PHILIPPINE AIRLINES, INC., PEDRO MARTIRES, JR. AND MANUEL PANLILIO, PETITIONERS, VS. NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER EDGARDO M. MADRIAGA, CARMENCITA NANNETTE …

Philippine Airlines versus National Labor Relations Commission

The Case

This is a petition for certiorari brought by Philippine Airlines, together with Pedro Martires, Junior and Manuel Panlilio, against the National Labor Relations Commission, Labor Arbiter Edgardo Madriaga, and their dismissed employee Carmencita Nannette De Veyra. The airline asks the Supreme Court to reverse the labor tribunal, which had declared the dismissal of De Veyra illegal and ordered her reinstated with backwages. The case matters because it is a clean illustration of two working rules in labor law: the employer's right to dismiss on the ground of loss of trust and confidence, and the standard of proof that supports it. It also teaches that the word falsify is broader than mere tampering, and that an employee need not have done the altering herself if she knowingly used the altered document.

Procedural History

De Veyra first filed a complaint for illegal suspension, non-payment of salaries and other benefits, and damages before the Labor Arbiter. She later filed an amended complaint for illegal suspension, illegal dismissal, and unpaid wages, with a claim for reinstatement. The Labor Arbiter ruled in her favor, declaring that she had been illegally suspended and dismissed, ordering her reinstatement with full backwages and other benefits, and awarding moral damages, exemplary damages, attorney's fees, and costs.

Philippine Airlines appealed to the National Labor Relations Commission. The Commission modified the Labor Arbiter's decision. It still declared the dismissal illegal and ordered reinstatement with full backwages, but limited the backwages to three years, directed that the price difference between the upgraded first class tickets and the economy tickets be deducted from the backwages, and deleted the awards of moral and exemplary damages. The Commission denied the airline's motion for reconsideration.

Philippine Airlines then came to the Supreme Court by petition for certiorari, with a prayer for a preliminary injunction or restraining order. The Court issued a temporary restraining order enjoining execution of the Commission's decision and resolution.

Facts

Philippine Airlines extends to its employees a trip pass benefit, which allows them and their dependents to travel free of charge, subject to company policies. The extent of the benefit depends on rank, position, and years of service. De Veyra, then a Senior Supervisor, was entitled to economy class accommodation. An employee applies for a trip pass, and tickets are issued against the authorization. The issuing clerk writes the priority and travel classification code on the audit coupon, and those entries are reproduced by carbon copy on the flight coupons. Any upgrading from economy to first class must be authorized by designated officials through a special airport concession, and even then the ticket still bears the economy entitlement, with the upgrading effected only at boarding.

In August 1986, De Veyra sent her trip pass to Minda Santiago of Sanyo Travel for her husband's ticket, and later sent another trip pass for her own trip. Santiago allegedly represented that she could secure first class accommodation. De Veyra and her husband traveled first class. The audit coupons of their tickets, however, showed entries different from the flight coupons: the priority code first written was first class, and later a letter was superimposed and another added on the audit coupons only, so that the audit coupons appeared to conform to the economy entitlement on the travel authorization. De Veyra also secured a reduced travel tax certificate for economy travel, yet her tickets reflected a travel tax payment corresponding to first class passage.

In August 1987, the airline's Internal Audit and Control Department reviewed tickets issued at the Interline Ticket Counter after uncovering widespread fraud. A notice of administrative charge was sent to De Veyra, and she was placed on preventive suspension. She asked for time to answer and engaged counsel. She submitted a sworn statement denying the charges and demanding a formal hearing. Without conducting the formal investigation she demanded, the airline terminated her employment effective on the date she was placed on preventive suspension. She amended her complaint to one for illegal dismissal.

Issues

• Whether or not De Veyra was illegally dismissed from employment.
• Whether or not the National Labor Relations Commission committed grave abuse of discretion in disregarding the airline's evidence and in holding that there was no basis for loss of trust and confidence.
• Whether or not De Veyra was afforded due process.
• Whether or not reinstatement was proper notwithstanding existing jurisprudence.

Applicable Provisions

The decision rests on the employer's prerogative to dismiss for loss of trust and confidence, a just cause recognized under the Labor Code. The Court quotes no specific article in the text provided, but it applies the settled rule that an employer may dismiss an employee on the ground of loss of confidence or breach of trust. This rule bears on the case because it is the very ground the airline invoked, and the Court measured the evidence against it.

Ruling

The Court resolved the petition in favor of Philippine Airlines. On the first issue, it held that De Veyra was not illegally dismissed. The Commission had limited the meaning of falsify to tamper with or alter, and the Court rejected that narrow reading:

The word refers likewise either to represent falsely, distort or violate the truth.

Because the tickets did not speak the truth, the Court held they were undoubtedly falsified. Having been employed for twenty years and familiar with company policies, De Veyra knew that without a valid authorization for upgrading, she and her husband were entitled to economy accommodation only. The Court also noted the reduced travel tax certificate, which covered economy travel only, against the first class travel tax reflected on her tickets.

On the second issue, the Court found that the Commission ignored the airline's ample evidence and resolved the controversy on a shallow analysis. While De Veyra may not have known about the alteration of the audit coupons, she could not feign ignorance of the falsity of the tickets. The Court held that it was not even necessary to prove her participation in the falsification. What was material was their use of trip passes falsified to reflect a higher priority and space classification than what they were entitled to, which served as the basis for the airline's loss of trust and confidence. The Court reiterated its recognition of the employer's right to dismiss on that ground.

On the remaining issues, the Court found no basis to sustain the Commission's ruling, since the dismissal was for a just cause supported by substantial evidence, and the airline had observed the procedure of notice and hearing before terminating her.

Doctrine

An employer may dismiss an employee on the ground of loss of trust and confidence, or breach of trust. To falsify means not only to tamper with or alter, but also to represent falsely, distort, or violate the truth. Where an employee uses trip passes or tickets that do not speak the truth, those documents are falsified, and the employee's actual participation in the alteration need not be proven. What is material is the use of the falsified document, which justifies the employer's loss of trust and confidence. The employer's evidence, if ample and substantial, must not be ignored by the labor tribunals.

Disposition

The Supreme Court granted the petition, set aside the decision and resolution of the National Labor Relations Commission, and upheld the dismissal of De Veyra by Philippine Airlines.

Remember This

The single line worth memorizing is that falsify means to represent falsely, distort, or violate the truth, and the employee's use of the falsified document, not her hand in the alteration, is what justifies dismissal for loss of trust and confidence. Examiners like to use this case to test the definition of falsification and the employer's prerogative to dismiss on that ground.