Home Credit Mutual Building and Loan Association and/or Ronnie B.

Alcantara
vs. Ma. Rollete G. Prudente
G.R. No. 200010 | August 27, 2020

Facts:
• Ma. Rollete G. Prudente, during her tenure with Home Credit Mutual Building
and Loan Association, received service vehicles in 1997 and 2003. In 2009, she
applied for a third service vehicle.
• Initially, the vehicles were provided at full company cost, but later, a cost-sharing
scheme was introduced, requiring Prudente to shoulder a percentage of the
acquisition cost.
• Prudente filed a complaint against Home Credit, alleging a violation of the Labor
Code’s non-diminution of benefits rule.

Issue:
Whether Home Credit violated the rule on non-diminution of benefits by changing the
car plan scheme from full company cost to a cost-sharing arrangement.

Ruling:
The Supreme Court granted the petition, reversing the Court of Appeals’ decision. It held
that the non-diminution rule applies only if the benefit is based on an express policy, a
written contract, or has ripened into a practice.

The Court found that Prudente failed to substantiate that the car plan was part of her
hiring package and therefore could not be deemed altered. The car plan had not evolved
into a company practice of being provided at full company cost. The decision of the
National Labor Relations Commission (NLRC), which dismissed Prudente’s complaint,
was reinstated.

This case underscores the importance of clearly defined company policies and the
conditions under which benefits are granted. The principle of non-diminution of benefits
applies only if the benefit is based on an express policy, a written contract, or has
ripened into a practice. Implied benefits that do not form part of a hiring package or
have not ripened into a consistent company practice do not fall under the protection
from diminution.
***

Vergara, Jr. v. Coca-Cola Bottlers Philippines, Inc.

G.R. No. 176985 | April 1, 2013

Facts:
• Ricardo E. Vergara, Jr. was employed by Coca-Cola Bottlers Philippines, Inc.
(CCBPI) from May 1968 until his retirement on January 31, 2002, as a District
Sales Supervisor (DSS) for Las Piñas City, Metro Manila.
• Under CCBPI’s Retirement Plan Rules and Regulations, the Annual Performance
Incentive Pay for certain sales positions was included in the computation of
retirement benefits.
 • Vergara filed a complaint before the National Labor Relations Commission (NLRC)
for payment of full retirement benefits, merit increase, commission/incentives,
length of service, actual, moral and exemplary damages, and attorney’s fees.
• The Labor Arbiter (LA) ruled in favor of Vergara, ordering CCBPI to reimburse the
deducted amount and include the Sales Management Incentives (SMI) in his
retirement benefit.
• CCBPI appealed to the NLRC, which modified the decision by deleting the SMI.
• Vergara sought to partially execute the reimbursement of the illegal deduction,
which the LA granted. Despite pending certiorari before the Court of Appeals (CA),
the parties executed a Compromise Agreement acknowledging the full payment
of the illegal deduction.
• The CA dismissed Vergara’s petition and denied reconsideration. Vergara then
filed a petition for review with the Supreme Court.

Issues:
• Whether the Sales Management Incentives (SMI) should be included in the
computation of Vergara’s retirement benefits on grounds of consistent company
practice.
• Whether the Supreme Court should re-evaluate the factual findings that support
the decisions of both NLRC and CA.

Ruling:
• The Supreme Court affirmed that only questions of law could be entertained in a
Rule 45 petition. It adhered to the principle that factual findings of administrative
or quasi-judicial bodies (like the NLRC) are afforded respect and finality when
supported by substantial evidence.

• The Court found that Vergara failed to present substantial evidence proving that
the inclusion of SMI in the retirement package had become a consistent and
deliberate company practice.

The principle of non-diminution of benefits applies only if the benefit is based on an

express policy, a written contract, or has ripened into a practice. Implied benefits that
do not form part of a hiring package or have not ripened into a consistent company
practice do not fall under the protection from diminution.
***

Sevilla Trading Company v. A.V.A. Tomas E. Semana

G.R. No. 152456 | April 28, 2004

Facts:
• Sevilla Trading Company, engaged in the trading business, had been including
various benefits beyond basic pay (like overtime, holiday pay, night premium,
and various leaves) in the base figure for computing employees’ 13th-month pay
for two to three years before 1999.
• Upon auditing and revising their payroll process, the company discovered what
they considered an error in this computation method, leading them to adjust the
calculation to exclude these benefits, consequently reducing employees’ 13th-
month pay.
 • The adjustment was contested by the company’s workers, represented by the
Sevilla Trading Workers Union–SUPER, through the Collective Bargaining
Agreement’s Grievance Machinery, claiming it violated the rule against the
diminution of benefits.
• Failing resolution, the matter was elevated to Accredited Voluntary Arbitrator
Tomas E. Semana. Semana ruled in favor of the workers, a decision upheld by
the Court of Appeals, leading Sevilla Trading to file a petition to the Supreme
Court, arguing the adjustment was a correction of an error, not a diminution of
benefits.

Issues:
• Whether the petition for certiorari was the proper remedy against the decision of
the Accredited Voluntary Arbitrator.
• Whether the exclusion of certain benefits from the computation of the 13th-
month pay violates the rule against the diminishment of benefits under the Labor
Code.

Ruling:
• The Supreme Court denied the petition, affirming the decisions of both the
Arbitrator and the Court of Appeals. The Court clarified that the proper remedy
for the company was an appeal under Rule 43 of the 1997 Rules of Civil
Procedure, not a certiorari under Rule 65, as it was an available and adequate
remedy that the company failed to pursue within the reglementary period.

The Court found no grave abuse of discretion in the Arbitrator’s decision that
included benefits previously factored into the 13th-month pay computation over
several years as part of a voluntary practice that could not be unilaterally
withdrawn without violating the Labor Code’s prohibition against the diminution
of benefits.

• The Supreme Court reiterated the doctrine that benefits once given by the
employer, when consistently and deliberately extended over a period, become a
part of the employment contract and cannot be unilaterally withdrawn or
diminished. This principle is anchored on Article 100 of the Labor Code, which
prohibits the elimination or diminution of benefits.
***

Yushi Kondo v. Toyota Boshoku [Phils.]

G.R. No. 201396 | September 11, 2019

Facts:
• Yushi Kondo, a Japanese citizen, was employed by Toyota Boshoku Philippines
Corporation (Toyota) as Assistant General Manager for Marketing, Procurement,
and Accounting.
• Initially, Kondo received various benefits, including a service car and driver, a
Caltex card for gasoline, and other allowances.
• Over time, Kondo’s performance evaluations declined, and he was reassigned to
a different department where he claimed to lack experience.
 • Following his reassignment, several benefits were withdrawn, prompting Kondo
to file a complaint for constructive dismissal and related charges.

Issues:
• Whether the Court of Appeals erred in finding no grave abuse of discretion by the
NLRC in reversing the Labor Arbiter’s decision on constructive dismissal.
• Whether Kondo proved constructive dismissal based on the withdrawal of certain
benefits and his departmental transfer.

Ruling:
• The Supreme Court denied Kondo’s petition, affirming the Court of Appeals’
decision. It ruled that Kondo failed to provide substantial evidence for his claims
of constructive dismissal.

• The Court emphasized that the burden of proof for constructive dismissal rests
on the employee to establish their case with clear, positive, and convincing
evidence. The Court found that Kondo’s allegations regarding the withdrawal of
benefits and his reassignment did not meet the criteria for constructive dismissal.

This case underscores the importance of substantial evidence in claims of constructive

dismissal and the procedural requirements for such cases. The burden of proof for
constructive dismissal lies with the employee, who must present clear and convincing
evidence. Constructive dismissal occurs when an employer’s actions make continued
employment unbearable or humiliating, but this must be substantiated with substantial
evidence.
***

Nippon Paint Philippines, Inc. v. NIPPEA

G.R. No. 229396 | June 30, 2021

Facts:
• Nippon Paint Philippines, Inc. (Nippon) and the Nippon Paint Philippines
Employees Association (NIPPEA) had a Collective Bargaining Agreement (CBA)
from January 1, 2007, to December 31, 2011, which included provisions for
premium holiday pay.
• In 2009, Republic Act No. 9849 declared Eidul Adha a regular national holiday.
• Despite Eidul Adha not being listed in the 2007 CBA, Nippon paid additional
holiday pay for this event in 2010 and 2011.
• A new CBA executed in 2012 did not mention Eidul Adha as a regular holiday,
and no holiday pay was given for it in 2012.
• NIPPEA contended that the additional holiday pay for Eidul Adha had become a
company practice, arguing for entitlement based on past payments.
• Nippon claimed the payments in 2010 and 2011 were payroll system errors
corrected by 2012.

Issues:
• Whether the employees are entitled to additional holiday pay for Eidul Adha as a
recognized company practice.
 • Whether Nippon is entitled to a refund of payments made due to the alleged
system error in 2010 and 2011.

Ruling:
• The inclusion of Eidul Adha in holiday pay became a vested right for employees,
protected under the non-diminution principle of benefits.

• The Supreme Court ruled that the payments made from 2010 to 2011 had
ripened into a company practice, regardless of the claim that they were errors.

The Court rejected Nippon’s assertion of a system error, emphasizing the absence
of substantial proof that these payments were anything but deliberate and
consistent practice. The Court did not support the argument for repayment by
employees, as the payments were not erroneously made but had become a
binding company practice.

This case highlights the importance of consistent company practices and the protection
of employee benefits under the non-diminution principle. Employees have a vested right
over existing benefits voluntarily granted by the employer. These benefits cannot be
reduced, diminished, discontinued, or eliminated unilaterally.
***

Philippine Journalists, Inc. v. De Guzman

G.R. No. 208027 | April 1, 2019

Facts:
• Erika Marie R. De Guzman and Edna Quirante were employees of Philippine
Journalists, Inc. (PJI). De Guzman worked as an Ad Taker/Account Executive,
while Quirante was the HRD Supervisor.
• Both employees opted for the company’s optional retirement plan as per the
Collective Bargaining Agreement (CBA).
• PJI failed to process their retirement benefits, leading De Guzman and Quirante
to file a complaint for unfair labor practice, money claims, nonpayment of
optional retirement benefits, and service incentive leave.

Issues:
Whether the positions held by De Guzman and Quirante were managerial and thus
excluded from the bargaining unit.

Ruling:
The Labor Arbiter initially dismissed the complaint, ruling that De Guzman and
Quirante were managerial employees and not entitled to the benefits. The National Labor
Relations Commission (NLRC) reversed this decision, finding that the CBA’s language
entitled them to optional retirement benefits. The Court of Appeals upheld the NLRC’s
decision. The Supreme Court affirmed the CA’s ruling, emphasizing that the CBA’s
provisions on optional retirement were unambiguous.

This case underscores the importance of clear contractual language in CBAs and the
protection of employee benefits as agreed upon in such agreements. The Supreme Court
reiterated that the language of the CBA is binding and must be followed. Employees who
meet the criteria outlined in the CBA are entitled to the benefits stipulated therein.
***

Societe Internationale de Telecommunications Aeronautiques v. Huliganga

G.R. No. 215504 | August 20, 2018

Facts:
• Theodore L. Huliganga was employed by Societe Internationale de
Telecommunications Aeronautiques (SITA) starting April 16, 1980, eventually
becoming the Country Operating Officer in the Philippines.
• Upon his retirement on December 31, 2008, Huliganga received retirement
benefits calculated at 1.5 months of basic pay for each year of service, totaling
₱7,495,102.84.
• Huliganga filed a complaint against SITA, SITA Information Networking
Computing B.V. (SITA, INC.), and Equant Services, Inc. (EQUANT) for unfair labor
practices, underpayment of wages, moral and exemplary damages, attorney’s
fees, and underpayment of sick and vacation leave and retirement benefits.
• Huliganga argued that his retirement benefits should be computed at 2 months
of basic pay for each year of service, as per the 2005-2010 Collective Bargaining
Agreement (CBA), which he claimed had become a well-established company
practice.

Issues:
• Whether the coefficient/payment factor for Huliganga’s retirement benefits
should be 2 months instead of 1.5 months for each year of service.
• Whether there was an employer-employee relationship between Huliganga and
SITA, INC. and EQUANT, entitling him to claims for salary and other benefits
from these entities.

Ruling:
• The Supreme Court affirmed the Court of Appeals’ decision, granting Huliganga
₱2,645,175.87 as a deficiency in his retirement benefits. The Court held that the
coefficient/payment factor of 2 months for each year of service, as provided in
the 2005-2010 CBA, had become a company practice and should be applied to
Huliganga’s retirement benefits.
• The Court also found that Huliganga had an employer-employee relationship with
SITA, INC., and EQUANT, entitling him to the claimed benefits.

This case emphasizes the importance of consistent company practices and the
protection of employee benefits under established company policies. For a company
practice to exist, the act of extending benefits must be practiced for a long period and
shown to be consistent and deliberate. Employees are entitled to benefits that have
become part of company practice, even if not explicitly stated in the employment
contract.