G.R. No. 117038 September 25, 1997
PHILIPPINE AIRLINES, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, AVELINO MICABALO and PROSPERO ENRIQUEZ, respondents.

FACTS

Private respondents Avelino Micabalo and Prospero Enriquez were employees and union officials of Philippine Airlines (PAL) assigned at its Davao Station. An audit by PAL uncovered irregularities in ticket sales, where employees, including the respondents, would have passengers’ ticket payments charged to the employees’ personal credit cards. To conceal this, the audit coupon and flight coupon of the tickets bore different entries regarding the form of payment. Specifically, for several tickets, Micabalo’s credit card was used for payment, but the flight coupons were marked “Cash” or left blank, while the audit coupons correctly indicated “Charge.”
Following administrative investigations, both respondents were charged with fraud and falsification of company documents under PAL’s Code of Discipline. They were subsequently dismissed. They filed complaints for illegal dismissal. The Labor Arbiter ruled in favor of the employees, ordering reinstatement with backwages, a decision affirmed by the National Labor Relations Commission (NLRC). The NLRC held that the act of charging tickets to a personal card was not inherently fraudulent and that the company failed to prove malicious intent to defraud.

ISSUE

Whether or not the NLRC committed grave abuse of discretion in ruling that the dismissal of Micabalo and Enriquez was illegal.

RULING

Yes, the Supreme Court granted the petition and reversed the NLRC resolutions. The Court held that the NLRC disregarded substantial evidence and misappreciated the facts. The acts of the respondents constituted serious misconduct and willful breach of trust. The discrepancies between the audit and flight coupons were not mere corrections but a deliberate scheme to conceal the true mode of payment, which is a form of falsification. Their repeated actions over a period of time demonstrated a pattern of dishonesty.
The legal logic is clear: employees guilty of fraud or willful breach of trust reposed in them by their employer may be validly dismissed. The employer’s right to dismiss such employees is a management prerogative essential to protect its business interests. The law, while protective of labor, does not authorize the continued employment of individuals whose integrity has been compromised, as their retention would be patently inimical to the employer’s interest. The offenses involved are specifically penalized by dismissal under PAL’s Code of Discipline, which the respondents, as long-time employees and union officials, were presumed to know. Thus, their dismissal was for a just cause and legal.