G.R. No. 207853, March 20, 2022
CLARK DEVELOPMENT CORPORATION, PETITIONER, AND GOVERNANCE COMMISSION FOR GOCCS (GOVERNMENT-OWNED AND-CONTROLLED CORPORATIONS), PETITIONER-INTERVENOR, VS. ASSOCIATION OF CDC SUPERVISORY PERSONNEL UNION, RESPONDENT.

FACTS

On March 20, 2012, Clark Development Corporation (CDC), a GOCC, executed a renegotiated Collective Bargaining Agreement (CBA) with its supervisory employees union, the Association of CDC Supervisory Personnel (ACSP). The CBA granted additional benefits including salary increases, allowances, and a signing bonus. The Governance Commission for GOCCs (GCG) opined that the CBA violated Section 9 of Executive Order (EO) No. 7, series of 2010, which imposed a moratorium on increases in salaries, allowances, incentives, and other benefits in GOCCs unless specifically authorized by the President. The President did not give CDC authority to renegotiate the CBA. The Bases Conversion Development Authority (BCDA) also recommended deferment or renegotiation. ACSP filed a complaint for failure to implement the CBA. The Accredited Voluntary Arbitrator (AVA) ruled in favor of ACSP, holding that the President’s approval was presumed pursuant to the rule of liberal construction in favor of labor. The Court of Appeals affirmed the AVA’s decision, stating EO No. 7 did not apply to CDC as a GOCC without an original charter and to ACSP as supervisory employees, and again presumed the President’s approval.

ISSUE

Whether the economic terms of the renegotiated CBA granting additional benefits are valid and enforceable despite the moratorium imposed by EO No. 7, s. 2010, and without the specific authorization of the President.

RULING

The petition is meritorious. The economic terms of the CBA are void. The right of government employees to collective bargaining is subject to limitations, and only terms and conditions not fixed by law can be negotiated. EO No. 7, s. 2010, imposed a broad moratorium on increases in salaries, allowances, incentives, and other benefits in GOCCs “until specifically authorized by the President.” This moratorium was intended to control excessive grants and strengthen supervision over GOCC compensation. The clause “until specifically authorized by the President” means the moratorium continues until the President lifts it. The Court took judicial notice that the President never lifted the moratorium from its issuance on September 8, 2010. Therefore, the CBA executed on March 20, 2012, violated this law. The presumption of the President’s approval based on the rule of liberal construction in favor of labor cannot contravene a clear legal prohibition. Republic Act No. 10149 (The GOCC Governance Act of 2011) further supports the President’s authority over GOCC compensation. The CA and AVA erred in relying on Section 10 of EO No. 7, which only suspended benefits for board members until December 31, 2010, as this did not affect the general moratorium in Section 9 applicable to all GOCC employees. The motion for intervention of the GCG was granted due to its legal interest as the oversight body for GOCCs.