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ART. 297 Jerusalem Vs Hock

This case involves James Ben L. Jerusalem, who was terminated from his job at Keppel Monte Bank for allegedly referring fraudulent visa card applications. The Labor Arbiter ruled that the termination was illegal. While James held a position of trust, the bank failed to provide clear proof that he knowingly referred fake applications or instructed others to bypass approval procedures. There were no records showing James directed the applications to be approved without following normal processes. His role of forwarding completed applications he received did not demonstrate he breached his duties or instructed others to do so. Therefore, the termination for loss of trust was not validly established.

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125 views2 pages

ART. 297 Jerusalem Vs Hock

This case involves James Ben L. Jerusalem, who was terminated from his job at Keppel Monte Bank for allegedly referring fraudulent visa card applications. The Labor Arbiter ruled that the termination was illegal. While James held a position of trust, the bank failed to provide clear proof that he knowingly referred fake applications or instructed others to bypass approval procedures. There were no records showing James directed the applications to be approved without following normal processes. His role of forwarding completed applications he received did not demonstrate he breached his duties or instructed others to do so. Therefore, the termination for loss of trust was not validly established.

Uploaded by

Juan Doe
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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JAMES BEN L. JERUSALEM vs.

HOCK, SUNNY YAP and JOSEFINA PICART


G.R. No. 169564 April 6, 2011
DEL CASTILLO, J.:

TERMINATION BY EMPLOYER: Loss of Trust and Confidence

DOCTRINE: For breach of trust and confidence to become a valid ground for the dismissal of an employee, the
cause of loss of trust and confidence must be related to the performance of the employee’s duties.

FACTS: James Ben L. Jerusalem (James) was employed by Keppel Monte Bank (Keppel) as Assistant Vice-
President as was assigned as the head of the VISA Credit card department. Later, he was reassigned as the head of
the Marketing and Operations of the Jewelry Department.

During his leadership in the new assignment, James received from Jorge Javier (Jorge) a sealed envelope said to be
containing VISA Card application forms. Jorge is a Keppel Visa Card Holder since December 1998. James
immediately handed over the envelope with accomplished application forms to the VISA Credit Card Unit. All in
all, the VISA credit card applications referred by Jorge which James forwarded to the VISA Credit Card Unit
numbered 67, all of which were subsequently approved. As it turned out, all the accounts under these approved
applications became past due.

Due to this, the bank suffered a loss of P7,961,619.82. James upon knowing the status of the accounts referred by
Jorge, sent a Memorandum6 to Roberto (head of the VISA Credit Card Department) recommending the filing of a
criminal case for estafa against Jorge. He further recommended that coordination with the other banks where Jorge
has deposits should be made promptly so that they can ask said banks to freeze Jorge’s accounts. James even warned
Keppel that immediate action should be taken while Jorge is still in the country.

However thereafter, James received a Notice to Explain from Keppel’s Vice President for Operations, Sunny Yap
(Sunny), why no disciplinary action should be taken against him for referring/endorsing fictitious VISA card
applicants.

James submitted his written explanation to Sunny. He pointed out that he had no participation in the processing of
the VISA card applications since he was no longer connected with the VISA Credit Card Unit at the time of such
transactions. He explained that he can only endorse the applications referred by Jorge to the VISA Credit Card Unit
because he was already transferred to Jewelry Department, as Head.

Despite such explanation, the Manager for Human Resources Department, Josefina Picart, handed to James a Notice
of Termination informing the latter that he was found guilty of breach of trust and confidence for knowingly and
maliciously referring, endorsing and vouching for VISA card applicants who later turned out to be impostors
resulting in financial loss to Keppel.

This prompted James to file before the Labor Arbiter a complaint for illegal dismissal.

ISSUE: Is the dismissal of James on the ground of loss of trust and confidence valid?

HELD: NO. "Loss of confidence as a just cause for termination of employment is premised on the fact that the
employee concerned holds a position of responsibility or trust and confidence. He must be invested with confidence
on delicate matters, such as custody handling or care and protection of the property and assets of the employer. And,
in order to constitute a just cause for dismissal, the act complained of must be work-related and shows that the
employee concerned is unfit to continue to work for the employer."

The first requisite for dismissal on the ground of loss of trust and confidence is that the employee concerned must be
holding a position of trust and confidence. In this case, there is no doubt that James held a position of trust and
confidence as Assistant Vice-President of the Jewelry Department.
The second requisite is that there must be an act that would justify the loss of trust and confidence. Loss of trust and
confidence, to be a valid cause for dismissal, must be based on a wilful breach of trust and founded on clearly
established facts. The basis for the dismissal must be clearly and convincingly established but proof beyond
reasonable doubt is not necessary. Keppel’s evidence against James fails to meet this standard.

The bank has not been able to show any concrete proof that indeed complainant had participated in the
approval of the questioned VISA CARD accounts. The records [are] bereft of any concrete showing that
complainant directed Ms. Gerena to approve the applications without passing through the process. The alleged
marginal notations in the applications were admittedly scribbled by Ms. Gerena. Even assuming that there are such
notations on the applications i.e., "c/o James Jerusalem", still, such notations to us can not be construed as a
directive coming from complainant to specifically do away with existing policy on the approval of applications for
VISA Card.

Of course, we concede to the fact that respondent had sustained losses on account of the so-called "credit card scam"
in the amount of P7,961,619.82 all coming from the accounts referred x x x by Mr. Jorge Javier, but no amount of
mind boggling can we infer that the mere act of handing the already accomplished forms for VISA CREDIT Card
could be interpreted as "Favorable endorsement" with instructions not to conduct the usual credit
investigation/verification of applicants. To lay the blame upon the complainant would be at the height of
injustice considering that at that time, he no longer has the authority to pass upon such applications. To
attribute such huge financial losses to one who is no longer connected with the VISA Card department would
be stretching too far, the import of the term "some basis." We simply could not see our way through how
respondent bank could have inferred that complainant made such instruction upon Ms. Gerena to forego the usual
process and have the applications approved without any direct evidence showing to be so.

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