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LEPANTO CONSOLIDATED MINING COMPANY vs.

THE LEPANTO CAPATAZ


UNION
FACTS:
As a domestic corporation authorized to engage in large-scale mining, Lepanto
operated several mining claims in Mankayan, Benguet. On May 27, 1998,
respondent Lepanto Capataz Union (Union), a labor organization duly registered with
DOLE, filed a petition for consent election with the Industrial Relations Division of the
Cordillera Regional Office (CAR) of DOLE, thereby proposing to represent 139
capatazes of Lepanto.
In due course, Lepanto opposed the petition, contending that the Union was in
reality seeking a certification election, not a consent election, and would be thereby
competing with the Lepanto Employees Union (LEU), the current collective
bargaining agent. Lepanto pointed out that the capatazes were already members of
LEU, the exclusive representative of all rank-and-file employees of its Mine Division.
On May 2, 2000, Med-Arbiter Michaela A. Lontoc of DOLE-CAR issued a ruling to the
effect that the capatazes could form a separate bargaining unit due to their not
being rank-and-file employees. Lepanto appealed to the DOLE Secretary. On July 12,
2000, then DOLE Undersecretary Rosalinda Dimapilis-Baldoz (Baldoz), acting by
authority of the DOLE Secretary, affirmed the ruling of Med-Arbiter Lontoc.
In the ensuing certification election held on November 28, 2000, the Union garnered
109 of the 111 total valid votes cast.
On the day of the certification election, however, Lepanto presented an
opposition/protest. Hence, on February 8, 2001, a hearing was held on Lepanto's
opposition/protest. Although the parties were required in that hearing to submit their
respective position papers, Lepanto later opted not to submit its position paper, and
contended that the issues identified during the hearing did not pose any legal issue
to be addressed in a position paper.
On April 26, 2001, Med-Arbiter Florence Marie A. Gacad-Ulep of DOLE-CAR rendered
a decision certifying the Union as the sole and exclusive bargaining agent of all
capatazes of Lepanto.
On May 18, 2001, Lepanto appealed the decision of Med-Arbiter Gacad-Ulep to the
DOLE Secretary.
ISSUE:
Whether or not Capatazes are rank-and-file employees
HELD:
NO. Anent the second issue, we note that Med-Arbiter Lontoc found in her Decision
issued on May 2, 2000 that the capatazes were performing functions totally different
from those performed by the rank-and-file employees, and that the capatazes were
"supervising and instructing the miners, mackers and other rank-and-file workers
under them, assess[ing] and evaluat[ing] their performance, mak[ing] regular
reports and recommend[ing] new systems and procedure of work, as well as
guidelines for the discipline of employees. Hence, Med-Arbiter Lontoc concluded,
the capatazes "differ[ed] from the rank-and-file and [could] by themselves constitute
a separate bargaining unit."

Agreeing with Med-Arbiter Lontoc's findings, then DOLE Undersecretary Baldoz,


acting by authority of the DOLE Secretary, observed in the resolution dated July 12,
2000, thus:
The bargaining unit sought to be represented by the appellee are the
capataz employees of the appellant. There is no other labor organization of
capatazes within the employer unit except herein appellant. Thus, appellant
is an unorganized establishment in so far as the bargaining unit of
capatazes is concerned. In accordance with the last paragraph of Section
11, Rule XI, Department Order No. 9 which provides that "in a petition filed
by a legitimate labor organization involving an unorganized establishment,
the Med-Arbiter shall, pursuant to Article 257 of the Code, automatically
order the conduct of certification election after determining that the
petition has complied with all requirements under Sections 1, 2 and 4 of the
same rules and that none of the grounds for dismissal thereof exists", the
order for the conduct of a certification election is proper.
We cannot undo the affirmance by the DOLE Secretary of the correct findings of her
subordinates in the DOLE, an office that was undeniably possessed of the requisite
expertise on the matter in issue. In dealing with the matter, her subordinates in the
DOLE fairly and objectively resolved whether the Union could lawfully seek to be the
exclusive representative of the bargaining unit of capatazes in the company. Their
factual findings, being supported by substantial evidence, are hereby accorded great
respect and finality. Such findings cannot be made the subject of our judicial review
by petition under Rule 45 of the Rules of Court, because:
. . . [T]he office of a petition for review on certiorari under Rule 45 of the
Rules of Court requires that it shall raise only questions of law. The factual
findings by quasi-judicial agencies, such as the Department of Labor and
Employment, when supported by substantial evidence, are entitled to great
respect in view of their expertise in their respective field. Judicial review of
labor cases does not go far as to evaluate the sufficiency of evidence on
which the labor official's findings rest. It is not our function to assess and
evaluate all over again the evidence, testimonial and documentary,
adduced by the parties to an appeal, particularly where the findings of both
the trial court (here, the DOLE Secretary) and the appellate court on the
matter coincide, as in this case at bar. The Rule limits that function of the
Court to review or revision of errors of law and not to a second analysis of
the evidence. Here, petitioners would have us re-calibrate all over again the
factual basis and the probative value of the pieces of evidence submitted
by the Company to the DOLE, contrary to the provisions of Rule 45. Thus,
absent any showing of whimsical or capricious exercise of judgment, and
unless lack of any basis for the conclusions made by the appellate court
may be amply demonstrated, we may not disturb such factual findings.
In any event, we affirm that capatazes or foremen are not rank-and-file employees
because they are an extension of the management, and as such they may influence
the rank-and-file workers under them to engage in slowdowns or similar activities
detrimental to the policies, interests or business objectives of the employers.
TABANGAO SHELL REFINERY EMPLOYEES ASSOCIATION vs. PILIPINAS SHELL
PETROLEUM CORPORATION
FACTS:
In anticipation of the expiration on April 30, 2004 of the 2001-2004 Collective
Bargaining Agreement (CBA) between the petitioner and the respondent Pilipinas
Shell Petroleum Corporation, the parties started negotiations for a new CBA. After
several meetings on the ground rules that would govern the negotiations and on

political items, the parties started their discussion on the economic items on July 27,
2004, their 31st meeting. The union proposed a 20% annual across-the-board basic
salary increase for the next three years that would be covered by the new CBA. In
lieu of the annual salary increases, the company made a counter-proposal to grant
all covered employees a lump sum amount of P80,000.00 yearly for the three-year
period of the new CBA.

unanimously voted for the holding of a strike. Upon being aware of this
development, the company filed a Petition for Assumption of Jurisdiction with the
Secretary of Labor and Employment.

The union requested the company to present its counter-proposal in full detail,
similar to the presentation by the union of its economic proposal. The company
explained that the lump sum amount was based on its affordability for the
corporation, the then current salary levels of the members of the union relative to
the industry, and the then current total pay and benefits package of the employees.
Not satisfied with the company's explanation, the union asked for further
justification of the lump sum amount offered by the company. When the company
refused to acknowledge any obligation to give further justification, the union
rejected the company's counter-proposal and maintained its proposal for a 20%
annual increase in basic pay for the next three years.

HELD:
YES. There was already an actual existing deadlock between the parties. What was
lacking was the formal recognition of the existence of such a deadlock because the
union refused a declaration of deadlock. Thus, the union's view that, at the time the
Secretary of Labor and Employment exercised her power of assumption of
jurisdiction, the issue of deadlock was neither an incidental issue to the matter of
unfair labor practice nor an existing issue is incorrect.

On the 39th meeting of the parties on August 24, 2004, the union lowered its
proposal to 12% annual across-the-board increase for the next three years. For its
part, the company increased its counter-proposal to a yearly lump sum payment of
P88,000.00 for the next three years. The union requested financial data for the
manufacturing class of business in the Philippines. It also requested justification for
the company's counter-offer. In response, the company stated that financial
measures for Tabangao were available in the refinery scorecard regularly cascaded
by the management to the employees. The company reiterated that its counter-offer
is based on its affordability for the company, comparison with the then existing
wage levels of allied industry, and the then existing total pay and benefits package
of the employees. The company subsequently provided the union with a copy of the
company's audited financial statements.
However, the union remained unconvinced and asked for additional documents to
justify the company's counter-offer. The company invited the attention of the union
to the fact that additional data, such as the refinery performance scorecard, were
available from the refinery's website and shared network drives. The company also
declared that the bases of its counter-offer were already presented to the union and
contained in the minutes of previous meetings. The union thereafter requested for a
copy of the comparison of the salaries of its members and those from allied
industries. The company denied the request on the ground that the requested
information was entrusted to the company under a confidential agreement. Alleging
failure on the part of the company to justify its offer, the union manifested that the
company was bargaining in bad faith. The company, in turn, expressed its
disagreement with the union's manifestation.
On the parties' 41st meeting held on September 2, 2004, the company proposed the
declaration of a deadlock and recommended that the help of a third party be sought.
The union replied that they would formally answer the proposal of the company a
day after the signing of the official minutes of the meeting. On that same day,
however, the union filed a Notice of Strike in the National Conciliation and Mediation
Board (NCMB), alleging bad faith bargaining on the part of the company. The NCMB
immediately summoned the parties for the mandatory conciliation-mediation
proceedings but the parties failed to reach an amicable settlement.
On September 16, 2004, during the cooling off period, the union conducted the
necessary strike vote. The members of the union, who participated in the voting,

ISSUE:
Whether or not there was a deadlock

More importantly, however, the union's mistaken theory that the deadlock issue was
neither incidental nor existing is based on its premise that the case is all about the
company's alleged unfair labor practice of bargaining in bad faith, which is the
ground stated in its first Notice of Strike. In particular, the union asserts:
The evidentiary value of the Notice of Strike for ULP of BAD FAITH
BARGAINING (Annex "M" of the petition) cannot be taken for granted. It is
the very important documentary evidence that shows what is the existing
"labor dispute" between the parties.
While the first Notice of Strike is indeed significant in the determination of the
existing labor dispute between the parties, it is not the sole criterion. As this Court
explained in Union of Filipro Employees-Drug, Food and Allied Industries UnionsKilusang Mayo Uno v. Nestle Philippines, Inc.:
The Secretary of the DOLE has been explicitly granted by Article 263(g) of
the Labor Code the authority to assume jurisdiction over a labor dispute
causing or likely to cause a strike or lockout in an industry indispensable to
the national interest, and decide the same accordingly. And, as a matter of
necessity, it includes questions incidental to the labor dispute; that is,
issues that are necessarily involved in the dispute itself, and not just to that
ascribed in the Notice of Strike or otherwise submitted to him for resolution.
. . . (Emphasis supplied.)
The totality of the company's Petition for Assumption of Jurisdiction,
including every allegation therein, also guided the Secretary of Labor and
Employment in the proper determination of the labor dispute over which he
or she was being asked to assume jurisdiction.
A "labor dispute" is defined under Article 212 (l) of the Labor Code as
follows:
ART. 212. Definitions. . . .
xxx xxx xxx
(l) "Labor dispute" includes any controversy or matter concerning terms or
conditions of employment or the association or representation of persons in
negotiating, fixing, maintaining, changing or arranging the terms and
conditions of employment, regardless of whether the disputants stand in
the proximate relation of employer and employee.

In this case, there was a dispute, an unresolved issue on several matters,


between the union and the company in the course of the negotiations for a
new CBA. Among the unsettled issues was the matter of compensation. In
particular, paragraphs 1 to 6 of the statement of Antecedent Facts in the
company's Petition for Assumption of Jurisdiction 43 read:
1. The Collective Bargaining Agreement (CBA) of the Company and
the Union expired on 30 April 2004.
2. Thus, as early as 13 April 2004, the Company and the Union
already met to discuss the ground rules that would govern their
upcoming negotiations. Then, on 15 April 2004, the Union
submitted its proposals for the renewal of their CBA.
3. While a total of 41 meetings were held between the parties,
several items, including the matter of compensation, remained
unresolved. Copies of the Minutes of the 41 meetings are attached
hereto and made integral part hereof as Annexes "A" to "A-40".
4. On 2 September 2004, the Union filed a Notice of Strike with the
NCMB, Region IV based in Calamba, Laguna anchored on a
perceived unfair labor practice consisting of alleged bad faith
bargaining on the part of the Company.Although there is no basis
to the charge of unfair labor practice as to give a semblance of
validity to the notice of strike, the Company willingly and actually
participated in the conciliation and mediation conferences called
by the NCMB to settle the dispute.A copy of the Notice of Strike is
attached hereto and made integral part hereof as Annex "B".
5. Although conciliation meetings have been conducted by the
National Conciliation and Mediation Board (NCMB) through
Conciliator Leodegario Teodoro on 09 and 13 September 2004, no
settlement of the dispute has yet been agreed upon.
6. Based on the attendant circumstances, as well as on the
actuations of the Union officers and members, it is likely that the
Union has already conducted, or is set to conduct soon, a strike
vote.
Thus, the labor dispute between the union and the company concerned the
unresolved matters between the parties in relation to their negotiations for a new
CBA. The power of the Secretary of Labor and Employment to assume jurisdiction
over this dispute includes and extends to all questions and controversies arising
from the said dispute, such as, but not limited to the union's allegation of bad faith
bargaining. It also includes and extends to the various unresolved provisions of the
new CBA such as compensation, particularly the matter of annual wage increase or
yearly lump sum payment in lieu of such wage increase, whether or not there was
deadlock in the negotiations. Indeed, nowhere does the Order dated September 20,
2004 of the Secretary of Labor and Employment mention a CBA deadlock. What the
union viewed as constituting the inclusion of a CBA deadlock in the assumption of
jurisdiction was the inclusion of the economic issues, particularly the company's
stance of yearly lump sum payment in lieu of annual wage increase, in the directive
for the parties to submit their respective position papers. 45 The union's Motion for
Reconsideration (With Urgent Prayer to Compel the Company to Justify Offer of Wage
[Increase] Moratorium) and Second Motion for Reconsideration questioning the
Order dated September 20, 2004 of the Secretary of Labor and Employment actually
confirm that the labor dispute between the parties essentially and necessarily
includes the conflicting positions of the union, which advocates annual wage
increase, and of the company, which offers yearly lump sum payment in lieu of wage
increase. In fact, that is the reason behind the union's prayer that the company be
ordered to justify its offer of wage increase moratorium. As there is already an
existing controversy on the matter of wage increase, the Secretary of Labor and

Employment need not wait for a deadlock in the negotiations to take cognizance of
the matter. That is the significance of the power of the Secretary of Labor and
Employment under Article 263 (g) of the Labor Code to assume jurisdiction over a
labor dispute causing or likely to cause a strike or lockout in an industry
indispensable to the national interest. As this Court elucidated in Bagong Pagkakaisa
ng Manggagawa ng Triumph International v. Secretary of the Department of Labor
and Employment:
Article 263(g) is both an extraordinary and a preemptive power to address
an extraordinary situation a strike or lockout in an industry indispensable
to the national interest. This grant is not limited to the grounds cited in the
notice of strike or lockout that may have preceded the strike or lockout; nor
is it limited to the incidents of the strike or lockout that in the meanwhile
may have taken place. As the term "assume jurisdiction" connotes, the
intent of the law is to give the Labor Secretary full authority to resolve all
matters within the dispute that gave rise to or which arose out of the strike
or lockout; it includes and extends to all questions and controversies arising
from or related to the dispute, including cases over which the labor arbiter
has exclusive jurisdiction.
ABC
CARLOS L. OCTAVIO vs. PHILIPPINE LONG DISTANCE TELEPHONE COMPANY
FACTS:
On May 28, 1999, PLDT and Gabay ng Unyon sa Telekomunikasyon ng mga
Superbisor (GUTS) entered into a CBA covering the period January 1, 1999 to
December 31, 2001 (CBA of 1999-2001). Article VI, Section I thereof provides:
Section 1.The COMPANY agrees to grant the following across-the-board
salary increase during the three years covered by this Agreement to all
employees covered by the bargaining unit as of the given dates:
Effective January 1, 1999 10% of basic wage or P2,000.00
whichever is higher;
Effective January 1, 2000 11% of basic wage or P2,250.00
whichever is higher;
Effective January 1, 2001 12% of basic wage or P2,500.00
whichever is higher.
On October 1, 2000, PLDT hired Octavio as Sales System Analyst I on a probationary
status. He became a member of GUTS. When Octavio was regularized on January 1,
2001, he was receiving a monthly basic salary of P10,000.00. On February 1, 2002,
he was promoted to the position of Sales System Analyst 2 and his salary was
increased to P13,730.00.
On May 31, 2002, PLDT and GUTS entered into another CBA covering the period
January 1, 2002 to December 31, 2004 (CBA of 2002-2004) which provided for the
following salary increases: 8% of basic wage or P2,000.00 whichever is higher for
the first year (2002); 10% of basic wage or P2,700.00 whichever is higher for the
second year (2003); and, 10% of basic wage or P2,400.00 whichever is higher for
the third year (2004).
Claiming that he was not given the salary increases of P2,500.00 effective January 1,
2001 and P2,000.00 effective January 1, 2002, Octavio wrote the President of GUTS,
Adolfo Fajardo (Fajardo). Acting thereon and on similar grievances from other GUTS
members, Fajardo wrote the PLDT Human Resource Head to inform management of
the GUTS members' claim for entitlement to the across-the-board salary increases.
Accordingly, the Grievance Committee convened on October 7, 2002 consisting of

representatives from PLDT and GUTS. The Grievance Committee, however, failed to
reach an agreement. In effect, it denied Octavio's demand for salary increases.
UNION ISSUE:
1. Mr. Carlos L. Octavio, Sales System Analyst I, CCIM-Database, was promoted to S2
from S1 last February 01, 2002. He claimed that the whole P2,000 (1st yr. GUTS-CBA
increase) was not given to him.
2. He was hired as a probationary employee on October 01, 2000 and was
regularized on January 01, 2001. He claimed that Management failed to grant him
the GUTS-CBA increase last January 2001.

Octavio is deemed to have waived his right to question the same. Clearly, he
departed from the grievance procedure mandated in the CBA and denied the Board
of Arbitrators the opportunity to pass upon a matter over which it has jurisdiction.
Hence, and as correctly held by the CA, Octavios failure to assail the validity and
enforceability of the Committee Resolution makes the same binding upon him. On
this score alone, Octavios recourse to the labor tribunals below, as well as to the
CA, and, finally, to this Court, must therefore fail.
UNIVERSITY OF THE EAST, DEAN ELEANOR JAVIER, RONNIE GILLEGO and
DR. JOSE C. BENEDICTO vs. ANALIZA F. PEPANIO and MARITI D. BUENO

MANAGEMENT POSITION:
Issue # 1:
A) Promotional Policy: adjustment of basic monthly salary to the minimum
salary of the new position.
B) Mr. Octavio's salary at the time of his promotion and before the
conclusion of the GUTS CBA was P10,000.00.
C) Upon the effectivity of his promotion on February 1, 2002, his basic
monthly salary was adjusted to P13,730.00, the minimum salary of the new
position.
D) In June 2002, the GUTS-CBA was concluded and Mr. Octavio's basic
salary was recomputed to include the P2,000.00 1st year increase
retroactive January 2002. The resulting basic salary was P12,000.00.
E) Applying the above-mentioned policy, Mr. Octavio's basic salary was
adjusted to the minimum salary of the new position, which is P13,730.00.
Issue # 2:
All regularized supervisory employees as of January 1 are not entitled to the
GUTS CBA increase. However, as agreed with GUTS in the grievance case of 18
personnel of International & Luzon Core Network Management Center, probationary
employees who were hired outside of PLDT and regularized as
supervisors/management personnel on January 1, 2002 shall be entitled to GUTS
CBA. This decision shall be applied prospectively and all previous similar cases are
not covered.

FACTS:
In 1992, the Department of Education, Culture and Sports (DECS) issued the Revised
Manual of Regulations for Private Schools, 1 Article IX, Section 44, paragraph 1 (a),
of which requires college faculty members to have a master's degree as a minimum
educational qualification for acquiring regular status.

ISSUE:
Whether or not the decision of the Grievance Committee is binding

UE hired respondent Mariti D. Bueno in 1997 and respondent Analiza F. Pepanio in


2000, both on a semester-to-semester basis to teach in its college. They could not
qualify for probationary or regular status because they lacked postgraduate degrees.
Bueno enrolled in six postgraduate subjects at the Philippine Normal University's
graduate school but there is no evidence that she finished her course. Pepanio
earned 27 units in her graduate studies at the Gregorio Araneta University
Foundation but these could no longer be credited to her because she failed to
continue with her studies within five years.

HELD:
YES. It is settled that "when parties have validly agreed on a procedure for resolving
grievances and to submit a dispute to voluntary arbitration then that procedure
should be strictly observed." Moreover, we have held time and again that "before a
party is allowed to seek the intervention of the court, it is a precondition that he
should have availed of all the means of administrative processes afforded him.
Hence, if a remedy within the administrative machinery can still be resorted to by
giving the administrative officer concerned every opportunity to decide on a matter
that comes within his jurisdiction, then such remedy should be exhausted first
before the courts judicial power can be sought. The premature invocation of the
courts judicial intervention is fatal to ones cause of action." "The underlying
principle of the rule on exhaustion of administrative remedies rests on the
presumption that when the administrative body, or grievance machinery, is afforded
a chance to pass upon the matter, it will decide the same correctly."
By failing to question the Committee Resolution through the proper procedure
prescribed in the CBA, that is, by raising the same before a Board of Arbitrators,

In 1994 petitioner University of the East (UE) and the UE Faculty Association
executed a five-year Collective Bargaining Agreement (CBA) with effect up to 1999
which provided, among others, that UE shall extend only semester-to-semester
appointments to college faculty staffs who did not possess the minimum
qualifications. Those with such qualifications shall be given probationary
appointments and their performance on a full-time or full-load basis shall be
reviewed for four semesters.
Meantime, on February 7, 1996 several concerned government agencies issued
DECS-CHED-TESDA-DOLE Joint Order 1 which reiterated the policy embodied in the
Manual of Regulations that "teaching or academic personnel who do not meet the
minimum academic qualifications shall not acquire tenure or regular status." In
consonance with this, the UE President issued a University Policy stating that,
beginning the School Year 1996-1997, it would hire those who have no postgraduate
units or master's degree for its college teaching staffs, in the absence of qualified
applicants, only on a semester-to-semester basis.

In 2001 UE and the UE Faculty Association entered into a new CBA that would have
the school extend probationary full-time appointments to full-time faculty members
who did not yet have the required postgraduate degrees provided that the latter
comply with such requirement within their probationary period. The CBA granted UE,
however, the option to replace these appointees during their probationary period if a
qualified teacher becomes available at the end of the semester.
Pursuant to the new CBA, UE extended probationary appointments to respondents
Bueno and Pepanio. Two years later in October 2003, the Dean of the UE College of
Arts and Sciences, petitioner Eleanor Javier, sent notices to probationary faculty
members, reminding them of the expiration of the probationary status of those

lacking in postgraduate qualification by the end of the first semester of the School
Year 2003-2004. Pepanio replied that she was enrolled at the Polytechnic University
of the Philippines Graduate School. Bueno, on the other hand, replied that she was
not interested in acquiring tenure as she was returning to her province.
In any event, Dean Javier subsequently issued a memorandum, stating that she
would recommend the extension of the probationary appointees for two more
semesters for those who want it based on the wishes of the University President.
Respondent Pepanio requested a three-semester extension but Dean Javier denied
this request and directed Pepanio to ask for just a two-semester extension. The
records do not show if Bueno submitted a request for extension. At any rate, the
school eventually wrote respondents, extending their probationary period but
neither Pepanio nor Bueno reported for work.
Bueno later wrote UE, demanding that it consider her a regular employee based on
her six-and-a-half-year service on a full-load basis, given that UE hired her in 1997
when what was in force was still the 1994 CBA. Pepanio made the same demand,
citing her three-and-a-half years of service on a full-load basis. When UE did not
heed their demands, respondents filed cases of illegal dismissal against the school
before the Labor Arbiter's (LA) office.
For its defense, UE countered that it never regarded respondents as regular
employees since they did not hold the required master's degree that government
rules required as minimum educational qualification for their kind of work.
On March 10, 2005 the LA held that Bueno and Pepanio were regular employees,
given that they taught at UE for at least four semesters under the old CBA. The new
CBA, said the LA, could not deprive them of the employment benefits they already
enjoyed. Since UE enjoined Pepanio from attending her classes and since it did not
give Bueno any teaching load, they were dismissed without just cause. The LA
directed UE to reinstate respondents with backwages. Dissatisfied, UE appealed to
the National Labor Relations Commission (NLRC).
Bueno and Pepanio questioned the timeliness of the appeal to the NLRC. They
pointed to the postmaster's certification that its office received the mail containing
the LA's Decision on March 17, 2005 and "informed the Office of Atty. Mison right
away but they only got the letter on April 4, 2005." Bueno and Pepanio claim that
the 10-day period for appeal should be counted from March 22, 2005, five days after
the postmaster's first notice to Atty. Mison to claim his mail.
On September 27, 2006 the NLRC Third Division set aside the LA Decision. It
rejected the technical objection and ruled that the four-semester probationary period
provided under the old CBA did not automatically confer permanent status to Bueno
and Pepanio. They still had to meet the standards for permanent employment
provided under the Manual of Regulations and the Joint Order mentioned above. The
non-renewal of their contract was based on their failure to obtain the required
postgraduate degrees and cannot, therefore, be regarded as illegal.
On petition for certiorari, the Court of Appeals (CA) rendered a Decision on July 9,
2010, reinstating the LA's Decision by reason of technicality. It held that the 10-day
period for appeal already lapsed when UE filed it on April 14, 2005 since the
reckoning period should be counted five days from March 17, when the postmaster
gave notice to UE's legal counsel to claim his mail or from March 22, 2005. This
prompted UE to file the present petition.

Respondents point out, however, that the petition should be denied since it failed to
enclose a certification from the UE Board of Trustees, authorizing petitioner Dean
Javier to sign the verification and certification of non-forum shopping.
ISSUE:
Whether or not UE illegally dismissed Bueno and Pepanio
HELD:
NO. Respondents argue that UE hired them in 1997 and 2000, when what was in
force was the 1994 CBA between UE and the faculty union. Since that CBA did not
yet require a master's degree for acquiring a regular status and since respondents
had already complied with the three requirements of the CBA, namely, (a) that they
served full-time; (b) that they rendered three consecutive years of service; and (c)
that their services were satisfactory, they should be regarded as having attained
permanent or regular status.
But the policy requiring postgraduate degrees of college teachers was provided in
the Manual of Regulations as early as 1992. Indeed, recognizing this, the 1994 CBA
provided even then that UE was to extend only semester-to-semester appointments
to college faculty staffs, like respondents, who did not possess the minimum
qualifications for their positions.
Besides, as the Court held in Escorpizo v. University of Baguio, a school CBA must be
read in conjunction with statutory and administrative regulations governing faculty
qualifications. Such regulations form part of a valid CBA without need for the parties
to make express reference to it. While the contracting parties may establish such
stipulations, clauses, terms and conditions, as they may see fit, the right to contract
is still subject to the limitation that the agreement must not be contrary to law or
public policy.
The State through Batas Pambansa Bilang 232 (The Education Act of 1982)
delegated the administration of the education system and the supervision and
regulation of educational institutions to the Ministry of Education, Culture and Sports
(now Department of Education). Accordingly, in promulgating the Manual of
Regulations, DECS was exercising its power of regulation over educational
institutions, which includes prescribing the minimum academic qualifications for
teaching personnel.
In 1994 the legislature transferred the power to prescribe such qualifications to the
Commission on Higher Education (CHED). CHED's charter authorized it to set
minimum standards for programs and institutions of higher learning. The Manual of
Regulations continued to apply to colleges and universities and suppletorily the Joint
Order until 2010 when CHED issued a Revised Manual of Regulations which
specifically applies only to institutions involved in tertiary education. ECTHIA
The requirement of a masteral degree for tertiary education teachers is not
unreasonable. The operation of educational institutions involves public interest. The
government has a right to ensure that only qualified persons, in possession of
sufficient academic knowledge and teaching skills, are allowed to teach in such
institutions. Government regulation in this field of human activity is desirable for
protecting, not only the students, but the public as well from ill-prepared teachers,
who are lacking in the required scientific or technical knowledge. They may be
required to take an examination or to possess postgraduate degrees as prerequisite
to employment.

Respondents were each given only semester-to-semester appointments from the


beginning of their employment with UE precisely because they lacked the required
master's degree. It was only when UE and the faculty union signed their 2001 CBA
that the school extended petitioners a conditional probationary status subject to
their obtaining a master's degree within their probationary period. It is clear,
therefore, that the parties intended to subject respondents' permanent status
appointments to the standards set by the law and the university.
Here, UE gave respondents Bueno and Pepanio more than ample opportunities to
acquire the postgraduate degree required of them. But they did not take advantage
of such opportunities. Justice, fairness, and due process demand that an employer
should not be penalized for situations where it had little or no participation or
control.
FACULTY ASSOCIATION OF MAPUA INSTITUTE OF TECHNOLOGY (FAMIT) vs.
HON. COURT OF APPEALS, and MAPUA INSTITUTE OF TECHNOLOGY
FACTS:
MIT presented a new faculty ranking instrument to FAMIT. FAMIT agreed its adoption
and implementation, provided there is no diminution in rank and pay of the faculty
members. This new ranking system for the college faculty was incorporated in the
new CBA. After a month, MIT requested for amendments to the CBA, specifically as
to the ranking sheet attached as annex to the CBA. FAMIT rejected contending that
the changes would violate the CBA and result in the diminution of rank and benefits
of the college faculty. Meanwhile, MIT instituted some changes in the curriculum
which resulted in changes in the number of hours for certain subjects. Thus, MIT
adopted a new formula for determining the pay rates of the high school faculty.
FAMIT opposed the formula. FAMIT met with MIT to settle this but failed. MIT insisted
its right to change the pay formula used. The controversy was brought to the NCMB;
then was referred to voluntary arbitration. The Panel of VAs ruled in favor of FAMIT.
CA reversed.
ISSUES:
1) Is MITs new proposal, regarding faculty ranking and evaluation, lawful and
consistent with the ratified CBA?
2) Is MITs development of a new pay formula for the high school department,
without the knowledge of FAMIT, lawful and consistent with the ratified CBA?
HELD:
1) Considering the submissions of the parties, in the light of the existing CBA, we
find that the new point range system proposed by MIT is an unauthorized
modification of Annex C of the 2001 CBA. It is made up of a faculty classification
that is substantially different from the one originally incorporated in the current CBA
between the parties. Thus, the proposed system contravenes the existing provisions
of the CBA, hence, violative of the law between the parties.
2) MIT cannot adopt its unilateral interpretation of terms in the CBA. It is clear from
the provisions of the 2001 CBA that the salary of a high school faculty member is
based on a rate per load and not on a rate per hour basis. In our view, there is no
room for unilateral change of the formula by MIT. Needless to stress, the Labor Code
is specific in enunciating that in case of doubt in the interpretation of any law or
provision affecting labor, such should be interpreted in favor of labor. The appellate
court committed a grave error in the interpretation of the CBA provision and the
governing law.

TSPIC CORPORATION vs. TSPIC EMPLOYEES UNION (FFW), representing


MARIA FE FLORES, FE CAPISTRANO, AMY DURIAS, 1 CLAIRE EVELYN VELEZ,
JANICE OLAGUIR, JERICO ALIPIT, GLEN BATULA, SER JOHN HERNANDEZ,
RACHEL NOVILLAS, NIMFA ANILAO, ROSE SUBARDIAGA, VALERIE CARBON,
OLIVIA EDROSO, MARICRIS DONAIRE, ANALYN AZARCON, ROSALIE
RAMIREZ, JULIETA ROSETE, JANICE NEBRE, NIA ANDRADE, CATHERINE YABA,
DIOMEDISA ERNI, 2 MARIO SALMORIN, LOIDA COMULLO, 3 MARIE ANN
DELOS SANTOS, 4 JUANITA YANA, and SUZETTE DULAY
FACTS:
TSPIC is engaged in the business of designing, manufacturing, and marketing
integrated circuits to serve the communication, automotive, data processing, and
aerospace industries. Respondent TSPIC Employees Union (FFW) (Union), on the
other hand, is the registered bargaining agent of the rank-and-file employees of
TSPIC. The respondents, Maria Fe Flores, Fe Capistrano, Amy Durias, Claire Evelyn
Velez, Janice Olaguir, Jerico Alipit, Glen Batula, Ser John Hernandez, Rachel Novillas,
Nimfa Anilao, Rose Subardiaga, Valerie Carbon, Olivia Edroso, Maricris Donaire,
Analyn Azarcon, Rosalie Ramirez, Julieta Rosete, Janice Nebre, Nia Andrade,
Catherine Yaba, Diomedisa Erni, Mario Salmorin, Loida Comullo, Marie Ann Delos
Santos, Juanita Yana, and Suzette Dulay, are all members of the Union.
In 1999, TSPIC and the Union entered into a Collective Bargaining Agreement (CBA)
for the years 2000 to 2004. The CBA included a provision on yearly salary increases
starting January 2000 until January 2002.
Consequently, on January 1, 2000, all the regular rank-and-file employees of TSPIC
received a 10% increase in their salary. Accordingly, the following nine (9)
respondents (first group) who were already regular employees received the said
increase in their salary: Maria Fe Flores, Fe Capistrano, Amy Durias, Claire Evelyn
Velez, Janice Olaguir, Jerico Alipit, Glen Batula, Ser John Hernandez, and Rachel
Novillas.
The CBA also provided that employees who acquire regular employment status
within the year but after the effectivity of a particular salary increase shall receive a
proportionate part of the increase upon attainment of their regular status.
Then on October 6, 2000, the Regional Tripartite Wage and Productivity Board,
National Capital Region, issued Wage Order No. NCR-08 10 (WO No. 8) which raised
the daily minimum wage from PhP223.50 to PhP250 effective November 1, 2000.
Conformably, the wages of 17 probationary employees, namely: Nimfa Anilao, Rose
Subardiaga, Valerie Carbon, Olivia Edroso, Maricris Donaire, Analyn Azarcon, Rosalie
Ramirez, Julieta Rosete, Janice Nebre, Nia Andrade, Catherine Yaba, Diomedisa Erni,
Mario Salmorin, Loida Comullo, Marie Ann Delos Santos, Juanita Yana, and Suzette
Dulay (second group), were increased to PhP250.00 effective November 1, 2000.
On various dates during the last quarter of 2000, the above named 17 employees
attained regular employment and received 25% of 10% of their salaries as granted
under the provision on regularization increase under Article X, Sec. 2 of the CBA.
In January 2001, TSPIC implemented the new wage rates as mandated by the CBA.
As a result, the nine employees (first group), who were senior to the above-listed
recently regularized employees, received less wages.
On January 19, 2001, a few weeks after the salary increase for the year 2001
became effective, TSPIC's Human Resources Department notified 24 employees,

namely: Maria Fe Flores, Janice Olaguir, Rachel Novillas, Fe Capistrano, Jerico Alipit,
Amy Durias, Glen Batula, Claire Evelyn Velez, Ser John Hernandez, Nimfa Anilao,
Rose Subardiaga, Valerie Carbon, Olivia Edroso, Maricris Donaire, Analyn Azarcon,
Rosalie Ramirez, Julieta Rosete, Janice Nebre, Nia Andrade, Catherine Yaba,
Diomedisa Erni, Mario Salmorin, Loida Comullo, and Marie Ann Delos Santos, that
due to an error in the automated payroll system, they were overpaid and the
overpayment would be deducted from their salaries in a staggered basis, starting
February 2001. TSPIC explained that the correction of the erroneous computation
was based on the crediting provision of Sec. 1, Art. X of the CBA.
The Union, on the other hand, asserted that there was no error and the deduction of
the alleged overpayment from employees constituted diminution of pay. The issue
was brought to the grievance machinery, but TSPIC and the Union failed to reach an
agreement.
Consequently, TSPIC and the Union agreed to undergo voluntary arbitration on the
solitary issue of whether or not the acts of the management in making deductions
from the salaries of the affected employees constituted diminution of pay.
On September 13, 2001, Arbitrator Jimenez rendered a Decision, holding that the
unilateral deduction made by TSPIC violated Art. 100 of the Labor Code.
ISSUE:
HELD:
It is familiar and fundamental doctrine in labor law that the CBA is the law between
the parties and they are obliged to comply with its provisions. 16 We said so in
Honda Phils., Inc. v. Samahan ng Malayang Manggagawa sa Honda:
A collective bargaining agreement or CBA refers to the 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 contracts, the parties in 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.
Moreover, if the terms of a contract, as in a CBA, are clear and leave no doubt upon
the intention of the contracting parties, the literal meaning of their stipulations shall
control. However, sometimes, as in this case, though the provisions of the CBA seem
clear and unambiguous, the parties sometimes arrive at conflicting interpretations.
Here, TSPIC wants to credit the increase granted by WO No. 8 to the increase
granted under the CBA. According to TSPIC, it is specifically provided in the CBA that
"the salary/wage increase for the year 2001 shall be deemed inclusive of the
mandated minimum wage increases under future wage orders that may be issued
after Wage Order No. 7." The Union, on the other hand, insists that the "crediting"
provision of the CBA finds no application in the present case, since at the time WO
No. 8 was issued, the probationary employees (second group) were not yet covered
by the CBA, particularly by its crediting provision.
As a general rule, in the interpretation of a contract, the intention of the parties is to
be pursued. Littera necat spiritus vivificat. An instrument must be interpreted
according to the intention of the parties. It is the duty of the courts to place a
practical and realistic construction upon it, giving due consideration to the context in
which it is negotiated and the purpose which it is intended to serve. Absurd and

illogical interpretations should also be avoided. Considering that the parties have
unequivocally agreed to substitute the benefits granted under the CBA with those
granted under wage orders, the agreement must prevail and be given full effect.
Paragraph (b) of Sec. 1 of Art. X of the CBA provides for the general agreement that,
effective January 1, 2001, all employees on regular status and within the bargaining
unit on or before said date shall be granted a salary increase equivalent to twelve
(12%) of their basic monthly salary as of December 31, 2000. The 12% salary
increase is granted to all employees who (1) are regular employees and (2) are
within the bargaining unit.
Second paragraph of (c) provides that the salary increase for the year 2000 shall not
include the increase in salary granted under WO No. 7 and the correction of the
wage distortion for November 1999.
The last paragraph, on the other hand, states the specific condition that the
wage/salary increases for the years 2001 and 2002 shall be deemed inclusive of the
mandated minimum wage increases under future wage orders, that may be issued
after WO No. 7, and shall be considered as correction of the wage distortions that
may be brought about by the said future wage orders. Thus, the wage/salary
increases in 2001 and 2002 shall be deemed as compliance to future wage orders
after WO No. 7.
Paragraph (b) is a general provision which allows a salary increase to all those who
are qualified. It, however, clashes with the last paragraph which specifically states
that the salary increases for the years 2001 and 2002 shall be deemed inclusive of
wage increases subsequent to those granted under WO No. 7. It is a familiar rule in
interpretation of contracts that conflicting provisions should be harmonized to give
effect to all. Likewise, when general and specific provisions are inconsistent, the
specific provision shall be paramount to and govern the general provision. Thus, it
may be reasonably concluded that TSPIC granted the salary increases under the
condition that any wage order that may be subsequently issued shall be credited
against the previously granted increase. The intention of the parties is clear: As long
as an employee is qualified to receive the 12% increase in salary, the employee
shall be granted the increase; and as long as an employee is granted the 12%
increase, the amount shall be credited against any wage order issued after WO No.
7.
Respondents should not be allowed to receive benefits from the CBA while avoiding
the counterpart crediting provision. They have received their regularization
increases under Art. X, Sec. 2 of the CBA and the yearly increase for the year 2001.
They should not then be allowed to avoid the crediting provision which is an
accompanying condition.
Respondents attained regular employment status before January 1, 2001. WO No. 8,
increasing the minimum wage, was issued after WO No. 7. Thus, respondents
rightfully received the 12% salary increase for the year 2001 granted in the CBA;
and consequently, TSPIC rightfully credited that 12% increase against the increase
granted by WO No. 8.
LEPANTO CONSOLIDATED MINING COMPANY vs. LEPANTO LOCAL STAFF
UNION
FACTS:

On 28 November 1998, petitioner and respondent entered into their fourth


Collective Bargaining Agreement (4th CBA) for the period from 1 July 1998 to 30
June 2000. The 4th CBA provides:
ARTICLE VIII NIGHT SHIFT DIFFERENTIAL
Section 3. Night Differential pay. The Company shall continue to
pay nightshift differential for work during the first and third shifts
to all covered employees within the bargaining unit as follows:
For the First Shift (11:00 p.m. to 7:00 a.m.), the
differential pay will be 20% of the basic rate. For the Third
Shift (3:00 p.m. to 11:00 p.m.), the differential pay will be
15% of the basic rate.
However, for overtime work, which extends beyond the
regular day shift (7:00 a.m. to 3:00 p.m.), there [will] be
no night differential pay added before the overtime pay is
calculated.
ARTICLE XII RIGHTS, PRIVILEGES AND OTHER BENEFITS
Section 9. Longevity pay. The company shall grant longevity pay
of P30.00 per month effective July 1, 1998 and every year
thereafter.
On 23 April 2000, respondent filed a complaint with the National Conciliation and
Mediation Board, Cordillera Administrative Region (NCMB-CAR) alleging that
petitioner failed to pay the night shift differential and longevity pay of respondent's
members as provided in the 4th CBA. Petitioner and respondent failed to amicably
settle the dispute. They agreed to submit the issues to Voluntary Arbitrator Norma B.
Advincula (Voluntary Arbitrator) for resolution.
ISSUE:
Whether the Court of Appeals erred in affirming the Voluntary Arbitrator's
interpretation of the 4th CBA that the employees in the second shift are entitled to
night shift differential
HELD:
The terms and conditions of a collective bargaining contract constitute the law
between the parties. 9 If the terms of the CBA are clear and have no doubt upon the
intention of the contracting parties, the literal meaning of its stipulation shall prevail.
The disputed provision of the 4th CBA provides:
ARTICLE VIII NIGHT SHIFT DIFFERENTIAL
Section 3. Night Differential pay. The Company shall continue to
pay nightshift differential for work during the first and third shifts
to all covered employees within the bargaining unit as follows:
For the First Shift (11:00 p.m. to 7:00 a.m.), the
differential pay will be 20% of the basic rate. For the Third
Shift (3:00 p.m. to 11:00 p.m.), the differential pay will be
15% of the basic rate.
However, for overtime work, which extends beyond the
regular day shift (7:00 a.m. to 3:00 p.m.), there [will] be
no night differential pay added before the overtime pay is
calculated.

There is no question that workers are entitled to night shift differential of 20% of the
basic rate for work performed during the first shift from 11:00 p.m. to 7:00 a.m.
Workers are also entitled to night shift differential of 15% of the basic rate for work
performed during the third shift from 3:00 p.m. to 11:00 p.m. The issue is whether
workers are entitled to night shift differential for work performed beyond the regular
day shift, from 7:00 a.m. to 3:00 p.m.
We sustain the interpretation of both the Voluntary Arbitrator and the Court of
Appeals. The first paragraph of Section 3 provides that petitioner shall continue to
pay night shift differential to workers of the first and third shifts. It does not provide
that workers who performed work beyond the second shift shall not be entitled to
night shift differential. The inclusion of the third paragraph is not intended to
exclude the regular day shift workers from receiving night shift differential for work
performed beyond 3:00 p.m. It only provides that the night shift differential pay shall
be excluded in the computation of the overtime pay.
It is settled that in order to ascertain the intention of the contracting parties, the
Voluntary Arbitrator shall principally consider their contemporaneous and
subsequent acts as well as their negotiating and contractual history and evidence of
past practices. 11 In this case, the Voluntary Arbitrator and the Court of Appeals
both found that the provision in question was contained in the 1st, 2nd, and 3rd
CBAs between petitioner and respondent. During the effectivity of the first three
CBAs, petitioner paid night shift differentials to other workers who were members of
respondent for work performed beyond 3:00 p.m. Petitioner also paid night shift
differential for work beyond 3:00 p.m. during the effectivity of the 4th CBA.
Petitioner alleges that the payment of night shift differential for work performed
beyond 3:00 p.m. during the 4th CBA was a mistake on the part of its accounting
department. However, the Court of Appeals correctly ruled that petitioner failed to
present any convincing evidence to prove that the payment was erroneous. In fact,
the Court of Appeals found that even after the promulgation of the Voluntary
Arbitrator's decision and while the case was pending appeal, petitioner still paid
night shift differential for work performed beyond 3:00 p.m. It affirms the intention of
the parties to the CBA to grant night shift differential for work performed beyond
3:00 p.m.
HALAGUEA v. PAL
FACTS:
Petitioners were employed as female flight attendants of respondent Philippine
Airlines (PAL) on different dates prior to November 22, 1996. They are members of
the Flight Attendants and Stewards Association of the Philippines (FASAP), a labor
organization certified as the sole and exclusive certified as the sole and exclusive
bargaining representative of the flight attendants, flight stewards and pursers of
respondent.
On July 11, 2001, respondent and FASAP entered into a Collective Bargaining
Agreement incorporating the terms and conditions of their agreement for the years
2000 to 2005, hereinafter referred to as PAL-FASAP CBA.
Section 144, Part A of the PAL-FASAP CBA, provides that:
A. For the Cabin Attendants hired before 22 November
1996:
xxxx
3.
Compulsory Retirement

Subject to the grooming standards provisions of this Agreement,


compulsory retirement shall be fifty-five (55) for females and sixty
(60) for males. x x x.
In a letter dated July 22, 2003, petitioners and several female cabin crews
manifested that the aforementioned CBA provision on compulsory retirement is
discriminatory, and demanded for an equal treatment with their male counterparts.
This demand was reiterated in a letter by petitioners' counsel addressed to
respondent demanding the removal of gender discrimination provisions in the
coming re-negotiations of the PAL-FASAP CBA.
On July 29, 2004, petitioners filed a Special Civil Action for Declaratory Relief with
Prayer for the Issuance of Temporary Restraining Order and Writ of Preliminary
Injunction with the Regional Trial Court (RTC) of Makati City, Branch 147
ISSUE:
Whether the RTC has jurisdiction over the petitioners' action challenging the legality
or constitutionality of the provisions on the compulsory retirement age contained in
the CBA between respondent PAL and FASAP
HELD:
Jurisdiction of the court is determined on the basis of the material allegations of the
complaint and the character of the relief prayed for irrespective of whether plaintiff
is entitled to such relief.
The said issue cannot be resolved solely by applying the Labor Code. Rather,
it requires the application of the Constitution, labor statutes, law on contracts and
the Convention on the Elimination of All Forms of Discrimination Against Women,
and the power to apply and interpret the constitution and CEDAW is within the
jurisdiction of trial courts, a court of general jurisdiction.
In Georg Grotjahn GMBH & Co. v. Isnani, this Court held that not every dispute
between an employer and employee involves matters that only labor arbiters and
the NLRC can resolve in the exercise of their adjudicatory or quasi-judicial powers.
The jurisdiction of labor arbiters and the NLRC under Article 217 of the Labor Code is
limited to disputes arising from an employer-employee relationship which can only
be resolved by reference to the Labor Code, other labor statutes, or their collective
bargaining agreement.
Where the principal relief sought is to be resolved not by reference to the Labor
Code or other labor relations statute or a collective bargaining agreement but by the
general civil law, the jurisdiction over the dispute belongs to the regular courts of
justice and not to the labor arbiter and the NLRC. In such situations, resolution of the
dispute requires expertise, not in labor management relations or in wage structures
and other terms and conditions of employment, but rather in the application of the
general civil law. Clearly, such claims fall outside the area of competence or
expertise ordinarily ascribed to labor arbiters and the NLRC and the rationale for
granting jurisdiction over such claims to these agencies disappears.
VISAYAN ELECTRIC COMPANY EMPLOYEES UNION-ALU-TUCP and CASMERO
MAHILUM vs. VISAYAN ELECTRIC COMPANY, INC. (VECO)
FACTS:

Respondent Visayan Electric Company, Inc. (VECO) is a corporation engaged in the


supply and distribution of electricity in Cebu City and its neighboring cities,
municipalities, and barangays. The Union is the exclusive bargaining agent of
VECO's rank-and-file employees, and Mahilum was the Union's president from
October 2007 until his termination from employment on October 28, 2010.
It was claimed that, before Mahilum was elected as union officer, he was transferred
from VECO's Public Relations Section to its Administrative Services Section without
any specific work. When he was elected as union secretary, he was transferred to
the Line Services Department as its Customer Service Representative. At the time of
his election as union president, VECO management allegedly: (a) terminated active
union members without going through the grievance machinery procedure
prescribed under the Collective Bargaining Agreement (CBA); (b) refused to
implement the profit-sharing scheme provided under the same CBA; (c) took back
the motorbikes issued to active union members; and (d) revised the electricity
privilege granted to VECO's employees.
Thus, on May 1, 2009, union members marched on the streets of Cebu City to
protest VECO's refusal to comply with the political and economic provisions of the
CBA. Mahilum and other union officers were interviewed by the media, and they
handed out a document containing their grievances against VECO, the gist of which
came out in local newspapers. Following said incident, Mahilum was allegedly
demoted as warehouse staff to isolate him and restrict his movements. Other union
officers were transferred to positions that will keep them away from the general
union membership.
On May 8, 2009, Mahilum was issued a Notice to Explain why he should not be
terminated from service due to loss of trust and confidence, as well as in violating
the Company Code of Discipline, for causing the publication of what VECO deemed
as a libelous article. The other union officers likewise received similar notices for
them to explain their actions, which they justified as merely an expression of their
collective sentiments against the treatment of VECO's management towards them.
On May 20, 2009, the union officers were notified of the administrative investigation
to be conducted relative to the charges against them. During the scheduled
investigation, the Union's counsel initially raised its objection to the proceedings and
insisted that the investigation should be conducted through the grievance
machinery procedure, as provided in the CBA. However, upon the agreement to
proceed with the investigation of the Union Vice President, Renato Gregorio M.
Gimenez (Gimenez), through his own counsel, Mahilum and the other union officers
likewise agreed to proceed with the aforesaid investigation, with Gimenez's counsel
representing the Union.
Prior to the said investigation, the Union filed on May 18, 2009, a Notice of Strike
with the National Conciliation and Mediation Board (NCMB) against VECO, which
facilitated a series of conferences that yielded a Memorandum of Agreement (MOA)
signed by the parties on August 7, 2009. The parties likewise put to rest the critical
issue of electricity privilege and agreed before the NCMB on a conversion rate of
said privilege to basic pay. Moreover, the administrative investigation on the alleged
libelous publication was deferred until after the CBA renegotiation.
However, even before the conclusion of the CBA renegotiation on June 28, 2010,
several complaints for libel were filed against Mahilum and the other union officers
by VECO's Executive Vice President and Chief Operating Officer Jaime Jose Y. Aboitiz.
The administrative hearing on the charges against Mahilum resumed with due notice
to the latter, but he protested the same, referring to it as "moro-moro" or "kangaroo"

and insisting that the investigation should follow the grievance machinery procedure
under the CBA. Nonetheless, VECO's management carried on with its investigation
and, on the basis of the findings thereof, issued a notice terminating Mahilum from
employment on October 28, 2010.
On even date, the Union filed another Notice of Strike with the NCMB against VECO
on the grounds of unfair labor practice, specifically union busting for the dismissal
and/or suspension of its union president and officers, refusal to bargain collectively,
as well as non-observance of the grievance procedure in their CBA. To avert any
work stoppage that will prejudice VECO's power distribution activity, the Secretary of
Labor intervened and issued an Order 33 dated November 10, 2010 certifying the
labor dispute to the NLRC for compulsory arbitration. Consequently, the strike was
enjoined; Mahilum was ordered reinstated in the payroll; and the parties were
directed to refrain from committing any act that would exacerbate the situation.
ISSUE:
HELD:
Under Section 4, Rule 65 of the 1997 Rules of Civil Procedure, certiorari should be
filed "not later than sixty (60) days from notice of the judgment, order or resolution"
sought to be assailed. The provisions on reglementary periods are strictly applied,
indispensable as they are to the prevention of needless delays, and are necessary to
the orderly and speedy discharge of judicial business. The timeliness of filing a
pleading is a jurisdictional caveat that even this Court cannot trifle with. 56
The Union admittedly 57 received on August 18, 2011 the NLRC's July 29, 2011
Resolution, which denied their motion for reconsideration of the NLRC's June 30,
2011 Decision. Therefore, the 60-day period within which to file a petition for
certiorari ended on October 17, 2011. But the certiorari petition was filed one day
after, or on October 18, 2011. Thus, petitioners' failure to file said petition within the
required 60-day period rendered the NLRC's Decision and Resolution impervious to
any attack through a Rule 65 petition for certiorari, and no court can exercise
jurisdiction to review the same. 58
Petitioners adamantly insist, however, that the "one-day delay occasioned by an
honest mistake in the computation of dates should have been overlooked by the CA
in favor of substantial justice." 59 Their former counsel, Atty. Asis, allegedly thought
in good faith that the month of August has thirty (30) days, and that sixty (60) days
from August 18, 2011 is October 18, 2011. 60
The Court is not convinced.
First. The fact that the delay in the filing of the petition for certiorari was only one
day is not a legal justification for non-compliance with the rule requiring that it be
filed not later than sixty (60) days from notice of the assailed judgment, order or
resolution. The Court cannot subscribe to the theory that the ends of justice would
be better subserved by allowing a petition for certiorari filed only one-day late.
When the law fixes sixty (60) days, it cannot be taken to mean also sixty-one (61)
days, as the Court had previously declared in this wise:
[W]hen the law fixes thirty days [or sixty days as in the present case], we cannot
take it to mean also thirty-one days. If that deadline could be stretched to thirty-one
days in one case, what would prevent its being further stretched to thirty-two days
in another case, and so on, step by step, until the original line is forgotten or buried
in the growing confusion resulting from the alterations? That is intolerable. We

cannot fix a period with the solemnity of a statute and disregard it like a joke. If law
is founded on reason, whim and fancy should play no part in its application. 61
Second. While it is always in the power of the Court to suspend its own rules, or to
except a particular case from its operation, 62 the liberality with which equity
jurisdiction is exercised must always be anchored on the basic consideration that the
same must be warranted by the circumstances obtaining in the case. 63 However,
there is no showing herein of any exceptional circumstance that may rationalize a
digression from the rule on timeliness of petitions.
Moreover, petitioners failed to satisfactorily show that the refusal of VECO to follow
the grievance machinery procedure under Section 4, Article XVII of the CBA in the
suspension and termination from employment of the other union officers and
members constituted unfair labor practice.
True, it is a fundamental doctrine in labor law that the CBA is the law between the
parties and they are obliged to comply with its provisions. If the provisions of the
CBA seem clear and unambiguous, the literal meaning of their stipulations shall
control. However, as in this case, when general and specific provisions of the CBA
are inconsistent, the specific provision shall be paramount to and govern the general
provision. 64
Section 4, Article XVII of the CBA states that "(a)ny difference of opinion,
controversy, dispute problem or complaint arising from Company-Union or CompanyWorker relations concerning the interpretation or application of this Agreement or
regarding any matter affecting Company-Union or Company-Worker relations shall
be considered a grievance." 65 On the other hand, under Section 13, Article XIV,
"(t)he Company agrees that henceforth there shall be a fair and uniform application
of its rules and regulations. It is understood that disciplinary actions imposed on
employee or laborer shall be governed by the rules and regulations promulgated by
the Company as well as those provided for by existing laws on the matter." 66
The Court is in accord with the ratiocination of the NLRC that the sweeping
statement "any matter affecting Company-Union or Company-Worker relations shall
be considered a grievance" under Section 4, Article XVII is general, as opposed to
Section 13, Article XIV of the CBA, which is specific, as it precisely refers to "what
governs employee disciplinary actions." 67 Thus, the NLRC correctly ruled that VECO
acted within the bounds of law when it proceeded with its administrative
investigation of the charges against other union officers and members.
This is consistent with jurisprudential rulings supporting an employer's free reign
and "wide latitude of discretion to regulate all aspects of employment, including the
prerogative to instill discipline in its employees and to impose penalties, including
dismissal, upon erring employees. This is management prerogative, where the free
will of management to conduct its own affairs to achieve its purpose takes form. The
only criterion to guide the exercise of its management prerogative is that the
policies, rules[,] and regulations on work-related activities of the employees must
always be fair and reasonable[,] and the corresponding penalties, when prescribed,
are commensurate to the offense involved and to the degree of the infraction." 68
The Labor Code does not excuse employees from complying with valid company
policies and reasonable regulations for their governance and guidance. 69
Delving now into the merits of Mahilum's dismissal, the Court holds that the two
requisites for a valid dismissal from employment have been met, namely: (1) it must
be for a just or authorized cause; and (2) the employee must be afforded due
process. 70
VECO anchored its termination of Mahilum on Article 282 (c) of the Labor Code and
Articles 5.1 and 4.4 71 of VECO's Company Code of Discipline, which read as follows:

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Article 282 (c) of the Labor Code:


Art. 282. Termination by Employer. An employer may terminate an employment
for any of the following causes:
xxx xxx xxx
(c) fraud or willful breach of trust by the employee of the trust reposed in him by his
employer or duly authorized representative;
Company Code of Discipline:
Art. 5.1 Every employee shall uphold company trust and confidence as well as the
trust relationship between the company and its customers/suppliers.
Art. 4.4 Every employee shall willfully respect the honor or person of his immediate
superior and/or department head or company officers.
VECO found the following "Press Release", 72 which Mahilum, together with other
union officers, caused to be published, as libelous for dishonoring and blackening
the memory of then corporate officer Luis Alfonso Y. Aboitiz, as well as for
maliciously impeaching and besmirching the company's name and reputation:
VECEU-ALU President, Casmero A. Mahilum, said that since 2004 up to present the
new VECO Management under the administration of the Aboitizes unceasingly attack
the local Union by continuously limit (sic) its membership and diminish (sic) and/or
abolish (sic) worker's benefits and privileges stipulated in the CBA. . . . . Through
clever use of psychological warfare, intimidation, deception, divide and rule tactic
and taking great advantage of the weakness of the Union especially of the
leadership during that time, the [new] Management under the late Alfonso Y. Aboitiz
was able to secure a Memorandum of Agreement (MOA) signed by the Union and
Management representatives and ratified by the General Membership that gave
Management more flexibility in dealing with labor. . . . .
xxx xxx xxx
The [l]ocal Union wrote a letter to Mr. Aboitiz expressing full support of his campaign
for energy conservation . . . . But Mr. Aboitiz was too hard and too arrogant to deal
with. . . . .
. . . . We, therefore, ask the general public to understand our plight and support our
actions. We also urge everyone to oppose any electricity rate increase filed by VECO
and NAPOCOR at the Energy Regulatory Commission (ERC). Any rate increase in the
electricity will only worsen the already burdened public and further increase profits
for the Aboitizes. The entire Union membership are one with you in condemning
such increase and brazen connivance of VECO and NAPOCOR to justify increases in
electricity rate. EcTCAD
xxx xxx xxx 73
The Court has consistently held that ". . . loss of trust and confidence must be based
on willful breach of the trust reposed in the employee by his employer. Such breach
is willful if it is done intentionally, knowingly, and purposely, without justifiable
excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or
inadvertently. Moreover, it must be based on substantial evidence and not on the
employer's whims or caprices or suspicions[,] otherwise, the employee would
eternally remain at the mercy of the employer. . . . . And, in order to constitute a just
cause for dismissal, the act complained of must be work-related and show that the
employee concerned is unfit to continue working for the employer. In addition, loss
of confidence . . . is premised on the fact that the employee concerned holds a
position of responsibility, trust, and confidence or that the employee concerned is
entrusted with confidence with respect to delicate matters, such as handling or care
and protection of the property and assets of the employer. The betrayal of this trust
is the essence of the offense for which an employee is penalized." 74
Mahilum's attempt to rationalize his act as part of his "moral, legal or social duty . . .
to make known his legitimate perception" 75 against VECO does not, in any way,
detract from the indubitable fact that he intentionally, knowingly, and purposely

caused the aforequoted "disparaging publication." Neither can he hide behind the
claim that the press release was simply "an expression of a valid grievance." 76 As
the NLRC aptly pointed out, "(i)nstead of him and the rest of the union officers
bringing their sentiments and/or grievances against the management to the proper
forum, they intentionally, knowingly and purposefully breached their employer's
trust, by issuing . . . derogatory statements and causing their publication,
apparently, to incite public condemnation against the latter." 77 It bears noting that,
while petitioners harp on the refusal of VECO to follow the grievance machinery
procedure under the CBA, they conveniently forgot that they themselves shunned
the very procedure to which they now hang by a thread.
Moreover, the Court is unmoved by Mahilum's insistence that there was nothing in
his position which called for management's trust and confidence in him. 78 The
NLRC, whose findings of facts and conclusions are generally accorded not only great
weight and respect but even with finality, correctly held that, as Customer Service
Representative, Mahilum occupied a position of responsibility especially in dealing
with VECO's clients. 79 His duties and responsibilities included: (1) accepting
pertinent documents and processing electrical service applications; (2) verifying
authenticity of documents submitted; (3) interviewing customer-applicant on
applications, complaints, and requests; (4) preparing job assignment of service
inspectors; (5) filing all service orders of inspectors; (6) assessing and accepting bill
deposits; (7) preparing and facilitating signing of Metered Service Contract; (8)
issuing service order for meter-related activities; (9) verifying existing account of
customer-applicant and approving account clearances; (10) accepting payment of
bills from customer-applicant for account clearances; and (11) processing payment
arrangements of customers. 80 His performance was measured according to how
he: (1) handled customers' transactions; (2) made decisions in processing
customers' applications and payment arrangements; and (3) maintained posture at
all times in handling customers' transactions even with angry customers. 81
It is clear from the foregoing that Mahilum was not an ordinary rank-and-file
employee. His job entailed the observance of proper company procedures relating to
processing and determination of electrical service applications culminating in the
signing of service contracts, which constitutes the very lifeblood of VECO's
existence. He was further entrusted with handling the accounts of customers and
accepting payments from them. Not only that, it was his duty to address customer
complaints and requests. Being a frontliner of VECO, with the most consistent and
direct interaction with customers, Mahilum's job involved a high degree of
responsibility requiring a substantial amount of trust and confidence on the part of
his employer, i.e., VECO.
However, with the derogatory statements issued by Mahilum that were intended to
incite, not just public condemnation of VECO, but antagonism and obstruction
against rate increases in electricity that it may be allowed, by law, to fix, there can
be no dispute that VECO, indeed, had lost its trust and confidence in Mahilum and
his ability to perform his tasks with utmost efficiency and loyalty expected of an
employee entrusted to handle customers and funds. Settled is the rule that an
employer cannot be compelled to retain an employee who is guilty of acts inimical
to the interests of the employer. A company has the right to dismiss its employee if
only as a measure of self-protection. 82
Thus, Mahilum was terminated for a just and valid cause. Moreover, as declared by
the NLRC, VECO complied with the procedural due process requirements of
furnishing Mahilum with two written notices before the termination of employment
can be effected. On May 8, 2009, 83 Mahilum was apprised of the particular acts for
which his termination was sought; and, after due investigation, he was given a

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Notice of Decision 84 on October 28, 2010 informing him of his dismissal from
service.
The fact that Mahilum served the company for a considerable period of time will not
help his cause. It is well to emphasize that the longer an employee stays in the
service of the company, the greater is his responsibility for knowledge and
compliance with the norms of conduct and the code of discipline in the company. 85

As a final word, while it is the state's responsibility to afford protection to labor, this
policy should not be used as an instrument to oppress management and capital. In
resolving disputes between labor and capital, fairness and justice should always
prevail. Social justice does not mandate that every dispute should be automatically
decided in favor of labor. Justice is to be granted to the deserving and dispensed in
the light of the established facts and the applicable law and doctrine.

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