G.R. No. 123810 January 20, 1999
CONSOLIDATED RURAL BANK (Cagayan Valley), INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and ANTONIA SANCHEZ, respondents.

FACTS

Private respondent Antonia L. Sanchez was the Branch Manager of petitioner Consolidated Rural Bank’s (CONSOLBANK) Ilagan Branch when she was terminated effective August 7, 1993, for “lack of diligence, gross negligence, insubordination, and violation of existing bank policies resulting to loss.” The termination arose from an incident in May 1992 where a depositor, Rosalinda Rodriguez, presented six U.S. Treasury Warrants (USTWs) for deposit. As Branch Manager, Sanchez referred the checks to CONSOLBANK’s Head Office, which accepted and deposited them for clearing. After being informed the checks were cleared, the Head Office withdrew the amount and used it as cash assistance for the Ilagan Branch, crediting the branch with interest income. The depositor subsequently withdrew funds. Six months later, CONSOLBANK was informed by its depositary bank that the USTWs had been dishonored for being altered and was requested to cover the amount plus interest charges.
A fact-finding committee created by CONSOLBANK’s Board of Directors recommended a 30-day suspension for Sanchez, the General Manager, and the Treasury Department Manager, finding Sanchez’s participation mitigated because she consulted the Head Office before acting and relied on its actions. Sanchez was later required to comment on charges of willful disobedience. An Executive Committee conducted further hearings, after which the Board of Directors issued a resolution dismissing Sanchez.
Sanchez sued for illegal dismissal. The Labor Arbiter ruled in her favor, finding her illegally dismissed and awarding reinstatement, back wages, benefits, moral damages, and attorney’s fees. The Labor Arbiter found that Sanchez could not be guilty of the charges as she merely referred the checks to her superiors who accepted them, and that her dismissal was tainted with bad faith as she was made a scapegoat. The Labor Arbiter also ruled she was denied due process. The NLRC affirmed the Labor Arbiter’s decision. CONSOLBANK’s motion for reconsideration was denied.

ISSUE

Whether the National Labor Relations Commission committed grave abuse of discretion in affirming the Labor Arbiter’s decision that Antonia L. Sanchez was illegally dismissed.

RULING

The Supreme Court dismissed the petition. On procedural grounds, the Court found no denial of due process to CONSOLBANK. The Labor Arbiter’s decision to proceed with a clarificatory hearing despite the absence of CONSOLBANK’s counsel was not arbitrary, as notice was given and the absence was due to petitioner’s own fault and negligence. The holding of a hearing is discretionary with the Labor Arbiter.
On substantive grounds, the Court upheld the findings of the Labor Arbiter and the NLRC that no valid cause existed for Sanchez’s dismissal. The evidence showed that Sanchez, as Branch Manager, referred the USTWs to the Head Office, which then accepted and processed them. Her actions were in accordance with standard banking procedure and she relied on the Head Office’s expertise. The alleged policy against accepting dollar checks was not proven, and the subsequent actions of the Head Office indicated its knowledge and approval. The Court also agreed that Sanchez was denied due process as she was not properly informed of the charges or given a real opportunity to defend herself before dismissal. The NLRC did not commit grave abuse of discretion in affirming the illegal dismissal ruling.