Republic of the Philippines

Supreme Court
Manila

SECOND DIVISION

CENTRAL AZUCARERA
DE TARLAC,
Petitioner,



- versus -




CENTRAL AZUCARERA
DE TARLAC LABOR UNION-NLU,
Respondent.

GR No !""#$#

Present:

CARPIO, J.,
Chairperson,
NACHURA,
PERA!A,
A"A#, $nd
%EN#O&A, JJ.

Pro'ul($ted:

)ul* +,, +-.-

x------------------------------------------------------------------------------------x


DECISION

NAC%URA, J&



"efore the Court is $ petition for revie/ on certiorari under Rule 01 of the
Rules of Court, $ss$ilin( the #ecision
2.3
d$ted %$* +4, +--5, $nd the
Resolution
2+3
d$ted )ul* +4, +--5 of the Court of Appe$ls 6CA7 in CA-8.R. 9P No.
.-,,1:.

!he f$ctu$l $ntecedents of the c$se $re $s follo/s:

Petitioner is $ do'estic corpor$tion en($(ed in the business of su($r
'$nuf$cturin(, /hile respondent is $ le(iti'$te l$bor or($ni;$tion /hich serves $s
the e<clusive b$r($inin( represent$tive of petitioner=s r$n>-$nd-file e'plo*ees.
!he controvers* ste's fro' the interpret$tion of the ter' ?b$sic p$*,@ essenti$l in
the co'put$tion of the .A
th
-'onth p$*.

!he f$cts of this c$se $re not in dispute. In co'pli$nce /ith Presidenti$l
#ecree 6P.#.7 No. 41., petitioner (r$nted its e'plo*ees the '$nd$tor* thirteenth
6.A
th
7 - 'onth p$* since .5:1. !he for'ul$ used b* petitioner in co'putin( the
.A
th
-'onth p$* /$s: !ot$l "$sic Annu$l 9$l$r* divided b* t/elve 6.+7. Included
in petitioner=s co'put$tion of the !ot$l "$sic Annu$l 9$l$r* /ere the follo/in(:
b$sic 'onthl* s$l$r*B first ei(ht 647 hours overti'e p$* on 9und$* $nd
le($lCspeci$l holid$*B ni(ht pre'iu' p$*B $nd v$c$tion $nd sic> le$ves for e$ch
*e$r. !hrou(hout the *e$rs, petitioner used this co'put$tion until +--,.
2A3

On Nove'ber ,, +--0, respondent st$(ed $ stri>e. #urin( the pendenc* of
the stri>e, petitioner decl$red $ te'por$r* cess$tion of oper$tions. In #ece'ber
+--1, $ll the stri>in( union 'e'bers /ere $llo/ed to return to /or>.
9ubseDuentl*, petitioner decl$red $nother te'por$r* cess$tion of oper$tions for the
'onths of April $nd %$* +--,. !he suspension of oper$tion /$s lifted on )une
+--,, but the r$n>-$nd-file e'plo*ees /ere $llo/ed to report for /or> on $ fifteen
6.17 d$*-per-'onth rot$tion b$sis th$t l$sted until 9epte'ber +--,. In #ece'ber
+--,, petitioner ($ve the e'plo*ees their .A
th
-'onth p$* b$sed on the e'plo*ee=s
tot$l e$rnin(s durin( the *e$r divided b* .+.
203

Respondent obEected to this co'put$tion. It $verred th$t petitioner did not
$dhere to the usu$l co'put$tion of the .A
th
-'onth p$*. It cl$i'ed th$t the divisor
should h$ve been ei(ht 647 inste$d of .+, bec$use the e'plo*ees /or>ed for onl* 4
'onths in +--,. It li>e/ise $sserted th$t petitioner did not observe the co'p$n*
pr$ctice of (ivin( its e'plo*ees the (u$r$nteed $'ount eDuiv$lent to their one
'onth p$*, in inst$nces /here the co'puted .A
th
-'onth p$* /$s less th$n their
b$sic 'onthl* p$*.
213

Petitioner $nd respondent tried to thresh out their differences in $ccord$nce
/ith the (riev$nce procedure $s provided in their collective b$r($inin( $(ree'ent.
#urin( the (riev$nce 'eetin(, the represent$tive of petitioner e<pl$ined th$t the
ch$n(e in the co'put$tion of the .A
th
-'onth p$* /$s intended to rectif* $n error in
the co'put$tion, p$rticul$rl* the concept of b$sic p$* /hich should h$ve included
onl* the b$sic 'onthl* p$* of the e'plo*ees.
2,3

For f$ilure of the p$rties to $rrive $t $ settle'ent, respondent $pplied for
preventive 'edi$tion before the N$tion$l Concili$tion $nd %edi$tion "o$rd.
Ho/ever, despite four 607 concili$tor* 'eetin(s, the p$rties still f$iled to settle the
dispute. On %$rch +5, +--:, respondent filed $ co'pl$int $($inst petitioner for
'one* cl$i's b$sed on the $lle(ed di'inution of benefitsCerroneous co'put$tion
of .A
th
-'onth p$* before the Re(ion$l Arbitr$tion "r$nch of the N$tion$l $bor
Rel$tions Co''ission 6NRC7.
2:3
On October A., +--:, the $bor Arbiter rendered $ #ecision
243
dis'issin( the
co'pl$int $nd decl$rin( th$t the petitioner h$d the ri(ht to rectif* the error in the
co'put$tion of the .A
th
-'onth p$* of its e'plo*ees.
253
!he fallo of the #ecision
re$ds:

'%ERE(ORE, premi)e) *on)i+ere+, t,e *omplaint -ile+ ./ t,e
*omplainant) a0ain)t t,e re)pon+ent) ),oul+ .e DISMISSED 1it, pre2u+i*e
-or utter la*3 o- merit

SO ORDERED
2.-3


Respondents filed $n $ppe$l. On Au(ust .0, +--4, the NRC rendered $
#ecision
2..3
reversin( the $bor Arbiter. !he dispositive portion of the #ecision
re$ds:

'%ERE(ORE, the decision $ppe$led is reversed $nd set $side $nd
respondent-$ppellee Centr$l A;uc$rer$ de !$rl$c is hereb* ordered to $dhere to its
est$blished pr$ctice of (r$ntin( .A
th
2-3 'onth p$* on the b$sis of (ross $nnu$l
b$sic /hich includes b$sic p$*, pre'iu' p$* for /or> in rest d$*s $nd speci$l
holid$*s, ni(ht shift differenti$l $nd p$id v$c$tion $nd sic> le$ves for e$ch *e$r.

Addition$ll*, respondent-$ppellee is ordered to observe the (u$r$nteed
one2-3'onth p$* b* /$* of .A
th
'onth p$*.

SO ORDERED.
2.+3


Petitioner filed $ 'otion for reconsider$tion. Ho/ever, the s$'e /$s denied
in $ Resolution d$ted Nove'ber +:, +--4. Petitioner then filed $ petition
for certiorari under Rule ,1 of the Rules of Court before the CA.
2.A3
On %$* +4, +--5, the CA rendered $ #ecision
2.03
dis'issin( the petition, $nd
$ffir'in( the decision $nd resolution of the NRC, viz.:

'%ERE(ORE, the fore(oin( considered, the petition is
hereb* DISMISSED $nd the $ss$iled Au(ust .0, +--4 #ecision $nd Nove'ber
+:, +--4 Resolution of the NRC, $re hereb*A((IRMED. No costs.

9O OR#ERE#.
2.13


A((rieved, petitioner filed the inst$nt petition, $lle(in( th$t the CA
co''itted $ reversible error in $ffir'in( the #ecision of the NRC, $nd pr$*in(
th$t the #ecision of the $bor Arbiter be reinst$ted.

!he petition is denied for l$c> of 'erit.

!he .A
th
-'onth p$* '$nd$ted b* Presidenti$l #ecree 6P.#.7 No. 41.
represents $n $ddition$l inco'e b$sed on /$(e but not p$rt of the /$(e. It is
eDuiv$lent to one-t/elfth 6.C.+7 of the tot$l b$sic s$l$r* e$rned b* $n e'plo*ee
/ithin $ c$lend$r *e$r. All r$n>-$nd-file e'plo*ees, re($rdless of their desi(n$tion
or e'plo*'ent st$tus $nd irrespective of the 'ethod b* /hich their /$(es $re
p$id, $re entitled to this benefit, provided th$t the* h$ve /or>ed for $t le$st one
'onth durin( the c$lend$r *e$r. If the e'plo*ee /or>ed for onl* $ portion of the
*e$r, the .A
th
-'onth p$* is co'puted pro r$t$.
2.,3

Petitioner $r(ues th$t there /$s $n error in the co'put$tion of the .A
th
-'onth
p$* of its e'plo*ees $s $ result of its 'ist$>e in i'ple'entin( P.#. No. 41., $n
error th$t /$s discovered b* the '$n$(e'ent onl* /hen respondent r$ised
$ Duestion concernin( the co'put$tion of the e'plo*ees=
.A
th
-'onth p$* for +--,. Ad'ittedl*, it /$s $n error th$t /$s repe$tedl*
co''itted for $l'ost thirt* 6A-7 *e$rs. Petitioner insists th$t the len(th of ti'e
durin( /hich $n e'plo*er h$s perfor'ed $ cert$in $ct benefici$l to the e'plo*ees,
does not prove th$t such $n $ct /$s not done in error. It '$int$ins th$t for the
cl$i' of 'ist$>e to be ne($ted, there 'ust be $ cle$r sho/in( th$t the e'plo*er
h$d freel*, volunt$ril*, $nd continuousl* perfor'ed the $ct, >no/in( th$t he is
under no obli($tion to do so. Petitioner $sserts th$t such volunt$riness /$s $bsent
in this c$se.
2.:3

!he Rules $nd Re(ul$tions I'ple'entin( P.#. No. 41., pro'ul($ted on
#ece'ber ++, .5:1, defines .A
th
-'onth p$* $nd b$sic s$l$r* $s follo/s:

9ec. +. Definition of certain terms. - As used in this issu$nce:

6$7 "Thirteenth-month pay" sh$ll 'e$n one t/elfth 6.C.+7 of the b$sic
s$l$r* of $n e'plo*ee /ithin $ c$lend$r *e$rB

6b7 "Basic salary" sh$ll include $ll re'uner$tions or e$rnin(s p$id b*
$n e'plo*er to $n e'plo*ee for services rendered but '$* not include cost-of-
livin( $llo/$nces (r$nted pursu$nt to Presidenti$l #ecree No. 1+1 or etter of
Instructions No. .:0, profit-sh$rin( p$*'ents, $nd $ll $llo/$nces $nd 'onet$r*
benefits /hich $re not considered or inte(r$ted $s p$rt of the re(ul$r or b$sic
s$l$r* of the e'plo*ee $t the ti'e of the pro'ul($tion of the #ecree on #ece'ber
.,, .5:1.

On )$nu$r* .,, .5:,, the 9upple'ent$r* Rules $nd Re(ul$tions
I'ple'entin( P.#. No. 41. /$s issued. !he 9upple'ent$r* Rules cl$rifies
th$t overti'e p$*, e$rnin(s, $nd other re'uner$tion th$t $re not p$rt of the b$sic
s$l$r* sh$ll not be included in the co'put$tion of the .A
th
-'onth p$*.
On Nove'ber .,, .54:, the Revised 8uidelines on the I'ple'ent$tion of the
.A
th
-%onth P$* $/ /$s issued. 9i(nific$ntl*, under this Revised 8uidelines, it
/$s specific$ll* st$ted th$t the 'ini'u' .A
th
-'onth p$* reDuired b* l$/ sh$ll not
be less th$n one-t/elfth 6.C.+7 of the tot$l b$sic s$l$r* e$rned b* $n e'plo*ee
/ithin $ c$lend$r *e$r.

Further'ore, the ter' ?b$sic s$l$r*@ of $n e'plo*ee for the purpose of
co'putin( the .A
th
-'onth p$* /$s interpreted to include $ll re'uner$tion or
e$rnin(s p$id b* the e'plo*er for services rendered, but does not include
$llo/$nces $nd 'onet$r* benefits /hich $re not inte(r$ted $s p$rt of the re(ul$r or
b$sic s$l$r*, such $s the c$sh eDuiv$lent of unused v$c$tion $nd sic> le$ve credits,
overti'e, pre'iu', ni(ht differenti$l $nd holid$* p$*, $nd cost-of-livin(
$llo/$nces. Ho/ever, these s$l$r*-rel$ted benefits should be included $s p$rt of
the b$sic s$l$r* in the co'put$tion of the .A
th
-'onth p$* if, b* individu$l or
collective $(ree'ent, co'p$n* pr$ctice or polic*, the s$'e $re tre$ted $s p$rt of
the b$sic s$l$r* of the e'plo*ees.

"$sed on the fore(oin(, it is cle$r th$t there could h$ve no
erroneous interpret$tion or $pplic$tion of /h$t is included in the ter' ?b$sic
s$l$r*@ for purposes of co'putin( the .A
th
-'onth p$* of e'plo*ees. Fro' the
inception of P.#. No. 41. on #ece'ber .,, .5:1, cle$r-cut $d'inistr$tive
(uidelines h$ve been issued to insure unifor'it* in the interpret$tion, $pplic$tion,
$nd enforce'ent of the provisions of P.#. No. 41. $nd its i'ple'entin(
re(ul$tions.

As correctl* ruled b* the CA, the pr$ctice of petitioner in (ivin( .A
th
-'onth
p$* b$sed on the e'plo*ees= (ross $nnu$l e$rnin(s /hich included the b$sic
'onthl* s$l$r*, pre'iu' p$* for /or> on rest d$*s $nd speci$l holid$*s, ni(ht
shift differenti$l p$* $nd holid$* p$* continued for $l'ost thirt* 6A-7 *e$rs $nd h$s
ripened into $ co'p$n* polic* or pr$ctice /hich c$nnot be unil$ter$ll* /ithdr$/n.

Article .-- of the $bor Code, other/ise >no/n $s the Non-#i'inution
Rule, '$nd$tes th$t benefits (iven to e'plo*ees c$nnot be t$>en b$c> or reduced
unil$ter$ll* b* the e'plo*er bec$use the benefit h$s beco'e p$rt of the
e'plo*'ent contr$ct, /ritten or un/ritten.
2.43
!he rule $($inst di'inution of
benefits $pplies if it is sho/n th$t the (r$nt of the benefit is b$sed on $n e<press
polic* or h$s ripened into $ pr$ctice over $ lon( period of ti'e $nd th$t the pr$ctice
is consistent $nd deliber$te. Nevertheless, the rule /ill not $ppl* if the pr$ctice is
due to error in the construction or $pplic$tion of $ doubtful or difficult Duestion of
l$/. "ut even in c$ses of error, it should be sho/n th$t the correction is done soon
$fter discover* of the error.
2.53

!he $r(u'ent of petitioner th$t the (r$nt of the benefit /$s not volunt$r*
$nd /$s due to error in the interpret$tion of /h$t is included in the b$sic s$l$r*
deserves sc$nt consider$tion. No doubtful or difficult Duestion of l$/ is involved in
this c$se. !he (uidelines set b* the l$/ $re not difficult to decipher. !he
volunt$riness of the (r$nt of the benefit /$s '$nifested b* the nu'ber of *e$rs the
e'plo*er h$d p$id the benefit to its e'plo*ees. Petitioner onl* ch$n(ed the
for'ul$ in the co'put$tion of the .A
th
-'onth p$* $fter $l'ost A- *e$rs $nd onl*
$fter the dispute bet/een the '$n$(e'ent $nd e'plo*ees erupted. !his $ct of
petitioner in ch$n(in( the for'ul$ $t this ti'e c$nnot be s$nctioned, $s it indic$tes
$ b$d(e of b$d f$ith.

Further'ore, petitioner c$nnot use the $r(u'ent th$t it is sufferin( fro'
fin$nci$l losses to cl$i' e<e'ption fro' the cover$(e of the l$/ on .A
th
-'onth
p$*, or to sp$re it fro' its erroneous unil$ter$l co'put$tion of the .A
th
-'onth p$*
of its e'plo*ees. Under 9ection : of the Rules $nd Re(ul$tions I'ple'entin( P.#.
No. 41., distressed e'plo*ers sh$ll Du$lif* for e<e'ption fro' the reDuire'ent of
the #ecree onl* upon prior $uthori;$tion b* the 9ecret$r* of $bor.
2+-3
In this c$se,
no such prior $uthori;$tion h$s been obt$ined b* petitionerB thus, it is not entitled
to cl$i' such e<e'ption.

'%ERE(ORE, the #ecision d$ted %$* +4, +--5 $nd the Resolution d$ted
)ul* +4, +--5 of the Court of Appe$ls in CA-8.R. 9P No. .-,,1: $re
hereb* A((IRMED. Costs $($inst petitioner.

SO ORDERED.


ANTONIO EDUARDO B NAC%URA
Associ$te )ustice


'E CONCUR&


ANTONIO T CAR4IO
Associ$te )ustice
Ch$irperson




DIOSDADO M 4ERALTA
Associ$te )ustice
ROBERTO A ABAD
Associ$te )ustice





5OSE CATRAL MENDOZA
Associ$te )ustice



A T T E S T A T I O N

I $ttest th$t the conclusions in the $bove #ecision h$d been re$ched in
consult$tion before the c$se /$s $ssi(ned to the /riter of the opinion of the
Court=s #ivision.



ANTONIO T CAR4IO
Associ$te )ustice
Ch$irperson, 9econd #ivision



C E R T I ( I C A T I O N

Pursu$nt to 9ection .A, Article GIII of the Constitution $nd the #ivision
Ch$irpersonHs Attest$tion, I certif* th$t the conclusions in the $bove #ecision h$d
been re$ched in consult$tion before the c$se /$s $ssi(ned to the /riter of the
opinion of the Court=s #ivision.



RENATO C CORONA
Chief )ustice
2.3
Penned b* Associ$te )ustice )osefin$ 8uev$r$-9$lon($, /ith Associ$te )ustices Arc$n(elit$ %. Ro'ill$-
onto> $nd Ro'eo F. "$r;$, concurrin(B rollo, pp. A+-0+.
2+3
Id. $t 00-0:.
2A3
Id. $t AA.
203
Id. $t A0.
213
Id. $t A0B :0.
2,3
Id. $t A0.
2:3
Id. $t A0-A1.
243
Penned b* $bor Arbiter %$ri$no . "$ctinB id. $t 1.-,0.
253
Id. $t A1.
2.-3
Id. $t ,0.
2..3
Penned b* Co''issioner Is$bel 8. P$n($nib$n-Orti(uerr$, /ith Presidin( Co''issioner "enedicto R.
P$l$col $nd Nieves Giv$r-de C$stro, concurrin(B id. $t :+-4:.
2.+3
Id. $t 4,-4:.
2.A3
Id. $t A1-A,.
2.03
9upr$ note ..
2.13
Rollo, p. 0+.
2.,3
A;ucen$, )r., Ces$rio Alvero, Everyones Laor Co!e, +--. edition, p. :5.
2.:3
Rollo, pp. ++-+0.
2.43
"hilippine #irlines, $nc. v. %LRC, A+4 Phil. 4+, 6.55,7.
2.53
9upr$ note .,, $t :4.
2+-3
9ee Dentech &an'fact'rin( Corporation v. %LRC, +10 Phil. ,-A 6.5457.