Case Digest: Century Iron v. Banas

G.R. No. 184116 : June 19, 2013




Respondent Eleto B. Banas worked at petitioner Century Iron beginning July 5, 2000until his dismissal on June 18, 2002.Bas responded to his dismissal by filing a complaint for illegal dismissal with prayer for reinstatement and money claims.

According to Century Iron, Bas worked as an inventory comptroller

Sometime in 2002, Century Iron received letters of complaint from its gas suppliers regarding alleged massive shortage of empty gas cylinders.In the investigation that Century Iron conducted in response to the letters, it found that Bas failed to make a report of the missing cylinders. On May 14, 2002, Century Iron required Bas to explain within 48 hours from receipt of its letter why no disciplinary action should be taken against him for loss of trust and confidence and for gross and habitual neglect of duty.On May 31, 2002, Century Iron issued a Memorandum requiring Bas to attend a hearing regarding the missing cylinders.Bas subsequently appeared at the hearing to air his side.

On June 17, 2002, Century Iron, through Personnel Officer Mr. Virgilio T. Baga, terminated Bas services on grounds of loss of trust and confidence, and habitual and gross neglect of duty.The termination was effective June 18, 2002.

In his defense, Bas alleged that he merely worked as an inventory clerk who is not responsible for the lost cylinders. Therefore, he cannot be terminated on the ground of loss of confidence.

Labor Arbiter (LA) Joel S. Lustria ruled that Bas was illegally dismissed. The LA did not believe Century Irons assertions that Bas worked as an inventory comptroller and that he was grossly and habitually neglectful of his duties. The evidence on record shows that Bas was an inventory clerk whose duties were merely to conduct inventory and to submit his report to the personnel officer. As an inventory clerk, it was not his duty to receive the missing items

On appeal by Century Iron, the National Labor Relations Commission (NLRC) affirmed the LAs ruling in toto.

On January 31, 2008, the CA affirmed with modification the NLRC decision. It agreed with the lower tribunals finding that Bas was merely an inventory clerk. It, however, ruled that Bas was afforded due process. It held that Bas had been given ample opportunity to air his side during the hearing, pointing out that the essence of due process is simply an opportunity to be heard.

ISSUE: Whether or not Century Iron terminated Banas for just and valid causes

HELD: The Court of Appeals decision is reversed and set aside. The Complaint for illegal dismissal is dismissed for lack of merit


Since Banas was an ordinary rank-and-file employee, his termination on the ground of loss of confidence was illegal.

Banas did not occupy a position of trust and confidence nor was he routinely in charge with the care and custody of Century Irons money or property.

We point out in this respect that loss of confidence applies to: (1) employees occupying positions of trust and confidence, the managerial employees; and (2) employees who are routinely charged with the care and custody of the employers money or property which may include rank-and-file employees. Examples of rank-and-file employees who may be dismissed for loss of confidence are cashiers, auditors, property custodians, or those who, in the normal routine exercise of their functions, regularly handle significant amounts of money or property. Thus, the phrasing of the petitioners second assignment of error is inaccurate because a rank-and-file employee who is routinely charged with the care and custody of the employers money or property may be dismissed on the ground of loss of confidence.

With respect to Century Irons assertion that Bas was grossly and habitually neglectful of his duties, the CA erred in ruling that the NLRC did not commit grave abuse of discretion in concluding that the dismissal was illegal. The NLRCs finding that there was illegal dismissal on the ground of gross and habitual neglect of duties is not supported by the evidence on record. It believed in Bas bare and unsubstantiated denial that he was not grossly and habitually neglectful of his duties when the record is replete with pieces of evidence showing the contrary.

Bas self-serving and unsubstantiated denials cannot defeat the concrete and overwhelming evidence submitted by the petitioners. The evidence on record shows that Bas committed numerous infractions in his one year and eleven-month stay in Century Iron.

They maintained that Bas committed numerous infractions during his tenure amounting to gross and habitual neglect of duty. These included absences without leave, unauthorized under time, failure to implement proper standard warehousing and housekeeping procedure, negligence in making inventories of materials, and failure to ensure sufficient supplies of oxygen-acetylene gases.

Article 282 of the Labor Code provides that one of the just causes for terminating an employment is the employees gross and habitual neglect of his duties.

To our mind, such numerous infractions are sufficient to hold him grossly and habitually negligent. His repeated negligence is not tolerable. The totality of infractions or the number of violations he committed during his employment merits his dismissal.

Besides, the determination of who to keep in employment and who to dismiss for cause is one of Century Iron's prerogatives. Time and again, we have recognized that the employer has the right to regulate, according to its discretion and best judgment, ell aspects of employment. It would be the height of injustice if we force an employer to retain the services of an employee who does not value his work.