Montinola vs. Philippine Airlines

G.R. No. 198656. September 8, 2014.


Nancy Montinola, an employee of PAL, were subjected to custom searches in Honolulu, Hawaii, USA. During the search, 10 crews, including her were found of possession of food items.

PAL conducted an investigation. PAL’s Cabin Services Sub-Department required Montinola to comment on the incident. Montinola gave a handwritten explanation, stating that she did not take anything from the aircraft and committed to give her full cooperation should there be any further inquiries on the matter.  She was furnished by a notice of administrative charge. During the Clarificatory hearings, Montinola requested for proper notice of the acts violative of PAL’s Code of Discipline. Instead of giving proper notice, PAL threatened that she would be waiving her right to a clarificatory hearing if she insisted on her request. PAL failed to specify her participation in the alleged pilferage. PAL’s Management found Montinola guilty of 11 violations of the company’s Code of Discipline and Government Regulation. She was meted with suspension for one (1) year without pay.

Montinola brought the matter before the Labor Arbiter. The Labor Arbiter found her suspension illegal, finding that PAL never presented evidence that showed Montinola as the one responsible for any of the illegally taken airline items. The Labor Arbiter ordered Montinola’s reinstatement with backwages, inclusive of allowances and benefits amounting to P378,630.00.  The Labor Arbiter also awarded attorney’s fees.

The National Labor Relations Commission affirmed the decision of the Labor Arbiter.

The Court of Appeals affirmed the decisions of the Labor Arbiter and National Labor Relations Commission but modified the award deleting moral and exemplary damages and attorney’s fees. It states that “settled is the rule that moral damages are recoverable only where the dismissal or suspension of the employee was attended by bad faith or fraud, or constituted an act oppressive to labor, or was done in a manner contrary to morals, good customs or public policy.” In the case at bar, there is no showing that PAL was moved by any ill will or motive in suspending private respondent.

Montinola claims that she is entitled to moral damages because her illegal suspension was attended by bad faith, causing her to suffer “mental anguish, fright, serious anxiety, and moral shock.” Furthermore, the illegal suspension tarnished her good standing. Montinola underscores that the investigation against her was conducted in a “hasty, impetuous, harsh and unjust” manner. She was not properly apprised of the charges against her.  The claim for exemplary damages is anchored on Montinola’s belief that such damages “are designed to permit the courts to mould behaviour that has socially deleterious consequences, and their imposition is required by public policy to suppress the wanton acts of the offender.” Finally, Montinola argues that she is entitled to attorney’s fees because she was forced to litigate.


WON Montinola’s illegal suspension entitled her to an award of moral and exemplary damages and attorney’s fees.


Yes, Montinola is entitled to moral and exemplary damages. She is also entitled to attorney’s fees.

The employee is entitled to moral damages when the employer acted a) in bad faith or fraud; b) in a manner oppressive to labor; or c) in a manner contrary to morals, good customs, or public policy.

PAL’s actions in implicating Montinola and penalizing her for no clear reason show bad faith. PAL’s denial of her request to clarify the charges against her shows its intent to do a wrongful act for moral obliquity. Worse, the panel of PAL officers led by Atty. Pascual did not entertain any query to clarify the charges against her.

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