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Flight Attendants and Stewards Association of the Philippines vs.

Philippine Airlines
G.R. No. 178083/A.M. No. 11-10-1-SC
March 13, 2018


1. 1998: PAL retrenched cabin crew personnel in a retrenchment and demotion scheme.
2. Eventually, the Supreme Court found PAL guilty of illegal retrenchment.
a. It disbelieved the veracity of PAL's claim of severe financial losses, and
concluded that PAL had not established its severe financial losses because of its
non-presentation of audited financial statements.
b. That the retrenchment program is in bad faith, and had not used fair and
reasonable criteria in selecting the employees to be retrenched.

Issue: WON the retrenchment is valid

Ruling: YES, the retrenchment is valid.

1. PAL was discharged of the burden to prove serious financial losses in view of
FASAP's admission.

 ASAP averred in its position paper, and echoed in its reply and memorandum,
that it was not opposed to the retrenchment program because it understood PAL's
financial troubles; and that it was only questioning the manner and lack of
standard in carrying out the retrenchment.
 As a rule, indeed, admissions made by parties in the pleadings, or in the course of
the trial or other proceedings in the same case are conclusive, and do not require
further evidence to prove them.

2. Judicial notice could be taken of the financial losses incurred; the presentation of
audited financial statements was not required in such circumstances.

 After having been placed under corporate rehabilitation and its rehabilitation plan
having been approved by the SEC on June 23, 2008, PAL's dire financial
predicament could not be doubted.
 To require PAL in the proceedings below to still prove its financial losses would
only trivialize the SEC's order and proceedings. That would be unfortunate
because we should not ignore that the SEC was then the competent authority to
determine whether or not a corporation experienced serious financial losses.
Hence, the SEC's order - presented as evidence in the proceedings below -
sufficiently established PAL's grave financial status.
 Also, the Court cannot be blind and indifferent to current events affecting the
society and the country's economy, but must take them into serious consideration
in its adjudication of pending cases.
 We emphasize, too, that the presentation of the audited financial statements
should not the sole means by which to establish the employer's serious
financial losses. The presentation of audited financial statements, although
convenient in proving the unilateral claim of financial losses, is not required for
all cases of retrenchment. The evidence required for each case of retrenchment
really depends on the particular circumstances obtaining.
 To require a distressed corporation placed under rehabilitation or receivership to
still submit its audited financial statements may become unnecessary or