Union of Filipro Employees - Drug, Food and Allied Industries Union - Kilusang Mayo Uno v. Nestlé Philippines, Incorporated
REITERATIONFacts
The Antecedents: The Union of Filipro Employees - Drug, Food and Allied Industries Unions - Kilusang Mayo Uno (UFE-DFA-KMU) was the sole and exclusive bargaining agent for the rank-and-file employees of Nestlé Philippines, Incorporated (Nestlé). As the existing collective bargaining agreement (CBA) was nearing expiration, UFE-DFA-KMU notified Nestlé of its intent to open new CBA negotiations. Nestlé responded by preparing its counter-proposal and proposed ground rules, and in a subsequent letter, reiterated its stance that unilateral grants, including the Retirement Plan, were not proper subjects for CBA negotiations. Procedural History: Due to an alleged impasse in negotiations, Nestlé requested preventive mediation proceedings. Conciliation proved ineffective, leading UFE-DFA-KMU to file two Notices of Strike: one for bargaining deadlock on economic issues (including retirement) and another for unfair labor practices (bargaining in bad faith by setting preconditions and refusing to include the Retirement Plan). Nestlé then filed a Petition for Assumption of Jurisdiction with the Department of Labor and Employment (DOLE), which the Secretary granted, enjoining any strike and directing parties to negotiate. Despite the order, UFE-DFA-KMU members went on strike, prompting a Return-to-Work Order and a directive to submit position papers. The DOLE Secretary subsequently issued orders denying the union's motions and ruling that the Retirement Plan was not a mandatory subject for bargaining, dismissing the unfair labor practice charge. UFE-DFA-KMU filed petitions for certiorari with the Court of Appeals, which annulled the DOLE Secretary's orders, directing the parties to resume CBA negotiations. Both parties appealed to the Supreme Court. The Petition: The Supreme Court consolidated two petitions: one by UFE-DFA-KMU seeking to reverse the Court of Appeals' decision for failing to find Nestlé guilty of unfair labor practice, and another by Nestlé assailing the Court of Appeals' ruling that the Retirement Plan was a valid collective bargaining issue and that the DOLE Secretary's assumption of jurisdiction was limited to ground rules. The Supreme Court issued a Resolution denying UFE-DFA-KMU's Motion for Partial Reconsideration and clarifying Nestlé's Motion for Clarification.
Issue(s)
Whether Nestlé committed unfair labor practice by setting the exclusion of the Retirement Plan as a precondition to CBA negotiations. Whether the Secretary of Labor and Employment gravely abused her discretion in assuming jurisdiction over the labor dispute and ruling on matters beyond the ground rules of CBA negotiations. Whether the Retirement Plan is a valid issue for collective bargaining negotiations.
Ruling
The Supreme Court denied UFE-DFA-KMU's petition, affirming that Nestlé did not commit unfair labor practice. The Court partly granted Nestlé's petition, reversing the Court of Appeals' ruling that the DOLE Secretary gravely abused her discretion in failing to confine her assumption of jurisdiction to the ground rules. The Court affirmed the Court of Appeals' ruling that the Retirement Plan is a valid issue in collective bargaining negotiations. The parties were directed to resume negotiations respecting the Retirement Plan and to take action consistent with the Court's discussions, with the case remanded to the Secretary of Labor and Employment for proper disposition.
Ratio Decidendi
On the charge of unfair labor practice: The Court held that Nestlé did not commit unfair labor practice. The duty to bargain collectively, as mandated by Articles 252 and 253 of the Labor Code, requires parties to meet and convene in good faith for the purpose of negotiating an agreement, but it does not compel either party to agree to a proposal or make a concession. The Court found that Nestlé's insistence on excluding the Retirement Plan from CBA negotiations, based on its nature as a unilaterally granted benefit and the agreement of other bargaining units, did not constitute bad faith. The union's claim was based on a single letter and lacked substantial evidence to overcome the presumption of good faith on Nestlé's part. The Court emphasized that an employer's steadfast insistence on excluding a particular provision, even to the point of impasse, does not establish bad faith, as long as it is done in good faith to advance its interests and not to circumvent employee rights. On the jurisdiction of the DOLE Secretary under the amended Notice of Strike: The Court found that the DOLE Secretary did not commit grave abuse of discretion. The union itself filed two Notices of Strike, the first citing a bargaining deadlock on economic issues including retirement, and the second citing unfair labor practices related to the retirement issue. The Secretary's assumption of jurisdiction was based on these notices, which clearly indicated that substantive issues, not just ground rules, were in dispute. The Court rejected the union's argument that the Secretary should have confined her jurisdiction to the ground rules, stating that the Secretary's power under Article 263(g) of the Labor Code includes deciding the labor dispute and matters incidental to it, especially when a strike is imminent or has occurred. The Court noted that the union's subsequent change of mind regarding the scope of the dispute did not limit the Secretary's legally mandated discretionary power. On the resumption of negotiations respecting the Retirement Plan: The Court clarified that its previous decision affirmed the Retirement Plan as a valid issue for collective bargaining negotiations. However, it rejected Nestlé's interpretation that the directive to resume negotiations meant the parties should resolve it themselves through voluntary dispute settlement. Given that the Secretary of Labor had already assumed jurisdiction over the labor dispute, the issue concerning the retirement benefits was remanded back to the Secretary for proper disposition, consistent with the Court's decision and the Secretary's authority under Article 263(g) of the Labor Code.
Main Doctrine
The refusal to include a specific item in collective bargaining negotiations, such as a retirement plan, does not automatically constitute unfair labor practice or bad faith bargaining, especially when the employer posits that it is a unilaterally granted benefit and other bargaining units have agreed to such classification. The duty to bargain collectively does not compel either party to agree to a proposal or make a concession, but requires them to meet and convene promptly and expeditiously in good faith.