Julito Sagales vs Rustan’s Commercial Corporation

G.R. No. 166554 – 592 Phil. 468 – 572 SCRA 89 – Labor Law – Labor Standards – Security of Tenure – Penalty to Erring Employee Must be Commensurate to Infraction

In October 1970, Julito Sagales was employed by Rustan’s Commercial Corporation as chief cook in one of Rustan’s restaurants. He was an excellent employee receiving numerous awards. However, in June 2001, Sagales was caught stealing a bag of squid heads worth . Sagales was not able to produce a receipt for the said squid heads at that time. In the same month, Sagales underwent inquest proceedings for qualified theft in the local fiscal’s office. In the said proceeding, Sagales was able to produce the receipt for the said squid heads. He also averred that the squid heads are actually scraps of the restaurant and are not fit to be served to customers; so if indeed he really wanted to steal and profit, he would have stolen better quality squid heads. The fiscal dismissed the case against Sagales for lack of evidence.

But at the end of the same month, the legal division of Rustan conducted its own investigation where Sagales and his lawyer appeared. The security guards testified against Sagales. The chief cashier also testified that the squid heads were unpaid. In July 2001, after investigation by Rustan, Sagales was terminated.

ISSUE: Whether or not Sagales’ termination is valid.

HELD: No. Termination is too harsh in this case. The Supreme Court took into consideration the various circumstances attendant to the case. Sagales has worked for Rustan for almost 31 years; (2) his tireless and faithful service is attested by the numerous awards  he has received; (3) the incident in June 2001 was his first offense in his long years of service; (4) the value of the squid heads worth P is negligible; (5) Rustan 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 Sagales in being imprisoned, however momentary, is punishment in itself; and (7) Sagales was already preventively suspended for one month, which is already a commensurate punishment for the infraction committed. Truly, Sagales has more than paid his due. Nevertheless, it is useless to reinstate Sagales because he should have been retired already at the time of this decision. So instead of reinstatement, Sagales was awarded separation pay computed at one-month salary for every year of service; backwages were also awarded.

The Supreme Court also emphasized: the right of every employee to security of tenure is all the more secured by the Labor Code by providing that “the employer shall not terminate the services of an employee except for a just cause or when authorized” by law. However, the employer, in exercising its right to terminate employees for just and authorized causes must impose a penalty commensurate with the act, conduct, or omission imputed to the employee.

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