Labor Standards

SSCRM-CoL

Updates on Salaries & Benefits

1. Coca Cola vs Coca Iloilo Plant Employees Labor Union GR No, 195293, 05
December 2018

Elimination of Saturday Work

The CBA may stipulate that the company could require work on Saturdays on
ground of for "operational necessity", and likewise remove Saturday work for the
same reason. Removing the Saturday work would not constitute either a violation
of the CBA or diminution of benefit . The benefit involved is not the Saturday work
itself, but the compensation that must be paid when Saturday work is required

2.Home Credit Building & Loan Assn v Prudente , GR No. 200010, 27 August
2020.

Non-diminution: Cost Sharing Scheme for Car Plan

The non-diminution rule applies only if the benefit is based on an express policy, a
written contract, or has ripened into a practice.

In this case, the employee’s claim that the car plan was part of her hiring package
was unsubstantiated. Admittedly, Home Credit has no existing car plan at the time
she was hired. Her employment contract does not even contain any express
provision on her entitlement to a service vehicle at full company cost

Home Credit's act of giving service vehicles to the employee has been a company
practice - but not as to the non-participation aspect. There was no substantial
evidence to prove that the car plan at full company cost had ripened into
company practice. Notably, the only time the employee was given a service
vehicle fully paid for by the company was for her first car. For the second
vehicle, the company already imposed a maximum limit of P660,000.00 but she
never questioned this. She willingly paid for the equity in excess of said limit.
Thus, the elements of consistency and deliberateness are not present.

3.International Elevator & Equipment Employees Union vs International Elevator &

Equipment , GR No. 238310, 19 January 2021).

Charging tardiness as half day and crediting it against vacation leave does not
violate CBA

The CBA does not state that the vacation leaves could only be sued exclusively
for rest, or for cash conversion. In the exercise of its management prerogative ,
the company has the right to impose conditions for its availment, including
charging or deducting an employees’ tardiness from their leave credits. In this
case, there is a legitimate reason for the condition, which was to stem the
alarming number of tardiness. The company policy did not alter the CBA, since the
employees are still entitled to 15 days of vacation leave.

4. Coca Cola Bottlers Phil. vs CCBPI Sta Rosa Plant Employees Union, GR No.
197494, 25 March 2019.

Modifying company policy on SSS loan violates CBA & Art. 112 of Labor Code

A plain reading of the CBA provision provides for the commitment of the company
to process SSS salary loans, in particular, of its employees with the only limitation
is the application of SSS rules and regulations pertaining to the same. The
company unilaterally imposed a new condition that an employee, who is qualified
to avail an SSS salary loan and chooses to dispose of his salary through payment
of monthly amortizations, may not be able to do so should such amortizations be
over the 50% of his take home pay.

The 50% net take home pay requirement imposed by the company policy in
effect adds a condition for an employee to obtain an SSS salary loan, on top of
the requirements issued by the SSS. Hence, when the company requires that the
employee should have at least 50% net take home pay before it processes a loan
application, the same violates the CBA provision when a qualified employee
chooses to apply for an SSS loan.
It also violates Article 112 of the Labor Code (Non-interference in disposal of
wages) which provides that “no employer shall limit or otherwise interfere with
the freedom of any employee to dispose of his wages”.

5. PBCom Employees Association vs PBCom, GR No. 250839, 14 September

2022).

Imposing new conditions on CBA loan policy

Unilaterally adding in the CBA loan policy the condition disallowing employees
from using their mid-year and year-end bonuses to pay for their loan
amortizations . The bank’s act may also constitute violation of Art. 112 of the
Labor Code since it restricts the employee’s right to dispose of his salaries albeit it
could be disputed if bonuses constitute salaries for this purpose.

6. Yokohama Tires vs Alliance of Yokohama Employees, GR No. 252798, 02

September 2020

Modification of rice incentive condition voided.

The company violated the CBA, which grants rice incentive provided there is zero
accident in a given period, when it interpreted the condition as referring to zero
accident in the entire company and not merely to the bargaining unit of rank and
file . The SC held that the meaning of the CBA, which covers only rank and file
employees, is that the zero accident refers only to said bargaining unit

7. Logwin Air+Ocean Philippines, Inc. and Franz Erwin Haghofer v. Norudin Calih
Taki, GR No. 252259, 26 August 2020

The offsetting of the employee’s unpaid loan and cash advances from his salary
is allowed pursuant to Article 1278 and 1279 of Civil Code in relation to Article
113( c ) of the1 Labor Code and Article 1706 of the Civil Code. Offsetting of the
employee’s unsettled obligations from his salary shall take place because the
parties are creditors and debtors of each other in their own right.

Note: It is not clear in this case if the employee’s debt is due and demandable.
8. Marby Food Ventures Corp vs Dela Cruz, GR No. 244629, 28 July 2020.

Deductions from salaries as penalties they imposed for deliveries outside the
delivery hours, cell phone plans, bad orders and liquidation shortage, disallowed.
This act is a clear violation of the Labor Code since there was no written
conformity coming from the employees regarding the deduction. Hence,
reimbursement of these illegal deductions should be returned to the employees.

Comment: Can this be stipulated by the parties in the employment contract or

company policy, like in the case of deduction from deposit for breakage or loss of
company property?

9. CB Richard Ellis vs Lynch, GR No. 256180, 14 September 2021.

Debt or money due to the debtor does not extend to unliquidated , disputed
claims from tort or breach of contract No claims upon unliquidated damages have
ever been permitted as a set off. Thus, was declared that liquidated damages for
violation of the non-compete clause is not a “debt” that is subject to
compensation under Arts. 1278-1279 in relation to Art. 1706 of the Civil Code and
Art. 113 of the Labor Code.

What about liquidated damages arising from violation of the 45-day prior notice
that must be given in cases of resignation?

10. Bonpack Corporation vs Nagkakaisang Manggagagwa sa Bonpack, GR No.

230041, 05 December 2022).

Violation of CBA Provision on Meal Breaks

The one-hour meal break, which is

divided into 3 parts, is
compensable

The company denies ordering their employees to have their meal break for one
hour instead of 30 minutes. It asserts that it just so happened that they have
employees taking the compensable 30-minute meal break and those still having
their routinary one-hour continuous breaktime. According to petitioner, those
who took the one-hour rest period were no longer entitled to be compensated
following the no work, no pay policy

The SC was not persuaded.

It held that Sec. 83, in relation to Sec. 85 of the Labor Code, states that the
compensable eight hours of work in a day does not include the 60 minutes time-
off for the regular meals of an employee, ergo, this statutory one-hour meal
break, not being part of the normal working hours of an employee, is non-
compensable. In short, the normal eight-hour work period does not include the
statutory and non-compensable one-hour meal break.76

Nevertheless, the hours of work of the employees may be modified or regulated

in a duly signed CBA between the employer and its employees. It is rudimentary
that: "[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."77

The short rest periods of meal time, or those periods shorter than one-hour, have
been purposely integrated by the parties in the normal eight-hour
workday.1a⍵⍴h!1The intent of the parties is readily ascertainable. The CBA
divided the meal time of the employees into three parts, i.e., the 30-minute
lunch break and two 15-minute coffee breaks. Evidently, the meal time was
divided into shorter rest periods so that these periods can be considered as
compensable.

The company however, essentially admitted that it wittingly allowed the

employees to consume one whole hour of continuous meal break instead of
strictly implementing the CBA mandated 30-minute meal break and two 15-
minute rest periods. In defining the commission of the offense of "over break" in
the revised CRR, the company even classified those consuming the one-hour meal
break as "straight time" employees and those consuming the 30-minute meal
break as "non-straight time" employees. Evidently, the company had established
two policies on hours of work and meal period. As the SC saw it, the company
cunningly permitted the "straight time" employees to lump the short meal breaks
into one-hour, which is against the CBA.

Thus, through the company’s scheming policy, it authorized a one-hour meal

break that is not compensable, contrary to the 30-minute meal break and two 15-
minute coffee breaks under the CBA. The obvious intent of petitioner in this policy
of allowing the one-hour meal break is to lessen the compensable work hours of
its employees; instead of allowing the compensable meal break of 30-minutes
and two 15-minute coffee breaks in the CBA. This is clearly a circumvention of the
unequivocal provisions of the CBA providing for compensable meal and rest
periods.

In effect, those employees rendering 12 hours of work in an eight-hour work day,

were only compensated with three hours of overtime pay,79 instead of four
hours. Clearly, the policy implemented by petitioner thwarted the provision of the
CBA regarding the meal time of its employees.

11.Mindanao Inter’l Container Terminal v MICTSI Labor Union , G.R. No. 245918 ;
29 Nov 2022

Discrimination in salary rates upheld

The Supreme Court held that there is a recognized distinction between senior
employees and newly-promoted employees occupying the same position, based
on competency, attendance, physical fitness, and length of service. Giving higher
salary rate to senior employees, with presumed greater experience and
competence, does not violate the "equal pay for equal work" principle which is
not intended to negate management prerogative to institute differences in salary
based on seniority, skill, and experience in the same class of workers doing the
same kind of work
12. Regala vs Manila Hotel, G.R. No. 204684, 05 October 2020).

Reduction of work days : A case of constructive dismissal

The reduction of a waiter’s regular work days from five (5) days to two (2) days
resulted to a diminution in pay and change in his work schedule resulting to the
diminution of his take home salary is, therefore, tantamount to constructive
dismissal. Further, it was pronounced that the fact that the employee may have
continued reporting for work does not rule out constructive dismissal, nor does it
operate as a waiver. The employee was ordered reinstated with payment of back
wages

13. Roxas vs Baliwag Transit, GR No. 231859, 19 February 2020

Reduction of work days : Not a case of constructive dismissal

The Supreme Court did not invalidate the bus company’s decision to reduce the
work days of a driver from three (3) weeks duty a month to only two weeks a
month (which resulted in the diminution of take home pay) as the reduction of
work day was due to the phase out of its old buses as imposed by a government
regulation which forced the company in the exercise of its management
prerogative to adjust the previous work assignments of its employees assigned to
the affected buses. Since the reduced assignment was made to apply to all other
employees, the exercise of management prerogative was upheld

14. Santos vs University of Cebu, GR No.232522, 28 August 2019

Optional retirement plan benefits

The benefits under a company’s early retirement plan must not be below the
statutory minimum of 22.5 days for every year of service.

The employee who received less than the statutory minimum is not precluded
from filing a case to claim the difference.

Ambiguities in employment contracts , including retirement plans, are to be

interpreted in favor of labor.
15. United Doctors Medical Center vs Bernabe, GR No. 209468, 13 December
2017

Optional retirement benefits upon death, granted to heirs of the deceased.

The SC allowed the heirs of the deceased, who did not avail during his lifetime the
optional retirement plan of the employer despite being already qualified, to file
claims for optional retirement benefits. The SC allowed them even though they
have already received death benefit proceeds under a group insurance plan, since
these two benefits are different and proceed form different source.

The SC reasoned out that it would be iniquitous withhold the retirement benefits
despite being qualified to receive it, simply because he died before he could apply
for it. The CBA does not mandate that an application must first be filed by the
employee before the right to the optional retirement benefits may vest.

Comment: Is this fair to the employer?

16. Philippine National Construction Corp. vs Erece, 22 July 2024

No vested right to benefit granted in violation of law

The allowances for a personal driver or fuel consumption, which had been opined
by the by the Commission of Audit as disallowable , were validly withdrawn by
the employer without violating the rule on non-diminution of benefits. The grant
of the subject allowances is contrary to a COA circular which prohibits government
officials, who have been granted transportation allowance, to use government
motor transportation or service vehicle. The grant was a result of legal error;
thus, the officers did not acquire a vested right to such benefit.PFFALLARJROct24