12.

VERGARA, JR., VS. COCA-COLA BOTTLERS PHILIPPINES, INC

G.R. No. 176985, April 1, 2013

Facts:
Petitioner Vergara, a retired District Sales Supervisor of respondent Coca-Cola
Bottlers Philippines, Inc., filed a complaint before the NLRC for the payment of his
Full Retirement Benefits, Merit Increase, Commission/Incentives, Length of Service,
Actual, Moral and Exemplary Damages, and Attorneys Fees. He claims that he is
entitled to an additional PhP474,600.00 as Sales Management Incentives (SMI) and
to the amount of PhP496,016.67 which respondent allegedly deducted illegally.
The Labor Arbiter rendered a Decision in favor of petitioner but upon appeal of
respondent, the NLRC modified the award and deleted the payment of SMI.
Petitioner appealed to the CA, but was dismissed by the latter.
Issue:
Whether or not the SMI should be included in the computation of petitioners
retirement benefits on the ground of consistent company practice.
Held:
No. The Court finds no substantial evidence to prove that the grant of SMI to
all retired DSSs regardless of whether or not they qualify to the same had ripened
into company practice. The petitioner utterly failed to adduce proof to establish his
allegation that SMI has been consistently, deliberately and voluntarily granted to all
retired DSSs without any qualification or conditions whatsoever.
There is diminution of benefits when the following requisites are present: (1)
the grant or benefit is founded on a policy or has ripened into a practice over a long
period of time; (2) the practice is consistent and deliberate; (3) the practice is not
due to error in the construction or application of a doubtful or difficult question of
law; and (4) the diminution or discontinuance is done unilaterally by the employer.
The only two pieces of evidence that he stubbornly presented throughout the
entirety of this case are the sworn statements of Hidalgo and Velasquez, former
DSSs of respondent who retired. They claimed that the SMI was included in their
retirement package even if they did not meet the sales and collection qualifiers.
However, the declarations of Hidalgo and Velazquez were sufficiently countered by
respondent with supporting evidence and sworn statements of other employees.
Contrary to petitioners claim, Hidalgo was in fact qualified for the SMI. As for
Velazquez, even if he did not qualify for the SMI, respondents General Manager in
its Calamba plant still granted his request, along with other numerous concessions,
to achieve industrial peace in the plant which was then experiencing labor relations
problems. Lastly, it was confirmed that petitioner failed to meet the trade receivable
qualifiers of the SMI. Respondent's isolated act of including the SMI in the retirement
package of Velazquez could hardly be classified as a company practice that may be
considered an enforceable obligation.

The principle against diminution of benefits 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. Certainly, a practice or custom is, as a
general rule, not a source of a legally demandable or enforceable right. Company
practice, just like any other fact, habits, customs, usage or patterns of conduct,
must be proven by the offering party who must allege and establish specific,
repetitive conduct that might constitute evidence of habit or company practice.

17. ALPS TRANSPORTATION AND/OR ALFREDO E. PEREZ, VS. ELPIDIO M. RODRIGUEZ

G.R. NO. 186732, JUNE 13, 2013

Facts:
During the course of his employment, Rodriguez, a bus conductor who was
assigned to work with petitioner bus company, ALPS Transportation, was found to
have committed irregularities on separate years. The latest irregularity stated that
he had collected bus fares without issuing corresponding tickets to passengers.
Rodriguez alleged that he was dismissed from his employment the day after
the issuance of the last irregularity report. However, he did not receive any written
notice of termination. He went back to the bus company a number of times, but it
refused to readmit him.
Rodriguez filed before the labor arbiter a complaint for illegal dismissal
against ALPS Transportation.
The labor arbiter dismissed the illegal dismissal complaint for lack of merit.
He explained that no evidence had been adduced to support the contention of
Rodriguez that the latter had been terminated.
The NLRC found that Rodriguez failed to prove that his services were illegally
terminated by petitioners, and that he was prevented from returning to work.
However, the bus company likewise failed to prove that he had abandoned his work.
Thus, citing previous rulings of this Court, the NLRC held that in case the parties fail
to prove either abandonment or termination, the employer should order the
employee to report back for work, accept the latter, and reinstate the employee to
the latters former position. However, an award for backwages is not warranted, as
the parties must bear the burden of their own loss.
Rodriguez filed a petition for certiorari with the CA.
The CA held that in termination cases, it is the employer who bears the
burden of proving that the employee was not illegally dismissed. The CA found that
ALPS Transportation failed to present convincing evidence that Rodriguez had
indeed collected bus fares without issuing corresponding tickets to passengers. The
appellate court held that the irregularity reports were mere allegations, the truth of
which had not been established by evidence. Moreover, the CA gave no credence to
ALPS Transportations argument that Rodriguez had not yet been terminated when
he filed the illegal dismissal complaint, as he had not yet received any notice of
termination. The appellate court explained that, before the illegal dismissal
complaint was filed, more than six months had lapsed since respondent was last
given a bus assignment by ALPS Transportation. Thus, the CA concluded that the

argument of the bus company was only an excuse to cover up the latters mistake
in terminating him without due process of law.
Issue:
Whether respondent Rodriguez was validly dismissed
Held:
The Court affirms the CAs decision and ruled that respondent Rodriguez has
been illegally dismissed.
The Labor Code provides that the burden of proving that the termination of
an employee was for a just or authorized cause lies with the employer. If the
employer fails to meet this burden, the conclusion would be that the dismissal was
unjustified and, therefore, illegal.
The nature of work of a bus conductor involves inherent or normal
occupational risks of incurring money shortages and uncollected fares. A
conductors job is to collect exact fares from the passengers and remit his
collections to the company. Evidence must, therefore, be substantial and not based
on mere surmises or conjectures for to allow an employer to terminate the
employment of a worker based on mere allegations places the latter in an uncertain
situation and at the sole mercy of the employer. An accusation that is not
substantiated will not ripen into a holding that there is just cause for dismissal. A
mere accusation of wrongdoing or a mere pronouncement of lack of confidence is
not sufficient cause for a valid dismissal of an employee. Thus, the failure of the
petitioners to convincingly show that the respondent misappropriated the bus fares
renders the dismissal to be without a valid cause. To add, jurisprudence dictates
that if doubt exists between the evidence presented by the employer and the
employee, the scales of justice must be tilted in favor of the latter.
An illegally dismissed employee is entitled to the twin remedies of
reinstatement and payment of full backwages. In Santos v. National Labor Relations
Commission, the Court explained:
The normal consequences of a finding that an employee has been illegally
dismissed are, firstly, that the employee becomes entitled to reinstatement
to his former position without loss of seniority rights and, secondly, the
payment of backwages corresponding to the period from his illegal dismissal
up to actual reinstatement. The statutory intent on this matter is clearly
discernible. Reinstatement restores the employee who was unjustly dismissed
to the position from which he was removed, that is, to his status quo ante
dismissal, while the grant of backwages allows the same employee to recover
from the employer that which he had lost by way of wages as a result of his
dismissal. These twin remedies reinstatement and payment of backwages
make the dismissed employee whole who can then look forward to
continued employment. Thus, do these two remedies give meaning and
substance to the constitutional right of labor to security of tenure.

18.

MITSUBISHI MOTORS PHILIPPINES SALARIED EMPLOYEES UNION

(MMPSEU) vs. MITSUBISHI MOTORS PHILIPPINES CORPORATION
G.R. No. 175773
June 17, 2013

Facts:
The Collective Bargaining Agreement (CBA) of the parties in this case
provides that the company shoulder the hospitalization expenses of the dependents
of covered employees subject to certain limitations and restrictions. Accordingly,
covered employees pay part of the hospitalization insurance premium through
monthly salary deduction while the company, upon hospitalization of the covered
employees' dependents, shall pay the hospitalization expenses incurred for the
same. The conflict arose when a portion of the hospitalization expenses of the
covered employees' dependents were paid/shouldered by the dependent's own
health insurance. While the company refused to pay the portion of the hospital
expenses already shouldered by the dependents' own health insurance, the union
insists that the covered employees are entitled to the whole and undiminished
amount of said hospital expenses.
MMPSEU alleged that there is nothing in the CBA which prohibits an employee
from obtaining other insurance or declares that medical expenses can be
reimbursed only upon presentation of original official receipts. It stressed that the
hospitalization benefits should be computed based on the formula indicated in the
CBA without deducting the benefits derived from other insurance providers.
Besides, if reduction is permitted, MMPC would be unjustly benefited from the
monthly premium contributed by the employees through salary deduction. MMPSEU
added that its members had legitimate claims under the CBA and that any doubt as
to any of its provisions should be resolved in favor of its members. Moreover, any
ambiguity should be resolved in favor of labor.
On the other hand, MMPC argued that the reimbursement of the entire
amounts being claimed by the covered employees, including those already paid by
other insurance companies, would constitute double indemnity or double insurance,
which is circumscribed under the Insurance Code. Moreover, a contract of insurance
is a contract of indemnity and the employees cannot be allowed to profit from their
dependents loss.

Voluntary Arbitrator rendered a Decision finding MMPC liable to pay or

reimburse the amount of hospitalization expenses already paid by other health
insurance companies. The Voluntary Arbitrator ruled that the CBA has no express
provision barring claims for hospitalization expenses already paid by other insurers.
Hence, the covered employees can recover from both.
MMPC filed a Petition for Review before the CA.
The CA found merit in MMPCs Petition. It ruled that despite the lack of a
provision which bars recovery in case of payment by other insurers, the wordings of
the subject provision of the CBA showed that the parties intended to make MMPC
liable only for expenses actually incurred by an employees qualified dependent. In
particular, the provision stipulates that payment should be made directly to the
hospital and that the claim should be supported by actual hospital and doctors bills.
These mean that the employees shall only be paid amounts not covered by other
health insurance and is more in keeping with the principle of indemnity in insurance
contracts. Besides, a contrary interpretation would "allow unscrupulous employees
to unduly profit from the x x x benefits" and shall "open the floodgates to
questionable claims."
Issue:
Whether the employer company is under obligation to reimburse employee if
the dependents hospital expenses had already been covered by another Health
Maintenance Organization (HMO) provider?
Held:
No. Mitsubishi Company is under no obligation to reimburse employee for
hospital expenses of dependents which had already been covered by another HMO.
The SC agrees with the ruling of the CA. The condition that payment should
be direct to the hospital and doctor implies that MMPC is only liable to pay medical
expenses actually shouldered by the employees dependents. It follows that MMPCs
liability is limited, that is, it does not include the amounts paid by other health
insurance providers. This condition is obviously intended to thwart not only
fraudulent claims but also double claims for the same loss of the dependents of
covered employees.
The CBA constitutes a contract between the parties and as such, it should be
strictly construed for the purpose of limiting the amount of the employers liability.
The terms of the subject provision are clear and provide no room for any other
interpretation. As there is no ambiguity, the terms must be taken in their plain,
ordinary and popular sense. Consequently, MMPSEU cannot rely on the rule that a
contract of insurance is to be liberally construed in favor of the insured. Neither can
it rely on the theory that any doubt must be resolved in favor of labor.