G.R. No. L-58674-77 - People vs. Panis

Petitioner Bibiano C. Elegir was hired by Philippine Airlines, Inc. on March 16, 1971, as a commercial pilot, initially designated as HS748 Limited First Officer and later as A-300 Captain.
He built a long-term career with PAL, accruing over 25 years of continuous service before opting for retirement.

In 1995, PAL implemented a refleeting program which involved acquiring new, highly sophisticated aircraft.
As part of this program, the company opened eight B747-400 Captain positions by inviting flight deck crew members to bid.
The petitioner submitted his bid for the newly created position and was subsequently awarded the title.
He, along with several other pilots, was sent abroad for training at Boeing in Seattle, Washington, from May 8, 1995, to September 19, 1995, to acquire the necessary skills to operate the new aircraft.

On November 5, 1996, after serving 25 years, eight months, and 20 days, petitioner applied for optional retirement as provided under the Collective Bargaining Agreement (CBA) between PAL and the Airline Pilots Association of the Philippines (ALPAP).
PAL advised him to reconsider his decision, emphasizing that the company had not yet recovered the full cost of his training and warning that if he left before completing three years of service post-training, the training costs (computed at P5,000.00 per year of service) would be deducted from his retirement pay.
Petitioner then went on terminal leave on November 6, 1996, and proceeded with his retirement, only to be informed upon clearance that such deductions would indeed be applied.

Dissatisfied with the deduction, the petitioner, through counsel, asserted that his retirement benefits should be computed under Article 287 of the Labor Code (as amended by R.A. No. 7641), which provided for higher benefits than those under the existing PAL retirement plans.
PAL maintained that the retirement pay should be computed on the basis of the PAL-ALPAP Retirement Plan, which included the deduction for training expenses and had been expressly agreed upon in the CBA.
On August 27, 1997, the petitioner filed a complaint for non-payment of retirement pay along with claims for moral and exemplary damages and attorney’s fees.
The Labor Arbiter (LA) rendered a decision on February 6, 1998, where the petitioner was awarded retirement benefits based initially on a computation in line with Article 287 of the Labor Code, finding no basis in the records for the obligatory three-year service post-training.

The National Labor Relations Commission (NLRC), in its Decision dated March 18, 2002, modified the LA’s ruling by holding that the petitioner was eligible for retirement under the CBA despite not reaching the retirement age specified under Article 287.
The NLRC further ruled that the petitioner should reimburse PAL for a portion of the training costs, setting forth a detailed computation of benefits and deductions.
Both parties filed motions for partial reconsideration, leading PAL to eventually seek a petition for certiorari with the Court of Appeals (CA).

In its Decision dated August 6, 2007, the CA ruled that the petitioner’s retirement benefits should be computed based on the PAL-ALPAP Retirement Plan and the PAL Pilots Retirement Benefit Plan.
The CA acknowledged that a pilot retiring before the age of 60 is entitled to benefits computed under the company’s retirement plans and affirmed the need for reimbursement of training costs.
The petitioner subsequently filed a petition for review on certiorari with the Supreme Court, challenging the computation method and other aspects of the decision, which eventually led to the present ruling.

The primary controversy centered on whether the petitioner’s retirement benefits should be computed according to Article 287 of the Labor Code or based on the PAL retirement schemes (PAL-ALPAP and PAL Pilots Retirement Benefit Plans).
A secondary issue was whether the petitioner was obliged to reimburse PAL for the training expenses incurred on his behalf.
A tertiary issue concerned the proper imposition of interest on the monetary award rendered in favor of the petitioner.

Whether the petitioner’s retirement pay should be computed based on Article 287 of the Labor Code, which allegedly provides for higher benefits, or on the retirement plans under the PAL-ALPAP and the PAL Pilots Retirement Benefit Plan.

Whether the petitioner is obligated to reimburse PAL for the training expenses incurred, given that he retired before completing the service period (three years) expected by the company as a condition for cost recovery.

Whether interest should be imposed on the monetary award in favor of the petitioner, and if so, the proper rate and period from which such interest should accrue.