ASIA PACIFIC CHARTERING (PHILS.) INC. VS MARIA LINDA R. FAROLAN

ASIA PACIFIC CHARTERING (PHILS.) INC.

VS

MARIA LINDA R. FAROLAN
393 SCRA 454 (2002)

The termination of a managerial employee on the ground of “loss of confidence” should have a basis and the determination of the same cannot be left entirely to the employer.

Petitioner Asia Pacific Chartering (Phils.) Inc. (Asia) is tasked with the selling of passenger and cargo spaces for Scandinavian Airlines System. Petitioner Asia, through its Vice President Catalino Bondoc (Bondoc), offered Respondent Maria Linda R. Farolan (Farolan) the sales manager position to which Farolan accepted.

Upon Vice President Bondoc’s request, Farolan submitted a detailed report attributing the drop of sales revenue to market forces beyond her control. Consequently, Asia directed Roberto Zozobrado (Zozobrado) to implement solutions. Zozobrado informally took over Farolan’s marketing and sales responsibilities but she continued to receive her salary. Asia claims that the increase in sales revenue was due to Zozobrado’s management.
Asia then sent a letter of termination to Farolan on the ground of ―loss of confidence‖, forcing Farolan to file a complaint for illegal dismissal. The Labor Arbiter found that the dismissal was illegal for lack of just cause, however, such decision was reversed by the National Labor Relations Commission (NLRC) stating that the termination of employment due to loss of confidence is within management prerogative. On appeal, the Court of Appeals upheld the labor arbiter’s decision. Hence, the filing of this petition.

ISSUE:
Whether or not Respondent Farolan’s dismissal was illegal

HELD:
A statement of the requisites for a valid dismissal of an employee is thus in order, to wit: (a) the employee must be afforded due process, i.e., he must be given opportunity to be heard and to defend himself; and (b) dismissal must be for a valid cause. The manner by which Respondent Farolan was dismissed violated the basic precepts of fairness and due process – Respondent Farolan was dismissed, without being afforded the opportunity to be heard and to present evidence in her defense. She was never given a written notice stating the particular acts or omission constituting the grounds for her dismissal as required by law.

With respect to rank and file personnel, loss of trust and confidence as ground for valid dismissal requires proof of involvement in the alleged events in question and that mere uncorroborated assertions and accusations by the employer will not be sufficient. But as regards a managerial employee, mere existence of a basis for believing that such employee has breached the trust of his employer would suffice for his dismissal. Loss of trust and confidence to be a valid ground for an employee’s dismissal must be based on a willful breach and founded on clearly established facts. A breach is willful if it is done intentionally, knowingly and purposely, without justifiable excuse.

It is not disputed that Farolan’s job description, and the terms and conditions of her employment, with the exception of her salary and allowances, were never reduced to writing. Even assuming, however, that Farolan was a managerial employee, the stated ground (in the letter of termination) for her dismissal, ―loss of confidence,‖ should have a basis and determination thereof cannot be left entirely to the employer.