SC affirms: Retrenchment of PAL cabin crew illegal

MANILA, Philippines – The Supreme Court affirmed a decision tagging as illegal the Philippine Airlines’ (PAL) retrenchment of 1,400 cabin crew personnel in 1998.

In a resolution, the second division of the High Tribunal stood pat on a decision in favor of the Flight Attendants and Stewards Association of the Philippines (FASAP).

The resolution reads: “To conclude, the rights and privileges that PAL unlawfully withheld from its employees have been in dispute for a decade and a half. Many of these employees have since then moved on, but the arbitrariness and illegality of PAL’s actions have yet to be rectified.”

It stressed further: “This case has dragged on for so long and we are now more than duty-bound to finally put an end to the illegality that took place; otherwise, the illegally retrenched employees can rightfully claim this Court has denied them justice.”

The high court first ruled on the case in July 2008. In its latest resolution, the high court said: “The Court resolves to deny with finality respondent PAL’s second motion for reconsideration. No further pleadings shall be entertained. Costs against the respondents. Let entry of judgment be made in due course.”

Asked for comment, the flag carrier said: “PAL declined to comment or issue a statement pending receipt of the SC decision. The airline management said it needs to consult with counsel prior to making any statement.”

In a separate statement, FASAP President Bob Anduiza said: “The victims of PAL’s illegal retrenchment have suffered for so long and they deserve this relief from the Supreme Court. It took this long to fight for justice for the 1,400 flight attendants, finally, this sad episode ends in favor of the oppressed.”

The issue

The issue stemmed from PAL’s decision to dismiss on June 15, 1998 some 5,000 of its employees in order to cut costs and mitigate further losses. This was on the back of the Asian Financial crisis.

During the said period, the firm claimed to have incurred P90 billion in liabilities, almost the same level as its assets of only P85 billion.

It adopted “Plan 14” where it reduced its fleet of aircraft to 14 from 54, and thus dismissing more than 1,400 flight attendants and stewards and other cabin crew personnel.

A worker was supposedly retrenched based on his or her performance for the year 1997 alone.

It was later amended to “Plan 22,” which forced the firm to rehire some 140 of the workers previously retrenched.

To appease other employees, PAL Chairman and Chief Executive Officer Lucio Tan offered to transfer shares of stock to employees and three seats in the Board of Directors. This was on the condition that the collective bargaining agreement with employees would be suspended.

The employees however rejected the idea. Mass actions forced PAL to close shop despite the approval of its rehabilitation blueprint from the corporate regulator.

Through the intervention of then President Joseph Ejercito Estrada, the workers issued a counter-offer. The proposal, which included the hiring of retrenched workers, was ratified on October 7, 1998. PAL resumed operations immediately thereafter.

The labor case continued also continued thereafter. –Ira P. Pedrasa, abs-cbnNEWS.com