Millares vs.

National Labor Relations Commission, 305 SCRA 500 (1999)

Posted by Pius Morados on November 15, 2011
(Labor Standards – wages, customary facilities)

Facts: Article 97, par. (f), of the Labor Code defined “wage” as 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, or other method of calculating the same, which is payable by an employer to
an employee under a written or unwritten contract of employment for work done or to be done, or for
services rendered or to be rendered and includes the fair and reasonable value, as determined by the
Secretary of Labor, of board, lodging, or other facilities customarily furnished by the employer to the
employee.

116 employees of Paper Industries Corporation of the Philippines (PICOP) in Bislig, Surigao del Sur were
terminated under a retrenchment program as a solution to a major financial setback. Aside from their
one month basic pay, petitioners believe that the allowances they allegedly regularly received on a
monthly basis should have also been included in the computation of their separation.

PICOP grants the following allowances:

Staff allowance/managers allowance to those who live in rented houses near the mill site which ceases
whenever a vacancy occurs in the company’s free housing facilities.
Transportation allowance in the form of advances for actual transportation expenses subject to
liquidation is given to key officers and managers who use their own vehicles in the performance of their
duties. This privilege is discontinued when the conditions no longer obtain.
Bislig allowance is given to managers and officers on account of the hostile environment prevailing
therein. Once the recipient is transferred elsewhere, the allowance ceases.
Applying Art. 97, par (f) of the Labor Code which defines “wage”, the Executive Labor Arbiter opined that
the subject allowances, being customarily furnished by respondent PICOP and regularly received by
petitioners, formed part of the latter’s wage.

However, the NLRC decreed that the allowances did not form part of the salary base used in computing
separation pay since the same were contingency-based.

Issue: Whether or not the allowances in question are considered facilities customarily furnished.

Held: No. “Customary” is founded on long established and constant practice connoting regularity. The
receipt of allowance on a monthly basis does not ipso facto characterize it as regular and forming part of
salary because the nature of the grant is a factor worth considering.

The subject allowances were temporarily, not regularly received by petitioners because once the
conditions for the availment ceased to exist, the allowance reached the cutoff point. The petitioners’
continuous enjoyment of the disputed allowances was based on contingencies the occurrence of which
wrote finis to such enjoyment.

19. Mercidar Fishing Corporation vs. NLRC, G.R. No. 112574. October 8, 1998; 297 SCRA 440
Posted by Pius Morados on November 10, 2011
(Labor Standards – Fishermen are not field personnels, Article 82)
Facts: Private respondent employed as a “bodegero” or ship’s quartermaster complained of being
constructively dismissed by petitioner corporation when the latter refused him assignments aboard its
boats after he had reported to work. The Larbor Arbiter rendered a decision ordering petitioner
corporation to reinstate complainant with back wages, pay him his 13th month pay and incentive leave.
Petitioner claims that it cannot be held liable for service incentive leave pay by fishermen in its employ
as the latter supposedly are “field personnel” and thus not entitled to such pay under the Labor Code.

Article 82 of the Labor Code provides among others that “field personnel” shall refer to non-agricultural
employees who regularly perform their duties away from the principal place of business or branch of
office of the employer and whose actual hours of work in the field cannot be determined with
reasonable certainty.

Issue: WON fishermen are considered field personnel.

Held: No. Although fishermen perform non-agricultural work away from their employer’s business
offices, the fact remains that throughout the duration of their work they are under the effective control
and supervision of the employer through the vessel’s patron or master.