Manila Electric Company vs.

Quisumbing
GR No. 127598

Plaintiff: Manila Electric Company

Defendant: Hon. SOLE Quisumbing and Meralco Employees and Workers Association (MEWA)
Date: January 27, 1999
Ponente: Martinez
Topic: CBA

Facts:

 This is a case where in MERALCO sought ot annul the order of Secretary Quisumbing wherein petitioner is
required and its’s Rank and File (RnF) union – MEWA to execute a CBA for the remainder of the parties
1992-1997 CBA cycle, and to incorporate in this new CBA the Secretary’s dispositions on the disputed
economic and non-economic issues.
 MEWA informed MERALCO of its intention to re-negotiate the terms of the 1992-97 CBA covering the
remaining period of 2 years. MERALCO was willing and entered to negotiations, however, both parties failed
arrive in terms acceptable to both parties. MERALCO petitioned with DOLE praying that the Secretary
assume jurisdiction over the labor dispute and to enjoin the striking employees to go back to work.
 Secretary granted the petition where the cause of his decision is pursuant to Article 263(g) of the Labor
Code and deputizing USEC. Espanol, Jr. to conduct conciliation conferences between the parties.
o Thereafter, both parties submitted their memoranda in which Economic Demands (such as wages,
Red Circle Rate (RCR) Allowances etc. were generally granted except for resignation benefits,
night work) and Political Demands (such as scope of the collective bargaining unit, union
recognition and security, transfer of assignment and job security) were granted.
 MERALCO filed MR alleging that the Sec. of Labor committed grave abuse of discretion amounting to lack
or excess of jurisdiction in: (1) awarding MEWA P1.142B that would imperil MERALCO’s viability as a public
utility; (2) granting wage increase; (3) incorporation into the CBA of all existing employee benefits; (4)
granting certain political demands presented by the union; and (5) in ordering the CBA to be effect of Dec
1995 instead of Aug 19, 1996 when he resolved the dispute.
Issue: W/N there is a grave abuse of discretion on the part of the Secretary of Labor.

Ruling: The Secretary of Labor disregarded and misappreciated evidence, particularly with respect to the wage
award. The Secretary apparently also acted arbitrarily and even whimsically in considering several legal points; even
the Solicitor General himself considered that the Secretary gravely abused his discretion on at least three major
points: (a) on the signing bonus issue; (b) on the inclusion of confidential employees in the rank and file bargaining
unit, and (c) in mandating a union security closed-shop regime in the bargaining unit.
Doctrine: While We do not seek to enumerate in this decision the factors that should affect wage determination, we
must emphasize that a collective bargaining dispute such as this one requires consideration and proper balancing
of the interests of the parties to the dispute and of those who might be affected by the dispute. To our mind,
the best way in approaching this task holistically is to consider the available objective facts, including, where
applicable, factors such as the bargaining history of the company, the trends and amounts of arbitrated and agreed
wage awards and the companies previous CBAs, and industry trends in general. As a rule, affordability, or capacity to
pay should be considered but cannot be the sole yardstick in determining the wage award, especially in a public utility
like MERALCO. In considering a public utility, the decision maker must always consider the public interest aspects of
the case; MERALCOs income and the amount of money available for operating expenses - including labor costs - are
subject to State regulation. We must also keep in mind that high operating costs will certainly and eventually be
passed on to the consuming public as MERALCO has bluntly warned in its pleadings.