063 HOUSE OF SARA LEE, Petitioner, vs.CYNTHIA F.

REY,Respondent.
[G.R.No.149013August31,2006]
TOPIC:13thMonthPay>EmployeeNotEntitled
PONENTE:AUSTRIAMARTINEZ,J.

AUTHOR:
NOTES:(ifapplicable)

FACTS:(chronologicalorder)
TheHouseofSaraLee(petitioner)isengagedinthedirectsellingofavarietyofproductlinesformenandwomen ,
including cosmetics, intimate apparels, perfumes, ready to wear clothes and other noveltyitems, through itsvariousoutlets
nationwide. In the pursuit of its business, the petitioner engages and contracts with dealers to sell the aforementioned
merchandise. These dealers, known either as "Independent Business Managers" (IBMs) or "Independent Group
Supervisors"(IGSs),dependingonwhethertheysellindividuallyorthroughtheirowngroup,wouldobtainatdiscountedrates
the merchandise from the petitioner on credit and then sell the same products to their own customers at fixed prices also
determinedbythepetitioner.Inturn,thedealersarepaid"ServicesFees,"orsalescommissions,theamountofwhichdependson
thevolumeandvalueoftheirsales.
2. Underexistingcompanypolicy,thedealersmustremittothepetitionertheproceedsoftheirsaleswithinadesignated
creditperiod,whichwouldeitherbe38daysforIGSsor52daysforIBMs,countedfromthedaythesaiddealersacquiredthe
merchandisefromthepetitioner.
3. Todiscouragelateremittances,thepetitionerimposesaCreditAdministrationCharge,orsimply,apenaltycharge,on
thevalueoftheunremittedpayment.Additionally,ifthedealerconcernedhasoverduepaymentsorissaidtobeindefault,he
orshecannotpurchaseadditionalproductsfromthepetitioner.
4. CynthiaReyheldthepositionofCreditAdministrationSupervisororCASattheCagayandeOroCitybranchofthe
petitioner.HerprimarydutyoftheCASistostrictlymonitordeadlines,tosupervisethecreditandcollectionofpayments
and outstanding accounts due to the petitioner from its independent dealers and various customers, and to screen
prospectiveIBMs. Todischargetheseresponsibilities,theCASisprovidedwithacomputerequippedwithcontrolsystems
throughwhichdataisreadilygenerated.
5. SometimeinJune1995,whilerespondentwasstillworkinginButuanCity,sheallegedlyinstructedtheAccountsReceivable
ClerkoftheCagayandeOrooutlet,tochangethecredittermofoneoftheIBMsofthepetitioner ,acertainMs.Mariam
ReyPetilla,whohappenstoberespondentssisterinlaw,fromthe52daylimittoanunauthorizedtermof60days.
6. Actingonthereport,BOMVillagraciadiscreetlyverifiedtherecordsanddiscoveredthatitwasnotonlythe52daycredit
termofIBMReyPetillathathadbeenextendedbytherespondent,buttherewereseveralotherIBMswhosecreditterms
hadbeensimilarlyextendedbeyondtheperiodsallowedbycompanypolicy.
7. BOMVillagraciathensummonedtherespondentandrequiredhertoexplaintheunauthorizedcreditextensions. Thepetitioner
allegesthatduringthatconfrontation,respondentadmittedherinfractionsandbeggedtheBOMnottoelevateordisclose
thematterfurthertohigherauthorities. Inaletter,Villagraciaformallyreportedthemattertohighermanagement,
statingthatrespondent,intearsandremorseandconfidinghersincerestapology,personallyadmittedthatthecredit
termsofcertainIBMswereadjustedinthecomputerforpurposesofcomputingtheServiceFees.Villagraciaformallyserveda
showcauselettertorespondentandplacedheronindefinitesuspension.
8. Reywasfoundtohaveviolatedthecompanypoliciespertainingtotheunauthorizedextensionofcreditperiods,noncollection
ofremittances,nonimpositionofpenaltycharges,authorizingpurchasesandgivingofsupervisionfeesdespitenonremittance,
etc.
9. AsaconsequenceofthediscoveryoftheforegoingallegedanomalouspracticeofextendingthecredittermsofcertainIBMs,
managementundertookanauditoftheCagayandeOroCityandButuanCitybranches.Duringtheprocess,thepetitioneralleges,
respondentwasinterviewedbytheauditorsbeforewhomsheagainopenlyadmittedherinfractions.Onthebasisofthehearing,
theallegedvoluntaryadmissionsofrespondent,andthefindingsoftheauditorsreport,thepetitioner,onJune25,1996,formally
dismissedtherespondentforbreachoftrustandconfidence.
10. Respondent then filed her Complaint for illegal dismissal, backwages and damages. The Complaint prayed for
reinstatementwithfullbackwageswithoutlossofseniorityrights,paymentof13th,14thand15thmonthpay,andtheawardof
moraldamagesandattorneysfees.
11. ThelaborarbiterheldthatpetitionerSaraLeefailedtorefutetheclaimfor13thmonthpay,hence,asastatutoryrelief,respondent
Reyshouldbeawardedthesame;andthattheclaimsfor14thand15thmonthpayaswellasmoralandexemplarydamagesshould
bedeniedforhavingnolegalbasis.TheNLRCandCArefusedtoawardthe14thand15thmonthpay.
1.

ISSUE(S):WhetherornotReyisentitledto13th,14thand15thmonthpay?
HELD:No.
RATIO:
Theawardof13thmonthpaymustbedeleted.Respondentisnotarankandfileemployeeandis,therefore,notentitledto
thirteenthmonthpay.
TheNLRCandtheCAarecorrectinrefusingtoaward14thand15thmonthpayaswellasthe"monthlysalaryincreaseof10percent
peryearfortwoyearsbasedonherlatestsalaryrate."Therespondentmustshowthatthesebenefitsareduetoherasamatterof
right.53Theruleinthesecasesis,shewhoalleges,notshewhodenies,mustprove.Mereallegationsbytherespondentdonot
sufficeintheabsenceofproofsupportingthesame. 54 Withrespecttosalaryincreasesinparticular,therespondentmust
likewise show that she has a vested right to the same, such that her salary increases can be made a component in the
computationofbackwages.Whatisevidentisthatsalaryincreasesareamereexpectancy.Theyarebynaturevolatileand
dependentonnumerousvariables,includingthecompanysfiscalsituation,theemployeesfutureperformanceonthejob,or
theemployeescontinuedstayinaposition. 55Inshort,absentanyproof,thereisnovestedrighttosalaryincreases. 56 (Thisis
everythingtheCourthadtosayaboutthe13thmonthpayissue.Noexplanationastoitsapplicationinthecaseatbar.)
Sideissue:
Whetherornotthedismissalwasvalid?
YES.TheSCheldthatrespondentReywasnotillegallydismissed.Shewasdismissedbyreasonoflossoftrustandconfidence.
Lossofconfidenceasajustcausefordismissalispremisedonthefactthatanemployeeconcernedholdsapositionoftrustand
confidence.Thissituationapplieswhereapersonisentrustedwithconfidenceondelicatematters,suchasthecustody,handling,or
careandprotectionoftheemployersproperty.But,inordertoconstituteajustcausefordismissal,theactcomplainedofmustbe
workrelated,suchthattheemployeeconcernedisunfittocontinueworkingfortheemployer.
Distinctiononlossoftrustandconfidenceonthefollowingemployees:
1. Rankandfileemployeesrequiresproofofinvolvementintheallegedeventsinquestion,andthatmereuncorroboratedassertions
andaccusationsbytheemployerwillnotbesufficient;
2. Managerialemployeesthemereexistenceofabasisforbelievingthatsuchemployeehasbreachedthetrustofhisemployer
wouldsufficeforhisdismissal.Hence,inthecaseofmanagerialemployees,proofbeyondreasonabledoubtisnotrequired;itis
sufficientthatthereissomebasisforthelossofconfidence,aswhentheemployerhasreasonablegroundtobelievethatthe
employeeconcernedisresponsibleforthepurportedmisconduct,andthenatureofhisparticipationthereinrendershimunworthy
ofthetrustandconfidencedemandedbyhisposition
Inthecaseatbar,respondentisnotanordinaryrankandfileemployee.Respondentoccupiedahighlysensitiveandcriticalposition
andmaythusbedismissedonthegroundoflossoftrustandconfidence.Thepositioncarriedwithitthedutytoobserveproper
company procedures in the fulfillment of her job, as it relates closely to the financial interests of the company. Respondents
unauthorizedextensionsofthecreditperiodsofthedealersareprejudicialtotheinterestofthepetitionerandbearseriousfinancial
implications.
CASELAW/DOCTRINE:
DISSENTING/CONCURRINGOPINION(S):