PAL Workers Press Payment of P662M

The Philippine Journal
Saturday, September 5, 1998
NATION

THE rank and file union at Philippine Airlines has dealt the beleaguered airline yet another crushing blow with a demand for the immediate payment of P662 million awarded to 9,000 of its members by the Supreme Court arising from the company's decades-long miscomputation of the extra pay of its monthly-salaried workers.

Although the monetary grant was made by the High Tribunal over 22 years ago, affirming an even earlier ruling of the Court of Industrial Rela¬tions (CIR) dated Oct. 9, 1969, execu¬tion of the order had been delayed time and gain by appeals of both PAL and the PAL Employees’ Association over the method of implementation pre¬scribed by the National Labor Relations Commission.

PAL, however, had been unable to perfect its last appeal, failing, despite four years, to post the cash or surety bond required by law which, in the instant case, would have amounted to P661,931,776, plus P57,600,000 in liti¬gation costs, union service fees and attorney's fees, or a total of P7I9,531,776.

Through its legal counsel, VicenteT. Ocampo & Associates, the PALEA has asked the NLRC to compel PAL to pay now the salary differentials of 9,000 former and present PALEA members, who, in the words of the Supreme Court, had been "unduly robbed of legitimate income" through an erroneous method employed for years by the airline in computing their overtime, holiday, night work, day off, vacation and sick leave pay.

Through the same law offices of Vicente T. Ocampo and Associates, the union also filed its claims with the Securities and Exchange Commission (SEC) and its interim receivership committee currently drawing up rehabilitation plans for the troubled airline.

In filing PALEA’S claims with the SEC, Vicente T. Ocampo & Associates cited Article 110 of the Labor Code which states that “…in the event of bankruptcy or liquidation of an employer’s business, its workers shall enjoy their first preference as regards their wages and other monetary claims, any provisions of law to the contrary notwithstanding. Such unpaid wages and monetary claims shall be paid in full before claims of the government and other creditors may be paid.”

For years from its inception, PAL had computed the average daily wage of a monthly-salaried employee by di¬viding his annual pay with the number of calendar days in a year, or 365. His overtime, holiday, night work, day off, vacation and sick leave pay were then based on the average daily wage.

In 1969, the defunct CIR found this method erroneous and illegal, and set forth that to arrive at monthly-salaries workers' daily wage, the divisor of his annual salary should be the number of actual working days in a year, or 250. This ruling was upheld on appeal by the Supreme Court on March 31, 1976.

The differential pay now being de¬manded by PALEA to be settled imme¬diately by PAL covers only the period from Oct. 1, 1989, to Dec. 31, 1995, as stipulated by the NLRC. The union still has a pending claim for the period from March 31, 1981 to Sept. 30, 1989.

PAL h as already paid PALEA mem¬bers PI44 million representing differ¬ential pay from Jan 2 to Dec. 31, 1997. At present, the airlines is using the method of computation decreed by both the CIR and the Supreme Court.