Davao Integrated Port vs. Abarquez

Davao Integrated Port vs. Abarquez

G.R. No.102132

 March 19, 1993

DOCTRINE: A collective bargaining agreement (CBA), as used in Article 252 of the Labor Code, refers to a contract executed upon request of either the employer or the exclusive bargaining representative incorporating the agreement reached after negotiations with respect to wages, hours of work and all other terms and conditions of employment, including proposals for adjusting any grievances or questions arising under such agreement. 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. 

FACTS: Petitioner Davao Integrated Port Stevedoring Services and private respondent ATU-TUCP, the exclusive collective bargaining agent of the rank and file workers of petitioner-company entered into a collective bargaining agreement which provide for sick leave with pay benefits each year to its employees who have rendered at least one year of service with the company.

All the field workers of petitioner who are members of the regular labor pool and the present regular extra labor pool who had rendered at least 750 hours up to 1,500 hours were extended sick leave with pay benefits. Any unenjoyed portion thereof at the end of the current year was converted to cash and paid at the end of the said one-year period pursuant to Sections 1 and 3, Article VIII of the CBA. 

The commutation of the unenjoyed portion of the sick leave with pay benefits of the intermittent workers or its conversion to cash was, however, discontinued or withdrawn when petitioner-company under a new assistant manager, Mr. Benjamin Marzo ,  stopped the payment of its cash equivalent on the ground that they are not entitled to the said benefits under Sections 1 and 3 of the 1989 CBA. The union objected contending that it is a deviation from the true intent of the parties; that it would violate the principle in labor law that benefits already extended shall not be taken away and that it would result in discrimination between non-intermitent and the intermittent workers of the petitioner-company.

The parties mutually designated public respondent Ruben Abarquez, Jr. to act as voluntary arbitrator and award in favor of the union ruling that the regular intermittent workers are entitled to commutation of their unenjoyed sick leave with pay benefits. Petitioner- company disagreed with the aforementioned ruling of public respondent, hence the instant petition.

ISSUE: 
Whether or not the intermittent field workers are entitled to conversion to cash of any unused sick leave.

HELD: 
The Supreme Court dismissed the petition on the ground that CA is not merely contractual in nature but impressed with public interest.
A collective bargaining agreement (CBA), as used in Article 252 of the Labor Code, refers to a contract executed upon request of either the employer or the exclusive bargaining representative incorporating the agreement reached after negotiations with respect to wages, hours of work and all other terms and conditions of employment, including proposals for adjusting any grievances or questions arising under such agreement.

It must be noted that the 1989 CBA has two (2) sections on sick leave with pay benefits which apply to two (2) distinct classes of workers in petitioner's company, namely: (1) the regular non-intermittent workers or those workers who render a daily eight-hour service to the company and are governed by Section 1, Article VIII of the 1989 CBA; and (2) intermittent field workers who are members of the regular labor pool and the present regular extra labor pool as of the signing of the agreement on April 15, 1989 or those workers who have irregular working days and are governed by Section 3, Article VIII of the 1989 CBA.

It is thus erroneous for petitioner to isolate Section 1, Article VIII of the 1989 CBA from the other related section on sick leave with pay benefits, specifically Section 3 thereof, in its attempt to justify the discontinuance or withdrawal of the privilege of commutation or conversion to cash of the unenjoyed portion of the sick leave benefit to regular intermittent workers because well-settled is it that the said privilege of commutation or conversion to cash, being an existing benefit, the petitioner-company may not unilaterally withdraw, or diminish such benefits. It is a fact that petitioner-company had, on several instances in the past, granted and paid the cash equivalent of the unenjoyed portion of the sick leave benefits of some intermittent workers. Under the circumstances, these may be deemed to have ripened into company practice or policy which cannot be peremptorily withdrawn.

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