Philippine Air Lines, Inc. vs. Philippine Air Lines Employees Association (PALEA), No.

L-24626, JUNE 28,

1974

Topic: Labor Relations Policy: Formulation and Historical Development

[Capulong, Kleurence Glydel]

FACTS OF THE CASE:

 Fidel Gotangco, an employee of Philippine Air Lines (PAL) , was apprehended by a company
security guard at one of the gates of the PAL Airfield compound
 A lead material was found in his person which he , admittedly, intended to take home for his
personal use
 Gotangco was dismissed by his employer, Philippine Air Lines, for having been found guilty of
breach of trust and violation of the rules and regulations of the company.
 But Gotangco believed that his dismissal is a severe penalty because:
(1) it is his first time to commit the charge in question for the duration of his 17 years of
service with PAL;
(2) the cost of said material, considering its size, is negligible (8" x 10" x 1/2");
(3) PAL did not lose anything after all as the lead material was retrieved in time;
(4) the ignominy and mental torture undergone by Gotangco is practically punishment in
itself; and
(5) he has been under preventive suspension to date
 The Court of Industrial Relations issued a resolution and ordered PAL to reinstate Gotangco
immediately without backwages. According to it, indeed, an offense was actually committed but
the penalty must be one proportionate to the gravity of misdeed.
 However, PAL is not satisfied and file an appeal by certiorari.

ISSUE

 WON the Court of Industrial Relations can order an employer to reinstate a dismissed employee
who is found guilty of breach of trust.

RULING

 Yes. In the case of Manila Trading & Supply Co. v. Zulueta, the Court held that the Court of
Industrial Relations has the right to order the readmission of a laborer who had been found
derelict in the performance of his duties towards his employer.
 The court also concedes that the right of an employer to freely select or discharge his
employees, is subject to regulation by the State basically in the exercise of its paramount police
power. (Com. Act Nos. 103 and 213).
 Moreover, while there was an admission that misfeasance or malfeasance could be a ground for
dismissal, if it could be shown that the result would be neither oppressive nor self-destructive, it
cannot justify the outright termination of employment.
 Also, Article II, Section 9 of the 1973 Constitution provides that the state shall assure the rights
of the workers to “security of tenure.”
 In this case, the Court found that the offense committed is neither arbitrary nor oppressive,
particularly that it was a first offense after seventeen (17) years of service, that the lead material
is hardly of any pecuniary worth and that dismissal was too severe a penalty.