SANTUYO v. REMERCO GARMENTS MANUFACTURING, INC.
G.R. No. 174420, March 22, 2010
FACTS: From 1992 to 1994, due to a serious industrial dispute, the Kaisahan ng Manggagawa
sa Remerco Garments Manufacturing Inc.- KMM Kilusan (union) staged a strike against
respondent Remerco Garments Manufacturing, Inc. (RGMI). Because the strike was
subsequently declared illegal, all union officers were dismissed. Employees who wanted to
sever their employment were paid separation pay while those who wanted to resume work were
recalled on the condition that they would no longer be paid a daily rate but on a piece-rate basis.
Petitioners, who had been employed as sewers, were among those recalled.
Without allowing RGMI to normalize its operations, the union filed a notice of strike in the
National Conciliation and Mediation Board (NCMB) on August 8, 1995. According to the union,
RGMI conducted a time and motion study and changed the salary scheme from a daily rate to
piece-rate basis without consulting it. RGMI therefore not only violated the existing collective
bargaining agreement (CBA) but also diminished the salaries agreed upon. It therefore
committed an unfair labor practice.
RGMI filed a notice of lockout in the NCMB. While the union and RGMI were undergoing
conciliation in the NCMB, RGMI transferred its factory site.
The union went on strike and blocked the entry to RGMI's (new) premises.
The Secretary of Labor assumed jurisdiction pursuant to Article 263(g) of the Labor Code and
ordered RGMI's striking workers to return to work immediately. He likewise ordered the union
and RGMI to submit their respective position papers.
While the conciliation proceedings between the union and respondent were pending, petitioners
filed a complaint for illegal dismissal against RGMI and respondent Victoria Reyes, accusing the
latter of harassment.
Respondents, on the other hand, moved to dismiss the complaint in view of the pending
conciliation proceedings (which involved the same issue) in the NCMB. Moreover, alleged
violations of the CBA should be resolved according to the grievance procedure laid out therein.
Thus, the labor arbiter had no jurisdiction over the complaint.
The labor arbiter found that respondents did not pay petitioners their salaries and deprived them
of the benefits they were entitled to under the CBA. Thus, in a decision dated July 15, 1999,[11]
he ordered respondents to pay petitioners their unpaid salaries according to their daily rate with
the corresponding increase provided in the CBA and benefits, separation pay and attorney's
fees.
Respondents appealed the decision of the labor arbiter in the National Labor Relations
Commission (NLRC) but it was denied.
Aggrieved, respondents filed a petition for certiorari in the Court of Appeals (CA) claiming that
the NLRC acted with grave abuse of discretion in affirming the decision of the labor arbiter.
They argued that since the complaint involved the implementation of the CBA, the labor arbiter
had no jurisdiction over it.
The CA reversed and set aside the decision of the NLRC on the ground that the labor arbiter
had no jurisdiction over the complaint.
ISSUE: Whether or not the labor arbiter has jurisdiction over the complaint
HELD: NONE.
Article 217. Jurisdiction of Labor Arbiters and the Commission. xxxx x x x x x
(c) Cases arising from the interpretation or implementation of collective bargaining
agreements and those arising from the interpretation or enforcement of company
personnel policies shall be disposed of by the Labor Arbiter by referring the same to the
grievance machinery and voluntary arbitration as may be provided in said agreements.
(emphasis supplied)
This provision requires labor arbiters to refer cases involving the implementation of CBAs to the
grievance machinery provided therein and to voluntary arbitration.
Moreover, Article 260 of the Labor Code clarifies that such disputes must be referred first to the
grievance machinery and, if unresolved within seven days, they shall automatically be referred
to voluntary arbitration.
Under Article 217, voluntary arbitrators have original and exclusive jurisdiction over matters
which have not been resolved by the grievance machinery.
Pursuant to Articles 217 in relation to Articles 260 and 261 of the Labor Code, the labor arbiter
should have referred the matter to the grievance machinery provided in the CBA. Because the
labor arbiter clearly did not have jurisdiction over the subject matter, his decision was void.
