Employee theft is a serious matter that carries significant consequences under Philippine law. Among these implications are labor, civil, and criminal aspects, all of which an employer must carefully consider.
Various types of theft occur in the workplace, including outright theft of the employer’s money, falsifying payments to vendors and pocketing the budget, and stealing office supplies, materials, or products.
When an employee steals from their employer, the worst response is the immediate termination of the employer-employee relationship. Conversely, ignoring the incident and pretending that everything is fine can negatively impact the workplace culture. Before long, other employees may assume that stealing from the employer is acceptable, leading to widespread dishonesty.
LABOR IMPLICATIONS
While not indispensable, companies typically include theft as a punishable offense in their internal Employees’ Handbook or similar policies, prescribing corresponding penalties. Under Philippine labor law, employers have the prerogative to establish company policies and rules of conduct. Unless shown to be grossly oppressive or contrary to law, these policies are generally valid and binding. The Supreme Court has consistently upheld the dismissal of employees for violating company rules, emphasizing the importance of reasonable company policies.
The rules of conduct and discipline must be fair and reasonable based on the circumstances of each case. Before disciplining an employee for violating disciplinary rules, the employer must prove that the rules are work-related, made known to the employee, and that the imposed penalties are reasonable. It is crucial to inform employees of any company policy, provide them with a copy, and request their acknowledgment. Periodic reminders and training can also reinforce these policies.
Even without an express policy on theft, an employee can still be penalized under Article 297 of the Labor Code. Theft can be classified as serious misconduct, willful disobedience of the lawful orders of the employer in connection with work, fraud, willful breach of trust, or commission of a crime. In some cases, theft may also constitute gross and habitual neglect of duties.
However, having just cause for termination is not enough. The employer must also observe procedural due process, which requires issuing two notices.
The first is a notice to explain, containing the specific causes or grounds for termination, and giving the employee an opportunity to submit a written explanation within a reasonable period. After determining that termination of employment is justified, the employer must serve a written notice of termination indicating that: (1) all circumstances involving the charge against the employee have been considered; and (2) grounds have been established to justify the termination of employment.
CIVIL IMPLICATIONS
To recover the stolen items or their value, the employer may deduct the corresponding amount from the employee’s final pay, provided that the employee has given a written authorization for any deductions.
If there is no final pay to deduct from, employers can file a civil case to recover the stolen assets or their monetary value. Under Article 2176 of the Civil Code, an employer can claim damages resulting from the theft, including restitution of the stolen amount and compensation for consequential damages.
Civil liability can also be included in a criminal case. The rule is that every person who is criminally liable is also civilly liable. In civil cases, the employer must establish the employee’s liability by a preponderance of evidence, meaning the evidence must show it is more likely than not that the employee committed the theft. However, in criminal cases, the prosecution must prove the employee’s guilt beyond a reasonable doubt.
CRIMINAL IMPLICATIONS
An employer may file different criminal cases against the employee depending on the specific circumstances. The most common case against a thieving employee is Qualified Theft, which is punishable by two degrees higher than simple theft. Qualified Theft involves grave abuse of confidence by an employee or person entrusted with the care of the property. Employers generally place significant trust in their personnel to responsibly manage company property. Consequently, the law regards this breach of trust with heightened severity, resulting in more stringent penalties when an employee perpetrates theft against their employer.
Before filing a Complaint-Affidavit with the Prosecutor’s Office, the employer must ensure that all documentation and evidence against the former employee is sufficient. This is crucial, considering the quantum of evidence required before an information is filed in court has recently been raised to “prima facie evidence with reasonable certainty of conviction.”
Employee theft has far-reaching implications under Philippine law, affecting labor relations, civil and criminal liabilities, among others. Employers must ensure they have robust policies, observe due process in disciplinary actions, and pursue appropriate legal remedies to protect their interests. Understanding these legal frameworks helps in effectively managing and mitigating the risks associated with employee theft.
This article is for informational and educational purposes only. It is not offered and does not constitute legal advice or legal opinion.
Martin Luigi G. Samson is a Senior Associate of the Angara Abello Concepcion Regala & Cruz Law Offices (ACCRALAW), Davao Branch.
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