G.R. No. 181806, March 12, 2014
WESLEYAN UNIVERSITY-PHILIPPINES, Petitioner, vs. WESLEYAN UNIVERSITY-PHILIPPINES FACULTY and STAFF ASSOCIATION, Respondent.

FACTS

Petitioner Wesleyan University-Philippines (WU-P) and respondent Wesleyan University-Philippines Faculty and Staff Association (WU-PFSA), the exclusive bargaining agent, entered into a five-year Collective Bargaining Agreement (CBA) effective June 1, 2003. On August 16, 2005, WU-P issued a Memorandum providing guidelines that vacation and sick leave credits must be earned monthly (1.25 days each per month) and are not automatic, and that vacation leave commutation is effected only after an employee’s second year of continuous service. Respondent objected, claiming these guidelines unilaterally altered the CBA’s Article XII, which granted 15 days vacation leave and 15 days sick leave with pay annually, and provided for cash conversion of unused vacation leave after the second year of service. Furthermore, during a Labor Management Committee meeting, WU-P announced a plan to implement a “one-retirement policy,” which respondent also rejected, asserting an established practice of granting two retirement benefits: one from the Private Education Retirement Annuity Association (PERAA) Plan and another from the CBA Retirement Plan under Article XVI of the CBA. The dispute was elevated to a Voluntary Arbitrator, who nullified the August 16, 2005 Memorandum and the one-retirement policy, ordering a return to the prior practices. The Court of Appeals affirmed this decision. Petitioner appealed to the Supreme Court, arguing the affidavits submitted by respondent to prove the two-retirement practice were self-serving and that the Memorandum was valid.

ISSUE

1. Whether the Court of Appeals erred in sustaining the Voluntary Arbitrator’s finding that substantial evidence established a company practice of granting two retirement benefits.
2. Whether the Court of Appeals erred in revoking the August 16, 2005 Memorandum for being contrary to the CBA and established policy.

RULING

The Supreme Court DENIED the petition and AFFIRMED the Court of Appeals’ Decision and Resolution.
1. The practice of granting two retirement benefits was supported by substantial evidence. Respondent presented affidavits from retired and incumbent employees showing the grant of two retirement benefits as early as 1997. Petitioner failed to refute this evidence. The affidavits were not self-serving, as the retired employees had nothing to gain. The Non-Diminution Rule (Article 100, Labor Code) prohibits the elimination of benefits that have ripened into a practice—consistently and deliberately granted over a long period. The alleged lack of a Board Resolution authorizing the dual benefits did not negate the established practice, especially since any error in application should have been corrected immediately upon discovery, which was not done.
2. The August 16, 2005 Memorandum was invalid as it unilaterally altered the terms of the CBA concerning vacation and sick leave benefits and their commutation. A CBA has the force of law between parties and must be complied with in good faith. The Memorandum imposed additional qualifications (earning credits monthly, commutation only after two continuous years) not found in the CBA, thereby diminishing benefits in violation of the Non-Diminution Rule. The unilateral change without respondent’s consent was impermissible.