Philippine Supreme Court Says Sugar Mill Acted In Bad Faith In Reducing Bonuses

Manila, Metro Manila, Philippines (AHN) – The Philippine Supreme Court has ruled that Hacienda Luisita – a sugar mill owned by the family of President Benigno Aquino III – acted in bad faith in reducing Christmas bonuses of workers after a strike hit the company.

The court’s second division ordered Central Azucarera de Tarlac, which runs the sugar mill and refinery in Hacienda Luisita, to use its old formula in computing the 13th month pay, which is mandated by law and given during the last month of the year.

The court, which issued the decision on Monday and released it Thursday, said the company has been using the formula for three decades, but altered it after the 2004 industrial action that resulted in the death of 14 people.

The decision confirmed a 2009 decision by the Court of Appeals that CAT has to include in its formula the annual salary-based basic monthly pay, premium pay for work on rest days and special holidays, night shift differential and holiday pay, divided by the number of months worked in a year. After the strike, employees’ work hours were reduced to 15 days in a month, but CAT continued to divide the annual income by 12 when the employees in effect worked only the equivalent of eight months.

Workers complained to the National Labor Relations Commission, which initially ruled in favor of CAT, but later reversed its decision.

The Supreme Court’s ruling is being watched by political observers because another Hacienda Luisita case is pending before the court on the redistribution of the sugar plantation under the Land Reform program of the government. The recent ruling and future decisions may indicate the relationship between the judiciary and the president had been affected after Aquino publicly expressed his disagreement with the appointment of Chief Justice Renato Corona by his predecessor President Gloria Macapagal-Arroyo days before the latter’s term ended.

---