SECOND DIVISION [G.R. No. 109002. April 12, 2000.] DELA SALLE UNIVERSITY, petitioner, vs.

DELA SALLE UNIVERSITY EMPLOYEES ASSOCIATION (DLSUEA) and BUENAVENTURA MAGSALIN, respondents. [G.R. No. 110072. April 12, 2000.] DELA SALLE UNIVERSITY EMPLOYEES ASSOCIATION-NATIONAL FEDERATION OF TEACHERS AND EMPLOYEES UNION (DLSUEA-NAFTEU), petitioner, vs. DELA SALLE UNIVERSITY and BUENAVENTURA MAGSALIN, respondents. Angara Abello Concepcion Regala & Cruz for petitioner DLSU. Emelito A. Licerio for the Union. SYNOPSIS Assailed in these two petitions for certiorari is the Decision of Voluntary Arbitrator Buenaventura Magsalin, dated January 19, 1993, as having been rendered with grave abuse of discretion amounting to lack or excess of jurisdiction. On the first issue involving the scope of the bargaining unit, the voluntary arbitrator ruled that the computer operators assigned at the University's Computer Services Center and the University's discipline officers are not confidential employees. Hence, they should be included in the bargaining unit of rank-and-file employees. With respect to employees of the College of St. Benilde, the voluntary arbitrator found that the College of St. Benilde has a personality separate and distinct from the Dela Salle University and thus, they should be excluded from the bargaining unit of the rank-and-file employees of the University. On the second issue involving union security clause, the voluntary arbitrator ruled for the inclusion of a union shop provision in addition to the existing maintenance of membership clause in the collective bargaining agreement. HcTIDC On the third issue regarding the Union's proposal for the use of the last-in-first-out method in case of lay-off, termination due to retrenchment and transfer of employees, the voluntary arbitrator upheld the right and prerogative of the management to select and transfer or reassign its employees. On the fourth issue concerning salary increases for the second and third years of the CBA, the voluntary arbitrator ruled that on the basis of the University's proposed budget, the University can no longer be required to grant a second round of wage increases for the school years 1991-92 and 1992-93 and charge the same to the incremental proceeds.

On the fifth issue involving the Union's proposal for the reduction of the workload of the union president, improved leave benefits and indefinite union leave with pay, the voluntary arbitrator rejected the same. The Supreme Court agreed with voluntary arbitrator's assailed decision except that involving salary increases for the second and third years of the CBA. The Court held that financial capability of a company cannot be based on its proposed budget because a proposed budget does not reflect the true financial condition of a company, unlike audited financial statements, and more importantly, the use of a proposed budget as proof of a company's financial condition would be susceptible to abuse by scheming employers who might be merely feigning dire financial condition in their business ventures in order to avoid granting salary increases and fringe benefits to their employees. The assailed decision of the voluntary arbitrator is affirmed with the modification that the issue on salary increases for the second and third years of the CBA be remanded to the voluntary arbitrator for definite resolution on the basis of the externally audited financial statements of the University. SYLLABUS 1. REMEDIAL LAW; SPECIAL CIVIL ACTION; RULES IN PETITION FOR CERTIORARI INVOLVING LABOR CASES, CITED. As we reiterated in the case of Caltex Refinery Employees Association (CREA) vs. Jose S. Brillantes, the following are the well-settled rules in a petition for certiorari involving labor cases. "First, the factual findings of quasi-judicial agencies (such as the Department of Labor and Employment), when supported by substantial evidence, are binding on this Court and entitled to great respect, considering the expertise of these agencies in their respective fields. It is well-established that findings of these administrative agencies are generally accorded not only respect but even finality. "Second, substantial evidence in labor cases is such amount of relevant evidence which a reasonable mind will accept as adequate to justify a conclusion. "Third, in Flores vs. National Labor Relations Commission, we explained the role and function of Rule 65 as an extraordinary remedy: "It should be noted, in the first place, that the instant petition is a special civil action for certiorari under Rule 65 of the Revised Rules of Court. An extraordinary remedy, its use is available only and restrictively in truly exceptional cases those wherein the action of an inferior court, board or officer performing judicial or quasi-judicial acts is challenged for being wholly void on grounds of jurisdiction. The sole office of the writ of certiorari is the correction of errors of jurisdiction including the commission of grave abuse of discretion amounting to lack or excess of jurisdiction. It does not include correction of public respondent NLRC's evaluation of the evidence and factual findings based thereon, which are generally accorded not only great respect but even finality. "No question of jurisdiction whatsoever is being raised and/or pleaded in the case at bench. Instead, what is being sought is a judicial re-evaluation of the adequacy or inadequacy of the evidence on record, which is certainly beyond the province of the extraordinary writ of certiorari. Such demand is impermissible for it would involve this Court in determining what evidence is entitled to belief and the weight to be assigned it. As we have reiterated countless times, judicial review by this Court in labor cases does not go so far as to evaluate the sufficiency of the evidence upon which the proper labor officer or office based his or its determination but is limited only to issues of jurisdiction or grave abuse of discretion amounting to lack of jurisdiction."

2. LABOR AND SOCIAL LEGISLATION; LABOR RELATIONS; COLLECTIVE BARGAINING AGREEMENT; DURING FREEDOM PERIOD, PARTIES MAY PROPOSE AND DISCUSS MODIFICATIONS OR AMENDMENTS THERETO; COMPUTER OPERATOR AND DISCIPLINE OFFICERS ARE NOT CONFIDENTIAL EMPLOYEES AND SHOULD BE INCLUDED IN BARGAINING UNIT OF RANK-AND-FILE EMPLOYEES; CASE AT BAR. The University's arguments on the first issue fail to impress us. The Court agrees with the Solicitor General that the express exclusion of the computer operators and discipline officers from the bargaining unit of rank-and-file employees in the 1986 collective bargaining agreement does not bar any re-negotiation for the future inclusion of the said employees in the bargaining unit. During the freedom period, the parties may not only renew the existing collective bargaining agreement but may also propose and discuss modifications or amendments thereto. With regard to the alleged confidential nature of the said employees' functions, after a careful consideration of the pleadings filed before this Court, we rule that the said computer operators and discipline officers are not confidential employees. As carefully examined by the Solicitor General, the service record of a computer operator reveals that his duties are basically clerical and non-confidential in nature. As to the discipline officers, we agree with the voluntary arbitrator that based on the nature of their duties, they are not confidential employees and should therefore be included in the bargaining unit of rank-and-file employees. 3. ID.; ID.; ID.; NO SUFFICIENT EVIDENCE TO JUSTIFY THE PIERCING OF VEIL OF CORPORATE FICTION. The Court also affirms the findings of the voluntary arbitrator that the employees of the College of St. Benilde should be excluded from the bargaining unit of the rank-and-file employees of Dela Salle University, because the two educational institutions have their own separate juridical personality and no sufficient evidence was shown to justify the piercing of the veil of corporate fiction. TcEDHa 4. ID.; ID.; ID.; UNION SHOP PROVISION MAY BE INCLUDED THEREIN IN ADDITION TO EXISTING MAINTENANCE CLAUSE. We affirm the ruling of the voluntary arbitrator for the inclusion of a union shop provision in addition to the existing maintenance of membership clause in the collective bargaining agreement. As the Solicitor General asserted in his consolidated Comment, the University's reliance on the case of Victoriano vs. Elizalde Rope Workers' Union is clearly misplaced. In that case, we ruled that ". . . the right to join a union includes the right to abstain from joining any union. . . . . The right to refrain from joining labor organizations recognized by Section 3 of the Industrial Peace Act is, however, limited. The legal protection granted to such right to refrain from joining is withdrawn by operation of law, where a labor union and an employer have agreed on a closed shop, by virtue of which the employer may employ only members of the collective bargaining union, and the employees must continue to be members of the union for the duration of the contract in order to keep their jobs. . . ." 5. ID.; ID.; TERMINATION OF EMPLOYMENT; EMPLOYER IS FREE TO REGULATE ALL ASPECTS OF EMPLOYMENT EXCEPT AS PROVIDED FOR OR LIMITED BY SPECIAL LAWS. We agree with the voluntary arbitrator that as an exercise of management prerogative, the University has the right to adopt valid and equitable grounds as basis for terminating or transferring employees. As we ruled in the case of Autobus Workers' Union (AWU) and Ricardo Escanlar vs. National Labor Relations Commission, "[a] valid exercise of management prerogative is one which, among others, covers: work assignment, working methods, time, supervision of workers, transfer of employees, work supervision, and the discipline, dismissal and

recall of workers. Except as provided for, or limited by special laws, an employer is free to regulate, according to his own discretion and judgment, all aspects of employment." 6. ID.; ID.; FINANCIAL CAPABILITY OF A COMPANY CANNOT BE BASED ON ITS PROPOSED BUDGET; CASE AT BAR. On the fourth issue involving the voluntary arbitrator's ruling that on the basis of the University's proposed budget, the University can no longer be required to grant a second round of wage increases for the school years 1991-92 and 1992-93 and charge the same to the incremental proceeds, we find that the voluntary arbitrator committed grave abuse of discretion amounting to lack or excess of jurisdiction. As we ruled in the case of Caltex Refinery Employees Association (CREA) vs. Jose S. Brillantes, ". . . [w]e believe that the standard proof of a company's financial standing is its financial statements duly audited by independent and credible external auditors." Financial statements audited by independent external auditors constitute the normal method of proof of profit and loss performance of a company. The financial capability of a company cannot be based on its proposed budget because a proposed budget does not reflect the true financial condition of a company, unlike audited financial statements, and more importantly, the use of a proposed budget as proof of a company's financial condition would be susceptible to abuse by scheming employers who might be merely feigning dire financial condition in their business ventures in order to avoid granting salary increases and fringe benefits to their employees. 7. ID.; ID.; LABOR UNION; DEMANDS THEREOF, REJECTED; NO JUSTIFIABLE REASON FOR THE GRANT; CASE AT BAR. On the fifth issue involving the Union's proposals on the deloading of the union president, improved leave benefits and indefinite union leave with pay, we agree with the voluntary arbitrator's rejection of the said demands, there being no justifiable reason for the granting of the same. 8. ID.; ID.; VOLUNTARY ARBITRATOR; DID NOT GRAVELY ABUSE HIS DISCRETION WHEN HE RULED THAT THE MULTI-SECTORAL COMMITTEE IS THE GROUP RESPONSIBLE FOR DETERMINING WAGE INCREASES AND FRINGE BENEFITS IN CASE AT BAR; DETERMINATION OF WAGE INCREASES MUST BE BASED ON DULY AUDITED FINANCIAL STATEMENTS. On the sixth issue regarding the finding that the multi-sectoral committee in the University is the legitimate group which determines and scrutinizes the annual salary increases and fringe benefits of the employees of the University, the Court finds that the voluntary arbitrator did not gravely abuse his discretion on this matter. From our reading of the assailed decision, it appears that during the parties' negotiations for a new collective bargaining agreement, the Union demanded for a 25% and 40% salary increase for the second and third years, respectively, of the collective bargaining agreement. The University's counter-proposal was for a 10% increase for the third year. After the meeting of the multi-sectoral committee on budget, which is composed of students, parents, faculty, administration and union, the University granted across-the-board salary increases of 11.3% and 19% for the second and third years, respectively. While the voluntary arbitrator found that the said committee ". . . decided to grant the said increases based on the University's viability which were exclusively sourced from the tuition fees. . . . ," no finding was made as to the basis of the committee's decision. Be that as it may, assuming for the sake of argument that the said committee is the group responsible for determining wage increases and fringe benefits, as ruled by the voluntary arbitrator, the committee's determination must still be based on duly audited financial statements following our ruling on the fourth issue. ICAcTa