Philippine Airlines, Incorporated vs. Philippine Airlines Employees Association

G.R. No. 142399. March 12, 2008


PAL and respondent PALEA entered into a CBA covering the period of 1986-1989. Part of said agreement required PAL to pay its rank and file employees 13th month and Christmas Bonus. In 1988, PAL releases a guideline which provides that those who have not yet achieved regular status by the cut-off date, 30 April 1988 shall not be eligible for 13th month.

PALEA filed a labor complaint  for unfair labor practices asserting that all employees of PAL, regular or non-regular, must be paid their 13th month pay. It also argues that the guideline is in contravention of the Collective Bargaining Agreement (CBA) entered into by petitioner PAL and respondent PALEA.

PAL asserts that it did not deny their 13th month pay considering they receive said mandatory bonus in the form of the Christmas Bonus which is in compliance with Presidential Decree No. 851.

The Labor Arbiter rendered a Decision dismissing the respondent PALEA’s complaint for lack of merit. The NLRC dismissed the case holding that the 13th month pay or mid- year bonus is distinct from the Christmas Bonus. The CA dismissed the petition of PAL rationalized that “well-settled is the rule that all doubts should be resolved in favor of labor.


(1) WON CBA does not apply to non-regular employees

(2) WON the 13th month pay or mid-year bonus can be equated to the Christmas bonus.


(1) NO. It is a well-settled doctrine that the benefits of a CBA extend to the laborers and employees in the collective bargaining unit, including those who do not belong to the chosen bargaining labor organization. Otherwise, it would be a clear case of discrimination.

To be entitled to the benefits under the CBA, the employees must be members of the bargaining unit, but not necessarily of the labor organization designated as the bargaining agent. There is no showing that the non-regular status of the concerned employees by said cut-off date sufficiently distinguishes their interests from those of the regular employees so as to exclude them from the collective bargaining unit and the benefits of the CBA.

(2) NO. The reasons are –

(a) The law provides that all employees entitled to the 13th month pay regardless of the amount of their basic salary, designation or employment status, and irrespective of the method by which their wages are paid, provided that they have worked for at least one (1) month during a calendar year.

(b) The 1986-1989 CBA, petitioner PAL agreed to pay its employees 1) the 13th month pay or the mid-year bonus, and 2) the Christmas bonus. Both is  evidently and distinctly a separate benefit.

If PAL truly intended that the Christmas bonus be treated as the “equivalent” of the 13th month pay required by law, then said intention should have been expressly declared in their 1986-1989 CBA, or the separate provision therein on the Christmas bonus should have been removed because it would only be superfluous.

The Christmas bonus in this case is of this nature, although, by virtue of its incorporation into the CBA, it has become more than just an act of generosity on the part of petitioner PAL, but a contractual obligation it has undertaken.

A collective bargaining agreement refers to a negotiated contract between a legitimate labor organization and the employer concerning wages, hours of work and all other terms and conditions of employment in a bargaining unit. As in all other contracts, the parties to a CBA may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided these are not contrary to law, morals, good customs, public order or public policy. Thus, where the CBA is clear and unambiguous, it becomes the law between the parties, and compliance therewith is mandated by the express policy of the law.

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