G.R. NO. 176985 - Ricardo E. Vergara, Jr. v. Coca-Cola Bottlers Philippines, Inc.

Facts:

Ricardo Vergara Jr. retired from Coca Bottlers Philippines Inc. in 2002, after 34 years of service, as district sales supervisor
(DSS).
At that time, the companys retirement plan stated that the annual performance incentive pay of sales supervisors shall be
considered in the computation of retirement benefits using the following formula:

Basic monthly salary + monthly average performance incentive (which is the total performance incentives earned
during the year immediately preceding + 12 months) x number of years in service.

Unsatisfied with the retirement pay he got, Vergara filed a complaint against the company with the National Labor Relations
Commission for payment of the sum of P474,600 representing unpaid sales management incentives (SMI), and the recovery
of the P496,016.67 that the company deducted from his pay to cover for the unpaid accounts of two dealers within his sales
territory.
After going through the NLRC, the parties entered into a compromise agreement with the company reimbursing Vergara the
P496,016.67 it deducted for the earlier mentioned unpaid accounts.
His plea for the payment of the SMI was, unfortunately, denied by the NLRC and, later, by the Court of Appeals. From these
turndowns, Vergara sought relief from the Supreme Court.

Issue: whether the SMI should be included in the computation of his retirement benefits on the ground of consistent company
practice.

Ruling: NO.

Generally, employees have a vested right over existing benefits voluntarily granted to them by their employer. Thus, 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 actually founded on the Constitutional mandate to protect the rights of workers, to
promote their welfare, and to afford them full protection. In turn, said mandate is the basis of Article 4 of the Labor Code which
states that "all doubts in the implementation and interpretation of this Code, including its implementing rules and regulations, shall
be rendered in favor of labor.

Benefits are considered diminished if the following requisites are present: a) the grant or benefit is founded on a policy or has
ripened into a practice over a long period of time; b) the practice is consistent and deliberate; c) the practice is not due to error in the
construction or application of a doubtful or difficult question of law; and d) the diminution or discontinuance is done unilaterally by
the employer.

For a practice to be characterized as regular, it is essential that the employee is able to prove by substantial evidence that the giving
of the benefit is done over a long period of time, and that it has been made consistently and deliberately.

In this case, the Court found no substantial evidence to prove that the grant of SMI to all retired DSSs regardless of whether or not
they qualify to the same had ripened into company practice. Despite more than sufficient opportunity given him while his case was
pending before the NLRC, the CA, and even to the Court, petitioner utterly failed to adduce proof to establish his allegation that SMI
has been consistently, deliberately and voluntarily granted to all retired DSSs without any qualification or conditions whatsoever.

(To support his claim, Vergara submitted the sworn statements of two retired sales supervisors who said the SMI was included in their retirement
package even if they did not meet the sales and collection qualifiers. Against these testimonies, the company presented the counter-affidavits of
witnesses who stated that the inclusion of the SMI in one of the retirees pay was made to achieve industrial peace in the plant when it was going
through some labor problems, and that the other retiree has, in reality, met his sales and collection quota as to qualify him for the SMI.)