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    Vergara v. Coca Cola

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    Horeb Felix
    This case involves a dispute over the computation of retirement benefits for a former employee of Coca-Cola Bottlers Philippines Inc. The petitioner argued that his retirement benefits should include sales management incentives (SMI) based on the company's alleged consistent practice of providing average SMI to retiring employees who did not meet sales and collection targets. However, the Supreme Court ruled against the petitioner, finding no substantial evidence that the inclusion of SMI without qualification had ripened into a company practice. To be considered a regular practice, the employee must prove the benefit was granted regularly, voluntarily and deliberately over a considerable period of time, which the petitioner failed to do. The court therefore held that SMI should not be included in the computation of

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    Vergara v. Coca Cola

    Uploaded by

    Horeb Felix
    74 views2 pages
    This case involves a dispute over the computation of retirement benefits for a former employee of Coca-Cola Bottlers Philippines Inc. The petitioner argued that his retirement benefits should include sales management incentives (SMI) based on the company's alleged consistent practice of providing average SMI to retiring employees who did not meet sales and collection targets. However, the Supreme Court ruled against the petitioner, finding no substantial evidence that the inclusion of SMI without qualification had ripened into a company practice. To be considered a regular practice, the employee must prove the benefit was granted regularly, voluntarily and deliberately over a considerable period of time, which the petitioner failed to do. The court therefore held that SMI should not be included in the computation of

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    This case involves a dispute over the computation of retirement benefits for a former employee of Coca-Cola Bottlers Philippines Inc. The petitioner argued that his retirement benefits should include sales management incentives (SMI) based on the company's alleged consistent practice of providing average SMI to retiring employees who did not meet sales and collection targets. However, the Supreme Court ruled against the petitioner, finding no substantial evidence that the inclusion of SMI without qualification had ripened into a company practice. To be considered a regular practice, the employee must prove the benefit was granted regularly, voluntarily and deliberately over a considerable period of time, which the petitioner failed to do. The court therefore held that SMI should not be included in the computation of

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    74 views2 pages

    Vergara v. Coca Cola

    Uploaded by

    Horeb Felix
    This case involves a dispute over the computation of retirement benefits for a former employee of Coca-Cola Bottlers Philippines Inc. The petitioner argued that his retirement benefits should include sales management incentives (SMI) based on the company's alleged consistent practice of providing average SMI to retiring employees who did not meet sales and collection targets. However, the Supreme Court ruled against the petitioner, finding no substantial evidence that the inclusion of SMI without qualification had ripened into a company practice. To be considered a regular practice, the employee must prove the benefit was granted regularly, voluntarily and deliberately over a considerable period of time, which the petitioner failed to do. The court therefore held that SMI should not be included in the computation of

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    Vergara, Jr. vs. Coca-Cola Bottlers Phils Inc.

    G.R. No. 176985

    Facts:
    Petitioner was an employee of respondent until he retired as District Sales Supervisor
    (DSS). As stipulated in respondent’s existing Retirement Plan Rules and Regulations at the
    time, the Annual Performance Incentive Pay of RSMs, DSSs, and SSSs shall be considered in
    the computation of retirement benefits, as follows: Basic Monthly Salary + Monthly Average
    Performance Incentive (which is the total performance incentive earned during the year
    immediately preceding + 12 months) x No. of Years in Service.

    Claiming his entitlement to an additional Php474,600.00 as Sales Management


    Incentives (SMI) and to the amount of Php496,016.67 which respondent allegedly deducted
    illegally, representing the unpaid accounts of two dealers within his jurisdiction, petitioner
    filed a complaint before the NLRC for the payment of his “Full Retirement Benefits, Merit
    Increase, Commission/Incentives, Length of Service, Actual, Moral and Exemplary Damages,
    and Attorney’s Fees.” However, the parties executed a Compromise Agreement, whereby
    petitioner acknowledged full payment by respondent of the amount of Php496,016 covering
    the amount illegally deducted.

    Issue: Whether or not SMI should be included in the computation of petitioner’s retirement
    benefits on the ground of consistent company practice. (the petitioner insistently avers that
    many DSSs who retired without achieving the sales and collection targets were given the
    average SMI in their retirement package.

    Held: Negative.

    Generally, employees have a vested right over existing benefits voluntarily granted to
    them by their employer. Thus, any benefit and supplement being enjoyed by the employees
    cannot be reduced, diminished, discontinued or eliminated by the employer. The principle of
    non-diminution of benefits is actually founded on the Constitutional mandate to protect the
    rights of workers, to promote their welfare, and to afford them full protection. In turn, said
    mandate is the basis of Article 4 of the Labor Code which states that “all doubts in the
    implementation and interpretation of this Code, including its implementing rules and
    regulations, shall be rendered in favor of labor.”

    There is diminution of benefits when the following requisites are present: (1) the grant or
    benefit is founded on a policy or has ripened into a practice over a long period of time; (2) the
    practice is consistent and deliberate; (3) the practice is not due to error in the construction or
    application of a doubtful or difficult question of law; and (4) the diminution or discontinuance
    is done unilaterally by the employer.

    To be considered as a regular company practice, the employee must prove by substantial


    evidence that the giving of the benefit must be characterized by regularity, voluntary and
    deliberate intent of the employer to grant the benefit over a considerable period of time.

    Upon review of the entire case records, the SC finds no substantial evidence to prove that
    the grant of SMI to all retired DSSs regardless of whether or not they qualify to the same had
    ripened into company practice. Despite more than sufficient opportunity given him while his
    case was pending before the NLRC, the CA and even to the SC, petitioner utterly failed to
    adduce proof to establish his allegation that SMI has been consistently, deliberately and
    voluntarily granted to all retired DSSs without any qualification or conditions whatsoever.

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