G.R. Nos. 171594-96, September 18, 2013
ASIA BREWERY, INC., Petitioner, v. TUNAY NA PAGKAKAISA NG MGA MANGGAGAWA SA ASIA (TPMA), Respondent.
D E C I S I O N
DEL CASTILLO, J.:
[Respondent union] Tunay Na Pagkakaisa ng mga Manggagawa sa Asia (TPMA) is a legitimate labor organization, certified as the sole and exclusive bargaining agent of all regular rank and file employees of [petitioner corporation] Asia Brewery, Incorporated (ABI). The [petitioner corporation], on the other hand, is a company engaged in the manufacture, sale and distribution of beer, shandy, glass and bottled water products. It employs about 1,500 workers and has existing distributorship agreements with at least 13 companies.Court of Appeal’s Ruling
[Respondent union] and [petitioner corporation] had been negotiating for a new collective bargaining agreement (CBA) for the years 2003-2006 since the old CBA expired last July 2003. After about 18 sessions or negotiations, the parties were still unable to reconcile their differences on their respective positions on most items, particularly on wages and other economic benefits.
On October 21, 2003, the [respondent union] declared a deadlock. On October 27, 2003, [respondent union] filed a notice of strike with the National Conciliation and Mediation Board (NCMB), docketed as NCMB-RB-IV-LAG- NS-10-064-03. However, the parties did not come to terms even before the NCMB.
On November 18, 2003, [respondent union] conducted a strike vote. Out of the 840 union members, 768 voted in favor of holding a strike.
On November 20, 2003, [petitioner corporation] then petitioned the Secretary of the Department of Labor and Employment (DOLE) to assume jurisdiction over the parties’ labor dispute, invoking Article 263 (g) of the Labor Code. In answer, [respondent union] opposed the assumption of jurisdiction, reasoning therein that the business of [petitioner corporation] is not indispensable to the national interest.
On December 2, 2003, [respondent union] filed before [the Court of Appeals] a petition for injunction, docketed as CA-G.R. SP No. 80839, which sought to enjoin the respondent Secretary of Labor from assuming jurisdiction over the labor dispute, or in the alternative, to issue a temporary restraining order, likewise to enjoin the former from assuming jurisdiction.
On December 19, 2003, the public respondent, through Undersecretary/ Acting Secretary Manuel G. Imson, issued an order assuming jurisdiction over the labor dispute between the [respondent union] and [petitioner corporation]. The pertinent portions of the said order read:
x x x x“WHEREFORE, based on our considered determination that the current labor dispute is likely to adversely affect national interest, this Office hereby ASSUME[S] JURISDICTION over the labor dispute between the ASIA BREWERY[,] INCORPORATED and the TUNAY NA PAGKAKAISA NG MANGGAGAWA SA ASIA pursuant to Article 263 (g) of the Labor Code, as amended. Accordingly, any strike or lockout in the Company, whether actual or impending, is hereby enjoined. Parties are hereby directed to cease and desist from taking any action that might exacerbate the situation.x x x x
x x x x
“To expedite the resolution of this dispute, the parties are directed to submit in three (3) copies, their Position Papers within ten (10) days from receipt of this Order and another five (5) days from receipt of the said position papers to submit their Reply.
1. “The Company shall be required to provide: “a. Complete Audited Financial Statements for the past five (5) years certified as to its completeness by the Chief Financial Comptroller or Accountant; “b. Projected Financial Statements of the Company for the next three (3) years; “c. CBA history as to economic issues; and “d. The average monthly salary of the employees in this bargaining unit. “2. The Union is required to provide an itemized summary of their CBA demands with financial costing and sample CBA’s (if any) in similarly situated or comparable bargaining units.
“In the interest of speedy labor justice, this Office will entertain no motion for extension or postponement.
“The appropriate police authority is hereby deputized to enforce this Order in case of defiance or the same is not forthwith obeyed.
On January 19, 2004, [respondent union] filed another petition for certiorari with [the Court of Appeals], docketed as CA-G.R. SP No. 81639, imputing bad faith and grave abuse of discretion to the Secretary of Labor. [Respondent union] prayed therein for the nullification of the order of assumption of jurisdiction and the declaration that [petitioner corporation] is not an industry indispensable to the national interest.
In the meantime, in a decision dated January 19, 2004, Secretary of Labor Patricia Sto. Tomas resolved the deadlock between the parties. As summarized in a later resolution, the public respondent granted the following arbitral awards:chanrobles virtua1aw 1ibraryx x x x
(1) WAGE INCREASES as follows: First Year = P18.00 Second Year= 15.00 Third Year = 12.00 Total = P45.00 (2) HEALTH CARE (HMO) P1,300 premium to be shouldered by Asia Brewery, Inc., for each covered employee and P1,800 contribution [for each] Union member-dependent.
The [respondent union] moved for a reconsideration of the decision on the ground that the ruling lacks evidentiary proof to sufficiently justify the same. It also filed a “Paglilinaw o Pagwawasto” of the Decision. Similarly, [petitioner corporation] also filed a motion for clarification/reconsideration. The respondent Secretary of Labor resolved all three motions in a resolution dated January 29, 2004 x x x.
x x x x
Thereafter, on February 9, 2004, the parties executed and signed the Collective Bargaining Agreement with a term from August 1, 2003 to July 31, 2006.
Subsequently, on April 1, 2004, [respondent union] filed another petition for certiorari before [the Court of Appeals], which was docketed as SP-83168, assailing the arbitral award and imputing grave abuse of discretion upon the public respondent.
x x x x4
WHEREFORE, judgment is hereby rendered with the following rulings:In modifying the arbitral award of the Secretary of Labor, the CA ruled that: (1) The effectivity of the CBA should be August 1, 2003 because this is the date agreed upon by the parties and not January 1, 2004 as decreed by the Secretary of Labor; (2) The computation of wage increase should be remanded to the Secretary of Labor because the computation was based on petitioner corporation’s unaudited financial statements, which have no probative value pursuant to the ruling in Restaurante Las Conchas v. Llego,6 and was done in contravention of DOLE Advisory No. 1, Series of 2004, which contained the guidelines in resolving bargaining deadlocks; and (3) The health benefits should be P1,390.00 per covered employee because petitioner corporation had already agreed to this amount and the same cannot be altered or reduced by the Secretary of Labor.
1) The assailed order dated December 19, 2003 of public respondent Secretary of Labor is AFFIRMED. The petitions for injunction and certiorari in CA-G.R. SP Nos. 80839 and 81639 are denied and accordingly DISMISSED. 2) In CA-G.R. SP No. 81368, the assailed decision dated January 19, 2004 and the order dated January 29, 2004 of the public respondent are hereby MODIFIED to read as follows: a) The present CBA is declared effective as of August 1, 2003; b) Consequently, the employees are entitled to the arbitral awards or benefits from August 1, 2003 on top of the P2,500.00 signing bonus; c) The computation of the wage increase is REMANDED to the public respondent; and d) The health benefit of the employees shall be P1,390.00.
WHEREFORE, the foregoing considered, the Motion for Reconsideration of [respondent union] is DENIED and the Partial Motion for Reconsideration of [petitioner corporation] is PARTIALLY GRANTED. Accordingly, Our Decision is MODIFIED and the signing bonus previously awarded is hereby DELETED. The assailed Decision of the respondent Secretary with respect to the issue on salary increases is REMANDED to her office for a definite resolution within one month from the finality of this Court’s Decision using as basis the externally audited financial statements to be submitted by [petitioner corporation].chanroblesvirtualawlibraryThe CA partially modified its previous Decision by deleting the award of the signing bonus. It ruled that, pursuant to the express provisions of the CBA, the signing bonus is over and beyond what the parties agreed upon in the said CBA.
x x x It is true that administrative and quasi-judicial bodies like the NLRC are not bound by the technical rules of procedure in the adjudication of cases. However, this procedural rule should not be construed as a license to disregard certain fundamental evidentiary rules. While the rules of evidence prevailing in the courts of law or equity are not controlling in proceedings before the NLRC, the evidence presented before it must at least have a modicum of admissibility for it to be given some probative value. The Statement of Profit and Losses submitted by Crispa, Inc. to prove its alleged losses, without the accompanying signature of a certified public accountant or audited by an independent auditor, are nothing but self-serving documents which ought to be treated as a mere scrap of paper devoid of any probative value. For sure, this is not the kind of sufficient and convincing evidence necessary to discharge the burden of proof required of petitioners to establish the alleged losses suffered by Crispa, Inc. in the years immediately preceding 1990 that would justify the retrenchment of respondent employees. x x x24While the above-cited cases involve proof necessary to establish losses in cases of business closure or retrenchment, we see no reason why this rule should not equally apply to the determination of the proper level of wage award in cases where the Secretary of Labor assumes jurisdiction in a labor dispute pursuant to Article 263(g)25 of the Labor Code.
The extent of judicial review over the Secretary of Labor's arbitral award is not limited to a determination of grave abuse in the manner of the secretary's exercise of his statutory powers. This Court is entitled to, and must — in the exercise of its judicial power — review the substance of the Secretary's award when grave abuse of discretion is alleged to exist in the award, i.e., in the appreciation of and the conclusions the Secretary drew from the evidence presented.Thus, we rule that the Secretary of Labor gravely abused her discretion when she relied on the unaudited financial statements of petitioner corporation in determining the wage award because such evidence is self-serving and inadmissible. Not only did this violate the December 19, 2003 Order28 of the Secretary of Labor herself to petitioner corporation to submit its complete audited financial statements, but this may have resulted to a wage award that is based on an inaccurate and biased picture of petitioner corporation's capacity to pay — one of the more significant factors in making a wage award. Petitioner corporation has offered no reason why it failed and/or refused to submit its audited financial statements for the past five years relevant to this case. This only further casts doubt as to the veracity and accuracy of the unaudited financial statements it submitted to the Secretary of Labor. Verily, we cannot countenance this procedure because this could unduly deprive labor of its right to a just share in the fruits of production29 and provide employers with a means to understate their profitability in order to defeat the right of labor to a just wage.
x x x x
In this case we believe that the more appropriate and available standard — and one does not require a constitutional interpretation — is simply the standard of reasonableness. In layman's terms, reasonableness implies the absence of arbitrariness; in legal parlance, this translates into the exercise of proper discretion and to the observance of due process. Thus, the question we have to answer in deciding this case is whether the Secretary's actions have been reasonable in light of the parties['] positions and the evidence they presented.
x x x x
This Court has recognized the Secretary of Labor's distinct expertise in the study and settlement of labor disputes falling under his power of compulsory arbitration. It is also well-settled that factual findings of labor administrative officials, if supported by substantial evidence, are entitled not only to great respect but even to finality. x x x
But at the same time, we also recognize the possibility that abuse of discretion may attend the exercise of the Secretary's arbitral functions; his findings in an arbitration case are usually based on position papers and their supporting documents (as they are in the present case), and not on the thorough examination of the parties' contending claims that may be present in a court trial and in the face-to-face adversarial process that better insures the proper presentation and appreciation of evidence. There may also be grave abuse of discretion where the board, tribunal or officer exercising judicial function fails to consider evidence adduced by the parties. Given the parties' positions on the justiciability of the issues before us, the question we have to answer is one that goes into the substance of the Secretary's disputed orders: Did the Secretary properly consider and appreciate the evidence presented before him?
x x x x
While We do not seek to enumerate in this decision the factors that should affect wage determination, we must emphasize that a collective bargaining dispute such as this one requires due consideration and proper balancing of the interests of the parties to the dispute and of those who might be affected by the dispute. To our mind, the best way in approaching this task holistically is to consider the available objective facts, including, where applicable, factors such as the bargaining history of the company, the trends and amounts of arbitrated and agreed wage awards and the company's previous CBAs, and industry trends in general. As a rule, affordability or capacity to pay should be taken into account but cannot be the sole yardstick in determining the wage award, especially in a public utility like MERALCO. In considering a public utility, the decision maker must always take into account the "public interest" aspects of the case; MERALCO's income and the amount of money available for operating expenses — including labor costs — are subject to State regulation. We must also keep in mind that high operating costs will certainly and eventually be passed on to the consuming public as MERALCO has bluntly warned in its pleadings.
We take note of the "middle ground" approach employed by the Secretary in this case which we do not necessarily find to be the best method of resolving a wage dispute. Merely finding the midway point between the demands of the company and the union, and "splitting the difference" is a simplistic solution that fails to recognize that the parties may already be at the limits of the wage levels they can afford. It may lead to the danger too that neither of the parties will engage in principled bargaining; the company may keep its position artificially low while the union presents an artificially high position, on the fear that a "Solomonic" solution cannot be avoided. Thus, rather than encourage agreement, a "middle ground approach" instead promotes a "play safe" attitude that leads to more deadlocks than to successfully negotiated CBAs.27
Based on such factors as BARGAINING HISTORY, TRENDS OF ARBITRATED AND AGREED AWARDS AND INDUSTRY TRENDS, in general, we hold that vis-à-vis the Union[’s] demands and the Company’s offers, as follows:As can be seen, the Secretary of Labor failed to indicate the actual data upon which the wage award was based. It even appears that she utilized the “middle ground” approach which we precisely warned against in Meralco. Factors such as the actual and projected net operating income, impact of the wage increase on net operating income, the company's previous CBAs, and industry trends were not discussed in detail so that the precise bases of the wage award are not discernible on the face of the Decision. The contending parties are effectively precluded from seeking a review of the wage award, even if proper under our ruling in Meralco, because of the general but unsubstantiated statement in the Decision that the wage award was based on factors like the bargaining history, trends of arbitrated and agreed awards, and industry trends. In fine, there is no way of determining if the Secretary of Labor utilized the proper evidence, figures or data in arriving at the subject wage award as well as the reasonableness thereof. This falls short of the requirement of administrative due process obligating the decision-maker to adjudicate the rights of the parties in such a manner that they can know the various issues involved and the reasons for the decision rendered.31cralaw virtualaw library
UNION[’S] DEMANDS COMPANY’S OFFERS For the FIRST YEAR: P36 For the First 18 months: P18 For the SECOND YEAR: 36 For the Second 18 months: 18 For the THIRD YEAR: 36 TOTAL: P108 for three (3) years P36 for 36 months
this Office awards the following wage increases:
For the FIRST YEAR: P18 For the SECOND YEAR: 15 For the THIRD YEAR: 12 P45 for three (3) years30
* Per Special Order No. 1548 dated September 16, 2013.cralawnad
** Per Raffle dated September 16, 2013.cralawnad
1 CA rollo (CA G.R. SP. No. 83168), pp. 371-402 penned by Associate Justice Delilah Vidallon-Magtolis and concurred by Associate Justices Josefina Guevara-Salonga and Fernanda Lampas Peralta.cralawnad
2 Id. at 479-483; penned by Associate Justice Josefina Guevara-Salonga and concurred in by Associate Justices Edgardo P. Cruz and Fernanda Lampas Peralta.cralawnad
3 Id. at 47-68.cralawnad
4 Id. at 372-380.cralawnad
5 Id. at 401-402. Emphases in the original.cralawnad
6 372 Phil. 697 (1999).cralawnad
7 CA rollo (CA-G.R. SP No. 83168), pp. 482-483.cralawnad
8Rollo, pp. 709-710.cralawnad
9 CA rollo (CA-G.R. SP No. 83168), p. 40.cralawnad
11 Article VIII, Section 2 of respondent union’s constitution and by-laws states:
Seksyon 2. Ang Lupon ng mga Kagawad (Board of Directors) ay magdaraos ng regular na pulong isang (1) beses tuwing ikalawang (2) buwan. Ang mga paanyaya o abiso sa bawat kasapi ng Lupon ng mga kagawad ay ipapadala tatlong (3) araw bago sumapit ang takdang araw ng pulong. Ang petsa, oras at lugar ng pulong ay itatakda ng Chairman of the Board.
12 Entitled In Re: Petition for Interpleader, Asia Brewery, Inc. v. Jose Manuel Miranda, et al.; id. at 567.cralawnad
- Ito ang pangalawang mataas na kapulungan ng Unyon dahil dito, ang Mahahalal na Chairman of the Board ang magpapatawag at mangungulo sa pulong.
- Lalamin ng pulong ang pagpapasa ng mga partikular na patakaran ng unyon sa bawat yugto alinsunod sa mga batayang prinsipyo ng Unyon sa itinatadhana ng Saligang Batas na ito. Upang maging masigla at malaman ang talakayan at mga pagtitiyang mga desisyon dapat malalim na nauunawaan ng bawat kasapi ng Lupon ng mga kagawad ang Saligang prinsipyong isinusulong ng Unyon at ang nilalaman ng Saligang Batas na ito.
- Magkakabisa ang mga desisyon ng Lupon ng mga kagawad dalawang (2) linggo matapos maipasa ang batas at mapatalakay at mapagkaisa ang buong pamunuan at mga komite ng Unyon. (Rollo, p. 234)
13 Entitled In Re: Petition for Annulment of Amendments to TPMA Constitution and By-Laws Providing for a
Recall Election and the Recall Election held on June 26, 2004, Jose Manuel Miranda v. Rodrigo Perez et al.; id.cralawnad
14 Entitled In Re: Petition to Declare the Amendments in the Constitution and By-Laws of the TPMA- Independent and the Recall Election of its Officers Valid, Rodrigo Perez et al. v. Jose Manuel D. Miranda, et al.; id. at 568.cralawnad
15 Id. at 569-586.cralawnad
16 Id. at 586.cralawnad
17 Entitled In Re: Labor Dispute at Asia Brewery Inc.; id. at 611.cralawnad
18 Entitled Rodrigo Perez, et al. v. Asia Brewery Inc., et al.; id.cralawnad
19 Id. at 611-639 (exact day ilegible).cralawnad
20 Id. at 639.cralawnad
21 Supra note 6.cralawnad
22 Id. at 704-705.cralawnad
23 339 Phil. 242 (1997).cralawnad
24 Id. at 250-251. Emphasis supplied.cralawnad
25 Article 263(g) of the Labor Code provides:
When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest, the Secretary of Labor and Employment may assume jurisdiction over the dispute and decide it or certify the same to the Commission for compulsory arbitration. Such assumption or certification shall have the effect of automatically enjoining the intended or impending strike or lockout as specified in the assumption or certification order. If one has already taken place at the time of assumption or certification, all striking or locked out employees shall immediately return to work and the employer shall immediately resume operations and readmit all workers under the same terms and conditions prevailing before the strike or lockout. The Secretary of Labor and Employment or the Commission may seek the assistance of law enforcement agencies to ensure the compliance with this provision as well as with such orders as he may issue to enforce the same.
x x x x
26 361 Phil. 845 (1999).cralawnad
27 Id. at 866-872. Emphasis supplied.cralawnad
28 The December 19, 2003 Order states in part:
To expedite the resolution of this dispute, the parties are directed to submit in three (3) copies, their
Position Papers within ten (10) days from receipt of this Order and another five (5) days from receipt of the said position papers to submit their Reply.
29 Article XIII, Section 3 of the Constitution states in part:
- The Company shall be required to provide:
- Complete Audited Financial Statements for the past five (5) years certified as to its completeness by the Chief Financial Comptroller or Accountant; x x x (Rollo, p. 156. Emphases in the original.)
x x x x
The State shall regulate the relations between workers and employers, recognizing the right of labor to its just share in the fruits of production and the right of enterprises to reasonable returns on investments, and to expansion and growth.cralawnad
30Rollo, p. 323.cralawnad
31Ang Tibay v. Court of Industrial Relations, 69 Phil. 635, 644 (1940).cralawnad
32 CA rollo (CA-G.R. SP No. 83168), pp. 180-181. The minutes relevantly state:
AGENDA (ECONOMIC ISSUES)
ARTICLE IX: HOSPITALIZATION, MEDICAL AND DENTAL SERVICES
- Clarified Management Position-P1,390 without dependent? Contract with Fortune Care had expired last October 15, 2003.
- P1,390- dependent, negotiable;
- 50%-50% for dependent’s premium;
- 70%-30% (70% is for TPMA);
- Accepted P 1,390 but to rephrase/change the CBA existing provision-NOT to indicate the amount/figure instead, 100% cost of net premium- is to be shouldered by the Management.
- Suggested to DEFER this provision.
- Other provisions DEADLOCK.
- We’re not telling that we don’t want to negotiate anymore, but seems you’re one sided. Even we declared Deadlock- we are still OPEN for a marathon negotiation.
- Let’s discuss at the LABOR for we see that at this level we cannot have an agreement. We were able to justify our position- it is not “SUNTOK SA BUWAN” as you claimed. It will just last for so long, so, let’s elevate it at the Labor (DOLE).
- Can we ask for an increase for the succeeding years in addition to what you have given this year? For sure we will not get an expensive HMO.
- Can we just ask for a 30% increase in premium for the 2nd and 3rd year? You know the HMO increases its rate on a yearly basis.
- Ok for P1,390; renegotiate for the 2nd and 3rd year. “Nakasalalay dito ang mga empleyadong naka- confine sa hospital.”
- All other provisions-DEADLOCK, it was you who deferred the HMO provision.
33 Id. at 27.
- P1,390 is the current Management position. If the TPMA will insist for the Dependent’s inclusion, we will be back to P1,200; otherwise, we have to close this provision at P1390, employee only.
- Clarified Management position ever since. We have to CLOSE this provision.
- Suggested to use the existing rate of P1,200 while still negotiating this specific provision.
- Still P1,390 only for the employee.
- Retain the existing provision of the existing CBA and will be increasing the premium from P1,200 to P1,390.
- If you’re declaring deadlock in other provisions, we are here to continuously negotiate with you until we arrive to an agreement which is mutually beneficial to both parties.
- We are sincere in negotiating because what we’re giving means Millions already. Look at the Management side for you to understand us. Much as we wanted to improve the welfare and benefits of our employees but there are limitations. We cannot give you heaven, anything you want. Management is trying its very best to accommodate all the demands of the Union.
- We didn't quote "suntok sa buwan" but the Management can't afford your demands. We believe you are sincere in your demands but we cannot accept your demands on HMO , is the P1,390 the same provision of the CBA? Is this already acceptable to you?
- P1,390 for the employee, the rest of the HMO provision, the same that's the position of the Management.
- Management will observe the Ground Rules to meet every Tuesday and Friday. May we know the side of the UNION? Please clarify are you willing to negotiate again?
- We will comply with the Ground Rules and in our scheduled session, we will be THERE.