G.R. No. 146408 - Philippine Airlines, Inc. vs. Ligan

This case involves a labor dispute between Philippine Airlines, Inc. (petitioner) and a group of employees/respondents, namely Enrique Ligan, Emelito Soco, Allan Panque, Jolito Oliveros, Richard Goncer, Nonilon Pilapil, Aquilino Ybanez, Bernabe Sandoval, Ruel Goncer, Virgilio P. Campos, Jr., Arthur M. Capin, Ramel Bernardes, Lorenzo Butanas, Benson Carisusa, Jeffrey Llenes, Roque Pilapil, Antonio M. Pareja, Clemente R. Lumayno, Nelson Tampus, Rolando Tunacao, Cherie Alegres, Benedicto Auxtero, Eduardo Magdaraog, Nelson M. Dulce, and Allan Bentuzal.
The dispute centers on the determination of the employment status of the respondents, their entitlement to wages and benefits, and whether the proper remedy is reinstatement with full backwages or payment of separation pay, particularly in light of separate claims of illegal dismissal.

The petitioner's Motion for Reconsideration and the respondents’ Motion for Clarification and/or Reconsideration were filed in relation to the Court’s February 29, 2008 Decision, which acknowledged issues that had not been previously raised.
The Court’s Decision, originally affirming with modification the appellate court’s September 29, 2000 ruling, directed that the petitioner accept the respondents as regular employees and pay them the corresponding wages and benefits; it also addressed backwages and separation pay for respondent Benedicto Auxtero.

The Court ruled that Synergy Services Corporation, acting as a labor-only contractor for Philippine Airlines, did not constitute an independent employer. Instead, the respondents were deemed regular employees of Philippine Airlines.
Accordingly, respondents were granted security of tenure and thus could only be terminated for just or authorized cause and with observance of procedural due process.

The proceedings were modified after reviewing additional information regarding two respondents:

Roque Pilapil – Initially recognized as a regular employee, his claim was affected by the record showing prior termination for submitting falsified academic credentials. His complaint for illegal dismissal had been dismissed and eventually declared terminated upon failure to appeal.
Benedicto Auxtero – He had previously secured a favorable judgment from this Court in a separate case, which was subsequently satisfied by the petitioner. Auxtero’s claim for reinstatement was effectively waived as a result.

The modifications rendered the claims for Pilapil and Auxtero as extinguished even before the decision was promulgated, although these issues were clarified by the Court.

The contention that respondents were employees of Synergy and not directly employed by Philippine Airlines.
A plea that reinstatement of respondents as regular employees would be iniquitous, compounded by alleged financial difficulties and an imbalance between workforce size and operational requirements.
The presentation of economic arguments asserting that financial losses and supervening events made compliance with the order impracticable.

That being declared regular employees by the Court entitled them to full benefits, including reinstatement accompanied by backwages.
A plea for attorney’s fees, though they later admitted the issue was not raised at earlier stages.
That the Court’s decision assumed the respondents were still employed, despite evidence that many had been terminated through retrenchment, with some pending separate illegal dismissal cases.

The Court remanded the case to the Labor Arbiter solely for the purpose of determining the monetary liabilities of the petitioner, as no sufficient data was available at the time to compute these amounts.
The Court expressly noted that its finding on the respondents’ regular employee status did not preclude the resolution of the issue of illegal dismissal, which remains pending in separate appellate proceedings.

Whether the respondents are legally deemed regular employees of Philippine Airlines even though they were initially engaged through Synergy Services Corporation.
Whether the respondents, having obtained security of tenure by being regularized, are entitled to the full range of wages and benefits as provided under the applicable Collective Bargaining Agreement.

Whether reinstatement with full backwages should be granted to the respondents, or whether alternative relief such as payment of salary differential and separation pay (in lieu of reinstatement) is appropriate.
How the claims of specific respondents, particularly those of Roque Pilapil and Benedicto Auxtero, are affected by their individual circumstances and prior related judgments.

Whether the petitioner’s claim of economic losses or financial woes, adduced as a basis for impossibility of compliance with the order to regularize, is sufficiently substantiated.
Whether such financial difficulties can legally justify the dismissal of the respondents’ regularization and benefit claims.

Whether the findings regarding regular employee status of the respondents have implications for pending illegal dismissal cases, especially in light of procedural rules governing reinstatement and backwages.
Whether the separate nature of illegal dismissal claims should affect the remedy granted in the present decision.