8/11/2019 30-44n

1/44

2.]\

Nestle Philippines vs NLRC Case DigestNestle Philippines, Inc. vs. NLRC and Union of Filipro Employees193 SCRA 504

Facts: Four (4) collective bargaining agreements separately covering the petitioner's employees inits Alabang/Cabuyao factories; Makati Administration Office. (Both Alabang/Cabuyao factories andMakati office were represented by the respondent, Union of Filipro Employees [UFE]);Cagayan deOro Factory represented by WATU; and Cebu/Davao Sales Offices represented by the Trade Unionof the Philippines and Allied Services (TUPAS), all expired on June 30, 1987. UFE was certified asthe sole and exclusive bargaining agent for all regular rank-and-file employees at the petitioner'sCagayan de Oro factory, as well as its Cebu/Davao Sales Office.

In August 1987, while the parties, were negotiating, the employees at Cabuyao resorted to a"slowdown" and walk-outs prompting the petitioner to shut down the factory. Marathon collectivebargaining negotiations between the parties ensued. On September 1987, the UFE declared abargaining deadlock. On September 8, 1987, the Secretary of Labor assumed jurisdiction and issueda return to work order. In spite of that order, the union struck, without notice, at the

Alabang/Cabuyao factory, the Makati office and Cagayan de Oro factory on September 11, 1987 upto December 8, 1987. The company retaliated by dismissing the union officers and members of thenegotiating panel who participated in the illegal strike. The NLRC affirmed the dismissals onNovember 2, 1988. On January 26, 1988, UFE filed a notice of strike on the same ground of CBAdeadlock and unfair labor practices.

However, on March 30, 1988, the company was able to conclude a CBA with the union at theCebu/Davao Sales Office, and on August 5, 1988, with the Cagayan de Oro factory workers. Theunion assailed the validity of those agreements and filed a case of unfair labor practice against the

company on November 16, 1988. After conciliation efforts of the NCMB yielded negative results, thedispute was certified to the NLRC. The NLRC issued a resolution on June 5, 1989, whose pertinentdisposition regarding the union's demand for liberalization of the company's retirement plan for itsworkers. the NLRC issued a resolution denying the motions for reconsideration. With regard to theRetirement Plan, the NLRC held that Anent management's objection to the modification of itsRetirement Plan, the plan is specifically mentioned in the previous bargaining agreements therebyintegrating or incorporating the provisions thereof to the agreement. By reason of its incorporation,the plan assumes a consensual character which cannot be terminated or modified at will by eitherparty. Consequently, it becomes part and parcel of CBA negotiations.

Petitioner alleged that since its retirement plan is non-contributory, Nestle has the sole and exclusiveprerogative to define the terms of the plan because the workers have no vested and demandablerights, the grant thereof being not a contractual obligation but merely gratuitous. At most thecompany can only be directed to maintain the same but not to change its terms. It should be left tothe discretion of the company on how to improve or modify the same.

Issue: Whether or not the workers have vested and demandable rights over the retirement plan.

Ruling: The Court ruled that employees have a vested and demandable right over the retirementplan. The inclusion of the retirement plan in the collective bargaining agreement as part of thepackage of economic benefits extended by the company to its employees to provide them ameasure of financial security after they shall have ceased to be employed in the company, reward

8/11/2019 30-44n

2/44

their loyalty, boost their morale and efficiency and promote industrial peace, gives "a consensualcharacter" to the plan so that it may not be terminated or modified at will by either party.

The fact that the retirement plan is non-contributory, i.e., that the employees contribute nothing tothe operation of the plan, does not make it a non-issue in the CBA negotiations. As a matter of fact,almost all of the benefits that the petitioner has granted to its employees under the CBA salary

increases, rice allowances, midyear bonuses, 13th and 14th month pay, seniority pay, medical andhospitalization plans, health and dental services, vacation, sick & other leaves with pay are non-contributory benefits. Since the retirement plan has been an integral part of the CBA since 1972, theUnion's demand to increase the benefits due the employees under said plan, is a valid CBA issue.

The petitioner's contention, that employees have no vested or demandable right to a non-contributory retirement plan, has no merit for employees do have a vested and demandable rightover existing benefits voluntarily granted to them by their employer. The latter may not unilaterallywithdraw, eliminate or diminish such benefits.

30.

Q. A deliveryman of Petitioner Company filed a complaint for illegal dismissal and non-paymentof basic wages and certain monetary benefits. He was suspected of selling fruits of his employerat a higher price, and pocketing the difference. The LA found in favor of the employee andordered petitioner Company to reinstate him with back wages, salary differentials, 13 th monthpay and service incentive pay. The NLRC reversed the decision and ruled that privaterespondent was not entitled to reinstatement with back wages except for the award of salarydifferentials due to underpayment.

A. The SC agrees with the LA and held that private respondent was indeed illegally dismissed. Itwas only upon his complaint regarding his low salary that he was no longer allowed to reportfor work. This amounted to dismissal without cause and without the requisite written notice.Such circumstances make it difficult to sustain any allegation of abandonment. Abandonment,as a just and valid cause for termination, requires a deliberate and unjustified refusal of anemployee to resume his work, coupled with a clear absence of any intention of returning to hisor her work.With regard to the salary differentials granted, petitioners claim exemption under RA 6727(Wage Rationalization Act) and the Rules Implementing Wage Order Nos. NCR-01 and NCR-01-A, as well as Wage Order Nos. NCR-02 and NCR-02-A. However, regardless of the factual

circumstances in this case, the SC was not convinced as the petitioners could not even showany approved application for exemption, as required by the applicable guidelines issued by theCommission. (C. Planas Commercial v. NLRC, 303 SCRA 49 (1999))

31. Globe mackay

http://www.blogger.com/share-post.g?blogID=927108349632114149&postID=2122431320837708639&target=email

8/11/2019 30-44n

3/44

8/11/2019 30-44n

4/44

8/11/2019 30-44n

5/44

IT IS SO ORDERED.

36.

Philippine Duplicators, Inc. vs. NLRC, 241SCRA 380 (1995)Posted by Pius Morados on November 10, 2011

(Labor Standards Commissions included in the computation of 13 th month pay) Facts : Petitioner Corporation pays its salesmen a small fixed or guaranteed wage; the greater part of the latters

wages or salaries being composed of the sales or incentive commissions earned on actual sales of duplicating

machines closed by them. Thus the sales commissions received for every duplicat ing machine sold constituted part

of the basic compensation or remuneration of the salesmen of the Philippine Duplicators for doing their job.

The Labor Arbiter directed Petitioner Duplicators to pay 13 th month pay to private respondent employees computed

on the basis of their fixed wages plus sales commission.

Sec. 4 of the Supplementary Rules and Regulations Implementing PD No. 851 (Revised Guidelines Implementing

13 th Month Pay) provides that overtime pay, earning and other remuneration which are not part of the basic salary

shall not be included in the computation of the 13 th month pay.

Petitioner Corporation contends that their sales commission should not be included in the computation of the

13 th month pay invoking the consolidated cases of Boie-Takeda Chemicals, Inc. vs Hon. Dionisio dela Serna and

Philippine Fuji Xerox Corp. vs Hon. Crecencio Trajano, were the so-called commissions of medical representatives of

Boie-Takeda Chemicals and rank-and-file employees of Fuji Xerox Co. were not included in th e term basic salary in

computing the 13 th month pay.

Issue : WON sales commissions comprising a pre-determined percent of the selling price of the goods are included in

the computation of the 13 th month pay.

Held : Yes. These commission which are an inte gral part of the basic salary structure of the Philippine Duplicators

employees-salesmen, are not overtime payments, nor profit-sharing payments nor any other fringe benefit. Thus,

salesmens commissions comprising a pre -determined percent of the selling price of the goods were properly

included in the term basic salary for purposes of computing the 13 th month pay.

Commissions of medical representatives of Boie-Takeda Chemicals and rank-and-file employees of Fuji Xerox Co.

were not included in the term basic salary because these were paid as productivity bonuses which is not included

in the computation of 13 th month pay.

PHILIPPINE DUPLICATORS, INC., petitioner,vs.NATIONAL LABOR RELATIONS COMMISSION and PHILIPPINE DUPLICATORS EMPLOYEESUNION-TUPAS, respondents.

R E S O L U T I O N

http://piusmorados.wordpress.com/author/piusmorados/http://piusmorados.wordpress.com/2011/11/10/philippine-duplicators-inc-vs-nlrc-241-scra-380-1995/http://piusmorados.wordpress.com/2011/11/10/philippine-duplicators-inc-vs-nlrc-241-scra-380-1995/http://piusmorados.wordpress.com/author/piusmorados/

8/11/2019 30-44n

6/44

FELICIANO, J .:

On 11 November 1993, this Court, through its Third Division, rendered a decision dismissing thePetition for Certiorari filed by petitioner Philippine Duplicators, Inc. (Duplicators) in G.R. No. 110068.The Court upheld the decision of public respondent National Labor Relations Commission (NLRC),which affirmed the order of Labor Arbiter Felipe T. Garduque II directing petitioner to pay 13th month

pay to private respondent employees computed on the basis of their fixed wages plus salescommissions. The Third Division also denied with finality on 15 December 1993 the Motion forReconsideration filed (on 12 December 1993) by petitioner.

On 17 January 1994, petitioner Duplicators filed (a) a Motion for Leave to Admit Second Motion forReconsideration and (b) a Second Motion for Reconsideration. This time, petitioner invoked thedecision handed down by this Court, through its Second Division, on 10 December 1993 in the two(2) consolidated cases of Boie-Takeda Chemicals, Inc . vs . Hon . Dionisio de la Serna and PhilippineFuji Xerox Corp . vs . Hon . Cresenciano B .Trajano , in G.R. Nos. 92174 and 102552, respectively. Inits decision, the Second Division inter alia declared null and void the second paragraph of Section 5(a) 1 of the Revised Guidelines issued by then Secretary of Labor Drilon. Petitioner submits that thedecision in the Duplicators case should now be considered as having been abandoned or reversed bythe Boie-Takeda decision, considering that the latter went "directly opposite and contrary to" theconclusion reached in the former. Petitioner prays that the decision rendered in Duplicators be set asideand another be entered directing the dismissal of the money claims of private respondent PhilippineDuplicators' Employees' Union.

In view of the nature of the issues raised, the Third Division of this Court referred the petitioner'sSecond Motion for Reconsideration, and its Motion for Leave to Admit the Second Motion forReconsideration, to the Court en banc en consulta . The Court en banc , after preliminary deliberation,and inorder to settle the condition of the relevant case law, accepted G.R. No. 110068 asa banc case.

Deliberating upon the arguments contained in petitioner's Second Motion for Reconsideration, aswell as its Motion for Leave to Admit the Second Motion for Reconsideration, and after review of the

doctrines embodied, respectively, in Duplicators and Boie-Takeda , we consider that these Motionsmust fail.

The decision rendered in Boie-Takeda cannot serve as a precedent under the doctrine of staredecisis . The Boie-Takeda decision was promulgated a month after this Court, (through its ThirdDivision), had rendered the decision in the instant case. Also, the petitioner's (first) Motion forReconsideration of the decision dated 10 November 1993 had already been denied, with finality , on15 December 1993, i .e .; before the Boie-Takeda decision became final on 5 January 1994.

Preliminarily, we note that petitioner Duplicators did not put in issue the validity of the RevisedGuidelines on the Implementary on of the 13th Month Pay Law, issued on November 16, 1987, bythen Labor Secretary Franklin M. Drilon, either in its Petition for Certiorari or in its (First) Motion for

Reconsideration. In fact, petitioner's counsel relied upon these Guidelines and asserted their validityin opposing the decision rendered by public respondent NLRC. Any attempted change in petitioner'stheory, at this late stage of the proceedings, cannot be allowed.

More importantly, we do not agree with petitioner that the decision in Boie-Takeda is "directlyopposite or contrary to" the decision in the present (Philippine Duplicators). To the contrary, thedoctrines enunciated in these two (2) cases in fact co-exist one with the other. The two (2) casespresent quite different factual situations (although the same word "commissions" was used orinvoked) the legal characterizations of which must accordingly differ.

8/11/2019 30-44n

7/44

The Third Division in Durplicators found that:

In the instant case, there is no question that the sales commission earned by thesalesmen who make or close a sale of duplicating machines distributed by petitionercorporation, constitute part of the compensation or remuneration paid to salesmenfor serving as salesmen, and hence as part of the "wage" or salary of petitioner's

salesmen. Indeed, it appears that petitioner pays its salesmen a small fixed orguaranteed wage; the greater part of the salesmen's wages or salaries beingcomposed of the sales or incentive commissions earned on actual sales closed bythem. No doubt this particular galary structure was intended for the benefit of thepetitioner corporation, on the apparent assumption that thereby its salesmen wouldbe moved to greater enterprise and diligence and close more sales in the expectationof increasing their sales commissions. This, however, does not detract from thecharacter of such commissions as part of the salary or wage paid to each of itssalesmen for rendering services to petitioner corporation.

In other words, the sales commissions received for every duplicating machine sold constituted partof the basic compensation or remuneration of the salesmen of Philippine Duplicators for doing their

job. The portion of the salary structure representing commissions simply comprised an automaticincrement to the monetary value initially assigned to each unit of work rendered by a salesman.Especially significant here also is the fact that the fixed or guaranteed portion of the wages paid tothe Philippine Duplicators' salesmen represented only 15%-30% of an employee's total earnings in ayear. We note the following facts on record:

Salesmen's Total Earnings and 13th Month PayFor the Year 1986 2

Name of Total Amount Paid Montly FixedSalesman Earnings as 13th Month Pay Wages x 12 3

Baylon, P76,610.30 P1,350.00 P16,200.00Benedicto

Bautista 90,780.85 1,182.00 14,184.00Salvador

Brito, 64,382.75 1,238.00 14,856.00Tomas

Bunagan, 89,287.75 1,266.00 15,192.00Jorge

Canilan, 74,678.17 1,350.00 16,200.00Rogelio

Dasig, 54,625.16 1,378,00 16,536.00Jeordan

Centeno, 51,854.15 1,266.04 15,192.00Melecio, Jr.

8/11/2019 30-44n

8/44

De los Santos 73,551.39 1,322.00 15,864.00Ricardo

del Mundo, 108,230.35 1,406.00 16,872.00Wilfredo

Garcia, 93,753.75 1,294.00 15,528.00Delfin

Navarro, 98,618.71 1,266.00 15,192.00Ma. Teresa

Ochosa, 66,275.65 1,406.00 16,872.00Rolano

Quisumbing, 101,065.75 1,406.00 16,872.00Teofilo

Rubina, 42,209.73 1,266.00 15,192.00Emma

Salazar, 64,643.65 1,238.00 14,856.00Celso

Sopelario, 52,622.27 1,350.00 16,200.00Ludivico

Tan, 30,127.50 1,238.00 14,856.00Leynard

Talampas, 146,510.25 1,434.00 17,208.00Pedro

Villarin, 41,888.10 1,434.00 17,208.00Constancio

Carrasco, 50,201.20 403.75 * Cicero

Punzalan, 24,351.89 1,266.00 15,192.00Reynaldo

Poblador, 25,516.75 323.00 * Alberto

Cruz, 32,950.45 323.00 * Danilo

Baltazar, 15,681.35 323.00 * Carlito

8/11/2019 30-44n

9/44

8/11/2019 30-44n

10/44

salaries or wages . . ." (Kamaya Point Hotel v. NLRC, 177 SCRA 160[1989]). 10 (Emphasis supplied)

If an employer cannot be compelled to pay a productivity bonus to his employees, it should followthat such productivity bonus, when given, should not be deemed to fall within the "basic salary" ofemployees when the time comes to compute their 13th month pay.

It is also important to note that the purported "commissions" paid by the Boie-Takeda Company to itsmedical representatives could not have been "sales commissions" in the same sense that PhilippineDuplicators paid its salesmen Sales commissions. Medical representatives are not salesmen; theydo not effect any sale of any article at all. In common commercial practice, in the Philippines andelsewhere, of which we take judicial notice, medical representatives are employees engaged in thepromotion of pharmaceutical products or medical devices manufactured by their employer. Theypromote such products by visiting identified physicians and inform much physicians, orally and withthe aid of printed brochures, of the existence and chemical composition and virtues of particularproducts of their company. They commonly leave medical samples with each physician visited; butthose samples are not "sold" to the physician and the physician is, as a matter of professional ethics,prohibited from selling such samples to their patients. Thus, the additional payments made to Boie-Takeda's medical representatives were not in fact sales commissions but rather partook of thenature of profit-sharing bonuses.

The doctrine set out in the decision of the Second Division is, accordingly, that additional paymentsmade to employees, to the extent they partake of the nature of profit-sharing payments , are properlyexcluded from the ambit of the term "basic salary" for purposes of computing the 13th month paydue to employees. Such additional payments are not "commissions" within the meaning of thesecond paragraph of Section 5 (a) of the Revised Guidelines Implementing 13th Month Pay.

The Supplementary Rules and Regulations Implementing P.D. No. 851 subsequently issued byformer Labor Minister Ople sought to clarify the scope of items excluded in the computation of the13th month pay; viz .:

Sec. 4. Overtime pay, earnings and other remunerations which are not part of thebasic salary shall not be included in the computation of the 13th month pay.

We observe that the third item excluded from the term "basic salary" is cast in open ended andapparently circular terms: "other remunerations which are not part of the basic salary." However,what particular types of earnings and remuneration are or are not properly included or integrated inthe basic salary are questions to be resolved on a case to case basis, in the light of the specific anddetailed facts of each case. In principle, where these earnings and remuneration are closely akin tofringe benefits, overtime pay or profit-sharing payments, they are properly excluded in computing the13th month pay. However, sales commissions which are effectively an integral portion of the basicsalary structure of an employee, shall be included in determining his 13th month pay.

We recognize that both productivity bonuses and sales commissions may have an incentive effect.But there is reason to distinguish one from the other here. Productivity bonuses are generally tied tothe productivity or profit generation of the employer corporation. Productivity bonuses are not directlydependent on the extent an individual employee exerts himself. A productivity bonus is somethingextra for which no specific additional services are rendered by any particular employee and hencenot legally demandable, absent a contractual undertaking to pay it. Sales commissions, on the otherhand, such as those paid in Duplicators , are intimately related to or directly proportional to the extentor energy of an employee's endeavors. Commissions are paid upon the specific results achieved by

8/11/2019 30-44n

11/44

8/11/2019 30-44n

12/44

8/11/2019 30-44n

13/44

In connection with and in implementation of Memorandum Order No. 28, the then Minister of Laborand Employment issued MOLE Explanatory Bulletin No. 86-12 on November 24, 1986. Item No. 5(a) of the said issuance read:

xxx xxx xxx

Employees who are paid a fixed or guaranteed wage plus commission are also entitled to themandated 13th month pay, based on their total earning(s) during the calendar year, i .e ., onboth their fixed and guaranteed wage and commission.

xxx xxx xxx

(emphasis ours)

From the foregoing legal milieu, it is clear that every employee receiving a commission in addition toa fixed or guaranteed wage or salary, is entitled to a 13th month pay. For purposes of entitling rankand file employees a 13th month pay, it is immaterial whether the employees concerned are paid aguaranteed wage plus commission or a commission with guaranteed wage inasmuch as the botton

line is that they receive a guaranteed wage. This is correctly construed in the MOLE ExplanatoryBulletin No. 86-12.

In the case at bench, while the bus drivers and conductors of respondent company are consideredby the latter as being compensated on a commission basis, they are not paid purely by what theyreceive as commission. As admitted by respondent company, the said bus drivers and conductorsare automatically entitled to the basic minimum pay mandated by law in case the commissions theyearned be less than their basic minimum for eight (8) hours work. 6 Evidently therefore, thecommissions form part of the wage or salary of the bus drivers and conductors. A contrary interpretationwould allow an employer to skirt the law and would result in an absurd situation where an employee whoreceives a guaranteed minimum basic pay cannot be entitled to a 13th month pay simply because he istechnically referred to by his employer per the CBA as an employee compensated on a purelycommission basis. Such would be a narrow interpretation of the law, certainly not in accord with theliberal spirit of our labor laws. Moreover, what is controlling is not the label attached to the remunerationthat the employee receives but the nature of the remuneration 7 and the purpose for which the 13th monthpay was given to alleviate the plight of the working masses who are receiving low wages. This is extantfrom the "WHEREASES" of PD 851, to wit:

WHEREAS, it is necessary to further protect the level of real wages from the ravage ofworld-wide inflation.

WHEREAS, there has been no increase in the legal minimum wage since 1970.

WHEREAS, the Christmas season is an opportune time for society to show its concern forthe plight of the working masses so they may properly celebrate Christmas and New Year.

Misplaced legal hermeneutics cannot be countenanced to evade paying the rank and file what is dueto them under the law.

Commission is the recompense, compensation, reward of an employee, agent, salesman, executor,trustee, receiver, factor, broker or bailee, when the same is calculated as a percentage on theamount of his transactions or on the profit of the principal. 8 While said commissions may be in the formof incentives or encouragement to inspire said bus drivers and conductors to put a little more zeal andindustry on their jobs, still, it is safe to say that the same are direct remunerations for services rendered,

8/11/2019 30-44n

14/44

given the small remuneration they receive for the services they render, 9 which is precisely the reason whyprivate respondent allowed the drivers and conductors a guaranteed minimum wage. The conclusion isineluctable that said commissions are part of their salary. In Philippine Duplicators, Inc . v . National LaborRelations Commission, 10 we had the occasion to estate that:

. . . Article 97 (f) of the Labor Code defines the term "wage" (which is equivalent to "salary,"

as used in P.D. No. 851 and Memorandum Order No. 28) in the following terms:

(f) "Wage" paid to any employee shall mean the remuneration or earnings,however designated, capable of being expressed in term of money, money,whether fixed or ascertained on a time, task, piece, or commission basis, orother method of calculating the same, which is payable by an employer toemployee under a written or unwritten contract of employment for work doneor to be done, or for services rendered or to be rendered, and includes thefair and reasonable value, as determined by the Secretary of Labor, of board,lodging, or other facilities customarily furnished by the employer to theemployee. "Fair and reasonable value" shall not include any profit to theemployer or to any person affiliated with the employer.

In the instant case, there is no question that the sales commissions earned by salesmen whomake or close a sale of duplicating machines distributed by petitioner corporation, constitutepart of the compensation or remuneration paid to salesmen for serving as salesmen, andhence as part of the "wage" or "salary" of petitioner's salesmen. Indeed, it appears thatpetitioner pays its salesmen a small fixed or guaranteed wage; the greater part of thesalesmen's wages or salaries being composed of the sales or incentive commissions earnedon actual sales closed by them. No doubt this particular salary structure was intended for thebenefit of petitioner corporation, on the apparent assumption that thereby its salesmen wouldbe moved to greater enterprise and diligence and close more sales in the expectation ofincreasing their sales commissions. This, however, does not detract from the character ofsuch commissions as part of the salary or wage paid to each or its salesmen for renderingservices to petitioner corporation. 11

In sum, the 13th month pay of the bus drivers and conductors who are paid a fixed or guaranteedminimum wage in case their commissions be less than the statutory minimum, and commissionsonly in case where the same is over and above the statutory minimum, must be equivalent to one-twelfth (1/12) of their total earnings during the calendar year.

WHEREFORE, the petition is hereby GRANTED. The decision of respondent National LaborRelations Commission is hereby REVERSED and SET ASIDE. The case is remanded to the labor

Arbiter for the proper computation of 13th month pay.

SO ORDERED.

38.

ARCHILLES MANUFACTURING CORPORATION, ALBERTO YU and ADRIAN YU, petitioners,vs.NATIONAL LABOR RELATIONS COMMISSION, GERONIMO MANUEL, ARNULFO DIAZ, JAIMECARUNUNGAN and BENJAMIN RINDON, respondents.

8/11/2019 30-44n

15/44

BELLOSILLO, J .:

There are three issues to be resolved in this special civil action for certiorari under Rule 65 of theRevised Rules of Court, namely: (a) whether a writ of execution is still necessary to enforce theLabor Arbiter's order of immediate reinstatement pending appeal; (b) whether dismissal for causeresults in the forfeiture of the employee's right to a 13th month pay; and, (c) whether the award ofattorney's fees is proper in the instant case.

Archilles Manufacturing Corporation (ARCHILLES for brevity), Alberto Yu and Adrian Yu are thepetitioners, the latter two (2) being the Chairman and the Vice-President of ARCHILLES,respectively. Private respondents Geronimo Manuel, Arnulfo Diaz, Jaime Carunungan and BenjaminRindon were employed by ARCHILLES as laborers in its steel factory located in BarangayPandayan, Meycauayan, Bulacan, each receiving a daily wage of P96.00. 1

ARCHILLES was maintaining a bunkhouse in the work area which served as resting place for itsworkers including private respondents. In 1988 a mauling incident nearly took place involving a

relative of an employee. As a result ARCHILLES prohibited its workers from bringing any member oftheir family to the bunkhouse. But despite this prohibition, private respondents continued to bringtheir respective families to the bunkhouse, causing annoyance and discomfort to the otherworkers. 2 This was brought to the attention of ARCHILLES.

On 11 May 1990 the management ordered private respondent to remove their families from thebunkhouse and to explain their violation of the company rule. Private respondents remove theirfamilies from the premises but failed to report to the management as required; instead, theyabsented themselves from 14 to 18 May 1990. Consequently, on 18 May 1990, ARCHILLESterminated their employment for abandonment and for violation of the company rule regarding theuse of the bunkhouse. 3

Private respondents filed a complaint for illegal dismissal. On 10 July 1991 the Labor Arbiter foundthe dismissal of private respondents illegal and ordered their reinstatement as well as the paymentto them the backwages, proportionate 13th month pay for the year 1990 and attorney'sfees. 4 ARCHILLES appealed.

On 10 September 1991 private respondent filed with public respondent National Labor RelationsCommission a motion for the issuance of a writ of execution for their immediate reinstatement,pending appeal, either physically or in the company payroll. On 19 September 1991 ARCHILLESopposed the motion.

Since no action was taken by NLRC on the motion of 10 September 1991, private respondents fileda similar motion on 15 July 1992. Both motions however have remained unresolved.

On 11 August 1992 NLRC vacated and set aside the decision of the Labor Arbiter and ruled that thedismissal of private respondents was valid since they wilfully disobeyed a lawful order of theiremployer requiring them to explain their infraction of a company rule. In the dispute part of itsdecision, however, NLRC ordered ARCHILLES to pay private respondents their "withheld" salariesfrom 19 September 1991 when it filed its opposition to the motion for issuance of a writ of executionuntil the promulgation of the NLRC Decision (11 August 1992) on the ground that the order ofreinstatement of the Labor Arbiter was immediately executory, even pending appeal. And since

ARCHILLES in its opposition alleged that actual reinstatement was no longer possible as it wouldaffect the peace and order situation in the steel factory, clearly, ARCHILLES had opted for payroll

8/11/2019 30-44n

16/44

reinstatement of private respondents. NLRC also ordered ARCHILLES to pay their proportionate13th month pay for 1990 and P12,351.30 representing 10% of the total judgment award ofP123,513.00 as attorney's fees. 5

Their motion for partial reconsideration having been denied by public respondent in its resolution of 8September 1992, petitioners filed the instant petition praying that the questioned NLRC decision of

11 August 1992 as well as its resolution of 8 September 1992 be partially annulled in connectionwith the award of "withheld" salaries, proportionate 13th month pay and attorney's fees.

As regards the first issue, i.e ., whether a writ of execution is still necessary to enforce the Labor Arbiter's order of immediate reinstatement even when pending appeal, we agree with petitioners thatit is necessary. The third paragraph of Art. 223 of the Labor Code provides

In any event, the decision of the Labor Arbiter reinstating a dismissed or separatedemployee, insofar as the reinstatement aspect is concerned, shall be immediatelyexecutory, even pending appeal. The employee shall either be admitted back to workunder the same terms and conditions prevailing prior to his dismissal or separationor, at the option of the employer, merely reinstated in the payroll. The posting of the

bond by the employer shall not stay the execution for reinstatement provided herein.

We have fully explained the legal basis for this conclusion in Maranaw Hotel Resort Corporation(Century Park Sheraton Manila) v. NLRC and Gina G. Castro 6 thus

It must be stressed, however, that although the reinstatement aspect of the decisionis immediately executory , it does not follow that it is self-executory . There must be awrit of execution which may be issued motu proprio or on motion of an interestedparty. Article 224 of the Labor Code provides:

Art. 224. Execution of decisions, orders or awards. (a) TheSecretary of Labor and Employment or any Regional Director, theCommission or any Labor Arbiter, or med-Arbiter or voluntaryarbitrator may, motu proprio or on motion of any interested party ,issue a writ of execution on a judgment within five (5) years from thedate it becomes final and executory . . . .

The second paragraph of Section 1, Rule XVIII of the New Rules of Procedure of theNLRC also provides:

The Labor Arbiter, POEA Administrator, or the Regional Director, or his dulyauthorized hearing officer of origin shall, motu proprio or upon motion of anyinterested party , issue a writ of execution on a judgment only within five (5) yearsfrom the date it becomes final and executory . . . . No motion for execution shall beentertained nor a writ be issued unless the Labor Arbiter is in possession of therecords of the case which shall include an entry of judgment.

In the absence . . . of an order for the issuance of a writ of execution on thereinstatement aspect of the decision of the Labor Arbiter, the petitioner was under nolegal obligation to admit back to work the private respondent under the terms andconditions prevailing prior to her dismissal or, at the petitioner's option, to merelyreinstate her in the payroll. An option is a right of election to exercise a privilege, andthe option in Article 223 of the Labor code is exclusively granted to the employer.The event that gives rise for its exercise is not the reinstatement decree of the Labor

8/11/2019 30-44n

17/44

Arbiter, but the writ for its execution commanding the employer to reinstate theemployee, while the final act which compels the employer to exercise the option isthe service upon it of the writ of execution when, instead of admitting the employeeback to his work, the employee chooses to reinstate the employee in the payroll only.If the employer does not exercise this option, it must forthwith admit the employeeback to work, otherwise it may be punished for contempt.

In the case at bench, there was no occasion for petitioners to exercise their option under Art. 223 ofthe Labor Code in connection with the reinstatement aspect of the decision of the Labor Arbiter. Themotions of private respondents for the issuance of a writ of execution were not acted upon by NLRC.It was not shown that respondent exerted efforts to have their motions resolved. They are deemed tohave abandoned their motions for execution pending appeal. They cannot now ask that the writ ofexecution be issued since their dismissal was found to be for cause.

On the second issue, which refers to the propriety of the award of a 13th month pay, paragraph 6 ofthe Revised Guidelines on the Implementation of the 13th Month Pay Law (P. D. 851) provides that"(a)n employee who has resigned or whose services were terminated at any time before thepayment of the 13th month pay is entitled to this monetary benefit in proportion to the length of timehe worked during the year, reckoned from the time he started working during the calendar year up tothe time of his resignation or termination from theservice . . . The payment of the 13th month pay may be demanded by the employee upon thecessation of employer-employee relationship. This is consistent with the principle of equity that asthe employer can require the employee to clear himself of all liabilities and property accountability,so can the employee demand the payment of all benefits due him upon the termination of therelationship."

Furthermore, Sec. 4 of the original Implementing Rules of P.D. 851 mandates employers to pay theiremployees a 13th month pay not later than the 24th of December every year provided that they haveworked for at least one (1) month during a calendar year. In effect, this statutory benefit isautomatically vested in the employee who has at least worked for one month during the calendaryear. As 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 violating his property rights.

With respect to the third issue, the disputed attorney's fees can only be assessed in cases ofunlawful withholding of wages. 7 It cannot be said that petitioners were guilty of unlawfully withholdingprivate respondents' salaries since, as earlier discussed, the occasion never arose for them to exercisethat option under Art. 223 of the Labor Code. Clearly, the award of attorney's fees is baseless.

WHEREFORE, the instant petition is partly granted. The challenged Decision of the National LaborRelations Commission dated 11 August 1992 is MODIFIED by deleting that portion orderingpetitioners to pay private respondents their salaries from 19 September 1991 to 20 September 1992as well as that portion awarding 10% of the total judgment award as attorney's fees for lack of legaland factual basis. In other respects, the Decision is AFFIRMED.

SO ORDERED.

Padilla, Davide, Jr. and Kapunan, JJ., concur.

Quiason, J., is on leave.

8/11/2019 30-44n

18/44

39. UNIVERSAL CORN PRODUCTS (A DIVISION OF UNIVERSAL ROBINACORPORATION), petitioner,vs.THE NATIONAL LABOR RELATIONS COMMISSION and JOSE ARMAS, ENGRACIO ASIS,AUSTERINAO ELEUTERIO, FAUSTINO ATIENZA, MARIO ALTARES, JAIME ALTARES, ISIDROARANO, LEONILO ARANO, ALFREDO ANCHETA, DOMINGO ANCHETA, RIZALITO, ABANTO,

RIZALITO, CRESENCIO ASCUTIA, JESUS ASCUTIA, FELICIANO ABORQUE, WILFREDOARMENIO, ALEJANDRO ABAGAT, PABLO ADLAWAN, FILEMON ABADINES, ROMEOAREVALO, PABLO BUTIAL, BANAAG REMIGIO, LUCIO BERDIJO, ANTONIO BIONSON,ABELARDO BRACAMONTE, SAMSON BORDEOS, TEODORO, BARBIANA, FRANCISCOBABOR, HERCULANO BARRAMEDA, RODRIGO BONGAIS, JAIME BERANA, EDUARDO,BUENAVENTURA, RODRIGO BAUTISTA, FELEMON BAUTISTA, DIONISIO BERNALES,MARIANO BALAGTAS, ALFREDO BERNADAS, EPIGENIO BORDEOS, BRIGIDO BAER,OSCAR BONDOC, JOSE BONDOC, ROMEO BUCAYAN, VITALIANO BATOBATO, DOMINGOBALLON, JOSE BORLEO, JOSE BORJA, RUFINO CLEMENTE, JUAN CABALLERO,TRANQUILINA CAUSON, AUGORIO CALNEA, LEOPOLDO CUARTERO, ALBERTOCATBAGAN, ROMEO CALIVO, ANDRES CUNTAPAY, ALBERTO CASTRO, CASTORRODRIGO, SIMPLICIO CACATIAN, NILO DALANON, BIENVENIDO DUMAGAT, SR.,BIENVENIDO DUMAGAT, JR., DOMINADOR DUMANTAY, TEODORO DULOMBAL, RODOLFODANDAN, SALVADOR DASIGO, ELIAS DASIGO, FRANCISCO ESTOLANO, LEOPOLDOESTIOCO, ROGELIO ESTANISLAO, MONTANO ESTANISLAO, ELIAS ESTRADA, ERNESTOESTABALLIO, FERNANDO FERNANDEZ, PEDRO GETEZO, ALFONSO DE GUZMAN,LORENZO DE GUZMAN, MODESTO DE GUZMAN, ARELLANO GARCIA, ALFREDO GARCIA,MANUEL GOROSPE, RAYMUNDO GELLIDO, RODOLFO GALEON, ROMEO GONZALES,GERARDO GERMEDIA, BENITO GALE, ROBERTO HASAL, EDILBERTO HERNANDEZ,RAFAEL IGUIZ, MARGARITO JAVIER, PABLO JOSE, PEDRO JOVE, CELEDONIO JACA,REYNALDO JALLA, EDUARDO JUMAQUIO, DOMINGO JUANO, AGUSTIN KHO, ANTONIOLAMERA, RODOLFO LINEZO, MANUEL LAMBATIN, MANUEL LOPEZ, BENEDICTO LOPEZ,MARIANO LARA, ELINO MISA, FRANCISCO MINA, RODOLFO MIRABEL, ROGER MIRABEL,ROLANDO MIRABEL, OSCAR MARTINEZ, MIGUEL MANACIO, PEDRO MANALO, LEOPOLDOMARQUEZ, ANTONIO, MEDINA, SALVADOR MARAINAN, NAPOLEON MAGAYA, ALFREDO

MAQUI, EDUARDO MILLET, PABLO MENDEZ, DULCISIMO NATIVIDAD, ROMEO NAGTALON,ALFONSO NOQUEZ, ALEJANDRO NOQUEZ, ANASTACIO NIVAL, EMILIO ORTIZ, PONCIANOORLANDA, GERARDO POSADAS, ATICO PEDRIGOZA, ALFREDO PASCUA, LEONARDOPATRON, MIGUEL PACHECO, DOMINGO PACHECO, FELIMON POLICARPIO, ERNESTOQUIJANO, EFREN QUIBOTE, SIMEON RESCO, FERNANDO REYNOSO, EMILIO RIVERA,GRACIANO RAMOS, REYNALDO RAMIREZ, PAQUITO RAMIREZ, THOMAS ROSARIO, JR.,ROMULO REYES, REYNALDO RAPSING, ALFREDO DEL ROSARIO, FLORENCIO SASAN,ALFONSO SAMSON, LUIS SUAREZ, GREGORIO SOMODO, FRANCISCO SAPLAN, LUCIANOSARNO, RICARDO SOREL, CRESENCIO SANTOS, ARSENIO SERGA JR., BALTAZARTALATO, DIOSDADO TULANG, EUGENIO TOLENTINO, AMADOR TABULOG, LAZAROTORRES, JAIME TRAJANO, GENEROSO TANTE, SERGIO TABUAC, ANASTACIO TIMOG,DANIEL UDAN, HERMENIGILDO VITO, VICENTE VITO, BENJAMIN VILLAMOR, ARTUROVALIENTE, ERNESTO VALIENTE, FELICISIMO VERA, respondents.

SARMIENTO, J .:

The petitioner invokes National Federation of Sugar Workers (NFSW) v. Ovejera , 1 in which we held thatPresidential Decree No. 851, 2 the 13th-month pay law, does not cover employers already paying theiremployees an "equivalent" to the 13th month pay.

8/11/2019 30-44n

19/44

There is no dispute as to the facts.

Sometime in May, 1972, the petitioner and the Universal Corn Products Workers Union entered intoa collective bargaining agreement in which it was provided, among other things, that:

xxx xxx xxx

The COMPANY agrees to grant all regular workers within the bargaining unit with atleast one (1) year of continuous service, a Christmas bonus equivalent to the regularwages for seven (7) working days, effective December, 1972. The bonus shall begiven to the workers on the second week of December.

In the event that the service of a worker is not continuous due to factory shutdown,machine breakdown or prolonged absences or leaves, the Christmas bonus shall beprorated in accordance with the length of services that worker concerned has servedduring the year . 3

xxx xxx xxx

The agreement had a duration of three years, effective June 1, 1971, or until June 1, 1974.

On account however of differences between the parties with respect to certain economic issues, thecollective bargaining agreement in question expired without being renewed. On June 1, 1979, theparties entered into an "addendum" stipulating certain wage increases covering the years from 1974to 1977. Simultaneously, they entered into a collective bargaining agreement for the years from 1979to 1981. Like the "addendum," the new collective bargaining agreement did not refer to the"Christmas bonus" theretofore paid but dealt only with salary adjustments. According to thepetitioner, the new agreements deliberately excluded the grant of Christmas bonus with theenactment of Presidential Decree No. 851 4 on December 16, 1975. It further claims that since 1975, ithad been paying its employees 13th-month pay pursuant to the Decree. 5

For failure of the petitioner to pay the seven-day Christmas bonus for 1975 to 1978 inclusive, inaccordance with the 1972 CBA, the union went to the labor arbiter for relief. In his decision, 6 thelabor arbiter ruled that the payment of the 13th month pay precluded the payment of further Christmasbonus. The union appealed to the National Labor Relations Commission (NLRC). The NLRC set asidethe decision of the labor arbiter appealed from and entered another one, "directing respondent company[now the petitioner] to pay the members concerned of complainants [sic] union their 7-day wage bonus inaccordance with the 1972 CBA from 1975 to 1978." Justifying its reversal of the arbiter's decision, theNLRC held:

xxx xxx xxx

It is clear that the company implemented the aforequoted provision of the CBA in1972, 1973 and 1974. In view thereof it is our considered opinion that the crediting ofsaid benefit to the 13th month pay cannot be sanctioned on the ground that it iscontrary to Section 10 of the Rules and Regulations Implementing PresidentialDecree No. 85 1, which provides, to wit;

Section 10. Prohibition against reduction or elimination of benefits . Nothing herein shall be construed to authorize any employer toeliminate, or diminish in any way, supplements, or other employee

8/11/2019 30-44n

20/44

8/11/2019 30-44n

21/44

WHEREFORE, premises considered, the petition is hereby DISMISSED. The Decision of the publicrespondent NLRC promulgated on February 11, 1982, and its Resolution dated March 23, 1982, arehereby AFFIRMED. The temporary restraining order issued on May 19, 1982 is LIFTED.

This Decision is IMMEDIATELY EXECUTORY.

No pronouncement as to costs.

SO ORDERED.

Yap (Chairman), Paras and Padilla, JJ., concur.

Melencio-Herrera, J., is on leave.

40.

BROKENSHIRE MEMORIAL HOSPITAL, INC., petitioner,

vs.THE HONORABLE MINISTER OF LABOR & EMPLOYMENT AND BROKENSHIRE MEMORIALHOSPITAL EMPLOYEES AND WORKER'S UNION-FFW Represented by EDUARDO A.AFUAN, respondents.

Renato B. Pagatpatan for petitioner.

PARAS, J .:

This petition for review by certiorari seeks the annulment or modification of the Order of public

respondent Minister of Labor dated December 9, 1985 in a case for non-compliance with WageOrder Nos. 5 and 6 docketed as ROXI-LSED Case No. 14-85 which 1) denied petitioner's Motion forReconsideration dated February 3, 1986 and 2) affirmed the Order of Regional Director Eugenio I.Sagmit, Jr., Regional Office No. XI Davao City, dated April 12, 1985, the dispositive portion of whichreads as follows:

WHEREFORE, premises considered, respondent Brokenshire Memorial Hospital,Incorporated is hereby ordered to pay the above-named workers, through this Office,within fifteen (15) days from receipt hereof, the total sum of TWO HUNDREDEIGHTY- FOUR THOUSAND SIX HUNDRED TWENTY FIVE (P284,625.00) PESOSrepresenting their living allowance under Wage Order No. 5 covering the period fromOctober 16, 1984 to February 28, 1985 and under Wage Order No. 6 effectiveNovember 1, 1984 to February 28, 1985. Respondent is further ordered to pay theemployees who are likewise entitled to the claims here presented, but whose nameswere inadvertently omitted in the list and computation. ( Rollo , p. 7)

Petitioner contends that the respondent Minister of Labor and Employment acted without, or inexcess of his jurisdiction or with grave abuse of discretion in failing to hold:

A) That the Regional Director committed grave abuse of discretion in assertingexclusive jurisdiction and in not certifying this case to the Arbitration Branch of theNational Labor Relations Commission for a full-blown hearing on the merits;

8/11/2019 30-44n

22/44

B) That the Regional Director erred in not ruling on the counterclaim raised by therespondent (in the labor case, and now petitioner in this case);

C) That the Regional Director erred -in skirting the constitutional and legal issuesraised. ( Rollo , p. 4)

This case originated from a complaint filed by private respondents against petitioner on September21, 1984 with the Regional Office of the MOLE, Region XI, Davao City for non-compliance with theprovisions of Wage Order No. 5. After due healing the Regional Director rendered a decision datedNovember 16, 1984 in favor of private respondents. Judgment having become final and executory,the Regional Director issued a Writ of Execution whereby some movable properties of the hospital(petitioner herein) were levied upon and its operating expenses kept with the bank were garnished.The levy and garnishment were lifted when petitioner hospital paid the claim of the privaterespondents (281 hospital employees) directly, in the total amount of P163,047.50 covering theperiod from June 16 to October 15, 1984.

After making said payment, petitioner hospital failed to continue to comply with Wage Order No. 5and likewise, failed to comply with the new Wage Order No. 6 which took effect on November 1,

1984, prompting private respondents to file against petitioner another complaint docketed as ROXI-LSED-14-85, which is now the case at bar.

In its answer, petitioner raised the following affirmative defenses:

1) That the Regional Office of the Ministry of Labor did not acquire jurisdiction over itfor want of allegation that it has the capacity to be sued and

2) That Wage Order Nos. 5 and 6 are non-constitutional and therefore void.Significantly petitioner never averred any counterclaim in its Answer.

After the complainants had filed their reply, petitioner filed a Motion for the Certification of the case to

the National Labor Relations Commission for a full-blown hearing on the matter, including thecounterclaim interposed that the complainants had unpaid obligations with the Hospital which mightbe offset with the latter's alleged obligation to the former.

Issues having been joined, the Regional Director rendered a decision on April 12, 1985 in favor ofthe complainants (private respondents herein) declaring that petitioner (respondent therein) isestopped from questioning the acquisition of jurisdiction because its appearance in the hearing is initself submission to jurisdiction and that this case is merely a continuance of a previous case wherethe hospital already willingly paid its obligations to the workers on orders of the Regional Office. Onthe matter of the constitutionality of the Wage Order Nos. 5 and 6, the Regional Director declaredthat only the court can declare a law or order unconstitutional and until so declared by the court, theOffice of the Regional Director is duly bound to enforce the law or order.

Aggrieved, petitioner appealed to the Office of the Minister of Labor, which dismissed the appeal forlack of merit. A motion for reconsideration was likewise denied by said Office, giving rise to theinstant petition reiterating the issues earlier mentioned.

The crucial issue We are tasked to resolve is whether or not the Regional Director has jurisdictionover money claims of workers concurrent with the Labor Arbiter.

8/11/2019 30-44n

23/44

It is worthy of note that the instant case was deliberated upon by this Court at the same timethat Briad Agro Development Corporation v. de la Cerna , G.R. No. 82805 and L.M. CamusEngineering Corporation v. Hon. Secretary of Labor, et al. G.R. No. 83225, promulgated on June29,1989 and Maternity Children's Hospital vs. Hon. Secretary of Labor , et al., G.R. No. 78909,promulgated 30 June 1989, where deliberated upon; for all three (3) cases raised the same issue of

jurisdiction of the Regional Director of the Department of Labor to pass upon money claims of

employees. Hence, we will be referring to these cases, most especially the case of Briad Agrowhich, as will be seen later, was reconsidered by the court.

Contrary to the claim of petitioners that the original and exclusive jurisdiction over said money claimsis properly lodged in the Labor Arbiter (relying on the case of Zambales Base Metals Inc. v. Ministerof Labor, 146 SCRA 50) and the Regional Director has no jurisdiction over workers' money claims,the Court in the three (3) cases above-mentioned ruled that in view of the promulgation of ExecutiveOrder No. 111, the ruling in the earlier case of Zambales Base Metals is already abandoned. Inaccordance with the rulings in Briad Agro, L.M. Camus, and Maternity Children's Hospital, theRegional Director exercises concurrent jurisdiction with the Labor Arbiter over money claims. Thus,

. . . . Executive Order No. 111 is in the character of a curative law, that is to say, itwas intended to remedy a defect that, in the opinion of the legislative (the incumbentChief Executive in this case, in the exercise of her lawmaking power under theFreedom Constitution) had attached to the provision subject of the amendment. Thisis clear from the proviso: "The provisions of Article 217 to the contrarynotwithstanding . . ." Plainly, the amendment was meant to make both the Secretaryof Labor (or the various Regional Directors) and the Labor Arbiter share jurisdiction.(Briad Agro Dev. Corp. v. Sec. of Labor, supra ).

Under the present rules, a Regional Director exercises both visitorial andenforcement power over labor standards cases, and is therefore empowered to adjudicate money claims, provided there still exists an employer-employee relationship,and the findings of the regional office is not contested by the employer concerned.(Maternity Children's Hospital v. Sec. of Labor, supra).

However, it is very significant to note, at this point, that the decision in the consolidated cases ofBriad Agro Development Corp. and L.M. Camus Engineering Corp. was reconsidered and set asideby this Court in a Resolution promulgated on November 9,1989. In view of the enactment ofRepublic Act No. 6715, approved on March 2, 1989, the Court found that reconsideration wasproper.

RA 6715 amended Art. 129 and Art. 217 of the Labor Code, to read as follows:

ART. 129. Recovery of wages, simple money claims and other benefits .Uponcomplaint of any interested party, the Regional Director of the Department of Laborand Employment or any of the duly authorized hearing officers of the Department is

empowered, through summary proceeding and after due notice, to hear and decideany matter involving the recovery of wages and other monetary claims and benefits,including legal interest, owing to an employee or person employed in domestic orhousehold service or househelper under this code, arising from employer-employeerelations, Provided, That such complaint does not include a claim for reinstatement;Provided, further, That the aggregate money claims of each employee orhousehelper do not exceed five thousand pesos (P5,000.00). The Regional Directoror hearing officer shall decide or resolve the complaint within thirty (30) calendardays from the date of the filing of the same . . .

8/11/2019 30-44n

24/44

Any decision or resolution of the Regional Director or hearing officer pursuant to thisprovision may be appealed on the same grounds provided in Article 223 of this Code,within five (5) calendar days from 11 receipt of a copy of said decision or resolution,to the National Labor Relations Commission which shall resolve the appeal within ten(10) calendar days from the submission of the last pleading required or allowedunder its rules.

ART. 217. Jurisdiction of Labor Arbiters and the Commission . Except as otherwiseprovided under this code, the Labor Arbiters shall have original and exclusive

jurisdiction to hear and decide, within thirty (30) calendar days after the submissionof the case by the parties for decision without extension, even in the absence ofsteno graphic notes, the following cases involving all workers, whether agricultural ornon-agricultural:

(1) Unfair labor practice cases;

(2) Termination disputes;

(3) If accompanied with a claim of reinstatement, those cases that workers may fileinvolving wages, rates of pay, hours of work and other terms and conditions ofemployment;

(4) Claims for actual, moral, exemplary and other forms of damages arising from theemployer-employee relation;

(5) Cases arising from any violation of Article 264 of this Code, including questionsinvolving the legality of strikes and lockouts; and

(6) Except claims for employees compensation, social security, medicare andmaternity benefits, all other claims arising from employer-employee relations,

including those of persons in domestic or household service, involving an amount notexceeding five thousand pesos (P5,000.00), whether or not accompanied with aclaim for reinstatement.

It will be observed that what in fact conferred upon Regional Directors and other hearing officers ofthe Department of Labor (aside from the Labor Arbiters) adjudicative powers, i.e., the power to tryand decide, or hear and determine any claim brought before them for recovery of wages, simplemoney claims, and other benefits, is Republic Act 6715, provided that the following requisitesconcur, to wit:

1) The claim is presented by an employee or person employed in domestic orhousehold service, or househelper under the code;

2) The claimant, no longer being employed, does not seek reinstatement; and

3) The aggregate money claim of the employee or househelper does not exceed fivethousand pesos (P5,000.00).

In the absence of any of the three (3) requisites, the Labor Arbiters have exclusive original jurisdiction over all claims arising from employer-employee relations, other than claims foremployee's compensation, social security, medicare and maternity benefits.

8/11/2019 30-44n

25/44

8/11/2019 30-44n

26/44

8/11/2019 30-44n

27/44

The Christmas and milling bonuses amount to 1- months' salary.

2. On November 28, 1981, NFSW struck allegedly to compel the payment of the 13th month payunder PD 851, in addition to the Christmas, milling and amelioration bonuses being enjoyed by CACworkers.

3. To settle the strike, a compromise agreement was concluded between CAC and NFSW onNovember 30,1981. Under paragraph 4 thereof

The parties agree to abide by the final decision of the Supreme Court in any caseinvolving the 13th Month Pay Law if it is clearly held that the employer is liable to paya 13th month pay separate and distinct from the bonuses already given.

4. As of November 30, 1981, G.R. No. 51254 (Marcopper Mining Corp. vs. Blas Ople and AmadoInciong, Minister and Deputy Minister of Labor, respectively, and Marcopper Employees LaborUnion, Petition for certiorari and Prohibition) was still pending in the Supreme Court. The Petitionhad been dismissed on June 11, 1981 on the vote of seven Justices. 1 A motion for reconsiderationthereafter filed was denied in a resolution dated December 15, 1981, with only five Justices voting for

denial. (3 dissented; 2 reserved their votes: 4 did not take part.)

On December 18, 1981 the decision of June 11, 1981 having become final and executory entryof judgment was made.

5. After the Marcopper decision had become final, NFSW renewed its demand that CAC give the13th month pay. CAC refused.

6. On January 22, 1982, NFSW filed with the Ministry of Labor and Employment (MOLE) RegionalOffice in Bacolod City a notice to strike based on non-payment of the 13th month pay. Six days after,NFSW struck.

7. One day after the commencement of the strike, or on January 29, 1982, a report of the strike-votewas filed by NFSW with MOLE.

8. On February 8, 1982, CAC filed a petition (R.A.B. Case No. 0110-82) with the Regional ArbitrationBranch VI-A, MOLE, at Bacolod City to declare the strike illegal, principally for being violative ofBatas Pambansa Blg. 130, that is, the strike was declared before the expiration of the 15-daycooling-off period for unfair labor practice (ULP) strikes, and the strike was staged before the lapseof seven days from the submission to MOLE of the result of the strike-vote.

9. After the submission of position papers and hearing, Labor Arbiter Ovejera declared the NFSWstrike illegal. The dispositive part of his decision dated February 20, 1982 reads:

Wherefore, premises considered, judgment is hereby rendered:

1. Declaring the strike commenced by NFSW on January 28, 1982, illegal,

2. Directing the Central to resume operations immediately upon receipt hereof;

3. Directing the Central to accept back to work all employees appearing in its payrollas of January 28, 1982 except those covered by the February 1, 1982 memorandumon preventive suspension but without prejudice to the said employees' instituting

8/11/2019 30-44n

28/44

8/11/2019 30-44n

29/44

1. Whether the strike declared by NFSW is illegal, the resolution of which mainly depends on themandatory or directory character of the cooling-off period and the 7-day strike ban after report toMOLE of the result of a strike-vote, as prescribed in the Labor Code.

2. Whether under Presidential Decree 851 (13th Month Pay Law), CAC is obliged to give its workersa 13th month salary in addition to Christmas, milling and amelioration bonuses, the aggregate of

which admittedly exceeds by far the disputed 13th month pay. (See petitioner's memorandum of April 12, 1982, p. 2; CAC memorandum of April 2, 1982, pp. 3-4.) Resolution of this issue requiresan examination of the thrusts and application of PD 851.

III. DISCUSSION

1. Articles 264 and 265 of the Labor Code, insofar as pertinent, read:

Art. 264, Strikes, picketing and lockouts . ...

(c) In cases of bargaining deadlocks, the certified or duly recognized bargainingrepresentative may file a notice of strike with the Ministry (of Labor and Employment)

at least thirty (30) days before the intended date thereof. In cases of unfair laborpractices, the period of notice shall be shortened to fifteen (15) days; ...

(d) During the cooling-off period, it shall be the duty of the voluntarysttlement. Should the dispute remain unsettled until the lapse of the requisite numberof days from the mandatory filing of the notice, the labor union may strike or theemployer may declare a lockout.

(f) A decision to declae a strike must be approved by at least two-thirds (2/3) of thetotal union membership in the bargaining unit concerened by secret ballots inmeetings or referenda. A decision to declae a lockout must be approved by at leasttwo-thirds (2/3) of the board of direcotrs of the employer corporation or association or

of the partners in a partnership obtained by secret ballot in a meeting called for thepurpose. the decision shall be valid for the duration of the dispute based onsubstantially the same grounds considered when the strike or lockout vote was taken. The Ministry, may at its own intitiative or upon the request of any affected party,supervise the conduct of the secret balloting. In every case, the union of theemployer shall furnish the Ministry the results of the voting at least seven (7) daysbefore the intended strike or lockout, subject to the cooling-off period herein provided.(Emphasis supplied).

ART. 265. Prohibited activities. It shall be unlawful for any labor organization oremployer to declare a strike or lockout without first having bargained collectively inaccordance with Title VII of this Book or without first having filed the notice requiredin the preceding Article or without the necessary strike or lockout vote first havingbeen obtained and reported to the Ministry.

It shall likewise be unlawful to declare a strike or lockout after assumption of jurisdiction by the President or the Minister or after certification or submission of thedispute to compulsory or voluntary arbitration or during the pendency of casesinvolving the same grounds for the strike or lockout. (Emphasis supplied.)

8/11/2019 30-44n

30/44

8/11/2019 30-44n

31/44

public policy [such as the policy to encourage voluntary settlement of disputeswithout resorting to strikes], those to whom it applies should not be permitted towaive its provisions. (82 C.J.S. 873-874. Emphasis supplied.)

(c) Waiting period after strike notice and strike-vote report, valid regulation of right to strike. Toquote Justice Jackson in International Union vs. Wisconsin Employment Relations Board, 336 U.S.

245, at 259

The right to strike, because of its more serious impact upon the public interest, ismore vulnerable to regulation than the right to organize and select representatives forlawful purposes of collective bargaining ...

The cooling-off period and the 7-day strike ban after the filing of a strike- vote report, as prescribedin Art. 264 of the Labor Code, are reasonable restrictions and their imposition is essential to attainthe legitimate policy objectives embodied in the law. We hold that they constitute a valid exercise ofthe police power of the state.

(d) State policy on amicable settlement of criminal liability . Petitioner contends that since the non-

compliance (with PD 851) imputed to CAC is an unfair labor practice which is an offense against thestate, the cooling-off period provided in the Labor Code would not apply, as it does not apply to ULPstrikes. It is argued that mediation or conciliation in order to settle a criminal offense is not allowed.

In the first place, it is at best unclear whether the refusal of CAC to give a 13th month pay to NFSWconstitutes a criminal act. Under Sec. 9 of the Rules and regulations Implementing PresidentialDecree No. 851

Non-payment of the thirteenth-month pay provided by the Decree and these rulesshall be treated as money claims cases and shall be processed in accordance withthe Rules Implementing the Labor Code of the Philippines and the Rules of theNational Labor Relations Commission.

Secondly, the possible dispute settlement, either permanent or temporary, could verywell be along legally permissible lines, as indicated in (b) above or assume the formof measures designed to abort the intended strike, rather than compromise criminalliability, if any. Finally, amicable settlement of criminal liability is not inexorablyforbidden by law. Such settlement is valid when the law itself clearly authorizes it. Inthe case of a dispute on the payment of the 13th month pay, we are not prepared tosay that its voluntary settlement is not authorized by the terms of Art. 264(e) of theLabor Code, which makes it the duty of the MOLE to exert all efforts at mediation andconciliation to effect a voluntary settlement of labor disputes.

(e) NFSW strike is illegal . The NFSW declared the strike six (6) days after filing astrike notice, i.e., before the lapse of the mandatory cooling-off period. It also failed tofile with the MOLE before launching the strike a report on the strike-vote, when itshould have filed such report "at least seven (7) days before the intended strike."Under the circumstances, we are perforce constrained to conclude that the strikestaged by petitioner is not in conformity with law. This conclusion makes itunnecessary for us to determine whether the pendency of an arbitration case againstCAC on the same issue of payment of 13th month pay [R.A.B No. 512-81, Regional

Arbitration Branch No. VI-A, NLRC, Bacolod City, in which the National Congress ofUnions in the Sugar Industry of the Philippines (NACUSIP) and a number of CACworkers are the complainants, with NFSW as Intervenor seeking the dismissal of the

8/11/2019 30-44n

32/44

arbitration case as regards unnamed CAC rank and file employees] has renderedillegal the above strike under Art. 265 of the Labor Code which provides:

It shall likewise be unlawful to declare a strike or lockout after assumption of jurisdiction by the President or the Minister, or after certification or submission of thedispute to compulsory or voluntary arbitration or during the pendency of cases

involving the same grounds for the strike or lockout. (Emphasis supplied.)

(2) The Second Issue . At bottom, the NFSW strike arose from a dispute on the meaning andapplication of PD 851, with NFSW claiming entitlement to a 13th month pay on top of bonuses givenby CAC to its workers, as against the diametrically opposite stance of CAC. Since the strike was justan offshoot of the said dispute, a simple decision on the legality or illegality of the strike would notspell the end of the NFSW-CAC labor dispute. And considering further that there are other disputesand strikes actual and impending involving the interpretation and application of PD 851, it isimportant for this Court to definitively resolve the problem: whether under PD 851, CAC is obliged togive its workers a 13th month salary in addition to Christmas, milling and amelioration bonusesstipulated in a collective bargaining agreement amounting to more than a month's pay.

Keenly sensitive to the needs of the workingmen, yet mindful of the mounting production cost thatare the woe of capital which provides employment to labor, President Ferdinand E. Marcos issuedPresidential Decree No. 851 on 16 December 1975. Thereunder, "all employers are hereby requiredto pay salary of not more than all their employees receiving a basic P1,000 a month, regardless ofthe nature of their employment, a 13th month pay not later than December 24 of every year."Exempted from the obligation however are:

Employers already paying their employees a 13th month pay or its equivalent ...(Section 2.)

The evident intention of the law, as revealed by the law itself, was to grant an additional income inthe form of a 13th month pay to employees not already receiving the same. Otherwise put, theintention was to grant some relief not to all workers but only to the unfortunate ones notactually paid a 13th month salary or what amounts to it, by whatever name called; but it was notenvisioned that a double burden would be imposed on the employer already paying his employees a13th month pay or its equivalent whether out of pure generosity or on the basis of a bindingagreement and, in the latter ease, regardless of the conditional character of the grant (such asmaking the payment dependent on profit), so long as there is actual payment. Otherwise, what wasconceived to be a 13th month salary would in effect become a 14th or possibly 15th month pay.

This view is justified by the law itself which makes no distinction in the grant of exemption:"Employers already paying their employees a 13th month pay or its equivalent are not covered bythis Decree." (P.D. 851.)

The Rules Implementing P.D. 851 issued by MOLE immediately after the adoption of said law

reinforce this stand. Under Section 3(e) thereof

The term "its equivalent" ... shall include Christmas bonus, mid-year bonus, profit-sharing payments and other cash bonuses amounting to not less than 1/12th of thebasic salary but shall not include cash and stock dividends, cost of living allowancesand all other allowances regularly enjoyed by the employee, as well as non-monetarybenefits. Where an employer pays less than 1/12th of the employee's basic salary,the employer shall pay the difference." (Italics supplied.)

8/11/2019 30-44n

33/44

Having been issued by the agency charged with the implementation of PD 851 as itscontemporaneous interpretation of the law, the quoted rule should be accorded great weight.

Pragmatic considerations also weigh heavily in favor of crediting both voluntary and contractualbonuses for the purpose of determining liability for the 13th month pay. To require employers(already giving their employees a 13th month salary or its equivalent) to give a second 13th month

pay would be unfair and productive of undesirable results. To the employer who had acceded and isalready bound to give bonuses to his employees, the additional burden of a 13th month pay wouldamount to a penalty for his munificence or liberality. The probable reaction of one so circumstancewould be to withdraw the bonuses or resist further voluntary grants for fear that if and when a law ispassed giving the same benefits, his prior concessions might not be given due credit; and thisnegative attitude would have an adverse impact on the employees.

In the case at bar, the NFSW-CAC collective bargaining agreement provides for the grant to CACworkers of Christmas bonus, milling bonus and amelioration bonus, the aggregate of which is verymuch more than a worker's monthly pay. When a dispute arose last year as to whether CAC workersreceiving the stipulated bonuses would additionally be entitled to a 13th month pay, NFSW and CACconcluded a compromise agreement by which they

agree(d) to abide by the final decision of the Supreme Court in any case involving the13th Month Pay Law if it is clearly held that the employer is liable to pay a 13thmonth pay separate and distinct from the bonuses already given.

When this agreement was forged on November 30,1981, the original decision dismissing the petitionin the aforecited Marcopper case had already been promulgated by this Court. On the votes of only7 Justices, including the distinguished Chief Justice, the petition of Marcopper Mining Corp. seekingto annul the decision of Labor Deputy Minister Amado Inciong granting a 13th month pay toMarcopper employees (in addition to mid- year and Christmas bonuses under a CBA) hadbeen dismissed . But a motion for reconsideration filed by Marcopper was pending as of November30, 1981. In December 1981, the original decision was affirmed when this Court finally denied themotion for reconsideration. But the resolution of denial was supported by the votes of only 5Justices. The Marcopper decision is therefore a Court decision but without the necessary eight votesto be doctrinal. This being so, it cannot be said that the Marcopper decision "clearly held" that "theemployer is liable to pay a 13th month pay separate and distinct from the bonuses already given,"within the meaning of the NFSW-CAC compromise agreement. At any rate, in view of the rulingsmade herein, NFSW cannot insist on its claim that its members are entitled to a 13th month pay inaddition to the bonuses already paid by CAC. WHEREFORE, the petition is dismissed for lack ofmerit. No costs.

SO ORDERED.

Aquino, Guerrero, Escolin, Vasquez, Relova and Gutierrez, JJ., concur.

Concepcion, J., is on leave.

Teehankee, J., concurs in the result.

8/11/2019 30-44n

34/44

42. Traders Royal Bank vs NLRC, 189 SCRA274; G. R. No. 88168, August 30, 1990Posted by Pius Morados on November 15, 2011

(Labor Standards bonus, diminution of benefits) Facts : Respondent union filed a letter-complaint against petitioner TRB for the diminution of benefits being enjoyed

by the employees since time immemorial, e.g. mid-year bonus, from 2 months gross pay to 2 months basic and year-

end bonus from 3 months gross to only 2 months.

Petitioner insisted that it had paid the employees holiday pay. The practice of giving them bonuses at years end,

would depend on how profitable the operation of the bank had been.

NLRC found TRB guilty of diminution of benefits due to the private respondents and ordered it to pay the said

employees claims for differentials in their holiday, mid -year, and year-end bonuses.

Issue : Whether or not bonuses are part of labor standards.Held : No. A bonus is a gratuity or act of liberality of the giver which the recipient has no right to demand as a matter

of right. It is something given in addition to what is ordinarily received by or strictly due the recipient. The granting of

a bonus is basically a management prerogative which cannot be forced upon the employer who ma y not be obliged

to assume the onerous burden of granting bonuses or other benefits aside from the employees basic salaries or

wages.

43. METRO TRANSIT ORGANIZATION, INC., peti tioner, vs. NATIONAL

LABOR RELATIONS COMMISSION and VICTORIO T.TURING, respondents.

D E C I S I O NMENDOZA, J. :

This is a petition for certiorari to set aside the resolutio n [1] of the National Labor RelationsCommission (NLRC) affirming in toto the decision of the Labor Arbiter finding petitioner guiltyof illegal dismissal and ordering it to reinstate private respondent with backwages.

Petitioner Metro Transit Organization, Inc. is a government-owned and controlled

corporation and a subsidiary of the Light Rail Transit Authority which operates a light railtransit system.

Private respondent Victorio T. Turing was a train operator of the light rail transit system of petitioner. He was hired on November 22, 1984 at a monthly salary of P4,150.00. On March 29,1990, he was dismissed for abandonment of work.

Earlier, on January 9, 1990, private respondent had been suspended for three (3) days forhaving been absent, without leave, for ten (10) days on December 14, 15, 16, 18, 23, 24, 27, 28,

http://piusmorados.wordpress.com/author/piusmorados/http://piusmorados.wordpress.com/2011/11/15/traders-royal-bank-vs-nlrc-189-scra-274-g-r-no-88168-august-30-1990/http://sc.judiciary.gov.ph/jurisprudence/1999/may99/119724.htm#_edn1http://sc.judiciary.gov.ph/jurisprudence/1999/may99/119724.htm#_edn1http://sc.judiciary.gov.ph/jurisprudence/1999/may99/119724.htm#_edn1http://sc.judiciary.gov.ph/jurisprudence/1999/may99/119724.htm#_edn1http://piusmorados.wordpress.com/2011/11/15/traders-royal-bank-vs-nlrc-189-scra-274-g-r-no-88168-august-30-1990/http://piusmorados.wordpress.com/author/piusmorados/

8/11/2019 30-44n

35/44

8/11/2019 30-44n

36/44

In this case, petitioner was declared guilty of illegal dismissal on the basis of the followingfacts found by the Labor Arbiter :[6]

The notice of termination dated March 29, 1990 addressed to complainant Turingshows that he was dismissed for abandonment of work for having incurred a total of

17 days of absence without official leave and after his explanation was foundunmeritorious. This absence refers to the period from February 17, 20, & 21, 1990 toMarch 13, 1990 when he submitted his explanation. It was therefore complainantsabsences during that period that was the just cause referred to by respondent

because the formers absence of ten days in December, 1989 was already the subjectof his three- day suspension (Annex 1 Respondents PP).

The problem experienced by complainant was about his wife having left him and theirsix children (Annex 4, Ibid; Complainants PP, p. 4). Everybody will perhaps agreethat the problem was too personal and so serious that anyone affected would surely

lose concentration in his job especially during the early stages of its occurrence anddiscovery. We note from complainants handwritten explanation (Annex 5,Respondents PP) that he was thankful to God that hindi niya tinutulutan na ako ay

panlabuan ng isipan and resolved to face the problem. To our mind, c omplainants plea for understanding and forgiveness should have merited respondents kindconsideration. Needless to say, no husband of sane mind would expect any problemof that nature and perhaps only a few would be able to maintain his mentalcomposure. Respondent should have considered that complainants job involvesmany passengers and any moment of mental lapse on his part while the train moveson would surely endanger so many lives. In short, we believe that there was really nojust cause for complainant Turings dismissal.

In affirming the Labor Arbiters decision, the NLRC stated :[7]

We are [not] impressed with the submission of respondent that complainant Turinghas abandoned his work during the period the absences in question wereincurred. While it is true that the respondent submitted proof that it exerted efforts tocontact the complainant pursuant to legal procedure, yet on the March 6, 1990 homevisit conducted by Social Worker Emma M. Luciano, the complainant personally andunequivocably signified interest to return to work on March 15, 1990. The SocialWorker Report clearly disclosed the fact that the complainant expressed that he reallyneeded his job for his children. The report also stated that the complainant eventalked with Jordan Basa, TCAD Clerk of the respondent, apparently regarding hisscheduled reporting for work. We also took into account the complainants letterdated March 12 , 1990 to the respondent (respondents position paper) detailingexpression of regrets regarding his absences and the cause why the same wasincurred. Also taken into account is the letter dated March 13, 1990 (Annex 5) of

http://sc.judiciary.gov.ph/jurisprudence/1999/may99/119724.htm#_edn6http://sc.judiciary.gov.ph/jurisprudence/1999/may99/119724.htm#_edn6http://sc.judiciary.gov.ph/jurisprudence/1999/may99/119724.htm#_edn6http://sc.judiciary.gov.ph/jurisprudence/1999/may99/119724.htm#_edn7http://sc.judiciary.gov.ph/jurisprudence/1999/may99/119724.htm#_edn7http://sc.judiciary.gov.ph/jurisprudence/1999/may99/119724.htm#_edn7http://sc.judiciary.gov.ph/jurisprudence/1999/may99/119724.htm#_edn7http://sc.judiciary.gov.ph/jurisprudence/1999/may99/119724.htm#_edn6

8/11/2019 30-44n

37/44

complainant Turing assuring management of his attendance for work now that hisfamily problems are already normalized.

In the instant case, the main reason of complainants dismissal was anchored onabandonment arising from his seventeen (17) days of total absences from workwithout the companys permission. Thus, the main point in controversy hinges on themerit and validity for which the absence was availed. We have taken into account theadmission made by the complainant regarding his unauthorized absence not only fromthe statement he made before the Social Worker who attended to his case but also

before the respondent company under a subsequent letter on March 12, 1990. Ascorrectly pointed out by the Labor Arbiter who rendered the decision, the problem thatconfronted the complainant was very personal and too serious that any one affectedwould surely lose concentration in his job especially during the early stages of itsoccurrence and discovery and that is followed by the further observation thatcomplainants plea for understand ing and forgiveness should have merited kindconsideration. The Labor Arbiter also observed correctly that the nature of thecomplainants job involves safety of passengers and mental lapse on his part, being atrain operator, would surely endanger many lives. More importantly, we believe the

purpose of the law in requiring respondent to exert efforts to contact the complainantunder the doctrine of abandonment is to determine the legal propriety in the expecteddismissal of an employee who is being cited for abandonment. The mere act ofundertaking effort of locating complainant does not automatically confer legality inthe exercise of management right to dismiss on the pretext of abandonment. Judgingfrom the surrounding circumstances, specifically the nature the absence wascommitted, the admission made, his repentance and the promise made to reportnormally for work after recovering from deep encounter with his marital problem, thedismissal of complainant Turing should have been cautiously studied and examinedsince it affects ones property which is protected against undue deprivation. We findthe absence of the complainant not willful as to be characterized for a totalrelinquishment of ones job. In instant case, respondents act in dismissingcomplainant was inappropriate and without legal basis. The Labor Arbiter, in rulingfor the complainant, did not err. Respondents appeal does not persuade us. As aptly

pointed out by our Supreme Court, unauthorized absence does not amount to grossneglect of duty or abandonment (Velasco vs. Inciong, 164 SCRA 775, August 4,

1998).Indeed, for abandonment of work to be a just and valid ground for dismissal, there must be a

deliberate and unjustified refusal on the part of an employee to resume his employment. The burden of proof is on the employer to show an unequivocal intent on the part of the employee todiscontinue employment .[8] To warrant a finding of abandonment, there must be evidence notonly of the failure of an employee to report for work or his absence without valid or justifiable

http://sc.judiciary.gov.ph/jurisprudence/1999/may99/119724.htm#_edn8http://sc.judiciary.gov.ph/jurisprudence/1999/may99/119724.htm#_edn8http://sc.judiciary.gov.ph/jurisprudence/1999/may99/119724.htm#_edn8http://sc.judiciary.gov.ph/jurisprudence/1999/may99/119724.htm#_edn8

8/11/2019 30-44n

38/44

8/11/2019 30-44n

39/44

8/11/2019 30-44n

40/44

8/11/2019 30-44n

41/44

8/11/2019 30-44n

42/44

8/11/2019 30-44n

43/44

8/11/2019 30-44n

44/44

While there is a conflict of opinion as to the validity of an agreement to pay additional sums for theperformance of that which the promisee is already under obligation to perform, so as to give thelatter the right to enforce such promise after performance, the authorities hold that if one enters intoa contract of employment under an agreement that he shall be paid a certain salary by the week orsome other stated period and, in addition, a bonus, in case he serves for a specified length of time,there is no reason for refusing to enforce the promise to pay the bonus, if the employee has served

during the stipulated time, on the ground that it was a promise of a mere gratuity.

This is true if the contract contemplates a continuance of the employment for a definite term, and thepromise of the bonus is made at the time the contract is entered into. If no time is fixed for theduration of the contract of employment, but the employee enters upon or continues in service underan offer of a bonus if he remains therein for a certain time, his service, in case he remains for therequired time, constitutes an acceptance of the offer of the employer to pay the bonus and, after thatacceptance, the offer cannot be withdrawn, but can be enforced by the employee. 26

The weight of authority in American jurisprudence, with which we are persuaded to agree, is thatafter the acceptance of a promise by an employer to pay the bonus, the same cannot be withdrawn,but may be enforced by the employee. 27 However, in the case at bar, equity demands that theperformance and anniversary bonuses should be prorated to the number of months that petitionersactually served respondent company in the year 1990. This observation should be taken into account inthe computation of the amounts to be awarded to petitioners.

WHEREFORE, the assailed decision and resolution of respondent National Labor RelationsCommission are hereby SET ASIDE and the decision of Labor Arbiter Alex Arcadio Lopez isREINSTATED.

SO ORDERED.

Narvasa, C.J., Puno, Mendoza and Francisco, JJ., concur.