GR 123492; (August, 1997) (Digest)
G.R. No. 123492 August 21, 1997
DANILO A. YAP, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and CHINA BANKING CORPORATION (CBC), respondents.
FACTS
Petitioner Danilo A. Yap was employed by private respondent China Banking Corporation (CBC) from January 1978 until his dismissal on October 1, 1986, having occupied various positions including Branch Accountant. In April 1981, he availed of a housing loan under the bank’s Financing Plan for Officers and Employees, the proceeds of which were to be used exclusively for the construction of his house. In 1986, the bank discovered that the loan proceeds were not used for the intended purpose, violating the Plan’s conditions. The bank required Yap to explain the violation. Yap explained that he used a substantial portion to repay installments advanced by his brother on the lot and incurred pre-construction expenses. The bank found his explanation unsatisfactory, directed him to refund the loan, and subsequently terminated his employment for gross violation of the Plan’s rules. Yap filed a complaint for illegal dismissal. The Labor Arbiter dismissed the complaint but awarded financial assistance. The NLRC affirmed the dismissal. Yap filed this petition, claiming his dismissal was a pretext due to his exposure of anomalies involving bank officers.
ISSUE
Whether the National Labor Relations Commission committed grave abuse of discretion in affirming the dismissal of petitioner Danilo A. Yap.
RULING
The Supreme Court granted the petition. It found that while Yap violated the loan agreement, such violation did not constitute dishonesty or willful breach of trust that would justify dismissal. The Court ruled that the penalty of dismissal was too severe, as the violation pertained to a company loan program and not to an act involving the bank’s funds or operations in his capacity as an accountant. The Court held that the NLRC committed grave abuse of discretion in upholding the dismissal. Applying the principle that dismissal is warranted only for serious misconduct or willful breach of trust, and considering Yap’s length of service and the circumstances, the Court ordered separation pay in lieu of reinstatement (due to strained relations) and full backwages from the date of dismissal until the finality of the decision.