Caltex Refinery Employees Association (CREA) vs. Brillantes

The Secretary of Labor and Employment, having assumed jurisdiction over a labor dispute, must definitively resolve all issues submitted to him and essentially involved therein; refusal or failure to do so constitutes grave abuse of discretion. On other CBA issues, the Secretary's resolutions are respected absent clear whimsicality, capriciousness, or arbitrariness, because they rest on what is possible, fair, and reasonable under the circumstances.

Petitioner CREA was the bargaining agent of rank-and-file employees at Caltex (Philippines), Inc., a refinery company operating in an industry indispensable to national interest. Private respondent Caltex and CREA were parties to a collective bargaining agreement due to expire on July 31, 1995, and negotiations for a new CBA were conducted with the assistance of the National Conciliation and Mediation Board and the Office of the Secretary of Labor and Employment. Article 263(g) of the Labor Code authorizes the Secretary to assume jurisdiction over labor disputes in industries indispensable to national interest and to enjoin strikes or lockouts. The dispute also implicated Article 260 of the Labor Code, as amended by RA 6715, on grievance machinery and voluntary arbitration.

Petitioner Caltex Refinery Employees Association (CREA) was the bargaining agent of the rank-and-file employees of private respondent Caltex (Philippines), Inc., which operated a refinery. Anticipating the expiration of their collective bargaining agreement on July 31, 1995, CREA and Caltex negotiated the terms and conditions of a new CBA, with the National Conciliation and Mediation Board and the Office of the Secretary of Labor and Employment participating. Some items were amicably agreed upon, but others remained unresolved. Eight meetings between the parties produced no significant progress, prompting CREA to declare a deadlock. On July 24, 1995, CREA filed a notice of strike. Six conciliation meetings conducted by the NCMB failed to settle the differences, and marathon meetings at the plant level also proved unavailing. During a strike vote on August 16, 1995, CREA's members opted for a walkout. Caltex then filed with the Department of Labor and Employment a petition for assumption of jurisdiction under Article 263(g) of the Labor Code.

On August 22, 1995, Acting Secretary of Labor and Employment Jose S. Brillantes assumed jurisdiction over the entire labor dispute at Caltex, enjoined any actual or intended strike or lockout, directed the parties to cease and desist from acts that might exacerbate the situation, and required them to submit position papers and evidence. Despite the order, CREA began a strike and set up a picket on August 25, 1995. Several company notices directing the striking employees to return to work were issued, but the members defied them and continued their mass action. In the course of the strike, DOLE Undersecretary Bienvenido Laguesma conducted conciliation meetings, convinced the union members to return to work, and secured a memorandum of agreement with Caltex. On September 9, 1995, the picket lines were lifted, and the parties filed their position papers on the unresolved issues. Because of the strike, Caltex terminated the employment of some CREA officers, and the legality of those dismissals added contentious issues to the dispute.

The parties again tried conciliation but failed to reach substantial agreement. On September 13, 1995, they agreed to refer the problem to the Secretary of Labor and Employment: they would submit their position papers and evidence simultaneously on September 27, 1995; no extension or further pleading would be allowed; and the Secretary would render a decision on or before October 9, 1995. The proceedings on the legality of the strike and the termination of union officers would commence after the CBA issues were resolved. As scheduled, the Secretary issued the first assailed Order on October 9, 1995, resolving the deadlock and directing the parties to execute a new CBA embodying the dispositions, maintaining old CBA benefits not modified or improved, and denying new demands not otherwise disposed of. Motions for reconsideration and clarification were denied in the second assailed Order dated November 21, 1995, which affirmed the October 9 Order with modifications and directed the parties to submit position papers and evidence on the legality of the strike and termination of union officers. The second motion for reconsideration was denied in the third assailed Order dated January 9, 1996, which affirmed the November 21 Order en toto subject to a clarification on Sunday work and gave the parties ten days to submit position papers and evidence on the legal issues. CREA then sought relief from the Supreme Court.

The Secretary's factual findings and dispositions are central to the petition. On wage increase, he awarded 14% effective August 1, 1995, 14% effective August 1, 1996, and 13% effective August 1, 1997, plus a P15.00 meal subsidy, after considering financial capacity, position in the industry, existing benefits, inflation, seniority, and wage differentiation. He found that the average inflation for the first ten months was 7.496% and that Central Bank projections indicated an 8.5% average for the year. He rejected the Banaba Housing upgrading as a measure of Caltex's financial capacity and found productivity differences with Shell. On retirement, he ruled that the New Retirement Plan did not apply to about 40 employees who had previously opted to remain under the Old Plan. On grievance machinery, he shortened the periods for processing grievances, removed the proposed joint council as an additional step, provided for automatic referral to voluntary arbitration, left the number of arbitrators to the parties, and noted that the list of accredited voluntary arbitrators was maintained by the NCMB. On signing bonus, he ruled that it was not covered by the maintenance of existing benefits clause because it partook of an incentive and premium for peaceful negotiations and amicable resolution, which were absent. On union security, he declined to modify the existing clause, characterizing the proposed amendment as procedural and saying that any amendment should be a product of mutual agreement.

• Wage Increase: Petitioner argued that the wage increase should be based on (a) the economic needs of the union's members, (b) the company's financial capacity, (c) the bargaining history between the union and the company, and (d) the traditional parity in wages between Caltex and Shell Refinery employees. It contended that inflation rose to 11.8% in September 1995 and remained double-digit, making the Secretary's "improved benefits" retrogressive; that Caltex's P200,000,000 Banaba Housing upgrading demonstrated immense financial capacity; and that Shell Refinery employees' salaries should be the reference point because both companies are in the same industry with refineries in Batangas, justifying a 15%/15%/15% increase.
• Union Security Clause: Petitioner maintained that the Secretary's refusal to resolve the union security clause was contrary to the whole idea of assumption of jurisdiction. It argued that the disagreement was not merely procedural but substantial, because under the existing CBA a member may be expelled only for non-payment of dues, subversion, or conviction for a crime involving moral turpitude; if the employee's act does not fall under these grounds, the member would continue to be employed by Caltex.
• New Retirement Plan: Petitioner contended that about 40 of its members remained under the Old Retirement Plan only because they were unable to exercise the option to shift to the New Retirement Plan, and that their exclusion from the New Plan constituted grave abuse of discretion. It argued that this was a case of the left hand taking away what the right hand had given, that the change was done for a shallow reason since the New Plan had been in place for at least two years, and that it perpetuated a discriminatory practice.
• Grievance Machinery and Arbitration: Petitioner argued that the Secretary derailed the grievance and arbitration scheme proposed by the union. The proposed Grievance Settlement Council was intended to supplement the Vice President for Manufacturing's review so that, instead of acting alone, he would be obliged to convoke a conference of the Council and afford the grievant a thorough hearing. Petitioner also recommended a single arbitrator to minimize expense if voluntary arbitration were resorted to.
• Signing Bonus: Petitioner asserted that the signing bonus was an existing benefit embodied in the old CBA. It explained that the bonus is given not only as an incentive for peaceful negotiations and amicable settlement of disputes but also as an extra award to workers following settlement of a CBA dispute by whatever means.

• General Standard: Private respondent Caltex (Philippines), Inc., whose Comment was adopted by public respondent Secretary Brillantes, argued that the Secretary did not commit grave abuse of discretion in resolving the labor dispute; the assailed dispositions were fair and reasonable under the circumstances.
• Wage Increase: Respondent countered that it had proposed a 9%, 7%, 7% increase with automatic adjustment if the increase fell short of inflation, so the Secretary's 14%, 14%, 13% award was closer to the union's position. It argued that the Banaba Housing upgrading was not a yardstick of financial capacity but a business judgment to survive and remain globally competitive; that the standard proof of financial standing is audited financial statements; and that parity with Shell was unreasonable because Shell produced 155,000 barrels per day with 120 manpower while Caltex produced 65,000 barrels per day with 221 manpower, and Shell's overtime rate was 37% of base pay while the union's was 102%.
• Union Security Clause: Respondent argued that nothing prevented petitioner from expelling its members, but termination of employment should be based only on the three grounds agreed upon in the existing CBA. It explained that Article 249(a) of the Labor Code provides only for the union's right to prescribe its own rules on acquisition and retention of membership, and that upholding petitioner's arguments would make Caltex a policeman of the union.
• New Retirement Plan: Respondent countered that the 40 or so employees had opted to remain covered by the Old Plan despite opportunities given them in 1985 to shift to the New Plan.
• Grievance Machinery and Arbitration: Respondent countered that the disposition on grievance machinery was fair and reasonable under the circumstances and was in fact merely a reiteration of the union's position during the conciliation meetings conducted by Undersecretary Bienvenido Laguesma.
• Signing Bonus: Respondent disagreed that a signing bonus is awarded when CBA negotiations result in a strike. It argued that the grant of a signing bonus is a matter of discretion and cannot be demanded as a matter of right, and that the bonus is meant as an incentive for peaceful negotiation; once the negotiations resulted in an illegal strike, the basis or rationale for the award was lost.

• Scope of Certiorari: Whether a petition for certiorari under Rule 65 may be used to re-evaluate the sufficiency of evidence and the factual findings of the Secretary of Labor and Employment in a labor dispute.
• Grave Abuse of Discretion: Whether the Secretary of Labor and Employment committed grave abuse of discretion amounting to lack or excess of jurisdiction in resolving the labor dispute and issuing the assailed Orders.
• Wage Increase: Whether the Secretary gravely abused discretion in awarding 14%, 14%, and 13% wage increases and a P15.00 meal subsidy instead of the union's 15%/15%/15% demand.
• Union Security Clause: Whether the Secretary gravely abused discretion in refusing to resolve the union security clause and leaving the matter to the parties.
• New Retirement Plan: Whether the Secretary gravely abused discretion in excluding about 40 employees from the New Retirement Plan.
• Grievance Machinery and Arbitration: Whether the Secretary gravely abused discretion in prescribing the grievance and arbitration procedure and leaving the number of arbitrators to the parties.
• Signing Bonus: Whether the Secretary gravely abused discretion in ruling that the signing bonus was not covered by the maintenance of existing benefits clause.

• Scope of Certiorari: No. Certiorari under Rule 65 is confined to errors of jurisdiction or grave abuse of discretion; it does not permit re-evaluation of evidence or factual findings supported by substantial evidence.
• Grave Abuse of Discretion: Partly. The Secretary committed grave abuse only in refusing to resolve the union security clause; the other assailed resolutions are affirmed absent clear whimsicality, capriciousness, or arbitrariness.
• Wage Increase: No. The 14%, 14%, 13% award and P15.00 meal subsidy were supported by substantial evidence and reasonable factors; the union failed to show grave abuse.
• Union Security Clause: Yes. The Secretary gravely abused discretion in refusing to resolve a submitted and essentially involved issue; the matter is remanded to the DOLE for definite resolution.
• New Retirement Plan: No. The Secretary respected the employees' free and voluntary one-time option to remain under the Old Plan; the union cannot impose its will on purely personal and individual matters.
• Grievance Machinery and Arbitration: No. The prescribed procedure complied with Article 260's minimum requirements; no particular setup is mandated, and the number of arbitrators may be left to the parties.
• Signing Bonus: No. A signing bonus is not a demandable benefit and was conditioned on a non-strike; the condition was not met, and the company did not agree to it.

• Scope of Certiorari: Rule 65 is a special civil action available only in truly exceptional cases where the action of an inferior court, board, or officer performing judicial or quasi-judicial acts is challenged as wholly void on grounds of jurisdiction. Its sole office is the correction of errors of jurisdiction, including grave abuse of discretion amounting to lack or excess of jurisdiction. It does not include correction of the evaluation of evidence and factual findings. Factual findings of quasi-judicial agencies such as the Department of Labor and Employment, when supported by substantial evidence, are binding and entitled to great respect and even finality because of these agencies' expertise. Substantial evidence is such relevant evidence as a reasonable mind will accept as adequate to justify a conclusion. No question of jurisdiction was raised; petitioner sought a judicial re-evaluation of the adequacy of the evidence, which is beyond certiorari. Judicial review in labor cases is limited to issues of jurisdiction or grave abuse of discretion. Flores vs. National Labor Relations Commission was cited for these principles.
• Grave Abuse of Discretion: The Court reviewed the assailed Orders and concluded that, other than the failure to rule on the union security clause, the Secretary cannot be indicted for grave abuse of discretion. Grave abuse exists where the respondent board, tribunal, or officer exercising judicial functions exercised judgment in a capricious, whimsical, arbitrary, or despotic manner; where the petitioner's contention appears clearly tenable or the broader interest of justice or public policy requires; or where the officer fails to consider evidence adduced by the parties. Saballa vs. National Labor Relations Commission requires that decisions clearly and distinctly state the facts and the law on which they are based, as a requirement of due process and fair play. The Court found that requirement sufficiently met. Petitioner's claim of grave abuse was anchored on the simple fact that the Secretary adopted largely the proposals of private respondent. Bargaining is not equivalent to adversarial litigation where rights and obligations are delineated and remedies applied; it is a process of finding a reasonable solution to a conflict and harmonizing opposite positions into a fair and reasonable compromise. When parties agree to submit unresolved issues to the Secretary for resolution, they should not expect their positions to be adopted in toto. Unless they clearly demonstrate bias, arbitrariness, capriciousness, or personal hostility, the Court will not interfere or substitute the Secretary's judgment with its own. CBA controversies rarely involve legal right or wrong, but rather wisdom, cogency, and compromise as to what is possible, fair, and reasonable under the circumstances.
• Wage Increase: The Secretary awarded 14% effective August 1, 1995, 14% effective August 1, 1996, and 13% effective August 1, 1997, plus a P15.00 meal subsidy. Petitioner belittled the award and insisted on a 15%/15%/15% increase based on inflation, Caltex's financial capacity, and parity with Shell. The Court found no grave abuse. First, the inflation issue was addressed in the November 21, 1995 Order: contrary to petitioner's undocumented claim of 11.8% inflation in September 1995, the average inflation for the first ten months was only 7.496%, and Central Bank projections indicated that it would take 13.5% inflation for November and December to record an average of 8.5% for the year. Second, private respondent's financial capacity was not established by the Banaba Housing upgrading; that project was not a yardstick of capacity to pay but a business judgment to survive and remain globally competitive, and the standard proof of a company's financial standing is its financial statements duly audited by independent and credible external auditors. Third, the traditional parity in wages with Shell was flimsy and trivial; aside from bare allegations of similarity in salaries and locations, petitioner proffered no substantial reason to impute grave abuse. Private respondent's explanation was reasonable: Shell produced 155,000 barrels per day with a 120-manpower complement of operatives and rank-and-file, while Caltex produced only 65,000 barrels per day with 221 manpower; Shell's overtime rate was 37% of base pay, while the union's was 102%. The issue was productivity, not sales. The awarded increase would result in an average basic salary of P23,510.00 at the end of the three-year cycle, which was excessive and disproportionately high compared with the value of the jobs; even before the DOLE-awarded increases, the union members had an average monthly salary of P16,010.00 plus overtime, holiday, and other premiums, making them the highest paid in the Philippines in terms of gross income. Petitioner did not rebut the productivity argument. No grave abuse was shown.
• Union Security Clause: The Secretary declined to modify the existing union security clause, stating that the proposed amendment gave the same substantial effect as the existing provision, that it dealt more with procedure already provided in the union's constitution and by-laws, that union security was sufficiently addressed by the present CBA provisions, that he was not competent to arbitrarily incorporate any modification, and that any amendment should be a product of mutual agreement. The Court agreed with petitioner. The disagreement between the parties on the union security clause should have been definitively resolved by the Secretary. The labor secretary should take cognizance of an issue which is not merely incidental to but essentially involved in the labor dispute itself, or which is otherwise submitted to him for resolution. The parties had submitted the issue for the Secretary's disposition, but he gave no valid reason for avoiding it; he merely pointed out that it was a procedural matter. Such vacillation sidestepped the nature of the union security clause as one intended to strengthen the contracting union and protect it from the fickleness or perfidy of its own members. Without such safeguard, group solidarity becomes uncertain; the union becomes gradually weakened and increasingly vulnerable to company machinations. The clause provides labor with substantial power in collective bargaining. The Secretary assumed jurisdiction over the labor dispute in an industry indispensable to national interest precisely to settle once and for all the disputes over which he has jurisdiction at his level. In not performing his duty, he committed grave abuse of discretion. St. Scholastica's College vs. Torres was cited for the rule that the labor secretary should take cognizance of an issue essentially involved in the labor dispute or submitted for resolution.
• New Retirement Plan: The Secretary ruled that the New Retirement Plan did not apply to about 40 employees who had previously been granted the option to choose between the old and new plans and who chose the Old Plan. To accede to the union's demand would entail a different arrangement under a new scheme and would require the approval of a Board of Trustees. Petitioner argued that the exclusion was grave abuse because it took away what had been given, rested on a shallow reason, and perpetuated a discriminatory practice. The Court held that the Secretary did not commit grave abuse in respecting the free and voluntary decision of the employees regarding the Provident Plan and the irrevocable one-time option under the New Retirement Plan. Although the union has every right to represent its members in negotiating the terms and conditions of employment, it cannot negate their wishes on matters that are purely personal and individual to them. The 40 employees freely opted to be covered by the Old Plan; the company gave them every opportunity to choose, and they voluntarily exercised their choice. The union cannot pretend to know better and cannot impose its will on them.
• Grievance Machinery and Arbitration: The Secretary shortened the periods for processing grievances from 45 days to 30 days at the first step and from 10 days to 7 days at the second step, which was the level of the Vice President for Manufacturing. He found that establishing a joint council as an additional step would only protract the proceeding and was no longer necessary. Instead, an unresolved grievance not settled within 7 days at the level of the Vice President for Manufacturing would automatically be referred by both parties to voluntary arbitration in accordance with RA 6715. The number of arbitrators was left to the agreement of both parties, and the list of accredited voluntary arbitrators was maintained and disseminated by the NCMB rather than the Bureau of Labor Relations. Petitioner argued that this derailed its proposed scheme, which included a Grievance Settlement Council to supplement the Vice President's review and a single arbitrator to minimize expense. The Court found no grave abuse. No particular setup for a grievance machinery is mandated by law. Article 260 of the Labor Code, as incorporated by RA 6715, provides for a single grievance machinery in the company to settle problems arising from the interpretation or implementation of the CBA and from the interpretation or enforcement of company personnel policies. All grievances submitted to the grievance machinery which are not settled within seven calendar days from submission shall automatically be referred to voluntary arbitration prescribed in the CBA. The parties shall name and designate in advance a voluntary arbitrator or panel of voluntary arbitrators, or include in the agreement a procedure for selecting such arbitrator or panel, preferably from the list of qualified voluntary arbitrators duly accredited by the Board. If the parties fail to select, the Board shall designate the voluntary arbitrator or panel pursuant to the selection procedure agreed upon in the CBA. The procedure described by the Secretary sufficiently complied with the minimum requirement of the law; he even provided for two steps in hearing grievances prior to referral to arbitration. The parties will decide on the number of arbitrators only when the need arises. The law itself does not specify the number of arbitrators. The alternatives of one or three arbitrators have their respective advantages and disadvantages; cost is not the only consideration, and full deliberation on the issues is another, best accomplished in a hearing conducted by three arbitrators. The parties are afforded latitude to decide the composition of the grievance machinery. No grave abuse was imputed.
• Signing Bonus: The Secretary ruled that the signing bonus was not covered by the maintenance of existing benefits clause. Despite the express provision for a signing bonus in the previous CBA, he upheld the principle that the award for a signing bonus should partake of the nature of an incentive and premium for peaceful negotiations and amicable resolution of disputes, which were not present in the instant case. Petitioner asserted that the signing bonus was an existing benefit embodied in the old CBA and was given not only as an incentive for peaceful negotiations and amicable settlement but also as an extra award to workers following settlement of a CBA dispute by whatever means. Private respondent disagreed, contending that a signing bonus is not awarded when CBA negotiations result in a strike; the grant is discretionary and cannot be demanded as a matter of right; and the bonus is meant as an incentive for peaceful negotiation, so once the negotiations resulted in an illegal strike, the basis or rationale for the award was lost. The Court held that the signing bonus was proposed by petitioner but was not accepted by private respondent. A signing bonus is not a benefit which may be demanded under the law. It was claimed under the principle of maintenance of existing benefits of the old CBA, but it may not be demanded as a matter of right. If it is not agreed upon by the parties or unilaterally offered as an additional incentive by private respondent, the condition for awarding it must be duly satisfied. In the present case, the condition sine qua non for its grant — a non-strike — was not complied with. Private respondent's counter-proposal also stated that benefits not expressly provided in the new agreement would be deemed purely discretionary or acts of grace, and its waiver clause stated that the parties waived the right to bargain on subjects not covered in the agreement. No grave abuse was shown.

• Grave abuse of discretion — Grave abuse of discretion amounting to lack or excess of jurisdiction exists where the respondent board, tribunal, or officer exercising judicial or quasi-judicial functions exercised judgment in a capricious, whimsical, arbitrary, or despotic manner; where the petitioner's contention appears clearly tenable or the broader interest of justice or public policy requires; or where the officer fails to consider evidence adduced by the parties. The Court applied this doctrine to hold that the Secretary committed grave abuse only in refusing to resolve the union security clause, while his other resolutions were not tainted by grave abuse.
• Certiorari under Rule 65 in labor cases — A petition for certiorari under Rule 65 is an extraordinary remedy available only in truly exceptional cases where the action of an inferior court, board, or officer performing judicial or quasi-judicial acts is challenged as wholly void on grounds of jurisdiction. Its sole office is the correction of errors of jurisdiction, including grave abuse of discretion amounting to lack or excess of jurisdiction; it does not include correction of the evaluation of evidence and factual findings. The Court applied this doctrine in refusing to re-evaluate the Secretary's factual findings on wage increase, retirement, grievance machinery, and signing bonus.
• Substantial evidence in labor cases — Substantial evidence is such amount of relevant evidence which a reasonable mind will accept as adequate to justify a conclusion. Factual findings of quasi-judicial agencies such as the Department of Labor and Employment, when supported by substantial evidence, are binding on the Court and entitled to great respect and even finality because of the agencies' expertise. The Court applied this doctrine in upholding the Secretary's factual findings on inflation, financial capacity, productivity, retirement option, and grievance procedure.
• Union security clause — A union security clause is intended to strengthen the contracting union and protect it from the fickleness or perfidy of its own members. Without such safeguard, group solidarity becomes uncertain, and the union becomes gradually weakened and increasingly vulnerable to company machinations. It provides labor with substantial power in collective bargaining. The Court applied this doctrine to hold that the Secretary, having assumed jurisdiction over the labor dispute, gravely abused discretion in refusing to resolve the submitted union security clause issue.
• Respect for individual employees' retirement option — Although a union has the right to represent its members in negotiating terms and conditions of employment, it cannot negate their wishes on matters that are purely personal and individual to them. The Court applied this doctrine in upholding the Secretary's ruling that about 40 employees who freely opted to remain under the Old Retirement Plan should not be forced into the New Retirement Plan against their choice.
• Grievance machinery and voluntary arbitration under Article 260 — No particular setup for a grievance machinery is mandated by law. Article 260 of the Labor Code, as amended by RA 6715, requires a single grievance machinery in the company to settle problems arising from the interpretation or implementation of the CBA and from the interpretation or enforcement of company personnel policies. All grievances not settled within seven calendar days from submission shall automatically be referred to voluntary arbitration. The parties shall name and designate a voluntary arbitrator or panel, or include a procedure for selection; if they fail, the Board shall designate one. The Court applied this doctrine in holding that the Secretary's prescribed procedure complied with the minimum requirements of the law.
• Signing bonus as a non-demandable incentive — A signing bonus is not a benefit which may be demanded under the law. It partakes of the nature of an incentive and premium for peaceful negotiations and amicable resolution of disputes. If it is not agreed upon by the parties or unilaterally offered as an additional incentive by the employer, the condition for awarding it must be duly satisfied. The Court applied this doctrine in holding that the signing bonus was not covered by the maintenance of existing benefits clause because the condition sine qua non — a non-strike — was not complied with.
• Collective bargaining as compromise, not adversarial litigation — Bargaining is not equivalent to adversarial litigation where rights and obligations are delineated and remedies applied; it is a process of finding a reasonable solution to a conflict and harmonizing opposite positions into a fair and reasonable compromise. When parties agree to submit unresolved issues to the Secretary of Labor for resolution, they should not expect their positions to be adopted in toto. The Court applied this doctrine in refusing to strike down the Secretary's resolutions merely because he adopted largely the proposals of private respondent.
• Financial capacity and wage parity — The standard proof of a company's financial standing is its financial statements duly audited by independent and credible external auditors. A claim of wage parity with another company requires a showing that the two companies are similar in substantial aspects; productivity, not sales, is the relevant consideration. The Court applied this doctrine in rejecting the union's reliance on the Banaba Housing upgrading and on Shell's wage levels.

• "Unless shown to be clearly whimsical, capricious or arbitrary, the orders or resolutions of the secretary of labor and employment resolving conflicts on what should be the contents of a collective bargaining agreement will be respected by this Court." — This passage states the standard of review governing the Secretary of Labor's CBA deadlock resolutions and frames the Court's deferential approach to the assailed Orders.
• "The labor secretary should take cognizance of an issue which is not merely incidental to but essentially involved in the labor dispute itself, or which is otherwise submitted to him for resolution." — This is the ratio decidendi for the union security clause issue; it defines the Secretary's duty to resolve submitted and essentially involved issues once jurisdiction has been assumed.
• "In not performing his duty, the secretary of labor committed a grave abuse of discretion." — This passage states the Court's conclusion that the Secretary's refusal to resolve the union security clause constituted grave abuse of discretion, the sole ground for partially granting the petition.
• "A signing bonus is not a benefit which may be demanded under the law." — This passage defines the nature of a signing bonus and supports the Court's holding that it was not covered by the maintenance of existing benefits clause because the non-strike condition was not met.

• Flores vs. National Labor Relations Commission, 253 SCRA 494 (1996) — Cited for the rule that certiorari under Rule 65 is an extraordinary remedy limited to the correction of errors of jurisdiction, including grave abuse of discretion, and does not include correction of the evaluation of evidence and factual findings.
• Saballa vs. National Labor Relations Commission, 260 SCRA 697 (1996) — Cited for the requirement that judges and arbiters draw up decisions and resolutions with due care, clearly and distinctly stating the facts and the law on which they are based, as a requirement of due process and fair play; also cited for the rule that findings of fact supported by substantial evidence are entitled to great respect and even finality.
• St. Scholastica's College vs. Torres, 210 SCRA 565 (1992) — Cited for the rule that the labor secretary should take cognizance of an issue which is not merely incidental to but essentially involved in the labor dispute itself, or which is otherwise submitted to him for resolution.
• Association of Marine Officers and Seaman of Reyes and Lim Co. vs. Laguesma, 239 SCRA 460 (1991) — Cited for the rule that factual findings of quasi-judicial agencies, when supported by substantial evidence, are binding on the Court and entitled to great respect considering the expertise of these agencies in their respective fields.
• Madlos vs. National Labor Relations Commission, 254 SCRA 248 (1996) — Cited for the definition of substantial evidence in labor cases as such amount of relevant evidence which a reasonable mind will accept as adequate to justify a conclusion.
• Philippine Airlines, Inc. vs. Confessor, 231 SCRA 41 (1994) — Cited for the definition of grave abuse of discretion, including the circumstances under which it is committed by a board, tribunal, or officer exercising judicial functions.
• Social Security System vs. SSS Supervisors' Union, 117 SCRA 746 (1982) — Cited for the principle of "a fair day's wage for a fair day's work" in the context of the wage increase issue.
• Lopez Sugar Corporation vs. Federation of Free Workers, 189 SCRA 179 (1990) — Cited for the standard proof of a company's financial standing, namely financial statements duly audited by independent and credible external auditors.

• Article 263(g), Labor Code — Authorizes the Secretary of Labor and Employment to assume jurisdiction over a labor dispute in an industry indispensable to national interest and to enjoin any strike or lockout. The Secretary invoked this provision in assuming jurisdiction over the entire Caltex labor dispute and enjoining any actual or intended strike or lockout.
• Article 260, Labor Code, as amended by RA 6715 — Requires parties to a CBA to include provisions ensuring mutual observance of its terms and conditions and to establish a machinery for the adjustment and resolution of grievances arising from the interpretation or implementation of the CBA and from the interpretation or enforcement of company personnel policies. All grievances not settled within seven calendar days from submission shall automatically be referred to voluntary arbitration. The parties shall name and designate a voluntary arbitrator or panel, or include a procedure for selection, preferably from the list of qualified voluntary arbitrators accredited by the Board; if they fail to select, the Board shall designate one. The Court applied this provision in holding that the Secretary's prescribed grievance procedure complied with the minimum requirements of the law.
• Rule 65, Rules of Court — Governs the special civil action for certiorari. The Court applied this provision in holding that the remedy is limited to errors of jurisdiction or grave abuse of discretion and does not permit re-evaluation of the sufficiency of evidence or factual findings.
• Section 5, Rule 133, Rules of Court — Defines substantial evidence as such relevant evidence as a reasonable mind will accept as adequate to justify a conclusion. The Court applied this standard in labor cases and in assessing the Secretary's factual findings.
• Article 249(a), Labor Code — Provides that it is an unfair labor practice for a labor organization to restrain or coerce employees in the exercise of their right to self-organization, but a labor organization has the right to prescribe its own rules with respect to the acquisition or retention of membership. Private respondent invoked this provision in opposing the union security clause; the Court did not rest its ruling on it, instead holding that the Secretary should have resolved the submitted union security clause issue.

Narvasa, C.J., Romero, Melo and Francisco, JJ., concur.