Dennis Sy would have rendered 30 years of service by 18 August 1999 under the bank’s retirement plan, which states that an employee must retire upon reaching the age of 55 years or after rendering 30 years of service, whichever comes earlier. However, on 5 February 1999, the bank reappointed him as branch manager for a term of one year with corresponding salary increment.
On 10 November 1999, the bank released the results of the audit conducted in its Bajada branch where Sy was the branch manager. On 15 November 1999, Sy tendered an irrevocable letter of retirement requesting the timely release of his retirement pay and other benefits. The bank denied his request averring that Sy allowed spouses Gorgonio and Elizabeth Ong to conduct kiting activities (drawing of checks against uncollected funds) in their account with the bank. Accordingly, the bank placed Sy under preventive suspension and gave him 48 hours to submit a written explanation.
In response, Sy explained that he merely made a wrong credit judgment. Not satisfied with his reply, the bank notified Sy of other alleged violations of company policies (unauthorized grant of accommodation to accounts engaged in kiting activities, among others). Sy refuted the other allegations, but the bank, feeling unconvinced, dismissed Sy on 15 December 1999.
Sy filed against the bank a complaint for illegal suspension, illegal dismissal and money claims. However, the Labor Arbiter dismissed the case for lack of merit. On appeal, the NLRC deemed Sy compulsory retired awarding him retirement benefits, unpaid salary, monetary value of unused leave credits, 13th month pay, Christmas bonus, and refund of provident fund. The bank elevated the matter to the Court of Appeals, which set aside the ruling of NLRC and reinstated the decision of the Labor Arbiter. Upon motion for reconsideration, however, the appellate court modified its ruling and ordered the bank to reimburse Sy’s contribution to the provident fund. Feeling aggrieved, Sy brought the matter to the Supreme Court, which denied the petition and affirmed the decision of the Court of Appeals. The issues are:
1) Was Sy illegally terminated?
Sy was validly dismissed on the ground of fraud and willful breach of trust under Article 282 of the Labor Code. Records reveal that as a bank manager, he authorized kiting activities in wanton violation of bank’s policies. Sy’s conduct betrays his culpability. Shortly after the audit, he tendered an irrevocable letter of retirement. Sy’s evident failure to offer any reasonable excuse for such sudden shift in his plans is prejudicial to his cause. His premise that he could no longer be dismissed by the bank after having been compulsorily retired is absurd. Indeed, he would have qualified for retirement, however, he opted to accept the bank’s offer of extending his employment for another year. Thus, in effect, he had never retired. Unfortunately for him, while serving such extended term, he committed an act which is a clear breach of trust reposed in him by the bank. He cannot now elude dismissal for a just cause by claiming he was already retired compulsorily.
2) Is Sy nevertheless entitled to retirement benefits?
Under the Labor Code, only unjustly dismissed employees are entitled to retirement benefits and other privileges including reinstatement and back wages. Since Sy’s dismissal was for a just cause, he is not entitled to any retirement benefit. To hold otherwise would be to reward acts of willful breach of trust by the employee. It would also open the floodgate to potential anomalous banking transactions by the bank employees whose employments have been extended. Since the bank’s operation is essentially imbued with public interest, it owes great fidelity to the public it deals with. In turn, it cannot be compelled to continue in its employ a person in whom it has lost trust and confidence and whose continued employment would patently be inimical to the bank’s interest. While the scale of justice is tilted in favor of workers, the law does not authorize blind submission to the claim of labor regardless of merit.
Full text of the case: Sy vs. Metrobank.
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