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Department of Labor and Employment

NATIONAL CAPITAL REGION


CAMANAVA FIELD OFFICE

PROHIBITION AGAINST
ELIMINATION OR
DIMINUTION OF BENEFITS
Labor Code:
Book III- Conditions of Employment Art. 100

NON-DIMINUTION RULE
It essentially means that benefits being
given to employees cannot be taken back or
reduced unilaterally by the employer
because the benefit has become part of the
employment contract, written or unwritten.
(Nestle Phils., Inc. v. NLRC, 193 SCRA 504)

NON-DIMINUTION RULE
Although Article 100 refers to benefits
being enjoyed as of May 1, 1974, the
provision (as if it were an established
labor law principle) to employment
benefits initiated after the issuance
of the Code.

NON-DIMINUTION RULE
The rule against diminution of supplements
or benefit is based on an express policy or
has ripened into a practice over a long
period of time and that the practice is
consistent
and
deliberate.(Davao
Integrated Ports Stevedoring Services vs.
Abarquez, et. al., 220 SCRA 197) and
(Globe Mackay Cable v. NLRC, 163 SCRA 71)

EXEMPTION:
1. Error in Construction or application of
law:
-The rule will not apply if the practice is
due to error in construction or application
of a doubtful or difficult question of law.
But even in case of error it should be
shown that the correction is being done
soon after discovery of the error.

EXEMPTION:
2. The benefits being claimed is a
contingent or conditional benefit.
-The benefits demandability depends
on certain pre-conditions.
( Lexal Laboratories, In. vs. Court of
Industrial Relations, et. al., 25 SCRA
688; Asis vs Minister of Labor, et.al.
supra)

EXEMPTION:
Example: Bonus
Bonus is an amount granted voluntarily
to an employee for his industry and
loyalty which contributed to the
success and realization of profits of the
employers business.

EXEMPTION:
Bonus is also granted by an enlightened
employer to spur the employee to
greater efforts for the continued
success of the enterprise.

EXEMPTION:
From the legal point of view, a bonus is
not a demandable and enforceable
obligation. It is an act of generosity.
But it becomes an obligation when it is
made
part
of
the
wage
or
compensation, or made the subject of
an express agreement between the
parties.

EXEMPTION:
Atok-Big Wedge, March 3, 1953:
If the bonus is given as an additional
compensation which the employer
promised and agreed to give without
any conditions imposed for its
payment, such as success of business or
greater production or output, then it is
part of the wage.

3. The Elimination of an existing


benefits in exchange for an equal or
better one is not in violation of
Article 100 (Asis v. Minister of Labor,
171 SCRA 237)

Thank you