GR 127598; (August, 2000) (Digest)
G.R. No. 127598 ; August 1, 2000
MANILA ELECTRIC COMPANY, petitioner, vs. HON. SECRETARY OF LABOR LEONARDO QUISUMBING and MERALCO EMPLOYEES AND WORKERS ASSOCIATION (MEWA), respondents.
FACTS
This case involves a Motion for Partial Modification filed by Manila Electric Company (MERALCO) seeking to alter the Supreme Court’s Resolution dated February 22, 2000. That Resolution had modified an earlier Decision concerning a collective bargaining agreement (CBA) arbitral award. The February 22 Resolution ordered the arbitral award to retroact from December 1, 1995 to November 30, 1997, and increased a wage award. MERALCO contested the retroactivity ruling, arguing it was logically flawed, contravened jurisprudence, and imposed an excessive financial burden estimated at P800 million. MERALCO prayed for the CBA term to be fixed from December 28, 1996 to December 27, 1998, or alternatively, for retroactivity to commence on June 1, 1996.
ISSUE
The core issue is whether the Supreme Court correctly determined the retroactive effectivity period of the CBA arbitral award issued by the Secretary of Labor under Article 263(g) of the Labor Code.
RULING
The Supreme Court granted MERALCO’s Motion for Partial Modification. The Court re-examined its prior ruling and the applicable legal provisions, particularly Article 253-A of the Labor Code, which mandates that the economic provisions of a CBA be renegotiated every three years. The Court acknowledged the need to reconcile its ruling with established jurisprudence, such as St. Luke’s Medical Center v. Torres, which recognizes the Secretary of Labor’s discretionary power to determine the effectivity of arbitral awards in the absence of a legal prohibition.
The Court clarified the rule for determining retroactivity when the Secretary issues an arbitral award after the parties have failed to agree. It held that such an award shall retroact to the first day after the six-month period following the expiration of the last CBA. Applying this rule to the case, the last CBA expired on November 30, 1995. The six-month period for negotiation thus ended on May 31, 1996. Consequently, the arbitral award should retroact to June 1, 1996. The Court therefore modified the effectivity period to two years, from June 1, 1996 to May 31, 1998. It also affirmed that the increased wage award of P2,000 was payable to rank-and-file employees during this period, subject to monetary advances already granted. The status quo or hold-over principle governs the period between the CBA’s expiration and the award’s effectivity.