University of the East v. University of the East Employees' Association
REITERATIONFacts
The Antecedents: Petitioner University of the East (UE) is an educational institution, and respondent University of the East Employees' Association (UEEA) is a labor union of its rank-and-file employees. Prior to school year (SY) 1983-1984, UE distributed 70% of the incremental proceeds from tuition fee increases based on the average number of academic and non-academic personnel. This scheme was formalized in an Agreement dated October 18, 1983. However, starting SY 1994-1995, UE unilaterally changed the distribution formula to a percentage of salary. UEEA protested this change, citing the previous practice and a Tripartite Agreement. A tripartite meeting was held on June 19, 1995, where it was agreed that the distribution would be based on a percentage of salary. Procedural History: On April 27, 1999, UEEA filed a complaint before the National Labor Relations Commission (NLRC) for non-payment/underpayment of their share in tuition fee increases. The Labor Arbiter (LA) ruled in favor of UEEA, ordering UE to pay a substantial amount. The NLRC initially dismissed UE's appeal and denied its motion for reconsideration. However, upon a second motion for reconsideration filed by UE, the NLRC reversed its earlier ruling, upholding UE's distribution scheme. UEEA then filed a petition with the Court of Appeals (CA), which set aside the NLRC's decision and reinstated the LA's ruling, holding that UE's second motion for reconsideration was a prohibited pleading and the NLRC's earlier resolution had become final and executory. The Petition: UE filed a petition for review before the Supreme Court, assailing the CA's decision and resolution, primarily arguing that the CA erred in declaring its second motion for reconsideration as a prohibited pleading and in ruling that the change in the distribution scheme was a diminution of benefits.
Issue(s)
Whether or not UE's second motion for reconsideration before the NLRC is a prohibited pleading. Whether or not the change in the scheme of distribution of the incremental proceeds from tuition fee increase is a diminution of benefit. Whether or not UEEA's claim has prescribed.
Ruling
The Supreme Court granted the petition, reversed and set aside the decision and resolution of the Court of Appeals, and reinstated the Decision of the National Labor Relations Commission dated February 28, 2005. The Court held that the change in the distribution scheme was not a diminution of benefits and that UEEA's claim had prescribed.
Ratio Decidendi
On the issue of the second motion for reconsideration being a prohibited pleading: The Court acknowledged that a second motion for reconsideration is generally a prohibited pleading. However, it reiterated that procedural rules are designed to secure substantial justice and can be suspended in cases of extraordinarily persuasive reasons, such as when a decision is a patent nullity. The Court found UE's arguments regarding prescription and the merits of the case to be persuasive enough to warrant the allowance of the second motion for reconsideration, emphasizing that technical rules should not frustrate justice. The CA's strict adherence to the rule without considering the substantive merits of the case was deemed erroneous. On the issue of diminution of benefits: The Court held that the change in the distribution of the 70% incremental proceeds from tuition fee increase from equal sharing to percentage of salaries was not a diminution of benefits. It clarified that the principle against diminution of benefits applies only if the grant is founded on an express policy or has ripened into a consistent and deliberate practice over a long period. The Court found that the distribution scheme based on equal sharing had not ripened into such a practice, especially since the law (R.A. No. 6728) is silent on the manner of distribution, vesting discretion upon school authorities. The Court noted that the distribution could be across-the-board, for merit increases, or for allowances, as long as it benefits the personnel. The October 18, 1983 Agreement was also deemed superseded by the subsequent tripartite meeting. On the issue of prescription: The Court agreed with UE that UEEA's right to question the distribution of the incremental proceeds for SY 1994-1995 had prescribed. Citing Article 291 of the Labor Code, which mandates that money claims arising from an employer-employee relationship must be filed within three years from the accrual of the cause of action, the Court determined that the cause of action accrued during the tripartite meeting on June 19, 1995, where the distribution scheme was discussed. UEEA filed its complaint only on April 27, 1999, which was more than three years later, thus barring its claim.
Main Doctrine
The distribution of incremental proceeds from tuition fee increases, if not based on an express policy or a long, consistent, and deliberate practice, does not ripen into a vested right that cannot be changed. Furthermore, claims arising from such distribution are subject to prescription.