1. Voluntary company practice; Rationale.

To be considered a company practice, the giving of the

benefits should have been done over a long period of time, and must be shown to have been consistent
and deliberate. The test or rationale of this rule on long practice requires an indubitable showing that
the employer agreed to continue giving the benefits knowing fully well that said employees are not
covered by the law requiring payment thereof.
bid.; !ength of time. "ith regard to the length of time the company practice should have been e#ercised
to constitute voluntary employer practice which cannot be unilaterally withdrawn by the employer,
$urisprudence has not laid down any hard and fast rule. t appears though from a number of cases that it
is sufficient that there is regularity and deliberateness of the grant of benefits over a significant period of
time. %&etropolitan 'ank and Trust (ompany vs. )!R(, *.R. )o. 1+,-,., /une 1., ,00-.1
22

Voluntary Company Practice; Giving of Benefits
Posted onJanuary 19, 2010by maduran01
In the recent case of
Metropolitan Bank and Trust Company vs. National Labor elationsCommission! "t #l.!
$% &une '(()!
the Supreme Court laid down the rationale on the companyspractice of !i"in! benefits, that
cannot be unilaterally withdrawn or diminished without "iolatin! the spiritand intent of #rt$ 100 of
the %abor Code, that is & the benefits should ha"e been done o"er a lon! periodof time, and
must be shown to ha"e been consistent and deliberate$Voluntary company practice' (ationale$
)o be considered a company practice, the !i"in! of the benefitsshould ha"e been done o"er a
lon! period of time, and must be shown to ha"e been consistent anddeliberate$ )he test or
rationale of this rule on lon! practice re*uires an indubitable showin! that theemployer a!reed
to continue !i"in! the benefits +nowin! fully well that said employees are not co"eredby the law
re*uirin! payment thereof$Ibid$' %en!th of time$ ,ith re!ard to the len!th of time the company
practice should ha"e been e-ercisedto constitute "oluntary employer practice which cannot be
unilaterally withdrawn by the employer, .urisprudence has not laid down any hard and fast rule$
It appears thou!h from a number of cases that itis sufficient that there is re!ularity and
deliberateness of the !rant of benefits o"er a
significant period
of time$/eres the di!est0
M"T*P*L+T#N B#N, and T-.T C*MP#N/ vs. N#T+*N#L L#B* "L#T+*N.C*MM+..+*N!
0"L+P" #. P#T#G and B+"N1"N+2* C. 0L*#! G.. No. $3')'%! &une $%!
'(()L"*N#2*42" C#.T*!
J
.50#CT.5
(espondents 1elipe Pata! 2Pata!3 and 4ien"enido 1lora 21lora3 were former employees
of petitioner 5etropolitan 4an+ and )rust Company 25etroban+3$ 4oth respondents a"ailed of
the ban+scompulsory retirement plan in accordance with the 1996 7fficers 4enefits
5emorandum$ #t the time of his retirement on 1ebruary 1, 1998, Pata! was an #ssistant
5ana!er$ 1lora was a Senior 5ana!er when he retired on #pril 1, 1998$ 4oth of them recei"ed
their respecti"e retirement benefits computed at1869 of their !ross monthly salary for e"ery
year of ser"ice as pro"ided under the said 19965emorandum$:arly in 1998, Collecti"e
4ar!ainin! #!reement 2C4#3 ne!otiations were on;!oin! between5etroban+ and its ran+ and
file employees for the period 1998;2000$ Pata! wrote a letter dated1ebruary 2, 1998 to the ban+
re*uestin! that his retirement benefits be computed at the new rate shouldthere be an increase
thereof in anticipation of possible chan!es in officers benefits after the si!nin! of the new C4#
with the ran+ and file$ 1lora li+ewise wrote 5etroban+ in 5arch 26, 1998, re*uestin! theban+ to
use as basis in the computation of their retirement benefits the increased rate of 2009
asembodied in the .ust concluded C4# between the ban+ and its ran+ and file
employees$ 5etroban+ didnot reply to their re*uests$)he records show that since the 198<;
1988 C4#, and continuin! with each C4# concludedthereafter with its ran+ and file employees,
5etroban+ would issue a 5emorandum !rantin! similar or better benefits to its mana!erial
employees or officers, retroacti"e to January 1
st
of the first year of effecti"ity of the C4#$ ,hen the 1998;2000 C4# was appro"ed, 5etroban+,
in line with its pastpractice, issued on June 10, 1998, a 5emorandum on 7fficers 4enefits,
which pro"ided for impro"edbenefits to its officers 2the 1998 7fficers 4enefits
5emorandum3$ )his 5emorandum was si!ned bythen 5etroban+ President #ntonio S$ #bacan,
Jr$ Pertinently, the compulsory retirement benefit for officers was increased from 1869 to 2009
effecti"e January 1, 1998, but with the condition that thebenefits shall only be e-tended to those
who remain in ser"ice as of June 16, 1998$Conse*uently on #u!ust =1, 1998, Pata! and 1lora,
throu!h their counsel, wrote a letter to5etroban+ demandin! the payment of their
unpaid retirement benefits, representin! the increasedbenefits they should ha"e recei"ed
under the 1998 7fficers 4enefits 5emorandum$7n September 26, 1998, Pata! and 1lora filed
with the %abor #rbiter their consolidatedcomplaint a!ainst 5etroban+ for underpayment of
retirement benefits and dama!es, assertin! that
pursuant to the 1998 7fficers 4enefits 5emorandum, they were entitled to additional
retirementbenefits$ Pata!, for his part, also claimed he was entitled to payment of his 199> profit
share and 1998structural ad.ustment$)he %abor #rbiter rendered a decision, dismissin! the
complaint of Pata! and 1lora$ Pata! and1lora filed an appeal with the ?%(C$ )he )hird @i"ision
of the ?%(C partially !ranted the appeal anddirected 5etroban+ to pay Pata! and 1lora their
unpaid beneficial impro"ements under the 19987fficers 4enefits 5emorandum$ #!!rie"ed with
the rulin! of the ?%(C, 5etroban+ ele"ated the matter to the C# by way of a petition for
certiorari$ )he C# promul!ated its assailed decision dismissin!5etroban+s petition and
affirmin! the resolution of the ?%(C$ Petitioners subse*uent motion for reconsideration was
denied by the C#$/ence, the instant petition for re"iew on certiorari under (ule A6 of the 199>
(ules of Ci"il Procedure$
+..-"5
,hether respondents can still reco"er hi!her benefits under the 1998 7fficers 4enefits
5emorandumdespite the fact that they ha"e compulsorily retired prior to the issuance of said
memorandum and didnot meet the condition therein re*uirin! them to be employed as of June
16, 1998$
6"L25
Bes$)o be considered a company practice, the !i"in! of the benefits should ha"e been done
o"er a lon!period of time, and must be shown to ha"e been consistent and deliberate$ )he test
or rationale of thisrule on lon! practice re*uires an indubitable showin! that the employer
a!reed to continue !i"in! thebenefits +nowin! fully well that said employees are not co"ered by
the law re*uirin! payment thereof$In other words, for o"er a decade, 5etroban+ has
consistently! deliberately and voluntarily
!rantedimpro"ed benefits to its officers, after the si!nin! of each C4# with its ran+ and
file employees,retroacti"e to January 1
st
of the same year as the !rant of impro"ed benefits and without the conditionthat the officers
should remain employees as of a certain date$ )his undeniably indicates a unilateraland
"oluntary act on 5etroban+s part, to !i"e said benefits to its officers, +nowin! that such act was
notre*uired by law or the company retirement plan$,ith re!ard to the len!th of time the
company practice should ha"e been e-ercised to constitute"oluntary employer practice which
cannot be unilaterally withdrawn by the employer, .urisprudence hasnot laid down any hard and
fast rule$ In the case of
Davao Fruits Corporation v. Associated Labor Unions,
the company practice of includin! in the computation of the 1=th;month pay the maternity
lea"epay and cash e*ui"alent of unused "acation and sic+ lea"e lasted for si- 2<3 years$ In
another case,
Tiangco v. Leogardo, Jr
$, the employer carried on the practice of !i"in! a fi-ed monthly emer!encyallowance from
?o"ember 19>< to 1ebruary 1980, or three 2=3 years and four 2A3 months$ ,hilein
Sevilla Trading v. Semana
, the employer +ept the practice of includin! non;basic benefits such aspaid lea"es for unused
sic+ lea"e and "acation lea"e in the computation of their 1=th;month pay for atleast two 223
years$ In all these cases, this Court held that the !rant of these benefits has ripened
intocompany practice or policy which cannot be peremptorily withdrawn$ )he common
denominator in thesecases appears to be the re!ularity and deliberateness of the !rant of
benefits o"er a si!nificant period of time$