Title
Celiz vs. Cord Chemicals, Inc.
Case
G.R. No. 200352
Decision Date
Jul 20, 2016
Mary June Celiz, a high-ranking employee, was dismissed for failing to account for P445,272.93 in cash advances, deemed a serious breach of trust. The Supreme Court upheld her termination, finding substantial evidence and due process compliance.
dismissal
unliquidated cash advances
lower courts

Case Summary (G.R. No. 200352)

Factual Background

As found by the CA, Cord, Inc. came under Leonor’s management after the death of Francisco Sanz, Leonor’s husband, in 2008. Celiz alleged that after Francisco’s demise, the new management advised her not to report for work. She was then called to a meeting at a restaurant in Makati City with Leonor and Leonor’s children, together with two lawyers. Celiz was reportedly told that Leonor was jealous of Celiz’s intimate relationship with Francisco. Celiz insisted that her relationship with Francisco was professional. Leonor nonetheless agreed to allow Celiz to resign and instructed her to claim separation pay by the end of October 2008.

Celiz returned to Cord, Inc. to tender her resignation. However, she was allegedly informed by company counsel that she would be dismissed because she failed to account for numerous unliquidated advances amounting to P713,471.00. Cord, Inc. served a Notice to Explain stating that, as a managerial employee vested with a high degree of trust and confidence, her failure to liquidate amounted to dishonest handling of company funds. Celiz was placed on preventive suspension and asked to submit her formal explanation and attend the investigation.

Celiz responded that she could not answer due to time constraints and lack of access to her office files. She requested seven working days to check relevant documents, vouchers, and cash advances. Cord, Inc. granted three consecutive days to review her records in the presence of two other employees, and reminded her to submit her explanation on the unliquidated cash advances. Celiz objected that she was not allowed to enter her room and that she was instead required to remain at the conference room while being given twelve boxes allegedly containing her office documents. She maintained that her preventive suspension was announced during Cord, Inc.’s general assembly and that she should not have been punished given her seventeen years of service.

With respect to the advances, Celiz contended that some ledger entries were credited to her name even though the monies were given to employees. She also claimed she could not explain expenses appearing on a company credit card issued to her because she was not furnished the statement of account. She reiterated her request for a certified copy showing details of her unliquidated cash advances. On 6 December 2008, Cord, Inc. dismissed her for serious breach of trust and confidence.

Celiz then filed a complaint for illegal dismissal and monetary benefits before the Labor Arbiter, impleading Cord, Inc., Leonor, and Marian. Cord, Inc., Leonor, and Marian denied illegal dismissal. They asserted that Celiz was Francisco’s paramour and that Leonor and her children were aware of the illicit relationship. They presented, among others, handwritten letters of Celiz to Francisco expressing love, admiration, and gratitude. According to respondents, Leonor took over the reins of Cord, Inc. after Francisco’s death and told Celiz not to report for work temporarily while Leonor considered her options. They stated that Leonor arranged a meeting where Celiz announced that she would resign at the end of October 2008 and transfer to another company in the same industry. Leonor allegedly agreed to give separation pay, reminded Celiz that a confidentiality clause remained in force, and required clearance procedures before releasing final benefits.

Respondents further stated that during standard clearance, Cord, Inc. discovered that Celiz had unliquidated cash advances totaling P713,471.00. The accounting personnel reported anomalies, including the impression created by Celiz’s “closeness” to Francisco that she was exempt from liquidation requirements; Celiz’s alleged refusal to comply when reminded; and her conduct when liquidation was raised. Respondents averred that they informed Celiz of the unliquidated cash advances through notices, including an initial notice giving her 48 hours to explain, and that she was also placed on preventive suspension because of the gravity of the charges. They added that Leonor separately conducted her own investigation and concluded that Celiz padded and adjusted sales output and reported fictitious sales, and that she had not attended to customer complaints, exposing Cord, Inc. to potential lawsuits. Respondents claimed Celiz eventually liquidated some advances but still left an unaccounted balance of P445,272.93. Because of misappropriation and because Celiz was found unworthy of the trust reposed in her, Cord, Inc. dismissed her.

Labor Arbiter and NLRC Proceedings

The Labor Arbiter weighed the parties’ positions and found that the severance of employment was for a just cause and after the observance of due process. The Labor Arbiter dismissed Celiz’s complaint for lack of merit.

Celiz appealed to the NLRC. The NLRC affirmed the Labor Arbiter’s decision and denied her motion for reconsideration.

Petitioner’s Position on Appeal to the Court of Appeals

In her Petition for Certiorari in CA-G.R. SP No. 116098, Celiz sought to overturn the NLRC rulings and to obtain reinstatement, backwages, and monetary benefits, on the theory that her dismissal was illegal. She argued that the NLRC committed grave abuse of discretion in affirming the Labor Arbiter. She contended that it was error to validate her dismissal based on failure to account for the P445,272.93 unliquidated cash advances because there was no proof she received and benefited from the amount. She also argued that the dismissal of a qualified theft case filed before the Office of the City Prosecutor of Mandaluyong relative to the cash advances proved her innocence.

Celiz further argued that there was no valid basis to dismiss her for loss of trust and confidence because such loss was simulated, and that the real motive for her dismissal was Leonor’s jealousy and claim that Celiz was Francisco’s mistress, a ground Celiz argued was not sanctioned under the Labor Code. She also claimed she was denied procedural due process because she was allegedly not given a hearing and lacked ample opportunity to defend herself. Finally, she maintained that illegal dismissal entitled her to monetary claims, damages, and attorney’s fees.

Court of Appeals Ruling

The CA dismissed Celiz’s petition on October 26, 2011 and denied her motion for reconsideration in its January 18, 2012 Resolution. The CA held that respondents adduced clear and compelling proof justifying dismissal. It emphasized that the termination was anchored on Celiz’s failure to explain and account for unliquidated advances of P445,272.93. The CA reasoned that, as employee directly in charge with the use of such funds, Celiz should have been more circumspect because her position demanded a high degree of trust.

The CA invoked the rule that loss of trust and confidence does not require proof beyond reasonable doubt of misconduct, but the evidence must be substantial and must clearly and convincingly establish the facts supporting the employer’s loss of confidence. Applying the principle, the CA found that Celiz’s position and conduct warranted the employer’s loss of confidence and that her misconduct unmasked her untruthfulness and constituted infidelity of trust. The CA further held that Celiz’s breach of trust was not simulated, because the charge was anchored on itemized advance documents that respondents provided to her when the notice to explain was served. It noted that after being charged, Celiz liquidated some cash advances but failed to account for the remaining balance, supporting respondents’ claim of remissness as second highest-ranking officer.

On procedural due process, the CA reiterated the requirement of two written notices: one informing the employee of the particular acts or omissions for which dismissal is sought, and another informing the employee of the employer’s decision to dismiss. It found that Celiz received the first notice to explain, was asked to submit her written explanation and attend the investigation, was granted additional time to scrutinize records, and was given access to company files to prepare her defense. It held that Celiz was informed of the employer’s decision after she accounted only for a portion of the cash advances and failed to explain the rest. The CA found no grave abuse of discretion.

The CA also addressed Celiz’s claim that she had been denied due process and found no basis for it. It condemned dishonest acts proven by clear and convincing evidence and sustained the dismissal for cause.

Issues Before the Supreme Court

Before the Supreme Court, Celiz effectively raised two main issues. First, she argued that the CA’s finding of serious breach of trust and confidence contravened the Supreme Court’s doctrine in Lima Land, Inc. v. Cuevas (loss of trust and confidence must be genuine and established by substantial evidence, not simulated). Second, she argued that the CA erred in finding compliance with procedural due process, contrary to King of Kings Transport v. Mamac and Perez v. Philippine Telegraph & Telephone Company.

Celiz’s Arguments in the Supreme Court

Celiz maintained that respondents did not establish substantial evidence that she actually received the amount of P445,272.93 out of P713,471.00 in unliquidated cash advances. She asserted that if respondents failed to prove receipt, she was not duty bound to account for the amounts attributed to her. She also contended that respondents lacked evidence that the claimed expenses were legitimate and supported by the necessary documentation.

Celiz also reiterated that the charges were fabricated as revenge for Leonor’s unfounded and unproved jealousy regarding Celiz’s alleged illicit relationship with Francisco. She invoked Lima Land to argue that loss of trust and confidence must be genuine, not an afterthought to justify a bad-faith decision. She also argued that the dismissal of the qualified theft case before the City Prosecutor established her innocence. Finally,

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