G.R. No. 200010, August 27, 2020
Home Credit Mutual Building and Loan Association and/or Ronnie B. Alcantara, Petitioners, vs. Ma. Rollette G. Prudente, Respondent.

FACTS

Respondent Ma. Rollette G. Prudente, an employee of petitioner Home Credit, was granted a service vehicle in 1997, which she later purchased at its depreciated value. In 2003, she was granted a second vehicle but was required to pay for the equity exceeding a company-set maximum limit of P660,000.00, which she complied with without protest. In 2009, when she applied for a third vehicle, Home Credit informed her of a new cost-sharing scheme requiring her to shoulder 40% of the acquisition cost. Prudente filed a complaint for diminution of benefits under Article 100 of the Labor Code, claiming the car plan at full company cost had ripened into a company practice.
The Labor Arbiter and the National Labor Relations Commission dismissed the complaint, ruling that while granting a transportation facility was a practice, the specific terms of its grant—including cost-sharing—were management prerogatives. The Court of Appeals reversed, holding that the car plan at full company cost was part of her hiring package and a vested benefit that could not be unilaterally diminished.

ISSUE

Whether the adoption of a 60%-40% cost-sharing scheme for the service vehicle constituted an illegal diminution of benefits.

RULING

The Supreme Court granted the petition, reversing the CA and reinstating the NLRC decision. The Court held there was no illegal diminution of benefits. The non-diminution rule under Article 100 of the Labor Code applies only when a benefit is based on an express policy, a written contract, or has ripened into a consistent and deliberate practice. For a practice to ripen into a benefit, it must be shown to have been given over a significant period with the employer’s voluntary and intentional consistency.
Here, the evidence failed to establish that a car plan at full company cost had become a consistent practice. The only instance of full company payment was for the first vehicle in 1997. For the second vehicle in 2003, Home Credit had already imposed a maximum limit, and Prudente willingly paid the excess equity without objection. This demonstrated variability in the terms, negating the consistency required for a practice to crystallize into a vested right. The new cost-sharing scheme was a valid exercise of management prerogative, absent proof that the previous terms were fixed and immutable. The employer’s right to conduct its business affairs includes modifying such schemes, provided no vested right is impaired.