The Supreme Court upheld an employer’s right to terminate an employee for breach of trust and loss of confidence due to unliquidated cash advances. The Court emphasized that employers have the right to protect themselves from employees who demonstrate untrustworthiness, especially in positions requiring a high degree of responsibility. This ruling reinforces the importance of accountability and honesty in the workplace, providing employers with legal grounds to dismiss employees who violate the trust placed in them.

When Mistress Becomes a Risk: Can Jealousy Mask a Just Dismissal?

Mary June Celiz, a high-ranking employee at Cord Chemicals, Inc., found herself embroiled in a legal battle after her dismissal. Cord Chemicals alleged that Celiz failed to account for substantial unliquidated cash advances, leading to a breach of trust. Celiz contended that her dismissal was rooted in personal animosity, specifically the jealousy of her employer, Leonor Sanz, who suspected Celiz of having an affair with her deceased husband, Francisco. The central legal question revolved around whether the dismissal was justified by the unliquidated cash advances or motivated by personal reasons and whether due process was observed in the termination.

The case began when Cord Chemicals served Celiz with a Notice to Explain, citing her failure to liquidate cash advances amounting to P713,471.00. Celiz, who had been with the company since 1992 and risen to the position of Chief of Sales and Senior Operations Manager, was placed on preventive suspension. She requested more time to review her files, which was granted, but she claimed that access to her office was restricted. Following an investigation, Cord Chemicals dismissed Celiz for serious breach of trust and confidence. Celiz then filed a case for illegal dismissal and monetary benefits, arguing that the charges were fabricated and that she was not given a fair opportunity to defend herself.

The Labor Arbiter initially ruled in favor of Cord Chemicals, finding that the dismissal was for just cause and after observance of due process. This decision was upheld by the National Labor Relations Commission (NLRC). Celiz then elevated the case to the Court of Appeals (CA), arguing that the NLRC committed grave abuse of discretion. The CA, however, sided with the labor tribunals, stating that Cord Chemicals had presented clear and compelling proof of Celiz’s failure to account for the unliquidated advances.

In its decision, the CA emphasized that Celiz, as a high-ranking employee, held a position of trust that she had violated. The court cited the principle that loss of trust and confidence does not require proof beyond reasonable doubt, but rather substantial evidence demonstrating the employee’s misconduct. The CA also noted that Celiz was afforded procedural due process, as she was given notice of the charges against her, an opportunity to explain, and access to company records. Ultimately, the CA found no grave abuse of discretion on the part of the labor tribunals.

Dissatisfied with the CA’s ruling, Celiz filed a Petition for Review on Certiorari with the Supreme Court, arguing that the CA failed to adhere to the Court’s pronouncements on loss of trust and confidence and procedural due process. Celiz contended that the evidence against her was insufficient and that her dismissal was motivated by personal animosity rather than legitimate business concerns. She cited the case of Lima Land, Inc. v. Cuevas, which held that loss of trust and confidence must be genuine and supported by substantial evidence.

However, the Supreme Court denied the petition, affirming the CA’s decision. The Court reiterated that factual findings of quasi-judicial bodies like the NLRC, if supported by substantial evidence, are accorded respect and finality. It emphasized that the Labor Arbiter, NLRC, and CA were unanimous in finding that Celiz was not illegally dismissed, and therefore, the Court saw no reason to re-evaluate the evidence. Furthermore, the Supreme Court found that there was substantial evidence demonstrating that Celiz had failed to liquidate her cash advances, providing just cause for her dismissal.

The Court emphasized the principle that in cases of dismissal for breach of trust and confidence, proof beyond reasonable doubt is not required. Instead, it is sufficient that the employer had reasonable grounds to believe that the employee was responsible for misconduct that rendered her unworthy of the trust demanded by her position. In this case, the Court found that Cord Chemicals had discharged its burden of proof, presenting sufficient evidence to justify the dismissal.

Moreover, the Supreme Court affirmed that Cord Chemicals had observed the requirements of procedural due process. Celiz was given a Notice to Explain outlining the charges against her, and she was granted access to company records to prepare her defense. Despite being given ample opportunity, Celiz was only able to liquidate a small portion of the cash advances, leading to her dismissal. The Court found no evidence of ill motive or bad faith on the part of Cord Chemicals, noting that the company had initially been willing to grant Celiz a graceful exit until the discovery of the unliquidated advances.

The Supreme Court’s decision reinforces the employer’s right to terminate employees for loss of trust and confidence when there is substantial evidence of misconduct. It also highlights the importance of procedural due process, ensuring that employees are given notice of the charges against them and an opportunity to defend themselves. This decision provides clarity on the standards for just cause termination and serves as a reminder to employees of the importance of maintaining the trust placed in them by their employers.

FAQs

What was the key issue in this case?	The key issue was whether Mary June Celiz was illegally dismissed by Cord Chemicals, Inc. based on the grounds of breach of trust and loss of confidence due to unliquidated cash advances.
What was the employer’s justification for dismissing Celiz?	Cord Chemicals justified Celiz’s dismissal based on her failure to liquidate a substantial amount of cash advances, which they argued constituted a serious breach of trust and confidence, given her high-ranking position in the company.
What did Celiz argue in her defense?	Celiz argued that her dismissal was motivated by personal animosity, specifically the jealousy of her employer, Leonor Sanz, and that she was not given a fair opportunity to defend herself against the charges.
What did the Labor Arbiter and NLRC decide?	The Labor Arbiter and the NLRC both ruled in favor of Cord Chemicals, finding that Celiz’s dismissal was for just cause and after observance of due process, thus upholding the legality of her termination.
What was the Court of Appeals’ ruling?	The Court of Appeals affirmed the decisions of the Labor Arbiter and NLRC, stating that Cord Chemicals had presented clear and compelling proof of Celiz’s failure to account for the unliquidated advances and that she was afforded procedural due process.
What was the Supreme Court’s decision?	The Supreme Court denied Celiz’s petition, affirming the Court of Appeals’ decision. The Court found that there was substantial evidence demonstrating that Celiz had failed to liquidate her cash advances, providing just cause for her dismissal.
What constitutes ‘substantial evidence’ in cases of loss of trust?	In cases of loss of trust, substantial evidence does not require proof beyond reasonable doubt. It is sufficient that the employer had reasonable grounds to believe that the employee was responsible for misconduct that rendered them unworthy of the trust demanded by their position.
What is required for procedural due process in termination cases?	Procedural due process requires that the employee be given a notice to explain the charges against them, an opportunity to be heard and defend themselves, and a subsequent notice of the employer’s decision to terminate their employment.

The Supreme Court’s decision in this case underscores the importance of trust and accountability in the employer-employee relationship. By upholding the employer’s right to terminate an employee for breach of trust based on substantial evidence of misconduct, the Court reinforces the principle that employees in positions of responsibility must be held to a high standard of honesty and integrity.

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: MARY JUNE CELIZ VS. CORD CHEMICALS, INC., G.R. No. 200352, July 20, 2016