DISCLOSURE OF PASSWORD BY BANK PERSONNEL MAY BE GROUND FOR DISMISSAL DUE TO LOSS OF TRUST AND CONFIDENCE

PHILIPPINE SAVINGS BANK, Petitioner, vs. MANUEL P. BARRERA
G.R. No. 197393, June 15, 2016

Facts:

Petitioner is a banking institution organized and existing under the laws of the Philippines. Respondent worked for petitioner for seven years in various capacities. He was assigned to the Bacolod branch as a marketing officer and was put in command of the loans department.

During a quality assurance review, it was discovered that respondent had allowed a contractual employee to use the former’s user ID for account booking and approval in the bank’s Integrated Loans System. The unauthorized disclosure of system ID and password was a violation of bank’s policy. Respondent admitted that he had disclosed his user ID and password, but only to a regular employee who had to go on maternity leave. He explained that he did so for the continuity of transactions in instances when he had to go out of the bank to coordinate with dealers or interview clients. He insisted that he was merely following a precedent set by the branch head.

While the investigation of this matter was pending, the bank discovered another infraction committed by respondent – the unauthorized issuance of bank certifications. The internal audit group found that he, along with other officers, was involved in lending the account of Spouses Ong to different individuals in order to generate bank certifications in favor of the latter. Bank policy explicitly stated that “no account shall be allowed to be opened for certification purposes only.” As a result of the investigation, it was discovered that a Request for Change was accomplished to change the account name of Sps. Ong to that of Spouses Bautista. After which the account was reverted to spouses Ong.

An administrative hearing was conducted. Petitioner served on respondent a Notice of Termination for grave violation of bank policies, code of conduct, and trust and confidence. Respondent filed a Complaint for illegal dismissal.

LA Ruling:

The labor arbiter ruled in favor of respondent and ordered his immediate reinstatement, as well as the payment of money claims. The labor arbiter found that the alleged infractions were never fully substantiated by clear and convincing evidence. Petitioner appealed to the NLRC.

NLRC Ruling:

Petitioner filed a Motion to Dismiss on the ground of lack of authority to file appeal memorandum and non-perfection thereof. He pointed out that the supersedeas bond was irregular, because the Certification of Accreditation and Authority issued by the Office of the Court Administrator (OCA) stated that the Philippine Charter Insurance Corporation (PCIC) was only authorized to issue bonds for civil cases.

Nevertheless, the NLRC gave due course to the appeal and reversed the Decision of the labor arbiter. It found that the complainant had been dismissed for cause and afforded due process. It went over the evidence presented and found that petitioner was able to substantiate the validity of complainant’s termination. The NLRC found that respondent had violated the bank’s Code of Conduct when he disclosed his user ID and password despite the strict prohibition on its disclosure. With regard to the bank certifications, it did not give credence to his defense that it was a ministerial duty on the part of the respondent to affix his signature. According to the NLRC, the reasons given by respondent revealed his laxity in protecting the interest of the bank. The management prerogative of the bank to institute measures that would curb irregularities was upheld. The NLRC Decision, however, did not address the argument raised in the Motion to Dismiss regarding the irregularity of the appeal bond. Respondent therefore filed a Petition for Certiorari with the CA.

CA Ruling:

The CA held that the NLRC had committed grave abuse of discretion amounting to lack or excess of jurisdiction when the latter gave due course to the bank’s appeal even if it was apparent that the appeal had not been perfected owing to a defective and irregular appeal bond. The CA observed that the certification and accreditation issued by the OCA did not state that the PCIC was allowed to issue bonds relative to labor cases filed before the NLRC. The appellate court further held that the appeal should not have been given due course because of its non-perfection within the reglementary period.

The CA did not see the need to resolve the other issue -whether the NLRC gravely abused its discretion in reversing the Decision of the labor arbiter -because “to do so is tantamount to allowing a lost remedy to prosper.” Petitioner’s Motion for Reconsideration was denied.

Issue/s:

1. Whether or not the dismissal was valid
2. Whether or not the appeal was perfected when the supersedeas bond was obtained from a company whose certification of authority does not include labor cases

SC Ruling:

The SC found the petition meritorious.

It is within the province of the NLRC to accredit surety companies for cases it hears. The Supreme Court only accredits surety companies for judicial courts. This fact explains why labor cases were not enumerated in the Certification of Accreditation and Authority issued to the PCIC. This is not to say that the certification issued by, the OCA is worthless before the NLRC. On the contrary, the 2005 Revised Rules of Procedure of the NLRC expressly provided that bonds issued by a reputable bonding company duly accredited by the Supreme Court are acceptable. (Also mentioned in 2011 NLRC Rules of Procedure).

In addition, the Court has relaxed the requirement of posting a supersedeas bond for the perfection of an appeal when there has been substantial compliance with the rule. For example, in Del Rosario vs. Philippine Journalists, Inc., the Court allowed the appeal to proceed despite the subsequent revocation of the authority of a bonding company, because “technical rules of procedure should not hamper the quest for justice and truth.”

The loss of confidence had sufficient basis. As an account and marketing officer, respondent was tasked with the approval of loans, which is an element of a core banking function. Without a doubt, he was entrusted with delicate matters, including the custody, handling, care and protection of the bank’s assets. Given the sensitive functions of his position, he was expected to strictly observe and comply with the bank’s standard operating procedures. This he failed to do. Respondent, who was one of those branch personnel so designated to keep their passwords confidential at all times, disclosed his password to another employee, who later disclosed it to a contractual employee.

Because of its status as a business affected with public interest, a bank is expected to the highest degree of diligence in the selection and supervision of its employees. We cannot coerce petitioner to retain an employee whom it cannot trust to perform duties of the highest fiduciary nature. As a general rule, employers are allowed wider latitude of discretion in terminating the employment of managerial employees, as the latter perform functions that require the employers’ full trust and confidence.