In Manese v. Jollibee Foods Corporation, the Supreme Court affirmed an employer’s right to terminate managerial employees based on loss of trust and confidence, even if the initial illegal dismissal finding was not timely appealed. The Court clarified that while managerial employees also have a right to security of tenure, the standards for their dismissal are less stringent, provided there is substantial evidence to support the loss of trust. This case underscores the importance of understanding the distinct employment standards applicable to managerial roles in the Philippines.

Expired Chickenjoy and Broken Trust: When Can a Manager Be Dismissed?

The case revolves around Cecilia Manese, Julietes Cruz, and Eufemio Peñano II, former employees of Jollibee Foods Corporation. They were part of the team assigned to open a new Jollibee branch. Due to postponements, a large quantity of Chickenjoy was thawed but not sold within its shelf life, leading to rejects. The employees’ handling of these rejects resulted in allegations of gross negligence, product tampering, and insubordination, culminating in their termination for loss of trust and confidence.

One key issue was whether the Court of Appeals could rule on the legality of Julietes Cruz’s dismissal when Jollibee had failed to file a timely appeal of the Labor Arbiter’s decision that her dismissal was illegal. The Supreme Court referenced the principle articulated in SMI Fish Industries, Inc. v. NLRC, stating:

It is a well-settled procedural rule in this jurisdiction…that an appellee who has not himself appealed cannot obtain from the appellate court any affirmative relief other than those granted in the decision of the court below.

The Court emphasized that since Jollibee did not appeal the Labor Arbiter’s ruling regarding Cruz’s illegal dismissal, that decision became final and executory. Therefore, the Court of Appeals exceeded its jurisdiction when it declared Cruz legally dismissed. It is a fundamental principle of appellate procedure that a party who does not appeal a decision is bound by it. They cannot seek affirmative relief from a higher court.

Building on this procedural point, the Court then addressed the dismissals of Manese and Peñano. They argued that a favorable store audit prior to the incident negated the charge of loss of trust and confidence. However, the Court found this argument unpersuasive. The Court reiterated that for managerial employees, the standard for termination is less stringent than for regular employees. The Court acknowledged that management has the right to dismiss, but this must be balanced against a managerial employee’s right to security of tenure.

The Supreme Court considered the standards for dismissing managerial employees. It stated that loss of trust and confidence must be substantial and based on clearly established facts:

This Court has consistently ruled that managerial employees enjoy security of tenure and, although the standards for their dismissal are less stringent, the loss of trust and confidence must be substantial and founded on clearly established facts sufficient to warrant the managerial employee’s separation from the company. Substantial evidence is of critical importance and the burden rests on the employer to prove it.

In this case, the Court found that Jollibee had presented sufficient evidence of gross negligence to justify the loss of trust and confidence. The actions and omissions outlined in the termination memoranda provided a valid basis for the company’s decision. The Court emphasized that previous favorable audits did not negate the specific instances of misconduct that led to the dismissals.

The Court also addressed the issue of Manese’s unpaid salary, sick leave, and cooperative savings. It affirmed the Court of Appeals’ ruling that she was entitled to these benefits, as they had already been earned. The Court emphasized that earned benefits cannot be withheld due to an unrelated debt, such as a car loan. The Court cited Nestlé Philippines, Inc. v. NLRC, clarifying that the employer’s demand for payment of the employees’ amortization on their car loans is a civil, not a labor, dispute.

Furthermore, the Supreme Court pointed out it is not the appropriate venue to review questions of fact. The last issue raised by petitioners was regarding whether the Chickenjoys were served beyond its three-day serving period. It emphasized that under Section 1, Rule 45, providing for appeals by certiorari before the Supreme Court, it is clearly enunciated that only questions of law may be set forth. This ensures that the Court focuses on interpreting legal principles rather than re-evaluating evidence presented in lower courts.

The decision serves as a reminder of the differing standards for dismissing managerial versus rank-and-file employees. For the former, a genuine loss of trust, supported by substantial evidence, is often sufficient ground for termination. This contrasts with the stricter requirements for dismissing regular employees, where just cause must be proven with a higher degree of certainty. Furthermore, the case clarifies that earned benefits cannot be withheld to offset unrelated debts, reinforcing the protection of employees’ rights to receive compensation for their work.

FAQs

What was the key issue in this case?	The key issue was whether Jollibee had valid grounds to terminate its managerial employees for loss of trust and confidence, and whether the Court of Appeals erred in ruling on Cruz’s dismissal despite Jollibee’s failure to appeal.
What is the standard for dismissing managerial employees?	The standard is less stringent than for regular employees; loss of trust and confidence, supported by substantial evidence, is sufficient. However, this must be balanced against a managerial employee’s right to security of tenure.
What constitutes ‘loss of trust and confidence’?	It arises when the employer has a reasonable ground to believe that the managerial employee is responsible for misconduct that renders them unworthy of the trust demanded by their position.
Can an employer withhold earned benefits to offset debts?	No, earned benefits like unpaid salary and sick leave cannot be withheld to offset unrelated debts like car loans. This is because these are considered civil disputes.
What was the basis for the employees’ dismissal?	The employees were dismissed due to alleged gross negligence, product tampering, and insubordination in handling Chickenjoy rejects, leading to a loss of trust and confidence.
Why was Julietes Cruz’s dismissal initially deemed illegal?	The Labor Arbiter initially ruled her dismissal illegal because she was no longer working at the specific branch when the incident was discovered. However, the Court of Appeals reversed this, a decision overturned by the Supreme Court.
What is the effect of not appealing a lower court’s decision?	Failure to file a timely appeal makes the lower court’s decision final and executory, meaning it cannot be overturned by a higher court.
Did the Supreme Court review questions of fact?	The Supreme Court does not generally review questions of fact, focusing instead on questions of law. Therefore, it did not reassess if the Chickenjoys were served past their expiration date.
What is ‘substantial evidence’ in this context?	Substantial evidence means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other minds, equally reasonable, might conceivably opine otherwise.

In summary, Manese v. Jollibee Foods Corporation provides valuable insights into the termination standards for managerial employees and reinforces the principle that earned benefits cannot be used to offset unrelated debts. The ruling highlights the importance of understanding the distinct legal considerations that apply to different employment roles.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: CECILIA T. MANESE, VS. JOLLIBEE FOODS CORPORATION, G.R. No. 170454, October 11, 2012