The Supreme Court ruled that an employee holding a position of trust who violates company policy, even with good intentions, can be validly dismissed for breach of trust. This decision emphasizes the high standard of conduct expected from managerial employees and reinforces the employer’s right to terminate employment when trust is compromised, safeguarding the integrity of workplace policies and operational efficiency.

When Helping Family Hurts Your Career: The Nurse Supervisor’s Dilemma

Minda Topinio Cadavas, a nurse supervisor at Davao Doctors Hospital (DDH), faced termination after she arranged for medicines and supplies used for her aunt’s treatment to be obtained without proper recording, intending to replace them later. This action, though driven by a desire to alleviate her aunt’s financial burden, violated hospital policy. The core legal question revolved around whether this act constituted a valid ground for dismissal based on loss of trust and confidence, given her supervisory role and the circumstances surrounding the incident.

The case began when Cadavas’s aunt was admitted to DDH with stage four breast cancer. To reduce her aunt’s mounting hospital bills, Cadavas, with the assistance of some hospital staff, managed to secure supplies and medicines from the Emergency Department and Operating Room Central Supply Service. These items were not officially recorded, with the understanding that Cadavas would replace them later, purchasing them at a lower cost outside the hospital. The total value of the items was approximately P6,000.00, and Cadavas eventually replaced them. However, this act prompted an investigation by DDH, leading to a notice to explain and subsequent administrative hearing.

In her defense, Cadavas explained that she had consulted with a nursing aide about the possibility of replacing the supplies used for her aunt, and the aide agreed. She admitted being aware of the hospital’s policy against purchasing medicines outside the hospital and borrowing supplies for personal use, but claimed it was a common practice to replace items instead of charging them to the patient. During the administrative hearing, she acknowledged her violation but emphasized her intention to help her aunt, stating that her actions were not intended to evade detection and were done with the knowledge of some hospital staff. Ultimately, DDH terminated her employment, citing dishonesty and loss of trust and confidence.

Cadavas then filed a complaint for illegal dismissal, arguing that the penalty was too severe for her first offense in 23 years of service and that she was denied due process during the administrative hearing. The Labor Arbiter initially ruled in her favor, citing her long service and the relaxed enforcement of the hospital’s policy, referencing the case of Conti v. National Labor Relations Commission, which held that “violation of a rule or policy, which in its implementation has oftentimes been relaxed, may not lawfully give rise to termination of employment of the violator.” However, the National Labor Relations Commission (NLRC) reversed this decision, finding that as a nurse supervisor, Cadavas held a position of trust and that her actions constituted a betrayal of that trust. The Court of Appeals affirmed the NLRC’s decision, stating that the requirements for dismissal on the ground of loss of trust and confidence were present.

The Supreme Court, in its analysis, emphasized the critical elements required to justify dismissal based on loss of trust and confidence. The Court reiterated that, the employee must hold a position of trust and confidence, and there must be an act that warrants the loss of trust. Moreover, such loss must relate to the employee’s duties and responsibilities. The Court referenced Bristol Myers Squibb (Phils.), Inc. v. Baban to distinguish between the two classes of positions of trust: managerial employees, who have the power to lay down management policies, and employees such as cashiers or property custodians, who handle significant amounts of money or property. Cadavas, as a nurse supervisor, fell into the first category.

The Court found that Cadavas’s actions constituted a willful breach of trust. Despite knowing the hospital’s policy against purchasing medicines and supplies outside the hospital, she intentionally violated it. The Supreme Court quoted from the notice of termination, highlighting the hospital’s position: “Your abovementioned act of getting medicines and supplies without having the transaction recorded is against hospital policy and practice. It is an act of dishonesty.”. The Court reasoned that Cadavas’s position as a supervisor required her to uphold and enforce hospital policies. By circumventing these policies and involving a subordinate in the process, she not only breached her duty but also caused a potential loss of income for DDH. The fact that she eventually replaced the items did not negate the initial violation and the breach of trust.

Furthermore, the Supreme Court addressed Cadavas’s argument that the hospital had tolerated similar practices in the past, making her dismissal unjustifiable. The Court clarified that even if such practices existed, Cadavas’s awareness of the formal policy and her decision to violate it demonstrated a clear breach of trust. Additionally, the Court affirmed that Cadavas was afforded due process. She received a notice to explain the charges against her, submitted a written explanation, and participated in an administrative hearing. The Court emphasized that the essence of due process is the opportunity to be heard, not necessarily an actual hearing with legal counsel.

The Supreme Court addressed the issue of separation pay, distinguishing the case from Bristol Myers Squibb (Phils.) Inc. v. Baban, where separation pay was granted to a validly dismissed employee. The Court cited PLDT v. NLRC and Central Philippines Bandag Retreaders, Inc. v. Diasnes, emphasizing that separation pay is generally not granted when the dismissal is based on serious misconduct or willful breach of trust. The Court stated, “We, therefore, find that in addition to serious misconduct, in dismissals based on other grounds under Art. 282, like willful disobedience, gross and habitual neglect of duty, fraud or willful breach of trust, and commission of a crime against the employer or his family, separation pay should not be conceded to the dismissed employee.” As Cadavas was dismissed for willful breach of trust, she was not entitled to separation pay.

FAQs

What was the key issue in this case?	The central issue was whether the dismissal of Minda Topinio Cadavas, a nurse supervisor, for violating hospital policy by obtaining supplies without proper recording, was valid based on loss of trust and confidence.
What was Cadavas’s role in the hospital?	Cadavas was a nurse supervisor at Davao Doctors Hospital, responsible for overseeing the nursing staff in the Delivery Room Operating Room (OR-DR), Neonatal Intensive Care Unit (ICU), and Hemodialysis Departments.
Why was Cadavas dismissed from her job?	Cadavas was dismissed for dishonesty and loss of trust and confidence after she obtained medicines and supplies for her aunt’s treatment without proper recording, violating hospital policy.
Did Cadavas admit to violating hospital policy?	Yes, Cadavas admitted that she was aware of the hospital’s policy against purchasing medicines outside the hospital and borrowing supplies for personal use, but she chose to violate the policy to help her aunt.
What is the legal basis for dismissing an employee based on loss of trust?	Article 282 of the Labor Code allows an employer to terminate employment for fraud or willful breach of trust by the employee.
What are the requirements for a valid dismissal based on loss of trust and confidence?	The employee must hold a position of trust and confidence, and there must be an act that justifies the loss of trust and confidence, related to the employee’s performance of duties.
Was Cadavas entitled to separation pay?	No, the Supreme Court ruled that Cadavas was not entitled to separation pay because she was validly dismissed for willful breach of trust, which is a ground under Article 282 of the Labor Code that does not warrant separation pay.
What was the Court’s ruling on due process in this case?	The Court found that Cadavas was afforded due process because she received a notice to explain the charges against her, submitted a written explanation, and participated in an administrative hearing.

This case underscores the importance of adhering to company policies, especially for employees in positions of trust. While the desire to help family is understandable, it cannot justify actions that compromise the integrity of workplace rules and potentially cause financial harm to the employer. The Supreme Court’s decision serves as a reminder that upholding ethical standards and maintaining the employer’s trust are paramount in the employment relationship.

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: MINDA TOPINIO CADAVAS v. COURT OF APPEALS, G.R. No. 228765, March 20, 2019