I.

CLASSES OF POSITIONS ON TRUST

SUBSTANTIVE ASPECT; DISMISSAL BASED ON LOSS OF TRUST AND CONFIDENCE

[BAGUIO CENTRAL UNIVERSITY, Petitioner, vs. IGNACIO GALLENTE, Respondent. G.R. No. 188267, December 2,
2013]

Loss of trust and confidence is a just cause for dismissal under Article 282(c) of the Labor
Code. Article 282(c) provides that an employer may terminate an employment for "fraud or
willful breach by the employee of the trust reposed in him by his employer or duly authorized
representative." However, in order for the employer to properly invoke this ground, the
employer must satisfy two conditions.
First, the employer must show that the employee concerned holds a position of trust
and confidence.. Second, the employer must establish the existence of an act justifying the loss
of trust and confidence.
Jurisprudence provides for two classes of positions of trust: (1) managerial employees
and (2) fiduciary rank-and-file employees.
Managerial employees are defined as those vested with the powers or prerogatives to
lay down management policies and to hire, transfer, suspend, lay-off, recall, discharge, assign or
discipline employees or effectively recommend such managerial actions. They refer to those
whose primary duty consists of the management of the establishment in which they are
employed or of a department or a subdivision thereof, and to other officers or members of the
managerial staff. Officers and members of the managerial staff perform work directly related to
management policies of their employer and customarily and regularly exercise discretion and
independent judgment.
The second class or fiduciary rank-and-file employees consist of cashiers, auditors,
property custodians, etc., or those who, in the normal exercise of their functions, regularly
handle significant amounts of money or property.[34] These employees, though rank-and-file,
are routinely charged with the care and custody of the employers money or property, and are
thus classified as occupying positions of trust and confidence.

II. SIGNIFICANCE OF IMASEN CASE

G.R. No. 194884, October 22, 2014

IMASEN PHILIPPINE MANUFACTURING CORPORATION, petitioner,
Vs. RAMONCHITO T. ALCON, and JOANN S. PAPA, respondents

Preliminary Considerations: Management Prerogatives

Law and jurisprudence guarantee to every employee security of tenure. Courts will not
hesitate to strike down any invalid act of the employer to undermine workers’ tenurial security,
in accordance with social justice principles.
The law, however, does not authorize the oppression of the employer. Constitutional and
legal protection equally recognize the employer’s right and prerogative to manage its operation
according in reasonable standards and norms for fair play.
Accordingly, an employer is free to regulate, according to his own judgment and
discretion, all aspects of employment, including hiring, working methods, processes, working
regulations, the discipline, dismissal of workers, etc. As a general proposition, an employer has
free reign over every aspect of its business, as long as the exercise of management prerogative is
 done reasonably, in good faith, and in a manner not otherwise intended to defeat or circumvent
the rights of workers.
In this light, the Court’s task is to balance such conflicting rights of the respondent’s
security of tenure, and Imasen’s management prerogative.

Elements of Serious Misconduct for a Just Cause for Dismissal

According to Art. 296 of the labor Code, serious misconduct by the employee justifies the
employer terminating his or her employment.
Misconduct is defined as an improper or wrong conduct. It implies wrongful intent, and
not mere error in judgment. To constitute a valid cause of dismissal under Art. 296, the following
elements must be present:
a. the misconduct must be serious (of such grave and aggravated character and not merely
trivial or unimportant)
b. it must relate to the performance of the employer’s duties showing that the employee
has become unfit to continue working for the employer, and
c. it must have been performed with wrongful intent

Supreme Court’s Ruling

NLRC is correct in affirming the respondents’ dismissal.
Sexuall acts between two consenting adults belong to the realm of purely private
relations. Wthether aroused by lust or sincere affection, such acts should be carried out when and
where it will not offend public decency nor disturb accepted social morals. As such, sexual acts
between two adults have no place in the work environment.
The facts itself are already punishable misconduct. Respondents did not only disregard
company rules but flaunted their disregard in a manner that could reflect adversely on the status
of ethics and morality in the company.
Additionally, respondents engaged in sexual intercourse in an area where company
personnel have ready and available access, and when such personnel are, in fact, working.
Hence, respondents’ misconduct are to be considered grave and aggravated in character
so the company was justified in imposing dismissal. By their misconduct, they issued an open
invitation for others to commit the same infraction. Taken together, these considerations reveal
a depraved disposition that the Court considered as a valid cause for dismissal.

III. BISIG MANGGAGAWA SA TRYCO V. NLRC – VALID TRANSFER, NO CONSTRUCTIVE DISMISSAL.

BISIG MANGGAGAWA SA TRYCO and/or FRANCISCO SIQUIG, as Union President, JOSELITO

LARIO, VIVENCIO B. BARTE, SATURNINO EGERA and SIMPLICIO AYA-AY, Petitioners, - versus -
NATIONAL LABOR RELATIONS COMMISSION, TRYCO PHARMA CORPORATION, and/or
WILFREDO C. RIVERA, G.R. No. 151309, October 15, 2008

In this case, the Labor Arbiter, the NLRC, and the CA uniformly agreed that the petitioners
were not constructively dismissed.
Tryco's decision to transfer its production activities to San Rafael, Bulacan, regardless of
whether it was made pursuant to the letter of the Bureau of Animal Industry, was within the scope
of its inherent right to control and manage its enterprise effectively. While the law is solicitous of
the welfare of employees, it must also protect the right of an employer to exercise what are clearly
management prerogatives. The free will of management to conduct its own business affairs to
achieve its purpose cannot be denied.
 This prerogative extends to the management's right to regulate, according to its own
discretion and judgment, all aspects of employment, including the freedom to transfer and
reassign employees according to the requirements of its business. Management's prerogative of
transferring and reassigning employees from one area of operation to another in order to meet
the requirements of the business is, therefore, generally not constitutive of constructive dismissal.
Thus, the consequent transfer of Tryco's personnel, assigned to the Production Department was
well within the scope of its management prerogative.
When the transfer is not unreasonable, or inconvenient, or prejudicial to the employee,
and it does not involve a demotion in rank or diminution of salaries, benefits, and other privileges,
the employee may not complain that it amounts to a constructive dismissal. However, the
employer has the burden of proving that the transfer of an employee is for valid and legitimate
grounds. The employer must show that the transfer is not unreasonable, inconvenient, or
prejudicial to the employee; nor does it involve a demotion in rank or a diminution of his salaries,
privileges and other benefits.
Indisputably, in the instant case, the transfer orders do not entail a demotion in rank or
diminution of salaries, benefits and other privileges of the petitioners. Petitioners, therefore,
anchor their objection solely on the ground that it would cause them great inconvenience since
they are all residents of Metro Manila and they would incur additional expenses to travel daily
from Manila to Bulacan.
The Court has previously declared that mere incidental inconvenience is not sufficient to
warrant a claim of constructive dismissal. Objection to a transfer that is grounded solely upon the
personal inconvenience or hardship that will be caused to the employee by reason of the transfer
is not a valid reason to disobey an order of transfer.