CIRTEK EMPLOYEES LABOR UNION-FFW V. CIRTEK ELECTRONICS, INC.
G. R. NO. 190515
JUNE 6, 2011
FACTS:
Petitioner and respondent have an existing Collective Bargaining Agreement (CBA). The Secretary of
Labor assumed jurisdiction over the bargaining deadlock between respondent and petitioner after the
parties failed to reach of settlement, particularly on wage increase after renegotiations, conciliation and
voluntary arbitration proceedings.
Pending resolution, respondent created a Labor Management Council (LMC) composed of the remaining
officers of petitioner and created a Memorandum of Agreement (MOA) providing for daily wage
increases of ₱6.00 per day effective January 1, 2004 and ₱9.00 per day effective January 1, 2005. This
was submitted to the Secretary of Labor and petitioner gave the assurance that should the Secretary
order a higher wage increase, respondent would comply.
The Secretary of Labor then awarded a wage increase of ₱10.00 per day effective January 1, 2004 and
from ₱15.00 per day effective January 1, 2005, and all other benefits in the MOA. Respondent moved for
reconsideration by submitting a "Muling Pagpapatibay ng Pagsang-ayon sa Kasunduan na may Petsang
ika-4 ng Agosto 2005", claiming that union members waived their rights and benefits, but the Secretary
of Labor denied.
Upon appeal to the CA, the CA set aside the Secretary pf Labor’s decision and ruled that the latter
gravely abused its discretion for not giving credence to the minutes of the meeting attending the forging
of the unverified MOA nor the “Paliwanag” of the respondent union members on their signature to the
unnotarized MOA. Hence, the petition before the Supreme Court.
ISSUE:
1) Whether the Secretary of Labor is authorized to give an award higher than that agreed upon in the
MOA
2) Whether parol evidence should not be strictly applied in labor cases
3) How should the CBA be construed?
RULING:
1) Yes. It is well-settled that the Secretary of Labor, in the exercise of his power to assume jurisdiction
under Art. 263 (g) of the Labor Code, may resolve all issues involved in the controversy including the
award of wage increases and benefits. While an arbitral award cannot per se be categorized as an
agreement voluntarily entered into by the parties because it requires the intervention and imposing
power of the State thru the Secretary of Labor when he assumes jurisdiction, the arbitral award can be
considered an approximation of a collective bargaining agreement which would otherwise have been
entered into by the parties, hence, it has the force and effect of a valid contract obligation.
That the arbitral award was higher than that which was purportedly agreed upon in the MOA is of no
moment. For the Secretary, in resolving the CBA deadlock, is not limited to considering the MOA as basis
in computing the wage increases. He could, as he did, consider the financial documents submitted by
respondent as well as the parties’ bargaining history and respondent’s financial outlook and
improvements as stated in its website.
2) Yes. The appellate court’s brushing aside of the "Paliwanag" and the minutes of the meeting that
resulted in the conclusion of the MOA because they were not verified and notarized, thus violating, so
the appellate court reasoned, the rules on parol evidence, does not lie. Like any other rule on evidence,
parol evidence should not be strictly applied in labor cases.
The reliance on the parol evidence rule is misplaced. In labor cases pending before the Commission or
the Labor Arbiter, the rules of evidence prevailing in courts of law or equity are not controlling. Rules of
procedure and evidence are not applied in a very rigid and technical sense in labor cases. Hence, the
Labor Arbiter is not precluded from accepting and evaluating evidence other than, and even contrary to,
what is stated in the CBA
3) While the terms and conditions of a CBA constitute the law between the parties, it is not, however, an
ordinary contract to which is applied the principles of law governing ordinary contracts. A CBA, as a
labor contract within the contemplation of Article 1700 of the Civil Code of the Philippines which
governs the relations between labor and capital, is not merely contractual in nature but impressed with
public interest, thus, it must yield to the common good. As such, it must be construed liberally rather
than narrowly and technically, and the courts must place a practical and realistic construction upon it,
giving due consideration to the context in which it is negotiated and purpose which it is intended to
serve
