Case Summary (G.R. No. 129459)
Antecedents of the Case
The case originated from the employment relationship between Prudente and Home Credit. In 1997, Prudente received her first service vehicle, followed by a second in 2003, with the understanding that she would purchase these vehicles at depreciated prices. By 2009, upon her request for a third vehicle, Home Credit introduced a cost-sharing scheme that required Prudente to pay 40% of the acquisition cost, which prompted her to file a complaint alleging a violation of Article 100 of the Labor Code concerning the non-diminution of benefits. The Labor Arbiter dismissed her complaint, stating that the cost-sharing arrangement did not constitute a reduction of benefit, a position subsequently upheld by the National Labor Relations Commission (NLRC).
Procedural History
Prudente then raised the matter to the Court of Appeals (CA), which reversed the lower tribunals’ decisions, asserting that the car plan constituted a company practice that could not be diminished unilaterally by the employer. The CA determined that this benefit was integral to Prudente's hiring package, concluding that the conditions for entitlement were met.
Ruling of the Supreme Court
The Supreme Court reinstated the NLRC's ruling, concluding that the CA had erred in its interpretation of the non-diminution principle. The court emphasized that while employees may have vested rights in benefits provided, those benefits must arise from established practices, express contracts, or explicit policies. In this case, evidence did not sufficiently demonstrate that the car plan was part of Prudente's hiring package or that it had ripened into a legal entitlement.
Analysis of the Non-Diminution Principle
The Supreme Court outlined the principle of non-diminution of benefits dictates that benefits voluntarily provided by an employer cannot be reduced without just cause. This principle is rooted in the need to protect workers' rights, a mandate supported by the Constitution. However, the court clarified that not all benefits automatically fall under this rule unless there is clear evidence of a consistent, deliberate company practice.
Findings on Employer's Prerogative
The court affirmed the employer's right to exercise management prerogatives, including modifying benefit arrangements. In this case, the adjustments to the car plan and the initiation of a cost-sharing scheme were within Home Credit's right
...continue readingCase Syllabus (G.R. No. 129459)
Core Issue
- The primary focus of the case is to determine whether Home Credit Mutual Building and Loan Association violated the non-diminution of benefits rule by implementing a cost-sharing scheme in its service vehicle plan for employees.
- This case is a Petition for Review on Certiorari under Rule 45, challenging the Court of Appeals' (CA) decision that overturned the National Labor Relations Commission's (NLRC) ruling.
Antecedents
- In 1997, the employer, Home Credit Mutual Building and Loan Association, provided Rollette Prudente with her first service vehicle.
- Rollette subsequently purchased this vehicle at its depreciated value.
- In 2003, Home Credit granted her a second service vehicle, requiring her to pay additional equity beyond a maximum limit of P660,000.
- By 2008, she again purchased a vehicle at depreciated value.
- In 2009, upon applying for a third service vehicle, Home Credit introduced a new requirement for Rollette to pay 40% of the acquisition price, along with setting a new maximum equity limit of P550,000.
- Rollette filed a complaint against Home Credit for violating Article 100 of the Labor Code concerning non-diminution of benefits, leading to an investigation by the Labor Arbiter (LA).
Labor Arbiter and NLRC Findings
- The Labor Arbiter dismissed Rollette's complaint on October 30, 2