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TechNova Industries, a manufacturing plant, is bound by a two-year Collective Bargaining Agreement (CBA) from January 1, 2024 to December 31, 2025. Economic terms fix a daily wage of 1,500 PHP; a 3% cost‑of‑living adjustment after 12 months; overtime pay 25% beyond 8 hours. Non-economic terms include a five‑day workweek; health insurance for employees and dependents; and a 60‑day transfer notice. The CBA contains a clause stating that management prerogative exists but terms and conditions of employment may be altered only by mutual agreement. On May 12, 2025, due to a severe downturn, management unilaterally reduces the daily wage to 1,350 PHP; suspends the COLA for the remainder of the term; narrows health coverage to employee only; shifts the workweek from five days to six days, with no additional compensation; and imposes a two-week layoff with no pay. The TechNova Workers Union files complaints with the NLRC for breach of contract and unfair labor practices, seeking restoration of the CBA terms and damages. (a) Is management’s unilateral action lawful? Explain, identifying the controlling doctrine and applying it to the facts. (b) If not lawful, what remedies are available to the union and employees?

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Clara

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