408 SUPREME COURT REPORTS ANNOTATED

Pulp and Paper, Inc. vs. NLRC

*
G.R. No. 116593. September 24, 1997.

PULP AND PAPER, INC., petitioner, vs. NATIONAL

LABOR RELATIONS COMMISSION AND EPIFANIA
ANTONIO, respondents.

Labor Law; Wages; Piece-Rate Workers; In the absence of wage

rates based on time and motion studies determined by the labor
secretary or submitted by the employer to the labor secretary for his
approval, wage rates of piece-rate workers must be based on the
applicable daily minimum wage determined by the Regional
Tripartite Wages and Productivity Commission.·In the absence of
wage rates based on time and motion studies determined by the
labor secretary or submitted by the employer to the labor secretary
for his approval, wage rates of piece-rate workers must be based on
the applicable daily minimum wage determined by the Regional
Tripartite Wages and Productivity Commission. To ensure the
payment of fair and reasonable wage rates, Article 101 of the Labor
Code provides that „the Secretary of Labor shall regulate the
payment of wages by results, including pakyao, piecework and other
nontime work.‰ The same statutory provision also states that the
wage rates should be based, preferably, on time and motion studies,
or those arrived at in consultation with representatives of workersÊ
and employersÊ organizations. In the absence of such prescribed
wage rates for piece-rate workers, the ordinary minimum wage
rates prescribed by the Regional Tripartite Wages and Productivity
Boards should apply. This is in compliance with Section 8 of the
Rules Implementing Wage Order Nos. NCR-02 and NCR-02-A·the
prevailing wage order at the time of dismissal of private
respondent.

Same; Same; Same; Separation Pay; In the absence of an

appropriate wage rate for an employerÊs piece-rate workers, the labor
arbiter cannot be faulted for applying the prescribed minimum wage
rate in the computation of the workersÊ separation pay.·In the
present case, petitioner as the employer unquestionably failed to
discharge the foregoing responsibility. Petitioner did not submit to
the secretary of labor a proposed wage rate·based on time and
motion studies and reached after consultation with the
representatives from both workersÊ and employersÊ organization·
which would have ap-

_______________

* THIRD DIVISION.

409

VOL. 279, SEPTEMBER 24, 1997 409

Pulp and Paper, Inc. vs. NLRC

plied to its piece-rate workers. Without those submissions, the labor

arbiter had the duty to use the daily minimum wage rate for
nonagricultural workers prevailing at the time of private
respondentÊs dismissal, as prescribed by the Regional Tripartite
Wages and Productivity Boards. Put differently, petitioner did not
take the initiative of proposing an appropriate wage rate for its
piece-rate workers. In the absence of such wage rate, the labor
arbiter cannot be faulted for applying the prescribed minimum
wage rate in the computation of private respondentÊs separation
pay. In fact, it acted and ruled correctly and legally in the premises.

Same; Same; Same; Same; Where there is no appropriate wage

rate, the applicable minimum wage rate for an eight-hour working
day is the basis for the computation of the separation pay of piece-
rate workers.·It is clear, therefore, that the applicable minimum
wage for an eight-hour working day is the basis for the computation
of the separation pay of piece-rate workers like private respondent.
The computed daily wage should not be reduced on the basis of
unsubstantiated claims that her daily working hours were less than
eight. Aside from its bare assertion, petitioner presented no clear
proof that private respondentÊs regular working day was less than
eight hours. Thus, the labor arbiter correctly used the full amount
of P118.00 per day in computing private respondentÊs separation
pay.
 Same; Dismissals; Suspension of Operations; Constructive
Dismissals; Separation Pay; Where an employee is not reemployed
within six (6) months from the „suspension‰ of her employment, she
is deemed to have been constructively dismissed; Employees who are
constructively dismissed are entitled to separation pay.·Petitioner
failed to discern that public respondent, in finding that the services
of private respondent were terminated, merely adopted by analogy
the rule on constructive dismissal. Since private respondent was not
reemployed within six (6) months from the „suspension‰ of her
employment, she is deemed to have been constructively dismissed.
Otherwise, private respondent will remain in a perpetual „floating
status.‰ Because petitioner had not shown by competent evidence
any just cause for the dismissal of private respondent, she is
entitled to reinstatement or, if this is not feasible, to separation pay
equivalent to one (1) month salary for every year of service. Private
respondent, however, neither asked for reinstatement nor appealed
from the labor arbiterÊs finding that she was not illegally dismissed;
she merely prayed for the grant of her monetary claims. Thus, we
sustain the award of separation pay made by public respondent, for

410

410 SUPREME COURT REPORTS ANNOTATED

Pulp and Paper, Inc. vs. NLRC

employees constructively dismissed are entitled to separation pay.

Because she did not ask for more, we cannot give her more. We
repeat: she appealed neither the decision of the labor arbiter nor
that of the NLRC. Hence, she is not entitled to any affirmative
relief.

Same; Same; Retrenchments; For retrenchment to be considered

a ground for termination, the employer must serve a written notice
on the workers and the Department of Labor and Employment at
least one month before the intended date thereof.·Furthermore, we
cannot sustain petitionerÊs claim that private respondent was
retrenched. For retrenchment to be considered a ground for
termination, the employer must serve a written notice on the
workers and the Department of Labor and Employment at least one
month before the intended date thereof. Petitioner did not comply
with this requirement.
SPECIAL CIVIL ACTION in the Supreme Court.
Certiorari.

The facts are stated in the opinion of the Court.

F.S. De Guzman & Associates for petitioner.

PANGANIBAN, J.:

In the absence of wage rates specially prescribed for

piecerate workers, how should the separation pay and
salary differential of such workers be computed?

Statement of the Case

This is the main question raised in the instant petition for

certiorari, filed under Rule 65 of the Rules of Court, to set1
aside and2
annul National Labor Relations CommissionÊs
Decision 3promulgated on September 24, 1993 and
Resolution

_______________

1 Second Division composed of Commissioner Rogelio I. Rayala,

ponente, and Presiding Commissioner Edna Bonto-Perez and
Commissioner Domingo H. Zapanta, concurring.
2 Rollo, pp. 40-47.
3 Ibid., pp. 54-55.

411

VOL. 279, SEPTEMBER 24, 1997 411

Pulp and Paper, Inc. vs. NLRC

dated
4
December 16, 1993 in NLRC NCR CA No. 004041-
92. Public respondentÊs assailed Decision affirmed
5
in toto
Labor Arbiter Eduardo J. CarpioÊs
6
decision dated October
6, 1992, which disposed thus:

„IN VIEW OF ALL THE FOREGOING, judgement [sic] is hereby

rendered:

1. dismissing the complaint for illegal dismissal for lack of

merit;
2. ordering respondent Pulp and Papers Distributors, Inc. to
pay complainant Efipania (sic) Antonio the sum of
 P49,088.00 representing her separation pay; and
3. ordering respondent to pay the complainant the sum of
P31,149.56 representing the underpayment of wages.
4. dismissing all other issues for lack of merit.‰

The assailed Resolution denied petitionerÊs motion for

reconsideration for lack of merit.

The Facts
7
The facts as found by the labor arbiter are as follows:

„A case of illegal dismissal and underpayment of wages [was] filed

by MS. EPIFANIA ANTONIO [private respondent herein] against
PULP AND PAPER DISTRIBUTORS, INC., [petitioner herein] x x
x.
In filing the present complaint, complainant in her position
paper alleges that she was a regular employee of the x x x
corporation having served thereat as Wrapper sometime in
September 1975. On November 29, 1991, for unknown reasons, she
was advised verbally of her termination and was given a prepared
form of Quitclaim and Release which she refused to sign. Instead
she brought the present complaint for illegal dismissal.
In charging the [herein petitioner] of underpayment of wages,
complainant in the same position paper alleges that, rarely during

_______________

4 Formerly NLRC NCR 00-01-00494-92.

5 Rollo, pp. 25-29.
6 Ibid., pp. 28-29.
7 Ibid., pp. 25-27.

412

412 SUPREME COURT REPORTS ANNOTATED

Pulp and Paper, Inc. vs. NLRC

her employment with the respondent she received her salary, a

salary which was in accordance with the minimum wage law. She
was not paid overtime pay, holiday pay and five-day service
incentive leave pay, hence she is claiming for payments thereof by
instituting the present case.
Respondent on the otherhand [sic] denied having terminated the
services of the complainant and alleges inter alia that starting 1989
the orders from customers became fewer and dwindled to the point
that it is no longer practical to maintain the present number of
packer/wrappers. Maintaining the same number of
packers/wrappers would mean less pay because the work allocation
is no longer the same as it was. Such being the case, the respondent
has to reduce temporarily the number of packers/wrappers.
Complainant was among those who were temporarily laid-off from
work. Complainant last worked with the company on June 29, 1991.
As regards complainantÊs allegation that on November 29, 1991,
she was forced to sign a quitclaim and release by the respondent,
the latter clarified that considering that five months from the time
the complainant last worked with the company, the management
decided to release the complainant and give her a chance to look for
another job in the meantime that no job is available for her with the
company. In other words, complainant was given the option and
considering that she did not sign the documents referred to as the
Quitclaim and Release, the respondent did not insist, and did not
terminate the services of the complainant. It was just surprise [sic]
to receive the present complaint. In fact, respondent added that the
reason why the complainant was called on November 29, 1991 was
not to work but to receive her 13th month pay of P636.70 as shown
by the voucher she signed (Annex-A, Respondent).
As regards the claim of the complainant for underpayment,
respondent did not actually denied (sic) the same but give [sic] the
reservation that should the same be determined by this Office it is
willing to settle the same considering the fact that complainant
herein being paid by results, it is not in a proper position to
determine whether the complainant was underpaid or not.‰

The Issues
8
Petitioner couched the main issue in this wise:

_______________

8 Ibid., pp. 8-9; some of the words in the text are originally in upper
case.

413

VOL. 279, SEPTEMBER 24, 1997 413

Pulp and Paper, Inc. vs. NLRC

„Did the Public Respondent NLRC act correctly in affirming in toto

the decision rendered by the labor arbitration branch a quo in
NLRC NCR Case No. 00-01-00494-92?‰

While it expressly admits that private respondent is

entitled to separation pay, petitioner raises nonetheless the
following queries: „(a) Are the factors in determining the
amount of separation pay for a Âpiece-rate workerÊ the same
as that of a Âtime-worker?Ê (b) Is a worker, who was
terminated for lack of work, entitled to separation pay 9
at
the rate of one-monthÊs pay for every year of service?‰ The
petition is based on the following „grounds‰:

„I

Public Respondent NLRC committed grave abuse of discretion and

serious reversible error when it affirmed in toto the award of
separation pay in favor of private respondent, without bases in fact
and in law.

II

Public Respondent NLRC committed grave abuse of discretion

and serious reversible error when it affirmed in toto the award of
underpayment in favor of private respondent, without bases in fact
and in law.‰

The Public RespondentÊs Ruling

In dismissing
10
the appeal of petitioner, public respondent
reasoned:

„It is true that all the above circumstances cited by the [herein
petitioner] are not present in the case at bar, hence, separation pay
based on those circumstances is not owing to the [herein private
respondent]. However, it is quite obvious that [petitioner] missed
the legal and factual basis why separation pay was awarded by the
Labor Arbiter. In the first place, the [petitioner] admits that the

_______________

9 Ibid., p. 9.
10 Ibid., pp. 44-46.

414

414 SUPREME COURT REPORTS ANNOTATED

 Pulp and Paper, Inc. vs. NLRC

complainant-appellee was temporarily laid off on June 29, 1991.

This means that there was a temporary suspension of employer-
employee relationship between the appellant and the appellee.
Layoff is a temporary termination initiated by the employer, but
without prejudice to the reinstatement or recall of the workers who
have been temporarily separated. The reasons for laying off
employees are varied: lack of work, shutdown for repairs, business
reverses, and the like. Always, however, there is the expectation
that the employees who have been laid off will be recalled or
rehired. This situation is governed by Rule I, Section 12, of Book VI
of the Implementing Rules and Regulations of the Labor Code,
which provides:

ÂSec. 12. Suspension of Relationship.·The employer-employee

relationship shall be deemed suspended in case of suspension of
operation of the business or undertaking of the employer for a period not
exceeding six (6) months x x x.Ê

From June 29, 1991 up to the time the complainant-appellee

filed her complaint on January 21, 1992, there was more than six
(6) months that already elapse (sic) and yet, the appellant failed to
recall the appellee to let her resume working. If the appellant was
not yet in a position to recall or reinstate the appellee after six (6)
months, up to when shall appellant let her keep in waiting. Of
course, she cannot be allowed to wait interminably. That is the
reason why the law imposes a period of six (6) months within which
the resumption of employer-employee relationship must be resumed
in temporary lay-offs. Otherwise, any employer can, in the guise of
a temporary lay-off, close its doors to an employee for more than six
months and their claim that the lay-off has ripened into
termination and try to get away from any liability. The award of
separation pay is hereby declared in order.
On the second issue raised by the (petitioner) on appeal, We are
also for the Labor ArbiterÊs ruling upholding the appelleeÊs right to
salary differential in the amount computed.
The argument interposed by the [petitioner] based on Art. 101 of
the Labor Code, in relation to Rule VII, Section (8), Book III of the
Omnibus Implementing Rule and Regulations, will not lie in the
case at bar. In the first place, pursuant to the provision of law cited
by the [petitioner], all time and motion studies, or any other
schemes or devices to determine whether the employees paid by
results are being compensated in accordance with the minimum
wage requirements, shall only be approved on petition of the
interested employer. Thus, it is the fault of the [petitioner] on whose
 415

VOL. 279, SEPTEMBER 24, 1997 415

Pulp and Paper, Inc. vs. NLRC

initiative, a time and motion study or any other similar scheme

is not yet available in its establishment.‰

The CourtÊs Ruling

The appeal is not meritorious.

First Issue: Computation of Minimum Wage

Petitioner argues that private respondent was a piece-rate

worker and not a time-worker. Since private respondentÊs
employment as „(p)acker/(w)rapper‰ in 1975 until her
separation on June 29, 1991, „(h)er salary depended upon
the number of Âreams of bond paperÊ she packed per day.‰
Petitioner contends that private respondentÊs work
„depended upon the number and availability of purchase
orders from customers.‰ Petitioner adds that, oftentimes,
„packers/wrappers only work three to four hours a day.‰
Thus, her separation pay „must be based on her latest
actual compensation per piece or on the minimum wage per
piece as determined by Article 101 of the Labor Code,
whichever is higher, and not 11
on the daily minimum wage
applicable to time-workers.‰

Compensation of Pieceworkers
In the absence of wage rates based on time and motion
studies determined by the labor secretary or submitted by
the employer to the labor secretary for his approval, wage
rates of piece-rate workers must be based on the applicable
daily minimum wage determined by the Regional Tripartite
Wages and Productivity Commission. To ensure 12the
payment of fair and reasonable wage rates, Article 101 of
the Labor Code

_______________

11 Ibid., pp. 11-13; underscoring omitted.

12 The provision reads:
 „Art. 101. Payment by results.·(a) The Secretary of Labor shall
regulate the payment of wages by results, including pakyao, piecework
and other nontime work, in order to ensure the payment of fair and
reasonable wage rates, preferably through time and

416

416 SUPREME COURT REPORTS ANNOTATED

Pulp and Paper, Inc. vs. NLRC

provides that „the Secretary of Labor shall regulate the

payment of wages by results, including pakyao, piecework
and other nontime work.‰ The same statutory provision
also states that the wage rates should be based, preferably,
on time and motion studies, or those arrived at in
consultation with representatives of workersÊ and
employersÊ organizations. In the absence of such prescribed
wage rates for piece-rate workers, the ordinary minimum
wage rates prescribed by the Regional Tripartite Wages
and Productivity Boards should apply. This is in
compliance with Section 8 of the Rules Implementing Wage
Order Nos. NCR-02 and NCR-02-A·the prevailing wage 13
order at the time of dismissal of private respondent, viz.:

„SEC. 8. Workers Paid by Results.·a) All workers paid by results

including those who are paid on piece work, takay, pakyaw, or task
basis, shall receive not less than the applicable minimum wage rates
prescribed under the Order for the normal working hours which
shall not exceed eight (8) hours work a day, or a proportion thereof
for work of less than the normal working hours.
The adjusted minimum wage rates for workers paid by results
shall be computed in accordance with the following steps:

1) Amount of increase in AMW x 100 = % increase

Previous AMW
2) Existing rate/piece x % increase = increase in
rate/piece;
3) Existing rate/piece + increase in rate/piece =
adjusted rate/piece.

b) The wage rates of workers who are paid by results shall

continue to be established in accordance with Art. 101 of the Labor
Code, as amended and its implementing regulations.‰ (Italics
supplied.)
_______________

motion studies or in consultation with representatives of workersÊ and

employersÊ organizations.‰
13 Issued in pursuance of Section 5, Rule IV of the National Wages and
Productivity Commission Rules of Procedure on Minimum Wage Fixing
and took effect per Section 16 of the same Rules on January 8, 1991.

417

VOL. 279, SEPTEMBER 24, 1997 417

Pulp and Paper, Inc. vs. NLRC

On November 29, 1991, private respondent was orally

informed of the termination of her employment. Wage
Order No. NCR-02, in effect at the time, set the minimum
daily wage for non-agricultural
14
workers like private
respondent at P118.00. This was the rate used by the
labor arbiter in computing the separation pay of private
respondent. We cannot find any abuse of discretion, let
alone grave abuse, in the order of the labor arbiter which
was later affirmed by the NLRC.
Moreover, since petitioner employed piece-rate workers,
it should have inquired from the secretary of labor about
their prescribed specific wage rates. In any event, there
being no such prescribed rates, petitioner, after
consultation with its workers, should have submitted for
the labor secretaryÊs approval time and motion studies as
basis for the wage rates of its employees. This
responsibility of the employer is clear under Section 8, Rule
VII, Book III of the Omnibus Rules Implementing the
Labor Code:

„Section 8. Payment by result.·(a) On petition of any interested

party, or upon its initiative, the Department of Labor shall use all
available devices, including the use of time and motion studies and
consultations with representatives of employersÊ and workersÊ
organizations, to determine whether the employees in any industry
or enterprise are being compensated in accordance with the
minimum wage requirements of this Rule.

(b) The basis for the establishment of rates for piece, output or
contract work shall be the performance of an ordinary
worker of minimum skill or ability.
(c) An ordinary worker of minimum skill or ability is the
 average worker of the lowest producing group representing
50% of the total number of employees engaged in similar
employment in a particular establishment, excluding
learners, apprentices and handicapped workers employed
therein.
(d) Where the output rates established by the employer do not
conform with the standards prescribed herein, or with the
rates

_______________

14 Section 4 of the Rules Implementing Wage Order Nos. NCR-02 and NCR-
02-A.

418

418 SUPREME COURT REPORTS ANNOTATED

Pulp and Paper, Inc. vs. NLRC

prescribed by the Department of Labor in an appropriate

order, the employees shall be entitled to the difference
between the amount to which they are entitled to receive
under such prescribed standards or rates and that actually
paid them by employer.‰

In the present case, petitioner as the employer

unquestionably failed to discharge the foregoing
responsibility. Petitioner did not submit to the secretary of
labor a proposed wage rate·based on time and motion
studies and reached after consultation with the
representatives from both workersÊ and employersÊ
organization·which would have applied to its piece-rate
workers. Without those submissions, the labor arbiter had
the duty to use the daily minimum wage rate for
nonagricultural workers prevailing at the time of private
respondentÊs dismissal, as prescribed by the Regional
Tripartite Wages and Productivity Boards. Put differently,
petitioner did not take the initiative of proposing an
appropriate wage rate for its piece-rate workers. In the
absence of such wage rate, the labor arbiter cannot be
faulted for applying the prescribed minimum wage rate in
the computation of private respondentÊs separation pay. In
fact, it acted and ruled correctly and legally in the
premises.
It is clear, therefore, that the applicable minimum wage
for an eight-hour working day is the basis for the
computation of the separation pay of piece-rate workers
like private respondent. The computed daily wage should
not be reduced on the basis of unsubstantiated claims that
her daily working hours were less than eight. Aside from
its bare assertion, petitioner presented no clear proof that
private respondentÊs regular working day was less than
eight hours. Thus, the labor arbiter correctly used the full
amount of P118.00 per day in computing private
respondentÊs 15separation pay. We agree with the following
computation:

„Considering therefore that complainant had been laid-off for more

than six (6) months now, we strongly feel that it is already
reasonable for the respondent to pay the complainant her
separation

_______________

15 Labor arbiterÊs decision, p. 4; rollo, p. 28.

419

VOL. 279, SEPTEMBER 24, 1997 419

Pulp and Paper, Inc. vs. NLRC

pay of one month for every year of service, a fraction of six (6)
months to be considered as one whole year. Separation pay should
be computed based on her minimum salary as will be determined
hereunder.

Separation pay 1 month = 16 years

P118.00 x 26 x 16 years = P49,088.00‰

The amount „P118.00‰ represents the applicable daily

minimum wage per Wage Order Nos. NCR-02 and NCR-02-
A; „26,‰ the number of working days in a month after
excluding the four Sundays which are deemed rest days;
„16,‰ the total number of years spent by private respondent
in the employ of petitioner.

Second Issue: Computation of Separation Pay

Petitioner questions not only the basis for computing

private respondentÊs monthly wage; it also contends that
private respondentÊs separation pay should not have been
computed at one monthÊs pay for every year of service.
Because private respondent should be considered
retrenched, the separation pay should be „one monthÊs pay
or at least one/half (1/2) month pay for every year of
service, whichever is higher, and not one (1) monthÊs pay 16
for every year of service as public respondent had ruled.‰
Petitioner misapprehended the ground relied upon by
public respondent for awarding separation pay. In this
case, public respondent held that private respondent was
constructively dismissed, pursuant to Article 286 of the
Labor Code which reads:

„ART. 286. When employment not deemed terminated.·The

bonafide suspension of the operation of a business or undertaking
for a period not exceeding six (6) months, or the fulfillment by the
employee of a military or civic duty shall not terminate
employment. In all such cases, the employer shall reinstate the
employee to his former position without loss of seniority rights if he
indicates his

_______________

16 Rollo, p. 15.

420

420 SUPREME COURT REPORTS ANNOTATED

Pulp and Paper, Inc. vs. NLRC

desire to resume his work not later that one (1) month from the
resumption of operations of his employer or from his relief from the
military or civic duty.‰

Petitioner failed to discern that public respondent, in

finding that the services of private respondent were
terminated, merely adopted by analogy the rule on
constructive dismissal. Since private respondent was not
reemployed within six (6) months from the „suspension‰ of
her employment,
17
she is deemed to have been constructively
dismissed. Otherwise, private respondent will remain in a
perpetual „floating status.‰ Because petitioner had not
shown by competent evidence any just cause for the
dismissal of 18private respondent, she is entitled to
reinstatement or, if this is not feasible, to separation pay
equivalent to one (1) month salary for every year of service.
Private respondent, however, neither asked for
 19
reinstatement nor appealed from the labor arbiterÊs
finding that she was not illegally dismissed; she merely
prayed for the grant of her monetary claims. Thus, we
sustain the20 award of separation pay made by public
respondent, for employees constructively dismissed are
entitled to separation pay. Because she did not ask for
more, we cannot give her more. We repeat: she appealed
neither the decision of the

_______________

17 Manipon, Jr. vs. National Labor Relations Commission, 239 SCRA

451, 457, December 27, 1994; PeopleÊs Security, Inc. vs. NLRC, 226 SCRA
146, 152-153, September 8, 1993; International Hardware, Inc. vs.
NLRC, 176 SCRA 256, 261, August 10, 1989.
18 „Article 279. Security of Tenure. In cases of regular employment, the
employer shall not terminate the services of an employee except for a just
cause or when authorized by this Title. An employee who is unjustly
dismissed from work shall be entitled to reinstatement without loss of
seniority rights and other privileges and to his full backwages, inclusive
of allowances, and to his other benefits or their monetary equivalent
computed from the time his compensation was withheld from him up to
the time of his actual reinstatement." (As amended by Section 34 of RA
6715).
19 Rollo, pp. 142-145.
20 Toogue vs. National Labor Relations Commission, 238 SCRA 241,
246, November 18, 1994.

421

VOL. 279, SEPTEMBER 24, 1997 421

Pulp and Paper, Inc. vs. NLRC

labor arbiter nor that of the NLRC. Hence, she is not

entitled to any affirmative relief.
Furthermore, we cannot sustain petitionerÊs claim that
private respondent was retrenched. For retrenchment to be
considered a ground for termination, the employer must
serve a written notice on the workers and the Department
of Labor and Employment21
at least one month before the
intended date thereof. Petitioner did not comply with this
requirement.

Third Issue: Determination of Salary Differential

In light of the foregoing discussion, we must also dismiss
petitionerÊs challenge to the computation of salary
differential. As earlier observed, private respondent is
entitled to the minimum wage prevailing at the time of the
termination of her employment. The same rate of minimum
wage, P118.00, should be used in computing her salary
differential resulting from petitionerÊs underpayment of her
wages. Thus, the labor arbiter correctly deducted private
respondentÊs actually received wage of P60 a day from the
prescribed daily minimum wage of P118.00, and multiplied
the difference by 26 working days, and subsequently by 16
years, equivalent to her length of service with petitioner.
22
Thus, the amount of P31,149.56 as salary differential.

_______________

21 Article 283, Labor Code. See Catatista vs. NLRC, 247 SCRA 46,
August 3, 1995.
22 From the computation of the labor arbiter, the following figures
were utilized:
„Underpayment Average (P60/day)
1/21/89 - 6/30/89 = 5.3 mos.
P64.00 (minimum wage [RA 6640] effective December 14, 1987) -
P60.00
= P4.00 x 26 x 5.3/mos.
= P551.20
7/1/89 - 10/31/90 = 16.0/mos.
P89.00 (minimum wage [RA 6727], effective July 1, 1989) -P60.00
= P29.00 x 26 x 16.0/mos.
= P12,064.00

422

422 SUPREME COURT REPORTS ANNOTATED

Pulp and Paper, Inc. vs. NLRC

Petitioner argues that „the work of the private respondent

is seasonal, being dependent upon the availability of 23
joborders‰ and not „twenty-six (26) days a month.‰
Further, petitioner contends that private respondent
herself admitted
24
she was „a piece worker whose work [was]
seasonal.‰
Contrary to the assertion of petitioner, neither the
assailed Decision nor the pleadings of private respondent
show that private respondentÊs work was seasonal. More
important, petitioner utterly failed to substantiate its
allegation that private respondentÊs work was seasonal. We
observe that the labor arbiter based the computation of the
salary differential on a 26-day month on the presumption
that private respondentÊs work was continuous. In view of
the failure of petitioner to support its claim, we must
sustain the correctness of this computation.
WHEREFORE, premises considered, the petition is
DISMISSED and the assailed Decision is AFFIRMED.
Costs against petitioner.
SO ORDERED.

Narvasa (C.J., Chairman), Romero, Melo and

Francisco, JJ., concur.

Petition dismissed, judgment affirmed.

Notes.·Where preventive suspension is more apparent

than real, there is constructive dismissal. (C. Alcantara &

______________

11/1/90 - 1/7/91 = 2.23/mos.

P106.00 (minimum wage-Wage Order No. [NCR-01], effective
November 1, 1990)-P60.00
= P46.00 x 26 x 2.23/mos.
= P15,773.68 11/23/91 - 11/29/91 = 0.2/mo.
P118.00 (minimum wage-Wage Order No. [NCR-02], effective January
8, 1991)-P100.00 = P18.00 x 26 x 0.2/mo. = P 93.60
Total P31,149.56.‰
23 Rollo, pp. 16-17.
24 Ibid., p. 155.

423

VOL. 279, SEPTEMBER 24, 1997 423

People vs. Magdamit

Sons, Inc. vs. National Labor Relations Commission, 229

SCRA 109 [1994])
A security guard is considered to have been
constructively dismissed where more than six months had
passed since he was put on „reserve‰ status. (Manipon, Jr.
vs. National Labor Relations Commission, 239 SCRA 451
 [1994])
While it is the prerogative of management to transfer
employees as the exigency of the business may require, this
prerogative cannot, however, be exercised if the result is
the demotion in rank or the diminution in salary, benefits
and other prerogatives of the employee. (Asis vs. National
Labor Relations Commission, 252 SCRA 379 [1996])

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