Peninsula Manila vs. Jara

An employee who, in the normal and routine exercise of his functions, regularly handles significant amounts of money or property belongs to the second class of positions of trust and confidence, and a willful act of dishonesty — such as tampering with sales records and misrepresenting facts to a supervisor — constitutes a just cause for dismissal under Article 297(c) (formerly Article 282) of the Labor Code. The breach of trust need not involve actual misappropriation; it is sufficient that the dishonest act was voluntary and intentional.

Edwin Jara began working for The Peninsula Manila in 2002 and was promoted to captain waiter at the hotel’s Escolta buffet restaurant in 2009. His duties included tallying actual cash collections with transaction receipts and matching these with data in the micros system at the close of his shift. On July 22, 2011, an incident involving an unreconciled cash overage of ₱6,500.00 led to administrative proceedings and his subsequent dismissal on grounds of misappropriation, falsification of hotel receipts, and dishonesty under the Hotel’s Code of Discipline.

Nature of Employment: Edwin Jara was employed by The Peninsula Manila from 2002 and served as captain waiter at the Escolta buffet restaurant from 2009. He was assigned duties that included reconciling actual cash collections with cash transaction receipts and the micros system entries at the close of his shift.

The July 22, 2011 Incident: On the evening of July 22, 2011, Jara discovered a discrepancy between cash on hand and transaction records for Table 32. The sales receipt reflected a cash payment of ₱7,113.08, but the official cash register receipt recorded only ₱613.00, resulting in an overage of ₱6,500.00. Assistant Supervisor Michelle Jardines attempted to correct the error without success.

Jara’s Actions and Misrepresentation: Unable to balance the accounts, Jara informed his supervisor, Jimmy Tabamo, of the problem. Tabamo instructed him to double-check all transactions and report back. Around 12:30 a.m., Tabamo asked whether the accounts had been reconciled; Jara answered affirmatively, submitted his report, and remitted cash collections. In reality, Jara had posted only the ₱613.00 figure from the tape receipt — rather than the full ₱7,113.08 — so that the cash count would tally with the micros system. He did not turn over the excess ₱6,500.00 and instead kept it in his office locker.

Delay in Reporting: July 23, 2011 was Jara’s birthday and he did not report for work but dined at the Escolta that day. July 24 was his regular day off. When he returned on July 25, 2011, he informed the hotel’s internal auditor of the overage. The auditor directed him to surrender the money to his supervisor; instead, Jara handed the ₱6,500.00 to the captain waitress for safekeeping in the safety deposit box.

Administrative Proceedings and Dismissal: On July 27, 2011, petitioner issued a Memorandum to Explain charging Jara with dishonesty for (a) failing to promptly inform his supervisor of the overage, (b) misrepresenting that the cash transaction records had been reconciled, and (c) falsifying the tape receipt. Jara admitted keeping the overage in his locker and failing to inform his supervisor but claimed he believed the discrepancy was a micros system error due to a tax exemption. An administrative hearing was held on August 11, 2011. On September 28, 2011, petitioner terminated Jara’s employment for misappropriation, falsification of hotel receipts, and dishonesty in violation of the Hotel’s Code of Discipline.

Position Classification: Jara’s position as captain waiter was classified as rank-and-file Level 8-A under the existing collective bargaining agreement.

• Grave Nature of the Offense: Petitioner faulted the Court of Appeals for treating Jara’s actions as mere lapses in judgment rather than as a grave, intentional, or willful breach of the employer’s trust. Petitioner emphasized that Jara deliberately tampered with receipts and misrepresented facts to his supervisor, acts that go to the heart of the trust reposed in a cash-handling employee.
• Employer’s Prerogative: Petitioner maintained that, as employer, it possesses wide latitude of discretion in terminating employees who occupy positions of trust and confidence and who have breached that trust.

• Non-Holding of Position of Trust: Jara argued that his position as captain waiter, classified as rank-and-file Level 8-A under the CBA, is not a position of trust and confidence; therefore, he could not be dismissed under Article 282 (now Article 296) of the Labor Code on the ground of loss of trust.
• Good Faith: Jara denied any willful wrongdoing, insisting he acted in good faith and with utmost honesty. He maintained that he never removed the excess ₱6,500.00 from the premises but kept it in his locker with full intent to turn it over on his next working day.

• Position of Trust and Confidence: Whether Jara, as a captain waiter, held a position of trust and confidence within the meaning of Article 297(c) (formerly Article 282) of the Labor Code.
• Willful Breach of Trust: Whether Jara’s acts — tampering with receipts, misrepresenting that accounts were balanced, failing to promptly report the overage, and keeping the excess cash in his locker — constituted a willful breach of trust justifying termination of employment.

• Position of Trust and Confidence: Jara indisputably came within the second class of positions of trust. The jurisprudential framework recognizes two classes: (1) managerial employees, who exercise management prerogatives; and (2) cashiers, auditors, property custodians, and others who, in the normal and routine exercise of their functions, regularly handle significant amounts of money or property. Jara’s regular duty to balance sales transactions and actual cash on hand from Escolta restaurant sales squarely placed him in the second class. He could not disclaim holding such a position when he was entrusted with precisely that responsibility.
• Willful Breach of Trust: Jara’s dismissal was founded on a willful breach of trust. The records established that Jara deliberately made the cash transactions appear balanced; he tampered with receipts and misrepresented to his supervisor that the accounts had been reconciled — all without any prior instruction or knowledge of his supervisor. These actions were voluntary and intentional. “Willful” means the act was done freely and with knowledge of potential liability. The breach of trust occurred at the precise moment Jara falsified the records and lied to his supervisor; the subsequent safekeeping of the money in his locker was merely a result of that dishonest act. Jara’s two-day delay in reporting the overage — despite having the opportunity to do so when he dined at the hotel on his birthday — further undermined his claim of good faith. Length of service and a previously unblemished record could not exonerate him; as a senior employee, he was expected to exemplify honesty and integrity.

• Two Classes of Positions of Trust and Confidence — The first class consists of managerial employees, i.e., those vested with the power to lay down management policies and to hire, transfer, suspend, lay off, recall, discharge, assign, or discipline employees or effectively recommend such actions. The second class consists of cashiers, auditors, property custodians, and other employees who, in the normal and routine exercise of their functions, regularly handle significant amounts of money or property. A captain waiter responsible for balancing cash collections and transaction receipts falls under the second class.
• Requisites for Dismissal under Article 297(c) (Loss of Trust and Confidence) — For a valid dismissal on this ground, two requirements must concur: (1) the employee must hold a position of trust and confidence, and (2) there must be an act that justifies the loss of trust and confidence. The loss of trust must be based on a willful breach of trust and founded on clearly established facts; proof beyond reasonable doubt is not required.
• Meaning of “Willful” — An act is willful when it is voluntary and intentional, done of one’s own free will and despite knowledge that liability — including the extreme penalty of dismissal — may result.

• “There are two (2) classes of positions of trust. The first class consists of managerial employees, or those vested with the powers or prerogatives to lay down management policies and to hire, transfer suspend, lay-off, recall, discharge, assign or discipline employees or effectively recommend such managerial actions. While the second class consists of cashiers, auditors, property custodians, etc. or those who, in the normal and routine exercise of their functions, regularly handle significant amounts of money or property.”
• “Loss of trust and confidence to be a valid cause for dismissal must be based on a willful breach of trust and founded on clearly established facts. The basis for the dismissal must be clearly and convincingly established but proof beyond reasonable doubt is not necessary.”
• “The breach of respondent's trust occurred at the precise moment that Jara tampered with the sales record and misrepresented to his supervisor that he was able to balance the cash transactions with the cash on hand. Keeping of the money in Jara's office locker was just a result of his dishonest act.”

• Hormillosa v. Coca-Cola Bottlers Phils., Inc., 719 Phil. 421 (2013) — Cited for the classification of positions of trust into managerial employees and those who regularly handle significant amounts of money or property. This case provided the doctrinal basis for placing Jara in the second class.
• Bristol Myers Squibb (Phils.) Inc. v. Baban, 594 Phil. 620 (2008) — Relied upon for the standard that loss of trust and confidence must be based on a willful breach of trust and founded on clearly established facts; proof beyond reasonable doubt is not required.
• Distribution & Control Products, Inc. v. Santos, 830 SCRA 452 (2017) — Invoked for the principle that loss of confidence is prone to abuse due to its subjective nature, thus must be founded on clearly established facts; where such facts are borne by the records, the employer’s right to dismiss must be upheld.
• Philippine Plaza Holdings, Inc. v. Episcope, 705 Phil. 210 (2013) — Cited to support the departure from the general rule of deference to administrative factual findings when the Court of Appeals’ findings conflict with those of the quasi-judicial agency.
• Central Azucarera de Bais v. Heirs of Zuelo Apostol, G.R. 215314 (2018) — Cited for the general rule that factual findings of labor tribunals, when supported by substantial evidence, command respect.

• Article 297 (formerly Article 282) of the Labor Code — Enumerates the just causes for termination of employment, including “fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative.” The two requisites for application of this ground were applied to Jara, who was found to occupy a position of trust and to have committed a willful breach thereof.

Carpio, Senior Associate Justice (Chairperson); Perlas-Bernabe; Caguioa; and J. Reyes, Jr., JJ., concurred.