Loss of confidence arising from fraud or willful breach of trust by employee of the trust reposed in him by his employer or his duly authorized representative is a just cause for termination of employment under Article 282 of the Labor Code of the Philippines.
Fraud is any act, omission, or concealment which involves a breach of legal duty, trust, or confidence justly reposed and is injurious to another.
Breach of Trust Meaning.
Breach of trust refers to the violation by the employee of the trust and confidence reposed in him by his employer or duly authorized representative.
Elements of Loss of Confidence.
To determine whether the termination of employment based on loss of confidence is justified, the following elements are generally considered:
- Whether the fraud or breach of trust is in connection to the employee’s work; and
- Whether the employee concerned is holding a position of trust and confidence.
Fraud or Breach must be in Connection to Employee’s Work.
To constitute just cause, fraud or breach of trust must be committed in connection with the employee’s work or related to the performance of the employee’s functions.
Employee must Hold Position of Trust and Confidence.
The basic premise for dismissal on the ground of loss of confidence is that the employee concerned holds a position of trust and confidence. It is the breach of this trust that results in the employer’s loss of confidence in the employee. (See Nat’l Sugar Refineries Corp. vs. NLRC, G.R. No. 122277 February 24, 1998.)
Thus, loss of confidence ideally applies only to cases involving employee occupying positions of trust and confidence, e.g., managerial employees, and those situations where the employee is routinely charged with the care and custody of the employer’s money or property, e.g., cashiers, auditors, property custodian, etc.
Title not Conclusive Indicator of Trust and Confidence.
However, the title or appellation of the employee’s position is not a conclusive indicator as to whether or not an employee holds a position of trust and confidence. The determination should hinge on the authority actually possessed by employee.
Breach of Trust must be Willful.
Ordinary breach will not suffice. It must be willful and without justifiable excuse, there must be basis therefor, and it must be supported by substantial evidence and not merely by the whims or caprice of the employer. (See Falguera vs. Linsangan, G.R. No. 114848 December 14, 1995.)
Last Edited: Friday, August 19, 2011