G.R. No. 198935 - Maynilad Water Supervisors Association vs. Maynilad Water Services, Inc.

The Maynilad Water Supervisors Association (MWSA) is an association composed of former supervisory employees of the Metropolitan Waterworks and Sewerage System (MWSS).
During their employment with MWSS, these employees received a monthly cost-of-living allowance (COLA) equivalent to 40% of their basic pay.

The COLA and other additional compensations were discontinued without qualification effective 1 November 1989 when the Department of Budget and Management (DBM) issued Corporate Compensation Circular No. 10 (CCC No. 10).
In 1997, MWSS was privatized, and part of it, MWSS West, was acquired by Maynilad Water Services, Inc. (Maynilad).
Some MWSS employees, including members of MWSA, were absorbed by Maynilad under the terms of a Concession Agreement.

Article 6.1.1 (ii) of the Concession Agreement required Maynilad to offer employment on or before the Commencement Date at a salary, pay scale, and benefits at least equal to those received by the employees at the time of their separation from MWSS.
Article 6.1.3 (Non-Diminution of Benefits) mandated that the absorbed employees should continue to receive benefits no less favorable than those benefitted by MWSS, as listed in Exhibit aF of the Agreement.
Notably, COLA was not enumerated as one of the benefits in Exhibit aF.

In 1998, the Supreme Court declared DBM CCC No. 10 ineffective for failing to comply with the publication requirement.
As a consequence, MWSS partially released COLA payments covering the period from 1989 to 1997 and, for some employees, up to 1999.

In 2002, MWSA filed a complaint before the Labor Arbiter seeking payment of COLA from the time of absorption in 1997 up to the present.
The Labor Arbiter, in a decision dated 10 November 2006, ruled in favor of MWSA and directed Maynilad to pay COLA retroactive from 1997, along with legal interest.
Maynilad appealed the Labor Arbiter’s decision on 11 December 2006 before the National Labor Relations Commission (NLRC), accompanying its appeal with an Urgent Manifestation and Motion to Reduce Bond.

The NLRC granted Maynilad’s motion and reversed the Labor Arbiter’s decision.
MWSA’s motion for reconsideration before the NLRC was denied in a resolution dated 23 October 2007.
MWSA then elevated the case to the Court of Appeals (CA), filing a petition for certiorari on 11 January 2008.
On 31 May 2010, the CA Ninth Division annulled and set aside the NLRC’s ruling, reinstating the Labor Arbiter’s decision.
Maynilad moved for reconsideration, and on 31 January 2011, the CA Ninth Division reversed its earlier decision, reinstating the NLRC rulings.
A Motion for Reconsideration filed by MWSA thereafter was denied by the CA Second Division on 12 September 2011 after recusal of the original division’s members.

Whether the Concession Agreement required Maynilad to pay COLA to former MWSS supervisors, given that COLA was not enumerated in Exhibit aF.
Whether the CA erred in not finding grave abuse of discretion on the part of the NLRC when it reduced the appeal bond posted by Maynilad.

Whether Maynilad was bound under the Concession Agreement to pay the COLA to employees acquired from MWSS.
Whether the exclusion of COLA from Exhibit aF reflects the intention of the parties regarding the benefits to be provided.

Whether the Court of Appeals erred in not deeming grave abuse of discretion regarding the NLRC’s decision to grant Maynilad’s motion to reduce the appeal bond.
The issue also considers whether the appeal bond requirement should be strictly enforced or relaxed in view of the circumstances, including Maynilad’s concurrent Petition for Rehabilitation and the corresponding Stay Order.