Union vs. Nestle GR No.
158930-31 March 3, 2008 In the case at bar, Nestle never refused to bargain
Facts:
According to Nestl, "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."
UFE-DFA-KMU argues therein that Nestls "refusal to
bargain on a very important CBA economic provision
constitutes unfair labor practice." It explains that Nestl
set as a precondition for the holding of collective
bargaining negotiations the non-inclusion of the issue
of Retirement Plan. In its words, "respondent Nestl
Phils., Inc. insisted that the Union should first agree
that the retirement plan is not a bargaining issue before
respondent Nestl would agree to discuss other issues
in the CBA."
Issue:
WON Nestl is guilty of ULP for not including its
unilateral grants in the negotiation of the CBA
Held:
No. The duty to bargain collectively is mandated by
Articles 252 and 253 of the Labor Code, as amended,
which state
ART. 252. Meaning of duty to bargain
collectively. The duty to bargain collectively
means the performance of a mutual obligation
to meet and convene promptly and
expeditiously 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 agreements if
requested by either party but such duty does
not compel any party to agree to a proposal or
to make any concession.
ART. 253. Duty to bargain collectively when
there exists a collective bargaining agreement.
When there is a collective bargaining
agreement, the duty to bargain collectively
shall also mean that neither party shall
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 of conditions of
the existing agreement during the 60-day
period and/or until a new agreement is reached
by the parties.
Obviously, the purpose of collective bargaining is the
reaching of an agreement resulting in a contract
binding on the parties; but the failure to reach an
agreement after negotiations have continued for a
reasonable period does not establish a lack of good
faith. The statutes invite and contemplate a collective
bargaining contract, but they do not compel one. The
duty to bargain does not include the obligation to reach
an agreement.
collectively with UFE-DFA-KMU. The corporation
simply wanted to exclude the Retirement Plan from the
issues to be taken up during CBA negotiations, on the
postulation that such was in the nature of a unilaterally
granted benefit. An employers steadfast insistence to
exclude a particular substantive provision is no different
from a bargaining representatives perseverance to
include one that they deem of absolute necessity.
Indeed, an adamant insistence on a bargaining position
to the point where the negotiations reach an impasse
does not establish bad faith. It is but natural that at
negotiations, management and labor adopt positions or
make demands and offer proposals and counter-
proposals. On account of the importance of the
economic issue proposed by UFE-DFA-KMU, Nestle
could have refused to bargain with the former but it
did not. And the managements firm stand against the
issue of the Retirement Plan did not mean that it was
bargaining in bad faith. It had a right to insist on its
position to the point of stalemate.
LOPEZ SUGAR CORPORATION, petitioner,
vs.
FEDERATION OF FREE WORKERS, PHILIPPINE
LABOR UNION ASSOCIATION (PLUA-NACUSIP)
and NATIONAL LABOR RELATIONS
COMMISSION, respondents.
Facts:
Petitioner allegedly to prevent losses due to major
economic problems caused the retrenchment and
retirement of a number of its employees.
It filed with the then Ministry of Labor and Employment
("MOLE") a combined report on retirement and
application for clearance to retrench affecting eighty six
(86) of its employees. Of these eighty-six (86)
employees, fifty-nine (59) were retired effective 1
January 1980 and twenty-eight (27) were to be
retrenched "in order to prevent losses."
Private respondent FFW, as the certified bargaining
agent of the rank-and-file employees of petitioner, filed
with the MOLE a complaint for unfair labor practices
and recovery of union dues. FFW claimed that the
terminations undertaken by petitioner were violative of
the security of tenure of its members and were
intended to "bust" the union and hence constituted an
unfair labor practice. FFW claimed that after the
termination of the services of its members, petitioner
advised 110 casuals to report to its personnel office. It
argued that to justify retrenchment, serious business
reverses must be "actual, real and amply supported by
sufficient and convincing evidence." FFW prayed for
reinstatement of its members who had been retired or
retrenched.
Petitioner contended that the announcement calling for
110 workers to report to its personnel office was only
for the purpose of organizing a pool of extra workers
which could be tapped whenever there were temporary
vacancies by reason of leaves of absence of regular
workers and that the rising cost of production and the
stoppage of its railway facilities, pose a very serious
threat against the economic survival of petitioner.
Labor Arbiter denied petitioner's application for
clearance to retrench its employees on the ground that
for retrenchment to be valid, the employer's losses
must be serious, actual and real and must be amply
supported by sufficient and convincing evidence. The
application to retire was also denied on the ground that
petitioner's prerogative to so retire its employees was
granted by the 1975-77 collective bargaining
agreement which agreement had long ago expired.
NLRC affirmed Labor Arbiters decision.
Issues:
1. Whether or not there is a valid retrenchment.
2. Whether or not the retirement granted under
the CBA is valid.
Ruling:
1. No. There is no valid retrenchment. The losses
must be serious, actual and real. We have
scanned the records but failed to find evidence
submitted to show that applicant company
would suffer serious business losses or
reverses as a consequence of the alleged
major economic problems. In fact, applicant
company asseverated that these problems
only threatens its survival, hence, it had to
reduce its work force. Another thing, while
applicant company was retrenching its regular
employees, it also hired the services of
casuals. This militated its claim to reduce its
work force to set up cost reduction. It must be
stated that settled is the rule that serious
business losses or reverses must be actual,
real and amply supported by sufficient and
convincing evidence.
2. Yes. Although the CBA had expired, it
continued to have legal effects as between the
parties until a new CBA had been negotiated
and entered into.
Article 253 Duty to bargain
collectively when there exists a
collective bargaining agreement.
When there is a collective bargaining
agreement, the duty to bargain
collectively shall also mean that neither
party shall 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 60-day period
and/or until a new agreement is
reached by the parties.
Despite the lapse of the formal effectivity of the
CBA by virtue of its own provisions, the law
considered the same as continuing in force and
effect until a new CBA shall have been validly
executed. Hence, petitioner acted within legal
bounds when it decided to retire several
employees in accordance with the CBA.
PICOP RESOURCES, INCORPORATED
(PRI), Petitioner,
vs.
ANACLETO L. TAECA, GEREMIAS S. TATO,
JAIME N. CAMPOS, MARTINIANO A. MAGAYON,
JOSEPH B. BALGOA, MANUEL G. ABUCAY,
MOISES M. ALBARAN, MARGARITO G. ALICANTE,
JERRY ROMEO T. AVILA, LORENZO D. CANON,
RAUL P. DUERO, DANILO Y. ILAN, MANUEL M.
MATURAN, JR., LUISITO R. POPERA,
CLEMENTINO C. QUIMAN, ROBERTO Q. SILOT,
CHARLITO D. SINDAY, REMBERT B. SUZON
ALLAN J. TRIMIDAL, and NAMAPRI-
SPFL, Respondents.
Facts:
Respondents were regular rank-and-file employees of
PRI and bona fide members of Nagkahiusang
Mamumuo sa PRI Southern Philippines Federation of
Labor (NAMAPRI-SPFL), which is the collective
bargaining agent for the rank-and-file employees of
petitioner PRI. PRI has a CBA with NAMAPRI-SPFL.
The CBA contained the following union security
provisions:
Article II- Union Security and Check-Off
Section 6. Maintenance of membership.
6.1 All employees within the appropriate bargaining unit
who are members of the UNION at the time of the
signing of this AGREEMENT shall, as a condition of
continued employment by the COMPANY, maintain
their membership in the UNION in good standing
during the effectivity of this AGREEMENT.
6.2 Any employee who may hereinafter be employed to
occupy a position covered by the bargaining unit shall
be advised by the COMPANY that they are required to
file an application for membership with the UNION
within thirty (30) days from the date his appointment
shall have been made regular.
6.3 The COMPANY, upon the written request of the
UNION and after compliance with the requirements of
the New Labor Code, shall give notice of termination of
services of any employee who shall fail to fulfill the
condition provided in Section 6.1 and 6.2 of this Article
Atty. Fuentes sent a letter to the management of PRI
demanding the termination of employees who allegedly
campaigned for, supported and signed the Petition for
Certification Election of the Federation of Free Workers
Union (FFW) during the effectivity of the CBA.
NAMAPRI-SPFL considered said act of campaigning
for and signing the petition for certification election of
FFW as an act of disloyalty and a valid basis for
termination for a cause in accordance with its
Constitution and By-Laws, and the terms and
conditions of the CBA, specifically Article II, Sections
6.1 and 6.2 on Union Security Clause.
PRI served notices of termination for causes to
employees whom NAMAPRIL-SPFL sought to be
terminated on the ground of acts of disloyalty
committed against it when respondents allegedly
supported and signed the Petition for Certification
Election of FFW before the freedom period during the
effectivity of the CBA. A Notice was also served on the
DOLE, Caraga Region.
Respondents then accused PRI of ULP.
Issue:
Whether or not respondents were validly terminated.

Held:

No.

Union security is a generic term, which is applied to

and comprehends closed shop, union shop,
maintenance of membership, or any other form of
agreement which imposes upon employees the
obligation to acquire or retain union membership as a
condition affecting employment. There is union shop
when all new regular employees are required to join the
union within a certain period as a condition for their
continued employment. There is maintenance of
membership shop when employees, who are union
members as of the effective date of the agreement, or
who thereafter become members, must maintain union
membership as a condition for continued employment
until they are promoted or transferred out of the
bargaining unit, or the agreement is terminated. A
closed shop may be defined as an enterprise in which,
by agreement between the employer and his
employees or their representatives, no person may be
employed in any or certain agreed departments of the
enterprise unless he or she is, becomes, and, for the
duration of the agreement, remains a member in good
standing of a union entirely comprised of or of which
the employees in interest are a part.

However, in terminating the employment of an

employee by enforcing the union security clause, the
employer needs to determine and prove that: (1) the
union security clause is applicable; (2) the union is
requesting for the enforcement of the union security
provision in the CBA; and (3) there is sufficient
evidence to support the decision of the union to expel
the employee from the union. These requisites
constitute just cause for terminating an employee
based on the union security provision of the CBA.

As to the first requisite, there is no question that the

CBA between PRI and respondents included a union
security clause. Secondly, it is likewise undisputed that
NAMAPRI-SPFL, in two (2) occasions demanded from
PRI to terminate the employment of respondents due to
their acts of disloyalty to the Union. However, as to the
third requisite, we find that there is no sufficient
evidence to support the decision of PRI to terminate
the employment of the respondents.

The mere signing of the authorization in support of the

Petition for Certification Election of FFW on March 19,
20 and 21, or before the freedom period, is not
sufficient ground to terminate the employment of
respondents inasmuch as the petition itself was
actually filed during the freedom period. Nothing in the
records would show that respondents failed to maintain
their membership in good standing in the Union.
Respondents did not resign or withdraw their
membership from the Union to which they belong.
Respondents continued to pay their union dues and
never joined the FFW.