Company practice

1. Concept

As a rule, “practice” or “custom” is not a source of a legally demandable or enforceable right. In labor cases, however, benefits which were voluntarily given by the employer, and which have ripened into company practice, are considered as rights and are subject to the non-diminution rule. To be considered a company practice, the benefit must be consistently and deliberately granted by the employer over a long period of time. It requires an indubitable showing that the employer agreed to continue giving the benefit knowing fully well that the employee is not covered by any provision of law or agreement for its payment. (Home Credit Mutual Building and Loan Association v. Prudente, G.R. No. 200010, 27 August 2020)

2. Requisites

1) Regularity

2) Voluntary

3) Deliberate intent

In sum, the benefit must be characterized by regularity, voluntary and deliberate intent of the employer to grant the benefit over a considerable period of time. (Vergara, Jr. v. Coca-Cola Bottlers Philippines, Inc., G.R. No. 176985, 01 April 2013)

a. Regularity

1) No set length of time

Jurisprudence has not laid down any hard-and-fast rule as to the length of time that company practice should have been exercised in order to constitute voluntary employer practice. The common denominator in previously decided cases appears to be the regularity and deliberateness of the grant of benefits over a significant period of time. It requires an indubitable showing that the empl...


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