Proof Required in Allegation of Fraud in Employee Dismissal Cases

Proof Required in Allegation of Fraud in Employee Dismissal Cases

Where the employer claims that the employee’s act constituted fraud which warranted her dismissal, the employer has to submit substantial evidence as proof.

Article 297 (c) of Presidential Decree No. 442, also known as the Labor Code of the Philippines, provides that fraud or willful breach by the employee of the trust reposed in him or her by his or her employer or duly authorized representative is a ground for dismissal being a just cause.

As held by the Supreme Court in the case of Globe Telecom, Inc. vs. Ebitner (G.R. No. 242286, January 16, 2023), although written together, fraud is actually a separate and distinct ground for dismissal from the other ground provided which is loss of trust and confidence.

Further, although fraud necessarily results in loss of trust and confidence, the reverse is not always true; i.e., loss of trust and confidence does not always stem from fraud.

In a case where the First, employer erroneously assumes that the employee has already done the misdeed in the past and second, it falsely speculates that all of its 5,000 employees are predisposed to unduly adjust the bills of their friends and relatives, the SC held that it was highly speculative.

Even the employer’s conclusion that because of such circumstances, as a measure of self-preservation, the dismissal of employee was warranted, the SC held that it was a shallow position. While the company is

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perfectly free to take precautionary measures to protect its interests, it certainly cannot do so at the expense of its employees.

In the Globe Telecom case, the employee was authorized to make credit adjustments as part of her job. Note that the employer does not complain about the credit adjustment, only that the employee did not make the proper notation.

Once again, per SC, it cannot see how this – a mere violation in SOP – in itself translates to fraud and/or dishonesty and wish to highlight that the company failed to clearly demonstrate such.

Fraud or dishonesty on the part of the employee cannot be assumed, as the same implies a “conscious and intentional design to evade the normal fulfillment of existing obligations.”

Moreover, fraud must be proven to have been done intentionally, knowingly, and purposely; it must not be simply a result of carelessness, negligence, or inattention.

In other words, the burden was upon the employer to prove all these things. Unfortunately, if it failed to do so, then the dismissal is illegal.

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