UE v. UE Employees (G.R. No.179593; September 14, 2011)


Petitioner University of the East (UE) is an educational institution duly organized and existing under Philippine laws. On the other hand, respondent University of the East Employees' Association (UEEA)is a duly registered labor union of the rank-and-file employees of UE.

It appears from the records that prior to school year (SY) 1983-1984, the 70% incremental proceeds from tuition fee increases as mandated by Presidential Decree No. 451(P.D. No. 451), as amended, was distributed by UE in proportion to the average number of academic and non-academic personnel. The distribution scheme became the subject of an Agreement dated October 18, 1983 signed by the management, faculty association and respondent. Starting SY 1994-1995, however, the 70% incremental proceeds from the tuition fee increase was distributed by UE to its covered employees based on a new formula of percentage of salary.

Is the change in the scheme of distribution of the incremental proceeds from tuition fee increase a diminution of benefit?

HELD: Generally, employees have a vested right over existing benefits voluntarily granted to them by their employer, thus, said benefits cannot be reduced, diminished, discontinued or eliminated by the latter. This principle against diminution of benefits, however, is applicable only if the grant or benefit is founded on an express policy or has ripened into a practice over a long period of time which is consistent and deliberate.It does not contemplate the continuous grant of unauthorized or irregular compensation but it presupposes that a company practice, policy and tradition favourable to the employees has been clearly established; and that the payments made by the company pursuant to it have ripened into benefits enjoyed by them.The test or rationale of this rule on long practice requires an indubitable showing that the employer agreed to continue giving the benefits knowing fully well that said employees are not covered by the law requiring payment thereof. In sum, the benefit must be characterized by regularity, voluntary and deliberate intent of the employer to grant the benefits over a significant period of time.In the case at bench, contrary to UEEA's claim, the distribution of the 70% incremental proceeds based on equal sharing scheme cannot be held to have ripened into a company practice that the respondents have a right to demand. Jurisprudence is replete with the rule specifying a minimum number of years within which a company practice must be exercised in order to constitute voluntary company practice. Even if UE had been continuously distributing the 70% incremental proceeds based on equal sharing scheme to all its covered employees, the same could not have ripened into a vested right because such grant would not have been characterized by a deliberate and voluntary act on the part of the petitioner.

Indeed, a second MR as a rule, is generally a prohibited pleading.The Court, however, does not discount instances when it may authorize the suspension of the rules of procedure so as to allow the resolution of a second motion for reconsideration, in cases of extraordinarily persuasive reasonssuch as when the decision is a patent nullity.

Time and again, the Court has upheld the theory that the rules of procedure are designed to secure and not to override substantial justice. These are mere tools to expedite the decision or resolution of cases, hence, their strict and rigid application which would result in technicalities that tend to frustrate rather than promote substantial justice must be avoided. GRANTED.

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