1. States Marine Corp. vs. Cebu Seamen’s Assc.
whether foreign-hires should be included in the appropriate
Facts: On September 12, 1952, the respondent union filed
with the Court of Industrial Relations (CIR), a petition (Case
No. 740-V) against the States Marine Corporation, later
amended on May 4, 1953, by including as party respondent,
the petitioner Royal Line, Inc. The Union alleged that that after
the Minimum Wage Law had taken effect, the petitioners
required their employees on board their vessels, to pay the
sum of P.40 for every meal, while the masters and officers
were not required to pay their meals.
The petitioners’ shipping companies, answering, averred that
in enacting Rep. Act No. 602 (Minimum Wage Law), the
Congress had in mind that the amount of P.40 per meal,
furnished to employees should be deducted from the daily
wages.
Issue: WON meals are deductable from wages.
Held: It is argued that the food or meals given to the deck
officers, marine engineers and unlicensed crew members in
question, were mere “facilities” which should be deducted
from wages, and not “supplements” which, according to said
section 19, should not be deducted from such wages, because
it is provided therein: “Nothing in this Act shall deprive an
employee of the right to such fair wage … or in reducing
supplements furnished on the date of enactment.” In the case
of Atok-Big Wedge Assn. v. Atok-Big Wedge Co., L-7349, July
19, 1955; 51 O.G. 3432, the two terms are defined as follows
— State has the right and duty to regulate the relations between
“Supplements”, therefore, constitute extra remuneration or
special privileges or benefits given to or received by the
laborers over and above their ordinary earnings or wages.
“Facilities”, on the other hand, are items of expense necessary
for the laborer’s and his family’s existence and subsistence so
that by express provision of law (Sec. 2[g]), they form part of
the wage and when furnished by the employer are deductible
therefrom, since if they are not so furnished, the laborer would
spend and pay for them just the same.
Facilities may be charged to or deducted from wages.
Supplements, on the other hand, may not be so charged.
Thus, when meals are freely given to crew members of a
vessel while they were on the high seas, not as part of their
wages but as a necessary matter in the maintenance of the
health and efficiency of the crew personnel during the voyage,
the deductions made therefrom for the meals should be
returned to them, and the operator of the coastwise vessels
affected should continue giving the same benefit.
Petition dismissed.
2. International School V Quisumbing
FACTS: Private respondent International School, Inc.
(School), pursuant to PD 732, is a domestic educational
institution established primarily for dependents of foreign
diplomatic personnel and other temporary residents. The
decree authorizes the School to employ its own teaching and
management personnel selected by it either locally or abroad,
from Philippine or other nationalities, such personnel being
exempt from otherwise applicable laws and regulations
attending their employment, except laws that have been or will
be enacted for the protection of employees. School hires both
foreign and local teachers as members of its faculty,
classifying the same into two: (1) foreign-hires and (2) local-
hires.
The School grants foreign-hires certain benefits not accorded
local-hires. Foreign-hires are also paid a salary rate 25% more
than local-hires.
When negotiations for a new CBA were held on June 1995,
petitioner ISAE, a legitimate labor union and the collective
bargaining representative of all faculty members of the
School, contested the difference in salary rates between
foreign and local-hires. This issue, as well as the question of
bargaining unit, eventually caused a deadlock between the
parties.
ISAE filed a notice of strike. Due to the failure to reach a
compromise in the NCMB, the matter reached the DOLE
which favored the School. Hence this petition.
ISSUE: Whether the foreign-hires should be included in
bargaining unit of local- hires.
RULING: NO. The Constitution, Article XIII, Section 3,
specifically provides that labor is entitled to “humane
conditions of work.” These conditions are not restricted to the
physical workplace – the factory, the office or the field – but
include as well the manner by which employers treat their
employees.
Discrimination, particularly in terms of wages, is frowned upon
by the Labor Code. Article 248 declares it an unfair labor
practice for an employer to discriminate in regard to wages in
order to encourage or discourage membership in any labor
organization.
The Constitution enjoins the State to “protect the rights of
workers and promote their welfare, In Section 18, Article II of
the constitution mandates “to afford labor full protection”. The
labor and capital. These relations are not merely contractual
but are so impressed with public interest that labor contracts,
collective bargaining agreements included, must yield to the
common good.
However, foreign-hires do not belong to the same bargaining
unit as the local-hires.
A bargaining unit is a group of employees of a given employer,
comprised of all or less than all of the entire body of
employees, consistent with equity to the employer indicate to
be the best suited to serve the reciprocal rights and duties of
the parties under the collective bargaining provisions of the
law.
The factors in determining the appropriate collective
bargaining unit are (1) the will of the employees (Globe
Doctrine); (2) affinity and unity of the employees’ interest, such
as substantial similarity of work and duties, or similarity of
compensation and working conditions (Substantial Mutual
Interests Rule); (3) prior collective bargaining history; and (4)
similarity of employment status. The basic test of an asserted
bargaining unit’s acceptability is whether or not it is
fundamentally the combination which will best assure to all
employees the exercise of their collective bargaining rights.
In the case at bar, it does not appear that foreign-hires have
indicated their intention to be grouped together with local-hires
for purposes of collective bargaining. The collective
bargaining history in the School also shows that these groups
were always treated separately. Foreign-hires have limited
tenure; local-hires enjoy security of tenure. Although foreign-
hires perform similar functions under the same working
conditions as the local-hires, foreign-hires are accorded
certain benefits not granted to local-hires such as housing,
transportation, shipping costs, taxes and home leave travel
allowances. These benefits are reasonably related to their
status as foreign-hires, and justify the exclusion of the former
from the latter. To include foreign-hires in a bargaining unit
with local-hires would not assure either group the exercise of
their respective collective bargaining rights.
WHEREFORE, the petition is GIVEN DUE COURSE. The
petition is hereby GRANTED IN PART.
 3. Globe v NLRC
Facts: Wage Order No. 6 increased the cost-of-living
allowance (COLA) of non-agricultural workers in the private
sector.
Petitioner Corporation complied with said Order by paying its
monthly-paid employees the mandated P3.00 per day COLA.
In its computation, Petitioner Corporation multiplied the P3.00
daily COLA by 22 days, which is the number of working days
in the company.
Respondent Union disagreed with the computation alleging
that prior to the effectivity of the Wage Order, Petitioner
Corporation had been computing and paying the COLA on the
basis of 30 days per month and that this constituted an
employer practice, which should not be unilaterally withdrawn.
The Labor Arbiter sustained the position of Petitioner
Corporation by holding that the monthly COLA should be
computed on the basis of 22 days, since the evidence showed
that there are only 22 days in a month for monthly-paid
employees in the company.
The NLRC reversed the Labor Arbiter on appeal, holding that
Petitioner Corporation was guilty of illegal deductions
considering that COLA should be paid and computed on the
basis of 30 days since workers paid on a monthly basis are
entitled to COLA on days “unworked”; and the full allowance
enjoyed by Petitioner Corporation’s monthly-paid employees
before the CBA executed between the parties constituted
voluntary employer practice, which cannot be
unilaterally withdrawn.
Issue: WON the computation and payment of COLA on the
basis of 30 days per month constitute an employer practice
which should not be unilaterally withdrawn.
Held: No. Section 5 of the Rules Implementing Wage Orders
Nos. 2, 3, 5 and 6 provides that “all covered employees shall
be entitled to their daily living allowance during the days that
they are paid their basic wage, even if unworked.” The
primordial consideration for entitlement of COLA is that basic
wage is being paid. The payment of COLA is mandated only
for the days that the employees are paid their basic wage,
even if said days are unworked. On the days that employees
are not paid their basic wage, the payment of COLA is not
mandated.
Moreover, Petitioner Corporation cannot be faulted for
erroneous application of a doubtful or difficult question of law.
Since it is a past error that is being corrected, no vested right
may be said to have arisen nor any diminution of benefit under
Article 100 of the Labor Code may be said to have resulted by
virtue of the correction.
4. Traders Royal Bank v. NLRC
FACTS: Petitioner and private respondent Atty. Emmanuel
Noel A. Cruz entered into a retainer agreement whereby the
former obligated itself to pay the latter a monthly retainer fee
of P3,000.00 in consideration of the undertaking to render the
services enumerated in their contract.
During the existence of that agreement, petitioner union
referred to private respondent the claims of its members for
holiday, mid-year and year-end bonuses against their
employer, Traders Royal Bank (TRB). A complaint was filed
by petitioner. NLRC favored the employees, awarding them
holiday pay differential, mid-year bonus differential, and year-
end bonus differential. TRB challenged the decision of the
NLRC before the SC. The SC deleted the award of mid-year
and year-end bonus differentials while affirming the award of
holiday pay differential.
After private respondent received the decision of the SC he
notified the petitioner union, the TRB and the NLRC of his right
to exercise and enforce his attorney’s lien over the award of
holiday pay differential, he filed a motion before LA for the
determination of his attorney’s fees, praying that 10% of the
total award for holiday pay differential computed by TRB at
P175,794.32, or the amount of P17,579.43, be declared as his
attorney’s fees, and that petitioner union be ordered to pay
and remit said amount to him.
Petitioner opposed said motion. LA favored private
respondent. Petitioner appealed to NLRC but NLRC affirmed
LA’s decision. Hence the petition at bar.
ISSUE: Is the private respondent entitled to Atty.’s fees aside
from his retainer fee?
RULING: Yes. There are 2 commonly accepted concepts of
attorney’s fees, the so-called ordinary and extraordinary. In
its ordinary concept, an attorney’s fee is the reasonable
compensation paid to a lawyer by his client for the legal
services he has rendered to the latter. The basis of this
compensation is the fact of his employment by and his
agreement with the client.
In its extraordinary concept, an attorney’s fee is an indemnity
for damages ordered by the court to be paid by the losing party
in a litigation. The basis of this is any of the cases provided by
law where such award can be made, such as those authorized
in Article 2208, Civil Code, and is payable not to the lawyer
but to the client, unless they have agreed that the award shall
pertain to the lawyer as additional compensation or as part
thereof.
It is the first type of attorney’s fees which private respondent
demanded before the labor arbiter. A claim for attorney’s fees
may be asserted either in the very action in which the services
of a lawyer had been rendered or in a separate action. While
a claim for attorney’s fees may be filed before the judgment is
rendered, the determination as to the propriety of the fees or
as to the amount thereof will have to be held in abeyance until
the main case from which the lawyer’s claim for attorney’s fees
may arise has become final. Otherwise, the determination to
be made by the courts will be premature. Of course, a petition
for attorney’s fees may be filed before the judgment in favor of
the client is satisfied or the proceeds thereof delivered to the
client.
Private respondent was well within his rights when he made
his claim and waited for the finality of the judgment for holiday
pay differential, instead of filing it ahead of the award’s
complete resolution.
The P3,000.00 which petitioner pays monthly to private
respondent does not cover the services the latter actually
rendered before the LA and the NLRC in behalf of the former.
As stipulated in their retainer’s agreement, the monthly fee is
intended merely as a consideration for the law firm’s
commitment to render the services.
There are two kinds of retainer fees a client may pay his
lawyer. These are a general retainer, or a retaining fee, and a
special retainer.
A general retainer, or retaining fee, is the fee paid to a lawyer
to secure his future services as general counsel for any
ordinary legal problem that may arise in the routinary business
of the client and referred to him for legal action. The future
services of the lawyer are secured and committed to the
retaining client. For this, the client pays the lawyer a fixed
retainer fee. The fees are paid whether or not there are cases
referred to the lawyer. The reason for the remuneration is that
the lawyer is deprived of the opportunity of rendering services
for a fee to the opposing party or other parties. In fine, it is a
compensation for lost opportunities.
A special retainer is a fee for a specific case handled or special
service rendered by the lawyer for a client. A client may have
several cases demanding special or individual attention. If for
every case there is a separate and independent contract for
attorney’s fees, each fee is considered a special retainer.
The P3,000.00 monthly fee provided in the retainer agreement
between the union and the law firm refers to a general
retainer, or a retaining fee, as said monthly fee covers only the
law firm’s commitment to render the legal services
enumerated in said agreement..
Whether there is an agreement or not, the courts can fix a
reasonable compensation which lawyers should receive for
their professional services. However, the value of private
respondent’s legal services should not be established on the
basis of Article 111 of the Labor Code alone. Said article
provides:
“(a) In cases of unlawful withholding of wages the culpable
party may be assessed attorney’s fees equivalent to ten
percent of the amount of the wages recovered.”
The implementing provision 38 of the foregoing article further
states:
“Sec. 11. Attorney’s fees. Attorney’s fees in any judicial or
administrative proceedings for the recovery of wages shall not
exceed 10% of the amount awarded. The fees may be
deducted from the total amount due the winning party.”
The fees mentioned here are the extraordinary attorney’s fees
recoverable as indemnity for damages sustained by and
payable to the prevailing part. The 10% attorney’s fees fixes
only the limit on the amount of attorney’s fees the victorious
party may recover in any judicial or administrative proceedings
and it does not revent the NLRC from fixing an amount lower
than 10% ceiling prescribed by the article when circumstances
warrant it.
The measure of compensation for private respondent’s
services as against his client should properly be addressed by
the rule of quantum meruit which means “as much as he
deserves,” which is used in the absence of a contract, but
recoverable by him from his client. Where a lawyer is
employed without a price for his services being agreed upon,
the courts shall fix the amount on quantum meruit basis.
But instead of adopting the above guidelines, the labor arbiter
erroneously set the amount of attorney’s fees on the basis of
Article 111 of the Labor Code. He completely relied on the
operation of Article 111 when he fixed the amount of attorney’s
fees.
Article 111 of the Labor Code may not be used as the lone
standard in fixing the exact amount payable to the lawyer by
his client for the legal services he rendered. While it limits the
maximum allowable amount of attorney’s fees, it does not
direct the instantaneous and automatic award of attorney’s
fees in such maximum limit. The criteria found in the Code of
Professional Responsibility are to be considered, in assessing
the proper amount. These are: (a) the time spent and the
extent of services rendered or required; (b) the novelty and
difficulty of the questions involved; (c) the importance of the
subject matter; (d) the skill demanded; (e) the probability of
losing other employment as a result of acceptance of the
proffered case; (f) the customary charges for similar services
and the schedule of fees of the IBP chapter to which the
lawyer belongs; (g) the amount involved in the controversy
and the benefits resulting to the client from the services; (h)
the contingency or certainty of compensation; (i) the character
of the employment, whether occasional or established; and (j)
the professional standing of the lawyer.
WHEREFORE, the Resolution of respondent is MODIFIED,
and petitioner is hereby ORDERED to pay the amount of
P10,000.00 as attorney’s fees to private
5. Manila Water v Pena
FACTS: Petitioner Manila Water Company, Inc. is one of the
two private concessionaires contracted by the Metropolitan
Waterworks and Sewerage System (MWSS) to manage the
water distribution system in the East Zone of Metro Manila.
Under the Concession Agreement, petitioner undertook to
absorb former employees of the MWSS whose names and
positions were in the list furnished by the latter, while the
employment of those not in the list was terminated. Private
respondents, being contractual collectors of the MWSS, were
among the 121 employees not included in the list;
nevertheless, petitioner engaged their services without written
contract for three months. Before the end of the three-month
contract, the 121 collectors incorporated the Association
Collectors Group, Inc. (ACGI), which was contracted by
petitioner to collect charges for the Balara Branch.
Subsequently, most of the 121 collectors were asked by the
petitioner to transfer to the First Classic Courier Services, a
newly registered corporation. Only private respondents
remained with ACGI. Private respondents filed a complaint for
illegal dismissal and money claims against petitioner,
contending that they were petitioner’s employees as all the
methods and procedures of their collections were controlled
by the latter. Petitioner on the other hand asserts that private
respondents were employees of ACGI, an independent
contractor. It maintained that it had no control and supervision
over private respondents’ manner of performing their work
except as to the results. Thus, petitioner did not have an
employer-employee relationship with the private respondents,
but only a service contractor-client relationship with ACGI.
ISSUE: Whether or not ACGI is an independent contractor;
HELD: ACGI is an independent contractor but a labor- only
contractor. First, ACGI does not have substantial
capitalization or investment in the form of tools, equipment,
machineries, work premises, and other materials, to qualify as
an independent contractor. While it has an authorized capital
stock of P1,000,000.00, only P62,500.00 is actually paid-in,
which cannot be considered substantial capitalization. The
121 collectors subscribed to four shares each and paid only
the amount of P625.00 in order to comply with the
incorporation requirements. Further, private respondents
reported daily to the branch office of the petitioner because
ACGI has no office or work premises. In fact, the corporate
address of ACGI was the residence of its president, Mr.
Herminio D. Peña. Moreover, in dealing with the consumers,
private respondents used the receipts and identification cards
issued by petitioner
Second, the work of the private respondents was directly
related to the principal business or operation of the petitioner.
Being in the business of providing water to the consumers in
the East Zone, the collection of the charges therefore by
private respondents for the petitioner can only be categorized
as clearly related to, and in the pursuit of the latter’s business.
Lastly, ACGI did not carry on an independent business or
undertake the performance of its service contract according to
its own manner and method, free from the control and
supervision of its principal, petitioner. Prior to private
respondents’ alleged employment with ACGI, they were
already working for petitioner, subject to its rules and
regulations in regard to the manner and method of performing
their tasks. This form of control and supervision never
changed although they were already under the seeming
employ of ACGI.
Petitioner issued memoranda regarding the billing methods
and distribution of books to the collectors; it required private
respondents to report daily and to remit their collections on the
same day to the branch office or to deposit them with Bank of
the Philippine Islands; it monitored strictly their attendance as
when a collector cannot perform his daily collection, he must
notify petitioner or the branch office in the morning of the day
that he will be absent; and although it was ACGI which
ultimately disciplined private respondents, the penalty to be
imposed was dictated by petitioner as shown in the letters it
sent to ACGI specifying the penalties to be meted on the
erring private respondents.
These are indications that ACGI was not left alone in the
supervision and control of its alleged employees.
Consequently, it can be concluded that ACGI was not an
independent contractor since it did not carry a distinct
business free from the control and supervision of petitioner.
Under this factual milieu, there is no doubt that ACGI was
engaged in labor-only contracting, and as such, is considered
merely an agent of the petitioner. In labor-only contracting, the
statute creates an employer-employee relationship for a
comprehensive purpose: to prevent a circumvention of labor
laws. The contractor is considered merely an agent of the
principal employer and the latter is responsible to the
employees of the labor-only contractor as if such employees
had been directly employed by the principal employer. Since
ACGI is only a labor-only contractor, the workers it supplied
should be considered as employees of the petitioner
6. Republic vs Asiapro
Facts: Respondent Asiapro Cooperative is composed of
owners-members with primary objectives of providing them
savings and credit facilities and livelihood services. In
discharge of said objectives, Asiapro entered into several
service contracts with Stanfilco. Sometime later, the
cooperative owners-members requested Stanfilco’s help in
registering them with SSS and remitting their contributions.
Petitioner SSS informed Asiapro that being actually a
manpower contractor supplying employees to Stanfilco, it
must be the one to register itself with SSS as an employer and
remit the contributions. Respondent continuously ignoring the
demand of SSS the latter filed before the SSC. Asiapro
alleges that there exists no employer-employee relationship
between it and its owners-members. SSC ruled in favor of
SSS. On appeal, CA reversed the decision.
Issue: Whether or not there is employer-employee
relationship between Asiapro and its owners-members.
Ruling: YES.
In determining the existence of an employer-employee
relationship, the following elements are considered: (1) the
selection and engagement of the workers; (2) the payment of
wages by whatever means; (3) the power of dismissal; and (4)
the power to control the worker‘s conduct, with the latter
assuming primacy in the overall consideration. All the
aforesaid elements are present in this case.
First. It is expressly provided in the Service Contracts that it is
the respondent cooperative which has the exclusive discretion
in the selection and engagement of the owners-members as
well as its team leaders who will be assigned at Stanfilco.
Second. It cannot be doubted then that those stipends or
shares in the service surplus are indeed wages, because
these are given to the owners-members as compensation in
rendering services to respondent cooperative‘s client,
Stanfilco.
Third. It is also stated in the above-mentioned Service
Contracts that it is the respondent cooperative which has the
power to investigate, discipline and remove the owners-
members and its team leaders who were rendering services
at Stanfilco.
Fourth. In the case at bar, it is the respondent cooperative
which has the sole control over the manner and means of
performing the services under the Service Contracts with
Stanfilco as well as the means and methods of work. Also, the
respondent cooperative is solely and entirely responsible for
its owners-members, team leaders and other representatives
at Stanfilco. All these clearly prove that, indeed, there is an
employer-employee relationship between the respondent
cooperative and its owners-members.
7. Tabas v California Manufacturing
Facts: Petitioners filed a petition in the NLRC for
reinstatement and payment of various benefits against
California Manufacturing Company. The respondent company
then denied the existence of an employer-employee
relationship between the company and the petitioners.
Pursuant to a manpower supply agreement, it appears that
the petitioners prior their involvement with California
Manufacturing Company were employees of Livi Manpower
service, an independent contractor, which assigned them to
work as “promotional merchandisers.” The agreement
provides that:
California “has no control or supervisions whatsoever over
[Livi’s] workers with respect to how they accomplish their work
or perform [Californias] obligation” It was further expressly
stipulated that the assignment of workers to California shall be
on a “seasonal and contractual basis”; that “[c]ost of living
allowance and the 10 legal holidays will be charged directly to
[California] at cost “; and that “[p]ayroll for the preceding [sic]
week [shall] be delivered by [Livi] at [California’s] premises.”
Issue: WON principal employer is liable.
Held: Yes. The existence of an employer-employee relation
cannot be made the subject of an agreement.
Based on Article 106, “labor-only” contractor is considered
merely as an agent of the employer, and the liability must be
shouldered by either one or shared by both.
There is no doubt that in the case at bar, Livi performs
“manpower services”, meaning to say, it contracts out labor in
favor of clients. We hold that it is one notwithstanding its
vehement claims to the contrary, and notwithstanding the
provision of the contract that it is “an independent
contractor.” The nature of one’s business is not determined
by self-serving appellations one attaches thereto but by the
tests provided by statute and prevailing case law. The bare
fact that Livi maintains a separate line of business does not
extinguish the equal fact that it has provided California with
workers to pursue the latter’s own business. In this
connection, we do not agree that the petitioners had been
made to perform activities ‘which are not directly related to the
general business of manufacturing,” California’s purported
“principal operation activity.” Livi, as a placement agency, had
simply supplied California with the manpower necessary to
carry out its (California’s) merchandising activities, using its
(California’s) premises and equipment.
8. Meycauayan College v Drilon
FACTS: Petitioner is a private educational institution duly
organized and existing under Philippine laws, and operating
in Meycauayan, Bulacan. On January 16, 1987, its board of
trustees recognized the Meycauayan College Faculty and
Personnel Association as the employees union in the
Meycauayan College.
Prior to said recognition or on July 17, 1983, petitioner and the
union, then headed by Mrs. Teresita V. Lim, entered into a
collective bargaining agreement for 1983-1986. Article IV
thereof provides:
SALARY SCALE
IV. 4.0 ANG ANTAS NG PAGPAPASUWELDO SA MGA
GURO SA MATAAS NG PAARALAN AY UMAALINSUNOD
SA PARAAN NG PAGRARANGGONG KALAKIP NITO
BILANG "TAKDA" AT AYON PA RIN SA SUMUSUNOD NA
HALAGA NG PAGPAPASUWELDO (IPATUTUPAD SA AÑO-
ESCOLAR 1983-1986):
PAGSUBOK A (1-3 TAON) P51.50
KLASE 1 (4-5 TAON) P52.00
(6-8 TAON) P53.00
KLASE II (9-12 TAON) P54.00
KLASE III (13-14 TAON) P57.00
KLASE IV (15-17 TAON) P60.00
KLASE V (18-21 TAON) P63.00
(22 PATAAS) P70.00
When the collective bargaining agreement was entered into,
the following presidential decrees were in effect:
(a) P.D No. 1389 dated May 29, 1978 adjusting the existing
statutory minimum wages;
(b) P.D. No. 1713 dated August 18, 1980 providing for an
increase in the minimum daily wage rates and for additional
mandatory living allowances, and ;
(c) P.D. No. 1751 dated May 14, 1980 increasing the statutory
daily minimum wage at all levels by P4.00 after integrating the
mandatory emergency living allowance under P.D. Nos. 525
and 1123 into the basic pay of all covered workers. Wage
Order No. 2 increasing the mandatory basic minimum wage
and living allowance was also issued on July 6, 1983 just
before the collective bargaining agreement herein involved
was entered into.
During the lifetime of the collective bargaining agreement, the
following were issued:
(a) Wage Order No. 3 dated November 7, 1983 increasing the
minimum daily living allowance in the private sector;
(b) Wage Order No. 4 dated May 1, 1984 integrating as of said
date the emergency cost of living allowances under P.D. Nos.
1614, 1634 and 1713 into the basic pay of covered workers in
the private sector;
(c) Wage Order No. 5 dated June 11, 1984 increasing the cost
of living allowance of workers in the private sector whose
basic salary or wage is not more than P1,800 a month; and
(d) Wage Order No. 6 dated October 26, 1984 increasing the
daily living allowances.
The union admits herein that its members were paid all these
increases in pay mandated by law. It appears, however, that
in 1987, shortly after union president Mrs. Teresita V. Lim,
who held the managerial position of registrar of the college,
had turned over the presidency of the union to Mrs. Fe
Villarico, the latter unintentionally got a copy of the collective
bargaining agreement and discovered that Article IV thereof
had not been implemented by the petitioner.
Consequently, on March 27, 1987, the union filed with the
Department of Labor and Employment, Regional Office No. III
in San Fernando, Pampanga, a notice of strike on the ground
of unfair labor practice alleging therein violation of the
collective bargaining agreement particularly the provisions of
Article IV thereof on salary scale.
ISSUE: 1. Whether increases in employees' salaries resulting
from the implementation of presidential decrees and wage
orders, which are over and above the agreed salary scale
contracted for between the employer and the employees in a
collective bargaining agreement, preclude the employees
from claiming the difference between their old salaries and
those provided for under said salary scale.
RULING: "Non-compliance with the mandate of a standards
law or decree may give rise to an ordinary action for recovery
while violation of a collective bargaining agreement may even
give rise to a criminal action for unfair labor practice. And while
the relief sought for violation of a standards law or decree is
primarily for restitution of (an) unpaid benefits, the relief
sought for violating a CBA is ordinarily for compliance and
desistance. Moreover, there is no provision in the aforecited
Presidential Decrees providing that compliance thereto is
sufficient compliance with a provision of a collective
bargaining agreement and vice-versa." The dispositive portion
of the Secretary's order of September 9, 1987 states:
WHEREFORE, the Management of Meycauayan College is
hereby ordered to:
1) Strictly effect the payment of salaries of the union members
in accordance with the provisions of the collective bargaining
agreement;
2) Pay the covered union members salary differential
computed by subtracting the salary actually paid and received
by them per period provided in the collective bargaining
agreement for school years 1983-1984; 1984-1985 and 1985-
1986 including the differential for the 13th month pay for the
same period. 5
The petition has no merit.
As correctly ruled by public respondent, a collective
bargaining agreement is a contractual obligation. It is distinct
from an obligation imposed by law. The terms and conditions
of a collective bargaining contract constitute the law between
the parties. Beneficiaries thereof are therefore, by right,
entitled to the fulfillment of the obligation prescribed therein.
Consequently, to deny binding force to the collective
bargaining agreement would place a premium on a refusal by
a party thereto to comply with the terms of the agreement.
Such refusal would constitute an unfair labor practice.
Nevertheless, as the key to the interpretation of contracts,
including collective bargaining agreements, is the intention of
the parties, we examined the record and found the undisputed
allegation of private respondent that the collective bargaining
agreement herein involved was entered into by the parties to
improve the plight of the teachers by increasing their salary.
The parties increased the teachers' salary or rate per period,
by drafting a salary scale "based on the length of service" of
the teachers and eventually came up with Article IV
aforequoted. From this unrebutted allegation, it is clear that
the parties wanted to attain one goal — increase the salaries
of the teachers on the basis of their length of service. Hence,
it is immaterial that the means by which said goal is achieved
is through the alteration of the salary scale.
On the issue of prescription, Article 291 (now Art. 290) of the
Labor Code herein invoked by petitioner, provides:
Offenses. — Offenses penalized under this Code and the
rules and regulations issued pursuant thereto shall prescribe
in three (3) years.
All unfair labor practices arising from Book V shall be filed with
the appropriate agency within one (1) year from accrual of
such unfair labor practice; otherwise, they shall be forever
barred.
The one-year prescriptive period is inapplicable in this case
because of peculiar factual circumstances which petitioner
has not denied. Although the collective bargaining agreement
covers school years 1983 to 1986, a copy of the agreement
was only made available to the union in 1987. Immediately
thereafter, the union sought its implementation. The union
members might have been aware of the existence of the
collective bargaining agreement but that fact that their
president was actually a management employee being
petitioner's registrar, they must have been deterred from
demanding its implementation earlier. Hence, to apply the
provisions of Article 290 (Art. 291) would be unfair and
prejudicial to the union members particularly those who have
served petitioner for a number of years who stand to benefit
most from the salary scale.
Article 264(g), now Article 263(g) of the Labor Code is broad
enough to give the Secretary of Labor the power to take
jurisdiction over what appears at first blush to be an ordinary
money claim. Claims for pay differentials may have that
character but, as earlier stated, if they arise out of a violation
of a collective bargaining agreement, they assume the
character of an unfair labor practice and are, therefore, well
within the ambit of the jurisdiction of the Secretary of Labor to
decide.the decision of the Secretary of Labor is hereby
AFFIRMED and the temporary restraining order of February
15,1989 is LIFTED.
This decision is immediately executory. Costs against the
petitioner.
9. St. Joseph College v St. Joseph
FACTS: Petitioner is a non-stock, non-profit Catholic
educational institution while respondent is a legitimate labor
organization which is currently the official bargaining
representative of all employees of petitioner except the faculty
and consultants of the Graduate School, managerial
employees and those who occupy confidential positions.
Respondent has an existing CBA with petitioner for the period
from June 1, 1999 to May 31, 2004. For the SY 2000-2001,
petitioner increased its tuition fees for all its departments.
Based on petitioner’s computation, the incremental proceeds
from the tuition fees increase for SY 2000-2001 is
P1,560,942.74, 85% of which is equivalent to P1,326,801.33.
Consequently, respondent averred that 85% of
P4,906,307.58, which is P4,170,360.59 should have been
released to its members as provided for in their CBA effective
June 1, 2000.
ISSUE: How should the 70%-30% tuition fee increase be
allocated?
RULING:The law allows an increase in school tuition fees on
the condition that 70 percent of the increase shall go to the
payment of personnel benefits. Plainly unsupported by the law
or jurisprudence is petitioner’s contention that the payment of
such benefits should be based not only on the rate of tuition
fee increases, but also on other factors like the decrease in
the number of enrollees; the number of those exempt from
paying the fees, like scholars; the number of dropouts who, as
such, do not pay the whole fees; and the bad debts incurred
by the school. The financial dilemma of petitioner may deserve
sympathy and support, but its remedy lies not in the judiciary
but in the lawmaking body.
The law plainly states that 70 percent of the tuition fee
increase shall be allotted for the teaching and the nonteaching
personnel; and that the payment of other costs of operation,
together with the improvement of the school’s infrastructure,
shall be taken only from the remaining 30 percent. The law
does not speak, directly or indirectly, of the contention of
petitioner that in the event that its total tuition income is lesser
than that in the previous year, then the whole amount of the
increase in tuition fee, and not merely up to 30 percent as
provided by law, may be used for the improvement and
modernization of infrastructure and for the payment of other
costs of operation.
10. Odin Security Agency v Dionisio
FACTS: On July 8, 1986, a complaint was filed by Sergio
Apilado and fifty-five (55) others charging the petitioner Odin
Security Agency (hereafter "OSA"), underpayment of wages,
illegal deductions, non-payment of night shift differential,
overtime pay, premium pay for holiday work, rest days and
Sundays, service incentive leaves, vacation and sick leaves,
and 13th-month pay. When conciliation efforts failed, the
parties were required to submit their position papers.
Private respondents alleged in their position paper that their
latest monthly salary was P1,600; that from this amount,
petitioner deducted P100 as administrative cost and P20 as
bond; that they were not paid their premium pay and overtime
pay for working on the eleven (11) legal holidays per year;
and, that since private respondents were relieved or
constructively dismissed, they must also be paid backwages.
Petitioner, on the other hand, contended that on July 21, 1986,
some 48 security guards threatened mass action against it.
Alarmed by a possible abandonment of post by the guards
and mindful of its contractual obligations to its
clients/principals, petitioner relieved and re-assigned the
complaining guards to other posts in Metro Manila. Those
relieved were ordered to report to the agency's main office for
reassignment. Only few complied, so those who failed to
comply were placed on "AWOL" status. Petitioner claimed it
complied with the Labor Code provisions, and in support
thereof, it submitted the "Quitclaim and Waiver" of thirty-four
(34) complainants. It further alleged that complainants who
rendered over-time work as shown by their time sheets were
paid accordingly; that service incentive leaves not availed of,
night shift differential, rest days, and holidays were paid in
cash.
Earlier, on October 21, 1986, seventeen (17) complainants
repudiated their quitclaim and waiver. They alleged that
management pressured them to sign documents which they
were not allowed to read and that if such waiver existed, they
did not have any intention of waiving their rights under the law.
Petitioner in its reply argued that complainants were estopped
from denying their quitclaims on the ground of equity; that
being high school graduates, complainants fully understood
the document they signed; and that complainant's allegation
of coercion or threat was a mere afterthought.
Later, six (6) of the seventeen (17) complainants who
repudiated their quitclaims again executed quitclaims and
waivers.
ISSUE: Whether or not petitioner was denied due process?
HELD: The petition has no merit.
The petitioner was not denied due process for several
hearings were in fact conducted by the hearing officer of the
Regional Office of the DOLE and the parties submitted
position papers upon which the Regional Director based his
decision in the case. There is abundant jurisprudence to the
effect that the requirements of due process are satisfied when
the parties are given an opportunity to submit position papers
Parel, 156 SCRA 768; Adamson & Adamson, Inc. vs. Amores,
152 SCRA 237). Since petitioner herein participated in the
hearings, submitted a position paper, and filed a motion for
reconsideration of the March 23, 1988 decision of the Labor
Undersecretary, it was not denied due process.
Furthermore, it has also been held that after voluntarily
submitting a cause and encountering an adverse decision on
the merits, it is too late for the loser to question the jurisdiction
or power of the Court said that it is not right for a party who
has affirmed and invoked the jurisdiction of a court in a
particular matter to secure an affirmative relief, to afterwards
deny that same jurisdiction to escape a penalty.
... Under the present rules, a Regional Director exercises both
visitorial and enforcement power over labor standards cases,
and is therefore empowered to adjudicate money claims,
provided there still exists an employer-employee relationship,
and the findings of the regional office is not contested by the
employer concerned. (p. 5, Decision.)
WHEREFORE, the petition is dismissed and the orders dated
March 23, 1988 and March 13, 1989 of the Undersecretary of
Labor are hereby affirmed. The temporary restraining order
earlier issued by this Court is lifted. No costs.