GR 214230 Security Banks Savings Corporation vs. Charles Singson

G.R. No.
214230, February 10, 2016

SECURITY BANK SAVINGS CORPORATION (formerly PREMIERE DEVELOPMENT BANK)/HERMINIO M.
FAMATIGAN, JR., Petitioners, vs. CHARLES M. SINGSON, Respondent.
PERLAS-BERNABE, J.
FACTS:
Respondent was initially employed by petitioner SBSC as messenger on November 25, 1985. He was
promoted several times until he was appointed in June 2007 as Acting Branch Manager. On March 26,
2008, he was assigned to its Quezon Avenue Branch under the supervision of Branch Manager Corazon
Pinero (Pinero) and held the position of Customer Service Operations Head (CSOH) tasked with the
safekeeping of its checkbooks and other bank forms. On July 22, 2008, respondent received a show-
cause charging him of violating the bank's Code of Conduct when he mishandled various checkbooks
under his custody. At the scheduled conference before the Investigating Committee, respondent readily
admitted having allowed the Branch Manager (i.e., Pinero) to bring out of the bank's premises the
missing checkbooks and other bank forms on the justification that the latter was a senior officer with
lengthy tenure and good reputation. Pending investigation, respondent was transferred to SBSC's
Pedro Gil Branch. He was again issued a memorandum directing him to explain his inaccurate reporting
of some Returned Checks and Other Cash Items (RCOCI) which amounted to P46,279.33. Dismayed by
his frequent transfer to different branches, respondent tendered his resignation on November 10,
2008, effective thirty (30) days from submission. However, SBSC rejected the same in view of its
decision to terminate his employment on November 11, 2008 on the ground of habitual neglect of
duties.
Respondent instituted a complaint for illegal dismissal with prayer for backwages, damages, and
attorney's fees against petitioners before the NLRC. The Labor Arbiter (LA) dismissed the complaint
and accordingly, declared respondent to have been terminated from employment for a valid cause.
The NLRC affirmed the LA decision, ruling that the grant of separation pay was justified on equitable
grounds such as respondent's length of service, and that the cause of his dismissal was not due to
gross misconduct or that reflecting on his moral character but rather, a weakness of disposition and
grievous error in judgment. The CA denied the petition and sustained the award of separation pay.
ISSUE:
Whether or not the CA erred in upholding the award of separation pay as financial assistance to
respondent despite having been validly dismissed
HELD:
Separation pay is warranted when the cause for termination is not attributable to the employee's fault,
such as those provided in Articles 298 and 299 of the Labor Code, as well as in cases of illegal
dismissal where reinstatement is no longer feasible. On the other hand, an employee dismissed for any
of the just causes enumerated under Article 297 of the same Code, being causes attributable to the
employee's fault, is not, as a general rule, entitled to separation pay. The non-grant of such right to
separation pay is premised on the reason that an erring employee should not benefit from their
wrongful acts. As an exception, case law instructs that in certain circumstances, the grant of
separation pay or financial assistance to a legally dismissed employee has been allowed as a measure
of social justice or on grounds of equity.
The Court ruled that separation pay shall be allowed as a measure of social justice only in those
instances where the employee is validly dismissed for causes other than serious misconduct or those
reflecting on his moral character. To reiterate the ruling in Toyota, labor adjudicatory officials and the
CA must demur the award of separation pay based on social justice when an employee's dismissal is
based on serious misconduct or willful disobedience; gross and habitual neglect of duty; fraud or willful
breach of trust; or commission of a crime against the person of the employer or his immediate family -
grounds under Article 282 of the Labor Code that sanction dismissals of employees. In the case at bar,
respondent's established act of repeatedly allowing Branch Manager Pinero to bring the checkbooks
and bank forms outside of the bank's premises in violation of the company's rules and regulations had
already been declared by the LA to be gross and habitual neglect of duty under Article 282 of the
Labor Code, which finding was not contested on appeal by respondent. The banking business is highly
sensitive with a fiduciary duty towards its client and the public in general, such that central measures
must be strictly observed. It is undisputed that respondent failed to perform his duties diligently, and
therefore, not only violated established company policy but also put the bank's credibility and business
at risk. Hence, under these circumstances, the award of separation pay based on social justice would
be improper.
WHEREFORE, the petition is GRANTED. The Decision dated May 21, 2014 of the Court of Appeals in CA-
G.R. SP No. 121053 is hereby REVERSED and SET ASIDE deleting the award of separation pay in favor
of Charles M. Singson.

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G.R. No.

214230, February 10, 2016

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