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making your case an exception previous acts of insubordination and dishonesty.
to the rule.
As a result, petitioner SMSI issued Memo 12-
692 dated December 20, 2005 terminating
On December 20, 2005, petitioners issued respondent's services effective at the close of
Memo 12-692,7 a Notice of Termination, stating: business hours on December 21, 2005.
After due consideration of all the circumstances,
grounds have been established to justify your Labor Arbiter's Ruling: The [petitioners] are
termination. hereby ordered to pay the [respondent] her
separation pay at the rate of one (1) month
1. You willfully disobey the lawful orders of your salary for every year of service computed from
employer. date of hire up to date hereof or the total
amount of ONE HUNDRED SIXTY-NINE
2. You willfully breach of the trust reposed in
THOUSAND (P169,000.00) Pesos.
you by the management.
Ruling of the NLRC: Respondent's Verified
Petitioners' Allegations Motion for Reconsideration is denied.
Petitioners conceded that respondent was Ruling of the Court of Appeals: The petition is
initially hired as a rank and file employee, who partly granted. The Decision dated January 31,
eventually became the Accounting Supervisor of 2008 and Resolution dated March 27, 2008 of
petitioner SMSI. Given the absence of an the public respondent NLRC are modified and
Accounting Manager, respondent agreed, in a [petitioners] are ordered to pay separation pay
memorandum8 dated February 12, 2001 to [respondent], as previously determined by
addressed to petitioner Tambunting, to accept the labor arbiter, without the award of
the responsibilities of said position provided backwages.
that petitioner SMSI would hire an accounting
assistant to assume some of respondent's Petitioners' Motion for Partial Reconsideration
current responsibilities. was denied by the Court of Appeals in its
Resolution24dated May 13, 2010.
According to petitioners, respondent's position
as Accounting Supervisor was reposed with ISSUES:
trust and confidence.
(1) W/N THE HONORABLE COURT OF
During the administrative hearing on December APPEALS ERRED IN RULING THAT
19, 2005, attended by respondent with her son, RESPONDENT'S COMMISSION OF
respondent was unable to justify her BREACH OF TRUST DID NOT MERIT THE
grant/payment of ECOLA to herself and refusal ULTIMATE PENALTY OF DISMISSAL – NO
to obey the order of petitioner SMSI to stop the
same. It was likewise discovered that (1) (2) W/N THE HONORABLE COURT OF
respondent availed herself of cash advances APPEALS ERRED IN AWARDING
from petitioner SMSI, which she was supposed SEPARATION PAY TO RESPONDENT – YES
to pay by periodically deducting certain
amounts from her salary, but since she was not HELD/RATIO:
making such deductions, the accumulated cash (1) For a valid dismissal of an employee, it
advances already amounted to P64,173.83; and is fundamental that the employer
(2) her employment record with petitioner observe both substantive and
SMSI, spanning several years, was riddled with procedural due process - the
2
termination of employment must be from that of rank and file personnel, insofar
based on a just or authorized cause and as the application of the doctrine of loss of
the dismissal can only be effected, after trust and confidence is concerned. Thus,
due notice and hearing. Petitioners' with respect to rank and file personnel, loss
compliance with procedural due process of trust and confidence as ground for valid
in dismissing respondent is no longer dismissal requires proof of involvement in
being challenged in the present the alleged events in question, and that
Petition; the issues for review of the mere uncorroborated assertions and
Court herein essentially involve accusations by the employer will not be
substantive due process. sufficient. But as regards a managerial
employee, the mere existence of a basis for
Under Article 282(c) of the Labor Code, believing that such employee has breached
as amended, an employer may the trust of his employer would suffice for
terminate an employment for, among his dismissal. Hence, in the case of
other just causes, fraud or willful breach managerial employees, proof beyond
by the employee of the trust reposed in reasonable doubt is not required, it being
him/her by his/her employer or duly sufficient that there is some basis for such
authorized representative. In Etcuban, loss of confidence, such as when the
Jr. v. Sulpicio Lines, Inc., the Court employer has reasonable ground to believe
expounded on this particular just cause that the employee concerned is
for dismissal of an employee: responsible for the purported misconduct,
and the nature of his participation therein
Law and jurisprudence have long recognized renders him unworthy of the trust and
the right of employers to dismiss employees confidence demanded by his position.
by reason of loss of trust and confidence.
More so, in the case of supervisors or In the present case, the petitioner is not an
personnel occupying positions of ordinary rank and file employee. The
responsibility, loss of trust justifies petitioner's work is of such nature as to
termination. Loss of confidence as a just require a substantial amount of trust and
cause for termination of employment is confidence on the part of the employer.
premised from the fact that an employee Being the Chief Purser, he occupied a highly
concerned holds a position of trust and sensitive and critical position and may thus
confidence. This situation holds where a be dismissed on the ground of loss of trust
person is entrusted with confidence on and confidence. One of the many duties of
delicate matters, such as the custody, the petitioner included the preparation and
handling, or care and protection of the filling up passage tickets, and indicating the
employer's property. But, in order to amounts therein before being given to the
constitute a just cause for dismissal, the act passengers. More importantly, he handled
complained of must be "work-related" such the personnel funds of the MV Surigao
as would show the employee concerned to Princess. Clearly, the petitioner's position
be unfit to continue working for the involves a high degree of responsibility
employer. requiring trust and confidence. The position
carried with it the duty to observe proper
The degree of proof required in labor cases company procedures in the fulfillment of his
is not as stringent as in other types of cases. job, as it relates closely to the financial
It must be noted, however, that recent interests of the company. (Emphasis
decisions of this Court have distinguished supplied, citations omitted.)
the treatment of managerial employees
3
Respondent, as Accounting Supervisor, was (2) The law is plain and clear: willful breach
occupying a managerial position. The Court of trust is a just cause for termination of
is not persuaded by respondent's assertion employment. Necessarily, a finding of
that even as Accounting Supervisor, she was breach of trust on the part of respondent in
still just a mere rank and file employee the present case already justified her
performing the same clerical functions she dismissal from service by petitioners. An
had since her hiring in 1994. In her own employer cannot be compelled to retain an
memorandum dated February 12, 2001 to employee who is guilty of acts inimical to
petitioner Tambunting, respondent the interests of the employer. A company
accepted the responsibilities of an has the right to dismiss its employees as a
Accounting Manager. Respondent measure of protection, more so in the case
underwent training for three months, of supervisors or personnel occupying
received additional compensation, and was positions of responsibility.31 Together with
assigned an accounting assistant to help her petitioners' compliance with procedural due
out with her responsibilities. As Accounting process, there is no other logical conclusion
Supervisor, respondent was entrusted with than that respondent's dismissal was valid.
the custody and management of one of the
most delicate matters of any business, that In view of the valid dismissal from service of
is, the financial resources of petitioner respondent, then she is not entitled to
SMSI. Respondent also exercised discretion backwages, as well as separation pay in lieu
in the preparation of the payroll of the of reinstatement. The award of separation
employees of petitioner SMSI, evident from pay is inconsistent with a finding that there
the fact that it was by her own judgment was no illegal dismissal, for under Article
call that she granted and paid herself pro- 279 of the Labor Code, as amended, and as
rated ECOLA since November 2002. held in a catena of cases, the employee who
is dismissed without just cause and without
The Court of Appeals actually affirmed the due process is entitled to backwages and
finding of the NLRC that respondent reinstatement or payment of separation pay
committed a breach of trust and in lieu thereof.
confidence, and there is no cogent reason
for the Court to disturb the same. It was not
disputed that respondent was earning more
than minimum wage, so she was not one of
the intended beneficiaries of ECOLA under
Wage Order Nos. NCR-09 and NCR-10.
Respondent though insisted that Wage
Order Nos. NCR-09 and NCR-10 granted her
the right to a pro-rated share of the ECOLA
on the ground of wage distortion.