[COLLECTIVE BARGAINING; BARGAINING PROCEDURE ● After several meetings on the ground rules that

– Duty to Bargain] would govern the negotiations and on political

06 TABANGAO SHELL REFINERY V. PILIPINAS SHELL items, the parties started their discussion on the
April 7, 2014 | Leonardo-De Castro, J. | economic items on July 27, 2004, their 31st
meeting.
Petitioner/s: Tabangao Shell Refinery Employees ○ The union proposed a 20% annual across-the-
Association board basic salary increase for the next three
Respondent/s: Pilipinas Shell Petroleum Corporation years that would be covered by the new CBA.
○ In lieu of the annual salary increases, the
Doctrine: While the purpose of collective bargaining is company made a counter-proposal to grant all
the reaching of an agreement between the employer covered employees a lump sum amount of
and the employee’s union resulting in a binding ₱80,000.00 yearly for the three-year period of the
contract between the parties, the failure to reach an new CBA.
agreement after negotiations continued for a ● The union requested the company to present its
reasonable period does not mean lack of good faith. counter-proposal in full detail, similar to the
The laws invite and contemplate a collective presentation by the union of its economic proposal.
bargaining contract but do not compel one. A CBA, like ○ The company explained that the lump sum
any contract is a product of mutual consent and not of amount was based on its affordability for the
compulsion. As such, the duty to bargain does not corporation, the then current salary levels of the
include the obligation to reach an agreement. members of the union relative to the industry, and
the then current total pay and benefits package
Facts: of the employees.
CBA Negotiations ○ Not satisfied with the company’s explanation, the
● In anticipation of the expiration on April 30, 2004 of union asked for further justification of the lump
the 2001-2004 Collective Bargaining Agreement sum amount offered by the company.
(CBA) between the petitioner (the union) and the ○ When the company refused to acknowledge any
respondent Pilipinas Shell Petroleum Corporation obligation to give further justification, the union
(the company), the parties started negotiations for a rejected the company’s counter-proposal and
new CBA. maintained its proposal.
● During the course of negotiations (wherein the and contained in the minutes of previous
union lowered its proposal and the company meetings.
increased its counter-proposal, still to no avail), the ○ The union thereafter requested for a copy of the
union requested financial data for the comparison of the salaries of its members and
manufacturing class of business in the Philippines those from allied industries.
and repeated requested justification for the ○ The company denied the request on the ground
company’s counter-offer. that the requested information was entrusted to
○ In response, the company stated that financial the company under a confidential agreement.
measures for Tabangao were available in the ● Alleging failure on the part of the company to justify
refinery scorecard regularly cascaded by the its offer, the union manifested that the company
management to the employees. was bargaining in bad faith. The company, in turn,
○ The company reiterated that its counter-offer is expressed its disagreement with the union’s
based on its affordability for the company, manifestation.
comparison with the then existing wage levels of ● On the parties’ 41st meeting held on September 2,
allied industry, and the then existing total pay and 2004, the company proposed the declaration of a
benefits package of the employees. deadlock and recommended that the help of a third
○ The company subsequently provided the union party be sought.
with a copy of the company’s audited financial ○ The union replied that they would formally
statements. answer the proposal of the company a day after
● The union remained unconvinced and asked for the signing of the official minutes of the meeting.
additional documents to justify the company’s ○ On that same day, however, the union filed a
counter-offer. Notice of Strike in the National Conciliation and
○ The company invited the attention of the union to Mediation Board (NCMB), alleging bad faith
the fact that additional data, such as the refinery bargaining on the part of the company.
performance scorecard, were available from the ■ The NCMB immediately summoned the
refinery’s website and shared network drives. parties for the mandatory conciliation-
○ The company also declared that the bases of its mediation proceedings but the parties
counter-offer were already presented to the union failed to reach an amicable settlement.
Secretary of Labor and Employment
● September 16, 2004 – During the cooling off period, the strike had already commenced, a return to
the union conducted the necessary strike vote. The work order was ordered.
members of the union, who participated in the ○ They were also instructed to submit their
voting, unanimously voted for the holding of a strike. respective position papers on the economic
○ Upon being aware of this development, the issues and those raised in the Notice of Strike
company filed a Petition for Assumption of with complete financial statements and the
Jurisdiction with the Secretary of Labor and records of negotiation so far.
Employment. ○ SOLE denied the union’s MR and second MR.
■ The petition was filed pursuant to the first Court of Appeals
paragraph of Article 263(g) of the Labor ● The union filed a petition for certiorari with the CA,
Code. (See Notes for provision) alleging GAD on the part of the SOLE in
● September 20, 2004 – Secretary of Labor and misappreciating the facts and issue of the case.
Employment, Patricia Sto. Tomas, granted the ○ It contended that the issue is the unfair labor
petition of the company. practice of the company in the form of bad faith
○ She also found that the intended strike would bargaining and not the CBA deadlock.
likely affect the company’s capacity to provide ○ Anchoring its position on item 8 of what the
petroleum products to the company’s various parties agreed upon as the ground rules that
clientele, including the transportation sector, the would govern the negotiations, the union argued
energy sector, and the manufacturing and that, at the time the Order dated September 20,
industrial sectors and would certainly have a 2004 was issued, there was no CBA deadlock on
negative impact on the price of commodities. account of the union’s non-conformity with the
○ SOLE assumed jurisdiction over the dispute, declaration of a deadlock, as item 8 of the said
convinced that the strike would have adverse ground rules provided that a "deadlock can only
consequences on the national economy and be declared upon mutual consent of both
ruled that it was a strike in an industry parties."
indispensable to national interest. ○ Thus, the Secretary of Labor and Employment
○ She issued an order that enjoined any form of committed grave abuse of discretion when she
concerted action and any act that may assumed jurisdiction and directed the parties to
exacerbate the situation. And, in the alterative, if
 submit position papers even on the economic NLRC
issues. ● In the meantime, the union also filed a complaint for
● The CA found the position of the union untenable ULP against the company in the NLRC.
and cited the SC ruling in St. Scholastica College vs. ○ The union alleged that the company refused, or
Torres which discussed the authority of the SOLE violated its duty, to bargain.
under Art 263(g) of the Labor Code to assume ○ The company moved to dismiss on the grounds
jurisdiction. of forum shopping/litis pendentia.
○ Applying St. Scholastica’s College, the Court of ● The LA found that the case arose from the same
Appeals found that the 2004 CBA Official Minutes CBA negotiations discussed above and the issue of
of the Meetings show that the union and the refusal to bargain was a proper incident of the labor
company were already discussing the economic dispute over which the SOLE assumed jurisdiction.
issues when the union accused the company of ● The case was forwarded for consolidation with the
bargaining in bad faith. case in the Office of the SOLE.
○ As such, the Secretary of Labor and Employment Decision of the SOLE
had the authority to take cognizance of the ● During the pendency of the certiorari petition in the
economic issues, which issues were the CA, the SOLE rendered a Decision holding that there
necessary consequences of the alleged bad faith was already a deadlock although the ground for the
bargaining. first Notice of Strike was ULP for bargaining in bad
● The Court of Appeals noted that the union’s faith.
contention that the Secretary of Labor and ○ Citing Capitol Medical Center Alliance of Concerned
Employment cannot resolve the economic issues Employees-Unified Filipino Service Workers v.
because the union had not given its consent to the Laguesma where it has been held that there may
declaration of a deadlock was already moot as the be a deadlock not only in the strict legal sense of
union filed another Notice of Strike citing CBA an impasse despite reasonable effort at good
deadlock as a ground and the Acting SOLE granted faith bargaining but also where one of the parties
the company’s Manifestation with Motion to unduly refuses to comply with its duty to bargain;
Consider the Second Notice of Strike as Subsumed ○ The Secretary of Labor and Employment ruled
to the First Notice of Strike. that the circumstances – 41 CBA meetings
● CA dismissed the petition for certiorari. showing "reasonable efforts at good faith
 bargaining" without arriving at a CBA – show that ■ However, the totality of conduct of the
there was effectively a bargaining deadlock company does not show that it was bargaining
between the parties. in bad faith.
● The SOLE also held that the company was not guilty ● The SOLE than decided on that matter of the wage
of bargaining bad faith. increase and other economic issues of the new CBA.
○ The duty to bargain does not compel any party to ○ Based on the financial statements, she found a
accept a proposal, or make any concession, as lump sum package of 95k per year per covered
recognized by Article 252 of the Labor Code, as employee just and equitable and found that the
amended. other benefits were sufficient.
○ The purpose of collective bargaining is the ● Neither the union nor the company appealed the
reaching of an agreement resulting in a contract Decision dated June 8, 2005 of the Secretary of
binding on the parties; however, the failure to Labor and Employment. Thus, the said Decision
reach an agreement after negotiations continued attained finality.
for a reasonable period does not establish a lack
of good faith. • The union appealed the decision of the CA
○ The laws invite and contemplate a collective dismissing the petition for certiorari.
bargaining contract, but they do not compel one. o It insists that the corporation is guilty of unfair
○ The duty to bargain does not include the labor practice through bad faith bargaining.
obligation to reach an agreement. According to the union, bad faith bargaining and
■ Thus, the Company’s insistence on a a CBA deadlock cannot legally co-exist because
bargaining position to the point of stalemate an impasse in negotiations can only exist on the
does not establish bad faith. premise that both parties are bargaining in good
■ The minutes of the meetings show that both faith.
parties exerted their best efforts to try to o Besides, there could have been no deadlock
resolve the issues at hand. between the parties as the union had not given its
■ Many other issues were resolved and only the consent to it, pursuant to item 8 of the ground
matter of wage increases registered serious rules governing the parties’ negotiations which
debate. required mutual consent for a declaration of
deadlock.
 o It also argued that the ULP case it filed and the the period provided under the said provision.
deadlock case were separate and distinct as Moreover, neither party further questioned the
there was no deadlock yet at the time of the filing Decision dated June 8, 2005 of the SOLE.
of the ULP case; and that ○ Said decision already passed upon the issue of
o The SOLE erred in assuming jurisdiction. whether there was already an existing deadlock
• The company argues that the CA correctly affirmed between the union and the company when the
the SOLE. Secretary of Labor and Employment assumed
o It is engaged in an industry that is vital to the jurisdiction over their labor dispute and the issue
national interest, and that the evidence on record of whether the company was guilty of bargaining
established that there was already a full-blown in bad faith.
labor dispute between the company and the ○ The SOLE already settled the said issues with
union arising from the deadlock in CBA finality, the union cannot once again raise those
negotiations. issues in this Court through this petition without
o The company insists that the alleged bad faith on violating the principle of res judicata, particularly
its part, which the union claimed to have in the concept of conclusiveness of judgment.
prevented any CBA deadlock, has no basis. ● A significant consequence of the finality of the
Decision dated June 8, 2005 of the Secretary of
Ruling: Labor and Employment is that it rendered the
W/N the SOLE erred in assuming jurisdiction and controversy between the union and the company
declaring that the company was not guilty of bad faith moot.
bargaining – NO. ○ As just mentioned, the decision covered
● The petition is barred by res judicata in the concept essentially the same questions raised by the
of conclusiveness of judgment. union in this case.
○ The concept of conclusiveness of judgment is ○ Both the issues of bad faith and the deadlock
explained in Nabus v. Court of Appeals. (See were settled with finality.
Notes) ○ The directive of the SOLE has long been final and
● Pursuant to Article 263(i) of the Labor Code, executory so the dispute on the matter of the
therefore, the Decision dated June 8, 2005 of the provision on annual wage increase contra yearly
SOLE became final and executory after the lapse of lump sum payment is already moot.
● The petition is improper as it presents questions of ● A ‘deadlock’ is x x x the counteraction of
fact. A question of fact cannot properly be raised in things producing entire stoppage; x x x
a petition for review under Rule 45 of the Rules of There is a deadlock when there is a
Court, as it has done in this case. While there are complete blocking or stoppage resulting
exceptions to this rule, none apply in this case. from the action of equal and opposed
○ The existence of bad faith is a question of fact forces x x x. The word is synonymous with
and is evidentiary. the word impasse, which x x x ‘presupposes
■ The crucial question of whether or not a party reasonable effort at good faith bargaining
has met his statutory duty to bargain in good which, despite noble intentions, does not
faith typically turns on the facts of the conclude in agreement between the
individual case, and good faith or bad faith is parties.’
an inference to be drawn from the facts. ● Even assuming that this Court may disregard the
■ Thus, the issue of whether or not there was conclusiveness of judgment and review the factual
bad faith on the part of the company when it matters raised by the union, the merits are still not
was bargaining with the union is a question of in the union’s favor.
fact. It requires that the reviewing court look ○ While the purpose of collective bargaining is the
into the evidence to find if indeed there is reaching of an agreement between the employer
proof that is substantial enough to show such and the employee’s union resulting in a binding
bad faith. contract between the parties, the failure to reach
○ The issue of whether there was already deadlock an agreement after negotiations continued for a
between the union and the company is likewise a reasonable period does not mean lack of good
question of fact. faith.
■ It requires the determination of evidence to ○ The laws invite and contemplate a collective
find whether there is a "counteraction" of bargaining contract but do not compel one.
forces between the union and the company ○ For after all, a CBA, like any contract is a product
and whether each of the parties exerted of mutual consent and not of compulsion.
"reasonable effort at good faith bargaining." ○ As such, the duty to bargain does not include the
■ This is so because a deadlock is defined as obligation to reach an agreement.
follows:
 ○ In this light, the corporation’s unswerving assumption of jurisdiction to the charge of unfair
position on the matter of annual lump sum labor practice for bargaining in bad faith.
payment in lieu of wage increase did not, by ● The power of the Secretary of Labor and
itself, constitute bad faith even if such position Employment to assume jurisdiction over this
caused a stalemate in the negotiations, as dispute includes and extends to all questions and
correctly ruled by the SOLE in the decision dated controversies arising from the said dispute, such as,
June 8, 2005. but not limited to the union’s allegation of bad faith
● As there was no bad faith on the part of the company bargaining. It also includes and extends to the
in its bargaining with the union, deadlock was various unresolved provisions of the new CBA such
possible and did occur. as compensation
○ The union’s reliance on item 8 of the ground rules ○ The labor dispute between the union and the
governing the parties’ negotiations which company concerned the unresolved matters
required mutual consent for a declaration of between the parties in relation to their
deadlock was reduced to irrelevance by the negotiations for a new CBA.
actual facts. Contra factum non valet ○ As this Court elucidated in Bagong Pagkakaisa ng
argumentum. There is no argument against Manggagawa ng Triumph International v. Secretary
facts. of the Department of Labor and Employment:
● The union only caused confusion in the proceedings ■ Article 263(g) is both an extraordinary and a
before the SOLEwhen it questioned the latter’s preemptive power to address an extraordinary
assumption of jurisdiction over the labor dispute situation - a strike or lockout in an industry
between the union and the company on the ground indispensable to the national interest. This
that the "Secretary erred in assuming jurisdiction grant is not limited to the grounds cited in the
over the ‘CBA’ case when it [was] not the subject notice of strike or lockout that may have
matter of the notice of strike" because the case was preceded the strike or lockout; nor is it limited
"all about ‘ULP’ in the form of bad faith bargaining." to the incidents of the strike or lockout that in
○ For the union, the SOLE should not have touched the meanwhile may have taken place. As the
the issue of the CBA as there was no CBA term "assume jurisdiction" connotes, the
deadlock at that time, and should have limited 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 all workers under the same terms and conditions
the strike or lockout; it includes and extends to prevailing before the strike or lockout. The Secretary
all questions and controversies arising from or of Labor and Employment or the Commission may
related to the dispute, including cases over
seek the assistance of law enforcement agencies to
which the labor arbiter has exclusive
ensure the compliance with this provision as well as
jurisdiction.
with such orders as he may issue to enforce the
Dispositive same.
WHEREFORE, the petition is DENIED. ● Nabus vs CA:
The doctrine states that a fact or question
Notes which was in issue in a former suit, and was there
● ART. 263. Strikes, picketing, and lockouts. – x x x (g) judicially passed on and determined by a court of
When, in his opinion, there exists a labor dispute competent jurisdiction, is conclusively settled by
causing or likely to cause a strike or lockout in an the judgment therein, as far as concerns the
industry indispensable to the national interest, the parties to that action and persons in privity with
Secretary of Labor and Employment may assume them, and cannot be again litigated in any future
jurisdiction over the dispute and decide it or certify action between such parties or their privies, in the
the same to the Commission for compulsory same court or any other court of concurrent
arbitration. Such assumption or certification shall jurisdiction on either the same or a different
have the effect of automatically enjoining the cause of action, while the judgment remains
intended or impending strike or lockout as specified unreversed or unvacated by proper authority. The
in the assumption or certification order. If one has only identities thus required for the operation of
already taken place at the time of assumption or the judgment as an estoppel x x x are identity of
certification, all striking or locked out employees parties and identity of issues.
shall immediately return to work and the employer It has been held that in order that a judgment in
shall immediately resume operations and readmit one action can be conclusive as to a particular
 matter in another action between the same
parties or their privies, it is essential that the
issues be identical. If a particular point or
question is in issue in the second action, and the
judgment will depend on the determination of
that particular point or question, a former
judgment between the same parties [or their
privies] will be final and conclusive in the second
if that same point or question was in issue and
adjudicated in the first suit[.] x x x.
● A “labor dispute” is defined under Article 212(1) of
the Labor Code as follows: ART. 212. Definitions.—x
x x x x x x (1) “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.
TOPIC: The Collective Bargaining Agreement; • Respondent filed a Notice of Strike. The case was
Definition/Contents placed under preventive mediation, but all efforts
Lepanto Ceramics, Inc. v. Lepanto Ceramics at conciliation failed. The case was then referred
Employers Association to the Voluntary Arbitrator.
Mar. 2, 2010 | Perez, J. • In voluntary arbitration, Respondent noted that in a
Petitioner: Lepanto Ceramics Inc speech, one of the company’s top executives
Respondent: Lepanto Ceramics Employers assured the employees of said bonus. However, its
Association HR Dept. informed them that the traditional bonus
would not be given as the company’s earnings
FACTS: were intended as payment of its bank loans.
• 1998 – Petitioner gave a Php3,000 bonus to its o It had been the traditional practice of Petitioner
employees who are members of Respondent to grant its members Christmas bonus during
• 1999 CBA – Grants Christmas bonus/package for the end of the calendar year as an expression
Respondent’s members. It was one of the of gratitude to the employees. The bonus was
enumerated “existing benefit, practice of either in cash or in the form of company tiles.
traditional rights” which “shall remain in full force • Petitioner’s arguments
and effect.” o It is not a demandable and enforceable
• 1999-2001 obligation.
o The bonus was not in cash. Instead, Petitioner o Workers are not entitled to a bonus if the
gave Tile Redemption Certificates equivalent to company does not make profits. Petitioner
Php3,000. incurred net losses (due to the 1997 financial
• But in 2002 (which is the root of the current crisis) for the years 2001 and 2002 totaling to
dispute), Petitioner gave a year-end cash benefit of P1.5 billion; and since 1999, when the CBA was
P600 and offered a cash advance to interested signed, the company’s accumulated losses
employees equivalent to 1 month salary payable in amounted to over P2.7 billion.
one year. ▪ This has legally released P from its
o This was rejected by respondent – says it is in obligation (Art. 1267, Civil Code).
violation of the CBA. o Grant of a one (1) month salary cash advance
was not meant to take the place of a bonus but
 was meant to show the company’s sincere
desire to help its employees despite its ISSUE: WON Petitioner must pay the Christmas bonus
precarious financial condition. (YES)
o CBA provision on a “Christmas gift/bonus”
refers to alternative benefits. RULING/RATIO –
• Voluntary Arbitrator: Petitioner must pay What is a bonus?
o The bonus was given prior to the effectivity of • This is an act of gratuity or liberality on the part of
the CBA, and that the financial losses is not a the giver. It is given to the employee for his
sufficient reason to exempt it from granting industry and loyalty which contributed to the
the bonus. success of the employer’s business and made
o CBA is a binding contract, and is the law possible the realization of benefits.
between the parties. • Generally, this is not a demandable and
o Since Petitioner already gave P600, Petitioner enforceable obligation. For it to be one, it must
should only pay the balance (P2,400). have been promised by the employer and
CA: Affirmed the VA expressly agreed upon by the parties.
• Petitioner offered Respondent such bonus in 1998 IN THIS CASE
or before the execution of the 1999 CBA, which • The bonus is integrated in the CBA; hence, it is a
incorporated said benefit as a traditional right of demandable obligation.
the employees • By virtue of its incorporation, the bonus has
• This does not involve the exercise of management become more than just an act of generosity on the
prerogative because prior to this, it was given part of Petitioner, but a contractual obligation.
continuously on or about Christmas time. This can • The CBA is the law between the parties, and they
no longer be withdrawn because this would then are obliged to comply with its provisions.
amount to a diminution of the employee’s existing • A CBA refers to a negotiated contract between a
benefits. legitimate labor organization and the employer,
• As can be gleaned from the CBA, the payment of concerning wages, hours of work and all other
the bonus was not contingent upon the realization terms and conditions of employment in a
of profits or not related to the profitability of bargaining unit. As in all other contracts, the
business operations. parties to a CBA may establish such stipulations,
 clauses, terms and conditions as they may deem The Collective Bargaining Agreement -
convenient, provided these are not contrary to law, Definition/Contents
morals, good customs, public order or public
08 PAL, Inc. vs. PALEA
policy.
• IN THIS CASE March 12, 2008 | Chico-Nazario, J. |
o The giving of the bonus is without qualification.
o The CBA does not state that it depends on Petitioner/s: PHILIPPINE AIRLINES, INCORPORATED
Petitioner’s financial standing. Respondent/s: PHILIPPINE AIRLINES EMPLOYEES
o If such was the intention, it should have been ASSOCIATION (PALEA)
expressed in the CBA.
• Re: financial losses suffered by Petitioner Doctrine:
o Petitioner was very much aware of the The benefits of a CBA extend to the laborers and
imminence and possibility of business losses employees in the collective bargaining unit, including
due to the 1997 crisis, and yet, from 1999-2001,
those who do not belong to the chosen bargaining
it did not stop honoring the CBA provision—it
labor organization. Otherwise, it would be a clear case
still continued to give the P3k.
of discrimination.To be entitled to the benefits under
o Petitioner’s remedy is not to invalidate the CBA
provision, but it lies in the parties’ clarification the CBA, the employees must be members of the
of the same in subsequent CBA negotiations bargaining unit, but not necessarily of the labor
(Art. 253, Labor Code). organization designated as the bargaining agent.
• Principle of non-diminution of benefits Stipulations made in CBAs become contractual
o Founded on the constitutional mandate to
obligations. Where the CBA is clear and unambiguous,
protect the rights of the workers and to promote
it becomes the law between the parties, and
their welfare and to afford labor full protection.
compliance therewith is mandated by the express
o Any benefit and supplement enjoyed by the
employees cannot be reduced, diminished, policy of the law.
discontinued, or eliminated by the employer. Facts:

DISPOSITIVE: CA Affirmed
 ● Feb. 6, 1987 - PAL and PALEA entered into a ○ saying that rank and file employees who
CBA for 1986-1989 were regularized after April 30, 1988 were
○ the CBA required PAL to pay its rank and not entitled to the 13th month pay since
file employees (1) 13th month pay (Mid- they were already given their Christmas
year Bonus) and (2) Christmas Bonus1 bonuses on Dec. 9, 1988
● April 22, 1988 - prior to the payment of the 13th ○ the guideline providing for this payment
month pay, PAL released guidelines2 for those not entitled to receive it in May is
● PALEA assailed the implementation of the in compliance with the IRR implementing
guideline on the ground that all PAL employees the 1988 Labor Code3
should be paid their 13th month pay. In ○ the phrase “its equivalent” includes
December, PALEA sent a letter informing PAL Christmas bonus, mid-year bonus, and
that several regular employees failed to receive other cash bonuses
their 13th Month Pay and requesting that it be ● PALEA filed a labor complaint for unfair labor
paid practice (ULP) against PAL before the NLRC
● PAL responded: arguing that the cut-off period for regularization

1 b) Other ground employees in the general payroll, not falling within category a) above shall
Section 4—13th Month Pay (Mid-year Bonus)
receive their 13th Month Pay on or before December 24, 1988;
A 13th month pay, equivalent to one month’s current basic pay, consistent with the existing
2) Amount
practice shall be paid in advance in May.
For category a) above, one month basic salary as of April 30, 1988; Employees covered under
Section 5—Christmas Bonus
1 b) above shall be paid not less than 1/12 of their basic salary for every month of service
The equivalent of one month’s current basic pay as of November 30, shall be paid in within the calendar year.
December as a Christmas bonus. Payment may be staggered in two (2) stages. It is distinctly
understood that nothing herein contained shall be construed to mean that the Company may
not at its sole discretion give an additional amount or increase the Christmas bonus.” 3
Sec. 3. Employees covered—the Decree shall apply to all employees except to: x x x

c) Employers already paying their employees 13-month pay or more in a calendar year or its
2 equivalent at the time of this issuance; x x x
1) Eligibility

a) Ground employees in the general payroll who are regular as of April 30, 1988;
 shouldn’t be used as the parameter for granting
the 13th month pay since the law covers all PALEA: (1) all employees in PAL are entitled to the
employees same benefit since they are within the same collective
● LA: dismissed the complaint. PAL is not guilty of bargaining unit and the entitlement to such benefit
ULP in withholding the grant of the 13th Month spills over even to non-union members (2) non-
Pay since the giving of the bonus was merely an payment of the benefit will constitute a diminution of
additional practice made in the past. No privileges or benefits
agreement or existing practice was violated.
● NLRC: the 13th month pay is distinct from the
Ruling:
Christmas Bonus. PAL must pay both bonuses.
● CA affirmed: if the intention is not to include W/N the CA was wrong to affirm the order of the NLRC
employees regularized beyond April 30, 1988, for payment of the 13th month pay to its employees
they would not have included letter (c). Also, all regularized after April 30, 1998 — NO. Benefits
doubts should be resolved in favor of labor. granted in a CBA extend to all employees in the
collective bargaining unit represented by the labor
organization whether or not they are members of the
PAL: (1) the CBA does not apply to non-regular labor organization that secured such terms.
employees such that any benefits arising from the ● the CBA itself states that it is applicable to all
agreement cannot be made to apply to them, employees in the bargaining unit without
including the 13th month bonus (2) it has always been
distinguishing between regular and non-regular
the company’s practice not to extend the bonus to
employees4
employees who haven’t attained regular status prior
to the month of May, when the bonus accrues

4 and/or privileges as are not expressly provided for in this Agreement but which are now
Section 3. Application.—All the terms and conditions of employment of employees within
being accorded in accordance with the PAL Personnel Policies and Procedures Manual, shall
the bargaining unit are embodied in this Agreement, and the same shall govern the
relationship between the Company and such employees. On the other hand, all such benefits
 ● it is a well-settled doctrine that the benefits of a ● there’s no showing that the non-regular status of
CBA extend to the laborers and employees in the the employees by the cut-off date distinguishes
collective bargaining unit, including those who their interests from those of the regular
do not belong to the chosen bargaining labor employees so as to exclude them from the
organization. Otherwise, it would be a clear case collective bargaining unit and the benefits of the
of discrimination. CBA.
● To be entitled to the benefits under the CBA, the
W/N the 13th month pay can be equated to the
employees must be members of the bargaining
Christmas Bonus. — NO. The CBA itself distinguishes
unit, but not necessarily of the labor
between the two bonuses and provides for the
organization designated as the bargaining
payment of both separately. By virtue of its inclusion
agent. in the CBA, the payment of both bonuses has become
● A “bargaining unit” is a group of employees a contractual obligation.
comprised of all or less than all of the entire
body of employees, which the collective interest ● PD 851 and Memorandum Order 23 mandate
of all the employees, consistent with equity to that all employers must pay all their employees
the employer, indicated to be the best suited to a 13th month pay not later than December 24 of
serve the reciprocal rights and duties of the every year, regardless of the amount of their
parties under the collective bargaining basic salary, designation or employment status,
provisions of the law. and irrespective of the method by which their
● The allegation that the non-regular employees wages are paid, provided they have worked for
do not belong to the collective bargaining unit at least 1 month during a calendar year
and are not covered by the CBA is therefore ● PD 851 does state that employers already
unjustified and unsubstantiated. paying their employees 13th month pay or more

be deemed also part and parcel of the terms and conditions of employment, or of this
Agreement.
 in a calendar year are already exempted from Dispositive
the mandatory coverage of the law BUT in the WHEREFORE, premises considered, the petition is
CBA, PAL agreed to pay its employees the 13t hereby DENIED. The Decision of the Court of Appeals
month pay AND the Christmas bonus. They were promulgated on 30 April 1999, and its Resolution
distinct and separate benefits. dated 10 March 2000, are hereby AFFIRMED. Costs
○ PAL cannot unilaterally and arbitrarily against petitioner Philippine Airlines, Inc.
declare that for non-regular employees, the
Christmas bonus is the same as the 13th
month pay
● although payment of the Christmas bonus is an
act of generosity from the employer, by virtue of
its incorporation into the CBA, it has become a
contractual obligation.
● in the CBA, the Christmas Bonus is
distinguished from the 13th month pay which is
due in May. This being the case, the only logical
inference that could be derived is that PAL
intended to give the members of the bargaining
unit a Christmas bonus over and above its
legally mandated obligation to grant the 13th
month pay
● 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.
09 NORKIS FREE AND INDEPENDENT WORKERS 2. On January 27, 1998, a re-negotiation of the CBA
UNION v. NORKIS TRADING COMPANY INC. was terminated and pursuant to which a
June 30, 2005 | Panganiban, J. | Memorandum of Agreement was forged between
the parties which bound the company to a further
Doctrine: The CA correctly observed that the import of
increase of 10 pesos to the daily salaries. As a
Wage Order No. ROVII-06 should be considered in the
result of this, the agreed P10.00 re-negotiated
implementation of the government-decreed increase.
salary increase effectively raised the daily wage
The Wage Order was intended to fix a new minimum
of the employees to P165.00 retroactive August
wage only, not to grant across-the-board wage
1, 1997; and another increase of P10.00, effective
increases to all employees in Region VII. The intent of
August 1, 1998, raising the employees’ daily wage
the Order is indicated in its title, Establishing New
to P175.00.
Minimum Wage Rates, as well as in its preamble: the
3. On March 10, 1998, the Regional Tripartite Wage
purpose, reason or justification for its enactment was
Productivity Board (RTWPB) of Region VII issued
to adjust the minimum wage of workers to cushion the
Wage Order ROVII-06 which established the
impact brought about by the latest economic crisis not
minimum wage of P165.00, by mandating a wage
only in the Philippines but also in the Asian region.
increase of five (P5.00) pesos per day beginning
Facts:
April 1, 1998, thereby raising the daily minimum
1. The parties in this case entered into a Collective wage to P160.00 and another increase of five
Bargaining Agreement (CBA) effective from (P5.00) pesos per day beginning October 1, 1998,
August 1, 1994 to July 31, 1999, which effectively thereby raising the daily minimum wage to
bound the Company to grant a 15-peso increase P165.00 per day.
to the daily salaries of all its regular or permanent 4. In accordance with the Wage Order and Section
employees. Section 2 further states: 2, Article XII of the CBA, petitioner union
demanded an across-the-board increase.
Sec. 2. Minimum Wage Law Amendment. In the event Respondent, however, refused to implement the
that a law is enacted increasing minimum wage, an Wage Order, insisting that since it has been
across-the-board increase shall be granted by the paying its workers the new minimum wage of
company according to the provisions of the law.
 5. P165.00 even before the issuance of the Wage ROVII-06? – NO, it has already sufficiently complied
Order, it cannot be made to comply with said with the wage order.
Wage Order.
6. 5. Argument of respondent Company: long before Effect of Wage Order No. ROVII-06 on the Parties CBA
the passage of Wage Order ROVII-06 on March
Petitioner union repeatedly invokes Section 2 (quoted
10, 1998, and by virtue of the Memorandum of
verbatim in the first page).
Agreement it entered with herein petitioner union,
SC: Petitioner union disregards altogether in its
it was already paying its employees a daily wage
argument the qualifying phrase according to the
of P165.00 per day retroactive on August 1, 1997,
provisions of the law and merely focuses its attention
while the minimum wage at that time was still
on the across-the-board increase clause. Given the
P155.00 per day. On August 1, 1998, respondent
entire sentence, it is clear that the above-quoted CBA
again granted an increase from P165.00 per day
provision does not support the unyielding view of
to P175.00, so that at the time of the effectivity
petitioner that the issuance of Wage Order No. ROVII-
of Wage Order No. 06 on October 1, 1998
06 entitles its members to an across-the-board
prescribing the new minimum wage of P165.00
increase, absolutely and without any condition.
per day, [respondents] employees were already
receiving P175.00 per day. The CA correctly obse rved that the import of Wage
7. 6. VA: Ruled for the petitioner union. The Order No. ROVII-06 should be considered in the
company has not yet complied with the order. implementation of the government-decreed increase.
7. CA: Ruled for the respondent company, The Wage Order was intended to fix a new minimum
respondent had already complied with the wage wage only, not to grant across-the-board wage
order. increases to all employees in Region VII. The intent of
the Order is indicated in its title, Establishing New
Ruling:
Minimum Wage Rates, as well as in its preamble: the
Whether or not respondent violated the CBA in its purpose, reason or justification for its enactment was
refusal to grant its employees an across-the- board to adjust the minimum wage of workers to cushion the
increase as a result of the passage of Wage Order No. impact brought about by the latest economic crisis not
only in the Philippines but also in the Asian region.
 Parenthetically, there are two methods of adjusting Class A 165.00 150.00
the minimum wage: a. floor wage method, and b. Class B 155.00 140.00
salary-ceiling method. A cursory reading of the subject Class C 145.00 130.00
Wage Order convinces us that the intention of the
Regional Board of Region VII was to prescribe a Class D 135.00 120.00
minimum or floor wage; not to determine a salary
These provisions show that the prescribed minimum
ceiling. Had the latter been its intention, the Board
wage after full implementation of the P10 increase in
would have expressly provided accordingly.
the Wage Order is P165 for Class A private non-
The text of Sections 2 and 3 of the Order states: agriculture sectors. It would be reasonable and logical,
therefore, to infer that those employers already paying
Section 2. AMOUNT AND MANNER OF INCREASE. their employees more than P165 at the time of the
Upon the effectivity of this Order, the daily minimum issuance of the Order are sufficiently complying with
wage rates for all the workers and employees in the the Order.
private sector shall be increased by Ten Pesos (P10.00)
per day to be given in the following manner: Notably, the RTWPB was interpreting only its own
issuance, not a statutory provision. The best authority
i. Five Pesos (P5.00) per day effective April 1, 1998, to construe a rule or an issuance is its very source, in
and this case the RTWPB. Without a doubt, the Board, like
ii. Additional Five Pesos (P5.00) per day effective any other executive agency, has the authority to
October 1, 1998. interpret its own rules and issuances; any phrase
contained in its interpretation becomes a part of those
Section 3. UNIFORM WAGE RATE PER AREA rules or issuances themselves. Therefore, it was proper
CLASSIFICATION. To effect a uniform wage rate for the CA to consider the letter dated June 13, 2000,
pursuant to Section 1 hereof, the prescribed minimum written by the RTWPB to explain the scope and import
wage after full implementation of this Order for each of the latters own Order, as such interpretation is
area classification shall be as follows: deemed a part of the Order itself. That the letter was
belatedly submitted to that Court is not fatal in the
Area Classification Non-Agriculture Sector Agriculture
determination of this particular case.
Sector
[COLLECTIVE BARGAINING AGREEMENT – LIBERAL ○ Real Estate-Secured Housing Loan: not
CONSTRUCTION] exceeding P450,000, w/ 9% int rate
○ Car Loan: any availment thereof shall operate
10 BPI v. BPI EMPLOYEES UNION – METRO MANILA
to decrease the available housing loan limit.
August 22, 2012 | Peralta, J. | Thus, the combined amount of both housing
and car loans that may be availed of shall not
exceed P450,000.
Petitioner: BANK OF THE PHILIPPINE ISLANDS ○ Emergency Loans: Maximum amt of P15,000
Respondent: BANK OF THE PHILIPPINE ISLANDS ● Thereafter, BPI issued a "no negative data bank
EMPLOYEES UNION- METRO MANILA policy"5 for the implementation/availment of the
loans which the Union objected to, thus, resulting
Doctrine: in case of doubt, all labor legislation and all into labor-management dialogues. The matter was
labor contracts shall be construed in favor of the safety eventually raised to the Voluntary Arbitrator (VA).
and decent living of the laborer. Any doubt or ambiguity ● VA: held in favor of the Union.
in the contract between management and the union ○ The implementation of the “no negative data
members should be resolved in favor of the latter. policy” violates the CBA
● CA: affirmed.
● Hence, this petition, where BPI argues:
Facts:
○ the "no negative data bank policy" aims to
● BPI and BPI Employees Union-Metro Manila (Union) encourage employees of a banking institution
had an existing Collective Bargaining Agreement to exercise the highest standards of conduct,
(CBA) which took effect on April 1, 2001. considering the bank's fiduciary relationship
● The CBA provided for loan benefits and relatively with its clients.
low interest rates. ○ The CBA reveals an express conformity to
○ Multi-Purpose Loan: not exceeding P40,000, BPI’s prerogative to issue policies in availing
w/ 8% int rate loans under the CBA

5Reference to the Negative Data Bank and other sources of financial data shall be can avail of the loan, the said employee or his/her spouse must not be listed in the
made for purposes of evaluation of all loans. In other words, the bank looks at the negative data bank, or if previously listed therein, must obtain a clearance at least one
employees outstanding obligations (and requires them to pay those) prior to year or six months as the case may be, prior to a loan application.
and as condition of approval of loan. e.g. before an employee or his/her spouse
 the negotiations for a new CBA, but in the meantime,
it has to honor the provisions of the existing CBA.
Ruling:
● Article 1702 of the Civil Code provides that, in case
W/N the “no negative data bank policy” is a valid of doubt, all labor legislation and all labor contracts
requirement and does not violate the CBA. NO shall be construed in favor of the safety and decent
● The CBA contains no provision on the "no negative living of the laborer. Thus, this Court has ruled that
data bank policy" as a prerequisite in the entitlement any doubt or ambiguity in the contract between
of the benefits. management and the union members should be
○ A close reading of the CBA would show that resolved in favor of the latter. Therefore, there is no
the terms and conditions contained therein doubt, in this case, that the welfare of the laborers
relative to the availment of the loans are plain stands supreme.
and clear, thus, all they need is the proper
implementation. Dispositive
● Although it can be said that BPI is authorized to
WHEREFORE, the Petition for Review under Rule 45 of
issue rules and regulations pertinent to the
the Revised Rules of Court, dated January 20, 2007, of
availment and administration of the loans under the
petitioner Bank of the Philippine Islands, is hereby
CBA, the additional rules and regulations, however,
DENIED and the Court of Appeals' Decision and
must not impose new conditions which are not
Resolution, dated June 8, 2006 and November 29, 2006,
contemplated in the CBA and should be within the
respectively, are hereby AFFIRMED.
realm of reasonableness.
● BPI should have presented such proposal to the
union during the negotiations. To include such
Notes
policy after the effectivity of the CBA is deceptive
and goes beyond the original agreement between On procedural issue:
the contracting parties. The Supreme Court is not a trier of facts, and in a
● BPI, the employer, can propose the inclusion of the petition for review on certiorari, the Court’s jurisdiction
said policy upon the expiration of the CBA, during is limited to reviewing errors of law.
[THE CBA; INTERPRETATION, ADMINISTRATION, AND ○ This includes the possession of a graduate
ENFORCEMENT; CONTRACT INFIRMITY/VOID degree before the expiration of the
CONTRACT] probationary period which is within 5
12 SON V. UST semesters from the date of hiring. 

April 18, 2018 | DEL CASTILLO, J. | ○ Failure to meet the requirement will deem
him separated from service. 

Petitioner/s: RAYMOND A. SON, RAYMOND S. ○ If they are made to continue despite not
ANTIOLA, and WILFREDO E. POLLARCO accomplishing a masters’ degree, 
they
Respondent/s: UNIVERSITY OF SANTO TOMAS, FR. are deemed to have gained tenure.


ROLANDO DELA ROSA, DR. CLARITA CARILLO, DR. ○
CYTHIA LOZA, FR. EDGARDO ALAURIN, and the ● The CBA provision relative to the requirement of
COLLEGE OF FINE ARTS AND DESIGN FACULTY a Master's degree in the faculty member's field of
COUNCIL instruction is in line with the requirement laid
down in the 1992 Revised Manual of Regulations
Facts: for Private Schools issued by then DECS, and the
● University of Santo Tomas (UST) is an CHED's Memorandum Order No. 40-08 - or
educational institution operating under the Manual of Regulations for Private Higher
authority of CHED. Education of 2008.
● Raymond A. Son (Son), Raymond S. Antiola ● Son, et al. did not possess the required Master's
(Antiola), and Wilfredo E. Pollarco (Pollarco) are degree, but were nonetheless hired by UST on the
full time professors and are members of the UST condition that they fulfill the requirement within
Faculty Union, with which UST at the time had a the prescribed period. Son, et al. enrolled in the
CBA. Master's program, but were unable to finish the
○ Son and Antiola were hired in June, 2005, same. In spite of their failure to obtain the
while Pollarco was employed earlier, or in required Master's degree, they continued to teach
June, 2004. even beyond the period given for completion
● They were faculty members on probationary thereof.
status until all the requirements provided under ● On March 3, 2010, CHED issued a Memorandum
their CBA are met. addressing the minimum requirement of a
 graduate degree for faculty members and the ○ In spite of the CBA provision on tenure, UST
same was sent as a memorandum by UST to its illegally terminated their employment
faculty members ceasing to re-appoint those ○ UST is guilty of bad faith and unfair labor
who have not met such requirement but if they practice on account of their violation of the
are already due for their thesis or defense may CBA
write an appeal for consideration.

 ○ UST is guilty of bad faith when they re-hired
● UST informed Son et al. and other affected the other professors even when they did not
faculty members of the university's decision to possess the required Master's degree,
cease re-appointment of those who failed to while they (Son, et al.) were discriminated
complete their Master's degrees, but allow a against and terminated from work just
written appeal from the concerned faculty because they did not file the prescribed
members who are due for thesis appeal letter.
defense/completion of their Master's degrees. ○ They should be paid backwages and other
● Son, et al. did not make a written appeal, money claims.
operating under the belief that they have been ● UST:
vested tenure under the CBA for their continued ○ There is no unfair labor practice committed,
employment despite failure to obtain the required because the CBA provision adverted to is
Master's degree. not an economic provision.
● Son, et al. received termination/thank you letters ○ The implementation of Memorandum Order
signed by the dean of their for their failure to No. 40-08 takes legal precedence over the
obtain the required Master's degree. parties' CBA
● Son, et al. filed a labor case against UST, et al. for ○ The CBA provision granting tenure by
unfair labor practice, illegal dismissal, and default may no longer be enforced on
recovery of money claims. account of the requirement under
○ Since they have already acquired tenure by Memorandum Order No. 40-08, an
default pursuant to the tenure provision in administrative regulation that is equivalent
the CBA, they could not be dismissed for to law and has the effect of abrogating the
failure to complete their respective tenure provision of the CBA
Master's degrees
 ○ Memorandum Order No. 40-08 is a police ○ UST-UST Faculty Union CBA took
power measure for the protection and precedence over CHED Memorandum Order
promotion of quality education, and as No. 40-08
such, the CBA should yield to the same and ○ Son, et al. acquired tenure by default by
to the broader interests of the State said CBA provision
○ Son, et al. could not have acquired tenure ○ UST continued to hire faculty members
since they did not possess the minimum without the required Master's degree in
qualification - a Master's degree - their field of instruction even after Son, et
prescribed under Memorandum Order No. al. were dismissed from work
4008 ● NLRC (Special Division): set aside previous NLRC
○ The CBA provision on tenure by default has decision
become illegal as it is contrary to law, and ○ CHED Memorandum Order No. 40-08 took
for this reason, it may not be enforced, nor precedence over the parties' CBA
be the object of estopppel, and produces no ○ CBA should conform to the said
effect whatsoever Memorandum, which had the force and
○ UST observed due process in terminating effect of law.
Son et al., probationary employees. ○ Since the CBA provision on tenure by
● LA: in favor of Son, et al. (awarded money claims, default did not conform to the CHED
damages, and attorney's fees) Memorandum, it is null and void.
○ Declared UST guilty of illegal dismissal and ● NLRC (Second Division): set aside NLRC (Special
unfair labor practice, as well as malice and Division) and reinstated LA
bad faith in illegally dismissing the former. ○ CHED Memorandum Order No. 40-08 was
○ Upheld the CBA provision granting tenure issued only in 2008, while the CBA was
by default to Son, et al., and declared that concluded in 2006 - thus, it may not be
Son, et al. were not accorded due process
retroactively applied in the absence of a
prior to dismissal.
specific provision authorizing retroactivity;
● NLRC: affirmed LA
and consequently, Son, et al. acquired
tenure.
 ● CA: reinstated NLRC (Special Division) power as provided for under the Education Act of
○ While every individual has autonomy to 1982. As such, it has the force and effect of law.
enter into any contract, the contractual ● University of the East v. Pepanio: The requirement
stipulations, however, must not be contrary of a masteral degree for tertiary education
to law, morals, good customs, public order, teachers was held to be not unreasonable but
or public policy. rather in accord with the public interest.
○ Hence, termination of Son et al. was valid ● Thus, when the CBA was executed between the
and legal. parties in 2006, they had no right to include
therein the provision relative to the acquisition of
Ruling:
tenure by default, because it is contrary to, and
1. W/N Son et. al were illegally dismissed – NO, they
are not qualified to teach in the undergraduate thus violative of the 1992 Revised Manual of
programs of UST. Regulations for Private Schools that was in effect
● The requirement of a Master's degree in the at the time.
undergraduate program professor's field of ○ As such, said CBA provision is null and void,
instruction has been in place, through DECS and can have no effect as between the
Order 92 (series of 1992, August 10, 1992) or the parties. "A void contract is equivalent to
Revised Manual of Regulations for Private nothing; it produces no civil effect; and it
Schools. Article IX, Section 44, paragraph 1 (a) does not create, modify or extinguish a
thereof provides that college faculty members juridical relation."
must have a master's degree in their field of ● When CHED Memorandum Order No. 40-08 came
instruction as a minimum qualification for out, it merely carried over the requirement of a
teaching in a private educational institution and masteral degree for faculty members of
acquiring regular status therein. undergraduate programs contained in the 1992
● DECS Order 92, Series of 1992 was promulgated Revised Manual of Regulations for Private
by the DECS in the exercise of its rule-making Schools.
 ○ It cannot therefore be said that the law, and provides quality education by hiring only
requirement of a master's degree was qualified teaching personnel.
retroactively applied, because it was ● The doctrine of estoppel cannot operate to give
already the prevailing rule with the effect to an act which is otherwise null and void
issuance of the 1992 Revised Manual of or ultra vires.
Regulations for Private Schools. ● No estoppel can be predicated on an illegal act.
● HERE, Son et al. are not qualified to teach in the 3. W/N UST is deemed to be in estoppel or have waived
undergraduate programs of UST. And while they the application of the requirement under CHED
were given ample time and opportunity to satisfy Memorandum Order No. 40-08 by agreeing to the
the requirements by obtaining their respective tenure by default provision in the CBA – NO, they are
master's degrees, they failed in the endeavor. not tenured
● The minimum requirement of a master's degree ● It cannot be said either that in requiring
in the undergraduate teacher's field of instruction petitioners to file a written appeal, respondents
has been cemented in DECS Order 92, Series of are guilty of bad faith and malice for practically
1992. Both Son et al. and UST have been violating forcing the former to renounce their tenure. There
it. is no tenure to speak of in the first place.
2. W/N UST is deemed to be in estoppel or have
waived the application of the requirement under CHED Dispositive
Memorandum Order No. 40-08 by agreeing to the WHEREFORE, the Petition is DENIED. The September
tenure by default provision in the CBA – NO, such 27, 2013 Decision and January 29, 2014 Resolution of
waiver is contrary to law the Court of Appeals (CA) in CAG.R. SP No. 128666
● Such a waiver is precisely contrary to law. are AFFIRMED in toto.
Moreover, a waiver would prejudice the rights of
the students and the public, who have a right to
expect that UST is acting within the bounds of the
Doubt or Ambiguity in the CBA a. Section 1 of Article XIII of the CBA provided: “It
has always been the policy of the Holy Cross
13 Holy Cross of Davao College, Inc. v. Holy Cross
of Davao College that academic teaching
Faculty Union KAMAP
personnel must develop within their areas of
June 27, 2005 | Sandoval-Gutierrez, J. | competence and in so doing have exercised its
prerogative to demand that academic
teaching personnel take the necessary
Petitioner/s: Holy Cross of Davao College, Inc. measure to effect their upgrading in acquiring
Respondent/s: Holy Cross Faculty Union KAMAP higher academic degree. In view thereof, the
Management shall grant to all academic
personnel a grant-in-aid program, where the
Doctrine: Any doubt or ambiguity in the contract (CBA) academic teaching personnel, whenever
between management and the union members should scholarship opportunities should arise, be
be resolved in favor of the latter. a. The afforded a leave of absence to further their
provisions are very clear that there is no need for studies in Institutions of Higher Learning with
interpretation. Contracts which are not ambiguous are a grant-in- aid equivalent to their salary and
to be interpreted according to their literal meaning and allowance (when there is a mandated wage
not beyond their obvious intendment. order) that the concerned academic teaching
personnel is receiving at the time of the
Facts:
scholarship grant, under the following
1. Petitioner Holy Cross of Davao College, Inc. is a conditions:
tertiary level educational institution at Sta. Ana Ave., That whenever the school wishes to grant
Davao City. faculty development scholarships, notice
2. June 1997: Petitioner and Respondent Holy Cross to the entire faculty of the department
Faculty Union KAMAP executed a collective concerned shall be made through a public
bargaining agreement (CBA), which provided for a announcement in the bulletin board. In
faculty development scholarship for academic cases where there are two (2) or more
teaching personnel. applicants, the Department Head shall set a
committee chosen from among the regular
 and permanent faculty of the department a. Jean Legaspi, a permanent English teacher
composed of at least three (3) but not more and member of respondent Union, submitted
than five (5) members. her application.
That the academic teaching personnel b. March 31, 1999: petitioner issued Policy
grantee shall finish his/her scholarship Statement and Guidelines on Educational
grant within time frame of the scholarship Trips Abroad.
grant unless prevented by some causes c. When Jean’s application was accepted by
over, above and beyond his/her control. JICC, she requested petitioner to allow her to
That the academic teaching personnel be on study leave with grant-in aid equivalent
grantee shall sign a contract with the Holy to 18 months salary and allowance pursuant
Cross of Davao College to serve therein for to Section 1, Article XIII of the CBA.
at least two (2) years for every year of d. Petitioner denied her request because she
scholarship study. was not entitled to grant in-aid under its policy
That should he/she fail to comply with the (see fact 3b), which required that
conditions of the scholarship grant, i. The course must be related to the area
she/she shall reimburse the Holy Cross of of the teacher’s competence
Davao College with all the amount he/she ii. The course must be in the pursuit of a
has received during the pendency of the higher degree.
grant together with all interest thereon e. Petitioner argued that these conditions were
allowed by law. No clearance shall be given not satisfied since the training will be
until full reimbursement plus interest would conducted in a foreign language and will only
have been made. lead to the grant of a certificate of completion
3. January 16, 1998: petitioner was invited for the 1999 and not a masters or higher degree.
Monbusho scholarship grant (In-Training for f. Petitioner only granted her 12 months study
Teachers) offered and sponsored by the Japanese leave without pay.
government, through the Japan Information Cultural 4. Before Jean left, she asked respondent Union to
Center (JICC). submit the matter to the Grievance Committee,
which was not settled.
 a. Respondent Union filed a complaint for ii. Furthermore, it was petitioner who
payment of grant-in aid before the National advertised the availability of the
Conciliation and Mediation Board (NCMB) scholarship and it encouraged its
against petitioner. Both agreed to submit the faculty to apply for said scholarship.
case for voluntary arbitration. This shows that the petitioner believed
b. Voluntary Arbitrator: ruled IFO respondent and that availing of the training will
ordered petitioner to pay Jean’s grant-in aid contribute not only to the professional
benefits. advancement of its faculty, but also to
5. Petitioner’s MR was denied, so it appealed before the development of the quality
the Court of Appeals. education in the school.
6. CA: IFO Respondent. It ruled that iii. The fact that it would be conducted in
a. The terms of the CBA are clear and leave little Japanese does not negate the
room for further interpretation. It is considered program’s relevance to Jean’s work as
the law between the parties, since it contains an English teacher.
the agreed terms of employment of the EE iv. Lastly, while no degree, but only a
with his ER. Those unilaterally imposed orders certificate will be conferred, does not
or rules qualifying the terms contained in the bar Jean from availing of the benefits
CBA, such as the Policy, are subordinate to the under the CBA. The CBA only
CBA. At most such Policy is merely suppletory mentioned “higher degree”, which is a
and can neither contradict or undermine the broad term that can include programs
terms found in the CBA. that grant certificates and not degree.
b. Re: petitioner’s arguments (see fact 3e) v. The construction of any ambiguity in
i. Jean’s foreign training is clearly related the CBA, such as which course would
to her work with petitioner6 and will be relevant to Jean’s job, and whether
lead to an advancement in her such course comprises “higher
qualifications for her job.

of Special Subjects (e.g. Mathematics, Physics, Chemistry, Physical Education), and (d)
6 Observation Study (e.g. Inspection of a Class Participation in Special Extra-curricular Practice,
The training program which focuses on areas such as (a) Educational Management (e.g.
Inspection of Various Educational Research Services).
Educational Administration and Finance, School Management), (b) Methods of Education (e.g.
Teaching-Learning Process System, Curriculum Development, Educational Evaluation), (c) Study
 studies” should be made in favor of the afforded a leave of absence to further their
employee. studies in Institutions of Higher Learning with
7. Petitioner’s MR was denied, so it filed a R45 petition. a grant-in- aid equivalent to their salary and
It argued that allowance…”
a. CA’ interpretation of their CBA restricted their c. Paragraph 2 of Petitioner’s Policy Statement
right to academic freedom; and Guidelines for Trips Abroad for
b. It is not obliged to grant Jean a grant-in aid Professional Growth (SY 1998-1999): “The
since she failed to comply with the school recognizes that educational trips
substantive requirements of the CBA, which abroad promote both personal and
are: the course is within Jean’s competence professional growth. Hence, employees may
and she will acquire higher academic degree. travel abroad for study tours and to attend
i. seminars, conferences, and other related
Ruling: academic pursuits. The school may provide
financial assistance subject to the following
W/N Jean is entitled to the grant-in aid in light of the
guidelines: 2. That the employee is the official
CBA between the parties - YES. Any doubt or ambiguity
representative of the school upon
in the contract (CBA) between management and the
recommendation of the office head. As such,
union members should be resolved in favor of the
he/she receives regular salary.
latter.
2. These provisions state that academic teaching
1. Court’s basis personnel, like Jean, as recipient of a scholarship
a. Article 1702 of the New Civil Code: “(I)n case grant are entitled to a leave of absence with a grant-
of doubt, all labor legislation and all labor in-aid equivalent to their monthly salary and
contracts shall be construed in favor of the allowance, provided such grant is to promote their
safety and decent living for the laborer.” professional growth or to enhance their studies in
b. Article XIII, Section 1 of the CBA:”… institutions of higher learning.
Management shall grant to all academic a. The provisions are very clear that there is no
personnel a grant-in-aid program, where the need for interpretation. Contracts which are
academic teaching personnel, whenever not ambiguous are to be interpreted according
scholarship opportunities should arise, be
 to their literal meaning and not beyond their
obvious intendment.
b. Mactan Workers Union v. Aboitiz: terms and
conditions of a CBA constitute the law
between the parties. Those who are entitled to
its benefits can invoke its provisions.

Dispositive
WHEREFORE, the petition is DENIED. The assailed
Decision dated June 5, 2002 and Resolution dated
October 18, 2002 of the Court of Appeals in CA-G.R. SP
No. 65507 are AFFIRMED. Costs against petitioner.
Notes
Insert notes