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SALVACION A. LAMADRID v. CATHAY PACIFIC AIRWAYS LIMITED

FACTS:

Salvacion Lamadrid worked as a cabin crew for Cathay Pacific Airways Limited for about 17 years before she was terminated in 2007. On May 19, 2007, Lamadrid and other crew members were caught with confiscated items after alighting from the aircraft. Cathay requested Lamadrid's written explanation, to which she denied the allegations against her. Lamadrid was terminated on July 10, 2007, for serious misconduct by removing company property without authorization. She then filed a complaint for illegal dismissal and money claims against Cathay.

The Labor Arbiter ruled that it had jurisdiction over the case and found that Cathay had no sufficient basis to terminate Lamadrid's employment. The arbiter awarded separation pay instead of reinstatement due to strained relations between Lamadrid and Cathay. Both parties appealed the decision to the National Labor Relations Commission (NLRC).

The NLRC affirmed the arbiter's jurisdiction and finding that the dismissal was too harsh, and ordered Lamadrid's reinstatement. The NLRC ruled that Lamadrid was not entitled to damages but deducted the benefits she received during her separation from the monetary award. Cathay filed a petition for certiorari before the Court of Appeals (CA), which granted Cathay's petition and dismissed the illegal dismissal complaint. The CA upheld the jurisdiction of the labor arbiter and NLRC.

Lamadrid then filed a petition for review on certiorari before the Supreme Court, arguing that the appellate court erred in reversing the decisions of the labor arbiter and the NLRC.

ISSUES:

  1. Whether the Labor Arbiter and the NLRC have jurisdiction over Lamadrid's illegal dismissal case.

  2. Whether Lamadrid's position as a Senior Purser is imbued with trust and confidence.

  3. Whether Lamadrid's termination was commensurate to the infraction committed.

  4. Whether the dismissal of Lamadrid was justified based on her infraction of company policy.

  5. Whether the penalty of dismissal was commensurate to Lamadrid's violation.

  6. Whether or not petitioner is entitled to backwages and separation pay.

  7. Whether or not the benefits and bonuses received by petitioner during her separation should be deducted from the monetary award.

RULING:

  1. The Labor Arbiter and the NLRC have jurisdiction over Lamadrid's illegal dismissal case. Article 224 of the Labor Code provides that the Labor Arbiter has original and exclusive jurisdiction to hear and decide termination disputes involving all workers. This provision must be read together with Section 10 of RA 8042 as amended by RA 10022, as well as Section 3 of RA 10022.

  2. Lamadrid's position as a Senior Purser is imbued with trust and confidence. Based on the affirmation of Cathay's Cabin Crew Line Manager, Lamadrid's duties and obligations required the highest degree of trust and confidence as she had in her control properties of Cathay. The nature of her duties and responsibilities indicated that she handled significant amounts of the employer's property and had custody of various company properties.

  3. Lamadrid's termination was not commensurate to the infraction committed. Employees can only be terminated for just or authorized cause. The just causes for dismissal under Article 297 of the Labor Code include serious misconduct or willful disobedience, gross and habitual neglect of duties, fraud or willful breach of trust, commission of a crime, and other causes analogous to the foregoing. Cathay has complied with the requisites for loss of trust and confidence as Lamadrid's position was imbued with trust and confidence and the airline clearly demonstrated that she committed an infraction without any justifiable reason. However, the court did not specify the specific infraction committed by Lamadrid.

  4. Yes, the dismissal of Lamadrid was justified based on her infraction of company policy. Lamadrid was found guilty of pilferage of company property, which is an act characterized by fraud or dishonesty. The company policy specifically provided that such misconduct may be meted with summary dismissal.

  5. No, the penalty of dismissal was not commensurate to Lamadrid's violation. While Lamadrid committed an infraction, it was her first offense in her 17 years of service in the company and involved a mere bottle of water. The principle of totality of infractions should be considered in determining the imposable sanction for her current infraction. Even though the company laid down the penalties for violation of its policies, the evaluation of an employee's infraction should be dealt with fairness and reason. Termination of an employee's services should be the last resort, especially when other disciplinary actions may be imposed. In this case, the dismissal was deemed too harsh under the circumstances.

  6. Petitioner is entitled to full backwages and separation pay based on her salary rate at the time of her termination. The case is remanded to the Labor Arbiter for the computation of the amount to be awarded.

  7. The benefits and bonuses received by petitioner during her separation, amounting to HK.$622,077.54, should be deducted from the final monetary award that will be given to her.

PRINCIPLES:

  • Dismissal is the ultimate penalty that can be meted to an employee. Even if an employee commits an infraction, a less punitive penalty may suffice, and the penalty must be commensurate to the violation committed.

  • The principle of totality of infractions may be considered in determining the penalty to be imposed upon an employee. Previous infractions, as well as the overall performance and conduct of the employee throughout the span of employment, should be considered.

  • The employer's prerogative to discipline employees and impose penalties must be exercised in good faith for the advancement of the employer's interest and not for the purpose of defeating or circumventing the rights of employees under special laws and valid agreements.

  • The implementation of management prerogatives, such as dismissal, should be tempered with compassion and understanding, considering that what is at stake is not only the employee's position but also their livelihood and the welfare of their dependents.

  • An employee who is unjustly dismissed is entitled to backwages and separation pay.

  • Benefits and bonuses received by an employee during her separation should be deducted from the monetary award she is entitled to.