Saturday, January 27, 2018

Just Causes of Termination

The termination of employment must be accordance with established rules, principles and in a manner as required by law. The employer may only terminate an employee when there is a valid cause of termination and in accordance with the due process.

Just Causes of Termination

Just causes of termination refer to valid causes of termination arising from an employee’s fault and or negligence. In such cases of termination, the employer bears the burden of proof that the employee has committed an infraction of such grave that commensurate with the sanction of termination.

1. Serious Misconduct
Serious misconduct is a just cause for termination of employment, however, not every act of misconducts is a valid cause for dismissal. For misconduct to be a just cause for dismissal:
The misconduct must be serious. Mere error in judgment is not a misconduct;
 It must relate to the performance of the employee’s duties;
 Must show that the employee has become unfit to continue working for the employer;

(Examples)
The employee’s (an accounting manager) act of willfully understating the company’s profits or financial position, committed as it was in order to “save” costs, which to her warped mind, was supposed to benefit her employer, partakes serious misconduct. It was not merely a violation of company policy, but of the law itself, and put the employer at risk of being made legally liable. The dismissal in this case is warranted. An employer cannot be compelled to retain in its employ someone whose services are inimical to its interests. 


Two traffic operators who placed free long distance calls were dismissed by PLDT. The dismissal was upheld as valid. The dishonesty committed by the erring employee qualifies as serious misconduct especially that it goes to the very heart and essence of the company. Long distance call is the lifeblood of PLDT.

A ticket freight clerk was dismissed for dishonesty for charging to his VISA credit card some plane tickets in spite of the cash payment made by passengers. The dismissal was for a just cause. 


2. Willful Disobedience to lawful orders
As part of the employment contract, it is understood that employees are bound to follow reasonable and lawful orders of the employer which are in connection with their work. Therefore, intentionally or willfully disobeying such orders is a just cause of termination. Such disobedience need not be habitual and the damage to the employer is not a consideration for the termination. To uphold a dismissal due to willful disobedience;
 it must be established that the given orders, regulations or instructions were reasonable and lawful;
 sufficiently known to the employee; and,
 in connection with the duties which the employee has been engaged to discharge.

In case that a violation of company policy or breach of company rules and regulations was found to have been tolerated by management, then the same could not serve as a basis for termination.
At the same time, the motives of a company’s policy are not an excuse for the employee not to obey said policy.

3. Gross and Habitual Neglect of Duties
Gross and habitual neglect of duties is a just cause of termination. Gross negligence has been defined as the want or absence of or failure to exercise slight care or diligence, or the entire absence of care. In order to constitute a just cause for the employee’s dismissal, the neglect of duties must not only be gross but also habitual. Habitual neglect implies repeated failure to perform one’s duties for a period of time, depending upon the circumstances. Single isolated acts of negligence do not constitute a just cause for the dismissal of the employee.

However, in many cases, the SC (Supreme Court) upheld the validity of dismissal on the ground of gross negligence even if the act complained of was not habitual. It may become a valid cause of termination when the continued employment of the employee is inimical to the interest of the employer.
Habitual absenteeism and tardiness constitute gross and habitual neglect of duty. Repeated acts of absences without leave and frequent tardiness reflect indifferent attitude to and lack of motivation in his work

4. Fraud or willful breach of trust / Loss of Confidence
Loss of confidence refers to a condition arising from fraud or willful breach of trust by employee of the trust reposed in him by his employer. Fraud is any act, omission, or concealment which involves a breach of legal duty, trust, or confidence justly reposed and is injurious to another.
To be a valid termination based on loss of confidence;
the employee must hold position of Trust and Confidence. Ex) managerial employees, cashiers, auditors, property custodians, etc. However, title is not a conclusive indicator. It will be decided by the authority actually possessed by the employee;
must be committed in connection with the employee’s work or related to the performance of the employee’s functions;
Breach of Trust must be willful;

5. Commission of a crime or offense. 
Commission of a crime or offense by the employee against his employer or any immediate member of his family or his duly authorized representative, is a just cause for termination of employment.
6. Analogous causes. 
Other causes analogous to the above grounds may also be a just cause for termination of employment.

Examples of Analogous Causes

Abandonment 
Abandonment of job is a form of neglect of duty. There is abandonment when the employee leaves his job or position with a clear and deliberate intent to discontinue his employment without any intention of returning back.
Gross inefficiency
Gross inefficiency is analogous to and closely related to gross neglect for both involve acts or omissions on the part of the employee resulting in damage to the employer or to his business.
Disloyalty/conflict of interest 
Disloyalty exists when one asserts an interest, or performs acts adverse to one’s employer, such as secretly engaging in a business which renders him a competitor and rival of his employer. It constitutes a breach of an implied condition of the contract of employment.
Dishonesty 
Acts of dishonesty deemed to be patently inimical to the employer is analogous to breach of trust and is a valid cause for termination of employment.


Notes: Each case has different situation, so you should consult with an attorney before proceed.

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