G.R. No. 146741 , February 27, 2002
National Bookstore, Inc., and Alfredo C. Ramos, Petitioners, vs. Court of Appeals Special Eight Division, National Labor Relations Commission, Marietta M. Ymasa and Edna L. Gabriel, Respondents.

FACTS

Petitioner National Bookstore employed respondents Marietta Ymasa and Edna Gabriel as Cash Custodian and Head Cashier, respectively. On June 28, 1992, they counted and sealed the previous day’s sales proceeds for bank deposit, storing the sealed bags in Ymasa’s locked cabinet before eventual transfer to the branch vault. The following day, upon retrieval for deposit, a shortage of P42,758.70 was discovered. The management placed respondents under preventive suspension and required them to explain the loss. In their written explanation, they denied responsibility, citing their long years of service, routine practice, and lack of access to the vault. Finding their explanations unsatisfactory, National Bookstore terminated their employment for gross neglect of duty and loss of confidence.
Respondents filed a complaint for illegal dismissal. The Labor Arbiter ruled in their favor, finding dismissal without just cause, ordering separation pay and back wages. The National Labor Relations Commission (NLRC) affirmed but deleted damages. The Court of Appeals subsequently affirmed the NLRC’s resolutions, prompting this petition.

ISSUE

Whether the Court of Appeals erred in affirming the NLRC’s finding that petitioners failed to prove a valid cause for the dismissal of private respondents.

RULING

The Supreme Court denied the petition and affirmed the assailed decision. The employer bears the burden of proving that a dismissal is for a valid cause. For dismissal based on loss of confidence, the breach of trust must be willful, founded on clearly established facts, and the employee concerned must hold a position of trust. The Court found petitioners failed to discharge this burden. The alleged gross neglect was not substantiated. The loss occurred despite respondents following standard operating procedures, including counting in the presence of a watcher, sealing the bags, and securing them first in a locked cabinet and then in the vault. No evidence pointed to respondents’ exclusive responsibility for the loss, as other personnel had access to the funds. Mere occurrence of a shortage, without proof of willful breach or negligence attributable to the employees, is insufficient to justify dismissal on grounds of loss of confidence or gross neglect. Consequently, the dismissal was illegal. The awards of separation pay in lieu of reinstatement and back wages were upheld.