Plastic Town Center Corporation

v.
NLRC and
Nagkakaisang Lakas
ng Manggagawa (NLM)
G.R. No. 81176, April 19, 1989
Petitioner
Plastic Town Center Corporation

Employer

2
Respondents
NLRC and Nagkakaisang Lakas ng Manggagawa
(NLM) - Katipunan

Labor Union of the

employees

3
Facts
of the Case
#
1

4
 Facts
On September 7, 1984, respondent
(Nagkakaisang Lakas ng Manggagawa
(NLM)-Katipunan) filed a complaint against
petitioner Plastic Town Center Corporation
with:
violation of Wage Order No. 5, by crediting
the P1.00 per day increase in the CBA as part
of the compliance with said Wage Order No.
5; and

unfair labor practice thru violation of the CBA

by giving only twenty-six (26) days pay
instead of thirty (30) days equivalent to one
(1) month as gratuity pay to resigning 5
 Facts
In the CBA, it was provided that:
Section 1 The company agrees to
grant permanent/regular rank and file
workers covered by this Agreement
who have rendered at least one year of
continuous service, across-the-board
wage increased as follows:

a. Effective 1 July, 1983 P1.00 per

worked day;

b. Effective 1 July, 1984 P1.00 per

worked day;
6
 Facts
In the CBA, it was provided that:
Section 2: Agrees to grant a gratuity pay to
the resigning employee or laborer as follows

25 Years = 1 Month Salary

6 10 Years = 2 Months Salary
11 15 Years = 4 Months Salary
16 20 Years = 6 Months Salary
21 Above Years = 12 Months Salary

7
 Facts
In the CBA, it was provided that:
Section 3 It is agreed and understood by
the parties herein that the aforementioned
increase in pay shall be credited against
future allowances or wage orders hereinafter
implemented or enforced by virtue of Letters
of Instructions, Decrees and other labor
legislation.

8
 Facts
Plastic Town Center Corporation maintained
that under the principle of fair days wage
for fair days labor, gratuity pay should be
computed on the basis of 26 days for one
month salary considering that the
employees are daily paid.

Labor Arbiter: Ruled in favor of NLM Union.

As daily wage earner, there would be no
instance that the worker would work for 30
days a month since work does not include
Sunday or rest days.
9
 Facts
NLRC: Reversed the decision of Labor
Arbiter and held that PTC should grant
gratuity pay equivalent of thirty days
salary.

10
Issues
of the
#
2
Case

11
Issues

Whether
Whether or or not
not the
thesalary
salaryincrease
increaseononMay
May
and
andJune
Juneinincompliance
compliancewith
withWage
WageOrder
Orderno.
no.44
and
and55respectively,
respectively,represents
representsthethecompliance
compliance
for
forthe
thesection
section33ofofCBA
CBAononJuly.
July.

Whether
Whether oror not
not the
the use
use of
of 26
26 days
days inin
computing
computing gratuity
gratuity pay
pay by
by the
the petitioner
petitioner
is
is valid.
valid.

12
 Issue 1: Salary Increases
There were actually 3 schedules of
increases, namely:
Wage Order No. 4 (May 1, 1984);
Wage Order No. 5 (June 16, 1984); and
Collective Bargaining Agreement (July 1,
1984)

Section 3 of the CBA states that:

CBA granted increases shall be credited
against future allowances or wage
orders. Thus, the CBA increase to be
effected on duly 1, 1984 can not be
retroactively applied to mean compliance
with Wage Order No. 4 which took effect on
13
 Issue 2: Gratuity Pay
Computation
Gratuity pay is:
Morenos Philippine Law Dictionary:
Something given freely, or without
recompense; a gift; something voluntarily
given in return for a favor or services; a
bounty; a tip.
Pirovano v. De la Rama Steamship Co.:
That paid to the beneficiary for past services
rendered purely out of the generosity of the
giver or grantor.

Meaning Gratuity Pay is not computed based

on the actual number of days worked over the
period of years. It is for the employer to reward
14
 Issue 2: Gratuity Pay
Computation
CIVIL CODE, Article 1702:
In case of doubt, all labor legislation and
all labor contracts shall be construed in
favor of the safety and decent living for
the laborer.

The Civil Code provides that when months

are not designated by name, a month is
understood to be thirty (30) days.

15
 Decision
The petition was DISMISSED for lack
of merit.
The employer will have to grant
additional salary increase in
compliance with CBA Section 1.
The employer will use 30 days in
computing the Gratuity Pay.

16
Thank You!
Do you have any questions?