In Manese v. Jollibee Foods Corporation, the Supreme Court affirmed the right of employers to terminate managerial employees based on loss of trust and confidence, even if the grounds for dismissal might be considered minor for regular employees. The court emphasized that managerial positions require a high degree of trust, and breaches of that trust can justify termination. However, the Court also reiterated that managerial employees enjoy security of tenure and that the loss of trust and confidence must be based on substantial evidence.

Chickenjoy Crisis: When Managerial Missteps Lead to Termination at Jollibee

The case revolves around Cecilia T. Manese, Julietes E. Cruz, and Eufemio Peñano II, former employees of Jollibee Foods Corporation. Manese was a First Assistant Store Manager Trainee, Cruz was a Second Assistant Store Manager, and Peñano was a Shift Manager. All three were involved in the opening of a new Jollibee branch and faced termination due to issues concerning a large quantity of Chickenjoy rejects. The central question is whether Jollibee had sufficient grounds to terminate these managerial employees for loss of trust and confidence, considering the specific circumstances and their respective roles.

The events leading to the termination began with a large delivery of Chickenjoy in preparation for the new store opening. Due to postponements, a significant amount of Chickenjoy was not sold within its shelf life. Petitioners then attempted to manage the situation, including trying to return the rejects to the commissary. However, the commissary refused the rejects, and the employees did not properly dispose of the Chickenjoy. This led to an audit revealing a substantial number of rejects, prompting Jollibee to issue charge sheets to the employees, ultimately resulting in their termination due to alleged gross negligence and loss of trust and confidence.

The Labor Arbiter initially ruled that Cruz was illegally dismissed but awarded separation pay. Manese and Peñano’s complaints were dismissed. The NLRC affirmed the Labor Arbiter’s decision in toto, even while disagreeing with the illegal dismissal ruling. The Court of Appeals affirmed the NLRC’s resolutions with modifications, declaring Cruz legally dismissed and ordering Jollibee to pay Manese’s unpaid salary, sick leave, and cooperative savings. Manese and Peñano filed the petition to the Supreme Court.

The Supreme Court addressed the procedural issue of whether the Court of Appeals exceeded its jurisdiction in dismissing Cruz, given that Jollibee did not file a timely appeal of the Labor Arbiter’s initial ruling that her dismissal was illegal. The Court cited SMI Fish Industries, Inc. v. NLRC, which stated:

It is a well-settled procedural rule in this jurisdiction, and we see no reason why it should not apply in this case, that an appellee who has not himself appealed cannot obtain from the appellate court any affirmative relief other than those granted in the decision of the court below. The appellee can only advance any argument that he may deem necessary to defeat the appellant’s claim or to uphold the decision that is being disputed. He can assign errors on appeal if such is required to strengthen the views expressed by the court a quo. Such assigned errors, in turn, may be considered by the appellate court solely to maintain the appealed decision on other grounds, but not for the purpose of modifying the judgment in the appellee’s favor and giving him other affirmative reliefs.

Applying this principle, the Court held that because Jollibee failed to appeal the Labor Arbiter’s decision regarding Cruz, the Court of Appeals erred in reversing it. The decision on Cruz’s illegal dismissal had become final and executory. Despite this procedural victory for Cruz, the Court upheld the dismissal of Manese and Peñano.

The Court then tackled the substantive issue of whether the dismissal of Manese and Peñano was justified. Petitioners argued that the favorable store audit negated the charge of loss of trust and confidence. However, the Court reiterated that managerial employees hold positions of great responsibility and trust, and a breach of that trust can justify dismissal. The Court emphasized that the standard for dismissing managerial employees is less stringent than that for regular employees. While the right of management to dismiss must be balanced against the managerial employee’s right to security of tenure, substantial evidence supported the loss of trust and confidence in Manese and Peñano.

The Court cited Philippine Long Distance Telephone Company v. Tolentino, emphasizing that:

when an employee accepts a promotion to a managerial position or to an office requiring full trust and confidence, such employee gives up some of the rigid guaranties available to ordinary workers. Infractions, which if committed by others would be overlooked or condoned or penalties mitigated, may be visited with more severe disciplinary action.

The Court further elaborated that proof beyond reasonable doubt is not required, provided there is a valid reason for the loss of trust and confidence. This standard acknowledges the unique demands and responsibilities placed upon managerial employees.

While upholding the dismissal, the Supreme Court addressed the monetary claims of Manese. The Court agreed with the Court of Appeals that Jollibee should pay Manese her unpaid salary, sick leave, and cooperative savings. The Court also ruled that Manese’s unpaid balance on her car loan could not be offset against the monetary benefits due to her. This ruling was grounded in the principle established in Nestlé Philippines, Inc. v. NLRC, which differentiates between labor disputes and civil disputes arising from debtor-creditor relations.

The Court explained that the car loan was a separate civil obligation. Therefore, Jollibee’s recourse was to file a civil case for the payment of the balance or the return of the car, not to withhold Manese’s earned benefits. The separation of these issues underscores the importance of respecting an employee’s earned benefits, even when other financial obligations exist.

FAQs

What was the key issue in this case?	The key issue was whether Jollibee had sufficient grounds to terminate its managerial employees, Manese and Peñano, for loss of trust and confidence due to their handling of a large quantity of Chickenjoy rejects. The case also addressed the procedural issue of whether the Court of Appeals erred in ruling on the dismissal of Cruz, given that Jollibee did not appeal the initial Labor Arbiter decision.
What does loss of trust and confidence mean in the context of employment?	Loss of trust and confidence, as a ground for termination, generally applies to employees occupying positions of responsibility, such as managerial roles. It means the employer has lost faith in the employee’s ability to perform their job duties honestly and effectively.
Why are the standards for terminating managerial employees different?	Managerial employees hold positions that require a higher degree of trust and discretion. Therefore, the standards for their dismissal are less stringent than those for regular employees, as a breach of trust can have more significant consequences for the employer.
What evidence is needed to justify termination based on loss of trust and confidence?	The employer must present substantial evidence to demonstrate a valid reason for the loss of trust and confidence. This evidence does not need to prove the employee’s misconduct beyond a reasonable doubt but must provide a reasonable basis for the employer’s belief.
Can an employer offset an employee’s debt against their earned benefits?	Generally, no. The Supreme Court has ruled that debts arising from separate transactions, such as car loans, cannot be offset against an employee’s earned benefits, such as unpaid salary or sick leave. The employer must pursue a separate civil action to recover the debt.
What was the outcome for Julietes Cruz in this case?	The Supreme Court upheld the Labor Arbiter’s decision that Cruz was illegally dismissed because Jollibee failed to file a timely appeal of that decision. The Court ordered Jollibee to pay her separation pay.
What is separation pay, and when is it awarded?	Separation pay is a monetary benefit awarded to employees who are terminated for authorized causes or, in some cases, when there is a strained relationship between the employer and employee. It is typically calculated based on the employee’s length of service.
What is the significance of the SMI Fish Industries, Inc. v. NLRC case in this decision?	SMI Fish Industries, Inc. v. NLRC established the principle that an appellee who has not appealed cannot obtain affirmative relief from the appellate court beyond what was granted in the lower court’s decision. This principle was crucial in determining the outcome for Julietes Cruz.

This case clarifies the balance between an employer’s right to manage its business and a managerial employee’s right to security of tenure. While employers have the right to terminate employees for breaches of trust, they must do so with substantial evidence and respect for the employee’s earned benefits. The decision also reinforces the importance of following procedural rules in labor disputes.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Cecilia T. Manese, et al. vs. Jollibee Foods Corporation, et al., G.R. No. 170454, October 11, 2012