[299] PHILIPPINE AIRLINES, INC. v. ROLDAN-CONFESOR  Both parties filed their MRs.
 Both parties filed their MRs. SOL denied PALEA’s MR but granted PAL’s regarding
G.R. No. 111480; March 10, 1994; Nocon, J.
TOPIC: [VIII.] Extent of Judicial Review; [C.] Question of Fact
SUMMARY: The previous CBA between PAL and PALEA expired and the latter expressed its
desire to renegotiate the CBA with PAL and submitted its proposals for an economic package
that would cost PAL P16.1B. PAL proposed its economic package of P1B, which was rejected
by PALEA. Parties were unable to reach an agreement. PALEA declared a deadlock in the
negotiations and filed the next day a notice of strike. PAL requested the Labor Sec. (SOL) that
she assume jurisdiction over the labor dispute. SOL then issued its order with its corresponding
award and ordered the parties to execute and incorporate in the CBA the dispositions awarded
by such order. PAL filed the instant petition. SC granted a PAL’s prayer for a TRO holding the
SOL acted in grave abuse of discretion amounting to lack or excess of jurisdiction in her order
directing the inclusion of certain benefits in the CBA.
DOCTRINE
There is grave abuse of discretion amounting to lack or excess of jurisdiction where a
respondent board, tribunal, or officer doing judicial functions exercised judgment in a capricious,
whimsical, arbitrary manner. There is also grave abuse of discretion when the
board/tribunal/officer fails to consider evidence adduced by the parties.
Hence, while it is true the SOL’s findings are entitled to respect, SC observes that her findings
are not based on a thorough examination of parties’ claims but merely on their respective
position papers; there was no trial to ensure better appreciation of the evidence.
RELEVANT PROVISION(S)
FACTS
 This is a petition for certiorari to annul the orders of the Nieves Confessor, Secretary
of Labor (SOL), which directed the inclusion of benefits in its Collective Bargaining
Agreement (CBA) with respondent Philippine Airlines Employees Association
(PALEA).
 On September 30, 1992, the previous CBA between PAL and PALEA expired and the
latter expressed its desire to renegotiate the CBA with PAL and submitted its
proposals for an economic package that would cost PAL P16.1B.
o PAL proposed its economic package of P1B, which was rejected by PALEA.
Parties were unable to reach an agreement.
 On May 3, 1993, PALEA declared a deadlock in the negotiations and filed the next
day a notice of strike with National Conciliation and Mediation Board (NCMB). (See
notes for the respective positions of both parties at the time of the deadlock)
PAL requested SOL that she assume jurisdiction over the labor dispute due to
the importance of the business and to prevent PALEA from going on strike. SOL
then assumed jurisdiction and enjoined any work stoppage and ordered parties to
desist from any act that would worsen the situation. SOL also ordered the parties
to submit position papers.
o Based on these position papers, SOL reviewed their respective positions on
the main deadlocked issues (refer to original text just to see the table on
proposals of both parties and the ones PAL deemed acceptable or not
acceptable).
 SOL then issued its order with its corresponding award with respect to Wage Increase,
Allowance, Seniority Pay, Travel Benefits, Retirement, and Date of Retroactive Effect
of CBA. SOL also ordered the parties to execute and incorporate in the CBA the
dispositions awarded by such order.
the wage increases (an increase of P1.2K per year for 3 years) SOL also included 2
provisions proposed by PAL to increase efficiency (reduction by 5% of the seniority
factor and of the efficiency factor increased by 5%; bidding for vacant positions
opened to entire department under which specific section is located).
 PAL filed the instant petition. SC granted a PAL’s prayer for a TRO.
ISSUE(S)/HELD
[1] WON the Secretary of Labor acted in grave abuse of discretion amounting to lack or
excess of jurisdiction in her order directing the inclusion of certain benefits in the CBA. –
YES
PAL’s argument:
 SOL acted in grave abuse of discretion amounting to lack or excess of jurisdiction in
awarding P1.268B in benefits to PALEA as it was based on probabilities and
conjecture unsupported by evidence.
 While SOL agreed with PAL that the latter had erratic financial performance which
could not sustain PALEA’s demand, she held that given PAL’s recent performance, it
would gain constant profits over the 3-year contract period with net earnings of P3.4B.
 PAL adds that SOL acted with grave abuse of discretion in applying the so-called
“traditional budget-management approach”, awarding 1/3 of projected net profits to
PALEA, and in making the award retroactive to October 1, 1992.
PALEA’s argument:
 Validity of the award involves findings of fact of SOL which cannot be reviewed in a
petition for certiorari. Issue involved pertains to the field of expertise of SOL and her
findings should be respected by this Court.
SC ruling:
 SC agrees with PAL. There is grave abuse of discretion amounting to lack or
excess of jurisdiction where a respondent board, tribunal, or officer doing
judicial functions exercised judgment in a capricious, whimsical, arbitrary
manner.
o There is also grave abuse of discretion when the board/tribunal/officer
fails to consider evidence adduced by the parties.
o Hence, while it is true the SOL’s findings are entitled to respect, SC
observes that her findings are not based on a thorough examination of
parties’ claims but merely on their respective position papers; there
was no trial to ensure better appreciation of the evidence.
 SOL gravely abused her discretion when she based her award in favor of PALEA on
the assumption that PAL would earn P3.4 billion pesos during the three-year contract
period. The assumption finds no basis on the evidence adduced before her.
o SOL noted PAL’s erratic performance over the 10-year period and even
recognized the financial struggles (i.e. shortfall in projected income; state of
transition from its recent privatization; increased operating costs and cut-
throat competition).
 Despite such recognition by SOL, she proceeded to forecast that PAL would make a
projected net profit of P1.28B for FY 1992-93 and P3.4B for the 3-year contract period.
o SC ruled that SOL should take into account PAL’s performance for the
previous 10 years (PAL only had profit during 2 fiscal years due to the
Government assuming PAL’s foreign currency obligations as part of
privatization process).
o Subsequent events have shown the error in SOL’s projections. The actual
net income earned by PAL for FY 1992-1993 fell short of respondent
Secretary's projection by P87.813 M.
  SOL then allocated 1/3 of her projected profits as labor costs to be paid to PALEA
under the so called “traditional budget management approach” which approach SC
was unaware of and was neither cited by the parties. SOL should have explained it
more thoroughly.
o Moreover, it is improper to apply such formula since PALEA did not
represent PAL’s entire labor force (only 45% of entire labor force), which
would rob other components of their rightful share in the allocation and puts
greater financial burden to PAL greatly affecting its stockholders. Hence, the
application of such approach is an act of grave abuse of discretion
amounting to lack or excess of jurisdiction on SOL.
 The offer of PAL of P1 billion to PALEA, which, by the way, is twice the amount that
PALEA would be entitled to if the one-third rule was properly applied, was based on its
computation of its projected operational costs.
o SC believes that the suggestion of the Solicitor General is more appropriate:
respondent Secretary should review the positions of the parties so that a
more acceptable and practicable amount could be found.
o If her recomputation should turn out to be less than the amount offered by
PAL, then she should award PALEA the amount offered by PAL.
[2] WON SOL’s arbitral award may be made retroactive to Oct. 1, 1992 (date of expiration
of previous CBA). – YES
 The arbitral award may be made to retroact to Oct. 1, 1992. In the absence of the
specific provision of law prohibiting retroactivity of the effectivity of arbitral awards
issued by the SOL pursuant to Art. 263(g), LC, such as herein involved, SOL is
deemed vested with plenary and discretionary powers to determine the effectivity
thereof.
o SC has previously held that Art. 253-A, LC cannot properly apply for the
same speaks of agreement between parties and not arbitral awards.
[3] WON the instant petition was filed in violation of Circular No. 28-91 of this Court. – NO
 PALEA argues that the instant petition was filed in violation of Circular 28-91 of this
Court.
o PAL initially filed this petition on August 6, 1993. On August 16 1993, the
same was dismissed for non-compliance with Circular 1-88. PAL then filed
the instant petition on Sept. 1, 1993. PALEA claims that failure to mention
said dismissal of its petition required under Circular 28-91 warrants
dismissal of the present petition.
 The Court held that there is no violation of said Circular by PAL.
o PAL is not required to mention the dismissal since having been dismissed, it
is not a case pending before a tribunal within the contemplation of said
Circular. Moreover, a dismissed petition under said Circular may be refilled
as a new one if the proper elementary period is observed.
o The present petition was filed within the reglementary period for filing of a
special civil action.

RULING

DISPOSITIVE: WHEREFORE, the petition is hereby GIVEN DUE COURSE and the same
GRANTED. The orders of respondent Secretary are annulled and set aside and the case
remanded to said respondent for recomputation and to award to PALEA either the
recomputed amount or the package offered by PAL, whichever may be higher. SO
ORDERED.