G.R. Nos. 170542-43 and G.R. No. 176460; December 13, 2010
ANTONIO A. ABOC, Petitioner, vs. METROPOLITAN BANK AND TRUST COMPANY, Respondent. [and the consolidated case]

FACTS

Antonio Aboc, a Regional Operations Coordinator for Metrobank, was dismissed on February 12, 1998, for serious misconduct and breach of trust. The bank alleged he actively participated in the unauthorized lending activities of his immediate supervisor, Wynster Chua, through credit unions like Cebu North Road Investment (CNRI) and First Fund Access (FFA). Metrobank claimed Aboc used bank premises and facilities, solicited bank clients to invest, and co-signed documents, acts which conflicted with and competed against the bank’s business. Aboc admitted performing ministerial acts for Chua but claimed he was coerced by Chua’s moral ascendancy and a sense of “utang na loob” (debt of gratitude), and that Chua had absolved him of responsibility.
The Labor Arbiter (LA) ruled in favor of Aboc, finding his dismissal illegal. The LA held that credit unions were common in other branches and that Aboc was an unwilling participant. The National Labor Relations Commission (NLRC) reversed the LA, finding the dismissal valid due to loss of trust and confidence. The Court of Appeals affirmed the NLRC’s decision, prompting Aboc to appeal to the Supreme Court. In a separate petition, Metrobank challenged the CA’s award of backwages and benefits to Aboc for the period of his payroll reinstatement pending appeal.

ISSUE

The core issues were: (1) Whether Aboc was validly dismissed for just cause; and (2) Whether he was entitled to backwages and benefits for the period he was reinstated on payroll pending the bank’s appeal of the LA’s initial reinstatement order.

RULING

The Supreme Court denied Aboc’s petition and granted Metrobank’s, modifying the CA decision. On the first issue, the Court upheld Aboc’s dismissal. As a managerial employee, Aboc owed a high degree of loyalty to Metrobank. His admitted acts—preparing documents, acting as co-signatory, and soliciting clients for a competing lending business—constituted willful breach of trust. His defense of coercion and “utang na loob” was unavailing; as an officer, he had the duty to resist such pressures and report the irregular activity. His actions directly undermined the bank’s interests, justifying dismissal based on loss of confidence.
On the second issue, the Court ruled that Aboc was not entitled to full backwages and benefits for the payroll reinstatement period. The Court distinguished between actual and payroll reinstatement. The LA’s order for reinstatement pending appeal was immediately executory, but Metrobank opted for payroll reinstatement, merely keeping Aboc on the payroll without returning him to work. The Court held that payroll reinstatement does not equate to actual service. Therefore, Aboc was only entitled to his basic salary during that period, not to other benefits and allowances that accrue from actual work. The CA erred in awarding full CBA benefits for a period when he did not render actual service.