VINCENT RIKER, PETITIONER, VS. HON. BLAS F. OPLE AND MAYON IMPERIAL HOTEL, RESPONDENTS.

Riker versus Ople

The Case

This is a petition for review on certiorari brought by Vincent Riker against the Minister of Labor, the Honorable Blas Ople, and the Mayon Imperial Hotel. Riker asks the Supreme Court to set aside the Minister's order affirming the Regional Director's dismissal of his complaint for illegal dismissal, unpaid wages, and other money claims. The case matters because it gathers into one decision the rules on loss of trust and confidence as a ground for dismissing a managerial employee, and on the requisites of a perfected contract of employment — consent above all.

Procedural History

Riker filed a complaint for illegal dismissal, unpaid wages, and other money claims with the Department of Labor, Regional Office Number Four. After amicable settlement failed, the Regional Director, Francisco Estrella, issued an order dismissing the complaint for lack of merit, finding that the employment contract Riker submitted bore no signature of the hotel and was therefore not perfected. Riker appealed to the Minister of Labor. The Minister, without ruling on the validity of the contract, held that the hotel did not violate it, that Riker was guilty of serious misconduct resulting in the employer's loss of confidence, and that he was entitled neither to salaries for the unexpired portion of the two-year contract nor to other money claims. The Minister affirmed the Regional Director's order. Riker then came to the Supreme Court by petition for review on certiorari, assigning grave abuse of discretion and error in the findings and in the ruling that the contract was not violated. The petition was given due course, the parties filed their comments, replies, and memoranda, and the case was submitted for decision.

Facts

In April 1976, Riker met Minister Baltazar Aquino, husband of the president of the Mayon Imperial Hotel, in a coffee shop at the Manila Hilton Hotel. The hotel needed a general manager, and Minister Aquino came to understand that Riker was an expert in the hotel industry. At the hotel's expense, Riker visited the hotel in Legaspi City, and on April 23, 1976, it was verbally agreed that the hotel would engage his services as general manager beginning May 1, 1976, on a four-month probationary basis. A proposed two-year contract, containing air fares for Riker and his family, free residential quarters with food and beverages, a monthly salary of 7,000 pesos net, and arrangements for the conversion of his visa, was considered; Riker signed it, but the hotel did not. He was nevertheless paid his salary in full at 7,000 pesos a month.

Hardly a month passed when the hotel began to notice that Riker could not be a good manager. He was lavish in entertaining guests at the hotel and would be drunk occasionally. On June 20, 1976, the hotel's employees wrote the Commission on Immigration complaining of his un-Filipino activities and attitudes. On August 20, 1976, the hotel's corporate secretary informed Riker that a working visa for him was not secured and that the change of status of his family was not obtained, advising him to leave on or before August 23, 1976.

Believing he was illegally dismissed, Riker filed his complaint on March 29, 1977. The Minister found that his bar and storeroom requisitions for beverages and food were way beyond what a manager should normally consume; that he uttered words belittling Filipinos and committed discriminating acts against them, even making a memo reserving a particular place in the hotel for him and other white men; that his requisitions for wines and other beverages for personal use from May 24 to August 20, 1976 amounted to 5,080 pesos and 40 centavos; and that on one occasion he withdrew 3,000 pesos for travel to Manila, where a bill sent to Secretary Aquino by the Hyatt Regency Manila was paid by the hotel in the amount of 2,856 pesos and 65 centavos.

Issues

• Whether or not Riker's dismissal from employment as general manager of the Mayon Imperial Hotel was with legal basis.
• Whether or not the alleged contract existed and was violated by the hotel so as to warrant the grant of damages and other money claims.

Applicable Provisions

Article 1319 of the Civil Code provides:

No contract shall arise unless the parties thereto have given their consent, and unless the object certain which is the subject matter of the contract and the cause of the obligation which is established are present.

The Court uses this provision to hold that the proposed employment contract, never signed by the hotel, lacked consent and was therefore not perfected.

Ruling

On the first issue, the Court held that the dismissal had legal basis. Riker was designated and actually managed the hotel from May 1, 1976 until August 20, 1976, and nothing in the record shows his functions were limited or restricted. By the very nature of his position, the employment relationship depended highly on the trust and confidence reposed in him by the employer, and loss of that trust meant the termination of his employment. The Court found no reason to disturb the Minister's factual findings, which were supported by substantial evidence: the excessive requisitions, the anti-Filipino behavior, and the withdrawals of hotel funds. It stressed that proof beyond reasonable doubt of the misconduct is not required; it is enough that there is some basis for it, or that the employer has reasonable ground to believe the employee is responsible and that his participation renders him unworthy of the trust and confidence demanded by his position. An employer cannot be compelled to continue in employment an employee guilty of acts inimical to its interests.

On the second issue, the Court held that there was no breach of contract because there was no perfected contract to breach. The proposed employment contract was not signed by the hotel and so lacked consent, the first essential requisite of every contract under Article 1319 of the Civil Code. This lack of consent lent credence to the hotel's claim that its verbal agreement with Riker was on a four-month probationary basis, to be finalized only if the hotel was satisfied with his services after the probationary period. As to unpaid wages, the Regional Director found that Riker was paid in full at 7,000 pesos a month, as shown by his own testimony, and was reimbursed for his expenses from New York to Manila.

Doctrine

First, a managerial employee holds his position on the strength of the employer's trust and confidence; loss of that trust and confidence is a just ground for terminating his employment. Second, proof beyond reasonable doubt of the employee's misconduct is not required — it is sufficient that there is some basis for the loss of confidence, or that the employer has reasonable ground to believe that the employee is responsible for the misconduct and that his participation renders him unworthy of the trust and confidence demanded by his position. Third, an employer cannot be compelled to continue in employment an employee guilty of acts inimical to its interests. Fourth, no contract arises without the consent of the parties under Article 1319 of the Civil Code; an employment contract signed by the employee but never by the employer is not perfected, and cannot be the source of money claims for its unexpired term. Fifth, factual findings of the Minister of Labor supported by substantial evidence will not be disturbed on review.

Disposition

The petition was dismissed, and the orders of the Minister of Labor and the Regional Director were affirmed; the hotel prevailed.

Remember This

Memorize this line: for a managerial employee, loss of trust and confidence needs only some basis, not proof beyond reasonable doubt, and an unsigned employment contract lacks consent and is not perfected. Examiners use this case on the dismissal of managerial employees for loss of confidence and on consent as a requisite of contract under Article 1319 of the Civil Code.