Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. Nos. 142732-33 December 4, 2007
MRI!OU S. GENUINO, petitioner,
vs.
NTION! !"OR RE!TIONS COMMISSION, CITI"N#, N.., $I!!IM %ERGUSON,
&'( )I) R*#OT$!, respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. Nos. 1427+3-+4
CITI"N#, N.., $I!!IM %ERGUSON, &'( )I) R*#OT$!, petitioners,
vs.
NTION! !"OR RE!TIONS COMMISSION &'( MRI!OU GENUINO, respondents.
D E C I S I O N
VE!SCO, *R., J.,
T-e C&se
This Petition for Review on Certiorari under Rule 45 seeks to set aside the epte!ber "#,
$%%% &ecision
$
and March "$, '### Resolution
'
of the Court of (ppeals )C(* in the
consolidated cases docketed as C(-+.R. P ,os. 5$5"' and 5$5"". The appellate court
dis!issed the parties- petitions involvin. the ,ational /abor Relations Co!!ission-s
),/RC-s* &ecision
"
and Resolution,
4
which held that Marilou . +enuino was validl0
dis!issed b0 Citibank, ,.(. )Citibank*. The ,/RC likewise ordered the pa0!ent of salaries
fro! the ti!e that +enuino was reinstated in the pa0roll to the date of the ,/RC decision.
1pon reconsideration, however, the C( !odified its decision and held that Citibank failed to
observe due process in C(-+.R. P ,o. 5$5"'2 hence, Citibank should inde!nif0 +enuino
in the a!ount of PhP 5,###. 3oth parties are now before this Court assailin. portions of the
C(-s rulin.s. 4n +.R. ,os. $4'5"'-"", +enuino assails the C(-s findin. that her dis!issal
was valid. 4n +.R. ,os. $4'55"-54, Citibank 6uestions the C(-s findin. that Citibank
violated +enuino-s ri.ht to procedural due process and that +enuino has a ri.ht to salaries.
Citibank is an (!erican bankin. corporation dul0 licensed to do business in the Philippines.
7illia! 8er.uson was the Manila Countr0 Corporate 9fficer and 3usiness :ead of the
+lobal 8inance 3ank of Citibank while (;i; Ra<kotwala was the 4nternational 3usiness
Mana.er for the +lobal Consu!er 3ank of Citibank.
5
+enuino was e!plo0ed b0 Citibank so!eti!e in =anuar0 $%%' as Treasur0 ales &ivision
:ead with the rank of (ssistant >ice-President. he received a !onthl0 co!pensation of
PhP ?#,4@5.%?, exclusive of benefits and privile.es.
?
9n (u.ust '", $%%", Citibank sent +enuino a letter char.in. her with Aknowled.e andBor
involve!entA in transactions Awhich were irre.ular or even fraudulent.A 4n the sa!e letter,
+enuino was infor!ed she was under preventive suspension.
5
+enuino wrote Citibank on epte!ber $", $%%" and asked the bank the followin.C
a. Confront our client with the factual and le.al basis of 0our char.es, and afford her
an opportunit0 to explain2
b. ubstantiate 0our char.e of fraudulent transactions a.ainst our client2 or if the
sa!e cannot be substantiated2
c. CorrectBrepairBco!pensate the da!a.e 0ou have caused our client.
@
9n epte!ber $", $%%", Citibank, throu.h >ictorino P. >ar.as, its Countr0 enior :u!an
Resources 9fficer, sent a letter to +enuino, the relevant portions of which readC
(s 0ou are well aware, the bank served 0ou a letter dated (u.ust '", $%%" advisin.
0ou that on.oin. investi.ations show that 0ou are involved andBor know of irre.ular
transactions which are at the ver0 least in conflict with the bank-s interest, and, !a0
even be fraudulent in nature.
These transactions are those involvin. +lobal Pacific andBor Citibank and the
followin. bank clients, a!on. othersC
$. ,or!a T. de =esus
'. Car!en 4nten.anBRo!eo ,eri
". Mario Ma!on
4. >ienna 9choaB4DT4
5. 7illia! a!ara
?. Roberto Dstandarte
5. Rita 3rowner
@. Ma. Redencion u!paico
%. Cesar 3autista
$#. Tedd0 Een.
$$. ,&C-+uthrie
$'. 9livia 0
4n view of the fore.oin., 0ou are hereb0 directed to explain in writin. three )"* da0s
fro! 0our receipt hereof wh0 0our e!plo0!ent should not be ter!inated in view of
0our involve!ent in these irre.ular transactions. Fou are also directed to appear in
an ad!inistrative investi.ation of the !atter which is set on Tuesda0, ept. '$, $%%"
at 'C## P.M. at the :R Conference Roo!, ?th 8loor, Citibank Center. Fou !a0 brin.
0our counsel if 0ou so desire.
%
+enuino-s counsel replied throu.h a letter dated epte!ber $5, $%%", de!andin. for a bill
of particulars re.ardin. the char.es a.ainst +enuino. Citibank-s counsel replied on
epte!ber '#, $%%", as followsC
$.'. GTHhe bank has no intention of convertin. the ad!inistrative investi.ation of this
case to a full blown trial. 7hat it is prepared to do is .ive 0our client, as re6uired b0
law and upre!e Court decisions, an opportunit0 to explain her side on the issue of
whether she violated the conflict of interest ruleIeither in writin. )which could be in
the for! of a letter-repl0 to the epte!ber $", $%%" letter to Citibank, ,.(.* or in
person, in the ad!inistrative investi.ation which is set for to!orrow afternoon vis-J-
vis the bank clientsBparties !entioned in the letter of Citibank, ,.(.
x x x x
'.'. Fou will certainl0 not den0 that we have alread0 full0 discussed with 0ou what is
!eant b0 the conflict with the bank-s interest vis-J-vis the bank clientsBparties na!ed
in the epte!ber $", $%%" letter of Citibank to Ms. +enuino. (s we have repeatedl0
explained to 0ou, what the bank !eant b0 it is that 0our client and Mr. &ante antos,
usin. the facilities of their fa!il0 corporations )Torrance and +lobal* appear to have
participated in the diversion of bank clients- funds fro! Citibank to, and invest!ent
thereof in, other co!panies and that the0 !ade !one0 in the process, in violation of
the conflict of law rule. 4t is her side of this issue that Citibank, ,.(. is waitin. to
receiveBhear fro! Ms. +enuino.
$#
+enuino did not appear in the ad!inistrative investi.ation held on epte!ber '$, $%%". :er
law0ers wrote a letter to Citibank-s counsel askin. Awhat bank clients- funds were diverted
fro! the bank and invested in other co!panies, the specific a!ounts involved, the !anner
b0 which and the date when such diversions were purportedl0 affected.A 4n repl0, Citibank-s
counsel noted +enuino-s failure to appear in the investi.ation and .ave +enuino up to
epte!ber '", $%%" to sub!it her written explanation. +enuino did not sub!it her written
explanation.
$$
9n epte!ber '5, $%%", Citibank infor!ed +enuino of the result of their investi.ation. 4t
found that +enuino with antos used Afacilities of +enuino-s fa!il0 corporation, na!el0,
+lobal Pacific, personall0 and activel0 participated in the diversion of bank clients- funds to
products of other co!panies that 0ielded interests hi.her than what Citibank products
offered, and that +enuino and antos reali;ed substantial financial .ains, all in violation of
existin. co!pan0 polic0 and the Corporation Code, which for 0our infor!ation, carries a
penal sanction.A
$'
+enuino-s e!plo0!ent was ter!inated b0 Citibank on .rounds of )$* serious !isconduct,
)'* willful breach of the trust reposed upon her b0 the bank, and )"* co!!ission of a cri!e
a.ainst the bank.
$"
9n 9ctober $5, $%%", +enuino filed before the /abor (rbiter a Co!plaint
$4
a.ainst Citibank
docketed as ,/RC Case ,o. ##-$#-#?45#-%" for ille.al suspension and ille.al dis!issal
with da!a.es and pra0er for te!porar0 restrainin. order andBor writ of preli!inar0
in<unction. The /abor (rbiter rendered a &ecision
$5
on Ma0 ', $%%4, the dispositive portion
of which readsC
7:DRD89RD, findin. the dis!issal of the co!plainant Marilou . +enuino to be
without <ust cause and in violation of her ri.ht to due process, respondent C4T43(,E,
,.(., and an0 and all persons actin. on its behalf or b0 or under their authorit0 are
hereb0 ordered to reinstate co!plainant i!!ediatel0 to her for!er position as
Treasur0 ales &ivision :ead or its e6uivalent without loss of seniorit0 ri.hts and
other benefits, with backwa.es fro! (u.ust '", $%%" up to (pril "#, $%%4 in the
a!ount of P4%",@##.## )P?#,### x @.'" !os.* sub<ect to ad<ust!ent until reinstated
actuall0 or in the pa0roll.
Respondents are likewise ordered to pa0 co!plainant the a!ount of $.5 Million
Pesos and P5##,###.## b0 wa0 of !oral and exe!plar0 da!a.es plus $#K of the
total !onetar0 award as attorne0-s fees.
$?
3oth parties appealed to the ,/RC. The ,/RC, in its epte!ber ", $%%4 &ecision in ,/RC-
,CR Case ,o. ##-$#-#?45#-%" )C( ,o. ##?%45-%4*, reversed the /abor (rbiter-s decision
with the followin. !odificationC
7:DRD89RD, =ud.!ent is hereb0 rendered )$* DTT4,+ (4&D the appealed
decision of the /abor (rbiter2 )'* &DC/(R4,+ the dis!issal of the co!plainant valid
and le.al on the .round of serious !isconduct and breach of trust and confidence
and conse6uentl0 &4M44,+ the co!plaint a 6uo2 but )"* 9R&DR4,+ the
respondent bank to pa0 the salaries due to the co!plainant fro! the date it
reinstated co!plainant in the pa0roll )co!puted at P?#,###.## a !onth, as found b0
the /abor (rbiter* up to and until the date of this decision.
9 9R&DRD&.
$5
The parties- !otions for reconsideration were denied b0 the ,/RC in a resolution dated
9ctober '@, $%%4.
$@
T-e R./0'1 o2 3-e Co.r3 o2 44e&/s
9n &ece!ber ?, $%%4, +enuino filed a petition for certiorari docketed as +.R. ,o. $$@#'"
with this Court. Citibank-s petition for certiorari, on the other hand, was docketed as +.R.
,o. $$@??5. 4n the =anuar0 '5, $%%% Resolution, we referred these petitions to the C(
pursuant to our rulin. in St. Martin Funeral Home v. NLRC.
$%
+enuino-s petition before the C( was docketed as C(-+.R. P ,o. 5$5"' while Citibank-s
petition was docketed as C(-+.R. P ,o. 5$5"". +enuino pra0ed for the reversal of the
,/RC-s decision insofar as it declared her dis!issal valid and le.al. Meanwhile, Citibank
6uestioned the ,/RC-s order to pa0 +enuino-s salaries fro! the date of reinstate!ent until
the date of the ,/RC-s decision.
The C( pro!ul.ated its decision on epte!ber "#, $%%%, den0in. due course to and
dis!issin. both petitions.
'#
3oth parties filed !otions for reconsideration and on March "$,
'###, the appellate court !odified its decision and heldC
7:DRD89RD, save for the MODI%ICTION orderin. Citibank, ,.(. to pa0 Ms.
Marilou . +enuino five thousand pesos )P5,###.##* as inde!nit0 for non-
observance of due process in C(-+.R. P ,o. 5$5"', this Court-s "# epte!ber
$%%% decision is REITERTED and %%IRMED in all other respects.
9 9R&DRD&.
'$
:ence, we have this petition.
T-e Iss.e
7:DT:DR 9R ,9T T:D &4M4(/ 98 +D,14,9 4 89R ( =1T C(1D (,& 4,
(CC9R&(,CD 74T: &1D PR9CD
4n +.R. ,os. $4'5"'-"", +enuino contends that Citibank failed to observe procedural due
process in ter!inatin. her e!plo0!ent. This failure is alle.edl0 an indication that there
were no valid .rounds in dis!issin. her. 4n +.R. ,os. $4'55"-54, Citibank 6uestions the
rulin. that +enuino has a ri.ht to reinstate!ent under (rticle ''" of the /abor Code.
Citibank contends that the /abor (rbiter-s findin. is not supported b0 evidence2 thus, the
decision is void. ince a void decision cannot .ive rise to an0 ri.hts, Citibank opines that
there can be no ri.ht to pa0roll reinstate!ent.
T-e (0sm0ss&/ 5&s 2or 6.s3 c&.se b.3 /&c7e( (.e 4rocess
7e affir! that +enuino was dis!issed for <ust cause but without the observance of due
process.
4n a strin. of cases,
''
we have repeatedl0 said that the re6uire!ent of twin notices !ust be
!et. 4n the recent case of King of Kings Transport, Inc. v. Mamac, we explainedC
To clarif0, the followin. should be considered in ter!inatin. the services of
e!plo0eesC
)$* The 20rs3 5r033e' 'o30ce to be served on the e!plo0ees should contain the
specific causes or .rounds for ter!ination a.ainst the!, and a directive that the
e!plo0ees are .iven the opportunit0 to sub!it their written explanation within a
reasonable period. AReasonable opportunit0A under the 9!nibus Rules !eans ever0
kind of assistance that !ana.e!ent !ust accord to the e!plo0ees to enable the!
to prepare ade6uatel0 for their defense. This should be construed as a period of at
least five )5* calendar da0s fro! receipt of the notice to .ive the e!plo0ees an
opportunit0 to stud0 the accusation a.ainst the!, consult a union official or law0er,
.ather data and evidence, and decide on the defenses the0 will raise a.ainst the
co!plaint. Moreover, in order to enable the e!plo0ees to intelli.entl0 prepare their
explanation and defenses, the notice should contain a detailed narration of the facts
and circu!stances that will serve as basis for the char.e a.ainst the e!plo0ees. (
.eneral description of the char.e will not suffice. /astl0, the notice should specificall0
!ention which co!pan0 rules, if an0, are violated andBor which a!on. the .rounds
under (rt. '@' is bein. char.ed a.ainst the e!plo0ees.
)'* (fter servin. the first notice, the e!plo0ers should schedule and conduct
a -e&r0'1 or co'2ere'cewherein the e!plo0ees will be .iven the opportunit0 toC )$*
explain and clarif0 their defenses to the char.e a.ainst the!2 )'* present evidence in
support of their defenses2 and )"* rebut the evidence presented a.ainst the! b0 the
!ana.e!ent. &urin. the hearin. or conference, the e!plo0ees are .iven the
chance to defend the!selves personall0, with the assistance of a representative or
counsel of their choice. Moreover, this conference or hearin. could be used b0 the
parties as an opportunit0 to co!e to an a!icable settle!ent.
)"* (fter deter!inin. that ter!ination of e!plo0!ent is <ustified, the e!plo0ers shall
serve the e!plo0ees a5r033e' 'o30ce o2 3erm0'&30o' indicatin. thatC )$* all
circu!stances involvin. the char.e a.ainst the e!plo0ees have been considered2
and )'* .rounds have been established to <ustif0 the severance of their
e!plo0!ent.
'"
The /abor (rbiter found that Citibank failed to ade6uatel0 notif0 +enuino of the char.es
a.ainst her. 9n the contrar0, the ,/RC held that Athe function of a -notice to explain- is onl0
to state the basic facts of the e!plo0er-s char.es, which x x x the letters of epte!ber $"
and $5, $%%" in 6uestion have full0 served.A
'4
7e a.ree with the C( that the dis!issal was valid and le.al, and with its !odification of the
,/RC rulin. that PhP 5,### is due +enuino for failure of Citibank to observe due process.
The 4!ple!entin. Rules and Re.ulations of the /abor Code provide that an0 e!plo0er
seekin. to dis!iss a worker shall furnish the latter a written notice statin. the particular acts
or o!issions constitutin. the .rounds for dis!issal.
'5
The purpose of this notice is to
sufficientl0 apprise the e!plo0ee of the acts co!plained of and enable hi!Bher to prepare
hisBher defense.
4n this case, the letters dated (u.ust '", epte!ber $" and '#, $%%" sent b0 Citibank did
not identif0 the4&r30c./&r &c3s or om0ss0o's alle.edl0 co!!itted b0 +enuino. The (u.ust
'", $%%" letter char.ed +enuino with havin. Aso!e knowled.e andBor involve!entA in so!e
transactions Awhich have the appearance of bein. irre.ular at the least and !a0 even be
fraudulent.A The epte!ber $", $%%" letter, on the other hand, !entioned Airre.ular
transactionsA involvin. +lobal Pacific andBor Citibank and $' bank clients. /astl0, the
epte!ber '#, $%%" letter stated that +enuino and AMr. &ante antos, usin. the facilities of
their fa!il0 corporations )Torrance and +lobal* appear to have participated in the diversion
of bank clients- funds fro! Citibank to, and invest!ent thereof in, other co!panies and that
the0 !ade !one0 in the process, in violation of the conflict of law rule GsicH.A The extent of
+enuino-s alle.ed knowled.e and participation in the diversion of bank-s clients- funds,
!anner of diversion, and a!ounts involved2 the acts attributed to +enuino that conflicted
with the bank-s interests2 and the circu!stances surroundin. the alle.ed irre.ular
transactions, were not specified in the noticesBletters.
7hile the bank .ave +enuino an opportunit0 to den0 the truth of the alle.ations in writin.
and participate in the ad!inistrative investi.ation, the fact re!ains that the char.es were
too .eneral to enable +enuino to intelli.entl0 and ade6uatel0 prepare her defense.
The two-notice re6uire!ent of the /abor Code is an essential part of due process. The first
notice infor!in. the e!plo0ee of the char.es should neither be pro-forma nor va.ue. 4t
should set out clearl0 what the e!plo0ee is bein. held liable for. The e!plo0ee should be
afforded a!ple opportunit0 to be heard and not !ere opportunit0. (s explained in King of
Kings Transport, Inc., a!ple opportunit0 to be heard is especiall0 accorded the e!plo0ees
sou.ht to be dis!issed after the0 are specificall0 infor!ed of the char.es in order to .ive
the! an opportunit0 to refute such accusations leveled a.ainst the!. ince the notice of
char.es .iven to +enuino is inade6uate, the dis!issal could not be in accordance with due
process.
7hile we hold that Citibank failed to observe procedural due process, we nevertheless find
+enuino-s dis!issal <ustified.
Citibank !aintains that +enuino was aware of the bank-s Corporate Polic0 Manual
specificall0 Chapter " on APrinciples and PoliciesA with re.ard to avoidin. conflicts of
interest. he had even sub!itted a Conflict of 4nterest urve0 to Citibank. 4n that surve0,
she denied an0 knowled.e of en.a.in. in transactions in conflict with Citibank-s interests.
Citibank, for its part, sub!itted evidence showin. %%K ownership of +lobal stocks b0
+enuino and antos. 4n =ul0 $%%", Citibank discovered that +enuino and antos were
instru!ental in the withdrawal b0 bank depositors of PhP $'# !illion of invest!ents in
Citibank. This a!ount was subse6uentl0 invested in another forei.n bank, 4nternationale
,ederlanden 3ank, ,.>., under the control of +lobal and Torrance, another corporation
controlled b0 +enuino and antos.
'?
Citibank also filed two cri!inal co!plaints a.ainst
+enuino and antos for violations of the conflict of interest rule provided in ec. "$ in
relation to ec. $44
'5
of the Corporation Code.
'@
7e note also that durin. the proceedin.s before the /abor (rbiter, Citibank presented the
followin. affidavits, with supportin. docu!entar0 evidence a.ainst +enuinoC
$* >ic /i!, an officer of Citibank who investi.ated the ano!alies of +enuino and
antos, concluded that +enuino and antos reali;ed substantial financial .ains out
of the transfer of !onies as supported b0 the followin. docu!entsC
$* GHo!e of the Ter! 4nvest!ent (pplications )T4(*, (pplications for Mone0
Transfer, all filled up in the handwritin. of Ms. Marilou +enuino. These docu!ents
coverBshow the transfer of the !onies of the Citibank clients fro! their !one0
place!entsBdeposits with Citibank, ,.(. to +lobal andBor Torrance.
'* GHo!e of the checks that were drawn b0 +lobal and Torrance a.ainst their
Citibank accounts in favor of the other co!panies b0 which +lobal and Torrance
transferred the !onies of the bank clients to the other co!panies.
"* GHo!e of the checks drawn b0 the other co!panies in favor of +lobal or Torrance
b0 which the other co!panies re!itted back to +lobal andBor Torrance the !onies of
the bank clients concerned.
4* GHo!e of the checks drawn b0 +lobal and Torrance a.ainst their Citibank
accounts in favor of Mr. &ante antos and Ms. Marilou +enuino, coverin. the shares
of the latter in the spreads or !ar.ins +lobal and Torrance had derived fro! the
invest!ents of the !onies of the Citibank clients in the other co!panies.
5* GHo!e of the checks drawn b0 Torrance and +lobal in favor of Citibank clients b0
which +lobal and Torrance re!itted back to said bank clients their principal
invest!ents )or portions thereof* and the rates of interests reali;ed fro! their
invest!ent placed with the other co!panies less the spreads !ade b0 +lobal andBor
Torrance, Mr. &ante /. antos and Ms. Marilou +enuino.
'%
4n /i!-s Repl0-(ffidavit with attached supportin. docu!ents, he stated that out of the
co!petin. !one0 place!ent activities, +enuino and antos derived financial .ains
a!ountin. to PhP ',#'5,#%@.#@ and PhP ',$"4,@?".@#, respectivel0.
"#
'* Maril0n 3autista, a Treasur0 ales pecialist in the Treasur0 &epart!ent of the +lobal
Consu!er 3ank of Citibank and whose superiors were +enuino and antos, stated thatC
3ased on docu!ents that have subse6uentl0 co!e to !0 knowled.e, 4 reali;ed that
the two )+enuino and &ante /. antos*, with the active cooperation of Redencion
u!paico )the (ccountant of +lobal* had L brokered for their own benefits andBor of
+lobal the sale of the financial products of Citibank called AMort.a.e 3acked
ecuritiesA or M3 and in the process !ade !one0 at the expense of the )Citibank*
investors and the bank.
"$
"* Patrick Chen. attested to other transactions fro! which +enuino, antos, and +lobal
brokered the Mort.a.e 3acked ecurities )M3*, na!el0C 4CCB,e!esio and 9livia 0
transaction, an Mi.uel CorporationB4CC, C4P4B(siatrust, 8(PD, PDR(( and 1nion 3ank,
and ,&C-+uthrie transactions.
"'
4n her defense, +enuino asserts that Citibank has no evidence of an0 wron.ful act or
o!ission i!putable to her. (ccordin. to her, she did not tr0 to conceal fro! the bank her
participation in +lobal and she even disclosed the infor!ation when +lobal desi.nated
Citibank as its depositar0. he avers there was no conflict of interest because +lobal was
not en.a.ed in Citibank-s acceptin. deposits and .rantin. loans, nor in !one0 place!ent
activities that co!pete with Citibank-s activities2 and neither does Citibank invest in the
outlets used b0 +lobal. he clai!s that the controvers0 between antos and +lobal had
alread0 been a!icabl0 resolved in a Co!pro!ise (.ree!ent between the two parties.
""
+enuino further asserts that the letter of ter!ination did not indicate what existin. co!pan0
polic0 had been violated, and what acts constituted serious !isconduct or willful breach of
the trust reposed b0 the bank. he clai!s that /i!-s testi!on0 that the checks issued b0
+lobal in her na!e were profits was !alicious, hearsa0, and lacked factual basis. he also
posits that as to the withdrawals of clients, she could not possibl0 dictate on the depositors.
he pointed out that the depositors even sent Citibank a letter dated (u.ust '5, $%%"
infor!in. the bank that the withdrawals were !ade upon their express instructions.
+enuino avers the bank-s loss of confidence should have to be proven b0 substantial
evidence, settin. out the facts upon which loss of confidence in the e!plo0ee !a0 be !ade
to rest.
"4
Contrar0 to the /abor (rbiter-s findin., the ,/RC found the followin. facts supported b0 the
recordsC
a* Respondent bank has a conflict of interest rule, e!bodied in Chapter " of its
Corporate Polic0 Manual, prohibitin. the officers of the bank fro! en.a.in. in
business activities, situations or circu!stances that are in conflict with the interest of
the bank.
b* Co!plainant was fa!iliar with said conflict of interest rule of the bank and of her
dut0 to disclose to the bank in writin. an0 personal circu!stances which conflicts or
appears to be in conflict with Citibank-s interest.
c* Co!plainant is a substantial stockholder of +lobal Pacific, but she did not disclose
fact to the bank.
d* +lobal Pacific is en.a.ed in !one0 place!ent business like Citibank, ,.(.2 that in
carr0in. out its said !one0 place!ent business, it used funds belon.in. to Citibank
clients which were withdrawn fro! Citibank with participation of co!plainant and
&ante /. antos. 4n one transaction of this nature, P$'#,###,###.## belon.in. to
Citibank clients was withdrawn fro! Citibank, ,.(. and placed in another forei.n
bank, under the control of +lobal Pacific. aid bi. invest!ent !one0 was returned to
Citibank, ,.(. onl0 when Citibank, ,.(. filed an in<unction suit.
e* +lobal Pacific also en.a.ed in the brokerin. of the (3 or M3, another financial
product of Citibank. 4t was the dut0 of co!plainant +enuino and &ante /. antos to
sell said product on behalf of Citibank, ,.(. and for Citibank ,.(.-s benefit. 4n the
brokerin. of the (3 or M3, +lobal Pacific !ade substantial profits which
otherwise would have .one to Citibank, ,.(. if onl0 the0 brokered the (3 or M3
for and on behalf of Citibank, ,.(.
(rt. '@')c* of the /abor Code provides that an e!plo0er !a0 ter!inate an e!plo0!ent for
fraud or willful breach b0 the e!plo0ee of the trust reposed in hi!Bher b0 hisBher e!plo0er
or dul0 authori;ed representative. 4n order to constitute as <ust cause for dis!issal, loss of
confidence should relate to acts ini!ical to the interests of the e!plo0er.
"5
(lso, the act
co!plained of should have arisen fro! the perfor!ance of the e!plo0ee-s duties.
"?
8or loss
of trust and confidence to be a valid .round for an e!plo0ee-s dis!issal, it !ust be
substantial and not arbitrar0, and !ust be founded on clearl0 established facts sufficient to
warrant the e!plo0ee-s separation fro! work.
"5
7e also held thatC
G/Hoss of confidence is a valid .round for dis!issin. an e!plo0ee and proof be0ond
reasonable doubt of the e!plo0ee-s !isconduct is not re6uired. 4t is sufficient if there
is so!e basis for such loss of confidence or if the e!plo0er has reasonable .round
to believe or to entertain the !oral conviction that the e!plo0ee concerned is
responsible for the !isconduct and that the nature of his participation therein
rendered hi! unworth0 of the trust and confidence de!anded b0 his position.
"@
(s (ssistant >ice-President of Citibank-s Treasur0 &epart!ent, +enuino was tasked to
solicit invest!ents, and peso and dollar deposits for, and keep the! in Citibank2 and to sell
andBor push for the sale of Citibank-s financial products, such as the M3, for the account
and benefit of Citibank.
"%
he held a position of trust and confidence. There is no wa0 she
could den0 an0 knowled.e of the bank-s policies nor her understandin. of these policies as
reflected in the surve0 done b0 the bank. he could not likewise fei.n i.norance of the
businesses of Citibank, and of +lobal and Torrance. (ssu!in. that Citibank did not en.a.e
in the sa!e securities dealt with b0 +lobal and Torrance2 nevertheless, it is to the interests
of Citibank to retain its clients and continue investin. in Citibank. Curiousl0, +enuino did not
even dissuade the depositors fro! withdrawin. their !onies fro! Citibank, and was even
instru!ental in the transfers of !onies fro! Citibank to a co!petin. bank throu.h +lobal
and Torrance, the corporations under +enuino-s control.
(ll the pieces of evidence co!pel us to conclude that +enuino did not have her e!plo0er-s
interest. The letter of the bank-s clients which attested that the withdrawals fro! Citibank
were !ade upon their instructions is of no i!port. 4t did not explain wh0 the0 preferred to
invest in +lobal and Torrance, nor did it !ention that +enuino tried to dissuade the! fro!
withdrawin. their deposits. +enuino herself ad!itted her relationship with so!e of the
depositors in her affidavit, to witC
?. Contrar0 to the alle.ations of Mr. /i! in par. ?.$ up to @.$ concernin. the alle.ed
sche!e e!plo0ed in the 6uestioned transactions, insinuatin. an AinA and AoutA
!ove!ent of funds of the seven )5* depositors,3-e 3r.3- 0s 3-&3 &23er s&0(
8(e4os03ors8 0's3r.c3e(9&.3-or0:e( .s 3o e22ec3 3-e 503-(r&5&/ o2 3-e0r
res4ec30;e mo'0es 2rom C030b&'7 3o &33&0' 3-e commo' 1o&/ o2 -01-er <0e/(s
.30/0:0'1 G/ob&/ &s 3-e ;e-0c/e 2or b./7 4.rc-&ses o2 sec.r030es or 4&4ers 'o3
(e&/3 503-9o22ere( b< C030b&'7, s&0( 4oo/e( 0';es3me'3 rem&0'e( 503-
G/ob&/, and were !ana.ed throu.h +lobal for over a 0ear until the controvers0
arose2
$#. The se;e' =7> 8(e4os03ors8 me'30o'e( 0' Mr. !0m?s 220(&;03s &re 3-e /o'1-
30me 2r0e'(s o2 &220&'3 Ge'.0'o who had for!ed a loosel0 constituted invest!ent
.roup for purposes of reali;in. hi.her 0ields derivable fro! pooled invest!ents, and
as the advisor of the .roup she had in effect chosen Citibank as the initial repositor0
of their respective !onies prior to the i!ple!entation of plans for pooled
invest!ents under +lobal. :ence, she had known and dealt with said AdepositorsA
before the0 beca!e substantial depositors of Citibank. he did not co!e across
the! because of Citibank.
4#
)D!phasis supplied.*
(ll told, Citibank had valid .rounds to dis!iss +enuino on .round of loss of confidence.
4n view of Citibank-s failure to observe due process, however, no!inal da!a.es are in order
but the a!ount is hereb0 raised to PhP "#,### pursuant to ga!on v. NLRC. The ,/RC-s
order for pa0roll reinstate!ent is set aside.
4n ga!on, we explainedC
The violation of the petitioners- ri.ht to statutor0 due process b0 the private
respondent warrants the pa0!ent of inde!nit0 in the for! of no!inal da!a.es. The
a!ount of such da!a.es is addressed to the sound discretion of the court, takin.
into account the relevant circu!stances. Consi"ering t#e prevailing circumstances in
t#e case at !ar, $e "eem it proper to fi% it at &'(,(((.((. 7e believe this for! of
da!a.es would serve to deter e!plo0ers fro! future violations of the statutor0 due
process ri.hts of e!plo0ees. (t the ver0 least, it provides a vindication or reco.nition
of this funda!ental ri.ht .ranted to the latter under the /abor Code and its
4!ple!entin. Rules.
4$
Thus, the award of PhP 5,### to +enuino as inde!nit0 for non-observance of due process
under the C(-s March "$, '### Resolution in C(-+.R. P ,o. 5$5"' is increased to PhP
"#,###.
(nent the directive of the ,/RC in its epte!ber ", $%%4 &ecision orderin. Citibank Ato pa0
the salaries due to the co!plainant fro! the date it reinstated co!plainant in the pa0roll
)co!puted at P?#,###.## a !onth, as found b0 the /abor (rbiter* up to and until the date of
this decision,A the Court hereb0 cancels said award in view of its findin. that the dis!issal of
+enuino is for a le.al and valid .round.
9rdinaril0, the e!plo0er is re6uired to reinstate the e!plo0ee durin. the pendenc0 of the
appeal pursuant to (rt. ''", para.raph " of the /abor Code, which statesC
4n an0 event, the decision of the /abor (rbiter reinstatin. a dis!issed or separated
e!plo0ee, insofar as the reinstate!ent aspect is concerned, shall i!!ediatel0 be
executor0, even pendin. appeal. The e!plo0ee shall either be ad!itted back to work
under the sa!e ter!s and conditions prevailin. prior to his dis!issal or separation
or, at the option of the e!plo0er, !erel0 reinstated in the pa0roll. The postin. of a
bond b0 the e!plo0er shall not sta0 the execution for reinstate!ent provided herein.
4f the decision of the labor arbiter is later reversed on appeal upon the findin. that the
.round for dis!issal is valid, then the e!plo0er has the ri.ht to re6uire the dis!issed
e!plo0ee on pa0roll reinstate!ent to refund the salaries sBhe received while the case was
pendin. appeal, or it can be deducted fro! the accrued benefits that the dis!issed
e!plo0ee was entitled to receive fro! hisBher e!plo0er under existin. laws, collective
bar.ainin. a.ree!ent provisions, and co!pan0 practices.
4'
:owever, if the e!plo0ee was
reinstated to work durin. the pendenc0 of the appeal, then the e!plo0ee is entitled to the
co!pensation received for actual services rendered without need of refund.
Considerin. that +enuino was not reinstated to work or placed on pa0roll reinstate!ent,
and her dis!issal is based on a <ust cause, then she is not entitled to be paid the salaries
stated in ite! no. " of the fallo of the epte!ber ", $%%4 ,/RC &ecision.
$@ERE%ORE, the petitions of +enuino in G.R. Nos. 142732-33 are DENIED for lack of
!erit. The petitions of Citibank in G.R. Nos. 1427+3-+4 are GRNTED. The epte!ber "#,
$%%% &ecision and March "$, '### Resolution in C(-+.R. P ,os. 5$5"' and 5$5""
are %%IRMED with MODI%ICTION that +enuino is entitled to PhP "#,### as inde!nit0
for non-observance of due process. 4te! )"* in the dispositive portion of the epte!ber ",
$%%4 &ecision of the ,/RC in ,/RC-,CR Case ,o. ##-$#-#?45#-%" )C( ,o. ##?%45-%4*
is DE!ETED and SET SIDE, and said ,/RC decision is MODI%IED as followsC
7:DRD89RD, =ud.!ent is hereb0 rendered )$* DTT4,+ (4&D the appealed
decision of the /abor (rbiter2 )'* &DC/(R4,+ the dis!issal of the co!plainant valid
and le.al on the .round of serious !isconduct and breach of trust and confidence
and conse6uentl0 &4M44,+ the co!plaint a 6uo2 but )"*ORDERING 3-e
res4o'(e'3 b&'7 3o 4&< 3-e com4/&0'&'3 'om0'&/ (&m&1es 0' 3-e &mo.'3 o2
P-P 30,000.
SO ORDERED.
)uisum!ing,C#airperson Carpio, Carpio-Morales, Tinga, **., concur.
%oo3'o3es
$
Rollo )+.R. ,os. $4'5"'-""*, pp. ??-55. Penned b0 =. :ector /. :ofileMa and
concurred in b0 (ssociate =ustices 9!ar 1. (!in and =ose /. abio, =r.
'
4d. at 5%-@?. Penned b0 =. =ose /. abio, =r. and concurred in b0 (ssociate =ustices
3ernardo P. (besa!is and Re!edios . 8ernando.
"
4d. at @@-$"".
4
4d. at $"5-$"%.
5
4d. at 4#?.
?
4d. at ?5.
5
4d.
@
4d.
%
4d. at ?@.
$#
4d. at ?%.
$$
4d. at ?%-5#.
$'
4d. at 5#.
$"
4d.
$4
4d. at $4"-$5$.
$5
4d. at $@4-'##.
$?
4d. at $%%-'##.
$5
4d. at $"'.
$@
4d. at $"5-$"@.
$%
+.R. ,o. $"#@??,epte!ber $?, $%%@, '%5 CR( 4%4.
'#
Rollo )+.R. ,os. $4'5"'-""*, p. 5?.
'$
4d. at @5.
''
>o0eur >isa.e tudio, 4nc. v. C(, +.R. ,o. $44%"%, March $@, '##5, 45" CR(
5"$2 citin. Cole.io de an =uan de /etran-Cala!ba v. >illas, +.R. ,o. $"55%5,
March '?, '##", "%% CR( 55#, 5552 Ein.si;e Manufacturin. Corporation v. ,/RC,
+.R. ,os. $$#45'-54, ,ove!ber '4, $%%4, '"@ CR( "4%.
'"
+.R. ,o. $??'#@, =une '%, '##5.
'4
Rollo )+.R. ,os. $4'5"'-""*, p. $$'.
'5
3ook >, Rule N4>, ec. '.
'?
Citibank filed with the RTC of Makati an in<unction case a.ainst &ante /. antos
and 4,3. Thereafter, Citibank executed a co!pro!ise a.ree!ent with &ante /.
antos, +lobal and Torrance for the latter to return PhP $'#!illion and the a!ounts
of 1& ?4,5##.## and PhP $.$!illion representin. profits fro! the transfer. &ante /.
antos, +lobal and Torrance, however, did not pa0 to Citibank the a!ount
representin. profits2 hence, Citibank rescinded the co!pro!ise a.ree!ent.
'5
ec. "$. x x x 7hen a director, trustee or officer atte!pts to ac6uire or ac6uires, in
violation of his dut0, an0 interest adverse to the corporation in respect of an0 !atter
which has been reposed in hi! in confidence, as to which e6uit0 i!poses a disabilit0
upon hi! to deal in his own behalf, he shall be liable as a trustee for the corporation
and !ust account for the profits which otherwise would have accrued to the
corporation.
ec. $44. >iolations of the Code.I>iolations of an0 of the provisions of this
Code or its a!end!ents not otherwise specificall0 penali;ed therein shall be
punished b0 a fine of not less than one thousand )P$,###.##* pesos but not
!ore than ten thousand )P$#,###.##* pesos or b0 i!prison!ent for not less
than thirt0 )"#* da0s but not !ore than five )5* 0ears, or both, in the discretion
of the court.
'@
Rollo )+.R. ,os. $4'5"'-""*, pp. ?$"-?55.
'%
4d. at ?"@.
"#
4d. at ?"%.
"$
4d. at ?4#.
"'
4d. at ?4$.
""
4d. at ?5@-5'4. ee footnote '?.
"4
4d.
"5
Ta!acalera Insurance Co. v. NLRC , ,o. /-5'555, =ul0 "$, $%@5, $5' CR( ??5,
?54-?55.
"?
+,uita!le -an.ing Corporation v. NLRC , +.R. ,o. $#'4?5, =une $", $%%5, '5"
CR( "5', "5@.
"5
La!or v. NLRC , +.R. ,o. $$#"@@, epte!ber $4, $%%5, '4@ CR( $@", '##.
"@
Re/es v. Minister of La!or , +.R. ,o. 45@#5, 8ebruar0 %, $%@%, $5# CR( $"4,
$4#.
"%
Rollo )+.R. ,os. $4'5"'-""*, p. ?4'.
4#
4d. at ?"%.
4$
+.R. ,o. $5@?%", ,ove!ber $5, '##4, 44' CR( 55", ?$5.
4'
4!ple!entin. Rules of the /abor Code, 3ook >4, Rule $, ec. 5.
The Lawphil Project - Arellano Law Foundation