NLRC Junked VISA Credit Card Bank Finding Employee’s Breach of Trust and Confidence

The National Labor Relations Commission (NLRC) ruled that there was no basis to justify the alleged loss of trust and confidence of Keppel Monte Bank on Mr. Jerusalem, Head of the Marketing and Operations, and thus, the dismissal was illegal.

            The Supreme Court in a 2011 decision affirms the decision of the Labor Arbiter and the NLRC that Keppel Monte Bank failed to discharge the burden of proving that Mr. Jerusalem’s dismissal is for a just cause, and declare that such dismissal based on the ground of loss of trust and confidence was illegal pursuant to the constitutional guarantee of security of tenure.

Mr. Jerusalem was employed by Keppel Monte Bank on May 25, 1998 as Assistant Vice-President. On June 1, 1998, he was assigned as Head of the newly created VISA Credit Card Department. The bank subsequently re-organized the VISA Credit Card Department and reduced it to a mere unit. On April 5, 1999, carrying the same rank, Mr. Jerusalem was reassigned as Head of the Marketing and Operations of the Jewelry Department.

In or about May 1999, Mr. Jerusalem received from Mr. Javier, Keppel Visa Card Holder since December 1998, a sealed envelope said to be containing VISA Card application forms. Mr. Javier immediately handed over the envelope with accomplished application forms to the VISA Credit Card Unit. All in all, the VISA credit card applications referred by Mr. Javier which Mr. Jerusalem forwarded to the VISA Credit Card Unit numbered 67, all of which were subsequently approved.  As it turned out, all the accounts under these approved applications became past due.

On July 20, 2000, Ms. Gerena, Unit Head of the VISA Credit Card Unit, sent a letter to Mr. Javier asking the latter to assist the bank in the collection of his referred VISA accounts which have already an accumulated principal balance of P6,281,443.90 excluding interest and service fees in the amount of P1,157,490.08. On the same date, Mr. Jerusalem upon knowing the status of the accounts referred by Mr. Javier, sent a Memorandum to Mr. Borromeo, Senior Vice-President, recommending the filing of a criminal case for estafa against Mr. Javier. He further recommended that a coordination with the other banks where Mr. Javier has deposits should be made promptly so that they can ask said banks to freeze Mr. Javier’s accounts. 

            On August 14, 2000, Mr. Jamer, Vice-President of Audit Department, issued a Memorandum in reply to the August 9, 2000 Memorandum of Mr. Jerusalem, advising the latter to coordinate with Mr. Borromeo and not with him.  Furthermore, Mr. Jerusalem was requested not to interfere with the audit process being undertaken by the Audit Department.

On August 18, 2000, Mr. Jerusalem received a Notice to Explain from Keppel’s Vice President for Operations why no disciplinary action should be taken against him for referring/endorsing fictitious VISA card applicants. Mr. Jerusalem pointed out that he had no participation in the processing of the VISA card applications since he was no longer connected with the VISA Credit Card Unit at the time of such transactions. He explained that he can only endorse the applications referred by Mr. Javier to the VISA Credit Card Unit because he was already transferred to Jewelry Department, as Head.

On September 26, 2000, the Manager for Human Resources Department handed to Mr. Jerusalem a Notice of Termination informing the latter that he was found guilty of breach of trust and confidence for knowingly and maliciously referring, endorsing and vouching for VISA card applicants who later turned out to be impostors resulting in financial loss to Keppel.

The Supreme Court however noted with approval the decision of the Labor Arbiter that Keppel was not able to show any concrete proof that indeed Mr. Jerusalem had participated in the approval of the questioned VISA CARD accounts. The records are bereft of any concrete showing that complainant directed Ms. Gerena to approve the applications i.e., “c/o James Jerusalem”, still, such notations can not be construed as a directive coming from Mr. Jerusalem to specifically do away with existing policy on the approval of applications for VISA Card. It was further emphasized that to lay the blame upon Mr. Jerusalem would be at the height of injustice considering that at that time, he no longer has the authority to pass upon such applications. To attribute such huge financial losses to one who is no longer connected with the VISA Card department would be stretching too far, the import of the term “some basis”.  

Likewise, the Supreme Court noted the findings of the NLRC that Mr. Jerusalem had not committed any inimical to the interest of Keppel. The NLRC ruled that the lines having been drawn between the VISA Card Unit and the Jewelry Department, Mr. Jerusalem who is assigned with the latter as Vice-President can not be made responsible for the misdeeds of those in the former. The act of betrayal of trust, if any, must have been committed by the employee in connection with the performance of his function or position. Mr. Jerusalem who has nothing to do with the approval of VISA Cards, should not be made answerable to the imprudence and indiscretion of Ms. Gerena. 

The Supreme Court in a catena of cases ruled that under Article 282 of the Labor, an employer may terminate an employee’s employment for fraud or willful breach of trust reposed in him. But, in order to constitute a just cause for dismissal, the act complained of must be “work-related” such as would show the employee concerned to be unfit to continue working for the employer. Unlike in other cases where the complainant has the burden of proof to discharge its allegations, the burden of establishing facts as bases for an employer’s loss of confidence in an employee – facts which reasonably generate belief by the employer that the employee was connected with some misconduct and the nature of his participation therein is such as to render him unworthy of trust and confidence demanded of his position – is on the employer.”

            While it is true that loss of trust and confidence is one of the just causes for termination, such loss of trust and confidence must, however, have some basis. Proof beyond reasonable doubt is not required. It is sufficient that there must only be some basis for such loss of confidence or that there is reasonable ground to believe, if not to entertain, the moral conviction that the concerned employee is responsible for the misconduct and that the nature of his participation therein rendered him absolutely unworthy of trust and confidence demanded by his position.

            Keppel failed in discharging the burden of proof that the dismissal of Mr. Jerusalem is for a just cause. The first requisite for dismissal on the ground of loss of trust and confidence is that the employee concerned must be holding a position of trust and confidence. In this case, there is no doubt that Mr. Jerusalem held a position of trust and confidence as Assistant Vice-President of the Jewelry Department. The second requisite is that there must be an act that would justify the loss of trust and confidence. Loss of trust and confidence, to be a valid cause for dismissal, 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. Keppel’s evidence against Mr. Jerusalem fails to meet this standard.

Mr. Jerusalem James did nothing wrong when he handed over to Ms. Gerena the envelope containing the applications of persons under the referred accounts of Mr. Javier who were later found to be fictitious. Mr. Jerusalem was no longer connected with the VISA Credit Card Unit when the 67 applications for VISA card were approved. At such time, he was already the Head of the Marketing and Operations of the Jewelry Department. His act therefore of forwarding the already accomplished applications to the VISA Credit Card Unit is proper as he is not in any position to act on them. The processing and verification of the identities of the applicants would have been done by the proper department, which is the VISA Credit Card Unit. Therefore, it is incumbent upon Ms. Gerena as Unit Head to have performed her duties. Keppel had gone too far in blaming James for the shortcomings and imprudence of Ms. Gerena. The invocation of Keppel of the loss of trust and confidence as ground for Mr. Jerusalem’s termination has therefore no basis at all (Jerusalem vs. Keppel Monte Bank, et. al., G.R. No. 169564, April 6, 2011).