ERIC ALVAREZ, substituted by ELIZABETH ALVAREZ-CASAREJOS

vs.

GOLDEN TRI BLOC, INC. and ENRIQUE LEE

G.R. No. 202158, September 25, 2013

REYES, J.:

The Facts

GOLDEN TRI BLOC, INC. operates Dunkin Donuts franchise stores. Sometime in November 1996,
GTBI hired ERIC ALVAREZ as a Service Crew. Six (6) months later, he attained the status of a regular
employee. He was thereafter promoted as Shift Leader and served as such for four (4) years. In 2001, he
was again promoted as Outlet Supervisor and was assigned to three (3) Dunkin Donuts outlets located at
San Roque, Cogeo and Super 8, Masinag, all in Antipolo City.

On May 27, 2009, the petitioner reported for duty at around 12:30 in the afternoon at Dunkin
Donuts, Super 8, Masinag branch. Since his timecard was at the San Roque branch, he telephoned the
shift leader and requested her to "punch-in" his time card to reflect that he is already on duty. She
obliged. The petitioner’s senior officer called the Super 8, Masinag branch and verified that he has
indeed reported for work.

The following day, however, the petitioner was informed by his senior officer that both of them
are suspended and that he had to prepare an incident report regarding his time card. Alvarez admitted
the allegations, owned up to his fault, apologized and promised that a similar incident will not happen
again. Thereafter, a dialogue was conducted, after which the petitioner was placed on preventive
suspension for 30 days without pay.

On June 23, 2009, GTBI notified the petitioner of its decision to terminate his employment on
the ground of loss of trust.

The petitioner filed thus filed before the Labor Arbiter (LA) a complaint for illegal dismissal with
claims for sick leave pay, separation pay and moral and exemplary damages.

Alvarez averred that in his 12 years of service with the company, he was never subjected to any
disciplinary action. He argued that the ground relied upon for his termination is not applicable to him
because he is a supervisor and not a managerial employee. He is not entrusted with the company’s
money or property and that his duties pertained to the preparation and submission of daily and monthly
reports and organization of manpower schedules. Even assuming that the ground applies to him, it still
does not validate his termination because the alleged offense is not related to his work duties. He
asserted that he did not lie to or defraud GTBI because he was, in truth, already on duty as verified by his
senior officer. He contended that dismissal is not commensurate with the offense he committed
considering his lengthy and satisfactory service with the company as shown in his several rank
promotions.

GTBI maintained that it had justifiable reason to lose trust in and dismiss the petitioner for
having committed a dishonest act punishable under the company’s Code of Conduct and Discipline with
termination from employment. It further claimed that the dismissal was attended with the requisite
procedural due process. His monetary claims were debunked for lack of factual basis in as much as he is
also not entitled to moral and exemplary damages since his dismissal was valid and that it was carried
out without bad faith and fraud, nor was it attended with act oppressive to labor or contrary to morals,
good customs or public policy.

The Labor Arbiter found the petitioner to have been illegally dismissed.

GTBI appealed to the National Labor Relations Commission (NLRC), arguing that an employee's dismissal
was justified due to a history of infractions. These included multiple instances of tardiness, product
shortages, negligence disrupting business, and dishonesty involving timecard fraud. The employee had
received various forms of disciplinary action over the years, ranging from counseling to suspension,
culminating in dismissal after a repeat offense of dishonesty.

The NLRC denied the appeal and held that the petitioner’s act of requesting his subordinate to
"punch-in" his timecard does not fall within the ambit of serious misconduct because it was not willful in
character.

On motion for reconsideration, the NLRC reversed its initial ruling and gave credence to records
of the petitioner’s previous infractions and based thereon, found his dismissal valid. The NLRC applied
the "totality rule" which states that: "the totality of infractions or number of violations committed during
the period of employment shall be considered in determining the penalty to be imposed on the erring
employee. The offenses committed by him should not be taken singly and separately but in their totality.
Fitness for continued employment cannot be compartmentalized into tight little cubicles of aspects of
character, conduct and ability separate and independent of each other."

The petitioner elevated the case to the CA in a special civil action for certiorari under Rule 65.
The CA upheld the NLRC’s conclusions.

The petitioner moved for reconsideration, but his motion was denied.

Issue: Whether the dismissal of Alvarez is legal.

The Court’s Ruling

Loss of trust and confidence will validate an employee’s dismissal only upon compliance with
certain requirements, namely: (1) the employee concerned must be holding a position of trust and
confidence; and (2) there must be an act that would justify the loss of trust and confidence.

There are two classes of positions of trust. First, are the managerial employees whose primary
duty consists of the management of the establishment in which they are employed or of a department
or a subdivision thereof, and to other officers or members of the managerial staff. The second class
consists of the fiduciary rank-and-file employees, such as cashiers, auditors, property custodians, or
those who, in the normal exercise of their functions, regularly handle significant amounts of money or
property. These employees, though rank-and-file, are routinely charged with the care and custody of the
employer’s money or property, and are thus classified as occupying positions of trust and confidence.

It is undisputed that at the time of his dismissal, the petitioner was holding supervisory position
after having risen from the ranks since the start of his employment. His position is unmistakably one
imbued with trust and confidence as he is charged with the delicate task of overseeing the operations
and manpower of three stores owned by GTBI. As a supervisor, a high degree of honesty and
responsibility, as compared with ordinary rank-and-file employees, was required and expected of him.
The fact that he was not charged with the custody of the company’s money or property is in
consequential because he belongs to the first class of employees occupying position of trust and not to
the fiduciary rank and file class.

The second requirement for dismissal due to loss of trust and confidence is further qualified by
jurisprudence. The complained act must be work related such as would show the employee concerned
to be unfit to continue working for the employer and it must be based on a willful breach of trust and
founded on clearly established facts. The basis for the dismissal must be clearly and convincingly
established but proof beyond reasonable doubt is not necessary.

The analogous factual findings of the CA and the NLRC conform to the foregoing guidelines . The
punching of time card is undoubtedly work related. It signifies and records the commencement of one’s
work for the day. It is from that moment that an employee dons the cape of duties and responsibilities
attached to his position in the workplace. It is the reckoning point of the employer’s corresponding
obligation to him – to pay his salary and provide his occupational and welfare protection or benefits. Any
form of dishonesty with respect to time cards is thus no trivial matter especially when it is carried out by
a supervisory employee like the petitioner.
 The transgression imputed to the petitioner was likewise attended with willfulness. It must be
noted that the petitioner misled the labor tribunals in claiming that during his entire 12-year stint with
GTBI, he was never meted with any disciplinary action. Records, however, disprove such claim. The said
evidence shows at least three (3) different offenses – ranging from tardiness, negligence in preparing
inventory to dishonesty relating to his timecard – repeatedly committed by the petitioner over the years
and for which he has been constantly disciplined. On July 4, 2003, the petitioner was found guilty of
asking an employee to punch-in his time card for him. He was suspended for 45 days with a warning that
a recurrence of the same act will merit dismissal from service.36 He, however, disregarded this incident
and the corrective intention of disciplinary action taken on him when he repeated the same act on May
27, 2009.

A repetition of the same offense for which one has been previously disciplined and cautioned
evinces deliberateness and willful intent; it negates mere lapse or error in judgment. While it may be
assumed that the petitioner has become stubborn or has forgotten the 2003 episode, it should not work
to his advantage, because either cause demonstrates his in difference to GTBI’s policies on employees’
conduct and discipline. Based on this consideration, taken together with his numerous other offenses,
GTBI had compelling reasons to conclude that the petitioner has become unfit to remain in its employ.

Citing its decision in the case of Merin v. MRC, Court discussed that in determining the sanction
imposable to an employee, the employer may consider and weight his other past infractions, thus:

The totality of infractions or the number of violations committed during the period of
employment shall be considered in determining the penalty to be imposed upon an erring
employee. The offenses committed by petitioner should not be taken singly and separately.
Fitness for continued employment cannot be compartmentalized into tight little cubicles of
aspects of character, conduct and ability separate and independent of each other. While it may
be true that petitioner was penalized for his previous infractions, this does not and should not
mean that his employment record would be wiped clean of his infractions. After all, the record
of an employee is a relevant consideration in determining the penalty that should be meted out
since an employee's past misconduct and present behavior must be taken together in
determining the proper imposable penalty. Despite the sanctions imposed upon petitioner, he
continued to commit misconduct and exhibit undesirable behavior onboard. Indeed, the
employer cannot be compelled to retain a misbehaving employee, or one who is guilty of acts
inimical to its interests. It has the right to dismiss such an employee if only as a measure of self-
protection.

The NLRC and the CA were thus correct in applying the totality of infractions rule and in adjudging that
the petitioner's dismissal was grounded on a just and valid cause.