UNIVERSITY OF THE EAST, PETITIONER, VS. UNIVERSITY OF THE EAST FACULTY ASSOCIATION (UEFA) AND THE PRESIDENTIAL EXECUTIVE ASSISTANT, RESPONDENTS.

On September 30, 1982,
the Second Division of this Court rendered a Decision (Barredo, J., ponente, concurred in by Guerrero, De Castro,
Concepcion, Jr., Abad
Santos and Escolin, JJ.) in the present
case.  On November 26, 1982, the University of the East (UE) and
the University of the East Faculty Association (UEFA) filed a Joint
Manifestation to comply with and to implement the above-mentioned Decision,
pursuant to a “Mechanics of Implementation” duly signed by both
parties.

Negotiations were conducted. 
However, as the parties could not come to an agreement on the proper
computation of the amount that may be due under the above decision, on June 19,
1984, private respondent UEFA filed a Motion
for Execution alleging that there was “money due to new teachers under the
decision” and a reimbursable
amount allegedly representing “differential pays . . . unjustly deducted
from teacher’s increases under PD 451.”

In an “Opposition to Motion for Execution,” UE stated
that there was no residue at all but an overpayment of about P7.5 million.  The petitioner maintained that since the
total sixty (60%) percent incremental proceeds from three tuition-fee increases
amounted to P65,807.263.00 and the actual disbursement to the teaching and
non-teaching employees amounted to P73,308,756.00, it was alleged that there
was an overpayment.

On August 15, 1984,
the Second Division issued a Resolution ordering the City Sheriff of Manila to
execute paragraph (3) of the decision of the Office of the President. 
Two days later, on August 17, 1984, the corresponding Writ of Execution was
issued.

On September 12, 1984,
UE properties consisting of blackboards, classroom chairs, tables, bookshelves
and others were sold on execution for P250,000.00 to UEFA as the highest
bidder.  In two (2) separate execution sales
conducted on October 29, 1982
and December 11, 1984,
real properties of UE consisting of its Recto and Caloocan campuses were sold for
P25,228,806.00 to UEFA as the highest bidder. 
On October 24, 1985,
even as the certificates of sale had not yet been registered with the Register
of Deeds, UE paid the redemption price of P22,690,007.20 for some of the real
properties.  In the meantime, however, UE
has been filing various pleadings all of which question the correctness of the
resolution granting execution and pointing out alleged irregularities in the
execution proceedings.  UE likewise
claims that due to these errors and irregularities, it had paid the faculty
association more than what is due under the decision of September 30, 1982.  It thus prayed for “equitable relief of
set-off.”

In its “Comment with Motion for Further Execution”
private respondent UEFA traversed all the arguments of petitioner
University.  It further contended that if there was any
overpayment, it was altogether a new
cause of action which had to be ventilated in a trial court.  The faculty association likewise prayed for
the issuance of a writ of
execution in satisfaction of their claim for P38,312,917 allegedly representing
unincorporated salary increases, fringe benefits, and the faculty share in
other fees collected by the university.

On May 5, 1987,
the City Sheriff of Manila submitted to this Court the Sheriff’s Return on the
conduct of the execution proceedings.

We have before Us two opposing claims of the
parties-litigants:  1) UE’s claim of overpayment; and 2) UEFA’s
claim of underpayment.

This labor dispute traces its origin in a bargaining deadlock
between the UE and the UEFA for the renewal of their collective bargaining
agreement for the period June 1, 1978
to May 31, 1981.  Consequently, the judgment, to be valid, must
be deemed to refer only to what the contractual rights of the parties should be
for the given period.  Corollarily, any writ of execution in this case must
likewise be so limited.  That is,
execution must be limited to the enforcement of these contractual rights.  A writ of execution purporting to execute
anything beyond this would be void for want of authority.  For any other cause of action which was
already existent at the time the Ministry of Labor assumed jurisdiction, or
which may have arisen in the interregnum, even if intimately related to the
original cause of action, would be outside the jurisdiction already acquired
unless the pleadings were amended or supplemented.

The dispositive portion of the Court’s
decision which, on December 7, 1982
became final, consists of three parts, to wit:

1.  that there is no need for
(the Court) to disturb paragraph 1 of the Malacanang
decision because it is, after all, not inconsistent with the position of petitioner (underscoring supplied);

2.  that allowances and
benefits should be chargeable to the return to investment referred to in the
second purpose of Section 3(a), if the schools should happen to have no other
resources than incremental proceeds of authorized tuition fee increases, which
is a question of fact which can be determined by the proper authorities as
controversies may actually arise in relation thereto; and,

3.  that paragraph 3 of the Malacanang decision is also affirmed.

Paragraph 1 of the Malacanang decision referred to above reads:

1.  That the award of the P1.30 salary increase,
as modified
by the Agreement of the Parties of November 16, 1979, should, from June 1, 1978
to May 31, 1979, be treated as resulting
from collective bargaining negotiation; and that for the succeeding schoolyears, the said salary increase
together with the amount corresponding to a faculty members’ (sic) share in the
‘residue’ of the 60% incremental proceeds from the 1979-approved tuition fee
increases under Presidential Decree No. 451, should be treated as being in full
compliance with the said Decree; (underscoring supplied)

The position of UE, which
the Court considered as not inconsistent with the above-quoted portion of the Malacanang decision, was that salary increases, even
those secured through collective bargaining,
are chargeable against the sixty (60%) percent share of the employees in
tuition fee increases.

The decision of this Court itself stated:  “We read the latest Malacanang
decision to mean that increase of salaries even those secured
by collective bargaining may be charged to
the sixty (60%) percent incremental proceeds of MEC authorized tuition fee
increases.  That is precisely the stand
of petitioner.”

We thus rule that under this Court’s decision, salary increases,
even those secured through collective bargaining, are chargeable against the
sixty (60%) percent.

On the second component
of the dispositive portion, the dispute between the
parties is with respect to its actual implementation.  The University claims that certain items
which it had already paid to the teachers constitute salary increases
and are, therefore, deductible from the teachers’ sixty (60%) percent
share.  Whether these payments indeed
constitute salary increases or
allowances and benefits can best be determined, not by how said items
are called, but by the manner they were treated.  If the amounts were incorporated into the
basic salary, then such payments were intended to be salary increases;
and hence, deductible from the sixty (60%) percent.  Otherwise, they were intended to be allowances
and benefits; hence, not so deductible.  Or, as the Malacanang decision described them, allowances are
temporary while salary increases are permanent. 
[Malacanang decision, p. 10.]

Paragraph 3 of the Malacanang decision,
which was previously ordered to be executed, refers to the right of new
faculty members “to share or participate in the sixty (60%) percent incremental proceeds from the
1974, 1976 and 1977 and/or 1979-approved tuition fee increases under PD 451
assessed and collected in the school-year of their employment and every
school-year thereafter during the period of their employment as such.”

To fully understand the
legal effect of this portion of the decision, We quote the following portion:

A tuition fee increase under PD 451 is of permanent character as it is
tacked to the 1974 tuition fee and is effected and collected in the school-year
of approval and every school-year thereafter. 
Thus, the tuition fee increases approved in 1974, 1976 and 1977 were
assessed and collected from the students enrolled in 1978, including the 60%
incremental proceeds allocated under PD 451 for the salary increases of school
teachers and employees.

Inasmuch as said tuition fee increases are permanent components of
the basic tuition fees and are collected from the students enrolled in the
current school-year, the 1978 new teachers, whether replacement or additional,
should share in the 60% incremental proceeds from such tuition fee increases
although they may have been approved in 1974, 1976 or 1977.

Consistently, therefore,
with the nature of the case — a
bargaining deadlock case — the
third paragraph of the Malacanang decision still
referred to what the contractual rights of the parties from 1978 to 1981 would
be.  The legal import of the third
paragraph is that a new faculty member in 1978 would have for his
starting pay, not the rate in 1974, but rather the 1974 rate plus whatever
share a teacher of the same category was entitled to
get under the three tuition fee increases. 
This increased basic pay, in turn, is the basis for computing
salary-related benefits such as
overtime and premium pay, holiday pay, vacation and sick leave pay, etc.

The decision was not granting the 1978 new teachers participation
in 1974, 1976 and 1977 tuition fee increases collected during those years.  To do so would have violated the time-honored
principle of “no work, no pay”. 
In fact, UEFA’s claim of underpayment with respect
to the 1974, 1976 and 1977 salary increases under PD 451 was rightly dismissed
by the Office of the President, as it “is unmistakably a labor standard case which may be,
or should have been prosecuted before the appropriate authority of primary jurisdiction
. . ., and not a labor relations dispute
like the instant case,” and also because “such claim for underpayment
was not one of the issues raised in this case or in this appeal, and therefore
could not have been the subject of award or grant in the questioned decision,
which in fact does not make such an award or grant.”

It was also pointed out that “in the questioned decision,
there is no finding that the salary increases given to UEFA’s
members in 1974, 1976 and 1977 were not in faithful or full compliance with PD
451.  Neither is there a specific finding that UE had made
some unauthorized or illegal deductions from the said salary increases.  If there was a discussion in the questioned decision on such deductions, it
was made in general statements without any specific finding that UE had
actually made illegal deductions from the said salary increases in 1974, 1976
and 1977 . . . .”

The parties themselves recognized that claims for underpayment of
salary increases under PD 451 in the years 1974, 1976 and 1977 were not
properly submitted for adjudication to the Labor Arbiter, the Minister of
Labor, the Office of the President and then to this Court, when they stated in
their agreed Mechanics of Implementation:

6.  Respondent UEFA reserves its right to take
proper legal steps to pursue its claim with respect to residues, if any, of the
incremental proceeds from tuition fee increases granted in 1974, 1976 and 1977
under PD 451; petitioner likewise reserves its right to contest said claim in
proper proceedings;

The City Sheriff of Manila in executing paragraph 3 of the Malacanang decision obviously went beyond said portion of
the decision.  First, he executed not
only paragraph 3 of the decision.  In his
own words, he executed “the unsatisfied portion of the affirmed decision
of the Office of the President which includes paragraph 3.”

Second, he also unilaterally awarded to the faculty members
amounts corresponding to the faculty members’ share in tuition fee increases
collected from 1974 to 1983!

A
recomputation is therefore necessary for the
proper execution of the judgment, and before We can determine whether there was
indeed an overpayment, as claimed by UE, or an underpayment, as claimed by the
UEFA.  As this involves an examination of
long accounts, a commissioner with the necessary competence on labor matters is
needed.

WHEREFORE, the Court hereby orders the Department of
Labor and Employment, to recompute conformably with
this resolution, how much is due to the UEFA under the September
30, 1982 decision,
and to submit such computation within fifteen (15) days from receipt of this
Resolution.  Meanwhile, both motions of
UE and UEFA to withdraw the deposit now in trust with the bank are hereby
DENIED.  The recomputation
shall be based on the following guidelines:

A. As to the
first part of the Dispositive
Portion –

1.  The P1.30 salary increase shall be charged
against the sixty (60%) percent share of the faculty members for the entire
period from June 1, 1978 to May 31, 1981.

2.  The residue of the sixty (60%) percent
incremental proceeds from the 1979-approved tuition fee increases shall be
incorporated into the basic salary.

B. As to the
second part of the Dispositive
Portion –

1.  Allowances and benefits during the period
shall not be charged against the sixty (60%) percent.

2.  Salary increases whether mandated by law or
secured by collective bargaining shall be charged against the share of the
teachers in the sixty (60%) percent.

3.  The payments made by UE shall be charged
against the teachers’ share in the sixty (60%) percent only if they constitute
salary increases.

C. As to the
third part of the Dispositive
Portion –

1.  The starting pay of new teachers appointed
from June 1, 1978 onwards
shall be the hiring rate in 1974 increased by the share of a teacher
of the same category in the 1974, 1976 and 1977-approved tuition fee increases.

2.  This increased basic pay shall be the basis
for computing salary-related benefits.

SO ORDERED.

Teehankee, C.J., Yap, Melencio-Herrera, Gutierrez, Paras,
Feliciano, Gancayco, Padilla, and Bidin, JJ., concur.

Fernan, J., no part. 
Took a position on this issue before appointment to the court.

Narvasa, J., no part. 
Prior public statement made on the issue before appointment to the
court.

Cruz, J., no part, as a member of the UE faculty affected by the outcome of the
case.

Sarmiento J., no part.  The President of the
petitioner association appeared as my counsel in a case.