G.R. No. L-79488 September 30, 1988
REPUBLIC PLANTERS BANK, petitioner, vs. THE FIRST DIVISION, NATIONAL LABOR RELATIONS COMMISSION, (former) HON. LABOR ARBITER ERNILO PENALOSA, and MACARIO DE GUZMAN, respondents.

FACTS

Private respondent Macario de Guzman was an employee of petitioner Republic Planters Bank since 1957, rising to the position of branch manager. In 1971, the bank entered into a Collective Bargaining Agreement (CBA) with the Republic Planters Bank Supervisors Union, which included a provision (Section 14) granting specific retirement, resignation, or separation benefits to regular supervisor employees. This CBA was renewed in 1973 for a term ending in 1976. The issuance of the 1974 Labor Code, which rendered managerial employees ineligible to join labor organizations, precluded the execution of a new CBA for such employees after 1976. Despite the CBA’s expiration, the bank continued to apply its benefit provisions to resigning or retiring managerial employees, as evidenced by payments made to others like Simplicio Manalo and Miguel Calimbas after 1976.
On June 3, 1985, de Guzman resigned. The bank computed his gratuity pay and the cash value of his unused leave credits based on the 1982-1985 CBA it had with its rank-and-file employees, paying him a gratuity of P140,501.00 and the cash equivalent of only 180 days of leave. De Guzman filed a complaint, contending his benefits should have been computed under the more favorable terms of the expired 1971-1973 CBA, consistent with the bank’s past practice for similarly situated managerial employees.

ISSUE

Whether the National Labor Relations Commission committed grave abuse of discretion in ruling that the benefits due to private respondent upon his resignation should be governed by the provisions of the expired 1971-1973 Collective Bargaining Agreement.

RULING

The Supreme Court ruled that the NLRC did not commit grave abuse of discretion and affirmed its decision. The legal logic is anchored on established employer policy as a source of enforceable labor standards. Under Section 14(a), Rule 1 of the Rules Implementing Book VI of the Labor Code, retirement benefits can be determined by an “established employer policy.” The bank’s consistent practice of applying the 1971-1973 CBA benefits to resigning or retiring managerial employees after the agreement’s formal expiration—as proven in the cases of Manalo and Calimbas—crystallized into a binding company policy. This practice created a vested right for de Guzman to receive benefits under the same terms.
The Court rejected the bank’s argument that the active 1982-1985 CBA with rank-and-file employees should govern. As a managerial employee, de Guzman was expressly excluded by law from the coverage of that rank-and-file CBA and was not a party to it; therefore, he could not be bound by its terms. His acceptance of other benefits, like mid-year and Christmas bonuses, did not estop his claim, as such payments were made pursuant to general company practice, not the rank-and-file CBA. The Court also dismissed procedural objections regarding the non-production of the original CBA document, noting the bank admitted its existence and emphasizing that technicalities are not favored in labor proceedings. Consequently, de Guzman was entitled to the differential benefits computed under the expired 1973 CBA, as per the bank’s established policy.