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Pagasa Steel Works, Inc. vs. CA,

GR 166647
March 31, 2006
Herein is a petition on certiorari of the decision of the CA ordering herein petitioner Pagasa Steel Works to pay
members of the Pagasa Steel Works Union the wage increase prescribed under Wage Order NCR-08 which provides that
only those employees receiving salaries below the prescribed minimum wage are entitled to wage increase provided
therein. Petitioner is a corporation engaged in the manufacture of steel bars and wire rods. The RTWPB of NCR issued
Wage Order NCR-06 which provides for an increase in the salaries of employees to which the company acknowledged
and included in their payment of salaries as evidenced in their CBA. Later on upon the passage of the Wage Order NCR08, respondent union requested that it apply the same to the employees to which the employer denied contending that
there were no employees receiving salaries below the prescribed minimum wage.
Whether or notthe employees are entitled to the increase as prescribed by the Wage Order NCR-08 as a matter of
practice on the part of the company considering that the company is obliged to adopt whenever the government
issues an order of increase notwithstanding the fact that the employees are receiving salaries above the minimum
and there is no wage distortion to that effect.
No, the Courtheld that the petitioner is not obliged to grant the wage increase pursuant to the assailed order either
by virtue of the CBA or as a matter of company practice. The Court held that according to the CBA of the parties, the
wage orders will be used as guide and basis as the extent of increase the employees are entitled to and such increase
hardly constitute company practice in the contemplation of the law. For the same to ripen as a company practice, the
giving thereof should not be by reason of a strict legal or contractual obligation but by reason of an act of liberality on the
part of the employer. Hence, despite the continuous adoption of the company of wage orders and implementing the same
as mandated by the said wage orders, they would not automatically ripen to a company practice.


Traders Royal Bank vs. NLRC,

GR 88168
August 30, 1990
Herein is a petition for certiorari on the decision of the NLRC in favoring herein private respondents by awarding
them the mid-year and year-end bonuses and holiday differentials. Petitioner Traders Royal Bank however contend that
the said bonuses were given in relation to their yearly income and therefore the amount of the bonus is dependent thereto.
The respondents aver that the bonuses has decreased as compared to the previous years hence is considered to be a
diminution of benefit which is protected by the law.
Whether or nota decrease in bonuses generously given by the employer to their employees constitute a diminution
of benefit which is prohibited by the law.
No, the Courtheld that a bonus is not a part of labor standards in the same class as salaries, cost-living allowance,
and other work compensations under the law. The Court rationalized that bonuses are gratuitous acts on the part of the
giver which the recipient has no right to demand as a matter of right. It is a matter of managerial prerogative which an
employee may not demand nor impose unto an employer who can likewise cease the giving of the same. Moreover, the
amount of bonus to be received, as established in this case, depends upon the operations of the Bank which has greatly
weakened due to economic and political constraints.


International School of Speech vs. NLRC,

GR 112658
March 18, 1995
Herein is a petition for certiorari on the decision of the NLRC in affirming the decision of the labor arbiter in
finding herein petitioner International School of Speech liable to private respondent for work benefits prayed for by the
latter. Private respondent Ma. Corazon Mamuyac filed a complaint charging petitioner of unfair labor practice, illegal
deduction, non-payment of wages, overtime pay and legal holiday pay as well as 13 th month pay claims. She further
contended that she was illegally dismissed on the ground that her teaching load was divested from her, although this
allegation was not included in her complaint. The petitioner however filed a counterclaim that Mamuyac abandoned her
work and thus claims for damages. The labor arbiter found for private respondent which the NLRC affirmed hence this
petition which assailed the award of 13th month pay and the dismissal of their counterclaim.
Whether or notthe award of 13th month pay in favor of private respondent was erroneous.
No, the Courtheld that the award was just and lawful however the amount to be awarded was incorrect. Although
findings of technical matters by administrative bodies are accorded great respect, if clear and demonstrable error is
committed, the Courts can duly modify or rectify the same pursuant to the law and for the interest of justice. The Court
held that the computation of the 13th month pay was in error considering the fact that the respondent did not adduce any
evidence that the company uses a different computation hence the one provided for by law should be followed.


Villarama vs. NLRC,

GR 106341
September 02, 1994
Herein is a petition for certiorari assailing the decision of the NLRC in reversing the decision of the labor arbiter
favoring herein petitioner which states that petitioner has been illegally dismissed and was denied due process thereto.
Petitioner Villarama was charged with sexual harassment by Divina Gonzaga, a clerk-typist assigned in his department, in
her letter of resignation sent to the management of herein private respondent Golden Donuts. The management called for
a meeting with Villarama as regards the allegation and the latter admitted the misconduct and filed a leave of absence in
preparation for his separation from the company.
Villarama however deviated from his decision contending now that his error was not substantial enough to
outweigh his contributions to the company hence asking for his resumption of office after his leave of absence. In
response to this, the company dismissed him prompting him to file for illegal dismissal.
Whether or notVillarama was denied of due process for his termination and that sexual harassment on his part was
not a sufficient cause for his termination.
The Courtheld that, although Villarama was denied of due process as regards his termination, there was sufficient
cause for his dismissal. The Court ruled that as an officer occupying a managerial position he should know the
evidentiary value of his admissions, as evidenced by his letter when he was confronted by the charge against him, and the
subsequent acts in relation thereto. Loss of trust and confidence is a good ground for dismissing a managerial employee
which need only but substantial evidence to be proven.


Clarion Printing House, Inc. vs. NLRC,

GR 148372

June 27, 2005

Herein is a petition for certiorari on the decision of the NLRC which affirmed the decision of the labor arbiter in
holding herein petitioner Clarion Printing House guilty of illegal dismissal against complainant Miclat. Petitioner
alongside with its sister company EYCO Group of companies filed for receivership and liquidation of the company due to
financial constraints and other problems. Herein complainant Michelle Miclat was employed as a probationary marketing
assistant by Clarion. Due to said problems, a retrenchment occurred and Miclat was one of those who were terminated in
relation thereof.
Miclat contended that she did not receive any notice of said termination and accorded due process apart from a
phone call from the manager which is likewise without reason of termination and also to find out that the effectivity of
which is the day after the call. Petitioners averred that they could not be faulted for the retrenchment of some employees
for they are under receivership and notice thereof was given to all rank-and-file employees via memorandum. The labor
arbiter found in favor of complainant duly affirmed by the NLRC in which the CA sustained the resolutions of the NLRC
hence this petition.
Whether or notthe dismissal of herein complainant Miclat was illegal considering the fact that she is presumed to
have acquired the status of a regular employee since at the time she was terminated it was also the end of her
probationary contract and without compliance to the rules governing probationary employment, after the
expiration of which, said employee is deemed a regular employee hence termination requires a just cause to be
No, the Courtheld that the termination of Miclat is legal since at the time she was hired she was not informed of
the standards that would qualify her to be a regular employee. The Court stated that the law requires the employer to
make known to the probationary the standards under their policy to entitle the employee regularization. The petitioner
however failed to duly notify Miclat of the retrenchment which requires at least 1 month notice thereof. Miclat then is
entitled to separation pay, 13th month pay and nominal damages for non-compliance of due process.

Marcopper Mining Corp. vs. NLRC,

GR L-51254

June 11, 1981

Petitioner Marcopper Mining Corp entered into an agreement with its employees to grant mid-year
and year-end bonuses when the operation is profitable. In relation to this, petitioner contend that they
should be exempt from the payment of 13 th month pay in accordance to PD 851. The regional director
ruled in favor of the corporation but was reversed by the Deputy Minister of Labor on appeal holding now
that petitioner is obliged to pay both the agreed bonuses and the 13th month pay.
Whether or not petitioner is exempt from paying the 13 th month pay pursuant to PD 851
considering the fact that it already undertook to pay mid-year and year-end bonuses to their
No, the Court held that petitioner is still obliged to pay the 13 th month pay aside from the bonuses
alleged. The Court rationalized that the bonuses is a contractual obligation and the 13 th month pay is that
of law. Moreover, in the agreement, the petitioner undertook to grant said bonuses to the employees
depending on the profitability of the operation hence the only question left to determine therefrom is the
amount of bonus to be given. If however there was no profit, then they are not obliged to pay said
bonuses. The 13th month pay is mandatory to those employees receiving salaries below P1000 and the
bonus are to those in the rank-and-file of the company. The Court further held that the law included a
proviso on non-diminution of existing benefits accorded the employees for if otherwise, it would defeat the
very intent of the law in providing for means of compensation and cope with the problems arising in the


NFSW vs. Ovejera,

GR L-59743 May 31, 1982

Herein is a petition for prohibition praying to annul the decision of the labor arbiter Ethelwoldo
Ovejera in declaring illegal the strike of the National Federation of Sugar Workers at the Central Azucarera
de la Carlota and to restrain the implementation thereof. NFSW, having based their action through the
Marcopper decision, renewed its demand of 13 th month pay from the CAC under PD 851 in addition to
Christmas, milling and amelioration bonuses being enjoyed by the employees. The CAC refused and the
labor arbiter declared the strike conducted by the NFSW illegal and did not pronounce any decision as to
their demands prompting the latter to file said petition.
Whether or not the NFSW members are entitled to 13 th month pay in addition to Christmas, milling
and amelioration bonuses, the aggregate of which far exceeds the 13th month pay prayed for.
No, the Court held that the law aims to grant relief to workers who were not receiving such kind of
benefit from their employees. The said law did not intend to provide yet another burden or double the
burden unto the employers who are already paying their employees their due 13 th month pay. The fact
that there is actual payment of said bonus or benefit regardless of the source of its performance such as
pure generosity, compliance to law or the agreement between the parties, it is sufficient in the purview of
the law.

Kamaya Point Hotel vs. NLRC,
GR 75289
August 31, 1989

Kamaya Point Hotel suffered losses and had to close its operations sometime in 1984. The hotel
wasnt able to recuperate from the undertaking it went into when it ceased operations in order to
transform its premises into a training center for Libyan scholars which they terminated occupation therein
few months after. The employees of the Hotel, due to the retrenchment and subsequent closing of the
establishment, filed a complaint for illegal suspension, violation of the CBA and non-payment of 14 th
month pay, a bonus given by the hotel depending on the profitability of the business before the Libyans
occupied their premises. The labor arbiter granted the complaint and ordered herein petitioner to pay the
claims and on appeal, the NLRC set aside the other money claims but sustained the 14 th month pay. The
petitioner now comes to this court for redress.
Whether or not respondent employees are entitled to 14 th month pay from the employer
considering that they were once given such benefit.
No, the Court held that there is no law mandating employers to provide for such benefit. The Court
further classified said 14th month pay as a gratuitous act on the part of the employer which as established
is dependent on the profitability of the hotel at that time. And since it is gratuitous in nature, the recipient
may not compel his giver to give the same and likewise, the law is not prepared to compel an employer,
who by its generosity gave their employees added bonus and compensation, to pay said bonus without
any law or agreement as basis thereof.

Metropolitan Bank and Trust Company Employees Union vs. NLRC,
GR 102636
September 10, 1993

Herein is a petition for certiorari on the decision of the NLRC which reversed the decision of the
Labor Arbiter ordering the petitioner bank to restore the wage difference of P900 enjoyed by herein
respondents over non-regular employees. The dispute arose from the implementation of petitioner bank
of the wage increase pursuant to RA 6727 mandating an increase of P25 per day for certain employees in
the private sector which as respondents alleged created a distortion that would subsequently require an
adjustment under the law in the wages of the private sectors various groups of employees.
The bank, in complying with the said law, provided for a P25 per day increase, or P750 a month, to
its probationary employees and to those who had been promoted to regular employees but are receiving
less than P100. The bank however did not increase the regular employees who are receiving more than
P100 a day and the recipients of the P900 CBA increase.
Whether or not the implementation by the bank of the wage increase pursuant to RA 6727 created
a wage distortion among its employees.
Yes, the Court held that as observed by the members of the NLRC there is a wage distortion
created although the extent of the distortion is questioned as to warrant the adoption of correction
measures required by law. The Court stated that the intention of the agreeing parties are to be taken into
consideration as well in consonance to the mandate of the law which is for the promotion of labor and that
all doubts as regards the same are to be resolved in favor of labor.