GR 149434; (June, 2004) (Digest)
G.R. No. 149434 ; June 3, 2004
PHILIPPINE APPLIANCE CORPORATION (PHILACOR), petitioner, vs. THE COURT OF APPEALS, THE HONORABLE SECRETARY OF LABOR BIENVENIDO E. LAGUESMA and UNITED PHILACOR WORKERS UNION-NAFLU, respondents.
FACTS
Petitioner Philippine Appliance Corporation (PHILACOR) and respondent United Philacor Workers Union-NAFLU entered into collective bargaining negotiations. During the 1997 CBA negotiations, PHILACOR unilaterally offered and subsequently gave a P4,000 “early conclusion bonus” as an incentive to expedite the process. When the subsequent CBA expired, new negotiations began but reached a deadlock on four items, including a signing bonus. The union declared a strike. The Secretary of Labor assumed jurisdiction and ordered the workers to return. In his order resolving the dispute, the Secretary awarded, among other benefits, a P3,000 signing bonus, noting it was granted in the previous CBA.
PHILACOR filed a partial motion for reconsideration, contesting the signing bonus award. It argued a signing bonus is a mere incentive, not a demandable benefit, and since no CBA was concluded through mutual efforts, its purpose was not served. The Secretary denied the motion, and the Court of Appeals affirmed, ruling that PHILACOR could not dispute its own offer which remained outstanding.
ISSUE
Whether the Secretary of Labor and the Court of Appeals erred in awarding the signing bonus to the employees.
RULING
The Supreme Court reversed the lower courts and disallowed the signing bonus. The legal logic is anchored on the nature of a signing bonus and the doctrine of established practice. A signing bonus is essentially an incentive or premium for the peaceful and successful conclusion of negotiations through mutual effort. Citing the precedent in Caltex v. Brillantes, the Court held that where a CBA is ultimately forged not through mutual agreement but via compulsory arbitration by the Secretary of Labor, the rationale for a signing bonus ceases. The bonus is not a demandable obligation arising from law or contract.
Furthermore, for a bonus to be considered a demandable benefit based on long practice, it must be shown to have been given consistently, deliberately, and over a significant period. The record showed PHILACOR offered such a bonus only once during the prior 1997 negotiations. A single instance does not constitute a regular or established practice that creates an enforceable right. Therefore, the award by the Secretary of Labor, affirmed by the Court of Appeals, had no legal or equitable basis. The grant was set aside.