TAMPCO v. Duclan (March 16, 2016)
G.R. No. 203005
March 14, 2016
DEL CASTILLO, J.:
Facts:
Petitioner Tabuk Multi-Purpose Cooperative, Inc. (TAMPCO) is a duly registered cooperative
based in Tabuk City, Kalinga. It is engaged in the business of obtaining investments from its
members which are lent out to qualified member-borrowers. The two other petitioners are both
officers of TAMPCO.
On the other hand, respondent Duclan, was employed as TAMPCO cashier. One of her duties as
Cashier was to sign checks for release.
In 2002, TAMPCO introduced Special Investment Loans (SILs) to its members and prospective
borrowers. A year after introducing the SIL program, TAMPCO realized that a considerable
amount of the cooperative's loanable funds was being allocated to SILs, which thus adversely
affected its ability to lend under the regular loan program. It further discovered that single
individual borrowings under the SIL program reached precarious levels, thus placing the
resources of the cooperative at risk. Thus, in June 2003, the TAMPCO BOD issued BA No. 28,
putting a cap on SIL borrowings at P5 million. In October of the same year, BA No. 55 was
issued, completely prohibiting the grant of SILs.
Despite issuance of BA Nos. 28 and 55, respondent and the other officers of the cooperative
including its former General Manager, continued to approve and release SILs to borrowers,
among them Falgui and Kotoken, who received millions of pesos in loans in January and
December of 2004, and in January 2005. Eventually, Falgui claimed insolvency, and Kotoken
failed to pay back her loans.
Upon discovery of the said irregularity, TAMPCO BOD initiated an investigation. Respondent
and the other officers who appeared to be responsible were made to explain. Respondent
admitted to her failure to obey BA Nos. 28 & 55 despite knowledge of the directives. Thus,
TAMPCO BOD suspended them from work and were ordered to collect the amount lost by the
cooperative with a threat that should they fail to collect, they would be dismissed.
Respondent failed to collect the amount she was told to collect and thereafter, after notice, the
cooperative dismissed her service.
Thus, respondent filed a complaint for illegal dismissal.
Issue:
Whether or not respondent was dismissed for a just cause.
Ruling:
The dismissal is proper.
Under Article 282 of the Labor Code, the employer may terminate the services of its employee
for the latter's serious misconduct or willful disobedience of its or its representative's lawful
orders. And for willful disobedience to constitute a ground, it is required that: "(a) the conduct of
the employee must be willful or intentional; and (b) the order the employee violated must have
been reasonable, lawful, made known to the employee, and must pertain to the duties that he had
been engaged to discharge.
In releasing loan proceeds to SIL borrowers like Falgui and Kotoken even after the BOD issued
BA Nos. 28 and 55, respondent, and the other cooperative officers, willfully and repeatedly
defied a necessary, reasonable and lawful directive of the cooperative's BOD, which directive
was made known to them and which they were expected to know and follow as a necessary
consequence of their respective positions in the cooperative. They placed the resources of the
cooperative - the hard-earned savings of its members - in a precarious state as a result of the
inability to collect the loans owing to the borrowers' insolvency or refusal to honor their
obligations, Respondent committed gross insubordination which resulted in massive financial
losses to the cooperative. Applying Article 282, her dismissal is only proper.
In termination proceedings of employees, procedural due process consists of the twin
requirements of notice and hearing. In this case, due process was properly observed since
respondent was given a chance to explain and was informed of the decision after a thorough
investigation.
Respondent cannot question the TAMPCO BOD’s decision as regards the General Manager,
whom the BOD permitted to retire and collect his benefits in full, for such decision is
management’s prerogative on which the courts cannot interfere unless they violate labor laws,
CBA and general principles of fairness & justice.
