G.R. No. 202724 - Bance vs. University of St. Anthony

Case Summary (G.R. No. 202724)

Factual Background

The petitioners were long‑service, regular employees of the University of St. Anthony occupying accounting and teaching positions, including Bance as Senior Accounts Officer and Lobetania as Credit and Collection Officer; an internal and subsequently external audit in 2007 disclosed anomalous accounting transactions and a cash shortage of P1,239,856.25 allegedly under Lobetania’s custody, and unauthorized discounts under the University’s group enrollment incentive program benefitting the children and relatives of several petitioners; administrative conferences were held in late 2007, Office Memo No. 007‑026 was issued terminating employment effective January 1, 2008, several petitioners tendered resignations that were accepted, and criminal complaints were later filed by the University against the petitioners.

Claims and Procedural Posture

The five petitioners filed complaints for illegal dismissal with money claims in April 2008, later amended to include unpaid salaries and 13th month pay, and impleading Mrs. Victoria SD. Ortega in Lobetania’s complaint; respondents filed position papers, with a tardy filing in one instance; the Labor Arbiter found illegal dismissal and ordered reinstatement and various monetary awards, respondents appealed to the NLRC which reversed in material respects, petitioners sought relief before the Court of Appeals which affirmed the NLRC with modification, and petitioners elevated the case to the Supreme Court by petition for review on certiorari.

Labor Arbiter’s Decision

The Labor Arbiter rendered judgment on October 1, 2008 finding the respondents guilty of illegal dismissal and ordering reinstatement of the petitioners without loss of seniority and the payment of backwages, unpaid salaries, 13th month pay, holiday pay, damages and attorney’s fees; the Arbiter additionally ordered reimbursement to Lobetania of P1,239,856.25 on the basis that she had been compelled to pay the amount from personal funds, and found that respondents had waived their evidentiary showing by failing to timely file a position paper.

NLRC’s Decision

The National Labor Relations Commission reversed and set aside the Labor Arbiter’s Decision by its September 30, 2009 ruling, holding that the complaints for illegal dismissal lacked basis insofar as Lobetania, Dimaiwat, Velasco, and Aguirre had voluntarily resigned prior to the effective termination date, that Bance was validly dismissed for serious misconduct and loss of trust and confidence although procedural due process was not observed, and accordingly awarding Bance P5,000 as indemnity for defective procedure, holiday pay for three years to all complainants, and Lobetania her prorated 13th month pay for 2007 while dismissing the reimbursement claim as not cognizable under labor law.

Court of Appeals’ Decision

The Court of Appeals affirmed the NLRC Decision on April 17, 2012 with the modification of deleting the award of nominal damages to Bance, concluding that the substantive element of due process was satisfied because the petitioners’ actions reflected loss of trust and confidence, and that procedural due process was observed in Bance’s case; the CA also agreed that the P1,239,856.25 matter was not a labor claim and was appropriately left for ordinary courts.

Issues Presented to the Supreme Court

The Supreme Court condensed the principal issues to whether the voluntary resignations of Lobetania, Dimaiwat, Velasco, and Aguirre rendered their illegal dismissal complaints without basis; whether Bance was illegally dismissed; and whether the labor tribunals had jurisdiction to adjudicate the claimed reimbursement of P1,239,856.25 to Lobetania.

Supreme Court’s Disposition

The Court affirmed the CA Decision with modification, holding that: (1) the voluntary resignations of Lobetania, Dimaiwat, Velasco, and Aguirre rendered their complaints for illegal dismissal devoid of basis; (2) Bance was validly dismissed for just cause but was entitled to nominal damages for the respondents’ failure to comply with procedural due process; and (3) the reimbursement issue involving P1,239,856.25 was moot insofar as the records establish that Lobetania had repaid the amount to the University and any controversy over a personal accommodation must be litigated in the appropriate civil forum; accordingly the petition was partially granted and Bance was awarded P30,000.00 in nominal damages in addition to the reliefs previously affirmed.

Legal Reasoning on Resignation and Substantial Due Process

The Court applied established principles that resignation must be voluntary, demonstrated by intent to relinquish together with an overt act, and that when an employer pleads resignation it bears the burden to prove voluntariness; relying on Central Azucarera De Bais, Inc. v. Siason and the factual record, the Court found the resignations were voluntary, legally effective, and therefore severed the employment relationship before the effectivity of the termination, rendering illegal dismissal claims without merit; the Court further observed, however, that even if the resignations were disregarded, the audit and investigative findings supported just causes under Art. 297 of the Labor Code—willful breach of trust in Lobetania’s case and fraud/dishonesty in the cases of Dimaiwat, Velasco, and Aguirre.

Legal Reasoning on Bance’s Dismissal and Procedural Due Process

The Court determined that Bance occupied a supervisory and trust position as Senior Accounts Officer and that her admission and the audit evidence established a willful breach of trust constituting a valid statutory ground for dismissal under Art. 297; nonetheless the Court found that procedural due process requirements were not satisfied because the mandated two written notices were not both furnished—no first written notice containing a detailed narration of the charges and an opportunity to submit a written explanation was served—thus violating the standards articulated in King of Kings Transport, Inc. v. Mamac and related authorities; applying Agabon v. National Labor Relations Commission, the Court awarded Bance nominal damages in the amount of P30,000.00.

Legal Reasoning on the Reimbursement Claim and Jurisdiction

On the claim for reimbursement of P1,239,856.25, the Court treated the matter as outside the primary scope of labor law because the record established that Lobetania had made payments to the University as evidenced by official receipts and the controversy involved a personal or civil accommodation; the NLRC and CA were correct in advising that a regular civil action should decide any claim of personal accommodation or coercion, and the Court held that respondents were not liable to reimburse Lobetania under the labor proceedings, rendering that issue moot for purposes of the present labor case.

Reliefs, Awards and Final Order

The Court affirmed the awards previously made by the NLRC and the CA insofar as they were consistent wi

Case Syllabus (G.R. No. 202724)

Parties and Posture

Susan M. Bance, Arlene C. Dimaiwat, Jean O. Velasco, Nancy M. Aguirre, and Hazel A. Lobetania were the petitioners in the petition for review on certiorari before this Court.
University of St. Anthony was the employer-respondent and Santiago D. Ortega, Jr. was impleaded as respondent in his capacity as President and Chairman of the Board of Trustees.
The Labor Arbiter rendered an October 1, 2008 Decision finding the petitioners illegally dismissed and awarding reinstatement and money claims.
The National Labor Relations Commission reversed and set aside the Labor Arbiter Decision in its September 30, 2009 Decision and awarded limited monetary reliefs.
The Court of Appeals affirmed the NLRC Decision with modification by deleting the NLRC award of nominal damages to Bance.
The petitioners elevated the case to the Supreme Court by Petition for Review on Certiorari challenging the CA Decision.

Key Facts

Petitioners were long‑service regular employees of the University holding various positions and salaries, including Susan M. Bance as Senior Accounts Officer and Hazel A. Lobetania as Credit and Collection Officer.
An external audit dated March 13, 2007 disclosed a cash shortage of P1,239,856.25 representing net collections that were not deposited to the University bank account and which should have been under Lobetania’s custody.
Lobetania admitted failure to deposit the collections, was placed on leave, subsequently paid the amount in installments as shown by official receipts, and tendered and secured approval of her resignation effective August 1, 2007.
Audits and investigations in late 2007 disclosed that Bance, Dimaiwat, Velasco, and Aguirre enrolled unqualified relatives and beneficiaries in the University’s group enrollment incentive program and admitted at conferences that unauthorized discounts were granted.
Office Memo No. 007-026 dated December 22, 2007 informed the implicated employees of termination effective January 1, 2008, but no prior written notice specifying charges was served.
Dimaiwat, Velasco, and Aguirre tendered resignations dated December 22, 2007 which were approved, while Bance did not resign.
Criminal complaints for Estafa or related offenses were filed by the University against the implicated employees and remain pending in the regular courts.
Petitioners filed complaints for illegal dismissal with money claims in April 2008, later amending claims to include unpaid salaries and 13th month pay.

Procedural History

The Labor Arbiter found respondents guilty of illegal dismissal and ordered reinstatement and reimbursement of P1,239,856.25 to Lobetania in an October 1, 2008 Decision.
The NLRC reversed the Labor Arbiter in its September 30, 2009 Decision, declared the complainants not illegally dismissed, ordered holiday pay for three years for all complainants, ordered P2,334.00 as prorated 13th month pay for Lobetania, awarded Bance nominal indemnity of P5,000.00 for procedural due process lapses, and dropped Mrs. Victoria SD. Ortega as a respondent.
The Court of Appeals affirmed the NLRC Decision on April 17, 2012 but deleted the NLRC award of nominal damages to Bance and denied the petitioners’ motion for reconsideration in a June 27, 2012 Resolution.
The Supreme Court granted partial relief by affirming the CA Decision with modification and ordering respondent University to pay Bance nominal damages in the amount of P30,000.00.

Issues Presented

Whether the voluntary resignations of Lobetania, Dimaiwat, Velasco, and Aguirre rendered their complaints for illegal dismissal without basis.
Whether Bance was illegally dismissed from employment.
Whether the labor tribunal had jurisdiction to adjudicate Lobetania’s cla