CBTC Employees Union v. Clave

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CBTC Employees Union v. Clave
G.R. No. 49582
January 7, 1986

Article 5: Rules and Regulations

Facts:

Petitioner Commercial Bank and Trust Company Employees' Union (CBTC) lodged a complaint with the Department of Labor, against private respondent bank (Comtrust) for non-payment of the holiday pay benefits provided for under Article 95 (now Article 94) of the Labor Code. Failing to arrive at an amicable settlement at conciliation level, the parties opted to submit their dispute for voluntary arbitration.

On 22 April 1976, the Arbitrator handed down an award on the dispute in favor of petitioner union. The next day, 23 April 1976, the Department of Labor released Policy Instructions No. 9, a policy regarding the implementation of the ten (10) paid legal holidays.

Said bank interposed an appeal to the National Labor Relations Commission (NLRC), contending that the Arbitrator demonstrated gross incompetence and/or grave abuse of discretion when he failed to apply Policy Instructions No. 9. This appeal was dismissed on 16 August 1976.

Private respondent then appealed to the Secretary of Labor. On 30 June 1977, the Acting Secretary of Labor reversed the NLRC decision. On the principal issue of holiday pay, the Acting Secretary, guided by Policy Instructions No. 9, applied the same retrospectively, among other things.

Issue:

Whether or not the monthly pay of the covered employees already includes what Article 94 of the Labor Code requires as regular holiday pay benefit in the amount of his regular daily wage.

Ruling:

In excluding the union members the benefits of the holiday pay law, public respondent predicated his ruling on Section 2, Rule IV, Book III of the Rules to implement Article 94 of the Labor Code promulgated by the then Secretary of Labor and Policy Instructions No. 9.

In Insular Bank of Asia and America Employees' Union (IBAAEU) vs. Inciong, this Court's Second Division, speaking through former Justice Makasiar, expressed the view and declared that the section and interpretative bulletin are null and void, having been promulgated by the then Secretary of Labor in excess of his rule-making authority.

The questioned Section 2, Rule IV, Book III of the Integrated Rules and the Secretary's Policy Instruction No. 9 add another excluded group, namely, 'employees who are uniformly paid by the month'. While the additional exclusion is only in the form of a presumption that all monthly paid employees have already been paid holiday pay, it constitutes a taking away or a deprivation which must be in the law if it is to be valid. An administrative interpretation which diminishes the benefits of labor more than what the statute delimits or withholds is obviously ultra vires.

Ruled in favor of the petitioners. Presidential Executive Assistant and the Acting Secretary of labor are set aside, and the award of the Arbitrator reinstated.

Acknowledgement: Prince Fulgado