1998 PAL retrenchment of 1,400 cabin crew legal

MANILA The Supreme Court (SC) affirmed the retrenchment of some 1,400 flight attendants and stewards of Philippine Airlines (PAL) in 1998 as part of its measure to counter financial losses.

In a 55-page decision dated March 13 but was released to media on Monday, the SC en banc, in a 7-2 vote, upheld the Court of Appeals decision on Aug. 23, 2006 which upheld the legality of PAL's retrenchment program.

The ruling also sets two decisions in 2008 and 2009 by SC divisions which sided with the Flight Attendants and Stewards Association of the Philippines (FASAP).

The SC said the country's flag carrier, owned by Lucio Tan, observed good faith when it implemented the retrenchment of the flight attendants in 1998 to cushion PAL's financial losses amounting to about PHP90.6 billion.

PAL implemented a valid retrenchment program Upon a critical review of the records, we are convinced that PAL had met all the standards in effecting a valid retrenchment, read the decision.

(T)he court cannot be blind and indifferent to current events affecting the society and the country's economy, but must take them into serious consideration in its adjudication of pending cases, it added.

The ruling was penned by Associate Justice Lucas Bersamin while six other magistrates concurred, namely Associate Justices Diosdado Peralta, Estela Perlas Bernabe, Benjamin Caguioa, Noel Tijam, Samuel Martires and Alexander Gesmundo.

Associate Justices Marvic Leonen and Andres Reyes dissented from the ruling while taking no part were Acting Chief Justice Antonio Carpio, Associate Justices Presbitero Velasco Jr., Teresita Leonardo De Castro, Mariano Del Castillo and Francis Jardeleza.

Chief Justice Maria Lourdes Sereno also did not take part since she had been on indefinite leave due to her looming impeachment trial in the Senate.

The high court, said that PAL had been placed under corporate rehabilitation, citing a previous ruling that consistently recognized PAL's financial troubles while undergoing rehabilitation and suspension of payments.

Some of the cases mentioned by the high court include Philippine Airlines vs. Kurangking, Philippine Airlines vs. Court of Appeals, Philippine Airlines vs. PALEA and Philippine Airlines vs. National Labor Relations Commission.

The Court uniformly upheld the suspension of monetary claims against PAL because of the SEC's (Securities and Exchange Commission) order placing it under receivership. The Court emphasized the need to suspend the payment of the claims pending the rehabilitation proceedings in order to enable the management committee/receiver to channel the efforts towards restructuring and rehabilitation, read the SC resolution.

It can be recalled that on Sept. 7, 2011, the SC's Second Division denied with finality the second motion for reconsideration filed by PAL.

However, the Court en banc issued a resolution taking cognizance of the letters and motion filed by PAL's counsel Estelito Mendoza asking the Court to void its September 7 resolution.

The SC also decided to elevate the case before the en banc for action to avoid further confusion.

Then Court Administrator and spokesman Jose Midas Marquez said the SC agreed with Mendoza that the issuance of the September 7 resolution by the Second Division is in violation of the SC Internal Rules.

In his letter, he pointed out a misapplication of the rules, citing Section 4(3), Article VIII of the Constitution, which states that: (C)ases or matters heard by a division shall be decided or resolved with the concurrence of a majority of the Members who actually took part in the deliberations on the issues in the case and voted thereon, and in no case without the concurrence of at least three of such Members

This provision further stated that: (W)hen the required number is not obtained, the case shall be decided en banc: Provided, that no doctrine or principle of law laid down by the court in a decision rendered en banc or in division may be modified or reversed except by the court sitting en banc.

Thus, the September 7 resolution of the Second Division was recalled as the Court en banc has assumed jurisdiction to rule on the merits of the pending MR filed by PAL.

The MR filed by FASAP questioning the recall of their victory in the labor case was also denied.

The SC earlier recognized that special and unusual circumstances attended this legal dispute including successive retirement of the justices who originally handled the case, the series of inhibitions in the course of the case; the reorganization of the divisions which necessitated the transfer of the case from the Third Division, to the First Division, then to the Second Division; the unusual timing of Mendoza's letters, made after the ruling division had issued the September 7 resolution, but before the parties received their copies of the said resolution.

Source: Philippine News Agency