Iran vs NLRC

Facts:

- Petitioner Iran is engaged in the business of softdrink merchandising and distribution in

Mandaue, Cebu employing drivers who double as salesman, truck helpers, and non-field
personnel. Petitioner hired Petralba et. al as drivers/salesmen and Tecson et al as truck helpers.
- Drivers/salesmen drove petitioners delivery trucks and promoted, sold and delivered softdrinks
to various outlets. The truck helpers assisted in the delivery of softdrinks to the different outlets
covered by the driver/salesmen.
- Salesmen were compensated by (P0.10/case of regular softdrinks); (P0.12/Family size). Truck
Helpers(P0.08/regular; P0.10/Family size)
- When petitioner was auditing, he discovered some shortages and irregularities allegedly
committed by respondents. Pending the investigation, he required the latter to report to work
everyday but were not allowed to go their respective routes. After a few days, the latter stopped
going to work and petitioner concluded they had abandoned their employment. He terminated
them and filed estafa
- Respondents filed complaints for illegal dismissal, illegal deduction, underpayment of wages,
premium pay for holiday and rest day, holiday pay, service incentive leave pay, 13th month pay,
allowances, separation pay, recovery of cash bond, damages and attorneys fees.
- LA held that respondents were validly terminated; however the minumum wage was not
complied with. Both appealed to NLRC affirmed with modification the ruling of the court a quo.

ISSUE: W/N commissions are included in determining compliance with the minimum wage
requirement

HELD:

The definition of wage under Article 97 (f) explicitly includes commissions as part of
wages. While commissions are, indeed, incentives or forms of encouragement to inspire
employees to put a little more industry on the job, still these are direct remunerations for services
rendered. In fact, commissions have been defined as the recompense, compensation or reward
of an agent, salesman, executor, trustee, receiver, factor, broker or bailee, when the same is
calculated as a percentage on the amount of his transactions or on the profit to the principal. The
nature of the work of a salesman and the reason for such type of remuneration for services
rendered demonstrate clearly that commissions are part of a salesmans wage or salary.

Thus, the commissions earned by private respondents in selling softdrinks constitute part of the
compensation or remuneration paid to drivers/salesmen and truck helpers for serving as such,
and hence, must be considered part of the wages paid them.

Likewise, there is no law mandating that commissions be paid only after the minimum wage has
been paid to the employee. Verily, the establishment of a minimum wage only sets a floor below
which an employees remuneration cannot fall, not that commissions are excluded from wages in
determining compliance with the minimum wage law. It can, be inferred that were said
commissions equal to or even exceed the minimum wage, the employer need not pay, in addition,
the basic minimum pay prescribed by law. It follows then that commissions are included in
determining compliance with minimum wage requirements.