RAFAEL ENRIQUEZ AND VIRGILIO ECARMA, PETITIONERS, VS. THE HONORABLE RONALDO B. ZAMORA, THE HONORABLE BLAS F. OPLE, NATIONAL LABOR RELATIONS COMMISSION, ARBITER NESTOR LIM, PHILI…

Enriquez versus Zamora

The Case

This is a petition for certiorari and mandamus brought by pilots Rafael Enriquez and Virgilio Ecarma against the Secretary of Labor, the Presidential Assistant for Legal Affairs, the National Labor Relations Commission, the labor arbiter, and Philippine Air Lines. The pilots ask the Supreme Court to restore the seniority rights and privileges that Philippine Air Lines declared forfeited after they joined the mass protest retirement and resignation of the members of the Air Lines Pilot Association of the Philippines. The case matters because it settles two questions every labor lawyer must know: whether seniority is a vested right protected by due process, and whether a mass resignation in protest is a protected concerted activity.

Procedural History

The pilots first filed a petition before the Court of Industrial Relations to restore their seniority and other privileges. While the petition was pending, the Court of Industrial Relations was abolished and the case was turned over to the National Labor Relations Commission. Acting Labor Arbiter Nestor Lim denied the petition, respected the seniority ranking of March 1971, and by way of mitigating the penalty allowed the returning pilots one half of their retirement benefits. Both Philippine Air Lines and the Enriquez group appealed to the National Labor Relations Commission en banc. A compromise agreement was entered into, approved, and the case was dismissed with prejudice. Enriquez and Ecarma did not conform and appealed to the Secretary of Labor, who ruled that as to them the case should have been decided on the merits, but still affirmed the arbiter and directed them to comply with the compromise. They then elevated the matter to the Office of the President, which affirmed the Secretary of Labor. Almost two years later they obtained a copy of that decision, and they filed this petition for certiorari and mandamus before the Supreme Court.

Facts

Enriquez and Ecarma were employed by Philippine Air Lines in 1961 and 1966 respectively and became members of the Air Lines Pilot Association of the Philippines. In October 1970 the union staged a strike, which the President certified to the Court of Industrial Relations. The court ordered the strikers back to work and barred Philippine Air Lines from dismissing anyone because of the strike. The strikers returned, but the company then dismissed their union president, Captain Felix Gaston. The union board condemned the dismissal and resolved to ground all planes and to file protest retirements and protest resignations.

The Court of Industrial Relations issued an order maintaining the status quo and directing the union members not to cause any stoppage in the operation of Philippine Air Lines, under pain of dismissal and forfeiture of rights and privileges. Despite that order, the pilots submitted individual retirement and resignation letters on December 12, 1970, protesting the company's alleged harassment and unfair labor practices. Philippine Air Lines accepted the letters, chopped the pilots from the payroll, and declared that because the retirement was in pursuance of a conspiracy and in violation of the court order, the pilots were not entitled to any benefits.

Enriquez and Ecarma later returned. Before readmission, the company required them to sign conformity to the acceptance of their retirement and resignation and to apply for employment as new employees without protest or reservation. They complied. A new seniority list was issued, and they lost about ten years and five years of seniority respectively, starting from zero.

Issues

• Whether or not the pilots are entitled to the restoration of their seniority rights.
• Whether or not the mass retirement and resignation of December 12, 1970 was a concerted action protected by law.

Applicable Provisions

The decision quotes the definition of strike from the Industrial Peace Act:

A strike means any temporary stoppage of work by the concerted action of employees as a result of an industrial dispute.

This definition is the pivot of the ruling, because the Court holds that what the pilots did was not a temporary stoppage of work but a permanent cut off of the employment relationship.

Ruling

On the first issue, the Court holds that an employee has no inherent right to seniority. Seniority rights acquired through long employment are contractual and not constitutional, so their loss on discharge does not violate the Constitution. When the pilots tendered their retirement and resignation and the company immediately accepted, both parties mutually terminated the employment relationship and thereby curtailed whatever seniority rights had been earned. The loss of seniority was therefore not a penalty but the expected consequence of the acceptance of the retirement and resignation. The Court adds that the question of whether forfeiture was within the coercive powers of the labor tribunals is of no moment, because the pilots lost their seniority by the operative act of their own retirement and resignation, not by any order. They were new employees with entirely new seniority rankings when readmitted, and the company was merely exercising its prerogative to set hiring and rehiring policies absent anti-union motivation.

On the second issue, the Court holds that the mass action was not a strike, because employees who go on strike do not quit their employment. The relationship of employer and employee ordinarily continues until one party acts to sever it or both mutually act to accomplish that purpose. Not having assumed the status of strikers, the pilots' protest retirement and resignation was not a protected concerted activity, and they cannot claim unfair labor practice because they were not dismissed. The Court notes that this was already settled in the earlier Chavez versus Martinez decision, which it quotes:

What they contemplated was evidently a permanent cut off of employment relationship with their erstwhile employer, the Philippine Air Lines.

The Court also rejects the claim that the retirement was a sham, since the pilots exposed themselves to the risk that the company would take it seriously, and rejects the claim that they were not advised of the consequences, since they are highly educated men, not ordinary illiterate laborers.

Doctrine

Seniority is not a vested right protected by due process; it is contractual, arising from contract, statute, or administrative regulation, and it is extinguished when the employment relationship is mutually terminated by retirement or resignation accepted by the employer. A mass resignation in protest is not a strike, because a strike is only a temporary stoppage of work, and it is not a protected concerted activity. Hiring and rehiring policies are management prerogatives absent anti-union motivation. But an employee who validly retires or resigns is entitled as a matter of right to the full benefits under the retirement plan or the full separation pay under the Termination Pay Act.

Disposition

The petition was dismissed and the orders below affirmed, subject to the modification that the pilots are granted full retirement and separation benefits with legal interest from accrual until fully paid.

Remember This

Memorize the line that seniority rights are contractual and not constitutional, and that a mass resignation is not a strike because a strike is only a temporary stoppage of work. Examiners use this case to test the distinction between a strike and a mass resignation, and the rule that validly retiring employees are entitled to full retirement benefits.