G.R. No.

190515 November 15, 2010

CIRTEK EMPLOYEES LABOR UNION-FEDERATION OF FREE WORKERS vs. CIRTEK ELECTRONICS, INC.,.

Cirtek Electronics, Inc. (respondent), an electronics and semi-conductor firm situated inside the Laguna Technopark, had an existing Collective
Bargaining Agreement (CBA) with Cirtek Employees Labor Union-Federation of Free Workers (petitioner) for the period January 1, 2001 up to
December 31, 2005. Prior to the 3rd year of the CBA, the parties renegotiated its economic provisions but failed to reach a settlement,
particularly on the issue of wage increases. Petitioner thereupon declared a bargaining deadlock and filed a Notice of Strike with the National
Conciliation and Mediation Board-Regional Office No. IV (NCMB-RO IV) on April 26, 2004. Respondent, upon the other hand, filed a Notice of
Lockout on June 16, 2004.

While the conciliation proceedings were ongoing, respondent placed seven union officers including the President, a Vice President, the
Secretary and the Chairman of the Board of Directors under preventive suspension for allegedly spearheading a boycott of overtime work. The
officers were eventually dismissed from employment, prompting petitioner to file another Notice of Strike which was, after conciliation
meetings, converted to a voluntary arbitration case. The dismissal of the officers was later found to be legal, hence, petitioner appealed.

In the meantime, as amicable settlement of the CBA was deadlocked, petitioner went on strike on June 20, 2005. By Order1 dated June 23,
2005, the Secretary of Labor assumed jurisdiction over the controversy and issued a Return to Work Order which was complied with.

Before the Secretary of Labor could rule on the controversy, respondent created a Labor Management Council (LMC) through which it
concluded with the remaining officers of petitioner a Memorandum of Agreement (MOA) 2providing for daily wage increases of ₱6.00 per day
effective January 1, 2004 and ₱9.00 per day effective January 1, 2005. Petitioner submitted the MOA via Motion and Manifestation3 to the
Secretary of Labor, alleging that the remaining officers signed the MOA under respondent’s assurance that should the Secretary order a higher
award of wage increase, respondent would comply.

By Order4 dated March 16, 2006, the Secretary of Labor resolved the CBA deadlock by awarding a wage increase of from ₱6.00 to ₱10.00 per
day effective January 1, 2004 and from ₱9.00 to ₱15.00 per day effective January 1, 2005, and adopting all other benefits as embodied in the
MOA.

Respondent moved for a reconsideration of the Decision as petitioner’s vice-president submitted a "Muling Pagpapatibay ng Pagsang-ayon sa
Kasunduan na may Petsang ika-4 ng Agosto 2005,"5 stating that the union members were waiving their rights and benefits under the
Secretary’s Decision. Reconsideration of the Decision was denied by Resolution 6 of August 12, 2008, hence, respondent filed a petition for
certiorari before the Court of Appeals.

By Decision7 of September 24, 2009, the appellate court ruled in favor of respondent and accordingly set aside the Decision of the Secretary of
Labor. It held that the Secretary of Labor gravely abused his discretion in not respecting the MOA. It did not give credence to the minutes of
the meeting8 that attended the forging of the MOA as it was not verified, nor to the "Paliwanag" 9 submitted by respondent union members
explaining why they signed the MOA as it was not notarized.

Petitioner’s motion for reconsideration having been denied by Resolution 10 of December 2, 2009, the present petition was filed, maintaining
that the Secretary of Labor’s award is in order, being in accord with the parties’ CBA history ─ respondent having already granted ₱15.00 per
day for 2001, ₱10.00 per day for 2002, and ₱10.00 per day for 2003, and that the Secretary has the power to grant awards higher than what
are stated in the CBA.

Respecting the MOA, petitioner posits that it was "surreptitiously entered into [in] bad faith," it having been forged without the assistance of the
Federation of Free Workers or counsel, adding that respondent could have waited for the Secretary’s resolution of the pending CBA deadlock
or that the MOA could have been concluded before representatives of the Secretary of Labor.

The relevant issues for resolution are 1) whether the Secretary of Labor is authorized to give an award higher than that agreed upon in the
MOA, and 2) whether the MOA was entered into and ratified by the remaining officers of petitioner under the condition, which was not
incorporated in the MOA, that respondent would honor the Secretary of Labor’s award in the event that it is higher.

The Court resolves both issues in the affirmative.

It is well-settled that the Secretary of Labor, in the exercise of his power to assume jurisdiction under Art. 263 (g) 11of the Labor Code, may
resolve all issues involved in the controversy including the award of wage increases and benefits. 12 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.13

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
documents14 submitted by respondent as well as the parties’ bargaining history and respondent’s financial outlook and improvements as stated
in its website.15

It bears noting that since the filing and submission of the MOA did not have the effect of divesting the Secretary of his jurisdiction, or of
automatically disposing the controversy, then neither should the provisions of the MOA restrict the Secretary’s leeway in deciding the matters
before him.1avvphi1
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.16(emphasis supplied)

While a contract constitutes the law between the parties, this is so in the present case with respect to the CBA, not to the MOA in which even
the union’s signatories had expressed reservations thereto. But even assuming arguendo that the MOA is treated as a new CBA, since it is
imbued with public interest, it must be construed liberally and yield to the common good.

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.17 (emphasis and underscoring supplied)

WHEREFORE, the petition is GRANTED. The Decision dated September 24, 2009 and the Resolution dated December 2, 2009 of the Court of
Appeals are REVERSED and SET ASIDE and the Order dated March 16, 2006 and Resolution dated August 12, 2008 of the Secretary of
Labor are REINSTATED.

SO ORDERED.