G.R. No. 125671 January 28, 2000
Condo Suite Club Travel, Inc., petitioner, vs. National Labor Relations Commission (Third Division) and Florencio Lalo, respondents.

FACTS

Private respondent Florencio Lalo was employed by petitioner Condo Suite Club Travel, Inc. as a front desk supervisor. An incident occurred wherein a car-for-hire owned by Lalo, but regularly rented and operated by Joselito Landrigan as a taxi, was allegedly used by a Korean guest, Mr. In Hu. Landrigan approached the hotel’s front desk clerk, Editha Mariano, and requested that his P2,000.00 collectible from Mr. Hu for car rental be included in the guest’s hotel bill. Mariano acceded, leading to an overbilling. Upon discovering the discrepancy later, Mr. Hu complained. An investigation ensued, and Landrigan eventually returned the P2,000.00. Petitioner, alleging loss of confidence and malicious intent to defraud, terminated Lalo’s employment on September 26, 1994, holding him responsible as the car owner and supervisor.
Lalo filed a complaint for illegal dismissal. The Labor Arbiter dismissed the complaint. On appeal, the NLRC reversed the Arbiter, finding the dismissal illegal. The NLRC ruled that the overbilling was solely Landrigan’s handiwork, with no evidence directly linking Lalo to the anomaly. It ordered Lalo’s reinstatement with backwages, but limited the backwages only up to the date petitioner allegedly offered reinstatement during proceedings, which Lalo rejected.

ISSUE

Whether the NLRC committed grave abuse of discretion in finding Lalo’s dismissal illegal and in computing his awarded backwages.

RULING

The Supreme Court affirmed the NLRC’s finding of illegal dismissal but modified the computation of backwages. On the substantive issue, the Court upheld the NLRC’s conclusion that petitioner failed to substantiate its claim of loss of confidence. Loss of confidence, to be a valid ground for dismissal, must be based on willful breach of trust founded on clearly established facts. The evidence merely showed Lalo owned the car involved; it did not establish his direct participation in, or prior knowledge of, Landrigan’s fraudulent scheme. His supervisory role alone, absent proof of conspiracy or negligence, was insufficient to justify dismissal. The act was attributable solely to Landrigan and the front desk clerk, Mariano.
Regarding backwages, the Court found the NLRC’s limitation erroneous. Under Article 279 of the Labor Code, an illegally dismissed employee is entitled to reinstatement and full backwages from the time compensation was withheld until actual reinstatement. The Court ruled that a mere offer of reinstatement during litigation, which Lalo rejected under the circumstances, does not absolve the employer from the continuing obligation to pay backwages. The offer did not constitute actual reinstatement. Therefore, petitioner is liable for full backwages from the date of illegal dismissal up to Lalo’s actual reinstatement. The NLRC was directed to recompute the award accordingly.