Earlier this week, the Supreme Court (SC) of the Philippines ordered national flag carrier Philippine Airlines (PAL) to reinstate about 1,400 cabin crew who were illegally laid off by the carrier in 1998. The cabin crew jobs were eliminated during the Asian financial crisis, a period when Philippine Airlines was undergoing financial difficulties and labor disputes that led the carrier to temporarily shut down operations. The court decision is seen as a clear victory for the Flight Attendants and Stewards Association of the Philippines (Fasap), which had filed suit against the carrier on behalf of the dismissed cabin crew.
According to an article about the court decision in the Manila Sun-Star, the Supreme Court "granted the petition filed by the Flight Attendants and Stewards Association of the Philippines (Fasap) seeking a reversal of the Court of Appeals (CA) decision upholding PAL's retrenchment program."
The SC sustained the findings of the labor arbiter that found PAL guilty of illegal dismissal and ordered the reinstatement of the dismissed employees, saying the airline failed to comply with certain standards established under the law.The court ruled that PAL acted illegally "because it failed to take into account each cabin attendant's respective service record, thereby disregarding seniority and loyalty in the evaluation of overall employee performance."
The high court said PAL failed to justify that the retrenchment is necessary and likely to prevent business losses; that the dismissal was done in good faith; and that it used reasonable criteria in ascertaining who would be dismissed and who would be retained among the employees, such as status, efficiency, seniority, physical fitness, age, and financial hardship for certain workers.
According to the SC, PAL initially decided to cut its fleet size to only 14 or "Plan 14," based on which plan, it retrenched more than 1,400 of its cabin crew personnel. However, PAL changed its mind and decided to retain 22 units of aircraft or "Plan 22" but has already retrenched more than what was necessary.
Such move, the court said, is "capricious and arbitrary" and in bad faith considering that more than 1,000 employees who had been working long with PAL lost their jobs, only to be recalled but assigned to lower positions.
The Sun-Star reported that, under the terms of the court decision, PAL is "directed to pay the dismissed employees their full back wages, inclusive of allowances and other benefits computed from the time of their separation up to the time of the actual reinstatement. When reinstatement is no longer feasible, the court ordered PAL to pay the back wages, in lieu of the reinstatement, and separation pay equal to one month's pay for every year of service."