G.R. No. 164267 & G.R. No. 166996, March 31, 2009.
PHILIPPINE AIRLINES, INC., Petitioner, vs. HEIRS OF BERNARDIN J. ZAMORA, Respondents. (G.R. No. 164267)

PHILIPPINE AIRLINES, INCORPORATED, FRANCISCO X. YNGENTE IV, PAG-ASA C. RAMOS, JESUS FEDERICO V. VIRAY, RICARDO D. ABUYUAN, Petitioners, vs. BERNARDIN J. ZAMORA, Respondent. (G.R. No. 166996)

FACTS

Bernardin J. Zamora was a cargo representative at PAL’s International Cargo Operations-Import Operations Division (ICO-IOD). He alleged that in December 1993, his supervisor, Ricardo D. Abuyuan, instructed him to alter documents to conceal smuggling and pilferage. Upon his refusal, Abuyuan fabricated charges against him. On November 6, 1995, Zamora received a memorandum for his temporary transfer to Domestic Cargo Operations (DCO), which he refused, citing lack of valid cause, violation of the CBA, and non-compliance with a 15-day notice rule. He also wrote to management to investigate the illegal activities, leading to conferences where he was instructed to continue observing ICO-IOD, but his salaries were withheld starting December 15, 1995. PAL claimed the transfer was to diffuse tension after an altercation between Zamora and Abuyuan and that Zamora refused the transfer and subsequent directives, leading to his being reported absent. Zamora was later served a Notice of Administrative Charge for Absence Without Official Leave (AWOL) and was terminated on January 30, 1998. He filed a complaint for illegal dismissal, unfair labor practice, non-payment of wages, and damages. The Labor Arbiter dismissed the complaint, but the NLRC reversed it, declaring the transfer illegal and ordering reinstatement with back wages. PAL’s motion for reconsideration was denied, and it filed a petition for certiorari (CA-G.R. SP No. 56428). Meanwhile, Zamora sought execution. The Labor Arbiter cited PAL for contempt for non-compliance. The NLRC later set aside the contempt order and, citing a supervening event (the alleged abolition of ICO-IOD as of June 30, 2000), ordered the award of separation pay in lieu of reinstatement and computed backwages until June 30, 2000. Both parties moved for reconsideration; the NLRC granted PAL’s motion and suspended proceedings due to PAL’s rehabilitation. Zamora challenged this via a petition for certiorari (CA-G.R. SP No. 68795). The Court of Appeals, in CA-G.R. SP No. 56428, affirmed the NLRC’s 1999 decision declaring the transfer illegal and ordering reinstatement. In CA-G.R. SP No. 68795, the appellate court initially set aside the NLRC resolution awarding separation pay but later amended its decision to delete the reinstatement order upon manifestation that Zamora had been detained for murder since October 2, 2000.

ISSUE

The primary issue consolidated in these petitions is the legality of Zamora’s transfer and dismissal, and the appropriate remedies, including reinstatement and monetary awards, considering subsequent events such as the alleged abolition of his department and his incarceration.

RULING

The Supreme Court consolidated the petitions. It upheld the Court of Appeals’ findings in both cases. The transfer of Zamora was deemed illegal as it was not justified by a valid and legal reason and appeared to be in retaliation for his report of illegal activities. The NLRC’s initial decision ordering reinstatement with back wages was affirmed. However, due to supervening events—specifically, Zamora’s incarceration for murder—the order for reinstatement was correctly deleted by the Court of Appeals in its amended decision. The Court emphasized that while the illegal dismissal finding stands, reinstatement is not feasible due to Zamora’s imprisonment, which constitutes a supervening event rendering reinstatement impracticable. The case was remanded to the NLRC for computation of back wages and other benefits from the date of illegal dismissal until the date of his incarceration, after which separation pay may be awarded in lieu of reinstatement.