Republic of the Philippines

Court of Appeals
Cebu City

NINETEENTH DIVISION

LEYTE METROPOLITAN WATER CA-G.R. SP NO. 09016

DISTRICT (LMWD),
Members:
Petitioner,
DELOS SANTOS, J., Ch.,
CONTRERAS &
ROBENIOL, JJ.
- versus -

Promulgated:
PUBLIC SECTOR LABOR-
MANAGEMENT COUNCIL (PSLMC), NOVEMBER 24, 2017
Public Respondent,

LEYTE METROPOLITAN WATER

DISTRICT EMPLOYEES ASSOCIATION
(LMWDEA),
PRIVATE RESPONDENT.

___________________________________________

DECISION

CONTRERAS, J.:

This is a Petition1 for Certiorari under Rule 65 of the Rules of Court,

assailing the following issuances of public respondent Public Sector Labor-
Management Council (“PSLMC”) [also referred hereafter as Council], to
wit: 1) Resolution2 dated December 19, 2013 which, among others, declared
the 2006 Collective Negotiation Agreement (CNA) valid and effective; and

1 Rollo, pp. 3-17.

2 Rollo, pp. 21-29.
CA-G.R. SP No. 09016 Page 2 of 11
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2) Resolution3 dated November 10, 2014, which denied the motion for
reconsideration4 filed by Leyte Metropolitan Water District (“LMWD”) on
the earlier mentioned Resolution.

The Antecedents

On September 8, 2006, Leyte Metropolitan Water District Employees'

Association (“LMWDEA”), also referred in the assailed issuances as
LMWDEA-COURAGE, a duly registered and accredited employees
association, forged a CNA with then LMWD General Manager Nestor P.
Villasin (“Villasin”). LMWDEA's members ratified the CNA in 2006.
Thereafter, the CNA was submitted to the LMWD management for
implementation. However, it was not implemented due to Villasin's position
that the conclusion of the CNA had no authority from LMWD Board of
Directors (“the Board”), pursuant to Section 22,5 Chapter V of Presidential
Decree (PD) No. 198, otherwise known as the Local Water District Law.
Villasin also cited the absence of cost cutting measures, which he and
LMWDEA failed to conclude, as a factor in the non-implementation of the
CNA.

Aggrieved by the CNA's non-implementation, LMWDEA President

Owen P. Adona (“Adona”) wrote a letter to the Civil Service Commission-
Personnel Relations Office (CSC-PRO) on November 10, 2010. Adona
contended in his letter that the confirmation of the Board is not a
requirement for the implementation of the CNA under Executive Order (EO)
No. 1806 and the CNA is enforceable even without registration with the Civil
Service Commission (CSC), as the same is a perfected contract.

On May 19, 2011, the CSC-PRO wrote to inform Adona that the issue
would be submitted to the PSLMC in July 2011 for proper guidance and
ruling. A copy of the CSC-PRO's letter was furnished to Villasin. On June 6,
2011, Villasin requested CSC-PRO for a copy of Adona's query so he could
comment thereon. Villasin, however, never filed a comment.

On October 28, 2011, the issue was submitted to the members of the

3 Rollo, pp. 41-44.

4 Rollo, pp. 30-35.
5 SECTION 22. Contracts. — All contracts of the district shall be entered into by or pursuant to authority of the
board: Provided, however, That the board may by resolution delegate and redelegate to officers or agents of the
district, under such conditions and restrictions as shall be affixed by the board, the power to bind the district by
contract.
6 Providing Guidelines for the Exercise of the Right to Organize of Government Employees, Creating a Public Sector
Labor-Management Council and for Other Purposes.
CA-G.R. SP No. 09016 Page 3 of 11
Decision

PSLMC Technical Working Group (TWG) for discussion and

recommendation. The TWG suggested to the CSC-PRO to refer the issue to
the Grievance Committee of LMWD, pursuant to Section 2(a), Rule XIV of
the Amended Implementing Rules and Regulations of EO No. 180. The
recommendation was communicated to Villasin who issued Special Order
No. 02-02, s. 2012 creating LMWD's Grievance Committee.

On June 6, 2012, the Grievance Committee submitted its Decision

dated May 2, 2012 to the CSC-PRO. In the said Decision, the Grievance
Committee ruled that the ratified 2006 CNA is effective and binding on the
parties, and the same is implementable/enforceable.

In its Order dated June 25, 2012, the CSC-PRO directed Villasin to
comment on the Grievance Committee's Decision within 10 days from his
receipt thereof. Simultaneous with the filing of his comment with the CSC-
PRO,7 Villasin inquired from PSLMC through a letter dated July 6, 2012 on
the following issues:

-If the PSLMC will take cognizance of th[e] 2006 CNA issue
since it was never registered with the CSC-PRO?

-If it is appropriate to pursue the resolution of th[e] 2006 CNA

issue considering the three-year CNA prescription. xxx [The]
particular CNA has not been implemented, hence, will the
applicability provision for an extended term beyond three (3)
years apply?

-If th[e] 2006 CNA can be implemented because there was no

agreed-upon cost-saving measures/systems improvement
formulated to generate MOOE savings [in order] to source the
CNA Incentive therefrom [as per] observation made by the
Grievance Committee based on the document presented.8

In the same letter, Villasin also informed the PSLMC of the following:

“xxx the LMWDEA [Association] requested to sit down with

the management to propose for the new CNA, termed as the
'2010 CNA'. After a series and tedious discussions with the
Association, said 2010 CNA was finalized, however, the
LMWDEA insisted [on the] inclusion of two provisions,

7 Allegation in the petition says that the letter inquiry was submitted to the PSLMC simultaneous to the submission
of Villasin's Comment with the CSC-PRO, however, the statement of facts in the PSLMC Resolution says that the
letter inquiry was submitted before Villasin filed his Comment, see rollo, pp. 7 and 24.
8 See PSLMC's summary of Villasin's letter, p. 3 of PSLMC Decision, rollo, p. 24.
CA-G.R. SP No. 09016 Page 4 of 11
Decision

namely: the recognition of the unresolved 2006 CNA

provisions and the inclusion of the retirement benefits.
Management posited to the Association that the former
remained unresolved and the latter is considered a non-
negotiable item and being questioned by COA, and not only
that, there is a case now pending before the court, hence, will
not warrant agreement. With this circumstance, LMWD
management finds it too frustrating that another CNA deadlock
occurred.”9

Meanwhile, in the Comment containing his position on why the CNA

could not be implemented, Villasin asserted arguments similar to what he
previously inquired with the PSLMC, to wit: 1) no LMWD Board
Resolution was promulgated by the LMWD Board for him to implement the
2006 CNA; 2) there were no cost-cutting measures; and 3) the CNA was not
registered with the CSC.

Since the queries raised in Villasin's letter and the issues in the case
were closely intertwined, the PSLMC consolidated and collectively
addressed these in the first assailed Resolution dated December 19, 2013.
The PSLMC resolved the issues in favor of LMWDEA and the dispositive
portion of its Decision reads, viz.:

WHEREFORE, the Council RESOLVES that the 2006

Collective Negotiation Agreement (CNA) entered into by and
between Leyte Metropolitan Water District Employees
Association (LMWDEA) management on September 8, 2006 is
considered valid and effective, therefore, the rank-and-file
employees are entitled to CNA incentive for savings accumulated
in 2006.

General (GM) Management Nestor P. Villasin is enjoined

to cause the payment thereof. Accordingly, since there is a
deadlock on the proposed 2010 Collective Negotiation Agreement
(CNA). The provision on the automatic renewal clause found in
Section 2, Article XXI of the 2006 CNA of the LMWDEA-
COURAGE dated September 8, 2006 shall apply. Thus, the 2006
CNA will remain effective until a new CNA is forged by the
parties.10

LMWD, through Officer-in-Charge Assistant General Manager Pastor

9 Copied from PSLMC's summary of Villasin's letter, ibid.

10 Rollo, pp. 28-29.
CA-G.R. SP No. 09016 Page 5 of 11
Decision

A. Homeres sought reconsideration,11 but PSLMC denied the motion in the

Order dated November 10, 2014.12 Thus, LMWD filed the present petition
contending that respondent PSLMC 1) gravely abused its discretion
amounting to lack or excess of jurisdiction when it uph[e]ld the validity and
effectivity of the assailed 2006 CNA despite that the negotiation and
approval of the same was not sanctioned and authorized by LMWD Board of
Directors; 2) erroneously exercised jurisdiction over the controversy
resulting in apparent grave abuse of discretion amounting to lack or excess
of jurisdiction when it took cognizance of the case despite the non-
registration of the 2006 CNA with the CSC.

The Court's Ruling

The petition is without merit.

We shall address first the second ground pertaining to the PSLMC's

taking cognizance of the controversy despite the non-registration of the CNA
with the CSC.

The PSLMC ruled that the non-registration of the CNA with the CSC
did not preclude it from taking jurisdiction on the matter. According to the
PSLMC, the registration requirement is aimed at preventing any registered
employees' association from filing a petition assailing the majority support
of an existing negotiating agent. The noble objective of the “contract bar
rule” is to put stability on the forged CNA, save only on the last 60 days of
its lifetime. Moreso, the CNA of LMWDEA was already ratified on
September 8, 2006, and at that time, registration was not mandatory
considering that Resolution No. 2, s. 200713 requiring CNA registration was
promulgated only on July 19, 2007.

LMWD, however, differs with the PSLMC's declarations and

contends that aside from being contrary to its own rules and issuances,
PSLMC's ruling regarding its jurisdiction on the issue despite non-
registration of the CNA 1) violates the equal protection clause of the
Constitution; 2) constitutes an erroneous construction of a regulation
remedial in character; 3) validates economic provisions which are not
subject of any negotiation and in patent violation of the Salary
Standardization Law; and 4) runs counter to the rules on prescription.
11 Motion for Reconsideration, rollo, pp. 30-35.
12 Rollo, pp. 41-44.
13 CNA Registration and Effectivity (Amendments to Sections 1 and 4, Rule XIII and Section 4, Rule XII of the
Amended Rules and Regulations of Executive Order No. 180.)
CA-G.R. SP No. 09016 Page 6 of 11
Decision

LMWD stresses that registration of the CNA with the CSC is a

jurisdictional requisite. In fact, PSLMC issued two resolutions, PSLMC
Resolution No. 2, s. 2007 and PSLMC Resolution dated October 25, 2011,
reiterating the need for registration and making the same compulsory. The
latter resolution even dismisses complaints involving unregistered CNAs.
PSLMC also argues that there is no substantial distinction between CNAs
forged prior to, or after the issuance of PSLMC Resolution No. 2, s. 2007
which makes CNA Registration with the CSC a requirement for an
employees' association to invoke the PSLMC's jurisdiction. The requirement
of CNA registration before the PSLMC could assume jurisdiction under
Section 1, Rule 13 of EO No. 180, could not be ignored since the same is not
merely for purposes of applying the contract bar rule, but for purposes of
evaluating the legality of the provisions in the CNA. The non-registration
with the CSC paved way to the inclusion of non-negotiable provisions in the
questioned CNA like those not allowed under the Salary Standardization
Law and those that encroached upon the policies of the Civil Service
Commission. The CSC could have reviewed the legality of the provisions of
the CNA. LMWD also contends that when LMWDEA complained of the
non-implementation of the CNA, the latter's action had already prescribed.
LMWD contends that since EO No. 180 is silent as to the prescriptive period
regarding an action for the implementation and enforcement of a CNA, the
applicable law, by way of supplement, is Article 1146 of the Civil Code
which provides that actions upon an injury to plaintiff's rights must be
brought within four years. Since the CNA was concluded on September 8,
2006, LMWDEA's rights already prescribed when it raised the matter to the
CSC-PRO on November 10, 2010.

LMWD's contentions fail to persuade.

PSLMC was not precluded from taking cognizance of the non-

implementation of the CNA that was concluded between LMWDEA and
LMWD. There is nothing in PSLMC Resolution No. 2, s. 2007 decreeing
that PSLMC will not assume jurisdiction if the CNA is not registered with
the CSC. The resolution only lengthened the time frame for the registration
of the CNA from 30 to 90 days from its execution and obliged the parties to
submit any lacking requirement within 10 days from notice. It specified that
the ratification of the CNA shall not be beyond 90 calendar days after its
signing. Non-observance of the obligations will cause the denial of the
application for registration.

As for PSLMC Resolution dated October 25, 2011, it is true that the
same declared that CNA registration should be a condition precedent before
CA-G.R. SP No. 09016 Page 7 of 11
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the PSLMC would take cognizance of a complaint for unfair labor-

management practices (ULP). The Resolution authorized the dismissal of
ULP complaints under Sections 1(f) 14 or 2(d),15 Rule XVI16 of the Amended
Rules and Regulations Governing the Exercise of the Right of Government
Employees to Organize in case of unregistered CNA without prejudice to its
refiling after compliance. Noteworthy, however, LMWDEA brought the
controversy to CSC-PRO on November 10, 2010,17 before the issuance of
PSLMC Resolution dated October 25, 2011. Thus, PSLMC already acquired
jurisdiction over the the present controversy. The doctrine of adherence of
jurisdiction is well-recognized. Jurisdiction, once acquired by or attached to
a proper agency, continues until the termination of the case. It remains with
the court, or in this case, the proper administrative body, until the
proceedings are finally terminated, unless there is a statute that expressly
prohibits continuance of the exercise thereof.18 It is not affected by the
subsequent alteration of the facts or of the applicable law on the matter. 19
PSLMC could not, therefore, be faulted for proceeding to resolve the
controversy because the Resolution dated October 25, 2011 did not even
prohibit it from doing so. Besides, PSLMC was the appropriate body that
could resolve the issue and determine the case on its merits. The Council's
exercise of jurisdiction over the controversy was in keeping with the policy
against multiplicity of suits and unnecessary delay.

There is also no merit to LMWD's contention that the non-registration

of the CNA paved way to the inclusion of non-negotiable provisions in the
questioned CNA as CSC had no opportunity to review the legality of the
provisions therein. LMWD argues, viz.:

The economic provisions of the CNA were probably not

looked into by the Resolution and/or the Resolution did not clarify
what economic provisions are enforceable. There is a seeming
confusion whether the Resolution merely refers to the CNA
incentive for 2006 or whether it includes all the economic benefits
thereunder.20 [Emphasis supplied.]

14 Unfair Labor-Management Practices

SECTION 1. On the Part of the Agency. — The following shall constitute unfair labor-management practices on the
part of the agency:
xxx xxx xxx
(f) violating any of the provisions of the Collective Negotiation Agreement;
15 SECTION 2. On the Part of the Employees' Organization. — The following shall constitute unfair labor-
management practices on the part of the employees' organization:
(d) violating any of the provisions of the Collective Negotiation Agreement;
16 Unfair Labor-Management Practices.
17 See 1st Sentence of PSLMC Resolution dated December 19, 2013, rollo, p. 22.
18 See Bueno Industrial & Development Corporation v. Enage,G.R. No. L-31926. May 27, 1981
19 See Insurance Company of North America,v. United States Lines CO.,G.R. No. L-21021. May 27, 1966.
20 Rollo, p. 14.
CA-G.R. SP No. 09016 Page 8 of 11
Decision

The argument is obviously conjectural. LMWD's assumptions are

negated by the dispositive portion of PSLMC's Resolution dated December
19, 2013, viz.:

WHEREFORE, the Council RESOLVES that the 2006

Collective Negotiation Agreement (CNA) entered into by and
between Leyte Metropolitan Water District Employees
Association (LMWDEA) management on September 8, 2006 is
considered valid and effective, therefore, the rank-and-file
employees are entitled to CNA incentive for savings
accumulated in 2006.

General (GM) Management Nestor P. Villasin is enjoined

to cause the payment thereof. xxx.21 [Emphasis and underscoring
supplied.] .22

There is no need for a strained interpretation of what is decreed in the

assailed Resolution. As for the alleged inclusion of non-negotiable
provisions in the CNA, let it be pointed out that LMWD only raised this for
the first time in its motion for reconsideration. Yet, PSLMC still addressed
the same and declared that LMWD's general manager was estopped from
questioning the economic provisions because he actually participated in the
negotiation. We respect PSLMC's resolution of this matter, especially since
the said body, which includes the Chairman of the Civil Service
Commission, has the competence to look into the validity of the economic
provisions in the CNA. Administrative decisions on matters within the
body's jurisdiction are entitled to respect and can only be set aside on proof
of grave abuse of discretion, fraud, or error of law,23 which has not been
shown to exist in this case.

Anent LMWD's contention that LMWDEA's action already

prescribed, the same also must be rejected. As LMWD itself argued, EO No.
180 does not provide for a prescriptive period. Consequently, it is Article
1149, and not 1146 of the Civil Code that is applicable. The provision says
that “all other actions whose periods are not fixed in this Code or in any
other laws must be brought within five years from the time the right of
action accrues.” LMWDEA, therefore, had promptly raised the matter on the
non-implementation of the September 8, 2006 CNA to the CSC on
November 10, 2010.

21 Rollo, pp. 28-29.

22 Rollo, p. 14.
23 See Queensland-Tokyo Commodities, Inc. v. George, G.R. No. 172727. September 8, 2010.
CA-G.R. SP No. 09016 Page 9 of 11
Decision

Even if We go by LMWD's contention that the matter had to be

brought to the CSC within a 4-year period, LMWDEA's action was still
timely. The facts of this case show that when LMWD did not implement the
forged CNA, LMWDEA's president made several follow-ups on January 12,
2007, May 4, 2007, and January 17, 2010. Hence, the prescriptive period of
LMWDEA's cause of action should be reckoned, not from the ratification of
the CNA on September 8, 2006, but from its last follow-up in January 2010,
as it was only from such time that its cause of action accrued.

With the issue of PSLMC's jurisdiction positively resolved, We now

address the issue on whether the CNA was correctly upheld even if its
negotiation and approval were not sanctioned and authorized by LMWD
Board of Directors.

We cannot sustain LMWD's argument that the lack of authority from

the Board of Directors is a hindrance to the validity and effectivity of the
CNA. The PSLMC correctly ruled that the CNA was already a perfected
contract, and nothing therein requires the approval of the LMWD Board for
it to be implemented. The functions of the Board do not include the
affirmation of any contract like the duly ratified CNA before it can be
implemented. As PSLMC correctly pointed out, there is even evidence on
record, specifically, the letter dated November 27, 2008, in which the
Chairman of the Board informed Villasin that the Board's utmost concern
was to attain better working relationships between parties; hence, the
Chairman directed the creation of a Management Consultative Committee
for purposes of negotiation with LMWDEA.

The conclusion of the PSLMC that the CNA is valid even with the
lack of any formal authority from the Board is confirmed by PSLMC
Resolution No. 4, s 2016.24 The said issuance squarely addressed the
question presented by LMWD as it is about the Authority of Negotiating
Party to Approve the Collective Negotiation Agreement. Pertinent portions
of the said resolution is quoted hereunder, viz.:

xxx xxx xxx

WHEREAS, it has been observed by the Council that

numerous problems, such as delay and inaction are encountered by
the contracting parties when the respective BOARD OF
DIRECTORS/TRUSTEES of GOCCs with Original Charter,
including Local Water Districts xxx subjected the Collective

24 Promulgated on May 10, 2016.

CA-G.R. SP No. 09016 Page 10 of 11
Decision

Negotation Agreement (CNA) to their final approval;

xxx xxx xxx

WHEREFORE, the Council RESOLVES, as it is hereby

RESOLVED to implement the following guidelines in the approval
of the Collective Negotiation Agreement (CNA):

A. As a general rule, the parties to negotiate and approve the

CNA are: (1) the President/Local Chief Executive/General
Manager/Chief Operating Officer or any authorized
representative of GOCCs with Original Charters, including Local
Water Districts xxx; and (2) the President of the “Accredited
Employees Organization”- representing the rank -and-file
employees. The CNA shall only be elevated to the BOARD
OF DIRECTORS xxx for its confirmation on any of the
following:

1. If it is clearly stated in its respective charter that a

Collective Negotiation Agreement, and such other
agreements are subject to the confirmation of its
BOARD OF DIRECTORS xxx;

2. If the authority of the President/Local Chief

Executive/General Manager/Chief Operating Officer or
any authorized representative to negotiate specifically
reserves the power to confirm the Collective Negotiation
Agreement (CNA) to its BOARD OF DIRECTORS xxx;
or

3. If the Collective Negotiation Agreement (CNA)

includes benefits, rights and privileges not granted under
existing implementing rules and regulations of E.O 180,
but are within the authority of the agency under its
respective charter to grant the same.

However, additional benefits, rights and privileges

allowed under special laws/court jurisprudence and
doctrines, although not granted under E.O 180, shall not
require confirmation.

As earlier emphasized, LMWD's charter does not require that the

CNA be confirmed by the Board. With respect to the benefits granted, We
have already pointed out earlier that LMWD's manager actively took part of
the negotiation. Besides, PSLMC had the full opportunity to look into the
CA-G.R. SP No. 09016 Page 11 of 11
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benefits included in the CNA when it resolved this case and We find no
concrete justification to disregard the PSLMC's conclusion that these
benefits could be validly included.

WHEREFORE, finding no grave abuse of discretion tantamount to

lack of or excess of jurisdiction on the part of the Public Sector Labor-
Management Council in issuing its Resolutions dated December 19, 2013
and November 10, 2014, this Petition is DISMISSED for lack of merit.

SO ORDERED.

ORIGINAL SIGNED
EDWARD B. CONTRERAS
Associate Justice

WE CONCUR:

ORIGINAL SIGNED ORIGINAL SIGNED

EDGARDO L. DELOS SANTOS GABRIEL T. ROBENIOL
Associate Justice Associate Justice

CERTIFICATION

Pursuant to Article VIII, Section 13 of the Constitution, it is hereby

certified that the conclusions in the above decision were reached in
consultation before the case was assigned to the writer of the opinion of the
Court.

ORIGINAL SIGNED
EDGARDO L. DELOS SANTOS
Associate Justice
Chairperson, Nineteenth Division