Mindanao Terminal v. Confessor
REITERATIONFacts
The Antecedents: Petitioner Mindanao Terminal and Brokerage Service, Inc. (Company) and respondent Associated Labor Unions (Union) entered into a five-year collective bargaining agreement (CBA) effective August 1, 1989. During the third year, negotiations for the fourth and fifth years led to a deadlock on issues including wages, leaves, hospitalization, retirement, and signing bonus. The Union filed a notice of strike. Subsequently, a conference called by the National Conciliation and Mediation Board (NCMB) resulted in an agreement on most issues, including wage increases of P3.00/day for the fourth year and P3.00/day for the fifth year, leaving only retirement unresolved. This retirement issue was also settled on January 14, 1993. Procedural History: Following the settlement, the Company asserted that the agreed wage increases should be creditable against future mandated increases and should not be retroactive. The Union again filed a notice of strike. The NCMB's conciliation efforts failed, prompting the Company to petition the Secretary of Labor and Employment (Secretary of Labor) to assume jurisdiction. The Secretary of Labor assumed jurisdiction on March 10, 1993, and ordered the parties to submit position papers. On May 14, 1993, the Secretary of Labor issued an order declaring the wage increases not creditable as compliance with future mandated increases and mandating retroactivity: the fourth year increase to August 1, 1992, and the fifth year increase to August 1, 1993. The Company sought reconsideration, which was denied. The Petition: The Company filed a petition for certiorari, alleging grave abuse of discretion by the Secretary of Labor in making the fourth year wage increase retroactive, arguing that the automatic renewal clause of Article 253-A of the Labor Code was inapplicable as it was beyond the six-month period. The Company also contested the non-creditable nature of the wage increases.
Issue(s)
Whether the wage increases agreed upon during CBA renegotiations are creditable as compliance with future mandated wage increases. Whether the Secretary of Labor gravely abused her discretion in ordering the retroactivity of the fourth and fifth year wage increases. Whether the agreement on CBA renegotiations was entered into within the six-month period provided by Article 253-A of the Labor Code.
Ruling
The petition is dismissed for lack of merit. The Supreme Court affirmed the order of the Secretary of Labor and Employment.
Ratio Decidendi
On the creditability of wage increases: The Court held that wage increases derived from a CBA are generally considered over and above any mandated increases by law or wage order, unless expressly stipulated otherwise. The Company's belated claim for creditability, raised only when the six-month period was nearing its end, was deemed to be in bad faith and contrary to the principle of good faith required in collective bargaining. The Court emphasized that if the Company intended for the wage increases to be creditable against future mandated increases, it should have expressly stated this reservation during the early stages of the CBA negotiations. The ruling in Meycauayan College v. Drilon was cited to support the principle that employee benefits from law are exclusive of benefits from negotiation unless otherwise provided. On the retroactivity of wage increases: The Court affirmed the Secretary of Labor's finding that the agreement on CBA renegotiations was perfected on January 14, 1993, which was within the six-month period following the expiration of the third year of the CBA, as contemplated by Article 253-A of the Labor Code. The Court clarified that an "agreement" under Article 253-A refers to a "meeting of minds," which can be oral or written, and does not require a signed CBA to be effective. The fact that the parties reached a meeting of minds on all issues by January 14, 1993, even before the formal signing of the CBA, satisfied the requirement for retroactivity. The Court also noted that the Secretary of Labor assumed jurisdiction over the dispute at the Company's request, and the industry was vital to the national interest, making the order akin to an arbitral award under Article 263(g) of the Labor Code, which can be made retroactive. On the application of Article 253-A of the Labor Code: The Court clarified that while the Secretary of Labor correctly noted that the case was beyond the scope of the "automatic renewal clause," this did not preclude the application of the provision on retroactivity of agreements entered into within six months from the expiry of the term of other provisions. The key was the "meeting of the minds" on January 14, 1993, which occurred within the statutory period, thus entitling the agreement to retroact to the date of expiry of the third year of the CBA, or as ordered by the Secretary of Labor.
Main Doctrine
Wage increases agreed upon during CBA renegotiations, even if settled within six months from the expiration of the term of other provisions, shall retroact to the date of the agreement or the assumption of jurisdiction by the Secretary of Labor, unless otherwise stipulated. Such increases are generally not creditable as compliance with future mandated wage increases unless expressly agreed upon.