Wage

Remuneration or earnings, however designated, 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 under a 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 reasonable value, as determined by the Secretary of Labor
and Employment, of board, lodging, or other facilities customarily furnished by the employer to
the employee. Fair and reasonable value shall not include any profit to the employer, or to
any person affiliated with the employer. (Article 97 (f) Labor Code)

Facilities/Supplements

Atok-Big Wedge Co. Doctrine:

Facilities items of expense necessary for the laborers and his familys existence and subsistence so
that by express provision of law (Sec. 2 [g]), they form part of the wage and when furnished (to provide
what is needed) by the employer are deductible therefrom, since if they are not furnished, the laborer
would spend and pay for them just the same.

Supplements extra remuneration/special privileges/benefits given to or received by the laborers over
and above their ordinary earnings or wages.

SLL International and Mayon Doctrine:
The distinction is not in the kind of benefit or item (food, lodging, bonus or sick leave) given but in the
purpose for which it is given.

Facilities the benefit/privilege is part of the laborers basic wages.

Supplements benefit/privilege is above and over an employees basic wages.

SLL International and Mabeza Doctrine:
Before the value of facilities can be deducted from the employees wages, the following requisites must
be present:
(1) Proof that the facilities are customarily furnished by trade
(2) Provision of deductible facilities must be voluntarily accepted in writing by the employee
(3) Facilities must be charged at reasonable value

SLL International and Mayon Doctrine:
Mere availment is not sufficient to allow deductions from employees wages.

Mabeza Doctrine:
Food/snacks or other convenience provided by the employers are deemed as supplements if they are
granted for the convenience of the employer.





SLL International vs. NLRC

Facts:
Private Respondents were employed as cable/linemen project employees by SLL International. Their
services were engaged in four projects of the company from March 1997 to February 2000. During these
periods, SLL International was underpaying the private respondents as to the prescribed minimum wage
in the particular area of the project.

On the fourth project, due to economic problems, SLL had to cut down the overtime work of its
employees including private respondents. Private Respondents requested to work overtime to which the
Lagon, owner/officer of SLL International, refused and told them that should they insist, they would
have to go home at their own expense and that they would not be allowed to stay in the quarters.

Private Respondents left and went home to Cebu. Then, they filed a complaint for illegal dismissal, non-
payment of wages, holiday pay, 13th month pay, service incentive leaves, damages and attorneys fees.

SLL International claim that the food, lodging house, transportation, electricity, water and snacks they
provided to the private respondents should be added to the computation of their basic pay.

Labor Arbiter: Private Respondents are regular employees. However, they were not illegally dismissed.
The claims of SLL International should not be added in the computation of their basic pay since these
were not given without their consent. Thus, private respondents were underpaid.

NLRC: affirmed Labor Arbiters decision

CA: affirmed the decision of NLRC and Labor Arbiter

Issue/s:
Whether or not the benefits/privileges provided by SLL International to private respondents should be
considered as Facilities even without a written consent from the latter.

Decision:
The court denied SLL Internationals petition and affirmed the ruling of the lower courts.

In labor cases, the burden of proof of proving payment of monetary claims rests on the employer
because the pertinent personal files, payrolls, records, remittances and other similar documents are in
their possession and not in the workers.
In this case, SLL International failed to present any evidence payroll or payslips to support
their defense of payment.

Before the value of facilities can be deducted from the employees wages, the following requisites must
be present:
(1) Proof that the facilities are customarily furnished by trade
(2) Provision of deductible facilities must be voluntarily accepted in writing by the employee
(3) Facilities must be charged at reasonable value
Mere availment is not sufficient to allow deductions from employees wages.
SLL International failed to meet these requirements:
(1) They failed to present company policy showing that provisions for meals and lodging
were part of the employers salary.
(2) They failed to provide proof of the employees written authorization.
(3) They failed to show how they arrived at the computation of the expenses.

The benefits/privileges provided by SLL International to private respondents are supplements since they
were given freely for the purpose of maintaining the efficiency and health of their workers while they
were working at their respective project.

Mayon Hotel and Restaurant vs. Adana, et al.

Facts:
On various dates starting 1981, private respondents were hired by Mayon Hotel and Restaurant for
different positions (Waiter, Cook, Roomboy, etc.) Due to expiration and non-renewal of lease contract
for the rented space, the operations of the hotel were suspended but it continued its operation in a new
location. However, not all the employees continued working in the Mayon Restaurant at its new site.

Thus, the employees filed complaints for illegal dismissal, underpayment of wages and money claims.

Labor Arbiter: held that the employees were illegally dismissed and granted separation/retirement pay
and other money claims of the employees.

NLRC: reversed the Labor Arbiters decision and dismissed all the complaints.

CA: reversed NLRCs decision and reinstated Labor Arbiters

Issue/s:
Whether or not the employees were illegally dismissed

Whether or not the employees are entitled to money claims due to underpayment of wages, holiday
pay, rest day premium, SILP, COLA, overtime pay and night shift differential pay.

Decision:
The court dismissed this petition and affirmed CAs decision.

At first, Mayon Hotel and Restaurant contends that the employees were temporarily laid off; the money
claims of the employees were premature. But when the Labor Arbiter ruled that there was illegal
dismissal when the lay-off had exceeded 6 months, petitioner company claimed that they were not able
to reinstate the employees due to financial losses.
Court held that the evidence on record show that Mayon Hotel and Restaurant intended the
termination of the employees as permanent.
(1) In their position paper to the Labor Arbiter, they made no mention of any intent to
recall the employees.
(2) The owners of Mayon continually accused the employees of mismanagement is
contrary with the desire to recall them to work.
Even if the cessation of employment was merely temporary, it became dismissal by operation of
law when Mayon Hotel and Restaurant failed to reinstate respondents after the lapse of 6
months, as provided in the Labor Code.

Invocation of serious business losses is not a defense to payment of labor standard benefits. Employer
cannot exempt himself from liability to pay minimum wages because of poor financial condition of the
company. Payment of minimum wage is not dependent on the employers ability to pay.


Mayon Hotel and Restaurant contends that the cost of food and snacks provided to respondents as
facilities should have been included in the payment of their wages. They invoke Sections 5 and 6, Rule
VII-A which allow the deduction of facilities provided by the employer through an appropriate Facility
Evaluation Order issued by the Regional Director of DOLE. They also aver that they give 5 percent gross
each month as incentives.

Before the value of facilities can be deducted from the employees wages, the following requisites must
be present:
(1) Proof that the facilities are customarily furnished by trade
(2) Provision of deductible facilities must be voluntarily accepted in writing by the employee
(3) Facilities must be charged at reasonable value
Mere availment is not sufficient to allow deductions from employees wages.
Mayon Hotel and Restaurant failed to comply with these requirements:
(1) No proof of respondents written authorization
(2) Owner admitted that she did not inform the employees of the facilities she had
applied for.
(3) Labor Arbiter found that the actual food served on the employees was different
from what was provided in the Facility Evaluation Order.

Food/snacks or other convenience provided by the employers are deemed as supplements if they are
granted for the convenience of the employer.
The employees testified that they were required to eat in the hotel and restaurant so that they
will not go home and there is no interruption in the services of Mayon Hotel and Restaurant.

The distinction is not in the kind of benefit or item (food, lodging, bonus or sick leave) given but in the
purpose for which it is given.
The hotel workers were provided with food and snack because their ready availability is a
necessary matter in the operations of a small hotel - they work in different shifts and are
expected to be available at various odd hours.

The 5 percent gross income of the establishment cannot be considered as part of the respondents wage
because it is in the nature of share from service charges since the respondents testified that these were
not fixed amounts and not given monthly.

Mabeza vs. NLRC, Ng/Hotel Supreme

Facts:
Petitioner Mabeza was employed as a chambermaid by Ng in Hotel Supreme.

They were made to sign an instrument attesting to Hotel Supremes compliance with minimum wage
and other labor standards provisions of law. Mabeza signed the same but refused to go to the City
Prosecutors Office to swear to the veracity of the contents of the instrument.
Ng strongly reprimanded Mabeza for refusing to go to the City Prosecutors Office. Then, Mabeza was
ordered to return the keys of her living quarters and remove her belongings from the hotel premises.
She then reluctantly filed a leave of absence which was denied by management. When she attempted to
return to work, she was informed that she should not report to work and instead continue with her
unofficial leave. Three days after her attempt to return to work, she filed a complaint for illegal
dismissal.

Ng alleged that Mabeza abandoned her work. A few months after, Ng supplemented his answer by
saying that Mabeza was dismissed due to loss of confidence supported by a criminal complaint of
qualified theft at the City Prosecutors Office.

Labor Arbiter: dismissed Mabezas complaint on the ground of loss of confidence.
NLRC: affirmed Labor Arbiters decision

Issue/s:
Whether or not Mabeza was illegally dismissed

Whether or not Mabeza is entitled to money claims.

Decision:
The court granted this petition, reversed NLRCs decision and held that Mabeza was illegally dismissed
and is entitled to money claims.

For abandonment to arise, there must be concurrence of two things:
(1) Lack of intention to work
(2) Presence of overt acts signifying employees intention not to work
The fact Mabeza attempted to file a leave of absence indicates not an intention to abandon but
her intention to return to work after the period of her leave of absence, had it been granted,
shall have expired.

While absence from work for a prolonged period may suggest abandonment in certain instances, mere
absence of one or two days would not be enough to sustain such claim.
Mabeza tried to resume working to the hotel, to no avail. It was only after she had been
repeatedly rejected that she filed a case for illegal dismissal.

Loss of confidence as a just cause for dismissal was never intended to provide employers with a blank
check for terminating their employees. Loss of confidence apply only to cases involving employees
occupying positions of trust and confidence or where employees is routinely charged with the care and
custody of the employers money or property managerial employees, cashiers, auditors, and
employees who regularly handle significant amounts of money or property.
Loss of confidence as a just cause for dismissal cannot apply to Mabeza - a chambermaid.

Hotel Supreme claims that the reason Mabeza received less than the minimum wage was because she
did not include the meals, lodging, electricity and water she received in her computations.
Before the value of facilities can be deducted from the employees wages, the following requisites must
be present:
(1) Proof that the facilities are customarily furnished by trade
(2) Provision of deductible facilities must be voluntarily accepted in writing by the employee
(3) Facilities must be charged at reasonable value
These requirements were not met.
(1) Hotel Supreme failed to present any company policy to show that the meal and
lodging are part of the salary.
(2) They failed to provide proof of the employees written authorization.
(3) They failed to show how they arrived at the valuations.

Food/snacks or other convenience provided by the employers are deemed as supplements if they are
granted for the convenience of the employer. The distinction is not in the kind of benefit or item (food,
lodging, bonus or sick leave) given but in the purpose for which it is given.
The food, lodging, electricity and water consumed by Mabeza were not facilities but
supplements. The hotel workers were provided with food and snack because their ready
availability is a necessary matter in the operations of a small hotel - they work in different shifts
and are expected to be available at various odd hours.

Wage Distortion
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.

Manila Mandarin Doctrine:
The issue of whether a wage distortion exists as a consequence of the grant of a wage increase to
certain employees is a question of fact.

RA 6727: Procedure to be followed when application of any prescribed wage increase by virtue of law or
Wage order issued by any Regional Board results in distortions of the wage structure within an
establishment:
1. Employer and union shall negotiate to correct the distortions through:
a. Grievance procedure under their collective bargaining agreement
b. If unresolved, through voluntary arbitration
2. If there are no collective bargaining agreement or recognized labor unions, Employers and
workers shall endeavor to correct such distortions through:
a. National Conciliation and Mediation Board
b. If unresolved, National Labor Relations Commission (NLRC)

Manila Mandarin Employees Union vs. NLRC

Facts:
Petitioner Manila Mandarin Employees Union filed a complaint, in behalf of its members, to compel
Mandarin to pay salary differentials of the individual employees concerned because of wage distortions
in their salary structure allegedly created by the upward revisions of the minimum wage pursuant to
various Presidential Decrees and Wage Orders.

Labor Arbiter: ruled that there were in fact wage distortions entitling the union members to salary
adjustments.
NLRC: reversed Labor Arbiters decision and dismissed the complaint.

Issue:
Whether there is a wage distortion in this case.

Decision:
The court affirmed NLRCs decision.

The burden of proving the existence of a wage distortion lies upon the Union. They failed to do this.
They failed to show substantial evidence the quantitative differences in wage rates between employee
groups and if there were any severe contractions of these quantitative differences.

The court held that NLRC correctly concluded that there was no wage distortion contemplated by the
law. The court refuted the evidence presented by the Union which shows employees which have same
position but different salary. The court adopted the explanation provided by Mandarin that the Union
failed to appreciate various circumstances relating to the employment of the 13 employees:
1. An employee was hired initially at a position level carrying a higher hiring rate than the others
2. Employee failed to meet the cut-off date in the grant of yearly CBA increase
3. Union did not get the correct data on salaries.

Even if there exists a wage distortion, this was corrected under the fully implemented Compromise
Agreement. Union and Mandarin entered into a New Collective Bargaining Agreement thus it is deemed
to have thereby settled any remaining question of wage distortion since the wages and wage distortions
are economic issues and are a proper subject of collective bargaining.