SPECIAL FIRST DIVISION
[G.R. No. 127598. February 22, 2000]
MANILA
ELECTRIC COMPANY, petitioner, vs. Hon. Secretary of Labor
Leonardo Quisumbing and Meralco Employees and Workers Association (MEWA), respondents.
R E S O L U T I O N
YNARES_SANTIAGO, J.:
In the Decision promulgated on January 27,
1999, the Court disposed of the case as follows:
"WHEREFORE,
the petition is granted and the orders of public respondent Secretary of Labor
dated August 19, 1996 and December 28, 1996 are set aside to the extent set
forth above. The parties are directed to execute a Collective Bargaining
Agreement incorporating the terms and conditions contained in the unaffected
portions of the Secretary of Labor’s orders of August 19, 1996 and December 28,
1996, and the modifications set forth above. The retirement fund issue is
remanded to the Secretary of Labor for reception of evidence and determination
of the legal personality of the Meralco retirement fund."[1]
The modifications of the public respondent’s
resolutions include the following:
January 27,
1999 decision Secretary’s resolution
Wages -P1,900.00
for 1995-96 P2,200.00
X’mas bonus
-modified to one month 2 months
Retirees -remanded
to the Secretary granted
Loan to coops
-denied granted
GHSIP, HMP
and Housing loans
-granted up to P60,000.00 granted
Signing bonus
-denied granted
Union leave -40
days (typo error) 30 days
High voltage/pole
-not apply to those who are members of a team
not exposed to the
risk
Collectors -no
need for cash bond, no
need to reduce
quota and MAPL
CBU -exclude
confidential employees include
Union security
-maintenance of membership closed shop
Contracting out
-no need to consult union consult first
All benefits
-existing terms and conditions all terms
Retroactivity -Dec
28, 1996-Dec 27, 199(9) from Dec 1, 1995
Dissatisfied with the Decision, some alleged
members of private respondent union (Union for brevity) filed a motion for
intervention and a motion for reconsideration of the said Decision. A separate
intervention was likewise made by the supervisor’s union (FLAMES[2]) of petitioner corporation alleging that it has bona fide legal interest in the outcome of the case.[3] The Court required the "proper parties" to
file a comment to the three motions for reconsideration but the
Solicitor-General asked that he be excused from filing the comment because the
"petition filed in the instant case was granted" by the Court.[4] Consequently, petitioner filed its own consolidated
comment. An "Appeal Seeking Immediate Reconsideration" was also filed
by the alleged newly elected president of the Union.[5] Other subsequent pleadings were filed by the parties
and intervenors.
The issues raised in the motions for
reconsideration had already been passed upon by the Court in the January 27,
1999 decision. No new arguments were presented for consideration of the Court.
Nonetheless, certain matters will be considered herein, particularly those
involving the amount of wages and the retroactivity of the Collective
Bargaining Agreement (CBA) arbitral awards.
Petitioner warns that if the wage increase
of P2,200.00 per month as ordered by the Secretary is allowed, it would simply
pass the cost covering such increase to the consumers through an increase in
the rate of electricity. This is a non sequitur. The Court cannot be
threatened with such a misleading argument. An increase in the prices of
electric current needs the approval of the appropriate regulatory government
agency and does not automatically result from a mere increase in the wages of
petitioner’s employees. Besides, this argument presupposes that petitioner is
capable of meeting a wage increase. The All Asia Capital report upon which the
Union relies to support its position regarding the wage issue can not be an
accurate basis and conclusive determinant of the rate of wage increase. Section
45 of Rule 130 Rules of Evidence provides:
"Commercial
lists and the like. - Evidence of statements of matters of interest to
persons engaged in an occupation contained in a list, register, periodical, or
other published compilation is admissible as tending to prove the truth of any
relevant matter so stated if that compilation is published for use by persons
engaged in that occupation and is generally used and relied upon by them
therein."
Under the afore-quoted rule, statement of
matters contained in a periodical may be admitted only "if that
compilation is published for use by persons engaged in that occupation and is
generally used and relied upon by them therein." As correctly held in our
Decision dated January 27, 1999, the cited report is a mere newspaper account
and not even a commercial list. At most, it is but an analysis or opinion which
carries no persuasive weight for purposes of this case as no sufficient figures
to support it were presented. Neither did anybody testify to its accuracy. It
cannot be said that businessmen generally rely on news items such as this in
their occupation. Besides, no evidence was presented that the publication was
regularly prepared by a person in touch with the market and that it is
generally regarded as trustworthy and reliable. Absent extrinsic proof of their
accuracy, these reports are not admissible.[6] In the same manner, newspapers containing stock
quotations are not admissible in evidence when the source of the reports is available.[7] With more reason, mere analyses or projections of
such reports cannot be admitted. In particular, the source of the report in
this case can be easily made available considering that the same is necessary
for compliance with certain governmental requirements.
Nonetheless, by petitioner’s own
allegations, its actual total net income for 1996 was P5.1 billion.[8] An estimate by the All Asia financial analyst stated
that petitioner’s net operating income for the same year was about P5.7
billion, a figure which the Union relies on to support its claim. Assuming
without admitting the truth thereof, the figure is higher than the P4.171
billion allegedly suggested by petitioner as its projected net operating
income. The P5.7 billion which was the Secretary’s basis for granting the
P2,200.00 is higher than the actual net income of P5.1 billion admitted by
petitioner. It would be proper then to increase this Court’s award of P1,900.00
to P2,000.00 for the two years of the CBA award. For 1992, the agreed CBA wage
increase for rank-and-file was P1,400.00 and was reduced to P1,350.00, for
1993; further reduced to P1,150.00 for 1994. For supervisory employees, the
agreed wage increase for the years 1992-1994 are P1,742.50, P1,682.50 and
P1,442.50, respectively. Based on the foregoing figures, the P2,000.00 increase
for the two-year period awarded to the rank-and-file is much higher than the
highest increase granted to supervisory employees.[9] As mentioned in the January 27, 1999 Decision, the
Court does "not seek to enumerate in this decision the factors that should
affect wage determination" because collective bargaining disputes
particularly those affecting the national interest and public service
"requires due consideration and proper balancing of the interests of the
parties to the dispute and of those who might be affected by the dispute."[10] The Court takes judicial notice that the new amounts
granted herein are significantly higher than the weighted average salary
currently enjoyed by other rank-and-file employees within the community. It
should be noted that the relations between labor and capital is impressed with
public interest which must yield to the common good.[11] Neither party should act oppressively against the
other or impair the interest or convenience of the public.[12] Besides, matters of salary increases are part of
management prerogative.[13]
On the retroactivity of the CBA arbitral
award, it is well to recall that this petition had its origin in the
renegotiation of the parties’ 1992-1997 CBA insofar as the last two-year period
thereof is concerned. When the Secretary of Labor assumed jurisdiction and
granted the arbitral awards, there was no question that these arbitral awards
were to be given retroactive effect. However, the parties dispute the reckoning
period when retroaction shall commence. Petitioner claims that the award should
retroact only from such time that the Secretary of Labor rendered the award,
invoking the 1995 decision in Pier 8 case[14] where the Court, citing Union of Filipino
Employees v. NLRC,[15] said:
"The assailed
resolution which incorporated the CBA to be signed by the parties was
promulgated on June 5, 1989, the expiry date of the past CBA. Based on the
provision of Section 253-A, its retroactivity should be agreed upon by the
parties. But since no agreement to that effect was made, public respondent did
not abuse its discretion in giving the said CBA a prospective effect. The
action of the public respondent is within the ambit of its authority vested by
existing law."
On the other hand, the Union argues that the
award should retroact to such time granted by the Secretary, citing the 1993
decision of St Luke’s.[16]
"Finally, the
effectivity of the Order of January 28, 1991, must retroact to the date of the
expiration of the previous CBA, contrary to the position of petitioner. Under
the circumstances of the case, Article 253-A cannot be properly applied to
herein case. As correctly stated by public respondent in his assailed Order of
April 12, 1991 dismissing petitioner’s Motion for Reconsideration---
Anent the alleged
lack of basis for the retroactivity provisions awarded, we would stress that
the provision of law invoked by the Hospital, Article 253-A of the Labor Code,
speaks of agreements by and between the parties, and not arbitral awards . . .
"Therefore,
in the absence of a specific provision of law prohibiting retroactivity of the
effectivity of arbitral awards issued by the Secretary of Labor pursuant to
Article 263(g) of the Labor Code, such as herein involved, public respondent is
deemed vested with plenary and discretionary powers to determine the
effectivity thereof."
In the 1997 case of Mindanao Terminal,[17] the Court applied the St. Luke’s doctrine and
ruled that:
"In St.
Luke’s Medical Center v. Torres, a deadlock also developed during the CBA
negotiations between management and the union. The Secretary of Labor assumed
jurisdiction and ordered the retroaction of the CBA to the date of expiration
of the previous CBA. As in this case, it was alleged that the Secretary of Labor
gravely abused its discretion in making his award retroactive. In dismissing
this contention this Court held:
"Therefore,
in the absence of a specific provision of law prohibiting retroactive of the
effectivity of arbitral awards issued by the Secretary of Labor pursuant to
Article 263(g) of the Labor Code, such as herein involved, public respondent is
deemed vested with plenary and discretionary powers to determine the
effectivity thereof."
The Court in the January 27, 1999 Decision,
stated that the CBA shall be "effective for a period of 2 years counted
from December 28, 1996 up to December 27, 1999." Parenthetically, this
actually covers a three-year period. Labor laws are silent as to when an
arbitral award in a labor dispute where the Secretary had assumed jurisdiction
by virtue of Article 263 (g) of the Labor Code shall retroact. In general, a
CBA negotiated within six months after the expiration of the existing CBA
retroacts to the day immediately following such date and if agreed thereafter,
the effectivity depends on the agreement of the parties.[18] On the other hand, the law is silent as to the
retroactivity of a CBA arbitral award or that granted not by virtue of the
mutual agreement of the parties but by intervention of the government. Despite
the silence of the law, the Court rules herein that CBA arbitral awards granted
after six months from the expiration of the last CBA shall retroact to such
time agreed upon by both employer and the employees or their union. Absent such
an agreement as to retroactivity, the award shall retroact to the first day
after the six-month period following the expiration of the last day of the CBA
should there be one. In the absence of a CBA, the Secretary’s determination of
the date of retroactivity as part of his discretionary powers over arbitral
awards shall control.
It is true that an arbitral award cannot per
se be categorized as an agreement voluntarily entered into by the parties
because it requires the interference and imposing power of the State thru the
Secretary of Labor when he assumes jurisdiction. However, the arbitral award
can be considered as an approximation of a collective bargaining agreement
which would otherwise have been entered into by the parties.[19] The terms or periods set forth in Article 253-A
pertains explicitly to a CBA. But there is nothing that would prevent its
application by analogy to an arbitral award by the Secretary considering the
absence of an applicable law. Under Article 253-A: "(I)f any such agreement is entered into beyond six months, the parties shal!
agree on the duration of retroactivity thereof." In other words, the law
contemplates retroactivity whether the agreement be entered into before or
after the said six-month period. The agreement of the parties need not be categorically
stated for their acts may be considered in determining the duration of
retroactivity. In this connection, the Court considers the letter of
petitioner’s Chairman of the Board and its President addressed to their
stockholders, which states that the CBA "for the rank-and-file employees
covering the period December 1, 1995 to November 30, 1997 is still with the
Supreme Court,"[20] as indicative of petitioner’s recognition that the
CBA award covers the said period. Earlier, petitioner’s negotiating panel transmitted
to the Union a copy of its proposed CBA covering the same period inclusive.[21] In addition, petitioner does not dispute the
allegation that in the past CBA arbitral awards, the Secretary granted
retroactivity commencing from the period immediately following the last day of
the expired CBA. Thus, by petitioner’s own actions, the Court sees no reason to
retroact the subject CBA awards to a different date. The period is herein set
at two (2) years from December 1, 1995 to November 30, 1997.
On the allegation concerning the grant of
loan to a cooperative, there is no merit in the union’s claim that it is no
different from housing loans granted by the employer. The award of loans for
housing is justified because it pertains to a basic necessity of life. It is
part of a privilege recognized by the employer and allowed by law. In contrast,
providing seed money for the establishment of the employee’s cooperative is a
matter in which the employer has no business interest or legal obligation.
Courts should not be utilized as a tool to compel any person to grant loans to
another nor to force parties to undertake an obligation without justification.
On the contrary, it is the government that has the obligation to render
financial assistance to cooperatives and the Cooperative Code does not make it
an obligation of the employer or any private individual.[22]
Anent the 40-day union leave, the Court
finds that the same is a typographical error. In order to avoid any confusion,
it is herein declared that the union leave is only thirty (30) days as granted
by the Secretary of Labor and affirmed in the Decision of this Court.
The added requirement of consultation
imposed by the Secretary in cases of contracting out for six (6) months or more
has been rejected by the Court. Suffice it to say that the employer is allowed
to contract out services for six months or more. However, a line must be drawn
between management prerogatives regarding business operations per se and
those which affect the rights of employees, and in treating the latter, the
employer should see to it that its employees are at least properly informed of
its decision or modes of action in order to attain a harmonious
labor-management relationship and enlighten the workers concerning their
rights.[23] Hiring of workers is within the employer’s inherent
freedom to regulate and is a valid exercise of its management prerogative
subject only to special laws and agreements on the matter and the fair
standards of justice.[24] The management cannot be denied the faculty of promoting
efficiency and attaining economy by a study of what units are essential for its
operation. It has the ultimate determination of whether services should be
performed by its personnel or contracted to outside agencies. While there
should be mutual consultation, eventually deference is to be paid to what
management decides.[25] Contracting out of services is an exercise of
business judgment or management prerogative.[26] Absent proof that management acted in a malicious or
arbitrary manner, the Court will not interfere with the exercise of judgment by
an employer.[27] As mentioned in the January 27, 1999 Decision, the
law already sufficiently regulates this matter.[28] Jurisprudence also provides adequate limitations,
such that the employer must be motivated by good faith and the contracting out
should not be resorted to circumvent the law or must not have been the result
of malicious or arbitrary actions.[29] These are matters that may be categorically
determined only when an actual suit on the matter arises.
WHEREFORE, the motion for reconsideration is partially granted
and the assailed Decision is modified as follows: (1) the arbitral award shall
retroact from December 1, 1995 to November 30, 1997; and (2) the award of wage
is increased from the original amount of One Thousand Nine Hundred Pesos
(P1,900.00) to Two Thousand Pesos (P2,000.00) for the years 1995 and 1996. This
Resolution is subject to the monetary advances granted by petitioner to its
rank-and-file employees during the pendency of this case assuming such advances
had actually been distributed to them. The assailed Decision is AFFIRMED in all
other respects.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Melo,
Kapunan, and Pardo, JJ., concur.
[1] Decision promulgated January 27, 1999, G. R. No.
127598 penned by Justice Antonio Martinez (now retired) with Chief Justice
Hilario Davide, Jr. and Justices Jose Melo, Santiago Kapunan and Bernardo
Pardo, concurring.
[2] First Line Association of Meralco Supervisory Employees.
[3] Motion for Leave to Intervene and to treat this as Movant’s Intervention filed by FLAMES, p. 4; Rollo, p. 2476.
[4] Solicitor-General’s Manifestation and Motion dated August 10, 1999, p. 2; Rollo, p. 2506.
[5] Rollo, p. 2495.
[6] 20 Am. Jur. 819.
[7] 20 Am. Jr. 819-820.
[8] Petitioner’s Comment to Motions for Reconsideration and Motion for Intervention, p. 6; Rollo, p. 2514.
[9] See the January 27, 1999 Decision.
[10] Manila Electric Company v. Quisumbing, 302 SCRA 173, 196 (1999).
[11] Article 1700, New Civil Code (NCC).
[12] Article 1701, NCC.
[13] See National Federation of Labor Unions v. NLRC, 202 SCRA 346 (1991).
[14] Pier 8 Arrastre and Stevedoring Services, Inc. v. Roldan-Confesor, (2nd Div), 311 Phil. 311 penned by Justice Puno with Chief Justice Narvasa (ret.) and Justices Bidin (ret.), Regalado (ret.) and Mendoza, concurring, p. 329.
[15] 192 SCRA 414 (1990).
[16] St. Luke’s Medical Center v. Torres, (3rd Div), 223 SCRA 779 (1993), penned by Justice Melo with Justices Feliciano (ret.), Bidin (ret.), Davide (now Chief Justice) and Romero (ret.), concurring, pp. 792-793.
[17] In Mindanao Terminal and Brokerage Service, Inc. v. Confesor, (2nd Div), 338 Phil. 671 penned by Justice Mendoza with Justices Regalado (ret.), Romero, (ret.), Puno and Torres (ret.), concurring, p. 679.
[18] Article 253-A, Labor Code, as amended..
[19] Mindanao Terminal and Brokerage Service, Inc. v. Confesor, 338 Phil. 671.
[20] Rollo, p. 2347.
[21] Annex "C" of the Petition.
[22] See Section 2, R.A. No. 6838 (Cooperative Code of the
Philippines) which provides: "It is the declared policy of the State
to foster the creation and growth of cooperative as a practical vehicle for
promoting self-reliance and harnessing people power towards the attainment of
economic development and social justice. The State shall encourage the
private sector to undertake the actual formation of cooperatives and shall
create an atmosphere that is conducive to the organizational growth and
development of the cooperatives.
Towards this end, the Government and all its branches, subsidiaries, instrumentalities, and agencies shall ensure the provision of technical guidelines, financial assistance, and other services to enable said cooperative to development into viable and responsive economic enterprises and thereby bring about a strong cooperative movement that is free from any conditions that might infringe upon the autonomy or organizational integrity of cooperatives.
[23] Philippine Airlines v. NLRC, 225 SCRA 259 (1993).
[24] Tierra International Construction Corporation v. NLRC, 256 SCRA 36 (1996); Business Day Information Systems v. NLRC, 221 SCRA 9 (1993); Philtread Tire v. NLRC, 218 SCRA 805 (1993); San Miguel Corporation v. Ubaldo, 218 SCRA 293 (1993); San Miguel Brewery Sales Force Union v. Ople, 170 SCRA 25 (1989).
[25] Shell Oil Workers Union v. Shell Company of the Philippines, Ltd., 39 SCRA 276 (1971).
[26] De Ocampo v. NLRC, 213 SCRA 652 (1992).
[27] Asian Alcohol Corporation v. NLRC, G.R. No. 131108, March 25, 1999 cited in Serrano v. NLRC, G.R. No. 117040, January 27, 2000.
[28] See also Metrolab Industries v. Roldan-Confesor, 254 SCRA 182 (1996).
[29] Manila Electric Company v. Quisumbing, 302 SCRA 173, 196 (1999) citing De Ocampo v. NLRC, 213 SCRA 652 (1992).