G.R. No. L-48346; August 9, 1949
DESTILERIA AYALA Y CIA., INC., petitioner, vs. LIGA NACIONAL OBRERA DE FILIPINAS and THE COURT OF INDUSTRIAL RELATIONS, respondents.

FACTS

Petitioner Destileria Ayala y Compania, Inc. sought authority from the Court of Industrial Relations (CIR) to dismiss its cashier, Francisco Serrano, for alleged negligence related to an embezzlement committed by a bill collector. At the time, a wage dispute involving Serrano and other employees, represented by respondent labor union, was pending before the CIR. After a hearing, the CIR found Serrano “absolutely free from blame” and innocent of the charges. It attributed the proposed dismissal to the company’s desire to get rid of Serrano due to his union activities in the wage movement. The company challenged this order.

ISSUE

Whether an employer can dismiss an employee, in a position of trust, solely on the ground of loss of confidence when the employee has been found innocent of any misconduct or negligence.

RULING

No. The Supreme Court affirmed the CIR’s order. The Court upheld the CIR’s factual finding that Serrano was innocent and not negligent. Mere loss of confidence, absent any conduct by the employee indicating hostility to the employer’s interests or any actual misconduct, is insufficient to justify dismissal. To allow dismissal of an innocent employee with an untarnished record, simply for engaging in legitimate union activities, would discourage such activities and frustrate the purpose of labor laws. The petition for review was dismissed.

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