G.R. No.

80502 May 7, 1990

ENRIQUE RAZON, JR. and METROPORT SERVICES, INC., petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and NICOLAS S.
GARZOTA, respondents.

Facts:

1. Nicola S Garzota is an accountant of Metroport Services, Inc. By

reason of old age and failing health, he applied for retirement.
However, an audit was conducted by employer company and found that
general ledger, cash disbursement book, cash receipt book, bill
registers and cash voucher.

2. By said reason, he was terminated through a memorandum by employer

company on the ground of loss of trust and confidence. Henc, employee
filed for Illegal Dismissal.

3. LA favored employee and ordered employer to pay retirement pay,

loyalty bonus and cash conversion of accrued vacation leave.

4. NLRC sustained LA’s decision.

5. Employer company averred that NLRC’s decision is misplaced since the

discovery of loss of vital books constitutes breach of trust. Grant of
retirement pay is within the discretion of company and such violation
justifies company to withheld retirement pay.

ISSUE: WoN company’s act of denying retirement pay and dismissal in its
discretion is justified in lieu with the alleged breach of trust by
employee?

HELD:

True that discretion is vested to management to grant or not to grant

retirement pay. However, such discretion is not absolute or
unlimited. Management discretion must not be exercised arbitrarily or
capriciously.

The alleged loss of confidence based on loss of certain books is not

based on any conducted investigation or notice whatsoever. Thus, the
resulting dismissal of employee was in itself marked by arbitrariness
and lack of due process. Company cannot now be allowed to use that as
their legal excuse for denying the employee's legitimate claim for
retirement pay.

Hence, dismissal of employee is invalid and denial of retirement pay is

unfounded.