NESTLÉ PHILIPPINES, INC v.

NLRC
G.R. No. 91231 February 4, 1991
Doctrines: 1. The fact that the retirement plan is non-contributory, i.e., that the employees contribute
nothing to the operation of the plan, does not make it a non-issue in the CBA negotiations. As a matter
of fact, almost all of the benefits that the petitioner has granted to its employees under the CBA—salary
increases, rice allowances, midyear bonuses, 13th and 14th month pay, seniority pay, medical and
hospitalization plans, health and dental services, vacation, sick & other leaves with pay—are non-
contributory benefits. Since the retirement plan has been an integral part of the CBA since 1972, the
Union’s demand to increase the benefits due the employees under said plan, is a valid CBA issue.

2. Petitioner’s contention that employees have no vested or demandable right to a non-contributory

retirement plan has no merit; Reason.—The petitioner’s contention, that employees have no vested or
demandable right to a non-contributory retirement plan, has no merit for employees do have a vested
and demandable right over existing benefits voluntarily granted to them by their employer. The latter
may not unilaterally withdraw, eliminate or diminish such benefits.

Facts: UFE was certified as the sole and exclusive bargaining agent for all regular rank-and-file
employees at the petitioner's Cagayan de Oro factory, as well as its Cebu/Davao Sales Office. August,
1987, while the parties, were negotiating, the employees at Cabuyao resorted to a "slowdown" and
walk-outs prompting the petitioner to shut down the factory. Marathon collective bargaining
negotiations between the parties ensued. On September 2, 1987, the UFE declared a bargaining
deadlock. On September 8, 1987, the Secretary of Labor assumed jurisdiction and issued a return to
work order. In spite of that order, the union struck, without notice, at the Alabang/Cabuyao factory, the
Makati office and Cagayan de Oro factory on September 11, 1987 up to December 8, 1987.

The company retaliated by dismissing the union officers and members of the negotiating panel who
participated in the illegal strike. The NLRC affirmed the dismissals. On January 26, 1988, UFE filed a
notice of strike on the same ground of CBA deadlock and unfair labor practices. However, on March 30,
1988, the company was able to conclude a CBA with the union at the Cebu/Davao Sales Office, and on
August 5, 1988, with the Cagayan de Oro factory workers. The union assailed the validity of those
agreements and filed a case of unfair labor practice against the company on November 16, 1988.
After conciliation efforts of the National Conciliation and Mediation Board (NCMB) yielded negative
results, the dispute was certified to the NLRC by the Secretary of Labor on October 28, 1988.

The dispute was certified to the NLRC. The NLRC issued a resolution on June 5, 1989, whose pertinent
disposition regarding the union's demand for liberalization of the company's retirement plan for its
workers. the NLRC issued a resolution denying the motions for reconsideration. With regard to the
Retirement Plan, the NLRC held that anent management's objection to the modification of its
Retirement Plan, the plan is specifically mentioned in the previous bargaining agreements there by
integrating or incorporating the provisions thereof to the agreement. By reason of its incorporation, the
plan assumes a consensual character which cannot be terminated or modified at will by either party.
Consequently, it becomes part and parcel of CBA negotiations. Petitioner alleged that since its
retirement plan is non-contributory, Nestle has the sole and exclusive prerogative to define the terms of
the plan because the workers have no vested and demandable rights, the grant thereof being not a
contractual obligation but merely gratuitous. At most the company can only be directed to maintain the
same but not to change its terms. It should be left to the discretion of the company on how to improve
or modify the same.
Issue: Whether the workers have vested and demandable rights over the retirement plan.
Held: YES. The Court ruled that employees have a vested and demandable right over the retirement
plan. The inclusion of the retirement plan in the collective bargaining agreement as part of the package
of economic benefits extended by the company to its employees to provide them a measure of financial
security after they shall have ceased to be employed in the company, reward their loyalty, boost their
morale and efficiency and promote industrial peace, gives "a consensual character" to the plan so that it
may not be terminated or modified at will by either party.

The fact that the retirement plan is non-contributory, i.e., that the employees contribute nothing to the
operation of the plan, does not make it a non-issue in the CBA negotiations. As a matter of fact, almost
all of the benefits that the petitioner has granted to its employees under the CBA — salary increases,
rice allowances, mid-year bonuses, 13th and 14th month pay, seniority pay, medical and hospitalization
plans, health and dental services, vacation, sick & other leaves with pay — are non-contributory
benefits. Since the retirement plan has been an integral part of the CBA since 1972, the Union's demand
to increase the benefits due the employees under said plan, is a valid CBA issue. The deadlock between
the company and the union on this issue was resolvable by the Secretary of Labor, or the NLRC, after the
Secretary had assumed jurisdiction over the labor dispute (Art. 263, subparagraph [i] of the Labor Code).
 MACTAN WORKERS UNION v. DON RAMON ABOITIZ
G.R. No. L-30241 June 30, 1972
Doctrines: 1. Collective bargaining agreement; Effect of.—The terms and conditions of a collective
bargaining contract constitute the law between the parties. Those who are entitled to its benefits can
invoke its provisions. In the event that an obligation therein imposed is not fulfilled, the aggrieved party
has the right to go to court for redress.

2. bargaining agreement benefits extend even to non-union members.—It is a well-settled doctrine that
the benefits of a collective bargaining agreement extend to the laborers and employees in the collective
bargaining unit, including those who do not belong to the chosen bargaining labor organization.

Facts: Cebu Shipyard & Engineering Works, Inc. in Lapulapu City is employing laborers and employees
belonging to two rival labor unions. Seventy-two of these employees or laborers whose names appear in
the complaint are affiliated with the Mactan Workers Union while the rest are members of the
intervenor Associated Labor Union. On November 28, 1964, the defendant Cebu Shipyard & Engineering
Works, Inc. and the Associated Labor Union entered into a 'Collective Bargaining Agreement' ... the
pertinent part of which, Article XIII thereof, [reads thus]: '... The [Company] agrees to give a profit-
sharing bonus to its employees and laborers to be taken from ten per cent (10%) of its net profits or net
income derived from the direct operation of its shipyard and shop in Lapulapu City and after deducting
the income tax and the bonus annually given to its General Manager and the Superintendent and the
members of the Board of Directors and Secretary of the Corporation, to be payable in two (2)
installments, the first installment being payable in March and the second installment in June, each year
out of the profits in agreement. In the computation of said ten per cent (10%) to [be] distributed as a
bonus among the employees and laborers of the [Company] in proportion to their salaries or wages,
only the income derived by the [Company] from the direct operation of its shipyard and shop in
Lapulapu City, as stated herein-above-commencing from the earnings during the year 1964, shall be
included. Said profit-sharing bonus shall be paid by the [Company] to [Associated Labor Union] to be
delivered by the latter to the employees and laborers concerned and it shall be the duty of the
Associated Labor Union to furnish and deliver to the [Company] the corresponding receipts duly signed
by the laborers and employees entitled to receive the profit-sharing bonus within a period of sixty (60)
days from the date of receipt by [it] from the [Company] of the profit-sharing bonus. If a laborer or
employee of the [Company] does not want to accept the profit-sharing bonus which the said employee
or laborer is entitled under this Agreement, it shall be the duty of the [Associated Labor Union] to return
the money received by [it] as profit-sharing bonus to the [Company] within a period of sixty (60) days
from the receipt by the [Union] from the [Company] of the said profit-sharing bonus.

In 1965, Cebu Shipyard delivered the bonus to Associated Labor Union, for the months of March and
June. Members of the Mactan Workers Union failed to receive their shares in the second installment of
bonus because they did not like to go to the office of the ALU to collect their shares. In accordance with
the terms of the collective bargaining after 60 days, the uncollected shares of the plaintiff union
members were returned by the ALU to the defendant corporation.

Issue: Whether members of the rival union are also entitled to the bonus

Held: YES. The terms and conditions of a collective bargaining contract constitute the law between the
parties. Those who are entitled to its benefits can invoke its provisions. In the event that an obligation
therein imposed is not fulfilled, the aggrieved party has the right to go to court for redress. Nor does it
suffice as a defense that the claim is made on behalf of non-members of intervenor Associated Labor
Union, for it is a well-settled doctrine that the benefits of a collective bargaining agreement extend to
the laborers and employees in the collective bargaining unit, including those who do not belong to the
chosen bargaining labor organization. Any other view would be a discrimination on which the law
frowns. It is appropriate that such should be the case. As was held in United Restauror's Employees and
Labor Union v. Torres, this Court speaking through Justice Sanchez, "the right to be the exclusive
representative of all the employees in an appropriate collective bargaining unit is vested in the labor
union 'designated or selected' for such purpose 'by the majority of the employees' in the unit
concerned."9 If it were otherwise, the highly salutory purpose and objective of the collective bargaining
scheme to enable labor to secure better terms in employment condition as well as rates of pay would be
frustrated insofar as non-members are concerned, deprived as they are of participation in whatever
advantages could thereby be gained. The labor union that gets the majority vote as the exclusive
bargaining representative does not act for its members alone. It represents all the employees in such a
bargaining unit. It is not to be indulged in any attempt on its part to disregard the rights of non-
members. Yet that is what intervenor labor union was guilty of, resulting in the complaint filed on behalf
of the laborers, who were in the ranks of plaintiff Mactan Labor Union.
 SANTOS JUAT V. CIR
G.R. No. L-20764 November 29, 1965
Doctrine: Collective bargaining agreement; Closed-shop proviso; Employees bound.—The closed-shop
proviso' of a collective bargaining agreement entered into between an employer and a duly authorized
Iabor union is- applicable not only to the employees or laborers that are employed after the collective
bargaining agreement had been entered into but also to old employees who are not members of any
labor union at the time the said collective bargaining agreement was entered into. In other words, if an
employee or laborer is already a member of labor union different from the contracting labor unions said
employee or worker cannot be obliged to become a member of that union as a condition for his
continued employment, Upon the other hand, if said employee or worker is a non-member of any labor
union, he can be compelled to join the contracting labor union, and his refusal to do so would constitute
a justifiable basis for dismissal

Facts: Santos Juat before the Court of Industrial Relations against respondents Bulaklak Publications and
its Executive Officer, Acting Prosecutor Alberto Cruz of the Court of Industrial Relations filed a
complaint, docketed as Case No. 2889-ULP, charging Bulaklak Publications and/or Juan N. Evangelista of
unfair labor practice within the meaning of Section 4 (a) subsections 1, 4 and 5 of Republic Act 875,
alleging, among others, that complainant Santos Juat was an employee of the respondent company
since August 1953; that on or about July 15, 1960, and on several occasions thereafter, complainant
Santos Juat was asked by his respondent employer to join the Busocope Labor Union, but he refused to
do so; that respondent employer suspended him without justifiable cause; that two separate cases were
filed by complainant against the respondents.

On December 1, 1959, a collective bargaining agreement was entered into between the Bulaklak
Publications and the BUSOCOPE LABOR UNION, to remain in effect for 3 years, and renewable for
another term of 3 years. Section 4 of said agreement contains a closed shop proviso. On December 27,
1960, said Section 4 of said agreement was amended to read as follows:

"All employees and/or workers who on January 1, 1960 are members of the Union in good standing in
accordance with its Constitution and By-Laws and all members who become members after that date
shall, as a condition of employment, maintain their membership in the Union for the duration of this
Agreement. All employees and/or workers who on January 1, 1961 are not yet members of the Union
shall, as a condition of maintaining their employment, become members of such union."

Respondent Bulaklak Publications averred that because of the refusal of Santos Juat to become a
member of said Union, Mr. Juan N. Evangelists, the executive officer of respondent company, suspended
him for 15 days. After the expiration of the suspension of Santos Juat, Mr. Evangelista addressed a letter
to the former, ordering him to report back for duty, and in spite of said letter, Santos Juat did not report
for work, consequently, Santos Juat was dropped from the service of the company. Juat could afford not
to report for duty because he has his own business by the name of JUAT PRINTING PRESS CO., INC. The
refusal of Santos Juat to become a member of the Busocope Labor Union as well as his refusal to report
for work when ordered by his superior officer, shows the lack of respect on the part of Santos Juat
toward his superior officer. With such attitude, the continuation in the service of the company of Santos
Juat is indeed inimical to the interest of his employer.

Issue: Whether the refusal of Santos Juat from joining the BUSOCOPE LABOR UNION is a valid ground for
dismissal
Held: YES. A closed-shop agreement has been considered as one form of union security whereby only
union members can be hired and workers must remain union members as a condition of continued
employment. The requirement for employees or workers to become members of a union as a condition
for employment redounds to the benefit and advantage of said employees because by holding out to
loyal members a promise of employment in the closed-shop the union wields group solidarity. In fact, it
is said that "the closed-shop contract is the most prized achievement of unionism”

This Court had categorically held in the case of Freeman Shirt Manufacturing Co., Inc., et al. vs. Court of
Industrial Relations, et al., that the closed-shop proviso of a collective bargaining agreement entered
into between an employer and a duly authorized labor union is applicable not only to the employees or
laborers that are employed after the collective bargaining agreement had been entered into but also to
old employees who are not members of any labor union at the time the said collective bargaining
agreement was entered into. In other words, if an employee or laborer is already a member of a labor
union different from the union that entered into a collective bargaining agreement with the employer
providing for a closed-shop, said employee or worker cannot be obliged to become a member of that
union which had entered into a collective bargaining agreement with the employer as a condition for
his continued employment.

It being established by the evidence that petitioner Santos Juat, although an old employee of the
respondent Bulaklak Publications, was not a member of any labor union at the time when the collective
bargaining agreement in question was entered into he could be obliged by the respondent Bulaklak
Publications to become a member of the Busocope Labor Union. And because petitioner refused to join
the Busocope Labor Union respondent Bulaklak Publications was justified in dismissing him from the
service on the ground that he had refused to join said union.
We, therefore, hold that the respondent Court of Industrial Relations did not err, nor did it commit a
grave abuse of discretion, when it decided that the respondent Bulaklak Publications did not commit
unfair labor practice when it dismissed petitioner because of his refusal to join the Busocope labor
union.