Labor Law: Cashiers Beware!

The case EATS-CETERA FOOD SERVICES OUTLET and/or SERAFIN RAMIREZ, versus MYRNA B. LETRAN and MARY GRACE ESPADERO, (G.R. No. 179507, October 2, 2009) involves a cashier whose time card was punched in by someone else. She failed to report this incident to her supervisor, for which reason she was eventually dismissed. One wonders whether such a minor matter could be a just cause for dismissal, but so it is! And the crucial factor here is her position as cashier.

Labor Law – Loss of Trust and Confidence

The Supreme Court had the opportunity of reiterating some well-known guidelines pertaining to dismissal due to loss of trust and confidence in the very recent case of M+W ZANDER PHILIPPINES, INC. and ROLF WILTSCHEK, versus TRINIDAD M. ENRIQUEZ, (G.R. No. 169173) promulgated just last week, i.e., June 5, 2009. You can read the facts of the case HERE. The central guidelines on loss of confidence as enunciated in this case are as follows:

Article 282 (c) of the Labor Code allows an employer to terminate the services of an employee for loss of trust and confidence. [28]  Certain guidelines must be observed for the employer to terminate an employee for loss of trust and confidence.  We held in General Bank and Trust Company v. Court of Appeals,[29] viz.:

[L]oss of confidence should not be simulated. It should not be used as a subterfuge for causes which are improper, illegal, or unjustified. Loss of confidence may not be arbitrarily asserted in the face of overwhelming evidence to the contrary. It must be genuine, not a mere afterthought to justify earlier action taken in bad faith.[30]

The first requisite for dismissal on the ground of loss of trust and confidence is that the employee concerned must be one holding a position of trust and confidence.

There are two classes of positions of trust: managerial employees and fiduciary rank-and-file employees.

Managerial employees are defined as those vested with the powers or prerogatives to lay down management policies and to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees or effectively recommend such managerial actions.[31] They refer to those whose primary duty consists of the management of the establishment in which they are employed or of a department or a subdivision thereof, and to other officers or members of the managerial staff.[32] Officers and members of the managerial staff perform work directly related to management policies of their employer and customarily and regularly exercise discretion and independent judgment.[33]

The second class or fiduciary rank-and-file employees consist of cashiers, auditors, property custodians, etc., or those who, in the normal exercise of their functions, regularly handle significant amounts of money or property.[34] 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.

The second requisite of terminating an employee for loss of trust and confidence is that there must be an act that would justify the loss of trust and confidence.[38] To be a valid cause for dismissal, the loss of confidence must be based on a willful breach of trust and founded on clearly established facts.[39]

Article 282 (c) of the Labor Code allows an employer to terminate the services of an employee for loss of trust and confidence. Certain guidelines must be observed for the employer to terminate an employee for loss of trust and confidence.  We held in General Bank and Trust Company v. Court of Appeals, viz.:

[L]oss of confidence should not be simulated. It should not be used as a subterfuge for causes which are improper, illegal, or unjustified. Loss of confidence may not be arbitrarily asserted in the face of overwhelming evidence to the contrary. It must be genuine, not a mere afterthought to justify earlier action taken in bad faith.

The first requisite for dismissal on the ground of loss of trust and confidence is that the employee concerned must be one holding a position of trust and confidence.

There are two classes of positions of trust: managerial employees and fiduciary rank-and-file employees.

Managerial employees are defined as those vested with the powers or prerogatives to lay down management policies and to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees or effectively recommend such managerial actions. They refer to those whose primary duty consists of the management of the establishment in which they are employed or of a department or a subdivision thereof, and to other officers or members of the managerial staff. Officers and members of the managerial staff perform work directly related to management policies of their employer and customarily and regularly exercise discretion and independent judgment.

The second class or fiduciary rank-and-file employees consist of cashiers, auditors, property custodians, etc., 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….

The second requisite of terminating an employee for loss of trust and confidence is that there must be an act that would justify the loss of trust and confidence.  To be a valid cause for dismissal, the loss of confidence must be based on a willful breach of trust and founded on clearly established facts.

The case also includes a discussion of when and when not to grant moral damages in labor cases, and when is a General Manager personally liable for an illegally dismissed employee’s labor claims. You can read the whole thing HERE.

Recent Labor Jurisprudence (RLJ): Hotel Nurses

Although I have posted digests of recent jurisprudence on labor law on this blog before, I think it’s high time I make the whole thing a little bit formal by assigning a category, i.e. Recent Labor Jurisprudence, henceforth RLJ.

Let’s begin with a case decided just this month involving the employment status of nurses engaged by a hotel. Here’s what the Supreme Court has to say in the case of Escasinas, et al. vs. Shangrila’s Mactan Island Resort, et al. (G.R. No. 178827).

Under the foregoing provision, Shangri-la, which employs more than 200 workers, is mandated to “furnish” its employees with the services of a full-time registered nurse, a part-time physician and dentist, and an emergency clinic which means that it should provide or make available such medical and allied services to its employees, not necessarily to hire or employ a service provider. As held in Philippine Global Communications vs. De Vera:

x x x while it is true that the provision requires employers to engage the services of medical practitioners in certain establishments depending on the number of their employees, nothing is there in the law which says that medical practitioners so engaged be actually hired as employees,  adding that the law, as written, only requires the employer “to retain”, not employ, a part-time physician who needed to stay in the premises of the non-hazardous workplace for two (2) hours. (Emphasis and underscoring supplied)

The term “full-time” in Art. 157 cannot be construed as referring to the type of employment of the person engaged to provide the services, for Article 157 must not be read alongside Art. 280 in order to vest employer-employee relationship on the employer and the person so engaged. So De Vera teaches:

x x x For, we take it that any agreement may provide that one party shall render services for and in behalf of another, no matter how necessary for the latter’s business, even without being hired as an employee. This set-up is precisely true in the case of an independent contractorship as well as in an agency agreement.  Indeed, Article 280 of the Labor Code, quoted by the appellate court, is not the yardstick for determining the existence of an employment relationship. As it is, the provision merely distinguishes between two (2) kinds of employees, i.e., regular and casual. x x x (Emphasis and underscoring supplied)

The phrase “services of a full-time registered nurse” should thus be taken to refer to the kind of services that the nurse will render in the company’s premises and to its employees, not the manner of his engagement.

You can read the whole thing HERE.