Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court, assailing the Decision^[1] dated April 19, 2007 and the Resolution^[2] dated September 17, 2007 of the Court of Appeals (CA) in CA-G.R. SP No. 96059.

The undisputed facts of the case are as follows:

On December 1, 2002, respondent Destiny Financial Plans, Inc., a pre-need insurance company, hired petitioner as Head of its Marketing Group, with a compensation package of Ninety Thousand Pesos (P90,000.00) a month.^[3]

On February 2, 2004, a Marketing Committee meeting was called by respondent Arsenio Bartolome (Bartolome) at the conference room of respondent company. Present at the meeting were petitioner, respondent Bartolome, various leaders of the marketing team, and the operations director of the company. During the meeting, respondent Bartolome made several announcements. However, to the surprise of petitioner, respondent Bartolome announced that petitioner was to resign from the respondent company.^[4]

On February 11, 2004, petitioner received a letter^[5] from respondent company, asking him to explain within forty-eight (48) hours why his services should not be terminated for loss of confidence in his ability to perform the functions of Marketing Director of the company.^[6] The pertinent portions of the letter read:

You will recall that when you were hired in November of 2002[,] when the new stockholders took over management of the Company, you were tasked to reorganize and set up the Marketing Group, the core group of which was finally set up after much delay, mid year of 2003. Upon your recommendation and representation on the projected output of these new groups, management agreed to the compensation scheme proposed, onerous as they may have been, trusting in your assurance that you have worked with these people and that they will deliver as they have undertaken.

As early as September[,] however, your attention was already called by Mr. A. M. Bartolome regarding the dismal performance of these groups, turning in only 20%-30% of their targeted sales. Despite your assurances that the figures will turn in as projected, they did not. While figures improved in October (albeit still not reaching even 50% of projections), a severe down trend of the already dismal figures occurred in the following months. This [led] to subsequent talks with you that extreme measure should be undertaken considering the monthly deficit of about P1 Million which the Company has been suffering.

When the new marketing and operation plans were discussed with you, you appeared to have agreed with the measures and cooperate in the implementation of the same as stated above. Your behavior in the last few days, however, has become very alarming and confirmed that had the Marketing group and therefore the lifeblood of the Company, been left to your management and direction, the Company would have no way to end but fold up. You appear to either refuse to accept the realities of the sales and financial figures or simply do not understand their implications in respect [to] the Company's future. This is not to mention your failure to liquidate company funds for which you are accountable as well as certain conduct which are in conflict of interest with the Company such as including your son in a binary slot. Worse, you instructed the plan administration staff to keep this matter under wraps.

The management had initially been willing to accede to your graceful exit and in fact work with you as an independent agent if only to soften the financial implications on you and to maintain the cordial relationship. Furthermore, management was initially willing and had in the past turned a blind eye on your past conduct in dealing with some of the marketing staff including, among others, your marketing trip to Baguio and use of company property and assets. However, you seem to have the propensity to repeat this unacceptable behavior.

This letter is intentionally sent today as one of our Directors was tasked to talk to you over the weekend and explore less drastic measures to give due courtesy to you in light of the position you hold. During your meeting last Monday, you once again undertook to send our Mr. A.B.K. Tan a proposal on the terms of your engagement as Management Consultant/Independent Agent. You failed to see Mr. Tan on the appointed time and when asked, you gave an excuse and advised that you will text him a message the following day. You did not send in any proposal as you have undertaken to do, instead you sent a letter yesterday afternoon, "urging" management to dismiss you instead. Today, you did not report for work and instead instructed a staff member to pack up your belongings in your room.

Kindly therefore respond to this letter to air your side. Meanwhile, also kindly turn in the Executive elevator key assigned to you to Ms. Twinkle Hipolilto as well as the duplicate keys to the Company car and surrender possession of the same so the marketing group which is in dire need [of] transportation to carry out their duties may use the same, instead of your devoting the same to your and your family's personal use. Your failure to respond within the allotted 48 hours will constitute as a waiver of your right to air your side in this matter.^[7]

On February 13, 2004, petitioner submitted his letter of explanation^[8] to respondent company. In response to the allegations of the latter, petitioner argued that:

First of all, permit me to correct your reference to me as "Marketing Director" which is just for external purposes. My correct title is "Head, Marketing Group." This clarification is necessary as I have never been a Director of the Company nor a Vice President.

Thank you for giving me a chance to explain why I should not be "terminated for loss of confidence" in my "ability to perform the functions" of Head, Marketing Group. There are several reasons why the Board should not terminate me.

1. Your "loss of confidence" ground has no basis. The Board is practically saying it has lost its confidence as well on the Management Committee headed by Mr. Arsenio Bartolome (AMB) because no significant decision in Marketing and Operations is made without AMB's go signal. Many a time, [sic] my recommendations which were based on my industry experience and which were in the best interest of the company long-term, were turned down.
   
   
2. You are right. I was hired only in November 2002. I was hired because of my exposure and experience in the pre-need industry. The Company when it took over USPI started with no "Marketing" organization. I recruited the Marketing group. There were no marketing documents to start with- no Agents' contract forms, no rate sheets, no product manual, no other marketing materials. I created and organized all these. The only materials available were the binary materials, which were more focused on the income potential rather than product orientation. I organized the Traditional Sales Team, The Network Sales Team, the Military Sales and the Institutional Sales Team.
   
   
3. You mentioned the P1 Million monthly deficit. Assuming that to be true, I know, and I mentioned this repeatedly, that in this industry, particularly at these economic hard times, it is very, very difficult to make money in the first year, even in the second year, the obvious reason being the high commission to be paid for the first year contracts plus the overhead and marketing expenses. True, management and Marketing people can set targets, but targets are not realistic most of the time. Be that as it may, it must have been reported in the last Friday's board meeting that the total Sales from July 2003 to Jan. 2004 (GCP) was at P42,067.356 against only P4.0M in allowance released. This shows that the cost-to-sales ratio is only less than 10% which means if our collection efforts are efficient then this cost may be recovered in less than a year.
   
   
4. In your fifth paragraph how can you say that may behavior is alarming when I even represented the company in the Pre-Need Forum mostly with my sales team heads at the Shangri-La Hotel in Makati last February 5? How would you feel if your boss requests for a resignation letter effective retroactively? I spent two nights of anxiety, which caused me severe headaches and wounded feelings. I even called Lito Quimel to notify him of my sick leaves. The sales figures are clear to me that is why I kept on requesting for an honest to goodness financial planning session but what we had last December was like a revalida session. I still believe that if we follow the marketing Group's recommendation, things would turn out well.
   
   
5. I did not propose an agency agreement. What I simply mentioned during my dinner with Nonoy Tan was that things could probably be better if people who would be asked to leave could be offered some sort of an agency arrangement instead of them representing competitor companies. I asked Mr. Tan if he had an offer for me. He said the company cannot make such [an] offer. I left it at that.
   
   
6. I am advised that as an employee I have security of tenure under the Labor Code and that I cannot be dismissed without lawful cause. You know very well that your reason of "loss of confidence" has no factual or legal basis. If indeed the Board wants to dismiss me in any event, then it should do so in a decent manner and with a decent separation package.
   
   
7. On the petty matter of my son's joining the binary, I sent a memo via email to ABKT and AMB sometime first week of August 2003 informing them of this. It was a memo wherein I was strongly recommending full support to networking Sales strategy, as it will enhance our cash flow in tandem with the Traditional sales. I even mentioned and I quote[,] "As a personal contribution I will ask my adult sons to join..." This was further discussed with AMB personally and I mentioned to him that instead of making my children join First Quadrant, which was beginning to be popular in schools[,] I urged them to go on a savings plan instead. I should have been congratulated by that gesture but now it turns out to be conflict of interest. Please ask for a genealogy [sic] if my sons gained from their slots. I even remitted gross without commissions on these plans. I remember AMB openly mentioning the pension plan of Mr. AP Bartolome, to be paid net of commissions. I saw nothing wrong therefore in buying a plan for my adult sons. I did not instruct a staff to keep matters under wraps. I simply asked if it was a "big deal" with AMB because knowing him he would look into small details often with suspicion.
   
   
8. It may be worth mentioning that last Jan. 11, 2004 I returned from a successful sales rally in Davao attended by at least 100 sales managers now operating in Herway-Davao and in one occasion I was given two pairs of Levi's pants by the spouse of one of the applicants. Instead of keeping the two pairs of pants, I raffled them off to the staff employees and Twinkle and Grace won the raffle. Looking back this could have been an issue of conflict of interest. I also don't remember reading a memo on conflict of interest, which AMB has been openly mentioning.
   
   
9. On the matter of unliquidated items please give me a copy of any, and if my memory serves me right any item I can not justify I simply sign my name and request it to be charged against my account. At the very least I should have been given a notice about these petty matters. To me all these are forms of harassment.
   
   
10. There are other instances in the past that will prove to the board that I did my level best (in spite of my limitations) to show that there is no cause for loss of confidence. On the other hand, I have shown loyalty to the company and to AMB when I defended issues about Urban Bank and AMB, I pacified angry USPI planholders exercising their rights for a cash surrender. I even went to a point of talking to a radio announcer to ease the tension and negative impact to the company. That was the time a guard was hired at the 5^th floor. I also remember Lito Quimel requesting me to face the angry planholders from the Mayor's office headed by Lina Hilario. I pacified them since Lina's husband is a co-Rotarian in my club. The group of Lina then agreed to continue their plans under the new scheme but had some reservations about the Urban Bank issue (which I mentioned to AMB). I just reassured them that they should not be comparing Destiny and Urban Bank.
    
    
11. I deny allegations in your paragraph seven about unacceptable behavior. I went on a trip to Baguio on a Holy Tuesday last year to call on the several group accounts. Since I know that Mr. Bartolome might use his suspicious mind on this trip I texted him my whereabouts and even asked Ms. Tere Rocales (then my co-proponent for the Network sales) and her husband to join me. We went to BGH but managed to talk to Dra. Cruz on the phone as we missed her for a meeting. We had two other meetings with USPI clients to regain the accounts. I thought I should be commended for working during Holy Week and regaining clients for Destiny. Instead, Lito Quimel was asked to go to Baguio to investigate if I really went there. Of course embarrassing to note they were wrong in their suspicion. It might interest you to know that in at least several occasions I arranged for our Baguio townhouse to be used for company business just to save money for the company. Instead of charging the company[,] I just kept quiet about my simple contribution. I also confronted AKT about alleged conduct in dealing with marketing staff at his office. Even the raisin bread issue become a big deal when in fact the next day I brought and distributed it to the staff. What was worse was Mr. Bartolome had to use my cousin to bring these poor taste "Chismis" out to my family. I remember my sister discussing these in one Sunday dinner at my father's house. My elder sister could have gathered this information only from my female cousin who is a close confidant of Mr. Bartolome.
    

Your last paragraph is contradictory and premature. Are you not asking me to explain my side so that the Board can decide whether or not to terminate me after I shall have submitted this explanation? The Board will have to meet and decide first before you ask for the turn over of the elevator key and the car, which I am using as part of my employment package. Before that happens I am still an employee. Your [sic] asking me to explain and demanding turnover of [the] property as if I am already terminated is dealing with me in bad faith. It is obvious the Board has already made up its mind no matter what my explanation would be. Be that as it may, I expect to hear what the Board will decide and to receive a formal termination letter for my guidance.

On February 17, 2004, the board of directors of respondent company terminated petitioner's services on the ground of loss of confidence.^[9] Thus, on March 16, 2004, petitioner filed before the Labor Arbiter a complaint for illegal dismissal, with prayer for reinstatement, payment of full backwages, payment of 13^th month pay, moral and exemplary damages, and attorney's fees, against respondent.^[10]

On April 28, 2005, the Labor Arbiter rendered a Decision,^[11] the dispositive portion of which reads:

WHEREFORE, premises considered, judgment is hereby rendered, declaring complainant's dismissal from employment to be illegal. Accordingly, respondents are jointly and severally liable:

1) To reinstate complainant to his former and/or substantially equivalent position without loss of seniority rights, benefits and other privileges;

2) To pay complainant his backwages, from the time he was illegally dismissed up to his actual reinstatement. As of the present, his backwages amounted to P1,365,000.00;

3) To pay complainant the amount of P100,000.00, representing moral damages; and the sum of P100,000.00 as exemplary damages;

4) To pay complainant the amount equivalent to ten (10%) percent of the total judgment award as and for attorney's fees.

SO ORDERED.^[12]

On appeal, the National Labor Relations Commission (NLRC) reversed the decision of the Labor Arbiter in a Decision^[13] dated February 28, 2006, the fallo of which reads:

WHEREFORE, the decision dated April 28, 2005 is hereby VACATED. Judgment is hereby rendered, DISMISSING the complaint for lack of merit.

SO ORDERED.^[14]

Petitioner filed a motion for reconsideration. However, the same was denied in a Resolution^[15] dated June 28, 2006.

Aggrieved, petitioner filed a petition for certiorari under Rule 65 of the Rules of Court before the CA. On April 19, 2007, the CA rendered a Decision,^[16] affirming with modification the decision of the NLRC, viz.:

WHEREFORE, premises considered, the assailed Decision dated February 28, 2006 and Resolution dated June 28, 2006 of the NLRC, Second Division, in NLRC NCR CASE NO. 00-03-03655-04/NLRC NCR CA NO. 044669-05 are hereby AFFIRMED with the MODIFICATION that private respondent Destiny is hereby ordered to pay petitioner Ancheta the amount of P100,000.00 as nominal damages for non-compliance with statutory due process.

SO ORDERED.

Both petitioner and respondents filed their respective motions for partial consideration. However, the motions of both parties were denied in a Resolution^[17] dated September 17, 2007.

Hence, the instant petition.

The sole issue for resolution is whether petitioner's employment was validly terminated because of loss of confidence.

Two requisites must concur in order that there be a valid dismissal from employment, namely: (1) the dismissal must be for any of the causes expressed in Article 282 of the Labor Code; and (2) the employee must be given an opportunity to be heard and to defend himself.^[18]

In the instant case, to justify the dismissal of petitioner from respondent company, respondents invoked breach of trust and confidence. Under Article 282(c) of the Labor Code, an employer can terminate the employment of the employee concerned for "fraud or willful breach by an employee of the trust reposed in him by his employer or duly authorized representative."

The doctrine of loss of confidence requires the concurrence of the following: (1) loss of confidence should not be simulated; (2) it should not be used as a subterfuge for causes which are improper, illegal, or unjustified; (3) it may not be arbitrarily asserted in the face of overwhelming evidence to the contrary; (4) it must be genuine, not a mere afterthought to justify an earlier action taken in bad faith; and (5) the employee involved holds a position of trust and confidence.^[19]

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, trust and confidence. He must be invested with confidence on delicate matters, such as the custody, handling, care, and protection of the employer's property and/or funds. In order to constitute a just cause for dismissal, the act complained of must be "work-related" such as would show the employee concerned to be unfit to continue working for the employer.^[20]

As a rule, employers are allowed a wide latitude of discretion in terminating the employment of managerial personnel or those who, while not of similar rank, perform functions which by their nature require the employers' full trust and confidence. Proof beyond reasonable doubt is not required. It is sufficient that there is some basis for loss of confidence, such as when the employer has reasonable ground to believe that the employee concerned is responsible for the purported misconduct, and the nature of his participation therein renders him unworthy of the trust and confidence demanded by his position.^[21]

This must be distinguished from the case of ordinary rank-and-file employees, whose termination on the basis of these same grounds requires a higher proof of involvement in the events in question; mere uncorroborated assertions and accusations by the employer will not suffice.^[22]

Petitioner was a managerial employee of respondent company, holding a highly sensitive position. Being the Head of the Marketing Group of respondent company, he was in charge, among others, of the over-all

production and sales performance of the company.^[23] Thus, as aptly pointed out by the CA, his performance was practically the lifeblood of the corporation, because its earnings depended on the sales of the marketing group, which he used to head. The position held by petitioner required the highest degree of trust and confidence of his employer in the former's exercise of managerial discretion insofar as the conduct of the latter's business was concerned.^[24] Petitioner's inability to perform the functions of his office to the satisfaction of his employer and the former's poor judgment as marketing head caused the company huge financial losses. If these were not timely addressed and corrected, the company could have collapsed, to the detriment of its policy holders, stockholders, employees, and the public in general.

The power to dismiss an employee is a recognized prerogative inherent in the employer's right to freely manage and regulate his business. The dismissal of an employee, in a way, is a measure of self preservation.^[25] The law, in protecting the rights of the laborers, authorizes neither oppression nor self-destruction of the employer. The worker's right to security of tenure is not an absolute right, for the law provides that he may be dismissed for cause.^[26] In this case, as admitted by petitioner, he was hired because of his expertise in the pre-need industry. His competence and satisfactory performance as head of the marketing group assumed primordial importance for his continued employment in the company. His dismal performance was causing the company financial losses; thus, it was not wise for the company to continue his services. To be sure, an employer cannot be compelled to continue with the employment of workers when continued employment will prove inimical to the employer's interest.^[27]

With regard to respondent company's compliance with procedural due process, we agree with the CA when it enunciated that:

Be that as it may, this Court finds that the private respondents did not strictly comply with the "two notice" requirement in dismissing petitioner Ancheta. While private respondents sent a show cause letter to petitioner Ancheta, the same letter precipitately implemented termination procedures, i.e., demanded the return of the Executive elevator key which allows petitioner Ancheta access to the office premises and the surrender of the company car assigned to him, even as petitioner Ancheta had yet to answer and air his side. Such betrays the fact that the said show cause letter was but a formality and petitioner Ancheta's dismissal is a foregone conclusion. It is thus apparent that private respondents did not comply with the procedural requirements of due process in dismissing petitioner Ancheta.^[28]

Respondents' failure to observe due process in the termination of employment of petitioner for a just cause does not invalidate the dismissal but makes respondent company liable for non-compliance with the procedural requirements of due process. The violation of petitioner's right to statutory due process warrants the payment of nominal damages, the amount of which is addressed to the sound discretion of the court, taking into account the relevant circumstances.^[29] In the instant case, considering that respondent company already suffered financially because of poor sales performance under petitioner's watch, it is just proper to reduce the amount of nominal damages awarded to petitioner to Thirty Thousand Pesos (P30,000.00). The amount of nominal damages awarded is not intended to enrich the employee, but to deter employers from future violations of the statutory due process rights of employees.

WHEREFORE, in view of the foregoing, the instant appeal is DENIED for lack of merit. The Decision dated April 19, 2007 and the Resolution dated September 17, 2007 of the Court of Appeals in CA-G.R. SP No. 96059 are hereby AFFIRMED WITH MODIFICATION in that the nominal damages awarded to petitioner Rolando P. Ancheta shall be reduced to Thirty Thousand Pesos (P30,000.00).

SO ORDERED.

Corona, (Chairperson), Velasco, Jr., Peralta, and Mendoza, JJ., concur.

---

^[1] Penned by Associate Justice Remedios A. Salazar-Fernando, with Associate Justices Rosalinda Asuncion-Vicente and Enrico A. Lanzanas, concurring; rollo, pp. 9-20.

^[2] Id. at 22-23.

^[3] Rollo, p. 205.

^[4] Id. at 205-206, 124.

^[5] Id. at 126-127.

^[6] Id. at 206,126.

^[7] Id. at 126-127.

^[8] Id. at 206, 128-131.

^[9] Id. at 14.

^[10] Id. at 10.

^[11] Penned by Labor Arbiter Joel S. Lustria; rollo, pp. 204-220.

^[12] Id. at 220.

^[13] Penned by Presiding Commissioner Raul T. Aquino, with Commissioners Victoriano R. Calaycay and Angelita A. Gacutan, concurring; rollo, pp. 77-94.

^[14] Id. at 94.

^[15] Rollo, pp. 301-303.

^[16] Supra note 1.

^[17] Rollo, pp. 22-23.

^[18] Mapalo v. National Labor Relations Commission, G.R. No. 107940, June 17, 1994, 233 SCRA 266.

^[19] Midas Touch Food Corp. v. NLRC, G.R. No. 111639, July 29, 1996, 259 SCRA 652.

^[20] Gonzales v. NLRC, G.R. No. 131653, March 26, 2001, 355 SCRA 195, 207.

^[21] Rentokil (Initial) Philippines, Inc. v. Sanchez, G.R. No. 176219, December 23, 2008, 575 SCRA 324.

^[22] Aurelio v. NLRC, G.R. No. 99034, April 12, 1993, 221 SCRA 432.

^[23] The job description of petitioner in respondent company reads:

JOB DESCRIPTION: Appointed by the Board of Directors as Head of Marketing Group for the company. As Chief Marketing Officer, he is also a member of the Management Committee and is tasked to oversee the entire sales and Marketing operations. Duties and responsibilities include the following:

1. Report to the board of directors monthly as to the over-all production and performance of the company as far as sales is concerned[;]
2. Hire Marketing Associates as deemed necessary for the company expansion program[;]
3. Plan and organize the marketing activities of the company from day-to-day[;]
4. Create and develop strategic partnership with various organizations and companies for mutually eneficial business activities;
5. Develop the sales and marketing skills of the sales agents of the sister company, Herway Inc.[;]
6. Conduct Sales training and product seminars for the company[;]
7. Pursue high level client call to various institutions nationwide;
8. Delegate simultaneous marketing activities to marketing assistants;
9. Organize branch offices in strategic areas nationwide;
10. Train and develop sales agents for the company;
11. Update products and services for the company;
12. Over-all marketing strategist for the company;
13. Implement action plans set by the board of Directors and the Management committee.

(Rollo, p. 123.)

^[24] Rollo, p. 10.

^[25] Perez v. Medical City General Hospital, G.R. No. 150198, March 6, 2006, 484 SCRA 138.

^[26] Manila Electric Company v. NLRC, G.R. No. 90030, June 25, 1990, 186 SCRA 763.

^[27] Rentokil (Initial) Philippines, Inc. v. Sanchez, supra note 23.

^[28] Rollo, pp. 18-19.

^[29] Agabon v. NLRC, G.R. No. 158693, November 17, 2004, 442 SCRA 616.