Dishonesty is one of the grounds for dismissal of employee. However, hesitation of the employee to admit mistake and subsequent admission of such mistake cannot amount to active dishonesty that can be used as ground for dismissal due to serious misconduct.

The Coffee Bean and Tea Leaf Philippines, Inc. and Walden Chu Vs. Rolly P. Arenas
G.R. No. 208908, March 11, 2015


The Coffee Bean Tea Leaf Philippines, Inc. (CBTL) hired Rolly P. Arenas (Arenas) to work as a “barista” at its Paseo Center Branch. His principal functions included taking orders from customers and preparing their ordered food and beverages.

Upon signing the employment contract, Arenas was informed of CBTL’s existing employment policies. To ensure the quality of its crew’s services, CBTL regularly employs a “mystery guest shopper” who poses as a customer, for the purpose of covertly inspecting the baristas’ job performance.

In April 2009, a mystery guest shopper at the Paseo Center Branch submitted a report stating that on March 30, 2009, Arenas was seen eating non-CBTL products at CBTL’s al fresco dining area while on duty. As a result, the counter was left empty without anyone to take and prepare the customers’ orders.

On another occasion, or on April 28, 2009, Katrina Basallo (Basallo), the duty manager of CBTL, conducted a routine inspection of the Paseo Center Branch. While inspecting the store’s products, she noticed an iced tea bottle being chilled inside the bin where the ice for the customers’ drinks is stored. This prompted her to call the attention of the staff on duty.

When asked, Arenas muttered, “kaninong iced tea?” and immediately picked the bottle and disposed it outside the store. After inspection, Basallo prepared a store manager’s report which listed Arenas’ recent infractions, as follows:

1.Leaving the counter unattended and eating chips in an unauthorized area while on duty (March 30, 2009);

2.Reporting late for work on several occasions (April 1, 3 and 22); and

3.Placing an iced tea bottle in the ice bin despite having knowledge of company policy prohibiting the same.

Based on the mystery guest shopper and duty manager’s reports, Arenas was required to explain his alleged violations. However, CBTL found Arenas’ written explanation unsatisfactory, hence CBTL terminated his employment.

Arenas filed a complaint for illegal dismissal.

LA Ruling:

After due proceedings, the LA ruled in Arenas’ favor, declaring that he had been illegally dismissed.

NLRC Ruling:

On appeal, the NLRC affirmed the LA’s decision.

CBTL filed a petition for certiorari under Rule 65 before the CA. CBTL insisted that Arenas’ infractions amounted to serious misconduct or willful disobedience, gross and habitual neglect of duties, and breach of trust and confidence.

To support these allegations, CBTL presented Arenas’ letter where he admitted his commission of the imputed violations.

CA Ruling:

The CA issued its decision dismissing the petition.

The CA ruled that Arenas’ offenses fell short of the required legal standards to justify his dismissal. According to CA, these offenses do not constitute serious misconduct or willful disobedience, and gross negligence, to merit his termination from service.

The CA denied CBTL’s motion for reconsideration opening the way for the appeal via a petition for review on certiorari.


Whether or not an employee who ate products not sold by the store inside its premises while on duty, left the counter unattended without anyone to entertain the incoming customers, chilling his bottled iced tea inside the ice bin, constitute willful disobedience, thus meriting dismissal from employment.

Whether or not three (3) instances of tardiness amount to gross and habitual neglect of duty.

Whether or not reticence to admit mistake and subsequent owning up to such mistake is active dishonesty that is ground for dismissal under serious misconduct

SC Ruling:

The SC denied the petition.

For willful disobedience to be a valid cause for dismissal, these two elements must concur: (1) the employee’s assailed conduct must have been willful, that is, characterized by a wrongful and perverse attitude; and (2) the order violated must have been reasonable, lawful, made known to the employee, and must pertain to the duties which he had been engaged to discharge.

Tested against these standards, it is clear that Arenas’ alleged infractions do not amount to such a wrongful and perverse attitude. Though Arenas may have admitted these wrongdoings, these do not amount to a wanton disregard of CBTL’s company policies.

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As Arenas mentioned in his written explanation, he was on a scheduled break when he was caught eating at CBTL’s al fresco dining area. During that time, the other service crews were the one in charge of manning the counter. Notably, CBTL’s employee handbook imposes only the penalty of written warning for the offense of eating non-CBTL products inside the store’s premises.

On the three instances of tardiness of Arenas, the SC held that gross negligence implies a want or absence of, or failure to exercise even a slight care or diligence, or the entire absence of care. It evinces a thoughtless disregard of consequences without exerting any effort to avoid them. There is habitual neglect if based on the circumstances, there is a repeated failure to perform one’s duties for a period of time.

Arenas’ three counts of tardiness cannot be considered as gross and habitual neglect of duty. The infrequency of his tardiness already removes the character of habitualness. These late attendances were also broadly spaced out, negating the complete absence of care on Arenas’ part in the performance of his duties. Even CBTL admitted in its notice to explain that this violation does not merit yet a disciplinary action and is only an aggravating circumstance to Arenas’ other violations.

On charge of dishonesty being a serious misconduct, the SC held that for misconduct or improper behavior to be a just cause for dismissal, (a) it must be serious; (b) it must relate to the performance of the employee’s duties; and (c) it must show that the employee has become unfit to continue working for the employer.

Under CBTL’s employee handbook, dishonesty, even at the first instance, warrants the penalty of termination from service. The facts on record reveal that there was no active dishonesty on the part of Arenas.

When questioned about who placed the bottled iced tea inside the ice bin, Arenas’ immediate reaction was not to deny his mistake, but to remove the bottle inside the bin and throw it outside. More importantly, when he was asked to make a written explanation of his action, he admitted that the bottled iced tea was his.

Thus, even if there was an initial reticence on Arenas’ part, his subsequent act of owing to his mistake only shows the absence of a deliberate intent to lie or deceive his CBTL superiors. On this score, the SC concluded that Arenas’ action did not amount to serious misconduct.

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