1.

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 is for
this reason that the Court has sustained the dismissal of cashiers who have been found to have
breached the trust and confidence of their employers. In one case, the Court upheld the validity
of the dismissal of a school cashier despite her 19 years of service after evidence showed that
there was a discrepancy in the amount she was entrusted to deposit with a bank.

In the case of EATS-CETERA FOOD SERVICES OUTLET and/or SERAFIN RAMIREZ, Petitioners, vs.
MYRNA B. LETRAN and MARY GRACE ESPADERO, Respondents, the Supreme Court upheld the legal
dismissal of the Respondent Espadero.

The Supreme Court sustain petitioner’s reasoning that Espadero’s position as a cashier is one that
requires a high degree of trust and confidence, and that her infraction reasonably taints such trust
and confidence reposed upon her by her employer. In this case, petitioners cannot be faulted for
losing their trust in Espadero. As an employee occupying a job which requires utmost fidelity to her
employers, she failed to report to her immediate supervisor the tampering of her time card. Whether
her failure was deliberate or due to sheer negligence, and whether Espadero was or was not in
cahoots with a co-worker, the fact remains that the tampering was not promptly reported and could,
very likely, not have been known by petitioners, or, at least, could have been discovered at a much
later period, if it had not been reported by Espadero’s supervisor to the personnel manager.
Petitioners, therefore, cannot be blamed for losing their trust in Espadero.

But wasn’t this incident a minor and trivial one? Isn’t dismissal too severe a penalty in this case? The
Supreme Court didn’t think so:

Moreover, the peculiar nature of Espadero’s position aggravates her misconduct. Misconduct has
been defined as improper or wrong conduct; the transgression of some established or definite rule of
action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not
mere error in judgment. The misconduct, to be serious, must be of such a grave character and not
merely trivial or unimportant. To constitute just cause for termination, it must be in connection with
the employee’s work. With the degree of trust expected of Espadero, such infraction can hardly be
classified as one that is trivial or unimportant. Her failure to promptly report the incident reflects a
cavalier regard for the responsibility required of her in the discharge of the duties of her position.

2. P.J. LHUILLIER, INC. and MARIO RAMON LUDENA, Petitioners, vs. FLORDELIZ VELAYO,
Respondent, G.R. No. 198620, November 12, 2014.
It need not be stressed that the nature or extent of the penalty imposed on an erring employee
must be commensurate to the gravity of the offense as weighed against the degree of
responsibility and trust expected of the employee’s position. On the other hand, the respondent
is not just charged with a misdeed, but with loss of trust and confidence under Article 282(c) of
the Labor Code, a cause premised on the fact that the employee holds a position whose
functions may only be performed by someone who enjoys the trust and confidence of
management. Needless to say, such an employee bears a greater burden of trustworthiness
than ordinary workers, and the betrayal of the trust reposed is the essence of the loss of trust
and confidence which is a ground for the employee’s dismissal.

There are two classes of corporate positions of trust: on the one hand 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 other officers or members of the managerial staff;on
the other hand are 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 employer’s money or property and are thus classified as occupying
positions of trust and confidence.

While loss of trust and confidence should be genuine, it does not require proof beyond reasonable
doubt, it being sufficient that there is some 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. Xxxxx Mere substantial evidence is
sufficient to establish loss of trust and confidence.

3. Overview

Let’s go through a bit of a crash course on the law. This section introduces the pertinent part of the
Philippine Labor Code that you’ll need.

It also shows the criteria the court considers when evaluating this type of case.

Art 296 (formerly 282) of the Labor Code allows the termination of an employee for loss of
confidence.

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

Loss of confidence has been defined by jurisprudence and occurs when:

The employee concerned must be holding a position of trust and confidence and

There must be an act that would justify the loss of trust and confidence.

You’ll find that the Supreme Court has elaborated on the first requirement before [G.R. 118506, Apr
18, 1997] and that this has continued to be cited.

It stated that there are 2 classes of employees:

Employees who occupy positions of trust and confidence are 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;

Employees who are routinely charged with the care and custody of their employer’s money or
property are 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 Court has also discussed what kind of act falls under the second requirement.

1. It must be related to his duties

For breach of trust and confidence to become a valid ground for the dismissal of an employee, the
cause of loss of trust and confidence must be related to the performance of the employee’s duties.
[G.R. No. 169564, Apr 6, 2011]

2. Willful breach of trust and founded on clearly established facts

Such breach is willful if it is done intentionally, knowingly, and purposely, without justifiable excuse,
as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. Moreover, it
must be based on substantial evidence and not on the employer’s whims or caprices or suspicions
otherwise, the employee would eternally remain at the mercy of the employer. [G.R. 198620, Nov
2014]

You should note that in cases such as this, the Court specifically doesn’t allow separation pay.

Well-settled is the rule that separation pay shall be allowed only in those instances where the
employee is validly dismissed for causes other than serious misconduct or those reflecting on his
moral character. Inasmuch as the reason for which the petitioner was validly separated involves his
integrity, which is especially required for the position of the purser, he is not worthy of compassion as
to deserve at least separation pay for his length of service. [G.R. 148410, Jan 17, 2005]

Now that you’ve got a bird’s eye view of what the law considers, let’s look at each in a bit more
detail.

Employees Holding Positions of Trust and Confidence

You might be wondering who are employees who hold a position of trust and confidence.

I’ve listed them above but for easy reference:

Employees who occupy positions of trust and confidence are managerial employees

Employees who are routinely charged with the care and custody of their employer’s money or
property.

Just to illustrate employees who hold a position of trust and confidence, let’s take see the
jurisprudence.

A recent case which comes to mind is P.J. Lhuillier vs. Velayo. [G.R. No. 198620, Nov 12, 2014].

Here, the Supreme Court found the dismissal of Ms. Velayo valid and pointed out that her
“misconduct must be viewed in light of the strictly fiduciary nature of her position.”

She was a cashier who hid an overage of Php 540 pesos and correspondingly covered it up.

The Court of Appeals and the National Labor Relations Committee said that this was a simple error.

The Supreme Court disagreed.

In holding a position requiring full trust and confidence, the respondent gave up some of the rigid
guarantees available to ordinary employees. She insisted that her misconduct was just an “innocent
mistake,” and maybe it was, had it been committed by other employees.

Another good example for you would be Philippine Plaza Holdings vs. Ma. Flora M. Episcope [G.R.
192826, Feb 27, 2013].

Ma. Flora M. Episcope was a waitress at Westin Hotel and was responsible for bringing discount cards
to the cashier and presenting the discounted bill to the guests.

Instead of presenting the discounted bill to the guests, she gave them the original bill and pocketed
the discount.

The Supreme Court supported her dismissal.

“Being therefore involved in the handling of company funds, Episcope is undeniably considered an
employee occupying a position of trust and confidence and as such, was expected to act with utmost
honesty and fidelity.”

The Court has defined several positions as being one of trust and confidence, including
warehousemen, salesmen, bank tellers, data custodians and cashiers among others.

You might be wondering why the law goes into some detail about positions of trust and confidence.

Well, you cannot dismiss for loss of trust and confidence if the position doesn’t have any function that
requires trust.

In addition, there is a higher standard of behavior expected of management personnel.

Since more is expected of them, you’ll find the law holds them to a higher standard.

…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. But as regards a managerial
employee, the mere existence of a basis for believing that such employee has breached the trust of
his employer would suffice for his dismissal [G.R. 208321, Jul 30, 2014]

This doesn’t mean that you just fire based on belief however.

You’ll still need reasonable grounds to believe that there has been a breach of confidence.

Related to his Duties

The Supreme Court also has stated that the dismissal must be in connection with the employee’s
duties.

In an early case, you can see that the Supreme Court found that the bank teller was wrongly held
liable for trust and guarantees. [G.R. 167716, Mar 23, 2006]

This was actually the bank branch manager’s duty and so the company was found guilty of illegal
dismissal.

You also clearly see it in the more recent case of Lima Land vs. Cuevas [G.R. 169523, Jun 16, 2010].

The company stated that she did not exercise due diligence in inquiring about the status of the
collections, leading to remittance differences.

The Court said that the irregularities were principally the collection supervisor’s duty and he should
be the one actually held accountable.

As such, the court also found it a case of illegal dismissal.

Willful Breach of Trust

You’ll also have to make sure that the act on which the dismissal is based should be willful.

Willful breach is when it is clear that an employee is knowingly and deliberately acting other than he
should.

In Alvarez vs. Golden Tri Bloc [G.R. 202158, Sept 25, 2013], a supervisor was dismissed after asking
another employee to punch in his timecard for him.

The employee was dismissed for loss of trust.

The Supreme Court agreed with his dismissal because he had been previously disciplined several
times for infractions.

In fact, he had been suspended before for asking another employee to punch in his timecard. He’d
also been warned that he would be dismissed if he did it again.

He tried to claim that he had never been disciplined in his time with the company. However, the
company presented several previous disciplinary actions.

Stating that he had deliberately misled the labor tribunals and that repetition of an offense clearly
indicated willfulness, the Court upheld his dismissal.

Contrast this with the case of Sulpicio Lines vs. Gulde [G.R. No. 149930, February 22, 2002].

Gulde was dismissed as the company stated that he had worked with thieves to steal 4 basketballs.

The Supreme Court said that his case was one of illegal dismissal.

It quoted the Court of Appeals:

[I]t can be gleaned that the evidence presented in the case did not clearly prove that petitioner
willfully breach his duty. It was not proven the indeed he connived with the thieves.

Willful breach is a very important consideration in this case, and you’ll need to prove it.

Substantial Evidence

Also, you’ll need sufficient evidence for the dismissal to be valid.

There are several levels of evidence but the Court only requires evidence to be “substantial …founded
on clearly established facts” [G.R. 149930, Feb 22, 2002] in dismissal cases.

You’ll have to present proof for your reason for dismissal.

The Supreme Court has found illegal dismissal in cases where insufficient evidence was found to
support the claim.
For instance, while Marlyn Cuevas was remiss in her duties the court dismissed other allegations for
being unsubstantiated [G.R. 169523, Jun 16, 2010].

The company had accused her of irregularities in her approval of reimbursements and that
insufficient accounting standards were followed leading to further irregularities in the Petty Cash
Fund.

In the words of the Court:

Indeed, the consistent rule is that if doubts exist between the evidence presented by the employer
and the employee, the scales of justice must be tilted in favor of the latter. The employer must
affirmatively show rationally adequate evidence that the dismissal was for justifiable cause. 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.

Summary

So going back to that cashier suspected of stealing from her revolving fund at the beginning of this
article, yes you can terminate.

It’s clearly a position of trust and part of her duties to remit the cash to her employer.

You will have to present substantial proof that this was willful. You will also have to follow due
process, but this is a very clear cut case of loss of trust. and confidence.

Source: Termination due to Loss of Trust (Theft, Fraud, etc.) - Lawyers in the Philippines
(lawyerphilippines.org)