ALLIED BANKING CORPORATION, PETITIONER, VS. RICARDO C. CASTRO, CECILIO T. SENO, FEDERICO O. BORROMEO, IN THEIR CAPACITY AS COMMISSIONERS OF NATIONAL LABOR RELATIONS COMMISSION (…

Private respondents Divina Rana and Diana Suratos were bank
tellers of petitioner Allied Banking Corporation’s branch office at Cagayan de Oro City.

Divina Rana
started her employment as teller with General Banking Corporation on July 30, 1976.  When this bank’s management and operation
were assumed by Allied Bank, Rana was absorbed into
the work force on May 26, 1977
in Metro Manila.  In April 1981, she was
transferred to the Cagayan
de Oro Branch.

Diana Suratos was hired as a
probationary employee of the petitioner bank on March 16, 1979 and became a regular employee in April
1980.

On November 11, 1982,
both were terminated from employment after the petitioner bank conducted a
formal investigation and found them guilty of the following offenses:

“1) Incurring a series of shortages;

“2) Incurring a long string of overages;

“3) Violation
of procedures requiring verification of drawer’s signature and approval of
authorized officers prior to payment of checks presented for encashment over
the counter (copy of the procedure is marked as Annex “A”,
“A-1” and “A-2” hereof); and

“4)
Failure to observe instructions of
superiors to report to the Central Bank Cash Units.” (Rollo, pp. 95-96)

Rana and Suratos
filed a complaint for “illegal termination, reinstatement with backwages and damages” against Allied Bank with the
Regional Arbitration Branch No. X, Cagayan
de Oro City, National Labor Relations Commission,
Ministry of Labor and Employment.

After the parties submitted their respective position papers,
Executive Labor Arbiter Ildefonso G. Agbuya rendered a decision in favor of the
complainants.  The dispositive
portion of the decision reads:

“IN VIEW OF THE FOREGOING, Complainants Divina
Rana and Diana Suratos for
having committed above-mentioned and admitted infractions are hereby meted the
penalty of suspension from employment without pay equivalent to one month.  Respondent Allied Banking Corporation is
hereby ordered to reinstate immediately Complainants Rana
and Suratos to their former positions without loss of
seniority and pay their backwages and all appurtenant
privileges after serving the one month suspension period and overtime pay
rendered at three hours a day within the period covered as above-discussed.  Respondent Danilo
de la Cruz and Leonardo Agodon are absolved from any
liability because they merely acted as
Bank officers without bad faith.” (pp. 103-104, Rollo)

On appeal, the National
Labor Relations Commission modified the labor arbiter’s decision in a
Resolution as follows:

“WHEREFORE, the appealed Decision should be, as it is hereby,
modified as follows:

“IN VIEW OF THE FOREGOING, Complainants Divina
Rana and Diana Suratos for
having committed above-mentioned and admitted infractions are hereby meted the
penalty of suspension from employment without pay equivalent to a period of one
month from November 11 up to December
10, 1981,
inclusive.  Respondent Allied Banking
Corporation is hereby ordered to reinstate immediately complainants Rana and Suratos to their former
positions without loss of seniority rights and other privileges and to pay
their backwages from December 11, 1982 until their actual reinstatement.  x x
x.

“The award on overtime pay is hereby Set Aside.” (p.150, Rollo)

A motion for
reconsideration of the decision was denied.

The Bank filed this
original action for certiorari and prohibition with application for a
writ of preliminary injunction against the NLRC’s
resolution.  The petition was initially
dismissed in a minute resolution dated May 8, 1985.  A
motion for reconsideration was likewise denied in the resolution dated September
16, 1985.

Acting on the
manifestation and motion for reconsideration of the September 16, 1985 resolution, the Court’s Second Division
issued a resolution dated October 21, 1985, to wit:

“Considering the manifestation and motion for reconsideration
by counsel for petitioner dated October 2, 1985 praying that the resolution of
September 16, 1985 which denied the motion of counsel for petitioner for
reconsideration of the resolution of May 8, 1985 which dismissed the petition
for certiorari be reconsidered and petitioner’s said motion for
reconsideration be resolved after the
petitioner’s reply to private respondent’s comment and the public
respondent’s comment to the aforesaid motion for reconsideration have been
filed, the Court Resolved to require the respondents to file a REPLY to said
manifestation and motion for reconsideration within ten (10) days from
notice.” (p. 249, Rollo)

On May 14, 1986,
we issued another resolution to the effect that:

xxx       xxx       xxx

“Acting on the aforesaid manifestation and motion for reconsideration
by counsel for petitioner dated October 2, 1985, as well as the comments of the
private and public respondents thereon, the aforesaid reply by the Solicitor
General, and the rejoinder to said reply by counsel for petitioner, the Court Resolved:  (a) to SET ASIDE the resolutions of
May 8, 1985 dismissing the petition and September 16, 1985 denying the
petitioner’s motion for reconsideration of said resolution; (b) to give DUE
COURSE to the petition; and (c) to require the parties to file their respective
MEMORANDA within twenty (20) days from notice.” (p. 279, Rollo)

With the reorganization of the Court into three Divisions, this
case is now assigned to the Third Division.

It is not disputed that the private respondents committed the
infractions charged against them.  With
respect to Divina Rana, she
committed the following infractions as follows:

“A. Shortages

Dates Incurred

1.     
March 8,
1982

2.     
March
11, 1982

3.     
March
13, 1982

4.     
March
15, 1982

5.     
March
23, 1982

6.     
April
10, 1982

7.     
April
24, 1982

8.     
June 1,
1982

9.     
June
15, 1982

10. 
June
22, 1982

11. 
June
24, 1982

12. 
September
20, 1982

“B. Overages

Dates Incurred

1.     
March 1,
1982

2.     
March
17, 1982

3.     
May 11,
1982

4.     
June 3,
1982

“C. Allowing encashment of checks
over the counter without verification of the drawer’s signature
and without approval 
of authorized officers.

Date Committed

1.     
March 6,
1982

2.     
May 11,
1982

“D. Non-compliance with instruction
of superiors to report to Central Bank Cash
Units.

Date Committed

March 6, 1982″ (p.
40, Rollo).

With respect to Diana Suratos, the offenses she was charged with were committed
as follows:

“A. Shortages

Date Incurred

1.     
February
3, 1982

2.     
February
5, 1982

3.     
February
13, 1982

4.     
March 1,
1982

5.     
March 5,
1982

6.     
March
19, 1982

7.     
April
15, 1982

8.     
May 10,
1982

9.     
May 21,
1982

10. 
June 1,
1982

11. 
June
14, 1982

“B. Overages

Date Incurred

1.     
February
29, 1982

2.     
May 22,
1982

3.     
June 1,
1982

4.     
June
11, 1982

5.     
June
24, 1982

“C.
Allowing encashment of checks over the
counter without verification of drawer’s signature
and without approval of authorized officers.

Date Committed

1.    February
10, 1982

2.    March
8, 1982

3.     
March 8,
1982

4.     
March 9,
1982

5.     
March 9,
1982

“D.
Non-compliance with instruction of superiors
to report to Central Bank Cash Units.

Date Committed

March 6, 1982″ (Rollo,
pp. 40-41)

The issue is not the existence
or non-existence of the above infractions but on the proper penalty for these
violations.  The infractions are
admitted.

The National Labor Relations Commission ordered that the private
respondents only be suspended without pay equivalent to a period of one month
from November 11 up to December 10,
1981, inclusive.  The NLRC
justified its ruling by adopting the findings of the Labor Arbiter, to wit:

“x x x.  The
penalty of termination imposed to herein Complainant is not commensurate with
the infractions committed.  We believe
that at most Complainants should be suspended by way of punishment.  Why did we make such a conclusion?  We took into consideration the circumstances
surrounding the complainants’ employment in the year 1982 where most of their
infractions committed made basis of their termination.  Prior to 1982 there were four employees doing
tellering work with Respondent at Cagayan
de Oro Branch. 
Upon the resignation of the two above-mentioned employees only herein
Complainants were left to perform the duties as tellers with the same volume of
work, if not more, as handled before in 1981. 
Definitely with the two remaining tellers (herein Complainants) who
handled the tellering work in the bank there was a
change of pace, effort and efficiency in their performance which inevitably led
to the overages and shortages and the encashment of checks without following the usual procedure.  Complainants have to double their efforts in
the performance of duties as tellers to accommodate the same, but probably
more, transactions and clients of herein Respondent bank.  Why Respondent Bank failed to augment the
depleted number of tellers knowing that Bank transactions do not increase and
normally increase is beyond our comprehension. 
x x x.  What
was the result of a situation wherein there were only two tellers doing the tellering work normally for four subsequently to six would mean chances of committing
shortages and overages, rendering of overtime work and in some instances allow
checks to be encashed without following proper
procedures.  Complainants could not be
totally blamed and branded as inefficient and negligent, because of
contributing factors of being over burdened in the performance of their duties.  There is a limit to human endeavour
that once you reach the peak inevitably one is likely to commit slight error or
infraction similar to what has been incurred to by herein Complainants.

“We want to treat deeper the aspect of allowing encashment of
checks without the proper verification of drawer’s signature and without
signature of authorized bank officers. 
From the records it appears procedurally when a check is presented for
encashment to a teller, the teller refers the check to a signature verifier then it is given
to the bank officer for its signature that everything is in order and to be
returned to the teller for encashment. 
From the circumstances cited by Complainants in their position paper and
in their explanation during the investigation it was the duty of a signature
verifier, if there is one, to study the specimen of the drawer and gives it to
a bank officer for signature and before a check should be returned to the
teller everything presumably is in order. 
But in the case of Complainant Rana the checks
were returned to her even if there was no signature of authorized bank officer
likewise in the case of Complainant Suratos.  This is what happened to Complainants that
upon the return of the checks, which were supposedly verified and signed they
presumed were in order and because of the volume of transaction did not notice
that not all the procedures were followed the checks were encashed.  Why were the checks returned to the teller
despite lacking in certain requirements? 
The situation therefore again could not be possibly entirely complainants’
fault, but definitely they were negligent to a certain degree by force of
circumstances prevailing due to lack of sufficient personnel.  On the matter of Complainants’ failure to
report to the Central Bank Cash Unit for instruction this can again be
justified that due to the volume of work that they could not immediately leave
the bank without finishing all bank transactions required of them that when
they realized it the lecture being conducted by the Central Bank was already
finished.  x x x.  Finally, by way of evaluating whether overages
and shortages are to be considered as serious we took into consideration the
provision of the CBA particularly Section 3 – Tellers Allowance –

” ‘Each teller shall be given a
yearly allowance to Six Hundred Pesos (P600.00) from which shall be deducted
the shortages she may incur during the year. 
The balance of the allowance
after deduction of shortages shall be given to the teller; However if no
shortage is incurred, the full amount of the allowance shall be received by the
teller, and the same shall be paid not later than July 31, of each year.  (Article XIII)’ “

“This particular provision of the CBA
shows that among the hazards of the tellers is to incur shortages and overages
up to a certain limit and the same serves as an incentive to tellers who will
not incur shortages and overages the said allowance shall be given to the employee.  This very provision therefore is a clear indication that such infractions are allowable provided that it
should not go beyond the limit provided, but to reiterate for the last time the
shortages and overages were inevitable infractions of Complainants due to
volume of work they handled at that time.” (Rollo,
pp. 146-149)

What is the proper penalty for the private respondents who
admitted infractions while doing their jobs as bank tellers of the petitioner?

The petitioner contends that the repeated acts of misconduct
justified the private respondents’ dismissal and the forfeiture of their right
to security of tenure.  It argues that it
has the perfect right to dismiss its erring employees if only as a measure of
real protection against acts inimical to its interest.

A bank teller is entrusted with considerable sums of money.  This nature of a teller’s job is not only
obvious but we have emphasized it in a leading case on termination of
employer-employee relations. 
“Handling of bank funds is a serious matter.  The teller as trustee is expected to possess
a high degree of fidelity to trust.  A cardinal essential in that job is utmost diligence
and care in the handling of cash.  A
teller cannot afford to relax vigilance in the performance of his duties.”
(Galsim v. Philippine National Bank, 29 SCRA 293).

We have also ruled that:

“The relation of employer and employee, specially
where the employee has access to the employer’s property in the form of
articles and merchandise for sale, necessarily involves trust and
confidence.” (Dole Philippines, Inc. v.
National Labor Relations Commission, 123 SCRA 673 citing Phil. Education Co., Inc.
v. Union of Phil. Education Employees and CIR, 107 Phil. 1003)

The repeated and numerous
infractions committed by the private respondents in handling the monies
entrusted to them as tellers cannot be considered minor.  Taking into account the nature of a teller’s
job, the infractions are too numerous to be ignored or treated lightly.  In National Service Corporation
v. Leogardo, Jr. (130 SCRA 502),
we stated that:

xxx       xxx       xxx

“x x x The public and private
respondents considered these circumstances singly and separately and arrived at
the conclusion that they are not sufficient to justify private respondent’s
termination.  We should consider the
different acts of misconduct committed by the private respondent in their
totality and not independent from each
other.  Fitness for continued
employment cannot be compartmentalized into tight little cubicles of aspects of
character, conduct, and ability separate and independent of each other.  A series of irregularities when put together
may constitute serious misconduct, which under Article 283 of the Labor Code,
is a just cause for termination.” (at p. 509)

Anent the argument that
shortages and overages are part of the hazards of the trade and in fact
recognized under the Collective Bargaining Agreement, there is no showing that
the Bank and its employees agreed to consider as normal, infractions of such
proportions as the private respondents committed.  Respondent Divina Rana committed a total of 12 shortages from March 8, 1982
to September 20, 1982, five (5) of which were in the month of March 1982, and
four (4) overages from March 1, 1982 to June 3, 1982 while respondent Diana Suratos committed eleven (11) shortages from February 3,
1982 to June 14, 1982 and five (5) overages from February 29, 1982 to June 24, 1982.

We agree with the
petitioner that if it allows shortages, it would in effect be a willing tool in
promoting inefficiency and laxity among the people it entrusts with the
handling of depositors’ monies.  Upon
noticing that laxity is tolerated, employees would be tempted to take liberties
with funds which do not really belong to the bank but are merely deposited with
it.

There are other facts
overlooked by the National Labor Relations Commission which justify the
dismissal of the private respondents.  We
agree with the Solicitor General, to wit:

“It appears from the records that the incidents in question
were the ‘last of the straws that broke the camel’s back’ because prior to said
incidents, private respondents committed similar infractions, namely:

Respondent Divina Rana:

A. Shortages on:

1.     
August
7, 1981

2.     
October
7, 1981

3.     
May 12,
1981

4.     
September
30, 1981

B. Overages on

1.     
August
24, 1981

2.     
August
26, 1981

3.     
August
27, 1981

Respondent Diana Suratos:

A. Shortages:

1.     
August
12, 1981

2.     
November
16, 1981

3.     
November
21, 1981

B. Overages:

1.     
September
22, 1981

2.     
November
15, 1981

3.     
December
7, 1981

which petitioner’s
officers were considerate enough to forgive them.” (pp. 201-202; 210,
Records)

“The Labor Arbiter’s justification that private respondents should
be given leeway for their infractions because they could not cope up with the
volume of transactions, is not entirely supported by
evidence.  Sometime in April 1982, a
certain Marilyn Ambat was tasked to help private
respondents in their tellering work, most specially during peak days (tsn.
pp. 178-180, Records), thus volume of work could not have been the root cause
of the infractions.  Private respondent Divina Rana explaining why she
incurred shortages or overages pointed out that the same were ‘due to her
counting errors and that she couldn’t help
committing mistakes’.  The same holds
true for private respondent Diana Suratos as
indicated in her explanatory letters.” (Rollo, pp. 305-307).

Moreover, the private
respondents’ acts of allowing encashment of checks over the counter without
verification of the drawer’s signature and without approval of authorized
officers cannot be considered minor infractions.  The procedures in the encashment of checks
over the counter are adopted by banks for the protection of their depositors as
well as their own funds.  Hence, the
private respondent’s repeated negligent acts as regards this procedure
substantially affect the bank’s business and are inimical to the bank’s interest
and that of its depositors.

Considering these
findings, we sustain the petitioner’s view that the National Labor Relations
Commission committed a reversible error when it only meted out a penalty of one
month suspension instead of dismissal to the private respondents.  The repeated acts of misconduct and willful
breach of trust forfeited the respondents’ right to security of tenure.  (Phil. Long Distance Telephone v. National
Labor Relations Commission, 122 SCRA
618).  In the case of San Miguel Corporation v. National Labor Relations
Commission (115 SCRA 329), we said:

xxx       xxx       xxx

“x x x Under Article 283 of the Labor Code, an employer may
terminate an employee if the employee is guilty of serious misconduct and of
willful breach of trust.

” ‘An employer cannot legally be
compelled to continue with the employment of a person who admittedly was guilty
of misfeasance or malfesance towards his employer and
whose continuance in the service of the latter is patently inimical to his
interests.  The law, in protecting the
rights of the laborer, authorizes neither oppression nor self-destruction of
the employer.’ (Manila Trading & Supply Co. v. Zulueta, 69 Phil. 485, 486-487 and other cases.)”

In Galsim
v. Philippine National Bank (supra), we
stated that “(s)urely it
would be most unfair to compel the bank to continue employing Mrs. Galsim. 
Reinstatement under the circumstances is neither sound in reason nor
just in principle.  It is irreconcilable with
trust and confidence.  That confidence
has been lost.” (at pp. 302-303).

We note that the decision
has been partially executed.  By virtue
of a writ of execution dated May 29, 1985, the petitioner paid the amount of P82,940.00 which is equivalent to thirty months salaries of the
private respondents.  This payment
was however, conditioned upon the final outcome of this petition.  Thus, in their Manifestation dated June 24, 1985, submitted to the
National Labor Relations Commission Executive Labor Arbiter, Region 10, the
petitioner stated:

“COMES NOW, respondent bank, through undersigned counsel, and
to this Honorable Office, respectfully avers that:

“Conformably to the subsisting Writ of Execution issued in the
above-entitled case and dated 29 May 1985, but without prejudice to the prayers
made in respondents’ pending Motion to Quash dated 11 June 1985 and the urgent
Omnibus Motion and/or Opposition to Writ of Execution dated 19 June 1985, as
well as to the final outcome of the appeal interposed in the above-entitled
case which is now pending before the Honorable Supreme Court, respondent bank
hereby submits and delivers its Check No. 788793 in the amount of P82,940.00
bearing instant date, in trust and to be disposed of only after final
disposition/resolution of said pending case before the Supreme Court.” (Rollo, p. 251)

In his “Reply to Private Respondents’ Comment,” the
petitioner states that notwithstanding its manifestation, the Executive Labor
Arbiter issued an Order dated June 24,
1985 ordering the disbursing officer to encash
the check for delivery in favor of the private respondents as partial
settlement of the case.

The petitioner contends that it was forced to make such payment
because of the arbitrary and whimsical acts of the Labor Arbiter, the sheriff,
and the private respondents’ counsel. 
The respondents do not rebut these allegations.

The Solicitor General is the lawyer for the Government and its
various departments and instrumentalities. 
Nonetheless, he is correct in not sustaining the acts of public officials when they commit grave error
and he, instead, pleads justice for the private party.

There can be no question from the records that the private
respondents committed violations which, because of the nature of their jobs,
are appropriately penalized by dismissal. 
There is nothing, however, to prevent the employer from making, ex
gratia and on a voluntary basis, payments of
separation pay to the private respondents in amounts to which they would have
been entitled under happier
circumstances.  In that event, the
“advanced payment” erroneously ordered by the Labor Arbiter may be
set off against the respondents’ termination pay and only the balance, if any,
will have to be returned to the petitioner. 
This arrangement would be in keeping with the spirit of harmony and
compassion that workers and employers should show to one another.

WHEREFORE, the instant petition is GRANTED.  The questioned resolutions of the public
respondents are REVERSED and SET ASIDE. 
The private respondents are ordered to return to the petitioner the P82,940.00 deposited in trust but erroneously paid to them
without prejudice to any ex gratia payments which the petitioner may
voluntarily make as stated above.  A copy
of this decision is furnished the Secretary of Labor and Employment for
remedial measures against serious error or grave abuse of discretion similar to
that committed by the Labor Arbiter and the Sheriff in this case.

SO ORDERED.

Fernan (Chairman), Feliciano, Bidin, and Cortes, JJ., concur.