G.R. No. 172401; October 30, 2006
Carlos G. Azul, petitioner, vs. Banco Filipino Savings and Mortgage Bank, respondent.

FACTS

Petitioner Carlos G. Azul was the branch accountant of Banco Filipino’s Iriga branch. An audit revealed his involvement in “kiting” operations, where check deposits were treated as cash, allowing withdrawals against uncollected funds, causing a total loss of P4,469,500.00. During a formal investigation by an Ad Hoc Committee, Azul did not deny participation but claimed he merely followed the instructions of his branch manager, Danilo Disuanco, who allegedly directed him to use his password and ID to release “float days.” He denied profiting from the transactions. Consequently, the bank terminated his services and forfeited his benefits per its Employee Guidelines.
Azul filed an illegal dismissal complaint. The Labor Arbiter ruled in his favor, ordering reinstatement with backwages. The National Labor Relations Commission (NLRC) affirmed this decision and denied the bank’s motion for reconsideration for being one day late. The bank then filed a petition for certiorari with the Court of Appeals, which reversed the NLRC and declared the dismissal lawful. Azul’s motion for reconsideration was denied, prompting this petition.

ISSUE

The primary issues are: (1) whether the Court of Appeals correctly disregarded the bank’s procedural lapse in filing its motion for reconsideration with the NLRC; and (2) whether Azul was illegally dismissed.

RULING

The Supreme Court denied the petition, affirming the Court of Appeals. On the procedural issue, the Court held that technical rules of procedure may be relaxed in labor cases to serve substantial justice, especially given the seriousness of the infraction involved. The bank’s delay, attributed to a messenger’s personal emergency, was deemed justifiable to allow a merits-based resolution.
On the substantive issue, the Court found that Azul’s dismissal for loss of trust and confidence was valid. As a branch accountant, he held a position of confidence requiring a high degree of fidelity. His admission that he knowingly used his password to override the system and facilitate the kiting scheme, despite being aware of the bank’s policy against drawings on uncollected deposits, constituted willful breach of trust. His claim of merely following orders and not profiting did not exonerate him; his direct and indispensable participation in the prohibited transactions eroded the requisite trust. The Court cited jurisprudence that even without proof of personal gain, an employee’s actions that sow mistrust justify dismissal. Thus, there was just cause for termination, and no illegal dismissal occurred.