Facts:

This case involves a petition for review on certiorari under Rule 45 of the Rules of Court filed by the Bank of the Philippine Islands (BPI) and BPI Family Bank against the Honorable National Labor Relations Commission (NLRC) and Ma. Rosario N. Arambulo. The incident commenced when Ma. Rosario N. Arambulo held a series of positions in the banking industry starting in 1972, when she was first employed as a Clerk at Citytrust Banking Corporation, which later merged with BPI. By 1996, she progressed to the role of Bank Manager at the BPI-San Pablo, Laguna Branch.

In October 2001, Arambulo faced reprimands for improper handling of a client's account, leading to her transfer to BPI Family Bank in Los Baños, Laguna. In April 2002, an investigation was initiated at BPI-San Pablo after a client reported discrepancies in their savings account balance. This led to the discovery of unauthorized withdrawals made by teller Teotima Helen Azucena, who implicated Arambulo, claiming she woul

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Facts:

Employment Background and Career Progression

• Respondent was initially employed in 1972 as a clerk at Citytrust Banking Corporation, which later merged with the Bank of Philippine Islands (BPI).
• She advanced through various positions including Lead Teller, Sales Manager, and eventually became the Branch Manager of BPI-San Pablo, Laguna in 1996.

Inciting Incident and Bank Investigation

• On October 4, 2001, respondent was reprimanded for mishandling a client’s account, prompting her transfer to BPI Family Bank in Los Baños, Laguna on November 21, 2001.
• On April 26, 2002, a discrepancy in a client’s savings account initiated an investigation when the client’s balance was found to be less than the actual deposit amount.
• The investigation revealed unauthorized withdrawals involving temporary cash borrowings facilitated by the respondent, specifically in transactions that involved withdrawals from other client’s accounts to cover cash deficits.

Irregularities and Evidence of Fraudulent Transactions

• Teller Teotima Helen Azucena testified that respondent frequently ordered temporary borrowings to be made from the branch cashier.
• Evidence showed that respondent approved several withdrawals from various client accounts. These withdrawals involved:
• Preparation of unsigned and later signed withdrawal slips.
• Use of forged signatures in connection with unauthorized cash withdrawals.
• The audit report detailed multiple instances, including:
• Two withdrawal slips on June 27, 2001, for a total of PHP 700,000.00, which were validated under unusual circumstances and later signed by a co-depositor beyond banking hours.
• Numerous transactions involving cash amounts ranging from PHP 100,000.00 to PHP 400,000.00 that were processed after normal banking hours and involved deposits made to cover unfunded checks.

Administrative Proceedings and Dismissal

• A series of disciplinary measures were initiated:
• A show-cause memorandum was issued on August 22, 2002, alerting the respondent of the audit findings.
• A hearing was conducted on September 2, 2002, to allow respondent to present additional explanations.
• On January 16, 2003, respondent was formally terminated for loss of trust and confidence, attributed to:
• Involvement in temporary borrowings/lapping.
• Approval and processing of forged withdrawal slips.
• Accountability lapses in monitoring branch transactions and safeguarding client funds.

Post-Dismissal Labor and Appellate Proceedings

• On March 14, 2003, respondent filed a complaint for illegal dismissal seeking separation pay, backwages, and attorney’s fees.
• The labor arbiter upheld the dismissal, finding that respondent’s approval of withdrawals which were later proven to be forged validated the dismissal for cause.
• The National Labor Relations Commission (NLRC) sustained the dismissal on appeal but controversially ordered the award of separation pay as a measure of social justice.
• The Court of Appeals affirmed the NLRC’s decision on separation pay, concluding that:
• The evidence presented did not prove that respondent acted with malice or bad faith when signing the withdrawal slips.
• The dismissal for cause was valid, but separation pay could still be granted based on equitable grounds.

Supreme Court Petition and Contentions Raised by Petitioner

• Petitioner BPI filed a petition for certiorari challenging the award of separation pay, arguing:
• The existence of respondent’s signature on forged withdrawal slips in multiple instances, especially beyond banking hours, should be sufficient to bar separation pay.
• Failure to detect fraudulent activities as a branch manager amounted to gross misconduct under the doctrine of command responsibility.
• Respondent, while conceding the legal ground for her dismissal due to loss of trust and confidence, maintained that:
• Her dismissal was not based on serious misconduct or an indication of a negative moral character.
• She was still entitled to separation pay given the circumstances surrounding the dismissal.

Issue:

• Whether the award of separation pay is proper when an employee is dismissed for loss of trust and confidence, given the evidence of unauthorized withdrawals and the processing of forged withdrawal slips.
• Whether the proofs of unauthorized transactions and the respondent’s oversight failures constitute serious misconduct sufficient to bar her from receiving separation pay.
• Whether the evidence showed that the respondent acted with bad faith or intent to defraud, which would eliminate her entitlement to any financial assistance post-dismissal.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)