G.R. No. 254021 - Philippine Bank of Communications vs. Philippine Bank of Communications Employees Association

In the 1980s, petitioner (Philippine Bank of Communications) implemented a multi-purpose loan program granting qualified employees the benefit of availing several loans concurrently provided that the overall debt servicing did not exceed 35% of the employee's net pay.
The program allowed the pledging or utilization of mid-year and year-end bonuses for loan amortizations even when the monthly salary could otherwise accommodate the loan.
In 2003, the original loan policy and its benefits were incorporated into the parties’ collective bargaining agreement (CBA).
In 2007, when a new management took over, a new loan policy was crafted whereby the granting of loans via pledges or bonus deductions became discretionary; this change was strongly opposed by the employees’ union, prompting the suspension of the new policy.
In 2014, with another change in management, the multi-purpose loan program was redefined. Under the revised policy, employees were precluded from using mid-year and year-end bonuses as pledges for additional loans if their take-home pay was sufficient to accommodate the amortization.
Respondent (the Philippine Bank of Communications Employees Association) again objected, but unlike the previous management which deferred implementation pending dispute resolution, the new management unilaterally enforced the revised loan program.

The petitioner maintained a longstanding service award policy, effective January 1, 1998, which recognized employee loyalty and integrity through awards given on the bank’s anniversary (September 4 each year).
The policy provided that employees who completed 10 years of service—and every subsequent five-year interval—would be eligible for the service award. This benefit extended to employees who retired under the bank’s mandatory retirement policy and even to those who resigned, as long as they met the required service period.
On September 18, 2015, under new management, petitioner modified the service award policy by introducing an additional eligibility requirement that an employee must be “on board” as of the release date (or the bank’s anniversary) to qualify for the award.
As a result, at least three employees (John Conrad Clavio, Ronald Buenavista, and Marcus Brian Belo) were deprived of the benefit since they were no longer “on board” at the time of the awarding.

Discontent over the changes in both the multi-purpose loan program and the service award policy led the respondent to seek the recall of these policies.
The matter was ultimately brought to voluntary arbitration.
In the Decision of the Office of the Voluntary Arbitrator (OVA) dated April 20, 2018, the OVA ruled in favor of the respondent by declaring:

The change in the multi-purpose loan program constituted a violation of the CBA.
The service award should be granted upon completion of the requisite service years, irrespective of the employee’s status as “on board” on the anniversary.

Petitioner, disagreeing with the OVA’s ruling, filed a Petition for Review with the Court of Appeals (CA), challenging the OVA decision and the subsequent denial of its motion for reconsideration.
On October 18, 2019, the CA rendered a decision partly granting petitioner’s petition by modifying the OVA Decision:

The amendment regarding the use of bonus pledges/deductions for loan payments was declared valid.
However, the CA sustained the declaration that the “on board” requirement for the service award was void.

Petitioner subsequently raised its grievances before the Supreme Court through a Petition for Review under Rule 45 of the Rules of Court, contending that its management prerogative permitted the unilateral amendment of the service award policy.

It did not breach the CBA by imposing the “on board” requirement for the service award, asserting that this measure fell within its management prerogative.
The amended service award policy did not violate the non-diminution of benefits principle, and employees who had resigned had no vested right to the award since they were no longer connected with the bank.

The unilateral modification—specifically, the imposition of the “on board” requirement—violated the CBA since the original service award policy was incorporated therein without such a condition.
The service award, having been duly incorporated in the CBA, had become a vested right for employees who met the qualifying service period, regardless of their employment status at the time of the award’s release.

Whether the Court of Appeals committed a reversible error in ruling that petitioner violated the CBA by requiring an employee to be “on board” as of the release date of the service award.
Whether retired or resigned employees, despite no longer being connected with petitioner, acquired a vested right over the service award.