IC authorizes release of PAL’s collateral security
The Insurance Commission (IC) has authorized the release of the collateral security amounting for the supersedeas bond posted by flag-carrier Philippine Airlines, Inc. (PAL) before the National Labor Relations Commission (NLRC).
The R650 million supersedeas bond was posted by PAL when it assailed a February 2011 order of the labor arbiter granting the issuance of an alias writ of execution and ordering the airliner to pay its retrenched employees.
A supersedeas bond, also known as a defendant’s appeal bond, is a type of surety bond that a court requires from an appellant who wants to delay payment of a judgment until the appeal is over.
Insurance Commissioner Dennis B. Funa, said that they authorized the release of the R650-million cash which was deposited in Allied Banking Corp. as a collateral security for the supersedeas bond filed by PAL before the NLRC.
“We have verified from the NLRC that its 27 November 2015 Decision affirming the Order of the Labor Arbiter cancelling surety bond issued by Philippine Phoenix Surety and Insurance, Inc. and releasing the collateral security posted for the said bond attained finality on 22 February 2016. In fact, a corresponding Entry of Judgment was issued by NLRC on 12 April 2016,” Funa said.
“In view of this, we have authorized the release of the collateral security posted for the said bond to PAL,” he added.
This case stemmed from the illegal dismissal case filed by the Flight Attendants and Stewardess Association of the Philippines (FASAP) against PAL before the arbitration branch of the National Labor Relations Commission (NLRC) in 1998.
The NLRC found PAL guilty of unfair labor practice and illegal dismissal and ordered the reinstatement of PAL’s retrenched employees.
In a decision dated March 13, 2018, the Supreme Court ruled in favor of PAL’s second motion for reconsideration and overturned its July 2008 decision, which found the airline company guilty of unlawful retrenchment and ordered the reinstatement of the retrenched cabin crew.
During the pendency of the resolution of PAL’s second motion for reconsideration, the Labor Arbiter issued an order in February 2011 granting the issuance of an Alias Writ of Execution.
The alias writ of execution was issued to enforce the decisions of the Labor Arbiter and the Supreme Court finding PAL guilty of unfair labor practice and illegal dismissal and ordering the payment of R650-million monetary award in favor of the retrenched employees.
Contesting the February 2011 order, PAL filed an appeal before the NLRC and posted the supersedeas bond issued by Philippine Phoenix Surety Bond in the amount equivalent to the monetary award.
The supersedeas bond was secured by a cash collateral amounting to R650 million deposited in Allied Banking Corp.
In October 2011, the NLRC issued a decision setting aside the February Order which effectively enjoined the enforcement of the Alias Writ of Execution.
Thus, PAL filed a motion praying for the cancellation of the supersedeas bond which was granted by the Labor Arbiter.
In an Order dated July 23, 2015, the Labor Arbiter issued a Writ of Execution ordering the cancellation of the supersedeas bond.
FASAP filed a petition before the NLRC assailing the 23 July 2015 Order which was denied in a Decision dated 27 November 2015.
FASAP then questioned the 27 November 2015 NLRC Decision before the Court of Appeals with a prayer for the issuance of a Temporary Restraining Order and/or Writ of Preliminary Injunction.
To date, however, the Court of Appeals has not resolved the same, nor has it issued a Temporary Restraining Order to stay the execution of the 23 July 2015 Order of the Labor Arbiter.