MEYCAUAYAN COLLEGE, PETITIONER, VS. HONORABLE FRANKLIN M. DRILON, IN HIS CAPACITY AS SECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT AND MEYCAUAYAN COLLEGE FACULTY AND PERSO…

The pivotal issue in this petition for certiorari is
whether increases in employees’ salaries resulting from the implementation of
presidential decrees and wage orders, which are over and above the agreed
salary scale contracted for between the employer and the employees in a
collective bargaining agreement, preclude the employees from claiming the
difference between their old salaries and those provided for under said salary
scale.

Petitioner is a private educational institution duly organized
and existing under Philippine laws, and operating in Meycauayan,
Bulacan.  On January 16, 1987, its board of trustees recognized the Meycauayan
College Faculty and Personnel Association as the employees’ union in the Meycauayan College.

Prior to said recognition or on July 17, 1983, petitioner and the
union, then headed by Mrs. Teresita V. Lim, entered
into a collective bargaining agreement for 1983-1986.  Article IV thereof provides:

“SALARY
SCALE

IV.  4.0 ANG ANTAS NG PAGPAPASUWELDO
SA MGA GURO SA MATAAS NG PAARALAN AY UMAALINSUNOD SA PARAAN NG PAGRARANGGONG
KALAKIP NITO BILANG ‘TAKDA’ AT AYON PA RIN SA SUMUSUNOD NA HALAGA NG
PAGPAPASUWELDO (IPATUTUPAD SA A?O-ESCOLAR 1983-1986):

When the collective bargaining agreement was entered into, the
following presidential decrees were in effect: 
(a) P.D. No. 1389 dated May 29, 1978 adjusting the existing statutory
minimum wages; (b) P.D. No. 1713 dated August 18, 1980 providing for an increase
in the minimum daily wage rates and for additional mandatory living allowances,
and (c) P.D. No. 1751 dated May 14, 1980 increasing the statutory daily minimum
wage at all levels by P4.00 after integrating the mandatory emergency living
allowance under P.D. Nos. 525 and 1123 into the basic pay of all covered
workers.  Wage Order No. 2 increasing the
mandatory basic minimum wage and living allowance was also issued on July 6, 1983 just before the
collective bargaining agreement herein involved was entered into.

During the lifetime of the collective bargaining agreement, the
following were issued:  (a) Wage Order
No. 3 dated November 7, 1983 increasing the minimum daily living allowance in
the private sector; (b) Wage Order No. 4 dated May 1, 1984 integrating as of
said date the emergency cost of living allowances under P.D. Nos. 1614, 1634
and 1713 into the basic pay of covered workers in the private sector; (c) Wage
Order No. 5 dated June 11, 1984 increasing the cost of living allowance of
workers in the private sector whose basic salary or wage is not more than
P1,800 a month; and (d) Wage Order No. 6 dated October 26, 1984 increasing the
daily living allowances.

The union admits herein that its members were paid all these
increases in pay mandated by law.  It
appears, however, that in 1987, shortly after union president Mrs. Teresita V. Lim, who held the managerial position of
registrar of the college, had turned over the presidency of the union to Mrs.
Fe Villarico, the latter unintentionally got a copy
of the collective bargaining agreement and discovered that Article IV thereof
had not been implemented by the petitioner.^[1]

Consequently, on March
27, 1987, the union filed with the Department of Labor and
Employment, Regional Office No. III in San Fernando,
Pampanga, a notice of strike on the ground of unfair
labor practice alleging therein violation of the collective bargaining
agreement particularly the provisions of Article IV thereof on salary scale.^[2]

The union having struck
and picketed the petitioner’s premises on May 20, 1987, the Secretary of Labor assumed
jurisdiction over the labor dispute and, in his order of May 26,
1987, instructed
Regional Office No. III to hear and receive the evidence of the parties and to
submit a report thereon.

In his report, the
Director of Regional Office No. III stated that the management had indeed
complied with the salary and allowance increases ordained by law.  However, he observed that the college’s
compliance with said increases in salary and allowance were “not an ipso
facto compliance with the collective bargaining
agreement without violating the very aims and purpose of free collective
bargaining for better terms and conditions of employment.” According to
the Director, the two should be distinguished from each other.  Thus, while compliance with increases
provided by law was mandatory, compliance with the provisions of a collective
bargaining agreement was contractual and obligatory.

He added:  “Non-compliance with the mandate of a standards
law or decree may give rise to an ordinary action for recovery while violation
of a collective bargaining agreement may even give rise to a criminal action
for unfair labor practice.  And while the
relief sought for violation of a standards law or decree is primarily for
restitution of (an) unpaid benefits, the relief sought for violating a CBA is
ordinarily for compliance and desistance. 
Moreover, there is no provision in the aforecited
Presidential Decrees providing that compliance thereto is sufficient compliance
with a provision of a collective bargaining agreement and vice-versa.”

To illustrate his
finding that the collective bargaining agreement had not been complied with by
the college, the Director cited the example of a union member who had been with
the college for twenty years.  Under the
standards law, she was entitled to a rate of P58.65 per period whereas under
the collective bargaining agreement, she should receive P63.00 per period
considering that the ranking system is observed therein.

Accordingly, the
Director recommended that the management of Meycauayan
College be directed to immediately comply with the salary scale provision of
the collective bargaining agreement and “to pay all covered union members
their salary differential both during regular classes and summer vacations as well as the 13th month differential pay for
the school years 1983-1984, 1984-1985 and 1985-1986 utilizing the
computations” mentioned in the report.^[3]

Upon review of said
report and the record of the case, the Secretary of Labor agreed with the
Director’s findings noting further that the college “failed to controvert
the assertion of the faculty members that: 
(a) the salary period being paid to them is always P7.00 less than that
provided for in the CBA; (b) the salary for the extra period handled is almost
always P4.00 more than the salary per period but still less than P3.00 as
provided in the CBA.”^[4] The dispositive
portion of the Secretary’s order of September 9, 1987 states:

“WHEREFORE, the Management of Meycauayan
College is hereby ordered to:

1) Strictly effect the payment of salaries of the union members in
accordance with the provisions of the collective bargaining agreement;

2) Pay the covered union members salary differential computed by
subtracting the salary actually paid and received by them per period provided
in the collective bargaining agreement for school years 1983-1984; 1984-1985
and 1985-1986 including the differential for the 13th month pay for the same
period.”^[5]

Its motion for reconsideration having been denied on December 3, 1987, Meycauayan College
filed the instant petition for certiorari with prayer for the issuance
of a writ of preliminary injunction and/or a temporary restraining order enjoining the Secretary of Labor
from enforcing his orders of September
9, 1987 and December 3,
1987.  On February 15, 1988, the Court issued
said temporary restraining order.^[6]

In this petition, Meycauayan College
contends that the Secretary of Labor abused his discretion when he ruled that
“the college did not pay its teachers what was due them under the
collective bargaining agreement” and when, in the “unfair labor
practice strike case”, he promulgated a decision “with a retroactive
effect beyond the one-year period provided in Art. 290 of the Labor Code.”^[7]

The petition has no merit.

As correctly ruled by public respondent, a collective bargaining
agreement is a contractual
obligation.  It is distinct from an
obligation imposed by law.  The terms and
conditions of a collective bargaining contract constitute the law between the
parties.  Beneficiaries thereof are
therefore, by right, entitled to the fulfillment of the obligation prescribed
therein.^[8]
Consequently, to deny binding force to the collective bargaining agreement
would place a premium on a refusal by a
party thereto to comply with the terms of the agreement.  Such refusal would constitute an unfair labor
practice.^[9]

Moreover, compliance with a collective bargaining agreement is
mandated by the expressed policy to give protection to labor.^[10]
Unless otherwise provided by law, said policy should be given paramount
consideration.  Hence, inasmuch as the
petitioner has failed to point to any provision of law or even of the
collective bargaining agreement itself to the effect that benefits provided by
the former encompass those provided by the latter, benefits derived from either
the law or a contract should be treated as distinct and separate from each
other.

What seems to be the life-force of petitioner’s case is its
contention that an agreement on a salary scale should be distinguished
from an agreement on a salary increase. 
Thus, it argues in fine that an
agreement on a salary scale should be considered as an addition to the
salary increase imposed by law and vice versa.^[11]
This contention is fallacious.

Increments to the laborers’ financial gratification, be they in
the form of salary increases or changes in the salary scale are aimed at one
thing – improvement of the economic predicament of the laborers.  As such, they should be viewed in the light
of the State’s avowed policy to
protect labor.  Thus, having entered into
an agreement with its employees, an employer may not be allowed to renege on its obligation under a
collective bargaining agreement should, at the same time, the law grant the employees the same or
better terms and conditions of employment. 
Employee benefits derived from law are exclusive of benefits arrived at
through negotiation and agreement unless otherwise provided by the agreement itself or by law.^[12]

Nevertheless, as the
key to the interpretation of contracts, including collective bargaining
agreements, is the intention of the parties,^[13]
we examined the record and found
the undisputed allegation of private respondent that the collective bargaining
agreement herein involved was entered into by the parties to improve the plight
of the teachers by increasing their salary.  The parties increased the teachers’ salary or
rate per period, by drafting a salary scale “based on the length of
service” of the teachers
and eventually came up with Article IV aforequoted.^[14]
From this unrebutted allegation, it is clear that the
parties wanted to attain one goal – increase the salaries of the
teachers on the basis of their length of service.  Hence, it is immaterial that the means by
which said goal is achieved is through the alteration of the salary scale.

On the issue of prescription, Article 291 (now Art. 290) of the
Labor Code herein invoked by petitioner, provides:

“Offenses.- Offenses penalized under this Code and the
rules and regulations issued pursuant thereto shall prescribe in three (3)
years.

“All unfair labor practices arising from Book V shall be filed
with the appropriate agency within one (1) year from accrual of such unfair
labor practice; otherwise, they shall be forever barred.”

Petitioner herein asserts that under said article, the Secretary
of Labor abused his discretion when he promulgated a decision applicable even
to school years 1983-1984 and 1984-1985 when in fact he assumed jurisdiction
over the strike only on May 26, 1987 or more than a year from the accrual of
the unfair labor practice.  It further
avers that the labor dispute herein involved was not presented by the union
“as a money claim which
would make the strike illegal since a money claim is not a strikable
issue under the Labor Code, nor is it under the original jurisdiction of the
Secretary of Labor.”^[15]

The one-year prescriptive period is inapplicable in this case
because of peculiar factual circumstances which petitioner has not denied.  Although the collective bargaining agreement
covers school years 1983 to 1986, a copy
of the agreement was only made available to the union in 1987.  Immediately thereafter, the union sought its
implementation.  The union members might
have been aware of the existence of the collective bargaining agreement but the
fact that their president was actually a management employee being petitioner’s
registrar, they must have been deterred from demanding its implementation
earlier.  Hence, to apply the provisions
of Article 290 (Art. 291) would be unfair and prejudicial to the union members
particularly those who have served petitioner for a number of years who stand
to benefit most from the salary scale.

Article 264(g), now Article 263(g) of the Labor Code is broad
enough to give the Secretary of
Labor the power to take jurisdiction over what
appears at first blush to be an ordinary money claim.  Claims for pay differentials may have that character
but, as earlier stated, if they arise out of a violation of a collective
bargaining agreement, they assume the character of an unfair labor practice and
are, therefore, well within the ambit of the jurisdiction of the Secretary of
Labor to decide.

WHEREFORE, the decision of the Secretary of Labor is
hereby AFFIRMED and the temporary restraining order of February 15, 1989 is
LIFTED.

This decision is immediately executory.  Costs against the petitioner.

SO ORDERED.

Gutierrez, Jr., Feliciano, Bidin, and Cortes, JJ.,
concur.

^[1]
Rollo, p. 50.

^[2]
Rollo, pp. 8 & 38.

^[3]
Rollo, p. 32.

^[4]
Ibid.

^[5]
Rollo, pp.
32-33.

^[6]
Rollo, p. 42.

^[7]
Petition, pp. 6-7.

^[8]
Batangas Laguna Tayabas Bus
Co. vs. Court of Appeals, L­-38482, June 18, 1976, 71 SCRA 470; Fegurin vs. NLRC, G.R. No. 50483, February 28, 1983,
120 SCRA 910.

^[9]
MRR Yard Crew Union vs. Philippine National Railways, L­-33621, July 26, 1976, 72 SCRA 88; National
Development Company vs. NDC Employees and Workers’ Union, L-32387,
August 19, 1975, 66 SCRA 181; Art. 250, Labor Code.

^[10]
Art. 3, Labor Code.

^[11]
Consolidated Reply, pp. 3-5; Rollo, pp. 91-93.

^[12]
See Marcopper Mining Corporation vs. Ople, G.R. No. 51254, June 11, 1981, 105 SCRA 75.

^[13]
Philippine Apparel Workers Union vs. NLRC, G.R. No. 50320, July 31, 1981,
106 SCRA 444, 456.

^[14]
Private respondent’s comment, p. 10, Rollo, p.
58.

^[15]
Petition, p. 18; Rollo, p. 22.