FACTS:

The case involves two petitions for certiorari filed by Dela Salle University and Dela Salle University Employees Association - National Federation of Teachers and Employees Union (DLSUEA-NAFTEU) against the decision of voluntary arbitrator Buenaventura Magsalin. The petitions were consolidated since they have interrelated factual antecedents, parties involved, and issues raised. The parties entered into a collective bargaining agreement that lasted from December 23, 1986 to December 22, 1989. After unsuccessful negotiations for a new agreement, the Union filed a Notice of Strike. Five out of eleven issues raised in the notice were resolved, and a partial collective bargaining agreement was executed. The remaining six issues were submitted for arbitration, including the scope of the bargaining unit, union security clause, security of tenure, salary increases, indefinite union leave, and duration of the agreement. The voluntary arbitrator rendered a decision on January 19, 1993, where he ruled on various issues. He included computer operators in the bargaining unit, considered discipline officers as rank-and-file employees, excluded College of St. Benilde employees from the bargaining unit, upheld the inclusion of a union shop clause, recognized management's right to determine layoffs and transfers, denied salary increases due to the University's financial condition, and rejected the Union's demands for reduced workload, special leave benefits, and indefinite union leave with pay.

In this case, the University of St. La Salle and the Faculty Association had a collective bargaining agreement (CBA) covering the period from June 1, 1990, to May 31, 1993. Disagreements arose between the University and the Faculty Association regarding the inclusion of employees from the College of St. Benilde in the bargaining unit and the grant of special leave benefits to faculty members. A voluntary arbitrator was appointed to resolve the issues.

The voluntary arbitrator ruled that the employees from the College of St. Benilde should be included in the bargaining unit of the rank-and-file employees. The arbitrator also found that the University and the Faculty Association were not similarly situated in terms of professional growth and denied the demand for special leave benefits. Additionally, the arbitrator ruled that the duration of the CBA was binding on the parties and that the economic provisions would be reopened after the third year in compliance with the Labor Code.

Both parties filed motions for reconsideration, but these were not entertained by the arbitrator. The University filed a petition for certiorari with the Second Division of the Court, while the Faculty Association filed a separate petition with the First Division. The petitions were consolidated and transferred to the Second Division. The Solicitor General, on behalf of the arbitrator, filed a Comment agreeing with the arbitrator's decision on all points except the inclusion of College of St. Benilde employees in the bargaining unit. The Solicitor General argued that there was sufficient evidence to support considering the College of St. Benilde as an integral part of the University. Various documents and provisions were cited to support this argument.

This case involves a dispute between De La Salle University (DLSU) and the Federation of Free Workers (FFW), a labor union representing the rank-and-file employees of DLSU. The parties are contesting the scope of the bargaining unit and the terms of their collective bargaining agreement (CBA).

DLSU argues that the voluntary arbitrator committed grave abuse of discretion when he included the computer operators assigned at the university's computer services center and the university's discipline officers within the bargaining unit, while excluding the College of Saint Benilde (CSB) employees. DLSU also disputes the inclusion of a union shop clause in the CBA, the denial of the "last-in-first-out" method of lay-off in cases of retrenchment, the ruling on wage increases, and the union's proposals on the deloading of the union president, improved leave benefits, and indefinite union leave with pay.

On the other hand, FFW claims that the voluntary arbitrator committed grave abuse of discretion by failing to pierce the veil of corporate fiction of CSB-DLSU and including its employees within the bargaining unit of DLSU's rank-and-file employees. FFW also argues against the denial of the "last-in-first-out" method of lay-off, the decision on the multisectoral committee as the legitimate group determining salary increases and fringe benefits, the reliance solely on the 70% share in the incremental tuition proceeds for salary increases and fringe benefits, and the failure to consider the financial statements of DLSU.

ISSUES:

1. Whether the voluntary arbitrator committed grave abuse of discretion in failing/refusing to pierce the veil of corporate fiction of the College of St. Benilde-DLSU and finding that the employees thereat are outside of the bargaining unit of DLSU's rank-and-file employees.

2. Whether the voluntary arbitrator committed grave abuse of discretion in denying the petitioner's proposal for the "last-in-first-out" method of lay-off in case of retrenchment and upholding the alleged management prerogative to select and choose its employees.

3. Whether the voluntary arbitrator committed grave abuse of discretion in finding that the multi-sectoral committee in the university is the legitimate group that determines and scrutinizes annual salary increases and fringe benefits of the employees.

4. Whether the voluntary arbitrator committed grave abuse of discretion in holding that the 70% share in the incremental tuition proceeds is the only source of salary increases and fringe benefits of the employees.

5. Whether the voluntary arbitrator committed grave abuse of discretion in failing/refusing/disregarding to consider the respondent university's financial statements factually to determine its capability to grant proposed salary increases above the 70% share in the incremental tuition proceeds.

6. Whether the voluntary arbitrator committed grave abuse of discretion in failing to equate the position and responsibilities of the union president with those of the president of the faculty association.

7. Whether the voluntary arbitrator committed grave abuse of discretion in failing to appreciate the equal rights of the members of the union and the faculty for professional advancement as well as the desirable effects of the institutionalization of special leave and workload reduction benefits.

8. Whether the computer operators and discipline officers are classified as confidential employees and excluded from the bargaining unit.

9. Whether the College of St. Benilde should be considered as part of Dela Salle University for the purpose of determining the bargaining unit.

10. Whether the demand of the University for a union shop clause in the collective bargaining agreement is valid and in accordance with democratic principles and the right to security of tenure.

11. Whether the University has the management prerogative to select employees in case of lay-off, termination due to retrenchment, and transfer of employees.

12. Whether the voluntary arbitrator committed grave abuse of discretion in ruling that the University is not required to grant a second round of wage increases based on the proposed budget.

13. Whether the Union's proposals on the deloading of the union president, improved leave benefits, and indefinite union leave with pay should be granted.

14. Whether the demands for payment of separation pay, meal allowance, and hazard pay by the union are valid.

15. Whether the union is entitled to union leave with pay.

16. Whether there is justifiable reason for the granting of the union's demands.

17. Whether the union is entitled to wage increases and fringe benefits based on duly audited financial statements.

18. Whether the multi-sectoral committee is the legitimate group that determines salary increases and fringe benefits.

19. Whether the committee's determination should be based on duly audited financial statements.

20. Whether the 70% share in incremental tuition proceeds is the only source of salary increases and fringe benefits.

RULING:

1. The Court did not resolve the issues in this partial digest section. However, it is stated that the factual findings of quasi-judicial agencies, when supported by substantial evidence, are binding and entitled to great respect. The Court also emphasized that certiorari is an extraordinary remedy used only in truly exceptional cases involving errors of jurisdiction or grave abuse of discretion.

2. The computer operators and discipline officers are not classified as confidential employees and should be included in the bargaining unit of rank-and-file employees.

3. The College of St. Benilde should be excluded from the bargaining unit of Dela Salle University because they have their own separate juridical personality and there is no sufficient evidence to justify the piercing of the corporate fiction.

4. The demand of the Union for a union shop clause is valid and in accordance with Article 248(e) of the Labor Code. The University's argument against the union shop clause based on the right of individuals to join or not to join an association, as well as their right to security of tenure, is misplaced.

5. The University has the management prerogative to select employees in cases of lay-off, termination due to retrenchment, and transfer of employees. The Union's reliance on social justice and equity is insufficient to limit the University's prerogative.

6. The voluntary arbitrator committed grave abuse of discretion in ruling that the University is not required to grant a second round of wage increases based on the proposed budget. The financial capability of a company should be based on audited financial statements, not on a proposed budget.

7. The Union's proposals on the deloading of the union president, improved leave benefits, and indefinite union leave with pay should be rejected.

8. The demands for payment of separation pay, meal allowance, and hazard pay are rejected.

9. The union is not entitled to union leave with pay.

10. There is no justifiable reason for granting the union's demands.

11. The union is entitled to wage increases and fringe benefits based on duly audited financial statements.

12. The multi-sectoral committee is the legitimate group that determines salary increases and fringe benefits.

13. The committee's determination should be based on duly audited financial statements.

14. The determination of the alleged 70% share in incremental tuition proceeds is unnecessary and irrelevant.

PRINCIPLES:

• Factual findings of quasi-judicial agencies are binding when supported by substantial evidence.

• Substantial evidence in labor cases refers to relevant evidence that a reasonable mind will accept as adequate to justify a conclusion.

• A petition for certiorari under Rule 65 of the Revised Rules of Court is an extraordinary remedy used only in cases involving errors of jurisdiction or grave abuse of discretion.

• During the freedom period, parties may propose modifications or amendments to the existing collective bargaining agreement.

• The exclusion of employees from the bargaining unit does not bar future negotiation for their inclusion.

• The determination of confidential employees is based on the nature of their duties.

• Separate juridical personalities should be respected unless there is sufficient evidence to justify the piercing of the corporate fiction.

• The right to join a union includes the right to abstain from joining any union.

• The legal protection granted to the right to refrain from joining a union is withdrawn by operation of law when there is a closed shop agreement.

• An employer has the management prerogative to regulate various aspects of employment, including selection of employees.

• Financial statements audited by independent external auditors are the standard proof of a company's financial standing.

• The financial condition of a company cannot be based solely on a proposed budget.

• Justifiable reason must exist for granting demands for payment of benefits.

• Wage increases and fringe benefits should be based on duly audited financial statements.

• The determination of wage increases and fringe benefits should be done by the legitimate group assigned to such task.

• Any determination of a share in incremental tuition proceeds must be based on evidence and is not relevant in determining salary increases and fringe benefits.