Republic of the Philippines

Supreme Court
Manila

THIRD DIVISION


EASTERN
TELECOMMUNICATIONS
PHILIPPINES, INC,
Petitioner,



- versus -



EASTERN TELECOMS
EMPLO!EES UNION,
Respondent.


"R No #$%&&%

Present:

VELASCO, JR., J., Chairperson,
BERSAM!,

ABA",
ME!"O#A, and
PERLAS-BER!ABE, JJ.


Promul$ated:

%e&ruar' (, )*+)
, ----------------------------------------------------------------------------------------,

D E C I S I O N

MENDOZA, J.:

- "esi$nated as additional mem&er in lieu o. Asso/iate Justi/e "iosdado M. Peralta, per Ra..le
dated Jul' +, )*+*.

Be.ore t0e Court is a petition .or revie1 on /ertiorari see2in$ modi.i/ation
o. t0e June )3, )**( "e/ision
+
4+5 o. t0e Court o. Appeals (CA) and its "e/em&er
+), )**( Resolution,
)
4)5 in CA-6.R. SP !o. 7+789, annullin$ t0e April )(, )**3
Resolution
:
4:5 o. t0e !ational La&or Relations Commission (NLRC) in !LRC-
!CR-CC-***)8:-*9 entitled ;In the Matter of the Labor Dispute in Eastern
Telecounications, !hilippines, Inc."

The '(cts

As s'nt0esi<ed &' t0e !LRC, t0e .a/ts o. t0e /ase are as .ollo1s, #i$:

Eastern Telecommunications Phils., Inc. (ETPI) is a corporation
engaged in the business of providing telecommunications facilities,
particularly leasing international date lines or circuits, regular landlines,
internet and data services, employing approximately 4 employees.

Eastern Telecoms Employees !nion (ETE!) is the certified
exclusive bargaining agent of the company"s ran# and file employees $ith
a strong follo$ing of %4& regular members. It has an existing collecti've(
bargaining agreement $ith the company to expire in the year )4 $ith a
*ide +greement signed on *eptember ,, )%.

In essence, the labor dispute $as a spin-off of the company"s plan to
defer payment of the ), %4
th
, %.
th
and %/
th
month bonuses sometime in
+4+5 Rollo, pp. 37-8+. Penned &' Asso/iate Justi/e Ed$ardo P. Cru< 1it0 Asso/iate Justi/es
%ernanda Lampas Peralta and Ri/ardo R. Rosario, /on/urrin$.
)4)5 d. at 8:-89.
:4:5 d. at 83-7+.
+pril )4. The company"s main ground in postponing the payment of
bonuses is due to allege continuing deterioration of company"s financial
position $hich started in the year ). 0o$ever, ETPI $hile postponing
payment of bonuses sometime in +pril )4, such payment $ould also be
sub1ect to availability of funds.

Invo#ing the *ide +greement of the existing 2ollective 3argaining
+greement for the period )%-)4 bet$een ETPI and ETE! $hich
stated as follo$s4

4. Employment Related Bonuses. The Company
confirms that the 14
th
, 15
th
and 16
th
month bonuses other
than 1!
th
month pay" are #ranted.$

The union strongly opposed the deferment in payment of the bonuses by
filing a preventive mediation complaint $ith the 5263 on 7uly ,, ),,
the purpose of $hich complaint is to determine the date $hen the bonus
should be paid.

In the conference held at the 5263, ETPI reiterated its stand that
payment of the bonuses $ould only be made in +pril )4 to $hich date
of payment, the union agreed. Thus, considering the agreement forged
bet$een the parties, the said agreement $as reduced to a 6emorandum of
+greement. The union re8uested that the President of the company should
be made a signatory to the agreement, ho$ever, the latter refused to sign.
In addition to such a refusal, the company made a sudden turnaround in
its position by declaring that they $ill no longer pay the bonuses until the
issue is resolved through compulsory arbitration.


The company"s change in position $as contained in a letter dated
+pril %4, )4 $ritten to the union by 6r. *onny 7avier, 9ice-President for
0uman :esources and +dministration, stating that ;the deferred release
of bonuses had been superseded and voided due to the union"s filing of the
issue to the 5263 on 7uly %<, ),.= 0e declared that ;until the matter is
resolved in a compulsory arbitration, the company cannot and $ill not pay
any >bonuses" to any and all union members.=

Thus, on +pril )/, )4, ETE! filed a 5otice of *tri#e on the
ground of unfair labor practice for failure of ETPI to pay the bonuses in
gross violation of the economic provision of the existing 23+.

?n 6ay %@, )4, the *ecretary of Aabor and Employment, finding
that the company is engaged in an industry considered vital to the
economy and any $or# disruption thereat $ill adversely affect not only its
operation but also that of the other business relying on its services,
certified the labor dispute for compulsory arbitration pursuant to +rticle
)/, (8) of the Aabor 2ode as amended.

+cting on the certified labor dispute, a hearing $as called on 7uly
%/, )4 $herein the parties have submitted that the issues for resolution
are (%) unfair labor practice and ()) the grant of %4
th
, %.
th
and %/
th
month
bonuses for ),, and %4
th
month bonus for )4. Thereafter, they $ere
directed to submit their respective position papers and evidence in support
thereof after $hich submission, they agreed to have the case considered
submitted for decision.
4
'4(


n its position paper,
3
435 t0e Eastern =ele/oms Emplo'ees >nion (ETE%)
/laimed t0at Eastern =ele/ommuni/ations P0ilippines, n/. (ET!I) 0ad /onsistentl'
and voluntaril' &een $ivin$ out +9
t0
mont0 &onus durin$ t0e mont0 o. April, and
+3
t0
and +?
t0
mont0 &onuses ever' "e/em&er o. ea/0 'ear (sub&ect bonuses) to its
emplo'ees .rom +783 to )**), even 10en it did not reali<e an' net pro.its. E=E>
posited t0at &' reason o. its lon$ and re$ular /on/ession, t0e pa'ment o. t0ese
monetar' &ene.its 0ad ripened into a /ompan' pra/ti/e 10i/0 /ould no lon$er &e
unilaterall' 1it0dra1n &' E=P. E=E> added t0at t0is lon$-standin$ /ompan'
pra/ti/e 0ad &een e,pressl' /on.irmed in t0e Side A$reements o. t0e +77(-)**+
and )**+-)**9 Colle/tive Bar$ainin$ A$reements (C'A) 10i/0 provided .or t0e
/ontinuous $rant o. t0ese &onuses in no un/ertain terms. E=E> t0eori<ed t0at t0e
$rant o. t0e su&@e/t &onuses is not onl' a /ompan' pra/ti/e &ut also a /ontra/tual
o&li$ation o. E=P to t0e union mem&ers.

E=E> /ontended t0at t0e un@usti.ied and mali/ious re.usal o. t0e /ompan'
to pa' t0e su&@e/t &onuses 1as a /lear violation o. t0e e/onomi/ provision o. t0e
9495 d. at 8?-8(.
3435 d. at 979-3+9.
CBA and /onstitutes un.air la&or pra/ti/e (%L!). A//ordin$ to E=E>, su/0 re.usal
1as not0in$ &ut a plo' to spite t0e union .or &rin$in$ t0e matter o. dela' in t0e
pa'ment o. t0e su&@e/t &onuses to t0e !ational Con/iliation and Mediation Board
(NCM'). t pra'ed .or t0e a1ard o. moral and e,emplar' dama$es as 1ell as
attorne'As .ees .or t0e un.air la&or pra/ti/e alle$edl' /ommitted &' t0e /ompan'.

On t0e ot0er 0and, E=P in its position paper,
?
4?5 Buestioned t0e aut0orit' o.
t0e !LRC to ta2e /o$ni<an/e o. t0e /ase /ontendin$ t0at it 0ad no @urisdi/tion over
t0e issue 10i/0 merel' involved t0e interpretation o. t0e e/onomi/ provision o. t0e
)**+-)**9 CBA Side A$reement. !onet0eless, it maintained t0at t0e /omplaint .or
nonpa'ment o. +9
t0
, +3
t0
and +?
t0
mont0 &onuses .or )**: and +9
t0
mont0 &onus .or
)**9 1as &ere.t o. an' le$al and .a/tual &asis. t averred t0at t0e su&@e/t &onuses
1ere not part o. t0e le$all' demanda&le 1a$e and t0e $rant t0ereo. to its
emplo'ees 1as an a/t o. pure $ratuit' and $enerosit' on its part, involvin$ t0e
e,er/ise o. mana$ement prero$ative and al1a's dependent on t0e .inan/ial
per.orman/e and reali<ation o. pro.its. t posited t0at it resorted to t0e
dis/ontinuan/e o. pa'ment o. t0e &onuses due to t0e una&ated 0u$e losses t0at t0e
/ompan' 0ad /ontinuousl' e,perien/ed. t /laimed t0at it 0ad &een su..erin$
serious &usiness losses sin/e )*** and to reBuire t0e /ompan' to pa' t0e su&@e/t
&onuses durin$ its dire .inan/ial straits 1ould in e..e/t penali<e it .or its past
$enerosit'. t alle$ed t0at t0e non-pa'ment o. t0e su&@e/t &onuses 1as neit0er
.la$rant nor mali/ious and, 0en/e, 1ould not amount to un.air la&or pra/ti/e.

?4?5 d. at ++(-+9:.
%urt0er, E=P ar$ued t0at t0e &onus provision in t0e )**+-)**9 CBA Side
A$reement 1as a mere a..irmation t0at t0e distri&ution o. &onuses 1as
dis/retionar' to t0e /ompan', premised and /onditioned on t0e su//ess o. t0e
&usiness and availa&ilit' o. /as0. t su&mitted t0at said &onus provision partoo2 o.
t0e nature o. a ;one-timeC $rant 10i/0 t0e emplo'ees ma' demand onl' durin$ t0e
'ear 10en t0e Side A$reement 1as e,e/uted and 1as never intended to /over t0e
entire term o. t0e CBA. %inall', E=P emp0asi<ed t0at even i. it 0ad an
un/onditional o&li$ation to $rant &onuses to its emplo'ees, t0e drasti/ de/line in its
.inan/ial /ondition 0ad alread' le$all' released it t0ere.rom pursuant to Arti/le
+)?8 o. t0e Civil Code.

On April )(, )**3, t0e !LRC issued its Resolution dismissin$ E=E>As
/omplaint and 0eld t0at E=P /ould not &e .or/ed to pa' t0e union mem&ers t0e
+9
t0
, +3
t0
and +?
t0
mont0 &onuses .or t0e 'ear )**: and t0e +9
t0
mont0 &onus .or t0e
'ear )**9 inasmu/0 as t0e pa'ment o. t0ese additional &ene.its 1as &asi/all' a
mana$ement prero$ative, &ein$ an a/t o. $enerosit' and muni.i/en/e on t0e part o.
t0e /ompan' and /ontin$ent upon t0e reali<ation o. pro.its. =0e !LRC pronoun/ed
t0at E=P ma' not &e o&li$ed to pa' t0ese e,tra /ompensations in vie1 o. t0e
su&stantial de/line in its .inan/ial /ondition. Li2e1ise, t0e !LRC .ound t0at E=P
1as not $uilt' o. t0e >LP /0ar$e ela&oratin$ t0at no su..i/ient and su&stantial
eviden/e 1as addu/ed to attri&ute mali/e to t0e /ompan' .or its re.usal to pa' t0e
su&@e/t &onuses. =0e dispositive portion o. t0e resolution reads:

B0E:EC?:E, premises considered, the instant complaint is
hereby DI*6I**ED for lac# of merit.
*? ?:DE:ED.
&
'&(

Respondent E=E> moved .or re/onsideration &ut t0e motion 1as denied &'
t0e !LRC in its Resolution dated Au$ust :+, )**3.

A$$rieved, E=E> .iled a petition .or /ertiorari
(
4(5 &e.ore t0e CA as/ri&in$
$rave a&use o. dis/retion on t0e !LRC .or disre$ardin$ its eviden/e 10i/0
alle$edl' 1ould prove t0at t0e su&@e/t &onuses 1ere part o. t0e union mem&ersA
1a$es, salaries or /ompensations. n addition, E=E> asserted t0at t0e !LRC
/ommitted $rave a&use o. dis/retion 10en it ruled t0at E=P is not /ontra/tuall'
&ound to $ive said &onuses to t0e union mem&ers.

n its assailed June )3, )**( "e/ision, t0e CA de/lared t0at t0e Side
A$reements o. t0e +77( and )**+ CBA /reated a /ontra/tual o&li$ation on E=P to
/on.er t0e su&@e/t &onuses to its emplo'ees 1it0out Buali.i/ation or /ondition. t
also .ound t0at t0e $rant o. said &onuses 0as alread' ripened into a /ompan'
pra/ti/e and t0eir denial 1ould amount to diminution o. t0e emplo'eesA &ene.its. t
0eld t0at E=P /ould not see2 re.u$e under Arti/le +)?8 o. t0e Civil Code &e/ause
t0is provision 1ould appl' onl' 10en t0e di..i/ult' in .ul.illin$ t0e /ontra/tual
o&li$ation 1as mani.estl' &e'ond t0e /ontemplation o. t0e parties, 10i/0 1as not
t0e /ase t0erein. =0e CA, 0o1ever, sustained t0e !LRC .indin$ t0at t0e alle$ation
8485 d. at 7*.
(4(5 d. at 93*-9(*.
o. >LP 1as devoid o. merit. =0e dispositive portion o. t0e Buestioned de/ision
reads:

B0E:EC?:E, premises considered, the instant petition is
E:+5TED and the resolution of the 5ational Aabor :elations
2ommission dated +pril )<, ). is hereby +55!AAED and *ET +*IDE.
:espondent Eastern Telecommunications Philippines, Inc. is ordered to
pay the members of petitioner their %4
th
, %.
th
and %/
th
month bonuses for
the year ), and %4
th
month

for the year )4. The complaint for unfair
labor practice against said respondent is DI*6I**ED.
*? ?:DE:ED.
@
'@(



ISSUES

"issatis.ied, E=P no1 /omes to t0is Court via Rule 93, raisin$ t0e
.ollo1in$ errors alle$edl' /ommitted &' t0e CA, to 1it:

I
THE COURT O' APPEALS COMMITTED "RAVE ERROR O' LA)
)HEN IT ANNULLED AND SET ASIDE THE RESOLUTIONS O' THE
NLRC DISRE"ARDIN" THE )ELL SETTLED RULE THAT A )RIT O'
CERTIORARI *UNDER RULE &%+ ISSUES ONL! 'OR CORRECTION
O' ERRORS O' ,URISDICTION OR "RAVE A-USE O' DISCRETION
AMOUNTIN" TO LAC. OR E/CESS O' ,URISDICTION
7475 d. at 8*-8+.

II

THE COURT O' APPEALS COMMITTED "RAVE ERROR O' LA)
)HEN IT DISRE"ARDED THE RULE THAT 'INDIN"S O' 'ACTS O'
0UASI1,UDICIAL -ODIES ARE ACCORDED 'INALIT! I' THE! ARE
SUPPORTED -! SU-STANTIAL EVIDENCE CONSIDERIN" THAT
THE CONCLUSIONS O' THE NLRC )ERE -ASED ON SU-STANTIAL
AND OVER)HELMIN" EVIDENCE AND UNDISPUTED 'ACTS

III

IT )AS A "RAVE ERROR O' LA) 'OR THE COURT O' APPEALS TO
CONSIDER THAT THE -ONUS "IVEN -! EASTERN
COMMUNICATIONS TO ITS EMPLO!EES IS NOT DEPENDENT ON
THE REALI2ATION O' PRO'ITS

IV

THE COURT O' APPEALS COMMITTED A "RAVE ERROR O' LA)
)HEN IT DISRE"ARDED THE UNDISPUTED 'ACT THAT EASTERN
COMMUNICATIONS IS SU''ERIN" 'ROM TREMENDOUS
'INANCIAL LOSSES, AND ORDERED EASTERN COMMUNICATIONS
TO "RANT THE -ONUSES RE"ARDLESS O' THE 'INANCIAL
DISTRESS O' EASTERN COMMUNICATIONS

V

THE COURT O' APPEALS COMMITTED A "RAVE ERROR O' LA)
)HEN IT ARRIVED AT THE CONCLUSION THAT THE "RANT O'
-ONUS "IVEN -! EASTERN COMMUNICATIONS TO ITS
EMPLO!EES HAS RIPENED INTO A COMPAN! PRACTICE
+*
4+*5


A /are.ul perusal o. t0e voluminous pleadin$s .iled &' t0e parties leads t0e
Court to /on/lude t0at t0is /ase revolves around t0e .ollo1in$ /ore issues:

+. D0et0er or not petitioner E=P is lia&le to pa' +9
t0
, +3
t0
and +?
t0
mont0 &onuses .or t0e 'ear )**: and +9
t0
mont0 &onus .or t0e 'ear
)**9 to t0e mem&ers o. respondent unionE and

). D0et0er or not t0e CA erred in not dismissin$ outri$0t E=E>As
petition .or /ertiorari.

E=P insists t0at it is under no le$al /ompulsion to pa' +9
t0
, +3
t0
and +?
t0
mont0 &onuses .or t0e 'ear )**: and +9
t0
mont0 &onus .or t0e 'ear )**9
/ontendin$ t0at t0e' are not part o. t0e demanda&le 1a$e or salar' and t0at t0eir
$rant is /onditional &ased on su//ess.ul &usiness per.orman/e and t0e availa&ilit'
o. /ompan' pro.its .rom 10i/0 to sour/e t0e same. =o t01art E=E>As monetar'
/laims, it insists t0at t0e distri&ution o. t0e su&@e/t &onuses .alls 1ell 1it0in t0e
/ompan'As prero$ative, &ein$ an a/t o. pure $ratuit' and $enerosit' on its part.
=0us, it /an 1it00old t0e $rant t0ereo. espe/iall' sin/e it is /urrentl' pla$ued 1it0
e/onomi/ di..i/ulties and .inan/ial losses. t alle$es t0at t0e /ompan'As .is/al
situation $reatl' de/lined due to tremendous and e,traordinar' losses it sustained
&e$innin$ t0e 'ear )***. t /laims t0at it /annot &e /ompelled to a/t li&erall' and
+*4+*5 d. at :9.
/on.er upon its emplo'ees additional &ene.its over and a&ove t0ose mandated &'
la1 10en it /annot a..ord to do so. t posits t0at so lon$ as t0e $ivin$ o. &onuses
1ill result in t0e .inan/ial ruin o. an alread' distressed /ompan', t0e emplo'er
/annot &e .or/ed to $rant t0e same.

E=P .urt0er avers t0at t0e a/t o. $ivin$ t0e su&@e/t &onuses did not ripen
into a /ompan' pra/ti/e ar$uin$ t0at it 0as al1a's &een a /ontin$ent one dependent
on t0e reali<ation o. pro.its and, 0en/e, t0e 1or2ers are not entitled to &onuses i.
t0e /ompan' does not ma2e pro.its .or a $iven 'ear. t asseverates t0at t0e +77(
and )**+ CBA Side A$reements did not /ontra/tuall' a..ord E=E> a vested
propert' ri$0t to a perennial pa'ment o. t0e &onuses. t opines t0at t0e &onus
provision in t0e Side A$reement allo1s t0e $ivin$ o. &ene.its onl' at t0e time o. its
e,e/ution. %or t0is reason, it /annot &e said t0at t0e $rant 0as ripened into a
/ompan' pra/ti/e. n addition, it ar$ues t0at even i. su/0 traditional /ompan'
pra/ti/e e,ists, t0e CA s0ould 0ave applied Arti/le +)?8 o. t0e Civil Code 10i/0
releases t0e o&li$or .rom t0e per.orman/e o. an o&li$ation 10en it 0as &e/ome so
di..i/ult to .ul.ill t0e same.

t is t0e petitionerAs stan/e t0at t0e CA s0ould 0ave dismissed outri$0t t0e
respondent unionAs petition .or /ertiorari alle$in$ t0at no Buestion o. @urisdi/tion
10atsoever 1as raised t0erein &ut, instead, 10at 1as &ein$ sou$0t 1as a @udi/ial
re-evaluation o. t0e adeBua/' or inadeBua/' o. t0e eviden/e on re/ord. t /laims
t0at t0e CA erred in disre$ardin$ t0e .indin$s o. t0e !LRC 10i/0 1ere &ased on
su&stantial and over10elmin$ eviden/e as 1ell as on undisputed .a/ts. E=P added
t0at t0e CA /ourt s0ould 0ave re.rained .rom ta/2lin$ issues o. .a/t and, instead,
limited itsel. on issues o. @urisdi/tion and $rave a&use o. @urisdi/tion amountin$ to
la/2 or e,/ess o. it.

The Cou3t4s Rulin5

As a $eneral rule, in petitions .or revie1 under Rule 93, t0e Court, not &ein$
a trier o. .a/ts, does not normall' em&ar2 on a re-e,amination o. t0e eviden/e
presented &' t0e /ontendin$ parties durin$ t0e trial o. t0e /ase /onsiderin$ t0at t0e
.indin$s o. .a/ts o. t0e CA are /on/lusive and &indin$ on t0e Court. =0e rule,
0o1ever, admits o. several e,/eptions, one o. 10i/0 is 10en t0e .indin$s o. t0e
appellate /ourt are /ontrar' to t0ose o. t0e trial /ourt or t0e lo1er administrative
&od', as t0e /ase ma' &e.
++
4++5 Considerin$ t0e in/on$ruent .a/tual /on/lusions o.
t0e CA and t0e !LRC, t0is Court .inds tsel. o&li$ed to resolve it.

=0e pivotal Buestion determinative o. t0is /ontrovers' is 10et0er t0e
mem&ers o. E=E> are entitled to t0e pa'ment o. +9
t0
, +3
t0
and +?
t0
mont0 &onuses
.or t0e 'ear )**: and +9
t0
mont0 &onus .or 'ear )**9.

A.ter an assiduous assessment o. t0e re/ord, t0e Court .inds no merit in t0e
petition.
++4++5 Ne( Cit) 'uil*ers, Inc. #. National Labor Relations Coission, 977 P0il. )*8, )+)-)+:
F)**3G.

%rom a le$al point o. vie1, a &onus is a $ratuit' or a/t o. li&eralit' o. t0e
$iver 10i/0 t0e re/ipient 0as no ri$0t to demand as a matter o. ri$0t.
+)
4+)5 =0e
$rant o. a &onus is &asi/all' a mana$ement prero$ative 10i/0 /annot &e .or/ed
upon t0e emplo'er 10o ma' not &e o&li$ed to assume t0e onerous &urden o.
$rantin$ &onuses or ot0er &ene.its aside .rom t0e emplo'eeAs &asi/ salaries or
1a$es.
+:
4+:5

A &onus, 0o1ever, &e/omes a demanda&le or en.or/ea&le o&li$ation 10en it
is made part o. t0e 1a$e or salar' or /ompensation o. t0e emplo'ee.
+9
4+95
Parti/ularl' instru/tive is t0e rulin$ o. t0e Court in Metro Transit +r,ani$ation,
Inc. #. National Labor Relations Coission,
+3
4+35 10ere it 1as 1ritten:

Bhether or not a bonus forms part of $ages depends upon the
circumstances and conditions for its payment. If it is additional
compensation $hich the employer promised and agreed to give $ithout
any conditions imposed for its payment, such as success of business or
greater production or output, then it is part of the $age. 3ut if it is paid
only if profits are realiFed or if a certain level of productivity is achieved, it
cannot be considered part of the $age. Bhere it is not payable to all but
+)4+)5 !hilippine National Construction Corp. #. National Labor Relations Coission, :93
P0il. :)9, ::+ F+778G.
+:4+:5 Tra*er-s Ro)al 'an. #. National Labor Relations Coission, 6.R. !o. ((+?(, Au$ust
:*, +77*, +(7 SCRA )89, )88.
+9[14] !hilippine National Construction Corp. #. National Labor Relations Coission, :??
P0il. ?8( F+777GE !hilippine Duplicators, Inc. #. National Labor Relations Coission, :++ P0il.
9*8, 9+7 F+773G.
+34+35 :+3 P0il. (?*, (8+ F+773G.
only to some employees and only $hen their labor becomes more efficient
or more productive, it is only an inducement for efficiency, a priFe
therefore, not a part of the $age.


=0e /onseBuential Buestion t0at needs to &e settled, t0ere.ore, is 10et0er t0e
su&@e/t &onuses are demanda&le or not. Stated di..erentl', /an t0ese &onuses &e
/onsidered part o. t0e 1a$e, salar' or /ompensation ma2in$ t0em en.or/ea&le
o&li$ationsH

=0e Court &elieves so.

n t0e /ase at &en/0, it is indu&ita&le t0at E=P and E=E> a$reed on t0e
in/lusion o. a provision .or t0e $rant o. +9
t0
, +3
t0
and +?
t0
mont0 &onuses in t0e
+77(-)**+ CBA Side A$reement,
+?
4+?5 as 1ell as in t0e )**+-)**9 CBA Side
A$reement,
+8
4+85 10i/0 1as si$ned on Septem&er :, )**+. =0e provision, 10i/0
1as similarl' 1orded, states:

Employment-:elated 3onuses
The 2ompany confirms that the %4
th
, %.
th
and %/
th
month bonuses (other
than the %,
th
month pay) are granted.

+?4+?5 Rollo, pp. 3?*-3?9.
+84+85 d. at )9*-)93.
A readin$ o. t0e a&ove provision reveals t0at t0e same provides .or t0e
$ivin$ o. +9
t0
, +3
t0
and +?
t0
mont0 &onuses (ithout /ualification. =0e 1ordin$ o.
t0e provision does not allo1 an' ot0er interpretation. =0ere 1ere no /onditions
spe/i.ied in t0e CBA Side A$reements .or t0e $rant o. t0e &ene.its /ontrar' to t0e
/laim o. E=P t0at t0e same is @usti.ied onl' 10en t0ere are pro.its earned &' t0e
/ompan'. =erse and /lear, t0e said provision does not state t0at t0e su&@e/t &onuses
s0all &e made to depend on t0e E=PAs .inan/ial standin$ or t0at t0eir pa'ment 1as
/ontin$ent upon t0e reali<ation o. pro.its. !eit0er does it state t0at i. t0e /ompan'
derives no pro.its, no &onuses are to &e $iven to t0e emplo'ees. n .ine, t0e
pa'ment o. t0ese &onuses 1as not related to t0e pro.ita&ilit' o. &usiness
operations.

=0e re/ords are also &ere.t o. an' s0o1in$ t0at t0e E=P made it /lear
&e.ore or durin$ t0e e,e/ution o. t0e Side A$reements t0at t0e &onuses s0all &e
su&@e/t to an' /ondition. ndeed, i. E=P and E=E> intended t0at t0e su&@e/t
&onuses 1ould &e dependent on t0e /ompan' earnin$s, su/0 intention s0ould 0ave
&een e,pressl' de/lared in t0e Side A$reements or t0e &onus provision s0ould 0ave
&een deleted alto$et0er. n t0e a&sen/e o. an' proo. t0at E=PAs /onsent 1as
vitiated &' .raud, mista2e or duress, it is presumed t0at it entered into t0e Side
A$reements voluntaril', t0at it 0ad .ull 2no1led$e o. t0e /ontents t0ereo. and t0at
it 1as a1are o. its /ommitment under t0e /ontra/t. Veril', &' virtue o. its
in/orporation in t0e CBA Side A$reements, t0e $rant o. +9
t0
, +3
t0
and +?
t0
mont0
&onuses 0as &e/ome more t0an @ust an a/t o. $enerosit' on t0e part o. E=P &ut a
/ontra/tual o&li$ation it 0as underta2en. Moreover, t0e /ontinuous /on.erment o.
&onuses &' E=P to t0e union mem&ers .rom +77( to )**) &' virtue o. t0e Side
A$reements evidentl' ne$ates its ar$ument t0at t0e $ivin$ o. t0e su&@e/t &onuses is
a mana$ement prero$ative.

%rom t0e .ore$oin$, E=P /annot insist on &usiness losses as a &asis .or
disre$ardin$ its underta2in$. t is mani.estl' /lear t0at alt0ou$0 it in/urred
&usiness losses o. +97,*?(,*?:.** in t0e 'ear )***, it /ontinued to distri&ute +9
t0
,
+3
t0
and +?
t0
mont0 &onuses .or said 'ear. !ot1it0standin$ su/0 0u$e losses, E=P
entered into t0e )**+-)**9 CBA Side A$reement on Septem&er :, )**+ 10ere&' it
/ontra/ted to $rant t0e su&@e/t &onuses to E=E> in no un/ertain terms. E=P
/ontinued to sustain losses .or t0e su//eedin$ 'ears o. )**+ and )**) in t0e
amounts o. :9(,8(:,*+:.** and :+3,989,999.**, respe/tivel'. Still and all, t0is
did not deter it .rom 0onorin$ t0e &onus provision in t0e Side A$reement as it
/ontinued to $ive t0e su&@e/t &onuses to ea/0 o. t0e union mem&ers in )**+ and
)**) despite its alle$ed pre/arious .inan/ial /ondition. Parent0eti/all', it must &e
emp0asi<ed t0at E=P even a$reed to t0e pa'ment o. t0e +9
t0
, +3
t0
and +?
t0
mont0
&onuses .or )**: alt0ou$0 it opted to de.er t0e a/tual $rant in April )**9. All
$iven, &usiness losses /ould not &e /ited as $rounds .or E=P to repudiate its
o&li$ation under t0e )**+-)**9 CBA Side A$reement.

=0e Court .inds no merit in E=PAs /ontention t0at t0e &onus provision
/on.irms t0e $rant o. t0e su&@e/t &onuses onl' on a sin$le instan/e &e/ause i. t0is
is so, t0e parties s0ould 0ave in/luded su/0 limitation in t0e a$reement. !o10ere
in t0e Side A$reement does it sa' t0at t0e su&@e/t &onuses s0all &e /on.erred on/e
durin$ t0e 'ear t0e Side A$reement 1as si$ned. =0e Court Buotes 1it0 approval
t0e o&servation o. t0e CA in t0is re$ard:

ETPI argues that assuming the bonus provision in the *ide
+greement of the )%-)4 23+ entitles the union members to the
sub1ect bonuses, it is merely in the nature of a ;one-time= grant and not
intended to cover the entire term of the 23+. The contention is untenable.
The bonus provision in 8uestion is exactly the same as that contained in
the *ide +greement of the %@@<-)% 23+ and there is no denying that
from %@@< to )%, ETPI granted the sub1ect bonuses for each of those
years. Thus, ETPI may not no$ claim that the bonus provision in the *ide
+greement of the )%-)4 23+ is only a ;one-time= grant.
%<
'%<(

E=P t0en ar$ues t0at even i. it is /ontra/tuall' &ound to distri&ute t0e
su&@e/t &onuses to E=E> mem&ers under t0e Side A$reements, its /urrent .inan/ial
di..i/ulties s0ould 0ave released it .rom t0e o&li$ator' .or/e o. said /ontra/t
invo2in$ Arti/le +)?8 o. t0e Civil Code. Said provision de/lares:

+rticle %)/&. Bhen the service has become so difficult as to be
manifestly beyond the contemplation of the parties, the obligor may also
be released therefrom, in $hole or in part.



=0e Court is not persuaded.
+(4+(5 d. at +(.

=0e parties to t0e /ontra/t must &e presumed to 0ave assumed t0e ris2s o.
un.avora&le developments. t is, t0ere.ore, onl' in a&solutel' e,/eptional /0an$es
o. /ir/umstan/es t0at eBuit' demands assistan/e .or t0e de&tor.
+7
4+75 n t0e /ase at
&en/0, t0e Court determines t0at E=PAs /laimed depressed .inan/ial state 1ill not
release it .rom t0e &indin$ e..e/t o. t0e )**+-)**9 CBA Side A$reement.

E=P appears to &e 1ell a1are o. its deterioratin$ .inan/ial /ondition 10en
it entered into t0e )**+-)**9 CBA Side A$reement 1it0 E=E> and o&li$ed itsel.
to pa' &onuses to t0e mem&ers o. E=E>. Considerin$ t0at E=P 0ad &een
/ontinuousl' su..erin$ 0u$e losses .rom )*** to )**), its &usiness losses in t0e
'ear )**: 1ere not e,a/tl' un.oreseen or une,pe/ted. ConseBuentl', it /annot &e
said t0at t0e di..i/ult' in /ompl'in$ 1it0 its o&li$ation under t0e Side A$reement
1as ;mani.estl' &e'ond t0e /ontemplation o. t0e parties.C Besides, as 0eld in
Central 'an. of the !hilippines #. Court of Appeals,
)*
4)*5 mere pe/uniar' ina&ilit'
to .ul.ill an en$a$ement does not dis/0ar$e a /ontra/tual o&li$ation. Contra/ts,
on/e per.e/ted, are &indin$ &et1een t0e /ontra/tin$ parties. O&li$ations arisin$
t0ere.rom 0ave t0e .or/e o. la1 and s0ould &e /omplied 1it0 in $ood .ait0. E=P
/annot rene$e .rom t0e o&li$ation it 0as .reel' assumed 10en it si$ned t0e )**+-
)**9 CBA Side A$reement.

+74+75 0o #. 1oo* 1est Lan*, Inc., 6.R. !o. +(:?)(, April 8, )*+*, ?+8 SCRA 39+, 33*.
)*4)*5 )): P0il. )??, )89 F+7(3G.
6rantin$ ar,uen*o t0at t0e CBA Side A$reement does not /ontra/tuall' &ind
petitioner E=P to $ive t0e su&@e/t &onuses, nevert0eless, t0e Court .inds t0at its
a/t o. $rantin$ t0e same 0as &e/ome an esta&lis0ed /ompan' pra/ti/e su/0 t0at it
0as virtuall' &e/ome part o. t0e emplo'eesA salar' or 1a$e. A &onus ma' &e
$ranted on eBuita&le /onsideration 10en t0e $ivin$ o. su/0 &onus 0as &een t0e
/ompan'As lon$ and re$ular pra/ti/e. n !hilippine Appliance Corporation #. Court
of Appeals,
)+
4)+5 it 1as pronoun/ed:

To be considered a ;regular practice,= ho$ever, the giving of the
bonus should have been done over a long period of time, and must be
sho$n to have been consistent and deliberate. The test or rationale of this
rule on long practice re8uires an indubitable sho$ing that the employer
agreed to continue giving the benefits #no$ing fully $ell that said
employees are not covered by the la$ re8uiring payment thereof.

=0e re/ords s0o1 t0at E=P, aside .rom /ompl'in$ 1it0 t0e re$ular +:t0
mont0 &onus, 0as &een .urt0er $ivin$ its emplo'ees +9
t0
mont0 &onus ever' April
as 1ell as +3
t0
and +?
t0
mont0 &onuses ever' "e/em&er o. t0e 'ear, 1it0out .ail,
.rom +783 to )**) or .or )8 'ears 10et0er it earned pro.its or not. =0e
/onsidera&le len$t0 o. time E=P 0as &een $ivin$ t0e spe/ial $rants to its
emplo'ees indi/ates a unilateral and voluntar' a/t on its part to /ontinue $ivin$
said &ene.its 2no1in$ t0at su/0 a/t 1as not reBuired &' la1. A//ordin$l', a
/ompan' pra/ti/e in .avor o. t0e emplo'ees 0as &een esta&lis0ed and t0e pa'ments
made &' E=P pursuant t0ereto ripened into &ene.its en@o'ed &' t0e emplo'ees.

)+4)+5 6.R. !o. +979:9, June :, )**9, 9:* SCRA 3)3, 3:).
=0e $ivin$ o. t0e su&@e/t &onuses /annot &e peremptoril' 1it0dra1n &'
E=P 1it0out violatin$ Arti/le +** o. t0e La&or Code:

+rt. %. Prohibition against elimination or diminution of benefits.
G 5othing in this 3oo# shall be construed to eliminate or in any $ay
diminish supplements, or other employee benefits being en1oyed at the
time of promulgation of this 2ode.

=0e rule is settled t0at an' &ene.it and supplement &ein$ en@o'ed &' t0e
emplo'ees /annot &e redu/ed, diminis0ed, dis/ontinued or eliminated &' t0e
emplo'er. =0e prin/iple o. non-diminution o. &ene.its is .ounded on t0e
/onstitutional mandate to prote/t t0e ri$0ts o. 1or2ers and to promote t0eir 1el.are
and to a..ord la&or .ull prote/tion.
))
4))5

nterestin$l', E=P never presented /ountervailin$ eviden/e to re.ute
E=E>As /laim t0at t0e /ompan' 0as &een /ontinuousl' pa'in$ &onuses sin/e +783
up to )**) re$ardless o. its .inan/ial state. ts .ailure to /ontrovert t0e alle$ation,
10en it 0ad t0e opportunit' and resour/es to do so, 1or2s in .avor o. E=E>. =ime
and a$ain, it 0as &een 0eld t0at s0ould dou&ts e,ist &et1een t0e eviden/e presented
&' t0e emplo'er and t0e emplo'ee, t0e s/ales o. @usti/e must &e tilted in .avor o.
t0e latter.
):
4):5
))4))5 Arco Metal !ro*ucts Co., Inc. #. 0aahan N, M,a Man,,a,a(a 0a Arco Metal2NA1L%,
6.R. !o. +8*8:9, Ma' +9, )**(, 339 SCRA ++*, ++(.
):4):5 3u2iro #. A*orable, 6.R. !o. +?*73),9(* P0il. 378, ?*3 F)**9G.

)HERE'ORE, t0e petition is DENIED. =0e June )3, )**( "e/ision o.
t0e Court o. Appeals and its "e/em&er +), )**( Resolution are A''IRMED.

SO ORDERED.




,OSE CATRAL MENDO2A
Asso/iate Justi/e










DE CO!C>R:





PRES-ITERO , VELASCO, ,R
Asso/iate Justi/e
C0airperson





LUCAS P -ERSAMIN RO-ERTO A A-AD
Asso/iate Justi/e Asso/iate Justi/e




ESTELA M PERLAS1-ERNA-E
Asso/iate Justi/e

A T T E S T A T I O N

attest t0at t0e /on/lusions in t0e a&ove "e/ision 0ad &een rea/0ed in
/onsultation &e.ore t0e /ase 1as assi$ned to t0e 1riter o. t0e opinion o. t0e CourtAs
"ivision.




PRES-ITERO , VELASCO, ,R
Asso/iate Justi/e
C0airperson, =0ird "ivision

C E R T I ' I C A T I O N

Pursuant to Se/tion +:, Arti/le V o. t0e Constitution and t0e "ivision
C0airpersonAs Attestation, /erti.' t0at t0e /on/lusions in t0e a&ove "e/ision 0ad
&een rea/0ed in /onsultation &e.ore t0e /ase 1as assi$ned to t0e 1riter o. t0e
opinion o. t0e CourtAs "ivision.



RENATO C CORONA
C0ie. Justi/e