Cirtek Employees Labor Union vs Cirtek Electronics, Inc.

October 22, 2013
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Labor Law – Labor Relations – Power of the Secretary of Labor in Resolving CBA Disputes

In 2005, a CBA dispute arose between Cirtek Electronics and Cirtek Employees Labor Union (CELU). The dispute revolved around the provisions on the yearly wage increase. A deadlock ensued as well as a strike. The Secretary of Labor took over the case.

While the case was pending, Cirtek and CELU entered into a Memorandum of Agreement (MOA) whereby Cirtek agreed to increase the wage by P9.00 per day. Later, Secretary of Labor finally came up with a decision ordering Cirtek to increase the employees’ wages by a minimum of  P10.00 to a maximum of P15.00 per day (depending on seniority?).

Cirtek assailed the order of the Secretary on the ground that it violates the MOA. CELU on the other hand agreed with the Secretary invoking that Cirtek agreed that should the Secretary order for a higher wage increase, the same should be followed and not the MOA. This agreement was however not included in the MOA but was embodied in the minutes of the meeting when the MOA was done.

ISSUE: Whether or not the Secretary of Labor may issue an order superseding the said MOA.

HELD: Yes. The order was issued in resolution of the CBA dispute over which the Secretary assumed jurisdiction. The order is an arbitral award which can be considered an approximation of a collective bargaining agreement which would otherwise have been entered into by the parties, hence, it has the force and effect of a valid contract obligation.

The Supreme Court, however, clarified that the Secretary’s order should be complied not merely because it is higher than what the MOA provides. The order was based on evidentiary documents presented by both parties particularly on the financial outlook of Cirtek.

But was it proper for the Secretary to decide the case despite the submission of the MOA?

Yes, in the first place, CELU manifested that the MOA was entered into subject to a more favorable decision by the Secretary. Further, it bears noting that since the filing and submission of the MOA did not have the effect of divesting the Secretary of his jurisdiction, or of automatically disposing the controversy, then neither should the provisions of the MOA restrict the Secretary’s leeway in deciding the matters before him.

The agreement that the MOA provision may be superseded by a more favorable order by the Secretary was not contained in the MOA itself, does this bind Cirtek?

Yes.  In labor cases pending before the Commission or the Labor Arbiter [in this case, the Secretary of Labor], the rules of evidence prevailing in courts of law or equity are not controlling. Rules of procedure and evidence are not applied in a very rigid and technical sense in labor cases. Hence, the Labor Arbiter is not precluded from accepting and evaluating evidence other than, and even contrary to, what is stated in the CBA. Therefore, the agreement binds Cirtek and can be proven by mere presentation of the minutes. In short, the parol evidence rule is not applicable to labor cases.


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