G.R. No. 181852; October 9, 2013
ERIC V. CHUANICO, Petitioner, vs. LEGACY CONSOLIDATED PLANS, INC., Respondent.

FACTS

Petitioner Eric V. Chuanico was hired as Assistant Vice-President for legal services, serving as in-house counsel for respondent Legacy Consolidated Plans, Inc. and its affiliates. On October 17, 2002, he was directed to explain alleged mishandling of two cases: first, for drafting a purportedly haphazard answer for an affiliate bank under a tight one-day deadline without routing it for review; and second, for failing to prepare a complaint-affidavit for another affiliate bank. Chuanico defended himself, stating he complied with the first task given the time constraint and that the second case was not formally turned over to him. On December 5, 2002, he was dismissed for serious misconduct, willful disobedience, gross neglect, and breach of trust.
The Labor Arbiter and the National Labor Relations Commission (NLRC) ruled in favor of Chuanico, finding his dismissal illegal. They held that the respondent failed to substantiate its charges, as it did not present the alleged haphazard draft answer for evaluation and relied on unproven claims. The NLRC affirmed, noting a lack of evidence that Chuanico willfully violated company rules. However, the Court of Appeals reversed, holding that as an in-house counsel, Chuanico’s alleged mishandling of cases constituted a breach of trust justifying dismissal, and found no grave abuse of discretion in the NLRC’s ruling.

ISSUE

Whether the Court of Appeals erred in holding that the NLRC committed grave abuse of discretion in finding that Legacy Consolidated illegally dismissed Chuanico.

RULING

The Supreme Court granted the petition and reinstated the NLRC’s decision, ruling that Chuanico was illegally dismissed. The legal logic centers on the requirement that dismissal for loss of trust and confidence under Article 282(c) of the Labor Code must be based on a willful breach founded on clearly established facts. The Court emphasized that while an employer enjoys wide latitude in evaluating the performance of a confidential employee like an in-house counsel, the burden of proving just cause for dismissal remains with the employer.
Here, Legacy Consolidated failed to present substantial evidence to prove willful breach. For the first charge, it did not present Chuanico’s draft answer to demonstrate its alleged haphazard quality, nor did it refute his claim of a one-day deadline, which reasonably affected the output. For the second charge, evidence indicated the task was not properly assigned to him. Broad allegations of inefficiency and attitude, unsupported by specific evidence presented during the proceedings, cannot justify dismissal without violating due process. The findings of the Labor Arbiter and NLRC, being supported by evidence and accorded respect on appeal, should not have been disturbed. Consequently, the breach was not proven to be willful, making the dismissal illegal.