Case Digest: Octavio v. PLDT

G.R. No. 175492 : February 27, 2013




On May 28, 1999, PLDT and Gabay ng Unyon sa Telekominaksyon ng mga Superbisor (GUTS) entered into a CBA covering the period January 1, 1999 to December 31, 2001 (CBA of 1999-2001). Article VI, Section I thereof provides:

Section 1. The COMPANY agrees to grant the following across-the-board salary increase during the three years covered by this Agreement to all employees covered by the bargaining unit as of the given dates:
Effective January 1, 1999 10% of basic wage or P2,000.00 whichever is higher;
Effective January 1, 2000 11% of basic wage or P2,250.00 whichever is higher;
Effective January 1, 2001 12% of basic wage or P2,500.00 whichever is higher.
On October 1, 2000, PLDT hired Octavio as Sales System Analyst I on a probationary status. He became a member of GUTS. When Octavio was regularized on January 1, 2001, he was receiving a monthly basic salary of P10,000.00. On February 1, 2002, he was promoted to the position of Sales System Analyst 2 and his salary was increased to P13,730.00.

On May 31, 2002, PLDT and GUTS entered into another CBA covering the period January 1, 2002 to December 31, 2004 (CBA of 2002-2004) which provided for the following salary increases: 8% of basic wage or P2,000.00 whichever is higher for the first year (2002); 10% of basic wage or P2,700.00 whichever is higher for the second year (2003); and, 10% of basic wage or P2,400.00 whichever is higher for the third year (2004).

Claiming that he was not given the salary increases of P2,500.00 effective January 1, 2001 and P2,000.00 effective January 1, 2002, Octavio wrote the President of GUTS, Adolfo Fajardo (Fajardo). Acting thereon and on similar grievances from other GUTS members, Fajardo wrote the PLDT Human Resource Head to inform management of the GUTS members claim for entitlement to the across-the-board salary increases.

Accordingly, the Grievance Committee convened on October 7, 2002 consisting of representatives from PLDT and GUTS. The Grievance Committee, however, failed to reach an agreement. In effect, it denied Octavios demand for salary increases. Aggrieved, Octavio filed before the Arbitration Branch of the NLRC a Complaint for payment of said salary increases. The Labor Arbiter dismissed the Complaint of Octavio and upheld the Committee Resolution.

Upon Octavios appeal, the NLRC, in its September 30, 2005 Resolution, affirmed the Labor Arbiters Decision. Octavios Motion for Reconsideration was likewise dismissed by the NLRC in its November 21, 2005 Resolution.

Octavio thus filed a Petition for Certiorari which the CA found to be without merit. In its August 31, 2006 Decision, the CA declared the Committee Resolution to be binding on Octavio, he being a member of GUTS, and because he failed to question its validity and enforceability.

In his Motion for Reconsideration, Octavio disclaimed his alleged failure to question the Committee Resolution by emphasizing that he filed a Complaint before the NLRC against PLDT. However, the CA denied Octavios Motion for Reconsideration.

ISSUE: Whether Octavio properly raised the issues to the court despite remedies stated in the grievance machineries in the CBA.

HELD: The Petition has no merit.


Under Article 260 of the Labor Code, grievances arising from the interpretation or implementation of the parties CBA should be resolved in accordance with the grievance procedure embodied therein. It also provides that all unsettled grievances shall be automatically referred for voluntary arbitration as prescribed in the CBA.

In its Memorandum, PLDT set forth the grievance machinery and procedure provided under Article X of the CBA of 2002-2004, viz:

Section 1. GRIEVANCE MACHINERY - there shall be a Union-Management Grievance Committee composed of three (3) Union representatives designated by the UNION Board of Directors and three (3) Management representatives designated by the company President. The committee shall act upon any grievance properly processed in accordance with the prescribed procedure. The Union representatives to the Committee shall not lose pay for attending meetings where Management representatives are in attendance.

Section 2. GRIEVANCE PROCEDURE - The parties agree that all disputes between labor and management may be settled through friendly negotiations; that the parties have the same interest in the continuity of work until all points in dispute shall have been discussed and settled; that an open conflict in any form involves losses to the parties; and that therefore, every effort shall be exerted to avoid such an open conflict. In furtherance of these principles, the parties agree to observe the following grievance procedures.
Step 1. Any employee (or group of employees) who believes that he has a justifiable grievance shall present the matter initially to his division head, or if the division is involved in the grievance, to the company official next higher to the division head (the local manager in the provincial exchanges) not later that fifteen (15) days after the occurrence of the incident giving rise to the grievance. The initial presentation shall be made to the division head either by the aggrieved party himself or by the Union Steward or by any Executive Officer of the Union who is not a member of the grievance panel. The initial presentation may be made orally or in writing. 
Step 2. Any party who is not satisfied with the resolution of the grievance at Step 1 may appeal in writing to the Union-Management Grievance Committee within seven (7) days from the date of receipt of the department heads decision. 
Step 3. If the grievance is not settled either because of deadlock or the failure of the committee to decide the matter, the grievance shall be transferred to a Board of Arbitrators for the final decision. The Board shall be composed of three (3) arbitrators, one to be nominated by the selection of such Voluntary Arbitrator or panel of Voluntary Arbitrators, preferably from the listing of qualified Voluntary Arbitrators duly accredited by the Board. In case the parties fail to select a Voluntary Arbitrator or panel of Voluntary Arbitrators, the Board shall designate the Voluntary Arbitrator or panel of Voluntary Arbitrators, as may be necessary, pursuant to the selection procedure agreed upon in the Collective Bargaining Agreement, which shall act with the same force and effect as if the Arbitrator or panel of Arbitrators has been selected by the parties as described above. The decision of the board shall be final and binding both the company and the Union in accordance with law. Expenses of arbitration shall be divided equally between the Company and the Union.
Indisputably, the present controversy involves the determination of an employees salary increases as provided in the CBAs. When Octavios claim for salary increases was referred to the Union-Management Grievance Committee, the clear intention of the parties was to resolve their differences on the proper interpretation and implementation of the pertinent provisions of the CBAs. And in accordance with the procedure prescribed therein, the said committee made up of representatives of both the union and the management convened. Unfortunately, it failed to reach an agreement. Octavios recourse pursuant to the CBA was to elevate his grievance to the Board of Arbitrators for final decision. Instead, nine months later, Octavio filed a Complaint before the NLRC.

It is settled that when parties have validly agreed on a procedure for resolving grievances and to submit a dispute to voluntary arbitration then that procedure should be strictly observed. Moreover, we have held time and again that before a party is allowed to seek the intervention of the court, it is a precondition that he should have availed of all the means of administrative processes afforded him. Hence, if a remedy within the administrative machinery can still be resorted to by giving the administrative officer concerned every opportunity to decide on a matter that comes within his jurisdiction, then such remedy should be exhausted first before the courts judicial power can be sought.

The premature invocation of the courts judicial intervention is fatal to ones cause of action. The underlying principle of the rule on exhaustion of administrative remedies rests on the presumption that when the administrative body, or grievance machinery, is afforded a chance to pass upon the matter, it will decide the same correctly.

By failing to question the Committee Resolution through the proper procedure prescribed in the CBA, that is, by raising the same before a Board of Arbitrators, Octavio is deemed to have waived his right to question the same.

Clearly, he departed from the grievance procedure mandated in the CBA and denied the Board of Arbitrators the opportunity to pass upon a matter over which it has jurisdiction. Hence, and as correctly held by the CA, Octavios failure to assail the validity and enforceability of the Committee Resolution makes the same binding upon him. On this score alone, Octavios recourse to the labor tribunals below, as well as to the CA, and, finally, to this Court, must therefore fail.