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G.R. No. 118069 November 16, 1998

PRODUCERS BANK OF THE PHIIPPINES, !"o# F$r%& P'$($))$"e I"&er"*&$o"*(

B*"+, petitioner,

vs. NRC *"- PRODUCERS BANK EPO/EES ASSOCIATION, respondents.

F*&%

Petitioner was placed by the Central Bank under a conservator for the purpose of protecting its

assets. It appears that when the private respondents sought the implementation of Section I,

Article I of the CBA regarding the retirement plan and Section !, Article thereof, pertaining to

uniform allowance, the acting conservator of the petitioner e"pressed her ob#ection to such plan,

resulting in an impasse between the petitioner bank and the private respondent union. $he

deadlock continued for at least si" months when the private respondent, to resolve the issue,

decided to %le a case against the petitioner for unfair labor practice and for &agrant violation of

the CBA provisions.

'abor Arbiter dismissed private respondent(s complaint, on this premise)

Considering that the Bank is under conservatorship program under which the bank is

under the rule of a conservator, the latter is under no compulsion to implement the

resolutions issued by the '*+C. If he %nds that the enforcement of the resolutions would

not redound for the best interest of the Bank in accordance with the conservatorship

program, he may not be faulted by such inaction or action.

 $he '+C, after reviewing the arguments of both parties, reversed the %ndings of the 'abor

Arbiter, thus)

ot only is the worker protected by the 'abor Code, he is likewise protected by other laws

-Civil Code and social legislations the source of which is the no less than the Constitution

itself. $o adhere %rst to the interest of the company to the pre#udice of the workers can

never be allowed or tolerated as the interest of the working masses is the paramount

concern of the government.

Conse/uently, the '+C ordered the petitioner to implement the provisions of the CBA which

were disallowed by the conservator.

I%%2e 01 the bank shall implement the provisions of the CBA regardless of the ob#ection of the

conservator.

He(- 23S

R*&$o

0hile admittedly, the Central Bank law gives vast and far4reaching powers to the conservator of

a bank, it must be pointed out that such powers must be related to the 5-reservation of the

assets of the bank, the reorgani6ation of the management thereof and the restoration of its

viability.5 Such powers, enormous and e"tensive as they are, cannot e"tend to the post4facto

repudiation of perfected transactions, otherwise they would infringe against the non4impairment

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clause of the Constitution. If the legislature itself cannot revoke an e"isting valid contract, how

can it delegate such non4e"istent powers to the conservator under Section 784A of said law9

:bviously, therefore, Section 784A merely gives the conservator power to revoke contracts that

are, under e"isting law, deemed to be defective. ;ence, the conservator merely takes the place

of a bank(s board of directors. 0hat the said board cannot do < such as repudiating a contract

validly entered into under the doctrine of implied authority < the conservator cannot do either.

;is power is not unilateral and he cannot simply repudiate valid obligations of the Bank. ;is

authority would be only to bring court actions to assail such contracts < as he has already done

so in the instant case. $o rule otherwise would be to enable a failing bank to become solvent, at

the e"pense of third parties, by simply getting the conservator to unilaterally revoke all previous

dealings which had one way or another come to be considered unfavorable to the Bank, yielding

nothing to perfected contractual rights nor vested interests of the third parties who had dealt

with the Bank.

Prescinding from the rationali6ation that a conservator cannot rescind a valid and e"isting

contract and that the CBA is the law between the contracting parties, it is obvious that the

conservator had no authority whatsoever to disallow the implementation of the provisions of the

CBA, especially considering that the ideals of social #ustice and protection of labor areguaranteed not only by the 'C, but more importantly by the Constitution.

It bears repeating that apart from the non4impairment clause, what is also well4settled is the

principle that when the con&icting interests of labor and capital are weighed on the scales of

social #ustice, the dominant in&uence of the latter must be counter4balanced by the sympathy

and compassion the law must accord the under4privileged worker.

e"t, petitioner insists that both the 'abor Arbiter and the '+C have no #urisdiction to entertain

the complaint of the private respondent, asserting that the issue was cogni6able by the voluntary

arbitrator pursuant to Article 7=> 'C.

?ranting that both the 'abor Arbiter and the '+C indeed had no #urisdiction over the issue,

petitioner cannot anymore plead such procedural &aw under the principle of estoppel.  It appears

that in the proceedings before the 'A, it vigorously argued its defense and prayed for alternative

relief. In fact, in its position paper and reply, the issue concerning the 'A(s lack of #urisdiction was

not raised by the petitioner. *oreover, in its answer to the memorandum of appeal %led by the

private respondents before the '+C, petitioner was again silent regarding the issue of

 #urisdiction on the part of the '+C to decide the appeal. It was only when the decision of the

'+C was unfavorable that it raised the issue of #urisdiction.

@inally, petitioner asserts since the employees have retired, as a conse/uence of which noemployee4employer relationship e"ists anymore between it and the employees, private

respondent no longer had the personality to %le the complaint for them.

Petitioner(s contention is untenable. $he retirement of an employee does not, in itself, aect his

employment status especially when it involves all rights and bene%ts due to him, since these

must be protected as though there had been no interruption of service. It must be borne in mind

that the retirement scheme was part of the employment package and the bene%ts to be derived

therefrom constituted, as it were, a continuing consideration for services rendered, as well as an

eective inducement for remaining with the corporation.

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0hen the retired employees were re/uesting that their retirement bene%ts be granted, they were

not pleading for generosity but were merely demanding that their rights, as embodied in the

CBA, be recogni6ed. $hus, when an employee has retired but his bene%ts under the law or the

CBA have not yet been given, he still retains, for the purpose of prosecuting his claims, the

status of an employee entitled to the protection of the 'abor Code, one of which is the protection

of the labor union. In Esso Philippines, Inc. v. **3, we recogni6ed that while the individual

complainants are the real party m interest in issues involving monetary claims and bene%ts, the

union, however, is not denied its right to sue on behalf of its members, thus)