Philippine Journalists, Inc. vs. De Guzman

The grant of optional retirement benefits to employees excluded from CBA coverage can ripen into a voluntary and enforceable company practice if done consistently and deliberately over a considerable period, and such practice cannot be unilaterally withdrawn.

The respondents, Erika Marie R. De Guzman (Ad Taker/Executive Security to the Chairman) and Edna Quirante (HR Supervisor), applied for optional retirement under their company's Collective Bargaining Agreement (CBA). The petitioner, Philippine Journalists, Inc. (PJI), denied their applications, arguing that as managerial employees listed in Annex A of the CBA, they were excluded from its coverage and thus not entitled to the benefit. The respondents filed a complaint for unfair labor practice and money claims.

• Filed in the Labor Arbiter (LA).
• LA dismissed the complaint (April 29, 2010).
• Appealed to the National Labor Relations Commission (NLRC).
• NLRC reversed the LA, ruling in favor of the respondents (December 29, 2011).
• Petitioners elevated the case to the Court of Appeals (CA) via a Petition for Certiorari.
• CA denied the petition and affirmed the NLRC (November 7, 2012; Resolution denying MR on July 4, 2013).
• Elevated to the Supreme Court via a Petition for Review on Certiorari.

• Respondents De Guzman and Quirante were PJI employees for 14 and almost 20 years, respectively.
• Their positions (Ad Taker/Executive Security and HR Supervisor) were listed in Annex A of the CBA as managerial/confidential, excluding them from the bargaining unit.
• The CBA (Article XIV, Section 3) allowed a "regular employee" with five years of service to optionally retire and receive benefits computed under an "approved Retirement Plan."
• Respondents applied for optional retirement, believing they were eligible based on past company actions.
• PJI denied their applications, claiming they were not covered by the CBA and that no approved optional retirement program existed at the time.
• Evidence showed PJI had previously granted optional retirement benefits to at least two other managerial employees (Nepthalie Hernandez in 2003 and Atty. Julie Interior-Madera in 2001).

• A clear distinction exists between compulsory retirement (a statutory right) and optional retirement (a benefit that requires management approval and an existing approved plan).
• The CBA explicitly excluded managerial employees from its coverage; thus, respondents were not entitled to the optional retirement benefit.
• Granting benefits to a few employees in the past was a mistake or isolated act of liberality, not a binding company practice.
• PJI was suffering financial losses at the relevant time, as evidenced by a 2005 Memorandum of Understanding with employees.

• The CBA's optional retirement provision was clear and did not require a separate "approved" plan beyond the CBA itself.
• Even if excluded from the CBA, the consistent grant of the benefit to other managerial employees established a company practice that could not be withdrawn.
• PJI's claim of financial losses was self-serving and contradicted by evidence of company spending (renovations, merit increases, executive bonuses).

• Procedural Issues: N/A.
• Substantive Issues:
  1. Whether respondents, as managerial employees excluded from the CBA, are entitled to optional retirement benefits.
  2. Whether the grant of optional retirement benefits to other managerial employees in the past constituted a company practice that PJI could not unilaterally withdraw.

• Procedural: N/A.
• Substantive:
  1. Yes. While respondents were technically excluded from the CBA's coverage, the SC found that PJI's actions had created an enforceable company practice.
  2. Yes. The SC affirmed the CA and NLRC. The grant of benefits to Hernandez and Madera was voluntary, deliberate, and done with sufficient regularity to constitute a company practice. This practice is protected by the non-diminution rule under Article 100 of the Labor Code. PJI's defense of financial losses was not credibly proven.

• Company Practice Doctrine — For a benefit to ripen into a company practice demandable as a matter of right, the employee must 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. There is no hard-and-fast rule on the length of time; the key is regularity and the employer's voluntary and deliberate intent. The SC applied this to find that granting optional retirement to two managerial employees over a span of two years (2001 and 2003) was sufficient.
• Non-Diminution of Benefits (Article 100, Labor Code) — Supplements or other employee benefits being enjoyed at the time of the Labor Code's promulgation cannot be eliminated or diminished. The SC held that the company practice of granting optional retirement benefits was a benefit that could not be unilaterally withdrawn.

• "To be considered as a regular company practice, the employee must 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. Jurisprudence has not laid down any hard-and-fast rule as to the length of time that company practice should have been exercised in order to constitute voluntary employer practice."
• "The grant of optional retirement benefits by PJI, even if it is not obliged under the CBA, already constitutes voluntary employer practice which cannot be unilaterally withdrawn or diminished by the employer without violating the spirit and intendment of Article 100 of the Labor Code."

• Philippine Appliance Corporation v. Court of Appeals — Cited for the test that a "regular practice" must be shown to have been consistent and deliberate over a long period.
• Metropolitan Bank and Trust Company v. NLRC — Cited to support that no hard-and-fast rule exists on the length of time for a practice to be considered voluntary, and to illustrate examples (e.g., 6 years, 3 years, 2 years).
• Pag-asa Steel Works v. CA — Cited for the principle that a benefit given by reason of liberality, not strict legal obligation, can ripen into a company practice.
• Philippine Journalists, Inc. v. National Labor Relations Commission (532 Phil. 531) — Cited to contradict PJI's claim of financial losses, as that case found PJI's retrenchment program illegal and noted the company's continued spending on renovations and executive perks.

• Article 100, Labor Code (Prohibition against elimination or diminution of benefits) — The core provision invoked to prevent the withdrawal of the established company practice.
• Article 287 (now 302), Labor Code (Retirement) — Referenced to distinguish between compulsory retirement (a statutory right) and optional retirement (a contractual benefit).
• CBA Provisions (Article XIV, Section 3; Article I, Section 1 and Annex A) — The specific contractual terms at issue, which defined the optional retirement benefit and the exclusion of managerial employees.