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to one (1) month salary only to permanent and probationary employees as of November 15, 1990. 9 On March 26, 1991, respondent company announced the grant of performance bonus to both rank and file employees and supervisory specialist grade and managerial staff equivalent to two (2) months salary and 2.75 basic salary, respectively, as of December 30, 1990. The performance bonus, however, would be given only to permanent employees as of March 30, 1991. 10 In a decision dated October 8, 1992, the labor arbiter ordered respondent company to pay petitioners their service awards, anniversary bonuses and prorated performance bonuses, including ten percent (10%) thereof as attorney's fees. Issue: WON respondent NLRC committed reversible error or grave abuse of discretion in affirming the validity of the "Release and Quitclaim" and, consequently, that petitioners are not entitled to payment of service awards and other bonuses. Held: Under prevailing jurisprudence, the fact that an employee has signed a satisfaction receipt for his claims does not necessarily result in the waiver thereof. The law does not consider as valid any agreement whereby a worker agrees to receive less compensation than what he is entitled to recover. A deed of release or quitclaim cannot bar an employee from demanding benefits to which he is legally entitled. Furthermore, in the instant case, it is an undisputed fact that when petitioners signed the instrument of release and quitclaim, they made a written manifestation reserving their right to demand the payment of their service awards. The element of total voluntariness in executing that instrument is negated by the fact that they expressly stated therein their claim for the service awards, a manifestation equivalent to a protest and a disavowal of any waiver thereof. The grant of service awards in favor of petitioners is more importantly underscored in the precedent case of Insular Life Assurance Co., Ltd., et al. vs. NLRC, et al., 24 where this Court ruled that "as to the service award differentials claimed by some respondent union members, the company policy shall likewise prevail, the same being based on the employment contracts or collective bargaining agreements between the parties. As the petitioners had

REGALADO, J.: Facts: Petitioners were regular employees of private respondent Insular Life Assurance Co:, Ltd., but they were dismissed when their positions were declared redundant. A special redundancy benefit was paid to them, which included payment of accrued vacation leave and fifty percent (50%) of unused current sick leave, special redundancy benefit, equivalent to three (3) months salary for every year of service; and additional cash benefits, in lieu of other benefits provided by the company or required by law. 3 Before the termination of their services, petitioner Marcos had been in the employ of private respondent for more than twenty (20) years; petitioner Andrada, more than twenty-five (25) years; petitioner Lopez, exactly thirty (30) years; and petitioner Cruz, more than twenty (20) years. Petitioners, particularly Baltazara J. Lopez, sent a letter dated October 23, 1990 to respondent company questioning the redundancy package, She claimed that they should receive their respective service awards and other prorated bonuses which they had earned at the time they were dismissed. In addition, Lopez argued that "the cash service awards have already been budgeted in a fund distinct and apart from redundancy fund. 5 Thereafter, private respondent required petitioners to execute a "Release and Quitclaim," 6 and petitioners complied but with a written protest reiterating their previous demand that they were nonetheless entitled to receive their service awards. Meanwhile, in the same year, private respondent celebrated its 80th anniversary wherein the management approved the grant of an anniversary bonus equivalent

explained, pursuant to their policies on the matter, the service award differential is given at the end of the year to an employee who has completed years of service divisible by 5. A bonus is not a gift or gratuity, but is paid for some services or consideration and is in addition to what would ordinarily be given. 25 The term "bonus" as used in employment contracts, also conveys an idea of something which is gratuitous, or which may be claimed to be gratuitous, over and above the prescribed wage which the employer agrees to pay. While there is a conflict of opinion as to the validity of an agreement to pay additional sums for the performance of that which the promisee is already under obligation to perform, so as to give the latter the right to enforce such promise after performance, the authorities hold that if one enters into a contract of employment under an agreement that he shall be paid a certain salary by the week or some other stated period and, in addition, a bonus, in case he serves for a specified length of time, there is no reason for refusing to enforce the promise to pay the bonus, if the employee has served during the stipulated time, on the ground that it was a promise of a mere gratuity. This is true if the contract contemplates a continuance of the employment for a definite term, and the promise of the bonus is made at the time the contract is entered into. If no time is fixed for the duration of the contract of employment, but the employee enters upon or continues in service under an offer of a bonus if he remains therein for a certain time, his service, in case he remains for the required time, constitutes an acceptance of the offer of the employer to pay the bonus and, after that acceptance, the offer cannot be withdrawn, but can be enforced by the employee. The weight of authority in American jurisprudence, with which we are persuaded to agree, is that after the acceptance of a promise by an employer to pay the bonus, the same cannot be withdrawn, but may be enforced by the employee. However, in the case at bar, equity demands that the performance and anniversary bonuses should be prorated to the number of months that petitioners actually served respondent company in the year 1990. This observation should be taken into account in the computation of the amounts to be awarded to petitioners. WHEREFORE the decision of Labor Arbiter Alex Arcadio Lopez is upheld.


adjusted to its fiscal position is without merit. The company cannot be forced to give bonuses which it can no longer afford and in effect, be penalized for its past generosity. Bonuses are not part of labor standards like salaries, cost of living allowances, and leave benefits, which are provided by the Labor Code.

Facts: ` Respondent Traders Royal Bank Employees Union filed a complaint to the NLRC on the account of diminution of their benefits by the petitioner. Said diminution was effected through; mid-year bonus, from two (2) months gross pay to two (2) months basic and year-end bonus from three (3) months gross to only two (2) months. NLRC rendered a decision in favor of the Employees union and ordered Traders Royal Bank to pay to employees the mid-year bonus differential representing the difference between two (2) months gross pay and two (2) months basic pay and end-year bonus differential of one (1) month gross pay for 1986. The motion for reconsideration of Traders Royal Bank was then denied. Thus the petition for certiorari. Issue: Whether or not the reduction in bonuses is tantamount to diminution of benefits? Held: The petition for Certiorari was granted. Ratio: A bonus is a gratuity or act of liberality of the giver which the recipient has no right to demand as a matter of right. The discretion of giving bonuses rests upon the management and the income of the operations of the past year. It has been claimed that the income of the petitioner has indeed decreased yet the bank still gave out the usual bonuses. Any claim that the receipt of the employees of bonuses has been a company tradition and cannot be

G.R. NO. 101761. MARCH 24, 1993. NATIONAL SUGAR REFINERIES CORPORATION, PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION AND NBSR SUPERVISORY UNION, (PACIWU) TUCP, RESPONDENTS. Jose Mario C. Bunag for petitioner. The Solicitor General and the Chief Legal Officer, NLRC, for public respondent. Zoilo V. de la Cruz for private respondent. DECISION REGALADO, J p: Facts: Petitioner National Sugar Refineries Corporation, a corporation which is fully owned and controlled by the Government, operates three (3) sugar refineries located at Bukidnon, Iloilo and Batangas. The Batangas refinery was privatized on April 11, 1992 pursuant to Proclamation No. 50. On June 1, 1988, petitioner implemented a Job Evaluation (JE) Program affecting all employees, from rank-and-file to department heads. As a result, all positions were re-evaluated, and all employees including the members of respondent union were granted salary adjustments and increases in benefits commensurate to their actual duties and functions. We glean from the records that for about ten years prior to the JE Program, the members of respondent union were treated in the same manner as rank-and file employees. As such, they used to be paid overtime, rest day and holiday pay. With the implementation of the JE Program, the following adjustments were made: (1) the members of respondent union were re-classified under levels S-5 to S-8 which are considered managerial staff for purposes of compensation and benefits; (2) there was an increase in basic pay of the average of 50% of their basic pay prior to the JE Program, with the union members now enjoying a wide gap (P1,269.00 per month) in basic pay compared to the highest paid rank-andfile employee; (3) longevity pay was increased on top of alignment adjustments; (4) they were entitled to increased company COLA of P225.00 per month; (5) there was a grant of P100.00 allowance for rest day/holiday work. Two years after the implementation of the JE Program, the members of herein respondent union filed a complainant with the executive labor arbiter for non-

payment of overtime, rest day and holiday pay allegedly in violation of Article 100 of the Labor Code. Executive Labor Arbiter decided in favour of labor. Respondent National Labor Relations Commission (NLRC) affirmed the decision of the labor arbiter on the ground that the members of respondent union are not managerial employees, as defined under Article 212 (m) of the Labor Code and, therefore, they are entitled to overtime, rest day and holiday pay. Respondent NLRC declared that these supervisory employees are merely exercising recommendatory powers subject to the evaluation, review and final action by their department heads; their responsibilities do not require the exercise of discretion and independent judgment; they do not participate in the formulation of management policies nor in the hiring or firing of employees; and their main function is to carry out the ready policies and plans of the corporation Issue: Whether supervisory employees, should be considered as officers or members of the managerial staff, and hence are not entitled to overtime rest day and holiday pay. Held: The petition is impressed with merit. In resolving the issue, it must first be ascertained whether or not NBSR members, who are supervisory employees, are to be considered as officers or members of the managerial staff who are exempt from the coverage of Art. 82 of the Code. The NLRC in ruling that NBSR members are not managerial employees, adopted the definition stated in Art. 212(m). NASUREFCO, however, avers that for purposes of determining whether NBSR members are entitled to overtime, restday and holiday pay, said employees should be considered as officers or members of the managerial staff as defined under Art. 82, Book III of the Code on Working Conditions and Rest Periods and amplified in Sec. 2, Rule I, Book III of the IRR. The question is a factual one dependent on the circumstances of the particular case. In determining whether an employee is within the terms of the statutes, the criterion is the character of the work performed, rather than the title of the employees position. Generally, the Court is not supposed to review the factual findings of the NLRC, but substantial justice and the peculiar circumstances obtaining in this case mandate a deviation from the rule. The union members are supervisory employees that are under the direct supervision of their department superintendents and generally assist the latter in planning, organizing, directing, controlling, communicating and in making decisions in attaining the companys goals and objectives. These supervisory

employees are likewise responsible for the effective and efficient control of their respective departments. The members of the union thus discharge duties and responsibilities which qualify them as officers and members of the managerial staff as defined in Sec 2, Rule I Book III of the Rules to Implement the Code, viz: (1) their primary duty consists of the performance of work directly related to management policies of their employer; (2) they customarily and regularly exercise discretion and independent judgment; (3) they regularly and directly assist the managerial employee whose primary duty consist of the management of a department of the establishment in which they are employed (4) they execute, under general supervision, work along specialized or technical lines requiring special training, experience, or knowledge; (5) they execute, under general supervision, special assignments and tasks; and (6) they do not devote more than 20% of their hours worked in a work-week to activities which are not directly and clearly related to the performance of their work hereinbefore described. The foregoing considered, the union members should be considered as officers and members of the managerial staff and are, therefore, exempt from the coverage of Article 82. Perforce, they are not entitled to overtime, rest day and holiday. The distinction made by respondent NLRC on the basis of whether or not the union members are managerial employees, to determine the latter's entitlement to the questioned benefits, is misplaced and inappropriate. It is admitted that these union members are supervisory employees and this is one instance where the nomenclatures or titles of their jobs conform with the nature of their functions. Hence, to distinguish them from a managerial employee, as defined either under Articles 82 or 212 (m) of the Labor Code, is puerile and in efficacious. The controversy actually involved here seeks a determination of whether or not these supervisory employees ought to be considered as officers or members of the managerial staff. The distinction, therefore, should have been made along that line and its corresponding conceptual criteria. Under the JEP, the NBSR members were re-classified under levels S-5 to S-8 which are considered managerial staff for purposes of compensation and benefits. This is in essence a promotion, which would disqualify the union members from the benefits which attach exclusively to their former positions. Entitlement to the benefits provided for by law requires prior compliance with the conditions set forth therein. With the promotion of the members of respondent union, they occupied positions which no longer met the requirements imposed by law. Their assumption of these positions removed them from the coverage of the law, ergo, their exemption there from.

ATOK-BIG WEDGE MINING CO., INC., VS. ATOK-BIG WEDGE MUTUAL BENEFIT ASSOCIATION, G.R. NO. L-5276 MARCH 3, 1953 FACTS: Demand was submitted to petitioner by respondent union through its officers for various concession, among which were (a) an increase of P0.50 in wages, (b) commutation of sick and vacation leave if not enjoyed during the year, (c) various privileges, such as free medical care, medicine, and hospitalization, (d) right to a closed shop, check off, etc., (e) no dismissal without prior just cause and with a prior investigation, etc. Some of the demands, were granted by the petitioner, and the other were rejected, and so hearings were held and evidence submitted on the latter. After the hearing the respondent court rendered a decision, the most important provisions of which were those fixing the minimum wage for the laborers at P3.20, declaring that additional compensation representing efficiency bonus should not be included as part of the wage, and making the award effective from September 4, 1950. It is against these portion of the decision that this appeal is taken. On the issue of the wage, it is contended by petitioner that as the respondent court found that the laborer and his family at least need the amount of P2.58 for food, this should be the basis for the determination of his wage, not what he actually spends; that it is not justifiable to fix a wage higher than that provided by Republic Act No. 602; and that respondent union made the demand in accordance with a pernicious practice of claiming more after an original demand is granted. The respondent court found that P2.58 is the minimum amount actually needed by the laborer and his family ISSUE: What will be the basis to determine the minimum wage. RULING: A person's needs increase as his means increase. This is true not only as to food but as to everything else education, clothing, entertainment, etc. The law guarantees the laborer a fair and just wage. The minimum must be fair and just. The "minimum wage" can by no means imply only the actual minimum. Some margin or leeway must be provided, over and above the minimum, to take care of

contingencies such as increase of prices of commodities and desirable improvement in his mode of living.

G.R. NO. 166647

MARCH 31, 2006

PAG-ASA STEEL WORKS, INC., PETITIONER, VS. COURT OF APPEALS, FORMER SIXTH DIVISION AND PAG-ASA STEEL WORKERS UNION (PSWU), RESPONDENT. FACTS: Petitioner Pag-Asa Steel Works, Inc. is a corporation duly organized and existing under Philippine laws and is engaged in the manufacture of steel bars and wire rods. Pag-Asa Steel Workers Union is the duly authorized bargaining agent of the rank-and-file employees of petitioner. On January 8, 1998, the Regional Tripartite Wages and Productivity Board (Wage Board) of the National Capital Region (NCR) issued Wage Order No. NCR06. It provided for an increase of P13.00 per day in the salaries of employees receiving the minimum wage, and a consequent increase in the minimum wage rate to P198.00 per day. Petitioner and the Union negotiated on how to go about the wage adjustments. Petitioner forwarded a letter dated March 10, 1998 to the Union with the list of the salary adjustments of the rank-and-file employees after the implementation of Wage Order No. NCR-06, and the notation that said "adjustments [were] in accordance with the formula [they] have discussed and [were] designed so as no distortion shall result from the implementation of Wage Order No. NCR-06." On September 23, 1999, petitioner and the Union entered into a Collective Bargaining Agreement (CBA), effective July 1, 1999 until July 1, 2004 to grant all workers the increase however if no wage increase given by the Wage Board within six (6) month the management is willing to give increase. On October 14, 1999, Wage Order No. NCR-07 was issued, and on October 26, 1999, its Implementing Rules and Regulations. It provided for a P25.50 per day increase in the salary of employees receiving the minimum wage and increased the minimum wage to P223.50 per day. Petitioner paid the P25.50 per day increase to all of its rank-and-file employees. On July 1, 2000, the rank-and-file employees were granted the second year increase provided in the CBA in the amount of P25.00 per day. On November 1, 2000, Wage Order No. NCR-08 took effect. Thereby setting the minimum wage rate at (P250.00) per day. On July 1, 2000, the rank-and-file employees were granted the second year increase provided in the CBA in the amount of P25.00 per day. Then Union president Lucenio Brin requested petitioner to implement the increase under Wage Order No. NCR-08 in favor of

the companys rank-and-file employees. Petitioner rejected the request, the Union elevated the matter to the National Conciliation and Mediation Board. When the parties failed to settle, they agreed to refer the case to voluntary arbitration. On June 6, 2001, the VA rendered judgment in favor of the company and ordered the case dismissed. The Union filed a petition for review with the CA, they diverted the issue whether or not the increase of (P26.50 ) must be paid in the union members as a matter of practice and parol evidence can be resorted to in proving or explaining the existence of a collateral agreement despite that the employees are receiving wage above the minimum wage and whether wage distortion exist.. On September 23, 2004, the CA rendered judgment in favor of the Union and reversed that of the VA. Petitioner filed a motion for reconsideration which the CA denied for lack of merit on January 11, 2005. ISSUE: Whether or not the company was obliged to grant the wage increase under Wage Order No. NCR-08 as a matter of practice? HELD: Petitioner is not obliged to grant the wage increase under Wage Order No. NCR-08 either by virtue of the CBA, or as a matter of company practice. There is no legal basis to implement the same across-the board. A perusal of the record shows that the lowest paid employee before the implementation of Wage Order #8 is P250.00/day and none was receiving below P223.50 minimum. This could only mean that the union can no longer demand for any wage distortion adjustment