Source: http://lawlibrary.chanrobles.com/index.php?option=com_content&view=article&id=52987:gr-169940-2009&catid=1522&Itemid=566
Timestamp: 2019-04-26 11:39:31+00:00

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UNIVERSITY OF SANTO TOMAS, Petitioner, v. SAMAHANG MANGGAGAWA NG UST (SM-UST), Respondent.
Assailed in this Petition for Review on Certiorari is the January 31, 2005 Decision1 of the Court of Appeals in CA-G.R. SP No. 72965, which affirmed the May 31, 2002 Order of the Secretary of the Department of Labor and Employment (DOLE) directing the parties to execute a Collective Bargaining Agreement incorporating the terms in said Order with modification that the signing bonus is increased to P18,000.00. Also assailed is the September 23, 2005 Resolution2 denying the motion for reconsideration.
In November 2001, the parties agreed in principle on all non-economic provisions of the proposed CBA, except those pertaining to Agency Contract or contractualization (Art. III, Sec. 3 of the proposed CBA), Union Leave of the SM-UST President (No. 4 of the Addendum to the proposed CBA), and hiring preference.
On the other hand, respondent reduced its demands for the first year from P8,000.00 monthly salary increase per employee to P7,000.00, and from P75,000.00 signing bonus to P60,000.00 for each employee, but petitioner insisted on its final offer. As a result, respondent declared a deadlock and filed a notice of strike with the National Conciliation and Mediation Board -National Capital Region (NCMB-NCR).
Conciliation and mediation proved to be futile, such that in January 2002, majority of respondent's members voted to stage a strike. However, the DOLE Secretary timely assumed jurisdiction over the dispute, and the parties were summoned and heard on their respective claims, and were required to submit their respective position papers.
x x x In arguing on the reasonableness of its demands, it cites the income of the school from tuition fee increases and the allocation of this amount to the faculty and non-teaching employees of the School x x x. According to the Union, the School's estimate of the tuition fee increase for the school year 2003-2004 at P76,410,000.00 is erroneous. The Union argues that the total income of the School from tuition fee increases for school year 2003-2004 is P101,000,000.00 more or less, or a net of P98,252,187.36, after deducting adjustments for additional charges, allowances and discounts. This is based on the computation of the School's Assistant Chief Accountant x x x.
The Union feels that the members of the bargaining unit are the least favored. On the wage increases alone, the Union points out that a comparison of the average monthly salary of the non-academic personnel from school year 1995-1996 up to school year 1999-2000 shows a declining relative percentage. For this period, the bargaining unit enjoyed an average monthly salary increase of 14.234%, the lowest being 8.9% in school year 1998-1999 and the highest being 15.38% in school year 1995-1996. The School's offer for this CBA cycle translates to an increase of only 8.23%, specified as follows: (1) 5.69% increase in school year 2000-2001 (P1,000.00); (2) 9.15% increase in school year 2001-2002 (P1,700.00); and (3) 9.86% increase in 2002-2003 (P2,000.00).
The Union also submits a comparative chart of the allocation to non-academic personnel of the 70% increase in tuition fees from school year 1996-1997 to 1999-2000 x x x. The average percentage allocation to non-academic personnel during this period is 32.8% of the total 70% of total tuition fee increases, the lowest being 20.83% for the school year 1999-2000 and the highest being 43.11% of the total allocation in 1997-1998. Using P101,036,330.37 as the estimated increase in tuition fee, 70% of this amount, net of adjustment, is P68,775,831.15 x x x. The Union argues that it is entitled to at least the average percentage of allocation to it for the past four (4) school years which is at 32.85%, or P22,592,860.53 of the total allocation of P68,775,831.15.
It maintains, however, that it is entitled to more than the average percentage of its allocation of the total 70% because it is School practice to allocate more than 70% of the total tuition fee increases for the salaries and benefits of School employees. Comparing the employees' share in the tuition fee increases from school year 1996-1997 to 1999-2000, the School allocated an average percentage of 76.75% for the benefits and salaries of its personnel, or from a low of 72% in 1998-1999 to a high of 84.4% in 1996-1997 x x x. If the average is applied this year, the Union argues that the available amount is P75,407,786.29. Because of this practice, the Union maintains that the School is already estopped from arguing that the allocation for employee wages and benefits should not exceed 70% of tuition fee increases.
Aside from this amount, the Union maintains that it is entitled to an additional P15,475,000.00, sourced from other income, for the signing bonus or one-time grant of P25,000.00 per member x x x. The Union alleges that it is school practice to appropriate other funds for the wages and benefits of its employees. For the school year 1996-1997, the School used funds from other sources to fund the P2,000,000.00 hospitalization fund and 50% of the signing bonus for the academic personnel; in 1997-1998 and 1998-1999, it used additional funds for the P1,000,000.00 hospitalization fund of the academic personnel; and in 1999-2000, it used other funds to finance the one-time grant of P10,000.00 each to the non-academic personnel and additional P4,000,000.00 for the hospitalization fund of the academic employees or a total of P17,592,500.00 for the past four (4) academic years x x x.
The School cannot claim that the funds are insufficient to cover the expenses for the CBA because for the fiscal year 2000-2001 alone, the accumulated excess of revenues over expenses at the end of the year totaled P148,881,678.00 x x x. The Statement of Revenues and Expenses from School Operations collated from the audited Financial Statements of the School for the school years 1996-1997 up to 2000-2001 shows that except for school years 1996-1997 and 2000-2001, the School posted a net income from school operations. Its average annual net income from school operations alone is P7,956,187.00 and the net loss in 2000-2001 was a result of the revaluation of the Main Building as part of the assets from its fully depreciated value so that a new depreciation cost was reported and charged to general expenses.
1st Year - P38,067,860.00 distributed as follows: P22,592,860.53 (share from tuition fee increases) for the economic benefits with sliding effect on the succeeding years; plus P15,475,000.00 for the one-time signing bonus of P25,000.00 for each employee sourced from other funds.
2nd Year - P33,568,970.00 to apply to its demand for salary increase, Christmas bonus, rice subsidy and clothing/uniform allowance.
3rd Year - P46,653,295.37 to apply to its demand for salary increase, Christmas bonus, medicine allowance, mid-year bonus allowance and meal allowance.
Based on the Union's computation, its demands will cost the School a total of P133,765,125.37 for the entire three (3) year period.
Given all the foregoing, we cannot follow the Union's formula and in effect disregard the School's two other bargaining units; to do so is a distortion of economic reality that will not bring about long term industrial peace. We cannot simply adopt the School's proposal in light of the parties' bargaining history, particularly the pattern of increases in the last cycle. Considering all these, we believe the following to be a fair and reasonable resolution of the wage issue.
These increases, at a three-year total of P68,337,600, are less than the three (3)-year increases in the last CBA cycle to accommodate the School's proven lack of capacity to afford a higher increase, but are still substantial enough to accommodate the workers' needs while taking into account the symmetry that must be maintained with the wages of the other bargaining units. On a straight line aggregate of P5,200.00, the non-academic personnel will receive P498.48 less than an Instructor I (member of the faculty union) who received an aggregate of P5,698.48, thus maintaining the gap between the teaching and non-teaching personnel. The salary difference will as well be maintained over the three (3)-year period of the CBA. An RFI employee (member of the union's bargaining unit) will receive a monthly salary of P21,695.95 while an Instructor I (faculty union member) will have a salary of P22,948.00; while an RF5-5/A (member of the union's bargaining unit) will receive a salary of P23,462.97 compared to an Asst. Prof. 1 (faculty) who will receive P29,250.96. From a total cost of salary increases for the first year at P7,428,000, these costs will escalate to P22,284,000 in the second year, and to P38,625,000 at the third year. Given these figures, the amounts available for distribution and the member of groups sharing these amounts, these increases are by no means minimal.
A review of the past bargaining history of the parties shows that the School as a matter of course grants a signing bonus. This ranged from P8,000.00 during the first three (3) years of the last CBA to P10,000.00 during the remaining two (2) years of the re-negotiated term. In this instance, the School's offer of P10,000.00 signing bonus is already reasonable considering that the School could have taken the position that no signing bonus is due on compulsory arbitration in line with the ruling in Meralco v. Quisumbing et al., G.R. No. 127598, 27 January 1999.
We note that the members of the bargaining unit receive a P6,500.00 Christmas bonus. Considering this current level, we believe that the School's offer of P2,000.00 for each of the next three (3) years of the CBA is already reasonable. Under this grant, the workers' Christmas bonus will stand at a total of P12,500 at the end of the third year.
We believe that the current practice is already reasonable and should be maintained.
The Union failed to show any justification for its demand on this item, hence its demand on the increase of meal allowance is denied.
We believe an additional 2 sacks of rice on top of the existing 6 sacks of rice is reasonable and is hereby granted, effective on the second year.
In the absence of any clear justification for an improvement of this benefit, we find the existing practice to be already reasonable and should be maintained.
The Union has not established why the School should grant the benefit; hence this demand is denied.
The P3,000.00 bonus is already fair and should be maintained.
There is no basis to increase this benefit, the current level being fair and reasonable.
The existing provision is already generous and should be maintained.
We are convinced that the 100% of basic salary per year of service is already reasonable and should be maintained.
Based on the Minutes of Meeting on 18 October 2001 and 8 November 2001, the parties agreed to retain the existing provision; hence, our ruling on this matter is no longer called for.
The Union's proposed amendments are legal prohibitions which need not be incorporated in the CBA. The Union has alternative remedies if it desires to assail the School's contracts with agencies.
The Union failed to provide convincing reasons why this demand should be favorably granted; hence, the same is denied.
All other demands not included in the defined deadlock issues are deemed abandoned, except for existing benefits which the School shall continue to grant at their current levels consistent with the principle of non-diminution of benefits.
Respondent filed a motion for reconsideration but it was denied by the Secretary of Labor. Thus, respondent filed an original petition for certiorari with the Court of Appeals, claiming that the awards made by the DOLE Secretary are not supported by the evidence on record and are contrary to law and jurisprudence.
WHEREFORE, premises considered, the petition is partially GRANTED. The assailed Order of May 31, 2002 of Secretary Patricia Sto. Tomas is hereby AFFIRMED with the modification that the P10,000.00 signing bonus awarded is increased to P18,000.00.
Based on UST Chief Accountant Antonio J. Dayag's Certification, the tuition fee increment for the SY 2001-2002 amounted to P101,036,330.37. From this amount, the tuition fee adjustment amounting to P2,785,143.00 was deducted leaving a net tuition fee increment of P98,251,189.36.
Pursuant to Section 5 (2) RA 6728, seventy percent (70%) of P98,251,187.36 or P68,775,831.15 is the amount UST has to allocate for salaries, wages, allowances and other benefits of its 2,290 employees, categorized as follows: 619 non-teaching personnel represented by herein petitioner SM-UST; 1,452 faculty members represented by UST-Faculty Union (UST-FU) and 219 academic/administrative officials. The last group of employees is excluded from the coverage of the two bargaining units.
The amount of P15,475,000.00 represents 22.50% of the allocated P68,775,831.00 (70% of the tuition fee increment for AY 2001-2002). UST has allocated P45 million or 65.43% of the P68,775,831 to UST-Faculty Union.
The difference between P68,775,831 (70% of incremental tuition fee proceeds) and P68,475,000 (total actual allocation or award to the two bargaining units and the school officials) is P300,831.00, which is only .437% of the 70% mandatory allocation (P68,775,831.00).
In the (sic) light of the foregoing jurisprudence, the University, in order to comply with R.A. 6728, must fully allocate the 70% of the tuition fee increases to salaries, wages, allowances and other benefits of the teaching and non-teaching personnel. The amount of P300,831.00 must therefore be allocated either as salary increment or fringe benefits of the non-teaching personnel.
We noted that UST's non-teaching employees enjoy several fringe benefits.
Even if the other benefits of the faculty members were to be charged from the remaining balance of the Accumulated Excess of Revenues Over Expenses, there would still be sufficient amount to fund the other benefits of the non-teaching personnel.
However, while We subscribe to UST's position on "salary distortion", Our earlier findings support the petitioner's contention that the UST has substantial accumulated income and thus, We deem it proper to award an increase, not in salary, to prevent any salary distortion, but in signing bonus. The arbitral award of P10,000 signing bonus per employee awarded by public respondent is hereby increased to P18,000.00.
THE HONORABLE COURT OF APPEALS COMMITTED PALPABLE ERROR OF SUBSTANCE WHEN IT RULED THAT THE MEMBERS OF PRIVATE RESPONDENT DID NOT VOLUNTARILY AND KNOWINGLY ACCEPT THE ARBITRAL AWARD OF THE SECRETARY OF DOLE.
THE HONORABLE COURT OF APPEALS COMMITTED PALPABLE ERROR OF SUBSTANCE AMOUNTING TO GRAVE ABUSE OF DISCRETION WHEN IT INCREASED THE SIGNING BONUS AWARDED BY THE SECRETARY OF DOLE TO EACH OF THE MEMBERS OF PRIVATE RESPONDENT FROM P10,000.00 TO P18,000.00.
THE HONORABLE COURT OF APPEALS HAS COMPLETELY IGNORED THE CLEAR MANDATE AND INTENTION OF R.A. 6728 OTHERWISE KNOWN AS THE GOVERNMENT ASSISTANCE TO STUDENTS AND TEACHERS IN PRIVATE EDUCATION ACT.
THE HONORABLE COURT OF APPEALS COMMITTED PALPABLE ERROR OF SUBSTANCE AMOUNTING TO GRAVE ABUSE OF DISCRETION WHEN IT RULED THAT THE FRINGE BENEFITS BEING ENJOYED BY THE ACADEMIC AND NON-ACADEMIC EMPLOYEES OF PETITIONER WERE SOURCED OUT FROM ITS OTHER INCOME.
TO: REV. FR. TAMERLANE R. LANA, O.P.
REV. FR. JUAN V. PONCE, O.P.
KAMI NA NAKALAGDA SA IBABA AY NAGPAPAABOT NG AMING TAHASANG PAGTANGGAP SA AWARD NG SECRETARY OF LABOR SA AMING (CBA) DEADLOCK CASE.
SANA PO AY MA-RELEASE ANG AMING MGA WAGE ADJUSTMENTS AT IBA PANG BENEPISYO BAGO MAG DECEMBER 15, 2002.
Petitioner claims that it began paying the wage adjustment and other benefits pursuant to the May 31, 2002 Order of the DOLE Secretary; and that to date, 572 out of the 619 members of respondent have been paid. It now argues that by their acceptance of the award and the resulting payments made to them, the said union members have ratified its offer and thus rendered moot the case before the Court of Appeals (CA-G.R. SP No. 72965).
Clearly, only 70% may be used for the "payment of salaries, wages, allowances and other benefits of teaching and non-teaching personnel," since 20% "shall go to the improvement or modernization of buildings, equipment, libraries, laboratories, gymnasia and similar facilities and the payment of other costs of operation."
A school does not exist solely for the benefit of its teachers and non-teaching personnel. A school is principally established to deliver quality education at all levels, as the Constitution requires. Therefore, any tuition fee increase authorized by either the DepEd Secretary, the CHED or the Director General of the TESDA for private schools should not solely benefit the teaching and non-teaching personnel but should rather be used for the welfare of the entire school community, particularly the students. The students are entitled as a matter of right to the improvement and modernization of the school "buildings, equipment," as this is fundamental to the maintenance or improvement of the quality of education they receive.
Thus, if schools use any part of the 20% reserved for the upgrading of school facilities to supplement the salaries of their academic and non-academic personnel, they would not only be violating the students' constitutional right to quality education through "improvement and modernization" but also committing a serious infraction of the mandatory provisions of RA 6728.
Petitioner thus concedes liability only up to P300,831.00, which is the remaining balance of the undistributed amount of P68,775,831.00, which represents 70% of the incremental tuition fee proceeds for the period in question.
Petitioner contends further that the appellate court's award of additional signing bonus (from P10,000.00 to P18,000.00) is contrary to the nature and principle behind the grant of such benefit, which is one given as a matter of discretion and cannot be demanded by right,12 a consideration paid for the goodwill that existed in the negotiations, which culminate in the signing of a CBA.13 Petitioner claims that since this condition is absent in the parties' case, it was erroneous to have rewarded respondent with an increased signing bonus.
On the appellate court's award of additional signing bonus, respondent argues that since no strike or any untoward incident occurred, goodwill between the parties remained, which entitles respondent's members to receive their signing bonus. Besides, respondent asserts that since petitioner did not appeal the DOLE Secretary's award, it may not now argue against its grant, the issue remaining being the propriety of the awarded amount; that is, whether or not it was proper for the appellate court to have raised it from P10,000.00 to P18,000.00.
We resolve to PARTIALLY GRANT the petition.
To put matters in their proper context, we must first simplify the facts.
Although the parties were negotiating on the CBA for academic years 2001 through 2006 (2001-2006 CBA Proposals), we are here concerned only with the economic provisions for the academic year (AY) 2001-2002, specifically the appellate court's increased award of signing bonus, from P10,000.00 as originally granted by the DOLE Secretary, to P18,000.00; the parties do not appear to question any other disposition made by the DOLE Secretary.
Thus, it has been determined that from the tuition fees for the academic year in question, petitioner earned an increment of P101,036,330.37. Under R.A. 6728, 70% of that amount - or the net18 amount of P68,775,831.15 - should be allotted for payment of salaries, wages, allowances and other benefits of teaching and non-teaching personnel except administrators who are principal stockholders of the school.
On the other hand, the amount of P45 million (or 65.43% of P68,775,831.15) was allocated to the teaching personnel.
After distribution of the respective shares of the teaching and non-teaching personnel, there remained a balance of P300,831.00 from the P68,775,831.15.
Clearly, these fringe benefits would have to be obtained from sources other than the incremental tuition fee proceeds (P68,775,831.15), since only P15,475,000.00 thereof was set aside for the non-teaching personnel; the rest was allocated to the teaching personnel.
The appellate court, moreover, granted an increase in the signing bonus, that is, from the DOLE Secretary's award of P10,000.00, to P18,000.00. This, exactly, is the parties' point of contention.
Regarding petitioner's assertion that it was unlawful for the Court of Appeals to have required it to source the award of fringe benefits (in the amount of P28,837,780.00) from the school's other income, since R.A. 6728 does not compel or require schools to allocate more than 70% of the incremental tuition fee increase for the salaries and benefits of its employees, we find it unnecessary to rule on this matter. These fringe benefits are included in the DOLE Secretary's award - an award which petitioner seeks to affirm in toto; this being so, it cannot now argue otherwise. Since it abides by the DOLE Secretary's award, which it finds "fair and equitable," it must raise the said amount through sources other than incremental tuition fee proceeds.
Finally, we come to the appellate court's award of additional signing bonus, which we find to be unwarranted under the circumstances. A signing bonus is a grant motivated by the goodwill generated when a CBA is successfully negotiated and signed between the employer and the union.22 In the instant case, no CBA was successfully negotiated by the parties. It is only because petitioner prays for this Court to affirm in toto the DOLE Secretary's May 31, 2002 Order that we shall allow an award of signing bonus. There would have been no other basis to grant it if petitioner had not so prayed. We shall take it as a manifestation of petitioner's liberality, which we cannot now allow it to withdraw. A bonus is a gratuity or act of liberality of the giver;23 when petitioner filed the instant petition seeking the affirmance of the DOLE Secretary's Order in its entirety, assailing only the increased amount of the signing bonus awarded, it is considered to have unqualifiedly agreed to grant the original award to the respondent union's members.
WHEREFORE, the petition is PARTIALLY GRANTED. The signing bonus of EIGHTEEN THOUSAND PESOS (P18,000.00) per member of respondent Samahang Manggagawa ng U.S.T. as awarded by the Court of Appeals is REDUCED to TEN THOUSAND PESOS (P10,000.00). All other findings and dispositions made by the Court of Appeals in its January 31, 2005 Decision and September 23, 2005 Resolution in CA-G.R. SP No. 72965 are AFFIRMED.
1 Rollo, pp. 68-104; penned by Associate Justice Regalado E. Maambong and concurred in by Associate Justices Martin S. Villarama, Jr. and Lucenito N. Tagle.
9 Id. at 22, 613.
Section 5. Tuition Fee Supplement for Students in Private High School. - x x x. (2) Assistance under paragraph (1), subparagraphs (a) and (b) shall be granted and tuition fees under subparagraph (c) may be increased, on the condition that seventy percent (70%) of the amount subsidized allotted for tuition fee or of the tuition fee increases shall go to the payment of salaries, wages, allowances and other benefits of teaching and non-teaching personnel except administrators who are principal stockholders of the school, and may be used to cover increases as provided for in the collective bargaining agreements existing or in force at the time when this Act is approved and made effective: Provided, That government subsidies are not used directly for salaries of teachers of non-secular subjects. At least twenty percent (20%) shall go to the improvement or modernization of buildings, equipment, libraries, laboratories, gymnasia and similar facilities and to the payment of other costs of operation. For this purpose, school shall maintain a separate record of accounts for all assistance received from the government, any tuition fee increase, and the detailed disposition and use thereof, which record shall be made available for periodic inspection as may be determined by the State Assistance Council, during business hours, by the faculty, the non-teaching personnel, students of the school concerned, the Department of Education, Culture and Sports and other concerned government agencies.
11 Rollo, pp. 50-51, citing Sarmiento III, "Education Law and the Private Schools, A Practice Guide for Educational Leaders and Policy Makers," pp. 582-583.
12 Citing Caltex Refinery Employees Association v. Brillantes, G.R. No. 123782, September 16, 1997, 279 SCRA 218.
13 Citing Manila Electric Company v. Quisumbing, G.R. No. 127598, January 27, 1999, 302 SCRA 204.
15 Id. at 58, citing Pier 8 Arrastre & Stevedoring Services, Inc. v. Roldan-Confesor, G.R. No. 110854, February 13, 1995, 241 SCRA 294.
18 Less tuition fee adjustment of P2,785,143.00.
19 Lorbes v. Court of Appeals, G.R. No. 139884, February 15, 2001, 351 SCRA 716.
20 UST Faculty Union v. Bitonio, G.R. No. 131235, November 16, 1999, 318 SCRA 185.
21 Labor Code, Article 212 (g).
22 Meralco v. Secretary of Labor, G.R. No. 127598, January 27, 1999, 302 SCRA 173.
23 Manila Banking Corporation v. National Labor Relations Commission, G.R. No. 107487, September 29, 1997, 279 SCRA 602.

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