G.R. No. 141141, June 25, 2001
PHILIPPINE AMUSEMENT AND GAMING CORPORATION (PAGCOR), petitioner, vs. CARLOS P. RILLORAZA, respondent.

FACTS

On November 5, 1997, administrative charges for dishonesty, grave misconduct, conduct prejudicial to the best interest of the service, and loss of confidence were filed against respondent Carlos P. Rilloraza, a casino operations manager of PAGCOR. The charges stemmed from incidents during his shift on October 9, 1997, which included: 1) failure to prevent irregularities and violations of casino rules by co-officers, specifically the facilitation of four unauthorized personal checks worth P5,000,000 by a small-time financier/player; 2) his personal facilitation of one of those checks worth P500,000; and 3) failure to stop a top-ranking officer from placing bets over the allowable limit, playing at big tables, and playing beyond the allowable time limit. In his defense, Rilloraza explained he was new to the branch, verified the check with a more familiar officer who said it was guaranteed by a Branch Manager, attempted to report the matter to superiors, and, regarding the playing officer, was told the bets belonged to a customer. The PAGCOR Board dismissed him on December 2, 1997. The Civil Service Commission (CSC) modified the penalty, finding him guilty only of Simple Neglect of Duty and imposing a one-month-and-one-day suspension. The Court of Appeals affirmed the CSC’s resolution and ordered his reinstatement with backwages and benefits. PAGCOR filed this petition, arguing Rilloraza was a confidential appointee removable at will due to loss of confidence and that the modified penalty was improper given the gravity of the offenses.

ISSUE

1. Whether respondent Carlos P. Rilloraza, as a PAGCOR employee, is a confidential appointee who may be dismissed at will due to loss of confidence.
2. Whether the Court of Appeals erred in affirming the CSC’s modification of the penalty from dismissal to suspension for Simple Neglect of Duty.

RULING

The Supreme Court DENIED the petition and AFFIRMED the Decision and Resolution of the Court of Appeals.
1. On the first issue, the Court held that Rilloraza is not a confidential employee who may be removed at will. It cited the definitive ruling in Civil Service Commission v. Salas, which held that Section 16 of P.D. No. 1869 (declaring all PAGCOR employees as “Confidential” appointees exempt from civil service rules) was repealed by the 1987 Constitution. The constitutional provisions on merit, fitness, and security of tenure now govern PAGCOR employees. Their tenure is secured, and they cannot be removed except for cause as provided by law. Loss of confidence is a valid ground only for dismissing employees in primarily confidential positions, but Rilloraza’s position as casino operations manager was not shown to be primarily confidential, as it did not involve the formulation of policy or the exercise of discretion required for such a classification.
2. On the second issue, the Court found no error in the appellate court’s affirmation of the CSC’s penalty modification. The CSC, as the central personnel agency, has the authority to review administrative decisions and impose the appropriate penalty based on the evidence. The charge of “loss of confidence” was not a standalone ground but was dependent on the existence of a valid cause. The CSC correctly found the evidence insufficient to prove dishonesty or grave misconduct. Instead, it found Rilloraza guilty of Simple Neglect of Duty for his failure to exercise due diligence and care in preventing the irregularities during his shift. The penalty of one-month-and-one-day suspension for simple neglect was within the CSC’s discretion and was not unreasonable or oppressive. The Court emphasized that administrative penalties must be commensurate with the offense, and in this case, the CSC did not gravely abuse its discretion in modifying the penalty.