Employers have NO obligation to give Christmas bonus

By definition, a bonus is a gratuity or act of liberality of the giver. It is something given in addition to what is ordinarily received by or strictly due the recipient. A bonus is granted and paid to an employee for his industry and loyalty which contributed to the success of the employers business and made possible the realization of profits. A bonus is also granted by an enlightened employer to spur the employee to greater efforts for the success of the business and realization of bigger profits. (G.R. No. 18066, 2 March 2010)

The giving of a bonus, such as Christmas bonus, is management prerogative and discretion on the part of the employer. Therefore, as a general rule, employees CANNOT demand that they be given bonuses.

In Lepanto Ceramics Inc. v. Lepanto Ceramics Employees Association (G.R. No. 18066, 2 March 2010), the Supreme Court (SC) said that, generally, a bonus is not a demandable and enforceable obligation. For a bonus to be enforceable, it must have been promised by the employer and expressly agreed upon by the parties. Given that the bonus in this case is integrated in the collective bargaining agreement (CBA), the same partakes the nature of a demandable obligation. Verily, by virtue of its incorporation in the CBA, the Christmas bonus due to respondent association has become more than just an act of generosity on the part of the petitioner but a contractual obligation it has undertaken.

In short, although not a legal obligation on the part of the employer to give bonuses, it becomes mandatory and demandable if agreed upon by the parties (either via the contract of employment or a collective bargaining agreement) or if it has ripened into company policy (Article 100 of the Labor Code of the Philippines).