G.R. No. 203957 July 30, 2014
UNIVERSITY OF SANTO TOMAS FACULTY UNION, Petitioner, vs. UNIVERSITY OF STO. TOMAS, Respondent.

FACTS

The University of Santo Tomas Faculty Union (USTFU) demanded from the University of Santo Tomas (UST) the remittance of ₱65,000,000.00, representing alleged deficiencies in its contributions to the hospitalization and medical benefits fund under their 1996-2001 Collective Bargaining Agreement (CBA). USTFU’s position was that under Article XIII of the CBA, UST was obligated to establish a perpetual fund with an initial ₱2,000,000.00 for school year 1996-97 and to contribute specified amounts in subsequent years (₱1,000,000.00 for 1997-98, ₱1,000,000.00 for 1998-99, and ₱4,000,000.00 annually for 1999-2000 and 2000-2001 per a Memorandum of Agreement). USTFU argued that these amounts should “slide in” or be carried over and remitted annually in subsequent years, as the economic benefits were chargeable to the tuition fee share of the faculty. USTFU claimed that from 1996-2001, UST should have remitted ₱25,000,000.00 but only remitted ₱8,000,000.00, leaving a deficiency of ₱17,000,000.00. Furthermore, USTFU asserted that after the CBA term, UST should continue to remit ₱8,000,000.00 annually, leading to a total claim of ₱81,000,000.00 by 2006. UST refused, contending the contributions were one-time allocations per school year as scheduled. UST also sought dismissal of the complaint filed before the Labor Arbiter, arguing it involved CBA interpretation and implementation, which falls under the exclusive jurisdiction of voluntary arbitrators as per the grievance machinery provisions in the CBA. The Labor Arbiter and the National Labor Relations Commission ruled in favor of USTFU, but the Court of Appeals set aside these decisions, finding grave abuse of discretion and holding that the Labor Arbiter had no jurisdiction.

ISSUE

Whether the Labor Arbiter had jurisdiction over the complaint filed by USTFU against UST concerning the alleged deficiency in contributions to the hospitalization and medical benefits fund under the 1996-2001 CBA.

RULING

No. The Supreme Court ruled that the Labor Arbiter had no jurisdiction over the complaint. The dispute involved the interpretation and implementation of the economic provisions of the Collective Bargaining Agreement, specifically the obligations regarding the hospitalization and medical benefits fund. Article XXII of the 1996-2001 CBA established a grievance procedure ending in voluntary arbitration for “any misunderstanding or dispute arising from the interpretation or implementation of this Agreement.” The Court held that such disputes are expressly excluded from the jurisdiction of Labor Arbiters under Article 217 of the Labor Code and are within the exclusive original jurisdiction of voluntary arbitrators or panels. Since the complaint was essentially about UST’s alleged failure to comply with its CBA obligations—a question of implementation—it was a grievance that must be resolved through the parties’ agreed CBA machinery. The Court affirmed the Court of Appeals’ decision to set aside the rulings of the Labor Arbiter and NLRC, without prejudice to USTFU’s right to refile the case in the proper forum (i.e., through the grievance procedure and voluntary arbitration).