SECOND DIVISION

[G.R. No. 135547 : January 23, 2002]

GERARDO . RIVERA, A!RED A. RA"ISO, A"#ROCIO $A!AD, DENNIS R. ARANAS, DAVID
SORI"A, JR., JORGE $. DE!A ROSA, an% ISAGANI A!DEA, petitioners, vs. &ON. EDGARDO
ES$IRI'( )n *)+ ,a-a,).y a+ C*a)r/an o0 .*1 $A! In.1r2A31n,y 'a+4 or,1 ,r1a.1% un%1r
A%/)n)+.ra.)51 Or%1r No. 167 &ON. #IENVENIDO !AG(ES"A )n *)+ ,a-a,).y a+ S1,r1.ary o0
!a8or an% E/-9oy/1n.7 $&I!I$$INE AIR!INES :$A!;, !(CIO 'AN, &ENR< SO (<, AN'ONIO
V. OCA"$O, "ANO!O E. A=(INO, JAI"E J. #A('IS'A, an% A!E>ANDER O.
#ARRIEN'OS, Respondents.
D E C I S I O N
=(IS("#ING, J.:
In this special civil action for certiorari and prohibition, petitioners charge public respondents with
grave abuse of discretion amounting to lack or excess of jurisdiction for acts taken in regard to the
enforcement of the agreement dated September 27, 199, between !hilippine "irlines #!"$% and its
union, the !"$ &mplo'ees "ssociation #!"$&"%(
)he factual antecedents of this case are as follows*
+n ,une -, 199, !"$ pilots affiliated with the "irline !ilots "ssociation of the !hilippines #"$!"!% went
on a three.week strike, causing serious losses to the financiall' beleaguered flag carrier( "s a result,
!"$s financial situation went from bad to worse( /aced with bankruptc', !"$ adopted a rehabilitation
plan and downsi0ed its labor force b' more than one.third(
+n ,ul' 22, 199, !"$&" went on strike to protest the retrenchment measures adopted b' the airline,
which affected 1,99 union members( )he strike ended four da's later, when !"$ and !"$&" agreed to
a more s'stematic reduction in !"$s work force and the pa'ment of separation benefits to all
retrenched emplo'ees(
+n "ugust 2, 199, then !resident ,oseph &( &strada issued "dministrative +rder 1o( 12 creating an
Inter."genc' )ask /orce #)ask /orce% to address the problems of the ailing flag carrier( )he )ask /orce
was composed of the 3epartments of /inance, $abor and &mplo'ment, /oreign "ffairs, )ransportation
and 4ommunication, and )ourism, together with the Securities and &xchange 4ommission #S&4%(
!ublic respondent &dgardo &spiritu, then the Secretar' of /inance, was designated chairman of the
)ask /orce( It was empowered to summon all parties concerned for conciliation, mediation #for% the
purpose of arriving at a total and complete solution of the problem(514onciliation meetings were then
held between !"$ management and the three unions representing the airlines emplo'ees,52 with the
)ask /orce as mediator(
+n September 6, 199, !"$ management submitted to the )ask /orce an offer b' private respondent
$ucio )an, 4hairman and 4hief &xecutive +fficer of !"$, of a plan to transfer shares of stock to its
emplo'ees( )he pertinent portion of said plan reads*
1( /rom the issued shares of stock within the group of 7r( $ucio )ans holdings, the ownership of
28,888 full' paid shares of stock of !hilippine "irlines with a par value of !9!-(88:share will be
transferred in favor of each emplo'ee of !hilippine "irlines in the active pa'roll as of September 1-,
199( Should an' share.owning emplo'ee leave !"$, he:she has the option to keep the shares or sells
#sic% his:her shares to his:her union or other emplo'ees currentl' emplo'ed b' !"$(
2( )he aggregate shares of stock transferred to !"$ emplo'ees will allow them three #;% members to
#sic% the !"$ <oard of 3irectors( =e, thus, become partners in the boardroom and together, we shall
address and find solutions to the wide range of problems besetting !"$(
;( In order for !"$ to attain #a% degree of normalc' while we are tackling its problems, we would
re>uest for a suspension of the 4ollective <argaining "greements #4<"s% for 18 'ears(5;
+n September 18, 199, the <oard of 3irectors of !"$&" voted to accept )ans offer and re>uested the
)ask /orces assistance in implementing the same( ?nion members, however, rejected )ans offer( ?nder
intense pressure from !"$&" members, the unions directors subse>uentl' resolved to reject )ans offer(
+n September 17, 199, !"$ informed the )ask /orce that it was shutting down its operations
effective September 2;, 199, preparator' to li>uidating its assets and pa'ing off its creditors( )he
airline claimed that given its labor problems, rehabilitation was no longer feasible, and hence, the
airline had no alternative but to close shop(
+n September 1, 199, !"$&" sought the intervention of the +ffice of the !resident in immediatel'
convening the parties, the !"$ management, !"$&", "$!"!, and /"S"!, including the S&4 under the
direction of the Inter."genc' )ask /orce, to prevent the imminent closure of !"$(56
+n September 19, 199, !"$&" informed the 3epartment of $abor and &mplo'ment #3+$&% that it
had no objection to a referendum on the )ans offer( 2,799 out of 2,7; !"$&" members cast their
votes in the referendum under 3+$& supervision held on September 21.22, 199( +f the votes cast,
1,8-- voted in favor of )ans offer while 1,;71 rejected it(
+n September 2;, 199, !"$ ceased its operations and sent notices of termination to its emplo'ees(
)wo da's later, the !"$&" board wrote !resident &strada anew, seeking his intervention( !"$&" offered
a 18.'ear moratorium on strikes and similar actions and a waiver of some of the economic benefits in
the existing 4<"(5- )an, however, rejected this counter.offer(
+n September 27, 199, the !"$&" board again wrote the !resident proposing the following terms
and conditions, subject to ratification b' the general membership*
1( &ach !"$ emplo'ee shall be granted 28,888 shares of stock with a par value of !-(88, from 7r(
$ucio )ans shareholdings, with three #;% seats in the !"$ <oard and an additional seat from
government shares as indicated b' 9is &xcellenc'@
2( $ikewise, !"$&" shall, as far as practicable, be granted ade>uate representation in committees or
bodies which deal with matters affecting terms and conditions of emplo'ment@
;( )o enhance and strengthen labor.management relations, the existing $abor.7anagement
4oordinating 4ouncil shall be reorgani0ed and revitali0ed, with ade>uate representation from both !"$
management and !"$&"@
6( )o assure investors and creditors of industrial peace, !"$&" agrees, subject to the ratification b'
the general membership, #to% the suspension of the !"$.!"$&" 4<" for a period of ten #18% 'ears,
provided the following safeguards are in place*
a( !"$ shall continue recogni0ing !"$&" as the dul' certified bargaining agent of the regular
rank.and.file ground emplo'ees of the 4ompan'@
b( )he union shop:maintenance of membership provision under the !"$.!"$&" 4<" shall be
respected(
c( 1o salar' deduction, with full medical benefits(
-( !"$ shall grant the benefits under the 22 ,ul' 199 7emorandum of "greement forged b' and
between !"$ and !"$&", to those emplo'ees who ma' opt to retire or be separated from the
compan'(
2( !"$&" members who have been retrenched but have not received separation benefits shall be
granted priorit' in the hiring:rehiring of emplo'ees(
7( In the absence of applicable 4ompan' rule or regulation, the provisions of the $abor 4ode shall
appl'(52
"mong the signatories to the letter were herein petitioners Aivera, Aamiso, and "ranas, as officers
and:or members of the !"$&" <oard of 3irectors( !"$ management accepted the !"$&" proposal and
the necessar' referendum was scheduled(
+n +ctober 2, 199, -,;26 !"$&" members cast their votes in a 3+$&.supervised referendum( +f the
votes cast, 21B were in favor of accepting the !"$.!"$&" agreement, while ;6B rejected it(
+n +ctober 7, 199, !"$ resumed domestic operations( +n the same date, seven officers and
members of !"$&" filed this instant petition to annul the September 27, 199 agreement entered into
between !"$ and !"$&" on the following grounds*
I
!?<$I4 A&S!+13&1)S CA"D&$E "<?S&3 )9&IA 3IS4A&)I+1 "13 &F4&&3&3 )9&IA
,?AIS3I4)I+1 I1 "4)ID&$E !?AS?I1C )9& 4+14$?SI+1 +/ )9& !"$.!"$&" "CA&&7&1) "S )9&
4+1S)I)?)I+1"$ AIC9)S )+ S&$/.+AC"1IG")I+1 "13 4+$$&4)ID& <"AC"I1I1C, <&I1C /+?13&3
+1 !?<$I4 !+$I4E, 7"E 1+) <& ="ID&3, 1+A )9& ="ID&A, A")I/I&3(
II
!?<$I4 A&S!+13&1)S CA"D&$E "<?S&3 )9&IA 3IS4A&)I+1 "13 &F4&&3&3 )9&IA
,?AIS3I4)I+1 I1 !A&SI3I1C +D&A )9& 4+14$?SI+1 +/ )9& !"$.!"$&" "CA&&7&1) ?13&A
)9A&") +/ "<?SID& &F&A4IS& +/ !"$S 7"1"C&7&1) !A&A+C")ID& )+ 4$+S& <?SI1&SS ?S&3 "S
S?<)&A/?C& /+A ?1I+1.<?S)I1C(
)he issues now for our resolution are*
#1% Is an original action for certiorari and prohibition the proper remed' to annul the !"$.!"$&"
agreement of September 27, 199@
#2% Is the !"$.!"$&" agreement of September 27, 199, stipulating the suspension of the !"$.!"$&"
4<" unconstitutional and contrar' to public polic'H
"nent the first issue, petitioners aver that public respondents as functionaries of the )ask /orce,
gravel' abused their discretion and exceeded their jurisdiction when the' activel' pursued and
presided over the !"$.!"$&" agreement(
Aespondents, in turn, argue that the public respondents merel' served as conciliators or mediators,
consistent with the mandate of "(+( 1o( 12 and merel' supervised the conduct of the +ctober ;,
199 referendum during which the !"$&" members ratified the agreement( )hus, public respondents
did not perform an' judicial and >uasi.judicial act pertaining to jurisdiction( /urthermore, respondents
pra' for the dismissal of the petition for violating the hierarch' of courts doctrine enunciated in People
v. Cuaresma57and Enrile v. Salazar(5
!etitioners allege grave abuse of discretion under Aule 2- of the 1997 Aules of 4ivil !rocedure( )he
essential re>uisites for a petition forcertiorari under Aule 2- are* #1% the writ is directed against a
tribunal, a board, or an officer exercising judicial or >uasi.judicial functions@ #2% such tribunal, board,
or officer has acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to
lack or excess of jurisdiction@ and #;% there is no appeal or an' plain, speed', and ade>uate remed' in
the ordinar' course of law(59 /or writs of prohibition, the re>uisites are* #1% the impugned act must be
that of a tribunal, corporation, board, officer, or person, whether exercising judicial, >uasi.judicial or
ministerial functions@ and #2% there is no plain, speed', and ade>uate remed' in the ordinar' course of
law(

518
)he assailed agreement is clearl' not the act of a tribunal, board, officer, or person exercising judicial,
>uasi.judicial, or ministerial functions( It is not the act of public respondents /inance Secretar'
&dgardo &spiritu and $abor Secretar' <ienvenido $aguesma as functionaries of the )ask /orce( 1either
is there a judgment, order, or resolution of either public respondents involved( Instead, what exists is
a contract between a private firm and one of its labor unions, albeit entered into with the assistance of
the )ask /orce( )he first and second re>uisites for certiorari and prohibition are therefore not present
in this case(
/urthermore, there is available to petitioners a plain, speed', and ade>uate remed' in the ordinar'
course of law( =hile the petition is denominated as one for certiorari and prohibition, its object is
actuall' the nullification of the !"$.!"$&" agreement( "s such, petitioners proper remed' is an
ordinar' civil action for annulment of contract, an action which properl' falls under the jurisdiction of
the regional trial courts(511 1either certiorari nor prohibition is the remed' in the present case(
!etitioners further assert that public respondents were partial towards !"$ management( )he'
allegedl' pressured the !"$&" leaders into accepting the agreement( !etitioners ask this 4ourt to
examine the circumstances that led to the signing of said agreement( )his would involve review of the
facts and factual issues raised in a special civil action for certiorari which is not the function of this
4ourt(512
1evertheless, considering the pra'er of the parties principall' we shall look into the substance of the
petition, in the higher interest of justice51; and in view of the public interest involved, inasmuch as
what is at stake here is industrial peace in the nations premier airline and flag carrier, a national
concern(
+n the second issue, petitioners contend that the controverted !"$.!"$&" agreement is void because
it abrogated the right of workers to self.organi0ation516 and their right to collective bargaining(
51- !etitioners claim that the agreement was not meant merel' to suspend the existing !"$.!"$&"
4<", which expires on September ;8, 2888, but also to foreclose an' renegotiation or an' possibilit'
to forge a new 4<" for a decade or up to 288( It violates the protection to labor polic'512 laid down
b' the 4onstitution(
"rticle 2-;." of the $abor 4ode reads*
"A)( 2-;."( Terms of a Collective Bargaining Agreement( "n' 4ollective <argaining "greement
that the parties ma' enter into shall, insofar as the representation aspect is concerned, be for a term
of five #-% 'ears( 1o petition >uestioning the majorit' status of the incumbent bargaining agent shall
be entertained and no certification election shall be conducted b' the 3epartment of $abor and
&mplo'ment outside of the sixt'.da' period immediatel' before the date of expir' of such five.'ear
term of the 4ollective <argaining "greement( "ll other provisions of the 4ollective <argaining
"greement shall be renegotiated not later than three #;% 'ears after its execution( "n' agreement on
such other provisions of the 4ollective <argaining "greement entered into within six #2% months from
the date of expir' of the term of such other provisions as fixed in such 4ollective <argaining
"greement, shall retroact to the da' immediatel' following such date( If an' such agreement is
entered into be'ond six months, the parties shall agree on the duration of the retroactivit' thereof( In
case of a deadlock in the renegotiation of the collective bargaining agreement, the parties ma'
exercise their rights under this 4ode(
?nder this provision, insofar as representation is concerned, a 4<" has a term of five 'ears, while the
other provisions, except for representation, ma' be negotiated not later than three 'ears after the
execution(517 !etitioners submit that a 18.'ear 4<" suspension is inordinatel' long, wa' be'ond the
maximum statutor' life of a 4<", provided for in "rticle 2-;."( <' agreeing to a 18.'ear suspension,
!"$&", in effect, abdicated the workers constitutional right to bargain for another 4<" at the
mandated time(
=e find the argument devoid of merit(
" 4<" is a contract executed upon re>uest of either the emplo'er or the exclusive bargaining
representative incorporating the agreement reached after negotiations with respect to wages, hours of
work and all other terms and conditions of emplo'ment, including proposals for adjusting an'
grievances or >uestions arising under such agreement(51 )he primar' purpose of a 4<" is the
stabili0ation of labor.management relations in order to create a climate of a sound and stable
industrial peace(519 In construing a 4<", the courts must be practical and realistic and give due
consideration to the context in which it is negotiated and the purpose which it is intended to serve(528
)he assailed !"$.!"$&" agreement was the result of voluntar' collective bargaining negotiations
undertaken in the light of the severe financial situation faced b' the emplo'er, with the peculiar and
uni>ue intention of not merel' promoting industrial peace at !"$, but preventing the latters closure(
=e find no conflict between said agreement and "rticle 2-;." of the $abor 4ode( "rticle 2-;." has a
two.fold purpose( +ne is to promote industrial stabilit' and predictabilit'( Inasmuch as the agreement
sought to promote industrial peace at !"$ during its rehabilitation, said agreement satisfies the first
purpose of "rticle 2-;."( )he other is to assign specific timetables wherein negotiations become a
matter of right and re>uirement( 1othing in "rticle 2-;.", prohibits the parties from waiving or
suspending the mandator' timetables and agreeing on the remedies to enforce the same(
In the instant case, it was !"$&", as the exclusive bargaining agent of !"$s ground emplo'ees, that
voluntaril' entered into the 4<" with !"$( It was also !"$&" that voluntaril' opted for the 18.'ear
suspension of the 4<"( &ither case was the unions exercise of its right to collective bargaining( )he
right to free collective bargaining, after all, includes the right to suspend it(
)he acts of public respondents in sanctioning the 18.'ear suspension of the !"$.!"$&" 4<" did not
contravene the protection to labor polic' of the 4onstitution( )he agreement afforded full protection to
labor@ promoted the shared responsibilit' between workers and emplo'ers@ and the
exercised voluntary modes in settling disputes, including conciliation to foster industrial peace(I521
!etitioners further allege that the 18.'ear suspension of the 4<" under the !"$.!"$&" agreement
virtuall' installed !"$&" as a compan' union for said period, amounting to unfair labor practice, in
violation of "rticle 2-;." of the $abor 4ode mandating that an exclusive bargaining agent serves for
five 'ears onl'(
)he >uestioned proviso of the agreement reads*
a( !"$ shall continue recogni0ing !"$&" as the dul' certified.bargaining agent of the regular
rank.and.file ground emplo'ees of the 4ompan'@
Said proviso cannot be construed alone( In construing an instrument with several provisions, a
construction must be adopted as will give effect to all( ?nder "rticle 1;76 of the 4ivil 4ode,
522 contracts cannot be construed b' parts, but clauses must be interpreted in relation to one another
to give effect to the whole( )he legal effect of a contract is not determined alone b' an' particular
provision disconnected from all others, but from the whole read together(52;)he aforesaid provision
must be read within the context of the next clause, which provides*
b( )he union shop:maintenance of membership provision under the !"$.!"$&" 4<" shall be
respected(
)he aforesaid provisions, taken together, clearl' show the intent of the parties to maintain union
securit' during the period of the suspension of the 4<"( Its objective is to assure the continued
existence of !"$&" during the said period( =e are unable to declare the objective of union securit' an
unfair labor practice( It is State polic' to promote unionism to enable workers to negotiate with
management on an even pla'ing field and with more persuasiveness than if the' were to individuall'
and separatel' bargain with the emplo'er( /or this reason, the law has allowed stipulations for union
shop and closed shop as means of encouraging workers to join and support the union of their choice in
the protection of their rights and interests vis--vis the emplo'er(526
!etitioners contention that the agreement installs !"$&" as a virtual compan' union is also untenable(
?nder "rticle 26 #d% of the $abor 4ode, a compan' union exists when the emplo'er acts 5tJo initiate,
dominate, assist or otherwise interfere with the formation or administration of an' labor organi0ation,
including the giving of financial or other support to it or its organi0ers or supporters( )he case records
are bare of an' showing of such acts b' !"$(
=e also do not agree that the agreement violates the five.'ear representation limit mandated b'
"rticle 2-;."( ?nder said article, the representation limit for the exclusive bargaining agent applies
onl' when there is an extant 4<" in full force and effect( In the instant case, the parties agreed to
suspend the 4<" and put in abe'ance the limit on the representation period(
In sum, we are of the view that the !"$.!"$&" agreement dated September 27, 199, is a valid
exercise of the freedom to contract( ?nder the principle of inviolabilit' of contracts guaranteed b' the
4onstitution,52- the contract must be upheld(
?&EREORE, there being no grave abuse of discretion shown, the instant petition is 3IS7ISS&3. 1o
pronouncement as to costs(
SO ORDERED(
Bellosillo, (Chairman), Mendoza, Buena, and De Leon, Jr., JJ., concur.
Endnotes:
51 Rollo, p( 2( "dministrative +rder 1o( 12, Sec( 2(
52 "$!"!, !"$&", and the /light "ttendants and Stewards "ssociation of the !hilippines or /"S"!(
5; Supra, note 1 at 29(
56 d. at 9(
5- d. at 181(
52 d. at 2-.22(
57 C(A( 1o( 2777, 172 S4A" 61-, 626.62- #199%(
5 C(A( 1o( 9212;.26, 12 S4A" 217, 2;1 #1998%(
59 Sunta' v ( 4ojuangco.Sunta', C(A( 1o( 1;2-26, ;88 S4A" 728, 722 #199%@ 4uison v ( 4ourt of "ppeals, C(A( 1o(
12-68, 29 S4A" 1-9, 171 #199%(
518 1997 Aules of 4ivil !rocedure, Aule 2-, Sec( 2
511 <atas !ambansa <lg( 129, as amended b' Aep( "ct 1o( 7291, Sec( 19(
512 Stolt.1ielsen 7arine Services, Inc( v ( 1$A4, C(A( 1o( 12;9-, ;88 S4A" 71;, 717.71 #199%@ Suare0 v ( 1$A4, C(A(
1o( 12672;, 29; S4A" 692, -82 #199%(
51; Co v ( 4ourt of "ppeals, C(A( 1o( 129-6, 297 S4A" -76, -6 #199%@ /ortich v ( 4orona, C(A( 1o( 1;16-7, 29 S4A"
226, 26- #199%(
516 4onst( art( III, sec( (
51- 4onst( art( FIII, sec( ;(
512 4onst( art II, sec( 1@ art( FIII, sec( ;(
517 San 7iguel 4orporation &mplo'ees ?nion.!)C=+ v( 4onfesor, C(A( 1o( 111222, ;;8 !hil( 22, 2; #1992%(
51 3avao Integrated !ort Stevedoring Services v( "bar>ue0, C(A( 1o( 1821;2, 228 S4A" 197, 286 #199;%(
519 Kiok $o' v( 1$A4, C(A( 1o( $.-6;;6, 161 S4A" 179, 1- #192%(
528 3avao Integrated !ort Stevedoring Services v( "bar>ue0, supra, note 19 at 286(
521 197 4onst( art( FIII sec( ;( Stress supplied(
522 "rt( 1;76( )he various stipulations of a contract shall be interpreted together, attributing to the doubtful ones that
sense which ma' result from all of them taken jointl'(
52; Aeparations 4ommission v( 1orthern $ines Inc(, et al(, C(A( 1o( $.26;-, 16- !hil( 26, ;; #1978%(
526 $ibert' /lour 7ills &mplo'ees v( $ibert' /lour 7ills, Inc., C(A( 1os( -72.78, 18 S4A" 22, 279.28 #199%(
52- 4onst( art( III, sec( 18(