PHILIPPINE DUPLICATORS, INC., Petitioner, vs.

 NATIONAL LABOR RELATIONS

COMMISSION and PHILIPPINE DUPLICATORS EMPLOYEES UNION -
TUPAS, Respondents.

G.R. No. 110068 November 11, 1993

FACTS:

Philippine Duplicators Employees Union, for and on behalf of its member-

salesmen, asked Philippine Duplicators, Inc. for payment of 13th month pay computed
on the basis of the salesmen's fixed or guaranteed wages plus commissions.

Petitioner Corporation refused the union's request, but stated it would respect an
opinion from the MOLE.

On 17 November 1987, acting upon a request for opinion submitted by

respondent union, Director Augusto G. Sanchez of the Bureau of Working Conditions,
MOLE, rendered an opinion to respondent union declaring applicable the provisions of
Explanatory Bulletin No. 86-12:

Item No. 5 (a), Since the salesmen of Philippine Duplicators

are receiving a fixed basic wage plus commission on sales and not purely
on commission basis, they are entitled to receive 13th month pay
provided they worked at least one (1) month during the calendar year.
May we add at this point that in computing such 13th month pay, the total
commissions of said salesmen for the calendar year shall be divided by
twelve (12).

Notwithstanding Director Sanchez' opinion or ruling, petitioner refused to pay the

claims of its salesmen for 13th month pay computed on the basis of both fixed wage
plus sales commissions.

NLRC, and the union thereupon instituted a complaint against Philippine

Duplicators, Inc. for payment of the demand of its salesmen-members for 13th month
pay. The union averred that the salesmen received 13th month pay computed on the
basis of their fixed or guaranteed wage.

After submission of the parties' respective position papers, the Labor Arbiter
rendered a decision dated 24 October 1989 directing Philippine Duplicators, Inc. to pay
13th month pay to its salesmen

Philippine Duplicators, Inc. appealed to the National Labor Relations Commission

(NLRC). Petitioner maintained that the commissions earned by its salesmen fell outside
the scope of the term "basic salary" for purposes of computing the 13th month pay of
employees.
 On 17 November 1992, the NLRC affirmed the award of the Labor Arbiter,
declaring that it (the NLRC) was not vested with authority to pass upon the validity of
Explanatory Bulletin No. 86-12, which issuance by Secretary Augusto S. Sanchez
remain operative as a source of rights until declared invalid by the proper authorities,
i.e., the Supreme Court. Petitioner moved for reconsideration of the decision, without
success.

ISSUE:

Whether or not, Philippine Duplicator’s, Inc. is liable to give its employee a

separate 13th month pay on commissions independently of, aside from and in addition
to, 13th month pay on basic wage.

RULING:

YES.

As it indicated in Sec. 1 of Presidential Decree No. 851 is hereby modified to

the extent that all employers are hereby required to pay all their rank-and-file
employees a 13th month pay not later than December 24 of every year.

In connection with and in implementation of Memorandum Order No. 28,

Minister Augusto S. Sanchez of the then Ministry of Labor and Employment issued
MOLE Explanatory Bulletin No. 86-12 on 24 November 1986. Item No. 5 (a) of this
issuance read:

Employees who are paid a fixed or guaranteed

wage plus commission are also entitled to the mandated 13th
month pay, based on their total earning[s] during the calendar
year, i.e. on both their fixed and guaranteed wage and
commission. 

To recapitulate, the 13th month pay of employees paid a fixed or guaranteed

wage plus sales commission must be equivalent to one-twelfth (1/12) of the total
earnings (fixed or guaranteed wage-cum-sales commissions) during the calendar year.
Considering that petitioner has excluded from the computation of the 13th month pay
the sales commissions earned by its individual salesmen, we believe and so hold that
petitioner must be held liable to pay for the deficiency.

WHEREFORE, petitioner failed to show any grave abuse of discretion on the part
of the National Labor Relations Commission in rendering its decision dated 17
November 1992, the petition for Certiorari is hereby DISMISSED for lack of merit. Costs
against the petitioner.