G.R. No.

127598 January 27, 1999 - February 22, 2000

MANILA ELECTRIC COMPANY, petitioner,

Vs

Hon. SECRETARY OF LABOR LEONARDO QUISUMBING and MERALCO

EMPLOYEES and WORKERS ASSOCIATION (MEWA), respondent.

Facts:

In this petition for certiorari, the Manila Electric Company (MERALCO) seeks to annul
the orders of the Secretary of Labor dated August 19, 1996 and December 28, 1996,
wherein the Secretary required MERALCO and its rank and file union — the Meralco
Workers Association (MEWA) — to execute a collective bargaining agreement (CBA) for
the remainder of the parties' 1992-1997 CBA cycle, and to incorporate in this new CBA
the Secretary's dispositions on the disputed economic and non-economic issues.

On September 7, 1995, MEWA informed MERALCO of its intention to renegotiate

the terms and conditions of their existing 1992-1997 Collective Bargaining
Agreement (CBA) covering the remaining period of two years starting from
December 1, 1995 to November 30, 1997. MERALCO signified its willingness to
re-negotiate through its letter dated October 17, 1995 and formed a CBA negotiating
panel for the purpose. On November 10, 1995, MEWA submitted its proposal to
MERALCO, which, in turn, presented a counter-proposal. Thereafter, collective
bargaining negotiations proceeded. However, despite the series of meetings
between the negotiating panels of MERALCO and MEWA, the parties failed to arrive
at "terms and conditions acceptable to both of them."

On April 23, 1996, MEWA filed a Notice of Strike with the National Capital Region
Branch of the National Conciliation and Mediation Board (NCMB) of the Department
of Labor and Employment (DOLE) which was docketed as
NCMB-NCR-NS-04-152-96, on the grounds of bargaining deadlock and unfair labor
practices. The NCMB then conducted a series of conciliation meetings but the
parties failed to reach an amicable settlement. Faced with the imminence of a strike,
MERALCO on May 2, 1996, filed an Urgent Petition with the Department of Labor
and Employment which was docketed as OS-AJ No. 0503[1]96 praying that the
Secretary assume jurisdiction over the labor dispute and to enjoin the striking
employees to go back to work.
Secretary granted the petition on May 8, 1996 where the cause of his decision is
pursuant to Article 263(g) of the Labor Code and deputizing USEC. Espanol, Jr. to
conduct conciliation conferences between the parties. Thereafter, both parties
submitted their Memoranda on August 19, 1996, in which Economic Demands (
such as wages, Red Circle Rate (RCR) allowance ect. were generally granted
except for resignation benefits, night work) and Political Demands ( such as scope of
the collective bargaining unit, union recognition and security, transfer of assignment
and job security) were granted.

MERALCO filed MR alleging that the Sec. of Labor committed grave abuse of
discretion amounting to lack or excess of jurisdiction in (1) awarding MEWA P1.142B
that would imperil MERALCO’s viability as a public utility; (2) granting wage
increase; (3) incorporation into the CBA of all existing employee benefits; (4)
granding certain political demands presented by the union; and (5) in ordering the
CBA to be effect of Dec. 1995 instead of Aug. 19 1996 when he resolved the
dispute.

ECONOMIC ISSUES JANUARY 27 1999:

1. CHRISTMAS BONUS

2. RICE SUBSIDY and RETIREMENT BENEFITS for RETIREES

3. EMPLOYEES' COOPERATIVE

4. GHSIP, HMP BENEFITS FOR DEPENDENTS and HOUSING EQUITY LOAN

5. SIGNING BONUS

6. RED-CIRCLE-RATE ALLOWANCE

7. SICK LEAVE RESERVE OF 15 DAYS

9. HIGH VOLTAGE/HIGH POLE/TOWING ALLOWANCE

10. BENEFITS FOR COLLECTORS

Issue:

1. Whether the decisions of the Secretary of labor on economic issues are

proper.
2. Whether the retroactivity set by the Secretary of labor is correct?
Decision:

1999

The Secretary of Labor disregarded and misappreciated evidence, particularly with

respect to the wage award. The Secretary apparently also acted arbitrarily and even
whimsically in considering several legal points; even the Solicitor General himself
considered that the Secretary gravely abused his discretion on at least three major
points; (a) on the signing bonus issue; (b) on the inclusion of confidential employee
in the rank and file bargaining unit, and (c) in mandating a union security
closed-shop regime in the bargaining unit.

2000

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 CBA incorporating the terms and
conditions contained in the unaffected portions of the Secretary of Labors order of
August 19, 1996 and December 28, 1996, and the modification 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.

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. In the same manner, newspapers containing stock quotations are not
admissible in evidence when the source of the reports is available. 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.
DECISION

1999:

NO. CBA should be effective for a term of 2 years from December 28, 1996 (the date of
the Secretary of Labor’s decision) up to December 27, 1999.

What the law additionally requires is that a CBA must be re-negotiated within 3 years
“after its execution.” It is in this re-negotiation that gives rise to the present CBA
deadlock.

● If no agreement is reached within 6 months from the expiry date of the 3 years that
follow the CBA execution, the law expressly gives the parties—not anybody else—the
discretion to fix the effectivity of the agreement. PRINCIPLE OF HOLD OVER- in the
absence of a new CBA, the parties must maintain the status quo and must continue in
full force and effect the terms and conditions of the existing agreement until a new
agreement is reached.51 Remedy for lapse in Art. 253-A. the law prevents the
existence of a gap in the relationship between the collective bargaining parties. In the
absence of an agreement between the parties, then, an arbitrated CBA takes on the
nature of any judicial or quasi-judicial award; it operates and may be executed only
respectively unless there are legal justifications for its retroactive application.

Consequently, we find no sufficient legal ground on the other justification for the
retroactive application of the disputed CBA, and therefore hold that the CBA should be
effective for a term of 2 years counted from December 28, 1996 (the date of the
Secretary of Labor’s disputed order on the parties’ motion for reconsideration) up to
December 27, 1999.

DECISION

2000:

YES. The period is herein set at two (2) years from December 1, 1995 to November 30,
1997 (there was an agreement implied through MERALCO’s acts)

Collective Bargaining Agreement arbitral awards granted after six months from the
expiration of the last Collective Bargaining Agreement shall retroact to such time.
Agreed upon by both employer and the employees or their union. In the absence of
such an agreement as to retroactivity, to the first day after the six-month period following
the expiration of the last day of the Collective Bargaining Agreement should there be
one. In the absence of a Collective Bargaining Agreement, the Secretary’s
determination of the date of retroactivity as part of his discretionary powers over arbitral
awards shall control.

The agreement of the parties need not be categorically stated for their acts may be
considered in determining the duration of retroactivity. 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.

● The petitioner did 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. Letter of petitioner’s Chairman of the Board and its
President addressed to their stockholder: CBA covering the period December 1, 1995 to
November 30, 1997. The proposed CBA MERALCO gave MEWA covering the same
period inclusive.