UNIVERSITY OF THE EAST v. UNIVERSITY OF THE EAST EMPLOYEES ASSOCIATION G.R. No.

179593, 14 September 2011, THIRD DIVISION (Mendoza, J.) The principle against diminution of benefits shall be applicable only if the grant or benefit is founded on an express policy or has ripened into a practice over a long period of time which is consistent and deliberate. Prior to school year (SY) 1983-1984, a 70% incremental proceed from tuition fee increases, as mandated by Presidential Decree No. 451 (PD No. 451) as amended, was distributed by petitioner University of the East (UE) in proportion to the average number of academic and non-academic personnel. This distribution scheme was the subject of an agreement signed by the management, faculty association and respondent University of the East Employees Association (UEEA), being the duly registered labor union of the rank-and-file employees of UE. However, starting SY 1994-1995, the 70% incremental proceeds from the tuition fee increase was distributed only to the covered employees of UE basing on a new formula of percentage of salary. Respondent, through its president, questioned the validity of such manner of distribution. In a tripartite meeting, everybody, even the UEEA officers present in the meeting agreed, that the new distribution scheme would now be based on percentage of salary and not anymore on the average number of personnel. However, UEEA filed a complaint against UE for non-payment/underpayment of the rank-and-file employees share of the tuition fee increases, consequences under the new distribution scheme. ISSUE: Whether or not UEs revised employee distribution scheme for proceeds of tuition fee increase is valid HELD: Petition GRANTED. The Supreme Court finds the distribution scheme for proceeds of tuition fee increase to be valid. First and foremost, the new distribution scheme is in accordance with the law. UE, being a private educational institution has the full discretion on the disposition of the 70% incremental proceeds from tuition fee increase, with the only condition imposed that the proceeds should go to the salaries, wages and allowances and other benefits of teachers and non-teaching personnel. Also, the distribution scheme is clearly not a diminution of benefits, contrary to respondents claim. The principle against diminution of benefits shall

be applicable only if the grant or benefit is founded on an express policy or has ripened into a practice over a long period of time which is consistent and deliberate, both of which conditions do not exist in the case. The revised distribution scheme is not a product of an express policy nor has it ripened a consistent and deliberate practice. UE also did not change the distribution scheme peremptorily, as proven in the tripartite meeting that was held to settle the issue. Moreover, it was erroneous on the part of the respondent to rely on the October 18, 1983 Agreement which states the previous distribution scheme. Such agreement was deemed to have been changed by the new agreement settled during the tripartite meeting held on June 19, 1995, of which was attended by representatives of UEEA. It is also further noted that the respondents did not complain against the new distribution scheme during the said meeting, and even signed the minutes of the meeting to signify their conformity to it. Such action shows their adherence to the scheme and their act of questioning it now also shows an act of estopping. Lastly, the new distribution scheme is valid also for the reason that the complaint has also prescribed. It being a money claim arising from employeremployee relationship, the complaint prescribes in three (3 years) as provided for in Article 291 of the Labor Code. The respondent filed the complaint on April 27, 1999, more than three years from the alleged violation in 1994 and thus, it was clear that prescription has set in, making the distribution scheme maintain its validity.