G.R. No. 197011 , January 28, 2015
ESSENCIA Q. MANARPIIS, Petitioner, vs. TEXAN PHILIPPINES, INC., RICHARD TAN and CATHERINE P. RIALUBIN-TAN, Respondents.

FACTS

Petitioner Essencia Q. Manarpiis was hired in July 1999 as Sales and Marketing Manager by respondent Texan Philippines, Inc. (TPI), a domestic corporation owned and managed by respondents Catherine Rialubin-Tan and Richard Tan. On July 27, 2000, citing insurmountable losses, respondents served a written notice to all employees that TPI would cease operations by August 31, 2000. Petitioner alleged that on that same day, she was barred from reporting for work and her last salary was paid only up to the end of July 2000. On August 7, 2000, she filed a complaint for illegal dismissal and monetary claims. On September 18, 2000, she received a memorandum dated September 15, 2000, notifying her of an investigation for alleged violations of company rules. Her counsel replied that an investigation was pointless as she had already been dismissed due to the purported closure. Subsequently, she received a memorandum dated September 25, 2000, terminating her employment effective that day on the grounds of dishonesty, loss of confidence, and abandonment of work, citing an internal audit that discovered double payments to a supplier and fraudulent expense reimbursements, and noting her absence without official leave (AWOL) since August 3, 2000. Respondents denied illegal dismissal, claiming the closure was averted by new financing, and that petitioner’s termination was due to infractions discovered later and her abandonment of work. The Labor Arbiter ruled the dismissal illegal, awarding backwages, separation pay, commissions, and attorney’s fees. The NLRC affirmed this decision. The Court of Appeals reversed, holding the dismissal valid.

ISSUE

Whether the Court of Appeals erred in reversing the findings of the Labor Arbiter and the NLRC and in ruling that petitioner was validly dismissed.

RULING

Yes. The Supreme Court granted the petition, reversed the Court of Appeals Decision, and reinstated the NLRC Decision which affirmed the Labor Arbiter’s ruling that petitioner was illegally dismissed. The Court held that respondents failed to substantiate the alleged serious business losses justifying closure or retrenchment. The notice of closure was a mere pretext, as the company continued its operations. The subsequent termination based on alleged infractions discovered after the notice of closure was not justified. The grounds of loss of confidence and abandonment were not proven by clear and convincing evidence. Loss of confidence must be based on willful breach of trust, and for a managerial employee, it must be founded on clearly established facts. The alleged acts of dishonesty were not substantiated. Abandonment requires a clear, deliberate, and unjustified refusal to resume employment, which was not present here, as petitioner had already been barred from work and had filed an illegal dismissal complaint. Thus, the dismissal was illegal, and petitioner is entitled to backwages, separation pay in lieu of reinstatement, and her monetary claims.