G.R. No. 91025 - Union of Filipro Employees vs. National Labor Relations Commission

On June 22, 1988, the Union of Filipro Employees (UFE), as the sole and exclusive bargaining representative of Nestle Philippines’ rank-and-file employees, filed a Notice of Strike at the Department of Labor.
The Notice raised issues of a deadlock in collective bargaining negotiations and allegations of unfair labor practices.
The National Conciliation and Mediation Board (NCMB) convened a conference on February 4, 1988, to settle the dispute, although the private respondent (Nestle Philippines) initially challenged the legal personality of those behind the notice and later limited its negotiation panel to a subset of union officers.

Issues of Representative Authority and Collective Bargaining Agreements (CBAs)

Prior to the filed Notice of Strike, the respective CBAs in four Nestle units (Alabang/Cabuyao, Makati, Cagayan de Oro, and Cebu/Davao) had expired on June 30, 1987.
The union representation was split: for the Alabang/Cabuyao and Makati units, UFE had long-standing representation; for the Cagayan de Oro unit, representation was by WATU; while the Cebu/Davao unit was represented by TUPAS.
Shortly before the expiration of the CBAs, UFE submitted proposals to negotiate new agreements. The company signaled willingness to negotiate for some units but withheld discussions for Cagayan de Oro and Cebu/Davao pending resolution of representation issues.
On June 10, 1987, and July 28, 1987, UFE was certified as the sole bargaining representative for the Cagayan de Oro and Cebu/Davao units, respectively.

On September 14, 1987, the company terminated the employment of all UFE officers, including those in the negotiating panel, due to their participation in a strike staged on September 11, 1987, which had been conducted without proper strike notice or vote.
The union countered with a complaint for illegal dismissal on September 21, 1987. This complaint was upheld by the Labor Arbiter on January 12, 1988 and the decision later affirmed by the NLRC en banc on November 2, 1988.
The company argued that the termination effectively dissolved the negotiating panel and nullified their authority to represent the union.

On October 18, 1988, UFE filed a motion asking the Secretary of Labor to assume jurisdiction over the deadlock in collective bargaining.
On October 28, 1988, Labor Secretary Franklin Drilon certified the dispute—specifically concerning the Makati, Alabang, and Cabuyao units—to the NLRC for compulsory arbitration, ordering resolution within twenty (20) days.
On June 5, 1989, the Second Division of the NLRC promulgated a resolution granting wage increases, other benefits, and mandating that the parties sign a five-year CBA.
Dissatisfied with the resolution, UFE filed a motion for reconsideration on August 8, 1989, which was denied, prompting the filing of the petition for certiorari.

UFE raised multiple issues, originally enumerating 13 errors, and later narrowing them down to six primary issues addressing jurisdiction, scope of bargaining unit, effective date of the CBA, and alleged denial of benefits such as contract signing bonus and modified union shop clause.
The private respondent also moved to oppose the union’s urgent manifestations but was precluded to avoid delay as the Court sought an early disposition.

Whether the Second Division of the NLRC acted without jurisdiction by rendering the assailed resolution, given that the matter was originally certified for resolution en banc.
The contention centers on the impact of Republic Act 6715, which delegated adjudicatory functions to the individual divisions.

Whether the NLRC erred in holding that the CBA to be signed covers solely the bargaining unit comprising all regular rank-and-file employees at the Makati, Alabang, and Cabuyao units, excluding those from Cebu/Davao and Cagayan de Oro.
The union argued that exclusion of certain units undermines the representation of all its members.

Whether the NLRC committed grave abuse of discretion by ruling that the CBA is effective only upon the promulgation of the resolution (i.e., prospectively) rather than retrospectively, which would afford union members immediate benefit from wage increases and other entitlements.
This issue involves the interpretation of Articles 253 and 253-A of the Labor Code as amended, particularly regarding the renewal clause and retroactivity provisions.

Whether the public respondent erred in denying UFE’s demand for a contract signing bonus by disregarding established practice and tradition that would enrich employees’ benefits.

Whether the NLRC seriously erred in not granting the union’s demand for a modified union shop security clause despite settled jurisprudence favoring alterations in its favor.

Whether the NLRC committed error in completely absolving the company of the charge of unfair labor practices by failing to address the substantial incriminatory evidence relating to practices allegedly designed to delay the collective bargaining process.