G.R. No. 86819 - Adamson University vs. Adamson University Faculty and Employees Association

The Adamson Ozanam Educational Institution, Inc. (also known as Adamson University) was granted by then Ministry of Education, Culture & Sports (MECS) the authority to increase tuition fees by 10% and 5% for the school year 1983–84.
The authority for the tuition fee increase provided the basis for subsequent disputes regarding the disposition of incremental proceeds.

The Adamson University Faculty and Employees Association (AUFEA) contended that under Presidential Decree No. 451 the school should allocate 60% of the additional tuition fee proceeds to the increase in salaries and wages of faculty and other employees.
The dissent arose because the institution (petitioner) argued that PD 451 had been repealed by the Educational Act of 1982, and asserted that there were no actual incremental proceeds for the school year 1983–84 upon which the 60% allocation would be based.

The complaint was initially filed with the Ministry of Labor & Employment but was dismissed by the labor arbiter on March 31, 1986, for lack of merit.
The AUFEA appealed the dismissal to the National Labor Relations Commission (NLRC), which, on September 30, 1988, set aside the labor arbiter’s decision and ordered Adamson University to remit P1,298,160.00 representing the 60% share of the incremental tuition fee proceeds to the members of AUFEA.
A motion for reconsideration of the NLRC’s decision was subsequently filed by the petitioner (Adamson University) but was denied on January 30, 1989 for being filed out of time.

Following the denial of the motion for reconsideration, Adamson University filed a petition for certiorari before the Supreme Court on February 22, 1989, seeking to annul the NLRC decision for its alleged grave abuse of discretion.
The petition was dismissed for failure to sufficiently show that the respondent commission committed a grave abuse of discretion.
A motion for reconsideration of this dismissal was later filed by petitioner, which after submission of required comments and a reply, the Court found cogent basis to grant.

The NLRC decision dated September 30, 1988 was served on the office of Adamson University’s former counsel by delivering a copy to the security guard at the TOEFEMI building.
At the time of service, the former counsel (Atty. Adres Narvasa) had already been elevated to the Supreme Court, and his law office had been dissolved.
A subsequent transmission of the decision to the present counsel occurred on November 5, 1988, resulting in the timely filing of a motion for reconsideration on November 15, 1988.

The petitioner argued that since the collective bargaining agreement (CBA) was concluded only two days after the authority to raise tuition fees was granted, it did not necessarily intend that the CBA benefits be charged against the incremental proceeds.
The NLRC, however, based its order on MECS Order No. 25 and previous legal interpretations that required 60% of the incremental proceeds to be applied to basic salaries and wages, including benefits under the collective bargaining agreement.

The Court noted that in Cebu Institute of Technology v. Hon. Blas Ople, it was held that PD 451 was automatically repealed by B.P. Blg. 232, effective September 11, 1982.
Consequently, the disposition of the incremental proceeds should be governed by the provisions of B.P. Blg. 233, which mandates that not less than 60% of the incremental tuition proceeds be used for salaries, wages, and other related benefits.
The Court also cited the University of the East v. UE Faculty Association decision, which underscored that even collective bargaining secured salary increases may be charged against the incremental tuition proceeds.

Whether the service of the NLRC decision upon the security guard at the building (where the petitioner’s former counsel held office) complies with Section 4, Rule 13 of the Rules of Court.
Whether service on a person who is neither the attorney nor an authorized clerk or person in charge renders the service legally effective, thereby invoking the running of the appeal or motion for reconsideration period.

Whether the NLRC’s ruling requiring the allocation of 60% of the incremental tuition fee proceeds to salaries and other employee benefits is proper given that PD 451 was purportedly repealed by the Educational Act of 1982 (B.P. Blg. 232).
Whether the benefitting items under MECS Order No. 25 (including those arising from collective bargaining) could be charged against the incremental proceeds, in light of prior jurisprudence.