THIRD DIVISION
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PHILIPPINE AIRLINES,
INCORPORATED, Petitioner, - versus - PHILIPPINE
AIRLINES EMPLOYEES ASSOCIATION (PALEA), Respondent. |
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G. R. No. 142399 Present: YNARES-SANTIAGO, J.,
Chairperson, AUSTRIA-MARTINEZ, CHICO-NAZARIO, NACHURA, and REYES, JJ. Promulgated: March
12, 2008 |
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CHICO-NAZARIO,
J.:
This
Petition for Review on Certiorari under
Rule 45 of the Rules of Court, as amended, seeks to set aside the 30 April 1999
Decision[1]
and 10 March 2000 Resolution[2]
of the Court of Appeals in CA-G.R. SP No. 50161 entitled, “Philippine Airlines, Inc. v. National Labor Relations Commission and
Philippine Airlines Employees Association (PALEA).” In the assailed decision, the appellate court
dismissed the petition filed by petitioner Philippine Airlines, Inc. (PAL) and
affirmed the 28 January 1998 Decision[3]
and 23 June 1998 Resolution,[4]
both of the First Division of the National Labor Relations Commission (NLRC)
wherein the said Commission reversed and set aside the 12 March 1990 Decision[5]
of the Labor Arbiter in NLRC NCR No. 00-03-01134-89 dismissing the labor
complaint filed by Philippine Airlines Employees Association (PALEA), the collective bargaining agent of the rank and file employees of
petitioner PAL.
The present
petition arose from a labor complaint,[6]
filed by respondent PALEA against petitioners PAL and one Mary Anne del Rosario, Director of Personnel of petitioner PAL, on
The facts are undisputed.
On
Section 3 – Application
All
the terms and conditions of employment of employees within 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
and/or privileges as are not expressly provided for in this Agreement but which
are now being accorded in accordance with the PAL Personnel Policies and
Procedures Manual, shall be deemed also part and
parcel of the terms and conditions of employment, or of this Agreement.[8]
Part of
said agreement required petitioner PAL to pay its rank and file employees the
following bonuses:
Section 4 – 13th Month Pay (Mid-year Bonus)
A 13th month pay,
equivalent to one month’s current basic pay, consistent with the existing
practice shall be paid in advance in May.
Section 5 – Christmas Bonus
The equivalent of one month’s current
basic pay as of November 30, shall be paid in 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.[9]
On 22 April 1988, prior to the payment of the 13th
month pay (mid-year bonus), petitioner PAL released a guideline[10]
implementing the aforequoted provision, to wit:
1) Eligibility
a) Ground employees in the general payroll who are regular as
of
b) Other ground employees in the general payroll, not falling
within category a) above shall receive their 13th Month Pay on or
before
2)
Amount
a)
For
category a) above, one month basic salary as of
b)
Employees
covered under 1 b) above shall be paid not less than
1/12 of their basic salary for every month of service within the calendar year.
3)
Payment
Date:
Respondent PALEA assailed the implementation of the
foregoing guideline on the ground that all employees of PAL, regular or
non-regular, must be paid their 13th month pay. In fact, in a letter dated
To : Ms.
Marie Anne E. Del Rosario
Director-Personnel
Services
From : PALEA
Board Member-Engineering
Subject : 13th
Month Pay
Please
be informed that
the following regular employees have not received their 13th month
pay as of today.
NAME Date Employed Date Regularized
1. Renato
C. Buenaventura -
2. Rene Zaragoza -
3. Ronald Lumibao -
4. Ruel
Villa-real -
5. Rene
Philip Banzon -
We
feel that these employees are entitled to the 13th month pay in
accordance with the guidelines issued by your office last
May
we request your good office to do the necessary to effect payment of the 13th
month pay to the above listed regular employees in the next regular payroll.
Praying for usual prompt attention.
(Sgd.) HERBERT C. BALDOVINO[13]
In response thereto, petitioner PAL informed
respondent PALEA that rank and file employees who were regularized after
Mr. Herbert C. Baldovino
PALEA Board Member and
Mr. George M. Pulido
PALEA President
2nd Floor, Philbanking Bldg.
Baclaran, Parañaque,
M.M.
Dear Messrs. Baldovino and
Pulido:
This
pertains to your letter which we received on
We
would like to clarify the following:
1. The
above-mentioned employees and other similarly situated employees were not paid
the 13th month pay on
2. The
guideline providing for the payment of the 13th month pay on or
before December 24, 1988 for those who were not entitled to receive such in May
is anchored on the Company’s compliance with the Rules and Regulations
Implementing PD 851 (pp. 236-237, Labor Code of the Philippines 1988 Edition),
to wit:
“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
equivalent at the time of this issuance; x x x
the term “its equivalent” as used in paragraph (c)
hereof shall include Christmas bonus, mid-year bonus, profit-sharing payments
and other cash bonuses amounting to not less than 1/12th of the
basic salary but shall not include cash and stock dividends, cost of living
allowances and all other allowances regularly enjoyed by the employee, as well
as non-monetary benefits.”
3.
In
accordance with 1 and 2, the above-mentioned employees were paid the equivalent
of their 13th month pay in the form of the Christmas bonus granted
by the Company on
(SGD.) MARIE ANNE E.
DEL ROSARIO[15]
Disagreeing with petitioner PAL, respondent PALEA
filed a labor complaint[16]
for unfair labor practice against petitioner PAL before the NLRC on
In its Position Paper submitted before the Labor
Arbiter, petitioner PAL countered that those rank and file employees who were
not regularized by 30 April of a particular year are, in principle, not denied
their 13th month pay considering they receive said mandatory bonus
in the form of the Christmas Bonus; that the Christmas Bonus given to all its
employees is deemed a compliance with Presidential Decree No. 851 and the
latter’s implementing rules; and that the foregoing has been the practice
formally adopted in previous CBAs’ as early as 1970.
On
WHEREFORE, decision is hereby
issued ordering the dismissal of the complaint.[18]
Respondent PALEA appealed to the NLRC. In a Decision
dated
WHEREFORE, finding the appeal
well-impressed with merit, the decision appealed from is REVERSED and SET ASIDE
and a new one ENTERED ordering [herein petitioner] PAL to pay the 13th
month pay or mid-year bonus of the members as discussed above.[19]
The NLRC held that after going through the documents
submitted by respondent PALEA in support of its contention, the Commission is
convinced that the 13th month pay or mid-year bonus is distinct from
the Christmas Bonus, and although petitioner PAL already paid its employees the
latter, it must likewise pay them the former. Petitioner PAL moved for reconsideration of
the NLRC Decision but this was denied in a Resolution dated
Undaunted, petitioner PAL went directly to this
Court via a Petition for Review on Certiorari.
In view of this Court’s decision in St. Martin Funeral Homes v. National Labor Relations Commission,[20]
however, the Petition was referred to the Court of Appeals for proper
disposition. The case was docketed
therein as CA-G.R. SP No. 50161.
On
WHEREFORE, premises considered,
the instant petition is hereby DISMISSED for lack of merit.[21]
The Court of Appeals held that “from the x x x
provision of the said inter-office memo, employees who are regular as of 30
April 1988 and those regularized thereafter, are entitled for (sic) the payment of the non-regular
employees as provided for under letter (c) of the Guidelines issued.”[22] It reasoned that “if the intention is not to
include employees regularized beyond
Petitioner PAL seasonably moved for the
reconsideration of the aforequoted Court of Appeals Decision, but was also denied
in a Resolution dated
Hence, the instant Petition
for Review on Certiorari under Rule
45 of the Rules of Court, as amended.
In a
Resolution[25]
dated
In
refusing payment of the mid-year bonus, petitioner PAL argues that 1) the CBA
does not apply to non-regular employees such that any benefits arising from
said agreement cannot be made to apply to them, including the mid-year bonus;
and 2) it has always been the company practice not to extend the mid-year bonus
to those employees who have not attained regular status prior to the month of
May, when payment of the particular bonus accrues.
Respondent
PALEA, however, disputes petitioner PAL’s allegations
and maintains that “the benefits to all employees in the collective bargaining
unit, including those who do not belong to the chosen bargaining labor
organization, applies.”[27]
Put in another way, “[a]ll employees in PAL are entitled to the same benefit as
they are within the same collective bargaining unit and the entitlement to such
benefit spills over to even non-union members.”[28]
Anent the supposed company practice of
petitioner PAL not to extend the payment of the 13th month pay or
mid-year bonus to non-regular employees, respondent PALEA contends that
non-payment of said benefit is considered a diminution of privileges or
benefits proscribed by Presidential Decree No. 851; that petitioner PAL
misrepresented that the 13th month pay or mid-year bonus is the same
as the Christmas bonus when, in actuality, the latter is entirely different as
it is a benefit paid under the provisions of the CBA, while the former is one
mandated by law, Presidential Decree No. 851, in particular.
The sole issue for resolution
of this Court is whether or not the Court of Appeals committed reversible error
in affirming the order of the NLRC for the payment of the 13th month
pay or mid-year bonus to its employees regularized after
Petitioner
PAL maintains that in extending the grant of the 13th month pay or
mid-year bonus to employees who are not covered by the CBA, the Court of
Appeals, in effect, “modified or altered the terms of said agreement and
expanded its coverage to non-regular employees who are not covered by the
bargaining unit.”[29] The issue on modification or alteration of
the CBA, however, was raised by petitioner PAL rather belatedly and invoked for
the first time on appeal. This being the
case, We are barred from taking cognizance of and
resolving the issue for it would be violative of the
proscription against the presentation of new issues on appeal. To do otherwise would be offensive to the
basic rules of fair play, justice and due process.[30]
Be that
as it may, a cursory reading of the 1986-1989 CBA of the parties herein will
instantly reveal that Art. I, Sec. 3 of said agreement made its provision
applicable to all employees in
the bargaining unit. The particular
section specifically defined the scope of application of the CBA, thus:
Section 3 – Application. All the terms and conditions of employment of
employees within 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 and/or
privileges as are not expressly provided for in this Agreement but which are
now being accorded in accordance with the PAL Personnel Policies and Procedures
Manual, shall be deemed also part and parcel of the
terms and conditions of employment, or of this Agreement.
without
distinguishing between regular and non-regular employees. As succinctly put by
respondent PALEA in its Memorandum:
All employees
in (sic) PAL are entitled to the same benefit as they are within the same
collective bargaining unit and the entitlement to such benefit spills over to
even non-union members.[31]
It is a
well-settled doctrine that the benefits of a CBA extend to the laborers and
employees in the collective bargaining unit, including those who do not belong
to the chosen bargaining labor organization.[32]
Otherwise, it would be a clear case of discrimination.
Hence,
to be entitled to the benefits under the CBA, the employees must be members of
the bargaining unit, but not necessarily of the labor organization designated
as the bargaining agent. A “bargaining
unit” has been defined as a group of employees of a given employer, comprised
of all or less than all of the entire body of employees, which the collective
interest of all the employees, consistent with equity to the employer, indicates
to be the best suited to serve the reciprocal rights and duties of the parties
under the collective bargaining provisions of the law.[33] At this point, the allegation of petitioner
PAL that the non-regular employees do not belong to the collective bargaining
unit and are thus not covered by the CBA is unjustified and unsubstantiated. It is apparent to us that petitioner PAL
excludes certain employees from the benefits of the CBA only because they have
not yet achieved regular status by the cut-off date,
Having
ruled that the benefits provided by the subject CBA are applicable even to
non-regular employees who belong to the bargaining unit concerned, the next and
crucial query to be addressed is whether the 13th month pay or
mid-year bonus can be equated to the Christmas bonus.
Petitioner
PAL equates the 13th month pay, also referred to as the mid-year
bonus in the CBA, to the Christmas bonus.
It insists that “[u]nder the 13th
Month Pay Law (P.D. 851, as amended), the 13th Month Pay is due on
or before December 24th of the year. Therefore, non-regular employees are entitled
to their 13th Month Pay, not in the month of May, but in the month
of December when the Christmas Bonus becomes due. The Christmas bonus becomes their 13th
Month Pay, by express provision of Section 2, Presidential Decree 851.”[34] Simply put, as far as non-regular employees
are concerned, petitioner PAL alleges that their 13th month pay
shall be the same as their Christmas bonus and will be paid according to the
terms governing the latter.
We do
not agree. From the facts of the present
Petition, it is crystal clear that petitioner PAL is claiming an exemption from
payment of the 13th month pay or mid-year bonus provided in the CBA
under the guise of paying the Christmas bonus which it claims to be the
equivalent of the 13th month pay under Presidential Decree No.
851.
Presidential
Decree No. 851 mandates that all employers must pay all their employees
receiving a basic salary of not more than P1,000.00 a month, regardless
of the nature of the employment, a 13th month pay not later than 24
December of every year. Memorandum Order
No. 28,[35]
dated
Sec. 3(c). Employers already
paying their employees 13-month pay or more in a calendar year or its
equivalent at the time of this issuance.
While employers already paying
their employees a 13th month pay or more in a calendar year or its
equivalent at the time of the issuance of Presidential Decree No. 851 are
already exempted from the mandatory coverage of said law, petitioner PAL cannot
escape liability in this case by virtue thereof.
It must
be stressed that in the 1986-1989 CBA, petitioner PAL agreed to pay its
employees 1) the 13th month pay or the mid-year bonus, and 2) the
Christmas bonus. The 13th
month pay, guaranteed by Presidential Decree No. 851, is explicitly covered or
provided for as the mid-year bonus in the CBA, while the Christmas bonus is
evidently and distinctly a separate benefit.
Petitioner PAL may not be allowed to brush off
said distinction, and unilaterally and arbitrarily declare that for non-regular
employees, their Christmas bonus is the same as or equivalent to the 13th
month pay.
Presidential
Decree No. 851 mandates the payment of the 13th month pay to
uniformly provide the low-paid employees with additional income. It but sets a minimum requirement that
employers must comply with. It does not
intend, however, to preclude the employers from voluntarily granting additional
bonuses that will benefit their employees.
A bonus is an amount granted and paid to an employee for his industry
and loyalty which contributed to the success of the employer's business and made
possible the realization of profits. It is an act of generosity of the employer
for which the employee ought to be thankful and grateful. It is also granted by an enlightened employer
to spur the employee to greater efforts for the success of the business and
realization of bigger profits.[37] We deem that the Christmas bonus in this case
is of this nature, although, by virtue of its incorporation into the CBA, it
has become more than just an act of generosity on the part of petitioner PAL,
but a contractual obligation it has undertaken.
The
inclusion of a provision for the continued payment of the Christmas bonus in
the 1986-1989 CBA between respondent PALEA and petitioner PAL contradicts the
company’s claim that the grant of such benefit was intended to be credited as
compliance with the statutory mandate to give the 13th month
pay. Memorandum Order No. 28, extending
Presidential Decree No. 851 to all employees regardless of the amount of their
monthly salaries, was issued on
In United CMC Textile Workers Union
v. The Labor
Arbiter,[39] one of the
issues passed upon by the Court was whether or not an employer
who was already paying Christmas bonus pursuant to a CBA, was still bound to
pay the 13th month pay pursuant to Presidential Decree No. 851. Finding that the intention of the parties to
the CBA was that the Christmas bonus was meant to be on top of the 13th
month pay, the Court ordered the employer to pay the employees both. The Court ratiocinated:
If the Christmas bonus was included in the 13th month pay, then there would be no need for having a specific provision on Christmas bonus in the CBA. But is did provide for a bonus in graduated amounts depending on the length of service of the employee. The intention is clear therefore that the bonus provided in the CBA was meant to be in addition to the legal requirement. x x x A bonus under the CBA is an obligation created by the contract between the management and workers while the 13th month pay is mandated by the law (P.D. 851).
In
the case under consideration, the provision for the payment of the Christmas
bonus, apart from the 13th month pay, was incorporated into the
1986-1989 CBA between respondent PALEA and petitioner PAL without any
condition. The Christmas bonus, payable
in December of every year, is distinguished from the 13th month pay,
due yearly in May, for which reason it was denominated as the mid-year
bonus. Such being the case, the only
logical inference that could be derived therefrom is that petitioner PAL
intended to give the members of the bargaining unit, represented by respondent
PALEA, a Christmas bonus over and above its legally mandated obligation to
grant the 13th month pay.
The
non-regular rank and file employees of petitioner PAL as of
A
collective bargaining agreement refers to a negotiated contract between a
legitimate labor organization and the employer concerning wages, hours of work
and all other terms and conditions of employment in a bargaining unit.[40]
As in all other contracts, the parties to
a CBA may establish such stipulations, clauses, terms and conditions as they
may deem convenient, provided these are not contrary to law, morals, good
customs, public order or public policy.[41] Thus, 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.[42]
WHEREFORE, premises
considered, the petition is hereby DENIED.
The Decision of the Court of Appeals
promulgated on
SO ORDERED.
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MINITA V. CHICO-NAZARIOAssociate Justice |
WE
CONCUR:
Associate Justice
Chairperson
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MA. ALICIA AUSTRIA-MARTINEZ Associate Justice |
ANTONIO EDUARDO B. NACHURAAssociate Justice |
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RUBEN T. REYES
Associate Justice
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CONSUELO
YNARES-SANTIAGO
Associate Justice Chairperson, Third
Division |
Pursuant to Article VIII, Section
13 of the Constitution, and the Division Chairperson’s Attestation, it is
hereby certified that the conclusions in the above Decision were reached in
consultation before the case was assigned to the writer of the opinion of the
Court’s Division.
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REYNATO
S. PUNO
Chief Justice |
[1] Penned by Court of Appeals Associate Justice Eugenio S. Labitoria with Associate Justices Jesus M. Elbinias and Marina L. Buzon, concurring; Annex “A” of the Petition; rollo, pp. 20-25.
[2] Annex “L” of the Petition; id. at 121.
[3] Penned by NLRC Commissioner Alberto R. Quimpo with Commissioner Vicente S. E. Veloso, concurring; Presiding Commissioner Rogelio I. Rayala was on leave; Annex “G” of the Petition; id. at 81 – 90.
[4] Annex “I” of the Petition; id. at 96 – 97.
[5] Annex “E” of the Petition; id. at 59 – 62.
[6] Annex “B” of the Petition; id. at 27.
[7] Exhibit “A” for respondent PALEA and Exhibit “2” for petitioner PAL, both in NLRC-NCR Case No. 00-03-01134-89; records, p. 145.
[8] 1986-1989 Agreement between Philippine Airlines and Philippine Airlines Employees’ Association (PALEA), Art. I, Sec. 3 – Scope of the Agreement, CBA, p. 2; id.
[9] Id., Art. V, Secs. 4 and 5 – Pay Scale, CBA, p. 19.
[10] In the form of a Memorandum dated
[11] Rollo, pp. 82-83.
[12] Then Board Member of respondent PALEA.
[13] Annex B; Records, Vol. 2, p. 20.
[14] Entitled “REQUIRING ALL EMPLOYERS TO PAY THEIR EMPLOYEES A 13TH MONTH PAY.”
[15] Annex C; Records, Vol. 2, pp. 21-22.
[16] Rollo, p. 27.
[17]
[18]
[19]
[20] G.R. No. 142351,
[21] Rollo, p. 24.
[22]
1) Eligibility: a) Ground staff employees, including all supervisory personnel in the general payroll who are regular as of April 30, 1987; b) Part-time employees who are regular as of April 30, 1987; c) Other ground staff employees in the general payroll not falling within categories a) and b) above, shall received their 13th Month Pay on or before December 24, 1987.
2)
Amount: a) For
category a) above, one month basic salary as of
Monthly Salary = AHR x 4 yrs./day
x 314 days/yrs.
12 months/year
c) Employees covered under c) above shall be paid not less than 1/12 of their basic salary within the calendar year.
3) Payment Date:
[23]
[24]
[25]
[26]
[27]
[28]
[29]
[30] Cruz v. Court of Appeals, G.R. No.
108738,
[31] Rollo, p. 200.
[32] Rivera v. San Miguel Brewery Corporation, Inc., 133 Phil. 89, 94 (1968), citing Leyte Land Transportation, Co. v. Leyte Farmer’s and Laborer’s Union, 80 Phil. 842, 847-848 (1948).
[33] University
of the
[34] Rollo, p. 176.
[35] Memorandum Order No. 28 provided that: “Section 1 of Presidential Decree No. 851 is hereby modified to the extent that all employers are hereby required to pay all their rank-and-file employees a 13th month pay not later than December 24 of every year.”
[36] See the Revised Guidelines on the
Implementation of the 13th Month Pay Law, issued by then Secretary
of Labor Franklin M. Drilon, on
[37] Philippine Education Co., Inc. (PECO) v. Court of Industrial Relations, 92 Phil. 381, 385 (1952).
[38] Philippine Airlines v. National Labor Relations Commission, 328 Phil. 814, 829 (1996).
[39] G.R. No. L-70763,
[40] University of the Immaculate Concepcion, Inc. v. Secretary of Labor and Employment, 425 Phil. 311, 324 (2002).
[41] Article 1306 of the Civil Code; Manila Fashions, Inc. v. National Labor Relations Commission, 332 Phil. 121, 125-126 (1996).
[42] Vivero v. Court of Appeals, 398 Phil. 158, 164 (2000), citing E. Razon, Inc. v. Secretary of Labor and Employment, G.R. No. 85867, 13 May 1993, 222 SCRA 1, 8.