FACTS: Elsie Esculano is the Personnel Officer of Surigao Electric Cooperative. An employee named Cosette Quinto filed a letter to General Manager Eugenio Balugo regarding her separation pay, but it was unheeded by Surigao. Four months later, Quinto asked Esculano to follow up with Balugo on her case, but when no response was begotten, Esculano had concluded in her report that Quinto was denied some due process regarding her dismissal, however this letter was not directly given to Quinto. Nonetheless, Quinto used this as basis to file a complaint, but was denied due to technicality, i.e. prescription. Balugo afterwards sent a letter to Esculano saying that she was never commissioned to take the case of Quinto, and asked that she should explain herself under pain of dismissal. Unsatisfied with her explanation, she was dismissed due to serious misconduct and loss of trust and confidence.

ISSUE: Whether or not Esculano was legally dismissed on the grounds of loss of trust and confidence and serious misconduct?

DECISION: The Court ruled in favor of Esculano, and that her actions were not a willful breach of trust and confidence, and that her actions were not against the interests of the cooperative. It was hardly serious misconduct of Esculano, because she was acting well within her authority as a manager, a job that requires independent judgment. Misconduct would mean some established rule or motive was violated, but Esculano was merely doing her job. Disagreeing on the assessment of Esculano cannot be equated to serious misconduct. Finally, loss of trust and confidence cannot be faulted to Esculano, since the Court found that Quinto obtained a copy of the report in other ways, not from Esculano.