JUST CAUSE IN EMPLOYMENT TERMINATION

FRAUD OR WILLFUL BREACH OF TRUST: JUST CAUSE IN EMPLOYMENT TERMINATION

By Atty.Fred |

ref=  https://pnl-law.com/blog/fraud-or-willful-breach-of-trust-authorized-cause-in-employment-termination/

 Article 297(c) of the Labor Code provides that an employee may be dismissed for “fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative.” This particular provision speaks of two grounds: (a) fraud; and (b) loss of trust and confidence. The latter is discussed in a separate post. 

For fraud to be a valid ground for termination, the following must be present:

• 1. There must be an act, omission, or concealment;

• 2. The act, omission or concealment involves a breach of legal duty, trust or confidence justly reposed;

• 3. It must be committed against the employer or his/her representative; and

• 4. It must be in connection with the employee’s work.

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.

Employees in the Philippines enjoy security of tenure. Under the Labor Code, no employee may be terminated or dismissed, except for just or authorized causes. The employer has the burden of proving, among others, that the facts support the elements of the cause used by the company to justify the employment termination. Each ground has specific elements. It is important, therefore, for management, or at least the HR staff, to be familiar with these factors. 

 

Article 297(a) of the Labor Code covers two just causes: serious misconduct, and willful disobedience (the latter ground is discussed in a separate post). Misconduct, defined as the transgression of some established and definite rule or action, a forbidden act, a dereliction of duty, willful in character and implies wrongful intent and not mere error in judgment, is not enough to justify a termination. It has to be serious misconduct. A misconduct is considered serious when:

• 1. There must be misconduct;

• 2. The misconduct must be of such grave and aggravated character;

• 3. It must relate to the performance of the employee’s duties; and

• 4. There must be showing that the employee becomes unfit to continue working for the employer.
  

 

 

Just causes: * 1. Serious misconduct * 2. Willful disobedience or insubordination * 3. Gross and habitual neglect of duties * 4. Fraud or willful breach of trust * 5. Loss of trust and confidence * 6. Commission of a crime or offense * 7. Analogous causes

Authorized causes: * 1. Installation of labor-saving devices * 2. Redundancy * 3. Retrenchment or downsizing * 4. Closure or Cessation of Operation * 5. Disease  * Also: Due Process in termination cases