Nestle Distorting the Decision of the Supreme Court of the Philippines

April 23,2008

Greetings,

The management of Nestle Phils. Inc. has recently been circulating a letter explaining its side on the protracted labor dispute which has embroiled the company and its workers. Implicit on the said letter is the suggestion that the management is not to be blamed for the dispute considering that the Supreme Court has absolved it from the charge of unfair labor practice.

With due respect, we beg to disagree.

The labor dispute has its roots on management's insistence that the Retirement Plan shall not be included on the issues to be discussed in the CBA. Management made it clear that unless the union will accept this proposal, management will not be willing to proceed with the rest of the CBA. It was this overbearing attitude of the management which led the union to declare a strike and staged a picket against the company.

And how did the Supreme Court resolve the issue? The Supreme Court ruled in favor of the union by declaring that the Retirement Plan is an issue that may be discussed in the CBA. Allow us to quote the August 22, 2006 Decision of the Supreme Court on this matter:

" In the case at bar, it cannot be denied that the CBA that was about to expire at that time contained provisions respecting the Retirement Plan. As the latter benefit was already subject of the existing CBA, the members of UFE-DFA-KMU were only exercising their prerogative to bargain or renegotiate for the improvement of the terms of the Retirement Plan just like they would for all the other economic, as well as non-economic benefits previously enjoyed by them. Precisely, the purpose of collective bargaining is the acquisition or attainment of the best possible covenants or terms relating to economic and non-economic benefits granted by employers and due the employees. The Labor Code has actually imposed as a mutual obligation of both parties, this duty to bargain collectively. The duty to bargain collectively is categorically prescribed by Article 252 of the said code. It states:

ART. 252. MEANING OF DUTY TO BARGAIN COLLECTIVELY. – The duty to bargain collectively means the performance of a mutual obligation to meet and confer promptly and expeditiously and in good faith for the purpose of negotiating an agreement with respect to wages, hours of work, and all other terms and conditions of employment including proposals for adjusting any grievances or questions arising under such agreement and executing a contract incorporating such agreement if requested by either party, but such duty does not compel any party to agree to a proposal or to make any concession.

Further, Article 253, also of the Labor Code, defines the parameter of said obligation when there already exists a CBA, viz:

ART. 253. DUTY TO BARGAIN COLLECTIVELY WHEN THERE EXISTS A COLLECTIVE BARGAINING AGREEMENT. – The duty to bargain collectively shall also mean that either party shall not terminate nor modify such agreement during its lifetime. However, either party can serve a written notice to terminate or modify the agreement at least sixty (60) days prior to its expiration date. It shall be the duty of both parties to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement during the sixty day period and/or until a new agreement is reached by the parties.

And, in demanding that the terms of the Retirement Plan be opened for renegotiation, the members of UFE-DFA-KMU are acting well within their rights as we have, indeed, declared that the Retirement Plan is consensual in character; and so, negotiable.

Contrary to the claim of Nestlé that the categorical mention of the terms ‘unilateral agreement’ in the letter and the MOA signed by the representatives of UFE-DFA-KMU, had, for all intents and purposes worked to estop UFE-DFA-KMU from raising it as an issue in the CBA negotiations, our reading of the same, specifically Paragraph 6 and subparagraph 6.2:

6. Additionally, the COMPANY agree to extend the following unilateral grants which shall not form part of the Collective Bargaining Agreement (CBA):

x x x x

6.2. Review for improvement of the COMPANY’s Retirement Plan and the reference on the Retirement Plan in the Collective Bargaining Agreement signed on 4 July 1995 shall be maintained. [43]

hardly persuades us that the members of UFE-DFA-KMU have agreed to treat the Retirement Plan as a benefit the terms of which are solely dependent on the inclination of the Nestlé and remove the subject benefit from the ambit of the CBA. The characterization unilaterally imposed by Nestlé on the Retirement Plan cannot operate to divest the employees of their “vested and demandable right over existing benefits voluntarily granted by their employer.”[44] Besides, the contention that UFE-DFA-KMU has “abandoned” or forsaken our earlier pronouncement vis-à-vis the consensual nature of a retirement plan is quite inconsistent with, nay, is negated by its conduct in doggedly asking for a renegotiation of said benefit.

Worth noting, at this point, is the fact that the aforequoted paragraph 6 and its subparagraphs, particularly subparagraph 6.2, highlights an undeniable fact – that Nestlé recognizes that the Retirement Plan is part of the existing Collective Bargaining Agreement."

It is thus clear the that position of the management on the Retirement Plan, which precipitated the strike, was declared wrong by the Supreme Court. Had the management acted reasonably, the disturbance in industrial peace would not have occurred.

Management tries to lessen the impact of its erroneous action by claiming that it has been absolved from the charge of unfair labor practice. The Supreme Court absolved the management from the charge of unfair labor practice, however, due to certain defects in the notice of strike filed by the union. Still, this does not erase the fact that it was management's attempt to remove the Retirement Plan from the scope of the CBA which started all of these disputes.

As things now stand, it is impossible for Nestle Phils. to wash its hand of guilt on the matter. Presently, there are 616 of us who are still out of work and are expected to continue picketing for our rights. While we remain open to a comprehensive and mutually satisfying settlement of the case, we believe that it can best be done in an atmosphere where the truth is being allowed to circulate instead of being distorted.

We hope we have given our side.

Yours respectfully,

JOSE NOEL ALEMANIA

Acting President