Lagahit vs. Pacific Concord Case Digest

Jennifer C. Lagahit vs. Pacific Concord Container Lines/Monete Cuenca

G.R. No. 177680. January 13, 2016

BERSAMIN, J.:

Doctrines Involved:

Every resignation presupposes the existence of the employer-employee relationship; hence, there can be no valid resignation after the fact of termination of the employment simply because the employee had no employer-employee relationship to relinquish.

There are two classes of employees vested with trust and confidence. To the first class belong the managerial employees or those vested with the powers or prerogatives to lay down management policies and to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees or effectively recommend such managerial actions. The second class includes those who in the normal and routine exercise of their functions regularly handle significant amounts of money or property.

Facts:

Respondent Pacific Concord Container Lines (Pacific Concord), a domestic corporation engaged in cargo forwarding, hired the petitioner as an Account Executive/Marketing Assistant. In January 2002, Pacific Concord promoted her as a sales manager with the monthly salary rate of P25,000.00, and provided her with a brand new Toyota Altis plus gasoline allowance. On November 8, 2002, she reported for work at 9:00 a.m. and left the company premises at around 10:30 a.m. to make client calls. At 1:14 p.m. of that day, she received the following text message from respondent Monette Cuenca, to wit:

TODAY U R OFFICIALY NT CONNECTED WITH US.

Sender: MONETTE

+639173215330

Sent: 8-Nov-2002

13:14:01

Cuenca also sent a text message to Roy Lagahit, the petitioner's husband, as follows:

IBALIK KARON DAYON ANG AUTO OG PALIHUG LANG KO OG KUHA SA NYONG BUTANG OG DI NAKO MO STORY A NI JENIFER. IL WAIT

Sender: MONETTE

+639173215330

Sent: 8-Nov-2002

12:50:54

The petitioner immediately tried to contact Cuenca, but the latter refused to take her calls. On the same day, the petitioner learned from clients and friends that the respondents had disseminated notices, flyers and memos informing all clients of Pacific Concord that she was no longer connected with the company as of November 8, 2002. Pacific Concord also caused the publication of the notice to the public in the Sunstar Daily issue of December 15, 2002.

On November 13, 2002, the petitioner sent a letter to Pacific Concord contending that she was deprived of the due process that would have given her the chance to formally present her side. Despite this, she have accepted her fate and asked Cuenca to arrange and expedite settlement of all benefits due to her under the law.

On November 26, 2002, the petitioner filed her complaint for constructive dismissal in the Regional Arbitration Branch of the National Labor Relations Commission (NLRC) in'Cebu City.

In their position paper, the respondents denied having terminated the petitioner despite the fact that there were valid grounds to do so. They insisted that the petitioner had betrayed the trust and confidence reposed in her when she: (a) used the company-issued vehicle for her own personal interest; (b) failed to achieve her sales quota, and to enhance and develop the Sales Department; (c) enticed her marketing assistant, Jo Ann Otrera, to resign and join her in transferring to another forwarding company; (d) applied for other employment during office hours and using company resources; (e) solicited and offered the services of Seajet International, Inc. during her employment with Pacific Concord; (f) received a personal commission from Wesport Line, Inc. for container shipments; and (g) illegally manipulated and diverted several containers to Seajet International.

Ruling of the Labor Arbiter

The Labor Arbiter rendered a decision on June 9, 2003, declaring that the respondents were not able to prove that the petitioner had committed acts constituting betrayal of trust; that they had not informed her prior to her dismissal of the offenses she had supposedly committed; and that owing to the illegality of the dismissal, they were liable for backwages and separation pay.

Ruling of the NLRC

On appeal, the NLRC affirmed the ruling of the Labor Arbiter finding that the respondents are guilty of illegally dismissing the complainant from her employment, but MODIFYING his award for separation pay computed at one (1) month salary for every year of service, a fraction of at least six (6) months being considered one (1) year from the complainant's first day of employment in February 2000 UNTIL THE FINALITY OF THIS DECISION; and backwages starting November 8, 2002 UNTIL THE FINALITY OF THIS DECISION.

Decision of the CA

On May 10, 2006, the CA promulgated its decision granting the respondents' petition for certiorari, and annulling the decision of the NLRC. It pronounced that there were sufficient justifications to terminate the petitioner's services for disloyalty and willful breach of trust.

Issues:

1. Whether Lagahit resigned from her employment.
2. Whether Lagahit breached her employer's trust.

Rulings of the Court:

1. Lagahit did not resign from her employment.

In cases of unlawful dismissal, the employer bears the burden of proving that the termination was for a valid or authorized cause, but before the employer is expected to discharge its burden of proving that the dismissal was legal, the employee must first establish by substantial evidence the fact of her dismissal from employment. In this case, the petitioner proved the overt acts committed by the respondents in abruptly terminating her employment through the text messages sent by Cuenca to the petitioner and her husband, as well as the notices distributed to the clients and published in the Sun Star. It is notable that the respondents did not deny or controvert her evidence on the matter. Thereby, she showed Pacific Concord's resolve to terminate her employment effective November 8, 2002.

On the other hand, the respondents' insistence that the petitioner had resigned was bereft of factual support. As a rule, the employer who interposes the resignation of the employee as a defense should prove that the employee voluntarily resigned. A valid resignation is the voluntary act of an employee who finds herself in a situation where she believes that personal reasons cannot be sacrificed in favor of the exigency of the service and that she has no other choice but to disassociate herself from employment. The resignation must be unconditional and with a clear intention to relinquish the position.

The facts and circumstances before and after the petitioner's severance from her employment on November 8, 2002 did not show her resolute intention to relinquish her job. Indeed, it would be unfounded to infer the intention to relinquish from her November 13, 2002 letter, which, to us, was not a resignation letter due to the absence therefrom of anything evincing her desire to sever the employer-employee relationship. The letter instead presented her as a defenseless employee unjustly terminated for unknown reasons who had been made the subject of notices and flyers informing the public of her unexpected termination. It also depicted her as an employee meekly accepting her unexpected fate and requesting the payment of her backwages and accrued benefits just to be done with the employer.

For sure, to conclude that the petitioner resigned because of her letter of November 13, 2002 is absurd in light of the respondents having insisted that she had been terminated from her employment earlier on November 8, 2002. In that regard, every resignation presupposes the existence of the employer-employee relationship; hence, there can be no valid resignation after the fact of termination of the employment simply because the employee had no employer-employee relationship to relinquish.

2. Lagahit did not breach her employer's trust; her dismissal was, therefore, illegal.

Article 282(c) of the Labor Code authorizes an employer to dismiss an employee for committing fraud, or for willful breach of the trust reposed by the employer. However, loss of confidence is never intended to provide the employer with a blank check for terminating its employee. For this to be a valid ground for the termination of the employee, the employer must establish that: (1) the employee must be holding a position of trust and confidence; and (2) the act complained against would justify the loss of trust and confidence.

There are two classes of employees vested with trust and confidence. To the first class belong the managerial employees or those vested with the powers or prerogatives to lay down management policies and to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees or effectively recommend such managerial actions. The second class includes those who in the normal and routine exercise of their functions regularly handle significant amounts of money or property. Cashiers, auditors, and property custodians are some of the employees in the second class.

Petitioner's position as sales manager did not immediately make the petitioner a managerial employee. The actual work that she performed, not her job title, determined whether she was a managerial employee vested with trust and confidence. Her employment as sales manager was directly related with the sales of cargo forwarding services of Pacific Concord, and had nothing to do with the implementation of the management's rules and policies. As such, the position of sales manager came under the second class of employees vested with trust and confidence. Therein was the flaw in the CA's assailed decision. Although the mere existence of the basis for believing that the managerial employee breached the trust reposed by the employer would normally suffice to justify a dismissal, we should desist from applying this norm against the petitioner who was not a managerial employee.

At any rate, the employer must present clear and convincing proof of an actual breach of duty committed by the employee by establishing the facts and incidents upon which the loss of confidence in the employee may fairly be made to rest. The required amount of evidence for doing so is substantial proof. With these guidelines in mind, we cannot hold that the evidence submitted by the respondents (consisting of the three affidavits) sufficiently established the disloyalty of the petitioner. The affidavits did not show how she had betrayed her employer's trust. Specifically, the affidavit of Russell B. Noel only stated that she and her husband Roy had met over lunch with Garcia Imports and a certain Wilbur of Sea-Jet International Forwarder in the first week of November 2002. To conclude that such lunch caused Pacific Concord to lose its trust in the petitioner would be arbitrary.

In her affidavit, Jo Ann Otrera declared that the petitioner had called other forwarding companies to inquire about any vacant positions, and that the petitioner had enticed her to transfer to another company. However, such declarations did not provide the sufficient basis to warrant the respondents' loss of confidence in the petitioner.

Considering that the petitioner's duties related to the sales of forwarding services offered by Pacific Concord, her calling other forwarding companies to inquire for vacant positions did not breach the trust reposed in her as sales manager. Such act, being at worst a simple act of indiscretion, did not constitute the betrayal of trust that merited the extreme penalty of dismissal from employment. We remind that dismissal is a penalty of last resort, to be meted only after having appreciated and evaluated all the relevant circumstances with the goal of ensuring that the ground for dismissal was not only serious but true.

WHEREFORE, the Court GRANTS the petition for review on certiorari; REVERSES and SETS ASIDE the decision promulgated on May 10, 2006 by the Court of Appeals; REINSTATES the decision of the National Labor Relations Commission rendered on December 15, 2004 subject to the MODIFICATION that the total monetary awards shall earn interest at the rate of 6% per annum from the finality of this decision until full satisfaction; and ORDERS the respondents to pay the costs of suit.