Topics: Pension, Retirement, Life annuity Pages: 8 (2869 words) Published: July 20, 2013
G.R. No. 181995

BIBIANO C. ELEGIR, petitioner, v. PHILIPPINE AIRLINES, INC., respondent. July 16, 2012


The Court ruled that both Article 287 and PAL’s retirement plans are alternative in nature and the retired pilot only is entitled to which have the superior benefits. Article 287 of the Labor Code is applicable only to a situation where: there is no CBA or other applicable employment contract providing for retirement benefits for an employee, or if there is a CBA or other applicable employment contract providing for retirement benefits for an employee, but it is below the requirement set by law. The rationale for the first situation is to prevent the absurd situation where an employee, deserving to receive retirement benefits, is denied them through the nefarious scheme of employers to deprive employees of the benefits due them under existing labor laws. On the other hand, the second situation aims to prevent private contracts from derogating from the public law. The determining factor in choosing which retirement scheme to apply is still superiority in terms of benefits provided. Thus, even if there is an existing CBA but the same does not provide for retirement benefits equal or superior to that which is provided under Article 287 of the Labor Code, the latter will apply. In this manner, the employee can be assured of a reasonable amount of retirement pay for his sustenance.

The Court also ordered petitioner to reimburse PAL with the costs of his training. It applied the ruling set forth in the case of Almario v. Philippine Airlines, Inc, which the Court in this case recognized the right of PAL to recoup the costs of a pilot’s training in the form of service for a period of at least three (3) years. This right emanated from the CBA between PAL and ALPAP, which must be complied with good faith by the parties. In the same case, the Court considered PAL’s act of sending its crew for training as an investment which expects an equitable return in the form of service within a reasonable period of time such that a pilot who decides to leave the company before it is able to regain the full value of the investment must proportionately reimburse the latter for the costs of his training. The Court held that Article 22 of the New Civil Code which recognizes the principle that one may not enrich himself at the expense of another or unjust enrichment. It held that “PAL expected to recover the training costs by availing of Almario’s services for at least three years. The expectation of PAL was not fully realized, however, due to Almario’s resignation after only eight months of service following the completion of his training course. He cannot, therefore, refuse to reimburse the costs of training without violating the principle of unjust enrichment.” After undergoing the training fully shouldered by PAL, he acquired a higher level of technical competence, which, in the professional realm, translates to a higher compensation. To allow the petitioner to simply leave the company without reimbursing it for the proportionate amount of the expenses it incurred for his training will only magnify the financial disadvantage sustained by PAL. Reason and fairness dictate that he must return to the company a proportionate amount of the costs of his training.


- Whether or not retirement benefits should be computed based on Article 287 of the Labor Code or on PAL’s retirement plans. - Whether or not the petitioner should reimburse PAL with the proportionate costs of his training.


Petitioner Elegir was employed by the respondent, Philippine Airlines (PAL) as a commercial pilot on March 16, 1971. Then in 1995, respondent start a refleeting program as it acquired new and highly sophisticated aircrafts. The petitioner then applied for the program and was later accepted to which he was sent for training at Boeing in Seattle, Washington, United States of America on May 8, 1995. He acquired...
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