258. Philippine Duplicators, Inc. v.

NLRC

Facts:

Private respondent union, for and on behalf of its

member-salesmen, asked petitioner corporation 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). (Emphasis supplied)

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.

Petitioner: Conflicting decisions. Boie-Takeda case

abandoned the first case.

Issue: WON sales commission is included in the

coverage of basic salary for purposes of computing
13th month pay.

Held: YES. There’s no conflict.

1. It constitutes a part of the compensation or

remuneration (basic salary) paid to salesmen
Duplicator’s case   Sales commission 
intimately related to or directly proportional to the
extent or energy of an employee's endeavors.

2. In another case, it is considered as a bonus and

thereafter not part of the basic salary Boie-Takeda
 Productivity Bonus   extra for which no specific
additional services are rendered by any particular
employee and hence not legally demandable

But whether or not [a] bonus forms part of wages

depends upon the circumstances or conditions for its
payment.
-If it is an additional compensation which the
employer promised and agreed to give without any
conditions imposed for its payment, such as success
of business or greater production or output: Part of
the wage. 
-But if it is paid only if profits are realized or a
certain amount of productivity achieved: Cannot be
considered part of wages. 

JURISDICTION (Cont…)
REGIONAL DIRECTOR
203. MATERNITY CHILDREN’S HOSPITAL v.
SECRETARY OF LABOR
Facts:
Petitioner is a semi-government hospital...
ten (10) employees of the petitioner
employed in different capacities/positions
filed a complaint with the Office of the
Regional Director of Labor and
Employment, Region X, for underpayment
of their salaries and ECOLAs... the Labor
Standard and Welfare Officers submitted
their report confirming that there was
underpayment of wages and ECOLAs of
all the employees by the petitioner
Based on this inspection report and
recommendation, the Regional Director
issued an Order dated August 4, 1986,
directing the payment of P723,888.58,
representing underpayment of wages and
ECOLAs to all the petitioner's employees
Petitioner appealed from this Order to the
Minister of Labor and Employment, Hon.
Augusto S. Sanchez, who rendered a
Decision on September 24, 1986,
modifying the said Order in that deficiency
wages and ECOLAs should be computed
only from May 23, 1983 to May 23, 1986
The instant petition questions the all-
embracing applicability of the award
involving salary differentials and ECOLAs,
in that it covers not only the hospital
employees who signed the complaints,
but also those (a) who are not signatories
to the complaint, and (b) those who...
were no longer in the service of the
hospital at the time the complaints were
filed.
Issue: Whether or not the Regional
Director had jurisdiction over the case and
if so, the extent of coverage of any award
that should be forthcoming, arising from
his visitorial and enforcement powers
under Article 128 of the Labor Code...
whether or not the decision states clearly
and distinctly statement of facts as well as
the law upon which it is based
Ruling: This is a labor standards case,
and is governed by Art. 128-b of the Labor
Code
Under the present rules, a Regional
Director exercises both visitorial and
enforcement power over labor standards
cases, and is therefore empowered to
adjudicate money claims, provided there
still exists an employer-employee
relationship, and the findings of the
regional office is... not contested by the
employer concerned.
In the present case, petitioner admitted
the charge of underpayment of wages to
workers still in its employ; in fact, it
pleaded for time to raise funds to satisfy
its obligation. There was thus no contest
against the findings of the labor
inspectors.
Viewed in the light of PD 850 and read in
coordination with MOLE Policy
Instructions Nos. 6, 7 and 37, it is clear
that it has always been the intention of our
labor authorities to provide our workers
immediate access (when still feasible, as
where an employer-employee...
relationship still exists) to their rights and
benefits, without being inconvenienced by
arbitration/litigation processes that prove
to be not only nerve-wracking, but
financially burdensome in the long run.
The justification for the award to this
group of employees who were not
signatories to the complaint is that the
visitorial and enforcement powers given to
the Secretary of Labor is relevant to, and
exercisable over establishments, not over
the individual members/employees,...
because what is sought to be achieved by
its exercise is the observance of, and/or
compliance by, such firm/establishment
with the labor standards regulations.
Necessarily, in case of an award resulting
from a violation of labor legislation by
such establishment, the entire...
members/employees should benefit
therefrom.
"x x x Under the present
rules, a Regional Director
exercises both visitorial and
enforcement power over
labor standards cases, and is
therefore empowered to
adjudicate money claims,
provided there still exists an
employer-employee
relationship, and the findings
of the regional office is not
contested by the employer
concerned.
2. ODIN SECURITY AGENCY v. DELA
SERNA
Facts: On July 8, 1986, a
complaint was filed by Sergio
Apilado and fifty-five (55) others
charging the petitioner Odin
Security Agency (hereafter "OSA"),
with underpayment of wages,
illegal deductions, non-payment of
night shift differential, overtime
pay, premium pay for holiday
work, rest days and Sundays,
service incentive leaves, vacation
and sick leaves, and 13th-month
pay. When conciliation efforts
failed, the parties were required to
submit their position papers.
Private respondents alleged in
their position paper that their
latest monthly salary was P1,600;
that from this amount, petitioner
deducted P100 as administrative
cost and P20 as bond; that they
were not paid their premium pay
and overtime pay for working on
the eleven (11) legal holidays per
year; and, that since private
respondents were relieved or
constructively dismissed, they
must also be paid backwages.
Petitioner, on the other hand,
contended that on July 21, 1986,
some 48 security guards
threatened mass action against it.
Alarmed by a possible
abandonment of posts by the
guards and mindful of its
contractual obligations to its
clients/principals, petitioner
relieved and re-assigned the
complaining guards to other posts
in Metro Manila.
Petitioner claimed it complied
with the Labor Code provisions,
and in support thereof, it
submitted the "Quitclaim and
Waiver" of thirty-four (34)
complainants
Earlier, on October 21, 1986,
seventeen (17) complainants
repudiated their quitclaim and
waiver. They alleged that
management pressured them to
sign documents which they were
not allowed to read and that if
such waiver existed, they did not
have any intention of waiving their
rights under the law.
Petitioner in its reply argued that
complainants were estopped from
denying their quitclaims on the
ground of equity; that being high
school graduates, complainants
fully understood the document
they signed; and that
complainants' allegation of
coercion or threat was a mere
afterthought.
Issue: W/N regional director has
jurisdiction
Held: Yes. The petitioner is
estopped from questioning the
alleged lack of jurisdiction of the
Regional Director over the private
respondents' claims. Petitioner
submitted to the jurisdiction of the
Regional Director by taking part in
the hearings before him and by
submitting a position paper. When
the Regional Director issued his
March 20, 1987 order requiring
petitioner to pay the private
respondents the benefits they were
claiming, petitioner was silent.
Only the private respondents filed
a motion for reconsideration. It
was only after the Undersecretary
modified the order of the Regional
Director on March 23, 1988 that
the petitioner moved for
reconsideration and questioned
the jurisdiction of the public
respondents to hear and decide
the case. The principle of
jurisdiction by estoppel bars it
from doing this. 
The jurisdiction of public
respondents over the complaints is
clear from a reading of Article
128(b) of the Labor Code, as
amended by Executive Order No.
111, thus:  employees' service incentive leave,
"(b) The provisions of Article 217
of this Code to the contrary
notwithstanding and in cases
where the relationship of
employer-employee still exists, the
Minister of Labor and
Employment or his duly
authorized representatives shall
have the power to order and
administer, after due notice and
hearing, compliance with the labor
standards provisions of this Code
and other labor legislation based
on the findings of labor regulation
officers or industrial safety
engineers made in the course of
inspection, and to 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 regulation officer and
raises issues which cannot be
resolved without considering
evidentiary matters that are not
verifiable in the normal course of
inspection."
205. SSK Parts Corporation v. CAMAS
This is a petition for review
on certiorari of the decision dated
November 16, 1988 of the
Department of Labor and
Employment, affirming the Order
of the Regional Director dated
January 11, 1988 in three
consolidated cases filed against
the petitioner: (1) by Teodorico
Camas for illegal deductions; (2)
for underpayment of wages, non-
payment of legal holiday pay and
service incentive leave filed by the
union in behalf of its members;
and (3) for non-payment of
underpayment of allowance,
overtime pay, premium pay, and
non-payment of two (2) regular
holidays in December which were
discovered upon routine
inspection conducted by the labor
regulation officers.
Petitioner's appeal to the Secretary
of Labor was dismissed by the
latter. Hence, this petition
for certiorari in which the
petitioner alleges:  for wages and other monetary
1. that the Regional Director has
no jurisdiction over its employees'
claims; and  Labor Code as follows:
2. that it (petitioner) was denied
due process.
HELD: The petition is devoid of
merit. The jurisdiction of the
Regional Director over claims for
violation of labor standards is
conferred by Article 128-B of the
Labor Code, as amended by
Executive Order No. 111 of March
26, 1987 which provides that:  involving the recovery of wages
"(b) The provisions of Article 217
of this Code to the contrary
notwithstanding and in cases
where the relationship of
employer-employee still exists,
the Minister of Labor and
Employment or his duly
authorized representatives shall
have the power to order and
administer, after due notice and
hearing, compliance with the
labor standards provisions of this
Code and other labor legislation  do not exceed five thousand pesos
based on the findings of labor
regulation officers or industrial
safety engineers made in the
course of inspection, and to 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 regulation officer and
raises issues which cannot be
resolved without considering
evidentiary matters that are not
verifiable in the normal course of
inspections." (Underscoring
supplied.)
The jurisdiction of the Regional
Director over employees' claims
benefits not exceeding P5,000 has
been affirmed by Republic Act No.
6715, amending Article 129 of the
 
"Art. 129. Recovery of wages,
simple money claims and other
benefits. Upon complaint of any
interested party, the Regional
Director of the Department of
Labor and Employment or any of
the duly authorized hearing
officers of the Department is
empowered, through summary
proceeding and after due notice, to
hear and decide any matter
and other monetary claims and
benefits, including legal interest,
owing to an employee or person
employed in domestic or
household service or househelper
under this Code, arising from
employer-employee relations:
Provided, that such complaint
does not include a claim for
reinstatement: Provided, further,
That the aggregate money claims
of each employee or househelper
(P5,000.00). The Regional
Director or hearing officer shall
decide or resolve the complaint
within thirty (30) calendar days
from the date of the filing of the
same."
Being a curative statute, Republic
Act No. 6715 may be given
retroactive effect if, as in this case,
no vested rights would be
impaired (DBP vs. Court of
Appeals, 96 SCRA 342; Santos vs.
Duata, 14 SCRA 1041; Briad-Agro
Dev. Corp. vs. De la Serna, et al.,
G.R. No. 82805, Nov. 9, 1989).
Under the exception clause in
Article 128(b) of the Labor Code,
the Regional Director may not be
divested of his jurisdiction over
these claims, unless three (3)
elements concur, namely: (a) that
the petitioner (employer) contests
the findings of the labor regulation
officer and raises issues thereon;
(b) that in order to resolve such
issues, there is a need to examine
evidentiary matters; and (c) that
such matters are not verifiable in
the normal course of inspection.
In this case, although the
petitioner contested the Regional
Director's finding of violations of
labor standards committed by the
petitioner, that issue was resolved
by an examination of evidentiary
matters which were verifiable in
the ordinary course of inspection.
Hence, there was no need to
indorse the case to the appropriate
arbitration branch of the National
Labor Relations Commission
(NLRC) for adjudication (Sec. 2,
Rules Implementing Executive
Order 111).
206. GUICO v. QUISUMBING
FACTS: The case started when the
Office of the Regional Director
received a letter-complaint requsting
for an investigation of petitioner's
establishment for violation of labor
standards law.
Pursuant to the visitorial and
enforcement power of the SOLE,
inspections were conudcted.
It yield the violation of undepayment
of wages, 13th month pay and no
servie incentive leave.
ISSUE: W/N RD has jurisdiction
HELD: YES. Citing art. 128b of the
Labor Code
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
amending Article 128(b) of the Labor
Code,
Art. 128 (b) — Notwithstanding 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 a reputable 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.)
SECRETARY OF LABOR
207. TELEFUNKEN SEMINOCONDUCTORS v.
FFW v. CA
FACTS:
The labor dispute started when the Com
pany and the Union reached a deadlock i
n their negotiations for a new collective 
bargaining agreement. The Union filed a  work order, even if the directive to retur
Notice of Strike with the NCMB. The Act
ing DOLE-Sec intervened and assumed j
urisdiction over the dispute and thus enj
oined any strike or lockout, whether act
ual or intended, between the parties.
Despite the assumption Order, the Unio
n struck. And also on despite the Notice 
of the Return-to-Work Order, still some 
of the striking workers refused to heed t
he order and continued with their picket
. The Company then issued letters of ter
mination for cause to the workers who d
id not report back to work despite the N
otice of Assumption and Return-to-
Work Orders issued by the Acting DOLE
-Sec. However, the Acting DOLE-Sec iss
ued another Order directing the Compa
ny to reinstate all striking workers “exce
pt the Union Officers, shop stewards, an
d those with pending criminal charges, x 
x x” while the resolution of the legality of 
the strike was pending. The strike was la
ter declared illegal by the Sec.
ISSUE:
Whether or not defiance to the assumpti
on and return-to-work orders of the Secr
etary of Labor after assumption of jurisd
iction is a valid ground to terminate the 
employment of striking members.
RULING:
Yes. It is clear from Art. 263(g) that the 
moment the Secretary of Labor assumes 
jurisdiction over a labor dispute in an in
dustry indispensable to national interest
, such assumption shall have the effect o
f automatically enjoining the intended o
r impending strike. It was not even nece
ssary for the Secretary of Labor to issue 
another order directing them to return t
o work. The mere issuance of an assump
tion order by the Secretary of Labor auto
matically carries with it a return-to-
n to work is not expressly stated in the a
ssumption order. However, petitioners r
efused to acknowledge this directive of t
he Secretary of Labor thereby necessitati
ng the issuance of another order express
ly directing the striking workers to cease 
and desist from their actual strike, and t
o immediately return to work but which 
directive the herein petitioners opted to  ISSUE: whether or not the public
ignore. respondent acted with grave abuse
of discretion amounting to lack or
In this connection, Article 264 provides  excess of jurisdiction in assuming
prohibited activities. One of which is tha jurisdiction over subject labor
t “No strike or lock out shall be declared  dispute.
after the assumption of jurisdiction by t
he President or the Secretary or after cer
tification or submission of the dispute to  HELD: YES, the petition is
compulsory or voluntary arbitration”.  T impressed with merit.
he rationale of this prohibition is that on
ce jurisdiction over the labor dispute has 
been properly acquired by the competen
Art. 263, paragraph (g) of the Labor
t authority, that jurisdiction should not  Code, provides:
be interfered with by the application of t
he coercive processes of a strike. We hav (g) When, in his opinion, there exist
e held in a number of cases that defiance  a labor dispute causing or likely to
to the assumption and return-to-work or
ders of the Secretary of Labor after he ha
cause a strike or lockout in an
s assumed jurisdiction is a valid ground  industry indispensable to the
for loss of the employment status of any  national interest, the Secretary of
striking union officer or member Labor and Employment may
assume jurisdiction over the dispute
208. PHIMCO INDUSTRIES, INC. v. and decide it or certify the same to
BRILLANTES the Commission for compulsory
arbitration . . .
FACTS: On March 9, 1995, the
private respondent, Phimco
The Labor Code vests in the
Industries Labor Association
Secretary of Labor the discretion to
(PILA), duly certified collective
determine what industries are
bargaining representative of the
indispensable to the national
daily paid workers of the petitioner
interest. Accordingly, upon the
PHIMCO filed a notice of strike
determination by the Secretary of
with the NCMB against PHIMCO, a
Labor that such industry is
corporation engaged in the
indispensable to the national
production of matches, after a
interest, he will assume jurisdiction
deadlock in the collective
over the labor dispute in the said
bargaining and negotiation. Parties
industry. 8 This power, however, is
failed to resolve their differences
not without any limitation.
PILA (during the conciliation
It stressed in the case of Free
conferences), composed of
telephone Workers Union
352 members, staged a strike.
vs. Honorable Minister of Labor
and Employment, et al., 10 the
PHIMCO sent notice of termination limitation set by the legislature on
to some 47  workers including the power of the Secretary of Labor
several union officers. to assume jurisdiction over a labor
dispute, thus:
Secretary Brillantes assumed xxx cannot be any clearer, the
jurisdiction over the labor dispute; coverage being limited to “strikes or
issued a return-to-work order. lockouts adversely affecting the
national interest. 11
Hence, petitioner files this petition. In this case at bar, however, the
very admission by the public
respondent draws the labor dispute
in question out of the ambit of the
Secretary’s prerogative, to wit.
While the case at bar appears on its
face not to fall within the strict
categorization of cases imbued with
“national interest”, this office
believes that the obtaining
circumstances warrant the exercise
of the powers under Article 263 (g)
of the Labor Code, as amended. 12
The private respondent did not
even make any effort to touch
on the indispensability of the
match factory to the national
interest. It must have been
aware that a match factory,
though of value, can scarcely
be considered as an industry
“indispensable to the national
interest” as it cannot be in the
same category as “generation and
distribution of energy, or those
undertaken by banks, hospitals, and
export-oriented industries.” 13 Yet,
the public respondent assumed
jurisdiction thereover.
To uphold the action of the public
respondent under the premises
would be stretching too far the
power of the Secretary of Labor as
every case of a strike or lockout
where there are inconveniences in
the community, or work disruptions
in an industry though not
indispensable to the national
interest, would then come within
the Secretary’s power. It would be
practically allowing the
Secretary of Labor to
intervene in any Labor dispute
at his pleasure.
This is precisely why the law sets
and defines the standard: even in
the exercise of his power of
compulsory arbitration under
Article 263 (g) of the Labor Code,
the Secretary must follow the law.
209. NATIONAL FEDERATION OF LABOR v.
LAGUESMA
In the original rendering of the Labor Code, Art.
222 thereof provided that the decisions of the
NLRC are appealable to the Secretary of Labor on
specified grounds. 6 The decisions of the
Secretary of Labor may be appealed to the
President of the Philippines subject to such
conditions or limitations as the President may
direct.
Thus under the state of the law then, this Court
had ruled that original actions for certiorari and
prohibition filed with this Court against the
decision of the Secretary of Labor passing upon
the decision of the NLRC were unavailing for mere
error of judgment as there was a plain, speedy
and adequate remedy in the ordinary course of
law, which was an appeal to the President. We
said in the 1975 case, Scott v. Inciong, 7 quoting
Nation Multi Service Labor Union v. Agcaoili: 8 "It
is also a matter of significance that there was an
appeal to the President. So it is explicitly provided
by the Decree. That was a remedy both adequate
and appropriate. It was in line with the executive
determination, after the proclamation of martial
law, to leave the solution of labor disputes as
much as possible to administrative agencies and
correspondingly to limit judicial participation."
9chanroblesvirtuallawlibrary:red
Significantly, we also asserted in Scott v. Inciong
that while appeal did not lie, the corrective power
of this Court by a writ of certiorari was available
whenever a jurisdictional issue was raised or one
of grave abuse of discretion amounting to a lack
or excess thereof, citing San Miguel Corporation
v. Secretary of Labor. 10
P.D. No. 1367 11 amending certain provisions of
the Labor Code eliminated appeals to the
President, but gave the President the power to
assume jurisdiction over any cases which he
considered national interest cases. The
subsequent P.D. No. 1391, 12 enacted "to insure
speedy labor justice and further stabilize
industrial peace", further eliminated appeals from
the NLRC to the Secretary of Labor but the
President still continued to exercise his power to
assume jurisdiction over any cases which he
considered national interest cases. 13
Though appeals from the NLRC to the Secretary
of Labor were eliminated, presently there are
several instances in the Labor Code and its
implementing and related rules where an appeal
can be filed with the Office of the Secretary of
Labor or the Secretary of Labor issues a ruling, to
wit:
chanrob1es virtual 1aw library