LEPANTO CERAMICS, INC., vs.
LEPANTO CERAMICS EMPLOYEES ASSOCIATION,
G.R. No. 180866, March 2, 2010
PEREZ, J.:
TOPIC
BONUS
FACTS
Lepanto Ceramics, Incorporated is a domestic corporation engaged in manufacturing, making, buy
and sell, on wholesale basis, among others, tiles, marbles, mosaics and other similar products.
Lepanto Ceramics Employees Association is a legitimate labor organization duly registered with the
Department of Labor and Employment. It is the sole and exclusive bargaining agent in the
establishment of petitioner.
In December 1998, petitioner gave a ₱3,000.00 bonus to its employees, members of the respondent
Association.
In September 1999, petitioner and respondent Association entered into a Collective Bargaining
Agreement (CBA) which provides for the grant of a Christmas gift package/bonus to the members of
the respondent Association. The Christmas bonus was one of the enumerated "existing benefit,
practice of traditional rights" which "shall remain in full force and effect."
In 1999, 2000 and 2001, the bonus was not in cash. Instead, petitioner gave each of the members of
respondent Association Tile Redemption Certificates equivalent to ₱3,000.00. In 2002, petitioner
gave a year-end cash benefit of Six Hundred Pesos (₱600.00) and offered a cash advance to
interested employees equivalent to one (1) month salary payable in one year. The respondent
Association objected to the ₱600.00 cash benefit and argued that this was in violation of the CBA it
executed with the petitioner.
VOLUNTARY ARBITRATOR RULING
Ruled in favor of private respondents.
It held that petitioner is bound to grant each of its workers a Christmas bonus of ₱3,000.00 for the
reason that the bonus was given prior to the effectivity of the CBA between the parties and that the
financial losses of the company is not a sufficient reason to exempt it from granting the same.
The CBA is a binding contract and constitutes the law between the parties.
Since the employees had already been given ₱600.00 cash bonus, the same should be deducted
from the claimed amount of ₱3,000.00, thus leaving a balance of ₱2,400.00.
CA RULING
The Court of Appeals affirmed in toto the decision of the Voluntary Arbitrator.
It held that the grant of said bonus to private respondent can be deemed a practice as the same has
not been given only in the 1999 CBA.
There were no conditions specified in the CBA for the grant of said benefit contrary to the claim of
petitioner that the same is justified only when there are profits earned by the company.
And that the giving of said bonus can no longer be withdrawn by the petitioner as this would amount
to a diminution of the employee’s existing benefits.
PETITIONERS ARGUMENT
Complaint for nonpayment of the 2002 Christmas bonus had no basis as the same was not a
demandable and enforceable obligation. It argued that the giving of extra compensation was based
on the company’s available resources for a given year and the workers are not entitled to a bonus if
the company does not make profits.
Petitioner argues that it was debt-ridden having incurred net losses for the years 2001 and 2002.
Petitioner further argued that the grant of a one (1) month salary cash advance was not meant to
take the place of a bonus but was meant to show the company’s sincere desire to help its employees
despite its precarious financial condition.
Petitioner also averred that the CBA provision on a "Christmas gift/bonus" refers to alternative
benefits.
RESPONDENTS’ ARGUMENT
It insisted that it has been the traditional practice of the company to grant its members Christmas
bonuses during the end of the calendar year, each in the amount of ₱3,000.00 as an expression of
gratitude to the employees for their participation in the company’s continued existence in the
market.
ISSUE
Whether or not the petitioner is obliged to give the members of the respondent Association a
Christmas bonus in the amount of ₱3,000.00 in 2002?
SC RULING
YES. THE COURT UPHELD THE RULING OF THE VOLUNTARY ARBITRATOR AND CA.
A "bonus" is a gratuity or act of liberality of the giver. It is something given in addition to what is
ordinarily received by or strictly due the recipient. A bonus is granted and paid to an employee for
his industry and loyalty which contributed to the success of the employer’s business and made
possible the realization of profits
Generally, a bonus is not a demandable and enforceable obligation. For a bonus to be enforceable, it
must have been promised by the employer and expressly agreed upon by the parties. 21 Given that
the bonus in this case is integrated in the CBA, the same partakes the nature of a demandable
obligation. Verily, by virtue of its incorporation in the CBA, the Christmas bonus due to respondent
Association has become more than just an act of generosity on the part of the petitioner but a
contractual obligation it has undertaken.
A reading of the provision of the CBA reveals that the same provides for the giving of a "Christmas
gift package/bonus" without qualification. Terse and clear, the said provision did not state that the
Christmas package shall be made to depend on the petitioner’s financial standing. The records are
also bereft of any showing that the petitioner made it clear during CBA negotiations that the bonus
was dependent on any condition. Indeed, if the petitioner and respondent Association intended that
the ₱3,000.00 bonus would be dependent on the company earnings, such intention should have
been expressed in the CBA.
Petitioner was very much aware of the imminence and possibility of its business losses, however this
did not deter it from honoring the CBA provision on Christmas bonus as it continued to give
₱3,000.00 each to the members of the respondent Association in the years 1999, 2000 and 2001.
Business losses are a feeble ground for petitioner to repudiate its obligation under the CBA.
