G.R. No.

82511 March 3, 1992

GLOBE-MACKAY CABLE AND RADIO CORPORATION, petitioner,
vs.
NATIONAL LABOR RELATION COMMIION a!" IMELDA ALA#AR,
respondents.
Castillo, Laman, Tan & Pantaleon for petitioner.
Gerardo S. Alansalon for private respondent.

ROMERO, J.:
For private respondent Imelda L. Salazar, it would seem that her close association
with Delfin Saldivar would mean the loss of her job. In May !"#, private respondent
was employed by $lobe%Mac&ay 'able and (adio 'orporation )$M'(* as +eneral
systems analyst. ,lso employed by petitioner as mana+er for technical operations-
support was Delfin Saldivar with whom private respondent was alle+edly very close.
Sometime in !"., petitioner $M'(, prompted by reports that company e/uipment
and spare parts worth thousands of dollars under the custody of Saldivar were
missin+, caused the investi+ation of the latter-s activities. 0he report dated September
#1, !". prepared by the company-s internal auditor, Mr. ,+ustin Maramara,
indicated that Saldivar had entered into a partnership styled 'oncave 'ommercial
and Industrial 'ompany with (ichard ,. 2ambao, owner and mana+er of 3lecon
3n+ineerin+ Services )3lecon*, a supplier of petitioner often recommended by
Saldivar. 0he report also disclosed that Saldivar had ta&en petitioner-s missin+
Fedders airconditionin+ unit for his own personal use without authorization and also
connived with 2ambao to defraud petitioner of its property. 0he airconditioner was
recovered only after petitioner $M'( filed an action for replevin a+ainst Saldivar.
1
It li&ewise appeared in the course of Maramara-s investi+ation that Imelda Salazar
violated company re+lations by involvin+ herself in transactions conflictin+ with the
company-s interests. 3vidence showed that she si+ned as a witness to the articles of
partnership between 2ambao and Saldivar. It also appeared that she had full
&nowled+e of the loss and whereabouts of the Fedders airconditioner but failed to
inform her employer.
'onse/uently, in a letter dated 4ctober ", !"., petitioner company placed private
respondent Salazar under preventive suspension for one )* month, effective 4ctober
!, !"., thus +ivin+ her thirty )56* days within which to, e7plain her side. 8ut instead
of submittin+ an e7planations three )5* days later or on 4ctober #, !". private
respondent filed a complaint a+ainst petitioner for ille+al suspension, which she
subse/uently amended to include ille+al dismissal, vacation and sic& leave benefits,
5th month pay and dama+es, after petitioner notified her in writin+ that effective
9ovember ", !"., she was considered dismissed :in view of )her* inability to refute
and disprove these findin+s.
2
,fter due hearin+, the Labor ,rbiter in a decision dated ;uly <, !"1, ordered
petitioner company to reinstate private respondent to her former or e/uivalent position
and to pay her full bac&wa+es and other benefits she would have received were it not
for the ille+al dismissal. =etitioner was also ordered to pay private respondent moral
dama+es of =16,666.66.
3
4n appeal, public respondent 9ational Labor (elations, 'ommission in the
/uestioned resolution dated December #!, !"> affirmed the aforesaid decision with
respect to the reinstatement of private respondent but limited the bac&wa+es to a
period of two )#* years and deleted the award for moral dama+es.
$
?ence, this petition assailin+ the Labor 0ribunal for havin+ committed +rave abuse of
discretion in holdin+ that the suspension and subse/uent dismissal of private
respondent were ille+al and in orderin+ her reinstatement with two )#* years-
bac&wa+es.
4n the matter of preventive suspension, we find for petitioner $M'(.
0he inesti+ative findin+s of Mr. Maramara, which pointed to Delfin Saldivar-s acts in
conflict with his position as technical operations mana+er, necessitated immediate
and decisive action on any employee closely, associated with Saldivar. 0he
suspension of Salazar was further impelled by th.e discovery of the missin+ Fedders
airconditionin+ unit inside the apartment private respondent shared with Saldivar.
@nder such circumstances, preventive suspension was the proper remedial recourse
available to the company pendin+ Salazar-s investi+ation. 8y itself, preventive
suspension does, not si+nify that the company has adjud+ed the employee +uilty of
the char+es she was as&ed to answer and e7plain. Such disciplinary measure is
resorted to for the protection of the company-s property pendin+ investi+ation any
alle+ed malfeasance or misfeasance committed by the employee.
5
0hus, it is not correct to conclude that petitioner $M'( had violated Salazar-s ri+ht to
due process when she was promptly suspended. If at all, the fault, lay with private
respondent when she i+nored petitioner-s memorandum of 4ctober ", !". :+ivin+
her ample opportunity to present )her* side to the Mana+ement.: Instead, she went
directly to the Labor Department and filed her complaint for ille+al suspension without
+ivin+ her employer a chance to evaluate her side of the controversy.
8ut while we a+ree with the propriety of Salazar-s preventive suspension, we hold
that her eventual separation from employment was not for cause.
Ahat is the remedy in law to rectify an unlawful dismissal so as to :ma&e whole: the
victim who has not merely lost her job which, under settled ;urisprudence, is a
property ri+ht of which a person is not to be deprived without due process, but also
the compensation that should have accrued to her durin+ the period when she was
unemployedB
,rt. #>! of the Labor 'ode, as amended, providesC
Security of Tenure. D In cases of re+ular employment, the
employer shall not terminate the services of an employee e7cept for
a just cause or when authorized by this 0itle. An employee who is
unjustly dismissed from wor shall !e entitled to reinstatement
without loss of seniority ri"hts and other privile"es and to his full
!acwa"es, inclusive of allowances, and to his other benefits or
their monetary e/uivalent computed from the time his
compensation was withheld from him up to the time of his actual
reinstatement.
%
)3mphasis supplied*
'orollary thereto are the followin+ provisions of the Implementin+ (ules and
(e+ulations of the Labor 'odeC
Sec. #. Security of Tenure. D In cases of re+ular employments, the
employer shall not terminate the services of an employee e7cept for
a just cause as provided in the Labor 'ode or when authorized by
e7istin+ laws.
Sec. 5. #einstatement. D An employee who is unjustly dismissed
from wor shall !y entitled to reinstatement without loss of seniority
ri"hts and to !acwa"es.:
&
)3mphasis supplied*
8efore proceedin+ any furthers, it needs must be recalled that the present
'onstitution has +one further than the !>5 'harter in +uaranteein+ vital social and
economic ri+hts to mar+inalized +roups of society, includin+ labor. $iven the pro%poor
orientation of several articulate 'ommissioners of the 'onstitutional 'ommission of
!"<, it was not surprisin+ that a whole new ,rticle emer+ed on Social ;ustice and
?uman (i+hts desi+ned, amon+ other thin+s, to :protect and enhance the ri+ht of all
the people to human di+nity, reduce social, economic and political ine/ualities, and
remove cultural ine/uities by e/uitably diffusin+ wealth and political power for the
common +ood.: 8 =roof of the priority accorded to labor is that it leads the other areas
of concern in the ,rticle on Social ;ustice, vi$., Labor ran&s ahead of such topics as
,+rarian and 9atural (esources (eform, @rban Land (oform and ?ousin+, ?ealth,
Aomen, (ole and (i+hts of =oople-s 4r+anizations and ?uman (i+hts.
9
0he openin+ para+raphs on Labor states
0he State shall afford full protection to la!or, local and overseas,
or+anized and unor+anized, and promote full employment and
e/uality of employment opportunities for all.
It shall +uarantee the ri+hts of all wor&ers to self%or+anization,
collective bar+ainin+ and ne+otiations, and peaceful concerted
activities, includin+ the ri+ht to stri&e in accordance with law. 0hey
shall be entitled to security of tenure, humane conditions of wor&,
and a livin+ wa+e. 0hey shall also participate in policy and decision%
ma&in+ processes affectin+ their ri+hts and benefits is may be
provided by law.
1'
)3mphasis supplied*
'ompare this with the sole.provision on Labor in the !>5 'onstitution under the
,rticle an Declaration of =rinciples and State =olicies that providesC
Sec. !. 0he state shall afford protection to labor, promote full
employment and e/uality in employment, ensure e/ual wor&
opportunities re+ardless of se7, race, or creed, and re+ulate the
relations between wor&ers and employers. 0he State shall ensure
the ri+hts of wor&ers to self%or+anization, collective bae+ainin+,
security of tenure, and just and humane conditions of wor&. 0he
State may provide for compulsory arbitration.
11
0o be sure, both 'harters reco+nize :security of tenure: as one of the ri+hts of labor
which the State is mandated to protect. 8ut there is no +ainsayin+ the fact that the
intent of the framers of the present 'onstitution was to +ive primacy to the ri+hts of
labor and afford the sector :full protection,: at least +reater protection than heretofore
accorded them, re+ardless of the +eo+raphical location of the wor&ers and whether
they are or+anized or not.
It was then '49'4M 'ommissioner, now ;ustice ?ilario $. Davide, ;r., who
substantially contributed to the present formulation of the protection to labor provision
and proposed that the same be incorporated in the ,rticle on Social ;ustice and not
just in the ,rticle on Declaration of =rinciples and State =olicies :in the li+ht of the
special importance that we are +ivin+ now to social justice and the necessity of
emphasizin+ the scope and role of social justice in national development.:
12
If we have ta&en pains to delve into the bac&+round of the labor provisions in our
'onstitution and the Labor 'ode, it is but to stress that the ri+ht of an employee not to
be dismissed from his job e7cept for a just or authorized cause provided by law has
assumed +reater importance under the !"> 'onstitution with the sin+ular
prominence labor enjoys under the article on Social ;ustice. ,nd this transcendent
policy has been translated into law in the Labor 'ode. @nder its terms, where a case
of unlawful or unauthorized dismissal has been proved by the a++rieved employee, or
on the other hand, the employer whose duty it is to prove the lawfulness or justness
of his act of dismissal has failed to do so, then the remedies provided in ,rticle #>!
should find, application. 'onsonant with this liberalized stance vis%a%vis labor, the
le+islature even went further by enactin+ (epublic ,ct 9o. <>1 which too& effect on
March #, !"! that amended said ,rticle to remove any possible ambi+uity that
jurisprudence may have +enerated which watered down the constitutional intent to
+rant to labor :full protection.:
13
0o +o bac& to the instant case, there bein+ no evidence to show an authorized, much
less a le+al, cause for the dismissal of private respondent, she had every ri+ht, not
only to be entitled to reinstatement, but ay well, to full bac&wa+es.:
1$
0he intendment of the law in prescribin+ the twin remedies of reinstatement and
payment of bac&wa+es is, in the former, to restore the dismissed employee to her
status before she lost her job, for the dictionary meanin+ of the word :reinstate: is :to
restore to a state, conditione positions etc. from which one had been removed:
15
and
in the latter, to +ive her bac& the income lost durin+ the period of unemployment. 8oth
remedies, loo&in+ to the past, would perforce ma&e her :whole.:
Sadly, the avowed intent of the law has at times been thwarted when reinstatement
has not been forthcomin+ and the hapless dismissed employee finds himself on the
outside loo&in+ in.
4ver time, the followin+ reasons have been advanced by the 'ourt for denyin+
reinstatement under the facts of the case and the law applicable theretoE that
reinstatement can no lon+er be effected in view of the lon+ passa+e of time )## years
of liti+ation* or because of the realities of the situationE
1%
or that it would be :inimical
to the employer-s interestE :
1&
or that reinstatement may no lon+er be feasibleE
18
or,
that it will not serve the best interests of the parties involvedE
19
or that the company
would be prejudiced by the wor&ers- continued employmentE
2'
or that it will not serve
any prudent purpose as when supervenin+ facts have transpired which ma&e
e7ecution on that score unjust or ine/uitable
21
or, to an increasin+ e7tent, due to the
resultant atmosphere of :antipathy and anta+onism: or :strained relations: or
:irretrievable estran+ement: between the employer and the employee.
22
In lieu of reinstatement, the 'ourt has variously ordered the payment of bac&wa+es
and separation pay
23
or solely separation pay.
2$
In the case at bar, the law is on the side of private respondent. In the first place the
wordin+ of the Labor 'ode is clear and unambi+uousC :,n employee who is unjustly
dismissed from wor& shall be entitled to reinstatement. . . . and to his full
bac&wa+es. . . .:
25
@nder the principlesof statutory construction, if a statute is clears
plain and free from ambi+uity, it must be +iven its literal meanin+ and applied without
attempted interpretation. 0his plain%meanin+ rule or ver!a le"is derived from the
ma7im inde& animi sermo est )speech is the inde7 of intention* rests on the valid
presumption that the words employed by, the le+islature in a statute correctly e7press
its intent or will and preclude the court from construin+ it differently.
2%
0he le+islature
is presumed to &now the meanin+ of the words, toChave used words advisedly, and to
have e7pressed its intent by the use of such words as are found in the statute.
2&

'er!a le"is non est recedendum, or from the words of a statute there should be no
departure. 9either does the provision admit of any /ualification. If in the wisdom of
the 'ourt, there may be a +round or +rounds for non%application of the above%cited
provision, this should be by way of e7ception, such as when the reinstatement may
be inadmissible due to ensuin+ strained relations between the employer and the
employee.
In such cases, it should be proved that the employee concerned occupies a position
where he enjoys the trust and confidence of his employerE and that it is li&ely that if
reinstated, an atmosphere of antipathy and anta+onism may be +enerated as to
adversely affect the efficiency and productivity of the employee concerned.
, few e7amples, will suffice to illustrate the 'ourt-s application of the above principlesC
where the employee is a Fice%=resident for Mar&etin+ and as such, enjoys the full
trust and confidence of top mana+ementE
28
or is the 4fficer%In%'har+e of the
e7tension office of the ban& where he wor&sE
29
or is an or+anizer of a union who was
in a position to sabota+e the union-s efforts to or+anize the wor&ers in commercial
and industrial establishmentsE
3'
or is a warehouseman of a non%profit or+anization
whose primary purpose is to facilitate and ma7imize voluntary +ifts. by forei+n
individuals and or+anizations to the =hilippinesE
31
or is a mana+er of its 3ner+y
3/uipment Sales.
32
4bviously, the principle of :strained relations: cannot be applied indiscriminately.
4therwisey reinstatement can never be possible simply because some hostility is
invariably en+endered between the parties as a result of liti+ation. 0hat is human
nature.
33
8esides, no strained relations should arise from a valid and le+al act of assertin+
one-s ri+htE otherwise an employee who shall assert his ri+ht could be easily
separated from the service, by merely payin+ his separation pay on the prete7t that
his relationship with his employer had already become strained.
3$
?ere, it has not been proved that the position of private respondent as systems
analyst is one that may be characterized as a position of trust and confidence such
that if reinstated, it may well lead to strained relations between employer and
employee. ?ence, this does not constitute an e7ception to the +eneral rule mandatin+
reinstatement for an employee who has been unlawfully dismissed.
4n the other hand, has she betrayed any confidence reposed in her by en+a+in+ in
transactions that may have created conflict of interest situationsB =etitioner $M'(
points out that as a matter of company policy, it prohibits its employees from involvin+
themselves with any company that has business dealin+s with $M'(. 'onse/uently,
when private respondent Salazar si+ned as a witness to the partnership papers of
'oncave )a supplier of @ltra which in turn is also a supplier of $M'(*, she was
deemed to have placed. herself in an untenable position as far as petitioner was
concerned.
?owever, on close scrutiny, we a+ree with public respondent that such a
circumstance did not create a conflict of interests situation. ,s a systems analyst,
Salazar was very far removed from operations involvin+ the procurement of supplies.
Salazar-s duties revolved around the development of systems and analysis of desi+ns
on a continuin+ basis. In other words, Salazar did not occupy a position of trust
relative to the approval and purchase of supplies and company assets.
In the instant case, petitioner has predicated its dismissal of Salazar on loss of
confidence. ,s we have held countless times, while loss of confidence or breach of
trust is a valid +round for terminations it must rest an some basis which must be
convincin+ly established.
35
,n employee who not be dismissed on mere
presumptions and suppositions. =etitioner-s alle+ation that since Salazar and Saldivar
lived to+ether in the same apartment, it :presumed reasonably that complainant-s
sympathy would be with Saldivar: and its averment that Saldivar-s investi+ation
althou+h unverified, was probably true, do not pass this 'ourt-s test.
3%
Ahile we
should not condone the acts of disloyalty of an employee, neither should we dismiss
him on the basis of suspicion derived from speculative inferences.
0o rely on the Maramara report as a basis for Salazar-s dismissal would be most
ine/uitous because the bul& of the findin+s centered principally oh her friend-s alle+ed
thievery and anomalous transactions as technical operations- support mana+er. Said
report merely insinuated that in view of Salazar-s special relationship with Saldivar,
Salazar mi+ht have had direct &nowled+e of Saldivar-s /uestionable activities. Direct
evidence implicatin+ private respondent is wantin+ from the records.
It is also worth emphasizin+ that the Maramara report came out after Saldivar had
already resi+ned from $M'( on May 5, !".. Since Saldivar did not have the
opportunity to refute mana+ement-s findin+s, the report remained obviously one%
sided. Since the main evidence obtained by petitioner dealt principally on the alle+ed
culpability of Saldivar, without his havin+ had a chance to voice his side in view of his
prior resi+nation, strin+ent e7amination should have been carried out to ascertain
whether or not there e7isted independent le+al +rounds to hold Salatar answerable as
well and, thereby, justify her dismissal. Findin+ none, from the records, we find her to
have been unlawfully dismissed.
A?3(3F4(3, the assailed resolution of public respondent 9ational Labor (elations
'ommission dated December #!, !"> is hereby ,FFI(M3D. =etitioner $M'( is
ordered to (3I9S0,03 private respondent Imelda Salazar and to pay her bac&wa+es
e/uivalent to her salary for a period of two )#* years only.
0his decision is immediately e7ecutory.
S4 4(D3(3D.

G.R. No. 12'592 March 1$, 199&
TRADER ROYAL BANK EMPLOYEE (NION-INDEPENDENT, petitioner,
vs.
NATIONAL LABOR RELATION COMMIION a!" EMMAN(EL NOEL A. CR(#,
respondents.

REGALADO, J.:
=etitioner 0raders (oyal 8an& 3mployees @nion and private respondent ,tty.
3mmanuel 9oel ,. 'ruz, head of the 3.9.,. 'ruz and ,ssociates law firm, entered
into a retainer a+reement on February #<, !"> whereby the former obli+ated itself to
pay the latter a monthly retainer fee of =5,666.66 in consideration of the law firm-s
underta&in+ to render the services enumerated in their contract.
1
=arenthetically, said
retainer a+reement was terminated by the union on ,pril ., !!6.
2
Durin+ the e7istence of that a+reement, petitioner union referred to private
respondent the claims of its members for holiday, mid%year and year%end bonuses
a+ainst their employer, 0raders (oyal 8an& )0(8*. ,fter the appropriate complaint
was filed by private respondent, the case was certified by the Secretary of Labor to
the 9ational Labor (elations 'ommission )9L('* on March #., !"> and doc&eted
as 9L('%9'( 'ertified 'ase 9o. 6.<<.
3
4n September #, !"", the 9L(' rendered a decision in the fore+oin+ case in favor
of the employees, awardin+ them holiday pay differential, mid%year bonus differential,
and year%end bonus differential.
$
0he 9L(', actin+ on a motion for the issuance of a
writ of e7ecution filed by private respondent as counsel for petitioner union, raffled the
case to Labor ,rbiter 4swald Lorenzo.
5
?owever, pendin+ the hearin+ of the application for the writ of e7ecution, 0(8
challen+ed the decision of the 9L(' before the Supreme 'ourt. 0he 'ourt, in its
decision promul+ated on ,u+ust 56, !!6,
%
modified the decision of the 9L(' by
deletin+ the award of mid%year and year%end bonus differentials while affirmin+ the
award of holiday pay differential.
&
0he ban& voluntarily complied with such final jud+ment and determined the holiday
pay differential to be in the amount of =>1,>!..5#. =etitioner never contested the
amount thus found by 0(8.
8
0he latter duly paid its concerned employees their
respective entitlement in said sum throu+h their payroll.
9
,fter private respondent received the above decision of the Supreme 'ourt on
September ", !!6,
1'
he notified the petitioner union, the 0(8 mana+ement and the
9L(' of his ri+ht to e7ercise and enforce his attorney-s lien over the award of holiday
pay differential throu+h a letter dated 4ctober ", !!6.
11
0hereafter, on ;uly #, !!, private respondent filed a motion before Labor ,rbiter
Lorenzo for the determination of his attorney-s fees, prayin+ that ten percent )6G* of
the total award for holiday pay differential computed by 0(8 at =>1,>!..5#, or the
amount of =>,1>!..5, be declared as his attorney-s fees, and that petitioner union be
ordered to pay and remit said amount to him.
12
0he 0(8 mana+ement manifested before the labor arbiter that they did not wish to
oppose or comment on private respondent-s motion as the claim was directed a+ainst
the union,
13
while petitioner union filed a comment and opposition to said motion on
;uly 1, !!.
1$
,fter considerin+ the position of the parties, the labor arbiter issued
an order
15
on 9ovember #<, !! +rantin+ the motion of private respondent, as
followsC
A?3(3F4(3, premises considered, it is hereby ordered that the
0(,D3(S (42,L 8,9H 3M=L4233S @9I49 with offices at
Hanlaon 0owers, (o7as 8oulevard is hereby ordered )sic* to pay
without delay the attorney-s fees due the movant law firm, 3.9.,.
'(@I and ,SS4'I,03S the amount of =>,1>...5 or ten )6G*
per cent of the =>1,>!..5# awarded by the Supreme 'ourt to the
members of the former.
0his constrained petitioner to file an appeal with the 9L(' on December #>,
!!, see&in+ a reversal of that order.
1%
4n 4ctober !, !!., the First Division of the 9L(' promul+ated a resolution
affirmin+ the order of the labor arbiter.
1&
0he motion for reconsideration filed by
petitioner was denied by the 9L(' in a resolution dated May #5, !!1,
18
hence the
petition at bar.
=etitioner maintains that the 9L(' committed +rave abuse of discretion amountin+ to
lac& of jurisdiction in upholdin+ the award of attorney-s fees in the amount of
=>,1>...5, or ten percent )6G* of the =>1,>!..5# +ranted as holiday pay
differential to its members, in violation of the retainer a+reementE and that the
challen+ed resolution of the 9L(' is null and void,
19
for the reasons hereunder
stated.
,lthou+h petitioner union concedes that the 9L(' has jurisdiction to decide claims
for attorney-s fees, it contends that the award for attorney-s fees should have been
incorporated in the main case and not after the Supreme 'ourt had already reviewed
and passed upon the decision of the 9L('. Since the claim for attorney-s fees by
private respondent was neither ta&en up nor approved by the Supreme 'ourt, no
attorney-s fees should have been allowed by the 9L('.
0hus, petitioner posits that the 9L(' acted without jurisdiction in ma&in+ the award of
attorney-s fees, as said act constituted a modification of a final and e7ecutory
jud+ment of the Supreme 'ourt which did not award attorney-s fees. It then cited
decisions of the 'ourt declarin+ that a decision which has become final and e7ecutory
can no lon+er be altered or modified even by the court which rendered the same.
4n the other hand, private respondent maintains that his motion to determine
attorney-s fees was just an incident of the main case where petitioner was awarded its
money claims. 0he +rant of attorney-s fees was the conse/uence of his e7ercise of
his attorney-s lien. Such lien resulted from and corresponds to the services he
rendered in the action wherein the favorable jud+ment was obtained. 0o include the
award of the attorney-s fees in the main case presupposes that the fees will be paid
by 0(8 to the adverse party. ,ll that the non%inclusion of attorney-s fees in the award
means is that the Supreme 'ourt did not order 0(8 to pay the opposin+ party
attorney-s fees in the concept of dama+es. ?e is not therefore precluded from filin+
his motion to have his own professional fees adjudicated.
In view of the substance of the ar+uments submitted by petitioner and private
respondent on this score, it appears necessary to e7plain and conse/uently clarify the
nature of the attorney-s fees subject of this petition, in order to dissipate the apparent
confusion between and the conflictin+ views of the parties.
0here are two commonly accepted concepts of attorney-s fees, the so%called ordinary
and e7traordinary.
2'
In its ordinary concept, an attorney-s fee is the reasonable
compensation paid to a lawyer by his client for the le+al services he has rendered to
the latter. 0he basis of this compensation is the fact of his employment by and his
a+reement with the client.
In its e7traordinary concept, an attorney-s fee is an indemnity for dama+es ordered by
the court to be paid by the losin+ party in a liti+ation. 0he basis of this is any of the
cases provided by law where such award can be made, such as those authorized in
,rticle ##6", 'ivil 'ode, and is payable not to the lawyer but to the client, unless they
have a+reed that the award shall pertain to the lawyer as additional compensation or
as part thereof.
It is the first type of attorney-s fees which private respondent demanded before the
labor arbiter. ,lso, the present controversy stems from petitioner-s apparent
misperception that the 9L(' has jurisdiction over claims for attorney-s fees only
before its jud+ment is reviewed and ruled upon by the Supreme 'ourt, and that
thereafter the former may no lon+er entertain claims for attorney-s fees.
It will be noted that no claim for attorney-s fees was filed by private respondent before
the 9L(' when it acted on the money claims of petitioner, nor before the Supreme
'ourt when it reviewed the decision of the 9L('. It was only after the ?i+h 0ribunal
modified the jud+ment of the 9L(' awardin+ the differentials that private respondent
filed his claim before the 9L(' for a percenta+e thereof as attorney-s fees.
It would obviously have been impossible, if not improper, for the 9L(' in the first
instance and for the Supreme 'ourt thereafter to ma&e an award for attorney-s fees
when no claim therefor was pendin+ before them. 'ourts +enerally rule only on
issues and claims presented to them for adjudication. ,ccordin+ly, when the labor
arbiter ordered the payment of attorney-s fees, he did not in any way modify the
jud+ment of the Supreme 'ourt.
,s an adjunctive episode of the action for the recovery of bonus differentials in 9L('%
9'( 'ertified 'ase 9o. 6.<<, private respondent-s present claim for attorney-s fees
may be filed before the 9L(' even thou+h or, better stated, especially after its earlier
decision had been reviewed and partially affirmed. It is well settled that a claim for
attorney-s fees may be asserted either in the very action in which the services of a
lawyer had been rendered or in a separate action.
21
Aith respect to the first situation, the remedy for recoverin+ attorney-s fees as an
incident of the main action may be availed of only when somethin+ is due to the
client.
22
,ttorney-s fees cannot be determined until after the main liti+ation has been
decided and the subject of the recovery is at the disposition of the court. 0he issue
over attorney-s fees only arises when somethin+ has been recovered from which the
fee is to be paid.
23
Ahile a claim for attorney-s fees may be filed before the jud+ment is rendered, the
determination as to the propriety of the fees or as to the amount thereof will have to
be held in abeyance until the main case from which the lawyer-s claim for attorney-s
fees may arise has become final. 4therwise, the determination to be made by the
courts will be premature.
2$
4f course, a petition for attorney-s fees may be filed
before the jud+ment in favor of the client is satisfied or the proceeds thereof delivered
to the client.
25
It is apparent from the fore+oin+ discussion that a lawyer has two options as to when
to file his claim for professional fees. ?ence, private respondent was well within his
ri+hts when he made his claim and waited for the finality of the jud+ment for holiday
pay differential, instead of filin+ it ahead of the award-s complete resolution. 0o
declare that a lawyer may file a claim for fees in the same action only before the
jud+ment is reviewed by a hi+her tribunal would deprive him of his aforestated options
and render ineffective the fore+oin+ pronouncements of this 'ourt.
,ssailin+ the rulin+s of the labor arbiter and the 9L(', petitioner union insists that it
is not +uilty of unjust enrichment because all attorney-s fees due to private
respondent were covered by the retainer fee of =5,666.66 which it has been re+ularly
payin+ to private respondent under their retainer a+reement. 0o be entitled to the
additional attorney-s fees as provided in =art D )Special 8illin+s* of the a+reement, it
avers that there must be a separate mutual a+reement between the union and the law
firm prior to the performance of the additional services by the latter. Since there was
no a+reement as to the payment of the additional attorney-s fees, then it is considered
waived.
(n contra, private respondent contends that a retainer fee is not the attorney-s fees
contemplated for and commensurate to the services he rendered to petitioner. ?e
asserts that althou+h there was no e7press a+reement as to the amount of his fees
for services rendered in the case for recovery of differential pay, ,rticle of the
Labor 'ode supplants this omission by providin+ for an award of ten percent )6G* of
a money jud+ment in a labor case as attorney-s fees.
It is elementary that an attorney is entitled to have and receive a just and reasonable
compensation for services performed at the special instance and re/uest of his client.
,s lon+ as the lawyer was in +ood faith and honestly tryin+ to represent and serve the
interests of the client, he should have a reasonable compensation for such services.
2%
It will thus be appropriate, at this juncture, to determine if private respondent is
entitled to an additional remuneration under the retainer a+reement
2&
entered into by
him and petitioner.
0he parties subscribed therein to the followin+ stipulationsC
777 777 777
0he Law Firm shall handle cases and e7tend le+al services under the parameters of
the followin+ terms and conditionsC
,. G()(#AL S(#'*C(S
. ,ssurance that an ,ssociate of the Law Firm shall be desi+nated
and be available on a day%to%day basis dependin+ on the @nion-s
needsE
#. Le+al consultation, advice and render opinion on any actual
andJor anticipatory situation confrontin+ any matter within the
client-s normal course of businessE
5. =roper documentation and notarization of any or all transactions
entered into by the @nion in its day%to%day course of businessE
.. (eview all contracts, deeds, a+reements or any other le+al
document to which the union is a party si+natory thereto but
prepared or caused to be prepared by any other third partyE
1. (epresent the @nion in any case wherein the @nion is a party
liti+ant in any court of law or /uasi%judicial body subject to certain
fees as /ualified hereinafterE
<. Lia)i*se with andJor follow%up any pendin+ application or any
papers with any +overnment a+ency andJor any private institution
which is directly related to any le+al matter referred to the Law
Firm.
8. SP(C*AL L(GAL S(#'*C(S
. Documentation of any contract and other le+al
instrumentJdocuments arisin+ andJor re/uired by your @nion which
do not fall under the cate+ory of its ordinary course of business
activity but re/uires a special, e7haustive or detailed study and
preparationE
#. 'onduct or underta&e researches andJor studies on special
projects of the @nionE
5. (ender active and actual participation or assistance in
conference table ne+otiations with 0(8 mana+ement or any other
third person)s*, juridical or natural, wherein the presence of counsel
is not for mere consultation e7cept '8, ne+otiations which shall be
subject to a specific a+reement )pursuant to =D 5! and in
relation to 8= 56 K ##>*E
.. =reparation of =osition =aper)s*, Memoranda or any other
pleadin+ for and in behalf of the @nionE
1. =rosecution or defense of any case instituted by or a+ainst the
@nionE and,
<. (epresent any member of the @nion in any proceedin+ provided
that the particular member must +ive hisJher assent and that prior
consent be +ranted by the principal officers. Further, the member
must conform to the rules and policies of the Law Firm.
'. +(( ST#,CT,#(
In consideration of our commitment to render the services
enumerated above when re/uired or necessary, your @nion shall
pay a monthly retainer fee of 0?(33 0?4@S,9D =3S4S )=?=
5,666.66*, payable in advance on or before the fifth day of every
month.
,n ,ppearance Fee which shall be ne+otiable on a case%to%case
basis.
,ny and all ,ttorney-s Fees collected from the adverse party by
virtue of a successful liti+ation shall belon+ e7clusively to the Law
Firm.
It is further understood that the fore+oin+ shall be without prejudice
to our claim for reimbursement of all out%of%poc&et e7penses
coverin+ filin+ fees, transportation, publication costs, e7penses
coverin+ reproduction or authentication of documents related to any
matter referred to the Law Firm or that which redound to the benefit
of the @nion.
D. SP(C*AL -*LL*)GS
In the event that the @nion avails of the services duly enumerated
in 0itle 8, the @nion shall pay the Law Firm an amount mutually
a+reed upon =(I4( to the performance of such services. 0he sum
a+reed upon shall be based on actual time and effort spent by the
counsel in relation to the importance and ma+nitude of the matter
referred to by the @nion. ?owever, char+es may be .A*'(/ by the
Law Firm if it finds that time and efforts e7pended on the particular
services are inconse/uential but such ri+ht of waiver is duly
reserved for the Law Firm.
777 777 777
0he provisions of the above contract are clear and need no further interpretationE all
that is re/uired to be done in the instant controversy is its application. 0he =5,666.66
which petitioner pays monthly to private respondent does not cover the services the
latter actually rendered before the labor arbiter and the 9L(' in behalf of the former.
,s stipulated in =art ' of the a+reement, the monthly fee is intended merely as a
consideration for the law firm-s commitment to render the services enumerated in =art
, )$eneral Services* and =art 8 )Special Le+al Services* of the retainer a+reement.
0he difference between a compensation for a commitment to render le+al services
and a remuneration for le+al services actually rendered can better be appreciated
with a discussion of the two &inds of retainer fees a client may pay his lawyer. 0hese
are a +eneral retainer, or a retainin+ fee, and a special
retainer.
28

, +eneral retainer, or retainin+ fee, is the fee paid to a lawyer to secure his future
services as +eneral counsel for any ordinary le+al problem that may arise in the
routinary business of the client and referred to him for le+al action. 0he future
services of the lawyer are secured and committed to the retainin+ client. For this, the
client pays the lawyer a fi7ed retainer fee which could be monthly or otherwise,
dependin+ upon their arran+ement. 0he fees are paid whether or not there are cases
referred to the lawyer. 0he reason for the remuneration is that the lawyer is deprived
of the opportunity of renderin+ services for a fee to the opposin+ party or other
parties. In fine, it is a compensation for lost opportunities.
, special retainer is a fee for a specific case handled or special service rendered by
the lawyer for a client. , client may have several cases demandin+ special or
individual attention. If for every case there is a separate and independent contract for
attorney-s fees, each fee is considered a special retainer.
,s to the first &ind of fee, the 'ourt has had the occasion to e7pound on its concept in
0ilado vs. /avid
29
in this wiseC
0here is in le+al practice what is called a :retainin+ fee,: the
purpose of which stems from the realization that the attorney is
disabled from actin+ as counsel for the other side after he has
+iven professional advice to the opposite party, even if he should
decline to perform the contemplated services on behalf of the latter.
It is to prevent undue hardship on the attorney resultin+ from the
ri+id observance of the rule that a separate and independent fee for
consultation and advice was conceived and authorized. :, retainin+
fee is a preliminary fee +iven to an attorney or counsel to insure
and secure his future services, and induce him to act for the client.
It is intended to remunerate counsel for bein+ deprived, by bein+
retained by one party, of the opportunity of renderin+ services to
the other and of receivin+ pay from him, and the payment of such
fee, in the a!sence of an e&press understandin" to the contrary, is
neither made nor received in payment of the services
contemplatedE its payment has no relation to the o!li"ation of the
client to pay his attorney for the services for which he has retained
him to perform.: )3mphasis supplied*.
3vidently, the =5,666.66 monthly fee provided in the retainer a+reement between the
union and the law firm refers to a +eneral retainer, or a retainin+ fee, as said monthly
fee covers only the law firm-s pled+e, or as e7pressly stated therein, its :commitment
to render the le+al services enumerated.: 0he fee is not payment for private
respondent-s e7ecution or performance of the services listed in the contract, subject
to some particular /ualifications or permutations stated there.
$enerally spea&in+, where the employment of an attorney is under an e7press valid
contract fi7in+ the compensation for the attorney, such contract is conclusive as to the
amount of compensation.
3'
Ae cannot, however, apply the fore+oin+ rule in the
instant petition and treat the fi7ed fee of =5,666.66 as full and sufficient consideration
for private respondent-s services, as petitioner would have it.
Ae have already shown that the =5,666.66 is independent and different from the
compensation which private respondent should receive in payment for his services.
Ahile petitioner and private respondent were able to fi7 a fee for the latter-s promise
to e7tend services, they were not able to come into a+reement as to the law firm-s
actual performance of services in favor of the union. ?ence, the retainer a+reement
cannot control the measure of remuneration for private respondent-s services.
Ae, therefore, cannot favorably consider the su++estion of petitioner that private
respondent had already waived his ri+ht to char+e additional fees because of their
failure to come to an a+reement as to its payment.
Firstly, there is no showin+ that private respondent une/uivocally opted to waive the
additional char+es in consonance with =art D of the a+reement. Secondly, the prompt
actions ta&en by private respondent, i.e., servin+ notice of char+in+ lien and filin+ of
motion to determine attorney-s fees, belie any intention on his part to renounce his
ri+ht to compensation for prosecutin+ the labor case instituted by the union. ,nd,
lastly, to adopt such theory of petitioner may frustrate private respondent-s ri+ht to
attorney-s fees, as the former may simply and unreasonably refuse to enter into any
special a+reement with the latter and conveniently claim later that the law firm had
relin/uished its ri+ht because of the absence of the same.
0he fact that petitioner and private respondent failed to reach a meetin+ of the minds
with re+ard to the payment of professional fees for special services will not absolve
the former of civil liability for the correspondin+ remuneration therefor in favor of the
latter.
4bli+ations do not emanate only from contracts.
31
4ne of the sources of e7tra%
contractual obli+ations found in our 'ivil 'ode is the /uasi%contract premised on the
(oman ma7im that nemo cum alterius detrimento locupletari protest. ,s embodied in
our law,
32
certain lawful, voluntary and unilateral acts +ive rise to the juridical relation
of /uasi%contract to the end that no one shall be unjustly enriched or benefited at the
e7pense of another.
, /uasi%contract between the parties in the case at bar arose from private
respondent-s lawful, voluntary and unilateral prosecution of petitioner-s cause without
awaitin+ the latter-s consent and approval. =etitioner cannot deny that it did benefit
from private respondent-s efforts as the law firm was able to obtain an award of
holiday pay differential in favor of the union. It cannot even hide behind the cloa& of
the monthly retainer of =5,666.66 paid to private respondent because, as
demonstrated earlier, private respondent-s actual rendition of le+al services is not
compensable merely by said amount.
=rivate respondent is entitled to an additional remuneration for pursuin+ le+al action
in the interest of petitioner before the labor arbiter and the 9L(', on top of the
=5,666.66 retainer fee he received monthly from petitioner. 0he law firm-s services
are decidedly worth more than such basic fee in the retainer a+reement. 0hus, in =art
' thereof on :Fee Structure,: it is even provided that all attorney-s fees collected from
the adverse party by virtue of a successful liti+ation shall belon+ e7clusively to private
respondent, aside from petitioner-s liability for appearance fees and reimbursement of
the items of costs and e7penses enumerated therein.
, /uasi%contract is based on the presumed will or intent of the obli+or dictated by
e/uity and by the principles of absolute justice. Some of these principles areC )* It is
presumed that a person a+rees to that which will benefit himE )#* 9obody wants to
enrich himself unjustly at the e7pense of anotherE and )5* Ae must do unto others
what we want them to do unto us under the same circumstances.
33
,s early as !65, we allowed the payment of reasonable professional fees to an
interpreter, notwithstandin+ the lac& of understandin+ with his client as to his
remuneration, on the basis of /uasi%contract.
3$
?ence, it is not necessary that the
parties a+ree on a definite fee for the special services rendered by private respondent
in order that petitioner may be obli+ated to pay compensation to the former. 3/uity
and fair play dictate that petitioner should pay the same after it accepted, availed itself
of, and benefited from private respondent-s services.
Ae are not unaware of the old rulin+ that a person who had no &nowled+e of, nor
consented to, or protested a+ainst the lawyer-s representation may not be held liable
for attorney-s fees even thou+h he benefited from the lawyer-s services.
35
8ut this
doctrine may not be applied in the present case as petitioner did not object to private
respondent-s appearance before the 9L(' in the case for differentials.
Fiewed from another aspect, since it is claimed that petitioner obtained respondent-s
le+al services and assistance re+ardin+ its claims a+ainst the ban&, only they did not
enter into a special contract re+ardin+ the compensation therefor, there is at least the
innominate contract of facio ut des )I do that you may +ive*.
3%
0his rule of law,
li&ewise founded on the principle a+ainst unjust enrichment, would also warrant
payment for the services of private respondent which proved beneficial to petitioner-s
members. In any case, whether there is an a+reement or not, the courts can fi7 a
reasonable compensation which lawyers should receive for their professional
services.
3&
?owever, the value of private respondent-s le+al services should not be
established on the basis of ,rticle of the Labor 'ode alone. Said article providesC
,rt. . ,ttorney-s fees. D )a* In cases of unlawful withholdin+ of
wa+es the culpable party may be assessed attorney-s fees
e/uivalent to ten percent of the amount of the wa+es recovered.
777 777 777
0he implementin+ provision
38
of the fore+oin+ article further statesC
Sec. . Attorney1s fees. D ,ttorney-s fees in any judicial or
administrative proceedin+s for the recovery of wa+es shall not
e7ceed 6G of the amount awarded. 0he fees may be deducted
from the total amount due the winnin+ party.
In the first place, the fees mentioned here are the e7traordinary attorney-s fees
recoverable as indemnity for dama+es sustained by and payable to the prevailin+
part. In the second place, the ten percent )6G* attorney-s fees provided for in ,rticle
of the Labor 'ode and Section , (ule FIII, 8oo& III of the Implementin+ (ules
is the ma7imum of the award that may thus be +ranted.
39
,rticle thus fi7es only
the limit on the amount of attorney-s fees the victorious party may recover in any
judicial or administrative proceedin+s and it does not even prevent the 9L(' from
fi7in+ an amount lower than the ten percent )6G* ceilin+ prescribed by the article
when circumstances warrant it.
$'
0he measure of compensation for private respondent-s services as a+ainst his client
should properly be addressed by the rule of 2uantum meruit lon+ adopted in this
jurisdiction. 3uantum meruit, meanin+ :as much as he deserves,: is used as the
basis for determinin+ the lawyer-s professional fees in the absence of a contract,
$1

but recoverable by him from his client.
Ahere a lawyer is employed without a price for his services bein+ a+reed upon, the
courts shall fi7 the amount on 2uantum meruit basis. In such a case, he would be
entitled to receive what he merits for his services.
$2
It is essential for the proper operation of the principle that there is an acceptance of
the benefits by one sou+ht to be char+ed for the services rendered under
circumstances as reasonably to notify him that the lawyer performin+ the tas& was
e7pectin+ to be paid compensation therefor. 0he doctrine of 2uantum meruit is a
device to prevent undue enrichment based on the e/uitable postulate that it is unjust
for a person to retain benefit without payin+ for it.
$3
4ver the years and throu+h numerous decisions, this 'ourt has laid down +uidelines
in ascertainin+ the real worth of a lawyer-s services. 0hese factors are now codified in
(ule #6.6, 'anon #6 of the 'ode of =rofessional (esponsibility and should be
considered in fi7in+ a reasonable compensation for services rendered by a lawyer on
the basis of 2uantum meruit. 0hese areC )a* the time spent and the e7tent of services
rendered or re/uiredE )b* the novelty and difficulty of the /uestions involvedE )c* the
importance of the subject matterE )d* the s&ill demandedE )e* the probability of losin+
other employment as a result of acceptance of the proffered caseE )f* the customary
char+es for similar services and the schedule of fees of the I8= chapter to which the
lawyer belon+sE )+* the amount involved in the controversy and the benefits resultin+
to the client from the servicesE )h* the contin+ency or certainty of compensationE )i*
the character of the employment, whether occasional or establishedE and )j* the
professional standin+ of the lawyer.
?ere, then, is the flaw we find in the award for attorney-s fees in favor of private
respondent. Instead of adoptin+ the above +uidelines, the labor arbiter forthwith but
erroneously set the amount of attorney-s fees on the basis of ,rticle of the Labor
'ode. ?e completely relied on the operation of ,rticle when he fi7ed the amount
of attorney-s fees at =>,1>...5.
$$
4bserve the conclusion stated in his order.
$5
777 777 777
FI(S0. ,rt. of the Labor 'ode, as amended, clearly declares
movant-s ri+ht to a ten )6G* per cent of the award due its client. In
addition, this ri+ht to ten )6G* per cent attorney-s fees is
supplemented by Sec. , (ule FIII, 8oo& III of the 4mnibus
(ules Implementin+ the Labor 'ode, as amended.
777 777 777
,s already stated, ,rticle of the Labor 'ode re+ulates the amount recoverable as
attorney-s fees in the nature of dama"es sustained by and awarded to the prevailin"
party. It may not be used therefore, as the lone standard in fi7in+ the e7act amount
payable to the lawyer by his client for the le"al services he rendered. ,lso, while it
limits the ma7imum allowable amount of attorney-s fees, it does not direct the
instantaneous and automatic award of attorney-s fees in such ma7imum limit.
It, therefore, behooves the adjudicator in /uestions and circumstances similar to
those in the case at bar, involvin+ a conflict between lawyer and client, to observe the
above +uidelines in cases callin+ for the operation of the principles of 2uasi%contract
and 2uantum meruit, and to conduct a hearin+ for the proper determination of
attorney-s fees. 0he criteria found in the 'ode of =rofessional (esponsibility are to be
considered, and not disre+arded, in assessin+ the proper amount. ?ere, the records
do not reveal that the parties were duly heard by the labor arbiter on the matter and
for the resolution of private respondent-s fees.
It is a7iomatic that the reasonableness of attorney-s fees is a /uestion of fact.
$%

4rdinarily, therefore, we would have remanded this case for further reception of
evidence as to the e7tent and value of the services rendered by private respondent to
petitioner. ?owever, so as not to needlessly prolon+ the resolution of a comparatively
simple controversy, we deem it just and e/uitable to fi7 in the present recourse a
reasonable amount of attorney-s fees in favor of private respondent. For that purpose,
we have duly ta&en into account the accepted +uidelines therefor and so much of the
pertinent data as are e7tant in the records of this case which are assistive in that
re+ard. 4n such premises and in the e7ercise of our sound discretion, we hold that
the amount of =6,666.66 is a reasonable and fair compensation for the le+al
services rendered by private respondent to petitioner before the labor arbiter and the
9L('.
A?3(3F4(3, the impu+ned resolution of respondent 9ational Labor (elations
'ommission affirmin+ the order of the labor arbiter is M4DIFI3D, and petitioner is
hereby 4(D3(3D to pay the amount of 039 0?4@S,9D =3S4S )=6,666.66* as
attorney-s fees to private respondent for the latter-s le+al services rendered to the
former.
S4 4(D3(3D.

G.R. No. 881%8 A)*)+, 3', 199'
TRADER ROYAL BANK, petitioner,
vs.
NATIONAL LABOR RELATION COMMIION - TRADER ROYAL BANK
EMPLOYEE (NION, respondents.
San 4uan, Gon$ale$, San A"ustin & Sinense for petitioner.
(.).A. Cru$, (nfero & Associates for private respondent.

GRI.O-A/(INO, J.:
0his petition for certiorari see&s to nullify or set aside the decision dated September #,
!"" of the 9ational Labor (elations 'ommission, which found the petitioner, 0raders
(oyal 8an& )or 0(8*, +uilty of diminution of benefits due the private respondents and
ordered it to pay the said employees- claims for differentials in their holiday, mid%year,
and year%end bonuses.
4n 9ovember ", !"<, the @nion, throu+h its president, filed a letter%complaint
a+ainst 0(8 with the 'onciliation Division of the 8ureau of Labor (elations claimin+
thatC
First, the mana+ement of 0(8 per memo dated 4ctober 6, !"<
paid the employees their ?4LID,2 =,2, but has withheld from the
@nion the basis of their computation.
Second, the computation in /uestion, has alle+edly decreased the
daily salary rate of the employees. 0his diminution of e7istin+
benefits has decreased our overtime rate and has affected the
employees- ta&e home pay.
0hird, the diminution of benefits bein+ enjoyed by the employees
since time immemorial, e.+. mid%year bonus, from two )#* months
+ross pay to two )#* months basic and year%end bonus from three
)5* months +ross to only two )#* months.
Fourth, the refusal by mana+ement to recall active union members
from the branches which were bein+ transferred without prior
notice, solely at the instance of the branch mana+er. )p. #<, #ollo.*
In its answer to the union-s complaint, 0(8 pointed out that the 9L(', not the 8ureau
of Labor (elations, had jurisdiction over the money claims of the employees.
4n March #., !">, the Secretary of Labor certified the complaint to the 9L(' for
resolution of the followin+ issues raised by the complainantsC
l* 0he Mana+ement of 0(8 per memo dated 4ctober 6, !"< paid
the employees their holiday pay but has withheld from the union the
basis of their computation.
#* 0he computation in /uestion has alle+edly decreased the daily
salary rate of the employees. 0his diminution of e7istin+ benefits
has decreased our overtime rate and has affected the employees-
ta&e home pay.
5* 0he diminution of benefits bein+ enjoyed by the employees since
the )sic* immemorial, e.+. mid%year bonus, from two )#* months
+ross pay to two )#* months basic and year%end bonus from three
)5* months +ross to only two )#* months.
.* 0he refusal by mana+ement to recall active union members from
the branches which were bein+ transferred without prior notice,
solely at the instance of the branch, mana+er. )p. #", #ollo.*
In the meantime, the parties who had been ne+otiatin+ for a collective bar+ainin+
a+reement, a+reed on the terms of the '8,, to witC
. 0he whole of the bonuses +iven in previous years is not
demandable, i.e., there is no diminution, as to be liable for a
differential, if the bonus +iven is less than that in previous years.
#. Since only two months bonus is +uaranteed, only to that e7tent
are bonuses deemed part of re+ular compensation.
5. ,s re+ards the third and fourth bonuses, they are entirely
dependent on the income of the ban&, and not demandable as part
of compensation. )pp. <>%<", #ollo.*
Despite the terms of the '8,, however, the union insisted on pursuin+ the case,
ar+uin+ that the '8, would apply prospectively only to claims arisin+ after its
effectivity.
=etitioner, on the other hand, insisted that it had paid the employees holiday pay. 0he
practice of +ivin+ them bonuses at year-s end, would depend on how profitable the
operation of the ban& had been. $enerally, the bonus +iven was two )#* months basic
mid%year and two )#* months +ross end%year.
4n September #, !"", the 9L(' rendered a decision in favor of the employees, the
dispositive portion of which readsC
A?3(3F4(3, jud+ment is hereby rendered in favor of the
petitioner and orderin+ respondent ban& to pay petitioner members%
employees the followin+C
. ?oliday differential for the period coverin+ l!"5%!"< as
embodied in (esolution 9o. .!".%!"< of respondent-s 8oard of
Directors but to start from 9ovember , !"5 and usin+ the Divisor
#1 days in determinin+ the daily rate of the employeesE
#. Mid%year bonus differential representin+ the difference between
two )#* months +ross pay and two )#* months basic pay and end%
year bonus differential of one )* month +ross pay for !"<.
0he claim for holiday differential for the period earlier than
9ovember , !"5 is hereby dismissed, the same havin+
prescribed.
Li&ewise, the char+e of unfair labor practice a+ainst the respondent
company is hereby dismissed for lac& of merit. )pp. >#%>5, #ollo.*
, motion for reconsideration was filed by 0(8 but it was denied. ?ence, this petition
for certiorari.
0here is merit in the petitioner-s contention that the 9L(' +ravely abused its
discretion in orderin+ it to pay mid%yearJyear%end bonus differential for !"< to its
employees.
, bonus is :a +ratuity or act of liberality of the +iver which the recipient has no ri+ht to
demand as a matter of ri+ht: ),ra+on vs. 'ebu =ortland 'ement 'o., < 4.$. .1!>*.
:It is somethin+ +iven in addition to what is ordinarily received by or strictly due the
recipient.: 0he +rantin+ of a bonus is basically a mana+ement prero+ative which
cannot be forced upon the employer :who may not be obli+ed to assume the onerous
burden of +rantin+ bonuses or other benefits aside from the employee-s basic salaries
or wa+es: . . . )Hamaya =oint ?otel vs. 9ational Labor (elations 'ommission,
Federation of Free Aor&ers and 9emia Luiambao, $.(. 9o. >1#"!, ,u+ust 5,
!"!*.
It is clear from the above%cited rulin+s that the petitioner may not be obli+ed to pay
bonuses to its employees. 0he matter of +ivin+ them bonuses over and above their
lawful salaries and allowances is entirely dependent on the profits, if any, realized by
the 8an& from its operations durin+ the past year.
From !>!%!"1, the bonuses were less because the income of the 8an& had
decreased. In !"<, the income of the 8an& was only #6.# million pesos, but the 8an&
still +ave out the usual two )#* months basic mid%year and two months +ross year%end
bonuses. 0he petitioner pointed out, however, that the 8an& wea&ened considerably
after !"< on account of political developments in the country. Suspected to be a
Marcos%owned or controlled ban&, it was placed under se/uestration by the present
administration and is now mana+ed by the =residential 'ommission on $ood
$overnment )='$$*.
In the li+ht of these submissions of the petitioner, the contention of the @nion that the
+rantin+ of bonuses to the employees had ripened into a company practice that may
not be adjusted to the prevailin+ financial condition of the 8an& has no le+al and
moral bases. Its fiscal condition havin+ declined, the 8an& may not be forced to
distribute bonuses which it can no lon+er afford to pay and, in effect, be penalized for
its past +enerosity to its employees.
=rivate respondent-s contention, that the decrease in the midyear and year%end
bonuses constituted a diminution of the employees- salaries, is not correct, for
bonuses are not part of labor standards in the same class as salaries, cost of livin+
allowances, holiday pay, and leave benefits, which are provided by the Labor 'ode.
A?3(3F4(3, the petition for certiorari is +ranted. 0he decision of the 9ational
Labor (elations 'ommission is modified by deletin+ the award of bonus differentials
to the employees for !"<. In other respects, the decision is affirmed. 'osts a+ainst
the respondent union.
S4 4(D3(3D.
December !, !1!
$.(. 9o. L%#!16
BEN0AMIN CELETIAL, ET AL., petitioners,
vs.
T1E O(T1ERN MINDANAO E2PERIMENTAL TATION, ET AL., respondents.
S. Tomas de las Cru$ for petitioners.
Assistant Solicitor General 4ose P. Alejandro and Solicitor /ominador L. 3uiro$ for
respondents.
Mo!,34a5or, J.6
0his is a petition by 8enjamin 'elestial and >1 others for review of the decision of
the ,uditor $eneral, dated September !, !1>, denyin+ their claim for differential pay
under the Minimum Aa+e Law.
0he record discloses that petitioner are employees andJor wor&ers of the Southern
Mindanao 37perimental Station, later referred to as 37perimental Station, 8ureau of
=lant Industry in Davao 'ity, and that since !1# they had been paid each a daily
wa+e of =#.16E that some time in March !1>, petitioners filed with the ,uditor
$eneralMs 4ffice their claims for differential pay, alle+in+ amon+ other thin+s that they
were entitled to the minimum wa+e of =..66 a day, instead of =#.16, which was
actually paid them by the 37perimental StationE and that as already stated, on
September !, !1>, the ,uditor $eneral rendered a decision, holdin+ that petitioner
were not entitled to the minimum daily wa+e of =..66, but only to =#.16.
0he resolution of this case depends upon the interpretation and application of Section
5 )a*, )b* and )c* of the Minimum Aa+e Law, which we reproduce below for purposes
of ready referenceC
S3'. 5. Minimum wa+e. N )a* 3very employer shall pay to each of his employees who
is employed by an enterprise other than in a+riculture wa+e at the rate of not less
than %
)* . . . .
)#* 0hree pesos a day on the effective date of this ,ct and for one year after the
effective date, and thereafter =..66 a day, for employees of establishment located
outside of Manila or its environsC . . . .
)b* 3very employer who operates a farm enterprise comprisin+ more than # hectares
shall pay each of his employees who is en+a+ed in a+riculture, wa+e at the rate of not
less than %
)* . . .,
)#* . . .E
)5* 4ne year thereafter, =#.16 a day and no allowance for board and lod+in+ shall
reduce this wa+e below =#.#1 in cash.
)c* 3ffective on the first of ;uly, nineteen hundred and fifty%two, the minimum wa+e
rates for employees in the $overnment service shall be those provided in subsection
)a* and )b* of this section . . .
From the le+al provisions above%reproduce, it will readily be seen that in order that an
employee or laborer may be paid the minimum wa+e of =#.16 a day, he must be
employed by an enterprise )in this case, the Southern Mindanao 37perimental
Station* en+a+ed in a+ricultureE that said employer operates s farm comprisin+ more
than # hectaresE and that the employee or laborer is en+a+ed in a+riculture. 0he
second condition is satisfied because the 37perimental Station is operatin+ a farm
comprisin+ !<6 hectares. 0he ne7t /uestion to be decided is whether or not said
37perimental Station is en+a+ed in a+riculture. 0o determine this, we have to +o bac&
to the function of the 8ureau of =lant Industry )Section >15, (evised ,dministrative
'ode* of which the 37perimental Station is an a+ency or adjunction, said
37perimental Station bein+ provided for in Section >1. of the same (evised
,dministrative 'ode. Said two sections are reproduced below for ready referenceC
S3'. >15. Function of 8ureau of =lant Industry. N It shall be the function of said
8ureau to collect and disseminate useful information pertainin+ to a+riculture in the
=hilippines, to encoura+e the use of improved a+riculture methodsE and, in +eneral, to
promote the development of the a+riculture resources of the =hilippines, as followsC
)a* 8y the introduction of new domesticated animals, and the improvement of the
breeds of domesticated animal now found in the =hilippinesE
)b* 8y the control and eradication of diseases of live stoc&E
)c* 8y the investi+ation of soil and climate conditions, and the methods of producin+
and handlin+ a+riculture productsE
)d* 8y the introduction, production, and distribution of improved seeds and plantsE
)e* 8y the control and eradication of diseases, insects, and other pests injurious to
cultivated plantsE
)f* 8y the operation of a system of demonstration and a+riculture e7tension wor&E
)+* 8y the collection of a+ricultural statisticsE and
)h* 8y the publication and distribution of bulletins, circulars, and other printed matter.
S3'. >1.. 37periment station, farms, and stations for a+ricultural instruction. N In
such place in the =hilippines as may be considered suitable for the purpose, the
Director of =lant Industry, with the approval of the ?ead of the Department, shall be
funds shall be available therefore, establish, e/uip, maintain, and operate e7periment
stations, farms, stoc& farms, and station for practical a+riculture instruction.
)In the 8ureau of ,+riculture is also vested the supervision and control of ,merican
a+riculture colonies*.
4n the basis of the le+al provision above%reproduced, we are of the opinion that both
the 8ureau of =lant Industry and 37perimental Station, particularly the latter, are
en+a+ed in a+riculture or are dedicated to a+ricultural functions, specially when we
ta&e into consideration the definition of a+riculture in Section # of the Minimum Aa+e
Law itself, (epublic ,ct 9o. <6#, which is as followC
,+riculture includes farin+ in all its branches and amon+ other thin+s include the
cultivation and thin+s of the soil, dairyin+, the production, cultivation, +rowin+, and
harvestin+ of any a+ricultural or horticular commodities, the raisin+ of livestoc& or
poultry, and any practice performer by a farmer or on a farm as an incident to or in
conjunction with such farmin+ operations, but does not include the manufacturin+ or
processin+ of su+ar, coconut, abaca, tobacco, pineapples or other farm products.
,nd is a matter of public &nowled+e that e7perimental stations maintained by the
8ureau of =lant Industry, specially when done on a bi+ scale li&e the Southern
Mindanao 37perimental Station that operates a farm comprisin+ !<6 hectares, thou+h
its employees and laborers, actually till the soil, introduce and plant seeds of the best
crop varieties found by it after study and e7periment, raise said crops in the best
approved methods of cultivation, includin+ the spacin+ of each plant or seedlin+ and
the amount of water needed thou+h irri+ation, weedin+, et., and the proper harvestin+
of the crop, includin+ the timin+ and method, all for the instruction and benefit of
=hilippine farmers, and to foster a+riculture in the country. Included in this cultivation
is the discovery of plant pests and their eradication by means of treatment with the
proper insecticides. 0hereafter, from the harvest are e7tracted the seeds which are
called certified seeds, for sale and distribution to farmers. 0here can be no /uestion
that all these acts and function fall within the definition of a+riculture provided in the
Minimum Aa+e Law, and, conse/uently, are a+ricultural as distin+uished from no%
a+ricultural functions. It follows that the laborers and farm wor&ers who actually carry
out and perform these functions are also en+a+ed in a+riculture. It is possible that not
all the laborers and employees in the 37perimental Station are actually en+a+ed in
preparin+ the land for plantin+, such as plowin+, tillin+, and plantin+ the seeds or
seedlin+s, in weedin+ the farm, in treatin+ plant diseases and harvestin+ crops. some
employees may be en+a+ed in office wor&, such as, cler&s, supervisors, maintenance
wor&ers, etc. 8ut inasmuch as they are all employed by the 37perimental Station,
which is a farm enterprise, and their wor& is incidental to a+riculture, they may also be
considered as a+ricultural wor&ers and employees. Interpretative 8ulletin 9o. .,
issued by the @nited States Aa+e ,dministration Service, implementin+ the
provisions of the Fair Labor Standards ,ct of the @nited States of !5", from which
our Minimum Aa+e Law was copied )MoraveC Minimum Aa+e Law, p. #>!*, under
the title O4ffice Aor&ers, 3tc.,P saysC
4ffice Aor&ers, 3tc.
#. Ae have received in/uiries concernin+ office help N secretaries, cler&s,
boo&&eepers, etc., ni+ht watchmen, maintenance wor&ers, en+ineers, etc., who are
employed by a farmer or a farm in connection with the activities described in the
definition of Oa+ricultureP contained in section 5 )f*. In our opinion such employees are
e7empt. )0ellerP Labor Disputes and 'ollective 8ar+ainin+, Fol. II, p. #6!*
0he above%reproduced portion of the bulletin, applied in this jurisdiction, means that
the employees mentioned therein are not +overned by our Minimum Aa+e Law, as
re+ards the minimum wa+e of =..66 a day for non%a+ricultural wor&ersE conse/uently,
they may receive a only the minimum wa+e of =#.16 a day, prescribed for wor&ers
en+a+ed in a+riculture.
8ut petitioners contend that the 8ureau of =lant Industry and 37perimental Station
could not be en+a+ed in a+riculture for the reason that their farm enterprise is not for
profit. In answer to this contention, it is enou+h to say that Minimum Aa+e Law in
definin+ a+riculture, does not prescribe the condition that the person or entity is
en+a+ed in it for purposes of profit. Ae can well ima+ine a person interested in
research and scientific a+riculture who proceeds to cultivate a little farm of, say, one
or two hectares, to put into practice the results of his research, introducin+ in the
cultivation the most modern methods, the most suitable fertilizers, etc., so that a
hectare so cultivated can produce, say, from #16 to 566 cavans of palay and
incidentally to compete a prize or a medal offered by the $overnment or any of its
a+encies. 0he fact that he does not cultivate the farm for purposes of profit, but rather
in the interest of science and to prove his scientific and a+ricultural theories, and
incidentally enter the contest for a prize, does not ma&e him less a+riculturist and his
activities as a+riculture.
Incidentally, it may be stated that the Secretary of ;ustice in an opinion rendered in
connection with the different activities of the Davao (e+ional Fiber Station, holds that
the laborers and employees of said fiber e7perimental station are not entitled to the
minimum wa+e of =..66.
In view of the fore+oin+, the decision appealed from is hereby reversed affirmed. 9o
costs.
=aras, '.;., 8en+zon, =adilla, 8autista ,n+elo, Labrador, (eyes, ;.8.L., 3ndencia,
8arrera and $utierrez David, ;;., concur.
7G.R. No. 1$'3%$. A)*)+, 15, 2'''8
ACE NA9IGATION CO., INC. a!":or CONNING 1IPPING LTD., petitioners,
vs. CO(RT O; APPEAL <T1IRTEENT1 DI9IION=, NATIONAL
LABOR RELATION COMMIION <;IRT DI9IION= a!"
ORLANDO ALONAGAY, respondents.
D 3 ' I S I 4 9
=@94, 4.C
0his is a petition for review of the resolutions

QR of the 'ourt of ,ppeals

#
Q#R that
dismissed the petition for certiorari filed by petitioners and which denied their motion
for reconsideration, respectively.
First, the facts.
In ;une !!., ,ce 9avi+ation 'o., Inc. ),ce 9av* recruited private respondent
4rlando ,lonsa+ay to wor& as a bartender on board the vessel MJF :4rient 37press:
owned by its principal, 'onnin+ Shippin+ Ltd. )'onnin+*. @nder their =43, approved
contract of employment, 4rlando shall receive a monthly basic salary of four hundred
fifty @.S. dollars )@.S. S.16.66*, flat rate, includin+ overtime pay for # hours of wor&
daily plus tips of two @.S. dollars )@.S. S#.66* per passen+er per day. ?e, was also
entitled to #.1 days of vacation leave with pay each month. 0he contract was to last
for one )* year.
=etitioners alle+ed that on ;une 5, !!., 4rlando was deployed and boarded MJF
:4rient 37press: at the seaport of ?on+ Hon+. ,fter the e7piration of the contract on
;une 5, !!1, 4rlando returned to the =hilippines and demanded from ,ce 9av his
vacation leave pay. ,ce 9av did not pay him immediately. It told him that he should
have been paid prior to his disembar&ation and repatriation to the =hilippines.
Moreover, 'onnin+ did not remit any amount for his vacation leave pay. ,ce 9av,

#
however, promised to verify the matter and as&ed 4rlando to return after a few days.
4rlando never returned.
4n 9ovember #1, !!1, 4rlando filed a complaint
5
Q5R before the labor arbiter for
vacation leave pay of four hundred fifty @.S. dollars )@.S. S.16.66* and unpaid tips
amountin+ to thirty si7, thousand @.S. dollars )@.S. S5<,666.66*.
.
Q.R 4n 9ovember 1,
!!<, Labor ,rbiter Felipe =. =ati ordered ,ce 9av and 'onnin+ to pay jointly and
severally 4rlando his vacation leave pay of @SS.16.66. 0he claim for tips of 4rlando
was dismissed for lac& of merit.
1
Q1R
4rlando appealed
<
Q<R to the 9ational Labor (elations 'ommission )9L('* on
February 5, !!>. In a decision
>
Q>R promul+ated on 9ovember #<, !!>, the 9L('
ordered ,ce 9av and 'onnin+ to pay the unpaid tips of 4rlando which amounted to
@SS5<,666.66 in addition to his vacation leave pay. ,ce 9av and 'onnin+ filed a
motion for reconsideration on February #, !!" which was denied on May #6, !!!.
"
Q"R
4n ;uly #, !!!, ,ce 9av and 'onnin+ filed a petition for certiorari before the 'ourt of
,ppeals to annul the decision of the 9L('. 4n ;uly #", !!!, the 'ourt of ,ppeals
promul+ated a three%pa+e resolution
!
Q!R dismissin+ the petition. 0heir motion for
reconsideration filed on September ", !!! was denied on 4ctober ", !!!. ?ence
this appeal.
In assailin+ the dismissal of their petition on technical +rounds, petitioners ar+ued that
the 'ourt of ,ppeals erred in ri+idly and technically applyin+ Section 5, (ule 5
6
Q6R
and Section , (ule <1

QR of the !!> (ules of 'ivil =rocedure.

#
Q#R 0hey also
contend that the respondent court erred in rulin+ that they are the ones liable to pay
5
.
1
<
>
"
!
6

#
tips to 4rlando. 0hey point out that if tips will be considered as part of the salary of
4rlando, it will ma&e him the hi+hest paid employee on MJF :4rient 37press.: 0he
ship captain, the hi+hest ran&in+ officer, receives @.S.S5,666.66 per month without
tips. 4rlando, who is a bartender, will receive @.S.S5,.16.66 per month. ,lle+edly,
this will compel forei+n ship owners to desist from hirin+ Filipino bartenders. It will
create an unfavorable precedent detrimental to the future recruitment, hirin+ and
deployment of Filipino overseas wor&ers specially in service oriented businesses. It
will also be a case of double compensation that will unjustly enrich 4rlando at the
e7pense of petitioners. 0hey also stress that 4rlando never complained that they
should pay him the said tips.
(espondent filed a two%pa+e comment to the petition adoptin+ the resolution of the
'ourt of ,ppeals dated ;uly #", !!!.
Ae find merit in the petition.
(ules of procedure are used to help secure and not override substantial justice.
5
Q5R
3ven the (ules of 'ourt mandates a liberal construction in order to promote their
objective of securin+ a >)+,, speedy and ine7pensive disposition of every action and
proceedin+.
.
Q.R Since rules of procedure are mere tools desi+ned to facilitate the
attainment of justice, their strict and ri+id application which would result in
technicalities that tend to frustrate rather than promote substantial justice must always
be avoided.
1
Q1R 0hus, the dismissal of an appeal on purely technical +round is
frowned upon especially if it will result to unfairness.
Ae apply these sound rules in the case at bar. =etitioners- petition for certiorari
before the 'ourt of ,ppeals contained the certified true copy of the 9L('-s decision
dated 9ovember #<, !!>,
<
Q<R its order dated May #, !!!
>
Q>R and the sworn
certification of non%forum shoppin+.
"
Q"R =etitioners also e7plained that their counsel
e7ecuted an affidavit of proof of service and e7planation in the afternoon of ;uly ,
!!!. ?owever, he for+ot to attach it when he filed their petition the followin+ day
because of the volume and pressure of wor& and lac& of office personnel. ?owever,
the (e+istry (eceipt,
!
Q!R which is the proof of mailin+ to 4rlando-s counsel, issued
by the 'entral =ost 4ffice was attached on the ori+inal petition they filed with the
5
.
1
<
>
"
!
respondent court. It was also stamped
#6
Q#6R by the 9L(' which is proof of receipt of
the petition by the latter. 0he affidavit of service, which was ori+inally omitted, was
attached on their motion for reconsideration.
#
Q#R Si+nificantly, it was dated ;uly ,
!!!. In view of the surroundin+ circumstances, the subse/uent filin+ of the affidavit
of service may be considered as substantial compliance with the rules.
Ae now come to the merits of the case. 0he issue is whether petitioners are liable to
pay the tips to 4rlando.
0he word QOtipPR has several meanin+s, with ori+ins more or less obscure, connected
with :tap: and with :top.: In the sense of a sum of money +iven for +ood service, other
lan+ua+es are more specific, e.+., Fr. pourboire, for drin&. It is su++ested that Qthe
wordR is formed from the practice, in early "th c. London coffeehouses, of havin+ a
bo7 in which persons in a hurry would drop a small coin, to +ain immediate attention.
0he bo7 was labelled 0o Insure =romptnessE then just with the initials 0.I.=.
##
Q##R
It is more fre/uently used to indicate additional compensation, and in this sense :tip:
is defined as meanin+ a +ratuityE a +iftE a presentE a feeE money +iven, as to a servant
to secure better or more prompt service. , tip may ran+e from pure +ift out of
benevolence or friendship, to a compensation for a service measured by its supposed
value but not fi7ed by an a+reement, althou+h usually the word is applied to what is
paid to a servant in addition to the re+ular compensation for his service in order to
secure better service or in reco+nition of it. It has been said that a tip denotes a
voluntary act, but it also has been said that from the very be+innin+ of the practice of
tippin+ it was evident that, whether considered from the standpoint of the +iver or the
recipient, a tip lac&ed the essential element of a +ift, namely, the free bestowin+ of a
+ratuity without a consideration, and that, despite its apparent voluntariness, there is
an element of compulsion in tippin+.
#5
Q#5R
0ippin+ is done to +et the attention and secure the immediate services of a waiter,
porter or others for their services. Since a tip is considered a pure +ift out of
benevolence or friendship, it can not be demanded from the customer. Ahether or not
tips will be +iven is dependent on the will and +enerosity of the +iver. ,lthou+h a
customer may +ive a tip as a consideration for services rendered, its value still
depends on the +iver. 0hey are +iven in addition to the compensation by the
employer. , +ratuity +iven by an employer in order to inspire the employee to e7ert
more effort in his wor& is more appropriately called a bonus.
0he 9L(' and the 'ourt of ,ppeals held that petitioners were liable to pay tips to
4rlando because of the contract of employment. 0husC
#6
#
##
#5
:0he contract of employment entered into by and between the complainant and ,ce
9avi+ation 'o., Inc. )p. "#, (ecord* clearly provides 777C
-0hat the employee shall be employed on board under the followin+ terms and
conditionsC
. Duration of 'ontractC )# months* 6 months remainin+ duration of contract
.# =ositionC 8artender
.5 8asic Monthly SalaryC @.S.S.16.66 Flat rate includin+ overtime pay for
.. ?ours of Aor&C # hrs. wor& daily.
.1 4vertimeC =lus tips of @.S.S#.66 per passen+er per day.
.< Facation Leave with =ayC #.1 daysJmo.- )record, p. "#*
:0he record of this case shows that the respondent, in the 'ontract of 3mployment
777 undertoo& to pay to complainant -tips of @.S.S#.66 per passen+er per day.- 2et,
there is no showin+ that the said underta&in+ was complied with by the respondents.
:It was thus a serious error on the part of the Labor ,rbiter to rule that the tips were
already paid, much less to rule that said tips were directly paid to the crew of MJF
:4(I390 =(I9'3SS.: Aith ,rticle . of the Labor 'ode remindin+ us that doubts
should be resolved in favor of labor, we all the more find it compellin+ to rule that the
complainant is still entitled to the contractually covenanted sum of @SS5<,666.66.
777.:
Ae disa+ree. 0he contract of employment between petitioners and 4rlando is
cate+orical that the monthly salary of 4rlando is @SS.16.66 ?@a, ra,3. 0his already
included his overtime pay which is inte+rated in his # hours of wor&. 0he words :plus
tips of @SS#.66 per passen+er per day: were written at the line for overtime. Since
payment for overtime was included in the monthly salary of 4rlando, the supposed
tips mentioned in the contract should be deemed included thereat.
0he actuations of 4rlando durin+ his employment also show that he was aware his
monthly salary is only @SS.16.66, no more no less. ?e did not raise any complaint
about the non%payment of his tips durin+ the entire duration of his employment. ,fter
the e7piration of his contract, he demanded payment only of his vacation leave pay.
?e did not immediately see& the payment of tips. ?e only as&ed for the payment of
tips when he filed this case before the labor arbiter. 0his shows that the alle+ed non%
payment of tips was a mere afterthou+ht to bloat up his claim. 0he records of the
case do not show that 4rlando was deprived of any monthly salary. It will now be
unjust to impose a burden on the employer who performed the contract in +ood faith.
Furthermore, it is presumed that the parties were aware of the plain, ordinary and
common meanin+ of the word :tip.: ,s a bartender, 4rlando can not fei+n i+norance
on the practice of tippin+ and that tips are normally paid by customers and not by the
employer.
It is also absurd that petitioners intended to +ive 4rlando a salary hi+her than that of
the ship captain. ,s petitioners point out, the captain of MJF :4rient =rincess:
receives @SS5,666.66 per month while 4rlando will receive @SS5,.16.66 per month if
the tip of @SS#.66 per passen+er per day will be +iven in addition to his @SS.16.66
monthly salary. It will be a+ainst common sense for an employer to +ive a lower
ran&ed employee a hi+her compensation than an employee who holds the hi+hest
position in an enterprise.
?owever, 4rlando should be paid his vacation leave pay. =etitioners denied this
liability by raisin+ the defense that the usual practice is that vacation leave pay is
+iven before repatriation. 8ut as the labor arbiter correctly observed, petitioners did
not present any evidence to prove that they already paid the amount. 0he burden of
provin+ payment was not dischar+ed by the petitioners.
IN 9IEA A1EREO;, the resolutions of the 'ourt of ,ppeals in ', $.(. S= 9o.
1516" are reversed and set aside. 0he decision of the labor arbiter orderin+
petitioners to pay jointly and severally the unpaid vacation leave pay of private
respondent, 4rlando ,lonsa+ay, in the amount of @SS.16.66 and dismissin+ his
other claim for lac& of merit is reinstated.
S4 4(D3(3D.
Davide, ;r., '.;., )'hairman*, Hapunan, =ardo, and 2nares%Santia+o, ;;., concur.