Facts:

The case involves Rolando P. Ancheta (petitioner) versus Destiny Financial Plans, Inc. (respondent) and its representative Arsenio Bartolome. Rolando Ancheta was hired by Destiny Financial Plans, Inc. on December 1, 2002, as the Head of its Marketing Group with a monthly salary of Ninety Thousand Pesos (₱90,000.00). By February 2, 2004, during a Marketing Committee meeting called by Bartolome, Ancheta was unexpectedly informed about the management's intention for him to resign. Subsequently, on February 11, 2004, Ancheta received a notice to explain within 48 hours why his employment should not be terminated due to loss of confidence in his ability to perform his duties.

The notice outlined concerns about Ancheta’s management of the marketing group, noting poor sales performance and claims of unprofessional conduct, including a conflict of interest involving his son. Ancheta replied on February 13, asserting that the reasons for his dismissal were unfounded. Nevertheless, o

...

Facts:

Background of Employment and Job Description

• Petitioner, Rolando P. Ancheta, was hired on December 1, 2002, by respondent Destiny Financial Plans, Inc., a pre-need insurance company.
• He was appointed as Head of the Marketing Group with a compensation package of Ninety Thousand Pesos (P90,000.00) per month.
• His designated role also implied managerial responsibilities, whereby he was entrusted with the overall production and sales performance of the company.
• His job description included reorganizing, setting up, and managing various marketing teams (Traditional Sales, Network Sales, Military Sales, and Institutional Sales), reporting to the Board, and implementing strategic marketing and operational measures.

Events Leading up to the Alleged Dismissal

• On February 2, 2004, a Marketing Committee meeting was convened by respondent Arsenio Bartolome in the company’s conference room.
• Attendees included petitioner, Arsenio Bartolome, several marketing team leaders, and the company’s operations director.
• Unexpectedly during the meeting, respondent Bartolome announced that petitioner was to resign from the company.
• On February 11, 2004, petitioner received a show-cause letter from the company.
• The letter demanded that petitioner explain, within forty-eight (48) hours, why his services should not be terminated.
• The letter cited several allegations including:
• Failure to meet the projected performance targets, with sales figures ranging between only 20%-30% (and later less than 50%).
• Causing a monthly financial deficit of about P1 Million.
• Poor judgment and alarming behavior that could jeopardize the company’s future.
• Alleged failures regarding the liquidation of company funds.
• Apparent conflict of interest, exemplified by including his son in a binary slot arrangement.
• Instructing staff to keep certain matters “under wraps” regarding his conduct.
• The letter additionally mentioned that, despite initial willingness by management to allow a “graceful exit” or propose an agency arrangement, petitioner’s recent actions led to a foregone conclusion of termination.
• It demanded the turnover of company property, including an Executive elevator key and duplicate keys to the company car.
• On February 13, 2004, petitioner submitted his letter of explanation.
• In his response, petitioner corrected his title from “Marketing Director” to “Head of Marketing Group.”
• He argued that:
• The ground of “loss of confidence” invoked by the Board was baseless.
• His recommendations, though at times rejected, were made in the company’s best interests based on his industry experience.
• The targets set were unrealistic given the industry conditions, and the financial figures presented were not necessarily indicative of his inefficiency.
• Allegations regarding conflict of interest were either misunderstood or mischaracterized, as he had duly informed the relevant officers about such matters.
• His continued loyalty and various contributions (including client management during crises and successful client engagements) should warrant consideration against a premature termination.
• The procedural requirements had not been observed, alleging that he was already being treated as if terminated without due process.
• On February 17, 2004, the Board of Directors of the respondent company terminated petitioner’s services on the ground of loss of confidence.

Post-Termination Legal Proceedings

• On March 16, 2004, petitioner filed a complaint for illegal dismissal before the Labor Arbiter.
• His prayer included reinstatement, full backwages, 13th month pay, moral and exemplary damages, and attorney’s fees.
• The Labor Arbiter rendered a Decision on April 28, 2005 declaring petitioner’s dismissal illegal and ordering:
• Reinstatement without loss of seniority and benefits.
• Payment of backwages calculated from the time of dismissal.
• Payment of moral and exemplary damages amounting to P100,000.00 each.
• Attorney’s fees equivalent to ten (10%) percent of the total judgment award.
• On February 28, 2006, the National Labor Relations Commission (NLRC) reversed the Labor Arbiter’s decision by dismissing the complaint for lack of merit.
• A motion for reconsideration was filed by petitioner but was denied on June 28, 2006.
• Petitioner then elevated the case by filing a petition for certiorari before the Court of Appeals (CA).
• On April 19, 2007, the CA rendered a Decision affirming, with modification, the NLRC ruling.
• The CA maintained the dismissal on merits but held that respondent Destiny Financial Plans, Inc. must pay petitioner nominal damages for the non-compliance with statutory due process.
• This nominal damages award was later modified to reduce the amount, taking into account the company’s financial losses.

Issue:

Validity of Termination Based on Loss of Confidence

• Did petitioner’s employment constitute a basis for termination on the ground of loss of confidence?
• Was the alleged “loss of confidence” supported by sufficient evidence related to his performance and actions as the Head of the Marketing Group?

Due Process in Dismissal Procedures

• Whether the procedural requirements for termination were observed, particularly the “two notice” rule.
• Did the respondents provide petitioner a sufficient opportunity to be heard before effecting his termination?
• Was the immediacy in demanding the turnover of company property indicative of a pre-determined decision, thereby violating due process?

Adequacy of Causal Grounds versus Financial Considerations

• Can the financial hardships and alleged poor performance, which affected the company’s operational viability, be balanced against the alleged procedural lapses?

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)