MANILA ELECTRIC COMPANY, PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION AND JIMMY MEGINO, RESPONDENTS.

Manila Electric Company versus National Labor Relations Commission and Jimmy Megino

The Case

This is a petition for certiorari and prohibition brought by the Manila Electric Company, commonly called Meralco, against the National Labor Relations Commission and its former teller Jimmy Megino. Meralco asks the Supreme Court to set aside the Commission's ruling that Megino was illegally dismissed and to restore the finding of the Labor Arbiter that his dismissal was for cause. The case matters because it draws the working boundary of the worker's constitutional right to security of tenure: an employer entrusted with money may dismiss a teller who betrays that trust, and it need not prove the betrayal beyond reasonable doubt.

Procedural History

Megino filed a complaint for illegal dismissal against Meralco before the labor arbiter. Labor Arbiter Quintin Mendoza dismissed the complaint for lack of merit, holding that Megino had been given every opportunity to defend himself and that the company had just cause to withdraw its trust and confidence. Megino appealed to the National Labor Relations Commission, which reversed the Labor Arbiter. The Commission held that there was no factual and legal basis for the dismissal, ordered Megino's reinstatement without loss of seniority rights, awarded three years of backwages without deduction, and directed payment of salaries and benefits for the period of preventive suspension beyond thirty days. The Commission denied Meralco's motion for reconsideration. Meralco then came to the Supreme Court on a petition for certiorari and prohibition, alleging grave abuse of discretion amounting to lack of jurisdiction.

Facts

Jimmy Megino worked as a teller at Meralco's San Pedro Branch Office in Laguna. His job was to collect electric bill payments from customers and to remit them to the company before the end of each day.

On December 2, 1985, Meralco placed him under preventive suspension pending an administrative investigation into unremitted collections of 1,864.89 pesos as of September 10, 1985, and delayed or withheld remittances totaling 3,763.51 pesos. On December 14, 1985, assisted by a union representative, Megino appeared at the investigation. He admitted collecting both sums but blamed his failure to remit on Myle Calayag, a former bill collector of the same branch who had earlier been dismissed for dishonesty. He was found guilty as charged and dismissed on February 12, 1986.

On April 10, 1986, Calayag came forward and admitted that he was responsible for the anomalies imputed to Megino. He explained that when he taped Megino's stubs he replaced some of them with his own, and that he inserted old stubs in place of new ones so they would not appear outstanding, causing delays of a month or more. On April 28, 1986, Meralco's audit team rendered a final audit report showing that over the years Megino had in fact misappropriated a total of 63,967.15 pesos. On July 16, 1986, Meralco denied his request for reconsideration, holding that he violated the company's Code of Employee Discipline by misappropriating or withholding company funds, a penalty of dismissal. He filed his complaint for illegal dismissal on July 23, 1986.

Issues

• Whether or not Megino's infractions of the company's Code of Discipline were sufficient grounds for terminating his employment for loss of confidence or breach of trust.
• Whether or not Calayag's admission that he authored the misappropriation relieved Megino, as custodian of the funds, of liability for the defalcation.
• Whether or not the National Labor Relations Commission committed grave abuse of discretion in reversing the Labor Arbiter and holding that Megino was illegally dismissed.

Applicable Provisions

Article 282 of the Labor Code provides:

Article 282. Termination by employer. An employer may terminate an employment for any of the following just causes: (a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work; (c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative.

This is the provision under which Meralco justified the dismissal, and the Court measures Megino's conduct against its just causes, particularly fraud and willful breach of trust.

Ruling

The Court found merit in the petition. On the first issue, it held that Megino's acts of dishonesty justified the company's loss of trust and confidence and his consequent discharge. He occupied a very sensitive position requiring a high degree of honesty and trustworthiness. On the second issue, the Court held that Calayag's admission did not relieve Megino of liability, for it was Megino, not Calayag, who was accountable for the funds. The Court found that Megino connived and conspired with Calayag to steal his collections, with Calayag preparing the collection lists and validation tapes that enabled Megino to secrete the funds in his possession. On the third issue, the Court held that the Commission gravely abused its discretion, because for loss of trust and confidence to be a just cause, proof beyond reasonable doubt is not required. It is enough that there be some basis for the loss of trust, 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 demanded of his position. The Court stressed that the worker's right to security of tenure is not absolute, for the law provides that he may be dismissed for cause, and that the law, in protecting the rights of laborers, authorizes neither oppression nor self-destruction of the employer.

Doctrine

Where an employee occupies a position of trust and confidence, as where he is entrusted with the custody, handling, or care and protection of the employer's property, acts tending to show unworthiness may constitute a just cause for dismissal for loss of trust and confidence under Article 282 of the Labor Code. For loss of trust and confidence to be a valid cause, proof beyond reasonable doubt of the employee's commission of irregularities is not needed; it is sufficient that there be some basis for the loss of trust, 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 of his position. The right to security of tenure is not absolute, and an erring employee forfeits it by acts of dishonesty prejudicial to the interests of his employer.

Disposition

The Court reversed and set aside the decision of the National Labor Relations Commission and reinstated the decision of the Labor Arbiter granting Meralco clearance to terminate Megino's employment, with costs against Megino.

Remember This

Memorize this line: for dismissal based on loss of trust and confidence, proof beyond reasonable doubt is not required; some basis or reasonable ground to believe the employee is responsible is enough. Examiners use this case to test the limits of security of tenure and the dismissal of employees holding positions of trust, especially tellers and custodians of company funds.