LLB 2C Labor Wages Cases

5/20/2018 LLB 2C Labor Wages Cases

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ROSARIO A. GAA,

vs.THE HONORABLE COURT OF

APPEALS, EUROPHIL INDUSTRIES

CORPORATION, and CESAR R.

ROXAS, Deputy Sheriff of Manila.

Marvic Patricia Go


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FACTS

Petitioner Rosario A. Gaa was the buildingadministratorof Trinity Building at T.M.Kalaw Street, Manila.

Respondent Europhil Industries Corporationwas one of the tenants.

On December 12, 1973, EurophilIndustries filed a case against Gaa in CFIManilafor damages "for perpetrating actsthat Europhil Industries considered a

trespass on its rights, namely, cutting of itselectricity, and removing its name from thebuilding directory and gate passes of itsofficials and employees"


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Europhil won. CFI ordered Gaa to pay thesum of P10,000.00 as actual damages,P5,000.00 as moral damages, P5,000.00 asexemplary damages and to pay the costs ofthe suit.

Decision became final and executory, a writof garnishment was served by Deputy SheriffCesar A. Roxas upon El Grande Hotel whereGaa was employed, garnishing her "salary,commission and/or remuneration."

Gaa filed a motion to lift said garnishmenton the ground that remuneration areexempted from execution under Article 1708of the New Civil Code.

FACTS


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ART. 1708. The laborer's wageshall not be subject to execution orattachment, except for debtsincurred for food, shelter, clothing

and medical attendance. Motion was denied by RTC. Motion

for reconsideration also denied. Gaafiled with the Court of Appeals a

petition for certiorari which was alsodismissed and case was elevated tothe supreme court.

FACTS


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Whether or not the remuneration or salary of

petitioner Gaa is exempt from execution or

garnishment in accordance with Art. 1708 of

the New Civil Code?

ISSUE


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No,Gaassalary is not exempted fromexecutuion or garnishment.

Gaa is not an ordinary or rank and filelaborer but an employee occupying aposition equivalent to that of amanagerial or supervisory position.

The Court has held that a "laborer," isone whose work depends on physical

power to perform ordinary manual labor,and not one engaged in work requiringmental skill or business capacity, involvingthe exercise of intellectual faculties.

RULING


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Article 1708 usedthe word "wages"and not "salary"inrelation to "laborerfor "wages"as distinguished from"salary", applies to the compensation for manual labor,skilled or unskilled, paid at stated times, and measured by

the day, week, month, or season, whereas"salary"

denotes a higher degree of employment, or a superiorgrade of services, andimplies a position of office.

The term wagesindicates considerable pay for a lowerand less responsible character of employment, while

"salary"is suggestive of a larger and more importantservice.

Art.1708 isfor laboring men or women whose work is

manual.

RULING


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JOSE SONGCO, ROMEO CIPRES,

and AMANCIO MANUEL,vs

NATIONAL LABOR RELATIONS

COMMISSION (FIRST DIVISION),LABOR ARBITER FLAVIO AGUAS,

and F.E. ZUELLIG (M), INC.A case presentation by Marvic Patricia Go 2C


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FACTS

RespondentF.E. Zuellig (M), Inc., filedwiththe Department of Labor an applicationseeking clearance to terminate the servicesof Petitioners Jose Songco, Romeo Cipres,

and Amancio Manuel on the ground ofretrenchment due to financial losses.

Petitioners opposed at the beginning butlater on manifested that they are no longercontesting their dismissal.

Parties agreed that the sole issue to beresolved is the basis of the separation paydue to petitioners.


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Petitionerswere salesmen who received monthly salariesof at least P400.00 and commissionfor every sale theymade.

CBA between Zuelig and the union of which petitioners

were members contained the proviso: "Any employee who

is separated from employment due to old age, sickness,death or permanent lay-off, not due to the fault of said

employee, shall receive from the company a retirement

gratuity in an amount equivalent to one (1) month's salary

per year of service.

Labor Arbiterordered Zuelig to pay petitioners separationpay equivalent to their one month salary (exclusive ofcommissions, allowances, etc.) for every year of servicewith the company.

Petitioners appealed to the NLRC but was dismissed. Case

was elevated to the Supreme Court.

FACTS


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Whether or not earned sales

commissions and allowances should

be included in the monthly salary of

Songco, et al. for the purpose of

computing their separation pay.

ISSUE


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Yes. Article 97 of the Labor Code includescommission as part on one's salary, to wit;'Wage' paid to any employee shall mean theremuneration or earnings, howeverdesignated, capable of being expressed interms of money, whether fixed or ascertainedon a time, task, piece, or commission basis.

In Santos v. NLRC, SC ruled that "in thecomputation of backwages and separationpay, account must be taken not only of thebasic salary of petitioner but alsoof hertransportation and emergency livingallowances."

RULING


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RULING

Article 97 is explicit that commission is included in thedefinition of the term "wage.

Commission is the recompense compensation or reward of an

agent, salesman, executor, trustee, receiver, factor, broker or

bailee, when the same is calculated as a percentage on the

amount of his transactions or on the profit to the principal. Court takes judicial notice of the fact that some salesmen do

not receive any basic salary, but depend on commissions andallowances or commissions alone,although an employer-employee relationships exists.

Article 4of the Labor Code states, that "all doubts in theimplementation and interpretation of the provisions of the

Labor Code including its implementing rules and regulations

shall be resolved in favor of labor"


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Ruga vs. NLRC(G.R. No. 72654-61)

Riza Toledo


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FACTS

Alipio Ruga, et al. worked asfishermen-crew members for afishing vessel operated and

owned by De Guzman FishingEnterprises.

They were employed invarious capacities and offeredservices in the conduct of DeGuzmanstrawl fishing business.


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How were they paid?

As agreed, Mrs. Pilar De Guzman,cashier for the company, paid thepetitioners in cash, on commission

basis, wherein they received 13% ofthe proceeds of the total sale of thefish-catch if the amount exceeded thecost of crude oil during the duration

of the fishing trip;Otherwise, they got only 10% of

the sale proceeds.


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On September 11, 1983,

after they arrived at the

fishing port, Jorge DeGuzman, president of the

fishing company, told the

petitioners that they areto proceed at the

Camaligan Police Station

on the allegation that they

sold some of their catch at

mid-sea.


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Petitioners denied the charge

and claimed that it was just acountermove to their havingformed a labor union andsubsequently becoming

members thereof.

In the course of theinvestigation, the charge was notproved and no criminal charges

were filed. However, thepetitioners were not allowed toreturn to work on that same day.


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Individually, petitionersfiled complaints for illegal

dismissal and non-paymentof 13thmonth pay, ECOLAand SIL.

The fishing company, in

the position paper theysubmitted, denied theexistence of an employer-employee relationshipbetween the parties,positing that they wereengaged in a joint fishingventure.


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Ruling of Labor Arbiter and NLRC

After failing to reach an amicable

settlement, hearings for the case ensued and

the labor arbiter dismissed all of the

petitioners complaints finding that noemployer-employee relationship existed but a

jointfishing venture.

NLRC affirmed the same.


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Petitioners stand

An employer-employee relationship exists.

They were directly hired by the general managerand operations manager of the company.

They have been employed for an average of 8 to15 years in different capacities.

The conduct of their operations and their fishingtrips were controlled by the companys operations

manager.They were not allowed to join other outfits

without the operation managers permission.


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They were compensated

on percentage commissionbasis based on the sales of

the fish-catch.

They had to follow policies,rules and regulations which

were imposed by the

fishing company.


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Fishing Companys Defense

Doctrine in the Pajarillo vs. SSS case (boat-owner

supplies the boat and equipment while the crew

members contribute labor; Hence, no E2E

relationship)Based on reports, petitioners sold their fish-catch

at mid-sea without the consent and knowledge of

the company, warranting their dismissal.


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Ruling of the Supreme

Court

The doctrine in the Pajarillo case does not apply.

A joint fishing venture does not exist in the case atbar because the fishing company exercises CONTROL

over the crew-members, fixing the schedule for theirfishing trip and directing their time of return to thefishing port.

Application of four-fold test:The petitioners were directly hired by the general

manager and operations manager for the fishingcompany.


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Their employment is necessary or desirable in the

trade or business of the company for a period of8-15 years.

This qualifies them as regular employees under Art.281 of the Labor Code.

The petitioners received compensation on apercentage commission basis which falls withinthe term wage.

Petitioners were not given the opportunity to air

their side as regards the accusation against them. This gives rise to the disciplinary power that is exercised

by the fishing company over them.

In the same way, the dismissal was characterized byundue haste, making it illegal.


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Additionally, the incident contradicts thecompanys theory that there is a jointfishing venture that existed.

As such, the order of the NLRC isreversed and set aside. The fishingcompany is ordered to reinstate the

petitioners to their former positions orany equivalent positions with 3-year

backwages and other monetarybenefits.


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ATOK BIG WEDGE MUTUAL BENEFIT

ASOCIATION(PETITIONER)

versus

ATOK BIG WEDGE MINING COMPANY,

INCORPORATED (RESPONDENTS)

Mark Vincent Baculna


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What happened in this case?

Employers and Labourers: Agreement Between

them interpreted.

Minimum Wage Law: Agreement to deduct cost

of facilities is valid.

Supplements were distinguished from Facilities.


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The Union demanded 0.50 wageincrease among other demands

Conflict on the demands placed underconciliatory mediation under the CIR

Minimum wage fixed at 2.65 a day with rice ration

3.20 without rice ration

Denied the deductions for:

Value of housing facilities

The efficiency bonus

Also ordered:

The retroactive affectivity of the order

Date of Demand: September 4, 1950


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Effect on the Company

The mining company appealed the CIRs

decision.

Subsequently, the mining company also filed

an urgent petition to stop operations and lay

off labourers and employees.


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TheMinimumWage Law

IncreasedTaxes, High

Cost ofMaterials

Quantity ofOre

Deposits


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The Agreement

Due to possible bankruptcy, the Court optedto convene the parties for voluntaryconciliation and mediation.

An agreement between the two parties wasreached.

The agreement is effective from August 4,1952 t0 December 31, 1954.


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The Terms

The company agreed to abide by whatever the

SC decides.

Both the Company and Union agreed that

Facilities given by the company and

constitutes part of the workers wages shall be

valued as per their agreement and may be

deductible partially or in full.


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The Agreed Values Totals: 1.80

Rice is at 0.55 per day

Housing Facilities is at 0.40per day

All other Facilities is at 0.85per day


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The Unions Response

The Union filed a petition for enforcement of

the Agreement. The Union alleges that the

agreement is exclusive of the wage increase

mandated by the Minimum Wage Law, as wellas payment of differentials.

The Union prayed for the payment of aminimum cash wage of 3.45 with Rice Ration

or 4.00 without Rice Ration.


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The Companys Opposition

The company opposed on the grounds that

their agreement was made with the end view

that the cost of production be not increased in

any manner. It was intended to supersede theMinimum wage law with respect to the

minimum cash wage payable.


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The Result

The Court of Industrial Relations denied the

Unions petition on the grounds that the

agreement between both parties was entered

after and with full knowledge of the minimumwage law and the Courts Decision. That such

agreement indicates that both parties

intended to be regulated by the agreement.


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Elevation to the Supreme Court

With its motion for reconsideration for both

its petitions denied, the Union filed a petition

for review by certoriari with the Supreme

Court.

The Court identified three issues


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The Issues

Is the agreement merely provisional until a final decision is promulgated or not?

Contradiction between Par. 1 and Par 3 of the Agreement

The Union Argues that to allow the deductions would be a waiver and violation of theminimum wage law (R.A 602. Sec. 20).

Do the Deductions constitute as waiver of the Minimum Wage Law?

Should the overtime pay be calculated solely from the cash portion of the wage or doesinclude the total wage including the cost of facilities?

Wage and Supplement Defined


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On the First Issue

The agreement is not merely provisional

Basis: The agreement was made retroactive

which indicates that the agreement is bindingbefore and after and not merely for the periodof appeal. The Court recognizes the merit inthe respondents assertion that suchagreement is a compromise that is fair to allparties.


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The Second Issue

An agreement to deduct certain facilities

received by the laborers from their employer

is not a waiver of the minimum wage fixed by

the law. The Cost of facilities are deductible aslong as they are of fair and reasonable value

as determined by the Secretary of Labor. Both

parties implicitly by virtue of the agreementagreed that the amounts deducted are of fair

and reasonable value.


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On Third Issue

Supplements, therefore, constitute extra remuneration or special

privileges or given to or received by the laborers over and abovetheir ordinary earnings or wages.

Facilities, on the other hand, are items of expense necessary for thelaborers and hid familys existence and subsistence, so that by

express provision of the law (sec. 2 [g]) they form part of the wageand when furnished by the employer are deductible there from sinceif they are not so furnished, the laborer would spend and pay forthem just the same.


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There is no underpayment:

Under the Minimum Wage Law, this minimumadditional compensation is P 1.00 a day which is25 % of P 4.00. While the respondent companycomputes the additional compensation given to

its laborers for works on Sundays and holidays onthe cash portion of their wages of P 2.20, it isgiving them 50 per cent thereof, or P 1.10 a day.Considering that the minimum overtime

compensation fixed by law is P1, thecompensation being paid by the respondentcompany to its laborers is even higher than suchminimum legal additional compensations.


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STATES MARINE CORPORATION


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STATES MARINE CORPORATIONand ROYAL LINE, INC.,

vs.

CEBU SEAMEN'S ASSOCIATION,INC.,

Robert IanMaranon

LLB 2C

G.R. No. L-12444February 28, 1963

Labor Standards

FACTS


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FACTS

The Union (CEBU SEAMEN'SASSOCIATION, INC.) alleged thatthe officers and men working on

board the petitioners' vessels have

not been paid their sick leave,

vacation leave and overtime pay;that the petitioners threatened or

coerced them to accept a reduction

of salaries, observed by other ship

owners.

After the Minimum Wage Law hadtaken effect, the petitioners

required their employees on board

their vessels, to pay the sum of P.40

for every meal, while the masters

and officers were not required topay their meals.

LABOR STANDARDS - WAGES

LLB 2C

Robert Ian Maranon

FACTS


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FACTS

Because Captain Carlos Asensi hadrefused to yield to the general

reduction of salaries, the

petitioners dismissed said captain

who now claims for reinstatement

and the payment of back wagesfrom December 25, 1952, at the

rate of P540.00, monthly.

The petitioners' shippingcompanies, in their answer, averred

that there is no law which provides

for the payment of sick leave or

vacation leave to employees or

workers of private firms.


LLB 2C

Robert Ian Maranon

FACTS


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FACTS

It was the defense of theemployers-petitioners that in

enacting Rep. Act No. 602

(Minimum Wage Law), the

Congress had in mind that the

amount of P.40 per meal, furnishedthe employees, should be deducted

from the daily wages.

A decision was rendered onFebruary 21, 1957 in favor of the

respondent union.

The motion for reconsideration

thereof, having been denied, thecompanies filed the present writ of

certiorari, to resolve legal question

involved.


LLB 2C

Robert Ian Maranon

ISSUES


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ISSUES

1) WON there is a conflict betweenSection 3, par. F and SEC. 19 of the

Minimum Wage Law, (R.A. No. 602).

2) WON the CIR erred in declaringthat the deduction for costs of

meals from the wages or salaries

after August 4, 1951, is illegal and

same should be reimbursed to the

employee concerned, in spite ofsaid section 3, par. (f) of Act No.

602.


LLB 2C

Robert Ian Maranon

RULING


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RULING

1) Section 3, par. f, of the MinimumWage Law, (R.A. No. 602), provides as

follows

(f) Until and unless investigations by the

Secretary of Labor on his initiative or on

petition of any interested party result in a

different determination of the fair andreasonable value, the furnishing of meals

shall be valued at not more than thirty

centavos per meal for agricultural

employees and not more than forty

centavos for any other employees covered

by this Act, and the furnishing of housingshall be valued at not more than twenty

centavos daily for agricultural workers and

not more than forty centavos daily for other

employees covered by this Act.

Petitioners maintain, in view of theabove provisions, that in fixing the

minimum wage of employees,

Congress took into account the

meals furnished by employers and

that in fixing the rate of fortycentavos per meal, the lawmakers

had in mind that the latter amount

should be deducted from the daily

wage, otherwise, no rate for meals

should have been provided.


LLB 2C

Robert Ian Maranon

RULING


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RULING

However, section 19, same law, states

SEC. 19. Relations to other labor laws

and practices.Nothing in this Act

shall deprive an employee of the right

to seek fair wages, shorter working

hours and better working conditions

nor justify an employer in violating any

other labor law applicable to his

employees, in reducing the wage now

paid to any of his employees in excess

of the minimum wage establishedunder this Act, or in reducing

supplements furnished on the date of

enactment.

It is evident that Section 3(f)constitutes the general rule, while

section 19 is the exception.

In other words, if there are no

supplements given, within themeaning and contemplation of

section 19, but merely facilities,

section 3(f) governs. There is no

conflict; the two provisions could, as

they should be harmonized.


LLB 2C

Robert Ian Maranon

RULING


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RULING

2) The benefit or privilege given to theemployee which constitutes an extra

remuneration above and over his basic

or ordinary earning or wage, is

supplement.

When said benefit or privilege is

part of the laborers' basic wages, it

is a facility.

The criterion is not so much withthe kind of the benefit or item(food, lodging, bonus or sick leave)given, but its purpose.

Considering that the meals werefreely given to crew members prior

to August 4, 1951, while they were

on the high seas "not as part oftheir wages but as a necessary

matter in the maintenance of thehealth and efficiency of the crewpersonnel during the voyage", thedeductions therein made for the

meals given after August 4, 1951,

should be returned to them, and the

operator of the coastwise vessels

affected should continue giving the

same benefit.

LABOR STANDARDS -WAGES

LLB 2C

Robert Ian Maranon


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MABEZA VS NLRC

271 SCRA 670

(Labor Law/Labor Standards:

Abandonment of Work & Loss ofConfidence)

Omel Pasquin


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FACTS

1. Norma Mabeza was an employee hired by HotelSupreme in Baguio City. In 1991, an inspection was madeby the Department of Labor and Employment (DOLE) atHotel Supreme and the DOLE inspectors discovered severalviolations by the hotel management. Immediately, theowner of the hotel, Peter Ng, directed his employees toexecute an affidavit which would purport that they haveno complaints whatsoever against Hotel Supreme. Mabezasigned the affidavit but she refused to certify it with theprosecutors office. Later, when she reported to work, she

was not allowed to take her shift. She then asked for a leave

but was not granted yet she was not allowed to work. 2. In May 1991, she then sued Peter Ng for illegal

dismissal. Peter Ng, in his defense, said that Mabezaabandoned her work.


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FACTS

Petitioner Rosario A. Gaa was the buildingadministratorof Trinity Building at T.M.Kalaw Street, Manila.

Respondent Europhil Industries Corporationwas one of the tenants.

On December 12, 1973, EurophilIndustries filed a case against Gaa in CFIManilafor damages "for perpetrating actsthat Europhil Industries considered atrespass on its rights, namely, cutting of itselectricity, and removing its name from thebuilding directory and gate passes of itsofficials and employees"


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1. Whether or not there is abandonment in the case at bar.

2. Whether or not loss of confidence as ground for dismissalapplies in the case at bar.

FACTS


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NO.

The side of Peter Ng is bereft of merit so is the decision of theLabor Arbiter which was unfortunately affirmed by theNLRC.

SC RULING


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ABANDONMENT

There was no abandonment.

Mabeza returned several times to inquire about the status of

her work or her employment status. She even asked for aleave but was not granted. Her asking for leave is a clearindication that she has no intention to abandon her workwith the hotel. Even the employer knows that his purported

reason of dismissing her due to abandonment will not fly sohe amended his reply to indicate that it is actually loss ofconfidencethat led to Mabezasdismissal.

SC RULING


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SC RULING

LOSS OF CONFIDENCE

It is true that loss of confidence is a valid ground to dismiss an employee. Butideally, this only applies to workers whose positions require a certain level ordegree of trust particularly those who are members of the managerial staff.

Evidently, an ordinary chambermaid who has to sign out for linen and otherhotel property from the property custodian each day and who has to accountfor each and every towel or bedsheet utilized by the hotelsguests at the endof her shift would not fall under any of these two classes of employees forwhich loss of confidence, if ably supported by evidence, would normally

apply. Further, the suspicious filing by Peter Ng of a criminal case againstMabeza long after she initiated her labor complaint against him hardlywarrants serious consideration of loss of confidence as a ground of Mabezasdismissal.


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Mark Vincent Baculna


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UNDERSTANDING THE CASE

This is a consolidated case, the

facts for each case shall be

presented individually but the

issues shall be discussed

collectively.


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Filed by CIT Employees against the schoolfor non payment of COLA, 13thmonth

differentials and Service Incentive Leave.

Cebu Institute ofTechnology vs Hon. BlasOple, Minister of Labor

and Employment, Et. Al.

Filed by ten faculty members for alleged

non compliance with P.D. 451, whichcharges allowances to 60% of the proceedsfrom tuition fee increases.

Divine Word College ofLegaspi vs Hon. Vicente

Leogardo Jr. , DeputyMinister of Labor andEmployment, Et. Al.

Filed by the Union against FEU for allegednon payment of legal holiday pay andunderpayment of thirteenth (13th) monthpay as well as non compliance with P.D. 451

FEU Employees LaborUnion vs FEU and the

NLRC


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This is a class suit brought by petitioner in behalf offaculty members and employees of private schoolsnationwide. Petition seeks to have par. 7 and 7.5 ofMECS order no. 5 (1985) declared asunconstitutional for being in conflict with P.D. 451.

Gregorio T. Fabros Et. Al. vsHon. Jaime C. Laya, Minister

for Eduction Culture and

Sports

Failure of CBA negotiations led to work stoppage.The Ministry of Labor intervened leading to a return

to work agreement between both parties. Theresulting CBA is being challenged by petitioners for

Being in violation of P.D. 451

Jasmin Biscocho Et. Al. vsHon. Augusto Sanchez,

Minister of Labor andEmployment and EspirituSanto Parochial School

Faculty Association

Petitioners are parents of the children studying inthe school who oppose the tuition fee increaseswhich was the result of the CBA agreement in theBiscocho Case.

Ricardo C. Valmonte andCorazon Badiol vs Hon.

Augusto Sanchez, EspirituSanto Parochial School and

Espiritu Santo ParochialSchool Faculty Association.


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Common Issues

Whether or not allowances and other fringebenefits for employees are chargeable

against the 60% portion of the incrementalproceeds provided for sec 3. (a) of P.D. 451.

Whether or Not such allowances and fringebenefits are still chargeable after the

effectivity of the Education Act of 1982 (B.P.Blg. 232). Is there a repeal?

Whether or not schools, through a CBA, mayallot more than the 60% provided for by the

law.


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On the First Issue

Argues that the COLA is included on the Salary Increase it gave toemployees.

The solicitor General stated that if under the effectivity of P.D. 451the 60% would only cover wage, if under B.P. 232 it should coverwages and other benefits.

CIT

Argues that COLA and other benefits are already included in the 60%chargeable as provided for in P.D. 451.

Claims exemption from U.E. Case by virtue of retroactivity.DWC

The Union submits that monetary benefits other than wageincreases are not chargeable to the 60% portion, in line with theRuling in the Pangasinan Univ and U.E. cases.

Referred to Art. 97(f) of labor Code which defined wages.FEU


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Ruling on the First Issue

The 60% incremental proceeds from tuition

fee increases are to be devoted entirely to

wage or salary increases which means

increase in basic salary. The law cannot beconstrued to include allowances since these

are above and over the basic salaries.

Rules promulgated by the MECS incompatiblewith the ruling is struck down.


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On the Second Issue Fabros Case

Argues that B.P. 232 did not repeal P.D. 451 asthere is no conflict, and that P.D. 451 as a

specific law is not repealed by B.P. 232 which

is a general law.

The PACU and the Solgen, disagreed statingthat P.D. 451 has been repealed by B.P. 232

because of conflict in effect. There is thereforerepeal by implication.


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Ruling on the Second Issue

The Court hold that there is a repeal. This isbecause there are effects of the two laws whichare incompatible. Under P.D. 451, the tuition feeincreases is chargeable for wages only while on

B.P. 232, both wages and other benefits arechargeable. Under P.D. 451, the power o

apportion the proceeds is reserved with thepresident, whereas, under B.P. 232 such power iswith the MECS. The assailed MECS proclamation

is valid under B.P. 232.


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On the Third Issue

In the Valmonte and Biscocho cases, petitioners arguefor the nullification of the MECS order on two differing

grounds.

In the Biscocho Case, petitioners argue that of the90% increase agreed for in the CBA means only 45%which is less than the 60% provided for by P.D. 451.

There is diminution of Benefits.

In the Valmonte Case, petitioners argue that the LaborMinister may not order an increase above the 60%

threshold as such power to determine allotment oftuition fee increases falls within the purview of theMECS.


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Ruling on the Third Issue

Under B.P. 232 and the MECS and DECS

implementing rules, the 60% portion of tuition

fee increases may not be allotted for other

benefits. This is however, the minimum, whichmeans that employees may agree to a larger

portion.


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Specific Issues

CIT CaseAdministrative Agencies are not

strictly bound by rules of procedure.

Incentive leave benefits : teaching personnel are

not deemed field personnel and are thus entitledto service leave benefits.

Divine Word College CaseLabor Standards

arising from violations of labor standard lawsare under the exclusive and original

jurisdiction of the Regional Director.

f


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Specific Cases

FEU CaseTransportation allowance is a form

of bonus which is equivalent to the 13th

month pay. However, in cases where it is less

than 1/12 of the basic salary, the employershall pay the difference.


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GENE DEE E. TAEDO

ISAE

vsQuisumbing

G.R. No. 128845

June 1, 2000


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THE PETITIONER

INTERNATIONAL SCHOOLALLIANCE OF EDUCATORS

International School Inc. is a

domestic educational

institution for dependents of

foreign diplomatic personnel

and other temporary

residents.


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THE RESPONDENTS

HON. LEONARDO A. QUISUMBING in his capacity as the Secretary of Laborand Employment;

HON. CRESENCIANO B. TRAJANO in his capacity as the Acting Secretary of

Labor and Employment;

DR. BRIAN MACCAULEY in his capacity as the Superintendent of

International School-Manila;

INTERNATIONAL SCHOOL, INC. fordependents of foreign diplomatic

personnel and other temporary residents.


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FACTS OF THE CASE

Pursuant to PD 732, the School employs its

personnel selected by it either locally or abroad.

Such personnel are exempt from applicable laws

and regulations due to their employment, exceptlaws that have been or will be enacted for the

protection of employees.

C S O C S


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FACTS OF THE CASE

The School classifies their faculty into two:(a) foreign hires and (b) local hires.

The School grants foreign hires benefits which

include housing, transportation, shipping costs,taxes, and home leave allowance not accorded to

local hires. Moreover, the former is paid 25% more

than the latter.

FACTS OF THE CASE


86/259

FACTS OF THE CASE

The School justifies the difference on twosignificant economic disadvantages that foreign

hires have to endure, to wit: (a) the dislocationfactorsand (b) limited time tenure.

Petitioner claims that the classification employed

by the School is a form of racial discrimination.

FACTS OF THE CASE


87/259

FACTS OF THE CASE

When the Collective Bargaining Agreementnegotiation reached a deadlock, the Secretary of

Labor assumed jurisdiction. The Acting Secretary

upheld the point-of-hire classification. He claimed

that the principle equalpay for equal workdoes

not find application in the present case.


88/259

ISSUE

Whether or not the Schoolssystem

of compensation is violative of the

principle of equal pay for equalwork

COURTS DECISION


89/259

COURTS DECISION

Yes. If an employer accords employees the sameposition and rank, the presumption is that these

employees perform equal work. There is no

evidence that foreign hires perform 25% more

effective than local hires. The local hires perform

the same services as the foreign hires and they

ought to be paid the same salaries.

COURTS DECISION


90/259

COURTS DECISION

The dislocation factor and the foreign hireslimited tenure is already adequately compensated

by benefits such as housing, transportation,

shipping costs, taxes and home leave travel

allowances not accorded to local hires.

COURTS DECISION


91/259

COURTS DECISION

It is the States right and duty to regulate therelations between labor and capital. Collective

bargaining agreements, as a labor contract, must

yield for the common good. If such contracts

contain stipulations that are contrary to public

policy, the courts shall not hesitate to strike down

these stipulations.

COURTS DECISION


92/259

COURTS DECISION

We rule that the point of hire classification is aninvalid classification. There is no reasonable

distinction between the services rendered by the

foreign hires and the local hires.


93/259


94/259

Cebu Autobus Company

vsUnited Cebu Autobus

Employees Association

(L-9742 October 27, 1955)

Rose Kareen Defensor

FACTS


95/259

FACTS

The company used to pay its drivers

and conductors, who were assigned

outside the city limits, aside from theirregular salary, a certain percentage of

their daily wage, as allowance for food.

FACTS


96/259

FACTS

Upon the effectivity of the Minimum

Wage Law, however, that privilege was

stopped by the company. The order of

the CIR to the company to continuegranting this privilege was upheld by

the Supreme Court.

ISSUE


97/259

ISSUE

Whether or not there is a violation

of Art. 100 of Labor Code.


98/259

RULING

GLOBE MACKAY CABLE AND RADIO


99/259

GLOBE MACKAY CABLE AND RADIOCORPORATION, FREDERICK WHITE and

JESUS SANTIAGO

vsNATIONAL LABOR RELATIONS

COMMISSION, FFW-GLOBE MACKAYEMPLOYEES UNION and EDA CONCEPCION

G.R. No. 81262 August 25, 1989

Santiago Sta. Maria

FACTS


100/259

On October 30, 1984 Wage OrderNo. 6 mandated an increase in thecost-of-living allowance of non-agricultural workers in the private

sector for P3.00. The order wascomplied with by the petitionerCorporation by multiplying the sameby 22 days, equivalent to the numberof working days in the company.

FACTS

FACTS


101/259

Respondent union alleges thatinstead of multiplying the COLA by22 it should be multiplied by 30representing the number of days in

a month, as what the corporation'snormal practice prior to the saidWage Order. Thus the union filed acomplaint against the Corporationfor illegal deduction,underpayment, unpaid allowances,and violation of Wage Order No. 6.

FACTS

ISSUE


102/259

Whether or not COLA under Wage Order

No. 6 should be multiplied by 22 or 30

representing the number of workingdays in a month.

ISSUE

RULING


103/259

Labor Arbiter Adelaido F. Martinezsustained the position of PetitionerCorporation by holding that since theindividual petitioners acted in their

corporate capacity they should not havebeen impleaded; and that the monthlyCOLA should be computed on the basisof twenty two (22) days, since theevidence showed that there are only 22

paid days in a month for monthly-paidemployees in the company.

RULING

RULING


104/259

His reasoning, inter alia, was as follows:To compel the respondent company to use 30

days in a month to compute the allowanceand retain 22 days for vacation and sick

leave, overtime pay and other benefits isinconsistent and palpably unjust. If 30 daysis used as divisor, then it must be used forthe computation of all benefits, not just

the allowance. But this is not fair tocomplainants, not to mention that it willcontravene the provision of the parties'CBA.

RULING

RULING


105/259

Section 5 of the Rules Implementing WageOrders Nos. 2, 3, 5 and 6 uniformly read asfollows:

Section 5. Allowance for Unworked Days.

All covered employees shall be entitled totheir daily living allowance during the daysthat they are paid their basic wage, even ifunworked. (Emphasis supplied)

... it is evident that the intention of the law isto grant ECOLA upon the payment of basicwages. Hence, we have the principle of

'No Pay, No ECOLA'.

RULING


106/259


107/259

Samahang Manggagawa sa Top

Form Manufacturing-UnitedWorkers of the Philippines

(SNTFM-UWP)

vsNLRC

Rose Kareen Defensor

FACTS


108/259

FACTS

Petitioner Samahang Manggagawa

sa Top Form ManufacturingUnited

Workers of the Philippines (SMTFM) was

the certified collective bargaining

representative of all regular rank and file

employees of private respondent Top

Form Manufacturing Philippines, Inc.

FACTS


109/259

FACTS

The employer granted an across-the-

board wage increase to its employees when

the minimum wage was raised by RA No. 6727

in 1989. When the regional wage board issuedW.O. No.01 in October 1990 followed by W.O.

No.02 in December of the same year, the

union demanded that the wage increases be

implemented again across-the-board.

FACTS


110/259

FACTS

When the employer refused to do so,

the union charged the company with ULP and

violation of Article 100 of the Labor Code

Labor Arbiter Jose G. De Vera

dismissed the complaint for lack of merit.

ISSUE


111/259

ISSUE

Whether or not an employer

committed an unfair labor

practice by bargaining in badfaith and discriminating against

its employees.

RULING


112/259

The Supreme Court through JusticeRomero, sustained the arbiters disquisition.

We agree with the Labor Arbiter and the NLRC that

no benefits or privileges previously enjoyed by thepetitioner union and the other employees were

withdrawn as a result of the manner by whichprivate respondent implemented the wage orders.

Granted that private respondent had granted an

across-the-board wage increase pursuant to RANo.6727, that single instance may not be

considered an established company practice.

RULING


113/259

T d R l


114/259

Traders Royal

BankVS

NLRC

Jed Adrian S. Jarabelo

FACTS


115/259

FACTS

On November 1986,TRADERS ROYAL BANK (TRB)

EMPLOYEES UNION filed a case

with the National Labor RelationsCommission (NLRC)for diminution

of benefits regarding holiday pay,

mid-yearand year-end bonuses.

FACTS


116/259

NLRC ruled and ordered theBank to PAY the employees holiday

paydifferentials for 1983-1986, as

well as mid-yearand year-endbonus differential for 1986.

FACTS

ISSUES


117/259

WHETHER or NOT the NLRCruling,

ordering the paymentof mid-year

and year-end BONUSdifferentials, iscorrect.

WHETHER or NOTthe granting of

BONUS has ripened into a companypractice.

ISSUES

FACTS


118/259

1. NO, the NLRCruling is NOTcorrect.As defined, A BONUS IS A GRATUITY oran act of liberality of the giver whichthe recipient has no right to demand

as a matter of right.

The granting of bonus is basically aMANAGEMENT PREROGATIVE which

cannot be forced upon the employer,thus it cannot ripen into a companypractice.

FACTS

FACTS


119/259

Furthermore, the Bank weakenedconsiderably due to suspicionsthat it was aMarcos-owned and controlled bank, andwas placed under seizure by the PCGG.

To sum it all up, since bonuses came fromits profits, if there were No profit, thereforNo bonus. The Bank may not be forced to

give bonuses it cannot pay, and in effect,be penalized for its past generosity to itsemployees.

FACTS


120/259


121/259

John Paul L . Lauron

UNIVERSAL CORN

PRODUCERS, PETITI ONER,vs.

THE NATIONAL LABOR

RELATIONS COMMISSION,respondent

FACTS


122/259

C S

The COMPANY agrees to grant all regular

workers within the bargaining unit with at leastone (1) year of continuous service, a Christmas

bonus equivalent to the regular wages for seven

(7) working days, effective December 1972. The

bonus shall be given to the workers on the

second week of December.

Sometime in May 1972, the petitioner and the Universal Corn Products

Workers Union entered into a collective bargaining agreement in which itwas provided:

FACTS


123/259

In the event that the service of a worker is notcontinuous due to factory shutdown, machinebreakdown or prolonged absences or leaves,the Christmas bonus shall be prorated inaccordance with the length of services that

worker concerned has served during the year .

Sometime in May 1972, the petitioner and the Universal Corn

Products Workers Union entered into a collective bargaining

agreement in which it was provided:

FACTS


124/259

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

The collective bargaining agreement in questionexpired without being renewed.

On June 1, 1979, the parties entered into an"addendum" stipulating certain wage increasescovering the years from 1974 to 1977.

Simultaneously, they entered into a CBA for theyears from 1979 to 1981.

FACTS


125/259

The new CBA did not refer to the "Christmasbonus" theretofore paid but dealt only with salary

adjustments.

It deliberately excluded the grant of Christmas

bonus with the enactment of Presidential DecreeNo. 851 on December 16, 1975.

Since 1975, petitioners had been paying its

employees 13th-month pay pursuant to the

Decree.

ISSUE


126/259

Whether or not the 13th-month pay law does

not cover employers already paying their

employees an "equivalent" to the 13thmonth pay.

RULING


127/259

A bonus under the CBA is an obligation created by the contract

between the management and workers while the 13th month pay is

mandated by the law.

If the Christmas bonus was included in the 13th month pay, then

there would be no need for having a specific provision onChristmas bonus in the CBA.

The intention is clear therefore that the bonus provided in the CBA

was meant to be in addition to the legal requirement.

The seven-day bonus here demanded is in addition to the legal

requirement."

RULING


128/259

The Christmas bonus provided in the CBA accords a reward for

loyalty. It is granted to workers with at least one (1) year ofcontinuous service.

As a consequence of the impasse between the parties beginning

1974 through 1979, no CBA was in force during those intervening

years. Hence, there is no basis for the money award granted byNLRC.

However, under the 1972 collective bargaining agreement, [i]f no

agreement and negotiations are continued, all the provisions of

this Agreement shall remain in full force up to the time a newagreement is executed.

RULING


129/259

Main Doctrine: When benefits were not magnanimouslyextended by the company but obtained through bargaining

negotiations, the employer is prohibited from eliminating or

diminishing supplements or other benefits . The CBA shall be

the law between the parties.

Petition was DISMISSED.


130/259


131/259

SAN MIGUEL

VS.INCIONG

February 24, 1981

G.R. No. L-49774

Josefa Maria Castro 2C


132/259

FACTS OF THE CASE

FACTS


133/259

January 3, 1977Cagayan Coca-Cola Free Workers Union, filed

a complaint against San Miguel Corporation(Cagayan Coca-Cola Plant), alleging San Miguels

refusal to include in the computation of 13th-month pay:

sick, vacation or maternity leaves,

premium for work done on rest days and

special holidays pay for regular holidays and night

differentials.

FACTS


134/259

February 15, 1977

An Order was issued by Regional Office

No. X requiring San Miguel "to pay the

difference of whatever earnings and theamount actually received as 13th month pay

excluding overtime premium and emergency

cost of living allowance. "

FACTS


135/259

Petitioner appealed from that Order to theMinister of Labor in whose behalf the Deputy

Minister of Labor Amado G. Inciong issued an Order

(June 7, 1978) affirming the Order of Regional Office

No. X and dismissing San Miguels appeal for lack of

merit.

February 14, 1979

Court issued a Temporary Restraining Orderagainst San Miguel to enforce said Order.

FACTS


136/259

Petitioner refuses to comply withaforesaid order, contending thatPresidential Decree 851 speaks only

of basic salary

as basis for thedetermination of the 13th-month pay.


137/259

ISSUELEGAL

ISSUE


138/259

Whether or not in the computation of the 13th-month pay, the following should be considered:

payments for sick, vacation or maternity leaves premium for work done on rest days and

special holidays

pay for regular holidays and night differentials


139/259

RULINGSUPREME

COURT

RULING


140/259

The provision in dispute is Section 1 ofPresidential Decree 851 and provides:

All employers are hereby required to pay

all their employees receiving a basic salary ofnot more than Pl,000 a month, regardless of

the nature of the employment, a 13th-month

pay not later than December 24 of everyyear.

RULING


141/259

Section 2 of the Rules and Regulations for theimplementation of Presidential Decree 851 provides:

b) Basic salary shall include all remunerations on

earnings paid by an employer to an employee for

services rendered but may not include cost-of-living

allowancesgranted pursuant to Presidential Decree

No. 525 or Letter of Instructions No. 174, profit

sharing payments and all allowances and monetarybenefits which are not considered or integrated as

part of the regular or basic salary of the employee

at the time of the promulgation of the Decree.

RULING


142/259

Under the Rules and Regulations ImplementingPresidential Decree 851, the following compensationsare deemed not part of the basic salary:

a) Cost-of-living allowances granted pursuant toPresidential Decree 525 and Letter of Instructions

No. 174;b) Profit sharing payments;

c) All allowances and monetary benefits whichare not considered or integrated as part of the

regular basic salary of tile employee at the timeof the promulgation of the Decree on December16, 1975.

RULING


143/259

Under a later set of Supplementary Rulesand Regulations Implementing Presidential

Decree 851 issued by the then Labor Secretary

Blas Ople, overtime pay, earnings and otherremunerations are excluded as part of the

basic salary and in the computation of the

13th-month pay.

RULING


144/259

The exclusion of cost-of-living allowances underPresidential Decree 525 and Letter of Instructions

No. 174, and profit sharing payments indicate the

intention to strip basic salary of other payments

which are properly considered as "fringe" benefits.Likewise, the catch-all exclusionary phrase "all

allowances and monetary benefits which are not

considered or integrated as part of the basic salary"

shows also the intention to strip basic salary of any

and all additions which may be in the form of

allowances or "fringe" benefits.

RULING


145/259

Art. 87. overtime work.Work may be performed beyond eight

hours a day provided what the employee is

paid for the overtime work, additionalcompensationequivalent to his regular wage

plus at least twenty-five (25%) percent

thereof.

RULING


146/259

It is clear that overtime pay is an additional

compensationother than and added to the

regular wage or basic salary, for reason of which

such is excluded from the definition of basicsalary under the Supplementary Rules and

Regulations Implementing Presidential Decree

851.

RULING


147/259

Article 93c) work performed on any special holiday

shall be paid an additional compensation of

at least thirty percent (30%) of the regularwage of the employee.

RULING


148/259

It is likewise clear that payment for specialholiday which is at least 30% of the regular

wage is an additional compensation other

than and added to the regular wage or basicsalary.

RULING


149/259

WHEREFORE, the Orders of theDeputy Labor Minister dated June 7, 1978and December 19, 1978 are hereby set

aside and a new one entered as aboveindicated.

The Temporary Restraining Order

issued by this Court on February 14, 1979is made permanent.


150/259Philippine


151/259

pp

Duplicatorsvs.

NLRCG.R. No. 110068

February 15, 1995

Mark Pimentel

FACTS


152/259

Petitioner Corporation,Philippine Duplicators, Inc., is a

company involved in selling duplicatingmachines.

The Company pays its salesmena SMALL FIXED OR GUARANTEED

WAGE. The greater part of the theirwage or salary is composed of the

sales commissions earned on actualsales of duplicating machines sold by

them.

FACTS


153/259

The Labor Arbiter orderedthe Petitioner to pay 13TH

MONTH PAY to private

respondent employees computedon the basis of their FIXED

WAGES PLUS SALES

COMMISSION.

FACTS


154/259

Petitioner Corporation contends that theirsales commission SHOULD NOT be included

in the COMPUTATIONof the 13th month

pay invoking, among others, the case ofBoie-Takeda Chemicals, Inc. vs Hon. Dionisiode la Serna, were the so-called commissions

of medical representatives of Boie-Takeda

Chemicals were NOTincluded in the termBASIC SALARY in computing the 13thmonth pay.

ISSUE


155/259

Whether or not SALES COMMISSIONS

should be included in the computation

of the 13thmonth pay.

RULING


156/259

YES. Their sales commission which are anintegral part of the BASIC SALARY

STRUCTURE of the companys salesmen, arenot considered overtime payments, nor

profit-sharing payments nor any other fringebenefit. Thus, salesmens commissions

comprising a pre-determined percent of theselling price of the goods were properlyincluded in the term BASIC SALARY for

purposes of COMPUTINGthe 13THMONTHPAY.

RULING


157/259

The actual basic salary only comprise at

about 1530 PERCENT of an employees

TOTAL EARNINGS in a year.

Difference


158/259

In the Boie-Takeda case, the salescommissions are considered as

PRODUCTIVITY BONUSES which closely

resemble PROFIT-SHARING PAYMENTSwhich is expressly excluded in the law to be

considered in determining the 13THMONTH

PAY


159/259BOIE-Takeda


160/259

vsDe La Serna

G.R. No. 92174

December 10, 1993

Mark Joenel Pimentel

FACTS


161/259

On May 2, 1989, a ROUTINEINSPECTION was conducted in the

establishment of petitioner Boie-Takeda

Chemicals, Inc. by Labor and DevelopmentOfficer Reynaldo B. Ramos under Inspection

Authority

FACTS


162/259

The finding showed that Boie-Takedahad not been including the COMMISSIONS

earned by its medical representatives in the

computation of their 13TH MONTH PAY

FACTS


163/259

Ramos then gave the Notice ofInspection Results to Mr. Benito Araneta,

the company president. It required Boie-

Takeda within ten (10) calendar days from

notice to CORRECT the UNDERPAYMENT of

13th month pay for the year(s) 1986, 1987

and 1988 of Med Reps

FACTS


164/259

Boie-Takeda wrote a letter the LaborDepartment opposing the Notice of

Inspection Results. It expressed that the

commission paid to their medical

representatives SHOULD NOT be included in

the computation of the 13th month pay

since the law and its implementing rules

speak of REGULAR or BASIC salary andtherefore exclude all other remunerations

which are not part of the REGULAR salary.

FACTS


165/259

The companys view is grounded onthe premise that if NOSALESare made by a

particular representative, there is NO

COMMISSION during the period, so that

commissions are not and cannot be legally

defined as REGULAR in nature.

FACTS


166/259

On July 24, 1989, Director Piezasissued an Order directing Boie-Takeda to pay

their medical representatives and its

managers the total amount of P565,746.47

representing underpayment of 13th month

pay for the years 1986, 1987, 1988.

FACTS


167/259

On August 3, 1989, Boie-Takeda filed amotion for reconsideration.

On January 17, 1990, Acting Labor

Secretary Dionisio de la Serna AFFIRMEDthe order with modification that the sales

commissions earned by the medical

representatives shall be excluded in the

computation of their 13th month pay.

ISSUE


168/259

Whether or not COMMISSIONS should

be included in the computation of 13-

MONTHPAY

RULING


169/259

NO. The context of the law providesthat "all allowances and monetary benefits

which are not considered or integrated as

part of the basic salary shows the laws

intention to RID the basic salary of any

additions which may be in the form of

allowances or "fringe" benefits.

RULING


170/259

The fixed or guaranteed wage is the"basic salary" for this is what the employee

receives for a standard work period.

COMMISSIONS are given for extra efforts

being done to make sales. They are

considered ADDITIONAL PAY, which DO NOT

form part of the BASIC SALARY.


171/259

PACIWU vs NLRC


172/259

Joseph John Michael Sale

PACIWU vs NLRC247 SCRA 256

PHILIPPINE AGRICULTURAL COMMERCIAL AND INDUSTRIALWORKERS UNION (PACIWU)-TUCP, petitioner,

vs.

NATIONAL LABOR RELATIONS COMMISSION AND VALLACARTRANSIT, INC., respondents.

FACTS


173/259

PETITIONER:

Petitioner union complaint for payment of13th month pay to the drivers andconductors of respondent company.

Drivers and conductors are compensated ona purely commission basis as described intheir CBA, they are automatically entitled tothe basic minimum pay mandated by lawshould said commission be less than their

basic minimum for eight (8) hours work.

FACTS


174/259

RESPONDENT:

Vallacar Transit, Inc. contended that since said drivers arecompensated on a purely commission basis, they are notentitled to 13thmonth pay.

Pursuant to the exempting provisions enumerated in

paragraph 2 of the Revised Guidelines on theImplementation of the 13thMonth Pay Law.

Section 2 of Article XIV of the CBA expressly provides

that drivers and conductors paid on a purely

commission are notlegally entitled to 13thmonth pay.

ISSUE


175/259

Whether or not the bus drivers andconductors of respondent Vallacar Transit, Inc.

are entitled to 13th

month pay.

RULING


176/259

It is immaterial whether the employeesconcerned are paid a guaranteed wageplus commission or a commission withguaranteed wage inasmuch as thebottom line is that they receive a

guaranteed wage. Thus is correctly construed in the MOLEExplanatory Bulletin No. 86-12.

The 13th month pay of bus drivers andconductors must be one-twelfth (1/12) of

their total earnings during the calendaryear.


177/259

MAKATI HABERDASHERY, INC., JORGE LEDESMA and

CECILIO G. INOCENCIO, petitioners,


178/259

, p ,vs.

NATIONAL LABOR RELATIONS COMMISSION,CEFERINA J. DIOSANA (Labor Arbiter, Department of

Labor and Employment, National Capital Region),SANDIGAN NG MANGGAGAWANG PILIPINO

(SANDIGAN)-TUCP and its members, JACINTOGARCIANO, ALFREDO C. BASCO, VICTORIO Y.

LAURETO, ESTER NARVAEZ, EUGENIO L. ROBLES,BELEN N. VISTA, ALEJANDRO A. ESTRABO, VEVENCIO

TIRO, CASIMIRO ZAPATA, GLORIA ESTRABO,LEONORA MENDOZA, MACARIA G. DIMPAS, MERILYN

A. VIRAY, LILY OPINA, JANET SANGDANG, JOSEFINAALCOCEBA and MARIA ANGELES, respondents.

Kristine Mae Francisco-Sibonga

FACTS


179/259

Individual complainants are working forMakati Haberdashery, Inc. as tailors,seamstress, sewers, basters, andplantsadoras and are paid on a piece-rate basis (except two petitioners who are

paid on a monthly basis)

They are given a daily allowance of P3.00if they report before 9:30 a.m.everyday.

Work schedule: 9:30-6:00 or 7 p.m.,Monday to Saturday and during peakperiods even on Sundays and Holidays.

FACTS


180/259

The Sandigan ng Manggagawang Pilipino filed a complaintfor underpayment of the basic wages, underpayment of

living allowance, nonpayment of overtime work,

nonpayment of holiday pay, nonpayment of service

incentive pay, 13thmonth pay and benefits provided for

under Wage Orders Nos. 1, 2, 3, 4 and 5.

During the pendency, Haberdashery dismissed Pelobello

and Zapata for the alleged job acceptance from another.

The Labor Arbiter rendered judgment in favor of

complainants which the NLRC affirmed limited the

backwages awarded to Dioscoro Pelobello and Casimiro

Zapata to only one (1) year.

ISSUES


181/259

(1) WON EMPLOYER-EMPLOYEE RELATIONSHIPEXISTS BETWEEN HABERDASHERY, INC.

AND RESPONDENT WORKERS?

(2) WON RESPONDENT WORKERS ARE

ENTITLED TO MONETARY CLAIMS DESPITETHE FINDING THAT THEY ARE NOT

ENTITLED TO MINIMUM WAGE?

(3) WON PELOBELLO AND ZAPATA WEREILLEGALLY DISMISSED?

RULING


182/259

1. There is employer-employeerelationship. The most important requisite

of control is present. Haberdashery directs

their employees to take the customer's

measurements, and to sew the pants, coator shirt as specified by the customer.

Supervision is actively manifested in all

these aspects the manner and quality

of cutting, sewing and ironing.

RULING


183/259

2. The workers were regularemployees, thus entitled to minimumwages. The respondents didn'tappealed when the Labor Arbitergranted the minimum wage award to

the workers. But workers are notentitled to incentive pay and otherbenefits because piece-rate workersare paid at fixed amount for performing

work irrespective of the timeconsumed.

RULING


184/259

3. There was no illegal dismissal tothe two workers accused of the copiedBarong Tagalog design, because whenthey were asked to explain to their

employer, the workers did not butinstead go AWOL. Imposingdisciplinary sanctions upon anemployee for just and valid cause is

within the rights of the employer.


185/259

Labor Congress


186/259

of the Philippinesvs

NLRCGR No. 83380-81

November 15, 1989

Kristine Mae Francisco-Sibonga

FACTS


187/259

The 99 persons named as petitioners filedagainst Empire Food Products a complaintfor payment of money claims and forviolation of labor standards laws.

On October 24, 1990, the Mediator Arbiterapproved the memorandum whichrecognizes the status of LCP as bargainingagent and representative, that all partiesagreed to resolve the issues during thecollective bargaining agreement, and therewill be proper adjustment of wages,

withdrawal of case from the calendar ofNLRC, non-interference or any ULP act.

FACTS


188/259

On November 1990, LCP PresidentNavarro submitted to Empire aproposal for collective bargaining.

On January 1991, the privatepetitioners filed a complaint for ULP,Union-Busting, Violation of theOctober 23 1990 memorandum,underpayment of wages that later onthe Labor Arbiter absolved but denied

actual, moral and exemplary damages.

FACTS


189/259

The Labor Arbiter directed reinstatementof complainants, due to the fact thatEmpire did not keep its payroll records asper requirement of the DOLE.

On appeal, the NLRC remanded the caseto Labor Arbiter for further proceedingsfor the reason that the Labor Arbiter musthave overlooked the testimonies of someof the individual complainants which are

now on record.

FACTS

In a Decision dated July 27, 1994, Labor Arbiter Santos


190/259

y , ,made the following determination: Complainantsfailed to present with definiteness and clarity theparticular act or acts constitutive of unfair laborpractice.

declaration of unfair labor practice connotes a findingof prima facie evidence of probability that a criminal

offense may have been committed so as to warrantthe filing of a criminal information before the regularcourt.

As regards the issue of harassments [sic], threats andinterference with the rights of employees to self-organization which is actually an ingredient of unfair

labor practice, complainants failed to specify whattype of threats or intimidation was committed andwho committed the same.

NLRC affirmed Labor Arbiters decision.

ISSUES


191/259

WON the petitioners are entitled to Laborstandards benefits, considering their status as

piece rate workers.

WON the actions of the Petitionersconstituted abandonment of work.

RULING


192/259

1. Petitioners are entitled to laborstandards benefits, considering

their status as piece rate workers

including benefits such as holiday

pay, premium pay, 13thmonth pay

and service incentive leave. The

petitioners nature of tasks was

necessary and desirable in theusual business of Empire Foods.

RULING


193/259

1. Failure to appear to work did notconstitute abandonment of work. The SCcited the Office of the Solicitor GeneralsObservation was failure to work for one daywhich resulted to spoilage of cheese curls

does not amount to abandonment of workand two days after the reportedabandonment of work, petitioners filed acomplaint for, among others, ULP, illegallock-out and illegal dismissal. Futhermore,

the burden of proving the existence of justcause for dismissing an employee rests onthe employer.


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Honda

vs


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Samahan ngMalayang

Manggagawa ngHondaG.R. 145561

Kazper Vic Bermejo

FACTS

The case rises from CBA between Honda


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The case rises from CBA between Honda

and respondent employee about thecomputation of 14thmonth pay as thesame as 13thmonth pay. This practicehas been for a long period of time.

In 1998, the parties renegotiate for the

fourth and fifth year of CBA. Then, theunion filed notice of strike fordeadlock.

DOLE assumed jurisdiction and referred itto NLRC for compulsory arbitration.

The union members ordered to workand management to accept them back.

FACTS


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Honda issued a new memorandum ofthe new computation for 13thand 14thmonth pay whereby the 31-day strike shallbe considered unworked days for thepurpose of computing. That means that

of the employees basic salary shall bededucted from benefits, however, Hondapromised that if the strike is consideredlegal, it shall pay the amount.

The respondent union opposed thecomputation. Thus, this petition.

ISSUE


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Whether or not the new

computation of 13thand 14thmonth pay

is valid and lawful?

RULING


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The new computation is invalid. Thenew computation is not consideredas company practice because it isthe first time Honda applied the said

computation.The old computation is the established

practice. The voluntary act of Honda

cannot be unilaterally withdrawnwithout violating Article 100 of LC.

RULING


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Therefore, the withdrawal of

the benefit of paying a full

month salary for 13th

month payis violation of Article 100 of LC.


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JPL MarketingVS

Court of Appeals

Jed Adrian S. Jarabelo

JPL i d ti ti

FACTS


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JPL is a domestic corporationengaged in the business of recruitmentand placement of workers, while privaterespondents Noel Gonzales, RamonAbesa III and Faustino Aninipot were

employed by JPL as merchandisers onseparate dates and assigned at differentestablishments in Naga City and Daet,Camarines Norte as attendants to the

display of California MarketingCorporation (CMC), one of JPL clients.

FACTS


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On August 13, 1996, JPL notifiedprivate respondents that CMCwould stop its direct merchandisingactivity in the Bicol Region, Isabela,

and Cagayan Valley effective 15August 1996.

They were advised to wait forfurther notice as they would betransferred to other clients.

FACTS


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However, on 17 October 1996, privaterespondents Abesa and Gonzales filed beforethe NLRC complaints for illegal dismissal,praying for separation pay, 13th month pay,service incentive leave pay and payment for

moral damages. Aninipot filed a similar casethereafter.

Labor Arbiter Rivera dismissed complaints

for lack of merit.

FACTS

The Labor Arbiter said that Gonzales


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The Labor Arbiter said that Gonzales

and Abesa applied with anotherstore before the 6month periodgiven by law to JPL to provideprivate respondents a newassignment. Thus, they may beconsidered to have unilaterallysevered their relation with JPL, andcannot charge JPL with illegaldismissal.

FACTS

He f rther said that it as their


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He further said that it was theirOBLIGATION TO WAIT until they werereassigned by JPL, and if after sixmonths they were not reassigned,they can file an action for separation

pay but not for illegal dismissal. Theclaims for 13th month pay and serviceincentive leave pay was also DENIEDsince private respondents were paid

way above the applicable minimumwage during their employment.

FACTS

NLRC affirmed but ordered


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Separation pay, based on their lastsalary rate and counted from thefirst day of their employment withthe respondent JPL up to the

finality of this judgment; ServiceIncentive Leave pay, and 13thmonth pay, computed as in No.1

hereof.

Court of Appeal also affirmed bothrulings.

WHETHER or NOT

ISSUE


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WHETHER or NOTprivaterespondents are entitled to

separation pay, 13th month pay andservice incentive leave pay

What should be the reckoning pointfor computing said awards. From thetime the employees severed theirties with JPL from the time the

employees severed their ties withJPL

RULING

YES The employee is granted


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YES. The employee is grantedseparation pay:Under Arts. 283 and 284 of the LaborCode, separation pay is authorized onlyin cases of dismissals due to any of these

reasons: (a) installation of labor savingdevices; (b) redundancy; (c)retrenchment; (d) cessation of theemployer's business; and (e) when theemployee is suffering from a disease and

his continued employment is prohibitedby law or is prejudicial to his health andto the health of his co-employees.

Also in Under Sec. 4(b), Rule I, Book

RULING


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VI of the Implementing Rules toImplement the Labor Code thatprovides for the payment ofseparation pay to an employee

entitled to reinstatement but theestablishment where he is to bereinstated has closed or has ceasedoperations or his present position nolonger exists at the time ofreinstatement for reasons notattributable to the employer.

RULING


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The common denominatorof theinstances where payment of separationpay is warranted is that the employee

was dismissed by the employer. In the

case, there was no dismissal to speakof. Private respondents were simply notdismissed at all, whether legally or

illegally.

RULING


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What they received from JPL wasnot a notice of termination of

employment, but a memo

informing them of the terminationof CMCs contract with JPL.Moreimportantly, they were advised that

they were to be reassigned. At thattime, there was no severance ofemployment to speak of.


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215/259

G. R No. 154419

October 20, 2005

On February 23, 1999, petitionerHeavylift, a maritime agency thru aletter signed by the Administrativeand Finance Manager of Heavylift,Josephine Evangelio informed Ma.Dottie Galay, Heavylift Insurance and


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Facts:

Dottie Galay, Heavylift Insurance and

Provisions Assistant, of her lowperformance rating and the negativefeedback from her team membersbecause of her work attitude.

The letter notified her that she wasbeing relieved from her functionsexcept on the development of the NewAccess Program.

On August 16, 1999, Galay wasterminated allegedly for loss ofconfidence. In return, the latter before

the Labor Arbiter a complaint forillegal dismissal and nonpayment ofservice incentive leave and 13thmonthpay against petitioners.

Petitioners alleged thatbecause Galay did notget along well with herco-employees, it resultedto the decline of the


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to the decline of thecompanysefficiency andproductivity. Thepresented the letters andnotice of termination

dated February 23, 1999and August 16, 1999respectively.

The Labor Arbiter, NLRCand The Court of Appealsdismissed the case.

Issu

e:


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1. W/N Is attitude problem a valid

ground for termination of anemployee

2. W/N respondent herein should bepaid service incentive and 13th

month pay

Ruling:


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1st Issue: No. Petitioners have not shownsufficient clear and convincing evidence to justifyGalays termination for there must be substantialevidence to support the termination on the ground

of attitude for the burden of proof is not on theemployee but on the employer. Galays failure torefute the petitioners allegation does not meanadmission.

The letter also does not constitute the twin

requirement of notice and hearing. Galay was notgiven a chance to explain herself from theallegations hence, denying her right to dueprocess.


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2nd Issue: Yes. Petitioners failed to presentevidence that the benefits were already paid.Moreover, petition for certiorari does not deal

with determination of question of fact hencethe findings of the Labor Arbiter and the NLRCshould be accorded with great weight andrespect.


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222/259

vs.Richard Troy A. Colmenares

What?

15 October 1990


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WO No. NCR-01

Min Wage += P17/day 2 MRs. ECOP opposed

WO No. NCR-01-A

23 October 1990

Across the board increase to all private workersearning at most P125 per day

Appeal, MR,Certiorari

6 November 1990 appeal dismissed.

MR denied.

Certiorari elevated to SC.

Contentions?


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1. Workers are already paid

more than the minimum wage.

1. The Board did not grant

additional or other benefits.

Rather, fix minimum wages

according to salary ceiling

method.

2. Under RA 6727 (Wage

Rationalization Act), prescribe

only minimum wages and not

salary ceilings. This is a job for

Congress.

2. RA 6727 is intended to

correct wage distortion

3. CBA is the primary mode of

settling wages so that the

NWPC can not pre-empt by

establishing ceilings

3. Salary ceiling is the

increasing trend which has

reduced disputes arising from

wage distortion.

MAIN ISSUE?


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Is the wage level (salary ceiling)determined by the Board and reviewed by

NWPC a valid exercise of delegated rule

making power?

Yes!

RA 6727 intention

Ruling:


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To rationalize wages by Policing wages round-the-clock

Giving Board enough powers to achieve this

Boards to be creative in resolving this annual question

As such, the Board can, pursuant to a validdelegated legislative power

Set, NOT ONLY floor wages BUT ALSO salary ceilings

Within the acceptable standards in Art 124.

The standards are proof to sufficiency standard test that

would validate the act of the Board

Congress is not expected to do this year after year.

There would have been no need for the Board if ECOPs view is

Ruling: (cont)

It is not for labor and management to decide wages.


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g g

To do so would be to accommodate laissez fair (i.e.leave market forces to govern the economy), which isunconstitutional.

The Constitution meant for Government to regulateproperty rights.

RA 6727 seeks the common good by regulatingproperty and property relations. This is left for expertsto do so.

The LC provides that the State shall regulate the

relations between labor and management Therefore, RA 6727cannot be given intention in

conflict with the Constitution.

Petition denied.


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BANKARD


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EMPLOYEES VS.NLRC

BANKARD EMPLOYEES UNION-WORKERS ALLIANCE

TRADE UNIONS,petitioner, vs. NATIONAL LABORRELATIONS COMMISSION and BANKARD,

INC., respondents

Joseph John Michael B. Sale

FACTS


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Bankard, Inc. classifies itsemployees by levels: Level I, Level

II, Level III, Level IV, and Level V.

On May 28, 1993, its Board of

Directors approved a NewSalary

Scale,

Documents

LLB 2C Labor Wages Cases