Albay Electric Cooperative, Inc. v. Albay Electric Cooperative Labor Employees Organization
REITERATIONFacts
The Antecedents: Albay Electric Cooperative, Inc. (ALECO) faced severe financial distress, with substantial payables to various creditors. To rehabilitate, ALECO proposed Private Sector Participation (PSP), requiring employees to tender courtesy resignations but with separation pay and rehiring priority. The Albay Electric Cooperative Labor Employees Organization (ALEO), the employees' collective bargaining agent, expressed grievances over the PSP conditions and filed a notice of strike. ALECO's employees voted for a strike, and ALECO proceeded with PSP, awarding the concession to San Miguel Power Holdings Corporation. Subsequently, ALECO issued Notices of Retrenchment. ALECO and ALEO jointly requested the Secretary of Labor to assume jurisdiction over the dispute, which the Secretary did on January 10, 2014, issuing a Return-to-Work Order. Procedural History: The Secretary of Labor, in a Resolution dated April 29, 2016, upheld the validity of the retrenchment but ordered ALECO to pay backwages and other benefits from January 10, 2014, until the resolution's finality, and separation benefits per the Collective Bargaining Agreement (CBA). Partial reconsiderations were denied. ALECO filed a petition for certiorari with the Court of Appeals (CA). In the interim, the Secretary of Labor issued a Resolution dated January 17, 2018, directing execution with a modified backwages period. The CA, in its August 10, 2018 Decision, affirmed the Secretary of Labor's resolutions but modified the backwages computation period to run from January 10, 2014, to April 29, 2016, and ordered 6% interest. The Petition: ALECO assails the CA's Decision and the Secretary of Labor's January 17, 2018 Resolution, arguing against the propriety and computation of backwages, questioning the inclusion of certain employee groups, and disputing the disallowance of deductions from separation pay. ALEO, in its comment, counters that backwages are consistent with the Labor Code and should accrue until December 19, 2016, and challenges the CA's affirmation of the retrenchment's validity and denial of its claims for damages.
Issue(s)
Whether ALECO can assail the January 17, 2018 Resolution of the Secretary of Labor through the instant Petition. If ALECO can assail the January 17, 2018 Resolution: Whether the computation of monetary award affirmed in the January 17, 2018 Resolution used the correct base amount, whether the January 17, 2018 Resolution was correct in including the three groups of employees in the award of backwages, and whether the January 17, 2018 Resolution was correct in disallowing deductions from the separation pay. Whether ALECO can still challenge the validity of the retrenchment of ALECO's employees and raise anew its claims for damages and attorney's fees. Whether the CA erred in sustaining the Secretary of Labor's award of backwages. Whether the CA erred in reducing the period for which ALECO is liable for payment of backwages.
Ruling
The Supreme Court denied the Petition for Review on Certiorari, affirming the Court of Appeals' Decision dated August 10, 2018. The records were remanded to the Labor Arbiter for proper computation of the award.
Ratio Decidendi
On ALECO's challenge to the January 17, 2018 Resolution: The Court ruled that decisions of the Secretary of Labor under the Labor Code must be challenged via a petition for certiorari under Rule 65 before the CA. Since the instant petition assails the CA's decision on the April 29, 2016 Resolution, the January 17, 2018 Resolution, being an execution order relative to the main resolution, is rendered moot if the main resolution is modified or reversed. However, the Court noted that the effectivity of the January 17, 2018 Resolution depends on the disposition of the present petition. On the specific arguments regarding the base amount, inclusion of employee groups, and disallowance of deductions: The Court found no merit in ALECO's specific arguments regarding the base amount, inclusion of employee groups, and disallowance of deductions, as these were procedural matters that should have been raised via certiorari. On ALEO's challenge to the retrenchment and claims for damages: The Court held that ALEO could not assail the validity of the retrenchment or raise claims for damages and attorney's fees in the present proceedings. The CA correctly found that the April 29, 2016 Resolution, concerning these matters, had already become final. The doctrine of finality of judgment precludes modification of such rulings, and no exceptions were present in this case. On the CA's sustaining of the award of backwages: The Court found ALECO's reliance on Manggagawa ng Komunikasyon sa Pilipinas v. PLDT misplaced. That case did not prohibit backwages outside illegal dismissal cases, and the ruling was limited to reinstatement after a finding of valid dismissal. The Court affirmed that the Secretary of Labor has the authority to award backwages even in the absence of illegal dismissal, particularly when an assumption of jurisdiction order is issued under Article 278(g) of the Labor Code. The award of backwages serves as satisfaction for the employer's obligation to readmit employees and pay their salaries and benefits, arising from the assumption order. On the CA's reduction of the backwages period: The Court clarified that the status quo mandated by an assumption order extends from its issuance until the Secretary of Labor's resolution of the dispute. In this case, the obligation to maintain the status quo, which includes readmitting employees or paying them their salaries and benefits, arose on January 10, 2014. ALECO's claim of compliance was belied by the fact that returning employees were confined without actual work and their salaries were not paid. Therefore, backwages were awarded to cover the period from January 10, 2014, until the Secretary of Labor's resolution on April 29, 2016, consistent with the ruling in San Fernando Coca-Cola Rank-and-File Union (SACORU) v. Coca-Cola Bottlers Philippines, Inc. (CCBPI). The Court found no error in the CA's affirmation of this period.
Main Doctrine
The Secretary of Labor's assumption of jurisdiction over a labor dispute, pursuant to Article 278(g) of the Labor Code, mandates the employer to maintain the status quo by readmitting striking employees under the same terms and conditions prevailing before the strike. Failure to do so, including the non-payment of wages and benefits during the period of reinstatement obligation, justifies the award of backwages as satisfaction of the employer's obligation, not merely as a penalty for non-compliance.