Labor Law (2013). Question No.

III
(Prohibition Against Elimination or Diminution of Benefits)
Inter-Garments Co. manufactures garments
for export and requires its employees
to render overtime work ranging from two
to three hours a day to meet its clients' deadlines.
Since 2009, it has been paying its employees
on overtime an additional 35% of their
hourly rate for work rendered in excess
of their regular eight working hours.
Due to the slowdown of its export
business in 2012, Inter-Garments had to
reduce its overtime work; at the same time,
it adjusted the overtime rates so that those
who worked overtime were only paid an additional 25%
instead of the previous 35%. To replace the workers'
overtime rate loss, the company granted a one-time
5% across-the-board wage increase.
Vigilant Union, the rank-and-file bargaining agent,
charged the company with Unfair Labor Practice on
the ground that (1) no consultations had been made
on who would render overtime work; and (2) the
unilateral overtime pay rate reduction is a violation
of Article 100 (entitled Prohibition Against Elimination
or Diminution of Benefits) of the Labor Code.
Is the union position meritorious? (8%)
My answer:
No as to (1). It's a management prerogative on
on who among its employees should render
overtime work.
It depends No (2).
In this particular case, the employer has been paying
more than that required by Art. 87, it can only be
claimed as violating Artical 100 (Prohibition Against
Elimination of Diminution of Benefits) if the following
criteria are met in order to prove that such benefit
has ripened into company practice:
1. The act of the employer has been done
for a considerable period of time.
(Thus far, jurisprudence has not laid down anyext or
definitive rule requiring a specific minimum number
of years.)
2. The act should be done consistently
and intentionally.
3. The act should not be a product of
erroneous interpretation or construction of
a doubtful or difficult question of law
or provision in the CBA.
Referenced Laws/Legal Principles:
"Principle of non-elimination or
non-diminution of benefits as applied
to wages":
This principle mandates that the reduction or diminution
of withrawal by employers of any benefits, supplements
or payments as provided in existing laws, individual
agreements or collective bargaining agreements between works
and employers or voluntary employer practice or policy,
is not allowed.
Labor Code
Art. 87. Overtime work. Work may be performed beyond
eight (8) hours a day provided that the employee is
paid for the overtime work, an additional compensation
equivalent to his regular wage plus at least twenty-five
percent (25%) thereof. Work performed beyond eight hours
on a holiday or rest day shall be paid an additional
compensation equivalent to the rate of the first eight
hours on a holiday or rest day plus at least thirty percent
(30%) thereof.