Asia Pacific Chartering, Inc. v. Maria Linda R. FarolanGR No. 1511370Carpio-Morales, J:

FACTS: Petitioner was a general sales agent (GSA) which sold passenger and cargo spaces for airlines operated by Scandinavian Airline System (an offline international airline company). On December 16, 1992, petitioner hired respondent as Sales Manager for its passenger and cargo operations. In a report given by respondent sometime in September 1993, she expressed that the company was performing poorly because of several market forces beyond her control. To remedy the situation, petitioner directed its high-ranking official, Roberto Zozobrado, to conduct an investigation. As a result, Zozobrado informally took over some of respondents marketing and sales responsibilities because allegedly the former found out that the respondent did not adopt any sales strategy to develop other sources of revenue for SAS. However, respondent presented in evidence a message from Soren Jespersen, the General Manager of SAS in Hongkong, congratulating the respondent for reaching and exceeding the target by 50% for the month of May 1994. On June 18, 1994, respondent received a letter of termination from the petitioner on the ground of loss of trust and confidence. Respondent then filed a case before the Labor Arbiter for illegal dismissal against petitioner. She further claims that she was not accorded due process and was not given an opportunity to be heard and answer claims against her. The Labor Arbiter decided the case in favor of respondent, finding that she was illegally dismissed. On appeal, the NLRC reversed the decision of LA, stating that it was the right of petitioner to dismiss employees based on loss of trust, which was management prerogative. The CA reinstated the decision of the LA, finding that the respondent was deprived of due process.

(1)ISSUE: Whether or not the petitioner was illegally dismissed

HELD: YES. The requisites for a valid dismissal of an employee are: (1) the employee must be afforded due process (i.e. he must be given the opportunity to be heard and to defend himself) and (2) dismissal must be for a valid cause as provided in Art. 282 of the Labor Code, or any of the authorized causes under Art. 283 and 284 of the same. The Court found that respondent was not afforded the opportunity to be heard and to present evidence in her defense and was not given any notice constituting the grounds for her dismissal. As regards the second requisite, the employer bears the onus of proving that the dismissal is for just cause.

(2)ISSUE: Whether or not the doctrine of loss of trust and confidence can be applied to the case at bar

HELD: NO. The Supreme Court did not uphold the petitioners defense in averring the application of the doctrine of loss of trust as management prerogative. With respect to rank and file personnel, loss of trust and confidence as a 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 managerial employees, the mere existence of a basis for believing that such employee has breached the trust of his employer would suffice for his dismissal. The Court determined that respondent was not a managerial employee (despite the fact that she was designated as a manager) because it is the job description that determines the nature of the employment. Furthermore, the Court considered the requisites for an employee to be a managerial employee, which requires the presence of all of the following: (1) their primary duty consists of the management of the establishment in which they are employed or a department or a subdivision thereof; (2) they customarily and regularly direct the work of two or more employees therein; and (3) they have the authority to hire or fire other employees of lower rank; or their suggestions and recommendations as to the hiring and firing and as to the promotion or any other change of status of other employees are given particular weight. The Court found that the respondents function dealt mainly with servicing of existing clientele; hence, she could not be considered as a managerial employee. As such, her dismissal, to be valid, requires proof that the respondent failed to observe standards of work or was inefficient. The petitioner was not able to show such evidence. Thus, the doctrine of loss of trust and confidence cannot be appreciated in favor of the petitioner.