CASE DIGEST : LIMCOMA LABOR ORGANIZATION (LLO)-PLAC VS. LIMCOMA MULTI-PURPOSE COOP. (LIMCOMA) G.R. No. 239746 GAERLAN

FACTS : The case is a Petition for Review on Certiorari filed by Limcoma Labor Organization (LLO)-PLAC under Rule 45, challenging the Court of Appeals’ (CA) decision and resolution in CA-G.R. SP No. 139655. LLO-PLAC, as the sole and exclusive bargaining agent (SEBA) for rank-and-file employees of Limcoma Multi-Purpose Cooperative, contended that the 18% profit-sharing provision in the collective bargaining agreement (CBA) applied only to rank-and-file employees. After the implementation of a Voluntary Retire-Rehire Program in 2005, the first CBA was executed in 2006 and renewed in 2011, maintaining the 18% profit-sharing term. In 2014, during wage reopening negotiations, the union learned that supervisors and managerial employees were also granted 18% profit sharing under a separate agreement, prompting arbitration. The Voluntary Arbitrator (VA) ruled that profit sharing was due exclusively to rank-and-file employees. The CA, however, reversed the VA’s decision, holding that all regular employees, regardless of rank or position, were entitled to the 18% profit-sharing, with deductions for hospitalization, rice subsidy, and 13th month pay. Petitioner’s motion for reconsideration was denied, leading to the present petition, which focuses solely on profit-sharing coverage for 2011-2013, as subsequent CBA negotiations have rendered other issues academic.

ISSUE :  WON the CA committed serious error of judgement in ruling that supervisors, confidential and managerial employees are entitled to benefit from the provisions of the CBA of the rank and file employees

HELD : The Court granted the petition, ruling that the Court of Appeals erred in reversing the Voluntary Arbitrator’s (VA) decision regarding the profit-sharing provision in Section 2, Article VIII of the CBA. The CBA clearly covers only regular rank-and-file employees, and supervisory, confidential, and managerial employees are excluded under labor law from the collective bargaining unit, meaning they cannot share in the profit allocation secured by the union. The Court emphasized that while the employer may voluntarily grant similar benefits to non-rank-and-file employees through separate agreements like the K-VRR Program, such grants cannot be deducted from the 18% net surplus intended for rank-and-file employees under the CBA. The Court noted that the respondent’s argument that the profit-sharing had “ripened into practice” did not prevent correction, as there was an error in interpreting the CBA. Accordingly, the Court reinstated the VA’s decision, ordering the cooperative to provide the 18% profit share to all rank-and-file employees as agreed in the CBA, while any profit-sharing for K-VRR employees must come from separate allocation and not reduce the rank-and-file share. The CA’s August 9, 2017 Decision and May 16, 2018 Resolution were reversed and set aside.