Insular Hotel Employees Union-NFL vs Waterfront Insular Hotel Davao

GR. Nos. 174040-41. September 22, 2010 

 

FACTS:

That sometime in 2000, respondent Waterfront sent DOLE Region XI a Notice of Suspension of Operations (to be implemented for 6 months) due to serious business losses.

During the period of suspension, DIHFEU-NFL, the recognized labor organization of Waterfront, sent a proposed agreement to help the company resume its business and for employees to keep their jobs. In the proposal, the union agreed to lessen the then wage of employees and expressly waived its rights to renegotiate the same, among others. Thus, in 2001, respondent resumed its business operations. However, in 2002, the mother federation of the union filed a complaint before the NCMV alleging that the diminution of wage and benefits were done through an unlawful moa. The MOA was also not signed and ratifies, as required in the union's CBL.

 

ISSUE:

Whether or not the diminution of wage was unlawful.

 

RULING: 

No. The labor code does not prohibit a union from offering and agreeing to reduce wages and benefits of the employees. The right to free collective bargaining, as stated in jurisprudence, includes the right to suspend it.

Furthermore, although the MOA was not ratified in accordance to its CBL, the same does not render it invalid. The record shows that after the MOA was signed, the members of the union individually signed the reconfirmation of employment which contained the new salary and benefits scheme.