G.R. No. 166096, September 11, 2008
Philippine National Bank vs. Ramon Brigido L. Velasco

FACTS

Respondent Ramon Brigido L. Velasco, a PNB audit officer, withdrew US$15,000 from his dollar savings account at an off-line branch on June 30, 1995. Due to a bank error, this withdrawal was not posted to his account at the home branch, creating an overstated balance. Velasco later made and authorized several subsequent withdrawals against this inflated balance. The discrepancy was discovered during an internal audit in February 1996. Velasco initially claimed he made a “no-book” withdrawal (without his passbook) and later deposited checks to cover the amount after learning his account was overstated. However, during the administrative proceedings, he changed his story, asserting the withdrawal was “with passbook.”
PNB formally charged Velasco with dishonesty, grave misconduct, and conduct grossly prejudicial to the bank’s interest. The charges cited his violation of bank regulations for a “no-book” withdrawal without the required letter of introduction, and his benefiting from the bank’s posting error by making further withdrawals. After investigation, PNB dismissed Velasco. He filed a complaint for illegal dismissal, which the Labor Arbiter and NLRC dismissed, finding the dismissal valid. The Court of Appeals reversed, finding the dismissal illegal, prompting PNB’s appeal to the Supreme Court.

ISSUE

Was Velasco illegally dismissed?

RULING

No, the Supreme Court reinstated the NLRC decision and found the dismissal for just cause valid. The legal logic centers on loss of trust and confidence, a valid ground for dismissing an employee in a fiduciary position. As a bank officer, Velasco was bound by the highest standards of integrity. His actions constituted willful breach of this trust. First, he violated explicit bank rules by conducting a “no-book” inter-branch withdrawal without authorization. Second, and more critically, he knowingly exploited the bank’s accounting error. Upon discovering the unposted withdrawal and the inflated balance, his duty was to immediately report it. Instead, he and his spouse continued to withdraw funds against the non-existent balance, effectively obtaining interest-free use of bank funds. His shifting defenses—from a “no-book” withdrawal to one “with passbook”—further evidenced dishonesty. The Court held that his actions, taken together, demonstrated a clear intent to defraud the bank and constituted serious misconduct and willful breach of trust, justifying dismissal. The employer’s right to dismiss an employee for acts inimical to its interests was properly exercised.