MILAGROS PANUNCILLO vs. CAP PHILIPPINES, INC.G.R. No.

161305, February 9, 2007

FACTS: Panuncillo was hired as Office Senior Clerk by CAP Phil. Inc. Panunciallo procured an educational plan (plan)
from respondent which she had fully paid but she later sold it to JosefinaPernes (Josefina). Before actual transfer of the
plan, petitioner pledged it to John Chua who, however, sold it to BenitoBonghanoy. Benito in turn sold the plan to
GaudiosoUy. Josefinainformed respondent that petitioner had swindled her. Integrated Internal Audit Operations (ILAO)
of respondent required petitioner to explain in writing why the plan had not been transferred to Josefina.
Panuncillo explained that due to extreme need of money, she was constrained to sell the plan to Josefina but it was not
transferred right away because the requirement of birth certificate on the part of the buyer was lacking. While waiting for
the said requirement, again by reason of extreme need of money, she pawned the plan believing that she can redeem it later
when birth certificate will come. She also admitted that she has defrauded Josefina but didn’t do it intentionally.
A Show-cause memorandum was sent to Panunciallo giving her 48 hours from receipt to explain why she should not be
disciplinary dealt with. Panunciallo did not comply. Thus, the ILAO conducted an investigation, and recommended that
administrative action should be taken against petitioner for violating the Code of Discipline: “Committing or dealing any
act or conniving with co-employees or anybody to defraud the company or customer/sales associates.” ILAO also reported
that another demand letter from Ms. Casquejo was addressed to petitioner requiring latter to pay amount of the lapsed plan.
Panunciallo verbally admitted that portion of the money was misappropriated.

Another show-cause memorandum was sent to Panuncillo by FirstVP Daquiz of respondent. Panuncillo complied
reiterating her admission of having defrauded Josefina and having received from Casquejo the payment of the lapsed plan.
CAP thus terminated her services. A complaint for illegal dismissal was filed with the NLRC-Arbitration Branch. LA
found dismissal was for a valid cause but found the same too harsh and ordered the reinstatement of petitioner to
a position one rank lower than her previous position. On appeal, NLRC found that Panunciallo's dismissal was illegal
and ordered reinstatement to her former position. CAP filed a certiorari suit, and the CA reversed the NLRC's decision.

ISSUE: WHETHER OR NOT PANUNCILLO WAS VALIDLY TERMINATED.

HELD: YES
PETITIONER COMMITTED A BREACH OF TRUST/SERIOUS MISCONDUCT
Multiple complaints filed against the petitioner showed that she violated respondent’s Code of Discipline, thus,
violated the trust and confidence of respondents and its customers. And to allow her to continue with her employment puts
respondent under the risk of being embroiled in unnecessarylawsuits from customers similarly situated as Josefina, et
al. Clearly, respondent exercised its management prerogative when it dismissed petitioner. This Court has upheld a
company’s management prerogatives so long as they are exercised in good faith for the advancement of the employer’s
interest and not for the purpose of defeating or circumventing the rights of the employees under special laws or under valid
agreements.
VIOLATION OF COMPANY RULE
Deliberate disregard or disobedience of rules by the employees cannot be tolerated. Whatever maybe the
justification behind the violations is immaterial at this point, because the fact still remains that an infraction of the company
rules has been committed. Under the law, the employer may terminate an employment on the ground
of serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in
connection with his work. Infractions of company rules and regulations have been declared to belong to this category
and thus are valid causes for termination of employment by the employer.
LACK OF MATERIAL DAMAGE
Whether respondent did not suffer any damage resulting from the transactions entered into by petitioner, particularly
that with Josefina, is immaterial. In Lopez vs. NLRC, that the [employer] suffered no damage resulting from the acts of [the
employee] is inconsequential. In Glaxo Wellcome Philippines, Inc. v. NagkakaisangEmpleyado ng Wellcome-DFA (NEW-
DFA), it held that deliberate disregard or disobedience of company rules could not be countenanced, and any justification
that the disobedient employee might put forth would be deemed inconsequential. The lack of resulting damage was
unimportant, because the heart of the charge is the crooked and anarchic attitude of the employee towards his
employer. Damage aggravates the charge but its absence does not mitigate nor negate the employee’s liability.
REINSTATEMENT PENDING APPEAL
3rd Par, Art. 223 of LC, as amended, provide that an order of reinstatement by the Labor Arbiter is immediately
executory even pending appeal. Hence, even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it
is obligatory on the part of the employer to reinstate and pay the wages of the dismissed employee during the period
of appeal until reversal by the higher court.
In the present case, since the NLRC found petitioners dismissal illegal and ordered her reinstatement, under 6th Par
of Art. 223, LC, the NLRC decision became final and executory after ten calendar days from receipt of the decision by the
parties for reinstatement. In view, however, of Art. 224, LC, there was still a need for the issuance of a writ of execution
of the NLRC decision. Unlike then the order for reinstatement of a LA which is self-executory, that of the NLRC is
not. There is still a need for the issuance of a writ of execution. It does not appear that a writ of execution was issued for the
implementation of the NLRC order for reinstatement. Had one been issued, respondent would have been obliged to reinstate
petitioner and pay her salary until the said order of the NLRC for her reinstatement was reversed by the Court of Appeals.