Aklan Electric Cooperative (AKELCO) v. NLRC, Rodolfo Retiso and 165 others (2000)FACTS:1. Respondents (numbering around 165) were employees of AKELCO. They were working at their main office in Lezo, Aklan and receiving regularly their salaries.2. Jan 1992: AKELCO released a Resolution allowing the temporary transfer of their office to Kalibo, Aklan since their head office at Lezo was closed and that the area was dangerous at the time. Nevertheless, a majority of the employees still went ahead to Lezo to report for work. They continued to receive their salaries. 3. Feb 1992: An unnumbered Resolution by the Board of Director of AKELCO withdrew the earlier resolution designating the temporary transfer from Lezo to Kalibo; work was to resume once again in Lezo. Some returned to Lezo but some of the employees stayed at Kalibo.4. Those who were at Lezo received their salaries from Jan 1992 May 1992. However, in a new Resolution, they were not paid their salaries from the period of Jun 1992 Mar 1993 It was only after Mar 1993 that the employees at Lezo were allowed to draw their salaries again.5. Respondents filed suit, trying to claim payment of salaries, 13th month pay, ECOLA and other fringe benefits for the said period of Jun 1992 Mar 1993.6. LA: Complaint dismissed.7. NLRC: LA reversed; complaint given due course in favor of respondents. The NLRC held that the records show that the respondents had rendered service from the period of Jun 1992 Mar 1993. The NLRC took note of the fact that the management responded to the office managers request for payment in the following manner: Rest assured that we shall recommend your aforesaid request This payment, however, shall be subject to, among others, the availability of funds and the approval of AKELCOs Board of Directors. The NLRC treated the reply above as an admission on the part of AKELCO that the respondents were indeed entitled to the compensation they were claiming in this complaint since the request came from the office manager, who is most competent to know whether the employees under him rendered service and, hence, deserve compensation. AKELCOs basis for the non-payment of the salaries during the interregnum (Jun 1992 Mar 1993) was the principle of no work, no pay; they allege that the respondents did not work during the interregnum and hence deserve no payment. However, the NLRC notes that AKELCO failed to substantiate such allegation and hence, the complaint must be granted in favor of the respondents. AKELCO was now ordered to pay the salaries and other monies pertaining to the interregnum.8. AKELCOs motion for reconsideration having been denied, they filed this petition for certiorari under Rule 65, alleging grave abuse of discretion on the part of NLRC in their reversal of the LAs decision.

ISSUE:WON NLRC committed a grave abuse of discretion when it reversed the LA decision (YES)

RATIO:The NLRC committed a grave abuse of its discretion; its decision is reversed and set aside. AKELCO alleges/argues that: Respondents considered the transfer to Kalibo illegal, even when it did not have the power to do so, and hence not only objected to the order of transfer but completely defied the same by staying in Lezo. Respondents defiance of the order of transfer resulted in the disruption of AKELCOs business operations. Respondents do not have a choice on where to work and hence, must be considered as dismissed by the reason of their defiance to report to Kalibo. Respondents illegally collected fees and charges from AKELCOs customers and arrogated the same unto themselves It was an error for the NLRC to consider that the computation of claims for wages and benefits merely submitted by the respondents as it basis for overruling the Labor Arbiter when it should have done so only on the basis of substantial evidence. The Solicitor-General supported the contentions of AKELCO because the respondents could not have possibly worked during the interregnum since all the records and equipment of AKELCO were brought to Kalibo from the old office in Lezo and that the computations submitted by respondents is not proof of rendition of work. The Court found merit in the position of AKELCO and the Solicitor General. Respondents have not proven that they had indeed rendered services during the interregnum of Jun 1992 Mar 1993 so as to entitle them to the compensation they claim. Respondents base their claim on three points: (a) the letter-request of the office manager addressed to AKELCO, (b) AKELCOs reply to the letter-request, which they consider as assurance of the payment of their claims, and (c), the computation of their unpaid wages, which they submitted themselves to the NLRC. The Court, however, does not consider them as substantial evidence that can support the NLRC decision. They do not really establish the fact that the respondents actually rendered services during the interregnum. Moreover: (a) The office manager who submitted the letter-request was actually one of the respondents own and is a claimant himself. His actions, therefore, in this regard must be considered as self-serving and biased. (b) AKELCOs reply to the letter request cannot be taken as an assurance of payment, and even less so, as an approval of respondents claim. At best, it is only an undertaking to recommend the payment of the claims. It is also noteworthy that the payment was to be subject to the availability of funds and the approval of the Board. (c) NLRC did err in merely relying on the submission of computations from the respondents as its basis for overturning the LA decision AKELCO, on its part, was able to show that respondents did not render service during the interregnum. AKELCOs resolution to effect the temporary transfer from Lezo to Kalibo was approved by the NEA administrator (which had control over all electric cooperatives). This establishes that there was indeed a necessity to make such transfer. The issuance of the resolution must be considered as a valid exercise of management prerogative. AKELCOs records and equipment were also transferred from Lezo to Kalibo. Respondents claim that they continued to report for work in Lezo should be then considered as having no basis. Respondents excuse for their defiance is that they considered the transfer to be illegal. However, they did not have the color nor the authority from the law to make that declaration unilaterally. What they should have done was to follow the order as it had the presumption of legality. The unnumbered resolution (which declared the return of operations to Lezo) was also validly proven by AKELCO to be an invalid act of its Board. This is in consideration of the following subsequent actions of AKELCO: (a) it issued a resolution dismissing from employment those employees who refused to work, (b) the issuance of another resolution accepting back the dismissed respondents out of compassion, subject to the principle of no work, no pay, (c) a resolution rejecting the claims of respondents for the wages during the interregnum. There would have been no need for these resolutions if the unnumbered resolution was indeed valid and binding.

DISP: NLRC decision reversed and set aside. LA affirmed.

Millares v. NLRC and PICOP (1999)FACTS:1. Petitioners (numbering 116) were employed by the Paper Industries Corp. of the Phils (PICOP), occupying various positions in Bislig, Surigao del Sur.2. 1992: PICOP suffered a financial setback because of the govt regulations on logging as well as the economic crisis. In view thereof, PICOP undertook a retrenchment program and terminated the services of petitioners.3. In accord with the Labor Code provisions, the petitioners received separation pay computed at the rate of 1 month of basic pay for every year of service. Petitioners, however, were of the view that the allowances they allegedly received regularly should also be included in the computation. The following were the allowances referred to: Staff/Managers Allowance while PICOP had free housing facilities for the employees, there were limited slots. While fully occupied, PICOP would then give this allowance for those who live outside the facilities but near the mill site. However, when there is a vancancy, the employee would stop receiving the allowance and would take up the vacancy. Transportation Allowance granted to those who use their own vehicles in the performance of their duties. Should conditions no longer obtain, the payment of this allowance is discontinued. Bislig Allowance given to division managers and corporate officers assigned in Bislig due to the hostile environment obtaining. When they are assigned out of Bislig, however, they will cease to receive this.4. There being no resolution on the matter, the parties submitted it for the decision of the Executive Labor Arbiter.5. ELA: Decision in favor of petitioners. Applying Art. 97 (f) of the Labor Code which defines wage, the allowances in question, being customarily furnished by PICOP and regularly received by petitioners, forms part of the wages and hence should be included in the computation for the separation pay in retrenchment. Another point is that in the cases of Santos v. NLRC and Soriano v. NLRC, it was ruled that not only basic salary but also regular allowances which the employee had been receiving should be included in the computation of the separation pay.6. NLRC: ELA reversed. The allowances do not form part of the basic pay because they are contingency-based. The Santos and Soriano cases are also inapplicable since they involved cases of illegal dismissal where the separation pay was granted in lieu of their reinstatement. It is the case of Estate of Eugene Kneebone v. NLRC, which finds control in this case where it was held there that representation and transportation allowances were deemed not part of the salary and, hence, should not be included in the separation pay computations.7. Hence this petition.

ISSUES:WON the NLRC committed a grave abuse of discretion on the part of the NLRC for reversing the findings of the ELA (NO)

RATIO:There was no grave abuse of discretion on the part of the NLRC. In cases of retrenchment, the employer is obligated by Art. 283 of the Labor Code to provide separation pay computed to be equivalent to 1 month pay or at least month pay for every year of service. The question now is what does the term pay in the provision connote? Relating Art. 283 to Art. 97, pay and wage mean/refer to the same thing. The Court gave focus to the last part of Art 97 (f): that wage includes the fair and reasonable value, as determined by the Secretary of Labor, of board, lodging, or other facilities customarily furnished by the employer to the employee. As to the aspect of being customary, the fact that the allowance is furnished monthly does not automatically grant it the character of being customary. The allowances in question are temporary only because there are certain conditions that, when met, will cause these allowances to cease from being given. As to the aspect of facility, Sec. 5, Rule VII, Book III of the Implementing Rules defines it as including articles or services for the benefit of the employee or his family, and excluding tools of the trade or articles or service primarily for the benefit of the employer or necessary to the conduct of the employers business. In determining what privilege constitutes facility, the criterion is its purpose. Since the assailed allowances were for the benefit and convenience of the company, it is not considered as facility. This is supported by the fact that the assailed allowances were not subject to withholding tax. As for the value being determined by the Secretary of Labor, it is actually PICOP that determined the value of these assailed allowances and were given in lieu of the actual provisions for housing and transportation needs whereas the Bislig allowance was in consideration of the hostile environment at the time. The conclusion is that, as reached by the NLRC, these allowances do not form part of the petitioners wages since they are not regularly received. The cited cases by the ELA is inapplicable since it has been determined that these allowances were not regularly received.

DISP: NLRC affirmed. Petition dismissed.

Phil. Duplicators v. NLRC and Phil. Duplicators Union-TUPAS (1993)FACTS:1. PD is a domestic corporation engaged in the sale of copying machines and other related products. In their employ are salesmen who are compensated with a fixed/guaranteed salary plus commissions based on the price of the machines sold.2. PD 851 was promulgated, prescribing the payment of 13th month pay to all employees receiving a basic salary of not more than P1000/month. This was amended by Memorandum Order No. 28 which removed the limit of P1000/month and instead entitled all rank-and-file employees to receive the 13th month pay. The Ministry of Labor then issued MOLE Explanatory Bulletin No. 86-12, clarifying that employees who are plaid a fixed or guaranteed wage plus commission are also entitled to the 13th month pay.3. In view of these issuances, the Union asked for the payment of the 13th month pay computed on the basis of their fixed salary plus their commissions.4. PD refused the request but stated that it would respect the opinion coming from the Ministry of Labor.5. Hence, Dir. Sanchez of the Bureau of Working Conditions rendered an opinion in favor of the Union, declaring the issuances to be applicable to the employees of PD. It provided that the 13th month pay is to be computed on the basis of their fixed salary plus their total commissions for the calendar year divided by twelve6. Despite the opinion, PD refused payment of the 13th month pay based on both fixed salary and commissions; it only paid based on the fixed salary. Union then instituted a complaint against PD for the non-payment of the differentials.7. LA: Complaint adjudged in favor of the Union. PD directed to pay the differentials.8. NLRC: LA affirmed. On PDs argument that the issuances regarding the application of the 13th month pay to those receiving fixed wages and commissions, the NLRC held that it had no authority to pass on the validity of the Explanatory Bulletin 86-12 and it shall, therefore, remain as a source of rights until declared invalid by a proper body (i.e., the Supreme Court).9. Hence, this petition.

ISSUE:WON the 13th month pay computations should include the commissions (YES)

RATIO:The 13th month pay granted to PDs employees should include their commissions received. Art. 97 (f) defines wage as remuneration or earnings, however designated for work done or to be done, or for services rendered or to be rendered In the instant case, the sales commissions received by PDs salesmen is without question a part of the compensation paid to them for services rendered and hence is part of the wage or salary, as defined by Art. 97 (f). The fact that this compensation is in the nature of a commission, it does not detract from its character that it is a part of the wage paid to the salesmen. The term basic salary as used in PD 851 was only used to distinguish wage from fringe benefits (e.g., vacation leave, maternity leave, etc.). Sales commissions are still part of these wages and are not mere fringe benefits. A look at the IRR of PD 851 will tell that what were excluded from the term basic salary were profit-sharing payments and all allowances and monetary benefits which are not considered or integrated as part of their regular salary. The sales commissions received by the salesmen were not of this nature and hence, not excluded. The opinion issued by Dir. Sanchez is controlling and should be accorded great respect as it constitutes contemporaneous administrative construction, to which the Court traditionally accords respect Finally, it should be noted that the opinion by Dir. Sanchez was adopted and reiterated by Sec. Drilon in the Revised Guidelines on the Implementation of the 13th Month Pay Law.DISP: Petition dismissed.