In Arco Metal Products Co. Inc. v.

SAMARM-NAFLU (GR 170734, May 14, 2008), the

Honorable Supreme Court ruled that “any benefit and supplement being enjoyed by
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 promote their welfare,” and “to afford labor full
protection.” Though voluntarily given, these benefits provided by the employers may not
be unilaterally withdrawn even if later on, they could no longer afford providing for such.
It must be noted that such incident occurs whenever the giving of benefits ripens into
company practice.

To constitute as company practice, it must be shown that the giving of benefits by

employers to employees: (1) has been done for a considerable long period of time; (2) has
been consistently and intentionally done; and (3) has not been a product of erroneous
interpretation or construction of a doubtful or difficult question of law (Vergara v. Coca
Cola Bottlers Philippines, GR 176985, April 1, 2013). Once such giving of benefits attains
the status of a company practice, the employees can demand these benefits as a matter of
right.