G.R. No. 123782 September 16, 1997
CALTEX REFINERY EMPLOYEES ASSOCIATION (CREA), petitioner, vs. HON. JOSE S. BRILLANTES, in his capacity as Acting Secretary of the Department of Labor and Employment, and CALTEX (PHILIPPINES), Inc., respondents.

FACTS

Anticipating the expiration of their Collective Bargaining Agreement (CBA) on July 31, 1995, petitioner CREA and private respondent Caltex (Phils.), Inc. negotiated for a new CBA. While some items were agreed upon, others remained unresolved despite eight meetings, leading petitioner to declare a deadlock and file a notice of strike on July 24, 1995. Conciliation by the National Conciliation and Mediation Board and marathon plant-level meetings failed. After a strike vote on August 16, 1995, private respondent filed a petition for assumption of jurisdiction with the DOLE. Public respondent, then Acting Secretary of Labor Jose S. Brillantes, issued an Order dated August 22, 1995, assuming jurisdiction over the dispute and enjoining any strike or lockout. In defiance, petitioner began a strike on August 25, 1995. After DOLE Undersecretary Laguesma interceded, the strike ended on September 9, 1995, and the parties agreed to submit their unresolved CBA issues to the Secretary of Labor for resolution on or before October 9, 1995, with the legality of the strike and termination of union officers to be addressed afterward. Public respondent issued the assailed Order on October 9, 1995, directing the parties to execute a new CBA with specified dispositions. Motions for reconsideration and clarification led to the second assailed Order dated November 21, 1995, which affirmed the October 9 Order with modifications and directed the submission of position papers on the legality of the strike and terminations. A third assailed Order dated January 9, 1996, denied petitioner’s second motion for reconsideration. Petitioner seeks reversal or modification of these three orders.

ISSUE

Whether the Honorable Secretary of Labor and Employment committed grave abuse of discretion in resolving the labor dispute, particularly concerning the CBA issues on wage increase, union security clause, retirement benefits, signing bonus, and grievance and arbitration machineries.

RULING

The petition is partly meritorious. The Court ruled that unless shown to be clearly whimsical, capricious, or arbitrary, the orders or resolutions of the Secretary of Labor resolving conflicts on CBA contents will be respected, as they are grounded largely on what is possible, fair, and reasonable under the circumstances. The Court, applying the standards for certiorari under Rule 65, found no grave abuse of discretion in the Secretary’s resolutions on most issues. The factual findings of quasi-judicial agencies, when supported by substantial evidence, are binding and entitled to great respect. The Court sustained the Secretary’s award of wage increases (14% for 1995 and 1996, 13% for 1997) and a meal subsidy, noting it considered factors like financial capacity and industry position. The union security clause (maintenance of membership) was upheld as consistent with the CBA and not violative of the right to self-organization. The application of the new retirement plan to current employees was affirmed, with the Secretary correctly ruling that retirement benefits are subject to negotiation and the new plan’s terms were not shown to be inferior. The denial of a signing bonus was sustained as a management prerogative and not a mandatory bargaining item. However, the Court found the Secretary’s order to delete the provision for a permanent voluntary arbitrator in the grievance machinery to be a grave abuse of discretion. The order contravened the parties’ agreement and the policy under the Labor Code favoring voluntary arbitration, effectively imposing a compulsory arbitration scheme. Thus, the Court modified the assailed orders by reinstating the parties’ agreed grievance procedure, including the provision for a permanent voluntary arbitrator.