OUR HAUS REALTY v.

PARIAN
Petitioner: Our Haus Realty Development Corporation
Respondent: Alexander Parian,
Jay C. Erinco,
Alexander Canlas,
Bernard Tenedero, and
Jerry Sabulao
Citation: G.R. No. 204651
Date of Promulgation: August 6, 2014
Ponente: Brion, J.
FACTS
1. Our Haus Realty Development Corporation is a company engaged in the
construction business where respondents are employed at.
2. The respondents' respective employment records and daily wage rates from
2007-2010 are as follows:
3. In May 2010, the company experienced financial distress and suspended its
construction projects and asked its affected workers, including respondents, to
take vacation leaves.
4. When the respondents were asked to report back to work, instead of doing
so they filed with the Labor Arbiter a complaint for underpayment of their daily
wages.
- except for Tenedero, their wages were below the minimum rates
prescribed in the following wage orders from 2007 to 2010.
- Wage Order No. NCR-13 (August 28, 2007 - June 13, 2008): P362.00
daily minimum wage for non-agriculture sector
- Wage Order No. NCR-14 (June 14, 2008 - June 30, 2010): P382.00 daily
minimum wage for non-agriculture sector
- they also alleged that petitioner failed to pay them their holiday, service
incentive leave, 13th month and overtime pays
5. The Labor Arbiter ruled in favor of petitioner.
- petitioner claimed that the respondents' wages complied with the laws
minimum requirement because Our Haus:
a. subsidized their meals
b. gave them free lodging
- in determining the total amount of the respondents' daily wages, the
value of these benefits should be considered in line with Article 97(f) of the
Labor Code
- respondents contended that the value of their meals should not be
considered in determining their wages' total amount since the requirements set
under Section 413 of DOLE Memorandum Circular No. 215 were not complied
with
6. The NLRC reversed the decision in favor of the respondents.
- the laborers did not authorize Our Haus in writing to charge the values
of their board and lodging to their wages
- the laborers are entitled to their 13th month payments for 2010 and SIL
payments for at least 3 years

- maintained the Labor Arbiter's decision that laborers are not entitled to
overtime pay since the exact dates and times when they rendered overtime
work had not been proven
7. Our Haus moved for the reconsideration of the NLRC's Decision and
submitted new evidence (the five kasunduans) to show that the respondents
authorized Our Haus in writing to charge the values their meals and lodging to
their wages.
- NLRC denied this motion.
8. Our Haus filed a petition for certiorari with the CA propounding a new theory
that there is a distinction between deduction and charging
- a written authorization is necessary only if the facility's value will be
deducted from the wage
- it should not be needed if it will merely be charged or included in the
computation of wages
- CA dismissed the petition and affirmed the NLRC's rulings in toto,
finding that there is no distinction between deduction and charging and that
the legal requirements before any deduction or charging can be made, apply to
both
ISSUE
Whether or not the NLRC committed grave abuse of discretion in its decision
favoring the laborers.
HELD
The SC denied the petition and affirmed the Decision of the CA. The NLRC did
not abuse its discretion in its Decision.
Our Haus explains that in deduction, the amount of the wage (which may
already be below the minimum) would still be lessened by the facilitys value,
thus needing the employees consent. On the other hand, in charging, there is
no reduction of the employees wage since the facilitys value will just be
theoretically added to the wage for purposes of complying with the minimum
wage requirement
- No substantial distinction between deducting and charging a facility's
value from the employee's wage; the legal requirements for creditability apply
to both.
The requirements for creditability set by law to apply are:
a. proof must be shown that such facilities are customarily
furnished by the trade;
b. the provision of deductible facilities must be voluntarily
accepted in writing by the employee; and
c. the facilities must be charges at a fair and reasonable value
The Purpose Test
Under the law, only the value of the facilities may be deducted from the
employee's wages but not the value of supplements.
- facilities include articles or services for the benefit of the employee or
his family

- supplements are paid to employees on top of their basic pay (may not
be included in the determination of wage compliance)
The Court made a distinction between "facilities" and "supplements". It is of the
view that the food and lodging were not facilities but supplements.
In Atok-Big Wedge Assn. v. Atok-Big Wedge Co., it was held that
"Supplements", therefore, constitute extra remuneration or special
privileges or benefits given to or received by the laborers over and
above their ordinary earnings or wages.
"Facilities", on the other hand, are items of expense necessary for the
laborer's and his family's existence and subsistence so that by
express provision of law (Sec. 2[g]), they form part of the wage and
when furnished by the employer are deductible therefrom, since if they
are not so furnished, the laborer would spend and pay for them just the same.
The Court concluded, under the purpose test, that the subsidized meals and
free lodging provided by Our Haus are supplements.
- Our Haus is engaged in the construction business, a labor-intensive
enterprise. The success of its projects is largely a function of the physical
strength, vitality and efficiency of its laborers. Its business will be jeopardized if
its workers are weak, sickly, and lack the required energy to perform strenuous
physical activities. Thus, by ensuring that the workers are adequately
and well fed, the employer is actually investing on its business.