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METROPOLITAN BANK v. NLRC

FACTS:

Respondents Felipe Patag and Bienvenido Flora were former employees of petitioner Metropolitan Bank and Trust Company (Metrobank), who availed of the bank's compulsory retirement plan in accordance with the 1995 Officers' Benefits Memorandum. They received their respective retirement benefits computed at 185% of their gross monthly salary for every year of service. However, they requested Metrobank to compute their retirement benefits at the increased rate of 200% as provided in the newly concluded Collective Bargaining Agreement (CBA) between the bank and its rank and file employees. Metrobank did not reply to their request. Metrobank subsequently issued a Memorandum on Officers' Benefits, which increased the compulsory retirement benefit for officers to 200%, effective January 1, 1998, but with the condition that the benefits shall only be extended to those who remain in service as of June 15, 1998. Patag and Flora, who had already ceased their employment with Metrobank, demanded the payment of their unpaid retirement benefits based on the increased rate. When Metrobank refused, Patag and Flora filed a complaint for underpayment of retirement benefits. The Labor Arbiter dismissed their complaint, but the NLRC partially granted their appeal and directed Metrobank to pay them the unpaid beneficial improvements. Metrobank appealed to the CA, which affirmed the NLRC's decision. Metrobank then filed a petition for review on certiorari with the Supreme Court.

ISSUES:

  1. Whether there was an established company practice of granting improved benefits to Metrobank's officers.

  2. Whether the company practice of granting improved benefits to Metrobank's officers amounted to a voluntary employer practice that cannot be unilaterally withdrawn.

  3. Whether the retirees who retired prior to the issuance of the 1998 Officers' Benefits Memorandum are entitled to the higher retirement benefits.

  4. Whether the bank had a company practice of granting improved benefits to retired officers prior to the issuance of the 1998 memorandum.

  5. The issue in this case is whether or not the Court of Appeals (CA) correctly affirmed the decision of the lower court.

RULING:

  1. The NLRC and the CA correctly recognized that there was indeed an established company practice of granting improved benefits to Metrobank's officers. This finding is supported by substantial evidence, including the existence of separate memoranda issued by Metrobank granting benefits to its officers and the retroactive effectivity of these benefits every January 1 of the year of issuance.

  2. The voluntary employer practice of granting improved benefits to Metrobank's officers, which lasted for about eleven years, cannot be unilaterally withdrawn by the employer. This is in accordance with Article 100 of the Labor Code, which prohibits the elimination or diminution of benefits enjoyed by employees at the time of the promulgation of the Code.

  3. Yes, the retirees who retired prior to the issuance of the 1998 Officers' Benefits Memorandum are entitled to the higher retirement benefits. The Supreme Court held that where there is an established employer practice of regularly, knowingly and voluntarily granting benefits to employees over a significant period of time, despite the lack of a legal or contractual obligation on the part of the employer to do so, the grant of such benefits ripens into a vested right of the employees and can no longer be unilaterally reduced or withdrawn by the employer.

  4. No, the bank did not present convincing evidence to prove that there was no company practice of granting improved benefits to retired officers prior to the issuance of the 1998 memorandum. Therefore, the Supreme Court upheld the Court of Appeals' ruling that the bank failed to substantiate its claims.

  5. The petition for review is denied and the decision and resolution of the CA are affirmed.

PRINCIPLES:

  • To be considered a company practice, the giving of benefits should be done over a long period of time and must be consistent and deliberate.

  • The test for establishing a long practice is an indubitable showing that the employer agreed to continue giving the benefits, knowing that the employees are not covered by the law requiring payment thereof.

  • A company practice may ripen into a voluntary employer practice that cannot be unilaterally withdrawn by the employer.

  • The regularity and deliberateness of the grant of benefits over a significant period of time are factors considered in determining whether a company practice has ripened into a voluntary employer practice.

  • Article 100 of the Labor Code prohibits the elimination or diminution of benefits being enjoyed by employees at the time of the promulgation of the Code.

  • Where there is an established employer practice of regularly, knowingly and voluntarily granting benefits to employees over a significant period of time, despite the lack of a legal or contractual obligation, the grant of such benefits ripens into a vested right of the employees and cannot be unilaterally reduced or withdrawn by the employer.

  • Written, express quitclaims, releases, and waivers in labor cases may be invalidated under certain circumstances. Such quitclaims, waivers, or releases are generally looked upon with disfavor and are commonly frowned upon as contrary to public policy and ineffective to bar claims for the measure of a worker's legal rights.

  • The right to file a labor complaint or assert a cause of action against an employer is a personal right of each employee and is not dependent on whether or not other employees similarly situated would also file a case against the employer.

  • In controversies between a laborer and his master, doubts reasonably arising from the evidence or in the interpretation of agreements and writings should be resolved in the former's favor. This is in line with the policy of extending the applicability of labor benefits to a greater number of employees and giving maximum aid and protection to labor.

  • The principle of maximum aid and protection to labor

  • The principle of affirming the findings of the lower court or CA