Buenaflor Car Services v. David
REITERATIONFacts
The Antecedents: Respondent Cezar Durumpili David, Jr. was employed as Service Manager by petitioner Buenaflor Car Services, Inc. (petitioner). In his capacity, he had authority to sign checks, check vouchers, and purchase orders. Petitioner had a policy for the purchase and delivery of automotive parts, requiring a purchase order approved by the Purchasing Officer and respondent, followed by delivery, and then payment processing. Company policy mandated that checks be issued in the name of the supplier, not "OR CASH," and be picked up from the Accounting Assistant. On August 8, 2013, petitioner's Chief Finance Officer discovered several cleared checks issued by petitioner bearing the words "OR CASH" after the payee's name. An investigation revealed that the Accounting Assistant confessed to inserting "OR CASH" upon respondent's instruction and implicated the Purchasing Officer and a messenger in preparing spurious purchase orders and encashing some checks. Respondent, along with three other employees, was placed under preventive suspension. The investigation found 27 checks with "OR CASH" inserted, totaling ₱1,021,561.72, all signed by respondent and either the Finance Manager or Vice President for Operations. Respondent denied the charges, claiming no control over finance and billing operations and no authority to instruct check alterations. Procedural History: Respondent and his co-employees were terminated for serious misconduct and willful breach of trust. They filed a complaint for illegal dismissal. The Labor Arbiter (LA) ruled that respondent, De Guzman, and Caranto were illegally dismissed, finding no conspiracy and insufficient evidence for the extrajudicial confession. The National Labor Relations Commission (NLRC) affirmed the LA's finding of illegal dismissal for respondent but found De Guzman and Caranto dismissed for cause. The NLRC deemed Del Rosario's confession insufficient against respondent, finding no proof of his involvement in check preparation or encashment. The Court of Appeals (CA) affirmed the NLRC's ruling, holding that Del Rosario's confession was hearsay against respondent under the res inter alios acta rule and that there was no substantial evidence to prove respondent's breach of trust, as the "OR CASH" alteration was not present when he signed the checks. The CA absolved corporate officers and the affiliate company from monetary awards. The Petition: Petitioner filed a petition for review on certiorari assailing the CA's decision upholding the NLRC's ruling that respondent was illegally dismissed.
Issue(s)
Whether the Court of Appeals committed reversible error in upholding the NLRC's ruling that respondent was illegally dismissed; specifically, whether the respondent's actions constituted serious misconduct and willful breach of trust justifying his termination.
Ruling
The petition is meritorious. The Decision dated November 3, 2015 and the Resolution dated February 9, 2016, of the Court of Appeals in CA-G.R. SP No. 139652 are REVERSED and SET ASIDE. Respondent is declared to be validly dismissed and thus, is not entitled to backwages, separation pay, as well as attorney's fees.
Ratio Decidendi
On the Issue of Illegal Dismissal: The Court found that the CA committed reversible error in upholding the NLRC's ruling that respondent was illegally dismissed. The employer has the burden to prove that a dismissal is for a valid cause, which includes serious misconduct or willful breach of trust. For serious misconduct, the elements are: (a) the misconduct must be serious; (b) it must relate to the performance of the employee's duties, showing unfitness to continue working; and (c) it must have been performed with wrongful intent. For loss of trust, the employee must hold a position of trust and confidence, and there must be an act justifying the loss of trust, which does not require proof beyond reasonable doubt but only some basis for the misconduct rendering the employee unworthy of trust. In this case, respondent, as Service Manager, held a position of trust and was authorized to sign checks, check vouchers, and purchase orders. The company's procurement policy required the approval of purchase orders by respondent before the delivery and payment process could commence. The issuance of spurious purchase orders, which were missing from the records and for which respondent, as the approving authority, did not account, was the basis for the irregular issuance of checks. This directly links respondent to the scheme to defraud the company, even if he signed the checks before the "OR CASH" alteration. The Court reasoned that the alterations were likely made after all required signatures were obtained to ensure the scheme's fruition, as altering checks before all signatories approved would violate company protocol. Therefore, respondent's participation in approving spurious purchase orders constituted serious misconduct and willful breach of trust, justifying his termination. The Court also noted that while Del Rosario's extrajudicial confession was generally inadmissible against respondent under the res inter alios acta rule, the NLRC should not have been bound by strict technical rules of procedure and could have considered the confession as independently relevant to prove respondent's participation, given his vital role in the procurement process. The Court concluded that substantial evidence existed to support the claim that respondent was involved in the scheme, thus his dismissal was valid.
Main Doctrine
An employer has the burden of proving that a dismissal was for a just cause. In cases involving serious misconduct or willful breach of trust, substantial evidence is required. While an extrajudicial confession is generally inadmissible against co-accused under the res inter alios acta rule, it can be considered as independently relevant to prove the participation of an accused if it relates to the conspiracy and is made during its existence, especially when the NLRC is allowed to be liberal in the application of rules of evidence. The approval of spurious purchase orders by an employee in a position of trust, even if the checks were signed prior to alteration, can constitute serious misconduct and willful breach of trust, justifying dismissal.