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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
FACTS
Petitioner Rosario A. Gaa was the building
administrator of Trinity Building at T.M.
Kalaw Street, Manila.
Respondent Europhil Industries Corporation
was one of the tenants.
On December 12, 1973, Europhil
Industries filed a case against Gaa in CFI
Manila for damages "for perpetrating acts
that Europhil Industries considered a
trespass on its rights, namely, cutting of its
electricity, and removing its name from the
building directory and gate passes of its
officials and employees"
Europhil won. CFI ordered Gaa to pay the
sum of P10,000.00 as actual damages,
P5,000.00 as moral damages, P5,000.00 as
exemplary damages and to pay the costs of
the suit.
Decision became final and executory, a writ
of garnishment was served by Deputy Sheriff
Cesar A. Roxas upon El Grande Hotel where
Gaa was employed, garnishing her "salary,
commission and/or remuneration."
Gaa filed a motion to lift said garnishment
on the ground that remuneration are
exempted from execution under Article 1708
of the New Civil Code.
FACTS
ART. 1708. The laborer's wage
shall not be subject to execution or
attachment, except for debts
incurred for food, shelter, clothing
and medical attendance.
Motion was denied by RTC. Motion
for reconsideration also denied. Gaa
filed with the Court of Appeals a
petition for certiorari which was also
dismissed and case was elevated to
the supreme court.

FACTS

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
No, Gaas salary is not exempted from
executuion or garnishment.
Gaa is not an ordinary or rank and file
laborer but an employee occupying a
position equivalent to that of a
managerial or supervisory position.
The Court has held that a "laborer," is
one whose work depends on physical
power to perform ordinary manual labor,
and not one engaged in work requiring
mental skill or business capacity, involving
the exercise of intellectual faculties.
RULING
Article 1708 used the word "wages" and not "salary" in
relation to "laborer for "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 superior
grade of services, and implies a position of office.
The term wages indicates considerable pay for a lower
and less responsible character of employment, while
"salary" is suggestive of a larger and more important
service.
Art.1708 is for laboring men or women whose work is
manual.
RULING
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
FACTS
Respondent F.E. Zuellig (M), Inc., filed with
the Department of Labor an application
seeking clearance to terminate the services
of Petitioners Jose Songco, Romeo Cipres,
and Amancio Manuel on the ground of
retrenchment due to financial losses.
Petitioners opposed at the beginning but
later on manifested that they are no longer
contesting their dismissal.
Parties agreed that the sole issue to be
resolved is the basis of the separation pay
due to petitioners.
Petitioners were salesmen who received monthly salaries
of at least P400.00 and commission for every sale they
made.
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 Arbiter ordered Zuelig to pay petitioners separation
pay equivalent to their one month salary (exclusive of
commissions, allowances, etc.) for every year of service
with the company.
Petitioners appealed to the NLRC but was dismissed. Case
was elevated to the Supreme Court.
FACTS
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
Yes. Article 97 of the Labor Code includes
commission as part on one's salary, to wit;
'Wage' paid to any employee shall mean the
remuneration or earnings, however
designated, capable of being expressed in
terms of money, whether fixed or ascertained
on a time, task, piece, or commission basis.
In Santos v. NLRC, SC ruled that "in the
computation of backwages and separation
pay, account must be taken not only of the
basic salary of petitioner but also of her
transportation and emergency living
allowances."
RULING
RULING
Article 97 is explicit that commission is included in the
definition 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 and
allowances or commissions alone, although an employer-
employee relationships exists.
Article 4 of the Labor Code states, that "all doubts in the
implementation and interpretation of the provisions of the
Labor Code including its implementing rules and regulations
shall be resolved in favor of labor"
Ruga vs. NLRC
(G.R. No. 72654-61)
Riza Toledo
FACTS
Alipio Ruga, et al. worked as
fishermen-crew members for a
fishing vessel operated and
owned by De Guzman Fishing
Enterprises.
They were employed in
various capacities and offered
services in the conduct of De
Guzmans trawl fishing business.
How were they paid?
As agreed, Mrs. Pilar De Guzman,
cashier for the company, paid the
petitioners in cash, on commission
basis, wherein they received 13% of
the proceeds of the total sale of the
fish-catch if the amount exceeded the
cost of crude oil during the duration
of the fishing trip;
Otherwise, they got only 10% of
the sale proceeds.
On September 11, 1983,
after they arrived at the
fishing port, Jorge De
Guzman, president of the
fishing company, told the
petitioners that they are
to proceed at the
Camaligan Police Station
on the allegation that they
sold some of their catch at
mid-sea.
Petitioners denied the charge
and claimed that it was just a
countermove to their having
formed a labor union and
subsequently becoming
members thereof.

In the course of the
investigation, the charge was not
proved and no criminal charges
were filed. However, the
petitioners were not allowed to
return to work on that same day.
Individually, petitioners
filed complaints for illegal
dismissal and non-payment
of 13
th
month pay, ECOLA
and SIL.
The fishing company, in
the position paper they
submitted, denied the
existence of an employer-
employee relationship
between the parties,
positing that they were
engaged in a joint fishing
venture.
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 no
employer-employee relationship existed but a
joint fishing venture.
NLRC affirmed the same.

Petitioners stand
An employer-employee relationship exists.
They were directly hired by the general manager
and operations manager of the company.
They have been employed for an average of 8 to
15 years in different capacities.
The conduct of their operations and their fishing
trips were controlled by the companys operations
manager.
They were not allowed to join other outfits
without the operation managers permission.

They were compensated
on percentage commission
basis based on the sales of
the fish-catch.
They had to follow policies,
rules and regulations which
were imposed by the
fishing company.
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.
Ruling of the Supreme
Court
The doctrine in the Pajarillo case does not apply.
A joint fishing venture does not exist in the case at
bar because the fishing company exercises CONTROL
over the crew-members, fixing the schedule for their
fishing trip and directing their time of return to the
fishing port.

Application of four-fold test:
The petitioners were directly hired by the general
manager and operations manager for the fishing
company.
Their employment is necessary or desirable in the
trade or business of the company for a period of
8-15 years.
This qualifies them as regular employees under Art.
281 of the Labor Code.
The petitioners received compensation on a
percentage commission basis which falls within
the 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 by
undue haste, making it illegal.
Additionally, the incident contradicts the
companys theory that there is a joint
fishing venture that existed.

As such, the order of the NLRC is
reversed and set aside. The fishing
company is ordered to reinstate the
petitioners to their former positions or
any equivalent positions with 3-year
backwages and other monetary
benefits.
ATOK BIG WEDGE MUTUAL BENEFIT
ASOCIATION
(PETITIONER)
versus
ATOK BIG WEDGE MINING COMPANY,
INCORPORATED (RESPONDENTS)

Mark Vincent Baculna

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.
The Union demanded 0.50 wage
increase among other demands
Conflict on the demands placed under
conciliatory 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
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.

The
Minimum
Wage Law
Increased
Taxes, High
Cost of
Materials
Quantity of
Ore
Deposits
The Agreement
Due to possible bankruptcy, the Court opted
to convene the parties for voluntary
conciliation and mediation.

An agreement between the two parties was
reached.

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

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.

The Agreed Values Totals: 1.80
Rice is at 0.55 per day
Housing Facilities is at 0.40
per day
All other Facilities is at 0.85
per day
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 well
as payment of differentials.

The Union prayed for the payment of a
minimum cash wage of 3.45 with Rice Ration
or 4.00 without Rice Ration.
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 the
Minimum wage law with respect to the
minimum cash wage payable.
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 minimum
wage law and the Courts Decision. That such
agreement indicates that both parties
intended to be regulated by the agreement.
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


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 the
minimum 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 does
include the total wage including the cost of facilities?
Wage and Supplement Defined
On the First Issue
The agreement is not merely provisional

Basis: The agreement was made retroactive
which indicates that the agreement is binding
before and after and not merely for the period
of appeal. The Court recognizes the merit in
the respondents assertion that such
agreement is a compromise that is fair to all
parties.
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 as
long as they are of fair and reasonable value
as determined by the Secretary of Labor. Both
parties implicitly by virtue of the agreement
agreed that the amounts deducted are of fair
and reasonable value.
On Third Issue
Supplements, therefore, constitute extra remuneration or special
privileges or given to or received by the laborers over and above
their ordinary earnings or wages.
Facilities, on the other hand, are items of expense necessary for the
laborers and hid familys existence and subsistence, so that by
express provision of the law (sec. 2 [g]) they form part of the wage
and when furnished by the employer are deductible there from since
if they are not so furnished, the laborer would spend and pay for
them just the same.
There is no underpayment:

Under the Minimum Wage Law, this minimum
additional compensation is P 1.00 a day which is
25 % of P 4.00. While the respondent company
computes the additional compensation given to
its laborers for works on Sundays and holidays on
the cash portion of their wages of P 2.20, it is
giving them 50 per cent thereof, or P 1.10 a day.
Considering that the minimum overtime
compensation fixed by law is P1, the
compensation being paid by the respondent
company to its laborers is even higher than such
minimum legal additional compensations.
STATES MARINE CORPORATION
and ROYAL LINE, INC.,
vs.
CEBU SEAMEN'S ASSOCIATION,
INC.,
Robert Ian Maranon
LLB 2C

G.R. No. L-12444
February 28, 1963
Labor Standards
FACTS

The Union (CEBU SEAMEN'S
ASSOCIATION, INC.) alleged that
the 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 had
taken 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 to
pay their meals.

LABOR STANDARDS - WAGES
LLB 2C
Robert Ian Maranon
FACTS

Because Captain Carlos Asensi had
refused to yield to the general
reduction of salaries, the
petitioners dismissed said captain
who now claims for reinstatement
and the payment of back wages
from December 25, 1952, at the
rate of P540.00, monthly.
The petitioners' shipping
companies, 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.

LABOR STANDARDS - WAGES
LLB 2C
Robert Ian Maranon
FACTS

It was the defense of the
employers-petitioners that in
enacting Rep. Act No. 602
(Minimum Wage Law), the
Congress had in mind that the
amount of P.40 per meal, furnished
the employees, should be deducted
from the daily wages.
A decision was rendered on
February 21, 1957 in favor of the
respondent union.

The motion for reconsideration
thereof, having been denied, the
companies filed the present writ of
certiorari, to resolve legal question
involved.

LABOR STANDARDS - WAGES
LLB 2C
Robert Ian Maranon
ISSUES

1) WON there is a conflict between
Section 3, par. F and SEC. 19 of the
Minimum Wage Law, (R.A. No. 602).
2) WON the CIR erred in declaring
that 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 of
said section 3, par. (f) of Act No.
602.

LABOR STANDARDS - WAGES
LLB 2C
Robert Ian Maranon
RULING

1) Section 3, par. f, of the Minimum
Wage 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 and
reasonable 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 housing
shall 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 the
above 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 forty
centavos 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.

LABOR STANDARDS - WAGES
LLB 2C
Robert Ian Maranon
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 established
under 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 the
meaning 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.

LABOR STANDARDS - WAGES
LLB 2C
Robert Ian Maranon
RULING

2) The benefit or privilege given to the
employee 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 with
the kind of the benefit or item
(food, lodging, bonus or sick leave)
given, but its purpose.
Considering that the meals were
freely given to crew members prior
to August 4, 1951, while they were
on the high seas "not as part of
their wages but as a necessary
matter in the maintenance of the
health and efficiency of the crew
personnel during the voyage", the
deductions 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
MABEZA VS. NLRC
271 SCRA 670
(Labor Law/Labor Standards:
Abandonment of Work & Loss of
Confidence)
Omel Pasquin
FACTS
1. Norma Mabeza was an employee hired by Hotel
Supreme in Baguio City. In 1991, an inspection was made
by the Department of Labor and Employment (DOLE) at
Hotel Supreme and the DOLE inspectors discovered several
violations by the hotel management. Immediately, the
owner of the hotel, Peter Ng, directed his employees to
execute an affidavit which would purport that they have
no complaints whatsoever against Hotel Supreme. Mabeza
signed the affidavit but she refused to certify it with the
prosecutors 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 Mabeza
abandoned her work.
FACTS
Petitioner Rosario A. Gaa was the building
administrator of Trinity Building at T.M.
Kalaw Street, Manila.
Respondent Europhil Industries Corporation
was one of the tenants.
On December 12, 1973, Europhil
Industries filed a case against Gaa in CFI
Manila for damages "for perpetrating acts
that Europhil Industries considered a
trespass on its rights, namely, cutting of its
electricity, and removing its name from the
building directory and gate passes of its
officials and employees"
1. Whether or not there is abandonment in the case at bar.

2. Whether or not loss of confidence as ground for dismissal
applies in the case at bar.
FACTS
NO.

The side of Peter Ng is bereft of merit so is the decision of the
Labor Arbiter which was unfortunately affirmed by the
NLRC.
SC RULING
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 a
leave but was not granted. Her asking for leave is a clear
indication that she has no intention to abandon her work
with the hotel. Even the employer knows that his purported
reason of dismissing her due to abandonment will not fly so
he amended his reply to indicate that it is actually loss of
confidence that led to Mabezas dismissal.
SC RULING
SC RULING
LOSS OF CONFIDENCE:
It is true that loss of confidence is a valid ground to dismiss an employee. But
ideally, this only applies to workers whose positions require a certain level or
degree of trust particularly those who are members of the managerial staff.

Evidently, an ordinary chambermaid who has to sign out for linen and other
hotel property from the property custodian each day and who has to account
for each and every towel or bedsheet utilized by the hotels guests at the end
of her shift would not fall under any of these two classes of employees for
which loss of confidence, if ably supported by evidence, would normally
apply. Further, the suspicious filing by Peter Ng of a criminal case against
Mabeza long after she initiated her labor complaint against him hardly
warrants serious consideration of loss of confidence as a ground of Mabezas
dismissal.
Mark Vincent Baculna
UNDERSTANDING THE CASE
This is a consolidated case, the
facts for each case shall be
presented individually but the
issues shall be discussed
collectively.

Filed by CIT Employees against the school
for non payment of COLA, 13
th
month
differentials and Service Incentive Leave.
Cebu Institute of
Technology vs Hon. Blas
Ople, Minister of Labor
and Employment, Et. Al.
Filed by ten faculty members for alleged
non compliance with P.D. 451, which
charges allowances to 60% of the proceeds
from tuition fee increases.
Divine Word College of
Legaspi vs Hon. Vicente
Leogardo Jr. , Deputy
Minister of Labor and
Employment, Et. Al.
Filed by the Union against FEU for alleged
non payment of legal holiday pay and
underpayment of thirteenth (13
th
) month
pay as well as non compliance with P.D. 451
FEU Employees Labor
Union vs FEU and the
NLRC
This is a class suit brought by petitioner in behalf of
faculty members and employees of private schools
nationwide. Petition seeks to have par. 7 and 7.5 of
MECS order no. 5 (1985) declared as
unconstitutional for being in conflict with P.D. 451.
Gregorio T. Fabros Et. Al. vs
Hon. 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. The
resulting CBA is being challenged by petitioners for
Being in violation of P.D. 451
Jasmin Biscocho Et. Al. vs
Hon. Augusto Sanchez,
Minister of Labor and
Employment and Espiritu
Santo Parochial School
Faculty Association
Petitioners are parents of the children studying in
the school who oppose the tuition fee increases
which was the result of the CBA agreement in the
Biscocho Case.
Ricardo C. Valmonte and
Corazon Badiol vs Hon.
Augusto Sanchez, Espiritu
Santo Parochial School and
Espiritu Santo Parochial
School Faculty Association.
Common Issues
Whether or not allowances and other fringe
benefits for employees are chargeable
against the 60% portion of the incremental
proceeds provided for sec 3. (a) of P.D. 451.
Whether or Not such allowances and fringe
benefits 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, may
allot more than the 60% provided for by the
law.
On the First Issue
Argues that the COLA is included on the Salary Increase it gave to
employees.
The solicitor General stated that if under the effectivity of P.D. 451
the 60% would only cover wage, if under B.P. 232 it should cover
wages 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 wage
increases are not chargeable to the 60% portion, in line with the
Ruling in the Pangasinan Univ and U.E. cases.
Referred to Art. 97(f) of labor Code which defined wages.
FEU
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 be
construed to include allowances since these
are above and over the basic salaries.
Rules promulgated by the MECS incompatible
with the ruling is struck down.
On the Second Issue Fabros Case
Argues that B.P. 232 did not repeal P.D. 451 as
there 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 stating
that P.D. 451 has been repealed by B.P. 232
because of conflict in effect. There is therefore
repeal by implication.

Ruling on the Second Issue
The Court hold that there is a repeal. This is
because there are effects of the two laws which
are incompatible. Under P.D. 451, the tuition fee
increases is chargeable for wages only while on
B.P. 232, both wages and other benefits are
chargeable. Under P.D. 451, the power o
apportion the proceeds is reserved with the
president, whereas, under B.P. 232 such power is
with the MECS. The assailed MECS proclamation
is valid under B.P. 232.
On the Third Issue
In the Valmonte and Biscocho cases, petitioners argue
for the nullification of the MECS order on two differing
grounds.
In the Biscocho Case, petitioners argue that of the
90% 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 Labor
Minister may not order an increase above the 60%
threshold as such power to determine allotment of
tuition fee increases falls within the purview of the
MECS.
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, which
means that employees may agree to a larger
portion.
Specific Issues
CIT Case Administrative Agencies are not
strictly bound by rules of procedure.
Incentive leave benefits : teaching personnel are
not deemed field personnel and are thus entitled
to service leave benefits.
Divine Word College Case Labor Standards
arising from violations of labor standard laws
are under the exclusive and original
jurisdiction of the Regional Director.
Specific Cases
FEU Case Transportation allowance is a form
of bonus which is equivalent to the 13
th

month pay. However, in cases where it is less
than 1/12 of the basic salary, the employer
shall pay the difference.
GENE DEE E. TAEDO
ISAE
vs
Quisumbing
G.R. No. 128845
June 1, 2000
THE PETITIONER
INTERNATIONAL SCHOOL
ALLIANCE OF EDUCATORS
International School Inc. is a
domestic educational
institution for dependents of
foreign diplomatic personnel
and other temporary
residents.
THE RESPONDENTS
HON. LEONARDO A. QUISUMBING
in his capacity as the Secretary of Labor
and 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. for
dependents of foreign diplomatic
personnel and other temporary residents.
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, except
laws that have been or will be enacted for the
protection of employees.

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
The School justifies the difference on two
significant economic disadvantages that foreign
hires have to endure, to wit: (a) the dislocation
factors and (b) limited time tenure.
Petitioner claims that the classification employed
by the School is a form of racial discrimination.

FACTS OF THE CASE
When the Collective Bargaining Agreement
negotiation reached a deadlock, the Secretary of
Labor assumed jurisdiction. The Acting Secretary
upheld the point-of-hire classification. He claimed
that the principle equal pay for equal work does
not find application in the present case.

ISSUE
Whether or not the Schools system
of compensation is violative of the
principle of equal pay for equal
work

COURTS DECISION
Yes. If an employer accords employees the same
position 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
The dislocation factor and the foreign hires
limited 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
It is the States right and duty to regulate the
relations 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
We rule that the point of hire classification is an
invalid classification. There is no reasonable
distinction between the services rendered by the
foreign hires and the local hires.
Cebu Autobus Company
vs
United Cebu Autobus
Employees Association
(L-9742 October 27, 1955)
Rose Kareen Defensor
FACTS
The company used to pay its drivers
and conductors, who were assigned
outside the city limits, aside from their
regular salary, a certain percentage of
their daily wage, as allowance for food.
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 continue
granting this privilege was upheld by
the Supreme Court.


ISSUE
Whether or not there is a violation
of Art. 100 of Labor Code.


RULING
GLOBE MACKAY CABLE AND RADIO
CORPORATION, FREDERICK WHITE and
JESUS SANTIAGO
vs
NATIONAL LABOR RELATIONS
COMMISSION, FFW-GLOBE MACKAY
EMPLOYEES UNION and EDA CONCEPCION

G.R. No. 81262 August 25, 1989

Santiago Sta. Maria


On October 30, 1984 Wage Order
No. 6 mandated an increase in the
cost-of-living allowance of non-
agricultural workers in the private
sector for P3.00. The order was
complied with by the petitioner
Corporation by multiplying the same
by 22 days, equivalent to the number
of working days in the company.
FACTS


Respondent union alleges that
instead of multiplying the COLA by
22 it should be multiplied by 30
representing the number of days in
a month, as what the corporation's
normal practice prior to the said
Wage Order. Thus the union filed a
complaint against the Corporation
for illegal deduction,
underpayment, unpaid allowances,
and violation of Wage Order No. 6.

FACTS


Whether or not COLA under Wage Order
No. 6 should be multiplied by 22 or 30
representing the number of working
days in a month.
ISSUE


Labor Arbiter Adelaido F. Martinez
sustained the position of Petitioner
Corporation by holding that since the
individual petitioners acted in their
corporate capacity they should not have
been impleaded; and that the monthly
COLA should be computed on the basis
of twenty two (22) days, since the
evidence showed that there are only 22
paid days in a month for monthly-paid
employees in the company.
RULING


His reasoning, inter alia, was as follows:
To compel the respondent company to use 30
days in a month to compute the allowance
and retain 22 days for vacation and sick
leave, overtime pay and other benefits is
inconsistent and palpably unjust. If 30 days
is used as divisor, then it must be used for
the computation of all benefits, not just
the allowance. But this is not fair to
complainants, not to mention that it will
contravene the provision of the parties'
CBA.
RULING


Section 5 of the Rules Implementing Wage
Orders Nos. 2, 3, 5 and 6 uniformly read as
follows:
Section 5. Allowance for Unworked Days.
All covered employees shall be entitled to
their daily living allowance during the days
that they are paid their basic wage, even if
unworked. (Emphasis supplied)
... it is evident that the intention of the law is
to grant ECOLA upon the payment of basic
wages. Hence, we have the principle of
'No Pay, No ECOLA'.
RULING
Samahang Manggagawa sa Top
Form Manufacturing-United
Workers of the Philippines
(SNTFM-UWP)
vs
NLRC
Rose Kareen Defensor
FACTS
Petitioner Samahang Manggagawa
sa Top Form Manufacturing United
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
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 issued
W.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
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
Whether or not an employer
committed an unfair labor
practice by bargaining in bad
faith and discriminating against
its employees.
The Supreme Court through Justice
Romero, sustained the arbiters disquisition.

We agree with the Labor Arbiter and the NLRC that
no benefits or privileges previously enjoyed by the
petitioner union and the other employees were
withdrawn as a result of the manner by which
private respondent implemented the wage orders.
Granted that private respondent had granted an
across-the-board wage increase pursuant to RA
No.6727, that single instance may not be
considered an established company practice.
RULING
Traders Royal
Bank
VS
NLRC
Jed Adrian S. Jarabelo
FACTS
On November 1986,
TRADERS ROYAL BANK (TRB)
EMPLOYEES UNION filed a case
with the National Labor Relations
Commission (NLRC) for diminution
of benefits regarding holiday pay,
mid-year and year-end bonuses.

NLRC ruled and ordered the
Bank to PAY the employees holiday
pay differentials for 1983-1986, as
well as mid-year and year-end
bonus differential for 1986.

FACTS
WHETHER or NOT the NLRC ruling,
ordering the payment of mid-year
and year-end BONUS differentials, is
correct.
WHETHER or NOT the granting of
BONUS has ripened into a company
practice.
ISSUES
1. NO, the NLRC ruling is NOT correct.
As defined, A BONUS IS A GRATUITY or
an act of liberality of the giver which
the recipient has no right to demand
as a matter of right.
The granting of bonus is basically a
MANAGEMENT PREROGATIVE which
cannot be forced upon the employer,
thus it cannot ripen into a company
practice.
FACTS
Furthermore, the Bank weakened
considerably due to suspicions that it was a
Marcos-owned and controlled bank, and
was placed under seizure by the PCGG.

To sum it all up, since bonuses came from
its profits, if there were No profit, therefor
No bonus. The Bank may not be forced to
give bonuses it cannot pay, and in effect,
be penalized for its past generosity to its
employees.
FACTS
J ohn Paul L. Lauron
UNI VERSAL CORN
PRODUCERS, PETI TI ONER,
vs.
THE NATI ONAL LABOR
RELATI ONS COMMI SSI ON,
respondent
FACTS
The COMPANY agrees to grant all regular
workers within the bargaining unit with at least
one (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 it
was provided:
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 be prorated in
accordance 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
The agreement had a duration of three years,
effective June 1, 1971, or until June 1, 1974.

The collective bargaining agreement in question
expired without being renewed.

On June 1, 1979, the parties entered into an
"addendum" stipulating certain wage increases
covering the years from 1974 to 1977.
Simultaneously, they entered into a CBA for the
years from 1979 to 1981.
FACTS
The new CBA did not refer to the "Christmas
bonus" theretofore paid but dealt only with salary
adjustments.
It deliberately excluded the grant of Christmas
bonus with the enactment of Presidential Decree
No. 851 on December 16, 1975.
Since 1975, petitioners had been paying its
employees 13th-month pay pursuant to the
Decree.
FACTS
Whether or not the 13th-month pay law does
not cover employers already paying their
employees an "equivalent" to the 13th
month pay.
ISSUE
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 on
Christmas 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
The Christmas bonus provided in the CBA accords a reward for
loyalty. It is granted to workers with at least one (1) year of
continuous 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 by
NLRC.

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 new
agreement is executed.
RULING
Main Doctrine: When benefits were not magnanimously
extended 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.
RULING
SAN MIGUEL
VS.
INCIONG
February 24, 1981

G.R. No. L-49774

Josefa Maria Castro 2C
FACTS
OF THE CASE
January 3, 1977
Cagayan 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
February 15, 1977
An Order was issued by Regional Office
No. X requiring San Miguel "to pay the
difference of whatever earnings and the
amount actually received as 13th month pay
excluding overtime premium and emergency
cost of living allowance. "

FACTS
Petitioner appealed from that Order to the
Minister 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 Order
against San Miguel to enforce said Order.
FACTS
Petitioner refuses to comply with
aforesaid order, contending that
Presidential Decree 851 speaks only
of basic salary as basis for the
determination of the 13th-month pay.
FACTS
ISSUE
LEGAL
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

ISSUE
RULING
SUPREME
COURT
The provision in dispute is Section 1 of
Presidential Decree 851 and provides:
All employers are hereby required to pay
all their employees receiving a basic salary of
not more than Pl,000 a month, regardless of
the nature of the employment, a 13th-month
pay not later than December 24 of every
year.

RULING
Section 2 of the Rules and Regulations for the
implementation 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
allowances granted pursuant to Presidential Decree
No. 525 or Letter of Instructions No. 174, profit
sharing payments and all allowances and monetary
benefits 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
Under the Rules and Regulations Implementing
Presidential Decree 851, the following compensations
are deemed not part of the basic salary:
a) Cost-of-living allowances granted pursuant to
Presidential Decree 525 and Letter of Instructions
No. 174;
b) Profit sharing payments;
c) All allowances and monetary benefits which
are not considered or integrated as part of the
regular basic salary of tile employee at the time
of the promulgation of the Decree on December
16, 1975.

RULING
Under a later set of Supplementary Rules
and Regulations Implementing Presidential
Decree 851 issued by the then Labor Secretary
Blas Ople, overtime pay, earnings and other
remunerations are excluded as part of the
basic salary and in the computation of the
13th-month pay.

RULING
The exclusion of cost-of-living allowances under
Presidential 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
Art. 87. overtime work.
Work may be performed beyond eight
hours a day provided what the employee is
paid for the overtime work, additional
compensation equivalent to his regular wage
plus at least twenty-five (25%) percent
thereof.


RULING
It is clear that overtime pay is an additional
compensation other than and added to the
regular wage or basic salary, for reason of which
such is excluded from the definition of basic
salary under the Supplementary Rules and
Regulations Implementing Presidential Decree
851.
RULING
Article 93
c) work performed on any special holiday
shall be paid an additional compensation of
at least thirty percent (30%) of the regular
wage of the employee.

RULING
It is likewise clear that payment for special
holiday which is at least 30% of the regular
wage is an additional compensation other
than and added to the regular wage or basic
salary.
RULING
WHEREFORE, the Orders of the
Deputy Labor Minister dated June 7, 1978
and December 19, 1978 are hereby set
aside and a new one entered as above
indicated.
The Temporary Restraining Order
issued by this Court on February 14, 1979
is made permanent.

RULING
Philippine
Duplicators
vs.
NLRC
G.R. No. 110068
February 15, 1995
Mark Pimentel
FACTS
Petitioner Corporation,
Philippine Duplicators, Inc., is a
company involved in selling duplicating
machines.
The Company pays its salesmen
a SMALL FIXED OR GUARANTEED
WAGE. The greater part of the their
wage or salary is composed of the
sales commissions earned on actual
sales of duplicating machines sold by
them.
FACTS
The Labor Arbiter ordered
the Petitioner to pay 13
TH

MONTH PAY to private
respondent employees computed
on the basis of their FIXED
WAGES PLUS SALES
COMMISSION.
Petitioner Corporation contends that their
sales commission SHOULD NOT be included
in the COMPUTATION of the 13th month
pay invoking, among others, the case of
Boie-Takeda Chemicals, Inc. vs Hon. Dionisio
de la Serna, were the so-called commissions
of medical representatives of Boie-Takeda
Chemicals were NOT included in the term
BASIC SALARY in computing the 13th
month pay.
FACTS
Whether or not SALES COMMISSIONS
should be included in the computation
of the 13
th
month pay.
ISSUE
YES. Their sales commission which are an
integral part of the BASIC SALARY
STRUCTURE of the companys salesmen, are
not considered 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.
RULING
The actual basic salary only comprise at
about 15 30 PERCENT of an employees
TOTAL EARNINGS in a year.
RULING
Difference
In the Boie-Takeda case, the sales
commissions are considered as
PRODUCTIVITY BONUSES which closely
resemble PROFIT-SHARING PAYMENTS
which is expressly excluded in the law to be
considered in determining the 13
TH
MONTH
PAY
BOIE-Takeda
vs
De La Serna
G.R. No. 92174
December 10, 1993
Mark Joenel Pimentel
On May 2, 1989, a ROUTINE
INSPECTION was conducted in the
establishment of petitioner Boie-Takeda
Chemicals, Inc. by Labor and Development
Officer Reynaldo B. Ramos under Inspection
Authority
FACTS
The finding showed that Boie-Takeda
had not been including the COMMISSIONS
earned by its medical representatives in the
computation of their 13TH MONTH PAY
FACTS
Ramos then gave the Notice of
Inspection 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
Boie-Takeda wrote a letter the Labor
Department 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 and
therefore exclude all other remunerations
which are not part of the REGULAR salary.
FACTS
The companys view is grounded on
the premise that if NO SALES are 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
On July 24, 1989, Director Piezas
issued 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
On August 3, 1989, Boie-Takeda filed a
motion for reconsideration.
On January 17, 1990, Acting Labor
Secretary Dionisio de la Serna AFFIRMED
the order with modification that the sales
commissions earned by the medical
representatives shall be excluded in the
computation of their 13th month pay.
FACTS
Whether or not COMMISSIONS should
be included in the computation of 13-
MONTH PAY
ISSUE
NO. The context of the law provides
that "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
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.
RULING
Joseph John Michael Sale
PACIWU vs NLRC
247 SCRA 256
PHILIPPINE AGRICULTURAL COMMERCIAL AND INDUSTRIAL
WORKERS UNION (PACIWU)-TUCP, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION AND VALLACAR
TRANSIT, INC., respondents.

FACTS
PETITIONER:
Petitioner union complaint for payment of
13
th
month pay to the drivers and
conductors of respondent company.

Drivers and conductors are compensated on
a purely commission basis as described in
their CBA, they are automatically entitled to
the basic minimum pay mandated by law
should said commission be less than their
basic minimum for eight (8) hours work.
FACTS
RESPONDENT:
Vallacar Transit, Inc. contended that since said drivers are
compensated on a purely commission basis, they are not
entitled to 13
th
month pay.

Pursuant to the exempting provisions enumerated in
paragraph 2 of the Revised Guidelines on the
Implementation of the 13
th
Month Pay Law.

Section 2 of Article XIV of the CBA expressly provides
that drivers and conductors paid on a purely
commission are not legally entitled to 13
th
month pay.
Whether or not the bus drivers and
conductors of respondent Vallacar Transit, Inc.
are entitled to 13
th
month pay.
ISSUE
It is immaterial whether the employees
concerned are paid a guaranteed wage
plus commission or a commission with
guaranteed wage inasmuch as the
bottom line is that they receive a
guaranteed wage.
Thus is correctly construed in the MOLE
Explanatory Bulletin No. 86-12.

The 13
th
month pay of bus drivers and
conductors must be one-twelfth (1/12) of
their total earnings during the calendar
year.

RULING

MAKATI HABERDASHERY, INC., JORGE LEDESMA and
CECILIO G. INOCENCIO, petitioners,
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, JACINTO
GARCIANO, 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, JOSEFINA
ALCOCEBA and MARIA ANGELES, respondents.
Kristine Mae Francisco-Sibonga
FACTS
Individual complainants are working for
Makati Haberdashery, Inc. as tailors,
seamstress, sewers, basters, and
plantsadoras 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 P3.00
if they report before 9:30 a.m.everyday.
Work schedule: 9:30-6:00 or 7 p.m.,
Monday to Saturday and during peak
periods even on Sundays and Holidays.

FACTS
The Sandigan ng Manggagawang Pilipino filed a complaint
for underpayment of the basic wages, underpayment of
living allowance, nonpayment of overtime work,
nonpayment of holiday pay, nonpayment of service
incentive pay, 13
th
month 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.
(1) WON EMPLOYER-EMPLOYEE RELATIONSHIP
EXISTS BETWEEN HABERDASHERY, INC.
AND RESPONDENT WORKERS?
(2) WON RESPONDENT WORKERS ARE
ENTITLED TO MONETARY CLAIMS DESPITE
THE FINDING THAT THEY ARE NOT
ENTITLED TO MINIMUM WAGE?
(3) WON PELOBELLO AND ZAPATA WERE
ILLEGALLY DISMISSED?

ISSUES
1. There is employer-employee
relationship. The most important requisite
of control is present. Haberdashery directs
their employees to take the customer's
measurements, and to sew the pants, coat
or shirt as specified by the customer.
Supervision is actively manifested in all
these aspects the manner and quality
of cutting, sewing and ironing.
RULING
2. The workers were regular
employees, thus entitled to minimum
wages. The respondents didn't
appealed when the Labor Arbiter
granted the minimum wage award to
the workers. But workers are not
entitled to incentive pay and other
benefits because piece-rate workers
are paid at fixed amount for performing
work irrespective of the time
consumed.

RULING
3. There was no illegal dismissal to
the two workers accused of the copied
Barong Tagalog design, because when
they were asked to explain to their
employer, the workers did not but
instead go AWOL. Imposing
disciplinary sanctions upon an
employee for just and valid cause is
within the rights of the employer.

RULING
Labor Congress
of the Philippines
vs
NLRC
GR No. 83380-81
November 15, 1989
Kristine Mae Francisco-Sibonga
The 99 persons named as petitioners filed
against Empire Food Products a complaint
for payment of money claims and for
violation of labor standards laws.
On October 24, 1990, the Mediator Arbiter
approved the memorandum which
recognizes the status of LCP as bargaining
agent and representative, that all parties
agreed to resolve the issues during the
collective bargaining agreement, and there
will be proper adjustment of wages,
withdrawal of case from the calendar of
NLRC, non-interference or any ULP act.


FACTS
FACTS
On November 1990, LCP President
Navarro submitted to Empire a
proposal for collective bargaining.
On January 1991, the private
petitioners filed a complaint for ULP,
Union-Busting, Violation of the
October 23 1990 memorandum,
underpayment of wages that later on
the Labor Arbiter absolved but denied
actual, moral and exemplary damages.
FACTS
The Labor Arbiter directed reinstatement
of complainants, due to the fact that
Empire did not keep its payroll records as
per requirement of the DOLE.
On appeal, the NLRC remanded the case
to Labor Arbiter for further proceedings
for the reason that the Labor Arbiter must
have overlooked the testimonies of some
of the individual complainants which are
now on record.
FACTS
In a Decision dated July 27, 1994, Labor Arbiter Santos
made the following determination: Complainants
failed to present with definiteness and clarity the
particular act or acts constitutive of unfair labor
practice.
declaration of unfair labor practice connotes a finding
of prima facie evidence of probability that a criminal
offense may have been committed so as to warrant
the filing of a criminal information before the regular
court.
As regards the issue of harassments [sic], threats and
interference with the rights of employees to self-
organization which is actually an ingredient of unfair
labor practice, complainants failed to specify what
type of threats or intimidation was committed and
who committed the same.
NLRC affirmed Labor Arbiters decision.
WON the petitioners are entitled to Labor
standards benefits, considering their status as
piece rate workers.
WON the actions of the Petitioners
constituted abandonment of work.
ISSUES
1. Petitioners are entitled to labor
standards benefits, considering
their status as piece rate workers
including benefits such as holiday
pay, premium pay, 13
th
month pay
and service incentive leave. The
petitioners nature of tasks was
necessary and desirable in the
usual business of Empire Foods.
RULING
RULING
1. Failure to appear to work did not
constitute abandonment of work. The SC
cited the Office of the Solicitor Generals
Observation was failure to work for one day
which resulted to spoilage of cheese curls
does not amount to abandonment of work
and two days after the reported
abandonment of work, petitioners filed a
complaint for, among others, ULP, illegal
lock-out and illegal dismissal. Futhermore,
the burden of proving the existence of just
cause for dismissing an employee rests on
the employer.
Honda
vs
Samahan ng
Malayang
Manggagawa ng
Honda
G.R. 145561
Kazper Vic Bermejo
FACTS
The case rises from CBA between Honda
and respondent employee about the
computation of 14
th
month pay as the
same as 13
th
month pay. This practice
has been for a long period of time.
In 1998, the parties renegotiate for the
fourth and fifth year of CBA. Then, the
union filed notice of strike for
deadlock.
DOLE assumed jurisdiction and referred it
to NLRC for compulsory arbitration.
The union members ordered to work
and management to accept them back.

Honda issued a new memorandum of
the new computation for 13
th
and 14
th

month pay whereby the 31-day strike shall
be considered unworked days for the
purpose of computing. That means that
of the employees basic salary shall be
deducted from benefits, however, Honda
promised that if the strike is considered
legal, it shall pay the amount.
The respondent union opposed the
computation. Thus, this petition.



FACTS
Whether or not the new
computation of 13
th
and 14
th
month pay
is valid and lawful?
ISSUE
The new computation is invalid. The
new computation is not considered
as company practice because it is
the first time Honda applied the said
computation.
The old computation is the established
practice. The voluntary act of Honda
cannot be unilaterally withdrawn
without violating Article 100 of LC.

RULING
Therefore, the withdrawal of
the benefit of paying a full
month salary for 13
th
month pay
is violation of Article 100 of LC.
RULING
JPL Marketing
VS
Court of Appeals
Jed Adrian S. Jarabelo
JPL is a domestic corporation
engaged in the business of recruitment
and placement of workers, while private
respondents Noel Gonzales, Ramon
Abesa III and Faustino Aninipot were
employed by JPL as merchandisers on
separate dates and assigned at different
establishments in Naga City and Daet,
Camarines Norte as attendants to the
display of California Marketing
Corporation (CMC), one of JPL clients.

FACTS
FACTS
On August 13, 1996, JPL notified
private respondents that CMC
would stop its direct merchandising
activity in the Bicol Region, Isabela,
and Cagayan Valley effective 15
August 1996.
They were advised to wait for
further notice as they would be
transferred to other clients.
FACTS
However, on 17 October 1996, private
respondents Abesa and Gonzales filed before
the 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 case
thereafter.

Labor Arbiter Rivera dismissed complaints
for lack of merit.

FACTS
The Labor Arbiter said that Gonzales
and Abesa applied with another
store before the 6month period
given by law to JPL to provide
private respondents a new
assignment. Thus, they may be
considered to have unilaterally
severed their relation with JPL, and
cannot charge JPL with illegal
dismissal.

FACTS
He further said that it was their
OBLIGATION TO WAIT until they were
reassigned by JPL, and if after six
months they were not reassigned,
they can file an action for separation
pay but not for illegal dismissal. The
claims for 13th month pay and service
incentive leave pay was also DENIED
since private respondents were paid
way above the applicable minimum
wage during their employment.

FACTS
NLRC affirmed but ordered
Separation pay, based on their last
salary rate and counted from the
first day of their employment with
the respondent JPL up to the
finality of this judgment; Service
Incentive Leave pay, and 13th
month pay, computed as in No.1
hereof.
Court of Appeal also affirmed both
rulings.
WHETHER or NOT private
respondents are entitled to
separation pay, 13th month pay and
service incentive leave pay
What should be the reckoning point
for computing said awards. From the
time the employees severed their
ties with JPL from the time the
employees severed their ties with
JPL


ISSUE
RULING
YES. The employee is granted
separation pay:
Under Arts. 283 and 284 of the Labor
Code, separation pay is authorized only
in cases of dismissals due to any of these
reasons: (a) installation of labor saving
devices; (b) redundancy; (c)
retrenchment; (d) cessation of the
employer's business; and (e) when the
employee is suffering from a disease and
his continued employment is prohibited
by law or is prejudicial to his health and
to the health of his co-employees.
Also in Under Sec. 4(b), Rule I, Book
VI of the Implementing Rules to
Implement the Labor Code that
provides for the payment of
separation pay to an employee
entitled to reinstatement but the
establishment where he is to be
reinstated has closed or has ceased
operations or his present position no
longer exists at the time of
reinstatement for reasons not
attributable to the employer.
RULING
The common denominator of the
instances where payment of separation
pay is warranted is that the employee
was dismissed by the employer. In the
case, there was no dismissal to speak
of. Private respondents were simply not
dismissed at all, whether legally or
illegally.

RULING
What they received from JPL was
not a notice of termination of
employment, but a memo
informing them of the termination
of CMCs contract with JPL. More
importantly, they were advised that
they were to be reassigned. At that
time, there was no severance of
employment to speak of.

RULING

G. R No. 154419
October 20, 2005
Fact
s:
On February 23, 1999, petitioner
Heavylift, a maritime agency thru a
letter signed by the Administrative
and Finance Manager of Heavylift,
Josephine Evangelio informed Ma.
Dottie Galay, Heavylift Insurance and
Provisions Assistant, of her low
performance rating and the negative
feedback from her team members
because of her work attitude.
The letter notified her that she was
being relieved from her functions
except on the development of the New
Access Program.
On August 16, 1999, Galay was
terminated allegedly for loss of
confidence. In return, the latter before
the Labor Arbiter a complaint for
illegal dismissal and nonpayment of
service incentive leave and 13
th
month
pay against petitioners.
Petitioners alleged that
because Galay did not
get along well with her
co-employees, it resulted
to the decline of the
companys efficiency and
productivity. The
presented the letters and
notice of termination
dated February 23, 1999
and August 16, 1999
respectively.
The Labor Arbiter, NLRC
and The Court of Appeals
dismissed the case.
Issu
e:
1. W/N Is attitude problem a valid
ground for termination of an
employee
2. W/N respondent herein should be
paid service incentive and 13
th

month pay

Ruling:
1st Issue: No. Petitioners have not shown
sufficient clear and convincing evidence to justify
Galays termination for there must be substantial
evidence to support the termination on the ground
of attitude for the burden of proof is not on the
employee but on the employer. Galays failure to
refute the petitioners allegation does not mean
admission.
The letter also does not constitute the twin
requirement of notice and hearing. Galay was not
given a chance to explain herself from the
allegations hence, denying her right to due
process.
2nd Issue: Yes. Petitioners failed to present
evidence that the benefits were already paid.
Moreover, petition for certiorari does not deal
with determination of question of fact hence
the findings of the Labor Arbiter and the NLRC
should be accorded with great weight and
respect.
vs.
Richard Troy A. Colmenares
What?
WO No. NCR-
01
15 October 1990
Min Wage += P17/day
2 MRs. ECOP opposed
WO No. NCR-
01-A
23 October 1990
Across the board increase to all private workers
earning at most P125 per day
Appeal, MR,
Certiorari
6 November 1990 appeal dismissed.
MR denied.
Certiorari elevated to SC.
Contentions?


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?
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
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 valid
delegated 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
to be followed
Ruling:
Ruling: (cont)
It is not for labor and management to decide wages.
To do so would be to accommodate laissez fair (i.e.
leave market forces to govern the economy), which is
unconstitutional.
The Constitution meant for Government to regulate
property rights.
RA 6727 seeks the common good by regulating
property and property relations. This is left for experts
to 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.

BANKARD
EMPLOYEES VS.
NLRC
BANKARD EMPLOYEES UNION-WORKERS ALLIANCE
TRADE UNIONS, petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION and BANKARD,
INC., respondents

Joseph John Michael B. Sale
Bankard, Inc. classifies its
employees by levels: Level I, Level
II, Level III, Level IV, and Level V.

On May 28, 1993, its Board of
Directors approved a New Salary
Scale, made retroactive to April
1, 1993.


FACTS
FACTS
Increase in the hiring rates of new
employees:

Levels I and V - P1,000.00
Levels II, III and IV - P900.00

*The salaries of employees who fell
below the new minimum rates were
also adjusted to reach such rates under
their levels.

Bankard Employees Union pressed for
the increase in the salary of its old,
regular employees.

Bankard alleged that there was no
obligation on the part of the
management to grant to all its
employees the same increase in an
across-the-board manner.

Union filed a Notice of Strike on the
ground of discrimination.

FACTS
FACTS
National Conciliation and Mediation Board
found that the issues were not strikeable.

Petitioner filed another Notice of Strike on
the grounds of refusal to bargain,
discrimination, and other acts of ULP.

The Second Division of the NLRC dismissed
the case for lack of merit.
Petitioners motion for reconsideration of the
dismissal of the case was denied.

Whether the unilateral adoption by
an employer of an upgraded salary
scale that increased the hiring rates
of new employees without increasing
the salary rates of old employees
resulted in wage distortion.

ISSUE
Four elements of wage distortion:
1. An existing hierarchy of positions with corresponding
salary rates

2. A significant change in the salary rate of a lower pay
class without a concomitant increase in the salary rate
of a higher one.

3. The elimination of the distinction between the two
levels.

4. The existence of the distortion in the same region of
the country.

Prubankers Association v. Prudential Bank and Trust Company


RULING
In dealing with WAGE DISTORTION:

There must exists a grouping or classification of
employees that establishes distinctions among
them on some legitimate bases.

To determine WAGE DISTORTION:

historical classification of the employees prior to
the wage increase must be established and it must
be shown that as between the different
classification of employees, there exists a
historical gap or difference.

RULING
Petitioner cannot make a contrary classification of
private respondents employees without
encroaching upon recognized management
prerogative of formulating a wage structure which is
one based on level.

There is no hierarchy of positions between the
newly hired and regular employees of Bankard.

Seniority cannot be made the sole basis in cases
where the nature of their work differs.



RULING
Bankards right to increase its hiring
rate, to establish minimum salaries
for specific jobs, and to adjust the
rates of employees affected is
embodied under Section 2, Article V
(Salary and Cost of Living Allowance)
in their Collective Bargaining
Agreement (CBA).

Section 2. Any salary increase granted under this Article shall be without
prejudice to the right of the Company to establish such minimum salaries as
it may hereafter find appropriate for specific jobs, and to adjust the rates of
the employees thereby affected to such minimum salaries thus established.
RULING
There wasnt any indication that the
voluntary increase of salary rates by
an employer was done arbitrarily and
illegally for the purpose of
circumventing the laws or to
discriminate regular employees.

Court did not interfere with its
management prerogative.


RULING
METROBANK
EMPLOYEES
UNION
VS NLRC

Robert Ian Maranon
LLB 2C

G.R. No. 102636
Sept. 10, 1993
LABOR STANDARDS
FACTS

Metrobank entered into a CBA with Petitioner
union, granting a monthly P900 wage
increase effective 01 January 1989, P600
wage increase 01 January 1990, and P200
wage increase effective 01 January 1991.

The MBTCEU had also bargained for the
inclusion of probationary employees in the
list of employees who would benefit from the
first P900 increase but the bank had
adamantly refused to accede thereto. Only
regular employees as of 01 January 1989
were given the increase to the exclusion of
probationary employees.
Subsequently, Republic Act 6727 was
passed increasing the minimum wage.

Pertinent Provisions of RA 6727

Sec. 4. (a) Upon the effectivity of this
Act, the statutory minimum wage rates
of all workers and employees in the
private sector, whether agricultural or
non-agricultural, shall be increased by
twenty-five pesos (P25) per day, . . .:

Provided, That those already receiving
above the minimum wage rates up to
one hundred pesos(P100.00) shall also
receive an increase of twenty-five pesos
(P25.00) per day, . . .
(d) If expressly provided for and agreed upon
in the collective bargaining agreements, all
increase in the daily basic wage rates granted
by the employers three (3) months before the
effectivity of this Act shall be credited as
compliance with the increases in the wage
rates prescribed herein, provided that, where
such increases are less than the prescribed
increases in the wage rates under this Act, the
employer shall pay the difference. Such
increase shall not include anniversary wage
increases, merit wage increase and those
resulting from the regularization or promotion
of employees.
CLASSIFICATION OF EMPLOYEES

Petitioners argue that the implementation created a wage distortion within the
employees of Metrobank because the differences in the salaries of the
employee classifications were substantially reduced. MBTCEU sought the
correction of the alleged distortion.
(a) the probationary
employees as of 30 June
1989 and regular
employees receiving P100
or less a day who had been
promoted to permanent or
regular status before 01
July 1989, and
(b) the regular employees
as of 01 July 1989, whose
pay was over P100 a day.
There is WAGE DISTORTION
Labor Arbiter disregarded the bank's contention that there
was no wage distortion because only 6.8% was affected.
It is not necessary that a big number of wage earners
within a company be benefited by the mandatory increase
before a wage distortion may be considered to have taken
place," It is enough that such increase "result(s) in the
severe contraction of an intentional quantitative
difference in wage between employee groups."

LABOR ARBITERS DECISION

Intentional quantitative difference in wage or salary rates between and among
groups of employees is not based purely on skills or length of service but also
on "other logical bases of differentiation
P900.00 wage gap intentionally provided in a collective bargaining agreement
as a quantitative difference in wage between those who WERE regular
employees as of January 1, 1989 and those who WERE NOT as of that date, is
definitely a logical basis of differentiation (that) deserves protection from any
distorting statutory wage increase.
Since the "subjective quantitative difference" between wage rates had been
reduced from P900.00 to barely P150.00, correction of the wage distortion
should be made. LA granted them a Seven Hundred Fifty (P750.00) Pesos
monthly increase effective July 1, 1989.



NLRCS DECISION

On appeal, NLRC reversed the decision of the Labor Arbiter, saying that
reduction in the wage gaps between said levels is not significant as to obliterate
or result in severe contraction of the intentional quantitative differences in
salary rates between the employees groups.
Presiding Commissioner Edna Bonto-Perez dissented with this opinion:
It is my considered view that the quantitative intended distinction in pay
between the two groups of workers in respondent company was contracted by
more or less eighty-three (83%) per cent hence, there is no doubt that there is
an evident severe contraction.
Nonetheless, the across-the-board P750.00 per month increase to all of
herein individual complainants is not the most equitable remedy at bar. They
are only entitled to the relief granted by said law by way of correction.




ISSUE
Whether or not the implementation by the Metropolitan
Bank and Trust Company of Republic Act No. 6727,
mandating an increase in pay of P25 per day for certain
employees in the private sector, created a distortion that
would require an adjustment under said law in the wages
of the latter's other various groups of employees.
RULING
There was wage distortion.

Wage Distortion means a situation where
an increase in prescribed wage rates
results in the elimination or severe
contradiction of intentional quantitative
differences in wage or salary rates
between and among employee groups in
an establishment as to effectively
obliterate the distinctions embodied in
such wage structure based on skills, length
of service, or other logical bases of
differentiation.

The "intentional quantitative
differences" in wage among employees
of the bank has been set by the CBA to
about P900 per month as of 01 January
1989.

RULING
The majority of the members of the
NLRC, as well as its dissenting
member, agree that there is a wage
distortion arising from the bank's
implementation of the P25 wage
increase.

They do differ, however, on the extent
of the distortion that can warrant the
adoption of corrective measures
required by law.
Giving the employees an across-the-
board increase of P750 may not be
conducive to the policy of encouraging
"employers to grant wage and allowance
increases to their employees higher than
the minimum rates of increases
prescribed by statute or administrative
regulation. In effect, this would
penalize employers who grant their
workers more than the statutorily
prescribed minimum rates of increases.
RULING
As the most equitable and fair remedy, the formula offered and incorporated in Wage Order
No. IV-02 by the RTWPC for correction of pay scale structures should be followed:


Existing Minimum Wage X Prescribed Wage Increase = Distortion
Actual Salary of Employee Adjustment Amount

National Federation of Labor
vs
NLRC

GR No. 103586
Facts:
Wage orders 3, 4, 5 & 6 were implemented for a year
which effectively icnreased the statutory minimum
wages of workers. In the private respondent's
company (Franklin Baker Corp.) the wage rates of the
regular employees and casuals were such that there
wasa positive differential between 2 in the amount of
P4.56. After Wage Order No. 5, this differential is not
zero. As a result, grievance meetings were held
between the parties. It resulted to the following
action on the part of the employer: a) regularization
of casual employees, b) increase in the wages of the
regular employees, and the c) grant of across the
board increase of P2 to all the regular employees.


The company experienced output
slowdown resulting to the dismissal of
205 employees. The petitioner union
went on strike and demand the
rectification of the wage distortion.
The NLRC in its decision found the
existence of a wage distortion and
ordered the respondent company to
increase wage by P1.00. However, the
NLRC Fifth division held (after an MR)
that the wage distortion only existed
for 15 days and has ceased.
Issue:
WoN a new additional scheme of
classification of employees for compensation
purposes should be established by the
company
Ruling:
Yes. The formulation of a wage structure
through the classification of employees
is a matter of management judgment
and discretion, and ultimately, perhaps,
a subject matter for bargaining
negotiations between employer and
employees.


It is something outside the concept
of wage distortion. As already
stated, the classificatio under the
wage structure is based on the rank
of an employee not on the seniority.
For this reason, wage distortion
cease to exist.