JURISPRUDENCE

Breach of Trust and Confidence

G.R. No. 85446             May 27, 1991

OCEAN TERMINAL SERVICES, INC. and VICENTE PANGANIBAN, JR., petitioners,

vs.
NATIONAL LABOR RELATIONS COMMISSION and ZALDY BAUTISTA, respondents.

Loss of confidence is established as a valid ground for the dismissal of an employee. The law does
not require proof beyond reasonable doubt of the employee's misconduct to invoke such justification.
It is sufficient that there is some basis for the loss of trust or that the employer has reasonable
grounds to believe that the employee is responsible for the conduct and his participation therein
renders him unworthy of the trust and confidence demanded of his position (Valladolid v. Inciong,
121 SCRA 2053; see also Dole Philippines, Inc. v. National Labor Relations Commission, 123 SCRA
673; and San Miguel Corporation v. National Labor Relations Commission, 115 SCRA 329).

G.R. No. L-52364 March 25, 1983

RICARDO VALLADOLID, petitioner,
vs.
HON. AMADO G. INCIONG, Deputy Minister of Labor, and COPACABANA APARTMENT-
HOTEL, respondents.

G.R. No.L-53349 March 25, 1983

J.R.M. & CO., INC. as owner and operator of Copacabana Apartment-Hotel petitioners,

vs.
HON. AMADO G. INCIONG, as Deputy Minister of Labor,HON. FRANCISCO L. ESTRELLA, as
Regional Director of the National Capital Region, Ministry of Labor, nd RICARDO
VALLADOLID, respondents.

Loss of confidence is a valid ground for dismissing an employee. Proof beyond reasonable doubt of
the employee's misconduct is not required, it being sufficient that there is some basis for the same or
that the employer has reasonable ground to believe that the employee is responsible for the
misconduct and his participation therein renders him unworthy of the trust and confidence demanded
of his position.   However, as this was Valladolid's first offense, as found by the Regional Director,
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dismissal from the service is too harsh a punishment, considering that he had not been previously
admonished, warned or suspended for any misdemeanor. Besides as clerk-collector, he need not be
given access to facts relative to the business of Copacabana, which, if divulged to Tropicana would
be to the former's prejudice.

SECOND DIVISION

[ G.R. No. 200815, August 24, 2020 ]

SAN MIGUEL CORPORATION, PETITIONER, VS. ROSARIO A. GOMEZ, RESPONDENT.

Thus, the requisites for dismissal on the ground of loss of trust and confidence are: "1) the employee
concerned must be holding a position of trust and confidence; (2) there must be an act that would
justify the loss of trust and confidence; [and (3)] such loss of trust relates to the employee's
performance of duties."35

G.R. No. 208321               July 30, 2014

WESLEYAN UNIVERSITY PHILIPPINES, Petitioner,

vs.
NOWELLA REYES, Respondent.

In the Etcuban case (Ibid) the Supreme Court in upholding the validity of petitioner-employee’s
dismissal on the ground of loss of trust and confidence, ruled that even if the employee x x x had no
actual and direct participation in the alleged anomalies, his failure to detect any anomaly that would
normally fall withinthe scope of his work reflects his ineffectiveness and amounts to gross negligence
and incompetence which are likewise justifiable grounds for his irregularity, for what is material is
that his actuations were more than sufficient to sow in his employer the seed of mistrust and loss of
confidence.

G.R. No. 208321               July 30, 2014

WESLEYAN UNIVERSITY PHILIPPINES, Petitioner,

vs.
NOWELLA REYES, Respondent.

An employer cannot be compelled to retain an employee who is guilty of acts inimical to the interests
of the employer. A company has the right to dismiss its employees if only as a measure of self-
protection. This is all the more true in the case of supervisors or personnel occupying positions of
responsibility.  In this case, let it be remembered that respondent was not an ordinary rank-and-file
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employee as she was no less the Treasurer who was in charge of the coffers of the University. It
would be oppressive to require petitioner to retain in their management an officer who has admitted
to knowingly and intentionally committing acts which jeopardized its finances and who was
untrustworthy in the handling and custody of University funds.

In the case of Apo Cement Corp. v. Baptisma,[27] it was held that for an employer to validly dismiss an employee on
the ground of loss of trust and confidence, the following guidelines must be observed: (1) loss of confidence should
not be simulated; (2) it should not be used as subterfuge for causes which are improper, illegal or unjustified; (3) it
may not be arbitrarily asserted in the face of overwhelming evidence to the contrary; and (4) it must be genuine, not a
mere afterthought to justify earlier action taken in bad faith. More importantly, the loss must be founded on clearly
established facts sufficient to warrant the employee's separation from work.[28]
[ G.R. No. 206629, September 14, 2016 ]
NARCISO T. MATIS, PETITIONER, VS. MANILA ELECTRIC COMPANY,
RESPONDENT.
Proof beyond reasonable doubt is not needed to justify the loss of confidence as long as the employer has
reasonable ground to believe that the employee is responsible for the misconduct and his participation therein
renders him unworthy of the trust and confidence demanded of his position.

Theft
G.R. No. 153569               January 24, 2012

LOLITA S. CONCEPCION, Petitioner,
vs.
MINEX IMPORT CORPORATION/MINERAMA CORPORATION, KENNETH MEYERS, SYLVIA P.
MARIANO, and VINA MARIANO, Respondents.

"Respondent cannot use social justice to shield wrongdoing. He occupied a position of trust and
confidence. Petitioner relied on him to protect the properties of the company. Respondent betrayed
this trust when he ordered the subject lamp posts to be delivered to the Adelfa Homeowners’
Association. The offense he committed involves moral turpitude. Indeed, a City Prosecutor found
probable cause to file an information for qualified theft against him." (United South Dockhandlers,
Inc., versus NLRC, et al., 267 SCRA 401, at page 407, supra)

The employer may validly dismiss for loss of trust and confidence an employee who commits an act
of fraud prejudicial to the interest of the employer. Neither a criminal prosecution nor a conviction
beyond reasonable doubt for the crime is a requisite for the validity of the dismissal. Nonetheless,
the dismissal for a just or lawful cause must still be made upon compliance with the requirements of
due process under the Labor Code; otherwise, the employer is liable to pay nominal damages as
indemnity to the dismissed employee.

The non-grant of said right to separation pay is based on the

reason that an erring employee should not benefit from his
wrongful acts.

1. G.R. No. 221096 CLAUDIA'S KITCHEN, INC. and ENZO SQUILLANTINI, Petitioners

vs. MA. REALIZA S. TANGUIN, Respondent
2. G.R. No. 214230 SECURITY BANK SAVINGS CORPORATION (formerly PREMIERE
DEVELOPMENT BANK)/HERMINIO M. FAMATIGAN, JR., Petitioners,
vs.CHARLES M. SINGSON, Respondent.

[ G.R. No. 203328, November 08, 2017 ]

JOSELITO A. ALVA, PETITIONER, V. HIGH CAPACITY SECURITY FORCE, INC.
AND ARMANDO M. VILLANUEVA, RESPONDENTS.
The Concept of Attorney's Fees in Labor Cases
Essentially, there are two commonly accepted concepts of attorney's fees - the ordinary and extraordinary. On the
one hand, in its ordinary concept, an attorney's fee is the reasonable compensation paid by the client to his lawyer in
exchange for the legal services rendered by the latter. The compensation is paid for the cost and/or results of the
legal services, as agreed upon by the parties or as may be assessed by the courts. On the other hand, as an
extraordinary concept, an attorney's fee is deemed an indemnity for damages ordered by the court to be paid by the
losing party to the winning party. In labor cases, attorney's fees partake of the nature of an extraordinary award
granted to the victorious party as an indemnity for damages. As a general rule, it is payable to the client, not to his
counsel, unless the former agreed to give the amount to the latter as an addition to, or part of the counsel's
compensation.[35]
Notably, Article 111 of the Labor Code sanctions the award of attorney's fees in cases of the unlawful withholding of
wages, wherein the culpable party may be assessed attorney's fees equivalent to ten percent (10%) of the amount of
wages recovered.[36] The amount of attorney's fees shall not exceed ten percent (10%) of the total monetary award,
and the fees may be deducted from the amount due the winning party.[37]
In addition, Article 2208 of the Civil Code allows the award of attorney's fees in the following instances, to wit:

ART. 2208. In the absence of stipulation, attorney's fees and expenses of litigation, other than judicial costs, cannot
be recovered, except:

(1) When exemplary damages are awarded;

(2) When the defendant's act or omission has compelled the plaintiff to litigate with third persons or to incur
expenses to protect his interest;
(3) In criminal cases of malicious prosecution against the plaintiff;
(4) In case of a clearly unfounded civil action or proceeding against the plaintiff;
(5) Where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiffs plainly valid, just and
demandable claim;
(6) In actions for legal support;
(7) In actions for the recovery of wages of household helpers, laborers and skilled workers;
(8) In actions for indemnity under workmen's compensation and employer's liability laws;
(9) In a separate civil action to recover civil liability arising from a crime;
(10) When at least double judicial costs are awarded;
(11) In any other case where the court deems it just and equitable that attorney's fees and expenses of
litigation should be recovered.
In all cases, the attorney's fees and expenses of litigation must be reasonable. (Emphasis Ours)

To recapitulate, both the Labor Code and the Civil Code provide that attorney's fees may be recovered in the
following instances, namely, (i) in cases involving the unlawful withholding of wages;[38] (ii) where the defendant's act
or omission has compelled the plaintiff to litigate with third persons or the plaintiff incurred expenses to protect his
interest;[39] (iii) in actions for the recovery of wages of household helpers, laborers and skilled workers; [40] (iv) in
actions for indemnity under workmen's compensation and employer's liability laws;[41] and (v) in cases where the court
deems it just and equitable that attorney's fees and expenses of litigation should be recovered.[42]
In a catena of cases, the Court awarded attorney's fees in favor of illegally dismissed employees who were
compelled to file an action for the recovery of their lawful wages, which were withheld by the employer without any
valid and legal basis.[43] A plain showing that the lawful wages were not paid without justification was sufficient to
warrant an award of attorney's fees.[44]
Moreover, "Article 111 is an exception to the declared policy of strict construction in the award of attorney's
fees."[45] In fact, the general rule that attorney's fees may only be awarded upon proof of bad faith takes a different
turn when it comes to labor cases. The established rule in labor law is that the withholding of wages need not be
coupled with malice or bad faith to warrant the grant of attorney's fees under Article 111 of the Labor Code. [46] All that
is required is that the lawful wages were not paid without justification, thereby compelling the employee to litigate.[47]
Thus, based on the foregoing laws and jurisprudence, it becomes all too apparent that Alva, whose wages and
monetary benefits were unlawfully withheld, is indeed entitled to an award of attorney's fees.