SC: Noy’s family-owned sugar mill acted in ‘bad faith’

The Supreme Court (SC) has decided a labor case filed by sugar workers against the Central Azucarera de Tarlac (CAT) owned by the family of President Aquino, which decision ruled against the Cojuangco-Aquino clan’s sugar business, saying it acted in bad faith.

In a 10-page decision penned by Associate Justice Antonio Eduardo Nachura, the SC’s Second Division said the sugar mill acted in bad faith in slashing the 13th month pay of its employees and turned down the petition filed by CAT seeking the reversal of the Court of Appeals issued last year.

The appellate court had ordered the firm to revert back to its long-established formula in computing the employees 13th month pay.

The sugar mill cut the workers’ 13th month pay after staging a protest action six years ago. The protest left at least seven sugar workers dead and scores injured.

CAT claimed there had been an error in the computation of the 13th month pay of its employees which it claimed was discovered only by the management when the workers’ union – Central Azucarera de Tarlac

Labor Union — raised a question concerning the computation of their 13th month pay for 2006.

The SC pointed out that the appellate court correctly held that CAT’s practice in giving the 13th month pay based on the employees gross annual earnings which included the basic month salary, premium pay for work on rest days and special holidays, night shift differential pay and holiday pay continued for almost 30 years into a company policy which cannot be unilaterally withdrawn.

“The voluntariness of the grant of the benefit was manifested by the number of years the employer had paid the benefit to its employee. Petitioner only changed the formula in the computation of the 13th month pay after almost 30 years and only after the dispute between the management and employees erupted,” the SC noted.

“This act of petitioner in changing the formula at this time cannot be sanctioned, as it indicates a badge of bad faith,” the Court added.

CAT operates a sugar mill and refinery, distillery and carbon dioxide plants in Barrio San Miguel, Tarlac City.

President Aquino owns 301,792 shares or 1-percent of the company.

Prior to the case, the CAT granted its employees the mandatory 13th month pay since 1975 as mandated Presidential Decree No. 851.

The formula used by CAT in computing the 13th month pay was – total basic annual salary divided by 12. Included in its computation of the total basic annual salary were basic monthly salary, first eight hours overtime pay on Sunday and legal/special holiday, night premium pay, and vacation and sick leaves for each year.

The said formula was applied from 1975 until 2004, when the workers staged a strike to demand the reinstatement of some 327 unionists, including their leaders who were fired by the management of Hacienda Luisita.

The strike prompted the CAT to stop its operations until December 2005, when all the striking union members were allowed to return to work.

However, CAT declared another suspension of operations for the months of April and May 2006 which was lifted in June 2006.

From June to September 2006, the employees were allowed to report only a 15-day per month rotation basis.

In December 2006, CAT gave the employees their 13th months based on their total earnings during the year divided by 12.

The employees protested the computation, saying that the petitioner failed to adhere to the usual computation of their 13th month pay.

They noted that their total earning should have been divided by eight and not 12 since they worked only for eight months in 2006.

They added that the company did not observe the practice of giving its employees the guaranteed amount equivalent to their one month pay, in instances where the computed 13th month pay was less than their basic monthly salary.

Negotiations between the two parties failed, prompting the employees to file a complaint against CAT before the National Labor Relations Commission for money claims based on the erroneous computation of their 13th month pay. –Benjamin B. Pulta, Daily Tribune