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Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
AT A GLANCE:
“Nothing in the Labor Code shall be construed to eliminate or in any way diminish supplements, or other employee benefits being enjoyed at the time of its promulgation.” (Article 100, Labor Code)
Principle of Non-Diminution of Benefits
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.
The law says:
“Nothing in this Book shall be construed to eliminate or in any way diminish supplements, or other employee benefits being enjoyed at the time of promulgation of this Code.” (Article 100, Labor Code)
When is there diminution of benefits?
Jurisprudence says:
“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.” (Nippon Paint Philippines, Inc. v. NIPPEA, G.R. No. 229396, June 30, 2021)
Related article: When is a bonus demandable?
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