G.R. No. 178762; June 16, 2010
LUZVIMINDA A. ANG, Petitioner, vs. PHILIPPINE NATIONAL BANK, Respondent.

FACTS

Petitioner Luzviminda A. Ang was employed by the government-owned Philippine National Bank (PNB) in 1967, rising to Assistant Department Manager I. Upon PNB’s privatization on May 26, 1996, she was deemed automatically retired, cleared of all accountabilities, and her retirement benefits were computed. She was immediately rehired the next day, May 27, 1996, by the privatized PNB as an Assistant Manager. Less than four months later, PNB administratively charged her with serious misconduct and willful breach of trust for offenses allegedly committed during her prior government service, specifically from 1992 to early 1996. These charges involved a “kiting operation,” unauthorized issuance of certificates of deposit and loan commitments, and violations of office hours.
Ang contended that the charges pertained to her previous tenure as a government employee, over which the Civil Service Commission had jurisdiction, and that her clearance upon retirement precluded subsequent administrative action. PNB dismissed her on July 25, 1997. Ang filed a complaint for illegal dismissal. The Labor Arbiter ruled in her favor, but the NLRC reversed. The Court of Appeals affirmed the NLRC, upholding the dismissal.

ISSUE

Whether Ang was illegally dismissed by the privatized PNB for offenses discovered after her re-employment but committed during her prior government service.

RULING

The Supreme Court upheld Ang’s dismissal but ordered PNB to pay her accrued benefits from her government service up to May 26, 1996. The legal logic is bifurcated, addressing two distinct employment periods. First, for offenses committed during her tenure as a government employee (up to May 26, 1996), the Court ruled that the subsequent discovery of these offenses by the privatized PNB did not bar it from imposing disciplinary action. The clearance and computation of benefits upon her retirement were based on existing records and knowledge at that time; they did not constitute a waiver of the right to discipline her for frauds later discovered. The rehiring did not extinguish liability for past misconduct, as an employer has the right to dismiss an employee for breach of trust, even if the acts were discovered after re-employment.
Second, concerning her employment under the privatized PNB (from May 27, 1996), her dismissal was for just cause—loss of trust and confidence due to serious misconduct. The Labor Code governs this period, and dismissal for a just cause does not entitle her to termination pay or benefits accruing after May 26, 1996. However, all benefits that had fully accrued and were due to her from her government service as of May 26, 1996—having been computed and with no pending administrative case at that precise moment—must be paid, as her record was untarnished at the point of separation from the government-owned corporation.