Maynilad Water Supervisors Association v. Maynilad Water Services, Inc. G.R. No. 198935 (2013)

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Maynilad Water Supervisors Association v. Maynilad Water Services, Inc.

G.R. No. 198935 (2013)

FACTS:
Petitioner Maynilad Water Supervisors Association (MWSA) is an association composed
of former supervisory employees of Metropolitan Waterworks and Sewerage System
(MWSS). These employees claim that during their employment with MWSS, they were
receiving a monthly cost of living allowance (COLA) equivalent to 40% of their basic
pay.

The payment of these allowances and other additional compensation, including the
COLA were, however, discontinued without qualification effective 1 November 1989
when the Department of Budget and Management (DBM) issued Corporate
Compensation Circular No. 10 (CCC No. 10).

In 1997, MWSS was privatized and part of it, MWSS West, was acquired by Maynilad
Water Services, Inc. (Maynilad). Some of the employees of MWSS, which included
members of MWSA, were absorbed by Maynilad subject to the terms and conditions of a
Concession Agreement. The payment of COLA was not among those listed as benefits in
Exhibit “F.”

In 1998, the Supreme Court promulgated a Decision5 declaring DBM CCC No.10


ineffective for failure to comply with the publication requirement. Consequently, MWSS
partially released the COLA payments for its employees, including members of MWSA,
covering the years 1989 to 1997, and up to year 1999 for its retained employees.

In 2002, MWSA filed a complaint before the Labor Arbiter praying for the payment of
their COLA from the year 1997, the time its members were absorbed by Maynilad, up to
the present. MWSA argued that since DBM CCC No. 10 was rendered ineffective, the
COLA should be paid as part of the benefits enjoyed by their members at the time of
their separation from MWSS, and which should form part of their salaries and benefits
with Maynilad.

In a decision dated 10 November 2006, the Labor Arbiter granted MWSA’s claim and
directed Maynilad to pay the COLA of the supervisors retroactive to the date when they
were hired in 1997, with legal interest from the date of promulgation of the decision. It
also directed Maynilad to take necessary measures to ensure that the benefit is
incorporated in the employees’ monthly compensation. 6

On 11 December 2006, Maynilad appealed the decision before the National Labor
Relations Commission (NLRC) and filed an Urgent Manifestation and Motion to Reduce
Bond.

The NLRC granted Maynilad’s motion and reversed on appeal the decision of the Labor
Arbiter.
On 28 September 2007, MWSA filed a motion for reconsideration but this was denied by
the NLRC in its 23 October 2007 resolution.

Aggrieved, MWSA filed a petition for certiorari with the CA on 11 January 2008.

In a Decision7 dated 31 May 2010, the CA Ninth Division annulled and set aside the
decision of the NLRC. It thus reinstated the decision of the Labor Arbiter.

Maynilad filed a motion for reconsideration of the 31 May 2010 CA Decision.

On 31 January 2011, the CA Ninth Division reconsidered its earlier Decision. The
decretal portion of the amended decision reads:

WHEREFORE, premises considered, the Motion for Reconsideration


is GRANTED. Consequently, the Court’s 31 May 2010 Decision is REVERSED and SET
ASIDE, and the 07 September 2007 Decision and 23 October 2007 Resolution of the
NLRC are AFFIRMED, and are thus REINSTATED.8

MWSA filed a Motion for Reconsideration of the amended decision. Pending resolution of
the Motion for Reconsideration, MWSA moved for the inhibition of the members of the
Ninth Division of the CA. The members of the division recused from the case in a
Resolution dated 3 June 2011.

Thereafter, the Second Division of the CA, to which the case was raffled, issued a
Resolution9 on 12 September 2011 denying MWSA’s Motion for Reconsideration.

Hence, this Petition for Review on Certiorari under Rule 45 of the Rules of Court.

ISSUE:
whether Maynilad bound itself under the Concession Agreement to pay the COLA of the
employees it absorbed from MWSS.

RULING:
A careful review of the Concession Agreement led us to conclude that both MWSS and
Maynilad never intended to include COLA as one of the benefits to be granted to the
absorbed employees.

The benefits agreed upon by the parties are stated in Exhibit “F” of the Concession
Agreement. It is clear from the aforesaid enumeration that COLA is not among the
benefits to be received by the absorbed employees. Contrary to the contention of
MWSA, the declaration by the Court of the ineffectiveness of DBM CCC No. 10 due to its
non-publication in the Official Gazette or in a newspaper of general circulation in the
country,11 did not give rise to the employee’s right to demand payment of the subject
benefit from Maynilad.
the instant Petition is hereby DENIED and the 31 January 2011 Amended Decision and
12 September 2011 Resolution of the Court of Appeals in CA-G.R. SP No. 101911
is AFFIRMED in toto

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