Philippine Airlines, Inc. vs.
Philippine Airlines Employees Association
Employee, 218 (f)
PAL v. PALEA, 19 SCRA 483 (87)
Feb 28, 1967 G.R. No. L-21120 CONCEPCION, C.J.
Recit Ready Synopsis
The case involves a dispute between Philippine Air Lines (PAL) and the Philippine Air Lines Employees
Association (PALEA) over the reinstatement of wrongfully dismissed employees and their entitlement to back
wages, Christmas bonuses, transportation allowance, sick leave privileges, and accumulated free trip passes.
FACTS
The case of Philippine Air Lines, Inc. v. Philippine Air Lines Employees Association involves a dispute between
Philippine Air Lines (PAL) and the Philippine Air Lines Employees Association (PALEA) over the reinstatement
of wrongfully dismissed employees and their entitlement to back wages, Christmas bonuses, transportation
allowance, sick leave privileges, and accumulated free trip passes.
The case was decided by the Court of Industrial Relations (CIR) and the Supreme Court.
On May 4, 1950, PAL dismissed four employees who were members of PALEA. On July 13, 1954, the CIR en
banc ordered the reinstatement of the employees with back wages from the date of their dismissal to the date
of their reinstatement, without prejudice to their seniority or other rights and privileges.
This order was affirmed by the Supreme Court on October 31, 1958. On January 14, 1959, the employees
were reinstated and their back wages were paid to them. However, the employees objected to the deduction
made from their back wages and the CIR sustained their objection. This decision was later reversed by the
Supreme Court on July 26, 1960.
On November 10, 1960, PALEA moved for the execution of the CIR resolution of July 13, 1954, specifically
requesting the payment of Christmas bonuses from 1950 to 1958, accumulated sick leave, transportation
allowance during the layoff period, and accumulated free trip passes.
The CIR granted this motion, except for the sick leave of two employees and the transportation allowance.
PAL appealed this decision.
ISSUE/S (relevant to the syllabus)
Whether the employees are entitled to the Christmas bonuses, accumulated sick leave, transportation
allowance, and accumulated free trip passes.
RULING (include how the law was applied)
The ruling of the court is as follows: The employees are entitled to the Christmas bonuses, accumulated sick
leave, and transportation allowance.
The court interprets the CIR resolution of July 13, 1954, as intending to restore the employees to their status
immediately prior to their dismissal. Therefore, the employees are entitled to the Christmas bonus that PAL
had given to all its employees during the layoff period, as it has become part of their compensation. They are
also entitled to transportation allowance and sick leave privileges, subject to the qualifications in the collective
bargaining agreement between PAL and PALEA.
Thus, in Republic Steel Corporation vs. NLRB (114 F. 2d. 820), it was held that, under a decree of the Circuit
Court of Appeals and Order of the National Labor Relations Board directing the employer to reinstate the
striking employees without prejudice to their seniority or other rights or privileges, it was the intention of the
Board and Court to provide that, upon reinstatement the employees were to be treated in matters involving
seniority and continuity of employment as though they had not been absent from work, and hence the
reinstated employees were entitled to the benefits of the employer's vacation plan for the year in which they
were reinstated and subsequent years upon the basis of continuity of service computed as though they had
been actually at work during the entire period from the date of strike to the date of reinstatement.
The PAL's appeal as regards the free trip passes, is, however, well taken, for the employees had no absolute
right thereto, even if they had actually rendered services during the lay-off period. The free trip passes were
given, neither automatically, nor indiscriminately. The employees had to apply therefor and their applications
were subject to PAL's approval.
The ratio of the court's decision is that the CIR resolution intended to treat the employees as if they had not
been absent from work and had been continuously working during the layoff period. Therefore, they are
entitled to the benefits and privileges they would have received if they had not been dismissed. However, the
employees do not have an absolute right to accumulated free trip passes, as these privileges are subject to
PAL's approval.
DISPOSITIVE
WHEREFORE, except as to the free trip passes for the layoff period, which should not be
deemed included in the "rights and privileges" awarded in the resolution of July 13, 1954, and
subject to the qualification that the accumulated sick leave privileges cannot exceed 140 days,
the appealed resolution of October 8, 1962, is hereby affirmed in all other respects, without
special pronouncement as to costs..
