CASE DIGEST: Ancheta v. Destiny Financial (G.R. No. 179702; February 16, 2010)

CASE DIGEST: ROLANDO P. ANCHETA,Petitioner, v. DESTINY FINANCIAL PLANS, INC. and ARSENIO BARTOLOME, Respondents. G.R. No. 179702; February 16, 2010.

FACTS: Respondent Destiny Financial Plans, Inc., a pre-need insurance company, hired petitioner as Head of its Marketing Group, with a compensation package of (P90,000.00) a month.

A Marketing Committee meeting was called by respondent Arsenio Bartolome at the conference room of respondent company. Present at the meeting were petitioner, respondent Bartolome, various leaders of the marketing team, and the operations director of the company. During the meeting, respondent Bartolome made several announcements. However, to the surprise of petitioner, respondent Bartolome announced that petitioner was to resign from the respondent company.

Petitioner received a letter from respondent company, asking him to explain within forty-eight (48) hours why his services should not be terminated for loss of confidence in his ability to perform the functions of Marketing Director of the company. He explained his side however, the board of directors of respondent company terminated petitioners services on the ground of loss of confidence. Thus, prompted petitioner to file before the Labor Arbiter a complaint for illegal dismissal, with prayer for reinstatement, payment of full backwages, payment of 13th month pay, moral and exemplary damages, and attorneys fees, against respondent.

The Labor Arbiter held that the dismissal was illegal. On appeal, the NLRC, reversed the decision of the Labor Arbiter.

Petitioner filed a motion for reconsideration. However, the same was denied. Aggrieved, petitioner filed a petition for certiorari under Rule 65 of the Rules of Court before the CA. The CA rendered a Decision, affirming with modification the decision of the NLRC, private respondent Destiny is ordered to pay petitioner Ancheta the amount of P100,000.00 as nominal damages for non-compliance with statutory due process.

Both petitioner and respondents filed their respective motions for partial consideration. However, the motions of both parties were denied. Hence, the instant petition.
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ISSUE: Was petitioner's employment validly terminated because of loss of confidence?

HELD: The decision of the Court of Appeals is sustained with modification. Two requisites must concur in order that there be a valid dismissal from employment, namely:

[1] the dismissal must be for any of the causes expressed in Article 282 of the Labor Code; and
[2] the employee must be given an opportunity to be heard and to defend himself.
The doctrine of loss of confidence requires the concurrence of the following:

[1] loss of confidence should not be simulated;
[2] it should not be used as a subterfuge for causes which are improper, illegal, or unjustified;
[3] it may not be arbitrarily asserted in the face of overwhelming evidence to the contrary;
[4] it must be genuine, not a mere afterthought to justify an earlier action taken in bad faith; and
[5] the employee involved holds a position of trust and confidence.

Loss of confidence, as a just cause for termination of employment, is premised on the fact that the employee concerned holds a position of responsibility, trust and confidence. He must be invested with confidence on delicate matters, such as the custody, handling, care, and protection of the employer's property and/or funds. In order to constitute a just cause for dismissal, the act complained of must be "work-related" such as would show the employee concerned to be unfit to continue working for the employer. (Gonzales v. NLRC; G.R. No. 131653, March 26, 2001)

Petitioner was a managerial employee of respondent company, holding a highly sensitive position. Being the Head of the Marketing Group of respondent company, he was in charge, among others, of the over-all production and sales performance of the company. Thus, as aptly pointed out by the CA, his performance was practically the lifeblood of the corporation, because its earnings depended on the sales of the marketing group, which he used to head. The position held by petitioner required the highest degree of trust and confidence of his employer in the formers exercise of managerial discretion insofar as the conduct of the latter's business was concerned. Petitioners inability to perform the functions of his office to the satisfaction of his employer and the formers poor judgment as marketing head caused the company huge financial losses. If these were not timely addressed and corrected, the company could have collapsed, to the detriment of its policy holders, stockholders, employees, and the public in general.

The power to dismiss an employee is a recognized prerogative inherent in the employers right to freely manage and regulate his business. The dismissal of an employee, in a way, is a measure of self preservation. Perez v. Medical City General Hospital, G.R. No. 150198, March 6, 2006. In this case, as admitted by petitioner, he was hired because of his expertise in the pre-need industry. His competence and satisfactory performance as head of the marketing group assumed primordial importance for his continued employment in the company. His dismal performance was causing the company financial losses; thus, it was not wise for the company to continue his services. To be sure, an employer cannot be compelled to continue with the employment of workers when continued employment will prove inimical to the employers interest.
With regard to respondent company's compliance with procedural due process, we agree with the CA when it enunciated that:

Be that as it may, this Court finds that the private respondents did not strictly comply with the "two notice" requirement in dismissing petitioner Ancheta. While private respondents sent a show cause letter to petitioner Ancheta, the same letter precipitately implemented termination procedures, i.e., demanded the return of the Executive elevator key which allows petitioner Ancheta access to the office premises and the surrender of the company car assigned to him, even as petitioner Ancheta had yet to answer and air his side. Such betrays the fact that the said show cause letter was but a formality and petitioner Anchetas dismissal is a foregone conclusion. It is thus apparent that private respondents did not comply with the procedural requirements of due process in dismissing petitioner Ancheta.

Respondents failure to observe due process in the termination of employment of petitioner for a just cause does not invalidate the dismissal but makes respondent company liable for non-compliance with the procedural requirements of due process. The violation of petitioners right to statutory due process warrants the payment of nominal damages, the amount of which is addressed to the sound discretion of the court, taking into account the relevant circumstances. It is just proper to reduce the amount of nominal damages awarded to petitioner to (P30,000.00).
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