Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION

G.R. No. 88210 January 23, 1991
PHILIPPINE AIRLINES, INC., petitioner,
vs.
SECRETARY OF LAOR AN! E"PLOY"ENT, FRAN#LIN ". !RILON, an$
PHILIPPINE AIRLINES E"PLOYEES ASSOCIATION %PALEA&, respondents.
Ricardo V. Puno, Jr., Caesar R. Dulay, Solon, R. Garcia, Rene B. Gorospe &
Bienvenido T. Jamoralinz, Jr. for peiioner.
!.".#. Cruz, !nero & #ssociaes for P#$!#.

GRI'O(A)*INO, J.:p
In issue in this case is the authority of the Secretary of Labor to order the petitioner
Philippine Airlines, Inc. to reinstate officers and members of the union who participated
in an illegal strike and to desist from taking any disciplinary or retaliatory action against
them.
The !"#$!"! %ollective &argaining Agreement '%&A( between the Philippine Airlines
'PAL( and the Philippine Airlines )mployees Association 'PAL)A( provided for pay
increases for various categories of employees in Section , Article * entitled +PA,
S%AL).+ &esides the pay increases, the %&A also provided for the formation of a
PAL-PAL)A Payscale Panel .
'f( . . . to undertake the study, review, correction, updating, complete overhaul, re$
classification or re$grouping of positions as may be re/uired of the payscale and position
classification to evolve updated payscales as soon as possible. 'p. 0#, Rollo.(
and that
'iii( . . . the Payscale Panel shall e1ert all reasonable efforts to complete its studies so as
to evolve new updated payscale and position classification by 2anuary 3, !"", 'p. 0#,
Rollo.(
As agreed by the parties, the PAL-PAL)A Payscale Panel was formed in due time and
went to work. &y 2uly, !"", the 2ob )valuation %ommittee of the panel had finished the
reconciliation and initial evaluation of positions in all departments within PAL.
In 4ovember, !"", the PAL)A members of the panel proposed the amount of P5P
6,67! as the minimum salary entry level for the lowest 8ob classification '2ob 9rade (,
while the PAL panel members proposed P5P :,63 and a P5P :33 across$the$board
increase for employees who could not avail of the payscale ad8ustments. The panel
conferences continued but there was no meeting of minds. PAL)A would not accept
less than the amount it proposed, while the PAL panel members alleged that they had
no authority to offer more.
PAL)A accused PAL of bargaining in bad faith.
;n <ecember :!, !"", PAL)A filed with the 4ational %onciliation and =ediation &oard
'4%=&( a notice of strike on account of> '( bargaining deadlock? and ':( unfair labor
practice by bargaining in bad faith.
;n 2anuary 6, !"!, PAL filed with the 4%=& a motion to dismiss PAL)A@s notice of
strike for being premature as the issues raised were not strikeable since there still
e1isted a PAL$PAL)A %&A which would not yet e1pire until September 63, !"! or with
nine '!( more months to run.
<uring the conciliation meeting, the following evolved as the real issues>
. determination of the minimum entry rate
:. wage ad8ustment due to payscale study
6. retroactive pay as a conse/uence of the upgraded payscale or goodwill bonus. 'p. 6",
Rollo.(
;n 2anuary #, !"!, Attorney 2esus %. Sebastian, 4%=&$4%A )1ecutive
%onciliator-=ediator, advised PAL)A president, 9eorge Pulido, that the issues raised in
the notice of strike were +appropriate only for prevenive mediaion,% hence, not valid
grounds for a lawful strike. 5owever, when subse/uently a representative of 4%=&
supervised the conduct of PAL)A@S strike vote, PAL@s counsel was baffled for it was
inconsistent with the 4%=& order treating the strike notice as prevenive mediaion
case "o. P&'()'((*'+,. PAL@s counsel sought clarification from 4%=&@S Sebastian. 5e
assured PAL that the 4%=& representatives could not certify the strike vote.
;n 2anuary :, !"!, PAL)A submitted the strike vote results to the 4%=&. The ne1t
day, 2anuary 6, !"!, PAL petitioned Secretary of Labor Branklin <rilon to immediately
assume 8urisdiction over the dispute in order to avert the impending strike. The reasons
for PAL@s petition were, as stated by the Secretary himself>
The Philippine Airlines, Inc. is a corporation where the government has substantial e/uity
holding. It is engaged in an industry imbued with national interest. It is the flag carrier of
the Aepublic of the Philippines. &eing the sole airline that services domestic routes, a
prolonged work stoppage will push back the national economic recovery program of the
government and conse/uently result to enormous damage to the economy of the country.
5undreds of thousands of people directly and indirectly dependent on the continued
operations of the firm including the huge work force of the company will likewise be
pre8udiced. The viability of the firm will also be endangered. These considerations have in
the past guided this ;ffice in consistently e1ercising its powers under Article :#6'g( of the
Labor %ode, as amended, in handling labor disputes in the %ompany. The current
situation is no e1ception to this rule. This ;ffice is of the view that the present work
stoppage at Philippine Airlines, Inc. will adversely affect the national interest. Thus, this
;ffice hereby assumes 8urisdiction over the instant dispute. 'pp. 6"$6!, Rollo.(
Ine1plicably, the Secretary failed to act promptly on PAL@s petition for his assumption of
8urisdiction.
Seven '0( days passed with no reaction from Secretary <rilon. ;n 2anuary :3, !"!,
PAL)A declared a strike paralyCing PAL@s entire operations the ne1t day, 2anuary :,
!"!, and resulting in serious inconvenience to thousands of passengers who were
stranded in 76 airports throughout the country, and the loss of millions of pesos in
unearned revenue for PAL. Late in the day, at 0>D3 P.=., Secretary <rilon issued an
order assuming 8urisdiction over the labor dispute which had already e1ploded into a
full$blown strike, ordering the strikers to lift their pickets and return to work, directing
management to accept all returning employees, and resolving the issues sub8ect of the
strike, by awarding the following monetary benefits to the strikers, while prohibiting the
company from taking retaliatory action against them>
. . . to resolve the impasse between the herein parties, this ;ffice finds the following
award 8ust and reasonable>
. As far as the issue of minimum entry level is concerned, the company is directed to
ad8ust the same to P:,D33.33 from its present level effective 2anuary , !"!.
:. The company is ordered to grant the amount of P6.6 million per month to cover across$
the$board increases of covered regular employees sub8ect to the distribution of the union
as embodied in their proposed scheme but in no instance should the lowest ad8ustment
be less than P633.33. In line with this, the scheme proposed by the union and submitted
to 4%=& on 2anuary :3,!"! is herein adopted.
It is understood, however, that in items and : above, the amount which is higher should
be granted.
6. A goodwill bonus in the amount of P6,333.33 to be paid in four e/ual pay period
installments beginning Bebruary D and up to =arch 6, !"! is hereby awarded. 'p. 6!,
Rollo.(
<eclaring the strike valid, the Secretary stated>
)1cept for the fact that the Enion@s notice of strike was treated as a preventive mediation
case 'at the instance of 4%=&(, it should be noted that -e .nion complied /i- all -e
re0uiremens for a valid sri1e. It observed the cooling$off periods re/uired and submitted
the necessary strike vote. If ever there is any ground to discipline the Enion officers for
non$compliance with the law, it would be based on the +non$filing+ of the strike notice,
which +non$filing+ was a conse/uence of the 4%=&@S efforts to create the appropriate
atmosphere to resolve the dispute by treating the notice of strike as a preventive
mediation case. ;therwise put, -e sri1e /ould -ave 2een le3al in all respecs -ad no
-e "C&B, in is 3ood fai- effor o sele -e dispue, reaed -e noice of sri1e as a
case for prevenive mediaion. Ender these circumstances, and in the interest of
industrial peace and the promotion of the concept of preventive mediation, -e paries are
direced o desis from commiin3 any realiaory ac as a resul of -e /or1 soppa3e.
The E4I;4, however, is hereby warned that in the future this office will not tolerate such
conduct and will apply the full force of the law. 'pp. 6$7, Rollo.(
The petitioner filed a motion for reconsideration. The Secretary denied it in a minute
resolution on =ay ", !"! or three months later.
In this petition for review, PAL avers that the Secretary of Labor gravely abused his
discretion amounting to e1cess or lack of 8urisdiction>
. in ruling on the legality of the strike?
:. in directing PAL to desist from taking retaliatory action against the officers and
members of the Enion responsible for the illegal strike? and
6. in failing to seasonably e1ercise his authority to avert the illegal strike and protect the
rights and interests of PAL whose business is affected with public interest.
Ender Art. :#6 of the Labor %ode, the Labor Secretary@s authority to resolve a labor
dispute within 63 days from the date of assumption of 8urisdiction, encompasses only
the issues in the dispute, no the legality or illegality of any strike that may have been
resorted to in the meantine '&inamira vs. ;gan$;ccena, 7" S%AA #00, #"D F!"0G(.
Indeed, as found by the Labor Secretary in his ;rder of 2anuary :, !"!, the only
issues involved in the dispute were>
. determination of the minimum entry rate
:. wage ad8ustment due to payscale study
6. retroactive pay as a conse/uence of the upgraded payscale or goodwill bonus.
The legality or illegality of the strike was not submitted to the Secretary of Labor for
resolution.
The 8urisdiction to decide the legality of strikes and lock$outs is vested in Labor Arbiters,
not in the Secretary of Labor. Art. :0, par. a, subpar. D of the Labor %ode provides>
Art. :0. 2urisdiction of Labor Arbiters and the %ommission.
'a( T-e $a2or #r2iers s-all -ave -e ori3inal and e4clusive 5urisdicion o -ear and
decide within thirty '63( working days after submission of the case by the parties for
decision, the following cases involving all workers, whether agricultural or non$
agricultural.
111 111 111
D. %ases arising from any violation of Article :#D of this code, including 0uesions
involvin3 -e le3aliy of sri1es and loc1'ous. ')mphasis supplied.(
In ruling on the legality of the PAL)A strike, the Secretary of Labor acted without or in
e1cess of his 8urisdiction.
There is merit in PAL@s contention that the Labor Secretary erred in declaring the strike
valid and in prohibiting PAL from taking retaliatory or disciplinary action against the
strikers for the damages suffered by the Airline as a result of the illegal work stoppage.
PAL)A@s strike on 2anuary :3, !"! was illegal for three '6( reasons>
. It was premature for there was an e1isting %&A which still had nine '!(
months to run, i.e., up to September 63, !"!. The law e1pressly provides
that neither party to a collective bargaining agreement shall terminate nor
modify such agreement during its lifetime. Hhile either party can serve a
written notice to terminate or modify the agreement at least si1ty '#3( days
prior to its e1piration date 'known as the +freedom period+( it shall
nevertheless be the duty of both parties to keep the saus 0uo and to
continue in full force and effect the terms and conditions of the e1isting
agreement during the freedom period and-or until a new agreement is
reached by them 'Art. :D6, Labor %ode(.
:. It violated the no$strike provision of the %&A, to wit>
The Association agrees that -ere s-all 2e no sri1es, walk outs,
stoppage, or slowdown of work, or any other form of interference with
any of the operations of the %ompany during the period 2e/een -e
si3nin3 of -e #3reemen up o Sepem2er 6(, ),+,. ')mphasis
supplied, p$", Rollo.(
6. The 4%=& had declared the notice of strike as +appropriate for
preventive mediation.+ The effect of that declaration 'which PAL)A did not
ask to be reconsidered or set aside( was to drop the case from the docket
of notice of strikes, as provided in Aule 7 of the 4%=& Aules, as if there
was no notice of strike. <uring the pendency of preventive mediation
proceedings no strike could be legally declared. The Secretary must have
thought so too, that is why he failed to act, for a period of seven '0( days,
on PAL@s petition for him to assume 8urisdiction over the labor dispute. The
strike which the union mounted, while preventive mediation proceedings
were ongoing, was aptly described by the petitioner as +an ambush+ 'p. :,
Rollo(.
Since the strike was illegal, the company has a right to take disciplinary action against
the union officers who participated in it, and against any union members who committed
illegal acts during the strike, Art. :#7 of the Labor %ode provides>
Art. :#7. Prohibited activities... . .
111 111 111
Any worker whose employment has been terminated as a conse/uence of an unlawful
lockout shall be entitled to reinstatement with full back wages. #ny union officer /-o
1no/in3ly paricipaes in an ille3al sri1e and any /or1er or union officer /-o 1no/in3ly
paricipaes in -e commission of ille3al acs durin3 a sri1e may 2e declared o -ave los
-is employmen saus> Provided, That mere participation of a worker in a lawful strike
shall not constitute sufficient ground for termination of his employment, even if a
replacement had been hired by the employer during such lawful strike. ')mphasis
supplied.(
The Labor Secretary e1ceeded his 8urisdiction when he restrained PAL from taking
disciplinary action against its guilty employees, for, under Art. :#6 of the Labor %ode, all
that the Secretary may en8oin is the holding of the strike, but not the company@s right to
take action against union officers who participated in the illegal strike and committed
illegal acts. The prohibition which the Secretary issued to PAL constitutes an unlawful
deprivation of property and denial of due process for it prevents PAL from seeking
redress for the huge property losses that it suffered as a result of the union@s illegal
mass action.
The Secretary may have realiCed that he was partly to blame for PAL@s damages
because of his failure to act promptly and use his authority to avert the illegal strike
under Article :#6'g( of the Labor %ode.
4evertheless, the Secretary@s delay does not e1cuse the reckless and irresponsible
action of the union in declaring the illegal strike. The liability of the union for that is
primary and e1clusive.
H5)A)B;A), the petition for ceriorari is granted. The orders dated 2anuary :, !"!
and =ay ", !"! of the Secretary of Labor in 4%=& 4%A %ase 4o. P=$3$330$"! are
set aside and nullified insofar as the said orders declare valid the PAL)A strike of
2anuary :3$:, !"! and restrain the petitioner from taking appropriate legal action
against PAL)A@s officers who led the illegal strike, and any union members who may
have committed illegal acts during said strike. The monetary benefits awarded to the
union in the said orders are, however, affirmed. %osts against respondent PAL)A.
S; ;A<)A)<.
"arvasa, Cruz, Gancayco and &edialdea, JJ., concur.
The Lawphil Pro8ect $ Arellano Law Boundation