G.R. No. 207853 - Clark Development Corporation and Goverce Commission for GOCCs vs. Association of CDC Supervisory Personnel Union

On March 20, 2012, the Clark Development Corporation (CDC), acting as the operating arm of the Bases Conversion Development Authority (BCDA) for managing the Clark Special Economic Zone, executed a renegotiated CBA with its supervisory employees’ union, the Association of CDC Supervisory Personnel (ACSP).
The renegotiated CBA contained several economic provisions granting additional benefits to supervisory employees, including:

An increase in annual union leave from ten (10) days to fifteen (15) days, with the limitation that not more than eleven (11) members may avail the leave concurrently.
An increase in bereavement leave from three (3) days to five (5) days upon the death of an immediate family member (parent, sibling, child, or spouse).
Free use of CDC guesthouses for up to eleven (11) days per year on weekdays, subject to room availability.
Use of a service vehicle in accordance with CDC’s existing policies and guidelines.
A salary increase of 8% in the first year, followed by 4% in the second year.
Additional uniform allowance of ₱500.00 annually until 2016.
An additional monthly Personal Economic Relief Allowance (PERA) of ₱500.00.
A one-time signing bonus of ₱25,000.00.
Provision for the reproduction and distribution of the CBA to all ACSP members.

The Governance Commission for Government-Owned and-Controlled Corporations (GCG), though not a direct party to the CBA, intervened in the matter.

GCG argued that the renegotiated CBA provisions violated Section 9 of Executive Order (EO) No. 7, Series of 2010, which imposed a moratorium on increases in salaries, allowances, incentives, and other benefits for GOCCs.
It contended that CDC lacked the authority to grant such benefits without the President’s explicit approval.

The Bases Conversion Development Authority (BCDA) expressed concerns regarding the financial sustainability of the economic terms, recommending either deferment or a renegotiation of the CBA.

On August 1, 2012, ACSP filed a complaint with the National Conciliation and Mediation Board (NCMB) at the Department of Labor and Employment for CDC’s failure to implement the CBA.
On November 5, 2012, an Accredited Voluntary Arbitrator (AVA) issued a decision in favor of the union.

The AVA held that the President’s approval for the economic provisions was to be presumed, invoking the Labor Code’s rule of liberal construction in favor of labor.
The decision specifically listed various articles of the CBA as having been submitted for this presumptive approval.

The Court of Appeals (CA) rendered a decision on April 8, 2013, affirming the AVA’s findings.

The CA declared that EO No. 7, Series of 2010 did not apply to CDC (arguing that CDC, as a GOCC without an original charter, was exempt) and that the union, being composed of supervisory employees, was similarly not affected.
The CA reiterated that the presumption of the President’s approval was in line with the principle resolving ambiguous provisions in favor of labor.

Dissatisfied with the CA decision, CDC elevated the case to the Supreme Court via a petition for review on certiorari.

CDC asserted that the economic terms of the renegotiated CBA were invalid and unenforceable.
The petitioner emphasized that the CBA was renegotiated without the requisite presidential authorization, as mandated by EO No. 7 and further reinforced by Republic Act (RA) No. 10149 (the “GOCC Governance Act of 2011”).

ACSP maintained that the CBA was binding as a law between the parties, emphasizing the constitutional right to collective bargaining and negotiation.
GCG, having intervened, argued that the CBA’s economic provisions violated EO No. 7 and RA No. 10149.

GCG affirmed that the moratorium on additional benefits remained in effect (pending the finalization and presidential approval of a new compensation framework for GOCCs).
It stressed that there was no factual or legal basis to assume the President had authorized the additional benefits.

Whether the renegotiated economic provisions of the CBA between CDC and ACSP, which grant additional benefits, are valid and enforceable.

Does the execution of the CBA, with its extra benefits, contravene Section 9 of EO No. 7, Series of 2010’s moratorium on salary and benefit increases for GOCCs?
Is there a legal basis for presuming that the President had authorized the additional benefits under the rule of liberal construction favoring labor?

Whether CDC, as a GOCC without an original charter, is subject to EO No. 7, Series of 2010 and RA No. 10149 in the same manner as other GOCCs.
Whether the intervention by the GCG, asserting its legal interest in ensuring adherence to the prescribed compensation framework, is proper and impacts the adjudication of the case.