The Supreme Court ruled that an employer cannot unilaterally alter the terms of a Collective Bargaining Agreement (CBA) during its lifetime. This decision protects faculty members from arbitrary changes to their ranking and pay scales. The ruling emphasizes the binding nature of CBAs and upholds the principle that labor laws should be interpreted in favor of employees, ensuring stability and fairness in the workplace.

Mapua’s Misstep: Can a CBA Be Changed Mid-Term?

The case revolves around a dispute between the Faculty Association of Mapua Institute of Technology (FAMIT) and the Mapua Institute of Technology (MIT) regarding changes implemented by MIT to the faculty ranking and compensation system, as well as the pay formula for high school faculty, during the term of their Collective Bargaining Agreement (CBA). In July 2000, MIT hired Arthur Andersen to develop a new faculty ranking and compensation system. This new system was presented to FAMIT during the CBA negotiations in January 2001. FAMIT agreed to the adoption and implementation of the instrument, but with the crucial reservation that there should be no reduction in rank or pay for faculty members.

The new CBA, effective June 1, 2001, incorporated the new ranking system. Section 8 of Article V stated that a new faculty ranking would be implemented, but with the explicit condition of ‘no diminution in the existing rank’ and the application of the policy ‘same rank, same pay.’ The faculty ranking sheet was attached to the CBA as Annex ‘B,’ and the college faculty rates sheet, including point ranges and pay rates per faculty level, was added as Annex ‘C.’ However, MIT soon proposed amendments to these annexes, claiming flaws and omissions. FAMIT rejected these proposals, asserting that they would violate the ratified CBA and result in a reduction of rank and benefits for college faculty.

Compounding the issue, MIT also instituted changes in the curriculum during the 2000-2001 school year, leading to a new formula for determining the pay rates of the high school faculty. This new formula was based on Rate/Load x Total Teaching Load = Salary. FAMIT opposed this formula, arguing that MIT had not been implementing the relevant provisions of the 2001 CBA, specifically Section 2 of Article VI, which stipulated a ‘rate per load’ for high school faculty. MIT maintained its right to change the pay formula. These disputes led FAMIT to bring the matter to the National Conciliation and Mediation Board, and eventually to the Panel of Voluntary Arbitrators for resolution.

The Panel of Voluntary Arbitrators ruled in favor of FAMIT, ordering MIT to implement the agreed-upon point range system with 19 faculty ranks and to comply with the ‘rate per load’ provisions for high school faculty. However, the Court of Appeals reversed this ruling, siding with MIT’s proposal to include the faculty point range sheet in Annex ‘B’ and to replace Annex ‘C’ with a document reflecting a 23-level faculty ranking instrument. This led FAMIT to appeal to the Supreme Court.

At the heart of the matter was whether MIT could unilaterally alter provisions of the CBA that it had negotiated, entered into, signed, and subsequently ratified. FAMIT argued that MIT’s new proposal on faculty ranking and evaluation for the college faculty was an unlawful modification of the existing CBA without the approval of all parties involved. MIT, on the other hand, contended that the new faculty ranking instrument was made in good faith and within its inherent prerogative to regulate all aspects of employment.

The Supreme Court emphasized the binding nature of CBAs and the principle of maintaining the status quo during its lifetime. Article 253 of the Labor Code is explicit on this point:

ART. 253. Duty to bargain collectively when there exists a collective bargaining agreement. – When there is a collective bargaining agreement, the duty to bargain collectively shall also mean that neither party shall terminate nor modify such agreement during its lifetime. However, either party can serve a written notice to terminate or modify the agreement at least sixty (60) days prior to its expiration date. It shall be the duty of both parties to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement during the 60-day period and/or until a new agreement is reached by the parties.

The Court found that the new point range system proposed by MIT was an unauthorized modification of Annex ‘C’ of the 2001 CBA. It created a faculty classification substantially different from the one originally incorporated in the agreement. The proposed system contravened the existing provisions of the CBA, making it a violation of the law between the parties. The Supreme Court highlighted that the CBA binds all parties during its lifetime, and its provisions constitute the ‘law between the parties.’ Those entitled to its benefits can invoke its provisions, and in case of non-fulfillment, the aggrieved party has the right to seek redress in court. The Court stressed that compliance with the CBA is mandated by the express policy of the law.

Regarding the high school faculty pay formula, FAMIT argued that MIT unilaterally modified the CBA formula, while MIT contended that it was entitled to consider the actual number of teaching hours to arrive at a fair and just salary. The Supreme Court sided with FAMIT, ruling that MIT could not adopt its unilateral interpretation of terms in the CBA. The Court noted that the CBA clearly stated that the salary of a high school faculty member is based on a ‘rate per load,’ not on a ‘rate per hour’ basis.

The Supreme Court underscored that in cases of doubt in the interpretation of any law or provision affecting labor, such should be interpreted in favor of labor, as mandated by Article 4 of the Labor Code:

ART. 4. Construction in favor of labor.-All doubts in the implementation and interpretation of the provisions of this Code, including its implementing rules and regulations, shall be resolved in favor of labor.

Ultimately, the Supreme Court reversed the Court of Appeals’ decision and reinstated the decision of the Office of the Voluntary Arbitrators. The Court declared MIT’s unilateral change in the ranking of college faculty from 19 levels to 23 levels, and the computation of high school faculty salary from rate per load to rate per hour basis, as null and void for being violative of the parties’ CBA and the applicable law.

FAQs

What was the key issue in this case?	The central issue was whether Mapua Institute of Technology (MIT) could unilaterally alter the terms of the Collective Bargaining Agreement (CBA) with its faculty association, particularly concerning faculty ranking and pay.
What did the Collective Bargaining Agreement (CBA) stipulate?	The CBA stipulated a new faculty ranking system with the condition that there would be no reduction in the existing rank or pay for faculty members, and a ‘rate per load’ basis for high school faculty salaries.
Why did Mapua Institute of Technology (MIT) want to change the faculty ranking and pay system?	MIT claimed that there were flaws and omissions in the original CBA annexes, and that the changes were necessary for a fairer and more accurate assessment of faculty performance and compensation.
What was the Faculty Association of Mapua Institute of Technology’s (FAMIT) position?	FAMIT argued that MIT’s proposed changes would violate the ratified CBA, result in a reduction of rank and benefits for college faculty, and unilaterally alter the agreed-upon pay formula for high school faculty.
What did the Panel of Voluntary Arbitrators initially rule?	The Panel of Voluntary Arbitrators ruled in favor of FAMIT, ordering MIT to implement the agreed-upon point range system with 19 faculty ranks and to comply with the ‘rate per load’ provisions for high school faculty.
How did the Court of Appeals rule on this case?	The Court of Appeals reversed the ruling of the Panel of Voluntary Arbitrators, siding with MIT’s proposal to include the faculty point range sheet and replace the annex reflecting the 19-level faculty ranking instrument.
What was the Supreme Court’s final decision?	The Supreme Court reversed the Court of Appeals’ decision and reinstated the decision of the Office of the Voluntary Arbitrators, declaring MIT’s unilateral changes as null and void.
What is the significance of Article 253 of the Labor Code?	Article 253 of the Labor Code states that neither party shall terminate nor modify a CBA during its lifetime, emphasizing the duty to maintain the status quo and continue in full force and effect the terms and conditions of the existing agreement.
How does Article 4 of the Labor Code apply to this case?	Article 4 of the Labor Code mandates that all doubts in the implementation and interpretation of the provisions of the Code shall be resolved in favor of labor, reinforcing the protection of workers’ rights.

This case serves as a significant reminder of the sanctity of collective bargaining agreements and the importance of upholding the rights of employees against unilateral changes that could diminish their benefits or alter their working conditions. The Supreme Court’s decision reinforces the principle that employers must honor the terms of a CBA and that any modifications must be mutually agreed upon by all parties involved.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Faculty Association of Mapua Institute of Technology (FAMIT) vs. Hon. Court of Appeals, and Mapua Institute of Technology, G.R. NO. 164060, June 15, 2007