Liberty Flour Mills Employees v. Liberty Flour Mills, Inc.
REITERATIONFacts
The Antecedents: Respondent Philippine Labor Alliance Council (PLAC) and respondent Liberty Flour Mills, Inc. entered into a three-year collective bargaining agreement (CBA) effective January 1, 1974, providing for wage increases and a union shop clause requiring membership in good standing for continued employment. PLAC filed a complaint for non-payment of emergency cost of living allowance under P.D. No. 525. Petitioners, who were organizing a new union, also filed a similar complaint. Subsequently, Evaristo and Biascan, after organizing a new union, filed a petition for certification election. PLAC expelled them for disloyalty and demanded their dismissal, which the company granted on May 20, 1975. The claims for emergency allowance and the termination of Evaristo and Biascan were consolidated for compulsory arbitration. Procedural History: The claims for emergency allowance were initially referred to voluntary arbitration, which dismissed the same on the ground that the allowances were absorbed by the wage increases. This decision was ultimately consolidated with the termination case and heard by Labor Arbiter Apolinario N. Lomabao, Jr. The National Labor Relations Commission (NLRC) affirmed the labor arbiter's decision dismissing the employees' claim for emergency allowance for lack of jurisdiction and modified it by disallowing the award of back wages to petitioners Policarpio Biascan and Antonio Evaristo. A motion for reconsideration was denied. The Petition: Petitioners sought certiorari against the NLRC resolution, faulting it for affirming the dismissal of their claim for emergency allowance due to lack of jurisdiction and for modifying the decision by disallowing back wages for Evaristo and Biascan.
Issue(s)
Whether the NLRC committed grave abuse of discretion in affirming the labor arbiter's dismissal of the claim for emergency allowance for lack of jurisdiction, and whether the voluntary arbiter's decision on the absorption of emergency allowance by wage increases was final and unappealable by the NLRC. Whether the wage increases stipulated in the CBA absorbed the emergency cost of living allowance mandated by P.D. No. 525. Whether the union shop clause in the CBA was validly invoked to dismiss Evaristo and Biascan. Whether Evaristo and Biascan are entitled to back wages despite their dismissal under the union shop clause.
Ruling
The petition is DISMISSED. The resolution of the NLRC is affirmed.
Ratio Decidendi
On the NLRC's jurisdiction and the finality of the voluntary arbiter's decision: The Court held that while the NLRC correctly noted that decisions of voluntary arbitrators are generally final and unappealable under Article 262-A of the Labor Code, this finality does not preclude review by the Supreme Court. The Court reiterated its stance in Oceanic Bic Division (FFW) v. Romero and Mantrade/FMMC Division Employees and Workers Union v. Bacungan, stating that it can take cognizance of petitions questioning decisions of administrative agencies, including voluntary arbitrators, where want of jurisdiction, grave abuse of discretion, violation of due process, denial of substantial justice, or erroneous interpretation of the law are raised. Therefore, the NLRC erred in dismissing the claim for emergency allowance solely on the ground of lack of jurisdiction over the voluntary arbiter's decision, as the Supreme Court itself could examine the validity of the voluntary arbiter's finding. On the absorption of emergency allowance by wage increases: The Court ruled that the wage increases provided in the CBA did absorb the emergency cost of living allowance required by P.D. No. No. 525. The CBA explicitly stated in Section 2 that the stipulated wage increases would be considered compliance with any statutory increase in minimum wage, including allowances, "as far as it will go." This provision, read in conjunction with Section 6 of the Interpretative Bulletin on LOI No. 174, indicated that benefits given by employers could be treated as substantial compliance with minimum standards. Since the company fell under the category requiring a minimum monthly allowance of P50.00, and the CBA's wage increases (P60.00 for 1974, P90.00 for 1975, P120.00 for 1976, based on 30 days) exceeded this minimum, the allowances were deemed absorbed. The Court clarified that Section 15 of the implementing rules of P.D. No. 525 did not prevent such absorption, as it only meant that benefits more favorable than the prescribed allowances could still be agreed upon or could not be diminished if already granted, and did not sanction the diminution of existing benefits. On the validity of the union shop clause and dismissal of Evaristo and Biascan: The Court found that the dismissal of Evaristo and Biascan was justified under the union shop clause of the CBA. The NLRC's conclusion that the dismissal was premature because the CBA had not yet been certified was erroneous. The Court, citing Tanduay Distillery Labor Union v. NLRC, held that the certification of a CBA by the Bureau of Labor Relations (BLR) is not essential for its validity and enforceability between the parties. A CBA becomes effective upon being duly entered into and signed. In this case, the CBA was certifiable and was indeed certified on April 11, 1975. Evaristo and Biascan were dismissed on May 20, 1975, after the CBA's certification. Their disaffiliation from PLAC in March 1975 rendered them subject to dismissal under the union shop clause, which requires membership in good standing for continued employment. The Court emphasized the State's policy to promote unionism and the validity of union shop and closed shop stipulations as means to encourage worker participation and support for their chosen labor union. On the entitlement of Evaristo and Biascan to back wages: Since the dismissal of Evaristo and Biascan was valid under the union shop clause, they are not entitled to back wages.
Main Doctrine
Wage increases stipulated in a collective bargaining agreement can absorb and be considered as compliance with statutory emergency cost of living allowances, provided the agreement specifies that such increases cover statutory wage adjustments. Dismissal based on a union shop clause is valid if the collective bargaining agreement containing such clause was duly entered into and signed by the parties, even if not yet certified by the Bureau of Labor Relations.