G.R. No. 239746 . November 29, 2021
LIMCOMA LABOR ORGANIZATION (LLO)-PLAC, PETITIONER, VS. LIMCOMA MULTI-PURPOSE COOP. (LIMCOMA), RESPONDENT.

FACTS

Petitioner Limcoma Labor Organization (LLO)-PLAC is the Sole and Exclusive Bargaining Agent (SEBA) for the regular rank-and-file employees of respondent Limcoma Multi-Purpose Cooperative. Following a Voluntary Retire-Rehire (VRR) Program settled via a 2005 Memorandum of Agreement, a Collective Bargaining Agreement (CBA) effective April 1, 2006, and later renewed in 2011, was implemented. Article VIII, Section 2 of both CBAs stipulated that the cooperative grants “all regular employees a profit-sharing equivalent to Eighteen Percent (18%) of the net surplus.” During a 2014 Wage Reopening negotiation that ended in a deadlock, petitioner learned that respondent had also entered into a separate “Kasunduan sa Voluntary Retire-Rehire Program (K-VRR)” with its supervisors, technical, confidential, and managerial employees, granting them an 18% profit share. Petitioner contended that the 18% profit share under the rank-and-file CBA should be exclusive to its members. The dispute was submitted to a Voluntary Arbitrator (VA), who ruled that the 18% profit sharing provision applied only to regular rank-and-file employees. The Court of Appeals reversed the VA’s decision, ruling that the CBA provision entitled “ALL regular employees of the cooperative, regardless of their rank or position” to the profit share and that certain benefits advanced by the cooperative were deductible from this 18% surplus. Petitioner filed the present petition, limited to the issue of the profit-sharing provision’s coverage for the years 2011-2013.

ISSUE

Whether the Court of Appeals erred in ruling that supervisors, confidential, and managerial employees are entitled to benefit from the 18% profit-sharing provision in the CBA negotiated by and for the rank-and-file employees.

RULING

The Supreme Court GRANTED the petition, REVERSED and SET ASIDE the Decision and Resolution of the Court of Appeals, and REINSTATED the Decision of the Voluntary Arbitrator. The Court held that the 18% profit-sharing benefit under the CBA negotiated by the rank-and-file union is exclusive to the regular rank-and-file employees within the bargaining unit. The basic rule in labor law prohibits managerial and supervisory employees from joining the collective bargaining unit of rank-and-file employees. The CBA, including its economic benefits like profit-sharing, is a contract between the employer and the recognized bargaining agent, which represents only the rank-and-file employees. The separate “Kasunduan” (K-VRR) entered into by the cooperative with non-rank-and-file employees for a similar 18% profit share constitutes a distinct grant arising from management prerogative. This separate grant must be sourced from a different allocation and cannot be taken from the 18% of the net surplus earmarked for the rank-and-file employees under the CBA, as doing so would dilute the latter’s share. The literal interpretation of “all regular employees” in the CBA clause must yield to the principle that a CBA covers only the employees within the contracting bargaining unit.