ADMINISTRACION DE LOS RECURSOS HUMANOS, FINANCIEROS Y LOGISTICOS

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Facts: American Wire and Cable Co., Inc., is a corporation engaged in the manufacture of wires and cables.

There are two unions in this company, the American Wire and Cable Monthly-Rated Employees Union and the American Wire and Cable Daily-Rated Employees Union.

On 16 February 2001, an original action was filed before the NCMB of the Department of Labor and Employment by the two unions for voluntary arbitration. They alleged that the private respondent, without valid cause, suddenly and unilaterally withdrew and denied certain benefits and entitlements which they have long enjoyed. These are Service Award, 35% premium pay of an employee‘s basic pay for the work rendered during Holy Monday, Holy Tuesday, Holy Wednesday, December 23, 26, 27, 28 and 29, Christmas Party and Promotional Increase.

Issue: WON the respondent company violated Article 100 of the Labor Code. Ruling: The company is not guilty of violating Art. 100 of the Labor Code.

Article 100 of the Labor Code provides:

PROHIBITIONAGAINSTELIMINATIONORDIMINUTIONOFBENEFITS.– Nothing in this Book shall be construed to eliminate or in any way diminish supplements, or other employee benefits being enjoyed at the time of promulgation of this Code.

The certain benefits and entitlements are considered bonuses. A bonus can only be enforceable and demandable if it has ripened into a company practice. It must also be expressly agreed by the employer and employee or it must be on a fixed amount.

The assailed benefits were never subjects of any agreement between the union and the company. It was never incorporated in the CBA. Since all these benefits are in the form of bonuses, it is neither enforceable nor demandable.

70.

HONDA PHILIPPINES vs. SAMAHAN NG MALAYANG MANGGAGAWA SA HONDA G.R. No. 145561, June 15, 2005

Facts: Petitioner Honda and Respondent union forged a Collective Bargaining Agreement which averred

that Honda shall maintain the present practice in the implementation of the 13th _{and 14}th _{month pay. Such}

CBA is effective until 2000. In the later part of 1998, the parties started re-negotiations.

However, when the talk between the parties did not go well, respondent union filed a Notice to Strike on the ground of bargaining deadlock. Honda then filed a notice of Lockout in which the DOLE ordered the party to cease and desist from committing acts.

The union filed a second Notice of Strike on ground of unfair labor, in which they went into pocketing of the premises of Honda. DOLE then assumed jurisdiction and subjected the issue to the NLRC for compulsory arbitration for which the employees were ordered to return to work.

The management of Honda, on 22 Nov. 1999, then issued a memorandum announcing its new computation of the 13th _{and 14}th _{month pay to be granted to employees whereby the 31-day strike shall be considered}

unworked days for purposes of computing said benefits.

Thus, the union opposed the pro-rated computation of the bonuses and the matter was brought before the Grievance Machinery. The Labor Arbiter ordered Honda to compute each provision in full month basic pay. Ca affirmed the decision of the labor arbiter.

Issue: WON the pro-rated computation of the 13th _{month pay and the other bonuses in question is valid}

and lawful

115 | P a g e It is well noted that the CBA refers to the negotiated contract between a legitimate labor organization and the employer. It is the law between the parties and compliance therewith is mandated by express policy of the law.

Honda did not adduce evidence to show that the 13th _{month, 14}th _{month and financial assistance benefits}

were previously subject to pro-rating. Thus, such was an implicit acceptance that prior to the strike, a full month basic pay computation was the ―present practice‖ intended to be maintained in the CBA.

Lastly, to allow pro-ration of the 13th _{month pay is to undermine the wisdom behind the law and the mandate}

that the workingman‘s welfare should be the primordial and paramount consideration. DENIED.

71.

Producers Bank vs. NLRC 355 SCRA 506

FACTS: Private respondent filed a complaint on 11 February 1988 with the Arbitration Branch, National Capital Region, National Labor Relations Commission (NLRC), charging petitioner with diminution of benefits and non-payment of holiday pay. In addition, private respondent prayed for damages.

On 31 March 1989, Labor Arbiter found private respondent's claims to be unmeritorious and dismissed its complaint. In a complete reversal, however, the NLRC granted all of private respondent's claims, except for damages.

ARGUMENTS Petitioner:

1) It cannot be compelled to pay the alleged bonus differentials due to its depressed financial condition, as evidenced by the fact that in 1984 it was placed under conservatorship by the Monetary Board. According to petitioner, it sustained losses in the millions of pesos from 1984 to 1988, an assertion which was affirmed by the labor arbiter. Moreover, the collective bargaining agreement of the parties does not provide for the payment of any mid-year or Christmas bonus.

2) It is not covered by PD 851 since the mid-year and Christmas bonuses it has been giving its employees from 1984 to 1988 exceeds the basic salary for one month (except for 1985 where a total of one month basic salary was given). Hence, this amount should be applied towards the satisfaction of the 13th month pay, pursuant to Section 2 of PD 851.

Respondent:

1) The mid-year and Christmas bonuses, by reason of their having been given for thirteen consecutive years, have ripened into a vested right and, as such, can no longer be unilaterally withdrawn by petitioner without violating Article 100 of Presidential Decree No. 4429 which prohibits the diminution or elimination of benefits already being enjoyed by the employees. Although private respondent concedes that the grant of a bonus is discretionary on the part of the employer, it argues that, by reason of its long and regular concession, it may become part of the employee's regular compensation.

116 | P a g e 2) The conservator was not justified in diminishing or not paying the 13th month pay and that petitioner should have instead applied for an exemption, in accordance with section 7 of Presidential Decree No. 851, as amended by Presidential Decree No. 1364, but that it did not do so. The actions of the conservator ran counter to the provisions of PD 851.

ISSUE

Whether or not petitioner is entitled to pay the bonuses and 13th month pay.

DECISION

NO, THEY ARE NOT.

A bonus is an amount granted and paid to an employee for his industry and loyalty which contributed to the success of the employer's business and made possible the realization of profits. It is an act of generosity granted by an enlightened employer to spur the employee to greater efforts for the success of the business and realization of bigger profits. The granting of a bonus is a management prerogative, something given in addition to what is ordinarily received by or strictly due the recipient. Thus, a bonus is not a demandable and enforceable obligation, except when it is made part of the wage, salary or compensation of the employee.However, an employer cannot be forced to distribute bonuses which it can no longer afford to pay. To hold otherwise would be to penalize the employer for his past generosity.

Private respondent's contention, that the decrease in the mid-year and year-end bonuses constituted a diminution of the employees' salaries, is not correct, for bonuses are not part of labor standards in the same class as salaries, cost of living allowances, holiday pay, and leave benefits, which are provided by the Labor Code.

Petitioner was placed under conservatorship by the Monetary Board, pursuant to its authority under Section 28-A of Republic Act No. 265,21 as amended by Presidential Decree No. 72. Under Section 28-A, the Monetary Board may place a bank under the control of a conservator when it finds that the bank is continuously unable or unwilling to maintain a condition of solvency or liquidity.

Petitioner was not only experiencing a decline in its profits, but was reeling from tremendous losses triggered by a bank-run which began in 1983. In such a depressed financial condition, petitioner cannot be legally compelled to continue paying the same amount of bonuses to its employees. Thus, the conservator was justified in reducing the mid-year and Christmas bonuses of petitioner's employees. To hold otherwise would be to defeat the reason for the conservatorship which is to preserve the assets and restore the viability of the financially precarious bank. Ultimately, it is to the employees' advantage that the conservatorship achieve its purposes for the alternative would be petitioner's closure whereby employees would lose not only their benefits, but their jobs as well.

With regard to 13th month pay, PD 851, which was issued by President Marcos on 16 December 1975, requires all employers to pay their employees receiving a basic salary of not more than P 1,000 a month, regardless of the nature of the employment, a 13th month pay, not later than December 24 of every year. However, employers already paying their employees a 13th month pay or its equivalent are not covered by the law. Under the Revised Guidelines on the Implementation of the 13th-Month Pay Law, the term "equivalent" shall be construed to include Christmas bonus, mid-year bonus, cash bonuses and other

117 | P a g e payments amounting to not less than 1/12 of the basic salary. The intention of the law was to grant some relief - not to all workers - but only to those not actually paid a 13th month salary or what amounts to it, by whatever name called. It was not envisioned that a double burden would be imposed on the employer already paying his employees a 13th month pay or its equivalent whether out of pure generosity or on the basis of a binding agreement. To impose upon an employer already giving his employees the equivalent of a 13th month pay would be to penalize him for his liberality and in all probability, the employer would react by withdrawing the bonuses or resist further voluntary grants for fear that if and when a law is passed giving the same benefits, his prior concessions might not be given due credit.

In the case at bar, even assuming the truth of private respondent's claims as contained in its position paper or Memorandum regarding the payments received by its members in the form of 13th month pay, mid-year bonus and Christmas bonus, it is noted that, for each and every year involved, the total amount given by petitioner would still exceed, or at least be equal to, one month basic salary and thus, may be considered as an "equivalent" of the 13th month pay mandated by PD 851.Thus, petitioner is justified in crediting the mid- year bonus and Christmas bonus as part of the 13th month pay.

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72.

Jardin vs. NLRC

G.R. No. 119268, February 23,2000

FACTS: Petitioners were drivers of respondent, a domestic corporation engaged in the operation of

"Goodman Taxi". Petitioners used to drive respondent's taxicabs every other day on a 24 – hour work schedule under the boundary system. Under this arrangement, petitioners earned an average of P400 daily. Nevertheless, respondent admittedly regularly deducts from petitioners, daily earnings the amount of P30 supposedly for the washing of the taxi units. Believing that the deduction is illegal, petitioners decided to form a labor union to protect their rights and interests.

Upon learning about the plan of petitioners, respondent refused to let petitioners drive their taxicabs when they reported for work. Petitioners suspected that they were singled out because they were the leaders and active members of the proposed union. Aggrieved, petitioners filed with the labor arbiter a complaint against respondent for unfair labor practice, illegal dismissal and illegal deduction of washing fees. In a decision, the labor arbiter dismissed the complaint for lack of merit.

On appeal, the NLRC, in a decision, reversed and set aside the judgment of the labor arbiter. The labor tribunal declared that petitioners are employees of respondent and, as such, their dismissal must be for just cause and after due process.

Respondent's first motion for reconsideration was denied. Respondent filed another motion for reconsideration. The NLRC, in its decision, granted the second motion for reconsideration. It ruled that it lacks jurisdiction over the case as petitioners and respondent have no employer – employee relationship. It held that the relationship of the parties is leasehold which is covered by the Civil Code rather than the Labor Code.

ISSUE:

Whether or not there is an employer – employee relationship so as to entitle them to payment of backwages.

RULING:

The court ruled that the relationship between jeepney owners/ operators on one hand and jeepney drivers on the other under the boundary system is that of employer – employee and not of lessor – lessee. The court has explained that in the lease of chattels, the lessor loses complete control over the chattel leased although the lessee cannot be reckless in the use thereof, otherwise he would be responsible for the damages to the lessor. In the case of jeepney owners/ operators and jeepney drivers, the former exercise supervision and control over the latter. The management of the business is in the owner's hands. The owner as holder of the certificate of public convenience must see to it that the driver follows the route prescribed by the franchising authority and the rules promulgated as regards its operation. Now, the fact that the drivers do not receive fixed wages but get only that in excess of the so-called "boundary" they pay to the owner/ operator is not sufficient to withdraw the relationship between them from that of employer and employee. The court has applied by analogy the doctrine to the relationships between bus owner/ operator and bus

119 | P a g e conductor, auto-calesa owner/ operator and driver and between taxi owners/ operators and taxi drivers. Hence, petitioners are undoubtedly employees of respondent because as taxi drivers they perform activities which are usually necessary or desirable in the usual business or trade of their employer.

As consistently held by the court, termination of employment must be effected in accordance with law. The just and authorized causes for termination of employment are enumerated under Articles 282, 283 and 284 of the Labor Code. The requirement of notice and hearing is set-out in Article 277 of the said Code. Hence, petitioners, being employees of respondent, can be dismissed only for just and authorized cause and after affording them notice and hearing prior to termination. In the instant case, respondent had no valid cause to terminate the employment of petitioners. Neither were there two written notices sent by respondent informing each of the petitioners that they had been dismissed from work. These lack of valid cause and failure on the part of respondent to comply with the twin-notice requirement underscored the illegality surrounding petitioners' dismissal.

Under the law, an employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. It must be emphasized though that recent judicial pronouncements distinguish between employees illegally dismissed prior to the effectivity of Republic Act No. 6715 on March 21, 1989 and those whose illegal dismissals were effected after such date. Thus, employees illegally dismissed prior to March 21, 1989, are entitled to backwages up to three years without deduction or qualification, while those illegally dismissed after that date are granted full backwages inclusive of allowances and other benefits or their monetary equivalent from the time their actual compensation was withheld from them up to the time of their actual reinstatement. The legislative policy behind Republic Act No. 6715 points to "full backwages" as meaning exactly that, i.e., without deducting from backwages the earnings derived elsewhere by the concerned employee during the period of his illegal dismissal. Considering that petitioners were terminated from work on August 1, 1991, they are entitled to full backwages on the basis of their last daily earnings.

With regard to the amount deducted daily by respondent from petitioners for washing of the taxi units, the court is of the view that the same is not illegal in the context of the law. The court notes that after a tour of duty, it is incumbent upon the driver to restore the unit he has driven to the same clean condition when he took it out. Car washing after a tour of duty is indeed a practice in the taxi industry and is in fact dictated by fair play. Hence, the drivers are not entitled to reimbursement of washing charges.

73.

Manila Jockey’s Club Employees Labor Union vs. Manila Jockey Club G.R. No. 167601, March 7, 2007

FACTS: Manila Jockey Club, Inc., a corporation with a legislative franchise to conduct, operate and maintain

horse races, entered into a Collective Bargaining Agreement (CBA) with Manila Jockey Club Employees Labor Union-PTGWO. Under Section 1 Article IV of their CBA, the parties agreed to a 7-hour work schedule from 9:00 a.m. to 12:00 noon and from 1:00 p.m. to 5:00 p.m. on a work week of Monday to Saturday. All work performed in excess of seven (7) hours work schedule and on days not included within the work week shall be considered overtime and paid as such with exception to those monthly compensation which

120 | P a g e includes work performed during Saturday, Sunday, and Holiday when races are held at the Club. The CBA likewise reserved in management prerogatives including the determination of the work schedule. An inter- office memorandum was later issued declaring that the hours of work of regular monthly-paid employees shall be from 1:00 p.m. to 8:00 p.m. when horse races are held, that is, every Tuesday and Thursday. The memorandum, however, sustained the 9:00 a.m. to 5:00 p.m. schedule for non-race days.

Before the voluntary arbitrators of the National Conciliation and Mediation Board, petitioners questioned the memorandum as violative of the prohibition against non-diminution of wages and benefits guaranteed the CBA which specified the work schedule of respondent's employees to be from 9:00 a.m. to 5:00 p.m. They claimed that as a result of the memorandum, the employees are precluded from rendering their usual overtime work from 5:00 p.m. to 9:00 p.m.

ISSUE:

Whether or not the change in the work schedule violated Article 100 of the Labor Code on the non- diminution of wages and benefits guaranteed under the parties‘ CBA.

RULING:

No. It was evident that the change in work schedule was justified, it being a management prerogative. Respondent, as employer, cited the change in the program of horse races as reason for the adjustment of the employees‘ work schedule. It rationalized that when the CBA was signed, the horse races started at 10:00 a.m. When the races were moved to 2:00 p.m., there was no other choice for management but to