Case Digest: Jerusalem v. Keppel Monte Bank, Hock, Yap & Picart

G.R. No. 169564 : April 6, 2011




James Ben L. Jerusalem (James) was employed by Keppel Monte Bank (Keppel) as Assistant Vice-President and was later was assigned as Head of the newly created VISA Credit Card Department. The bank subsequently re-organized the said Department and reduced it to a mere unit. Afterwards, James, carrying the same rank, was reassigned as Head of the Marketing and Operations of the Jewelry Department.

James received from Jorge Javier (Jorge) a sealed envelope said to be containing VISA Card application forms. Jorge is a Keppel Visa Card Holder since December 1998. James immediately handed over the envelope with accomplished application forms to the VISA Credit Card Unit. All in all, the VISA credit card applications referred by Jorge which James forwarded to the VISA Credit Card Unit numbered 67, all of which were subsequently approved. As it turned out, all the accounts under these approved applications became past due.

James received a Notice to Explain why no disciplinary action should be taken against him for referring/endorsing fictitious VISA card applicants. He explained that he had no participation in the processing of the VISA card applications since he was no longer connected with the VISA Credit Card Unit at the time of such transactions. He explained that he can only endorse the applications referred by Jorge to the VISA Credit Card Unit because he was already transferred to Jewelry Department, as Head. However, he was issued a a Notice of Termination informing him that he was found guilty of breach of trust and confidence for knowingly and maliciously referring, endorsing and vouching for VISA card applicants who later turned out to be impostors resulting in financial loss to Keppel. Thus, the filing o a complaint foe illegal dismissal.

The LA found Keppel guilty of illegal dismissal and ordered the payment of backwages from the time of his illegal termination and in lieu of reinstatement, a separation pay should be given. The NLRC affirmed the LA’s decision. However, the CA reversed and set aside the said decision and dismissed the complaint.

ISSUE: Whether Keppel legally terminated James’s employment on the ground of willful breach of trust and confidence.


The Petition is granted.

LABOR LAW : Termination of Employment

Article 282(c) of the Labor Code prescribes two separate and distinct grounds for termination of employment, namely: (1) fraud; or (2) willful breach by the employee of the trust reposed in him by his employer or duly authorized representative. 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.

There are 2 requisites for dismissal on the ground of loss of trust and confidence, these are: 1) employee concerned must be holding a position of trust and confidence; and 2) there must be an act that would justify the loss of trust and confidence. In the case at hand, the first requisite is present for James held a a position of trust and confidence as Assistant Vice-President of the Jewelry Department. As for the second requisite, the court ruled that Keppel’s evidence against James fails to clearly and convincingly establish a willful breach of trust.

From the findings of both the Labor Arbiter and the NLRC it is clear that James did nothing wrong when he handed over to Marciana, the unit head, the envelope containing the applications of persons under the referred accounts of Jorge who were later found to be fictitious. As the records now stand, James was no longer connected with the VISA Credit Card Unit when the 67 applications for VISA card were approved. At such time, he was already the Head of the Marketing and Operations of the Jewelry Department. His act therefore of forwarding the already accomplished applications to the VISA Credit Card Unit is proper as he is not in any position to act on them. The processing and verification of the identities of the applicants would have been done by the proper department, which is the VISA Credit Card Unit. Therefore, it is incumbent upon Marciana as Unit Head to have performed her duties. As correctly observed by the Labor Arbiter, Keppel had gone too far in blaming James for the shortcomings and imprudence of Marciana. The invocation of Keppel of the loss of trust and confidence as ground for James’s termination has therefore no basis at all. Thus, the Court declared that such dismissal based on the ground of loss of trust and confidence was illegal.

Therefore, the petition is denied.