2023 Labor Law, Q1

Santos Hauling Incorporated (SHI) dismissed its drivers and helpers after discovering that they were committing anomalous transactions involving the sale of excess broilers and crates, without the knowledge and consent of SHI. The drivers and helpers filed a complaint for illegal dismissal against SHI. In its defense, SHI presented as evidence the affidavits of co-employees narrating the alleged anomalous transactions in detail. May the drivers and helpers be dismissed on the basis of these affidavits? Explain your answer.

Quick check

Under Philippine labor law, what quantum of proof is required to establish just cause for an employee's dismissal?

Under JR Hauling Services v. Solamo, what is the legal effect of sworn affidavits executed by co-workers detailing an employee's anomalous acts?

Why were Santos Hauling Incorporated's drivers and helpers validly dismissed based on co-employee affidavits?

Which just cause under Article 297 of the Labor Code applies when employees sell company property without management consent?

How may dismissed employees successfully counter co-employee affidavits presented by an employer in an illegal dismissal case?

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1. Substantial Evidence Standard
Under Philippine labor law, administrative and labor proceedings are not bound by strict technical rules of evidence. Quantum of proof required in illegal dismissal cases is substantial evidence, which means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. Affidavits of co-employees detailing anomalous transactions constitute substantial evidence to prove just cause for termination, provided they are credible and specific. The employer is not required to establish guilt beyond reasonable doubt in labor proceedings.

2. Co-Employee Affidavits Credibility
Uncontroverted affidavits executed by co-workers attesting to fraudulent schemes or unauthorized sales of company property hold significant evidentiary weight in labor disputes. Under JR Hauling Services v. Solamo, sworn statements of co-employees detailing personal knowledge of anomalous transactions suffice to establish serious misconduct and willful breach of trust. When accused employees fail to produce clear and convincing rebuttal evidence or fail to refute specific allegations in sworn statements, those affidavits stand as valid legal bases supporting termination.

3. Termination Just Causes
Serious misconduct and willful breach of trust are valid just causes for dismissal under Article 297 of the Labor Code. Engaging in unauthorized sales of company assets like excess broilers and crates constitutes a grave violation of employee duty and dishonesty. Loss of confidence applies to employees who handle company property or trust positions. Where substantial evidence establishes that workers misappropriated company assets for personal gain, the employer validly exercises its management prerogative by terminating their employment.

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The questions reproduced here are the official texts of the Philippine Bar Examinations, published by the Supreme Court. They are reproduced for study purposes.The suggested answers are the author’s own.

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Where a question comes from an earlier examination, the suggested answer applies the law as it now stands, which may differ from the law in force when the question was given, and may therefore differ from what would have been the correct answer at that time. Where the difference is material, the answer notes it.The practice scoring feature measures wording overlap with the suggested answer. It is not a grade, carries no official weight, and says nothing about whether your reasoning is sound.Errors are possible. If you find one, please tell me and I will correct it.Last reviewed: October 2026