Cases: Fraud

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What is a Labor Law Case or Labor Jurisprudence? A Labor Law Case or Labor Jurisprudence is a decision/resolution on a labor dispute by the Supreme Court of the Philippines. Per Article 8 of the Civil Code, judicial decisions applying or interpreting the laws or the Constitution shall form part of the legal system of the Philippines. 

1. Conviction of a crime

In Concepcion v. Minex Import Corporation, the rule was reiterated that conviction was not required to validly dismiss an employee of a criminal offense, viz:



Concepcion v. Minex Import Corporation

G.R. No.153569, 24 January 2012

The employer may validly dismiss for loss of trust and confidence an employee who commits an act of fraud prejudicial to the interest of the employer. Neither a criminal prosecution nor a conviction beyond reasonable doubt for the crime is a requisite for the validity of the dismissal. Nonetheless, the dismissal for a just or lawful cause must still be made upon compliance with the requirements of due process under the Labor Code; otherwise, the employer is liable to pay nominal damages as indemnity to the dismissed employee.

x x x

Indeed, the employer is not expected to be as strict and rigorous as a judge in a criminal trial in weighing all the probabilities of guilt before terminating the employee. Unlike a criminal case, which necessitates a moral certainty of guilt due to the loss of the personal liberty of the accused being the issue, a case concerning an employee suspected of wrongdoing leads only to his termination as a consequence. The quantum of proof required for convicting an accused is thus higher – proof of guilt beyond reasonable doubt – than the quantum prescribed for dismissing an employee – substantial evidence. In so stating, we are not diminishing the value of employment, but only noting that the loss of employment occasions a consequence lesser than the loss of personal liberty, and may thus call for a lower degree of proof.

The same rule was re-echoed in National Labor Union, Inc. v. Standard Vacuum Oil Company:

“… The conviction of an employee in a criminal case is not indispensable to warrant his dismissal by his employer. If there is sufficient evidence to show that the employee has been guilty of a breach of trust, or that his employer has ample reason to distrust him, it cannot justly deny to the employer the authority to dismiss such employee. All that is incumbent upon the Court of Industrial Relations (now National Labor Relations Commission) to determine is whether the proposed dismissal is for just cause… It is not necessary for said court to find that an employee has been guilty of a crime beyond reasonable doubt in order to authorize his dismissal.” (National Labor Union, Inc. v. Standard Vacuum Oil Company, G.R. No. L-48170, 10 October 1941)

However, the above rule does not do away with employer’s obligation to conduct its own investigation and observe due process – even if there is an ongoing criminal proceeding or investigation.



Concepcion v. Minex Import Corporation

G.R. No.153569, 24 January 2012

[The employee – a Store Supervisor –  was subjected to an arrest and a criminal case for qualified theft after a sum went missing. When she got out of jail, the employer refused to see her again.]

The [employee] plainly demonstrated how quickly and summarily her dismissal was carried out without first requiring her to explain anything in her defense… Instead, the [employers] forthwith had her arrested and investigated by the police authorities for qualified theft. This, we think, was a denial of her right to due process of law, consisting in the opportunity to be heard and to defend herself  In fact, their decision to dismiss her was already final even before the police authority commenced an investigation of the theft, the finality being confirmed by no less than Sylvia Mariano herself telling the [employee] during their phone conversation following the latter’s release from police custody on November 11, 1997 that she (Sylvia) “no longer wanted to see” her.

The fact that the [employers] was the only person suspected of being responsible for the theft aggravated the denial of due process. When the [employers] confronted her in the morning of November 10, 1997 for the first time after the theft, they brought along a police officer to arrest and hale her to the police precinct to make her answer for the theft. They evidently already concluded that she was the culprit despite a thorough investigation of the theft still to be made… They wittingly shunted aside the tenets that mere accusation did not take the place of proof of wrongdoing, and that a suspicion or belief, no matter how sincere, did not substitute for factual findings carefully established through an orderly procedure.


For emphasis, due process should still be observed by the employer even if there is a criminal proceeding/investigation being done by the authorities. Otherwise stated, the employers are required to conduct their own investigation and afford the employee an ample opportunity to be heard.

2. Acquittal or dropping of criminal charges

In Batangas Laguna Tayabas Bus Company (BLTB Co.) v. Aquino, the employees – Bus Conductors – were detained and charged for their alleged involvement in the defraudation of the employer. In overturning the ruling of the Labor Arbiter which required the conviction of the employees, the Supreme Court held:



Batangas Laguna Tayabas Bus Company (BLTB Co.) v. Aquino

G.R. No. L-69875, 28 October 1988

… By the nature of their work as bus conductors, [the employer] had no choice but to repose its trust and confidence on [the employees] that they would remit the day’s collection of fares to the company. Having been prima facie shown to be involved in the mass defraudation of the company as evidenced by the filing of criminal charges for estafa against [the employees] and 34 other co-employees, it is to be expected that the company should lose its trust in them. The daily collection of fares is the company’s very lifeblood and to continue those who have been prima facie shown to have pocketed part of said fares in its employ, would be highly inimical if not suicidal, for [the employer].

Fraud or willful breach of trust reposed upon an employee by his employer is a recognized cause for termination of employment and it is not necessary that the employer should await the employee’s final conviction in the criminal case involving such fraud or breach of trust before it can terminate the employee’s services. In fact, even the dropping of the charges or an acquittal of the employee therefrom does not preclude the dismissal of an employee for acts inimical to the interests of the employer.

To our mind, the criminal charges initiated by the company against [the employees] and the finding after preliminary investigation of their prima facie guilt of the offense charged constitute substantial evidence sufficient to warrant a finding by the Labor Tribunal of the existence of a just cause for their termination based on loss of trust and confidence. The Labor Tribunal need not have gone further as to require [the employee’s] conviction of the crime charged, or inferred innocence on their part from their release from detention, which was mainly due to their posting of bail.


On a related note, employers may still withdraw a criminal case prior to the presentation of their evidence in court.

Disclaimer: All information is for educational and general information only. These should not be taken as professional legal advice or opinion. Please consult a competent lawyer to address your specific concerns. Any statements or opinions of the author are solely his own and do not reflect that of any organization he may be connected.

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