604 Phil. 364


[ G.R. No. 159687, April 24, 2009 ]




Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the Decision[1] dated April 23, 2003 of the Court of Appeals (CA) which modified the Decision[2] dated April 26, 1999 of the National Labor Relations Commission (NLRC); and the August 6, 2003 CA Resolution[3] denying the motion for reconsideration.

The relevant facts are of record.

Roberto J.C. Reyes (Reyes) had been employed with Gulf Air as Airport Manager for around ten years when he was dismissed on October 10, 1992 for serious misconduct and breach of trust and confidence[4] arising from the following incidents:

In an office memorandum dated June 29, 1992, Aquel Yousip Ishaq (Ishaq) of the Gulf Air Revenue Department instructed Reyes to investigate the acceptance without prior authorization of an Astro Airline ticket on FOC [free of charge] basis for travel from MNL-BAH on GF 155 on June 10, 1992, in violation of Gulf Air's Manual of Authority which provides that "no FOC tickets of other airline (OAL) should be honored for travel on GF without obtaining proper authority." Astro Airline has no interline agreement with Gulf Air.[5]

In reply,[6] Reyes clarified that he ordered the acceptance of the free ticket from Astro Airline to accommodate Philippine Civil Aeronautics Board Executive Director Silvestre Pascual[7] (Pascual) who had requested Gulf Air to assist Mr. Andy Queroz (Queroz), a Filipino consultant in the Middle East, during the latter's stay in Manila.[8]

On October 1, 1992, Gulf Air Area Manager-Philippines, Jassim Hindri Abdulla (Abdulla) required Reyes to explain in writing why he should not be dismissed for dishonesty, serious misconduct and willful breach of the trust and confidence reposed in him by Gulf Air in view of the following results of the investigation into the matter:
  1. That [Reyes] had authorized free hotel accommodation for an overnight stay at Philippine Village Hotel in favor of MR. A. QUEROZ on 08 May 1992 as per Meal Accommodation Transport Order No. 376677.

  2. That subject passenger did not travel on Northwest Flight NO. 003/08 May 1992 to connect on GF155, and even if he did, the hotel accommodation should be the responsibility of delivering carrier which in this case is Northwest.

  3. That the passenger traveled on GF155/10 May 1992 and not GF155/10 June 1992 as reported by [Reyes].

  4. That the passenger was accepted using an Astro Airlines FREE TICKET not because of an oversight on the part of the GHA check-in staff but upon [Reyes'] direct instructions.

  5. That [Reyes] did not conduct an investigation but rather had previous knowledge of the case. Thus, his reply to Revenue Department did not correct the actual departure date.

  6. That based on the foregoing, it is clear that this is an accommodation on [Reyes'] part to provide free hotel and free travel to MR. QUEROZ at the expense of the Company and afterwards deliberately tried to cover it up.[9]
Pending submission of his explanation, Reyes was placed under preventive suspension.[10]

In his explanation letter, Reyes insisted that he acted "within the bounds of authority [he] believed he had in accommodating the request of [Pascual] to ASSIST AND ACCOMMODATE Mr. Andy Queroz x x x."[11]

Not satisfied with Reyes' explanation, Gulf Air terminated his employment.[12]

Reyes filed with the Labor Arbiter (LA) a complaint against Gulf Air, Abdulla and Gulf Air Area Financial Controller Resty Arevalo (hereinafter referred to as Gulf Air), alleging that he did not betray the trust and confidence of his employer when he granted certain privileges to Queroz upon the request of Pascual; rather, he acted in the exercise of his public relations duties as Airport Manager and in furtherance of Gulf Air's business interest.[13]

In their position paper, Gulf Air disclosed that Reyes was previously issued a stern warning for failing to coordinate closely with higher management;[14] and that in the incident which led to his dismissal, Reyes again failed to coordinate with higher management when he extended certain privileges to Queroz without seeking prior authorization as required under company policies.[15] Gulf Air further claimed that Reyes' conduct was tainted with malice for he attempted to cover it up by filing a Memorandum dated July 17, 1992[16] in which he denied knowledge of the incident.[17]

Reyes contested the authenticity of the July 17, 1992 Memorandum cited by Gulf Air.[18]  He obtained Questioned Document Report No. 338-598[19] issued on May 29, 1998 by the National Bureau of Investigation which states that, in comparison with the standard signature of Reyes, the signature appearing on the questioned document was not the same.

In a Decision dated August 7, 1998, the LA declared that Reyes was validly dismissed for he had no authority to extend privileges to Queroz.  The LA doubted that Reyes accommodated Queroz upon the request of Pascual, the latter not having been presented to attest to such claim.[20]  The LA made no finding on whether Reyes attempted to cover up the incident.

Reyes appealed[21] to the NLRC which, in a Decision dated April 26, 1999, reversed the LA decision, thus:
Wherefore, in view thereof, the assailed decision is hereby Reversed and Set Aside and new one entered finding the dismissal of complainant illegal.

Consequently, respondents are ordered to pay complainant's separation pay at the rate of one (1) month salary for every year of service.

Aside from this, backwages reckoned from the time of dismissal up to the promulgation of this judgment is also recoverable.

Likewise, the awards of P300,000.00 and P200,000.00 representing moral and exemplary damages, respectively, are proper because of the whimsical dismissal of complainant.

Ten percent of the total monetary award shall likewise be proper representing attorney's fees.

The NLRC held that based on Reyes' job description,[23] he was authorized to extend privileges to Queroz in order to maintain Gulf Air's public relations.  At one time, Reyes accommodated a certain Mr. Sheikh M. Alkhalifa (Alkhalifa) and his entourage by providing them passage through Gulf Air even when said passengers were holding "Cathay Pacific (CX) free of charge (FOC or ID 90 [90% discount)] tickets which were non-endorseable to Gulf Airline or any other airlines and which were also non-refundable." Gulf Air did not rebuke or reprobate Reyes for such action; hence, there is no reason for it to suddenly reverse its policy and dismiss Reyes for extending the same treatment to Queroz.  If in the meantime Gulf Air had changed its policy by requiring Reyes to obtain prior authorization from the Area Manager, then evidence of the policy change should have been presented.  As it were, Gulf Air failed to prove the existence of such requirement; what it established was only a previous warning issued to Reyes in 1989, but which was hardly relevant to the present case, because said warning pertained to the handling of accounting documents.[24]

Gulf Air filed a Motion for Reconsideration but the NLRC denied the same.[25]

Upon Petition for Review on Certiorari[26] filed by Gulf Air, the CA rendered the decision assailed herein, the dispositive portion of which reads:
WHEREFORE, the instant petition is PARTIALLY GRANTED. The questioned decision is hereby MODIFIED, to the effect that the awards of moral and exemplary damages and attorney's fees are hereby DELETED. The same is hereby AFFIRMED in all other respects.

The CA denied Gulf Air's motion for partial reconsideration.[28]

Hence, the present petition by Gulf Air on the following grounds:
The Honorable Court of Appeals grossly erred in that -


Contrary to its findings that there is allegedly no evidence on record that would show that an accommodation in Gulf Air Flights is exclusive to an airline which has an interline agreement with Gulf Air, the following undisputed evidence and admission of private respondent himself, to wit:
(a) Petitioner company's Finance Manual Volume III and Appendix XXVII (Annexes A and B of Petitioners' Memorandum and Annexes A and B of Petitioners' Reply to Private Respondent's Motion for Reconsideration filed with public respondent NLRC)

(b) Admission of private respondent himself on cross-examination
Established beyond doubt that only documents like free tickets of airlines with interline agreements with petitioner company are accepted in the latter's flights and subjected to the approval of the Area Manager.


There is no evidence on record, except for the self-serving claim of private respondent, that would show that private respondent previously granted a similar accommodation on his own. On the other hand, unrebutted evidence on record clearly established that on matter of requests for accommodation of free passage, the prior approval of the Area Manager (private respondent's superior) is required as private respondent may only recommend.


Contrary to the manifestly erroneous finding of the Honorable Court of Appeals, the matter subject of the present case is not private respondent's first offense that his actions were not tolerated as he had already been previously issued a warning regarding several irregularities pertaining to the grant of Meal Accommodation Transport Order (MATO); lack of exercise of proper judgment on operational decision and close liaison with the Area Manager, as evidenced by the Memo addressed to him dated May 17, 1989 (Annex E to the Petition for Certiorari).


Private respondent who was occupying a managerial position as Airport Manager does not deserve any degree of sympathy in that despite his long years of service, the previous written warning given to him regarding the use of MATO and the clear rules on interline agreement of which he is fully aware, he willfully breached the trust and confidence demanded of his position.


As managerial employee, private respondent is subject to a stricter standard than that applicable to rank and file employees in that a slight breach of trust reposed in him or the mere existence of a basis for believing that he has breached the trust of his employer is sufficient to dismiss him for loss of trust and confidence.


The Honorable Court of Appeals grossly erred in awarding separation pay and backwages to private respondent who had willfully breached the trust and confidence reposed in him as a managerial employee by his acts of gross dishonesty.[29]
The petition is partly meritorious.

The petition hinges on the question of whether Reyes (respondent) committed willful breach of trust when he accepted the Astro Airline ticket of Queroz and granted him a MATO without prior authorization from his superiors in petitioner Gulf Air.  This is undoubtedly a question of fact the determination of which entails an evaluation of the evidence on record of the scope of the authority of respondent as Airport Manager and the nature of the privileges he granted to Queroz.  As a general rule, purely factual questions are not passed upon in petitions for review under Rule 45, for this Court does not try facts but merely relies on the expert findings of labor tribunals whose statutory function is to determine the facts.  In the present case, however, in view of the conflicting factual findings of the LA on the  one  hand  and  the NLRC and the  CA on the other,  the Court is constrained to resolve the factual question at hand.[30]
Petitioners attribute to respondent two separate acts of breach of trust: one is the acceptance of the FOC Astro Airlines ticket of Queroz; and the other is the grant of MATO to Queroz.  For either of these acts to constitute a valid cause for the dismissal of respondent, there must be substantial evidence that he committed said acts intentionally, knowingly, and purposely, without justifiable excuse, to flout Gulf Air's policy regarding acceptance of tickets issued by other airlines and prior warning against the arbitrary issuance of a MATO, to the prejudice of its business interest and in betrayal of its trust and confidence.[31]

In contrast to the findings of the LA, the concurrent view of the CA and the NLRC is that petitioners failed to prove the existence of a company policy prohibiting respondent from directly granting to Queroz travel and accommodation privileges; they instead found that the established company practice is that respondent may grant such privileges without need of prior authorization.[32]

Gulf Air maintains, however, that they presented sufficient evidence of company policies violated by respondent, specifically petitioner Gulf Air's Finance Manual and its May 17. 1989 Memorandum warning respondent against the arbitrary issuance of a MATO, which documentary evidence have greater probative value than the bare allegation of respondent that he was allowed to directly grant travel privileges to a passenger named Alkhalifa.[33]

Indeed, the records reveal that while respondent has public relations duties, the exercise thereof is subject to company policy.

Based on his Job Description as Airport Manager in Manila, respondent has the duty to:
11.  ensure GF standard are offered to VIP/CIP and other government officials;

x x x x

13.  ensure that GF relations (with) different government entities at the airport is maintained.

x x x x

19.  coordinate with different Philippine government entities at NAIA.[34]
It cannot be doubted that respondent's public relations duties include entertaining requests of officials of government agencies for travel on board Gulf Air.  In one incident cited by petitioners themselves, respondent interceded for a certain Deputy Collector Antonio Bautista (Bautista) of the "Customs and Immigration Department" to obtain free passage on board a Gulf Air flight to Singapore and Sydney; and acting upon the recommendation of respondent, herein co-petitioner Abdulla granted  discounted passage  to said government  official.[35]  The acceptance of the Astro Airline ticket of Queroz was likewise respondent's promotion of Gulf Air's public relations with Pascual of the Civil Aeronautics Board.  While the LA had doubted that it was Pascual who requested passage for Queroz, this fact was eventually established through the testimony of petitioner Arevalo that Pascual had offered to reimburse petitioner Gulf Air for the costs of the travel and hotel accommodation of Queroz.[36]

However, the authority of respondent to promote public relations by accommodating requests of officials of government agencies for free or discounted passage on board petitioner Gulf Air is subject to limitations.

In the same incident involving the discounted passage of Bautista, respondent admitted[37] that he first made a recommendation to petitioner Abdulla for the grant of the request,[38] and it was only when petitioner Abdulla issued a Reduced Rate Travel & Cargo Authorization that he (respondent) allowed the discounted passage of Bautista.[39]  The significance of this documentary evidence is clear: the authority of respondent to grant passage to officials of government agencies as a form of public relations promotion is circumscribed by company policy.

Gulf Air claims that when it comes to acceptance for passage of persons holding tickets issued by other airlines, the company policy is provided in Gulf Air Finance Manual, to wit:
2.16.2   Interline Carriers and Airlines Acting as Gulf Air's CSAs

x x x x

2.16.3   Gulf Air has interline agreements with many airlines of the world. The list of these airlines is distributed by Marketing Division - Pricing and Interline Affairs (Appendix XXVII). The documents of only these airlines are accepted by Gulf Air and reversely Gulf Air documents are drawn only on these airlines, for international purposes. Therefore, before accepting documents of an airline with whom Gulf Air has no interline agreement, authority is obtained from Marketing Department under advice to Revenue Department.[40] (Emphasis added)
Astro Airlines is not among the airlines with whom petitioner Gulf Air has an interline agreement; hence, under the foregoing manual, acceptance of Astro Airlines  tickets requires prior authorization from Gulf Air Marketing Department and notice to the Revenue Department.  Nothing in the Manual provides for exemption from this requirement.

Photocopy of the foregoing manual was presented by petitioner before the NLRC[41] and the CA.[42]  Respondent objected to its admissibility on the ground that it is a mere photocopy and the contents thereof were not testified to during the proceedings.[43]  However, as cited by petitioners, respondent virtually acknowledged the existence of a company policy on interline agreements in relation to the processing of requests by government officials for free passage, to wit:
Now, what is the procedure when a government official make a request to you in particular for a free of charge ticket?

We request him to write a letter to Gulf Air of his request to issue free ticket.

Supposed this was addressed to you, what do you do first?

The request was forwarded to Area Manager's Office and sent back to Ticket Office for ticket issuance.

At the time you accommodated this, not a Gulf Air ticket, an Astro Airlines free of charge ticket was there a list or listing of airlines in our office, Gulf Air Office, which have an interline agreement with Gulf Air?

Now, a request by a Government official or by a guest dignitary, to say, was addressed to you, would you know if that request was later approved or disapproved, would you know that?
In most cases it is always approved, based on the strength of my recommendation.[44] (Emphasis added)
Moreover, that a mere photocopy of the manual was presented does not make said evidence any less significant.  Labor proceedings are non-litigious in nature; hence, the technicalities of law and procedure and the rules obtaining in courts of law do not strictly apply.  Rather, the hearing officer is given much leeway to ascertain for himself the facts of the case.[45]

However, on the matter of the issuance of a MATO, the May 17, 1989 Memorandum of petitioner Gulf Air to respondent does not specify the pertinent company policy.  It merely invites respondent's attention to "several irregularities regarding MATO" without filling out the details.[46]  It leaves much to surmises and speculations.

In sum, while it is established that respondent's public relations duties include the accommodation of requests by government officials such as Pascual of the Civic Aeronautics Board, in the exercise thereof, respondent must comply with the requirement under petitioner Gulf Air's manual that in accepting tickets issued by airlines that have no interline agreement with Gulf Air, prior authorization must be obtained from the Marketing Department, with notice to the Revenue Department.  Without question, respondent did not comply with this requirement when he ordered the acceptance of the Astro Airlines ticket of Queroz. However, there is no evidence that respondent violated any company policy when he issued a MATO to Queroz.

The question that follows then is whether the violation committed by respondent amounts to willful breach of trust.

As Airport Manager, respondent occupies a position of such extreme sensitivity that the existence of some basis or reasonable ground for his involvement in any irregularity is enough to destroy the trust and confidence which petitioner Gulf Air had reposed in him.[47] However, it is settled that for breach of trust to constitute a valid cause for dismissal, the same must be willful. Ordinary breach of trust will not suffice.[48]

To establish that respondent willfully betrayed Gulf Air's trust and confidence by intentionally and knowingly disobeying its manual on interline agreements, Gulf Air cited a July 17, 1992 Memorandum in which respondent allegedly attempted to cover up the incident involving Queroz.[49]  But then, respondent obtained evidence, consisting of NBI Questioned Document Report No. 338-598,[50] that said Memorandum did not emanate from him.  Unfortunately, this matter was not threshed out in any of the fora below.  Neither did Gulf Air dispute said findings of the NBI. In effect, there is no evidence that respondent acted with malice in committing the violation of his employer's policies.

Thus, the CA and the NLRC correctly observed that the worst that respondent committed was an inadvertent infraction.  For that, the extreme penalty of dismissal imposed on him by petitioners was grossly disproportionate.  Taking into account the managerial position he held and the prior warning issued to him for failing to communicate with his superiors, the penalty commensurate to the violation he committed should be suspension for three months.[51]  The period of his suspension is to be deducted from the period for which he is entitled to backwages as awarded by the NLRC and affirmed by the CA.

WHEREFORE, the petition is PARTLY GRANTED.  The April 23, 2003 Decision and August 6, 2003 Resolution of the Court of Appeals are MODIFIED to the effect that instead of dismissal from service, respondent Roberto J.C. Reyes is deemed SUSPENDED for three months, to be deducted from the total amount of backwages awarded to him by the National Labor Relations Commission, as modified by the Court of Appeals.

No costs.


Ynares-Santiago,  Chico-Nazario, Nachura, and Peralta, JJ., concur.

[1] Penned by Associate Justice Eubolo G. Verzola, and concurred in by Associate Justices Martin S. Villarama, Jr. and Mario L. GuariƱa III; rollo, p. 8.

[2] CA rollo, p. 29.

[3] Rollo, p. 15.

[4] Id. at 93.

[5] Id. at 819.

[6] Id. at 651.

[7] Id. at 820.

[8] Rollo, p. 821.

[9] Id. at 834-834.

[10] Id. at 825.

[11] Rollo, p. 826.

[12] Id. at 93.

[13] CA rollo, p. 166-167.

[14] Rollo, p. 394.

[15] Id at 384.

[16] Id. at 397-398.

[17] Id. at 388.

[18] CA rollo, p. 240.

[19] Id. at 255.

[20] Rollo, pp. 409-410.

[21] CA rollo, p. 211.

[22] CA rollo, pp. 43-44.

[23] Id. at 48.

[24] Id. at 39-42.

[25] Id. at 46.

[26] CA rollo, p. 2.

[27] Rollo, p. 12.

[28] Id. at 15.

[29] Rollo, pp. 31-33.

[30] School of the Holy Spirit v. Taguiam, G.R. No. 165565, July 14, 2008, 558 SCRA 223; and Ballao v. Court of Appeals, G.R. No. 162342, October 11, 2006, 504 SCRA 227.

[31] Norsk Hydro (Phil.), Inc., v. Rosales, Jr., G.R. No. 162871, January 31, 2007, 513 SCRA 583.

[32] CA Decision, rollo, p. 66-67.

[33] Petition, rollo, pp. 34-35 and 39.

[34] Rollo, p. 818.

[35] CA rollo, pp. 50-51.

[36] Comment, citing TSN, September 9, 1994, pp. 55-57, and TSN, November 4, 1994, pp. 4-7, CA rollo, pp. 140-142.

[37] CA rollo, p. 133.

[38] Rollo, p. 278

[39] Id. at 279.

[40] Id. at 219-222.

[41] Memorandum, CA rollo, p. 337, citing Reply to Motion for Reconsideration.

[42] Id. at 353.

[43] Opposition to Partial Motion for Reconsideration, id. at 446.

[44] Petition, CA rollo, p. 15, citing TSN, November 15, 1993, pp. 50-53.

[45] San Miguel Foods, Inc. v. San Miguel Corporation Employees Union-PTGWO, G.R. No. 168569, October 5, 2007, 535 SCRA 133; Shoemart, Inc. v. National Labor Relations Commission, G.R. Nos. 90795-96, August 13, 1993, 225 SCRA 311.

[46] Rollo, p. 394.

[47] Ectuban, Jr. v. Sulpicio Lines, G.R. No. 148410, January 17, 2005, 448 SCRA 516.

[48] Ventura v. Court of Appeals, G.R. No. 182570, January 27, 2009; Bristol Myers Squibb v. Baban, G.R. No. 167449, December 17, 2008.

[49] Rollo, p. 397.

[50] Id. at 255.

[51] Janssen Pharmaceutica v. Silayro, G.R. No. 172528, February 26, 2008; 546 SCRA 628; C.F. Sharp & Co., Inc. v. Zialcita, G.R. No. 157619, July 17, 2006, 495 SCRA 387.

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