Is Conflict of Interest a Just Cause of Dismissal? | 10 May 2024

Implicit in the contract of employment is the undertaking that the employee shall be faithful to the interest of the employer during the term of the employment. When an employee deliberately acquires an interest adverse to his employer, he is disloyal, and his discharge is justified. (Elizalde International vs. CA, G.R. No. L40553, February 26, 1981)

Author

Alburo Law
May 10, 2024

Is Conflict of Interest a Just Cause of Dismissal?

Implicit in the contract of employment is the undertaking that the employee shall be faithful to the interest of the employer during the term of the employment. When an employee deliberately acquires an interest adverse to his employer, he is disloyal, and his discharge is justified. (Elizalde International vs. CA, G.R. No. L40553, February 26, 1981)

SUPREME COURT DECISION: RODCO CONSULTANCY AND MARITIME SERVICES CORPORATION VS. FLOSERFINO G. ROSS AND ANTONIA T. ROSS

Issue:

Is the Irrevocable Memorandum of Agreement entered into between RODCO on one hand, and Floserfino and Antonia on the other hand valid?

Ruling:

No. The contract entered into by RODCO, Floserfino and Antonia is void.

Under the principle of autonomy of contracts, the parties are free to establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy. Equally important is the principle that when the terms of an agreement have been reduced in writing, it is considered as containing all the terms agreed upon and there can be, as between the parties and their successors in interest, no evidence of such terms other than the contents of the written agreement.

The contract entered into by RODCO, Floserfino and Antonia is denominated as “Irrevocable Memorandum of Agreement”, supplemented by an “Affidavit of Undertaking” and a “Special Power of Attorney”. The Court held that such transaction has the features of litigation financing by a third party.

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