GOVERNMENT SERVICE INSURANCE SYSTEM(GSIS) AND WINSTON F.

GARCIA, IN HIS CAPACITY AS THE

PRESIDENT AND GENERAL MANAGER OF THE GSIS, PETITIONERS,

VS.

DINNAH VILLALIZA, ELIZABETH DUQUE, ADRONICO A. ECHAVEZ, RODEL RUBIO, ROWENA THERESE B.
GRACIA, PILAR LAYCO, AND ANTONIO JOSE LEGARDA, RESPONDENTS,

G.R.NO. 180291

JULY 27, 2010

Facts:

PGM Garcia filed formal charges against respondents for grave misconduct and conduct prejudicial to
the best interest of the service. That on May 27, 2005, respondent, wearing red shirt together with some
employees, marched to or appeared simultaneously at outside of the office of the investigation unit in a
mass demonstration/rally protest and support for Messrs. Mario Molina and Albert Velasco, the latter
having surreptitiously entered the GSIS premises. The petitioners argued that the memorandum circular
was merely an Administrative issuance aimed at stream lining the GSIS operations and did not violate the
CBA or the respondents right to self-organization. The CA affirmed the trial court’s decision.

Issue:

Whether or not the Memorandum Circular issued by the GSIS violated the CBA and the respondents
right to self-organization.

Held:

The Supreme Court upheld the Court of Appeal’s ruling and held that the Memorandum Circular issued
by the GSIS violated the CBA and the respondents right to self-organization. The CBA between the GSIS
and its employees union contained an automatic renewal clause and a non-diminution clause, which
guaranteed that the benefits enjoyed by the employer. The circular effectively repealed these provisions
of the CBA by stating that any agreement between the agency and the union would be subject to the
budgetary limitations and other laws and regulations. The court also held that the respondents were not
required to exhaust their administrative remedies before filing the petition as the issue involved a
violation of a contractual obligation and a constitutional right.