SECOND DIVISION

[G.R. No. 120450. February 10, 1999]

ASSOCIATED LABOR UNIONS - TUCP and RENATO FELIZARDO, petitioners,

vs. NATIONAL LABOR RELATIONS COMMISSION, REPUBLIC FLOUR
MILLS, GROUP OF COMPANIES and/or SELECTA ICE CREAM
CORPORATION and BEN T. MAKIL, respondents.

DECISION
MENDOZA, J.:

This is a petition for certiorari to annul the decision of the National Labor Relations Commission in NLRC
NCR 00-09-06075-93 on the ground that it was rendered with grave abuse of discretion.
Petitioner Renato Felizardo was employed at respondent Republic Flour Mills-Selecta Ice Cream
Corporation as jet printer operator on November 16, 1991. He was dismissed from employment on September
13, 1993 for dishonesty and theft of company property. He and petitioner Associated Labor Union-TUCP, of
which he is the secretary, filed a complaint for illegal dismissal, unfair labor practice, and non-payment of 13th
month pay against respondent company. He was ordered reinstated without backwages by the Labor Arbiter,
but the NLRC reversed the said decision and dismissed his complaint. Hence, this petition.
The facts are as follows:
On September 12, 1993, at around 7 oclock in the morning, petitioner was apprehended by a security guard
manning respondent companys gate while bringing out a pair of boots, one (1) piece of aluminum container,
and fifteen (15) pieces of hamburger patties. During the investigation conducted the same day by the companys
security services, he gave the following statement written in Filipino:[1]

SA KINAUUKULAN,

Ako po si G. Renato Felizardo, 22 anyos at kasalukuyang nakatira sa Cainta, Rizal.

Ako po ay isang regular employee [ng] SELECTA Production Dept.

Ako po ay nahulihan ng isang coloring container, 15 pirasong patties hamburger dito sa SELECTA
Gate kasama ang isang pair na boots. Ang mga nabanggit na kagamitan ay walang kaukulang
dokumento o papel subalit ito ay batid ni Mr. Orpilla na ilalabas ko ang mga ito. Ako po ay nasita
ni Sg. Manolito Ojana bandang 7:45 ng umaga, 12 Setyembre 1993 dito sa SELECTA Gate.

Ang pag-aming ito ay kusang loob kong inihayag kay Sg. Richard M. Torino.

(Sgd.) R. FELIZARDO

On September 13, 1993, he was placed under preventive suspension pending investigation of the incident
by the company. On the same day, he wrote a letter to his supervisor, D.M. Orpilla, Jr., asking for
forgiveness. The letter, written in Filipino, reads:[2]

BOSS. Pasensya na kayo, alam ko magagalit kayo sa akin pero hindi ko rin kagustuhan ito, iu[u]wi
ko sana yong Bota ko kasi baha sa aming saka yong coloring container, saka iyong konting natira
na patties pero nasita ako ng Guardia. Kaya sinabi ko yong patties eh, nakuha ko lang sa Janitor eh,
itatapon na kaya iuuwi ko sana. Eh, gusto yata ng Guardia eh makausap kayo para maayos.

Boss, kakasuhan yata ako kaya nagmamakaawa ako sa inyo Boss tulungan ninyo ako. Hindi ko
naman ito gustong mangyari naenganyo lang ako. Eh, gusto yata ni Capt. Molina eh kayo
makausap.
Boss, ngayon lang ako sa inyo magmamakaawa alam ko maiintindihan ninyo rin ako saka kayo
lang ang alam kong makakatulong sa akin sana maunawaan ninyo ko. Hindi ko na kayo nahintay
dahil wala pa kong tulog since Sunday morning dahil dito. Kaya nasulat ko na lang.

Ang nagmamakaawa,

FELIZ

However, D.M. Orpilla, Jr., in his memorandum to respondent companys management, recommended
petitioners dismissal from employment for the following reasons:[3]

Stated below are the circumstances regarding the attempt of Renato Felizardo (Production
Weigher) to take out of the company premises the following:

1. Fifteen (15) pcs. Hamburger Patties

2. One (1) pc. of White Boots

3. One (1) pc. Aluminum Container (empty)

I. BACKGROUND

Based on the memo issued by Lt. E.G. Bianes, Detachment Commander dated 13 September
1993, R. FELIZARDO was caught by S.G. Manolito Ojana attempting to take out of the
company premises the above items. According to the written statement of R. Felizardo
(which he has submitted to the Security Dept.) that DMOrpilla, Jr. gave him the blessing to
take out of the premises the said items which is totally not true. Neither did DMOrpilla gave
him the alleged blessing nor did he give permission for him to bring the said items out.

II. AGGRAVATING CIRCUMSTANCES

1. Subject tried to get out [of] the mess by dragging DMOrpillas name which he is not aware of.

2. Based on the statement of his co-employees (Agnes Bautista, GAD Technician, Leonil Santos,
FG Whse Foreman), they both warned him against doing it.

III. MITIGATING CIRCUMSTANCES

R. Felizardo admitted that he did it based on a handwritten note (see attached) that he sent
DMOrpilla thru N. Sta. Ana, morning of September 13, 1993.

IV. VIOLATION COMMITTED

Based on the existing SDPI Company Rules and Regulations, R. Felizardo violated
Company Rules and Regulations 11, Section 15 stated as:

Violation Penalty

Dishonesty, stealing Termination

from the
Company or stealing
from others

V. RECOMMENDATION

The subject having committed the above violation is worse but dragging other peoples name
to justify commission of such an act is even worst.
 We are recommending the termination of Mr. Renato Felizardo.

On September 27, 1993, petitioner was dismissed for dishonesty for theft of company property, effective
September 13, 1993.
The Labor Arbiter found that with the exception of the pair of boots, the articles which petitioner took from
the company were mere scraps which were of no value to respondent company. He ruled that dismissal was too
harsh a penalty to be imposed on a first-time offender and that his unemployment for about eleven (11) months
was sufficient penalty for what he had done. Accordingly, the Labor Arbiter ordered petitioners reinstatement
without backwages.
On appeal, the NLRC reversed, stating:[4]

A careful examination of the record of the case reveals that complainant was found guilty of theft
for stealing a pair of company boots, 15 pieces of hamburger patties, and 1 piece of aluminum
container.

Humanitarian consideration weighs heavily against harsh punishment but the offense which
complainant is admittedly guilty [of] . . . . is specifically defined both under Article 282 of the
Labor Code, as amended, and the company rules and regulations as a just cause for dismissal. And
while it is true that a worker should be more favored in law, it is equally true that the employer
should not be required to continuously employ someone who has betrayed its trust and confidence.

In relation with the defenses put up by complainant-appellee, it was aptly observed by the
respondents-appellants that the defense of prior knowledge of the company through complainant-
appellees immediate supervisor is belied by the contents of his written explanation (p. 19, Records)
in connection with his letter to Mr. M. Orpilla, his supervisor, where he practically admitted his
attempt to cart away the said items had it not been timely foiled by the security guard manning the
gate (p. 20, Records).

As to whether or not complainant acted with intent to gain, suffice it to say, that in Criminal Law,
intent to gain is presumed from the unlawful taking of personal property belonging to another, and
in the case at bar the taking of company property was without the permission or knowledge of the
company. Moreover, it is not necessary that there was real or actual gain on the part of the
offender. It is enough that on taking them, he was then actuated by the desire or intent to gain
(People vs. Mercado, 65 Phil. 665).

PREMISES CONSIDERED, the appeal is hereby granted and the Decision of the Labor Arbiter
dated 22 August 1994 is hereby SET ASIDE, and a new Order is hereby entered DISMISSING the
complaint for lack of merit.

Petitioners contend that the NLRC committed grave abuse of discretion in setting aside the decision of the
Labor Arbiter and upholding petitioners dismissal from employment. They claim that the NLRC erred in
finding that petitioner was guilty of stealing company property.
The Labor Arbiter did not really find petitioner Felizardo innocent of the charge against him. Consequently,
the NLRC is not guilty of setting aside the factual findings of the Labor Arbiter. To the contrary, he found that
in the morning of September 12, 1993, petitioner was trying to take out of the company premises a pair of
boots, a drinking container, and fifteen (15) pieces of hamburger patties but was foiled by the security
guard. However, on humanitarian grounds, the Labor Arbiter ordered the reinstatement of petitioner pointing
out that except for the pair of boots, the other articles, i.e., the aluminum container and the hamburger patties,
were mere scraps without any value. There is no question, therefore, as to petitioners guilt. The only question is
whether dismissal is an appropriate penalty to impose on petitioner.
There is no question that the employer has the inherent right to discipline, including that of dismissing its
employees for just causes. This right is, however, subject to reasonable regulation by the State in the exercise of
its police power.[5] The finding of the NLRC that an employee violated the company rules and regulations is
subject to scrutiny by the Court to determine if the dismissal is justified and, if so, whether the penalty imposed
is commensurate to the gravity of his offense.[6]
 In this case, we agree with the Labor Arbiter that dismissal would not be proportionate to the gravity of the
offense committed by petitioner considering the value of the articles he pilfered and the fact that he had no
previous derogatory record during his two (2) years of employment in the company. The Labor Arbiter is
certainly mistaken in regarding the articles taken to be mere scraps and hence without value to the
company. They were of some value but not enough to warrant dismissal.
Moreover, it should also be taken into account that petitioner is not a managerial or confidential employee
in whom greater trust is placed by management and from whom greater fidelity to duty is correspondingly
expected.[7]It is easy to see why an unfaithful employee who is holding a position of trust and confidence in a
company poses a greater danger to its security than a mere clerk or machine operator like petitioner.
There is another reason why violations by non-confidential employees of company rules and regulations
such as that involved in this case are considered minor. Such employees are generally mere wage earners whose
dismissal from employment can have severe financial consequences on their families especially at a time like
the present when unemployment is quite high. Consequently, whatever missteps may have been committed by
them ought not to be visited with a consequence so severe as dismissal. The polestar of adjudication in this area
is still Justice, later Chief Justice, Enrique M. Fernandos statement of the rule in Meracap v. International
Ceramics Mfg. Phil., Inc.:[8]

It is not only because of the laws concern for the workingman. There is, in addition, his family to
consider.Unemployment brings untold hardships and sorrows on those dependent on the wage-
earner. The misery and pain attendant on the loss of jobs then could be avoided if there be
acceptance of the view that under all the circumstances of this case, petitioners should not be
deprived of their means of livelihood. Nor is this to condone what had been done by them. For all
this while, since private respondent considered them separated from the service, they had not been
paid. For the strictly juridical standpoint, it cannot be too strongly stressed, to follow Davis in his
masterly work, Discretionary Justice, that where a decision may be made to rest on informed
judgment rather than rigid rules, all the equities of the case must be accorded their due
weight. Finally, labor law determinations, to quote from Bultmann, should be not only secundum
rationem but also secundum caritatem.

This case is similar to Gelmart Industries Phils., Inc. v. NLRC,[9] in which this Court affirmed the
reinstatement of an employee who had taken out of the employers premises one (1) plastic container filled with
about 16 ounces of used motor oil. Reiterating the ruling in Meracap, we held:[10]

Considering that private respondent herein has no previous derogatory record in his fifteen (15)
years of service with petitioner GELMART, the value of the property pilfered (16 ounces of used
motor oil) is very minimal, plus the fact that petitioner failed to reasonably establish that non-
dismissal of private respondent would work undue prejudice to the viability of their operation or is
patently inimical to the companys interest, it is more in consonance with the policy of the State, as
embodied in the Constitution, to resolve all doubts in favor of labor.

As already stated, dismissal as a measure to protect the interests of respondent company is unwarranted
under the facts of this case. Suspension would have sufficed. Without deciding for how long the suspension
should be in cases such as this, considering that petitioner has been prevented from working in respondent
company since September 13, 1993, we hold that, for all purposes, he has served a reasonable period of
suspension commensurate to the gravity of his offense. Consequently, the Labor Arbiters order of reinstatement
of petitioner without backwages may be considered appropriate.
WHEREFORE, the instant petition is GRANTED. The decision of the National Labor Relations
Commission is hereby SET ASIDE and that of the Labor Arbiter is REINSTATED.
SO ORDERED.
[G.R. No. 106947. February 11, 1999]
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, petitioner, vs. NATIONAL
LABOR RELATIONS COMMISSION, AND ENRIQUE GABRIEL, respondents.

DECISION
QUISUMBING, J.:

This petition for certiorari under Rule 65 of the Rules of Court assails the Resolution[1] dated June 29, 1992
of the National Labor Relations Commission ordering petitioner to reinstate private respondent, Enrique
Gabriel, with full backwages, benefits, and proportionate privileges; as well as the Order[2] dated August 19,
1992, denying the motion for reconsideration. The challenged ruling reversed the decision[3] of the Labor
Arbiter dated May 3, 1991, which dismissed the complaint for lack of merit.
The facts of the case are as follows:
Private respondent, Enrique Gabriel, was employed by petitioner Philippine Long Distance Telephone
Company (PLDT), as a foreman in Dansalan Area 2, M-3. As a supervisor, his territorial responsibility covered
Camp Crames First to 20th Avenues and portions of Project 4, all in Quezon City.
On September 5, 1989, Enrique Gabriel ordered Medel Mercado, an installer, to set-up two telephone units
at Unit R, Facilities Center Building, located at Shaw Boulevard, Mandaluyong, Metro Manila. The telephone
numbers of the units were 78-88-41 and 79-98-46, in favor of a certain Mr. Marlon Aquino.
On October 16, 1989, private respondent, again ordered Juancho Jocson, another installer, to set-up
additional units with telephone numbers 78-40-70 and 79-40-98 for the same subscriber.
Later, both installation activities were investigated because (a) the Facilities Center Building had no
entrance cable facilities or conduit wires for telephone connection, (b) Mandaluyong was not within
respondents area of jurisdiction, and (c) installers Mercado and Jocson were not under his direct supervision.
In the administrative investigation conducted by PLDT, where a confrontation between private respondent
and installers Mercado and Jocson took place, private respondent tried to explain his side to clear certain issues
taken against him, adding that his intention in ordering the installation of the telephone units was to provide
customer satisfaction. However, on February 1, 1990, the petitioner still required the private respondent to
submit a written report of the incident. He submitted his explanation and, although admitting the responsibility
of his actions, reiterated his rationalization that his sole intention was to serve the customer, thereby earning
goodwill for the company.
On September 3, 1990, private respondent was dismissed from employment on the ground that he
committed grave misconduct, breach of trust, and violations of company rules and regulations when he ordered
the unwarranted installation activities.
On September 6, 1990, private respondent, as complainant below filed an illegal dismissal case[4] against
herein petitioner, PLDT.
On May 3, 1991, the Labor Arbiter rendered his decision finding the dismissal justified, viz.:

The complainants action were irregular because there was no entrance cable facilities or conduit
wires in the said building during those times for telephone connections. Nonetheless, to achieve his
purpose, the complainant himself secured OK numbers for the telephones and performed call back
at the panel box representing himself to the Dispatch Clerk as the subscriber. He then instructed
Medel and Joscon (sic) to turnover the telephone instruments to him and made them to enter in the
Consumption and Work Report that the telephone units have been actually installed. Such
proddings for misrepresentation has placed Medels and Joscons (sic) employment in jeopardy of
termination.

The complainants infractions were aggravated by the fact that his intervention in the works of the
two (2) installers were made in Mandaluyong, which area, is not within the sphere of his
assignment and authority. x x x

The defense he put up, that his actuations did not involve any monetary considerations is
unavailing. The infractions he committed merited disciplinary action. Mere violation of the
company rules need not be qualified with the involvement of money considerations. Existing
company regulations were defied, his authority was exceeded which even put to risk the
employment and livelihood of the two (2) workers whom he forced to perform chores contrary to
company rules and against their will. The tendency to commit infraction against the company has
been demonstrated not only once, but twice, in favor of one subscriber has, actually, no doubt made
him unworthy to stay further on his job.

xxxxxxxxx

WHEREFORE, the respondent is hereby ordered to pay the complainant his proportionate 13th
month pay for the year 1989. The rest of the claims, including the complaint for illegal dismissal,
are dismissed for lack of merit.

SO ORDERED.[5]

Private respondent appealed to the public respondent, National Labor Relations Commission. The NLRC
reversed the decision of the labor arbiter, to wit.:

Simply put, what we have here is a situation where a concerned supervisor whose help was sought
by an impatient subscriber, conscious of the seemingly irremediable handicap in respondents
coming to par with the consuming publics demands particularly in the field of telephone
installation, accedes to the request for help and thus contributed whatever facilitation help he could,
after all as what complainant afore-stressed (an explanation overlooked by the Labor Arbiter), the
subject telephones could only be installed after the documents of approval were issued by PLDT,
mechanics for which approval while certainly beyond his means and capacity, nonetheless serve as
effective check against real, and not merely imaginary, irregularities PLDT personnel may
conceive.

All told, respondents charge cannot even qualify as misconduct on the part of complainant. That the
respondent used as ground for terminating complainants service serious misconduct (Art. 282 [a] of
Labor Code), a matter far from what we see on record, we cannot but reverse the decision of the
Labor Arbiter on this point.

Accordingly, the decision of the Labor Arbiter insofar only as concerns the issue of dismissal is
hereby set aside. The respondent is thus directed to reinstate complainant to his position held as at
the time of the complained dismissal, with full backwages, benefits and proportionate privileges.

SO ORDERED[6]

Petitioners motion for reconsideration was denied by the NLRC in an Order dated August 19, 1992. Thus,
PLDT elevated the case to this Court, raising one basic question:

WHETHER OR NOT GABRIEL IS GUILTY OF SERIOUS MISCONDUCT AND/OR BREACH

OF TRUST ANENT THE IRREGULAR INSTALLATION OF THE AFORE-NUMBERED
TELEPHONES.

However, more appropriately phrased for our consideration by virtue of Rule 65, the sole issue to be
resolved here is whether the public respondent, NLRC, abused its discretion amounting to lack or excess of
jurisdiction in reversing the decision of the Labor Arbiter, and ordering the reinstatement of private respondent
with full backwages and other benefits.
Petitioner anchors the validity of private respondents dismissal on two grounds: (1) his acts constituted
breach of trust when he intervened in the anomalous installation of four telephone lines, and (2) he violated the
standard operating procedures (SOP) on telephone installation activities.
At the outset, it must be recalled that the basic requisite for dismissal on the ground of loss of confidence is
that the employee concerned must be one holding a position of trust and confidence. [7] However, loss of
confidence must not be indiscriminately used as a shield by the employer against a claim that the dismissal of
an employee was arbitrary.[8]
 Likewise, it must be noted that willful defiance of company rules must be characterized by perverse attitude
that would be considered as inimical to the interest of his employer. Even when an employee is found to have
transgressed the employers rules, in the actual imposition of penalties upon the erring employee, due
consideration must still be given to his length of service and the number of violations committed during his
employ.[9]
Dismissal is the ultimate penalty that can be meted to an employee.[10] Where a penalty less punitive would
suffice, whatever missteps may have been committed by the worker ought not to be visited with a consequence
so severe such as dismissal from employment.[11] For, the Constitution guarantees the right of workers to
security of tenure.[12] The misery and pain attendant to the loss of jobs then could be avoided if there be
acceptance of the view that under certain circumstances of the case the workers should not be deprived of their
means of livelihood.[13]
In the present case, there is no dispute that the private respondent ordered the installation of the telephone
units in favor of Marlon Aquino, a telephone subscriber. As found by the Labor Arbiter, private respondents
orders were irregular. The orders of telephone connection were pursued even if there were no entrance cable
facilities for telephone connection. Moreover, Mandaluyong was not within the area of private respondents
jurisdiction. The installers, Mercado and Jocson, were not under his direct supervision. Yet based on his
instruction, he secured OK numbers for the telephones and performed call back at the panel box while
misrepresenting himself to the dispatch clerk as the subscriber.
Despite these circumstances, the NLRC reversed the Labor Arbiters order of dismissal imposed against
private respondent Enrique Gabriel. According to the NLRC, it found no written rule of PLDT which provides
that such unwarranted installation of telephone lines is subject to the penalty of dismissal. Nor was there any
proof that the private respondent profited from the said setting up of telephone lines. Neither was there a
showing that PLDT suffered losses from the telephone service in favor of Mr. Marlon Aquino. Finally, as
claimed by the private respondent in his memorandum, which was not rebutted on this point by the petitioner,
the subject telephones were installed only after the documents of approval were issued by PLDT. Given these
circumstances, a substantial doubt as to the validity of the termination appears, and the employees claim of
illegal dismissal accordingly gains credence because such doubt must be resolved in his favor.
In MERALCO vs. NLRC,[14] a case that also involved a supervisor but involved an illegal installation of
power line, clearly prejudicial to the economic activity of his employer, this Court has held:

There is no question that herein respondent Signo is guilty of breach of trust and violation of
company rules, the penalty for which ranges from reprimand to dismissal depending on the gravity
of the offense. However, as earlier stated, the respondent Commission and the Labor Arbiter found
that dismissal should not be meted to respondent Signo considering his twenty (20) years of service
in the employ of petitioner, without previous derogatory record, in addition to the fact that
petitioner company had awarded him in the past, two (2) commendations for honesty. x x x

xxxxxxxxx

This Court has held time and again, in a number of decisions, that notwithstanding the existence of
a valid cause for dismissal, such as breach of trust by an employee, nevertheless, dismissal should
not be imposed, as it is too severe a penalty if the latter has been employed for a considerable
length of time in the service of his employer (citation omitted).

Further, in carrying out and interpreting the Labor Codes provisions and its implementing
regulations, the workingmans welfare should be the primordial and paramount consideration. This
kind of interpretation gives meaning and substance to the liberal and compassionate spirit of the
law as provided for in Article 4 of the New Labor Code which states that all doubts in the
implementation and interpretation of the provisions of the Labor Code including its implementing
rules and regulations shall be resolved in favor of labor' (citation omitted).

In view of the foregoing, reinstatement of respondent Signo is proper in the instant case, but
without the award of backwages, considering the good faith of the employer in dismissing the
respondent.[15]

In the case at bar, we have to concede that in ordering the reinstatement of private respondent, Gabriel, the
public respondent, NLRC, is not entirely without good and justifiable reason. Thus it could not be said that this
portion of the assailed Resolution of the NLRC is tainted with grave abuse of discretion.
 Now, since Gabriels dismissal has been found to be of doubtful justification in law and policy, the award
by the NLRC of full backwages in his favor could not be said as erroneous. It has to be sustained, but only from
the date of the NLRCs promulgation of its Resolution on June 29, 1992.
Backwages including thirteenth month pay are a form of relief that restores the income that was lost by
reason of unlawful dismissal.[16] Note that in contrast to the MERALCO case, infra, where the award of
backwages was not granted because the employer was in good faith when it dismissed the employee who
received P7,000.00 purportedly in consideration of his facilitation of the electrical connection in favor of an
applicant, in the case at bar the installation of four telephone units was not per se illegal because of the previous
approval by the PLDT of these units for installation. The connections were only irregular because they violated
certain standard operating procedures of PLDT. Private respondent in this case had facilitated the service
connections of the telephone units irregularly but he was apparently of the wrong impression that he was
cultivating a customers goodwill. He did not receive any monetary or other material benefit at all for the
facilitation. Thus, on one hand, the cited irregularity here could not justify the ultimate penalty of dismissal
from employment. And, in our view, reinstatement (with full backwages and thirteenth month pay computed
beginning June 29, 1992 until actual reinstatement) would provide sufficient relief for the loss suffered by him.
On the other hand, the award of unspecified other benefits and proportionate privileges to the private
respondent by the NLRC appears to us already unwarranted. Private respondent is not entirely faultless. As a
supervisor, he is required to act judiciously and to exercise his authority in harmony with company
policies. When he jeopardized the status of the rank-and-file employees whom he ordered to by-pass the
standard operating procedures of the company, to the detriment of his employer, he was not entirely
blameless. The irregularity attributable to him could not be entirely disregarded. He must not be further
rewarded, in fairness to the employers own legitimate concerns such as company morale and discipline.
WHEREFORE, the assailed NLRC Resolution is AFFIRMED with MODIFICATION. Petitioner is
directed to reinstate the private respondent to his position held at the time of the complained
dismissal. Petitioner is likewise ordered to pay private respondent his full backwages including thirteenth month
pay due him based on his last salary, computed from the date of promulgation of the NLRC Resolution on June
29, 1992, until his actual reinstatement.The other awards of unspecified benefits and proportionate privileges in
the said Resolution are set aside for lack of merit.
No pronouncement as to costs.
SO ORDERED.
 FIRST DIVISION
[G.R. No. 133259. February 10, 2000]
WENIFREDO FARROL, petitioner, vs. The HONORABLE COURT OF APPEALS and RADIO COMUNICATIONS of
the PHILIPPINES INC. (RCPI), respondents.
DECISION
YNARES_SANTIAGO, J.:
Petitioner Wenifredo Farrol was employed as station cashier at respondent RCPIs Cotabato City station. On June 18, 1993,
respondent RCPIs district manager in Cotabato City informed their main office that "Peragram funds" [1] from said branch were used
for the payment of retirement benefits of five employees. On October 1, 1993, petitioner verified as correct RCPIs Field Auditors
report that there was a shortage of P50,985.37 in their branchs Peragram, Petty and General Cash Funds. Consequently, petitioner was
required by the Field Auditor to explain the cash shortage within 24 hours from notice. [2] The next day, petitioner paid to RCPI
P25,000.00 of the cash shortage.
On October 16, 1993, RCPI required petitioner to explain why he should not be dismissed from employment. [3] Two days
thereafter, petitioner wrote a letter to the Field Auditor stating that the missing funds were used for the payment of the retirement
benefits earlier referred to by the branch manager and that he had already paid P25,000.00 to RCPI. After making two more payments
of the cash shortage to RCPI, petitioner was informed by the district manager that he is being placed under preventive
suspension.[4] Thereafter, he again paid two more sums on different dates to RCPI leaving a balance of P6,995.37 of the shortage.
Respondent RCPI claims that it sent a letter to petitioner on November 22, 1993 informing him of the termination of his services
as of November 20, 1993 due to the following reasons:
"a) Your allegation that part of your cash shortages was used for payment of salaries/wages and retirement benefits is not true
because these have been accounted previously per auditors report;
"b) As Station Cashier you must be aware of our company Circular No. 63 which strictly requires the daily and up-to-date
preparation of Statistical Report and depositing of cash collections twice a day. But these procedures - more particularly on depositing
of cash collections twice a day - was completely disregarded by you;
"c) Deliberate withholding of collections to hide shortages/malversation or misappropriation in any form, as emphasized under
Section No. 20 of our Rules and Regulations, is penalized by immediate dismissal;
"d) The position of Station Cashier is one which requires utmost trust and confidence.[5]
Unaware of the termination letter, petitioner requested that he be reinstated considering that the period of his preventive
suspension had expired.
Sometime in September 1995, petitioner manifested to RCPI his willingness to settle his case provided he is given his retirement
benefits. However, RCPI informed petitioner that his employment had already been terminated earlier as contained in the letter dated
November 22, 1993. The conflict was submitted to the grievance committee. Despite the lapse of more than two years, the case
remained unresolved before the grievance committee, hence, it was submitted for voluntary arbitration.
After hearing, the Voluntary Arbitrator ruled that petitioner was illegally dismissed from employment and ordered RCPI to pay
him backwages, separation pay, 13th month pay and sick leave benefits.[6] Aggrieved, RCPI filed a petition for certiorari before the
Court of Appeals (CA), which reversed the ruling of the arbitrator and dismissed the complaint for illegal dismissal. [7] Upon denial of
petitioners motion for reconsideration by the CA,[8] he filed the instant petition for review on certiorari on the grounds that his
dismissal was illegal because he was not afforded due process and that he "cannot be held liable for the loss of trust and confidence
reposed in him" by RCPI.[9]
The Court is called upon to resolve the validity of petitioners dismissal. In cases involving the illegal termination of employment,
it is fundamental that the employer must observe the mandate of the Labor Code, i.e., the employer has the burden of proving that the
dismissal is for a cause provided by the law[10]and that it afforded the employee an opportunity to be heard and to defend himself. [11]
Anent the procedural requirement, Book V, Rule XIV, of the Omnibus Rules Implementing the Labor Codeexisting at the time
petitioner was discharged from work, outlines the procedure for termination of employment, to wit:
"Sec. 1. Security of tenure and due process. - No worker shall be dismissed except for a just or authorized cause provided by law
and after due process.
"Sec. 2. Notice of Dismissal. - Any employer who seeks to dismiss a worker shall furnish him a written notice stating the
particular acts or omissions constituting the grounds for his dismissal. In cases of abandonment of work, the notice shall be served at
the workers last known address.
xxxxxxxxx
"Sec. 5. Answer and hearing. - The worker may answer the allegations stated against him in the notice of dismissal within a
reasonable period from receipt of such notice. The employer shall afford the worker ample opportunity to be heard and to defend
himself with the assistance of his representatives, if he so desires.
"Sec. 6. Decision to dismiss. - The employer shall immediately notify a worker in writing of a decision to dismiss him stating
clearly the reasons therefor.
"Sec. 7. Right to contest dismissal. - Any decision taken by the employer shall be without prejudice to the right of the worker to
contest the validity or legality of his dismissal by filing a complaint with the Regional Branch of the Commission.
xxxxxxxxx
"Sec. 11. Report on dismissal. - The employer shall submit a monthly report to the Regional Office having jurisdiction over the
place of work all dismissals effected by him during the month, specifying therein the names of the dismissed workers, the reasons for
their dismissal, the dates of commencement and termination of employment, the positions last held by them and such other
information as may be required by the Ministry (Department) for policy guidance and statistical purposes." (Underscoring supplied).
As set forth in the foregoing procedures, the employer must comply with the twin requirements of two notices and
hearing.[12] The first notice is that which apprises the employee of the particular acts or omissions for which his dismissal is sought,
and after affording the employee an opportunity to be heard, a subsequent notice informing the latter of the employers decision to
dismiss him from work.[13]
As regards the first notice, RCPI simply required petitioner to "explain in writing why he failed to account" for the shortage and
demanded that he restitute the same.[14] On the assumption that the foregoing statement satisfies the first notice, the second notice sent
by RCPI to petitioner does not "clearly" cite the reasons for the dismissal, contrary to the requirements set by the above-quoted
Section 6 of Book V, Rule XIV of the Omnibus Rules.
A perusal of RCPIs dismissal notice reveals that it merely stated a conclusion to the effect that the withholding was deliberately
done to hide alleged malversation or misappropriation without, however, stating the facts and circumstances in support thereof. It
further mentioned that the position of cashier requires utmost trust and confidence but failed to allege the breach of trust on the part of
petitioner and how the alleged breach was committed. On the assumption that there was indeed a breach, there is no evidence that
petitioner was a managerial employee of respondent RCPI. It should be noted that the term "trust and confidence" is restricted to
managerial employees.[15] It may not even be presumed that when there is a shortage, there is also a corresponding breach of trust.
Cash shortages in a cashiers work may happen, and when there is no proof that the same was deliberately done for a fraudulent or
wrongful purpose, it cannot constitute breach of trust so as to render the dismissal from work invalid.
Assuming further that there was breach of trust and confidence, it appears that this is the first infraction committed by petitioner.
Although the employer has the prerogative to discipline or dismiss its employee, such prerogative cannot be exercised wantonly, but
must be controlled by substantive due process and tempered by the fundamental policy of protection to labor enshrined in the
Constitution.[16] Infractions committed by an employee should merit only the corresponding sanction demanded by the circumstances.
The penalty must be commensurate with the act, conduct or omission imputed to the employee [17] and imposed in connection with the
employers disciplinary authority.
RCPI alleged that under its rules, petitioners infraction is punishable by dismissal. However, employers rules cannot preclude the
State from inquiring whether the strict and rigid application or interpretation thereof would be harsh to the employee. Petitioner has no
previous record in his twenty-four long years of service - this would have been his first offense. The Court thus holds that the
dismissal imposed on petitioner is unduly harsh and grossly disproportionate to the infraction which led to the termination of his
services. A lighter penalty would have been more just, if not humane. In any case, petitioner paid back the cash shortage in his
accounts. Considering, however, that the latter is about to retire or may have retired from work, it would no longer be practical to
order his reinstatement.
Accordingly, in lieu of reinstatement, the award of separation pay computed at one-month salary for every year of service, with a
fraction of at least six (6) months considered as one whole year, is proper. [18] In the computation of separation pay, the period wherein
backwages are awarded must be included.[19]
WHEREFORE, in view of the foregoing, the assailed decision of the Court of Appeals is REVERSED and SET ASIDE and new
one entered REINSTATING the decision of the Voluntary Arbitrator subject to the MODIFICATION that petitioners separation pay
be recomputed to include the period within which backwages are due. For this purpose, this case is REMANDED to the Voluntary
Arbitrator for proper computation of backwages, separation pay, 13th month pay, sick leave conversion and vacation leave
conversion.
SO ORDERED.
 FIRST DIVISION

[G.R. No. 146621. July 30, 2004]

RENE P. VALIAO, petitioner, vs. HON. COURT OF APPEALS, NATIONAL LABOR RELATIONS COMMISSION-
FOURTH DIVISION (Cebu City), WEST NEGROS COLLEGE, respondents.

DECISION

QUISUMBING, J.:

For review on certiorari is the Decision[1] dated August 22, 2000 of the Court of Appeals in CA-G.R. SP No. 55133, and
its Resolution[2] dated November 22, 2000 denying the motion for reconsideration. The Court of Appeals dismissed the petition for
certiorari filed by petitioner and affirmed the Resolution dated July 7, 1999 of the National Labor Relations Commission (NLRC)-
Fourth Division in NLRC Case No. V-000134-98 (RAB Case No. 06-01-10026-95), which sustained the Decision of Labor Arbiter
Benjamin E. Pelaez, directing private respondent West Negros College (WNC) to pay petitioner Rene P. Valiaos salary during the
period of his preventive suspension and attorneys fees, while dismissing all other claims.

The facts, as culled from records, are as follows:

On February 5, 1990, petitioner Rene Valiao was appointed by private respondent West Negros College (WNC) as Student Affairs
Office (SAO) Director, with a starting salary of P2,800 per month. On May 14, 1990, he was assigned as Acting Director, Alumni
Affairs Office.

On July 29, 1990, petitioner was transferred to a staff position and designated as Records Chief at the Registrars Office but was again
re-assigned as a typist on June 24, 1991.

The latest re-assignment was due to his tardiness and absences, as reflected in the summary of tardiness and absences report, which
showed him to have been absent or late for work from a minimum of seven (7) to a maximum of seventy-five (75) minutes for the
period March to October 31, 1991, and to have reported late almost every day for the period November to December 1991.

Copies of his tardiness/absences reports were furnished petitioner, along with memoranda requiring him to explain but his
explanations were either unacceptable or unsatisfactory. Subsequent reports also showed that he did not change his habits resulting in
tardiness and absences. He was even caught one time manipulating the bundy clock, thus necessitating another memorandum to him
asking him to explain his dishonest actuations in accomplishing the daily attendance logbook and in using the bundy clock.

On December 10, 1991, petitioner received a suspension order without pay for fifteen (15) days effective January 1, 1992, because of
dishonesty in reporting his actual attendance. After serving the suspension, the petitioner reported back to office on January 16, 1992.

On June 15, 1992, another adverse report on tardiness and absences from the Registrar was made against the petitioner prompting
WNC to send him another memorandum with an attached tardiness and absences report, calling his attention on his tardiness and
absences for the period February to April 1992.

On June 20, 1992, petitioner sent a letter of appeal and explained his side to the new college president, Suzette Arbolario-Agustin,
who gave petitioner another chance. The petitioner was then appointed as Information Assistant effective immediately. However, the
petitioner did not immediately assume the post of Information Assistant prompting the President of private respondent WNC to call
his attention. When the petitioner finally assumed his post, he was allowed a part-time teaching job in the same school to augment his
income.

Sometime in December 1992, WNC won a case against the officials of the union before the NLRC.Petitioner was ordered to prepare a
media blitz of this victory but the petitioner did not comply with the order on the ground that such a press release would only worsen
the already aggravated situation and strained relations between WNC management and the union officials.

When petitioner reported for work on the first day of January 1993, he was relieved from his post and transferred to the College of
Liberal Arts as Records Evaluator. Not for long, the Dean of the Liberal Arts sent a letter to the Human Resources Manager
complaining about the petitioners poor performance and habitual absenteeism, as shown in the daily absence reports.

On January 18, 1993, petitioner was again absent from work without permission or notice to his immediate superior. It turned out that
he went to Bacolod City and on January 28, 1993, the petitioner was one of those arrested during a raid in the house of one Toto Ruiz,
a suspected drug pusher and was brought to the Bacolod Police Station along with four (4) other suspects. Upon further search and
investigation by the Narcotics Control Division, the petitioner was found possessing two (2) suspected marijuana roaches (butts)
which were placed inside his left shoe. The event was widely publicized, focusing on petitioners position as an Economics teacher of
WNC, and considering further that one of his fellow suspects was a member of the Philippine Army, who was caught with an
unlicensed firearm, a tooter and other shabu paraphernalia. The petitioner and other suspects were then charged with violation of the
Dangerous Drugs Act of 1972 (Republic Act No. 6425, as amended).

Petitioner was asked to explain within 24 hours why he should not be terminated as a result of the raid and the charges against him for
violation of Rep. Act No. 6425 as amended. Petitioner allegedly was not able to answer immediately since he was in jail and received
said memorandum only on January 30, 1993, although his wife had earlier received the memorandum on January 28, 1993.

On January 29, 1993, the petitioner was dismissed for failure to answer said memorandum.
On February 1, 1993, the petitioner wrote to the President of WNC explaining his side and asking for due process. WNC cancelled its
Notice of Termination dated January 29, 1993, and granted the petitioners request. The petitioner was notified through a memorandum
about the grant of his request and that a hearing would be conducted. He was then placed under preventive suspension and an
investigation committee was organized to conduct the probe. On March 6, 1993, a notice of hearing/investigation was sent to the
petitioner.

After the investigation attended by the petitioner and his counsel, with proceedings duly recorded, the investigation committee
recommended the dismissal of petitioner. A notice of termination was then sent to petitioner informing him of his termination from the
service for serious misconduct and gross and habitual neglect of duty. The petitioner received the notice on March 25, 1993, but did
not file a grievance concerning the notice of termination.

On January 19, 1995, petitioner filed a Complaint against WNC for illegal suspension, illegal dismissal, backwages, salary differential
for salary increases and other benefits granted after his dismissal as well as for moral and exemplary damages and attorneys fees.

In its Answer, WNC alleged that petitioner was dismissed on charges of serious misconduct, and gross and willful neglect of
duty. WNC said his dismissal was effected after due notice and prior hearing. It claimed also that since petitioner was terminated for a
valid cause after a due hearing, the latters claim for moral and exemplary damages, and attorneys fees had no basis in fact and in law.

After due proceedings, the Labor Arbiter rendered a decision, the decretal portion of which reads as follows:

WHEREFORE, premises considered, judgment is hereby rendered DIRECTING respondent West Negros College to pay
complainant Rene P. Valiao (a) P3,300.00 as salary for the period of his preventive suspension, and (b) P330.00 as attorneys fees, or
the total amount of THREE THOUSAND SIX HUNDRED THIRTY PESOS (P3,630.00).
Further, all other claims are DISMISSED for lack of merit.
SO ORDERED.[3]

The Labor Arbiter found no justifiable reason to place the petitioner under preventive suspension as there was no serious or imminent
threat to the life or property of his employer or co-workers.

However, the Labor Arbiter found the dismissal of the petitioner from WNC to be valid due to absenteeism and tardiness and after he
was accorded the procedural due process aspect of the law as reflected in the records showing that the petitioner was formally
investigated and given the opportunity to refute the alleged findings by the management of WNC. The Labor Arbiter held that
frequent absenteeism and tardiness of the petitioner constituted not only willful disobedience but also gross and habitual neglect of
duties, which are valid grounds for termination of employment. He stressed that the petitioners frequent absences without proper leave
of absence was not only unfair to WNC and the petitioners co-employees but also set an undesirable example to the employees under
his supervision, considering that the petitioner was not a mere rank-and-file employee but one who owed more than the usual fealty to
the organization.

On appeal to the NLRC, the latter affirmed the decision of the Labor Arbiter, sustained the latters findings of facts, and made its own
findings on the apprehension of the petitioner for possession of prohibited drugs. The decretal portion of the decision reads as follows:

WHEREFORE, premises considered, the appeal is DISMISSED and the decision of the Executive Labor Arbiter is AFFIRMED
in its entirety.
SO ORDERED.[4]

Petitioner then filed a Petition for Certiorari under Rule 65 before the Court of Appeals but this was dismissed for lack of merit. The
decretal portion of the decision reads as follows:

WHEREFORE, the questioned Decision and Resolution dated December 11, 1998 and July 7, 1999, respectively, of public
respondent National Labor Relations Commission are hereby AFFIRMED.
SO ORDERED.[5]

The Court of Appeals held that the petitioner was validly dismissed for serious misconduct and gross habitual neglect of duties, which
was aggravated by his arrest for violation of Rep. Act No. 6425, as amended [the January 28, 1993 incident] and that he was afforded
the twin requirements of notice and hearing and the opportunity to defend himself by the investigating committee. The appellate court
noted that WNC had presented sufficient evidence to support petitioners termination from employment after taking into consideration
the totality of the infractions or the number of violations committed by petitioner during the period of employment and stressed that it
properly exercised its management prerogative by observing due process. Finally, the Court of Appeals ruled that the NLRC correctly
denied the claim for damages and attorneys fees for lack of evidentiary support.

Petitioner duly filed a Motion of Reconsideration, which was denied by the Court of Appeals.

Hence, this petition alleging that:

A. THE HONORABLE PUBLIC RESPONDENT COURT OF APPEALS ERRED IN HOLDING THAT THE DISMISSAL OF
PETITIONER WAS VALID, DESPITE THE FACT THAT THERE IS CLEAR AND BLATANT VIOLATION OF THE BASIC
CONSTITUTIONAL RIGHTS OF THE HEREIN PETITIONER BOTH SUBSTANTIVE AND PROCEDURAL DUE PROCESS.
 B. THE HONORABLE PUBLIC RESPONDENT COURT OF APPEALS IN (SIC) DISMISSING THE RELIEFS FOR
MORAL AND EXEMPLARY DAMAGES AND ATTORNEYS FEES.[6]

In our view, the only relevant issue for our resolution is whether or not the petitioner was validly dismissed from employment on the
ground of serious misconduct and gross habitual neglect of duties, including habitual tardiness and absenteeism.

Petitioner claims that his outright dismissal from employment was not valid and too harsh and that he was not dismissed from
employment because of tardiness or absences but because he was among those apprehended in a raid. Also, he was not accorded due
process because although his wife received the show cause notice, he did not have the proper mind to reply as he was in jail and was
psychologically disturbed.

Considering the submissions of the parties as well as the records before us, we find the petition without merit. Petitioners dismissal
from employment is valid and justified.

For an employees dismissal to be valid, (a) the dismissal must be for a valid cause and (b) the employee must be afforded due
process.[7]

Serious misconduct and habitual neglect of duties are among the just causes for terminating an employee under the Labor Code of the
Philippines. Gross negligence connotes want of care in the performance of ones duties. Habitual neglect implies repeated failure to
perform ones duties for a period of time, depending upon the circumstances. [8] The Labor Arbiters findings that petitioners habitual
absenteeism and tardiness constitute gross and habitual neglect of duties that justified his termination of employment are sufficiently
supported by evidence on record. Petitioners repeated acts of absences without leave and his frequent tardiness reflect his indifferent
attitude to and lack of motivation in his work.More importantly, his repeated and habitual infractions, committed despite several
warnings, constitute gross misconduct unexpected from an employee of petitioners stature. This Court has held that habitual
absenteeism without leave constitute gross negligence and is sufficient to justify termination of an employee. [9]

However, petitioner claims that he was dismissed not for his tardiness or absences but for his arrest as a suspected drug user. His
claim, however, is merely speculative. We find such contention devoid of basis.First, the decisions of the Labor Arbiter, the NLRC,
and the Court of Appeals are indubitable. They show that indeed petitioner had incurred numerous and repeated absences without any
leave. Moreover, he was not punctual in reporting for work. These unexplained absences and tardiness were reflected on the summary
reports submitted by WNC before the labor arbiter, but petitioner failed to controvert said reports.Second, contrary to petitioners
assertion, the NLRC did not base its conclusions on the fact of the arrest of petitioner for violation of Rep. Act No. 6425 but on the
totality of the number of infractions incurred by the petitioner during the period of his employment in different positions he occupied
at WNC. Thus:

In the case of petitioner Valiao, his services were terminated by private respondent after having been found guilty of serious
misconduct and gross habitual neglect of duty which was aggravated by the January 28, 1993 incident. In exercising such
management prerogative, due process was properly observed. Private respondent presented sufficient evidence to support its act in
terminating the services of petitioner. Private respondent took into consideration the totality of the infractions or the number of
violations committed by petitioner during the period of employment.Furthermore, it hardly needs reminding that, in view of
petitioners position and responsibilities, he must demonstrate a scrupulous regard for rules and policies befitting those who would be
role models for their young charges.[10](Emphasis and italics supplied)

Indeed, even without the arrest incident, WNC had more than enough basis for terminating petitioner from employment. It bears
stressing that petitioners absences and tardiness were not isolated incidents but manifested a pattern of habituality. In one case, we
held that where the records clearly show that the employee has not only been charged with the offense of highgrading but also has
been warned 21 times for absences without official leave, these repeated acts of misconduct and willful breach of trust by an employee
justify his dismissal and forfeiture of his right to security of tenure. [11] The totality of infractions or the number of violations
committed during the period of employment shall be considered in determining the penalty to be imposed upon an erring
employee. The offenses committed by him should not be taken singly and separately but in their totality. Fitness for continued
employment cannot be compartmentalized into tight little cubicles of aspects of character, conduct, and ability separate and
independent of each other.[12]

Needless to say, so irresponsible an employee like petitioner does not deserve a place in the workplace, and it is within the
managements prerogative of WNC to terminate his employment. Even as the law is solicitous of the welfare of employees, it must
also protect the rights of an employer to exercise what are clearly management prerogatives. As long as the companys exercise of
those rights and prerogative is in good faith to advance its interest and not for the purpose of defeating or circumventing the rights of
employees under the laws or valid agreements, such exercise will be upheld. [13]

Still, petitioner claims that he was not afforded due process so that his dismissal from employment should be declared invalid. This
contention deserves scant consideration. The Court of Appeals held that the records reveal that petitioner was afforded the twin
requirements of notice and hearing and was likewise given the opportunity to defend himself before the investigating committee. We
find no reason to set aside these factual findings of the Court of Appeals as they are supported by evidence on record.Besides, we may
not review the appellate courts findings of fact in an appeal via certiorari,[14] since as a rule, the Supreme Courts review is limited to
errors of law allegedly committed by the appellate court. [15]Judicial review of labor cases does not go as far as to evaluate the
sufficiency of evidence upon which the Labor Arbiter and National Labor Relations Commission based their determinations. [16]

In this case, petitioner was asked to explain his several absences and tardiness on many occasions. A notice to explain was sent to him
regarding the arrest incident wherein he was able to reply. An investigation committee was formed by WNC to investigate the arrest
incident and the absences and tardiness of petitioner.It must be emphasized that proceedings of the committee were duly recorded, and
petitioner actively participated therein by answering the various questions interposed by the panel members. Finally, a notice of his
termination was sent to petitioner, although he claims to have received it late as he was in jail. It is an undeniable fact, however, that
his wife had actually received the notice in his house earlier, even before petitioners termination and this matter was later
communicated to him.

At any rate, petitioner was given enough opportunity to be heard, and his dismissal was based on valid grounds. The essence of due
process is simply an opportunity to be heard, or as applied to administrative proceedings, an opportunity to explain ones side or an
opportunity to seek a reconsideration of the action or ruling complained of. A formal or trial-type hearing is not at all times and in all
instances essential, as the due process requirements are satisfied where the parties are afforded fair and reasonable opportunity to
explain their side of the controversy at hand. What is frowned upon is the absolute lack of notice and hearing. [17]

Finally, the Labor Arbiter found that petitioner is entitled to salary differentials for the period of his preventive suspension, as there is
no sufficient basis shown to justify his preventive suspension. During the pendency of the investigation, the employer may place the
worker concerned under preventive suspension if his continued employment poses a serious and imminent threat to life or property of
the employer or of his co-workers.[18] But in this case, there is no indication that petitioner posed a serious threat to the life and
property of the employer or his co-employees. Neither was it shown that he was in such a position to unduly influence the outcome of
the investigation. Hence, his preventive suspension could not be justified, and the payment of his salary differentials is in order.

However, the award of attorneys fees to him cannot be sustained, in view of our findings that petitioner was validly dismissed from
employment. Said award lacks legal basis and could not be granted properly in this case.

WHEREFORE, the assailed Decision dated August 22, 2000 and Resolution dated November 22, 2000 of the Court of Appeals in
CA-G.R. SP No. 55133 are AFFIRMED with MODIFICATION in that the award of attorneys fees is deleted. No pronouncement as to
costs.

SO ORDERED.
 SECOND DIVISION

[G.R. No. 148410. January 17, 2005]

VICENTE C. ETCUBAN, JR., petitioner, vs. SULPICIO LINES, INC., respondent.

DECISION
CALLEJO, SR., J.:

The stakes are high in a position imbued with trust, and for petitioner Vicente C.
Etcuban, Jr., the loss of trust in him by his employer cost him his job after 16 years of
service. He cries that the penalty was too harsh for an unproved and petty infraction. Upon
the other hand, his employer avers that it acted well within its rights in terminating the
petitioners services after the investigation revealed that the latter failed to live up to the
trust and confidence expected of him as Chief Purser. The Labor Arbiter and the National
Labor Relations Commission (NLRC) agreed with the petitioner, while the Court of
Appeals ruled for the employer.

The Antecedents

Respondent Sulpicio Lines, Inc. is a domestic corporation engaged in the business

domestic shipping. Among its fleet of inter-island vessels was the M/V Surigao Princess,
plying the CebuCagayan de OroJagnaBohol route.[1]
The petitioner was employed by the respondent on January 30, 1978 until his
dismissal on June 10, 1994 for loss of trust and confidence.[2] At the time of his dismissal,
the petitioner was the Chief Purser of the M/V Surigao Princess receiving a monthly salary
of P5,000.00.[3] As the Chief Purser, the petitioner handled the funds of the vessel and
was the custodian of all the passage tickets and bills of lading.[4] It was his responsibility,
among other things, to issue passage tickets and to receive payments from the customers
of the respondent, as well as to issue the corresponding official receipts therefor.[5] He was
also tasked to disburse the salaries of the crewmen of the vessel.[6]
Sometime in the last week of May 1994, the newly designated jefe de viaje[7] of the
M/V Surigao Princess, in a surprise examination, discovered that several yellow
passengers duplicate original[8] of yet to be sold or unissued passage tickets already
contained the amount of P88.00 the fare for adult passengers for the Cagayan de Oro to
Jagna, Bohol route. 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. Acting on what appeared to be a strong evidence of short-changing the
company, the jefe de viaje dug deeper on what he uncovered. As expected, he found
inordinate amount of ticket issuances for children at half the fare of P44.00 in Voyage 434
of the vessel.[9] When word of the anomaly reached the respondent, it waited for the
petitioner to return to Cebu City in the hope of shedding more light on the matter.
On May 30, 1994, shortly after disembarking from the M/V Surigao Princess at the port
of Cebu, the petitioner received a memorandum of even date from Personnel Officer
Artemio F. Aiga relative to the irregularity in the alleged involvement in anomaly of ticket
issuance, instructing him to forthwith report to the main office and to explain in writing why
no disciplinary action should be meted on him or to submit himself to an investigation. The
memorandum warned the petitioner that his failure to comply with the aforementioned
instructions would be construed as a waiver of his right to be heard. It also informed the
petitioner of his immediate preventive suspension until further notice.[10] The petitioner,
however, refused to acknowledge receipt of the memorandum which was personally
served on him,[11] prompting the respondent to mail the same, and which the petitioner
received days later.[12]
Meanwhile, upon his arrival at the office, the petitioner was questioned by Mr. Carlo S.
Go, Senior Executive Vice-President and General Manager of respondent. Thereafter,
petitioner was preliminarily investigated by Mr. Aiga wherein his statements were taken
down.[13] After the initial investigation, the petitioner was told to sign its minutes but he
adamantly refused, claiming the same to be self-incriminatory.[14] The next day, the
petitioner was replaced by Mr. Felix Almonicar as the Chief Purser of the M/V Surigao
Princess.[15] As a result of his replacement, the petitioner thought he was fired from his job.
Barely a week after the petitioners preventive suspension and pending his
administrative investigation, he filed a complaint against the respondent for illegal
dismissal, non-payment of overtime pay, 13th month pay and other monetary benefits with
the NLRC, Regional Arbitration Branch No. VII, Cebu City. The case was docketed as
NLRC No. RAB-VII-06-0607-84. The petitioner alleged that the ground for his
dismissal, i.e., loss of trust and confidence, was ill-motivated and without factual basis. He
did not deny that the anomalous tickets were in his possession, but denied that he was
guilty of any wrongdoing. He dismissed the handwriting on the tickets as his, and claimed
that he was singled out for the dismissal. He averred that the trumped-up charge was a
clever scheme resorted to by his employer so it could avoid paying him monetary benefits,
considering that he was with the company for more than sixteen (16) years. He argued
that assuming that it was he who wrote those entries in the tickets, the fact remains that
they were still unissued; hence, no money went to his pocket and no material prejudice
was caused to the respondent. According to the petitioner, he would not jeopardize his
livelihood for something as miniscule as P88.00. He prayed not for reinstatement but for
separation pay, monetary benefits plus damages.[16]
On June 9, 1994, the respondent received its summons.[17] Short of pre-empting its
administrative investigation, coupled with the petitioners obstinate refusal to submit to
further investigation, the respondent decided to terminate the petitioners employment for
loss of trust and confidence in connection with passage tickets nos. 636742-636748.[18] A
copy of the notice of termination[19] dated June 10, 1994 was sent by mail to the petitioner.
After hearing on the merits, Labor Arbiter Ernesto F. Carreon rendered his Decision
dated March 13, 1995, finding the petitioners dismissal illegal. He ruled that the
respondent failed to substantiate and prove that the petitioner committed any wrongdoing.
He found the evidence of impression on the tickets inadequate, considering that the
petitioner was not the only person in the vessel handling or issuing the passage tickets.
According to the Labor Arbiter, the anomalous entries on the unissued tickets could not be
attributed entirely to the petitioner; thus, there was no reason for the respondent to lose its
trust and confidence on the petitioner.[20] The dispositive portion of the decision reads:

WHEREFORE, premises considered, judgment is hereby rendered ordering respondent Sulpicio

Lines, Inc., to pay the complainant Vicente C. Etcuban, Jr. the following :

1. Separation pay -------------------------------- P80,480.00

2. Backwages ------------------------------------ 40,703.23
3. Proportionate 13th Month Pay ------------- 2,235.50
P123,418.73
vvvvvvvvvvvv

The other claims are dismissed for lack of merit.

SO ORDERED.[21]

Both parties appealed to the NLRC, 4th Division, Cebu City. In its appeal, the
respondent insisted that the dismissal was justified.[22] The petitioner, on the other hand,
questioned the computation of his backwages, besides reiterating his claim for moral
damages.[23]
On February 21, 1996, a Decision[24] was rendered by the NLRC affirming the
challenged decision with the modification that the backwages to be paid to the petitioner
shall be reckoned from the time of his actual dismissal on June 10, 1994, up to the
issuance of the writ of execution on the finality of the decision, but not to exceed five (5)
years. In fixing the additional backwages, the NLRC concluded that the respondent has
the open recourse to the Supreme Court which could prolong his (petitioners) agony. The
decretal part of the decision reads:

WHEREFORE, premises considered, the assailed decision is MODIFIED with respect to the
monetary awards. The award of backwages shall be computed from the date of the actual dismissal
or 10 June 1994 up to the issuance of the Writ of Execution on the finality of the decision in this
case but not to exceed five (5) years. The backwages shall include the corresponding 13 th month
pay and leave (sick and vacation) benefits for the whole period covered.

SO ORDERED.[25]

In affirming the decision of the Labor Arbiter, the NLRC ruled as follows

We do not find the allegedly highly irregular condition of the tickets valid reason to even suspend,
much less terminate the complainant-appellant for loss of trust and confidence. It has not been
established by clear and competent evidence that the alleged irregular condition of the tickets
was attributable to the complainant or to other members of the team of inspectors who have
equal access to the tickets. This is vital in view of the complainants denial to have committed the
same. Moreover, there is no showing at all on record that the respondent suffered damage as
a consequence of the existence of these tickets with entry of the rate or cost of transportation
from Cagayan de Oro City to Jagna, Bohol, or that the complainant has benefited from the same.
To establish loss of confidence, the employer must have reasonable ground to believe that the
employee is responsible for the misconduct and his participation therein renders him unworthy of
the trust and confidence demanded of his position, and makes him absolutely unfit to continue with
his employment.

With more reason, we do not find valid loss of confidence to warrant dismissal the alleged stabbing
the back by the complainant-appellant of the respondent-appellant by the mere filing of the case.
This act of the complainant-appellant is not a misconduct. It is a valid recourse to the
instrumentality of the government that can give him ample protection and labor justice especially
when he felt that his 16 years of service is being threatened.[26]

The respondent filed a motion for reconsideration[27] which was denied by the NLRC in
a Resolution[28] promulgated on April 15, 1996. It stressed its finding that the petitioners
alleged breach of trust was not sufficiently established by the evidence on record. It further
ruled that the petitioners indefinite suspension from work amounted to his constructive
dismissal.[29]
On June 14, 1996, the respondent filed a petition for certiorari[30] with this Court,
ascribing to the NLRC, among others, grave abuse of discretion when it ruled that the
preventive suspension of the petitioner was tantamount to constructive dismissal.
Following the pronouncement in St. Martin Funeral Home v. NLRC,[31] the petition was
referred to the Court of Appeals for its appropriate action and disposition.[32]
On December 28, 2000, the Court of Appeals reversed and set aside the NLRC
decision.[33] It ruled that there was valid and just cause for the petitioners dismissal, as
there was sufficient basis for loss of trust and confidence on him. The appellate court
amplified that in cases of dismissal for loss of trust and confidence, it is not required that
there is proof beyond reasonable doubt. It ratiocinated, thus:
The office of a purser involves a high degree of trust and confidence. Private respondent had access
to company funds as it was his sensitive duty to issue tickets and accept payments from the
passengers of the vessel. When the passenger copies of unissued tickets in his custody were written
with the amount of P88.00 while the other copies were clean, this already constituted culpable
tampering of the tickets. This Court is fully aware of the standard operating procedure that tickets
should be accomplished only at the time of their issuance and that the duplicate or triplicate copies
should contain exact carbon impressions of the entries in the original copies. It was then highly
anomalous that the original copies of the tickets were already written with the amount of P88.00
when they were still unissued. More so, because the amount of P88.00 were not duplicated in the
other copies of the tickets. There was a clear case of tampering of the unissued tickets in private
respondents possession. This clearly was intended to facilitate the anomaly of entering in the
duplicate copies an amount different if not lower than what is stated in the original copy and
remitting to the petitioner the lower amount.

Complainant was the custodian of the tickets with the authority to issue the same. The tampered
tickets were in his possession. As such, it was therefore reasonable and logical for petitioner to
conclude if not certain a well-grounded moral conviction that private respondent Etcuban
committed the tampering. Even if it is allowed that another person committed the tampering,
private respondent was still culpable as the tampered tickets were found in his possession and the
same could not have been done without his conformity or negligence. His possession of the tickets
with unexplained written entries in the passenger copies of the unissued tickets was by itself
sufficient basis enough to prove respondents culpability. He was the custodian of the tickets and he
should be culpable for any violation of the integrity of the tickets. On this score, this Court agrees
with petitioner that the anomalous entries in the tickets in his custody was sufficient basis for
petitioner to lose trust and confidence on private respondent.

In cases of dismissal for loss of trust and confidence, it is not required that there is proof beyond
reasonable doubt. It is sufficient that there is sufficient basis for loss of trust and confidence.[34]

In the instant case, this Court holds that there was sufficient basis for petitioner to lose trust and
confidence in private respondent so as to justify his termination. It may be pertinent to note that
private respondents overall conduct is inconsistent with innocence. Private respondent did not wait
for the result of petitioners investigation and filed a complaint for illegal dismissal despite private
respondents admission that he was merely placed under preventive suspension. Preventive
suspension is allowed under Section 3, Rule XIV of the Implementing Rules of the Labor Code.
While it is true that no penalty should be attached to an employees recourse to the NLRC, his
immediate filing of the case in the light of the discovery of the anomalous tickets only betrays his
culpability.

It bears emphasis that private respondents position as purser was highly sensitive. As such, he must
demonstrate utmost honesty and fidelity to the trust reposed in him. On its part, petitioner was well
within its prerogative to require from its purser a high degree of uprightness and probity. Their
integrity was impaired by the tampered tickets in his possession. There was sufficient basis for
petitioner to lose trust and confidence in private respondent. Having lost its trust and confidence,
petitioner cannot be expected to allow private respondent to handle the funds of the corporation. It
would be highly unfair to require petitioner to continue employing private respondent in such
sensitive post in the absence of full trust and confidence.

The requirement of due process has been fully satisfied in the instant case. Private respondent was
served notice for investigation as he himself admitted that he submitted himself to an investigation
on May 30, 1994 though he did not signed (sic) the statement as it was self-incriminatory. It is true
that when he filed the case, private respondent has not been served notice of termination precisely
because he took it upon himself to consider that he was terminated without waiting for the result of
the investigation. At any rate, after petitioner received the summons of the instant case, it
subsequently served upon private respondent a notice of termination.[35]
 The petitioners motion for reconsideration[36] was denied by the Court of Appeals for
lack of merit in its Resolution[37] dated May 31, 2001.
Aggrieved at the unfortunate turn of events, the petitioner took the present recourse,
and now asks the Court to reinstate and uphold the NLRC decision. The petitioner
anchors his petition for review on the following grounds:

PUBLIC RESPONDENT ACTED IN VIOLATION OF EXISTING LAWS WHEN IT ORDERED

THE DISMISSAL OF THE PETITIONER DESPITE HIS LONG YEARS IN THE COMPANY
AND THE MINIMAL AMOUNT INVOLVED IN THE CASE.

II

PUBLIC RESPONDENT ACTED IN VIOLATION OF EXISTING LAWS AND

JURISPRUDENCE IN ORDERING THE DISMISSAL OF PETITIONER DESPITE THE FACT
THAT NO LOSS OR PREJUDICE WAS SUFFERED BY THE COMPANY FROM HIS
SUPPOSED INFRACTION.

III

PUBLIC RESPONDENT COMMITTED A SERIOUS LEGAL ERROR IN ORDERING THE

DISMISSAL OF THE PETITIONER DESPITE THE FACT THAT OTHER EMPLOYEES
COULD HAVE FILLED-UP THE TICKETS IN QUESTION.

IV

PUBLIC RESPONDENT LEGALLY ERRED IN DELETING THE AWARD OF 13TH MONTH

PAY PREVIOUSLY GRANTED TO PETITIONER.[38]

The petition is bereft of merit.

The petitioner insists that his dismissal was without factual and legal basis. Echoing
the findings of the Labor Arbiter and the NLRC, he maintains that the handwriting on the
irregular tickets was not proven to be his. He argues that the reluctance of the respondent
to take on his challenge to subject the same tickets to a handwriting expert proved his
inculpability.[39] Moreover, he points out that the very testimony of the respondents
Personnel Officer, Mr. Aiga, to the effect that the latter had no idea whose handwriting it
was on the questioned tickets, helped clear his innocence.[40]
Upon the other hand, the respondent counters that there was sufficient basis for its
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. The
respondent avers that 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.[41]
We agree with the respondent.
Law[42] and jurisprudence have long recognized the right of employers to dismiss
employees by reason of loss of trust and confidence.[43] More so, in the case of
supervisors or personnel occupying positions of responsibility, loss of trust justifies
termination.[44] Loss of confidence as a just cause for termination of employment is
premised from the fact that an employee concerned holds a position of trust and
confidence. This situation holds where a person is entrusted with confidence on delicate
matters, such as the custody, handling, or care and protection of the employers property.
But, in order to constitute a just cause for dismissal, the act complained of must be work-
related such as would show the employee concerned to be unfit to continue working for
the employer.[45]
 The degree of proof required in labor cases is not as stringent as in other types of
cases.[46] It must be noted, however, that recent decisions of this Court have distinguished
the treatment of managerial employees from that of rank-and-file personnel, insofar as the
application of the doctrine of loss of trust and confidence is concerned. Thus, 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.[47]
In the present case, the petitioner is not an ordinary rank-and-file employee. The
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. One of the many duties of the petitioner included the preparation and filling up
passage tickets, and indicating the amounts therein before being given to the passengers.
More importantly, he handled the personnel funds of the MV Surigao Princess. Clearly,
the petitioners position involves a high degree of responsibility requiring trust and
confidence. The position carried with it the duty to observe proper company procedures in
the fulfillment of his job, as it relates closely to the financial interests of the company.
The requirement that there be some basis or reasonable ground to believe that the
employee is responsible for the misconduct was sufficiently met in the case at bar. As
Chief Purser, the petitioner cannot feign ignorance on the irregularity as he had custody of
the tickets when the anomaly was discovered. It would not be amiss to suppose that the
petitioner, who would benefit directly or indirectly from the fruits of such fraudulent
scheme, was a party to such irregularity. That there were other pursers who could have
done the irregularity is of no moment. It bears stressing that the petitioner was the Chief
Purser who was tasked to directly supervise each and every purser under him. While,
indeed, it was not proved that he was the one who made the irregular entries on the
tickets, the fact that he did not lift a finger at all to determine who it was is a sad reflection
of his job. In fact, even if the petitioner had no actual and direct participation in the alleged
anomalies, his failure to detect any anomaly in the passage tickets amounts to gross
negligence and incompetence, which are, likewise, justifiable grounds for his dismissal. Be
that as it may, to our mind, it is no longer necessary to prove the petitioners direct
participation in the irregularity, for what is material is that his actuations were more than
sufficient to sow in his employer the seed of mistrust and loss of confidence.
Neither are we impressed with the petitioners claim that he was singled out, or that his
dismissal was a ploy to obviate payment of his retirement benefits. There is nothing in the
records to show that beyond making these allegations, the petitioner did nary of anything
to substantiate the same.
Finally, the petitioner theorizes that even assuming that there was evidence to support
the charges against him, his dismissal from the service is unwarranted, harsh and is not
commensurate to his misdeeds, considering the following: first, his 16 long years of
service with the company; second, no loss or damages was suffered by the company
since the tickets were unissued; third, he had no previous derogatory record; and, lastly,
the amount involved is miniscule.[48] Citing jurisprudence,[49] he appeals for compassion
and requests that he be merely suspended, or at the very least, given separation pay for
his length of service.[50]
We find no merit in the petitioners contention.
 We are not unmindful of the foregoing doctrine, but after a careful scrutiny of the cited
cases, the Court is convinced that the petitioners reliance thereon is misplaced. It must be
stressed that in all of the cases cited, the employees involved were all rank-and-file or
ordinary workers. As pointed out earlier, the rules on termination of employment, penalties
for infractions, insofar as fiduciary employees are concerned, are not necessarily the
same as those applicable to the termination of employment of ordinary employees.
Employers, generally, are allowed a wider latitude of discretion in terminating the
employment of managerial personnel or those of similar rank performing functions which
by their nature require the employers trust and confidence, than in the case of ordinary
rank-and-file employees.[51]
The fact that the petitioner has worked with the respondent for more than 16 years, if it
is to be considered at all, should be taken against him. The infraction that he
committed, vis-a-vis his long years of service with the company, reflects a regrettable lack
of loyalty. Loyalty that he should have strengthened instead of betrayed. If an employees
length of service is to be regarded as a justification for moderating the penalty of
dismissal, it will actually become a prize for disloyalty, perverting the meaning of social
justice and undermining the efforts of labor to cleanse its ranks of all undesirables.[52]
The argument that the petitioner was not guilty of anything because the tickets were
never issued or that he had received nothing from the passengers that he could short-
change the company would not mitigate his liability, nor efface the respondents loss of
trust and confidence in him. Whether or not the respondent was financially prejudiced is
immaterial. Also, what matters is not the amount involved, be it paltry or gargantuan;
rather the fraudulent scheme in which the petitioner was involved, which constitutes a
clear betrayal of trust and confidence. In fact, there are indications that this fraudulent act
had been done before, and probably would have continued had it not been discovered.
Moreover, the records show that the petitioner is not as blameless as he claimed to
be. In 1979 and 1980, he was suspended by the respondent for several company
infractions,[53] which the petitioner did not deny. It must also be stressed that when an
employee accepts a promotion to a managerial position or to an office requiring full trust
and confidence, he gives up some of the rigid guaranties available to an ordinary worker.
Infractions which, if committed by others, would be overlooked or condoned or penalties
mitigated may be visited with more serious disciplinary action.[54]
It cannot be over emphasized that there is no substitute for honesty for sensitive
positions which call for utmost trust. Fairness dictates that the respondent should not be
allowed to continue with the employment of the petitioner who has breached the
confidence reposed on him.[55] Unlike other just causes for dismissal, trust in an employee,
once lost, is difficult, if not impossible, to regain.[56] There can be no doubt that the
petitioners continuance in the extremely sensitive fiduciary position of Chief Purser would
be patently inimical to the respondents interests. It would be oppressive and unjust to
order the respondent to take him back, for the law, in protecting the rights of the
employee, authorizes neither oppression nor self-destruction of the employer.[57]
Anent the petitioners request for separation pay, the Court is constrained to deny the
same. Well-settled is the rule that separation pay shall be allowed only in those instances
where the employee is validly dismissed for causes other than serious misconduct or
those reflecting on his moral character.[58]Inasmuch as reason for which the petitioner was
validly separated involves his integrity, which is especially required for the position of
purser, he is not worthy of compassion as to deserve at least separation pay for his length
of service.[59]
WHEREFORE, the petition is DENIED and the assailed Decision and Resolution of
the Court of Appeals are hereby AFFIRMED in toto. No costs.
SO ORDERED.