PRODUCERS BANK OF THE PHILIPPINES vs.

NLRC regards the wage differentials, the increase made pursuant to the CBA answers for
March 28, 2001 / Gonzaga-Reyes, J. / Digest by Chimi the increase mandated by the wage order.
• LA – dismissed complaint
NATURE Petition for Review on Certiorari
• NLRC – granted claims except for damages
PETITIONER Producers Bank of the Philippines
RESPONDENTS National Labor Relations Commissions and Producers Bank Employees
ISSUE & RATIO.
Association
1. Whether or not there was diminution of benefits? - NO
• The SC stated that a bonus is not a demandable and enforceable obligation, except
SUMMARY. Producers Bank had been giving bonuses to its employees, until when it was when it is made part of the wage, salary or compensation of the employee.
placed under conservatorship and suffered from bank runs. Its employees demanded for
their wage differentials following a law adjusting salaries, and bonuses after the bank cut the
• In this case, the respondents cannot invoke that the granting of the said bonuses
became a vested right in light of the condition of the employer, which was placed
same due to its condition. The SC held that the employees cannot demand for the said
under conservatorship, as established by the LA and the NLRC (Traders Royal Bank
bonuses in light of the bank’s financial condition.
vs. NRLC and Manila Banking Corporation vs. NLRC). The bank also suffered from
bank runs in millions of pesos since 1984 to 1988.
DOCTRINE. A bonus is not a demandable and enforceable obligation, except when it is made
part of the wage, salary or compensation of the employee. The same cannot be invoked to • As regards the wage differentials, Wage Order No. 6 provided that all increases in
have ripened into a vested right in light of the financial difficulties of the employer. wages or allowances granted by the employer between 17 June 1984 and 1
November 1984 shall be credited as compliance with the wage and allowance
adjustments prescribed therein.
FACTS.
• Not allowing Producers Bank to apply the salary increase in compliance with the
• Producers Bank has been providing several benefits to its employees since 1971 when its Wage Order since a portion of the periods of adjustments does not fall within the
started operations. period of creditability will run counter to the magnanimity of the bank and
• Among the benefits provided are penalize the same for prescribing wage increases higher than the statutorily
o a mid-year bonus (=one month basic pay) prescribed increases in salary.
o a Christmas bonus (=one whole month salary)
• On December 1975, resident Marcos issued PD 851 or the 13th month pay law, which DECISION. Petition is granted. NLRC ruling set aside.
mandates all employers to pay their employees receiving a basic salary of not more than
Php1K a month a, regardless of the nature of employment, a 13th month pay. However,
employers already paying their employees a 13th month pay or its equivalent are not
covered by the law.
• Producers bank from 1981 to 1983 was only able to give out a mid-year bonus, 13th month
pay, but Christmas bonus was no longer based on the allowance but on basic pay of
employees.
• In 1984, the bank was placed under conservatorship. In 1984 and 1985, the bank was thus
only gave ½ month basic pay as 13th month pay and none for Christmas bonus.
• Also, in 1984, Wage Order No 6 was issued which provided for salary adjustments of
employees. Thereafter, the parties entered into a CBA on 1 March 1984 and agreed on a
salary adjustment scheme in favor of the employees, which was applied retroactively
starting 1 March 1984 to 28 February 1985.

• Respondent: the mid-year and Christmas bonuses have ripened into a vested right,
and cannot be unilaterally withdrawn by the bank; also entitled to wage differentials
pursuant to Wage Order No. 6.
• Petitioner: It cannot be compelled to pay the differentials due to its financial
condition. The CBA also did not provide for the payment of any mid-year or Christmas
bonus. Such bonuses were mere acts of grace, following Section 4 of the CBA. As