G.R. No. 98456 - Comsavings Bank vs. National Labor Relations Commission

Private respondents, Ricardo S. Portuguez and Osmundo L. Caparas, began their employment with Royal Savings Bank in 1971.
Respondent Portuguez started as a utility clerk and was later promoted to bookkeeper, Per-Pro, supervisor, and eventually became Branch Manager of the Gen. Trias Branch in Cavite (appointed in 1976).
Respondent Caparas began as a bookkeeper, then served as Acting Per-Pro, and was confirmed as full Per-Pro on June 1, 1977.

On September 19, 1984, COMSAVINGS BANK acquired the assets of Royal Savings Bank “lock, stock and barrel.”
Post-acquisition, respondents were retained under new designations: Portuguez as Manager (job level S4) and Caparas as Pro-Manager (job level S1) at the Gen. Trias Branch.

On May 2, 1988, internal auditors Jocelyn Aiim and Mafe M. Defensor discovered a shortage of P10,000 in the branch’s cash-in-vault stemming from an unposted withdrawal made by Portuguez through Caparas on April 29, 1988.
On May 6, 1988, Vice-President Conrado Oliveros sent a memorandum to Portuguez requesting an explanation for the direct withdrawal from the cash-in-vault, instructing the cash custodian to post the transaction on the subsequent banking day.
Simultaneously, Caparas was directed to explain why he complied with Portuguez’s order in contravention of established banking policies.

On May 9, 1988, Portuguez submitted his explanation, asserting that the transaction was an overnight transaction and that his account balance was sufficient to cover the withdrawal.
On May 11, 1988, Portuguez was ordered to file a comment within 24 hours on allegations concerning his instructions regarding the handling of the withdrawal, which included:

Instructing Caparas not to debit the savings account until a post-dated MBTC check was cleared.
Issuing a post-dated MBTC check along with the withdrawal slip and ordering its posting alongside the withdrawal on May 2, 1988.
Directing that entries be made whenever auditors arrived to prove the adequacy of funds.

Portuguez filed his comment on May 12, 1988.
Disciplinary measures began on July 4, 1988 with the suspension of the signing authorities of the respondents.
On July 18, 1988, Portuguez received his “walking papers” with termination citing loss of confidence based on multiple violations including, but not limited to:

Unauthorized manipulation of the cash-in-vault posting procedure.
Abuse of the overnight transaction privilege.
Neglect in implementing basic internal control measures (lack of dual control on keys and safe combinations).
Unauthorized handling of time deposit tax exemption.
Violation related to the acceptance of secondarily endorsed checks past approved limits.

Caparas was terminated for loss of confidence due to similar breaches, including:

Following improper instructions from Portuguez regarding the overnight transaction.
Refusal to consent to daily cash counts.
Non-observance of dual control practices.
Administrative and professional incompetence.

On August 22, 1988, respondents filed separate complaints for “illegal dismissal with damages” before the National Labor Relations Commission (NLRC), Quezon City (Case No. RB-IV 8-2525-88).
The Labor Arbiter, on September 11, 1989, rendered a decision in favor of the respondents which included:

Reinstatement of the respondents with full backwages and preservation of seniority rights.
Award of moral damages: P300,000 for Portuguez and P100,000 for Caparas.
Award of attorney’s fees amounting to ten percent of the monetary award.

Petitioner (COMSAVINGS BANK) subsequently filed an appeal before the NLRC Arbitration Branch on September 28, 1989.
Through a series of memoranda, oppositions, and replies, the NLRC’s Third Division rendered a resolution on November 29, 1990:

The decision affirmed, with modifications regarding the award of moral damages.
Moral damages were reduced to P100,000 for Portuguez and P50,000 for Caparas.
The resolution noted extraneous evidence and lack of conclusive proof (e.g., reliance on an affidavit over unverified letters) substantiating the allegations against Portuguez regarding the so-called overnight transaction.

Petitioner filed a motion for reconsideration on January 11, 1991, which was eventually denied on April 15, 1991.

COMSAVINGS BANK, as petitioner, filed a certiorari petition before the Supreme Court under Rule 65 of the Revised Rules of Court.
The petitioner contended that:

There was grave abuse of discretion amounting to lack or excess of jurisdiction in ordering the reinstatement of the respondents despite evidence of dishonesty.
The decision evidenced capricious and distorted appreciation of evidence, particularly citing conflicting affidavits and unsubstantiated letters.
The dismissal of managerial employees must adhere strictly to substantive loss of trust and confidence, which the petitioner argued was not proven beyond a reasonable basis.

The petition raised the question of the judicial exercise of discretion in reviewing administrative findings under the extraordinary remedy of certiorari.

Whether the issuance of a writ of certiorari under Rule 65 is proper in reviewing the NLRC’s resolution that modified the award of moral damages and reinstated the dismissed employees, given that the controversy involved factual determinations.

Is it permissible to challenge the evidentiary basis and credibility determinations of the NLRC and Labor Arbiter through certiorari?
Does the petitioner establish grave abuse of discretion or lack/excess of jurisdiction by the administrative bodies despite evidence supporting their factual findings?

Whether COMSAVINGS BANK’s dismissal of managerial employees for loss of trust and confidence, based on the alleged unauthorized handling of cash transactions, was justified under established law.

Whether the evidence presented was sufficient to substantiate a loss of trust and confidence.
Whether the administrative decision unduly re-evaluated or misconstrued the probative value of evidence in favor of the employees.

Whether the application of certiorari in this case extends beyond resolving issues of jurisdiction and into re-assessment of evidentiary findings, which is typically outside the scope of judicial review.