[G.R. No. 192601. June 3, 2013.

]
PHILIPPINE JOURNALISTS, INC., petitioner, vs. JOURNAL EMPLOYEES UNION (JEU),
FOR ITS UNION MEMBER, MICHAEL ALFANTE, respondents.

Facts:

Pulido was hired as proofreader while Alfante was hired as computer technician. They both
claimed that they were illegally dismissed. Labor Arbiter ruled in their favor and ordered for
reinstatement and payment of backwages.

Held:

A collective bargaining agreement (or CBA) refers to the negotiated contract between a
legitimate labor organization and the employer concerning wages, hours of work and all other
terms and conditions of employment in a bargaining unit. As in all contracts, the parties in a
CBA may establish such stipulations, clauses, terms and conditions as they may deem
convenient provided these are not contrary to law, morals, good customs, public order or public
policy. Thus, where the CBA is clear and unambiguous, it becomes the law between the parties
and compliance therewith is mandated by the express policy of the law.

Here, a conflict has arisen regarding the interpretation of the term legal dependent in connection
with the grant of funeral and bereavement aid to a regular employee under Section 4, Article XIII
of the CBA, 23 which stipulates as follows: ACTISD
SECTION 4. Funeral/Bereavement Aid. — The COMPANY agrees to grant a
funeral/bereavement aid in the following instances:
a. Death of a regular employee in line of duty — P50,000
b. Death of a regular employee not in line of duty — P40,000
c. Death of legal dependent of a regular employee — P15,000. (Emphasis supplied)

Petitioner insists that notwithstanding the silence of the CBA, the term legal dependent should
follow the definition of it under Republic Act (R.A.) No. 8282 (Social Security Law), so that in the
case of a married regular employee, his or her legal dependents include only his or her spouse
and children, and in the case of a single regular employee, his or her legal dependents include
only his or her parents and siblings, 18 years old and below; and that the term dependents has
the same meaning as beneficiaries as used in Section 5, Article XIII of the CBA.

Considering that existing laws always form part of any contract, and are deemed incorporated in
each and every contract, 28 the definition of legal dependents under the aforecited social
legislations applies herein in the absence of a contrary or different definition mutually intended
and adopted by the parties in the CBA.

In this regard, the differentiation among the legal dependents is significant only in the event the
CBA has prescribed a hierarchy among them for the granting of a benefit; hence, the use of the
terms primary beneficiaries and secondary beneficiaries for that purpose. But considering that
Section 4, Article XIII of the CBA has not included that differentiation, petitioner had no basis to
deny the claim for funeral and bereavement aid of Alfante for the death of his parent whose
death and fact of legal dependency on him could be substantially proved.

Pursuant to Article 100 of the Labor Code, petitioner as the employer could not reduce,
diminish, discontinue or eliminate any benefit and supplement being enjoyed by or granted to its
employees. This prohibition against the diminution of benefits is founded on the constitutional
mandate to protect the rights of workers and to promote their welfare and to afford labor full
protection. 29 The application of the prohibition against the diminution of benefits presupposes
that a company practice, policy or tradition favorable to the employees has been clearly
established; and that the payments made by the employer pursuant to the practice, policy, or
tradition have ripened into benefits enjoyed by them. 30 To be considered as a practice, policy
or tradition, however, the giving of the benefits should have been done over a long period of
time, and must be shown to have been consistent and deliberate. 31 It is relevant to mention
that we have not yet settled on the specific minimum number of years as the length of time
sufficient to ripen the practice, policy or tradition into a benefit that the employer cannot
unilaterally withdraw. 32

The argument of petitioner that the grant of the funeral and bereavement benefit was not
voluntary but resulted from its mistaken interpretation as to who was considered a legal
dependent of a regular employee deserves scant consideration. To be sure, no doubtful or
difficult question of law was involved inasmuch as the several cogent statutes existing at the
time the CBA was entered into already defined who were qualified as the legal dependents of
another. Moreover, the voluntariness of the grant of the benefit became even manifest from
petitioner's admission that, despite the memorandum it issued in 2000 33 in order to "correct"
the interpretation of the term legal dependent, it still approved in 2003 the claims for funeral and
bereavement aid of two employees. It is further worthy to note that petitioner granted claims for
funeral and bereavement aid as early as 1999, then issued a memorandum in 2000 to correct
its erroneous interpretation of legal dependent under Section 4, Article XIII of the CBA. This
notwithstanding, the 2001-2004 CBA 35 still contained the same provision granting funeral or
bereavement aid in case of the death of a legal dependent of a regular employee without
differentiating the legal dependents according to the employee's civil status as married or single.

The continuity in the grant of the funeral and bereavement aid to regular employees for the
death of their legal dependents has undoubtedly ripened into a company policy. With that, the
denial of Alfante's qualified claim for such benefit pursuant to Section 4, Article XIII of the CBA
violated the law prohibiting the diminution of benefits.
[G.R. No. 198783. April 15, 2013.]
ROYAL PLANT WORKERS UNION, petitioner, vs. COCA-COLA BOTTLERS PHILIPPINES,
INC.-CEBU PLANT, respondent.

Facts:

In 1974, the bottling operators of then Bottling Line 2 were provided with chairs upon their
request. In 1988, the bottling operators of then Bottling Line 1 followed suit and asked to be
provided also with chairs. Their request was likewise granted. Sometime in September 2008,
the chairs provided for the operators were removed pursuant to a national directive of petitioner.
This directive is in line with the "I Operate, I Maintain, I Clean" program wherein every bottling
operator is given the responsibility to keep the machinery and equipment assigned to him clean
and safe. The program reinforces the task of bottling operators to constantly move about in the
performance of their duties and responsibilities.

Held:

The removal of the chairs was designed to increase work efficiency. Hence, CCBPI's exercise of
its management prerogative was made in good faith without doing any harm to the workers'
rights.

The operators' chairs cannot be considered as one of the employee benefits covered in Article
100 of the Labor Code. In the Court's view, the term "benefits" mentioned in the non-diminution
rule refers to monetary benefits or privileges given to the employee with monetary equivalents.
Such benefits or privileges form part of the employees' wage, salary or compensation making
them enforceable obligations.

CA: [Article 100] speaks of non-diminution of supplements and other employee benefits.
Supplements are privileges given to an employee which constitute as extra remuneration
besides his or her basic ordinary earnings and wages. From this definition, We can only deduce
that the other employee benefits spoken of by Article 100 pertain only to those which are
susceptible of monetary considerations. Indeed, this could only be the most plausible conclusion
because the cases tackling Article 100 involve mainly with monetary considerations or privileges
converted to their monetary equivalents.

Without a doubt, equating the provision of chairs to the bottling operators as something within
the ambit of "benefits" in the context of Article 100 of the Labor Code is unduly stretching the
coverage of the law. The interpretations of Article 100 of the Labor Code do not show even with
the slightest hint that such provision of chairs for the bottling operators may be sheltered under
its mantle. Jurisprudence recognizes the exercise of management prerogatives. Labor laws also
discourage interference with an employer's judgment in the conduct of its business. For this
reason, the Court often declines to interfere in legitimate business decisions of employers. The
law must protect not only the welfare of the employees, but also the right of the employers.
[G.R. No. 175492. February 27, 2013.]
CARLOS L. OCTAVIO, petitioner, vs. PHILIPPINE LONG DISTANCE TELEPHONE
COMPANY, respondent.

Facts:

On May 28, 1999, PLDT and Gabay ng Unyon sa Telekomunikasyon ng mga Superbisor
(GUTS) entered into a CBA covering the period January 1, 1999 to December 31, 2001 (CBA of
1999-2001). In this CBA, the Company agreed to grant an across-the-board salary increase
during the 3 years covered by the Agreement:
Effective January 1, 1999 — 10% of basic wage or P2,000.00 whichever is higher;
Effective January 1, 2000 — 11% of basic wage or P2,250.00 whichever is higher;
Effective January 1, 2001 — 12% of basic wage or P2,500.00 whichever is higher.

In 2000, PLDT hired Octavio as Sales System Analyst on a probationary status. He was
regularized on January 1, 2001 and was receiving a monthly basic salary of Php10,000.00. On
February 1, 2002, he was promoted and his salary was increased from to Php13,730.00.

On May 31, 2002, PLDT and GUTS entered into another CBA covering the period January 1,
2002 to December 31, 2004 (CBA of 2002-2004) which provided for the following salary
increases: 8% of basic wage or P2,000.00 whichever is higher for the first year (2002); 10% of
basic wage or P2,700.00 whichever is higher for the second year (2003); and, 10% of basic
wage or P2,400.00 whichever is higher for the third year (2004).

Octavio claimed that he was not given the salary increase in 2001 and 2002.

Accordingly, the Grievance Committee convened on October 7, 2002 consisting of

representatives from PLDT and GUTS. The Grievance Committee, however, failed to reach an
agreement. In effect, it denied Octavio's demand for salary increases. The Committee ruled that:
1. Upon the effectivity of his promotion on February 1, 2002, his basic monthly salary was
adjusted to P13,730.00, the minimum salary of the new position
2. Octavio's basic salary was recomputed to include the P2,000.00 1st year increase
retroactive January 2002. The resulting basic salary was P12,000.00.
3. Applying the above-mentioned policy, Mr. Octavio's basic salary was adjusted to the
minimum salary of the new position, which is P13,730.00

Held:

Octavio's argument that the denial of his claim for salary increases constitutes a violation of
Article 100 27 of the Labor Code is devoid of merit. Even assuming that there has been a
diminution of benefits on his part, Article 100 does not prohibit a union from offering and
agreeing to reduce wages and benefits of the employees as the right to free collective
bargaining includes the right to suspend it. 28 PLDT averred that one of the reasons why
Octavio's salary was recomputed as to include in his salary of P13,730.00 the P2,000.00
increase for 2002 is to avoid salary distortion. At this point, it is well to emphasize that
bargaining should not be equated to an "adversarial litigation where rights and obligations are
delineated and remedies applied." 29 Instead, it covers a process of finding a reasonable and
acceptable solution to stabilize labor-management relations to promote stable industrial peace.
30 Clearly, the Committee Resolution was arrived at after considering the intention of both
PLDT and GUTS to foster industrial peace.
[G.R. No. 197353. April 1, 2013.]
ALEXANDER B. BAÑARES, petitioner, vs. TABACO WOMEN'S TRANSPORT SERVICE 1
COOPERATIVE (TAWTRASCO), represented by DIR. RENOL BARCEBAL, ET AL.,

Facts:
Petitioner was for some time the general manager of Tabaco Women's Transport Service
Cooperative (TAWTRASCO) until its management, on March 6, 2006, terminated his services.
Petitioner filed a complaint for illegal dismissal and payment of monetary claims. Labor Arbiter
ruled that petitioner was illegally dismissed and ordered for reinstatement and payment of
backwages.

Owing to the strained employer-employee relationship perceived to exist between them,

TAWTRASCO offered to pay petitioner separation pay of PhP172,296, but petitioner rejected
the offer. Eventually, the two entered into a Compromise Agreement, in which petitioner waived
a portion of his monetary claim, specifically his backwages for the period from August 23, 2006
to February 5, 2007, and agreed that the amount due shall be payable in three (3) installments.
In turn, TAWTRASCO undertook to reinstate the petitioner effective February 6, 2007.

On February 24, 2007, petitioner received a copy of Memorandum Order No. 04, 9 Series of
2007, with a copy of a resolution passed by the Board of Directors (BOD) of TAWTRASCO,
requiring him to report at the company's Virac, Catanduanes terminal. Petitioner requested for a
monthly lodging accommodation allowance of PhP1,700 for the duration of his stay in Virac. The
Company denied petitioner's plea for cash lodging allowance. Instead of a straight cash
allowance, the company urged petitioner to use the Virac office for lodging purposes.

It was then discovered that petitioner had not reported for work. When asked to explain,
Petitioner claimed that the reinstatement effected by the company which is supposed to be in
pursuance to the NLRC decision is nothing but an artificial, fake, fictitious and a sham kind of
return to work order.

Held:
Reinstatement, as a labor law concept, means the admission of an employee back to work
prevailing prior to his dismissal; 18 restoration to a state or position from which one had been
removed or separated, which presupposes that there shall be no demotion in rank and/or
diminution of salary, benefits and other privileges; if the position previously occupied no longer
exists, the restoration shall be to a substantially equivalent position.

Generally, employees have a demandable right over existing benefits voluntarily granted to
them by their employers. And if the grant or benefit is founded on an express policy or has, for a
considerable period of time, been given regularly and deliberately, then the grant ripens into a
vested right 26 which the employer cannot unilaterally diminish, discontinue or eliminate 27
without offending the declared constitutional policy on full protection to labor. 28 So it must be
here with respect, at the minimum, to the lodging accommodation which TAWTRASCO, as
found by the NLRC, appears to have regularly extended for free for some time to petitioner.

TAWTRASCO admitted petitioner back to work under terms and conditions adversely dissimilar
to those prevailing before his illegal dismissal. Put a bit differently, petitioner was admitted back,
but required to work under conditions crafted to cause unnecessary hardship to or meant to be
rejected by him. And to reiterate, these conditions entailed a demotion in rank and diminution of
perks and standard privileges. The shabby and unfair treatment accorded him or her by the
management of TAWTRASCO is definitely not genuine reinstatement to his former position.
[G.R. No. 177167. January 17, 2013.]
NELSON B. GAN, petitioner, vs. GALDERMA PHILIPPINES, INC. and ROSENDO C.
VENERACION, respondents.

Facts:

The Company, Galderma Philippines, is enagged in selling, marketing, and distribution of

Cetaphil Brand Product Lines (CBPL) as well as pharmaceutical products, such as Locetar,
Benzac and other prescription drugs.

Gan was hired as Production Manager by Galderma Philippines (Company) to handle marketing
for CBPL effective March 1. 2001. His recevied Php30,000.00 monthly salary.

Because of his satisfactory performance, the Company gave him additional product
management responsibilities. The Company provided Gan with product knowledge training on
Benzac and Locetar brands.

Thereafter, Gan's incentive program was revised and took effect in April 2002 which includes
cash incentive upon achieving the monthly national trade sales forecasts for the CBPL, Locetar
and Benzar line.

2001 Incentive Scheme 2002 Incentive Scheme

Monthly sales forecast CBPL: 9,000, CBPL: 4,500
Locetar: 3,000
Benzac: 1,500

Annual sales forecast CBPL: 15,000, CBPL: 7,500

Locetar: 5,000
Benzac: 2,500

Held:

The revision of Gan's 2002 incentive scheme is not a diminution of benefits, since Gan would
have also received the same sum if he achieved the desired targets for the Locetar and Benzac
brands, the two new products which were added under his watch.

Gan admitted that such act is a valid exercise of management prerogative; hence, he should
have realized that their inclusion necessarily called for a corresponding modification of the
incentive scheme so as to accurately measure his effectiveness in handling all three products,
not just one or two of them.

Nonetheless, while the Supreme Court held that the 2002 revised incentive scheme is a
reasonable and valid exercise of management prerogative, it qualified that its immediate
implementation is improper for want of 30-day prior notice.
[G.R. No. 176985. April 1, 2013.]
RICARDO E. VERGARA, JR., petitioner, vs. COCA-COLA BOTTLERS PHILIPPINES, INC.,
respondent.

Facts:

Petitioner Ricardo E. Vergara, Jr. was an employee of respondent Coca-Cola Bottlers

Philippines, Inc. from May 1968 until he retired on January 31, 2002 as a District Sales
Supervisor (DSS).

As stipulated in respondent's existing Retirement Plan Rules and Regulations at the time, the
Annual Performance Incentive Pay of RSMs, DSSs, and SSSs shall be considered in the
computation of retirement benefits, as follows:

Basic Monthly Salary + Monthly Average Performance Incentive (which is the total performance
incentive earned during the year immediately preceding ÷ 12 months) x No. of Years in Service.

Claiming his entitlement to an additional PhP474,600.00 as Sales Management Incentives

(SMI), among others, petitioner filed a complaint before the NLRC.

Vergara presented the sworn statements of Renato C. Hidalgo (Hidalgo) and Ramon V.
Velazquez (Velasquez), former DSSs of the Company who retired in 2000 and 1998,
respectively. They claimed that the SMI was included in their retirement package even if they
did not meet the sales and collection qualifiers.

Held:

The grant of SMI to all retired DSSs, regardless of whether or not they qualify to the same, did
not ripen into company practice. Vergara failed to adduce proof to establish his allegation that
SMI has been consistently, deliberately and voluntarily granted to all retired DSSs without any
qualification or conditions whatsoever.

The declarations of Hidalgo and Velazquez were sufficiently countered by the Company through
the affidavit executed by Moises D. Escasura (Escasura), among others. Ecasura attested that
contrary to Vergara’s claim, Hidalgo was in fact qualified for the SMI. As for Velazquez,
Escasura asserted that even if Velazquez did not qualify for the SMI, the Company still granted
the SMI, along with other numerous concessions, to achieve industrial peace in the plant which
was then experiencing labor relations problems.

Therefore, respondent's isolated act of including the SMI in the retirement package of
Velazquez could hardly be classified as a company practice that may be considered an
enforceable obligation. To repeat, the principle against diminution of benefits is applicable only if
the grant or benefit is founded on an express policy or has ripened into a practice over a long
period of time which is consistent and deliberate; it presupposes that a company practice, policy
and tradition favorable to the employees has been clearly established; and that the payments
made by the company pursuant to it have ripened into benefits enjoyed by them.

Company practice, just like any other fact, habits, customs, usage or patterns of conduct, must
be proven by the offering party who must allege and establish specific, repetitive conduct that
might constitute evidence of habit or company practice.