Case Digest: Supreme Steel v. Nagkakaisang Manggagawa

G.R. No. 185556: March 28, 2011




Petitioner Supreme Steel Pipe Corporation is a domestic corporation engaged in the business of manufacturing steel pipes for domestic and foreign markets. Respondent Nagkakaisang Manggagawa ng Supreme Independent Union is the certified bargaining agent of petitioners rank-and-file employees.

Respondent filed a notice of strike with the National Conciliation and Mediation Board on the ground that petitioner violated certain provisions of the CBA. The parties failed to settle their dispute. Consequently, the Secretary of Labor certified the case to the NLRC for compulsory arbitration pursuant to Article 263(g) of the Labor Code. Respondent cited eleven violations committed by petitioner.

Out of the eleven issues raised by respondent, eight were decided in its favor; two (denial of paternity leave benefit and discrimination of union members) were decided in favor of petitioner; while the issue on visitors free access to company premises was deemed settled during the mandatory conference.

On appeal, the CA affirmed the NLRC decision. Upon denial of its motion for reconsideration, petitioner filed this petition for review on certiorari, contending that the CA erred in finding that it violated certain provisions of the CBA.

Whether or not petitioner violated certain provisions of the CBA


CBA is the law between the parties and compliance therewith is mandated by the express policy of the law. If the terms of a CBA are clear and there is no doubt as to the intention of the contracting parties, the literal meaning of its stipulation shall prevail.

Upon these well-established precepts, we sustain the CAs findings and conclusions on all the issues, except the issue pertaining to the denial of the COLA under Wage Order No. RBIII-10 and 11 to the employees who are not minimum wage earners.

The wording of the CBA on general wage increase cannot be interpreted any other way: The CBA increase should be given to all employees "over and above" the amount they are receiving, even if that amount already includes an anniversary increase. Stipulations in a contract must be read together, not in isolation from one another. Clearly then, even if petitioner had already awarded an anniversary increase to its employees, such increase cannot be credited to the "contractual" increase as provided in the CBA, which is considered "separate and distinct."

Petitioner claims that it has been the company practice to offset the anniversary increase with the CBA increase. It however failed to prove such material fact. Company practice, just like any other fact, habits, customs, usage or patterns of conduct must be proven. The offering party must allege and prove specific, repetitive conduct that might constitute evidence of habit,or company practice. Evidently, the pay slips of the four employees do not serve as sufficient proof.

Petitioners excuse in not providing a shuttle service to its employees is unacceptable. In fact, it can hardly be considered as an excuse. Petitioner simply says that it is difficult to implement the provision. It relies on the fact that "no time element is explicitly stated in the CBA within which to fulfill the undertaking." We cannot allow petitioner to dillydally in complying with its obligation and take undue advantage of the fact that no period is provided in the CBA. Petitioner should recondition the company vehicle at once, lest it be charged with and found guilty of unfair labor practice.

Petitioner gave a narrow construction to the wording of the CBA when it denied (a) reimbursement for the first-aid medicines taken by Rodrigo Solitario when he was injured during the company sportsfest and the transportation cost incurred by Alberto Guevara and Job Canizares in going to the hospital, (b) payment of the wages of certain employees during the time they spent at the grievance meetings, and (c) payment of the employees wages during the brownout that occurred on July 25, 2002. As previously stated, the CBA must be construed liberally rather than narrowly and technically.

We likewise agree with the CA on the issue of nonpayment of the time-off for attending grievance meetings. The intention of the parties is obviously to compensate the employees for the time that they spend in a grievance meeting as the CBA provision categorically states that the company will pay the employee "a paid time-off for handling of grievances, investigations, labor-management conferences." It does not make a qualification that such meeting should be held during office hours or within the company premises.

On the issue of contracting-out labor, we sustain the CA. Petitioner, in effect, admits having hired "temporary" employees, but it maintains that it was an exercise of management prerogative, necessitated by the increase in demand for its product.

Indeed, jurisprudence recognizes the right to exercise management prerogative. Labor laws also discourage interference with an employer's judgment in the conduct of its business. For this reason, the Court often declines to interfere in legitimate business decisions of employers. The law must protect not only the welfare of employees, but also the right of employers.However, the exercise of management prerogative is not unlimited. Managerial prerogatives are subject to limitations provided by law, collective bargaining agreements, and general principles of fair play and justice.

The implementation of the COLA under Wage Order No. RBIII-10 across the board, which only lasted for less than a year, cannot be considered as having been practiced "over a long period of time." While it is true that jurisprudence has not laid down any rule requiring a specific minimum number of years in order for a practice to be considered as a voluntary act of the employer, under existing jurisprudence on this matter, an act carried out within less than a year would certainly not qualify as such. Hence, the withdrawal of the COLA Wage Order No. RBIII-10 from the salaries of non-minimum wage earners did not amount to a "diminution of benefits" under the law.

Hence, the order for petitioner to continue implementing Wage Order No. RBIII-10 and 11 across the board is SET ASIDE.