Case Summary (G.R. No. 181806)
Key Dates
• June 1, 2003–May 31, 2008: Five-year Collective Bargaining Agreement (CBA) in force
• August 16, 2005: Memorandum on vacation and sick leave credits and leave commutation issued by WUP
• August 25, 2005: Letter from WU‐PFSA objecting to unilateral changes
• February 8, 2006: Labor-Management Committee meeting announcing grievance referral and one-retirement policy
• November 2, 2006: Voluntary Arbitrator’s Decision annulling the memorandum and one-retirement policy
• September 25, 2007: CA Decision affirming the arbitration award
• February 5, 2008: CA Resolution denying reconsideration
• March 12, 2014: SC Decision denying the petition for certiorari
Applicable Law
• 1987 Philippine Constitution, Article II, Section 18 (pro-labor policy)
• Labor Code, Article 100 (Non-Diminution Rule)
• Jurisprudence on binding force of collective bargaining agreements (National Federation of Labor v. CA, 483 Phil. 626 (2004); HFS Philippines, Inc. v. Pilar, G.R. No. 168716 (2009))
Factual Background
Under the CBA, all regular and non-tenured rank-and-file employees were entitled to fifteen (15) days of vacation leave and fifteen (15) days of sick leave annually, with unused vacation leave after two years commutable to cash at the end of each school year. On August 16, 2005, WUP issued a memorandum conditioning the accrual of leave credits on monthly service and deferring commutation until after two years of continuous service. On August 25, 2005, WU-PFSA objected, citing Articles XII (Vacation and Sick Leave) of the CBA. A subsequent LMC meeting on February 8, 2006, directed WU-PFSA to file a grievance and announced WUP’s intent to institute a “one-retirement” policy, which the association likewise rejected.
Procedural History
WU-PFSA referred the dispute to voluntary arbitration. On November 2, 2006, the arbitrator declared both the leave memorandum and the one-retirement policy contrary to law and ordered reinstatement of pre-existing practices and benefits under the CBA and the Private Education Retirement Annuity Association (PERAA) Plan. WUP appealed to the CA via Rule 43; the CA, on September 25, 2007, affirmed the arbitration award for lack of merit. Reconsideration was denied on February 5, 2008. WUP filed a petition for certiorari under Rule 45 before the SC, which was resolved on March 12, 2014.
Issues Presented
- Whether the CA erred in finding substantial evidence in WU-PFSA’s affidavits to establish a long-standing practice of granting two retirement benefits.
- Whether the CA erred in holding that such practice had ripened into a binding company policy despite alleged illegality or lack of authorization.
- Whether the CA wrongly placed on WUP the burden to prove absence of Board resolution for dual retirement benefits.
- Whether the CA erred in nullifying the August 16, 2005 memorandum as contrary to the CBA.
Petitioner's Arguments
• There exists only one retirement plan: the CBA Retirement Plan, which is identical to the PERAA Plan;
• No established practice of dual retirement benefits; any double payments were unauthorized oversights lacking Board approval and cannot ripen into practice;
• Affidavits submitted by WU-PFSA are self-serving and not entitled to weight;
• The August 16, 2005 memorandum aligns with policy and validly clarifies leave accrual and commutation.
Respondent's Arguments
• Two distinct retirement plans have co-existed for over thirty years (PERAA and CBA Retirement Plan);
• A consistent practice of dual retirement benefits was proven by substantial evidence (affidavits of retirees and incumbents);
• The memorandum unlawfully imposed additional qualifications on leave benefits, contrary to the CBA.
Legal Analysis and Ruling
Under the 1987 Constitution’s pro-labor mandate and Labor Code Article 100’s Non-Diminution Rule, employers may not diminish benefits based
...continue readingCase Syllabus (G.R. No. 181806)
Facts
- Wesleyan University-Philippines (WU-P) is a non-stock, non-profit educational institution organized under Philippine law.
- Wesleyan University-Philippines Faculty and Staff Association (WU-PFSA) is a registered labor organization and the exclusive bargaining agent for rank-and-file faculty and staff.
- In December 2003, the parties signed a five-year Collective Bargaining Agreement (CBA) effective June 1, 2003 to May 31, 2008.
- On August 16, 2005, WU-P President Atty. Guillermo T. Maglaya issued a Memorandum prescribing:
- Monthly accrual of vacation and sick leave credits at 1.25 days each.
- Vacation and sick leave credits totalling 15 days only at the May 31 cut-off each year.
- Vacation leave commutation to cash only after two years of continuous service.
- On August 25, 2005, WU-PFSA President Cynthia L. De Lara protested the unilateral changes as violative of Sections 1 and 2, Article XII of the CBA, which provided for 15 days of vacation and 15 days of sick leave annually and mandatory conversion of unused vacation leave to cash after two years.
- On February 8, 2006, a Labor-Management Committee meeting ended in impasse; WU-P advised WU-PFSA to file a grievance and announced a “one-retirement” policy, which WU-PFSA likewise rejected.
- The dispute was submitted to Voluntary Arbitration.
Procedural History
- Voluntary Arbitrator heard evidence, including affidavits establishing a longstanding practice of granting two retirement benefits: one under the Private Education Retirement Annuity Association (PERAA) Plan and another under the CBA Retirement Plan.
- Article XVI, Sections 1–4 of the CBA detailed membership, compulsory and optional retirement dates, and retirement benefit calculations.
- On November 2, 2006, the Arbitrator declared the August 16, 2005 Memorandum and the one-retirement policy contrary to law, ordering reinstatement of prior leave and dual-retirement schemes.
- WU-P appealed via Rule 43 to the Court of Appeals (CA)