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Equitable PCI Bank v.

Caguioa
G.R. No. 159170 Aug 12, 2005 J. Panganiban
petitioners Equitable PCI Bank and Wilfredo Vergara
respondents Generosa Caguioa
summary Gene was involved in unauthorized check discounting schemes which lead to a clients
prejudice who in turn filed a complaint. Gene was found guilty of violating petitioners
code of conduct and was dismissed with forfeiture of retirement benefits. The SC held, in
light of the substantial evidence petitioner presented, that the dismissal was valid as well
as the forfeiture of her retirement benefits.

facts of the case


Gene was a Senior Manager employed by petitioner for 35 years who was subsequently dismissed because
of her participation in an unauthorized check discounting scheme. This was brought to light because of the
complaint of their client Antonio Jarina regarding the same which cost him considerable damage. The scheme
was that Jarina would withdraw his funds and invest them in a new investment involving discounted checks
facilitated by Gene. In the end, petitioner found Gene guilty of violating its Code of Conduct, warranting her
dismissal from service and termination of employment under 282c LC. Her penalty was dismissal with
AUTOMATIC FORFEITURE OF RETIREMENT BENEFITS.
LA: Gene was validly dismissed, as an exercise of management prerogative because of her violations of
petioners code of conduct,
NLRC: Reversed LA decision, and ruled Genes reinstatement without loss of seniority rights.
CA: Gene was illegally dismissed. The revelations made by Magadia were insufficient to justify Genes
dismissal. The CA held them to be hearsay evidence because of petitioners failure to produce Magadias
sworn statement.

issue
WON Genes dismissal was valid and for cause? YES.

ratio
The Court found it necessary to reexamine the evidence in light of conflicting resolutions among the LA,
NLRC and CA, and in order to afford petitioner its due process rights.
As employer, the burden of proof rests on petitioner to establish that the dismissal was valid. However, he
only needs to adduce substantial evidence, that is, such evidence that a reasonable mind might accept as
adequate to support a conclusion. From the records, such substantial evidence were:
1. A letter identifying Gene as one of the bank personnel who used his deposit/funds in another kind of investment that would
result in a higher yield.
2. The affidavit of Jose Sibayan, an audit examiner tasked to investigate the complaint, making mention of certain documents that
helped him in his investigation and how he acquired them.
3. A schedule based on the bank records that shows deposits to Genes account was made on the same date as Mr. Jarinas account
and reflects the 60-40 profit sharing arrangement in an unauthorized check discounting transactions.
4. A letter showing that as early as Sept 26, Gene was already involved in the unauthorized check discounting transactions.
5. Another letter stating expressing goodwill by sending Atty Mosclares P200,000 and hoping that her relationship with Atty
Mosclares would not be affected by their problem with Nora.
Her only defense against these pieces of evidence were denial, inadmissibility and lack of probative value
of such evidence and a claim that she had a ready to wear business with her relative as stated by an affidavit.
The Court held that the evidence presented by petitioner substantially proved Genes participation in the
unauthorized check-discounting transactions. Petitioner admits, at the very least, that the match between
Genes bank records and some entries in Jarinas ledger as coincidental but not all 21 instances. The letters
gave her away, as it served as a jumping off point for a deeper investigation and a patient auditor would
surely match the petitioners conclusion from the paper trail left.
The Court here held that Genes plea for leniency because of her 35 years of service has already been
compensated and it still cannot offset her dishonesty. The Court comments that even government employees
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who are validly dismissed from service by reason of timely discovered offenses are deprived of retirement
benefits. She cannot be afforded the same treatment as those who are loyal and code-abiding employees as it
would demoralize the entire bank. Be it remembered that banks thrive on and endeavor to retain public trust
and confidence, every violation of which must thus be accompanied by appropriate sanctions. Since Gene was a
managerial employee, she may be dismissed for breach of trust and it is a valid exercise of management prerogative
to dismiss someone who is found to have failed to meet the employers trust and confidence.

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