YOLANDO T. BRAVO vs. URIOS COLLEGE

FACTS: Bravo was employed as a part-time teacher in 1988 by Urios College, now called Father Saturnino Urios University. In addition to his duties as a part-time teacher, Bravo was designated as the school's comptroller from June 1, 2002 to May 31, 2002.

Urios College organized a committee to formulate a new "ranking system for nonacademic employees for school year 2001-2002.

The proposed ranking system for school year 2001—2002 was presented to Bravo for comments.[10] Bravo recommended that "the position of Comptroller should be classified as a middle management position [because it was] informally merged with  the position of [V]ice-[P]resident for [F]inance.

The committee allegedly agreed with Bravo and accepted his recommendations.

Later, Bravo obtained his employee ranking slip which showed his evaluation score and the change of his rank "from office head to middle manager-level IV." The change, however, was merely superimposed. The employee ranking slip bore the signatures of the Human Resources Department Head, the Vice-President for Administration, and the President of Urios College.

The implementation of the new ranking system for non-academic employees and administrators for school year 2001-2002 and the corresponding schedule of salary adjustments were reflected on the October 15, 2001 payroll. This was opposed by several individuals within the school.

In October 2004, Urios College organized a committee to review the ranking system implemented during school year 2001-2002. In its report, the committee found that the ranking system for school year 2001-2002 caused salary distortions among several employees. There were also discrepancies in the salary adjustments of Bravo and of two (2) other employees, namely, Nena A. Turgo and Cherry I. Tabada. The committee discovered that "the Comptroller's Office solely prepared and implemented the [s]alary [a]djustment [s]chedule" without prior approval from the Human Resources Department. The committee recommended, among others, that Bravo be administratively charged for serious misconduct or willful breach of trust under Article 282 of the Labor Code. Bravo allegedly misclassified several positions and miscomputed his and other employees' salaries.

On March 16, 2005, Bravo received a show cause memo requiring him to explain in writing why his services should not be terminated for his alleged acts of serious misconduct.

Hearings were conducted on April 5, 2005, April 9, 2005, and once in May 2005, after which the parties submitted their respective position papers.

The committee found that Bravo floated the idea of his salary adjustment, which Urios College never formally approved. The committee also discovered an irregularity in the implementation of the ranking system for school year 2001—2002.

Flordeliz V. Rosero (Rosero) of the Human Resources Department attested that Bravo failed to follow the school's protocol in computing employees' salaries.

According to Rosero, the Human Resources Department would prepare a summary table for each department containing the names of employees, their respective ranks, and the points they earned from their regular evaluation. The accomplished summary tables were forwarded to the Comptroller's Office, which would then designate each employee's salary based on a salary scale. When the ranking system for school year 2001-2002 was implemented, the Comptroller's Office prepared its own summary table, which did not indicate each employee's rank or bear the signature of the Human Resources Department Head.

Bravo was found guilty of serious misconduct for which he was ordered to return the sum of P179,319.16, representing overpayment of his monthly salary.

On July 25, 2005, Urios College notified Bravo of its decision to terminate his services for serious misconduct and loss of trust and confidence. Upon receipt of the termination letter, Bravo immediately filed before Executive Labor Arbiter Benjamin E. Pelaez (Executive Labor Arbiter Pelaez) a complaint for illegal dismissal with a prayer for the payment of separation pay, damages, and attorney's fees.

In the Decision dated December 27, 2005, Executive Labor Arbiter Pelaez dismissed the complaint for lack of merit.

In the Resolution dated January 31, 2007, the National Labor Relations Commission found that Bravo's dismissal from service was illegal.

In the Decision dated January 31, 2011, the Court of Appeals reversed the National Labor Relations Commission's Resolution and reinstated the decision of Executive Labor Arbiter Pelaez.

ISSUES: First, whether petitioner's employment was terminated for a just cause; 

Second, whether petitioner was deprived of procedural due process; and Finally, whether petitioner is entitled to the payment of separation pay, backwages, and attorney's fees.

HELD: First issue, Petitioner's dismissal from employment was valid.

Under Article 297 of the Labor Code, an employer may terminate the services of an employee for the following just causes.

To warrant termination of employment under Article 297(a) of the Labor Code, the misconduct must be serious or "of such grave and aggravated character." Trivial and unimportant acts are not contemplated under Article 297(a) of the Labor Code.

Recently, this Court has emphasized that the rank-and-file employee's act must have been "performed with wrongful intent" to warrant dismissal based on serious misconduct. Dismissal is deemed too harsh a penalty to be imposed on employees who are not induced by any perverse or wrongful motive despite having committed some form of misconduct.

There is no evidence that the position of Comptroller was officially reclassified as middle management by respondent.

Petitioner's employment ranking slip, if at all, only constituted proof of petitioner's evaluation score. It hardly represented the formal act of respondent in reclassifying the position of Comptroller. Hence, petitioner could not summarily assign to himself a higher salary rate without rendering himself unfit to continue working for respondent.

However, it appears that petitioner was neither induced nor motivated by any wrongful intent. He believed in good faith that respondent had accepted and approved his recommendations on the proposed ranking scale for school year 2001-2002. Nevertheless, due to the nature of his occupation, petitioner's employment may be terminated for willful breach of trust under Article 297(c), not Article 297(a), of the Labor Code. A dismissal based on willful breach of trust or loss of trust and confidence under Article 297 of the Labor Code entails the concurrence of two (2) conditions. First, the employee whose services are to be terminated must occupy a position of trust and confidence.

The second condition that must be satisfied is the presence of some basis for the loss of trust and confidence. This means that "the employer must establish the existence of an act justifying the loss of trust and confidence.

Petitioner was not an ordinary rank-and-file employee. His position of responsibility on delicate financial matters entailed a substantial amount of trust from respondent. The entire payroll account depended on the accuracy of the classifications made by the Comptroller. It was reasonable for the employer to trust that he had basis for his computations especially with respect to his own compensation. The preparation of the payroll is a sensitive matter requiring attention to detail. Not only does the payroll involve the company's finances, it also affects the welfare of all other employees who rely on their monthly salaries.

Petitioner's act in assigning to himself a higher salary rate without proper authorization is a clear breach of the trust and confidence reposed in him. In addition, there was no reason for the Comptroller's Office to undertake the preparation of its own summary table because this was a function that exclusively pertained to the Human Resources Department. Petitioner offered no explanation about the Comptroller's Office's deviation from company procedure and the discrepancies in the computation of other employees' salaries. Petitioner's position made him accountable in ensuring that the Comptroller's Office observed the company's established procedures. It was reasonable that he should be held liable by respondent on the basis of command responsibility.

Second issue, in this case, respondent complied with all the requirements of procedural due process in terminating petitioner's employment. Respondent furnished petitioner a show cause memo stating the specific grounds for dismissal. The show cause memo also required petitioner to answer the charges by submitting a written explanation. Respondent even informed petitioner that he may avail the services of counsel. Respondent then conducted a thorough investigation. Three (3) hearings were conducted on separate occasions. The findings of the investigation committee were then sent to petitioner. Lastly, petitioner was given a notice of termination containing respondent's final decision.

Ordinarily, employees play no part in selecting the members of the investigating committee. That petitioner was not given the chance to comment on the selection of the members of the investigating committee does not mean that he was deprived of due process. In addition, there is no evidence indicating that the investigating committee was biased against petitioner. Hence, there is no merit in petitioner's claim that he was deprived of due process.

Third issue, under Article 294 of the Labor Code, the reliefs of an illegally dismissed employee are reinstatement and full backwages. "Backwages is a form of relief that restores the income that was lost by reason of [the employee's] dismissal" from employment. It is "computed from the time that [the employee's] compensation was withheld [until] his [or her] actual reinstatement." However, when reinstatement is no longer feasible, separation pay is awarded. Considering that there was a just cause for terminating petitioner from employment, there is no basis to award him separation pay and backwages. There are also no factual and legal bases to award attorney's fees to petitioner.