TRADERS ROYAL BANK, PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION & TRADERS ROYAL BANK EMPLOYEES UNION, RESPONDENTS.

This petition for certiorari seeks to nullify or set aside
the decision dated September 2, 1988 of the National Labor Relations
Commission, which found the petitioner, Traders Royal Bank (or TRB), guilty of
diminution of benefits due the private respondents and ordered it to pay the
said employees’ claims for differentials in their holiday, mid-year, and
year-end bonuses.

On November 18, 1986,
the Union, through its president, filed a letter-complaint
against TRB with the Conciliation Division of the Bureau of Labor Relations
claiming that:

“First, the management of TRB per memo
dated October 10, 1986
paid the employees their HOLIDAY PAY, but has withheld
from the Union the basis of their computation.

“Second, the computation in question, has allegedly decreased the daily salary rate of
the employees.  This diminution of
existing benefits has decreased our overtime rate and has affected the
employees’ take home pay.

“Third, the diminution of benefits
being enjoyed by the employees since time immemorial, e.g. mid-year bonus, from
two (2) months gross pay to two
(2) months basic and year-end bonus from three (3) months gross to only two (2)
months.

“Fourth, the refusal
by management to recall active union members from the branches which were being
transferred without prior notice, solely at the instance of the branch
manager.” (p. 26, Rollo.)

In its answer to the union’s complaint, TRB pointed out that the
NLRC, not the Bureau of Labor Relations, had jurisdiction over the money claims
of the employees.

 On March 24, 1987, the Secretary of Labor certified
the complaint to the NLRC for resolution of the following issues raised by the
complainants:

“1)  The Management of
TRB per memo dated October 10, 1986
paid the employees their holiday pay but has withheld from the union the basis
of their computation.

“2)  The computation in question has allegedly
decreased the daily salary rate of the employees.  This diminution of existing benefits has
decreased our overtime rate and has affected the employees’ take home pay.

“3)  The diminution of benefits being enjoyed by
the employees since the (sic) immemorial, e.g. mid-year bonus, from two (2)
months gross pay to two (2) months basic and year-end bonus from three (3)
months gross to only two (2) months.

“4)  The refusal by management to recall active
union members from the branches which were being transferred without prior
notice, solely at the instance of the branch manager.” (p. 28, Rollo.)

In the meantime, the parties who had been negotiating for a
collective bargaining agreement, agreed on the terms of the CBA, to wit:

“1.  The whole of the bonuses given in previous
years is not demandable, i.e., there is no diminution, as to be liable for a
differential, if the bonus given is less than that in previous years.

“2.  Since only two months bonus is guaranteed,
only to that extent are bonuses deemed part of regular compensation.

“3.  As regards the third and fourth bonuses, they
are entirely dependent on the income of the bank, and not demandable as part of
compensation.” (pp. 67-68, Rollo.)

Despite the terms of the CBA, however, the union insisted on
pursuing the case, arguing that the CBA would apply prospectively only to
claims arising after its effectivity.

Petitioner, on the other hand, insisted that it had paid the
employees holiday pay.  The practice of
giving them bonuses at year’s end, would depend on how
profitable the operation of the bank had been. 
Generally, the bonus given was two (2) months basic mid-year and two (2)
months gross end-year.

On September 2, 1988,
the NLRC rendered a decision in favor of the employees, the dispositive portion
of which reads:

“WHEREFORE, judgment is hereby rendered in favor of the petitioner
and ordering respondent bank to pay petitioner members-employees the following:

“1.  Holiday differential for the period covering
1983-1986 as embodied in Resolution No. 4984-1986 of respondent’s Board of
Directors but to start from November 11, 1983 and using the Divisor 251 days in
determining the daily rate of the employees;

“2.  Mid-year bonus differential representing the
difference between two (2) months gross pay and two (2) months basic pay and
end-year bonus differential of one (1) month gross pay for 1986.

“The claim for holiday differential for the period earlier
than November 11, 1983 is
hereby dismissed, the same having prescribed.

“Likewise, the charge of unfair labor practice against the
respondent company is hereby dismissed for lack of merit.” (pp. 72-73, Rollo.)

A motion for
reconsideration was filed by TRB but it was denied.  Hence, this petition for certiorari.

There is merit in the petitioner’s contention that the NLRC
gravely abused its discretion in ordering it to pay mid-year/year-end bonus
differential for 1986 to its employees.

A bonus is “a gratuity or act of liberality of the giver
which the recipient has no right to demand as a matter of right” (Aragon
vs. Cebu Portland Cement Co., 61 O.G. 4597). 
“It is something given in addition to what is ordinarily received
by or strictly due the recipient.” The granting of a bonus is basically a
management prerogative which cannot be forced upon the employer “who may
not be obliged to assume the onerous burden of granting bonuses or other
benefits aside from the employee’s basic salaries or wages x x x” (Kamaya
Point Hotel vs. National Labor Relations Commission, Federation of Free Workers
and Nemia Quiambao, G.R. No. 75289, August 31, 1989).

It is clear from the above-cited rulings that the petitioner may
not be obliged to pay bonuses to its employees. 
The matter of giving them bonuses over and above their lawful salaries
and allowances is entirely dependent on the profits, if any, realized by the
Bank from its operations during the past year.

From 1979-1985, the bonuses were less because the income of the
Bank had decreased.  In 1986, the income
of the Bank was only 20.2 million pesos, but the Bank still gave out the usual
two (2) months basic mid-year and two (2) months gross year-end bonuses.  The petitioner pointed out, however, that the
Bank weakened considerably after 1986 on account of political developments in
the country.  Suspected to be a Marcos?owned
or controlled bank, it was placed under sequestration by the present administration
and is now managed by the Presidential Commission on Good Government (PCGG).

In  the light of these
submissions of the petitioner, the contention of the Union that the granting of
bonuses to the employees had ripened into a company practice that may not be
adjusted to the prevailing financial condition of the Bank has no legal and
moral bases.  Its fiscal condition having
declined, the Bank may not be
forced to distribute bonuses which it can no longer afford to pay and, in
effect, be penalized for its past generosity to its employees.

Private respondent’s contention, that the decrease in the
mid-year and year-end bonuses constituted a diminution of the employees’
salaries, is not correct, for bonuses are not part of labor standards in the
same class as salaries, cost of living allowances, holiday pay, and leave
benefits, which are provided by the Labor Code.

WHEREFORE, the petition for certiorari is
granted.  The decision of the National
Labor Relations Commission is modified by deleting the award of bonus
differentials to the employees for 1986. 
In other respects, the decision is affirmed.  Costs against the
respondent union.

SO ORDERED.

Narvasa, (Chairman), Cruz, Gancayco, and Medialdea, JJ., concur.