Case Digest: Villanueva, Jr. v. NLRC, et al.

G.R. No. 176893 : June 13, 2012




Villanueva had been employed with Meralco as bill collector, teller and branch representative. On June 10, 2002, a report was received by Francisco Collantes, Manager of Meralco Novaliches Branch claiming that there were customers who were issued Contracts for Electric Service by Villanueva which indicated their payment ofP 930.00 as deposit payment when they actually gave him a total amount of P 1,240.00. The discrepancy amounting to P 310.00 was not covered by any receipt.

Pursuant to the complaints, a field investigation was conducted by the company-designated investigator who was able to obtain sworn statements from nine (9) out of twenty four (24) complaining customers.The said complainants identified Villanueva as the person they have transacted with, from a line-up of pictures of several individuals.

In a letterdated August 1, 2002, Villanueva was informed of the investigation to be conducted by the company. On the date of the scheduled hearing indicated in the letter, Villanueva appeared with counsel who requested for time within which to submit a responsive paper. In his counter-affidavit,he denied demanding payment in excess of the minimum deposit charged from applicants for electric service connection. Villanueva explained that if ever there was any error or discrepancy in the preparation of the contract, this would have to be balanced at the end of the day. He claimed that there were instances when initial entries of applied loads were erroneous prompting him to modify the contract in order that the customersdeposit payment could be entered. In cases when the customer was no longer in the office premises, he would just record them as pre-payment so as to reflect the same in their billing upon installation of the electric meter.

In a letter dated August 28, 2002, Meralco denied the request of Villanueva counsel to cross-examine the witnesses (complaining customers) who were not Meralco employees. Management maintained that it was not the proper place to grill a witness on cross-examination which should be done in an appropriate proceeding. Villanueva was then advised that the case would be considered submitted for decision as the issues had already been joined with the submission of his counter-affidavit.

On January 9, 2003, Villanueva received the Notice of Termination.

On January 21, 2003, Villanueva filed a complaint for illegal dismissal before the Regional Arbitration Branch. He alleged that he was denied both substantive and procedural due process because there was no formal charge yet when Meralco effected his termination. Anent the charge of misappropriation of company funds, Villanueva claimed that the amount was intact with the office and it was only during the preparation of forms that sometimes confusion would occur, but this was promptly corrected upon discovery to reflect the correct amount for the kind of service paid for. He further claimed that even assuming that the error was committed, the offense could not have warranted a penalty of dismissal because the Company Code of Employee Discipline failed to make mention of his case in a specific manner. At most, his case was one of simple negligence because the company was not prejudiced financially.

On June 30, 2004, the Labor Arbiter rendered a decision in favor of Villanueva ordering his reinstatement with backwages. In its Resolution dated November 30, 2004, the NLRC Third Division reversed the ruling of the LA and declared Villanueva dismissal as valid.

After having filed his Motion for Reconsideration, Villanueva moved for the execution of the LA decision alleging that while he had been reinstated in the payroll of Meralco effective July 16, 2004, he was not given the full benefits to which he was entitled prior to his dismissal, like one (1) sack of rice per month and bonuses for two (2) months. Consequently, the LA ordered the issuance of a Writ of Execution and Alias Writ of Execution on February 15, 2005. On June 20, 2006, the NLRC denied Villanueva motion for reconsideration rendering its decision as final.

On appeal to the CA, Villanueva petition was dismissed. The CA ruled that Meralco had established just cause for the dismissal of Villanueva by substantial evidence of his fraudulent and dishonest acts resulting in the loss of trust and confidence that Meralco had reposed on him.

ISSUE: Whether or not the Court of Appeals erred in reversing the decision of the Labor Arbiter and declaring petitioner dismissal as valid and justified?

HELD: The petition is without merit.

Dismissal from employment has two aspects:
(1) the legality of the act of dismissal per se, which constitutes substantive due process, and 
(2) the legality of the manner of dismissal, which constitutes procedural due process.
As to the first, the legal provision in point is Article 282 of the Labor Code which provides:

Art. 282. Termination by Employer. An employer may terminate an employment for any of the following causes:
(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work; 
(b) Gross and habitual neglect by the employee of his duties; 
(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative; 
(d) Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representative; and 
(e) Other causes analogous to the foregoing.
In the case of Cruz v. Court of Appeals, the Court had the occasion to enumerate the essential elements for "willful breach by the employee of the trust reposed in him by his employer":

Xxx the loss of trust and confidence must be based on willful breach of the trust reposed in the employee by his employer. Such breach is willful if it is done intentionally, knowingly, and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. Moreover, it must be based on substantial evidence and not on the employer whims or caprices or suspicions otherwise, the employee would eternally remain at the mercy of the employer. Loss of confidence must not be indiscriminately used as a shield by the employer against a claim that the dismissal of an employee was arbitrary. And, in order to constitute a just cause for dismissal, the act complained of must be work-related and shows that the employee concerned is unfit to continue working for the employer. In addition, loss of confidence as a just cause for termination of employment is premised on the fact that the employee concerned holds a position of responsibility, trust and confidence or that the employee concerned is entrusted with confidence with respect to delicate matters, such as handling or case and protection of the property and assets of the employer. The betrayal of this trust is the essence of the offense for which an employee is penalized.

As a safeguard against employers who indiscriminately use "loss of trust and confidence" to justify arbitrary dismissal of employees, the Court, in addition to the above elements, came up with the following guidelines for the application of the doctrine:
(1) loss of confidence should not be simulated;

(2) it should not be used as a subterfuge for causes which are improper, illegal or unjustified;

(3) it may not be arbitrarily asserted in the face of overwhelming evidence to the contrary; and

(4) it must be genuine, not a mere afterthought, to justify an earlier action taken in bad faith.
In this case, the above requisites have been met. Meralco loss of trust and confidence arising out of Villanueva act of misappropriation of company funds in the course of processing customer applications has been proven by substantial evidence, thus, justified. Verily, the issuance of additional receipts for excessive payments exacted from customers is a willful breach of the trust reposed in him by the company.

One. Villanueva worked for Meralco as a Branch Representative whose tasks included the issuance of Contracts for Electric Service after receipt of the amount due for service connection from customers. Obviously, he was entrusted not only with the responsibility of handling company funds but also to cater to customers who intended to avail of Meralco services. This is nothing but an indication that trust and confidence were reposed in him by the company, although his position was not strictly managerial by nature.

Two. Villanueva acts of issuing contracts indicating therein an amount less than the actual payment made by the customers and, thereafter, issuing a receipt in an attempt to document the discrepancy are certainly work-related. This is, in fact, the core of his position as a Branch Representative.

Three. Meralco charge against Villanueva was adequately proven by substantial evidence. The records provide an extensive showing of evidence against Villanueva. The affidavits of co-employees and, more especially those of the customers themselves, bear weight in establishing the specific acts constituting the charge against him. In fact, no inconsistencies among these statements were found. Villanueva likewise failed to pose a plausible defense

Four. The breach of the company trust in Villanueva was shown to have been committed knowingly and willfully. Although the amount of discrepancy or money misappropriated may be considered minimal and even inconsequential to an established company such as Meralco, it is the anomalous practice of requiring applicants for electric service connection to pay amounts higher than required that is the crux of Villanueva offense. The conscious design of issuing another receipt to make it appear that there was a mistake in the initial transaction with the customers exhibits a culpable act bordering on dishonesty and deceit. If not for personal gain, why did Villanueva exact from customers amounts in excess of what was required by the company?

Villanueva insistence, that the act which triggered his dismissal did not justify his separation from the service because the Company Code of Employee Discipline failed to make mention of his case in a specific manner, fails to persuade the Court. The established facts do not constitute a mere case of simple negligence. The acts performed were without the slightest connotation of inadvertence which Villanueva could have demonstrated during the proceedings a quo.

Besides, the Court is not unmindful of the prerogatives available to Meralco as an employer. Management has the prerogative to discipline its employees and to impose appropriate penalties on erring workers pursuant to company rules and regulations.So long as they are exercised in good faith for the advancement of the employer interest and not for the purpose of defeating or circumventing the rights of the employees under special laws or under valid agreements, the employer exercise of its management prerogative must be upheld.

In his case, no indication of bad faith can be attributed to Meralco as there was no dispute that it had lost trust and confidence in Villanueva and his abilities to perform his tasks with utmost efficiency and honesty expected of an employee trusted to handle customers and funds. With substantial evidence presented and Villanueva failure to proffer plausible explanation denying the charges against him, there can be no other conclusion for the Court but to affirm his dismissal.

Lastly, Villanueva argued that management committed a grievous error for not giving him a chance to confront the customers who stood as witnesses against him. To this, the Court disagrees. As the NLRC and the CA found, Villanueva was afforded due process when he was given the required notices. More importantly, he was actually given the opportunity to be heard. On the date of the scheduled hearing, Villanueva was assisted by counsel who requested for time within which to submit a counter-affidavit. He was able to submit it, where he denied the charges against him. Undoubtedly, Villanueva was afforded procedural due process even if the cross-examination of the witnesses was not permitted by Meralco.

Petition is DENIED.