GENUINO VS.

NLRC

Facts:

Genuino was employed by Citibank in January 1992 as Treasury Sales Division Head with
the rank of Assistant Vice- President. On August 23, 1993, Citibank sent Genuino a letter charging
her with “knowledge and involvement” in transactions “which were irregular or event fraudulent.” In the
same letter, Genuino was informed she was under preventive suspension. On September 27, 1993,
Citibank informed Genuino of the result of their investigation. It found that Genuino, together with
Santos personally and actively participated through the use of “facilities of Genuino’s family
corporation, Global Pacific” in the diversion of bank client’s funds to products of other companies that
yielded higher interests than Citibank offers. And that Genuino and Santos realized substantial
financial gains, all in violation of existing company policy and Corporation Code under which carries
penal sanction. In view of the foregoing circumstances, Genuino’s employment was terminated by
Citibank on grounds of (1) serious misconduct, (2) wilful breach of the trust reposed upon her by the
bank, and (3) commission of a crime against the bank.

Genuino filed before the Labor Arbiter a Complaint against Citibank for illegal suspension and
illegal dismissal with damages and prayer for temporary restraining order and/or writ of preliminary
injunction. The Labor Arbiter rendered a Decision finding the dismissal of Genuino to be without just
cause. The NLRC reversed the decision of the Labor Arbiter. The Court of Appeals then promulgated
its decision denying due course to and dismissing the petitions.

Issue: Whether or not the dismissal of Genuino is for a just cause and in accordance with due
process.

Held: The dismissal was for a just cause but lacked due process.

The requirements of twin notices must be met. The two-notice requirement of the Labor Code is an
essential part of the due process. The first notice informing the employee of the charges should
neither be pro-forma nor vague. It should set out clearly what the employee is being held liable for.
The employee should be afforded ample opportunity to be heard and not mere opportunity. Ample
opportunity to be heard is especially accorded the employees sought to be dismissed after they are
specifically informed of the charges in order to give them an opportunity to refute such accusations
leveled against them. Since the notice of charges given to Genuino is inadequate, the dismissal could
not be in accordance with due process. While the Court held that Citibank failed to observe
procedural due process, it never the less found Genuino’s dismissal justified.

While the bank gave genuine an opportunity to deny the truth of the allegations in writing and
participate in the administrative investigation, the fact remains that the charges were too general to
enable Genuino to intelligently and adequately prepare her defense.

Article 282(c) of the Labor Code provides that an employer may terminate an employment for fraud or
willful breach of the trust reposed in him/her employer or duly authorized representative. In order to
constitute as just cause for dismissal, loss of confidence should relate to acts inimical to interests of
the employer. Also, the act complained of should have arisen from the performance of the employee’s
duties. For loss of trust and confidence to be a valid ground for an employee’s dismissal, it must be
substantial and not arbitrary, and must be founded on clearly established facts sufficient to warrant
the employee’s separation from work. As Assistant Vice-President of Citibank’s Treasury Department,
Genuino was tasked to solicit investments, and peso and dollar deposits for, and keep them in
Citibank; and to sell and push for the sale of Citibank’s financial products, such as MBS, for the
account and benefit of Citibank. She held the position of trust and confidence. There is no way she
could deny any knowledge of the Bank’s policies nor her understanding of these policies as reflected
in the survey done by the bank. She could not likewise feign ignorance of the businesses of Citibank,
and of Global and Torrance. Assuming that Citibank did not engage in the same securities dealt with
by Global and Torrance; nevertheless, it is to the interests of Citibank to retain its clients and continue
investing in Citibank. Curiously, Genuino did not just dissuade the depositors from withdrawing their
money from Citibank but was even instrumental in the transfers of moneys from Citibank to a
competing bank through Global and Torrance, the corporations being controlled by her.

Ordinarily, the employer is required to reinstate the employee during the pendency of the appeal
pursuant to Art.223, par. 3 of the Labor Code. If the decision of the Labor Arbiter is later reversed on
appeal upon the finding that the ground for dismissal is valid then the employer has the right to require
the dismissed employee on payroll reinstatement to refund the salaries received while the case was
pending appeal, or it can be deducted from the accrued benefits that the dismissed employee was
entitled to receive from his employer under existing laws, collective bargaining agreement provisions,
and company practices. However, if the employee was reinstated to work during the pendency of the
appeal, then the employee is entitled to the compensation received for actual services rendered
without the need of refund.

Considering that Genuino was not reinstated to work or placed on payroll reinstatement, and her
dismissal is based on a just cause, then she is not entitled to be paid the salaries stated in item no. 3
of the fallo of the September 3, 1994 NLRC decision.

AGABON vs. NLRC, November 17, 2004

By Atty. Golda Benjamin

Facts:
® Virgilio and Jenny Agabon were cornice installers of Riviera Home Improvements, a company engaged in the
business of selling ornamental construction materials.

® They were employed from January 2, 1992 until February 23, 1999, when they were dismissed for
abandonment of work.

® The Agabons filed a complaint for illegal dismissal before the LA, who ruled in their favor. The NLRC
reversed on appeal. The CA sustained the NLRC’s decision

® The Agabons further appealed to the SC, disputing the finding of abandonment, and claiming that the
company did not comply with the twin requirements of notice and hearing.

Issue: WON the Agabons were illegally dismissed

Held: NO

Ratio:
® Substantive due process (EEs must be dismissed for just or authorized cause): SC upheld the finding of
abandonment, because the act of the Agabons in seeking employment elsewhere clearly showed a deliberate
intent to sever the ER-EE relationship.

® Procedural due process (for just cause, there must be a written notice informing him of grounds for
termination, a hearing or opportunity to be heard, and a final notice of termination stating the grounds therefor):
There was no due process because ER did not send the requisite notices to the last known address of the EEs.
ER only gave a flimsy excuse that the notice would be useless because the EEs no longer lived there. This is not
a valid excuse, they should have still sent a notice as mandated by law.

® For not sending the requisite notices, the ER should be held liable for non-compliance with the procedural
requirements of due process.

Juanito Garcia and Alberto Dumago v. Philippine Airlines (PAL)

G.R. No. 164856, January 20, 2009

Facts: Philippine Airlines filed a case against its employees –herein petitioners for allegedly caught in the act
of sniffing shabu when a team of company security personnel and law enforcers raided the PAL Technical
Center’s Toolroom Section.

After due notice, PAL dismissed petitioner for transgressing company’s Code of Discipline prompting
them to file a Complaint for illegal dismissal which the Labor Arbiter (LA) in its decision ruled on their favor
ordering PAL to immediately comply with the reinstatement aspect of the decision. Prior to the judgment, SEC
placed PAL under Interim Rehabilitation Receiver who subsequently replaced by Permanent Rehabilitation
Receiver. On appeal, NLRC reversed said decision and dismissed petitioner’s complaint for lack of merit.

Subsequently, LA issued a Writ of Execution respecting the reinstatement aspect of his decision.
Respondent filed an Urgent Petition for Injunction with the NLRC. The NLRC affirmed the validity of the Writ
and the Notice issued by LA but suspended and referred the action to the Rehabilitation Receiver for
appropriate action.

On appeal, the appellate court partially granted the petition and effectively reinstated the NLRC
resolution insofar as it suspended the proceedings. By manifestation, respondent informed the Court that SEC
issued an Order granting its request to exit from rehabilitation proceedings.

Issue: Whether petitioner may collect their wages during the period between the LA’s Order of
reinstatement pending appeal and the NLRC decision overturning that of the LA, now that PAL has exited from
rehabilitation proceedings.

Ruling: A dismissed employee whose case was favorably decided by the LA is entitled to receive wages
pending appeal upon reinstatement, which is immediately executory. Unless there is a restraining order, it is
ministerial upon the LA to implement the order of reinstatement and it is mandatory on the employer to
comply therewith.

The Court reaffirms the prevailing principle that even if the order of reinstatement of the LA is
reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the wages of the
dismissed employee during the period of appeal until reversal by the higher court. It settles the view that the
LA’s order of reinstatement is immediately executory and the employer has to either re-admit them to work
under the same terms and conditions prevailing prior to their dismissal, or to reinstate them in the payroll, and
that filing to exercise the options in the alternative, employer must pay the employee’s salaries.

When reinstatement pending appeal aims to avert the continuing threat or danger to the survival or
even the life of the dismissed employee and his family, it does not contemplate the period when the
employer-corporation itself is similarly in a judicially monitored state of being resuscitated in order to survive.