Reasonable basis

A LAW EACH DAY (Keeps Trouble Away) By Jose C. Sison

(The Philippine Star) | February 4, 2015

Usually, managerial employees are dismissed for breach of trust because they are holding positions of
trust and confidence. But this case of Liza shows that even rank and file employees may be dismissed on
the same ground.

Liza was first hired as accounting clerk by a company mainly engaged in cash transfer business assigned
in one of its branches in a southern city for which she received a basic monthly salary of P9,500. After
almost six years of service without any previous infractions of company rules, and when she was already
performing the function of vault custodian and cashier in the branch electronically posting the days
transactions in the books of accounts, it was discovered that a cash surplus of P540 was not recorded at
the end of the day and not reported immediately to her supervisor.

When told to explain, Liza admitted that she was not able to report the overage to the supervisor since
the latter was on leave that day and that she was still tracing the overage. Besides she said that the
omission or failure to report immediately was just a simple mistake without intent to defraud the company.

But after formal investigation the company still terminated her employment on the grounds of serious
misconduct and breach of trust.

So Liza filed a complaint for illegal dismissal, separation pay and other damages against the company.
After due hearing, the Labor Arbiter (LA) dismissed her complaint for lack of merit since the facts show
that instead of reporting the overage immediately, or recording it in the operating system of the company,
Liza had set aside the amount of P540 for her personal use. So her termination was valid and based not
on a mere act of simple negligence.

On appeal however, the National Labor Relations Commission (NLRC) reversed the LA’s decision and
ruled that the latter utterly disregarded the rule of proportionality of the penalty imposed which should be
commensurate to the gravity of the offense. The NLRC said that Liza’s omission or procedural lapse did
not cause any loss or damage to the company. So it ordered the company to pay Liza full back-wages
and separation pay instead of re-instatement with 10% interest on the total amount due. This ruling was
further affirmed by the Court of Appeals. Were the CA and the NLRC correct?

No. Liza was charged not only with serious misdeed but with loss of trust and confidence since she was
routinely charged with the care and custody of the employer’s money or property and thus considered as
occupying a position of trust and confidence even if she belongs to the rank and file. While no significant
financial injury was sustained by the company, her misconduct could be considered as a simple
negligence because she held a position of utmost confidence in the company.

In order that an employer may invoke loss of trust and confidence as a ground for terminating an
employee under Article 282© of the Labor code, it must be shown that; (1) the employee 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. Such requirements do not require proof beyond reasonable doubt, it being sufficient that
there is some reasonable basis to believe that the employee concerned is responsible for the misconduct
and that the nature of the employee’s participation therein rendered him unworthy of trust and confidence
demanded by his position. A cashier’s inability to safeguard and account for the missing cash is sufficient
cause to dismiss her (P.J. Lhuillier et.al, vs. Velayo, G.R. 198620, November 12, 2014)