Case Summary (G.R. No. 207853)
Applicable Law
The primary legal frameworks involved in this case include Executive Order (EO) No. 7, Series of 2010, which imposes a moratorium on salary increases and additional benefits for employees of Government-Owned and Controlled Corporations (GOCCs) without the President’s specific authorization. Additionally, the relevant provisions of the 1987 Philippine Constitution concerning labor rights, particularly Article XIII Section 3 regarding collective bargaining, play a critical role.
Background of the Case
This dispute originated from a CBA executed on March 20, 2012, between CDC and ACSP, which included several economic benefits for supervisory employees. However, the GCG raised concerns that this CBA violated EO No. 7, specifically citing that increases in salaries and allowances in GOCCs require presidential authorization.
Initial Resolution by the Accredited Voluntary Arbitrator (AVA)
In response to ACSP’s complaint regarding CDC's non-implementation of the CBA, an AVA determined that EO No. 7’s provisions suspending the grant of benefits pertained only to board members of GOCCs and thus did not apply to the supervisory employees represented by ACSP. The AVA ruled in favor of ACSP, asserting presumptive presidential consent on the additional benefits based on labor-friendly interpretations.
Court of Appeals Decision
CDC subsequently elevated the matter to the Court of Appeals (CA), which upheld the AVA's findings, arguing that EO No. 7 did not apply to the contract because CDC is a GOCC without an original charter, and it affirmed the presumption of presidential approval for the additional benefits. The CA's ruling emphasized labor rights' primacy in the interpretation of any ambiguities in labor law.
CDC's Position in the Petition for Review
CDC sought a review, arguing that the CA and AVA erred by permitting the enforcement of economic terms renegotiated without presidential consent, violating the moratorium established by EO No. 7. They noted that the President’s explicit approval was essential for any benefits not covered by the Salary Standardization Law.
Ruling by the Court
The Supreme Court granted the petition filed by CDC, overruling the CA’s previous decision and the AVA’s award. The Court found that the moratorium implemented by EO No. 7 was unequivocally applicable to all GOCCs. The Court clarified that there were no exceptions for GOCCs without original charters and emphasized the need for explicit presidential approval for any additional economic provisions.
Key Legal Findings
The Court distinguished between the interpretation of laws governing collective bargaining in the private sector versus the limitations placed upon government employees. It asserted that EO No. 7
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Core Issue
- The primary focus of this case is the validity of the terms and conditions of government employment as established in the collective bargaining agreement (CBA).
- The petition for review on certiorari challenges the decision of the Court of Appeals (CA) regarding the CBA executed between the Clark Development Corporation (CDC) and the Association of CDC Supervisory Personnel (ACSP).
Antecedents
- On March 20, 2012, CDC, the managing arm of the Bases Conversion Development Authority (BCDA), executed a renegotiated CBA with ACSP, resulting in additional benefits for supervisory employees.
- The CBA included:
- Increase in annual union leave from ten (10) to fifteen (15) days.
- Additional bereavement leave from three (3) to five (5) days.
- Grant of free use of CDC guesthouses for eleven (11) days per year.
- Provision for ACSP to utilize a service vehicle.
- Salary increases of 8% in the first year and 4% in the second year.
- Additional uniform allowance of ₱500.00 annually until 2016.
- Monthly Personal Economic Relief Allowance (PERA) of ₱500.00.
- One-time signing bonus of ₱25,000.00.
- Distribution of the Agreement to all ACSP members.
Governance Commission's Position
- The Governance Commission for Government-Owned and-Controlled Corporations (GCG) asserted that the CBA violated Section 9 of Executive Order (EO) No. 7, which imposed a moratorium on salary increases and additional benefits in Government-O