G.R. No. 215504 - Societe Internationale De Telecommunications Aeronautiques vs. Huliganga

This case involves a petition for review on certiorari filed under Rule 45 by petitioners—Societe Internationale de Telecommunications Aeronautiques (SITA), SITA Information Networking Computing B.V. (SITA, Inc.), Equant Services, Inc., and Lee Chee Wee—seeking to reverse and set aside lower court decisions awarding respondent Theodore L. Huliganga a deficiency in his retirement benefit.
The petition challenges the Court of Appeals’ ruling which directed SITA to pay Huliganga Php2,645,175.87 representing the shortfall in his retirement benefits computed at 1.5 months of basic pay per year of service.

Huliganga began his career with SITA on April 16, 1980 as Technical Assistant to the Representative-Manager.
He eventually rose to the position of Country Operating Officer—the highest accountable managerial officer in the Philippines.
At the time of his retirement on December 31, 2008, his retirement benefits were computed based on the practice of 1.5 months of basic pay for each year of service, amounting to about Php7,495,102.84.

On January 27, 2009, Huliganga filed a complaint against SITA, SITA, Inc., and EQUANT alleging multiple labor law violations, including:

The applicable coefficient or payment factor should have been 2 months per year (as provided by the 2005–2010 Collective Bargaining Agreement or CBA) instead of the 1.5 months that was applied.
The enhanced benefit rate was already a well-established company practice, implemented through amendments to the Employee Regulations Manual.
Although SITA, Inc. and EQUANT were involved in his management duties, the benefits paid to him did not reflect the additional responsibilities performed for those entities.

Huliganga had already received the full amount of his retirement and other monetary benefits from SITA.
No employer-employee relationship existed between Huliganga, SITA, Inc., and EQUANT that would justify any additional claims.
Consequently, there was no basis for claims of moral and exemplary damages or attorney’s fees.

On September 29, 2009, the Labor Arbiter dismissed Huliganga’s complaint against SITA for lack of merit and also dismissed the claims against SITA, Inc. and EQUANT due to the absence of an employer-employee relationship.
On July 21, 2010, the NLRC, Third Division affirmed the Labor Arbiter’s decision, effectively denying Huliganga’s appeal for additional benefits.
The Court of Appeals, in its decision dated March 21, 2014, partially granted Huliganga’s petition by ordering SITA to pay the deficiency in his retirement benefit, basing its ruling on:

The contention that the 2006 CBA provided a retirement benefit coefficient of 2 months per year for employees with 25 years or more of service.
The assertion that the new or additional economic benefits emerging from the CBA had matured into a de facto company practice.

Huliganga, in his further submissions, contended that a company practice existed that extended these benefits to managerial employees; however, petitioners maintained that managerial employees are excluded from the benefits applicable under the CBA.

The key factual dispute revolved around whether there existed an established, consistent, and deliberate company practice of extending CBA benefits (that would adjust the benefit computation from 1.5 to 2 months per year) to managerial employees like Huliganga.
Huliganga presented testimony, including the affidavit of Delia M. Beaniza, to prove that such a practice existed.
The Labor Arbiter and NLRC found the evidence insufficient—particularly questioning the competency and relevance of Beaniza’s testimony—and held that there was no established company practice covering managerial employees.

Petitioners argued that the CA’s decision had no legal or factual basis because:

Retirement benefits for managerial employees are separate and distinct from those of rank-and-file employees.
The CA’s conclusion that managerial employees were entitled to the same retirement benefits as rank-and-file employees was unsupported by the evidence.
The CA erred in modifying the uniform factual findings of the Labor Arbiter and NLRC.

Additionally, petitioners maintained that the 2006 CBA expressly excluded managerial employees from its coverage and its benefits should not be extended to Huliganga.

Whether the Court of Appeals erred in ruling that a managerial employee, such as Huliganga, is entitled to the enhanced retirement benefit (2 months per year of service) as provided under the 2006 CBA.

Does the evidence sufficiently establish that the benefits mandated by the CBA had ripened into an established company practice applicable to managerial employees?
Is there a valid basis for Huliganga’s claims against SITA, Inc. and EQUANT concerning additional salaries and monetary benefits, notwithstanding his receipt of full retirement benefits from SITA?
Whether the factual findings of the Labor Arbiter and the NLRC, which denied the existence of such established company practice, should be overruled by the Court of Appeals.