G.R. No. 180884 - Executive Summary (Talento vs. Escalada, et al.)

EXECUTIVE SUMMARY¹

“Emerlinda S. Talento, in her capacity as the Provincial Treasurer of the Province of Bataan vs. Hon. Remigio M. Escalada, Jr., Presiding Judge of the Regional Trial Court of Bataan, Branch 3 and Petron Corporation”, Supreme Court, Third Division, G. R. No. 180884.

Introduction

1. In the Decision dated 27 June 2008, as reiterated in the Resolution dated 8 September 2008 dismissing the 1st Motion for Reconsideration (“MR”) in the above-captioned, the SC set forth the ruling that taxpayers can defer payments of real estate tax by simply filing 1) an appeal with the Local Board of Assessment Appeals and 2) a Petition for Prohibition with the Regional Trial Court and by posting a surety bond.

2. This ruling has extremely serious implications, not only to the LGUs of Bataan, but all over the country. It practically amended, through judicial legislation, the expressed provisions of the Local Government Code (“LGC”) of 1991 that a taxpayer cannot defer and must first pay to the LGU the real estate tax due before any appeal can be entertained.

3. Thus, LGUs will no longer receive cash payments from real estate tax collections as they fall due but merely surety bonds, which have no immediate use to LGUs. One-half of the proceeds of RPT accrues to the general funds of provinces, cities, municipalities and barangays, while the other half accrues to the Special Education Fund of their Local School Boards. With such erroneous ruling, LGUs and ultimately the people are bound to suffer, particularly the children from poor families who go to public schools.

Summary of the Relevant Facts:

(1) On 18 June 2007, Petron received from the Provincial Assessor’s Office of Bataan a notice of revised assessment for deficiency real property tax for Petron’s machineries and equipment in Lamao, Limay, Bataan in the amount of PhP1,731,025,403.06 due from 1994 up to the 2^nd quarter of 2007.

(2) On 17 August 2007, Petron filed a petition with the Local Board of Assessment Appeals (LBAA) contesting the revised assessment.

(3) On 22 August 2007, Petron received from Petitioner (the Provincial Treasurer of Bataan) a final notice of delinquent real property tax with warning that the subject properties would be levied and auctioned should Petron fail to settle the revised assessment.

(4) Petron wrote a letter to Petitioner stating that in view of the pendency of the appeal with the LBAA, any action on the subject properties would be premature. Petitioner replied that only payment by Petron under protest shall bar the collection of the taxes due, pursuant to Sections 231 and 252 of the Local Government Code.

(5) Subsequently a Warrant of Levy was issued against machinery and equipment of Petron.

(6) Petron filed with the LBAA on 24 September 2007 an urgent motion to lift final notice of delinquent real property tax and Warrant of Levy.

(7) On 3 October 2007, Petron received a notice of sale of its properties scheduled on 17 October 2007.

(8) Petron subsequently merely withdrew its motion to lift final notice of delinquency and Warrant of Levy with the LBAA on 8 October 2007. On the same date, Petron filed with the Regional Trial Court of Bataan the present case (Civil Case No. 8801) against Petitioner for prohibition with prayer for issuance of temporary restraining order and preliminary injunction. (NOTE: To avoid questions of forum shopping, what Petron should have done was to first withdraw its appeal entirely from the LBAA and then file the Petition for Prohibition with the RTC.)

(9) Civil Case No. 8801 was filed by Petron with the RTC while its petition with the LBAA was still pending. Subsequently, the LBAA dismissed Petron’s petition on the ground of forum shopping.

(10) On 15 October 2007, the RTC issued a TRO for 20 days enjoining Petitioner from proceeding with the public auction of Petron’s properties.

(11) Petitioner filed an urgent motion for the immediate dissolution of the TRO as well as motion to dismiss Petron’s petition for prohibition.

(12) On 5 November 2007, the RTC issued the Order granting Petron’s petition for the issuance of the writ of preliminary injunction subject to Petron’s posting of a PhP 444,967,503.52 bond in addition to its previously posted surety bond of PhP1,286,057,899.54.

(13) In view of the urgent nature of the case and the patently illegal order of the RTC, which was Order was tainted with grave abuse of discretion, Petitioner no longer filed a Motion for Reconsideration of the Order dated 5 November 2007.

(14) On 4 January 2008, Petitioner filed the present Petition for Certiorari, Prohibition and Mandamus (G.R. No. 180884) with the Supreme Court, as an exception to the rule on hierarchy of courts, to annul and set aside the Order of the RTC dated 5 November 2007 to permanently enjoin the RTC from further proceeding with Civil Case No. 8801.

(15) All of the foregoing actions of the Petitioner were consistent with law, particularly with the Local Government Code, contrary to Petron’s allegations.

Issue raised in the Petition for Certiorari, Prohibition and Mandamus:

Whether or not the RTC acted without or in excess of its jurisdiction and with grave abuse of discretion in causing the issuance of the writ of preliminary injunction that effectively renders nugatory the express provisions of Sections 252 and 231 of the Local Government Code.

Summary of The Supreme Court’s Decision dated 27 June 2008:

1. In the Decision of the Supreme Court dated 27 June 2008, penned by Justice Consuelo Ynares-Santiago, regarding the above-stated Petition for Certiorari (G.R. No. 180884), it was held that the question posed in the Petition, i.e., whether the collection of taxes may be suspended by reason of filing of an appeal and posting of a surety bond, is a question of law.
   
   
2. The Decision stated that Petitioner resorted to an erroneous remedy when she filed a Petition for Certiorari under Rule 65, when the proper mode should have been a Petition for Review under Rule 45.
   
   
3. Under Rule 45, the period to file a Petition for Review is 15 days from receipt of the Order appealed from. The Decision stated that the present Petition was filed beyond the said 15 day period as it was filed 43 days late.
   
   
4. The Decision further stated that, even on the assumption that a petition under Rule 65 is the proper remedy, the present petition is still dismissable. It was noted that Petitioner did not file a Motion for Reconsideration with the RTC prior to the filing of the present Petition with the Supreme Court.
   
   
5. The Decision likewise stated that Petitioner disregarded the hierarchy of courts, and that the present Petition should have been filed with the Court of Appeals instead of directly filing the same to the Supreme Court.
   
   
6. The Decision went on to state that the RTC correctly granted Petron’s petition for issuance of a writ of preliminary injunction based on Section 3, Rule 58 of the Rules of Court.
   
   
7. It was stated that there was urgency and paramount necessity for the issuance of the writ of injunction considering that what is being enjoined is the sale by public auction of 1.7 Billion Pesos worth of Petron’s properties which are vital to Petron’s operations.
   
   
8. The Decision also stated in essence that Petron had a clear and unmistakable right to refuse or to withhold in abeyance the payment of the taxes. Citing the grounds used by Petron in contesting the revised assessment, the Decision stated that the resolution of the said issues would have a direct bearing on the assessment made by Petitioner, and that it is necessary that the issues must be first passed upon before the properties of respondent is sold at public auction.
   

Courses of Action Taken by Petitioner in light of the said Decision Supreme Court dated 27 June 2008:

1. Petitioner filed with the Supreme Court a Motion for Reconsideration of the Decision dated 27 June 2008. This Motion for Reconsideration was denied by the Supreme Court in a minute resolution dated 8 September 2008.
   
   
2. Petitioner filed a Motion to Refer the Case to the Court en Banc. This is due to the fact that the Decision dated 27 June 2008 has in effect abandoned established jurisprudence that Rule 65 is the remedy for interlocutory orders such as the issuance of a writ of preliminary injunction, and the ruling in Manila Electric Company vs. Barlis (G.R. No. 114231, 18 May 2001) that the trial court has no jurisdiction to entertain a Petition for Prohibition absent petitioner’s payment, under protest, of the tax assessed. This motion was likewise denied in the said resolution dated 8 September 2008.
   

Comments on the Decision of the Supreme Court dated 27 June 2008.

Re: On the finding in the Decision dated 27 June 2008 that Petitioner resorted to an erroneous remedy when she filed a Petition for Certiorari under Rule 65, when the proper mode should have been a Petition for Review under Rule 45.

COMMENT:

1. The Order of the RTC granting the writ of preliminary injunction prayed for by Petron was an interlocutory order. Hence, Petitioner may validly file a Petition for Certiorari under Rule 65 to question the legality of such order of the RTC.
   
   
2. In the 7 August 2007 Supreme Court Decision entitled “United Overseas Bank (formerly Westmont Bank) vs. Hon. Judge Reynaldo Rios, Presiding Judge of the Regional Trial Court of Manila, Branch 33, and Rosemoor Mining and Development Corporation”, G.R. No. 171532, it was confirmed that a petition for certiorari under Rule 65, and not Rule 45, is the proper remedy for interlocutory orders.
   
   
3. In the Supreme Court Decision dated 5 August 2003 which was penned by Justice Consuelo Ynares-Santiago herself, entitled “Land Bank of the Philippines vs. Severino Listana, Jr.”, G. R. 152611, the Supreme Court specifically provided that “an order granting a writ of preliminary injunction is an interlocutory order”. Being an interlocutory order, a special civil action for certiorari under Rule 65 is a proper remedy.
   
   
4. In light of the established jurisprudence on the matter, it is extremely surprising why the subject Decision dated 27 June 2008 ruled that Petitioner availed of the wrong remedy under Rule 65. The said Decision runs counter to and in effect abandons prevailing jurisprudence that interlocutory orders, such as an order granting a writ of preliminary injunction, may be questioned in a higher court by way of Certiorari under Rule 65.

Re: On the finding that the Petition is fatally defective due to Petitioner’s failure to file a Motion for Reconsideration of the RTC’s Order dated 5 November 2007.

COMMENT:

1. While it may be true that the general rule is that a motion for reconsideration is a condition sine qua non for the filing of a petition for certiorari, such rule nevertheless is subject to recognized exceptions. The Petition for Certiorari, Prohibition and Mandamus filed by Petitioner specifically alleged that it falls within such recognized exceptions to the general rule. As such, it was pointed out in the said Petition that resort to the Supreme Court without filing of a motion for reconsideration was dictated by considerations of urgency, and that the issues raised are purely legal in nature.
   
   
2. In the case of Indiana Aerospace University vs. Commission on Higher Education, G.R. No. 139371, cited in Petitioner’s Motion for Reconsideration, the recognized exceptions to the general rule are: (a) the issues raised are purely legal in nature; (b) public interest is involved; (c) extreme urgency is obvious; (d) special circumstances that warrant immediate or more direct action. The case involves the collection of taxes due the local government unit in the amount of 1.7 Billion Pesos and the writ of preliminary injunction has deprived the local government unit the right to immediately collect such real property taxes to the detriment of its constituents. Not only was there urgency involved, but public interest was likewise a principal consideration.
   
   
3. In view of the foregoing reasons, the Decision should have allowed the Petition to fall under the exception to the general rule on the requirement of a motion for reconsideration.
   

Re: On the finding that Petitioner disregarded the rule on hierarchy of courts.

COMMENT:

1. The Decision dated 27 June 2008 likewise faulted Petitioner for filing the Petition directly to the Supreme Court instead of having the same filed with the Court of Appeals. Again, such rule on hierarchy of courts is subject to certain exceptions. The present Petition is one such exception.
   
   
2. There are compelling reasons to file the Petition directly to the Supreme Court. The case has far reaching implications on the right of local government units to collect real property taxes that it can use for public services and to finance the cost of public education. The resolution of the issue of whether or not a trial court can prohibit a local government unit to collect real property taxes, despite provisions in the Local Government Code favoring such power of the local government units, will affect not only the Province of Bataan, but all local government units in the country as well. It will have significant importance on the finances and economic viability of all local government units.
   

Re: On the finding that the RTC correctly granted Petron’s petition for issuance of a writ of preliminary injunction.

COMMENT:

1. The Decision declared that there was urgent and paramount necessity for the issuance of the writ of injunction considering that what is being enjoined is the sale by public auction of the properties of Petron amounting to 1.7 Billion Pesos, which properties are vital to Petron’s operation.
   
   
2. However, there is no urgent and paramount necessity on the part of Petron. Even assuming that the properties are sold by the Province of Bataan by public auction, under Section 261 of the Local Government Code, Petron has the right to redeem the properties within one (1) year from the date of the sale. During such one (1) year period, Petron shall have possession of the subject properties and Petron shall be entitled to the income and other fruits thereof. In light of this, Petron’s operations will not be immediately affected. As such, there is no urgent and paramount necessity for the issuance of the writ of preliminary injunction.
   
   
3. The Decision in essence also declared that Petron has a clear and unmistakable right to refuse or hold in abeyance the payment of the taxes. In support of this, the Decision cited the grounds relied upon by Petron in contesting the revised assessment. The Decision then stated that the resolution of the grounds raised by Petron would have a direct bearing on the assessment made by Petitioner and that it is necessary that the issues must first be passed upon before the properties of respondent is sold at public auction.
   
   
4. It should be noted however that the RTC, in its Order dated 5 November 2007, in justifying the issuance of the writ of preliminary injunction, used as basis the provisions of Section 267 of the Local Government Code. Section 267 provides that:
   
   

   “SEC. 267. Action Assailing Validity of Tax Sale. - No court shall entertain any action assailing the validity of any sale at public auction of real property or rights therein under this Title until the taxpayer shall have deposited with the court the amount for which the real property was sold, together with interest of two percent (2%) per month from the date of sale to the time of the institution of the action. The amount so deposited shall be paid to the purchaser at the auction sale if the deed is declared invalid but it shall be returned to the depositor if the action fails. Neither shall any court declare a sale at public auction invalid by reason of irregularities or informalities in the proceedings unless the substantive rights of the delinquent owner of the real property or the person having legal interest therein have been impaired.

   
   
5. The above-quoted Section 267 specifically applies to a case where the property has already been sold at public auction due to delinquency for real property tax. It does not apply in the present case where the property has not yet been sold. It was patently erroneous for the RTC to use Section 267 as legal basis for granting the writ of preliminary injunction in favor of Petron. Such act of the RTC amounts to excess of jurisdiction as the RTC overstepped its lawful authority. There was likewise grave abuse of discretion as such patently erroneous use by the RTC of Section 267 as basis is capricious, whimsical, arbitrary or despotic in manner, and is in effect equivalent to lack of jurisdiction.
   
   
6. The patently erroneous reliance by the RTC on Section 267 of the Local Government Code is one indication that there was no clear and unmistakable right in favor of Petron. Despite this, the Decision dated 27 June 2008 still validated the writ of preliminary injunction granted by the RTC to Petron.
   
   
7. On the other hand, Sections 252 and 231 of the Local Government Code gives the clear and unmistakable right to Petitioner to collect the real property taxes due. Under Section 252, no protest shall be entertained unless the taxpayer first pays the tax. Under Section 231, appeal on assessments of real property shall in no case suspend the collection of the corresponding realty taxes on property.
   
   
8. In Manila Electric Company vs. Barlis, G.R. No. 114231, 18 May 2001, the Supreme Court, interpreting a provision in the previous Real Property Tax Code which similar to Section 252 of the Local Govt. Code, held that the “trial court has no jurisdiction to entertain a Petition for Prohibition absent petitioner’s payment, under protest of the tax assessed as required by Section 64 of the RPTC. It is our view that this ruling is still valid despite the passage of the Local Government Code as the reason behind the law remains the same. In view of this ruling, the RTC had no authority to grant the writ of preliminary injunction in favor of Petron. This is another basis for stating that Petron had no clear and unmistakable right.
   
   
9. Even assuming that there is doubt in the interpretation of Sections 252 and 231 of the Local Government Code, such doubt should have been resolved in favor of the LGU. Section 5 (a), Chapter 1, Title 1 of the Local Government Code provides that in the interpretation of the provisions of the same, any provision on a power of a local government unit shall be liberally interpreted in its favor, and in case of doubt, any question thereon shall be resolved in favor of devolution of powers and of the local government unit. If further provides that any fair and reasonable doubt as to the existence of the power shall be interpreted in favor of the local government unit concerned. This was no longer taken into consideration in the Decision.
   
   
10. The amount of deficiency real estate tax due Petron was in fact arrived at following data supplied by Petron itself. Such data consisting of annual acquisition costs of machineries can be seen from the printed copies of the electronic email of one Arvin Frank C. Daquiog of the Government Reports and Compliance Controllers Department of Petron and the attached computation/data send on 20 March 2007 to the Bataan Provincial Assessor. (Annexes “A-MR” and “B-MR” of Petitioner’s Motion for Reconsideration) The said data from Petron itself show that the Sworn Statement of the True Value of the Real Properties previously submitted by Petron was grossly understated. In light of this, it is an error to rule that Petron had a clear and unmistakable right to hold in abeyance the payment of real property tax.
    

Re: On the issue of forum shopping committed by Petron, which was not discussed and was not ruled upon in the Decision of the Supreme Court.

COMMENT:

1. The Petition of Petron with the RTC (Case No. 8801) was filed while Petron’s Petition with the LBAA is pending. The case with the RTC and the LBAA filed by Petron involved an identity of parties, identity of rights asserted and reliefs prayed for, and a decision on one case will amount to res adjudicata. Petron was therefore guilty of forum shopping.
   
   
2. The issue of forum shopping was squarely raised by Petitioner in the Petition for Certiorari, Prohibition and Mandamus. On account of such forum shopping, the RTC should have dismissed the complaint of Petron entirely. Instead, the RTC even issued the subject writ of preliminary injuction.
   
   
3. The LBAA has in fact dismissed the Petition of Petron on account of such forum shopping committed by Petron.
   
   
4. However, the Decision dated 27 June 2008 never mentioned anything about this issue of forum shopping.
   
   
5. Per the ruling of the Supreme Court in City Government of Quezon City vs. Bayan Telecommunications, Inc., G.R. No. 162015, 6 March 2006, the proper procedure is to first withdraw the appeal from the LBAA and then file the Petition for Prohibition with the RTC. However, Petron did not comply with this and instead maintained the LBAA case while it filed the RTC case in violation of the rule against forum shopping and multiplicity of suits based on a single cause of action.

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[1 Aside from the Executive Summary, the other articles included are as follows: Petition, Comment, Reply, Decision, Motion for Reconsideration and Motion to Refer the Case to the Court En Banc.]

G.R. No. 102132

Republic of the Philippines

SUPREME COURT

Manila

THIRD DIVISION

G.R. No. 102132

(March 19, 1993)

DAVAO INTEGRATED PORT STEVEDORING SERVICES,

Petitioner,

- vs. -

RUBEN V. ABARQUEZ, in his capacity as an accredited Voluntary Arbitrator and

THE ASSOCIATION OF TRADE UNIONS (ATU-TUCP),

Respondents.

Libron, Gaspar & Associates for petitioner.

Bansalan B. Metilla for Association of Trade Unions (ATU-TUCP).

x - - - - - - - - - - - - - - - - - - - - - - - /

ROMERO, J.:

In this petition for certiorari, petitioner Davao Integrated Port Services Corporation seeks to reverse the Award1 issued on September 10, 1991 by respondent Ruben V. Abarquez, in his capacity as Voluntary Arbitrator of the National Conciliation and Mediation Board, Regional Arbitration Branch XI in Davao City in Case No. AC-211-BX1-10-003-91 which directed petitioner to grant and extend the privilege of commutation of the unenjoyed portion of the sick leave with pay benefits to its intermittent field workers who are members of the regular labor pool and the present regular extra pool in accordance with the Collective Bargaining Agreement (CBA) executed between petitioner and private respondent Association of Trade Unions (ATU-TUCP), from the time it was discontinued and henceforth.

The facts are as follows:

Petitioner Davao Integrated Port Stevedoring Services (petitioner-company) and private respondent ATU-TUCP (Union), the exclusive collective bargaining agent of the rank and file workers of petitioner-company, entered into a collective bargaining agreement (CBA) on October 16, 1985 which, under Sections 1 and 3, Article VIII thereof, provide for sick leave with pay benefits each year to its employees who have rendered at least one (1) year of service with the company, thus:

ARTICLE VIII

Sec. 1. Sick Leaves — The Company agrees to grant 15 days sick leave with pay each year to every regular non-intermittent worker who already rendered at least one year of service with the company. However, such sick leave can only be enjoyed upon certification by a company designated physician, and if the same is not enjoyed within one year period of the current year, any unenjoyed portion thereof, shall be converted to cash and shall be paid at the end of the said one year period. And provided however, that only those regular workers of the company whose work are not intermittent, are entitled to the herein sick leave privilege.

xxx xxx xxx

Sec. 3. — All intermittent field workers of the company who are members of the Regular Labor Pool shall be entitled to vacation and sick leaves per year of service with pay under the following schedule based on the number of hours rendered including overtime, to wit:

Hours of Service Per Vacation Sick Leave

Calendar Year Leave

Less than 750 NII NII

751 — 825 6 days 6 days

826 — 900 7 7

901 — 925 8 8

926 — 1,050 9 9

1,051 — 1,125 10 10

1,126 — 1,200 11 11

1,201 — 1,275 12 12

1,276 — 1,350 13 13

1,351 — 1,425 14 14

1,426 — 1,500 15 15

The conditions for the availment of the herein vacation and sick leaves shall be in accordance with the above provided Sections 1 and 2 hereof, respectively.

Upon its renewal on April 15, 1989, the provisions for sick leave with pay benefits were reproduced under Sections 1 and 3, Article VIII of the new CBA, but the coverage of the said benefits was expanded to include the "present Regular Extra Labor Pool as of the signing of this Agreement." Section 3, Article VIII, as revised, provides, thus:

Sec. 3. — All intermittent field workers of the company who are members of the Regular Labor Pool and present Regular Extra Labor Pool as of the signing of his agreement shall be entitled to vacation and sick leaves per year of service with pay under the following schedule based on the number of hours rendered including overtime, to wit:

Hours of Service Per Vacation Sick Leave

Calendar Year Leave

Less than 750 NII NII

751 — 825 6 days 6 days

826 — 900 7 7

901 — 925 8 8

926 — 1,050 9 9

1,051 — 1,125 10 10

1,126 — 1,200 11 11

1,201 — 1,275 12 12

1,276 — 1,350 13 13

1,351 — 1,425 14 14

1,426 — 1,500 15 15

The conditions for the availment of the herein vacation and sick leaves shall be in accordance with the above provided Sections 1 and 2 hereof, respectively.

During the effectivity of the CBA of October 16, 1985 until three (3) months after its renewal on April 15, 1989, or until July 1989 (a total of three (3) years and nine (9) months), 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 number of days of their sick leave per year depends on the number of hours of service per calendar year in accordance with the schedule provided in Section 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 (who replaced Mr. Cecilio Beltran, Jr. upon the latter's resignation in June 1989), 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 to the said discontinuance of commutation or conversion to cash of the unenjoyed sick leave with pay benefits of petitioner's intermittent workers contending that it is a deviation from the true intent of the parties that negotiated the CBA; that it would violate the principle in labor laws that benefits already extended shall not be taken away and that it would result in discrimination between the non-intermittent and the intermittent workers of the petitioner-company.

Upon failure of the parties to amicably settle the issue on the interpretation of Sections 1 and 3, Article VIII of the 1989 CBA, the Union brought the matter for voluntary arbitration before the National Conciliation and Mediation Board, Regional Arbitration Branch XI at Davao City by way of complaint for enforcement of the CBA. The parties mutually designated public respondent Ruben Abarquez, Jr. to act as voluntary arbitrator.

After the parties had filed their respective position papers,2 public respondent Ruben Abarquez, Jr. issued on September 10, 1991 an Award in favor of the Union ruling that the regular intermittent workers are entitled to commutation of their unenjoyed sick leave with pay benefits under Sections 1 and 3 of the 1989 CBA, the dispositive portion of which reads:

WHEREFORE, premises considered, the management of the respondent Davao Integrated Port Stevedoring Services Corporation is hereby directed to grant and extend the sick leave privilege of the commutation of the unenjoyed portion of the sick leave of all the intermittent field workers who are members of the regular labor pool and the present extra pool in accordance with the CBA from the time it was discontinued and henceforth.

SO ORDERED.

Petitioner-company disagreed with the aforementioned ruling of public respondent, hence, the instant petition.

Petitioner-company argued that it is clear from the language and intent of the last sentence of Section 1, Article VIII of the 1989 CBA that only the regular workers whose work are not intermittent are entitled to the benefit of conversion to cash of the unenjoyed portion of sick leave, thus: ". . . And provided, however, that only those regular workers of the Company whose work are not intermittent are entitled to the herein sick leave privilege."

Petitioner-company further argued that while the intermittent workers were paid the cash equivalent of their unenjoyed sick leave with pay benefits during the previous management of Mr. Beltran who misinterpreted Sections 1 and 3 of Article VIII of the 1985 CBA, it was well within petitioner-company's rights to rectify the error it had committed and stop the payment of the said sick leave with pay benefits. An error in payment, according to petitioner-company, can never ripen into a practice.

We find the arguments unmeritorious.

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,3 it is not, however, an ordinary contract to which is applied the principles of law governing ordinary contracts.4 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. 5

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. The manner they were deprived of the privilege previously recognized and extended to them by petitioner-company during the lifetime of the CBA of October 16, 1985 until three (3) months from its renewal on April 15, 1989, or a period of three (3) years and nine (9) months, is not only tainted with arbitrariness but likewise discriminatory in nature. Petitioner-company is of the mistaken notion that since the privilege of commutation or conversion to cash of the unenjoyed portion of the sick leave with pay benefits is found in Section 1, Article VIII, only the regular non-intermittent workers and no other can avail of the said privilege because of the proviso found in the last sentence thereof.

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 not disputed that both classes of workers are entitled to sick leave with pay benefits provided they comply with the conditions set forth under Section 1 in relation to the last paragraph of Section 3, to wit: (1) the employee-applicant must be regular or must have rendered at least one year of service with the company; and (2) the application must be accompanied by a certification from a company-designated physician.

Sick leave benefits, like other economic benefits stipulated in the CBA such as maternity leave and vacation leave benefits, among others, are by their nature, intended to be replacements for regular income which otherwise would not be earned because an employee is not working during the period of said leaves.6 They are non-contributory in nature, in the sense that the employees contribute nothing to the operation of the benefits.7 By their nature, upon agreement of the parties, they are intended to alleviate the economic condition of the workers.

After a careful examination of Section 1 in relation to Section 3, Article VIII of the 1989 CBA in light of the facts and circumstances attendant in the instant case, we find and so hold that the last sentence of Section 1, Article VIII of the 1989 CBA, invoked by petitioner-company does not bar the regular intermittent workers from the privilege of commutation or conversion to cash of the unenjoyed portion of their sick leave with pay benefits, if qualified. For the phrase "herein sick leave privilege," as used in the last sentence of Section 1, refers to the privilege of having a fixed 15-day sick leave with pay which, as mandated by Section 1, only the non-intermittent workers are entitled to. This fixed 15-day sick leave with pay benefit should be distinguished from the variable number of days of sick leave, not to exceed 15 days, extended to intermittent workers under Section 3 depending on the number of hours of service rendered to the company, including overtime pursuant to the schedule provided therein. It is only fair and reasonable for petitioner-company not to stipulate a fixed 15-day sick leave with pay for its regular intermittent workers since, as the term "intermittent" implies, there is irregularity in their work-days. Reasonable and practical interpretation must be placed on contractual provisions. Interpretatio fienda est ut res magis valeat quam pereat. Such interpretation is to be adopted, that the thing may continue to have efficacy rather than fail.8

We find the same to be a reasonable and practical distinction readily discernible in Section 1, in relation to Section 3, Article VIII of the 1989 CBA between the two classes of workers in the company insofar as sick leave with pay benefits are concerned. Any other distinction would cause discrimination on the part of intermittent workers contrary to the intention of the parties that mutually agreed in incorporating the questioned provisions in the 1989 CBA.

Public respondent correctly observed that the parties to the CBA clearly intended the same sick leave privilege to be accorded the intermittent workers in the same way that they are both given the same treatment with respect to vacation leaves — non-commutable and non-cumulative. If they are treated equally with respect to vacation leave privileges, with more reason should they be on par with each other with respect to sick leave privileges.9 Besides, if the intention were otherwise, during its renegotiation, why did not the parties expressly stipulate in the 1989 CBA that regular intermittent workers are not entitled to commutation of the unenjoyed portion of their sick leave with pay benefits?

Whatever doubt there may have been early on was clearly obliterated when petitioner-company recognized the said privilege and paid its intermittent workers the cash equivalent of the unenjoyed portion of their sick leave with pay benefits during the lifetime of the CBA of October 16, 1985 until three (3) months from its renewal on April 15, 1989. 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.10 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. 11 Under the circumstances, these may be deemed to have ripened into company practice or policy which cannot be peremptorily withdrawn.12

Moreover, petitioner-company's objection to the authority of the Voluntary Arbitrator to direct the commutation of the unenjoyed portion of the sick leave with pay benefits of intermittent workers in his decision is misplaced. Article 261 of the Labor Code is clear. The questioned directive of the herein public respondent is the necessary consequence of the exercise of his arbitral power as Voluntary Arbitrator under Article 261 of the Labor Code "to hear and decide all unresolved grievances arising from the interpretation or implementation of the Collective Bargaining Agreement." We, therefore, find that no grave abuse of discretion was committed by public respondent in issuing the award (decision). Moreover, his interpretation of Sections 1 and 3, Article VIII of the 1989 CBA cannot be faulted with and is absolutely correct.

WHEREFORE, in view of the foregoing, the petition is DISMISSED. The award (decision) of public respondent dated September 10, 1991 is hereby AFFIRMED. No costs.

SO ORDERED.

Feliciano, Bidin, Davide, Jr. and Melo, JJ., concur.

Gutierrez, Jr., J., is on leave.

__________________

Footnotes

1 Annex "E," Petition, pp. 39-43, Rollo. Article 262-A of the Labor Code used the terms "decision, order or award" in describing the decision of the voluntary arbitrator. There is no significance attached to the use of term "award" by public respondent contrary to petitioner's apprehension.

2 pp. 24-38, Rollo.

3 Meycauayan College v. Drilon, 185 SCRA 50 (1990); Kapisanan ng mga Manggagawa sa La Suerte-FOITAF v. Noriel, G.R. No. L-45475, June 20, 1977, 77 SCRA 414; Mactan Workers Union v. Aboitiz, G.R. No. L-30241, June 30, 1972, 45 SCRA 577.

4 Transportation-Communication Employees Union v. Union P.R. Co., 385 US 157, 17 L Ed 2d 264, 87 S Ct 369; John Wiley & Sons, Inc. v. Livingston, 376 US 543, 11 L Ed 2d 898, 84 S Ct 909.

5 48A Am Jur 2d, s. 1800, pp. 255-256.

6 Singapore Airlines Local Employees Association v. NLRC, G.R. No. L-65786, July 16, 1984, 130 SCRA 472.

7 Nestle Philippines, Inc. v. NLRC, G.R. No. 921231, February 4, 1991, 193 SCRA 504.

8 Singapore Airlines Local Employees Association v. NLRC. supra, citing Martin v. Sheppard, 102 S Co. 2nd p. 1036; Adamowski v. Bard, AC Pa. 193F 2s p. 578.

9 p. 43, Rollo.

10 Article 100, Labor Code of the Philippines; Nestle Philippines, Inc. v. NLRC, G.R. No. 91231, February 4, 1991, 193 SCRA 504; Tiangco, et. al. v. Leogardo, G.R. No. L-57636, May 16, 1983, 122 SCRA 267.

11 p. 29, Rollo; p. 36, Rollo.

12 Republic Planters Bank v. NLRC, G.R. No. L-79488, September 30, 1988, 166 SCRA 197.

G.R. No. 78763

Republic of the Philippines

SUPREME COURT

Manila

FIRST DIVISION

G.R. No. 78763

July 12,1989

MANILA ELECTRIC COMPANY,

Petitioner,

- vs. -

THE NATIONAL LABOR RELATIONS COMMISSION,

and APOLINARIO M. SIGNO,

Respondents.

x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - /

Angara, Abello, Concepcion, Regala & Cruz for petitioner.

Dominador Maglalang for private respondent.

MEDIALDEA, J.:

This is a petition for certiorari under Rule 65 of the Rules of Court seeking the annulment of the resolution of the respondent National Labor Relations Commission dated March 12, 1987 (p. 28, Rollo) in NLRC Case No. NCR-8-3808-83, entitled, "Apolinario M. Signo, Complainant, versus Manila Electric Company, Respondents", affirming the decision of the Labor Arbiter which ordered the reinstatement of private respondent herein, Apolinario Signo, to his former position without backwages.

The antecedent facts are as follows:

Private respondent Signo was employed in petitioner company as supervisor-leadman since January 1963 up to the time when his services were terminated on May 18, 1983.

In 1981, a certain Fernando de Lara filed an application with the petitioner company for electrical services at his residence at Peñafrancia Subdivision, Marcos Highway, Antipolo, Rizal. Private respondent Signo facilitated the processing of the said application as well as the required documentation for said application at the Municipality of Antipolo, Rizal. In consideration thereof, private respondent received from Fernando de Lara the amount of P7,000.00. Signo thereafter filed the application for electric services with the Power Sales Division of the company.

It was established that the area where the residence of de Lara was located is not yet within the serviceable point of Meralco, because the place was beyond the 30-meter distance from the nearest existing Meralco facilities. In order to expedite the electrical connections at de Lara's residence, certain employees of the company, including respondent Signo, made it appear in the application that the sari-sari store at the corner of Marcos Highway, an entrance to the subdivision, is applicant de Lara's establishment, which, in reality is not owned by the latter.

As a result of this scheme, the electrical connections to de Lara's residence were installed and made possible. However, due to the fault of the Power Sales Division of petitioner company, Fernando de Lara was not billed for more than a year.

Petitioner company conducted an investigation of the matter and found respondent Signo responsible for the said irregularities in the installation. Thus, the services of the latter were terminated on May 18, 1983.

On August 10 1983, respondent Signo filed a complaint for illegal dismissal, unpaid wages, and separation pay.

After the parties had submitted their position papers, the Labor Arbiter rendered a decision (p. 79, Rollo) on April 29, 1985, which stated, inter alia:

Verily, complainant's act of inducing the Meralco employees to effectuate the installation on Engr. de Lara's residence prejudiced the respondent, and therefore, complainant himself had indeed became a participant in the transactions, although not directly, which turned out to be illegal, not to mention that some of the materials used therein belongs to Meralco, some of which were inferior quality. . . .

While complainant may deny the violation, he cannot do away with company's Code on Employee Discipline, more particularly Section 7, par. 8 and Section 6, par. 24 thereof However, as admitted by the respondent, the infraction of the above cited Code is punishable by reprimand to dismissal."

... . And in this case, while considering that complainant indeed committed the above-cited infractions of company Code of Employee Discipline, We shall also consider his records of uninterrupted twenty (20) years of service coupled with two (2) commendations for honesty. Likewise, We shall take note that subject offense is his first, and therefore, to impose the extreme penalty of dismissal is certainly too drastic. A penalty short of dismissal is more in keeping with justice, and adherence to compassionate society.

WHEREFORE, respondent Meralco is hereby directed to reinstate complainant Apolinario M. Signo to his former position as Supervisor Leadman without backwages, considering that he is not at all faultless. He is however, here warned, that commission of similar offense in the future, shall be dealt with more severely.

SO ORDERED.

Both parties appealed from the decision to the respondent Commission. On March 12, 1987, the respondent Commission dismissed both appeals for lack of merit and affirmed in toto the decision of the Labor Arbiter.

On June 23, 1987, the instant petition was filed with the petitioner contending that the respondent Commission committed grave abuse of discretion in affirming the decision of the Labor Arbiter. A temporary restraining order was issued by this Court on August 3, 1987, enjoining the respondents from enforcing the questioned resolution of the respondent Commission.

The issue to resolve in the instant case is whether or not respondent Signo should be dismissed from petitioner company on grounds of serious misconduct and loss of trust and confidence.

Petitioner contends that respondent Signo violated Sections 6 and 7 of the company's Code on Employee Discipline, which provide:

Section 6, Par. 24 — Encouraging, inducing or threatening another employee to perform an act constituting a violation of this Code or of company work, rules or an offense in connection with the official duties of the latter, or allowing himself to be persuaded, induced or influenced to commit such offense.

Penalty — Reprimand to dismissal, depending upon the gravity of the offense.

Section 7, Par. 8 — Soliciting or receiving money, gift, share, percentage or benefits from any person, personally or through the mediation of another, to perform an act prejudicial to the Company.

Penalty — Dismissal. (pp. 13-14, Rollo)

Petitioner further argues that the acts of private respondent constituted breach of trust and caused the petitioner company economic losses resulting from the unbilled electric consumption of de Lara; that in view thereof, the dismissal of private respondent Signo is proper considering the circumstances of the case.

The power to dismiss is the normal prerogative of the employer. An employer, generally, can dismiss or lay-off an employee for just and authorized causes enumerated under Articles 282 and 283 of the Labor Code. However, the right of an employer to freely discharge his employees is subject to regulation by the State, basically in the exercise of its paramount police power. This is so because the preservation of the lives of the citizens is a basic duty of the State, more vital than the preservation of corporate profits (Euro-Linea, Phil. Inc. v. NLRC, G.R. No. 75782, December 1, 1987,156 SCRA 78).

There is no question that herein respondent Signo is guilty of breach of trust and violation of company rules, the penalty for which ranges from reprimand to dismissal depending on the gravity of the offense. However, as earlier stated, the respondent Commission and the Labor Arbiter found that dismissal should not be meted to respondent Signo considering his twenty (20) years of service in the employ of petitioner, without any previous derogatory record, in addition to the fact that petitioner company had awarded him in the past, two (2) commendations for honesty. If ever the petitioner suffered losses resulting from the unlisted electric consumption of de Lara, this was found to be the fault of petitioner's Power Sales Division.

We find no reason to disturb these findings. Well-established is the principle that findings of administrative agencies which have acquired expertise because their jurisdiction is confined to specific matters are generally accorded not only respect but even finality. Judicial review by this Court on labor cases does not go so far as to evaluate the sufficiency of the evidence upon which the proper labor officer or office based his or its determination but is limited to issues of jurisdiction or grave abuse of discretion (Special Events and Central Shipping Office Workers Union v. San Miguel Corporation, G.R. Nos. L-51002-06, May 30,1983,122 SCRA 557).

This Court has held time and again, in a number of decisions, that notwithstanding the existence of a valid cause for dismissal, such as breach of trust by an employee, nevertheless, dismissal should not be imposed, as it is too severe a penalty if the latter has been employed for a considerable length of time in the service of his employer. (Itogon-Suyoc Mines, Inc. v. NLRC, et al., G.R. No. L- 54280, September 30,1982,117 SCRA 523; Meracap v. International Ceramics Manufacturing Co., Inc., et al., G.R. Nos. L-48235-36, July 30,1979, 92 SCRA 412; Sampang v. Inciong, G.R. No. 50992, June 19,1985,137 SCRA 56; De Leon v. NLRC, G.R. No. L-52056, October 30,1980, 100 SCRA 691; Philippine Airlines, Inc. v. PALEA, G.R. No. L-24626, June 28, 1974, 57 SCRA 489).

In a similar case, this Court ruled:

As repeatedly been held by this Court, an employer cannot legally be compelled to continue with the employment of a person who admittedly was guilty of breach of trust towards his employer and whose continuance in the service of the latter is patently inimical to its interest. The law in protecting the rights of the laborers, authorized neither oppression nor self- destruction of the employer.

However, taking into account private respondent's 'twenty-three (23) years of service which undisputedly is unblemished by any previous derogatory record' as found by the respondent Commission itself, and since he has been under preventive suspension during the pendency of this case, in the absence of a showing that the continued employment of private respondent would result in petitioner's oppression or self-destruction, We are of the considered view that his dismissal is a drastic punishment. ... .

xxx xxx xxx

The ends of social and compassionate justice would therefore be served if private respondent is reinstated but without backwages in view of petitioner's obvious good faith. (Itogon- Suyoc Mines, Inc. v. NLRC, et al., 11 7 SCRA 528)

Further, in carrying out and interpreting the Labor Code's provisions and its implementing regulations, the workingman's welfare should be the primordial and paramount consideration. This kind of interpretation gives meaning and substance to the liberal and compassionate spirit of the law as provided for in Article 4 of the New Labor Code which states that "all doubts in the implementation and interpretation of the provisions of the Labor Code including its implementing rules and regulations shall be resolved in favor of labor" (Abella v. NLRC, G.R. No. 71812, July 30,1987,152 SCRA 140).

In view of the foregoing, reinstatement of respondent Signo is proper in the instant case, but without the award of backwages, considering the good faith of the employer in dismissing the respondent.

ACCORDINGLY, premises considered, the petition is hereby DISMISSED and the assailed decision of the National Labor Relations Commission dated March 12, 1987 is AFFIRMED. The temporary restraining order issued on August 3, 1987 is lifted.

SO ORDERED.

Narvasa, Cruz, Gancayco and Griño-Aquino, JJ., concur.

G.R. No. L-54334

Republic of the Philippines

SUPREME COURT

Manila

SECOND DIVISION

G.R. No. L-54334

(January 22, 1986)

KIOK LOY, doing business under the name

and style SWEDEN ICE CREAM PLANT,

petitioner,

- vs. -

NATIONAL LABOR RELATIONS COMMISSION (NLRC) and

PAMBANSANG KILUSAN NG PAGGAWA (KILUSAN),

respondents.

Ablan and Associates for petitioner.

Abdulcadir T. Ibrahim for private respondent.

CUEVAS, J.:

Petition for certiorari to annul the decision 1 of the National Labor Relations Commission (NLRC) dated July 20, 1979 which found petitioner Sweden Ice Cream guilty of unfair labor practice for unjustified refusal to bargain, in violation of par. (g) of Article 249 2 of the New Labor Code, 3 and declared the draft proposal of the Union for a collective bargaining agreement as the governing collective bargaining agreement between the employees and the management.

The pertinent background facts are as follows:

In a certification election held on October 3, 1978, the Pambansang Kilusang Paggawa (Union for short), a legitimate late labor federation, won and was subsequently certified in a resolution dated November 29, 1978 by the Bureau of Labor Relations as the sole and exclusive bargaining agent of the rank-and-file employees of Sweden Ice Cream Plant (Company for short). The Company's motion for reconsideration of the said resolution was denied on January 25, 1978.

Thereafter, and more specifically on December 7, 1978, the Union furnished 4 the Company with two copies of its proposed collective bargaining agreement. At the same time, it requested the Company for its counter proposals. Eliciting no response to the aforesaid request, the Union again wrote the Company reiterating its request for collective bargaining negotiations and for the Company to furnish them with its counter proposals. Both requests were ignored and remained unacted upon by the Company.

Left with no other alternative in its attempt to bring the Company to the bargaining table, the Union, on February 14, 1979, filed a "Notice of Strike", with the Bureau of Labor Relations (BLR) on ground of unresolved economic issues in collective bargaining. 5

Conciliation proceedings then followed during the thirty-day statutory cooling-off period. But all attempts towards an amicable settlement failed, prompting the Bureau of Labor Relations to certify the case to the National Labor Relations Commission (NLRC) for compulsory arbitration pursuant to Presidential Decree No. 823, as amended. The labor arbiter, Andres Fidelino, to whom the case was assigned, set the initial hearing for April 29, 1979. For failure however, of the parties to submit their respective position papers as required, the said hearing was cancelled and reset to another date. Meanwhile, the Union submitted its position paper. The Company did not, and instead requested for a resetting which was granted. The Company was directed anew to submit its financial statements for the years 1976, 1977, and 1978.

The case was further reset to May 11, 1979 due to the withdrawal of the Company's counsel of record, Atty. Rodolfo dela Cruz. On May 24, 1978, Atty. Fortunato Panganiban formally entered his appearance as counsel for the Company only to request for another postponement allegedly for the purpose of acquainting himself with the case. Meanwhile, the Company submitted its position paper on May 28, 1979.

When the case was called for hearing on June 4, 1979 as scheduled, the Company's representative, Mr. Ching, who was supposed to be examined, failed to appear. Atty. Panganiban then requested for another postponement which the labor arbiter denied. He also ruled that the Company has waived its right to present further evidence and, therefore, considered the case submitted for resolution.

On July 18, 1979, labor arbiter Andres Fidelino submitted its report to the National Labor Relations Commission. On July 20, 1979, the National Labor Relations Commission rendered its decision, the dispositive portion of which reads as follows:

WHEREFORE, the respondent Sweden Ice Cream is hereby declared guilty of unjustified refusal to bargain, in violation of Section (g) Article 248 (now Article 249), of P.D. 442, as amended. Further, the draft proposal for a collective bargaining agreement (Exh. "E ") hereto attached and made an integral part of this decision, sent by the Union (Private respondent) to the respondent (petitioner herein) and which is hereby found to be reasonable under the premises, is hereby declared to be the collective agreement which should govern the relationship between the parties herein.

SO ORDERED. (Emphasis supplied)

Petitioner now comes before Us assailing the aforesaid decision contending that the National Labor Relations Commission acted without or in excess of its jurisdiction or with grave abuse of discretion amounting to lack of jurisdiction in rendering the challenged decision. On August 4, 1980, this Court dismissed the petition for lack of merit. Upon motion of the petitioner, however, the Resolution of dismissal was reconsidered and the petition was given due course in a Resolution dated April 1, 1981.

Petitioner Company now maintains that its right to procedural due process has been violated when it was precluded from presenting further evidence in support of its stand and when its request for further postponement was denied. Petitioner further contends that the National Labor Relations Commission's finding of unfair labor practice for refusal to bargain is not supported by law and the evidence considering that it was only on May 24, 1979 when the Union furnished them with a copy of the proposed Collective Bargaining Agreement and it was only then that they came to know of the Union's demands; and finally, that the Collective Bargaining Agreement approved and adopted by the National Labor Relations Commission is unreasonable and lacks legal basis.

The petition lacks merit. Consequently, its dismissal is in order.

Collective bargaining which is defined as negotiations towards a collective agreement, 6 is one of the democratic frameworks under the New Labor Code, designed to stabilize the relation between labor and management and to create a climate of sound and stable industrial peace. It is a mutual responsibility of the employer and the Union and is characterized as a legal obligation. So much so that Article 249, par. (g) of the Labor Code makes it an unfair labor practice for an employer to refuse "to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement with respect to wages, hours of work, and all other terms and conditions of employment including proposals for adjusting any grievance or question arising under such an agreement and executing a contract incorporating such agreement, if requested by either party.

While it is a mutual obligation of the parties to bargain, the employer, however, is not under any legal duty to initiate contract negotiation. 7 The mechanics of collective bargaining is set in motion only when the following jurisdictional preconditions are present, namely, (1) possession of the status of majority representation of the employees' representative in accordance with any of the means of selection or designation provided for by the Labor Code; (2) proof of majority representation; and (3) a demand to bargain under Article 251, par. (a) of the New Labor Code . ... all of which preconditions are undisputedly present in the instant case.

From the over-all conduct of petitioner company in relation to the task of negotiation, there can be no doubt that the Union has a valid cause to complain against its (Company's) attitude, the totality of which is indicative of the latter's disregard of, and failure to live up to, what is enjoined by the Labor Code — to bargain in good faith.

We are in total conformity with respondent NLRC's pronouncement that petitioner Company is GUILTY of unfair labor practice. It has been indubitably established that (1) respondent Union was a duly certified bargaining agent; (2) it made a definite request to bargain, accompanied with a copy of the proposed Collective Bargaining Agreement, to the Company not only once but twice which were left unanswered and unacted upon; and (3) the Company made no counter proposal whatsoever all of which conclusively indicate lack of a sincere desire to negotiate. 8 A Company's refusal to make counter proposal if considered in relation to the entire bargaining process, may indicate bad faith and this is specially true where the Union's request for a counter proposal is left unanswered. 9 Even during the period of compulsory arbitration before the NLRC, petitioner Company's approach and attitude-stalling the negotiation by a series of postponements, non-appearance at the hearing conducted, and undue delay in submitting its financial statements, lead to no other conclusion except that it is unwilling to negotiate and reach an agreement with the Union. Petitioner has not at any instance, evinced good faith or willingness to discuss freely and fully the claims and demands set forth by the Union much less justify its opposition thereto. 10

The case at bar is not a case of first impression, for in the Herald Delivery Carriers Union (PAFLU) vs. Herald Publications 11 the rule had been laid down that "unfair labor practice is committed when it is shown that the respondent employer, after having been served with a written bargaining proposal by the petitioning Union, did not even bother to submit an answer or reply to the said proposal This doctrine was reiterated anew in Bradman vs. Court of Industrial Relations 12 wherein it was further ruled that "while the law does not compel the parties to reach an agreement, it does contemplate that both parties will approach the negotiation with an open mind and make a reasonable effort to reach a common ground of agreement

As a last-ditch attempt to effect a reversal of the decision sought to be reviewed, petitioner capitalizes on the issue of due process claiming, that it was denied the right to be heard and present its side when the Labor Arbiter denied the Company's motion for further postponement.

Petitioner's aforesaid submittal failed to impress Us. Considering the various postponements granted in its behalf, the claimed denial of due process appeared totally bereft of any legal and factual support. As herein earlier stated, petitioner had not even honored respondent Union with any reply to the latter's successive letters, all geared towards bringing the Company to the bargaining table. It did not even bother to furnish or serve the Union with its counter proposal despite persistent requests made therefor. Certainly, the moves and overall behavior of petitioner-company were in total derogation of the policy enshrined in the New Labor Code which is aimed towards expediting settlement of economic disputes. Hence, this Court is not prepared to affix its imprimatur to such an illegal scheme and dubious maneuvers.

Neither are WE persuaded by petitioner-company's stand that the Collective Bargaining Agreement which was approved and adopted by the NLRC is a total nullity for it lacks the company's consent, much less its argument that once the Collective Bargaining Agreement is implemented, the Company will face the prospect of closing down because it has to pay a staggering amount of economic benefits to the Union that will equal if not exceed its capital. Such a stand and the evidence in support thereof should have been presented before the Labor Arbiter which is the proper forum for the purpose.

We agree with the pronouncement that it is not obligatory upon either side of a labor controversy to precipitately accept or agree to the proposals of the other. But an erring party should not be tolerated and allowed with impunity to resort to schemes feigning negotiations by going through empty gestures. 13 More so, as in the instant case, where the intervention of the National Labor Relations Commission was properly sought for after conciliation efforts undertaken by the BLR failed. The instant case being a certified one, it must be resolved by the NLRC pursuant to the mandate of P.D. 873, as amended, which authorizes the said body to determine the reasonableness of the terms and conditions of employment embodied in any Collective Bargaining Agreement. To that extent, utmost deference to its findings of reasonableness of any Collective Bargaining Agreement as the governing agreement by the employees and management must be accorded due respect by this Court.

WHEREFORE, the instant petition is DISMISSED. The temporary restraining order issued on August 27, 1980, is LIFTED and SET ASIDE.

No pronouncement as to costs.

SO ORDERED.

Concepcion, Jr., (Chairman), Abad Santos, Escolin and Alampay, JJ., concur.

______________

Footnotes:

1 Pages 23-26, Rollo.

2 Previously Article 248 renumbered as Article 249 by Batas Pambansa Blg. 70, May 1, 1980.

3 P.D. 442, as amended.

4 Thru a letter attached thereto to BLR Resolution.

5 BLR-S-2-692-79.

6 Pampanga Bus Co. vs. Pambusco Employees, 68 Phil. 541.

7 National Labor Relations Board vs. Columbian Enameling & Stamping Co., 306 U.S. 292 '83 L. Ed. 660,59 Ct 501 (1939).

8 National Labor Relations Board vs. George Piling & Sons Co., 119 F. (2nd) 32.

9 Teller, II Labor Disputes & Collective Bargaining 889, citing Glove Cotton Mills vs. NLRB 103 F. (2nd) 91.

10 Herald Delivery Carriers Union (PAFLU) vs. Herald Publications, Inc., 55 SCRA 713 (1974), citing NLRB vs. Piling & Sons, Co., 119 F. (2nd) 32 (1941).

11 55 SCRA 713 (1974).

12 78 SCRA 10 (1977), citing Prof. Archibald Cox, "The Duty to Bargain in Good Faith", 71 Harv. Law Rev. 1401, 1405 (1934).

13 Rothenberg on Labor Relations, p. 435m citing NLRB vs. Boss Mfg. Co., 107 F. (2nd) 574; NLRB vs. Sunshine Mining Co., 110 F (2nd) 780; NLRB vs. Condenser Corp., 128 F. (2nd) 67.