PAN AMERICAN WORLD AIRWAYS, INC. (petitioner) v.

PAN AMERICAN EMPLOYEES ASSOCIATION and CIR (respondents)

J. Fernando April 29, 1969 No. L-25094
Doctrine There is both a constitutional and statutory recognition that laborers have the right to form unions to take care of their interests vis-
à-vis their employers. Their freedom to form organizations would be rendered nugatory if they could not choose their own leaders to
speak on their behalf and to bargain for them.
Summary Respondent union declared and staged a strike against Pan Am, which the PH President later certified to the CIR as being an
industrial dispute affecting national interest. Through the intervention of the CIR, Pan Am was ordered to accept the striking
employees back to work, including five union leaders, pending the resolution of the dispute. Pan Am alleges grave abuse of discretion
on the part of the CIR for denying its plea to either exclude the union leaders from the order to accept workers back, or to merely
deposit the union leaders’ salaries without requiring a refund should it be decided that the strike was illegal. The SC held that (1) it
was well within the CIR’s broad authority of compulsory arbitration to find a solution to disputes resulting in a strike that is certified
by the President as affecting national interest, and to enforce said solution as it sees fit. The Court also emphasized Pan Am’s attempt
at refusing re-entry to the union leaders or merely paying them off greatly undermines the integrity of the collective bargaining
process, as well as the constitutional and statutory right of laborers to organize and to be able to choose their own leaders.
Facts  Pan Am Employees Association (the union) filed a notice of strike with the DOLE, and declared and maintained a strike
against its employer three days later.
 The President of the Philippines certified the matter to respondent CIR as an industrial dispute affecting national interest.
 During the conferences with the CIR, Pan Am insisted on excluding the union leaders from returning to work, alleging that
the strike was illegal, and that accepting the union leaders would remove the incentive for them to work properly and
would give the leaders the opportunity to cause grave injury to Pan Am.
 Pan Am offered to merely deposit the union leaders’ salaries, adding that no refund will be asked even if the strike were to
be found illegal.
 Judge Bugayong of the CIR nevertheless ordered Pan Am to accept all the striking employees, including the union leaders.
 Pan Am’s motion for reconsideration was denied.
Ratio/Issues
I. Whether there was grave abuse of discretion when the CIR refused Pan Am’s petition to exclude the union leaders (NO)

(1) The CIR is empowered to act in cases such as this one, wherein upon certification by the President of the Philippines
that the dispute is one involving an industry affecting national interest, the Court’s broad authority of compulsory
arbitration is to be exercised.
(2) If the CIR is granted authority to come up with a solution to an industrial dispute, it cannot be contended, as Pan Am
would have it, that the CIR has neither the power nor jurisdiction to enforce that same solution.
(3) In this case, the dispute between Pan Am and its employees’ union was certified by the President to the CIR, and CIR
saw it fit to order Pan Am to allow the striking employees, including the union leaders, to return to work pending the
resolution of the dispute. The Court sees no valid objection to the CIR’s exercise of its authority and discretion in the
immediate case.
(4) The Court also noted that Pan Am, in insisting on refusing reentry to work to the union leaders on the basis that there
was present a factor “which might make them ‘lose all their incentive and motivation for doing their work properly’
and which would furnish them ‘the opportunity to cause grave and irreparable injury’” to Pan Am, betrayed its
inexcusable lack of confidence in the responsibility of the union officials and the validity of the collective bargaining
process itself.
(5) Pan Am displayed grave but unwarranted distrust in the union leaders and their performance of their functions simply
because they had resorted to staging a strike despite the absence of the slightest indication of the danger it fears (that
the union leader in the cargo department would underweigh/overweigh cargo, that passenger traffic reps and
reservation clerks would intentionally mess up and cause suits from Pan Am’s clients).
(6) “The greater offense is to the labor movement itself, more specifically to the right of self-organization. There is both a
constitutional and statutory recognition that laborers have the right to form unions to take care of their interests vis-
à-vis their employers. Their freedom to form organizations would be rendered nugatory if they could not choose their
own leaders to speak on their behalf and to bargain for them.”
(7) The “sad spectacle of the employees’ union leaders of their choice condemned as irresponsible, possibly even
constituting a menace to the operations of the enterprise,” is noted by the Court as “an indictment of the gravest
character, devoid of any factual basis.” The same would subsequently question the union members’ undeniable right
to choose their leaders, who must be treated as such with all the respect to which they are legitimately entitled.
Held Petition for a writ of certiorari DENIED.
Prepared by: Jo Nayve [Labor 2|Daway]