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G.R. No. 173012. June 13, 2012.*

DOLORES T. ESGUERRA, petitioner, vs. VALLE VERDE
COUNTRY CLUB, INC. and ERNESTO VILLALUNA,
respondents.

Labor Law; Termination of Employment; Under the Labor

Code, the requirements for the lawful dismissal of an employee are
two-fold: the substantive and the procedural aspects.—Under the
Labor Code, the requirements for the lawful dismissal of an
employee are two-fold[:] the substantive and the procedural
aspects. Not only must the dismissal be for a just or authorized
cause, the rudimentary requirements of due process—notice and
hearing—must, likewise, be observed x  x  x. Without the
concurrence of the two, the termination would x x x be illegal[;]
employment is a property right of which one cannot be deprived of
without due process.
Same; Same; Right to be Heard; The existence of an actual,
formal “trial-type” hearing, although preferred, is not absolutely
necessary to satisfy the employee’s right to be heard.—In sum, the
existence of an actual, formal “trial-type” hearing, although
preferred, is not absolutely necessary to satisfy the employee’s
right to be heard. Esguerra was able to present her defenses; and
only upon proper consideration of it did Valle Verde send the
second memorandum terminating her employment. Since Valle
Verde complied with the two-notice requirement, no procedural
defect exists in Esguerra’s termination.
Same; Same; Loss of Trust and Confidence; In Jardine
Davies, Inc. v. National Labor Relations Commission, 311 SCRA
289 (1999), we held that loss of confidence as a just cause for
termination of employment can be invoked when an employee
holds a position of responsibility, trust and confidence.—In
Jardine Davies, Inc. v. National Labor Relations Commission, 311
SCRA 289 (1999), we held that loss of confidence as a just cause
for termination of employment can be invoked when an employee
holds a position of responsibility, trust and confidence. In order to
constitute a just cause for dismissal,

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* SECOND DIVISION.

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Esguerra vs. Valle Verde Country Club, Inc.

the act complained of must be related to the performance of the

duties of the dismissed employee and must show that he or she is
unfit to continue working for the employer for violation of the
trust reposed in him or her.

PETITION for review on certiorari of the decision and

resolution of the Court of Appeals.
   The facts are stated in the opinion of the Court.
  Romualdo A. Din, Jr. for petitioner.
  Santiago and Santiago for private respondents.

BRION, J.:
Before this Court is a petition for review on certiorari,1
filed by petitioner Dolores T. Esguerra (Esguerra), from the
February 7, 2006 decision2 and the June 2, 2006 resolution3
of the Court of Appeals (CA) in CA-G.R. SP No. 85012,
ruling that Esguerra had been validly dismissed from her
employment with respondent Valle Verde Country Club,
Inc. (Valle Verde). Valle Verde terminated Esguerra’s
employment for loss of trust and confidence in the custody
of cash sales.

Factual Background

On April 1, 1978, Valle Verde hired Esguerra as Head

Food Checker. In 1999, she was promoted to Cost Control
Supervisor.4
On January 15, 2000, the Couples for Christ held a
seminar at the country club. Esguerra was tasked to
oversee the

_______________
1 Under Rule 45 of the Rules of Court; Rollo, pp. 8-25.
2  Penned by Associate Justice Arcangelita M. Romilla-Lontok, and
concurred in by Associate Justice Marina L. Buzon and Associate Justice
Aurora Santiago-Lagman, id., at pp. 29-36.
3 Id., at p. 58.
4 After serving for about twenty (20) years; id., at p. 118.

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Esguerra vs. Valle Verde Country Club, Inc.

seminar held in the two function rooms—the Ballroom and

the Tanay Room. The arrangement was that the food shall
be served in the form of pre-paid buffet, while the drinks
shall be paid in a “pay as you order” basis.5
The Valle Verde Management found out the following
day that only the proceeds from the Tanay Room had been
remitted to the accounting department. There were also
unauthorized charges of food on the account of Judge
Rodolfo Bonifacio, one of the participants. To resolve the
issue, Valle Verde conducted an investigation; the
employees who were assigned in the two function rooms
were summoned and made to explain, in writing, what had
transpired.6
On March 6, 2000, Valle Verde sent a memorandum to
Esguerra requiring her to show cause as to why no
disciplinary action should be taken against her for the non-
remittance of the Ballroom’s sales. Esguerra was placed
under preventive suspension with pay, pending
investigation.7
In her letter-response, Esguerra denied having
committed any misappropriation. She explained that it had
been her daughter (who was assigned as a food checker)
who lost the money.8 To settle the matter, Esguerra paid
the unaccounted amount as soon as her daughter informed
her about it. Esguerra also explained the unauthorized
charging of food on Judge Bonifacio’s account. She alleged
that Judge Bonifacio took pity on her and told her to take
home some food and to charge it on his account.
Valle Verde found Esguerra’s explanation unsatisfactory
and, on July 26, 2000, issued a second memorandum
terminating Esguerra’s employment.9

_______________
5 Id., at pp. 146-147.
6 Id., at p. 147.
7 Id., at p. 174.
8 Id., at p. 175.
9 Id., at p. 177.

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The Labor Arbiter’s Ruling

Esguerra filed a complaint10 with the National Labor
Relations Commission (NLRC) for illegal dismissal. In her
April 5, 2002 decision, Labor Arbiter Marita V. Padolina
dismissed the complaint for lack of merit, but ordered Valle
Verde to pay Esguerra 13th month pay in the amount of
P2,016.66, rice subsidy in the amount of P1,100.00, and ten
percent (10%) attorney’s fees in the amount of P311.66.11

The NLRC’s Ruling

Esguerra appealed the case to the NLRC.12 In its

December 27, 2002 decision, the NLRC modified the
decision and only awarded P143,000.00 as separation pay,
equivalent to one-half (½) month for every year of service,13
after taking into account Esguerra’s long years of service
and absence of previous derogatory records.
Esguerra filed a partial motion for reconsideration,14
while Valle Verde filed its own motion for
reconsideration.15 In its March 31, 2004 resolution, the
NLRC denied Esguerra’s motion, but granted Valle Verde’s
motion. Thus, it set aside its December 27, 2002 decision
and affirmed the April 5, 2002 decision of the labor arbiter.

The CA Ruling

Aggrieved, Esguerra elevated her case to the CA via a

Rule 65 petition for certiorari. In its February 7, 2006
decision, the CA denied Esguerra’s petition for certiorari. It
found that the

_______________
10 Docketed as NLRC NCR Case No. 00-11-05960-2000; id., at p. 117.
11 Id., at pp. 202-211.
12 Id., at pp. 213-225.
13 Id., at pp. 76-95.
14 Id., at pp. 96-101.
15 Id., at pp. 103-115.

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Esguerra vs. Valle Verde Country Club, Inc.

NLRC did not commit any grave abuse of discretion in

finding that Esguerra was validly dismissed from
employment for loss of trust and confidence, and that her
length of service cannot be counted in her favor.
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Esguerra filed the present petition after the CA denied16

her motion for reconsideration.17

The Petition

Esguerra argues that the appellate court erred in ruling

that she had been validly dismissed on the ground of loss of
trust and confidence. She alleges that she was only a
regular employee and did not occupy a supervisory position
vested with trust and confidence. Esguerra also questions
the manner of dismissal since Valle Verde failed to comply
with procedural requirements.
The Issue
The core issue boils down to whether the CA erred in
affirming the NLRC’s decision and resolution.
Our Ruling
The petition is without merit.
“Under the Labor Code, the requirements for the lawful
dismissal of an employee are two-fold[:] the substantive
and the procedural aspects. Not only must the dismissal be
for a just or authorized cause, the rudimentary
requirements of due process—notice and hearing—must,
likewise, be observed x x x. Without the concurrence of the
two, the termination would x x x be illegal[;] employment is
a property right of which one cannot be deprived of without
due process.”18

_______________
16 Supra note 3.
17 Rollo, pp. 37-45.
18  Bughaw, Jr. v. Treasure Island Industrial Corporation, G.R. No.
173151, March 28, 2008, 550 SCRA 307, 316-318.

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Esguerra vs. Valle Verde Country Club, Inc.

There was valid notice and hearing

We fail to find any irregularities in the service of notice
to Esguerra. The memorandum dated March 6, 200019
informed her of the charges, and clearly directed her to
show cause, in writing, why no disciplinary action should
be imposed against her. Esguerra’s allegation that the
notice was insufficient since it failed to contain any
intention to terminate her is incorrect.
In Perez v. Philippine Telegraph and Telephone
Company,20 the Court underscored the significance of the
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two-notice rule in dismissing an employee:

“To meet the requirements of due process in the dismissal of an

employee, an employer must furnish the worker with two
written notices: (1) a written notice specifying the grounds for
termination and giving to said employee a reasonable opportunity
to explain his side and (2) another written notice indicating that,
upon due consideration of all circumstances, grounds have been
established to justify the employer’s decision to dismiss the
employee. [emphases and italics ours].”21

Contrary to Esguerra’s allegation, the law does not

require that an intention to terminate one’s employment
should be included in the first notice. It is enough that
employees are properly apprised of the charges brought
against them so they can properly prepare their defenses; it
is only during the second notice that the intention to
terminate one’s employment should be explicitly stated.
There is also no basis to question the absence of a proper
hearing. In Perez, the Court provided the following guiding
principles in connection with the hearing requirement in
dismissal cases:

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19 Supra note 7.
20 G.R. No. 152048, April 7, 2009, 584 SCRA 110.
21 Id., at p. 119.

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Esguerra vs. Valle Verde Country Club, Inc.

a) “ample opportunity to be heard” means any meaningful

opportunity (verbal or written) given to the employee to answer
the charges against him and submit evidence in support of his
defense, whether in a hearing, conference or some other fair, just
and reasonable way.
b) a formal hearing or conference becomes mandatory only when
requested by the employee in writing or substantial evidentiary
disputes exist or a company rule or practice requires it, or when
similar circumstances justify it.
c)the “ample opportunity to be heard” standard in the Labor Code
prevails over the “hearing or conference” requirement in the
implementing rules and regulations.22

In sum, the existence of an actual, formal “trial-type”

hearing, although preferred, is not absolutely necessary to
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satisfy the employee’s right to be heard. Esguerra was able

to present her defenses; and only upon proper
consideration of it did Valle Verde send the second
memorandum terminating her employment. Since Valle
Verde complied with the two-notice requirement, no
procedural defect exists in Esguerra’s termination.
Esguerra occupied a position of trust and confidence
We now dwell on the substantive aspect of Esguerra’s
dismissal. We have held that there are two (2) classes of
positions of trust—the first class consists of managerial
employees, or those vested with the power to lay down
management policies; and the second class consists of
cashiers, auditors, property custodians or those who, in the
normal and routine exercise of their functions, regularly
handle significant amounts of money or property.23

_______________
22 Id., at p. 127.
23  Bristol Myers Squibb (Phils.), Inc. v. Baban, G.R. No. 167449,
December 17, 2008, 574 SCRA 198, 205-206.

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Esguerra vs. Valle Verde Country Club, Inc.

Esguerra held the position of Cost Control Supervisor

and had the duty to remit to the accounting department
the cash sales proceeds from every transaction she was
assigned to.24 This is not a routine task that a regular
employee may perform; it is related to the handling of
business expenditures or finances. For this reason,
Esguerra occupies a position of trust and confidence—a
position enumerated in the second class of positions of
trust. Any breach of the trust imposed upon her can be a
valid cause for dismissal.
In Jardine Davies, Inc. v. National Labor Relations
Commission,25 we held that loss of confidence as a just
cause for termination of employment can be invoked when
an employee holds a position of responsibility, trust and
confidence. In order to constitute a just cause for dismissal,
the act complained of must be related to the performance of
the duties of the dismissed employee and must show that
he or she is unfit to continue working for the employer for
violation of the trust reposed in him or her.
We find no merit in the allegation that it was Esguerra’s
daughter who should be held liable. She had no custody of

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the cash sales since it was not part of her duties as a food
checker. It was Esguerra’s responsibility to account for the
cash proceeds; in case of problems, she should have
promptly reported it, regardless of who was at fault.
Instead, she settled the unaccounted amount only after the
accounting department informed her about the
discrepancy, almost one month following the incident.
Esguerra’s failure to make the proper report reflects on her
irresponsibility in the custody of cash for which she was
accountable, it was her duty to account for the sales
proceeds, and she should have known about the missing
amount immediately after the event.
We cannot favorably consider Esguerra’s explanation
about the unauthorized charging on Judge Bonifacio’s
account. It is

_______________
24 Rollo, p. 35.
25 G.R. No. 76272, July 28, 1999, 311 SCRA 289, 296.

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Esguerra vs. Valle Verde Country Club, Inc.

highly unethical for an employee to bring home food

intended to be sold to customers. At any rate, her
explanation is self-serving and cannot be believed; the
numerous written testimonies of the other co-workers
never even mentioned it.
WHEREFORE, we hereby DENY the petition for lack of
merit. Costs against Dolores T. Esguerra.
SO ORDERED.

Carpio (Chairperson), Perez, Sereno and Reyes, JJ.,

concur.

Petition denied.

Note.—For loss of trust and confidence to be a ground

for dismissal, the law requires only that there be at least
some basis to justify the dismissal. (Philippine Journalists,
Inc. vs. National Labor Relations Commission, 612 SCRA
719 [2010])
——o0o—— 

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