In the Decision promulgated on January 27, 1999, the Court disposed of the case as follows:

The modifications of the public respondent’s resolutions include the following:

Dissatisfied with the Decision, some alleged members of private respondent union (Union for brevity) filed a motion for intervention and a motion for reconsideration of the said Decision. A separate intervention was likewise made by the supervisor’s union (FLAMES2 [First Line Association of Meralco Supervisory Employees.]) of petitioner corporation alleging that it has bona fide legal interest in the outcome of the case.3 [Motion for Leave to Intervene and to treat this as Movant’s Intervention filed by FLAMES, p. 4; Rollo, p. 2476.] The Court required the "proper parties" to file a comment to the three motions for reconsideration but the Solicitor-General asked that he be excused from filing the comment because the "petition filed in the instant case was granted" by the Court.4 [Solicitor-General’s Manifestation and Motion dated August 10, 1999, p. 2; Rollo, p. 2506.] Consequently, petitioner filed its own consolidated comment. An "Appeal Seeking Immediate Reconsideration" was also filed by the alleged newly elected president of the Union.5 [Rollo, p. 2495.] Other subsequent pleadings were filed by the parties and intervenors.

The issues raised in the motions for reconsideration had already been passed upon by the Court in the January 27, 1999 decision. No new arguments were presented for consideration of the Court. Nonetheless, certain matters will be considered herein, particularly those involving the amount of wages and the retroactivity of the Collective Bargaining Agreement (CBA) arbitral awards.

Petitioner warns that if the wage increase of P2,200.00 per month as ordered by the Secretary is allowed, it would simply pass the cost covering such increase to the consumers through an increase in the rate of electricity. This is a non sequitur. The Court cannot be threatened with such a misleading argument. An increase in the prices of electric current needs the approval of the appropriate regulatory government agency and does not automatically result from a mere increase in the wages of petitioner’s employees. Besides, this argument presupposes that petitioner is capable of meeting a wage increase. The All Asia Capital report upon which the Union relies to support its position regarding the wage issue can not be an accurate basis and conclusive determinant of the rate of wage increase. Section 45 of Rule 130 Rules of Evidence provides:

Under the afore-quoted rule, statement of matters contained in a periodical may be admitted only "if that compilation is published for use by persons engaged in that occupation and is generally used and relied upon by them therein." As correctly held in our Decision dated January 27, 1999, the cited report is a mere newspaper account and not even a commercial list. At most, it is but an analysis or opinion which carries no persuasive weight for purposes of this case as no sufficient figures to support it were presented. Neither did anybody testify to its accuracy. It cannot be said that businessmen generally rely on news items such as this in their occupation. Besides, no evidence was presented that the publication was regularly prepared by a person in touch with the market and that it is generally regarded as trustworthy and reliable. Absent extrinsic proof of their accuracy, these reports are not admissible.6 [20 Am. Jur. 819.] In the same manner, newspapers containing stock quotations are not admissible in evidence when the source of the reports is available.7 [20 Am. Jr. 819-820.] With more reason, mere analyses or projections of such reports cannot be admitted. In particular, the source of the report in this case can be easily made available considering that the same is necessary for compliance with certain governmental requirements.

Nonetheless, by petitioner’s own allegations, its actual total net income for 1996 was P5.1 billion.8 [Petitioner’s Comment to Motions for Reconsideration and Motion for Intervention, p. 6; Rollo, p. 2514.] An estimate by the All Asia financial analyst stated that petitioner’s net operating income for the same year was about P5.7 billion, a figure which the Union relies on to support its claim. Assuming without admitting the truth thereof, the figure is higher than the P4.171 billion allegedly suggested by petitioner as its projected net operating income. The P5.7 billion which was the Secretary’s basis for granting the P2,200.00 is higher than the actual net income of P5.1 billion admitted by petitioner. It would be proper then to increase this Court’s award of P1,900.00 to P2,000.00 for the two years of the CBA award. For 1992, the agreed CBA wage increase for rank-and-file was P1,400.00 and was reduced to P1,350.00, for 1993; further reduced to P1,150.00 for 1994. For supervisory employees, the agreed wage increase for the years 1992-1994 are P1,742.50, P1,682.50 and P1,442.50, respectively. Based on the foregoing figures, the P2,000.00 increase for the two-year period awarded to the rank-and-file is much higher than the highest increase granted to supervisory employees.9 [See the January 27, 1999 Decision.] As mentioned in the January 27, 1999 Decision, the Court does "not seek to enumerate in this decision the factors that should affect wage determination" because collective bargaining disputes particularly those affecting the national interest and public service "requires due consideration and proper balancing of the interests of the parties to the dispute and of those who might be affected by the dispute."10 [Manila Electric Company v. Quisumbing, 302 SCRA 173, 196 (1999).] The Court takes judicial notice that the new amounts granted herein are significantly higher than the weighted average salary currently enjoyed by other rank-and-file employees within the community. It should be noted that the relations between labor and capital is impressed with public interest which must yield to the common good.11 [Article 1700, New Civil Code (NCC).] Neither party should act oppressively against the other or impair the interest or convenience of the public.12 [Article 1701, NCC.] Besides, matters of salary increases are part of management prerogative.13 [See National Federation of Labor Unions v. NLRC, 202 SCRA 346 (1991).]

On the retroactivity of the CBA arbitral award, it is well to recall that this petition had its origin in the renegotiation of the parties’ 1992-1997 CBA insofar as the last two-year period thereof is concerned. When the Secretary of Labor assumed jurisdiction and granted the arbitral awards, there was no question that these arbitral awards were to be given retroactive effect. However, the parties dispute the reckoning period when retroaction shall commence. Petitioner claims that the award should retroact only from such time that the Secretary of Labor rendered the award, invoking the 1995 decision in Pier 8 case14 [Pier 8 Arrastre and Stevedoring Services, Inc. v. Roldan-Confesor, (2nd Div), 311 Phil. 311 penned by Justice Puno with Chief Justice Narvasa (ret.) and Justices Bidin (ret.), Regalado (ret.) and Mendoza, concurring, p. 329.] where the Court, citing Union of Filipino Employees v. NLRC,15 [192 SCRA 414 (1990).] said:

On the other hand, the Union argues that the award should retroact to such time granted by the Secretary, citing the 1993 decision of St Luke’s.16 [St. Luke’s Medical Center v. Torres, (3rd Div), 223 SCRA 779 (1993), penned by Justice Melo with Justices Feliciano (ret.), Bidin (ret.), Davide (now Chief Justice) and Romero (ret.), concurring, pp. 792-793.]

In the 1997 case of Mindanao Terminal,17 [In Mindanao Terminal and Brokerage Service, Inc. v. Confesor, (2nd Div), 338 Phil. 671 penned by Justice Mendoza with Justices Regalado (ret.), Romero, (ret.), Puno and Torres (ret.), concurring, p. 679.] the Court applied the St. Luke’s doctrine and ruled that:

The Court in the January 27, 1999 Decision, stated that the CBA shall be "effective for a period of 2 years counted from December 28, 1996 up to December 27, 1999." Parenthetically, this actually covers a three-year period. Labor laws are silent as to when an arbitral award in a labor dispute where the Secretary had assumed jurisdiction by virtue of Article 263 (g) of the Labor Code shall retroact. In general, a CBA negotiated within six months after the expiration of the existing CBA retroacts to the day immediately following such date and if agreed thereafter, the effectivity depends on the agreement of the parties.18 [Article 253-A, Labor Code, as amended..] On the other hand, the law is silent as to the retroactivity of a CBA arbitral award or that granted not by virtue of the mutual agreement of the parties but by intervention of the government. Despite the silence of the law, the Court rules herein that CBA arbitral awards granted after six months from the expiration of the last CBA shall retroact to such time agreed upon by both employer and the employees or their union. Absent such an agreement as to retroactivity, the award shall retroact to the first day after the six-month period following the expiration of the last day of the CBA should there be one. In the absence of a CBA, the Secretary’s determination of the date of retroactivity as part of his discretionary powers over arbitral awards shall control.

It is true that an arbitral award cannot per se be categorized as an agreement voluntarily entered into by the parties because it requires the interference and imposing power of the State thru the Secretary of Labor when he assumes jurisdiction. However, the arbitral award can be considered as an approximation of a collective bargaining agreement which would otherwise have been entered into by the parties.19 [Mindanao Terminal and Brokerage Service, Inc. v. Confesor, 338 Phil. 671.] The terms or periods set forth in Article 253-A pertains explicitly to a CBA. But there is nothing that would prevent its application by analogy to an arbitral award by the Secretary considering the absence of an applicable law. Under Article 253-A: "(I)f any such agreement is entered into beyond six months, the parties shal! agree on the duration of retroactivity thereof." In other words, the law contemplates retroactivity whether the agreement be entered into before or after the said six-month period. The agreement of the parties need not be categorically stated for their acts may be considered in determining the duration of retroactivity. In this connection, the Court considers the letter of petitioner’s Chairman of the Board and its President addressed to their stockholders, which states that the CBA "for the rank-and-file employees covering the period December 1, 1995 to November 30, 1997 is still with the Supreme Court,"20 [Rollo, p. 2347.] as indicative of petitioner’s recognition that the CBA award covers the said period. Earlier, petitioner’s negotiating panel transmitted to the Union a copy of its proposed CBA covering the same period inclusive.21 [Annex "C" of the Petition.] In addition, petitioner does not dispute the allegation that in the past CBA arbitral awards, the Secretary granted retroactivity commencing from the period immediately following the last day of the expired CBA. Thus, by petitioner’s own actions, the Court sees no reason to retroact the subject CBA awards to a different date. The period is herein set at two (2) years from December 1, 1995 to November 30, 1997.

On the allegation concerning the grant of loan to a cooperative, there is no merit in the union’s claim that it is no different from housing loans granted by the employer. The award of loans for housing is justified because it pertains to a basic necessity of life. It is part of a privilege recognized by the employer and allowed by law. In contrast, providing seed money for the establishment of the employee’s cooperative is a matter in which the employer has no business interest or legal obligation. Courts should not be utilized as a tool to compel any person to grant loans to another nor to force parties to undertake an obligation without justification. On the contrary, it is the government that has the obligation to render financial assistance to cooperatives and the Cooperative Code does not make it an obligation of the employer or any private individual.22 [See Section 2, R.A. No. 6838 (Cooperative Code of the Philippines) which provides: "It is the declared policy of the State to foster the creation and growth of cooperative as a practical vehicle for promoting self-reliance and harnessing people power towards the attainment of economic development and social justice. The State shall encourage the private sector to undertake the actual formation of cooperatives and shall create an atmosphere that is conducive to the organizational growth and development of the cooperatives.

Anent the 40-day union leave, the Court finds that the same is a typographical error. In order to avoid any confusion, it is herein declared that the union leave is only thirty (30) days as granted by the Secretary of Labor and affirmed in the Decision of this Court.

The added requirement of consultation imposed by the Secretary in cases of contracting out for six (6) months or more has been rejected by the Court. Suffice it to say that the employer is allowed to contract out services for six months or more. However, a line must be drawn between management prerogatives regarding business operations per se and those which affect the rights of employees, and in treating the latter, the employer should see to it that its employees are at least properly informed of its decision or modes of action in order to attain a harmonious labor-management relationship and enlighten the workers concerning their rights.23 [Philippine Airlines v. NLRC, 225 SCRA 259 (1993).] Hiring of workers is within the employer’s inherent freedom to regulate and is a valid exercise of its management prerogative subject only to special laws and agreements on the matter and the fair standards of justice.24 [Tierra International Construction Corporation v. NLRC, 256 SCRA 36 (1996); Business Day Information Systems v. NLRC, 221 SCRA 9 (1993); Philtread Tire v. NLRC, 218 SCRA 805 (1993); San Miguel Corporation v. Ubaldo, 218 SCRA 293 (1993); San Miguel Brewery Sales Force Union v. Ople, 170 SCRA 25 (1989).] The management cannot be denied the faculty of promoting efficiency and attaining economy by a study of what units are essential for its operation. It has the ultimate determination of whether services should be performed by its personnel or contracted to outside agencies. While there should be mutual consultation, eventually deference is to be paid to what management decides.25 [Shell Oil Workers Union v. Shell Company of the Philippines, Ltd., 39 SCRA 276 (1971).] Contracting out of services is an exercise of business judgment or management prerogative.26 [De Ocampo v. NLRC, 213 SCRA 652 (1992).] Absent proof that management acted in a malicious or arbitrary manner, the Court will not interfere with the exercise of judgment by an employer.27 [Asian Alcohol Corporation v. NLRC, G.R. No. 131108, March 25, 1999 cited in Serrano v. NLRC, G.R. No. 117040, January 27, 2000.] As mentioned in the January 27, 1999 Decision, the law already sufficiently regulates this matter.28 [See also Metrolab Industries v. Roldan-Confesor, 254 SCRA 182 (1996).] Jurisprudence also provides adequate limitations, such that the employer must be motivated by good faith and the contracting out should not be resorted to circumvent the law or must not have been the result of malicious or arbitrary actions.29 [Manila Electric Company v. Quisumbing, 302 SCRA 173, 196 (1999) citing De Ocampo v. NLRC, 213 SCRA 652 (1992).] These are matters that may be categorically determined only when an actual suit on the matter arises.

WHEREFORE, the motion for reconsideration is partially granted and the assailed Decision is modified as follows: (1) the arbitral award shall retroact from December 1, 1995 to November 30, 1997; and (2) the award of wage is increased from the original amount of One Thousand Nine Hundred Pesos (P1,900.00) to Two Thousand Pesos (P2,000.00) for the years 1995 and 1996. This Resolution is subject to the monetary advances granted by petitioner to its rank-and-file employees during the pendency of this case assuming such advances had actually been distributed to them. The assailed Decision is AFFIRMED in all other respects.

Davide, Jr., C.J., (Chairman), Melo, Kapunan, and Pardo, JJ., concur.