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Non-Diminution of Benefits Philippine Labor Laws

Generally, employees are grandfathered in existing benefits voluntarily granted to them by their employer. Therefore, benefits and supplements that benefit employees cannot be reduced, reduced, hired or cancelled by the employer. The principle of non-reduction of benefits is in fact based on the constitutional mandate to protect workers` rights, promote their well-being and provide them with full protection. In turn, this mandate underlies article 4 of the Labour Code, which stipulates that “all doubts as to the application and interpretation of this Code, including its implementing rules and regulations, shall be expressed in favour of labour”. While working days can be shortened for valid reasons, I also believe that benefits can be suspended in the same way in these particular circumstances, provided that they are compatible with the principles of justice and fair play. Thus, if the enterprise can compensate for the withdrawal of the benefit of substantially equivalent value, or if it can prove that the benefits were provided conditionally, it may be excluded from the sanctions provided for in article 100 of the Labour Code. Article 100 of the Labour Code, also known as the no-decrease rule, states that benefits cannot be unilaterally cancelled or reduced by the employer because the benefit is part of the written or unwritten employment contract. The rule prohibiting the reduction of benefits applies if it is demonstrated that the granting of the benefit is based on an explicit policy or has evolved into a practice over a long period of time and that the practice is consistent and deliberate. No, this is not sustainable. There is a violation of the non-reduction of benefits under article 100 of the Labour Code if the granting of benefits in addition to wages has become an operational practice or has been included in an explicit policy and the employer unilaterally withdraws the granting of the benefit. While there is no rule on how long it takes for a benefit to become a corporate practice, the Supreme Court in Metropolitan Bank and Trust Co.

v. NLRC explained how it has ruled in a long series of cases that there is a corporate practice if it has been implemented for years. If applied to the facts of the case, the gas and transport allowance cannot be considered a commercial practice, since it lasted only 3 months. In the absence of an explicit policy and business practices, D`s argument that there has been a violation of the non-reduction rule is untenable. We also note that Autoplan has not become an enterprise practice. As a general rule, “practice” or “custom” is not a legally enforceable or enforceable source of law. In employment cases, however, benefits that have been granted voluntarily by the employer and have become operational practices are considered rights and are subject to the non-reduction rule. To be considered an operational practice, the benefit must be granted consistently and consciously by the employer over a long period of time. It assumes an indisputable fact that the employer has agreed to continue to grant the benefit, knowing full well that the employee is not covered by any legal or contractual provision for its payment. The burden of proof that the benefit has become an operational practice rests with the employee. As regards the duration of the exercise of the company`s practice as a voluntary employer, which cannot be revoked unilaterally by the employer, the case law has not established a fixed rule. In Davao Fruits Corporation v.

Associated Labor Unions, the company`s practice of including maternity leave pay and the cash equivalent of unused leave and sick leave in the calculation of the 13th month`s salary lasted six (6) years. In another case, Tiangco v. Leogardo, Jr., the employer continued the practice of paying a fixed monthly emergency allowance from November 1976 to February 1980 or three (3) years and four (4) months. In Sevilla Trading v. Semana, the employer maintained the practice of including non-essential benefits such as paid leave for unused sick leave and leave of at least two (2) years in the calculation of its 13th month`s salary. In all these cases, the Court found that the granting of these advantages had turned into a commercial practice or policy which could not be revoked ex officio. The common denominator in these cases seems to be regularity and the desirability of granting benefits over a longer period of time. Such a provision must be interpreted as prohibiting an employer from reducing or cancelling non-essential benefits granted to its employees by contract or practice of the enterprise. However, the rule of non-reduction of benefits is not absolute. Several cases have been decided by the Supreme Court, which provide for exceptions.

In these cases, the Colonel decided, for various reasons, that the withdrawal of certain social benefits did not constitute a violation of article 100 of the Labour Code. So: The concept of non-reduction of benefits could be anchored in two points. The first is Section 127 of the Labor Code of the Philippines, as amended. This article reads as follows: No. Case law explains that non-mitigation refers to the reduction of benefits granted to employees at their discretion that cannot be withdrawn because they are granted on the basis of contracts or practices that have become policy over time (Coca-Cola Bottlers Philippines, Inc. v. Iloilo Coca-Cola Plant Employees Labor Union, GR No. 195297 of 5 December 2018). Thus, if, for legitimate business reasons, management reduces work on a rotational basis, four- or three-day work weeks, or reduced working hours, this is not an invalid reduction.

The rule of fair daily work is that the fair daily wage is not violated. Paying employees without vacation credits, even when they are not working, is not a legal obligation, even before the COVID-19 situation. Subject matter: non-reduction rule; If non-discount may not apply. Benefits granted to employees which, under article 100 of the Labour Code, must be considered a business practice and which cannot be withdrawn unilaterally by the employer, the granting of these benefits must be subject to the following conditions: 100. Prohibition of cancellation or reduction of services. – Nothing in this book should be construed as eliminating or reducing in any way any compensation or other social benefits claimed at the time of the promulgation of this Code. In 2011, Rollette requested a third service vehicle. This time, the petitioner demanded that Rollette pay equity of more than 550,000 pesos. The petitioner has also adopted a cost-sharing system whereby Rollette must assume 40% of the purchase price.

Rollette was injured and filed a complaint with the labour arbitrator against the complainant for violation of article 100 of the Labour Code concerning the non-reduction of benefits. At the heart of many problems is the game between “no diminishing benefits” and management discretion. The non-reduction of benefits is an excellent refuge for workers, but management discretion, exercised wisely, is a strong exception. There is a final exception which, although not provided for by law, prevents a violation of article 10 of the Labour Code. The rule contained in article 100 of the Labour Code prohibits the unilateral reduction or withdrawal of benefits. Therefore, if both the employer and the employees agree to cancel the benefit, this is not considered a violation of the rule. The principle of non-reduction of benefits, enshrined in Article 10013 of the Labour Code, prohibited Netlink from unilaterally reducing, reducing, ceasing or eliminating this practice. In truth, the term “indemnities or other benefits to workers” in section 100 must be interpreted as referring to remuneration and privileges received by a worker in addition to regular wages or salaries.

Severance pay is not legally payable if employers have closed their business due to serious losses (article 283 of the Labour Code). However, if it is simply a matter of saving labor costs or making operations efficient, the separation allowance is due at one month for each year of service, or at least half a month for each year of service, if it is made to stop the bleeding of losses. While separation is an exercise of management discretion, labour policies encourage the use of flexible work arrangements to prevent employees from terminating their jobs at this time. In this case, the labour courts correctly concluded that Home Credit`s act of handing over service vehicles to Rollette was a corporate practice – but not with respect to the non-participation aspect.

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