Dear Atty. Maan,

I have been working at a toy manufacturing company for the past decade. Last week, our team manager was caught with various valuable toy parts during a routine outgoing inspection for which she had no authorization to take from the warehouse. Although she was given a chance to explain, her employment was eventually terminated for stealing company property and loss of trust and confidence. She had been with the company for more than two decades. Do you think the termination was commensurate with the offense she committed, Atty?

Elaine

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Dear Elaine,

Article 297. [282] of the Labor Code of the Philippines provides: Termination by Employer. — An employer may terminate an employment for any of the following causes:

(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative[.]

Further, the Supreme Court ruled in various cases that Two requisites must concur for a valid termination of employment due to loss of trust and confidence.

First. Breach of trust and confidence must be premised on the fact that the employee concerned holds a position of trust and confidence, where greater trust is placed by management and from whom greater fidelity to duty is correspondingly expected. The essence of the offense for which an employee is penalized is the betrayal of such trust.

In the case of Wesleyan University Phils. v Reyes, employees vested with trust and confidence were divided into two classes: (a) the managerial employees; and (b) the fiduciary rank-and-file employees. As explained by the Court:

To the first class belong the managerial employees or those vested with the powers or prerogatives to lay down management policies and to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees or effectively recommend such managerial actions.

The second class includes those who in the normal and routine exercise of their functions regularly handle significant amounts of money or property. Cashiers, auditors, and property custodians are some of the employees in the second class.

Second. There must be some basis for the loss of trust and confidence. The employer must present clear and convincing proof of an actual breach of duty committed by the employee by establishing the facts and incidents upon which the loss of confidence in the employee may fairly be made to rest. This means that "the employer must establish the existence of an act justifying the loss of trust and confidence." Otherwise, employees will be left at the mercy of their employers.

Presence of the above-mentioned conditions would warrant the validity of termination on the ground of breach of trust and confidence under the law.

Hope this helps.

Atty. Mary Antonnette Baudi