G.R. No. L-81785 August 18, 1988
PHILIPPINE GEOTHERMAL, INC., petitioner, vs. UNDERSECRETARY OF LABOR CARMELO NORIEL AND FEDERATION OF FREE WORKERS, PGI CHAPTER, respondents.

FACTS

The collective bargaining agreement (CBA) between Philippine Geothermal, Inc. (Company) and the Federation of Free Workers-PGI Chapter (Union) was set to expire on October 31, 1986. During the freedom period, the Union submitted proposals for renegotiation. While negotiations were pending, the Company unilaterally granted a P200.00 monthly salary increase effective November 1, 1986. Subsequently, a deadlock was declared, leading to a strike notice and picketing. The Secretary of Labor assumed jurisdiction and, in a March 1987 Order, resolved the deadlock by awarding, among other benefits, a P800.00 monthly wage increase for the first year. The parties signed a new CBA retroactive to November 1, 1986, incorporating this award.
In implementing the new CBA, the Company paid only a P600.00 monthly increase, claiming the earlier P200.00 grant was creditable against the P800.00 award. The Union contested this, filing a strike notice for CBA violation. The dispute was submitted to voluntary arbitration before Undersecretary Carmelo Noriel, who ruled in favor of the Union, directing the Company to pay the P200.00 differential. The Company’s motion for reconsideration was denied, prompting this petition alleging grave abuse of discretion. The National Power Corporation (NPC) also filed a petition to intervene.

ISSUE

Whether the P200.00 salary increase granted by the Company during CBA negotiations is creditable against the P800.00 wage increase mandated under the new CBA.

RULING

The Supreme Court dismissed the petition and denied NPC’s intervention. On the main issue, the Court upheld the arbitrator’s decision, finding no grave abuse of discretion. The determination was essentially factual, reviewing evidence and surrounding circumstances. The Company failed to substantiate its claim of a clear agreement that the P200.00 was creditable. Conversely, the Union pointed to meeting minutes indicating an agreement to exclude the P200.00 from the negotiated first-year increase. The Court noted the Company’s own declaration that the P200.00 was granted pursuant to the old CBA and Article 254 of the Labor Code, even though no such legal or contractual obligation existed during negotiations.
Thus, the P200.00 increase was correctly deemed a separate, unilateral act of grace by the Company, which could not be withdrawn. The Labor Secretary’s Order and the new CBA were clear and unequivocal in mandating a P800.00 increase without qualification. Therefore, the P200.00 is not creditable, and both increases must be given. Regarding NPC’s intervention, the Court found it had no direct interest in the litigation, as it was not a party to the CBA or the dispute. Its claimed interest was merely indirect, concerning possible reimbursement. Furthermore, intervention was filed too late, after the arbitration proceedings had concluded.