Case Digest

SONGCO vs NLRC
G.R. No. 50999-51000 March 23, 1990

Facts:
This is a petition for certiorari seeking to modify the decision of
National Labor Relations Commissions. The petitioners Jose Songco and
Amancio Manuel were terminated by F.E. Zuellig on the ground of
retrenchment due to financial losses. The parties petitioned that their sales
commissions and allowances be included in their separation pay. The
petitioners and Zuellig entered into Collective Bargaining Agreement that
gives retirement gratuity to employees separated from their employment not
due to their fault. Since the petitioners are terminated on the ground of
retrenchment due to financial losses, the Article 284 of the Labor Code
prevailing provides that the: Separation pay shall be equivalent to 1 month
pay or at least month pay for every year at service, whichever is higher
However, Zuellig contends that if it really were the intention of the Labor
Code and its implementing rules to include commission allowances, then it
should have been explicitly said so in clear and equivocal terms. Also, in the
definition of the term wage, commission is only used as one of the features
or designations to the word remuneration. The Labor Arbitrer rendered a
decision ordering the respondent to pay the petitioners their separation
payments, exclusive of their commission and allowances. The Labor Arbitrer
ruled wage not synonymous with salary and the petitioners appeal to the
NLRC was dismissed for lack of merit, hence the petition for review.
Issue: Whether or not earned sales commissions and allowances should be
included in the monthly salary of petitioners for the purpose of computation
of their separation pay
Held: Yes
Ratio: Petitioners cited Article 97(f) of the Labor Code as their ground for
including commission as part of their salary.
Art. 97(f) say: Wage mean the payment by an employer to an
employee for work done or to be done as determined by Secretary of
Labor.
NLRC ruled that salary is often used interchangeably with wage. Both words
generally refer to one and the same thing, that is, a reward or recompense
for services performed. Also, the final consideration is, in carrying out and
interpreting the Labor Codes provisions and its implementing regulations,
the working mans welfare should be the primordial and paramount
consideration. This kind of interpretation gives meaning and substance to the
liberal and compassionate spirit of the law as provided in the Art. 4 of the
Labor Code which 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 favour of laborers. And Article

1702 of the Civil Code which states that: In case of doubt, all labor
legislation and labor contracts shall be construed in favour of the safety and
decent living for the labourer. Accordingly, petition is GRANTED and the
decision of the NLRC is modified, including allowances and commissions in
the separation pay of the petitioners.