Case Digest: PAL v. NLRC & Quijano

G.R. No. 123294: October 20, 2010




An investigating committee chaired by Leslie W. Espino formally charged Quijano as Manager-ASAD in connection with the processing and payment of commission claims to Goldair Pty. Ltd. wherein PAL overpaid commissions to the latter.

Pending further investigation, the Espino Committee placed Quijano under preventive suspension and at the same time required her to submit her answer to the charges.

Another Administrative charge involving the same Goldair anomaly was filed, this time including Committee Chairman Leslie W. Espino and Committee Member Romeo R. Ines and several others, for "gross incompetence and inefficiency, negligence, imprudence, mismanagement, dereliction of duty, failure to observe and/or implement administrative and executive policies, and related acts or omissions." Pending the result of investigation by another committee chaired by Judge Martin S. Ocampo, the PAL Board of Directors suspended respondents.

The Ocampo Committee having submitted its findings to the PAL Board of Directors, the latter considered respondents resigned from the service effective immediately, for loss of confidence and for acts inimical to the interest of the company.

Her motion for reconsideration having been denied by the Board, Quijano filed the instant case against PAL for illegal suspension and illegal dismissal.

The Labor Arbiter dismissed private respondents complaint. Undeterred, private respondent filed an appeal before the NLRC which rendered the assailed Decision vacated and set aside. Petitioner filed a Motion for Reconsideration but this was denied by the NLRC.
Whether or not respondent is illegally dismissed?


At the onset, it should be noted that the parties do not dispute the validity of private respondents dismissal from employment for loss of confidence and acts inimical to the interest of the employer. The assailed September 29, 1995 Decision of the NLRC was emphatic in declaring that it was "not prepared to rule as illegal the preventive suspension and eventual dismissal from the service of [private respondent]" and rightfully so because the last position that private respondent held, Manager-ASAD (Agents Services Accounting Division), undeniably qualifies as a position of trust and confidence.

Loss of confidence as a just cause for termination of employment is premised from the fact that an employee concerned holds a position of trust and confidence. This situation holds where a person is entrusted with confidence on delicate matters, such as the custody, handling, or care and protection of the employers property. But, 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.

As a general rule, employers are allowed a wider latitude of discretion in terminating the employment of managerial personnel or those who, while not of similar rank, perform functions which by their nature require the employers full trust and confidence. This must be distinguished from the case of ordinary rank and file employees, whose termination on the basis of these same grounds requires a higher proof of involvement in the events in question; mere uncorroborated assertions and accusations by the employer will not suffice.


The language of Article 279 of the Labor Code is pregnant with the implication that a legally dismissed employee is not entitled to separation pay, to wit:

An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.

However, in exceptional cases, this Court has granted separation pay to a legally dismissed employee as an act of "social justice" or based on "equity." In both instances, it is required that the dismissal (1) was not for serious misconduct; and (2) does not reflect on the moral character of the employee or would involve moral turpitude. This equitable and humanitarian principle was first discussed by the Court in the landmark case of Philippine Long Distance Telephone Co. (PLDT) v. National Labor Relations Commission.

Serious misconduct as a valid cause for the dismissal of an employee is defined simply as improper or wrong conduct. It is a transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error of judgment. To be serious within the meaning and intendment of the law, the misconduct must be of such grave and aggravated character and not merely trivial or unimportant. However serious such misconduct, it must, nevertheless, be in connection with the employees work to constitute just cause for his separation. The act complained of must be related to the performance of the employees duties such as would show him to be unfit to continue working for the employer. On the other hand, moral turpitude has been defined as "everything which is done contrary to justice, modesty, or good morals; an act of baseness, vileness or depravity in the private and social duties which a man owes his fellowmen, or to society in general, contrary to justice, honesty, modesty, or good morals."

In the case at bar, the transgressions imputed to private respondent have never been firmly established as deliberate and willful acts clearly directed at making petitioner lose millions of pesos. At the very most, they can only be characterized as unintentional, albeit major, lapses in professional judgment. Likewise, the same cannot be described as morally reprehensible actions. Thus, private respondent may be granted separation pay on the ground of equity which this Court had defined as "justice outside law, being ethical rather than jural and belonging to the sphere of morals than of law. It is grounded on the precepts of conscience and not on any sanction of positive law, for equity finds no room for application where there is law."