Title
Caingat vs. National Labor Relations Commission
Case
G.R. No. 154308
Decision Date
Mar 10, 2005
Employee misappropriated company funds; dismissal upheld due to loss of trust, but employer failed procedural due process, warranting nominal damages.
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Case Digest (G.R. No. 154308)

Facts:

  1. Employment History:

    • In 1983, petitioner Bernardino A. Caingat was hired by respondent Sta. Lucia Realty and Development, Inc. (SLRDI) as an officer-in-charge responsible for maintaining facilities and checking deliveries of construction materials.
    • Later, he was assigned as a Stock Clerk, supervising utility and security personnel.
    • In 1990, he became the General Manager of SLRDI's sister companies, R.S. Night Hawk Security and Investigation Agency, Inc., and R.S. Maintenance and Services, Inc. He was allowed to use 10% of the total payroll of R.S. Maintenance for operating expenses.
  2. Discovery of Misappropriation:

    • In 1991, the Finance Manager discovered that petitioner had deposited company funds into his personal account and used them for personal expenses, including credit card payments, utility bills, trips abroad, and the acquisition of a lot in Laguna.
  3. Suspension and Memorandum:

    • On June 20, 1996, petitioner received a memorandum from Germelino Angeles, the HRD Manager, accusing him of misappropriating approximately P5,000,000.00 from 1992 to the present.
    • He was given 48 hours to submit a written explanation under oath and was suspended from his duties as Manager.
  4. Legal Proceedings:

    • On August 13, 1996, R.S. Maintenance filed a civil case for sum of money and damages against petitioner.
    • On August 27, 1998, petitioner filed a complaint for illegal dismissal before the Labor Arbiter.
    • The Labor Arbiter ruled in favor of petitioner, ordering his reinstatement with full backwages.
    • The NLRC reversed the Labor Arbiter's decision but awarded petitioner P10,000 as indemnity for lack of notice of dismissal.
    • The Court of Appeals dismissed petitioner's petition for certiorari due to procedural deficiencies.
  5. Public Notice of Termination:

    • On July 31, 1996, a notice was published in the Philippine Daily Inquirer stating that petitioner was no longer connected with R.S. Night Hawk and R.S. Maintenance as of June 20, 1996.

Issue:

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Ruling:

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Ratio:

  1. Loss of Trust and Confidence:

    • Loss of trust and confidence is a valid ground for dismissing an employee, especially for managerial personnel entrusted with significant responsibilities. Petitioner's misappropriation of funds justified his dismissal.
  2. Procedural Due Process:

    • The Labor Code requires two notices for termination: (1) a notice specifying the grounds for termination and giving the employee an opportunity to explain, and (2) a notice of the decision to dismiss after considering the employee's explanation.
    • Respondents failed to issue the second notice, violating petitioner's right to due process.
  3. Nominal Damages:

    • While the dismissal was valid, the failure to comply with procedural due process warrants the payment of nominal damages. The Court awarded P30,000 to petitioner as indemnity for the procedural lapse.

Conclusion:

The Supreme Court modified the Court of Appeals' resolutions, upholding petitioner's dismissal on the ground of loss of trust and confidence but ordering respondents to pay P30,000 as nominal damages for failing to comply with procedural due process.


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