Bance v. University of St. Anthony (2021)

See: Original Decision

Bance v. University of St. Anthony and Santiago Ortega, Jr., G.R. No. 202724, February 3, 2021, Per Hernando, J.:

1. Background

• The Petitioners Susan M. Bance (Bance), Arlene C. Dimaiwat (Dimaiwat), Jean O. Velasco (Velasco), Nancy M. Aguirre (Aguirre), and Hazel A. Lobetania (Lobetania; collectively, [the [Employees]) filed complaints for illegal dismissal with money claims against respondents University and Atty. Santiago D. Ortega, Jr. (Atty. Ortega; collectively, [the Employers]).

• The University is an educational institution duly organized and existing under Philippine laws. Atty. Ortega is the President and the Chairman of the University’s Board of Trustees. Mrs. Victoria SD. Ortega (Mrs. Ortega) was originally impleaded in the case but was subsequently dropped as a party respondent. She is the University’s Vice-President for Finance.

• [The Employees] were regular employees of the University. As summarized by the CA, the details of their employment are as follows:

Names Date Employed Position Monthly Salary Susan M. Bance June 1984 Senior Accounts Officer P21,591.12 Arlene C. Dimaiwat June 14, 1982 Accounting Clerk P9,250.00 Jean O. Velasco June 1988 Classroom Teacher PI 1,880.00 Nancy M. Aguirre April 7,1980 Accounting Officer PI 1,850.00 Hazel A. Lobetania June 1, 1984 Credit and Collection Officer P14,000.00.

• Facts relative to Lobetania:

• In June 2006, several irregular and anomalous transactions were noted in the University’s Accounting Office. Consequently, in January 2007, Atty. Ortega hired an external auditor to conduct an investigation. The audit report dated March 13, 2007 revealed a cash shortage of PI,239,856.25, which represents the net collection of book remittances. The cash should have been kept inside the cash vault under the custody of Lobetania but it was missing. As a result, Lobetania was asked to go on a leave of absence. During her conference with Atty. Ortega, Lobetania admitted that she failed to deposit the amount in the University’s bank account. Upon demand to return the amount, Lobetania paid it in installments out of her personal funds as evidenced by official receipts issued by the University under her name. In a subsequent audit report dated May 15, 2007, additional anomalous transactions in the prior years surfaced where the tellers accommodated the encashment of checks not in the name of the University.

• Lobetania went on leave for the duration of the audit. Eventually, she tendered her resignation on July 27, 2007 (to take effect on August 1, 2007), and was approved by Atty. Ortega on August 9, 2007.

• Subsequently, on February 22, 2008, the University filed criminal cases for Estafa against Lobetania. On March 25, 2008, the prosecutor found probable cause to charge her with Qualified Theft and filed the corresponding Information before the Regional Trial Court of Iriga City.

• Facts relative to Bance, Dimaiwat, Velasco, and Aguirre:

• At around the same period, Bance, Dimaiwat, and Aguirre were found to have taken advantage of their positions in the Accounting Office by enrolling their children and relatives, including Velasco’s, under the University’s group enrollment incentive program despite knowing that they were unqualified. Upon discovery of the fraudulent scheme in November 2007, Atty. Ortega immediately ordered an investigation and called a conference with the alleged perpetrators.

• During the December 2007 conference, [the Employees] (excluding Lobetania) were apprised of the infractions they committed. During the conference, they admitted that their children and relatives indeed benefitted from the unauthorized discounts. Atty. Ortega thus verbally informed them that their employment will be terminated. On December 22, 2007, Atty. Ortega issued Office Memo No. 007-026, informing them that their employment will be terminated effective January 1, 2008 on grounds of dishonesty amounting to malversation of school funds. The office memo was allegedly not preceded by any written notice to [the Employees] except for the two conferences and a verbal announcement during the second conference.

• Dimaiwat, Velasco, and Aguirre opted to resign. They tendered their resignation on December 22, 2007 (taking effect on January 2, 2008), and these were approved by Atty. Ortega on December 26, 2007. Bance did not tender her resignation.

• Subsequently, the University filed several criminal cases for Estafa against Bance, Dimaiwat, Velasco, and Aguirre.[34] These are pending before the Municipal Trial Court in Iriga City.

• On April 1, 2008, Bance, Dimaiwat, Velasco, and Aguirre filed their respective complaints for illegal dismissal with money claims against [the Employers]. Lobetania filed hers on April 22, 2008. They subsequently amended their complaints to include claims for unpaid salaries and 13th month pay, and to implead Mrs. Ortega as respondent in Lobetania’s complaint.

• Proceedings ensued. [The Employers] opted to file two separate position papers-one position paper on Lobetania’s case and another on Bance, Dimaiwat, Velasco, and Aguirre’s case. They, however, belatedly filed their position paper on Bance, Dimaiwat, Velasco, and Aguirre’s case before the LA.

• In their Joint Position Paper, [the Employees] contended that their dismissal was illegal for lack of just or authorized causes and non-observance of the requirements of procedural due process.[43] Lobetania, for her part, stated that there was no missing money as the P1,239,856.25 she allegedly pilfered was actually used by Mrs. Ortega to pay off loans. She was only forced to pay the amount from her personal funds, as evidenced by official receipts issued by the University under her name, because of the threats issued by Atty. Ortega. [The Employees] prayed for reinstatement, and payment of money claims, moral, nominal, and exemplary damages, and attorney’s fees.

• On the other hand, in their two separate Position Papers, [the Employers] contended that [the Employees]’ (except Bance) resignation rendered the complaints for illegal dismissal without basis. [The Employers] added that, in any event, [the Employees]’ (including Bance) dismissals were for a just cause (i.e., willful breach of trust and fraud) based on the acts that they committed during their employment as shown by the result of the investigation and audits. [The Employers] prayed for the dismissal of the complaints and for the payment of moral and exemplary damages to the University.

2. SC Decision / Resolution

[No illegal dismissal against Lobetania, Dimaiwat, Velasco and Aguirre]

• Lobetania, Dimaiwat, Velasco and Aguirre voluntarily resigned rendering their complaints for illegal dismissal without basis. [The Employers] correctly argued that Lobetania, Dimaiwat, Velasco, and Aguirre had voluntarily tendered their resignation before filing their complaints for illegal dismissal. The NLRC ruled that this event rendered their complaints for illegal dismissal without basis as the employment relationship was severed before the effectivity date of its termination. [The Employees], on the other hand, did not contest this but insisted that there they were illegally dismissed. The Court holds that [the Employees]’ voluntary resignation effectively rendered their complaints for illegal dismissal without any basis.

• For resignation from employment to be valid, there must be an intent to relinquish the position together with the overt act of relinquishment. Resignation must be voluntary. In illegal dismissal cases, the employer, if defense of resignation is presented, must show that the employee indeed voluntarily resigned.

• In the instant case, the fact of [the Employees]’ resignation is undisputed. Lobetania tendered her resignation on July 27, 2007, and was approved by Atty. Ortega on August 9, 2007. Dimaiwat, Velasco, and Aguirre tendered their resignation on December 22, 2007, and these were approved by Atty. Ortega on December 26, 2007. In examining the totality of circumstances, [the Employers] showed that Lobetania, Dimaiwat, Velasco, and Aguirre voluntarily resigned prior to the effectivity date of the termination of their employment. There were ongoing investigations against [the Employees] for the irregular acts they committed thereby placing them in a difficult position. Moreover, from the wording of the resignation letters, it can be implied that [the Employees]’ resignations were voluntary. Though not the sole test, the wording of resignation letters may be considered as a factor, together with other circumstances, in assessing the voluntariness of a resignation. Also, to emphasize, [the Employees] did not contend or present countervailing evidence that their resignation was involuntary. Likewise, “it is settled that there is nothing reprehensible or illegal when the employer grants the employee a chance to resign and save face rather than smear the latter’s employment record.”

• Thus, because of the voluntary resignations of Lobetania, Dimaiwat, Velasco, and Aguirre prior to the termination of their employment, their complaints for illegal dismissal have no basis.

[No due process for Bance]

• As stated, Bance did not tender her resignation. She insists that she was illegally dismissed for lack of substantial and procedural due process. [The Employers], on the other hand, argue that she was validly dismissed based on fraud resulting to willful breach of trust. The NLRC ruled that the dismissal was valid but procedural due process was not observed, awarding nominal damages in the amount of P5,000.00. The CA agreed but deleted the award of nominal damages and ruled that procedural due process was observed.

• The Court holds that Bance’s dismissal was for a just cause. She willfully breached the trust that the University has reposed on her. Bance’s act of accommodating into the University’s group enrollment incentive program unqualified beneficiaries, including the children and relatives of [the Employees], constitute willful breach of trust. As stated, to constitute willful breach of trust, the employee concerned must be holding a position of trust and confidence, and there must be a willful act that would justify the loss of trust and confidence. In Alvarez v. Golden Tri Bloc, Inc., this Court ruled that a supervisory position is considered a position of trust because of the high degree of honesty and responsibility required and expected of the employee as compared with ordinary rank and file employees.

• Hence, Bance’s position as Senior Accounts Officer, being supervisory in nature, can be considered as a position of trust. The investigation conducted by [the Employers] showed that Bance (with Dimaiwat, Velasco, and Aguirre) participated in the scheme in the incentive program by enrolling unqualified beneficiaries. Likewise, as confirmed by the CA, Bance admitted during a conference with Atty. Ortega and other [the Employees] that her children or relatives (as the case may be) benefitted from the unauthorized discounts. By her admission, Bance’s act was willful. Such constitutes willful breach of the trust that the University has reposed on her.

• Having been dismissed for a just cause, it follows that Bance is not entitled to backwages and other money claims arising from an illegal dismissal.

• The Court, however, does not agree with the CA on its ruling on the aspect of procedural due process. As discussed above, to comply with the requirement of procedural due process, two written notices must be issued. The first written notice should contain the specific causes or grounds for termination against the employee. The second written notice contains the decision terminating the employment after considering all circumstances involving the charge.

• Records show that during the events leading to Bance’s dismissal, two conferences were held, after which, Office Memo No. 007-026 was issued to inform her (and Dimaiwat, Velasco, and Aguirre) of the termination of her employment effective January 1, 2008. Clearly, these are not compliant with the requirements established by law. Only the second written notice or Office Memo No. 007-026, was served on Bance. The records show that no first written notice was given to Bance. Conferences and verbal announcements do not suffice as substitute for the requisite first written notice.

• Applying Agabon v. National Labor Relations Commission, Bance is therefore entitled to nominal damages in the amount of P30,000.00.