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Employee dismissal; loss of trust and confidence.

The Labor Code recognizes that an employer, for just

cause, may validly terminate the services of an employee for serious misconduct or willful
disobedience of the lawful orders of the employer or representative in connection with the
employees work. Fraud or willful breach by the employee of the trust reposed by the employer in the
former, or simply loss of confidence, also justifies an employees dismissal from employment. Willful
breach of trust or loss of confidence requires that the employee (1) occupied a position of trust or (2)
was routinely charged with the care of the employers property. To warrant dismissal based on
loss of confidence, there must be some basis for the loss of trust or the employer must have
reasonable grounds to believe that the employee is responsible for the misconduct that
renders the latter unworthy of the trust and confidence demanded by his or her position. For
more than a month, the petitioners did not even inform PLDT of the whereabouts of the plant
materials. Instead, he stocked these materials at his residence even if they were needed in the daily
operations of the company. In keeping with the honesty and integrity demanded by his position, he
should have turned over these materials to the plants warehouse. Thus, PLDT reasonably
suspected petitioner of stealing the companys property. At that juncture, the employer may already
dismiss the employee since it had reasonable grounds to believe or to entertain the moral conviction
that the latter was responsible for the misconduct, and the nature of his participation therein
rendered him absolutely unworthy of the trust and confidence demanded by his position. Romeo E.
Paulino vs. NLRC, Philippine Long Distance Co., Inc. G.R. No. 176184, June 13, 2012.

Employee dismissal; loss of trust and confidence. Loss of confidence as a just cause for dismissal was
never intended to provide employers with a blank check for terminating their employees. It should
ideally apply only to cases involving employees occupying positions of trust and confidence or to
those situations where the employee is routinely charged with the care and custody of the
employers money or property. To the first class belong managerial employees, i.e., those vested
with the powers or prerogatives to lay down management policies and/or to hire, transfer, suspend,
lay-off, recall, discharge, assign or discipline employees or effectively recommend such managerial
actions; and to the second class belong cashiers, auditors, property custodians, etc., or those who,
in the normal and routine exercise of their functions, regularly handle significant amounts of money
or property.
The first requisite for dismissal on the ground of loss of trust and confidence is that the
employee concerned must be one holding a position of trust and confidence. The second
requisite is that there must be an act that would justify the loss of trust and confidence.
Vallotas position as Junior Programmer is analogous to the second class of positions of trust and
confidence. Though he did not physically handle money or property, he became privy to confidential
data or information by the nature of his functions. At a time when the most sensitive of information is
found not printed on paper but stored on hard drives and servers, an employee who handles or has
access to data in electronic form naturally becomes the unwilling recipient of confidential information.
There was no other evidence presented to prove fraud in the manner of securing or obtaining the
files found in Vallotas computer. The presence of the files would merely merit the development of
some suspicion on the part of the employer, but should not amount to a loss of trust and
confidence such as to justify the termination of his employment. Such act is not of the same
class, degree or gravity as the acts that have been held to be of such character. Prudential
Guarantee and Assurance Employee Labor Union and Sandy T. Vallota vs. NLRC, Prudential Guarantee and
Assurance Inc., and/or Jocelyn Retizos. G.R. No. 185335, June 13, 2012.

Employee dismissal; loss of trust and confidence. To validly dismiss an employee on the ground of loss
of trust and confidence under Article 282 (c) of the Labor Code of the Philippines, the following
guidelines must be observed: 1) loss of confidence should not be simulated; 2) it should not be used
as 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; and 4) it must be genuine, not a mere
afterthought to justify earlier action taken in bad faith. More importantly, it must be based on a willful
breach of trust and founded on clearly established facts. The testimony of Lobitaa constitutes
substantial evidence to prove that respondent, as the then Power Plant Manager, accepted
commissions and/or kickbacks from suppliers, which is a clear violation of Section 2.04 of
petitioners Company Rules and Regulations. Jurisprudence consistently holds that for managerial
employees, the mere existence of a basis for believing that such employee has breached the trust of
his employer would suffice for his dismissal. Respondents termination was for a just and valid
cause. Apo Cement Corporation Vs. Zaldy E. Baptisma. G.R. No. 176671. June 20, 2012.

G.R. No. 202158 September 25, 2013



Under Article 293 (formerly Article 279) of the Labor Code,28 an employer shall not terminate the
services of an employee except only for a just or authorized cause. A dismissal not anchored on a
just or authorized cause is considered illegal and it entitles the employee to reinstatement or in
certain instances, separation pay in lieu thereof, as well as the payment of backwages.

Article 296(c) (formerly Article 279[c]) of the same Code29 codifies the just causes of termination,
among which is the employers loss of trust and confidence in its employee, the ground cited by
GTBI in dismissing the petitioner.

Loss of trust and confidence will validate an employees dismissal only upon compliance with certain
requirements, namely: (1) the employee concerned must be holding a position of trust and
confidence; and (2) there must be an act that would justify the loss of trust and confidence.30

There are two classes of positions of trust. First, are the managerial employees whose primary duty
consists of the management of the establishment in which they are employed or of a department or
a subdivision thereof, and to other officers or members of the managerial staff. The second class
consists of the fiduciary rank-and-file employees, such as cashiers, auditors, property custodians, or
those who, in the normal exercise of their functions, regularly handle significant amounts of money
or property. These employees, though rank-and-file, are routinely charged with the care and custody
of the employers money or property, and are thus classified as occupying positions of trust and

It is undisputed that at the time of his dismissal, the petitioner was holding supervisory position after
having risen from the ranks since the start of his employment. His position is unmistakably one
imbued with trust and confidence as he is charged with the delicate task of overseeing the
operations and manpower of three stores owned by GTBI. As a supervisor, a high degree of honesty
and responsibility, as compared with ordinary rank-and-file employees, was required and expected
of him. The fact that he was not charged with the custody of the companys money or property is in
consequential because he belongs to the first class of employees occupying position of trust and not
to the fiduciary rank and file class.

The second requirement for dismissal due to loss of trust and confidence is further qualified by
jurisprudence. The complained act must be work related such as would show the employee
concerned to be unfit to continue working for the employer and it must be based on a willful breach
of trust and founded on clearly established facts.32 The basis for the dismissal must be clearly and
convincingly established but proof beyond reasonable doubt is not necessary.33

G.R. No. 200898 June 15, 2015


INSURANCE COMPANY (now Fortune General Insurance Corporation) and/or ANTONIO
CABANGON CHUA, Petitioners,

In illegal dismissal cases, the employer has the burden of proving that the employees dismissal was
legal. However, to discharge this burden, the employee must first prove, by substantial evidence,

that he had been dismissed from employment.32

Just cause must be proven with

substantial evidence at the time of

At its core, substantive due process guarantees a right to liberty that cannot be taken away or unduly
constricted, except through valid causes provided in the law.50

The concepts of procedural and substantive due process had been carried over and applied to illegal
dismissal cases, although notably, employers are not governmental bodies to which these rights
usually refer. Agabon v. NLRC51 described the due process required in dismissing employees as
statutory requirements that the law imposes on employers to comply with, in contrast to
constitutional due process rights that guarantee against overreach from the government.

Although statutory in nature, the procedural and substantive due process requirements in illegal
dismissal cases stem from the protection that the Constitution provides labor the Constitution has
tasked the State to promote the workers security of tenure, humane conditions of work, and a living
wage.52 These guarantees, as well as a host of other rights and responsibilities,53 find implementation
through the Labor Code, which fleshed out the concept of security of tenure54 as the continuance of
regular employment until an employee's services are terminated because of just or authorized
causes enumerated in the law.

Thus, despite the differences in origin and application between constitutional due process rights and
the statutory requirements in the Labor Code, we have applied concepts implementing constitutional
due process rights to the statutory due process requirements of the Labor Code. We did this in the
present case, when we emphasized the need for substantial evidence to support the just cause for
the employee's dismissal at the time her services were terminated. In the same way that the crime
charged against an accused must first be proven before his or her right to liberty is taken away, or
that a government employee's infraction must first be proven before the accused is deprived of the
right to continue !o hold office, so too, must just cause against an employee be proven before he or
she may be deprived of a means of livelihood. Otherwise, the employee's right to substantive due
process would be violated.
In these lights, and in order to give full effect to the embodiment of substantive due process in illegal
dismissal cases, it is necessary to rule, that an employee, in this present case Casas, cannot be
terminated from service without sufficient substantial evidence of the just cause that would merit her