GAA v.

CA reward of a day's labor or services for immediate or present support (Wakefield

December 3, 1985 | J. Patajo
By: Perry
SUMMARY:
Europhil won a suit for damages and sought to garnish the salary of the
petitioner. Petitioner objected to the garnishment and alleged that her salary
was exempted from execution under Article 1708 of the NCC. The SC ruled
otherwise stating that the exemption only applied to the wages of laborers and
salaries, were not exempted from execution. Finding that petitioner Gaa was not
a laborer, her salaries were not exempt from execution.
DOCTRINE:
The term "wages" as distinguished from "salary", applies to the compensation
for manual labor, skilled or unskilled, paid at stated times, and measured by the
day, week, month, or season, while "salary" denotes a higher degree of
employment, or a superior grade of services, and implies a position of office: by
contrast, the term wages " indicates considerable pay for a lower and less
responsible character of employment, while "salary" is suggestive of a larger
and more important service
FACTS:
Europhil was formerly a tenant in T.M. Kalaw Street, wherein the petitioner
Rosario Gaa was then the building administrator. In 1973, Europhil commenced
an action for damages against the petitioner “for having perpetrated certain acts
that Europhil Industries considered a trespass upon its rights…” The court
rendered judgment in favor of Europhil and after it had become final and
executory, a writ of garnishment was issued. A Notice of Garnishment was
served upon El Grande Hotel, where the petitioner was then employed,
garnishing her "salary, commission and/or remuneration." Petitioner filed a
motion to lift the garnishment alleging that her salaries, commission, and/or
remuneration are exempted from execution under Article 1708 of the NCC. The
motion was denied, and the CA affirmed the decision of the lower court. Hence,
this petition.
vs. Fargo).
We can then determine in what context the term “wages” is used in Article
1708, and this would refer to the compensation received by a laborer;
compensation for manual labor, skilled or unskilled, paid at stated times, and
measure by the day, week, month or season. This should be distinguished from
“salary” which denotes a higher degree of employment, or a superior grade of
service, and implies a position of office.
With these definitions laid down, the SC ruled that the petitioner was not
entitled to the right granted by Article 1708 by finding that she was not a
laborer within the meaning of the law. She was not an ordinary or rank and file
employee but “a responsibly place employee” of El Grande Hotel, "responsible
for planning, directing, controlling, and coordinating the activities of all
housekeeping personnel".
The SC further ruled that the legislature could not have intended the exemption
in Article 1708 of the New Civil Code to operate in favor of any but those who
are laboring men or women in the sense that their work is manual. Persons
belonging to this class usually look to the reward of a day's labor for immediate
or present support, and such persons are more in need of the exemption than
any others. Petitioner Rosario A. Gaa is definitely not within that class.
IN VIEW OF THE FOREGOING, We find the present petition to be without merit
and hereby AFFIRM the decision of the Court of Appeals, with costs against
petitioner.

ISSUES / HELD:
WON the salary, commission and/or remuneration of the petitioner are
exempted from execution. NO.

RULING:
The SC defined the word “laborer” as one whose work depends on mere
physical power to perform ordinary manual labor, and not one engaged in
services consisting mainly of work requiring mental skill or business capacity,
and involving the exercise of intellectual faculties (Oliver vs. Macon Hardware
Co.); or as one who performs menial or manual services and usually looks to the

SONGCO ET AL V. NLRC, ZUELLIG INC
March 23, 1990|MEDIALDEA, J.|Prepared by Ron San Juan
FACTS:
 Private respondent F.E. Zuellig (M), Inc., applied with the Department of Labor
a clearance to terminate the services of petitioners allegedly on the ground of
retrenchment due to financial losses.
 Petitioners opposed. At the last hearing of the case, petitioners manifested
that they are no longer contesting their dismissal. The parties then agreed that
the sole issue to be resolved is the basis of the separation pay due to
petitioners.
 Petitioners, who were in the sales force of Zuellig received monthly salaries of
at least P400.00. In addition, they received commissions for every sale they
made.
 The CBA entered into between Zuellig and F.E. Zuellig Employees Association,
of which petitioners are members, grants retirement gratuity to a separated
employee in an amount equivalent to one (1) month’s salary per year of
service. The same is provided under Art. 284 of the Labor Code, as well as its
implementing rules.
 The Labor Arbiter ordered Zuellig to pay the complainants separation pay
equivalent to their one month salary (exclusive of commissions,
allowances, etc.) for every year of service that they have worked with the
company.
 NLRC dismissed their appeal, hence, the present petition.
 Petitioners: In arriving at the correct and legal amount of separation pay due
them, whether under the Labor Code or the CBA, their basic salary, earned
sales commissions and allowances should be added together. They cited
Article 97(f) of the Labor Code which includes commission as part of one's
salary, to wit: "(f) ‘Wage’ paid to any employee shall mean the remuneration
or earnings, 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 and reasonable value, as determined by the
Secretary of Labor, of board, lodging, or other facilities customarily furnished
by the employer to the employee. ‘Fair and reasonable value’ shall not include
any profit to the employer or to any person affiliated with the employer."
 Zuellig: If it were really the intention of the Labor Code as well as its
implementing rules to include commission in the computation of separation
pay, it could have explicitly said so in clear and unequivocal
terms. Furthermore, in the definition of the term "wage," "commission" is
used only as one of the features or designations attached to the word
remuneration or earnings.
ISSUE: Whether or not earned sales commissions and allowances should be
included in the monthly salary of petitioners for the purpose of computation of
their separation pay. (YES)
HELD: Petition is GRANTED. Allowances and commissions are included in the
separation pay of petitioners. The case is remanded to the Labor Arbiter for the
proper computation of said separation pay.
 Article 97(f) by itself is explicit that commission is included in the definition of
the term "wage." It has been repeatedly declared by the courts that where the
law speaks in clear and categorical language, there is no room for
interpretation or construction; there is only room for application
 The ambiguity between Article 97(f), which defines the term 'wage' and Article
XIV of the Collective Bargaining Agreement, Article 284 of the Labor Code and
Sections 9(b) and 10 of the Implementing Rules, which mention the terms
"pay" and "salary," is more apparent than real. Broadly, the word "salary"
means a recompense or consideration made to a person for his pains or
industry in another man's business. Whether it be derived from "salarium," or
more fancifully from "sal," the pay of the Roman soldier, it carries with it the
fundamental idea of compensation for services rendered. Indeed, there is
eminent authority for holding that the words "wages" and "salary" are in
essence synonymous. "Salary," the etymology of which is the Latin word
"salarium," is often used interchangeably with "wage," the etymology of which
is the Middle English word "wagen." Both words generally refer to one and the
 same meaning, that is, a reward or recompense for services
performed. Likewise, "pay" is the synonym of "wages" and "salary.” Inasmuch
as the words "wages," "pay" and "salary" have the same meaning, and
commission is included in the definition of "wage," the logical conclusion,
therefore, is, in the computation of the separation pay of petitioners, their
salary base should include also their earned sales commissions.
 Granting, in gratia argumenti, that the commissions were in the form of
incentives or encouragement, still these commissions are direct remunerations
for services rendered which contributed to the increase of income of
Zuellig. Commission is 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 petitioners' wage or salary. We take judicial notice of the fact that
some salesmen do not receive any basic salary but depend on commissions and
allowances or commissions alone, although an employer-employee relationship
exists. Bearing in mind the preceding discussions, if We adopt the opposite
view that commissions do not form part of wage or salary, then, in effect, We
will be saying that this kind of salesmen do not receive any salary and
therefore, not entitled to separation pay in the event of discharge from
employment. This results in absurdity.
 Since the commissions in the present case were earned by actual market
transactions attributable to petitioners, these should be included in their
separation pay. In the computation thereof, what should be taken into account
is the average commissions earned during their last year of employment.
 In the end, "all doubts in the implementation and interpretation of the
provisions of the Labor Code including its implementing rules and regulations
shall be resolved in favor of labor"
Equitable Bank v. Sadac
June 8, 2006| Chico-Nazario, J.
By: Rose Ann
SUMMARY:
Sadac was appointed as the General Counsel of Equitable Bank. Later on,
lawyers of the bank accused Sadac of abusive conduct which resulted to the
termination of his services. Sadac then filed a complaint for illegal dismissal
with damages. The dismissal was finally declared as illegal. Sadac filed with
the Labor Arbiter a motion for execution of the decision and argued that in
the computation of backwages, salary increases should be deemed included.
DOCTRINE: (4-fold Test)
Backwages shall not include salary increases or differentials.
[in relation to the syllabus] The SC, in this case, reiterated the doctrine in Songco
that in labor law, the terms “wage” and “salary” are synonymous.
FACTS:
Sadac was appointed Vice President of the Legal Department of Equitable Bank
(Bank) effective 1 August 1981, and subsequently General Counsel thereof on 8
December 1981.
On 26 June 1989, nine lawyers of the Bank’s Legal Department, in a letter-petition to
the Chairman of the Board of Directors, accused Sadac of abusive conduct, inter alia,
and ultimately, petitioned for a change in leadership of the department.
On the ground of lack of confidence in Sadac, under the rules of client and lawyer
relationship, petitioner Bank instructed respondent Sadac to deliver all materials in
his custody in all cases in which the latter was appearing as its counsel of record.
Sadac requested for a full hearing and formal investigation but the same remained
unheeded.
Sadac filed a complaint for illegal dismissal with damages against the Bank and
individual members of the Board of Directors thereof. After learning of the filing of
the complaint, the Bank terminated the services of respondent Sadac.
Labor Arbiter dismissed the complaint for lack of merit. On appeal, the NLRC
reversed the Labor Arbiter and declared respondent Sadac’s dismissal as illegal.
SC held respondent Sadac’s dismissal illegal. It decreed:
WHEREFORE, the herein questioned Resolution of the NLRC is AFFIRMED with the following
MODIFICATIONS: That private respondent shall be entitled to backwages from termination of
employment until turning sixty (60) years of age (in 1995) and, thereupon, to retirement
benefits in accordance with law; that private respondent shall be paid an additional amount of
P5,000.00; that the award of moral and exemplary damages are deleted; and that the liability
herein pronounced shall be due from petitioner bank alone, the other petitioners being
absolved from solidary liability. No costs.
Pursuant thereto, Sadac filed with the Labor Arbiter a Motion for Execution thereof.
Per respondent Sadac’s computation, the total amount of the monetary award is
P6,030,456.59, representing his backwages and other benefits, including the general
increases which he should have earned during the period of his illegal termination.
Petitioner Bank disputed respondent Sadac’s computation. The Bank argued before
the Labor Arbiter that the award of salary differentials is not allowed, the established
rule being that upon reinstatement, illegally dismissed employees are to be paid
their backwages without deduction and qualification as to any wage increases or
other benefits that may have been received by their co-workers who were not
dismissed or did not go on strike.
On 2 August 1999, Labor Arbiter Jovencio Ll. Mayor, Jr. rendered an Order adopting
respondent Sadac’s computation. NLRC reversed the Labor Arbiter.
Court of Appeals reversed the NLRC decision and affirmed the decision of the LA.
ISSUES/HELD:
[relevant] WON periodic general increases in basic salary is included in computing
full backwages for illegally dismissed employees—NO. The award of backwages
EXCLUDES respondent Sadac’s claimed prospective salary increases.
RATIO:
Backwages are granted on grounds of equity for earnings which a worker or
employee has lost due to his illegal dismissal; it is not private compensation or
damages but is awarded in furtherance and effectuation of the public objective of
the Code. Backwages to be awarded to an illegally dismissed employee should not as
a general rule be diminished or reduced by the earnings derived by him elsewhere
during the period of his illegal dismissal.
Article 279 of the Labor Code mandates that an employee’s full backwages shall be
inclusive of allowance and other benefits or their monetary equivalent. The salary
increase cannot be interpreted as either as an allowance or a benefit. Salary
increases are not akin to allowances or benefits and cannot be confused with either.
Allowances and benefits are granted to the employee apart or separate from the
wage or salary. In contrast, salary increases are amounts which are added to the
employee’s salary as an increment thereto for varied reasons deemed appropriate
by the employer.
The term “backwages without qualification and deduction” means that the workers
are to be paid their backwages fixed as of the time of the dismissal or strike without
deduction for their earnings elsewhere during their layoff and without qualification
of their wages as thus fixed; unqualified by any wage increases or other benefits that
may have been received by their co-workers who are not dismissed or did not go on
strike. Awards including salary differentials are not allowed. The salary base properly
used should, however, include not only the basic salary but also the emergency cost
of living allowance and also transportation allowances if the workers are entitled
thereto.
There was no lawful decree or order supporting Sadac’s claim, such that his salary
increases can be made a component in the computation of backwages. What is
evident is that salary increases are a mere expectancy. They are, by its nature volatile
and are dependent on numerous variables, including the company’s fiscal situation
and even the employee’s future performance on the job, or the employee’s
continued stay in a position subject to management prerogative to transfer him to
another position where his services are needed. In short, there is no vested right to
salary increases. That respondent Sadac may have received salary increases in the
past only proves fact of receipt but does not establish a degree of assuredness that is
inherent in backwages. From the foregoing, the plain conclusion is that respondent
Sadac’s computation of his full backwages which includes his prospective salary
increases cannot be permitted.
Sadac cannot take exception by arguing that jurisprudence speaks only of wage and
not salary, and therefore, the rule is inapplicable to him. It is respondent Sadac’s
stance that he was not paid at the wage rate nor was he engaged in some form of
manual or physical labor as he was hired as Vice President of petitioner Bank. He
cites Gaa v. Court of Appeals where the Court distinguished between wage and
salary.
The reliance is misplaced. The distinction between salary and wage in Gaa was for
the purpose of Article 1708 of the Civil Code which mandates that, "[t]he laborer’s
wage shall not be subject to execution or attachment, except for debts incurred for
food, shelter, clothing and medical attendance." In labor law, however, the
distinction appears to be merely semantics. That wage and salary are synonymous
has been settled in Songco v. National Labor Relations Commission where it was
stated that :
Broadly, the word "salary" means a recompense or consideration made to a person
for his pains or industry in another man’s business. Whether it be derived from
"salarium," or more fancifully from "sal," the pay of the Roman soldier, it carries with
it the fundamental idea of compensation for services rendered. Indeed, there is
eminent authority for holding that the words "wages" and "salary" are in essence
synonymous. "Salary," the etymology of which is the Latin word "salarium," is often
used interchangeably with "wage", the etymology of which is the Middle English word
"wagen". Both words generally refer to one and the same meaning, that is, a reward
or recompense for services performed. Likewise, "pay" is the synonym of "wages" and
"salary".
Philex Gold Pilipinas Inc vs Philex Bulawan Supervisors union
August 25, 2005 | Azcuna, J.
By: Sam
SUMMARY:
Philex Supervisors Union (SEBA) filed a complaint with the NCMB Bacolod City
for the payment of wage differential and damages and the rectification of the
discriminatory salary structure and benefits between the ex-Padcal supervisors
(supervisors formerly assigned to Philex Mining in Benguet that were relocated
and assigned to Philex Gold) and the local hires.
DOCTRINE: (Equal pay for Equal Work)
The long honored legal truism of equal pay for equal work, meaning, persons
who work with substantially equal qualification, skill, effort and responsibility,
under similar conditions, should be paid similar salaries, has been
institutionalized in our jurisdiction. Such that if an employer accords employees
the same position and rank, the presumption is that these employees perform
equal work as borne by logic and human experience. The ramification is that (i)f
the employer pays one employee less than the rest, it is not for that employee to
explain why he receives less or why the others receive more. That would be
adding insult to injury. The employer has discriminated against that employee;
it is for the employer to explain why the employee is treated unfairly.
FACTS:
After the signing of a CBA between Philex Supervisors Union and Philex Gold,
Philex Gold assigned employees from Philex Mining in Benguet to Philex Gold as
supervisors (ex-Padcal supervisors) and it turned out that ex-Padcal
supervisors were maintained under a confidential payroll, receiving a different
set of benefits and higher salaries compared to the locally hired supervisors of
similar rank and classification doing parallel duties and functions.
Philex Supervisors Union (SEBA) filed a complaint with the NCMB Bacolod City
for the payment of wage differential and damages and the rectification of the
discriminatory salary structure and benefits between the ex-Padcal supervisors
and the local hires.
VA: This inequitable rates of pay being implemented by respondents result
naturally into the herein employers discriminatory wage policy which Article
248 (e) of the LABOR CODE prohibits and defines as UNFAIR LABOR PRACTICE
OF EMPLOYERS.
VA MR: NO discrimination in the determination of the rates of pay of the
supervisors. The Voluntary Arbitrator, however, readjusted the amount of
wages of local supervisors by adding or increasing their wages in the uniform
sum of P800.00 a month effective October 1, 1999 to erase the shadows of
inequities among the various grades of supervisors
CA: YES discriminatory. Philex Gold failed to prove that they did not
discriminate against the locally hired supervisors in paying them lower salaries
than the ex-Padcal supervisors.
ISSUES/HELD:
W/N the doctrine of "equal pay for equal work" should not remove
management prerogative to institute difference in salary within the same
supervisory level? NO
RATIO:
Petitioners admit that the same class of workers are doing the same kind of
work. This means that an ex-Padcal supervisor and a locally hired supervisor of
equal rank do the same kind of work. If an employer accords employees the
same position and rank, the presumption is that these employees perform equal
work. Hence, the doctrine of equal pay for equal work in International School
Alliance of Educators was correctly applied by the Court of Appeals.
Petitioners now contend that the doctrine of equal pay for equal work
should not remove management prerogative to institute difference in salary on
the basis of seniority, skill, experience and the dislocation factor in the same
class of supervisory workers doing the same kind of work.
In this case, the Court cannot agree because petitioners failed to adduce
evidence to show that an ex-Padcal supervisor and a locally hired supervisor of
the same rank are initially paid the same basic salary for doing the same kind of
work. They failed to differentiate this basic salary from any kind of salary
increase or additional benefit which may have been given to the ex-Padcal
supervisors due to their seniority, experience and other factors.
The records only show that an ex-Padcal supervisor is paid a higher
salary than a locally hired supervisor of the same rank. Therefore, petitioner
failed to prove with satisfactory evidence that it has not discriminated against
the locally hired supervisor in view of the unequal salary.

Sevilla Trading Company v A.V.A Tomas E. Semana, Sevilla
Trading Workers Union - SUPER
28 April 2004 | Puno, J.
By: Dudday
SUMMARY:
Petitioner Company included in its computation of 13 th month pay for over two years the
non-basic benefits of its employees. In 1999, it changed its computation by removing the
non-basic benefits thereby reducing the 13th month pay received by the employees. Said
change was allegedly pursuant to its discovery that the inclusion of non-basic benefits is
erroneous and what the law (PD 851) provides is only the basic benefits. Respondent
Union assailed the new computation as being in violation of Art. 100 of the Labor Code.
NCMB Voluntary Arbitrator Semana decided the dispute in favour of the Union. CA
affirmed VA Semana’s Decision. SC upheld the CA and declared that the act of including
non-basic benefits to the computation of the 13th month pay had ripened to a voluntary
act by the employer which it cannot peremptorily withdraw without violating Art. 100 of
the Labor Code.
DOCTRINE: Wages
Wages received by the employees pursuant to voluntary employer practice
(voluntary act of the employer) cannot be unilaterally withdrawn without
violating Art. 100 of the Labor Code.
FACTS:
1. Petitioner Sevilla Trading Company (Petitioner Company) is a domestic
corporation engaged in trading business. Respondent Sevilla Trading
Workers Union – SUPER (Respondent Union) is the duly organized and
registered union representing the daily piece-rate workers of the
Company.
2. For two to three years prior to 1999, Petitioner Company added the
th
following benefits to the base figure in its computation of the 13 month
pay of its employees: (a) overtime premium for regular overtime, legal and
special holidays, (b) legal holiday pay, premium pay for special holidays, (c)
night premium, (d) bereavement leave pay, (e) union leave pay, (f)
maternity leave pay, (g) paternity leave pay, (h) company vacation leave
and sick leave pay, and (i) cash conversion of unused company vacation
and sick leave. Such computation was allegedly entrusted to its office staff.
3. When the person in charge of the payroll was changed and after audit was
conducted, it discovered the error of including non-basic pay or other
th
benefits in the base figure used in the computation of the 13 month pay
of its employees. Citing the Rules and Regulations Implementing PD 851
th 1
(13 Month Pay Law) , Petitioner Company changed the computation of
1
Sec. 2(b) stated that: “Basic salary” shall include all remuneration or earnings paid
by an employer to an employee for services rendered but may not include cost-of-
th
the 13 month pay by excluding all the aforementioned benefits, thereby
th
reducing the employees’ 13 month pay.
4. Respondent Union contested the new computation and reduction of their
th
13 month pay. It alleged that Petitioner violated the rule prohibiting the
elimination or diminution of employees’ benefits as provided in Art.100 of
the Labor Code, as amended. The benefits initially included should be
th
included in the base figure in the computation of their 13 month pay.
th
5. Petitioner averred that the computation of the 13 month pay is based on
basic salary, excluding the benefits such as leaves with pay, pursuant to PD
851, as amended.
6. The parties submitted the dispute to Accredited Voluntary Arbitrator
Tomas E. Semana (A.V.A Semana) of the National Conciliation and
Mediation Board who decided in favor of the Union.
7. Instead of filing an appeal, Petitioner Company filed a Petition for
Certiorari under Rule 65 before the Court of Appeals. It claimed that
assuming the old computation will be upheld, the reversal to the old
computation can only be made to the extent of including non-basic
benefits actually included by petitioners in the base figure in the
th
computation of their 13 month pay in the prior years. CA denied and
dismissed the petition. Hence, the present petition for review on certiorari
with the Supreme Court.
ISSUES/HELD:
1. Whether the proper remedy for the Petitioner from the adverse decision
of the arbitrator is Petition for Certiorari under Rule 65 – No
2. Whether the leaves and other related benefits should be included in the
th
computation of the 13 month pay - Yes
RATIO:
1. The proper remedy from the adverse decision of the arbitrator is a petition
for review under Rule 43, not a Petition for Certiorari under Rule 65.
 Section 1, Rule 43 provides that appeals from awards, judgments, final
orders, or resolutions of or authorized by any quasi-judicial agency in
the exercise of its quasi-judicial functions, including voluntary
living allowances granted pursuant to P.D. No. 525 or Letter of Instruction No. 174,
profit-sharing payment, and all allowances and monetary benefits which are not
considered or integrated as part of the regular or basic salary of the employee at
the time of the promulgation of the Decree on December 16, 1975.

arbitrators authorized by law, should be made through the mode of
appeal under Rule 43.
 Rule 65 is an independent action that cannot be availed of as a
substitute for the lost remedy of an ordinary appeal, including that of
Rule 43, especially if such loss or lapse was occasioned by one’s own
neglect or error in the choice of remedies.
 In this case, Petitioner Sevilla Trading had a remedy of appeal but
failed to use it. Instead of filing an appeal within the 15 day
reglementary period from receipt of notice of the adverse decision,
Petitioner filed a “Manifestation and Motion for Time to File Petition
for Certiorari” and subsequently it filed a petition for certiorari under
Rule 65. Failing to appeal the AVA Semana’s adverse Decision, such
had become final and executory and the CA no longer had appellate
jurisdiction to alter, or much less, nullify the said Decision.
th
 The stance of mistake in the computation of 13 month pay alleged by
the Petitioner is unmeritorious. It is impossible that Petitioner only
discovered the error in the payroll in 1999 when its annual financial
statements are audited by certified public accountants.
 Petitioner also failed other relevant evidence to support its
contention. It only had its bare claim of mistake in the computation
and a copy of the 1997-2002 Collective Bargaining Agreement and an
alleged “corrected” computation of the thirteenth month pay. There
was no explanation why the inclusion of non-basic benefits was made
in the prior years by mistake despite the clarity of statute and
jurisprudence.
Petition is denied.

2. The leaves and other related benefits should be included in the

th
computation of the 13 month pay since their grant constitutes voluntary
employer practice which cannot be unilaterally withdrawn by the
2
employer without violating Article 100 of the Labor Code .
 This case is different from Globe Mackay Cable and Radio Corp. v NLRC
wherein the grant by the employer of the benefits through an
erroneous application of the law due to absence of clear
administrative guidelines was not considered a voluntary act which
cannot be unilaterally discontinued. In the present case, there has
been a clear ruling of the Court regarding the interpretation and
implementation of PD 851 as early as 1981 which was reiterated in
Davao Fruits Corporation v Associated Labor Unions [225 SCRA 562
(1993)] when it held that Supplementary Rules and Regulations
Implementing PD 851 put to rest all doubts in the computation of the
thirteenth month pay as early as January 16, 1976, barely one month
after the effectivity of PD 851 and its Implementing Rules.
 In line with the clarity of statute and jurisprudence, there is no reason
for any mistake in the construction or application of the said law. The
action of Petitioner Sevilla in still including for over two years non-
basic benefits of its employees may only be construed as a voluntary
act on its part. The length of time the company practice should have
been exercised to constitute employer practice which cannot
unilaterally withdrawn by the employer is of no moment and varies on
a case to case basis.

2
Art. 100. Prohibition against elimination or diminution of benefits. – Nothing in this
Book shall be construed to eliminate or in any way diminish supplements, or other
employee benefits being enjoyed at the time of promulgation of this Code.
AMERICAN WIRE AND CABLE DAILY RATED EMPLOYEES
UNION, petitioner, vs. AMERICAN WIRE AND CABLE CO., INC. and
THE COURT OF APPEALS, respondents.
April 29, 2005
CHICO-NAZARIO, J.:
FACTS:
 American Wire and Cable Co., Inc., is a corporation engaged in the
manufacture of wires and cables. There are two unions in this
company, the American Wire and Cable Monthly-Rated Employees
Union (Monthly-Rated Union) and the American Wire and Cable
Daily-Rated Employees Union (Daily-Rated Union).
 On 16 February 2001, an original action was filed before the NCMB
of the Department of Labor and Employment (DOLE) by the two
unions for voluntary arbitration. They alleged that the private
respondent, without valid cause, suddenly and unilaterally withdrew
and denied certain benefits and entitlements which they have long
enjoyed. These are the following:
a. Service Award;
b. 35% premium pay of an employees basic pay for the work
rendered during Holy Monday, Holy Tuesday, Holy Wednesday,
December 23, 26, 27, 28 and 29;
c. Christmas Party; and
d. Promotional Increase.
PETITIONERS:
 The petitioner submits that the withdrawal of the private respondent
of the 35% premium pay for selected days during the Holy Week and
Christmas season, the holding of the Christmas Party and its
incidental benefits, and the giving of service awards violated Article
100 of the Labor Code. The grant of these benefits was a
customary practice that can no longer be unilaterally withdrawn
by private respondent without the tacit consent of the petitioner.
The benefits in question were given by the respondent to the
petitioner consistently, deliberately, and unconditionally since time
immemorial. The benefits/entitlements were not given to petitioner
due to an error in interpretation, or a construction of a difficult
question of law, but simply, the grant has been a practice over a long
period of time. As such, it cannot be withdrawn from the petitioner at
respondents whim and caprice, and without the consent of the
former. The benefits given by the respondent cannot be considered as
a bonus as they are not founded on profit. Even assuming that it can
be treated as a bonus, the grant of the same, by reason of its long and
regular concession, may be regarded as part of regular
compensation.[20]
 With respect to the fifteen (15) employees who are members of
petitioner union that were given new job classifications, it asserts
that a promotional increase in their salaries was in order. Salary
adjustment is a must due to their promotion.[21]
 On respondent companys Revenues and Profitability Analysis for the
years 1996-2000, the petitioner insists that since the former was
unaudited, it should not have justified the companys sudden
withdrawal of the benefits/entitlements. The normal and/or legal
method for establishing profit and loss of a company is through a
financial statement audited by an independent auditor
RESPONDENT: grant of all subject benefits has not ripened into practice
that the employees concerned can claim a demandable right over them. The
grant of these benefits was conditional based upon the financial performance
of the company and that conditions/circumstances that existed before have
indeed substantially changed thereby justifying the discontinuance of said
grants. The companys financial performance was affected by the recent
political turmoil and instability that led the entire nation to a bleeding
economy. Hence, it only necessarily follows that the companys financial
situation at present is already very much different from where it was three or
four years ago
Voluntary Arbitrator: Held for respondent. No violation of Art. 100
CA: affirmed.
ISSUE:
WON the benefits cannot be withdrawn and respondent is in violation of Art
100 of the Labor Code (NO)
RATIO:
 ART. 100. PROHIBITION AGAINST ELIMINATION OR
DIMINUTION OF BENEFITS. Nothing in this Book shall be
construed to eliminate or in any way diminish supplements, or other
employee benefits being enjoyed at the time of promulgation of this
Code.
 A bonus is an amount granted and paid to an employee for his industry deliberate.[36] The downtrend in the grant of these two bonuses over
and loyalty which contributed to the success of the employers business the years demonstrates that there is nothing consistent about it.
and made possible the realization of profits. It is an act of generosity  Anent the Christmas party and raffle of prizes, We agree with the
granted by an enlightened employer to spur the employee to greater Voluntary Arbitrator that the same was merely sponsored by the
efforts for the success of the business and realization of bigger profits. respondent corporation out of generosity and that the same is dependent
The granting of a bonus is a management prerogative, something given on the financial performance of the company for a particular year
in addition to what is ordinarily received by or strictly due the recipient.  The additional 35% premium pay for work rendered during selected
Thus, a bonus is not a demandable and enforceable obligation, days of the Holy Week and Christmas season cannot be held to have
except when it is made part of the wage, salary or compensation of ripened into a company practice that the petitioner herein have a right to
the employee. demand. Aside from the general averment of the petitioner that this
 Based on the foregoing pronouncement, it is obvious that the benefit had been granted by the private respondent since time
benefits/entitlements subjects of the instant case are all bonuses which immemorial, there had been no evidence adduced that it had been a
were given by the private respondent out of its generosity and regular practice.
munificence. The additional 35% premium pay for work done during
 To hold that an employer should be forced to distribute bonuses
selected days of the Holy Week and Christmas season, the holding of
which it granted out of kindness is to penalize him for his past
Christmas parties with raffle, and the cash incentives given together
generosity.
with the service awards are all in excess of what the law requires each
employer to give its employees. Since they are above what is strictly  Having thus ruled that the additional 35% premium pay for work
due to the members of petitioner-union, the granting of the same rendered during selected days of the Holy Week and Christmas season,
was a management prerogative, which, whenever management sees the holding of Christmas parties with its incidental benefits, and the
necessary, may be withdrawn, unless they have been made a part of grant of cash incentive together with the service award are all bonuses
the wage or salary or compensation of the employees. which are neither demandable nor enforceable obligations of the private
 The benefits/entitlements in question were never subjects of any express respondent, it is not necessary anymore to delve into the Revenues and
agreement between the parties. They were never incorporated in the Profitability Analysis for the years 1996-2000 submitted by the private
Collective Bargaining Agreement (CBA). As observed by the Voluntary respondent.
Arbitrator, the records reveal that these benefits/entitlements have not
DISMISSED.
been subjects of any express agreement between the union and the
company, and have not yet been incorporated in the CBA. In fact, the
petitioner has not denied having made proposals with the private
respondent for the service award and the additional 35% premium pay to
be made part of the CBA
 The Christmas parties and its incidental benefits, and the giving of cash
incentive together with the service award cannot be said to have fixed
amounts. What is clear from the records is that over the years, there had
been a downtrend in the amount given as service award.[34] There was
also a downtrend with respect to the holding of the Christmas parties in
the sense that its location changed from paid venues to one which was
free of charge,[35] evidently to cut costs. Also, the grant of these two
aforementioned bonuses cannot be considered to have been the private
respondents long and regular practice. To be considered a regular
practice, the giving of the bonus should have been done over a long
period of time, and must be shown to have been consistent and
 Royal Plant Workers Union v. Coca-Cola Bottlers Phil- Cebu
April 2013 || Mendoza, J.
By: Chad
SUMMARY: The Union filed against the Coca-Cola Company because it removed
the chairs in the bottling lines which have been there for decades. They claimed
it violated Labor Code 100.
DOCTRINE: CA: Supplements arc privileges given to an employee which
constitute as extra remuneration besides his or her basic ordinary earnings and
wages. Employee benefits spoken of by Article 100 pertain only to those which
are susceptible of monetary considerations.
SC: Jurisprudence recognizes the exercise of management prerogatives. Labor
laws also discourage interference with an employer's judgment in the conduct
of its business. For this reason, the Court often declines to interfere in legitimate
business decisions of employers. The law must protect not only the welfare of
the employees, but also the right of the employers.
FACTS:
 Petitioner Coca-Cola Bottlers Philippines, Inc. (CCBPI) is a domestic
corporation engaged in the manufacture, sale and distribution of softdrink
products. One of several bottling plants is in Cebu City. There are 20
bottling operators who work for its Bottling Line 1 while there are 12-14
bottling operators who man Bottling Line 2, all male and members of Royal
Plant Workers Union (ROPWU).
o The bottling operators work in two shifts, 8am-5pm and 5pm until
the time production operations is finished, with its time varying
and may extend beyond 8 hours. However, the bottling operators
are compensated with overtime pay if the shift extends beyond
eight (8) hours.
 For Bottling Line 1, 10 bottling operators work for each shift while 6 to 7
bottling operators work for each shift for Bottling Line 2. Each shift has
rotations of work time and break time. Prior to September 2008, the
rotation is this: after two and a half (2 ½) hours of work, the bottling
operators are given a 30-minute break and this goes on until the shift ends.
o In September 2008 and up to the present, the rotation has changed
and bottling operators are now given a 30-minute break after one
and one half (1 ½) hours of work.
o In 1974, the bottling operators of then Bottling Line 2 were
provided with chairs upon their request.
 In 1988, the bottling operators of then Bottling Line 1 followed suit and
asked to be provided also with chairs. Their request was likewise granted.
 Sometime in September 2008, the chairs provided for the operators were
removed pursuant to a national directive of petitioner, because of the
directive with “I Operate, I Maintain, I Clean” program where they have to
move around and thus needed no more chairs. Also, no chairs will prevent
people from sleeping.
 ROPWU initiated the grievance machinery of the Collective Bargaining
Agreement (CBA) in November 2008, but it reached a deadlock. The parties
tried conciliation/mediation before the National Conciliation and Mediation
Board (NCMB), which failed, hence Arbitration Committee in October 2009,
the sole issue being the removal of chairs of the operators assigned at the
production/manufacturing line while performing their duties and
responsibilities.
Petitioner: The removal of the chairs is valid as it is a legitimate exercise of
management prerogative, it does not violate the Labor Code and it does not
violate the CBA it contracted with respondent.
Respondents: The bottling operators have been performing their assigned
duties satisfactorily with the presence of the chairs; the removal of the chairs
constitutes a violation of the Occupational Health and Safety Standards, the
policy of the State to assure the right of workers to just and humane conditions
of work as stated in Article 3 of the Labor Code and the Global Workplace Rights
Policy.
Arbitration Committee ruled against CCBPI, and ordered restoration, citing the
facts that:
1. the use of chairs by the operators had been a company practice for 34
years in Bottling Line 2, from 1974 to 2008, and 20 years in Bottling
Line 1, from 1988 to 2008;
2. that the use of the chairs by the operators constituted a company
practice favorable to the Union; that it ripened into a benefit after it had
been enjoyed by it;
3. that any benefit being enjoyed by the employees could not be reduced,
diminished, discontinued, or eliminated by the employer in accordance
with Article 100 of the Labor Code, which prohibited the diminution or
elimination by the employer of the employees’ benefit;
4. that jurisprudence had not laid down any rule requiring a specific
minimum number of years before a benefit would constitute a
voluntary company practice which could not be unilaterally withdrawn
by the employer;
5. it was puzzling why it took 34 and 20 years for CCBPI to be so solicitous
of the bottling operators’ safety that it removed their chairs so that they
would not fall asleep and injure themselves, and;
6. line efficiency was the result of many factors and it could not be
attributed solely to one such as the removal of the chairs.
CA countered the Arbitration Committee and said that:
1. the removal of the chairs from the manufacturing/production lines by
CCBPI is within the province of management prerogatives;
 2. it was part of its inherent right to control and manage its enterprise
effectively;
3. since it was the employer’s discretion to constantly develop measures
or means to optimize the efficiency of its employees and to keep its
machineries and equipment in the best of conditions, it was only
appropriate that it should be given wide latitude in exercising it.
It was mere exercise of management prerogative. Without the chairs, the
bottling operators could efficiently supervise these machineries’ operations
and maintenance. It would also be beneficial for them because the working
time before the break in each rotation for each shift was substantially
reduced from two and a half hours (2 ½ ) to one and a half hours (1 ½)
before the 30-minute break. Chair removal was done with the best
intention.
ISSUES:
WON the CA erred in allowing Rule 43 as the proper remedy of challenging
the decision of the Voluntary Arbitrator Panel under the Labor Code- NO
Samahan ng mga Manggagawa sa Hyatt NUWHRAIN-APL v. Bacungan: A
decision or award of a voluntary arbitrator is appealable to the CA via
petition for review under Rule 43. The decision or award of the
voluntary arbitrator or panel of arbitrators should likewise be
appealable to the Court of Appeals, in line with the procedure outlined in
Revised Administrative Circular No. 1-95 (now embodied in Rule 43 of
the 1997 Rules of Civil Procedure), just like those of the quasi-judicial
agencies, boards and commissions enumerated therein, and consistent
with the original purpose to provide a uniform procedure for the
appellate review of adjudications of all quasi-judicial entities.
Alcantara, Jr. v. Court of Appeals: In Section 9, Batas Pambansa Blg. 129, as
amended by Republic Act No. 7902: (3) Exclusive appellate jurisdiction
over all final judgments, decisions, resolutions, orders or awards of
Regional Trial Courts and quasi-judicial agencies, instrumentalities,
boards or commissions, including the Securities and Exchange
Commission, the Employees’ Compensation Commission and the Civil
Service Commission, except those falling within the appellate
jurisdiction of the Supreme Court in accordance with the Constitution,
the Labor Code of the Philippines under Presidential Decree No. 442, as
amended, the provisions of this Act and of subparagraph (1) of the third
paragraph and subparagraph (4) of the fourth paragraph of Section 17 of
the Judiciary Act of 1948.’
Sec 3, Rule 43 of the 1997 Rules of Civil Procedure:
SEC. 3. Where to appeal. - An appeal under this Rule may be taken to the
Court of Appeals within the period and in the manner therein provided,
whether the appeal involves questions of fact, of law, or mixed questions
of fact and law
WON the CA abused its discretion in setting aside the decision of the
Arbitration Committee- NO
Union: management prerogatives are not absolute but subject to certain
limitations found in law, a collective bargaining agreement, or general
principles of fair play and justice.
SC: Management is free to regulate, according to its own discretion and
judgment, all aspects of employment, including hiring, work assignments,
working methods, time, place, and manner of work, processes to be
followed, supervision of workers, working regulations, transfer of
employees, work supervision, lay-off of workers, and discipline, dismissal
and recall of workers. The exercise of management prerogative, however,
is not absolute as it must be exercised in good faith and with due regard
to the rights of labor.
CCBPI removed the operators’ chairs pursuant to a national directive and in line
with its “I Operate, I Maintain, I Clean” program, launched to enable the
Union to perform their duties and responsibilities more efficiently. The
chairs were not removed indiscriminately. They were carefully studied
with due regard to the welfare of the members of the Union. The removal
of the chairs was compensated by: a) a reduction of the operating hours
of the bottling operators from a two-and-one-half (2 ½)-hour rotation
period to a one-and-ahalf (1 ½) hour rotation period; and b) an increase
of the break period from 15 to 30 minutes between rotations. It was
made with good intentions and no violation of labor laws. Article 13211
thereof, only requires employers to provide seats for women.
Importantly, prolonged sitting is a risk factor for poor health and early death,
even among those who meet, or exceed, national activity guidelines.” No
provision in the CBA also provided for chairs.
The rest time having been increased, no violation of general principles of justice
and fair play.
The term “benefits” mentioned in the non-diminution rule refers to monetary
benefits or privileges given to the employee with monetary equivalents,
not chairs, so no violation of Art 100, Labor Code. Some of these cases are:
Eastern Telecommunication Phils. Inc. v. Eastern Telecoms Employees
Union, where the case involves the payment of 14th, 15th and 16th
month bonuses; Central Azucarera De Tarlac v. Central Azucarera De
Tarlac Labor Union-NLU, regarding the 13th month pay, legal/special
holiday pay, night premium pay and vacation and sick leaves; TSPIC Corp.
v. TSPIC Employees Union, regarding salary wage increases; and
American Wire and Cable Daily Employees Union vs. American Wire and
Cable Company, Inc., involving service awards with cash incentives,
premium pay, Christmas party with incidental benefits and promotional
increase.
DISPOSITIVE: The petition is DENIED.
Nasipit Lumber Company, Inc. v. National Wages and
Productivity Commission
April 27, 1998
Panganiban, J.:
Doctrine: The Labor Code, as amended by the Wage Rationalization Act (RA 6727),
grants the National Wages and Productivity Commission (NWPC) the power to
prescribe rules and guidelines for the determination of appropriate wages in the
country. Hence, the guidelines issued by the Regional Tripartite Wages and
Productivity Boards (RTWPB) without approval of or, worse, contrary to those
promulgated by the NWPC are ineffectual, void, and cannot be the source of rights
and privileges.
FACTS:
 The Region X [Tripartite Wages and Productivity] Board issued Wage Order
No. RX-01 which provides the increase in minimum wage rates applicable
to workers and employees in the private sector in Northern Mindanao
(Region X) (P13.00/day for Agusan del Norte, Bukidnon, Misamis Oriental,
and the Cities of Butuan, Gingoog, and Cagayan de Oro; P11.00/day for
Agusan del Sur, Surigao del Norte and Misamis Occidental, and the Cities of
Surigao Oroquieta, Ozamis and Tangub; and P9.00/day for Camiguin).
 Nasipit Lumber Company, Inc. (NALCO), Philippine Wallboard Corporation
(PWC), and Anakan Lumber Company (ALCO), claiming to be separate and
distinct from each other but for expediency and practical purposes, jointly
filed an application for exemption from the Wage Orders as distressed
establishments and based the exemption on Guidelines No. 3 issued by the
herein Board, specifically Sec. 3(2) thereof which, among others, provides:
For purposes of this Guidelines the following
criteria to determine whether the applicant-firm is
actually distressed shall be used.
xxx xxx xxx
2. Establishment belonging to distressed
industry - an establishment that is engaged in an
industry that is distressed due to conditions beyond
its control as may be determined by the Board in
consultation with DTI and NWPC.
 Petitioners aver that they are engaged in logging and
integrated wood processing industry but are distressed
due to conditions beyond their control, to wit: 1)
Depressed economic conditions due to worldwide
recession; 2) Peace and order and other emergency-
related problems causing disruption and suspension of
normal logging operations; 3) Imposition of environmental
fee for timber production in addition to regular forest
charges; 4) Logging moratorium in Bukidnon; 5) A
reduction in the annual allowable volume of cut logs of
NALCO& ALCO by 59%; 6) Highly insufficient raw material
supply; 7) Extraordinary increases in the cost of fuel, oil,
spare parts, and maintenance; 8) Excessive labor
cost/production ratio that is more or less 47%; and 9)
Lumber export ban.
 Private respondent unions jointly opposed the application
for exemption on the ground that said companies are not
distressed establishments since their capitalization has not
been impaired by 25%.
 RTWPB approved the applicants’ joint application for
exemption citing liquidity problems and business decline in
the wood-processing industry.
 Private respondents lodged an appeal with the NWPC,
which reversed the applications of herein petitioners.
Guidelines No. 3 could not be used as valid basis for
granting their application for exemption since it did not
pass the approval of the NWPC.
 Hence, this petition.
ISSUE:
WON a guideline issued by an RTWPB without the approval of or, worse, contrary to
the guidelines promulgated by the NWPC is valid?
HOLDING/RATIO:
NO.
 Article 121 of the Labor Code lists the powers and functions of the NWPC.
Which includes that the Commission has the power to (c) To prescribe rules
and guidelines for the determination of appropriate minimum wage and
productivity measures at the regional, provincial or industry levels; (d) To
review regional wage levels set by the Regional Tripartite Wages and
Productivity Boards to determine if these are in accordance with prescribed
guidelines and national development plans; among others. Article 122 of
the Labor Code, on the other hand, prescribes the powers of the RTWPB,
one of which is (b) to determine and fix minimum wage rates applicable in
 their region, provinces or industries therein and to issue the corresponding
wage orders, subject to guidelines issued by the Commission.
 The foregoing clearly grants the NWPC, not the RTWPB, the power to
"prescribe the rules and guidelines" for the determination of minimum
wage and productivity measures. While the RTWPB has the power to issue
wage orders under Article 122 (b) of the Labor Code, such orders are
subject to the guidelines prescribed by the NWPC. Significantly, the NWPC
authorized the RTWPB to issue exemptions from wage orders, but subject
to its review and approval. Since the NWPC never assented to Guideline
No. 3 of the RTWPB, the said guideline is inoperative and cannot be used
by the latter in deciding or acting on petitioners' application for exemption.
 To allow RTWPB Guideline No. 3 to take effect without the approval of the
NWPC is to arrogate unto RTWPB a power vested in the NWPC by Article
121 of the Labor Code, as amended by RA 6727. If a discrepancy occurs
"between the basic law and an implementing rule or regulation, it is the
former that prevails." This is so because the law cannot be broadened by a
mere administrative issuance. It is axiomatic that "[a]n administrative
agency cannot amend an act of Congress." Article 122 (e) of the Labor
Code cannot be construed to enable the RTWPB to decide applications for
exemption on the basis of its own guidelines which were not reviewed and
approved by the NWPC, for the simple reason that a statutory grant of
"powers should not be extended by implication beyond what may be
necessary for their just and reasonable execution. Official powers cannot
be merely assumed by administrative officers, nor can they be created by
the courts in the exercise of their judicial functions."
Aklan Electric Coop v. NLRC
January 25, 2000 | Gonzaga-Reyes, J.
By: Arrow
SUMMARY:
The Board of Directors of AKELCO allowed the temporary holding of office at Amon
Theater, Kalibo, Aklan, on the ground that the office at Lezo, Aklan was dangerous and
unsafe. Majority of the employees including the herein complainants, continued to report
for work at Lezo, Aklan and were paid of their salaries. The complainants claimed that
transfer of office from Lezo, Aklan to Kalibo, Aklan was illegal thus the they remained
and continued to work at the Lezo Office until they were illegally locked out therefrom
by the respondents. Despite the illegal lock out however, complainants continued to
report daily to the location of the Lezo Office, prepared to continue in the performance of
their regular duties. Complainants who continuously reported for work at Lezo, Aklan
were not paid their salaries from June 1992 up to March 18, 1993. Court ruled they were
not entitled to their salaries for that period since it has been established that the
petitioner’s business office was transferred to Kalibo and all its equipments, records and
facilities were transferred thereat and that it conducted its official business in Kalibo
during the period in question. It was incumbent upon private respondents to prove that
they indeed rendered services for petitioner, which they failed to do.
DOCTRINE: (No Work, No Pay Principle)
The age-old rule governing the relation between labor and capital, or
management and employee of a "fair days wage for a fair days labor" remains as
the basic factor in determining employees wages. If there is no work performed
by the employee there can be no wage or pay unless, of course, the laborer was
able, willing and ready to work but was illegally locked out, suspended or
dismissed, or otherwise illegally prevented from working, a situation which we
find is not present in the instant case.
FACTS:
These are consolidated cases/claims for non-payment of salaries and wages,
13th month pay, ECOLA and other fringe benefits as rice, medical and clothing
allowances, submitted by complainant Rodolfo M. Retiso and 163 others, Lyn E.
Banilla and Wilson B. Sallador against respondents Aklan Electric Cooperative,
Inc. (AKELCO), Atty. Leovigildo Mationg in his capacity as General Manager;
Manuel Calizo, in his capacity as Acting Board President, Board of Directors,
AKELCO.
Complainants alleged that prior to the temporary transfer of the office of
AKELCO from Lezo Aklan to Amon Theater, Kalibo, Aklan, complainants were
continuously performing their task and were duly paid of their salaries at their
main office located at Lezo, Aklan.
On January 22, 1992, the Board of Directors of AKELCO allowed the temporary
transfer holding of office at Amon Theater, Kalibo, Aklan per information by
their Project Supervisor, Atty. Leovigildo Mationg, that their head office is
closed and that it is dangerous to hold office thereat Nevertheless, majority of
the employees including herein complainants continued to report for work at
Lezo Aklan and were paid of their salaries.
On February 6, 1992, the administrator of NEA, Rodrigo Cabrera, wrote a letter
addressed to the Board of AKELCO, that he is not interposing any objections to
the action taken by respondent Mationg
On February 11, 1992, an unnumbered resolution was passed by the Board of
AKELCO withdrawing the temporary designation of office at Kalibo, Aklan, and
that the daily operations must be held again at the main office of Lezo, Aklan;
That complainants who were then reporting at the Lezo office from January
1992 up to May 1992 were duly paid of their salaries, while in the meantime
some of the employees through the instigation of respondent Mationg
continued to remain and work at Kalibo, Aklan;
From June 1992 up to March 18, 1993, complainants who continuously
reported for work at Lezo, Aklan in compliance with the aforementioned
resolution were not paid their salaries;
On March 19, 1993 up to the present, complainants were again allowed to draw
their salaries; with the exception of a few complainants who were not paid their
salaries for the months of April and May 1993;
Allegations of the respondents:
1. That these complainants voluntarily abandoned their respective
work/job assignments, without any justifiable reason and without notifying the
management of the Aklan Electric Cooperative, Inc. (AKELCO), hence the
cooperative suffered damages and systems loss;
2. That the complainants herein defied the lawful orders and other
issuances by the General Manager and the Board of Directors of the AKELCO.
These complainants were requested to report to work at the Kalibo office x x x
but despite these lawful orders of the General Manager, the complainants did
not follow and wilfully and maliciously defied said orders and issuance of the
General Manager; that the Board of Directors passed a Resolution resisting and
denying the claims of these complainants, x x x under the principle of "no work
no pay" which is legally justified; That these complainants have "mass leave"
from their customary work on June 1992 up to March 18, 1993 and had a "sit-
down" stance for these periods of time in their alleged protest of the
appointment of respondent Atty. Leovigildo Mationg as the new General
Manager of the Aklan Electric Cooperative, Inc. (AKELCO) by the Board of
Directors and confirmed by the Administrator of the National Electrification
Administration (NEA), Quezon City; That they engaged in " . . . slowdown mass
leaves, sit downs, attempts to damage, destroy or sabotage plant equipment and
facilities of the Aklan Electric Cooperative, Inc. (AKELCO)."
LA: Dismissed the complaint
NLRC: Reversed decision, held that the workers are entitled to unpaid wages
from June 16, 1992 to March 18, 1993
ISSUES/HELD:
WON private respondents refused to work under the lawful orders of the
petitioner AKELCO management; hence they are covered by the "no work, no
pay" principle and are thus not entitled to the claim for unpaid wages from June
16, 1992 to March 18, 1993. YES, they are not entitled to the unpaid wages.
NLRC decision is reversed and set aside
RATIO:
Public respondent based its conclusion on the following: (a) the letter dated
April 7, 1993 of Pedrito L. Leyson, Office Manager of AKELCO addressed to
AKELCOs General Manager, Atty. Leovigildo T. Mationg, requesting for the
payment of private respondents unpaid wages from June 16, 1992 to March 18,
1993; (b) the memorandum of said Atty. Mationg dated 14 April 1993, in
answer to the letter request of Pedrito Leyson where Atty. Mationg made an
assurance that he will recommend such request; (c) the private respondents
own computation of their unpaid wages. We find that the foregoing does not
constitute substantial evidence to support the conclusion that private
respondents are entitled to the payment of wages from June 16, 1992 to March
18, 1993.
On the other hand, petitioner was able to show that private respondents did not
render services during the stated period. Petitioners evidences show that on
January 22, 1992, petitioners Board of Directors passed a resolution
temporarily transferring the Office from Lezo, Aklan to Amon Theater, Kalibo,
Aklan upon the recommendation of Atty. Leovigildo Mationg, then project
supervisor, on the ground that the office at Lezo was dangerous and unsafe.
Such transfer was approved by then NEA Administrator, Rodrigo E. Cabrera, in a
letter dated February 6, 1992 addressed to petitioners Board of Directors. Thus,
the NEA Administrator, in the exercise of supervision and control over all
electric cooperatives, including petitioner, wrote a letter dated February 6,
1992 addressed to the Provincial Director PC/INP Kalibo Aklan requesting for
military assistance for the petitioners team in retrieving the electric
cooperatives equipments and other removable facilities and/or fixtures
consequential to the transfer of its principal business address from Lezo to
Kalibo and in maintaining peace and order in the cooperatives coverage area.
The foregoing establishes the fact that the continuous operation of the
petitioners business office in Lezo Aklan would pose a serious and imminent
threat to petitioners officials and other employees, hence the necessity of
temporarily transferring the operation of its business office from Lezo to Kalibo.
Such transfer was done in the exercise of a management prerogative and in the
absence of contrary evidence is not unjustified. With the transfer of petitioners
business office from its former office, Lezo, to Kalibo, Aklan, its equipments,
records and facilities were also removed from Lezo and brought to the Kalibo
office where petitioners official business was being conducted; thus private
respondents allegations that they continued to report for work at Lezo to
support their claim for wages has no basis.
The age-old rule governing the relation between labor and capital, or
management and employee of a "fair days wage for a fair days labor" remains as
the basic factor in determining employees wages. If there is no work performed
by the employee there can be no wage or pay unless, of course, the laborer was
able, willing and ready to work but was illegally locked out, suspended or
dismissed, or otherwise illegally prevented from working, a situation which we
find is not present in the instant case. It would neither be fair nor just to allow
private respondents to recover something they have not earned and could not
have earned because they did not render services at the Kalibo office during the
stated period.
FIVE J. TAXI v. NLRC, DOMINGO MALDIGAN and GILBERTO SABSALON
August 22, 1994/ Regalado, J.
By Cate Alegre
Summary:
Respondents are claiming their accumulated deposits and car wash payments from their
previous employer Five J Taxi. NLRC granted this. SC stated that deposits are not illegal under
Art. 114 but must be returned since when they stopped working for Five J, the purpose for
which the deposits were made no longer existed. As for car wash payments, these are part of
the taxi industry and thus not illegal.
Facts:
 Petitioner Five J Taxi and/or Juan Armamento filed a special civil action for certiorari
to annul the decision of the NLRC ordering them to pay respondents Maldigan and
Sabsalon their accumulated deposits and car wash payments
 Respondents Domingo Maldigan and Gilberto Sabsalon were hired by Five J Taxi as
taxi drivers – 4 days weekly on a 24-hour shifting schedule
o Required to pay the daily “boundary” (P700 for aircon taxis and P450 for non-
aircon), P20 for car washing and P15 deposit to answer for any deficiency in their
boundary for every actual working day
 Less than 4 months after Maldigan was hired as an extra driver, he already failed to
report for work for unknown reasons. Five J later learned that he was working for
“Mine” of Gold Taxi.
 Sabsalon while driving was held up by his armed passenger on September 6, 1983, who
took all his money and stabled him. He was hospitalized and later went home to
recuperate.
o He was re-admitted in January 1987 but his working schedule was made on an
“alternative basis”. However he failed to report for several occasions. He also
failed to remit his boundary worth P700 and abandoned his taxicab in Makati
without fuel refill worth P300. Despite repeated requests to report for work, he
refused. He then worked for “Bulaklak Company”
 1989 – Maldigan requested for the reimbursement of his daily cash deposits for 2 years
which was denied by Five J as his deposits were not even enough to cover the amount
spent for the repairs of the taxi he was driving as per an alleged policy of the company
o Maldigan insited on the refund but Five J terminated his services
o Sabsalon claimed that his termination was effected when he refused to pay for
the washing of his taxi seat cover
 November 27, 1991 – respondents filed a complaint with the Manila Arbitration Office
of the NLRC charging the petitioners with illegal dismissal and illegal deductions.
 LA dismissed the complaint holding that it took private respondents two years to file
the same and such unreasonable delay was not consistent with the natural reaction of
a person who claimed to be unjustly treated, hence the filing of the case could be
interpreted as a mere afterthought.
 NLRC concurred with the LA stating that the respondents voluntarily left their jobs for
similar employment with other taxi operator and that they were not illegally
terminated. It however modified the decision by ordering Five J the accumulated
deposits and car wash payments
Issue
WON Respondents are entitled to their accumulated deposits and car wash payments?
Ratio
Cash Deposits – ONLY MALDIGAN WAS ALLOWED
 NLRC held that the P15.00 daily deposits made by respondents to defray any shortage
in their "boundary" is covered by the general prohibition in Article 114 of the Labor
Code against requiring employees to make deposits, and that there is no showing that
the Secretary of Labor has recognized the same as a "practice" in the taxi industry.
Consequently, the deposits made were illegal and the respondents must be refunded
therefor.
 Article 114 of the Labor Code is as follows:
Art. 114. Deposits for loss or damage. — No employer shall require his worker to
make deposits from which deductions shall be made for the reimbursement of loss
of or damage to tools, materials, or equipment supplied by the employer, except
when the employer is engaged in such trades, occupations or business where the
practice of making deposits is a recognized one, or is necessary or desirable as
determined by the Secretary of Labor in appropriate rules and regulations.
 The said article provides the rule on deposits for loss or damage to tools, materials or
equipments supplied by the employer. the same does not apply to or permit deposits
to defray any deficiency which the taxi driver may incur in the remittance of his
"boundary." Also, when private respondents stopped working for petitioners, the
alleged purpose for which petitioners required such unauthorized deposits no longer
existed. In other case, any balance due to private respondents after proper
accounting must be returned to them with legal interest
 As for the claim of Sabsalon, it was shown that from 1987-1991, he was able to
withdraw his deposits through vales or that he incurred shortages resulting to his
indebtedness in the amount of P3,448. Evidence shows that Maldigan had not
withdrawn the same and thus should be reimbursed the amount of his cash deposits
Car Wash Payments – NOT ALLOWED
 According to the LA, , there is no dispute that as a matter of practice in the taxi
industry, after a tour of duty, it is incumbent upon the driver to restore the unit he has
driven to the same clean condition when he took it out. Such practice is not illegal and
does not amount to an illegal deduction.
 Consequently, private respondents are not entitled to the refund of the P20.00 car
wash payments they made. It will be noted that there was nothing to prevent private
respondents from cleaning the taxi units themselves, if they wanted to save their
P20.00.
Attorney’s Fees – NOT ALLOWED
 Article 222 of the Labor Code, as amended by Section 3 of Presidential Decree No.
1691, states that non-lawyers may appear before the NLRC or any labor arbiter only (1)
if they represent themselves, or (2) if they represent their organization or the members
thereof. While it may be true that Guillermo H. Pulia was the authorized representative
of private respondents, he was a non-lawyer who did not fall in either of the foregoing
categories. Hence, by clear mandate of the law, he is not entitled to attorney's fees.
ATOK-BIG WEDGE MINING CO. INC. vs. ATOK-BIG WEDGE MUTUAL
BENEFIT ASSOCIATION
March 3, 1953| Labrador.
By: Ian
SUMMARY: An order of the CIR fixed the min. wage of the laborers of petition at
P3.20 and declared that the efficiency bonus should not be included in the wage.
Petitioner contends that the minimum wage should be pegged at P2.58 only
because as determined by CIR itself, that was the minimum amount that a
laborer and his family need. The SC ruled against the petitioner invoking that
the concept of a minimum wage does not pertain to the actual (and literal)
minimum amount that a laborer needs to survive. It must take into account the
contingencies of the times.
DOCTRINES:
1. On minimum wage: The law guarantees the laborer a fair and just wage.
The minimum must be fair and just. The "minimum wage" can by no
means imply only the actual minimum. Some margin or leeway must be
provided, over and above the minimum, to take care of contingencies,
such as increase of prices of commodities and increase in wants, and to
provide means for a desirable improvement in his mode of living.
2. On efficiency bonus: Whether or not bonus forms part of wages
depends upon the circumstances or conditions for its payment. 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, then it is part of the wage.
But if it is paid only if profits are realized or a certain amount of
productivity achieved, it can not be considered part of the wages.
FACTS: Respondent Association through the Court of Industrial Relations (CIR)
demanded from the petitioner various concessions among which was an
increase of P.50 in wages.
CIR Decision- granted increase up to P3.20 and declared that additional
compensation representing efficiency bonus should not be included as part of
the wage.
Petitioner appeals this CIR decision before the SC. It argues:
 As to the minimum wage:
o As found by the CIR, the laborer and his family at least need the
amount of P2.58 for food, this should be the basis for the
determination of his wage, not what, he actually spends.
o It is not justifiable to fix a wage higher than that provided by
Republic Act No. 602; and
o The respondent union made the demand in accordance with a
pernicious practice of claiming more after an original demand
is granted.
  As to the efficiency bonus:
o Should have been included in his (minimum) wage, in the same
manner as the value of living quarters.
ISSUES/HELD:
1. WON the minimum wage should only be P2.58. NO.
2. WON the efficiency bonus must be included in the computation of the
wage. NO.
RATIO: Refer to Doctrines.
In the case at bar:
1. Minimum Wage: That the P3 minimum wage fixed in the law is still far
below what is considered a fair and just minimum is shown by the fact
that this amount is only for the year after the law takes effect, as
thereafter the law fixes it at P4. Neither may it be correctly contended
that the demand for increase is due to an alleged pernicious practice.
Frequent demands for increase are indicative of a healthy spirit of
wakefulness to the demands of a progressing and an increasingly more
expensive world. We, therefore, find no reason or ground for disturbing
the finding contained in the decision fixing the amount of P3.20 as the
minimum wage.
2. Efficiency Bonus: In the case at bar, it is not payable to all but to
laborers only. It is also paid on the basis of actual production or actual
work accomplished. If the desired goal of production is not obtained, or
the amount of actual work accomplished, the bonus does not accrue. It
is evident that under the circumstances it is paid only when the labor
becomes more efficient or more productive. It is only an inducement
for efficiency, a prize therefor, not a part of the wage.
Apodaca v. NLRC
April 18, 1989 | Gancayco, J.
By: Jadd
Topical issue discussed in Ratio 1
SUMMARY:
Ernesto Apodaca was an Intrans Phils. Employee. Jose Mirasol persuaded
Apodaca to subscribe to 1,500 shares for a total of P150,00. Apodaca paid only
P37,500. He was appointed President and General Manager but subsequently
resigned. Apodaca filed a complaint for unpaid wages (among others.) Mirasol
and the company admitted that they owed him P17,060.17 but set it off against
his unpaid subscription. The LA sustained Apodaca’s claim (apparently ignored
the setoff). On appeal, the NLRC allowed the setoff. The SC upheld the LA’s
claim, holding that unpaid subscriptions are not among the deductions that may
be made against wages.
DOCTRINE:
 Generally, employers cannot make deductions from wages. Exceptions
to this are:
(1) A deduction to recompense the employer for his premium
payments, where the worker is insured with the employer’s
consent;
(2) For union dues where the worker or union’s right to checkoff has
been recognized or authorized in writing by the worker concerned;
and
(3) Where the law or SOLE’s regulations authorize the employer to do
so.
 An employee’s unpaid subscriptions cannot be set off against their
wages.
FACTS:
 Ernesto Apodaca was employed in Intrans Phils., Inc.
 August 28, 1985: Jose Mirasol persuaded Apocada to subscribe to 1,500
shares at P100 per share (total: P150,000)
 Apodaca made an initial payment of P37,500.
 September 1, 1986 (online copy says 1975 but I think it should be
1985. Will update when I get a hard copy): Apodaca was appointed
President and General Manager.
 January 2, 1986: Apodaca resigned.
 December 19, 1986: Apodaca filed a complaint for unpaid wages, cost
of living allowance, gasoline and representation expenses, and 1986
bonus, with the NLRC.
 Mirasol and the company admitted that they owed P17,060.17 but it
was set-off against his unpaid subscription.
 April 28, 1987: LA sustained Apodaca’s claim for P17,060.17.
  September 18, 1987: NLRC reversed LA’s decision and allowed the set-
off of the claim with the unpaid subscription.
 Apodaca goes up to the SC through a Petition for Certiorari.
ISSUES/HELD:
1) WON the wages could be set-off against the unpaid subscription – NO
2) WON the NLRC had jurisdiction to resolve the matter of the unpaid
subscriptions – NO
3) WON the unpaid subscriptions were due and payable – NO
RATIO:
1) No, the wages could not be set-off against the unpaid subscription
because it is not among the instances where employers may deduct
from employees’ wages.
A) Basis: Art. 113 of the LC:
No employer, in his own behalf or in behalf of any person, shall
make any deduction from the wages of his employees, except:
(a) 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;
(b) 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; and
(c) In cases where the employer is authorized by law or
regulations issued by the Secretary of Labor.
B) In this case (making my own discussion up since the Court only
cited the provision):
1. Unpaid subscriptions are not among the items that may be
deducted from wages;
2. There are no laws nor SOLE regulations that allow unpaid
subscriptions to be set off.
2) No, the NLRC did not have jurisdiction over the matter of unpaid
subscriptions since it is an intra-corporate dispute within the SEC’s
jurisdiction.
A) Basis: §5, SEC Reorganization Act (PD 902-A)
In addition to the regulatory and adjudicative functions of the
Securities and Exchange Commission over corporations,
partnerships and other forms of associations registered with it as
expressly granted under existing laws and decrees, it shall have
original and exclusive jurisdiction to hear and decide cases
involving.
(a) Devices or schemes employed by or any acts, of the board of
directors, business associates, its officers or partnership,
amounting to fraud and misrepresentation which may be
detrimental to the interest of the public and/or of the
stockholder, partners, members of associations or
organizations registered with the Commission;
(b) Controversies arising out of intra-corporate or partnership
relations, between and among stockholders, members, or
associates; between any or all of them and the corporation,
partnership or association of which they are stockholders,
members or associates, respectively; and between such
corporation, partnership or association and the state insofar as
it concerns their individual franchise or right to exist as such
entity;
(c) Controversies in the election or appointments of directors,
trustees, officers or managers of such corporations,
partnerships or associations. (Emphases supplied)
B) In this case: Disputes between stockholders and corporations
regarding unpaid subscriptions are intra-corporate disputes.
3) No, the unpaid subscriptions were not due and payable because there
was no call, or even just a notice, assuming the NLRC had jurisdiction
over the subject-matter.
A) Basis: §67, Corporation Code:
Subject to the provisions of the contract of subscription, the board
of directors of any stock corporation may at any time declare due
and payable to the corporation unpaid subscriptions to the capital
stock and may collect the same or such percentage thereof, in
either case with accrued interest, if any, as it may deem necessary.
Payment of any unpaid subscription or any percentage thereof,
together with the interest accrued, if any, shall be made on the date
specified in the contract of subscription or on the date stated in the
call made by the board. Failure to pay on such date shall render the
entire balance due and payable and shall make the stockholder
liable for interest at the legal rate on such balance, unless a
different rate of interest is provided in the by-laws, computed from
such date until full payment. If within thirty (30) days from the said
date no payment is made, all stocks covered by said subscription
shall thereupon become delinquent and shall be subject to sale as
hereinafter provided, unless the board of directors orders
otherwise. (Emphases supplied)
B) In this case:
1. There was no board resolution;
2. There was no notice of call to Apodaca
Jardin et al. v. NLRC
February 23, 2000 | Quisumbing, J.
By: Kiko
SUMMARY: This case involved a complaint for illegal dismissal filed by taxi drivers
against their operator. Their operator deducted P30 from their average daily net
earnings of P400 for expenses in washing the taxi units. For this reason, a labor union
was planned to be formed by the drivers. After learning of such plan, the operator
refused to let the drivers use its taxicabs.
DOCTRINE: Court ruled that the relationship under the boundary system is that
of employer-employee and not of lessor-lessee. The operators exercise
supervision and control over the drivers. The owner as holder of the certificate
of public convenience must see to it that the driver follows the route prescribed
by the franchising authority. The fact that the drivers do not receive fixed wages
but get only that in excess of the so-called "boundary" they pay to the
owner/operator is not sufficient to withdraw the relationship between them
from that of employer and employee.
FACTS:
1. Petitioners Angel Jardin, Demetrio Calagos, Urbano Marcos, Rosendo Marcos,
Luis delos Angeles, Joel Ordeniza, and Amado Centeno were drivers of private
respondent, Philjama International Inc. which is engaged in the operation of
“Goodman Taxi.”
2. Jardin et al. used to drive Philjama's taxicabs every other day on a 24-hour
work schedule under the boundary system. Under this arrangement, the Jardin
et al. earned an average of P400.00 daily. Nevertheless, private respondent
admittedly regularly deducts from petitioners, daily earnings the amount of
P30.00 supposedly for the washing of the taxi units.
3. Believing that the deduction is illegal, petitioners decided to form a labor
union to protect their rights and interests.
4. Upon learning about the plan, Philjama refused to let Jardin et al. drive their
taxicabs when they reported for work on August 6, 1991, and on succeeding
days.
5. Jardin et al. filed a complaint against Philjama for unfair labor practice, illegal
dismissal and illegal deduction of washing fees. LA Dismissed the complaint.
6. NLRC reversed the LA. NLRC declared that Jardin et al. are employees of
private respondent, and, as such, their dismissal must be for just cause and after
due process. It declared the Philjama guilty of illegal dismissal and accordingly
it is directed to reinstate Jardin et al.
7. First motion for reconsideration before NLRC was dismissed.
8. On the second motion for reconsideration filed by Philjama, NLRC however
ruled that it lacks jurisdiction over the case as petitioners and private
respondent have no employer-employee relationship. It held that the
relationship of the parties is leasehold which is covered by the Civil Code rather
than the Labor Code.
ISSUES/HELD:
WON an employer-employee relationship exists between Philjama and Jardin et
al.? No. Petitioners are undoubtedly employees of Philjama because as taxi
drivers they perform activities which are usually necessary or desirable in the
usual business or trade of their employer Philjama.
RATIO:
NLRC committed grave abuse of discretion
The phrase "grave abuse of discretion amounting to lack or excess of
jurisdiction" has settled meaning in the jurisprudence of procedure. It means
such capricious and whimsical exercise of judgment by the tribunal exercising
judicial or quasi-judicial power as to amount to lack of power. In labor cases, the
Court has declared in several instances that disregarding rules it is bound to
observe constitutes grave abuse of discretion on the part of labor tribunal.
Philjama exhausted all administrative remedies available to it by seeking
reconsideration of public respondent's decision dated April 28, 1994, which
public respondent denied. When private respondent filed a second motion for
reconsideration, public respondent should have forthwith denied it in
accordance with Rule 7, Section 14 of its New Rules of Procedure which allows
only one motion for reconsideration. As such, the second motion for
reconsideration filed by private respondent is indubitably a prohibited
pleading. The rationale for allowing only one motion for reconsideration from
the same party is to assist the parties in obtaining an expeditious and
inexpensive settlement of labor cases.
There is an employer-employee relationship
In Sara, et al., vs. Agarrado, et al. which similarly involved drivers and operators,
Court ruled that the relationship of the parties therein is more of a leasehold or
one that is covered by a charter agreement under the Civil Code rather than the
Labor Code. The court in that case found that there was no wage paid on the
drivers, and, instead, the drivers pay a certain fee for the use of the vehicle. The
court discussed that, under the boundary system, the driver takes out his unit
and pays the owner/operator a fee commonly called "boundary" for the use of
the unit.
In the case at bar, the Court remarked that the ruling in the Sara case goes
against prevailing jurisprudence. In a number of cases,3 the Court ruled that the
relationship between jeepney owners/operators on one hand and jeepney
drivers on the other under the boundary system is that of employer-employee
3
National Labor Union vs. Dinglasan, 98 Phil. 649, 652 (1996); Magboo vs.
Bernardo, 7 SCRA 952, 954 (1963); Lantaco, Sr. vs. Llamas, 108 SCRA 502, 514
(1981).
and not of lessor-lessee. In the lease of chattels, the lessor loses complete
control over the chattel leased although the lessee cannot be reckless in the use
thereof, otherwise he would be responsible for the damages to the lessor. In the
case of jeepney owners/operators and jeepney drivers, the operators exercise
supervision and control over the drivers. The management of the business is in
the owner's hands. The owner as holder of the certificate of public convenience
must see to it that the driver follows the route prescribed by the franchising
authority and the rules promulgated as regards its operation.
The fact that the drivers do not receive fixed wages but get only that in excess of
the so-called "boundary" they pay to the owner/operator is not sufficient to
withdraw the relationship between them from that of employer and employee.
Jardin et al. are undoubtedly employees of private respondent because as taxi
drivers they perform activities which are usually necessary or desirable in the
usual business or trade of their employer.
Termination was Illegal
Termination of employment must be effected in accordance with law, and must
comply with both substantive (just and authorized causes for termination) and
procedural requirements (twin requirements of notice and hearing). There was
no just and authorized cause and no notices were served on Jardin et al.
Under the law, an employee who is unjustly dismissed from work shall be
entitled to reinstatement without loss of seniority rights and other privileges
and to his full backwages, inclusive of allowances, and to his other benefits or
their monetary equivalent computed from the time his compensation was
withheld from him up to the time of his actual reinstatement.
Daily deduction for washing the taxi units are valid
With regard to the amount deducted daily for washing of the taxi units, such are
valid deductions. We note that after a tour of duty, it is incumbent upon the
driver to restore the unit he has driven to the same clean condition when he
took it out. Car washing after a tour of duty is indeed a practice in the taxi
industry and is in fact dictated by fair play. Hence, the drivers are not entitled to
reimbursement of washing charges.
Lakpue Drug v. Belga
20 October 2005 | Ynares-Santiago, J.
By: Jocs Dilag
SUMMARY:
Belga, an assistant clerk, went on an emergency leave because she was
supposed to bring her daughter to the hospital. On that same day, she also gave
birth. 2 days after, she was asked to return to work. She said that she cannot
because of her condition. Because of that, she was asked to attend a clarficatory
conference, where she also failed to attend since she just gave birth. 2 days after
such date, when she arrived in the office, she was dismissed on the spot. She
cries illegal dismissal in light of the circumstances. The Court sided with Belga,
stating that illegal dismissal is a harsh punishment for her lapse in judgment,
given that she just gave birth.
DOCTRINE: (Women empowerment in the SC)
While it may be true that Belga ought to have formally informed the company of
her impending maternity leave so as to give the latter sufficient time to find a
temporary replacement, her termination from employment is not
commensurate to her lapse in judgment.
FACTS:
Tropical hired Belga on 1 March 1995 as bookkeeper and subsequently
promoted as assistant cashier.
19 March 2001: Belga brought her daughter to PGH for treatment of broncho-
pneumonia. On her way to the hospital, she dropped by the house of her
Technical Manager to hand over document she worked on over the weekend
and notified the manager of her emergency leave. On the same day, she gave
birth.
22 March: Tropical summoned Belga to report back to work. Belga replied that
she could not comply because of her situation.
30 March: Another memo requiring her to return to work was sent, including a
scheduled clarificatory conference on 2 April. She did not attend such hearing
but asked to have it moved to 4 April.
4 April: Belga returned to work and attended the conference, where she was
informed of her dismissal effective that day.
Belga then complaied through the Public Assistance and Complaint Unit (PACU)
of the DOLE. Because of failed attempts to settle the case, the parties brought
the case before the NLRC-NCR.
Tropical’s Arguments: As “Treasury Assistant”, she was in a position not just
clerical but one imbued with trust and confidence. Since she concealed her
pregnancy from the company and did not apply for leave, causing disruption to
Tropical’s financial transactions, it was just proper to dismiss her on the ground
of loss of trust and confidence.
Grounds for terminating Belga:
1. Absence without official leave for 16 days;
2. Dishonesty for deliberately concealing pregnancy; and
3. Insubordination for deliberately refusing to heed and comply with
memos
LA: Belga was illegally dismissed.
NLRC: No, she was validly dismissed.
CA: Reverse. LA reinstated.
ISSUES/HELD:
WON Belga was illegally dismissed. YES, the penalty of dismissal is too harsh in
light of the circumstances obtaining in the case.
RATIO:
The court first defined terms used by Tropical to butress its decision for
terminating Belga.
Misconduct – A transgression of some established and definite rule of action, a
forbidden act, a dereliction of duty, willful in character, and implies wronfgul
intent and not mere error in judgment. In order for misconduct to be serious, it
must be of such grave and aggravated character and not merely trivial and
unimportant. Such misconduct, however serious, must be in connection with the
employee’s work to constitute just cause for separation.
As applied:
Belga’s absence for 16 days was justified considering that she had just delivered
a child, which can hardly be considered as forbidden or as a dereliction of duty.
The argument on concealment cannot fly as the pregnancy of Belga can hardly
escape notice. While there may be instances where the pregnancy may be
inconspicuous, it has not been sufficiently proven by Tropical that Belga’s case
is such.
Disobedience – Must be willful or intentional in order to constitute a just cause
for termination. Wilfullness is characterized by a wrongful and perverse mental
attitude rendering the employee’s act inconsistent with proper subordination.
As applied:
It was physically impossible for Belga to report to work and explain her absence
2 days after sha had given birth, as ordered.
Loss of trust and confidence
In order to dismiss employees by reason of loss of trust and confidence, it must
first be proven that the employee concerned holds a position of responsibility or
trust and confidence. Also, the act complained must be work-related. More
importantly,the loss of trust and confidence must be based on the willful breach
of the trust reposed in the employee. Breach of trust is willful if it is done
intentionally, knowngly, and purposely, without justifiable excuse.
As applied:
As an assitant cashier, it is clear that her duties and functions are essentially
clerical. Her work does not call for independent judgment or discretion. Hence,
her position cannot be considered as one of responsibility or imbued with trust
and confidence.
Further, Tropical has not satisfactorily shown how and to what extent it had
suffered damages because of Belgas absences. Also, it is undisputed that Belga
has worked for Tropical for 7 years without any blemish on her service record.
Her fidelity to her work is evident because even in the midst of an emergency,
she managed to transmit to the company the documents she worked on over the
weekend so that it would not cause any problem for the company. Thus, the
penalty of dismissal is too harsh in light of the circumstances obtaining in this
case. While it may be true that Belga ought to have formally informed the
company of her impending maternity leave so as to give the latter
sufficient time to find a temporary replacement, her termination from
employment is not commensurate to her lapse in judgment.
Even assuming that there was just cause for terminating Belga, her dismissal is
nonetheless invalid for failure of Tropical to observe the twin-notice
requirement. The March 21, 2001 memorandum merely informed her to report
for work and explain her absences. The March 30, 2001 memorandum
demanded that she report for work and attend a clarificatory conference. Belga
received the first memorandum but allegedly refused to receive the second.
An employee who was illegally dismissed from work is entitled to reinstatement
without loss of seniority rights, and other privileges and to his full backwages,
inclusive of allowances, and to his other benefits or their monetary equivalent
computed from the time his compensation was withheld from him up to the
time of his actual reinstatement. Thus, Belga is entitled to be reinstated to her
former or equivalent position and to the payment of full backwages from the
time she was illegally dismissed until her actual reinstatement.
Philippine Telegraph and Telephone Company v NLRC and
Grace de Guzman
May 23, 1997| Regalado, J
By: Monica
SUMMARY:
De Guzman was employed by PT&T under several Reliever Agreements. In her
job application form, she indicated that she was “single” under her civil status
although she was already married. Similar representations were made in other
agreements she signed with the company. When the company found out, the
branch supervisor sent her a memo asking her to explain the discrepancy and
reminded her of the company’s policy of not accepting married women. She was
eventually dismissed from the job. De Guzman filed a complaint for illegal
dismissal. LA ruled in her favor. NLRC affirmed. PT&T went up to the SC. SC
dismissed PT&T’s petition. It found that contrary to PT&T’s assertion, de
Guzman’s dismissal was due to her being a married woman and not because she
was dishonest regarding her civil status.
DOCTRINE:
A policy of not accepting married women as employees is not only in derogation
of the provisions of Art. 136 of the Labor Code on the right of a woman to be
free from any kind of stipulation against marriage in connection with her
employment, but likewise assaults good morals and public policy.
FACTS:
 Grace de Guzman was initially hired by petitioner PT&T as a reliever for a
fixed period from November 21, 1990 until April 20, 1991 while one C.F.
Tenorio was on maternity leave. Her employment was to be immediately
terminated upon the expiration of the agreed period.
 Thereafter, de Guzman’s services as reliever were again engaged by the
petitioner from June 10, 1991 to July 1, 1991 and from July 19, 1991 to
August 8, 1991, to replace Erlinda Dizon. Her services were terminated
after August 8, 1991.
 September 2, 1991: De Guzman was asked to join the company as a
probationary employee for 150 days. In the job application furnished to her,
she indicated that she was “single” under her civil status, although she had
contracted marriage a few months earlier.
 She made two similar representations in the two successive reliever
agreements she signed with the company. When PT&T learned about the
same, its branch supervisor in Baguio City sent a memo to de Guzman,
asking her to explain the discrepancy. She was also reminded of the
company’s policy of not accepting married women for employment.
 January 17, 1992: De Guzman replied to PT&T through a letter and stated
that she did not know the company’s policy on married women at that time
and that she had not deliberately hidden her true civil status.
 The company remained unconvinced by de Guzman’s explanations and
dismissed her from the company on January 29, 1992.
 De Guzman initiated a complaint for illegal dismissal, coupled with a claim
for non-payment of cost of living allowances (COLA) with the Regional
Arbitration Branch of the NLRC.
 During the preliminary conference, de Guzman volunteered information
that she had failed to remit the amount of P2,380.75 of her collections and
executed a promissory note in favor of PT&T.
 Labor Arbiter: Declared de Guzman as having already gained the status of
regular employee and was thus illegally dismissed. He also found the
ground relied upon by the company to be insufficient, as it was apparent
that she had been discriminated against on account of her having
contracted marriage in violation of company rules.
 NLRC: Upheld the LA but modified the decision of the LA with the
qualification that de Guzman deserved to be suspended for 3 months in
view of the dishonest nature of her acts.
 PT&T filed an MR with the NLRC which was denied.
 PT&T filed present case with the SC.
ISSUES/HELD:
1. Was de Guzman illegally dismissed? YES.
RATIO:
 The Constitution, cognizant of the disparity in rights between men and
women in almost all phases of social and political life, provides a gamut
of protective provisions, including Sec. 14, Art. II. Corollary thereto, Sec.
3, Art. XIII requires the State to afford full protection to labor and to
promote full employment and equality of employment opportunities
for all. Similarly, Sec. 14 of Art. III mandates that the state shall protect
working women through provisions for opportunities that would
enable them to reach their full potential.
 Corrective labor and social laws on gender inequality have also
emerged with more frequency in the years since the Labor Code was
enacted.
 It must also be noted that it is paramount in the due process scheme
that there be a constitutional guarantee of protection to labor and
security of tenure. Thus, an employer is required, as a condition sine
qua non prior to severance of the employment, to convincingly
establish, through substantial evidence, the existence of a valid and just
cause in dispensing with the services of such employee.
 In the case at bar, petitioner’s policy of not accepting or considering as
disqualified from work any woman worker who contracts marriage
runs afoul of the test of, and the right against, discrimination, afforded
all women workers by our labor laws and by no less than the
Constitution.
 Contrary to petitioner’s assertion that it dismissed private respondent  Parenthetically, the Civil Code provisions on the contract of labor state
from employment on account of her dishonesty, the record discloses that the relations between the parties, are not merely contractual,
clearly that her ties with the company were dissolved principally impressed as they are with so much public interest that the same
because of the company’s policy that married women are not qualified should yield to the common good. Neither capital nor labor should visit
for employment in PT&T, and not merely because of her supposed acts acts of oppression against the other, nor impair the interest or
of dishonesty. convenience of the public.
o Such can be clearly seen from the memorandum sent to her by o In the final reckoning, the danger of just such a policy against
the branch supervisor of the company, with the reminder, in marriage followed by petitioner PT&T is that it strikes at the
the words of the latter, that “you’re fully aware that the very essence, ideals and purpose of marriage as an inviolable
company is not accepting married women employee (sic), as it social institution and, ultimately, of the family as the
was verbally instructed to you.” foundation of the nation.
 De Guzman’s act of concealing the true nature of her status from PT&T
could not be properly characterized as willful or in bad faith as she was
moved to act the way she did mainly because she wanted to retain a
permanent job in a stable company. In other words, she was practically
forced by that very same illegal company policy into misrepresenting
her civil status for fear of being disqualified from work.
o While loss of confidence is a just cause for termination of
employment, it should not be simulated. It must rest on an
actual breach of duty committed by the employee and not on
the employer’s caprices. Furthermore, it should never be used
as a subterfuge for causes which are improper, illegal, or
unjustified.
 PT&T’s collateral insistence on the admission of private respondent
that she supposedly misappropriated company funds, as an additional
ground to dismiss her from employment, is somewhat insincere and
self-serving.
o Concededly, private respondent admitted in the course of the
proceedings that she failed to remit some of her collections,
but that is an altogether different story. However, the fact is
that she was dismissed solely because of her concealment of
her marital status, and not on the basis of that supposed
defalcation of company funds.
 Petitioner’s policy is not only in derogation of the provisions of Article
136 of the Labor Code on the right of a woman to be free from any kind
of stipulation against marriage in connection with her employment, but
it likewise assaults good morals and public policy, tending as it does to
deprive a woman of the freedom to choose her status, a privilege that
by all accounts inheres in the individual as an intangible and
inalienable right.
o Hence, while it is true that the parties to a contract may
establish any agreements, terms, and conditions that they may
deem convenient, the same should not be contrary to law,
morals, good customs, public order, or public policy.
Marites Bernardo, et al. v. NLRC and Far East Bank & Trust Co.
12 July 1999; Panganiban
Decision of the NLRC denying the claims of the employees is REVERSED. Far
Digest prepared by Jethro Koon
East Bank is ORDERED to pay back wages and separation pay to 27
employees out of the 43 plaintiffs as these had been regularized.
I. Facts
IV. Ratio
1. Bernardo and 42 others were deaf-mutes who were contracted by
Far East Bank as Money Sorters and Counters under uniformly
worded “Employment Contracts for Handicapped Workers”. They
began working for Far East at various points between 1988 and
1993. RA 7277 or the Magna Carta for Disabled Persons was
enacted in 1992.
2. The employment contract provided that there shall be a training
period of one (1) month during which the Bank will decide whether
to finish the contract which will run for a total of six (6) months
unless extended in writing by the company. 27 of the 43 plaintiffs in
this case had their contracts extended by Far East.
3. By 1994, they had all been dismissed. The reason given by the
company for this was the shift to nighttime sorting and counting of
money which would make it dangerous for these handicapped
employees to travel at night. They filed for illegal dismissal with the
Labor Arbiter.
4. The Labor Arbiter ruled in favor of Far East which ruling was
affirmed by the NLRC. The NLRC affirmed the ruling because the
complainants were hired as an accommodation by the company for
civic-oriented personalities under an employment contract as
specified by Article 80 of the Labor Code. Article 280 of the Labor
Code is therefore not controlling.
II. Issues
Whether a review of the factual findings may be allowed in a petition for
certiorari: No, but in deciding the case, the Court did not overturn any
factual findings but only reviewed the application of the NLRC of the law to
the said facts.
Whether plaintiffs are regular employees of the company: Yes, they are. 27
of the 43 plaintiffs were found to have been performing tasks necessary and
desirable to the business of the company for more than 6 months. These
were therefore held to be regular and entitled to back wages and separation
pay.
III. Holding
1. While plaintiffs were employed under a valid contract as specified
by Article 80 of the Labor Code relating to handicapped workers,
the fact that they had their contracts renewed indicated that they
were performing tasks necessary and desirable to the business and
were furthermore qualified to perform their tasks.
2. Under section 5 of RA 7277, a qualified disabled employee shall be
subject to the same terms and conditions of employment as
qualified able-bodied persons. Because of this provision, article 280
can now be made to apply. This article distinguishes between
regular and casual employees.
3. Applying the test laid down in De Leon v NLRC, 27 of the plaintiffs
were found to be regular employees since they were performing a
task necessary and desirable to the company’s business (counting
and sorting bills).
o The test in De Leon is whether the activity performed is
usually necessary or desirable to the business of the
employer. Also if the employee has been performing
the job for at least one year, this is proof that the job is
necessary and desirable.
4. Since the company failed to show that there was any just or
authorized cause for their termination, they are entitled to
backwages and reinstatement. However, since the job of sorting
money is no longer available and has been assigned back to the
tellers, plaintiffs are awarded separation pay instead of
reinstatement.
◦ RECAP: Of the 56 deaf-mute employees of Far East from 1988 to
1994, 43 are plaintiffs in this case. Of those 43, 27 had their
contracts renewed beyond the initial six month period and were
therefore qualified disabled employees under section 5. As a
result, they were entitled to the same terms and conditions as
able-bodied employees, removing them from the ambit of article
 80 and placing them under article 280. Applying that article,
their work of sorting bills was found necessary and desirable to
the bank and they were therefore regular employees.
5. Brent School v Zamora where the Court upheld fixed term
employment cannot apply in this case since the term limit in the
present contracts were premised on the fact that the employees
were disabled and the company had to determine their fitness for
the work. Since they had proven themselves qualified disabled
employees entitled to equal treatment under RA 7277, that premise
no longer applies
6. The other arguments of the respondent bank were that they were
merely accommodating the employees, that they did not go out of
their way to recruit them and that they were informed from the
start that they could not become regular employees. In addressing
these, the Court held that the character of the employment is not
determined by the stipulations of the contract or the reason for
hiring them but the nature of the work performed.
CENTURY CANNING COPORATION v. CA
August 17, 2007 | J. Carpio
By: Perry
SUMMARY:
Gloria Palad was hired as a fish cleaner under an apprenticeship agreement.
However, the apprenticeship agreement was executed before the
apprenticeship program was approved by the TESDA. The SC ruled that the
approval of the apprenticeship program was a condition sine qua non before a
valid apprenticeship agreement can be validly entered into.
FACTS:
On 15 July 1997, Gloria Palad was hired as a “fish cleaner” by the petitioner in
its tuna and sardines factory. 2 days later, the parties signed an apprenticeship
agreement. An apprenticeship program was submitted by the petitioner to
TESDA which was subsequently approved on 26 September 1997. Clearly, the
apprenticeship agreement was executed between the parties long before the
apprenticeship program was approved by TESDA.
According to the petitioner, a performance evaluation was conducted on Gloria
Palad on 15 November 1997 where she scored only 27.75% based on a 100%
performance indicator. Furthermore, petitioner alleged that Gloria incurred
numerous tardiness and absences. As a consequence thereof, petitioner
terminated the services of Gloria prompting her to file a complaint for illegal
dismissal.
The LA dismissed the complaint of Gloria and this was affirmed by the NLRC.
However, the CA reversed the ruling of the NLRC finding that Gloria was a
regular employee and was illegally dismissed. Hence, this petition filed by the
corporation to the SC.
ISSUE / HELD:
WON Gloria was a regular employee. YES.
WON Gloria was illegally dismissed. YES.
RULING:
Gloria was a regular employee
The Court reiterated the ruling in Nitto Enterprises v. NLRC, which held that an
apprenticeship program should first be approved by the DOLE before an
apprentice may be hired, otherwise the person hired will be considered a
regular employee. It is mandated that apprenticeship agreements entered into
by the employer and apprentice shall be entered only in accordance with the
apprenticeship program duly approved by the Minister of Labor and
Employment. Prior approval by the DOLE of the proposed apprenticeship
program is, therefore, a condition sine qua non before an apprenticeship
agreement can be validly entered into.
her alleged poor performance. In fact, Palad denies any knowledge of the
performance evaluation conducted and of the result thereof.
WHEREFORE, the Decision of the CA finding complainant to have been illegally
dismissed is AFFIRMED.

In this case, the apprenticeship agreement was entered into between the parties
before petitioner filed its apprenticeship program with the TESDA for approval.
Clearly, the apprenticeship agreement was enforced even before the TESDA
approved petitioner’s apprenticeship program. Thus, the apprenticeship
agreement is void because it lacked prior approval from the TESDA.

The TESDA’s approval of the employer’s apprenticeship program is required

before the employer is allowed to hire apprentices. Prior approval from the
TESDA is necessary to ensure that only employers in the highly technical
industries may employ apprentices and only in apprenticeable occupations.

Since Palad is not considered an apprentice because the apprenticeship

agreement was enforced before the TESDA’s approval of petitioner’s
apprenticeship program, Palad is deemed a regular employee performing the
job of a "fish cleaner." Clearly, the job of a "fish cleaner" is necessary in
petitioner’s business as a tuna and sardines factory.

Gloria was illegally dismissed

To constitute valid dismissal from employment, two requisites must concur: (1)
the dismissal must be for a just or authorized cause; and (2) the employee must
be afforded an opportunity to be heard and to defend himself.

Habitual absenteeism and poor efficiency of performance are among the valid
causes for which the employer may terminate the apprenticeship agreement
after the probationary period.

However, in the case at bar, there was no clear and sufficient evidence to
warrant her dismissal. There was an absence of any written warnings given to
the complainant. Moreover, there was doubtful authenticity and/or credibility
with respect to the “performance evaluation” made. The SC could only infer that
said evaluation was made belatedly, specifically, after the filing of the case.

Under Article 227 of the Labor Code, the employer has the burden of proving
that the termination was for a valid or authorized cause, and the petitioner
failed to substantiate its claim that Palad was terminated for valid reasons.

Furthermore, Palad was not accorded due process. Even if petitioner did
conduct a performance evaluation on Palad, petitioner failed to warn Palad of