GR 121910; (July, 1996) (Digest)
G.R. No. 121910 July 3, 1996
NATIONAL WATERWORKS AND SEWERAGE AUTHORITY (now the METROPOLITAN WATERWORKS and SEWERAGE SYSTEM), petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, KAISAHAN AT KAPATIRAN NG MGA MANGGAGAWA AT KAWANI SA NWSA (PAFLU), ET AL.
FACTS
The controversy originated from a Return-to-Work Agreement dated July 1, 1965, between the then National Waterworks and Sewerage Authority (NAWASA) and the respondent union. The agreement granted employees a P2.25 daily or P49.50 monthly wage increase, effective July 1, 1965. NAWASA implemented this increase only until December 31, 1965, after which it unilaterally discontinued payment. This agreement was later incorporated into a judgment by compromise rendered by the Court of Industrial Relations (CIR) on October 23, 1974. Despite this judgment, NAWASA, which was later renamed the Metropolitan Waterworks and Sewerage System (MWSS), failed to restore the increase, leading the employees to agree to a deferment of their claims due to the agency’s financial state. Following the 1986 EDSA uprising, the employees renewed their demand, culminating in a 1988 motion for restoration filed with the Department of Labor and Employment.
ISSUE
The primary issue is whether the National Labor Relations Commission (NLRC) has jurisdiction over the money claims of MWSS employees arising from the 1965 Return-to-Work Agreement, and whether these claims are barred by prescription or laches.
RULING
The Supreme Court ruled that the NLRC properly exercised jurisdiction. Petitioner’s reliance on MWSS vs. Hernandez, which held that MWSS employment is governed by civil service laws, is misplaced. The critical distinction is that the obligation from the Return-to-Work Agreement arose in July 1965, long before MWSS was created as a government corporation under Republic Act No. 6234 in 1971. At that time, employment with the predecessor NAWASA was not under the civil service. Upon its creation, MWSS assumed all obligations of NAWASA, including this vested contractual right of the employees, which is protected by the constitutional non-impairment clause. Furthermore, the claim seeks to implement a final CIR judgment, not to initiate a new complaint.
The Court also held that the claims are not barred by prescription. The prescriptive period was interrupted by the employees’ repeated written extrajudicial demands and the petitioner’s own pleas for time to pay, as supported by evidence. The agreement to defer payment itself constituted an interruption. The defense of laches was not raised in the proceedings below and thus cannot be considered for the first time on appeal. Consequently, the petition was dismissed and the NLRC resolution affirming the labor arbiter’s order for payment was upheld.