View full case

NESTLE PHILIPPINES v. NLRC

FACTS:

The petitioner, Nestle Philippines, Inc., seeks to annul the decision of the National Labor Relations Commission (NLRC) modifying its non-contributory Retirement Plan. Four collective bargaining agreements covering employees in various factories and offices expired on June 30, 1987. The Union of Filipro Employees (UFE) was certified as the bargaining agent for the Cagayan de Oro factory and Cebu/Davao Sales Office. During negotiations, the Cabuyao factory employees engaged in a "slowdown" and walk-outs, leading to the factory's shutdown. The UFE declared a bargaining deadlock on September 2, 1987, and the company dismissed union officers and negotiating panel members who participated in an illegal strike. The NLRC affirmed the dismissals. The UFE filed a notice of strike on January 26, 1988, and the company concluded a new CBA with other employee groups. The dispute was certified to the NLRC, which modified the Retirement Plan. The company filed a petition for certiorari to annul the NLRC's decision, but it was dismissed by the court.

ISSUES:

  1. Whether the modification of the petitioner's existing non-contributory Retirement Plan is a valid collective bargaining issue.

  2. Whether the employees have a vested and demandable right to the existing benefits of the Retirement Plan.

RULING:

  1. The modification of the petitioner's existing non-contributory Retirement Plan is a valid collective bargaining issue. The Retirement Plan was included in the previous bargaining agreements and became an integral part of the collective bargaining negotiations. As such, it assumes a consensual character and cannot be terminated or modified at will by either party.

  2. The employees have a vested and demandable right to the existing benefits of the Retirement Plan. The fact that the retirement plan is non-contributory does not make it a non-issue in the CBA negotiations. Employees have a vested and demandable right over existing benefits voluntarily granted to them by their employer. The employer may not unilaterally withdraw, eliminate, or diminish such benefits.

PRINCIPLES:

  • The inclusion of a retirement plan in a collective bargaining agreement gives it a consensual character and makes it a valid collective bargaining issue.

  • Employees have a vested and demandable right over existing benefits voluntarily granted to them by their employer, and the employer cannot unilaterally withdraw, eliminate, or diminish such benefits.