Steven Briones G.

Case: Cirtek employees vs Cirtek electronics

case n0. 1.B.1
Principle: Art. 1700 Civil Code

Facts:
Cirtek company, respondents, had existing CBA with its employees from 2001- 2005 prior to
3rd yr of the CBA the parties renegotiated its economic provisions but failed to reach a
settlement, particularly on issue of wage increase. Petitioners, thereupon declared a
bargaining deadlock and went on strike. In the meantime, as amicable settlement of the CBA
was deadlocked, The Secretary of Labor assumed jurisdiction over the controversy and
issued a return to work order which was complied with.
Now, before secretary of labor could rule on the controversy, Cirtek, respondents, made a
Memorandum of Agreement (MOA) together with the remaining officers, which settled the
increase wage of Php 6.00 effective Jan. 2004, and Php 9.00 jan 2005. The petitioners then
alleged that the remaining officers only signed such MOA under the assurance that if
Secretary order higher order the respondent would still comply.
Now, Secretary of labor resolved the CBA issue on increase of wage from Php. 6.00 to Php.
10.00 effective 2004, and from Php. 9.00 to Php 15.00 effective 2005.

Respondents didn’t like the order so they moved for reconsideration, they claimed that the
employees waived their rights and benefits under the secretary’s decision. This MR was
denied, hence filed a petition for certiorari before CA.
CA held: Secretary of labor gravely abused his discretion in not respecting the MOA.
petitioners filed contended that Secretary’s award is in order that Secretary has the power
to grant awards higher than what are stated in the CBA.

Issue: w/n Secretary of labor is authorized to give an award higher than that agreed upon in
the MOA?

HELD:YES, it is well-settled that the Secretary of Labor, in the exercise of his power to
assume jurisdiction under Art. 263 (g) of the Labor Code, may resolve all issues involved in
the controversy including the award of wage increases and benefit.
in resolving the CBA deadlock, is not limited to considering the MOA as basis in computing
the wage increases.

While a contract constitutes the law between the parties, this is so in the present case with
respect to the CBA, not to the MOA in which even the union’s signatories had expressed
reservations thereto. But even assuming arguendo that the MOA is treated as a new CBA,
since it is imbued with public interest, it must be construed liberally and yield to the
common good.
While the terms and conditions of a CBA constitute the law between the parties, it is not,
however, an ordinary contract to which is applied the principles of law governing ordinary
contracts. A CBA, as a labor contract within the contemplation of Article 1700 of the Civil
Code of the Philippines which governs the relations between labor and capital, is not merely
contractual in nature but impressed with public interest, thus, it must yield to the common
good. As such, it must be construed liberally rather than narrowly and technically, and the
courts must place a practical and realistic construction upon it, giving due consideration to
the context in which it is negotiated and purpose which it is intended to serve.