No photo Negligent but not dishonest

In illegal dismissal cases, the burden of proof rests upon the employer to show that the dismissal is for just cause. Failure to do so would mean that the dismissal is not justified. This rule is illustrated in this case of Cely.

Cely was the finance and administration manager of a company engaged in real estate business (LLI) which is one of the subsidiaries of a holding company (AGC) with offices in Makati City. Her duties were (a) to manage, direct and control record-keeping and financial reportorial requirements; (b) to ensure the accuracy and integrity of all financial reports; (c) to be responsible for the funds management and financial planning activities of the company; and (d) to manage the disbursements of funds.

LLI had several lease agreements known as “ arriendo contracts” with several persons whereby it transferred to the said persons its right to harvest coconuts and other fruits planted thereon in consideration of certain monetary equivalent. The collection of the proceeds was under the direct supervision of its operation and estate manager, Gino, based in Batangas City where the estate is located. He was assisted by Gabby, site assistant and Delia, liaison assistant. The arriendo collections were thereafter remitted to the Makati head office and booked as company income.

In February 2000 irregularities in the arriendo collections were discovered. Investigation showed that the collections were last remitted to the head office on September 1, 1999. Succeeding collections were no longer remitted despite proof of receipt of payments to Gino and Delia. Gino and Delia also entered into other contracts on behalf of LLI which were not reported to Head Office.

For her part, Cely issued a memo directing Gino to report any information regarding the collections and disbursements after September 1, 1999. Gino reported that he indeed failed to remit P101,200 although the accounting department found out that the actual unremitted amount was P142,100.

In its initial findings, LLI investigating panel composed of its executive vice president, assistant corporate secretary and VP for human resources development, believed that Cely was involved in the fraudulent activities and irregularities. So Cely was first suspended and then after due notice and hearing, she was dismissed on the ground of loss of trust and confidence. LLI and the panel contended that Cely’s unexplained omission and /or gross neglect to carry out her duties and to exercise the extraordinary diligence required of her position gave the other employees whose duties and activities should have been properly monitored by her, the opportunity to commit fraud against the company. Were they correct?

No. Monitoring duties and activities of other employees is not among the duties of Cely. Such monitoring especially of employees reporting in the Batangas site would fall on Dino who was appointed to oversee the operation of the company in the area. Hence it is Dino who should have been called to answer for any fraud committed in Batangas.

Cely may have been remiss in her duty to ensure that the arrienda collections were timely remitted to the head office. But negligence or carelessness is not ground for the company’s loss of trust and confidence in her especially in the absence of any malicious intent or fraud on Cely’s part. Loss of trust and confidence stems from a breach of trust founded on a dishonest, deceitful or fraudulent act. In this case Cely did not commit any dishonest or deceitful act. She did not use her authority as administrative and finance manager to misappropriate company property nor did she abuse the trust repose in her by the company and its officers with respect to her responsibility to implement company rules. She may be remiss in the performance of her company duties but this does not constitute dishonest or deceitful conduct as would justify the conclusion of loss of trust and confidence. There was no demonstration of moral perverseness that would justify the claimed loss of trust and confidence attendant to Cely’s job. LLI and its officers therefore failed to prove that Cely’s dismissal is for a just cause.

So Cely must be reinstated to her former position with full back-wages from the time of her suspension. If reinstatement is not longer possible, she should be paid one month salary for every year of service as separation pay including unused leave credits, 13th month pay, holiday pay plus legal interest and other benefits like the award of the company car, gasoline allowance, rice subsidy and health card manager package (Lima Land Inc. et.al. vs. Cuevas, G.R. 169523, June 16, 2010). –Jose C. Sison (The Philippine Star)