less than 25% of their regular renumeration
of the said days.
In accordance with this rule, the
provision of Commonwealth Act No. 103
which confers upon the Court of Industrial
Relations power to settle dispute between
employers and employees in general,
including those relating to compulsion of
laborers to work on Sundays and legal
holidays and additional compensation for
those working on those days, should be
considered as impliedly repealed by section
4 of Act No. 444, which limits or restricts
the minimum of the additional
compensation and specifies the persons,
firms or corporation who may be required to
pay said compensation. That is, that the
Court of Industrial Relations may, under the
provision of said section 4, order a person,
firm or corporation or business
establishment or place or center of labor
who compel an employee or laborer to work
on Sundays and legal holidays, to pay him
an additional compensation of at least 25
per centum of his regular remuneration; but
said court can not require public utilities
performing public service mentioned
therein to pay said extra compensation to
laborers and employees required by them
to work on Sundays and legal holidays,
because the necessity of public service so
requires.
Annent to this, the principal purpose
of the Legislature in enacting said section 4,
is not only to restrict the general power of
the Court of Industrial Relations granted by
Act No. 103, [to fix the minimum additional
compensation which an employer may be
required to pay a laborer compelled to work
on those days], but principally to exempt
public utilities affected with public interest,
from the payment of such additional
compensation. If it were the intention of the
law makers in enacting section 4 of the Act
No. 444 to fix the limit of the minimum of
additional compensation of laborers
working on those days, without exempting
the public utilities, that is, leaving intact the
general power of the court to require the
public utilities to pay said additional
compensation, the law would have only
provided, in substance, that all employers
are prohibited from compelling their
laborers to work on Sundays and legal
holidays without paying them an additional
Labor standards
Labor Law 1
BOOK III CONTINUATION
1. The Manila Electric Company v
The Public Utilities Employees
Association
Facts:
This is an appeal in the decision of
the Court of Industrial Relations which
orders the respondent company (Manila
Electric Company Inc.) to pay 50% increase
for over time work done by ordinary days
and 50%% increase for work done during
Sundays and legal holidays irrespective of
the number of days they work during the
weekdays. The MEC.inc contends that such
decision is against the provision of section
4, Commemwealth Act No. 444 which states
that No person, firm, or corporation,
business establishment or place or center
of labor shall compel an employee or
laborer to work during Sundays and legal
holidays, unless he is paid an additional
sum of at least twenty-five per centum of
his regular remuneration: Provided,
however, That this prohibition shall not
apply to public utilities performing some
public service such as supplying gas,
electricity, power, water, or providing
means of transportation or communication.
Issue:
WON the decision of the Court of
Industrial Relation was erroneous to section
4, Commemwealth Act No. 444
Held:
The CA holds the decision that the
decision made by the Court of Industrial
Relations was erroneous of contrary to the
clear and express provision of the above
mentioned provision because it restricts
section 1 of the Commomwealth Act No.
103 in the sense that public utilities
supplying electricity, gas, power, water, or
providing means of transportation or
communication may compel their
employees or laborers to work during
Sundays and legal holidays without paying
them an additional compensation of not
on the part of respondent arbitrator and not
an error of jurisdiction; that it prays for the
annulment of certain rules and regulations
issued by the Department of Labor, not for
the annulment of the voluntary arbitration
proceedings; and that appeal by certiorari
under Section 29 of the Arbitration Law,
Republic Act No. 876, is not applicable to
the case at bar because arbitration in labor
disputes is expressly excluded by Section 3
of said law.
These contentions have been ruled against
in the decision of this Court in the case of
Oceanic Bic Division (FFW) vs. Romero,
promulgated on July 16, 1984, wherein it
stated:
"We agree with the petitioner that the
decisions of voluntary arbitrators must be
given the highest respect and as a general
rule must be accorded a certain measure of
finality. This is especially true where the
arbitrator chosen by the parties enjoys the
first rate credentials of Professor Flerida
Ruth Pineda Romero, Director of the U. P.
Law Center and an academician of
unquestioned expertise in the field of Labor
Law. It is not correct, however, that this
respect precludes the exercise of judicial
review over their decisions. Article 262 of
the Labor Code making voluntary
arbitration awards final, inappealable and
executory, except where the money claims
exceed P100,000.00 or 40% of the paid-up
capital of the employer or where there is
abuse of discretion or gross incompetence
refers to appeals to the National Labor
Relations Commission and not to judicial
review.
"In spite of statutory provisions making
'final' the decisions of certain
administrative agencies, we have taken
cognizance of petitions questioning these
decisions where want of jurisdiction, grave
abuse of discretion, violation of due
process, denial of substantial justice, or
erroneous interpretation of the Law were
brought to our attention.
"A voluntary arbitrator by the nature of her
functions acts in a quasi-judicial capacity.
There is no reason why her decisions
involving interpretation of law should be
beyond this Court's review. Administrative
officials are presumed to act in accordance
with law and yet we do not hesitate to pass
compensation of not less than 50 per cent
of their regular remuneration.
2. MANTRADE v. ARBITRATOR
FROILAN M. BACUNGAN
This is a petition for Certiorari and
Mandamus filed by petitioner against
arbitrator Froilan M. Bacungan and
Mantrade Development Corporation arising
from the decision of respondent arbitrator,
the dispositive part of which reads as
follows:
"CONSIDERING ALL THE ABOVE, We rule
that Mantrade Development Corporation is
not under legal obligation to pay holiday
pay (as provided for in Article 94 of the
Labor Code in the third official Department
of Labor edition) to its monthly paid
employees who are uniformly paid by the
month, irrespective of the number of
working days therein, with a salary of not
less than the statutory or established
minimum wage, and this rule is applicable
not only as of March 2, 1976 but as of
November 1, 1974."
Petitioner questions the validity of the
pertinent section of the Rules and
Regulations implementing the Labor Code
as amended on which respondent arbitrator
based his decision.
On the other hand, respondent corporation
has raised procedural and substantive
objections. It contends that petitioner is
barred from pursuing the present action in
view of Article 263 of the Labor Code which
provides in part that "voluntary arbitration
awards or decisions shall be final,
inappealable, and executory," as well as the
rules implementing the same; the pertinent
provision of the Collective Bargaining
Agreement between petitioner and
respondent corporation; and Article 2044 of
the Civil Code which provides that "any
stipulation that the arbitrators' award or
decision shall be final, is valid, without
prejudice to Articles 2038, 2039, and 2040."
Respondent corporation further contends
that the special civil action of certiorari
does not lie because respondent arbitrator
is not an "officer exercising judicial
functions" within the contemplation of Rule
65, Section 1, of the Rules of Court; that the
instant petition raises an error of judgment
This issue was subsequently decided on
October 24, 1984 by a division of this Court
in the case of Insular Bank of Asia and
America Employees' Union (IBAAEU) vs.
Inciong, wherein it held as follows:
"WE agree with the petitioner's contention
that Section 2, Rule IV, Book III of the
implementing rules and Policy Instruction
No. 9 issued by the then Secretary of Labor
are null and void since in the guise of
clarifying the Labor Code's provisions on
holiday pay, they in effect amended them
by enlarging the scope of their exclusion (p.
11, rec.).
"Article 94 of the Labor Code, as amended
by P. D. 850, provides:
'Art. 94. Right to holiday pay.- (a) Every
worker shall be paid his regular daily wage
during regular holidays, except in retail and
service establishments regularly employing
less than ten (10) workers. x x x'
"The coverage and scope of exclusion of
the Labor Code's holiday pay provisions is
spelled out under Article 82 thereof which
reads:
'Art. 82. Coverage.- The provision of this
Title shall apply to employees in all
establishments and undertakings, whether
for profit or not, but not to government
employees, managerial employees, field
personnel, members of the family of the
employer who are dependent on him for
support, domestic helpers, persons in the
personal service of another, and workers
who are paid by results as determined by
the Secretary of Labor in appropriate
regulations.'
"From the above-cited provisions, it is clear
that monthly paid employees are not
excluded from the benefits of holiday pay.
However, the implementing rules on
holiday pay promulgated by the then
Secretary of Labor excludes monthly paid
employees from the said benefits by
inserting under Rule IV, Book III of the
implementing rules, Section 2, which
provides that: 'employees who are
uniformly paid by the month, irrespective of
the number of working days therein, with a
salary of not less than the statutory or
established minimum wage shall be
presumed to be paid for all days in the
upon their work where a question of law is
involved or where a showing of abuse of
discretion in their official acts is properly
raised in petitions for certiorari." (130 SCRA
392, 399, 400-401)
In denying petitioner's claim for holiday
pay, respondent arbitrator stated that
although monthly salaried employees are
not among those excluded from receiving
such additional pay under Article 94 of the
Labor Code of the Philippines, to wit:
ART. 94. Right to holiday pay. - (a) Every
worker shall be paid his regular daily wage
during regular holidays, except in retail and
service establishments regularly employing
less than ten (10) workers;
(b) The employer may require an employee
to work on any holiday but such employee
shall be paid compensation equivalent to
twice his regular rate; and
(c) As used in this Article, "holiday"
includes: New Year's Day, Maundy
Thursday, Good Friday, the-ninth of April,
the first of May, the twelfth of June, the
fourth of July, the thirtieth of November, the
twenty-fifth and the thirtieth of December,
and the day designated by law for holding a
general election.
they appear to be excluded under Sec. 2,
Rule IV, Book III of the Rules and
Regulations implementing said provision
which reads thus:
SEC. 2. Status of employees paid by the
month. - Employees who are uniformly paid
by the month, irrespective of the number of
working days therein, with a salary of not
less than the statutory or established
minimum wage shall be presumed to be
paid for all days in the month whether
worked or not.
Respondent arbitrator further opined that
respondent corporation does not have any
legal obligation to grant its monthly
salaried employees holiday pay, unless it is
argued that the pertinent section of the
Rules and Regulations implementing
Section 94 of the Labor Code is not in
conformity with the law, and thus, without
force and effect.
and ERNESTO S. DE
CASTRO, respondents.
Facts:
On 7 July 1988, Trans-Asia Philippines
Employees Association (TAPEA) entered into
a Collective Bargaining Agreement (CBA)
with their employer. The CBA provided for,
among others, the payment of holiday pay
with a stipulation that if an employee is
permitted to work on a legal holiday, the
said employee will receive a salary
equivalent to 200% of the regular daily
wage plus a 60% premium pay.
Despite the conclusion of the CBA,
however, an issue was still left unresolved
with regard to the claim of TAPEA for
payment of holiday pay. Since the parties
were not able to arrive at an amicable
settlement despite the conciliation
meetings, TAPEA, led by its President,
petitioner Arnie Galvez, filed a complaint for
the payment of their holiday pay in arrears.
On 18 September 1988, petitioners
amended their complaint to include the
payment of holiday pay for the duration of
the recently concluded CBA (from 1988 to
1991), unfair labor practice, damages and
attorneys fees.
In their Position Paper, TAPEA contended
that their claim for holiday pay in arrears is
based on the non-inclusion of the same in
their monthly pay.
In response, Trans-Asia contended that it
has always honored the labor law provisions
on holiday pay by incorporating the same in
the payment of the monthly salaries of its
employees. In support of this claim, Trans-
Asia pointed out that it has long been the
standing practice of the company to use
the divisor of 286 days in computing for
its employees overtime pay and daily rate
deductions for absences.
52 x 44 / 8 = 286 days
Where: 52 = number of weeks in a year
44 = number of work hours per week
8 = number of work hours per day
Trans-Asia further clarified that the 286
days divisor already takes into account the
ten (10) regular holidays in a year since it
only subtracts from the 365 calendar days
the unworked and unpaid 52 Sundays and
26 Saturdays (employees are required to
work half-day during Saturdays). Trans-Asia
claimed that if the ten (10) regular holidays
were not included in the computation of
month whether worked or not.'" (132 SCRA
663, 672-673)
This ruling was reiterated by the Court en
banc on August 28, 1985 in the case of
Chartered Bank Employees Association vs.
Ople, wherein it added that:
"The questioned Sec. 2, Rule IV, Book III of
the Integrated Rules and the Secretary's
Policy Instruction No. 9 add another
excluded group, namely 'employees who
are uniformly paid by the month'. While the
additional exclusion is only in the form of a
presumption that all monthly paid
employees have already been paid holiday
pay, it constitutes a taking away or a
deprivation which must be in the law if it is
to be valid. An administrative
interpretation which diminishes the benefits
of labor more than what the statute delimits
or withholds is obviously ultra vires." (138
SCRA 273, 282. See also CBTC Employees
Union vs. Clave, January 7, 1986, 141 SCRA
9.)
Lastly, respondent corporation contends
that mandamus does not lie to compel the
performance of an act which the law does
not clearly enjoin as a duty. True it is also
that mandamus is not proper to enforce a
contractual obligation, the remedy being an
action for specific performance (Province of
Pangasinan vs. Reparations Commission,
November 29, 1977, 80 SCRA 376). In the
case at bar, however, in view of the above-
cited subsequent decisions of this Court
clearly defining the legal duty to grant
holiday pay to monthly salaried employees,
mandamus is an appropriate equitable
remedy (Dionisio vs. Paterno, July 23, 1980,
98 SCRA 677; Gonzales vs. Government
Service Insurance System, September 10,
1981, 107 SCRA 492).
WHEREFORE, the questioned decision of
respondent arbitrator is SET ASIDE and
respondent corporation is ordered to GRANT
holiday pay to its monthly salaried
employees. No costs.
3. G.R. No. 118289 December 13,
1999
TRANS-ASIA PHILS. EMPLOYEES
ASSOCIATION (TAPEA) and ARNEL
GALVEZ, petitioners,
vs.
NATIONAL LABOR RELATIONS
COMMISSION, TRANS-ASIA (PHILS.)
Independence Day June 12
National Heroes Day Last Sunday of
August
Bonifacio Day November 30
Christmas Day December 25
Rizal Day December 30
B. Nationwide Special Days
All Saints Day November 1
Last Day of the Year December 31
On the other hand, Section 6 of the
Implementing Rules and Regulations of
Republic Act No. 6727 provides:
Sec. 6. Suggested Formula in Determining
the Equivalent Monthly Statutory Minimum
Wage Rates. Without prejudice from
existing company practices, agreements or
policies, the following formulas may be
used as guides in determining the
equivalent monthly statutory minimum
wage rates:
xxx xxx xxx
d) For those who do not work and are not
considered paid on Saturdays and Sundays
or rest days:
Equivalent Monthly = Average Daily Wage
Rate x 262 days / 12 months
Where 262 days =
250 days Ordinary working days
10 days Regular holidays
2 days Special days (If considered paid; if
actually worked, this is equivalent to 2.6
Based on the above, the proper divisor that
should be used for a situation wherein the
employees do not work and are not
considered paid on Saturdays and Sundays
or rest days is 262 days. In the present
case, since the employees of Trans-Asia are
required to work half-day on Saturdays, 26
days should be added to the divisor of 262
days, thus, resulting to 288 days. However,
due to the fact that the rest days of
petitioners fall on a Sunday, the number of
unworked but paid legal holidays should be
reduced to nine (9), instead of ten (10),
since one legal holiday under E.O. No. 203
always falls on the last Sunday of August,
National Heroes Day. Thus, the divisor that
should be used in the present case should
be 287 days.
However, the Court notes that if the divisor
is increased to 287 days, the resulting daily
rate for purposes of overtime pay, holiday
pay and conversions of accumulated leaves
would be diminished. To illustrate, if an
employee receives P8,000.00 as his
their employees monthly salary, the divisor
which they would have used would only be
277 days which is arrived at by subtracting
52 Sundays, 26 Saturdays and the 10 legal
holidays from 365 calendar days.
Labor Arbiter and NLRC: Dismissed the
complaint for lack of merit.
Issue: Whether the Trans-Asias use of 286
days as divisor is invalid.
Held:
No, it is not in such a way that the Supreme
Court adjusted the divisor.
Trans-Asias inclusion of holiday pay in
petitioners monthly salary is clearly
established by its consistent use of the
divisor of 286 days in the computation of
its employees benefits and deductions. The
use by Trans-Asia of the 286 days divisor
was never disputed by petitioners. A simple
application of mathematics would reveal
that the ten (10) legal holidays in a year are
already accounted for with the use of the
said divisor. As explained by Trans-Asia, if
one is to deduct the unworked 52 Sundays
and 26 Saturdays (derived by dividing 52
Saturdays in half since petitioners are
required to work half-day on Saturdays)
from the 365 calendar days in a year, the
resulting divisor would be 286 days (should
actually be 287 days). Since the ten (10)
legal holidays were never included in
subtracting the unworked and unpaid days
in a calendar year, the only logical
conclusion would be that the payment for
holiday pay is already incorporated into the
said divisor.
However, SC held that that there is a need
to adjust the divisor used by Trans-Asia to
287 days, instead of only 286 days, in order
to properly account for the entirety of
regular holidays and special days in a year
as prescribed by Executive Order No. 203 in
relation to Section 6 of the Rules
Implementing Republic Act 6727.
Sec. 1 of Executive Order No. 203 provides:
Sec. 1. Unless otherwise modified by law,
order or proclamation, the following regular
holidays and special days shall be observed
in the country:
A. Regular Holidays
New Years Day January 1
Maundy Thursday Movable Date
Good Friday Movable Date
Araw ng Kagitingan April 9
(Bataan and Corregidor Day)
Labor Day May 1

Facts:
Upon an inspection of the Wellington Flour
Mills, owned and operated by petitioner, the
latter was accused of non-payment of
regular holidays falling on a Sunday for
monthly-paid employees.
Petitioners Arguments:
1 Monthly salary of the monthly-paid
employees already includes holiday
pay for all the regular holidays.
2 To pay for the extra days (regular
holidays on a Sunday), as compelled
by the Order of the DOLE, it is in
effect being compelled to pay for
alleged extra working days.
DOLEs Contentions:
1 Regular holidays falling on Sundays
have precluded the enjoyment by
the employees of a non-working day
and the employees consequently
have to work for additional days.
2 When a regular holiday falls on a
Sunday, an extra or additional
working day is created and the
employer has the obligation to pay
its employees for the extra day.
Issue: Whether or not a monthly-paid
employee is entitled to an additional pay
aside from his usual holiday pay, whenever
a regular holiday falls on a Sunday.
Held:
No.
To agree with DOLEs theory would increase
the number of days in a year, instead of
365 days, as basis for computation of salary
for monthly-paid employees. There is no
provision of law requiring employers to
make adjustments in the monthly salary
rate set by them to take account of the
legal holiday falling on Sundays or to reckon
a year at more than 365 days.
5. G.R. No. 146775. January 30,
2002
San Miguel vs CA
Facts:
Upon a routine inspection done by the
Department of Labor and Employment in
the premises of San Miguel Corporation in
Iligan City, it was discovered that there was
underpayment by SMC of regular Muslim
monthly salary, his daily rate would be
P334.49, computed as follows:
P8,000.00 x 12 months / 287 days =
P334.49/day
Whereas if the divisor used is only 286
days, the employees daily rate would be
P335.66, computed as follows:
P8,000.00 x 12 months / 286 days =
P335.66/day
Clearly, this muddled situation would be
violative of the proscription on the non-
diminution of benefits under Section 100 of
the Labor Code. On the other hand, the use
of the divisor of 287 days would be to the
advantage of petitioners if it is used for
purposes of computing for deductions due
to the employees absences. In view of this
situation, the Court rules that the adjusted
divisor of 287 days should only be used by
Trans-Asia for computations which would be
advantageous to petitioners (i.e.,
deductions for absences), and not for
computations which would diminish the
existing benefits of the employees (i.e.,
overtime pay, holiday pay and leave
conversions.)
SC Decision:
WHEREFORE, the Resolutions of the NLRC,
dated 23 November 1993 and 13
September 1994, are hereby AFFIRMED
with the MODIFICATION that Trans-Asia is
hereby ordered to adjust its divisor to 287
days and pay the resulting holiday pay in
arrears brought about by this adjustment
starting from 30 June 1987, the date of
effectivity of E.O. No. 203.
4. G.R. No. 114698 July 3, 1995
Wellington Investment vs Trajano
 seamstress, sewers, basters, and
plantsadoras and are paid on a
piece-rate basis (except two
petitioners who are paid on a
monthly basis) and in addition, they
are given a daily allowance of P 3.00
provided they report before 9:30
a.m.
Work sked: 9:30-6 or 7 p.m.,
Mondays to Saturdays and even on
Sundays and holidays during peak
periods.
Unions first case was on:
underpayment of
basic wage
living allowance
non-payment of
holiday pay
service incentive pay
13th month pay
benefits provided for under
Wage Orders 1-5
While the first case was pending
decision, Pelobello left an open
package containing a jusi barong
tagalong with salesman Rivera. He
was caught and confronted about
this and he explained that this was
ordered by Zapata, also a worker, for
his (personal) customer. Zapata
allegedly admitted that he copied
the design of the company but later
denied ownership of the same.
They were made to explain why no
action should be taken against them
for accepting a job order which is
prejudicial and in direct competition
with the business. However they did
not submit and went on AWOL until
the period given for them to explain
expired hence the dismissal.
Illegal dismissal complaint on the
second case filed before the LA
Diosana.
LA declared petitioners guilty of
illegal dismissal and ordered to
reinstate Pelobello and Zapata and
found petitioners violating decrees
of COLA, service incentive and 13th
month pay. Commission analyst was
directed to compute the monetary
awards which retroacts to three
years prior to filing of case.
NLRC affirmed but limited
backwages to one year.
Holiday pay to its employees. SMC received
the inspection result which later on
contested such thus DOLE conducted
summary hearings. Both DOLE Regional
Office and National Office ruled against
SMC ordering the latter to consider Muslim
Holidays as regular holidays and to pay its
Muslim and non-Muslim employees holiday
pay.
Thus, this appeal.
Issue:
Whether or not the Muslim holiday pay is
applicable to employees regardless of faith
or religion
Held:
Yes.
Although Article 3 of Presidential Decree
1083 (Code of Muslim Personal Laws)
provides that the provisions of the code
shall be applicable only to Muslims, on
which the petitioner based its defense, the
same article provides further that nothing
in the code shall be construed to the
prejudice of non-Muslims. The Supreme
Court stated that there should be no
distinction between Muslims and non-
Muslims as regards the payment of benefits
for Muslim Holidays. The Court, quoting the
Court of Appeals, assuming that the SMC is
correct, then Muslims throughout the
Philippines are also not entitled to holiday
pays on Christian holidays declared by law.
We must remind (SMC) that wages and
other emoluments granted by law are
determined not on the basis of the workers
faith or religion, finds against the
petitioner, and dismissed the petition.
6. Makati Haberdashery vs NLRC,
179 SCRA 449 (89)
Penned by Justice Fernan
Nature:
Petition for certiorari to review the decision
of the NLRC which affirmed the decision of
the Labor Arbiter who jointly heard and
decided two cases filed by the Union in
behalf of the private respondents
Facts:
Private complainants are working for
Makati Haberdashery Inc as tailors,

COLA
Held: Entitled. They are regular employees.
IRR of Wage No. 1, 2, and 5 provide that all
workers in the private sector, regardless of
their position, designation of status, and
irrespective of the method by which
their wages are paid are entitled to such
allowance.
13th Month pay
Held: Entitled under Sec. 3(e) of the IRR of
PD 851 which is an exception to the
exception of such provision which states
that employers whose workers are paid on
piece-rate basis in which are covered by
such issuance in so far as such workers are
concerned.
Illegal dismissal
Held: Dismissed for justifiable ground based
on Article 283 (a) and (c). Inimical to the
interest of the employer. Not dismissed just
because of union activities.
7. G.R. No. 123938 May 21, 1998
Labor Congress of the Philippines vs. NLRC
Ponente: J. Davide, Jr.
Doctrine:
Application of LC Article 286(n) in determination of
status of piece workers as regular workers versus LC
Article 86 definition
Facts:
The 99 persons (Ana Marie Ocampo, Mary Intal, et al)
as private petitioners in the proceeding (represented
by the Labor Congress of the Phils.) were rank-and-file
employees of private respondent Empire Food
Products (a food and fruit processing company), hired
on various dates.
Ocampo et al filed against Empire an NLRC complaint
for payment of money claims and for violation of labor
standards laws. Alongside this they also filed a petition
for direct certification for the Labor Congress to be
their bargaining representative. On Oct. 23, 1990,
petitioners represented by LCP, and private
respondents Gonzalo and Evelyn Kehyeng (Kehyeng
spouses) entered into a Memorandum of Agreement,
recognizing the following:
Issue: WON employees paid on piece-rate
basis are entitled to service incentive pay
(relevant to title)
Held: NO, fall under exceptions set forth in
the implementing rules
Ratio:
A
s to the service incentive leave pay:
as piece-rate workers being paid at a
fixed amount for performing work
irrespective of time consumed in the
performance thereof, they fall under
the exceptions stated in Sec 1(d),
Rule V, IRR, Book III, Labor Code.
Service Incentive Leave
SECTION 1. Coverage. This rule shall
apply to all employees except:
(d) Field personnel and other employees
whose performance is unsupervised by
the employer including those who are
engaged on task or contract basis,
purely commission basis, or those who
are paid a fixed amount for
performing work irrespective of the
time consumed in the performance
thereof;
Other issues discussed:
ER-EE relationship
Held: There is such relationship because in
the application of the four-fold test, it was
found that petitioners had control over the
respondents not only as to the result but
also as to the means and method by which
the same is to be accomplished. Such
control is proven by a memorandum which
enumerates procedures and instructions
regarding job orders, alterations, and their
behavior inside the shop.
Minimum Wage
Held: No dispute that entitled to minimum
wage but court dismissed case for lack of
sufficient evidence to support claim that
there was in fact underpayment which was
ruled by the LA and which the private resp
did not appeal to in the NLRC nor in the SC.
Well-settled is the rule that an appellee
who has not himself appealed cannot
obtain from the appellate court any
affirmative relief other than the ones
granted in the decision of the court below.
 Declaration of ULP connotes a finding of
prima facie evidence of probability that a
criminal offense may have been committed so
as to warrant the filing of a criminal
information before the regular court.
As regards the issue of harassment, threats
and interference with the rights of employees
to self-organization which is actually an
ingredient of unfair labor practice,
complainants failed to specify what type of
threats or intimidation was committed and
who committed the same.
NLRC (Part 2):
Affirmed LA decision Part 2.
Petitioners:
The fact that they are piece workers does not
imply that they are not regular employees
entitled for reinstatement.
LA and NLRC decisions were not supported by
substantial evidence;
Abandonment of work was not proved by
substantial evidence;
Much credit given to the Kehyeng spouses
self-serving arguments.
Respondents:
Ana Marie, et al were piece workers hence
they are exempt from labor standards
benefits
Issues:
1. [RELEVANT] WON the petitioners are entitled
to labor standard benefits, considering their
status as piece rate workers.
2. WON the actions of Ana Marie, et al
constituted abandonment of work.
Held:
1. YES, petitioners are entitled to labor
standards benefits, namely, holiday pay,
premium pay, 13th month pay and service
incentive leave.
2. NO, failure to appear to work did not
constitute abandonment,
Ratio:
Supreme Court decision cites that Ana Marie, et al,
despite being pakyao or piece workers does not
imply that they are not regular employees entitled to
reinstatement. Applying the two-fold test from LC
Article 286(n) [Art. 280 (old)], the SC found that the
Status of LCP as sole and exclusive Bargaining
Agent and Representative for all rank and file
employees of the Empire Food Products
regarding "wages, hours of work, and other
terms and conditions of employment";
With regard to the NLRC complaint, all
parties agree to resolve the issues during the
Collective Bargaining Agreement;
Proper adjustment of wages, withdrawal of
case from the Calendar of NLRC, non-
interference or any ULP act, etc.
On Oct. 24, 1990, the Mediator Arbiter approved the
memorandum and certified LCP as the sole and
exclusive bargaining agent for the rank-and-file
employees of Empire.
On November 1990, LCP President Navarro submitted
to Empire a proposal for collective bargaining.
However, on January 1991, the private petitioners Ana
Marie et al filed a complaint for:
Unfair Labor Practices via Illegal Lockout and
Dismissal;
Union-Busting through harassment, threats
and interference to the right for self-
organization;
Violation of the Oct. 23, 1990 memorandum
Underpayment of wages
Actual, moral and exemplary damages
Labor Arbiter (Part 1):
Absolved Empire for ULP, union busting,
violation of the memorandum of agreement,
underpayment of wages and denied
petitioners' prayer for actual, moral and
exemplary damages.
Denied prayer for actual, moral and
exemplary damages
Directed reinstatement of complainants, due
to the fact that Empire did not keep its payroll
records as per requirement of the DOLE.
Admonition to Empire given as well re:
further harassment and intimidation.
NLRC (Part 1):
Remanded case to Labor Arbiter for further
proceedings due to overlooking the
testimonies of some of the individual
complainants which are now on record.
Labor Arbiter (Part 2):
Complainants failed to present with
definiteness and clarity the particular act or
acts constitutive of unfair labor practice.
 case shall the holiday pay be less than the
applicable statutory minimum wage rate.
In addition, the Revised Guidelines on the
Implementation of the 13th Month Pay Law, in view of
the modifications to P.D. No. 851 19 by Memorandum
Order No. 28, clearly exclude the employer of piece
rate workers from those exempted from paying 13th
month pay, to wit:
2. EXEMPTED EMPLOYERS - The
following employers are still not covered by
P.D. No. 851:
d. Employers of those who are
paid on purely commission,
boundary or task basis, and those
who are paid a fixed amount for
performing specific work,
irrespective of the time consumed in
the performance thereof, except
where the workers are paid on
piece-rate basis in which case the
employer shall grant the required
13th month pay to such workers.
However, the Revised Guidelines as well as the Rules
and Regulations identify those workers who fall under
the piece-rate category as those who are paid a
standard amount for every piece or unit of work
produced that is more or less regularly replicated,
without regard to the time spent in producing the
same.
They should also be paid for overtime pay, even
though Sec. 2(e), Rule I, Book III of the Implementing
Rules states that:
workers who are paid by results including
those who are paid on piece-work, takay,
pakiao, or task basis, if their output rates are
in accordance with the standards prescribed
under Sec. 8, Rule VII, Book III, of these
regulations, or where such rates have been
fixed by the Secretary of Labor in accordance
with the aforesaid section, are not entitled to
receive overtime pay.
In this case, Empire Foods did not allege that they
adhered to the standards set forth in Sec. 8, Rule
VII, Book III, nor with the rates prescribed by
the Secretary of Labor. Therefore, even though they
are piece workers, they are entitled to overtime pay.
With regard to the issue of abandonment of work, the
SC cited the Office of Solicitor Generals observations:
supposedly piece workers had three factors in their
favor:
a) The nature of the tasks of Ana Marie, et al of
repacking snack food items was NECESSARY
and DESIRABLE in the usual business of
Empire Foods, which is a food and fruit
processing company. According to Tabas vs
California Manufacturing, merchandisers of
processed food who coordinates for sales of
processed food was a necessity and was
desirable for the day-to-day operations of a
food processing company. With more reason
would the job of food packers be necessary
for the day-to-day operations of a food
processing plant.
b) Ana Marie et al worked throughout the year,
with their employment being independent
from a specific project or season.
c) The length of time that petitioners fulfilled
the requirement of Article 286(n).
Therefore, the SC considered the employees as regular
employees despite their status as piece workers,
according them benefits such as holiday pay, premium
pay, 13th month pay and service incentive leave.
The Rules Implementing the Labor Code exclude
certain employees from receiving benefits such as
nighttime pay, holiday pay, service incentive leave and
13th month pay, inter alia, "field personnel and other
employees whose time and performance is
unsupervised by the employer, including those who
are engaged on task or contract basis, purely
commission basis, or those who are paid a fixed
amount for performing work irrespective of the time
consumed in the performance thereof." However,
petitioners as piece-rate workers do not fall within this
group. Not only did the employees labor under the
control of Empire, the employees also worked
throughout the year to fulfil their quota as basis for
compensation.
Further, in Section 8 (b), Rule IV, Book III, piece
workers are specifically mentioned as being entitled to
holiday pay.
Sec. 8. Holiday pay of certain employees.
(b) Where a covered employee is paid
by results or output, such as payment on
piece work, his holiday pay shall not be less
than his average daily earnings for the last
seven (7) actual working days preceding the
regular holiday: Provided, however, that in no
Certiorari seeking the reversal of the two In finding that petitioner employees
petitions to the NLRC abandoned their work, the Labor Arbiter and
the NLRC relied on the testimony of Security
Facts: Guard Rolando Cairo that on January 21,
1991, petitioners refused to work. As a result
F of their failure to work, the cheese curls ready
ive employees of Sentinel Security for repacking on said date were spoiled
Agency filed for illegal dismissal
against the Agency and its Client The failure to work for one day, which
Philamlife Cebu and prayed for
resulted in the spoilage of cheese curls does
payment of salary differential,
not amount to abandonment of work. In fact
service incentive pay, and
two (2) days after the reported abandonment
separation pay.
of work or on January 23, 1991, petitioners
T
filed a complaint for, among others, unfair
he complainants were assigned to
labor practice, illegal lockout and/or illegal
Philamlife Cebu but after nearly 20
dismissal.
years for some employees and more
than 20 years for some, Philam
requested on Dec 16, 1993 that Furthermore, the SC stressed that the burden of
security guards be replaced in the proving the existence of just cause for dismissing an
Clients offices in Cebu, Bacolod, employee, such as abandonment, rests on the
CDO, Dipolog and Iligan. employer. According to the SC, Empire Foods failed to
A discharge this burden as basis for dismissing the
gency issued a Relief and Transfer employees.
Order replacing the guards and for
them to be reassigned to other Also, the SC considered that, in terminating the
clients effective on Jan 16 1994. On employees for abandonment of work, Empire failed to
Jan 18 and Feb 4 1994, the serve to the employees a written notice of termination
employees filed an illegal dismissal (as required by the Two-Notice rule and Section 2,
complaint because of a threat from Rule XIV, Book V of the Omnibus Rules), violating the
the personnel manager who told employees right to security of tenure and the
them that they were replaced constitutional right to due process.
because they were old.
H
ence the complaint against the
Agency and the Client.
C
lient and Agencys defense: No
dismissal because the contract
allows them to recall security guards
from assigned posts at the will of
either party and that the Agency is
allowed for a period of not more
than six months, to retain the
complainants on floating status.
Agency should have been given a
chance to give new assignments to
complainants.
C
lients defense: No ER-EE 8. Sentinel Security Agency, Inc. v.
relationship. Job contract, separate NLRC, 295 SCRA 123 1998)
corporate personalities and not
necessary and desirable to the Penned by Justice Panganiban
business or trade.
Nature:
 requires a deliberate and unjustified
refusal of an employee to resume to
his work coupled with a clear
absence of any intention to return to
his/her work and the fact that
complainants did not pray for
reinstatement is not a sufficient
proof of abandonment, you moron.
They reported to the Agency on
several dates but it did not give any
reassignment. Abandonment has
been ruled to be incompatible with
constructive dismissal as stated in
Escobin vs NLRC. Because I am
infallible and you are in dire need of
enlightenment, let me demonstrate
the correct reasoning why they are
illegally dismissed.
It has been recognized that the
management has a prerogative to
transfer an employee from one
office to another within the same
business establishment as the
exigency of the business may
require provided that transfer:
- reasons for ruling that there was ID.
does not result in a demotion in rank
- wanted
diminution in salary, benefits, and other
privileges
- unsupported!
not unreasonable, inconvenient or
prejudicial to the latter
- temporary off-detail which is a
not used as a subterfuge by the
employer to rid himself of an
undesirable worker
SC: Solgen, in case you dont know
what a transfer means, let me
extend my unparalleled mastery of
this craft which,unfortunately, you
dont have:
- Transfer may mean two things: a) from
one position to another of equivalent
rank, level or salary b) from one office
to another within the same business
establishment. Oh please, do not even
think this is equivalent to promotion
because the latter involves a scalar
ascent.
It should have been a mere changing of
the guards, a reshuffling or exchange
of their posts or assignments to their
LA: Agency and Client ordered to pay
solidarily complainants 13th month pay and
service incentive leave benefits amounting
to a little more than P60K.
NLRC: There was constructive dismissal.
Modified awards. Deleted 13th month pay
for previous years. Twin remedies. Ordered:
1) A
gency to give separation pay at the
rate of month pay for every year
of service and
2) A
gency and Client to solidarily pay
backwages and 13th month pay for
one year (Jan 1994-1995).
Issue: 1) WON there was illegal dismissal
2) And if so, WON Philam may be held
liable
Held:
1)
Yes there was illegal dismissal but SC
does not agree with NLRC for its
NLRCs reason: Client and Agency
to circumvent the
Retirement Law. SC: You NLRC are
speculating and your contention is
SOLGEN: Complainants were placed on
standard stipulation in employment
contracts since the availability of
assignment for security guards is
dependent on contracts entered into
by the agency. Off-detail or Floating
status means waiting to be posted
and this is not dismissal so long as
such status does not continue
beyond a reasonable time.
However SOLGEN made a
pronouncement that although
abandonment is inconsistent with
illegal dismissal, such rule is not
applicable when the complainants
expressly reject this relief and ask
for separation pay instead.
SC (with conviction): You are wrong
SolGen! How dare you be wrong?
You know that abandonment

Art. 95 of the LC expressly provides that
service incentive leave is expressly
granted to every employee who has
rendered at least one year or service
shall be entitled to a yearly service
incentive leave of five days with pay.
IRR of the LC: Unused service incentive
leave is commutable to its money
equivalent as provided by Sec. 5:
The service incentive leave shall be
commutable to its money equivalent
if not used or exhausted at the end
of the year
Pau: May the contrary be stipulated? If
yes, when? Supposing the employer
gives more than 5 days of service
incentive leave, can they now stipulate
that such leaves may not be converted
to its money equivalent? When can such
leaves be not converted into cash?
9. AUTO BUS TRANSPORT
SYSTEMS, INC. v. ANTONIO BAUTISTA
G.R. No. 156367, May 16, 2005
CHICO-NAZARIO, J.
FACTS: Antonio Bautista has been
employed by Autobus, as driver-conductor
and was paid on commission basis, seven
percent (7%) of the total gross income per
travel, on a twice a month basis. One day,
while Bautista was driving Autobus No. 114,
he accidentally bumped the rear portion of
Autobus No. 124. Bautista averred that the
accident happened because he was
compelled by the management to go back
to Roxas, Isabela, although he had not slept
for almost 24 hours, as he had just arrived
in Manila from Roxas, Isabela. He further
alleged that he was not allowed to work
until he fully paid 30% of the cost of repair
of the damaged buses and that his pleas for
reconsideration were ignored by
management. After a month, management
sent him a letter of termination. Thus, he
instituted a Complaint for Illegal Dismissal
with Money Claims for nonpayment of 13th
month pay and service incentive leave pay.
Autobus maintained that Bautistas
employment was replete with offenses.
Furthermore, Autobus avers that in the
posts and such that no security guard
would be without assignment. But did
the Agency implement such
recognized concept? NO!!! It hired
new security guards, younger, braver,
full of life men whose age are in their
prime! This resulted in a lack of posts
to which the senile, used and wrinkled
men could have been reassigned.
Floating status requires the dire
exigency of the employers bona fide
suspension of operation, business or
undertaking. In security services, this
happens when the clients do not
renew their contracts with a security
agency but in the case at bar, the
Client awarded a new contract to the
Agency. No surplus of security guards
over available assignments. No
suspension of operation that would
have justified placing the
complainants off-detail and making
them wait for 6 months.
SC: The logical conclusion here Solgen,
in case you dont know whats logical,
is that the Agency illegally dismissed
the complainants.
2) Only solidarily to the service
incentive leave pay. Since no ER-EE
relationship between Client and
complainants, cannot be held liable
for separation pay and backwages.
Art 106, 107 and 109 provide when the
principal who contracted the
contractor/subcontractor may be
held solidarily liable. Art 109 states
that every employer or indirect
employer shall be held responsible
with his contractor or subcontractor
for any violation of any provision of
this Code. In determining the extent
of their civil liability under this
Chapter, they shall be considered
direct employers.
Such liability covers service incentive
leave pay of the complainant during
the time they were posted at the
Cebu Branch. Service had been
rendered, liability accrued even
when they were eventually
transferred or reassigned.
the premises at specific times and arrive at
the estimated proper time. These, are
present in the case at bar. The driver, the
complainant herein, was therefore under
constant supervision while in the
performance of this work. He cannot be
considered a field personnel.
Therefore, Bautista is not a field personnel
but a regular employee who performs tasks
usually necessary and desirable to the
usual trade of business of Autobus.
Accordingly, Bautista is entitled to the grant
of service incentive leave.
10. Philippine Fisheries
Development Authority v. NLRC, 213
SCRA 621 (1992)
Issue 1: WON an indirect employer is bound
by the ruling of NLRC which made the
indirect employer liable when the guards
are not employees of the petitioner
because the contract of services explicitly
states that the security guards are not their
employees thus, no employer-employee
relationship, thus the jurisdiction of the CSC
may not be invoked in this case.
Held:
Notwithstanding that the petitioner
is a government agency, its
liabilities, which are jointly and
solidary with that of the contractor
are provided in Art. 106, 107 and
109.
exercise of its management prerogative,
Bautista's employment was terminated only
after the latter was provided with an
opportunity to explain.
The Labor Arbiter dismissed the complaint
but ordered Autobus to pay his 13th month
pay from the date of his hiring to the date
of his dismissal, as well as his service
incentive leave pay for all the years he had
been in service. Autobus appealed to the
NLRC which deleted the award of 13 th
month pay based on the Rules and
Regulations Implementing Presidential
Decree No. 851, particularly Sec. 3 which
exempts employers of those who are paid
on purely commission, boundary, or task
basis. Records showed that Bautista, in his
position paper, admitted that he was paid
on a commission basis. The award of
service incentive leave pay was
maintained. Thus, Autobus sought a
reconsideration which was denied by NLRC.
CA affirmed the decision of the NLRC.
ISSUE: Whether or not Bautista is entitled
to service incentive leave.
HELD: The contention of Autobus that
Bautista is not entitled to the grant of
service incentive leave just because he was
paid on purely commission basis is
misplaced. What must be ascertained in
order to resolve the issue of propriety of the
grant of service incentive leave to
respondent is whether or not he is a field
personnel.
Along the routes that are plied by these bus
companies, there are its inspectors
assigned at strategic places who board the
bus and inspect the passengers, the
punched tickets, and the conductors
reports. There is also the mandatory once-
a-week car barn or shop day, where the bus
is regularly checked as to its mechanical,
electrical, and hydraulic aspects, whether
or not there are problems thereon as
reported by the driver and/or conductor.
They too, must be at a specific place at a
specified time, as they generally observe
prompt departure and arrival from their
point of origin to their point of destination.
In each and every depot, there is always
the Dispatcher whose function is precisely
to see to it that the bus and its crew leave
EAGLE. However, in order for the security
agency to comply with the new wage and
allowance rates it has to pay the security
guards, the Wage Order made specific
provision to amend existing contracts for
security services by allowing the
adjustments of the consideration paid by
the principal to the security agency
concerned. What the Wage orders require,
therefore, is the amendment of the contract
as to the consideration to cover the service
contractors payment of the increases
mandated. In the end, therefore, ultimate
liability for the payment of the increasees
rests with the principal.
The Wage Orders are statutory and
mandatory and can not be waived.
The petitioner can not escape
liability since the law provides the
joint and solidary liability of the
principal and the contractor for the
protection of the laborers.
But the Court here did not apply the
Eagle case because the petitioner is
equally guilty by not abiding to the
law in the subsequent change of
contract even when the WO6 was
already implemented.
Therefore, security guards
immediate recourse is with direct
employer but the latter is not
prejudiced as to the claim of of
the wages it shall give the guards.
Doctrine: Principal liable for Wage
Orders mandating wage increases. But
when principal cannot pay, contractor is
the immediate recourse and should pay
the whole claim with right to
reimbursement from principal. But if
contractor is at fault, will be liable to
of the claim.
11. Chavez v. NLRC
448 SCRA 478
Facts
Petitioner Pedro Chavez was hired as
truck driver of Private Respondent
Supreme Packaging, Inc.
Its liabilities are under the NLRC
scope and in addition, book three
title ii on wages provides that the
term employer includes any
person acting directly or
indirectly in the interest of an
employer in relation to an
employee and shall include the
Government and all its
branches, subdivisions and
instrumentalities, all GOCCs and
institutions as well as non-profit
private institutions or
organizations.
Issue 2: Who should carry the burden of the
wage increases?
Held:
It is settled that in job contracting,
the petitioner as principal is jointly
and severally liable with the
contractor for the payment of unpaid
wages. In the case at bar, the action
was for the payment of unpaid wage
differentials under Wage Order No.
6.
In the case of Eagle Security vs.
NLRC:
The solidary liability of PTSI and EAGLE,
however, does not preclude the right of
reimbursement from his co-debtor by the
one who paid. It is with respect to this right
of reimbursement that petitioners can find
support in the aforecited contractual
stipulation and Wage Order provision.
The Wage Orders are explicit that the
payment of the increases are to be borne
by the principal or client. To be borne,
however, does not mean that the principal,
PTSI in this case, would directly pay the
security guards the wage and allowance
increases because there is no privity of
contract between them. The security
guards contractual relationship is with their
immediate employer, EAGLE. As an
employer, EAGLE is tasked, among others,
with the payment of their wages.
Premises considered, the security guards
immediate recourse for the payment of the
increases is with their direct employer,
 2. Chavez is not and Independent
Contractor
* Proof that Chavez is not an Independent
Contractor
1. Chavez did not own the truck
2. SPI did not have substantial
capitalization or investment
3. Delivery was exclusively done for
SPI for 10years
* Er-Ee Relationship cannot be negated by
expressly repudiating it in contract and
providing therein that the employee is an
independent contractor. Indeed the
employment status of the person is defined
and prescribed by law and not by what
parties say it should be.
12. Aklan Electric Corp., Inc. v.
NLRC, 323 SCRA 259 (2000)
Facts:
Employees working at Lezo but were told to
transfer to Kalibo but they did not transfer.
Claiming salaries, wages and benefits.
Issue: WON they are entitled to salaries and
benefits.
Held: No. The employer gave orders to the
employees to transfer office because of the
dangers the environment poses to the
company, yet the employees disobeyed.
Moreover, the transfer of office was
approved by NEA Administrator in its
exercise of supervision and control over all
electric cooperatives. When the business
transferred, what was left to the employees
to work on? Thus no basis that the
employees continued to report for work in
Lezo.
The age-old rule governing the relation
between labor and capital, or management
and employee of a fair days wage for a
fair days labor remains as the basic
factor in determining employees wages. If
there is no work performed by the
employee there can be no wage or pay
unless, of course, the laborer was able,
willing and ready to work but was illegally
locked out, suspended or dismissed, or
otherwise illegally prevented from working,
Chavez requested to avail himself of
the benefits that a regular
employees were receiving but his
request was denied
Chavez filed before NLRC a
complaint for regularization. Later
on he was dismissed by SPI
He later on filed an amended
complaint for illegal dismissal
Issue
1. W/N there existed an employer-
employee relationship between SPI
and Chavez?
2. W/N Chavez is an independent
contractor?
Held
1. Yes, there existed an
employer-employee
relationship between SPI and
Chavez
Applying four-fold test, all elements
are present
1. selection and engagement of the
employee
- it was SPI who engaged the services of
Chavez without intervention of third party
2. payment of wages
- that petitioner was paid on per trip basis
is not significant, this is merely a method of
computing compensation and not a basis
for determining the existence or absence of
er-ee relationship
3. power of dismissal
- power to dismiss was inherent in the fact
that they engaged the services of Chavez as
driver
4. power to control employee's conduct
- an employee is subject to employer's
power to control the means and method by
which the work is to be performed while an
independent contractor is free from control
and supervision of employer
* Manifestation of Power of Control of SPI
to Chavez
1. truck was owned by SPI
2. express instruction in the method
of delivery
3. instruction on parking of delivery
truck
4. instruction on when and where
Chavez would perform his task by
issuing to him gate passes and
routing slips
appropriate bargaining unit, eventually
caused a deadlock between the parties.
ISAE filed a notice of strike. Due to the
failure to reach a compromise in the NCMB,
the matter reached the DOLE which favored
the School. Hence this petition.
ISSUE:
Whether the foreign-hires should be
included in bargaining unit of local- hires.
RULING:
NO. The Constitution, Article XIII, Section 3,
specifically provides that labor is entitled to
humane conditions of work. These
conditions are not restricted to the physical
workplace the factory, the office or the
field but include as well the manner by
which employers treat their employees.
Discrimination, particularly in terms of
wages, is frowned upon by the Labor Code.
Article 248 declares it an unfair labor
practice for an employer to discriminate in
regard to wages in order to encourage or
discourage membership in any labor
organization.
The Constitution enjoins the State to
protect the rights of workers and promote
their welfare, In Section 18, Article II of the
constitution mandates to afford labor full
protection. The State has the right and
duty to regulate the relations between labor
and capital. These relations are not merely
contractual but are so impressed with
public interest that labor contracts,
collective bargaining agreements included,
must yield to the common good.
However, foreign-hires do not belong to the
same bargaining unit as the local-hires.
A bargaining unit is a group of employees
of a given employer, comprised of all or
less than all of the entire body of
employees, consistent with equity to the
employer indicate to be the best suited to
serve the reciprocal rights and duties of the
a situation we find is not present in the
instant case. It would neither be fair nor
just to allow private respondents to recover
something they have not earned and could
have not earned because they did not
render services at the Kalibo office during
the stated period.
13. INTERNATIONAL SCHOOL
ALLIANCE OF EDUCATORS (ISAE),
petitioner, vs. HON. LEONARDO A.
QUISUMBING in his capacity as the
Secretary of Labor and Employment;
HON. CRESENCIANO B. TRAJANO in his
capacity as the Acting Secretary of
Labor and Employment; DR. BRIAN
MACCAULEY in his capacity as the
Superintendent of International
School-Manila; and INTERNATIONAL
SCHOOL, INC., respondents.,
G.R. No. 128845, June 1, 2000
FACTS:Private respondent International
School, Inc. (School), pursuant to PD 732, is
a domestic educational institution
established primarily for dependents of
foreign diplomatic personnel and other
temporary residents. The decree authorizes
the School to employ its own teaching and
management personnel selected by it
either locally or abroad, from Philippine or
other nationalities, such personnel being
exempt from otherwise applicable laws and
regulations attending their employment,
except laws that have been or will be
enacted for the protection of employees.
School hires both foreign and local teachers
as members of its faculty, classifying the
same into two: (1) foreign-hires and (2)
local-hires.
The School grants foreign-hires certain
benefits not accorded local-hires. Foreign-
hires are also paid a salary rate 25% more
than local-hires.
When negotiations for a new CBA were held
on June 1995, petitioner ISAE, a legitimate
labor union and the collective bargaining
representative of all faculty members of the
School, contested the difference in salary
rates between foreign and local-hires. This
issue, as well as the question of whether
foreign-hires should be included in the
salaries of employees who fell below parties under the collective bargaining
provisions of the law.
the new minimum rates were also
adjusted to reach such rates under
their levels. The factors in determining the appropriate
collective bargaining unit are (1) the will of
the employees (Globe Doctrine); (2) affinity
and unity of the employees interest, such
Bankard Employees Union-WATU
as substantial similarity of work and duties,
pressed for an increase in the salary
or similarity of compensation and working
of its old, regular employees, but conditions (Substantial Mutual Interests
Bankard took the position that it had Rule); (3) prior collective bargaining history;
no obligation to grant an across-the- and (4) similarity of employment status.
board salary increase. The basic test of an asserted bargaining
Issue: units acceptability is whether or not it is
fundamentally the combination which will
best assure to all employees the exercise of
their collective bargaining rights.
Does wage distortion exist in this
situation?
Ruling: In the case at bar, it does not appear that
foreign-hires have indicated their intention
to be grouped together with local-hires for
purposes of collective bargaining. The
Article 124 of the Labor Code
collective bargaining history in the School
defines wage distortion as a
also shows that these groups were always
situation where an increase in treated separately. Foreign-hires have
prescribed wage rates results in the limited tenure; local-hires enjoy security of
elimination or severe contraction of tenure. Although foreign-hires perform
intentional quantitative differences similar functions under the same working
conditions as the local-hires, foreign-hires
in wage or salary rates between &
are accorded certain benefits not granted
among employee groups in an
to local-hires such as housing,
establishment as to effectively transportation, shipping costs, taxes and
obliterate the distinctions embodied home leave travel allowances. These
in such wage structure based on benefits are reasonably related to their
skills, length of service, or other status as foreign-hires, and justify the
logical bases of differentiation. exclusion of the former from the latter. To
include foreign-hires in a bargaining unit
with local-hires would not assure either
group the exercise of their respective
The four elements of wage
collective bargaining rights.
distortion are:

. 1) An existing hierarchy of WHEREFORE, the petition is GIVEN DUE

COURSE. The petition is hereby GRANTED
positions with corresponsing
IN PART.
salary rates

14. Bankard Employees Union-

. 2) A significant change in the
Workers Alliance Trade Unions v. NLRC
salary rate of a lower pay
Facts:
class without concomitant
increase The Board of Directors of Bankard,
in the salary rate of a higher Inc. approved a New Salary Scale
one which increased the hiring rates of
new employees. Accordingly, the
 . 3) The elimination of the
The case where the salesman and truck
distinction between the two
helpers received commission for cases sold.
Then there were irregularities and the levels
respondents were prompted to report cash
shortages. After a few days, they stopped
reporting for work, thus the conclusion of . 4) The existence of the
abandonment. Terminated without notice. distortion in the same region
of the country.
On the other hand, complain for illegal
dismissal, deduction, underpayment of
wages, premium pay for holiday and rest
day, holiday pay, incentive pay, etc. Bankards wage structure is based
on level, and not seniority; hence
Issue: there is no hierarchy of positions.
Even assuming that there is a
WON commissions in the computation of
decrease in the wage gap of the old
wages must only be paid after the minimum
and new employees, the Court finds
wage has been paid, thus excluding
commissions in the computation for that the gap is not so significant so
nd rd
benefits which rely on wage. as to satisfy the the 2 and 3
elements of wage distortion.
Held: No.

The Court has taken judicial notice of the In addition, Article 124 (LC) refers
fact that some salesman do not receive any
to a wage distortion resulting from a
basic salary but depend entirely on
prescribed wage increase by virtue
commissions and allowances or
commissions alone, although an employer- of a law or Wage Order issued by
employee relationship exists. any Regional Board. Clearly,
Bankards New Salary Scale is
This salary structure is intended for the neither of the two.
benefit of the corporation establishing such,
on the apparent assumption that thereby its
salesmen would be moved to greater
The mere factual existence of
enterprise and diligence and close more
wage distortion does not, ipso facto
sales in the expectation of increasing their
sales commission. But this does not detract result to an obligation to rectify it,
from the character of such commissions as absent a law or other source of
part of the salary or wage paid to each of obligation which requires its
its salesmen for rendering services to the rectification. This Court will not step
corporation. in to interfere with Bankards
There is no law mandating that
management prerogative.
commissions be paid only after the
minimum wage has been paid to the
The is no wage distortion in the
employee. Verily, the establishment of a
instant case.
minimum wage only sets a floor below
which an employees remuneration cannot
fall, not that commissions are excluded
from wages in determining compliance with
15. Arms Taxi v NLRC SCRA
the minimum wage law.

In one case it was acknowledged that

drivers and conductors who are
compensated purely on a commission basis
16. Iran v. NLRC, 289 SCRA 433
are automatically entitled to the basic
(1998)
should receive separation pay.
Under the employment contract, each of
the dismissed employees receive a monthly
salary of P40,000 plus commissions for
every sale they made. On the other hand,
the CBA entered between Zuellig and the
union contained the provision that an
employee who is permanent lay-off, should
receive an amount equivalent to one
month's salary per year of service. On the
other hand, Article 284 of the Labor Code
and Implementing Rules provide that the
retrenched employees should receive a
separation pay equivalent to one month
pay or at least one-half month pay for every
year of service, whichever is higher.
The dismissed employees alleged that their
earned sales commission should be
included in their monthly salary for the
purpose of computation of their separation
pay.
In defense, Zuellig argued that if it were
really the intention of the Labor Code to
include commission in the computation of
separation pay, it could have explicitly said
so in clear and unequivocal terms.
Furthermore, in the definition of the term
"wage", "commission" is used only as one
of the features or designations attached to
the word remuneration or earnings.
The Labor Arbiter ordered the company to
pay the dismissed employees their
separation pay equivalent to their one
month salary (exclusive of commissions,
allowances, etc.) for every year of service.
The NLRC affirmed the Labor Arbiters
decision.
Held:
Transportation and emergency living
allowances are included in the
computation of separation pay
1. In the computation of backwages and
separation pay, the transportation and
emergency living allowances should also be
taken together with the basic salary. (See
Santos v. NLRC)
Earned sales commissions are included
in the computation of separation pay
2. Article 97(f) of the Labor Code is explicit
that commission is included in the definition
minimum pay mandated by law should said
commission be less than their basic
minimum for eight hours work. It can thus
be inferred that where said commissions
equal to or even exceed the minimum
wage, the employer need not pay, in
addition, the basic minimum pay prescribed
by law. It follow then that commissions are
included in determining compliance with
minimum wage requirements.
17. Millares v. NLRC & PICOP, 305
SCRA 500 (1999)
18. Songco v. NLRC (1990)
G.R. Nos. 50999-51000 | 1990-03-23
Subject: Transportation and emergency
living allowances are included in the
computation of separation pay; Earned
sales commissions are included in the
computation of separation pay; Judicial
Notice: some salesmen do not receive any
basic salary but depend on commissions
and allowances or commissions
alone; Commissions must be earned by
actual market transactions attributable to
the employee; All doubts in the
implementation and interpretation of the
provisions of the Labor Code shall be
resolved in favor of labor
Facts:
F.E. Zuellig (M), Inc., filed with the
Department of Labor an application seeking
clearance to terminate the services of Jose
Songco, Romeo Cipres, and Amancio
Manuel allegedly on the ground of
retrenchment due to financial losses. This
application was seasonably opposed by the
employees alleging that the company is not
suffering from any losses.
Songco, Cipres and Manile alleged that they
are being dismissed because of their
membership in the union. At the last
hearing of the case, they manifested that
they are no longer contesting their
dismissal. However, they argued that they
to employees receiving a monthly basic salary of not
more than P 1,000.00 said benefit was, and still is, to
be computed on the basic salary of the employee-
recipient as provided under P.D. 851. Thus, the
interpretation given to the term basic salary was
defined in PD 851 applies equally to basic salary
under M.O. No. 28. The term basic salary is to be
understood in its common, generally accepted
meaning, i.e., as a rate of pay for a standard work
period exclusive of such additional payments as
bonuses and overtime. In remunerative schemes
consists of a fixed or guaranteed wage plus
commission, the fixed or guaranteed wage is patently
the basic salary for this is what the employee
receives for a standard work period. Commissions are
given for extra efforts exerted in consummating sales
of other related transactions. They are, as such,
additional pay, which the SC has made clear do not
from part of the basic salary.
Moreover, the Supreme Court said that, including
commissions in the computation of the 13th month
pay, the second paragraph of Section 5(a) of the
Revised Guidelines on the Implementation of the 13th
Month Pay Law unduly expanded the concept of
"basic salary" as defined in P.D. 851. It is a
fundamental rule that implementing rules cannot add
to or detract from the provisions of the law it is
designed to implement. Administrative regulations
adopted under legislative authority by a particular
department must be in harmony with the provisions
of the law they are intended to carry into effect. They
cannot widen its scope. An administrative agency
cannot amend an act of Congress.
20. Philippine Duplicators, Inc. vs.
NLRC, 241 SCRA 380 (1995)
Posted by Pius Morados on November 10,
2011
(Labor Standards Commissions included
in the computation of 13th month pay)
Facts: Petitioner Corporation pays its
salesmen a small fixed or guaranteed wage;
the greater part of the latters wages or
salaries being composed of the sales or
incentive commissions earned on actual
sales of duplicating machines closed by
them. Thus the sales commissions received
for every duplicating machine sold
constituted part of the basic compensation
Implementation of the 13-month pay law was
promulgated by the then Labor Secretary Franklin
Drilon, among other things, defined particularly what
remunerative items were and were not included in the
concept of 13-month pay, and specifically dealt with
employees who are paid a fixed or guaranteed wage
plus commission or commissions were included in the
computation of 13th month pay)
A routine inspection was conducted in the
premises of petitioner. Finding that petitioner had not
been including the commissions earned by its medical
representatives in the computation of their 1-month
pay, a Notice of Inspection Result was served on
petitioner to effect restitution or correction of the
underpayment of 13-month pay for the years, 1986 to
1988 of Medical representatives. Petitioner wrote the
Labor Department contesting the Notice of Inspection
Results, and expressing the view that the commission
paid to its medical representatives are not to be
included in the computation of the 13-moth pay since
the law and its implementing rules speak of REGULAR
or BASIC salary and therefore exclude all
remunerations which are not part of the REGULAR
salary. Regional Dir. Luna Piezas issued an order for the
payment of underpaid 13-month pay for the years
1986, 1987 and 1988. A motion for reconsideration
was filed and the then Acting labor Secretary Dionisio
de la Serna affirmed the order with modification that
the sales commission earned of medical
representatives before August 13, 1989 (effectivity
date of MO 28 and its implementing guidelines) shall
be excluded in the computation of the 13-month pay.
Similar routine inspection was conducted in
the premises of Phil. Fuji Xerox where it was found
there was underpayment of 13th month pay since
commissions were not included. In their almost
identically-worded petitioner, petitioners, through
common counsel, attribute grave abuse of discretion
to respondent labor officials
Hon. Dionisio dela Serna and Undersecretary
Cresenciano B. Trajano.
ISSUE: Whether or not commissions are included in
the computation of 13-month pay
HELD: NO. Contrary to respondents contention, M.O
No. 28 did not repeal, supersede or abrogate P.D. 851.
As may be gleaned from the language of MO No. 28, it
merely modified Section 1 of the decree by
removing the P 1,000.00 salary ceiling. The concept of
13th Month pay as envisioned, defined and
implemented under P.D. 851 remained unaltered, and
while entitlement to said benefit was no longer limited
NAGKAKAISANG LAKAS NG
MANGGAGAWA (NLM)-KATIPUNAN,
respondents.
Facts:
On September 1984, respondent
Nagkakaisang Lakas ng Manggagawa
(NLM)-Katipunan filed a complaint against
petitioner Plastic Town Center Corporation
with:
violation of CBA by crediting the P1 per
day increase in gratuity pay to resigning
employees instead of 30 days equivalent to
one month
unfair labor practice by giving only 26
days pay instead of 30 days equivalent to
one month as gratuity pay to resigning
employees.
In the CBA, it was provided that:
Company agreed to grant regular workers
who rendered at least one year of
continuous service of P1 per worked day.
Company to grant gratuity pay to a
resigning employee or laborer amounting
to, among others, one month salary for
those who rendered two to five years of
service.
Plastic Town Center Corporation maintained
that under the principle of fair days wage
for fair days labor, gratuity pay should be
computed on the basis of 26 days for one
month salary considering that the
employees are daily paid.
Labor Arbiter: Ruled in favor of NLM Union.
As daily wage earner, there would be no
instance that the worker would work for 30
days a month since work does not include
Sunday or rest days.
NLRC: Reversed the decision of Labor
Arbiter and held that PTC should grant
gratuity pay equivalent of thirty days salary.
Issue:
Whether the PTCs contention that the
gratuity pay should be computed on the
or remuneration of the salesmen of the
Philippine Duplicators for doing their job.
The Labor Arbiter directed Petitioner
Duplicators to pay 13th month pay to
private respondent employees computed
on the basis of their fixed wages plus sales
commission.
Sec. 4 of the Supplementary Rules and
Regulations Implementing PD No. 851
(Revised Guidelines Implementing
th
13 Month Pay) provides that overtime pay,
earning and other remuneration which are
not part of the basic salary shall not be
included in the computation of the
13th month pay.
Petitioner Corporation contends that their
sales commission should not be included in
the computation of the 13th month pay
invoking the consolidated cases of Boie-
Takeda Chemicals, Inc. vs Hon. Dionisio dela
Serna and Philippine Fuji Xerox Corp. vs
Hon. Crecencio Trajano, were the so-called
commissions of medical representatives of
Boie-Takeda Chemicals and rank-and-file
employees of Fuji Xerox Co. were not
included in the term basic salary in
computing the 13th month pay.
Issue: WON sales commissions comprising
a pre-determined percent of the selling
price of the goods are included in the
computation of the 13th month pay.
Held: Yes. These commission which are an
integral part of the basic salary structure of
the Philippine Duplicators employees-
salesmen, are not overtime payments, nor
profit-sharing payments nor any other
fringe benefit. Thus, salesmens
commissions comprising a pre-determined
percent of the selling price of the goods
were properly included in the term basic
salary for purposes of computing the
13th month pay.
Commissions of medical representatives of
Boie-Takeda Chemicals and rank-and-file
employees of Fuji Xerox Co. were not
included in the term basic salary because
these were paid as productivity bonuses
which is not included in the computation of
13th month pay.
21. PLASTIC TOWN CENTER
CORPORATION, petitioner, vs. NATIONAL
LABOR RELATIONS COMMISSION AND
Facts: Respondent ALU for and in behalf of
all the rank-and-file workers and employees
of petitioner sought to recover from the
latter the 13th month pay differential for
1982 of said employees, equivalent to their
sick, vacation and maternity leaves,
premium for work done on rest days and
special holidays, and pay for regular
holidays which petitioner, allegedly in
disregard of company practice since 1975,
excluded from the computation of the
13th month pay for 1982.
Issue: WON in the computation of the
13th month pay under PD No. 851,
payments for sick, vacation and maternity
leaves, premiums for work done on rest
days and special holidays, and pay for
regular holidays may be excluded in the
computation and payment thereof.
Held: Yes. Basic salary does not merely
exclude the benefits expressly mentioned
but all payments which may be in the form
of fringe benefits or allowances.
Sec. 4 of the Supplementary Rules and
Regulations Implementing PD No. 851
provides that overtime pay, earnings and
other remunerations which are not part of
the basic salary shall not be included in the
computation of the 13th month pay.
Whatever compensation an employee
receives for an 8 hour work daily or the
daily wage rate is the basic salary. Any
compensation or remuneration other than
the daily wage rate is excluded. It follows
therefore, that payments for sick, vacation
and maternity leaves, premiums for work
done on rest days and special holidays, as
well as pay for regular holidays, are likewise
excluded in computing the basic salary for
the purpose of determining the 13th month
pay.
23. Nasipit Lumber Company Inc. v
NLRC SCRA
basis of 26 days for one month salary
instead of 30 days is valid.
Held:
No, PTCs contention does not hold merit in
this case.
Gratuity pay is not intended to pay a worker
for actual services rendered. It is a money
benefit given to the workers whose purpose
is to reward employees or laborers who
have rendered satisfactory and efficient
service to the company.
While it may be enforced once it forms part
of a contractual undertaking, the grant of
such benefit is not mandatory so as to be
considered a part of labor standard law
unlike salary, which are covered in Labor
Code. Nowhere has it ever been stated that
gratuity pay should be based on actual
number of days worked over the period of
years forming its basis. Court saw no point
in counting the number of days worked
over a ten-year period to determine the
meaning of two and one- half months
gratuity.
Moreover any doubts or ambiguity in the
contract between management and the
union members should be resolved in favor
of the laborer. When months are not
designated by name, a month is understood
to be 30 days.
As such, NLRC did not act with grave abuse
of discretion when it decided that the
gratuity pay should be equivalent to 30
days.
WHEREFORE, the petition is hereby
DISMISSED for lack of merit.
22. Davao Fruits Corporation vs
Associated Labor Unions, G.R. No.
85073, August 24, 1993; 225 SCRA 562
Posted by Pius Morados on November 10,
2011
(Labor Standards Fringe benefits not
included in 13th month pay)
 cannot preempt CBAs by
establishing ceilings
SALARY-CEILING METHOD
Boards may only adjust floor wages
24. EMPLOYERS CONFEDERATION OF
THE PHILIPPINES, petitioner, vs.
Solicitor-General (for NWPC) comments
NATIONAL WAGES AND PRODUCTIVITY
The across-the-board hike did not
COMMISSION AND REGIONAL
grant additional or other benefits to
TRIPARTITE WAGES AND
workers and employees, but rather
PRODUCTIVITY BOARD-NCR, TRADE
fixed minimum wages according to
UNION CONGRESS OF THE
the salary-ceiling method
PHILIPPINES, respondents.
RA 6727 is to correct wage
J. SARMIENTO; September 24, 1991
distortions and the salary-ceiling
method does just that
FACTS
On October 15, 1990, the Regional
Court rules
Board of NCR issued Wage Order No.
The Court is inclined to agree with the
NCR-01, increasing the minimum wage
Government.
by P17 daily.
The NWPC noted that the determination of
The Trade Union Congress of the
wages involved 2 methods: the floor-wage
Philippines (TUCP) and Personnel
method and the salary-ceiling method.
Management Association of the
Philippines (PMAP) moved for
Floor-wage method- involves the fixing of a
reconsideration. Petitioner Employers
determinate amount that would be added
Confederation of the Philippines (ECOP)
to the prevailing statutory minimum wage
opposed.
-adopted in earlier wage orders
Board then issued Wage Order No.
NCR-01-A, amending the wage order
Salary-ceiling method- wage adjustment is
by stating that all workers and
applied to employees receiving a certain
employees in the private sector already
denominated salary ceiling
receiving wages above the statutory
-used in RAs 6640 and 6727 as well
minimum wage rates up to P125 per
as 11 COLA issuances
day shall also receive the P17 daily
increase.
The shift is due to the labor disputes arising
from wage distortions. Petitioner ECOP appealed to respondent
National Wages and Productivity
RA 6727 was intended to rationalize Commission (NWPC).
wages. NWPC: Appeal dismissed for lack of
This is done by: merit.
1. providing full-time boards to police Motion for reconsideration denied.
wages round-the-clock Hence, this petition.
2. giving the boards enough power to
achieve this objective ISSUE:
SO, if RA 6727 only intended boards to set Whether or not respondent NWPC
floor wages only, the Act would not need a committed grave abuse of discretion. NO.
board but only an accountant to keep track
of the latest consumer price index or have REASONING:
Congress do it when the need arises. Petitioner says
Wage Order No. NCR-01-A is an
The Board did not perform an unlawful excess of authority as under RA
act of legislation. 6727, the boards may only prescribe
Congress may delegate he power to fix minimum wages, not determine
rates, provided that it leaves sufficient salary ceilings.
standards. RA 6727 gave statutory RA 6727 is meant to promote
standards for fixing the minimum wage. collective bargaining as the primary
mode of settling wages, so boards
 5. Under the LC, the State shall
regulate the relations between labor
and management
6. Under RA 6727, the State is
interested in seeing that workers
receive fair and equitable wages
7. The Constitution is primarily a
document of Social Justice and has
not fully embraced the concept of
laissez-faire
Court cannot give an Act a meaning that
will conflict with these basic principles.
The concept of minimum wage is more than
setting of a floor wage to upgrade existing
wages as ECOP believes.
Minimum wages underlies the rationales of
RA 6727 and the Constitution.
The salary-cap method serves the purposes
of RA 6727. Whether or not it is a
permanent policy of the Board s a question
we may only speculate. At the moment, it is
a reasonable policy.
Dispositive: Petition denied.
25. Cagayan Sugar Milling Co. v.
Secretary of Labor and Employment,
284 SCRA 150 (1998)SCRA
26. Prubankers Association v. Prudential Bank &
Trust Co. (1999)
Ponente: Panganiban, J.
Petitioners: Prubankers Association
Respondents: Prudential Bank & Trust Co.
Facts:
1. On Nov 18 1993 the Regional
Tripartite Wages and Productivity
Board of Region V issued Wage
Order No. RB 05-03 which provided
for a Cost of Living Allowance
(COLA) to workers in the private
sector who had rendered service
for at least 3 months before its
effectivity, and for the same
ART. 124. Standards/Criteria for Minimum
Wage Fixing The regional minimum
wages to be established by the Regional
Board shall be as nearly adequate as is
economically feasible to maintain the
minimum standards of living necessary for
the health, efficiency and general well-
being of the employees within the
framework of the national economic and
social development program. In the
determination of such regional minimum
wages, the Regional Board shall, among
other relevant factors, consider the
following:
(a) The demand for living wages;
(b) Wage adjustment vis-a-vis the
consumer price index;
(c) The cost of living and changes or
increases therein;
(d) The needs of workers and their
families;
(e) The need to induce industries to
invest in the countryside;
(f) Improvements in standards of living;
(g) The prevailing wage levels;
(h) Fair return of the capital invested
and capacity to pay of employers;
(i) Effects of employment generation
and family income; and
(j) The equitable distribution of income
and wealth along the imperatives of
economic and social development."
The wage order was not acted in excess of
boards authority. The law gave reasonable
limitations to the delegated power of the
board.
ECOP is of the mistaken impression
that RA 6727 leaves labor and
management alone to decide wages.
The Court does not believe RA 6727 is
meant to deregulate the relation between
labor and capital for several reasons:
1. The Constitution calls upon the State
to protect labor
2. The Constitution calls upon the State
to intervene when the common goal
so demands I regulating property
and property relations
3. The Charter urges Congress to
diffuse the wealth of the nation and
regulate the use of property
4. The Charter recognizes the just
share of labor in the fruits of
production
 3. As the matter could not be settled
by both parties, both agreed to
submit the matter to voluntary
arbitration.
VA: Ruled that the regional implementation
of the wage orders by PET resulted in a wage
distortion nationwide which should be
resolved in accordance with Art. 124 of Labor
Code.
CA: Ruled that there was no wage distortion
on the following grounds:
- The variance in the salary
rates in different regions are
justified by R.A. 6727.
- The distinctions between
each employee group in the
region are maintained, as all
employees were granted an
increase in minimum wage
rate.
PETs contentions: RESPs regional
implementation:
1. A wage distortion exists,
because the implementation
2. Pursuant to the said wage orders,
of the two Wage Orders has
resulted in the discrepancy
in the compensation of
employees of similar pay
classification in different
regions.
2. Implementation violated the
principle of equal work, equal
2. On June 7 1994, PET wrote to RESP
pay;
3. RESP-Bank when it adopted a
uniform wage policy has
sufficiently established a wage distortions that resulted from
management practice thus, it
is estopped from
implementing a wage order
for a specific region only.
Issue/s:
period thereafter, in the
following categories:
- P17.50 in Naga & Legaspi;
- P15.50 in the municipalities
of Tabaco, Daraga & Pili and
the city of Iriga;
- P10.00 in all other areas of
the Bicol Region.
On Nov 23 1993 the Regional Tripartite
Wages and Productivity Board of
Region VII issued Wage Order No. RB VII-
03, which directed the integration of the
COLA mandated pursuant to Wage Order
No. RO VII-02-A into the basic pay of all
workers. The wage order also called for an
increase in the minimum wage rates for
all workers and and employees in the
private sector as follows:
- P10.00 in Cebu, Mandaue &
Lapulapu;
- P5.00 in the municipalities
of Compostela, Liloan,
Consolacion, Cordova,
Talisay, Minglanilla, Naga
and the cities of Davao,
Toledo, Dumaguete, Bais,
Canlaon and Tagbilaran.
RESP granted a COLA of P17.50 to
its employees at its Naga branch
and integrated the P150.00 per
month COLA into the basic pay of
its rank-and-file employees at its
Cebu, Mabolo and P. del Rosario
branches.
requesting that a Labor
Management Committee be
convened to discuss and resolve the
the implementation of the wage
orders. PET also demanded that PET
extend the application of the wage
orders to its employees outside
Region V & Region VII, claiming that
the regional implementation of the
said orders resulted in a wage
distortion.
 2. A significant change in the 1. WON PET is guilty of forum
salary rate of a lower pay shopping?
class without a concomitant
increase in the salary rate of 2. WON a wage distortion resulted from
a higher one; RESPs implementation of the
aforecited Wage Orders?
3. The elimination of the
distinction between the two
levels; and
Held + Rationale:
4. The existence of the
1. YES. PET failed to comply with
distortion in the same region
Section 2 of Rule 42 of the Rules
of the country.
of Court, which requires that parties
must certify under oath that they
have not commenced any other
In the case at bar, there is no wage distortion action involving the same issues in
because elements 2 and 3 are missing. First, the Supreme Court, the Court of
the implementation of the wage orders in the Appeals, or different divisions
covered branches resulted in an increase in thereof, or any other tribunal or
the salary rates of all pay classes. Also, the agency... as PET failed to inform the
quantitative difference in compensation SC that an action involving the same
between the pay classes remained the same parties and issues allegedly similar
in all branches in the affected region hence to those raised in the present
the hierarchy of positions based on skills, controversy, NCMB-NCR-RVA-O4-
012-97 (In Re: Voluntary Arbitration
length of service and other logical bases of
between Prudential Bank and
differentiation was preserved.
Prubankers Association) is pending.

2. NO. There was no wage distortion as

Answer to PETs contentions: there is no wage parity between
employees in different rungs,
1. A disparity in wages instead there is a wage disparity
between employees holding between employees in the same
similar positions but in rung but located in different regions
different regions does not of the country.
constitute wage distortion
as contemplated by law.
Different regional wages are
Art. 124 of LC gives the statutory definition of
mandated by the law
wage distortion: a wage distortion shall
(specifically RA 6727) as
mean a situation where an increase in
there is recognition that there
exist regional disparities in prescribed wage results in the elimination of
the cost of living. RA 6727 severe contraction of intentional quantitative
recognizes that there are differences in wage or salary rates between
different needs for the and among employee groups in an
different situations in establishment as to effectively obliterate the
different regions of the distinctions embodied in such wage
country. structure based on skills, length of service,
or other logical bases of differentiation.
2. Equal pay, equal work
contention: RA 6727
mandates that wages in
every region must be set Wage distortion involves 4 elements:
by the particular wage
1. An existing hierarchy of
board of that region, based
positions with corresponding
on the prevailing situation
salary rates;
therein. Necessarily, the
admits that the P1.00-per-tuna movement is the
actual wage rate applied to private respondents as
expressly agreed upon by both parties. Petitioner
further admits that private respondents, per their
request, were entitled to retrieve the tuna intestines
and liver as part of their compensation and even
exceeded what was provided under the Minimum
Wage Law.
ISSUES:
1) Whether or not petitioner complied with the
Minimum Wage Law regarding their form of payment.
2) Did the Court err in granting separation pay to the
private respondents.
HELD:
1) NO. The Labor Code expressly provides:
Article 102. Forms of Payment. No.
employer shall pay the wages of an
employee by means of, promissory
notes, vouchers, coupons, tokens
tickets, chits, or any object other
than legal tender,even when
expressly requested by the
employee.
Payment of wages by check or
money order shall be allowed when
such manner of payment is
customary on the date of effectivity
of this Code, or is necessary as
specified in appropriate regulations
to be issued by the Secretary of
Labor or as stipulated in a collective
bargaining agreement.
Undoubtedly, petitioner's practice of paying
the private respondents the minimum wage by means
of legal tender combined with tuna liver and intestines
runs counter to the above cited provision of the Labor
Code. The fact that said method of paying the
minimum wage was not only agreed upon by both
parties in the employment agreement but even
expressly requested by private respondents, does not
shield petitioner. Article 102 of the Labor Code is clear.
Wages shall be paid only by means of legal tender. The
only instance when an employer is permitted to pay
wages informs other than legal tender, that is, by
checks or money order, is when the circumstances
prescribed in the second paragraph of Article 102 are
present.
2) NO. A careful scrutiny of the records of the case at
bench, however, readily discloses the existence of
strained relationship between the petitioner and
wages in different regions will
not be uniform. Thus, under
RA 6727, the minimum wage
in Region 1 may be
different from that in
Region 13, because the
socioeconomic conditions in
the two regions are different.
3. Management practice
contention: Said nationwide
uniform wage policy of the
Bank had been adopted prior
to the enactment of RA 6727.
After the passage of said law,
the Bank was mandated to
regionalize its wage
structure.
Dispositive: Petition is DENIED and CAs decision is
AFFIRMED.
27. DOMINICO C. CONGSON, petitioner, vs.
NATIONAL LABOR RELATIONS COMMISSION, NOE
BARGO, ROGER HIMENO, RAYMUNDO BADAGOS,
PATRICIO SALVADOR, SR., NEHIL BARGO, JOEL
MENDOZA, and EMMANUEL CALIXIHAN, respondents
G.R. No. 114250 (April 5, 1995)
FACTS:
Petitioner is the registered owner of Southern
Fishing Industry. Private respondents were hired on
various dates by petitioner as regular piece-rate
workers. They were uniformly paid at a rate of P1.00
per tuna weighing thirty (30) to eighty (80) kilos per
movement, that is from the fishing boats down to
petitioner's storage plant at a load/unload cycle of
work until the tuna catch reached its final
shipment/destination. They worked seven (7) days a
week.During the first week of June 1990, petitioner
notified his workers of his proposal to reduce the rate-
per-tuna movement due to the scarcity of tuna.
Private respondents resisted petitioner's proposed
rate reduction. When they reported for work the next
day, they were informed that they had been replaced
by a new set of workers, When they requested for a
dialogue with the management, they were instructed
to wait for further notice. They waited for the notice
of dialogue for a full week but in vain.
No amicable settlement was reached
between the parties before the Labor Arbiter.
Petitioner sought recourse with the NLRC. Petitioner
Payment of wages to a leader of group is not in private respondents.Firstly, petitioner consistently
violation of direct payment since the contract to refused to re-admit private respondents in his
perform the services was made by the leader of the establishment. Petitioner even replaced private
group, for and in behalf of the latter, not for each and respondents with a new set of workers to perform the
every one of them individually. tasks of private respondents. And secondly, private
respondents themselves, from the very start, had
As the group undertook to render service for vessels
already indicated their aversion to their continued
other than those of the Escao, it was absolutely
employment in petitioner's establishment. The very
necessary that some sort of leadership be instituted in
filing of their second case before Labor Arbiter
the group to determine which of the members will
Aponesto (RAB-1 1-07-90179-90) specifically for
work for one vessel and which for another. Leadership
separation pay is conclusive of private respondents'
is also essential to obtain work for the group as
intention to sever their working ties with petitioner.
employers naturally prefer to deal with a leader of a
group than with each member individually. Leadership
was, therefore, essential not only to secure work for
the group but to arrange the laborers who are to
perform the service. The leadership must be paid for
and it was not shown that the head of the groups got
the lion's share of the cost of the service rendered.
Under the circumstances that the provision of law on
direct payment of wages has been violated.

28. EUFROCIO BERMISO, ET AL., petitioners, vs.

29. ERNESTO M. APODACA, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, JOSE M.
MIRASOL and INTRANS PHILS., INC., respondents.
G.R. No. 80039 April 18, 1989
GANCAYCO, J.:
FACTS: Petitioner was employed in respondent
corporation. He was persuaded by respondent Mirasol
to subscribe to 1,500 shares or for a total of
P150,000.00. He paid P37,500.00. On September 1,
1975, petitioner was appointed President and General
Manager of the respondent corporation. However, on
January 2, 1986, he resigned. petitioner instituted with
the NLRC a complaint against private respondents for
the payment of his unpaid wages, his cost of living
allowance, the balance of his gasoline and
representation expenses and his bonus compensation
for 1986. Private respondents admitted that there is
due to petitioner the amount of P17,060.07 but this
was applied to the unpaid balance of his subscription
in the amount of P95,439.93. Petitioner questioned
the set-off alleging that there was no call or notice for
the payment of the unpaid subscription and that,
accordingly, the alleged obligation is not enforceable.
ISSUES: (1) Whether or not NLRC has jurisdiction to
resolve a claim for non-payment of stock subscriptions
to a corporation. (2) If so, whether or not an obligation
HIJOS DE F. ESCAO, INC., ET AL., respondents.
FACTS:
Petitioners instituted an action before the Court of
Industrial Relations, praying for reinstatement with
back wages, direct payment of wages to the laborers
instead of through the union, payment of accrued
overtime pay and wage differentials, prohibition from
carrying load in excess of 50 kilos, minimum daily
wage of P5.00, vacation and sick leave, free
hospitalization, accident insurance, free choice of
labor union and grievance committee.
Of the original petitioners only five continued to take
interest in the action, the other having desisted
therefrom. After hearing the Court of Industrial
Relations ordered the reinstatement of the said five
laborers to their former work and positions in the
Sabay group, but without back wages, but dismissed
the other claims.
Petitioners argue that the decision violates the law on
direct payment of wages.
ISSUE:
Whether the payment of wages must be directly paid
to the workers.
HELD:
of the cash bond they filed with the company at the
start of their employment.
Issue:
Whether or not Marbella et al are entitled to the
refund of the cash bond they filed with Dentech at
the start of their service.
Held:
The Court held that refund of the cash bond filed by
Marbella et al is in order.Article 114 of the Labor
Code prohibits an employer from requiting his
employees to file a cashbond or to make deposits,
subject to certain exceptions: "when the employer is
engaged in such trades, occupations or business
where the practice of making deductions or
requiring deposits is a recognize done, or is
necessary or desirable as determined by the
Secretary of Labor in appropriate rules and
regulations."Dentech have not satisfactorily
disputed the applicability of this provision of the
Labor Code tothe case at bar and further failed to
show that the company is authorized by law to
require the private respondents to file the cash
bond in question. Its to the effect that the proceeds
of the cash bond had already been given to a certain
carinderia to pay for the accounts of the private
respondents there in does not merit serious
consideration. In fact, no evidence or receipt has
been shown to prove such payment.
31. Five J Taxi vs NLRC
Facts:
- Private Respondent Maldigan and
Sabsalon was hired by the Petitioner
Company as taxi drivers. The
contract was composed of a 24-hour
shifting sched on 4 days. They had
to make a boundary from 450 (non
aircon) and 700 (aircon), adding to
that are car washing expense and
deposit for any deficiency in the
boundary
- Petitioner learned Maldigan has
been working for another taxi
company, while Sabsalon was held
up by armed passengers.
- Sabsalon went back to work but
failed to report on several occasions,
even leaving his taxi, and failing to
remit his boundary mark
- Respondents requested for the
reimbursements of their respective
deposits, but petitioner refused
arising therefrom be offset against a money claim of
an employee against the employer.
RULING: (1) NLRC has no jurisdiction to determine
such intra-corporate dispute between the stockholder
and the corporation as in the matter of unpaid
subscriptions. This controversy is within the exclusive
jurisdiction of the Securities and Exchange
Commission.
(2) No. the unpaid subscriptions are not due and
payable until a call is made by the corporation for
payment. Private respondents have not presented a
resolution of the board of directors of respondent
corporation calling for the payment of the unpaid
subscriptions. It does not even appear that a notice of
such call has been sent to petitioner by the
respondent corporation. As there was no notice or call
for the payment of unpaid subscriptions, the same is
not yet due and payable.
Even if there was a call for payment, the NLRC cannot
validly set it off against the wages and other benefits
due petitioner. Article 113 of the Labor Code allows
such a deduction from the wages of the employees by
the employer, only in three instances.
30. Dentech vs. NLRC
172 SCRA 588 | April 19, 1989
Facts:
Benjamin Marbella, Armando Torno, Juanito Tajan,
Jr. and Joel Torno were employed as welders,
upholsterers and painters by of Dentech
Manufacturing Corporation, a firm engaged in the
manufacture and sale of dental equipment and
supplies. However, they were dismissed from the
firm due to their alleged abandonment of their
work without informing the company about their
reasons fordoing so. Marbella et al filed a complaint
with the arbitration branch of the NLRC for illegal
dismissal and violation of Presidential Decree No.
851. Among other things they sought the payment
 present its employment records
on the allegation that they had been
sent to the main office in Manila.
The case was then set for
conference on 25 January 1983 but
had to be reset 3 times: 1 st to enable
SOUTH MOTORISTS to present all its
employment records; 2nd because of
its lawyer's tight schedule; and 3rd
because of the alleged voluminous
records it had to locate and its
desire to submit a memorandum
regarding complainants' claims.
However, on 2 March 1983, SOUTH
MOTORISTS once again requested
an extension of 30 days on the
ground that the documents were still
being prepared and collated and
that a formal manifestation or
motion would follow. Nothing did.
On 7 March 1983, the assigned
Labor Regulation Officers submitted
an Inspection Report on the basis
of which an Order dated 14 April
1983 was issued by Labor Officer
Domingo Reyes directing SOUTH
MOTORISTS to pay Tosoc, et al., the
total amount of P184,689.12
representing the latter's
corresponding emergency cost of
living allowances. SOUTH
MOTORISTS moved for
reconsideration of the Order, which
was denied.
The Secretary of Labor and
Employment affirmed the appealed
Order. SOUTH MOTORISTS moved for
reconsideration but this proved
unsuccessful. A Second Motion for
Reconsideration was filed, which was
likewise denied in an Order dated 7
March 1989.
Hence, this certiorari Petition
questioning the monetary award by
the Regional Director and, in
general, his jurisdiction to validly
award money claims.
SOUTH MOTORISTS maintains that
said officials are bereft of authority
to act on such claims as this falls
under the original and exclusive
jurisdiction of Labor Arbiters.
Respondents maintain otherwise.
ISSUES
because of the repairs incurred by
their vehicles.
- Respondent now files complaint for
illegal dismissal and deduction
Issue:
- W/N deductions were illegal.
Held:
- Yes, the deposits made were illegal
- Article 114 of the Labor Code
provides as follows:
Deposits for loss or damage. No employer
shall require his worker to make deposits
from which deductions shall be made for the
reimbursement of loss of or damage to tools,
materials, or equipment supplied by the
employer, except when the employer is
engaged in such trades, occupations or
business where the practice of making
deposits is a recognized one, or is necessary
or desirable as determined by the Secretary
of Labor in appropriate rules and regulations.
32. SOUTH MOTORISTS v. TOSOC
SOUTH MOTORISTS ENTERPRISES, petitioner, vs.
ROQUE TOSOC, ET AL. (46 employees in total),
and HON. SECRETARY OF LABOR AND
EMPLOYMENT, respondents.
January 23, 1990
WAGE PROHIBITIONS: Prohibition against
keeping of employees records in a place other
than the workplace
FACTS
In January of 1983, complaints for
non-payment of emergency cost
of living allowances were filed by
46 workers, Tosoc, et al., against
SOUTH MOTORISTS before the Naga
City District Office of Regional Office
No. 5 of the then Ministry of Labor.
The Labor Regulation Officers were
ordered by the District Labor Officer
to conduct an inspection and
verification of SOUTH MOTORISTS'
employment records. However,
SOUTH MOTORISTS was unable to
 aggregate claim of each 1. Main issue in this case: WON the
employee or househelper does Regional Director has jurisdiction to
not exceed five thousand try this case on money claims
pesos (P5,000.00). . . . 2. Relevant to our topic: WON the
Art. 217. Jurisdiction of Labor Secretary of Labor and Employment
Arbiters and the Commission. erred in affirming the award based
(a) Except as otherwise provided on a mere Inspection Report
under this Code, the Labor
Arbiters shall have original and RULING
exclusive jurisdiction to hear and 1. Partly yes, the Regional Director has
decide, within thirty (30) jurisdiction only over those claims
calendar days after the not exceeding P5,000.
submission of the case by the 2. No, SOUTH MOTORISTS was afforded
parties for decision without ample opportunity to present its
extension, even in the absence side.
of stenographic notes, the Disposition:
following cases involving all The award of P 184,689.12 is hereby MODIFIED.
workers, whether agricultural or The individual claims of Macario Gavino, Vito T.
non-agricultural: Euste Jose, Brequillo, Domingo Cis, Alberto Agreda,
xxx xxx xxx Amancio Galona, Roque Tosoc, Hilarion P. Guinoo,
(6) Except claims for employees Felipe Cea, Roberto Guinoo, and Ernesto Osoc, each
compensation, social security, of which exceeds P5,000.00, are hereby
medicare and maternity benefits, all remanded to the Labor Arbiter for proper
other claims arising from employer- disposition. All other individual awards not in
employee relations, including those of excess of P5,000.00 are hereby AFFIRMED. Costs
persons in domestic or household against petitioner.
service, involving an amount exceeding
five thousand pesos (P5,000), whether REASONING
or not accompanied with a claim for ON THE REGIONAL DIRECTORS JURISDICTION
reinstatement. Two provisions of law are crucial to
xxx xxx xxx the issue
In accordance with Articles 129 and Art. 129. Recovery of wages,
217 of the Labor Code, as amended, simple money claims and other
supra, those awards in excess of benefits. Upon complaint of
P5,000.00, particularly those given any interested party, the
to Macario Gavino, Vito T. Euste, Jose Regional Director of the
Brequillo, Domingo Cis, Alberto Department of Labor and
Agreda, Amancio Galona, Roque Employment or any of the duly
Tosoc, Hilarion P. Guinoo, Felipe Cea, authorized hearing officers of the
Roberto Guinoo, and Ernesto Osoc, Department is empowered,
each of which exceeds P5,000.00, through summary proceeding
should be ventilated in a proceeding and after due notice, to hear
before the Labor Arbiters. The other and decide cases involving
awards, or those not in excess of the recovery of wages and
P5,000.00 and having no issue of other monetary claims and
reinstatement set forth, should be benefits, including legal
affirmed. interest, owing to an employee
or person employed in
ON THE SUFFICIENCY OF THE INSPECTION domestic or household
REPORT AS THE BASIS OF THE AWARD service and househelper
SOUTH MOTORISTS failed to present under this Code, arising from
employment records giving as an employer-employee
excuse that they were sent to the relations: Provided, That such
main office in Manila, in violation complaint does not include a
of Section 11 of Rule X, Book II claim for reinstatement:
Provided, further, That the
 Petitioner then filed with the CIF of of the Omnibus Rules Implementing
Manila a motion to lift said garnishment on the Labor Code providing that:
the ground that her salaries, commission All employment records of the
and or remuneration" are exempted from employees of the employer shall be
execution under Article 1708 of the New kept and maintained in or about the
Civil Code. premises of the workplace. The
Said motion was denied by the lower premises of a workplace shall be
Court understood to mean the main or
CA dismissed the petition holding branch office or establishment, if any,
that petitioner is not a mere laborer depending, upon where the employees
as contemplated under are regularly assigned. The keeping of
Article 1708 as the term laborer the employee's records in another
does not apply to one who holds a place is prohibited.
managerial or supervisory position like that SOUTH MOTORISTS also caused the
of petitioner, but only to those laborers resettings of all subsequent
occupying the lower strata. hearings. Its repeated failure to
attend the hearings, and to submit
Issue: WON the Petitioner is covered by Article 1708 of the any motion as manifested may be
New Civil Code. construed as a waiver of its right to
adduce evidence to controvert the
RULING: Petitioner is not covered by Article 1708 worker's claims.
since she does not fall within the criteria of laborer.

Article 1708 of the Civil Code provides: The laborer's

wage shall not be subject to execution or attachment, 33. Gaa vs Court of Appeals (1985) 140 SCRA 304
except for debts incurred for food, shelter, clothing Facts:
and medical attendance." It appears that respondent Europhil
Industries Corporation was formerly
one of the tenants in Trinity Building
It is beyond dispute that petitioner is not an ordinary
at T.M. Kalaw Street, Manila, while
or rank and file laborer but a responsibly place
petitioner Gaa was then the building
employee, of El Grande Hotel, responsible
administrator.
for planning, directing, controlling, and coordinating
On December 12, 1973, Europhil
the activities of all housekeeping personnel so as to
commenced an action in CFI Manila
ensure the cleanliness, maintenance and orderliness
for damages against petitioner for
of all guestrooms, function rooms, public areas, and
having perpetrated certain acts that
the surroundings of the hotel. Considering the Europhil considered a trespass upon
importance of petitioner's function in El Grande Hotel, its rights, namely, cutting of its
it is undeniable that petitioner is occupying a position electricity, and removing its name
equivalent to that of a managerial or supervisory position. We from the building directory and gate
do not think that the legislature intended the exemption in passes of its officials and employees",
Article 1708 of the New Civil Code to operate in favor of On June 28, 1974, said court rendered
any but those who are laboring men or women in the sense that judgment in favor of respondent Europhil,
their work is manual. ordering petitioner to pay the former
the sum of P10,000.00 as actual
Persons belonging to this class usually look to the reward of a day's damages, P5,000.00 as moral damages,
labor for immediate or present support, and such persons are P5,000.00 as exemplary damages and to
more in need of the exemption than any others. Petitioner is pay the costs.
definitely not within that class. The said decision having become final and
executory, a writ of garnishment was
issued pursuant to which Deputy
Sheriff Roxas on August 1, 1975 served a
34. REPUBLIC V PERALTA Notice of Garnishment upon El Grande
150 SCRA 37 Hotel, where petitioner was then
FELICIANO; May 20, 1987 employed, garnishing her "salary,
NATURE: commission and/or remuneration."
employer in favor of the employee for the
latter's dismissal or
separation from service
ISSUE
WON separation pay of their respective
members embodied in
final awards of the NLRC were to be
preferred over the claims of
the Bureau of Customs and the BIR (WON
separation pay is
included in the term wages8)
HELD
1. YES
Ratio For the specific purposes of Article
1109 and in the
context of insolvency termination or
separation pay is
reasonably regarded as forming part of the
remuneration or
other money benefits accruing to
employees or workers by
reason of their having previously rendered
services to their
employer; as such, they fall within the
scope of "remuneration
or earnings for services rendered or to be
rendered ."
Liability for separation pay might indeed
have the effect of a
penalty, so far as the employer is
concerned. So far as concerns
the employees, however, separation pay is
additional
remuneration to which they become
entitled because, having
previously rendered services, they are
separated from the
employer's service.
Reasoning
- We note, in this connection, that in
Philippine Commercial and
Industrial Bank (PCIB) us. National Mines
and Allied Workers
Union, the Solicitor General took a different
view and there
urged that the term "wages" under Article
110 of the Labor
Code may be regarded as embracing within
its scope severance
pay or termination or separation pay. In
PCIB, this Court agreed
with the position advanced by the Solicitor
General. We see no
reason for overturning this particular
position.
Review on certiorari
FACTS:
- The Republic of the Philippines seeks the
review on certiorari
of the Order of the CFI of Manila in its Civil
Case No. 108395
entitled "In the Matter of Voluntary
Insolvency of Quality
Tobacco Corporation, Quality Tobacco.
- In its questioned Order, the trial court held
that the above enumerated
claims of USTC and FOITAF (hereafter
collectively
referred to as the "Unions") for separation
pay of their
respective members embodied in final
awards of the NLRC were
to be preferred over the claims of the
Bureau of Customs and
the BIR. The trial court, in so ruling, relied
primarily upon Article
110 of the Labor Code.
- The Solicitor General, in seeking the
reversal of the questioned
Orders, argues that Article 110 of the Labor
Code is not
applicable as it speaks of "wages," a term
which he asserts
does not include the separation pay
claimed by the Unions.
"Separation pay," the Solicitor General
contends: is given to a
laborer for a separation from employment
computed on the
basis of the number of years the laborer
was employed by the
7 SEC. 1. Requirements for Issuance of
License. Every applicant for license to
operate
a private employment agency or manning
agency shall submit a written application
together with the following requirements:
xxx xxx
f. A verified undertaking stating that the
applicant:
xxx xxx xxx
(3) Shall assume joint and solidary liability
with the employer for all claims and
liabilities which may arise in connection
with the implementation of the contract;
including but not limited to payment of
wages, health and disability compensation
and reparation.
employer; it is a form of penalty or damage
against the
share in the assets of the employer.
(emphasis supplied).
35. Manila Banking Corp. v. NLRC, 279 SCRA 602,
621-642 (1997) SCRA
36. CIRINEO BOWLING PLAZA,
INC., petitioner, vs. GERRY SENSING, BELEN
FERNANDEZ, MIRASOL DIAZ, MARGARITA ABRIL,
DARIO BENITEZ, MANUEL BENITEZ, RONILLO
TANDOC, EDGAR DIZON, JOVELYN QUINTO, KAREN
REMORAN, JENIFFER RINGOR, DEPARTMENT OF
LABOR AND EMPLOYMENT and COURT of
APPEALS, respondents.
NATURE OF THE CASE: Special Civil Action for
Certiorari under Rule 65 of Rules of Court
FACTS: On November 27, 1995, one of the employee
of the petitioner filed a letter complaint with the DOLE
in Dagupan District, Dagupan City for inspection and
investigation of the petitioner for various labor law
violations such as underpayment of wages, 13 th month
pay, non-payment of rest day pay, overtime pay,
holiday pay and service incentive pay. Pursuant to the
visitorial and enforcement of the Secretary of Labor
and Employment, his duly authorized representative
conducted an inspection/investigation and validated
such complaint. Petitioner was then called for a
hearing for four(4) times, however, failed to appear.
DOLE then ordered the petitioner for lawful
remuneration amounting to Php377,500.58 for the
thirteen(13) affected employees and also to submit
proof of payments, and adjust the salaries of the
employees and to submit proof thereof within the
same period.
The claims of two(2) of the thirteen(13) affected
employees have been settled and thereby dismissed.
However the order for the remaining eleven(11)
employees still stands. On October 21, 1996, DOLE
Director Maximo B. Lim issued a writ of execution.
Having such act, the petitioner attacked the validity of
such writ, averring that the DOLE Director do not have
the jurisdiction to decide on such case, thus, praying
that it should be dismissed.
ISSUE: WON the DOLE Director has a jurisdiction over
the case.
HELD: YES. Pursuant to the provisions of Article 128 of
the Labor Code, the Secretary of Labor or his duly
- The resolution of the issue of priority
among the several
claims filed in the insolvency proceedings
instituted by the
Insolvent cannot, however, rest on a
reading of Article 110 of
the labor Code alone.
- Article 110 of the Labor Code, in
determining the reach of its
terms, cannot be viewed in isolation.
Rather, Article 110 must
be read in relation to the provisions of the
Civil Code concerning
the classification, concurrence and
preference of credits, which
provisions find particular application in
insolvency proceedings
where the claims of all creditors, preferred
or non-preferred,
may be adjudicated in a binding manner.
Disposition MODIFIED and REMANDED to
the trial court for
further proceedings in insolvency.
Article 97 (f) of the Labor Code defines
"wages" in the following terms:
Wage' paid to any employee shall mean the
remuneration or earnings,
however designated, capable of being
expressed in terms of money,
whether fixed or ascertained on a time,
task, piece, or commission basis, or
other method of calculating the same,
which is payable by an employer to
an employee under a written or unwritten
contract of employment for work
done or to be done, or for services
rendered or to be rendered, and includes
the fair and reasonable value, as
determined by the Secretary of Labor, of
board, lodging, or other facilities
customarily furnished by the employer to
the employee. 'Fair and reasonable value'
shall not include any profit to the
employer or to any person affiliated with
the employer.(emphasis supplied)
9
Article 110. Worker preference in case of
bankruptcy In the event of bankruptcy
or liquidation of an employer's business, his
workers shall enjoy first preference as
regards wages due them for services
rendered during the period prior to the
bankruptcy or liquidation, any provision of
law to the contrary notwithstanding. Union
paid wages shall be paid in full before other
creditors may establish any claim to a
the provisions of Articles 129 and 217 of this Code to
the contrary, and in cases where the relationship of
employer-employee still exists, the Secretary of
Labor and Employment or his duly authorized
representatives shall have the power to issue
compliance orders to give effect to the labor standards
provisions of the Code and other labor legislation
based on the findings of the labor employment and
enforcement officers or industrial safety engineers
made in the course of inspection. The Secretary or his
duly authorized representatives shall issue writs of
execution to the appropriate authority for the
enforcement of their orders, except in cases where the
employer contests the findings of the labor
employment and enforcement officer and raises issues
supported by documentary proofs which were not
considered in the course of inspection. An order
issued by the duly authorized representative of the
Secretary of Labor and Employment under this article
may be appealed to the latter. In case said order
involves a monetary award, an appeal by the employer
may be perfected only upon the posting of a cash or
surety bond issued by are putable bonding company
duly accredited by the Secretary of Labor and
Employment in the amount equivalent to the
monetary award in the order appealed from.
(Emphasis supplied.)The records of the House of
Representatives show that Congressmen Alberto S.
Veloso and Eriberto V. Loreto sponsored the law. In his
sponsorship speech, Congressman Veloso categorically
declared that "this bill seeks to do away with the
jurisdictional limitations imposed through said ruling
(referring to Servando) and to finally settle any
lingering doubts on the visitorial and enforcement
powers of the Secretary of Labor and
Employment."Petitioner's reliance on Servando is thus
untenable
38. Dentech MFG. Corp v NRC
Supra
39. ARCHILLES MANUFACTURING
CORPORATION, ALBERTO YU and
ADRIAN YU, petitioners, vs. NATIONAL
LABOR RELATIONS COMMISSION,
GERONIMO MANUEL, ARNULFO DIAZ,
JAIME CARUNUNGAN and BENJAMIN
RINDON, respondents.
There are three issues to be resolved in this
special civil action for certiorari under Rule
65 of the
authorized representatives, including labor regulation
officers, shall have access to employers records and
premises at any time of the day or night whenever
work is being undertaken, and the right to copy
therefrom, to question any employee and investigate
any fact, condition or matter which may be necessary
to determine violations or which may aid in the
enforcement of this Code and of any labor law, wage
order or rules and regulartions issued pursuant
thereto. Therefore, the instant petition was dismissed.
37. Francis Guico, Jr., doing business under the
name and style of COPYLANDIA SERVICES & TRADING
vs. Hon. Secretary of Labor & Employment Leonardo
Quisumbing, the Office of Regional Director of Region
I, Dept of Labor & Employment, Rosalina Carrera, Et.
Al.. (November 16, 1998) G.R. 131750
Facts:
The case started when the Office of the Regional
Director, Department of Labor and Employment
(DOLE), Region I, San Fernando, La Union, received a
letter-complaint datedApril25, 1995, requesting for an
investigation of petitioner's establishment, Copylandia
Services &Trading, for violation of labor standards
laws. Pursuant to the visitorial and enforcement
powers of the Secretary of Labor and Employment or
his duly authorized representative under Article 128 of
the Labor Code, as amended, inspections were
conducted at Copylandia's outlets on April 27 and May
2, 1995. The inspections yielded the following
violations involving twenty-one (21) employees who
are copier operators: (1) underpayment of wages; (2)
underpayment of 13th month pay; and (3) no service
incentive leave with pay.
Issue:
WON the Regional Director has jurisdiction over the
labor standards case.
Held:
Regional Director has jurisdiction over the case citing
Article 128 (b) of the Labor Code, as amended.
We sustain the jurisdiction of the respondent
Secretary. As the respondent correctly pointed out,
this Court's ruling in Servando that the visitorial power
of the Secretary of Labor to order and enforce
compliance with labor standard laws cannot be
exercised where the individual claim exceeds
P5,000.00, can no longer be applied in view of the
enactment of R.A. No. 7730 amendingArticle 128 (b)
of the Labor Code, viz: Art. 128 (b) Notwithstanding
On 11 May 1990 the management ordered Revised Rules of Court, namely: (a) whether
private respondent to remove their families a writ of execution is still necessary to
from the enforce the Labor

bunkhouse and to explain their violation of Arbiter's order of immediate reinstatement

the company rule. Private respondents pending appeal; (b) whether dismissal for
remove their cause results

families from the premises but failed to in the forfeiture of the employee's right to a
report to the management as required; 13th month pay; and, (c) whether the
instead, they award of

absented themselves from 14 to 18 May attorney's fees is proper in the instant case.
1990. Consequently, on 18 May 1990,
ARCHILLES Archilles Manufacturing Corporation
(ARCHILLES for brevity), Alberto Yu and
terminated their employment for Adrian Yu are the
abandonment and for violation of the
company rule regarding the petitioners, the latter two (2) being the
Chairman and the Vice-President of
use of the bunkhouse. 3 ARCHILLES,

Private respondents filed a complaint for respectively. Private respondents Geronimo

illegal dismissal. On 10 July 1991 the Labor Manuel, Arnulfo Diaz, Jaime Carunungan
Arbiter found and

the dismissal of private respondents illegal Benjamin Rindon were employed by

and ordered their reinstatement as well as ARCHILLES as laborers in its steel factory
the payment located in Barangay

to them the backwages, proportionate 13th Pandayan, Meycauayan, Bulacan, each

month pay for the year 1990 and attorney's receiving a daily wage of P96.00. 1

ARCHILLES was maintaining a bunkhouse in

fees. 4 ARCHILLES appealed. the work area which served as resting place
for its

workers including private respondents. In

On 10 September 1991 private respondent
filed with public respondent National Labor
Relations
Commission a motion for the issuance of a
writ of execution for their immediate
reinstatement,
pending appeal, either physically or in the
company payroll. On 19 September 1991
ARCHILLES
1988 a mauling incident nearly took place
involving a
relative of an employee. As a result
ARCHILLES prohibited its workers from
bringing any member
of their family to the bunkhouse. But
despite this prohibition, private respondents
continued to
bring their respective families to the
bunkhouse, causing annoyance and
discomfort to the other

opposed the motion. workers. 2 This was brought to the

attention of ARCHILLES.
Their motion for partial reconsideration
having been denied by public respondent in
its resolution of
8 September 1992, petitioners filed the
instant petition praying that the questioned
NLRC decision of
11 August 1992 as well as its resolution of 8
September 1992 be partially annulled in
connection with
the award of "withheld" salaries,
proportionate 13th month pay and
attorney's fees.
As regards the first issue, i.e., whether a
writ of execution is still necessary to
enforce the Labor
Arbiter's order of immediate reinstatement
even when pending appeal, we agree with
petitioners
that it is necessary. The third paragraph of
Art. 223 of the Labor Code provides
In any event, the decision of the Labor
Arbiter reinstating a dismissed or separated
employee, insofar as the reinstatement
aspect is concerned, shall be immediately
executory, even pending appeal. The
employee shall either be admitted back to
work
under the same terms and conditions
prevailing prior to his dismissal or
separation
or, at the option of the employer, merely
reinstated in the payroll. The posting of the
bond by the employer shall not stay the
execution for reinstatement provided
herein.
We have fully explained the legal basis for
this conclusion in Maranaw Hotel Resort
Corporation
(Century Park Sheraton Manila) v. NLRC and
Gina G. Castro 6 thus
Since no action was taken by NLRC on the
motion of 10 September 1991, private
respondents filed a
similar motion on 15 July 1992. Both
motions however have remained
unresolved.
On 11 August 1992 NLRC vacated and set
aside the decision of the Labor Arbiter and
ruled that the
dismissal of private respondents was valid
since they wilfully disobeyed a lawful order
of their
employer requiring them to explain their
infraction of a company rule. In the dispute
part of its
decision, however, NLRC ordered
ARCHILLES to pay private respondents their
"withheld" salaries
from 19 September 1991 when it filed its
opposition to the motion for issuance of a
writ of execution
until the promulgation of the NLRC Decision
(11 August 1992) on the ground that the
order of
reinstatement of the Labor Arbiter was
immediately executory, even pending
appeal. And since
ARCHILLES in its opposition alleged that
actual reinstatement was no longer possible
as it would
affect the peace and order situation in the
steel factory, clearly, ARCHILLES had opted
for payroll
reinstatement of private respondents. NLRC
also ordered ARCHILLES to pay their
proportionate
13th month pay for 1990 and P12,351.30
representing 10% of the total judgment
award of
P123,513.00 as attorney's fees. 5
which shall include an entry of judgment.
In the absence . . . of an order for the
issuance of a writ of execution on the
reinstatement aspect of the decision of the
Labor Arbiter, the petitioner was under no
legal obligation to admit back to work the
private respondent under the terms and
conditions prevailing prior to her dismissal
or, at the petitioner's option, to merely
reinstate her in the payroll. An option is a
right of election to exercise a privilege, and
the option in Article 223 of the Labor code
is exclusively granted to the employer.
The event that gives rise for its exercise is
not the reinstatement decree of the Labor
Arbiter, but the writ for its execution
commanding the employer to reinstate the
employee, while the final act which compels
the employer to exercise the option is
the service upon it of the writ of execution
when, instead of admitting the employee
back to his work, the employee chooses to
reinstate the employee in the payroll only.
If the employer does not exercise this
option, it must forthwith admit the
employee
back to work, otherwise it may be punished
for contempt.
In the case at bench, there was no occasion
for petitioners to exercise their option under
Art. 223 of
the Labor Code in connection with the
reinstatement aspect of the decision of the
Labor Arbiter. The
motions of private respondents for the
issuance of a writ of execution were not
acted upon by
NLRC. It was not shown that respondent
exerted efforts to have their motions
resolved. They are
It must be stressed, however, that although
the reinstatement aspect of the decision
is immediately executory, it does not follow
that it is self-executory. There must be a
writ
of execution which may be issued motu
proprio or on motion of an interested party.
Article 224 of the Labor Code provides:
Art. 224. Execution of decisions, orders or
awards. (a) The
Secretary of Labor and Employment or any
Regional Director, the
Commission or any Labor Arbiter, or med-
Arbiter or voluntary
arbitrator may, motu proprio or on motion
of any interested party, issue a
writ of execution on a judgment within five
(5) years from the date it
becomes final and executory . . . .
The second paragraph of Section 1, Rule
XVIII of the New Rules of Procedure of the
NLRC also provides:
The Labor Arbiter, POEA Administrator, or
the Regional Director, or his duly
authorized hearing officer of origin shall,
motu proprio or upon motion of any
interested
party, issue a writ of execution on a
judgment only within five (5) years from the
date
it becomes final and executory . . . . No
motion for execution shall be entertained
nor
a writ be issued unless the Labor Arbiter is
in possession of the records of the case
automatically vested in the employee who
has at least worked for one month during
the calendar
year. As correctly stated by the Solicitor
General, such benefit may not be lost or
forfeited even in the
event of the employee's subsequent
dismissal for cause without violating his
property rights.
With respect to the third issue, the disputed
attorney's fees can only be assessed in
cases of unlawful
withholding of wages. 7 It cannot be said
that petitioners were guilty of unlawfully
withholding private
respondents' salaries since, as earlier
discussed, the occasion never arose for
them to exercise that option
under Art. 223 of the Labor Code. Clearly,
the award of attorney's fees is baseless.
WHEREFORE, the instant petition is partly
granted. The challenged Decision of the
National Labor
Relations Commission dated 11 August
1992 is MODIFIED by deleting that portion
ordering
petitioners to pay private respondents their
salaries from 19 September 1991 to 20
September 1992 as
well as that portion awarding 10% of the
total judgment award as attorney's fees for
lack of legal and
factual basis. In other respects,
Decision is AFFIRMED.
40. Ultra Villa Food Haus vs, Geniston
(1999) G.R. 120473
Facts:
Private respondent Renato Geniston
employed by petitioner Ultra Villa Food House
and/or its alleged owner Rosie Tio. Private
respondent alleged that he was employed as a "do
it all guy" acting as waiter, driver
maintenance man, in said restaurant. During the
deemed to have abandoned their motions
for execution pending appeal. They cannot
now ask that
the writ of execution be issued since their
dismissal was found to be for cause.
On the second issue, which refers to the
propriety of the award of a 13th month pay,
paragraph 6 of
the Revised Guidelines on the
Implementation of the 13th Month Pay Law
(P. D. 851) provides that
"(a)n employee who has resigned or whose
services were terminated at any time
before the payment
of the 13th month pay is entitled to this
monetary benefit in proportion to the length
of time he
worked during the year, reckoned from the
time he started working during the calendar
year up to
the time of his resignation or termination
from the
service . . . The payment of the 13th month
pay may be demanded by the employee
upon the
cessation of employer-employee
relationship. This is consistent with the
principle of equity that as
the employer can require the employee to
clear himself of all liabilities and property
accountability,
so can the employee demand the payment
the of all benefits due him upon the termination
of the
relationship."
Furthermore, Sec. 4 of the original
Implementing Rules of P.D. 851 mandates
employers to pay their
was employees a 13th month pay not later than
the 24th of December every year provided
that they have
worked for at least one (1) month during a
and calendar year. In effect, this statutory
benefit is
Food Haus. There is substantial evidence to
support such conclusion, namely:
(1) Private respondent's admission during the
mandatory conference that he was petitioner's
personal driver.
(2) Copies of the Ultra Villa Food Haus payroll
which do not contain private respondent's name.
(3) Affidavits of Ultra Villa Food Haus employees
attesting that private respondent was never an
employee of said establishment.
(4) Petitioner Tio's undisputed allegation that she
works as the branch manager of the CFC
Corporation whose office is located in Mandaue
City. This would support the Labor Arbiter's
observation that private respondents' position as
driver would be "incongruous" with his functions
as a waiter of Ultra Villa Food Haus.
(5) The Joint Affidavit of the warehouseman and
warehouse checker of the CFC Corporation
stating that: Renato Geniston usually drive[s]
Mrs. Tio from her residence to the office.
Thereafter, Mr. Geniston will wait for Mrs. Tio in
her car. Most of the time, Renato Geniston slept in
the car of Mrs. Tio and will be awakened only
when the latter will leave the office for lunch. Mr.
Geniston will again drive Mrs. Tio to the office at
around 2:00 o'clock in the afternoon and
thereafter the former will again wait for Mrs. Tio
at the latter's car until Mrs. Tio will again leave
the office to make her rounds at our branch office
at the downtown area. In contrast, private
respondent has not presented any evidence other
than his self-serving allegation to show that he
was employed in the Ultra Villa Food Haus.
On this issue, therefore, the evidence weighs
heavily in petitioner's favor. The Labor Arbiter
thus correctly ruled that private respondent was
petitioner's personal driver and not an employee
of the subject establishment. Accordingly, the
terms and conditions of private respondent's
employment are governed by Chapter III, Title III,
Book III of the Labor Code as well as by the
pertinent provisions of the Civil Code.
elections of May 11, 1992, private respondent
acted as Poll Watcher. The counting of votes
lasted until 3:00 p.m. the next day, May 12.
Private respondent did not report for work on
both days on account of his poll watching. As a
result, his employment was terminated by
petitioner Tio on the ground of abandonment.
Private respondent filed a case of illegal dismissal
against petitioners. Petitioner Tio maintained that
private respondent was her personal driver, not
an employee of Ultra Villa Food Haus and denied
dismissing private respondent whom she claimed
abandoned his job.
The Labor Arbiter found that private respondent
was indeed petitioner's personal driver. The
Labor Arbiter concluded that private respondent,
being a personal driver, was not entitled to
overtime pay, premium pay, service incentive
leave and 13th month pay.On appeal, the NLRC
reversed the decision of the labor arbiter and
ordered the reinstatement of private respondent
and payment of backwages, overtime pay,
premium pay for holiday and rest days, etc. The
NLRC also granted private respondent separation
pay in lieu of reinstatement on account of the
establishment's closure but denied his prayer for
moral, actual and exemplary damages, and
attorney's fees. Petitioner moved for
reconsideration but was denied.
Issues:
(1) Whether private respondent was an
employee of the Ultra Villa Food Haus or the
personal driver of petitioner; and
(2) Whether private respondent was illegally
dismissed from employment.
Held:
I. THE LABOR ARBITER CORRECTLY RULED
THAT PRIVATE RESPONDENT WAS
PETITIONER'S PERSONAL DRIVER AND NOT
AN EMPLOYEE OF THE SUBJECT
ESTABLISHMENT. We find that private
respondent was indeed the personal driver of
petitioner, and not an employee of the Ultra Villa
fall. Accordingly, private respondent is ordered to I. PETITIONER IS NOT OBLIGED
pay private respondent the sum of P1,000.00. UNDER THE LAW TO GRANT
PRIVATE RESPONDENT OVERTIME
41. Boie Takeda v Dela Serna Supra
PAY, HOLIDAY PAY, PREMIUM PAY

42. Iran v NLRC Supra AND SERVICE INCENTIVE LEAVE.

II. RIVATE RESPONDENT IS

ENTITLED TO BE INDEMNIFIED
FOR HIS UNJUST DISMISSAL AND
43. Honda Phils., Inc., vs Samahan ng Malayang FOR PETITIONER'S FAILURE TO
Manggagawa sa Honda (2005) G.R. 145561
COMPLY WITH THE
Facts:
REQUIREMENTS OF DUE PROCESS
The case stems from the collective bargaining IN EFFECTING HIS DISMISSAL.
agreement between Honda and the respondent union
that it granted the computation of 14 th month pay as To constitute abandonment, two requisites must
the same as 13th month pay. Honda continues the concur: (1) the failure to report to work or absence
practice of granting financial assistance covered every without valid or justifiable reason, and (2) a clear
December each year of not less than 100% of the basic intention to sever the employer-employee
salary. In the latter part of 1998, the parties started to relationship as manifested by some overt acts,
re-negotiate for the fourth and fifth years of the CBA. with the second requisite as the more
The union filed a notice of strike on the ground of
determinative factor.
unfair labor practice for deadlock.

DOLE assumed jurisdiction over the case and certified
it to the NLRC for compulsory arbitration. The striking
employees were ordered to return to work and
management to accept them back under the same
terms prior to the strike staged. Honda issued a
memorandum of the new computation of the 13 th
month and 14th month pay to be granted to all its
employees whereby the 31 long strikes shall be
considered unworked days for purpose of computing
the said benefits. The amount equivalent to of the
employees basic salary shall be deducted from these
bonuses, with a commitment that in the event that
the strike is declared legal, Honda shall pay the
amount.
The respondent union opposed the pro-rated
computation of bonuses. This issue was submitted to
voluntary arbitration where it ruled that the
companys implementation of the pro-rated
computation is invalid.
Issue: WON the pro-rated computation of the 13th and
14th month pays and other bonuses in question is valid
and lawful.
Held: The pro-rated computation is invalid.
The pro-rated computation of Honda as a company
policy has not ripened into a company practice and it
was the first time they implemented such practice.
The burden of proving abandonment as a just
cause for dismissal is on the employer. Petitioner
failed to discharge this burden. The only evidence
adduced by petitioner to prove abandonment is
her affidavit. It is quite unbelievable that private
respondent would leave a stable and relatively
well paying job as petitioner's family driver to
work as an election watcher.
Though the latter may pay more in a day,
elections in this country are so far in between that
it is unlikely that any person would abandon his
job to embark on a career as an election watcher,
the functions of which are seasonal and
temporary in nature. Consequently, we do not
find private respondent to have abandoned his
job. His dismissal from petitioner's employ being
unjust, petitioner is entitled to an indemnity
under Article 149 of the Labor Code.
Petitioner likewise concedes that she failed to
comply with due process in dismissing private
respondent since private respondent had already
abandoned his job. As we have shown earlier
however, petitioner's theory of abandonment has
no leg to stand on, and with it, her attempts to
justify her failure to accord due process must also
period on days they worked for at least eight (8) hours
and earned below P8.06 daily, and all complainants
their 13th month pay for the years 1978 and 1979. The
Deputy Minister clarified that pakyaw workers were
excluded from holiday and service incentive leave pay.
Issue: Whether awarding pay differentials, holiday and
service incentive leave for pakyaw workers who are
not regular employees but are merely paid on piece-
rate, contrary to Art. 82 of the Labor Code;
Whether or not Framanlis Farm is required to pay 13th
month pay despite the fact that they had substantially
complied with the requirement by extending yearly
bonuses and other benefits in kind and in cash to the
complainants, pursuant to Section 3(c) of PD 851
which exempts the employer from paying 13th month
pay when its equivalent has already been given;
Ruling:
In 1976, PD No. 928 fixed a minimum wage of P7.00
for agricultural workers in any plantation or
agricultural enterprise irrespective of whether or not
the worker was paid on a piece-rate basis. However,
effective July 1, 1978, the minimum wage was
increased to P8.00 (Sec. 1, PD 1389). Subsequently, PD
1614 provided for a P2.00 increase in the daily wage of
all workers effective April 1, 1979. The petitioners
admit that those were the minimum rates prevailing
then. Therefore, the respondent Minister did not err in
requiring the petitioners to pay wage differentials to
their pakyaw workers who worked for at least eight
hours daily and earned less than P8.00 per day in 1978
to 1979.
With regard to the 13th month pay, petitioners
admitted that they failed to pay their workers 13th
month pay in 1978 and 1979. However, they argued
that they substantially complied with the law by giving
their workers a yearly bonus and other non-monetary
benefits amounting to not less than 1/12th of their
basic salary, in the form of food and free electricity.
Unfortunately, under Section 3 of PD No. 851, such
benefits in the form of food or free electricity,
assuming they were given, were not a proper
substitute for the 13th month pay required by law. PD
851 provides:
Section 3. Employees covered The
Decree shall apply to all employees
except to:
xxx
The payment of the 13th month pay in full month
payment by Honda has become an established
practice. The length of time where it should be
considered in practice is not being laid down by
jurisprudence. The voluntary act of the employer
cannot be unilaterally withdrawn without violating
Article 100 of the Labor Code.
The court also rules that the withdrawal of the benefit
of paying a full month salary for 13 th month pay shall
constitute a violation of Article 100 of the Labor Code.
44. Framanlis Farms, Inc., et. al. v. Hon. Minister
of Labor, et. al.
G.R. No. 72616-17 March 8, 1989
Case Doctrine: Productivity Standards
Minister did not err in requiring the petitioners to pay
wage differentials to their pakyaw workers who
worked for at least eight hours daily and earned less
than P8.00 per day.
Under Section 3 of PD No. 851, such benefits in the
form of food or free electricity, assuming they were
given, were not a proper substitute for the 13th
month pay required by law. Neither may year-end
rewards for loyalty and service be considered in lieu of
13th month pay.
Facts: Eighteen (18) employees of Framanlis Farms,
Inc. filed against their employer two labor standard
cases alleging that in 1977 to 1979 they were not paid
emergency cost of living allowance (ECOLA) minimum
wage, 13th month pay, holiday pay, and service
incentive leave pay.
In their answer, Framanlis Farms alleged that the
employees were not regular workers on their hacienda
but were migratory (sacadas) or pakyaw workers who
worked on-and-off and were hired seasonally, or only
during the milling season, to do piece-work on the
farms, hence, they were not entitled to the benefits
claimed by them.
The Minister of Labor directed Framanlis Farms to pay
the deficiency payment of emergency living allowance
and service incentive leave pay, holiday pay and social
amelioration bonus for 3 years for 1977 to 1979. Upon
the petitioners' appeal of that Order, the Deputy
Minister of Labor modified it by ordering the employer
to pay all non-pakyaw workers their claim for holiday
and incentive leave pay for the years 1977, 1978, all
'pakyaw' workers their pay differentials for the same
Executive Labor Arbiter ordered Kamaya
Point Hotel to pay the 14th month pay for
1982 of all its rank and file employees and
to pay the monetary equivalent of the
benefits of then existing Collective
Bargaining Agreement which will expire on
1 July 1984.
NLRC set aside the award of monetary
benefits under the CBA but affirmed the
grant of the 14th month pay for the reason
that it already ripened into a company
practice which respondent company cannot
withdraw unilaterally without violating
article 100 of the Labor Code.
Issue: Whether or not respondents are
entitled the 14th month pay in 1982?
Ruling: There is no law that mandates the
payment of the 14th month pay neither is
there stipulation as to such extra
remuneration in the CBA. The granting of
the 14th month pay is a management
prerogative which cannot be forced upon
the employer. It is patently obvious that
Article 100 is clearly without applicability.
The date of effectivity of the Labor Code is
May 1, 1974. In the case at bar, petitioner
extended its 14th month pay beginning
1979 until 1981. What is demanded is
payment of the 14th month pay for 1982.
Indubitably from these facts alone, Article
100 of the Labor Code cannot apply.
46. Marcos, et. al. vs. NLRC AND Insular Life
Assurance (1995)
FACTS:
Petitioners herein have served respondent
Insular for more than 20 years in multiples of
five (20-30 years). They were terminated due
to redundancy and thus were given special
redundancy benefits. But they were denied
their service awards which was set apart
from the redundancy fund. They were made
to sign a quit claim, which they complied, but
they still submitted a letter of protest. They
inquired from the DOLE-LS on the validity of
the denial of their service awards, to which
DOLE decided in their favour. The service
awards were part of the Employees Manual
and were therefore company policies. The
The term 'its equivalent' as used in
paragraph (c) hereof shall include
Christmas bonus, mid-year bonus,
profit-sharing payments and other
cash bonuses amounting to not less
than 1/12 of the basic salary but
shall not include cash and stock
dividends, cost of living allowances
and all other allowances regularly
enjoyed by the employee, as well as
non-monetary benefits.xxx
Neither may year-end rewards for loyalty and service
be considered in lieu of 13th month pay. Section 10 of
the Rules and Regulations Implementing Presidential
Decree No. 851 provides for the prohibition against
reduction or elimination of benefits or favorable
practice being enjoyed by the employee.
45. Kamaya Point Hotel vs. NLRC GR
86200, Feb 25, 1992
Facts: Respondent Memia Quiambao with
thirty others who are members of private
respondent Federation of Free Workers
(FFW) were employed by petitioner as hotel
crew. On the basis of the profitability of the
company's business operations,
management granted a 14th month pay to
its employees starting in 1979. In January
1982, operations ceased to give way to the
hotel's conversion into a training center for
Libyan scholars. . However, due to technical
and financing problems, the Libyans pre-
terminated the program on July 7, 1982,
leaving petitioner without any business,
aside from the fact that it was not paid for
the use of the hotel premises and in
addition had to undertake repairs of the
premises damaged by the Libyan students.
Although petitioner reopened the hotel
premises to the public, it was not able to
pick-up its lost patronage. In a couple of
months it effected a retrenchment program
until finally on January 7, 1984, it totally
closed its business. On April 18, 1983,
private respondent Federation of Free
Workers (FFW); a legitimate labor
organization, filed a complaint against
petitioner for illegal suspension, violation of
the CBA and non-payment of the 14th
month pay.

CASE LAW/ DOCTRINE:
LABOR LAWS AND SOCIAL
LEGISLATION; TERMINATION OF
EMPLOYMENT; EMPLOYER MAY NOT,
IN THE GUISE OF EXERCISING
MANAGEMENT PREROGATIVES, PAY
SEPARATION BENEFITS UNEQUALLY;
CASE AT BAR. Petitioners' right to
terminate employees on account of
retrenchment to prevent losses or
closure of business operations, is
recognized by law, but it may not
pay separation benefits unequally
for such discrimination breeds
resentment and ill-will among those
who have been treated less
generously than others... xxx
Clearly, there was impermissible
discrimination against the private
respondents in the payment of their
separation benefits. The law requires
an employer to extend equal
treatment to its employees. It may
not, in the guise of exercising
management prerogatives, grant
greater benefits to some and less to
others. Management prerogatives
are not absolute prerogatives but
are subject to legal limits, collective
bargaining agreements, or general
principles of fair play and justice
(UST vs. NLRC, 190 SCRA 758).
Article 283 of the Labor Code, as
amended, protects workers whose
employment is terminated because
of closure of the establishment or
reduction of personnel (Abella vs.
NLRC, 152 SCRA 141, 145).
FACTS:
Businessday Information Systems
and Services Inc. (BSSI) and its
President/Manager (Raul Locsin)
sought to annul an NLRC Decision
which affirmed the finding that BSSI
is liable to pay the respondents
separation pay differentials and mid-
year bonus.
BSSI was engaged in the
manufacture and sale of computer
48.
forms. Due to financial reverses, its
Systems and Services, Inc. v. NLRC
creditors namely the DBP and the
G.R. No. 103575 | 05 April 1993
award was earned on the anniversary date.
Even if the employees were separated from
service before the anniversary date, they
were still entitled to the material benefits of
the award.
However, respondent still refused to pay this.
On its 80th anniversary, the company
approved an anniversary equivalent of one-
month salary to its employees. The
petitioners alleged that they were entitled to
this.
The LA ruled in petitioners favour, but NLRC
reversed this, upholding the validity of the
quitclaim they signed voluntarily.
ISSUE:
W/N the quitclaim was invalid and if so,
petitioners would be entitled to their service
award.
HELD:
Release and Quitclaim INVALID, petitioners
were ENTITLED to the service awards.
A deed of release or quitclaim cannot bar an
employee from demanding payment to which
he is entitled. Quitclaims are against public
policy and are therefore null and void. The
Court does not believe that petitioners signed
the Release and Quitclaim voluntarily, as the
subsequent submission of a letter of protest
and the inquiry before the NLRC contradicted
their willingness to execute the quitclaim.
The special redundancy package could not
have covered the service awards, and
respondents actions estopped it from
claiming such. Service awards are not
bonuses. They are stated in the Employees
Manual, which is contractual in nature
therefor the law between the parties. It is
company policy and has been in practice by
the company.
Businessday Information
 However, mid-year bonus is deleted
and set aside. Further, Raul Locsin is
absolved from any personal liability.
RATIO:
While the law recognizes BSSIs right
to terminate its employees on
account of retrenchment to prevent
losses or closure of business
operations, it may not pay
separation benefits unequally for
such discrimination breeds
resentment and ill-will among those
who have been treated less
generously.
The NLRC observed that the
business climate did not improve
during the small gaps in between
the retrenchment.
There was obviously discrimination
against the first batch of employees.
The law requires an employer to
extend equal treatment to its
employees. It may not, in the guise
of exercising management
prerogatives, grant greater benefits
to some and less to others.
Management prerogatives are
not absolute prerogatives but
are subject to legal limits,
collective bargaining
agreements, or general
principles of fair play and
justice. Article 283 of the Labor
Code protects workers whose
employment is terminated because
of closure of the establishment or
reduction of personnel.
In so far as the mid-year bonus, it is
settled doctrine that the grant of a
bonus is a prerogative, not an
obligation, of the employer. The
matter of giving a bonus over and
above the workers lawful salaries
and allowances is entirely
dependent on the financial
capability of the employer to give it.
The fact that the BSSI was no longer
profitable and that the workers did
not work up to the middle of the
year were valid reasons for not
granting them a mid-year bonus.
As regards Raul Locsin, he is not
liable as a corporate officer unless
he acted with evident malice and
bad faith in terminating their
Asset Privatization Trust (APT) took
possession of BSSIs assets including
its manufacturing plant in Marilao,
Bulacan.
Due to the action of its creditors,
BSSI had to lay off some plant
employees, after prior notice, as a
retrenchment measure. They were
provided separation pay
equivalent to month pay for
every year of service. Upon
receipt, they signed individual
releases and quitclaims in favor of
BSSI.
Not all employees were laid off.
Some were retained in an attempt to
rehabilitate the company.
Unfortunately, 2 and months
later, the remaining employees were
also laid off when the company
decided to end the business
altogether. Unlike the first batch of
laid employees, this batch received
separation pay equivalent to a full
months salary for every year of
service plus mid-year bonus.
Due to this obvious discrimination,
the first batch of laid employees (27)
filed a protest against BSSI and Raul
Locsin.
During the conciliation proceedings
with the Labor Arbiter, BSSI denied
that there was unlawful
discrimination in the payment of
separation benefits to the first batch
of laid workers. BSSI argued that
they were paid retrenchment
benefits mandated by law, while the
remaining employees were granted
higher separation benefits
because their termination was on
account of the closure of the
business.
Labor Arbiter Decision: In favor of
the first batch of laid employees.
NLRC: Affirmed Decision of the
Labor Arbiter. MR was likewise
denied.
ISSUE(S):
W/N BSSI is liable for separation pay
differentials and mid-year bonus to
the first batch of laid employees.
HELD:
Yes, BSSI is liable to pay separation
pay differentials to the employees.
"equality before the law" under the
Constitution does not import a perfect
Identity of rights among all men and
women. It admits of classifications,
provided that (1) such classifications rest
on substantial distinctions; (2) they are
germane to the purposes of the law; (3)
they are not confined to existing conditions;
and (4) they apply equally to all members
of the same class.
The Court is satisfied that the
classification made-the preference for
female workers rests on substantial
distinctions. As a matter of judicial notice,
the Court is well aware of the unhappy
plight that has befallen our female labor
force abroad, especially domestic servants,
amid exploitative working conditions
marked by, in not a few cases, physical and
personal abuse. The sordid tales of
maltreatment suffered by migrant Filipina
workers, even rape and various forms of
torture, confirmed by testimonies of
returning workers, are compelling motives
for urgent Government action. As precisely
the caretaker of Constitutional rights, the
Court is called upon to protect victims of
exploitation. In fulfilling that duty, the Court
sustains the Government's efforts.
Discrimination in this case is justified.
There is likewise no doubt that such
a classification is germane to the purpose
behind the measure. Unquestionably, it is
the avowed objective of Department Order
No. 1 to "enhance the protection for Filipino
female overseas workers" this Court has no
quarrel that in the midst of the terrible
mistreatment Filipina workers have suffered
abroad, a ban on deployment will be for
their own good and welfare.
The Order does not narrowly apply
to existing conditions. Rather, it is intended
to apply indefinitely so long as those
conditions exist. This is clear from the Order
itself ("Pending review of the administrative
and legal measures, in the Philippines and
in the host countries . . ."), meaning to say
that should the authorities arrive at a
means impressed with a greater degree of
permanency, the ban shall be lifted. As a
stop-gap measure, it is possessed of a
necessary malleability, depending on the
circumstances of each case.
employment. No evidence was
presented.
49. Philippine Appliance Corp. v.
Court of Appeals, 430 SCRA 525 (2004)
- SCRA
50. Philippine Association of Service
Exporters, Inc. v. Drilon
G.R. No. 81958, 30 June 1988, EN BANC
(Sarmiento, J.)
The Philippine Association of Service
Exporters, Inc. (PASEI), a firm "engaged
principally in the recruitment of Filipino
workers, male and female, for overseas
placement," challenges the Constitutional
validity of Department Order No. 1,
Series of 1988, of the Department of
Labor and Employment, in the character
of "GUIDELINES GOVERNING THE
TEMPORARY SUSPENSION OF DEPLOYMENT
OF FILIPINO DOMESTIC AND HOUSEHOLD
WORKERS." The measure is assailed for
"discrimination against males or
females;" that it "does not apply to all
Filipino workers but only to domestic
helpers and females with similar
skills;" that it is violative of the right to
travel; and that it is an invalid exercise
of the lawmaking power, police power
being legislative, and not executive in
character.
ISSUE:
Whether or not Department Order
No. 1, a police power measure, is valid
under the Constitution
HELD:
As a general rule, official acts enjoy
a presumed validity. In the absence of clear
and convincing evidence to the contrary,
the presumption logically stands. The
petitioner has shown no satisfactory reason
why the contested measure should be
nullified. There is no question that
Department Order No. 1 applies only to
"female contract workers," but it does not
thereby make an undue discrimination
between the sexes. It is well-settled that

52. Libres v NLRC G.R. No. 123737.
May 28, 1999.
BELLOSILLO, J
Facts:
Petitioner Carlos G. Libres, an electrical
engineer, was holding a managerial
position with National Steel Corporation
(NSC) as Assistant Manager. He was then
asked to comment regarding the charge of
sexual harrassment filed against him by the
VP's secretary Capiral. This was included
with a waiver of his right tobe heard once
he didn't comment.
On 14 August 1993 petitioner submitted his
written explanation denying the accusation
against him and offering to submit himself
for clarificatory interrogation.
The Management Evaluation Committee
said that "touching a female subordinate's
hand and shoulder, caressing her nape and
telling other people that Capiral was the
one who hugged and kissed or that she
responded to the sexual advances are
unauthorized acts that damaged her
honor." They suspended Libres for 30 days
without pay.
He filed charges against the corporation in
the Labor Arbiter, but the latter held that
the company acted with due process and
that his punishment was only mild.
Moreover, he assailed the NLRC decision as
without basis due to the massaging of her
shoulders never discriminated against
her continued employment, impaired her
rights and privileges under the Labor
Code, or created a hostile, intimidating or
offensive environment.
He claimed that he wasn't guaranteed due
process because he wasn't given the right
be heard. This was due to his demand for
personal confrontation not being recognized
The Court finds, finally, the
impugned guidelines to be applicable to all
female domestic overseas workers. That it
does not apply to "all Filipina workers" is
not an argument for unconstitutionality.
Had the ban been given universal
applicability, then it would have been
unreasonable and arbitrary. For obvious
reasons, not all of them are similarly
circumstanced. What the Constitution
prohibits is the singling out of a select
person or group of persons within an
existing class, to the prejudice of such a
person or group or resulting in an unfair
advantage to another person or group of
persons.
Department Order No. 1 is a valid
implementation of the Labor Code, in
particular, its basic policy to "afford
protection to labor," pursuant to the
respondent Department of Labor's rule-
making authority vested in it by the Labor
Code. The petitioner assumes that it is
unreasonable simply because of its impact
on the right to travel, but as we have
stated, the right itself is not absolute. The
disputed Order is a valid qualification
thereto. Neither is there merit in the
contention that Department Order No. 1
constitutes an invalid exercise of legislative
power. It is true that police power is the
domain of the legislature, but it does not
mean that such an authority may not be
lawfully delegated. As we have mentioned,
the Labor Code itself vests the Department
of Labor and Employment with rulemaking
powers in the enforcement whereof.
The petitioners's reliance on the
Constitutional guaranty of worker
participation "in policy and decision-making
processes affecting their rights and
benefits" is not well-taken. The right
granted by this provision, again, must
submit to the demands and necessities of
the State's power of regulation.
51. Phil. Telegraph and Telephone Co.
v. NLRC SCRA
valid cause for termination. Whereas
petitioner Libres was only meted a 30-day
suspension by the NLRC, Villarama, in the
other case was penalized with
termination. As a managerial employee,
petitioner is bound by more exacting work
ethics. He failed to live up to his higher
standard of responsibility when he
succumbed to his moral perversity. And
when such moral perversity is perpetrated
against his subordinate, he provides a
justifiable ground for his dismissal for lack
of trust and confidence.
It is the the duty of every employer
to protect its employees from
oversexed superiors. Public respondent
therefore is correct in its observation that
the Labor Arbiter was in fact lenient in his
application of the law and jurisprudence for
which petitioner must be grateful for.
As pointed out by the Solicitor General, it
could be expected since Libres was
Capirals immediate superior. Fear of
retaliation and backlash, not to forget the
social humiliation and embarrassment that
victims of this human frailty usually suffer,
are all realities that Capiral had to contend
with. Moreover, the delay did not detract
from the truth derived from the facts.
Petitioner Libres never questioned the
veracity of Capirals allegations. In fact his
narration even corroborated the latters
assertion in several material points. He
only raised issue on the complaints
protracted filing.
On the question of due process-
Requirements were sufficiently complied
with. Due process as a constitutional
precept does not always and in all
situations require a trial type proceeding.
Due process is satisfied when a person is
notified of the charge against him and
given an opportunity to explain or defend
himself. The essence of due process is
simply to be heard, or as applied to
administrative proceedings, an opportunity
to explain ones side, or an opportunity to
seek a reconsideration of the action or
ruling complained of.
It is undeniable that petitioner was given a
Notice of Investigation informing him of the
charge of sexual harassment as well as
by the MEC.
In the Supreme Court, petitioner assailed
the failure of the NLRC to strictly apply RA
No. 7877 or the law against sexual
harassment to the instant case. Moreover,
petitioner also contends that public
respondents reliance on Villarama v. NLRC
and Golden Donuts was misplaced. He
draws attention to victim Divina Gonzagas
immediate filing of her letter of resignation
in the Villarama case as opposed to the one
year delay of Capiral in filing her complaint
against him. He now surmises that the
filing of the case against him was merely an
afterthought and not borne out of a valid
complaint, hence, the Villarama case
should have no bearing on the instant case.
Issue: Was Libres accorded due process
when the MEC denied his request for
personal confrontatiom?
Held: Yes Petition denied.
Ratio:
On not strictly applying RA 7877- Republic
Act No. 7877 was not yet in effect at the
time of the occurrence of the act
complained of. It was still being deliberated
upon in Congress when petitioners case
was decided by the Labor Arbiter. As a rule,
laws shall have no retroactive effect unless
otherwise provided, or except in a criminal
case when their application will favor the
accused. Hence, the Labor Arbiter have to
rely on the MEC report and the common
connotation of sexual harassment as it is
generally understood by the public. Faced
with the same predicament, the NLRC had
to agree with the Labor Arbiter. In so doing,
the NLRC did not commit any abuse of
discretion in affirming the decision of the
Labor Arbiter.
On the Villarama afterthought-it was both
fitting and appropriate since it singularly
addressed the issue of a managerial
employee committing sexual harassment
on a subordinate. The disparity in the
periods of filing the complaints in the two
(2) cases did not in any way reduce this
case into insignificance. On the contrary, it
even invited the attention of the Court to
focus on sexual harassment as a just and
making sexual advances on her since her
first year of employment and that when she
would not accede to his requests, he
threatened that he would cause her
termination from service. As to the second
charge, the money entrusted to her was not
lost, but given to the personnel-in-charge
for proper transmittal as evidence by a
receipt signed by the latter. As to the third
charge, she explains that she asked
someone to punch in her card as she was
doing an errand for one of the companys
officers and with the permission of William
Chua. As to the fourth charge, she asserts
that she had no knowledge thereof. To
constitute serious misconduct to justify
dismissal, the acts must be done in relation
to the performance of her duties as would
show her to be unfit to continue working for
her employer. The acts of did not pertain to
her duties as a nurse nor did they
constitute serious misconduct. However
due to the strained relations, in lieu of
reinstatement, she is to be awarded
separation pay of one month for every year
of service until finality of this judgment.
2. Yes. Private respondent admittedly
allowed four years to pass before coming
out with her employers sexual impositions;
but the time to do such varies depending
upon the needs, circumstances and
emotional threshold of the employee. It is
clear that respondent has suffered anxiety,
sleepless nights, besmirched reputation and
social humiliation by reason of the act
complained of. Thus, she should be entitled
to moral and exemplary damages for the
oppressive manner with which petitioners
effected her dismissal and to serve as a
warming to officers who take advantage of
their ascendancy over their employees.
54. APEX MINING CO., INC. versus
NLRC
FACTS:
Private respondent Sinclita Candida
was employed by petitioner Apex
Mining Company, Inc to perform
laundry services at its staff house.
On December 18, 1987, while she
was attending to her assigned task
advising him to submit a written
explanation regarding the matter; that he
submitted his written explanation to his
superior. The VP further allowed him to air
his grievance in a private session He was
given more than adequate opportunity to
explain his side and air his grievances.
Personal confrontation was not necessary.
Homeowners v NLRC- litigants may be
heard through pleadings, written
explanations, position papers, memoranda
or oral arguments.
53. Philippine Aeolus Automotive
United Corporatoin v. NLRC
FACTS: Private respondent was a company
nurse for the Philippine Aelous United
Corporation. A memorandum was issued by
the personnel manager of petitioner
corporation to respondent Cortez asking her
to explain why no action should be taken
against her for (1) throwing a stapler at
plant manager William Chua; (2) fro losing
the amount of Php 1,488 entrusted to her;
(3) for asking a co- employee to punch in
her time card one morning when she was
not there. She was then placed on
preventive suspension. Another
memorandum was sent to her asking her to
explain why she failed to process the ATM
applications of her co-employees. She
submitted a written explanation as to the
loss of Php 1,488 and the punching in of her
time card. A third memorandum was sent to
her informing her of her termination from
service for gross and habitual neglect of
duties, serious misconduct, and fraud or
willful breach of trust.
ISSUES:
1. W/N petitioner was illegally dismissed.
2. If such dismissal was illegal, W/N
petitioner should be entitled to damages.
HELD:
1. Yes. The grounds by which an employer
may validly terminate the services of an
employee must be strictly construed. As to
the first charge, respondent claims that
plant manager William Chua had been
 The definition cannot be interpreted
to include househelper or
laundrywomen working in
staffhouses of a company, like
private respondent who attends to
the needs of the company's guest
and other persons availing of said
facilities.
The mere fact that the househelper
or domestic servant is working
within the premises of the business
of the employer and in relation to or
in connection with its business, as in
its staffhouses for its guest or even
for its officers and employees,
warrants the conclusion that such
househelper or domestic servant is
and should be considered as a
regular employee.
WHEREFORE, the petition is DISMISSED and the
appealed decision and resolution of public respondent
NLRC are hereby AFFIRMED. No pronouncement as to
costs.
ISSUE:
HELD:
and she was hanging her laundry,
she accidentally slipped and hit her
back on a stone. As a result of the
accident she was not able to
continue with her work. She was
permitted to go on leave for
medication.
De la Rosa offered her the amount of
P 2,000.00 which was eventually
increased to P5,000.00 to persuade
her to quit her job, but she refused
the offer and preferred to return to
work.
Petitioner did not allow her to return
to work and dismissed her on
February 4, 1988.
Private respondent filed a request
for assistance with the Department
of Labor and Employment, which the
latter rendered its Decision by
ordering the Apex Mining Co. to pay
Candida the total amount of
P55,161.42 for salary differential,
emergency living allowance, 13th
month pay differential and
separation pay.
Petitioner appealed the case before
the NLRC, which was subsequently
dismissed for lack of merit.
Whether or not the private
respondent should be treated as
househelper or domestic servant or
a regular employee.
Under Rule XIII, Section l(b), Book 3
of the Labor Code, as amended, the
term "househelper" as used herein is
synonymous to the term "domestic
servant" and shall refer to any
person, whether male or female,
who renders services in and about
the employer's home and which
services are usually necessary or
desirable for the maintenance and
enjoyment thereof, and ministers
exclusively to the personal comfort
and enjoyment of the employer's
family.