Babcock-Hitachi (Phils.) v. Babcock-Hitachi (Phils.)

Summary

This case involves a dispute between Babcock-Hitachi (Phils.), Inc. and its employees' union over entitlement to relocation allowance. The company transferred three engineers from its Makati office to Bauan, Batangas and refused to pay the P1,500.00 monthly relocation allowance provided in their collective bargaining agreement, invoking a company policy that excluded residents of Bauan or adjacent towns. The Voluntary Arbitrator ordered payment of the allowance, which was affirmed by the Court of Appeals and ultimately by the Supreme Court. The Supreme Court held that the CBA provisions were clear and unambiguous, requiring payment of relocation allowance for permanent transfers from Makati to Bauan. The company's policy statement could not override the CBA terms, which constitute the law between the parties. The decision emphasized that labor contracts should be construed in favor of workers' welfare, establishing important precedent for CBA interpretation in employment disputes.