Facts:

The case involves Greg Anthony L. CaAeda as the petitioner and Philippine Airlines, Inc. (PAL) as the respondent. PAL maintained a daily petty cash fund of P250,000, which was managed by CaAeda, who was employed as a cashier. On July 9, 1996, an audit of the petty cash fund revealed a shortage of P34,338.69. Following this discovery, PAL conducted an investigation that concluded CaAeda was liable for the misappropriation of company funds. Consequently, PAL terminated CaAeda's employment effective July 29, 1996. In response to his dismissal, PAL filed a complaint for estafa and falsification against CaAeda in the City Prosecution Office of Makati City; however, this case was dismissed. Subsequently, CaAeda filed a case for illegal dismissal with a labor arbiter, which was resolved in his favor on April 14, 1998. PAL appealed this decision to the National Labor Relations Commission (NLRC), but the appeal was dismissed for lack of merit on July 22, 1999. In a motion for reco...

Facts:

Petty Cash Fund and Audit

• Philippine Airlines, Inc. (PAL) maintained a daily petty cash fund of P250,000 managed by petitioner Greg Anthony L. Caaeda, who held the position of cashier.
• On July 9, 1996, an audit of the fund revealed a shortage amounting to P34,338.69, prompting further internal scrutiny.

Investigation, Charges, and Employment Termination

• PAL’s internal investigation concluded that petitioner was liable for the shortage, attributing the deficit to misappropriation of company funds.
• Based on the investigation’s findings, petitioner was terminated effective July 29, 1996.
• PAL initiated criminal proceedings by filing a complaint for estafa and falsification against petitioner in the City Prosecution Office of Makati City, though the case was eventually dismissed.

Subsequent Labor and Certiorari Proceedings

• Petitioner pursued a case for illegal dismissal before the labor arbiter, which was resolved in his favor on April 14, 1998.
• PAL’s subsequent appeal to the National Labor Relations Commission (NLRC) was dismissed for lack of merit on July 22, 1999.
• In a motion for reconsideration before the NLRC, PAL highlighted its retrenchment program implemented in June 1998 amid heavy losses caused by the prevailing Asian economic crisis and a pilots’ strike, which saw a reduction from 14,000 to 8,000 employees.
• The retrenchment involved the elimination of petitioner’s position, rendering reinstatement impossible despite the favorable ruling on his illegal dismissal.
• PAL’s petition for certiorari before the Court of Appeals resulted in a partial grant that recognized petitioner’s separation due to retrenchment and addressed issues of separation pay and computation of full backwages, but indicated that the dismissal and retrenchment issues were intertwined.

Underlying Contextual and Procedural Matters

• The case raised two major issues: whether the dismissal on July 29, 1996, was illegal or justified, and if legal, whether the subsequent retrenchment in June 1998 was valid.
• The controversy centers on whether due process was followed and if the employer had sufficient grounds—specifically loss of trust and confidence—to justify the termination of a key employee such as a cashier entrusted with company funds.

Issue:

Whether the dismissal of petitioner on July 29, 1996, was for a just or authorized cause and was executed with due process.

• Determination of whether the shortage in the petty cash fund, even in the absence of criminal conviction, constitutes sufficient basis to establish a loss of trust and confidence.
• Examination of the special fiduciary relationship inherent in the position of a cashier and the higher standard of conduct required.

Whether petitioner’s retrenchment in June 1998, following his earlier dismissal, was valid.

• Analysis of the impact of the retrenchment program on the legal remedies available to petitioner.
• Consideration of whether the abolition of petitioner’s position through retrenchment affected his right to reinstatement or additional benefits.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)