Villanueva JR V NLRC

9/16/21, 10:26 AM SUPREME COURT REPORTS ANNOTATED VOLUME 672
G.R. No. 176893. June 13, 2012.*

VICENTE VILLANUEVA, JR., petitioner, vs. THE
NATIONAL LABOR RELATIONS COMMISSION THIRD
DIVISION, MANILA ELECTRIC COMPANY, MANUEL
LOPEZ, Chairman and CEO, and FRANCISCO
COLLANTES, Manager, respondents.
Labor Law; Termination of Employment; Two Aspects of

Dismissal from Employment.—Dismissal from employment has
two aspects: 1) the legality of the act of dismissal per se, which
constitutes substantive due process, and 2) the legality of the
manner of dismissal, which constitutes procedural due process. As
to the first, the legal provision in point is Article 282 of the Labor
Code which provides: Art. 282. Termination by Employer.—An
employer may terminate an employment for any of the following
causes: (a) Serious
_______________
* THIRD DIVISION.
244
244 SUPREME COURT REPORTS ANNOTATED
Villanueva, Jr. vs. National Labor Relations Commission Third

Division
misconduct or willful disobedience by the employee of the lawful

orders of his employer or representative in connection with his
work; (b) Gross and habitual neglect by the employee of his
duties; (c) Fraud or willful breach by the employee of the trust
reposed in him by his employer or duly authorized representative;
(d) Commission of a crime or offense by the employee against the
person of his employer or any immediate member of his family or
his duly authorized representative; and (e) Other causes
analogous to the foregoing.
Same; Same; Loss of Trust and Confidence; The loss of trust
and confidence must be based on willful breach of the trust reposed
in the employee by his employer.—In the case of Cruz v. Court of
Appeals, 494 SCRA 643 (2006), the Court had the occasion to
enumerate the essential elements for “willful breach by the
employee of the trust reposed in him by his employer”: Xxx the
loss of trust and confidence must be based on willful breach of the
trust reposed in the employee by his employer. Such breach is
willful if it is done intentionally, knowingly, and purposely,
without justifiable excuse, as distinguished from an act done
carelessly, thoughtlessly, heedlessly or inadvertently. Moreover, it
must be based on substantial evidence and not on the employer’s
whims or caprices or suspicions otherwise, the employee would
eternally remain at the mercy of the employer. Loss of confidence
must not be indiscriminately used as a shield by the employer
against a claim that the dismissal of an employee was arbitrary.
And, in order to constitute a just cause for dismissal, the act
complained of must be work-related and shows that the employee
https://www.central.com.ph/sfsreader/session/0000017bec70ff1a4e2c8dfd000d00d40059004a/t/?o=False 1/14
concerned is unfit to continue working for the employer. In

addition, loss of confidence as a just cause for termination of
employment is premised on the fact that the employee concerned
holds a position of responsibility, trust and confidence or that the
employee concerned is entrusted with confidence with respect to
delicate matters, such as handling or case and protection of the
property and assets of the employer. The betrayal of this trust is
the essence of the offense for which an employee is penalized.
Same; Same; Same; Guidelines for the Application of the
Doctrine on Loss of Trust and Confidence.—As a safeguard
against employers who indiscriminately use “loss of trust and
confidence” to justify arbitrary dismissal of employees, the Court,
in addition to the above elements, came up with the following
guidelines for the application of the doctrine: (1) loss of confidence
should not be simulated;
245
VOL. 672, JUNE 13, 2012 245

Division
(2) it should not be used as a subterfuge for causes which are

improper, illegal or unjustified; (3) it may not be arbitrarily
asserted in the face of overwhelming evidence to the contrary; and
(4) it must be genuine, not a mere afterthought, to justify an
earlier action taken in bad faith.
Same; Same; Same; Loss of confidence generally applies only
to: (1) cases involving employees occupying positions of trust and
confidence; or (2) situations where the employee is routinely
charged with the care and custody of the employer’s money or
property.—Loss of confidence generally applies only to: (1) cases
involving employees occupying positions of trust and confidence;
or (2) situations where the employee is routinely charged with the
care and custody of the employer’s money or property. To the first
class belong managerial employees, that is, those vested with the
powers and prerogatives to lay down management polices and/or
to hire, transfer, suspend, lay-off, recall, discharge, assign or
discipline employees, or effectively recommend such managerial
actions. To the second class belong cashiers, auditors, property
custodians, or those who, in the normal and routine exercise of
their functions, regularly handle significant amounts of money or
property. Villanueva falls in the latter category.
Same; Same; Management has the prerogative to discipline its
employees and to impose appropriate penalties on erring workers
pursuant to company rules and regulations.—The company has
the right to regulate, according to its discretion and best
judgment, all aspects of employment, including work assignment,
working methods, processes to be followed, working regulations,
transfer of employees, work supervision, lay-off of workers and
the discipline, dismissal and recall of workers. Management has
the prerogative to discipline its employees and to impose
appropriate penalties on erring workers pursuant to company
rules and regulations. So long as they are exercised in good faith
for the advancement of the employer’s interest and not for the
purpose of defeating or circumventing the rights of the employees
under special laws or under valid agreements, the employer’s
exercise of its management prerogative must be upheld. The law
imposes many obligations on the employer such as providing just
compensation to workers and observance of the procedural
requirements of notice and hearing in the termination of

employment. On the other hand, the law also recognizes the
246

Division
right of the employer to expect from its workers not only good
performance, adequate work and diligence, but also good conduct
and loyalty. The employer may not be compelled to continue to
employ such persons whose continuance in the service will
patently be inimical to its interests.
PETITION for review on certiorari of the decision and

resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
Mark C. Arcilla for petitioner.
Angel Miranda, Jr. for respondents.
MENDOZA, J.:
This petition for review on certiorari assails the
December 13, 2006 Decision1 of the Court of Appeals (CA)
in CA-G.R. SP. No. 95826 which dismissed the petition
challenging the November 30, 20042 and June 20, 20063
Resolutions of the National Labor Relations Commission
(NLRC) holding that petitioner Vicente Villanueva
(Villanueva) was validly dismissed by respondent company
Manila Electric Company (Meralco) on account of serious
misconduct and loss of trust and confidence.
The Facts
Since 1990, Villanueva had been employed with Meralco
as bill collector, teller and branch representative.
Sometime in
_______________
1 Rollo, pp. 25-44. Penned by Associate Justice Martin S. Villarama, Jr.
(now member of this Court) and concurred into by Associate Justice Lucas
P. Bersamin (also present member of this Court) and Associate Justice
Monina Arevalo-Zenarosa, of the then Seventh Division of the Court of
Appeals.
2 Id., at pp. 57-67.
3 Id., at pp. 68-82.
247
VOL. 672, JUNE 13, 2012 247

Villanueva, Jr. vs. National Labor Relations Commission
Third Division
June 2002, Francisco Collantes, Manager of Meralco

Branch Office, Novaliches, Quezon City, referred to the
company’s Investigation Office a report dated June 10,
2002 regarding “unusual contract modifications” in the
transactions handled by Villanueva. The report claimed
that there were customers who were issued Contracts for
Electric Service by Villanueva which indicated their
payment of P930.00 (service deposit of P520.00 and meter
deposit of P410.00) as deposit payment when they actually
gave him a total amount of P1,240.00. The discrepancy
amounting to P310.00 was not covered by any receipt.

Pursuant to the complaints, a field investigation was
conducted by the company-designated investigator who was
able to obtain sworn statements from nine (9) out of twenty
four (24) complaining customers.4 The said complainants
identified Villanueva as the person they have transacted
with, from a line-up of pictures of several individuals.
Further, the complaints were corroborated by the sworn
statements of Ben-Hur C. Nepomuceno (Nepomuceno) and
Merle S. Santos (Santos), office team leader and assistant
office team leader of the Novaliches branch, respectively.
Nepomuceno stated that in the course of the routine
checking of his men for March 2002, he found the unusual
additional deposit payments accepted by Villanueva. When
he made further verification on the collection reports of the
latter, he also discovered additional deposits he received
from other customers. Upon confirming Villanueva’s act of
“contract modification” with a customer named Sherwin
Borja, Nepomuceno requested the Customer Process
Management to suspend Villanueva’s CMS-User ID.
Corporate Audit was also asked to investigate his irregular
transactions. In his statement, Nepomuceno described the
additional payments as irregular because customers
normally paid for deposit payments on a one-time basis.
With Villanueva’s transactions, however, customers who
paid P1,240.00 complained of getting
_______________
4 Id., at pp. 123-137.
248

Third Division
receipts reflecting only P930.00 as the amount paid,

constraining Villanueva to issue another receipt for an
additional deposit of P310.00. Nepomuceno clarified that
additional deposits were meant to increase the contracted
capacity of customers after a considerable period of time
from their initial electric service application.
For her part, Santos, whose duties included the
preparation of summary reports in overages of tellers and
branch representatives, stated that the existing practice
was for the personnel concerned to report excess collections
on the same day they were collected. Santos claimed that
Villanueva had never reported a case of overage in his
collections since 2001.
In a letter5 dated August 1, 2002, Villanueva was
informed of the investigation to be conducted by the
company. On the date of the scheduled hearing indicated in
the letter, Villanueva appeared with counsel who requested
for time within which to submit a responsive paper. In his
counter-affidavit,6 he denied demanding payment in excess
of the minimum deposit charged from applicants for
electric service connection. He admitted that there were
times that “Modification of Contract” was done because of
the recommendations of a Meralco fieldman who, upon
inspection, approved a higher load of electricity than that
applied for. Villanueva explained that if ever there was
error or discrepancy in the preparation of the contract, this
would have to be balanced at the end of the day. He

claimed that there were instances when initial entries of
applied loads were erroneous prompting him to modify the
contract in order that the customers’ deposit payment could
be entered. In cases when the customer was no longer in
the office premises, he would just record them as pre-
payment so as to reflect the same in their billing upon
installation of the electric meter.
_______________
5 Id., at pp. 121-122.
6 Id., at p. 138.
249
VOL. 672, JUNE 13, 2012 249

Third Division
In a letter7 dated August 28, 2002, Meralco denied the

request of Villanueva’s counsel to cross-examine the
witnesses (complaining customers) who were not Meralco
employees. Management maintained that it was not the
proper place to grill a witness on cross-examination which
should be done in an appropriate proceeding. Villanueva
was then advised that the case would be considered
submitted for decision as the issues had already been
joined with the submission of his counter-affidavit.
On January 9, 2003, Villanueva received the Notice of
Termination8 which reads:
“Formal administrative investigation duly conducted by Legal

established that on several occasions in the year 2002, you, as
Branch Representative of Novaliches Branch, misappropriated for
your own personal purposes and benefits the excess service and
meter deposits you charged and exacted from several electric
service applicants in the aggregate amount of ONE THOUSAND
SIX HUNDRED PESOS (P1,600.00), to the damage and prejudice
of the said customers and the Company.
Your aforesaid act constitute willful and gross
violations of Section 6, par. 11 of the Company Code on
Employee Discipline which penalizes ‘(a)ll other acts of
dishonesty which cause or tend to cause prejudice to the
Company,’ subject to disciplinary action depending upon
the gravity of the offense.
Under the Labor Code of the Philippines, Article 282 thereof,
the termination of your employment in Meralco is justified on the
following grounds: “(a) Serious misconduct x x x by the employee
x x x in connection with his work”; “(c) Fraud x x x or willful
breach by the employee of the trust reposed in him by his
employer or representative”; “(e) Other causes analogous to the
foregoing.”
Based on the foregoing, Management is constrained to dismiss
you for cause from the service and employ of the Company
effective
_______________
7 Id., at p. 139.
8 Id., at p. 140.
250

Division
January 10, 2003 with forfeiture of rights and privileges.”

[Emphasis supplied]
On January 21, 2003, Villanueva filed a complaint9 for

illegal dismissal before the Regional Arbitration Branch.
He alleged that he was denied both substantive and
procedural due process because there was no formal charge
yet when Meralco effected his termination. He argued that
the proceeding taken by the company was akin to a
preliminary investigation subject to further evaluation by
the legal division and only upon findings of probable cause
would it ripen to an administrative charge. He thus waited
for the formal charge against him as signed by the
Chairman.
Anent the charge of misappropriation of company funds,
Villanueva claimed that the amount was intact with the
office and it was only during the preparation of forms that
sometimes confusion would occur, but this was promptly
corrected upon discovery to reflect the correct amount for
the kind of service paid for. He further claimed that even
assuming that the error was committed, the offense could
not have warranted a penalty of dismissal because the
Company Code of Employee Discipline failed to make
mention of his case in a specific manner. At most, his case
was one of simple negligence because the company was not
prejudiced financially. Lastly, Villanueva asserted that the
management committed a grievous error for not giving him
a chance to confront the customers who stood as witnesses
against him. There being no financial report relied on
during the investigation save for mere affidavits executed
by said customers, the investigative process was a sham,
entitling him not only to backwages but also moral and
exemplary damages.
For its part, Meralco defended Villanueva’s dismissal as
valid and for a just cause. The evidence consisting of sworn
statements of the customers, corporate audits, field reports,
_______________
9 Id., at pp. 148-149.
251
VOL. 672, JUNE 13, 2012 251

Third Division
and affidavits of Nepomuceno and Santos sufficiently

substantiated the case against him. After evaluating the
pieces of evidence and the merits of Villanueva’s defense,
the assigned investigator arrived at the recommended
penalty of dismissal which was approved by management.
The evidence presented exposed Villanueva’s modus
operandi in the processing of customer applications.
Clearly, the issuance of receipts for purported additional
deposits was Villanueva’s way to thwart the suspicion of
customers regarding excessive payments they had made.
Having defrauded customers and tarnished Meralco’s good
name, Villanueva was justly terminated from employment.
Ruling of the Labor Arbiter

On June 30, 2004, the Labor Arbiter (LA) rendered a
decision10 in favor of Villanueva ordering his reinstatement
with backwages. The LA found no violation of procedural
due process despite the denial of Villanueva’s request to
confront the affiants because he was already given ample
opportunity to be heard by way of his counter-affidavit. On
the matter of substantive due process, however, the LA
explained thus:
“x x x although there is substantial evidence to show that

complainant committed the acts as charge[d] in the notice dated August
1, 2002 but the extreme penalty of dismissal given to him should not be
meted under the penalty for violation of Section 7, par. 11 of the
Company Code subject to disciplinary action depending upon the gravity
of the offense considering the following mitigating factors, such as:
a) first offender in his 13 years of service with the company;
b) the minimal amount involved (P1,600.00);
c) failure of the company to reasonably establish that the act
of the employee is inimical to its interest or has caused
undue prejudice to its operation.
_______________
10 Id., at pp. 71-82.
252

Third Division
x x x
WHEREFORE, premises considered, respondent Manila Electric
Company is hereby ordered to take back within ten (10) days from
receipt hereof, herein complainant Vicente Villanueva, Jr. to any
substantially equivalent position not dependent on the use of CMS, or by
payroll reinstatement, at the option of the former, without loss of
seniority rights but without backwages.
Complainant’s prayer for damages is hereby dismissed for lack of
merit.”11 [Emphasis supplied]
Ruling of the NLRC

In its Resolution12 dated November 30, 2004, the NLRC
Third Division reversed the ruling of the LA and declared
Villanueva’s dismissal as valid. It held that Villanueva’s
vehement denial of the offense could not stand against
substantial evidence on record pointing to his guilt. Absent
any suspicion of ill motive against Villanueva, the sworn
statements of the customers had bearing that could not be
ignored. Worse, Villanueva never presented proof that he
indeed reported his overages to his superiors. Santos
likewise discredited him for this.
With respect to the propriety of the penalty of dismissal,
the NLRC refused to appreciate the mitigating
circumstances outlined by the LA in Villanueva’s favor.
Instead, it found Villanueva liable for dishonesty,
warranting his dismissal on the ground of serious
misconduct and loss of trust and confidence. The
dispositive portion of the NLRC Resolution reads:
“WHEREFORE, the appealed Decision of Labor Arbiter a quo

dated June 30, 2004 is hereby ordered VACATED and SET
ASIDE, and a new one entered declaring complainant’s dismissal

from service as VALID and JUSTIFIED.
_______________
11 Id., at pp. 81-82.
12 Id., at pp. 57-67.
253
VOL. 672, JUNE 13, 2012 253

Division
All other claims are hereby DENIED for lack of merit.”13
Ruling of the Court of Appeals

After having filed his Motion for Reconsideration,14
Villanueva moved for the execution of the LA’s decision
alleging that while he had been reinstated in the payroll of
Meralco effective July 16, 2004, he was not given the full
benefits to which he was entitled prior to his dismissal, like
one (1) sack of rice per month and bonuses for two (2)
months. Consequently, the LA ordered the issuance of a
Writ of Execution and Alias Writ of Execution on February
15, 2005.15 On June 20, 2006, the NLRC denied
Villanueva’s motion for reconsideration rendering its
decision as final.16
On appeal to the CA, Villanueva’s petition was
dismissed. The CA ruled that Meralco had established just
cause for the dismissal of Villanueva by substantial
evidence of his fraudulent and dishonest acts resulting in
the loss of trust and confidence that Meralco had reposed
on him. The CA said:
“There can be no dispute that as Branch Representative

petitioner occupies a position of trust and confidence. He
transacts daily with applicants for new and reactivated electric
service connections and directly receives from them amounts
intended for the required deposit charges. Indeed utmost honesty
is expected of petitioner in the discharge of his functions not only
because of his duty to handle funds belonging to the company but
also for the reason that as front line personnel for MERALCO’s
customers, he carries the image of the company and his
interactions with them leave a lasting impression on the
consuming public.
x x x
xxx in this case, the amount of discrepancy or money
misappropriated by petitioner may be minimal, even
inconsequential
_______________
13 Id., at pp. 66-67.
14 Id., at pp. 95-100.
15 Id., at pp. 175-176.
16 Id., at pp. 69-70.
254

Division
(P1,600.00). But what is reprehensible is petitioner’s irregular

and anomalous practice of requiring applicants for electric service
connection to pay amounts in excess of the minimum deposit
charge but indicating only the said minimum charge in the
“Contract of Electric Service,” making it appear later that the
omission was only a mistake if the customer comes back to the
office and asks about the discrepancy and substituting another
contract with the full payment tendered already reflected therein,
and not reporting any overage at all to the branch supervisor with
respect to those excess payments which were no longer questioned
by the customers.
x x x
WHEREFORE, premises considered, the present petition is
hereby DENIED DUE COURSE and accordingly DISMISSED for
lack of merit. The challenged Resolutions dated November 30,
2004 and June 20, 2006 of the National Labor Relations
Commission in NLRC-NCR CA No. 040992-04 (NLRC-NCR Case
No. 00-01-00977-03) are hereby AFFIRMED.”17
Hence, this petition.
Grounds
I.
THE HONORABLE COURT OF APPEALS ERRED IN NOT
FINDING GRAVE ABUSE OF DISCRETION AMOUNTING
TO LACK OR EXCESS OF JURISDICTION ON THE PART
OF THE PUBLIC RESPONDENT’S ACT OF REVERSING
THE DECISION OF THE LABOR ARBITER A QUO, AND
DECLARING PETITIONER’S DISMISSAL AS VALID AND
JUSTIFIED, AND SUBSEQUENTLY DENYING
PETITIONER’S MOTION FOR RECONSIDERATION.
II.
THE HONORABLE COURT OF APPEALS ERRED IN NOT
FINDING THAT PUBLIC RESPONDENT COMMITTED
GRAVE ABUSE OF DISCRETION IN NOT ACTING UPON
_______________
17 Id., at pp. 39-43.
255
VOL. 672, JUNE 13, 2012 255

Division
THE MOTION FOR ISSUANCE OF WRIT OF EXECUTION

FOR THE CONTINUATION OF THE PAYMENT OF
SALARIES BY WAY OF PAYROLL REINSTATEMENT,
DURING THE PENDENCY OF PETITIONER’S MOTION
FOR RECONSIDERATION, AND UNTIL ITS RESOLUTION
MORE THAN ONE (1) YEAR AND A HALF THEREAFTER
AND UNTIL THE FINALITY OF THE DECISION.18
The Court’s Ruling

The petition is without merit.
Dismissal from employment has two aspects: 1) the
legality of the act of dismissal per se, which constitutes
substantive due process, and 2) the legality of the manner
of dismissal, which constitutes procedural due process.
As to the first, the legal provision in point is Article 282
of the Labor Code which provides:
“Art. 282. Termination by Employer.—An employer may

terminate an employment for any of the following causes:
(a) Serious misconduct or willful disobedience by the

employee of the lawful orders of his employer or representative in
connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust
reposed in him by his employer or duly authorized representative;
(d) Commission of a crime or offense by the employee against
the person of his employer or any immediate member of his family
or his duly authorized representative; and
(e) Other causes analogous to the foregoing.”
In the case of Cruz v. Court of Appeals,19 the Court had

the occasion to enumerate the essential elements for
“willful breach by the employee of the trust reposed in him
by his employer”:
_______________
18 Id., at p. 17.
19 527 Phil. 230, 242-245; 494 SCRA 643, 654-655 (2006).
256

Third Division
“Xxx the loss of trust and confidence must be based on willful

breach of the trust reposed in the employee by his employer. Such
breach is willful if it is done intentionally, knowingly, and
purposely, without justifiable excuse, as distinguished from an act
done carelessly, thoughtlessly, heedlessly or inadvertently.
Moreover, it must be based on substantial evidence and not on the
employer’s whims or caprices or suspicions otherwise, the
employee would eternally remain at the mercy of the employer.
Loss of confidence must not be indiscriminately used as a shield
by the employer against a claim that the dismissal of an employee
was arbitrary. And, in order to constitute a just cause for
dismissal, the act complained of must be work-related and shows
that the employee concerned is unfit to continue working for the
employer. In addition, loss of confidence as a just cause for
termination of employment is premised on the fact that the
employee concerned holds a position of responsibility, trust and
confidence or that the employee concerned is entrusted with
confidence with respect to delicate matters, such as handling or
case and protection of the property and assets of the employer.
The betrayal of this trust is the essence of the offense for which an
employee is penalized.”20 [Underscoring supplied]
As a safeguard against employers who indiscriminately

use “loss of trust and confidence” to justify arbitrary
dismissal of employees, the Court, in addition to the above
elements, came up with the following guidelines for the
application of the doctrine: (1) loss of confidence should not
be simulated; (2) it should not be used as a subterfuge for
causes which are improper, illegal or unjustified; (3) it may
not be arbitrarily asserted in the face of overwhelming
evidence to the contrary; and (4) it must be genuine, not a
mere afterthought, to justify an earlier action taken in bad
faith.21
In this case, the above requisites have been met.
Meralco’s loss of trust and confidence arising out of
Villanueva’s act of misappropriation of company funds in
the course of processing customer applications has been

proven by substantial
_______________
20 Id.
21 Nokom v. National Labor Relations Commission, 390 Phil. 1228,
1244; 336 SCRA 97, 111-112 (2000).
257
VOL. 672, JUNE 13, 2012 257

Third Division
evidence, thus, justified. Verily, the issuance of additional

receipts for excessive payments exacted from customers is a
willful breach of the trust reposed in him by the company.
One. Villanueva worked for Meralco as a Branch
Representative whose tasks included the issuance of
Contracts for Electric Service after receipt of the amount
due for service connection from customers. Obviously, he
was entrusted not only with the responsibility of handling
company funds but also to cater to customers who intended
to avail of Meralco’s services. This is nothing but an
indication that trust and confidence were reposed in him by
the company, although his position was not strictly
managerial by nature. Loss of confidence generally applies
only to: (1) cases involving employees occupying positions of
trust and confidence; or (2) situations where the employee
is routinely charged with the care and custody of the
employer’s money or property. To the first class belong
managerial employees, that is, those vested with the
powers and prerogatives to lay down management polices
and/or to hire, transfer, suspend, lay-off, recall, discharge,
assign or discipline employees, or effectively recommend
such managerial actions. To the second class belong
cashiers, auditors, property custodians, or those who, in the
normal and routine exercise of their functions, regularly
handle significant amounts of money or property.22
Villanueva falls in the latter category.
Two. Villanueva’s acts of issuing contracts indicating
therein an amount less than the actual payment made by
the customers and, thereafter, issuing a receipt in an
attempt to document the discrepancy are certainly work-
related. This is, in fact, the core of his position as a Branch
Representative.
Three. Meralco’s charge against Villanueva was
adequately proven by substantial evidence. The records
provide an extensive showing of evidence against
Villanueva. The
_______________
22 Mabeza v. National Labor Relations Commission, 338 Phil. 386; 271
SCRA 670 (1997).
258

Third Division
affidavits of co-employees and, more especially those of the

customers themselves, bear weight in establishing the
specific acts constituting the charge against him. In fact, no
inconsistencies among these statements were found.
Villanueva likewise failed to pose a plausible defense.
Four. The breach of the company’s trust in Villanueva
was shown to have been committed knowingly and
willfully. Although the amount of discrepancy or money
misappropriated may be considered minimal and even
inconsequential to an established company such as
Meralco, it is the anomalous practice of requiring
applicants for electric service connection to pay amounts
higher than required that is the crux of Villanueva’s
offense. The conscious design of issuing another receipt to
make it appear that there was a mistake in the initial
transaction with the customers exhibits a culpable act
bordering on dishonesty and deceit. If not for personal gain,
why did Villanueva exact from customers amounts in
excess of what was required by the company? What would
have Villanueva done had the customers failed to discover
the discrepancy between the amount they paid and that
appearing in the receipts issued to them? Why were there
no overages reported to his branch supervisor with respect
to excess payments which were no longer questioned by the
customers? These questions arise out of the practice which
unfortunately corrupted an employee like Villanueva.
These doubts sway the Court away from Villanueva’s claim
that his errors were promptly corrected upon discovery.
Villanueva’s insistence, that the act which triggered his
dismissal did not justify his separation from the service
because the Company Code of Employee Discipline failed to
make mention of his case in a specific manner, fails to
persuade the Court. The established facts do not constitute
a mere case of simple negligence. The acts performed were
without the slightest connotation of inadvertence which
Villanueva could have demonstrated during the
proceedings a quo.
259
VOL. 672, JUNE 13, 2012 259

Third Division
Besides, the Court is not unmindful of the prerogatives

available to Meralco as an employer. The company has the
right to regulate, according to its discretion and best
judgment, all aspects of employment, including work
assignment, working methods, processes to be followed,
working regulations, transfer of employees, work
supervision, lay-off of workers and the discipline, dismissal
and recall of workers. Management has the prerogative to
discipline its employees and to impose appropriate
penalties on erring workers pursuant to company rules and
regulations.23 So long as they are exercised in good faith for
the advancement of the employer’s interest and not for the
purpose of defeating or circumventing the rights of the
employees under special laws or under valid agreements,
the employer’s exercise of its management prerogative
must be upheld.24 The law imposes many obligations on the
employer such as providing just compensation to workers
and observance of the procedural requirements of notice
and hearing in the termination of employment. On the

other hand, the law also recognizes the right of the
employer to expect from its workers not only good
performance, adequate work and diligence, but also good
conduct and loyalty. The employer may not be compelled to
continue to employ such persons whose continuance in the
service will patently be inimical to its interests.25
In his case, no indication of bad faith can be attributed
to Meralco as there was no dispute that it had lost trust
and confidence in Villanueva and his abilities to perform
his tasks with utmost efficiency and honesty expected of an
employee trusted to handle customers and funds. With
substantial evidence presented and Villanueva’s failure to
proffer plausi-
_______________
23 Deles, Jr. v. National Labor Relations Commission, 384 Phil. 271,
281-282; 327 SCRA 540, 548 (2000).
24 Meralco v. National Labor Relations Commission, 331 Phil. 838, 847;
263 SCRA 531, 538 (1996).
25 Agabon v. National Labor Relations Commission, 485 Phil. 248, 279;
442 SCRA 573, 607 (2004).
260

Third Division
ble explanation denying the charges against him, there can

be no other conclusion for the Court but to affirm his
dismissal.
Lastly, Villanueva argued that management committed
a grievous error for not giving him a chance to confront the
customers who stood as witnesses against him. To this, the
Court disagrees. As the NLRC and the CA found,
Villanueva was afforded due process when he was given
the required notices. More importantly, he was actually
given the opportunity to be heard. On the date of the
scheduled hearing, Villanueva was assisted by counsel who
requested for time within which to submit a counter-
affidavit. He was able to submit it, where he denied the
charges against him. Undoubtedly, Villanueva was
afforded procedural due process even if the cross-
examination of the witnesses was not permitted by
Meralco. Where a party is given the opportunity to explain
his side of the case, the right to due process is deemed
recognized for what is frowned upon is the denial of the
right to be heard.
The Court commiserates with the heirs of Villanueva for
his death last 2007. The Court, as dispenser of justice,
however, has to apply the law based on the facts of the
case. Considering that the employer has proved a just and
valid cause for Villanueva’s termination, the Court has no
option but to dismiss the case.
WHEREFORE, the petition is DENIED.
SO ORDERED.
Peralta (Acting Chairperson),** Abad, Perez*** and

Perlas-Bernabe, JJ., concur.
Petition denied.
_______________
** Per Special Order No. 1228 dated June 6, 2012.
*** Designated Acting Member in lieu of Associate Justice Presbitero
J. Velasco, Jr., per Special Order No. 1229-A dated June 6, 2012.
261
VOL. 672, JUNE 13, 2012 261

Third Division
Notes.—Guidelines for the application of loss of trust

and confidence as a just cause for dismissal of an employee
from the service: a) loss of confidence should not be
simulated; b) it should not be used as subterfuge for causes
which are improper, illegal or unjustified; c) it may not be
arbitrarily asserted in the face of overwhelming evidence to
the contrary; and d) it must be genuine, not a mere
afterthought to justify earlier action taken in bad faith.
(Bibiana Farms and Mills, Inc. vs. Lado, 611 SCRA 302
[2010])
For there to be a valid dismissal based on loss of trust
and confidence, the breach of trust must be willful,
meaning it must be done intentionally, knowingly, and
purposely, without justifiable excuse. (Aliviado vs. Procter
& Gamble Phils., Inc., 614 SCRA 563 [2010])
——o0o——
© Copyright 2021 Central Book Supply, Inc. All rights reserved.

Villanueva JR V NLRC

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Villanueva JR V NLRC

Uploaded by

Copyright:

Available Formats

9/16/21, 10:26 AM SUPREME COURT REPORTS ANNOTATED VOLUME 672

G.R. No. 176893. June 13, 2012.*

Labor Law; Termination of Employment; Two Aspects of

244 SUPREME COURT REPORTS ANNOTATED

Villanueva, Jr. vs. National Labor Relations Commission Third

misconduct or willful disobedience by the employee of the lawful

concerned is unfit to continue working for the employer. In

VOL. 672, JUNE 13, 2012 245

Villanueva, Jr. vs. National Labor Relations Commission Third

(2) it should not be used as a subterfuge for causes which are

requirements of notice and hearing in the termination of

246 SUPREME COURT REPORTS ANNOTATED

Villanueva, Jr. vs. National Labor Relations Commission Third

PETITION for review on certiorari of the decision and

VOL. 672, JUNE 13, 2012 247

June 2002, Francisco Collantes, Manager of Meralco

amounting to P310.00 was not covered by any receipt.

248 SUPREME COURT REPORTS ANNOTATED

receipts reflecting only P930.00 as the amount paid,

would have to be balanced at the end of the day. He

VOL. 672, JUNE 13, 2012 249

In a letter7 dated August 28, 2002, Meralco denied the

“Formal administrative investigation duly conducted by Legal

250 SUPREME COURT REPORTS ANNOTATED

January 10, 2003 with forfeiture of rights and privileges.”

On January 21, 2003, Villanueva filed a complaint9 for

VOL. 672, JUNE 13, 2012 251

and affidavits of Nepomuceno and Santos sufficiently

Ruling of the Labor Arbiter

“x x x although there is substantial evidence to show that

252 SUPREME COURT REPORTS ANNOTATED

Ruling of the NLRC

“WHEREFORE, the appealed Decision of Labor Arbiter a quo

ASIDE, and a new one entered declaring complainant’s dismissal

VOL. 672, JUNE 13, 2012 253

Ruling of the Court of Appeals

“There can be no dispute that as Branch Representative

254 SUPREME COURT REPORTS ANNOTATED

(P1,600.00). But what is reprehensible is petitioner’s irregular

Hence, this petition.

VOL. 672, JUNE 13, 2012 255

THE MOTION FOR ISSUANCE OF WRIT OF EXECUTION

The Court’s Ruling

“Art. 282. Termination by Employer.—An employer may

(a) Serious misconduct or willful disobedience by the

In the case of Cruz v. Court of Appeals,19 the Court had

256 SUPREME COURT REPORTS ANNOTATED

“Xxx the loss of trust and confidence must be based on willful

As a safeguard against employers who indiscriminately

the course of processing customer applications has been

VOL. 672, JUNE 13, 2012 257

evidence, thus, justified. Verily, the issuance of additional

258 SUPREME COURT REPORTS ANNOTATED

affidavits of co-employees and, more especially those of the

VOL. 672, JUNE 13, 2012 259

Besides, the Court is not unmindful of the prerogatives

and hearing in the termination of employment. On the

260 SUPREME COURT REPORTS ANNOTATED

ble explanation denying the charges against him, there can

Peralta (Acting Chairperson),** Abad, Perez*** and

VOL. 672, JUNE 13, 2012 261

Notes.—Guidelines for the application of loss of trust

© Copyright 2021 Central Book Supply, Inc. All rights reserved.

Peralta (Acting Chairperson), Abad, Perez* and