G.R. No. L-27378 March 31, 1976
PHILIPPINE AIR LINES, INC., petitioner, vs. PHILIPPINE AIR LINES EMPLOYEES ASSOCIATION (PALEA) and the COURT OF INDUSTRIAL RELATIONS, respondents.

FACTS

The case originated from a petition filed by PALEA with the Court of Industrial Relations (CIR) seeking to compel Philippine Air Lines (PAL) to renew trans-Pacific plane tickets for Mr. and Mrs. Paul Holganza, Sr. The tickets, issued in 1964 as part of Holganza’s earned trip pass privilege under the PAL-PALEA collective bargaining agreement (CBA), expired unused on March 9, 1965. Holganza, a union official, could not use the tickets because he had to attend to a strike declared by PALEA on January 25, 1965. This petition was an incident to a main case (No. 43-IPA[6]) where PAL sought to declare that strike illegal. In a Partial Decision, the CIR directed certain striking employees to return to work but ordered union officials, including Holganza, not to return pending the main case’s final resolution.
PAL opposed the renewal of the tickets, arguing that under company policy and the CBA, unused trip passes are forfeited. It specifically invoked Section 4(e) of Article XVI of the CBA, which states that employees laid off for cause cease to enjoy trip pass privileges effective on the date of termination. PAL contended that the CIR’s order for Holganza not to return to work effectively placed him in a status akin to being laid off, thus forfeiting his privilege. The CIR, however, issued an order directing PAL to issue new tickets, which it upheld en banc, prompting PAL’s appeal to the Supreme Court.

ISSUE

The primary issues were: (1) Whether Holganza was entitled to the re-issuance of his trip pass tickets despite the CIR order barring his return to work pending the main case; and (2) Whether the CIR had jurisdiction over PALEA’s petition for enforcement of the CBA provision.

RULING

The Supreme Court denied PAL’s petition, affirming the CIR’s order. On the first issue, the Court held that the CIR’s directive for Holganza not to return to work did not equate to a termination for cause under the CBA. The order was a provisional measure to maintain the status quo pending final adjudication of the main unfair labor practice case. The Court emphasized that the language of the CBA was clear: forfeiture under Section 4(e) applied only upon actual termination for cause. Since Holganza’s employment had not been terminated by a final decision, his earned privilege remained intact. The non-cumulative nature of the trip pass, as argued by PAL, did not imply forfeiture but merely prevented its accumulation from year to year.
On the jurisdictional issue, the Court ruled that the CIR unquestionably had jurisdiction. Holganza’s petition was an incident of the main case (No. 43-IPA[6]), which was still pending before the CIR. As the tribunal with jurisdiction over the main dispute, it necessarily had authority over all ancillary matters. Furthermore, the Court reiterated that a refusal to comply with the terms of a collective bargaining agreement constitutes bargaining in bad faith and an unfair labor practice, a matter squarely within the jurisdiction of the industrial court. Therefore, the CIR acted within its authority in ordering PAL to fulfill its contractual obligation under the CBA.