Non Diminution Of Benefit 282f1h

Non-diminution of benefits

Non-diminution of benefits Employee Wages and Benefits 2010-06-01 Concept The principle of non-diminution of benefits states that: “any benefit and supplement being enjoyed by employees cannot be reduced, diminished, discontinued or eliminated by the employer.”[1] This principle is founded on the Constitutional mandate to “protect the rights of workers and promote their welfare,” and “to afford labor full protection.” Said mandate in turn 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.”[2] Benefit and supplement definition Employee benefits are compensations given to employees in addition to regular salaries or wages.[3] Some benefits are legally required, e.g., social security benefits, medicare, retirement benefits, maternity benefits, service incentive leave, etc. Other benefits are offered by the employer as an incentive to attract and retain employees as well as increase employee morale and improve job performance.[4] Supplements include those benefits or privileges granted to an employee for the convenience of the employer, e.g., board and lodging within the company premises. Common application In employment setting, the principle of non-diminution of benefits finds application when a change initiated by the employer to existing company policies, specially matters concerning employee benefits, results in reduction, diminution or withdrawal of some or all of the the benefits already enjoyed by the employees. For example, if the employees of a certain company is traditionally granted 14th month pay, and the employer subsequently withdrew such benefit, or reduced its amount, the reduction or withdrawal is objectionable on the ground that it would result to diminution of benefits. Requirements The application of the principle presupposes that a company practice, policy and tradition favorable to the employees has been clearly established; and that the payments made by the company pursuant to it have ripened into benefits enjoyed by them.[5] To ripen into benefits, the following requisites must concur: 1. It should have been practiced over a long period of time; and

Non-diminution of benefits 2. It must be shown to have been consistent and deliberate.[6] With regard to the length of time the company practice should have been exercised to constitute voluntary employer practice which cannot be unilaterally withdrawn by the employer, the Court has not laid down any rule requiring a specific minimum number of years.[7] 1. In the case of Davao Fruits Corporation vs Associated Labor Unions (G.R. No. 85073, August 24, 1993), the company practice lasted for six years. 2. In Davao Integrated Port Stevedoring Services vs. Abarquez (G.R. No. 102132, March 19, 1993), the employer, for three years and nine months, approved the commutation to cash of the unenjoyed portion of the sick leave with pay benefits of its Intermittent workers. 3. In Tiangco vs Leogardo, Jr. (G.R. No. L-57636, May 16, 1983), the employer carried on the practice of giving a fixed monthly emergency allowance from November 1976 to February 1980, or three years and four months. 4. In the case of Sevilla Trading Company vs Semana, ibid., the employer kept the practice of including non-basic benefits such as paid leaves for unused sick leave and vacation in the computation of their 13th-month pay for at least two (2) years. In all these cases, the grant of benefits has been held to have ripened into company practice or policy which cannot be peremptorily withdrawn. Footnote 1. “Arco Metal Products vs. Salvador Uy, G.R. No. 170734, May 14, 2008,” http://sc.judiciary.gov.ph/jurisprudence/2008/may2008/170734.htm. 2. Ibid. 3. “benefit: Definition, Synonyms from Answers.com,” http://www.answers.com/topic/benefit. 4. See Ibid. 5. See “MERALCO vs Quisumbing, G.R. No. 127598, January 27, 1999,” http://sc.judiciary.gov.ph/jurisprudence/1999/jan99/127598.htm. 6. See “Sevilla Trading Co vs Semana, G.R. No. 152456, April 28, 2004,” http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/152456.htm. 7. See Ibid.

Non-diminution of benefits Bibliography 1. “Arco Metal Products vs. Salvador Uy, G.R. No. 170734, May 14, 2008,” http://sc.judiciary.gov.ph/jurisprudence/2008/may2008/170734.htm. 2. “benefit: Definition, Synonyms from Answers.com,” http://www.answers.com/topic/benefit. 3. “MERALCO vs Quisumbing, G.R. No. 127598, January 27, 1999,” http://sc.judiciary.gov.ph/jurisprudence/1999/jan99/127598.htm. 4. “Sevilla Trading Co vs Semana, G.R. No. 152456, April 28, 2004,” http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/152456.htm. Last Edited: Friday, August 19, 2011