GR L 5577; (July, 1954) (Digest)
G.R. No. L-5577; July 31, 1954
H. E. HEACOCK CO., petitioner-appellant, vs. NATIONAL LABOR UNION, ET AL., respondents-appellees.
FACTS
The National Labor Union filed a petition in the Court of Industrial Relations against H. E. Heacock Co., praying for an order directing the Company to pay all its low-salaried employees a bonus equivalent to one month’s salary for the years 1948 and 1949. The Union alleged that on April 17, 1948, when distributing a similar bonus for 1947, the Company promised to grant this benefit yearly provided sufficient profits were made. The Company realized profits in 1948 and 1949 and paid bonuses to its high-salaried executives but not to low-salaried employees. After the Company refused the Union’s demand and declined to submit the matter to the labor-management committee as per their collective bargaining agreement, the employees staged a strike on June 19, 1950. The Company contended the 1947 bonus was an act of grace, denied any binding obligation to pay an annual bonus, and claimed the strike was illegal, causing damages.
ISSUE
Whether the Company is obligated to pay its low-salaried employees a bonus equivalent to one month’s salary for the years 1948 and 1949.
RULING
Yes, the Court of Industrial Relations’ decision ordering the Company to pay the bonus is affirmed. The lower court found, based on evidence including a “Heacock Supplement” published in newspapers on August 22-23, 1948, which stated the employees enjoyed a profit-sharing privilege with bonuses depending on yearly profits, and on testimony regarding a promise made by the Company’s President on April 17, 1948, that the Company had committed to paying an annual bonus contingent on profits. The Supreme Court upheld these factual findings as conclusive. Furthermore, on equitable grounds, following the precedent in Philippine Education Company, Inc. vs. Court of Industrial Relations, a bonus may be granted even if not legally demandable. The payment of the 1947 bonus created an expectation among employees, and the Company’s payment of bonuses to executives but not to low-salaried employees in profitable years warranted equitable relief. The Court rejected the Company’s argument about lack of consideration, stating extra concessions are premised on improving working conditions in return for efficient service and loyalty.