132. VICENTE C. ETCUBAN, JR., vs. SULPICIO LINES, INC.

G.R. No. 148410 January 17, 2005

Doctrine: Law and jurisprudence have long recognized the right of employers to dismiss employees by reason of
loss of trust and confidence. More so, in the case of supervisors or personnel occupying positions of
responsibility, loss of trust justifies termination. 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 holds where a person is entrusted with confidence on delicate matters, such as the custody, handling or care
and protection of the employer’s 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.”

Facts: The petitioner was employed by the respondent on January 30, 1978 until his dismissal on June 10, 1994 for
loss of trust and confidence. At the time of his dismissal, the petitioner was the Chief Purser of the MV Surigao
Princess receiving a monthly salary of P5,000.00. 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. 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. He was also tasked to disburse the salaries of the crewmen of the vessel.

Sometime in the last week of May 1994, the newly designated jefe de viaje of the MV Surigao Princess, in a
surprise examination, discovered that several yellow passenger’s duplicate original 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. 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, petitioner received a memorandum of even date from Personnel Officer Artemio F. Añiga
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. The petitioner, however, refused to acknowledge receipt of the
memorandum which was personally served on him, prompting the respondent to mail the same, and which the
petitioner received days later.

Meanwhile, upon his arrival at the office, the petitioner was questioned by Senior Executive Vice-President
and General Manager of respondent. Thereafter, petitioner was preliminarily investigated by Mr. Añiga wherein his
statements were taken down. After the initial investigation, the petitioner was told to sign its minutes but he
adamantly refused, claiming the same to be “self-incrimininatory.” The next day, the petitioner was replaced by Mr.
Felix Almonicar as the Chief Purser of the MV Surigao Princess. As a result of his replacement, the petitioner thought
he was fired from his job.

Barely a week after the petitioner’s preventive suspension and pending his administrative investigation, he
filed a complaint against the respondent for illegal dismissal, non-payment of overtime pat, 13th month pay and other
monetary benefits with the NLRC, Regional Arbitration Branch No. VII, Cebu City. On June 9, 1994, the respondent
received its summons. Short of pre-empting its administrative investigation, coupled with the petitioner’s obstinate
refusal to submit to further investigation, the respondent decided to terminate the petitioner’s employment for loss of
trust and confidence in connection with passage tickets. A copy of termination dated June 10, 1994 was sent by mail
to the petitioner.

Issue: WHETHER OR NOT ECTUBAN’S TERMINATION WAS VALID

Ruling: The SC agree with the respondent when it 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.

The degree of proof required in labor cases is not as stringent as in other types of cases. 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

In the present case, the petitioner is not an ordinary rank-and-file employee. The petitioner’s 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 petitioner’s 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 fraudulently scheme, was a party to
such irregularity.

133. WORLDWIDE PAPERMILLS VS. NLRC

Doctrine: In the case at bench, it is undisputed that respondent Edwin P. Sabuya had within a
span of almost six (6) years been repeatedly admonished, warned and suspended for incurring
excessive unauthorized absences. Worse, he was not at home but was out driving a pedicab to
earn extra income when the company nurse visited his residence after he filed an application for
sick leave. Such conduct of respondent Edwin P. Sabuya undoubtedly constitutes gross and
habitual neglect of duties.

FACTS:

Private respondent was employed by petitioner as a packer on July 18, 1982 until his services were
terminated on September 28, 1991. It appears that private respondent incurred excessive unexcused absences from
1986 to 1989.
 Sabuya was counseled several times to improve his attendance. On April 11, 1988, he promised not to be
absent himself, yet, no compliance. Due to having incurred 12 days AWOL in 1988, he was supposed to be
terminated based on the company’s rule, but due to his asking reconsideration and intervention of R. Brusola, Union
President he was only suspended for 1 month. A promissory note to this effect was executed by Sabuya and
witnessed by R. Brusola, stressing among others to improve his attendance in 1989; once he exceeds the VL & SL
granted by the company, he accepts to be terminated; and the next time he is declared AWOL he accept the DA of
termination.

On February 2, 1990, private respondent wrote petitioner a letter promising to mend his ways after the
personnel officer of petitioner recommended his dismissal due to his numerous absences.

Private respondent, however, again incurred absences without official leave in January and February of
1991. He was subsequently suspended for two weeks effective June 24, 1991. For the third time, private respondent
was suspended for two weeks effective July 22, 1991 up to August 4, 1991 when he incurred absences on July 5 and
8, 1991.

A week after he had served his latest suspension, private respondent applied for sick leave covering the
period August12-18, 1991. On August 15, 1991, the company nurse, paid private respondent a home visit. However,
he was not there. Neither was anybody at home, though the radio was on. She learned from private respondent’s son
that his father was moonlighting as a pedicab driver at Bayanan, Muntinlupa market.

After petitioner was informed of the incident, private respondent’s application for sick leave was
disapproved. Then, on August 29, 1991, petitioner issued a memorandum to private respondent requiring him to
explain within 24 hours from receipt why no disciplinary action should be imposed upon him for his excessive
absences without leave.

On September 21, 1991, petitioner terminated the employment of private respondent. Thus, on September
30, 1991, the latter filed a complaint for illegal dismissal, praying for reinstatement and payment of backwages.

The LA rendered a decision finding the dismissal of private respondent illegal and ordered his reinstatement
without loss of seniority rights and privileges, with full backwages. In holding that private respondent was illegally
dismissed, LA found that not only were petitioners remiss in according private respondent the due process
requirements of notice and hearing, but, more importantly, petitioners offered no just cause for his dismissal.

Aggrieved, petitioners appealed to the NLRC which rendered a decision reversing LA’s decision by ruling
that private respondent was dismissed for just cause. However, due to petitioner’s failure to observe the requirement
of due process in dismissing private respondent, respondent NLRC ordered petitioners to indemnify private
respondent the amount of P1,000.00. Petitioners were also ordered to pay private respondent separation pay
equivalent to 1 month salary for every year of service, for equitable reasons.

Petitioner’s MR was denied by respondent NLRC in a resolution dated November 24, 1993. Hence this
petition.

ISSUE:

WHETHER OR NOT SABUYA’S TERMINATION WAS VALID

RULING:

YES. Article 282 of the Labor Code provides the grounds for which an employer may validly dismiss an
employee, among which is gross and habitual neglect by the employee of his duties.

In the case at bench, it is undisputed that respondent Edwin P. Rabuya had within a span of almost 6 years
been repeatedly admonished, warned and suspended for incurring excessive unauthorized absences. Worse, he was
not at home but was out driving a pedicab to earn extra income when the company nurse visited his residence after
he filed an application for sick leave. Such conduct of respondent Edwin P. Sabuya undoubtedly constitutes gross
and habitual neglect of duties.

Our decision in Filipro, Inc. vs. the Honorable Minister Blas F. Ople et al. does not preclude private
respondent’s dismissal for, unlike in Filipro, respondent Edwin P. Sabuya was given notice that the next time he
again exceeds his allowed vacation and sick leaves or goes on absence without official leave, he would be
terminated from employment. Private respondent did not heed the warning. His dismissal from employment is,
therefore, justified.

134. AUSTRIA VS NLRC

Doctrine: Misconduct has been defined as improper or wrong conduct. It is the transgression of some established
and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and
not mere error in judgment. For misconduct to be considered serious it must be of such grave and aggravated
character and not merely trivial or unimportant. Based on this standard, we believe that the act of petitioner in
banging the attaché case on the table, throwing the telephone and scattering the books in the office of Pastor Buhat,
although improper, cannot be considered as grave enough to be considered as serious misconduct.

FACTS:
Private respondent Central Philippine Union Mission Corporation of the Seventh Day Adventists is a
religious corporation duly organized and existing under Philippine law and is represented in this case by the other
private respondents, officers of the SDA. Petioner was a pastor of the SDA until October 31 1991 when his services
were terminated.

Petitioner worked with the SDA for 28 years from 1963 to 1991. He began his work with the SDA on July 15,
1963 as a literature evangelist, selling literature of the SDA over the island of Negros. From then on, petitioner
worked his way up the ladder and got promoted several times. In January 1968, petitioner became the Assistant
Publishing Director in the West Visayan Mission of the SDA. In July 1972, he was elevated to the position of Pastor in
the West Visayan Mission covering the island of Panay, and the provinces of Romblon and Guimaras. Petitioner held
the same position up to 1988. Finally, in 1989, petitioner was promoted as District Pastor of Negros Mission of the
SDA and was assigned at Sagay, Balintawak and Toboso, Negros Occidenttal, with 12 churches under his
jurisdiction. In January 1991, petitioner was transferred to Bacolod City. He held the position of district pastor until his
services were terminated on October 31 1991.

On various occasions from August up to October 1991, petitioner received several communications from the
treasurer of the Negros Mission asking him to admit accountability and responsibility for the church tithes and
offerings collected by his wife in his district which amounted to P15,079.00 and to remit the same to the Negros
Mission.

In his written explanation, he reasoned out that he should not be made accountable for the unremitted
collections since it was private respondents who authorized his wife to collect the tithes and offerings since he was
very sick to do the collecting at that time.

Thereafter, on October 16, 1991, petitioner went to the office of the President of the Negros Mission. During
said all, petitioner tried to persuade Pastor Buhat to convene the Executive Committee for the purpose of settling the
dispute between him and the private respondent, Pastor David Rodrigo. The dispute between them arose from an
incident in which petitioner assisted his friend, Danny Diamada to collect from Pastor Rodrigo the unpaid balance for
the repair of the latter’s motor vehicle which he paid to pay to Diamada. Due to the assistance of petitioner in
collecting Pastor Rodrigo’s debt, the latter harbored ill-feelings against petitioner. When news reached petitioner that
Pastor Rodrigo was about to file a complaint against him with the Negros Mission, he immediately proceeded to the
Office of Pastor Buhat on the said date and asked the latter to convene the Executive Committee. Pastor Buhat
denied the request of petitioner since some committee members were out of town and there was no quorum.
Thereafter, the two exchanged heated arguments. Petitioner then left the office of Pastor Buhat. While on his way
out, petitioner overheard Pastor Buhat saying, “Pastor you are talking tough.” Irked by such remark, petitioner
returned to the office and tried to overturn the latter’s table, though unsuccessfully, since it was heavy. Thereafter,
petitioner banged the attaché case of Pastor Buhat on the table, scattered the books in his office, and threw the
phone. Fortunately, two other pastors were around and they pacified both Pastor Buhat and petitioner.

Petitioner received a letter inviting him and his wife to attend the Executive Committee meeting at the
Negros Mission. A fact-finding committee was created to investigate petitioner. For two days, the fact-finding
committee conducted an investigation. Petitioner received a letter of dismissal citing misappropriation of
denominational funds, willful breach of trust, serious misconduct, gross and habitual neglect of duties, and
commission of an offense against the person of employer’s duly authorized representative, as grounds for the
termination of his services.

Petitioner filed a complaint before the LA for illegal dismissal against the SDA and its officers and prayed for
reinstatement with backwages and benefits, moral and exemplary damages and other labor law benefits. The LA
rendered a decision in favor of the petitioner.

The SDA appealed the decision to the NLRC which vacated the findings of the LA. Petitioner filed an MR
wherein the NLRC reverse its original decision. In view of the reversal of the original decision of the NLRC, the SDA
filed an MR. On their invocation, private respondents said that the LA has no jurisdiction over the complaint due to
the constitutional provision on the separation of church and state since the case allegedly involved ecclesiastical
affair to which the State interfere. The NLRC, without ruling on the merits, reversed itself again, sustained the
argument posed by SDA and dismissed the complaint of the petitioner.

ISSUE:

WHETHER OR NOT DISMISSAL OF PETITIONER WAS VALID

RULING:

NO. In termination cases, the settled rule is that the burden of proving that the termination was for a
valid or authorized cause rests on the employer. Thus, private respondents must not merely rely on the
weaknesses of petitioner’s evidence but must stand on the merits of their own defense.

The issue being the legality of petitioner’s dismissal, the same must be measured against the requisites for
a valid dismissal, namely: (a) the employee must be afforded due process, i.e. he must be given an
opportunity to be heard and to defend himself; and (b) the dismissal must be for a valid cause as provided in
Article 282 of the Labor Code. Without the concurrence of this twin requirements, the termination would, in the eyes
of the law, be illegal.

Before the services of an employee can be validly terminated, Article 277 (b) of the Labor Code and Section
2, Rule XXIII, Book V of the Rules Implementing the Labor Code further require the employer to furnish the employee
with two (2) written notices, to wit : (a) a written notice served on the employee specifying the ground or
grounds for termination, and giving to said employee reasonable opportunity within which to explain his
side; and (b) a written notice of termination served on the employee indicating that upon due consideration
of all the circumstances, grounds have been established to justify his termination.

The first notice, which may be considered as the proper charge, serves to apprise the employee of the
particular acts or omissions for which his dismissal is sought. The second notice on the other hand seeks to inform
the employee of the employer’s decision to dismiss him. This decision, however, must come only after the employee
is given a reasonable period from receipt of the first notice within which to answer the charge and ample opportunity
to be heard and defend himself with the assistance of a representative, if he so desires. This is in consonance with
the express provision of the law on the protection to labor and the broader dictates of procedural due process. Non-
compliance therewith is fatal because these requirements are conditions sine qua non before dismissal may be
validly effected.

Private respondent failed to substantially comply with the above requirements. With regard to the first
notice, the letter which notified petitioner and his wife to attend the meeting cannot be construed as the
written charge required by law. A perusal of the said letter reveals that it never categorically stated the particular
acts or omissions on which petitioner’s impending termination was grounded. In fact, the letter never even mentioned
that petitioner would be subject to investigation. The letter merely mentioned petitioner and his were invited to a
meeting wherein what would be discussed were the alleged unremitted church tithes and the events that transpired
on October 16, 1991. Thus, petitioner was surprised to find out that the alleged meeting turned out to be an
investigation. From the tenor of the letter, it cannot be presumed that petitioner was actually on the verge of
dismissal. The alleged grounds for the dismissal of petitioner from the service were only revealed to him when the
actual letter of dismissal was finally issued. For this reason, it cannot be said that petitioner was given enough
opportunity to properly prepare for his defense. While admittedly, private respondents complied with the second
requirement, the notice of termination, this does not cure the initial defect of lack of the proper written charge required
by law.

We cannot sustain the validity of dismissal based on the ground of breach of trust. Private respondents
allege that they have lost their confidence in petitioner for his failure despite demands, to remit the tithes and
offerings amounting to P15,078.10, which were collected in his district. A careful study of the voluminous records of
the case reveals that there is simply no basis for the alleged loss of confidence and breach of trust. Settled is the rule
that under Article 282 (c) of the Labor Code, the breach of trust must be willful. A breach is willful if it is done
intentionally, knowingly and purposely without justifiable excuse, as distinguished from an act done carelessly,
thoughtlessly, heedlessly or inadvertently. It must rest on substantial grounds and not on the employer’s
arbitrariness, whims, caprices or suspicion, otherwise the employee would eternally remain at the mercy of
the employer. It should be genuine and not simulated. This ground has never been intended to afford an occasion
for abuse, because of the subjective nature. The records show that there were only six instances when petitioner
personally collected and received from the church treasurers the tithes, collections, and donations for the church. The
stenographic notes on the testimony of Naomi Geniebla, the Negros Mission Church Auditor and a witness for private
respondents, show that Pastor Austria was able to remit all his collections to the treasurer of the Negros Mission.

With respect to the grounds of serious misconduct and commission of an offense against the person of the
employer’s duly authorized representative, we find the same unmeritorious and, as such, do not warrant petitioner’s
dismissal from the service.

After all, as correctly observed by the LA, though petitioner committed damage to property, he did not
physically assault Pastor Buhat or any other pastor present during the incident of October 16 1991. In fact, the
alleged offense committed upon the person of the employer’s representatives was never really established or proven
by private respondents. Hence, there is no basis for the allegation that petitioner’s act constituted serious misconduct
or that the same offense against the person of the employer’s duly authorized representative. As such, the cited
actuation of petitioner does not justify the ultimate penalty of dismissal from employment. While the constitution does
not condone wrongdoing by the employee, it nevertheless urges a moderation of the sanctions that may be applied to
him in light of the many disadvantages that weigh heavily on him like an albatross on his neck. Where a penalty less
punitive would suffice, whatever missteps may have been committed by the worker ought not be visited with a
consequence so severe such as dismissal from employment. For the foregoing reasons, we believe that the minor
infraction committed by petitioner does not merit the ultimate penalty of dismissal.

135. FELIX VS ENERTECH SYSTEM INDUSTRIES, INC.

Doctrine: Falsification of time cards constitutes serious misconduct and dishonesty or fraud, which are just causes
for the termination of employment

FACTS:

Respondent Enertech System Industries, Incorporated is engaged in the manufacture of boilers and tanks.
Petitioner Manuel C. Felix worked as a welder/fabricator in respondent company. Petitioner and three other
employees were assigned to install a smokestack at the Big J Feedmills in Sta. Monica, Bulacan. During the entire
period they were working at the Big J Feedmills, petitioner and his companions accomplished daily time records.
Petitioner wrote in his DTR that he had worked 8 hours a day on the basis of which his wages were computed.

The work was estimated to be completed within seven days, but it actually took the workers until August 17,
1994, or about two weeks, before it was finished. On the day, petitioner and his three co-employees were each given
notice by respondent, which read in part that reports came to their office that for the past few days they were
reporting at the Big J jobsite at around 11 o’clock in the morning and leave at two o’clock. Respondent considered
such act as abandonment of work which is a violation of the Company Code on Employees Discipline that warrants a
penalty of dismissal. Petitioner and his co-employees were given 24 hours to explain their side on the said matter.

The next day, petitioner and his co-workers were placed under preventive suspension for seven working
days. On August 24 1994, respondent, through its personnel assistant, and in the presence of two union officers
interviewed the owner of the Big J Feedmills and his engineer.

Petitioner’s co-employee and neighbor in Sitio Kabanatuan, Valenzuela, also stated in an affidavit that he
had seen petitioner either in his house or within their compound on August 6,7,8 and 14, 1994, between 3 and 4
o’clock in the afternoon, when he was supposed to be working at the Big J Feedmills in Bulacan at that time.

On September 9, 1994, respondent required petitioner to report to the company lawyer on September 13,
1994 for investigation. Then, on October 17, 1994, it issued a memorandum placing petitioner under preventive
suspension for 30 days. Finally, on November 21, 1994, respondent sent petitioner a memorandum terminating his
employment on the grounds of dishonesty and insubordination.

Petitioner filed a complaint for illegal dismissal against respondent before the Arbitration Branch of NLRC.
The LA rendered a decision finding petitioner to have been illegally dismissed and ordered respondent to reinstate
complainant with backwages and pay his proportionate 13th month pay for 1994.

Respondent appealed to the NLRC. Pending appeal, a writ of execution was issued on September 23, 1997
directing respondent to reinstate petitioner either physically or in the payroll.

Respondent filed an Omnibus Motion arguing that reinstatement no longer possible as the violations of
company rules committed by petitioner had caused strained relations between petitioner and itself. Respondent
further alleged that because of petitioner’s falsification of his daily time records which enabled him to collect his full
salary, it could no longer trust him. Respondent prayed that the writ of execution be recalled and that a new order be
issued allowing it to pay petitioner separation pay in lieu of reinstatement.

The NLRC rendered a decision reversing the LA’s decision and dismissing petitioner’s complaint for illegal
dismissal for lack of merit. Petitioner filed an MR but the same was denied. He appealed to the CA which affirmed
the dismissal of petitioner although it granted his claim for 13th month pay. The CA denied reconsideration of its
decision. Hence, this petition.

ISSUE:

WHETHER OR NOT PETITIONER’S DISMISSAL WAS VALID

RULING:

YES. The CA, taking into account the findings of the NLRC, the interview with the owner of Big J Feedmills
and its engineer, and the affidavits of Yanos and Tapiru correctly concluded that there was substantial evidence
presented showing that petitioner did not really work 8 hours a day, as he had stated in his time cards.

Indeed, the validity of petitioner’s dismissal is a factual question. It is not the reviewing court to weigh the
conflicting evidence, determine the credibility of witnesses, or otherwise substitute its own judgment for that of the
administrative agency. Well-settled is the rule that the findings of fact of quasi-judicial agencies, like NLRC are
accorded not only respect but at times even finality if such findings are supported by substantial evidence. This is
especially so in this case, in which the findings of the NLRC were affirmed by the CA. the findings of fact made
therein can only be set aside upon a showing of grave abuse of discretion, fraud or error of law. there is no such
showing of grave abuse of discretion in this case

For this reason, we find petitioner’s dismissal to be in order. Falsification of time cards constitutes serious
misconduct and dishonesty or fraud, which are just causes for the termination of employment under Art. 282 (a) and
(c) of the Labor Code which provides:

ART. 282. Termination by Employer. – An employer may terminate an employment for any of the following
causes:

(a) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly
authorized representative;