Reynaldo Hayan Moya v First Solid Rubber Industries, Inc.

G.R. No. 1840111 | September 18, 2013

Facts of the Case:

Reynaldo Moya was hired by First Solid Rubber Industries Inc. as a machine operator
and was promoted as the head of the Tire Curing department of the company. He reported
about an incident of undercuring of tires which led to the damage of five tires. The company
investigated the matter and required him to explain. At first he reasoned out that the damage
was caused by machine failure and that it was not due to any fault of the operator. He insisted
that the cause of the damage was due to premature hauling of the tires before curing time.
However, the investigation conducted by the company revealed that the damage was
caused by the operator’s unlawful setting of the timer from manual to automatic without Moya’s
permission. He did not disclose that the operator was at fault.
Eventually, he retracted his earlier statements and asked for forgiveness from the
employer. He admitted his mistake of not disclosing the true incident which transpired and
explained that he found it more considerate to just let the operator be suspended and be fined
for the damage committed. He also denied any willful intention to conceal the truth or cover up
the mistake of the employee.
This prompted the company to terminate Moya’s employment through a letter. The
company has also complied with the twin-notice requirement. Aggrieved, Moya filed before the
NLRC - National Capital Region a complaint for illegal dismissal against the company and its
President Edward Lee Sumulong. He also prayed that payment of backwages, separation pay,
moral and exemplary damages be awarded.

Issues:
1. Whether or not Moya was illegally dismissed;
2. Whether or not Moya will be entitled to separation pay

Ruling:
A. Moya was not illegally dismissed as it was done with a just cause
One of the just causes for terminating an employee under Article 282 of the Labor Code
is “fraud or willful breach by the employee of the trust reposed in him by his employer or duly
authorized representative”. The Supreme Court held that the labor arbiter, NLRC and the
appellate court were unanimous in saying that there was a valid ground for the dismissal of
Moya based on loss of trust and confidence.
Moya was not just an ordinary rank-and file employee as he was holding a supervisory
rank being an Officer-in-Charge for the Tire Curing Department. The position, naturally one of
trust, required of him abiding honesty as compared to ordinary employees. When he made a
false report attributing the damage of five tires to machine failure, he breached the trust and
confidence reposed upon him by the company.
Based on the doctrine of management prerogative, employers have the inherent right to
regulate all aspects of employment and this includes dismissal. As long as the exercise of the of
judgment is in good faith to advance its interest and not for purposes of circumventing the law
as well as the rights of the employees, such exercise will be upheld.
In the case of The Coca-Cola Export Corporation v Gacayan, the employers have the
right to impose a penalty of dismissal by reason of loss of trust and confidence. More so, in the
case of supervisors, does loss of trust justify termination. Loss of confidence as a just cause for
termination is premised on the fact that an employee concerned holds a position of trust and
confidence this means that the person is entrusted with confidence on delicate matters such as,
but not limited to, protection of employer’s property. To further constitute as a just cause for
dismissal, the act complained must be work-related that would show that the employee
concerned is unfit to discharge his functions.
In this case, Moya was a supervisor, a position of trust and confidence and the
non-disclosure of the actual thing that transpired was work-related. In fact, the Supreme Court
enunciated that the issue on illegal dismissal is no longer the crux of the controversy here as the
labor arbiter, NLRC and the appellate court are unanimous in their decisions on the matter.

B. Moya is not entitled to separation pay

Moya claimed that his length of service should be considered in awarding separation
pay, however in the case of Unilever Philippines, Inc. v Rivera, the Supreme Court held that an
employee who has been dismissed for any of the just causes enumerated under Article
282 of the Labor Code, including breach of trust, is not entitled to separation pay. To
further bolster this decision Section 7, Rule 1, Book VI of the Omnibus Rules implementing the
Labor Code provides that:

Sec. 7.Termination of employment by employer. — The just causes for terminating the
services of an employee shall be those provided in Article 282 of the Code. The separation
from work of an employee for a just cause does not entitle him to the termination pay
provided in the Code, without prejudice, however, to whatever rights, benefits and privileges he
may have under the applicable individual or collective agreement with the employer or voluntary
employer policy or practice.

This notwithstanding, an employee may claim for separation pay based on “social
justice” or on “equitable grounds”, but only in those instances where the employee is validly
dismissed for causes other than serious misconduct or those reflecting on his moral character
(PLDT v NLRC).

In this case, Moya’s dismissal is based on one of the grounds under Article 282 of the
Labor Code. Also, he is outside of the protective mantle of the principle of social justice as his
act of concealing the truth from the company is clear disloyalty to the company which has long
employed him.

Contrary to Moya’s claim that his length of service should be considered in awarding
separation pay, the Supreme Court in the case of Reno Foods, Inc. v Nagkakaisang Lakas ng
Manggagawas (NLM)- Katipunan held that his claim could even be taken against him. In that
case, it was enunciated that “length of service is not a bargaining chip that can simply be
stacked against an employer…It is only fair to expect a long- time employee to return such
fairness with at least some respect and honesty. Thus, it may be said that betrayal by a
long-time employee is more insulting and odious for a fair employer”.