Title
Government Service Insurance System vs. GSIS Supervisors Union
Case
G.R. No. L-32772
Decision Date
Apr 30, 1979
GSISSU sought salary parity for supervisors; CIR ordered adjustment, upheld attorney's lien. SC affirmed, ruling partial payment by GSIS negated stay of execution under RA 5440.
stay of execution
salary increase
deduction

Case Summary (G.R. No. 120715)

Factual Background

In CIR Case No. 87-IPA (8), GSISSU, through counsel Magadia and Uy, filed a petition demanding that GSIS grant a one-rate salary increase effective January 1, 1969 for supervisors in Pay Classes 7 to 13, in the manner and parity previously granted to rank-and-file employees in Pay Classes 1 to 6 by virtue of a collective bargaining agreement between GSIS and GSISEA (CUGCO).

After hearing, the CIR issued an Order dated April 29, 1970, granting the requested one-step salary adjustment to supervisory personnel. The dispositive portion directed GSIS to cease and desist from discriminating against GSISSU and other employees in the supervisors’ unit and to grant to all supervisory employees the same salary readjustment or increase already granted to Manuel Perlada and other members of GSISEA-CUGCO, provided they had not reached the maximum step of their respective pay classes.

The CIR en banc affirmed the Order through a Resolution dated May 9, 1970. GSIS then appealed to the Supreme Court, docketed as G.R. No. L-32018.

Filing and Approval of Attorney’s Lien

While G.R. No. L-32018 was pending, Attorneys Magadia and Uy filed, on May 4, 1970, in the same CIR case, a Notice of Attorney’s Lien. The lien was based on a retainer agreement in which counsel agreed to be compensated contingently, in an amount equivalent to fifteen percent (15%) of the salary increase that would result from the salary adjustment to be granted to all employees in the bargaining unit of supervisors (Pay Classes 7 to 13).

On June 5, 1970, GSISSU’s counsel filed a manifestation before the CIR alleging that GSIS was about to implement, in whole or in part, the CIR Order and Resolution appealed in G.R. No. L-32018, and prayed that the attorney’s lien be approved. The CIR approved the lien on June 5, 1970, and ordered that the fifteen percent (15%) attorney’s fee, computed as a percentage of salary increases from the salary adjustment given to employees in Pay Classes 7 to 13, be deducted from the affected employees’ increases and be paid directly to counsel.

Partial Implementation by GSIS and the Motion for Enforcement

During the pendency of G.R. No. L-32018, GSIS partially implemented the salary increase. On July 24, 1970, GSIS paid fifty percent (50%) of the salary increase differential for the year 1969 to supervisory personnel in Pay Classes 7 to 13, without deducting the fifteen percent (15%) attorney’s fees.

Counsel for GSISSU then filed a Motion for Enforcement of Attorney’s Lien. The motion was granted by Associate Judge Joaquin M. Salvador of the CIR in an Order dated July 30, 1970, modifying the earlier June 5, 1970 disposition. The July 30, 1970 dispositive portion ordered GSIS, through its General Manager, to deduct the corresponding 15% from the total amount paid on July 24, 1970 from the next succeeding in-step differentials to be paid, together with 15% of any amount thereafter to be paid as in-step differentials to all employees in Pay Classes 7 to 13. It further directed that the amounts deducted for members of GSISSU be paid directly to Attorneys Magadia and Uy, and that amounts corresponding to employees not belonging to GSISSU be deposited in court for further disposition.

GSIS moved for reconsideration, but the CIR en banc denied it in a Resolution dated August 24, 1970. GSIS then appealed to the Supreme Court from the July 30, 1970 Order and the August 24, 1970 Resolution.

The Parties’ Contentions on Appeal

In its appeal, GSIS raised two assigned errors. First, it asserted that the CIR committed grave abuse of discretion tantamount to lack of jurisdiction when it directed GSIS to deduct 15% from the total amounts paid on July 24, 1970 and from future in-step differentials, in light of the CIR’s supposed statement that the July 24, 1970 salary increases had been made pursuant to an existing collective bargaining agreement.

Second, GSIS contended that under Section 3 of Republic Act No. 5440, the filing of a petition for writ of certiorari to review the CIR judgment stayed the execution of the judgment sought to be reviewed. Consequently, GSIS argued that enforcing the attorney’s fee by deducting from payments made during the pendency of its appeal was legally erroneous.

GSISSU, in turn, sought enforcement of the attorney’s lien as ordered by the CIR and insisted on the validity of the deduction mechanism adopted by the CIR in its July 30, 1970 Order.

Supreme Court’s Treatment of the First Assigned Error

On the first assigned error, the Supreme Court examined the portion of the July 30, 1970 Order that GSIS claimed supported its position. The Court observed that GSIS relied on a quoted sentence reflecting testimony by German Aquino, GSIS’s Corporate Paymaster, who stated that on July 24, 1970 GSIS paid fifty percent (50%) of the in-step differential to employees in Pay Classes 1 to 13 who had not reached the maximum step of their pay classes, without deducting attorney’s fees, and that the payment was made to implement a collective bargaining agreement between GSIS and GSISEA-CUGCO.

The Court held that the clause relied upon by GSIS was not a factual finding by the CIR. It referred to the continuing testimony of Aquino. The Court further noted that the CIR itself recognized earlier that the collective bargaining agreement had been implemented in a manner that discriminated against supervisors in the unit. The Court emphasized the CIR’s earlier explicit ruling in the April 29, 1970 Order that the collective bargaining process could not be availed of to secure supervisors the same benefits already granted to Perlada and others of the GSISEA. The CIR had ruled that supervisors could not expect the same benefits due to the lack of collective bargaining parity in their unit, and it had characterized GSIS’s situation as discrimination.

Thus, the Supreme Court reasoned that while employees in Pay Classes 1 to 6 had received the increase by virtue of the collective bargaining agreement with GSISEA-CUGCO, supervisory employees in Pay Classes 7 to 13, who belonged to GSISSU and whose unit had no collective bargaining agreement with GSIS, had not. The Court held that the CIR’s April 29, 1970 Order precisely addressed this discrimination by directing the uniform application of the in-step differentials.

Accordingly, the Court concluded that GSIS’s partial payment to supervisory personnel on July 24, 1970 was in partial implementation of the CIR’s Orders of April 29, 1970 and July 30, 1970, and not a payment pursuant to a collective bargaining agreement in a manner that would negate the attorney’s lien. The Court therefore found the first assigned error without merit.

Supreme Court’s Treatment of the Second Assigned Error

On the second assigned error, the Supreme Court acknowledged that Section 3 of Republic Act No. 5440 provides that a petition for a writ of certiorari to review a CIR judgment stays the execution of the judgment sought to be reviewed. The Court, however, identified a decisive factual circumstance: GSIS itself partially implemented the CIR’s judgment while the appeal was pending.

Specifically, the Court noted that GSIS paid fifty percent (50%) of the salary increase differential to employees in Pay Classes 7 to 13 without awaiting the Supreme Court’s resolution in G.R. No. L-32018, and it did so without deduct

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