Dela Salle University v. Dela Salle University Employees Association
REITERATIONFacts
The Antecedents: The Dela Salle University (University) and the Dela Salle University Employees Association (Union) entered into a collective bargaining agreement (CBA) from December 23, 1986, to December 22, 1989. Following unsuccessful negotiations for a new CBA, the Union filed a Notice of Strike. After conciliation, five issues were resolved, and a partial CBA was executed, with the remaining six unresolved issues submitted to voluntary arbitration. Procedural History: Voluntary Arbitrator Buenaventura Magsalin rendered a decision on January 19, 1993. Both the University and the Union subsequently filed petitions for certiorari with the Supreme Court, assailing the arbitrator's decision for grave abuse of discretion. The Petition: The consolidated petitions saw the Solicitor General commenting, agreeing with the arbitrator on most points but disagreeing on the exclusion of College of St. Benilde employees. The University questioned the inclusion of computer operators and discipline officers in the bargaining unit, the exclusion of College of St. Benilde employees, the upholding of the union shop clause, the denial of the 'last-in-first-out' method for retrenchment, the denial of further salary increases, and the denial of union demands for deloading of the union president, improved leave benefits, and indefinite union leave. The Union questioned the exclusion of College of St. Benilde employees, the denial of the 'last-in-first-out' method, the finding regarding the multi-sectoral committee determining salary increases, the limitation of salary increases to 70% of incremental tuition proceeds, and the denial of proposals for the union president's workload and leave benefits.
Issue(s)
Whether the voluntary arbitrator committed grave abuse of discretion in including computer operators and discipline officers within the bargaining unit and excluding College of St. Benilde employees. Whether the voluntary arbitrator committed grave abuse of discretion in upholding the union's demand for a union shop clause. Whether the voluntary arbitrator committed grave abuse of discretion in denying the union's proposal for the 'last-in-first-out' method in cases of retrenchment. Whether the voluntary arbitrator committed grave abuse of discretion in ruling that the University could not be required to grant a second round of wage increases based on its proposed budget. Whether the voluntary arbitrator committed grave abuse of discretion in denying the union's proposals on deloading of the union president, improved leave benefits, and indefinite union leave with pay. Whether the voluntary arbitrator committed grave abuse of discretion in finding that the multi-sectoral committee is the legitimate group determining annual salary increases and fringe benefits. Whether the voluntary arbitrator committed grave abuse of discretion in ruling that the 70% share in incremental tuition proceeds is the only source of salary increases and fringe benefits.
Ruling
The Supreme Court partially granted the petitions, affirming in part and modifying in part the decision of the voluntary arbitrator. The case was remanded for definite resolution on the issue of salary increases based on externally audited financial statements.
Ratio Decidendi
On the inclusion/exclusion of employees in the bargaining unit: The Court affirmed the voluntary arbitrator's ruling that computer operators and discipline officers are not confidential employees and should be included in the bargaining unit. The Court found that the previous exclusion in the 1986 CBA did not preclude re-negotiation. Regarding the College of St. Benilde employees, the Court affirmed their exclusion, finding that the College and the University have separate juridical personalities and no sufficient evidence justified piercing the corporate veil. The Court noted that the Solicitor General's opinion differed on this point, arguing for their inclusion based on inter-organizational coordination and shared policies. On the union shop clause: The Court affirmed the voluntary arbitrator's ruling for the inclusion of a union shop provision in addition to the existing maintenance of membership clause. The Court clarified that while the right to join a union includes the right not to join, this protection is withdrawn by law when parties agree on a closed shop or union shop, which is recognized under Article 248(e) of the Labor Code as amended. The University's reliance on Victoriano vs. Elizalde Rope Workers' Union was deemed misplaced as that case dealt with the right to refrain from joining, which is limited by union security agreements. On the 'last-in-first-out' method for retrenchment: The Court agreed with the voluntary arbitrator that the University has the management prerogative to adopt valid and equitable grounds for termination or transfer, such as performance and qualifications, rather than adhering to the 'last-in-first-out' method proposed by the Union. The Court reiterated that while workers' participation in policy-making is enshrined in the Constitution, it does not grant the union the right to dictate the employer's choice of employees for retrenchment. The exercise of management prerogative, as long as it is not abusive, is recognized. On salary increases and financial capacity: The Court found that the voluntary arbitrator committed grave abuse of discretion in ruling that the University could not be required to grant a second round of wage increases based solely on its proposed budget. The Court emphasized that the standard proof of a company's financial standing is its financial statements duly audited by independent and credible external auditors. A proposed budget is not a reliable indicator of financial condition and is susceptible to abuse. Therefore, the issue was remanded for resolution based on audited financial statements. On union demands for deloading, leave benefits: The Court agreed with the voluntary arbitrator's rejection of the Union's demands for deloading of the union president's workload, improved leave benefits, and indefinite union leave with pay. The Court found no justifiable reason to grant these demands, noting that unionism is not a valid reason for workload reduction and that there was insufficient justification for an indefinite leave. The distinction between rank-and-file employees and faculty members regarding professional advancement was also considered. On the multi-sectoral committee and source of funds: The Court found no grave abuse of discretion regarding the voluntary arbitrator's finding that the multi-sectoral committee determines salary increases. However, it qualified that any determination by this committee must be based on duly audited financial statements, consistent with the ruling on the fourth issue. On the 70% share in incremental tuition proceeds as the sole source of increases: The Court deemed the issue regarding the 70% share in incremental tuition proceeds as the sole source of increases unnecessary and irrelevant due to the lack of evidence presented and the rulings on other issues.
Main Doctrine
The Court affirmed in part and modified in part the decision of the voluntary arbitrator, clarifying the scope of bargaining units, the validity of union shop clauses, the limits of management prerogative in retrenchment, and the proper basis for determining financial capacity to grant salary increases.