G.R. No. 152928 ; June 18, 2009
METROPOLITAN BANK AND TRUST COMPANY, Petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, FELIPE A. PATAG and BIENVENIDO C. FLORA, Respondents.

FACTS

Respondents Felipe Patag and Bienvenido Flora were former officers of Metrobank who availed of the bank’s compulsory retirement plan in early 1998. They received their retirement benefits computed at 185% of their gross monthly salary per year of service, as per the existing 1995 Officers’ Benefits Memorandum. At the time, CBA negotiations for rank-and-file employees for 1998-2000 were ongoing. Both respondents wrote to Metrobank requesting that their benefits be recomputed should a new, higher rate be granted to officers following the CBA’s conclusion, a practice the bank had consistently observed since 1986.
Upon the CBA’s approval, Metrobank issued a new Officers’ Benefits Memorandum on June 10, 1998, increasing the retirement benefit to 200% effective January 1, 1998. However, it imposed a new condition limiting eligibility to officers still employed as of June 15, 1998. As Patag and Flora had retired before this date, Metrobank denied their claim for the increased benefits. They subsequently filed a complaint for underpayment of retirement benefits.

ISSUE

Whether respondents are entitled to the increased retirement benefits under the 1998 Officers’ Benefits Memorandum despite having retired before the specified eligibility date of June 15, 1998.

RULING

Yes. The Supreme Court affirmed the rulings of the NLRC and the Court of Appeals, holding that the respondents were entitled to the improved benefits. The legal logic rests on the principle that a voluntary company practice, once established, cannot be unilaterally withdrawn or diminished by the employer to the detriment of the employees who have come to rely upon it. The Court found that since 1986, it had been Metrobank’s consistent practice to issue a memorandum granting officers benefits similar or superior to those in the new rank-and-file CBA, with retroactive effect to January 1 of the CBA’s first year, and without any condition requiring continued employment on a later cutoff date.
This practice had ripened into a company policy that formed part of the respondents’ compensation package. Metrobank could not peremptorily insert a new restrictive condition in the 1998 Memorandum to exclude those who had already retired, as this would violate the vested rights of employees who acted in reliance on the established pattern of company conduct. The timing of the new condition, imposed shortly after respondents made their inquiries, was viewed with suspicion. Applying the rule that doubts in labor jurisprudence should be resolved in favor of labor, the Court upheld the grant of the additional benefits to Patag and Flora.