The Importance of Substantive Evidence in Dismissal Cases Due to Loss of Trust and Confidence

Noel M. Manrique v. Delta Earthmoving, Inc., et al., G.R. No. 229429, November 09, 2020

Imagine being dismissed from your job without clear reasons or evidence, leaving you unsure of your rights and future. This is the reality that faced Noel M. Manrique, an Assistant Vice President for Mining Services at Delta Earthmoving, Inc. His case highlights the critical issue of dismissal due to loss of trust and confidence, a common ground for termination in the Philippines. The central legal question was whether the employer had substantial evidence to justify Manrique’s dismissal, a question that resonates with many employees and employers alike.

Manrique was hired by Delta Earthmoving, Inc. in January 2013 and later assigned to manage the Oceana Gold Philippines, Inc. – Didipio Gold Project. In December 2013, he was abruptly told to leave and not return to work, a decision he contested as illegal dismissal. Delta Earthmoving, Inc. argued that Manrique’s dismissal was justified due to poor performance and loss of trust and confidence, supported by performance evaluations and memoranda. The case’s journey through the Labor Arbiter, National Labor Relations Commission (NLRC), and Court of Appeals (CA) ultimately reached the Supreme Court, which had to determine the validity of the dismissal.

Legal Context: Understanding Dismissal for Loss of Trust and Confidence

The concept of loss of trust and confidence is enshrined in Article 297(c) of the Philippine Labor Code, which allows employers to terminate employment due to “fraud or willful breach by the employee of the trust reposed in him by his employer.” This provision is particularly applicable to managerial employees, who are expected to uphold a higher standard of fidelity due to their position of trust.

To justify dismissal on this ground, two conditions must be met: the employee must hold a position of trust and confidence, and there must be an act that justifies the loss of trust. The Supreme Court has clarified that while proof beyond reasonable doubt is not required, the employer must demonstrate a basis for believing that the employee has breached their trust.

However, the subjective nature of this ground for dismissal means it is often scrutinized to prevent abuse. Employers must provide substantial evidence of the breach, as mere allegations or afterthoughts are insufficient. This case underscores the importance of due process, as outlined in Article 292(b) of the Labor Code, which mandates written notices and an opportunity for the employee to defend themselves.

Case Breakdown: The Journey of Noel M. Manrique

Noel M. Manrique’s journey began with his hiring as Assistant Vice President for Mining Services at Delta Earthmoving, Inc. in January 2013. His role involved managing the human resources department and performing administrative functions at the Didipio mine site. In June 2013, he was assigned to oversee operations at the Oceana Gold Philippines, Inc. – Didipio Gold Project.

The turning point came on December 29, 2013, when Manrique was instructed to pack his belongings and not return to work. His immediate supervisor, Ian Hansen, conveyed the termination decision from the head office. Manrique visited the head office to verify the dismissal, where he was asked to resign voluntarily, which he refused. He then filed a complaint for illegal dismissal.

Delta Earthmoving, Inc. defended the dismissal, citing Manrique’s alleged poor performance, which they claimed led to a loss of trust and confidence. They presented performance evaluations and memoranda as evidence. However, the Labor Arbiter found these documents suspect, noting that the performance evaluation lacked a date and was conducted by someone not Manrique’s immediate supervisor. Additionally, Manrique was never given copies of these documents.

The Labor Arbiter ruled in favor of Manrique, ordering Delta Earthmoving, Inc. to pay separation pay, backwages, and other benefits. Delta Earthmoving, Inc. appealed to the NLRC, which reversed the decision, finding the dismissal valid. Manrique then sought relief from the Court of Appeals, which upheld the NLRC’s decision.

The Supreme Court, in its decision, emphasized the importance of substantial evidence in dismissal cases. They noted that the performance evaluation and memoranda were not provided to Manrique, suggesting they were a mere afterthought to justify the dismissal. The Court also highlighted Delta Earthmoving, Inc.’s failure to comply with the two-notice rule, as Manrique was not given formal notices of his termination.

Key quotes from the Supreme Court’s decision include:

• “Managerial employees could not simply be dismissed on account of their position and this Court agrees with the incisive findings of the LA that the performance evaluation and the memoranda deserve no merit as these were not even furnished to Manrique.”
• “Delta Earth’s allegation of poor performance resulting in loss of trust and confidence was not clearly and convincingly supported by established facts, hence, is not sufficient to warrant Manrique’s separation from employment.”

Practical Implications: Navigating Dismissal for Loss of Trust and Confidence

This ruling reaffirms that employers must provide substantial evidence to justify dismissal due to loss of trust and confidence. It highlights the necessity of adhering to procedural due process, including providing written notices and opportunities for employees to defend themselves.

For businesses, this case serves as a reminder to maintain clear and documented performance evaluations and to ensure that any dismissal is supported by concrete evidence. Employees should be aware of their rights to due process and the importance of challenging dismissals that lack substantial evidence.

Key Lessons:

• Employers must provide substantial evidence to justify dismissal on grounds of loss of trust and confidence.
• Compliance with procedural due process, including the two-notice rule, is crucial in dismissal cases.
• Employees should document their work performance and challenge dismissals that lack clear evidence.

Frequently Asked Questions

What is loss of trust and confidence as a ground for dismissal?

Loss of trust and confidence is a just cause for dismissal under Article 297(c) of the Philippine Labor Code, applicable to employees in positions of trust. It requires evidence of a willful breach of trust by the employee.

What must an employer prove to justify dismissal on this ground?

The employer must show that the employee holds a position of trust and that there is an act justifying the loss of trust. While proof beyond reasonable doubt is not required, substantial evidence is necessary.

What is the two-notice rule in dismissal cases?

The two-notice rule under Article 292(b) of the Labor Code requires employers to provide a written notice of the reasons for termination and a second notice after considering the employee’s defense.

Can an employee challenge a dismissal based on loss of trust and confidence?

Yes, employees can challenge such dismissals if they believe the employer did not provide substantial evidence or failed to follow due process.

What should employees do if they are dismissed without proper evidence?

Employees should gather evidence of their performance and file a complaint with the National Labor Relations Commission to contest the validity of their dismissal.

ASG Law specializes in labor and employment law. Contact us or email hello@asglawpartners.com to schedule a consultation.