CASE DIGEST: BCU v. Gallente

G.R. No. 188267 : December 2, 2013




Petitioner Baguio Central University (BCU) hired Gallente as an instructor. The BCU subsequently promoted and appointed Gallente as Dean of the BCUs Colleges of Arts and Sciences and Public Administration.

Gallente, using the name "Genesis Gallente," along with six other incorporators, organized the GRC Review and Language Center, Inc. (GRC).The primary purpose as listed in its Articles of Incorporation (AOI) is "to conduct review classes for teachers, nursing, engineering and other professional and technical for Board Licensure examinations and Civil Service Professional examination," and its secondary purpose as "to conduct tutorial and proficiency trainings for foreign languages." This AOI also listed the BCU as the GRCs primary address. The BCUs President, Dr. Margarita Fernandez, subsequently called Gallentes attention regarding the establishment of the GRC and his use of the BCU as the GRCs address and of the BCUs resources. The BCUs officers conducted grievance meetings with Gallente to allow him to explain his side. Thereafter, Gallente tendered his resignation by letter.

Gallente filed before the LA a complaint for illegal (constructive) dismissal, non-payment of vacation and sick leave pay for 2005, tax refund for the same year and attorneys fees.

The LA found that Gallente was illegally dismissed since the resignation entered was not voluntary. The BCUs bases for the loss-of-trust-and-confidence charge did not sufficiently justify Gallentes dismissal. Hence, it ordered the BCU and Fernandez to pay Gallente separation pay, backwages, 13th month pay, vacation and sick leave pay, service incentive leave benefits, tax refund for the year 2005 and attorneys fees.

The NLRC partially granted the appeal BCU finding justifiable grounds for the BCUs loss of trust and confidence that rendered Gallentes dismissal valid. Accordingly, the NLRC reversed the LAs illegal dismissal findings and deleted the award of backwages and separation pay. Gallente moved to reconsider this NLRC ruling, which the NLRC denied.

The CA reversed the NLRCs ruling and reinstated the LAs decision. The CA significantly affirmed the LAs findings on the insufficiency of the BCUs bases for the loss-of-trust charge. Additionally, the CA pointed out that at the time Gallente organized the GRC, the BCUs Review Center did not yet exist; also, the GRC did not successfully operate because it failed to comply with certain legal requirements. The CA submitted that even if it were to assume that Gallente committed a breach, this breach was ordinary and was not sufficient to warrant his dismissal; to be a legally sufficient basis, the employees breach must be willful and intentional. Since the BCU failed to prove willful breach of trust, the CA declared Gallentes dismissal to be invalid.

On appeal, BCU argues that it validly dismissed Gallente for willful breach of trust and confidence. It points out that as Dean and, therefore, as a managerial employee, Gallente owed utmost fidelity to it as an educational institution and to its business interests. The Case for the Respondent

In his comment, Gallente maintains that he was illegally dismissed as the ground on which the BCU relied for his dismissal had no basis. Procedurally, he argues that the present petitions issues and arguments are factual and are not allowed in a Rule 45 petition. Moreover, the BCUs arguments fail to show that the CA gravely abused its discretion to warrant the CA decisions reversal.


Whether or not wilful breach of trust and confidence was present to warrant the dismissal of Gallente.

Whether the CA correctly found the NLRC in grave abuse of discretion in ruling that the BCU validly dismissed Gallente on this ground.

HELD: The decision of the CA is reversed, reinstating the NLRC decision.

LABOR LAW loss of trust and confidence

Thus, for an employees dismissal to be valid, the employer must meet these basic requirements of: (1) just or authorized cause (which constitutes the substantive aspect of a valid dismissal); and (2) observance of due process (the procedural aspect).

1. Substantive aspect; dismissal based on loss of trust and confidence

Loss of trust and confidence is a just cause for dismissal under Article 282(c) of the Labor Code.

However, in order for the employer to properly invoke this ground, the employer must satisfy two conditions.

First, the employer must show that the employee concerned holds a position of trust and confidence. Jurisprudence provides for two classes of positions of trust. The first class consists of managerial employees, or those who by the nature of their position, are entrusted with confidential and delicate matters and from whom greater fidelity to duty is correspondingly expected.

Second, the employer must establish the existence of an act justifying the loss of trust and confidence. To be a valid cause for dismissal, the act that betrays the employers trust must be real, i.e., founded on clearly established facts,and the employees breach of the trust must be willful, i.e., it was done intentionally, knowingly and purposely, without justifiable excuse.

Gallente was a managerial employee as the duties as Dean involved the exercise of powers and prerogatives equivalent to managerial actions described above. Gallente, in short, clearly held a position of trust and confidence consistent with the first legal requirement.

As Dean, Gallente was responsible for the over-all administration of his departments. This responsibility includes ensuring that his departments curriculum and program of study, to be adopted by the BCU, are up to date, relevant and reflective of the scholastic requirements for the respective fields. And, to say the least, this curriculum and program of study should be sufficient so that students would pass the requisite government examination, even without enrolling in any review course. This responsibility also involves formulating the educational policies in his departments as well as enforcing the BCUs policies, rules and regulations on subject loads, subject sequence and subject pre-requisites and on admission and registration of students.

Gallente appropriated for his and the GRCs benefit the BCUs property when he did not secure prior authority in using the BCU as the GRCs primary address in the AOI and in posting the GRCs streamer advertisement outside the BCUs main gate. What is worse, by these acts, Gallente represented to the public that the GRC is a BCU-sponsored venture, which clearly it was not. In our view, these acts showed dishonesty and negates Gallentes claim of good faith.

Thus, applying these outlined legal parameters to the present case, we find sufficient basis to dismiss Gallente for loss of trust and confidence.

REMEDIAL LAW certiorari

In reviewing the legal correctness of the CA decision in a labor case taken under Rule 65, we examine the CA decision based on how it determined the presence or absence of grave abuse of discretion in the NLRC decision before it and not on the basis of whether the NLRC decision on the merits of the case was correct. Montoya v. Transmed Manila Corporation, G.R. No. 183329, August 27, 2009

In other words, we have to be keenly aware that the CA undertook a Rule 65 review, not a review on appeal, of the NLRC decision challenged before it. Moreover, the Courts power in a Rule 45 petition limits us to a review of questions of law raised against the assailed CA decision.

In this petition, the BCU essentially asks the question whether, under the circumstances and the presented evidence, the termination of Gallentes employment was valid. As framed, therefore, the question before us is a proscribed factual issue that we cannot generally consider in this Rule 45 petition, except to the extent necessary to determine whether the CA correctly found the NLRC in grave abuse of its discretion in considering and appreciating this factual issue.

Thus, from the perspective of this Rule 45 petition, the CAs findings on the matter of the BCUs loss-of-trust charge clearly lacked factual and legal basis; hence the CAs ruling must fall.

The LA, the NLRC and the CA in this case unanimously declared that Gallente did not voluntarily resign and that the BCU failed to observe the due process requirements as outlined above. We agree and we will not disturb their findings on this point. We, therefore, find proper the NLRCs award ofP30,000.00 as nominal damages in accordance with this Courts ruling in Agabon v. NLRC 485 Phil. 248.

The petition is granted.