SC orders PAL to pay exec in 80s airline scam

A ruling by the Supreme Court (SC) affirmed the ruling of the National Labor Relations Commission (NLRC), directing the national flagcarrier Philippine Airlines, Inc. (PAL) to give separation pay to a former employee who contested her dismissal for incompetence.

The employee had been a handful of PAL officials who figured in a high profile financial anomalies collectively known as the billion peso “PALSCAM” uncovered in the late 1980s involving undue commissions paid to international airline agents of PAL.

The ensuing controversy merited the intervention of a fact finding panel formed by then President Corazon Aquino.

The SC first division in its ruling affirmed the Sept. 29, 2005 decision and Nov. 14. 1995 resolution of the NLRC with the modification that petitioner PAL should pay Aida Quijano one-half (1/2) month salary for every year of service as separation pay on equitable grounds.

In a 25-decision penned by Associate Justice Teresita J. Leonardo-de Castro, the SC said the transgressions imputed to Quijano have never been firmly established as deliberate and willful acts as clearly directed at making PAL loss of millions.

In 1990 Ramon Lozon, was a senior vice-president-finance of PAL, was fired in the aftermath of the much-publicized “P2-billion scam.

His termination from the service was spawned by a letter sent some time in June 1990 by a member of PAL’s board of directors, then Solicitor General Francisco Chavez, to PAL President Dante Santos.

Chavez demanded an investigation of twenty-three irregularities allegedly committed by twenty-two high-ranking PAL officials in four cases, labeled “Goldair,” “Autographics,” “Big Bang of 1983” and “Middle East.”

On Jan. 18,1991, the PAL board of directors issued two resolutions relative to the investigation conducted by the presidential investigating panel in the “Autographics” and “Goldair” cases.

In “Autographics,” four officials were charged with “gross inefficiency, negligence, imprudence, mismanagement, dereliction of duty, failure to observe and/or implement administrative and executive policies” and with the “concealment, or cover-up and prevention of the seasonal discovery of the anomalous transactions” had with Autographics Inc., resulting in, among other things, an overpayment by PAL to Autographics in the amount of about P12 million.

In the “Goldair” case 7 were charged with offenses that had caused PAL’s defraudation by Goldair, PAL’s general sales agent in Australia, of 14.6 million Australian dollars.

After discovering the Goldair fraud, the PAL filed a civil case in Australia against Goldair seeking to recover AUD 11 million. A settlement was reached as Goldair was to pay PAL AUD 7 million inclusive of court cost.

In 1991, the PAL board of director suspended and eventually considered Quijano and others resigned from service for loss of confidence and for acts inimical to the interest of the company.

The PAL claimed that as manager-ASAD in 1984-1987 when the fraud was discovered, she failed to uncover or detect and report or grossly disregarded the fraud although the commission vis-à-vis production was scandalously high.

Quijano bought her case to NLRC and won against the PAL. The PAL was prompted to file petition for certiorari before the SC to seeking annul the two rulings of NLRC.

The NLRC decision revealed that the fraud was found to have started in 1981 and Quijano became the manager of Agents Services Accounting Division (ASAD) only on Sept. 1, 1984 .

Quijano was the first to discover the overpayment of commission claims to Goldair in 1984 in rate differences in net or net settlement. After her intervention, it did not recur.

She was also the one who first discovered the fraud in double and fictitious commission claims and promptly took action when she withheld all provisional payments due to Goldair.

Even after the Goldair anomaly was discovered, Quijano could have availed of PAL’s Special Retirement and Separation Program but she stayed put.

She had gone twice to Australia , while under preventive suspension, to attend court proceedings as a witness for PAL enabling the said company to recover and minimize its economic loss.

She has no derogatory recording during the entire period of her employment for more than two decades.

The NLRC ruled that Quijano should be awarded in accordance with PAL’s Special Retirement and Separation Program dated Feb. 15, 1998 plus 10 percent of the total amount by way of attorney’s fees.

The SC said Quijano should only be paid one-half month of salary for every year of service instead because she was not separated due to mandatory or optional retirement. Concurring with the decisions were Chief Justice Renato Corona, Associate Justices Presbitero Velasco Jr., Mariano del Castillo and Jose Portugal Perez. –Benjamin B. Pulta, Daily Tribune