G.R. No. 102132 . March 19, 1993.
DAVAO INTEGRATED PORT STEVEDORING SERVICES, petitioner, vs. RUBEN V. ABARQUEZ, in his capacity as an accredited Voluntary Arbitrator and THE ASSOCIATION OF TRADE UNIONS (ATU-TUCP), respondents.

FACTS

Petitioner Davao Integrated Port Stevedoring Services and private respondent Association of Trade Unions (ATU-TUCP), the exclusive bargaining agent of the rank and file workers, entered into a Collective Bargaining Agreement (CBA) on October 16, 1985. Article VIII of the CBA provided sick leave with pay benefits. Section 1 granted 15 days sick leave with pay each year to every regular non-intermittent worker with at least one year of service, with any unenjoyed portion convertible to cash at the year’s end, specifying that “only those regular workers of the company whose work are not intermittent, are entitled to the herein sick leave privilege.” Section 3 entitled intermittent field workers who are members of the Regular Labor Pool to vacation and sick leaves per year based on a schedule of hours rendered (from 6 to 15 days), with the conditions for availment in accordance with Sections 1 and 2. The CBA was renewed on April 15, 1989, with Section 3 expanded to include the “present Regular Extra Labor Pool.” During the effectivity of the 1985 CBA until three months after its 1989 renewal, petitioner-company extended sick leave with pay benefits to intermittent field workers and paid the cash equivalent of any unenjoyed portion at the year’s end. In July 1989, petitioner discontinued this cash conversion for intermittent workers, contending that under Section 1, only regular non-intermittent workers were entitled to such commutation. The union filed a grievance, which was referred to voluntary arbitration. The Voluntary Arbitrator ruled in favor of the union, directing petitioner to grant the commutation privilege to intermittent workers from the time it was discontinued and henceforth. Petitioner filed this certiorari petition challenging the award.

ISSUE

Whether the Voluntary Arbitrator committed grave abuse of discretion in ruling that intermittent field workers are entitled to the commutation or conversion to cash of the unenjoyed portion of their sick leave with pay benefits under the 1989 CBA.

RULING

No. The petition was dismissed and the Voluntary Arbitrator’s award was affirmed. The Supreme Court held that:
1. A Collective Bargaining Agreement (CBA) is not merely contractual but impressed with public interest and must be construed liberally, practically, and realistically, giving due consideration to its context and purpose.
2. It is erroneous to isolate Section 1, Article VIII from Section 3. The 1989 CBA has two sections on sick leave applying to two distinct classes: regular non-intermittent workers (Section 1) and intermittent field workers (Section 3). The phrase “herein sick leave privilege” in Section 1 refers specifically to the fixed 15-day sick leave with pay benefit for non-intermittent workers, which is distinct from the variable sick leave (up to 15 days) for intermittent workers under Section 3, based on hours rendered. The conditions for availment under both sections are the same: at least one year of service and certification from a company-designated physician. A reasonable interpretation must be adopted to give efficacy to the contract.
3. Sick leave benefits are intended to replace regular income when an employee is not working and are meant to alleviate the economic condition of workers.
4. The Voluntary Arbitrator had jurisdiction under Article 261 of the Labor Code to hear and decide the unresolved grievance regarding the CBA’s interpretation and implementation. His directive for commutation was a necessary consequence of his arbitral power, and no grave abuse of discretion was committed.
5. The privilege of commutation, having been granted and paid to intermittent workers during the effectivity of the 1985 CBA until three months after the 1989 renewal, had ripened into a company practice or policy which cannot be unilaterally withdrawn or diminished under the prohibition against elimination or diminution of benefits.