The Issue
WHETHER OR NOT THE DISMISSAL OF GENUINO IS FOR A JUST CAUSE AND IN ACCORDANCE WITH DUE PROCESS
In 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.
The dismissal was for just cause but lacked due process
We affirm that Genuino was dismissed for just cause but without the observance of due process.
In a string of cases, [22] we have repeatedly said that the requirement of twin notices must be met. In the recent case of King of Kings Transport, Inc. v. Mamac, we explained:
To clarify, the following should be considered in terminating the services of employees:
(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.[23]
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.â€[24]
We agree with the CA that the dismissal was valid and legal, and with its modification of the NLRC ruling that PhP 5,000 is due Genuino for failure of Citibank to observe due process.
The Implementing Rules and Regulations of the Labor Code provide that any employer seeking to dismiss a worker shall furnish the latter a written notice stating the particular acts or omissions constituting the grounds for dismissal.[25] The purpose of this notice is to sufficiently apprise the employee of the acts complained of and enable him/her to prepare his/her defense.
In this case, the letters dated August 23, September 13 and 20, 1993 sent by Citibank did not identify the particular acts or omissions allegedly committed by Genuino. The August 23, 1993 letter charged Genuino with having “some knowledge and/or involvement†in some transactions “which have the appearance of being irregular at the least and may even be fraudulent.†The September 13, 1993 letter, on the other hand, mentioned “irregular transactions†involving Global Pacific and/or Citibank and 12 bank clients. Lastly, the September 20, 1993 letter stated that Genuino 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 [sic].†The extent of Genuino’s alleged knowledge and participation in the diversion of bank’s clients’ funds, manner of diversion, and amounts involved; the acts attributed to Genuino that conflicted with the bank’s interests; and the circumstances surrounding the alleged irregular transactions, were not specified in the notices/letters.
While the bank gave Genuino an opportunity to deny the truth of the allegations in writing and participate in the administrative investigation, the fact remains that the charges were too general to enable Genuino to intelligently and adequately prepare her defense.
The two-notice requirement of the Labor Code is an essential part of due process. The first notice informing the employee of the charges should neither be pro-forma nor vague. It should set out clearly what the employee is being held liable for. The employee should be afforded ample opportunity to be heard and not mere opportunity. As explained in King of Kings Transport, Inc., ample opportunity to be heard is especially accorded the employees sought to be dismissed after they are specifically informed of the charges in order to give them an opportunity to refute such accusations leveled against them. Since the notice of charges given to Genuino is inadequate, the dismissal could not be in accordance with due process.
While we hold that Citibank failed to observe procedural due process, we nevertheless find Genuino’s dismissal justified.
Citibank maintains that Genuino was aware of the bank’s Corporate Policy Manual specifically Chapter 3 on “Principles and Policies†with regard to avoiding conflicts of interest. She had even submitted a Conflict of Interest Survey to Citibank. In that survey, she denied any knowledge of engaging in transactions in conflict with Citibank’s interests. Citibank, for its part, submitted evidence showing 99% ownership of Global stocks by Genuino and Santos. In July 1993, Citibank discovered that Genuino and Santos were instrumental in the withdrawal by bank depositors of PhP 120 million of investments in Citibank. This amount was subsequently invested in another foreign bank, Internationale Nederlanden Bank, N.V., under the control of Global and Torrance, another corporation controlled by Genuino and Santos. [26] Citibank also filed two criminal complaints against Genuino and Santos for violations of the conflict of interest rule provided in Sec. 31 in relation to Sec. 144[27] of the Corporation Code.[28]
We note also that during the proceedings before the Labor Arbiter, Citibank presented the following affidavits, with supporting documentary evidence against Genuino:
1) Vic Lim, an officer of Citibank who investigated the anomalies of Genuino and Santos, concluded that Genuino and Santos realized substantial financial gains out of the transfer of monies as supported by the following documents:
1)
Some 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)
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)
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)
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)
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.[29]
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.[30]
2) Marilyn Bautista, a Treasury Sales Specialist in the Treasury Department of the Global Consumer Bank of Citibank and whose superiors were Genuino and Santos, stated that:
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.[31]
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.[32]
In her defense, Genuino asserts that Citibank has no evidence of any wrongful act or omission imputable to her. According to her, she did not try to conceal from the bank her participation in Global and she even disclosed the information when Global designated Citibank as its depositary. She avers there was no conflict of interest because Global was not engaged in Citibank’s accepting deposits and granting loans, nor in money placement activities that compete with Citibank’s activities; and neither does Citibank invest in the outlets used by Global. She claims that the controversy between Santos and Global had already been amicably resolved in a Compromise Agreement between the two parties.[33]
Genuino further asserts that the letter of termination did not indicate what existing company policy had been violated, and what acts constituted serious misconduct or willful breach of the trust reposed by the bank. She claims that Lim’s testimony that the checks issued by Global in her name were profits was malicious, hearsay, and lacked factual basis. She also posits that as to the withdrawals of clients, she could not possibly dictate on the depositors. She pointed out that the depositors even sent Citibank a letter dated August 25, 1993 informing the bank that the withdrawals were made upon their express instructions. Genuino avers the bank’s loss of confidence should have to be proven by substantial evidence, setting out the facts upon which loss of confidence in the employee may be made to rest.[34]
Contrary to the Labor Arbiter’s finding, the NLRC found the following facts supported by the records:
a)
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.
b)
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.
d)
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.
e)
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.
Linkback: https://tubagbohol.mikeligalig.com/index.php?topic=55604.0
