G.R. No. 118069 . November 16, 1998.
Producers Bank of the Philippines (now First Philippine International Bank), petitioner, vs. National Labor Relations Commission and Producers Bank Employees Association, respondents.

FACTS

Petitioner bank was placed under a conservator by the Central Bank. The respondent union sought the implementation of specific provisions in their Collective Bargaining Agreement (CBA) concerning a retirement plan and uniform allowance. The acting conservator objected to implementing these provisions, leading to a six-month deadlock. The union consequently filed a complaint for unfair labor practice and CBA violation. The Labor Arbiter dismissed the complaint, ruling that the conservator, tasked with protecting the bank’s interest, was under no compulsion to implement the CBA resolutions if deemed detrimental to the conservatorship program.
The NLRC reversed the Labor Arbiter’s decision on appeal. It emphasized the constitutional mandate to protect labor and ordered the petitioner to implement the disallowed CBA provisions. The petitioner now seeks a reversal from the Supreme Court, additionally arguing that the Labor Arbiter and NLRC had no jurisdiction over the dispute, which should have been brought before a voluntary arbitrator under the Labor Code.

ISSUE

The primary issue is whether a bank conservator can unilaterally disallow the implementation of valid CBA provisions. A secondary issue is whether the petitioner is estopped from questioning the jurisdiction of the Labor Arbiter and NLRC.

RULING

The Supreme Court dismissed the petition and affirmed the NLRC. On the main issue, the Court ruled that the conservator’s powers, while extensive, are limited to preserving the bank’s assets and restoring its viability. These powers cannot extend to the unilateral repudiation of valid and perfected contracts like a CBA, as this would violate the constitutional prohibition against impairing the obligation of contracts. The conservator merely steps into the shoes of the bank’s board of directors and cannot do what the board itself could not do—rescind a valid contractual obligation. The CBA constitutes the law between the parties, and its provisions on retirement and allowances, which form part of the compensation for services rendered, must be upheld, especially under the policy of social justice and protection to labor.
On the jurisdictional issue, the Court applied the principle of estoppel. The petitioner actively participated in the proceedings before the Labor Arbiter and the NLRC by filing pleadings and arguing its defenses without raising the issue of jurisdiction. It was only after an adverse decision from the NLRC that the petitioner raised this procedural flaw. The Court held that a party cannot be permitted to speculate on the outcome of a case and raise jurisdiction only after receiving an unfavorable judgment. Consequently, the petitioner is deemed to have waived its right to challenge jurisdiction.