FACTS:
Respondent Delfin S. Descallar was assigned at the Iligan City Branch of petitioner Norkis Distributors, Inc., a distributor of Yamaha motorcycles. He became a regular employee and was promoted as Branch Manager. He acted as branch administrator and had supervision and control of all the employees. Respondent was also responsible for sales and collection
In a memorandum, petitioners required respondent to explain in writing within 48 hrs why he should not be penalized or terminated for being absent without official leave (AWOL) or rendering under-time service on certain dates. Respondent explained that he reported to the office on those dates, but he either went to the bank or followed-up on prospects. As he was still within city limits, he did not file any official leave or travel record.
Norkis conducted an investigation. Finding that respondent was not able to prove that he was really in the branch or on official travel, petitioners suspended him for 15 days without pay. According to petitioners, respondent admitted during the investigation that he used company time for his personal affairs, but only for a few hours and not the whole day.
While respondent was still suspended, Norkis also found that Respondent committed some inappropriate and irregular acts such as unexplained low performance of his branch, missing funds, unauthorized disbursement of funds, irregular transactions.
Petitioners terminated respondent’s services for loss of trust and confidence and gross inefficiency. Respondent filed a complaint for illegal suspension and illegal dismissal. LA favored respondent. Petitioners appealed to NLRC. NLRC reversed the LA’s decision and found respondent to have been validly dismissed. The NLRC, however, upheld the LA’s finding that petitioners are liable to respondent for unpaid wages. Respondent filed MR. It was denied so he filed with the CA a petition for certiorari. CA reinstated with modification the decision of the LA. Respondent filed a motion for clarification as to the awards of separation pay and back wages while petitioners filed MR. CA issued a Resolution stating that as regards respondent’s motion for clarification, the separation pay and back wages shall be reckoned from the time respondent was illegally suspended until finality of its earlier Decision. The CA likewise denied petitioners’ MR. Hence, petitioners filed the present petition.
ISSUE:
Was the failure of respondent to reach his monthly sales quota a valid basis for loss of trust and confidence?
RULING:
NO. Loss of trust and confidence as a ground for termination of an employee under Article 282 of the Labor Code requires that the breach of trust be willful, meaning it must be done intentionally, knowingly, and purposely, without justifiable excuse. The basic premise for dismissal on the ground of loss of confidence is that the employee concerned holds a position of trust and confidence. It is the breach of this trust that results in the employer’s loss of confidence in the employee.
Here, there is no question that as petitioners’ Branch Manager in Iligan City, respondent was holding a position of trust and confidence. He was responsible for the administration of the branch, and exercised supervision and control over all the employees. He was also incharge of sales and collection.
In termination cases, the burden of proof rests upon the employer to show that the dismissal is for a just and valid cause and failure to do so would necessarily mean that the dismissal was illegal. The quantum of proof required in determining the legality of an employee’s dismissal is only substantial evidence. CA correctly held that petitioners failed to discharge this burden.
Failure to reach the monthly sales quota cannot be considered an intentional and unjustified act of respondent amounting to a willful breach of trust on his part that would call for his termination based on loss of confidence. This is not the willful breach of trust and confidence contemplated in Article 282(c) of the Labor Code. Low sales performance could be attributed to several factors which are beyond respondent’s control. To be a valid ground for an employee’s dismissal, loss of trust and confidence must be based on a willful breach. To repeat, a breach is willful if it is done intentionally, knowingly and purposely, without justifiable excuse.
Petitioners having failed to establish by substantial evidence any valid ground for terminating respondent’s services, we uphold the finding of the Labor Arbiter and the CA that respondent was illegally dismissed.
An illegally dismissed employee is entitled to two reliefs: back wages and reinstatement. The two reliefs provided are separate and distinct. In instances where reinstatement is no longer feasible because of strained relations between the employee and the employer, separation pay is granted. The normal consequences of respondent’s illegal dismissal, then, are reinstatement without loss of seniority rights, and payment of back wages computed from the time compensation was withheld from him up to the date of actual reinstatement. Where reinstatement is no longer viable as an option, separation pay equivalent to one month salary for every year of service should be awarded as an alternative. The payment of separation pay is in addition to payment of back wages.
The CA merely clarified the period of payment of back wages and separation pay up to the finality of its decision modifying the LA’s decision. In view of the modification of monetary awards in the Labor Arbiter’s decision, the time frame for the payment of back wages and separation pay is accordingly modified to the finality of the CA decision.
WHEREFORE, the petition for review on certiorari is DENIED.
