RFM Corporation – Flour Division and SFI Feeds Division vs Kasapian ng Mangga-gawang Pinagkaisa – RFM

April 18, 2014

578 SCRA 34 – Labor Law – Labor Relations – Collective Bargaining Agreement; Construction and Interpretation

In the year 2000, the Flour Division and the SFI Feeds Division of the RFM Corporation entered into a collective bargaining agreement (CBA) with the respective labor unions operating in each division; (KAMPI-NAFLU-KMU for the Flour Division and SUMAPI-NAFLU-KMU for the SFI Feeds Division).

Among the terms agreed upon in the CBA is that RFM Corporation shall agree to pay special holiday pay on December 31 of every year provided that the government shall declare December 31 as a special holiday.

The CBA became effective in July 2000.

December 31, 2000 was declared a special holiday by the government however, RFM Corporation refused to pay the agreed holiday pay as it averred that December 31, 2000 falls on a Sunday, which is a non-work day for RFM employees.

ISSUE: Whether or not RFM Corporation should pay holiday pay for December 31, 2000.

HELD: Yes. RFM must pay because it was clear in the CBA that it shall pay a special holiday pay for December 31 if it is declared a special holiday by the government, which the government did in this case. There was no qualification in the CBA. If the terms of a CBA are clear and have no doubt upon the intention of the contracting parties the literal meaning thereof shall prevail. If it was the intention of the parties to exclude non-working days, then they should have incorporated such terms in the CBA.


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