Letter to Legal Counsel

Dear Attorney,

I am seeking your advice regarding a sensitive employment matter. An employee has been issued a termination notice due to confirmed malversation of company funds for personal use. The termination is set to take effect in eight days. However, the employee has not reported for duty since receiving the notice and is no longer engaging in communication with the company.

We are concerned about how to address this situation legally and prudently. Could you kindly advise on the best course of action? Specifically, we need guidance on:

Whether the employee’s nonattendance during the notice period constitutes grounds for further action.
Steps to document or protect the company's position in light of this employee's sudden absence.
Whether withholding final pay or benefits is permissible under these circumstances until the matter is resolved.
Any necessary actions to recover misused funds or ensure accountability.

Your insights and expertise on the matter will be highly appreciated.

Sincerely,
A Concerned Employer

Legal Article: Addressing Employee Absence During Termination Notice Period in Cases of Malversation of Funds Under Philippine Law

Introduction

Under Philippine labor law, termination of employment due to just causes, such as malversation of company funds for personal use, requires adherence to due process and legal protocols. This article provides a comprehensive analysis of the implications and recourse available to employers when an employee, terminated for malversation, fails to report for work during the notice period preceding the termination effectivity date.

Understanding Just Cause Termination

1. Legal Framework for Termination Due to Malversation
Article 297 [282] of the Labor Code of the Philippines enumerates just causes for termination of employment. Misconduct, particularly malversation of funds, is considered a serious offense that undermines trust and confidence. In such cases, the employer has the legal right to terminate the employee after observing procedural due process.

Procedural Requirements for Just Cause Termination

Notice of Charges: The employer must serve a written notice to the employee, specifying the charges against them, supported by evidence of malversation.
Opportunity to Respond: The employee is entitled to a hearing or an opportunity to explain their side.
Final Decision Notice: If the employee is found liable, a termination notice must be served, clearly stating the grounds for termination and the effectivity date.

Addressing Nonattendance During the Notice Period

1. Employee's Obligations During the Notice Period
Employees, even after receiving a termination notice, are obligated to render services during the notice period unless expressly relieved by the employer. Failure to report for work without valid justification may be construed as abandonment of duties.

2. Legal Recourse for Employer

Documentation of Absence: Employers should maintain records of the employee's failure to report for duty, including attendance logs, communication attempts, and notices sent to the employee. This documentation serves as evidence should disputes arise.
Issuance of Follow-Up Notices: A written reminder or directive should be sent to the employee, requiring them to report for work during the notice period. It should state that their absence may have additional legal repercussions.

3. Employment Abandonment vs. Malversation
While malversation is a sufficient ground for termination, an employee's unexplained absence during the notice period could further solidify claims of employment abandonment. To establish abandonment, the employer must prove:

The employee's intention to sever ties with the company.
The lack of valid reasons for the employee’s absence.

Withholding Final Pay and Benefits

1. Legal Considerations
Employers may withhold final pay, benefits, or clearance documents if the employee has outstanding liabilities or accountabilities, such as unreturned funds or company property. This is permissible under labor law but should be done cautiously to avoid claims of illegal withholding.

Setoff Doctrine: Employers may deduct liabilities owed by the employee from their final pay, provided the deductions are justified and documented.
Notice to Employee: The employer should notify the employee of the withholding and provide an explanation, along with a detailed computation of liabilities.

Recovery of Misused Funds

1. Filing Criminal or Civil Actions
Employers have the option to pursue legal remedies to recover misappropriated funds:

Criminal Complaint for Qualified Theft or Estafa: If the employee's actions amount to criminal malversation, the employer may file a complaint with the appropriate authorities.
Civil Case for Damages: The employer may also initiate a civil case to recover the financial losses incurred due to the employee’s actions.

2. Coordination with Legal Counsel
Given the gravity of malversation, employers should consult with legal counsel to ensure that the evidence supports both criminal and civil claims.

Practical Steps for Employers

1. Communicate with the Employee
Employers should make reasonable attempts to contact the employee during the notice period, clearly stating the obligation to report for duty.

2. Secure Company Assets
Employers must act promptly to secure company assets, including intellectual property, financial records, and physical property under the employee’s control.

3. Coordinate with Authorities
If the employee’s absence complicates the recovery of misappropriated funds or property, coordination with law enforcement or regulatory authorities may be necessary.

4. Monitor Compliance with Labor Regulations
Employers must ensure that all actions taken, including withholding pay or benefits, comply with labor laws to prevent claims of unfair labor practices.

Balancing Employer Rights and Employee Protections

The Philippine labor framework aims to balance the rights of employers to enforce discipline with the employee’s right to due process and fair treatment. Employers should exercise their rights judiciously, ensuring compliance with labor regulations to avoid potential liabilities.

Conclusion

Addressing employee nonattendance during a termination notice period requires a proactive and legally sound approach. Employers must document all actions taken, communicate clearly with the employee, and seek legal guidance when necessary. By adhering to procedural requirements and leveraging available legal remedies, employers can safeguard their interests while complying with Philippine labor laws.