GR 90426; (December, 1989) (Digest)
G.R. No. 90426 , December 15, 1989
SIME DARBY PILIPINAS, INC., petitioner, vs. DEPUTY ADMINISTRATOR BUENAVENTURA C. MAGSALIN as Voluntary Arbitrator and the SIME DARBY EMPLOYEES ASSOCIATION, respondents.
FACTS
Petitioner Sime Darby Pilipinas, Inc. and private respondent Sime Darby Employees Association (SDEA) executed a Collective Bargaining Agreement (CBA) containing a provision stating, “A performance bonus shall be granted, the amount of which is to be determined by the Company depending on the return of capital investment as reflected in the annual financial statement.” For the fiscal year 1988-1989, the company refused to grant the bonus, contending that worker performance, measured by production output, wastage rates, and productivity per man-hour, did not justify it. The union filed a request for preventive conciliation, leading the parties to voluntarily submit the dispute to arbitration, agreeing that the arbitrator’s award would be final and executory.
ISSUE
Whether the Voluntary Arbitrator committed grave abuse of discretion in awarding a performance bonus equivalent to 75% of the employees’ monthly basic pay for the fiscal year 1988-1989.
RULING
The Supreme Court dismissed the petition, finding no grave abuse of discretion by the Voluntary Arbitrator. The Court emphasized that a petition for certiorari under Rule 65 requires a clear showing of an act without or in excess of jurisdiction, not a mere error of judgment. The arbitrator’s award is final and executory after ten days from receipt. Examining the CBA provision, the Court agreed with the arbitrator’s interpretation that the grant of a performance bonus was mandatory; the company’s discretion lay only in determining the amount based on return on investment. The arbitrator validly considered the company’s financial health, including net earnings of approximately P100 million in 1988 and over P95 million in the first semester of 1989, and the increase in retained earnings. He also implicitly balanced this with total labor costs and the constitutional right of enterprises to reasonable returns. The award of 75% was not arbitrary or capricious. Procedural claims of denied due process, based on the arbitrator issuing the award before receiving the company’s reply to the union’s position paper, were found meritless, as the reply was deemed reiterative. The temporary restraining order was lifted.