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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:
Implicit in the contract of employment is the undertaking that the employee shall be faithful to the interest of the employer during the term of the employment. When an employee deliberately acquires an interest adverse to his employer, he is disloyal, and his discharge is justified. (Elizalde International vs. CA, G.R. No. L40553, February 26, 1981)
Conflict of interest means being in a situation where your interests clash with those of your employer. This is a big deal for both employers and employees because it can lead to serious consequences, including dismissal from your job.
Jurisprudence says:
“One who asserts an interest, or performs acts adverse or disloyal to one’s employer commits a breach of an implied condition of the contract of employment which may warrant discharge, as, for example, where one secretly engages in a business which renders him a competitor and rival of his employer”.
Aside from any duties expressly imposed upon or undertaken by the employee in the contract of employment, the law implies various obligations and undertakings by an employee in entering into a contract of employment. An employer has the right to expect loyalty from his employees 8 as long as the employment relationship continues”.
Implicit in the contract of employment is the undertaking that the employee shall be faithful to the interest of the employer during the term of the employment. When an employee deliberately acquires an interest adverse to his employer, he is disloyal, and his discharge is justified. And where an employee engages in a business which necessarily renders him a competitor and rival of his employer, no matter how much or how little time and attention he may devote to it, he is deemed to have an interest which conflicts with his duty to his employer, and for this cause may be dismissed.
In the absence of a specific provision, the employee must be deemed to have been rightfully discharged where it appears that his activities tended to injure or endanger the business of his employer.
On the other hand, where an occupation or business is conducted by a servant out of the hours of service, and is not inconsistent with his duties to the master or antagonistic to or competitive with the master’s business, it furnishes no ground for the discharge of the servant.” (Elizalde International vs. CA, G.R. No. L40553, February 26, 1981)
Fidelity to Employer
Employees enter into an unspoken agreement with their employers, wherein they commit to putting the interests of the employer first. This implicit obligation, known as fidelity, underpins the employer-employee relationship and is fundamental to maintaining trust and integrity in the workplace.
Fidelity entails prioritizing the goals, objectives, and well-being of the employer over one’s personal interests or pursuits. It encompasses a sense of loyalty, dedication, and commitment to advancing the employer’s interests and contributing positively to the organization’s success.
Disloyalty and Justification for Dismissal
Deliberate acts or behaviors by employees that undermine the interests or objectives of their employer constitute disloyalty and breach the implicit obligation of fidelity. This includes acquiring interests or engaging in activities that directly conflict with the employer’s interests, such as starting a competing business or misappropriating proprietary information. Such actions not only demonstrate a lack of commitment to the employer but also jeopardize the organization’s reputation, financial stability, and competitive position. Consequently, employers are justified in terminating the employment of individuals who engage in disloyal conduct, as it undermines the trust and confidence essential to the employment relationship. Disloyalty provides just cause for dismissal, as it constitutes a serious breach of the implicit contract between the employer and employee, warranting corrective action to protect the employer’s interests and preserve the integrity of the workplace.
In summary here’s what you need to know as an employee:
- If you start doing things that are against your employer’s interests or secretly start a business that competes with your employer, it’s considered breaking the rules of your employment contract.
- Even if your contract doesn’t specifically mention certain duties, there’s an expectation that you’ll be loyal to your employer while you’re working for them.
- Your job is to look out for your employer’s best interests while you’re employed by them. If you do something that goes against their interests on purpose, like starting a competing business, it’s seen as disloyal and could lead to you being fired.
- It doesn’t matter if you only spend a little bit of time on your side business – if it competes with your employer, it’s still a conflict of interest and could get you fired.
- However, if you’re doing something outside of work hours that doesn’t interfere with your job or compete with your employer, it’s usually okay and wouldn’t be a reason for getting fired.
- So, it’s essential to be aware of any conflicts of interest and make sure you’re always acting in your employer’s best interests while you’re working for them. Otherwise, it could cost you your job.
Read also:
WHAT ARE THE PROCEDURAL REQUIREMENTS IN DISMISSING AN EMPLOYEE BASED ON JUST CAUSES?
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding taxation and taxpayer’s remedies, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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