It’s final: SC declares PAL retrenchment as illegal

MANILA, Philippines – The Supreme Court (SC) has declared as illegal the Philippine Airlines’ (PAL) retrenchment of 1,400 flight attendants in 1998.

In a resolution, the second division of the High Tribunal affirmed its earlier ruling favoring the petition of the Flight Attendants and Stewards Association of the Philippines and junked the second motion for reconsideration filed by PAL.

“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,” the ruling stated.

“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 court stressed.

The SC first ruled on the case in July 2008.

The case stemmed from PAL’s decision to dismiss on June 15, 1998 some 5,000 of its employees to cut costs and mitigate further losses, amid the Asian financial crisis.

During the 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, thus dismissing more than 1,400 flight attendants, 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 on the condition that the collective bargaining agreement with employees would be suspended.

The employees, however, rejected the idea and 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 Estrada, the workers issued a counter-offer. The proposal, which included the hiring of retrenched workers, was ratified on Oct. 7, 1998. PAL resumed operations shortly thereafter. –Edu Punay (The Philippine Star)