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G.R.No.181806.March12,2014.*

WESLEYAN UNIVERSITYPHILIPPINES, petitioner, vs.


WESLEYANUNIVERSITYPHILIPPINESFACULTYandSTAFF
ASSOCIATION,respondent.
Labor Law Wages NonDiminution of Benefits Rule The Non

DiminutionRulefoundinArticle100 oftheLaborCodeexplicitlyprohibits
employers from eliminating or reducing the benefits received by their
employees. This rule, however, applies only if the benefit is based on an
express policy, a written contract, or has ripened into a practice.The
NonDiminution Rule found in Article 100 of the Labor Code explicitly
prohibits employers from eliminating or reducing the benefits received by
their employees. This rule, however, applies only if the benefit is based on
an express policy, a written contract, or has ripened into a practice. To be
considered a practice, it must be consistently and deliberately made by the
employer over a long period of time. An exception to the rule is when the
practice is due to error in the construction or application of a doubtful or
difficult question of law. The error, however, must be corrected
immediately after its discovery otherwise, the rule on NonDiminution of
Benefitswouldstillapply.
Same Collective Bargaining Agreements When the provision of the
Collective Bargaining Agreement (CBA) is clear, leaving no doubt on the
intentionoftheparties,theliteralmeaningofthestipulationshallgovern.
ItmaynotbeamisstomentionthatwhentheprovisionoftheCBAisclear,
leaving no doubt on the intention of the parties, the literal meaning of the
stipulation shall govern. However, if there is doubt in its interpretation, it
shouldberesolvedinfavoroflabor,asthisismandatedbynolessthanthe
Constitution.

PETITIONforreviewoncertiorariofthedecisionandresolutionof
theCourtofAppeals.
ThefactsarestatedintheopinionoftheCourt.
_______________
*SECONDDIVISION.
602

Jimenez, Gonzales, Liwanag, Bello, Valdez, Caluya and


Fernandezforpetitioner.
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DELCASTILLO,J.:
ACollectiveBargainingAgreement(CBA)isacontractentered
intobyanemployerandalegitimatelabororganizationconcerning
thetermsandconditionsofemployment.[1]Likeanyothercontract,
it has the force of law between the parties and, thus, should be
compliedwithingoodfaith.[2]Unilateralchangesorsuspensionsin
theimplementationoftheprovisionsoftheCBA,therefore,cannot
beallowedwithouttheconsentofbothparties.
This Petition for Review on Certiorari[3] under Rule 45 of the
Rules of Court assails the September 25, 2007 Decision[4] and the
February5,2008Resolution[5]oftheCourtofAppeals(CA)inCA
G.R.SPNo.97053.

FactualAntecedents
Petitioner Wesleyan UniversityPhilippines is a nonstock,
nonprofit educational institution duly organized and existing under
the laws of the Philippines.[6] Respondent Wesleyan University
Philippines Faculty and Staff Association, on the other hand, is a
dulyregisteredlabororganization[7]actingas
_______________
[1] National Federation of Labor v. Court of Appeals, 483 Phil. 626, 639 440

SCRA603,616(2004).
[2]HFSPhilippines,Inc.v.Pilar,G.R.No.168716,April16,2009,585SCRA315,
324.
[3]Rollo,pp.1446.
[4]CARollo,pp.268288pennedbyAssociateJusticeVicenteS.E.Velosoand
concurredinbyAssociateJusticesJuanQ.Enriquez,Jr.andMarleneGonzalesSison.
[5]Id.,atp.315.
[6]Id.,atp.269.
[7]Rollo,p.92.

603

the sole and exclusive bargaining agent of all rankandfile faculty


andstaffemployeesofpetitioner.[8]
In December 2003, the parties signed a 5year CBA[9]effective
June1,2003untilMay31,2008.[10]
On August 16, 2005, petitioner, through its President, Atty.
Guillermo T. Maglaya (Atty. Maglaya), issued a Memorandum[11]
providing guidelines on the implementation of vacation and sick
leave credits as well as vacation leave commutation. The pertinent
portionsoftheMemorandumread:
1.VACATIONANDSICKLEAVECREDITS
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Vacationandsickleavecreditsarenotautomatic.Theyhaveto
beearned.Monthly,aqualifiedemployeeearnsanequivalentof
1.25 days credit each for VL and SL. Vacation Leave and Sick
Leavecreditsof15daysbecomecompleteatthecutoffdateof
May31ofeachyear.(Example,onlyatotalof5dayscreditwill
be given to an employee for each of sick leave [or] vacation
leave,asofmonthendSeptember,thatis,4monthsfromJuneto
September multiplied by 1.25 days). An employee, therefore,
whotakesVLorSLbeyondhisleavecreditsasofdatewillhave
tofileleavewithoutpayforleavesbeyondhiscredit.
2.VACATIONLEAVECOMMUTATION
Only vacation leave is commuted or monetized to cash.
Vacation leave commutation is effected after the second year of
continuous service of an employee. Hence, an employee who
started working June 1, 2005 will get his commutation on May
31,2007orthereabout.[12]

_______________
[8]CARollo,p.269.
[9]Rollo,pp.92106.
[10]CARollo,p.269.
[11]Rollo,p.107.
[12]Id.

604

On August 25, 2005, respondents President, Cynthia L. De Lara


(De Lara) wrote a letter[13] to Atty. Maglaya informing him that
respondent is not amenable to the unilateral changes made by
petitioner.[14]DeLaraquestionedtheguidelinesforbeingviolative
ofexistingpracticesandtheCBA,[15]specificallySections1and2,
ArticleXIIoftheCBA,towit:
ARTICLEXII
VACATIONLEAVEANDSICKLEAVE
SECTION1.VACATIONLEAVE.Allregularandnontenuredrank
andfilefacultyandstaffwhoareentitledtoreceiveshallenjoyfifteen(15)
daysvacationleavewithpayannually.
1.1All unused vacation leave after the second year of service shall be
converted into cash and be paid to the entitled employee at the end of each
schoolyeartobegivennotlaterthanAugust30ofeachyear.
SECTION2.SICK LEAVE.All regular and nontenured rankand
file faculty and staff shall enjoy fifteen (15) days sick leave with pay
annually.[16]

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On February 8, 2006, a Labor Management Committee (LMC)


Meetingwasheldduringwhichpetitioneradvisedrespondenttofile
a grievance complaint on the implementation of the vacation and
sickleavepolicy.[17]Inthesamemeeting,petitionerannouncedits
plan of implementing a oneretirement policy,[18] which was
unacceptabletorespondent.
_______________
[13]CARollo,p.104.
[14]Id.
[15]Id.
[16]Rollo,p.100.
[17]CARollo,p.107.
[18]Id.,atp.108.

605

RulingoftheVoluntaryArbitrator
Unable to settle their differences at the grievance level, the
parties referred the matter to a Voluntary Arbitrator. During the
hearing, respondent submitted affidavits to prove that there is an
establishedpracticeofgivingtworetirementbenefits,onefromthe
Private Education Retirement Annuity Association (PERAA) Plan
andanotherfromtheCBARetirementPlan.Sections1,2,3and4of
ArticleXVIoftheCBAprovide:
ARTICLEXVI
SEPARATION,DISABILITYANDRETIREMENTPAY
SECTION1.ELIGIBILITY FOR MEMBERSHIPMembership in
thePlanshallbeautomaticforallfulltime,regularstaffandtenuredfaculty
of the University, except the University President. Membership in the Plan
shall commence on the first day of the month coincident with or next
followinghisstatementofRegular/TenuredEmploymentStatus.
SECTION2.COMPULSORY
RETIREMENT
DATEThe
compulsoryretirementdateofeachMembershallbeasfollows:
a.FacultyThelastdayoftheSchoolYear,coincidentwithhis
attainmentofagesixty(60)withatleastfive(years)ofunbroken,
creditedservice.
b.StaffUponreachingtheageofsixty(60)withatleastfive
(5)yearsofunbroken,creditedservice.
SECTION3.OPTIONALRETIREMENTDATE
A Member may opt for an optional retirement prior to his compulsory
retirement. His number of years of service in the University shall be the
basis of computing x x x his retirement benefits regardless of his
chronologicalage.
SECTION4.RETIREMENTBENEFITTheretirementbenefitshall
be a sum equivalent to 100% of the members final monthly salary for
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compulsoryretirement.
606

Foroptionalretirement,thevestingscheduleshallbe:
xxxx[19]

On November 2, 2006, the Voluntary Arbitrator rendered a


Decision[20] declaring the oneretirement policy and the
Memorandum dated August 16, 2005 contrary to law. The
dispositiveportionoftheDecisionreads:
WHEREFORE,thefollowingawardisherebymade:
1.TheassailedUniversityguidelinesontheavailmentofvacationandsickleave
credits and vacation leave commutation are contrary to law. The University is
consequently ordered to reinstate the earlier scheme, practice or policy in effect
beforetheissuanceofthesaidguidelinesonAugust16,2005
2.The one retirement policy is contrary to law and is hereby revoked and
rescinded.TheUniversityisorderedxxxtoresumeandproceedwiththeestablished
practiceofextendingtoqualifiedemployeesretirementbenefitsunderboththeCBA
andthePERAAPlan.
3.Theothermoneyclaimsaredenied.[21]

RulingoftheCourtofAppeals
Aggrieved,petitionerappealedthecasetotheCAviaaPetition
forReviewunderRule43oftheRulesofCourt.
OnSeptember25,2007,theCArenderedaDecision[22]finding
the rulings of the Voluntary Arbitrator supported by substantial
evidence. It also affirmed the nullification of the oneretirement
policyandtheMemorandumdatedAugust16,
_______________
[19]Rollo,pp.101102.
[20]Id.,atpp.131145pennedbyVoluntaryArbitratorFrancisV.Sobrevias.
[21]Id.,atpp.144145.
[22]CARollo,pp.268288.

607

2005onthegroundthattheseunilaterallyamendedtheCBAwithout
theconsentofrespondent.[23]Thus:
WHEREFORE,theinstantappealisDISMISSEDforlackofmerit.
SOORDERED.[24]
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Petitionermovedforreconsiderationbutthesamewasdeniedby
theCAinitsFebruary5,2008Resolution.[25]
Issues
Hence,thisrecoursebypetitionerraisingthefollowingissues:

a.
Whetherxxxthe[CA]committedgraveandpalpableerrorinsustaining
the Voluntary Arbitrators ruling that the Affidavits submitted by
Respondent WUPFSA are substantial evidence as defined by the rules and
jurisprudencethatwouldsubstantiatethatPetitionerWUPhaslongbeenin
thepracticeofgrantingitsemployeestwo(2)setsofRetirementBenefits.
b.
Whetherxxxthe[CA]committedgraveandpalpableerrorinsustaining
the Voluntary Arbitrators ruling that a university practice of granting its
employeestwo(2)setsofRetirementBenefitshadalreadybeenestablished
as defined by the law and jurisprudence especially in light of the illegality
andlackofauthorityofsuchallegedgrant.
c.
Whetherxxxthe[CA]committedgraveandpalpableerrorinsustaining
theVoluntaryArbitratorsrulingthatitisincumbentuponPetitionerWUP
toshow
_______________

[23]Id.,atpp.284and287.
[24]Id.,atp.288.
[25]Id.,atp.315.

608

proof that no Board Resolution was issued granting two (2) sets of
RetirementBenefits.
d.
Whetherxxxthe[CA]committedgraveandpalpableerrorinrevoking
the16August2005MemorandumofPetitionerWUPforbeingcontraryto
extantpolicy.[26]

PetitionersArguments
Petitioner argues that there is only one retirement plan as the
CBA Retirement Plan and the PERAA Plan are one and the same.
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[27] It maintains that there is no established company practice or

policy of giving two retirement benefits to its employees.[28]


Assuming, without admitting, that two retirement benefits were
released,[29] petitioner insists that these were done by mere
oversight or mistake as there is no Board Resolution authorizing
their release.[30] And since these benefits are unauthorized and
irregular, these cannot ripen into a company practice or policy.[31]
As to the affidavits submitted by respondent, petitioner claims that
theseareselfservingdeclarations,[32]andthus,shouldnotbegiven
weightandcredence.[33]
Inaddition,petitionerclaimsthattheMemorandumdatedAugust
16, 2005, which provides for the guidelines on the implementation
ofvacationandsickleavecreditsaswellas
_______________
[26]Rollo,pp.326327.
[27]Id.,atpp.341344.
[28]Id.,atpp.327348.
[29]Id.,atp.335.
[30]Id.,atpp.335341.
[31]Id.,atp.335.
[32]Id.,atp.328.
[33]Id.,atpp.327328.

609

vacationleavecommutation,isvalidbecauseitisinfullaccordwith
existingpolicy.[34]

RespondentsArguments
Respondentbeliestheclaimsofpetitionerandassertsthatthere
aretworetirementplansasthePERAARetirementPlan,whichhas
beenimplementedformorethan30years,isdifferentfromtheCBA
Retirement Plan.[35] Respondent further avers that it has always
beenapracticeofpetitionertogivetworetirementbenefits[36]and
thatthispracticewasestablishedbysubstantialevidenceasfoundby
boththeVoluntaryArbitratorandtheCA.[37]
As to the Memorandum dated August 16, 2005, respondent
asserts that it is arbitrary and contrary to the CBA and existing
practices as it added qualifications or limitations which were not
agreeduponbytheparties.[38]

OurRuling
ThePetitionisbereftofmerit.
TheNonDiminutionRulefoundinArticle100[39]oftheLabor
Code explicitly prohibits employers from eliminating or reducing
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thebenefitsreceivedbytheiremployees.Thisrule,however,applies
onlyifthebenefitisbasedonanexpress
_______________
[34]Id.,atpp.348351.
[35]Id.,atpp.368378.
[36]Id.,atp.378.
[37]Id.,atp.365.
[38]Id.,atpp.378382.
[39]ART. 100.PROHIBITION AGAINST ELIMINATION OR DIMINUTION

OFBENEFITS.NothinginthisBookshallbeconstruedtoeliminateorinanyway
diminish supplements, or other employee benefits being enjoyed at the time of
promulgationofthisCode.
610

policy, a written contract, or has ripened into a practice.[40] To be


consideredapractice,itmustbeconsistentlyanddeliberatelymade
bytheemployeroveralongperiodoftime.[41]
Anexceptiontotheruleiswhenthepracticeisduetoerrorin
theconstructionorapplicationofadoubtfulordifficultquestionof
law.[42]Theerror,however,mustbecorrectedimmediatelyafterits
discovery[43] otherwise, the rule on NonDiminution of Benefits
wouldstillapply.

Thepracticeofgivingtworetirement
benefitstopetitionersemployeesis
supportedbysubstantialevidence.
Inthiscase,respondentwasabletopresentsubstantialevidence
in the form of affidavits to support its claim that there are two
retirementplans.Basedontheaffidavits,petitionerhasbeengiving
tworetirementbenefitsasearlyas1997.[44]Petitioner,ontheother
hand, failed to present any evidence to refute the veracity of these
affidavits. Petitioners contention that these affidavits are self
serving holds no water. The retired employees of petitioner have
nothing to lose or gain in this case as they have already received
their retirement benefits. Thus, they have no reason to perjure
themselves. Obviously, the only reason they executed those
affidavitsistobringoutthetruth.Asweseeitthen,theiraffidavits,
corroborated by the affidavits of incumbent employees, are more
thansufficienttoshowthatthegrantingoftworetirementbenefitsto
retiring employees had already ripened into a consistent and
deliberatepractice.
_______________
[40]Central Azucarera De Tarlac v. Central Azucarera De Tarlac Labor Union

NLU,G.R.No.188949,July26,2010,625SCRA622,630631.
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[41]Id.
[42]Id.,atp.631.
[43]Id.
[44]CARollo,p.284.

611

Moreover,petitionersassertionthatthereisonlyoneretirement
planastheCBARetirementPlanandthePERAAPlanareoneand
the same is not supported by any evidence. There is nothing in
ArticleXVIoftheCBAtoindicateorevensuggestthatthePlan
referredtointheCBAisthePERAAPlan.Besides,anydoubtinthe
interpretation of the provisions of the CBA should be resolved in
favorofrespondent.Infact,petitionersassertionisnegatedbythe
announcement it made during the LMC Meeting on February 8,
2006 regarding its plan of implementing a oneretirement plan.
For if it were true that petitioner was already implementing a one
retirementpolicy,therewouldhavebeennoneedforsuchannounce
ment. Equally damaging is the lettermemorandum[45] dated May
11,2006,entitledSuggestionsonthedefenseswecanintroduceto
justify the abolition of double retirement policy, prepared by the
petitioners legal counsel. These circumstances, taken together,
bolsterthefindingthatthetworetirementpolicyisapractice.Thus,
petitioner cannot, without the consent of respondent, eliminate the
tworetirementpolicyandimplementaoneretirementpolicyasthis
wouldviolatetheruleonnondiminutionofbenefits.
As a last ditch effort to abolish the tworetirement policy,
petitionercontendsthatsuchpracticeisillegalorunauthorizedand
that the benefits were erroneously given by the previous
administration. No evidence, however, was presented by petitioner
tosubstantiateitsallegations.
Considering the foregoing disquisition, we agree with the
findings of the Voluntary Arbitrator, as affirmed by the CA, that
there is substantial evidence to prove that there is an existing
practice of giving two retirement benefits, one under the PERAA
PlanandanotherundertheCBARetirementPlan.
_______________
[45]Id.,atpp.207208.

612

TheMemorandumdatedAugust
16,2005iscontrarytotheexis
tingCBA.

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NeitherdowefindanyreasontodisturbthefindingsoftheCA
that the Memorandum dated August 16, 2005 is contrary to the
existingCBA.
Sections 1 and 2 of Article XII of the CBA provide that all
covered employees are entitled to 15 days sick leave and 15 days
vacationleavewithpayeveryyearandthatafterthesecondyearof
service, all unused vacation leave shall be converted to cash and
paid to the employee at the end of each school year, not later than
August30ofeachyear.
The Memorandum dated August 16, 2005, however, states that
vacation and sick leave credits are not automatic as leave credits
would be earned on a monthtomonth basis. This, in effect, limits
theavailableleavecreditsofanemployeeatthestartoftheschool
year. For example, for the first four months of the school year or
from June to September, an employee is only entitled to five days
vacation leave and five days sick leave.[46] Considering that the
Memorandum dated August 16, 2005 imposes a limitation not
agreeduponbythepartiesnorstatedintheCBA,weagreewiththe
CAthatitmustbestruckdown.
In closing, it may not be amiss to mention that when the
provisionoftheCBAisclear,leavingnodoubtontheintentionof
the parties, the literal meaning of the stipulation shall govern.[47]
However,ifthereisdoubtinitsinterpretation,it
_______________
[46]Rollo,p.107.
[47] Supreme Steel Corporation v. Nagkakaisang Manggagawa ng Supreme

Independent Union (NMSINDAPL), G.R. No. 185556, March 28, 2011, 646 SCRA
501,521.
613

should be resolved in favor of labor,[48] as this is mandated by no


lessthantheConstitution.[49]
WHEREFORE, the Petition is hereby DENIED. The assailed
September25,2007DecisionandtheFebruary5,2008Resolution
of the Court of Appeals in CAG.R. SP No. 97053 are hereby
AFFIRMED.
SOORDERED.
Carpio (Chairperson), Brion, Perez and PerlasBernabe, JJ.,
concur.
Petitiondenied,judgmentandresolutionaffirmed.
Notes.The principle of nondiminution of benefits is founded
ontheconstitutionalmandatetoprotecttherightsofworkersandto
promote their welfare and to afford labor full protection. (Eastern
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Telecommunications Philippines, Inc. vs. Eastern Telecoms


EmployeesUnion,665SCRA516[2012])
The different treatment accorded the second sentence (first
paragraph)ofSection12ofRA6758totheincumbentsasof1July
1989, on one hand, and those employees hired on or after the said
date, on the other, with respect to the grant of nonintegrated
benefits lies in the fact that the legislature intended to gradually
phaseoutthesaidbenefitswithout,however,upsettingitspolicyof
nondiminution of pay and benefits. (Aquino vs. Philippine Ports
Authority,696SCRA666[2013])
o0o
_______________
[48]Id.
[49]ArticleII,Section18oftheCprovides:

Section18.TheStateaffirmslaborasaprimarysocialeconomicforce.Itshall
protecttherightsofworkersandpromotetheirwelfare.

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