G.R. No. 167177 September 27, 2006
ESTRELLA S. BAÑEZ, DE LA SALLE UNIVERSITY EMPLOYEES ASSOCIATION (DLSUEA), represented by Union President, BAYLON R. BAÑEZ, petitioners, vs. DE LA SALLE UNIVERSITY, DR. CARMELITA QUEBENGCO, BRO. ANDREW GONZALEZ, FSC, GENEROSO TAMAYO, LIEZEL BUÑO, DR. CECILIA ALABASTRO, DR. GERARDO JANAIRO, CYNTHIA LIM, AND GLORIA DE LEON, respondents.

FACTS

Petitioner Estrella Bañez, a Curriculum Evaluator at De La Salle University, was implicated in an anomaly involving the unauthorized collection of comprehensive examination fees from graduate students. An investigation found that Bañez would assess fees and direct students to pay a co-employee, Virginia Cantillas, who issued temporary receipts without remitting the payments to the Accounting Office. The University placed both under preventive suspension and required them to explain. After they denied the charges and failed to attend scheduled hearings, the University terminated their employment. Bañez and the Union filed complaints for illegal dismissal and unfair labor practice, alleging the charges were harassment due to her husband’s union activities.
The Labor Arbiter initially dismissed the illegal dismissal charge but awarded monetary benefits. The NLRC remanded the case for further proceedings. On remand, a different Labor Arbiter found the dismissal illegal, ordering reinstatement with backwages and damages. The University appealed to the Court of Appeals, which set aside the Labor Arbiter’s decision, ruling the dismissal was for just cause. The appellate court found substantial evidence of Bañez’s participation in the fraudulent scheme.

ISSUE

Whether the Court of Appeals erred in reversing the Labor Arbiter’s finding and ruling that petitioner Estrella Bañez was validly dismissed for just cause.

RULING

The Supreme Court affirmed the Court of Appeals’ decision, upholding the validity of Bañez’s dismissal. The legal logic rests on the principle that while the employer bears the burden of proving just cause for dismissal, such proof need only be substantial evidence. The Court found the University presented ample evidence, including sworn statements from students detailing how Bañez assessed fees and directed them to pay Cantillas, who then issued unofficial receipts. This established a concerted action to collect fees outside official channels, constituting serious misconduct and fraud. The Court rejected the defense of alleged union harassment, noting the investigation was triggered by a student report, not union activity. The failure of Bañez to attend the investigative hearings further weakened her position. Consequently, her actions breached the trust inherent in her employment, providing a valid ground for termination under Article 282 of the Labor Code. The Court, however, modified the ruling by ordering the release of all monetary benefits due to Bañez under the law or Collective Bargaining Agreement as of the date of her termination.