G.R. No. 83433 November 12, 1992
CONRADO TIU and/or CONTI PAWNSHOP, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and CARMEN L. ANCHETA, respondents.

FACTS

Private respondent Carmen L. Ancheta was employed by petitioners from April 1970 until her dismissal on February 25, 1986, having risen from appraiser to pawnshop supervisor. Her duties involved appraising and accepting pledged jewelry and supervising business and personnel. In December 1985, petitioners received an anonymous letter alleging anomalies by Ancheta, including false claims of lost equipment. An investigation ensued. While not guilty of the letter’s allegations, petitioners found she violated a company policy allowing employees to purchase jewelry at a discounted “agent’s price” only for personal use or for immediate family. Petitioners believed she was reselling the jewelry. In a January 10, 1986 letter, they required her to explain. She submitted a handwritten answer admitting some relatives not in her immediate family bought jewelry at the discount, but with the salesgirls’ approval. Finding this unsatisfactory, petitioners suspended her for 30 days starting January 27, 1986. On that same start date of suspension, she received a termination letter effective February 25, 1986, citing loss of trust and confidence based on the policy violation, dishonesty in presenting jewelry not from the unauthorized purchases, and buying jewelry from Conti customers for personal purposes on company premises. She filed a complaint for illegal dismissal. The Labor Arbiter ruled in her favor, ordering unpaid wages, reinstatement with backwages, and moral/exemplary damages. The NLRC, on appeal, modified the decision by removing the reinstatement order and deleting the moral/exemplary damages award, but ordered petitioners to pay backwages for two years and separation pay. Petitioners filed this special civil action for certiorari.

ISSUE

Whether the National Labor Relations Commission committed grave abuse of discretion in awarding backwages and separation pay despite the existence of a clear basis for dismissing the private respondent on the ground of loss of trust and confidence.

RULING

The Supreme Court DISMISSED the petition and AFFIRMED the NLRC decision with modification regarding the period of backwages. The Court held that while loss of trust and confidence under Article 283(c) (now Article 282(c)) of the Labor Code is a valid ground for dismissal, it must be based on a willful breach of trust, done intentionally, knowingly, and purposely, and must be supported by substantial evidence, not merely on the employer’s whims or suspicions. The Court found the grounds for dismissal in this case to be flimsy and insufficient. The alleged violation of the company policy on discounted jewelry purchases was not shown to be willful or dishonest, as the sales were done openly with the salesgirls’ approval. The other charges, such as presenting unrelated jewelry or buying from customers, were not substantiated. The dismissal was therefore illegal. However, due to the strained relations from the antagonism between the parties, reinstatement was deemed no longer feasible. Consequently, the award of separation pay was proper. The Court modified the NLRC decision by increasing the award of backwages from two years to three years without qualification or deduction, in accordance with settled jurisprudence.