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Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 114307 July 8, 1998

PHILIPPINE AIRLINES, INC., petitioner,

vs.

NATIONAL LABOR RELATIONS COMMISSION (2nd Division), LABOR ARBITER JOSE DE VERA, and
EDILBERTO CASTRO, respondents.

RESOLUTION

ROMERO, J.:

The central issue in the case at bar is whether or not an employee who has been preventively suspended beyond
the maximum 30-day period is entitled to backwages and salary increases granted under the Collective Bargaining
Agreement (CBA) during his period of suspension.

Private respondent Edilberto Castro was hired as manifesting clerk by petitioner Philippine Airlines Inc. (PAL) on
July 18, 1977. It appears that on March 12, 1984, respondent, together with co-employee Arnaldo Olfindo, were
apprehended by government authorities while about to board a flight en route to Hongkong in possession of
P39,850.00 and P6,000.00 respectively, in violation of Central Bank (CB) Circular 265, as amended by CB Circular
383, 1 in relation to Section 34 of Republic Act 265, as amended.

When informed of the incident, PAL required respondent "to explain within 24 hours why he should not be
charged administratively." 2 Upon failure of the latter to submit his explanation thereto, he was placed on
preventive suspension effective March 27, 1984 for grave misconduct.

On May 28, 1984, an investigation was conducted wherein respondent admitted ownership of the
confiscated sum of money but denying any knowledge of CB Circular 265. No further inquiry was
conducted. On August 13, 1985, respondent, through the Philippine Airlines Employees Association
(PALEA), sought not only the dismissal of his case but likewise prayed for his reinstatement, to which
appeal, PAL failed to make a reply thereto. He reiterated the same appeal in his letter dated August 13, 1987.

On September 18, 1987 or three (3) years and six (6) months after his suspension, PAL issued a resolution
finding respondent guilty of the offense charged but nonetheless reinstated the latter explaining that the
period within which he was out of work shall serve as his penalty for suspension. The said resolution
likewise required respondent to affix his signature therein to signify his full conformity to the action taken
by PAL. Upon his reinstatement, respondent filed a claim against PAL for backwages and salary increases
granted under the collective bargaining agreement (CBA) covering the period of his suspension which the
latter, however, denied on account that under the existing CBA, "an employee under suspension is not
entitled to the CBA salary increases granted during the period covered by his penalty." 3

On March 22, 1991, Labor Arbiter Jose G. de Vera rendered a decision, the decretal portion of which reads
as follows:

WHEREFORE, all the foregoing premises being considered, judgment is hereby rendered
limiting the suspension imposed upon the complainant to one (1) month, and the respondent to
pay complainant his salaries, benefits, and other privileges from April 26, 1984 up to September
18, 1987 and to grant complainant his salary increases accruing during the period aforesaid.
Further, the respondent is hereby ordered to pay complainant P50,000.00 in moral damages and
P10,000.00 in exemplary damages.

SO ORDERED. 4

On appeal, this decision was affirmed by the National Labor Relations Commission (NLRC) in its decision
dated December 29, 1993 with the deletion of the award of moral and exemplary damages. Hence, the
instant petition.

We resolve to dismiss the petition.

Preventive suspension is a disciplinary measure for the protection of the company's property pending
investigation of any alleged malfeasance or misfeasance committed by the employee. 5 The employer may
place the worker concerned under preventive suspension if his continued employment poses a serious and
imminent threat to the life or property of the employer or of his co-workers. 6

Sec. 3 and 4, Rule XIV of the Omnibus Rules Implementing the Labor Code provides:
 Sec. 3. Preventive suspension. — The employer can place the worker concerned under
preventive suspension if his continued employment poses a serious and imminent threat to the
life or property of the employer or of his co-workers.

Sec. 4. — Period of suspension. — No preventive suspension shall last longer than 30 days.
The employer shall thereafter reinstate the worker in his former or in a substantially equivalent
position or the employer may extend the period of suspension provided that during the period
of extension, he pays the wages and other benefits due to the workers. In such case, the worker
shall not be bound to reimburse the amount paid to him during the extension if the employer
decides, after completion of the hearing, to dismiss the worker. (Emphasis supplied).

It is undisputed that the period of suspension of respondent lasted for three (3) years and six (6) months.
PAL, therefore, committed a serious transgression when it manifestly delayed the determination of
respondent's culpability in the offense charged. PAL stated lamely in its petition that "due to numerous
administrative cases pending at that time, the Committee inadvertently failed to submit its recommendation
to (the) management." 7 This is specious reasoning. The rules clearly provide that a preventive suspension
shall not exceed a maximum period of 30 days, after which period, the employee must be reinstated to his
former position. If the suspension is otherwise extended, the employee shall be entitled to his salaries and
other benefits that may accrue to him during the period of such suspension. The provisions of the rules are
explicit and direct; hence, there is no reason to further elaborate on the same.

PAL faults the Labor Arbiter and the NLRC for allegedly equating preventive suspension as remedial
measure with suspension as penalty for administrative offenses. The argument though cogent is, however,
inaccurate. A distinction between the two measures was clearly elucidated by the Court in the case of Beja
Sr. v. CA, 8 thus:

Imposed during the pendency of an administrative investigation, preventive suspension is not a

penalty in itself. It is merely a measure of precaution so that the employee who is charged may
be separated, for obvious reasons, from the scene of his alleged misfeasance while the same is
being investigated. While the former may be imposed on a respondent during the investigation
of the charges against him, the latter is the penalty which may only be meted upon him at the
termination of the investigation or the final disposition of the case.

A cursory reading of the records reveals no reason to ascribe grave abuse of discretion against the NLRC.
Simply put, its decision was grounded upon petitioner's manifest indifference to the plight of its suspended
employee and its consequent violation of the Implementing Rules of the Labor Code. As correctly ruled by
the NLRC:

In fact, the long period of complainant's preventive suspension could even be considered
constructive dismissal because were it not his letter dated September 12, 1985 and followed by
another on September 18, 1987 demanding his reinstatement, respondent by its inaction
appears to have no plan to employ him back to work. The manifest inaction of respondent over
the pendency of the administrative charge is indeed violative of complainant's security of
tenure because without any justifiable cause and due process complainant's employment
would have gone into oblivion. 9 (Emphasis supplied)

PAL contends that when respondent consented to the resolution that the entire period of suspension shall
constitute his penalty for the offense charged, the latter is thereby estopped to question the validity of said
suspension. We concur with the labor arbiter when be ruled that the ensuing conformity by respondent
does not cure petitioner's blatant violation of the law, and the same is therefore null and void. Thus, "to
uphold the validity of the subsequent agreement between complainant and respondent regarding the
imposition of the suspension would be repulsive to the avowed policy of the State enshrined not only in the
Constitution but also in the Labor Code." 10

In fine, we do not question the right of the petitioner to discipline its erring employees and to impose
reasonable penalties pursuant to law and company rules and regulations. "Having this right, however,
should not be confused with the manner in which that right must be exercised." 11 Thus, the exercise by an
employer of its rights to regulate all aspects of employment must be in keeping with good faith and not be
used as a pretext for defeating the rights of employees under the laws and applicable contracts. 12
Petitioner utterly failed in this respect.

WHEREFORE, premises considered, the petition is DISMISSED for lack of merit and the assailed decision is
AFFIRMED. No costs.

SO ORDERED.

Narvasa, J.C., Kapunan and Purisima, J., concur.

Footnotes

1 4. Any person, firm, company or corporation, may import or export, and any incoming or outgoing
traveller may bring with him, Philippine notes and coins, and checks, money orders and other bills of
exchange drawn in pesos against banks operating in the Philippines in an amount not exceeding
P500.00; Provided, That an amount in excess of P500.00 may be imported into, exported from, or
brought into or out of, the Philippines upon prior authorization of the Central Bank of the Philippines;
AND PROVIDED FURTHER THAT FOR THE DURATION OF THE DEMONETIZATION PERIOD
PRESCRIBED UNDER PRESIDENTIAL DECREE NO. 168 OF APRIL 12, 1973, PHILIPPINE NOTES MAY
BE BROUGHT INTO THE PHILIPPINES ONLY BY INCOMING PASSENGERS IN AMOUNTS NOT
EXCEEDING P500.00 FOR EACH PASSENGER WITHOUT EXCEPTION.

2 Rollo, p. 26.

3 Petition, pp. 2-20.

4 Ibid., p. 43.

5 Globe-Mackay Cable and Radio Communication v. NLRC, 206 SCRA 701 (1992).
 6 Rural Bank of Baao, Inc. v. NLRC, 207 SCRA 444 (1992).

7 Rollo, p. 6.

8 207 SCRA 689 (1992).

9 Rollo, p. 31.

10 Ibid, p. 41.

11 Philippine Telegraph and Telephone Corporation v. Laplana, 199 SCRA 485 (1991).

12 Tierra International Construction Corp. v. NLRC, 256 SCRA 36 (1996).

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