The Supreme Court affirmed that Roberto Cuizon was illegally dismissed by Lufthansa Technik Philippines, Inc. (LTP). The Court emphasized that employers must provide substantial evidence of willful misconduct to justify dismissal based on loss of trust and confidence. This decision underscores the importance of protecting employees from arbitrary termination and reinforces the principle that employers bear the burden of proving a valid cause for dismissal, ensuring that employees’ rights to security of tenure are respected.

High Stakes at High Altitude: When Trust Takes a Nosedive in Aircraft Maintenance

Lufthansa Technik Philippines, Inc. (LTP), a major player in aircraft maintenance, repair, and overhaul (MRO), terminated Roberto Cuizon, an MA2 Duty Manager, citing loss of trust and confidence due to two incidents: concealing an accidental light-up of an aircraft engine and failing to observe safety guidelines during aircraft towing, which allegedly resulted in damage to an aircraft. The central legal question is whether LTP provided sufficient evidence to justify the termination based on these grounds, or whether Cuizon’s dismissal was, in fact, illegal. The Labor Arbiter initially sided with LTP, but the Court of Appeals (CA) reversed this decision, finding that Cuizon was illegally dismissed. The Supreme Court ultimately upheld the CA’s ruling, providing a significant analysis of the requirements for validly dismissing an employee based on loss of trust and confidence, and gross negligence.

The Supreme Court, in its analysis, reiterated the principle that it may review factual issues in labor cases when the findings of the CA and labor tribunals are contradictory. The Court emphasized that while it generally defers to the factual findings of lower courts and administrative bodies, it will not hesitate to examine the facts when there is a clear conflict in their conclusions. This is particularly crucial in cases involving termination of employment, where the employee’s livelihood and security of tenure are at stake. The importance of this power cannot be overstated because the review protects employees from potentially unjust decisions and ensures that labor laws are applied fairly and consistently.

The Court delved into the requirements for a valid dismissal based on loss of trust and confidence, as outlined in Article 297 (formerly 282) of the Labor Code. This provision allows an employer to terminate an employee for “[f]raud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative.” The Court explained that for this ground to be valid, three requisites must be met: first, the employee must hold a position of trust and confidence; second, there must be an act that would justify the loss of trust and confidence; and third, the loss of trust must relate to the employee’s performance of duties. In this context, the Court distinguished between managerial employees and rank-and-file personnel, noting that a different standard applies to each when assessing loss of trust and confidence.

In Cadavas v. Court of Appeals, the Supreme Court explained the two classes of positions of trust: managerial employees and employees who handle significant amounts of money or property. Managerial employees are vested with the power to lay down management policies and effectively recommend managerial actions. The second class consists of cashiers, auditors, property custodians, etc. As the Supreme Court noted in Casco v. National Labor Relations Commission, loss of trust and confidence is premised on the idea that the employee holds a position where the employer places greater trust, expecting greater fidelity to duty. The betrayal of this trust is the essence of the offense for which an employee is penalized. The Court stressed that loss of trust and confidence should not be used as a pretext for illegal, improper, or unjustified causes. To be valid, the loss of trust must be genuine and not a mere afterthought to justify an earlier action taken in bad faith.

The Supreme Court found that Lufthansa Technik Philippines, Inc. (LTP) failed to substantially prove the second requisite—that there was an act that would justify the loss of trust and confidence. The Court emphasized that the breach of trust must be willful, meaning it must be done intentionally, knowingly, and purposely, without justifiable excuse. In this case, the Court was not persuaded that Cuizon’s actions met this standard. Regarding the accidental light-up incident, the Court pointed out that Cuizon immediately informed Loquellano (his superior) and submitted an incident report. Furthermore, the report submitted by Cuizon was based on his personal findings and appreciation of facts related to the accidental aircraft engine light-up incident. This was the most precise information he could gather at the time. The Court gave credence to his claim that he could not immediately conclude that there was an accidental light-up, as it required confirmation using a boroscope.

Concerning the towing incident, the Court found that Cuizon did not willfully, purposely, and without justifiable excuse disregard the towing precautions. The Court highlighted that towing is a shared responsibility, and Cuizon could not be faulted if other members of the towing crew left their posts without permission or authority. It found that LTP failed to prove that Cuizon consciously allowed some members of the towing crew to leave their posts. The Court also gave credence to Cuizon’s claim that he did not abandon the towing crew but only proceeded to do other tasks to support the leak check. The Court’s analysis underscores that employers must demonstrate that the employee’s actions were intentional and without justifiable excuse to validly invoke loss of trust and confidence as a ground for dismissal.

The Supreme Court also addressed the issue of whether Cuizon was liable for gross negligence. It reiterated that neglect of duty, as a ground for dismissal, must be both gross and habitual. Gross negligence implies a want or absence of or a failure to exercise slight care or diligence, or the entire absence of care. Habitual neglect implies repeated failure to perform one’s duties for a period of time. The Court emphasized that in termination cases, the employer bears the burden of proving that the employee’s dismissal was for a valid and authorized cause. If the employer fails to prove that the dismissal was valid, the dismissal is unjustified, and thus illegal.

In Cuizon’s case, the Court found that Lufthansa Technik Philippines, Inc. (LTP) failed to discharge its burden of proof. The company failed to show that Cuizon did not exercise even slight care or diligence, which caused the grounding of and damage to the aircraft during the towing operation. The Court gave credence to Cuizon’s claims that Sarmiento, the licensed Headset Man, could not perform his task because he was assigned to perform a leak check on the aircraft’s engine. The Court also noted that the aircraft was towed with the flaps fully extended because they could not be retracted due to a problem with the hydraulic system.

Furthermore, the Court highlighted the involvement and admissions of other personnel who were part of the towing crew. For instance, radioman and mechanic Abelar Pilaza had testified and admitted that he decided not to ask for clearance from the tower when the aircraft was being towed. The Court found that Cuizon could not be faulted if, without his knowledge and authorization, members of the towing crew decided to deviate from the standard operating procedure. LTP also failed to prove that Cuizon was negligent when he allegedly concealed the accidental light-up incident or provided false information. The Court found that Cuizon performed his task in accordance with the rules and procedures of Lufthansa Technik Philippines, Inc. (LTP). Considering Cuizon’s 32 years of service, the Court found it incongruous for him to deliberately act recklessly on his job, especially since his employer’s line of business involves the lives and safety of airline passengers.

Finally, the Supreme Court addressed the issue of remedies for illegal dismissal, finding that reinstatement was no longer feasible due to the strained relations between Lufthansa Technik Philippines, Inc. (LTP) and Cuizon. Consequently, the Court ordered the payment of separation pay in lieu of reinstatement, computed at one month’s salary for every year of service. In addition, the Court affirmed the award of full backwages, inclusive of allowances and other benefits, from the time of illegal dismissal until the finality of the decision. All monetary awards were ordered to earn legal interest at the rate of six percent (6%) per annum from the date of finality of the Decision until full satisfaction.

FAQs

What was the key issue in this case?	The key issue was whether Roberto Cuizon was validly dismissed by Lufthansa Technik Philippines, Inc. (LTP) for loss of trust and confidence and gross negligence, or whether his dismissal constituted illegal termination.
What is the legal basis for dismissing an employee for loss of trust?	Article 297 of the Labor Code allows an employer to terminate an employee for fraud or willful breach of trust, but requires substantial evidence that the breach was intentional, knowing, and without justifiable excuse.
What are the requirements for a valid dismissal based on loss of trust and confidence?	The employee must hold a position of trust, there must be an act justifying loss of trust, and the loss of trust must relate to the employee’s performance of duties.
What is the difference in the application of loss of trust for managerial and rank-and-file employees?	For managerial employees, the mere existence of a basis for believing the employee breached the employer’s trust suffices for dismissal; for rank-and-file employees, proof of involvement in the alleged events is required.
What constitutes gross negligence as a ground for dismissal?	Gross negligence implies a want or absence of or a failure to exercise slight care or diligence, or the entire absence of care. It must also be habitual, implying repeated failure to perform one’s duties.
Who bears the burden of proof in termination cases?	The employer bears the burden of proving that the employee’s dismissal was for a valid and authorized cause.
What remedies are available to an illegally dismissed employee?	An illegally dismissed employee is entitled to reinstatement, full backwages, and, if reinstatement is not feasible, separation pay.
How is separation pay calculated in cases of illegal dismissal?	Separation pay is typically computed at one month’s salary for every year of service, including the period where backwages are awarded.
What interest rate applies to monetary awards in illegal dismissal cases?	All monetary awards earn legal interest at the rate of six percent (6%) per annum from the date of finality of the Decision until full satisfaction.

In conclusion, the Supreme Court’s decision in this case reinforces the importance of due process and substantial evidence in termination cases. It serves as a reminder to employers that loss of trust and confidence and gross negligence are not catch-all phrases to justify dismissals without a valid and proven basis. The ruling underscores the protection afforded to employees under the Labor Code, ensuring that their right to security of tenure is upheld.

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: Lufthansa Technik Philippines, Inc. v. Cuizon, G.R. No. 184452, February 12, 2020