GUAGUA NATIONAL COLLEGES VS. GUAGUA NATIONAL COLLEGES FACULTY LABOR UNION AND GUAGUA NATIONAL COLLEGES NON-TEACHING AND MAINTENANCE LABOR UNION, G.R. NO. 252101 (MARCH 5, 2025): RESTATEMENT OF THE JURISDICTION OF THE NATIONAL LABOR RELATIONS COMMISSION TO ENFORCE TERMS OF A COLLECTIVE BARAGAINING AGREEMENT (CBA) WHEN THE CASE INVOLVES GROSS VIOLATIONS OF THE CBA AMOUNTING TO UNFAIR LABOR PRACTICE

BY ATTY. JULIUS GREGORY B. DELGADO 

The case stems from the Writ of Execution issued by the National Labor Relations Commission (NLRC) in connection with G.R. No. 204693 entitled Guagua National Colleges vs. Guagua National Colleges Faculty Labor Union. In the said case, the Supreme Court found the petitioner guilty of bargaining in bad faith considering that during the renegotiation of their Collective Bargaining Agreement (CBA) for the period of June 1, 2009 to May 31, 2014 and the preventive mediation before the National Conciliation and Mediation Board (NCMB), petitioner GNC showed bad faith therein as the parties supposedly came up with a final draft of the CBA already but later on effectively repudiated by petitioner GNC when its counsel asked for time to submit another counterproposal but later on did not show up. The unions then filed their notice of strike for bargaining in bad faith, violation of its duty to bargain, gross violations of their CBA, and gross and blatant diminution of benefits since petitioner GNC supposedly stopped granting certain benefits to its employees. 

The Secretary of Labor and Employment assumed jurisdiction and certified the case for compulsory arbitration before the NLRC. In its Decision dated March 31, 2011, the NLRC held that petitioner committed unfair labor practice by not bargaining in bad faith. Petitioner GNC challenged the same up to the Supreme Court and the Court still ruled in favor of the unions. The Court held that the school’s failure to follow through and to belatedly raise the issue of financial incapacity to delay the execution of the CBA were anathema to good faith bargaining. The Court affirmed the NLRC’s ruling in declaring the final draft submitted to the NCMB should serve as parties’ CBA from June 1, 2009 to May 31, 2014. 

The unions sought to execute the judgment and the NLRC directed the immediate issuance of a Writ of Execution to collect from petitioner GNC the monetary award of Php4,676,288.32 covering unimplemented economic benefits under the parties’ CBA, i.e., rice subsidy, longevity pay, emergency relief allowance, and signing bonus. Petitioner GNC moved for reconsideration but the same was rebuffed by the NLRC, hence, its recourse to the Court of Appeals. The Court of Appeals partly granted the petition and excluded the signing bonus from the monetary award granted by the NLRC. However, it maintained the award for rice subsidy, longevity pay, and emergency relief allowance in favor of the unions. 

In its Decision dated March 5, 2025, the Supreme Court restated its jurisdiction of the NLRC on unfair labor practice and violations to the duty to bargain collectively. The Court held that the power to enforce terms of the CBA, including redress of perceived violations thereof, does not exclusively reside with voluntary arbitrators or the NCMB as Article 264 of the Labor Code provides that, x x x “violations of a Collective Bargaining Agreement, except those which are gross in character, shall no longer be treated as unfair labor practice and shall be resolved as grievances under the Collective Bargaining Agreement. x x x” Hence, violations of the CBA which are gross in character may be cognizable by the NLRC on a compulsory arbitration. 

The Supreme Court further held that having such jurisdiction, it implies the necessary and usual incidental powers to effectuate it – also referred as incidental jurisdiction. The Court held that since the case is a compulsory arbitration case borne of the breakdown of negotiations between the parties which would have resulted in a strike had the Secretary of Labor and Employment not assumed jurisdiction over the dispute, the NLRC has jurisdiction to rule on the same and implement/execute its decision. The Court rebuked the stance of petitioner GNC when it argued that further implementation of the ruling should be lodged before the NCMB as it is already interpretation of the terms of their CBA from June 1, 2009 to May 31, 2014. The Court held that to subscribe to such argument would promote multiplicity of suits and prolog the settlement of the rights and obligations between the parties. 

On the substantive aspect, the Supreme Court clarified, however, that the NLRC committed grave abuse of discretion in excess of its jurisdiction when it included and enforced the signing bonus and erred in its computation of the unimplemented CBA benefits from June 1, 2009 up to the present date, at the time, was 2017. On the signing bonus, the Supreme Court held that that a signing bonus is a grant motivated by the goodwill generated when a CBA is successfully negotiated and signed between the employer and the union. As no CBA was successfully negotiated by the parties and it was NLRC which determined their final draft submitted to the NCMB as their CBA, then no signing bonus can be granted. On the second issue of extending the CBA benefits beyond the period of the CBA, the Supreme Court held that while NLRC has the incidental jurisdiction to give effects to its rulings and consider supervening events, it cannot alter the metes and bounds of a final and executory decision without violating the principle of immutability of judgment. Applying the case of General Milling Corporation – Independent Labor Union vs. General Milling Corporation¸ G.R. No. 183122 (June 15, 2011), the Supreme Court held that the NLRC should confine its computation of benefits up to May 31, 2014 only. Any dispute as to economic benefits after the said date, including the covered employees thereof, should undergo the usual grievance machinery and referral to voluntary arbitration as contained in the parties CBA.