SAN JUAN v. REGUS SERVICE CENTRE PHILIPPINES B.V. [G.R. No. 246531, October 4, 2023]

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SAN JUAN v. REGUS SERVICE CENTRE PHILIPPINES B.V.

[G.R. No. 246531, October 4, 2023]

SECOND DIVISION, KHO, JR., J.

 

Loss of Trust and Confidence; Managerial Employees; Quantum of Proof; Serious Misconduct; Conduct During Company-Sponsored Activities; Preventive Suspension; Company Investigations; Grave Abuse of Discretion; Rule 45 Review of Rule 65 Proceedings

 

Dismissal on the ground of loss of trust and confidence requires the concurrence of two conditions: the employee must hold a position of trust and confidence, and there must be an act that would justify the loss of that trust. As to managerial employees, the quantum of proof is relaxed — proof beyond reasonable doubt is not required, and it suffices that the employer has some basis or reasonable ground to believe that the employee is responsible for the imputed misconduct, for the mere existence of a basis for believing that the employee has breached the trust of the employer would suffice for dismissal. Correlatively, in a petition for review on certiorari assailing a decision of the Court of Appeals rendered in a certiorari proceeding from the National Labor Relations Commission, the Court's inquiry is confined to whether the appellate court correctly determined the presence or absence of grave abuse of discretion on the part of the Commission — that is, whether its findings were supported by substantial evidence — and does not extend to a re-evaluation of the evidence itself.

 

Petitioner Benedict Princer San Juan was employed by respondent Regus Service Centre Philippines B.V. as Network Operations Manager, heading the Manila IT Networks Team — a managerial position imbued with trust and confidence. 

During a company team-building activity held at the Executive Wellspring Resort in Pansol, Laguna from June 12 to 14, 2014, an incident occurred between San Juan and his subordinate, Ruben Cruz. Cruz alleged that San Juan, while heavily intoxicated, entered the room where Cruz and several female employees were sleeping, inserted his hands into Cruz's shorts and unzipped them, attempted to kiss him, and briefly attempted to strangle him. San Juan denied the accusation, claiming instead that Cruz had been sleepwalking and that it was Cruz who had molested him. 

Regus conducted an investigation and placed both men under preventive suspension from July 14 to 25, 2014. It issued a first Notice to Explain on July 30, 2014 and a second notice on August 14, 2014. During this period San Juan was alleged to have continued contacting Cruz despite instructions to the contrary, called meetings with team members to influence their accounts of the incident, and falsely claimed to have obtained access to the witnesses' statements or recordings — conduct characterized as an attempt to intimidate witnesses and obstruct the investigation. 

On August 20, 2014, Regus terminated San Juan's employment for “indecent and scandalous behavior” and “willful breach of trust.” San Juan filed a complaint for illegal dismissal with claims for reinstatement, backwages, overtime pay, leave benefits, night shift differential, and 13th month pay. 

The Labor Arbiter dismissed the complaint, finding that San Juan's managerial position, his disruptive conduct during the team-building activity, and his subsequent attempts to influence witnesses justified the employer's loss of trust; it nonetheless awarded PHP 76,384.00 as proportionate 13th month pay. The NLRC reversed, holding that Regus failed to prove that San Juan's position was one of trust of the highest degree and that dismissal was disproportionate, awarding PHP 470,304.00 as separation pay plus 10% attorney's fees. The Court of Appeals, on certiorari, found that the NLRC had gravely abused its discretion, set aside its rulings, and reinstated the Labor Arbiter's Decision. San Juan elevated the case to the Supreme Court.

 

 

Whether the Court of Appeals erred in ruling that the NLRC committed grave abuse of discretion in reversing the Labor Arbiter.

NO. The Court reiterated that its review under Rule 45 of a decision of the Court of Appeals rendered in a Rule 65 proceeding is confined to determining whether the appellate court correctly ruled on the presence or absence of grave abuse of discretion in the NLRC decision, and does not require a re-examination of the probative value of the evidence. Grave abuse of discretion connotes judgment exercised in a capricious and whimsical manner tantamount to lack of jurisdiction, and in labor cases may be ascribed to the NLRC when its findings and conclusions are not supported by substantial evidence. 

Applying that standard, the Court found that the Court of Appeals correctly determined that the NLRC's conclusions — that Regus failed to prove San Juan held a position of trust and that dismissal was a disproportionate penalty — were unsupported by substantial evidence. The appellate court therefore did not err in setting aside the NLRC's rulings and reinstating the Labor Arbiter's Decision. 

 

 

Whether San Juan, a managerial employee, was validly dismissed on the ground of loss of trust and confidence.

YES. Two conditions must concur: the employee must occupy a position of trust and confidence, and there must be an act justifying the loss of that trust. As Network Operations Manager, San Juan occupied a managerial position clothed with trust and confidence. 

The Court then applied the relaxed evidentiary standard governing managerial employees, under which the mere existence of a basis for believing that the employee has breached the trust of the employer suffices for dismissal; proof beyond reasonable doubt is not required, it being enough that the employer has reasonable ground to believe that the employee is responsible for the purported misconduct. Substantial evidence supported the employer's loss of trust: San Juan's intoxicated and scandalous conduct toward a subordinate during a company-sponsored activity, and — critically — his post-incident conduct in contacting Cruz against express instructions, convening meetings with team members to influence their statements, and falsely representing that he had accessed the witnesses' statements. Such acts evinced an intent to obstruct the investigation and were incompatible with the standard of conduct demanded of a manager.

 

 

Whether San Juan is entitled to reinstatement, backwages, and separation pay.

NO. The dismissal being valid, San Juan was not illegally dismissed and was therefore not entitled to backwages, reinstatement, or separation pay in lieu thereof, these being remedies available only to employees illegally terminated. The Court accordingly upheld the Labor Arbiter's Decision, as reinstated by the Court of Appeals, denying these claims. 

 

 

Whether the proportionate 13th month pay awarded to San Juan should earn legal interest.

YES. Notwithstanding the validity of the dismissal, the Court sustained the award of PHP 76,384.00 representing proportionate 13th month pay, a benefit due regardless of the cause of separation. Modifying the appellate court's Decision only in this respect, the Court ordered that the amount shall earn legal interest at 6% per annum from finality of the ruling until full payment.

 

DISPOSITION: The Petition was DENIED. The Decision and Resolution of the Court of Appeals — which reinstated the Labor Arbiter's Decision dismissing the complaint for illegal dismissal — were AFFIRMED WITH MODIFICATION, in that the proportionate 13th month pay of PHP 76,384.00 shall earn legal interest at 6% per annum from finality until full payment. No other monetary awards were granted.



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