Inter-Asia Development Bank v. Pereña

FIRST DIVISION

[G.R. No. 213627. April 5, 2022.]

INTER-ASIA DEVELOPMENT BANK, MARIAN P. WARNS and REYNALDO G. TIANGCO, petitioners, vs.SOFIA PEREÑA, respondent.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, First Division, issued a Resolution datedApril 5, 2022which reads as follows:

"G.R. No. 213627 (Inter-Asia Development Bank, Marian P. Warns and Reynaldo G. Tiangco v. Sofia Pereña). — This is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Court, as amended, assailing the Decision 2 dated February 11, 2014 and Resolution 3 dated July 21, 2014 of the Court of Appeals (CA) in CA-G.R. SP No. 114205. The assailed issuances reversed and set aside the Resolutions dated November 12, 2009 4 and February 26, 2010 5 issued by the National Labor Relations Commission (NLRC) in NLRC LAC No. 08-002766-08 which, in turn, overturned the October 26, 2007 Decision 6 of Labor Arbiter (LA) Edgar B. Bisana (LA Bisana) in NLRC Case No. RAB-IV-9-23342-06-RI.

The Antecedents

On April 16, 2001, respondent Sofia Pereña (respondent) was hired by petitioner Inter-Asia Development Bank (Inter-Asia) as Senior Bookkeeper. She was promoted to the position of Assistant Accountant on March 1, 2004. On November 1, 2004, she was again promoted to Accounting Manager, which she held at the time of her termination from employment. 7

The instant controversy appears to be a product of the reorganization of the corporate structure of Inter-Asia. On June 28, 2006, Arsenio R. Cuadrante, Jr. (Cuadrante, Jr.) was dismissed as President of Inter-Asia. He was replaced by Marian P. Warns (Warns) who held the title of Officer-In-Charge of said bank. On the other hand, Reynaldo G. Tiangco (Tiangco) assumed the role of Vice President of said bank (collectively, petitioners). 8 CAIHTE

Sometime in July 2006, respondent was accused by the management of Inter-Asia of: (a) failing to submit the audited financial statements of Inter-Asia to the Bangko Sentral ng Pilipinas (BSP); (b) lying to the Board of Directors of Inter-Asia by telling the members thereof that the said audited financial statements had already been submitted to the BSP when they were not; (c) failing to coordinate with Inter-Asia's external auditor, Punongbayan and Araullo, on the auditing method to be used in preparing the bank's audited financial statements; and (d) approving a loan in favor of one Alice Demabasa (Demabasa) when the latter was not qualified to secure the same. 9

On August 1, 2006, respondent received a Memorandum 10 from Warns, giving her a period of three days to explain the circumstances regarding the loan that was granted to Demabasa. The following day, or on August 2, 2006, Tiangco held a meeting with respondent, along with two other Inter-Asia employees, to discuss anew all of the accusations against her. 11

On August 10, 2006, Warns issued respondent an Inter-Office Memorandum 12 virtually placing respondent on floating status. Thus:

Considering the errors, false statements and omissions you have made, Management will conduct an investigation as to its seriousness and its effects to the Bank. In this regard, you are hereby instructed to turn-over the following documents to Ms. Marissa Cuizon effective today:

1. All keys to the filing cabinets, drawers, locks, doors, etc.

2. Records and files under your custody (subject to inventory by M. Cuizon)

3. Passwords to computers and software

4. Vault combination

5. Flash drive

6. Office and other equipment issued in your favor

7. Unused supplies and other inventories

8. Accountabilities turned over to you by separated employees

Please be informed that you are not authorized to approve or sign any document on behalf of the Bank until further notice. 13

Over a month later, or on September 19, 2006, Warns issued a Notice to Explain 14 to respondent, formally charging the latter of the offenses of serious misconduct or willful disobedience and fraud or willful breach of trust. Moreover, respondent was given a period of 48 hours to answer the said allegations. Within the said short period, respondent was able to submit her Reply 15 denying all allegations of misconduct.

On October 9, 2006, without conducting any other proceeding, Warns issued a Termination Notice 16 to respondent, formally removing her from employment with Inter-Asia.

As admitted by respondent, she filed on September 12, 2006 a complaint for constructive dismissal against petitioners before the arbitration branch of the NLRC. Said complaint was amended on September 25, 2006. 17

In her arguments before the LA, respondent posited, inter alia, that her termination was politically motivated. Specifically, respondent claimed that on July 20, 2006, Tiangco instructed her to issue a "Memo for the Record" 18 that Inter-Asia's former President, Cuadrante, Jr., ordered Punongbayan and Araullo to use a different accounting method in order to make it appear that the bank was in a good financial standing when it was not. This would eventually pave the way for Inter-Asia's new management to retrench employees. When respondent refused to comply with Tiangco's instructions, she was charged with several baseless administrative offenses. 19 DETACa

The LA's Ruling

On October 26, 2007, LA Bisana rendered a Decision 20 in favor of respondent. LA Bisana found that the allegations leveled against respondent were not supported by the evidence on record. Moreover, respondent was denied due process when she was abruptly dismissed without the benefit of any formal investigation or hearing.

Accordingly, LA Bisana disposed as follows:

WHEREFORE, PREMISES CONSIDERED, respondents' dismissal of complainant is hereby declared ILLEGAL, for want of just cause and due process of law, directing respondents, jointly and severally, to reinstate complainant to her former position without loss of seniority rights and benefits, and for payment of full backwages from date of dismissal up to the time of her actual reinstatement, and which up to this decision amounts to P362,606.40. That given the oppressive, whimsical and arbitrariness in the manner by which she was illegally dismissed complainant and her family suffer actual, moral and exemplary damages, thus, respondents should be held jointly and severally to pay the complainant moral and exemplary damages in the total amount of P500,000.00, and attorney's fees equivalent to 10% of the entire judgment monetary award to complainant, or in the amount of P86,260.64.

SO ORDERED. 21

Thereafter, petitioners filed a Memorandum of Appeal with Motion to Reduce Bond 22 with the NLRC. Alleging that Inter-Asia was suffering from financial losses, petitioners only posted the amount of P100,000.00 as appeal bond. HEITAD

The NLRC's Ruling

On December 23, 2008, the NLRC issued an Order 23 dismissing the said appeal for failure on the part of petitioners to post the proper bond.

However, following petitioners' Motion for Reconsideration, 24 the NLRC issued a Resolution 25 dated November 12, 2009 giving due course to the appeal. The NLRC then reversed and set aside the findings and conclusions of LA Bisana. Thus:

WHEREFORE, premises considered, the appeal filed by respondents is GRANTED. The Decision of Labor Arbiter Edgar B. Bisana dated 26 October 2007 is hereby REVERSED and SET ASIDE, and a NEW ONE rendered DISMISSING the complaint for lack of merit.

SO ORDERED. 26

Respondent's Motion for Reconsideration 27 of the foregoing Resolution was denied by the NLRC in its subsequent February 26, 2010 Resolution. 28 Thereafter, an Entry of Judgment 29 was issued by the NLRC on May 25, 2010.

Undaunted, respondent filed a Rule 65 Petition for Certiorari with the CA.

The CA's Ruling

On February 11, 2014, the CA rendered the herein assailed Decision 30 finding merit in respondent's arguments.

The CA found that the evidence purporting to prove respondent's transgressions were insufficient to justify her dismissal. The supposed breaches of company policy on the part of respondent, if any, were not intentional and could hardly amount to serious offenses, said the appellate court.

The CA also ruled that the NLRC gravely abused its discretion in giving due course to petitioners' appeal despite posting a bond which was insufficient to cover the LA's judgment award. The CA conceded that motions for reduction of appeal bonds have been granted by the courts on several occasions. However, in petitioners' case, their mere declaration that Inter-Asia was suffering from financial losses does not automatically entitle them to the reduction of their appeal bond because the same "may be in the form of cash deposit or surety bond equivalent in amount to the monetary award." 31

However, considering the strained relations between the opposing parties, the CA awarded respondent separation pay in lieu of reinstatement.

The CA decreed:

WHEREFORE, the petition is GRANTED. The assailed resolutions of the National Labor Relations Commission are set aside and the decision of the Labor Arbiter is AFFIRMED with MODIFICATION.

The economic benefits due the petitioner shall be as follows:

(1) Full backwages, without qualification or deduction, from the date of petitioner's illegal dismissal up to the date of promulgation of this decision;

(2) Separation pay equivalent to one (1) month pay for every year of service.

Attorney's fees equivalent to 10% of the entire judgment monetary award.

SO ORDERED. 32

Hence, the present recourse.

The Issues

Petitioners argue in the affirmative of the following issues:

I.

Whether or not Respondent filed the Petition for Certiorari under Rule 65 of the Rules of Court, within the reglementary period provided by law[;] ETHIDa

II.

Whether or not the reduction of Appeal Bond is valid[; and]

III.

Whether of nor the Respondent was illegally terminated[.] 33

The Ruling of the Court

At the outset, it bears stressing that generally, only questions of law may be raised in a petition for review on certiorari34 as the Court is not a trier of facts. 35 This Court will not review facts, as it is not our function to analyze or weigh all over again evidence already considered in the proceedings below. 36 Nevertheless, the case at bar falls under one of the recognized exceptions to the rule, that exception being when the findings of the NLRC conflict with those of the Labor Arbiter and the Court of Appeals. 37 Thus, this Court is constrained to determine the facts of the case. 38

The petition is bereft of merit.

Respondent's petition for certiorari

In contending that respondent's petition for certiorari with the CA was filed out of time, petitioners point out that "[r]espondent's Memorandum dated January 24, 2011 filed before the Court of Appeals does not state that it was timely filed" 39 and that "there was no statement of timeliness of the appeal from the receipt of the Resolution dated February 26, 2010 by the Respondent (Petitioner therein) to justify the due filing of the Appeal with the Honorable Court of Appeals on January 24, 2011." 40 cSEDTC

Petitioners have, deviously or clumsily, confused a petition from a memorandum in an attempt to sway the Court to their cause.

A petition and a memorandum are starkly different from each other. A petition is a formal written request presented to a court, 41 the purpose of which is to set the proceeding in motion. 42 On the other hand, a memorandum is merely a device 43 intended primarily to aid the court in the rendition of the decision in accordance with law and the evidence. 44 Simply put, a petition initiates a proceeding while a memorandum is filed at some point during the course thereof which, in usual practice, occurs before the case is submitted for decision or resolution.

The determination of the timeliness of a petition for certiorari under Rule 65 of the Rules of Court obviously lies on the date that the petition — not the memorandum — was filed.

In her petition for certiorari before the CA, respondent clearly declared that she received her copy of the NLRC's February 26, 2010 Resolution, denying her motion for reconsideration, on March 16, 2010. 45 Thus, she had 60 days within which to file her petition for certiorari, or until May 15, 2010. However, since May 15, 2010 fell on a Saturday, she had until the next working day, May 17, 2010, to file the same. As reflected in the records of the CA, that is precisely what respondent did. 46 Thus, the NLRC committed a mistake when it issued its May 25, 2010 Entry of Judgment 47 which states that its February 26, 2010 Resolution 48 had already become final and executory after 30 days, or on March 26, 2010.

The Court notes with curiosity the overzealousness of the NLRC in issuing the said entry of judgment, to the extent that it overlooked the most basic precepts in the issuance thereof. In the first place, the NLRC erred in its computation because there were only 28 days between February 26, 2010 and March 26, 2010, not 30 days. More importantly, the reckoning period that the NLRC relied upon is the date of the issuance of its February 26, 2010 Resolution, and not the date that respondent received a copy thereof.

Inter-Asia's motion to reduce bond

A.

Under Section 6, Rule VI of the 2005 NLRC Rules of Procedure, which was in effect at the time that Inter-Asia appealed the LA's Decision to the NLRC, an appeal by an employer to the NLRC may only be perfected by posting the requisite appeal bond. Thus:

Section 6. Bond. — In case the decision of the Labor Arbiter or the Regional Director involves a monetary award, an appeal by the employer may be perfected only upon the posting of a bond, which shall either be in the form of cash deposit or surety bond equivalent in amount to the monetary award, exclusive of damages and attorney's fees.

xxx xxx xxx

No motion to reduce bond shall be entertained except on meritorious grounds, and only upon the posting of a bond in a reasonable amount in relation to the monetary award.

The mere filing of a motion to reduce bond without complying with the requisites in the preceding paragraphs shall not stop the running of the period to perfect an appeal. SDAaTC

Indeed, the filing of an appeal bond for the perfection of an appeal is mandatory and jurisdictional and failure to comply with this requirement renders the decision of the Labor Arbiter final and executory. 49

However, based on the foregoing NLRC rule, the reduction of the appeal bond is allowed, subject to the following conditions: (1) the motion to reduce the bond shall be based on meritorious grounds; and (2) a reasonable amount in relation to the monetary award is posted by the appellant. 50

In McBurnie v. Ganzon51(McBurnie), the Court ruled that "all motions to reduce bond that are to be filed with the NLRC shall be accompanied by the posting of a cash or surety bond equivalent to 10% of the monetary award that is subject of the appeal, which shall provisionally be deemed the reasonable amount of the bond in the meantime that an appellant's motion is pending resolution by the Commission." 52

B.

The records are bereft of any proof in support of petitioners' claim that Inter-Asia was suffering from financial difficulties when they sought the NLRC's discretion for the reduction of their appeal bond.

Nevertheless, there have been instances when the Court has sanctioned the relaxation of the NLRC's rules on the filing of an appeal bond as well as the grant of motions to reduce bond, taking into consideration the NLRC's view on the merits of the appeal.

In Garcia v. KJ Commercial53(Garcia), KJ Commercial was declared guilty of illegal dismissal by the LA. When it interposed an appeal to the NLRC, it filed a motion to reduce bond and posted a P50,000.00 cash bond. The NLRC initially dismissed KJ Commercial's appeal because it was less than 2% of the total monetary award of P2,612,930.00 which was adjudged by the LA. Thereafter, KJ Commercial filed a motion for reconsideration and posted a surety bond of P2,562,930.00. The NLRC then granted the motion for reconsideration and reversed the ruling of the LA. Thereafter, the petitioners in that case argued that when the NLRC initially denied KJ Commercial's motion to reduce bond, the judgment of the LA had already become final and executory.

Ruling in favor of KJ Commercial, the Court held that the delayed posting of the surety bond did not render the LA's decision final and executory because the NLRC possessed the discretion to rule on the motion beyond the 10-day period within which to perfect an appeal. We considered KJ Commercial's willingness to post a partial bond, as well as the NLRC's favorable evaluation of the substantial merits of KJ Commercial's appeal.

In Mendoza v. HMS Credit Corporation54(Mendoza), HMS Credit Corporation was adjudged liable by the LA for illegal dismissal and was ordered to pay its illegally dismissed employee separation pay, backwages, moral and exemplary damages, and attorney's fees in the total amount of P1,025,081.82. When it filed an appeal to the NLRC, the same was accompanied by a motion to reduce appeal bond, tendering the amount of P650,000.00. The NLRC denied the motion but ordered HMS Credit Corporation to post an additional cash bond of P122,801.66, which the latter did. Afterwards, the NLRC granted the appeal and overturned the decision of the LA. The Court ruled that HMS Credit Corporation's actions as substantial compliance as would render its appeal as timely filed.

In both Garcia and Mendoza, the NLRC took into consideration the substantial merits of the appealed cases in giving due course to the appeals. It, in fact, reversed the Labor Arbiters' rulings in both cases. 55

The same can be said of this case. Based on the NLRC's perspective, the appeal stood on meritorious grounds because it reversed and set aside the LA's findings and conclusions.

C.

Our judicial precedents also show instances when the Court allowed appeals to the NLRC, despite the failure on the part of an appellant to satisfy the full amount of the requisite bond, on grounds of substantial compliance. acEHCD

In Lopez v. Quezon City Sports Club, Inc., 56 the Quezon City Sports Club, Inc. (QCSCI) was adjudged by the LA to be guilty of unfair labor practice. It was ordered to pay its employees a total amount of P27,504,864.46 representing separation pay, backwages, and salary increase. Appealing to the NLRC, QCSCI filed a motion to reduce bond to P4,000,000.00. Acting on the said motion, the NLRC ordered QCSCI to post an additional bond of P6,000,000.00, which the latter did albeit beyond the reglementary period for the filing of the appeal.

We held that "the posting of the amount of P4,000,000.00 simultaneously with the filing of the motion to reduce the bond to that amount, as well as the filing of the memorandum of appeal, all within the reglementary period, altogether constitute substantial compliance with the Rules." 57

More recently, in Philippine Touristers, Inc. v. MAS Transit Workers Union-ANGLO-KMU, 58 the LA found Philippine Touristers, Inc. (PTI) guilty of unfair labor practice and adjudged against it a monetary award amounting to P12,833,210.00. When PTI launched an appeal to the NLRC, it filed a motion to reduce bond, as well as a surety bond of P5,000,000.00. The NLRC initially rejected PTI's motion and dismissed the latter's appeal for failure to post the required bond in full. However, it later accepted PTI's appeal and reversed the judgment of the LA. It was only after the expiration of the reglementary period for the filing of the appeal that PTI was able to post the full amount of the bond.

The Court declared that the NLRC's acceptance of the appeal was justified because the amount of PTI's partial bond exceeded the 10% threshold laid down in McBurnie. We held that PTI's partial bond "already constituted substantial compliance with the governing rules at the onset." 59

In the case at bar, petitioners' appeal to the NLRC was filed within the reglementary period. It included a motion to reduce bond which, in turn, was accompanied by a provisional bond of P100,000.00, or more or less 27.58% of the LA's monetary award of P362,606.40 (exclusive of damages and attorney's fees). The amount of the bond, as well as petitioners' timely appeal, constitutes substantial compliance as would merit the acceptance of their appeal.

Nevertheless, We affirm the CA's

Notwithstanding the propriety of Inter-Asia's appeal from the Decision of the LA, We find no reversible error on the part of the CA when it overturned the findings and conclusions of the NLRC.

A.

Petitioners excoriate respondent's alleged premature filing of her complaint for constructive dismissal with the NLRC on September 12, 2006. They contend that said complaint had no cause of action because respondent had not yet been officially dismissed.

We cannot sustain petitioners' contention.

Constructive dismissal arises "when continued employment is rendered impossible, unreasonable or unlikely; when there is a demotion in rank and/or a diminution in pay; or when a clear discrimination, insensibility or disdain by an employer becomes unbearable to the employee." 60 It is a dismissal in disguise or an act amounting to dismissal but made to appear as if it were not. 61 The test of constructive dismissal is whether a reasonable person in the employee's position would have felt compelled to give up his or her employment/position under the circumstances. 62 SDHTEC

The acts committed by petitioners against respondent before she was outrightly dismissed are well-documented.

It may be recalled that as early as August 2006, Warns had already accused respondent of numerous indiscretions when the latter refused to issue a "Memo for the Record" pinning the blame on Inter-Asia's former management, led by Cuadrante, Jr., for the discrepancy in the accounting method to be used by Punongbayan and Araullo. On August 1, 2006, Warns issued respondent a Memorandum 63 giving her a period of three days to explain the approval of an allegedly irregular loan granted to Demabasa. Then, on August 2, 2006, Tiangco held a meeting with respondent to hound her regarding all of the allegations of impropriety against her. 64

Petitioners' ardent pursuit of respondent's alleged infractions reached a crescendo on August 10, 2006, when Warns issued an Inter-Office Memorandum summarily concluding that she committed "errors, false statements and omissions," 65 thereby relieving her of her duties and ordering the removal of all office equipment that were issued to her.

It is readily apparent that respondent was constructively dismissed.

A review of petitioners' acts show a clear, deliberate and orchestrated scheme that would inevitably lead to respondent's termination if she did not kowtow to the whims and caprices of Warns and Tiangco. Within a span of ten days, respondent was accused of numerous infractions without any evidence, required to attend meetings urging her to frame Inter-Asia's former president of irregularities and, upon her refusal to do so, openly humiliated in front of her colleagues.

Respondent, who held the position of Accounting Manager, was unceremoniously stripped not only of her responsibilities but also of all office supplies that she was using to perform her daily tasks. The embarrassment that she suffered was grave enough to justify the filing of her complaint before the NLRC.

In fine, respondent did not jump the gun when she filed her complaint for constructive dismissal. She possessed a lawful cause of action when she sought intercession from the arbitration branch of the NLRC.

B.

Security of tenure is a right of paramount value. 66 Our laws and jurisprudence guarantee to every employee security of tenure. 67 That guarantee is an act of social justice. 68 The right to security of tenure guarantees the right of employees to continue in their employment absent a just or authorized cause for termination. 69 In contrast, the prerogative of management to dismiss a worker, as an aspect of property right, has never been endowed with a constitutional status. 70

It is an undisputed fact that respondent held a managerial position at Inter-Asia. Due to the nature of her occupation, respondent's employment may be terminated for willful breach of trust under Article 297 (c) 71 of the Labor Code. Loss of trust and confidence as a valid ground for dismissal is premised on the fact that the employee holds a position whose functions may only be performed by someone who enjoys the trust and confidence of the management. 72

To justify a valid dismissal based on loss of trust and confidence, the confluence of two conditions must be satisfied: (1) the employee concerned must be holding a position of trust and confidence; and (2) there must be an act that would justify the loss of trust and confidence. 73

The ground of loss of trust and confidence must not be exercised arbitrarily and without just cause. 74 Unsupported by sufficient proof, loss of trust and confidence is without basis and may not be successfully invoked as a ground for dismissal. 75 It should not be used as a subterfuge for causes which are illegal, improper, and unjustified. 76 Otherwise, employees will be left at the mercy of their employers. 77 Let it not be forgotten that what is at stake is the means of livelihood, the name, and the reputation of the employee. 78 AScHCD

Because loss of trust and confidence is, by its nature, subjective and prone to abuse by the employer, 79 petitioners in the instant case must prove an actual breach of duty founded on clearly established facts sufficient to warrant respondent's loss of employment. 80

A review of the records extant in the case at bar shows that the grounds for respondent's dismissal are flimsy and devoid of substance.

In justifying respondent's dismissal, petitioners assert that as a managerial employee, she was guilty of breaching the trust and confidence reposed in her by (1) informing the Board of Directors of Inter-Asia that it was Punongbayan and Araullo that insisted on using a particular method to be used in preparing the bank's audited financial statements; (2) wrongfully declaring that she had also submitted a copy of Inter-Asia's 2005 Audited Financial Statements to the BSP; and (3) approving a loan in favor of a non-employee that was reserved for the employees of Inter-Asia.

The records show that respondent never lied to petitioners when she stated that the BSP had already received a copy of Inter-Asia's 2005 Audited Financial Statements, albeit the same was not stamped as "received" because the BSP requested additional documents, which respondent reported to the bank.

Moreover, respondent could not be charged with willful disobedience, resulting in loss of trust and confidence, when she refused to frame Inter-Asia's former president on the mix-up regarding the auditing method that was used by Punongbayan and Araullo in the preparation of the bank's audited financial statements. One of the requisites of willful disobedience is that an employer's order must be "reasonable, lawful, made known to the employee, and must pertain to the duties that he [or she] had been engaged to discharge." 81 There is nothing lawful about petitioners' instruction upon respondent to make untruthful statements in furtherance of Warns and Tiangco's vendetta against Inter-Asia's previous management and, thereafter, retrench employees.

As to the allegation that respondent approved the loan of a former employee of Inter-Asia who was no longer entitled to the same, the records show that respondent did not possess any authority to approve the said loan. 82 As Accounting Manager, her job entailed the processing of the payments after the fact of approval by the proper bank authority.

At this juncture, We quote with affirmation the findings of the LA:

[It] is clearly established that [respondent] was able to comply with the duty to furnish Punongbayan the required accounting entries. This is not disputed by the [petitioners].

Nor can [respondent] be fairly charged of failure to perform her duty to complete an accurate preparation and timely submission and filing with the BSP of the bank's 2005 audited financial statements. It is established on record that it was external auditor Punongbayan that was tasked to and which actually did prepare the 2005 Audited Financial Statements of the [petitioner] bank. x x x

The charge of [petitioners] that [respondent] did not do anything to comply with the lacking requirements for the BSP to officially receive the bank's 2005 audited financial statements is also baseless, particularly with regard to the president's Annual Report. The [respondent], being only a department manager, had no authority to issue an annual report for the bank, in fact, such responsibility and authority belongs to none other than [petitioner] Warns herself.

The [respondent] also sufficiently proved that she furnished Punongbayan with the accounting entries required by the external auditor to prepare another set of financial statements based on the cost method. The [respondent] did despite her reservations and disagreement to the re-issuance of the said financial statements. AcICHD

xxx xxx xxx

x x x [A] careful review of the records reveal that [petitioners] failed to discharge the burden of proof showing that [respondent] lied in maintaining that it was Punongbayan that decided on what method to use in reporting the ROPOA entries in the audited financial statements. On the contrary, the allegations of [respondent], that [petitioners] have been hell bent on projecting a net loss for the bank to lay the ground for implementing a retrenchment, and to prove their baseless accusation against former president Cuadrante as the one who insisted on the use of fair market value method to window dress the financial statements x x x. 83

As further synthesized by the CA:

As to the Financial Statements of the Bank, records will show that there indeed was a physical submission to the BSP although it was not officially received by BSP as it did not come with a transmittal letter (which was later complied with by the [respondent]) and the President's Annual report, which was beyond the [respondent's] control as the report should come from the President herself. On the second act of [respondent] having disobeyed lawful orders, it was explained that although there was no personal coordination made, yet [respondent] caused the submission of pertinent data/documents for the use of the external auditors. The third act of erroneously including in the list a non-employee is but an honest mistake that was immediately corrected. 84

In fine, petitioners failed to prove any valid ground to terminate respondent on grounds of loss of trust and confidence.

The awards due respondent

A.

Settled is the rule that an employee who was illegally dismissed from work is entitled to reinstatement without loss of seniority rights, and other privileges, as well as to full backwages, inclusive of allowances, and to other benefits or their monetary equivalent computed from the time his or her compensation was withheld from him or her up to the time of his or her actual reinstatement. 85

However, jurisprudence holds that there are instances when reinstatement is no longer feasible, such as when the relations between the employer and employee have been so severely strained that it is no longer fitting to order reinstatement 86 or when considerable time has lapsed since the employee's dismissal, so that reinstatement would now be impractical and hardly in the best interest of the parties. 87 These factors are applicable in this case. Respondent was mistreated by petitioners to the extent that she was constrained to file a complaint for constructive dismissal. Moreover, 16 years have already lapsed since respondent was dismissed from employment.

In lieu of reinstatement, respondent shall be entitled to separation pay computed at one month pay for every year of service, 88 with a fraction of at least six months considered as one whole year, 89 from the time compensation was withheld from her until the finality of this Resolution. The payment of separation pay is in addition to payment of backwages, 90 the latter being a form of relief that restores the income that was lost by reason of unlawful dismissal. 91

B.

The Court notes the ambiguity of the dispositive portion of the assailed CA Decision because it did not unequivocally state its affirmation of the other monetary awards adjudged by LA Bisana. We take this opportunity to express our imprimatur of these awards, albeit with a few modifications.

Moral damages are recoverable where the dismissal of the employee was attended by bad faith or fraud or constituted an act oppressive to labor, or was done in a manner contrary to morals, good customs or public policy. 92 On the other hand, exemplary damages are proper when the dismissal was effected in a wanton, oppressive or malevolent manner, and public policy requires that these acts must be suppressed and discouraged. 93 TAIaHE

As We have already discussed in seriatim, petitioners' acts warrant the award of moral and exemplary damages in favor of respondent. This Court has consistently accorded the working class a right to recover damages for unjust dismissals tainted with bad faith; where the motive of the employer in dismissing the employee is far from noble. 94

However, the purpose of moral and exemplary damages is not to enrich the illegally dismissed employee. 95 Under the circumstances, We reduce the award of moral and exemplary damages to P100,000.00 each. 96

It is also settled that where an employee was forced to litigate and incur expenses to protect his or her rights and interest, as in the instant case, he or she is entitled to an award of attorney's fees equivalent to ten percent (10%) of the total award. 97

In consonance with prevailing jurisprudence, 98 legal interest at the rate of six percent (6%) per annum is imposed on the total monetary awards from the date of finality of this judgment until their full satisfaction.

C.

In finis, the Court upholds the pronouncement of the LA holding that Warns and Tiangco be made jointly and solidarily liable with Inter-Asia for the entire judgment award.

In Malayang Samahan ng mga Manggagawa sa M. Greenfield v. Ramos, 99 this Court reiterated the rule that corporate directors and officers are solidarily liable with the corporation for the termination of employees done with malice or bad faith. 100 Bad faith does not connote bad judgment or negligence; it imports a dishonest purpose or some moral obliquity and conscious doing of wrong; it means breach of a known duty through some motive or interest or ill will; it partakes of the nature of fraud. 101

Here, as sufficiently found by the LA, respondent's assertion that Warns and Tiangco tried to force her to participate in the manipulation of the bank's financial statements as an excuse to retrench employees, and to pin the blame on its former president, was unchallenged:

We found nothing in [petitioner's] reply and rejoinder disputing complainant's allegation under paragraph 4 of item 7 of her Sworn Statement, viz.:

"Don't you know that galit na galit sa 'yo si Mr. Benjamin Salamat kasi may narinig kaming gusto lang pagandahin ni Mr. Cuadrante yung financial statement. Sofie sabi nga pala ni Mr. Benjamin Salamat gawa ka ng "Memo for the Record" addressed to him na instruction lang ang lahat ng ito ni Mr. Cuadrante. As HR Manager, you need to know the management plan of RETRENCHMENT at gusto ni Mr. Salamat na yung original employees lang ang matira."

Moreover, [respondent's] allegation under item 16 of her Sworn Statement x x x that [petitioner] Tiangco went to the extent of intimidating and/or coercing her to make false statements against the former president is likewise undisputed, viz.:

"Kung nag-sorry na lang kayo tungkol dyan sa P&A na yan, pwede ko pang ipacancel [ang] meeting bukas sa BSP. Tuloy, malaman ng BSP ang problem natin, nasaan nga ba ang loyalty mo? Mag-isip ka Sofie pwede ka naming ipa-blotter di ka na makakapag-apply sa Equitable-PCI Bank, Banco De Oro, BPI, tapos ang kinakalaban mo Madrigal pa. Mr. Salamat na businessman and P&A auditing firm, may whole night ka pa para mag-isip." To this, I told Rey: "Sasabihin ko tomorrow sa BSP the whole truth that P&A is the one who insisted on the use of fair market value at hindi namin alam what is the new accounting standard that they used because they did not discuss this with us nor gave a copy of their audit report to us." cDHAES

Nor was [respondent] afforded due process in view of [petitioners'] failure to conduct an investigation where she should have been given the opportunity to confront the witnesses against her and adduce evidence in support of her position. She was only made to explain herself in writing, but her explanations were grossly ignored x x x.

xxx xxx xxx

In the instant case, [petitioners] had virtually concluded that the [respondent] was guilty and meted out the penalty of placing her on a floating status, even as they were yet promising to conduct an investigation, as shown in TURN-OVER Memo of [petitioner] Warns to [respondent] x x x. In fact, in the said memo, the purported investigation was promised to be conducted no longer to determine guilt or innocence of [respondent] but only to determine the seriousness of the alleged infractions committed by [respondent]. Meaning, [respondent] was immediately condemned by [petitioners] without first hearing her side. Under the circumstance[s], even the expected moro-moro investigation or hearing was not even conducted x x x. 102

The Court notes that the sworn statement alluded to by the LA was quoted in full in respondent's Position Paper. 103 A perusal of petitioners' Reply 104 and Rejoinder 105 to the same readily shows that, indeed, petitioners did not even acknowledge or address the accusations of impropriety on their part.

What is also clear in this case is that petitioners' ill treatment of respondent did not escape the attention of her colleagues in Inter-Asia. In an undated letter which was individually signed on August 15, 2006 by 11 employees of Inter-Asia, bearing the subject "Pakikiisa," 106 respondent's colleagues voiced their concern to Warns, questioning the latter's ill treatment of respondent and the veracity of the accusations leveled against her. As far as the records show, petitioners never even addressed this.

All told, as established by the evidence on record, Warns and Tiangco exhibited wanton bad faith in all of their dealings with respondent. They must share the consequences of their illegal acts.

WHEREFORE, the petition is DENIED for lack of merit. The Decision dated February 11, 2014 and Resolution dated July 21, 2014 of the Court of Appeals in CA-G.R. SP No. 114205 are AFFIRMED with MODIFICATION.

Respondent Sofia Pereña is declared to have been illegally dismissed by petitioners Inter-Asia Development Bank, Marian P. Warns and Reynaldo G. Tiangco and, hence, the latter are hereby ORDERED to pay respondent, jointly and severally, the following:

1. Backwages and all other benefits from the time compensation was withheld from respondent until the finality of this Resolution;

2. Separation pay equivalent to one (1) month pay for every year of service, with a fraction of at least six (6) months considered as one (1) whole year;

3. Moral damages in the amount of P100,000.00;

4. Exemplary damages in the amount of P100,000.00;

5. Attorney's fees equivalent to ten percent (10%) of the total monetary awards; and

6. Legal interest on the total monetary awards at six percent (6%) per annum from the date of finality of this Resolution until their full satisfaction.

The case is REMANDED to the Labor Arbiter for the computation of the amounts due respondent.

The reiterating motion to resolve, by Atty. Nenita C. Mahinay, counsel for respondent, reiterating the previous filed motions for early resolution of the case, and her notice of change of address stating that her new address is at 57A, Cordillera Street, corner N. Roxas Street, Brgy. Lourdes, Quezon City; the respondent's fifth (5th) reiterating motion for early resolution; and the letter dated March 14, 2022 of Ms. Jane G. Sabido, Chief, Archives Section, Judicial Records Division, Court of Appeals, Manila, in compliance with the Resolution dated June 16, 2021, transmitting the rollo of CA-G.R. SP No. 114205 with 1222 pages, are all NOTED; and all Court processes and notices shall be SERVED at the counsel's new address as above indicated. ASEcHI

SO ORDERED."

By authority of the Court:

(SGD.) LIBRADA C. BUENADivision Clerk of Court

By:

MARIA TERESA B. SIBULODeputy Division Clerk of Court

Footnotes

1. Rollo, pp. 8-43.

2. Id. at 44-59. Penned by Associate Justice Leoncia R. Dimagiba with Associate Justices Amelita G. Tolentino and Ricardo R. Rosario (now a Member of this Court) concurring.

3. Id. at 62-63. Penned by Associate Justice Leoncia R. Dimagiba with Associate Justices Ricardo R. Rosario and Rodil V. Zalameda (now Members of this Court) concurring.

4. Id. at 179-187. Penned by Presiding Commissioner Gerardo C. Nograles with Commissioners Perlita B. Velasco and Romeo L. Go concurring.

5. Id. at 188-189.

6. Id. at 91-128.

7. Id. at 45 and 65-71.

8. Id. at 92.

9. Id. at 87-90.

10. Id. at 73.

11. Id. at 74-75.

12. Id. at 76.

13. Id.

14. Id. at 77-79.

15. Id. at 80-82.

16. Id. at 83-86.

17. Id. at 46.

18. Id. at 93.

19. Id. at 94-95.

20. Id. at 91-128.

21. Id. at 127-128.

22. Id. at 129-174.

23. Id. at 175-178.

24. CA rollo, pp. 93-99.

25. Rollo, pp. 179-187.

26. Id. at 186-187.

27. CA rollo, pp. 62-75.

28. Rollo, pp. 188-189.

29. Id. at 190.

30. Id. at 44-59.

31. Id. at 56.

32. Id. at 58.

33. Id. at 20.

34. Pascual v. Burgos, 776 Phil. 167, 169 (2016).

35. Gatan v. Vinarao, 820 Phil. 257, 265 (2017).

36. Miro v. Vda. De Erederos, 721 Phil. 772, 785 (2013).

37. Raza v. Daikoku Electronics Phils., Inc., 765 Phil. 61, 79 (2015).

38. Concrete Solutions, Inc./Primary Structures Corporation v. Cabusas, 711 Phil. 477, 487 (2013).

39. Rollo, p. 22.

40. Id. at 23.

41. BLACK'S LAW DICTIONARY 1261 (9th edition).

42. BALLENTINE'S LAW DICTIONARY 944 (3rd edition).

43. Anama v. Court of Appeals, 466 Phil. 64, 82 (2004).

44. People v. Terrobias, 190 Phil. 1022, 1030 (1981).

45. CA rollo, p. 6.

46. Id. at 2.

47. Rollo, p. 190.

48. Id. at 188-189.

49. Beduya v. Ace Promotion and Marketing Corp., 761 Phil. 317, 328 (2015).

50. Turks Shawarma Co. v. Pajaron, 803 Phil. 315, 325 (2017).

51. 719 Phil. 680 (2013).

52. Id. at 713.

53. 683 Phil. 376 (2012).

54. 709 Phil. 756 (2013).

55. Turks Shawarma Co. v. Pajaron, supra note 50 at 328-329.

56. 596 Phil. 204 (2009).

57. Id. at 216.

58. 742 Phil. 361 (2014).

59. Id. at 375.

60. St. Paul College, Pasig v. Mancol, 824 Phil. 520, 535 (2018).

61. Diamond Taxi v. Llamas, Jr., 729 Phil. 364, 383 (2014).

62. Gan v. Galderma Philippines, Inc., 701 Phil. 612, 639 (2013).

63. Rollo, p. 73.

64. Id. at 74-75.

65. Id. at 76.

66. City Service Corp. Workers Union v. City Service Corp., 220 Phil. 239, 242 (1985).

67. Imasen Philippine Manufacturing Corp. v. Alcon, 746 Phil. 172, 178 (2014).

68. Bondoc v. People's Bank and Trust Co., 191 Phil. 182, 189 (1981).

69. SME Bank, Inc. v. De Guzman, 719 Phil. 103, 129 (2013).

70. BPI Credit Corp. v. National Labor Relations Commission, 304 Phil. 606, 616 (1994).

71. Article 297. Termination by Employer. — An employer may terminate an employee for any of the following causes:

xxx xxx xxx

 (c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative[.]

72. Casco v. National Labor Relations Commission, 826 Phil. 284, 298 (2018).

73. SM Development Corp. v. Ang, G.R. No. 220434, July 22, 2019.

74. Manarpiis v. Texan Philippines, Inc., 752 Phil. 305, 322 (2015).

75. Distribution & Control Products, Inc. v. Santos, 813 Phil. 423, 435 (2017).

76. Philippine National Construction Corp. v. Mandagan, 581 Phil. 110, 123 (2008).

77. Bravo v. Urios College, 810 Phil. 603, 621 (2017).

78. Lima Land, Inc. v. Cuevas, 635 Phil. 36, 49 (2010).

79. Philippine Savings Bank v. Genove, G.R. No. 202049, June 15, 2020.

80. Philippine National Construction Corp. v. Matias, 497 Phil. 476, 489 (2005).

81. Dongon v. Rapid Movers and Forwarders Co., Inc., 716 Phil. 533, 543 (2013).

82. CA rollo, p. 145.

83. Rollo, pp. 120-122.

84. Id. at 51.

85. Ocean East Agency, Corp. v. Lopez, 771 Phil. 179, 197 (2015).

86. Cabatulan v. Buat, 491 Phil. 421, 433 (2005).

87. Lambo v. National Labor Relations Commission, 375 Phil. 855, 865 (1999).

88. Every Nation Language Institute v. Dela Cruz, G.R. No. 225100, February 19, 2020.

89. Skyway O & M Corporation v. Reinante, G.R. No. 222233, August 28, 2019.

90. Square Meter Trading Construction v. Court of Appeals, G.R. No. 225914, January 26, 2021.

91. Santos v. National Labor Relations Commission, 238 Phil. 161, 167 (1987).

92. De Guzman v. National Labor Relations Commission, 564 Phil. 600, 616 (2007).

93. Jerzon Manpower and Trading, Inc. v. Nato, G.R. No. 230211, October 6, 2021.

94. Cruz v. National Labor Relations Commission, 381 Phil. 775, 790 (2000).

95. SPI Technologies, Inc. v. Mapua, 731 Phil. 480, 500 (2014).

96. Pursuant to Bayview Management Consultants, Inc. v. Pre, G.R. No. 220170, August 19, 2020, which affirmed the CA's award of damages.

97. Montinola v. Philippine Airlines, 742 Phil. 487, 511-512 (2014).

98. Nacar v. Gallery Frames, 716 Phil. 267 (2013).

99. 383 Phil. 329 (2000).

100. Mandaue Dinghow Dimsum House, Co., Inc. v. National Labor Relations Commission, 571 Phil. 108, 121 (2008).

101. Wensha Spa Center v. Yung, 642 Phil. 460, 475 (2010).

102. Rollo, pp. 125-127.

103. CA rollo, pp. 109-134.

104. Id. at 245-251.

105. Id. at 287-299.

106. Id. at 153.