G.R. No. 176800; September 5, 2011
ELMER LOPEZ, Petitioner, vs. KEPPEL BANK PHILIPPINES, INC., MANUEL BOSANO III and STEFAN TONG WAI MUN, Respondents.

FACTS

Petitioner Elmer Lopez was the Branch Manager of respondent Keppel Bank Philippines, Inc. in Iloilo City. Through a notice dated August 12, 2003, the bank required Lopez to explain in writing why he should not be disciplined for issuing, without authority, two purchase orders (POs) for the Hertz Exclusive Cars, Inc. (Hertz) account totaling ₱6,493,000.00. Lopez submitted his written explanation on the same day. The bank, through respondents Manuel Bosano III and Stefan Tong Wai Mun, terminated Lopez’s employment effective immediately on August 27, 2003. After a meeting for reconsideration on September 25, 2003, where Lopez was accompanied by his lawyer and a military man, the bank reiterated its dismissal decision.
Lopez filed a complaint for illegal dismissal and money claims. Before the Labor Arbiter, Lopez alleged he issued the POs as part of his strategy to enhance the bank’s business, noting the bank honored the first PO and earned income from it, and the second PO did not materialize due to a negative credit rating of a Hertz director. The bank denied approving the first PO, asserted Lopez had no authority to issue the POs as there was a standing advice not to approve any Hertz loan application, and claimed Lopez committed a serious violation of company rules.
The Labor Arbiter ruled Lopez was illegally dismissed, ordering his reinstatement and awarding backwages, moral and exemplary damages, and the purchase price of a vehicle. The NLRC reversed this decision on appeal, finding Lopez’s issuance of the POs without authority and against express orders constituted willful disobedience, a valid ground for dismissal due to loss of trust and confidence, and that due process was observed. The Court of Appeals affirmed the NLRC decision. Lopez elevated the case to the Supreme Court via a petition for review on certiorari, arguing the NLRC appeal was not perfected and that his dismissal was without just cause and due process.

ISSUE

1. Whether the bank’s appeal to the NLRC was perfected.
2. Whether Lopez was dismissed for a just cause (loss of trust and confidence).
3. Whether Lopez was afforded due process.

RULING

1. On the perfection of the appeal: The Supreme Court found the bank’s appeal to the NLRC was perfected. The Court noted that while Lopez claimed the bank failed to comply with certain procedural rules (like filing a notice of appeal together with the memorandum of appeal, supporting it with a certificate of non-forum shopping, and furnishing a certified copy of the appeal bond), the records showed the bank filed its memorandum of appeal and posted a cash bond on the last day of the appeal period. The Court emphasized that rules of procedure should be liberally construed to secure a just determination of every proceeding. The bank’s appeal was filed within the reglementary period and the cash bond was duly posted, constituting substantial compliance.
2. On the just cause for dismissal: The Supreme Court ruled that Lopez was validly dismissed for loss of trust and confidence. The Court found that Lopez, as branch manager, was entrusted with fiduciary duties. The bank had issued a clear directive not to proceed with the Hertz loan application pending explanation of an adverse credit investigation report on Hertz’s James Puyat Concepcion. Despite this, Lopez issued the two POs. His act constituted willful disobedience of a lawful order, which is a form of breach of trust. The Court rejected Lopez’s defense that he had previously issued POs that were honored, as past tolerated violations do not legalize a subsequent breach, especially when a new and direct order had been issued. The bank’s loss of trust and confidence was justified given Lopez’s position and his act of supplanting a management decision with his own.
3. On due process: The Supreme Court held that Lopez was afforded due process. The bank sent him a notice on August 12, 2003, requiring him to explain the issuance of the POs. Lopez submitted his written explanation on the same day. After termination, he was given an opportunity to seek reconsideration during a meeting on September 25, 2003, where he was accompanied by counsel. The Court found the twin requirements of notice and hearing were satisfied. The fact that Lopez submitted his explanation on the same date as the notice did not invalidate the process, as he was able to explain his side. The subsequent meeting provided further opportunity to be heard.
CONCLUSION: The Supreme Court DENIED the petition for lack of merit and AFFIRMED the assailed decision and resolution of the Court of Appeals. Costs were imposed against petitioner Elmer Lopez.