Art. 277 [now Art. 294] of the Labor Code provides the manner of termination of employment, thus:

“xxx

Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just and authorized cause without prejudice to the requirement of notice under Article 283 of this Code, the employer shall furnish the worker whose employment is sought to be terminated a written notice containing a statement of the causes for termination and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires in accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor and Employment. Any decision taken by the employer shall be without prejudice to the right of the worker to contest the validity or legality of his dismissal by filing a complaint with the regional branch of the National Labor Relations Commission. The burden of proving that the termination was for a valid or authorized cause shall rest on the employer.”

Accordingly, the implementing rule of the aforesaid provision states:

SEC. 2. Standards of due process; requirements of notice.––In all cases of termination of employment, the following standards of due process shall be substantially observed:

1. For termination of employment based on just causes as defined in Article 282 of the Code:

(a) A written notice served on the employee specifying the ground or grounds for termination, and giving said employee reasonable opportunity within which to explain his side.

(b) A hearing or conference during which the employee concerned, with the assistance of counsel if he so desires is given opportunity to respond to the charge, present his evidence, or rebut the evidence presented against him.

(c) A written notice of termination served on the employee, indicating that upon due consideration of all the circumstances, grounds have been established to justify his termination.

In case of termination, the foregoing notices shall be served on the employee’s last known address.

To clarify, the following should be considered in terminating the services of employees:

(1) The first written notice to be served on the employees should contain the specific causes or grounds for termination against them, and a directive that the employees are given the opportunity to submit their written explanation within a reasonable period. “Reasonable opportunity” under the Omnibus Rules means every kind of assistance that management must accord to the employees to enable them to prepare adequately for their defense.15 This should be construed as a period of at least five (5) calendar

days from receipt of the notice to give the employees an opportunity to study the accusation against them, consult a union official or lawyer, gather data and evidence, and decide on the defenses they will raise against the complaint. Moreover, in order to enable the employees to intelligently prepare their explanation and defenses, the notice should contain a detailed narration of the facts and circumstances that will serve as basis for the charge against the employees. A general description of the charge will not suffice. Lastly, the notice should specifically mention which company rules, if any, are violated and/or which among the grounds under Art. 282 [now Art. 297] is being charged against the employees.

(2) After serving the first notice, the employers should schedule and conduct a hearing or conference wherein the employees will be given the opportunity to: (1) explain and clarify their defenses to the charge against them; (2) present evidence in support of their defenses; and (3) rebut the evidence presented against them by the management. During the hearing or conference, the employees are given the chance to defend themselves personally, with the assistance of a representative or counsel of their choice. Moreover, this conference or hearing could be used by the parties as an opportunity to come to an amicable settlement.

(3) After determining that termination of employment is justified, the employers shall serve the employees a written notice of termination indicating that: (1) all circumstances involving the charge against the employees have been considered; and (2) grounds have been established to justify the severance of their employment.

As to whether or not the company should conduct a hearing or conference prior to dismissal, the Supreme Court held in the case of Perez vs. PT&T (G.R. NO. 152048 : April 7, 2009]), that:

The following are the guiding principles in connection with the hearing requirement in dismissal cases:

(a) “ample opportunity to be heard” means any meaningful opportunity (verbal or written) given to the employee to answer the charges against him and submit evidence in support of his defense, whether in a hearing, conference or some other fair, just and reasonable way.

(b) a formal hearing or conference becomes mandatory only when requested by the employee in writing or substantial evidentiary disputes exist or a company rule or practice requires it, or when similar circumstances justify it.

(c) the “ample opportunity to be heard” standard in the Labor Code prevails over the “hearing or conference” requirement in the implementing rules and regulations.

Below is a sample script or guide to follow in conducting a hearing / conference on the part of HR Practitioner or Business Owner (in Filipino). The sample is about a case involving moonlighting:

Preliminaries:

Good morning!

Maraming Salamat sa pagdalo sa hearing/conference na ito. Ang proceeding ay isang conference para kay _______________________________, na sumasailalim sa imbestigasyon hinggil sa moonlighting o pagkakaroon ng ibang employer habang siya ay empleyado ng kompanyang ito.

Ang pagdinig na ito ay pagkakataon sa iniimbestigahan upang lalo pang maipaliwanag ang kanyang panig. Hindi ito korte para magpatagisan ng argumento kundi upang ihayag ang katotohanan. Pinaiiral natin ang respeto sa isa’t-isa.

Panatilihin nating maayos, payapa at matiwasay ang proseso. Kapag nagkaroon ng hindi magandang pangyayari ang proseso ay isususpinde o hindi na itutuloy kung hinihiling ng pagkakataon.

Ayon sa talaan ng attendance sheet, ang mga dumalo sa pagdinig na ito ay sina:

X, who represents HR

Y, who represents the management

Z, who is the employee being charged

AA, is Z’s support person

Ang tanong ay dapat sagutin ng empleyado. Kung ang sagot ay oo dapat banggitin ito at hindi lamang ang pag-tango. Kung hindi ang sagot dapat din banggitin at hindi sapat ang pag-iling lamang.

Bilang panuntunan sa hearing/conference, ang empleyadong iniimbestigahan lamang ang maaring sumagot sa mga tanong. Hindi maaring sumagot ang kanyang support person. Ang support person ay maaring magbigay ng payo sa pribadong paraan subalit hindi siya maaring sumagot ng tanong para sa empleyado.

Hindi maaring magresolba ng anumang objection ang hearing officer. Maari nya lamang isulat ang anumang objections ngunit hindi ito dahilan para hindi sagutin ang tanong.

Ang pagdinig ay naka-rekord at mayroong Minutes na gagawin.

1. Ms. ______________________, makikita sa record na natanggap mo ang NTE noong ____________, 202__, tama ba?

2. Nagsumite ka rin ng iyong written reply, tama ba?

3. Ikaw ay pinagpapaliwanag sa diumano’y pag-moonlighting o pagkakaroon ng iba pang employer maliban sa Company X.

4. Maari mo bang banggitin ang pangalan ng employer na pinasukan mo na pinagsabay mo sa Company X?

5. Kailan ka pa nagsimula sa kompanya na ‘yan? Alam ba ng may-ari na ikaw ay may trabaho sa Company X?

6. Anong araw ang pasok mo sa employer na yan at anong oras?

7. Mga Gaano karami ang inaasikaso mong Kliyente sa Competitor, Inc. sa isang araw?

8. Hanggang sa pagakakataong ito nanatili ka bang namamasukan sa Competitor, Inc. na ‘yan?

9. Ano ang iyong ginagawa o function sa Competitor, Inc.?

10. May naghimok ba sa ‘yo na pumasok sa Competitor, Inc. kasabay ng employment mo sa Company X? Kung meron, sino?

11. Hanggang kelan mo balak na mamamasukan sa Competitor, Inc.?

Iyon lamang ang mga katanungan.

Ang lupon na ito ay susumite ng report sa pamunuan hinggil sa resulta ng pagdinig. Walang kapangyarihan ang lupon na ito upang magbigay ng pagpapasya. Ang rekomendasyon ay isusumite upang pag-aralan ng pamunuan.

Kung mayroon ka pang nais isumite, binibigyan ka ng hanggang tatlong araw para ibigay sa HR.

Muli, maraming Salamat at magandang araw.

See here the procedure to observe when the employee refuses to receive employer’s notice.

In addition, the company should send another copy by registered mail and keep the registry receipt for future reference.

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Notice to Explain: Contents and Requirements

Loss of trust and confidence is a just cause for dismissal under Article 282(c) [now 297] of the Labor Code, which provides that an employer may terminate an employment for fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative. [Distribution & Control Products, Inc. vs. Santos, July 10, 2017, G.R. No. 212616]

However, according to the Supreme Court (SC), in order for the employer to properly invoke this ground, the employer must satisfy two conditions.

First, the employer must show that the employee concerned holds a position of trust and confidence. Jurisprudence provides for two classes of positions of trust.

The first class consists of managerial employees, or those who, by the nature of their position, are entrusted with confidential and delicate matters and from whom greater fidelity to duty is correspondingly expected. The second class includes cashiers, auditors, property custodians, or those who, in the normal and routine exercise of their functions, regularly handle significant amounts of the employer’s money or property.

Second, the employer must establish the existence of an act justifying the loss of trust and confidence. To be a valid cause for dismissal, the act that betrays the employer’s trust must be real, i.e., founded on clearly established facts, and the employee’s breach of the trust must be willful, i.e., it was done intentionally, knowingly and purposely, without justifiable excuse.

Moreover, with respect to rank-and-file personnel, loss of trust and confidence, as ground for valid dismissal, requires proof of involvement in the alleged events in question, and that mere uncorroborated assertions and accusations by the employer will not be sufficient.

Stated differently, proof beyond reasonable doubt is not needed to justify the loss as long as the

employer has reasonable ground to believe that the employee is responsible for the misconduct and his participation therein renders him unworthy of the trust and confidence demanded of his position.

Nonetheless, the right of an employer to dismiss employees on the ground of loss of trust and confidence, however, must not be exercised arbitrarily and without just cause. Unsupported by sufficient proof, loss of confidence is without basis and may not be successfully invoked as a ground for dismissal. Loss of confidence as a ground for dismissal has never been intended to afford an occasion for abuse by the employer of its prerogative, as it can easily be subject to abuse because of its subjective nature and the loss must be founded on clearly established facts sufficient to warrant the employee’s separation from work.

Thus, when the breach of trust or loss of confidence alleged is not borne by clearly established facts, as in this case, such dismissal on the cited grounds cannot be allowed.

For instance, in a charge of theft of company property, the company should be able to discharge the burden of proving that their termination of employee’s employment was for a just and valid cause. This is a question of fact and it is settled that findings of fact of quasi-judicial agencies are accorded great respect, even finality.

Where the company failed to present substantial evidence to support their allegations that the employee had, in any way, participated in the theft of the company’s stolen items and that after his preventive suspension he no longer reported for work. In other words, if the company is not able to establish the existence of an act justifying their alleged loss of trust and confidence in employee, the dismissal can be held illegal.

See here the procedure to observe when the employee refuses to receive employer’s notice.

In addition, the company should send another copy by registered mail and keep the registry receipt for future reference.

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Article 297 of the Labor Code enumerates the just causes for termination. It provides:

ARTICLE 297. Termination by employer. – An employer may terminate an employment for any of the following causes:

(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work;

x x x

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

(d) Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representative; x x x

Misconduct is defined as “the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in judgment.

For serious misconduct to justify dismissal under the law,

(a) it must be serious,

(b) must relate to the performance of the employee’s duties; and

(c) must show that the employee has become unfit to continue working for the employer.

In a case where the employees illegally sold in Tarlac excess broilers and crates and were involved in the anomalous transactions, the Supreme Court held that these acts constitute Serious Misconduct which would warrant the supreme penalty of dismissal. (JR Hauling Services vs. Solamo, G.R. No. 214294, September 30, 2020)

Below is a sample Notice to Explain (NTE) for serious misconduct involving theft of company property with preventive suspension.

To:             MAGNO N. AKAO       

                  Sales Representative

From:         HR

Date:          _____ September _____

Subject:     NOTICE TO EXPLAIN (NTE) WITH PREVENTIVE SUSPENSION

It appears in our records that the company had excess broilers and crates that you delivered to Tarlac on ____.

As a matter of procedure, any excess of the company products and property should be turned over accordingly within twenty-four (24) hours. However, no such turnover was made on your part.

In this regard, please explain in writing within five (5) calendar days from receipt of this notice why no disciplinary action should be taken against you for the above, the penalty of which may result in dismissal if the evidence warrants.

Likewise, you are placed on preventive suspension effective immediately considering that your acts constitute serious and imminent threat on the property of the company.

Failure on your part to submit your written explanation within the prescribed period shall be deemed as waiver of your right to due process.

For your strict compliance.

GALICHA K. AWATAN

HR Manager

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Previous offenses may be used to aggravate a subsequent infraction to justify an employee’s dismissal only if they are related to the subsequent offense upon which termination is  decreed. (Celis vs. Bank of Makati (A Savings Bank), Inc., G.R. No. 250776. June 15, 2022)

In the Celis case, the Supreme Court (SC) reckons that in 2016, the company previously found the employee liable for the following infractions: (1) improper conduct and acts of gross discourtesy or disrespect to fellow employees; and (2) personal borrowing from the bank’s clients.

On account of these infractions, the company placed Celis under a 10-day and 15-day suspension, respectively.

The SC ratiocinated that while Celis had committed two previous offenses, the Principle of Totality of Infractions cannot be utilized against her as she committed no subsequent violation of respondent’s Code of Conduct. She did not commit the subject infraction. Simply put, there is no subsequent offense which her previous infractions could aggravate.

But even assuming that Celis had committed the subject infraction, the CA still erred in applying the Principle of Totality of Infractions considering that her previous infractions and the subject offense

upon which her termination was decreed were in no way related to each other.

Instructive on this matter is the case of Sy vs. Neat, Inc., wherein the SC ruled that the Principle of Totality of Infractions cannot be used against the employee because his transgression for wearing an improper uniform was not related to his latest infractions of insubordination and purported poor performance evaluation.

Previous offenses may be used as valid justification for dismissal only if they are related to the subsequent offense upon which the basis of termination is decreed, or if they have a  bearing on the proximate offense warranting dismissal.

In the case of De Guzman vs. NLRC, the SC ruled that the Principle of Totality of Infractions applies when prior infractions are similar to the subsequent offense. In such case, the SC instructs that the previous offense that employee involved had committed on 3 July 1993 for willful refusal to perform one’s assigned work or to comply with instruction of supervisor, for which she had been administered a sufficient disciplinary sanction of six days suspension, could no longer be utilized to aggravate the present offense.

De Guzman’s previous offense was an entirely separate and distinct violation of company rules. The SC held that the correct rule is that previous infractions may be used as justification for an employee’s dismissal from work in connection with a subsequent similar offense.

For the SC, in the Celis case, the first offense of Celis, i.e., discourtesy or disrespect to fellow employees, was an offense concerning improper behavior towards co-workers. On the other hand, her second offense, i.e., personal borrowing from the   bank’s clients, was a transgression relating to conflict of interest. The subject infraction differs from the aforementioned offenses in that, the subject infraction concerns dishonesty.

Celis’ infractions not being related or similar in nature to the present charge, the CA erred in applying the Principle of Totality of Infractions against her. Indubitably, the company failed to substantially prove that her dismissal from employment was for a just cause.

All told, the SC found substantial evidence to support the finding that the company illegally dismissed Celis from employment. Thus, the CA erred in imputing grave abuse of discretion against the NLRC. The SC agreed with the labor tribunals that Celis was indeed illegally terminated from her job.

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Where the fact of employee’s dismissal from service is undisputed by the parties, the crux of the issue therefore lies on whether the supposed transgressions of employee are supported by substantial evidence, and whether they are considered just causes for their dismissal.

In the case of JR Hauling Services vs. Solamo, (G.R. No. 214294, September 30, 2020), the Supreme Court held that it is a well-established rule that the party-litigant who alleges the existence of a fact or thing necessary to establish his/her claim has the burden of proving the same by the amount of evidence required by law, which, in labor proceedings, is substantial evidence, or “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.”

In the hierarchy of evidentiary values, proof beyond reasonable doubt is placed at the highest level, followed by clear and convincing evidence, preponderance of evidence, and substantial evidence, in that order.

Thus, in the hierarchy of evidence, it is the least demanding. Corollarily, the ground for the dismissal of an employee does not require proof beyond reasonable doubt.

The quantum of proof required is merely substantial evidence – which only entails evidence to support a conclusion, “even if other minds, equally reasonable, might conceivably opine otherwise.” Accordingly, requiring a quantum of proof that is over and above substantial evidence is contrary to law.

Citing the case of Manila Electric Company vs. National Labor Relations Commission, the SC held further that the ground for an employer’s dismissal of an employee need be established only by substantial evidence, it not being required that the former’s evidence be of such degree as is required in criminal cases, i.e., proof beyond reasonable doubt.

It is absolutely of no consequence that the misconduct with which an employee may be charged also constitutes a criminal offense: theft, embezzlement, assault on another employee or company officer, arson, malicious mischief, etc.

The proceedings being administrative, the quantum of proof is governed by the substantial evidence rule and not, as the NLRC seems to imagine, by the rule governing judgments in criminal actions.

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Among these grounds are as follows: (See citations in Atty. Elvin’s Book Guide to Valid Dismissal of Employees Second Edition, p. 212)

1. Any union officer who knowingly participates in an illegal strike may be declared to have lost his employment status. In this instance, the union officer must have knowledge that the strike to which he participates in is illegal;
2. Any worker or union officer who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his employment status. This is the case whether the strike is legal or illegal;
3. Strikers, who violate orders, prohibitions and/or injunctions as are issued by the Secretary of Labor and Employment or the NLRC, may be imposed immediate disciplinary action, including dismissal or loss of employment status;
4. Violation of the union security clause stipulated in the CBA pursuant to Article 248 [e] of the

   

   Labor Code may result in termination of employment. The contracting union can demand from the employer the dismissal of an employee who commits a breach of union security arrangement, such as failure to join the union or to maintain his membership in good standing there- in. The contracting union can also demand for the dismissal of a member who commits an act of disloyalty to the union, such as when the member organizes a rival union.

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Such other causes must be analogous to any of the following:

1. Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work;
2. Gross and habitual neglect by the employee of his duties;
3. Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative; and
4. Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representatives;

For an employee to be validly dismissed for a cause analogous to those enumerated in Article 297, the cause must involve a voluntary and/or willful act or omission of the employee.

In the old case of Nadura vs. Benguet Consolidated the employer claims that asthma is an illness that is analogous to causes of dismissal in the then governing law RA 1787 which carries almost the same

enumeration as the current Article 297 of the Labor Code.

In denying the claim, the Supreme Court ruled that it is clear that, except the just cause mentioned in subparagraph 1(a) all the others expressly enumerated in the law are due to the voluntary and/or willful act of the employee. How Nadura’s illness could be considered as “analogous” to any one of them is beyond the Court’s understanding, there being no claim or pretense that the same was contracted through his own voluntary act.

There is no exact parameter that will determine that a particular act falls under analogous causes. However, one must be guided by jurisprudence like the following: (See citations from Atty. Elvin’s book Guide to Valid Dismissal of Employees 2^nd Edition)

1. Stealing of co-employee’s credit cards;
2. Theft committed by an employee against a per- son other than his employer, if proven by substantial evidence, is a cause analogous to serious misconduct
3. Violation of company rules and regulations;
4. Attitude problem of an employee who cannot get along with co-employees, if proven, may be cause for dismissal. It affects the work environment and peace of the company;
5. The harassment of an employee by a co- employee within the company premises even after office hours is a work-related matter considering that the peace of the company is thereby affected. In this case a male employee embraced and kissed a female co-worker causing pains in the foot and shoulder of the latter.
6. Incompetence or inefficiency;
7. Failure to make work quota; and
8. Obesity of a flight attendant. This constitutes his failure to meet the employer’s qualifying standards.

Under Department of Labor and Employment’s (DOLE) Department Order (DO) No. 147-15, for analogous cause to be valid ground for termination, the following must be present:

1. There must be act or omission similar to those specified just causes; and
2. The act or omission must be voluntary and/or willful on the part of the employees.

Further, the DO states that no act or omission shall be considered as analogous cause unless expressly specified in the company rules and regulations or policies.

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In the case of a managerial employee who is faced with investigation for willful breach of trust, he gives up the guarantee considering the rule that an employee who is reposed with trust and confidence can be easily dismissed for willful breach of such trust given the proven circumstances and substantial evidence.

While the rule in the case of Villanueva vs. National Labor Relations Commission (Rolia Villanueva vs. National Labor Relations Commission, G.R. No. 129413, July 27, 1998.) espouses that a rank and file employee who ascends to managerial position sheds off certain guaranties of his lower position, he must still be accorded the rights in relation to his security of tenure.

Thus, the right of the management to dismiss must be balanced against the managerial employee’s right to security of tenure which is not one of the guaranties he gives up.

Although the standards for their dismissal are less stringent, the loss of trust and confidence must be substantial and founded on clearly established facts sufficient to warrant the managerial employee’s separation from the company. Substantial evidence is of critical importance and the burden rests on the employer to prove from the company.

Due to its subjective nature, it can easily be concocted by an abusive employer and used as a subterfuge for causes which are improper, illegal or unjustified. In the termination of managerial employees based

on loss of trust and confidence, the employer’s evidence must clearly and convincingly establish the facts and incidents upon which the loss of confidence may fairly be made to rest.

One of the nightmares of a manager is to be held responsible for acts which he never committed or which he was not part of. But things like that happen due to his command responsibility.

His liability in such instance boils down to his neglect of duty. Thus, on the principle of respondeat superior or command responsibility alone, managerial employees may be held liable for negligence in the performance of their managerial duties, unless they can positively show that they were not involved. Their position requires a high degree of responsibility that necessarily includes unearthing of fraudulent and irregular activities.

In a case where a manager for the Healthcare Division was charged for her failure to report the anomalous transaction within her division involving fictitious invoices, her dismissal was upheld on account of command responsibility. Her duties, among others, were to detect fraudulent activities and irregularities within her Division and thereafter report the same to management.

Her position demands that she manage, control and take responsibility over activities in her department. It requires a high degree of responsibility that necessarily includes unearthing of fraudulent and irregular activities. This, she

failed to do. Her ‘bare, unsubstantiated and uncorroborated denial’ of her participation in the anomalies does not prove her innocence nor disprove her alleged guilt. On the contrary, such denial or failure to rebut the serious accusations hurled against her militate against her innocence and strengthened the adverse averments of the company.

The ordinary rule is that one who has knowledge peculiarly within his control, and refuses to divulge it, cannot complain if the court puts the most unfavorable construction upon his silence, and infers that a disclosure would have shown the fact to be as claimed by the opposing party.

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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.

Also, the act complained of should have arisen from the performance of the employee’s duties.

Thus, an accounting clerk of a bank whose duty in- volves opening of savings, current and/or time deposits and the payment of withdrawals cannot be dismissed for acts related to bank guarantees, which is the responsibility of the branch manager and the management personnel of the company’s head office.

In order to constitute as just cause for dismissal, loss of confidence should relate to acts inimical to the interests of the employer. Breach must be related to the performance of the employee’s function.

The position itself should require trustworthiness from an employee for breach of trust to prosper as a valid ground for dismissal. It must be a position reposed with trust and confidence.

Loss of confidence applies to: (1) employees occupying positions of trust and confidence, the managerial employees; and (2) employees who are routinely charged with the care and custody of the employer’s money or property which may include rank-and-file employees.

Examples of rank-and-file employees who may be dismissed for loss of confidence are cashiers, auditors, property custodians, or those who, in the normal routine exercise of their functions, regularly handle significant amounts of money or property.

The law defines position of trust and confidence as one where a person is entrusted with confidence on delicate matters, or with the custody, handling, or care and protection of the employer’s property.

As held in the case of Eats-Cetera Food Services vs. Myrna B. Letran And Mary Grace Espadero, a position of trust and confidence has been defined as one where a person is entrusted with confidence on delicate matters, or with the custody, handling, or care and protection of the employer’s property and/or funds.

One such position is that of a cashier. A cashier is a highly sensitive position which requires absolute trust and honesty on the part of the employee.

It pertains to an employee where greater trust is placed by management and from whom greater fidelity to duty is correspondingly expected. The betrayal of this trust is the essence of the offense for which an employee is penalized.

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Fraud is never presumed. It must be proved. It cannot be based on nebulous facts.

Fraud and misrepresentation are, therefore, never presumed; it must be proved by clear and convincing evidence and not mere preponderance of evidence. (Solidbank Corporation v. Mindanao Ferroalloy Corporation, G.R. No. 153535, July 28, 2005, 464 SCRA 409, 426; Republic of the Philippines v. Institute for Social Concern, G.R. No. 156306, January 28, 2005, 449 SCRA 512, 521-522; Spouses Morandarte v. Court of Appeals, G.R. No. 123586, August 12, 2004, 436 SCRA 213, 223; and Maestrado v. Court of Appeals, 384 Phil. 418, 435 (2000).)

Hence, the Supreme Court does not sustain findings of fraud upon circumstances which, at most, create only suspicion; otherwise, it would be indulging in speculations and surmises.

In a case where the employee questions her dis- missal due to the fact that the company failed to prove damage or losses on its part, the Supreme Court held that:

“The fact that private respondent did not suffer losses from the dishonesty of the petitioner because of their timely discovery does not excuse the latter from any culpability. Indeed, the law, in protecting the rights of workers, authorizes neither oppression nor self-destruction of the employer. In this regard, a company has the right to dismiss its employees as a measure of self-protection.” (Rolia Villanueva vs. National Labor Relations Commission, G.R. No. 129413 July 27, 1998.)

Further, the fact that the employer failed to show it suffered losses in revenue as a consequence of em- ployee’s questioned act is immaterial. The fact that the employee attempted to deprive petitioner of its lawful revenue is tantamount to fraud against the company, which warrants dismissal from the service.

Actual loss against the company is not necessary to establish fraud as an offense. It must be stressed that actual defraudation is not necessary in order that an employee may be held liable under the aforequoted rule. That employee attempted to deprive employer of its lawful revenue is already tantamount to fraud against the company, which warrants dismissal from the service.

Even if it is to be argued that the employer suffered no damage since the employee has settled his account, the rule is clear that it is betrayal of trust and confidence that is the reason for termination. The fact that there was ultimately no monetary damage is of no moment.

Restitution of property taken by the errant employee does not erase the offense committed.

Hence, even if the shortages have been fully restituted, the fact that the employee has misappropriated company funds is a valid ground to terminate his services for loss of trust and confidence.

In another case, misappropriation of company funds, although the shortages had been fully restituted, is a valid ground to terminate the services of an employee of the company for loss of trust and confidence.

In the final analysis, an employer cannot be compelled to retain in his service an employee who is guilty of acts inimical to its interest. A company has the right to dismiss its employees as a measure of protection.

Learn how to Validly Terminate Employee in the Philippines with this Tutorial Video of Atty. Elvin

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