This Supreme Court case clarifies the extent of an employer’s authority in scheduling employee vacation leaves under a Collective Bargaining Agreement (CBA). The Court affirmed that employers generally have the right to schedule vacation leaves, provided they consider employee preferences. However, the Court also ruled that employers are responsible for the costs associated with mandatory in-service training for security guards, even if the CBA stipulates otherwise, as such training is mandated by law and public interest. This decision balances contractual agreements with statutory obligations, highlighting the importance of protecting employee rights and ensuring compliance with labor laws.

Whose Time is It? Resolving Disputes Over Vacation Schedules and Security Training Expenses

The case of PNCC Skyway Traffic Management and Security Division Workers Organization (PSTMSDWO) vs. PNCC Skyway Corporation arose from disagreements between the union and the management regarding vacation leave scheduling and the payment of in-service training for security guards. The union argued that its members should have the discretion to schedule their vacation leaves, while the company maintained that it had the right to schedule such leaves, considering employee preferences. Additionally, the union sought to compel the company to shoulder the expenses for the in-service training of its member security guards, which the company refused, citing a provision in the CBA stating that such expenses were the personal account of the employees. The Voluntary Arbitrator ruled in favor of the union, but the Court of Appeals reversed this decision, leading to the present appeal before the Supreme Court.

The Supreme Court addressed the issue of the union president’s authority to sign the verification and certification against forum shopping. The respondent argued that the union president lacked the authority at the time the petition was filed. However, the Court found that the subsequent Board Resolution ratified the president’s actions, thus curing any defects. The Court emphasized that the verification requirement ensures good faith in the allegations, and the certification of non-forum shopping prevents simultaneous remedies in different forums. Citing Cagayan Valley Drug Corporation v. Commissioner of Internal Revenue, the Court reiterated that certain corporate officers, including the President, can sign these documents without a board resolution.

In sum, we have held that the following officials or employees of the company can sign the verification and certification without need of a board resolution: (1) the Chairperson of the Board of Directors, (2) the President of a corporation, (3) the General Manager or Acting General Manager, (4) Personnel Officer, and (5) an Employment Specialist in a labor case.

Moving to the core issues, the Court examined the CBA provisions concerning vacation leaves. Article VIII, Section 1(b) of the CBA stated that the company shall schedule the vacation leave of employees during the year, taking into consideration the request of preference of the employees. The Court emphasized that when the language of a contract is clear and unambiguous, its meaning should be determined without reference to extrinsic facts or aids. The intention of the parties must be gathered from that language alone. The Court found that the CBA provision clearly gave the management the right to schedule vacation leaves, while considering employee preferences. It was clear that the preference requested by the employees is not controlling because respondent retains its power and prerogative to consider or to ignore said request.

Thus, if the terms of a CBA are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulation shall prevail.

The Court cited Faculty Association of Mapua Institute of Technology (FAMIT) v. Court of Appeals, highlighting that the CBA binds all parties during its lifetime, and its provisions constitute the law between them. The Court agreed with the Court of Appeals’ finding that granting the union members unilateral discretion to schedule their vacation leaves could cripple the company’s operations during peak seasons. Therefore, the company’s right to schedule vacation leaves ensures the continuous and efficient operation of the tollways.

Concerning the issue of in-service training expenses for security guards, the Court took a different stance. Although Article XXI, Section 6 of the CBA stipulated that all expenses for securing or renewing security guard licenses shall be for their personal account, the Court recognized exceptions to the rule that contracts should be respected. Specifically, Article 1306 of the Civil Code provides that contracting parties may establish stipulations, clauses, terms, and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy. The Court emphasized that labor contracts are not merely contractual; they are imbued with public interest and subject to the state’s police power. Therefore, CBA provisions that run contrary to law or public policy can be voided.

The Court considered the 1994 Revised Rules and Regulations Implementing Republic Act No. 5487, which places the primary responsibility on operators of company security forces to maintain and upgrade the standards of their personnel. Section 17 states that: It is the primary responsibility of all operators private security agency and company security forces to maintain and upgrade the standards of efficiency, discipline, performance and competence of their personnel. The Court noted that the law mandates pro-rating of expenses when training is centralized, implying that if there is no centralization, the company should shoulder the entire cost. The Court concluded that the intent of the law is to impose upon the employer the obligation to pay for the cost of its employees’ training.

Where the quality of training is better served by centralization, the CSFD Directors may activate a training staff from local talents to assist. The cost of training shall be pro-rated among the participating agencies/private companies.

The Court observed that prior to the CBA, the company had been providing the in-service training for the guards, which the respondent never controverted, thus is deemed to have admitted the same. This implicit acknowledgment further supported the company’s legal responsibility to shoulder the expenses for in-service training. Citing Article 1700 of the New Civil Code, the Court emphasized that relations between capital and labor are impressed with public interest, thus labor contracts must yield to the common good. Based on these considerations, the Supreme Court partially granted the petition, modifying the Court of Appeals’ decision. The company was directed to shoulder the cost of in-service training for its security guards and to reimburse them for expenses incurred. This case was remanded to the voluntary arbitrator for computation of the expenses.

FAQs

What was the key issue in this case?	The central issues were whether the employer had the sole discretion to schedule employee vacation leaves and whether the employer was liable for the in-service training expenses of its security guards. This involved interpreting the Collective Bargaining Agreement (CBA) and relevant labor laws.
Did the court uphold the employer’s right to schedule vacation leaves?	Yes, the court upheld the employer’s right to schedule vacation leaves, stating that while employee preferences should be considered, the ultimate decision rests with the employer. This was based on the clear and unambiguous language of the CBA.
Who is responsible for the expenses of security guard training?	The court ruled that the employer is responsible for the expenses of the in-service training of security guards, even if the CBA states otherwise. This is because the training is mandated by law and serves public interest.
What happens if a CBA provision contradicts labor laws?	If a CBA provision contradicts labor laws or public policy, the court can void that provision. The supremacy of the law over contracts is emphasized, particularly in labor contracts, which are imbued with public interest.
What is the purpose of a vacation leave?	The purpose of a vacation leave is to provide employees with a chance to rest and replenish their energy, not merely to provide them with additional salary. It’s intended as a non-monetary benefit for the employees.
Why was it important who scheduled vacation leave?	Granting management the right to schedule vacation leaves ensures that there are always enough personnel manning the tollways, which assures the public plying the same orderly and efficient toll way service. The safety, security and convenience of the public using the skyway system should be guaranteed.
Can a Union President represent the union in court?	Yes, the court deemed the Union President authorized to sign the documents since the passing of the Board Resolution authorizing him to represent the union is deemed a ratification of his prior execution, curing any defects thereof. Ratification in agency is the adoption or confirmation by one person of an act performed on his behalf by another without authority.
What is the meaning of shall in the context of CBA?	The word shall connotes an imperative command, there being nothing to show a different intention. The company should take into consideration the preferences of the employees in scheduling the vacations; but certainly, the concession never diminished the positive right of management to schedule the vacation leaves.

In conclusion, this case underscores the need to balance contractual agreements with statutory obligations in labor relations. While employers have a legitimate interest in scheduling vacation leaves to ensure operational efficiency, they also have a responsibility to comply with labor laws that protect employee rights and promote public interest. The Supreme Court’s decision provides valuable guidance on how to interpret CBAs in light of broader legal and policy considerations.

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: PNCC Skyway Traffic Management and Security Division Workers Organization (PSTMSDWO) vs. PNCC Skyway Corporation, G.R. No. 171231, February 17, 2010