FIRST DIVISION
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Petitioner,
- versus - NESTLÉ Respondent. x-----------------------------------x NESTLÉ Petitioner, - versus - Respondent. |
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G.R. No. 158930-31 G.R.
No. 158944-45 Present: PANGANIBAN,
C.J. Chairperson, YNARES - AUSTRIA-MARTINEZ, CALLEJO,
SR., and CHICO-NAZARIO, JJ. Promulgated: August 22, 2006 |
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CHICO-NAZARIO, J.:
The Case
Before the Court are two (2) petitions for review on certiorari
under Rule 45 of the Rules of Court, as amended. Both seek to annul and set
aside the joint: (1) Decision[1]
dated
G.R. No. 158930-31 was filed by Union of Filipro Employees
– Drug, Food and Allied Industries Unions – Kilusang
Mayo Uno (UFE-DFA-KMU) against Nestlé Philippines, Incorporated (Nestlé)
seeking the reverse of the Court of Appeals Decision in so far as the latter’s
failure to adjudge Nestlé guilty of unfair labor practice is concerned, as well
as the Resolution of 27 June 2003 denying its Partial Motion for
Reconsideration; G.R. No. 158944-45 was instituted by Nestlé against
UFE-DFA-KMU similarly seeking to annul and set aside the Decision and
Resolution of the Court of Appeals declaring 1) the Retirement Plan a valid
collective bargaining issue; and 2) the scope of assumption of jurisdiction
power of the Secretary of the DOLE to be limited to the resolution of questions
and matters pertaining merely to the ground rules of the collective bargaining
negotiations to be conducted between the parties.
In as much as the cases involve the same set of parties;
arose from the same set of circumstances, i.e.,
from several Orders issued by then Secretary of the Department of Labor and
Employment (DOLE), Hon. Patricia A. Sto. Tomas, respecting her assumption of
jurisdiction over the labor dispute between Nestlé and UFE-DFA-KMU, Alabang and
Cabuyao Divisions;[5] and
likewise assail the same Decision and Resolution of the Court of Appeals, the Court ordered the consolidation of the two
petitions.[6]
The Facts
From the record and the pleadings filed by the parties, we
cull the following material facts in this case:
On 4 April 2001, in consideration of the impending
expiration of the existing collective bargaining agreement (CBA) between Nestlé
and UFE-DFA-KMU[7] on 5
June 2001,[8]
in a letter denominated as a Letter of Intent, the Presidents of the Alabang and Cabuyao Divisions of
UFE-DFA-KMU, Ernesto Pasco and Diosdado Fortuna,
respectively, informed Nestlé of their intent to “open our new Collective
Bargaining Negotiation for the year 2001-2004 x x x as early as June 2001.”[9]
In a letter[10]
dated
On 29 May 2001, in another letter addressed to the
UFE-DFA-KMU (Cabuyao Division), Nestlé underscored
its position 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.”[11]
In addition, it clarified that with the closure of the Alabang
Plant, the CBA negotiations will only be applicable to the covered employees of
the Cabuyao Plant; hence, the Cabuyao
Division of UFE-DFA-KMU became the sole bargaining unit involved in the subject
CBA negotiations.
Thereafter, dialogue between the company and the union
ensued.
In a letter dated
Conciliation proceedings nevertheless proved ineffective. Complaining,
in essence, of bargaining deadlock – pertaining to economic issues, i.e., “retirement (plan), panel
composition, costs and attendance, and CBA,”[13]
UFE-DFA-KMU filed a Notice of Strike[14] on
On
On
CONSIDERING
THE FOREGOING, this Office hereby assumes jurisdiction over the labor dispute
at the Nestlé Philippines, Inc. (Cabuyao Plant)
pursuant to Article 263 (g) of the Labor Code, as amended.
Accordingly,
any strike or lockout is hereby enjoined. The parties are directed to cease and
desist from committing any act that might lead to the further deterioration of
the current labor relations situation.
The
parties are further directed to meet and convene for the discussion of the
union proposals and company counter-proposals before the National Conciliation
and Mediation Board (NCMB) who is hereby designated as the delegate/facilitator
of this Office for this purpose. The NCMB shall report to this Office the
results of this attempt at conciliation and delimitation of the issues within
thirty (30) days from the parties’ receipt of this Order, in no case later than
UFE-DFA-KMU sought reconsideration[19]
of the abovequoted Assumption of Jurisdiction Order
on the assertion that:
i.
Article 263 (g) of the Labor Code, as amended, is
invalid and unconstitutional as it is in derogation of the provisions dealing
on protection to labor, social justice, the bill of rights, and, generally
accepted principle of international law;
ii.
compulsory arbitration as a mode of dispute
settlement provided for in the Labor Code and sourced from the 1935 and 1973
constitutions has been discarded and deleted by the New Charter which
instituted in its stead free collective bargaining;
iii.
that ILO condemns the continuous exercise by the
Secretary of Labor of the power of compulsory arbitration;
iv.
granting that the law is valid, the Secretary has
unconstitutionally applied the law;
v.
that the company is a business enterprise not
belonging to an industry indispensable to the national interest considering
that it is only one among a number of companies in the country producing milk
and nutritional products; that the Cabuyao plant is
only one of the six (6) Nestle plants in the country and could rely on its
highly automated Cagayan de Oro
plant for buffer stocks;
vi.
that the Secretary acted with grave abuse of
discretion in issuing the assailed order without the benefit of a prior notice
and inquiry.
In the interregnum,
the union interposed a motion for extension of time[20]
to file its position paper as directed by the Assumption of Jurisdiction Order of
In an Order[21]
dated
This
is not the first time that this Office had occasion to resolve the grounds and
arguments now being raised x x x.
In a more recent case – In re: labor dispute at Toyota Motor Philippines
Corporation x x x this
Office ruled:
The
constitutionality of the power of the Secretary of Labor under Article 263 (g)
of the Labor Code to assume jurisdiction over a labor dispute in an industry
indispensable to the national interest has been upheld as an exercise of police
power of the constitution. x x x.
x x
x x
As ruled by the Supreme Court in the Philtread
case:
Article 263 (g) of the Labor Code does not violate the
worker’s constitutional right to strike.
x x x x x x
The foregoing article clearly does not interfere with the
worker’s right to strike but merely regulates it, when in the exercise of such
right, national interests will be affected.
On
On
Notwithstanding the Return-To-Work
Order, the members of UFE-DFA-KMU continued with their strike and refused
to go back to work as instructed. Thus, Sec. Sto.
Tomas sought the assistance of the Philippine National Police (PNP) for the
enforcement of said order.
At the hearing called on
On
UFE-DFA-KMU afterward
filed several pleadings: (1) an Urgent
Motion to File a Reply dated
On
Frustrated with the foregoing turn of events, UFE-DFA-KMU
filed a petition for certiorari[29]
with application for the issuance of a temporary restraining order or a writ of
preliminary injunction before the Court of Appeals. The petition was predicated on the question
of whether or not the DOLE Secretary committed grave abuse of discretion in
issuing the Orders of
Meanwhile, in an attempt to finally resolve the crippling
labor dispute between the parties, then Acting Secretary of the DOLE, Hon.
Arturo D. Brion, came out with an Order[30]
dated
a. we hereby
recognize that the present Retirement Plan at the Nestlé Cabuyao
Plant is a unilateral grant that the parties have expressly so recognized
subsequent to the Supreme Court’s ruling in Nestlé, Phils. Inc. vs. NLRC,
G.R. No. 90231, February 4, 1991, and is therefore not a mandatory subject
for bargaining;
b. the
c. the parties are directed to secure the
best applicable terms of the recently concluded CBs between Nestlé Phils. Inc.
and it eight (8) other bargaining units, and to adopt these as the terms and
conditions of the Nestlé Cabuyao Plant CBA;
d. all union
demands that are not covered by the provisions of the CBAs
of the other eight (8) bargaining units in the Company are hereby denied;
e. all existing
provisions of the expired Nestlé Cabuyao Plant CBA
without any counterpart in the CBAs of the other
eight bargaining units in the Company are hereby ordered maintained as part of
the new Nestlé Cabuyao Plant CBA;
f. the parties
shall execute their CBA within thirty (30) days
from receipt of this Order, furnishing this Office a copy of the signed
Agreement;
g. this CBA
shall, in so far as representation is
concerned, be for a term of five (5) years; all other provisions shall be
renegotiated not later than three (3) years after its effective date which
shall be December 5, 2001 (or on the first day six months after the expiration
on June 4, 2001 of the superceded CBA).
Not surprisingly, UFE-DFA-KMU moved to reconsider the aforequoted position of the DOLE.
On
Undaunted still, UFE-DFA-KMU, for the second time, went
to the Court of Appeals likewise via a petition for certiorari seeking
to annul, on the ground of grave abuse of discretion, the Orders of 02 April
2002 and 06 May 2002 of the Secretary of the DOLE.
The Court of Appeals, acting on the twin petitions for certiorari,
determined the issues in favor of UFE-DFA-KMU in a joint Decision dated
WHEREFORE,
in view of the foregoing, there being grave abuse on the part of the public
respondent in issuing all the assailed Orders, both petitions are hereby
GRANTED. The assailed Orders dated February 11, 2001, and March 8, 2001
(CA-G.R. SP No. 69805), as well as the Orders dated April 2, 2002 and May 6,
2002 (CA-G.R. SP No. 71540) of the Secretary of Labor and Employment in the
case entitled: “IN RE: LABOR DISPUTE AT NESTLE PHILIPPINES INC. (CABUYAO
FACTORY)” under OS-AJ-0023-01 (NCMB-RBIV-CAV-PM-08-035-01,
NCMB-RBIV-LAG-NS-10-037-01, NCMB-RBIV-LAG-NS-11-10-039—01) are hereby ANNULLED
and SET ASIDE. Private respondent is hereby directed to resume the CBA
negotiations with the petitioner.[32]
Dissatisfied, both parties
separately moved for the reconsideration of the abovequoted
decision – with Nestlé basically assailing
that part of the decision finding the DOLE Secretary to have gravely abused her
discretion when she ruled that the Retirement Plan is not a valid issue for
collective bargaining negotiations; while UFE-DFA-KMU questions, in essence,
the appellate court’s decision in absolving Nestlé of the charge of unfair
labor practice.
The parties’ efforts were all for naught as the Court of Appeals
stood pat in its earlier pronouncements and denied the motions for
reconsideration in a joint Resolution dated
Hence, these petitions for review on certiorari separately
filed by the parties. Said petitions were ordered consolidated in a Supreme Court
Resolution dated
The Issues
UFE-DFA-KMU’s
petition for review docketed as G.R. No. 158930-31, is predicated on the
following alleged errors:
I.
THE
COURT OF APPEALS COMMITTED A SERIOUS ERROR OF LAW IN NOT HOLDING THAT RESPONDENT
IS GUILTY OF UNFAIR LABOR PRACTICE IN REFUSING TO PROCEED WITH THE CBA
NEGOTIATIONS UNLESS PETITIONER FIRST ADMITS THAT THE RETIREMENT PLAN IN THE
COMPANY IS A NON-CBA MATTER; and
II.
THE
CONTENTION THAT THERE IS NO EVIDENCE OF UNFAIR LABOR
Whereas in G.R. No. 158944-45, petitioner
Nestlé challenges the conclusion of the Court of Appeals on the basis of the following issues:
I.
WHETHER
OR NOT THE COURT OF APPEALS COMMITTED SERIOUS ERROR IN HOLDING THAT THE POWERS
GRANTED TO THE SECRETARY OF LABOR TO RESOLVE NATIONAL INTEREST DISPUTES UNDER
ARTICLE 263 (G) OF THE LABOR CODE MAY BE LIMITED BY A (SECOND) NOTICE OF
STRIKE; and
II.
WHETHER
OR NOT THE COURT OF APPEALS COMMITTED SERIOUS ERROR IN ANNULING THE SECRETARY
OF LABOR’S
On the whole,
the consolidated cases only raise three (3) fundamental issues for deliberation
by this Court, that is, whether or not the Court of Appeals committed
reversible error, first, in finding the Secretary of Labor and Employment
to have gravely abused her discretion in her pronouncement that the Retirement
Plan was not a proper subject to be included in the CBA negotiations between
the parties; hence, non-negotiable; second, in holding that the
assumption powers of the Secretary of Labor and Employment should have been
limited merely to the grounds alleged in the second Notice of Strike; and third,
in not ruling that Nestlé was guilty of unfair labor practice despite allegedly
setting a pre-condition to bargaining – the non-inclusion of the Retirement Plan
as an issue in the collective bargaining negotiations.
The Court’s Ruling
Foremost for our
resolution is the matter of the non-inclusion of the Retirement Plan in the CBA
negotiations between Nestlé and UFE-DFA-KMU (Cabuyao
Division).
In finding the Secretary
of the DOLE to have gravely abused her discretion in holding that the Retirement
Plan is not a valid CBA issue,
the Court of Appeals explained that:
Although the Union, thru
its President Diosdado Fortuna, signed a Memorandum of Agreement dated October
8, 1998 together with the private respondent which clearly states that the
“Company agree to extend the following unilateral grants which shall not form
part of the CBA” (citation omitted) however, the same document made a proviso
that “reference on the Retirement Plan in the CBA signed on July 4, 1995,
shall be maintained,” x x x thus, this Court is of the belief and so holds
that the Retirement Plan is still a valid CBA issue, hence, it could not be
argued that the true intention of the parties is that the Retirement Plan,
although referred in the CBA, would not in any way form part of the CBA
(citation omitted) as it could be clearly inferred by this Court that it is to
be used as an integral part of the CBA and to be used as a topic for future bargaining,
in consonance with the ruling of the Supreme Court in the previous Nestlé Case
that “the Retirement Plan was a collective bargaining issue right from the
start.”[35]
In filing the
present petition, Nestle is of the view that after the 1991 Supreme Court
Decision was promulgated, there was obviously an agreement by the parties to no
longer consider the Retirement Plan as a negotiable item subject to bargaining.
Rather, said benefit would be regarded as a unilateral grant outside the ambit
of negotiation. Nestlé justifies such contention by directing the Court’s
attention to the Ground Rules for 1998 Alabang/Cabuyao Factories’ CBA
Negotiation (citation omitted) signed by it and the representatives of
UFE-DFA-KMU where both sides “expressly”
recognized Nestlé’s prerogative to initiate unilateral grants which are ‘not
negotiable.’ It likewise cited the Memorandum of Agreement[36]
entered into by the parties on
Indeed, the foregoing uncontroverted documents
very clearly established the clear agreement of the parties, after the 1991
Supreme Court Decision, to remove the Retirement Plan from the scope of
bargaining negotiation, and leave the matter upon the sole initiative and
discretion of Nestlé.[37]
In contrast,
UFE-DFA-KMU posits that there is nothing in either of the documents
aboveclaimed that proves that it agreed “to treat the Retirement Plan as a
unilateral grant of the company which is outside the scope of the CBA and
hence, not a proper subject of bargaining.” It explained that the MOA alluded
to by Nestlé merely speaks of the improvement[38]
or the review for the improvement[39]
of the current Retirement Plan and nothing else. UFE-DFA-KMU rationalizes that:
Had the objective of the parties been to consider
the Retirement Plan as not a subject for collective bargaining, they would have
stated so in categorical terms. Or, they could have deleted the said benefit
from the CBA.
Unfortunately for petitioner, the documents relied
upon by it do not state that the Retirement Plan is no longer a bargainable
item. The said benefit was not also removed or deleted from the CBA.
If ever, what was “unilaterally granted” by
petitioner company as appearing on the above-stated letter and MOA were the
“improvements” on the Retirement Plan. The Retirement Plan could not have been
unilaterally granted by the said letter and MOA since the said Plan predates
the said letter and MOA by over two decades.
UFE-DFA-KMU
concludes that “[s]ince the Retirement Plan did not derive its existence from
the letter and MOA x x x, the nature of the Retirement Plan was not altered or
changed by the subsequent issuance by petitioner company of the said letter and
MOA. The Retirement Plan remained a CBA item which is a proper subject of
collective bargaining pursuant to the 1991 ruling of this Honorable Court.”[40]
We agree.
The present
issue is not one of first impression. In Nestlé
Philippines, Inc. v. NLRC,[41]
ironically involving the same parties herein, this Court has had the occasion
to affirm that a retirement plan is consensual in nature.
By way of
background, the parties therein resorted to a “slowdown” and walked out of the
factory prompting the management to shut down its operations. Collective
bargaining negotiations were conducted but a deadlock was subsequently
declared. The Secretary of Labor assumed jurisdiction over the labor dispute
and issued a return-to-work order. The NLRC thereafter issued its resolution
modifying Nestlé’s existing “non-contributory” Retirement Plan. The company
filed a petition for certiorari alleging
grave abuse of discretion on the part of the NLRC as Nestlé was arguing that since
its Retirement Plan is non-contributory, it should be a non-issue in CBA
negotiations. Nestlé had the sole and exclusive prerogative to define the terms
of the plan as the employees had no vested and demandable rights thereon – the
grant of such not being a contractual obligation but simply gratuitous. In a
ruling contrary to Nestlé’s position, this Court, through Madame Justice
Grińo-Aquino, declared that:
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 (citation omitted).
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. As a matter of fact,
almost all of the benefits that the petitioner has granted to its employees
under the CBA – salary increases, rice allowances, midyear bonuses, 13th
and 14th month pay, seniority pay, medical and hospitalization
plans, health and dental services, vacation, sick & other leaves with pay –
are non-contributory benefits. Since the retirement plan has been an
integral part of the CBA since 1972, the
x x x
x
x x x [E]mployees
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; other
citation omitted). [Emphases supplied.][42]
In the case at
bar, it cannot be denied that the CBA that was about to expire at that time
contained provisions respecting the Retirement Plan. As the latter benefit was
already subject of the existing CBA, the members of UFE-DFA-KMU were only
exercising their prerogative to bargain or renegotiate
for the improvement of the terms of the Retirement Plan just like they would
for all the other economic, as well as non-economic benefits previously enjoyed
by them. Precisely, 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.
Further, Article
253, also of the Labor Code, defines the parameter of said obligation when
there already exists a CBA, viz:
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 and conditions of
the existing agreement during the sixty day period and/or until a new agreement
is reached by the parties.
And, in
demanding that the terms of the Retirement Plan be opened for renegotiation,
the members of UFE-DFA-KMU are acting well within their rights as we have,
indeed, declared that the Retirement Plan is consensual in character; and so,
negotiable.
Contrary to the
claim of Nestlé that the categorical mention of the terms ‘unilateral agreement’ in the letter and the MOA signed by the
representatives of UFE-DFA-KMU, had, for all intents and purposes worked to estop UFE-DFA-KMU from raising it as an issue in the CBA
negotiations, our reading of the same, specifically Paragraph 6 and
subparagraph 6.2:
6. Additionally,
the COMPANY agree to extend the following unilateral grants which shall not
form part of the Collective Bargaining Agreement (CBA):
x x x x
6.2. Review
for improvement of the COMPANY’s Retirement Plan and
the reference on the Retirement Plan in the Collective Bargaining Agreement
signed on
hardly persuades us
that the members of UFE-DFA-KMU have agreed to treat the Retirement Plan as a
benefit the terms of which are solely dependent on the inclination of the
Nestlé and remove the subject benefit from the ambit of the CBA. The
characterization unilaterally imposed by Nestlé on the Retirement Plan cannot
operate to divest the employees of their “vested and demandable right over
existing benefits voluntarily granted by their employer.”[44]
Besides, the contention that UFE-DFA-KMU has “abandoned” or forsaken our
earlier pronouncement vis-ŕ-vis the consensual nature of a retirement plan is quite
inconsistent with, nay, is negated by its conduct in doggedly asking for
a renegotiation of said benefit.
Worth noting, at this point, is the fact
that the aforequoted paragraph 6 and its
subparagraphs, particularly subparagraph 6.2, highlights an undeniable fact –
that Nestlé recognizes that the Retirement Plan is part of the existing Collective
Bargaining Agreement.
Nestlé further rationalizes
that a ruling declaring the Retirement Plan a valid CBA negotiation issue will
inspire other bargaining units to demand for greater benefits in accordance
with their respective appetites. Suffice it to say that the consensual nature
of the Retirement Plan neither gives the union members the unfettered right nor
the unbridled prerogative to demand more than what the
company can viably give.
As regards the
scope of the assumption powers of the Secretary of the DOLE, the appellate
court ruled that Sec. Sto. Tomas’ assumption of jurisdiction powers should have
been limited to the disagreement on the ground rules of the collective
bargaining negotiations. The Court of Appeals referred to the minutes of the
meeting held on
UFE-DFA-KMU
agrees in the above and contends that the requisites of judicial inquiry
require, first and foremost the presence of an actual case controversy. It then
concludes that “[i]f the courts of law cannot act and decide in the absence of
an actual case or controversy, so should be (sic) also the Honorable DOLE
Secretary.”[47]
Nestle, however,
contradicts the preceding disquisitions on the ground that such referral to the
minutes of the meeting was erroneous and misleading. It avers that the Court of
Appeals failed to consider the circumstance surrounding said utterance – that the statement was made during the preventive mediation
proceedings and the UFE-DFA-KMU had not yet filed any notice of strike. It
further emphasizes that it was UFE-DFA-KMU who first alleged bargaining
deadlock as the basis for the filing of its Notice of Strike. Finally, Nestlé
clarifies that before the first Notice of Strike was filed, several
conciliation conferences had already been undertaken where both parties had
exchanges of their respective CBA proposals.
In this, we agree
with Nestlé. Declaring the Secretary of the DOLE to have acted with grave abuse
of discretion for ruling on substantial matters or issues and not restricting
itself merely on the ground rules, the appellate court and UFE-DFA-KMU would
have us treat the subject labor dispute in a piecemeal fashion.
The power
granted to the Secretary of the DOLE by Paragraph (g) of Article 263 of the
Labor Code, to wit:
ART.
263. STRIKES, PICKETING, AND LOCKOUTS. –
x x x x
(g) When,
in his opinion, there exists a labor dispute causing or likely to cause a
strike or lockout in an industry indispensable to the national interest, the
Secretary of Labor and Employment may assume jurisdiction over the dispute and
decide it or certify the same to the Commission for compulsory arbitration.
Such assumption or certification shall have the effect of automatically
enjoining the intended or impending strike or lockout as specified in the
assumption or certification order. If
one has already taken place at the time of assumption or certification, all
striking or locked out employees shall immediately return to work and the
employer shall immediately resume operations and readmit all workers under the
same terms and conditions prevailing before the strike or lockout. The Secretary of Labor and Employment or the
Commission may seek the assistance of law enforcement agencies to ensure
compliance with this provision as well as with such orders as he may issue to
enforce the same.
x x x x
authorizes her to assume
jurisdiction over a labor dispute, causing or likely to cause a strike or
lockout in an industry indispensable to the national interest, and
correlatively, to decide the same.
In the case at
bar, the Secretary of the DOLE simply relied on the Notices of Strike that were
filed by UFE-DFA-KMU as stated in her Order of
x x
x The records disclose that the
“A. Bargaining Deadlock
1. Economic
issues (specify)
1. Retirement
2. Panel
Composition
3. Costs
and Attendance
4. CBA”
The second Notice of Strike
is dated
“B. Unfair Labor Practices (specify)
Bargaining in bad faith –
Setting pre-condition in the ground rules (Retirement
issue)”
Nowhere in the second Notice
of Strike is it indicated that this Notice is an amendment to and took the
place of the first Notice of Strike. In fact, our Assumption of Jurisdiction
Order dated November 29, 2001 specifically cited the two (2) Notices of Strike
without any objection on the part of the Union x x x.[48]
Thus,
based on the Notices of Strike filed by UFE-DFA-KMU, the Secretary of the DOLE
rightly decided on matters of substance. Further, it is a fact that during the
conciliation meetings before the NCMB, but prior to the filing of the notices
of strike, the parties had already delved into matters affecting the meat of
the collective bargaining agreement. The appellate court’s reliance on the
statement[49] of the
representative of Nestlé in ruling that the labor dispute had yet to progress
from the discussion of the ground rules of the CBA negotiations is clearly
misleading; hence, erroneous.
Nevertheless, granting for the
sake of argument that the meetings undertaken by the parties had not gone
beyond the discussion of the ground rules, the issue of whether or not the Secretary
of the DOLE could decide issues incidental to the subject labor dispute had already
been answered in the affirmative. The Secretary’s assumption of jurisdiction
power necessarily includes matters incidental to the labor dispute, that is,
issues that are necessarily involved in the dispute itself, not just to those
ascribed in the Notice of Strike; or, otherwise submitted to him for
resolution. As held in the case of International
Pharmaceuticals, Inc. v. Sec. of Labor and Employment,[50]
“x x x [t]he Secretary was explicitly granted by Article 263 (g) of the Labor
Code the authority to assume jurisdiction over a labor dispute causing or
likely to cause a strike or lockout in an industry indispensable to the
national interest, and decide the same accordingly. Necessarily, this authority to assume jurisdiction
over the said labor dispute must include and extend to all questions and
controversies arising therefrom, including cases over which the Labor
Arbiter has exclusive jurisdiction.”[51]
Accordingly, even if not exactly on the ground upon which the Notice of Strike is
based, the fact that the issue is incidental to the resolution of the subject
labor dispute or that a specific issue had been submitted to the Secretary of
the DOLE for her resolution, validly empowers the latter to take cognizance of and
resolve the same.
Secretary Sto. Tomas
correctly assumed jurisdiction over the questions incidental to the current
labor dispute and those matters raised by the parties. In any event, the query as to whether or not
the Retirement Plan is to be included in the CBA negotiations between the
parties ineluctably dictates upon the Secretary of the DOLE to go into the
substantive matter of the CBA negotiations.
Lastly, the
third issue pertains to the alleged reversible error committed by the Court of Appeals
in holding, albeit impliedly, Nestlé free and clear from any unfair labor
practice. UFE-DFA-KMU argues that Nestlé’s “refusal to bargain on a very
important CBA economic provision constitutes unfair labor practice.”[52]
It explained that Nestlé set as a precondition for the holding of collective
bargaining negotiations the non-inclusion of the issue of Retirement Plan. In
its words, “respondent Nestlé Phils., Inc. insisted that the Union should first
agree that the retirement plan is not a bargaining issue before respondent
Nestlé would agree to discuss other issues in the CBA.”[53]
It then concluded that “the Court of Appeals committed a legal error in not
ruling that respondent company is guilty of unfair labor practice. It also
committed a legal error in failing to award damages to the petitioner for the
ULP committed by the respondent.”[54]
Nestlé refutes
the above argument and asserts that it was only before the Court of Appeals, and in the second Petition for Certiorari at that, did UFE-DFA-KMU raise the matter of unfair
labor practice. It reasoned that the subject of unfair labor practice should
have been threshed out with the appropriate labor tribunal. In justifying the
failure of the Court of Appeals to find it guilty of unfair labor practice, it
stated that:
Under the circumstances, therefore, there was no
way for the Court of Appeals to make a ruling on the issues of unfair labor
practice and damages, simply because there was nothing to support or justify
such action. Although petitioner was afforded by the Secretary the opportunity
to be heard and more, it simply chose to omit the said issues in the
proceedings below.[55]
We are
persuaded.
The concept of “unfair
labor practice” is defined by the Labor Code as:
ART.
247. CONCEPT OF UNFAIR LABOR PRACTICE AND
PROCEDURE FOR PROSECUTION THEREOF. – Unfair labor practices violate the constitutional right of workers
and employees to self-organization, are inimical to the legitimate interests of
both labor and management, including their right to bargain collectively and
otherwise deal with each other in an atmosphere of freedom and mutual respect,
disrupt industrial peace and hinder the promotion of healthy and stable
labor-management relations.
x x x x.
The same code
likewise provides the acts constituting unfair labor practices committed by
employers, to wit:
ART.
248. UNFAIR
LABOR PRACTICES OF EMPLOYERS.
– It shall be unlawful for an employer to commit any of the following unfair
labor practices:
(a)
To interfere
with, restrain or coerce employees in the exercise of their right to
self-organization;
(b)
To require as
a condition of employment that a person or an employee shall not join a labor
organization or shall withdraw from one to which he belongs;
(c)
To contract
out services or functions being performed by union members when such will
interfere with, restrain or coerce employees in the exercise of their right to
self-organization;
(d)
To initiate,
dominate, assist or otherwise interfere with the formation or administration of
any labor organization, including the giving of financial or other support to
it or its organizers or supporters;
(e)
To
discriminate in regard to wages, hours of work, and other terms and conditions
of employment in order to encourage or discourage membership in any labor
organization. Nothing in this Code or in
any other law shall stop the parties from requiring membership in a recognized
collective bargaining agent as a condition for employment, except those
employees who are already members of another union at the time of the signing
of the collective bargaining agreement.
Employees of an appropriate collective bargaining
unit who are not members of the recognized collective bargaining agent may be
assessed a reasonable fee equivalent to the dues and other fees paid by members
of the recognized collective bargaining agent, if such non-union members accept
the benefits under the collective agreement.
Provided, That the individual authorization required under Article 242,
paragraph (o) of this Code shall not apply to the nonmembers of the recognized
collective bargaining agent; [The article referred to is 241, not 242. – CAA]
(f)
To dismiss,
discharge, or otherwise prejudice or discriminate against an employee for
having given or being about to give testimony under this Code;
(g)
To
violate the duty to bargain collectively as prescribed by this Code;
(h)
To pay
negotiation or attorney’s fees to the union or its officers or agents as part
of the settlement of any issue in collective bargaining or any other dispute;
or
(i)
To violate a
collective bargaining agreement.
The provisions of the preceding paragraph
notwithstanding, only the officers and agents of corporations associations or
partnerships who have actually participated, authorized or ratified unfair
labor practices shall be held criminally liable. [Emphasis supplied.]
Herein, Nestlé
is accused of violating its duty to bargain collectively when it purportedly
imposed a pre-condition to its agreement to discuss and engage in collective
bargaining negotiations with UFE-DFA-KMU.
A
meticulous review of the record and pleadings of the cases at bar shows that, of
the two notices of strike filed by UFE-DFA-KMU before the NCMB, it was only on
the second that the ground of unfair labor practice was alleged. Worse, the
Basic is the
principle that good faith is presumed and he who alleges bad faith has the duty
to prove the same.[57]
By imputing bad faith unto the actuations of Nestlé, it was UFE-DFA-KMU,
therefore, who had the burden of proof to present substantial evidence to
support the allegation of unfair labor practice. A perusal of the allegations
and arguments raised by UFE-DFA-KMU in the Memorandum (in G.R. Nos. 158930-31)
will readily disclose that it failed to discharge said onus probandi as there is still a need for the presentation of
evidence other than its bare contention of unfair labor practice in order to
make certain the propriety or impropriety of the unfair labor practice charge
hurled against Nestlé. Under Rule XIII, Sec. 4, Book V of the Implementing
Rules of the Labor Code:
x x x. In
cases of unfair labor practices, the notice of strike shall as far as
practicable, state the acts complained of and the efforts to resolve
the dispute amicably.” [Emphasis supplied.]
Except for the
assertion put forth by UFE-DFA-KMU, neither the second Notice of Strike nor the
records of these cases substantiate a finding of unfair labor practice. It is
not enough that the union believed that the employer committed acts of unfair
labor practice when the circumstances clearly negate even a prima facie showing to warrant such a
belief.[58]
In its letter[59]
to UFE-DFA-KMU of 29 May 2001, though Nestlé underscored its position 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,” such attitude is not
tantamount to refusal to bargain. This is especially true when it is viewed in
the light of the fact that eight out of nine bargaining units have allegedly
agreed to treat the Retirement Plan as a unilateral grant. Nestlé, therefore,
cannot be faulted for considering the same benefit as unilaterally granted. To be sure, it
must be shown that Nestlé was motivated by ill will, “bad faith, or fraud, or
was oppressive to labor, or done in a manner contrary to morals, good customs,
or public policy, and, of course, that social humiliation, wounded feelings, or
grave anxiety resulted x x x”[60]
in disclaiming unilateral grants as proper subjects in their collective
bargaining negotiations.
There is no per se test of good faith in bargaining.[61]
Good faith or bad faith is an inference to be drawn from the facts,[62] to be precise, the
crucial question of whether or not a party has met his statutory duty to
bargain in good faith typically turns on the facts of the individual case. Necessarily,
a determination of the validity of the Nestlé’s proposition involves an
appraisal of the exercise of its management prerogative.
Employers are
accorded rights and privileges to assure their self-determination and independence
and reasonable return of capital.[63]
This mass of privileges comprises the so-called management prerogatives.[64]
In this connection, the rule is that good faith is always presumed. As long as
the company’s exercise of the same is in good faith to advance its interest and
not for purpose of defeating or circumventing the rights of employees under the
law or a valid agreement, such exercise will be upheld.[65]
Construing arguendo that the content of the aforequoted letter of
It must be
remembered at all times that the Philippine Constitution, while inexorably
committed towards the protection of the working class from exploitation and
unfair treatment, nevertheless mandates the policy of social justice so as to
strike a balance between an avowed predilection for labor, on the one hand, and
the maintenance of the legal rights of capital, the proverbial hen that lays
the golden egg, on the other. Indeed, we should not be unmindful of the legal
norm that justice is in every case for the deserving, to be dispensed with in
the light of established facts, the applicable law, and existing jurisprudence.[66]
In sum, from the
facts and evidence extant in the records of these consolidated petitions, this
Court finds that 1) the Retirement Plan is still a valid issue for herein
parties collective bargaining negotiations; 2) the Court of Appeals committed
reversible error in limiting to the issue of the ground rules the scope of the
power of the Secretary of Labor to assume jurisdiction over the subject labor
dispute; and 3) Nestlé is not guilty of unfair labor practice. As no other
issues are availing, this ponencia writes finis
to the protracted labor dispute between Nestlé and UFE-DFA-KMU (Cabuyao Division).
WHEREFORE, in view of the
foregoing, the Petition in G.R. No. 158930-31 seeking that Nestlé be declared
to have committed unfair labor practice in allegedly setting a precondition to
bargaining is DENIED. The Petition in G.R. No. 158944-45, however, is PARTLY
GRANTED in that we REVERSE the ruling of the Court of Appeals in CA G.R. SP No.
69805 in so far as it ruled that the Secretary of the DOLE gravely abused her
discretion in failing to confine her assumption of jurisdiction power over the
ground rules of the CBA negotiations; but the ruling of the Court of Appeals on the inclusion of the Retirement
Plan as a valid issue in the collective bargaining negotiations between
UFE-DFA-KMU and Nestlé is AFFIRMED. The parties are directed to resume
negotiations respecting the Retirement Plan and to take action consistent
with the discussions hereinabove set forth. No costs.
SO ORDERED.
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MINITA V. CHICO-NAZARIO
Associate Justice |
WE
CONCUR:
Chief Justice
Chairperson
CONSUELO YNARES-SANTIAGO
Associate Justice |
MA. ALICIA AUSTRIA-MARTINEZ Associate Justice |
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ROMEO J. CALLEJO, SR. Associate Justice |
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Pursuant to
Article VIII, Section 13 of the Constitution, and the Division Chairman’s
Attestation, it is hereby certified that the conclusions in the above Decision
were reached in consultation before the case was assigned to the writer of the
opinion of the Court’s Division.
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ARTEMIO V. PANGANIBAN
Chief Justice |
[1] Penned
by Associate Justice B.A. Adefuin-De la Cruz, with Associate Justices Mercedes
Gozo-Dadole and Mariano C. Del Castillo concurring; rollo (G.R. No. 158930-31, Vol. I), pp. 35-44, Annex “A” of the
Petition; rollo (G.R. No. 158944-45), pp. 48-58, Annex
“A” of the Petition.
[2] Rollo
(G.R. No. 158930-31, Vol. I), pp.
47-48, Annex “B” of the Petition; rollo (G.R. No. 158944-45), pp. 60-61, Annex “B” of the
Petition.
[3] Entitled “
[4] Entitled “
[5] Concerning employees at Nestlé’s Alabang and Cabuyao factories.
[6] SC
Resolution dated
[7] Alabang and Cabuyao Divisions.
[8] Annex
“B” of the Petition; rollo
(G.R. No. 158930-31, Vol. I), p. 281.
[9] Annex
“B” of the Petition (G.R. No. 158930-31, Vol. I); rollo, p. 281.
[10] Annex
“3” of the Comment to the Petition; rollo
(G.R. No. 158930-31, Vol. II), p. 1316.
[11] Annex
“F-1” of the Petition; rollo
(G.R. No. 158930-31, Vol. I), p. 460.
[12] In
a letter addressed to Atty. Jose Velasco, Director, National Conciliation and
Mediation Board, Regional Office No. IV, Imus Cavite; Annex “F” of the
Petition; rollo (G.R.
No. 158944-45), p. 104.
[13] Original records, Vol. IV, p. 1.
[14]
[15] Original records, Vol. II, p. 146.
[16] Of
the 789 regular rank-and-file employees of Nestlé (Cabuyao Factory, Laguna),
only 724 employees voted; the YES ballot garnered 708 votes, while only 13
employees decided against the plan to stage a strike; Records, Vol. II, p. 150.
[17] Dated
[18]
[19] Dated
[20] Denominated as Motion for Time.
[21] Annex
“F” of the Petition; rollo
(G.R. No. 158930-31, Vol. I), pp. 317-321.
[22] “x x
x x
Accordingly,
any strike or lockout is hereby enjoined. The parties are directed to cease and
desist from committing any act that might lead to the further deterioration of
the current labor relations situation.
x x
x x”
[23] Rollo (G.R. No. 158944-45), pp. 192-193.
[24] Position
Paper of Nestlé; Annex “O” of the Petition; rollo (G.R. No. 158944-45), pp. 194-310.
[25] Annex
“P” & “Q” of the Petition; rollo
(G.R. No. 158944-45), pp. 311-336 and pp. 337-339.
[26] Rollo (G.R. No. 158930-31, Vol.
I), pp323-324.
[27] Rollo (G.R. No. 158944-45), p. 428.
[28]
[29] CA rollo (CA-G.R. SP No. 69805).
[30] Annex
“BB” of the Petition; rollo
(G.R. No. 158944-45), pp. 508-520.
[31] Annex
“L” of the Petition; rollo
(G.R. No. 158930-31, Vol. I), pp. 802-806.
[32]
[33] Rollo (G.R. No. 158930-31, Vol. II), p. 1669.
[34]
[35] Rollo (G.R. No. 158930-31, Vol. I), pp. 42-43.
[36] Annex
“2” of Nestlé’s Comment in CA-G.R. SP No. 71540, pp. 614-619; Annex “E” of
Nestlé’s Memorandum; rollo (G.R. No. 158944-45),
pp. 1270-1275.
[37] Rollo (G.R. No. 158944-45), p. 1235.
[38] Respondent’s
Memorandum in G.R. No. 158944-45, p. 12; rollo
(G.R. No. 158930-31, Vol. II), p. 1703.
[39]
[40] Rollo (G.R. No. 158930-31, Vol. II), p. 1704.
[41] G.R.
No. 91231,
[42]
[43] Rollo (G.R. No. 158944-45), p. 1273.
[44] Art.
100 of the Labor Code.
[45] CA rollo (CA G.R.-SP No.
69805), p. 503.
[46] Rollo (G.R. No. 158930-31, Vol. I), p. 41.
[47] Rollo (G.R. No. 158930-31, Vol. II), p. 1699.
[48] Rollo (G.R. No. 158930-31, Vol. I), pp. 333-334.
[49] “we are still discussing ground rules and not yet on the CBA
negotiations proper, a deadlock cannot be declared.”
[50] G.R.
Nos. 92981-83,
[51]
[52] Petitioner’s
Memorandum, pp 10-11; rollo
(G.R. No. 158930-31), pp. 1672-1673.
[53]
[54]
[55] Respondent’s Memorandum, pp. 22-23; rollo
(G.R. No. 158930-31, Vol. II), pp.
1627-1628.
[56] Notice
of Strike of
[57] Chua v. Court of Appeals,
312 Phil. 405, 411 (1995).
[58] Tiu v. National Labor Relations Commission,
343 Phil. 478,486-487 (1997).
[59] “x x x [U]nilateral
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.”
[60] San Miguel Corporation v. Del Rosario,
G.R. Nos. 168194 & 168603, 13 December 2005, 477 SCRA 604, 619.
[61] The Hongkong and Shanghai Banking Corporation Employees
[62]
[63] Capitol Medical Center, Inc. v. Meris, G.R. No. 155098,
[64]
[65]
[66] Philippine National Oil Company-Energy
Development Corporation (PNOC-EDC) v. Abella,
G.R. 153904,