G.R. No. 178086 September 14, 2015
UNIVERSITY OF THE IMMACULATE CONCEPTION, Petitioner, vs. OFFICE OF THE SECRETARY OF LABOR AND EMPLOYMENT, UIC TEACHING AND NONTEACHING EMPLOYEES UNION-FFW, OFELIA DIAPUEZ, MELANIE DE LA ROSA, ANGELINA ABADILLA, LELIAN CONCON, MARY ANN DE RAMOS, ZENAIDA CANOY, ALMA VILLA CARLOS, PAULINA PALMA GIL, JOSIE BOSTON, GEMMA GALOPE and LEAH CRUZA, Respondents.

FACTS

The case involves a protracted labor dispute between petitioner University of the Immaculate Conception (UIC), a non-stock, non-profit educational institution, and respondent UIC Teaching and Non-Teaching Employees Union-FFW (the Union), the certified sole bargaining agent of UIC’s rank and file employees. The dispute dates back to 1994. On January 23, 1995, the Secretary of Labor and Employment (the Secretary) assumed jurisdiction over the dispute (OS-AJ-003-95) under Section 263(g) of the Labor Code. The consolidated petitions involve two main issues: (1) the authority of the Secretary to order the creation of a tripartite committee to determine the net incremental proceeds of tuition fee increases for school years 1995-2000, and (2) the legality of the dismissal of twelve employees (Respondent Employees) in connection with the dispute.
The factual background is as follows: In 1994, the Union filed a notice of strike due to bargaining deadlock and unfair labor practice. The parties agreed on a formula for salary increases based on a percentage of tuition fee increments. A separate issue arose regarding UIC’s demand to exclude certain employees (secretaries, registrars, accounting personnel, guidance counselors) from the bargaining unit as confidential employees. A voluntary arbitration panel sustained UIC’s position. When the affected employees chose to retain both their positions and union membership, UIC sent them termination notices on February 21, 1995, leading to another notice of strike. The Secretary, in an Order dated March 28, 1995, suspended the effects of the termination and ordered reinstatement.
On January 23, 1995, the Secretary assumed jurisdiction over a second notice of strike filed by the Union concerning the computation of the 70% incremental proceeds and unfair labor practices. On October 8, 1998, the Secretary issued an Order directing the parties to execute a Collective Bargaining Agreement (CBA) embodying the agreed salary increase formula and upholding the validity of a strike declared by the Union. This Order was affirmed by the Supreme Court.
On April 21, 2004, the parties signed an Agreement stating that all issues were settled except the interpretation of a “full settlement clause” and agreeing on a method to compute and compare the net incremental proceeds for school years 1995-2000. On June 8, 2004, the parties signed the CBA for school years 1995-2000 and agreed to rescind the relevant paragraph of the April 21, 2004 Agreement. Subsequently, the Union moved for the creation of a tripartite committee to compute the net proceeds. The Secretary granted the motion on July 5, 2004. The tripartite committee computed the amount, and on September 18, 2006, the Secretary issued a Resolution ordering UIC to distribute P11,070,473.00 to the affected employees and allowing any illegal dismissal case to proceed.
Separately, on June 20, 2006, the Secretary issued a Resolution ruling that the Respondent Employees were illegally dismissed and directing their reinstatement and payment of backwages and benefits.
UIC challenged both the tripartite committee order/computation and the illegal dismissal ruling via separate Petitions for Certiorari before the Court of Appeals. The Court of Appeals consolidated the cases and denied the petitions on April 24, 2007, upholding the Secretary’s actions. UIC’s motions for reconsideration were denied on May 31, 2007, leading to the present petition.

ISSUE

1. Whether the Secretary of Labor and Employment, after assuming jurisdiction over a labor dispute and after the parties have signed a CBA, retains the authority to order the creation of a tripartite committee to compute the net incremental proceeds of tuition fee increases and to issue a monetary award based on that computation.
2. Whether the Respondent Employees (confidential employees such as secretaries, registrars, accounting personnel, and guidance counselors) were illegally dismissed for refusing to resign from the Union.

RULING

1. Yes. The Supreme Court upheld the Secretary’s authority. The power of the Secretary to assume jurisdiction under Article 263(g) of the Labor Code is plenary and discretionary, aimed at settling disputes in industries indispensable to the national interest. This power includes the authority to resolve all questions and controversies arising from the dispute, including the computation of benefits agreed upon by the parties. The Court found that the computation of the net incremental proceeds was a necessary incident to the implementation of the salary increase formula that was at the very core of the labor dispute over which the Secretary had assumed jurisdiction. The signing of the CBA did not divest the Secretary of jurisdiction to enforce and execute the terms of the settlement he had earlier ordered. The tripartite committee was a valid mechanism to implement the agreed-upon formula, and its computation of P11,070,473.00 as the deficiency was affirmed.
2. Yes. The Supreme Court affirmed that the Respondent Employees were illegally dismissed. The Court ruled that while the Respondent Employees, due to their positions (secretaries, registrars, accounting personnel, guidance counselors), were considered confidential employees, this classification does not automatically disqualify them from union membership. Confidential employees are those who (a) assist or act in a confidential capacity to persons who formulate, determine, and effectuate management policies, or (b) have access to confidential information regarding management policies affecting labor relations. The Court found that the Respondent Employees did not fall under the first category as they did not assist managerial employees. Regarding the second category, the Court held that mere access to confidential information, such as student grades or financial records, is not sufficient to bar union membership. The confidential information must relate to labor relations, such as collective bargaining strategies or confidential employee data used for that purpose. Since UIC failed to prove that the Respondent Employees had access to such labor relations information, they could not be validly excluded from the bargaining unit. Therefore, their dismissal for choosing to remain union members constituted illegal dismissal. The award of reinstatement and full backwages was sustained.