G.R. No. 106027 . July 25, 1994.
BPI CREDIT CORPORATION, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and BENJAMIN JOVELLANOS, respondents.

FACTS

Private respondent Benjamin Jovellanos, a Marketing Assistant for petitioner BPI Credit Corporation, was preventively suspended and subsequently dismissed based on an affidavit by a client, Alex Racimo. Racimo alleged that a co-employee, Ric Torio, demanded a percentage of his approved loan, claiming it was for Jovellanos. Upon confrontation, Jovellanos denied knowing Racimo or authorizing any such demand. Jovellanos later submitted a sworn clarificatory statement from Racimo himself, which clarified that Jovellanos never personally approached him and that Racimo had no basis to claim Jovellanos instructed Torio, suggesting Jovellanos may have merely been used by Torio.
The petitioner formed an investigative committee. The investigation report indicated that out of seven clients interviewed, five stated employees did not ask for consideration, while two claimed they were approached but were hesitant to give written statements. The petitioner ultimately dismissed Jovellanos on grounds of loss of trust and confidence, citing the initial affidavit and alleged irregularities in a loan transaction, including an omission in a loan offering memo also signed by his superiors.

ISSUE

Whether the dismissal of Benjamin Jovellanos on the ground of loss of trust and confidence was valid.

RULING

No, the dismissal was not valid. The Supreme Court affirmed the NLRC decision, ruling that the evidence presented by the employer was insufficient to constitute a just cause for dismissal. The right to security of tenure is a constitutional right that cannot be forfeited except upon clear and convincing evidence of a just and lawful cause. The primary evidence against Jovellanos was the hearsay affidavit of Racimo, which was effectively retracted by Racimo’s own subsequent clarificatory statement. The other investigative findings were uncorroborated and unreliable, as the two clients who alleged being approached refused to provide written statements.
Furthermore, the alleged procedural lapse in a loan memo was not solely attributable to Jovellanos, as it was also signed by higher-ranking officers. The Court emphasized that a dismissal based on loss of trust and confidence requires more than a mere “some basis” standard, especially for an employee with eleven years of untainted service. The petitioner failed to meet the burden of proving that the loss of trust was based on willful breach and rested on substantial evidence. Consequently, the dismissal was illegal for lack of just cause and for being grounded on evidence that was hearsay, uncorroborated, and untrustworthy.