G.R. No. 55159 - Philippine Airlines, Inc. vs. National Labor Relations Commission

Private respondent Dolina was admitted on January 16, 1973, to the Philippine Airlines (PAL) Aviation School for pilot training.
The training agreement between Dolina and PAL provided that upon completion, Dolina would be given regular and permanent employment.

Dolina completed his academic course on January 25, 1974, and proceeded to an equipment qualification course which lasted until October 4, 1974.
On October 9, 1974, after being issued a Commercial Pilot license by the Civil Aeronautics Administration (CAA), PAL extended him a temporary appointment as Limited First Officer for six months.
When his appointment was set to expire on April 30, 1975, Dolina had not met the required minimum of 500 flying hours (recorded only 84 hours and 55 minutes), prompting a six-month extension described as “permanent.”
Despite a subsequent extension effective until October 31, 1975, Dolina still did not meet the flying-hour requirement; therefore, his employment was further extended until April 30, 1976.
During the final extension, Dolina attained the requisite 500 flying hours, and on March 31, 1976, he applied for regularization as First Officer.
Pending his physical examination, his appointment was again extended until October 31, 1976.

On August 17, 1976, Dolina underwent a psychological examination which yielded an “unacceptable” Adaptability Rating.
A subsequent evaluation on September 23, 1976, by the Pilot Acceptance Qualifications Board, after reviewing his qualifications and previous records, recommended his termination.
Based on the Board’s recommendation, PAL filed a clearance application for Dolina’s termination and placed him under preventive suspension effective October 1, 1976.

Dolina filed a complaint for illegal dismissal on October 6, 1976.
On January 26, 1977, the officer-in-charge at the Department of Labor Regional Office No. IV lifted the preventive suspension and ordered PAL to reinstate Dolina with full backwages from October 1, 1976.
The dispute regarding termination and damages was referred for compulsory arbitration before the Executive Labor Arbiter.
On March 2, 1977, while the appeal from the suspension lifting order was pending, the parties entered into an agreement stating:

Dolina would remain on PAL’s payroll effective October 1, 1976, pending final resolution of the case by arbitration.
The reinstatement order and corresponding backwages were rendered moot.

The Acting Secretary of Labor, on May 30, 1977, confirmed the arrangement by referring the case to compulsory arbitration.

On March 23, 1979, the Labor Arbiter rendered a decision which granted PAL clearance to dismiss Dolina, effectively upholding his termination and denying his claim for moral damages.
Consequently, PAL removed Dolina from its payroll effective April 1, 1979.
Dolina subsequently appealed this decision to the National Labor Relations Commission (NLRC) on April 29, 1979, filing a motion to restore him to the payroll and to claim his salaries from April 1, 1979, based on the prior agreement.

On February 8, 1980, the NLRC issued its decision ordering that Dolina be restored to PAL’s payroll and that he be paid his salaries from April 1, 1979, until the case was finally resolved, citing the agreement’s stipulation.
This decision was challenged by PAL as an overreach, asserting that the Labor Arbiter’s decision had already finalized the arbitration proceedings regarding his dismissal.
PAL filed a petition for certiorari, contesting the NLRC’s order, and a temporary restraining order was issued by the Court on October 10, 1980.

Whether the NLRC committed grave abuse of discretion by ordering PAL to continue paying Dolina’s salaries from April 1, 1979, until the case was finally resolved.
Whether the clause “pending final resolution of the case by arbitration” in the agreement between the parties covers the appeal process and can justify continued payroll inclusion after the Labor Arbiter rendered his decision.
Whether the continued payment of salaries, despite the Labor Arbiter’s final decision on compulsory arbitration (granting termination), constitutes an unwarranted extension of Dolina’s entitlements and amounts to unjust enrichment.