SAGALES VS.

RUSTAN’S COMMERCIAL

REASONABLE PROPORTIONALITY RULE:

It is a hornbook doctrine that infractions committed by an employee should merit only the
corresponding penalty demanded by the circumstance. The penalty must be commensurate with the act,
conduct or omission imputed to the employee and must be imposed in connection with the disciplinary
authority of the employer.
FACTS: 2001 incident. Respondent also placed petitioner
under preventive suspension.
Petitioner Julito Sagales was employed by
Respondent did not find merit in the explanation of
respondent Rustan's Commercial Corporation from
petitioner. Thus, petitioner was dismissed from
October 1970 until July 26, 2001, when he was
service on July 26, 2001. At that time, petitioner
terminated. At the time of his dismissal, he was
had been under preventive suspension for one (1)
occupying the position of Chief Cook at the Yum
month.
Yum Tree Coffee Shop located at Rustan's
Supermarket in Ayala Avenue, Makati City.
Aggrieved, petitioner filed a complaint for illegal
dismissal against respondent. He also prayed for
On June 18, 2001, Security Guard Waldo unpaid salaries/wages, overtime pay, as well as
Magtangob, upon instructions from Senior Guard moral and exemplary damages, attorney's fees, and
Bonifacio Aranas, apprehended petitioner in the act service charges.
of taking out from Rustan's Supermarket a plastic
bag. Upon examination, it was discovered that the On July 24, 2002, Labor Arbiter Felipe P. Pati
plastic bag contained 1.335 kilos of squid heads dismissed the complaint for illegal dismissal for
worth P50.00. Petitioner was not able to show any lack of merit arguing that petitioner was not an
receipt when confronted. ordinary employee but a supervisor.

On June 19, 2001, petitioner underwent inquest Petitioner appealed to the National Labor Relations
proceedings for qualified theft before Assistant Commission (NLRC). On April 10, 2003, the
Prosecutor Amado Y. Pineda. Although petitioner NLRC reversed the Labor Arbiter’s decision. The
admitted that he was in possession of the plastic bag NLRC held that the position of complainant is not
containing the squid heads, he denied stealing them supervisory covered by the trust and confidence
because he actually paid for them. As proof, rule. On the contrary, petitioner is a mere rank-and-
petitioner presented a receipt. The only fault he file employee. The evidence is also wanting that
committed was his failure to immediately show the petitioner committed the crime charged. The NLRC
purchase receipt when he was accosted because he did not believe that petitioner would trade off
misplaced it when he changed his clothes. He also almost thirty-one (31) years of service for P50.00
alleged that the squid heads were already "scraps" worth of squid heads.
as these were not intended for cooking. Neither
were the squid heads served to customers. He The motion for reconsideration having been denied,
bought the squid heads so that they could be eaten respondent brought the matter to the Court of
instead of being thrown away. If he intended to steal Appeals (CA) via a petition for certiorari under
from respondent, he could have stolen other Rule 65 of the 1997 Rules on Civil Procedure. On
valuable items instead of scrap. Assistant Prosecutor July 12, 2004, the CA rendered the assailed decision
Pineda believed the version of petitioner and reinstating the Labor arbiter’s decision.
recommended the dismissal of the case for "lack of
In reversing the NLRC, the CA opined that the
evidence."
position of petitioner was supervisory in nature. The
CA also held that the evidence presented by
Notwithstanding the dismissal of the complaint,
respondent clearly established loss of trust and
respondent, on June 25, 2001, required petitioner to
confidence on petitioner. Lastly, the CA, although
explain in writing within forty-eight (48) hours why
taking note of the long years of service of petitioner
he should not be terminated in view of the June 18,
and his numerous awards, refused to award relevant in termination of employment by the
separation pay in his favor. According to the CA, employer because the rules on termination of
"the award of separation pay cannot be sustained managerial and supervisory employees are different
under the social justice theory" because the instant from those on the rank-and-file. Managerial
case "involves theft of the employer's property." employees are tasked to perform key and sensitive
functions, and thus are bound by more exacting
Petitioner filed a motion for reconsideration which work ethics. As a consequence, managerial
was denied. Left with no other recourse, petitioner employees are covered by the trust and confidence
availed of the present remedy. rule. The same holds true for supervisory employees
occupying positions of responsibility.
Issues
There is no doubt that the position of petitioner as
Petitioner in his Memorandum imputes to the CA chief cook is supervisory in nature. A chief cook
the following errors, to wit: directs and participates in the preparation and
serving of meals; determines timing and sequence
of operations required to meet serving times; and
1. THE COURT OF APPEALS COMMITTED
inspects galley and equipment for cleanliness and
GRAVE ABUSE OF
proper storage and preparation of food. Naturally, a
DISCRETION AMOUNTING TO LACK OF
chief cook falls under the definition of a supervisor,
JURISDICTION WHEN IT CONCLUDED
i.e., one who, in the interest of the employer,
THAT THE POSITION OF THE
effectively recommends managerial actions which
PETITIONER BEING AN ASSISTANT
would require the use of independent judgment and
COOK AS A SUPERVISORY
is not merely routinary or clerical.
POSITION FOR BEING
CONTRADICTORY TO THE EVIDENCE
It has not escaped Our attention that petitioner
ON RECORD.
changed his stance as far as his actual position is
concerned. In his position paper, he alleged that at
2. THE COURT OF APPEALS COMMITTED the time of his dismissal, he was "Chief Cook."
GRAVE ABUSE OF However, in his memorandum, he now claimed that
DISCRETION AMOUNTING TO LACK OF he was an "Asst. Cook." The ploy is clearly aimed
JURISDICTION WHEN IT CONCLUDED at giving the impression that petitioner is merely a
THAT THE DOCTRINE OF TRUST AND rank-and-file employee. The change in
CONFIDENCE APPLIES AGAINST THE nomenclature does not, however, help petitioner, as
PETITIONER TO JUSTIFY HIS he would still be covered by the trust and
DISMISSAL FROM EMPLOYMENT FOR confidence rule. In Concorde Hotel v. Court of
BEING CONTRADICTORY TO THE Appeals, the Court categorically ruled:
EVIDENCE ON RECORD. (Underscoring
supplied)
Petitioner is correct insofar as it considered the
For a full resolution of the issues in the instant case, nature of private respondent's position as assistant
the following questions should be answered: (1) Is cook a position of trust and confidence. As
the position of petitioner supervisory in nature assistant cook, private respondent is charged with
which is covered by the trust and confidence rule? the care of food preparation in the hotel's coffee
(2) Is the evidence on record sufficient to conclude shop. He is also responsible for the custody of food
that petitioner committed the crime charged? and supplies and must see to it that there is sufficient
(3) Assuming that the answer is in the affirmative, stock in the hotel kitchen. He should not permit
is the penalty of dismissal proper? food or other materials to be taken out from the
kitchen without the necessary order slip or
Ruling authorization as these are properties of the hotel.
Thus, the nature of private respondent's position as
I. The position of petitioner is supervisory in assistant cook places upon him the duty of care and
nature which is covered by the trust and custody of Concorde's property. (Emphasis
confidence rule. supplied)

The nature of the job of an employee becomes

Of course, the ruling assumes greater significance if respondent was a former assistant cook, attested to
petitioner is the chief cook. A chief cook naturally the fact of private respondent seeking apology for
performs greater functions and has more the commission of the act. Likewise, the statement
responsibilities than an assistant cook. In eo quod of Zenaida Castro (Castro), cashier of petitioner
plus sit simper inest et minimus. The greater always corporation's supermarket, Makati Branch, Ayala
includes the less.  Center, Makati City, confirmed that indeed the
1.335 kilos of squid heads amounting to fifty pesos
Ang malawak ay laging sumasakop sa maliit.
(P50.00) per kilo, had not been paid for.
II. The evidence on record is sufficient to The contention of petitioner that respondent merely
conclude that petitioner committed the crime imputed the crime against him because he was set to
charged. retire is difficult, if not impossible, to believe.
Worth noting is the fact that petitioner failed to
Security of tenure is a paramount right of every impute any ill will or motive on the part of the
employee that is held sacred by the Constitution. witnesses against him. As aptly observed by the
[
The reason for this is that labor is deemed to be Labor Arbiter:
"property"[within the meaning of constitutional
guarantees. Indeed, as it is the policy of the State to
It seems unbelievable to believe that the
guarantee the right of every worker to security of
apprehending officers up to the Manager, Mr.
tenure as an act of social justice, such right should
Samson, were all telling a lie as what complainant
not be denied on mere speculation of any similar or
wants to portray when he alleged in his pleadings
unclear nebulous basis. Indeed, the right of every
that he mentioned to the apprehending officers
employee to security of tenure is all the more
[that] he has a receipt for [the squid heads] and
secured by the Labor Code by providing that "the
that he never apologized. This is understandable on
employer shall not terminate the services of an
his part because complainant wants no loophole in
employee except for a just cause or when
his version. And an easy way out is to fabricate his
authorized" by law. Otherwise, an employee who is
allegations.
illegally dismissed "shall be entitled to
reinstatement without loss of seniority rights and We stress that the quantum of proof required for the
other privileges and to his full backwages, inclusive application of the loss of trust and confidence rule
of allowances, and to his other benefits or their is not proof beyond reasonable doubt. It is
monetary equivalent computed from the time his sufficient that there must only be some basis for
compensation was withheld from him up to the time the loss of trust and confidence or that there is
of his actual reinstatement." reasonable ground to believe, if not to entertain
the moral conviction, that the employee
Necessarily then, the employer bears the burden concerned is responsible for the misconduct and
of proof to show the basis of the termination of that his participation in the misconduct rendered
the employee. him absolutely unworthy of trust and confidence.

In the case at bar, respondent has discharged It is also of no moment that the criminal complaint
its onus of proving that petitioner committed the for qualified theft against petitioner was dismissed.
crime charged. We quote with approval the It is well settled that the conviction of an employee
observation of the CA in this regard: in a criminal case is not indispensable to the
exercise of the employer's disciplinary authority.
On this matter, petitioner presents as evidence the
III. The penalty of dismissal is too harsh under
verified statement of security guard Aranas. Aranas
the circumstances.
positively saw the private in the act of bringing out
the purloined squid heads. Similarly, the statement
The free will of management to conduct its own
of security guard Magtangob attested to the
business affairs to achieve its purpose cannot be
commission by private respondent of the offense
denied. The only condition is that the exercise of
charged. Further, the verified statement of Samson,
management prerogatives should not be done in bad
store manager of petitioner corporation who is in
faith or with abuse of discretion. Truly, while the
charge of all personnel, including employees of the
employer has the inherent right to discipline,
Yum Yum Tree Coffee Shop of which private
including that of dismissing its employees, this
prerogative is subject to the regulation by the State would have been retired by now. Thus, in lieu of
in the exercise of its police power. reinstatement, it is but proper to award petitioner
separation pay computed at one-month salary for
In this regard, it is a hornbook doctrine every year of service, a fraction of at least six (6)
that infractions committed by an employee months considered as one whole year. In the
should merit only the corresponding penalty computation of separation pay, the period where
demanded by the circumstance. The penalty backwages are awarded must be included.
must be commensurate with the act, conduct or
omission imputed to the employee and must be Word of caution.
imposed in connection with the disciplinary
authority of the employer. We do not condone dishonesty. After all, honesty is
the best policy. However, punishment should be
For example, in Farrol v. Court of Appeals,] the commensurate with the offense committed. The
employee, who was a district manager of a bank, supreme penalty of dismissal is the death penalty to
incurred a shortage of P50,985.37. He was the working man. Thus, care should be exercised by
dismissed although the funds were used to pay the employers in imposing dismissal to erring
retirement benefits of five employees of the bank. employees. The penalty of dismissal should be
The employee was also able to return the amount, availed of as a last resort.
leaving a balance of only P6,995.37 of the shortage.
The bank argued that under its rules, the penalty for Indeed, the immortal words of Mr. Justice (later
the infraction of the employee is dismissal. The Chief Justice) Enrique Fernando ring true then as
Court disagreed and held that the penalty of they do now: "where a penalty less punitive would
dismissal is too harsh. The Court took note that it is suffice, whatever missteps may be committed by
the first infraction of the employee and that he has labor ought not be visited with a consequence so
rendered twenty-four (24) long years of service to severe. It is not only because of the law's concern
the bank. In the words of Mme. Justice Consuelo for the workingman. There is, in addition, his family
Ynares-Santiago, "the dismissal imposed on to consider. Unemployment brings untold hardships
petitioner is unduly harsh and grossly and sorrows on those dependent on the wage-
disproportionate to the infraction which led to earner."
the termination of his services. A lighter penalty
would have been more just, if not humane." WHEREFORE, the appealed Decision of the Court
of Appeals is REVERSED and SET ASIDE. The
In the case at bar, petitioner deserves compassion Decision of the National Labor Relations
more than condemnation. At the end of the day, it is Commission is REINSTATED with
undisputed that: (1) petitioner has worked for the MODIFICATION that petitioner is granted
respondent for almost thirty-one (31) years; (2) his separation pay and backwages in lieu of
tireless and faithful service is attested by the reinstatement.
numerous awards he has received from respondent;
(3) the incident on June 18, 2001 was his first SO ORDERED.
offense in his long years of service; (4) the value of
the squid heads worth P50.00 is negligible; (5)
respondent practically did not lose anything as the
squid heads were considered scrap goods and
usually thrown away in the wastebasket; (6) the
ignominy and shame undergone by petitioner in
being imprisoned, however momentary, is
punishment in itself; and (7) petitioner was
preventively suspended for one month, which is
already a commensurate punishment for the
infraction committed. Truly, petitioner has more
than paid his due.

In any case, it would be useless to order the

reinstatement of petitioner, considering that he