Gov’t lawyers defend PAL move on CBA

Business World
Thursday, December 17, 1998
Cecille M. Santillan

Government lawyers yesterday asked the Supreme Court to junk the petition of the Philippine Airlines Employees Association (PALEA) seeking to invalidate the airline's 10-year moratorium on new collective bargaining agreements (CBA) with its rank-and-file workers.

In a 34-page comment, the Office of the Solicitor General (OSG) pleaded the High Tribunal to uphold the stockholders' plan earlier approved by Philippine Airlines' (PAL) board of the directors and the majority of PALEA’s members in exchange for the CBA suspension.

The plan had the employees and management agreeing to suspend PAL's existing CBA for a 20% ownership of the firm and one-fourth of the PAL board seats.

"There is no indication in the records that the agreement was concluded under duress...Since the agreement was forged voluntarily by informed parties, the binding effect thereof is unimpaired,” said Solicitor General Ricardo Galvez, who prepared the pleading.

The case was filed at the instance of some PALEA officials who claim to represent the 8,000-strong labor union.

Gerardo Rivera, Alfred Ramiso, Ambrosio Palad, Dennis Aranas, David Sorima Jr., Jorge dela Ros,a and lsagani Aldea averred the workers' constitutional right of self-organization was emasculated in the guise of industrial stability and predictability.

Aside from PAL and its chairman Lucio Tan, they sued Finance Secretary Edgard Espiritu and Labor Secretary Bienvenido Laguesma, who both led the PAL Inter-Agency Task Force President Joseph Estrada created to resolve the labor dispute.

Also impleaded were other PALEA officials who were accused of "selling out” the union to the management.

The case stemmed from the PAL pilots strike last June over a controversy in the interpretation of the firm's 1967 retirement plan, which was incorporated in the employees’ CBA. The three-week strike, which crippled PAL's operation, led the airline to retrench some 3,000 employees.

The following month, PAL’s ground crew and sales force union went on strike due to the alleged unlawful retrenchment. The strike ended four days later when PAL and PALEA executed a compromise agreement, where both parties agreed to reduce employees and payment of separation benefits.

In August, the Securities and Exchange Commission (SEC) placed the airline under interim receivership while PAL prepares its rehabilitation plan.

The Chief Executive issued Administrative Order No. 16 on August 28, creating an interagency task force to solve the problem which "affected the national interest.”

PALEA later ratified the stockholders' plan through a referendum, only to take it back five days later.

PAL promptly decided to close the financially troubled company prompting PALEA to reconsider its position and express its amenability to the CBA suspension.

After the agreement was sealed, the PALEA minority questioned the legality of the compromise at the Supreme Court.

In its plea, Solicitor General Ricardo Galvez said contrary to the petitioners' claim, the PAL-PALEA agreement does not constitute a violation of the PAL workers’ right to bargain collectively under the Labor Code.

“The agreement to suspend the current PAL-PALEA CBA was a result of collective bargaining negotiations made necessary by the economic situation of the company...The agreement was not made in derogation of the economic and other provisions of the existing CBA, nor does not diminish the freedom of the parties to contract,” Mr. Galvez said.

He insisted the stockholders' plan ceding to the employees a part of the company will enable the employees to participate in the decision making of the PAL board of directors. The plan, he explained, even gave PAL's rank-and-file employees "a direct fiscalizing role in the corporate affairs” of PAL, a privilege which is not available to them under a conventional CBA.

The OSG said the implementation of Mr. Estrada's order creating the task force is legitimate as it "protects the public interest in the continued delivery by a firm of it vital public service indispensable to national interest.”

The Solicitor General added PALEA erred in bringing the case to the High Court. He insisted neither Mr. Espiritu nor Mr. Laguesma abused his power in asking PALEA to accept PAL's terms.

Under Court rules, a case may only be lodged against government officials if they appear to have abused their discretion in making official decisions.

"In the course of the talks between PAL and PALEA, public respondents had essentially played two regular roles: as mediators of the dispute and coordinators of the referendum... Public respondents are not even signatories to the agreement as the parties themselves determined (the terms of the) negotiations behind closed doors”, said Mr. Galvez.

The OSG even asked the High Tribunal to take the case as an exception and be extra liberal in deciding the controversy.

"The instant case should be examined from the larger perspective of the common good...in relation to the present economic condition of the country.  As the business of PAL as a common carrier is undoubtedly imbued with national Interest, the nation cannot afford to lose this vital institution especially in the light of the current regional economic crisis,” he said.@