Case Digest (G.R. No. 204142)
Facts:
Honda Cars Philippines, Inc. v. Honda Cars Technical Specialist and Supervisors Union, G.R. No. 204142, November 19, 2014, the Supreme Court Second Division, Brion, J., writing for the Court.On December 8, 2006, Honda Cars Philippines, Inc. (the company) and the Honda Cars Technical Specialists and Supervisory Union (the union), the exclusive collective bargaining representative of the company’s supervisors and technical specialists, executed a Collective Bargaining Agreement (CBA) effective April 1, 2006 to March 31, 2011. Prior to April 1, 2005, union members received a monthly transportation allowance of P3,300; by a Memorandum of Agreement dated September 3, 2005 the parties converted that allowance into a monthly gasoline allowance starting at 125 liters effective April 1, 2005, to cover gasoline for official business and home–office travel.
The company applied to the gasoline allowance the same internal policy that applied to managers and assistant vice‑presidents: unused gasoline may be converted into cash, and such cash conversion was treated by the company as part of compensation and subject to withholding tax; thus the company deducted withholding tax from union members’ pay when unused gasoline was converted to cash. The union disputed the company’s tax treatment, contending the gasoline allowance was a negotiated fringe benefit under Article XV, Section 15 of the CBA and should not be treated as taxable compensation income.
The parties submitted the grievance to the CBA grievance procedure and, unresolved there, to a Panel of Voluntary Arbitrators. On February 6, 2009 the Panel rendered an award holding that the cash conversion of the unused gasoline allowance was a fringe benefit subject to the fringe benefit tax and not to income tax, and directed refund treatment; the Panel denied the company’s motion for partial reconsideration on June 3, 2009. The company filed a Rule 43 petition to the Court of Appeals (CA).
The CA Eight Division denied the petition and, with modification, affirmed the Panel’s view that the cash conversion was a fringe benefit under the CBA but held it was not subject to the fringe benefit tax because the gasoline allowance was granted for the employer’s convenience and advantage (invoking Section 33(A) of the NIRC and its exceptions). The company filed a Rule 45 petition for review on certiorari to the Court, renewing its contention that the cash conversion was taxable compensation as a matter of law and, alternatively, that any refund remedy lies exclusively against the Bureau of Internal Revenue (BIR) and not the employer...(Pro-only)
Issues:
- Did the Panel of Voluntary Arbitrators have jurisdiction to decide the taxability of the cash conversion of the gasoline allowance?
- Does the union have a cause of action against the company to recover amounts withheld and remit...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
- (Pro-only)
Doctrine:
- (Pro-only)