G.R. No. 263887 - Philippine Primark Properties, Inc. vs. China Banking Corporation Trust and Assets Management Group

Philippine Airlines, Inc. (PAL) unilaterally retired Captain Albino Collantes under Section 2, Article VII of the 1967 PAL-ALPAP Retirement Plan.
Airline Pilots Association of the Philippines (ALPAP), as the exclusive bargaining representative of PAL’s commercial airline pilots, contested this retirement as an act of illegal dismissal and union busting.

ALPAP filed a Notice of Strike with the Department of Labor and Employment (DOLE) based on their contention.
Under Article 263 (g) of the Labor Code, the Secretary of Labor and Employment assumed jurisdiction over the labor dispute.
On June 13, 1998, the Secretary issued an order which:

Upheld PAL’s action to retire Captain Collantes as a valid exercise of its option under the retirement plan.
Directed that the computation of retirement benefits should follow Article 287 of the Labor Code (as amended by Republic Act No. 7641) instead of Section 2 of the PAL-ALPAP Retirement Plan.
Imposed an added requirement that PAL must consult the pilot concerned prior to the implementation of his retirement.

The 1967 Retirement Plan (incorporated in the PAL-ALPAP Collective Bargaining Agreement) as sustained, with the modification regarding consultation.
Other provisions regarding the Wet Lease Agreement and union dues were clarified without prejudice to voluntary settlement of the dispute.

PAL filed a petition for certiorari with a prayer for injunction and temporary restraining order with the Court of Appeals on September 24, 1999.
The Court of Appeals, in its decisions dated March 2, 2000, and June 19, 2000, denied both the petition and the subsequent motion for reconsideration by PAL.
PAL subsequently elevated the matter to the Supreme Court seeking review of the CA decisions and the administrative order.

PAL argued that issues not raised or fully heard during earlier proceedings, such as:

The increased retirement benefits under the PAL-ALPAP Retirement Plan were not part of the subject matter in NCMB-NCR.
A judgment adjudicating matters outside the issues raised amounted to a denial of due process.

The contracting parties have the exclusive right to determine the terms of their Collective Bargaining Agreement (CBA).
The Secretary of Labor and Employment lacked the authority to amend the CBA and the PAL-ALPAP Retirement Plan without violating the non-impairment of contracts principle.
It would be legally and iniquitously incorrect to compel PAL to compute retirement pay under Article 287 of the Labor Code, which provided a lower benefit compared to the negotiated retirement plans.
Imposing the requirement to consult the pilot prior to retirement effectively amended the agreed retirement plan.

Whether the question of increasing retirement pay under Section 2, Article VII of the PAL-ALPAP Retirement Plan was properly before the tribunal in the case.
Whether a judgment that adjudicates issues or aspects not raised by the parties violates due process.
Whether the exclusive right to determine the provisions of a Collective Bargaining Agreement is vested solely in the contracting parties.
Whether the Secretary of Labor and Employment’s action of effectively amending the CBA and the retirement plan through his order violates the prohibition against the impairment of contracts.
Whether compelling PAL to pay retirement benefits computed under Article 287 of the Labor Code, which renders lower benefits than those under the negotiated retirement plans, is legally tenable.
Whether the added requirement for PAL to consult the pilot before executing the retirement constitutes an impermissible alteration of the parties’ agreed retirement scheme.