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UNION OF FILIPRO EMPLOYEES v. NLRC

FACTS:

The Union of Filipro Employees (UFE) filed a Notice of Strike against Nestle Philippines, raising issues of Collective Bargaining Agreement (CBA) deadlock and unfair labor practices. The National Conciliation and Mediation Board (NCMB) invited the parties for a conference, but Nestle Philippines questioned the legal personality of the strike proponents. Despite this, the NCMB proceeded with conciliation meetings, but Nestle Philippines did not attend. Negotiations for new CBAs were ongoing, but different units were represented by different unions. UFE's officers were terminated for instigating a strike without proper procedures, and the Labor Arbiter and NLRC upheld their complaint for illegal dismissal. The dispute further escalated with different factions within UFE claiming authority to negotiate. Separate CBAs were concluded in some units, but UFE challenged these in an Unfair Labor Practice (ULP) case. Efforts to resolve the dispute failed, leading the Secretary of Labor to certify the deadlock to the NLRC for compulsory arbitration. The NLRC ruled on wage increase and benefits for the employees and absolved Nestle of the ULP charge.

The petitioner filed a motion for reconsideration against the NLRC's decision, claiming that the resolution was inadequate. The issue of jurisdiction was raised, with the petitioner arguing that the NLRC acted without jurisdiction as it was rendered only by a division and not en banc. However, the court affirmed the NLRC's findings and held that the division had jurisdiction based on Republic Act 6715, which provided exclusive jurisdiction to each division of the NLRC.

The case also involved the interpretation of Republic Act 6715 and Administrative Order No. 36 issued by the Secretary of Labor. Prior to the enactment of Republic Act 6715, the NLRC decided certified disputes en banc. However, with the enactment of Republic Act 6715, the rules requiring en banc sessions were repealed. Administrative Order No. 36 stated that the NLRC shall no longer hold en banc sessions and shall discharge their functions through their respective divisions. The petitioner argued that the order was invalid, but it was contended that it was valid as it was issued in accordance with existing legislation. Numerous cases had already been resolved by the NLRC through its divisions since the effectivity of Republic Act 6715.

ISSUES:

  1. Whether Administrative Order No. 36 (Series of 1989), which abolished the Commission en banc sessions for the adjudication of cases and delegated the adjudicatory functions and powers to the respective divisions of the NLRC, is valid.

  2. Whether the NLRC committed grave abuse of discretion in only resolving the certified dispute that covers bargaining units in Makati, Alabang and Cabuyao, and not including other divisions.

  3. Whether the prayer to declare the respondent company guilty of acts of unfair labor practice can be included in the petition.

  4. Whether the respondent committed grave abuse of discretion by allowing multiplicity of suits and splitting causes of action.

  5. Whether the provisions of Article 253 and Article 253-A of the Labor Code are applicable.

  6. Whether the new collective bargaining agreement (CBA) should be given retrospective effect.

  7. Whether the terms and conditions of the CBA are inadequate and prejudicial to the workers.

  8. Whether the NLRC has the authority to formulate a CBA that is equitable to all concerned.

  9. Whether the findings of the NLRC on the terms of the CBA should be disturbed in the absence of grave abuse of discretion.

RULING:

  1. Yes, Administrative Order No. 36 (Series of 1989) is valid. It was issued in accordance with existing legislation and the Secretary of Labor is authorized to promulgate rules and regulations necessary for the implementation of Republic Act 6715.

  2. No, the NLRC did not commit grave abuse of discretion in only resolving the certified dispute in certain divisions and not including others. The NLRC deemed it appropriate to separately hear and decide the issues regarding the alleged unlawful execution of the Collective Bargaining Agreements in the other divisions. The consolidation of the issue with the certified case would pose complicated questions regarding venue and joinder of parties.

  3. The prayer to declare the respondent company guilty of acts of unfair labor practice cannot be included in the petition as it is beyond the scope of the certification order.

  4. The respondent did not commit grave abuse of discretion by allowing multiplicity of suits and splitting causes of action, as the National Labor Relations Commission (NLRC) is sitting in a compulsory arbitration certified by the Secretary of Labor, and its function is only to formulate the terms and conditions of the collective bargaining agreement (CBA) within the scope of the order.

  5. The provisions of Article 253 and Article 253-A of the Labor Code are applicable, and the CBA signed by the parties is effective upon the promulgation of the assailed resolution. Any retroactivity of the CBA's other provisions is limited to being entered into within six (6) months from its expiry date, and if entered into beyond this period, the parties shall agree on the duration of the retroactivity.

  6. The new CBA should be given prospective effect because there was no agreement between the parties for it to be retroactive. The public respondent did not abuse its discretion in giving the CBA a prospective effect because it is within its authority vested by existing laws. The automatic renewal clause provided for by the law, which is deemed incorporated in all CBAs, dictates that in the absence of a new agreement, the terms and conditions of the existing CBA shall continue in full force and effect until a new agreement is reached.

  7. The Court finds that the terms and conditions of the CBA are fair, reasonable, and just. Despite its prospective effect, the CBA provides reasonable compensation and benefits to the Nestle workers and employees, which are considered one of the highest, if not the highest, in the industry. The petitioner failed to establish that the public respondent committed grave abuse of discretion in not giving the CBA a retrospective effect.

  8. The NLRC has the authority to formulate a CBA that is equitable to all concerned. Given its expertise in settling labor disputes and its competence to appraise and evaluate the evidence and positions presented by the parties, the NLRC is in the best position to formulate an equitable CBA.

  9. The findings of the NLRC on the terms of the CBA should not be disturbed in the absence of a clear showing of grave abuse of discretion. The assailed resolutions of the NLRC are deemed to be responsive to the call of compassionate justice observed in labor law and the dictates of reason, which is considered supreme in every adjudication.

PRINCIPLES:

  • Compulsory arbitration is the process of settling labor disputes by a government agency, authorized to make a binding award on all parties (Philippine Airlines, Inc. v. National Labor Relations Commission).

  • When sitting in a compulsory arbitration, the NLRC acts as an administrative body tasked to implement the order of the Secretary of Labor. Its function is to formulate the terms and conditions of the CBA within the scope of the order.

  • Assumption or certification of jurisdiction by the Secretary of Labor or the Commission automatically enjoins any intended or impending strike or lockout and requires employees to immediately return to work, while the employers resume operations and readmit all workers under the same terms and conditions prevailing before the strike or lockout (Article 263(g) of the Labor Code).

  • The duty to bargain collectively means that neither party can terminate or modify the CBA during its lifetime. However, either party can serve a written notice to terminate or modify the agreement at least sixty (60) days before its expiration date, and both parties must keep the status quo and continue the terms and conditions of the existing agreement during the 60-day period and/or until a new agreement is reached (Article 253 of the Labor Code).

  • The representation aspect of a collective bargaining agreement has a term of five (5) years, and no petition questioning the majority status of the incumbent bargaining agent can be entertained outside of the sixty-day period before the expiration of the agreement. All other provisions of the CBA must be renegotiated not later than three (3) years after its execution (Article 253-A of the Labor Code).

  • The automatic renewal clause provided for by law deems the terms and conditions of the existing CBA to continue in full force and effect until a new agreement is reached by the parties.

  • The findings of fact of the NLRC are conclusive and will not be disturbed unless there is a showing of grave abuse of discretion or that the findings are unsubstantiated by evidence. The NLRC is in the best position to formulate a CBA that is equitable to all concerned.

  • The NLRC has the authority to formulate a CBA that is equitable to all concerned.

  • In the absence of grave abuse of discretion, the findings of the NLRC on the terms of the CBA should not be disturbed.

  • The principles of compassionate justice observed in labor law and the dictates of reason should be considered in every adjudication.