GR 91231; (February, 1991) (Digest)
G.R. No. 91231 ; February 4, 1991
Nestlé Philippines, Inc., petitioner, vs. The National Labor Relations Commission and Union of Filipro Employees, respondents.
FACTS
The collective bargaining agreements covering Nestlé Philippines, Inc.’s employees expired on June 30, 1987. The Union of Filipro Employees (UFE) was later certified as the sole bargaining agent for all regular rank-and-file employees. During negotiations, a bargaining deadlock was declared, leading to a strike. The Secretary of Labor assumed jurisdiction over the dispute. While Nestlé subsequently concluded CBAs with other bargaining units, a deadlock with UFE persisted, particularly on the issue of liberalizing the company’s existing non-contributory Retirement Plan. The dispute was certified to the NLRC for compulsory arbitration.
The NLRC, in its resolution, modified the existing Retirement Plan by increasing the monetary benefits based on years of service. Nestlé moved for reconsideration, arguing that as a non-contributory plan, it was a gratuitous benefit subject solely to management prerogative and not a mandatory subject of collective bargaining. The NLRC denied the motion, holding that the plan, having been incorporated into previous CBAs, assumed a consensual character and was a proper bargaining issue. Nestlé filed this petition for certiorari, alleging grave abuse of discretion.
ISSUE
Whether the NLRC committed grave abuse of discretion in modifying the terms of Nestlé’s non-contributory Retirement Plan as part of resolving the collective bargaining deadlock.
RULING
The Supreme Court dismissed the petition, upholding the NLRC’s decision. The legal logic is clear: benefits voluntarily granted by an employer, including non-contributory retirement plans, become part of the employees’ compensation package and, when integrated into a CBA, assume a consensual character. They cannot be unilaterally withdrawn or modified by the employer. Article 100 of the Labor Code prohibits the elimination or diminution of existing benefits.
The Court found that the Retirement Plan had been an integral part of successive CBAs since 1972, making its improvement a valid collective bargaining issue. The fact that the plan is non-contributory does not remove it from the ambit of negotiations, as many CBA benefits (e.g., salary increases, bonuses) are similarly non-contributory. A bargaining deadlock on this issue was therefore properly subject to compulsory arbitration by the NLRC following the Secretary of Labor’s assumption of jurisdiction under Article 263(g) of the Labor Code.
The NLRC’s modification was not arbitrary but based on a reasoned evaluation of the union’s demands, the company’s financial capacity, industry trends, and economic conditions. Consequently, the NLRC acted within its jurisdiction and without grave abuse of discretion in resolving the deadlock by awarding improved retirement benefits.