Escolar Documentos
Profissional Documentos
Cultura Documentos
NATIONAL MINES AND ALLIED WORKERS UNION V after obtaining the permission to take up a master's degree,
ARROYO relinquished her permanent status.
SAN ILDEFEONSO COLLEGE, ETC.
- When ARROYO subsequently requested that she continue
299 SCRA 24 teaching on a full-time basis, private respondents in its letter of
DAVIDE JR; November 20, 1998 27 March 1991 refused, citing as reason her failure "to make
use of the privilege granted [her] by the administration
NATURE regarding [her] study leave in the past four semesters." This
Petition for certiorari seeking to set aside an NLRC decision and letter served as notice of ARROYO's termination from
resolution denying a motion for reconsideration employment. No further notice was served. It must be
emphasized that the letter did not indicate that a master's
FACTS degree was necessary for ARROYO to continue her service, as
- National Mines and Allied Workers’ Union is the certified now claimed by the COLLEGE. In fact, apart from its mere
bargaining agent of the rank and file employees of respondent allegation, the COLLEGE failed to prove that a master's degree
College. Petitioner Juliet Arroyo was the president of the San was a pre-requisite for ARROYO's teaching position. ARROYO, a
Ildefonso College Association of Faculty and Personnel, an permanent teacher, could only be dismissed for just cause and
affiliate of NAMAWU. Private respondent Lloren is the directress only after being afforded due process, in light of paragraph (b),
of the College. Article 277 of the Labor Code.
- In February, 1991, ARROYO, a “tenured teacher” who later - Arroyo’s dismissal was substantively and procedurally flawed.
became a part-time teacher, asked that she be allowed to teach It was effected without just cause and due process. Thus, her
on a full-time basis. The COLLEGE denied her request for her termination was void. She is therefore entitled to reinstatement
failure to “make use of the privilege” of her study leave in the to her former position without loss of seniority rights and other
two years she was allowed to do so. The next month, the other privileges, full backwages inclusive of allowances, and other
individual petitioners, who were issued yearly appointment, benefits computed from the date of her actual dismissal to the
were informed of the non-renewal of their respective contracts. date of reinstatement
- In April, 1991, the SICAFP was formalized into a labor union 2. NO
affiliated with NAMAWU. Reasoning
- The petitioners and NAMAWU filed a complaint for illegal - On the issue of whether the individual petitioners were
dismissal, unfair labor practice, forced resignation, harassment, permanent employees, it is the Manual of Regulations for
underpayment of wages, non-payment of service incentive Private Schools, and not the Labor Code, which is applicable.
leave pay, and violation of Waeg Order No. IV-1. They This was settled in University of Sto. Tomas v. NLRC, where we
demanded reinstatement and payment of back wages. explicitly ruled that for a private school teacher to acquire
- The Labor Arbiter held private respondents guilty of illegal permanent status in employment and, therefore, be entitled to
dismissal, unfair labor practice interfering with the organization security of tenure, the following requisites must concur: (1) the
of the labor union. The contracts of employment were not teacher is a full-time teacher; (2) the teacher must have
bilateral agreements, but letters of appointment. When the rendered three (3) consecutive years of service; and (3) such
College opted not to renew the appointments it merely invoked service must have been satisfactory.
the expiration of the period fixed in the appointments without - Eleven of the individual petitioners were full-time teachers
giving any other reason or granting the teachers concerned an during the school year 1990-1991, but only two, namely, Odiste
opportunity to explaint heir side. The probationary employees and Buan had rendered three consecutive years of service.
were not even informed of their performance rating when they There is no showing, however, that the two were on a full-time
were denied renewal of their appointment. The non-renewal basis during those three years and that their services were
was timely made while individual petitioners were in the satisfactory. Evidently, not one of the said teachers can be
process of organizing themselves into a union. These acts of considered to have acquired a permanent status.
the College amounted to union busting. Disposition the decision of the National Labor Relations
- The Office of the Solicitor General moves for the dismissal of Commission in NLRC Case No. RAB-IV-4-3710-91-RI is
the petition except as to ARROYO; that all petitioners except AFFIRMED, subject to the modification that private respondent
ARROYO were legally dismissed. The reason why she failed to San Ildefonso College is DIRECTED to (1) reinstate petitioner
complete her master’s degree could not be solely attributed to JULIETA ARROYO to her former position at the time of her
her. She initially requested a leave of absence, but the dismissal, or to any equivalent position if reinstatement to such
COLLEGE suggested that she teach on a part-time basis position is no longer feasible, without of loss of seniority rights
because it was in need of teachers at that time. Also, her and benefits that may be due her; and (2) pay her back wages
dismissal was without due process. from the date of her actual dismissal to the date of her actual
reinstatement.
ISSUE
1. WON ARROYO was legally dismissed
2. WON the other petitioners were permanent employees
CIELO V NLRC
193 SCRA 410
HELD CRUZ; January 28, 1991
1. NO
Reasoning NATURE
- it is undisputed that Arroyo had been teaching in the COLLEGE Petition for certiorari to review decision of NLRC setting aside
since 1965 and had obtained a permanent status; she became decision of Labor Arbiter for the reinstatement with backwages
a part-time teacher, however, from June 1988 to March 1991. of Zosimo Cielo.
- She did not lose her permanent status when she requested to
teach on a part-time basis. The reason for the request was that FACTS
she wanted to pursue a master's degree. The COLLEGE Henry Lei Trucking hired Zosimo Cielo as a truck driver under 6-
approved the request, and the study leave was extended for month Agreement with stipulations that the term is can be
another year. It would have been unjust and unreasonable to earlier terminated at the option of either party. The Agreement
allow ARROYO to pursue her master's degree, from which the also stipulated that there was no employer-employee
COLLEGE would have also benefited in terms of her higher relationship between the parties and that the nature of the
learning and experience, and at the same time penalize her relationship is merely contractual. Lei asked Cielo to sign an
with the loss of permanent status. It would as well be absurd affidavit of having received full payment of wages, which Cielo
and illogical to maintain that by teaching on a part-time basis refused to sign. A week before the Agreement was supposed to
end, Lei notified Cielo of the termination of his services.
Labor Law 1 A2010 - 143 - Disini
Apparently in the Agreements with the drivers, Lei merely fills respondent Secretary of Labor in rendering his decision,
in the blanks with the corresponding data such as the driver’s revoking petitioner Cone's Alien Employment Permit.
name and address, etc. - The alleged failure to notify petitioners of the appeal filed by
private respondent BCAP was cured when petitioners were
ISSUE allowed to file their Motion for Reconsideration before
WON the Agreement was valid respondent Secretary of Labor.
2. NO
HELD - The Labor Code itself specifically empowers respondent
NO Secretary to make a determination as to the availability of the
Ratio Where from the circumstances it is apparent that the services of a "person in the Philippines who is competent, able
periods were imposed in order to preclude the acquisition of and willing at the time of application to perform the services for
tenurial security by the employee, they should be struck down which an alien is desired." In short, the Department of Labor is
or disregarded for being contrary to public policy, morals,etc. the agency vested with jurisdiction to determine the question of
Reasoning availability of local workers.
- The Agreement is void ab initio for having a purpose contrary - Under Article 40 of the Labor Code, an employer seeking
to public policy. The agreement was a clear attempt to exploit employment of an alien must first obtain an employment permit
the employee and deprive him of the protection of the Labor from the Department of Labor. Petitioner GMC's right to choose
Code by making it appear that the stipulations are governed by whom to employ is, of course, limited by the statutory
the Civil Code as in ordinary private transactions. In reality the requirement of an alien employment permit.
agreement was a contract of employment into which were read - Petitioners will not find solace in the equal protection clause of
the provisions of the Labor Code and the social justice policy of the Constitution. As pointed out by the Solicitor-General, no
the Constitution. That Cielo refused to sign the affidavit was not comparison can be made between petitioner Cone and Mr.
a just cause for his termination as he was only protecting his Norman Black as the latter is "a long time resident of the
interest against unguarded waiver of the benefits due him country," and thus, not subject to the provisions of Article 40 of
under the Labor Code. Said affidavit which stipulated payment the Labor Code which apply only to "non-resident aliens." In any
of wages even suggested that there was indeed an employer- case, the term "non-resident alien" and its obverse "resident
employee relationship. alien," here must be given their technical connotation under our
Disposition NLRC decision set aside. LA decision reinstated. law on immigration.
- Neither can petitioners validly claim that implementation of
respondent Secretary's decision would amount to an
GENERAL MILLING CORPORATION V TORRES impairment of the obligations of contracts. The provisions of the
196 SCRA 215 Labor Code and its Implementing Rules and Regulations
FELICIANO; April 22, 1991 requiring alien employment permits were in existence long
before petitioners entered into their contract of employment. It
NATURE is firmly settled that provisions of applicable laws, especially
Petition for certiorari review. provisions relating to matters affected with public policy, are
deemed written into contracts. Private parties cannot
FACTS constitutionally contract away the otherwise applicable
- DOLE NCR issued Alien Employment Permit in favor of provisions of law.
petitioner Earl Timothy Cone, a United States citizen, as sports - In short, the Department of Labor is the agency vested with
consultant and assistant coach for GMC. GMC and Cone entered jurisdiction to determine the question of availability of local
into a contract of employment whereby the latter undertook to workers. The constitutional validity of legal provisions granting
coach GMC's basketball team. Board of Special Inquiry of the such jurisdiction and authority and requiring proof of non-
Commission on Immigration and Deportation approved availability of local nationals able to carry out the duties of the
petitioner Cone's application for a change of admission status position involved, cannot be seriously questioned.
from temporary visitor to prearranged employee. - Petitioners apparently suggest that the Secretary of Labor is
- On 9 February 1990, petitioner GMC requested renewal of not authorized to take into account the question of whether or
petitioner Cone's alien employment permit. GMC also requested not employment of an alien applicant would "redound to the
that it be allowed to employ Cone as full-fledged coach. The national interest" because Article 40 does not explicitly refer to
DOLE Regional Director, Luna Piezas, granted the request. Alien such assessment. This argument (which seems impliedly to
Employment Permit was issued. concede that the relationship of basketball coaching and the
- Private respondent Basketball Coaches Association of the national interest is tenuous and unreal) is not persuasive. In the
Philippines ("BCAP") appealed the issuance of said alien first place, the second paragraph of Article 40 says: "[t]he
employment permit to the respondent Secretary of Labor who employment permit may be issued to a non-resident alien or to
issued a decision ordering cancellation of petitioner Cone's the applicant employer after a determination of the non-
employment permit on the ground that there was no showing availability of a person in the Philippines who is competent, able
that there is no person in the Philippines who is competent, able and willing at the time of application to perform the services for
and willing to perform the services required nor that the hiring which the alien is desired."
of petitioner Cone would redound to the national interest. - The permissive language employed in the Labor Code
indicates that the authority granted involves the
ISSUES exercise of discretion on the part of the issuing
1. WON Secretary of Labor gravely abused his discretion when authority. In the second place, Article 12 of the Labor Code
he revoked petitioner Cone's alien employment permit sets forth a statement of objectives that the Secretary of Labor
2. WON Section 6 (c), Rule XIV, Book I of the Omnibus Rules should, and indeed must, take into account in exercising his
Implementing the Labor Code is null and void as it is in violation authority and jurisdiction granted by the Labor Code.
of the enabling law as the Labor Code does not empower Disposition Court Resolved to DISMISS the Petition for
respondent Secretary to determine if the employment of an Certiorari for lack of merit.
alien would redound to national interest
MANILA TERMINAL COMPANY INC V CIR(MANILA
HELD
1. NO
TERMINAL RELIEF AND MUTUAL AID ASSN)
- Petitioners have failed to show any grave abuse of discretion 91 PHIL 625
or any act without or in excess of jurisdiction on the part of PARAS; July 16, 1952
Labor Law 1 A2010 - 144 - Disini
to minimize unemployment by forcing employers, in cases
FACTS where more than 8-hour operation is necessary, to utilize
- Manila Terminal Co undertook arrastre service in Port Area, different shifts of laborers or employees working only for eight
under control of US Army. It hired watchmen on 12 hr shifts. hours each.
- Manila Terminal began post-war operation of arrastre service
under control of Bureau of Customs. The watchmen continued
in the service, with salary raise.
A member of the Manila Terminal Relief and Mutual Aid
Association wrote to Dept of Labor requesting that the matter of
overtime pay be investigated, but nothing happened.
- Members of the Association filed demand with Department of AKLAN ELECTRIC COOPERATIVE INC V NLRC
Labor, including overtime pay, but nothing happened. (RETISO)
- Manila Terminal Company instituted system of strict 8 hr
shifts. 323 SCRA 258
- The Association was organized for the first time, and an GONZAGA-REYES; January 25, 2000
amended petition was filed with CIR praying that the petitioner
be ordered to pay its watchmen or police force overtime pay. NATURE
- The petitioner’s police force was consolidated with the Manila Petition for certiorari and prohibition with prayer for writ of
Harbor Police of the Customs Patrol Service, a govt agency preliminary injunction and/or temporary restraining order
under Commissioner of Customs and Secretary of Finance.
- CIR, while dismissing other demands, ordered the petitioner to FACTS
pay its police force regular or base pay and overtime - January 22, 1991 by way of a resolution of the Board of
compensation. With reference to overtime pay after the Directors of AKELCO it allowed the temporary holding of office
watchmen had been integrated into the Manila Harbor Police, at Amon Theater, Kalibo, Aklan upon the recommendation of
the judge ruled that court has no jurisdiction because it affects Atty. Leovigildo Mationg, then project supervisor, on the ground
the Bureau of Customs. that the office at Lezo was dangerous and unsafe.
- In a separate opinion, Judge Lanting ruled: - Majority of the employees including the herein complainants,
> decision should be affirmed in so far as it grants continued to report for work at Lezo, Aklan and were paid of
compensation for overtime on regular days their salaries. The complainants claimed that transfer of office
> as to compensation for work on Sundays and legal holidays, from Lezo, Aklan to Kalibo, Aklan was illegal because it failed to
petitioner should pay compensation that corresponds to the comply with the legal requirements under P.D. 269, thus the
overtime at the regular rate only they remained and continued to work at the Lezo Office until
> watchmen are not entitled to night differential they were illegally locked out therefrom by the respondents.
Despite the illegal lock out however, complainants continued to
ISSUE report daily to the location of the Lezo Office, prepared to
WON overtime pay should be granted to the workers continue in the performance of their regular
duties.Complainants who continuously reported for work at
HELD Lezo, Aklan were not paid their salaries from June 1992 up to
YES March 18, 1993.
- Petitioner stressed that the contract between it and the - LA dismissed the complaints
Association stipulates 12 hrs a day at certain rates including - NLRC reversed and set aside the LA’s decision and held that
overtime, but the record does not bear out these allegations. private respondents are entitled to unpaid wages from June 16,
- In times of acute employment, people go from office to office 1992 to March 18, 1993
to search for work, and the workers here found themselves - Petitioner claims:
required to render 12 hrs a day. True, there was an agreement, > compensable service is best shown by timecards, payslips
but did the workers have freedom to bargain much less insist in and other similar documents and it was an error for public
the observance of the Eight Hour Labor Law? respondent to consider the computation of the claims for wages
- We note that after petitioner instituted 8 hr shifts, no and benefits submitted merely by private respondents as
reduction was made in salaries which its watchmen received substantial evidence.
under the 12 hr agreement.
- Petitioner’s allegation that the Association had acquiesced in ISSUE
the 12 hr shifts for more than 18 mos is not accurate. Only one WON private respondents are entitled to payment of wages for
of the members entered in September 1945. The rest followed the period of June 1992 up to March 18,1993 (what is their
during the next few months. proof)
- The Association can’t be said to have impliedly waived the
right to overtime pay, for the obvious reason that it could not HELD
have expressly waived it. NO
- Estoppel and laches can’t also be invoked against Association. - NLRC based its conclusion on the following: (a) the letter of
First, it is contrary to spirit of the Eight Hour Labor Law. Leyson, Office Manager of AKELCO addressed to AKELCO's
Second, law obligates employer to observe it. Third, employee General Manager, Atty. Mationg, requesting for the payment of
is at a disadvantage as to be reluctant in asserting any claim. private respondents' unpaid wages from June 16, 1992 to March
- The argument that the nullity of the employment contract 18, 1993; (b) the memorandum of said Atty. Mationg in answer
precludes recovery by the Association of overtime pay is to the letter request of Leyson where he made an assurance
untenable. The employer may not be heard to plead its own that he will recommend such request; (c) the private
neglect as exemption or defense. respondents' own computation of their unpaid wages.
- Also, Commonwealth Act 444 expressly provides for payment - We find that the foregoing does not constitute substantial
of extra compensation in cases where overtime services are evidence to support the conclusion that private respondents are
required. entitled to the payment of wages from June 16, 1992 to March
- The point that payment of overtime pay may lead to ruin of 18, 1993.
the petitioner can’t be accepted. It is significant that not all - Substantial evidence is that amount of relevant
watchmen should receive back overtime pay for the whole evidence which a reasonable mind might accept as
period, since the members entered the firm in different times. adequate to justify a conclusion. These evidences relied
- The Eight-Hour Labor Law was designed not only to safeguard upon by public respondent did not establish the fact that
the health and welfare of the laborer or employee, but in a way
Labor Law 1 A2010 - 145 - Disini
private respondents actually rendered services in the Kalibo - She prayed for the Commission to issue an order directing
office during the stated period. respondents Conchita Ayalde and Antero Maghari as her
a. Letter of Pedrito Leyson to Atty. Mationg administrator to pay the premium contributions of the deceased
> Pedrito Leyson is one of the herein private respondents who Ignacio Tana, Sr. and report his name for SSS coverage; and for
are claiming for unpaid wages and we find his actuation of the SSS to grant petitioner Margarita Tana the funeral and
requesting in behalf of the other private respondents for the pension benefits due her.
payment of their backwages to be biased and self-serving, thus - The SSS revealed that neither Hda. B-70 nor respondents
not credible. Ayalde and Maghari were registered members-employers of the
> On the other hand, petitioner was able to show that private SSS, and consequently, Ignacio Tana, Sr. was never registered
respondents did not render services during the stated period. as a member-employee. Likewise, SSS records reflected that
Petitioner's evidences show that on January 22, 1992, there was no way of verifying whether the alleged premium
petitioner's Board of Directors passed a resolution temporarily contributions were remitted since the respondents were not
transferring the Office from Lezo, Aklan to Amon Theater, registered members-employers.
Kalibo, Aklan .With the transfer of petitioner's business office - Respondent Antero Maghari raised the defense that he was a
from its former office, Lezo, to Kalibo, Aklan, its equipments, mere employee who was hired as an overseer of Hda. B-70
records and facilities were also removed from Lezo and brought sometime during crop years 1964-65 to 1971-72, and as such,
to the Kalibo office where petitioner's official business was his job was limited to those defined for him by the employer
being conducted; thus private respondents' allegations that which never involved matters relating to the SSS.
they continued to report for work at Lezo to support their claim - For her part, respondent Ayalde belied the allegation that
for wages has no basis. Ignacio Tana, Sr. was her employee, admitting only that he was
b. Response of Atty. Mationg to the letter-request of hired intermittently as an independent contractor to plow,
office manager Leyson harrow, or burrow Hda. No. Audit B-15-M. Tana used his own
> Mationg's offer to recommend the payment of private carabao and other implements, and he followed his own
respondents' wages is hardly approval of their claim for wages. schedule of work hours. Ayalde further alleged that she never
It is just an undertaking to recommend payment. Moreover, the exercised control over the manner by which Tana performed his
offer is conditional. It is subject to the condition that petitioner's work as an independent contractor. Moreover, Ayalde averred
Board of Directors will give its approval and that funds were that way back in 1971, the University of the Philippines had
available. Mationg's reply to Leyson's letter for payment of already terminated the lease over Hda. B-15-M and she had
wages did not constitute approval or assurance of payment. The since surrendered possession thereof to the University of the
fact is that, the Board of Directors of petitioner rejected private Philippines. Consequently, Ignacio Tana, Sr. was no longer
respondents demand for payment (Board Resolution No. 496, s. hired to work thereon starting in crop year 1971-72, while he
1993). was never contracted to work in Hda. B-70.
c. the private respondents' own computation of their - SSS ruled in favor of Tana. CA ruled in favor of Ayalde.
unpaid wages
> We hold that public respondent erred in merely relying on the ISSUE
computations of compensable services submitted by private WON an agricultural laborer who was hired on "pakyaw" basis
respondents. There must be competent proof such as time can be considered an employee entitled to compulsory
cards or office records to show that they actually rendered coverage and corresponding benefits under the Social Security
compensable service during the stated period to entitle them to Law
wages. It has been established that the petitioner's business
office was transferred to Kalibo and all its equipments, records HELD
and facilities were transferred thereat and that it conducted its - The mandatory coverage under the SSS Law (Republic Act No.
official business in Kalibo during the period in question. It was 1161, as amended by PD 1202 and PD 1636) is premised on the
incumbent upon private respondents to prove that they indeed existence of an employer-employee relationship, and Section
rendered services for petitioner, which they failed to do. 8(d) defines an "employee" as "any person who performs
services for an employer in which either or both mental and
physical efforts are used and who receives compensation for
SSS V CA (AYALDE)
such services where there is an employer-employee
348 SCRA 1 relationship." The essential elements of an employer-employee
YNARES-SANTIAGO; December 14, 2000 relationship are: (a) the selection and engagement of the
employee; (b) the payment of wages; (c) the power of
NATURE dismissal; and (d) the power of control with regard to the means
Petition for review on certiorari and methods by which the work is to be accomplished, with the
power of control being the most determinative factor.
FACTS - There is no question that Tana was selected and his services
- In a petition before the Social Security Commission, Margarita engaged by either Ayalde herself, or by Antero Maghari, her
Tana, widow of the late Ignacio Tana, Sr., alleged that her overseer. Corollarily, they also held the prerogative of
husband was, before his demise, an employee of Conchita dismissing or terminating Tana's employment. The dispute is in
Ayalde as a farmhand in the two (2) sugarcane plantations she the question of payment of wages. Claimant Margarita Tana
owned in Pontevedra, La Carlota City (Hda. B-70) and leased and her corroborating witnesses testified that her husband was
from the University of the Philippines (Hda. B-15-M). She further paid daily wages "per quincena" as well as on "pakyaw" basis.
alleged that Tana worked continuously six (6) days a week, four Ayalde, on the other hand, insists that Tana was paid solely on
(4) weeks a month, and for twelve (12) months every year "pakyaw" basis. To support her claim, she presented payrolls
between January 1961 to April 1979. For his labor, Tana covering the period January of 1974 to January of 1976 and
allegedly received a regular salary according to the minimum November of 1978 to May of 1979.
wage prevailing at the time. - A careful perusal of the records readily show that the exhibits
- She further alleged that throughout the given period, social offered are not complete, and are but a mere sampling of
security contributions, as well as medicare and employees payrolls. While the names of the supposed laborers appear
compensation premiums were deducted from Tana's wages. It therein, their signatures are nowhere to be found. And while
was only after his death that Margarita discovered that Tana they cover the years 1975, 1976 and portions of 1978 and
was never reported for coverage, nor were his 1979, they do not cover the 18-year period during which Tana
contributions/premiums remitted to the SSS. Consequently, she was supposed to have worked in Ayalde's plantations. Also an
was deprived of the burial grant and pension benefits accruing admitted fact is that these exhibits only cover Hda. B70, Ayalde
to the heirs of Tana had he been reported for coverage.
Labor Law 1 A2010 - 146 - Disini
having averred that all her records and payrolls for the other Disposition Decision of CA reversed. Decision of SSS
plantation (Hda. B-15-M) were either destroyed or lost. reinstated.
- To our mind, these documents are not only sadly lacking, they
are also unworthy of credence. The fact that Tana's name does
not appear in the payrolls for the years 1975, 1976 and part of
1978 and 1979, is no proof that he did not work in Hda. B70 in
the years 1961 to 1974, and the rest of 1978 and 1979. The
veracity of the alleged documents as payrolls are doubtful
considering that the laborers named therein never affixed their
signatures to show that they actually received the amounts
indicated corresponding to their names. Moreover, no record
was shown pertaining to Hda. B-15-M, where Tana was
supposed to have worked. Even Ayalde admitted that she hired MANTRADE/FMMC DIVISION EMPLOYEES AND
Tana as "arador" and sometimes as laborer during milling in WORKERS UNION V BACUNGAN
Hda. B-15-M.[16] In light of her incomplete documentary
evidence, Ayalde's denial that Tana was her employee in Hda. 144 SCRA 510
B-70 or Hda. B-15-M must fail. In contrast to Ayalde's evidence, FERIA; September 30, 1986
or lack thereof, is Margarita Tana's positive testimony,
corroborated by two (2) other witnesses. NATURE
- The witnesses did not waver in their assertion that while Tana Petition for Certiorari and Mandamus
was hired by Ayalde as an "arador" on "pakyaw" basis, he was
also paid a daily wage which Ayalde's overseer disbursed every FACTS
fifteen (15) days. It is also undisputed that they were made to - Petitioner employees question the validity of the pertinent
acknowledge receipt of their wages by signing on sheets of section of the Rules and Regulations Implementing the Labor
ruled paper, which are different from those presented by Ayalde Code as amended on which respondent arbitrator Froilan M.
as documentary evidence. In fine, we find that the testimonies Bacungan based his decision ruling that Mantrade Devt Corp is
of Margarita Tana and the two other witnesses prevail over the not under legal obligation to pay holiday pay (as provided for in
incomplete and inconsistent documentary evidence of Ayalde. Article 94 of the Labor Code) to its monthly paid employees who
- No particular form of evidence is required to prove the are uniformly paid by the month, irrespective of the number of
existence of an employer-employee relationship. Any working days therein, with a salary of not less than the
competent and relevant evidence to prove the relationship may statutory or established minimum wage, and that this rule is
be admitted. For, if only documentary evidence would be applicable not only as of March 2, 1976 but as of November 1,
required to show that relationship, no scheming employer 1974.
would ever be brought before the bar of justice, as no employer - Respondent corporation contends, among others that
would wish to come out with any trace of the illegality he has petitioner is barred from pursuing the present action in view of
authored considering that it should take much weightier proof (1) Article 263 of the Labor Code; (2) the pertinent provision of
to invalidate a written instrument. the CBA between petitioner and respondent corporation; and
- The testimonial evidence of the claimant and her witnesses (3) Article 2044 of the Civil Code; that the special civil action of
constitute positive and credible evidence of the existence of an certiorari does not lie because respondent arbitrator is not an
employer-employee relationship between Tana and Ayalde. As "officer exercising judicial functions" within the contemplation
the employer, the latter is duty-bound to keep faithful and of Rule 65, Section 1, of the Rules of Court; that the instant
complete records of her business affairs, not the least of which petition raises an error of judgment on the part of respondent
would be the salaries of the workers. arbitrator and not an error of jurisdiction; that it prays for the
- The assertion that Tana is an independent contractor is annulment of certain rules and regulations issued by the DOLE,
specious because (1) while Tana was sometimes hired as an not for the annulment of the voluntary arbitration proceedings;
"arador" or plower for intermittent periods, he was hired to do and that appeal by certiorari under Section 29 of the Arbitration
other tasks in Ayalde's plantations. It is indubitable, as testified Law, Republic Act No. 876, is not applicable to the case at bar
by the witnesses, that Tana worked continuously for Ayalde, not because arbitration in labor disputes is expressly excluded by
only as "arador" on "pakyaw" basis, but as a regular farmhand, Section 3 of said law.
doing backbreaking jobs for Ayalde's business. There is no
shred of evidence to show that Tana was only a seasonal ISSUES
worker, much less a migrant worker. All witnesses, including 1. WON decisions of arbitrators are subject to judicial review
Ayalde herself, testified that Tana and his family resided in the 2. WON Mantrade employees are entitled to holiday pay
plantation. If he was a mere "pakyaw" worker or independent 3. WON mandamus lies in the case at bar
contractor, then there would be no reason for Ayalde to allow
them to live inside her property for free. The only logical HELD
explanation is that he was working for most part of the year 1. YES
exclusively for Ayalde, in return for which the latter gratuitously - Oceanic Bic Division (FFW) vs. Romero (July 16, 1984): The
allowed Tana and his family to reside in her property; and, (2) decisions of voluntary arbitrators must be given the highest
Ayalde made much ado of her claim that Tana could not be her respect and as a general rule must be accorded a certain
employee because she exercised no control over his work hours measure of finality. It is not correct, however, that this respect
and method of performing his task as "arador." A closer scrutiny precludes the exercise of judicial review over their decisions.
of the records, however, reveals that while Ayalde herself may Article 262 of the Labor Code making voluntary arbitration
not have directly imposed on Tana the manner and methods to awards final, inappealable and executory, except where the
follow in performing his tasks, she did exercise control through money claims exceed P100,000.00 or 40% of the paid-up
her overseer. capital of the employer or where there is abuse of discretion or
- Under the circumstances, the relationship between Ayalde and gross incompetence refers to appeals to the National Labor
Tana has more of the attributes of employer-employee than Relations Commission and not to judicial review. Judicial review
that of an independent contractor hired to perform a specific still lies where want of jurisdiction, grave abuse of discretion,
project. violation of due process, denial of substantial justice, or
- Lastly, as a farm laborer who has worked exclusively for erroneous interpretation of the Law are brought to SC’s
Ayalde for eighteen (18) years, Tana should be entitled to attention.
compulsory coverage under the Social Security Law, whether 2. YES
his service was continuous or broken.
Labor Law 1 A2010 - 147 - Disini
- Under Art. 94 of the Labor Code, monthly salaried employees - On November 15, 1996, Labor Arbiter Felipe P. Pati ordered
are not among those excluded from receiving holiday pay. But Ace Nav and Conning to pay jointly and severally Orlando his
they appear to be excluded under Sec. 2, Rule IV, Book III of the vacation leave pay of US$450.00. The claim for tips of Orlando
Rules and Regulations implementing said provision. was dismissed for lack of merit.
- Insular Bank of Asia and America Employees' Union (IBAAEU) - Orlando appealed to the NLRC on February 3, 1997. In a
vs. Inciong (October 24, 1984): Section 2, Rule IV, Book III of the decision penned by Commissioner Vicente S.E. Veloso and
implementing rules and Policy Instruction No. 9, issued by the concurred in by Commissioner Alberto R. Quimpo the NLRC
then Secretary of Labor are null and void since in the guise of ordered Ace Nav and Conning to pay the unpaid tips of Orlando
clarifying the Labor Code's provisions on holiday pay, they in which amounted to US$36,000.00 in addition to his vacation
effect amended them by enlarging the scope of their exclusion. leave pay.
- Chartered Bank Employees Association vs. Ople (August 28, - Ace Nav and Conning filed a motion for reconsideration on
1985): An administrative interpretation which diminishes the February 2, 1998 which was denied on May 20, 1999.
benefits of labor more than what the statute delimits or - On July 2, 1999, Ace Nav and Conning filed a petition for
withholds is obviously ultra vires. certiorari before the Court of Appeals
3. YES - On July 28, 1999, the Court of Appeals promulgated a three-
- While it is true that mandamus is not proper to enforce a page resolution and concurred in by Associate Justices Eubulo
contractual obligation, the remedy being an action for specific G. Verzola and Elvi John S. Asuncion dismissing the petition.
performance, in view of the above cited subsequent decisions of - Their motion for reconsideration filed was denied.
this Court clearly defining the legal duty to grant holiday pay to Petitioners:
monthly salaried employees, mandamus is an appropriate > Petitioners argued that the Court of Appeals erred in rigidly
equitable remedy. and technically applying Section 13, Rule 1310- Proof of
Disposition Questioned decision of respondent arbitrator is personal service shall consist of a written admission of the
SET ASIDE and respondent corporation is ordered to GRANT party served, or the official return of the server, or the affidavit
holiday pay to its monthly salaried employees. No costs. of the party serving, containing a full statement of the date,
place and manner of service. If the service is by ordinary mail,
proof thereof shall consist of an affidavit of the person mailing
STATES MARINE CORP V CEBU SEAMEN’S ASSN
or facts showing compliance with section 7 of this Rule. If
[PAGE 126] service is made by registered mail, proof shall be made by such
affidavit and the registry receipt issued by the mailing office.
MILLARES V NLRC The registry return card shall be filed immediately upon its
[PAGE 79] receipt, or in lieu thereof of the unclaimed letter together with
the certified or sworn copy of the notice given by the
postmaster to the addressee.
TIPS > Section 1, Rule 6511 Section 1.-- When any tribunal, board or
officer exercising judicial or quasi judicial functions has acted
without or in excess of its or his jurisdiction, or with grave
ACE NAVIGATION CO INC V CA (NLRC, ALONSAGAY) abuse of discretion amounting to lack or excess of jurisdiction,
338 SCRA 380 and there is no appeal, or any plain, speedy, and adequate
PUNO; August 15, 2000 remedy in the ordinary course of law, a person aggrieved
thereby may file a verified petition in the proper court, alleging
the facts with certainty and praying that judgment be rendered
annulling or modifying the proceedings of such tribunal, board,
NATURE officer, and granting such incidental reliefs as law and justice
Petitioner for review of the resolutions that dismissed the may require.
petition for certiorari (Ang kulit no? na-dismiss na nga yung > They also contend that the respondent court erred in ruling
certiorari eh pume-petition pa!) that they are the ones liable to pay tips to Orlando. They point
out that if tips will be considered as part of the salary of
FACTS Orlando, it will make him the highest paid employee on M/V
- In June 1994, Ace Navigation Co., Inc. recruited private "Orient Express." It will create an unfavorable precedent
respondent Orlando Alonsagay to work as a bartender on board detrimental to the future recruitment, hiring and deployment of
the vessel M/V "Orient Express" owned by Conning Shipping Filipino overseas workers specially in service oriented
Ltd. Under their POEA approved contract of employment, businesses. It will also be a case of double compensation that
Orlando shall receive a monthly basic salary of four hundred will unjustly enrich Orlando at the expense of petitioners.
fifty U.S. dollars (U.S. $450.00), flat rate, including overtime pay > They also stress that Orlando never complained that they
for 12 hours of work daily plus tips of two U.S. dollars (U.S. should pay him the said tips.
$2.00) per passenger per day. He, was also entitled to 2.5 days - Respondent filed a two-page comment to the petition adopting
of vacation leave with pay each month. The contract was to last the resolution of the Court of Appeals dated July 28, 1999.
for one (1) year.
- Petitioners alleged that on June 13, 1994, Orlando was ISSUES
deployed and boarded M/V "Orient Express" at the seaport of 1. WON the CA erred in rigidly applying Sec 1310
Hong Kong. 2. WON the CA erred in ruling that they are the ones liable to
- After the expiration of the contract, Orlando returned to the pay tips to petitioner (Orlando)
Philippines and demanded from Ace Nav his vacation leave pay.
- Ace Nav did not pay him immediately. It told him that he HELD
should have been paid prior to his disembarkation and 1. YES
repatriation to the Philippines. Ratio Rules of procedure are used to help secure and not
- Conning did not remit any amount for his vacation leave pay. override substantial justice. [Heirs of Francisco Guballa Sr. vs.
Ace Nav promised to verify the matter and asked Orlando to Court of Appeals] Even the Rules of Court mandates a liberal
return after a few days. Orlando never returned. construction in order to promote their objective of securing a
- On November 25, 1995, Orlando filed a complaint before the just, speedy and inexpensive disposition of every action and
labor arbiter for vacation leave pay of four hundred fifty U.S. proceeding. Since rules of procedure are mere tools designed to
dollars and unpaid tips amounting to thirty six, thousand U.S. facilitate the attainment of justice, their strict and rigid
dollars application which would result in technicalities that tend to
frustrate rather than promote substantial justice must always
Labor Law 1 A2010 - 148 - Disini
be avoided. Thus, the dismissal of an appeal on purely technical
ground is frowned upon especially if it will result to unfairness.
Reasoning CASH WAGE/COMMISSIONS
- We apply these sound rules in the case at bar. Petitioners'
petition for certiorari before the Court of Appeals contained the SONGCO V NLRC (AGUAS, F.E. ZUELLIG INC)
certified true copy of the NLRC's decision dated November 26, 183 SCRA 610
1997. Its order dated May 2, 199917 and the sworn certification
of non-forum shopping. Petitioners also explained that their MEDIALDEA; March 23, 1990
counsel executed an affidavit of proof of service and
explanation in the afternoon of July 1, 1999. However, he forgot FACTS
to attach it when he filed their petition the following day - Private respondent F.E. Zuellig (M), Inc., filed with the
because of the volume and pressure of work and lack of office Department of Labor an application seeking clearance to
personnel. However, the Registry which is the proof of mailing terminate the services of petitioners Jose Songco, Romeo
to Orlando's counsel, issued by the Central Post Office was Cipres, and Amancio Manuel allegedly on the ground of
attached on the original petition they filed with the respondent retrenchment due to financial losses.
court. It was also stamped by the NLRC which is proof of receipt - This application was seasonably opposed by petitioners
of the petition by the latter. The affidavit of service, which was alleging that the company is not suffering from any losses. They
originally omitted, was attached on their motion for alleged further that they are being dismissed because of their
reconsideration. Significantly, it was dated July 1, 1999. membership in the union.
- the subsequent filing of the affidavit of service may be - At the last hearing of the case, however, petitioners
considered as substantial compliance with the rules. manifested that they are no longer contesting their dismissal.
2. NO The parties then agreed that the sole issue to be resolved is the
Reasoning basis of the separation pay due to petitioners.
- The word “tip” has several meanings. It is more frequently - Petitioners, who were in the sales force of Zuellig received
used to indicate additional compensation, and in this sense "tip" monthly salaries of at least P40,000. In addition, they received
is defined as meaning a gratuity; a gift; a present; a fee; money commissions for every sale they made.
given, as to a servant to secure better or more prompt service. - The CBA entered into between Zuellig and F.E. Zuellig
- Tipping is done to get the attention and secure the immediate Employees Association, of which petitioners are members,
services of a waiter, porter or others for their services. Since a contains the following provision:
tip is considered a pure gift out of benevolence or friendship, it ARTICLE XIV — Retirement Gratuity
can not be demanded from the customer. Whether or not tips Section l(a)-Any employee, who is separated from
will be given is dependent on the will and generosity of the employment due to old age, sickness, death or permanent
giver. Although a customer may give a tip as a consideration for lay-off not due to the fault of said employee shall receive
services rendered, its value still depends on the giver. They are from the company a retirement gratuity in an amount
given in addition to the compensation by the employer. A equivalent to one (1) month's salary per year of service.
gratuity given by an employer in order to inspire the employee One month of salary as used in this paragraph shall be
to exert more effort in his work is more appropriately called a deemed equivalent to the salary at date of retirement;
bonus. years of service shall be deemed equivalent to total service
- The contract of employment between petitioners and Orlando credits, a fraction of at least six months being considered
is categorical that the monthly salary of Orlando is US$450.00 one year, including probationary employment.
flat rate. This already included his overtime pay which is - On the other hand, Article 284 of the Labor Code then
integrated in his 12 hours of work. The words "plus tips of prevailing provides:
US$2.00 per passenger per day" were written at the line for Art. 284. Reduction of personnel. — The termination of
overtime. Since payment for overtime was included in the employment of any employee due to the installation of
monthly salary of Orlando, the supposed tips mentioned in the labor saving-devices, redundancy, retrenchment to prevent
contract should be deemed included thereat. losses, and other similar causes, shall entitle the employee
- The actuations of Orlando during his employment also show affected thereby to separation pay. In case of termination
that he was aware his monthly salary is only US$450.00, no due to the installation of labor-saving devices or
more no less. He did not raise any complaint about the non- redundancy, the separation pay shall be equivalent to one
payment of his tips during the entire duration of his (1) month pay or to at least one (1) month pay for every
employment. After the expiration of his contract, he demanded year of service, whichever is higher. In case of
payment only of his vacation leave pay. He did not immediately retrenchment to prevent losses and other similar causes,
seek the payment of tips. He only asked for the payment of tips the separation pay shall be equivalent to one (1) month
when he filed this case before the labor arbiter. This shows that pay or at least one-half (1/2) month pay for every year of
the alleged non-payment of tips was a mere afterthought to service, whichever is higher. A fraction of at least six (6)
bloat up his claim. The records of the case do not show that months shall be considered one (1) whole year.
Orlando was deprived of any monthly salary. It will now be - In addition, Sections 9(b) and 10, Rule 1, Book VI of the Rules
unjust to impose a burden on the employer who performed the Implementing the Labor Code provide:
contract in good faith. Sec. 9(b). Where the termination of employment is due to
- Furthermore, it is presumed that the parties were aware of the retrechment initiated by the employer to prevent losses or
plain, ordinary and common meaning of the word "tip." As a other similar causes, or where the employee suffers from a
bartender, Orlando can not feign ignorance on the practice of disease and his continued employment is prohibited by law
tipping and that tips are normally paid by customers and not by or is prejudicial to his health or to the health of his co-
the employer. employees, the employee shall be entitled to termination
- However, Orlando should be paid his vacation leave pay. pay equivalent at least to his one month salary, or to one-
Petitioners denied this liability by raising the defense that the half month pay for every year of service, whichever is
usual practice is that vacation leave pay is given before higher, a fraction of at least six (6) months being
repatriation. But as the labor arbiter correctly observed, considered as one whole year.
petitioners did not present any evidence to prove that they Sec. 10. Basis of termination pay. — The computation of
already paid the amount. The burden of proving payment was the termination pay of an employee as provided herein
not discharged by the petitioners. shall be based on his latest salary rate, unless the same
Disposition Reversed and set aside was reduced by the employer to defeat the intention of the
Code, in which case the basis of computation shall be the
rate before its deduction. (Emphasis supplied)
Labor Law 1 A2010 - 149 - Disini
- The Labor Arbiter rendered a decision ordering the respondent remuneration services rendered which contributed to the
to pay the complainants separation pay equivalent to their one- increase of income of Zuellig.
month salary (exclusive of commissions, allowances, etc.) for - Commission is the recompense, compensation or reward of an
every year of service that they have worked with the company. agent, salesman, executor, trustees, receiver, factor, broker or
- The appeal by petitioners to the National Labor Relations bailee, when the same is calculated as a percentage on the
Commission was dismissed for lack of merit. amount of his transactions or on the profit to the principal. The
- Petitioners' Arguments nature of the work of a salesman and the reason for such type
> In arriving at the correct and legal amount of separation pay of remuneration for services rendered demonstrate clearly that
due them, whether under the Labor Code or the CBA, their basic commission are part of petitioners' wage or salary.
salary, earned sales commissions and allowances should be - The Court took judicial notice of the fact that some salesmen
added together. They cited Article 97(f) of the Labor Code which do not receive any basic salary but depend on commissions and
includes commission as part on one's salary, to wit; allowances or commissions alone, are part of petitioners' wage
(f) 'Wage' paid to any employee shall mean the or salary. Also, that some salesman do not received any basic
remuneration or earnings, however designated, capable of salary but depend on commissions and allowances or
being expressed in terms of money, whether fixed or commissions alone, although an employer-employee
ascertained on a time, task, piece, or commission basis, or relationship exists.
other method of calculating the same, which is payable by - Bearing in mind the preceding discussions, if the opposite view
an employer to an employee under a written or unwritten is adopted that commissions, do not form part of wage or
contract of employment for work done or to be done, or for salary, then, in effect, this kind of salesmen do not receive any
services rendered or to be rendered, and includes the fair salary and therefore, not entitled to separation pay in the event
and reasonable value, as determined by the Secretary of of discharge from employment. This narrow interpretation is not
Labor, of board, lodging, or other facilities customarily in accord with the liberal spirit of our labor laws and considering
furnished by the employer to the employee. 'Fair the purpose of separation pay which is, to alleviate the
reasonable value' shall not include any profit to the difficulties which confront a dismissed employee thrown the the
employer or to any person affiliated with the employer. streets to face the harsh necessities of life.
- Respondents’ Comments - Additionally, in Soriano v. NLRC, et al., supra, in resolving the
> If it were really the intention of the Labor Code as well as its issue of the salary base that should be used in computing the
implementing rules to include commission in the computation of separation pay, the Court held that:
separation pay, it could have explicitly said so in clear and The commissions also claimed by petitioner ('override
unequivocal terms. Furthermore, in the definition of the term commission' plus 'net deposit incentive') are not properly
"wage", "commission" is used only as one of the features or includible in such base figure since such commissions must
designations attached to the word remuneration or earnings. be earned by actual market transactions attributable to
petitioner.
ISSUE - Applying this by analogy, since the commissions in the present
WON earned sales commissions and allowances should be case were earned by actual market transactions attributable to
included in the monthly salary of petitioners for the purpose of petitioners, these should be included in their separation pay. In
computation of their separation pa the computation thereof, what should be taken into account is
the average commissions earned during their last year of
HELD employment.
YES - In carrying out and interpreting the Labor Code's provisions
- Article 97(f) by itself is explicit that commission is included in and its implementing regulations, the workingman's welfare
the definition of the term "wage". It has been repeatedly should be the primordial and paramount consideration. This
declared by the courts that where the law speaks in clear and kind of interpretation gives meaning and substance to the
categorical language, there is no room for interpretation or liberal and compassionate spirit of the law as provided for in
construction; there is only room for application. Article 4 of the Labor Code which states that "all doubts in the
- The ambiguity between Article 97(f), which defines the term implementation and interpretation of the provisions of the Labor
'wage' and Article XIV of the Collective Bargaining Agreement, Code including its implementing rules and regulations shall be
Article 284 of the Labor Code and Sections 9(b) and 10 of the resolved in favor of labor", and Article 1702 of the Civil Code
Implementing Rules, which mention the terms "pay" and which provides that "in case of doubt, all labor legislation and
"salary", is more apparent than real. all labor contracts shall be construed in favor of the safety and
- Broadly, the word "salary" means a recompense or decent living for the laborer.
consideration made to a person for his pains or industry in Disposition The petition was granted.
another man's business. Whether it be derived from "salarium,"
or more fancifully from "sal," the pay of the Roman soldier, it
IRAN V NLRC (RETRALBA)
carries with it the fundamental idea of compensation for
services rendered. - 106 SCRA 444
- Indeed, there is eminent authority for holding that the words ROMERO; April 22, 1998
"wages" and "salary" are in essence synonymous. "Salary," the
etymology of which is the Latin word "salarium," is often used FACTS
interchangeably with "wage", the etymology of which is the - Antonio Iran is engaged in softdrinks merchandising and
Middle English word "wagen". Both words generally refer to one distribution in Mandaue City, Cebu, employing truck drivers who
and the same meaning, that is, a reward or recompense for double as salesmen, truck helpers, and non-field personnel in
services performed. pursuit thereof. He hired private respondents as
- Likewise, "pay" is the synonym of "wages" and "salary". drivers/salesmen and truck helpers. Drivers/salesmen drove
Inasmuch as the words "wages", "pay" and "salary" have the petitioner’s delivery trucks and promoted, sold and delivered
same meaning, and commission is included in the definition of softdrinks to various outlets in Mandaue City. The truck helpers
"wage", the logical conclusion, therefore, is, in the computation assisted in the delivery of softdrinks to the different outlets
of the separation pay of petitioners, their salary base should covered by the driver/salesmen.
include also their earned sales commissions. - As part of their compensation, the driver/salesmen and truck
- Granting, in gratia argumenti, that the commissions were in helpers of petitioner received commissions per case of
the form of incentives or encouragement, so that the petitioners softdrinks sold.
would be inspired to put a little more industry on the jobs - Sometime in June 1991, Iran discovered cash shortages and
particularly assigned to them, still these commissions are direct irregularities allegedly committed by private respondents.
Pending the investigation of irregularities and settlement of the
Labor Law 1 A2010 - 150 - Disini
cash shortages, Iran required private respondents to report for 2. YES
work everyday. They were not allowed, however, to go on their - In terminating employees, the employer must furnish the
respective routes. A few days thereafter, despite aforesaid worker with two written notices before the latter can be legally
order, private respondents stopped reporting for work, terminated: (a) a notice which apprises the employee of the
prompting Iran to conclude that the former had abandoned particular acts or omissions for which his dismissal is sought,
their employment. Consequently, Iran terminated their services. and (b) the subsequent notice which informs the employee of
He also filed a complaint for estafa against them. the employer’s decision to dismiss him.
- Private respondents filed complaints against Iran for illegal - First notice informing the employee that his dismissal is being
dismissal, illegal deduction, underpayment of wages, premium sought is absent in the present case. This makes the
pay for holiday and rest day, holiday pay, service incentive termination of private respondents defective, for which Iran
leave pay, 13th month pay, allowances, separation pay, must be sanctioned for his non-compliance with the
recovery of cash bond, damages and attorney’s fees. requirements of or for failure to observe due process.
- Said complaints were consolidated, and assigned to Labor - Section 2 of Book V, Rule XIV of the Omnibus Rules
Arbiter Ernesto F. Carreon. He found that Iran had validly Implementing the Labor Code requires that in cases of
terminated private respondents, there being just cause for the abandonment of work, notice should be sent to the worker’s
latter’s dismissal. Nevertheless, he also ruled that Iran had not last known address. If indeed private respondents had
complied with minimum wage requirements in compensating abandoned their jobs, it was incumbent upon Iran to comply
private respondents, and had failed to pay private respondents with this requirement. This, Iran failed to do, entitling
their 13th month pay. respondents to nominal damages in the amount of P5,000.00
- On appeal, NLRC affirmed the validity of private respondent’s each, in accord with recent jurisprudence, to vindicate or
dismissal, but found that said dismissal did not comply with the recognize their right to procedural due process which was
procedural requirements for dismissing employees. MR denied. violated by Iran.
3. YES
ISSUES - Iran is entitled to credit only the amounts paid for the
1. WON commissions are included in determining compliance particular year covered by said vouchers.
with the minimum wage requirement - While it is true that the vouchers evidencing payments of 13th
2. WON Iran is guilty of procedural lapses in terminating private month pay were submitted only on appeal, it would have been
respondents more in keeping with the directive of Article 221 of the Labor
If yes, WON P1,000.00 indemnity fee to each of the private Code for the NLRC to have taken the same into account.
respondents is proper - In labor cases, technical rules of evidence are not binding.
3. WON the advance amount received by private respondents Labor officials should use every and all reasonable means to
should be credited as part of their 13th month pay ascertain the facts in each case speedily and objectively,
without regard to technicalities of law or procedure.
HELD - The intent of P.D. No. 851 is the granting of additional income
1. YES in the form of 13th month pay to employees not as yet receiving
- The nature of the work of a salesman and the reason for such the same and not that a double burden should be imposed on
type of remuneration for services rendered demonstrate clearly the employer who is already paying his employees a 13 th month
that commissions are part of a salesman’s wage or salary. pay or its equivalent. An employer who pays less than 1/12th of
- Article 97(f), LC explicitly includes commissions as part of the employees basic salary as their 13th month pay is only
wages. While commissions are, indeed, incentives or forms of required to pay the difference.
encouragement to inspire employees to put a little more Disposition NLRC decision modified. Case remanded to the
industry on the jobs particularly assigned to them, still these Labor Arbiter for a recomputation of the alleged deficiencies. No
commissions are direct remunerations for services rendered. costs.
- Commissions have been defined as the recompense,
compensation or reward of an agent, salesman, executor,
trustee, receiver, factor, broker or bailee, when the same is WAGES AND SALARY
calculated as a percentage on the amount of his transactions or
on the profit to the principal. GAA V CA (EUROPHIL INDUSTRIES CORP.)
- SC has taken judicial notice of the fact that some salesmen do 140 SCRA 304 (85)
not receive any basic salary but depend entirely on
commissions and allowances or commissions alone, although an PATAJO; December 31, 1985
employer-employee relationship exists. Undoubtedly, this salary
structure is intended for the benefit of the corporation NATURE
establishing such, on the apparent assumption that thereby its A petition for review on certiorari of the decision of the Court of
salesmen would be moved to greater enterprise and diligence Appeals affirming the decision of the Court of First Instance of
and close more sales in the expectation of increasing their sales Manila.
commissions. This, however, does not detract from the
character of such commissions as part of the salary or wage FACTS
paid to each of its salesmen for rendering services to the - Respondent Europhil Industries Corporation was formerly one
corporation. of the tenants in Trinity Building at T.M. Kalaw Street, Manila,
- There is no law mandating that commissions be paid only after while petitioner Rosario A. Gaa was then the building
the minimum wage has been paid to the employee. Verily, the administrator.
establishment of a minimum wage only sets a floor below which - December 12, 1973: Europhil Industries commenced an action
an employee’s remuneration cannot fall, not that commissions in CFI for damages against petitioner "for having perpetrated
are excluded from wages in determining compliance with the certain acts that Europhil Industries considered a trespass upon
minimum wage law. its rights, namely, cutting of its electricity, and removing its
- Philippine Agricultural Commercial and Industrial Workers name from the building directory and gate passes of its officials
Union vs. NLRC: drivers and conductors who are compensated and employees." Court ruled in favor of Europhil.
purely on a commission basis are automatically entitled to the - A writ of garnishment was issued pursuant to which Deputy
basic minimum pay mandated by law should said commissions Sheriff Cesar A. Roxas served a Notice of Garnishment upon El
be less than their basic minimum for eight hours work. Were Grande Hotel, where petitioner was then employed, garnishing
said commissions equal to or even exceed the minimum wage, her "salary, commission and/or remuneration." Gaa filed with
the employer need not pay, in addition, the basic minimum pay the CFI a motion to lift said garnishment on the ground that her
prescribed by law.
Labor Law 1 A2010 - 151 - Disini
"salaries, commission and or remuneration" are exempted from Finally, Sadac was removed from his office and ordered
execution under Article 1708 of the New Civil Code. disentitled to any compensation and other benefits. Labor
- CA dismissed the petition, saying that Gaa is not a mere Arbiter Jovencio Ll. Mayor, Jr., dismissed the complaint for lack
laborer as contemplated under Article 1708. The term laborer of merit. On appeal, the NLRC reversed the Labor Arbiter and
does not apply to one who holds a managerial or supervisory declared Sadac’s dismissal as illegal.
position like that of petitioner, but only to those "laborers
occupying the lower strata." ISSUE
1. WON Sadac is entitled to full backwages including salary
ISSUE increases
WON Gaa is a laborer falling under the exception of Art. 1708 of 2. WON Sadac is entitled to receive certain benefits
the Civil Code 3. WON the CA erred in awarding attorney’s fees to Sadac
4. WON Sadac is entitled to legal interest
HELD 5. WON the petition should be heard by the court en banc
NO, Gaa is not a laborer as contemplated by the Civil Code.
Ratio The term "wages" as distinguished from "salary", applies HELD
to the compensation for manual labor, skilled or unskilled, paid 1. NO
at stated times, and measured by the day, week, month, or Ratio The outstanding feature of backwages is the degree of
season, while "salary" denotes a higher degree of employment, assuredness to an employee that he would have had them as
or a superior grade of services, and implies a position of office. earnings had he not been illegally terminated from his
Reasoning employment. Salary increases, however, are a mere
- The legislature intended the exemption in Article 1708 of the expectancy. There is no vested right to salary increases.
New Civil Code to operate in favor of laboring men or women in Reasoning
the sense that their work is manual. Persons belonging to this - That respondent Sadac may have received salary increases in
class usually look to the reward of a day's labor for immediate the past only proves fact of receipt but does not establish a
or present support, and such persons are more in need of the degree of assuredness that is inherent in backwages. The mere
exemption than any others. fact that petitioner had been previously granted salary
LABORER: everyone who performs any kind of mental or increases by reason of his excellent performance does not
physical labor, but as commonly and customarily used and necessarily guarantee that he would have performed in the
understood, it only applies to one engaged in some form of same manner and, therefore, qualify for the said increase later.
manual or physical labor. When there is an award of backwages this actually refers to
WAGE: the pay given "as hire or reward to artisans, mechanics, backwages without qualifications and deductions. An
domestics or menial servants, and laborers employed in unqualified award of backwages means that the employee is
manufactories, agriculture, mines, and other manual occupation paid at the wage rate at the time of his dismissal. The base
and usually employed to distinguish the sums paid to persons figure to be used in the computation of backwages due to the
hired to perform manual labor, skilled or unskilled, paid at employee should include not just the basic salary, but also the
stated times, and measured by the day, week, month, or regular allowances that he had been receiving.
season." Obiter
- Petitioner is not an ordinary or rank and file laborer but "a Broadly, the word "salary" means a recompense or
responsibly-placed employee," of El Grande Hotel, "responsible consideration made to a person for his pains or industry in
for planning, directing, controlling, and coordinating the another man’s business. It carries with it the fundamental idea
activities of all housekeeping personnel" to ensure the of compensation for services rendered. In labor law, the
cleanliness, maintenance and orderliness of all guest rooms, distinction between salary and wage appears to be merely
function rooms, public areas, and the surroundings of the hotel. semantics. That wage and salary are synonymous has been
Petitioner is occupying a position equivalent to that of a settled. Both words generally refer to one and the same
managerial or supervisory position. meaning, that is, a reward or recompense for services
Disposition Decision of the CA affirmed, with costs against the performed. Likewise, "pay" is the synonym of "wages" and
petitioner. "salary".
2. NO
Ratio Sadac did not present any evidence to prove entitlement
EQUITABLE BANKING CORP V SADAC
to these claims.
490 SCRA 380 Reasoning
CHICO-NAZARIO; June 8, 2006 - Petitioner Bank’s computation contains no acknowledgment of
herein claimed benefits, namely, check-up benefit, clothing
NATURE allowance, and cash conversion of vacation leaves. We cannot
Petition for Review on Certiorari, with Motion to Refer the sustain the rationalization that the acknowledgment by
Petition to the Court En Banc, seeking to reverse the Decision petitioner Bank in its computation of certain benefits granted to
and Resolution of the CA which reversed and set aside the Sadac means that the latter is also entitled to the other benefits
Resolutions of the NLRC. as claimed by him but not acknowledged by the Bank.
3. NO
FACTS Ratio The decision of the CA AFFIRMED with MODIFICATION the
- Respondent Sadac was appointed Vice President of the Legal NLRC decision, which modification did not touch upon the award
Department of petitioner Bank and subsequently General of attorney’s fees as granted, hence, the award stands.
Counsel thereof. Nine lawyers of petitioner Bank’s Legal Reasoning
Department accused Sadac of abusive conduct and petitioned - When a final judgment becomes executory, it thereby
for a change in leadership of the department. On the ground of becomes immutable and unalterable. The CA’s decision became
lack of confidence in Sadac, under the rules of client and lawyer final and executory. This renders moot whatever argument
relationship, petitioner Bank instructed him to deliver all petitioner Bank raised against the grant of attorney’s fees to
materials in his custody in all cases in which the latter was Sadac.
appearing as its counsel of record. 4. YES
- Sadac requested for a full hearing and formal investigation but Ratio The legal interest of 12% per annum shall be imposed
the same remained unheeded. He filed a complaint for illegal from the time judgment becomes final and executory, until full
dismissal with damages against petitioner Bank and individual satisfaction thereof.
members of the Board of Directors thereof. After learning of the Reasoning
filing of the complaint, petitioner Bank terminated his services.
Labor Law 1 A2010 - 152 - Disini
- The CA was not in error in imposing the same notwithstanding the point entirely. The issue here is not payment for days
that the parties were at variance in the computation of Sadac’s worked but payment of gratuity pay equivalent to one month or
backwages. What is significant is that the decision which 30 days salary
awarded backwages to Sadac became final and executory. - From the foregoing, gratuity pay is therefore, not intended to
Therefore, petitioner Bank is liable to pay interest from the date pay a worker for actual services rendered. It is a money benefit
of finality of the decision. given to the workers whose purpose is "to reward employees or
5. NO laborers, who have rendered satisfactory and efficient service
Ratio The instant case is not one that should be heard by the to the company." (Sec. 2, CBA) While it may be enforced once it
Court en banc. forms part of a contractual undertaking, the grant of such
Reasoning benefit is not mandatory so as to be considered a part of labor
- We are not herein modifying or reversing a doctrine or standard law unlike the salary, cost of living allowances, holiday
principle laid down by the Court en banc or in a division. pay, leave benefits, etc., which are covered by the Labor Code.
Disposition The petition is PARTIALLY GRANTED and Nowhere has it ever been stated that gratuity pay should be
PARTIALLY DENIED. The decision of the CA is hereby MODIFIED. based on the actual number of days worked over the period of
years forming its basis. We see no point in counting the number
of days worked over a ten-year period to determine the
GRATUITY AND WAGES meaning of "two and one- half months' gratuity." Moreover any
doubts or ambiguity in the contract between management and
PLASTIC TOWN CENTER CORPORATION V NLRC the union members should be resolved in the light of Article
1702 of the Civil Code that:
(NAGKAKAISANG LAKAS NG MANGGAGAWA (NLM)-
- In case of doubt, all labor legislation and all labor contracts
KATIPUNAN) shall be construed in favor of the safety and decent living for
172 SCRA 380 the laborer
GUTIERREZ; April 19,1989 Disposition Decision affirmed
RECORD-KEEPING
SOUTH MOTORISTS ENTERPRISES V TOSOC [SEC
OF DOLE]
181 SCRA 386
PACIFIC CUSTOMS BROKERAGE V INTER-ISLAND MELENCIO-HERRERA; January 23, 1990
DOCKMEN AND LABOR UNION AND CIR
89 PHIL 722 NATURE
Certiorari
BAUTISTA ANGELO; August 24, 1951
FACTS
NATURE - January 1983, complaints for non-payment of emergency cost
Petition for review on certiorari of living allowances were filed by 46 workers, Tosoc, et als.,
against SOUTH MOTORISTS(SM) before the Naga City District
FACTS Office of Regional Office No. 5 of the then Ministry of Labor
- Inter-island Dockmen and Labor Union filed petition in CIR - 10 January 1983 a Special Order was issued by the District
against Pacific Customs Brokerage praying that said company Labor Officer directing its Labor Regulation Officers to conduct
be ordered to desist from dismissing members of said union, to an inspection and verification of SOUTH MOTORISTS'
turn over to the treasurer of union all dues and fees withheld by employment records.
the company and to reinstate with backpay the workers. - On the date of the inspection and verification, SOUTH
- A motion was filed by labor union praying that Pacific Customs MOTORISTS was unable to present its employment records on
Brokerage be ordered to pay union members their wages which the allegation that they had been sent to the main office in
was allegedly withheld by it for certain alleged damages caused Manila.
by said members for staging a strike. To this motion, Pacific - The case was then set for conference on 25 January 1983 but
objected. was reset twice.
- SM kept on requesting for postponements on the ground that
ISSUE the documents were still being prepared and collated and that a
WON Pacific Customs Brokerage can be compelled by CIR to formal manifestation or motion would follow. Nothing did.
pay wages of the union members in spite of the writ of - After the submission of an Inspection Report on the basis of
garnishment issued by CFI in civil case, directing the sheriff to which an Order dated 14 April 1983 was issued by Labor Officer
levy upon moneys of Pacific Customs Brokerage Workers Union Domingo Reyes directing SMto pay Tosoc, et als., the total
which are in the possession of Pacific Customs Brokerage amount of P184,689.12 representing the latter's corresponding
emergency cost of living allowances.
HELD - SM FILED a M for R BUT was denied.
YES - 11 July 1988, the Secretary of Labor and Employment affirmed
- Pacific Customs Brokerage contends otherwise because the the appealed Order.
moneys having been garnished, are in custodia legis, and can’t - 28 July 1988, SM FILED another MR BUT WAS DENIED; FILED
be controlled by CIR. The Court noticed that this is the same ANOTHER MR BUT WAS STILL DENIED.
argument advanced by petitioner before the respondent court CLAIMS:
in its effort to frustrate the purpose of the motion of the labor - SOUTH MOTORISTS: this falls under the original and exclusive
union, and the respondent court found said argument jurisdiction of Labor Arbiters (LA- a trier of facts, may determine
untenable. Art 1708 of new Civil Code provides, “Laborers’ after hearing such questions as WON an ER-EE rel’p exists;
wages shall not be subject to execution or attachment, except WON the workers were project workers; WON the employees
for debts incurred for food, shelter, clothing, medical worked continuously or WON they should receive emergency
attendance.” cost of living allowances and if entitled, how much each should
- Pacific Customs Brokerage doesn’t dispute that money receive..)
garnished is intended to pay wages of members of labor union. - TOSOC et al: maintain otherwise.
There is nothing to show that such money was garnished or
Labor Law 1 A2010 - 161 - Disini
ISSUE case, SM has only itself to blame for having failed to avail of the
WON Regional Directors of DOLE have jurisdiction to validly act same
on/ award money claims - What is more, its repeated failure to attend the hearings, and
to submit any motion as manifested may be construed as a
HELD waiver of its right to adduce evidence to controvert the worker's
YES claims.
Ratio Regional Directors are empowered to hear and decide, in Disposition The award P l84,689.12 was MODIFIED. The
a summary proceeding, claims for recovery of wages and other individual claims of Gavino, Euste ,Brequillo, Cis, Agreda,
monetary claims and benefits, including legal interest, subject Galona, Tosoc, Guinoo, Cea, Guinoo, and Osoc, each of which
to the concurrence of the following requisites: exceeds P5,000.00, were remanded to the LA for proper
1) the claim is presented by an employee or person employed disposition. All other individual awards not in excess of
in domestic or household service, or househelper under the P5,000.00 were AFFIRMED.
Code;
2) the claim arises from employer-employee relations; D. OTHER FORMS OF RENUMERATIO N
3) the claimant no longer being employed, does not seek
reinstatement; and
4) the aggregate money claim of each employee or househelper 9.12 SERVICE CHARGES
does not exceed P5,000.00 (Art. 129, Labor Code, as amended
by R.A. 6715).
But where these requisites do not concur, the Labor Arbiters SERVICE CHARGES
shall have exclusive original jurisdiction over claims arising from
employer-employee relationship except claims for employees' MARANAW HOTELS AND RESORT CORPORATION V
compensation, social security, medicare and maternity benefits NLRC (DAMALERIO)
(parag. 6, Art. 217, Labor Code as amended by R.A. 6715).
Reasoning 303 SCRA 540
- Two provisions of law are crucial to the issue—A129 and A217 PURISIMA; February 23, 1999
of the LC, as recently amended by Republic Act No. 6715,
approved on 2 March 1989. Said amendments, being curative in NATURE
nature, have retroactive effect and, thus, should apply in this Special Civil Action in the Supreme Court
case (BRIAD AGRO vs. DE LA CERNA, G.R. No. 82805, and
CAMUS ENGINEERING vs. DE LA CERNA, G.R. No. 83225, 9 FACTS
November 1989). - Damalerio, a room attendant of the Century Park Sheraton
- The aforesaid Articles, as amended, respectively read as Hotel, operated by Maranaw Hotel and Resort Corporation, was
follows: seen by hotel guest Glaser with left hand inside the latter's
Art. 129. Recovery of wages, simple money claims and other suitcase. Confronted with what he was doing, Damalerio
benefits.— Upon complaint of any interested party, the explained that he was trying to tidy up the room. Not satisfied
Regional Director of the Department of Labor and with the explanation of Damalerio, Glaser lodged a written
Employment or any of the duly authorized hearing officers of complaint before Despuig, shift-in-charge of security of the
the Department is empowered, through summary proceeding hotel. Glaser also reported that Damalerio had previously asked
and after due notice, to hear and decide cases involving the from him souvenirs, cassettes, and other giveaways. The
recovery of wages and other monetary claims and benefits, complaint was later brought by Despuig to the attention of
including legal interest, owing to an employee or person Major Buluran, Chief of Security of the hotel.
employed in domestic or household service and househelper - Damalerio was given a Disciplinary Action Notice (DAN ). The
under this Code, arising from employer-employee relations: next day, an administrative hearing was conducted on the
Provided, That such complaint does not include a claim for matter. Among those present at the hearing were the room
reinstatement: Provided, further, That the aggregate claim attendant, floor supervisor, chief of security, personnel
of each employee or househelper does not exceed five representative, and senior floor supervisor, and union
thousand pesos (P5,000.00). . . . representative.
and - Damalerio received a memorandum issued by San Gabriel, Sr.
Art. 217. Jurisdiction of Labor Arbiters and the Commission. Floor Supervisor, bearing the approval of Kirit, Executive
— (a) Except as otherwise provided under this Code, the Housekeeper, stating that he (Damalerio) was found to have
Labor Arbiters shall have original and exclusive jurisdiction committed qualified theft in violation of House Rule No. 1,
to hear and decide, within thirty (30) calendar days after the Section 3 of Hotel Rules and Regulations. The same
submission of the case by the parties for decision without memorandum served as a notice of termination of his
extension, even in the absence of stenographic notes, the employment.
following cases involving all workers, whether agricultural or - Damalerio filed with the Labor Arbiter a Complaint for illegal
non-agricultural: dismissal against the petitioner. After the parties had sent in
xxx xxx xxx their position papers, Labor Arbiter rendered judgment finding
(6) Except claims for employees compensation, social the dismissal of complainant to be illegal and ordering the
security, medicare and maternity benefits, all other claims respondents to reinstate him to his former or equivalent
arising from employer-employee relations, including those of position without loss of seniority rights and with backwages
persons in domestic or household service, involving an from April 15, 1992 when he was preventively suspended up to
amount exceeding five thousand pesos (P5,000), actual reinstatement and other benefits, including but not
whether or not accompanied with a claim for limited to his share in the charges and/or tips which he failed to
reinstatement. receive, and all other CBA benefits that have accrued since his
xxx xxx xxx dismissal.
- In accordance said articles, those awards in excess of - From the aforesaid Labor Arbiter's disposition, the petitioner
P5,000.00, particularly those given to Gavino, Euste, Brequillo, appealed to the NLRC, which modified the appealed decision by
Cis, Agreda, Galona, Tosoc, Guinoo, Cea, Guinoo, and Osoc, giving petitioner the option of paying Damalerio a separation
each of which exceeds P5,000.00, should be ventilated in a pay equivalent to one month pay for every year of service,
proceeding before the LA’s. instead of reinstating him.
- SM also caused the resetting of all subsequent hearings on the - Petitioner interposed a motion for reconsideration but to no
ground that the documents were still being prepared and avail. NLRC denied the same. Undaunted, petitioner brought
collated. - Having been given the opportunity to put forth its this matter to the Court.
Labor Law 1 A2010 - 162 - Disini
1. YES
ISSUES - The facts support Tio’s claim that Geniston was her personal
WON respondent NLRC committed grave abuse of discretion in driver. He was not in the payroll of UVFH; UVFH employees
not reversing that portion of the decision of the labor arbiter attested that he was not one of them; warehousemen of CFC
ordering petitioner to pay private respondent his share in the Corp described Geniston’s relationship to Tio, ie, he brings her
service charge which was collected during the time he was not to work, waits/sleeps in her car until she goes out for lunch,
working in the hotel brings her back after lunch, then waits/sleeps in her car until
she goes home.
HELD 2. NO
NO - Art 141 of the LC defines “Domestic or household service” as
- Damalerio is entitled not only to full backwages but also to to include services of family drivers.
other benefits, including a just share in the service charges, to - The Revised Guidelines on the Implementation of the 13th
be computed from the start of his preventive suspension until Month Pay Law excludes employers of household helpers from
his reinstatement. the coverage of PD 851, thus:
- However, mindful of the animosity and strained relations 2.. Exempted Employers
between the parties, emanating from this litigation, we uphold The following employers are still not covered by P.D. No. 851:
the ruling a quo that in lieu of reinstatement, separation pay a. . . .;
may be given to the private respondent, at the rate of one b. Employers of household helpers . . .;
month pay for every year of service. Should petitioner opt in c. . . .;
favor of separation pay, the private respondent shall no longer d. . . .
be entitled to share in the service charges collected during his - BUT Geniston was awarded 13th month pay in view of Tio’s
preventive suspension. practice of according private respondent such benefit. Indeed,
Disposition Petition dismissed petitioner admitted that she gave private respondent 13th
month pay every December.
3. NO
TIPS
- To constitute abandonment, two requisites must concur: (1)
the failure to report to work or absence without valid or
ACE NAVIGATION CO INC V CA justifiable reason, and (2) a clear intention to sever the
[PAGE 146] employer-employee relationship as manifested by some overt
acts, with the second requisite as the more determinative
factor. The burden of proving abandonment as a just cause for
9.13 THIRTEENTH MONTH PAY dismissal is on the employer. Petitioner failed to discharge this
burden.
[PD 851] Note
- The court also found that Geniston is not entitled to the other
benefits he was asking for because Art 82 (LC) excludes
COVERAGE domestic helpers from the mandatory grant of overtime pay,
holiday pay, premium pay and service incentive leave.
ULTRA VILLA FOOD HAUS V GENISTON Disposition NLRC decision is reversed.
309 SCRA 17
KAPUNAN; June 23, 1999. PETROLEUM SHIPPING V NLRC
[PAGE 79]
FACTS
- Geniston claims he is employed as a “do it all guy” in the MANNER OF WAGE PAYMENT
UVFH owned by Rosie Tio. He claims he was employed as a
waiter, driver and maintenance guy in the restaurant. Tio claims
Geniston is her personal driver. Tio works as a manager of the JACKSON BLDG V NLRC (GUMOGDA)
CFC Corporation. 246 SCRA 329
- On May 12, 1992, Tio called Geniston’s house to ask him to QUIASON; July 14, 1995
report for work even though it was a holiday because she
needed to do something important in the office. (The election
FACTS
that year was on May 11. May 11 & 12 were holidays.) His wife
- Ferdinand Gumogda underwent an appendectomy. Because
took the call and informed Tio that he wasn’t there as he was
his doctor advised him to rest for at least 30 days, Gumogda
working as a poll watcher.
filed for a 45-day LOA. He came back 50 days after the
- Tio says that Geniston abandoned his work. Geniston was
operation but to his surprise, her wasn’t allowed to return to
dismissed. He filed case for illegal dismissal and asked for
work because according to petitioners, Gumogda had
benefits, including 13th month pay. LA found that he wasn’t an
abandoned his work. The Labor Arbiter and NLRC ruled in favor
employee of UVFH, but instead was a personal driver of Tio. It
of Gumogda. Petitioners appealed.
found that his claim of being a waiter isn’t true because the
positions of waiter and driver are incongruent --- as a waiter he
ISSUES
would have to be at the resto all day; as a driver, he would have
1. WON private respondent abandoned his work;
to be away from the resto. LA also told Tio to indemnify
2. WON petitioners are liable for the payment of private
Geniston for P1k for failing to comply with the due process
respondent's back wages, differential pay, thirteenth-month pay
requirement. NLRC reversed LA’s decision.
and service-incentive leave pay for 1991
ISSUES
HELD
1. WON Geniston was a personal driver and not an employee of
1. NO
UVHF
- For abandonment to be a valid ground for dismissal, two
2. WON personal drivers are entitled to 13th month pay,
requisites must be copresent: the intention by an employee to
according to the law
abandon coupled with an overt act from which it may be
3. WON Geniston abandoned his work
inferred that the employee had no more intention to resume his
work (People's Security, Inc. vs. National Labor Relations
HELD
Commission, 226 SCRA 146 [1993]).
Labor Law 1 A2010 - 163 - Disini
- In the instant case, the said requisites are not present. - JPL filed a petition with the CA, claiming that private
2. YES respondents were not entitled to the separation pay, service
- Gumogda heeded doctor’s advise and even exceeded the incentive leave pay and 13th month pay.
number of days recommended by his doctor for his - CA affirmed in toto the NLRC resolution. While conceding that
recuperation. In fact, he reported back for work 50 days after there was no illegal dismissal, it justified the award of
his operation. This would clearly show that private respondent separation pay on the grounds of equity and social justice. The
was ready to assume his responsibilities considering that he Court of Appeals rejected JPL’s argument that the
had fully recovered from the operation. Furthermore, the filing difference in the amounts of private respondents’
of a complaint from illegal dismissal by private respondent is salaries and the minimum wage in the region should be
inconsistent with the allegation of petitioners that he had considered as payment for their service incentive leave
abandoned his job. Surely, an employee's posture will be and 13th month pay.
illogical if he abandons his work and then immediately files an - MFR denied, hence, this petition
action for his reinstatement. Article 279 of the Labor Code of
the Philippines provides that "an employee who is unjustly ISSUES
dismissed from work shall be entitled to reinstatement without 1. WON private respondents were illegally dismissed, and thus
loss of seniority rights and other privileges and to his full back entitled to separation pay
wages, inclusive of allowances, and to his other benefits or their 2. WON private respondents are entitled to 13th month pay and
monetary equivalent computed from the time his compensation service incentive leave pay
was withheld from him up to the time of his actual
reinstatement." Also, Gumogda is likewise entitled to the HELD
thirteenth-month pay. Presidential Degree No. 851, as 1. NO
amended by Memorandum Order No. 28, provides that - Under Arts. 283 and 284 of the Labor Code, separation pay is
employees are entitled to the thirteenth-month pay authorized only in cases of dismissals due to any of these
benefit regardless of their designation and irrespective reasons: (a) installation of labor saving devices; (b) redundancy;
of the method by which their wages are paid. (c) retrenchment; (d) cessation of the employer's business; and
Disposition Petition is DISMISSED. (e) when the employee is suffering from a disease and his
continued employment is prohibited by law or is prejudicial to
his health and to the health of his co-employees. However,
WAGE DIFFERENCE separation pay shall be allowed as a measure of social justice in
those cases where the employee is validly dismissed for causes
other than serious misconduct or those reflecting on his moral
JPL MARKETING PROMOTIONS V CA (GONZALES, character, but only when he was illegally dismissed.
ABESA & ANNIPOT) - The common denominator of the instances where payment of
463 SCRA 136 separation pay is warranted is that the employee was dismissed
TINGA; July 8, 2005 by the employer
- In the instant case, there was no dismissal to speak of. What
they received from JPL was not a notice of termination of
NATURE
employment, but a memo informing them of the termination of
Petition for review of the decision of the CA
CMC’s contract with JPL. More importantly, they were advised
that they were to be reassigned. At that time, there was no
FACTS
severance of employment to speak of.
- JPL Marketing and Promotions is a domestic corporation
- Art. 286 of the Labor Code allows the bona fide suspension of
engaged in the business of recruitment and placement of
the operation of a business or undertaking for a period not
workers.
exceeding six (6) months, wherein an employee/employees are
- Gonzales, Abesa III and Aninipot were employed by JPL as
placed on the so-called “floating status.”
merchandisers on separate dates and assigned at different
- As clearly borne out by the records of this case, private
establishments in Naga City and Daet, Camarines Norte as
respondents sought employment from other establishments
attendants to the display of California Marketing Corporation
even before the expiration of the six (6)-month period provided
(CMC), one of petitioner’s clients.
by law. JPL did not terminate their employment; they
- On 13 August 1996, JPL notified private respondents that CMC
themselves severed their relations with JPL. Thus, they are not
would stop its direct merchandising activity effective 15 August
entitled to separation pay.
1996.
2. YES
- They were advised to wait for further notice as they would be
- JPL cannot escape the payment of 13th month pay and service
transferred to other clients.
incentive leave pay to private respondents. Said benefits are
- On 17 October 1996, Abesa and Gonzales filed before the
mandated by law and should be given to employees as a matter
NLRC complaints for illegal dismissal, praying for separation
of right.
pay, 13th month pay, service incentive leave pay and payment
- Admittedly, private respondents were not given their 13th
for moral damages. Aninipot filed a similar case thereafter.
month pay and service incentive leave pay while they were
- Labor Arbiter Gelacio L. Rivera, Jr. dismissed the complaints
under the employ of JPL. Instead, JPL provided salaries which
for lack of merit.
were over and above the minimum wage.
- The Labor Arbiter held that:
- The Court rules that the difference between the minimum
1. The private respondents may be deemed to have severed
wage and the actual salary received by private respondents
their relation with JPL, and cannot charge JPL with illegal
cannot be deemed as their 13th month pay and service
dismissal, as they applied for different jobs even before the
incentive leave pay as such difference is not equivalent to or of
lapse of the six (6)-month period given by law to JPL to provide
the same import as the said benefits contemplated by law.
them with new assignments.
Thus, as properly held by the Court of Appeals and by the NLRC,
2. The claims for 13th month pay and service incentive
private respondents are entitled to the 13th month pay and
leave pay should be denied since private respondents
service incentive leave pay.
were paid way above the applicable minimum wage
Disposition Petition granted in part. Award of separation pay
during their employment.
deleted.
- NLRC affirmed the finding that there was no illegal dismissal,
but ordered the payment of separation pay, service incentive
leave pay, and13th month pay.
HOUSEHELPERS
Labor Law 1 A2010 - 164 - Disini
ULTRAVILLA FOOD HOUSE V GENISTON not more than P1,000.00 a month, a 13th month pay (not later
than December 24 of every year)
[PAGE 157]
HELD
GOVERNMENT EMPLOYEES NO
Ratio Since the terms and conditions of government
employment are fixed by law, government workers cannot use
ALLIANCE OF GOVERNMENT WORKERS V MINISTER the same weapons employed by workers in the private sector to
OF LABOR (PNB) secure concessions from their employers. Subject to the
124 SCRA 1 minimum requirements of wage laws and other labor and
GUTIERREZ JR; August 3, 1983 welfare legislation, the terms and conditions of employment in
the unionized private sector are settled through the process of
collective bargaining. In government employment, however, it
NATURE is the legislature and, where properly given delegated power,
Petition to review decision of the Minister of Labor and the administrative heads of government which fix the terms and
Employment conditions of employment.
Reasoning
FACTS - An analysis of the "whereases" of P.D. No. 851 shows that the
- Petitioner Alliance of Government Workers (AGW) is a President had in mind only workers in private employment
registered labor federation while the other petitioners are its when he issued the decree. There was no intention to cover
affiliate unions with members who are employees of PNB, persons working in the government service.
MWSS, GSIS, SSS, PVTA, PNC, PUP, and PGEA. - Under the present Constitution, govemment-owned or
- PD 851 was enacted: controlled corporations are specifically mentioned as embraced
WHEREAS, it is necessary to further protect the level of real by the civil service. The amendment was intended to correct
wages from the ravage of world-wide inflation; the situation where more favored employees of the government
WHEREAS, there has been no increase case in the legal could enjoy the benefits of two worlds. They were protected by
minimum wage rates since 1970; the laws governing government employment.
WHEREAS, the Christmas season is an opportune time for - Why are the GOCCs part of the Civil Service?
society to show its concern for the plight of the working (1) Nature of the public employer and peculiar character of
masses so they may properly celebrate Christmas and New public service: the Gov’t protects the interests of ALL people in
Year. the public service, hence there would never be conflicting
NOW, THEREFORE, I, FERDINAND E. MARCOS, by virtue of the interests.
powers vested in me by the Constitution do hereby decree as (2) Gov’t agencies have a right to demand undivided allegiance.
follows: (3) Governmental machinery must be impartial and non-
SECTION 1. All employers are hereby required to pay all their political.
employees receiving a basic salary of not more than Pl,000 a (4) To meet increasing social challenges of the times- the
month, regardless of the nature of their employment, a 13th- tendency towards a greater socialization of economic forces.
month pay not later than December 24 of every year. - Section 63, Article XII-B of the Constitution gives added
SECTION 2. Employers already paying their employees a reasons why the government employees represented by the
13th-month pay or its equivalent are not covered by this petitioners cannot expect treatment in matters of salaries
Decree. different from that extended to all others government
SECTION 3. This Decree shall take effect immediately. Done personnel.
in the City of Manila, this 16th day of December 1975. - The Solicitor-General correctly points out that to interpret P.D.
- According to the petitioners, P.D. No. 851 requires all No. 851 as including government employees would upset the
employers to pay the 13th-month pay to their employees with compensation levels of government employees in violation of
one sole exception found in Section 2. BUT Sec.3 of the Rules those fixed.
and Regulations Implementing PD 851 included other types of Disposition Petition is DISMISSED for lack of merit.
employers not exempted by the decree. (1) Distressed
employees, (2) Government employees2, (3) Those already
paying 13th month pay, (4) Household helpers, (5) Those paid on SEPARATE OPINION
purely commission, boundary or task basis.
- Sec 3 is then challenged as a substantial modification by rule FERNANDO [concur pro hac vice]
of a Presidential Decree and an unlawful exercise of legislative - The approach taken by opinion of the Court is distinguished by
power. its conformity to the prevailing doctrine of statutory
- Sol Gen: “What the P.D. No. 851 intended to cover are only construction that unless so specified, the government does not
those in the private sector whose real wages require protection fall within the terms of any legislation or decree.
from world-wide inflation. This is emphasized by the "whereas" - "Since the terms and conditions of government employment
clause which states that 'there has been no increase in the legal are fixed by law, government workers cannot use the same
minimum wage rates since 1970'. This could only refer to the weapons employed by workers in the private sector to secure
private sector, and not to those in the government service concessions from their employers.”
because at the time of the enactment of PD 851 in 1975, only - In government employment, however, it is the legislature and,
the employees in the private sector had not been given any where properly given delegated power, the administrative
increase in their minimum wage. The employees in the heads of government which fix the terms and conditions of
government service had already been granted in 1974 a ten employment. This is effected through statutes or administrative
percent across-the-board increase.” circulars, rules, and regulations, not through collective
bargaining agreements.
ISSUE
WON the branches, agencies, subdivisions, and MAKASIAR [dissent]
instrumentalities of the Government, including GOCCs are
required to pay all their employees receiving a basic salary of 3
SEC. 6. The National Assembly shall provide for the standardization of
compensation of government officials and employees, including those in
2 government-owned or controlled corporations, taking into account the nature of the
b) The Government and any of its political subdivisions, including government- responsibilities pertaining to, and the qualifications required for the positions
owned and controlled corporations, except)t those corporation, operating essentially concerned.
as private, ,subsidiaries of the government
Labor Law 1 A2010 - 165 - Disini
- It will be noted that the PD 851 provides only one exception in WON dismissal for cause results in the forfeiture of the
its Section 2: "Employers already paying their employees a employee's right to a 13th month pay
13th-month pay or its equivalent..." Hence, all other employers,
whether of the private sectors or of GOCCs and government HELD
agencies, are thereunder obligated to pay their employees. NO
- If the President intended to favor only employees of the - Paragraph 6 of the Revised Guidelines on the Implementation
private sector, he could have easily inserted the phrase "in the of the 13th Month Pay Law (P. D. 851) provides that "an
private sector between the words "wages" and "from" in the employee who has resigned or whose services were terminated
first WHEREAS, and between the words masses" and "so" in the at any time before the payment of the 13th month pay is
third WHEREAS; or the President could have included the other entitled to this monetary benefit in proportion to the length of
four classes of employers in the questioned Section 3. time he worked during the year, reckoned from the time he
- The position taken by public respondents is repugnant to the started working during the calendar year up to the time of his
social justice guarantee under the new Constitution. “The resignation or termination from the service . . . The payment of
laboring masses of the government- owned and -controlled the 13th month pay may be demanded by the employee upon
agencies are entitled to such dignity, welfare and security as the cessation of employer-employee relationship. This is
well as an equitable share in the profits of respondents which consistent with the principle of equity that as the employer can
will inevitably contribute to enhancing their dignity, welfare and require the employee to clear himself of all liabilities and
security, as much as those of the workers and employees of the property accountability, so can the employee demand the
private sector.” payment of all benefits due him upon the termination of the
- Basic rule is that all doubts should be interpreted in favor of relationship."
labor. - Furthermore, Sec. 4 of the original Implementing Rules of P.D.
- To deny them this right would render the State culpable of 851 mandates employers to pay their employees a 13th month
failing to "afford protection to labor, promote... equality in pay not later than the 24th of December every year provided
employment…” as well as "just and humane conditions of that they have worked for at least one (1) month during a
work." calendar year. In effect, this statutory benefit is
automatically vested in the employee who has at least
worked for one month during the calendar year. As
TERMINATED EMPLOYEES correctly stated by the Solicitor General, such benefit may
not be lost or forfeited even in the event of the
employee's subsequent dismissal for cause without
ARCHILLES MANUFACTURING CORP V NLRC violating his property rights.
(MANUEL, ET AL)
244 SCRA 750 RATIONALE – PD 851 – WHEREAS
BELLOSILLO; June 2, 1995
CLAUSE AND LIMITATIONS
NATURE
Appeal on certiorari
BASIC WAGE/COMMISSIONS
FACTS
- Private respondents Geronimo Manuel, Arnulfo Diaz, Jaime BOIE TAKEDA V DELA SERNA
Carunungan and Benjamin Rindon were employed by Archilles 228 SCRA 329
Manufacturing Corporation, (Alberto Yu - Chairman) and (Adrian
Yu-VP) as laborers in its steel factory located in Bulacan, each
NARVASA; December 10, 1993
receiving a daily wage of P96.00.
- ARCHILLES was maintaining a bunkhouse in the work area NATURE
which served as resting place for its workers. In 1988 a mauling Petition for review via certiorari and for issuance of writ of
incident nearly took place involving a relative of an employee. prohibition (consolidated)
As a result, ARCHILLES prohibited its workers from bringing any
member of their family to the bunkhouse. But despite this FACTS
prohibition, private respondents continued to bring their (HISTORY OF 13TH MONTH PAY – PD 851)
respective families to the bunkhouse, causing annoyance and - Initially, PD 851 ordered the payment of 13th month pay to
discomfort to the other workers. This was brought to the workers receiving basic salary of not more than P1,000.00 a
attention of ARCHILLES. month, regardless of the nature of the employment.
- The management ordered private respondent to remove their - DECEMBER 22, 1975: Rules and Regulations Implementing P.D.
families from the bunkhouse and to explain their violation of the 851 promulgated by Labor Minister Ople, defined 13th month
company rule. Private respondents removed their families from pay, and basic salary as including “all remunerations or
the premises but failed to report to the management as earnings paid by an employer to an employee for services
required; instead, they absented themselves from 14 to 18 May rendered but may not include cost of living allowances
1990. Consequently, ARCHILLES terminated their employment granted pursuant to Presidential Decree No. 525 or Letter of
for abandonment and for violation of the company rule Instructions No. 174, profit sharing payments, and all
regarding the use of the bunkhouse. 3 allowances and monetary benefits which are not considered or
- Private respondents filed a complaint for illegal dismissal. The integrated as part of the regular or basic salary of the employee
Labor Arbiter found the dismissal of private respondents illegal at the time of the promulgation of the Decree on December 16,
and ordered their reinstatement as well as the payment to them 1975;” and exempted employers of those who are paid on
the backwages, proportionate 13th month pay for the year purely commission, boundary, or task basis, and those
1990 and attorney'sfees. ARCHILLES appealed. who are paid a fixed amount for performing a specific
- NLRC set aside the decision of the LA and ruled that the work from payment of 13th month pay
dismissal of private respondents was valid. However, it ordered - Supplementary Rules and Regulations implementing P.D. 851
ARCHILLES to pay private respondents their "withheld" salaries were subsequently issued by Minister Ople, which enumerated
from 19 September 1991and to pay their proportionate 13th items not included in the computation of the 13th month pay:
month pay for 1990. overtime pay, earnings and other remunerations which
are not part of the basic salary
ISSUE - AUGUST 13, 1986: President Corazon C. Aquino promulgated
Memorandum Order No. 28 which modified PD 851 by
Labor Law 1 A2010 - 166 - Disini
removing the salary ceiling of P1,000.00 a month set by on the Implementation of the 13th Month Pay Law issued on
the latter, November 126, 1987 by then Labor Secretary Franklin M. Drilon
- NOVEMBER 16, 1987: Revised Guidelines on the is declared null and void as being violative of the law said
Implementation of the 13th Month Pay Law were promulgated Guidelines were issued to implement, hence issued with grave
by Sec. Drilon which, among other things, enumerated abuse of discretion correctible by the writ of prohibition and
remunerative items not embraced in the concept of 13th certiorari. The assailed Orders of January 17, 1990 and October
month pay (allowances and monetary benefits which are not 10, 1991 based thereon are SET ASIDE. SO ORDERED
considered or integrated as part of the regular or basic salary,
such as the cash equivalent of unused vacation and sick leave
credits, overtime, premium, night differential and holiday pay,
and cost-of-living allowances), and specifically dealt with
employees who are paid a fixed or guaranteed wage plus
commission (Employees who are paid a fixed or guaranteed PHIL DUPLICATORS V NLRC (PHIL DUP. EMPLOYEES
wage plus commission are also entitled to the mandated UNION)
13th month pay based on their total earnings during the
calendar year, i.e., on both their fixed or guaranteed wage 241 SCRA 380
and commission) FELICIANO; February 15, 1995
- DOLE conducted a routine inspection in the premises of both
Boie Takeda and Philippine Fuji Xerox Corp. It was found that FACTS
both companies failed to pay the 13th month pay of their - The Court rendered a decision dismissing a petition for
employees for the years 1986, 1987, and 1988. Both companies certiorari by Phil. Duplicators, Inc (PDI). The Court upheld the
were ordered to restitute the said underpayment within 5-10 decision of public respondent NLRC ordering PDI to pay 13th
days. Both companies appealed but were denied. month pay to private respondent employees computed on the
- BASIC CONTENTION OF THE PETITIONERS: commissions should not be basis of their fixed wages plus sales commissions.
included in the computation of the basic salary as basis for the - PDI filed an MFR, invoking the decisions in the 2 consolidated
13th month pay cases of Boie-Takeda Chem. vs Hon. Dionisio de la Serna and
- BASIC CONTENTION OF THE RESPONDENTS: Commissions are now Phil. Fuji Xerox Corp. vs Hon. Cresenciano Trajano. PDI alleged
included in the computation for the 13th month pay, as clarified that the decision in the Duplicators case should be reversed
by the Revised Guidelines issued by Sec. Drilon since the Boie-Takeda decision went “directly opposite and
contrary to” the conclusion reached in the former further
ISSUE seeking to dismiss the money claims of private respondent
WON the Revised Guidelines on the Implementation of the 13th union. In view of the nature of the issues raised, the Court
Month Pay Law issued by Labor Sec. Drilon should be considered the MFR and accepted it as a banc case.
declared null and void as being violative of the law said
Guidelines were issued to implement, hence issued with grave ISSUES
abuse of discretion correctible by the writ of prohibition and 1. WON the Duplicators decision goes against the Boie-Takeda
certiorari (Thus, commissions should not be included in the decision
computation for basic salary as basis for 13th month pay) 2. WON the sales commission earned by the salesmen of PDI
constitute a part of their “wage” and should be included in the
HELD computation of 13th month pay
YES
- In including commissions in the computation of the 13th
month pay, the second paragraph of Section 5(a) of the Revised HELD
Guidelines on the Implementation of the 13th Month Pay Law 1. NO
unduly expanded the concept of "basic salary" as defined in - The doctrines enunciated in the 2 cases present different
P.D. 851. It is a fundamental rule that implementing rules factual situations. The so-called commissions received by the
cannot add to or detract from the provisions of the law Boie-Takeda medical reps or by the rank and file employees of
it is designed to implement. Administrative regulations Fuji were characterized as “productivity bonuses”. These are
adopted under legislative authority by a particular additional monetary benefits generally tied to the capacity for
department must be in harmony with the provisions of revenue production of a corporation. As such, they more closely
the law they are intended to carry into effect. They resemble profit-sharing payments and are not directly related
cannot widen its scope. An administrative agency to the amount of work actually done by an employee.
cannot amend an act of Congress. -The “commissions” paid to the medical reps were not “sales
Ratio. In remunerative schemes consisting of a fixed or commissions” in the same sense as in the Duplicators case.
guaranteed wage plus commission, the fixed or guaranteed Medical representatives are not salesmen; they merely promote
wage is patently the "basic salary" for this is what the employee products and leave samples with physicians. As such, no actual
receives for a standard work period. Commissions are given for sales are made placing the commissions in the nature of a
extra efforts exerted in consummating sales or other related profit-sharing bonus.
transactions. They are, as such, additional pay, which this Court 2. YES
has made clear do not form part of the "basic salary." - The commissions received by every duplicating machine sold
Reasoning constitute part of the basic compensation of PDI’s salesmen,
- San Miguel Corp. vs. Inciong discussion on history of 13th apart from a small fixed wage. It is important to note that the
Month Pay Law. The exclusion of all allowances and monetary fixed portion of their salaries represent only 15-30% of an
benefits such as profit-sharing payments, COLA, overtime pay, employee’s total earnings in a year. Considering this, the sales
premiums for special holiday, and the like indicate the intention commissions were an integral part of PDI’s basic salary
to strip basic salary of other payments, and any and all structure and not mere profit-sharing payments or fringe
additions which may be in the form of allowances or “fringe” benefits.
benefits. If they were not excluded, it is hard to find any -The Supplementary Rules and Regulations Implementing P.D.
“earnings and other remunerations” (exclusionary phrase) 851(The 13th Month Pay Law) clarifies the scope of items
expressly excluded in the computation of the 13th month pay. excluded in the computation of 13th month pay. Section 4 of the
Then the exclusionary provision would prove to be idle and with Law states that “Overtime pay, earnings and other
no purpose. remunerations which are not part of the basic salary shall not
Disposition the consolidated petitions are hereby GRANTED. be included in the computation of the 13th month pay.” What
The second paragraph of Section 5 (a) of the Revised Guidelines constitutes “other remunerations not part of basic salary” is a
Labor Law 1 A2010 - 167 - Disini
question to be resolved on a case-to-case basis. In the instant - The said pro-rated computation is violative of the provisions of
case, it is important to distinguish the productivity bonuses the CBA. A collective bargaining agreement refers to the
granted in Boie-Takeda from the sales commissions of the negotiated contract between a legitimate labor organization
Duplicators case. and the employer concerning wages, hours of work and all
- A productivity bonus is something extra given to an employee other terms and conditions of employment in a bargaining unit.
for which no specific additional services are rendered. Since a As in all contracts, the parties in a CBA may establish such
bonus is a gratuity of the employer, the recipient cannot stipulations, clauses, terms and conditions as they may deem
demand its payment as a matter of right. If an employer cannot convenient provided these are not contrary to law, morals, good
be compelled to pay a productivity bonus to his employees, customs, public order or public policy. Thus, where the CBA is
then it follows that the bonus should not fall under “basic clear and unambiguous, it becomes the law between the parties
salary” when computing 13th month pay. and compliance therewith is mandated by the express policy of
- Sales commissions, on the other hand, are directly the law.
proportional to the extent or energy of an employee’s work. - It is violative of the provision of P.D. No. 851 which, provided
Such commissions are paid upon the specific results achieved that the minimum 13th month pay required by law shall not be
by a salesman and form an integral part of his basic pay and less than one-twelfth (1/12) of the total basic salary earned by
should thus be included in the computation of 13th month pay. an employee within a calendar year.
Disposition MFR is denied for lack of merit - The act has ripened into a practice and therefore can no
longer be withdrawn, reduced, diminished, discontinued or
eliminated. Honda did not adduce evidence to show that the
IRAN V NLRC
13th month, 14th month and financial assistance benefits were
[PAGE 148] previously subject to deductions or pro-rating or that these
were dependent upon the company’s financial standing.
HONDA PHILS INC V SAMAHAN NG MALAYANG - It is more in keeping with the underlying principle for the grant
MANGGAGAWA SA HONDA of this benefit. It is primarily given to alleviate the plight of
workers and to help them cope with the exorbitant increases in
460 SCRA 186 the cost of living. To allow the pro-ration of the 13th month pay
YNARES-SANTIAGO; June 15, 2005 in this case is to undermine the wisdom behind the law and the
mandate that the workingman’s welfare should be the
FACTS primordial and paramount consideration.
- A Collective Bargaining Agreement (CBA) was forged between - To rule otherwise inevitably results to dissuasion, if not a
petitioner Honda and respondent union Samahan ng Malayang deterrent, for workers from the free exercise of their
Manggagawa sa Honda (respondent union). Among others, the constitutional rights to self-organization and to strike in
CBA provides that the Company will maintain the present accordance with law.
practice in the implementation of the 13th month pay, shall Disposition Denied.
grant a 14th Month Pay, computed on the same basis as
computation of 13th Month Pay and shall continue the practice SUBSTITUTE PAYMENTS
of granting, in its discretion, financial assistance to covered
employees in December of each year, of not less than 100% of
basic pay. This CBA is effective until year 2000. FRAMANLIS FARMS INC V MOLE
- In 1998, the two parties started re-negotiations for the 4 th and 171 SCRA 87
5th years of their CBA (meaning for yr 1999 to 2000). However, GRINO-AQUINO; March 8, 1989
the talks bogged down. The union filed a Notice of Strike on the
ground of bargaining deadlock. Thereafter, Honda filed a Notice
NATURE
of Lockout. DOLE intervened and ordered the parties to cease
Petition for certiorari to reverse the denied MFR denied by MOLE
and desist from committing acts that would aggravate the
order.
situation. Both parties complied accordingly.
- On May 11, 1999, however, respondent union filed a second
FACTS
Notice of Strike on the ground of unfair labor practice alleging
(The facts are difficult to digest because they involved numbers.
that Honda illegally contracted out work to the detriment of the
For recitation purposes, the reasoning is enough.)
workers. The DOLE again intervened and the striking
- Employees of the petitioners filed against their employer and
employees were ordered to return to work and the
the other petitioners 2 labor standard cases in the RTC alleging
management accepted them back under the same terms prior
that they were not paid emergency cost of living allowance
to the strike staged.
(ECOLA), minimum wage 13th month pay, holiday pay, and
- On November 22, 1999, the management of Honda issued a
service incentive leave pay.
memorandum[4] announcing its new computation of the 13th
- Petitioners, in an answer to the amended complaint, alleged
and 14th month pay to be granted to all its employees whereby
that (1) the private respondents were not regular workers, but
the thirty-one (31)-day long strike shall be considered unworked
were migratory (sacadas) or pakyaw workers who were hired
days for purposes of computing said benefits. As per the
seasonally, or only during the milling season, to so piece-of
company’s new formula, the amount equivalent to 1/12 of the
work on the farms, hence they were not entitled to benefits
employees’ basic salary shall be deducted from these bonuses,
being claimed, (2) they applied for an exception to pay for the
with a commitment however that in the event that the strike is
living allowance although the MOLE has no ruling yet.
declared legal, Honda shall pay the amount deducted (In effect,
- The claims for holiday pay, service incentive pay, social
this enabled them to devise a formula using 11/12 of the total
amelioration bonus and underpayment fo minimum wage were
annual salary as base amount for computation instead of the
not controverted. On the other claims, the petitioners submitted
entire amount for a 12-month period.
only random payrolls which showed that the women workers
- The union opposed the pro-rated computation of the bonuses.
were, although the male workers received P10 more or less, per
day.
ISSUE
- In an Order, the Minister of Labor (MOLE), through Assistant
WON the pro-rated computation of the 13th month pay and the
Regional Director Dante Ardivilla, adopting the
other bonuses in question is valid and lawful
recommendations of the Chief of the Labor Regulation Section,
Bacolod District Office, directed the respondents (now
HELD
petitioners) to pay: (1) deficiency payments under PD 925,PD
NO
1614 , under Ministry Order No. 5, under PD 1678, service
Reasoning
Labor Law 1 A2010 - 168 - Disini
incentive leave pay, holiday pay and social amelioration bonus
and 13th month pay and emergency living allowance under PD
1123 KAMAYA PORT HOTEL V NLRC (FEDERATION OF
- Upon the petitioners' appeal of that Order, the Deputy MOLE FREE WORKERS)
modified it ordering the employer to all non-pakyaw workers 177 SCRA 87
their claim for holiday and incentive leave pay, their 13th FERNAN; August 31, 1989
month pay, pay differentials and ECOLA excluding the pakyaw
workers from holiday and service incentive leave pay
- Framanlis filed for MFR, which was denied hence, this petition NATURE
for certiorari Petition for review on certiorari
ISSUE FACTS
1. WON Minister erred in requiring the petitioners to pay wage - Respondent Memia Quiambao with thirty others who are
differentials to their pakyaw workers who worked for at least members of the Federation of Free Workers (FFW) were
eight hours daily employed by Kamaya as hotel crew. On the basis of the
2. WON benefits in form of food and electricity are equivalent to profitability of the company's business operations,
the 13th month pay management granted a 14th month pay to its employees
starting in 1979. In January 1982, the hotel converted into a
HELD training center for Libyan scholars. Hoever, the Libyans
1. NO preterminated their program
- In 1976, PD No. 928 fixed a minimum wage for agricultural leaving Kamayan without any business, aside from the fact that
workers in any plantation or agricultural enterprise irrespective it was not paid for the use of the hotel premises. All in all
of WON the worker was paid on a piece-rate basis. However, Kamayan allegedly suffered losses amounting to P2 million.
effective July 1, 1978, the minimum wage was increased (Sec. - Although Kamayan reopened the hotel premises to the public,
1, PD 1389). Subsequently, PD 1614 provided for another it was not able to pick-up its lost patronage. In a couple of
increase in the daily wage of all workers effective April 1, 1979. months it effected a retrenchment program until finally, it
The petitioners admit that those were the minimum rates totally closed its business.
prevailing then. Therefore, the respondent Minister did not err - FFW then filed with the Ministry of Labor and Employment a
in requiring the petitioners to pay wage differentials to their complaint against petitioner for illegal suspension, violation of
pakyaw workers who worked for at least eight hours daily and the CBA and non-payment of the 14th month pay. Records
earned less than P8.00 per day in 1978 to 1979. however show that the case was submitted for decision on the
2. NO sole issue of alleged non-payment of the 14th month pay for
- With regard to the 13th month pay, petitioners admitted that the year 1982.
they failed to pay their workers 13th month pay. However, they - The LA rendered a decision ordering Kamaya to pay the 14th
argued that they substantially complied with the law by giving month pay. On appeal, the NLRCaffirmed the grant of the 14th
their workers a yearly bonus and other non-monetary benefits month pay on the ground that the granting of this 14th month
amounting to not less than 1/12th of their basic salary in weekly pay has already ripened into a company practice which
subsidy of choice pork meat, free choice pork meat and free respondent company cannot withdraw unilaterally. This 14th
light or electricity which were allegedly "the equivalent" of the month pay is now an existing benefit which cannot be
13th month pay. withdrawn without violating article 100 of the Labor Code. To
- Under Section 3 of PD No. 8514, such benefits in the form of allow its withdrawal now would certainly amount to a diminution
food or free electricity, assuming they were given, were not a of existing benefits which complainants are presently enjoying.
proper substitute for the 13th month pay required by law.
- Neither may year-end rewards for loyalty and service be ISSUE
considered in lieu of 13th month pay according to Section 10 of WON the latter tribunal committed grave abuse of discretion
the Rules and Regulations Implementing Presidential Decree when it adopted the Labor Arbiter's decision saying that the
No. 14th month pay cannot be withdrawn without violating Article
- The failure of the Minister's decision to identify the pakyaw 100 of the Labor Code
and non-pakyaw workers does not render said decision invalid.
The workers may be identified or determined in the proceedings HELD
for execution of the judgment. YES
Disposition petition for certiorari is dismissed with costs - Art. 100 of the LC states: Prohibition against elimination or
against the petitioners. diminution of benefits.- 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.
- It is patently obvious that Article 100 is clearly without
applicability. The date of effectivity of the Labor Code is May 1,
1974. In the case at bar, petitioner extended its 14th month
pay beginning 1979 until 1981. What is demanded is payment
of the 14th month pay for 1982. Indubitably from these facts
alone, Article 100 of the Labor Code cannot apply.
- Moreover, there is no law that mandates the payment of the
14th month pay. This is emphasized in the grant of exemption
14th MONTH PAY under Presidential Decree 851 (13th Month Pay Law) which
states: "Employers already paying their employees a 13th
4 month pay or its equivalent are not covered by this Decree."
Section 3. Employees covered The Decree shall apply to all employees except to: Necessarily then, only the 13th month pay is mandated. Having
xxx xxx xxx enjoyed the additional income in the form of the 13th month
"The term 'its equivalent' as used in paragraph (c) hereof shall include Christmas
bonus, mid-year bonus, profit-sharing payments and other cash bonuses amounting pay, private respondents' insistence on the 14th month pay for
to not less than 1/12 of the basic salary but shall not include cash and stock 1982 is already an unwarranted expansion of the liberality of
dividends, cost of living allowances and all other allowances regularly enjoyed by the the law.
employee, as well as non-monetary benefits.
"Where an employer pays less than 1/12 of the employee's basic salary the employer - Verily, a 14th month pay is a misnomer because it is basically
shall pay the difference." a bonus and, therefore, gratuitous in nature. The granting of the
Labor Law 1 A2010 - 169 - Disini
14th month pay is a management prerogative which cannot be 1. YES
forced upon the employer. It is something given in addition to - Petitioners' right to terminate employees on account of
what is ordinarily received by or strictly due the recipient. It is a retrenchment to prevent losses or closure of business
gratuity to which the recipient has no right to make a demand. operations, is recognized by law, but it may not pay separation
- This Court is not prepared to compel petitioner to grant the benefits unequally for such discrimination breeds resentment
14th month pay solely because it has allegedly ripened into a and ill-will among those who have been treated less generously
company practice" as the labor arbiter has put it. Having lost its than others.
catering business derived from Libyan students, Kamaya Hotel - The respondents cited financial business difficulties to justify
should not be penalized for its previous liberality. their termination of the complainants' employment. They were
An employer may not be obliged to assume a "double burden" given one-half (1/2) month of their salary for every year of
of paying the 13th month pay in addition to bonuses or other service. Due to continuing looms, they closed operations where
benefits aside from the employee's basic salaries or wages. they dismissed the second batch of employees who were given
Restated differently, we rule that an employer may not be one (1) month pay for every year they served. The third batch
obliged to assume the onerous burden of granting bonuses or of employees were terminated and were likewise given one (1)
other benefits aside from the employee's basic salaries or monthly pay for every year of service. The business climate
wages in addition to the required 13th month pay. when the complainants were terminated did not at all defer
Disposition petition is hereby GRANTED. The portion of the improvement-wise. The interval between the dates of
decision of the National Labor Relations Commission dated June termination was so close to each other, so that, no
25, 1986 ordering the payment of 14th month pay to private improvement in business maybe likely expected.
respondents is set aside. - The law requires the granting of the same amount of
separation benefits to the affected employees in any of the
cases. The respondent argued that the giving of more
DIMINUTION separation benefit to the second and third batches of
employees separated was their expression of gratitude and
benevolence to the remaining employees who have tried to
DAVAO FRUITS CORP V ASSOCIATED LABOR save and make the company viable in the remaining lays of
UNIONS operations. This justification is not plausible. There are workers
[PAGE 3] in the first batch who have rendered more years of service and
more efficient than those separated subsequently, yet, they did
not receive the same recognition.
MANAGEMENT FUNCTION - There was impermissible discrimination against the private
respondents in the payment of their separation benefits. The
law requires an employer to extend equal treatment to its
BUSINESSDAY INFORMATION SYSTEMS AND employees. It may not, in the guise of exercising management
SERVICES INC V NLRC (MOYA) prerogatives, grant greater benefits to some and less to others.
221 SCRA 9 Management prerogatives are not absolute prerogatives but are
GRIÑO-AQUINO; April 5, 1993 subject to legal limits, collective bargaining agreements, or
general principles of fair play and justice
2. NO
NATURE - The grant of a bonus is a prerogative, not an obligation, of the
PETITION for certiorari of the decision of the National Labor employer. The matter of giving a bonus over and above the
Relations Commission. worker's lawful salaries and allowances is entirely dependent on
the financial capability of the employer to give it. The fact that
FACTS the company's business was no longer profitable (it was in fact
- BSSI was engaged in the manufacture and sale of computer moribund) plus the fact that the private respondents did not
forms. Due to financial reverses, its creditors, the Development work up to the middle of the year (they were discharged in May
Bank of the Philippines (DBP) and the Asset Privatization Trust 1993) were valid reasons for not granting them a mid-year
(APT), took possession of its assets, including a manufacturing bonus.
plant in Marilao, Bulacan. 3. NO
- As a retrenchment measure, some plant employees, including - A corporate officer is not personally liable for the money
the private respondents, were laid off on May 16, 1988, after claims of discharged corporate employees unless he acted with
prior notice, and were paid separation pay equivalent to one- evident malice and bad faith in terminating their employment.
half (1/2) month pay for every year of service. Upon receipt on There is no evidence in this case that Locsin acted in bad faith
her separation may, the private respondents signed individual or with malice in carrying out the retrenchment and eventual
releases and quitclaims in favor of BSSI. closure of the company, hence, he may not be held personally
- BSSI retained some employees in an attempt to rehabilitate its and solidarily liable with the company for the satisfaction of the
business as a trading company. judgment in favor of the retrenched employees.
- However, barely two and a half months later, these remaining Disposition The resolution of the NLRC ordering the petitioner
employees were likewise discharged because the company company to pay separation pay differentials to the private
decided to cease business operations altogether. Unlike the respondents is AFFIRMED. However, the award of mid-year
private respondents, that batch of employees received bonus to them is hereby deleted and set aside. Petitioner Raul
separation pay equivalent to a full month's salary for every year Locsin is absolved from any personal liability to the respondent
of service plus mid-year bonus. employees. No costs.
- Protesting against the discrimination in the payment of their
separation benefits, the twenty-seven (27) private respondents
filed complaints against the BSSI and Raul Locsin. ASIAN TRANSUNION CORP V CA
[PAGE 45]
ISSUES
1. WON there was unlawful discrimination in the payment of
separation benefits to the employees. NATURE – BONUS – WHEN
2. WON the company is obliged to pay mid-year bonus.
3. WON Locsin should be held liable.
DEMANDABLE
HELD
Labor Law 1 A2010 - 170 - Disini
AMERICAN WIRE AND CABLE DAILY RATED review of the CIR resolution en banc of September 2, 1965
modifying the decision of the trial Judge of May 13, 1964
EMPLOYEES UNION V AMERICAN WIRE AND CABLE
- NDC, a government-owned and controlled corporation, in 1961
CO INC was the owner and operator of the vessels M/S "Doña Alicia",
[PAGE 4] "Doña Nati" and "Doña Aurora". It can be gathered from the
records that prior to April 15, 1961, said corporation decided to
LUZON STEVEDORING CORP V CIR dispose of these three vessels; and in the bidding that ensued,
LISTCO won. The crew members of the three vessels, through
15 SCRA 660 the Philippine Maritime Industrial Union (PMIU), made
BENGZON; December 31, 1965 representations with both the seller and the purchaser to retain
them in the service of' the vessels. And when in the final deed
of sale no provision on the hiring of the complement of the
NATURE vessels was included, the crew-members declared a strike on
Appeal from judgment and order of the Court of Industrial April 15, 1961. On April 25, 1961, the dispute was certified by
Relations the President to the CIR
- April 29, 1961 - the Industrial Court ordered that the three
FACTS Doña vessels mentioned in the presidential certification had
- The appeal is a consolidation of three actions filed for or already been sold by the government to the Liberation
against Luzon Steamship Company. Hence, the said company is indispensable
Stevedoring Corporation and Luzteveco Employees Association party in this litigation, without whom no final determination of
in connection with a strike called by the Union on January 2, this case can be had.
1959. The atrike came after another strike in 1958 and which - May 3, 1961- acting upon NDC's petition, alleging that the
was just decided on by the said Court. strike was causing the corporation an actual loss of about
- In any case, the strike was declared illegal due to four factors P15,000.00 daily, the court issued a return-to-work order, the
cited as follows: pertinent part of which reads:
a. the strike was declared without prior notice "During the pendency of this case, the management shall
b. the reduction from fifteen to ten days Christmas bonus refrain from dismissing any employee or laborer, unless with
could not be unfair labor practice considering the the express authority of this Court.”
nature of the collective bargaining contracts then - June 17, 1961 (Over a month arid a half after this order) -
existing between the parties representatives of the LISTCO posted notices around the M/S
c. the strike, being not only illegal, was conducted in a "Doha Alicia" to the effect that the officers and members of the
manner not sanctioned by law, specially the commission of crew not otherwise appointed by the said new owner will be
illegal acts at he picket line ejected. On the same day, 30 security guards and about 50
d. the workers at the Pandacan Bulk Oil Terminal are bound men with luggages came aboard the said vessels and never
by the provisions of the “no strike” clause of the CBA. departed therefrom until the vessel left port on June 21, 1961,
only after the remaining members of the original crew had been
ISSUE sent down.
WON the reduction of the bonus constituted unfair labor - The unlicensed crew members of the three "Doña" vessels
practice (the issue is being limited to this as this is the only thus petitioned the Industrial Court for an order to restrain
issue called to be discussed under the outline) LISTCO from carrying out its ejection threat of the officers
and/or crew members of the M/S "Doha Alicia" and of the two
HELD other "Doña" vessels upon their delivery to the new owner.
NO - June 30, 1961 - restraining order was issued against NDC and
- As a rule a bonus is an amount granted and paid to an LISTCO, directing the maintenance of status quo during the
employee for his industry and loyalty which contributed to the pendency of the dispute.
success of the employer’s business and made possible the - Petitioners' demands included
realization of profits. It is an act of generosity for which the To NDC
employee ought to be thankful and grateful. From a legal point > payments by NDC of a gratuity equivalent to one month
of view, a bonus is not a demandable and enforceable salary for every year of service from their employment up to
obligation. It would be different if this bonus was made part of the termination of their services on account of the sale of the
the wage, salary, or compensation. vessels to LISTCO
Reasoning > payment of strike-duration pay
- There was no showing that the Christmas bonus was pat of > commutation of accumulated vacation and sick leaves
the CBA as part of the salary or compensation. Thus, the grant > unpaid overtime services rendered from the dates of their
of this is contingent upon the profits being realized. The employment
reduced bonus in 1958 was a necessary consequence of a > gratuity and accumulated vacation and sick leaves to the
reduced profit in that year. and there being no clear showing officers and/or crew members who were on leave and were
that the reduction was aimed to discriminate against the Union, required by the NDC to man the Pew cargo liners from Japan to
the finding of the CIR stands. the Philippines.
Disposition Ruling of the CIR is affirmed To LISTCO
> retention as officers and/or crew members of the "Doña"
LIBERATION STEAMSHIP CO INC V CIR vessels
> observance or continuation of the collective bargaining
23 SCRA 1105 contract between NDC and the union until its expiration in June,
REYES JBL; June 27, 1968 1962,
> separation pay for any officer and/or crew members retained
NATURE but separated by LISTCO from the service within one year from
PETITIONS for review by certiorari of a resolution of the Court of the turnover of the vessels.
Industrial Relations. - May 13, 1964 - the TRIAL COURT rendered judgment:
> demand gratuity pay was denied
FACTS > entitled to accumulation of sick and vacation leaves with pay
- Petitions filed separately by the Liberation Steamship Co., Inc. not exceeding 5 months
(LISTCO) and the National Development Company (NDC) for the > claim for unpaid overtime was ruled out on the ground of
prescription
Labor Law 1 A2010 - 171 - Disini
> denied the demand for gratuity because gratuity is the crew of the vessels and the NDC as parties to the dispute.
essentially voluntary and the management cannot be Although not originally named as respondent. the court,
compelled to give the same. informed of the consummation of the sale, ordered the inclusion
> NDC responsible for the ejection of the crew of the M/S "Doña of LISTCO as an indispensable party.
Alicia", in view of its failure to incorporate in the deed of sale in - LISTCO cannot contest the authority of the trial judge in
favor of LISTCO a provision on the retention of the services of ordering it to be impleaded in the proceeding.
the complement of the vessels, in spite of the latter's requests (1) this being a certified case, the CIR, in the exercise of its
therefor prior to the consummation of the sale. arbitration power, can direct the inclusion or exclusion of
> NDC ordered to pay the back wages of the ejected crew up to parties therefrom; it is clothed with authority to issue such
the date of their actual reinstatement. order or orders as may be necessary to make effective the
> LISTCO was completely exonerated from any liability, the trial exercise of its jurisdiction, which may include the bringing in of
court reasoning that the lay off of the crew of the M/S "Doña parties into the case.
Alicia" was committed on June 21, 1961, or before said (2) what confers jurisdiction on the Industrial Court is not the
respondent became subject to the restraining order of June 30, form or manner of certification by the President, but the referral
1961. to said court of the industrial dispute between the employer and
- September 2, 1965 – CIR, upon the MFR of NDC, modified the the employee. Thus, the court is not deprived of jurisdiction
decision of the trial Judge over a case simply because the certification of the President is
> NDC and LISTCO solidarity liable for payment of the erroneous. That LISTCO was not so named in the certification
backwages would not make it any less the employer of the petitioning
> LISTCO equally responsible, the court en banc took into employees within the contemplation of law, since by the
account the fact that as of April 29, 1961, it was already an transfer of ownership of the vessels it actually became such
indispensable party to the case. Thus, with knowledge of the employer.
restraining order of May 3, 1961 to the "management" against 2. YES
unauthorized dismissal of employees and laborers, the court - April 29, 1961 LISTCO, as the new owner of the vessels, was
held that LISTCO could not claim to have acted in good faith included as an indispensable party in the litigation, "without
when it ejected the crew of the M/S "Doña Alicia" on June 21, which no final determination of this case can be had." It was,
1961. therefore, made of record that LISTCO was then already the
> increased the allowable accumulated vacation and sick owner and operator of the ships, there having been no showing
leaves with pay of the petitioners, from 5 to 10 months because that the management thereof was lodged in another; it was a
of RA1081. party against which any appropriate order shall be binding and
> new sale of the "Doña" vessels had taken place during the enforceable. The order of the trial judge to "the management",
pendency of the motion for reconsideration, the case was to reinstate the strikers under the last terms existing before the
ordered reopened, but only for the purpose of determining the dispute arose and to refrain from dismissing any employee or
merits of the demand for gratuity pay. laborer, could not have been directed solely against the NDC
- LISTCO assails but also to LISTCO which had the power to admit or discharge
> ruling on paying, jointly and severally with the NDC, back employees.
wages to the affected officers and crew members of the M/S 3. YES
"Doña Alicia", claiming - there is no reason for exempting the NDC from liability for
(1) that the Industrial Court was without jurisdiction over its payment of the employees' back wages. CIR’s back to work
persons, LISTCO not being a party to the labor dispute certified order simultaneously ordering management to refrain from
to it by the President; dismissing laborers without the labor court's authority was
(2) that the restraining order of May 3, 1961 did not include this already in full force, having been issued since May 3. Yet, in its
petitioner; and letter dated June 17, 1961 and sent to the Master of the M/S
(3) that it cannot legally be compelled to retain the services of "Doña Alicia", the General Manager of the NDC "enjoined" the
the original crew of the M/S "Doña Alicia" officers and crew members thereof, who were not selected by
- NDC raises the new owner to debark. This letter, in effect, was a defiance
(1) legality of the strike staged by the crews of the three of the Industrial Court's injunction, just as the LISTCO's
vessels and of their right to strike-duration pay replacement of the "Doña Alicia" crew was in disregard of the
(2) liability for such strike-duration pay and for reinstatement of same order. This cooperation and concordant action of both
the officers and crew-members who were not reemployed after appellants, plainly contrary to the express CIR order of May 3,
the conclusion of the Agreement of November 28, 1961 justifies their being held solidarily liable for the back wages of
(3) jurisdiction of' the Court of Industrial Relations over the the officers and crew of said motor vessel.
officers of the vessels 4. YES
(4) legality of the ruling that the crew-members are entitled to - RIGHT TO ACCUMULATION OF SICK AND VACATION LEAVES
accumulated sick and vacation leaves with pay WITH PAY - The lower court's recognition of the right of the
(5) correctness of the order of the court en banc to reopen the employees of the NDC, admittedly a government-owned and
case, insofar as the union's demands for gratuity are concerned controlled corporation to accumulation of sick and vacation
leaves with pay is based on the provisions of Government
ISSUES Enterprises Counsel Circular No. 4 of March 1948 and of
1. WON CIR has jurisdiction over the case since, at that time, Sections 294-286 of the Administrative Code as amended by
LISTCO is not an employer of the petitioners Republic Act No. 1081, which increased the allowable
2. WON LISTCO is bound by the TRO accumulated vacation and sick of government employees to
3. WON NDC is liable for backwages 10 months. The fact that the officers and unlicensed members
4. WON crew-members are entitled to accumulated sick and of the crew of the vessel had a collective bargaining contract
vacation leaves with pay that did not contain any provision on the payment of
5. WON crew-members are entitled to gratuity accumulated leaves does not by itself bar the employees' resort
to the Leave Law. The rule is that the law forms part of, and
HELD into, every contract, unless clearly excluded therefrom in those
1. YES cases where such exclusion is allowed.
- It cannot be denied that when the certification was made by 5. There should be a reopening of the case to determine
the President on April 25, 1961, and the Court of Industrial whether such conditions operated in the instant case
Relations assumed jurisdiction over the case, the three "Doña" - GRANT OF GRATUITY; NORMALLY DISCRETIONARY BUT MAY
vessels were still owned and operated by the NDC. BECOME PART OF COMPENSATION.- While normally
Understandably, the presidential certification mentioned only discretionary, the grant of a gratuity or bonus by reason of its
Labor Law 1 A2010 - 172 - Disini
long and regular concession may become regarded as part of c. While rights may be waived, the same must not be contrary
regular compensation. (Phil. Education Co., Inc., vs. C.I.R., 92 to law, public order, public policy, morals or good customs or
Phil., 382, 385). For this reason, where there is a resale of the prejudicial to a third person with a right recognized by law.
vessels to another party during the pendency of the motion for - Article 6 of the Civil Code renders a quitclaim agreement void
reconsideration, the court may order the reopening of the case ab initio where the quitclaim obligates the workers concerned to
insofar as the demands for gratuity are concerned, in order to forego their benefits while at the same time exempting the
determine whether aforecited conditions operated in the instant employer from any liability that it may choose to reject. This
case. runs counter to Art. 22 of the Civil Code which provides that no
Disposition resolution appealed from is hereby affirmed one shall be unjustly enriched at the expense of another.
Ratio On Service Awards and other Bonuses - The
petitioners are entitled to receive service awards and other
MARCOS V NLRC (INSULAR LIFE ASSURANCE CO
bonuses. The contention of the respondent that service award is
LTD) a bonus and therefore is an act of gratuity which the
248 SCRA 146 complainants have no right to demand and service awards are
REGALADO; September 8, 1995 governed by respondent's employee's manual and (are)
therefore contractual in nature is not impressive.
NATURE Reasoning
Petition for certiorari a. Anniversary and performance bonuses have ripened into a
company practice therefore become demandable. It is not
FACTS disputed that it is respondent's practice to give an anniversary
- Petitioners were regular employees of private respondent bonus every five years from its incorporation. The prerogative
Insular Life Assurance Co., Ltd., but they were dismissed when of the employer to determine who among its employees shall
their positions were declared redundant. A special redundancy be entitled to receive bonuses which are, as a matter of
benefit was paid to them. However, not included in this practice, given periodically cannot be exercised arbitrarily.
redundancy benefit were their respective service awards and b. Pursuant to their policies on the matter, the service award
other prorated bonuses which they had earned at the time they differential is given at the end of the year to an employee who
were dismissed. Because of this, petitioners questioned the has completed years of service divisible by 5.
redundancy package. Nevertheless, they signed a Release and c. A bonus is not a gift or gratuity, but is paid for some
Quitclaim but with a written protest reiterating their previous services or consideration and is in addition to what would
demand that they were nonetheless entitled to receive their ordinarily be given. The term "bonus" as used in employment
service awards. contracts, also conveys an idea of something which is
- Petitioners inquired from the Legal Service of the Department gratuitous, or which may be claimed to be gratuitous, over and
of Labor and Employment whether respondent corporation above the prescribed wage which the employer agrees to
could legally refuse the payment of their service awards as pay.
mandated in their Employee's Manual. - If one enters into a contract of employment under an
- DOLE ruled in their favor. However, this decision was agreement that he shall be paid a certain salary by the week or
overturned by the NLRC affirming the validity of the “Release some other stated period and, in addition, a bonus, in case he
and Quitclaim” which consequently bar the petitioners to serves for a specified length of time, there is no reason for
demand for service awards and other bonuses. Thus, this refusing to enforce the promise to pay the bonus, if the
petition. employee has served during the stipulated time, on the ground
that it was a promise of a mere gratuity.
ISSUE Disposition The assailed decision and resolution of
WON respondent NLRC committed reversible error or grave respondent National Labor Relations Commissions are hereby
abuse of discretion in affirming the validity of the "Release and SET ASIDE and the decision of Labor Arbiter Alex Arcadio Lopez
Quitclaim" and, consequently, that petitioners are not entitled is REINSTATED.
to payment of service awards and other bonuses
PHILIPPINE NATIONAL CONSTRUCTION CORP V
NLRC (ANGELES, PABLO, JR)
HELD
307 SCRA 218
YES 18 May 1999
Ratio On “Release and Quitclaim” - The fact that an
employee has signed a satisfaction receipt for his claims does NATURE
not necessarily result in the waiver thereof. The law does not Petition for certiorari of a decision of NLRC.
consider as valid any agreement whereby a worker agrees to
receive less compensation than what he is entitled to recover. A FACTS
deed of release or quitclaim cannot bar an employee from - ANGELES and PABLO, JR. [COMPLAINANTS, for brevity] were
demanding benefits to which he is legally entitled. Renuntiatio employed by PNCC as tollway guards. Acting on a private
non praesumitur. While there may be possible exceptions to complaint regarding “mulcting activities” of some of its tollway
this holding, we do not perceive any in the case at bar. personnel, PNCC created an investigating team. During its
Reasoning investigation, said team saw COMPLAINANTS accept cash and a
a. The element of total voluntariness in executing that dog from a motorist.
instrument is negated by the fact that they expressly stated - After due investigation, COMPLAINANTS were dismissed by
therein their claim for the service awards, a manifestation PNCC for serious misconduct. When the COMPLAINANTS’
equivalent to a protest and a disavowal of any waiver thereof. complaint for illegal dismissal reached NLRC, the latter held
b. Petitioners even sought the opinion of the Department of that COMPLAINANTS’ act of receiving a sum of money and a dog
Labor and Employment to determine where and how they stood from motorists constituted bribery which was a sufficient
in the controversy. This act only shows their adamant desire to ground for their dismissal. NLRC, nonetheless, ordered PNCC to
obtain their service awards and to underscore their pay COMPLAINANTS their mid-year bonus for 1994, among
disagreement with the "Release and Quitclaim" they were others. Hence, the present petition.
virtually forced to sign in order to receive their separation pay.
ISSUE
WON COMPLAINANTS entitled to the disputed mid-year bonus
Labor Law 1 A2010 - 173 - Disini
- NLRC4 granted all of private respondent's claims, except for
damages ordering respondent- appellee to pay complainant-
appellant:
1. The unpaid bonus (mid-year and Christmas bonus) and 13th
HELD month pay;
NO 2. Wage differentials under Wage Order No. 6 for November 1,
Ratio A bonus is a gift from the employer and the grant 1984 and the corresponding adjustment thereof; and
thereof is a management prerogative. A bonus becomes a 3. Holiday pay under Article 94 of the Labor Code, but not to
demandable or enforceable obligation only when it is made part exceed three (3) years.
of the compensation of the employee. “Whether… a bonus - Petitioner now contends that the NLRC gravely abused its
forms part of wages depends upon the circumstances… for its discretion in ruling as it did for the succeeding reasons stated in
payment. If it is additional compensation which the employer its Petition
promised and agreed to give without any conditions imposed
for its payment, such as success of business or greater ISSUES
production or output, then it is part of the wage. But if it is paid 1. WON petitioner should pay the unpaid bonus
only if profits are realized or if a certain level of productivity is 2. WON petitioner should pay the 13th month pay
achieved, it cannot be considered part of the wage. Where it 3. WON petitioner complied with Wage Order No.6
is… payable… only to some employees and only when their 4. WON petitioner complied with Art.94 of the Labor Code on
labor becomes more efficient or more productive, it is only an holiday pay
inducement for efficiency, a prize therefor, not a part of the
wage” [citing Metro Transit vs NLRC, 245 SCRA 767 (1995)].