CH 6 Digest - Wages

7/25/2019 CH 6 Digest - Wages

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Iran v. NLRC, 289 SCRA 433, April 22, 1998

Q. Drivers/salesmen and truck helpers of a softdrinks merchandiser filed acase for illegal dismissal, underpayment of wages, and other claims. TheLabor Arbiter decided, among others, that the employer had not complied

with the minimum wage requirements. In arriving at this conclusion, theLabor Arbiter refused to include the commissions paid to the workers indetermining compliance with the minimum wage requirement. As part of

their compensation, the workers received commissions per case of softdrinkssold. Is the Labor Arbiter’s ruling correct?

A. No, the ruling is erroneous. The definition of the term “wage” in the LaborCode explicitly includes commissions. While commissions are incentives orforms of encouragement to inspire workers to put a little more industry on

their jobs, still these commissions are direct remunerations for servicesrendered. There is no law mandating that commissions be paid only afterthe minimum wage has been paid to the worker. The establishment of a

minimum wage only sets a floor below which an employee’s remunerationcannot fall, not that commissions are excluded from wages in determiningcompliance with the minimum wage law.



Davao Fruits Corporation vs Associated Labor Unions, G.R. No. 85073, August 24, 1993; 225 SCRA 562

(Labor Standards – Fringe benefits not included in 13th month pay) Facts: Respondent ALU for and in behalf of all the rank-and-file workers andemployees of petitioner sought to recover from the latter the 13th month pay

differential for 1982 of said employees, equivalent to their sick, vacation andmaternity 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 the13th 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 doneon rest days and special holidays, and pay for regular holidays may beexcluded in the computation and payment thereof.

Held: Yes. Basic salary does not merely exclude the benefits expresslymentioned but all payments which may be in the form of fringe benefits orallowances.

Sec. 4 of the Supplementary Rules and Regulations Implementing PD No.851 provides that “overtime pay, earnings and other remunerations which arenot 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 orthe daily wage rate is the basic salary. Any compensation or remuneration

other than the daily wage rate is excluded. It follows therefore, that paymentsfor sick, vacation and maternity leaves, premiums for work done on rest daysand special holidays, as well as pay for regular holidays, are likewise

excluded in computing the basic salary for the purpose of determining the13th month pay.



SLL INTERNATIONAL CABLES SPECIALIST and LAGON VS NLRC,LOPEZ, ZUÑIGA and CAÑETE (2011) – FACILITIES and SUPPLEMENTS

FACTS:Private Respondents were hired by Lagon as apprentice or trainee

cable/lineman and were paid the full minimum wage and other benefits; theydid not report to work regularly, since they are trainees, but came insubstitutes for other regular workers. After their training, they were engaged

as Project Employees in different parts of the Country (Bohol, Anitpolo,Bulacan and Caloocan) upon which they have to re-apply after everycompletion. Faced with economic problems, Lagon was constrained to cut

down the overtime work of its workers. Thus, when private respondentsrequested to work overtime, Lagon refused. Private respondents went hometo Cebu and filed a complaint for illegal dismissal, non-payment of wages,

holiday pay, 13th month pay and service incentive leave pay as well asdamages and attorney’s fees. Petitioners admitted private respondents’ employment but claimed that the

latter were only project employees for their services were merely engaged fora specific project or undertaking and the same were covered by contractsduly signed by private respondents. And since the workplaces of private

respondents were all in Manila, the complaint should be filed there. Thus,petitioners prayed for the dismissal of the complaint for lack of jurisdictionand utter lack of merit.

The LA claimed that his office had jurisdiction under RULE 4 SEC 1 of theNLRC RULES because the "workplace," as defined in the said rule, includedthe place where the employee was supposed to report back after a

temporary detail, assignment or travel, which in this case was Cebu. As tothe status of their employment, the LA opined that private respondents wereregular employees because they were repeatedly hired by petitioners and

they performed activities which were usual, necessary and desirable in thebusiness or trade of the employer.LA found that private respondents were underpaid. It ruled that the free

board and lodging, electricity, water, and food enjoyed by them could not beincluded in the computation of their wages because these were given withouttheir written consent. However, petitioners were not liable for illegal

dismissal. The LA viewed private respondents’ act of going home as an actof indifference when petitioners decided to prohibit overtime work.The NLRC affirmed the LA’s decision. It noted that no single report of project

completion was filed with the PUBLIC EMPLOYMENT office as required byDOLE. The CA affirmed both the LA’s and NLRC’s decisions and consideredthat petitioners failure to comply with the simple but compulsory requirement

to submit a report of termination to the nearest Public Employment Officeevery time private respondents’ employment was terminated was proof thatthe latter were not project employees but regular employees.

ISSUE: WON private respondents are entitled to be paid the minimum wage.YES

HELD: As a general rule, on payment of wages, a party who allegespayment as a defense has the burden of proving it. Specifically with respect

to labor cases, the burden of proving payment of monetary claims rests onthe employer, the rationale being that the pertinent personnel files, payrolls,records, remittances and other similar documents are not in the possession

of the worker but in the custody and absolute control of the employer.In this case, petitioners, aside from bare allegations that private respondentsreceived wages higher than the prescribed minimum, failed to present any

evidence, such as payroll or payslips, to support their defense of payment.Thus, petitioners utterly failed to discharge the onus probandi.Private respondents, are entitled to be paid the minimum wage, whether they

are regular or non-regular employees.On whether the value of the facilities should be included in the computationof the "wages" received by private respondents, Section 1 of DOLE

Memorandum Circular No. 2 provides that an employer may providesubsidized meals and snacks to his employees provided that the subsidyshall not be less that 30% of the fair and reasonable value of such facilities.

In such cases, the employer may deduct from the wages of the employeesnot more than 70% of the value of the meals and snacks enjoyed by thelatter, provided that such deduction is with the written authorization of the

employees concerned.Moreover, before the value of facilities can be deducted from the employees’wages, the following requisites must all be attendant: first, proof must be

shown that such facilities are customarily furnished by the trade; second, theprovision of deductible facilities must be voluntarily accepted in writing by theemployee; and finally, facilities must be charged at reasonable value. Mere

availment is not sufficient to allow deductions from employees’ wages. These requirements, however, have not been met in this case. SLL failed topresent any company policy or guideline showing that provisions for meals

and lodging were part of the employee’s salaries. It also failed to provideproof of the employees’ written authorization, much less show how theyarrived at their valuations. At any rate, it is not even clear whether private

respondents actually enjoyed said facilities.Facilities VS Supplements

"Supplements," therefore, constitute extra remuneration or special privileges

or benefits given to or received by the laborers over and above their ordinaryearnings or wages . "Facilities," on the other hand, are items of expensenecessary for the laborers and his family's existence and subsistence so that

by express provision of law, they form part of the wage and when furnishedby the employer are deductible therefrom, since if they are not so furnished,the laborer would spend and pay for them just the same.

In short, the benefit or privilege given to the employee which constitutes anextra remuneration above and over his basic or ordinary earning or wage is



supplement; and when said benefit or privilege is part of the laborers' basicwages, it is a facility. The distinction lies not so much in the kind of benefit or

item (food, lodging, bonus or sick leave) given, but in the purpose for which itis given. In the case at bench, the items provided were given freely by SLLfor the purpose of maintaining the efficiency and health of its workers while

they were working at their respective projects.



Employees Confederation of the Philippines (ECOP) vs. NWPC201 SCRA 759 (1991)

Facts: Petitioners ECOP questioned the validity of the wage order issued bythe RTWPB dated October 23, 1990 pursuant to the authority granted by RA

6727. The wage order increased the minimum wage by P17.00 daily in theNational Capital Region.

The wage order is applied to all workers and employees in the private sectorof an increase of P 17.00 including those who are paid above the statutorywage rate. ECOP appealed with the NWPC but dismissed the petition.

The Solicitor General in its comment posits that the Board upon the issuanceof the wage order fixed minimum wages according to the salary method.

Petitioners insist that the power of RTWPB was delegated, through RA 6727,to grant minimum wage adjustments and in the absence of authority, it canonly adjust floor wages.

Issue: Whether or not the wage order issues by RTWPB dated October 23,1990 is valid.

Ruling: The Court agrees with the Solicitor General. It noted that there aretwo ways in the determination of wage, these are floor wage method and

salary ceiling method. The floor wage method involves the fixing ofdeterminate amount that would be added to the prevailing statutory minimumwage while the salary ceiling method involves where the wage adjustment is

applied to employees receiving a certain denominated salary ceiling.

RA 6727 gave statutory standards for fixing the minimum wage.

ART. 124. Standards/Criteria for Minimum Wage Fixing — The regionalminimum wages to be established by the Regional Board shall be as nearly

adequate as is economically feasible to maintain the minimum standards ofliving necessary for the health, efficiency and general well-being of theemployees within the framework of the national economic and social

development program. In the determination of such regional minimumwages, the Regional Board shall, among other relevant factors, consider thefollowing:

(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 ofeconomic and social development."

The wage order was not acted in excess of board’s authority. The law gavereasonable limitat ions to the delegated power of the board.



Metrobank v. National W ages and Productivity Commission (2007) (Across the board) Doctrine:

Facts:On October 17, 1995, the Regional Tripartite Wages and Productivity Board,Region II, Tuguegarao, Cagayan (Board), by virtue of the Wage

Rationalization Act, issued Wage Order R02-03. WO R02-03 grants anacross-the-board increase of Php15.00 to all employees and workers in theprivate sector throughout Region II under Section 1 thereof. The Wage Order

took effect on January 1, 1996, while its Implementing Rules were approvedon February 14 of the same year. Under Section 13 of the Wage Order, anyparty aggrieved by it may file an appeal before the National Wages and

Productivity Commission (NWPC), through the Board, within 10 calendardays from publication of the Wage Order. Two letter inquiries were sent tothe NWPC. The first letter was sent by the Bankers ’ Council for Personnel

Management, seeking an exemption from the coverage of the Wage Orderon behalf of its member banks with head offices outside of Region II. Thisrequest was grounded on the fact that such member banks were already

paying more than the prevailing minimum wage rate in NCR, which is theirprincipal place of business. The second letter was sent by petitionerMetrobank, asking for an interpretation of the applicability of the Wage Order.

The NWPC replied to both letters. Both replies basically expressed that theWage Order covers all establishments situated in Region II, regardless oftheir voluntary adoption of wage orders applicable in Metro Manila and

irrespective of the amounts they are already paying their employees. Thisprompted Metrobank to file a petition for certiorari and prohibition with theCA. Metrobank claims that the Board, in issuing the Wage Order, acted

beyond its authority. Thus, petitioner prays for the nullification of the Order asits implementation would cause financial losses and labor unrest. The OSGfiled a manifestation siding with Metrobank. Despite this, the CA denied the

petition because of three primary reasons. First, the writ of prohibition couldno longer be issued since the Wage Order and its IRR have already becomefait accompli (accomplished fact) because both have already taken effect.

Second, the writ of certiorari is an improper remedy since such may onlyissue in relation to the exercise judicial and quasi-judicial functions, notadministrative functions. Third, Metrobank did not utilize the right to appeal

provided under Sec . 13 of the Wage Order.Issues:1. W/N the Section 1 of the Wage Order is valid

2. W/N Metrobank’s recourse to a petition for certiorari and prohibition wasproperHeld/Ratio:

1. Partly yes. In furtherance of the State’s policy to rationalize the fixing ofminimum wages, the Wage Rationalization Act created the NWPC andvested it with the power to prescribe guidelines for the determination of

appropriate minimum wages and authorized the Regional Boards to fix the

minimum wage rates in their respective regions, provinces or industries. In

ECOP v. NWPC, the Court declared that there are two ways of fixing theminimum wage - the floor wage method and the salary ceiling method. Under

the floor wage method, a fixed amount is added to the prevailing statutoryminimum wage rates. (i.e. Add Php 15.00 to the current minimum wagerates. If the employee is earning more than minimum wage, no need to add)

On the other hand, in the salary ceiling method, a salary ceiling would be set,in such a way that only those below the ceiling would be entitled to anincrease that would allow their current wages to reach the ceiling. (i.e. If

ceiling is Php 250.00, those earning 200 will get a Php 50.00 increase, thoseearning Php 250.00 will not get an increase at all) Wage orders may notgrant benefits not provided by the Wage Rationalization Act.

In the present case, the board did not fix the minimum wage using any of thetwo methods. Instead, it granted an across the board wage increase of Php15.00 to all employees and workers of Region 2, whether earning minimum

wage or not. In doing so, the Board exceeded its authority. The Wage Ordereffectively granted additional benefits not contemplated by the WageRationalization Act. It has been said that when the application of an

administrative issuance modifies existing laws or exceeds the intendedscope, as in this case, the issuance becomes void, not only for being ultravires, but also for being unreasonable. Thus, the Court finds that Sec. 1,

Wage Order No. R02-03 is void insofar as it grants a wage increase toemployees earning more than the minimum wage rate; and pursuant to theseparability clause of the Wage Order, Sec. 1 is declared valid with respect

to employees earning the prevailing minimum wage rate. Be that as it may,the Court no longer ordered the employees who wrongly received theincrease mandated by the Wage Order to refund the amounts received by

them since they received the increase in good faith, in the honest belief thatthey were entitled to it.2. No. A petition for certiorari and prohibition was not the proper remedy. The

issuance of the Wage Order was done in pursuance of the Board’s quasi -legislative or rulemaking power as delegated by the Wage Rationalization

Act. Thus, it is not the proper subject of a petition certiorari or prohibition

because both special civil actions may only be resorted to if the disputed actsare performed in the exercise of judicial or quasi-judicial power. In addition,Metrobank should have availed of the remedy provided by Sec. 13 of the

Wage Order. To make matters worse, Metrobank failed to invoke the powerof the NWPC to review the wage levels set by the Board. Instead, it went tothe CA right away, wrongly impleading NWPC. Metrobank failed to exhaust

the administrative remedies available to it. *Also noteworthy is the fact thatthe Court dismissed the respondents’ claim that the issues raised havebecome moot as the Order and its IRR have already taken effect. The SC

noted that such implementation does not in any way render the case moot,since the issue of the validity of the Order subsists even afterimplementation.



Nasipit Lumber Company, Inc. v. NWPC, 289 SCRA 667, April 27, 1998)

Q. The Regional Wage Board for Region X issued Wage Order No. RX-01.Three corporations filed applications for exemption as “distressedestablishments” under Guidelines No. 3 issued by the Regional Wage

Board. Under the Regional Wage Board’s guideline, a corporation is a“distressed establishment” if it is engaged in an industry that is “distresseddue to conditions beyond its control.” This criterion is different from the

criterion laid down in the guidelines promulgated by the National Wages andProductivity Commission. Should the applications be granted pursuant tothe Regional Wage Board’s guidelines?

A. No, the applications should be denied. The law grants the NWPC, not theRegional Wage Board, the power to “prescribe the rules and guidelines” for

the determination of minimum wage and productivity measures. While theRegional Wage Board has the power to issue wage orders, such wageorders are subject to the guidelines prescribed by the NWPC. Since the

Regional Wage Board’s Guideline No. 3 was not approved by the NWPC andis contrary to NWPC’s guidelines, the said guideline issued by the RegionalWage Board is inoperative and cannot be used by the latter in deciding on

the applications for exemption.



Prubankers Association v. Prudentia l Bank & Trust Co. (1999)Ponente: Panganiban, J.

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 hadrendered service for at least 3 months before its effectivity, and for thesame 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 ofRegion VII issued Wage Order No. RB VII-03, which directed theintegration 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 anincrease in the minimum wage rates for all workers and employeesin 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 cit iesof Davao, Toledo, Dumaguete, Bais, Canlaon and Tagbilaran.

2. Pursuant to the said wage orders, RESP granted a COLA of P17.50 toits employees at its Naga branch and integrated the P150.00 per monthCOLA into the basic pay of its rank-and-file employees at its Cebu,

Mabolo and P. del Rosario branches.3. On June 7 1994, PET wrote to RESP request ing that a Labor

Management Committee be convened to discuss and resolve the wage

distortions that resulted from the implementation of the wage orders.PET also demanded that PET extend the application of the wage ordersto its employees outside Region V & Region VII, claiming that the

regional implementation of the said orders resulted in a wage distortion.

4. As the matter could not be settled by both parties, both agreed to submitthe matter to voluntary arbitration.

VA: Ruled that the regional implementation of the wage orders by PETresulted 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 justi fiedby 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.

PET’s contentions: RESP’s regional implementation: 1. A wage distortion exists, because the implementation of the two

Wage Orders has resulted in the discrepancy in thecompensation of employees of similar pay classification indifferent regions.

2. Implementation violated the principle of equal work, equal pay;3. RESP-Bank when it adopted a uniform wage policy has

sufficiently established a management practice thus, it is

estopped from implementing a wage order for a specific regiononly.

Issue/s:1. WON PET is guilty of forum shopping?2. WON a wage distortion resulted from RESP’s implementation of the

aforecited Wage Orders?

Held + Rationale:

1. YES. PET failed to comply with Section 2 of Rule 42 of the Rulesof Court, which requires that parties must certify under oath that theyhave not commenced any other action involving the same issues in the

Supreme Court, the Court of Appeals, or different divisions thereof,or any other tribunal or agency. .. as PET failed to inform the SC thatan action involving the same parties and issues allegedly similar to those

raised in the present controversy, NCMB-NCR-RVA-O4-012-97 (In Re:Voluntary Arbitration between Prudential Bank and Prubankers

Association) is pending.

2. NO. There was no wage distortion as there is no wage parity betweenemployees in different rungs, instead there is a wage disparity betweenemployees in the same rung but located in different regions of the

country.

Art. 124 of LC gives the statutory definition of wage distortion: “a wage

distortion shall mean a situation where an increase in prescribed wageresults in the elimination of severe contraction of intentional quantitativedifferences in wage or salary rates between and among employee

groups in an establishment as to effectively obliterate the distinctionsembodied in such wage structure based on skills, length ofservice, or other logical bases of differentiation.”

Wage distort ion involves 4 elements:1. An existing hierarchy of positions with corresponding salary

rates;2. A significant change in the salary rate of a lower pay class

without a concomitant increase in the salary rate of a higher one;

3. The elimination of the distinction between the two levels; and

4. The existence of the distortion in the same region of the country.



In the case at bar, there is no wage distortion because elements 2 and 3

are missing. First, the implementation of the wage orders in the coveredbranches resulted in an increase in the salary rates of all pay classes.

Also, the quantitative difference in compensation between the pay

classes remained the same in all branches in the affected region hencethe hierarchy of positions based on skills, length of service and otherlogical bases of differentiation was preserved.

Answer to PET’s contentions: 1. A disparity in wages between employees holding similar

posit ions but in different regions does not const itute wagedistortion as contemplated by law. – Different regional wagesare mandated by the law (specifically RA 6727) as there is

recognition that there exist regional disparities in the cost ofliving. RA 6727 recognizes that there are different needs for thedifferent si tuations in different regions of the country.

2. Equal pay, equal work contention: RA 6727 mandates thatwages in every region must be set by the particular wageboard of that region, based on the prevailing situation therein.

Necessarily, the wages in different regions will not be uniform.Thus, under RA 6727, the minimum wage in Region 1 may bedifferent from that in Region 13, because the socioeconomic

conditions in the two regions are different.3. Management practice content ion: 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 mandatedto regionalize its wage structure.

Disposit ive: Petit ion is DENIED and CA’s decision is AFFIRMED.



Five J Taxi vs NLRCFacts:

Private Respondent Maldigan and Sabsalon was hired by the Petit ionerCompany as taxi drivers. The contract was composed of a 24 hourshifting sched on 4 days. They had to make a boundary adding to that

are car washing expense and deposit for any deficiency in the boundary

Petit ioner 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 severaloccasions(even leaving his taxi( and failing to remit his boundary

Respondents requested for the reimbursements of their respect ivedeposits but t petitioner refused because of the repairs incurred by their

vehicles. Respondent now files complaint for illegal dismissal anddeduction

Issue: WON deduction were illegal. YES

Held: The deductions made were illegal



GENESIS vs. UMMGT & TAROYJuan Taroy was hired on February 2, 1992 by Genesis Transport as a driver.

By 2002, Taroy was, after due notice and hearing, terminated fromemployment after an accident having been driving recklessly.Taroy thus filed for illegal dismissal claiming that he was singled out for

termination because of his union activities, other drivers who had metaccidents not having been dismissed. He further alleged that in 1997,petitioner had been deducing from his weekly earnings an amount ranging

from P1690-900 (representing toll fees) without his consent, thereby violatingLC 113. Deductions were also taken from the bus conductor’s earnings tothus result to double deduction (Labor Union filed a case too claiming that

there was no due process in dismissal).On petitioner’s part, Genesis counter claimed that despite repeated warningsand disciplining, Taroy had committed several violations which included poor

driving skills, tardiness, gambling inside the premises, use of shabu, smokingwhile driving, insubordination and reckless driving.In support of its claim that Taroy was afforded due process, Genesis

Transport cited his preventive suspension, and the investigation held whichresulted in the finding that the accident was not due to faulty brakes (asTaroy claimed) but due to his reckless driving.

LA: Genesis has discharged the burden of proof in proving that Taroy wasindeed reckless and that former was offered due process. UMMGT casewas dismissed as well finding that there was due process. On the claim for

service incentive leave pay LA ruled that Taroy was not entitled thereto sincehe was a field personnel paid on commission basis.With respect to Taroy’s claim for refund, however, LA ruled in his favor

finding that though tollgate fees are claimed to form part of overheadexpense, why were not expenses for fuel and maintenance alsocharged to overhead expenses? LA thus concluded that tollgate feesare deducted from the gross revenues and not from the salaries ofdrivers and conductors, but certainly the deduction thereof diminishesthe take home pay of the employees.Both parties appealed, petitioner as to the finding that Taroy was underpaid.

Taroy as for the failure to go over the issue of his preventive suspens ion.NLRC: Affirmed (underpayment) with Modification, brushing aside the illegal

suspension issue having been brought up for the first time on appeal butfound that he had not been afforded due process.SC: Petitioners aver that cases of similar import involving also the

respondent union have been decided with finality in their favor by the NLRC,thereby invoking res judicata to be applied. SC finds however that absent anyruling that the decisions had become final, said doctrine cannot be applied.

Neither may the Court take judicial notice of petitioners’ claim that thededuction of tollgate fees from the gross earnings of drivers is an acceptedand long- standing practice.

Judicial Notices would be applied under the following requisites:

(1) the matter must be one of common and general knowledge;

(2) it must be well and authoritatively settled and not doubtful oruncertain; and (3) it must be known to be within the limits of the

jurisdiction of the court.But a court cannot take judicial notice of any fact which, in part, isdependent on the existence or non- existence of a fact of which thecourt has no constructive knowledge.LABOR ISSUES: Lower Courts correctly held that the withholding of thoseamounts reduced the amount from which Taroy’s 9% commission would be

computed. Not to mention the fact that without Taroy’s written consent orauthorization, the deduction is considered illegal.DP: Rules require is that the employer act on the suspended worker’s status

of employment within the 30-day period by concluding the investigation. It isonly when the suspension exceeds 30 days that the employer must reinstatethe employee.

In the present case, petitioner company had until May 20, 2002. It did byterminating him through a notice dated May 10, 2002, hence, the 30-dayrequirement was not violated.



NINA JEWELRY MANUFACTURING OF METAL ARTS INC. vs.MONTECILLOFacts

Respondents were employed as goldsmiths by the petitioner NiñaJewelry Manufacturing of Metal Arts, Inc. There were incidents of theft

involving goldsmiths in Niña Jewelry’s employ. The petitioner imposed apolicy for goldsmiths, which were intended to answer for any loss ordamage which Niña Jewelry may sustain by reason of the goldsmiths’

fault or negligence in handling the gold entrusted to them, requiring themto post cash bonds or deposits in varying amounts but in no caseexceeding 15% of the latter’s salaries per week.

The petitioner alleged that the goldsmiths were given the option not topost deposits, but to sign authorizations allowing the former to deductfrom the latter’s salaries amounts not exceeding 15% of their take homepay should it be found that they lost the gold entrusted to them. The

deposits shall be returned upon completion of the goldsmiths ’ work andafter an accounting of the gold received.

The respondents claimed otherwise insisting that petitioner left the

goldsmiths with no option but to post the deposits. The next day after thepolicy was imposed, the respondents no longer reported for work andsignified their defiance against the new policy which at that point had not

even been implemented yet.

The respondents alleged that they were constructively dismissed by thepetitioner as their continued employments were made dependent on their

readiness to post the required deposits. The respondents then filed acomplaint for illegal dismissal and for the award of separation payagainst the petitioner, and later filed their amended complaint which

excluded their earlier prayer for separation pay but sought reinstatementand payment of back wages, attorney’s fees and 13

th month pay.

Issues

1) Whether or not Niña Jewelry Manufacturing of Metal Arts, Inc. may impose

the policy for their goldsmiths requiring them to post cash bonds or deposits;and2) Whether or not there is constructive dismissal.

Ruling

1) NO, the Niña Jewelry may not impose the policy. Articles 113 and 114 ofthe Labor Code are clear as to what are the exceptions to the generalprohibition against requiring deposits and effecting deductions from the

employees’ salaries. ART. 113. Wage Deduction — No employer, in his own behalf or in behalf ofany person, shall make any deduction from the wages of his employees,

except: (a)In cases where the worker is insured with his consent by the

employer, and the deduction is to recompense the employer for the amountpaid by him as premium on the insurance; (b)For union dues, in cases where

the right of the worker or his union to check-off has been recognized by theemployer or authorized in writing by the individual worker concerned; and (c)In cases where the employer is authorized by law or regulations issued by

the Secretary of Labor. Article 114.Deposits for loss or damage — No employer shall require hisworker to make deposits from which deductions shall be made for the

reimbursement of loss of or damage to tools, materials, or equipmentsupplied by the employer, except when the employer is engaged in suchtrades, occupations or business where the practice of making deposits is a

recognized one, or is necessary or desirable as determined by the Secretaryof Labor in appropriate rules and regulations.

The petitioners should first establish that the making of deductions from

the salaries is authorized by law, or regulations issued by the Secretary ofLabor. The petitioners failed to prove that their imposition of the new policyupon the goldsmiths under Niña Jewelry’s employ falls under the exceptions

specified in Articles 113 and 114 of the Labor Code.2) There is NO constructive dismissal. Constructive dismissal occurs whenthere is cessation of work because continued employment is rendered

impossible, unreasonable or unlikely; when there is a demotion in rank ordiminution in pay or both; or when a clear discrimination, insensibility, ordisdain by an employer becomes unbearable to the employee.

The petitioners did not whimsically or arbitrarily impose the policy topost cash bonds or make deductions from the workers’ salaries. As attestedto by the respondents’ fellow goldsmiths in their Joint Affidavit, the workers

were convened and informed of the reason behind the implementation of thenew policy. Instead of airing their concerns, the respondents just promptlystopped reporting for work.



SHS Perforated Materials, Inc. vs. DiazG.R. No. 185814 October 13, 2010

Mendoza, J.

FACTS:

SHS is a start-up corporation organized and existing under the Philippinesand registered with the PEZA. Petitioner Hartmannshenn, a Germannational, is its president, in which capacity he determines the administration

and direction of the day-to-day business affairs of SHS. PetitionerSchumacher, also a German national, is the treasurer and one of the boarddirectors. As such, he is authorized to pay all bills, payrolls, and other just

debts of SHS of whatever nature upon maturity.

Schumacher is also the EVP of the European Chamber of Commerce of the

Philippines (ECCP) which is a separate entity from SHS. Both entities havean arrangement where ECCP handles the payroll requirements of SHS tosimplify business operations and minimize operational expenses. Thus, the

wages of SHS employees are paid out by ECCP, through its AccountingServices Department headed by Taguiang.

Respondent Diaz was hired by petitioner SHS as Manager for BusinessDevelopment on probationary status from July 18, 2005 to January 18, 2006,with a monthly salary of P100,000.00. He was tasked to perform

sales/marketing functions, represent the company in its events, perform allfunctions, duties and responsibilities to be assigned by the employer in duecourse, among others. In addition to the above-mentioned responsibilities,

respondent was also instructed by Hartmannshenn to report to the SHSoffice and plant at least two (2) days every work week to observe technicalprocesses involved in the manufacturing of perforated materials, and to learn

about the products of the company, which respondent was hired to marketand sell.

During respondent’s employment, Hartmannshenn was often abroad and,

because of business exigencies, his instructions to respondent were eithersent by electronic mail or relayed through telephone or mobile phone. When

he would be in the Philippines, he and the respondent held meetings. As torespondent’s work, there was no close supervision by him. However, duringmeetings with the respondent, Hartmannshenn expressed his dissatisfaction

over respondent’s poor performance. Respondent allegedly failed to makeany concrete business proposal or implement any specific measure toimprove the productivity of the SHS office. In addition, respondent was said

not to have returned Hartmannshenn's calls and e-mails, to which Diazdenied.

Hartmannshenn instructed Taguiang not to release respondent’s salary.

Later that afternoon, respondent called and inquired about his salary.

Taguiang informed him that it was being withheld and that he had toimmediately communicate with Hartmannshenn. The next day, respondent

served on SHS a demand letter and a resignation letter, citing illegal andunfair labor practices.

ISSUES:• WON the temporary withholding of respondent’s salary/wages bypetitioners was a valid exercise of management prerogative

• WON respondent voluntarily resigned

HELD:

FIRST ISSUE- NO. Management prerogative refers “to the right of anemployer to regulate all aspects of employment, such as the freedom toprescribe work assignments, working methods, processes to be followed,

regulation regarding transfer of employees, supervision of their work, lay-offand discipline, and dismissal and recall of work.” Although managementprerogative refers to “the right to regulate all aspects of employment,” it

cannot be understood to include the right to temporarily withholdsalary/wages without the consent of the employee. To sanction such aninterpretation would be contrary to Artic le 116 of the Labor Code.

Any withholding of an employee’s wages by an employer may only beallowed in the form of wage deductions under the circumstances provided in

Article 113 of the Labor Code, as set forth below:

ART. 113. Wage Deduction. – No employer, in his own behalf or in behalf of

any person, shall make any deduction from the wages of his employees,except:

(a) In cases where the worker is insured with his consent by the employer,and the deduction is to recompense the employer for the amount paid by himas premium on the insurance;

(b) For union dues, in cases where the right of the worker or his union to

check-off has been recognized by the employer or authorized in writing bythe individual worker concerned; and

(c) In cases where the employer is authorized by law or regulations issuedby the Secretary of Labor.

As correctly pointed out by the LA, “absent a showing that the withholding ofcomplainant’s wages falls under the exceptions provided in Article 113, thewithholding thereof is thus unlawful.”

The Court finds petitioners’ evidence insufficient to prove that respondent didnot work from November 16 to November 30, 2005. As can be gleaned from

respondent’s Contract of Probationary Employment and the exchanges of

electronic mail messages between Hartmannshenn and respondent, the



latter’s duties as manager for business development entailed cultivatingbusiness ties, connections, and clients in order to make sales. Such duties

called for meetings with prospective clients outside the office rather thanreporting for work on a regular schedule. In other words, the nature ofrespondent’s job did not allow close supervision and monitoring by

petitioners. Neither was there any prescribed daily monitoring procedureestablished by petitioners to ensure that respondent was doing his job.Therefore, granting that respondent failed to answer Hartmannshennʼs

mobile calls and to reply to two electronic mail messages and given the factthat he admittedly failed to report to work at the SHS plant twice each weekduring the subject period, such cannot be taken to signify that he did not

work from November 16 to November 30, 2005.

SECOND ISSUEThe Court, however, agrees with the LA and the CA that respondent wasforced to resign and was, thus, constructively dismissed. In Duldulao v.

Court of Appeals, it was written: "There is constructive dismissal if an act ofclear discrimination, insensibility, or disdain by an employer becomes sounbearable on the part of the employee that it would foreclose any choice by

him except to forego his continued employment. It exists where there is

cessation of work because continued employment is rendered impossible,unreasonable or unlikely, as an offer involving a demotion in rank and a

diminution in pay."

What made it impossible, unreasonable or unlikely for respondent to continue

working for SHS was the unlawful withholding of his salary. For said reason,he was forced to resign.



Gaa vs Court of Appeals (1985) 140 SCRA 304Facts:

It appears that respondent Europhil Industries Corporation was formerlyone of the tenants in Trinity Building at T.M. Kalaw Street, Manila, whilepetitioner Gaa was then the building administ rator.

On December 12, 1973, Europhil commenced an action in CFI Manilafor damages against petitioner for having perpetrated certain acts thatEurophil considered a trespass upon its rights, namely, cutting of itselectricity, and removing its name from the building directory and gate

passes of its officials and employees",

On June 28, 1974, said court rendered judgment in favor of respondentEurophil, ordering petitioner to pay the former the sum of P10,000.00 as

actual damages, P5,000.00 as moral damages, P5,000.00 as exemplarydamages and to pay the costs.

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 Notice of Garnishment uponEl Grande Hotel, where petitioner was then employed, garnishing her"salary, commission and/or remuneration."

Petit ioner then filed with the CIF of Manila a motion to lift said

garnishment on the ground that her salaries, commission and orremuneration" are exempted from execution under Article 1708 of the

New Civil Code.

Said motion was denied by the lower Court

CA dismissed the petition holding that petitioner is not a mere laborer ascontemplated under

Article 1708 as the term laborer does not apply to one who holds amanagerial or supervisory position like that of petitioner, but only to thoselaborers occupying the lower strata.

Issue: WON the Petitioner is covered by Article 1708 of the New Civil Code.

RULING: Petit ioner is not covered by Article 1708 since she does not fallwithin the criteria of laborer.

Article 1708 of the Civil Code provides: “The laborer's wage shall not besubject to execution or attachment, except for debts incurred for food,shelter, clothing and medical attendance."

It is beyond dispute that petitioner is not an ordinary or rank and file laborerbut a responsibly place employee, of El Grande Hotel, responsible

for planning, directing, controlling, and coordinating the act ivities of allhousekeeping personnel so as to ensure the cleanliness, maintenance andorderliness of all guestrooms, function rooms, public areas, and the

surroundings of the hotel. Considering the importance of petitioner's functionin El Grande Hotel, it is undeniable that petitioner is occupying a position

equivalent to that of a managerial or supervisory position. We do not thinkthat the legislature intended the exemption in Article 1708 of the New

Civil Code to operate in favor of any but those who are laboring men orwomen in the sense that their work is manual.

Persons belonging to this class usually look to the reward of a day's labor forimmediate or present support, and such persons are more in need of theexemption than any others. Petitioner is definitely not within that class.



NESTOR J. BALLADARES, ET. AL. VS. PEAK VENTURESCORPORATION AND YANGCO MARKET OWNERS ASSOCIATIONG.R. No. 161794, June 16, 2009Ponente: J. Nachura

FACTS:Balladares and co-petitioners were hired as security guards by PeakVentures and were assigned at the premises of Yangco Market. They filed a

complaint for underpayment of wages against Peak Ventures with the DOLE.The Regional Director of DOLE rendered judgment in favor of petitioners andruled that Peak Ventures and Yangco Market are solidarily liable to

petitioners, said decision was upheld by Secretary of Labor. On certiorari, theCourt of Appeals, ruled that Regional Director has no jurisdiction over thecase because the claims of each petitioners exceeded PHP5,000, therefore

power to adjudicate such claims belong to the Labor Arbiter.ISSUE:Did the Regional Director correctly assume jurisdiction over the case?

LAW: Art. 128 of the Labor Code on Visitorial and Enforcement Powers

RULING:Yes, the Regional Director correctly assume jurisdiction over the

case. The complaint involved underpayment of wages. In order to verify the

allegations in the complaint, DOLE conducted an inspection which yieldedproof of violations of labor standards. By nature of the complaint and from theresult of the inspection the authority of the DOLE under Art. 128 of Labor

Code came into play regardless of monetary value of claims involved.

The Secretary of Labor or his duly authorized representatives is now

empowered to hear and decide in summary proceeding, any matter involvingthe recovery of amount of wages and other monetary claims arising out ofemployer-employee relationship at the time of inspections, even if the

amount of money claims exceed PHP5000.

OPINION:The Regional Director correctly assumed jurisdiction over the money

claims of petitioners even if the claims exceeded PHP5,000. Said jurisdictionwas in accordance with Art. 128(b) of the Labor Code and the case does notfall under the exception clause. We must take note that the doctrine in the

Servando case is no longer controlling upon the amendment of Art. 128 byRA 7730, Secretary of Labor or his duly authorized representative is nowempowered to hear and decide money claims arising out of employer-

employee relationship at the t ime of inspection.

In this case, Peak Ventures did not contest the findings of Regional

Director, it even admitted before the Court of Appeals that petitioners were

not paid correct wages and as a defense tried to pass the buck to Yangco

Market, therefore the case does not fall under the exceptions provided in Art.128 (b) of the Labor Code which would have divested Regional Director of

jurisdiction over the case.

In sum, respondent contested the findings of the labor inspector during and

after the inspection and raised issues the resolution of which necessitatedthe examination of evidentiary matters not verifiable in the normal course ofinspection. Hence, the Regional Director was divested of jurisdiction and

should have endorsed the case to the appropriate Arbitration Branch of theNLRC. Considering, however, that an illegal dismissal case had been filed bypetitioners wherein the existence or absence of an employer-employee

relationship was also raised, the CA correctly ruled that such endorsementwas no longer necessary. (VICTOR METEORO, et al v. CREATIVECREATURES, INC., G.R. No. 171275, July 13, 2009)



REPUBLIC V PERALTA150 SCRA 37 FELICIANO; May 20, 1987

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 ofVoluntary 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 finalawards 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 Article110 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 payclaimed by the Unions.

"Separation pay," the Solicitor General contends: is given to a laborer for aseparation from employment computed on the basis of the number of yearsthe laborer was employed by the employer; it is a form of penalty or damage

against the employer in favor of the employee for the latter's dismissal or

separation from service

ISSUEWON separation pay of their respective members embodied in final awardsof 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 “wages”) YES

Ratio: For the specific purposes of Article 1109 and in the context ofinsolvency termination or separation pay is reasonably regarded as formingpart 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. Sofar as concerns the employees, however, separation pay is additionalremuneration 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 IndustrialBank (PCIB) us. National Mines and Allied Workers Union, the SolicitorGeneral 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 ortermination or separation pay. In PCIB, this Court agreed with the position

advanced by the Solicitor General. We see no reason for overturning thisparticular position.- The resolution of the issue of priority among the several claims filed in the

insolvency proceedings instituted by the Insolvent cannot, however, rest on areading 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 theprovisions of the Civil Code concerning the classification, concurrence andpreference 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 furtherproceedings 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, howeverdesignated, 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 undera 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 reasonablevalue, as determined by the Secretary of Labor, of board, lodging, or otherfacilities customarily furnished by the employer to the employee. 'Fair and

reasonable value' shall not include any profit to the employer or to anyperson affiliated with the employer. (emphasis supplied)

Article 110. Worker preference in case of bankruptcy — In the event ofbankruptcy or liquidation of an employer's business, his workers shall enjoyfirst 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 othercreditors may establish any claim to a share in the assets of the employer.



Development Bank of the Philippines vs. NLRC, 242 SCRA 59Facts:On March 21, 1977 private respondent Leonor A. Ang started employment asExecutive Secretary with Tropical Philippines Wood Industries, Inc. (TPWII),a corporation engaged in the manufacture and sale of veneer, plywood and

sawdust panel boards. In 1982, she was promoted to the position ofPersonnel Officer. In September 1983, peti tioner Development Bank of thePhilippines, as mortgagee of TPWII, foreclosed its plant facilities

and equipment. Nevertheless , TPWII continued its businessoperations interrupted only by brief shutdowns for the purpose of servicing itsplant facilities and equipment. On January 1986, the petitioner took

possession of the foreclosed properties, and from then on the companyceased its operations. As a consequence, the private respondent wasverbally terminated from the service. After the hearing, the Labor Arbiter

found TPWII primarily liable to private respondent but only for her separationpay and vacation and sick leave pay because her claims for unpaid wagesand 13th month pay were later paid after the complaint was filed. The

General Manager was absolved of any liability. But with respect to petitioner,it was held subsidiarily liable in the event the company failed to satisfy the

judgment. The Labor Arbiter rationalized that the right of an employee to be

paid benefits due him from the properties of his employer is superior to the

right of the latter's mortgagee.

Issue: Whether or not there is grave abuse of discretion on the part ofNLRC.

Held: Yes. We hold that public respondent gravely abused its discretion inaffirming the decision of the Labor Arbiter. Art. 110 should not be treatedapart from other laws but applied in conjunction with the pertinent provisions

of the Civil Code and the Insolvency Law to the extent that piece-mealdistribution of the assets of the debtor is avoided. Art. 110, then prevailing,provides:

Art. 110. Worker preference in case of bankruptcy. - In the event ofbankruptcy or liquidation of an employer's business, his workers shall enjoy

first preference as regards wages due them for services rendered during theperiod prior to the bankruptcy or liquidation, any provision to the contrarynotwithstanding. Unpaid wages shall be paid in full before other creditors

may establish any claim to a share in the assets of the employer.

http://coffeeafficionado.blogspot.com/2012/02/development-bank-of-philippines-vs-nlrc.html

http://coffeeafficionado.blogspot.com/2012/02/development-bank-of-philippines-vs-nlrc.html



DBP vs. NLRC [G.R. No. 86227, 19 January 1994

Worker preference in case of bankruptcy. - In the event ofbankruptcy or liquidation of an employer's business, his workers shall

enjoy first preference as regards their unpaid wages and othermonetary claims, any provision of law to the contrarynotwithstanding. Such unpaid wages and monetary claims shall be

paid in full before the claims of the Government and other creditorsmay be paid. (Article 110 of the Labor Code)

(1) Article 110 of the Labor Code, as amended, must be viewedand read in conjunction with the provisions of the Civil Code onconcurrence and preferences of credits;

(2) The aforesaid provisions of the Civil Code, including Article 110of the Labor Code, require judicial proceedings in rem inadjudication of creditors' claims against the debtor's assets to

become operative;(3) Republic Act No. 6715 has the effect of expanding the "worker

preference" to cover not only unpaid wages but also other

monetary claims of laborers, to which even claims of the

Government must be deemed subordinate; and(4) The amendatory provisions of Republic Act 6715, which took

effect on 21 March 1989, should only be given prospectiveapplication.



Manuel D. Yngson, Jr., (in his capacity as the Liquidator of ARCAM &Co., Inc.) vs. Philippine National Bank, G.R. No. 171132, August 15,

2012.

Liquidation; right of secured creditor to foreclose mortgage. In the case ofConsuelo Metal Corporation v. Planters Development Bank, which involvedfactual antecedents similar to the present case, the court has already settled

the above question and upheld the right of the secured creditor to foreclose

the mortgages in its favor during the liquidation of a debtorcorporation. Manuel D. Yngson, Jr., (in his capacity as the Liquidator of

ARCAM & Co., Inc.) vs. Philippine National Bank , G.R. No. 171132, August15, 2012 .

http://sc.judiciary.gov.ph/jurisprudence/2012/august2012/171132.pdf













Framanlis Farms, Inc., e t. al. v. Hon. Minister of Labor, et. a l.G.R. No. 72616-17 March 8, 1989

Case Doctrine: Productivity StandardsMinister did not err in requiring the petitioners to pay wage differentials to

their pakyaw workers who worked for at least eight hours daily and earnedless 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 the13th 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 werenot paid emergency cost of living allowance (ECOLA) minimum wage, 13thmonth pay, holiday pay, and service incentive leave pay.

In their answer, Framanlis Farms alleged that the employees were notregular workers on their hacienda but were migratory (sacadas) or pakyawworkers 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 deficiencypayment 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 itby ordering the employer to pay all non-pakyaw workers their claim forholiday and incentive leave pay for the years 1977, 1978, all 'pakyaw'

workers their pay differentials for the same period on days they worked for atleast eight (8) hours and earned below P8.06 daily, and all complainants their13th 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 incentiveleave for pakyaw workers who are not regular employees but are merely paidon piece-rate, contrary to Art. 82 of the Labor Code;

Whether or not Framanlis Farm is required to pay 13th month pay despite thefact 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 paying13th month pay when its equivalent has already been given;

Ruling:

In 1976, PD No. 928 fixed a minimum wage of P7.00 for agricultural workersin any plantation or agricultural enterprise irrespective of whether or not theworker 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, PD1614 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 forat 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 paytheir workers 13th month pay in 1978 and 1979. However, they argued that

they substantially complied with the law by giving their workers a yearlybonus and other non-monetary benefits amounting to not less than 1/12th oftheir basic salary, in the form of food and free electricity.

Unfortunately, under Section 3 of PD No. 851, such benefits in the form offood 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 term 'its equivalent' as used in paragraph (c) hereof shall includeChristmas bonus, mid-year bonus, profit-sharing payments and other

cash bonuses amounting to not less than 1/12 of the basic salary butshall not include cash and stock dividends, cost of living allowancesand 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 ImplementingPresidential Decree No. 851 provides for the prohibition against reduction orelimination of benefits or favorable practice being enjoyed by the employee.



Boie-Takeda Chemicals, Inc. vs. de la Serna228 SCRA 329, Dec. 10, 1993

Facts:P.D. No. 851 provides for the Thirteen-Month Pay Law. Under Sec. 1 of said

law, “all employers are required to pay all their employees receiving basicsalary of not more than P1,000.00 a month, regardless of the nature of theemployment, and such should be paid on December 24 of every year.” The

Rules and Regulations Implementing P.D. 851 contained provisions defining

“13-month pay” and “basic salary” and the employers exempted from giving itand to whom it is made applicable. Supplementary Rules and Regulations

Implementing P.D. 851 were subsequently issued by Minister Ople whichinter alia set items of compensation not included in the computation of 13-month pay. (overtime pay, earnings another remunerations which are not

part of basic salary shall not be included in the computation of 13-monthpay). Pres. Corazon Aquino promulgated on August 13, 1985 M.O.No. 28,containing a single provision that modifies P.D. 851 by removing the salary

ceiling of P1,000.00 a month. More than a year later, Revised Guidelines onthe Implementation of the13-month pay law was promulgated by the thenLabor 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 orguaranteed wage plus commission or commissions were included in the

computation of 13thmonth pay) A routine inspection was conducted in thepremises of petitioner. Finding that petitioner had not been including thecommissions earned by its medical representatives in the computation of

their 1-month pay, a Notice of Inspection Result was served on petitioner toeffect restitution or correction of “the underpayment of 13 -month pay for theyears, 1986 to1988 of Medical representatives. Petitioner wrote the Labor

Department contesting the Notice of Inspection Results, and expressing theview that the commission paid to its medical representatives are not to beincluded 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. Emotion for reconsiderationwas filed and the then Acting labor Secretary Dionisio de la Serna affirmedthe order with modification that the sales commission earned of medical

representatives before August 13, 1989 (effectivity date of MO 28 and itsimplementing 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 paysince commissions were not included. In their almost identically-wordedpetitioner, petitioners, through common counsel, attribute grave abuse of

discretion to respondent labor officials on. Dionisio dela Serna and

Undersecretary Cresenciano B. Trajano.

ISSUE:

Whether or not commissions are included in the computation of 13-monthpay

HELD:NO. Contrary to respondent’s 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 to employees receiving amonthly basic salary of not more than P 1,000.00 said benefit was, and stillis, to be computed on the basic salary of the employee-recipient as provided

under P.D. 851. Thus, the interpretation given tithe term “basic salary” wasdefined in PD 851 applies equally to “basic salary” under M.O. No.28. Theterm “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 suchadditional payments as bonuses and overtime. In remunerative schemesconsists 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 effortsexerted 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 commissionsin the computation of the 13thmonth 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 thatimplementing rules cannot add to or detract from the provisions of the law itis 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 cannotwiden its scope. An administrative agency cannot amend an act of Congress.



Philippine Duplicators Inc. vs. NLRCGR 110068 February, 15, 1995Ponente: Feliciano

FACTS:(Note, the case was very procedurally technical, walang facts, nasa

rationa)Case differentiates between Productivity Bonuses vs. CommissionsProductivity bonuses are generally tied to the productivity or profit generationof the employer corporation. Productivity bonuses are not directly dependent

on the extent an individual employee exerts himself. Productivity bonus is

something extra for which no specific additional services are rendered by anyparticular employee and hence not legally demandable, absent a contractual

undertaking to pay it. Sales commissions are intimately related to or directlyproportional to the extent or energy of an employee's endeavours.Commissions are paid upon the specific results achieved by a salesman-

employee. It is percentage of the sales closed by a salesman and operatesas an integral part of such salesman's basic pay.

ISSUE:1.WON The commissions received by the salesmen were part of the “wages”to be considered for their 13

th month pay. – Yes

2.WON Productivity bonus shall be considered as part of wages in 13th

month pay – No

HELD:1.The commissions were an integral part of the pay of the workers,considering that the fixed wage was only 30% of what they were normally

receiving

2.Productivity bonuses are generally tied to the productivity, or capacity for

revenue production, of a corporation; such bonuses closely resemble profit-sharing payments and have no clear director necessary relation to theamount of work actually done by each individual employee. More generally, a

bonus is an amount granted and paid ex gratia to the employee; its payment

constitutes an act of enlightened generosity and self-interest on the part ofthe employer, rather than as a demandable or enforceable obligation. Since

productivity bonus is not demandable, then it cannot be considered part ofbasic salary when time comes to compute 13

th month pay. Additional

payments made to employees, to the extent they partake of the nature of

profit-sharing payments, are properly excluded from the ambit of the term"basic salary" for purposes of computing the 13th month pay due toemployees. Such additional payments are not “commissions" within the

meaning of the second paragraph of Section 5 (a) of the Revised GuidelinesImplementing13th Month Pay. The Supplementary Rules and RegulationsImplementing P.D. No.851 subsequently issued by former Labor Minister

Ople sought to



INTERCONTINENTAL BROADCASTING CORP. vs. PANGANIBAN

Facts

Ireneo Panganiban (respondent) was employed as Assistant General

Manager of the Intercontinental Broadcasting Corporation (petitioner)from May 1986 until his preventive suspension on August 26, 1988.Respondent resigned from his employment on September 2, 1988.

On April 12, 1989, respondent filed a civil case with the RTC of QuezonCity, Branch 93 against the members of the Board of Administrators(BOA) of petitioner alleging, among others, non-payment of his unpaidcommissions. A motion to dismiss was filed by Joselito Santiago, one of

the defendants, on the ground of lack of jurisdiction, as respondent’sclaim was a labor money claim, but this was denied by the RTC. Thus,Santiago filed a petition for certiorari with the CA which granted

Santiago’s petition for lack of jurisdiction and set aside the RTC’s Orders.

Thereafter, respondent was elected by the BOA as Vice-President forMarketing in July 1992. He resigned in April 1993. On July 24, 1996,

respondent filed against petitioner a complaint for illegal dismissal,separation pay, retirement benefits, unpaid commissions, and damages.The Labor Arbiter (LA) ordered respondent’s reinstatement with full

backwages, and the payment of his unpaid commission, damages andattorney’s fees. Petitioner appealed to the NLRC but due to petitioner’sfailure to post a bond, the appeal was dismissed. The decision was

deemed final and executory.

Issue

Whether or not respondent’s claim for unpaid commissions hasalready prescribed.

Ruling

Yes. Respondent’s claim had already prescribed as of September1991. In addition, the claims of private respondent for reinstatement,backwages and benefits in conjunction with his employment from 1986 to

1988 have prescribed.The applicable law in this case is Article 291 of the Labor Code

which provides that “all money claims arising from employer -employee

relations accruing during the effectivity of this Code shall be filed within three(3) years from the time the cause of action accrued; otherwise they shall beforever barred.”

The term “money claims” covers all money claims arising from an employer -employee relation the prescription of an action is interrupted by (a) the filingof an action, (b) a written extrajudicial demand by the creditor, and (c) a

written acknowledgment of the debt by the debtor.

On this point, the Court ruled that although the commencement of acivil action stops the running of the statute of prescription or limitations, its

dismissal or voluntary abandonment by plaintiff leaves the parties in exactlythe same position as though no action had been commenced at all. Hence,while the filing of Civil Case could have interrupted the running of the three-

year prescriptive period, its consequent dismissal by the CA due to lack of jurisdiction effectively cancelled the tolling of the prescriptive period withinwhich to file his money claim, leaving respondent in exactly the same

position as though no civil case had been filed at all. The running of the

three-year prescriptive period not having been interrupted by the filing of CivilCase respondent’s cause of action had already prescribed on September 2,

1991, three years after his cessation of employment on September 2, 1988.Consequently, when respondent filed his complaint for illegal dismissal,separation pay, retirement benefits, and damages in July 24, 1996, his claim,

clearly, had already been barred by prescription.



LETRAN CALAMBA FACULTY & EMPLOYEES ASSOCIATION vs.NATIONAL LABOR RELATIONS COMMISSION

Facts

Three cases were consolidated involving petitioner Letran Calamba

Faculty and Employees Association and Colegio de San Juan de Letran,Calamba, for money claims and a petition to declare the subject strikeillegal filed by respondent.

On July 28, 1999, the NLRC promulgated its Decision dismissing bothappeals. Petitioner filed a Motion for Reconsideration but the same wasdenied by the NLRC in its Resolution dated June 21, 2000.Petitionerthen filed a special civil action for certiorari with the CA assailing the

above-mentioned NLRC Decision and Resolution.

On May 14, 2002, the CA rendered the presently assailed judgmentdismissing the petition. Petitioner filed a Motion for Reconsideration but

the CA denied it in its Resolution promulgated on November 28, 2002.Citing Agustilo v. Court of Appeals, petitioner contends that in a specialcivil action for certiorari brought before the CA, the appellate court can

review the factual findings and the legal conclusions of the NLRC.

Petit ioner avers that the CA, in concluding that the NLRC Decision wassupported by substantial evidence, failed to specify what constituted said

evidence. Thus, petitioner asserts that the CA acted arbitrarily inaffirming the Decision of the NLRC.

IssueWhether or not the Court of Appeals erred in holding that the factual findingsof the NLRC cannot be reviewed in certiorari proceedings.

RulingCourt finds no error in the ruling of the CA that since nowhere in the

petition is there any acceptable demonstration that the LA or the NLRC actedeither with grave abuse of discretion or without or in excess of its jurisdiction,the appellate court has no reason to look into the correctness of the

evaluation of evidence which supports the labor tribunals ’ findings of fact. Settled is the rule that the findings of the LA, when affirmed by the

NLRC and the CA, are binding on the Supreme Court, unless patently

erroneous. It is not the function of the Supreme Court to analyze or weigh allover again the evidence already considered in the proceedings below. In apetition for review on certiorari, this Court’s jurisdiction is limited to reviewing

errors of law in the absence of any showing that the factual findingscomplained of are devoid of support in the records or are glaringly erroneous.Firm is the doctrine that this Court is not a trier of facts, and this applies with

greater force in labor cases. Findings of fact of administrative agencies andquasi-judicial bodies, which have acquired expertise because their

jurisdiction is confined to specific matters, are generally accorded not only

great respect but even finality. They are binding upon this Court unless there

is a showing of grave abuse of discretion or where it is clearly shown thatthey were arrived at arbitrarily or in utter disregard of the evidence on record.

We find none of these exceptions in the present case.In petitions for review on certiorari like the instant case, the Court

invariably sustains the unanimous factual findings of the LA, the NLRC and

the CA, especially when such findings are supported by substantial evidenceand there is no cogent basis to reverse the same, as in this case.



PRODUCERS BANK vs. NATIONAL LABOR RELATIONS COMMISSION

Facts

Private respondent filed a complaint on 11 February 1988 with the

Arbitration Branch, National Capital Region, National Labor RelationsCommission (NLRC), charging petitioner with diminution of benefits and non-payment of holiday pay. In addition, private respondent prayed for damages.

On 31 March 1989, Labor Arbiter found private respondent’s claims to be

unmeritorious and dismissed its complaint. In a complete reversal, however,the NLRC granted all of private respondent’s c laims, excep t for damages.

Petitioner argued that it cannot be compelled to pay the allegedbonus differentials due to its depressed financial condition, as evidenced bythe fact that in 1984 it was placed under conservatorship by the Monetary

Board. According to petitioner, it sustained losses in the millions of pesosfrom 1984 to 1988, an assertion which was affirmed by the labor arbiter.Moreover, the collective bargaining agreement of the parties does not

provide for the payment of any mid-year or Christmas bonus. Petitioner alsocontended that it is not covered by PD 851 since the mid-year and Christmasbonuses it has been giving its employees from 1984 to 1988 exceeds the

basic salary for one month (except for 1985 where a total of one month basic

salary was given). Hence, this amount should be applied towards thesatisfaction of the 13

th month pay, pursuant to Section 2 of PD 851.

The respondent, however, argued that the mid-year and Christmasbonuses, by reason of their having been given for thirteen consecutive years,have ripened into a vested right and, as such, can no longer be unilaterally

withdrawn by petitioner without violating Article 100 of Presidential DecreeNo. 4429 which prohibits the diminution or elimination of benefits alreadybeing enjoyed by the employees. Although private respondent concedes that

the grant of a bonus is discretionary on the part of the employer, it arguesthat, by reason of its long and regular concession, it may become part of theemployee’s regular compensation. Moreover, they contended that the

conservator was not justified in diminishing or not paying the 13th

month pay

and that petitioner should have instead applied for an exemption, inaccordance with section 7 of Presidential Decree No. 851, as amended by

Presidential Decree No. 1364, but that it did not do so. The actions of theconservator ran counter to the provisions of PD 851.

Issue

Whether or not petitioner is entitled to pay the bonuses and 13th

month pay.

Ruling

No, they are not. A bonus is an amount granted and paid to anemployee for his industry and loyalty which contributed to the success of theemployer’s business and made possible the realization of profits. It is an act

of generosity granted by an enlightened employer to spur the employee togreater efforts for the success of the business and realization of biggerprofits. 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 whenit is made part of the wage, salary or compensation of the employee.

However, an employer cannot be forced to distribute bonuses whichit can no longer afford to pay. To hold otherwise would be to penalize theemployer for his past generosity.

Private respondent’s contention, that the decrease in the mid-year and year-end bonuses constituted a diminution of the employees’ salaries, is notcorrect, for bonuses are not part of labor standards in the same class as

salaries, cost of living allowances, holiday pay, and leave benefits, which areprovided by the Labor Code.

Petitioner was placed under conservatorship by the Monetary Board,

pursuant to its authority under Section 28-A of Republic Act No. 265 as

amended by Presidential Decree No. 72. Under Section 28-A, the MonetaryBoard may place a bank under the control of a conservator when it finds that

the bank is continuously unable or unwilling to maintain a condition ofsolvency or liquidity.

Petitioner was not only experiencing a decline in its profits, but was

reeling from tremendous losses triggered by a bank-run which began in1983. In such a depressed financial condition, petitioner cannot be legallycompelled to continue paying the same amount of bonuses to its employees.

Thus, the conservator was justified in reducing the mid-year and Christmasbonuses of petitioner’s employees. To ho ld otherwise would be to defeat thereason for the conservatorship which is to preserve the assets and restore

the viability of the financially precarious bank. Ultimately, it is to the

employees’ advantage that the conservatorship achieve its purposes for thealternative would be petitioner’s closure whereby employees would lose not

only their benefits, but their jobs as well.With regard to 13

th month pay, PD 851, which was issued by

President Marcos on 16 December 1975, requires all employers to pay their

employees receiving a basic salary of not more than P 1,000 a month,regardless of the nature of the employment, a 13

th month pay, not later than

December 24 of every year. However, employers already paying their

employees a 13th

month pay or its equivalent are not covered by the law.Under the Revised Guidelines on the Implementation of the 13

th-Month Pay

Law, the term “equivalent” shall be construed to include Christmas bonus,

mid-year bonus, cash bonuses and other payments amounting to not less

than 1/12 of the basic salary. The intention of the law was to grant some



relief - not to all workers - but only to those not actually paid a 13th

monthsalary or what amounts to it, by whatever name called. It was not envisioned

that a double burden would be imposed on the employer already paying hisemployees a 13

th month pay or its equivalent whether out of pure generosity

or on the basis of a binding agreement. To impose upon an employer already

giving his employees the equivalent of a 13th

month pay would be to penalizehim for his liberality and in all probability, the employer would react bywithdrawing the bonuses or resist further voluntary grants for fear that if and

when a law is passed giving the same benefits, his prior concessions might

not be given due credit.In the case at bar, even assuming the truth of private respondent’s

claims as contained in its position paper or Memorandum regarding thepayments received by its members in the form of 13

th month pay, mid-year

bonus and Christmas bonus, it is noted that, for each and every year

involved, the total amount given by petitioner would still exceed, or at leastbe equal to, one month basic salary and thus, may be considered as an“equivalent” of the 13

th month pay mandated by PD 851.

Thus, petitioner is justified in crediting the mid-year bonus and Christmasbonus as part of the 13

th month pay.



LEPANTO CERAMICS, INC., vs. LEPANTO CERAMICS EMPLOYEESASSOCIATIONPEREZ, J.: Petition for Review on Certiorari Rule 452nd DIVISION G.R. No. 180866 March 2, 2010

COMPANY GAVE SMALLER AMOUNT OF BONUS AND NOT IN CASHDESPITE WHAT THE CBA STATES: Findings of labor officials, who aredeemed to have acquired expertise in matters within their respective

jurisdictions, generally bind the Court when supported by substantial

evidence, more so when findings of both the arbitrator and the Court of Appeals coincide.

An arbitrator is confined to the interpretation and application of the CBA. hisaward is legitimate if it draws its essence from the CBA.

A "bonus" is a gratuity or act of liberality of the giver, given in addition to whatis ordinarily received by or strictly due the recipient. It is paid to an employee

for his contribution to the success of the employer’s business and therealization of profits. It is also granted to spur the employee to greater effortsfor the success of the business and realization of bigger profits.

It is generally not a demandable and enforceable obligation. To beenforceable, it must have been promised by the employer and expressly

agreed upon by the parties, such as this case where Christmas bonus isintegrated in the CBA.

The CBA is the law between the parties and have the obligation to complywith its provisions. The CBA provides for the giving of a "Christmas giftpackage/bonus" without qualification. It did not state that it is dependent on

the employer’s financial standing.

Business losses are a feeble ground to repudiate i ts obligation under the

CBA. The principle of non-diminution of benefits is based on the

constitutional mandate to protect the rights of workers, promote their welfareand afford labor full protection. It is presumed that Lepanto entered into the

CBA voluntarily with full knowledge of its contents and commitments underthe contract.

The implementat ion of the subject CBA provision may further depletepetitioner’s resources, but the remedy is the Court’s invalidation of theprovision but in the clarification in subsequent CBA negotiations.



EASTERN TELECOMMUNICATIONS PHIL INC. v. EASTERN TELECOMSEMPLOYESS UNIONGR No 185665, Feb 8, 2012

Facts: Eastern Telecom Philippines, Inc. (ETPI) plans to defer payment of

the 2003 14th, 15th and 16th month bonuses sometime in April 2004. Thecompany's main ground in postponing the payment of bonuses is due toallege continuing deterioration of company's financial position which started

in the year 2000. However, ETPI while postponing payment of bonuses

sometime in April 2004, such payment would also be subject to availability offunds. The union strongly opposed the deferment in payment of the bonuses

by filing a preventive mediation complaint with the Numbing July 3, 2003, thepurpose of which complaint is to determine the date when the bonus shouldbe paid. In the conference held at the NCMB, ETPI reiterated its stand that

payment of the bonuses would only be made in April 2004 to which date ofpayment, the union agreed. Subsequently, the company made a suddenturnaround in its position by declaring that they will no longer pay the

bonuses until the issue is resolved through compulsory arbitration. Thus, on April 26, 2004, the union filed a Notice of St rike on the ground of unfair laborpractice for failure of ETPI to pay the bonuses in gross violation of the

economic provision of the existing Canon May 19, 2004, the Secretary of

Labor and Employment, finding that the company is engaged in an industryconsidered vital to the economy and any work disruption thereat will

adversely affect not only its operation but also that of the other businessrelying on its services, certified the labor dispute for compulsory arbitration.

Acting on the certified labor dispute, a hearing was called on July 16, 2004

wherein the parties have submitted that the issues for resolution. Thereafter,they were directed to submit their respective position papers and evidence insupport thereof after which submission, they agreed to have the case

considered submitted for decision. On April 28, 2005, the NLRC issued itsResolution dismissing ETEU's complaint and held that ETPI could not beforced to pay the union members the bonuses for the year 2003 and the 14th

month bonus for the year 2004 inasmuch as the payment of these additional

benefits was basically a management prerogative, being an act of generosityand munificence on the part of the company and contingent upon the

realization of profits. The CA declared that the Side Agreements of the 1998and 2001 CBA created a contractual obligation on ETPI to confer the subjectbonuses to its employees without qualification or condition. It also found that

the grant of said bonuses has already ripened into a company practice andtheir denial would amount to diminution of the employees' benefits .

Issue: Whether or not ETPI is liable to pay 14th, 15th and 16th monthbonuses for the year 2003 and 14th month bonus for the year 2004 to themembers of respondent union.

Decision: From a legal point of view, a bonus is a gratuity or act of liberalityof the giver which the recipient cannot demand as a matter of right. The grant

of a bonus is basically a management prerogative which cannot be forcedupon the employer who may not be obliged to assume the onerous burden ofgranting bonuses. However, a bonus becomes a demandable or enforceable

obligation if the additional compensation is granted without any conditionsimposed for its payment. In such case, the bonus is treated as part of thewage, salary or compensation of the employee. In this case, there is no

dispute that Eastern Telecommunications Phil’s., Inc. and Eastern Telecoms

Employees Union agreed on the inclusion of a provision for the grant of 14th,15th and 16th month bonuses in the 1998-2001 CBA Side Agreement, as

well as in their 2001-2004 CBA Side Agreement, which contained noqualification for its payment. There were no conditions specified in the CBASide Agreements for the grant of the bonus. There was nothing in the

relevant provisions of the CBA which made the grant of the bonus dependenton the company's financial standing or contingent upon the realization ofprofits. There was also no statement that if the company derives no profits,

no bonus will be given to the employees. In fine, the payment of thesebonuses was not related to the profitability of business operations.Consequently, the giving of the subject bonuses cannot be peremptorily

withdrawn by Eastern Telecommunications Phil’s., Inc. without violating

Article 100 of the Labor Code, which prohibits the unilateral elimination ordiminution of benefits by the employer. The rule is settled that any benefit

and supplement being enjoyed by the employees cannot be reduced,diminished, discontinued or eliminated by the employer.

Documents

CH 6 Digest - Wages