The rise of remote work has introduced novel challenges for Philippine employers, particularly concerning fraudulent activities perpetrated by remote staff. Among the most prevalent are Recruitment Fraud (e.g., identity theft, falsification of credentials, or "double-dipping" with multiple full-time employers) and Burial Expense Scams (soliciting "death benefits" or loans based on fabricated family deaths).
Under Philippine law, these actions are not merely grounds for termination but constitute criminal offenses.
1. Grounds for Termination under the Labor Code
The Labor Code of the Philippines (Presidential Decree No. 442) provides the primary framework for addressing employee dishonesty.
- Serious Misconduct (Art. 297 [a]): Fraudulent claims for burial expenses or falsifying recruitment documents qualify as serious misconduct. To justify dismissal, the misconduct must be serious and connected to the employee's duties, showing the employee is unfit to continue working.
- Fraud or Willful Breach of Trust (Art. 297 [c]): This is the most common ground for these scams. Employers have the right to terminate employees who occupy positions of trust (or even rank-and-file employees who commit fraud) once the employer’s confidence is breached through dishonest acts.
- Commission of a Crime (Art. 297 [d]): If the employer files a criminal case and the act is proven, this serves as a standalone ground for termination.
2. Criminal Liability under the Revised Penal Code (RPC)
Remote employees committing these scams can be prosecuted under several articles of the Revised Penal Code:
A. Estafa (Article 315)
Recruitment fraud and burial scams generally fall under Estafa (swindling).
- By Deceit: If an employee uses a "false pretense" (e.g., claiming a relative died or using a fake identity to get hired) to induce the employer to part with money (salary, signing bonus, or burial assistance), they commit Estafa.
- By Abuse of Confidence: Taking advantage of the employer’s trust to misappropriate funds.
B. Falsification of Documents (Articles 171 & 172)
Recruitment fraud often involves the submission of forged diplomas, NBI clearances, or previous employment certificates.
- Falsification by a Private Individual: Any person who falsifies a private, public, or official document to cause damage can be imprisoned.
- Use of Falsified Documents: Even if the employee didn't "make" the fake document, the mere act of introducing it into the recruitment process is a crime.
C. Other Deceits (Article 318)
If the fraud does not perfectly fit the elements of Estafa under Article 315, it may fall under "Other Deceits," which penalizes any person who defrauds another through any method not mentioned in the preceding articles.
3. The Cybercrime Prevention Act of 2012 (R.A. 10175)
Because these scams occur in a remote/digital context, the Cybercrime Prevention Act is a powerful tool for prosecution.
- Computer-related Fraud (Section 4 [b][2]): This involves the unauthorized input, alteration, or deletion of computer data to hinder the functioning of a system with fraudulent intent. If an employee alters digital records or uses digital means (email, Slack, Telegram) to perpetrate a burial scam, they may face higher penalties than under the RPC alone.
- Penalty Escalation: Crimes committed through the use of Information and Communications Technologies (ICT) carry a penalty one degree higher than those prescribed by the Revised Penal Code.
4. Civil Liability and Recovery
Beyond criminal prosecution, employers can initiate a Civil Action for Damages under the Civil Code of the Philippines.
- Article 19, 20, and 21 (Human Relations): These articles mandate that every person must act with justice, give everyone his due, and observe honesty and good faith.
- Recovery of Monies: Employers can sue for the return of the defrauded amounts, plus moral damages (for injury to the company's reputation) and exemplary damages (to set an example).
5. Procedural Requirements: The "Two-Notice" Rule
Even when fraud is blatant, Philippine law strictly requires Procedural Due Process to avoid a "bad faith" dismissal claim:
- First Written Notice (Notice to Explain): The employer must issue a notice specifying the grounds for termination (the fraud/scam) and giving the employee at least five (5) calendar days to submit an explanation.
- Administrative Hearing: The employer should conduct a hearing or conference where the employee can defend themselves, often with the assistance of counsel.
- Second Written Notice (Notice of Decision): After considering the evidence, the employer issues a notice indicating whether the employee is terminated.
6. Table: Summary of Legal Actions
| Type of Fraud | Primary Legal Basis (Criminal) | Labor Ground |
|---|---|---|
| Falsified CV/ID | Falsification of Documents (Art. 172 RPC) | Fraud/Serious Misconduct |
| Fake Burial Claims | Estafa (Art. 315 RPC) or Cyber-fraud | Breach of Trust |
| Double-Dipping | Estafa (if hours are falsified) | Willful Disobedience / Misconduct |
| Identity Theft | R.A. 10175 (Cybercrime Law) | Commission of a Crime |
7. Practical Recommendations for Employers
- Stricter Background Checks: In a remote setup, third-party verification of NBI clearances and prior employment is essential.
- Verification of Death Certificates: For burial assistance, require original copies of death certificates verified through the Philippine Statistics Authority (PSA).
- Clear Policies: Ensure the Employee Handbook explicitly defines recruitment fraud and benefit scams as "Gross Misconduct" punishable by dismissal.
- Digital Footprints: Maintain logs of all communications where the fraudulent claims were made to serve as evidence for cybercrime prosecution.