ON June 15, 1998, Philippine Airlines (PAL) retrenched 5,000 of its employees, including more than 1,400 of its cabin crew personnel, to take effect on July 15, 1998. PAL adopted the retrenchment scheme allegedly to cut costs and mitigate huge financial losses as a result of a downturn in the airline industry brought about by the Asian financial crisis. During said period, PAL claims to have incurred P90 billion in liabilities, while its assets stood at P85 billion.
In implementing the retrenchment scheme, PAL adopted its so-called Plan 14 whereby PALs fleet of aircraft would be reduced from 54 to 14, thus requiring the services of only 654 cabin crew personnel. PAL admits that the retrenchment is wholly premised upon such reduction in fleet, and to the strike staged by PAL pilots since this action also translated into a reduction of flights. PAL claims that the scheme resulted in savings xxx amounting to approximately P24 million per month savings that would greatly alleviate PALs financial crisis.
Prior to the full implementation of the assailed retrenchment program the Flight Attendants and Stewards Association of the Philippines (Fasap) and PAL conducted a series of consultations and meetings and explored all possibilities of cushioning the impact of the impending reduction in cabin crew personnel. However, the parties failed to agree on how the scheme would be implemented. Thus, PAL unilaterally resolved to utilize the criteria set forth in Section 112 of the PAL-Fasap Collective Bargaining Agreement (CBA) in retrenching cabin crew personnel: that is, that retrenchment shall be based on the individual employees efficiency rating and seniority.
PAL determined the cabin crew personnel efficiency ratings through an evaluation of the individual cabin crew members overall performance for the year 1997 alone. Their respective performance during previous years, i.e., the whole duration of service with PAL of each cabin crew personnel, was not considered. The factors taken into account on whether the cabin crew member would be retrenched, demoted or retained were: 1) the existence of excess sick leaves; 2) the crew members being physically overweight; 3) seniority; and 4) previous suspensions or warnings imposed.
While consultations between Fasap and PAL were ongoing, the latter began implementing its retrenchment program by initially terminating the services of 140 probationary cabin attendants only to rehire them in April 1998. Moreover, their employment was made permanent and regular.
On July 15, 1998, however, PAL carried out the retrenchment of its more than 1,400 cabin crew
On June 22, 1998 Fasap filed a Complaint against PAL for unfair labor practice, illegal retrenchment with claims for reinstatement and payment of salaries, allowances and backwages of affected Fasap members, actual, moral and exemplary damages with a prayer to enjoin the retrenchment program then being implemented. Other complaints were filed by individual Fasap members.
No less than the Supreme Court (SC) affirmed the illegality of the retrenchment not only once but three times in a row in its July 22, 2008 decision, October 2, 2009 resolution, and September 7, 2011 resolution.
The Third Division of the SC in its July 22, 2008 Decision resolved to GRANT the petition for review on certiorari filed by Fasap finding PAL Guilty of Illegal Dismissal, ordering PAL to reinstate the cabin crew personnel without loss of seniority rights and other privileges, and to pay them full back wages, inclusive of allowances and other monetary benefits computed from the time of their separation up to the time of their actual reinstatement. Where reinstatement is no longer feasible because the positions previously held no longer exist, PAL shall pay back wages plus, in lieu of reinstatement, separation pay equal to one month pay for every year of service and ordering PAL to pay attorney’s fees equivalent to 10 percent of the total monetary award.
The SC ruled that it was grave error to have simply assumed that PAL was in serious financial distress without requiring the presentation of competent proofs. Further, PAL was found to have implemented the retrenchment program in an arbitrary manner and in evident bad faith when “Plan 14” was abandoned. No satisfactory explanation was given as to the change of plan despite the fact that thousands of employees who had long been working for PAL had lost their jobs only for some to be recalled but assigned to lower positions or worse considered as new hires. The SC further disclosed that PAL did not use fair and reasonable criteria in ascertaining who would be retrenched. PAL only assessed the 1997 overall performance, virtually doing away with the concepts of seniority, past efficiency and loyalty. The quitclaims were, likewise, nullified as the consent of the retrenched employees was vitiated by fraud or mistake. Volition was clouded by the retrenchment program. No Unfair Labor Practice was found to have been committed.
PAL filed a motion for reconsideration, which was denied by the Supreme Court on October 2, 2009. Acting on respondents’ motion for reconsideration, the Supreme Court issued a Resolution on October 2, 2009, the dispositive portion of which reads:
“WHEREFORE, for lack of merit, the Motion for Reconsideration [of PAL] is hereby DENIED with FINALITY. The assailed decision dated July 22, 2008, is AFFIRMED with MODIFICATION in that the award of attorney’s fees and expenses of litigation is reduced to P2,000,000. The case is hereby REMANDED to the labor arbiter solely for the purpose of computing the exact amount of the award pursuant to the guidelines herein stated. No further pleadings will be entertained.”
On November 3, 2009, PAL asked for leave of court to file an MR of the October 2, 2009, Resolution and second MR of the July 22, 2008, Decision. The Supreme Court (Second Division) resolved to deny with finality PAL’s second MR of its July 22, 2008, Decision:
“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. 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 that this Court has denied them justice.”
Despite the finality of the Supreme Court Resolution, PAL’s new counsel, Atty. Estelito Mendoza wrote dour exparte letters dated September 13, 16, 20 and 22, 2011, addressed to the Clerk of Court of the Supreme Court.
Interestingly, through the letters of Atty. Estelito Mendoza the September 7, 2011, Resolution of the Second Division was effectively recalled on March 13, 2012, by invoking the Internal Rules of the Supreme Court. The recall of the said Resolution was brought about by the alleged jurisdictional conflict in the raffling of the case. The Honorable Court highlighted the importance of referring the case to the remaining members who actually participated in the deliberations of the September 7, 2011, Resolution, particularly Justice Lucas Bersamin and Justice Diosdado Peralta, being the ones who intimately know the facts and merits of the case. Thus, the Honorable Court proceeded to void all of its previous rulings and rendered a new one, 21 years later, which reversed each and every decision it rendered in the past.
What baffles the mind is the unbelievable adherence of the Honorable Supreme Court to its internal rules, allowing itself to be subjugated in the shackles of mere technicalities, and choosing to condone the justice that is its foremost duty to endow to whom it is rightfully due. It elected to set to naught all proceedings conducted over the past 20 years, the resources exhausted especially by the employees who battled through for their rights, and killed their hopes of finally breathing in legal victory.
Fasap has not given up. After 20 years of suffering, it will continue to fight the good fight. And with us entering as legal counsel, Fasap will eventually win.