PHILIPPINE FEDERATION OF PETROLEUM WORKERS v.

CIR

Facts:

1. Standard Vacuum Co (SVC), predecessor of Esso Standard Eastern Inc. was split into the present company
and Mobil Philippines. The respondent absorbed all the working force in Luzon. The Pandacan terminal to
which most of the employees involved in this case were assigned is the main distribution center for bulk and
package products both during the time of SVC and subsequently when the splitting of this company took
place afterwards. Because of this development plus improved and more efficient operating conditions,
respondent company realized that it has extra or excess personnel, which later on were termed redundant
employees.

2. On April 8, 1963, respondent company and the Citizens Labor Union (CLU) executed a Collective
Bargaining Agreement for a period of three years (up to July 8, 1966).

3. At the time of the signing of this Agreement, almost all if not all of the present members of the petitioner
MME were then members of the contracting union including its incumbent president.

Among the pertinent provisions of this Agreement are the following and we quote:

xxx

'Regular employees may continue to work up to the age of sixty (60) so they may enjoy Social Security
Benefits provided the employee upon examination is found to be medically and physically fit.

xxx

4. On January 6, 1965 another Memorandum of Agreement was executed between the CLU and respondent
company was acknowledged before a Notary Public on January 15, 1965. Emphasis was again laid in this
Agreement that the same is not to be considered as a remegotiation or a change of the Collective Bargaining
Agreement on April 8, 1963. The terms and conditions of this Agreement (Exh. 'B') are substantially similar
to terms and conditions of the Return to Work Agreement of November 12, 1965, and the retirement age of
eligible employees was placed at 55 years.

5. Two separate appeals from a decision of the CIR on an industrial dispute and strike by members of Malayang
Manggagawa ng Esso (MME).

6. The striking union, MME, affiliate of the Philippine Federation of Petroleum Workers (PFPW) concluded a
return to work agreement pending the resolution of the labor dispute by the CIR.

7. 11 demands were filed by the MME, the trial court dismissed outright the 4 demands.

8. Trial court - granted that “against the reduction of the retirement age of the employees from 60 years to 55
years, subject to certain conditions therein stated”

Issue: WON the retirement age of 60 yrs old can be reduced to 55 yrs old by the Memorandum of Agreement executed on
January 6, 1965. – NO.

Ruling:

The respondent company having agreed at one instance to the 60 years age retirement cannot now renege on this provision no
matter how monetarily attractive is the retirement benefit. The same may be subject to bargaining or negotiations, but once
agreed, every employee within the appropriate unit who is expected to avail of such benefit cannot be deprived of the same by
subsequent negotiations of the representative union.

No error was committed by respondent court since it correctly held that as the retirement age of the company's workers was
definitely fixed at 60 years in the supplemental agreement of November 8, 1963, such retirement age, assuring the very livelihood
and welfare of the employees and their security of employment, became the law between the company and each of its employees
for the duration of the stipulated three-year period of their collective bargaining agreement up to July 8, 1966. The same could no
longer be subject to revision or reduction during the life of the agreement without the consent or ratification of the employees,
and no worker could be deprived of such vested contractual right by subsequent unauthorized negotiations of the representative
union.

The benefits of the subsisting collective bargaining agreement may not be peremptorily modified without the 30-day notice
required by law nor summarily set aside and disregarded, since relations between capital and labor are not merely contractual but
are impressed with public interest such that labor contracts must yield to the common good. There is no claim here that the
employees had been duly notified by the CLU of, much less that they had ratified the modifications provided in the January 6,
1965 agreement which worked against their interest.