G.R. No. 167449; December 17, 2008
BRISTOL MYERS SQUIBB (PHILS.), INC., petitioner, vs. RICHARD NIXON A. BABAN, respondent.

FACTS

Petitioner Bristol Myers Squibb (Phils.), Inc. hired respondent Richard Nixon A. Baban as a district manager in 1992, assigned to Cagayan de Oro-Northern Mindanao. His duties included promoting company products to medical practitioners, selling to drug outlets, and supervising territory managers. On June 22, 1998, during a field audit, company auditor Sheela Torreja found twenty packs of “Mamacare” sample products in a company car. A note stapled to the package, written in Chavacano and signed by “Atty. Ricardo S. Baban, Jr.” (respondent’s father), thanked supporters after losing his vice-mayoralty bid, indicating the samples were for distribution to political supporters. Respondent admitted attaching the notes but claimed the samples were intended for a doctor and a midwife for proper distribution, and pleaded it was an honest mistake. After an investigation, petitioner dismissed respondent on August 25, 1998, for breach of trust. Respondent filed a complaint for illegal dismissal. The Labor Arbiter upheld the dismissal. The NLRC initially declared the dismissal illegal, ordering reinstatement with backwages and damages, but upon reconsideration, reinstated the Labor Arbiter’s decision upholding termination but awarded separation pay. The Court of Appeals reinstated the original NLRC decision favoring respondent, finding dismissal too harsh. Petitioner elevated the case to the Supreme Court.

ISSUE

Whether the Court of Appeals erred in ordering the reinstatement, with full backwages and damages, of a confidential employee found guilty of breach of trust.

RULING

The Supreme Court ruled in favor of the petitioner, reversing the Court of Appeals. The Court held that respondent, as a district manager handling significant amounts of company samples, occupied a position of trust and confidence. His act of attaching a political “thank you” note to company samples intended for distribution to his father’s supporters constituted a willful breach of that trust, violating company rules against using company property for personal benefit. Loss of trust and confidence is a valid ground for dismissal under Article 282(c) of the Labor Code. The breach was willful, as respondent admitted the act and did not seek prior approval. The penalty of dismissal was commensurate and justified, as the employer’s right to dismiss an employee for breach of trust is paramount when the breach is established. The Court reinstated the NLRC’s Resolution dated October 23, 2000, which upheld the validity of the dismissal and awarded separation pay as financial assistance.