IC okays release of P650-million collateral for PAL's retrenchment case in 1998.
THE Insurance Commission (IC) has authorized the release of the collateral security amounting to P650 million for the supersedeas bond posted by Philippine Airlines Inc. (PAL) before the National Labor Relations Commission (NLRC).
The supersedeas bond was posted by PAL when it assailed the February 2011 order of the Labor Arbiter granting the issuance of an Alias Writ of Execution and ordering PAL to pay a total of P650 million in monetary award in favor of the retrenched employees of PAL.
The supersedeas bond was secured by a cash collateral amounting to P650 million deposited in Allied Banking Corp. A supersedeas bond is a type of surety bond that a court requires from an appellant who wants to delay payment of a judgment until the appeal is over.
The issue stemmed from the illegal dismissal case filed by the Flight Attendants and Stewardess Association of the Philippines against PAL before the arbitration branch of the NLRC in 1998. The NLRC found PAL guilty of unfair labor practice and illegal dismissal, and ordered the reinstatement of PAL's retrenched employees.
Insurance Commissioner Dennis B. Funa said the IC authorized the release of the P650-million cash deposited in Allied Banking Corp. as a collateral security for the supersedeas bond filed by PAL before the NLRC.
'We have verified from the NLRC its November 2015 decision affirming the order of the Labor Arbiter canceling surety bond issued by Philippine Phoenix Surety and Insurance Inc. and releasing the collateral security posted for the said bond attained finality in February 2016. In fact, a corresponding entry of judgment was issued by NLRC in April 2016. In view of this, we have authorized the release of the collateral security posted for the said bond to PAL,' Funa said.
The supersedeas bond posted by PAL was issued by Philippine Phoenix Surety and Insurance Inc. which was placed under liquidation by the IC on May 4, 2015.
Under Section 6, Rule IV, of the 2011 NLRC Rules of Procedure, the effectivity of a cash or surety bond shall be from the date of posting, until the case is finally decided, resolved or terminated, or the award satisfied.
In a decision dated March 13, 2018, penned by Associate Justice Lucas Bersamin, the High Court ruled in favor of PAL's second motion for reconsideration and overturned its July 22, 2008, decision, which found PAL guilty of unlawful retrenchment and ordered the reinstatement of the retrenched cabin crew. The retrenchment happened in 1998, and the case reached the Supreme Court in 2008. The Lucio Tan-owned airline laid off 5,000 of its employees, including 1,400 cabin-crew personnel in line with its cost-cutting measure during the Asian financial crisis.