FACTS:

Cynthia Rey, the respondent, worked as a Credit Administration Supervisor (CAS) for The House of Sara Lee. The company contracts with dealers called "Independent Business Managers" (IBMs) or "Independent Group Supervisors" (IGSs) to sell their merchandise. The dealers obtain merchandise on credit and sell them at fixed prices determined by the petitioner. The respondent admitted to extending credit terms beyond the allowed limit and was placed on indefinite suspension. An audit conducted by the petitioner confirmed the respondent's infractions. The petitioner directed the respondent to explain the anomalies in more detail, and the respondent requested a formal investigation. The suspension was lifted without prejudice, and a formal hearing took place. The petitioner formally dismissed the respondent for breach of trust and confidence. The respondent filed a complaint for illegal dismissal with the Labor Arbiter. The Labor Arbiter ruled in favor of the respondent, ordering the petitioner to pay full backwages, separation pay, 13th month pay, and attorney's fees.

The petitioner claimed that the respondent's employment was terminated due to loss of trust and confidence. The Labor Arbiter declared the termination illegal, stating that the petitioner failed to prove a just or authorized cause. The petitioner failed to establish that the respondent manipulated credit terms. The respondent's alleged admissions were considered self-serving evidence. The petitioner also failed to substantiate the supposed loss imputed to the respondent. The Labor Arbiter awarded various claims to the respondent and denied others. The petitioner appealed to the NLRC, but the appeal was dismissed. The NLRC affirmed the decision of the Labor Arbiter. The petitioner then appealed to the Court of Appeals (CA), but the CA upheld the previous decisions. The petitioner now appeals to the Supreme Court, arguing that the CA erred in dismissing the petition for certiorari.

ISSUES:

1. Whether the Court of Appeals erred in dismissing the Petition for Certiorari on the ground that factual issues are not proper subjects for the special civil action of certiorari.

2. Whether the NLRC and the CA erred in ignoring the facts established in the record, which support a different conclusion regarding the employee's dismissal.

3. Whether the respondent was dismissed for a just cause.

4. Whether loss of trust and confidence is a valid ground for the dismissal of a managerial employee.

5. Whether the respondent's position as Credit Administration Supervisor justifies her dismissal on the ground of loss of trust and confidence.

6. Whether the respondent's repeated unauthorized extensions of credit terms constitute a breach of trust and confidence.

7. Whether the petitioner's failure to directly and wholly attribute the monetary loss to the respondent affects the validity of her dismissal.

8. Whether the respondent was aware of the company policies regarding allowable credit terms.

9. Whether the respondent's extensions of credit terms were condoned by management.

10. Whether the loss of trust and confidence as Credit Administration Supervisor had been effectively negated by the respondent's appointment as Branch Operations Manager.

11. Whether the dismissal of the respondent was valid.

12. Whether the respondent is entitled to 13th month pay, 14th and 15th month pay, and a monthly salary increase of 10 percent per year for two years.

13. Whether the respondent is entitled to moral and exemplary damages.

14. Whether the respondent is entitled to attorney's fees.

15. Whether the respondent is entitled to separation pay.

RULING:

1. The Court ruled that the CA erred in dismissing the Petition for Certiorari on the ground that factual issues are not proper subjects for the special civil action of certiorari. The Court held that if the NLRC or the labor arbiter acted capriciously and whimsically in total disregard of evidence material to or decisive of the controversy, the extraordinary writ of certiorari will lie. While the general rule is that the factual findings of administrative agencies are not subject to review by the Court, the Court will not uphold erroneous conclusions which are contrary to the evidence, as this would amount to a grave abuse of discretion.

2. The Court further ruled that the NLRC and the CA erred in ignoring the facts established in the record, which support a different conclusion regarding the employee's dismissal. The Court emphasized the importance of meticulously considering the factual findings by the NLRC and the CA, but stressed that it is the role of the higher courts to thoroughly review these findings to ensure that they are supported by substantial evidence. In this case, the Court found that the ignored facts justify a different conclusion regarding the employee's dismissal.

3. The Court concluded that the respondent was dismissed for a just cause. It held that loss of trust and confidence is a just cause for dismissal, especially for supervisors or personnel occupying positions of responsibility. Loss of confidence as a just cause for dismissal is based on the fact that the employee holds a position of trust and confidence and the act complained of must be work-related, rendering the employee unfit to continue working for the employer.

4. Loss of trust and confidence is a valid ground for dismissal of a managerial employee. Proof beyond reasonable doubt is not required, and the existence of a basis for believing that the employee has breached the trust of the employer is sufficient for dismissal.

5. The respondent's position as Credit Administration Supervisor justifies her dismissal on the ground of loss of trust and confidence. Her duties involve strict monitoring of credit deadlines, supervision of credit and collection of payments, and computation of sales commissions. These responsibilities require a high degree of trust and confidence.

6. The respondent's repeated unauthorized extensions of credit terms constitute a breach of trust and confidence. These actions are prejudicial to the petitioner's financial interests and have serious implications.

7. The petitioner's failure to directly attribute the monetary loss to the respondent does not affect the validity of her dismissal. The fraudulent scheme in which the respondent was involved constitutes a clear betrayal of trust and confidence.

8. The Court held that the respondent cannot feign ignorance of the company policies on allowable credit terms as she was fully aware of the financial implications of her extension of credit terms and the consequences of late remittances. Thus, the respondent's claim of ignorance is not accepted.

9. The Court found that the respondent failed to prove that her extensions of credit terms were condoned by management. The manager denied giving her the authority to change credit terms and the audit conducted by higher management found the respondent guilty of violating company policy.

10. The Court noted that the respondent's appointment as Branch Operations Manager was done in an acting capacity and was without prejudice to a reinvestigation of her case. Pending the final outcome of the investigation, the respondent is presumed innocent and her appointment does not negate the loss of trust and confidence as Credit Administration Supervisor.

11. The dismissal of the respondent is valid. The employer has the discretion to terminate the employment of fiduciary employees who breach the trust and confidence of the employer, despite any previous promotions or positions held by the employee.

12. The respondent is not entitled to 13th month pay, 14th and 15th month pay, and a monthly salary increase of 10 percent per year for two years. The respondent failed to prove that these benefits are due to her as a matter of right.

13. The respondent is not entitled to moral and exemplary damages. The claims for damages have no basis in fact and law.

14. The award of attorney's fees should be deleted since there is no basis for such award.

15. The respondent is not entitled to separation pay. Separation pay is only allowed when the employee is validly dismissed for causes other than serious misconduct or those reflecting on her moral character. In this case, the respondent's dismissal was valid due to the breach of her integrity, which is a requirement for her position.

PRINCIPLES:

• The extraordinary writ of certiorari may be granted if the NLRC or the labor arbiter acted capriciously and whimsically in total disregard of evidence material to or decisive of the controversy.

• Although the general rule is that the factual findings of administrative agencies are not subject to review by the Court, the Court will not uphold erroneous conclusions that are contrary to the evidence and not supported by substantial evidence.

• It is the role of the higher courts to thoroughly review the factual findings to ensure that they are supported by substantial evidence.

• Loss of trust and confidence is a just cause for dismissal, particularly for supervisors or personnel occupying positions of responsibility.

• In order for loss of confidence to constitute a just cause for dismissal, the act complained of must be work-related and render the employee unfit to continue working for the employer.

• In labor cases, the degree of proof required is not as stringent as in other types of cases.

• The treatment of loss of trust and confidence differs between managerial employees and rank-and-file personnel.

• For rank-and-file personnel, proof of involvement in the alleged misconduct is required, while for managerial employees, the mere existence of a basis for believing in the breach of trust is sufficient.

• The position of a Credit Administration Supervisor involves a high degree of responsibility, trust, and confidence.

• Failure to detect any anomaly falling within the scope of work reflects incompetence and grounds for dismissal.

• It is not necessary to prove direct participation in irregularities, as long as the employee's actuations sow mistrust and loss of confidence.

• Employees cannot feign ignorance of company policies and are expected to be aware of the financial implications of their actions.

• Violation of company policy or breach of rules and regulations, if tolerated by management, cannot serve as a basis for termination.

• An employee's appointment to another position does not necessarily negate the loss of trust and confidence as it may be done in an acting capacity and pending the outcome of investigations.

• A fiduciary employee who breaches the trust and confidence of the employer may be validly dismissed despite previous promotions or positions held.

• Benefits such as 13th month pay, 14th and 15th month pay, and salary increases must be proven to be due to the employee as a matter of right.

• Claims for moral and exemplary damages must be based on factual and legal basis to be awarded.

• Attorney's fees must also be supported by valid basis.

• Separation pay is only allowed in cases of valid dismissal for causes other than serious misconduct or those reflecting on the employee's moral character.