MECO V BELTRAN  If at all, her only violation was a simple delay in remitting the payment, which caused no
GR NO. 173774 considerable harm to the company.
FACTS:
 Beltran was employed by MERALCO on December 16, 1987 as Senior Branch Clerk at
their Pasig branch
 While rendering overtime work on September 28, 1996, Beltran accepted ₱15,164.48
from Collection Route Supervisor, Berlin Marcos which he received from a customer
Chang.
o This was in lieu of a returned check issued in payment of a bill
 Beltran was at first hesitant as it was not part of her regular duties to accept payments
from customers but was later on persuaded by Marcos
o She received payment and issued Auxiliary Receipt which she dated Sept 30
instead of Sept 28.
o This was done to show that it was an accommodation, an accepted practice
in the office
o She placed the money inside the drawer of her table.
However, Beltran was able to remit Chang’s payment on January 13, 1997.
 She was placed under preventive suspension January 20, 1997 pending the completion
of the investigation
MERALCO considered as misappropriation or withholding of company funds her failure to
immediately remit said payment in violation of its Code on Employee Discipline
In her Sinumpaang Salaysay:
 Beltran admitted receipt of Chang’s payment and having issued an auxiliary receipt
 She nevertheless explained that the day following her receipt of the money, she had a
huge fight with her husband which led to their separation
 Subsequent marital woes coupled with her worries for her ailing child distracted her into
forgetting Chang’s payment.
 After Garcia, her supervisor approached her regarding the unremitted payment, she
immediately looked at her drawer and handed it to Garcia together with the other
documents.
Garcia on the other hand testified:
 She inquired about the said payment to Beltran on January 7, 1997 but failed to remit
the payment even the next day and subsequently went on leave
 It was only on January 13, 1997 the payments and other documents was handed over
The investigator found Beltran guilty of misappropriating and withholding Chang’s payment
and recommended her dismissal
For willfully, unlawfully and feloniously withholding and/or misappropriating for your personal
purposes or benefit electric bill payment of a Meralco customer, you have thereby violated Section
7 par. (1) of the Company Code on Employee Discipline
Beltran was terminated effective March 13, 1997
She then filed an illegal dismissal complaint against Meralco
 She argued that she had no intention to withhold company funds
 Besides, it was not her customary duty to collect and remit payments from customers.
 She claimed good faith, believing that her acceptance of Chang’s payment is considered
goodwill in favor of both MERALCO
 Her 9 years of unblemished service to the company should be taken into account such
that the penalty of dismissal is not a commensurate penalty
LA, regarded the penalty of dismissal as not commensurate to the degree of infraction committed
as there was no adequate proof of misappropriation on the part of Beltran.
 The delay was unintentional and cannot be a basis of misappropriation
 It is excusable for Beltran to commit lapses in her work due to serious family difficulties.
 Nonetheless imposed disciplinary action in the form of forfeiture of salary for her neglect
in remitting the funds at once.
NLRC, reversed LA decision and dismissed Beltran’s complaint
 Beltran withheld company funds by failing to remit it for almost four months.
 It disregarded Beltran’s assertion of family problems as the same cannot be used as an
excuse for committing a serious misconduct in violation of the trust.
 NLRC was convinced that Beltran used the money for her personal needs since her act
of taking a leave of absence right after her confrontation with Garcia suggested that she
needed time to produce it.
CA, instead agreed with the findings of the Labor Arbiter that there were no serious grounds to
warrant Beltran’s dismissal.
 CA held that the penalty of dismissal is harsh considering the infraction committed and
Beltran’s nine years of unblemished service with MERALCO.
ISSUE: WON the penalty imposed was commensurate to the degree of infraction committed
HELD:
NO
There are no sufficient grounds to warrant Beltran’s dismissal.
For loss of trust and confidence to be a valid ground for dismissal, it must be based on a willful
breach of trust and founded on clearly established facts.
A breach is willful if it is done intentionally, knowingly and purposely, without justifiable
excuse
Beltran attributed her delay in turning over Chang’s payment to her difficult family situation.
 Admittedly, she was reminded of Chang’s payment by her supervisor on January 7,
1997 but denied having been ordered to remit the money on that day.
 Her continued delay was caused by an inevitable need to take a leave of absence for
her to attend to the needs of her child who was suffering from asthma.
The burden of proving the legality of an employee’s dismissal lies with the employer
 Unsubstantiated suspicions, accusations, and conclusions of employers do not provide
legal justification for dismissing employees.
 MERALCO cannot claim or conclude that Beltran misappropriated the money based on
mere suspicion.
 Beltran delayed handing over the funds to the company, MERALCO still has the burden
of proof to show clearly that such act of negligence is sufficient to justify termination
from employment.
Beltran’s delay does not clearly and convincingly establish a willful breach on her part, that is,
which is done "intentionally, knowingly and purposely, without any justifiable excuse."
 Even though she was remiss in her duties, such negligence, however, is not sufficient
to warrant separation from employment.
  To justify removal from service, the negligence should be gross and habitual

"Gross negligence x x x is the want of even slight care, acting or omitting to act in a situation
where there is duty to act, not inadvertently but willfully and intentionally, with a conscious
indifference to consequences insofar as other persons may be affected."

Habitual neglect, on the other hand, connotes repeated failure to perform one’s duties for a period
of time, depending upon the circumstances.

 No concrete evidence was presented by MERALCO to show that Beltran’s delay in

remitting the funds was done intentionally.
 Beltran’s simple negligence did not result in any loss.
 No harm or damage to the company or to its customers attributable to Beltran’s
negligence was alleged by MERALCO

Under the circumstances, MERALCO’s sanction of dismissal will not be commensurate to

Beltran’s inadvertence not only because there was no clear showing of bad faith and malice but
also in consideration of her untainted record of long and dedicated service to MERALCO.

Philippine Long Distance Telephone Company v. Berbano, Jr.,34 we held that:

The magnitude of the infraction committed by an employee must be weighed and equated with
the penalty prescribed and must be commensurate thereto, in view of the gravity of the penalty of
dismissal or termination from the service. The employer should bear in mind that in termination
cases, what is at stake is not simply the employee’s job or position but [her] very livelihood.

Where a penalty less punitive would suffice, whatever missteps may be committed by an employee
ought not to be visited with a consequence so severe such as dismissal from employment.
 BATONGBACAL V ASSOCIATED BANK
169 SCRA 7600
FACTS:
Batongbacal, a lawyer who was admitted to the Bar in 1952, began his banking career in 1961 as
manager of the Second Rizal Development Bank.
 1966, he transferred to the Citizens Bank and Trust Company was appointed assistant
vice-president to assist the Senior VP
o Such appointment was without definite period
 Citizens Bank and Trust Company merged with the Associated Banking Corporation
wherein Batongbacal remained an assistant VP
 6 years later he learned that the salary and allowances he was receiving were very
much below the standard remuneration of the bank's other assistant VP
o even less than those paid for employees holding positions lower than the rank
of assistant vice-president.
He wrote two the bank's board of directors requesting that he be paid "the accrued salary and
allowance arbitrarily withheld from him.
 Since his letters were unanswered he wrote to the newly appointed vice-president for
administration about the glaring inequality in the salaries and allowances of the bank's
assistant vice-presidents.
 That while he was the most senior of them all, he was receiving an annual salary of
P27,000 while the four other assistant vice-presidents were each receiving P42,000,
P54,000, P60,000 and P72,000
March 15, 1983 the bank's board of directors met and approved
 The necessary streamlining of operations
 Bank officers at the Head Office and the Branches with corporate rank of Manager and
higher be required to submit courtesy resignations
Batongbacal did not submit his resignation
 However he received a letter accepting his resignation April 1983
 He wrote another letter requesting a reconsideration of the board of director's decision
accepting his resignation.
o He stated therein that the courtesy resignations was only for erring
"loathsome" officers and not those like him who had served the bank honestly
and sincerely for sixteen years
o Although he was a stockholder with the smallest investment in the bank, he
had called the attention of higher officers on matters that are of vital
importance to the bank's financial stability
o Should there be evidence of any act of dishonesty on his part, the bank should
so inform him so that he could accordingly submit his voluntary resignation.
He was not paid his usual salary since May 1983
 Nevertheless, he made repeated requests for the reconsideration of the bank's decision
to terminate his employment but was ignored
He filed a complaint for illegal dismissal
LA, upheld his arguments
 ordered to reinstate complainant to his former post with full backwages and other fringe
benefits until actually reinstated;
 Pay salary differential
NLRC, ruled in favor of the legality of Batongbacal’s dismissal from employment.
ISSUE: WON Batongbacal was validly dismissed
HELD:
NO
The banks went through financial reverses since 1981 due to the Dewey Dee Scandal
 It was able to redeem itself when Development bank and Central bank supplied them
with capital and loan
 To "streamline" its operation, the new management of the bank called upon all its
employees to submit their courtesy resignations and considered all executive positions
vacant.
o Those who submitted their resignation was allowed to re-apply while those
who did not submit such letters were terminated from employment for their
alleged deliberate refusal to cooperate in its rehabilitation.
While it may be said that the private respondent's call for courtesy resignations was prompted by
its determination to survive, we cannot lend legality to the manner by which it pursued its goal.
 By directing its employees to submit letters of courtesy resignation, the bank in effect
forced upon its employees an act which they themselves should voluntarily do.
 Resignation per se means voluntary relinquishment of a position or office.
 Adding the word "courtesy" did not change the essence of resignation.
Courtesy resignation did not give bank the right to use it as well in its own reorganization and
rehabilitation plan.
 There is no guarantee that all employers will not use it to rid themselves arbitrarily of
employees they do not like, in the guise of "streamlining" its organization
 Employees would be unduly exposed to outright termination of employment
It appears from the pleadings that terminated petitioner's employment for insubordination in view
of his failure to comply with the order to submit his letter of courtesy resignation.
 However, insubordination may not be imputed to one who refused to follow an
unlawful order.
Bank asserts that Batongbacal’s refusal to submit his letter of courtesy resignation was "sufficient
reason to distrust him
Loss of confidence as a ground for dismissal must be supported by satisfactory evidence.
 The record fails to show any valid reasons for terminating the employment of
Batongbacal
 No proofs of malfeasance or misfeasance committed by petitioner which jeopardized
private respondent's interest.
However he is not entitled to an award of the difference between his actual salary and that received
by the assistant vice-president who had been given the salary next higher to his.
 There is a semblance of discrimination in this aspect of the bank's organizational set-up
but we are not prepared to preempt the employer's prerogative to grant salary increases
to its employees.
 The claim of the bank that it needed to streamline its operation was belied by the amount
of salaries it was giving its other assistant vice-presidents.
Batongbacal is a rank and file employee
 He was not vested with any of the powers and prerogatives of a managerial employee
 His appointment paper states he would "assist" the vice-president in the performance
of his job.
o Said function implies that he was not actually a policy-determining
employee but one who had to wait for assignments from his superior
 JUMUAD V HI FLYER FOOD
GR NO 187887
FACTS:
Hi-Flyer is a corporation licensed to operate Kentucky Fried Chicken (KFC)
 Florentina Jumad was employed as management trainee
 Based on her performance, she received several promotions and became area
manager for entire Visayas and Mindanao
She was tasked to be:
1) be highly visible in the restaurants under her jurisdictionw;
2) monitor and support day-to-day operations; and
3) ensure that all the facilities and equipment at the restaurant were properly maintained and
serviced
 Branches under her supervision were Gaisano, Coco mall and Island City mall KFC
Jumuad was allowed to avail of Hi-Flyer’s car loan program
 Forty (40%) percent of the total loanable amount would be subsidized by Hi-Flyer and
the remaining sixty (60%) percent would be deducted from her salary.
 In the event that she would resign or would be terminated prior to the payment in full of
the said car loan, she could opt to surrender the car to Hi-Flyer
 Jumuad gained distinction and was awarded the 3rd top area manager nationwide. She
was rewarded with a trip to Singapore for her excellent performance
In Oct 2004, Hi Flyer conducted a food safety, service and sanitation audit at KFC-Gaisano
 It revealed several sanitation violations, such as the presence of rodents and the use of
a defective chiller for the storage of food.
 When she was asked to explain:
o She alleged that she had already taken steps to prevent the further infestation
of the branch
o As to why the branch became infested with rodents, Jumuad faulted
management’s decision to terminate the services of the branch’s pest control
program and rely solely on the pest control program of the mall.
o As to the chiller, she explained that it was under repair at the time of the
CHAMPS Executive Review
June of 2005, Hi-Flyer audited the accounts of KFC-Bohol amid reports that certain employees
were covering up cash shortages.
 Jumuad disclaimed any fault in the incident by pointing out that she was the one
responsible for the discovery of this irregularity
Hi-Flyer conducted another CER, this time at its KFC-Cocomall branch.
 Grout and leaks at the branch’s kitchen wall, dried up spills from the marinator, as well
as a live rat under postmix, and signs of rodent gnawing/infestation were found.
o Jumuad explained to management that she had been busy conducting
management team meetings at the other KFC branches and that, at the date
the CER
Seeking to hold Jumuad accountable
 Hi-Flyer sent Jumuad an Irregularities Report and Notice of Charges
 Jumuad submitted her written explanation.
 Hi-Flyer held an administrative hearing where Jumuad appeared with counsel.
o Not satisfied with her explanations, Hi-Flyer served her a Notice of Dismissal
Jumuad then filed a complaint for illegal dismissal
LA, found that Jumuad was not completely blameless for the anomalies discovered
 Thus, the dismissal was too harsh considering the circumstances and found that she
was illegally dismissed
NLRC, affirmed the decision of LA
 Before the Irregularities Report and Notice of Charges were given to Jumuad
 (2) electronic mails (e-mails) between Montemayor and officers of Hi-Flyer showed that
Hi-Flyer was already determined to terminate Jumuad.
 These e-mails were proof that Jumuad was denied due process considering that no
matter how she would refute the charges hurled against her, the decision of Hi-Flyer to
terminate her would not change.
CA, reversed the decision of NLRC
 The requirements of substantive and procedural due process were complied with
affording Jumuad an opportunity to be heard first, when she submitted her written
explanation and was informed of the basis of her termination
 The e-mail exchanges were mere discussions between Montemayor and other officers
of Hi-Flyer
On issue of trust and confidence: considered the deplorable sanitary conditions and the cash
shortages uncovered at three of the seven KFC branches supervised by Jumuad as enough bases
for Hi-Flyer to lose its trust and confidence in her.
ISSUE: WON Jumuad is validly dismissed
HELD:
YES
Jumuad was terminated for neglect of duty and breach of trust and confidence.
Gross negligence connotes want or absence of or failure to exercise slight care or diligence, or
the entire absence of care.
Fraud and willful neglect of duties imply bad faith of the employee in failing to perform his job,
to the detriment of the employer and the latter’s business.
Habitual neglect, implies repeated failure to perform one's duties for a period of time, depending
upon the circumstances
Breach of trust and confidence, as a just cause for termination of employment, is premised on
the fact that the employee concerned holds a position of trust and confidence, where greater trust
is placed by management and from whom greater fidelity to duty is correspondingly expected.
Finding of guilt or innocence in a charge of gross and habitual neglect of duty does not preclude
the finding of guilty or innocence in a charge of breach of trust and confidence
 To warrant removal from service for gross and habitual neglect of duty, it must be shown
that the negligence should not merely be gross, but also habitual.
Jumuad cannot be dismissed on the ground of gross and habitual neglect of duty.
 She had dutifully done all that was expected of her to ensure the safety of the consuming
public who continue to patronize the KFC branches under her jurisdiction.
 Her acts or lack of action in the performance of her duties is not born of habit.
However, it cannot be denied that Jumuad willfully breached her duties as to be unworthy of the
trust and confidence of Hi-Flyer.
(1) There is no denying that Jumuad was a managerial employee
a. Jumuad executed management policies and had the power to discipline the
employees of KFC branches in her area
The CER’s reports of Hi-Flyer show that there were anomalies committed in the branches
managed by Jumuad.
 On the principle of respondeat superior or command responsibility alone, Jumuad may
be held liable for negligence in the performance of her managerial duties.

She may not have been directly involved in causing the cash shortages in KFC-Bohol, but
her involvement in not performing her duty monitoring and supporting the day to day
operations of the branches and ensure that all the facilities and equipment at the restaurant
were properly maintained and serviced, could have truly prevented the whole debacle from
ever occurring.

 Rather than taking proactive steps to prevent the anomalies at her branches, Jumuad
merely effected remedial measures.
 In the restaurant business where the health and well-being of the consuming public is
at stake, this does not suffice

Thus, there is reasonable ground to dismiss her

There is ample evidence that Jumuad indeed committed acts justifying loss of trust and confidence
of Hi-Flyer, and eventually, which resulted to her dismissal from service.
 Mismanagement and negligence in supervising the effective operation of KFC branches
in the span of less than a year,
o resulting in the closure of KFC-Gaisano due to deplorable sanitary
conditions,
o cash shortages in KFC-Bohol, in which the said branch, at the time of
discovery, was only several months into operation, and
o poor sanitation at KFC-Cocomall.

 (3) out of the seven (7) branches under her area were neglected cannot be glossed over
by her explanation

As the employer, Hi-Flyer has the right to regulate, according to its discretion and best judgment,
all aspects of employment, including work assignment, working methods, processes to be
followed, working regulations, transfer of employees, work supervision, lay-off of workers and the
discipline, dismissal and recall of workers.
 Hi-Flyer exercised in good faith its management prerogative as there is no dispute that
it has lost trust and confidence in her and her managerial abilities, to its damage and
prejudice. Her dismissal, was therefore, justified.
 GUSTILO V WYETH PHIL
440 SCRA 667
FACTS:
 Gustilo was employed by Wyeth as pharmaceutical territory manager. He was placed
in charge of its various branches in Metro Bacolod City and Negros Occidental.
 To ensure a profitable sale of its pharmaceutical products, he performed various
functions,
o such as visiting hospitals, pharmacies, drugstores and physicians concerned
o preparing and submitting his pre-dated itinerary;
o and submitting periodic reports of his daily call visits, monthly itinerary, and
weekly locator and incurred expenses
Records show that Wyeth on various dates, reprimanded and suspended him for habitually
neglecting to submit his periodic reports.
 Submitting late his weekly expense report.
 He did not submit his daily call reports for the period from November 20 to 24, 1995
 Wyeth sent Gustilo another notice suspending him for fifteen (15) days or from January
2 to 22, 1996.
After integrating its pharmaceutical products with Lederle, a sister company, conducted a
nationwide on-the-job training of sales personnel.
 Gustilo was assigned in charge of promoting four (4) Lederle pharmaceutical products.
 Gustilo submitted to respondent company a plan of action,
o he committed to make an average of 18 daily calls to physicians
o submit promptly all periodic reports
o ensure 95% territory program performance for every cycle.
However, Gustilo failed to achieve the said objectives
 Prompting respondent company to send him two (2) separate notices charging him with
willful violation of company rules and regulations and directing him to submit a written
explanation.
In his explanation
 Stated that he was overworked and an object of reprisal by his immediate supervisor.
Upon recommendation of a Review Panel, Gustilo was dismissed
Gustlo filed illegal suspension, illegal dismissal and payment of allowances, other monetary
benefits.
LA, held that he was illegally dismissed from employment
ISSUE: WON Gustilo was validly dismissed
HELD:
YES
Records show the various violations of company’s rules and regulations committed by Gustilo
 His dismissal from the service is, therefore, in order.
Piedad vs. Lanao del Norte Electric Cooperative, Inc.,we ruled that a series of irregularities when
put together may constitute serious misconduct, which under Article 282 of the Labor Code, as
amended, is a just cause for dismissal.
As to his entitlement to separation pay:
PLDT vs. NLRC and Abucay, we held:
"x x x henceforth, separation pay shall be allowed as a measure of social justice only in those
instances where the employee is validly dismissed for causes other than serious misconduct or
those reflecting on his moral character. Where the reason for the valid dismissal is, x x x an offense
involving moral turpitude x x x, the employer may not be required to give the dismissed employee
separation pay, or financial assistance, or whatever other name it is called, on the ground of social
justice."
In the case at bar, we find no exceptional circumstances to warrant the grant of financial
assistance or separation pay to petitioner.
 Gustilo did not only violate company disciplinary rules and regulations
 He falsified his employment application form by not stating therein that he is the nephew
of Mr. Danao, respondent Wyeth’s Nutritional Territory Manager.
 He was suspended for falsifying a gasoline receipt.
 He was warned for submitting a false report of his trade outlet calls.
 He was found guilty of unauthorized availment of sick, vacation and emergency leaves.
These infractions manifest his slack of moral principle. In simple term, he is dishonest.
Neither can petitioner find reliance on the policy of social justice. As aptly held by this Court in the
same case of Philippine Long Distance Telephone vs. NLRC and Abucay,10 "[T]hose who invoke
social justice may do so only if their hands are clean and their motives blameless x x x." Here,
petitioner failed to measure up to such requirement.
Gustilo was legally dismissed from employment and is, therefore, not entitled to reinstatement or
an award of separation pay or other benefits.

NLRC, affirmed the decision of LA

CA, reversed the decision dismissing his complaint but awarded separation pay considering the
mitigating "factors" of length of service, the loyalty awards he received, and respondent Verzano’s
"grudge" against him.
 Gustilo cannot deny the numerous violations of company rules during his employment
with Wyeth.
 It has become clear that respondent Gustilo is a habitual offender whose numerous
contraventions of company rules has left Wyeth with no choice but to terminate him
based on Article 282 of the Labor Code.
o gross and habitual neglect by the employee of his duties, being a valid cause
for termination.
o While dismissal is proper, the Court however considers the length of service
of respondent Gustilo with Wyeth, the loyalty awards he received and the
grudge of petitioner Verzano, Jr. as mitigating factors.