ARCO METAL v.

SAMAHAN NG MGA MANGAGAWA SA ARCO METAL

PRINCIPLE OF NON-DIMUNATION OF BENEFITS: Any benefit and

supplement being enjoyed by employees CANNOT be REDUCED, DIMINISHED,
DISCONTINUED or ELIMINATED by the employer. The jurisprudence has not laid
down any rule specifying a minimum number of years within which a company
practice must be exercised in order to constitute voluntary company practice.

FACTS:

Arco Metal is a company that manufactures metal products, whereas

Samahan ng mga Manggagawa is the labor union of Arcos rank and file employees.

In December 2003, Arco paid the 13 th month pay, bonus and leave
encashment of the 3 union members in amounts proportional to the service they
actually rendered in a year, which is less than 12 mos. Samahan ng Manggagawa
protested the prorated scheme, claiming that on payments made in 1992, 1993,
94, 96, 99, 2003 and 2004 to other 7 employees who also did not served for the
full 12 months, Arco did not prorate the payment of the same benefits. According to
Arco, the giving in full of the benefit was a mere error and it was only in 2003 that
such error was discovered. Samahan ng Manggagawa filed a complaint before the
National Conciliation and Mediation Board saying that the prorated payments
violated the rule against diminution of benefits (Art 100).

VOLUNTARY ARBITRATOR:

In favor of Arco. VA said that the giving of the contested benefits in full,
irrespective of the actual service rendered within 1 yr. has NOT ripened into
practice. He also interpreted for each year of service found in the provisions of the
CBA to mean that an employee must have rendered 1yr of servce in order to be
entitled to the full benefits provided in the CBA.

CA:

In favor of the Samahan ng Manggagawa, granted that the 13 th month,

bonus, vacation and sick leave conversion to cash shall be paid to the employees in
FULL irrespective of the actual service rendered.

CA said that Arco had an existing voluntary practice of paying of the said
benefits in full to its employees. Arco has not presented evidence to show that it has
no voluntary practice of granting the contested benefits in full and w/o regard to the
service actually rendered within a year.

SC:

In favor of the Samahan ng Manggagawa. The CBA said that in order to

be entitled to the full monetization, one must have rendered at least 1yr. of service.

Any benefit and supplement being enjoyed by employees CANNOT be

REDUCED, DIMINISHED, DISCONTINUED or ELIMINATED by the employer. The
PRICIPLE OF NON-DIMINUTION OF BENEFITS is founded in the Constitution to
protect the rights of workers and promote their welfare, and to afford labor full
protection.

In the years 92, 93, 94, 96, 99, and 2003, Arco had adopted a policy of
freely, voluntarily and consistently granting full benefits to its employees
regardless of the length of service rendered. True, there were only 7 employees who
benefited from such practice but it was an established practice nonetheless.
Jurisprudence had not laid down any rule specifying a minimum number of years
within which a company practice must be exercised in order to constitute voluntary
company practice.

In cases of money claims, the employer has the burden of proving.