RUBY C. DEL ROSARIO, PETITIONER, VS. CW MARKETING & DEVELOPMENT CORPORATION/KENNETH TUNG, RESPONDENTS.

Del Rosario versus CW Marketing and Development Corporation

The Case

This is a labor case about a supervisor dismissed after falsified company documents were traced to the computer assigned to her. Ruby Del Rosario, a Sales Supervisor at CW Marketing and Development Corporation, filed a complaint for illegal dismissal against the company and its officer Kenneth Tung after she was terminated for negligence and unauthorized use of company property. The case matters because it draws the boundary between personal participation in a wrongdoing and the accountability that attaches to a position of trust: an employee need not have falsified anything herself to be validly dismissed for loss of trust and confidence.

Procedural History

The Labor Arbiter ruled in favor of Del Rosario, found that the company failed to prove she directly falsified the documents, declared her dismissal illegal, and ordered backwages and separation pay in lieu of reinstatement, while denying her other money claims for lack of particulars. Both sides appealed to the National Labor Relations Commission. The Commission reversed the Labor Arbiter and held that the company validly dismissed her for loss of trust and confidence. Del Rosario then filed a petition for certiorari under Rule 65 before the Court of Appeals, alleging grave abuse of discretion. The Court of Appeals affirmed the Commission, finding no grave abuse of discretion. Del Rosario elevated the matter to the Supreme Court by petition for review on certiorari under Rule 45.

Facts

Since 2007, Del Rosario worked for CW Marketing, first as Sales Consultant and later as Sales Supervisor at its Home Depot, Balintawak Branch. As supervisor, she was assigned a computer connected to a shared network and to a printer and scanner. She alone was taught by the company's information technology personnel to operate the machine, although the network allowed others to print through it.

In October 2010, the Hongkong and Shanghai Banking Corporation reported that several credit card applicants had submitted apparently falsified payslips and identification cards purportedly issued by the Balintawak Branch, showing higher positions and salaries. The company's information technology department investigated and traced the documents to Del Rosario's computer. A Notice to Explain dated November 4, 2010 required her to answer within 48 hours. She replied by email the next day, denying participation but admitting that her subordinates used her computer and scanner. A second Notice to Explain dated November 9, 2010 charged her with negligence and misuse of company property and with allowing unauthorized persons to use company equipment. She answered again on November 10, 2010, explaining that she was not the sole user of the scanner and that she could not monitor everyone.

On November 18, 2010, she attended the administrative inquiry and admitted that the computer was her accountability, that any transaction or item found in it was her responsibility, that she alone was given access to the scanner, and that she allowed the consultants and coordinators to use her computer even when she was absent. On November 30, 2010, the company found her liable for violations of its Employee Handbook and terminated her employment.

Issues

• Whether or not Del Rosario was validly dismissed for loss of trust and confidence despite the absence of proof that she personally falsified the documents.
• Whether or not the Court of Appeals correctly found no grave abuse of discretion in the Commission's reversal of the Labor Arbiter's ruling.

Applicable Provisions

Article 282, now Article 297, of the Labor Code provides:

An employer may terminate an employment for any of the following causes: (a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work; (b) Gross and habitual neglect by the employee of his duties; (c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative; (d) Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representatives; and (e) Other causes analogous to the foregoing.

Subparagraph (c) is the provision the Court applies, because it makes willful breach of the trust reposed by the employer a just cause for dismissal.

Ruling

On the first issue, the Court held that the dismissal was valid. Two requisites must concur for a valid dismissal: the dismissal must be for a cause expressed in Article 282, now Article 297, of the Labor Code, and the employee must be given an opportunity to be heard and to defend herself. Both are present. Del Rosario held a fiduciary position as Sales Supervisor, entrusted with the custody, handling, or care and protection of company property, and she was given every chance to explain. The Court stressed that the charge against her was not the crime of falsification but the totality of her acts as supervisor, including her negligence and want of care for company property. Her own admissions supplied the proof: she knew her subordinates were editing and falsifying payslips and identification cards on her computer, she knew these were sent to the bank, and she kept silent until the investigation pointed to her machine. The Court quoted with favor the ruling in Etcuban versus Sulpicio Lines that whether the employer was financially prejudiced is immaterial, and that what matters is the fraudulent scheme constituting a clear betrayal of trust. It also held that loss of trust must rest on solid grounds and be based on a willful breach founded on clearly established facts, and that the employer bears the burden of first convincingly establishing those bases. Here, the company discharged that burden through Del Rosario's own statements.

On the second issue, the Court found no grave abuse of discretion. The findings of the Commission and the Court of Appeals that she held a position of trust and that her negligence was established by substantial evidence were uniform and supported by the record, so the Court declined to reverse them.

Doctrine

Loss of trust and confidence is a just cause for dismissal under Article 282, now Article 297, of the Labor Code where the employee holds a position of trust and confidence or is entrusted with the custody, handling, or care and protection of the employer's property. The employer bears the burden of first convincingly establishing valid bases for the loss of trust, and the breach must be willful, meaning done intentionally, knowingly, and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly, or inadvertently. In the case of supervisors and personnel occupying positions of responsibility, loss of trust justifies termination. The employer need not prove that the employee personally committed the fraudulent act; what matters is the fraudulent scheme and the employee's blameworthy act or omission, not the amount of financial prejudice. When an employee accepts a position requiring full trust and confidence, she gives up some of the rigid guarantees available to an ordinary worker.

Disposition

The Supreme Court denied the petition and affirmed the Decision of the Court of Appeals, with no pronouncement as to costs; Del Rosario lost and her dismissal for loss of trust and confidence stood.

Remember This

Memorize this line: the charge is not falsification but the totality of the supervisor's acts, including negligence and want of care for company property held in trust. Examiners use this case to test loss of trust and confidence as a just cause, the willful breach standard, and the rule that financial prejudice need not be proven.