G.R. No. 164423 ; June 16, 2009
TRIUMPH INTERNATIONAL (PHILS.), INC., Petitioner vs. RAMON L. APOSTOL and BEN M. OPULENCIA, Respondents.

FACTS

Respondents Ramon Apostol, Assistant Manager, and Ben Opulencia, Warehouse Supervisor, were employed by petitioner Triumph International. An August 1999 inventory cycle count revealed significant stock discrepancies. The company investigation concluded that over 15,000 pieces of finished goods, worth approximately ₱3.5 million, were pilfered. The company also discovered that Apostol and Opulencia had made substantial, unauthorized adjusting entries to the stock list totaling 17,620 pieces to reconcile these variances without proper approval from the Accounting Department or their superior, Virginia Sugue. Apostol claimed the adjustments were an agreed procedure to address dealer complaints and were known to finance, while Sugue testified she gave no formal authorization and expected a final report for approval, which was never submitted. The company terminated both employees for loss of trust and confidence.
The Labor Arbiter found the dismissals illegal, a decision reversed by the NLRC, which upheld the termination. The Court of Appeals reinstated the Labor Arbiter’s decision, ruling the dismissals were illegal due to insufficient evidence of participation in the pilferage and finding the stock adjustments were a long-standing, known practice not amounting to willful breach of trust.

ISSUE

Whether the Court of Appeals erred in ruling that the dismissals of respondents for loss of trust and confidence were illegal.

RULING

The Supreme Court granted the petition and reversed the Court of Appeals, ruling the dismissals were valid. For loss of trust and confidence to be a valid ground for dismissal of a managerial employee, the breach of trust must be willful, founded on clearly established facts. The Court found such facts present. The core issue was not the pilferage itself, but the respondents’ unauthorized and concealed adjustments to official stock records. Apostol, a managerial employee entrusted with inventory control, admitted making massive adjustments without the required formal approval from his superior, Sugue, who explicitly testified she never authorized such entries and was never provided a final report. His claim that the practice was known and involved consultation with finance was contradicted by the company’s internal control procedures and the sheer, unreported scale of the adjustments. These acts constituted a willful breach of the trust inherent in his position. For Opulencia, as a supervisory employee, his direct participation in executing these unauthorized entries under Apostol’s direction similarly justified dismissal. The employer’s loss of confidence, arising from these deliberate acts undermining inventory integrity, was reasonable and grounded on substantial evidence.