PAL retrenchment win erodes SC’s credibility – Leonen

Lian Buan
'The actions of the majority of this Court en banc...creates an ominous cloud that will besmirch our legitimacy,' says Associate Justice Marvic Leonen

DISSENT. Supreme Court Associate Justice Marvic Leonen is one of the two dissenters in a controversial SC decision that declared the 1998 retrenchment of Philippine Airlines as valid. File photo by LeAnne Jazul/Rappler

MANILA, Philippines – The Supreme Court (SC) voted with a majority of 7 that the retrenchment of 5,000 workers of Philippine Airlines (PAL) in 1998 was valid.

One of the two dissenters was Associate Justice Marvic Leonen who said that the non-unanimous vote “erodes the reliability and credibility of this Court.”

This latest decision by the SC is a flip-flop from two previous decisions of its divisions in 2008 and 2009.

Leonen disagreed with the procedural and substantive decisions of the 7 majority, with Associate Justice Lucas Bersamin acting as ponente.

History of the case

Members of the  Flight Attendants and Stewards Association of the Philippines (FASAP) were among the 5,000 workers entrenched by PAL in 1998 in a supposed move to save the business from shutting down due to debt.

FASAP’s labor lawsuit against PAL went the long and arduous route: first the National Labor Relations Commission (NLRC), the Court of Appeals (CA), then the Supreme Court.

The case reached the SC in 2008 after the CA sided with PAL and declared the retrenchment valid.

The FASAP scored back-to-back victories in the SC courtesy of the special third division, which invalidated the retrenchment in a decision on July 22, 2008 and then again on October 2, 2009, when it denied PAL’s first motion for reconsideration.

PAL was then granted leave by the Court to again file motions for reconsideration; and it filed two, pertaining to the 2008 and 2009 decisions.

On September 7, 2011, the SC 2nd Division denied PAL’s 2nd motion for reconsideration pertaining to the July 22, 2008 decision.

High-profile lawyer Estelito Mendoza began sending letters to the SC on behalf of PAL and on October 4, 2011, the SC en banc recalled the September 7, 2011 resolution. (READ: TIMELINE: FASAP-PAL case)

Procedural prohibition?

For Leonen, the en banc should have never taken on the case after the special 3rd division affirmed the FASAP win on October 2, 2009.

“The judgment in this case attained finality on November 4, 2009 or 15 days from PAL’s receipt of the October 2, 2009 resolution denying the motion for reconsideration of the July 22, 2008 decision,” Leonen said in his dissenting opinion.

Leonen noted that Mendoza’s letters were not docketed as part of the main case, but were instead docketed as a separate administrative matter.

“It could not be another means to resurrect a case. To do so is highly irregular, suspect, and violative of due process of law. To mask this as being in the interest of justice is to mask its intention to rob labor of a case decided 3 times in its favor,” Leonen said.

Leonen said that what PAL did was, in effect, a 3rd motion for reconsideration which he called as “disrespect to us and our rules of procedure.”

Citing legal analogies, Leonen said that if the court must grant a 3rd motion for reconsideration, it must do so via a unanimous vote.

Leonen said that a unanimous vote on a 3rd motion would be hard to overturn, and thus would prevent further flip-flops, and would “shield this Court from parties who perceive themselves above the justice system.”

“The actions of the majority of this Court en banc..creates an ominous cloud that will besmirch our legitimacy. The majority has created an exception to our canonical rules on immutability of judgments. It is certainly not justice that this Court has done,” Leonen said.

Bersamin’s ponencia

Leonen and fellow dissenter Associate Justice Andres Reyes Jr lost to the ponencia of Bersamin which ruled that Mendoza’s legal recourse was procedurally allowed.

Bersamin said that the en banc took on the case because retired justice Arturo Brion, formerly of the ruling division, referred it to them. 

Bersamin said Leonen has a “narrow view” of the powers of the en banc.

This issue was cited by the impeachment prosecution against the late former Chief Justice Renato Corona in 2012. Corona was accused of accommodating Mendoza in allowing the revival of the case.

Then Senate president Juan Ponce Enrile did not allow the witness from PAL to take the witness stand in the impeachment court, saying that it was not alleged in the articles of impeachment.

Enrile and Mendoza, of course, have a relationship. Mendoza would come to represent Enrile in his pork barrel scam cases.

In August 2015, Bersamin’s ponencia won and freed Enrile on bail for the charge of plunder. Mendoza was Enrile’s lawyer.

In July 2016, Bersamin’s ponencia won and acquitted  former president Gloria Macapagal-Arroyo of plunder. Mendoza was Arroyo’s lawyer.

Bersamin was also the ponente in the decision that allowed the midnight appointment of Arroyo, with Mendoza among the petitioners. (READ: The ties between Lucas Bersamin and Estelito Mendoza)

Retrenchment valid

Bersamin reinstated the 2006 decision of the CA which ruled that the retrenchment was valid. Bersamin’s decision is based on the following grounds:

  1. PAL can retrench to avert more losses
  2. The Court can take judicial notice of PAL’s financial losses without requiring the presentation of its audited financial statements
  3. PAL retrenched in good faith because it met with labor groups to discuss with them the plan
  4. PAL used reusable criteria in selecting which employees to retrench
  5. The retrenched employees signed valid quit claims

Interesting to note is the voting in this case. In the past high-profile cases, you would see the constitutionalists always grouped together: Acting Chief Justice Antonio Carpio, Leonen and Associate Justice Benjamin Caguioa.

Sometimes, Associate Justices Estela Perlas-Bernabe and Francis Jardeleza would join them.

This time, Carpio and Jardeleza inhibited. Caguioa and Bernabe joined the majority. Their “groupmate” Chief Justice Maria Lourdes Sereno is on indefinite leave and did not vote.

In his separate concurring opinion, Caguioa said that there was substantive evidence that would show “that PAL had indeed been besieged by and suffered severe financial losses, which justify its resort to drastic cuts in personnel.” – Rappler.com

Lian Buan

Lian Buan covers justice and corruption for Rappler. She is interested in decisions, pleadings, audits, contracts, and other documents that establish a trail. If you have leads, email lian.buan@rappler.com or tweet @lianbuan.