455

Diamond Motors v Court of Appeals

417 SCRA 46 (2003)
Just Causes - Fraud

FACTS
Petitioner hired private respondent Cadao and subsequently
appointed him as Special Accounts Manager to handle the promotion
and selling of Mitsubishi vehicles to precisely listed corporate clients
on fleet basis. Units purchased by fleet sale are usually cheaper than
those bought on a retail basis. TAPE Inc., one of petitioners clients,
sent Purchase Orders for 3 units to be registered for their
employees. However, upon investigation of the petitioner, it was
found out that only one of the three registered names is an employee
of TAPE Inc. Therefore, the client manifested that it will not pay for
the purchase orders.

Cadao received a memorandum from petitioner requiring him to
explain the misrepresentation he committed in favor of the three
customers. In addition, he was accused of dishonesty and deceit in
the conduct of the said sale. Cadao, on the same day, submitted his
written explanation. He was subsequently dismissed by petitioner.

He filed a complaint for illegal dismissal with prayer for the payment
of earned salary, commission and other accrued benefits against the
petitioner. The Labor Arbiter dismissed the complaint for lack of
merit. NLRC reversed the decision and declared his dismissal illegal.
He was awarded separation pay and back wages. Petitioner
submitted the case for review of the Court of Appeals; the latter
affirmed NLRCs decision. Hence, the present petition.


ISSUE
Whether or not the private respondents dismissal was illegal

RULING
No, the private respondent was not illegally dismissed. Article 282(c)
of the Labor Code states that an employer can terminate the
employment of the employee concerned for "fraud or willful breach
by an employee of the trust reposed in him by his employer or duly
authorized representative." The loss of trust and confidence must be
based on the willful breach of the trust reposed in the employee by
his employer. Ordinary breach will not suffice. A breach of trust is
willful if it is done intentionally, knowingly and purposely, without
justifiable excuse, as distinguished from an act done carelessly,
thoughtlessly, heedlessly or inadvertently.
In Concorde Hotel v. Court of Appeals, the Court has laid down the
guidelines for the application of the doctrine of loss of confidence,
i.e., (a) the loss of confidence should not be simulated; (b) it should
not be used as a subterfuge for causes which are improper, illegal or
unjustified; (c) it should not be arbitrarily asserted in the face of
overwhelming evidence to the contrary; and (d) it must be genuine,
not a mere afterthought to justify earlier action taken in bad faith.
In the case at bar, the fact that respondent attempted to deprive
petitioner of its lawful revenue is tantamount to fraud against the
company, which warrants dismissal from the service. The fact that
petitioner failed to show it suffered loses as a consequence if
respondents act is immaterial.
Petition was granted. NLRC and CAs decisions were reversed and
the decision of the Labor Arbiter is reinstated.

456
Aldeguer v Tomboc
560 SCRA 49 (2008)
Just Causes - Fraud

FACTS
Petitioner is a corporation engaged in the retail and wholesale of Loalde
brand products. It hired respondent Tomboc and the latter was promoted
to Officer-in-Charge (OIC) of the formers Loalde Ayala Boutique branch
in Cebu City. Per internal control, the position of OIC is not allowed to
handle cashiering except in emergency cases, which must have the prior
approval of the management.

After conducting an audit of sales, petitioner concluded that respondent
misappropriated the branchs revenues which is a just cause for
termination under Art. 282 of the Labor Code; and accordingly notified
her of the termination of her services. Aside from the violations, there
were reports submitted by the cashiers that respondent meddles with the
cash for deposit, and delaying such for more than three days.

Respondent filed a complaint for illegal dismissal, illegal salary
deductions, underpayment of wages, non-payment of 13
th
month pay,
and damages. She averred that she was terminated from employment
because she refused to sign a voucher acknowledging receipt of wage
differentials, which she did not in fact receive. She also explained that
the amounts were all deposits-in-transit, meaning, the bank had already
picked-up the amounts but had not yet returned the validated deposit
slips.

Petitioner maintained that the respondent committed other irregularities
in the past such as falsifying the signature of the bank tellers on deposit
slips and meddling with the branchs cashiering activities.

The Labor Arbiter dismissed the respondents complaint. NLRC upheld
Labor Arbiters decision. Court of Appeals concluded that respondent
was illegally dismissed, reversed NLRCs decision and ordered her
reinstatement with full back wages and without loss of seniority rights. It
found that respondent was denied due process in the course of the
dismissal.

ISSUE
Whether or not the respondent was illegally dismissed

RULING
On the merits, petitioner has shown just cause for the termination of
respondents employment under Art. 282 of the Labor Code on the
ground of fraud or willful breach by the employee of the trust reposed in
him by his employer or duly authorized representative. With the
affidavits and the audit reports corroborated by the petitioners bank
passbook, the Court finds that the respondents termination was for a
just cause.

The Court finds, however, that the petitioner failed to observe the
requirements of due process. The rules implementing Book VI of the
Labor Code require the following in the termination of employment
based on just causes as defined in Article 282 of the Labor Code:(i) A
written notice on the employee specifying the ground or grounds for
termination, and giving said employee reasonable opportunity to which
to explain his side; (ii) A hearing or conference during which the
employee concerned, with the assistance of counsel if he so desires is
given opportunity to respond to the charge, present his evidence, or
rebut the evidence presented against him, and (iii) A written notice of
termination served on the employee, indicating that upon due
consideration of all the circumstances, grounds have been established
to justify his termination.

As the Court of Appeals correctly found, instead of complying with the
two written notice requirement, petitioner, in one single notice, ordered
respondents dismissal. For the first notice requirement to be satisfied, it
must inform the employee outright that an investigation will be
conducted on the charges particularized therein which, if proven, will
result to his dismissal.

The Decision of the Court of Appeals is reversed; NLRCs decision
Reinstated with the modification that petitioner is ordered to pay
respondents nominal damages.


457
Central Pangasinan Electric v Macaraeg
395 SCRA 720 (2003)
Just Causes - Fraud

FACTS
De Vera was employed as teller and Geronima Macaraeg as cashier
by Central Pangasinan Electric Cooperative Inc. They
accommodated and encashed two hundred eleven crossed checks
of Evelyn Joy Estrada (de Veras sister) payable to the cooperative
despite the absence of any transaction or any outstanding obligation
with it. They credited the checks as part of their collection and
deposited the same together with their cash collection to the coops
account at the Rural Bank of Central Pangasinan. The finance
department noticed these checks which bounced (insufficient funds).
De Vera and Macaraeg were confronted with the discovery. De Vera
admitted that the checks were issued by her sister and that she
encashed them from the money collected from petitioners
customers. De Vera testified and admitted that she encashed the
checks of Evelyn Joy Estrada because the latter is her older sister.
Macaraeg admitted that she knew of the accommodations given by
respondent de Vera to her sister; that she allowed her subordinate to
do it because respondent de Vera is her kumare, and that she
knew that Mrs. Estradas checks were sufficiently funded. On March
19, 1999, on the basis of the findings and recommendation of Atty.
Fernandez (presided over the hearing), the General Manager issued
to respondents separate notices of termination for serious
misconduct, and breach of trust and confidence reposed on them by
management. Respondents questioned their dismissal before the
National Conciliation and Mediation Board (NCMB),claiming that
their dismissal was without just cause and in violation of the
Collective Bargaining Agreement (CBA), which requires that the case
should first be to a voluntary arbitrator for arbitration.
The Labor Arbiter ruled in favor of defendants and ordered their
reinstatement. This was affirmed by the Court of Appeals.
ISSUE
Whether or not the respondents were validly dismissed
RULING
YES, the respondents were validly dismissed. Article 282(c) of the
Labor Code allows an employer to dismiss employees for willful
breach of trust or loss of confidence. Proof beyond reasonable doubt
of their misconduct is not required, it being sufficient that there is
some basis for the same or that the employer has reasonable ground
to believe that they are responsible for the misconduct and their
participation therein rendered them unworthy of the trust and
confidence demanded of their position.
The acts of the respondents were clearly inimical to the financial
interest of the petitioner. During the investigation, they admitted
accommodating Evelyn Joy Estrada by encashing her checks from
its funds for more than a year. They did so without petitioners
knowledge, much less its permission.
There was willful breach of trust on the respondents part, as they
took advantage of their highly sensitive positions to violate their
duties. The acts of the respondents caused damage to the petitioner.
During those times the checks were illegally encashed, petitioner
was not able to fully utilize the collections, primarily in servicing its
debts.
It is not material that they did not misappropriate any amount of
money, nor incur any shortage relative to the funds in their
possession. The basic premise for dismissal on the ground of loss
of confidence is that the employees concerned hold positions of
trust. The betrayal of this trust is the essence of the offence for
which an employee is penalized.
The respondents held positions of utmost trust and confidence. As
teller and cashier, respectively, they are expected to possess a high
degree of fidelity. They are entrusted with a considerable amount of
cash. Respondent de Vera accepted payments from petitioners
consumers while respondent Macaraeg received remittances for
deposit at petitioners bank.
458
Ramos v NLRC
298 SCRA 225 (1998)
Just Causes Willful Breach of Trust & Confidence

FACTS
In 1978, Elizabeth Ramos was employed by United States Embassy
Filipino Employees Credit Cooperative (USECO). In 1993, its Board
created an Audit and Inventory Committee to determine whether
USECO has a sound financial management and control mechanism.
The committee found anomalies in USECOs lending transactions.
Petitioner and two co-employees were called to shed light on some
items in the Audit Committee Report such as unrecorded loans,
fabricated ledger, falsification of documents, accommodations of
payroll checks, encashment of check/CPAs, resigned members,
unrecorded loan of resigned members and withdrawal of more than
the deposits.
During the meeting, Ramos admitted her serious offense in regard to
falsification of documents. When asked by the Board to explain how
the resigned members were able to secure loans, she replied that
she just wanted to help them without regard to existing policies.
In her written explanation, Ramos said that the loans are approved
based on prerogatives of individuals in authority. She said that, it is
unfortunate that the USECU Staff had to resort to creating dummy
records. But since the loans are duly acknowledged by the borrowers
in other legitimate documents, it is readily apparent that the records
were made simply to accommodate those borrowers beyond the
authorized limits, but never, never to defraud USECU. She was
preventively suspended for 30 days and was later placed on forced
leave with pay, pending the completion of the investigation.
USECO commissioned an external auditing firm to examine the
irregularities discovered in its lending practices. The auditor
confirmed the irregularities and also discovered shortages in bank
deposits. Thereafter, USECO dismissed the petitioner for loss of
trust and confidence. Petitioner countered with a complaint

for illegal
dismissal, illegal suspension, underpayment of salary, moral
damages and attorneys fees.
Labor Arbiter sustained the suspension and dismissal of petitioner
but ordered the payment of her unpaid salary.
ISSUE
Whether or not there is just cause for petitioners suspension and
dismissal
RULING
YES. Petitioners position as Management Assistant requires a high
degree of trust and confidence; and Loss of confidence is a valid
ground for dismissal of an employee.

In the case at bar, USECO
proved that its loss of confidence on petitioner has a rational basis.
The findings of the labor arbiter on this factual issue are supported
by the evidence.
Petitioner's explanation that the "loan practices" were made for the
benefit of the borrowing members and not to defraud USECO cannot
exonerate her. Her unsound practices endangered the financial
condition of USECO because of the possibility that the loans could
not be collected at all.
The NLRC initially reversed the ruling of the labor arbiter on the
grounds that: (1) petitioner was denied procedural due process and
(2) the criminal case for estafa filed against her has been dismissed
by the Manila Prosecutor's Office for insufficiency of evidence,
particularly, for lack of proof that the USECO was damaged by the
acts attributed to petitioner.
Similarly, it is a well established rule that the dismissal of the criminal
case against an employee shall not necessarily be a bar to his
dismissal from employment on the ground of loss of trust and
confidence.
459
Philippine National Construction Corporation v Matias
458 SCRA 148 (2005)
Just Causes Willful Breach of Trust & Confidence

FACTS
Rolando Matias was employed by Construction and Development
Corporation of the Philippines (CDCP) as Chief Accountant and
Administrative Officer. During his employment with the company,
various parcels of land situated in Bukidnon were placed in the
names of certain employees as trustees for the purpose of owning
vast tracts of land more than the limit a corporation can own which
were primarily intended for CDCP agricultural businesses. By
internal arrangement documents transferring back the properties to
the corporation were executed. A piece of land was registered in the
name of Matias.
CDCP was later converted a government owned or controlled
corporation, and the name of CDCP was changed to Philippine
National Construction Corporation (PNCC). Under a new set up,
PNCC offered a retrenchment program and on December 31, 1984
Matias availed of the said program.
Sometime in 1985, the Conjuangco Farms owned by Mr. Danding
Conjuangco acquired CDCP Farms Corporation wh[ich] took over
the operations of said farms. Not long after, or in 1989, CDCP
Farms Corporation ceased to operate.
In July 1992, two former CDCP employees, went to the house of
Matias and brought with them duly accomplished documents and
Special Power of Attorney for his signature and informed him that the
lands in Bukidnon under his name with all the others were invaded
by squatters, and that the said land were covered by the
Comprehensive Agrarian Reform Program (CARP) where Matias
name was included in the list of landowners. Matias reluctantly
signed the document and after six months, he signed an
acknowledgment receipt of P100,000.00.
The original title registered in the name of Matias was cancelled and
a new title was issued. The transfer of said parcel of land was made
possible because Matias received managers checks from the Land
Bank of the Philippines as payment of Land Transfer Acquisition.
In 1996, Matias was rehired by PNCC as Project Controller in
Zambales PMMA Project.
Not long after, Mr.Alday, Head of the Realty Management Group of
PNCC invited Matias to his office and showed him a listing of parcels
of land in the name of different persons with the corresponding
status including the latters name. On the basis of the listing, Mr.
Alday told Matias that the transfer of the property registered in the
latters name was not yet consummated by the LBP and then
requested Matias to execute a Deed of Assignment in favor of PNCC
pertaining to the said property, which Matias did and guaranteed in
writing that the parcel of land is free from any lien or encumbrance.
On April 20, 1998, a memorandum was issued to Matias by PNCC
directing the former to explain in writing why none of the following
actions, falsification, estafa, dishonesty, and breach of trust and
confidence, should be taken against him in connection with the Deed
of Assignment. PNCC alleges that respondent fraudulently breached
its trust and confidence when, without its knowledge and consent, he
disposed of the Bukidnon property; though actually belonging to
petitioner, that property had purportedly been merely placed in trust
under his name. Thereafter, he assigned the same property to
petitioner, allegedly despite his full knowledge that the title had
already been transferred -- with his active planning and participation
-- to the Republic of the Philippines .
In due time, Matias submitted his written explanation. However, he
was later advised that he was terminated from the service on the
ground of loss of trust and confidence. Hence, Matias filed a
complaint for illegal dismissal and money claims against PNCC
alleging that the dismissal on the ground of loss of trust and
confidence was without basis.


ISSUE
Whether or not the dismissal of Matias on the ground of loss of trust
and confidence was without basis
RULING
YES. To constitute a valid cause to terminate employment, loss of
trust and confidence must be proven clearly and convincingly by
substantial evidence. To be a just cause for terminating
employment, loss of confidence must be directly to the duties
of the employee to show that he or she is woefully unfit to continue
working for the employer.
Undeniably, the position of project controller -- the position of
respondent at the time of his dismissal -- required trust and
confidence, for it related to the handling of business expenditures or
finances. However, his act allegedly constituting breach of trust and
confidence was not in any way related to his official functions and
responsibilities as controller. In fact, the questioned act pertained to
an unlawful scheme deliberately engaged in by petitioner in order to
evade a constitutional and legal mandate.
It has oft been held that loss of confidence should not be used as a
subterfuge for causes which are illegal, improper and unjustified. It
must be genuine, not a mere afterthought to justify an earlier action
taken in bad faith. Be it remembered that at stake here are the sole
means of livelihood, the name and the reputation of the employee.
Thus, petitioner must prove an actual breach of duty founded on
clearly established facts sufficient to warrant his loss of employment.
The Court stressed once more that the right of an employer to
dismiss an employee on account of loss of trust and confidence must
not be exercised whimsically. To countenance an arbitrary exercise
of that prerogative is to negate the employees constitutional right to
security of tenure. In other words, the employer must clearly and
convincingly prove by substantial evidence the facts and incidents
upon which loss of confidence in the employee may be fairly made to
rest; otherwise, the latters dismissal will be rendered illegal.

460
Bristol Myers v Baban
534 SCRA 198 (2008)
Just Causes Willful Breach of Trust & Confidence

FACTS
Petitioner hired respondent Baban as district manager to handle the
companys clients in Northern Mindanao area and its immediate
vicinities. His duties included the promotion of nutritional products to
medical practitioners, sale to drug outlets and the supervision of
territory managers in his district.

In a field audit conducted, twenty packs of samples were found in the
baggage compartment of a company car with an accompanying note
with political overnotes. Respondent admitted that it was his father
who was referred to in the note, who, after having served councilor in
Zamboanga City for 36 years has lost his bid for vice-mayoralty post
in the 1998 elections. Apparently, respondents father was thanking
supporters through distribution of petitioners sample products.

A memorandum was issued to respondent requiring him to explain in
writing why he should not be terminated for the infraction.
Respondent admitted his honest mistake and pleaded for
consideration insisting that he has not cause any damage nor injury
to the image of the company as the samples were not, in fact,
distributed and that no gain was delivered by him or his family. After
a private conference where he was able to submit evidence, he
received under protest the memorandum of his dismissal.

He filed a case for illegal dismissal with a claim for moral and
exemplary damages plus attorneys fees.

The Labor Arbiter dismissed his complaint. NLRC reinstated Labor
Arbiters decision after a Motion for Reconsideration. Court of
Appeals ruled in favor of the respondent, finding the dismissal
unjustified, much too harsh and not commensurate with the alleged
infraction.

ISSUE
May the CA order the reinstatement, with full back wages and
damages, of a confidential employee whom it had found to be guilty
of breach of trust?

RULING
NO. Article 282 of the Labor Code provides that fraud or willful
breach by the employee of the trust reposed in him by his employer
or his duly authorized representative merits a valid dismissal. The
right of employers to dismiss employees by reason of loss of trust
and confidence is well established in our jurisprudence.

The first requisite is that the employee concerned must be one
holding a position of trust and confidence. Verily, respondent herein
is handling large amounts of petitioners samples and therefore he is
among those who in the normal and routine exercise of their
functions, regularly handle significant amounts of money and
property. The second requisite is that there must be a willful act that
would justify the loss of trust and confidence, and the same must be
founded on clearly established facts. Respondents act of stapling a
thank you note from his father warrants the loss of petitioners trust
and confidence. He had, in effect, appropriated company property for
personal gain and benefit.

Having met the requisites, the Court finds the dismissal valid. Since
respondent was validly dismissed for a cause other than serious
misconduct or those that negatively reflect on his moral character,
the Court also finds the award of separation pay justifiable.











461
Gana v NLRC
554 SCRA 471 (2008)
Just Causes Willful Breach of Trust & Confidence

FACTS
On December 1, 1996, petitioner commenced her employment as
marketing manager of Total Distribution and Logistics System, Inc.
(TDLSI), a sister company of Aboitiz Transport, Aboitiz Container
and Aboitiz Haullers, respondent company. In 1997, she was
transferred from TDLSI to respondent company retaining the same
position as marketing manager. In 1998, petitioner was required by
private respondent Carl Wozniak (Wozniak), the Senior Vice-
President and General Manager of Aboitiz Haulers, to explain in
writing why she should not be penalized for having violated company
rules on offenses against company interest. Wozniak directed her to
appear in an investigation to be conducted by the company and
defend herself with respect to the electronic mails (e-mails) she sent
to an official of Trans-America, divulging various confidential
information about the business operations and transactions of Aboitiz
Container which are detrimental to the said company. On April 24,
1998, petitioner, through her counsel, sent a letter to Wozniak
denying the charges against her. In a letter dated May 22, 1998,
Wozniak informed petitioner that her explanations during the
investigation with respect to the charges leveled against her were
found to be unacceptable; that she was found guilty of Betrayal of
Confidential Information which constitutes sufficient reason for the
company to lose the high degree of trust and confidence which it
reposed upon her as its manager; and that as a result, her
employment with respondent company has been terminated.

Petitioner then filed a Complaint for illegal dismissal with the NLRC.
The Labor Arbiter rendered a Decision finding respondent company
guilty of illegally dismissing petitioner. On appeal, the NLRC set
aside the Decision of the LA. Petitioner filed a Motion for
Reconsideration but the same was denied. Petitioner then filed a
petition for certiorari with the CA questioning the Decision and Order
of the NLRC. The CA promulgated its presently assailed Decision
dismissing the petition for certiorari and affirming the questioned
Decision and Order of the NLRC. Petitioner filed a Motion for
Reconsideration but it was denied by the CA in its Resolution dated
July 26, 2004.

ISSUE
Whether or not Petitioner is illegally dismissed

HELD
NO, petitioners dismissal was valid.

During the investigation, it was established that the petitioner sent
email messages/reports to Transamerica regarding the respondent
companys internal problems, the rates it charges, customer
complaints, and in declaring that her loyalty is with Transamerica and
not her employer, AHI.

The settled rule is that the mere existence of a basis for believing
that a managerial employee has breached the trust of the employer
justifies dismissal. Petitioner does not deny having sent the subject
e-mails to Trans-America. The Court finds no error in the conclusion
of the CA that petitioner's intention in sending these e-mails was to
inform Trans-America of the supposed inefficiency in the operations
of respondent company as well as the company's poor services to its
clients. These pieces of information necessarily diminish the
credibility of respondent company and besmirch its reputation. In
fact, Trans-America wrote Wozniak expressing its disappointment in
the services that the Aboitiz companies were rendering. Hence,
respondent company cannot be faulted for having lost its trust and
confidence in petitioner and in refusing to retain her as its employee
considering that her continued employment is patently inimical to
respondent company's interest. The law, in protecting the rights of
labor, authorizes neither oppression nor self-destruction of an
employer company which itself is possessed of rights that must be
entitled to recognition and respect.







462
Etcuban v Sulpicio Lines
448 SCRA 516 (2008)
Just Causes Willful Breach of Trust & Confidence

FACTS
Petitioner was the Chief Purser of the respondent company. As such,
he was tasked to handle the funds of the vessel and he was the
custodian of all the passage tickets and bills of lading. It was his
responsibility, among other things, to issue passage tickets and
receive payments from the customers of the respondent, as well as
to issue the corresponding official receipts therefor. He was also
tasked to disburse the salaries of the crewmen of the vessel.

In May 1994, the newly designated jefe de viaje, in a surprise
examination, discovered that several yellow passengers duplicate
original of yet to be sold or unissued passage tickets already
contained the amount of P88.00. He noticed that three other original
copies which made up the full set did not bear the same impression,
although they were supposed to have been prepared at the same
time.

Respondent issued a memorandum to petitioner instructing him to
explain in writing why no disciplinary action should be meted on him
or to submit himself to an investigation. It also informed him of his
immediate preventive suspension until further notice. After the initial
investigation, petitioner was told to sign its minutes but he adamantly
refused, claiming the same to be self-incriminatory. The next day,
the petitioner was replaced in his position. He thought he was fired
from his job and therefore filed a complaint for illegal dismissal, non-
payment of 13
th
month pay, OT pay and other monetary benefits. He
averred that the ground for his dismissal i.e. loss of trust and
confidence, was ill-motivated and without factual basis. He did not
deny having possession of the subject tickets but denied that he was
guilty of any wrongdoing.

The Labor Arbiter found the petitioners dismissal illegal. NLRC
affirmed the challenged decision. The Court of Appeals reversed and
set aside the NLRC decision.

ISSUE
Whether or not the petitioner was illegally dismissed

RULING
No, the dismissal was not illegal. There was sufficient basis for the
respondents loss of trust and confidence on petitioner. The
tampered tickets were found in his possession, and as Chief Purser,
he was the custodian of the unissued tickets. Proof beyond
reasonable doubt is not necessary to justify loss of trust and
confidence, it being sufficient that there is some basis to justify it.

With respect to rank-and-file personnel, loss of trust and confidence
as ground for valid dismissal requires proof of involvement in the
alleged events in question, and that mere uncorroborated assertions
and accusations by the employer will not be sufficient. But as
regards a managerial employee, the mere existence of a basis for
believing that such employee has breached the trust of his employer
would suffice for his dismissal. Hence, in the case of managerial
employees, proof beyond reasonable doubt is not required, it being
sufficient that there is some basis for such loss of confidence, such
as when the employer has reasonable ground to believe that the
employee concerned is responsible for the purported misconduct,
and the nature of his participation therein renders him unworthy of
the trust and confidence demanded by his position.

In the case at bar, petitioners work is of such nature as to require a
substantial amount of trust and confidence on the part of the
employer. Being the Chief Purser, he occupied a highly sensitive and
critical position and may thus be dismissed on the ground of loss of
trust and confidence.










463
John Hancock v Davis
564 SCRA 92 (2008)
Just Causes Analogous Cases

FACTS
Respondent was agency administration officer of petitioner John
Hancock Life Insurance Corporation. She was placed under
preventive suspension by petitioner after being being positively
identified thru a security video as the person using the corporate
affairs manager after the latters wallet was stolen. Respondent filed
a complaint for illegal dismissal alleging that petitioner terminated her
employment without cause, following the dismissal of the complaint
for qualified theft filed against her in the city prosecutors office due
to insufficiency of evidence.

The Labor Arbiter ruled that there was valid cause for her dismissal.
NLRC affirmed the Labor Arbiters decision. The Court of Appeals
found that the Labor Arbiter and NLRC merely adopted the findings
of the NBI regarding the respondents culpability and therefore
reversed their decisions.

ISSUE
Whether or not the respondents dismissal was valid

RULING
Yes. Article 282 of the Labor Code provides that an employer may
terminate an employment for (a) Serious misconduct or willful
disobedience by the employee of the lawful orders of his employer or
his representatives in connection with his work; and (e) other
causes analogous to the foregoing.

In this case, petitioner dismissed respondent based on the NBI's
finding that the latter stole and used the managers credit cards. But
since the theft was not committed against petitioner itself but against
one of its employees, respondent's misconduct was not work-related
and therefore, she could not be dismissed for serious misconduct.

Nonetheless, Article 282(e) of the Labor Code talks of other
analogous causes or those which are susceptible of comparison to
another in general or in specific detail.[13] For an employee to be
validly dismissed for a cause analogous to those enumerated in
Article 282, the cause must involve a voluntary and/or willful act or
omission of the employee.

A cause analogous to serious misconduct is a voluntary and/or willful
act or omission attesting to an employee's moral depravity. Theft
committed by an employee against a person other than his
employer, if proven by substantial evidence, is a cause analogous to
serious misconduct.

The resolution of the Court of Appeals is reversed and set aside. The
resolution of the NLRC is reinstated.



464
Yrasuegi v Philippine Air Lines
569 SCRA 467 (2008)
Just Causes Analogous Cases

FACTS
This case portrays the peculiar story of an international flight steward
who was dismissed because of his failure to adhere to the weight
standards of the airline company.

The proper weight for a man of his height and body structure is from
147 to 166 pounds, the ideal weight being 166 pounds, as mandated
by the Cabin and Crew Administration Manual of PAL. In 1984, the
petitioners weight problem started, which prompted PAL to send him
to an extended vacation until November 1985. He was allowed to
return to work once he lost all the excess weight. But the problem
recurred. He again went on leave without pay from October 17, 1988
to February 1989.

Despite the lapse of a ninety-day period given him to reach his ideal
weight, petitioner remained overweight. On January 3, 1990, he was
informed of the PAL decision for him to remain grounded until such
time that he satisfactorily complies with the weight standards. Again,
he was directed to report every two weeks for weight checks, which
he failed to comply with.

On April 17, 1990, petitioner was formally warned that a repeated
refusal to report for weight check would be dealt with accordingly. He
was given another set of weight check dates, which he did not report
to.
On November 13, 1992, PAL finally served petitioner a Notice of
Administrative Charge for violation of company standards on weight
requirements. Petitioner insists that he is being discriminated as
those similarly situated were not treated the same.

On June 15, 1993, petitioner was formally informed by PAL that due
to his inability to attain his ideal weight, and considering the utmost
leniency extended to him which spanned a period covering a total
of almost five (5) years, his services were considered terminated
effective immediately.

The Labor Arbiter held that the weight standards of PAL are
reasonable in view of the nature of the job of petitioner. However, the
weight standards need not be complied with under pain of dismissal
since his weight did not hamper the performance of his duties. NLRC
affirmed. The Court of Appeals ruled that the weight standards of
PAL are reasonable. Thus, petitioner was legally dismissed because
he repeatedly failed to meet the prescribed weight standards. It is
obvious that the issue of discrimination was only invoked by
petitioner for purposes of escaping the result of his dismissal for
being overweight.

ISSUE
Whether or not the petitioner was validly dismissed

RULING
YES. A reading of the weight standards of PAL would lead to no
other conclusion than that they constitute a continuing qualification of
an employee in order to keep the job. The dismissal of the employee
would thus fall under Article 282(e) of the Labor Code on analogous
cases.

In the case at bar, the evidence on record militates against
petitioners claims that obesity is a disease. That he was able to
reduce his weight from 1984 to 1992 clearly shows that it is possible
for him to lose weight given the proper attitude, determination, and
self-discipline. Indeed, during the clarificatory hearing on December
8, 1992, petitioner himself claimed that [t]he issue is could I bring
my weight down to ideal weight which is 172, then the answer is yes.
I can do it now.

Petitioner has only himself to blame. He could have easily availed
the assistance of the company physician, per the advice of PAL.

The Court held that the obesity of petitioner, when placed in the
context of his work as flight attendant, becomes an analogous cause
under Article 282(e) of the Labor Code that justifies his dismissal
from the service. His obesity may not be unintended, but is
nonetheless voluntary. As the CA correctly puts it, voluntariness
basically means that the just cause is solely attributable to the
employee without any external force influencing or controlling his
actions. This element runs through all just causes under Article 282,
whether they be in the nature of a wrongful action or omission. Gross
and habitual neglect, a recognized just cause, is considered
voluntary although it lacks the element of intent found in Article
282(a), (c), and (d).


465
Alabang Country Club v NLRC
545 SCRA 351 (2008)
Just Causes Analogous Cases

FACTS
Petitioner is a domestic non-profit corporation and respondent union
is the exclusive bargaining agent of the Clubs rank-and-file
employees. Private respondents Pizarro, Barza and Castueras, were
elected Union President, Vice-President and Treasurer, respectively.
In 1999, the Club and the Union entered into a Collective Bargaining
Agreement which provided for a Union shop and maintenance of
membership shop. Section 5 of the CBA provides that Upon written
demand of the Union and after observing due process, the Club shall
dismiss a regular rank-and-file employee on the ground of failure to
join, or resignation from, the Union; conviction of a crime involving
moral turpitude; and malversation of union funds, among others.

After elections for a new set of officers, an audit was conducted on
the Union funds. Unrecorded entries, unaccounted expenses and
disbursements, and uncollected loans from the Union funds were
discovered. The Union notified respondents Pizarro, Barza and
Castueras of the audit results and were asked to explained the
discrepancies therein. Despite their explanations, they were expelled
from the Union.

Subsequently, the Union, invoking the Security Clause of the CBA,
demanded that the Club dismiss the respondents in view of their
expulsion from the Union. The Club required the respondents to
show cause why they should not be dismissed. The Clubs General
Manager called them for an informal conference inquiring about the
charges against them. Claiming that such are baseless, the general
manager announced that he would conduct a formal investigation.

After weighing the verbal and written explanations of the
respondents, the Club concluded that said respondents failed to
refute the validity of their expulsion from the Union. Thus, it was
constrained to terminate the employment of said respondents.
Respondents filed a complaint of illegal dismissal. Labor Arbiter ruled
in favor of the club. NLRC declared the dismissal illegal. The Court of
Appeals upheld the NLRC ruling that the respondents were deprived
due process.

ISSUE
Whether the respondents were illegally dismissed

RULING
Under the Labor Code, an employee may be validly terminated on
the grounds under Articles 282-285. Another cause for termination is
dismissal from employment due to the enforcement of the union
security clause in the CBA. There is union shop when all new regular
employees are required to join the union within a certain period as a
condition for their continued employment. There is maintenance of
membership shop when employees who are union members as of
the effective date of the agreement, or who thereafter become
members, must maintain union membership as a condition for
continued employment until they are promoted or transferred out of
the bargaining unit or the agreement is terminated. Termination of
employment by virtue of a union security clause embodied in a CBA
is recognized and accepted in our jurisdiction.

In terminating the employment of an employee by enforcing the
union security clause, the employer needs only to determine and
prove that: (1) the union security clause is applicable; (2) the union is
requesting for the enforcement of the union security provision in the
CBA; and (3) there is sufficient evidence to support the union's
decision to expel the employee from the union. These requisites
constitute just cause for terminating an employee based on the
CBA's union security provision.

In this case, the requisites were satisfied; the three respondents
were expelled from and by the Union after due investigation for acts
of dishonesty and malversation of Union funds. In accordance with
the CBA, the Union properly requested the Club to enforce the Union
security provision in their CBA and terminate said respondents.
Then, in compliance with the Union's request, the Club reviewed the
documents submitted by the Union, requested said respondents to
submit written explanations, and thereafter afforded them reasonable
opportunity to present their side. After it had determined that there
was sufficient evidence that said respondents malversed Union
funds, the Club dismissed them from their employment conformably
with Sec. 4(f) of the CBA.


466
Manatad v Philippine Telegraph & Telephone Corporation
548 SCRA 64 (2008)
Closure of Establishment & Reduction of Personnel

FACTS
Petitioner was employed in respondent company as junior clerk and
was later promoted as Account Executive, the position she held until
she was temporarily laid off from employment. Her temporary
separation was pursuant to the Temporary Staff Reduction Program
adopted by respondent company due to serious business reverses.
In 1998, she received a letter from respondent inviting her to avail
herself of the program package. However, she did not opt to avail
herself of such. In 1999, she received a Notice of Retrenchment from
respondent permanently dismissing her from employment.

She filed for illegal dismissal averring that the retrenchment program
is invalid as the respondent company was gaining profits for the
period of 1997-1998. Furthermore, she presented a document
granting an increase in the salaries of the employees under Grade 8
and 9. Therefore, petitioner was showing that it was still
economically viable for respondent to continue its business
operations without downsizing its workforce.

The Labor Arbiter ruled in favor of the petitioner. NLRC affirmed the
challenged decision. On certiorari, the Court of Appeals reversed the
NLRC and the Labor Arbiter Decisions and upheld the validity of the
respondents retrenchment program.

ISSUE
Whether or not the retrenchment program implemented by
respondent was valid

RULING
Retrenchment is the termination of employment initiated by the
employer through no fault of the employees and without prejudice to
the latter, resorted to by management during periods of business
recession; industrial depression; or seasonal fluctuations, during lulls
occasioned by lack of orders, shortage of materials, conversion of
the plant for a new production program, or the introduction of new
methods or more efficient machinery or automation. Retrenchment is
a valid management prerogative. It is, however, subject to faithful
compliance with the substantive and procedural requirements laid
down by law and jurisprudence. In the discharge of these
requirements, it is the employer who bears the onus, being in the
nature of affirmative defense.

For a valid retrenchment, the following requisites must be complied
with: (a) the retrenchment is necessary to prevent losses and such
losses are proven; (b) written notice to the employees and to the
DOLE at least one month prior to the intended date of retrenchment;
and (c) payment of separation pay equivalent to one-month pay or
at least one-half month pay for every year of service, whichever is
higher.

In the instant case, upon examination of the evidence adduced by
both parties, the Court was convinced that, indeed, respondent
experienced serious financial crises as shown in the financial
statements audited by independent auditors, SGV & Co. and Alba
Ledesma & Co. It is unlikely therefore that respondent was just
feigning business losses in order to ease out employees.

No evidence can best attest to a companys economic status other
than its financial statement. Being guided accordingly, we find that
respondent was fully justified in implementing a retrenchment
program since it was undergoing business reverses, not only for a
single fiscal year, but for several years prior to and even after the
program.

Even granting arguendo that respondent was not experiencing
losses, it is still authorized by Article 283 of the Labor Code to cease
its business operations. Explicit in the said provision is that closure
or cessation of business operations is allowed even if the business is
not undergoing economic losses. The owner, for any bona fide
reason, can lawfully close shop anyone. Just as no law forces
anyone to go into business, no law can compel anybody to continue
in it. It would indeed be stretching the intent and spirit of the law if we
were to unjustly interfere with the managements prerogative to close
or cease its business operations, just because said business
operations are not suffering any loss or simply to provide the
workers continued employment.

The law recognizes the right of every business entity to reduce its
work force if the same is made necessary by compelling economic
factors which would endanger its existence or stability. In spite of
overwhelming support granted by the social justice provisions of our
Constitution in favor of labor, the fundamental law itself guarantees,
even during the process of tilting the scales of social justice towards
workers and employees, "the right of enterprises to reasonable
returns of investment and to expansion and growth." To hold
otherwise would not only be oppressive and inhuman, but also
counter-productive and ultimately subversive of the nation's thrust
towards a resurgence in our economy which would ultimately benefit
the majority of our people. Where appropriate and where conditions
are in accord with law and jurisprudence, the Court has authorized
valid reductions in the work force to forestall business losses, the
hemorrhaging of capital, or even to recognize an obvious reduction
in the volume of business which has rendered certain employees
redundant.

The Court also finds that the respondent complied with the requisite
notices to the employee and the DOLE to effect a valid
retrenchment.

The petition is denied and the Decision of the Court of Appeals is
affirmed.