The National Conciliation and Mediation Board (NCMB) in Northern Mindanao has settled the labor dispute between Cagayan de Oro’s first university and the Xavier University Non-Teaching Employees Union (XUNTELU) during yesterday’s conciliation conference.
Xavier University – Ateneo de Cagayan
In a press statement, XU President Fr. Roberto C. Yap, S.J. said the XUNTELU-ALU-TUCP has withdrawn its “Notice of Strike” and that the XU has also withdrawn its “Notice to Arbitrate” and its petition to the DOLE Secretary to assume jurisdiction.
During the conciliation conference, Fr. Yap said the XU agreed to give each employee P2, 700 as Christmas cash gift in 2016 and P1, 800 in 2017.
Both parties also agreed that the sources of the Christmas cash gift shall be left to the sole discretion of the Xavier University President subject to the condition that it shall not diminish existing CBA benefits.
“With this resolution, I am very happy to announce that classes and activities at XU will proceed normally. And we will certainly celebrate Xavier Festival Days as one community on December 1 to 3, 2016,” said Fr. Yap in a memo to the XU community posted on the school website.
Earlier, Dr. Dulce Dawang, designated spokesperson of XU, said the school had filed for compulsory arbitration with the NCMB to have a third party determine whether the suspension of the Christmas Cash Gratuity by the university due to operating losses incurred in the previous two years is a “practice” or “benefit.”
The XUNTELU filed a notice of strike last October 20, 2015 over the suspension of the Christmas Cash Gratuity due to the unprecedented financial losses experienced by XU in 2015. The union unanimously voted to proceed with its strike on November 22, 2016 and started holding nightly rallies in front of the university starting Tuesday (November 15, 2016).
XUNTELU is a “closed shop union” with a membership of 183, and comprises 16.4% of the 1,118 regular employees of XU in its five campuses Downtown, Macasandig and Pueblo de Oro. It is affiliated with the Associated Labor Union-Trade Union Congress of the Philippines (ALU-TUCP) and has signed a total of five collective bargaining agreements (CBAs) with XU since its inception, the latest one inked just last 19 May 2016.
In a press statement released to local media last November 18, the XUNTELU said: “WE believe that Xavier University is not losing. In their Statement of Financial Position, the following are the total comprehensive income in the following school years: 2013=P239 million, 2014=P74 million, 2015=P21.9 million, with retained earnings in 2015 of P4.1 billion.”
It further argued that the Christmas Cash Gratuity being given by XU to all its permanent employees is already a permanent benefit and covered under Article XIII of its CBA: Retention of prior and present benefits and other privileges and labor/management cooperative scheme.
Citing Section 7 of the law on labor standards, the union further argued that “on the basis of equitable considerations, long practice, agreement (e.g. CBA), and other peculiar circumstances, cash gift/bonus may become demandable and enforceable.”
“While the Christmas Cash Gift is considered a gratuity but it has been voluntarily practiced by the university for over 20 years and therefore has already ripened into a privilege or a permanent benefit, that cannot be just be withdrawn or stopped otherwise it would be a diminution of benefit.”
“There are however instances when a bonus, even though clearly an act of generosity on the part of the employer, may become demandable. In instances where the granting of a bonus has already become a long-standing practice or policy, the employer can no longer withdraw and to do so is tantamount to a diminution of benefits. This is prohibited under the Labor Code.”
But Fr. Yap said the union’s claims are erroneous.
“The 2016 Audited Financial Statements of Xavier University show that the correct facts are: XU had losses from school operations, -P89.7 million in 2016, and -P159.4 million in 2015. XU had losses in Total Comprehensive Income, -P138.7 million in 2016, and -P98.5 million in 2015.”
He further explained that as a non-profit foundation, XU does not have “retained earnings” but rather what are known as “fund balances” or “net assets”(assets less liabilities) which it uses to further XU’s educational mission.
The Fund Balance of XU, as of 31 May 2016 is P3.8 billion, was down –P200 million from the previous year’s Fund Balance of P4 billion. The 2016 Fund Balance (P3.8 billion) is held in the form of assets: Buildings, Land and Equipment valued at P2 billion and Investment Funds of P1.8 billion.
This Fund Balance (P3.8 billion) has been allocated by the XU Board of Trustees for Restricted Funds (P2.2 billion), which are restricted by law or by donors’ intentions for scholarships, professorial chairs, construction, plant & equipment; Required paper accounting entries (P800 million), for revaluation of property, re-measurement losses, unrealized gains/losses; and, Institutional Fund (P800 million), which is the “savings” which can be used to cover operational losses and deficits.
“The Institutional Fund (P800 million) needs to be managed prudently to cover the expected losses of the K-12 transition years (2016-2021) when we will have no college enrolment by as much as 4,000 college students,” Fr. Yap said.
“This SY16-17 is the first of the K-12 transition years when we do not have college freshmen enrolees; next SY we will have no freshmen and no sophomores; in SY18-19 no sophomores and no juniors; in SY19-20, no juniors and no seniors; in SY20-21, no seniors.”
“The deficit of the budget for SY16-17 approved by the Board of Trustees is projected at -P199 million. If the average deficit during the K-12 transition years will be -P200 million, then we will deplete our savings (P800 million) in 4 years, by 2020.”
However, XUNTELU insisted that XU is not losing since it offered a P33-million package with everything monetized when the union was negotiating for its new CBA last February, but that the union opted for the present CBA monetized at P13-million, “for the best interest of the union.”
“Therefore, Xavier University has savings. And, to declare it depleted is something that cannot be accepted. XU must be transparent about it. The Gratuity thing is not the issue here anymore. It is the deliberate and intentional act committed of not giving it. To unilaterally discontinue, eliminate, reduce, and diminish a benefit that has been long enjoyed by the employees is absolutely a Diminution of Benefit in violation of Article 100 of the Labor Code.”
In response, Fr. Yap assured the community that XU is exerting best efforts to achieve a fair resolution to this dispute.
“XU is willing to give a Christmas cash gift, but not by using the savings from the Institutional Fund because this will increase the already large deficit (-P199 million) and will force XU to withdraw more than necessary from the savings,” he explained. “Instead, XU has proposed to give a Christmas cash gift in 2016 by reducing certain items in the SY16-17 budget to contribute to funding the Christmas gratuity. For example, cancel the University Christmas party and contribute the budget for the Christmas cash gift. In this manner, we will not increase the deficit for SY16-17 and not have to withdraw more than necessary from our savings. And everyone in the community will help each other so all can receive something this Christmas.”
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(Disclosure: the writer is a graduate of the XU-Ateneo de Cagayan Graduate School of Business and has worked closely with ALU-TUCP in the past)