G.R. No. L-21120 February 28, 1967
PHILIPPINE AIR LINES, INC., petitioner, vs. PHILIPPINE AIR LINES EMPLOYEES ASSOCIATION and COURT OF INDUSTRIAL RELATIONS, respondents.

FACTS

On May 4, 1950, Philippine Air Lines, Inc. (PAL) dismissed four employees who were members of the Philippine Air Lines Employees Association (PALEA). On July 13, 1954, the Court of Industrial Relations (CIR) ordered the reinstatement of these employees “to their former or equivalent position in the company, with back wages from the date of their dismissal to the date of their reinstatement, and without prejudice to their seniority or other rights and privileges.” This resolution was affirmed by the Supreme Court. The employees were reinstated on January 14, 1959, and received back wages, computed after deducting earnings from other employment during their lay-off. On November 10, 1960, PALEA moved for execution of the CIR resolution regarding “other rights and privileges,” specifically claiming: (1) Christmas bonus from 1950 to 1958; (2) accumulated sick leave; (3) transportation allowance during the lay-off period; and (4) accumulated free trip passes. The CIR granted the motion on October 8, 1962, except for the sick leave of two employees who had retired and the transportation allowance, which were denied. PAL appealed this order.

ISSUE

Whether the clause “without prejudice to their seniority or other rights and privileges” in the CIR’s reinstatement order entitles the dismissed employees to Christmas bonus, accumulated sick leave, transportation allowance, and free trip passes for the period of their lay-off.

RULING

The Supreme Court ruled that, except for the free trip passes, the employees are entitled to the claimed benefits for the lay-off period, subject to qualifications.
1. The clause “without prejudice to their seniority or other rights and privileges” must be interpreted in the context of the entire resolution, which intended to restore the employees to their status immediately prior to dismissal. The order treated them as if they had been working uninterruptedly during the lay-off period. Therefore, they are entitled to benefits that accrued during that time.
2. Christmas Bonus: The employees are entitled to the Christmas bonus paid by PAL from 1950 to 1958, as the regular payment of such bonus had become part of the employees’ compensation.
3. Sick Leave: The employees are entitled to accumulate sick leave for the lay-off period, but this accumulation cannot exceed 140 days as per the collective bargaining agreement. Furthermore, two employees who had retired were not entitled to sick leave privileges under the same agreement.
4. Transportation Allowance: The employees are entitled to transportation allowance for the lay-off period.
5. Free Trip Passes: The employees are NOT entitled to free trip passes for the lay-off period. These passes were not given automatically or as a matter of right; they required application and were subject to PAL’s approval.
The appealed CIR resolution was affirmed in all respects except for the denial of free trip passes.