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Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
AT A GLANCE:
An employer may terminate an employment for fraud and willful breach of trust. (Article 297, Labor Code)
An employee’s information regarding his whereabouts on the day he was on sick leave is not fraud and does not constitute a serious offense meriting the extreme penalty of dismissal. (HSBC v. NLRC and Emmanuel Meneses, G.R. No. 116542)
What species of dishonesty would constitute a ground for termination? This question is answered in the case of The Hongkong and Shanghai Banking Corporation (HSBC) v. National Labor Relations Commission (NLRC) and Emmanuel Meneses (G.R. No. 116542, July 30, 1996).
Emmanuel Meneses (Meneses) was employed as a rank-and-file employee of HSBC since 1986. On February 03, 1993, Meneses called the bank to inform that he had an upset stomach and would not be able to report for work. His superior called his number and the person who answered told the former that Meneses left early that morning. The following day, he was asked to explain why he was not at his residence when he was on sick leave due to an upset stomach. The bank also called the doctor to whom Meneses said he went for a consultation and examination, but the doctor denied that he examined Meneses on that day.
In his explanation, Meneses insisted that he had diarrhea on the day of his sick leave. He admitted that his statement regarding his whereabouts and his consultation with the doctor was incorrect, but claimed that such statements were not given with malicious intent, deceit, or meant to commit fraud against the bank.
On February 16, 1993, the bank issued a Memorandum terminating Meneses’ services effective March 16, 1993 pursuant to the bank’s Employee Handbook, to wit:
“Serious Offenses
Calling For Termination — Any form of dishonesty, like but not limited to the following:
— fraud
— making false or artificial entries in the books or records of the Bank
— failing to turn over money entrusted by a client for the Bank within a specified time
— theft of bank property
— using company funds/assets for any unofficial purpose.
—
— Any violation of the Bank’s Code of Conduct which has penal consequences under relevant local laws.
— Deliberately inflicting or attempting to inflict bodily injury upon a co-employee on Bank premises, or in case it is committed elsewhere, for reasons which are work related.
— Sabotage or causing damage to work or equipment of the Bank, or any underhanded interference in Bank operations.
— Any other serious offense analogous to the above.”
The following day, the bank sent him another Memorandum directing him to settle his outstanding loan in the amount of PhP179.834.00, net of a month’s salary the bank was paying him in lieu of notice not later than March 16, 1993.
Meneses filed a complaint for illegal dismissal where the Labor Arbiter ruled that the grounds stated in the employee handbook was overly broad. The Labor Arbiter ruled that Meneses’ excuse, assuming it to be false, did not result in any damage to the bank, and therefore the bank had no reason to lose its trust and confidence in him on account of such manner of dishonesty.
On appeal, the NLRC ruled that Meneses’ act of dishonesty cannot be considered so serious as to warrant the complainant’s outright dismissal. the dishonesty that he had committed cannot be considered depraved. It was a simple kind of dishonesty that was committed not in connection with his job.
Does the employee’s act of making false statement as to the reason for his absence constitute fraud which is a ground for the termination of his employment?
The Supreme Court ruled on the negative.
Meneses’ false information concerning his whereabouts on February 3, 1993 is not a fraud, nor a false entry in the books of the bank; neither is it a failure to turn over clients’ funds, or theft or use of company assets, or anything “analogous” as to constitute a serious offense meriting the extreme penalty of dismissal.
Dismissal is the most severe penalty that an employer can impose on an employee. It goes without saying that care must be taken, and due regard given to an employee’s circumstances, in the application of such punishment.
Jurisprudence says:
“The employee’s acts of dishonesty – his first offense in his seven years of employment – did not show deceit nor constitute fraud and did not result in actual prejudice to the employer. Certainly, such peremptory dismissal is far too harsh, too severe, excessive and unreasonable under the circumstances.”
While the Court does not countenance nor tolerate any form of dishonesty. It cannot permit the imposition of the maximum penalty authorized by our labor laws for JUST ANY act of dishonesty, in the same manner that death, which is now reinstated as the supreme sanction under the penal laws of our country, is not to be imposed for just any killing.
The penalty imposed must be commensurate to the depravity of the malfeasance, violation or crime being punished. A grave injustice is committed in the name of justice when the penalty imposed is grossly disproportionate to the wrong committed.
It must be noted that under Article 297 of the Labor Code, an employer may terminate an employment for any of the following causes:
(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative;
(d) Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representative; and
(e) Other causes analogous to the foregoing.
DOLE Department Order No. 147, series of 2015 (DOLE D.O. 147-15) provides for the requisites for fraud or willful breach of trust to be considered as a valid ground for termination:
- There must be an act, omission, or concealment;
- The act, omission or concealment involves a breach of legal duty, trust, or confidence justly reposed;
- It must be committed against the employer or his/her representative; and
- It must be in connection with the employee’s work.
Related Article/s:
Gross and Habitual Neglect of Duties
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