Sonia F. Mariano Vs. Martinez Memorial Colleges, Inc., et al.
G.R. No. 194119. April 13, 2016


Martinez Memorial Colleges, Inc. (MMC) is a private educational institution. Petitioner Mariano was MMC’s Assistant Cashier since April 15, 1976 and had been in service for 32 years. Part of her job was to accept payments and issue receipts and deposit slips to MMC students. On March 12, 2008, the petitioner went on a one month authorized leave of absence, as she and her husband Dario Mariano (Dario), Director for Finance of MMC, would be vacationing in the United States. When the petitioner reported back to work, she received a Memorandum stating that in line with the streamlining activities of MMC, she would be transferred from the Cashier’s Office to the Office of the Vice-President (OVP) for Finance, her husband’s office.

A replacement was assigned to handle all the collections of MMC. Another leave that she applied was disapproved until further notice due to on-going audit. The report of the audit review conducted showed the petitioner’s improper handling of cash accounts of MMC. A separate account called “non-essential accounts” in which some collections of MMC were deposited and diverted from MMC’s general fund was likewise discovered. The non-essential accounts contained the total amount of P40,490,619.26. Petitioner filed with the NLRC a Complaint for constructive dismissal against MMC and the respondents.

Petitioner however received a letter informing her that her employment has been terminated on the ground of serious or gross dishonesty in relation to the discovered misappropriation and diversion of funds of MMC, and aggravated by her continuous absence from office without leave or any explanation. Thereafter, the petitioner amended her complaint with the NLRC to one of illegal dismissal.

LA Ruling:

The LA found the petitioner’s dismissal as illegal for failure of the respondents to prove lawful or just cause for the termination of her employment and for their failure to accord her due process.

NLRC Ruling:

On appeal, the NLRC vacated and set aside the LA’ s decision. The petitioner filed a Motion for Reconsideration which was denied.

CA Ruling:

The petitioner then went to the CA, which denied her petition for lack of merit. The CA agreed with the NLRC and found that the System Review Report prepared by Muallil provided sufficient grounds for MMC to terminate the petitioner from employment for serious or gross dishonesty. The CA said that the petitioner was the Assistant Cashier who performs the duties of a cashier, position that requires a high degree of trust and confidence, and her infraction reasonably taints the trust and confidence reposed upon her by her employer. Thus, the petition.


  1. Whether or not the dismissal was valid.
  2. Whether or not the transfer was illegal.

SC Ruling:

MMC’s act of transferring the petitioner from the Cashier’s Office to the OVP for Finance is a valid exercise of management prerogative. The Court has often declined to interfere in legitimate business decisions of employers, as long as the company’s exercise of the same is in good faith to advance its interest and not for the purpose of defeating or circumventing the rights of employees under the laws or valid agreements.

In this case, the MMC’s exercise of its management prerogative was done for the advancement of its interest and not for the purpose of defeating the lawful rights of the petitioner. It was within MMC’s discretion to allow husband and wife to be in one department and there is no express prohibition on this matter. The Board of Directors’ decision to transfer the petitioner to her husband’s department did not cause any conflict at all and the same was on an interim basis only.

MMC’s ground for terminating the petitioner’s employment was “serious or gross dishonesty and for having committed an offense against [MMC],” which was based on the findings in the System Review Report submitted by Muallil. Another basis was the alleged diversion of MMC’s funds wherein non-essential accounts or accounts payable to and for MMC were deposited to “private accounts”.

In Gargoles vs. Del Rosario, an act of dishonesty by an employee who has been put in charge of the employer’s money and property amounts to breach of the trust reposed by the employer, and normally leads to loss of confidence in her, and such dishonesty comes within the just and valid causes for the termination of employment under the Labor Code.

In the same vein, the Court has ruled that in dismissing a cashier on the ground of loss of confidence, it is sufficient that there is some basis for the same or that the employer has a reasonable ground to believe that the employee is responsible for the misconduct, thus making him unworthy of the trust and confidence reposed in him.

Courts cannot justly deny the employer the authority to dismiss him for employers are allowed wider latitude in dismissing an employee for loss of trust and confidence.


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