ASIA PACIFIC CHARTERING (PHILS.) INC. v. 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.

FACTS:
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 Bondocs 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 Farolans marketing and
sales responsibilities butshe continued to receive her salary. Asia claims that the
increase in sales revenue was due to Zozobrados 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 arbiters decision.
Hence, the filing of this petition.

ISSUE:
Whether or not Respondent Farolans 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
employees 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 Farolans 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.