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626 Phil. 700


[ G.R. No. 171231, February 17, 2010 ]




Before this Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court seeking to set aside the Decision[1] and the Resolution[2] of the Court of Appeals (CA) in CA-G.R. SP. No. 87069, which annulled and set aside the Decision and Order of the Voluntary Arbitrator dated July 12, 2004 and August 11, 2004, respectively.

The factual antecedents are as follows:

Petitioner PNCC Skyway Corporation Traffic Management and Security Division Workers' Organization (PSTMSDWO) is a labor union duly registered with the Department of Labor and Employment (DOLE). Respondent PNCC Skyway Corporation is a corporation duly organized and operating under and by virtue of the laws of the Philippines.

On November 15, 2002, petitioner and respondent entered into a Collective Bargaining Agreement (CBA) incorporating the terms and conditions of their agreement which included vacation leave and expenses for security license provisions.

The pertinent provisions of the CBA relative to vacation leave and sick leave are as follows:


Section 1. Vacation Leave.

[a] Regular Employees covered by the bargaining unit who have completed at least one [1] year of continuous service shall be entitled to vacation leave with pay depending on the length of service as follows:

1-9 years of service- 15 working days
10-15 years of service- 16 working days
16-20 years of service- 17 working days
21-25 years of service- 18 working days
26 and above years of service - 19 working days.

[b] The company shall schedule the vacation leave of employees during the year taking into consideration the request of preference of theemployees.(emphasis supplied)

[c] Any unused vacation leave shall be converted to cash and shall be paidto the employees on the first week of December each year."


Section 6. Security License - All covered employees must possess a valid License [Security Guard License] issued by the Chief, Philippine National Police or his duly authorized representative, to perform his duties as security guard. All expenses of security guard in securing/renewing their licenses shall be for their personal account. Guards, securing/renewing their license must apply for a leave of absence and/or a change of schedule. Any guard who fails to renew his security guard license should be placed on forced leave until such time that he can present a renewed security license.

In a Memorandum dated December 29, 2003,[3] respondent's Head of the Traffic Management and Security Department (TMSD) published the scheduled vacation leave of its TMSD personnel for the year 2004. Thereafter, the Head of the TMSD issued a Memorandum[4] dated January 9, 2004 to all TMSD personnel. In the said memorandum, it was provided that:


The 17 days (15 days SVL plus 2-day-off) scheduled vacation leave (SVL) with pay for the year 2004 had been published for everyone to take a vacation with pay which will be our opportunity to enjoy quality time with our families and perform our other activities requiring our personal attention and supervision. Swapping of SVL schedule is allowed on a one-on-one basis by submitting a written request at least 30 days before the actual schedule of SVL duly signed by the concerned parties. However, the undersigned may consider the re-scheduling of the SVL upon the written request of concerned TMSD personnel at least 30 days before the scheduled SVL. Re-scheduling will be evaluated taking into consideration the TMSDs operational requirement.

Petitioner objected to the implementation of the said memorandum. It insisted that the individual members of the union have the right to schedule their vacation leave. It opined that the unilateral scheduling of the employees' vacation leave was done to avoid the monetization of their vacation leave in December 2004. This was allegedly apparent in the memorandum issued by the Head HRD,[5] addressed to all department heads, which provides:

FOR : All Dept. Heads
SUBJECT : Leave Balances as of January 01, 2004

DATE: January 9, 2004

We are furnishing all the departments the leave balances of their respective staff as of January 01, 2004, so as to have them monitor and program the schedule of such leave.

Please consider the leave credit they earned each month [1-2-0], one day and two hours in anticipation of the later schedule. As we are targeting the zero conversion comes December 2004, it is suggested that the leave balances as of to date be given preferential scheduling.

x x x.

Petitioner also demanded that the expenses for the required in-service training of its member security guards, as a requirement for the renewal of their license, be shouldered by the respondent. However, the respondent did not accede to petitioner's demands and stood firm on its decision to schedule all the vacation leave of petitioner's members.

Due to the disagreement between the parties, petitioner elevated the matter to the DOLE-NCMB for preventive mediation. For failure to settle the issue amicably, the parties agreed to submit the issue before the voluntary arbitrator.

The voluntary arbitrator issued a Decision dated July 12, 2004, the dispositive portion of which reads:

WHEREFORE, premises all considered, declaring that:

a) The scheduling of all vacation leaves under Article VIII, Section 6, thereof, shall be under the discretion of the union members entitled thereto, and the management to convert them into cash all the leaves which the management compelled them to use.

b) To pay the expenses for the in-service-training of the company security guards, as a requirement for renewal of licenses, shall not be their personal account but that of the company.

All other claims are dismissed for lack of merit.


Respondent filed a motion for reconsideration, which the voluntary arbitrator denied in the Order[7] dated August 11, 2004.

Aggrieved, on October 22, 2004, respondent filed a Petition for Certiorari with Prayer for Temporary Restraining Order and/or Writ of Preliminary Injunction with the CA, and the CA rendered a Decision dated October 4, 2005,[8] annulling and setting aside the decision and order of the voluntary arbitrator. The CA ruled that since the provisions of the CBA were clear, the voluntary arbitrator has no authority to interpret the same beyond what was expressly written.

Petitioner filed a motion for reconsideration, which the CA denied through a Resolution dated January 23, 2006.[9] Hence, the instant petition assigning the following errors:







Before considering the merits of the petition, We shall first address the objection based on technicality raised by respondent.

Respondent alleged that the petition was fatally defective due to the lack of authority of its union president, Rene Soriano, to sign the certification and verification against forum shopping on petitioner's behalf. It alleged that the authority of Rene Soriano to represent the union was only conferred on June 30, 2006 by virtue of a board resolution,[10] while the Petition for Review had long been filed on February 27, 2006. Thus, Rene Soriano did not possess the required authority at the time the petition was filed on February 27, 2006.

The petitioner countered that the Board Resolution[11] dated June 30, 2006 merely reiterated the authority given to the union president to represent the union, which was conferred as early as October 2005. The resolution provides in part that:

WHEREAS, in a meeting duly called for October 2005, the Union decided to file a Motion for Reconsideration and if the said motion be denied, to file a petition before the Supreme Court. (Emphasis supplied)

Thus, the union president, representing the union, was clothed with authority to file the petition on February 27, 2006.

The purpose of requiring verification is to secure an assurance that the allegations in the petition have been made in good faith; or are true and correct, not merely speculative. This requirement is simply a condition affecting the form of pleadings, and non-compliance therewith does not necessarily render it fatally defective. Truly, verification is only a formal, not a jurisdictional, requirement.

With respect to the certification of non-forum shopping, it has been held that the certification requirement is rooted in the principle that a party-litigant shall not be allowed to pursue simultaneous remedies in different fora, as this practice is detrimental to an orderly judicial procedure. However, this Court has relaxed, under justifiable circumstances, the rule requiring the submission of such certification considering that, although it is obligatory, it is not jurisdictional. Not being jurisdictional, it can be relaxed under the rule of substantial compliance.[12]

In Cagayan Valley Drug Corporation v. Commissioner of Internal Revenue,[13] We said that:

In a slew of cases, however, we have recognized the authority of some corporate officers to sign the verification and certification against forum shopping. In Mactan-Cebu International Airport Authority v. CA, we recognized the authority of a general manager or acting general manager to sign the verification and certificate against forum shopping; in Pfizer v. Galan, we upheld the validity of a verification signed by an "employment specialist" who had not even presented any proof of her authority to represent the company; in Novelty Philippines, Inc., v. CA, we ruled that a personnel officer who signed the petition but did not attach the authority from the company is authorized to sign the verification and non-forum shopping certificate; and in Lepanto Consolidated Mining Company v. WMC Resources International Pty. Ltd. (Lepanto), we ruled that the Chairperson of the Board and President of the Company can sign the verification and certificate against non-forum shopping even without the submission of the board's authorization.

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.

While the above cases do not provide a complete listing of authorized signatories to the verification and certification required by the rules, the determination of the sufficiency of the authority was done on a case to case basis. The rationale applied in the foregoing cases is to justify the authority of corporate officers or representatives of the corporation to sign the verification or certificate against forum shopping, being "in a position to verify the truthfulness and correctness of the allegations in the petition."

In the case at bar, We rule that Rene Soriano has sufficient authority to sign the verification and certification against forum shopping for the following reasons: First, the resolution dated June 30, 2006 was merely a reiteration of the authority given to the Union President to file a case before this Court assailing the CBA violations committed by the management, which was previously conferred during a meeting held on October 5, 2005. Thus, it can be inferred that even prior to the filing of the petition before Us on February 27, 2006, the president of the union was duly authorized to represent the union and to file a case on its behalf. Second, being the president of the union, Rene Soriano is in a position to verify the truthfulness and correctness of the allegations in the petition. Third, assuming that Mr. Soriano has no authority to file the petition on February 27, 2006, the passing on June 30, 2006 of a Board Resolution authorizing him to represent the union is deemed a ratification of his prior execution, on February 27, 2006, of the verification and certificate of non-forum shopping, thus 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.[14]

We now go to the merits of the case.

Petitioner insisted that their union members have the preference in scheduling their vacation leave. On the other hand, respondent argued that Article VIII, Section 1 (b) gives the management the final say regarding the vacation leave schedule of its employees. Respondent may take into consideration the employees' preferred schedule, but the same is not controlling.

Petitioner also requested the respondent to provide and/or shoulder the expenses for the in-service training of their members as a requirement for the renewal of the security guards' license. Respondent did not accede to the union's request invoking the CBA provision which states that all expenses of security guards in securing /renewing their license shall be for their personal account. The petitioner further argued that any doubts or ambiguity in the interpretation of the CBA should be resolved in favor of the laborer.

As to the issue on vacation leaves, the same has no merit.

The rule is that where the language of a contract is plain 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, and from that language alone. Stated differently, where the language of a written contract is clear and unambiguous, the contract must be taken to mean that which, on its face, it purports to mean, unless some good reason can be assigned to show that the words used should be understood in a different sense.[15]

In the case at bar, the contested provision of the CBA is clear and unequivocal. Article VIII, Section 1 (b) of the CBA categorically provides that the scheduling of vacation leave shall be under the option of the employer. 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.[16] In fine, the CBA must be strictly adhered to and respected if its ends have to be achieved, being the law between the parties. In Faculty Association of Mapua Institute of Technology (FAMIT) v. Court of Appeals,[17] this Court held that the CBA during its lifetime binds all the parties. The provisions of the CBA must be respected since its terms and conditions constitute the law between the parties. The parties cannot be allowed to change the terms they agreed upon on the ground that the same are not favorable to them.

As correctly found by the CA:

The words of the CBA were unequivocal when it provided that "The company shall schedule the vacation leave of employees during the year taking into consideration the request of preference of the employees." The word shall in this instance connotes an imperative command, there being nothing to show a different intention. The only concession given under the subject clause was that 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 accordance with what had been agreed and stipulated upon in the CBA.

There is, thus, no basis for the Voluntary Arbitrator to interpret the subject provision relating to the schedule of vacation leaves as being subject to the discretion of the union members. There is simply nothing in the CBA which grants the union members this right.

It must be noted the grant to management of the right to schedule vacation leaves is not without good reason. Indeed, if union members were given the unilateral discretion to schedule their vacation leaves, the same may result in significantly crippling the number of key employees of the petitioner manning the toll ways on holidays and other peak seasons, where union members may wittingly or unwittingly choose to have a vacation. Put another way, the grant to management of the right to schedule vacation leaves ensures that there would always be enough people manning and servicing the toll ways, which in turn assures the public plying the same orderly and efficient toll way service.

Indeed, the multitude or scarcity of personnel manning the tollways should not rest upon the option of the employees, as the public using the skyway system should be assured of its safety, security and convenience.

Although the preferred vacation leave schedule of petitioner's members should be given priority, they cannot demand, as a matter of right, that their request be automatically granted by the respondent. If the petitioners were given the exclusive right to schedule their vacation leave then said right should have been incorporated in the CBA. In the absence of such right and in view of the mandatory provision in the CBA giving respondent the right to schedule the vacation leave of its employees, compliance therewith is mandated by law.

In the grant of vacation leave privileges to an employee, the employer is given the leeway to impose conditions on the entitlement to and commutation of the same, as the grant of vacation leave is not a standard of law, but a prerogative of management.[18] It is a mere concession or act of grace of the employer and not a matter of right on the part of the employee.[19] Thus, it is well within the power and authority of an employer to impose certain conditions, as it deems fit, on the grant of vacation leaves, such as having the option to schedule the same.

Along that line, since the grant of vacation leave is a prerogative of the employer, the latter can compel its employees to exhaust all their vacation leave credits. Of course, any vacation leave credits left unscheduled by the employer, or any scheduled vacation leave that was not enjoyed by the employee upon the employer's directive, due to exigencies of the service, must be converted to cash, as provided in the CBA. However, it is incorrect to award payment of the cash equivalent of vacation leaves that were already used and enjoyed by the employees. By directing the conversion to cash of all utilized and paid vacation leaves, the voluntary arbitrator has licensed unjust enrichment in favor of the petitioner and caused undue financial burden on the respondent. Evidently, the Court cannot tolerate this.

It would seem that petitioner's goal in relentlessly arguing that its members preferred vacation leave schedule should be given preference is not allowed to them to avail themselves of their respective vacation leave credits at all but, instead, to convert these into cash.

In Cuajo v. Chua Lo Tan,[20] We said that the purpose of a vacation leave is to afford a laborer a chance to get a much-needed rest to replenish his worn-out energy and acquire a new vitality to enable him to efficiently perform his duties, and not merely to give him additional salary and bounty.

This purpose is manifest in the Memorandum dated January 9, 2004[21] addressed to all TMSD Personnel which provides that:


The 17 days (15 days SVL plus 2-Day-Off) scheduled vacation leave (SVL) with pay for the year 2004 had been published for everyone to take a vacation with pay which will be our opportunity to enjoy quality time with our families and perform our other activities requiring our personal attention and supervision.(Emphasis ours.)

Accordingly, the vacation leave privilege was not intended to serve as additional salary, but as a non-monetary benefit. To give the employees the option not to consume it with the aim of converting it to cash at the end of the year would defeat the very purpose of vacation leave.

Petitioner's contention that labor contracts should be construed in favor of the laborer is without basis and, therefore, inapplicable to the present case. This rule of construction does not benefit petitioners because, as stated, there is here no room for interpretation. Since the CBA is clear and unambiguous, its terms should be implemented as they are written.

This brings Us to the issue of who is accountable for the in-service training of the security guards. On this point, We find the petition meritorious.

Although it is a rule that a contract freely entered into between the parties should be respected, since a contract is the law between the parties, there are, however, certain exceptions to the rule, specifically Article 1306 of the Civil Code, which provides:

The contracting parties may establish such 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.

Moreover, the relations between capital and labor are not merely contractual. "They are so impressed with public interest that labor contracts must yield to the common good x x x."[22] The supremacy of the law over contracts is explained by the fact that labor contracts are not ordinary contracts; they are imbued with public interest and therefore are subject to the police power of the state.[23] However, it should not be taken to mean that provisions agreed upon in the CBA are absolutely beyond the ambit of judicial review and nullification. If the provisions in the CBA run contrary to law, public morals, or public policy, such provisions may very well be voided.

In the present case, Article XXI, Section 6 of the CBA provides that "All expenses of security guards in securing /renewing their licenses shall be for their personal account." A reading of the provision would reveal that it encompasses all possible expenses a security guard would pay or incur in order to secure or renew his license. In-service training is a requirement for the renewal of a security guard's license.[24] Hence, following the aforementioned CBA provision, the expenses for the same must be on the personal account of the employee. However, the 1994 Revised Rules and Regulations Implementing Republic Act No. 5487 provides the following:

Section 17. Responsibility for Training and Progressive Development. 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. To attain this end, each duly licensed private security agency and company security force shall establish a staff position for training and appoint a training officer whose primary functions are to determine the training needs of the agency/guards in relation to the needs of the client/ market/ industry, and to supervise and conduct appropriate training requirements. All private security personnel shall be re-trained at least once very two years.

Section 12. In service training. - a. To maintain and/or upgrade the standard of efficiency, discipline and competence of security guards and detectives, company security force and private security agencies upon prior authority shall conduct-in-service training at least two (2) weeks duration for their organic members by increments of at least two percent (2%) of their total strength. 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. All security officer must undergo in-service training at least once every two (2) years preferably two months before his or her birth month.

Since it is the primary responsibility of operators of company security forces to maintain and upgrade the standards of efficiency, discipline, performance and competence of their personnel, it follows that the expenses to be incurred therein shall be for the personal account of the company. Further, the intent of the law to impose upon the employer the obligation to pay for the cost of its employees' training is manifested in the aforementioned law's provision that Where the quality of training is better served by centralization, the CFSD 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. It can be gleaned from the said provision that cost of training shall be pro-rated among participating agencies and companies if the training is best served by centralization. The law mandates pro-rating of expenses because it would be impracticable and unfair to impose the burden of expenses suffered by all participants on only one participating agency or company. Thus, it follows that if there is no centralization, there can be no pro-rating, and the company that has its own security forces shall shoulder the entire cost for such training. If the intent of the law were to impose upon individual employees the cost of training, the provision on the pro-rating of expenses would not have found print in the law.

Further, petitioner alleged that prior to the inking of the CBA, it was the respondent company providing for the in-service training of the guards.[25] Respondent never controverted the said allegation and is thus deemed to have admitted the same.[26] Implicit from respondent's actuations was its acknowledgment of its legally mandated responsibility to shoulder the expenses for in-service training.

WHEREFORE, the petition is PARTIALLY GRANTED. The Decision and Resolution of the Court of Appeals, dated October 4, 2005 and January 23, 2006, respectively, in CA-G.R. SP. No. 87069 is MODIFIED. The cost of in-service training of the respondent company's security guards shall be at the expense of the respondent company. This case is remanded to the voluntary arbitrator for the computation of the expenses incurred by the security guards for their in-service training, and respondent company is directed to reimburse its security guards for the expenses incurred.


Corona, (Chairperson), Velasco, Jr., Nachura, and Mendoza, JJ., concur.

[1] Penned by Associate Justice Andres B. Reyes, Jr., with Associate Justices Rosmari D. Carandang and Monina Arevalo-Zenarosa, concurring; rollo, pp. 32-43.

[2] Id. at 45.

[3] Records, pp.4-9.

[4] Supra note 1, at 76-77.

[5] Supra note 3, at 3.

[6] Supra note 1, at 113-118.

[7] Supra note 1, 120-124.

[8] Id. 32-43.

[9] Id. 45.

[10] Supra note 1, at 154-155.

[11] Id. at 172-173.

[12] People of the Philippines v. Joven de Grano, Armando de Grano, Domingo Landicho and Estanislao Lacaba, G.R. No. 167710, June 5, 2009.

[13] G.R. No. 151413, February 13, 2008, 545 SCRA 10, 17-19.

[14] Filipinas Life Assurance Company v. Pedroso, G.R. No. 159489, February 4, 2008, 543 SCRA 542, 547.

[15] Bautista v. Court of Appeals, 379 Phil. 386, 399 (2000), citing 17A Am. Jur. 2D 348-349.

[16] RFM Corporation-Flour Division and SFI Feeds Division v. Kasapian ng Manggagawang Pinagkaisa-RFM (KAMPI-NAFLU-KMU) and Sandigan at Ugnayan ng Manggagawang Pinagkaisa-SFI (SUMAPI-NAFLU-KMU) G.R. No. 162324, February 4, 2009, 578 SCRA 37.

[17]G.R. No. 164060, June 15, 2007, 524 SCRA 709, 716.

[18] SobrepeƱa, Jr. v. Court of Appeals, 345 Phil. 714, 728 (1997).

[19] Virginia A. Sugue and the Heirs of Renato S. Valderrama v. Triumph International (Phils.), Inc., G.R. No. 164804, January 30, 2009; Triumph International (Phils.), Inc., v. Virginia A. Sugue and the Heirs of Renato S. Valderrama, G.R. No. 164784, January 30, 2009, 577 SCRA 339.

[20] No. L-16298, September 29, 1962, 6 SCRA 136, 138.

[21] Supra note 1, at 76-77.

[22] Article 1700, New Civil Code.

[23] Villa v. National Labor Relations Commission, G.R. No. 117043, January 14, 1998, 284 SCRA 105, 127,128.

[24] Revised Rules and Regulations Implementing Republic Act No. 5487, Rule X, Section 12(b). The certificate of in-service training issued by company security force/private security agency shall be a pre-requisite for the renewal of license to exercise profession.

[25] Petition for Review, supra note 1, at 21; Petitioner's Memorandum, id. at 220; Petitioner's Motion for Reconsideration with the CA, CA records, pp. 181.

[26] Sec. 32, Rule 130 of the Rules of Court - Admission by silence. - An act or declaration made in the presence and within the hearing or observation of a party who does or says nothing when the act or declaration is such as naturally to call for action or comment if not true, and when proper and possible for him to do so, may be given in evidence against him.

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