G.R. No. L-58870 - Cebu Institute of Technology vs. Ople

Six cases involving various private schools, their teachers and employees, parents of students, and government officials (Ministers of Labor and Education) were consolidated due to a common legal issue concerning the allocation of the incremental proceeds from authorized tuition fee increases under section 3(a) of Presidential Decree No. 451 (P.D. No. 451) and later under the Education Act of 1982 (B.P. Blg. 232).
The core question was the interpretation of the allocation of proceeds from tuition fee increases — whether 60% must be allocated solely for salary increases or can also cover allowances and fringe benefits for faculty and other school employees.
Another issue involved the effect of B.P. Blg. 232 on the prior P.D. No. 451 provisions regarding tuition fee increases and their allocation.
A further question was whether collective bargaining agreements (CBAs) may allocate more than 60% of the incremental proceeds for salaries, benefits, and allowances.

In 1981, CIT was charged for non-payment of cost of living allowances (COLA) under various Presidential Decrees, thirteenth month pay differentials, and service incentive leave to its faculty members.
CIT argued it had integrated COLA into the hourly rate paid to teachers in compliance with P.D. No. 451. It also questioned its obligation to grant service incentive leave to contract teachers.
A labor-management committee was formed to investigate and recommend measures.
The Minister of Labor issued an order directing CIT to pay COLA and service incentive leave benefits separately and hold the hourly rate exclusive of COLA, concluding COLA should not be charged against the 60% of tuition fee increment proceeds.
CIT sought certiorari relief, which led to a temporary restraining order against the Minister’s directive.

An inspection was conducted after complaints alleging DWC had charged employee allowances against the 60% tuition fee increments, violating P.D. No. 451.
The Regional Director ordered the payment of these allowances and others to employees, an order affirmed by the Deputy Minister of Labor.
DWC questioned the interpretation and application of P.D. No. 451 in denying the allowance payments from the 60% portion of incremental tuition fee proceeds.

Complaints arose regarding non-payment of legal holiday pay and underpayment of thirteenth month pay, including a separate complaint on violation of P.D. No. 451.
The Labor Arbiter ruled in favor of payment of legal holiday pay and 13th month pay differentials but dismissed the P.D. 451 claim.
The NLRC reversed the decision on legal holiday pay, dismissing those claims but affirmed the dismissal of the P.D. 451 claim.
The FEU Employees Labor Union filed a petition before the Supreme Court challenging the NLRC rulings.

Filed by faculty members and employees of over 4,000 private schools, seeking to enjoin application of Ministry of Education, Culture and Sports (MECS) Order No. 5, series 1985, which altered the allocation of 60% of tuition fee increments by allowing the charging of allowances and benefits to this portion.
This case also presented the question of the effect of B.P. Blg. 232 on previously governing P.D. No. 451 and corresponding implementing rules and regulations.
The petitioners argued MECS Order No. 25, series 1985 conflicted with and was invalid under P.D. No. 451.

A labor dispute at Espiritu Santo Parochial School between the school administration and its Faculty Association led to a strike.
The Ministry of Labor assumed jurisdiction, declared the strike legal, and ordered the school to share proceeds from tuition fee increases equally among employees as salary adjustment.
The collective bargaining agreement (CBA) emerging from this order allocated 90% of the tuition fee increases as an economic package split evenly between basic salary increase and living allowance.
Twenty-seven employees filed a petition for prohibition against enforcement of the Minister of Labor’s order and the CBA, asserting it infringed their right to 60% incremental proceeds solely for salary increases under P.D. No. 451.

Filed by parents of students at Espiritu Santo Parochial School, seeking to nullify the Minister of Labor’s Order directing a CBA allocating 85%-90% of tuition fee increase proceeds to salary adjustments and benefits.
The parents claimed the Minister had no authority to allocate proceeds, a power vested in the Ministry of Education, Culture and Sports under B.P. Blg. 232.
The parents also challenged the Order for exceeding the 60% allocation limit under P.D. No. 451.

P.D. No. 451 (May 11, 1974) allows tuition fee increases subject to certain conditions including allocation of 60% of incremental proceeds to salary or wage increases of employees, with specified percentages for return on investments, institutional development, and student aid.
B.P. Blg. 232 (September 11, 1982), the Education Act of 1982, enacted to provide comprehensive regulation of the educational system, includes section 42 which empowers private schools to determine tuition and school fees subject to MECS rules and regulations, replacing the fixed allocation scheme of P.D. No. 451.
MECS Orders including Order No. 25, series 1985, implement B.P. Blg. 232 and provide for allocation of at least 60% of incremental tuition proceeds to salaries, allowances, fringe benefits, and mandated benefits, thereby allowing charging allowances from this 60% portion.

Whether allowances and other fringe benefits may be charged against the 60% portion of the incremental proceeds of tuition fee increases under section 3(a) of P.D. No. 451.
Whether the same allowances and fringe benefits may be charged against the 60% portion after the effectivity of the Education Act of 1982 (B.P. Blg. 232).
Whether private schools and their employees may enter into CBAs allocating more than 60% of said incremental proceeds to salary increases and other benefits.
Whether the Minister of Labor may issue orders directing allocation of tuition fee increases, particularly regarding CBAs, or if this is exclusively under the jurisdiction of the Ministry of Education, Culture and Sports under B.P. Blg. 232.
Procedural issues regarding the due process rights of private schools in administrative proceedings and the standing of petitioners.
Issues concerning payment of other benefits:

Whether transportation allowance is equivalent to 13th month pay under P.D. No. 851.
Whether legal-holiday pay can be withdrawn after being granted as an employer practice.