Not work related

What must be proven in order that loss of trust and confidence may constitute a just cause for dismissal of a employee? This is answered in this case of Jim.

Jim was employed by bank on May 25, 1998 as Assistant Vice President (AVP) and Head of the newly created Visa Card Department. When this department was however re-organized and reduced into a mere unit, Jim was reassigned as Head of the Marketing and Operations of the Jewelry Department with the same rank of AVP on April 5, 1999. Assigned to Head the Visa Card Unit was Margie assisted by Rose as Processor and Lina as bookkeeper under the direct   supervision of the Bank’s Senior Vice President (SVP).

In or about May 1999, Greg, one of the Bank’s Visa Card holders went to Jim and handed to the latter 67 accomplished Visa Card applications contained in an envelope apparently believing that Jim still headed the Visa Card Unit. Jim accepted the envelope and immediately handed it over to the Unit Head Margie who scribbled marginal annotations on the applications stating “c/o of Jim”. The 67 applications were then subsequently approved by the Unit apparently without going through the usual process. But as it turned out later, all the said applications became past due with an accumulated principal balance of P6,281,443.90 plus P1,157,490.08 interest and service fees.

Thus Margie wrote Greg asking him to assist the bank in the collection of the Visa accounts he referred to them. On the other hand upon learning of the status of the account, Jim also sent a memo to the SVP recommending the immediately filing of the estafa charges against Greg. He also suggested that they ask and coordinate with other banks where Greg has deposits, to freeze the said accounts.

Greg then arranged a meeting with the Bank officials. Attending the meeting were Margie and Jim. After the meeting Jim also sent a memo to the Vice President for audit department and the Senior manager of the legal department summarizing what happened at the meeting and reiterating his suggestion to file a case against Greg and even look into the inside job angle in the approval of the applications.

But instead of heeding his suggestions, the bank through it Vice President for Operations sent a memo to Jim asking him to explain why no disciplinary action should be taken against him for referring/endorsing the fictitious Visa card applications. But despite Jim’s explanation that he had no participation in the processing of the Visa card applications as he merely referred said applications to the Visa Card Unit, as he was already transferred to the Jewelry Department as Head, the bank still terminated his services on September 26, 2000 for breach of trust and confidence. So Jim filed a complaint before the NLRC Labor Arbiter for illegal dismissal, illegal confiscation of car with prayer for payment of vacation/sick leaves, 13th month pay, damages, attorney’s fees and full back wages.

For its defense, the bank presented Margie and Rose who corroborated each other in saying that no credit investigation and residence checking were conducted on the applications endorsed by Greg because there was a specific instruction from Jim for them not to conduct said investigation and validation as he was personally vouching for the existence and validity of said accounts. So it has the prerogative to dismiss Jim because of loss of trust and confidence. Was the bank correct?

No. Jim indeed held the position of trust and confidence as Assistant Vice President, so the first requisite for the dismissal on the ground of loss of trust and confidence is undoubtedly present here.

The second requisite is that Jim must have committed an act which would justify such loss of trust and confidence and that act must be work related showing him unfit to continue working for the bank. These acts must be clearly and convincingly established although proof beyond reasonable doubt is not necessary. The bank’s evidence fails to meet this standard.

There is no concrete proof that Jim participated in the approval of the questioned Visa Card accounts. There is no showing that Jim directed Margie to approve the applications without passing through the process. The alleged marginal notations on the applications i.e. “c/o Jim” were scribbled by Margie. Besides, such annotations cannot be construed as a directive coming from Jim to do away with the existing policy on the approval of the applications for Visa card. The mere act of handing the already accomplished forms cannot be interpreted as favorable endorsement with instructions not to conduct the usual credit investigations and verification of applicants. To lay the blame on Jim would be the height of injustice considering that at that time he no longer has authority to pass upon such applications. Moreover, the act of betrayal of trust, if any, must have been committed by Jim in connection with the performance of his function or position. In this case, Jim was no longer connected with the Visa Credit Card Unit when the 67 applications were approved. His act of forwarding the already accomplished applications to the Visa Credit Card Unit is therefore even proper as he is not in any position to act on them. Verily, Jim who has nothing to do with the approval of the Visa Card applications should not be made answerable for the imprudence and indiscretion of Margie and Rose.

Jim’s dismissal is therefore illegal. He must be paid back wages from the time of illegal termination up to the date of the decision; separation in lieu of reinstatement at the rate of one month salary for every year of service, 13t month pay and service incentive leave pay plus 10% attorney’s fees (Jerusalem vs. Keppel Bank, G.R. 169564, April 6, 2011, 647 SCRA,313).

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