PHILIPPINE AIRLINES INC VS NLRC 201 SCRA 687 (1991)

FACTS: On the basis of the findings and recommendations of a Fact Finding Panel upon
investigation, Irineo and 3 other PAL employees, Damian, Rabasco and Macatol, were
prosecuted and convicted for estafa through falsification of commercial documents.
All 4 filed motions for reconsideration and/or new trial. Only one of them, Macatol, was
absolved for lack of sufficient evidence. 12 years later, Macatol filed a complaint for
illegal dismissal which was dismissed by the labor arbiter (LA) on the ground of
prescription. The NLRC affirmed, contending that the prescriptive period accrued from
the time of his dismissal and not the termination of the criminal case.
A later appeal with the IAC resulted in the acquittal of Irineo and Rabasco on grounds of
reasonable doubt. 17 years after his dismissal, Irineo filed a complaint against PAL for
reinstatement and back wages, claiming the termination was illegal. LAs decision
decreed his reinstatement without loss of seniority rights, payment of back wages and
moral damages of P300k. LA cited that since there was a PAL circular which
placed any employee charged with any crime inimical to the companys
interest under preventive suspension, and a standing order by the CIR
forbidding the dismissal of any PAL employee without court authority, Irineos
dismissal merely amounted to suspension.
PAL appealed to the NLRC but failed to obtain a reversal of the Arbiters decision.
ISSUE: Whether or not Irineo et al were merely suspended and not dismissed
HELD: The letter to Oscar Irineo of then PAL President Benigno P. Toda, based evidently
on the investigation and report of the fact finding panel, leaves no doubt that Irineo's
employment was being ended; the language is plain and categorical. It reads pertinently
as follows: 1
To: Oscar Ireneo
Comptroller's Department
For being involved in the irregular refund of tickets in the international service to the
damage and prejudice of the company, you are dismissed from the service effective
immediately.
The acts committed being criminal, resulting in the swindling of the company, the Legal
Department is directed to file immediately the corresponding criminal cases against you.
To say, as both the Arbiter and the respondent Commission do, that that declaration,
"you are dismissed from the service effective immediately," should be construed merely
as a suspension, not a dismissal, from employment, is illogical if not downright ludicrous.
They attempt to justify this conclusion by adverting to a PAL circular dated June 15, 1966
to the effect that "(a)n employee charged with any crime inimical to the company's
interest shall be placed under preventive suspension until the final adjudication of his
case," and construe this as a complete foreclosure or prohibition of any alternative or
concurrent action on PAL's part, such as the imposition of administrative sanctions or
penalties; in other words, any disciplinary action against an erring employee was
absolutely dependent on the outcome of the criminal action against the latter, no
disciplinary measure of any nature being permissible against the employee "until the
final adjudication" of his criminal case.
The attempt to sustain the strained theory of dismissal-qua-suspension by referring to a
standing order by the Court of Industrial Relations at that time forbidding the dismissal of

any employee by PAL without court authority, is equally indefensible. That prohibition
was imposed only in relation to a labor dispute then pending before the Court of
Industrial Relations. That dispute however ended when the parties entered into a
collective bargaining agreement 2 years or so before Irineo was fired on Aug 23, 1967. In
other words, when Irineo's employment was terminated, the CIR injunction adverted was
already functus officio and could no longer have any relevance to that event.
His assertion thereof after seventeen (17) years from his discharge from employment can
only mean that he slept on his rights or that his counsel did not share the respondent
Commission's belief in the soundness of the theory. His claim must thus be rejected as
time-barred, as being unpardonably tardy.