Dismissing Managerial Employee Due To Loss of Trust

Loss of trust is a legal ground for terminating the services of an employee particularly for employees holding managerial positions. To establish loss of trust, proof beyond reasonable doubt is not required. An employer may take steps to dismiss a managerial employee for as long as there is some basis for the loss of confidence, such as when the employer has reasonable ground to believe that the employee concerned is responsible for the reported misconduct and his participation or involvement in the incident makes him unworthy of the trust of confidence demanded by his position. Thus, in one case, the discovery of a falsehood in the application form of a  managerial employee where she claimed to be a CPA but in fact was not, is a ground constituting loss of trust.

But having a sufficient ground for termination is not enough– the Supreme Court emphasized the need for performing the proper procedure for termination in order to avoid the payment of damages. Thus, you must still send the managerial employee concerned a written notice informing him of the acts or omissions leading to his termination, give him an opportunity to explain his side AND provide him with written notice stating the employer’s decision to terminate his services.  Without following due process, the employer may still be ordered to pay the employee nominal damages (not separation pay, not backwages).  In a recent case decided by the Supreme Court, the amount of nominal damages was Php30,000. (Case of Zenaida Mendoza vs. HMS Credit Corp. decided on April 17, 2013, GR No. 187232)