COMMANDO SECURITY AGENCYv.

NLRC declaration of Principles and State Policies, impose upon the courts
July 20, 1992 | Grino-Aquino, J. | Deductions from Wages
Digester: Chua, Gian Angelo
SUMMARY:Respondent Decierdo assails a provision in his employment contract with
Petitioner Commando Security Agency. This provision provided for a 25% deduction
from respondent’s salary, which represented petitioner's share in procuring job
placement. The Court held that the provision was null and void.
DOCTRINE: The constitutional provisions on social justice (Sections 9 and 10, Article
II) and on protection to labor (Sec. 18, Article II) in the declaration of Principles and
State Policies, impose upon the courts the duty to be ever vigilant in protecting the
rights of workers who are placed in a contractually disadvantaged position and who sign
waivers or provisions contrary to law and public policy. It goes without saying that
respondent may not deduct its so-called “share” from the salaries of its guards without
the latter's express consent. This is notwithstanding any previous agreement or
understanding between them. Any such agreement or contract is void ab initio being
contrary to law and public policy. Such deductions are not allowed by law.
FACTS:
 Respondent Nemesio Decierdo was a security guard of petitioner Commando
Security Agency. Petitioner entered into a contract to provide guarding services to
the Alsons Development and Investment Corporation (Alsons) at its Aldevinco
Building on Claro M. Recto Avenue, Davao City for a period of 1 year.Respondent
was one of the guards assigned to the Aldevinco Building by the petitioner.
 Later, Alsons requested petitioner for a periodic reshuffling of guards. Pursuant to
this request, petitioner served a recall order on respondent. At the same time,
petitioner issued a detail order assigning respondent to the Pacific Oil Company in
Bunawan, Davao City. Respondent refused to accept the assignment.
 Respondent filed a complaint for illegal dismissal, unfair labor practice,
underpayment of wages, overtime pay, night premium, 13th month pay, holiday
pay, rest day pay and incentive leave pay.
 One of respondent’s argumentwas that the 25% deduction from his salary, which
represented petitioner's share in procuring job placement for him was illegal.
Petitioner’s defense was that respondent was already estopped from complaining
about the deduction since he signed the employment contract.
the duty to be ever vigilant in protecting the rights of workers who
are placed in a contractually disadvantaged position and who sign
waivers or provisions contrary to law and public policy.
o It goes without saying that respondent may not deduct its so-called
“share” from the salaries of its guards without the latter's express
consent. This is notwithstanding any previous agreement or
understanding between them. Any such agreement or contract is void
ab initio being contrary to law and public policy. Such deductions are
not allowed by law.
NOTES
 Regarding the petitioner’s allegation that it was denied due process, we have time
and again pointed out that procedural due process merely requires notice and
opportunity to be heard which the petitioner was given then it filed its position
paper. The petitioner was properly notified and even took part in the conciliation
conference for the amicable settlement of the case. It was made aware of the nature
and specifics of the charges against it but failed to refute them expecting that a
hearing would be called. However, the Labor Arbiter proceeded to decide the case
based on the parties’ position papers, the records submitted by petitioner, and the
report and the computations made by the Corporate Auditing Examiner regarding
the sums which respondent was entitled to recover. That procedure complied with
the Revised Rules of the NLRC, particularly Sections 2 and 3.
 Respondent abandoned his job. NLRC correctly dismissed the charge of illegal
dismissal and unfair labor practice against the petitioner and correctly denied
respondent’s claim for separation pay.

RULING: Petition denied.

Whether respondent is estopped from complaining about the 25% deduction

from his salary,which represented petitioner’s share in procuring job placement
for him – NO.
 That provision of the employment contract was illegal and iniquitous, hence, null
and void.
o The constitutional provisions on social justice (Sections 9 and
10,Article II) and on protection to labor (Sec. 18, Article II) in the
 APODACA v. NLRC
April 18, 1989 | Gancayco, J. | Deductions from Wages
Digester: de Vera, Clarissa M.
SUMMARY: Apodaca was employed by respondent. He was persuaded by Mirasol to
subscribe to the shares of the corporation. He made an initial payment and was
appointed President and General Manager. He, however, resigned. He then filed a
complaint for unpaid wages with the NLRC. Respondents alleged that although he has
unpaid wages, these were applied to the unpaid balance of his subscription. LA
sustained his claim but the NLRC reversed. SC ruled that respondent cannot offset an
obligation cannot be offset against a money claim of the employee.
DOCTRINE: Article 113 of the Labor Code allows such a deduction from the wages
of the employees by the employer, only in three instances:
o In cases where the worker is insured with his consent by the employer, and the
deduction is to recompense the employer for the amount paid by him as premium
on the insurance
o For union dues, in cases where the right of the worker or his union to checkoff has
been recognized by the employer or authorized in writing by the individual worker
concerned;
o In cases where the employer is authorized by law or regulations issued by the
Secretary of Labor.
FACTS:
 Ernesto Apodaca was employed in respondent Intrans Phils., Inc.. On August 28,
1985, respondent Jose M. Mirasol persuaded petitioner to subscribe to 1,500 shares
of respondent corporation at P100.00 per share or a total of P150,000.00. He made
an initial payment of P37,500.00.
 On September 1, 1975, petitioner was appointed President and General Manager of
the respondent corporation. However, on January 2, 1986, he resigned.
 On December 19, 1986, petitioner instituted with the NLRC a complaint against
private respondents for the payment of his unpaid wages, his cost of living
allowance, the balance of his gasoline and representation expenses and his bonus
compensation for 1986.
 Petitioner and private respondents submitted their position papers to the labor
arbiter. Private respondents admitted that there is due to petitioner the amount of
P17,060.07 but this was applied to the unpaid balance of his subscription in the
amount of P95,439.93.
 Petitioner questioned the set-off alleging that there was no call or notice for the
payment of the unpaid subscription and that, accordingly, the alleged obligation is
not enforceable.
 The labor arbiter sustained the claim of petitioner for P17,060.07 on the ground
that the employer has no right to withhold payment of wages already earned under
Article 103 of the Labor Code.
 Upon the appeal of the private respondents to public respondent NLRC, the
decision of the labor arbiter was reversed in a decision dated September 18, 1987.
The NLRC held that a stockholder who fails to pay his unpaid subscription on call
becomes a debtor of the corporation and that the set-off of said obligation against
the wages and others due to petitioner is not contrary to law, morals and public
policy.
 Hence, the instant petition
RULING: WHEREFORE, the petition is GRANTED and the questioned decision of
the NLRC dated September 18, 1987 is hereby set aside and another judgment is hereby
rendered ordering private respondents to pay petitioner the amount of P17,060.07 plus
legal interest computed from the time of the filing of the complaint on December 19,
1986, with costs against private respondents.
Whether the National Labor Relations Commission (NLRC) have jurisdiction to
resolve a claim for non-payment of stock subscriptions to a corporation – NO
 NLRC has no jurisdiction to determine such intra-corporate dispute between the
stockholder and the corporation as in the matter of unpaid subscriptions. This
controversy is within the exclusive jurisdiction of the Securities and Exchange
Commission.
Assuming the NLRC has jurisdiction over the case, whether the unpaid
subscriptions may be offset against a money claim of an employee against the
employer – NO
 First, the unpaid subscriptions are not due and payable until a call is made by the
corporation for payment. Private respondents have not presented a resolution of
the board of directors of respondent Corporation calling for the payment of the
unpaid subscription. It does not even appear that a notice of such call has been sent
to petitioner by the respondent corporation.
 No doubt such set-off was without lawful basis, if not premature. As there was no
notice or call for the payment of unpaid subscriptions, the same is not yet due and
payable.
 Second, even if there was a call for payment of the unpaid subscription, the NLRC
cannot validly set it off against the wages and other benefits due petitioner.
 Article 113 of the Labor Code allows such a deduction from the wages of the
employees by the employer, only in three instances:
o In cases where the worker is insured with his consent by the
employer, and the deduction is to recompense the employer for the
amount paid by him as premium on the insurance
o For union dues, in cases where the right of the worker or his union
to checkoff has been recognized by the employer or authorized in
writing by the individual worker concerned;
o In cases where the employer is authorized by law or regulations
issued by the Secretary of Labor.
 GENESIS TRANSPORT SERVICE, INC. v. UMMGT & TAROY
April 5, 2010 | Carpio Morales, J. | Prohibition against wage deduction
Digester: Batac, Jeffrey
SUMMARY: Juan Taroy was hired in 1992 by Genesis Transport as driver on
commission basis. In 2002, he was fired for reckless driving. Subsequently, he filed a
complaint for illegal dismissal. He also filed for reimbursement of illegal deductions on
tollgate fees, claiming that Genesis Transport Service deducted from his weekly earnings
an amount ranging from P160 to P900 representing toll fees, without his consent and
written authorization. The Court held that Taroy was not illegally dismissed because he
was accorded due process, but that Genesis Transport should refund him the illegal
deductions it made.
DOCTRINE: Without the employee's written consent or authorization, a deduction
on his wage is considered illegal.
FACTS:
 In 1992, Juan Taroy was hired by Genesis Transport Service, Inc. as driver on
commission basis at 9% of the gross revenue per trip. In 2002, he was, after due
notice and hearing, terminated from employment after an accident on April 20,
2002 where he was deemed to have been driving recklessly.
 Taroy filed a complain for illegal dismissal and payment of service incentive leave
pay, claiming that he was singled out for termination because of his union activities,
other drivers who had met accidents not having been dismissed from employment.
He later amended his complaint to implead his Unyon ng Malayang Manggagawa
ng Genesis Transport (the union) as complainant and add as grounds of his cause
of action unfair labor practice (ULP), reimbursement of illegal deductions on
tollgate fees, and payment of service incentive leave pay.
 On the claim of illegal wage deduction: Taroy alleged that in 1997, Genesis
Transport Service started deducting from his weekly earnings an amount ranging
from P160 to P900 representing toll fees, without his consent and written
authorization as required under Article 113 of the Labor Code and contrary to
company practice; and that deductions were also taken from the bus conductors'
earnings, thus resulting in double deduction.
 Genesis Transport Service's defenses: (a) Taroy was not illegally dismissed; he was
afforded due process as evidenced by his preventive suspension, the directive for
him to explain in writing his involvement in the April 20, 2002 accident, and the
conduct of a hearing; (b) there was no evidence to prove that Taroy's dismissal was
due to his union membership and/or activities; and (c) the deduction of tollgate
fees from the gross earnings of drivers is an accepted and long-standing practice in
the transportation industry.
 The Labor Arbiter ruled that Taroy was not illegally dismissed and that he was not
entitled to service incentive leave pay since he was a field personnel paid on
commission basis. However, the LA ruled that Taroy was entitled to be refunded
the sum of tollgate fees deducted from him. According to the LA, if as contended
by Genesis Transport, tollgate fees form part of overhead expenses, why were not
expenses for fuel and maintenance also charged to overhead expenses? The Labor
Arbiter thus concluded that it would appear that the tollgate fees are deducted from
the gross revenues and not from the salaries of drivers and conductors, but
certainly the deduction thereof diminishes the take home pay of the employees.
 Both parties appealed to the NLRC, with Taroy raising his claim of illegal
suspension for the first time. He claimed that the 30-day suspension period was
supposed to end on May 20, 2002, but he only received his termination letter on
June 4, 2002. The NLRC dismissed the claim of illegal suspension, but otherwise
affirmed the LA's ruling with minor modification.
 Upon appeal before the CA, the appellate court held that Genesis Transport
violated Taroy's statutory right to due process when he was preventively suspended
for more than thirty (30) days, in violation of the Implementing Rules and
Regulations of the Labor Code. As such, the CA held that Taroy was entitled to the
award of nominal damages. Otherwise, the CA affirmed the NLRC's ruling
ordering Genesis Transport to refund Taroy the underpayment. Hence, the instant
petition.
RULING: CA ruling affirmed with minor modification; award of nominal damages to
Taroy is deleted.
Is Taroy entitled to refund? – YES.
 The Court held that it cannot take judicial notice of Genesis Transport's claim that
the deduction of tollgate fees from the gross earnings of drivers is an accepted and
long-standing practice in the transportation industry. For the Court to take judicial
notice, three material requisites must concur: (1) the matter must be one of
common and general knowledge; (2) it must be well and authoritatively settled and
not doubtful or uncertain; and (3) it must be known to be within the limits of the
jurisdiction of the court. None of these was established in the present case.
 Albeit the amounts representing tollgate fees were deducted from gross revenues
and not directly from Taroy's commissions, the labor tribunal and the appellate
court correctly held that the withholding of those amounts reduced the amount
from which Taroy's 9% commission would be computed. Such a computation
marks a change in the method of payment of wages, resulting in a diminution of
Taroy's wages in violation of Article 113 vis-a-vis Article 100 of the Labor Code, as
amended. Without Taroy's written consent or authorization, the deduction is
considered illegal.
 Genesis Transport's other defense that the favorable rulings it got from the NLRC
on cases with the same issue (viz: UMMGT v. Genesis Transport Service, Inc.; Reyes v.
Genesis Transport Service, Inc.; and Santos v. Genesis Transport Service, Inc.) constitute res
judicata and must be similarly applied to the present case is mistaken. Absent proof
that the NLRC cases cited have attained finality, the Court may not consider them
to constitute res judicata on Taroy's claim for refund.
Was Taroy deprived of due process? – NO.
 Taroy raised the claim of the illegality of his preventive suspension for the first time
upon his appeal before the NLRC. The well-settled rule, which also applies in labor
cases, is that issues not raised below cannot be raised for the first time on appeal.
 But even if said claim were part of the original complaint, the Court held that it still
couldn't rule in favor of Taroy. In the present case, Genesis Transport had until
May 20, 2002 to act on Taroy's case. It did by terminating him through a notice
dated May 10, 2002. Therefore, the 30-day requirement was not violated even if the
termination notice was received only on June 4, 2002, absent any showing that the
delayed service of the notice on Taroy was attributable to Genesis Transport.
 Millares (116 in total) v. NLRC
Mar. 29, 1999| Bellosillo, J.| Facilities and Supplements/Allowances
Digester: Mercado, Carlo Robert
SUMMARY:Paper Industries Corporation of the Philippines(PICOP) was suffering
large financial losses, so it retrenched 116 employees and paid them separation pay at
the rate of one month of basic pay per one year in service. However, the employees
insist that the various allowances they received as employees be included in the
separation pay. The SC ruled that these allowances are not included in the salary to be
paid by PICOP since these were not regularly received by the employees.
DOCTRINE:
LC Article 97(f): Wage as the remuneration orearnings, however designated, capable of
being expressed in terms of money, whether fixed or ascertained on a time, task, piece,
or commission basis, or other method of calculating the same, which is payable by an
employer to an employee under a written or unwritten contract of employment for
work done or to be done, or for services rendered or to be rendered and includes the
fair andreasonable value, as determined by the Secretary of Labor,of board,
lodging, or other facilities customarily furnished by the employer to the
employee.
Definition of Facilities (Sec. 5, Rule VII, Book III, of the Rules Implementing the Labor
Code) - including articles or services for the benefit of the employee or his family but
excludingtools of the trade or articles or service primarily for the benefit of the employer
or necessary to the conduct of the employer’s business.
FACTS:
 Millares + the other 115 workers are employees in the Paper Industries
Corporation of the Philippines (PICOP) in Bislig, Surigao del Sur, occupying the
following positions: Technical Staff, Unit Manager, Section Manager, Department
Manager, Division Manager and Vice President
 In 1992 PICOP suffered a major financial setback allegedly due to the impact of
restrictive government regulations on logging and the economic crisis.
o It thus undertook a retrenchment program and terminated the said
employees
 Petitioners received separation pay computed at the rate of one (1) month basic pay
for every year of service However, they believed the following other allowances
should have been included in the computation:
o (Common element to these allowances: when the conditions no
longer obtain, the privilege is discontinued; see Notes for description)
1. Staff/Manager’s Allowance
2. Transportation Allowance
3. Bislig Allowance
 LA:Using LC Art. 97(f), these allowances formed part of their wages, hence should
be included in the separation pay (Using the cases of Santos v. NLRC and Soriano
v. NLRC). Total additional amount of PHP 4.481M
 NLRC: reversed LA. Cases that were used inapplicable since those referred to
illegal dismissal. Relying on Kneebone v. NLRC, that allowances were deemed not
part of salary. Also using LC Art. 97(f) petitioners’ allowances were contingency-
based and thus not included in their salaries.
RULING: Petition denied. No Grave Abuse of Discretion (GAOD) on part of NLRC,
hence AFFIRMED
W/N NLRC ruling should be reversed due to GAOD – NO. Petitioners’ salaries
do not include the said allowances. NLRC decision stands.
In cases of Retrenchment: LC Art 283
- Obligation to grant to the affected employees separation pay equivalent to one
(1) month pay or at least one-half (1/2) month pay for every year of service,
whichever ishigher.
However, Court asks: What does “pay” actually mean?
 Note: Article 97 uses the term “wage”, not “pay”
 In Songco the court said that both words (as well as salary) generally refer to one and
the same meaning, i.e., a reward or recompense for services performed.
 LC Article 97(f): Wage as the remuneration orearnings, however designated,
capable of being expressed in terms of money, whether fixed or ascertained on a
time, task, piece, or commission basis, or other method of calculating the same,
which is payable by an employer to an employee under a written or unwritten
contract of employment for work done or to be done, or for services rendered or
to be rendered and includes the fair andreasonable value, as determined by
the Secretary of Labor,of board, lodging, or other facilities customarily
furnished by the employer to the employee. (For this case SC wants to focus on
the underlined)
 We divide the discussion on the following·1) customarily furnished 2) board,
lodging or other facilities and 3) fair and reasonable value as determined by the
Secretary of Labor.
1. Customary1
 Rule: constant practice connoting regularity. The receipt of anallowance on a
monthly basis does not ipso facto characterize it as regularand forming part of
salary
 As applied to the three allowances: Given that the subject allowances
weretemporarily, not regularly, received by petitioners because of the said
conditions, and cease when said conditions are no longer present (see Notes)
2. Board, lodging or other facilities
 Board and lodging: easy to comprehend
1Owing
to the writing style of the ponente, it is unclear which
component was the ratio of the case. The digester thinks the
“Customary” part of the discussion most likely led to the resolution of
the case
 Rule for facilities: Sec. 5, Rule VII, Book III, of the Rules Implementing the Labor
Code: including articles or services for the benefit of the employee or his family but
excluding tools of the trade or articles or service primarily for the benefit of the
employer or necessary to the conduct of the employer’s business.
 As applied to the three allowances: The Staff/Manager’s allowance may fall under
“lodging” but the transportation and Bislig allowances are not embraced in facilities
on the main consideration thatthey are granted as well as the Staff/Manager’s
allowance for respondent PICOP’s benefit and convenience, i.e., a) toinsure that
petitioners render quality performance and b) these were non-taxable lol
3. Fair and reasonable value
 Rule: DOLE Secretary may from time to time fix in appropriate issuances the fair
and reasonable value of board, lodging and other facilities
customarily furnished by an employer to his employees
 As applied to the three allowances: Allowances do not represent such fair
andreasonable value as determined by the proper authoritysimply because the
Staff/Manager’s allowance andtransportation allowance were amounts given
byrespondent company in lieu of actual provisions for housingand transportation
needs whereas the Bislig allowance wasgiven in consideration of being assigned to
the hostileenvironment then prevailing in Bislig.

Regarding the cases used by the LA and NLRC – Both not applicable in this case
LA: Soriano and Songco awarded to illegally dismissed employees salary and regular
allowances. Since in this case it was shown that the said allowances were not regular,
such does not apply
NLRC: Kneebone is not likewise applicable because in that case revolved around a
situation whereinretirement plan of the company expressly excluded such allowances
from salary

NOTES:
1. Staff/Manager’s Allowance
 Since not enough to accommodate all employees, PICOP grants Staff
allowance instead. Allowance ceases whenever a vacancy occurs in the
company’s housing facilities. The former grantee is then directed to fill the
vacancy.
2. Transportation Allowance
 For key officers and Managers assigned in the mill site who use their own
vehicles in the performance of their duties
3. Bislig Allowance
 Given to Division Managers and corporate officers assigned in Bislig on
account of the hostile environmentonce the recipient is transferred elsewhere
outside Bislig, the allowance ceases.
 FRAMANLIS FARMS, INC., ELOISA SYCIP and LINCOLN SYCIP v.
HON. MINISTER OF LABOR, MANILA, PAFLU SEPTEMBER
CONVENTION, ZOILO ESTANISLAO, EMILIO ANITO, JAIME ARNEJO,
CASIMIRO ARRABIS, RENATO BACONADOR ,VICENTE BACONADOR,
ROMEO BACONADOR, ROGELIO BAYONITA,RODOLFO BAYONITA,
ROGELIO BONDOCIO, NAPOLEON BONDOCIO, TEODORO
BLANCAFLOR, PANFILO BROÑOLA, ALFREDO DICHOSA, EDGARDO
ENOPOSA, WILSON ENOPOSA, SANCHO GALAGATE, GERARDO
GALAGATE, NELITO GALLEGO, FRANCISCO INDORES, EDUARDO
LOZADA, JESUS LABRADOR, PANFILO LAORENTE, ROGELIO MITRA,
FERNANDO MATTE, EDUARDO MARONE, ROSELLER MARONE,
IGLESERIO PANOGOT,SILVERIO PANOGOT, ARTURO
PANOGOT,ARMANDO SAGAYA ERNESTO TAGAMTAM, ROMEO
GARCIA, TEODORICO ATANGAN, LOURDES DE LA CRUZ, CLARITA
DELORIA,DANILO MENDOZA, WILLIAM GONZALES, RAFAEL
PADRANES, JUAN PADRANES, JUAN PANOGOT, MAGDALENA
PANOGOT, JOSE SAGAYA, PABLO TUNDAG, VIVENCIO NABAY,
RAFAEL MARONE, RODOLFO ENOPOSA, BALODOY ACADEMIA and
GERARDO GALLEGO
March 8, 1989 | Griño-Aquino, J. | Thirteenth Month Pay
Digester: Fortun, Selena
SUMMARY:18 employees filed a petition praying for ECOLA, 13th month pay, holiday
pay and SIL from petitioners. Petitionerswas ordered to pay by the Minister of Labor
(MOLE). Their defense was that they had substantially complied with PD 851 (the
Thirteenth Month Pay Law) by giving their workers a yearly bonus and other non-
monetary benefits such as pork meat subsidy and free electricity. The Court said that
such benefits were not equivalent to the 13th month pay required under the law.
DOCTRINE: Under Section 3 of PD No. 851, such benefits in the form of food or
free electricity, assuming they were given, were not a proper substitute for the 13th
month pay required by law. Neither may year-end rewards for loyalty and service be
considered in lieu of 13th month pay.
Note: I included all the details of the amounts to be paid to complainants just in case, because
they may be relevant to the topic at hand.
FACTS:
 April 1980: Eighteen (18) employees of the petitioners filed against their employer
Framanlis Farms and the other petitioners two labor standard cases, which were
docketed as PAFLU September Convention v. Framanlis Farms.
o They alleged that in 1977 to 1979 they were not paid emergency cost
of living allowance (ECOLA) minimum wage, 13th month pay,
holiday pay, and service incentive leave pay.
 In their answer to the amended complaint, petitioners alleged the following:
o Private respondents were not regular workers on their hacienda but
were migratory (sacadas) or pakyaw workers who worked on-and-off
and were hired seasonally, or only during the milling season, to do
piece-work on the farms, hence, not entitled to benefits claimed.
o Under the decrees, the living allowance shall be paid on a monthly,
not percentage, basis depending on the total assets or authorized
capital stock of the employer, whichever is higher and applicable.
o They admitted that their total assets and authorized capital stock
exceeded P2 million. However, in 1977 they had applied for
exemption under PDs 525 and 1123 but no ruling has been issued by
the MOLE on their application.
o Claims for holiday pay, service incentive leave pay, social amelioration
bonus and underpayment of minimum wage were not controverted.
o With respect to the other claims, complainants submitted only
random payrolls which showed that the women workers were
underpaid as they were receiving an average daily wage of P5.94 only,
although the male workers received P10 more or less, per day.
 MOLE issued an Order directing petitioners to pay the following:
o Deficiency payment of P2.00 per day to female workers under PD 925 from
May 1, 1976 to April 30, 1979;
o Deficiency payment of P3.00 per day to female workers and Pl.00 per day to
male workers, under PD 1614 from April 1, 1979 to August 17, 1980;
o Deficiency payment of P5.50 per day to female workers and P3.50 to male
workers under Ministry Order No. 5 effective at the start of grinding (sic) for
the crop year 1979-80;
o Effective August 18, 1980, P6.50 per day to female workers and P4.50 to
male workers up to the date of restitution;
o Deficiency payment of emergency living allowance at P60 per month under
PD 1678 and another P60 per month under Ministry Order No. 5;
o Service incentive leave pay, holiday pay and social amelioration bonus for 3
years for 1977 to 1979;
o The claims for 13th month pay for 1977 and ECOLA under PD 1123 and
525 are held in abeyance due to the application for exemption which is
unacted up to the present.
 On appeal, the Order was modified as follows:
o All non-pakyaw workers their claim for holiday and incentive leave pay for
the years 1977, 1978 and 1979;
o All complainants their 13th month pay for the years 1978 and 1979;
o All 'pakyaw' workers for the same period on days they worked for at least 8
hours and earned below P8.06 daily, their pay differentials.
o The claims for 13th month pay for 1977, as well as for ECOLA under PD
Nos. 525 and 1123 shall, pending outcome of respondent's application for
exemption therefrom, be held in abeyance
o Pakyaw workers are excluded from holiday and service incentive leave pay.
 Petitioners filed MR. Denied. Hence, this petition for certiorari.
RULING: Petition denied.
Whether MOLE erred in awarding pay differentials, holiday and service
incentive leave for pakyaw workers who are not regular employees but are merely
paid on piece-rate, contrary to Art. 82 of the Labor Code– NO.
 In 1976, PD No. 928 fixed a minimum wage of P7.00 for agricultural workers
in any plantation or agricultural enterprise irrespective of whether or not the
worker was paid on a piece-rate basis.
 However, effective July 1, 1978, the minimum wage was increased to P8.00
(Sec. 1, PD 1389). Subsequently, PD 1614 provided for a P2.00 increase in the
daily wage of all workers effective April 1, 1979. The petitioners admit that
those were the minimum rates prevailing then.
diminish in any way, supplements, or other employee benefits or favorable
practice being enjoyed by the employee at the time of promulgation of this
issuance."
NOTES:
 The failure of the Minister's decision to identify the pakyaw and non-pakyaw
workers does not render said decision invalid. The workers may be identified or
determined in the proceedings for execution of the judgment.

RELEVANT ISSUE:Whether MOLE erred in requiring the Framanlis to pay

13th month pay despite the fact that they (had substantially complied with the
requirement by extending yearly bonuses and other benefits in kind and in cash
to the complainants, pursuant to Section 3(c) of PD 851 which exempts the
employer from paying 13th month pay when its equivalent has already been
given
Petitioners
 Admitted that they failed to pay their workers 13th month pay in 1978 and 1979.
 They substantially complied with the law by giving their workers a yearly bonus and
other non-monetary benefits amounting to not less than 1/12th of their basic
salary, alleging such to be the equivalent of 13th month pay, in the form of:
1. a weekly subsidy of choice pork meat for only P9.00 per kilo and later increased
to P11 per kilo in March 1980, instead of the market price of P10 to P15 per kilo;
2. free choice pork meat in May and December of every year; and
3. free light or electricity.

Court
 Unfortunately, under Section 3 of PD No. 851, such benefits in the form of food
or free electricity, assuming they were given, were not a proper substitute for the
13th month pay required by law:
Section 3. Employees covered — The Decree shall apply to all employees except
to:
The term 'its equivalent' as used in paragraph (c) hereof shall include
Christmas bonus, mid-year bonus, profit-sharing payments and other cash
bonuses amounting to not less than 1/12 of the basic salary but shall not
include cash and stock dividends, cost of living allowances and all other
allowances regularly enjoyed by the employee, as well as non-monetary
benefits.
Where an employer pays less than 1/12 of the employee's basic salary, the
employer shall pay the difference.
 Neither may year-end rewards for loyalty and service be considered in lieu of 13th
month pay. Section 10 of the Rules and Regulations Implementing Presidential
Decree No. 851 provides:
Section 10. Prohibition against reduction or elimination of benefits. Nothing
herein shall be construed to authorize any employer to eliminate, or