EASTERN TELECOMMUNICATIONS PHILIPPINES, INC.

, Petitioner,
vs.
EASTERN TELECOMS EMPLOYEES UNION, Respondent.

Facts:

 ETPI, Inc., is a corporation engaged in business providing telecommunications

facilities.
 ETP Union is the certified exclusive bargaining agent of the company’s rank and
file employees.
 The Corporation and the Union has a Collective Bargaining Agreement with a
Side Agreement stating that:
“4. Employment Related Bonuses. The Company confirms that the 14 th,
15th and 16th month bonuses (other than 13th month pay) are granted.”
 It has been established as a fact that the corporation has been giving its
employees 14th month bonus every April as well as 15th and 16th month bonuses
every December of the year since 1975 to 2002 or for 27 years.
 Now, in dispute is the company’s plan to defer payment of such bonuses for
2003 to sometime in April 2004 subject to availability of funds due to the alleged
continuing deterioration of company’s financial position since 2000.
 The corporation also contends that it is not under any legal compulsion to pay
and that they are not part of the demandable wages or salary of the employee.

Issue:

Whether or not the giving of the subject bonuses is part of the wage, salary or
compensation thus, enforceable obligations and cannot be withdrawn.

Whether or not the giving of the

Ruling:

 The court ruled in the affirmative in favor or the Union.

 The Union and the Corporation agreed on the inclusion of a provision for the
grant of the subject bonuses in the 1998-2001 CBA Side Agreement as well as
that of which in 2001-2004. Such provision reveals no qualification or conditions
specified for the grant of the benefits.
 Thus, the Court held that the payment of these bonuses was not related or
dependent to the profitability of business operations.
 Moreover, it is manifestly clear that despite losses in the past year, the
corporation did not cease in giving such bonuses and has been considered as a
regular practice.
 The considerable length of time the corporation has been giving the special
grants to its employees indicates a unilateral and voluntary act on its part to
 continue giving said benefits knowing that such act was not required by law.
Accordingly, a company practice in favor of the employees has been established
and the payments made by ETPI pursuant thereto ripened into benefits enjoyed
by the employees.
 The giving of the subject bonuses cannot be peremptorily withdrawn by ETPI
without violating Article 100 of the Labor Code:
Art. 100. Prohibition against elimination or diminution of benefits. –
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 rule is settled that any benefit and supplement being enjoyed by the
employees cannot be reduced, diminished, discontinued or eliminated by the
employer. The principle of non-diminution of benefits is founded on the
constitutional mandate to protect the rights of workers and to promote their
welfare and to afford labor full protection.
 Interestingly, ETPI never presented countervailing evidence to refute ETEU’s
claim that the company has been continuously paying bonuses since 1975 up to
2002 regardless of its financial state. Its failure to controvert the allegation, when
it had the opportunity and resources to do so, works in favor of ETEU.