G.R. No. L-33621 July 26, 1976
MRR YARD CREW UNION, ANTONIO VERCELES, ET AL., petitioners, vs. PHILIPPINE NATIONAL RAILWAYS and THE COURT OF INDUSTRIAL RELATIONS, respondents.

FACTS

Antonio Verceles was designated as Acting Chief of the Statistical Division of the Philippine National Railways (PNR) on October 25, 1962, via Office Order No. 2, which explicitly stated the appointment was “without additional compensation.” He performed all the duties of this higher position but continued to receive his lower annual salary of P3,720 instead of the P6,600 attached to the chief’s position. A collective bargaining agreement (CBA) between PNR and the supervisors’ association, effective May 24, 1962, contained an “actual work, actual pay” clause (Article X), mandating payment of the higher salary when an employee is assigned to a higher-ranked position. This clause was substantially renewed in a subsequent CBA dated December 23, 1964 (Article IX).
Verceles and his union repeatedly requested both payment of the salary differential and his permanent appointment to the position. After PNR’s inaction, they filed a petition with the Court of Industrial Relations (CIR). The CIR ruled that Verceles was entitled to salary differentials but only effective from December 23, 1964 (the date of the later CBA), and refused to rule on his prayer for a permanent appointment. Petitioners appealed, arguing the differential should run from October 25, 1962, and that the CIR unjustly avoided the appointment issue.

ISSUE

The primary issues were: (1) Whether Verceles’s entitlement to salary differentials should be effective from October 25, 1962, or only from December 23, 1964; and (2) Whether the CIR committed injustice in not ruling on his plea for a permanent appointment.

RULING

The Supreme Court modified the CIR’s order. On the first issue, the Court held that Verceles was entitled to salary differentials effective October 25, 1962, the date of his designation. The legal logic centered on the application of the “actual work, actual pay” principle from the CBA in force at the time of his assignment. The May 24, 1962 CBA was operative when Verceles began acting as chief. The Court emphasized that the subsequent 1964 CBA merely continued this stipulation. To deny the effectivity of the 1962 agreement would violate the Industrial Peace Act (RA 875), which protects existing CBAs from unilateral modification or termination without proper notice. The Court also noted that allowing PNR to evade the terms of the binding 1962 CBA would condone an unfair labor practice.
On the second issue, the Court ruled that Verceles’s prayer for a permanent appointment had been rendered moot and academic by his retirement in 1967. Citing precedent, the Court held that a supervening event like retirement, absent proof it was involuntary, extinguishes the practical need for such a ruling. Therefore, the CIR’s refusal to pass upon this claim was not an injustice. The dispositive portion directed PNR to pay salary differentials from October 25, 1962, until Verceles’s retirement on June 13, 1967.