RODRIGO L. PILOTON, PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION (NLRC) 5TH DIVISION, CAGAYAN DE ORO CITY AND VICMAR DEVELOPMENT CORP. AND/OR ROBERT W. KUA, PRESIDENT, RE…
FRANCISCO, J.:
The Facts
The petitioner, Rodrigo L. Piloton, was first hired by respondent Vicmar Development Corporation (Vicmar) as a temporary employee on 11 August 1980 as a Production Monitor Clerk. Eventually, the petitioner became a regular employee. On 1 August 1986, the petitioner was appointed as the SSS/Benefits Clerk. The petitioner’s duties and responsibilities were outlined in a Memorandum[4] dated 1 August 1986 as follows:
- Preparation of necessary papers for registration of new employees with the Social Security System [(SSS)].
- Computation of SSS/Sickness benefit of employees and prepeares request of same to SSS office for reimbursement.
- Prepare SSS monthly report.
- Prepare SSS quarterly collection list.
- Maintains/controls records of paid/unpaid SSS and other pertinent papers.
- Submits to Cash Section the names of employees who loan (Salary, Educational or Housing) at SSS for direct deduction against salary as per schedule.
- Other related duties that may be assigned to from time to time.
Over the course of his employment as the SSS/Benefits clerk, the petitioner also performed the task of remitting the loan payments of his co-workers to SSS after such amounts were deducted by the company cashier from the employees’ salaries.
The company cashier, the late Erlinda Dequito, died on 11 August 2008. Before releasing Dequito’s benefits to her heirs, the Accounting Department of respondent Vicmar conducted an audit of the cashier’s cash transactions. It was then discovered that there was a shortage in the remittance of the SSS loan payments.
When respondent Vicmar confronted the petitioner on the matter, the latter denied having participated in the taking of the missing funds nor having knowledge of such anomaly.
On 5 September 2008, respondent Vicmar sent the petitioner a Memo[5] stating as follows:
After a thorough investigation of top management, it was found out and established that you committed lapses in the performance of your job. This resulted in unaccounted monetary losses of SSS salary loan payments of company workers.
For this reason, you are hereby advised by management to turn over your duties, responsibilities and records to designated company staff during the next two days.
Management is hereby advising you to take a force[d] leave of 10 working days beginning Sept. 8, 2008 while we are weighing our options on your employment.
On 16 September 2008, respondent Vicmar issued another Memo[6] extending the preventive suspension of the petitioner while an investigation was being conducted by management.
On 24 September 2008, the audit team of respondent Vicmar submitted its report stating that a total of Php 607,174.40 of collected salary loan payments were unremitted.
On 2 October 2008, a conference was conducted whereby the petitioner was informed of the results of the investigation.
Thereafter, on 6 October 2008, respondent Vicmar issued a Memo[7] informing the petitioner of its decision to terminate him from the company on the grounds of negligence as well as loss of trust and confidence.
On 10 October 2008, the petitioner filed the present complaint for illegal dismissal against respondent Vicmar.
After both parties presented their respective pieces of evidence, the Labor Arbiter rendered a Decision, dated 30 July 2009, declaring herein petitioner to have been illegally dismissed by respondent Vicmar. The dispositive portion of the Labor Arbiter’s decision states:
WHEREFORE, foregoing premises considered, a judgment is hereby rendered declaring complainant Rodrigo L. Piloton to have been illegally dismissed from employment and thus ordering respondent Vicmar Development Corporation to pay complainant Piloton his backwages and separation pay, including attorney’s fees, in the aggregate amount of P437,756.48.[8]
Aggrieved with the Labor Arbiter’s ruling, the private respondents filed an appeal before the NLRC.
On 27 November 2009, the NLRC issued the assailed Resolution dismissing the petitioner’s complaint for illegal dismissal. The petitioner filed a Motion for Reconsideration but the same was denied by the NLRC in a Resolution[9] dated 21 January 2010.
Hence, the petitioner filed the present petition for certiorari raising the following arguments:
I.
PROCEDURAL
A.
PUBLIC RESPONDENT GRAVELY ABUSED ITS DISCRETION AMOUNTING TO EXCESS OF JURISDICTION BY ENTERTAINING THE APPEAL OF PRIVATE RESPONDENTS, PROCEDURAL REQUIREMENTS NOT SATISFIED.
II.
SUBSTANTIVE
A.
PUBLIC RESPONDENT GRAVELY ABUSED ITS DISCREATION AMOUNTING TO EXCESS OF JURISDICTION IN MAKING THE DISMISSAL OF PETITIONER LEGAL, BUT WITHOUT JUST CAUSE
1.
GROSS NEGLIGENCE AND LOST (sic) OF TRUST AND CONFIDENCE ARE NOT VALID GROUNDS TO DISMISS PETITIONER
2.
PETITIONER WAS A REGULAR EMPLOYEE, BUT A MERE RANK-AND-FILE
B.
PUBLIC RESPONDENT GRAVELY ABUSED ITS DISCRETION AMOUNTING TO EXCESS OF ITS JURISDICTION BY MAKING PETITIONER’S DISMISSAL LEGAL EVEN IF DUE PROCESS IS (sic) NOT AFFORDED TO PETITIONER WITH HIS DISMISSAL FROM HIS EMPLOYMENT
1.
TWO-NOTICE REQUIREMENT WAS NOT SATISFIED
2.
PETITIONER WAS NOT GIVEN WITH (sic) OPPORTUNITY TO BE HEARD
C.
PUBLIC RESPONDENT GRAVELY ABUSED ITS DISCRETION BY NOT RULING ON THE REINSTATEMENT OF THE PETITIONER, OR PAID WITH SEPARATION PAY, RETIREMENT BENEFITS, AND SHOULD BE AWARDED HIS BACKWAGES AND [OTHER] ACCRUED BENEFITS PROVIDED UNDER THE CBA, LABOR LAWS, RULES AND REGULATIONS[10]
Our Ruling
We shall first resolve the procedural issues raised by the petitioner.
The petitioner argues that the NLRC committed grave abuse of discretion when it entertained the appeal of respondent Vicmar considering that the surety bond is short of the amount required by law. The petitioner points out that the ruling of the Labor Arbiter provides for an award of Php 397,960.44[11] in favor of the petitioner. On the other hand, the Surety Bond[12] posted by respondent Vicmar only amounted to Php 393,980.83.
Under Rule VI, Section 6[13] of the NLRC Rules of Procedure, the appeal bond must be in an amount equivalent to the monetary award, exclusive of damages and attorney’s fees.
However, the Supreme Court has held that the bond requirement on appeals may be relaxed when there is substantial compliance with the NLRC Rules of Procedure or when the appellant shows willingness to post a partial bond.[14]
In the case at bar, respondent Vicmar substantially complied with the rules when it timely posed an appeal bond. Moreover, We find that the deficit of only Php 3,979.61 is simply not enough ground for the dismissal of respondent Vicmar’s appeal.
The petitioner also alleges that the surety company, Pioneer Insurance and Surety Corporation (Pioneer), was not duly authorized by the Supreme Court at the time of respondent Vicmar’s appeal before the NLRC. The same is likewise unmeritorious.
Respondent Vicmar has duly shown that Pioneer was issued a Certificate of Accreditation[15] last 26 August 2009 valid until 31 January 2010. Thus, it is clear that Pioneer was duly accredited by the Supreme Court at the time respondent Vicmar filed its appeal before the NLRC.
We shall now proceed with the substantive arguments raised by the petitioner.
In illegal dismissal cases, the employer must comply with both procedural and substantive due process in order to justify the dismissal of the employee. The Supreme Court has defined procedural and substantive due process to wit:
For a worker’s dismissal to be considered valid, it must comply with both procedural and substantive due process. The legality of the manner of dismissal constitutes procedural due process, while the legality of the act of dismissal constitutes substantive due process.
Procedural due process in dismissal cases consists of the twin requirements of notice and hearing. The employer must furnish the employee with two written notices before the termination of employment can be affected: (1) the first notice apprises the employee of the particular acts or omissions for which his dismissal is sought; and (2) the second notice informs the employee of the employer’s decision to dismiss him. Before the issuance of the second notice, the requirement of a hearing must be complied with by giving the worker an opportunity to be heard. It is not necessary that an actual hearing be conducted.
Substantive due process, on the other hand, required that dismissal by the employer be made under a just or authorized cause under Articles 282 to 284 of the Labor Code.[16]
The private respondents anchor their dismissal of the petitioner on the grounds of gross negligence as well as loss of trust and confidence.
The NLRC ruled that respondent Vicmar was justified in terminating the services of the petitioner on the ground of gross negligence. According to the NLRC, the petitioner’s inaction regarding the irregularities in the remittance of SSS loan payments showed his lack of care or diligence for the safety of the property of respondent Vicmar.
We agree with the NLRC.
Gross negligence as a ground for validly dismissing an employee has been defined by the Supreme Court to wit:
Gross negligence connotes want or absence of or failure to exercise even slight care or diligence, or the total absence of care. It evinces a thoughtless disregard of consequences without exerting any effort to avoid them. To warrant removal from service, the negligence should not merely be gross, but also habitual. A single or isolated act of negligence does not constitute a just cause for the dismissal of the employee.
In JGB and Associates, Inc. v. National Labor Relations Commission, the Court further declared that gross negligence connotes want of care in the performance of one’s duties. Habitual neglect implies repeated failure to perform one’s duties for a period of time, depending upon the circumstances. 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.[17]
In his attempt to evade any liability, the petitioner argues that his duties were limited to the physical holding and remitting of the SSS loan payments. This argument is bereft of merit.
As cited by the petitioner, the procedure for the payment of SSS loans was outlined by the private respondents in their Appeal Memorandum before the NLRC as follows:
“It should be recalled that the respondent has established a mechanism, with the consent of the workers, concerning the SSS application and payment of loans. In said set-up, the loan payments of the workers are deducted by the cashier directly from their net pay. The cashier then deducted from the net pay of the employees their SSS loan payments. After which, the Accounting Department prepares a collection list, which enumerates the names of the employees and the corresponding amount deducted from their salary as loan payment for remittance to the SSS. The list is given to the complainant, who would thereafter, prepare a pre[-]printed [form] for SSS loan payment to be signed by the authorized person. After the pre[-]printed [form] for SSS loan payment is duly signed, he would give it to the cashier to collect the amount for remittance to the SSS as indicated in the form. The cashier, after examining that the form is sufficiently prepared, would give to the Complainant the amount indicated in the form. The Complainant would then give the amount to the SSS, together with a diskette, that he prepared containing a list similar to the collection list. The SSS will then issue Special [B]ank Receipts (SBR) as proof of payment, showing the amount remitted thereto and the corresponding month for which the payment was posted by the Complainant presumably containing the same data with the collection list prepared by the Accounting Department of Respondent, [which] is used by the SSS as guide in the posting of the amount remitted thereto in the employees’ individual statement of account. In this regard, several anomalies have occurred. Be it noted that the foregoing set-up and practice was never denied by complainant in his position paper.[18]
This procedure is attested to by Charito D. Jacutin, Feliciana P. Cabarliza, and Susan Barros in their affidavits.[19]
However, the petitioner claims that the remittance of the SSS loan payments was not part of his regular duties and that he did so only at the request of the company cashier, the late Erlinda Dequito. According to the petitioner, it was the cashier’s task to remit the loan payments to SSS. Thus, the petitioner argues that he was a mere “helper” of the cashier and the Accounting Department.
The petitioner is mistaken.
First of all, it is important to note that several employees of respondent Vicmar attested to the fact it was the petitioner who regularly remitted the loan payments to SSS. Secondly, We are not convinced that it is actually the company cashier and not the SSS/benefits clerk who is tasked to remit the loan payments to SSS.
Further, contrary to the stand of the petitioner, it is clear that the petitioner’s tasks as SSS/benefits clerk did not merely involve the physical delivery of the loan payments to SSS. The procedure as outlined above clearly shows that the petitioner knew or ought to have known the exact amount to be remitted. The petitioner could easily determine whether the amount given by the cashier for remittance corresponded with the amount stated in the collection list. As the SSS benefits clerk, it was the duty of the petitioner to ensure that the SSS loan payments of his co-workers are duly remitted to SSS.
As shown by the audit report, a total of Php 607,174.40 of the collected loan payments were unaccounted for. This huge disparity in the remittance clearly shows that the petitioner committed gross negligence in the performance of his duties. Further, the fact that this irregularity in the remittance had spanned over several years shows that the petitioner repeatedly failed to perform his duties.
We also agree with the NLRC in finding that respondent Vicmar validly dismissed the petitioner on the ground of loss of trust and confidence.
To justify a dismissal on the ground of loss of trust and confidence, two (2) requisites must be present. The first requisite is that the employee concerned must be one holding a position of trust and confidence.[20] In the case of Bristol Myers Squibb (Phils.), Inc. v. Baban, the Supreme Court defined the two (2) classes of positions of trust:
There are two (2) classes of positions of trust. The first class consists of managerial employees. They are defined as those vested with the powers or prerogatives to lay down management policies and to hire, transfer suspend, lay-off, recall, discharge, assign or discipline employees or effectively recommend such managerial actions. The second class consists of cashiers, auditors, property custodians, etc. They are defined as those who in the normal and routine exercise of their functions, regularly handle significant amounts of money or property.[21]
In the case at bar, petitioner Rodrigo Piloton belongs to the second class of positions of trust. It is already established that the petitioner regularly performed the task of remitting the SSS loan payments of his co-workers. Whether this was part of his regular duties and responsibilities is immaterial. It cannot be denied that for so many years, the petitioner regularly handled significant amounts of money in the routine exercise of his functions.
The second requisite is that there must be an act that would justify such loss of trust and confidence.[22] The loss of trust and confidence must be based on a willful breach of trust and founded on clearly established facts.[23]
In this case, We find that petitioner’s failure to account for the missing SSS loan payments justifies his dismissal on the ground of loss of trust and confidence. The NLRC correctly held:
In the present case, the complainant failed to account and explain the missing SSS loan payment collections in the aggregate amount of P607,171.40. He had the duty to prepare the SSS monthly report and the diskette containing the collection list that served as guide for the SSS when it posted the amount paid in the corresponding employee’s statement of account. He also kept the documents and records of paid and unpaid SSS loans. By what the complainant omitted to do, respondent corporation had enough reason or basis to lose the trust and confidence it reposed upon him as it had reasonable ground to believe that the complainant had somehow participated in the loss of the SSS loan payment collections. Thus, respondent corporation is justified in dismissing the complainant from his work due to just cause of loss of trust and confidence under Article 282(c) of the Labor Code.[24]
However, We find that the petitioner was denied his right to procedural due process.
As discussed above, the employer must furnish the employee with the two (2) written notices in order to render the dismissal valid. Regarding the two-notice rule, the Supreme Court has said:
The first written notice to be served on the employees should contain the specific causes or grounds for termination against them, and a directive that the employees are given the opportunity to submit their written explanation within a reasonable period. “Reasonable opportunity” under the Omnibus Rules means every kind of assistance that management must accord to the employees to enable them to prepare adequately for their defense. This should be construed as a period of at least five (5) calendar days from receipt of the notice to give the employees an opportunity to study the accusation against them, consult a union official or lawyer, gather data and evidence, and decide on the defenses they will raise against the complaint. Moreover, in order to enable the employees to intelligently prepare their explanation and defenses, the notice should contain a detailed narration of the facts and circumstances that will serve as basis for the charge against the employees. A general description of the charge will not suffice. Lastly, the notice should specifically mention which company rules, if any, were violated and/or which among the grounds under Article 282 is being charged against the employees.[25]
In the present case, the Memo[26] dated 5 September 2008 merely stated in general that the petitioner committed lapses in the performance of his job which resulted in unaccounted monetary losses of SSS salary loan payments of company workers. In the same Memo, the respondent company advised the petitioner to take a forced leave of ten (10) working days. Another Memo,[27] dated 16 September 2008, informed the petitioner that the company was extending his forced leave and that the company was still conducting an investigation regarding the case. Then, in a Memo[28] dated 25 September 2008, respondent Vicmar informed the petitioner to be present at the plant on 26 September 2008 in connection with the company’s investigation. These notices fall short of the requirements of the two-notice rule.
Having found that the petitioner was dismissed for a just cause but in violation of his right to procedural due process, respondent Vicmar must pay the petitioner nominal damages of Php 30,000.00 in consonance with the Supreme Court’s ruling in the case of Agabon v. NLRC.[29]
WHEREFORE, premises considered, the instant petition is hereby DENIED. The assailed Resoclution dated 27 November 2009 issued by the National Labor Relations Commission, 5th Division, Cagayan de Oro City is hereby MODIFIED in that the respondent, Vicmar Development Corp. is ORDERED to pay the petitioner, Rodrigo L. Piloton, the amount of Php 30,000.00 as nominal damages.
SO ORDERED.
CERTIFICATION
Pursuant to Article VIII, Section 13 of the Constitution, it is hereby certified that the conclusions in the above decision were reached in consultation before the case was assigned to the writer of the opinion of the Court.
Borja, J., Ch., and Badelles, JJ., concur.
[1] Rollo, pp. 2-27.
[2] Rollo, pp. 44-49.
[3] Rollo, pp. 32-42.
[4] Rollo, p. 53.
[5] Rollo, p. 142.
[6] Rollo, p. 143.
[7] Rollo, p. 299.
[8] Rollo, p. 42.
[9] Rollo, p. 51.
[10] Rollo, pp. 11-12.
[11] Rollo, p. 41.
[12] Rollo, p. 59.
[13] Section 6. BOND – In case the decision of the Labor Arbiter or the Regional Director involves a monetary award, an appeal by the employer may be perfected only upon the posting of a bond, which shall either be in the form of cash deposit or surety bond equivalent in amount to the monetary award, exclusive of damages and attorney’s fees.
x x x
[14] Garcia, et al. v. KJ Commercial, G.R. No. 196830, 29 February 2012 citing Ong v. Court of Appeals, 482 Phil. 170 (2004).
[15] Rollo, p. 305.
[16] Skippers United Pacific, Inc. v. Doza, G.R. No. 175558, 8 February 2012.
[17] Chona Estacio and Leopoldo Manliclic v. Pampanga I Electric Cooperative, Inc., G.R. No. 183196, 19 August 2009.
[18] Rollo, pp. 15-16.
[19] Rollo, pp. 136-141.
[20] Bristol Myers Squibb (Phils.), Inc. v. Baban, G.R. No. 167449, 17 December 2008.
[21] Ibid.
[22] Ibid.
[23] Ibid.
[24] Rollo, pp. 47-48.
[25] Lima Land, Inc. v. Marlyn Cuevas, G.R. No. 169523, 16 June 2010.
[26] Rollo, p. 142.
[27] Rollo, p. 143.
[28] Rollo, p. 292.
[29] G.R. No. 158693, 17 November 2004.