G.R. No. 88210 ; January 23, 1991
PHILIPPINE AIRLINES, INC., petitioner, vs. SECRETARY OF LABOR AND EMPLOYMENT, FRANKLIN M. DRILON, and PHILIPPINE AIRLINES EMPLOYEES ASSOCIATION (PALEA), respondents.

FACTS

The Philippine Airlines Employees Association (PALEA) filed a notice of strike on December 29, 1988, citing bargaining deadlock and unfair labor practice over unresolved payscale adjustments under the existing Collective Bargaining Agreement (CBA). The National Conciliation and Mediation Board (NCMB) treated the case as a preventive mediation matter, advising PALEA that the issues were not valid grounds for a lawful strike. Despite this, PALEA proceeded with a strike vote. Anticipating a work stoppage, Philippine Airlines (PAL) petitioned the Secretary of Labor on January 13, 1989, to assume jurisdiction over the dispute, emphasizing PAL’s status as the national flag carrier and the severe economic impact of a strike. The Secretary failed to act on the petition for seven days.
On January 20, 1989, PALEA declared a strike, paralyzing PAL’s operations nationwide. Only late on January 21, 1989, did Secretary Franklin Drilon issue an order assuming jurisdiction, directing the strikers to return to work and management to accept them. The order also resolved the payscale issues by awarding monetary benefits to the employees and, critically, prohibited PAL from taking any disciplinary or retaliatory action against the striking union officers and members.

ISSUE

Whether the Secretary of Labor acted with grave abuse of discretion in ordering PAL to reinstate the striking employees and in restraining PAL from taking disciplinary action against them.

RULING

Yes. The Supreme Court ruled that the Secretary of Labor committed grave abuse of discretion. The strike was illegal from its inception. At the time it was declared, the labor dispute was still under preventive mediation with the NCMB. Under the Labor Code, no strike may be lawfully staged while mediation or conciliation proceedings are ongoing. The Secretary’s own seven-day inaction on PAL’s urgent petition for assumption of jurisdiction underscored the prematurity and illegality of the strike.
The legal logic is clear under Article 264 of the Labor Code, which explicitly states that any union officer who knowingly participates in an illegal strike may be declared to have lost employment status. The Secretary’s assumption of jurisdiction under Article 263(g) grants him authority to enjoin the strike itself and order a return-to-work to restore industrial peace. However, this power does not extend to stripping the employer of its right to initiate disciplinary proceedings against employees who engaged in an illegal strike. The prohibition against PAL taking action constituted an unlawful deprivation of property rights and a denial of due process, as it barred PAL from seeking redress for the significant damages caused by the illegal work stoppage. Consequently, the Court nullified the portions of the Secretary’s orders that validated the strike and restrained disciplinary action, while affirming the awarded monetary benefits.