University of the Philippines College of Law

JEBJ, 1-D

Topic Management Prerogative Limitations

Case No. G.R. No. 149433, December 15, 2010
Case Name Coca- Cola Group Inc v. Gacayno
Ponente Justice Leonardo De- Castro

RELEVANT FACTS
 Clarita P. Gacayna was employed by Coca- Cola on October 8, 1985 and would rise to the
position of Senior Financial Accountant before the termination of her employment on April 6,
1995.

 The company had a policy of reimbursing meal and transport expenses for employees who
worked at least 4 hours of overtime on weekends and holidays or two hours on weekdays with a
maximum amount set at 15o pesos. Respondent presented the ff receipts:
a. McDonalds Receipt No. 875493 dated October 1, 1994 for P111.00;
b. Shakeys Pizza Parlor Receipt No. 122658 dated November 20, 1994 for P174.06;

 Coca Cola however then issued memorandums to Gancayno requesting to explain the following:
a. On The alteration in the date of the McDonalds Receipt No. 875493
b. to explain in writing why her November 21, 1994 claim for reimbursement of meal expense
should not be considered fraudulent since there was an alteration in the receipt which she
submitted had a handwritten alteration which read 1 PF extra mojos which was superimposed
on the computer generated print-out of the food item actually purchased.

In the first case, respondent claimed her sister who delivered the food may have given her the
wrong receipt. Whereas, in the second case respondent claimed she had the Shakey’s courier
write a correction to her order. However, this was later proven false as she had ordered a Bunch
of Lunch pack and not a buddy pack.

 An investigation and hearing was then launched and in the process a third receipt (Shakeys Pizza
Parlor Receipt No. 41274 dated July 19, 1994 for P130.50) was also questioned if it had been
altered. It was discovered that said receipt was issued for food purchased on July 17, 1994 and
not for July 19, 1994. Following the investigation, petitioner was sent a letter of termination on
April 4, 1995.

 Respondent then filed a case with the Labor Arbiter which ruled in favor of Coca-Cola on June
17,1996. The case was brought before the NLRC which also ruled in favor of petitioner. The
case was then brought for review before the Court of Appeals which reversed the NLRC
decision.

ISSUE
 W/N the petition should have been dismissed outright?
 University of the Philippines College of Law
JEBJ, 1-D

 W/N The CA erred in reversing the NLRC and LA decisions?

RATIO DECIDENDI

Issue Ratio
 W/N the petition No.
should have been
dismissed outright? 1. The Supreme Court held that SC Circular No. 39-98 was already in affect
made the filing of the petition to the CA on June 8, 1998 a timely filing for the
case.

 W/N The CA erred in No.

reversing the NLRC 1. The Supreme Court reiterated that the Labor Code mandates that
and LA decisions? before an employer may validly dismiss an employee from the
service, the requirement of substantial and procedural due
process must be complied with. Under the requirement of
substantial due process, the grounds for termination of
employment must be based on just or authorized causes found in
Article 282.
2. The Court held that Gacayno’s dismissal was not under any of
the conditions stated to be grounds for termination in Article
282. The use of a loss of trust and confidence as termination was
found to be only applicable to managerial employees as defined
by Section 2(b), Rule I, Book III of the Omnibus Rules
Implementing the Labor Code.
3. The Court held that although management may have
prerogatives in the handling of employees but management must
always be fair and reasonable.
4. The Court held that the provisions of the Labor Code are to be
construed liberally in favor of labor and as such interpretation of
the law would justify the logic that the penalties on Gacayno
were too harsh. Thus the dismissal was illegal.

RULING
WHEREFORE, the petition is hereby DENIED. The Decision dated May 30, 2001 and subsequent Resolution dated
August 9, 2001 of the Court of Appeals are hereby AFFIRMED WITH MODIFICATION that backwages be awarded
from the time the compensation was not paid up to the time of her actual reinstatement.

SEPARATE OPINIONS

NOTES