Philippine Journalists Inc. v. De Guzman
REITERATIONFacts
The Antecedents: Erika Marie R. de Guzman and Edna Quirante, employees of Philippine Journalists, Inc. (PJI), applied for optional retirement under the company's Collective Bargaining Agreement (CBA). PJI failed and refused to process their retirement benefits. Procedural History: Respondents filed a complaint for unfair labor practice and money claims. The Labor Arbiter dismissed the complaint, ruling that respondents, as managerial employees excluded from the CBA's bargaining unit, were not entitled to optional retirement benefits. The National Labor Relations Commission (NLRC) reversed the Labor Arbiter, finding that the CBA provision on optional retirement was clear and that PJI had a company practice of granting such benefits even to excluded employees, citing past instances. The Court of Appeals (CA) affirmed the NLRC ruling, holding that the grant of optional retirement benefits had ripened into a company practice and that PJI's claim of financial losses was unsubstantiated. The Petition: Petitioners sought to reverse the CA's decision, arguing that optional retirement benefits are not demandable as a matter of right and require management approval, especially when the company is experiencing financial losses. They also contended that past grants of optional retirement benefits were covered by an approved retirement program.
Issue(s)
Whether the optional retirement benefit can be demanded as a mandatory benefit by a regular employee who voluntarily resigns even without an optional retirement program approved by the management. Whether the grant of optional retirement benefits to certain employees, despite their exclusion from the CBA, had ripened into a company practice that PJI could not unilaterally withdraw.
Ruling
The Court denies the Petition. The November 7, 2012 Decision and July 4, 2013 Resolution of the Court of Appeals in CA-G.R. SP No. 123901 are affirmed in toto. The judgment award in favor of respondents shall earn interest of 12% per annum from the filing of the Complaint up to June 30, 2013, and thereafter, 6% per annum from July 1, 2013 until full satisfaction.
Ratio Decidendi
On the issue of whether optional retirement benefits can be demanded as a mandatory benefit by a regular employee who voluntarily resigns even without an optional retirement program approved by the management: The Court held that while optional retirement benefits may not be demandable as a matter of right under the strict terms of a CBA, the employer's consistent and deliberate practice of granting such benefits to certain employees, even those excluded from the CBA, can ripen into a company practice. This practice, once established, becomes an enforceable obligation under Article 100 of the Labor Code, prohibiting the elimination or diminution of employee benefits. The Court found that PJI had a history of granting optional retirement benefits to employees outside the rank-and-file, demonstrating a deliberate and consistent practice. The claim of financial losses by PJI was found to be unsubstantiated and contradicted by evidence of continued operations and perks for management, rendering the denial of benefits to respondents unfair and discriminatory. The Court emphasized that the employer's claim of financial reverses must be supported by substantial evidence, not merely self-serving statements or unsubstantiated assertions. On whether the grant of optional retirement benefits to certain employees, despite their exclusion from the CBA, had ripened into a company practice that PJI could not unilaterally withdraw: The Court affirmed the CA's finding that PJI's grant of optional retirement benefits to managerial employees and executive staff had ripened into a company practice. This practice was characterized by regularity and deliberateness over a significant period, as evidenced by the past grants to employees like Nepthalie E. Hernandez and Atty. Julie Interior Madeja. The Court reiterated that for a company practice to be considered demandable as a right, the giving of the benefit should not be by reason of a strict legal or contractual obligation but by an act of liberality on the part of the employer, which, over time, becomes an established policy. PJI's act of granting these benefits to excluded employees, knowing they were not covered by the CBA, demonstrated an agreement to continue giving the benefit. Therefore, PJI could not unilaterally withdraw or diminish this benefit without violating Article 100 of the Labor Code.
Main Doctrine
The consistent and deliberate grant of optional retirement benefits to employees, even those excluded from the Collective Bargaining Agreement (CBA), ripens into a company practice that cannot be unilaterally withdrawn by the employer without violating the principle of non-diminution of benefits under Article 100 of the Labor Code. The employer's claim of financial losses must be substantiated and cannot be used to justify the denial of benefits previously granted as a matter of practice, especially when such claims are contradicted by other evidence.