Manila Jockey Club Employees Labor Union-PTGWO vs. Manila Jockey Club, Inc.

A CBA clause fixing a work schedule does not, by itself, waive management’s prerogative to change that schedule where another CBA clause expressly reserves the right to change work schedules; and overtime pay does not constitute a benefit under Article 100 of the Labor Code where it is not guaranteed but is paid only for additional services rendered upon management instruction.

Petitioner Manila Jockey Club Employees Labor Union-PTGWO is the bargaining representative of respondent Manila Jockey Club, Inc.’s regular monthly-paid rank-and-file employees. Respondent is a corporation with a legislative franchise to conduct, operate, and maintain horse races. The parties were covered by a Collective Bargaining Agreement effective January 1, 1996 to December 31, 2000, which governed the economic rights and obligations of those employees and contained both a work-schedule provision and a management-prerogative provision. The CBA also provided for voluntary arbitration of conflicts arising from those provisions.

Petitioner Manila Jockey Club Employees Labor Union-PTGWO was the bargaining representative of the regular monthly-paid rank-and-file employees of respondent Manila Jockey Club, Inc., a corporation with a legislative franchise to conduct, operate, and maintain horse races. The parties entered into a Collective Bargaining Agreement effective January 1, 1996 to December 31, 2000, which governed the economic rights and obligations of those employees. Section 1, Article IV of the CBA fixed a seven-hour work schedule from 9:00 a.m. to 12:00 noon and from 1:00 p.m. to 5:00 p.m. on a work week of Monday to Saturday, and provided that all work performed in excess of seven hours and on days not included within the work week shall be considered overtime and paid as such. Section 2, Article XI of the CBA reserved to respondent certain management prerogatives, including the right to change existing methods or facilities to change schedules of work and to relieve employees from duty because of lack of work, subject to the condition that these rights not be used to discriminate against employees because of union membership and subject to pertinent directives, proclamations, and implementing rules.

On April 3, 1999, respondent issued an inter-office memorandum declaring that, effective April 20, 1999, the hours of work of regular monthly-paid employees shall be from 1:00 p.m. to 8:00 p.m. when horse races are held, that is, every Tuesday and Thursday. The memorandum maintained the 9:00 a.m. to 5:00 p.m. schedule for non-race days.

On October 12, 1999, petitioner and respondent entered into an Amended and Supplemental CBA retaining Section 1 of Article IV and Section 2 of Article XI and clarifying that any conflict arising therefrom shall be referred to a voluntary arbitrator for resolution. Petitioner subsequently questioned the office memorandum before a panel of voluntary arbitrators of the National Conciliation and Mediation Board, claiming that it violated the prohibition against non-diminution of wages and benefits guaranteed under Section 1, Article IV, of the CBA, which specified the work schedule of respondent's employees to be from 9:00 a.m. to 5:00 p.m. Petitioner claimed that as a result of the memorandum, the employees were precluded from rendering their usual overtime work from 5:00 p.m. to 9:00 p.m.

Respondent, for its part, cited the change in the program of horse races as the reason for the adjustment. It rationalized that when the CBA was signed, the horse races started at 10:00 a.m.; when the races were moved to 2:00 p.m., management had no other choice but to change the employees' work schedule because there was no work to be done in the morning. The dispute was thereafter submitted to voluntary arbitration.

• Relinquishment of Management Prerogative: Petitioner argued that the Court of Appeals erred in holding that respondent Manila Jockey Club, Inc. did not relinquish part of its management prerogative when it stipulated a work schedule in the CBA. It maintained that the CBA’s fixed 9:00 a.m. to 5:00 p.m. schedule under Section 1, Article IV, should be read as a limitation on respondent’s right to change the work schedule.
• Non-Diminution of Benefits: Petitioner argued that the change in work schedule violated Article 100 of the Labor Code because it resulted in the diminution of the benefit enjoyed by regular monthly-paid employees of rendering overtime work with pay. It claimed that the employees were precluded from their usual overtime work from 5:00 p.m. to 9:00 p.m.

• Changed Race Program: Respondent cited the change in the program of horse races as the reason for the adjustment. It rationalized that when the CBA was signed, horse races started at 10:00 a.m.; when the races were moved to 2:00 p.m., there was no other choice for management but to change the employees’ work schedule because there was no work to be done in the morning.
• Management Prerogative: Respondent relied on Section 2, Article XI, of the CBA, which expressly reserved to it the prerogative to change existing methods or facilities to change schedules of work and to relieve employees from duty because of lack of work.

• Management Prerogative / CBA Work Schedule: Whether the Court of Appeals erred in holding that respondent Manila Jockey Club, Inc. did not relinquish part of its management prerogative when it stipulated a work schedule in the CBA.
• Non-Diminution of Benefits: Whether the Court of Appeals erred in holding that respondent did not violate the non-diminution provision contained in Article 100 of the Labor Code.

• Management Prerogative / CBA Work Schedule: No. Section 2, Article XI, of the CBA expressly reserved respondent’s prerogative to change work schedules; the stipulation of a work schedule in Section 1, Article IV, did not waive that prerogative.
• Non-Diminution of Benefits: No. Overtime pay is not a benefit under Article 100 of the Labor Code because Section 1, Article IV, did not guarantee overtime work; overtime was paid only for additional services rendered upon management instruction.

• Management Prerogative / CBA Work Schedule: The CBA’s Section 2, Article XI expressly reserved to respondent the prerogative to change existing methods or facilities to change schedules of work. The Court adopted the Court of Appeals’ interpretation that while respondent allowed the initial determination of the work schedule through collective bargaining, it expressly retained the prerogative to change it. No waiver could be inferred because Section 2, Article XI made specific reference to the retention of that prerogative; had waiver been intended, the CBA would have expressly prohibited its exercise. The adjustment was also justified by the change in the horse-race program: when the CBA was signed, races started at 10:00 a.m.; when they were moved to 2:00 p.m., there was no work to be done in the morning. Management is free to regulate all aspects of employment, including time, place, and manner of work, and the Court will not interfere with business judgment absent violation of law, CBA, or general principles of justice and fair play. The same provision also granted respondent the prerogative to relieve employees from duty because of lack of work.
• Non-Diminution of Benefits: Section 1, Article IV, did not guarantee overtime work for all employees; it merely provided that all work performed in excess of seven hours and on days not included in the work week shall be considered overtime and paid as such. Respondent was not obliged to allow all employees to render overtime every day for the whole year, but only those whose services were needed after regular working hours and only upon management instructions. Overtime pay was not given consistently, deliberately, and unconditionally, but as compensation for additional services rendered. Thus, overtime pay does not fall within the definition of benefits under Article 100 of the Labor Code. The Court also noted that while the Constitution is committed to social justice and protection of the working class, not every labor dispute is automatically decided in favor of labor; justice is for the deserving based on established facts, applicable law, and doctrine.

• Management prerogative — An employer is free to regulate, according to its own discretion and judgment, all aspects of employment, including hiring, work assignments, working methods, time, place and manner of work, processes to be followed, supervision of workers, working regulations, transfer of employees, work supervision, layoff of workers, discipline, dismissal, and recall of workers. The Court will not interfere with the business judgment of an employer in the exercise of its prerogative to devise means to improve its operation, provided that it does not violate the law, CBAs, and the general principles of justice and fair play. Applied: respondent’s adjustment of the work schedule due to the change in the horse-race program was upheld.
• Non-waiver of management prerogative by CBA work-schedule stipulation — A CBA provision fixing a work schedule does not necessarily waive management’s prerogative to change it where another CBA provision expressly reserves that prerogative. Applied: Section 1, Article IV’s 9:00 a.m. to 5:00 p.m. schedule did not waive Section 2, Article XI’s reservation of the right to change work schedules.
• Non-diminution of benefits under Article 100 of the Labor Code — Article 100 prohibits the elimination or diminution of benefits. Overtime pay is not a benefit within its coverage where it is not guaranteed to all employees, is not given consistently, deliberately, and unconditionally, and is paid only as compensation for additional services rendered upon management instruction. Applied: the loss of overtime opportunities following the schedule change did not violate Article 100.
• Social justice is not automatic for labor — While the Constitution is committed to the policy of social justice and the protection of the working class, it should not be presumed that every labor dispute will be automatically decided in favor of labor; justice in every case is for the deserving, to be dispensed in light of established facts, applicable law, and doctrine. Applied: the union’s petition was denied despite the labor context.

• "Such exact language lends no other meaning but that while respondent may have allowed the initial determination of the work schedule to be done through collective bargaining, it expressly retained the prerogative to change it." — This passage, quoted by the Court from the Court of Appeals, states the ratio for rejecting the claim that the CBA work-schedule stipulation waived management’s prerogative to change schedules.
• "Respondent was not obliged to allow all its employees to render overtime work everyday for the whole year, but only those employees whose services were needed after their regular working hours and only upon the instructions of management." — This defines why overtime work was not a guaranteed benefit and supports the ruling that the schedule change did not diminish a protected benefit.
• "The overtime pay was not given to each employee consistently, deliberately and unconditionally, but as a compensation for additional services rendered. Thus, overtime pay does not fall within the definition of benefits under Article 100 of the Labor Code on prohibition against elimination or diminution of benefits." — This is the core holding on the non-diminution issue.
• "While the Constitution is committed to the policy of social justice and the protection of the working class, it should not be presumed that every labor dispute will be automatically decided in favor of labor." — This states the Court’s caution that social justice does not automatically resolve labor disputes for labor.

• United Kimberly-Clark Employees Union-Philippine Transport General Workers' Organization (UKCEU-PTGWO) vs. Kimberly-Clark Philippines, Inc., G.R. No. 162957, March 6, 2006, 484 SCRA 187 — Cited in support of the rule that management is free to regulate all aspects of employment according to its own discretion and judgment, including time, place, and manner of work.
• Abella vs. Philippine Long Distance Telephone Company, G.R. No. 159469, June 8, 2005, 459 SCRA 724 — Cited for the principle that while the Constitution protects labor, not every labor dispute is automatically decided in favor of labor; justice is for the deserving based on established facts, applicable law, and doctrine.

• Section 1, Article IV, Collective Bargaining Agreement — Fixed the seven-hour work schedule from 9:00 a.m. to 12:00 noon and 1:00 p.m. to 5:00 p.m. on a work week of Monday to Saturday, and provided that work in excess of seven hours and on days not included in the work week shall be considered overtime and paid as such. The Court held that this provision did not guarantee overtime work or waive respondent’s prerogative to change schedules.
• Section 2, Article XI, Collective Bargaining Agreement — Reserved to respondent exclusive control in the management of offices and direction of employees, including the right to change existing methods or facilities to change schedules of work and to relieve employees from duty because of lack of work. The Court relied on this provision to uphold the April 3, 1999 memorandum.
• Article 100, Labor Code — Prohibits the elimination or diminution of benefits. The Court held that overtime pay does not fall within its coverage because it was not consistently, deliberately, and unconditionally given but was compensation for additional services rendered upon management instruction.
• Rule 45, Rules of Court — The petition was filed as a petition for review under Rule 45 of the Rules of Court. The Court denied the petition and affirmed the Court of Appeals decision and resolution.

Reynato S. Puno (Chief Justice, Chairperson), Angelina Sandoval-Gutierrez, Renato C. Corona, and Adolfo S. Azcuna concurred.