CALTEX REFINERY EMPLOYEES ASSOCIATION (CREA) v. BRILLANTES G.R. No. 123782; Sept. 16, 1997; Panganiban, J.

Digest by Reinerr Nuestro Facts: 1. Anticipating the expiration of their CBA on July 31, 1995, petitioner CREA and private respondent Caltex (Philippines), Inc. negotiated, under the guidance of the NCMB and the Office of the SOLE, the terms and conditions of employment to be contained in a new CBA. a) Some items were amicably arrived at and agreed upon, others were left unresolved. 2. To resolve these issues, eight meetings were held, but none were successful, prompting the petitioner to declare a deadlock and file a notice of strike. Six further conciliation meetings held by the NCMB were likewise unavailing, as were various meetings at the plant level. 3. During a strike vote on Aug. 16, 1995, the members of CREA opted for a walk out. Caltex thus filed with the DOLE a petition for assumption of jurisdiction pursuant to Art. 263 (g) of the Labor Code. 4. Jose Brillantes, then Acting SOLE, issued an order assuming jurisdiction over the labor dispute and enjoining any strike or lockout. 5. CREA defied the order and began to strike and picket the premises of Caltex. Several company notices directing the employees to return to work were likewise defied. 6. During the course of the strike, DOLE Undersecretary Bienvenido Laguesma interceded and conducted several conciliation meetings, during which he was able to convince the CREA members to return to work and enter into a memorandum of agreement with Caltex. a) The picket was finally lifted on Sept. 9, 1995, though both parties filed position papers on unresolved issues. 7. Because of the strike, Caltex dismissed some officers of CREA due to the strike. As a result, the parties failed to come to any substantial agreement and decided to refer the problem to the SOLE, Jose S. Brillantes. 8. Brillantes issued three orders, in favor of CREAone directing that a new CBA be executed, and one order each denying the two MRs filed by the petitioner. Hence this Special Civic Action for Certiorari. Issue: Whether the SOLE committed GAD in resolving the instant labor dispute as regards the matters of: 1. Wage increase - NO 2. Union Security Clause - YES 3. Retirement Plan - NO 4. Grievance Machinery - NO 5. Signing Bonus - NO Ratio: Preliminary Matter: Certiorari in Labor Cases The factual findings of quasi-judicial agencies when supported by substantial evidence are binding on the SC, considering the expertise of these agencies in their respective fields. Substantial evidence in labor cases is such amount of relevant evidence which a reasonable mind will accept as adequate to justify a conclusion. As an extraordinary remedy, a Rule 65 petition is available only in truly exceptional cases involving errors of jurisdiction or GAD. It does not include correction of the NLRCs evaluation of the evidence. (Flores v. NLRC) Here, there is no question raised regarding jurisdiction. Instead, what is being sought is a judicial re-evaluation of the adequacy or inadequacy of the evidence on record, which is impermissible in a certiorari petition. 1. As to wage increase: NO GAD The Orders issued by Brillantes found the rates of 14%, 14% and 13% as wage increase for the years 1995, 1996, and 1997, respectively, to be proper, based on factors such as financial capacity, position in the industry, package of existing benefits, etc. In denying the Motions for Reconsideration/clarification of the above award, Brillantes found no reason to alter the award, saying that the subsequent agreement on wage increases at Shell Company, as well as the claimed

inflation rate at the time, would not be sufficient bases to alter the package of wage increases considering that other factors, like employment size, were carefully taken into account. CREA assailed the award contending that the increase should be based on four factors: (1) economic needs of the unions members; (2) the companys financial capacity; (3) the bargaining history between the union and the company; (4) and the traditional parity in wages between Caltex and Shell Refinery Employees. o To show Caltexs immense financial capacity, CREA also brought up housing upgrades to housing for managers and supervisors in the Banaba Housing Up-grading plan, which would cost not less than P200M. It also maintained that the salaries of Shell employees be used as a reference point in upgrading their compensation. SC: The matter of inflation rate had already been decided in the assailed orders. Contrary to CREAs undocumented claim of 11.8% inflation in September 1995, the average inflation for the first 10 months of 1995 was only 7.496% and Central Bank projections indicated it would take a 13.5% inflation for Nov. and Dec. to record an inflation of 8.5% for the year. o Further, the Banaba Housing upgrade should not be construed as a yardstick of its financial standing. The housing plan has nothing to do with their demand for wage increase. It was not a benefit; it was an indispensable requirement for smooth plant operations and assurance of an emergency response crew in times of calamities and accidents. Moreover, being built in 1954, most of its structures are dilapidated and in dire need of rehabilitation and preservation. o As to the argument that the Shell employees had higher wages, there was no substantial reason alleged to impute GAD on Brillantes part. The court was amazed that CREA continued to use the outmoded concept of the Shell yardstick and relative parity in wages. o The principle to be applied is higher productivity for higher pay. Where Shell produces 155,000 barrels per day with only 120 employees working at a 37% average overtime rate, Caltex only produces 65,000 barrels daily with 221 employees working at a 102% overtime rate. Thus, as Caltex employees are less productive, it is illogical to ask for relative parity of wages. o Applying the principle of a fair days wage for a fair days work, there is no reason for Caltex employees, already the best paid in the industry, and yet the least productive, to receive a wage increase. There was no GAD regarding this matter.

2. Union Security Clause: Theres GAD Brillantes found that there was no need to amend the union security clause, which provided that employees who are members of the union shall maintain their membership with the union for the duration of this agreement as a condition of employment. o The union wanted to make it a requirement for a member to be of good standing for continued employment. o And whereas the original CBA provided that members of the union who cease to be members thereof due to resignation or expulsion shall not be retained in the employment of the company, the union sought to expand the reach of its clause by making the dismissal include the grounds on its CBL. Brillantes saw the proposed amendments merely as procedural ones, as the proposed changes gave the same substantial effects as the original provisions, and so did not order the amendment, instead deciding that it should have been decided by the parties based on mutual concern and agreement. CREA claimed that leaving to the parties the decision on the union security clause was contrary to the idea of assuming jurisdiction over the case, as under the original CBA provision, they had only three grounds for dismissal: non-payment of dues, subversion, or conviction for a crime involving moral turpitude. Hence, the disagreement on this issue is also substantial, not merely procedural. The SC agreed, holding that the disagreement should have been definitely resolved by Brillantes. As labor secretary, he should have taken cognizance of an issue not merely incidental to but essentially involved in the labor dispute itself, or otherwise submitted for resolution. He had no reason to avoid the issue, claiming that it was only a procedural issue. Such reasoning sidesteps the purpose of a union security clause as a safeguard against the fickleness or perfidy of its own members, and thus of the solidarity of the union. Without such safeguard, group solidarity becomes uncertain and the union weakens and becomes vulnerable to company machinations.

In this security clause lies the strength of the union during the enforcement of the CBA. This clause provides labor with substantial power in collective bargaining. The secretary of labor assumed jurisdiction over this labor dispute in an industry indispensable to national interest, to settle once and for all the jurisdiction over which he has jurisdiction at his level. In not performing his duty, there was GAD.

3. Retirement Plan NO GAD Brillantes had decided that the new retirement plan should not cover employees who had previously chosen to be covered under the old plan, despite the petition by the Union to so cover them. The 40 or so employees who chose the old plan were given the option to choose between the old and new plans, and chose the former. There was no GAD. The employees had been given a free choice, and their free and voluntary decision must be respected. While the union has every right to represent its members in the negotiation of the terms and conditions of their employment, it cannot negate their wishes on matters that are purely personal and individual to them, like the 40 employees here who freely opted to be covered by the old plan. The union cannot impose its will. 4. Grievance Machinery NO GAD Brillantes affirmed a resolution to shorten the periods to process/resolve machinery from 45 to 30 days at the first step and from 10 to 7 days at the second step, as well as removing the step of establishing a joint council, holding that it would only serve to protract the proceeding and therefore, no longer necessary. o An unresolved grievance, if not settled within the 7days at the level of the VP, shall automatically be referred by both parties to voluntary arbitration pursuant to RA 6715. There was no GAD. No particular setup for grievance machinery is mandated by law. Art. 260 of the LC (now Art. 266), as incorporated by RA 6715, provides for a single grievance machinery to settle problems arising from interpretation of implementation of the CBA. The procedure ordered by Brillantes sufficiently complied with the minimum requirement of the law. In fact, he went beyond the minimum by providing for two steps. While it was contended that he did not act on the dispute by leaving the number of voluntary arbitrators to the choice of the parties, this was seen as affording the parties latitude to decide for themselves. 5. Signing Bonus NO GAD Brillantes ruled that the maintenance of existing benefits clause did not cover signing bonuses. The said signing bonus, which was present in the previous CBA, was not accepted by Caltex. While CREA claimed that it was covered by the maintenance of existing benefits clause, the SC ruled that a signing bonus is not a benefit which may be demanded under the law, nor as a matter of right. If not agreed upon by the parties or unilaterally offered by the company, the condition for awarding it must be satisfied. Here, the condition was non-strike. Obviously, this was not followed. There was no GAD. Epilogue: Saballa v. NLRC provided that it is a requirement of due process and fair play that the parties to a litigation be informed of how it was decided, with an explanation of the factual and legal reasons that led to the conclusions of the court. The requirement that the Sec. of Labor make findings supported by substantial evidence was sufficiently met. The claim of GAD was simply based on the fact that Brillantes largely adopted the proposals of Caltex. However, it should be understood that collective bargaining is not equivalent to an adversarial litigation where rights and obligations are delineated and remedies applied. It is a process of finding a reasonable solution to a conflict and harmonizing opposite positions into a fair and reasonable compromise. When the parties agree to submit unresolved issues to the Sec. of Labor, they defer to his wisdom and objectivity in insuring industrial peace. Unless they can clearly demonstrate bias or arbitrariness on his part, the court will not interfere with his judgment. While some of the Courts members may agree with the wisdom of the unions claims, the Court will not use its power to strike down the decisions of officers tasked to settle administrative questions.