Case Digest: Hormillosa v. Coca-Cola

G.R. No. 198699 : October 9, 2013

REXIE A. HORMILLOSA, Petitioner, v. COCA-COLA BOTTLERS PHILS., INC., represented by its Iloilo Plant Human Resource Head, ROBERTO RICHARD H. DOLAR, Respondent.



Petitioner Hormillosa was employed as a route salesman by Coca-Cola Bottlers Phils., Inc. (CBPI). His duties included, among others, selling CBPIs soft drink products, either on cash or on credit basis; receiving payments from proceeds of the sale or payments of past due or current accounts; issuing sales invoices; and receiving empty bottles and cases of soft drinks (empties).

Concerning the sales invoices, he was authorized to issue them on a cash and credit basis. He prepared the invoices stating the names of the customers, the quantity and kind of merchandise purchased, and the corresponding amounts. He was required to make the customers sign the invoices, especially in cases they were on credit basis, and leave copies with them. The invoices were then submitted to the Finance Department for accounting and auditing.

The then CBPI District Sales Supervisor, Raul S. Tiosayco III conducted a verification and audit of the accounts handled by Hormillosa. He discovered transactions in violation of CCBPI Employee Code of Disciplinary Rules and Regulations, specifically Fictitious sales transactions and fictitious issuances; Falsification of company records/data/documents/invoices/reports; non-issuance or mis-issuance of invoices and receipts as well as commercial documents to dealers; forgery; misuse, abuse or defalcation of funds form market development program.

After due notice and hearing, petitioner was terminated in his employment. Hormillosa filed a complaint for illegal dismissal.

The LA dismissed Hormillosas complaint ruling that his termination was proper however, awarded him a separation pay, citing the case of Magos v. NLRC, 360 Phil. 670 (1998),where it was stated that separation pay could be granted as a form of equitable relief even if the dismissal was for a just cause.

On appeal, the NLRC ordered the remand of the case to the SRAB to give Hormillosa the opportunity to confront the witnesses and evidence against him. Moreover, it stated that Section 5(b), Rule V of the 1990 NLRC Rules was not observed.

The SRAB, this time through LA Acosta, ruled that Hormillosa was illegally dismissed but did not order his reinstatement due to strained relations. It was decreed that he was entitled to backwages and separation pay.

CBPI appealed to the NLRC, arguing that the decision of LA Acosta was bereft of factual findings, applicable laws and legal principles. It insisted that the dismissal of Hormillosa was proper considering that the charges against him were proven by substantial evidence.

The NLRC upheld the decision of LA Acosta. CBPI moved for reconsideration but its motion was denied.

CBPI elevated the matter to the CA via a petition for certiorari under Rule 65.

The CA nullified and set aside the NLRC decision and held that the dismissal of Hormillosa was valid. According to the CA, Hormillosa was validly dismissed under Article 282 (c) of Labor Code, as amended. It states that loss of confidence applies to cases involving employees who occupy positions of trust and confidence or to those situations where the employee is routinely charged with the care and custody of the employers money or property.The CA pointed out that there were established circumstances proving such breach of trust and confidence.

Hence, the latter is validly dismissed from his employment. Without finding of illegal dismissal, the monetary awards bestowed on him by the SRAB No. VI and modified by public respondent have no basis.

Hence, this appeal.

ISSUE : Whether or not the Court of Appeals erred in validly dismissing the Petitioner.

HELD: The decision of the Court of Appeals is sustained


Art. 282. Termination by employer. An employee may terminate an employment for any of the following causes.
(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative;
(d) Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representative; and
(e) Other causes analogous to the foregoing.
The rule is that, in labor cases, substantial evidence or such relevant evidence as a reasonable mind might accept as sufficient to support a conclusion is required.The CA was correct when it ruled that Hormillosas employment was validly terminated under paragraph (c) of the above provision. There was substantial evidence to justify his dismissal.

In Bristol Myers Squibb (Phils.), Inc. v. Baban, G.R. No. 167449, December 17, 2008the Court discussed the requisites for a valid dismissal on the ground of loss of trust and confidence as follows.

It is clear that Article 282(c) of the Labor Code allows an employer to terminate the services of an employee for loss of trust and confidence. The right of employers to dismiss employees by reason of loss of trust and confidence is well established in jurisprudence.

The first requisite for dismissal on the ground of loss of trust and confidence is that the employee concerned must be one holding a position of trust and confidence.

There are two (2) classes of positions of trust. The first class consists of managerial employees. They are defined as 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, etc. They are defined as those who in the normal and routine exercise of their functions, regularly handle significant amounts of money or property.

The second requisite is that there must be an act that would justify the loss of trust and confidence. Loss of trust and confidence to be a valid cause for dismissal must be based on a willful breach of trust and founded on clearly established facts. The basis for the dismissal must be clearly and convincingly established but proof beyond reasonable doubt is not necessary. Garcia v. National Labor Relations Commission, G.R. No. 113774, April 15, 1998.

Hormillosa, being a route salesman, falls under the second class. By selling soft drink products and collecting payments for the same, he was considered an employee who regularly handled significant amounts of money and property in the normal and routine exercise of his functions.

Clearly, Hormillosa occupies a position of trust. As correctly pointed out by the CA, there was a high degree of trust and confidence reposed on him and when this confidence was breached, the employer was justified in taking the appropriate disciplinary action.

With regard to the second requisite for dismissal on the ground of loss of trust and confidence, the Court finds that Hormillosa committed acts which warranted his dismissal from employment.


The award of separation pay is authorized in the situations dealt with in Article 283 and Art. 284 of the Labor Code, but not in terminations of employment based on instances enumerated in Art. 282.

"The only cases when separation pay shall be paid, although the employee was lawfully dismissed, are when the cause of termination was not attributable to the employee's fault but due to : (1) the installation of labor saving devices, (2) redundancy, (3) retrenchment, (4) cessation of employer's business, or (5) when the employee is suffering from a disease and his continued employment is prohibited by law or is prejudicial to his health and to the health of his co-employees (Articles 283 and 284, Labor Code.) Other than these cases, an employee who is dismissed for a just and lawful cause is not entitled to separation pay even if the award were to be called by another name." Eastern Paper Mills, Inc. v. NLRC, 252 Phil. 618, 621 (1989).

In the case, the cause for the dismissal from employment of Hormillosa clearly falls under Article 282 of the Labor Code. Therefore, he is not entitled to any separation pay.