Songco vs.

NLRC
commissions were in the form of incentives or encouragement, so that the petitioners would be
inspired to put a little more industry on the jobs particularly assigned to them, still these
commissions are direct remunerations for services rendered which contributed to the increase of
income of Zuellig.

Millares et. al v. NLRC,

The receipt of an allowance on a monthly basis does not ipso facto characterize it as regular
and forming part of salary because the nature of the grant is a factor worth considering. The
subject allowances were temporarily, not regularly, received by petitioners. Petitioners’
continuous enjoyment of the disputed allowances was based on contingencies the occurrence
of which wrote finis to such enjoyment.

Art 100
American Wire and Cable Daily Rated Employees Union v. American Wire and Cable Co.
Inc.,
1. The granting of a bonus is a management prerogative, something given in addition to
what is ordinarily received by or strictly due the recipient. Thus, a bonus is not a
demandable and enforceable obligation, except when it is made part of the wage, salary
or compensation of the employee.
2. For a bonus to be enforceable, it must have been promised by the employer and
expressly agreed upon by the parties, or it must have had a fixed amount and had been
a long ad regular practice on the part of the employer.
3. To be considered a “regular practice,” the giving of the bonus should have been done
over a long period of time, and must be shown to have been consistent and deliberate.
If paid only if profits are realized or productivity is achieved, not part of wage.

TSPIC Corp v. TSPIC Employees Union (FFW), February 13, 2008

Diminution of benefits is the unilateral withdrawal by the employer of benefits already enjoyed
by the employees. There is diminution of benefits when it is shown that
1. the grant or benefit is founded on a policy or has ripened into a practice over a long
period;
2. the practice is consistent and deliberate;
3. the practice is not due to error in the construction or application of a doubtful or difficult
question of law; and
4. the diminution or discontinuance is done unilaterally by the employer

Lepanto Ceramics Inc. v. Lepanto Ceramics Employees Association

Generally, a bonus is not a demandable and enforceable obligation. For a bonus to be
enforceable, it must have been promised by the employer and expressly agreed upon by the
parties. Given that the bonus in this case is integrated in the CBA, the same partakes the nature
of a demandable obligation. Verily, by virtue of its incorporation in the CBA, the Christmas bonus
due to respondent Association has become more than just an act of generosity on the part of
the petitioner but a contractual obligation it has undertaken.
Eastern Telecom Phils. v. Eastern Telecoms Employees Union,
Whether or not a bonus forms part of wages depends upon the circumstances and conditions
for its payment. If it is 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, then it is part of the wage, But if its paid only if profits are realized or if a
certain level of productivity is achieved, it cannot be considered part of wage. Where it is not
payable to all but only to some employees and only when their labor becomes more efficient or
more productive, it is only an inducement for efficiency, a prize therefore, not a part of wage.

A bonus may be granted on equitable consideration when the giving of such bonus has
been the company’s long and regular practice. The principle of non-diminution of benefits is
founded on the constitutional mandate to protect the rights of workers and to promote their
welfare and to afford labor full protection.

Art 106
Contracting/subcontracting

GSIS vs. NLRC (2010)

When GSIS contracted DNL Security’s services, it became an indirect employer of respondents,
pursuant to Article 107 of LC. After DNL Security failed to pay respondents the correct wages
and other monetary benefits, GSIS, as principal, became jointly and severally liable, as provided
in Articles 106 and 109 of LC. GSIS’ liability, however, cannot extend to the payment of
separation pay. An order to pay separation pay is invested with a punitive character, such that
an indirect employer should not be made liable without a finding that it had conspired in the
illegal dismissal of the employees.

Aliviado et. al. v. Proctor and Gamble Philippines

Consequently, its principal, P&G, is considered the employer of its employees. This is pursuant
to the ruling in Aklan v. San Miguel Corporation[27] where it was held that [a] finding that a
contractor is a labor-only contractor, as opposed to permissible job contracting, is equivalent to
declaring that there is an employer-employee relationship between the principal and the
employees of the supposed contractor, and the labor-only contractor is considered as a mere
agent of the principal, the real employer.

Mandaue Galleon Trade Inc. v. Andales

Elements of LOC
1. where the contractor or subcontractor supplying workers to an employer does not have
substantial capital or investment in the form of tools, equipment, machineries, work
premises, among other things; and the workers recruited and ced by the contractor or
subcontractor are performing activities which are directly related to the principal business
of such employer; or
2. where the contractor does not exercise the right to control the performance of the work
of the contractual employee
Where the employees are tasked to undertake activities usually desirable or necessary in the
usual business of the employer, the contractor is considered as a labor-only contractor and such
employees are considered as regular employees of the employer. There was no evidence
pertaining to the contractors' capitalization; nor to their investment in tools, equipment or
implements actually used in the performance or completion of the job, work, or service that they
were contracted to render. MGTI, the principal employer, is solidarily liable with the labor-only
contractors, for the rightful claims of the employees. Under this set-up, labor-only contractors
are deemed agents of the principal, MGTI, and the law makes the principal responsible to the
employees of the labor-only contractor as if the principal itself directly hired or employed the
employees.

Spic n’span Services Corporation v. Paje

Art 110
Bankruptcy
DBP v. NLRC, March 1, 1995
declaration of bankruptcy or a judicial liquidation must be present before the worker's preference
may be enforced. In the event of insolvency, a principal objective should be to effect an
equitable distribution of the insolvents property among his creditors. To accomplish this there
must first be some proceeding where notice to all of the insolvent's creditors may be given and
where the claims of preferred creditors may be bindingly adjudicated. A preference applies only
to claims which do not attach to specific properties. A lien creates a charge on a particular
property. The right of first preference as regards unpaid wages recognized by Article 110 does
not constitute a lien on the property of the insolvent debtor in favor of workers.

Art 111

Hoegh Fleet Services Phil. v. Turallo, July 26, 2017

10 percent only serves as the maximum of the award that may be granted. We have ruled in the
case of Taganas v. National Labor Relations Commission18 that Article 111 does not even
prevent the NLRC from fixing an amount lower than the ten percent ceiling prescribed by the
article when the circumstances warrant it. With that, the Court is not tied to award 10 percent
attorney's fees to the winning party, as what Turallo wishes to imply.

Art 113
Wage Deduction
SHS Perforated Materials Inc. v. Diaz, October 13, 2010
Management prerogative refers to the right of an employer to regulate all aspects of
employment, such as the freedom to prescribe work assignments, working methods, processes
to be followed,regulation regarding transfer of employees, supervision of their work, lay-off and
discipline, and dismissal and recall of work. Although management prerogative refers to the
right to regulate all aspects of employment, it cannot be understood to include the right to
temporarily withhold salary/wages without the consent of the employee. Any withholding of an
employee’s wages by an employer may only be allowed in the form of wage
deductions under the circumstances provided in Article 113 of the Labor Code. As correctly
pointed out by theLA, absent a showing that the withholding of complainants wages falls under
the exceptions provided in Article113, the withholding thereof is thus unlawful.

Art 124
Wage Distortion
Bankard Employees Union-Workers Alliance Trade Unions v. NLRC, February 17, 2004
Bankard, Inc. classifies its employees by levels, to wit: Level I to V. In 1993, its Board of
Directors approved a New Salary Scale for the purpose of making its hiring rate competitive in
the industry’s labor market. The New Salary Scale increased the hiring rates of new employees,
to wit: Levels I and V by P1,000, and Levels II, III and IV by P900. Accordingly, the salaries of
employees who fell below the new minimum rates were also adjusted to reach such rates under
their levels. Bankard’s move drew the Bankard Employees Union-WATU, the duly certified
exclusive bargaining agent of the regular rank and file employees of Bankard, to press for the
increase in the salary of its old, regular employees. Bankard took the position, however, that
there was no obligation on the part of the management to grant to all its employees the same
increase in an across-the-board manner. As the continued request remained unheeded, it filed a
Notice of Strike on the ground of discrimination and other acts of Unfair Labor Practice.

R.A. No. 6727 (WAGE RATIONALIZATION ACT, amending, among others, Article 124 of the
Labor Code) on June 9, 1989, the term wage distortion was explicitly defined as: ... a situation
where an increase in prescribed wage rates results in the elimination or severe contraction of
intentional quantitative differences in wage or salary rates between and among employee
groups in an establishment as to effectively obliterate the distinctions embodied in such wage
structure based on skills, length of service, or other logical bases of differentiation.
Involved in the classification of employees are various factors such as the degrees of
responsibility, the skills and knowledge required, the complexity of the job, or other logical basis
of differentiation. The differing wage rate for each of the existing classes of employees reflects
this classification. Petitioner maintains that for purposes of wage distortion, the classification is
not one based on levels or ranks but on two groups of employees, the newly hired and the old,
in each and every level, and not between and among the different levels or ranks in the salary
structure. The employees of Bankard have been historically classified into levels, i.e. I to V, and
not on the basis of their length of service. The Union cannot make a contrary classification of
Bankard’s employees without encroaching upon recognized management prerogative of
formulating a wage structure, in this case, one based on level. It is hus clear that there is no
hierarchy of positions between the newly hired and regular employees of Bankard, hence, the
first element of wage distortion is wanting. For purposes of determining the existence of wage
distortion, employees cannot create their own independent classification and use it as a basis to
demand an across-the-board increase in salary. Even assuming that there is a decrease in the
wage gap between the pay of the old employees and the newly hired employees, said gap is not
significant as to obliterate or result in severe contraction of the intentional quantitative
differences in the salary rates between the employee group. The classification under the wage
structure is based on the rank of an employee, not on seniority. For this reason, wage distortion
does not appear to exist.