PAN AMERICAN WORLD AIRWAYS, PETITIONER, VS. PAA EMPLOYEES’ ASSOCIATION (PTGWO) AND THE COURT OF INDUSTRIAL RELATIONS, RESPONDENTS.

This is an appeal by certiorari under Rule 44 of the Rules of Court
and section 6 of Republic Act 875 to review and secure a reversal of
part of a judgment rendered, by the Court of Industrial Relations in
case No. 30-IPA directing “the parties to negotiate on wages as
stipulated in the Agreemetn.”

On 17 March 1960, the petitioner corporation and the respondent
employees’ association entered into a collective bargaining agreement,
to take effect retroactively from 1 March 1960 to 1 March 1963. Article
6 (d) of the collective bargaining agreement involved in the controversy, reads as follows:

The monthly salaries established in Appendix A hereof, shall remain in effect during the life of this Agreement, provided, however,
that if during the term of this agreement, a law diminishing the value
of Philippine Currency is enacted “and” as a result thereof the Company
is granted the necessary authority to increase its rates, either party
may, upon written notice to the other, reopen this Agreement fop
negotiation of wage rates shown in Appendix A-l only. (Exhibit C-l).

On 8 June 1960, the president of the respondent association wrote
the petitioner corporation requesting for a re-negotiation on wage
rates in accordance with Article 6 paragraph B(d) of the collective bargaining agreement quoted in the preceding paragraph.

On 23 June 1960, in a letter signed by the petitioner’s airport
manager, James L. Ihlenfeldt, the petitioner corporation agreed to a
re-negotiation, as requested by the president of the respondent
association.

Sometime later, the parties started negotiations but no agreement
was reached as to wage increase. On 1 August 1960, the members of the
respondent association went on strike against the petitioner
corporation and on 3 August 1960, the dispute was certified by the
President of the Philippines to the Court of Industrial Relations and
docketed as Case No. 30-IPA.

On 4 August 1960, a “return to work agreement” was entered into by
the petitioner corporation and the respondent association and then the
parties submitted to the Court of Industrial Relations for decision the
following: (1) Whether the-six (6) employees of the respondent
association whose contracts with the petitioner corporation were
terminated are entitled to an additional termination pay or
compensation; and (2) Whether they are entitled to re-open the
agreement for negotiation on wage rates.

On 27 June 1960, the petitioner corporation issued a circular fixing
the basis for selling tickets in pesos at P3.20 to a dollar (Annex “1”
to Answer of respondent Association), Likewise, on 5 August 1960, the
Central Bank of the Philippines in a letter to the Chairman of the
Civil Aeronautics Board authorized the sale of airline tickets at P3.20
to a dollar plus 3% surcharge. (Annex “4” to Answer of respondent
Association). Later, on 12 September 1960, the Central Bank of the
Philippines reduced the free market exchange rate of the dollar to
P3.00 plus the normal 9% surcharge. (Annex “5” to Answer of respondent
Association).

On 22 November 1960, the Court of Industrial Relations rendered
judgment denying the claim of the six (6) employees of the association
and ordering the parties to negotiate on wages as stipulated in the
agreement.

On 28 November 1960, the petitioner corporation moved for a
reconsideration and setting aside of that part of the judgment ordering
“the parties to negotiate on wages as stipulated in the Agreement” and
on 7 December 1960 filed its arguments in support of its motion for
reconsideration.

On 14 December 1960, the Court of Industrial Relations sitting en
banc denied the motion for reconsideration. In a dissenting opinion by
the Honorable Amando C. Bugayong, he expressed the opinion that, rather
than to toss back the negotiation to the parties, in a case certified
to it by the President of the Philippines, the Court of Industrial
Relations should proceed to fix the wages in order to prevent further
labor dispute in industries indispensable to the national interest.

As stated at the beginning of this opinion, the petitioner Pan
American Airways appeals by certiorari from only that part of the
judgment directing the parties to negotiate on wage rates.

Petitioner contends that to entitle either of the parties to re-open
the collective bargaining agreement for negotiation on wage rates
during the term of the agreement,

a law diminishing the value of Philippine Currency
is enacted and as a result thereof the Company is granted the necessary
authority to increase its rates, * * *

and that as there had been no law passed by Congress diminishing the
value of the Philippine currency, the respondent court erred in finding
that the two conditions or requisites stipulated in article 6 (d)
of the collective bargaining agreement were present and in reopening
the said collective bargaining agreement for negotiation on wage rates.

The purchasing power or value of money or currency does not depend
upon, cannot come into being, be created or brought about by, a law
enacted by the legislative department of the Government. If by law or
treaty the rate of exchange between two currencies should be fixed or
stipulated, such law or treaty could not give the money or currency the
purchasing power or value fixed or stipulated but would bind the
Government enacting the law or the contracting parties to a treaty to
pay or supply the difference between the value fixed or stipulated and
the real value of the currency should the latter be lower than the
fixed or stipulated rate of exchange between the two currencies. The
result is that if the real value or actual purchasing power of money or
currency brought about by the export and import of goods or commodities
and services rendered should be lower than that fixed or stipulated,
the Government would have to pay or supply the difference by drawing
upon its reserve. To prevent depletion of its reserve the Government
could impose restrictions to discourage payment at the value fixed or
rate of exchange stipulated which would drain its reserve. So that when
the parties agreed to negotiate on wage rates during the term of the
agreement, should a law be passed diminishing the value of the
Philippine currency, they did not literally mean a law enacted by
Congress which, as already explained, would not really diminish the
purchasing power or value of the currency but would just confirm the
real value or actual purchasing power of the currency. R.A. No. 2609,
approved on 16 July 1959 and effective from the date until 31 December
1964, authorized the Central Bank “to establish a uniform margin of not
more than forty percent over the banks’ selling rates stipulated by the
Monetary Board under section 79 of R.A. 265,” and the Monetary Board to
“fix the margin of such rate as it may deem necessary to effectively
curtail any excessive demand upon the international reserve,” Under
that Act and during the life of the collective bargaining agreement,
the Central Bank Axed the rate of exchange between the peso and the
dollar at P3.20 to $1 and later at P3.00 to $1, and authorized the sale
of airline tickets at the rate of P3.20 to $1. The fixing of the rate
of exchange between the peso and the dollar and the authority to sell
airline tickets referred to amount to a law diminishing the value of
the currency. The adherence to the letter of the collective bargaining
agreement was not the intent of the contracting parties when they
entered into it. That such rigid adherence to the letter of the
collective bargaining agreement was not contemplated by the parties may
be inferred from the consent of the petitioner’s airport manager to
negotiate on wage rates.

The dissent of one of the judges of the Court of Industrial
Relations from the majority opinion is not devoid of legal foundation.
But the term of the agreement ended on 1 March 1963, so the questions
raised in this appeal have become moot.

The appeal by certiorari filled by the petitioner corporation is dismissed, without pronouncement as to costs.

Bengzon, C. J., Bautista Angelo, Labrador, Concepcion, Reyes, J. B. L., Barrera, Paredes, Dizon, Regala and Makalintal, JJ., concur.