In Ruby C. Del Rosario v. CW Marketing & Development Corporation, the Supreme Court affirmed that an employer has the right to terminate an employee for loss of trust and confidence when the employee’s negligence in handling company property results in damage to the employer’s reputation. The ruling emphasizes that supervisors are held to a higher standard of care, and their failure to prevent the misuse of company resources by subordinates can be a valid basis for termination. This decision reinforces the importance of maintaining ethical standards and safeguarding company interests, especially for employees in positions of trust.

The Supervisor’s Watch: When Negligence Leads to Loss of Trust

This case revolves around Ruby C. Del Rosario, a Sales Supervisor at CW Marketing & Development Corporation. Del Rosario was terminated after falsified documents, created by her subordinates using a computer assigned to her, were submitted to a bank for credit card applications. CW Marketing argued that Del Rosario’s negligence in allowing her subordinates to misuse company property, specifically the computer and printer/scanner under her supervision, led to a loss of trust and confidence, justifying her dismissal. The central legal question is whether Del Rosario’s actions, or lack thereof, constituted a valid basis for termination under the Labor Code.

The Labor Code of the Philippines specifies the grounds for which an employer may terminate an employment. Article 297 (formerly Article 282) explicitly includes:

(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative.

Building on this, the Supreme Court has consistently held that loss of trust and confidence is a valid cause for termination, particularly for employees holding positions of responsibility. However, it is equally important that this loss of trust must be based on substantial evidence and linked to the employee’s work-related duties.

In Del Rosario’s case, the Court emphasized her position as a Sales Supervisor. As such, she occupied a fiduciary role that demanded a higher degree of responsibility and care, especially concerning company property. The fact that Del Rosario was entrusted with the sole computer connected to the printer/scanner at her branch underscored the importance of her role in safeguarding these resources.

The Court found that Del Rosario’s own admissions served as crucial evidence against her. She acknowledged that the computer assigned to her was her accountability. She was aware of her subordinates’ misuse of the equipment to create falsified documents. Further, she knew that these documents were used to apply for credit cards. Despite this knowledge, she failed to take appropriate action to prevent the misuse of company property. This inaction, the Court reasoned, constituted a breach of the trust reposed in her by CW Marketing.

It’s important to note that Del Rosario was not accused of directly participating in the falsification. Instead, the Court focused on her negligence and lack of oversight as a supervisor. Her responsibility was to ensure the proper use of company resources, and her failure to do so resulted in potential damage to CW Marketing’s reputation and credit standing. This is similar to what happened in Etcuban, Jr. v. Sulpicio Lines, Inc., where the Court stated:

Whether or not the respondent was financially prejudiced is immaterial. Also, what matters is not the amount involved, be it paltry or gargantuan; rather the fraudulent scheme in which the petitioner was involved, which constitutes a clear betrayal of trust and confidence.

The Court underscored that for positions requiring utmost trust, there is no substitute for honesty. Infractions, which might be overlooked for ordinary workers, can lead to severe disciplinary actions for those in managerial roles. Continuing employment in a sensitive position, after breaching the trust, would be detrimental to the employer’s interests.

The decision underscores that loss of trust and confidence, as a valid cause for dismissal, should be work-related and demonstrate the employee’s unsuitability to continue working for the employer. The breach of trust must be intentional, knowing, and without justifiable excuse. It must arise from the voluntary or willful act of the employee, or from some blameworthy act or omission.

In summary, even without direct involvement in the fraudulent scheme, Del Rosario’s knowledge of her subordinates’ actions and her subsequent silence demonstrated a lack of concern for CW Marketing, which was unfitting for her position as Sales Supervisor. The Supreme Court agreed with the Court of Appeals:

As the supervisor, [Del Rosario] should have called the attention of those responsible tor the scanning and editing of [payslips] and identification cards. However, she kept her silence and only divulged her knowledge thereof when the results of the investigation pointed out that the tampered documents originated from her computer. Her failure to call her subordinates’ attention and take the necessary precaution with regard to her computer, adversely reflected on her competence and integrity, sufficient enough for her employer to lose trust and confidence in her.

FAQs

What was the key issue in this case?	The central issue was whether the employer, CW Marketing, had a valid cause to terminate Ruby C. Del Rosario’s employment based on loss of trust and confidence due to her negligence in handling company property. The key question was whether her supervisory role demanded a higher standard of care, making her accountable for the misuse of company resources by her subordinates.
What was Del Rosario’s role in the company?	Del Rosario was a Sales Supervisor at CW Marketing & Development Corporation, assigned to the Home Depot, Balintawak Branch. Her responsibilities included overseeing sales consultants and managing company resources within her assigned department.
What actions led to Del Rosario’s termination?	Del Rosario was terminated after falsified documents, created by her subordinates using a computer assigned to her, were submitted to a bank for credit card applications. The company argued that her negligence in allowing the misuse of company property led to a loss of trust and confidence.
Did Del Rosario directly participate in the falsification of documents?	The Court found that Del Rosario did not directly participate in the falsification of documents. However, her lack of oversight and failure to prevent the misuse of company property by her subordinates were the primary reasons for her termination.
What is the legal basis for terminating an employee for loss of trust and confidence?	Article 297 of the Labor Code allows employers to terminate employment for fraud or willful breach of the trust reposed in the employee. This is particularly applicable to employees holding positions of responsibility and trust.
Why was Del Rosario held to a higher standard of care?	As a Sales Supervisor, Del Rosario occupied a fiduciary position that demanded a higher degree of responsibility and care. Her role required her to safeguard company resources and prevent their misuse.
What was the Court’s reasoning in upholding the termination?	The Court reasoned that Del Rosario’s knowledge of her subordinates’ actions and her subsequent silence demonstrated a lack of concern for CW Marketing, which was unfitting for her position. The Supreme Court ruled that the termination was valid.
What is the significance of this ruling for employers?	The ruling reinforces an employer’s right to terminate an employee for loss of trust and confidence when the employee’s negligence results in damage to the employer’s reputation. It emphasizes that supervisors are held to a higher standard of care.
Does this ruling mean employers can terminate employees without due process?	No, this ruling does not eliminate the requirement for due process. Employees must still be given an opportunity to be heard and defend themselves before termination.

The Del Rosario v. CW Marketing case highlights the responsibility of employees in positions of trust to protect company assets and maintain ethical standards. It serves as a reminder that negligence and inaction, particularly in supervisory roles, can have significant consequences, including termination of employment. This decision underscores the importance of due diligence and oversight in ensuring the proper use of company resources.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: RUBY C. DEL ROSARIO, PETITIONER, VS. CW MARKETING & DEVELOPMENT CORPORATION/KENNETH TUNG, G.R. No. 211105, February 20, 2019