TL;DR

The Supreme Court ruled that GSIS Family Bank, as a government-owned or controlled corporation (GOCC), could not negotiate economic terms in a collective bargaining agreement (CBA) with its employees due to Republic Act No. 10149 and Executive Order No. 203. While employees have the right to self-organization, government employees’ rights to collective bargaining are limited to matters not fixed by law. RA 10149 mandated a Compensation and Position Classification System (CPCS) for all GOCCs, which preempts private bargaining on compensation. This decision clarifies the extent to which GOCCs can independently determine employee benefits and salaries, emphasizing that they are subject to the compensation standards set by the government.

From Private Roots to Public Rules: GSIS Family Bank’s Labor Rights Crossroads

This case involves the GSIS Family Bank Employees Union’s attempt to compel GSIS Family Bank to negotiate a new collective bargaining agreement (CBA). The central legal question is whether GSIS Family Bank, initially a private entity but later majority-owned by the Government Service Insurance System (GSIS), could independently negotiate economic terms with its employees, or if it was bound by the Compensation and Position Classification System (CPCS) mandated by Republic Act No. 10149, also known as the GOCC Governance Act of 2011.

The factual history begins with Royal Savings Bank, a private thrift bank established in 1969. Facing financial difficulties in the 1980s, Royal Savings Bank underwent a series of transformations, eventually becoming Comsavings Bank and then GSIS Family Bank, with GSIS acquiring a controlling stake. In 2013, the GSIS Union sought to negotiate a new CBA, but GSIS Family Bank declined, citing the Governance Commission for Government-Owned or Controlled Corporations’ (GCG) opinion that it lacked the authority to negotiate economic terms due to RA 10149. This prompted the GSIS Union to file a Petition for Certiorari, Prohibition, and Mandamus, arguing that GSIS Family Bank remained a private entity not subject to RA 10149.

The Supreme Court addressed two preliminary issues before delving into the merits of the case. First, the Court determined that a Petition for Certiorari was not the appropriate remedy because the GCG’s opinion was merely advisory, not a judicial or quasi-judicial determination. Second, the Court acknowledged that GSIS Family Bank’s closure in 2016 rendered the petition moot. Despite this, the Court chose to address the substantive issues due to the case’s importance in guiding the bench and bar.

The Court then turned to the central issue of whether GSIS Family Bank, as a government-owned or controlled corporation, could enter into a CBA with its employees. The Court referenced Presidential Decree No. 2029 and Executive Order No. 292, which define a government-owned or controlled corporation as one vested with functions relating to public needs and owned by the government to the extent of at least a majority of its outstanding capital stock. Since GSIS owned 99.55% of GSIS Family Bank’s stock, the bank clearly met this definition.

The Court highlighted the constitutional right of workers to self-organization and collective bargaining. However, it distinguished between private and government employees. While private employers and employees can freely negotiate terms and conditions of employment within the bounds of law, government employees’ terms are largely fixed by legislation. Therefore, negotiable matters in the public sector are limited to those not already determined by law.

SECTION 4. Coverage. — This Act shall be applicable to all GOCCs, GICPs/GCEs, and government financial institutions, including their subsidiaries, but excluding the Bangko Sentral ng Pilipinas, state universities and colleges, cooperatives, local water districts, economic zone authorities and research institutions: Provided, That in economic zone authorities and research institutions, the President shall appoint one-third (1/3) of the board members from the list submitted by the GCG.

The Court emphasized that Republic Act No. 10149, the GOCC Governance Act of 2011, applies to all GOCCs, regardless of whether they were created by special charter or incorporated under the Corporation Code. Section 9 of RA 10149 explicitly states that no GOCC shall be exempt from the Compensation and Position Classification System (CPCS) developed by the Governance Commission. Furthermore, Executive Order No. 203, issued in 2016, approved the CPCS and unequivocally stated that GOCCs, whether chartered or non-chartered, may not negotiate the economic terms of their CBAs.

Consequently, GSIS Family Bank was justified in refusing to enter into a new CBA with the GSIS Union, as it lacked the authority to negotiate economic terms. The Supreme Court ultimately denied the petition, holding that unless directly challenged in an appropriate case, the constitutionality and validity of Republic Act No. 10149, as applied to fully government-owned and controlled non-chartered corporations, would prevail. This decision affirms the limits on collective bargaining for economic terms in GOCCs, emphasizing adherence to government-set compensation standards.

FAQs

In conclusion, the GSIS Family Bank case clarifies the limitations on collective bargaining in government-owned or controlled corporations, particularly concerning economic terms. By aligning compensation standards with government regulations, the ruling seeks to promote fiscal responsibility and prevent disparities in benefits and salaries within the public sector.

For inquiries regarding the application of this ruling to specific circumstances, please contact Atty. Gabriel Ablola through gaboogle.com or via email at connect@gaboogle.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: GSIS Family Bank Employees Union v. Villanueva, G.R. No. 210773, January 23, 2019