Garcia v. NLRC

G.R. No. 119527 (July 3, 1996)

Evelyn Garcia's dismissal upheld, but indemnity reduced to P1,000 for due process violation.

Facts:

Petitioner Evelyn J. Garcia served as the school cashier for Holy Trinity Academy from June 1974 until her dismissal on October 5, 1993. Her termination stemmed from allegations of loss of confidence, gross negligence, gross inefficiency, and dishonesty. The immediate cause of her dismissal was a discrepancy involving a deposit made on June 15, 1993, where P50,000.00 was reported missing. The school administration attributed this loss solely to her, relying on reports from the National Bureau of Investigation and the Diaz Murillo Dalupan Auditing Firm.

In addition to the June 15 incident, the school cited several irregularities in Garcia's handling of school funds, including delays in deposits, lack of control over official receipts, and shortages in collections from the school canteen. Prior to her dismissal, Garcia was suspended for a total of 90 days. Following her termination, she filed a complaint for illegal dismissal, nonpayment of overtime pay, and damages. The Labor Arbiter ruled in her favor, ordering the school to pay her P45,500.00 as separation pay, concluding that her dismissal lacked a valid cause and that she was denied due process.

Both parties appealed to the National Labor Relations Commission (NLRC), which reversed the Labor Arbiter's decision, finding that Garcia was validly dismissed for gross negligence and loss of trust. However, the NLRC also ordered the school to indemnify Garcia P10,000.00 for failing to observe due process. Garcia's subsequent motion for reconsideration was denied.

Legal Issues:

  1. Was the dismissal of Evelyn J. Garcia valid based on the grounds of gross negligence and loss of trust?
  2. Did the school comply with the due process requirements prior to Garcia's termination?

Arguments:

  • Petitioner (Garcia): Garcia argued that her dismissal was excessively harsh for a single mistake and that the June 15 incident was the sole basis for her termination. She contended that the penalty was disproportionate to the alleged infraction and emphasized that she was not given a fair opportunity to defend herself against the charges.

  • Respondents (Holy Trinity Academy and others): The school maintained that Garcia's dismissal was justified due to a pattern of dishonesty and negligence that undermined the trust necessary for her position as cashier. They argued that the findings from the audit and fact-finding committee supported their decision to terminate her employment.

Court's Decision and Legal Reasoning:

The Supreme Court affirmed the NLRC's decision, agreeing that Garcia's dismissal was valid due to the loss of trust and confidence, which is a recognized ground for termination, especially in positions involving financial responsibilities. The Court noted that the nature of Garcia's role as a cashier required absolute trust and honesty, and her actions had indeed raised significant concerns regarding her integrity.

However, the Court also found that due process was not observed in the termination process. Although the school had valid grounds for dismissal, the investigation conducted by the auditing firm and the fact-finding committee did not allow Garcia to present her side, violating her right to due process. The Court emphasized that even with valid grounds for dismissal, the employer must still adhere to procedural fairness.

In light of these findings, the Court modified the indemnity awarded to Garcia, reducing it from P10,000.00 to P1,000.00, aligning with its established policy on similar cases.

Significant Legal Principles Established:

  1. Loss of Trust as a Ground for Dismissal: The Court reaffirmed that loss of trust and confidence is a valid ground for termination, particularly in positions that handle money and require a high degree of integrity.

  2. Due Process in Termination: The ruling underscored the necessity of due process in employment termination, highlighting that employees must be given an opportunity to defend themselves against charges that could lead to dismissal, regardless of the validity of the grounds for termination.