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PHILIPPINE APPLIANCE CORPORATION v. CA

FACTS:

Petitioner Philippine Appliance Corporation (PAC) is a domestic corporation engaged in the manufacturing of refrigerators, freezers, and washing machines. Respondent United Philacor Workers Union-NAFLU (UPWU-NAFLU) is the collective bargaining representative of PAC's rank-and-file employees. During the negotiations for the collective bargaining agreement (CBA) covering the period of July 1, 1997 to August 31, 1999, PAC offered an "early conclusion bonus" of P4,000 to each employee. This bonus was intended to speed up the negotiations and encourage UPWU-NAFLU to reach an agreement. After the negotiations, PAC granted the early signing bonus.

However, when the CBA expired, UPWU-NAFLU notified PAC of its desire to negotiate a new CBA. The negotiations commenced but ended in a deadlock, leading UPWU-NAFLU to file a Notice of Strike with the National Conciliation and Mediation Board (NCMB) due to the bargaining deadlock. Despite a series of conciliation meetings, the parties failed to reach an agreement on the remaining unresolved items, namely wages, rice subsidy, signing, and retroactive bonus. As a result, UPWU-NAFLU went on strike, which lasted for eleven days, causing losses to PAC. The Department of Labor and Employment (DOLE) intervened, ordered the striking workers to return to work, and directed PAC to accept them back.

DOLE Secretary Bienvenido Laguesma assumed jurisdiction over the dispute and issued an order on April 14, 2000, which fixed wage increases, maintained the rice subsidy and retroactive pay base at their existing levels, and ruled in favor of PAC's proposal on the signing bonus. PAC filed a Partial Motion for Reconsideration, contesting the award of the signing bonus. However, the motion was denied by Secretary Laguesma. PAC then filed a Petition for Certiorari with the Court of Appeals, which was dismissed.

ISSUES:

  1. Whether the award of the signing bonus by the Labor Secretary is invalid as it was not part of the employees' salaries or benefits or of the collective bargaining agreement.

  2. Whether the purpose for the signing bonus was not served due to the failure to conclude a CBA.

RULING:

  1. The award of the signing bonus by the Labor Secretary is valid. The Secretary ruled that while the bargaining negotiations might have failed and the signing of the agreement was delayed, this cannot be attributed solely to respondent union. Moreover, the signing bonus was granted in the previous CBA and petitioner offered it as an incentive to expedite the CBA negotiations. As such, it is enforceable.

  2. The purpose for the signing bonus was served as it was granted to encourage the parties to conclude a CBA. The fact that no CBA was eventually concluded does not negate the validity of the signing bonus.

PRINCIPLES:

  • The award of incentives, such as a signing bonus, in collective bargaining negotiations may be enforced if it was offered by the employer and was not subsequently withdrawn.

  • The purpose of a signing bonus is to encourage parties to expedite the conclusion of a collective bargaining agreement. Its validity is not dependent on the actual conclusion of the agreement.