JURISPRUDENCE ON PIECE-RATE

WORKERS ENTITLEMENT TO
STATUTORY BENEFITS:

The Makati Haberdashery Case
(November 15, 1989)

The Labor Congress Case
(May 21, 1998)


Makati Haberdashery, Inc. vs. NLRC, et al
Facts:
Workers of Makati haberdashery Inc. as
tailors, seamstresses, sewers, basters and
plantsadoras are paid on piece-rate basis and daily
allowance.
On July 20, 1984, Sandigan ng Manggagawang
Pilipino filed a complaint for underpayment of the
minimum wage, non payment of OT, Holiday pay,
Service Incentive pay, 13
th
month pay, and benefits
under wage orders.

Labor Arbiter Dismissed the claims but
ruled that haberdashery violated the decrees on
the COLA, SIL pay and the 13
th
month pay.

The employer appealed to NLRC. Losing
there again, it went to the High Court alleging
the following errors:




1. That E-E relationship exists between
petitioner haberdashery and respondent
workers.

2. That respondent workers are entitled to
monetary claims despite the finding that they
are not entitled to minimum wage.
RULING:
The High Court ruled that the workers are
regular employees, although paid on piece-rate
basis.
Private respondents are entitled to:
Minimum Wage
COLA
13
th
month pay


Private respondents are not entitled to:

SIL pay ( Sec. 1 [d] Rule V )
Holiday Pay - (Sec. 1 [e] Rule IV)
as piece-rate workers being paid at a fixed
amount for performing work irrespective of time
consumed in performance thereof; fall under
one of the exceptions stated in Implementing
Regulations, Book III, Labor code.

Labor Congress of the Philippines (LCP)
vs. NLRC, Empire Food Products, et al.
(May 21, 1998)
FACTS:
99 petitioners (employees of EFP) filed money
claims and violations of labor standards laws and
another petition seeking certification of their union
as their bargaining representative.
The employer and petitioners executed a
MOA where employer agreed to bargain with the
union over the employees demands.

No bargaining took place but instead the
employees were dismissed allegedly for
abandoning their jobs.
The employees assisted by LCP Pres.
Benigno Navarro, complained of illegal dismissal,
asked for reinstatement with backwages and
pursued their claims for statutory benefits and
damages.
SC ruled that petitioners were indeed
regular employees.

Finding that dismissal was unjustified, the
court declared them entitled for reinstatement,
but, nevertheless, awarded separation pay.

Backwages were also awarded but
computation to be done by NLRC since
petitioners were paid on piece-rate basis.

RULING:
Other Benefits which the Petitioners were
also entitled:

Holiday pay
Premium pay
13
th
Month pay
Service Incentive Leave

In The Haberdashery case, holiday pay and
SIL were not entitled because the court did not
apply Sec. 8 (b) of rule IV that entitles piece-rate
workers to holiday pay. Instead the court put
them under Sec. 1 (e) of said rule.
By putting the piece-rate workers in sec. 1
(e) and not by applying sec. 8 (b) the court failed
to distinguish between pakiao or task basis
employees (usually unsupervised)and the piece-
rate workers (supervised).
Summation: Benefits payable to Piece-rate Workers

1. The Applicable Statutory Minimum daily rate
2. Yearly SIL for 5 days with Pay
3. Night Shift Differential Pay
4. Holiday Pay
5. Meal and Rest Periods
6. Overtime Pay (conditional)
7. Premium Pay (conditional)
8. 13
th
month pay
9. Other benefits granted by law, by individual or
collective agreement or company policy or agreement.