CASE DIGEST: Wesleyan University v. Wesleyan Faculty and Staff

G.R. No. 181806 : March 12, 2014




Wesleyan University-Philippines (Petitioner), a non-stock, non-profit educational institution duly organized and existing under the laws of the Philippines and Wesleyan University-Philippines Faculty and Staff Association (Respondent), a duly registered labor organization acting as the sole and exclusive bargaining agent of all rank-and-file faculty and staff employees of petitioner signed a 5-year CBA9 effective June 1, 2003 until May 31, 2008.

A Memorandum providing guidelines on the implementation of vacation and sick leave credits as well as vacation leave commutation was issued by petitioner, through its President, Atty. Guillermo T. Maglaya (Atty. Maglaya). Respondent President, Cynthia L. De Lara (De Lara) wrote a letter to Atty. Maglaya informing him that respondent is not amenable to the unilateral changes made by petitioner and questioning the guidelines for being contrary to the existing practices and the CBA.

Petitioner advised respondent to file a grievance complaint on the implementation of the vacation and sick leave policy during their Labor Management Committee (LMC) Meeting. Petitioner announced therein its plan of implementing a one-retirement policy whichwas unacceptable to respondent.

Unable to settle their differences at the grievance level, the parties referred the matter to a Voluntary Arbitrator. Respondent submitted affidavits showing that there is an established practice of giving two retirement benefits: one from the Private Education Retirement Annuity Association (PERAA) Plan and another from the CBA Retirement Plan.

The Voluntary Arbitrator declared that the one-retirement policy and the Memorandum dated August 16, 2005 is contrary to law.

Petitioner appealed the case to the CA via a Petition for Review under Rule 43 of the Rules of Court. The CA affirmed the nullification of the one-retirement policy and the Memorandum dated August 16, 2005 on the ground that these unilaterally amended the CBA without the consent of respondent. Petitioner moved for reconsideration but the CA denied the same.

ISSUES: Whether or not the Court of Appeals committed grave and palpable error in ruling that a university practice of granting its employees two (2) sets of Retirement Benefits had already been established? Whether or not the Court of Appeals committed grave and palpable error in revoking petitioner Memorandum dated 16 August 2005 for being contrary to extant policy?

HELD: Decision of the Court of Appeals is sustained.

LABOR LAW: non-diminution rule

Article 100 of the Labor Code provides for the Non-Diminution Rule. This rule prohibits the employers from eliminating or reducing the benefits received by their employees. It applies only if the benefit is based on an express policy, a written contract, or has ripened into a practice. To be considered a practice, it must be consistently and deliberately made by the employer over a long period of time. However, this rule admits of an exception and that is when the practice is due to error in the construction or application of a doubtful or difficult question of law. The error, however, must be corrected immediately after its discovery; otherwise, the rule on Non-Diminution of Benefits would still apply.

In the case at bar, respondent presented substantial evidence in the form of affidavits supporting its claim that there are two retirement plans. As gleaned from the affidavits, petitioner has been giving two retirement benefits as early as 1997. Petitioner failed to present any evidence to refute the veracity of said affidavits. Moreover, no evidence was shown to prove petitioner contention that there is only one retirement plan as the CBA Retirement Plan and the PERAA Plan are one and the same.

LABOR LAW: collective bargaining agreement cannot be unilaterally changed

The Memorandum dated August 16, 2005 imposes a limitation not agreed upon by the parties nor stated in the CBA. Hence, it must be struck down.

It is provided in Sections 1 and 2 of Article XII of the CBA that all covered employees are entitled to 15 days sick leave and 15 days vacation leave with pay every year and that after the second year of service, all unused vacation leave shall be converted to cash and paid to the employee at the end of each school year, not later than August 30 of each year. Whereas, it is provided in the Memorandum dated August 16, 2005 that vacation and sick leave credits are not automatic as leave credits would be earned on a month-to-month basis. The said Memorandum, therefore, limits the available leave credits of an employee at the start of the school year.

Basic is the rule that when the provisions of the CBA is clear, the literal meaning of the stipulation shall govern. Any doubt in its interpretation must be resolved in favor of labor.

The present petition for review is DENIED.