G.R. No. 200010 - Home Credit Mutual Building and Loan Association vs. Prudente

In 1997, Home Credit Mutual Building and Loan Association provided its employee, Rollette Prudente, her first service vehicle.
Subsequently, Rollette purchased the first vehicle from Home Credit at its depreciated value.
In 2003, upon Rollette’s request for a second service vehicle, Home Credit granted the vehicle but required her to pay for additional equity exceeding a maximum limit of ₱660,000.00.
In 2008, Rollette again purchased the vehicle at its depreciated value, reinforcing the pattern of employee participation in the cost.
In 2009, when Rollette applied for a third service vehicle, Home Credit informed her that she must shoulder 40% of the acquisition price as part of a revised cost sharing scheme, with the equity portion set above ₱550,000.00.

Aggrieved by the new cost sharing scheme, Rollette filed a complaint with the Labor Arbiter alleging violation of Article 100 of the Labor Code regarding the non-diminution of employee benefits.
On October 30, 2009, the Labor Arbiter dismissed her complaint, opining that while the transportation facility had evolved into a company practice, the specific details—such as the allocation of cost sharing—fell under management prerogative and could vary without constituting a diminution.
The National Labor Relations Commission (NLRC) affirmed the Labor Arbiter’s decision on August 5, 2010, emphasizing there was no grave abuse of discretion or serious error in resolving the issues raised.

Dissatisfied with the decisions of the Labor Arbiter and the NLRC, Rollette elevated the case to the Court of Appeals (CA) via a petition for certiorari.
On August 31, 2011, the CA reversed the labor tribunals’ findings, ruling that the service vehicle provided at full company cost was an integral part of Rollette’s hiring package and that Home Credit could not unilaterally reduce this benefit.
The CA held that the car plan, previously a full-cost benefit, had evolved into a company practice, rendering any reduction through cost sharing as a diminution of her benefits.

Rollette then elevated the issue to the Supreme Court through a Petition for Review on Certiorari under Rule 45 of the Rules of Court, challenging the CA’s decision.
Home Credit sought a reconsideration of the CA ruling but was denied, leading to the present recourse.
Central to the dispute was whether an employer may alter established practices by adopting a cost sharing scheme that reduces the employee’s benefit.

Whether Home Credit’s adoption of a cost sharing scheme for the service vehicle constituted a diminution or reduction of an employee benefit.

Is the revised scheme, requiring Rollette to shoulder 40% of the vehicle’s cost, in violation of the rule against diminution of benefits under Article 100 of the Labor Code?
Does the benefit of a service vehicle, once granted, create a vested right that cannot be unilaterally modified by the employer?

Whether the practice of providing service vehicles had ripened into a legally enforceable company practice.

Must a benefit be based on an express policy or written contract, or can a benefit that has been consistently and deliberately granted over time be considered binding?
Did Home Credit’s previous practices regarding the service vehicle sufficiently establish a company practice that precludes any reduction in benefit through cost sharing?

The proper balance between protecting the rights of the employee and preserving the management’s prerogative over business affairs.

To what extent can an employer exercise its discretion to modify employee benefits without violating constitutional or statutory protections?
Does the absence of an express provision in the employment contract regarding full company cost for the service vehicle affect the enforceability of such a benefit?