EASTERN TELECOM v EASTERN TELECOM UNION

- Postponement of 14th to 16th month bonuses due to the alleged “continuing deterioration
of the company’s position that started in 2000.”
- Consistently been giving 13-16th mpnth pay since 1975 up to 2002.
- Pure gratuity and generosity according to the company
- NLRC: payment of such additional benefits falls under Management Prerogative
- CA: Side Agreements in the CBA created contractual Agreements. Already ripened into
company practice and denial would amount to diminution of the employee’s benefits.
- GR: bonus is a gratuity or act of liberality. It is a management prerogative that
cannot be forced upon the employer.
- XPN: becomes demandable or enforceable when it is made part of the wage or
salary or compensation of the employee.
- IF IMPOSED WITHOUT CONDITION – considered as part of wage.
- PAID IF ONLY PROFITS/CERTAIN LEVELS ARE REALIZED – not part of wage
- ONLY SOME EMPLOYEES RECEIVE WHEN LABOR BECOMES MORE
EFFICIENT – only an inducement for efficiency, not part of wage.
- To be considered a “regular practice” the giving of the bonus should have been done
over a long period of time, and must be shown to have been consistent and
deliberate (in this case since 1975)
- The rule is settled that any benefit and supplement being enjoyed by the employees
cannot be reduced, diminished discontinued or eliminated by the employer. The
principle of non-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.

NETLINK v DELMO (practice had become company policy)

- Delmo argues that his commissions should be paid in USD; and that Netlink should not
be allowed to flip-flop after it had paid previous commissions in USD on the sales
generated on USD denominated transactions.
- GR: All obligations be paid in PH currency
- XPN: contacting parties may stipulate.
- Absence of the contractual stipulation does not warrant that Netlink to disregard
the practice of paying its sales agents in USD for USD-denominated sales.
o The principle of non-diminution of benefits, which has been incorporated in
Art. 100 of LC, forbade Netlink from unilaterally reducing, diminishing,
discontinuing the practice. Verily, the phrase “supplements, or other
employee benefits” in Art 100 is construed to mean the compensation and
privileges received by an employee aside from regular salaries/wages.
- Length of time for the act to be considered as company practice
o Davao Fruits – 6 years
o DIPSS v Abarquez – 3 years and 9 months
 o Tianco v Leogardo – 3 years and 4 months
o Sevilla v Semana – at least two years
o This case (more than 5 years na)

- With the payment of USD commissions having ripened into company practice, there
is no way that the commissions due to Delmo were to be paid in USD equivalent in
PH Currency determined at the time of the sales.

WESLEYAN v WESLEYAN FACULTY (practice: 2 retirement benefits)

- Petitioner argues that there is only 1 retirement plan under the CBA and maintains that
“there is no established company practice or policy involving two (2) retirement benefits
to its employees. Assuming arguendo, that two retirement benefits were released, it is a
mere OVERSIGHT OR MISTAKE as the was no Board Reso authorizing such release.
Thus, it did not ripen into company practice or policy.
- The Non-Diminution Rule found in Article 100 of the Labor Code
explicitly prohibits employers from eliminating or reducing the
benefits received by their employees. This rule, however, applies
only if the benefit is based on an express policy, a written contract,
or has ripened into a practice.
- To be considered a practice, it must be consistently and
deliberately made by the employer over a long period of time. An
exception to the rule is when "the practice is due to error in the
construction or application of a doubtful or difficult question of
law." The error, however, must be corrected immediately after its
discovery; otherwise, the rule on Non-Diminution of Benefits
would still apply.
- Evidence shows that the company has been giving 2 retirement
benefits since 1997. LMC meeting announcing the one-retirement
policy was on Feb 2006.
- Sick leave credits are not automatic as leave credits would be earned on
a month-to-month basis.

ROYAL PLANT WORKERS UNION v Coca-Cola (removal of the chairs)

- Since 1974, Bottling operators were provided with chairs upon their request.
- Come Sept 2008, chairs provided to the operators were removed pursuant to a directive
of Coca-Cola and to prevent the operators from sleeping during work hours.
- CA: Removal of chairs are within the province of Management Prerogatives.
- HELD: A VALID EXERCISE OF MANAGEMENT PREROGATIVE (WTF
ANDADAMOT SA PAHINGA NG MGA PUTANGINANG KAPITALISTA??)
 - NO violation of Article 100. Operators’ chairs cannot be considered as one of the
employee benefits covered under Art 100 of LC as regards the non-diminution of
benefits. Only refers to monetary benefits or privileges given to employees w/
monetary equivalents.
- “Let it be stressed that the aforequoted article speaks of non0diminution 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 other employee
benefits spoken by Art. 100 pertains only to those which are susceptible of monetary
considerations. Indeed, this could only be the most plausible conclusion because the
cases tackling Art. 100 involve mainly w/ monetary considerations or privileges
converted tot heir monetary benefits.”

VERGARA v Coca-Cola
- Generally, employees have a vested right over existing benefits voluntarily granted to
them by their employer. Thus, any benefit and supplement being enjoyed by the
employees cannot be reduced, diminished, discontinued by employer. The principle of
non-diminution of benefits is founded on Constitution to protect the rights of workers, to
promote their welfare, and to afford them full protection. In turn, said mandate is the
basis of Art 4 of the Labor Code which states that "all doubts in the implementation and
interpretation of this Code, including its implementing rules and regulations, shall be
rendered in favor of labor.”

- Benefits are diminished if the following requisites are present:

a) the grant or benefit is founded on a policy or has ripened into a practice over a long
period of time;
b) the practice is consistent and deliberate;
c) the practice is not due to error in the construction or application of a doubtful or
difficult question of law; and
d) the diminution or discontinuance is done unilaterally by the employer.

- For a practice to be characterized as regular, it is essential that the employee is able to

prove by substantial evidence that “the giving of the benefit is done over a long period
of time, and that it has been made consistently and deliberately.”

- In this case, the Court found no substantial evidence to prove that the grant of SMI to
all retired DSSs regardless of whether or not they qualify to the same had ripened into
company practice. Despite more than sufficient opportunity given him while his case was
pending before the NLRC, the CA, and even to SC, P 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.

- To support his claim, Vergara submitted the sworn statements of two retired sales
supervisors who said the SMI was included in their retirement package even if they did
not meet the sales and collection qualifiers. Against these testimonies, the company
presented the counter-affidavits of witnesses who stated that the inclusion of the SMI in
one of the retiree’s pay was made to achieve industrial peace in the plant when it was
going through some labor problems, and that the other retiree has, in reality, met his sales
and collection quota as to qualify him for the SMI.

INSULAR HOTEL v WATERFRONT (agreed upon reduction of benefits)

- Yes, the MOA is valid and Cullo's petition was denied. The court underscores that
although the Memorandum of Agreement (MOA) resulted in a reduction of salaries and
benefits for union members, it played a crucial role in reopening the hotel amid financial
distress. The MOA's execution ensured job retention for the employees. The court deems
it unfair for the union members to sign new contracts, contributing to the hotel's
reopening, only to later disavow the agreement due to non-ratification of the MOA.

- Additionally, the court emphasizes that Domy R. Rojas, the president of DIHFEU-NFL,
did not act unilaterally during negotiations with the hotel management. The Constitution
and By-Laws of DIHFEU-NFL explicitly authorize the union president to represent the
union in all relevant matters. Furthermore, Rojas received proper authorization through a
Board of Directors Resolution, granting him the authority to negotiate and sign
documents related to the agreement with Waterfront Insular Hotel Davao.

- The court acknowledges that while justice typically leans in favor of labor, the unique
circumstances in this case prevent an automatic application of such principles. It
emphasizes that not every labor dispute will be resolved in favor of workers, recognizing
the legitimate rights of management and the need for fair play in the interest of justice.

ORTIZ v SAN MIGUEL CORP (ordinary and extra-ordinary atty’s fees)

- In determining whether the petitioner should be entitled to the attorney’s fees stated in the
NLRC Decisions, this Court needs to ascertain and apply the relevant law and
jurisprudence on the award of attorney’s fees to the prevailing parties in labor cases.
- Art 111 of the Labor Code provides that
o a. In cases of unlawful withholding of wages the culpable party may be assessed
attorney’s fees equivalent to 10% of the amount of wages recovered.
 o b. It shall be unlawful for any person to demand or accept, in any judicial or
administrative proceedings for the recovery of the wages, attorney fees which
exceed 10% of the amount of wages recovered.
-There are 2 commonly accepted concepts of attorney’s fees, (1) ordinary and (2)
extraordinary.
1. Ordinary concept – an attorney’s fee is the reasonable compensation paid to a lawyer by
his client for the legal services the former has rendered to the latter. The basis of this
compensation is the fact of the attorney’s employment by and his agreement with the client.
2. Extraordinary concept – attorney’s fees are deemed indemnity for damages ordered by the
court to be paid by the losing party in litigation.
The instances in which these may be awarded are those enumerated in Article 2208 of the Civil
Code, specifically paragraph 7which pertains to actions for recovery of wages, and is payable not
to the lawyer but to the client, unless they have agreed that the award shall pertain to the lawyer
as additional compensation or as part thereof. Article 111 of the Labor Code, as amended,
contemplates the extraordinary concept of attorney's fees.
In carrying out and interpreting the Labor Code's provisions and implementing regulations, the
employee's welfare should be the primordial and paramount consideration. This kind of
interpretation gives meaning and substance to the liberal and compassionate spirit of the law as
provided in Article 4 of the Labor Code, which states that "all doubts in the implementation and
interpretation of the provisions of the Labor Code including its implementing rules and
regulations, shall be resolved in favor of labor"; and Article 1702 of the Civil Code, which
provides that "in case of doubt, all labor legislation and all labor contracts shall be construed in
favor of the safety and decent living for the laborer."
Based on the foregoing, the attorney's fees awarded by the NLRC in its Decisions in the Aguirre
and Toquero Cases pertain to the complainants, petitioner's clients, as indemnity for damages;
and not to petitioner as compensation for his legal services. Records show that the petitioner
neither alleged nor proved that his clients, the complainants, willingly agreed that the award of
attorney's fees would accrue to him as an additional compensation or part thereof.
What the complainants explicitly agreed to in their individual Deeds of Release, Waiver, and
Quitclaim was that the 10% attorney's fees of the petitioner shall be deducted from the amount of
the gross settlement.

The foregoing provision cannot be taken to mean that the complainants concerned agreed that the
attorney's fees awarded by the NLRC pertained to petitioner as additional compensation or part
thereof since (1) the Deeds were executed between complainants and private respondent, the
petitioner was not even a party to the said documents; and (2) private complainants' request that
private respondent withhold 10% attorney's fees to be payable to petitioner was in relation to the
amount of gross settlement under the Deeds and not to the amounts awarded by the NLRC. In
fact, petitioner challenges the due execution of the Deeds, and may not now take an inconsistent
position by using the provisions of the very same Deeds as proof that complainants impliedly or
expressly agreed that the attorney's fees awarded by the NLRC pertained to him under the
ordinary concept of attorney's fees.
Coca-Cola Bottlers v Iloilo Coca-Cola Plant Employees Labor Union (removal of benefit
subject to condition not a violation of non-diminution rule)

- Whether the scheduling of work on Saturday has ripened into a company practice, the
removal of which constituted a diminution of benefits – NO.

- The Court clarified that it is not Saturday work per se which constitutes a benefit to the
company's employees. Rather, the benefit involved in this case is the premium which
the company pays its employees above and beyond the minimum requirements set
by law. The CBA between CCBPI and the respondent guarantees the employee’s that
they will be paid the irregular wage plus an additional 50% thereof for the first eight (8)
hours of work performed on Saturdays. Therefore, the benefit, if ever there is one, is
the premium pay given by reason of Saturday work, and not the grant of Saturday
work itself.

- The Court cited its ruling in Royal Planters Workers Union vs. Coca-Cola Bottlers
Philippines, that the employee benefits contemplated by Article 100 are those which are
capable of being measured in terms of money. In order for there to be proscribed
diminution of benefits that prejudiced the affected employees, CCBPI should have
unilaterally withdrawn the 50% premium pay without abolishing Saturday work. These
are not the facts of the case at bar. The company withdrew the Saturday work itself,
pursuant, as already held, to its management prerogative. In fact, this management
prerogative highlights the fact that the scheduling of the Saturday work was actually
made subject to a condition., the prerogative to provide the company’s employees with
Saturday work based on the existence of operational necessity.

- Even assuming arguendo that the Saturday work involved in this case falls within the
definition of a "benefit “protected by law, the fact that it was made subject to a
condition (i.e., the existence of operational necessity) negates the application of
Article 100 pursuant to the established doctrine that when the grant of a benefit is
made subject to a condition and such condition prevails, the rule on non-diminution
finds no application. Otherwise stated, if Saturday work and its corresponding premium
pay were granted to CCBPI's employees without qualification, then the company's policy
of permitting its employees to suffer work on Saturdays could have perhaps ripened into
company practice protected by the non-diminution rule.

- Lastly, the Court found that since the affected employees are daily-paid employees, they
should be given their wages and corresponding premiums for Saturday work only if they
 are permitted to suffer work. The age-old rule governing the relation between labor and
capital, or management and employee, of a "fair day's, wage for a fair day's labor"
remains the basic factor in determining employees' wages. If there is no work performed
by the employee, there can be no wage. In cases where the employee's failure to work
was occasioned neither by his abandonment nor by termination, the burden of economic
loss is not rightfully shifted to the employer; each party must bear his own loss. In other
words, where the employee is willing and able to work and is not illegally prevented from
doing so, no wage is due to him. To hold otherwise would be to grant to the employee
that which he did not earn at the prejudice of the employer.

- In the case at bar, the employees were not illegally prevented from working on Saturdays.
The company was simply exercising its option not to schedule work pursuant to the CBA
provision which gave it the prerogative to do so. It therefore follows that the principle of
"no work, no pay" finds application in the instant case.

KONDO v TOYOTA BOSHOKU (no diminution if benefit was granted only as an

accommodation)
- Service car and driver withdrawn
- Claimed that he was illegally dismissed because according to him his service car and
driver were “essential requisites of his continued employment”
- There is diminution of benefits when the following are present
o Grant of benefit is founded on a policy or has ripened into a practice over a
long period of time
o The practice is consistent and deliberate
o The practice is not due to error in the construction or application of a
doubtful or difficult question of law
o The diminution or discontinuance is done unilaterally by the employer
- Here, the grant of service car and local driver to the petitioner was based neither on
express policy or a written contract. It may also not be considered company
practice.
- There must be an indubitable showing that the employer agreed to continue giving
the benefir knowing fully well that the employees are not covered by any provision
of the law or agreement.
- Evidence shows that such benefits were given more as an accommodation by virtue
of him being a fellow Japanese working in a foreign land. Petitioner cannot demand
a right tot the service car and driver indefinitely, especially under new
administration, when the benefit ostensibly sprung from the magnanimity of his
former superior rather than actual company practice.