AMERICAN WIRE AND CABLE DAILY RATED EMPLOYEES UNION vs. AMERICAN WIREAND CABLE CO., INC.

, CA
G.R. No. 155059 (2D)April 29, 2005

FACTS:
American Wire and Cable Co., Inc., is engaged in the manufacture of wires and cables. There are two unions in this company, the American
Wire and Cable Monthly-Rated Employees Union and the American Wire and Cable Daily-Rated Employees.
An original action was filed before the NCMB of DOLE by the two unions for voluntary arbitration. The P AWACDREU submits that the
withdrawal of the R AWACCI of the 35% premium pay for selected days during the Holy Week and Christmas season, the holding of the
Christmas Party and its incidental benefits, and the giving of service awards, which they have long enjoyed, violated Art 100 of Labor
Code: "Art 100. PROHIBITION AGAINST ELIMINATION OR DIMINUTION OF BENEFITS. - Nothing in the Book shall be construed
to eliminate or in any way diminish supplements, or other employee benefits being enjoyed at the time of promulgation of this Code."

Benefit and/or Entitlement Petitioner Unions Arguments Respondent Companys Arguments

1. 35% Premium pay of an employee's
basic pay for the work rendered during
Holy Monday, Tuesday, Wednesday;
December 23, 26, 27, 28, 29
Must not be based on profit; Customary
practice since time immemorial and cannot be
unilaterally withdrawn by Company; (besides
Company's submitted financial statement is
not audited by an independent auditor);
Grant of disputed benefits has not ripened into
practice that the employees can claim a
demandable right over them; these are
dependent upon the financial performance of
the company; recent political turmoil and
instability led the company to not do as well
as it did before;

Jurisprudence says that independently audited

financial statements is the normal method but
doesn't confine it to be the only method.
2. Christmas Party -same- -same-
3. Service Award -same-; Employee's length of service is the -same-
bases, not whether the company made a profit
4. Promotional 15 members were given new job These people were not promoted. There was
Increase (for 15 members of Union) classifications, a promotional increase in their only a realignment of positions.
salaries was in order

Voluntary Arbitrator: ruled in favor of the R corp.

CA: affirmed and upheld the Arbitrators decision.

ISSUE: WON R is guilty of violating Article 100 of the Labor Code, as amended, when the benefits/entitlements given to the members of
petitioner union were withdrawn.

RULING:
Court answered the issue in this wise
1. Are the entitlements bonuses?
a. Yes. A bonus is an amount granted and paid to an employee for his industry and loyalty, which contributed to the success of the business and
made possible the realization of profits. It is an act of generosity, a management prerogative.

b. It is obvious that the disputed benefits/entitlements are ABOVE what is strictly due to members of the union and the granting of the same was
a management prerogative and an act of generosity.
The granting of a bonus is a management prerogative,something given in addition to what is ordinarily received by or strictly due the
recipient. Thus, a bonus is not a demandable and enforceable obligation, except when it is made part of the wage, salary or compensation of the
employee.

2. If so, are they demandable or enforceable obligations on the part of Respondent Company?
a. No. Bonuses are not demandable except when
(1) it must have been promised by the employer AND expressly agreed upon by the parties; or
(2) it must have had a fixed amount and had been a long and regular practice on the part of the employer.

b. No promise and express agreement since the disputed benefits/entitlements were never incorporated in the Collective Bargaining Agreement.

c. No regular practice since there was no fixed amount and the records show that there has been a downtrend in the amounts given. Christmas
parties were also experiencing a downtrend in such a way that from the usual paid venues, they were now held in free-of-charge facilities. To be
considered a "regular practice," the giving of the bonus should have been done over a long period of time, and must be shown to have been
consistent and deliberate. Downtrend demonstrated that there is nothing consistent about it.

3. So now that they are bonuses that are neither enforceable nor demandable, there is no need to answer whether financial statements should be
audited by independent auditors.

With respect to the promotion of 15 members, there was no proof adduced by the Union, their claim must therefore fail.

DISPOSTION:
CA decision affirmed