Case Digest: Norkis v. Descallar

G.R. No. 185255 : March 14, 2012




Respondent Delfin S. Descallar was assigned at the Iligan City Branch of petitioner Norkis Distributors, Inc. onApril 26, 1993,.He became a regular employee onFebruary 1, 1994and was promoted as Branch Manager onJune 30, 1997.He acted as branch administrator and had supervision and control of all the employees. Respondent was also responsible for sales and collection.

After Norkis conducted an investigation based on the alleged AWOL of the respondent on certain dates fromApril 3, 2002 to June 11, 2002, it found out that respondent was not able to prove that he was really in the branch or on official travel, petitioners suspended him for fifteen (15) days without pay beginning July 8, 2002.Accordingly, respondent admitted during the investigation that he used company time for his personal affairs, but only for a few hours and not the whole day.

While respondent was still serving his suspension, the Internal Auditor of the company made a random operational review and audit of the Iligan City Branch.Several findings against respondent were noted by the auditor. Thus, petitioners asked respondent to explain the findings against him within four (4) hours from receipt of notice.

Later, respondent and Branch Control Officer Rosanna Lanzador received a memorandum dated July 23, 2002, informing them that during a cash count conducted on July 12,2002, ashortage ofP800 in the companys TNT fund was discovered.Likewise, an irregularity was found in the disbursement of sales commissions amounting toP1,700.These amounts were charged equally to the accounts of respondent and Lanzador. Thereafter, respondent was placed under preventive suspension for fifteen (15) working days without pay.

OnAugust 12, 2002, petitioners issued a Notice to Show Cause to respondent which states that serious findings were noted against the respondent during the audit in Iligan Branch and for its failure to reach sales quota. The notice also commanded the petitioner to explain in writing within 24 hours upon receipt of this notice to show cause why he should not be terminated.

OnAugust 21, 2002, petitioners terminated respondents services for loss of trust and confidence and gross inefficiency. Aggrieved, respondent filed a complaint for illegal suspension and illegal dismissal before the Sub-Regional Arbitration Branch X inIliganCity. The LA found the respondent for being illegally dismissed and held petitioners liable for the unpaid wages.

On appeal, the NLRC reversed the LAs decision and found respondent to have been validly dismissed. The NLRC, however, upheld the Labor Arbiters finding that petitioners are liable to respondent for unpaid wages.The NLRC held:

Respondent filed for reconsideration but it was denied. He filed with the CA a petition forcertiorari reinstating with modification the decision of the LA. The CA deleted the award of 13th month pay and backwages.

Respondent filed a motion for clarification as to the awards of separation pay and back wages while petitioners filed a motion for reconsideration.

On October 24, 2008, the CA issued a Resolution stating that as regards respondents motion for clarification, the separation pay and back wages shall be reckoned from the time respondent was illegally suspended until finality of the March 31, 2008 Decision.The CA likewise denied petitioners motion for reconsideration in the same resolution.

Hence, this petition.


Whether or not the failure of respondent to reach his monthly sales quota is a valid basis for loss of trust and confidence?


The petition is dismissed.


Loss of trust and confidence as a ground for termination of an employee under Article 282of theLabor Coderequires that the breach of trust be willful, meaning it must be done intentionally, knowingly, and purposely, without justifiable excuse. The basic premise for dismissal on the ground of loss of confidence is that the employee concerned holds a position of trust and confidence.It is the breach of this trust that results in the employers loss of confidence in the employee.

Here, there is no question that as petitioners Branch Manager inIliganCity, respondent was holding a position of trust and confidence.He was responsible for the administration of the branch, and exercised supervision and control over all the employees.He was also in-charge of sales and collection.

Records show that petitioners terminated his employment on the ground of loss of trust and confidence for supposedly committing acts inimical to the companys interests. However, in termination cases, the burden of proof rests upon the employer to show that the dismissal is for a just and valid cause and failure to do so would necessarily mean that the dismissal was illegal. The employers case succeeds or fails on the strength of its evidence and not on the weakness of the employees defense. If doubt exists between the evidence presented by the employer and the employee, the scales of justice must be tilted in favor of the latter.Moreover, the quantum of proof required in determining the legality of an employees dismissal is only substantial evidence or such relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other minds, equally reasonable, might conceivably opine otherwise.Thus, it is incumbent upon petitioners to proveby substantial evidence that valid grounds existfor terminating respondents employment on the ground ofloss of trust and confidence.However, the CA correctly held that petitioners failed to discharge this burden.

Considering all the allegations of the petitioner, the failure to reach the monthly sales quota cannot be considered an intentional and unjustified act of respondent amounting to a willful breach of trust on his part that would call for his termination based on loss of confidence.Indeed, the low sales performance could be attributed to several factors which are beyond respondents control.To be a valid ground for an employees dismissal, loss of trust and confidence must be based on a willful breach, which means it is done intentionally, knowingly and purposely, without justifiable excuse.

In the case at bar, the petitioners have failed to establish by substantial evidence any valid ground for terminating respondents services, thus, the findings of the Labor Arbiter and the CA that respondent was illegally dismissed is upheld.


An illegally dismissed employee is entitled to two reliefs: back wages and reinstatement. The two reliefs provided are separate and distinct. In instances where reinstatement is no longer feasible because of strained relations between the employee and the employer, separation pay is granted. In effect, an illegally dismissed employee is entitled to either reinstatement if such is viable, or separation pay if reinstatement is no longer viable, and to back wages.

The normal consequences of respondents illegal dismissal, then, are reinstatement without loss of seniority rights, and payment of back wages computed from the time compensation was withheld from him up to the date of actual reinstatement. Where reinstatement is no longer viable as an option, separation pay equivalent to one month salary for every year of service should be awarded as an alternative. The payment of separation pay is in addition to payment of back wages.

In the case at bar, the CA merely clarified the period of payment of back wages and separation pay up to the finality of its decision (March 31, 2008)modifyingthe Labor Arbiters decision. In view of the modification of monetary awards in the Labor Arbiters decision, the time frame for the payment of back wages and separation pay is accordingly modified to the finality of the CA decision.The clarification thus made on motion of the respondent was not an amendment of theMarch 31, 2008Decision.Even assuming that the CA indeed corrected or amended the dispositive portion of its decision, it is well within its appellate jurisdiction to treat respondents motion for clarification as a partial motion for reconsideration insofar only as to declare until when the payment of such back wages and separation pay shall be made.