Case Digest (G.R. No. 234446)
Facts:
Victoria Manufacturing Corporation Employees Union v. Victoria Manufacturing Corporation, G.R. No. 234446, July 24, 2019, Supreme Court Third Division, A. Reyes, Jr., J., writing for the Court.The petition arises from a labor arbitration between Victoria Manufacturing Corporation (VMC), a textile manufacturer, and Victoria Manufacturing Corporation Employees Union (VMCEU), the exclusive bargaining agent of the company's permanent rank-and-file employees. In a letter dated March 14, 2014, VMC asked the Bureau of Internal Revenue (BIR) for an opinion on the tax treatment of wages under the parties' collective bargaining agreement (CBA). The BIR advised that the workers’ wages exceeded the statutory minimum for tax exemption, and VMC thereafter withheld income tax from union members’ wages.
After an unsuccessful grievance meeting on May 8, 2015, the parties executed a Submission Agreement (dated August 7, 2015) submitting certain disputes — including the propriety of the tax withholding — to Voluntary Arbitrator (VA) Renato Q. Bello. The matter was submitted for decision on December 22, 2015, after the parties filed position papers and replies. On May 26, 2016, the VA issued a decision in favor of VMCEU, holding that the affected employees were statutory minimum wage earners exempt from income tax under R.A. No. 9504, and ordering VMC to reimburse the amounts withheld.
VMC filed a petition for certiorari before the Court of Appeals (CA), challenging the VA’s jurisdiction to decide tax issues. On May 26, 2017, the CA granted the petition and nullified the VA’s decision for lack of jurisdiction, reasoning that VAs are confined to labor disputes and that tax questions belong to the competence of the Bureau of Internal Revenue/Commissioner of Internal Revenue. After denial of its motion for reconsideration, VMCEU brought this Rule 45 petition for review on certiorari before the Court, principally arguing that VMC was estopped from challenging the VA’s jurisdiction because it had consented to arbitration and actively participated therein.
Issues:
- Did the Court of Appeals correctly set aside the Voluntary Arbitrator’s decision on the ground that the VA lacked jurisdiction to rule on the propriety of VMC’s withholding of income tax?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)