G.R. No. 228449 . December 06, 2017.
GRACE R. ALUAG, PETITIONER, V. BIR MULTI-PURPOSE COOPERATIVE, NORMA L. LIPANA, AND ESTELITA V. DATU, RESPONDENTS.

FACTS

Petitioner Grace R. Aluag was employed as a cashier by respondent BIR Multi-Purpose Cooperative (BIRMPC). In June 2013, BIRMPC discovered irregularities in its loan operations. Aluag was directed to explain her involvement, particularly concerning the acceptance and handling of post-dated checks from members. In her written explanation, she admitted she held matured checks upon debtors’ requests, with the knowledge of the then-General Manager, and that she submitted a report on bounced checks as instructed. After a preventive suspension and investigation, BIRMPC terminated Aluag’s employment on October 31, 2013, on the ground of loss of trust and confidence. She was accused of accepting accommodation checks, failing to deposit checks on their due dates, not reporting checks with insufficient funds, and failing to act on returned checks.
Aluag filed a complaint for illegal dismissal. The Labor Arbiter ruled the dismissal was valid, finding she held a position of trust and her acts caused financial damage. The National Labor Relations Commission (NLRC) reversed this, finding the alleged infractions were not part of her core, ministerial duties as cashier and that she acted with the manager’s knowledge. The Court of Appeals reinstated the Labor Arbiter’s decision, upholding the dismissal based on loss of trust and confidence.

ISSUE

Whether the Court of Appeals erred in finding that petitioner Grace R. Aluag was validly dismissed on the ground of loss of trust and confidence.

RULING

The Supreme Court granted the petition and reversed the Court of Appeals, thereby reinstating the NLRC’s finding of illegal dismissal. The legal logic centers on the requisites for a valid dismissal based on loss of trust and confidence. For an employee like Aluag, who is classified as a rank-and-file employee, loss of trust must be based on willful breach of trust founded on clearly established facts. The breach must be related to the performance of her duties, and the employer must prove the act justifying the loss of confidence.
The Court found BIRMPC failed to meet this burden. First, Aluag’s primary duty was to receive and record payments, not to exercise discretion over loan approvals or the validity of checks, which were handled by loan processors and the manager. Her act of safekeeping checks upon debtor requests, done with the manager’s knowledge, was not a willful breach but an act of accommodation under supervision. Second, the duty to deposit checks was not explicitly assigned to her as a cashier; her role was custodial. Third, she did report bounced checks when requested. The infractions cited were not deliberate violations of her specific duties but involved acts where she lacked independent authority. Consequently, there was no substantial evidence of a deliberate act or willful breach that would justify a loss of trust and confidence. Her dismissal was therefore illegal.