TL;DR

In a dispute between the University of Santo Tomas Faculty Union (USTFU) and the University of Santo Tomas (UST) regarding contributions to a faculty hospitalization fund, the Supreme Court sided with UST. The Court ruled that the Labor Arbiter lacked jurisdiction over the case, as it primarily involved interpreting the Collective Bargaining Agreement (CBA), which should have been resolved through voluntary arbitration. Furthermore, the Court found that USTFU’s claims were already barred by prescription due to the delay in filing the complaint. The decision clarifies that the 1996-2001 CBA did not mandate the annual “slide-in” or carry-over of hospitalization fund contributions as the union claimed, emphasizing the importance of clear contractual language and adherence to agreed dispute resolution mechanisms in labor relations. This means unions and employers must pursue voluntary arbitration for CBA interpretation issues and act within the prescribed periods for claims.

Lost in Translation: When CBA Clauses and Union Expectations Diverge on Hospitalization Funds

The heart of this legal battle lies in differing interpretations of a Collective Bargaining Agreement (CBA), specifically concerning the faculty hospitalization and medical benefits fund at the University of Santo Tomas. The University of Santo Tomas Faculty Union (USTFU) contended that the University of Santo Tomas (UST) had underpaid its contributions to this fund, claiming deficiencies amounting to millions of pesos. USTFU argued that the 1996-2001 CBA and subsequent agreements mandated a “slide-in” mechanism, requiring UST to carry over and cumulatively increase its annual contributions to the fund. This interpretation meant that amounts allocated in previous years should be added to the base amount for subsequent years, creating a perpetually growing fund. UST, however, maintained that the CBA only required a one-time contribution or specific annual contributions without any cumulative “slide-in” obligation beyond what was explicitly stated for each year.

This disagreement led USTFU to file a complaint for unfair labor practice and money claims before the Labor Arbiter (LA), arguing that UST’s failure to remit the supposedly correct amounts constituted a violation of the CBA and unfair labor practice. The LA initially ruled in favor of USTFU, albeit for a smaller amount than claimed. The National Labor Relations Commission (NLRC) then increased the award significantly, agreeing with USTFU’s interpretation of the CBA. However, the Court of Appeals (CA) reversed the NLRC, finding that the LA and NLRC lacked jurisdiction, as the dispute was essentially about CBA interpretation and should have been addressed through voluntary arbitration, as stipulated in the CBA’s grievance machinery. This divergence in rulings across different labor tribunals set the stage for the Supreme Court to weigh in, ultimately clarifying the proper forum for such disputes and the correct interpretation of the CBA provisions in question.

The Supreme Court began its analysis by addressing the crucial issue of jurisdiction. It emphasized that under Articles 217 and 261 of the Labor Code, disputes arising from the interpretation or implementation of CBAs fall under the original and exclusive jurisdiction of voluntary arbitrators, not Labor Arbiters.

Article 261 of the Labor Code explicitly states:

The Voluntary Arbitrator or panel of Voluntary Arbitrators shall have original and exclusive jurisdiction to hear and decide all unresolved grievances arising from the interpretation or implementation of the Collective Bargaining Agreement and those arising from the interpretation or enforcement of company personnel policies referred to in the immediately preceding article. Accordingly, violations of a Collective Bargaining Agreement, except those which are gross in character, shall no longer be treated as unfair labor practice and shall be resolved as grievances under the Collective Bargaining Agreement.

The Court found that USTFU’s complaint, despite being framed as unfair labor practice, fundamentally revolved around differing interpretations of the CBA’s economic provisions, particularly those concerning the hospitalization fund. The alleged “failure to slide in yearly the P2M hospitalization fund” was deemed an “error in the interpretation of a provision in the CBA,” not a gross or malicious refusal to comply, thus placing it squarely within the ambit of voluntary arbitration. While agreeing with the CA on the jurisdictional point, the Supreme Court opted to resolve the substantive issues to prevent further delays and potential relitigation, recognizing the protracted nature of the case.

Turning to the substantive claims, the Court meticulously examined the relevant provisions of the 1996-2001 CBA, the 1999 Memorandum of Agreement (MOA), and subsequent CBAs. Crucially, the 1996-2001 CBA, which was the primary basis of USTFU’s claim, lacked any explicit “carry-over” or “slide-in” provision for the hospitalization fund. The CBA stipulated specific amounts for the fund for school years 1996-97, 1997-98, and 1998-99, and the MOA provided an additional amount for 1999-2000. It was only in the 2001-2006 CBA that a “carry-over” clause was explicitly introduced, stating:

“It is understood that the amount appropriated for each year is carried over to the succeeding years and is chargeable to the tuition fee increment.”

This explicit inclusion in later CBAs, and its absence in the 1996-2001 CBA, strongly suggested that the “slide-in” mechanism was not intended for the earlier period. The Court emphasized the principle that when CBA provisions are clear and unambiguous, their literal meaning should govern, rejecting USTFU’s attempt to read into the 1996-2001 CBA a provision that was not there.

Furthermore, the Supreme Court addressed the issue of prescription. It determined that USTFU’s cause of action accrued each year UST allegedly failed to remit the correct amount, starting from school year 1997-1998. Whether considered as unfair labor practice (prescribing in one year) or money claims (prescribing in three years), USTFU’s complaint, filed only in 2007, was well beyond the prescriptive periods for claims arising from the 1996-2001 CBA. The Court rejected USTFU’s argument that the cause of action only accrued upon UST’s formal denial of their demand in 2007, clarifying that prescription starts from when the violation occurs and the action could have been brought.

In conclusion, the Supreme Court upheld the CA’s decision, albeit with modifications. It affirmed the principle that disputes concerning CBA interpretation are within the jurisdiction of voluntary arbitrators and underscored the importance of adhering to contractual dispute resolution mechanisms. The Court also clarified that the 1996-2001 CBA did not contain a “slide-in” provision for the hospitalization fund, and that USTFU’s claims were time-barred. This ruling serves as a reminder of the necessity for clarity in CBA language and the importance of timely action in pursuing labor claims.

FAQs

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: UNIVERSITY OF SANTO TOMAS FACULTY UNION vs. UNIVERSITY OF SANTO TOMAS, G.R. No. 203957, July 30, 2014