G.R. No. 208321, July 30, 2014
WESLEYAN UNIVERSITY PHILIPPINES, Petitioner, vs. NOWELLA REYES, Respondent.

FACTS

Nowella Reyes was appointed as University Treasurer of Wesleyan University – Philippines (WUP). A new Board of Trustees engaged an external auditor to investigate rumors of anomalies. The audit revealed irregularities in the Treasury Department under Reyes’s stewardship, including: (1) the encashment of checks payable to teachers and third parties directly with the Treasury, violating the imprest cash management system; (2) the encashment of various crossed checks payable to the University Treasurer at ChinaBank despite management’s intention being mere fund transfer between accounts, with related vouchers missing; and (3) the encashment of a specific crossed check payable to the Treasurer. WUP served Reyes a Show Cause Order, placed her under preventive suspension, and required her to explain these findings and unliquidated cash advances. After submitting her explanation and an HR investigation, she was terminated on July 9, 2009, on the ground of loss of trust and confidence. Reyes filed a complaint for illegal dismissal, arguing constructive dismissal due to a 60-day preventive suspension, violation of due process, and that the charges were based on speculation. The Labor Arbiter ruled in favor of Reyes, declaring the dismissal illegal and ordering reinstatement with backwages and damages. The NLRC reversed, finding the dismissal legal based on loss of trust and confidence. The Court of Appeals then reinstated the Labor Arbiter’s decision, declaring the termination illegal.

ISSUE

Whether the Court of Appeals erred in declaring the dismissal of Nowella Reyes as illegal.

RULING

The Supreme Court REVERSED the Court of Appeals Decision and REINSTATED the NLRC Decision, thereby declaring the dismissal of Nowella Reyes LEGAL. The Court held that as University Treasurer, Reyes was a confidential employee holding a position of trust. The audit findings established specific irregularities under her command responsibility, such as the improper encashment of checks violating the imprest system and the encashment of crossed checks contrary to management’s instructions, which provided a valid basis for loss of trust and confidence. The Court found that WUP substantially complied with the twin-notice rule, affording her due process. The preventive suspension, though initially set for 60 days, did not invalidate the dismissal as she was terminated within the 30-day period. The charges were not based on mere rumors but on concrete audit findings. Her failure to properly controvert these findings and her admission to knowingly committing acts that jeopardized university finances justified the loss of trust.