Professional Documents
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9/26/2016 SUPREME COURT REPORTS ANNOTATED VOLUME 305
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* SECOND DIVISION.
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BELLOSILLO, J.:
1
Petitioners numbering one hundred sixteen (116) occupied
the positions of Technical Staff, Unit Manager, Section
Manager, Department Manager, Division Manager and
Vice President in the mill site of respondent Paper
Industries Cor
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505
1. Staff/Managers Allowance
Respondent PICOP provides free housing facilities to
supervisory and managerial employees assigned in Bislig. The
privilege includes free water and electric consumption. Owing
however to shortage of such facilities, it was constrained to grant
Staff allowance instead to those who live in rented houses outside
but near the vicinity of the mill site. But the allowance ceases
whenever a vacancy occurs in the companys housing facilities.
The former grantee is then directed to fill the vacancy. For Unit,
Section and Department Managers, respondent PICOP gives an
additional amount to meet the same kind of expenses called
Managers allowance.
2. Transportation Allowance
To relieve respondent PICOPs motor pool in Bislig from a
barrage of requests for company vehicles and to stabilize company
vehicle requirements it grants transportation allowance to key
officers and Managers assigned in the mill site who use their own
vehicles in the performance of their duties. It is a conditional
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506
Applying Art. 97, par. (f), of the Labor Code which defines
wage, the Executive Labor Arbiter opined that the subject
allowances, being customarily furnished by respondent
PICOP and regularly received by petitioners, formed part
of the latters wages. Resolving the controversy from
another2 angle, on the strength3 of the ruling in Santos v.
NLRC and Soriano v. NLRC that in the computation of
separation pay account should be taken not just of the basic
salary but also of the regular allowances that the employee
had been receiving, he concluded that the allowances
should be included in petitioners base pay. Thus
respondent PICOP was ordered on 28 April 1994 to pay
petitioners Four Million Four Hundred EightyOne
Thousand Pesos (P4,481,000.00) representing separation
pay differentials
4
plus ten percent (10%) thereof as
attorneys fees.
The National Labor Relations Commission (NLRC) did
not share the view of the Executive Labor Arbiter. On 7
October 1994 it set aside the assailed decision by decreeing
that the allowances did not form 5 part of the salary base
used in computing separation pay. Its ruling was based on
the finding that the cases relied upon by the Executive
Labor Arbiter were inapplicable since they involved illegal
dismissal where separation pay was granted in lieu of
reinstatement which was no longer feasible. Instead, what
it considered in point 6was Estate of the late Eugene J.
Kneebone v. NLRC where the Court held that
representation and transportation allowances
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2 G.R. No. 76721, 21 September 1987, 154 SCRA 166.
3 G.R. No. 75510, 27 October 1987, 155 SCRA 124.
4 Decision penned by Executive Labor Arbiter Conchita J. Martinez;
Rollo, p. 68.
5 Resolution penned by Commissioner Leon G. Gonzaga, Jr. with the
concurrence of Acting Presiding Commissioner Oscar N. Abella; Rollo, p.
48.
6 G.R. No. 77109, 8 November 1988, 167 SCRA 99.
507
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7 Rollo, p. 50.
8 See Note 2.
9 See Note 3.
10 G.R. No. 74191, 21 December 1987, 156 SCRA 740.
11 G.R. No. 78524, 20 January 1989, 169 SCRA 328.
12 G.R. Nos. 5099951000, 23 March 1990, 183 SCRA 610.
508
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16 Rollo, p. 234.
17 States Marine Corporation v. Cebu Seamens Association, Inc., No. L
12444, 28 February 1963, 7 SCRA 294.
510
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18 Rollo, pp. 239240.
19 Citing PanPhilippine Life Insurance Corporation v. NLRC, G.R. No.
53721, 29 June 1982, 114 SCRA 866 where transportation allowance was
included in the computation of back wages and General Bank and Trust
Company v. Court of Appeals, G.R. No. 42724, 9 April 1985, 135 SCRA
569 where housing allowance was included in
511
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512
Petition dismissed.
o0o
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