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DAVAO INTEGRATED PORT STEVEDORING SERVICES v. RUBEN V. ABARQUEZ

FACTS:

The petitioner in this case, Davao Integrated Port Services Corporation, filed a petition for certiorari to reverse the Award issued by Voluntary Arbitrator Ruben V. Abarquez. The Award required the 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 present regular extra pool. The petitioner argues that only regular workers whose work is not intermittent should be entitled to the benefit of converting the unenjoyed portion of sick leave to cash.

It is revealed that the petitioner and the union entered into a Collective Bargaining Agreement (CBA) which provided for sick leave with pay benefits to employees who have rendered at least one year of service with the company. The provisions for sick leave were expanded to include the present regular extra labor pool. However, the petitioner discontinued the commutation of the unenjoyed portion of the sick leave with pay benefits for intermittent workers. The union objected to this discontinuance and brought the matter for voluntary arbitration.

The Voluntary Arbitrator ruled in favor of the union, directing the petitioner to grant and extend the sick leave privilege of commutation to the intermittent field workers. Unsatisfied with the ruling, the petitioner filed the present petition seeking the reversal of the arbitrator's decision.

ISSUES:

  1. Whether the regular intermittent workers are entitled to the privilege of commutation or conversion to cash of the unenjoyed portion of their sick leave with pay benefits.

  2. Whether the last sentence of Section 1, Article VIII of the 1989 CBA bars the regular intermittent workers from availing the privilege of commutation or conversion to cash of the unenjoyed portion of their sick leave with pay benefits.

  3. Whether there is a reasonable and practical distinction between the sick leave with pay benefits of regular employees and intermittent workers.

  4. Whether the commutation of the unenjoyed portion of the sick leave with pay benefits of intermittent workers is allowed.

RULING:

  1. The regular intermittent workers are entitled to the privilege of commutation or conversion to cash of the unenjoyed portion of their sick leave with pay benefits. The last sentence of Section 1, Article VIII of the 1989 CBA does not bar the regular intermittent workers from availing this privilege.

  2. Yes, there is a reasonable and practical distinction between the sick leave with pay benefits of regular employees and intermittent workers. It is fair and reasonable for the company not to stipulate a fixed 15-day sick leave with pay for its regular intermittent workers due to the irregularity of their work-days. The interpretation that distinguishes between the two classes of workers is in accordance with the intention of the parties and is consistent with the provisions of the Collective Bargaining Agreement (CBA).

  3. Yes, the commutation of the unenjoyed portion of the sick leave with pay benefits of intermittent workers is allowed. The Voluntary Arbitrator has the authority to decide unresolved grievances arising from the interpretation or implementation of the CBA. The company's past practice of granting and paying the cash equivalent of the unenjoyed sick leave benefits of intermittent workers has ripened into a company policy that cannot be withdrawn unilaterally.

PRINCIPLES:

  • A collective bargaining agreement (CBA) is not an ordinary contract and is instead a labor contract impressed with public interest. It must be construed liberally and practically to serve its intended purpose.

  • The terms and conditions of a CBA constitute the law between the parties.

  • Sick leave with pay benefits are intended to be replacements for regular income and are non-contributory in nature.

  • Sick leave benefits, like other economic benefits stipulated in the CBA, are intended to alleviate the economic condition of the workers.

  • The phrase "herein sick leave privilege" in the last sentence of Section 1, Article VIII of the CBA refers to the fixed 15-day sick leave with pay benefit, which only non-intermittent workers are entitled to.

  • Contractual provisions must be interpreted in a manner that allows them to have efficacy rather than fail ("Interpetatio fienda est ut res magis valeat quam pereat").

  • Distinctions between different classes of workers must be reasonable and practical, taking into account the specific circumstances of their work arrangements.

  • Existing benefits cannot be unilaterally withdrawn or diminished by the employer.

  • The Voluntary Arbitrator has the authority to determine and resolve grievances arising from the interpretation or implementation of the CBA.