Title
Manila Jockey Club, Inc. vs. Trajano
Case
G.R. No. 160982
Decision Date
Jun 26, 2013
Aimee Trajano, a Manila Jockey Club teller, was dismissed for an honest error in canceling a winning bet. Courts ruled her dismissal illegal due to lack of just cause and due process, awarding her separation pay and full backwages.
selling teller
wrongful dismissal
honest mistake
A

Case Summary (G.R. No. 254976)

Factual Background

Trajano reported for work on April 25, 1998. Around 7:15 p.m., two regular bettors gave her their respective lists of bets (rota) and money for bets for Race 14. After both bettors left, Trajano entered their bets in the selling machine and segregated the tickets for pickup upon their return. Before closing time, one bettor returned and asked her to cancel a bet worth P2,000.00. Because Trajano was also operating the negative machine that day and had the authority to cancel tickets as requested, she cancelled the bet immediately and returned to the requesting bettor the remaining tickets and the money pertaining to the cancelled bet. After Race 14 concluded, she counted the bets received and sold tickets and found they balanced. However, she later noticed that a receipt for the cancelled ticket was in her drawer, while the cancelled ticket was not. Thinking she might have given the cancelled ticket to the wrong bettor, she attempted to locate the requesting bettor but could not. She then remembered the earlier bettors who had left their bets with her, located the second bettor, and showed him the cancelled receipt to verify serial numbers.

Thereafter, the second bettor returned and informed her that the cancelled ticket belonged to his bet, not to the requesting bettor. That bet was also the one that won Race 14. Because the bet was for a daily double, the second bettor only needed to win Race 15 to claim dividends. Trajano realized her mistake and explained that the cancellation had not been intentional but resulted from an honest error. She offered to personally pay the dividends should the second bettor win Race 15, and the latter accepted. When Race 15 ended, the second bettor lost, and Trajano was relieved from paying dividends. Despite this resolution, a reliever-supervisor later required Trajano to submit a written explanation about the ticket cancellation incident. On April 26, 1998, she submitted a handwritten explanation to Atty. Joey R. Galit, Assistant Racing Supervisor. She resumed work after filing the explanation, but MJCI subsequently placed her under preventive suspension effective April 28, 1998 for an unstated period. After thirty days, Trajano reported for work but was no longer admitted. She later learned of her dismissal through an inter-office correspondence posted in one of MJCI’s selling stations.

Trajano’s Complaint and MJCI’s Position

Trajano filed a complaint for illegal dismissal in the Department of Labor and Employment (DOLE). She insisted that her termination did not fall under any of the grounds in Article 282 of the Labor Code. She argued that the ticket cancellation had no basis for dismissal because she was also the operator of the negative machine and had authority to cancel tickets as requested. She further maintained that the cancellation was not intentional and amounted only to an honest mistake that did not constitute dishonesty. She also alleged that MJCI violated due process because she was not aware of any justifiable cause of termination and was not properly notified or furnished a copy of the notice of dismissal, contending that MJCI merely posted copies of the notice in selling stations in a manner intended to embarrass and humiliate her. She added that MJCI acted with evident bad faith and malice. She prayed for reinstatement without loss of seniority rights, full backwages, moral and exemplary damages of P180,000.00, and attorney’s fees.

MJCI, for its part, claimed it received a letter on April 25, 1998 from Jun Carpio, Field Officer of the Games and Amusement Board, calling attention to a complaint against Trajano by a bettor identified in the record as Tito, who had alleged cancellation of his ticket that had already won the first leg (Race 14) of the daily double. MJCI stated that, acting on the complaint, it placed Trajano under preventive suspension after she submitted a written explanation and after a preliminary investigation. MJCI asserted that on June 5, 1998 it held a clarificatory meeting in the presence of the MJCI Raceday Union President, and that it terminated her the next day for unauthorized cancellation of ticket. MJCI argued that the unauthorized cancellation constituted serious violation of company policy amounting to dishonesty and that it supported just cause under Article 282—specifically paragraph (a) on serious misconduct or willful disobedience and paragraph (b) on gross and habitual neglect of duty. It asserted it afforded due process by allowing Trajano to submit a written explanation and informing her of charges, and by conducting preliminary investigation with union leaders present. It also maintained that the failure to appeal the termination decision indicated the parties believed in its merit.

Labor Arbiter’s Decision

On April 23, 1999, the Labor Arbiter dismissed the illegal dismissal complaint. The Labor Arbiter found Trajano’s gross negligence warranted termination. It reasoned that the bet amount of P2,000.00 was substantial and required extra care in its cancellation. It also concluded that Trajano had been given the chance to dispute the charges.

NLRC’s Decision and Reinstatement Order

Trajano appealed to the NLRC, asserting she committed no gross dishonesty, serious misconduct, or habitual neglect, and that the cancellation was only an honest mistake insufficient to merit dismissal. On October 27, 1999, the NLRC reversed the Labor Arbiter. It declared Trajano illegally dismissed for lack of just or authorized cause and without due process. The NLRC held that Trajano’s cancellation was an honest mistake that did not amount to serious misconduct or willful disobedience. It likewise held that the cancellation did not constitute gross and habitual neglect because it reflected only a first offense in her nine years of service and that MJCI failed to show damage. The NLRC ordered reinstatement to the former position without loss of seniority rights and with payment of backwages equivalent to at least six months and other benefits.

MJCI’s motion for reconsideration was denied on February 18, 2000.

CA Ruling on Certiorari

MJCI then sought relief from the CA through certiorari, alleging grave abuse of discretion by the NLRC in reversing the Labor Arbiter. MJCI argued that Trajano received procedural due process and that there was just cause. On January 30, 2003, the CA denied MJCI’s petition. It emphasized that MJCI did not give the valid notice of termination required by law. It also faulted MJCI for failing to demonstrate that Trajano’s unauthorized cancellation violated company policy. Finally, it held that the cancellation was an honest mistake that did not justify dismissal.

MJCI’s motion for reconsideration was denied.

Issues Raised Before the Supreme Court

MJCI appealed, raising two main issues: first, whether there was just cause for Trajano’s dismissal; and second, whether MJCI complied with due process in effecting the termination.

The Court’s Legal Reasoning on Just Cause and Loss of Trust

The Court rejected MJCI’s position. It recalled that a valid termination may be for just causes under Article 282 or for authorized causes under Articles 283 and 284 of the Labor Code. It stressed that loss of trust and confidence constitutes a just cause under Article 282(c) and typically applies when the employee occupies a position of trust and confidence or when the employee routinely handles the employer’s money or property. The Court reiterated, however, that loss of trust and confidence must be based on a willful breach founded on clearly established facts. It relied on the definition of “willful” in AMA Computer College, Inc. v. Garay, distinguishing intentional, knowing, and purposeful acts without justifiable excuse from careless, thoughtless, heedless, or inadvertent conduct. The Court further required that the ground be supported by substantial grounds rather than by arbitrariness, whim, caprice, or mere suspicion. It stated that an ordinary breach is insufficient, and that the loss of trust and confidence must be related to the employee’s performance of duties.

Applying the principles to the case, the Court recognized that Trajano held a position of trust and confidence as a selling teller charged with handling tickets and bets, which involved the employer’s funds. The Court accepted that the cancellation incident was work-related. Yet it held that MJCI failed to establish that the cancellation was intentional, knowing, and purposeful so as to constitute a willful breach of the trust reposed in Trajano, instead of being only an honest mistake. The Court treated MJCI’s argument that unauthorized cancellation could have resulted in substantial prejudice as speculative. It held that dismissal cannot rest on conjecture of possible damage the employer “could have suffered.” The Court reasoned that the employer’s power to dismiss must be tempered with compassion and understanding to avoid abuse. It added that loss of trust and confidence should be genuine, not simulated to justify an otherwise illegal dismissal, invoking Mabeza v. NLRC.

The Court also noted that MJCI’s invocation of breach of trust appeared belated. In its position paper dated September 2, 1998, MJCI had relied on Article 282(a) and (b), characterizing the ticket cancellation as a serious violation of company policy amounting to dishonesty. It first invoked breach of trust in its motion for reconsideration, and it later raised the same ground in its petition for certiorari before the CA. The Court viewed this progression as broadly indicating that the loss-of-trust theory may have been an afterthought to support a baseless dismissal.

Due Process Analysis and the Validity of Notice

On due process, MJCI argued that posting the notice of termination in its selling stations should satisfy the notice requirement, citing that Trajano even presented a copy of the posting as evidence and that the rules did not expressly require personal service. The C

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