How secure are you in your post Mr. Manager?

How secure are you in your post Mr. Manager?

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Managerial employees and rank-and-file personnel are treated differently when it comes to termination of employment. Unfortunately for the former, the rank-and-file employees are given more protection by law when it comes to the utilization by the employer of loss of trust and confidence as a just cause for termination.

Before I continue, allow me to digress and differentiate who managerial employees are. The Labor Code of the Philippines defined managerial employees in this manner, to wit: Managerial employee is one who is vested with powers or prerogative to lay down and execute management policies and/or to hire, transfer, suspend, lay off, recall, discharge, assign or discipline employees. Supervisory employees are those who, in the interest of the employer, effectively recommend such managerial actions if the exercise of such authority is not merely routinary or clerical in nature but requires the use of independent judgment. All employees not falling within any of the above definitions are considered rank-and-file employees for purposes of this Book.

To continue, what is then the rule in terminating a managerial employee vis-à-vis a rank-and-file one when there is loss of trust and confidence? In Lima Land Inc. v. Cuevas (G.R. No. 169523, June 16, 2010) the highest court of the land ratiocinated: “It must be noted, however, that in a plethora of cases, this Court has distinguished the treatment of managerial employees from that of rank-and-file personnel, insofar as the application of the doctrine of loss of trust and confidence is concerned. Thus, with respect to rank-and-file personnel, loss of trust and confidence, as ground for valid dismissal, requires proof of involvement in the alleged events in question, and that mere uncorroborated assertions and accusations by the employer will not be sufficient. But as regards a managerial employee, the mere existence of a basis for believing that such employee has breached the trust of his employer would suffice for his dismissal. Hence, in the case of managerial employees, proof beyond reasonable doubt is not required, it being sufficient that there is some basis for such loss of confidence, such as when the employer has reasonable ground to believe that the employee concerned is responsible for the purported misconduct, and the nature of his participation therein renders him unworthy of the trust and confidence demanded of his position.

It is worth noting that the foregoing rule also applies to supervisory employees holding a position of trust. This was explained in the case of Sagales v. Rustan’s (G.R. No. 166554, November 27, 2008), where the Supreme Court justified the loss of trust and confidence doctrine, to wit: “The nature of the job of an employee becomes relevant in termination of employment by the employer because the rules on termination of managerial and supervisory employees are different from those on the rank-and-file. Managerial employees are tasked to perform key and sensitive functions, and thus are bound by more exacting work ethics. As a consequence, managerial employees are covered by the trust and confidence rule. The same holds true to supervisory employees occupying positions of responsibility.”

Now before you sulk, let me first tell you that all is not lost. An employer is not given carte blanche in effecting termination of managerial employees. In illegal dismissal cases, the employer has the burden of proof to show that the following requisites were complied with, thus: “The first requisite for dismissal on the ground of loss of trust and confidence is that the employee concerned must be holding a position of trust and confidence. xxx. The second requisite is that there must be an act that would justify the loss of trust and confidence. Loss of trust and confidence, to be a valid cause for dismissal, must be based on a willful breach of trust and founded on clearly established facts. The basis for the dismissal must be clearly and convincingly established but proof beyond reasonable doubt is not necessary” (Jerusalem v. Keppel Monte Bank, G.R. No. 169564, April 6, 2011). Moreover, because the nature of this rule is prone to abuse, the Supreme Court has set fundamental guidelines to be followed and the same can be gleaned in the case of Wah Yuen Restaurant v. Jayona (G.R. No. 159448, December 16, 2005). In this case, the Court forewarned, thus: “In order to be a valid cause for dismissal, loss of confidence should not be (a) simulated, (b) used as a subterfuge for causes which are improper, illegal or unjustified, (c) arbitrarily asserted in the face of overwhelming evidence to the contrary, and (d) a mere afterthought to justify earlier action taken in bad faith.” Indeed, all is not lost.

Evidently, the credo “those who have less in life should have more in law” of the late President Ramon Magsaysay cannot be any more alive today than in our labor laws. In fact, it is even expressly written in the Labor Code of the Philippines that “all doubts in the implementation and interpretation of the provisions of this Code, including its implementing rules and regulations, shall be resolved in favor of labor (and against management).” Be that as it may, I opine that this does not mean that those who have more in life don’t have the protection of law. They definitely have, albeit, in a lesser degree. At the end of the day, what is important  is  knowing your rights, regardless of its extent, and having the guts to defend it.

In summary, if you find yourself in a situation wherein after having served a company for majority of your entire working life, and suddenly you were terminated because you have allegedly broken the trust and confidence reposed on your position by your boss, you now know what your rights are; and it is up to you to defend it..



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