CA rules in favor of PAL in labor suit

Published by rudy Date posted on January 8, 2009

The Court of Appeals (CA) has turned down a suit of the Philippine Airlines Employees Association (Palea) to compel national flag carrier Philippine Airlines (PAL) to shell out more than P600 million.

In a 15-page decision by Associate Justice Isaias Dicdican, the CA’s Special Eleventh Division upheld the resolution of the National Labor Relations Commission (NLRC) which declared null and void the decision of labor arbiter Arthur Amansec dated May 12, 1994 mandating PAL to pay its employees salary differentials based on their collective bargaining agreement (CBA).

The appellate court held that the judgment which Palea sought to be executed was already terminated and decided with finality by the Supreme Court (SC) on July 11, 1985.

The SC earlier pegged PAL’s liability to covered Palea employees in the amount of P5.88 million.

“We find the contention of Palea to be devoid of merit. Not only that Palea is bound by the decision dated March 31, 1976 but also by the decision dated July 11, 1985 which settled the issue as to the period that the adopted formula was to be applied, hence, Palea can no longer impugn the same,” the appellate court stressed.

On March 31,1976, the SC affirmed the resolution of the Court Industrial Relations (CIR) dated Oct. 9, 1969 which upheld the formula espoused by Palea and subsequently ordered PAL to pay salary differentials of Palea members effective Feb. 14, 1953 to Sept. 30, 1963.

The case stemmed from a labor strike more than 40 years ago held by Palea to demand that PAL adopt the purportedly correct method of computing the basic daily rate of pay of its monthly salaried employees, which was to divide the yearly or monthly salary by the actual number of working days in the year or the month and then divide the quotient thereof by eight, as the basis for determining their overtime pay, night differential pay, Sunday and holiday pay, vacation and sick leave pay, and off-days pay.

PAL’s method of computation was to divide the yearly salary by 365 days.

However, Palea invoked the said rulings in its petition to enforce final judgment filed on April 14, 1993 before the labor arbiter and sought the adoption of the adjudged formula in the new CBA.

The CIR later upheld the method of computation made by Palea which was subsequently affirmed by the SC.

In view of the finality of the judgment, PAL was directed by the SC to pay the salary differential to the covered employees from 1953 to 1963.

In a resolution dated Dec. 22, 1980, the SC fixed with finality the liability of PAL under its final judgment in the amount of P5.88 million since, between PAL and Palea, the former sufficiently substantiated its estimate of the disputed salary differentials.

Subsequently, Palea filed a petition to enforce final judgment before the labor arbiter asserting that the payment of P5.88 million was only a partial execution of the final judgment of the SC.

Furthermore, Palea contended that PAL did not comply with the formula adopted by the SC in the payment of the salaries of its covered employees starting from Oct. 1, 1963 up to the time when the petition was filed.

In a decision issued last May 12, 1994, Amansec ordered PAL to compute, effective Oct. 1, 1989 onward, the additional compensation due and payable to the covered employees based on the PAL-Palea CBA.

PAL, however, said Amansec committed grave error when he ruled beyond the judgment sought to be enforced and made his own judgment award based on the 1989-1992 CBA.

The country’s flag carrier argued that the petition of Palea was not a suit for the implementation of the 1989-1992 CBA but an action for the enforcement of the final judgment of the SC, and even if the suit was for the implementation of the 1989-1992 CBA, the labor arbiter had no jurisdiction to implement the same as grievances involving implementation of the CBA is lodged with the Voluntary Arbitrators.

Meanwhile, according to the Examiner’s Report dated May 15, 1996 and its supplemental report dated Aug. 9, 1996 prepared by the acting chief of the Research and Information Unit-National Capital Region, Ricardo Atienza, the total salary differentials with attorney’s to be paid by PAL amounted to P531 million from Oct. 1989 to Dec. 1995; P65 million from Jan. to June 1996; and P65 million from July 1 to Dec. 31, 1996.

But, the NLRC later granted the appeal of PAL and declared the May 12, 1994 decision of Amansec null and void.

In affirming the NLRC decision, the CA said Amansec deviated from the terms and conditions of the judgment issued by the SC with finality.

“The judgment which Palea sought to be executed was already terminated and deemed closed. The settlement of the final liability of PAL which amounted to P5,885,993 was not disputed by Palea. Instead, Palea asked for the adoption of the adjudged formula in the subsequent CBA,” the appellate court held.

“Thus, it is evident and clear that the formula adjudged by the Supreme Court to be applicable in the old CBA between PAL and Palea cannot be made to apply to the new CBA entered into by and between them because the same was yet settled in accordance with the grievance procedure set forth in their new CBA,” the CA said. –Benjamin B. Pulta, Daily Tribune

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