458-462 Willful Breach of Trust and Confidence

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  458 Ramos v NLRC 298 SCRA 225 (1998) Just Causes  –  Willful Breach of Trust & Confidence FACTS In 1978, Elizabeth Ramos was employed by United States Embassy Filipino Employees Credit Cooperative (USECO). In 1993, its Board created an Audit and Inventory Committee to determine whether USECO has a sound financial management and control mechanism.   The committee found anomalies in USECO‟s lending transactions. Petitioner and two co-employees were called to shed light on some items in the Audit Committee Report such as unrecorded loans, fabricated ledger, falsification of documents, accommodations of payroll checks, encashment of check/CPAs, resigned members, unrecorded loan of resigned members and withdrawal of more than the deposits. During the meeting, Ramos admitted her serious offense in regard to falsification of documents. When asked by the Board to explain how the resigned members were able to secure loans, she replied that she „just wanted to help them  without regard to existing policies. In her written explanation, Ramos said that the loans are approved based on prerogatives of individuals in authority. She said that, “ it is unfortunate that the USECU Staff had to resort to creating dummy records. But since the loans are duly acknowledged by the borrowers in other legitimate documents, it is readily apparent that the records were made simply to accommodate those borrowers beyond the authorized limits , but never, never to defraud USECU.”  She was preventively suspended for 30 days and was later placed on forced leave with pay, pending the completion of the investigation. USECO commissioned an external auditing firm to examine the irregularities discovered in its lending practices. The auditor confirmed the irregularities and also discovered shortages in bank deposits. Thereafter, USECO dismissed the petitioner for loss of trust and confidence. Petitioner countered with a complaint   for illegal dismissal, illegal suspension, underpayment of salary, moral damages and attorn ey‟s fees. Labor Arbiter sustained the suspension and dismissal of petitioner but ordered the payment of her unpaid salary. ISSUE Whether or not there is just cause for petitioner‟s suspension and dismissal  RULING YES. Petitioner‟s position  as Management Assistant requires a high degree of trust and confidence; and Loss of confidence is a valid ground for dismissal of an employee.   In the case at bar, USECO proved that its loss of confidence on petitioner has a rational basis. The findings of the labor arbiter on this factual issue are supported by the evidence. Petitioner's explanation that the loan practices were made for the benefit of the borrowing members and not to defraud USECO cannot exonerate her. Her unsound practices endangered the financial condition of USECO because of the possibility that the loans could not be collected at all. The NLRC initially reversed the ruling of the labor arbiter on the grounds that: (1) petitioner was denied procedural due process and (2) the criminal case for estafa filed against her has been dismissed by the Manila Prosecutor's Office for insufficiency of evidence, particularly, for lack of proof that the USECO was damaged by the acts attributed to petitioner. Similarly, it is a well established rule that the dismissal of the criminal case against an employee shall not necessarily be a bar to his dismissal from employment on the ground of loss of trust and confidence.  459 Philippine National Construction Corporation v Matias 458 SCRA 148 (2005) Just Causes  –  Willful Breach of Trust & Confidence FACTS Rolando Matias was employed by Construction and Development Corporation of the Philippines (CDCP) as Chief Accountant and  Administrative Officer. During his employment with the company, various parcels of land situated in Bukidnon were placed in the names of certain employees as trustees for the purpose of owning vast tracts of land more than the limit a corporation can own which were primarily intended for CDCP agricultural businesses. By internal arrangement documents transferring back the properties to the corporation were executed. A piece of land was registered in the name of Matias. CDCP was later converted a government owned or controlled corporation, and the name of CDCP was changed to Philippine National Construction Corporation (PNCC). Under a new set up, PNCC offered a retrenchment program and on December 31, 1984 Matias availed of the said program. Sometime in 1985, the Conjuangco Farms owned by Mr. Danding Conjuangco acquired CDCP Farms Corporation wh[ich] took over the operations of said farms. Not long after, or in 1989, CDCP Farms Corporation ceased to operate. In July 1992, two former CDCP employees, went to the house of Matias and brought with them duly accomplished documents and Special Power of Attorney for his signature and informed him that the lands in Bukidnon under his name with all the others were invaded by squatters, and that the said land were covered by the Comprehensive Agrarian Reform Program (CARP) where Matias‟ name was included in the list of landowners. Matias reluctantly signed the document and after six months, he signed an acknowledgment receipt of P100,000.00. The srcinal title registered in the name of Matias was cancelled and a new title was issued. The transfer of said parcel of land was made possible because Matias received manager‟s checks from the Land Bank of the Philippines as payment of Land Transfer Acquisition. In 1996, Matias was rehired by PNCC as Project Controller   in Zambales PMMA Project. Not long after, Mr.Alday, Head of the Realty Management Group of PNCC invited Matias to his office and showed him a listing of parcels of land in the name of different persons with the corresponding status including the latter‟s name. On the basis of the listing, Mr.  Alday told Matias that the transfer of the property registered in the latter‟s name was not yet consummated by the LBP and then requested Matias to execute a Deed of Assignment in favor of PNCC pertaining to the said property, which Matias did and guaranteed in writing that the „parcel of land is free from any lien or encumbrance.‟  On April 20, 1998, a memorandum was issued to Matias by PNCC directing the former to explain in writing why none of the following actions, falsification, estafa, dishonesty, and breach of trust and confidence, should be taken against him in connection with the Deed of Assignment. PNCC alleges that respondent fraudulently breached its trust and confidence when, without its knowledge and consent, he disposed of the Bukidnon property; though actually belonging to petitioner, that property had purportedly been merely placed in trust under his name. Thereafter, he assigned the same property to petitioner, allegedly despite his full knowledge that the title had already been transferred -- with his active planning and participation -- to the Republic of the Philippines . In due time, Matias submitted his written explanation. However, he was later advised that he was terminated from the service on the ground of loss of trust and confidence. Hence, Matias filed a complaint for illegal dismissal and money claims against PNCC alleging that the dismissal on the ground of loss of trust and confidence was without basis.”   ISSUE Whether or not the dismissal of Matias on the ground of loss of trust and confidence was without basis  RULING YES. To constitute a valid cause to terminate employment, loss of trust and confidence must be proven clearly and convincingly by substantial evidence. To be a just cause for terminating employment, loss of confidence must be directly to the duties of the employee to show that he or she is woefully unfit to continue working for the employer. Undeniably, the position of project controller -- the position of respondent at the time of his dismissal -- required trust and confidence, for it related to the handling of business expenditures or finances. However, his act allegedly constituting breach of trust and confidence was not in any way related to his official functions and responsibilities as controller. In fact, the questioned act pertained to an unlawful scheme deliberately engaged in by petitioner in order to evade a constitutional and legal mandate. It has oft been held that loss of confidence s hould not be used “as a subterfuge for causes which are illegal, improper and unjustified. It must be genuine, not a mere afterthought to justify an earlier action taken in bad faith.” Be it remembered that at stake here are the sole means of livelihood, the name and the reputation of the employee. Thus, petitioner must prove an actual breach of duty founded on clearly established facts sufficient to warrant his loss of employment. The Court stressed once more that the right of an employer to dismiss an employee on account of loss of trust and confidence must not be exercised whimsically. To countenance an arbitrary exercise of that prerogative is to negate the employee‟s constitutional right to security of tenure. In other words, the employer must clearly and convincingly prove by substantial evidence the facts and incidents upon which loss of confidence in the employee may be fairly made to rest; otherwise, the latter‟s dismissal will be rendered illegal.   460 Bristol Myers v Baban 534 SCRA 198 (2008) Just Causes  –  Willful Breach of Trust & Confidence FACTS Petitioner hired respondent Baban as district manager to handle the company‟s clients in Northern Mindanao area and its immediate vicinities. His duties included the promotion of nutritional products to medical practitioners, sale to drug outlets and the supervision of territory managers in his district. In a field audit conducted, twenty packs of samples were found in the baggage compartment of a company car with an accompanying note with political overnotes. Respondent admitted that it was his father who was referred to in the note, who, after having served councilor in Zamboanga City for 36 years has lost his bid for vice-mayoralty post in the 1998 elections. Apparently, respondent‟s fathe r was thanking supporters through distribution of petitioner‟s sample products.   A memorandum was issued to respondent requiring him to explain in writing why he should not be terminated for the infraction. Respondent admitted his honest mistake and pleaded for consideration insisting that he has not cause any damage nor injury to the image of the company as the samples were not, in fact, distributed and that no gain was delivered by him or his family. After a private conference where he was able to submit evidence, he received under protest the memorandum of his dismissal. He filed a case for illegal dismissal with a claim for moral and exemplary damages plus attorney‟s fees.  The Labor Arbiter dismissed his complaint. NLRC reinstated Labor  Arbiter‟s decision after a Motion for Reconsideration. Court of  Appeals ruled in favor of the respondent, finding the dismissal unjustified, much too harsh and not commensurate with the alleged infraction.  ISSUE May the CA order the reinstatement, with full back wages and damages, of a confidential employee whom it had found to be guilty of breach of trust? RULING NO. Article 282 of the Labor Code provides that fraud or willful breach by the employee of the trust reposed in him by his employer or his duly authorized representative merits a valid dismissal. The right of employers to dismiss employees by reason of loss of trust and confidence is well established in our jurisprudence. The first requisite is that the employee concerned must be one holding a position of trust and confidence. Verily, respondent herein is handling large amounts of petitioner‟s samples and therefore he is among those who in the normal and routine exercise of their functions, regularly handle significant amounts of money and property. The second requisite is that there must be a willful act that would justify the loss of trust and confidence, and the same must be founded on clearly established facts. Respondent‟s act of stapling a thank you note from his father warrants the loss of petitio ner‟s trust and confidence. He had, in effect, appropriated company property for personal gain and benefit. Having met the requisites, the Court finds the dismissal valid. Since respondent was validly dismissed for a cause other than serious misconduct or those that negatively reflect on his moral character, the Court also finds the award of separation pay justifiable. 461 Gana v NLRC 554 SCRA 471 (2008) Just Causes  –  Willful Breach of Trust & Confidence FACTS On December 1, 1996, petitioner commenced her employment as marketing manager of Total Distribution and Logistics System, Inc. (TDLSI), a sister company of Aboitiz Transport, Aboitiz Container and Aboitiz Haullers, respondent company.   In 1997, she was transferred from TDLSI to respondent company retaining the same position as marketing manager.   In 1998, petitioner was required by private respondent Carl Wozniak (Wozniak), the Senior Vice-President and General Manager of Aboitiz Haulers, to explain in writing why she should not be penalized for having violated company rules on offenses against company interest. Wozniak directed her to appear in an investigation to be conducted by the company and defend herself with respect to the electronic mails (e-mails) she sent to an official of Trans-America, divulging various confidential information about the business operations and transactions of Aboitiz Container which are detrimental to the said company.   On April 24, 1998, petitioner, through her counsel, sent a letter to Wozniak denying the charges against her. In a letter dated May 22, 1998, Wozniak informed petitioner that her explanations during the investigation with respect to the charges leveled against her were found to be unacceptable; that she was found guilty of Betrayal of Confidential Information which constitutes sufficient reason for the company to lose the high degree of trust and confidence which it reposed upon her as its manager; and that as a result, her employment with respondent company has been terminated. Petitioner then filed a Complaint for illegal dismissal with the NLRC. The Labor Arbiter rendered a Decision finding respondent company guilty of illegally dismissing petitioner. On appeal, the NLRC set aside the Decision of the LA. Petitioner filed a Motion for Reconsideration but the same was denied.   Petitioner then filed a petition for certiorari   with the CA questioning the Decision and Order of the NLRC. The CA promulgated its presently assailed Decision dismissing the petition for certiorari   and affirming the questioned Decision and Order of the NLRC.   Petitioner filed a Motion for
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