PILIPINAS BANK, PETITIONER, VS. HONORABLE NATIONAL LABOR RELATIONS COMMISSION AND NATALE JEMINA, RESPONDENTS.

At bar is a
petition for review on certiorari of the Resolution* of the
National Labor Relations Commission rendered
on April 24, 1990 in NLRC NCR Case No. 2-584-87 entitled “Natale B. Jemina
vs. Pilipinas Bank and/or Augusto E. Orosa” affirming the Labor Arbiters
Decision** finding private respondent’s dismissal as illegal
and ordering the payment of his backwages for one (1) year and separation or
severance pay equivalent to one (1) month’s salary for every year of service,
without qualification and deduction, in lieu of his reinstatement.

The facts, as culled from the pleadings, are as follows:

Private respondent Natale Jemina was the Assistant Branch Manager
of the Binondo Branch of petitioner Pilipinas Bank. Among his duties as such were the following:

a.     
custody over all cash and properties inside the vault;

b.     
bundle-counting of the cash-in-vault at the close of the
banking hours in the presence of the Manager or ano­ther bank employee (the
Manager’s designated substitute witness). In the absence of the Manager or the substitute, complainant had the authority
to designate another employee to counter-verify the amount of the
cash-in-vault;

c.     
signing of the Cash Proof Sheet af­ter the counting and
counter-verifi­cation of the Cash Proof Sheet by the Manager or the designated
subs­titute witness.^[1]

On November 18, 1988, petitioner Bank discovered a cash shortage
in the vault of its Binondo Branch in the amount of P100,000.00. Private respondent, as Assistant Branch
Manager or “official custodian of the vault”, together with the Bank
Manager, Roberto D. Ilagan, was implicated in the said shortage. After an investigation by the Bank regarding
the matter, both officers were dismissed on the grounds of violation of the
Bank’s Code of Offenses and loss of trust and confidence.

Both private respondent Natale Jemina and Bank Manager Roberto D.
Ilagan assailed their dismissal for being illegal in two separate complaints
filed before the Labor Arbiter. The
Labor Arbiter sustained the dismissal of Roberto D. Ilagan, while she declared Natale Jemina’s dismissal as illegal. From the latter decision, petitioner Bank appealed to the NLRC,
which affirmed the decision of the Labor Arbiter. Hence, this petition.

It is not disputed that private respondent was the Assistant
Manager of the Binondo Branch at the time of the shortage. On November 17,1986, the Branch Manager was
absent, and complainant took over the duties of the Branch Manager for that
day.

Petitioner Bank and private respondent, however, have conflicting
stories as regards the events
that led to the loss of P100,000.00 in the
vault of petitioner Bank’s Binondo Branch.

Petitioner Bank’s version of the incident is as follows:

As the Official Custodian of the vault, “complainant was gravely remiss in the performance of his duties in the light of the
following:

1. Complainant did not make a bundle?count
of the cash-in-vault at the close of banking hours on November 17, 1986, in the presence of the Manager’s designated
witness. In the absence of the Manager
or his designated substitute, complain­ant did not designate/assist the teller
to act as a witness to the counting;

2.    Complainant made no formal turnover of cash
accountabilities on November 17, 1986. This
notwith­standing the fact that he was to absent himself the following day;

3.    With the absence of a turnover, there was no
counter-verification of the cash-in-vault, a procedure required to be done
on a daily basis;

4.  Complainant does not dispute the fact that he
failed to follow the vital turn-over procedure of accountabilities on November
17, 1986;

5.  The Labor Arbiter’s Decision confirms the fact
of ‘non-turnover’”.^[2]

Private respondent Jemina, in his Comment,^[3]
asserted that he cannot be held liable for non-compliance with the Joint
Custodial requirement as prescribed under Section 1166.4 of the Central Bank
Manual of Regulations for Banks because of the following undisputed facts
disclosed during the full blown trial before the Labor Arbiter:

“On November 17, 1986 the Branch Manager went to the Hilton
Branch on official business and/or bank transaction. (Constancia, May 19, 1987) The complainant-Assistant Branch
Manager was left the official custody of the Cash-In-Vault charged with the
following duties:

a)           
Custody over all cash and properties inside the vault;

b)           
Bundle-Counting of the cash-in-vault at the close of banking
hours in the presence of the Manager’s designated substitute; and

c)           
Signing the Cash Proof Sheet after the counting and
counter-verifica­tion of the Cash Proof Sheet by the designated substitute witness.

Complainant (private respondent herein) started sorting the day’s
collection earlier than the usual time due to the announcement received from
the Head Office allowing the Branch’s employees to go home early because of
on-going strike of passenger’s (sic) jeeps and buses in Metro-Manila. In such sorting out, complainant was
assisted by the Current Account Bookkeeper and distributing clerk and at about
4:00 o’clock in the afternoon, the teller turned over to him all her remaining
cash holdings together with the supporting slips and tickets for verification
of all turn-overs made during that day which are also the basis of
Cash-In-Vault Daily Report. They found
the total cash balanced with the distributing clerk’s blotter. Then complainant put the remaining cash and
picos boxes inside the cash safe. Thereafter, complainant conducted bundle counts after sorting the cash,
in the presence of the Current Account Bookkeeper and distributing clerk, not
only once but several times until he was sure that his bundle count tallies
with the entries of the cash-in-vault report. Then he deposited all the cash inside the vault and his staff saw the
actual act of depositing all the cash sorted and bundle counted. Afterwards, he summoned the bank’s security
guard to witness the actual closing of the vault, record the time at the
guard’s log book and subjected himself to body search by the guard in
compliance with the bank’s policy.”^[4]

Private respondent also pointed out the fact that the
Cash-In-Vault Report for November 17, 1986 was duly verified by no less than
the Branch Manager, Mr. Roberto Ilagan on the following day, November 18,
1986. This meant that the amount
indicated in the Cash-In-Vault tallied with that of the actual cash he
deposited in the bank’s vault on November 17, 1986. The alleged shortage was discovered only at 11:00 o’clock in the
morning of the following day, or two hours after the bank opened for business
transactions. Significantly, private respondent was absent from work on that
particular day as he was assigned to attend a meeting at the Head Office.

The issue before Us is
whether in the light of the foregoing,
private respondent. Natale Jemina, was
gravely remiss in his duties, which
dereliction resulted in the Bank’s loss of P100,000.00. Or
stated differently, was private respondent grossly negligent in the performance of his duties
warranting thereby his dismissal?

We rule in the negative.

Petitioner Bank failed to present an iota of evidence directly
showing Jemina’s participation in the loss of P100,000.00. It was not even able to pinpoint the exact
date when the loss occurred. All it
tried to establish was that Jemina was negligent in the performance of his
duties in that he did not observe the joint custodial requirement of counter-verification
of the amount of the cash in the vault on November 17,1986, or the day before
the loss was discovered. And on this
basis, petitioner dismissed Jemina on the alleged grounds of loss of confidence
and violation of the Bank’s Code of Offenses.

But Jemina’s failure to counter-verify the cash in the vault was
sufficiently explained by him to be due to the Bank Manager’s absence on that
particular day. Left alone without the
Manager’s appointing a substitute in his behalf, and his co-employees rushing
to go home because of the on-going transportation strike, Jemina did the most
prudent thing under the circumstances by asking the Current Account Bookkeeper
and the distributing clerk to assist him in the sorting out of the cash in the
vault; by doing the bundle count in the latter’s presence and letting his staff
witness his depositing all the cash inside the vault. The actual closing of the vault was likewise witnessed by the
security guard on duty. Before leaving
the bank’s premises, Jemina subjected himself to body search by the guard.^[5]
All these disprove the presence of negligence.

We also note, with significance, the fact that the Bank Manager
himself verified the Cash-In-Vault Report of November 17, 1986 when the latter
reported for work the following day. The verification meant that the amount indicated in the Report tallied
with that of the actual cash private respondent deposited in the bank’s vault
the day before. Granting that there was
indeed a shortage of P100,000.00 despite such verification, the Bank Manager
was negligent. But as correctly
observed by the Labor Arbiter, Jemina cannot be made responsible for the
negligence of said Bank Manager. Res
inter alios acta.

We cannot also discount the significant fact that the shortage
was discovered only two hours, or at 11:00 o’clock in the morning, after the
bank opened for business transactions on November 18, 1986. Jemina was not in the office on that day as
he went direct to the Head Office to attend a meeting. Between the afternoon of November 17, 1986,
when Jemina deposited all the bank’s cash inside the vault, and November 18,
1986 at 11:00 o’clock in the morning, when the loss was discovered, there
existed a plethora of possibilities regarding the loss of the money inside the
vault. But we do not dwell on
possibilities, suspicion and speculation. We rule based on hard facts and solid evidence.

We have consistently held that loss of confidence is a recognized ground
for the discharge of an employee from employment.^[6] But
such ground must be founded on facts established by substantial evidence. The burden of establishing such facts as
reasonably cause loss of confidence in an employee – such facts as reasonably
generate belief by the employer that the employee was connected with some misconduct
and the nature of his participation therein is such as to render him unworthy
of trust and confidence demanded of his position – is on the employer.^[7]
In this case, the records are bereft of any showing that private respondent Jemina is responsible, solely or partly, for
the loss of the P100,000.00 in
the vault of petitioner Bank’s Binondo Branch. Both the Labor Arbiter and the NLRC analyzed the employer’s proofs and
came to the reasoned conclusion that they did not adequately demonstrate
Jemina’s connection with the said loss. True, Jemina is a possible suspect. After all, the cash operations of the branch were under his control and
supervision. He had joint custody with
the Branch Manager over all cash and properties inside the vault. He had access to the vault where the monies
of the bank were kept. Indeed,
petitioner Bank has every reason to suspect Jemina for the P100,000.00 shortage
in its vault. But suspicion has never
been a valid ground for the dismissal of an employee. The employee’s fate cannot, in justice, be hinged upon
conjectures and surmises.^[8]

The employer’s evidence, although not required to be of such
degree as is required in criminal cases, i.e., proof beyond reasonable doubt,
must be substantial. The same must
clearly and convincingly establish the facts upon which loss of confidence in
the employee may be made to rest.^[9] Here,
Jemina’s dismissal cannot justifiably be sustained since the findings in this
case, and the investigation made by the employer, failed to establish either
complicity or culpability on his part. There was nothing in the record to show who, as between the Bank Manager
and his Assistant, was responsible for the loss. While dishonesty or disloyalty of an employee is not to be
condoned, neither should a condemnation on that ground be tolerated based on
suspicion spawned by speculative inferences.^[10]

It is the avowed policy of the law^[11] to
protect labor. So that, unless based on
a ground provided by law and is supported by substantial evidence,
dismissal will be disallowed, for what is at stake is not only the employee’s
position, but also his means of livelihood.^[12]

Thus, there being no basis in law or in fact for Jemina’s
dismissal, We hereby affirm the order of the public respondent NLRC for the
payment to Jemina of his backwages starting from the period of his dismissal
but not to exceed three (3) years, without qualification and deduction; and
severance pay equivalent to one month’s salary for every year of service. This is the more equitable disposition than
reinstatement, considering the strained relations between Jemina and petitioner
Bank. This way, (Jemina) can be spared
the agony of having to work anew with the (petitioner Bank) under an atmosphere
of antipathy and antagonism, and the latter does not have to endure the
continued service of the former in whom it has lost confidence.^[13]

In the light of the foregoing, the Resolution of the NLRC
dated April 24, 1990 is affirmed subject to the above modification.

SO ORDERED.

Feliciano, (Acting
Chairman) Regalado, and Nocon, JJ., concur.

Narvasa, C.J.,
(Chairman), on official leave.

* Penned by Romeo B. Putong,
Commissioner.

** Decision, “Natale B.
Jemina vs. Pilipinas Bank and/or Augusto E. Orosa”, NLRC NCR Case
No. 2-584-87, January 31, 1989, Nieves B. de Castro, Labor Arbiter.

^[1]
This procedure is prescribed under Section 1166.4 of the Central Bank
“Manual of Regulations for Banks and Other Financial Intermediaries”
which provides:

1166.4 Joint Custody

a. Joint Custody shall mean the
processing of transactions in the presence of and under the direct observation
of a second person. Both persons shall
be equally accountable for the physical protection of the items and records
involved.

x x x

^[2]
Rollo, pp. 11-12.

^[3]
Rollo, pp. 104-107.

^[4]
Decision, “Natale B. Jemina vs. Pilipinas Bank and/or Augusto E. Orosa”, NCRC NCR Case No. 2-584-87
January 31, 1989, Nieves V. de Castro, Labor Arbiter; Rollo, pp. 70-71.

^[5]
Decision, id.

^[6]
Commercial Motors Corporation vs. Commissioners, NLRC, 192 SCRA 191
(1990); Hernandez vs. NLRC,
176 SCRA 269 (1989); Mercury Drug Corporation vs. NLRC, 177 SCRA 580 (1989); Dole Phils., Inc. vs. NLRC, 123 SCRA 673 (1983).

^[7]
Commercial Motors Corporation vs. Commissioners, id.

^[8]
San Miguel Corporation vs. NLRC, 180 SCRA 281 (1989).

^[9]
Starlite Plastic Industrial Corporation vs. NLRC, 171 SCRA 315
(1989); General Bank and Trust Company vs. CA, 135 SCRA 569 (1985) cited
in Commercial Motors Corporation vs. Commissioner, supra,
note 6.

^[10]
San Miguel Corporation vs. NLRC, supra, note 8.

^[11]
1987 Philippine Constitution.

Section 18, Article II. The State affirms labor as a primary social
economic force. It shall protect the
rights of workers and promote
their welfare.

Section 3, Article III. The State shall afford full protection to
labor.

^[12]
Euro-Linea Phils., Inc. vs. NLRC, 156 SCRA 78 (1987).

^[13]
Citytrust Finance Corporation vs. NLRC,
157 SCRA 87 (1988) cited
in Quezon Electric Cooperative vs. NLRC, 172 SCRA 88, 97-98 (1989).