Union of Filipro Employees-Drug Food & Allied Ind. Unions – ruling in Nestle Phils. Inc. vs.
le Phils. Inc. vs. NLRC and is therefore not a mandatory
KMU v. Nestle (2006)
Facts:
The Presidents of the Alabang and Cabuyao Divisions of the Union of
Filipro Employees Drug, Food and Allied Industries Unions Kilusang
Mayo Uno (UFE-DFA-KMU) informed Nestle of their intent to open a
new CBA negotiation for the year 2001-2004. Nestle acknowledged and
informed UFE-DFA-KMU that it was preparing its own counter-
proposal and proposed ground rules that shall govern the conduct of the
collective bargaining negotiations. Nestle sent another letter, stating
that, unilateral grants, one-time company grants, company-initiated
policies and programs, which include, but are not limited to the
Retirement Plan, Incidental Straight Duty Pay and Calling Pay
Premium, are by their very nature not proper subjects of CBA
negotiations and therefore shall be excluded therefrom. Nestle, claiming
an impasse in the dialogue requested the NCMB to conduct preventive
mediation proceedings which proved ineffective. UFE-DFA-KMU filed
a notice of strike complaining of bargaining deadlock pertaining to
economic issues. Another notice of strike was filed by the UFE-DFA-
KMU on Nestle’s alleged unfair labor practices i.e., bargaining in bad
faith in that it was setting pre-conditions in the ground rules by refusing
to include the issue of the Retirement Plan in the CBA negotiations.
Nestle filed with the DOLE a Petition for Assumption of Jurisdiction.
Secretary Sto. Tomas issued an order enjoining any strike or lockout and
directed the parties to cease and desist from committing any act that
might lead to the further deterioration of the current labor relations
situation and not to meet and convene for the discussion of the union
proposals and company counter-proposals before the NCMB. The
employee-members of UFE-DFA-KMU at the Cabuyao Plant went on
strike which prompted the sec. to issue another order directing the
employees to return to work and Nestle to accept back all returning
workers. Despite this the members continued with their strike. Acting
DOLE Secretary Arturo Brion, issued an order, stating that present
Retirement Plan at the Nestle Cabuyao Plant is a unilateral grant that the
parties have expressly so recognized subsequent to the Supreme Court’s
subject for bargaining.
ISSUE + RULING
Whether the Retirement Plan was not a proper subject to be
included in the CBA negotiations between the parties; hence, non-
negotiable No, it was a proper subject to be included in the CBA
negotiations
- In Nestlé Philippines, Inc. v. NLRC ironically involving the
same parties herein, the Court affirmed that a retirement plan is
consensual in nature.
o The company's [Nestlé] contention that its retirement
plan is non-negotiable, is not well-taken. The NLRC
correctly observed that the inclusion of the retirement
plan in the collective bargaining agreement as part of
the package of economic benefits extended by the
company to its employees to provide them a measure of
financial security after they shall have ceased to be
employed in the company, reward their loyalty, boost
their morale and efficiency and promote industrial
peace, gives "a consensual character" to the plan so that
it may not be terminated or modified at will by either
party. The fact that the retirement plan is non-
contributory, i.e., that the employees contribute nothing
to the operation of the plan, does not make it a non-
issue in the CBA negotiations…Since the retirement
plan has been an integral part of the CBA since 1972,
the Union's demand to increase the benefits due the
employees under said plan, is a valid CBA issue
o Employees do have a vested and demandable right over
existing benefits voluntarily granted to them by their
employer. The latter may not unilaterally withdraw,
eliminate or diminish such benefits (Art. 100, Labor
Code)
- In the case, the CBA that was about to expire at that time and conditions of the existing agreement during the sixty day
contained provisions respecting the Retirement Plan. As the period and/or until a new agreement is reached by the parties.
latter benefit was already subject of the existing CBA, the - in demanding that the terms of the Retirement Plan be opened
members of UFE-DFA-KMU were only exercising their for renegotiation, the members of UFE-DFA-KMU are acting
prerogative to bargain or renegotiate for the improvement of the well within their rights as we have declared that the Retirement
terms of the Retirement Plan just like they would for all the Plan is consensual in character; and so, negotiable.
other economic, as well as non-economic benefits previously
enjoyed by them.
- the purpose of collective bargaining is the acquisition or
attainment of the best possible covenants or terms relating to
economic and non-economic benefits granted by employers and
due the employees. The Labor Code has actually imposed as a
mutual obligation of both parties, this duty to bargain
collectively. The duty to bargain collectively is categorically
prescribed by Article 252 of the said code. It states: ART. 252.
MEANING OF DUTY TO BARGAIN COLLECTIVELY. -
The duty to bargain collectively means the performance of a
mutual obligation to meet and confer promptly and
expeditiously and in good faith for the purpose of negotiating an
agreement with respect to wages, hours of work, and all other
terms and conditions of employment including proposals for
adjusting any grievances or questions arising under such
agreement and executing a contract incorporating such
agreement if requested by either party, but such duty does not
compel any party to agree to a proposal or to make any
concession.
- Article 253, also of the Labor Code, defines the parameter of
said obligation when there already exists a CBA. ART. 253.
DUTY TO BARGAIN COLLECTIVELY WHEN THERE
EXISTS A COLLECTIVE BARGAINING AGREEMENT. -
The duty to bargain collectively shall also mean that either party
shall not terminate nor modify such agreement during its
lifetime. However, either party can serve a written notice to
terminate or modify the agreement at least sixty (60) days prior
to its expiration date. It shall be the duty of both parties to keep
the status quo and to continue in full force and effect the terms