G.R. No. 92191-92 - Co vs. House of Representatives Electoral Tribunal

The Manila Electric Company (Meralco) contested the orders issued by the Secretary of Labor on August 19, 1996, and December 28, 1996, concerning collective bargaining agreements (CBAs) with the Meralco Employees and Workers Association (MEWA).
The Secretary of Labor assumed jurisdiction over the negotiation deadlock and issued arbitral awards covering various terms and conditions including wage increases, Christmas bonuses, retirees' benefits, loans, signing bonuses, union leave, work assignments, union security, contracting out, and retroactivity of awards.

The Supreme Court granted Meralco’s petition and set aside some parts of the Secretary of Labor's orders while affirming others.
The parties were directed to execute a CBA incorporating unaffected terms plus modifications by the Court.
The retirement fund issue was remanded to the Secretary of Labor for further evidence and determination of legal personality.
Modifications included:

Wages reduced from P2,200 to P1,900 for 1995-96
Christmas bonus changed from 2 months to 1 month
Loan to cooperatives denied but housing and other loans granted
Signing bonus denied
Union leave corrected to 30 days (from 40 days due to typographical error)
Contracting out allowed without requiring prior union consultation, but employees must be properly informed
Retroactivity set from Dec 28, 1996 to Dec 27, 1999 (later found inconsistent)

Some members of MEWA and the supervisors’ union (FLAMES) filed motions to intervene and for reconsideration disagreeing with the Court’s decision.
The Solicitor-General excused himself from filing comments, while Meralco submitted a consolidated comment.
Additional pleadings were filed but no new arguments beyond those previously considered.

Meralco argued that the P2,200 wage increase would be passed on to consumers as higher electricity rates, which the Court rejected as irrelevant and a non sequitur since such tariff increases require regulatory approval.
The All Asia Capital report relied upon by the union to justify wage increases was deemed inadmissible hearsay and unreliable because it was a newspaper article and not a commercial list.
Meralco’s own reports indicated an actual net income for 1996 of P5.1 billion, while the union’s estimate was P5.7 billion, higher than the company’s projection of P4.171 billion.

Previous wage increases granted to Meralco rank-and-file employees ranged from P1,150 to P1,400 in early 1990s, lower than the P2,000 proposed by the Court for 1995-96.
Supervisory employees had lower wage increases compared to the proposed P2,000 for rank-and-file employees over the two years.
The Court emphasized the public interest in labor-capital relations and the balancing of interests involved.
The Court reaffirmed management’s prerogative in handling salary adjustments but granted the increased wage award from P1,900 to P2,000.

The case originated from renegotiation of a CBA for 1992-1997, focusing on the last two years.
Disputes centered on when the retroactivity of the awards should commence:

Meralco argued awards should only retroact from the date the Secretary of Labor issued the awards.
The union claimed retroactivity should relate back to the expiration date of the last CBA, citing prior Supreme Court rulings.

The Court reviewed jurisprudence, including Pier 8 Arrastre (prospective effect absent agreement), St. Luke’s Medical Center, and Mindanao Terminal (which allowed retroactivity to expiration of prior CBA unless prohibited by law).
The Court noted the silence in law regarding retroactivity of arbitral awards and held that:

CBA arbitral awards granted after six months from the prior CBA expiration retroact to the time agreed by parties.
Absent agreement, retroactivity shall begin on the first day after six-month period post-expiration of the last CBA.
The Secretary of Labor has discretionary power to fix retroactivity when no CBA exists.

By analogy, Article 253-A of the Labor Code on retroactivity of CBAs applies to arbitral awards.
Evidence such as Meralco’s letters and proposals indicated recognition that the CBA award covered December 1, 1995 to November 30, 1997.
Past Secretary of Labor arbitral awards by Meralco’s own admission were retroactive from immediately after the last CBA expiration.

Loan to cooperatives was denied on the ground that unlike housing loans, financing a cooperative is not a lawful obligation or business interest of the employer.
Union leave was corrected from 40 to 30 days due to typographical error.
Contracting out of services for six months or more does not require union consultation but must be done in good faith and without arbitrary or malicious intent.
The Court recognized management prerogative in hiring, contracting out, and business operations but emphasized proper information and good faith in handling employees’ rights.

Whether the wage increase should be set at P1,900 or raised to P2,200 monthly for 1995-96.
The proper period from which the retroactivity of the CBA arbitral awards should commence.
The legality and appropriateness of granting loans to employee cooperatives as part of CBA benefits.
Whether contracting out for six months or more requires prior consultation with the union.
The determination of correct union leave days—whether 30 or 40 days.