Davao Fruits Corporation v · G.R. 85073

Petitioner: Davao Fruits Corporation
Respondent: Associated Labor Unions
Citation: G.R. No. 85073
Court: Supreme Court
Division: First Division
Ponente: Quiason, J.
Decided: August 24, 1993

Computation of thirteenth month pay - whether payments for sick, vacation and maternity leaves, premiums for work on rest days and special holidays,…

Summary

This labor law case involved a dispute over thirteenth month pay computation between Davao Fruits Corporation and its employees' union ALU. The union sought recovery of 1982 thirteenth month pay differentials, claiming the company improperly excluded certain benefits (sick leave, vacation leave, maternity leave, premium pay, holiday pay) that had been included since 1975. While P.D. No. 851 and implementing rules technically exclude such items from basic salary computation, the Supreme Court affirmed lower tribunals' decisions favoring employees. The Court applied the non-diminution of benefits principle under Article 100 of the Labor Code, ruling that the company's continuous voluntary practice from 1975-1981 of including these benefits established a company practice that ripened into enforceable employee benefits that cannot be unilaterally eliminated, regardless of the technical legal requirements.

Statutes applied

Labor Code Art. 100

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13th Month Pay & Final Pay in the Philippines

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By Intellegal Editorial Board · August 24, 1993

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