G.R. No. 237729 . October 14, 2020.
Social Housing Employees Association, Inc., represented by its President Will O. Peran, Petitioner, vs. Social Housing Finance Corporation, Respondent.

FACTS

Social Housing Finance Corporation (SHFC), a government-owned and controlled corporation (GOCC), and the Social Housing Employees Association, Inc. (SOHEAI) entered into a Collective Bargaining Agreement (CBA) on December 24, 2008. On December 22, 2011, the parties renegotiated and agreed to adjust several economic benefits, including increases in transportation allowance, funeral assistance, children’s allowance, and the introduction of a new anniversary bonus. However, the Governance Commission for GOCCs (GCG) informed SHFC that it had no authority to grant these new increases due to a moratorium under Executive Order No. 7, s. 2010, and the provisions of Republic Act No. 10149 (The GOCC Governance Act of 2011). Consequently, SHFC revoked the new benefits.
SOHEAI contested this revocation, arguing it violated the non-diminution of benefits principle and also claimed that an annual State of the Nation Address (SONA) bonus had ripened into a regular benefit. The dispute was elevated to the Panel of Voluntary Arbitrators (PVA), which ruled in favor of SOHEAI, ordering SHFC to comply with the 2011 and subsequent 2013 CBA and to pay the SONA bonuses. SHFC appealed to the Court of Appeals (CA).

ISSUE

Whether the Panel of Voluntary Arbitrators had jurisdiction to enforce the new and increased economic benefits in the CBA and to declare the SONA bonus a regular benefit, given the statutory restrictions imposed on GOCCs by E.O. No. 7 and R.A. No. 10149 .

RULING

The Supreme Court denied the petition and affirmed the CA’s decision. The Court held that the PVA had no jurisdiction to order the implementation of the disputed CBA economic provisions. The legal logic is grounded in the hierarchy of laws and specific statutory mandates governing GOCCs. While the constitutional right to collective bargaining is recognized, it is not absolute and must yield to specific laws of public order.
R.A. No. 10149 explicitly transferred the authority to establish the compensation framework for all GOCCs from their governing boards to the President, upon recommendation of the GCG. Concurrently, E.O. No. 7 imposed a moratorium on the grant of new or increased benefits without presidential approval. Therefore, SHFC’s governing board was legally prohibited from negotiating and granting the economic increases in the 2011 CBA, as these were contrary to the express mandates of E.O. No. 7 and R.A. No. 10149 . A CBA, being a contract, cannot contravene law, public order, or public policy. Consequently, the PVA could not validate or enforce provisions that were void from inception for being illegal.
Regarding the SONA bonus, the Court ruled it did not ripen into a demandable, regular benefit. It was a gratuitous payment dependent on the availability of corporate funds and the discretion of management, lacking the essential elements of regularity and contractual obligation. Thus, its discontinuance did not violate the principle of non-diminution of benefits.