HELMUT DOSCH, PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION AND NORTHWEST AIRLINES, INC., RESPONDENTS.

This is a petition for review seeking to set aside the decision of
the National Labor Relations Commission in NLRC Case
No. RB-4220 reversing the award made by the Labor Arbiter ordering petitioner’s
reinstatement by private respondent Northwest Airlines, Inc. with full backwages and other benefits decreed by law.

The antecedent facts of this case are as follows:

Petitioner Helmut Dosch, an American
citizen, married to a Filipina, was the resident Manager of Northwest Airlines,
Inc. (Northwest, for short) in the Philippines.  He has to his credit eleven (11) years of continuous
service with the company, including nine (9) years as Northwest Manager with
station at Manila.  On August
18, 1975 he received an inter-office communication from R.C. Jenkins, Northwest’s Vice President for Orient Region
based in Tokyo,
promoting him to the position of Director of International Sales and
transferring him to Northwest’s General Office in Minneapolis,
U.S.A., effective the
same day.  The full text of the
inter-office communication is reproduced below:

“NORTHWEST ORIENT Interoffice Communication

To:  H. Dosch,
Manager-Philippines Date:  August 18,
1975

From: 
Vice President, Orient Region Location: 
Tokyo

Subject: 
Transfer

Dear Helmut:

You have completed nine (9) years of
service in the Orient, and in accordance with usual practice, it is now
the Company’s intention to transfer you to the General Office in Minneapolis
to broaden your experience base considering
that your assignment in
the Philippines
has continued for several years longer than is normal for our overseas
managers.

The Company feels that there is need for
an executive with your experience to fill the po­sition of Director of
International Sales reporting directly to the Vice President for Sales.  The Company has therefore decided to promote
and transfer you to this position effective today, August 18, 1975. 
Your monthly compensation will be upgraded and the proper payroll
adjustment will be made in due course effective today.

To implement the foregoing decision of
the Company and in order to effect a smooth turnover, Mr. L.J. Gilbert, Jr. shall, effective today, August 18, 1975, take over your
functions and responsibilities as Manager.

You are expected to report to your new
assignment on September 15, 1975.  You shall, however, be afforded sufficient
time, which in this case shall not extend beyond September 15, 1975, within which to wind up your affairs
in the Philippines.  During this transition period, you will be on
vacation leave for ten (10) days and thereafter on travel and relocation status
with pay.  Please see that the Company
house you presently occupy will be made available to your successor by September 10, 1975.

We
wish you success in your new assignment.

Very truly yours,

(Sgd.)
R. C. JENKINS”

Petitioner, acknowledging receipt of the above memo of August 18,
1975, expressed appreciation for the promotion and at the same time regretted
that “for personal reasons and reasons involving my family, I am unable to
accept a transfer from the Philippines” in his letter dated August 28,
1975 which reads:

“R.C. JENKINS – V.P., O.R.                                                                                                                    August 28, 1975

H. DOSCH

TRANSFER

This is to acknowledge receipt of your
memo of August 18, 1975, on
the subject.

While I sincerely appreciate the
company’s confidence in my abilities as a manager, which reflects itself in my
promotion to the position of Director of International Sales, I regret that at
this time, for personal reasons and reasons involving my family, I am unable to
accept a transfer from the Philippines.

I would, therefore, prefer to remain in my
position of Manager-Philippines until such time that my services in that
capacity are no longer required by Northwest Airlines.

(Sgd.)
H. DOSCH“

Petitioner tried to resume his duties as Manager, through a memorandum to the Manila Staff which
reads:

“MANILA STAFF                                                                                                   Sept. 4, 1975

H. DOSCH                                                                                                           MNL

RESUMPTION OF DUTIES                                                                                Letter
No. 454/75

It gives me great pleasure to announce that I advised Mr. Jenkins by letter
dated August 28, 1975,
that, for personal reasons, I have declined to accept the promotion to the posi­tion
of Director of International Sales at the General Office.

Accordingly, upon return to work from an
authorized vacation of ten working days, I am resuming my duties and
responsibilities as Manager-Philippines effective today, September 4, 1975.

I know you will join me in thanking Mr. L.J. Gilbert for taking my place as Acting Manager-Philippines during my absence from the
office.

(Sgd.)
H. DOSCH“

Telegrams were also sent
by petitioner to Mr. Nightingale, Director for Finance and to Mr. Jenkins,
clearly stating petitioner’s desire to remain as Manager-Philippines of
Northwest.

On September 9, 1975, the
Vice President for the Orient Region of Northwest advised petitioner that
“in view of the foregoing, your status as an employee of the company
ceased on the close of business on August 31, 1975” and “the company
therefore considers your letter of August 28, 1975, to be a resignation without
notice.”

On September
16, 1975, Northwest
filed a Report on Resignation of Managerial Employee (Form No. 74-3, Revised
September 1974), i.e., Helmut Dosch, before Regional
Office No. IV (Manila) Department of Labor, copy thereof furnished petitioner.

The Report was contested
by the petitioner and the parties were conciliated by Regional Office No. IV, Manila but failed to agree on a settlement.  The case was thus certified to the Executive
Labor Arbiter, National Labor Relations Commission, for compulsory arbitration,
in the following wise and manner:

“Pursuant to P.D. 442, as amended,
and its implementing rules and regulations (I) have the honor to transmit complaint – Case No. R04-10- (illegible)

COMPLAINANT/S                             HELMUT
DOSCH

Address:  c/o Atty. A.D. Valmonte

Don
Pablo Bldg.

114
Amorsolo St., Makati, Rizal

RESPONDENT/S    NORTHWEST
AIRLINES, INC.

Address:  1020
Roxas Blvd., Manila

and hereby
certifies the following issue(s) for arbitration:

1.     
Illegal dismissal.

2.     
x x x

3.      x
x x

4.     
x x x

5.     
X x x

The following issue(s) have been settled:

1. 
  x x x

2.     
x x x

3.     
x x x

4.     
x x x

Attached herewith is the
record of the case consisting of THIRTY ONE (31) pages

Original Signed:

Officer-In-Charge

February
3, 1976.”

After hearing, Labor Arbiter Sofronio
A. Ona rendered the decision dated December 29, 1976, the dispositive portion of which reads:

“IN VIEW OF THE FOREGOING, respondent Northwest Airlines, Inc.
of 1020 Roxas Boulevard, Manila is hereby directed to
reinstate complainant Helmut Dosch of Makati, Rizal c/o Atty. A. D. Valmonte, Don Pablo Building, 114 Amorsolo
Street, to his former position with full backwages
without deduction whatsoever from the time his salary was withheld by the
respondent until actual reinstatement, without loss of seniority rights and
other benefits recognized by law, including attorney’s fees equivalent to 10%
of the total monetary benefits the petitioner may recover, to take effect 10
days from receipt of this Decision.

SO ORDERED.

Manila, Philippines,
December 29, 1976.”

Respondent Northwest appealed from the Labor Arbiter’s decision
to the National Labor Relations Commission (hereinafter referred to as NLRC) assigning the following errors:  (a) the Labor Arbiter erred in not holding
that petitioner had “resigned” his employment; (b) assuming arguendo that petitioner “did not
resign,” the Labor Arbiter erred in not holding that petitioner could be
dismissed for failure/refusal to comply with the valid transfer order and for
the employer’s loss of trust and confidence of his employee; (c) the Labor
Arbiter erred in impliedly holding that prior clearance was required to effect
the termination of petitioner, a managerial employee; and (d) Labor Arbiter
erred in awarding reinstatement, backwages, and
attorney’s fees.

Petitioner filed his Reply to the appeal, supporting the findings
of the Labor Arbiter and furthermore ques­tioned the propriety of raising for
the first time on appeal the issue whether or not petitioner’s refusal to
comply with the transfer order constitutes a just and sufficient cause to
dismiss him.

The decision en banc of the NLRC
reversed the Labor Arbiter’s decision and dismissed the case for lack of merit,
holding that:

“The hiring, firing, transfer, demotion and promotion of
employees has been tradi­tionally identified as a
management prero­gative.  This is a
function associated with the employer’s inherent right to control and manage
effectively its enterprise.  The free
will of management to conduct its own business affairs to achieve its purpose
cannot be denied.  This exercise finds
support not only in actual management practice but has become a part of our
jurisprudence in labor relations law where, in a number of cases brought before
the Supreme Court, the highest tribunal ruled in one of these cases (Roldan vs. Cebu Portland Cement
Co., C.A.-G.R. No. 24276-R, May 20, 1960, citing
Gregorio Araneta Employees Union vs. Roldan, G.R. No. L-6843, July 20, 1955; Philippine
Steel Metal Workers Union vs. CIR, G.R. No. L-3587, Dec. 11, 1951), pertinent portion of
the decision reads as follows:

‘x x x Questions affecting the direction
and management of per­sonnel are matters which the manage­ment itself must
resolve.  Thus the Court has steadfastly
held that the determination of the qualifications and fitness of workers for
hiring and firing, promotion or reassign­ment on rotation system, are the
exclusive prerogatives of manage­ment. 
The management has also the right to discharge employees when there is
need to reduce personnel because of the precarious condition of the enterprise
or as a result of that closing of a section therein’ (Morabe,
The Law on Dismissal, 1962 ed., p. 55 citing Pampanga
Bus Co., Inc. v. Employees Asso­ciation of the Pampanga
Bus Co., Inc., Case No. 17-V, Decision, August 10, 1946).

x x x

In the light of all the foregoing, We find
that petitioner’s transfer and promotion is a valid exercise of management’s
prerogative.  It is our view, therefore,
that respondent’s decision to consider him resigned from his job after he defied management’s order to transfer and
promote him to a new position at the
general office at Minnesota, U.S.A. is justified and warranted.  x x x.”

Petitioner now comes to Us for
review of the deci­sion.

With respect to the
procedural error allegedly committed by the respondent Commission in taking cog­nizance
of an issue raised for the first time on appeal – that of petitioner’s alleged
insubordination for refus­ing to comply with the transfer order for him to
assume the position of Director of International Sales at Minneapolis, U.S.A.,
which said Commission sustained and ruled in favor of Northwest, reversing the
Labor Arbiter’s decision, the records disclose that Northwest’s theory from the
inception of the case to the rendition of the Labor Arbiter’s decision was that
petitioner was not dis­missed, fired or terminated but that he resigned from
Northwest.  This is plain from
Northwest’s verified “Report on Resignation of Managerial Employee”
in DOL Form No. 74-3 filed on September
16, 1975 with
Regional Office No. IV, Department of Labor, wherein
Northwest stated that the termination of employment of “Helmut Dosch, Manager-Philip­pines” was due to
“resignation”. 
Petitioner contested this report claiming that he never resigned from
the company.  In its “Position
Paper” dated March 10, 1976 before Regional Branch No. IV, Northwest
emphasized that any issue other than resignation of petitioner is irrelevant,
thus:  “As allegations relative to
termination are immaterial in this case, petitioner has no basis to claim that
‘there is no legitimate ground, upon which Northwest
Airlines, Inc. could have terminated the services of Mr. Dosch‘
or that peti­tioner’s resignation was ‘a circumvention of the law’.  In truth petitioner caused his own
dissociation from respondent.”

We agree with the Labor
Arbiter that “(i)n view of the overwhelming evidence
to the effect that petitioner did not resign or relinquish his position as
Manager-Phi­lippines, this Body is without any alternative, but to declare the
sole reason relied upon by respondent–resig­nation (Exh.
‘Q’) as baseless and devoid of truth.” Indeed,
the letter dated August 28, 1975 sent by petitioner to R.C.
Jenkins cannot be considered as a resignation as petitioner indicated therein
clearly that he preferred to remain as Manager-Philippines of Northwest.

Realizing that its
“resignation” theory was weak and flimsy, Northwest abandoned it and
contended for the first time that petitioner was guilty of insubordination when
he refused to comply with the transfer order. 
This change of theory on appeal is improper; it is offensive to
the basic rules of fair play and justice and violative
of petitioner’s constitutional right to due process of law.  Appellate courts may not entertain questions
of law or fact not raised in the lower courts (Sec. 18, Rule 46, Revised Rules
of Court), for that would consti­tute a change of theory not permissible on
appeal (Toribio vs. Decasa,
55 Phil. 461).

“It is undoubtedly the law, that, where a cause has been tried
upon the theory that the pleadings are at issue, or that a particular issue is
made by the pleadings, or where an issue is tacitly accepted by all parties as
properly presented for trial and as the only issue, the appellate court will
proceed upon the same theory.  (Lizarraga Hermanos
vs. Yap Tico, 24 Phil. Rep. 504; Molina vs. Somes, 24 Phil. Rep. 45.) It would be unjust and
oppressive for the appellate court to adopt a theory at variance with that on
which the case was presented to and tried by the lower court.  It would sur­prise the parties, to take them
unaware and off their guard, and would in effect, deprive them of their day in
court.  (Limpangco Sons vs. Yangco
Steamship Co., 34 Phil. 597, 605?609).

Since “resignation” was the particular cause alleged by
Northwest in terminating petitioner’s employment, Northwest is restricted to
the ground specified and may not invoke any other cause for the discharge.  (56 CJS p. 452, citing Georgia Coast and P.R. Co. vs. McFarland, 64 S.E. 897, 132 Ga 639; 56 CJS p. 435, citing Vicknair
vs. Southside Plantation Co., 10 La. App. Orleans 43; Warner vs. Fabacher, 6 La. App. Orleans, 87).

As indicated earlier, Northwest on appeal to NLRC
changed its stand and claimed that petitioner was guilty of
“insubordination” when he refused to comply with the transfer order
made by Vice President Jenkins dated August 18, 1975.  And for such act of insubordination,
Northwest claimed it lost confidence in the petitioner.

We must, however, rightly treat the Jenkins letter as directing
the promotion of the petitioner from his position as Philippine Manager to
Director of Interna­tional Sales in Minneapolis,
U.S.A.  It is not merely a transfer order alone but
as the Solicitor General correctly observes, “it is more in the nature of
a pro­motion than a transfer, the latter being merely inci­dental to such
promotion.” The inter-office communication of Vice President Jenkins is
captioned “Transfer” but it is basically and essentially a promotion
for the nature of an instrument is characterized not by the title given to it
but by its body and contents.  (Cf. Shell
Co. vs. Firemen’s Insurance Co. of Newark, 100 Phil. 757; Borromeo vs. Court of Appeals, L-22962, Sept. 28, 1972;
American Rubber Co. vs.
Collector of Internal Revenue, L-25965, June 29, 1975).  The communication informed the petitioner
that effective August 18, 1975,
he was to be promoted to the position of Director of Inter­national
Sales, and his compensation would be upgraded and the payroll accordingly
adjusted.  Petitioner was, therefore,
advanced to a higher position and rank and his salary was increased and that is
a promotion.  (People
ex. rel. Campbell vs. Partridge, 85 N.Y.S. 833, 899 App. Div. 497; State ex rel.
Wolcott vs. Celebrezze, 49 N.E. 2d. 948, 141 Ohio St. 627, Vol. 34 Words and Phrases,
pp. 564, 565).  It has been held that promotion
denotes a scalar ascent of an officer or an employee to another position,
higher either in rank or salary.  (Millares vs. Subido, 20 SCRA 954).

In the Millares case above, the
Supreme Court, speaking thru Acting Chief Justice J.B.L.
Reyes, dis­tinguished between transfer and promotion as follows:

“A transfer is
a movement from one po­sition to another of equivalent rank, level or salary,
without break in the service.  Promotion,
on the other hand, is the ad­vancement from one position to another with an
increase in duties and responsi­bilities as authorized by law, and usually
accompanied by an increase in salary. 
Whereas, promotion denotes a scalar ascent of a senior officer or
employee to another position, higher either in rank or salary, transfer refers
to lateral movement from one position to another, of equivalent rank, level or
salary.” (p. 962)

There is no law that compels an employee to accept a promotion,
as a promotion is in the nature of a gift or a reward, which a person has a
right to refuse.  When petitioner refused
to accept his promotion to Director of
International Sales, he was exercising a right and he cannot be punished for it
as qui jure suo utitur neminem laedit.  He who
uses his own legal right injures no one.

It cannot be said that petitioner’s refusal to obey
the transfer order was contumacious.  For
one, petitioner’s refusal was justified in that the position of Director of
International Sales had been non-existent since 1965 and was inexistent at the
time of petitioner’s promotion thereto
on August 18, 1975, which
fact is shown by Northwest’s Manual Policies and Procedures (Exhibit
“X”) and admitted by Northwest’s witness, Richardson Sells, in his
testimony.  Northwest has not even
attempted to deny the non-existence of the position.

Assuming for the sake of argument that the communication or
letter of Mr. Jenkins was basically a transfer, under the particular and
peculiar facts obtaining in the case at bar, petitioner’s inability or his
refusal to be transferred was not a valid cause for dismissal.

While it may be true that the right to transfer or reassign an
employee is an employer’s exclusive right and the prerogative of management,
such right is not absolute.  The right of
an employer to freely select or discharge his employee is limited by the
paramount police power (Phil. Air Lines, Inc. vs. Phil. Airlines Employees
Association, L-24626, June 28, 1974, 57 SCRA ­489)
for the relations between capital and labor are not merely contractual but
impressed with public interest (Article 1700, New Civil Code).  And neither capital nor labor shall act
oppressively against each other (Article 1701, New Civil Code).

There can be no dispute that the constitutional guarantee of
security of tenure mandated under Section 9, Article 2, 1973 Constitution
applies to all employees and laborers, whether in the government service or in
the private sector.  The fact that
petitioner is a managerial employee does not by itself exclude him from the
protection of the constitutional guarantee of security of tenure.  Even a manager in a private concern has the
right to be secure in his position, to decline a promotion where, although the
promotion carries an increase in his salary and rank but results in his
transfer to a new place of assignment or station and away from his family.  Such an order constitutes removal without
just cause and is illegal.  Nor can the
removal be justified on the ground of loss of confidence as now claimed by
private respondent Northwest, insisting as it does that by petitioner’s alleged
contumacious refusal to obey the transfer order, said petitioner was guilty of
insubordination.

We cannot agree to Northwest’s submission that petitioner was
guilty of disobedience and insubordination which respondent Commission
sustained.  The only piece of evidence on
which Northwest bases the charge of con­tumacious refusal is petitioner’s
letter dated August 28, 1975 to R. C. Jenkins wherein petitioner acknowledged
receipt of the former’s memorandum dated August 18,
1975, appreciated his promotion to Director of International Sales but at the
same time regretted “that at this time for personal reasons and reasons of
my family, I am unable to accept the transfer from the Philippines” and
thereafter expressed his preference to remain in his position, saying:  “I would, therefore, prefer to remain in
my position of Manager-Philippines until such time that my services in that
capacity are no longer required by Northwest Airlines.” From this
evidence, We cannot discern even the slightest hint of
defiance, much less imply
insubordination on the part of petitioner.

Neither is the other
ground alleged by Northwest in dismissing
petitioner which is loss of
confidence, supported by evidence.  On
the contrary, the fact that Northwest wanted to promote petitioner to Director
of International Sales as “the Company feels there is need for an
executive of (his) experience to fill the posi­tion of Director of
International Sales” as well as its Manifestation dated March 23, 1976
that Northwest “offered to rehire petitioner as Director of Interna­tional
Sales with office at Minneapolis, U.S.A.” clearly indicate
that Northwest had full confidence in petitioner.  And so We hold and rule that respondent Commission committed grave abuse of discretion in
sus­taining the dismissal of petitioner on the ground of insubordination and
loss of confidence.

Indeed, the outright
dismissal of petitioner from his position as Manager-Philippines of Northwest
Air­lines is much too severe, considering the length of service that petitioner
has rendered for eleven (11) fruitful and loyal years, a strong and vital
factor that must be taken into account in labor law determinations which this
Court, speaking thru Chief Justice Fernando in Meracap
vs. International Ceramics Manu­facturing Co., Inc.,
L-48235-36, July 30, 1979, 92 SCRA 412
emphasized should not only be secundum rationem but
also secundum caritatem,
to wit:

“It would imply
at the very least that where a penalty less punitive would suffice, whatever
missteps may be com­mitted by labor ought not to be visited with a consequence
so severe.  It is not only because of the law’s concern for the workingman.  There is, in addition, his family to
consider.  Unemployment brings untold
hardships and sorrows on those dependent on the wage-earner.  The misery and pain attendant on the loss of
jobs then could be avoided if there be accep­tance of the view that under all
the circumstances of this case, petitioners should not be deprived of their
means of livelihood.  Nor is this to
condone what had been done by them.  For
all this while, since private respondent considered them separated from the
service, they had not been paid.  For the strictly juridical standpoint, it
cannot be too strongly stressed, to follow Davis in his masterly work, Discretionary Justice,
that where a decision may be made to rest on informed judgment rather than
rigid rules, all the equities of the case must be accorded their due
weight. 
Finally, labor law determinations, to quote from Bultmann, should be not only secundum
rationem but also secundum
caritatem.” (This excerpt was cited in Almira vs. B.F. Goodrich Philippines, Inc., 58 SCRA 120, 131.)

The trend of recent decisions of this Court as pointed out by
Chief Justice Fernando in the recent case of Johnny Bustillos
vs. Amado
Inciong and Cummins Diesel Sales and Service
Corporation of the Philippines, G.R. L-45396, January 27, 1983 has been “to
vitalize the constitutional mandate of security of tenure as an aspect of the
protection accorded labor.” For its forceful and authoritative weight, We quote lengthily the careful and clear review of Our
decisions as follows:

“1.  Meracap
v. International Ceramics Mfg. Co., Inc. explains why the appeal should be
disposed in that manner.  Thus:  ‘In a number of decisions, Philippine Air
Lines, Inc. v. Philippine Airlines Employees Association, Almira
v. B.F. Goodrich Philippines, Central Textile Mills v. National Labor Relations
Com­mission, and Genconsu Free Workers Union v. Inciong, this Court has sought to vitalize the
constitutional mandate of security of tenure as an aspect of the protection
accorded labor.’ We do so again in this case.

2. 
The decision reached not only by a labor
arbitrator who heard the case but also by the National Labor Relations
Commission was the reinstatement of peti­tioner with back pay.  The challenged order reversed it.  Thus: 
‘In effect, com­plainant has no involvement in the alleged
pilferage.  However, since complainant no
longer enjoys the trust and confidence reposed upon him by respondent as a Ser­vice
Supervisor, and hence, a managerial employee, respondent has every right to
terminate him.  Since the termination is
not for a justifiable cause, complain­ant is entitled to separation pay.’ No
case has gone that far.  Moreover, the
ruling in Central Textile Mills, Inc. v. National Relations Commission is
squarely in point.  Thus:  ‘The weakness of the petition to repeat, is
thus in­disputable.  Petitioner,
(management) however, would try to impart a semblance of plausibility by
alleging that even on the assumption that no theft was committed, still there
was loss of confidence sufficient to cause his dismissal.  In the Philippine Air Lines decision referred
to, the accusation that theft was committed by the employee was likewise not
borne out by the evidence.  To justify a
dismissal, management relied on the allegation that there was breach of trust,
a ground ana­logous to loss of confidence. 
The Court of Industrial Relations did not agree.  Neither did this Court.  Reins­tatement was ordered.  So it must be in this case.’ The above ruling
is rein­forced by a case decided last December
15, 1982, Justice de Castro speaking for the Court in Acda v. Minister of Labor. 
Thus:  ‘The findings of the Labor
Arbiter on this point, as upheld by the National Labor Relations Commission,
are quite clear, and We find no reversible error therein the same being
substantiated by evidence of record, aside from the fact that said findings had
already attained the character of finality by the non-perfection of a proper
appeal.’ The opinion goes on to state:  ‘With
the charges against petitioner found to be unsubstantiated, We are left with no
other alternative but to hold that the so-called ‘loss of confidence’ is with­out
basis and may not be successfully invoked as ground for dismissal which
requires some basis therefor, such ground never
having been intended to afford an occasion for abuse by the employer of its
prerogative, as it can easily be subject to abuse because of its subjective
nature, to dismiss employees in contravention with the ‘protection of labor’
clause of the Constitution.  It is this
Constitutional guaranty that accords even to employees employed on a
probationary basis the protection that their services ‘may be terminated only
for a just cause or when authorized by existing laws, or when he fails to
qualify as a regular employee in accordance with reasonable standards
prescribed by the employer.’

3. 
 There is
likewise this excerpt from Meracap which calls for
the rever­sal of the assailed order of the Secre­tary of Labor.  Thus: 
‘In this suit for certiorari to review the dismissal of an appeal
from a decision of the then Acting Secretary of Labor Amado
G. Inciong by respondent Ronaldo
Zamora, Presidential Assistant on Legal Affairs, ordering the dismissal of
petitioner Faustino Meracap, the relevance of such a
provision becomes apparent.  It was
alleged by petitioner that while the termination of his services was based on
his unauthorized absences, the real reason was due to his union activities.  Respondent Zamora
ruled otherwise.  Such a finding of fact
must be accorded deference.  Nonetheless,
considering that petitioner Meracap has been in the
employ of the International Ceramics Manufacturing Company, Inc. for eighteen
years, it would appear that the punishment was much too severe.  Dismissal was not warranted.  Suspension would suffice.  To that extent, certiorari lies.’
Dismissal, as pointed out in the latest case in point, decided fourteen days
after Acda, in the ponencia of Justice Melencio-Herrera
in Visperas v. Inciong, ‘is
too harsh a penalty.  A penalty less
punitive should have been proper.’ In this case, upon mere suspi­cion, later
found to be unsubstantiated, he was immediately suspended.  A two-year suspension would have sufficed,
not the loss of his job.  The length of
service was accorded due consideration in decisions of this Tribunal ordering
reinstatement, twenty years in De Leon v. National Labor Relations Commission
and Reyes v. Philip­pine Duplicators and twenty-two years in Union of
Supervisors v. Secretary of Labor.  Here
he was in the service for eleven years when suspended.”

Accordingly, We must emphasize here the
long and faithful years of service that petitioner had rendered to respondent
company, eleven good years, nine of which as Manager with station at Manila.  It is plainly abusive of the company and
oppressive to the petitioner that the latter is peremptorily dismissed on the
shallow claim of “resignation without notice”, and thereafter
converted to alleged loss of confidence. 
This unjustified dismissal of the petitioner calls for Our specific
ruling in the cited case of De Leon
vs. National Labor
Relations Commission, 100
SCRA 691, 700, wherein the Court speaking through
Justice De Castro said:

“While a Managerial employee may be dis­missed merely on the
ground of loss of confi­dence the matter of determining whether the cause for
dismissing an employee is justified on ground of loss of confidence, cannot be left entirely to the employer. 
Impartial tribunals do not rely only on the statement made by employer that
there is ‘loss of confidence’
unless duly proved or sufficiently substantiated.  We find no reason to disturb the findings of the Labor Arbiter that the charges against
petitioner were not fully substantiated,
and ‘there can be no valid reason for said loss of confidence x x x.”

So must this Court re-enforce the constitutional protection
afforded labor and assure the right of workers to security of tenure.  Justice and equity call for peti­tioner’s
reinstatement.  It should be so not only secundum rationem
but also secundum caritatem.

One last point.  We reject the holding of the respondent
Commission that petitioner’s act
in accepting from the respondent airline several paychecks relative to his
pension fund and the cash value representing an adjustment in the peso amount
of his dollar base by reason of currency fluctuation constitutes an admission,
if not a conformity, of his lawful separation from office on August 31, 1975.  It appears indubitably that the several
paychecks mentioned by respondent NLRC were only
refunds of petitioner’s contribution to the pension fund of respondent
airline.  The money refunded was
petitioner’s own money, that which he personally
contributed to the retirement plan.  If
petitioner accepted the cash value representing the adjustment in the peso
amount of petitioner’s dollar base, the money was legitimately and legally due
to the petitioner; they are not benefits or
privileges granted by the airline to the dismissed petitioner.  There can be no estoppel
against petitioner’s acceptance of the refund of monies legitimately his own,
nor a waiver of his right to question the termination of his services.  (Urgelio vs. Osmeña, Jr., 10 SCRA 253).  Even employees who receive their separation pay
are not barred from contesting
the legality of their dismissal.  The
acceptance of those benefits would not amount to estoppel
as held in the leading case of Mercury Drug Company vs. CIR as aptly
cited in the decision of the Labor Arbiter. 
(De Leon vs. NLRC, 100 SCRA
691).

In Cariño vs. Agricultural
Credit and Cooperative Financing Administration, 18 SCRA
183, the rationale of the Court’s ruling rejecting the argument that acceptance
of separation pay and terminal leave benefits by the employees illegally
dismissed by their employer consti­tutes estoppel, is
stated thus, which We re-echo as follows:

“Acceptance of those benefits would not amount to estoppel.  The reason
is plain.  Employer and employee,
obviously, do not stand on the same footing. 
The employer drove the employee to the wall.  The latter must have to get hold of
money.  Because, out of
job, he had to face the harsh necessities of life.  He thus found himself in no position to
resist money proffered.  His, then, is a
case of adherence, not of choice.  One
thing sure, however, is that petitioner did not relent on their claim.  They pressed it.  They are deemed not to have waived any of
their rights.  Renuntiatio non praesumitur.”

WHEREFORE, IN VIEW OF ALL THE FOREGOING,
the decision of the National Labor Relations Commission in Case No.
RB-4220 is hereby REVERSED and SET ASIDE, and the decision of the Labor Arbiter
dated December 29, 1976 in RB-IV-4220-76 ordering petitioner’s reinstatement to
his former position with full backwages for three (3)
years without loss of seniority rights and other benefits recognized by law,
including attorney’s fees equivalent to 10% of the total monetary benefits
which the petitioner may recover, is hereby REINSTATED.  Costs against the
respondent Northwest.

Petition granted.

SO ORDERED.

Fernando, C.J., Makasiar,
Concepcion, Jr., De Castro, Plana,
Escolin, Vasquez, and Relova, JJ., concur.

Teehankee and Melencio-Herrera,
JJ., see separate dissenting opinion.

Aquino, J., in the result.

Abad Santos, J., dissents. 
Management should have freedom to re-assign personnel where no demotion
is involved.  Here petitioner was even
given promotion.

Gutierrez, Jr., J., regret to dissent.  The NLRC decision is
the correct one especially where it concerns a top official of a foreign airline
engaged in multinational or global operations.