G.R. No. 181756 - Mactan-Cebu International Airport Authority vs. City of Lapu-Lapu and Pacaldo

Ramos was employed by BPI Family Savings Bank in 1995 and later ascended to the position of Vice-President for the Dealer Network Marketing/Auto Loans Division.
His core functions included:

A long-time client, Trezita B. Acosta, who had previously obtained approved auto and real estate loans from the bank, became central to the controversy.
On December 15, 2004, an auto loan amounting to P3,097,392.00 was purportedly secured by Acosta for the purchase of a Toyota Prado.
It later emerged that the loan application was fraudulent:

Acosta did not personally apply for nor authorize the loan.
An impostor misrepresented herself as Acosta.
Ramos authorized the release of the Purchase Order (PO) and Authority to Deliver (ATD) documents without securing the requisite approval from the bank’s credit committee.

The bank suffered a total loss of P2,294,080.00, which was subsequently allocated among Ramos and his three subordinate officers.
Ramos’s specific share of the loss—P546,000.00—was deducted from his retirement benefits upon his retirement on May 1, 2006.
Following this deduction, Ramos executed a Release, Waiver, and Quitclaim on June 21, 2006, thereby relinquishing any claim against the bank regarding separation or retirement benefits.

Ramos filed a complaint before the Regional Arbitration Branch of the NLRC (docket NLRC NCR 00-09-07510-06) alleging:

The Labor Arbiter (LA), in a Decision dated June 27, 2007, dismissed Ramos’s complaint:

Ruled the deduction legal and even reasonable on the ground that Ramos was negligent for failing to ensure his subordinates followed the bank’s Know Your Customer (KYC) protocols.
Underscored that the quitclaim executed by Ramos barred any further claims against the bank.

The NLRC, in its Decision dated March 31, 2008, reversed the LA’s ruling by holding:

The alleged negligence by Ramos was not substantially proven since he was not required to inspect every detail of the loan documents personally.
The issuance of the PO and ATD prior to credit committee approval was standard practice, not an irregularity.
The deduction did not conform with the exceptions prescribed under Article 113 of the Labor Code regarding allowable deductions.
Ramos’s subsequent signing of the quitclaim was rendered ineffective.
It ordered BPI Family to refund the amount of P546,000.00 plus an additional 10% as attorney’s fees.

After BPI Family’s motion for reconsideration was denied by the NLRC on May 30, 2008, the bank elevated the matter by filing a petition for certiorari before the Court of Appeals (CA).
The CA, in a Decision dated November 12, 2010, partially reversed the NLRC by:

Affirming that Ramos was negligent in failing to verify the true identity of the applicant.
Highlighting that Ramos should have secured approval from either the Loans Review Section or Credit Evaluation Section prior to authorizing the loan documents.
Equitably reducing the deducted amount from Ramos’s retirement benefits to P200,000.00 due to concurrent negligence also attributable to the bank’s relaxed supervisory practices.

Ramos’s subsequent motion for reconsideration before the CA was denied in a Resolution dated August 6, 2012, which precipitated the filing of the certiorari petition reaching the Supreme Court.

Modifying the NLRC’s decision that declared the deduction from Ramos’s retirement benefits illegal and unreasonable.
Attributing negligence to Ramos in the discharge of his functions as head of the Dealer Network Marketing/Auto Loans Division.