564 Phil. 315
VELASCO JR., J.:
On September 13, 1993, Citibank, through Victorino P. Vargas, its Country Senior Human Resources Officer, sent a letter to Genuino, the relevant portions of which read:
- Confront our client with the factual and legal basis of your charges, and afford her an opportunity to explain;
- Substantiate your charge of fraudulent transactions against our client; or if the same cannot be substantiated;
- Correct/repair/compensate the damage you have caused our client.
As you are well aware, the bank served you a letter dated August 23, 1993 advising you that ongoing investigations show that you are involved and/or know of irregular transactions which are at the very least in conflict with the bank’s interest, and, may even be fraudulent in nature.Genuino’s counsel replied through a letter dated September 17, 1993, demanding for a bill of particulars regarding the charges against Genuino. Citibank’s counsel replied on September 20, 1993, as follows:
These transactions are those involving Global Pacific and/or Citibank and the following bank clients, among others:
In view of the foregoing, you are hereby directed to explain in writing three (3) days from your receipt hereof why your employment should not be terminated in view of your involvement in these irregular transactions. You are also directed to appear in an administrative investigation of the matter which is set on Tuesday, Sept. 21, 1993 at 2:00 P.M. at the HR Conference Room, 6th Floor, Citibank Center. You may bring your counsel if you so desire.
- Norma T. de Jesus
- Carmen Intengan/Romeo Neri
- Mario Mamon
- Vienna Ochoa/IETI
- William Samara
- Roberto Estandarte
- Rita Browner
- Ma. Redencion Sumpaico
- Cesar Bautista
- Teddy Keng
- Olivia Sy
1.2. [T]he bank has no intention of converting the administrative investigation of this case to a full blown trial. What it is prepared to do is give your client, as required by law and Supreme Court decisions, an opportunity to explain her side on the issue of whether she violated the conflict of interest rule—either in writing (which could be in the form of a letter-reply to the September 13, 1993 letter to Citibank, N.A.) or in person, in the administrative investigation which is set for tomorrow afternoon vis-à-vis the bank clients/parties mentioned in the letter of Citibank, N.A.Genuino did not appear in the administrative investigation held on September 21, 1993. Her lawyers wrote a letter to Citibank’s counsel asking “what bank clients’ funds were diverted from the bank and invested in other companies, the specific amounts involved, the manner by which and the date when such diversions were purportedly affected.” In reply, Citibank’s counsel noted Genuino’s failure to appear in the investigation and gave Genuino up to September 23, 1993 to submit her written explanation. Genuino did not submit her written explanation.
x x x x
2.2. You will certainly not deny that we have already fully discussed with you what is meant by the conflict with the bank’s interest vis-à-vis the bank clients/parties named in the September 13, 1993 letter of Citibank to Ms. Genuino. As we have repeatedly explained to you, what the bank meant by it is that your client and Mr. Dante Santos, using the facilities of their family corporations (Torrance and Global) appear to have participated in the diversion of bank clients’ funds from Citibank to, and investment thereof in, other companies and that they made money in the process, in violation of the conflict of law rule. It is her side of this issue that Citibank, N.A. is waiting to receive/hear from Ms. Genuino.
WHEREFORE, finding the dismissal of the complainant Marilou S. Genuino to be without just cause and in violation of her right to due process, respondent CITIBANK, N.A., and any and all persons acting on its behalf or by or under their authority are hereby ordered to reinstate complainant immediately to her former position as Treasury Sales Division Head or its equivalent without loss of seniority rights and other benefits, with backwages from August 23, 1993 up to April 30, 1994 in the amount of P493,800.00 (P60,000 x 8.23 mos.) subject to adjustment until reinstated actually or in the payroll.Both parties appealed to the NLRC. The NLRC, in its September 3, 1994 Decision in NLRC-NCR Case No. 00-10-06450-93 (CA No. 006947-94), reversed the Labor Arbiter’s decision with the following modification:
Respondents are likewise ordered to pay complainant the amount of 1.5 Million Pesos and P500,000.00 by way of moral and exemplary damages plus 10% of the total monetary award as attorney’s fees.
WHEREFORE, Judgment is hereby rendered (1) SETTING ASIDE the appealed decision of the Labor Arbiter; (2) DECLARING the dismissal of the complainant valid and legal on the ground of serious misconduct and breach of trust and confidence and consequently DISMISSING the complaint a quo; but (3) ORDERING the respondent bank to pay the salaries due to the complainant from the date it reinstated complainant in the payroll (computed at P60,000.00 a month, as found by the Labor Arbiter) up to and until the date of this decision.The parties’ motions for reconsideration were denied by the NLRC in a resolution dated October 28, 1994.
WHEREFORE, save for the MODIFICATION ordering Citibank, N.A. to pay Ms. Marilou S. Genuino five thousand pesos (P5,000.00) as indemnity for non-observance of due process in CA-G.R. SP No. 51532, this Court’s 30 September 1999 decision is REITERATED and AFFIRMED in all other respects.Hence, we have this petition.
WHETHER OR NOT THE DISMISSAL OF GENUINO IS FOR A JUST CAUSE AND IN ACCORDANCE WITH DUE PROCESSIn G.R. Nos. 142732-33, Genuino contends that Citibank failed to observe procedural due process in terminating her employment. This failure is allegedly an indication that there were no valid grounds in dismissing her. In G.R. Nos. 142753-54, Citibank questions the ruling that Genuino has a right to reinstatement under Article 223 of the Labor Code. Citibank contends that the Labor Arbiter’s finding is not supported by evidence; thus, the decision is void. Since a void decision cannot give rise to any rights, Citibank opines that there can be no right to payroll reinstatement.
To clarify, the following should be considered in terminating the services of employees:The Labor Arbiter found that Citibank failed to adequately notify Genuino of the charges against her. On the contrary, the NLRC held that “the function of a ‘notice to explain’ is only to state the basic facts of the employer’s charges, which x x x the letters of September 13 and 17, 1993 in question have fully served.”
(1) The first written notice to be served on the employees should contain the specific causes or grounds for termination against them, and a directive that the employees are given the opportunity to submit their written explanation within a reasonable period. “Reasonable opportunity” under the Omnibus Rules means every kind of assistance that management must accord to the employees to enable them to prepare adequately for their defense. This should be construed as a period of at least five (5) calendar days from receipt of the notice to give the employees an opportunity to study the accusation against them, consult a union official or lawyer, gather data and evidence, and decide on the defenses they will raise against the complaint. Moreover, in order to enable the employees to intelligently prepare their explanation and defenses, the notice should contain a detailed narration of the facts and circumstances that will serve as basis for the charge against the employees. A general description of the charge will not suffice. Lastly, the notice should specifically mention which company rules, if any, are violated and/or which among the grounds under Art. 282 is being charged against the employees.
(2) After serving the first notice, the employers should schedule and conduct a hearing or conference wherein the employees will be given the opportunity to: (1) explain and clarify their defenses to the charge against them; (2) present evidence in support of their defenses; and (3) rebut the evidence presented against them by the management. During the hearing or conference, the employees are given the chance to defend themselves personally, with the assistance of a representative or counsel of their choice. Moreover, this conference or hearing could be used by the parties as an opportunity to come to an amicable settlement.
(3) After determining that termination of employment is justified, the employers shall serve the employees a written notice of termination indicating that: (1) all circumstances involving the charge against the employees have been considered; and (2) grounds have been established to justify the severance of their employment.
In Lim’s Reply-Affidavit with attached supporting documents, he stated that out of the competing money placement activities, Genuino and Santos derived financial gains amounting to PhP 2,027,098.08 and PhP 2,134,863.80, respectively.
1) [S]ome of the Term Investment Applications (TIA), Applications for Money Transfer, all filled up in the handwriting of Ms. Marilou Genuino. These documents cover/show the transfer of the monies of the Citibank clients from their money placements/deposits with Citibank, N.A. to Global and/or Torrance. 2) [S]ome of the checks that were drawn by Global and Torrance against their Citibank accounts in favor of the other companies by which Global and Torrance transferred the monies of the bank clients to the other companies. 3) [S]ome of the checks drawn by the other companies in favor of Global or Torrance by which the other companies remitted back to Global and/or Torrance the monies of the bank clients concerned. 4) [S]ome of the checks drawn by Global and Torrance against their Citibank accounts in favor of Mr. Dante Santos and Ms. Marilou Genuino, covering the shares of the latter in the spreads or margins Global and Torrance had derived from the investments of the monies of the Citibank clients in the other companies. 5) [S]ome of the checks drawn by Torrance and Global in favor of Citibank clients by which Global and Torrance remitted back to said bank clients their principal investments (or portions thereof) and the rates of interests realized from their investment placed with the other companies less the spreads made by Global and/or Torrance, Mr. Dante L. Santos and Ms. Marilou Genuino.
Based on documents that have subsequently come to my knowledge, I realized that the two (Genuino and Dante L. Santos), with the active cooperation of Redencion Sumpaico (the Accountant of Global) had … brokered for their own benefits and/or of Global the sale of the financial products of Citibank called “Mortgage Backed Securities” or MBS and in the process made money at the expense of the (Citibank) investors and the bank.3) Patrick Cheng attested to other transactions from which Genuino, Santos, and Global brokered the Mortgage Backed Securities (MBS), namely: ICC/Nemesio and Olivia Sy transaction, San Miguel Corporation/ICC, CIPI/Asiatrust, FAPE, PERAA and Union Bank, and NDC-Guthrie transactions.
Respondent bank has a conflict of interest rule, embodied in Chapter 3 of its Corporate Policy Manual, prohibiting the officers of the bank from engaging in business activities, situations or circumstances that are in conflict with the interest of the bank.
Complainant was familiar with said conflict of interest rule of the bank and of her duty to disclose to the bank in writing any personal circumstances which conflicts or appears to be in conflict with Citibank’s interest.
|c) || |
Complainant is a substantial stockholder of Global Pacific, but she did not disclose fact to the bank.
Global Pacific is engaged in money placement business like Citibank, N.A.; that in carrying out its said money placement business, it used funds belonging to Citibank clients which were withdrawn from Citibank with participation of complainant and Dante L. Santos. In one transaction of this nature, P120,000,000.00 belonging to Citibank clients was withdrawn from Citibank, N.A. and placed in another foreign bank, under the control of Global Pacific. Said big investment money was returned to Citibank, N.A. only when Citibank, N.A. filed an injunction suit.
Global Pacific also engaged in the brokering of the ABS or MBS, another financial product of Citibank. It was the duty of complainant Genuino and Dante L. Santos to sell said product on behalf of Citibank, N.A. and for Citibank N.A.’s benefit. In the brokering of the ABS or MBS, Global Pacific made substantial profits which otherwise would have gone to Citibank, N.A. if only they brokered the ABS or MBS for and on behalf of Citibank, N.A.
[L]oss of confidence is a valid ground for dismissing an employee and proof beyond reasonable doubt of the employee’s misconduct is not required. It is sufficient if there is some basis for such loss of confidence or if the employer has reasonable ground to believe or to entertain the moral conviction that the employee concerned is responsible for the misconduct and that the nature of his participation therein rendered him unworthy of the trust and confidence demanded by his position.As Assistant Vice-President of Citibank’s Treasury Department, Genuino was tasked to solicit investments, and peso and dollar deposits for, and keep them in Citibank; and to sell and/or push for the sale of Citibank’s financial products, such as the MBS, for the account and benefit of Citibank. She held a position of trust and confidence. There is no way she could deny any knowledge of the bank’s policies nor her understanding of these policies as reflected in the survey done by the bank. She could not likewise feign ignorance of the businesses of Citibank, and of Global and Torrance. Assuming that Citibank did not engage in the same securities dealt with by Global and Torrance; nevertheless, it is to the interests of Citibank to retain its clients and continue investing in Citibank. Curiously, Genuino did not even dissuade the depositors from withdrawing their monies from Citibank, and was even instrumental in the transfers of monies from Citibank to a competing bank through Global and Torrance, the corporations under Genuino’s control.
All told, Citibank had valid grounds to dismiss Genuino on ground of loss of confidence.
- Contrary to the allegations of Mr. Lim in par. 6.1 up to 8.1 concerning the alleged scheme employed in the questioned transactions, insinuating an “in” and “out” movement of funds of the seven (7) depositors, the truth is that after said “depositors” instructed/authorized us to effect the withdrawal of their respective monies from Citibank to attain the common goal of higher yields utilizing Global as the vehicle for bulk purchases of securities or papers not dealt with/offered by Citibank, said pooled investment remained with Global, and were managed through Global for over a year until the controversy arose;
- The seven (7) “depositors” mentioned in Mr. Lim’s Affidavits are the long-time friends of affiant Genuino who had formed a loosely constituted investment group for purposes of realizing higher yields derivable from pooled investments, and as the advisor of the group she had in effect chosen Citibank as the initial repository of their respective monies prior to the implementation of plans for pooled investments under Global. Hence, she had known and dealt with said “depositors” before they became substantial depositors of Citibank. She did not come across them because of Citibank. (Emphasis supplied.)
The violation of the petitioners’ right to statutory due process by the private respondent warrants the payment of indemnity in the form of nominal damages. The amount of such damages is addressed to the sound discretion of the court, taking into account the relevant circumstances. Considering the prevailing circumstances in the case at bar, we deem it proper to fix it at P30,000.00. We believe this form of damages would serve to deter employers from future violations of the statutory due process rights of employees. At the very least, it provides a vindication or recognition of this fundamental right granted to the latter under the Labor Code and its Implementing Rules.Thus, the award of PhP 5,000 to Genuino as indemnity for non-observance of due process under the CA’s March 31, 2000 Resolution in CA-G.R. SP No. 51532 is increased to PhP 30,000.
In any event, the decision of the Labor Arbiter reinstating a dismissed or separated employee, insofar as the reinstatement aspect is concerned, shall immediately be executory, even pending appeal. The employee shall either be admitted back to work under the same terms and conditions prevailing prior to his dismissal or separation or, at the option of the employer, merely reinstated in the payroll. The posting of a bond by the employer shall not stay the execution for reinstatement provided herein.If the decision of the labor arbiter is later reversed on appeal upon the finding that the ground for dismissal is valid, then the employer has the right to require the dismissed employee on payroll reinstatement to refund the salaries s/he received while the case was pending appeal, or it can be deducted from the accrued benefits that the dismissed employee was entitled to receive from his/her employer under existing laws, collective bargaining agreement provisions, and company practices. However, if the employee was reinstated to work during the pendency of the appeal, then the employee is entitled to the compensation received for actual services rendered without need of refund.
WHEREFORE, Judgment is hereby rendered (1) SETTING ASIDE the appealed decision of the Labor Arbiter; (2) DECLARING the dismissal of the complainant valid and legal on the ground of serious misconduct and breach of trust and confidence and consequently DISMISSING the complaint a quo; but (3) ORDERING the respondent bank to pay the complainant nominal damages in the amount of PhP 30,000.SO ORDERED.