Sy v.

Metropolitan Bank & Trust Company

G.R. No. 160618 – November 2, 2006
J. Quisumbing

Topic: Retirement – Forfeiture of Benefits

Doctrine: Only unjustly dismissed employees are entitled to retirement benefits and other privileges
including reinstatement and backwages.

Petitioners: Dennis D. Sy
Respondents: Metropolitan Bank & Trust Company

Summary: Dennis Sy was about to reach his 30th year of service and will have been eligible for
retirement, however, he was offered a 1-year extension to his contract. Upon extension, the bank had an
audit which revealed some anomalies on the part of Sy. Sy tried to tender his resignation with a request
for his retirement pay and unclaimed benefits, however, the bank denied this. After investigations and
hearings, Sy was terminated. The SC held that the dismissal was valid because the bank had lost trust in
him after his company violations, in addition to the fact that he is in a position of trust; a managerial
employee. Because he was validly terminated, the SC also stated that only unjustly dismissed employees
are entitled to retirement benefits and other privileges including reinstatement and backwages. Because
of the circumstances of the case, Sy was NOT entitled to the retirement benefits and other privileges he
was requesting for.

FACTS:
 Dennis Sy was the branch manager of Metrobank in Bajada Davao City
o Under the bank’s retirement plan, an EE must retire upon reaching the age of 55 years or
after rendering 30 years of service (whichever comes first)
o On August 18, 1999 Sy would have rendered 30 years of service
 February 5, 1999: 6 months before his 30th year, he was reappointed as branch manager for a term of
one year starting August 18, 1999-August 18, 2000
o He accepted, and his monthly compensation was raised from P50,400 to P54,000
 November 10, 1999: audit results were released by the bank
 November 15, 1999: Sy tendered an irrevocable letter of retirement; he stated that he was requesting
the timely release of his retirement pay and other benefits  this request was DENIED
o The bank alleged that Sy had conducted “kiting”1 activities for Spouses Ong
 Approving DBP accommodations beyond allowable limit, releasing loans
without Head Office approval, ignoring previous warnings to discontinue
granting such loans, etc.
o The bank placed Sy under preventive suspension and gave him 48 hours to submit a
written explanation
 Sy merely wrote a letter explaining he made a wrong credit judgment
 Metrobank not satisfied with his answer, they also brought up other violations of
Sy:
 Granting of DBP-Clean accommodations totaling (9.11M) to Sps.
Aquino – patent abuse of authority as Sy had knowledge that the branch
he was working for had their lending authority suspended at that time
 Allowed more kiting activities through his branch for his relatives
o Sy explained that the accommodation he granted was only for P650k, not P9.11M
 December 15, 199: Sy was terminated
o Filed a complaint for illegal suspension, illegal dismissal, and money claims
 LA: dismissed case for lack of merit
 NLRC: deemed Sy compulsory retired; thus, awarded retirement benefits, unpaid salary, etc.

1
Check kiting – a form of check fraud, involving taking advantage of the float to make use of non-existent funds in
a checking or other bank account.
 CA: Reinstated the LA decision

ISSUES + HELD:
1. W/N illegally terminated – NO
 Sy was VALIDLY DISMISSED on the ground of willful breach of trust under Art. 282 of the LC
o Records show that as bank manager, he authorized “kiting” or drawing of checks against
uncollected funds, in wanton violation of the bank’s policies  this was sufficient basis
for the bank to lose trust in him
o Unlike a rank-and-file worker, the sheer existence of a basis for believing that the
employer’s trust has been breached is enough for the dismissal of a managerial employee
o His conduct betrays his culpability  shortly after audit, he tendered an “irrevocable letter
of retirement”
 This arouses suspicion considering that he had previously just agreed to the
extension of his employment until August 18, 2000
 The requirement of procedural due process was also satisfied in this case
o The bank complied with the two-notice requirement
 Written notice of cause for dismissal to afford him opportunity to be heard and
defend himself; and a written notice of the decision to terminate him, stating
clearly the reason therefor
 His theory that he has already been compulsory retired and so no longer able to be dismissed is
untenable – absurd!
o Indeed, he would have qualified for the compulsory retirement, however, he opted to accept
the bank’s offer of extending his employment for another year  In effect, he NEVER
retired
o Unfortunately for him, the extension showed that he had been engaging in unauthorized
activities which warranted his dismissal
2. W/N entitled to retirement benefits – NO
 Under the LC, only unjustly dismissed employees are entitled to retirement benefits and other
privileges including reinstatement and backwages
o Since Sy’s dismissal was for a just cause, he is NOT entitled to any retirement benefit
o To hold otherwise would be to reward acts of willful breach of trust by the EE
 This would open the floodgate to potential anomalous banking transactions by
bank EEs whose employments have been extended
 Bank operations are imbued with public interest, it owes great fidelity to the public it deals with 
cannot be compelled to continue employing a person the management does not trust anymore
 Although no such prohibition in the retirement plan was alleged or proved in this case, the
petitioner’s claims nevertheless, because of his offenses, vis-à-vis his long years of service with the
bank, reflect a regrettable lack of loyalty which he should have strengthened instead of betrayed

RULING: “WHEREFORE, the petition is hereby DENIED.”