TL;DR

The Supreme Court ruled that while Cathay Pacific Airways had valid grounds to discipline Salvacion Lamadrid for taking company property (a bottle of water and magazines), outright dismissal was too severe given her 17 years of service and clean record. The Court emphasized the principle of proportionality, stating that penalties should be commensurate with the offense, especially for long-term employees with no prior infractions. Lamadrid was deemed illegally dismissed and entitled to backwages and separation pay, highlighting that employers must consider mitigating circumstances and explore less drastic disciplinary measures before resorting to termination.

A Sip Too Costly? Examining Proportionality in Workplace Discipline

Salvacion Lamadrid, a Senior Purser at Cathay Pacific with 17 years of service, faced termination for allegedly taking a bottle of Evian water and magazines from a flight. Cathay Pacific argued this was a serious breach of trust, justifying dismissal under their company policy. Lamadrid contested the severity of the penalty, citing her long tenure and the minor nature of the infraction. The central legal question became: Did Cathay Pacific justly dismiss Lamadrid, or was the penalty disproportionate to the offense, especially considering her years of service and prior clean record? This case delves into the delicate balance between an employer’s right to enforce company policy and the employee’s right to security of tenure, particularly when considering the principle of proportionality in disciplinary actions.

The case unfolded with conflicting rulings. The Labor Arbiter and the National Labor Relations Commission (NLRC) initially sided with Lamadrid, deeming dismissal too harsh and ordering reinstatement with backwages. They emphasized her 17 years of service and the relatively minor value of the items taken. However, the Court of Appeals reversed these decisions, upholding Cathay Pacific’s right to terminate based on company policy and loss of trust. The Supreme Court then reviewed the case to determine whether the Court of Appeals erred in reversing the NLRC’s decision, ultimately focusing on the appropriateness of the dismissal penalty.

The Supreme Court acknowledged that Lamadrid’s position as Senior Purser was indeed one of trust and confidence. Her responsibilities included overseeing cabin crew, managing in-flight service, and ensuring the security of company property within her assigned section of the aircraft. The Court cited the definition of positions of trust, encompassing both managerial roles and those handling significant company assets. As stated in the decision:

Jurisprudence classify positions of trust and confidence into two categories. The first consists of those managerial employees or those ‘vested with powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees’ as defined under Article 219 [212] (m) of the Labor Code. The second category involves those who in the normal and routine exercise of their functions regularly handle significant amounts of the employer’s money or property, such as but not limited to cashiers, auditors, and property custodians.

The Court further recognized that Cathay Pacific had a valid company policy against removing company property without authorization, and that pilferage could be grounds for dismissal. Evidence presented by Cathay Pacific, including confirmation from Danone, indicated that the Evian water bottle was indeed company property. Thus, Lamadrid’s actions constituted misconduct, defined as:

…a transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in judgment.

Despite finding grounds for disciplinary action, the Supreme Court ultimately sided with Lamadrid, reversing the Court of Appeals’ decision. The crucial factor was the principle of proportionality. The Court reasoned that while misconduct occurred, dismissal was a disproportionately harsh penalty for a first offense, especially considering Lamadrid’s long and previously unblemished service record. The Court invoked the principle of totality of infractions, noting that Lamadrid had no prior disciplinary issues in her 17 years with Cathay Pacific. The ruling emphasized that termination should be a last resort, especially for long-serving employees, and that employers should consider mitigating circumstances and less severe penalties like suspension. The Court referenced the case of Foodbev International v. Ferrer, stating:

A less severe penalty of suspension should have been imposed considering that the respondents have been in the service for several years. The Court also observes that this is the first time in the long years of service that respondents failed to follow the cleaning procedure. Thus, a more compassionate penalty of suspension is deemed appropriate.

The Supreme Court concluded that Lamadrid was illegally dismissed and was entitled to backwages and separation pay in lieu of reinstatement due to the strained relations. This decision serves as a reminder that while employers have the right to enforce company policies and discipline employees for misconduct, the penalty must be commensurate with the offense, taking into account mitigating factors like length of service and prior record. It underscores the importance of progressive discipline and considering less drastic measures before resorting to termination, particularly for long-term employees.

FAQs

For inquiries regarding the application of this ruling to specific circumstances, please contact Atty. Gabriel Ablola through gaboogle.com or via email at connect@gaboogle.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Lamadrid v. Cathay Pacific Airways, G.R. No. 200658, June 23, 2021