G.R. No. 194944 September 18, 2017
PHILIPPINE NATIONAL BANK, Petitioner vs. TERESITA FE A. GREGORIO, Respondent

FACTS

Respondent Teresita Fe A. Gregorio was the Branch Manager of PNB Sucat. In 2003, following a depositor inquiry, PNB’s Internal Audit Group (IAG) investigated the branch’s loan-against-deposit-hold-out transactions. The IAG found that Gregorio allegedly convinced depositors to invest in a non-existent, high-yield PNB product. The scheme involved depositors obtaining loans secured by their deposits, with the proceeds then being loaned to third parties at a 5% monthly interest. The IAG discovered irregularities, including the release of loan proceeds via manager’s checks credited to accounts of persons other than the named borrowers, often without written consent, and payments of a 3% monthly interest to depositors from a dummy account. Based on affidavits from depositors and the IAG report, PNB charged Gregorio with gross dishonesty and misconduct. Gregorio defended herself, presenting a retraction affidavit from one depositor and arguing the transactions were legitimate and known to PNB.
The Labor Arbiter ruled Gregorio was illegally dismissed, a decision reversed by the NLRC, which found the dismissal valid. The Court of Appeals reinstated the Labor Arbiter’s decision, finding the NLRC committed grave abuse of discretion. The CA held that PNB failed to prove Gregorio’s participation in the alleged irregularities by substantial evidence, noting the affidavits of depositors were hearsay and the retraction cast doubt on the charges. PNB elevated the case to the Supreme Court via a petition for review on certiorari.

ISSUE

Whether the Court of Appeals erred in ruling that the NLRC committed grave abuse of discretion in finding that PNB validly dismissed Gregorio for just cause.

RULING

The Supreme Court granted PNB’s petition, reversing the Court of Appeals and reinstating the NLRC decision. The Court held that the NLRC did not commit grave abuse of discretion, as its finding of valid dismissal was supported by substantial evidence. The legal logic centered on the nature of certiorari review and the standard of proof in administrative labor cases. A petition for certiorari under Rule 45 is limited to questions of law; factual findings of quasi-judicial agencies like the NLRC, when supported by substantial evidence, are binding and conclusive. Substantial evidence, which is more than a mere scintilla, was present. The IAG Memorandum, coupled with the sworn affidavits of depositors Benita Rebollo, Maxima Villar (before her retraction), and Virginia Pollard, constituted substantial evidence detailing Gregorio’s orchestration of irregular lending activities. The Court emphasized that the retraction of one affidavit did not automatically nullify the other evidence, and the NLRC was within its discretion to weigh this evidence. As Branch Manager, Gregorio held a position of utmost trust, and her alleged actions constituted willful breach of trust and gross misconduct, a just cause for dismissal under Article 282 of the Labor Code. The NLRC’s conclusion was a permissible evaluation of the evidence, not a whimsical or capricious exercise of judgment amounting to grave abuse of discretion.