The Supreme Court has affirmed that the benefits of a Collective Bargaining Agreement (CBA) extend only to employees who are members of the collective bargaining unit at the time the agreement is signed. This means that employees who have been validly terminated before the CBA’s effectivity are not entitled to its benefits, even if the CBA has a retroactive effect. This ruling underscores the importance of membership in a bargaining unit as a prerequisite for enjoying CBA benefits and reinforces the principle that labor rights are tied to the employment status within the bargaining unit.

Strikes and Settlements: Who Gets the CBA Bonus?

This case revolves around Angelito Castro, Raymundo Saura, and Ramonito Fanuncion, former employees of Philippine Long Distance Telephone Company (PLDT), who were dismissed for participating in an illegal strike. Despite their dismissal, they sought to claim benefits under a new Collective Bargaining Agreement (CBA) between PLDT and its employees’ union, Manggagawa ng Komunikasyon sa Pilipinas (MKP). The central question is whether these dismissed employees, who were no longer part of the bargaining unit when the CBA was signed, are entitled to the CBA-imposed benefits, specifically the amount of P133,000.00 each.

The core issue stems from a labor dispute where the employees participated in a strike from December 22, 1992, to January 21, 1993. The strike was later declared illegal, and the employees’ dismissals were deemed valid by the National Labor Relations Commission (NLRC) in a resolution dated February 27, 1998. While the case was pending, the employees were allowed to return to work in April 1993, subject to the outcome of the case. The NLRC’s resolution was subsequently upheld by the Supreme Court in a resolution dated August 3, 1998, which eventually became final.

Following the final resolution, PLDT notified the concerned employees, including the petitioners, of their termination for cause in separate letters dated January 12, 1999. Aggrieved, the employees filed complaints for illegal dismissal, money claims, and damages against PLDT. They argued that PLDT had voluntarily extended redundancy/early retirement programs and promotions to several employees, effectively waiving or condoning the effects of the illegal strike. They contended that these acts constituted supervening events that rendered the NLRC and Supreme Court Resolutions moot.

PLDT, however, denied any condonation or waiver and invoked the defense of res judicata, asserting that the validity of the employees’ dismissals had already been conclusively resolved by the Court. Labor Arbiter Vicente R. Layawen initially sided with the employees, rejecting the claim of res judicata and declaring their dismissal illegal in a decision dated March 15, 2000. He deemed PLDT’s actions as condonation of the employees’ unlawful acts and ordered their reinstatement with backwages and attorney’s fees.

While the case was under appeal with the NLRC, the employees were reinstated on the payroll and received salaries and benefits from April to December 2000. However, the NLRC reversed the Labor Arbiter’s decision on December 28, 2000, stating that the intent to waive/condone the effects of the illegal strike was not sufficiently established. Nevertheless, the NLRC awarded financial assistance equivalent to one-half month’s pay per year of service to the employees, considering that 29 of their colleagues were allowed to avail of early retirement and redundancy benefits.

Both parties then filed petitions for certiorari before the Court of Appeals (CA). The CA dismissed both petitions in a decision dated March 18, 2005, which was affirmed by the Supreme Court on January 16, 2006. This decision became final and executory on April 5, 2006. Subsequently, on March 14, 2001, MKP and PLDT entered into a new Collective Bargaining Agreement (CBA), granting all PLDT employees the amount of P133,000.00 each in lieu of wage increases for the first year of the CBA. The CBA was made effective from November 9, 2000.

The concerned employees filed motions for execution before the Labor Arbiter, seeking payment of salaries and other benefits granted under the new CBA. Labor Arbiter Jaime M. Reyno ruled in favor of the employees in an order dated April 18, 2002, stating that the CBA benefit accrued on November 9, 2000, prior to the NLRC’s reversal of the Labor Arbiter’s decision. He concluded that the benefit was included in the reinstatement aspect of the earlier decision pending appeal and directed PLDT to pay each employee P133,000.00. The NLRC sustained this order on appeal, considering it no different from other benefits received by the employees as a consequence of their reinstatement pending appeal.

However, the Court of Appeals reversed the NLRC’s decision in its assailed November 24, 2009 resolution. The CA found that the concerned employees were no longer employees at the time of the CBA signing on March 14, 2001. It reasoned that since they were not members of the bargaining unit, they could not claim benefits under the CBA. The Supreme Court, in its ruling, emphasized the principle that CBA benefits extend only to members of the collective bargaining unit. According to the Supreme Court:

Settled is the rule that the benefits of a CBA extend only to laborers and employees who are members of the collective bargaining unit.

The Court noted that the employees’ dismissal became final on January 18, 1999, and they were informed of their termination based on the resolution affirming their dismissal. The Supreme Court also rejected the employees’ claim that supervening events had occurred, which would have rendered their dismissal moot. Therefore, the Court concluded that the employees were no longer part of the bargaining unit when the CBA was signed and when it became effective. The Supreme Court then stated that:

Consequently, petitioners were no longer employees of PLDT nor members of the collective bargaining unit represented by MKP when the CBA was signed on March 14, 2001 or when it became effective on November 9, 2000 and are, thus, not entitled to avail of the benefits under the new CBA.

Thus, the Supreme Court found no reversible error on the part of the CA in ordering the employees to return the P133,000.00 they had received.

FAQs

What was the key issue in this case?	The key issue was whether employees who were dismissed for participating in an illegal strike are entitled to benefits under a Collective Bargaining Agreement (CBA) that was signed after their dismissal.
Who is entitled to CBA benefits?	CBA benefits are generally extended only to employees who are members of the collective bargaining unit at the time the agreement is signed.
What is a collective bargaining unit?	A collective bargaining unit is a group of employees recognized as a single unit for the purpose of negotiating terms and conditions of employment with their employer.
What is the significance of being a member of the collective bargaining unit?	Membership in the collective bargaining unit is crucial because it determines who can participate in the negotiation of the CBA and who is entitled to its benefits.
Can a CBA apply retroactively to non-members?	Even if a CBA has a retroactive effectivity date, it generally does not extend benefits to individuals who were not members of the bargaining unit at the time of its signing.
What is the doctrine of res judicata, and how did it apply (or not) in this case?	Res judicata prevents a party from relitigating issues that have been conclusively determined by a court. In this case, PLDT argued res judicata based on the prior ruling upholding the employees’ dismissal, but the Labor Arbiter initially rejected this claim, which was later overturned.
What was the effect of the employees’ reinstatement pending appeal?	The employees’ reinstatement pending appeal allowed them to receive salaries and benefits temporarily, but it did not change their status as terminated employees once the dismissal was upheld.
Why were the employees required to return the P133,000.00?	The employees were required to return the amount because they were not members of the bargaining unit when the CBA was signed, and thus, were not entitled to its benefits.

In conclusion, the Supreme Court’s decision reinforces the principle that CBA benefits are exclusive to members of the collective bargaining unit. This ruling clarifies the rights and obligations of employees and employers in the context of labor disputes and CBAs. It serves as a reminder that membership in a bargaining unit is a prerequisite for enjoying the benefits negotiated by that unit.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Castro vs. PLDT, G.R. No. 191792, August 22, 2012