Labor 1 - Digests - 102015

Labor 1 102015
13th Month Pay

Dentech Manufacturing v. NLRC
University of Pang Faculty v. Univ of Pang
Archilles Manufacturing v. NLRC
Songco v. NLRC
Boie-Takeda v. De la Serna
Phil Duplicators Inc v. NLRC
Intercon Broadcasting v. Panganiban
Letran v. NLRC
Framanlis Farms v. Minister of Labor
Bonus
Phil Duplicators v. NLRC
Eastern Telecom v. Eastern Tel Employees
Working Conditions of Special Workers
Phil Telegraph v. NLRC
Duncan Assoc v. Glaxo Wellcome
Phil Aeolus v. NLRC
Co v. Vargas
Apex Mining v. NLRC
Libres v. NLRC
Dentech manufacturing v. nlrc

G.R. No. 81477; April 19, 1989; Gancayco, J.
Digest prepared by Efren II Resurreccion
Ed Note: This case is filed under Requirement to make
deposits for loss or damage. The Relevant issue is in bold.
Facts:
1. Dentech is a domestic corporation (formerly a sole
proprietorship owned by JL Ledesma) engaged in the
manufacture and sale of dental equipment and supplies.
2. Respondents Marbella, Torno, Tajan and Joel Torno are
members of the Confederation of Citizens Labor Union,
who used to work for petitioner firm as welders,
upoholsterers and painters. They were dismissed from the
firm beginning Feb 14, 1985.
3. On June 26, 1985, Respondents filed for illegal dismissal
and violation of PD851. At first they only sought 13 th month
pay (13mo) pursuant to PD851, separation pay, and the
refund of the cash bond they filed with the company
at the start of their employment. Later, they sought
reinstatement as well as 13mo, Service Incentive Leave
(SIL), separation pay (SP) in the event they are not
reinstated. They claim that they were dismissed for
pursuing union activities.
4. Dentech interposes the defense of abandonment, thus
claiming that they are not entitled to SIL, and SP.
a. Dentech maintained that each of the private
respondents
receive
a
total
monthly
compensation of more than P1,000 and that
under PD851 Sec 1 such employees are not
entitled to receive 13mo.
5. Jan 28, 1987, LA: In claiming abandonment, the LA finds
it strange that since respondents sought to be reinstated,
it cannot imagine why parties never achieved an
understanding on this aspect. LA reinstated the
employees, stating that the P1,000/mo Ceiling on 13mo
has been removed and complainants are entitled to
receive 13 mo. For the past 3 years; also the SIL and
return of the cash bond were granted.
a. Both parties appealed this decision.
b. Dentech claimed that it was in bad financial
shape and was exempted from complying with
PD851, and that the refund of the cash bond
should not have been filed inasmuch as the
proceeds of the same had already been
given by the company to a certain
carinderia to pay for the outstanding
accounts of the respondents therein.
6.
Nov 4, 1987, NLRC: LA decision was affirmed. Citing,

Memo Order 28 (MO28), issued by Cory, removed the
exclusion of giving 13mo to employees receiving a basic
salary of 1,000/mo. The cash bond is also in direct
contravention to Art 114 LC thus refund is in order.
a. Dentech appealed this decision to the SC.
b. Petitioners maintain that they are financially
distressed, and should be exempt; that MO28,
signed into law in 1986, cannot be given
retroactive effect. It is also asserted that the
refund of the cash bond is improper as it
had already been paid to a carinderia to
settle their outstanding accounts.
c. Respondents comments: They are actually paid
less than P1,000/month. As to the financial
distress claimed, the Sol Gen manifests that no
such prior authorization had been obtained by
petitioner firm. As to the cash bond, Sol Gen
maintains that the cash bond required is
disallowed by Art 114 LC.
Issues/Ratio:
W/N Employees are entitled to 13mo. YES.
PD851, signed 1975 required that all employees

receiving a basic salary of not more than P1,000/mo
be entitled to 13mo, to be paid not later than Dec 24
of every year. Under Sec 3, those currently incurring
substantial losses are not covered. But such
distressed employees must obtain the prior
authorization of the SOLE before they may
qualify.
o
On may 1, 1978 PD1364 was signed, teling
the DOLE to stop accepting applications for
exception.
o
On Aug 13, 1986, Cory signed MO28,
eliminating the P1,000 ceiling.
From the foregoing it is clear that Dentech has no

basis to claim that they are exempted from the
pertinent provisions related to 13mo.
The P1,000 salary ceiling provided in PD851 pertains

to basic salary, not total monthly compensation.
Petitioners admit that the employees each receive a
daily wage of P40 only at 5 days a weekan amount
less than 1,000.
o
Assuming ad arguendo that it is over P1,000,
they are still not exempt because they can be
exempted only upon prior authorization
from the SOLE. No such authorization was
acquired.
W/N the refund of the cash bond is proper YES
Art 144 LC prohibits an employer from requiring

his employees to file a cash bond or to make
deposits subject to certain exceptions.
o
114. No employer shall require his workers to
make deposits from which deductions shall
be made for the reimbursement of loss or
damage to tools, materials or equipment
supplied by the employer, EXCEPT when
employer is engaged in such trades,
occupations or business where the practice
of making deductions requiring deposits
is a recognized one, or is necessary or
desirable as determined by the SOLE in
appropriating rules and regulations
Petitioners have not satisfactorily disputed the

applicability of this provision to the case at bar.
Considering that they failed to show that the
company is authorized by law to require
respondents to file the cash bond, a refund is in
order.
o
The allegation that the proceeds had been
paid to a carinderia does not merit serious
consideration. No evidence or receipt has
been shown to prove such payment.
LABOR 1: Digests | 102015 | kb | 1
Held:
SC finds no GAD in the decision of the NLRC. Petition is
Dismissed for lack of merit.
UNIVERSITY OF PANGASINAN FACULTY UNION (UNION) v.
UNIVERSITY OF PANGASINAN (UNIVERSITY)
20 February 1984; Gutierrez, J. | Digest Prepared by Hans
Santos
FACTS
UNION is a labor union composed of faculty members of
UNIVERSITY. UNION filed acomplaint, though its President, Miss
Abad, against the UNIVERSITY for (a) payment of Emergency
Cost of Living Allowances (ECOLA) for 7 November to 5
December 1981, the semestral break (sembreak); (b) salary
increases from the 60% of incremental proceeds of increased
tuition fees; and (c) payment of salaries for extra loads.
UNION members are full-time professors, instructors and
teachers of UNIVERSITY. The teachers in the college level teach
for a normal duration of 10 mos in a school year, excluding 2
months of summer vacation. During the sembreak, they were
paid their monthly salaries but not the ECOLA. UNIVERSITY
claims they are not entitled on the grounds that the break is
not an integral part of the school year and there were no actual
services rendered during the break.
During AY 1981-82, UNIVERSITY was authorized by the Ministry
of Education and Culture to collect a 15% increase of tuition
fees. UNION members demanded a salary increase to be taken
from 60% of the incremental proceeds. UNIVERSITY refused,
though it did grant a 5.86% salary increase during the
pendency of the proceedings.
Some UNION members were also given extra loads to handle in
the said school year but were unable to teach on 21 September
1981 due to said day being proclaimed a working holiday by
the President. Those with teaching loads claimed they were not
paid salaries while UNIVERSITY claimed they were paid.
The case does not disclose how the lower tribunals ruled.
ISSUES-HELD-RATIO
WON UNION members are entitled to ECOLA during the
sembreak: YES
Presidential Decrees providing for ECOLA (Nos. 1614,

1634, 1678, and 1713) provide that employees shall
be paid monthly allowance if they incur no absences
such that absence without pay shall result in
deductions in the allowance while leave with pay will
not.
The sembreak, being in the nature of a work

interruption beyond the employees control, cannot be
considered as absences within the meaning of the law.
The no work, no pay principle does not apply here as

this contemplates a situation where the employees
voluntarily absent themselves. In this case, UNION
member faculty do not voluntarily absent themselves
but re constrained to take mandatory leave from work.
UNIVERSITY contends that fact receiving salary, as

UNION members in fact did during the sembreak,
should not be basis for recovery of ECOLA. The Court
disagreed, citing Section 5 of the IRRs for Wage Order
No. 1 which provides that all covered employees are
entitled to daily living allowance when paid their basic
wage. Hence, there is the principle of no pay, no
ECOLA the converse of which is applicable in the
present case.
The payment of full wages during sembreak is a tacit

recognition that teachers are nevertheless, burdened
with work consisting of papers to correct, students to
evaluate, deadlines to meet, and grades to submit.
Teachers must keep abreast of developments,
Furthermore,
applying
the
Omnibus
Rules
Implementing the Labor Code, the time during which
the employee is inactive by reason of work
interruption is considered time worked if the internal is
too brief to be utilized effectively and gainfully for the
employees own interest.
WON 60% of proceeds are to be devoted to salary increase:

YES
The Court here is called to interpret Section 3 of PD

451, to wit:
SEC. 3. Limitations. - The increase in tuition or other school
fees or other charges as well as the new fees or charges
authorized under the next preceding section shall be subject to
the following conditions:
a) That no increase in tuition or other school fees or charges
shall be approved unless sixty (60%) per centum of the
proceeds is allocated for increase in salaries or wages of the
members of the faculty and all other employees of the school
concerned, and the balance for institutional development,
student assistance and extension services, and return to
investments: Provided, That in no case shall the return to
investments exceed twelve (12%) per centum of the
incremental proceeds; x x x "
The Court had earlier ruled in University of the East v.

UE Faculty Association that the increase in salaries or
wages shall not include allowances and benefits which
may be taken from the return on investment. Return
on investment is fixed at a maximum of 12% but
without any minimum.
UNIVERSITY contends that this earlier decision

disregards the spirit of the law as the PDs whereas
clauses make references to salary and other
benefits, allegedly implying that the latter is included
in the former. The Court disregarded this saying that it
is an elementary principle of statutory construction
that the whereas clauses cannot prevail over the
statements in the law itself.
The law is clear that the 60% incremental proceeds shall be
devoted entirely to increases in basic salary. To charge other
benefits to these proceeds would reduce the increase in basic
salary intended to help the teachers.
The Court is not guilty of usurpation of legislative

functions as it merely interpreted the meaning of the
law within its provisions. The ruling in University of the
East was merely to answer the query of where to
charge the said benefits.
WON payment of salary for 21 September 1981 was proven by
substantial evidence: YES
As found by respondent NLRC, the faculty members

have been paid for the extra loads. This is a question
of fact within the competence of the NLRC to pass
upon.
Assuming that these have not been paid, faculty

members are not entitled thereto applying the no
work, no pay principle. These are not regular loads
for which faculty members are paid regular monthly
salaries regardless of working days or hours. These
are extra loads which should only be pad when work is
actually performed. Since there was no work on 21
September 1981, faculty members should not be
granted extra wages for that day.
Petition is GRANTED. UNIVERSITY ordered to pay ECOLA and
undistributed balance 60% incremental proceeds as salary
increases. NLRC decision SUSTAINED in denying payment of
salary for 21 September.
Archilles Manufacturing v NLRC
G.R. No. 107225, June 2, 1995, J. Bellosillo
Digest prepared by Leigh
FACTS:
Private respondents Geronimo Manuel, Arnulfo Diaz,

Jaime Carunungan and Benjamin Rindon were
employed as laborers by Acrchilles in its steel factory
in Bulacan. Their daily wage was P96.00
Archilles had a bunkhouse in the work area, which
served as a rest area for its workers. The workers
relatives used to be able to stay in the bunkhouse, but
due to a mauling incident, it was prohibited by the
company.
Despite the prohibition, the private respondents

continued to bring their families to the bunkhouse
o
This caused annoyance and discomfort to the
other workers
Archilles ordered them to remove their families from

the bunkhouse and explain their violation of the rule
o
They got their families out, but failed to give
an explanation, as was required
o
Instead, they absented themselves from May
14 18, 1990
Their services were terminated by Archilles on May 18,

1990, for abandonment and violation of company
rules regarding the use of the bunkhouse
A complaint for illegal dismissal was filed

o
Labor
Arbiter:
Respondents
illegally
dismissed. Ordered reinstatement, payment
of backwages, proportionate 13th month pay
for 1990 and attorneys fees
o
Archilles appealed
Pending
appeal,
the
private
respondents filed with the NLRC a
motion for the issuance of a writ of
execution
for
their
immediate
reinstatement (physically, or in the
company payroll)
This
was
opposed
by
Archilles
This motion was not acted

upon by the NLRC, so
another similar motion was
filed.
Both
remained
unresolved
o
NLRC: Overturned LA decision. Respondents
were validly dismissed because they willfully
disobeyed a lawful order of their employer
requiring them to explain why they violated
the company rule
Ordered
payment
of
withheld
salaries
(payroll
reinstatement,
instead of physical reinstatement)
from
the
time
the
private
respondents filed their motion for
writ
of
execution,
until
the
promulgation of the NLRC decision,
because the order of the LA was
immediately executory even while
pending appeal.
Ordered payment of proportionate

13th month pay for 1990 and
attorneys fees
Petition filed by Archilles for the annulment for the

decision of the NLRC
ISSUES/HELD/RATIO:
W/N a writ of execution is still necessary to enforce the labor
arbiters order of immediate reinstatement, pending appeal
YES
A writ of execution is still necessary to enforce the

Labor Arbiters order of immediate reinstatement even
while pending appeal
An order of reinstatement is immediately executory,

but it doesnt follow that it is self executory. There
must be a writ of execution which may be issued motu
propio or on motion of an interested party
(Art. 224 Labor Code, Par 2, Sec 1, Rule XVIII of the New Rules
of Procedure of the NLRC)
In the absence of an order for the issuance of the writ

of execution on the reinstatement aspect of the
decision, the petitioner was under no legal obligation
to admit back to work the private respondents
The employer has the option whether to physically

reinstate the employee or to just reinstate him/her in
the payroll
IN THIS CASE: No opportunity for Archilles to exercise

their option to choose between physical reinstatement
or payroll reinstatement, because there was no writ of

execution issued by the NLRC. Their motion for a writ
of execution was never resolved, and they have been
deemed to have abandoned their motions because
they never exerted efforts to have it resolved.
W/N dismissal for cause results in the forfeiture of the
employees right to 13th month pay NO
PD
851
(Revised
Guidelines
on
the
implementation of the 13th month pay law)
o
An employee who has resigned or was
terminated at any time before payment
of the 13th month pay is entitled to this
benefit, in proportion to the length of
time he worked during the year.
o
It is reckoned from the time he started
working during the calendar year, up to
the time of his resignation/termination
o
The payment of 13th month pay may be
demanded by the employee upon the
cessation of the employee-employer
relationship
IRR of PD 851, Sec 4

o
Employers shall pay their employees the
13th month pay not later than the 24 th of
December of every year, provided they
have worked for at least 1 month during
the calendar year
13th month
pay is a statutory benefit
automatically vested in an employee who has
worked for at least 1 month during the calendar
year
This benefit cannot be lost or forfeited for any

reason
W/N the award of attorneys fees is proper in the instant case
NO
Attorneys fees only assessed in cased of unlawful

withholding of wages
Archilles was not guilty of unlawfully withholding the

salaries, so this award is baseless
PETITION PARTIALLY GRANTED.
Jose Songco, Romeo Cipres, & Amanco Manuel v NLRC,
Labor Arbiter Flavio Aguas, F.E. Zuellig (M) Inc.
23 Mar 1990; Medialdea, J.
FACTS
1.
2.
3.
4.
5.
Petitioners Songco et al. are employees in the sales

force of respondent Zuellig receiving at least P400 per
month plus commissions on every sale they made.
Zuellig filed with the Dept. of Labor an application for
clearance to terminate the services of the petitioners
on the ground of retrenchment due to financial loss.
Petitioners opposed the application and alleged that
they were being dismissed because of their
membership in the union.
At the last hearing of the case, however, petitioners
manifested that they are no longer contesting their
dismissal. Both parties then agreed that the sole issue
to be resolved is the basis of the computation for
separation pay that must be given to each petitioner.
Arguments
PETITIONERS Songco et al.
Their basic salary, earned sales commissions, and allowance
should be added together to come up with the legal amount o
separation pay due them.
Art. 97 (f) of the Labor Code:

(f) Wage remuneration or earnings, however designated
capable of being expressed in terms of money, whether fixed o
ascertained on a time, task, piece, or commission basis, which i
payable by an employer to an employee xxx for work done or to
be done, or for services rendered or to be rendered xxx
6.
For the determination of basis of separation pay, the

petitioner but also of her transportation and emergency
following stipulations were relied on by both parties:
living allowances
Art XIV of the Collective Bargaining Agreement between Zuellig
and F.E. Zuellig Employees Association (of which petitioners
2. WON earned sales commissions should be included
were members):
in the monthly salary of petitioners for the
computation of their separation pay
Collective
Bargaining
Agreement Art. 284, Labor Code
Yes, earnedofsales
commissions should be included.
between Zuellig and F.E. Zuellig personnel. The termination
employment
installation
There is actually
no ambiguity among LC 97(f),
Employees Association (of which of any employee due to the
of
petitioners were members)
labor-saving
devices,
redundancy,
Art
XIV of the CBA, LC 284, and Sec 9(b) and Sec
Art XIV Retirement Gratuity
retrenchment to prevent losses,
other
10 and
of the
IRR.
Sec. 1 (a). Any employee, who is similar causes, shall entitle
employee wage,
the
Salary,
and
pay
are
separated from employment due to old affected thereby to separationsynonymous
pay. xxx In and carry the fundamental idea
age, sickness, death or permanent lay-off case of retrenchment to prevent
losses
to mean
reward/ compensation for services.
not due to the fault of said employee, and other similar causes,
SALARY (Latin salarium or sal)
shall receive from the company a pay shall be equivalent to Recompense
or consideration made to a
retirement gratuity in an amount or at least month for every person
year of for his
equivalent to 1 month salary per year of service, whichever is higher
pains or industry in another mans business
service. One month of salary as used in at least 6 months shall be considered 1
this
paragraph
shall
be
deemed whole year.
Even if commissions were indeed incentives to encourage
equivalent to the salary at date of
employees to work harder, these commissions are still direct
retirement. Years of service shall be
remunerations for services rendered in favor of Zuellig which
deemed equivalent to total service
contributed to the latters profit.
credits, a fraction of at least 6 months
being considered 1 year, including
COMMISSION recompense, compensation or reward of an
probationary employment.
agent, salesman, executor, trustee, receiver, factor, broker, or
bailee, when the same is calculated as percentage on the
7. LA rendered decision ordering Zuellig to pay Songco
amount of his transactions or on the profit of the principal
et al. separation pay equivalent to their one month
salary for every year of service they worked in the
To hold that commissions are not salaries would be tantamount
company, commissions, allowances, etc. are not
to saying that those salesman who do not receive basic salary
included.
but depend on commissions alone, are working under an
LAs reasoning: The term salary in the concerned provisions
employer-employee relationship without any wage, and are
was intentionally used to express the intent of the framers that
therefore not entitled to separation pay upon the termination of
for purposes of separation pay, they mean to be specifically
their employment. This would also be contrary to the purpose
referring to salary only.
of separation pay, which is to alleviate the difficulties which
Definition of wage in LC 97(f) is a

confront a dismissed employee.
general definition and had no
indication that commission is part
Lastly, it must always be kept in mind that all doubts in the
of salary.
interpretation and implementation of labor laws should be
Sec 10, IRR states that the basis of

resolved in favor of labor (Art 4, Labor Code).
termination is the latest salary
rates
Petition is granted. NLRC decision is modified to include
LC 284 and the Implementing Rules

allowances and commissions in the separation pay of
Songco and Manuel. Case further remanded to LA for
invariably used monthly pay or
proper computation of separation pay.
monthly salary rates
8. NLRC affirmed LA decision.
NLRCs reasoning: Wage was used in a generic sense, which
Boie-Takeda v. De la Serna
is the basic wage rate to be ascertained on a time, task, piece,
G.R. No. 92174; 10 December 1993; Narvasa, C.J.
or commission basis or other method of calculating the same. It
Digest prepared by Glenn Agbayani
does not mean that commission, allowances, or analogous
income necessarily forms part of the employees salary
Doctrine:
because to do so would lead to a sweeping situation in which
Commissions earned by an employee is not part of the basic or
emergency living allowance, 13 th month pay, overtime and
regular wage and therefore NOT included in the computation of
premium pay may be insisted by the employees as part of their
13th month pay. Only the basic or regular wage is included in
salaries as well.
the computation.
9. Hence, the present petition by Songco et al. (Note:
Pending resolution of this case, Cipres filed Notice of
(From previous class discussion)
Voluntary Abandonment and Withdrawal of Petition
Commissions earned by sales persons are considered part of
because he was already satisfied and had already
their wages because it is judicial notice that the nature of their
received
his separation pay. Court granted and
work provides commissions in their transactions as
dismissed the petition as to him.)
remunerations (Songco v NLRC). In this case, the commissions
earned by the petitioners are not counted because the nature
ISSUES, RESOLUTION, and RATIO
of their work (medical representatives concerned with
1. WON allowances should be included in the monthly
product
promotions)
customarily
does
not
include
salary of petitioners for the computation of their
commissions. In fact, they usually receive a fixed basic salary
separation pay
and their commissions merely serve as additional incentives.
Yes, allowances should be included.
This had been resolved by the Court in

I. Facts
several previous cases, the most notable would
In these two consolidated petitions, employers Boiebe the Courts pronouncement in Santos v NLRC
Takeda (Medical Representatives) and Philippine Fuji
(reiterated in Soriano v NLRC and
Planters
Xerox impute grave abuse of discretion to respondent
Products, Inc. v NLRC):
DOLE officials in including commissions received
in the computation of back wages and separation pay,
by their employees in the computation of 13th
account must be taken not only of the basic salary of
month pay.
DOLE conducted routine inspections in the premises of

Boie and Fuji Xerox. DOLE found that they had not
been including the commissions earned by its
employees in the computation of their 13th month pay.
Boie-Takeda argues that the law only speaks of regular
or basic salary in the computation of 13 th month pay
and excludes all other remunerations which are not
part of the basic salary. It argues that commissions
cannot be defined as regular in nature because if no
sales are made by its employee, no commission is
received.
Respondent DOLE officials ordered Boie and Fuji Xerox
to
effect
restitution
and
correction
of the
underpayment of 13th month pay. The basis for giving
such order is par. 2, Section 5(a) of the Revised
Guidelines on the Implementation of 13th Month
Pay. The provision says that employees who are paid
on a fixed or guaranteed wage plus commission are
also entitled to the mandated 13th month pay based
on their total earnings during the calendar year, i.e.
on both their fixed or guaranteed wage and
commission.
Petitioners appealed to the Supreme Court alleging
grave abuse of discretion on the part of respondent
DOLE officials in giving effect to said Section 5 of the
Revised Guidelines.
Development of laws regarding 13th month pay mentioned in

the case
II. Issue
WON commissions earned are included in the computation of
13th month pay - NO.
III. Held
Par. 2, Section 5(a) of the Revised Guidelines on the
Implementation of the 13th Month Pay Law is declared null and
void.
IV. Ratio
Commission earned is excluded from computation of 13th
month pay
Only the basic salary is included in the computation of

13th month pay. In the Rules and Regulations
Implementing PD 851, thirteenth month pay shall
mean 1/12 of the BASIC SALARY of an employee within
a calendar year.
In remunerative schemes consisting of a fixed or
guaranteed wage plus commission, the fixed or
guaranteed wage is the BASIC SALARY because this is
what the employee receives for a standard work
period. Commissions are given for extra efforts
exerted in consummating sales or other related
transactions; they are ADDITIONAL PAY and do not
form part of the basic salary.
Par. 2 Sec. 5(a), Revised Guidelines on the Implementation of

PD 851 is null and void
The said provision, in including commissions in the

computation of 13th month pay, unduly expanded the
concept of basic salary as defined in PD 851.
Implementing rules cannot add to or detract from the
provisions of the law it is designated to implement.
The DOLE committed grave abuse of discretion in
giving effect to such provision.
Other remunerations excluded from computation of 13 th month

pay
The Court mentioned several kinds of remunerations

and earnings which are not part of the basic salary
and hence not included in the computation of 13 th
month pay. The Court in San Miguel v. Inciong clarified
the coverage of basic salary as used in PD 851 (13 th

Month Pay Law). In that case, the Court said that
under the IRR of PD 851, the following are NOT
deemed part of basic salary:
o
cost-of-living allowances
o
profit-sharing payments
o
all allowances and monetary benefits which
are not considered or integrated as part of
the basic salary of the employee
Under the Supplementary Rules and Regulations
Implementing PD 851, overtime pay, earnings, and
other remunerations are excluded as part of the basic
salary and in the computation of 13th month pay.
Earnings and other remunerations include payments
for sick, vacation, or maternity leaves, premium for
works performed on rest days and special holidays,
pays for regular holidays, and night differentials.
When PD 851 (13th Month Pay Law) was enacted, only

employees who receive a basic salary of NOT MORE
THAN 1,000 a month are entitled to 13th month pay.
President Cory Aquino issued Memorandum Order 28
which removed the salary ceiling of 1,000 a month set
by PD 851. Hence, all rank-and-file employees are
entitled to 13th month pay.
Then came the assailed Revised Guidelines on the
Implementation of the 13th Month Pay Law. Par. 2, Sec.
5(a) included both fixed or guaranteed wage and
commission in the computation of 13th Month Pay.
Philippine Duplicators Inc. v. NLRC

G.R. No. 110068; February 15, 1995; Feliciano, J.
Digest prepared by Maggy Gan
Facts and Issues are taken from Ians digest. Focus on the
explanation of BONUS.
I.
Facts (taken from Ians digest)
Petitioner company is a domestic corporation engaged in the
distribution of foreign-made copying machines and related
consumables. It employs salesmen who are paid a fixed or
guaranteed salary plus commissions. The commissions are
computed based on the selling price of the duplicating
machines sold by the salesmen.
When PD 851 requiring employers to pay 13th month pay to
employees along with its IRR and other memos of the SOLE and
the Minister of Labor and Employment, the salesmen union of
the company demanded payment of the 13th month pay to
be
computed
based
on
the
total
of
their
fixed/guaranteed money plus the sales commissions
they get. The Court decided for the union and held that sales
commissions are part of the basic salary of the salesman hence
their 13th month pay is 1/12 of their basic salary (fixed salary
plus sales commission). Petitioner filed an MR on the SC
decision but this was denied with finality on Dec. 15, 1994.
On Dec. 10, 1994 the Court decided the consolidated case of
Boie-Takeda and Philippine Fuji and held that the commissions
should not be included in the definition of basic salary for the
computation of the 13th month pay. Because of this decision,
herein petitioner company filed on January 14, 17, 1994 a
motion for leave to admit 2nd MR and the 2nd MR invoking the
Boie decision. Petition argued that the decision in Boie-Takeda
is "directly opposite or contrary to" the decision in Philippine
Duplicators.
II.
Issue/Held (taken from Ians digest)
WON sales commissions of salesmen of petitioner company are
included in the definition of basic salary for the purpose of
determining 13th month pay.
Yes. Sales commission of salesmen should be included. The

doctrines in the two cases are not directly opposite but they
actually co-exist. Petitioner company is liable to pay 13 th month
pay using with the basic salary computed as the fixed or
guaranteed wage plus the sales commissions.
III.
Ratio
-
Boie and Philippine Duplicators present different

factual
scenarios
although
the
same
word
commissions was used or invoked
Here, the sales commission earned by sales men who
make or close a sale constitute part of the
compensation or remuneration paid to sales men for
serving as salesmen, and hence part of the wage or
salary of petitioners salesmen.
Significant to note that the fixed or guaranteed protin
of the wages paid to the salesmen represented only
15% to 30% of an employees total earnings per year
[Remember what maam emphasized in class:
JUDICIAL NOTICE that the salesmens commission is
the very source or an integral part of their salary]
In Boie, the so called commissions paid to medical

representatives were excluded from the term basic
salary because these were paid as productivity
bonuses
These additional payments partook the nature of

profit-sharing bonuses
Medical representatives are not salesmen; they

merely promote the pharmaceutical products or
medical services of their employer
Definition and Characteristics of BONUS
An amount granted and paid ex gratia to the
employee for his industry and loyalty w/c
contributed to the success of the employers
business and made possible the realization of profits
Its payment constitutes an enlightened generosity

and self-interest on the part of the employer
NOT a demandable or enforceable obligation (NONDEMANDABLE CHARACTER)

o
No right to demand as a matter of right
o
Something given in addition to what is
ordinarily received by or strictly due the
recipient
o
Basically a management prerogative which
cannot be forced upon the employer
TEST to determine if Bonus forms part of wages

PART of wages:
o
if it is an additional compensation which
the employer promised and agreed to give
without any conditions imposed for its
payment, such as success of business or
greater production or output
NOT part of wages:

o
if it is paid only if profits are realized or a
certain amount of productivity achieved
o
if it is paid on the basis of the amount of
actual work accomplished
If an employer cant be compelled to pay a

productivity bonus to his employees, it should follow
that such productivity bonus, when given, should not
be deemed to fall w/in the basic salary of employees
when time comes to compute 13 th month pay. So the
court in Boie was correct in not including the
commissions as part of basic salary in computing
for 13th month pay.
Comparison of
Commissions
Productivity
Bonuses
v.
Sales
Similarity: both may have an incentive effect

Differences
Productivity Bonuses
Generally tied to the productivity or profit
generation of the employer
Not directly dependent on the extent on the
extent an individual employee exerts himself
Something extra for which no specific additional
services are rendered by any particular employee
Not legally demandable absent a contractual
undertaking to pay it
INTERCONTINENTAL vs. PANGANIBAN

G.R. No. 151407; Feb. 6, 2007; Austria-Martinez.
Digest by Ian
Facts: The employee in this case is Ireneo Panganiban
(respondent). He was an Assistant General Manager of
Intercontinental Broadcasting Corp. (IBC) (petitioner) from May
1986 until his preventive suspension on Aug. 26, 1988.
Sept. 2, 1988- he resigned
April 12, 1989- he filed a civil case (Civil Case 1)

before the QC RTC against member of the Board of
Administrators (BOA) of petitioner.
-he alleged, among others, the non-payment of his unpaid
commissions.
A motion to dismiss the case was filed by Joselito

Santiago, one of the members of the board, for lack of
jurisdiction because the case was a labor money
claim. This was denied by the RTC per orders dated
Oct. 19, 1990 and Nov. 23, 1990. Santiago filed a
petition for certiorari with the CA.
Oct.
29, 1991- CA dismissed Civil Case 1.
Granted Santiagos petition for lack of jurisdiction and
set aside RTCs Orders.
July 1992- BOA elected Panganiban as VP for

Marketing but he resigned in April 1993.
January 21, 1993- Express acknowledgment of debt

by petitioners in a letter sent by Pio S. Kaimo, Jr., Audit
Group Head addressed to IBC Gen. Manager Ceferino
M. Basilio
July 24, 1996- Panganiban filed before LA complaint

for illegal dismissal, separation pay, retirement
benefits, unpaid commissions, and damages.
Sept. 23, 1997- LA ruled in favor of Panganiban and

ordered reinstatement with full backwages, and the
payment of his unpaid commission in the amount
of P2,521,769.77, damages and attorney's fees.
Petitioner appealed to the NLRC but it failed to post a

bond so the appeal was dismissed on Feb. 26, 1998, in
a Decision that was deemed final and executory.
Pet filed MR of NLRCs dismissal but this was denied

on March 25, 1998.
Petitioner then filed a petition with SC but the same

was referred to the CA in view of a recent court
decisions (St. Martin case).
July 30, 1999- CA rendered decision granting

petition. Annulled the NLRC and LA decisions holding
for Panganiban and held that the claims for
reinstatement, backwages and benefits during his
1986-1988 employment have prescribed because
money claims have a 3-year prescriptive period under
Art. 2911
Complaint in connection with
his appointment as VP for
Marketing
is
within
the
jurisdiction of SEC
1 "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 be forever barred."
Sales C
Intimate
extent o
Paid up
salesma
A percen
and op
salesma
Panganiban filed MR. CA rendered amended decision

on Aug. 21, 2001 denying MR but ordered petitioner
to pay Panganiban the P2.5M as unpaid commissions
(minus the amounts already paid to him by petitioner
in relation thereto)
The CA ruled that respondent's money claim had not yet
prescribed, as it was interrupted in two instances: first, by the
filing of Civil Case No. 1 by respondent with the RTC;
and second, by the express acknowledgment of the debt by
petitioners.
Petitioner: a.) Filing of Civil Case 1 on April 12, 1989

did not interrupt the running of the prescriptive period
because the RTC was not a proper judicial forum
(should be LA) for the collection of respondent's claim
for unpaid commissions; and
b.) Pet did not acknowledge Panganibans claim through the
letter sent by its Audit Group head because the amount in said
letter is different from respondents claim.
Issue: WON Panganibans claim of unpaid commissions
amounting to P2.5M has already prescribed.
January 29, 2008

AUSTRIA-MARTINEZ, J
Facts:
Held: Yes. CA amended decision (Aug. 21, 2001) annulled and

the July 30, 1999 CA decision is reinstated.
Ratio:
The applicable law is Article 291 of the Labor Code,

the term "money claims" covers all money claims
arising from an employer-employee relation. And
under Art. 217, the LA has original and exclusive
jurisdiction over cases of claims with reinstatement or
those involving an amount exceeding five thousand
pesos (P5,000.00) regardless of whether accompanied
with a claim for reinstatement.
Like other causes of action, the prescriptive period for

money claims is subject to interruption, and in the
absence of an equivalent Labor Code provision for
determining whether the said period may be
interrupted, Article 1155 of the Civil Code may be
applied which states that prescription of an action is
interrupted by (a) the filing of an action, (b) a written
extrajudicial demand by the creditor, and (c) a written
acknowledgment of the debt by the debtor.
Hence, while the filing of Civil Case 1 could have interrupted
the running of the three-year prescriptive period, its
consequent dismissal by the due to lack of jurisdiction
effectively canceled the tolling of the prescriptive period within
which to file his money claim, leaving Panganiban 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 Civil Case 1, Panganibans
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.1avvphi1.net
With regard to the CA's perceived acknowledgment of
Panganiban's claim by petitioner, it should be pointed out that
whatever acknowledgment made by petitioner pertains only to
the amount recognized therein or P105,573.88, and not the
entire P2,521,769.77 being claimed by respondent.
In any event, the foregoing observation is immaterial
considering that such written acknowledgment, whether of the
entire amount or merely a portion thereof, made by petitioner
in its letter dated January 21, 1993 does not alter the fact that
respondent's claim had already prescribed as of September
1991, and any discussion by the Court on the effect of such
acknowledgment will merely be surplusage or obiter dicta.
LETRAN
CALAMBA
FACULTY
and
EMPLOYEES
ASSOCIATION,
petitioner,
vs.
NATIONAL
LABOR
RELATIONS COMMISSION and COLEGIO DE SANJUAN DE
LETRAN CALAMBA, INC., respondent.
Oct 8, 1992: Letran Calamba Faculty and Employees

Association (petitioner) filed with Regional Arbitration
Branch No. IV of the National Labor Relations
Commission (NLRC) a Complaint against Colegio de
San Juan de Letran, Calamba, Inc. (respondent) for
collection of various monetary claims due its members
o
Position Paper
3) In the computation of the

thirteenth
month
pay
of
its
academic personnel, respondent
does not include as basis therefor
their compensation for overloads. It
only takes into account the pay the
faculty members receive for their
teaching
loads
not
exceeding
eighteen (18) units. The teaching
overloads are rendered within eight
(8) hours a day
4) Respondent has not paid the

wage increases required by Wage
Order No. 5 to its employees who
qualify thereunder.
5) Respondent has not followed the

formula
prescribed
by
DECS
Memorandum Circular No. 2 dated
March 10, 1989 in the computation
of the compensation per unit of
excess load or overload of faculty
members. This has resulted in the
diminution of the compensation of
faculty members.
7) Respondent has not paid to its

employees the balances of seventy
(70%) percent of the tuition fee
increases for the years 1990, 1991
and 1992.
8) Respondent has not also paid its

employees the holiday pay for the
ten (10) regular holidays as provided
for in Article 94 of the Labor Code
Labor Arbiter
o
Money claims cases DISMISSED for lack of
merit
NLRC
o
Dismissed
CA
o
Dismissed
Issue/s:
W/N the overloads of the faculty members should be included
in the computation of the 13 th month pay (NO, petition without
merit)
Held:
As to the inclusion of the overloads of respondent's faculty
members in the computation of their 13th-month pay
Petitioner
o
under the Revised Guidelines on the
Implementation of the 13th-Month Pay Law,
promulgated by the Secretary of Labor on
Nov 16, 1987, the basic pay of an employee
includes remunerations or earnings paid by
his employer for services rendered, and that
excluded therefrom are the cash equivalents
of unused vacation and sick leave credits,
overtime, premium, night differential, holiday
pay and cost-of-living allowances. Petitioner
claims that since the pay for excess loads or
overloads does not fall under any of the
enumerated exclusions and considering that
the said overloads are being performed
within the normal working period of eight

hours a day, it only follows that the overloads
should be included in the computation of the
faculty members' 13th-month pay
Opinion of the Bureau of Working Conditions
of the DOLE: payment of teaching overload
performed within eight hours of work a day
shall be considered in the computation of the
13th-month pay. (THIS WAS DISCUSSED BY
THE SC, PORTIONS BELOW ARE AS
DISCUSSED BY SC)
if overload is performed within a

teacher's normal eight-hour work
per day, the remuneration that the
teacher will get from the additional
teaching load will form part of the
basic wage
Affirmed by the Explanatory Bulletin

on the Inclusion of Teachers'
Overload Pay in the 13th-Month Pay
Determination issued by the DOLE
on December 3, 1993 under then
Acting DOLE Secretary Cresenciano
B. Trajano
1. Basis of the 13thmonth pay computation

o
Revised
Implementing
Guidelines of the
13th-Month
Pay
Law (P.D. 851, as
amended)
provides that an
employee shall be
entitled to not less
than 1/12 of the
total basic salary
earned within a
calendar year for
the purpose of
computing
such
entitlement.
The
basic wage of an
employee
shall
include:
o
"x
x
x
all
remunerations or
earnings paid by
his employer for
services rendered
but do not include
allowances
or
monetary benefits
which
are
not
considered
or
integrated as part
of the regular or
basic
salary,
such as the cash
equivalent
of
unused
vacation
and
sick
leave
credits, overtime,
premium,
night
differential
and
holiday pay, and
cost-of-living
allowances.
However,
these
salary-related
benefits should be
included as part of
the basic salary in
the computation of
the 13th month
pay if by individual
or
collective
agreement,
company practice
or
policy,
the
same are treated
as part of the
basic salary of the
employees."
o
Basic
wage
is
defined by the
Implementing
Rules of RA 6727
as follows: "Basic
Wage" means all
remuneration
or
earnings paid by
an employer to a
worker for services
rendered
on
normal
working
days and hours
but
does
not
include cost of
living allowances,
13th-month pay or
other
monetary
benefits which are
not considered as
part
of
or
integrated into the
regular salary of
the workers
o
The
foregoing
definition
was
based on Article
83 of the Labor
Code
which
provides that "the
normal hours of
work
of
any
employee shall not
exceed eight (8)
hours a day." This
means that the
basic salary of an
employee for the
purpose
of
computing
the
13th-month
pay
shall include all
remunerations or
earnings paid by
an employer for
services rendered
during
normal
working hours.
2. Overload work/pay
o
Overload on the
other hand means
"the load in excess
of the normal load
of private school
teachers
as
prescribed by the
Department
of
Education, Culture
and Sports (DECS)
or the policies,
rules
and
standards
of
particular private
schools."
In
recognition of the
peculiarities of the
teaching
profession,
existing DECS and
School Policies and
Regulations
for
different levels of
instructions
prescribe a regular
teaching load, the
total
actual
teaching
or
classroom hours of
which a teacher
can
generally
perform in less
than
eight
(8)
hours per working
day.
This
is
because teaching
may also require
the teacher to do
additional
work
such as handling
an advisory class,
preparation
of
lesson plans and
teaching
aids,
evaluation
of
students and other
related activities.
Where, however a
teacher
is
engaged
to
undertake actual
additional
teaching
work
after
completing
his/her
regular
teaching
load,
such
additional
work is generally
referred
to
as
overload. In short,
additional work in
excess
of
the
regular
teaching
load is overload
work.
Regular
teaching
load
and
overload
work,
if
any,
may constitute a
teacher's
working day.
Where a teacher
is required to
perform
such
overload within
the
eight
(8)
hours
normal
working
day,
such
overload
compensation
shall
be
considered part
of the basic pay
for the purpose
of
computing
the
teacher's
13th-month pay.
"Overload work" is
sometimes
misunderstood as
synonymous
to
"overtime
work"
as this term is
used
and
understood in the
Labor Code. These
two terms are not
the same because
overtime work is
work rendered in
excess of normal
working hours of
eight in a day (Art.
87, Labor Code).
Considering
that
overload
work
may be performed
either within or
outside
eight
hours in a day,
overload
work
may or may not be
overtime work.
it is the position of this

Department that all basic
salary/wage
representing
payments earned for actual
work performed during or
within the eight hours in a
day, including payments for
overload work within eight
hours, form part of basic
wage and therefore are to
be
included
in
the
computation of 13th-month
pay mandated by PD 851,
as amended
o
DOLE-DECS-CHED-TESDA Order No. 02,
Series of 1996 (DOLE Order) which was relied
upon by the LA and the NLRC in their
respective Decisions cannot be applied to the
instant case because the DOLE Order was
issued long after the commencement of
petitioner's complaints for monetary claims;
that the prevailing rule at the time of the
commencement of petitioner's complaints
was to include compensations for overloads
in determining a faculty member's 13thmonth pay; that to give retroactive
application to the DOLE Order issued in 1996
is to deprive workers of benefits which have
become vested and is a clear violation of the
constitutional mandate on protection of
labor; and that, in any case, all doubts in the
implementation and interpretation of labor
laws, including implementing rules and
regulations, should be resolved in favor of
labor
Respondent
o
DOLE Order is an administrative regulation
which interprets the 13th-Month Pay Law
(P.D. No. 851) and, as such, it is mandatory
for the LA to apply the same to the present
case
o
Legal Services Office of the DOLE issued an
opinion dated March 4, 1992: remunerations
for teaching in excess of the regular load,
which includes overload pay for work
performed within an eight-hour work day,
may not be included as part of the basic
salary in the computation of the 13th-month
pay unless this has been included by
company practice or policy; that petitioner
intentionally omitted any reference to the
above-mentioned opinion of the Legal
Services Office of the DOLE because it is fatal
to its cause; and that the DOLE Order is an
affirmation of the opinion rendered by the
said Office of the DOLE

(THIS WAS
DISCUSSED BY THE SC, PORTIONS BELOW
ARE AS DISCUSSED BY SC)
2. In accordance with Article 83 of

the Labor Code of the Philippines, as
amended, the normal hours of work
of school academic personnel shall
not exceed eight (8) hours a day.
Any work done in addition to the
eight (8) hours daily work shall
constitute overtime work.
3. The normal hours of work of

teaching or academic personnel
shall be based on their normal or
regular teaching loads. Such normal
or regular teaching loads shall be in
accordance with the policies, rules
and standards prescribed by the
Department of Education, Culture
and Sports, the Commission on
Higher Education and the Technical
Education and Skills Development
Authority. Any teaching load in
excess of the normal or regular
teaching
load
shall
be
considered as overload. Overload
partakes of the nature of temporary
extra assignment and compensation
therefore shall be considered as an
overload honorarium if performed
within the 8-hour work period and
does not form part of the
regular or basic pay. Overload
performed beyond the eight-hour
daily work is overtime work
o
prior to the issuance of the DOLE Order, the
prevailing rule is to exclude excess teaching
load, which is akin to overtime, in the
computation of a teacher's basic salary and,
ultimately, in the computation of his 13thmonth pay
SC: Petition bereft of merit.
o
Rule: findings of the LA, when affirmed by the
NLRC and the CA, are binding on the
Supreme Court, unless patently erroneous
o
General rule is that administrative rulings
and circulars shall not be given retroactive
effect
petitioners claim that the DOLE

Order should not be made to apply
to the present case because said
Order was issued only in 1996,
approximately four years after the
present case was initiated before
the Regional Arbitration Branch of
the NLRC, is not without basis
o
Nevertheless, it is a settled rule that
when an administrative or executive
agency renders an opinion or issues a
statement of policy, it merely interprets
a
pre-existing
law
and
the
administrative interpretation is at best
advisory for it is the courts that finally
determine what the law means
o
CAB: while the DOLE Order may not be
applicable, the Court finds that overload pay
should be excluded from the computation of
the 13th-month pay of petitioner's members
o
It is decisive to determine what "basic salary"
includes and excludes
San Miguel Corporation v. Inciong
Under Presidential Decree

851 and its implementing
rules, the basic salary of an
employee is used as the
basis in the determination

of his 13th month pay. Any
compensations
or
remunerations which are
deemed not part of the
basic pay is excluded as
basis in the computation of
the mandatory bonus
Under
the
Rules
and
Regulations Implementing
Presidential Decree 851,
the
following
compensations are deemed
not part of the basic salary
o
c) All allowances
and
monetary
benefits which are
not considered or
integrated as part
of
the
regular
basic salary of the
employee at the
time
of
the
promulgation
of
the
Decree
on
December
16,
1975
Under a later set of
Supplementary Rules and
Presidential Decree 851
issued by the then Labor
Secretary
Blas
Ople,
overtime pay, earnings and
other remunerations are
excluded as part of the
basic salary and in the
computation of the 13thmonth pay
The exclusion of cost-ofliving allowances under
Presidential Decree 525
and Letter of Instruction
No. 174 and profit sharing
payments
indicate
the
intention to strip basic
salary of other payments
which
are
properly
considered
as
"fringe"
benefits.
Likewise,
the
catch-all
exclusionary
phrase "all allowances and
monetary benefits which
are not considered or
integrated as part of the
basic salary" shows also
the intention to strip basic
salary of any and all
additions which may be in
the form of allowances or
"fringe" benefits
Moreover,
the
Presidential Decree 851 is
even more emphatic in
declaring that earnings and
other remunerations which
are not part of the basic
salary shall not be included
in the computation of the
13th-month pay
While doubt may have
been created by the prior
Rules
and
Regulations
Implementing Presidential
Decree 851 which defines
basic salary to include all
remunerations or earnings
paid by an employer to an
employee, this cloud is
dissipated in the later and
more
controlling
Regulations
which
categorically, exclude from
the definition of basic
salary earnings and other
remunerations
paid
by
employer to an employee.
A cursory perusal of the
two sets of Rules indicates
that what has hitherto been
the subject of a broad
inclusion is now a subject
of broad exclusion. The
Regulations
cure
the
seeming tendency of the
former rules to include all
remunerations
and
earnings
within
the
definition of basic salar
The all-embracing phrase
"earnings
and
other
remunerations" which are
deemed not part of the
basic salary includes within
its meaning payments for
sick, vacation, or maternity
leaves, premium for works
performed on rest days and
special holidays, pay for
regular holidays and night
differentials. As such they
are deemed not part of the
basic salary and shall not
be
considered
in
the
computation of the 13thmonth pay. If they were not
so excluded, it is hard to
find any "earnings and
other
remunerations"
expressly excluded in the
computation of the 13thmonth
pay.
Then
the
exclusionary
provision
would prove to be idle and
with no purpose
conclusion
finds
strong
support under the Labor
Code of the Philippines
o
A 87: Overtime
work. Work may
be
performed
beyond eight (8)
hours
a
day
provided that the
employee is paid
for the overtime
work,
additional
compensation
equivalent to his
regular wage plus
at least twentyfive (25%) percent
thereof
overtime
pay is an
additional
compens
ation
other
than and
added to
the
regular
wage or
basic
salary, for
reason of
which
such
is
categoric
ally
excluded
from the
definition
of
basic
salary
under the
Suppleme
ntary
Rules and
Regulatio
ns
Implemen
ting
Presidenti
al Decree
851
A 93: c.) work
performed on any
special
holiday
shall be paid an
additional
compensation
of
at
least
thirty
percent (30%) of
the regular wage
of the employee
premium
for
special
holiday
which is
at
least
30%
of
the
regular
wage
is
an
additional
compens
ation
other
than and
added to
the
regular
wage or
basic
salary.
For
similar
reason it
shall not
be
considere
d in the
computat
ion of the
13th
-month
pay
In the same manner that payment for

overtime work and work performed
during special holidays is considered as
additional compensation apart and
distinct from an employee's regular
wage or basic salary, an overload pay,
owing to its very nature and definition,
may not be considered as part of a
teacher's regular or basic salary,
because it is being paid for additional
work performed in excess of the regular
teaching load
o
Peculiarity of an overload lies in the fact that
it may be performed within the normal eighthour working day. This is the only reason why
the DOLE, in its explanatory bulletin, finds it
proper to include a teacher's overload pay in
the determination of his or her 13th-month
pay. However, the DOLE loses sight of the
fact that even if it is performed within the
normal eight-hour working day, an overload
is still an additional or extra teaching work
which is performed after the regular teaching
load has been completed. Hence, any pay
given as compensation for such additional
work should be considered as extra and not
deemed as part of the regular or basic salary
o
Petitioner
failed
to
refute
private
respondent's contention that excess teaching
load is paid by the hour, while the regular
teaching load is being paid on a monthly
basis; and that the assignment of overload is
subject to the availability of teaching loads.
This only goes to show that overload pay is
not integrated with a teacher's basic salary
for his or her regular teaching load. In
addition, overload varies from one semester
to another, as it is dependent upon the
availability of extra teaching loads. As such,
it is not legally feasible to consider payments
for such overload as part of a teacher's
regular or basic salary. Verily, overload pay
may not be included as basis for determining
a teacher's 13th-month pay
Dispositive: Petition DENIED. CA AFFIRMED.
o
FRAMANLIS FARMS INC v MINISTER OF LABOR

G.R. No. 72616-17; March 8, 1989; Grino-Aquino, J.
Digest prepared by Jackie Canlas
FACTS: (wala talagang background story ito, diretso dun sa
mga complaint details)
18 employees of Framanlis Farms filed 2 labor

standard cases in the Regional Office of the Ministry of Labor in
Bacolod against their employer, alleging that in 1977-1979
they were not paid emergency cost of living allowance
(ECOLA) minimum wage, 13th month pay, holiday pay, and
service incentive leave pay. Payrolls even showed that women
workers were underpaid, as they were receiving an average
daily wage of P5.94, while men received P10.
Framanlis defense:
Not regular workers on the hacienda but were just

sacadas or pakyaw workers, who were hired seasonally to do
piece-work, hence they were not entitled to benefits
Living allowance shall be paid depending on total

assets or authorized capital stock of employer (whichever is
higher), and they applied for an exemption in 1977 (which was
not yet acted upon)
Re: 13th month pay substantially complied with

the law by giving their workers a yearly bonus and
other non-monetary benefits amounting to not less than
1/12 of their basic salary in the form of:
Weekly subsidy of choice of pork meat for only P9/kilo

and later increased to P11/kilo in Mar 1980, instead of the
market price of P10-P15/kilo;
Free choice of pork meat in May and Dec of every

year; and
Free light or electricity.
All of which were allegedly equivalent to the 13 th

month pay.
Asst. Regional Director directed Framanlis to pay

the deficiency in payment to female workers, and other
monetary benefits prayed for. 13th month pay for 1977 held
in abeyance due to application for exemption.
Upon appeal, Deputy Minister of Labor directed

Framanlist to also pay pakyaw workers for the same period in
days they worked for at least 8hrs and earned below P8.06
daily, their pay differentials, and 13th month pay for 19781979. 13th month pay for 1977 still held in abeyance.
Framanlis MR denied. Framanlis filed a petition for

certiorari.
ISSUE: WON Framanlis substitute payment of the 13 th
month pay were valid under the law NO
RATIO:
Under Sec. 3 of PD 851, benefits in the form of food,

free electricity, assuming they were given, were not proper
substitute for the 13th month pay required by law. Said
provision provides:
The term its equivalent as in used in par(c) shall include
Christmas bonus, mid-year bonus, profit-sharing bonuses
amounting to not less than 1/12 of the basic salary, but shall
not include cash and stock dividends, COLA, and all other
allowances regularly enjoyed by employees, as well as nonmonetary benefits.
Neither may year-end rewards for loyalty and service

be considered in lieu of the 13th month pay. Sec. 10 of the IRR
of PD 851 provides:
Nothing herein shall be construed to authorize any employer
to eliminate, or diminish in any way, supplements, or other
employee benefits or favourable practice being enjoyed by the
employee at the time of promulgation of this issuance.
Failure of Ministers decision to identify the pakyaw

and non-pakyaw workers does not render the decision invalid,
because these workers may be identified in the execution
proceedings.
Philippine Duplicators Inc. v. NLRC
G.R. No. 110068; February 15, 1995; Feliciano, J.
Digest prepared by Maggy Gan
Facts and Issues are taken from Ians digest. Focus on the
explanation of BONUS.
IV.
Facts (taken from Ians digest)
Petitioner company is a domestic corporation engaged in the
distribution of foreign-made copying machines and related
consumables. It employs salesmen who are paid a fixed or
guaranteed salary plus commissions. The commissions are
computed based on the selling price of the duplicating
machines sold by the salesmen.
When PD 851 requiring employers to pay 13th month pay to
employees along with its IRR and other memos of the SOLE and
the Minister of Labor and Employment, the salesmen union of
the company demanded payment of the 13th month pay to
be
computed
based
on
the
total
of
their
fixed/guaranteed money plus the sales commissions
they get. The Court decided for the union and held that sales
commissions are part of the basic salary of the salesman hence
their 13th month pay is 1/12 of their basic salary (fixed salary
plus sales commission). Petitioner filed an MR on the SC
decision but this was denied with finality on Dec. 15, 1994.
On Dec. 10, 1994 the Court decided the consolidated case of

Boie-Takeda and Philippine Fuji and held that the commissions
should not be included in the definition of basic salary for the
computation of the 13th month pay. Because of this decision,
herein petitioner company filed on January 14, 17, 1994 a
motion for leave to admit 2nd MR and the 2nd MR invoking the
Boie decision. Petition argued that the decision in Boie-Takeda
is "directly opposite or contrary to" the decision in Philippine
Duplicators.
V.
Issue/Held (taken from Ians digest)
WON sales commissions of salesmen of petitioner company are
included in the definition of basic salary for the purpose of
determining 13th month pay.
Yes. Sales commission of salesmen should be included. The
doctrines in the two cases are not directly opposite but they
actually co-exist. Petitioner company is liable to pay 13 th month
pay using with the basic salary computed as the fixed or
guaranteed wage plus the sales commissions.
VI.
Ratio
-
Boie and Philippine Duplicators present different

factual
scenarios
although
the
same
word
commissions was used or invoked
Here, the sales commission earned by sales men who
make or close a sale constitute part of the
compensation or remuneration paid to sales men for
serving as salesmen, and hence part of the wage or
salary of petitioners salesmen.
Significant to note that the fixed or guaranteed protin
of the wages paid to the salesmen represented only
15% to 30% of an employees total earnings per year
[Remember what maam emphasized in class:
JUDICIAL NOTICE that the salesmens commission is
the very source or an integral part of their salary]
In Boie, the so called commissions paid to medical

representatives were excluded from the term basic
salary because these were paid as productivity
bonuses
These additional payments partook the nature of

profit-sharing bonuses
Medical representatives are not salesmen; they

merely promote the pharmaceutical products or
medical services of their employer
Definition and Characteristics of BONUS
An amount granted and paid ex gratia to the
employee for his industry and loyalty w/c
contributed to the success of the employers
business and made possible the realization of profits
Its payment constitutes an enlightened generosity

and self-interest on the part of the employer
NOT a demandable or enforceable obligation (NONDEMANDABLE CHARACTER)

o
No right to demand as a matter of right
o
Something given in addition to what is
ordinarily received by or strictly due the
recipient
o
Basically a management prerogative which
cannot be forced upon the employer
TEST to determine if Bonus forms part of wages

PART of wages:
o
if it is an additional compensation which
the employer promised and agreed to give
without any conditions imposed for its
payment, such as success of business or
greater production or output
NOT part of wages:
o
o
if it is paid only if profits are realized or a

certain amount of productivity achieved
if it is paid on the basis of the amount of
actual work accomplished
If an employer cant be compelled to pay a

productivity bonus to his employees, it should follow
that such productivity bonus, when given, should not
be deemed to fall w/in the basic salary of employees
when time comes to compute 13 th month pay. So the
court in Boie was correct in not including the
commissions as part of basic salary in computing
for 13th month pay.
Comparison of Productivity Bonuses v. Sales

Commissions
Similarity: both may have an incentive effect
Differences
Productivity Bonuses
Generally tied to the productivity or profit
generation of the employer
Not directly dependent on the extent on the
extent an individual employee exerts himself
Something extra for which no specific additional
services are rendered by any particular employee
Not legally demandable absent a contractual
undertaking to pay it
Eastern Telecommunications Phil Inc v Eastern Telecoms

Employees Union
GR 185665; Feb 8, 2012; Mendoza J
FACTS:
Union filed a complaint with NLRC against ETPI for

refusing to pay the 14th, 15th, 16th month bonuses
granted by the Side Agreement of an existing CBA for
the period of 2001-2004
o
Side Agreement: Employment Related
Bonuses. The Company confirms that the
14th, 15th, 16th month bonuses (other than 13 th
month pay) are granted.
Company at first wanted to defer payment of these

bonuses, but the Union strongly opposed the
deferment and filed a preventive mediation complaint
with NCMB
o
At first, company agreed to defer and pay on
April 2004 but then subsequently reversed its
decision and wanted to resolve the issue
through compulsory arbitration. Hence, this
case.
Companys grounds:
o
Subject bonuses were not part of the legally
demandable wage and the grant was an act
of pure gratuity and generosity
o
Its an exercise of management prerogative
and dependent on the financial performance
and realization of profits
o
Due to unabated losses, the company chose
to discontinue the giving out of these
bonuses
Unions grounds:
o
Consistently and voluntarily been giving out
these benefits from 1975-2002. Even if it did
not realize any net profits
o
Ripened into company practice and could no
longer be unilaterally withdrawn
o
Expressly confirmed in the Side Agreement. A
contractual obligation
NLRC for Company but CA reversed

ISSUE: WON ETPI is liable to pay the bonuses? YES
RATIO:
A bonus becomes a demandable or enforceable

obligation when it is made part of the wage or salary
Sales C
Intimate
extent o
Paid up
salesma
A percen
and op
salesma
or compensation of the employee. (WON a bonus

forms part of wages depends upon the circumstances
and conditions of the payment. If it is additional
compensation which the employer promised and
agreed to give without any conditions imposed for its
payment, such as success of business or greater
production or output, then it is part of the wage. But if
it is paid only if profits are realized, it cannot be part
of the wage)
In this case:
o
The provision in the Side Agreement were
also found in 2 previous CBAs
o
The wording of the provision does not give
any qualification to the grant of the bonus
Company cannot rely on 1267 of CC (when service has
become so difficult as to be manifestly beyond the
contemplation of parties, the obligor may also be
released thereform in whole or in part) because the
parties of the contract must be presumed to have
assumed the risks of unfavourable developments.
Grant of bonus has ripened into company practice
Giving of bonuses cannot be peremptorily withdrawn
without violating Art. 100 of the LC (diminution of
benefits)
Phil. Telegraph and Telephone Co. (PT&T) v. NLRC and

Grace de Guzman
G.R. No. 118978; May 23, 1997; Regalado, J.
Digest prepared by Paolo Tamase
[Hindi ko na to mapaiikli. 1.5 hours ko na sinusubukan tong
paiksiin. Alam mo naman si Justice Regalado, obiter mania
pero kaya pinili yung case for the obiter. Pao]
A. Facts
1. GRACE de Guzman was hired as a reliever (a
temporary worker to replace a regular employee who
goes on leave) thrice by PT&T, between 1990-1991,
pursuant to Reliever Agreements.
2. On Sept. 2, 1991, GRACE was asked to join PT&T as a
probationary employee, the probation period lasting
for 150 days.
a. In her job application, she indicated that she
was
single;
in
reality,
she
had
contracted marriage just a few months
earlier, on May 26.
b. It appears that in the two reliever
agreements after her marriage, she also put
single.
3. When PT&T supposedly learned of the truth, the
Baguio branch supervisor sent a memo to GRACE
asking her to explain, and reminded her of the
company policy of not accepting married women
for employment.
a. In her defense, GRACE replied that (1) she
was not aware of the policy, and (2) she
did not deliberately hide her true civil
status.
b. PT&T was dissatisfied with her explanation
and dismissed her on Jan. 29, 1992.
4. GRACE filed a complaint for illegal dismissal and nonpayment of her COLA.
a. In the preliminary conference, she admitted
that she failed to remit to PT&T P2,380.75 of
her collections. She executed a promissory
note for the amount.
5. LA: GRACE had already become a regular employee,
and she was illegally dismissed and discriminated
against on account of her being married; ordered
reinstatement and backwages.
6. NLRC: Affirmed NLRC, but suspended GRACE for
three months for her dishonesty.
B. Issue: WON GRACE was discriminated against on account of

her being married.
C. Held: YES. Therefore, her dismissal was invalid. But in view
of her dishonesty, the NLRC suspension should be affirmed.
Petition for certiorari dismissed.
D. Ratio
On Women under the Constitution
1. The prejudice against womankind is most pervasive in
labor. Here, women traditionally fall among the groups
who must be safeguarded with preventive and
remedial social legislation.
2. The Constitution has a gamut of protective
provisions, among them:
a. Art. II, s. 14: On the role of women in nation
building; and fundamental equality
b. Art. XIII, s. 3: On the cardinal rights of
workers; equality of work opportunities for all
c. Art. XIII, s. 14: State shall protect working
women through provisions for opportunities
3. Furthermore, due to the Philippines commitment to
CEDAW, corrective labor and social laws on
gender inequality (see appendix) have emerged
with more frequency since the Labor Code, including
Labor Code art. 136, which expressly prohibits
discrimination
On Stipulation Against Marriage (art. 136, Labor Code)
1. The employer, in the exercise of its management
prerogative, is free to regulate all aspects from
hiring to firing, except in cases of unlawful
discrimination or otherwise provided by law.
2. The record shows that GRACE was dismissed
principally because of the companys policy that
married
women
are
not
qualified
for
employment. Two key pieces of evidence:
a. Memorandum from branch supervisor (Delia
Oficial): youre fully aware that the company
is not accepting married women employee
[sic]
b. Termination Notice: even told you that
married
women
employees
are
not
applicable [sic] or accepted in our company.
3. GRACEs misrepresentation was not willful or in bad
faith; she only acted as such because she wanted to
retain a permanent job. She was practically
forced by the illegal policy to lie.
a. While loss of confidence is a just cause for
termination, it must rest on an actual breach
of duty, and not be used to disguise illegal
reasons.
4. Her dismissal just a few days before she was to
complete her probationary period leads to the
conclusion that she was dismissed to prevent her
from earning security of tenure.
a. In any case, her stints as reliever were
those of a regular employee, because she
performed activities essential or necessary
in the usual trade and business of PT&T.
5. Expounded on art. 136 by citing cases:
a. Legislative history: Provision can be traced in
P.D. No. 148, s. 8 (Women and Child Labor
Law), which amended R.A. No. 679, s. 12,
which was preceded by Act No. 3701.
b. Zialcita v. Phil. Airlines: Court struck down
PAL policy requiring prospective flight
attendants to be single. PAL claimed that art.
136 does not apply to special employment
groups, but the Court held that art. 136 is
not intended to apply only to women
employed
in
ordinary
occupations,
otherwise it would have said so.
c. Gualberto v. Marinduque Mining: Company
policy was to consider women, once they
6.
marry, as automatically separated from the

company. Court held the policy as an
example of discriminatory chauvinism.
d. The
only
exception
is
Bona
Fide
Occupational Qualification (BFOQ), where
the particular requirements of the job would
justify discrimination. This requires that the
nature
reflect
an
inherent
quality,
reasonably necessary for satisfactory
job performance.
PT&Ts policy is void for being against public policy,
as it deprives a woman of the freedom to choose
her status. Carried to its logical consequences, the
policy even encourages illicit or common-law relations
and subvert the sacrament of marriage.
APPENDIX | Corrective Labor and Social Laws on Gender

Inequality
a. [R.A.
No.
6727:
explicitly
prohibiting
discrimination against women with respect to
the terms and conditions of employment
b. R.A. No. 6955: bans mail-order-bride
practice and export of female labor to
countries
that
cannot
guarantee
the
protection of women workers
c. R.A. No. 7192: Women in Development and
Nation Building Act
d. R.A. No. 7322: increasing maternity benefits
to women in the private sector
e. R.A. No. 7877: outlawing sexual harassment
in the workplace/education environment
f.
R.A. No. 8042: Migrant Workers Act,
prescribing
deploymentespecially
of
womenonly to countries where their rights
are secure
g. The Family Code, enhancing womens rights
in civil law]
Duncan Association & Pedro Tecson v Glaxo Wellcome
PH
GR
No
162994;
Sept
17,
2004
Paola Vargas
Topic- prohibited acts stipulation against marriage
Pet. Tecson was hired by Glaxo Wellcome as a medrep on 1995;
he signed a contract of employment which stipulates that he
agrees to study and abide by existing company rules and to
disclose to management any existing or future relationship
by consanguinity or affinity with co-EEs or EEs of
competing drug companies and should management
find that such relationship poses a possible conflict of
interest, TO RESIGN FROM THE COMPANY.
This clause re: inform mgmt. of relationship, is also found in the
Employee Code of Glaxo.
o
If mgmt. perceives conflict of interest or
potential conflict between such relationship
and EEs employment, the mgmt. and EE will
explore the possibility of transfer to another
department
in
a
non-counterchecking
position or
employment outside the
company after six months.
Tecson was initially assigned to market Glaxos product in
Camarines Sur/Norte area. He then entered in a relationship
with Bettsy, Branch Coordinator in Albay (supervised managers
and medreps) of ASTRA PHARMACEUTICALS, competitor of
Glaxo. They eventually got married in 1998.
o
Even before their marriage - Glaxo sent
reminders to Tecson regarding conflict of
interest but he still got married (love
prevailed daw)
Jan 1999 Tecsons superiors informed him that marriage gave
rise to a conflict of interest. They told him that he and Bettsy
should decide which one of them would resign from their jobs,
although they told Tecson they wanted to retain him.
Tecson asked for time because ASTRA

allegedly would merge with ZENECA and
Bettsy was planning to avail of redundancy
package (so no more conflict of interest +
theyd get the redundancy package)
o
He then asked for more time again in August.
Then November, he asked to be transferred
to Glaxos milk division because ASTRA did
not have a milk division. Request denied due
to Glaxos least movement possible policy.
Instead, they told him that he would be
transferred to Butuan-Surigao-Agusan Del Sur
area. He didnt want to transfer so asked for
reconsideration but was ultimately denied.
Both Glaxo and Tecson tried to resolve the issue at grievance
machinery level but failed.
At voluntary arbitration, NCMB declared as valid Glaxos
policy on EEs relationship with competitor companies and
affirmed Glaxos rigtht to transfer Tecson.
CA: Policy is valid exercise of mgmt. prerogative.
Glaxos defense as to the policy: Valid exercise of mgmt.
prerogative; also it has interest in ensuring no conflict of
interest arises that may deprive Glaxo of legitimate profits;
policy is also aimed at preventing competitor company
from gaining access to its secrets, procedure and
policies.; we dont prohibit marriage per se, only existing or
future relations with EEs of competitors.
ASTRA is in direct competition with 67% of Glaxos

products
Gave him several months to remedy problems.
Tecson also signed an employment contract

aware of such policy.
Also transfer to Butuan-Surigao-Agusan was in

consideration of the fact that Tecsons hometown is
Agusan del Sur and wife is from Butuan so it would be
favourable to him (less expenses)
ISSUES:
WON the policy of Glaxo is valid - YES
WON Tecson was illegally dismissed NO proper
exercise of mgmt. prerog; + conflict of interest because near
Bettys area; even considered his welfare; as salesman
expected to travel
Ratio:
Glaxos policy of prohibiting ees (male or female) from having
relationships with ee of a competitor company is a valid
exercise of mgmt. prerogative. They have the right to guard
its trade secrets, manufacturing formulas, marketing
strategies etc., from competitors like ASTRA which is its
rival in the highly competitive pharmaceutical industry.
Prohibition is reasonable because relationships of that nature
might compromise companys interests. Glaxo has a right to
protect economic interests which Constitution itself recognizes
(Art XIII Sec 3: ROI, expansion, growth recognition of mgmt.
rights)
The policy is not against marriage. EE remains free to marry
anyone. However, EEs personal decision does not detract from
ERs existing mgmt. prerogative to ensure maximum profit and
success.
Also he signed employment contract with such a prohibition. So
he is estopped from questioning policy.
o
Philippine Aeolus Automotive United Corporation v

NLRC
G.R. No. 142617, April 28, 2000, J. Bellosillo
Digest Prepared by Leigh
FACTS
Rosalinda Cortez company nurse of Phil. Aeolus

o
Alleged to have thrown a stapler at the plant
manager
William
Chua
and
uttering
invectives at him
o
Alleged to have lost P1,488.00 entrusted to
her by William Chua to be given to a Mr. Fang
Alleged to have asked a co-employee punchin her time card instead of doing it herself
First Memorandum was issued to her by the
personnel manager, asking her to explain why no
disciplinary action should be taken against her
o
Memorandum was refused by Cortez, but was
read to her and discussed with her by a coemployee
o
She did not submit any explanation
Cortez was placed under a 30 day preventive
suspension pending the investigation of her case
A second memorandum was issued while she was
on preventive suspension
o
Alleged to have failed to process the ATM
application of 9 employees
o
This memo was also refused by Cortez, but
read to her and discussed by a co-employee
Cortez submitted a written explanation regarding the
lost P1488.00 and the punching in of the time card
A third memorandum was issued informing
her of her termination
o
Gross and habitual neglect of duties, serious
misconduct and fraud or willful breach of
trust
Cortez filed complaint for illegal dismissal, non
payment of annual service incentive leave pay, 13th
month pay, and damages
o
Labor Arbiter: Termination valid. Claim for
damages dismissed
o
NLRC: Reversed Labor Arbiter decision.
Cortez illegally dismissed. Company to
reinstate Cortez to former position with
backwages computed from the time of
dismissal until her actual reinstatement
o
ISSUES:
W/N Cortez was illegally dismissed YES
The specific grounds for termination in the Labor Code

should be strictly construed because employment
constitutes property in the context of constitutional
protection
Burden of proving that the termination is valid rests on

the employer
Requisites of misconduct as just cause of dismissal:

(1) serious (2) must relate to the performance of the
employees duties (3) must show that the employee
has become unfit to continue working for the
employer
Charge
Gross
disrespect to
Mr.
Chua
(throwing
stapler,
hurling
invectives)
Cortez Rebuttal
Mr. Chua manifested a
special liking to her and
she was receiving special
treatment. He would ask
her out on dates, which
she refused. He also
made sexual advances
touching
her
hands,
putting arms around her
shoulders, running fingers
down her arm and telling
her she looked beautiful.
This continued for 4
years, but she never
reciprocated.
His
attitude
suddenly
changed. He made her
understand that if she
would not reciprocate, he
would
cause
her
termination. He started
harassing her. He moved
her to a table with no
COURT
NOT
SERIOUS
MISCONDUCT
Not done in the
performance of
her duties as a
nurse
P1,488.00
entrusted to
her which she
allegedly lost
Time
card
punched-in by
a
coemployee
intercom or telephone
without her knowledge,
resulting in an argument.
Money was not lost. She
gave it to the personnel in
charge
for
proper
transmittal, as evidenced
by a receipt.
She was doing an errand
for one of the companys
officers, and the punching
in
was
with
the
permission of Mr. Chua.
(the court did

not say anything
about this)
NOT
SERIOUS
MISCONDUCT
Done in good
faith
First
time
to
commit
such
Done
in
good
faith infraction in her
because it was an errand 5 year service
for a boss, and that Company did not
practice was tolerated in lose
anything
the company.
thereof because
it
was
immediately
known
and
corrected
Failure
to No knowledge. She was NOT
SERIOUS
process ATM employed as a company MISCONDUCT
applications
nurse, not to process ATM Not part of her
cards for others.
duties
No intention of
delaying
the
opening of ATM
accounts
No proof that
delay
was
caused by Cortez
Gross negligence absence of care or diligence;

thoughtless disregard of the consequences without
effort to avoid them
o
Must be habitual to cause the removal from
service of an employee
o
Must be based on facts established by the
employer. Facts must be clearly and
convincingly proven by substantial evidence
W/N Cortez is entitled to damages if she was indeed
illegally dismissed
NLRC:
Cortez not entitled to receive moral and
exemplary damages. No malice on the part of the
corporation in terminating her services. Did not
believe that she was sexually harassed by Mr. Chua
because of the length of time it took her to complain
about it.
COURT:
o
Sexual harassment is not the violation of
sexuality, but ABUSE OF POWER by the
employer
o
No time period within which the employee is
expected to complain through proper
channels this is dependent on the
circumstances and the emotional threshold of
the employee
o
Cortez was just strong enough to stay in the
same company even with Mr. Chua harassing
her
o
Moral Damages awarded to compensate for
the anxiety of the sexual harassment
o
Exemplary Damages awarded to warn
officers and employers who take undue
advantage of their ascendancy
CORTEZ ILLEGALLY TERMINATED.
NLRC decision affirmed, but instead of reinstatement,
separation pay should be paid.
Co v. Vargas
G.R. No. 195167; November 16, 2011; Carpio, J.
Digest prepared by Efren II Resurreccion
Facts:
7. Lina Vargas claims to have started working at Cos
bakeshop in 1994 as a baker from 8am to 8:30pm,
Monday to Saturday. Aside from baking, she also served
the customers and supervised the other workers
when the owner was absent.
a. She also claims that sometimes she cooked
and did the chores of a housemaid
whenever the latter was not available. She
was paid P220/day which she received every
Saturday afternoon. She was not given a payslip
and was never asked to sign a payroll.
8. April 6, 2003. Cos wife told respondent to cook their lunch
because the housemaid was ironing clothes.
a. Vargas was busy preparing customers orders that
she was unable to cook lunch.
b. Cos wife cussed respondent and told her to leave
and never to return because she was not needed
anymore.
9. Respondent was so humiliated that she decided to take her
salary and leave that same day.
10. Complaint was filed against Nathaniel Bakeshop and its
owner, Co for underpayment or non-payment of wages and
holiday pay.
11. Cos DEFENSE: Respondent was hired to work as a
housemaid. On the date of the alleged dismissal, his wife
reprimanded the respondent. Angered, she took her salary
and walked out of petitioners residence and never
reported to work again. She also badmouthed his
daughter.
12. LA: Complainant was a Regular Employee, entitled to
security of tenure.
a. The place of business of petitioner is the
same as his place of residence and that
respondent works for petitioner as well as
for his business which is based in his home.
b. Although Vargas initially started employment
doing chores for the family, she also fulfilled
tasks connected with Cos business such as
cooking, filing orders, baking orders, and other
clerical work usually necessary and desirable
in the business of Co.
13. NLRC: Reversed. Respondent was merely petitioners
housemaid who left her employ voluntarily.
14. CA: LA decision reinstated.
a. It is clear that Vargas is not a househelper.
Evidence shows her working within the
premises of the business of Co, and in relation
to or in connection with such business. Co
exercised control and supervision over
Vargas functions. The averment that she was
assigned only simple tasks of cleaning and
cooking was negated by the fact that she
likewise took orders from Cos customers.
b. Co relies heavily on the recantation (by Affidavit)
of
Joseph
Baybayon
(witness).
However
recantations are not generally favored by the
court.
c. Vargas was illegally dismissed. Since she is an
employee, she is entitled to security of tenure.
i. Co
interposes
the
defense
of
abandonment as evidenced by affidavits
by their witnesses (employees and
alleged co-housemaids of Co). However
some affidavits were questionable given
that some were written in English. There
is thus a question as to whether the
househelper
understood
what
was
written. All told, said affidavits cannot be
given credence to refute Vargas
employment.
d. Assuming that she abandoned her job, Co has
failed to prove that she 1) failed to report to work
or to absent herself without valid or justifiable
reason, and 2) a clear intention to sever the er-ee
relationship manifested by some overt acts. The

second being the more determinative factor.
Issues/Ratio:
Whether the CA erred in ruling that during the time
Vargas was working with the Co family, the business
was being conducted at the residence. NO.
It was only in the supplement to the Motion for

Reconsideration of the CA decision that petitioner
raised this issue that contrary to the findings of the
LA, NLRC, and the CA, the bakery was not located at
his residence at the time. Evidence was submitted
only after the CA promulgated its decision.
The issue is clearly a question of fact. The Supreme

Court is not a trier of facts.
According to Rule 45 Sec 1 of the ROC: The

petition shall raise only questions of law which
must be distinctly set forth.
As a rule, the CA findings of fact are final and

conclusive on this court. Except when:
a. The
findings
are
grounded
entirely
on
speculations, surmises or conjectures;
b. When the inference made is manifestly mistaken,
absurd or impossible
c. When there is GAD
d. When
the
judgment
is
based
on
a
misapprehension of the facts
e. When the findings of fact are conflicting
f.
When in making its findings, the CA beyond the
issues of the case or its findings are contrary to
the admissions of both the appellant and the
appellee
g. When the findings are contrary to that of the trial
court
h. When the findings are conclusions without
citation of specific evidence on which they are
based
i.
When the facts set forth in the petition as well as
in the petitioners main and reply briefs are not
disputed by respondent
j.
When the findings of fact are premised on the
supposed absence of evidence and contradicted
by the evidence on record
k. When the CA manifestly overlooked certain
relevant facts not disputed by the parties, which if
propertly considered, would justify a different
conclusion.
Petitioner failed to show that the case falls under any

of these exceptions.
Held:
Petition denied. CA decision Affirmed.
APEX MINING v NLRC and SINCLITICA CANDIDO
G.R. No. 94951; 22 April 1991; Gancayco, J
Digest prepared by Joyce
FACTS:
1. 18 May 1973: Respondent Sinclitica Candido was
employed by petitioner Apex Mining, Inc. to perform
laundry services at its staff house in Davao del Norte
a. She was paid on a piece rate basis in the
beginning.
b. Later on she was paid P250/month which was
ultimately increased to P575/month
2. While hanging her laundry, she accidentally slipped
and hit her back on a stone. As a result, she was not
able to continue with her work.
a. The accident was reported to her supervisor Mila
de la Rosa and to the personnel officer, Florendo
Asirit
b. She was permitted to go on leave for medication
3. Mila offered her P2000 which was eventually
increased to P5000 to persuade her to quit her job,
4.
5.
6.
but she refused the offer and preferred to return to

work
Petitioner did not allow her to return to work and
dismissed her on 4 February 1988
Sinclitica filed a request for assistance with the DOLE.
DOLE rendered a decision ordering Apex to pay her a
total of P55,161.42 (Salary differential, Emergency
Living Allowance, 13th month pay and separation pay
for 15 years of service)
Apex appealed the DOLE decision. The NLRC
dismissed the appeal for lack of merit and affirmed
the DOLE decision. MR also denied.
a.
ISSUE
WON Sinclitica should be treated as a mere househelper or
domestic servant and not as a regular employee of petitioner
SHE IS A REGULAR EMPLOYEE
7.
HELD
WHEREFORE the petition is dismissed. NLRC is AFFIRMED
RATIO
1.
Under Rule XIII, Section 1(b), Book 3 of the Labor

Code, as amended, the terms "househelper" or
"domestic servant" are defined as follows:
"The term 'househelper' as used herein is synonymous to the
term domestic servant' and shall refer to any person, whether
male or female, who renders services in and about the
employer's home and which services are usually necessary or
desirable for the maintenance and enjoyment thereof, and
ministers exclusively to the personal comfort and enjoyment of
the employer's family."
2. The foregoing definition clearly contemplates such
househelper or domestic servant who is employed in
the employer's home to minister exclusively to the
personal comfort and enjoyment of the employer's
family.
a. Such definition covers family drivers, domestic
servants, laundry women, yayas, gardeners,
houseboys and other similar househelps.
3. The definition cannot be interpreted to include
househelp or laundrywomen working in staff houses of
a company, like petitioner who attends to the needs of
the company's guests and other persons availing of
said facilities.
a. By the same token, it cannot be considered to
extend to the driver, houseboy, or gardener
exclusively working in the company, the
staffhouses and its premises. They may not be
considered as within the meaning of a
"househelper" or "domestic servant" as abovedefined by law.
4. The criteria is the personal comfort and enjoyment of
the family of the employer in the home of said
employer.
5. While it may be true that the nature of the work
of
a
househelper,
domestic
servant
or
laundrywoman in a home or in a company staf
house may be similar in nature, the diference in
their circumstances is that in the former
instance they are actually serving the family
while in the latter case, whether it is a
corporation or a single proprietorship engaged
in business or industry or any other agricultural
or similar pursuit, service is being rendered in
the staf houses or within the premises of the
business of the employer.
a. In such instance, they are employees of the
company or employer in the business concerned
entitled to the privileges of a regular employee.
6.
Petitioner contends that it is only when the

househelper or domestic servant is assigned to certain
aspects of the business of the employer that such
househelper or domestic servant may be considered
as such an employee.
The Court finds no merit in making any such

distinction.
b. The mere fact that the househelper or domestic
servant is working within the premises of the
business of the employer and in relation to or in
connection with its business, as in its staff houses
for its guests or even for its officers and
employees, warrants the conclusion that such
househelper or domestic servant is and should be
considered as a regular employee of the employer
and not as a mere family househelper or domestic
servant as contemplated in Rule XIII, Section 1
(b), Book 3 of the Labor Code, as amended.
Petitioner denies having illegally dismissed private
respondent and maintains that respondent abandoned
her work.
a. This argument notwithstanding, there is enough
evidence to show that because of an accident
which took place while private respondent was
performing her laundry services, she was not able
to work and was ultimately separated from the
service.
b. She is, therefore, entitled to appropriate relief as
a regular employee of petitioner. Inasmuch as
private respondent appears not to be interested
in returning to her work for valid reasons, the
payment of separation pay to her is in order.
Carlos G. Libres v. NLRC

G.R. No. 123737; May 28, 1999; Bellosillo, J.
Facts
Libres, an electrical engineer, was holding a managerial
position with National Steel Corporation (NSC) as Assistant
Manager.
He received a Notice of Investigation from his immediate
supervisor, AVP Isidro Hynson, requesting him to submit a
written explanation relative to the charge of sexual harassment
made by Susan Capiral, Hynsons secretary. He submitted his
written explanation denying the accusation and offering to
submit himself for clarificatory interrogation.
Hynson conducted an internal investigation to which Libres and
Capiral were invited to ventilate their respective sides. He then
submitted his report to the Management Evaluation Committee
(MEC).
MEC, after deliberation, concluded that the charges against
Libres constituted a violation of the Plants Rules and
Regulations. It opined that touching a female subordinates
hand and shoulder, caressing her nape and telling other people
that Capiral was the one who hugged and kissed or that she
responded to the sexual advances are unauthorized acts that
damaged her honor.
Referring to the Manual of the Philippine Daily Inquirer in
defining sexual harassment, MEC concluded that Libres acts
clearly constituted sexual harassment and recommended his
suspension for 30 days without pay.
Libres wrote Melchor Villamor, VP for Manufacturing, requesting
reconsideration of his suspension, but the same was denied.
The suspension order was then implemented.
Libres filed a complaint for illegal suspension and unjust
discrimination against NSC and its officers before the Labor
Arbiter, claiming he was denied due process because of MECs
failure to grant him audience despite his offer to answer
clarificatory questions.
LA ruled that due process was properly observed and that
there was a positive finding of sexual harassment to justify
Libres suspension.
LA pointed out that there was no substantial inconsistency
between the narration of Capiral and Libres regarding the
incident. Libres admissions approximated the truth. MEC was
correct in concluding that sexual harassment had transpired.
LA observed that Libres should welcome that his penalty was
only for suspension as opposed to the termination imposed in
Villarama v. NLRC.
NLRC sustained the LAs finding that Libres was validly

suspended and denied the latters MR.
Issues/Ratio
W/N NLRC should have applied RA 7877 (Sexual Harassment
Act) - NO
Findings of fact of admin officers are generally given finality.
Nonetheless, SC discussed the matter to emphasize that the
contentions of Libres are definitely without merit.
Libres never raised the applicability of the law in his appeal to
the NLRC nor in his MR. Issues or arguments must chiefly be
raised before the court or agency concerned so as to allow it to
pass upon and correct his mistakes without the intervention of
a higher court. Libres cannot now belatedly raise its
application.
RA 7877 was not yet in effect at the time of the occurrence of
the act complained of (act happened in May 1992). As a rule,
laws shall have no retroactive effect unless otherwise provided,
or except in a criminal case when their application will favor
the accused.
The LA then had to rely on the MEC report and the common
connotation of sexual harassment as it is generally understood
by the public. NLRC did not commit any abuse of discretion in
affirming LA.
W/N Villarama v. NLRC should have been applied - YES
The case singularly addressed the issue of a managerial
employee committing sexual harassment on a subordinate. The
disparity in the periods of filing the complaints in the two cases
(in Villarama the complaint was immediately filed while in the
instant case there was a one-year delay) did not reduce the
case into insignificance.
Villarama v. NLRC: As a managerial employee, petitioner is
bound by more exacting work ethics. He failed to live up to his
higher standard of responsibility when he succumbed to his

moral perversity. And when such moral perversity is
perpetrated against his subordinate, he provides a justifiable
ground for his dismissal for lack of trust and confidence. It is
the right, nay, the duty of every employer to protect its
employees from oversexed superiors.
W/N the delay in the institution of the complaint shows that in

was only an afterthought - NO
Libres was Capirals immediate superior. Fear of retaliation and
backlash, social humiliation and embarrassment that victims of
this human frailty usually suffer, are all realities that Capiral
had to contend with. The delay did not detract from the truth
derived from the facts. Libres never questioned the veracity of
Capirals allegations. His narration even corroborated the
latters assertion in several material points. He only raised
issue on the protracted filing.
W/N Libres was not afforded due process - NO
Due process, as a constitutional precept, does not always and
in all situations require a trial type proceeding. Due process is
satisfied when a person is notified of the charge against him
and given an opportunity to explain or defend himself.
Libres was given a Notice of Investigation. He submitted a
written explanation. His immediate superior allowed him to air
his grievance in a private session. He requested
reconsideration of the suspension order of MEC. The personal
confrontation with the MEC, which he requested, was not
necessary.
Litigants may be heard through pleadings, written
explanations, position papers, memoranda or oral arguments.
Libres has been afforded all of the above means to air his side.

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Labor 1 102015

13th Month Pay

Dentech manufacturing v. nlrc

Nov 4, 1987, NLRC: LA decision was affirmed. Citing,

PD851, signed 1975 required that all employees

From the foregoing it is clear that Dentech has no

The P1,000 salary ceiling provided in PD851 pertains

Art 144 LC prohibits an employer from requiring

Petitioners have not satisfactorily disputed the

Presidential Decrees providing for ECOLA (Nos. 1614,

The sembreak, being in the nature of a work

The no work, no pay principle does not apply here as

UNIVERSITY contends that fact receiving salary, as

The payment of full wages during sembreak is a tacit

WON 60% of proceeds are to be devoted to salary increase:

The Court here is called to interpret Section 3 of PD

The Court had earlier ruled in University of the East v.

UNIVERSITY contends that this earlier decision

The Court is not guilty of usurpation of legislative

As found by respondent NLRC, the faculty members

Assuming that these have not been paid, faculty

Private respondents Geronimo Manuel, Arnulfo Diaz,

Despite the prohibition, the private respondents

Archilles ordered them to remove their families from

Their services were terminated by Archilles on May 18,

A complaint for illegal dismissal was filed

This motion was not acted

Ordered payment of proportionate

Petition filed by Archilles for the annulment for the

A writ of execution is still necessary to enforce the

An order of reinstatement is immediately executory,

In the absence of an order for the issuance of the writ

The employer has the option whether to physically

IN THIS CASE: No opportunity for Archilles to exercise

or payroll reinstatement, because there was no writ of

IRR of PD 851, Sec 4

This benefit cannot be lost or forfeited for any

Attorneys fees only assessed in cased of unlawful

Archilles was not guilty of unlawfully withholding the

Petitioners Songco et al. are employees in the sales

Art. 97 (f) of the Labor Code:

For the determination of basis of separation pay, the

Definition of wage in LC 97(f) is a

Sec 10, IRR states that the basis of

LC 284 and the Implementing Rules

This had been resolved by the Court in

DOLE conducted routine inspections in the premises of

Development of laws regarding 13th month pay mentioned in

Only the basic salary is included in the computation of

Par. 2 Sec. 5(a), Revised Guidelines on the Implementation of

The said provision, in including commissions in the

Other remunerations excluded from computation of 13 th month

The Court mentioned several kinds of remunerations

the coverage of basic salary as used in PD 851 (13 th

When PD 851 (13th Month Pay Law) was enacted, only

Philippine Duplicators Inc. v. NLRC

Yes. Sales commission of salesmen should be included. The

Boie and Philippine Duplicators present different

In Boie, the so called commissions paid to medical

These additional payments partook the nature of

Medical representatives are not salesmen; they

Its payment constitutes an enlightened generosity

NOT a demandable or enforceable obligation (NONDEMANDABLE CHARACTER)

TEST to determine if Bonus forms part of wages