These are the requirements to be complied in order that an employer may invoke loss of trust and confidence in terminating an employee under Article 282(c) of the Labor Code: “(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.

G.R. No. 198620, 12 November 2014

Complainant Flordeliz Velayo filed a Labor Complaint for illegal dismissal, among others, against her employer defendant P.J. Lhuillier, Inc. Previously, complainant was hired as Accounting Clerk. Sometime after, she was served with a Show Cause Memo ordering her to explain her side against the charges wherein an overage amount of P540.00 was not reported immediately by her to the supervisor nor was it recorded at the end of that day. She sent a written reply admitting her inability to report the overage as her supervisor was on leave and she was still tracing the overage, and said that it was a simple mistake without intent to defraud the company. After the investigation, the company dismissed her on grounds of serious misconduct and breach of trust.

HELD: The complaint was dismissed. It is a well established rule 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.”

PJLI is not limited to its pawnshop operations. PJLI also offers its “Pera Padala” cash remittance service “whereby, for a fee or ‘sending charge,’ a customer may remit money to a consignee through its network of pawnshop branches all over the country.  On October 29, 2007, a customer sent 500.00 through its branch in Capistrano, Cagayan de Oro City, and paid a remittance fee of 40.00.  Inexplicably, however, no corresponding entry was made to recognize the cash receipt of 540.00 in the computerized accounting system (operating system) of the PJLI.  The respondent claimed that she tried very hard but could not trace the source of her unexplained cash surplus of 540.00, but a branch audit conducted sometime in December 2007 showed that it came from a ‘Pera Padala’ customer.”

While there is no significant financial injury was sustained by PJLI in the loss of a mere P540.00 in cash, it should be pointed out that she “held a position of utmost trust and confidence in the company.”

There are certain position in the company that enjoy trust. “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.”

In this case, “respondent was first hired by the petitioners as an accounting clerk on June 13, 2003, for which she received a basic monthly salary of 9,353.00.  On October 29, 2007, the date of the subject incident, she performed the function of vault custodian and cashier in the petitioners’ Branch 4 pawnshop in Capistrano, Cagayan de Oro City.  In addition to her custodial duties, it was the respondent who electronically posted the day’s transactions in the books of accounts of the branch, a function that is essentially separate from that of cashier or custodian.  It is plain to see then that when both functions are assigned to one person to perform, a very risky situation of conflicting interests is created whereby the cashier can purloin the money in her custody and effectively cover her tracks, at least temporarily, by simply not recording in the books the cash receipt she misappropriated.  This is commonly referred to as lapping of accounts. Only a most trusted clerk would be allowed to perform the two functions, and the respondent enjoyed this trust.”

These are the requirements to be complied in order that an employer may invoke loss of trust and confidence in terminating an employee under Article 282(c) of the Labor Code: “(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. 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.”

Here, the employer was fully justified in claiming loss of trust and confidence in the employee. “While it is natural and understandable that the respondent should feel apprehensive about Tuling’s reaction concerning her cash overage, considering that it was their first time to be working together in the same branch, we must keep in mind that the unaccounted cash can only be imputed to the respondent’s own negligence in failing to keep track of the transaction from which the money came.  A subsequent branch audit revealed that it came from a ‘Pera Padala’ remittance, implying that although the amount had been duly remitted to the consignee, the sending branch failed to record the payment received from the consigning customer.  For days following the overage, the respondent tried but failed to reconcile her records, and for this inept handling of a ‘Pera Padala’ remittance, she already deserved to be sanctioned.”

It is a matter of strict company policy that unexplained cash is recognized at the end of the day as miscellaneous income. “Inexplicably, despite being with the company for four years as accounting clerk and cashier, the respondent failed to make the required entry in the branch operating system recognizing miscellaneous income. Such an entry could have been easily reversed once it became clear how the overage came about. But the respondent obviously thought that by skipping the entry, she could keep Tuling from learning about the overage.  Her trustworthiness as branch cashier and bookkeeper has been irreparably tarnished. The respondent’s untrustworthiness is further demonstrated when she began to concoct lies concerning the overage: first, by denying its existence to Tuling and again to the company auditor; later, when she falsely claimed that a computer glitch or malfunction had prevented her from posting the amount on October 29, 2007; and finally, when she was forced to admit before the company’s investigating panel that she took and spent the money.”

Under the Article  282  of  the  Labor  Code, an  employer is allowed to dismiss an  employee  for  willful  breach  of  trust  or  loss  of  confidence.  “It has been held  that a special and unique  employment relationship exists between a corporation and its  cashier. Truly, more than  most key positions, that of a cashier calls for utmost  trust and confidence, and it is the breach of this trust that results in an employer’s loss of confidence in the employee.”

In dismissing a cashier on the ground of loss of confidence, “it is sufficient that there is some basis for the same or that the employer has a reasonable ground to believe that the employee is responsible for the misconduct, thus making him unworthy of the trust and confidence reposed in him. Therefore, if there is sufficient evidence to show that the employer has ample reason to distrust the employee, the labor tribunal cannot justly deny the employer the authority to dismiss him. Indeed, employers are allowed wider latitude in dismissing an employee for loss of trust and confidence… it must also be stressed that only substantial evidence is required in order to support a finding that an employer’s trust and confidence accorded to its employee had been breached.”

Citing Lopez v. Alturas Group of Companies (G.R. No. 191008, 11 April 2011), “the loss of trust and confidence must be based on willful breach of the trust reposed in the employee by his employer.  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.  Loss of confidence must not be indiscriminately used as a shield by the employer against a claim that the dismissal of an employee was arbitrary.  And, in order to constitute a just cause for dismissal, the act complained of must be work-related and shows that the employee concerned is unfit to continue working for the employer.  In addition, loss of confidence as a just cause for termination of employment is premised on the fact that the employee concerned holds a position of responsibility, trust and confidence or that the employee concerned is entrusted with confidence with respect to delicate matters, such as the handling or care and protection of the property and assets of the employer.  The betrayal of this trust is the essence of the offense for which an employee is penalized.”

Lastly, “misappropriation of company funds, notwithstanding that the shortage has been restituted, is a valid ground to terminate the services of an employee for loss of trust and confidence.” It should be pointed out that “it is immaterial what the respondent’s intent was concerning the missing fund, for the undisputed fact is that cash which she held in trust for the company was missing in her custody.  At the very least, she was negligent and failed to meet the degree of care and fidelity demanded of her as cashier.  Her excuses and failure to give a satisfactory explanation for the missing cash only gave the petitioners sufficient reason to lose confidence in her.”