Case Summary (G.R. No. 102009-10)
Factual Background
- For several years prior to July 2005, certain daily-paid employees sometimes worked on Saturdays, typically for maintenance-related tasks; not all daily-paid employees were required to report each Saturday, and the number who did depended on operational necessities.
- CCBPI notified the union that starting 2 July 2005 it would not schedule Saturday work routinely, asserting the exercise of management’s option based on operational necessity and to reduce operating expenses. The union filed grievances; the parties submitted to voluntary arbitration.
Issues Presented on Review
- (1) Whether the CBA mandated that CCBPI schedule Saturday work for employees such that management could be compelled to provide Saturday work.
- (2) Whether the prior scheduling of Saturday work had ripened into a company practice or a protected benefit whose unilateral removal by management constituted a prohibited diminution of benefits under Article 100 of the Labor Code.
Positions of the Parties
- CCBPI: Contended the CBA unambiguously granted management the option to schedule Saturday work based on operational necessity; the option necessarily includes the prerogative not to schedule work. Saturday work was akin to overtime/extra work for which premium pay was compensation, not a freely conferred benefit, and thus its withdrawal did not violate the non-diminution rule. Payment for Saturday work should follow the principle “a fair day’s wage for a fair day’s work” — no work, no pay.
- Respondent union: Argued the CBA’s provision describing the normal work week to include one Saturday of four hours rendered Saturday work mandatory; alternatively, the longstanding practice of providing Saturday work had ripened into a company practice and thus its removal unlawfully diminished employee benefits and deprived members of income.
Court of Appeals’ Reasoning (as reviewed)
- The CA construed the CBA’s work-week provision literally, reading the inclusion of a four-hour Saturday in the “normal work week” as a mandatory entitlement. It interpreted management’s “option to schedule” Saturdays as limited to determining the time within the day when work would be performed, not to eliminate Saturday work altogether. On that view, the CA concluded CCBPI must allow four hours of work on Saturdays and compensate employees for Saturdays not worked since 2 July 2005 at the full daily rate plus the premium.
Supreme Court’s Interpretation of the CBA: Option to Schedule = Management Prerogative
- The Supreme Court reversed the CA’s interpretation. It emphasized established rules of contract interpretation: clear, unambiguous contractual language controls; stipulations must be read together; specific terms used in one provision and different terms in another must be respected.
- The Court distinguished the use of the general word “work” (Article 11’s “option to schedule work on Saturdays”) from the specific phrase “working hours” used in Article 10, Section 2 to refer to changes in hours. Had the parties intended to limit the management option to adjusting hours only, they would have used “working hours.” The plain meaning of “option to schedule work on Saturdays on the basis of operational necessity” permits management to decide whether to schedule Saturday work at all.
- The Court also noted that the presence of premium pay for Saturday work logically supports the conclusion that Saturday work is not a guaranteed part of the regular workweek: premium compensation is paid to incentivize or compensate employees for additional, non-regular duties performed when required by management.
Supreme Court’s Analysis on Company Practice and Diminution of Benefits
- The Court rejected the CA’s conclusion that the intermittent provision of Saturday work had ripened into a protected company practice or benefit under Article 100 (non-diminution) of the Labor Code. Two principal reasons informed this conclusion: (1) the “benefit” at issue is the premium pay (monetary), not the mere grant of work; jurisprudence defines “benefits” in Article 100 as monetary privileges or those convertible into monetary equivalents; and (2) the premium pay was expressly conditional on employees actually rendering Saturday work — a condition (operational necessity) was attached to the grant.
- The Court applied the established doctrine that when a benefit is granted subject to a condition and the condition prevails (i.e., no operational necessity), the non-diminution rule does not apply. Because the CBA made Saturday work and the attendant premium conditional on management’s determination of operational necessity, management’s discontinuance of scheduled Saturdays did not amount to an unlawful diminution of a vested, unconditional benefit.
Distinction From Overtime and Application of Labor Code Provisions
- The Court clarified that the Saturday work at issue was not “overtime” in the technical sense under the Labor Code (Article 87), which concerns work beyond eight hours within a worker’s 24-hour workday. Saturday work was represented in the CBA as a separate, short (four-hour) premium day within the defined workweek scheme. Accordingly, authorities and precedents treating overtime as non-benefit (because it is compensation for extra work) did not alter the Court’s analysis that the scheduling or non-scheduling of Saturday work rested on management prerogative as negotiated.
- Article 83 (normal hours of work not to exceed eight hours a day) and the pr
Case Syllabus (G.R. No. 102009-10)
Case Citation and Forum
- Supreme Court decision reported at 844 Phil. 696, Second Division, G.R. No. 195297, dated December 05, 2018, penned by A. Reyes, Jr., J.
- Petition for Review on Certiorari under Rule 45 of the Rules of Court from: (a) Court of Appeals Decision dated June 23, 2010 and Resolution dated October 19, 2010 (which reversed NCMB); and (b) National Conciliation and Mediation Board (NCMB), Regional Branch No. 6, Iloilo City Decision dated September 7, 2006, in Case No. PAC-613-RB6-02-01-06-2006.
Parties and Representation
- Petitioner: Coca-Cola Bottlers Philippines, Inc. (CCBPI), domestic corporation operating a manufacturing plant in Ungka, Pavia, Iloilo City.
- Respondent: Iloilo Coca-Cola Plant Employees Labor Union (ICCPELU), represented by Wilfredo L. Aguirre.
- Nature of employees involved: regular route drivers and helpers, daily-paid workers at the Iloilo plant.
Procedural History
- Grievance filed with CCBPI after company stopped scheduling Saturday work beginning July 2, 2005.
- Parties submitted dispute for voluntary arbitration before a Panel of three voluntary arbitrators pursuant to their CBA; Panel rendered Decision (Sept. 7, 2006) ruling for CCBPI on two issues (no pay for unworked Saturdays; CCBPI cannot be compelled to provide Saturday work).
- Panel denied Respondent’s Motion for Reconsideration (Oct. 24, 2006).
- Respondent appealed to the Court of Appeals via Petition for Review under Rule 43; CA granted petition and reversed Panel in Decision dated June 23, 2010, and denied CCBPI’s Motion for Reconsideration (Resolution dated Oct. 19, 2010).
- CCBPI filed Petition for Review on Certiorari to the Supreme Court under Rule 45, with extension motions, a Comment from respondent, and a Reply from petitioner.
Antecedent Facts (Factual Background)
- CCBPI’s Iloilo plant employed daily-paid route drivers and helpers represented by ICCPELU.
- The CBA between CCBPI and employees contains provisions concerning hours of work and premium pay, including:
- Article 10, Section 1: “For daily paid workers the normal work week shall consist of five (5) consecutive days (Monday to Friday) of eight (8) hours each and one (1) day (Saturday) of four (4) hours. Provided, however, that any worker required to work on Saturday must complete the scheduled shift for the day and shall be entitled to the premium pay provided in Article IX hereof.”
- Article 10, Section 2: allows COMPANY to change prevailing working hours with notice (hours specified).
- Article 11, Section 1(b)/(c): “Saturdays. Saturday is a premium day but shall not be considered as a rest day or equivalent to a Sunday. It is further agreed that management has the option to schedule work on Saturdays on the basis of operational necessity.”
- Section 5 of Article 9 (Special Bonus): P280.00 special bonus when a regular employee goes out on his route on a Saturday, Sunday, or Legal Holiday under specified circumstances.
- Premium pay scheme for Saturdays: daily-paid worker required to work on a Saturday shall be paid basic hourly rate plus fifty percent (50%) for each hour worked not in excess of eight hours; seventy-five percent (75%) for excess.
- CCBPI informed the union that beginning July 2, 2005, Saturday work would no longer be scheduled, citing operational necessity and the desire to save on operating expenses and offset anticipated decreased revenues.
- Despite union opposition at a July 1, 2005 meeting, CCBPI did not schedule work on July 2, 2005; thereafter some Saturdays (Sept–Dec 2005) were scheduled only as needed for maintenance-related activities.
- Union filed written grievance; CCBPI responded by reiterating management’s option to schedule Saturdays based on operational necessity; further letters exchanged; the dispute went to NCMB and to voluntary arbitration.
Issues Presented
- Whether the Court of Appeals erred in holding that, under the CBA, scheduling Saturday work for CCBPI’s employees is mandatory (i.e., that CCBPI cannot discontinue Saturday work).
- Whether the scheduling of Saturday work had ripened into a company practice such that its removal constituted a prohibited diminution of benefits under Article 100 of the Labor Code, entitling affected employees to compensation for Saturdays not scheduled.
Panel of Arbitrators’ Decision (NCMB)
- Two issues before Panel: (1) entitlement to basic pay on Saturdays when employees do not report for work under the CBA; and (2) whether CCBPI could be compelled to provide Saturday work under the CBA.
- Panel ruled for CCBPI:
- Employees are not entitled to basic pay for Saturdays if they do not report for work (citing Section 1 Article 10 and Sections 1(c) and 3(c) Article II of the CBA).
- CCBPI cannot be compelled to provide Saturday work under the CBA for lack of legal and factual basis.
- Motion for Reconsideration denied by the Panel (Oct. 24, 2006).
Court of Appeals Ruling (summary of outcome)
- CA reversed and set aside the Panel’s Decision and Order.
- CA ordered CCBPI to:
- Comply with the CBA provisions respecting its normal work week (Mon–Fri 8 hours; Saturday 4 hours).
- Allow concerned union members to render work for four (4) hours on Saturdays.
- Pay corresponding wage for the Saturdays not performed commencing July 2, 2005 until finality of CA decision — the rate for Saturday work being the whole daily rate plus corresponding premium (not merely one-half day).
- CA construed the clause granting management “option to schedule work on Saturdays on the basis of operational necessity” as an option limited to scheduling the time of mandated Saturday work within that day, not an option to eliminate Saturday work entirely.
Contentions and Arguments of the Parties to the Supreme Court
- CCBPI’s principal contentions:
- CA erred in finding that CBA gives employees the right to compel scheduling of Saturday work and that withdrawal of Saturday work constit