17. Octavio v PLDT
Topic: D. Grievance Machinery & Voluntary Arbitration: 2. Submission to
voluntary arbitration/conciliation or mediation: (i. Jurisdiction)
Parties:
Octavio – Employee of PLDT
PLDT: Employer of Octavio
Gabay ng Unyon sa Telekomunikasyon ng mga Superbisor (GUTS) - Union
Doctrine:
The Court had no jurisdiction to interpret or Implement the CBA. The CBA
should be resolve according to the grievance procedure under law.
Recit-Ready
Octavio was hired as a regular employee by PLDT on Jan 1 2001. On May 31
2002, He was promoted and acquired an increase from 10,000-13,730 Php
salary. On May 2001, a CBA was entered between PLDT and GUTS to
retroact from January 1 2001 which provides for an increase in salary of all
employees. Octavio argued that he was deprived of the increase salary
under the law. Grievance Committee however found that Octavio was not
entitled to the Salary Increase. Hence, Octavio filed a complaint for salary
increase against PLDT. Affirming the ruling of the lower courts, the SC held
that he had no jurisdiction to resolve the issue of salary increase in the CBA.
The interpretation or implementation of CBA is resolved in accordance to
the procedure. The proper procedure according to the CBA was to submit
the Grievance Committee order to the Board of Arbitrators. Failing to accord
to proper procedure means Octavio waives his right to question the order
and is bound by them.
Facts:
1. On May 28, 1999, PLDT entered into a CBA with Guts providing for
increase in salary of
 10% or P2,000.00 whichever is higher effective January 1, 1999
 11% or P2,250.00 whichever is higher; effective January 1, 2000
 12% of or P2,500.00 whichever is higher; Effective January 1,
2001
2. On October 1, 2000, PLDT hired Octavio as a Sales System Analyst I
on probationary status.
3. He was a member of GUTS.
4. On January 1 2001, Octavio was regularized.
5. On May 31, 2002, PLDT and GUTS entered into another CBA
effective January 1, 2002 to December 31, 2004 which also provides
for a salary increase:
 8% or P2,000.00 whichever is higher for the first year (2002)
 10% or P2,700.00 whichever is higher for the second year
(2003)
 10% or P2,400.00 whichever is higher for the third year (2004).
6. Octavio argued that he is entitled to an increase in salary of 2,500
according to the previous CBA and 2,000 for the new CBA. And his
complaint was submitted to Human Resources.
7. During Grievance Committee Convention, which the
representatives of PLDT and GUTS attendee, the parties failed to
come into an agreement and as such the Grievance Committee
issued a resolution denying the increase of salary of Octavio
8. Octavio filed a complaint for salary increase as per CBA of 1999 to
2001 and 2002 to 2004.
9. Labor Arbiter held: dismissed the Complaint
10. NLRC Held: it has no jurisdiction to decide the issues, as the same
involved the interpretation and implementation of the CBA.
11. CA Held: The Grievance Committee Resolution is binding on
Octavio, he being a member of GUTS, and he failed to question its
validity and enforceability.
Issue: WON Octavio is entitled to a salary increase
Held:
 According Article 260 of the Labor Code, grievances arising from the
interpretation or implementation of the parties' CBA should be
resolved in accordance with the grievance procedure embodied
therein. The Court had no jurisdiction to interpret or Implement the
CBA. The CBA should be resolve according to the grievance
procedure under law.
 Under Article X of the CBA of 2002-2004 Sec 2, Octavio’s recourse
was to elevate his grievance to the Board of Arbitrators final
decision. Instead, nine months later, Octavio filed a Complaint
before the NLRC.
“Step 3. If the grievance is not settled either because of
deadlock or the failure of the committee to decide the matter,
 the grievance shall be transferred to a Board of Arbitrators for the
final decision….”

 According to Vivero v CA,

1. When parties validly agreed on a procedure for resolving
grievances and to submit a dispute to voluntary arbitration then
that procedure should be strictly observed.” Before a party is
allowed to seek the intervention of the court, he should have
availed of all the means of administrative processes afforded
him.
2. Premature invocation of court's judicial intervention is fatal to
one's cause of action."
3. The principle of on exhaustion of administrative remedies rests
on the presumption that when the administrative body, or
grievance machinery, is applicable to decide on the matter, it
will decide correctly.
 Octvio has waived his right to question the Committee resolution
when he failed to follow CBA procedure as elevate it to the Board
of Arbitrators.

Additional Note:
 Octavio cannot argue that the Grievance Committee resolution is
void for being a modification under Art 253 in Labor Code because
the resolution is based on grievance procedure outlined in the CBA.
Octavio never assailed competence of the grievance committee nor
authority or credibility of the union representatives.

 Octavio cannot claim diminution of benefits under Art 100 of the

Labor Code, because first Article 100 does not prohibit unions
offering and agreeing to reduce wages and benefits of the
employees as the right to free collective bargaining include the right
to suspend it and that the increase in salary of Octavio to 13,730
was to prevent salary distortion when the CBA was executed.