NON-DIMINUTION OF BENEFITS RULE DOES NOT APPLY TO DISCONTINUANCE OF SATURDAY WORK WHICH WAS QUALIFIEDLY ALLOWED FOR OPERATIONAL NECESSITIES

Non-diminution rule refers to monetary benefits or privileges given to the employee with monetary equivalents. Thus, the SC held in the following case:

Coca-Cola Bottlers Philippines, Inc. vs. Iloilo Coca-Cola Plant Employees Labor Union (ICCPELU)
G.R. No. 195297, December 5, 2018

 Non-Diminution; No-Work, No-Pay; Fair Day’s Wage for a Fair Day’s Labor; Company practice; Saturday work

Facts:

The conflict between Petitioner Coca-Cola Bottlers Philippines, Inc. (CCBPI) and respondent Iloilo Coca-Cola Plant Employees Labor Union (ICCPELU) arose due to the CCBPI’s policy involving Saturday work.

In the said policy, several of CCBPl’s employees were required to report for work on certain Saturdays to perform a host of activities, usually involving maintenance of the facilities. This prerogative was supposedly consistent with the pertinent provisions7 in the Collective Bargaining Agreement (CBA) between CCBPI and its employees, which stated that management had the sole option to schedule. work on Saturdays on the basis of operational necessity.

CCBPI later on informed the ICCPELU that, starting July 2, 2005, Saturday work would no longer be scheduled, with CCBPI citing operational necessity as the reason for the decision. Specifically, the discontinuance was done with the purpose of saving on operating expenses and compensating for the anticipated decreased revenues. As Saturday work involved maintenance-related activities, CCBPI would then only schedule the day’s work as the need arose for these particular undertakings, particularly on some Saturdays from September to December 2005.

The parties met with CCBPI’s Manufacturing Manager setting forth the official proposal to stop the work schedule during Saturdays. This proposal was opposed and rejected by the officers and members of the ICCPELU who were present at the meeting. Despite this opposition, CCBPI pushed through with the non-scheduling of work on the following Saturday.

As a result of the foregoing, the ICCPELU submitted to CCBPI its written grievance, stating therein that CCBPI’ s act of disallowing its employees to report during Saturday is a violation of the CBA provisions, specifically Section 1, Article 10 thereof. Along with the submission of the written grievance, the ICCPELU also requested a meeting with CCBPI to discuss the issue. CCBPI response to the request, however, was to merely send a letter reiterating to the ICCPELU that under the set of facts, management has the option to schedule work on Saturday on the basis of operational necessity. Further letters on the part of the ICCPELU were responded to in the same way by CCBPI.

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ICCPELU thus brought its grievances to the office of the NCMB and submitted the case for voluntary arbitration. The panel comprised of three (3) voluntary arbitrators (the Panel of Arbitrators), was charged with resolving two issues: First, whether or not members of the ICCPELU were entitled to receive their basic pay during Saturdays under the CBA even if they would not report for work, and second, whether or not CCBPI could be compelled by the ICCPELU to provide work to its members during Saturdays under the CBA.

PVA Ruling:

After the presentation of evidence and the subsequent deliberations, the Panel of Arbitrators ruled in favor of CCBPI.

The PVA held that that the Complainant’s Union members are nary entitled to receive their Basic Pay during Saturdays under the CBA if they are not reporting for work, under Section I Article 10, and Sections 1 (c) and 3( c) Article II of the CBA. On the second issue, it held that CCBPI cannot be compelled by the Complainant Union to provide works to its members during Saturdays under the CBA, for lack of legal and factual basis.

ICCPELU’s Motion for Reconsideration to the Panel of Arbitrators’ ruling was denied for lack of merit. Unwilling to accept the findings of the Panel of Arbitrators, the ICCPELU elevated its case to the CA via a Petition for Review under Rule 43 of the Rules of Court.

CA Ruling:

After a review of the same, the CA subsequently rendered a Decision granting the ICCPELU’s Petition for Review and reversing the decision of the Panel of Arbitrators.

CCBPI’s Motion for Reconsideration was denied by the CA. Hence, the petition before the SC.

Issues:

Whether or not grant of qualified Saturday work pertains to monetary benefit in the contemplation of non-diminution of benefits rule

Whether or not the removal of the qualified Saturday work violates the non-diminution of benefits rule under Art. 100 of the Labor Code

Whether or not the withdrawal of qualifiedly given Saturday work is a valid exercise of management prerogative

SC Ruling:

The SC found merit in the petition.

The SC held 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 ICCPELU guarantees the employees that they will be paid their regular 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.

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In Royal Workers Union vs. Coca-Cola Bottlers Philippines, Inc. -Cebu Plant, the Court had the occasion to rule that the term “benefits” mentioned in the non-diminution rule refers to monetary benefits or privileges given to the employee with monetary equivalents. Stated otherwise, the employee benefits contemplated by Article 100 are those which are capable of being measured in terms of money. Thus, it can be readily concluded from past jurisprudential pronouncements that these privileges constituted money in themselves or were convertible into monetary equivalents.

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. CCBPI 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, i.e., the prerogative to provide the company’s employees with Saturday work based on the existence of operational necessity.

As compared to the factual milieu in the case of Eastern Telecommunications Philippines, Inc. vs. Eastern Telecoms Employees Union, the CBA between CCBPI and’ the ICCPELU has no analogous provision which grants that the 50% premium pay would have to be paid regardless of the occurrence of Saturday work. Thus, the non-payment of the same would not constitute a violation of the diminution of benefits rule.

Also, 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 SC held 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. Invoking the time-honored rule of “a fair day’s work ‘for a fair day’s pay,” the CCBPI argues that the CA’s ruling that such unworked Saturdays should be compensated is contrary to law and the evidence on record.

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, CCBPI’s employees were not 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.