A.M. No. P-18-3848 - Olandria vs. Fuentes, Jr.

Petitioner Conrado Cosico, Jr. was hired on April 4, 1992 by Eva Airways Corporation, through its General Sales Agent Don Tim Air Service, Inc., as Assistant Station Manager for the Manila office.
His monthly salary was mutually agreed upon at P30,000.00.
As Assistant Station Manager, his duties included supervising the construction of Eva Air’s office at Ninoy Aquino International Airport (NAIA) and ensuring that flights carried at least sixty passengers, a target set to sustain the company’s operational overhead.

A performance audit conducted approximately five months after operation revealed that the Manila office was averaging only twenty-five passengers per flight—well below the targeted number.
In response to the audit findings and in an effort to make the Office cost-efficient, Eva Air decided to abolish the position of Assistant Station Manager.
On September 24, 1992, petitioner received a notice via a letter from the company stating that his position was abolished and that his services were terminated effective fifteen days from receipt of the notice.
The letter, issued by Deputy Senior Vice President Personnel Division Lewis Chang, clearly communicated the company’s management decision to restructure operations for economic reasons rather than for any particular fault of the petitioner.

Eva Air offered the petitioner separation pay equivalent to one month’s salary along with proportionate 13th month pay for six months and eleven days of service.
Instead of accepting the offer, petitioner filed a complaint for illegal dismissal, underpayment of wages, and moral and exemplary damages, thereby challenging not only the termination but also the nature and quantum of the benefits and damages awarded.
This case was docketed at the National Labor Relations Commission (NLRC) as NLRC NCR Case No. 00-10-05891-92.

On June 9, 1993, Labor Arbiter Ernesto Dinopal rendered a decision declaring petitioner’s dismissal as illegal and without justifiable cause.
The decision ordered the reinstatement of the petitioner without loss of seniority rights and awarded backwages (computed as eight months of salary), 13th month pay, moral damages, exemplary damages, and 10% attorney’s fees, totaling nearly P2,497,000.00.
Respondent Allen Soong, one of the parties involved, was absolved of any liability for his lack of active participation in the dismissal.
Respondents Eva Air and Lewis Chang then appealed the Labor Arbiter’s decision before the NLRC. They posted a surety bond of P270,000.00 with the understanding that it would suffice as security for the monetary award.

On August 31, 1994, the NLRC set aside the Labor Arbiter’s decision, giving due course to the appeal and ordering payment of separation benefits equivalent to one month for every year of service and a 13th month pay for 1992.
Petitioner filed a motion to reconsider the NLRC resolution on the ground that the supersedeas bond posted by the respondents was insufficient since it failed to cover the moral and exemplary damages and attorney’s fees.
The NLRC denied the motion for reconsideration on December 15, 1994, thereby affirming its resolution.
Dissatisfied, petitioner elevated the matter through a special civil action for certiorari, alleging grave abuse of discretion in multiple aspects of the NLRC’s rulings—including the acceptance of an allegedly insufficient appeal bond, the setting aside of the Labor Arbiter’s decision, the validation of the abolition of his position, and the denial of damages.

Whether the NLRC erred in accepting the appeal bond of P270,000.00 posted by the respondents, despite it not covering the additional amounts awarded for moral and exemplary damages and attorney’s fees.
Whether the provision requiring the bond “exclusive of moral and exemplary damages and attorney’s fees” should be liberally construed in favor of substantial justice.

Whether the abolition of the petitioner’s position constituted an illegal dismissal given that it was allegedly not duly abolished.
Whether delegating the performance of the assistant managerial functions to trained personnel already in the company’s employ justified the termination.

Whether the Labor Arbiter’s ruling that declared petitioner’s dismissal as illegal and without justifiable cause should have been upheld, or whether the NLRC was correct in setting it aside.
Whether the management prerogative in abolishing managerial positions was properly exercised without abuse of discretion or bad faith.

Whether petitioner was entitled to claim moral and exemplary damages, in addition to backwages and separation benefits, especially in the absence of evidence indicating bad faith, fraud, or an oppressive dismissal.