PRODUCERS BANK vs.

NLRC

Petitioner was placed by the Central Bank under a conservator for the purpose of protecting
itsassets. It appears that when the private respondents sought the implementation of the
CBA regarding the retirement plan and to uniform allowance.
The acting conservator of the petitioner expressed her objection to such plan and suggests
the reduction of the mid-year and Christmas bonuses of the employees, resulting in a
deadlock between the petitioner bank and the private respondent union.
Private respondent argues that the mid-year and Christmas bonuses, by reason of their
having been given for thirteen consecutive years, have ripened into a vested right and, as
such, can no longer be unilaterally withdrawn by petitioner

ISSUE: WON the employer can be forced to award bonuses even if they cant due to its depressed
conditions.

RULING: An employer cannot be forced to distribute bonuses which it can no longer afford to pay. It
is an act of generosity and is a management prerogative; it is not a demandable and enforceable
obligation, except when it is made part of the wage, salary or compensation of the employee.

Ultimately, it is to the employees advantage that the conservatorship achieve its purposes
otherwise, the closure of the company would result in the employees losing their jobs.