Case Digest: BPI & BPI Family Bank v. NLRC & Arambulo

G.R. No. 179801: June 18, 2010




Respondent (Ma. Rosario Arambulo) was initially employed as Clerk in 1972 at Citytrust Banking Corporation, which eventually merged with BPI. She later became Lead Teller, then as Sales Manager, and subsequently, as Bank Manager in BPI-San Pablo, Laguna Branch in 1996.

On 2001, respondent was reprimanded for the improper handling and retention of a client's account. She was transferred to BPI Family Bank in Los Bas, Laguna.

On 2002, a client of BPI-San Pablo, Laguna Branch requested for a certification of her savings account. Her balance reflected an amount less than the actual amount deposited. Hence, BPI conducted an investigation and discovered that its bank teller, Azucena was making unauthorized withdrawals. A show cause memorandum was served to Azucena asking her to explain the unauthorized withdrawals. In her written response, Azucena implicated respondent and added that the same practice was continued by her son, Artie Arambulo.

BPI conducted a thorough investigation and discovered that respondent had approved several withdrawals from various accounts of clients whose signatures were forged.

A hearing was conducted on 2 September 2002 to give respondent opportunity to present additional explanation. On 16 January 2003, respondent was served with the notice of termination on the ground of loss of trust and confidence, for gross violation of policies and procedures.

Respondent filed a complaint for illegal dismissal with the labor arbiter praying for payment of separation pay, backwages and attorney's fees. The labor arbiter found respondent's dismissal for cause in accordance with the law. It was established that respondent had approved withdrawals which were later proven to be forged. On appeal, the NLRC sustained the dismissal but ordered the payment of separation pay. In the instant petition, BPI essentially questions the award of separation pay.
ISSUE: Whether or not respondent is entitled to backwages.


While as a general rule, an employee who has been dismissed for any of the just causes enumerated under Article 282 of the Labor Code is not entitled to separation pay, the Court has allowed in numerous cases the grant of separation pay or some other financial assistance to an employee dismissed for just causes on the basis of equity.

In the leading case of Philippine Long Distance Telephone Co. v. NLRC, the Court stated that separation pay shall be allowed as a measure of social justice only in those instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. In granting separation pay to respondent, the NLRC and Court of Appeals both adhered to this jurisprudential precept and cleared respondent of bad faith.However, the succeeding case of Toyota Motor Phils. Corp. Workers Association v. NLRC reaffirmed the general rule that separation pay shall be allowed as a measure of social justice only in those instances where the employee is validly dismissed for causes other than serious misconduct, willful disobedience, gross and habitual neglect of duty, fraud or willful breach of trust, commission of a crime against the employer or his family, or those reflecting on his moral character. These five grounds are just causes for dismissal as provided in Article 282 of the Labor Code.