Here’s a practical, everything-you-need-to-know explainer for the Philippines.

Can an employer file a case for misuse of company funds even if the money was repaid?

Short answer: Yes. Repayment usually does not erase liability. It can reduce or settle the civil side (the money owed) and may mitigate penalties, but the criminal and employment (administrative) consequences can still proceed if the facts support them.

1) Which kinds of cases are possible?

A. Criminal (filed with the Office of the City/Provincial Prosecutor)

Depending on the facts, misuse of company funds by an employee commonly aligns with:

Estafa (swindling) by misappropriation or conversion (Revised Penal Code, Art. 315(1)(b)) Typical when the employee received money in trust/for a specific purpose (e.g., cashier, collector, petty cash custodian) and used it for something else or failed to return/remit it.
Theft / Qualified Theft (RPC Arts. 308–310) Typical when the employee took funds without consent. It becomes qualified theft when done with grave abuse of confidence (e.g., by a trusted employee), which increases the penalty.
Falsification / Use of falsified documents (RPC Arts. 171–172) When receipts, vouchers, reimbursement documents, or time/expense records are falsified or altered.
Other special laws depending on the method (e.g., B.P. 22 for bouncing checks; Access Device Law for unauthorized use of cards/devices; E-Commerce/Cybercrime laws for digital tampering).

Effect of repayment on criminal cases: Paying back later does not “uncommit” the crime. It can:

reduce or extinguish civil liability (the amount owed),

be considered a mitigating circumstance (e.g., restitution, remorse),

influence the prosecutor/judge’s discretion (e.g., plea-bargaining), but it does not automatically bar or dismiss a criminal case that is otherwise complete on the evidence.

Choosing between estafa vs. (qualified) theft (quick test):

If the employee had only physical/material possession (e.g., access to the till) and took the money: usually theft/qualified theft.
If the employee had juridical possession—money was entrusted for a purpose (e.g., to reimburse, to remit, to pay suppliers)—and then misappropriated it: usually estafa.

Demand letter? Not an element of estafa/theft, but a written demand often helps prove misappropriation or negate honest mistake defenses.

Penalty amounts: Penalties for theft/estafa scale with the amount involved under the RPC as amended (e.g., by R.A. 10951). The bigger the amount, the heavier the penalty. (Exact brackets are technical; counsel will compute them.)

Prescription (time limits): Criminal prescription depends on the penalty attached (which depends on the amount), often ranging from 10 to 15 years for these property crimes. Get counsel to compute precisely for your case.

B. Administrative / Employment (within the company; may lead to dismissal)

Under the Labor Code (Art. 297 [formerly 282]), misuse of funds can constitute:

Serious misconduct
Fraud or willful breach of trust (loss of trust and confidence)
Commission of a crime or offense against the employer or its representatives

Due process (“twin-notice” rule):

First notice (charge sheet/NTE): State specific facts (who/what/when/where/how), company rules violated, and give the employee a reasonable period (commonly at least 5 calendar days) to submit a written explanation.
Hearing/conference: Optional but strongly recommended—let the employee explain, present evidence, and be assisted.
Second notice (decision): Explains the findings, rule violated, and penalty.

Preventive suspension: Allowed only if the employee’s continued presence poses a serious and imminent threat to company property or co-workers. Limit is up to 30 days; extending beyond that generally requires pay or reinstatement to a non-sensitive post while the case continues.

Standard of proof: Much lower than criminal—substantial evidence (i.e., relevant evidence a reasonable mind might accept). Independence of cases: An administrative dismissal can be upheld even if a criminal case is dismissed (and vice versa) because the standards of proof differ.

C. Civil (collection of damages)

You may sue for recovery of amounts, interest, liquidated damages, and attorney’s fees if justified (e.g., breach of fiduciary duty, quasi-delict).

Civil claims are often impliedly included with the criminal case unless you reserve the right to file them separately.
Repayment can end or reduce the civil claim, but document any settlement carefully.

2) What changes if the employee already repaid?

Dimension	What repayment changes	What it doesn’t change
Criminal	May mitigate penalty; may persuade prosecutor to recommend lesser offense/plea; civil aspect may be satisfied.	If all crime elements are present, criminal liability can still proceed; the State prosecutes crimes. Affidavit of desistance/settlement is not automatically controlling.
Administrative	May be considered in calibrating penalty (e.g., from dismissal to suspension in very limited, fact-specific scenarios).	Does not erase serious misconduct/breach of trust. Dismissal can still be lawful if supported by substantial evidence and due process.
Civil	Usually extinguishes or reduces the amount recoverable; parties may settle.	Doesn’t bind the public side of a criminal case unless the prosecutor/court agrees and the law allows.

3) How to proceed (step-by-step for employers)

Secure evidence immediately.
- Accounting ledgers, bank statements, voucher packets, reimbursement forms, e-mails/chat exports, CCTV, device logs, system access trails, receipts/invoices, petty-cash logs, authority matrices.
- Keep originals safe, make working copies, and maintain chain-of-custody notes.
Audit & fact-find.
- Reconcile figures; identify transactions, dates, counterparties, and approvals.
- Distinguish controls failure vs intentional misuse (affects charge and defenses).
- Draft a timeline of events.
Issue a written demand (optional but helpful).
- State the amount, basis, and a deadline to explain/pay.
- This is evidence of notice and may support misappropriation if ignored.
Open the internal case.
- Serve Notice to Explain with detailed charges and rule citations.
- Consider preventive suspension if criteria are met.
- Hold a hearing/conference; document minutes; allow representation.
- Evaluate and issue decision notice with reasons and penalty.
Decide on external actions.
- Criminal complaint: Prepare a sworn complaint-affidavit for the prosecutor with annexes (evidence list). Venue is typically where any material element occurred (e.g., where funds were received, misused, or should have been remitted).
- Civil action: Either ride with the criminal or reserve to file separately.
- Coordinate with counsel on venue, prescription, and amount-based penalties.
If repayment is offered:
- You may accept without waiving criminal/administrative claims—say so in writing.
- If you settle civil aspects, draft a clear settlement agreement (scope, amount, timeline, no admission or with admission, confidentiality).
- Avoid signing broad quitclaims that unintentionally waive criminal remedies unless that is your deliberate choice (and understand the consequences).
Mind the boundaries.
- Do not detain, threaten, or coerce payment; don’t seize personal property without legal basis.
- Keep the investigation confidential (need-to-know only).
- Follow data privacy and labor due-process requirements.

4) Common defenses—and how they’re evaluated

“No intent to gain / honest mistake.” Work errors happen. However, falsified documents, patterns of withdrawals, concealment, or refusals to remit tend to negate good faith.
“I had permission / company practice.” Written policies, authority matrices, and e-mail approvals are crucial. If there was no authority or exceeded authority, misuse can still be actionable.
“No demand was made.” Demand is not an element of estafa/theft (though often used as proof). Lack of demand is not an automatic defense.
“We already settled, case closed.” A civil settlement does not automatically bar a criminal case. Prosecutors/courts may still proceed if evidence suffices.

5) Penalties & exposure (high-level)

Criminal: Imprisonment ranges depend on the amount and the offense (estafa vs theft; qualified theft increases penalties). Restitution typically reduces civil liability and may mitigate the sentence but doesn’t erase the conviction if found guilty.
Administrative: Penalties range from reprimand to dismissal. For positions of trust (cashiers, accountants, managers), loss of trust and confidence is a common, valid ground when backed by substantial evidence and due process.
Civil: Recovery of principal, interest, damages, and attorney’s fees (when warranted).

6) Practical checklists

Evidence to annex in a prosecutor complaint:

Board/HR certifications of roles and authority; relevant policy excerpts.
Audit report with schedules; bank/GL extracts; voucher packets and receipts; payroll/expense reports.
E-mails/chats approving/denying disbursements; demand letters and replies.
For falsification: originals and questioned documents; handwriting/forensic indications if any.
A clear narrative tying each document to dates, amounts, and persons.

Key contents of a Notice to Explain:

Specific acts (date/amount/document ID/transaction).
Rules violated (policy title/section; Code of Conduct).
Invitation to submit a written explanation within 5 calendar days and to attend a conference.
The right to representation and to present evidence.

When to use preventive suspension:

If the employee’s presence poses serious and imminent threat to property/evidence or co-workers, or may interfere with the investigation.
Cap at 30 days; if extended, put the employee on pay or assign to a non-sensitive role.

7) FAQs

Q: If the employee paid everything back, should we still file a case? A: That’s a strategic call. Repayment is helpful, but if the act shows serious dishonesty or abuse of confidence, employers often proceed with administrative action to protect the workplace. The criminal case may still be filed if the elements are present; repayment alone doesn’t bar it.

Q: Can we hold the employee’s final pay to offset losses? A: Wage deductions are regulated. Best practice is to get written consent or secure a civil judgment/settlement that clearly authorizes set-off, to avoid illegal deduction issues.

Q: Will a dismissed criminal complaint doom our administrative case? A: Not necessarily. Different standards of proof apply. Many dismissals still stand on substantial evidence despite a criminal case being dropped.

Q: Where do we file the criminal complaint? A: With the Office of the City/Provincial Prosecutor where any material element occurred (receipt, misappropriation, non-remittance, making/using falsified documents).

8) Bottom line

Yes, the employer can still file cases—even after repayment—if the elements of the offense and rule violations are present.
Treat the matter on three tracks: criminal (public offense), administrative (workplace discipline), and civil (money/damages).
Document everything and follow due process. Repayment helps but is not a magic eraser.

This is general information for the Philippine context and not legal advice. Complexities like penalty computation, prescription, venue, and settlement wording are fact-sensitive—work with counsel to tailor the strategy and documents to your case.