Facts
On November 14, 1976, Quality House (“QHI”), a manufacturer and distributor of leather products, hired petitioner Evelina E. Belarso. She was initially assigned to the Belt Department of QHI. Sometime in 1986, she was transferred from the Belt Department to the Raw Materials Warehouse. She was then promoted as supervisor of the Raw Materials Warehouse.
In December 2010, before leaving the warehouse, Belarso submitted herself to the routinary outgoing inspection and body frisking of employees at the QHI gate. When her bag was inspected, Lady Guard Salamanca found a belt buckle inside the bag. Belarso had no gate pass or authorization to bring out the said item from the warehouse. She denied any knowledge of why and how the belt buckle got inside her bag. Thereafter, an incident report was immediately filed by LG Salamanca.
Belarso received a notice from QHI placing her under preventive suspension and requiring her to submit a written explanation within 48 hours. She submitted her written explanation denying all the accusations against her. She claimed that her bag was placed outside her work station under a table located beside the door and near the window. The bag was visible to everyone. She requested a dialogue with QHI and explained that her co-employees framed her up by putting the belt buckle inside her bag without her knowledge.
QHI issued a memorandum stating that it found Belarso’s explanation to be unsatisfactory and that her employment was being terminated for stealing company property and for loss of trust and confidence. However, before the result of the investigation was even released, a complaint for illegal dismissal against QHI was already filed by Belarso.
The Labor Arbiter ruled that Belarso had been illegally dismissed by QHI. However, the NLRC reversed the ruling of the LA after finding that QHI, through its evidence, was able to establish that Belarso’s dismissal was for a just cause, i.e. loss of trust and confidence. The CA sustained the NLRC’s findings and agreed that the evidence on record supports QHI’s position.
ISSUE: Whether or not there exists a just cause to terminate the petitioner from her employment.
Ruling
YES. Loss or breach of trust and confidence, as a just cause for termination by an employer, is based on Article 297 of the Labor Code:
ARTICLE 297. [282] Termination by Employer. — An employer may terminate an employment for any of the following causes:
x x x x
(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative[.]
Jurisprudence provides for two conditions before an employee may be dismissed for such cause:
First. Breach of trust and confidence must be premised on the fact that the employee concerned holds a position of trust and confidence, where greater trust is placed by management and from whom greater fidelity to duty is correspondingly expected. The essence of the offense for which an employee is penalized is the betrayal of such trust.
Second. There must be some basis for the loss of trust and confidence. The employer must present clear and convincing proof of an actual breach of duty committed by the employee by establishing the facts and incidents upon which the loss of confidence in the employee may fairly be made to rest. This means that “the employer must establish the existence of an act justifying the loss of trust and confidence.”
After a careful review of the records, the Court found the above conditions present. First, she held a position of trust and confidence. As a supervisor, she was responsible for the custody, handling, safekeeping, and release of QHI’s raw materials. This brings her within the scope of employees vested with trust and confidence, i.e., those who, in the normal and routine exercise of their functions, regularly handle significant amounts of money or property. Second, QHI was able to establish the basis of its loss of trust in Belarso: her violation of the company rule prohibiting the stealing or attempting to steal company property. Her infraction affected the very essence of loyalty and honesty, which all employees owe to their employers. It was serious, grave, and reflected adversely on her character.
In fine, the Court found Belarso’s dismissal for loss of trust and confidence valid. Indeed, while the State can regulate the right of an employer to select and discharge his or her employees, an employer cannot be compelled to continue the employment of an employee in whom there has been a legitimate loss of trust and confidence.