The authority of the National Labor Relations Commission (NLRC) to execute the terms of a Collective Bargaining Agreement (CBA) in cases involving unfair labor practices (ULP) was affirmed by the Supreme Court.
In a decision penned by Associate Justice Japar B. Dimaampao dated 5 March 2025, the SC’s Third Division upheld the NLRC’s order directing Guagua National Colleges (GNC) to pay its employees the agreed economic benefits but adjusted how those benefits were computed.
Records showed the case arose from negotiations in 2009 to renew the five-year CBA between GNC and its unions. Although GNC agreed to provide benefits such as a rice subsidy, loyalty pay, and clothing allowance, it continued to delay signing the draft CBA. Frustrated, the unions filed a notice of strike, accusing GNC of bad faith and serious CBA violations. To prevent the strike, the Secretary of Labor and Employment stepped in and referred the case to the NLRC for compulsory arbitration.
The NLRC ruled that GNC bargained in bad faith, which is an unfair labor practice. It also declared the final CBA draft as the parties’ agreement.
After its decision became final, the NLRC ordered GNC to pay its employees the agreed benefits covering 2009 up to the present date, which at that time was 2017.
However, GNC questioned the order directing them to pay, arguing that only voluntary arbitrators—not the NLRC—had the power to enforce the CBA terms.
The Court of Appeals (CA) upheld the NLRC’s order.
The SC agreed with the CA. It clarified that while voluntary arbitrators generally handle CBA implementation, the Labor Code authorizes the NLRC to enforce CBA provisions when gross violations amounting to ULP are involved.
The NLRC, in this case, determined that GNC engaged in ULP by bargaining in bad faith and also declared the final CBA draft to be the official agreement between the two parties.
After reviewing the CBA, the NLRC was best positioned to enforce it. Sending the case to voluntary arbitrators for implementation would only cause delays, increase the likelihood of multiple lawsuits, and prolong the resolution of rights and obligations between the parties.
But the SC ruled that the computation of benefits was incorrect and held that the computation should exclude the signing bonus and cover only the five-year CBA term or the years 2009 to 2014.