CASE TITLE: China Banking Corporation v.

Borromeo

FACTS OF THE CASE: Respondent Borromeo, while working at petitioner Bank,

approved several Draw Against Uncollected Deposits/Bills Purchased (DAUD/BP)
checks amounting to P2.4 million in favor of a Joel Manawin without authority
from the Executive Committee or Board of Directors. Furthermore, the checks
exceeded the limit granted to clients. Under petitioner Bank’s standard operating
procedures, DAUD/BP may only be granted if expressly authorized by its Executive
Committee or Board of Directors. Respondent tendered his resignation
subsequently, but was later informed by petitioner Bank’s Vice-President of HR
that his separation pay of P836,637 will be withheld until the sums demanded
from Manawin in another civil case was recovered. Respondent then filed a
complaint for payment of separation pay, and argued that the accommodations
were implicitly approved by superior, citing regular reports made to the latter but
respondent was never reprimanded.

ISSUE: Whether or not respondent violated petitioner Bank’s standard operating

procedure, may therefore be subject to forfeiture of benefits

RULING: Yes, he violated the Bank’s standard operating procedure. Both LA and
NLRC found that in a memorandum by his superior asking him for clarification
with regard to the checks issued, respondent himself admitted that, among other
things, he did not follow and comply with the operating procedure that required
DAUD/BP checks must be verified with the drawee bank. Furthermore, he stated
therein that he accepted full responsibility for “committing an error in judgment,
lapses in control and abuse of discretion by relying solely on word, assurance,
surety of Mr. Ramos.” The Court also found petitioner Bank’s Code of Ethics,
which states that forfeiture of benefits may be imposed on an employee for
infraction of the bank’s standard operating procedure, not grossly oppressive nor
contrary to law and hence binding and valid on the parties.

DOCTRINE: Company policies and regulations are generally binding and valid on
the parties and must be complied with unless shown to be grossly oppressive or
contrary to law.