G.R. No. 141141 - Philippine Amusement and Gaming Corp. vs. Rilloraza

On November 5, 1997, administrative charges were filed against Carlos P. Rilloraza, a casino operations manager of PAGCOR, for dishonesty, grave misconduct, conduct prejudicial to the best interest of the service, and loss of confidence.
The charges arose from an incident on October 9, 1997, during his 6:00 a.m. to 2:00 p.m. shift, involving irregularities such as:

Four personal checks totaling ₱5,000,000 issued by a small-time financier/player, facilitated by a COM (Casino Operations Manager) with the Treasury Division, without the authorization of the Senior Branch Manager (SBM) or Branch Manager for Operations (BMO). Rilloraza himself facilitated one check worth ₱500,000.
Failure to stop a top-ranking officer (BM Richard Syhongpan) from placing bets above the P5,000 allowed limit per deal, playing on big tables, and exceeding the allowable time limit (6:00 a.m.).

Rilloraza submitted a detailed answer during the investigation by PAGCOR’s Corporate Investigation Unit:

He was newly recalled to the Manila branch for about three weeks and unfamiliar with systems and customers.
Upon request from GAM Rene Quito for check verification, he inquired with COM Carlos Gonzales who assured him the check was guaranteed by BM Syhongpan; hence he approved the endorsement.
Tried to contact SBM Vic Advincula and BMO Dario Cordero to report but initially received no reply, only later relaying the matter to them.
Observed BM Syhongpan playing and stopped him but accepted Syhongpan’s explanation that the bet was for a customer, Ms. Corazon Castillo, who had sufficient chips for the high bet.
Rumors later indicated that Syhongpan and Gonzales used Castillo to play on their behalf without informing him.
GAM J. Eugenio handed Rilloraza money ("balato") from Syhongpan which he refused and instructed to return.

PAGCOR Board dismissed Rilloraza and others effective December 5, 1997, citing dishonesty, grave misconduct, conduct prejudicial to service, and loss of confidence.
Motion for reconsideration denied on December 16, 1997.
Rilloraza appealed to the Civil Service Commission (CSC).
CSC Resolution No. 983033 (Nov 20, 1998) modified the penalty to one month and one day suspension for simple neglect of duty, dismissing the appeal otherwise.
PAGCOR’s motion for reconsideration before CSC denied (Feb 16, 1999).
The Court of Appeals affirmed CSC’s ruling, ordering reinstatement with full backwages and benefits from January 5, 1998 until actual reinstatement.
PAGCOR’s motion for reconsideration before the Court of Appeals was denied on November 29, 1999.
PAGCOR then filed the present petition for review on certiorari.

Whether respondent Carlos P. Rilloraza was a primarily confidential employee whose term expired due to loss of confidence, thus justifying dismissal without the regular civil service protections.
Whether the Court of Appeals erred in affirming the CSC's modification of the penalty from dismissal to suspension despite the gravity of the offenses committed by the respondent.