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American Wire and Cable Daily Rated Employees Union v. American Wire and Cable
American Wire and Cable Daily Rated Employees Union v. American Wire and Cable
htm
SECOND DIVISION
G.R. NO. 155059, April 29, 2005
AMERICAN WIRE AND CABLE DAILY RATED
EMPLOYEES UNION, PETITIONER, VS. AMERICAN
WIRE AND CABLE CO., INC. AND THE COURT OF
APPEALS, RESPONDENTS.
DECISION
CHICO-NAZARIO, J.:
Before Us is a special civil action for certiorari, assailing the Decision[1] of the
Special Eighth Division of the Court of Appeals dated 06 March 2002. Said
Decision upheld the Decision[2] and Order[3] of Voluntary Arbitrator Angel A.
Ancheta of the National Conciliation and Mediation Board (NCMB) dated 25
September 2001 and 05 November 2001, respectively, which declared the private
respondent herein not guilty of violating Article 100 of the Labor Code, as
amended. Assailed likewise, is the Resolution[4] of the Court of Appeals dated 12
July 2002, which denied the motion for reconsideration of the petitioner, for lack
of merit.
THE FACTS
The facts of this case are quite simple and not in dispute.
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 (Monthly-Rated Union) and the
American Wire and Cable Daily-Rated Employees Union (Daily-Rated Union).
On 16 February 2001, an original action was filed before the NCMB of the
Department of Labor and Employment (DOLE) 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 the following:
a. Service Award;
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d. Promotional Increase.
A promotional increase was asked by the petitioner for fifteen (15) of its members
who were given or assigned new job classifications. According to petitioner, the
new job classifications were in the nature of a promotion, necessitating the grant
of an increase in the salaries of the said 15 members.
On 21 June 2001, a Submission Agreement was filed by the parties before the
Office for Voluntary Arbitration. Assigned as Voluntary Arbitrator was Angel A.
Ancheta.
On 04 July 2001, the parties simultaneously filed their respective position papers
with the Office of the Voluntary Arbitrator, NCMB, and DOLE.
A motion for reconsideration was filed by both unions[7] where they alleged that
the Voluntary Arbitrator manifestly erred in finding that the company did not
violate Article 100 of the Labor Code, as amended, when it unilaterally withdrew
the subject benefits, and when no promotional increase was granted to the
affected employees.
Considering that the issues raised in the instant case were meticulously
evaluated and length[i]ly discussed and explained based on the pleadings
and documentary evidenc[e] adduced by the contending parties, we find
no cogent reason to change, modify, or disturb said decision.
A motion for reconsideration[13] was filed by the petitioner, contending that the
Court of Appeals misappreciated the facts of the case, and that it committed
serious error when it ruled that the unaudited financial statement bears no
importance in the instant case.
The Court of Appeals denied the motion in its Resolution dated 12 July 2002[14]
because it did not present any new matter which had not been considered in
arriving at the decision. The dispositive portion of the Resolution states:
Dissatisfied with the court a quo’s ruling, petitioner instituted the instant special
civil action for certiorari,[16] citing grave abuse of discretion amounting to lack of
jurisdiction.
ASSIGNMENT OF ERRORS
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II
III
Synthesized, the solitary issue that must be addressed by this Court is whether or
not private respondent is guilty of violating Article 100 of the Labor Code, as
amended, when the benefits/entitlements given to the members of petitioner
union were withdrawn.
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Before we address the sole issue presented in the instant case, it is best to first
discuss a matter which was raised by the private respondent in its Comment. The
private respondent contends that this case should have been dismissed outright
because of petitioner’s error in the mode of appeal. According to it, the petitioner
should have elevated the instant case to this Court through a petition for review
on certiorari under Rule 45, and not through a special civil action for certiorari under
Rule 65, of the 1997 Rules on Civil Procedure.[17]
Assuming arguendo that the mode of appeal taken by the petitioner is improper,
there is no question that the Supreme Court has the discretion to dismiss it if it is
defective. However, sound policy dictates that it is far better to dispose the case
on the merits, rather than on technicality.[18]
The Supreme Court may brush aside the procedural barrier and take cognizance
of the petition as it raises an issue of paramount importance. The Court shall
resolve the solitary issue on the merits for future guidance of the bench and bar.
[19]
With that out of the way, we shall now resolve whether or not the respondent
company is guilty of violating Article 100 of the Labor Code, as amended.
Article 100 of the Labor Code provides:
The petitioner submits that the withdrawal of the private respondent of the 35%
premium pay for selected days during the Holy Week and Christmas season, the
holding of the Christmas Party and its incidental benefits, and the giving of service
awards violated Article 100 of the Labor Code. The grant of these benefits was a
customary practice that can no longer be unilaterally withdrawn by private
respondent without the tacit consent of the petitioner. The benefits in question
were given by the respondent to the petitioner consistently, deliberately, and
unconditionally since time immemorial. The benefits/entitlements were not given
to petitioner due to an error in interpretation, or a construction of a difficult
question of law, but simply, the grant has been a practice over a long period of
time. As such, it cannot be withdrawn from the petitioner at respondent’s whim
and caprice, and without the consent of the former. The benefits given by the
respondent cannot be considered as a “bonus” as they are not founded on profit.
Even assuming that it can be treated as a “bonus,” the grant of the same, by
reason of its long and regular concession, may be regarded as part of regular
compensation.[20]
With respect to the fifteen (15) employees who are members of petitioner union
that were given new job classifications, it asserts that a promotional increase in
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their salaries was in order. Salary adjustment is a must due to their promotion.[21]
On respondent company’s Revenues and Profitability Analysis for the years 1996-
2000, the petitioner insists that since the former was unaudited, it should not have
justified the company’s sudden withdrawal of the benefits/entitlements. The
normal and/or legal method for establishing profit and loss of a company is
through a financial statement audited by an independent auditor.[22]
The petitioner cites our ruling in the case of Saballa v. NLRC,[23] where we held
that financial statements audited by independent auditors constitute the normal method of proof
of the profit and loss performance of the company. Our ruling in the case of Bogo-Medellin
Sugarcane Planters Association, Inc., et al. v. NLRC, et al.[24] was likewise invoked. In
this case, we held:
On the matter of the withdrawal of the service award, the petitioner argues that it
is the employee’s length of service which is taken as a factor in the grant of this
benefit, and not whether the company acquired profit or not.[25]
In answer to all these, the respondent corporation avers that the grant of all
subject benefits has not ripened into practice that the employees concerned can
claim a demandable right over them. The grant of these benefits was conditional
based upon the financial performance of the company and that
conditions/circumstances that existed before have indeed substantially changed
thereby justifying the discontinuance of said grants. The company’s financial
performance was affected by the recent political turmoil and instability that led the
entire nation to a bleeding economy. Hence, it only necessarily follows that the
company’s financial situation at present is already very much different from where
it was three or four years ago.[26]
On the subject of the unaudited financial statement presented by the private
respondent, the latter contends that the cases cited by the petitioner indeed
uniformly ruled that financial statements audited by independent external auditors
constitute the normal method of proof of the profit and loss performance of a
company. However, these cases do not require that the only legal method to
ascertain profit and loss is through an audited financial statement. The cases only
provide that an audited financial statement is the normal method.[27]
benefits/entitlements are in the nature of a bonus or not, and assuming they are
so, whether they are demandable and enforceable obligations.
For a bonus to be enforceable, it must have been promised by the employer and
expressly agreed upon by the parties,[30] or it must have had a fixed amount[31]
and had been a long and regular practice on the part of the employer.[32]
The benefits/entitlements in question were never subjects of any express
agreement between the parties. They were never incorporated in the Collective
Bargaining Agreement (CBA). As observed by the Voluntary Arbitrator, the
records reveal that these benefits/entitlements have not been subjects of any
express agreement between the union and the company, and have not yet been
incorporated in the CBA. In fact, the petitioner has not denied having made
proposals with the private respondent for the service award and the additional
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Having thus ruled that the additional 35% premium pay for work rendered during
selected days of the Holy Week and Christmas season, the holding of Christmas
parties with its incidental benefits, and the grant of cash incentive together with
the service award are all bonuses which are neither demandable nor enforceable
obligations of the private respondent, it is not necessary anymore to delve into the
Revenues and Profitability Analysis for the years 1996-2000 submitted by the
private respondent.
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[1]Rollo, pp. 216-222; Penned by Associate Justice Martin S. Villarama, Jr. with
Associate Justices Conchita Carpio-Morales and Mariano L. Del Castillo
concurring.
[2] Rollo, pp. 191-200.
[3] Rollo, p. 214.
[4] Rollo, p. 241.
[5] Rollo, pp. 191-200.
[6] Rollo, pp. 199-200.
[7] Rollo, pp. 201-213.
[8] Rollo, p. 214.
[9] Id.
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[30] cf. Marcos v. NLRC, G.R. No. 111744, 08 September 1995, 248 SCRA 146.
[31]
Manila Banking Corp. v. NLRC, G.R. No. 107487, 29 September 1997, 279
SCRA 602.
[32] Philippine Appliance Corp. v. Court of Appeals, G.R. No. 149434, 03 June 2004, 430
SCRA 525.
[33]Rollo, p. 196; see Annexes “15” and “17” of the Company’s Position Paper at
Rollo, pp. 84-187.
[34] Rollo, pp. 255-257.
[35] Rollo, p. 258.
[36] Philippine Appliance Corporation v. Court of Appeals, supra, Note 32.
[37] Rollo, p. 221; emphasis supplied.
[38] Rollo, p. 220.
[39] cf. Producers Bank of the Philippines v. NLRC, supra, Note 29.
[40] Rollo, p. 199.
Batas.org
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