limited to the training center where no “Brazilian Blowout” sets are stored. However, she admitted asking for help from Gonzales in selling the “Brazilian Blowout” inventory of one of respondents’ clients, Skinsational Salon, because its owner sought her help in disposing the products which did not sell well thereat.

For her part, Libot who was also a beauty educator, denied conniving with Torrefiel and Lao and maintained that she reported all her activities to Quibral. Meanwhile, Suacillo and Orenday asserted their lack of information on the allegations against them, pointing out that they were not among those questioned during the investigation.

Mendoza who, as stated earlier, also operated his own salon and was also asked to explain his participation in the pilferage, implicated Torrefiel and Lao in the anomaly. According to him, Torrefiel and Lao offered him a bottle of Professional Smoothing Solution which is part of the “Brazilian Blowout” set for only Pl 8,000.00. Lao was purportedly selling the same for her friend who owned a salon.

On February 27, 2013, an administrative hearing was held where petitioners, however, failed to appear. Instead, they sent letters stating that they had already submitted their respective written explanations, and that they had an appointment with the Department of Labor of Employment (DOLE) on the same day. After assessing the evidence before them, respondents sent Notices of Termination to petitioners on February 28, 2013.

Petitioners filed a complaint for illegal dismissal and money claims before the NLRC, averring that respondents had no valid cause in dismissing them as none of them had access to the stolen products. Specifically, Torrefiel maintained that he merely prepared the sales orders and it was the warehouse supervisor and the sales assistant who had access to the products. On the other hand, Lao and Libot emphasized that they were beauty educators for Gigi Professional Waxing System products only and, as such, had no access to “Brazilian Blowout” products. Meanwhile, Suacillo contended that she is merely an Administrative Assistant whose duties are limited to maintaining personnel files, preparing checks, managing office supplies, administering examinations to applicants, and cleaning the training center. She also emphasized that she was not among those investigated on February 1, 2013. Lastly, Orenday clarified that she was a Sales Assistant who merely encoded orders and delivery.

LA Ruling:

The LA dismissed the complaint for lack of merit, holding that there was valid cause for petitioners’ dismissal and due process therefor was observed. The LA pointed out that while no direct evidence was presented showing that petitioners indeed pilfered the “Brazilian Blowout” products, the circumstances of the case show that petitioners are guilty of the charges against them. The LA cited Torrefiel and Lao’s failure to refute the statements of their colleagues, Mendoza and Gonzales, directly identifying them as the ones selling sets of “Brazilian Blowout” at a lower price. They also failed to deny Mendoza’s averment that they had met with him and that the latter confronted them about the “Brazilian Blowout” sets which they tried to sell him. With respect to Suacillo and Orenday, the LA gave credence to respondents’ claim that they held the positions of Office Assistant and Inventory Officer, respectively, and as such, their failure to report the discrepancy in the recorded and actual stocks point to their complicity in the pilferage.

Petitioners appealed to the NLRC.

NLRC Ruling:

The NLRC reversed the decision of the LA, finding that petitioners were illegally dismissed, after observing that there was no proof of their involvement in the pilferage. The NLRC found merit in petitioners’ defense that they did not have access to the stolen items, and explained that they could not be dismissed for loss of trust and confidence since none of them held positions where trust and confidence are requirements for continued employment, except for Torrefiel who, in any case, was not shown to have committed an act that would justify the loss of trust and confidence.

With respect to Torrefiel and Lao’s alleged selling of “Brazilian Blowout” products at a lower price, the NLRC gave credence to the affidavit of Lea Tagupa, the owner of Skinsational Salon, who categorically stated that she had asked them to sell the “Brazilian Blowout” products she (Tagupa) previously bought from Beauty Lane but was not able to sell at her salon. According to the NLRC, Tagupa’s affidavit should be given more weight considering that she is a disinterested party, as opposed to Mendoza and Gonzales whose statements are biased since they were among those investigated upon and their statements were obtained while the investigation was ongoing. Moreover, the availability of “Brazilian Blowout” products and services in salons that no longer ordered from respondents does not prove that Torrefiel was guilty of pilferage since respondents themselves pointed out that “Brazilian Blowout” products are also available abroad and online, albeit illegally.

As regards Suacillo, Orenday, and Libot, the NLRC noted the lack of evidence to substantiate the allegations against them. It remarked that contrary to respondents’ claim, Orenday was no longer an Officer at the time the alleged anomalies happened since she was issued a Notice of Personnel Action reassigning her as Sales and Administrative Assistant. On the other hand, Suacillo’s duties as Office Assistant did not include monitoring and keeping an inventory. Besides, she had no knowledge of the inventory conducted which was carried out by her supervisors. In any case, Suacillo and Orenday were terminated without due process, considering that the notices sent to them failed to specify the particular acts or omission charged and they were not among the employees questioned during the February 1, 2013 investigation.

Respondents moved for reconsideration,49 which was, however, denied by the NLRC in its Resolution. Thus, Beauty Lane elevated the case to the CA via petition for certiorari.

CA Ruling:

The CA reversed the ruling of the and reinstated the findings of the LA. It pointed out that there was no dispute that “Brazilian Blowout” products were missing from respondent’s warehouse and that petitioners were individuals who had access to the room where the said products were stored. Furthermore, petitioners were implicated by their colleagues -namely, Mendoza and Gonzales -who had no axe to grind against them. Meanwhile, petitioners offered nothing but an all-encompassing denial without even bothering to controvert the allegations of their colleagues who had confessed.

These, according to the CA, constitute substantial evidence that petitioners pilfered the “Brazilian Blowout” products from respondent’s warehouse which amount to serious misconduct or willful disobedience to the lawful orders of their employer -both of which are just causes for their dismissal.

The issue of due process, the CA agreed with the LA that the due process requirements of notice and hearing were complied with since petitioners were asked to submit their respective written explanations in their participation in the pilferage and were notified of the administrative hearing set on February 27, 2013. That they did not attend the same was their own choice and was prompted by their stance that they had already submitted their written explanations on the matter.

Petitioners filed a motion for reconsideration, which was, however, denied in a Resolution58 dated September 10, 2014; hence, the present petition.

Issue:

Whether or not petitioners were validly dismissed from service

SC Ruling:

It is settled that in employee termination disputes such as the present case, the employer bears the burden of proving that the employee’s dismissal was for a lawful cause. Equipoise is not enough and the employer must affirmatively show rationally adequate evidence that the dismissal was for a justifiable cause. Although it is true that the guilt of a party in administrative proceedings need not be shown by proof beyond reasonable doubt, there must be substantial evidence to support it. Substantial evidence means that amount of relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other minds, equally reasonable, might conceivably opine otherwise.

In this case, respondents dismissed petitioners on the strength of circumstantial evidence which did not establish their participation in the pilferage. As aptly pointed out by the NLRC, the statements given by Mendoza and Gonzales only prove that Torrefiel and Lao offered them “Brazilian Blowout” products at a lower price. There is nothing in their testimonies that prove that Torrefiel and Lao pilfered the said items from Beauty Lane. On the other hand, Torrefiel and Lao persuasively explained that Tagupa, the owner of Skinsational Salon which is one of Beauty Lane’s clients, had asked for their help in disposing of the “Brazilian Blowout” products she previously bought from Beauty Lane but did not sell well in her salon. This statement was corroborated by Tagupa herself who executed an affidavit.

Even Mendoza himself stated that Torrefiel and Lao had told him that they were just reselling the Professional Smoothing Solution for their friend who owned a salon. Hence, although Torrefiel and Lao were selling the “Brazilian Blowout” at a lower price, there is no proof that they stole the same from Beauty Lane. On the contrary, the evidence on record all support their explanation that Tagupa merely solicited their help in disposing of the “Brazilian Blowout” products she (Tagupa) previously bought from respondents.

To be sure, although Torrefiel and Lao’s acts may involve a conflict of interest since Beauty Lane is the exclusive distributor of “Brazilian Blowout” products in the Philippines, this does not prove that they were guilty of the pilferage for which they were dismissed. Moreover, the fact that Rean Metro Salon stopped ordering “Brazilian Blowout” products from respondents but continued to offer the same and its allied service months later does not prove that Torrefiel stole the missing products from respondents, especially without showing that the “Brazilian Blowout” products used by Rean Metro Salon came from respondents’ stocks. To recall, respondents themselves admitted that “Brazilian Blowout” products are available in other establishments and online, although illegally. It is thus entirely possible that Rean Metro Salon may have sourced its supply of “Brazilian Blowout” products from other entities offering it. In addition, the LA and the CA hastily concluded that Torrefiel was guilty of pilferage simply because he was seen at Rean Metro Salon. As properly observed by the NLRC, his presence thereat was accounted for by his co-petitioner Libot who narrated that they went there to follow up an order before proceeding to another client. Incidentally, Libot, who was accused of conniving with Torrefiel, asserted that she reported all her activities to Quibral. Notably, Quibral did not deny this.

At this juncture, it should be pointed out that while Torrefiel was essentially a salesman, he did not occupy a position of trust and confidence, the loss of which is a just cause for dismissal. To recall, there are two (2) classes of positions of trust: the first class consists of managerial employees or those vested with the powers or prerogatives to lay down management policies and to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees or effectively recommend such managerial actions; the second class consists of cashiers, auditors, property custodians, and the like who, in the normal and routine exercise of their functions, regularly handle significant amounts of money or property. Here, respondents have not shown that Torrefiel had access to their money or property. On the contrary, Torrefiel maintained that he merely took orders from clients but had no access to the respondents’ products which are handled by warehouse supervisors and sales assistants. At any rate, even assuming that he regularly handled significant amounts of money or property, he cannot be dismissed on the ground of loss of trust and confidence considering that the basis therefor has not been established. It is settled that for dismissal based on such ground to be valid, the act that would justify the loss of trust and confidence must be based on a willful breach of trust and founded on clearly established facts which was not the case here.

At this juncture, it should be pointed out that while Torrefiel was essentially a salesman, he did not occupy a position of trust and confidence, the loss of which is a just cause for dismissal. To recall, there are two (2) classes of positions of trust: the first class consists of managerial employees or those vested with the powers or prerogatives to lay down management policies and to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees or effectively recommend such managerial actions; the second class consists of cashiers, auditors, property custodians, and the like who, in the normal and routine exercise of their functions, regularly handle significant amounts of money or property.

Here, respondents have not shown that Torrefiel had access to their money or property. On the contrary, Torrefiel maintained that he merely took orders from clients but had no access to the respondents’ products which are handled by warehouse supervisors and sales assistants. At any rate, even assuming that he regularly handled significant amounts of money or property, he cannot be dismissed on the ground of loss of trust and confidence considering that the basis therefor has not been established. It is settled that for dismissal based on such ground to be valid, the act that would justify the loss of trust and confidence must be based on a willful breach of trust and founded on clearly established facts which was not the case here.

The Court also agrees with the NLRC’ s observation that the rudiments of due process were not observed in dismissing Suacillo and Orenday. As correctly pointed out by the NLRC, the copies of the Notices to Explain and Preventive Suspension issued to them did not specify the charges against them but simply stated that they condoned and failed to report anomalies to the management. Time and again, the Court has repeatedly held that two (2) written notices are required before termination of employment can be legally effected, namely: (1) the notice which apprises the employee of the particular acts or omissions for which his dismissal is sought; and (2) the subsequent notice which informs the employee of the employer’s decision to dismiss him. The failure to inform an employee of the charges against him deprives him of due process. Besides, Suacillo and Orenday were not among those questioned during the February 1, 2013 investigation. Hence, they cannot be presumed to know exactly what anomalies respondents were referring to.
In any event, there was no valid reason for their dismissal considering the lack of proof of their involvement in the alleged pilferage. As conveyed by the NLRC, Suacillo’s duties as Office Assistant did not include monitoring and keeping an inventory and she cannot be presumed to know the results of the inventory which was conducted by her supervisors. Meanwhile, Orenday was no longer an Inventory Officer at the time the alleged anomalies happened since she was reassigned as Sales and Administrative Assistant. She cannot, therefore, be charged of responsibility for respondents’ inventory. All told, the respondents failed to prove by substantial evidence that petitioners were the authors of or at least participated in the alleged pilferage of the “Brazilian Blowout” products. Unlike respondents’ two (2) fornier employees, namely, Romar Geroleo and Cipriano Layco, who were caught red-handed in an entrapment operation, no direct evidence showing petitioners’ guilt was presented and respondents relied on inconclusive circumstantial evidence in determining who the perpetrators of the pilferage are. While proof beyond reasonable doubt is not required in dismissing an employee, the employer must prove by substantial evidence the facts and incidents upon which the accusations are made. Unsubstantiated suspicions, accusations, and conclusions of the employer, as in this case, are not enough to justify an employee’s dismissal.