G.R. No. 165199 ; November 27, 2009
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, Petitioner, vs. INOCENCIO B. BERBANO, JR., Respondent.

FACTS

Respondent Inocencio B. Berbano, Jr., a regular employee of PLDT, was dismissed for installing eight special service features (e.g., conference call, call diversion, security code) on his brother-in-law’s telephone line without authorization. Berbano admitted the act but claimed it was solely for personal study and testing of the company’s EWSD switching equipment, arguing he had no fraudulent intent as the line belonged to a relative who was unaware of the installations. PLDT found his explanation unacceptable, emphasizing that company rules limited testing to one day, whereas the features remained active for two months until discovered, and that some installed features, like “non-chargeable,” could have resulted in financial loss to the company.
The Labor Arbiter ruled the dismissal illegal, ordering reinstatement with full backwages. The National Labor Relations Commission (NLRC) reversed, finding the dismissal valid. The Court of Appeals then reinstated the Labor Arbiter’s decision, prompting PLDT’s petition to the Supreme Court.

ISSUE

Was Berbano illegally dismissed?

RULING

Yes, the Supreme Court affirmed the Court of Appeals and held that Berbano was illegally dismissed. The legal logic centered on the requirement for just cause under Article 282 of the Labor Code and the employer’s burden of proving both a valid reason and observance of due process. The Court found PLDT failed to prove loss of trust and confidence, a ground for dismissal of a fiduciary employee. While Berbano committed a violation, his actions did not constitute willful breach of trust. His intent was for personal study, not fraud or gain, as the beneficiary was a relative unaware of the features, and there was no evidence he or the subscriber used the features to PLDT’s detriment. The prolonged two-month period, while negligent, did not automatically equate to fraudulent intent absent proof of actual use or damage.
Furthermore, the penalty of dismissal was grossly disproportionate to the offense. Berbano had a long, unblemished record of over six years. His act, though unauthorized, was a first offense motivated by research, not dishonesty. The Court emphasized that loss of trust must be based on willful breach, not mere error in judgment. Since the breach of trust was not established, the dismissal lacked just cause. Consequently, Berbano was entitled to reinstatement and full backwages from dismissal until finality of the decision. Attorney’s fees were also awarded as the case involved unlawful withholding of wages.