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charge are safeguarded. (People vs. Sanchez, 569 SCRA

194 [2008])

——o0o——

G.R. No. 190515. November 15, 2010.*

CIRTEK EMPLOYEES LABOR UNION-FEDERATION

OF FREE WORKERS, petitioner, vs. CIRTEK
ELECTRONICS, INC., respondent.

Labor Law; Collective Bargaining Agreements; Assumption of

Jurisdiction; While an arbitral award cannot per se be categorized
as an agreement voluntarily entered into by the parties because it
requires the intervention and imposing power of the State thru the
Secretary of Labor when he assumes jurisdiction, the arbitral
award can be considered an approximation of a collective
bargaining agreement which would otherwise have been entered
into by the parties, hence, it has the force and effect of a valid
contract obligation.—It is well-settled that the Secretary of Labor,
in the exercise of his power to assume jurisdiction under Art. 263
(g) of the Labor Code, may resolve all issues involved in the
controversy including the award of wage increases and benefits.
While an arbitral award cannot per se be categorized as an
agreement voluntarily entered into by the parties because it
requires the intervention and imposing power of the State thru
the Secretary of Labor when he assumes jurisdiction, the arbitral
award can be considered an approximation of a collective
bargaining agreement which would otherwise have been
entered into by the parties, hence, it has the force and effect of a
valid contract obligation.
Same; Same; Same; That the arbitral award was higher than
that which was purportedly agreed upon in the Memorandum of
Agreement (MOA) between the employer and the union officers is of
no moment—the Secretary, in resolving the Collective Bargaining

_______________

* THIRD DIVISION.

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Cirtek Employees labor Union-Federation of Free Workers vs.

Cirtek Electronics, Inc.

Agreement (CBA) deadlock, is not limited to considering the MOA

as basis in computing the wage increases.—That the arbitral
award was higher than that which was purportedly agreed upon
in the MOA is of no moment. For the Secretary, in resolving the
CBA deadlock, is not limited to considering the MOA as basis in
computing the wage increases. He could, as he did, consider the
financial documents submitted by respondent as well as the
parties’ bargaining history and respondent’s financial outlook and
improvements as stated in its website. It bears noting that since
the filing and submission of the MOA did not have the
effect of divesting the Secretary of his jurisdiction, or of
automatically disposing the controversy, then neither should
the provisions of the MOA restrict the Secretary’s leeway
in deciding the matters before him.
Same; Same; Same; Administrative Law; Evidence; Parol
Evidence Rule; Procedural Rules and Technicalities; Like any
other rule on evidence, parol evidence should not be strictly applied
in labor cases.—The appellate court’s brushing aside of the
“Paliwanag” and the minutes of the meeting that resulted in the
conclusion of the MOA because they were not verified and
notarized, thus violating, so the appellate court reasoned, the
rules on parol evidence, does not lie. Like any other rule on
evidence, parol evidence should not be strictly applied in labor
cases. The reliance on the parol evidence rule is misplaced.
In labor cases pending before the Commission or the Labor
Arbiter, the rules of evidence prevailing in courts of law or
equity are not controlling. Rules of procedure and evidence are
not applied in a very rigid and technical sense in labor cases.
Hence, the Labor Arbiter is not precluded from accepting and
evaluating evidence other than, and even contrary to, what is
stated in the CBA.
Same; Same; A Collective Bargaining Agreement (CBA), as a
labor contract within the contemplation of Article 1700 of the Civil
Code of the Philippines which governs the relations between labor
and capital, is not merely contractual in nature but impressed
with public interest, thus, it must yield to the common good.—
While a contract constitutes the law between the parties, this is
so in the present case with respect to the CBA, not to the MOA in
which even the union’s signatories had expressed reservations

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thereto. But even assuming arguendo that the MOA is treated as

a new CBA, since it is imbued with public interest, it must be
construed liberally and

767

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Cirtek Employees labor Union-Federation of Free Workers vs.

Cirtek Electronics, Inc.

yield to the common good. While the terms and conditions of a

CBA constitute the law between the parties, it is not,
however, an ordinary contract to which is applied the
principles of law governing ordinary contracts. A CBA, as a
labor contract within the contemplation of Article 1700 of the
Civil Code of the Philippines which governs the relations between
labor and capital, is not merely contractual in nature but
impressed with public interest, thus, it must yield to the
common good. As such, it must be construed liberally rather
than narrowly and technically, and the courts must place a
practical and realistic construction upon it, giving due
consideration to the context in which it is negotiated and purpose
which it is intended to serve.

PETITION for review on certiorari of the decision and

resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
Jose Sonny G. Matula for petitioner.
Herminio F. Valerio for respondent.

CARPIO-MORALES, J.:
Cirtek Electronics, Inc. (respondent), an electronics and
semi-conductor firm situated inside the Laguna
Technopark, had an existing Collective Bargaining
Agreement (CBA) with Cirtek Employees Labor Union-
Federation of Free Workers (petitioner) for the period
January 1, 2001 up to December 31, 2005. Prior to the 3rd
year of the CBA, the parties renegotiated its economic
provisions but failed to reach a settlement, particularly on
the issue of wage increases. Petitioner thereupon declared
a bargaining deadlock and filed a Notice of Strike with the
National Conciliation and Mediation Board-Regional Office
No. IV (NCMB-RO IV) on April 26, 2004. Respondent, upon
the other hand, filed a Notice of Lockout on June 16, 2004.
While the conciliation proceedings were ongoing,
respondent placed seven union officers including the
President, a Vice President, the Secretary and the
Chairman of the Board
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Cirtek Employees labor Union-Federation of Free Workers
vs. Cirtek Electronics, Inc.

of Directors under preventive suspension for allegedly

spearheading a boycott of overtime work. The officers were
eventually dismissed from employment, prompting
petitioner to file another Notice of Strike which was, after
conciliation meetings, converted to a voluntary arbitration
case. The dismissal of the officers was later found to be
legal, hence, petitioner appealed.
In the meantime, as amicable settlement of the CBA
was deadlocked, petitioner went on strike on June 20, 2005.
By Order1 dated June 23, 2005, the Secretary of Labor
assumed jurisdiction over the controversy and issued a
Return to Work Order which was complied with.
Before the Secretary of Labor could rule on the
controversy, respondent created a Labor Management
Council (LMC) through which it concluded with the
remaining officers of petitioner a Memorandum of
Agreement (MOA)2 providing for daily wage increases of
P6.00 per day effective January 1, 2004 and P9.00 per day
effective January 1, 2005. Petitioner submitted the MOA
via Motion and Manifestation3 to the Secretary of Labor,
alleging that the remaining officers signed the MOA under
respondent’s assurance that should the Secretary order a
higher award of wage increase, respondent would comply.
By Order4 dated March 16, 2006, the Secretary of Labor
resolved the CBA deadlock by awarding a wage increase of
from P6.00 to P10.00 per day effective January 1, 2004 and
from P9.00 to P15.00 per day effective January 1, 2005, and
adopting all other benefits as embodied in the MOA.
Respondent moved for a reconsideration of the Decision
as petitioner’s vice-president submitted a “Muling
Pagpapatibay

_______________

1 DOLE records, pp. 20-22. Penned by Secretary Patricia A. Sto.

Tomas.
2 Id., at pp. 251-289.
3 Id., at pp. 290-293.
4 CA Rollo, pp. 47-51.

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Cirtek Employees labor Union-Federation of Free Workers
vs. Cirtek Electronics, Inc.

ng Pagsang-ayon sa Kasunduan na may Petsang ika-4 ng

Agosto 2005,”5 stating that the union members were
waiving their rights and benefits under the Secretary’s
Decision. Reconsideration of the Decision was denied by
Resolution6 of August 12, 2008, hence, respondent filed a
petition for certiorari before the Court of Appeals.
By Decision7 of September 24, 2009, the appellate court
ruled in favor of respondent and accordingly set aside the
Decision of the Secretary of Labor. It held that the
Secretary of Labor gravely abused his discretion in not
respecting the MOA. It did not give credence to the minutes
of the meeting8 that attended the forging of the MOA as it
was not verified, nor to the “Paliwanag”9 submitted by
respondent union members explaining why they signed the
MOA as it was not notarized.
Petitioner’s motion for reconsideration having been
denied by Resolution10 of December 2, 2009, the present
petition was filed, maintaining that the Secretary of
Labor’s award is in order, being in accord with the parties’
CBA history—respondent having already granted P15.00
per day for 2001, P10.00 per day for 2002, and P10.00 per
day for 2003, and that the Secretary has the power to grant
awards higher than what are stated in the CBA.
Respecting the MOA, petitioner posits that it was
“surreptitiously entered into [in] bad faith,” it having been
forged without the assistance of the Federation of Free
Workers or counsel, adding that respondent could have
waited for the

_______________

5 DOLE records, p. 383.

6 Id., at pp. 393-403. Penned by Undersecretary Romeo C. Lagman.
7 CA Rollo, pp. 312-323. Penned by Associate Justice Romeo F. Barza
and concurred in by Associate Justices Remedios A. Salazar-Fernando and
Isaias P. Dicdican.
8 Id., at p. 340.
9 Id., at pp. 216-222.
10 Id., at pp. 368-369. Ibid.

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Cirtek Employees labor Union-Federation of Free Workers

vs. Cirtek Electronics, Inc.

Secretary’s resolution of the pending CBA deadlock or that

the MOA could have been concluded before representatives
of the Secretary of Labor.
The relevant issues for resolution are 1) whether the
Secretary of Labor is authorized to give an award higher
than that agreed upon in the MOA, and 2) whether the
MOA was entered into and ratified by the remaining
officers of petitioner under the condition, which was not
incorporated in the MOA, that respondent would honor the
Secretary of Labor’s award in the event that it is higher.
The Court resolves both issues in the affirmative.
It is well-settled that the Secretary of Labor, in the
exercise of his power to assume jurisdiction under Art. 263
(g)11 of the Labor Code, may resolve all issues involved in
the controversy including the award of wage increases and
benefits.12 While an arbitral award cannot per se be
categorized as an agreement voluntarily entered into by
the parties because it re-

_______________

11 (g) When, in his opinion, there exists a labor dispute causing or

likely to cause a strike or lockout in an industry indispensable to the
national interest, the Secretary of Labor and Employment may
assume jurisdiction over the dispute and decide it or certify the
same to the Commission for compulsory arbitration. Such assumption
or certification shall have the effect of automatically enjoining
the intended or impending strike or lockout as specified in the
assumption or certification order. If one has already taken place at
the time of assumption or certification, all striking or locked out
employees shall immediately return-to-work and the employer shall
immediately resume operations and readmit all workers under the same
terms and conditions prevailing before the strike or lockout. The Secretary
of Labor and Employment or the Commission may seek the assistance of
law enforcement agencies to ensure compliance with this provision as well
as with such orders as he may issue to enforce the same.
x x x x (emphasis supplied)
12 International Pharmaceutical, Inc. v. Hon. Secretary of Labor and
Associated Labor Union, G.R. Nos. 92981-83, January 8, 1992, 205 SCRA
59.

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Cirtek Employees labor Union-Federation of Free Workers

vs. Cirtek Electronics, Inc.

quires the intervention and imposing power of the State

thru the Secretary of Labor when he assumes jurisdiction,
the arbitral award can be considered an approximation
of a collective bargaining agreement which would
otherwise have been entered into by the parties, hence, it
has the force and effect of a valid contract obligation.13
That the arbitral award was higher than that which was
purportedly agreed upon in the MOA is of no moment. For
the Secretary, in resolving the CBA deadlock, is not limited
to considering the MOA as basis in computing the wage
increases. He could, as he did, consider the financial
documents14 submitted by respondent as well as the
parties’ bargaining history and respondent’s financial
outlook and improvements as stated in its website.15
It bears noting that since the filing and submission
of the MOA did not have the effect of divesting the
Secretary of his jurisdiction, or of automatically
disposing the controversy, then neither should the
provisions of the MOA restrict the Secretary’s
leeway in deciding the matters before him.
The appellate court’s brushing aside of the “Paliwanag”
and the minutes of the meeting that resulted in the
conclusion of the MOA because they were not verified and
notarized, thus violating, so the appellate court reasoned,
the rules on parol evidence, does not lie. Like any other
rule on evidence, parol evidence should not be strictly
applied in labor cases.

“The reliance on the parol evidence rule is misplaced. In

labor cases pending before the Commission or the Labor Arbiter,
the rules of evidence prevailing in courts of law or equity
are

_______________

13 Vide Manila Electric Company v. Quisumbing, G.R. No. 127598, February

22, 2000, 326 SCRA 172, citing Mindanao Terminal and Brokerage Service, Inc. v.
Confesor, 338 Phil. 671; 272 SCRA 161 (1997).
14 DOLE records, pp. 303-305; 129-250; 32-48.
15 Id., at pp. 306-307.

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Cirtek Employees labor Union-Federation of Free Workers vs.
Cirtek Electronics, Inc.

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not controlling. Rules of procedure and evidence are not applied

in a very rigid and technical sense in labor cases. Hence, the
Labor Arbiter is not precluded from accepting and evaluating
evidence other than, and even contrary to, what is stated in the
CBA.”16 (emphasis supplied)

While a contract constitutes the law between the

parties, this is so in the present case with respect to the
CBA, not to the MOA in which even the union’s signatories
had expressed reservations thereto. But even assuming
arguendo that the MOA is treated as a new CBA, since it is
imbued with public interest, it must be construed liberally
and yield to the common good.

“While the terms and conditions of a CBA constitute the

law between the parties, it is not, however, an ordinary
contract to which is applied the principles of law
governing ordinary contracts. A CBA, as a labor contract
within the contemplation of Article 1700 of the Civil Code of the
Philippines which governs the relations between labor and
capital, is not merely contractual in nature but impressed
with public interest, thus, it must yield to the common
good. As such, it must be construed liberally rather than
narrowly and technically, and the courts must place a practical
and realistic construction upon it, giving due consideration to the
context in which it is negotiated and purpose which it is intended
to serve.”17 (emphasis and underscoring supplied)

WHEREFORE, the petition is GRANTED. The Decision

dated September 24, 2009 and the Resolution dated
December 2, 2009 of the Court of Appeals are REVERSED
and SET ASIDE and the Order dated March 16, 2006 and
Resolution

_______________

16 Interphil Laboratories Employees Union-FFW v. Interphil

Laboratories, Inc., G.R. No. 142824, December 19, 2001, 372 SCRA 658.
17 Davao Integrated Port Stevedoring v. Abarquez, G.R. No. 102132.
March 19, 1993, 220 SCRA 197-198.

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