PAYROLL ENTRIES

KAR ASIA V CORONA

437 SCRA 184YNARES-SANTIAGO; August 24, 2004

FACTS

- Respondents, regular employees of petitioner KAR ASIA, Inc., an automotive dealer in

Davao City, filed on September 24,1 9 9 7 c l a i m th a t t h ey w e r e n o t p a i d th e i r

co s t o f l i v i n g a l low an ce (C O LA ) f o r t h e m on ths o f D ecem ber 19 93 and

December 1994.- P e t i t i on e r co mp an y an d i t s p r es i d en t Ce l es t i no Ba r r e t t o

countered by saying that respondents had already been paid t h e i r CO LA f o r t h e s a id

p e r i od s . Pe t i t i o n ers p r es en t ed in evidence the payrolls for December 1993 and

December 1994showing that the respondents acknowledged in writing the receipt of

their COLA, and the affidavits of Ermina Daray and Cristina Arana, cashiers of KAR

ASIA, refuting respondents claim that they were made to sign blank pieces of paper.- Labor Arbiter rendered a decision in favor of petitioners. NLRC affirmed the decision of the Labor

Arbiter. Court of Appeals r ev e r s ed th e d ec i s i on o f t h e NLR C and o r d er ed

p e t i t i o ne r company to pay the respondents the P25.00 per day COLA for the period

December 1 to 31, 1994, plus interest thereon at the rate of 1% per month computed from

the time the same was withheld from respondents up to the time they were actually

paid the respective sums due them

ISSUE

WON not the petitioner company paid the respondents the COLA for December 1993

and December 1994 as mandated by RTWPB XI Wage Order No. 3

HELD

YES

-A close scrutiny of the payroll for the December 1993C O LA r ead i l y d i s c l os e th e

s i gn a tu r e s o f t h e re s po nd en t s opposite their printed names and the numeric value of

P654.00.Respondents averment that the petitioner company harassed them into signing the said payroll without giving them its cash equivalent cannot be given credence. He who asserts

not he w h o d en i e s m us t p ro v e ; un f o r tu n a t e l y, t h e r es po nd en t s miserably failed to

discharge this burden

-The payrolls for December 1 to 15, 1994 and December 16 to31, 1994 indicate an allowance of

P327.00 for each period, or a t o t a l o f P6 54 .0 0 f o r t h e en t i r e mo n t h . H o w ev e r , a

c a s u a l observation of the payroll for the December 1993 COLA will also show that the

respondents signed for the amount of P654.00.Also, the allowances appearing in the two separate

pay slips for December 1 to 15, 1994 and December 16 to 31, 1994 sum up t o a t o t a l o f

P 65 4 . 00 . A l th ou gh t h e n um er i c f i gu r es i n t h e December 1994 payroll and the

pay slips for the same period were denominated merely as allowances while those in

the December 1993 payroll were specifically identified as COLA, the fact that they add up to the same

figure, i.e ., P654.00, is not a coincidence- While ordinarily a pay slip is only a statement

of the gross monthly income of the employee, his signature therein coupled by an

acknowledgement of full compensation alter the legal complexion of the document. The pay

slip becomes a substantial proof of actual payment. Moreover, there is no hard-and-fast rule requiring

that the employees signature in the payroll is the o n l y a c c e p t a b l e p r o o f o f

p a y m e n t . B y i m p l i c a t i o n , t h e r e s p o n d e n t s , i n s i g n i n g t h e

p a y s l i p s w i t h t h e i r acknowledgement of full compensation, unqualifiedly

admitted the receipt thereof, including the COLA for December 1994

Wage Deduction

RADIO COMMUNICATIONS OF THE PHILS INC V SECOF LABOR

169 SCRA 38REGALADO; January 9, 1989

FACTS

- On May 4, 1981, petitioner, a domestic corporation engaged in the telecommunications business, filed

with the National Wages Council an application for exemption from the coverage

of Wage Order No. 1. The application was opposed by respondent United RCPI

Communications Labor Association (URCPICLA-FUR), a labor organization

affiliated with the Federation of Unions of Rizal (FUR).

- On May 22, 1981, the National Wages Council disapproved said application and

ordered petitioner to pay its covered em pl o yees t h e m and a t o r y l i v in g

a l l o w an ce o f P 2 . 00 d a i l y effective March 22, 1981.

- As early as March 13, 1985, before the aforesaid case was elevated to this Court,

respondent union filed a motion for the issuance of a writ of execution, asserting therein

its claim to15% of the total back pay due to all its members as "union service fee"

for having successfully prosecuted the latter's claim for payment of wages and for reimbursement

of expenses incurred by FUR and prayed for the segregation and remittance of said amount to FUR

thru its National President.

- On October 24, 1985, without the knowledge and consent of r e s po nd en t un io n ,

p e t i t i o ne r en t e r ed i n t o a com p rom is e agreement with Buklod ng Manggagawa sa

RCPI-NFL (BMRCPI-N F L ) a s t h e n e w b a r g a i n i n g a g e n t o f

o p p o s i t o r s R C P I employees.

- Thereupon, the parties filed a joint motion praying for the dismissal of the

decision of the National Wages Council for it had already been novated by the

Compromise Agreement re-defining the rights and obligations of the parties. Respondent Union

on November 7, 1985 countered by opposing the motion and alleging that one of the signatories

thereof- BMRCPI-NFL is not a party in interest in the case but that it was respondent

Union which represented oppositors RCPI employees all the way from the level of the National Wages

Council up the Supreme C o u r t . R e s p o n d e n t U n i o n t h e r e f o r e c l a i m e d

t h a t t h e Compromise Agreement is irregular and invalid, apart from the fact that there was

nothing to compromise in the face of a final and executory decision.

-Director Severo M. Pucan issued an Order dated November 25, 1985 awarding to URCPICLA-FUR

and FUR 15% of the total back pay of RCPI employees as their union service fees,

and directing RCPI to deposit said amount with the cashier of theRegional Office for

proper disposition to said awardees.

-D e s p i t e s a i d o r d e r , p e t i t i o n e r p a i d i n f u l l t h e c o v e r e d employees on

November 29, 1985, without deducting the union service fee of 15%.

-In an order dated May 7, 1986, NCR officer-in-charge found petitioner RCPI and its employees

jointly and severally liable for t h e p a ym en t o f t h e 1 5 % un io n s e rv i ce f ee

am ou n t i n g t o P 4 2 7 , 8 4 5 . 6 0 t o p r i v a t e r e s p o n d e n t U R C P I C L A - F U R

a n d consequently ordered the garnishment of petitioner's bank account to enforce said

claim.

-Secretary of Labor and Employment issued an order on August18 , 19 86 mo di f yi n g t h e o rd er

ap p ea l ed f ro m b y h o ld in g petitioner solely liable to respondent union for 10% of

the awarded amounts as attorney's fees

ISSUE:

WON public respondents acted with grave abuse of discretion amounting to lack of jurisdiction

in holding the petitioner solely liable for "union service fee' to respondent URCPICLA-FUR

HELD:

NO. Attorney's fee due the oppositor is chargeable against RCPI.

-The defaulting employer or government agency remains liable for attorney's fees because it

compelled the complainant t o emp lo y t he s e rv i ce s o f coun s e l b y u n ju s t l y

r e f us in g to recognize the validity of the claim. (Cristobal vs. ECC)

-It is undisputed that oppositor (private respondent herein) was the counsel on record of the RCPI

employees in their claim forE C 0 LA u n d e r Wage O r d e r N o . 1 s in ce th e i ncep t i on

o f t h e proceedings at the National Wages Council up to the Supreme Court. It had therefore a

valid claim for attorney's fee which it called union service fee.

- As is evident in the compromise agreement, petitioner was bound to pay only 30%

of the amount due each employee on November 30, 1985, while the balance of 70% would

still be the su b j ec t o f r en ego t i a t i on b y t h e p a r t i e s . Y e t , d es p i t e s u ch conditions

beneficial to it, petitioner paid in full the back pay of its employees on November 29, 1985,

ignoring the service fee due the private respondent.- Worse, petitioner supposedly paid to

one Atty. Rodolfo M.Capocyan the 10% fee that properly pertained to herein private

respondent, an unjustified and baffling diversion of funds.

- Finally, petitioner cannot invoke the lack of an individual written authorization

from the employees as a shield for its fraudulent refusal to pay the service fee of private

respondent. Be that as it may, the lack thereof was remedied and supplied by the execution of

the compromise agreement whereby the employees, expressly approved the 10%

deduction and held petitioner RCPI free from any claim, suit or complaint arising

from the deduction thereof. When petitioner was there after again ordered to pay the

10% fees to respondent union, it no longer had any legal basis or subterfuge for refusing to pay

the latter.

- We agree that Article 222 of the Labor Code requiring an i n d i v i du a l wr i t t en

au th or i z a t i on as a p r e r eq u i s i t e t o w age deductions seeks to protect the employee

against unwarranted practices that would diminish his compensation without his

knowledge and consent. However, for all intents and purposes, the deductions required of the

petitioner and the employees do not run counter to the express mandate of the law since

the same are not unwarranted or without their knowledge and c o ns en t . A l so , t he

d edu c t io ns f o r t h e u n i on s e rv i ce f e e i n question are authorized by law and do

not require individual check-off authorizations.

-The order of the Secretary of Labor of August 16,1986 is hereby AFFIRMED and the petition at

bar is DISMISSED, with double costs against petitioner. The temporary restraining order issued

pursuant to the Resolution of the Court of June 22,1987 is LIFTED and declared of no further force and

effect.

Wage Deduction

APODACA V NLRC (MIRASOL, INTRANS PHILS)

172 SCRA 442GANCAYCO; April 18, 1989

FACTS

- Petitioner was employed in respondents corporation - 1 97 5 : p e t i t i on e r w as ap po i n t ed P r es id en t and G en e r a l Manager of respondent

corporation

- 1985: Respondent Mirasol persuaded petitioner to subscribe to 1,500 shares of respondent

corporation at P100 per share (total of P150, 000). He made an initial payment of P37, 500.-

January, 1986: petitioner resigned

- December, 1986: petitioner instituted with NLRC a complaint f o r t h e p a y m e n t o f h i s

u n p a i d w a g e s , h i s c o s t o f l i v i n g allowance, the balance of his gas and

representation expenses, and his bonus compensation for 1986.

- Private respondents admitted there is due to the petitionerP17, 060, but this was

applied to the unpaid balance of his subscription in the amount of P95, 439.93

- Petitioner questioned the set off since there was no call or notice for the payment of

the unpaid subscription, and that the alleged obligation is not enforceable.

- The NLRC held that a stockholder who fails to pay his unpaid subscription on call becomes a

debtor of the corporation and that the set-off of said obligation against the wages and other due to

petitioner is not contrary to law, morals, public policy

ISSUE

1. WON the NLRC has jurisdiction to resolve a claim for non -payment of stock

subscriptions to a corporation

2. WON an obligation arising from the non-payment of stock s u bs c r i p t i on can b e

o f f se t aga in s t a m on e y c l a im o f an y employee against an employer

HELD

1. NO

- The NLRC has no jurisdiction to determine such intra-corporate dispute between the stockholder and the

corporation as in the matter of unpaid subscriptions. This is within the

exclusive jurisdiction of the Securities and Exchange Commission.

2. NO

-Assuming arguendo that the NLRC may exercise jurisdiction in this case, the unpaid

subscriptions are not due and payable until a call is made by the corporation for payment.

It does not appear that a notice of such call has been sent to petitioner. The records only

show that the respondent corporation d ed u c t ed t h e amo un t du e to p e t i t i o n er f rom

t h e amo un t receivable from him from for the unpaid subscriptions. This set-off was without

lawful basis. As there was no notice or call for payment, the same is not yet due or payable.-

Assuming that there had been a call for payment, the NLRC s t i l l c ann o t v a l i d l y

s e t i t o f f aga i ns t t he w ages and o th e r benefits due petitioner.

- Art. 113 of the Labor code allow such a deduction from the wages of the employees by

employer in only 3 instances:

(a) Inca s e s w h er e t he w or k e r i s i n su r ed w i th h i s co ns en t by t h e 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 check off 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.

-The petition is GRANTED and the questioned decision of the NLRC dated September 18, 1987

is hereby set a s i d e and ano t h e r j ud gm ent i s h e r eb y r en d e r ed o r d e r in g private

respondents to pay petitioner the amount of P17,060.07 plus legal interest computed from the

time of the filing of the complaint on December 19, 1986, with costs against private

respondents.

Check-off

MANILA TRADING & SUPPLY CO V MANILA TRADINGLABOR ASSN

93 PHIL 288REYES; April 29, 1953

FACTS

- On October 10, 1950, the Manila Trading Labor Association, composed of workers of Manila

Trading and Supply Co., made a demand upon said company for increase of wages, increase

of personnel, Christmas bonus, and other gratuities and privileges. As the demand was

refused and the Department of Labor -whose intervention had been sought by the

association

-failed to effect an amicable settlement, the Head of the Department certified the dispute to

the Court of Industrial Relations on October 25, and there it was docketed as case No. 521-

V. The company, on its part, on that same day applied to the Court of Industrial Relations for

authority to lay off 50 laborers due to "poor business," the application being docketed as

Case No.415-V (4).

-To resolve the disputes involved in the two cases the Court of In d u s t r i a l R e l a t io ns

co nd u c t ed v a r i ous h ea r i n gs b e tw een October 26, 1950, and January 18, 1951. Of their

own volition the president and vice-president of the association attended s o m e i f n o t

a l l o f t h e h ear in gs , an d t ho u gh th e y ab s en ted themselves from work for that reason

they afterwards claimed that they were entitled to their wages. The Court of Industrial

R e l a t io ns f ou n d m er i t i n t h e c l a i m , and a t t h e i r i n s t ance , ordered the company

to pay them their wages corresponding to the days they were absent from work while in

attendance at the hearings.

-Contending that the industrial court had no authority to issue such an order, the company asks

this Court to have it annulled. Opposing the petition, the association, on its part, contends that the

order comes within the broad powers of the industrial court in the settlement of disputes between capital

and labor.

ISSUE

WON Court of Industrial Relations may require an employer to pay the wages of officers of

its employees' labor union while attending the hearing of cases between the employer and

the union

HELD:

When in case of strikes, and according to the CIR even if the strike is legal, strikers may not

collect their wages during the days they did not go to work, for the same reasons if not

more, laborers who voluntarily absent themselves from work to attend the hearing of a case

in which they seek to prove and establish their demands against the company, the legality

and propriety of which demands is not yet known, should lose their pay during the period of such

absence from work.

-The age-old rule governing the relation between labor and capital or management and

employee is that of a "fair day's wage for a fair day's labor.' 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, dismissed or suspended. It is hardly fair or

just for an employee or laborer to fight or litigate against his employer on the employer's time.

- The respondent association, however, claims that it was not t h e on e th a t b ro u gh t t h e

ca s e s t o t h e Co ur t o f In d u s t r i a l Relations, and the point is made that "if the

laborer who is dragged to court is deprived of his wages while attending court h ea r in gs , he

w o u l d in e f f ec t be d en i ed t he o pp or t un i t y t o defend himself and protect his

interests and those of his fellow workers." But while it is true that it was the Secretary of Labor

who certified the dispute involved in case No. 521-V to the Court of Industrial

Relations, the fact remains that the dispute was initiated by a demand from the labor association. The truth,

t h e r e f o r e , i s t h a t w h i l e o n e o f t h e ca s e s w as f i l ed b y t h e employer, the offer

was initiated by the employees. It may be conceded that the employer is in most cases in a better

position to bear the burdens of litigation than the employees. But as was said in the case of J.

P. Heilbronn Co. vs. National Labor Union, supra, "It is hardly fair for an employee or laborer to fight

or litigate against his employer on the employer's time." The most that could be

conceded in favor of the claimants herein is to have the absences occasioned by their

attendance at the hearings charged against their vacation leave if they have any, or as

suggested by three of the Justices who signed the decision in the case just cited, to have the

wages they failed to earn charged as damages in the event the cases whose hearings

they attended are decided in favor of the association. But the majority of the Justices make

no commitment on this latter point.

-Petition for certiorari is granted and the order complained of set aside

Deposit

DENTECH MANUFACTURING V NLRC (MARBELLA)

172 SCRA 588GANCAYCO; April 19, 1989

FACTS:

-Dentech Manufacturing Corporation is a domestic corporation organized under Philippine

laws owned and managed by the p e t i t i o n e r J a c i n t o L e d e s m a . T h e f i r m i s

e n g a g e d i n t h e manufacture and sale of dental equipment and supplies.

-Private respondents Benjamin Marbella, Armando Torno, Juanito Tajan, Jr. and Joel

Torno are members of the C o n f e d e r a t i o n o f C i t i z e n s L a b o r U n i o n ( C C L U ) ,

a l a b o r organization registered with the DOLE. They used to be the employees of

Dentech, working as welders, upholsterers and painters. They were already employed with the

company when it was still a sole proprietorship. They were dismissed from the firm beginning

February 14, 1985.

-They filed a Complaint with the NLRC against Dentech and Ledesma for, among

others, illegal dismissal and violation of PD851. They were originally joined by another

employee, one Raymundo Labarda, who later withdrew his Complaint. At first, they only

sought the payment of their 13th month pay under PD851 as well as their separation pay, and the

refund of the cash b o n d t h e y f i l e d w i t h t h e c o m p a n y a t t h e s t a r t o f t h e i r

employment. Later on, they sought their reinstatement as well as the payment of their 13th

month pay and service incentive leave pay, and separation pay in the event that they are

not reinstated. It is alleged that they were dismissed from the firm for pursuing union activities.

-Dentech argued that they are not entitled to a 13th month pay. They maintained

that each of the private respondents receive a total monthly compensation of more that

P1,000 and that under Section 1 of PD 851, such employees are not entitled to re ce i v e a 1 3 th m on th

p a y. A l so , t h e com p an y i s i n b ad f i n an c i a l s hap e an d t h a t pu rs u an t t o

S ec t i on 3 , t h e f i rm i s exempted from complying with the provisions of the

Decree. Dentech also contended that the refund of the cash bond filed by the Marbella, et al., is

improper inasmuch as the proceeds of the same had already been given to a certain carinderia to

pay for their outstanding accounts.

ISSUES

1. WON the private respondents are entitled as a matter of right to a 13th month pay

2. WON the refund of the cash bond is proper

HELD

1. YES

-P D 8 5 1 w a s s i g n e d i n t o l a w i n 1 9 7 5 b y t h e n P r e s i d e n t Ferdinand

Marcos. Under the original provisions of Section 1, all employers are required to pay all their

employees receiving a basic salary of not more than P1,000 a month, regardless of the nature of

their employment, a 13th month pay not later than December 24 of every year. Under

Section 3 of the rules and r egu l a t io ns i mpl emen t in g PD 8 5 1 , f i n an c i a l l y

d i s t r e s s ed employers, i.,e., those currently incurring substantial losses, are not covered by the

Decree. Section 7 requires, however, that such distressed employers must obtain the prior

authorization of the Secretary of Labor before they may qualify for such exemption.

-On May 1, 1978, PD 1364 was signed into law. The Decree enjoined the DOLE to stop

accepting applications for exemption under PD 851. On August 13, 1986, President Corazon

Aquino issued Memorandum Order No. 28 which modified Section 1 of PD 851. The said issuance

eliminated the P1, 000 salary ceiling.

-It clearly appears that Dentech has no basis to claim that it is ex em pt ed f r om com pl yi n g

w i t h t h e p ro v i s io ns o f t h e l aw r e l a t ing t o t h e 1 3th

mo n t h p a y. T h e P1 , 0 00

s a l a r y ce i l i n g provided in PD 851 pertains to basic salary, not total monthly compensation.

Dentech admits that Marbella, at al., work only five days a week and that they each receive a

basic daily wage o f P40 on l y. A s im pl e co mp ut a t io n o f t h e b a s i c d a i l y w age

multiplied by the number of working days in a month results in an amount of less than P1, 000.

Thus, there is no basis for the contention that the company is exempted from the provision

of P D 8 5 1 w h i c h m a n d a t e d t h e p a y m e n t o f 1 3 t h m o n t h

co mp ens a t i on t o em pl o yees r e ce iv i n g l es s t h an P1 , 00 0 a month.

- Even assuming, arguendo, that Marbella, et al., are each paid a m o n t h l y s a l a r y o f o v e r

P 1 , 00 0 , D en tech i s s t i l l no t i n a p o s i t i o n t o c l a i m e x e m p t i o n . T h e

r u l e s a n d r e g u l a t i o n s implementing PD 851 provide that a distressed employer shall

qualify for exemption from the requirements of the Decree only upon prior authorization from

the Secretary of Labor. No such prior authorization had been obtained by Dentech.

2. YES

-The refund of the cash bond is in order. Article 114 of the Labor Code prohibits an

employer from requiring his employees t o f i l e a c a s h b on d o r t o m ak e d ep os i t s ,

s ub j ec t t o c e r t a in exceptions.

-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 i n s u c h t r a d e s , o c c u p a t i o n s o r

b u s i n e s s w h e r e t h e practice of making deductions or requiring deposits is ar e

c o g n i z e d o n e , o r i s n e c e s s a r y o r d e s i r a b l e a s d e t e rmi n ed b y t h e

S ec r e t a r y o f Lab o r i n app r op r i a t e rules and regulations.

- Dentech has not satisfactorily disputed the applicability of this provision to the case at bar.

Considering further that it failed to show that it is authorized by law to require Marbella, et al., to

file the cash bond in question, the refund is in order.- The allegation that the proceeds of the cash bond

had already been given to a certain carinderia to pay for the accounts of the private respondents

does not merit serious consideration. No evidence or receipt has been shown to prove such payment.

-Petition is hereby DISMISSED for lack of merit

Deposit

FIVE J TAXI V NLRC

235 SCRA 556REGALADO; August 22, 1994

FACTS

-Maldigan and Sabsalon were hired by the petitioners as taxi drivers. They paid daily "boundary"

of P700 for air-conditioned or P450 for non-air-conditioned taxi, P20 for car washing, and aP15

deposit to answer for any deficiency in their "boundary," for every actual working day.

-In less than 4 months, Maldigan already failed to report for work. Later, petitioners learned

that he was working for "Mine of Gold" Taxi Company.

-Sabsalon was held up by his armed passenger who took all his money and stabbed him.

After his hospital discharge, he went to his home province to recuperate. He was re-admitted by

petitioners after 4 years under the same terms and conditions, but he was only allowed to

drive only every other day. However, on several occasions, he failed to report for work

during his schedule.

-Sept. 1991: Sabsalon failed to remit his "boundary" for the previous day. Also, he

abandoned his taxicab in Makati without fuel refill worth P300. He adamantly refused to report

to work d e s p i t e d em an ds . A f t e r w a rds i t w as rev ea l ed t h a t he w as driving a taxi for

"Bulaklak Company."

-1989: Maldigan requested petitioners for the reimbursement of his daily cash deposits for 2

years, but petitioners told him that nothing was left of his deposits as these were not

even enough to cover the amount spent for the repairs of the taxi he was driving

-When Maldigan insisted on the refund, petitioners terminated h i s s e r v i ce s . S ab s a l on

c l a i m ed t h a t h i s t e r mi n a t i on f rom em pl o ym en t was e f f ec t ed wh en h e

r e f us ed t o p a y f o r t h e washing of his taxi seat covers. They filed a complaint for illegal

dismissal and illegal deductions

-Labor arbiter dismissed case holding that the unreasonable delay in filing the case (two

years) was not consistent with the natural reaction of a person who claimed to be unjustly treated.

-NLRC: Private respondents dismissal was legal since they voluntarily left to work for another company. The deductions were held illegal and it ordered petitioners to

reimburse the accumulated deposits and car wash payments, plus interest thereon at

the legal rate from the date of promulgation of judgment to the date of actual payment,

and 10% of the total amount as and for attorney's fees

ISSUE

WON private respondents are entitled to the refund of deposits

HELD

YES- NLRC held that the daily deposits made by respondents to d e f r a y an y

s ho r t age in t h e i r "b o un da r y" i s cov e red b y t h e general prohibition in Article

114 of the Labor Code and that there is no showing that the Secretary of Labor has

recognized the same as a "practice" in the taxi industry. 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, e x c e p t w h e n t h e e m p l o y e r i s e n g a g e d i n s u c h t r a d e s ,

o ccup a t io ns o r bu s i n es s wh e r e t h e p rac t i c e o f m ak i n g deposits is a recognized

one, or is necessary or desirable as determined by the Secretary of Labor in appropriate rules and

regulations.

-A r t i c l e 11 4 d oes no t app l y t o o r p e rmi t d ep os i t s t o defray any deficiency which

the taxi driver may incur in t h e remi t t an ce o f h i s "b ou nd a r y ." A l so , wh en p r i va t e

r e s po nd en t s s t op ped wo rk in g f o r pe t i t i on e rs , t h e a l l eged pu r po se fo r

w h ich p e t i t i on e rs r eq u i r ed s u ch u n au th o r i z ed deposits no longer existed. In

other case, any balance due to private respondents after proper accounting must be returned

to them with legal interest.

-The evidence shows that Sabsalon was able to withdraw his deposits through vales or

he incurred shortages, such that he is even indebted to petitioners in the amount of P3,448.00.

With r es pec t t o M ald i gan ' s depo s i t s , no th in g w as m en t ion ed questioning the

same. Since the evidence shows that he had not withdrawn the same, he should be

reimbursed the amount of his accumulated cash deposits.

- O n ca r wash p aym ent : N o r e f un d . T h e r e was n o t h i n g t o p r ev en t p r i va t e

r e s po nd en t s f r om c l ean in g th e t ax i un i t s themselves, if they wanted to save their

P20. Also, car washing after a tour of duty is a practice in the taxi industry, and is, in fact,

dictated by fair play.

- On attorneys fees: Article 222 of the Labor Code, as amended by Section 3 of PD. 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 c a t ego r i es . H ence ,

b y c l ea r m an d a t e o f t h e l aw , h e i s n o t entitled to attorney's fees.

-NLRC decision MODIFIED by deleting the awards for reimbursement of car wash

expenses and attorney's fees and directing NLRC to order and effect the

computation and payment by petitioners of the refund for Maldigan's deposits, p lu s l ega l

i n t e r es t t h e r eon f ro m th e d a t e o f f i na l i t y o f t h i s resolution up to the date of actual

payment thereof.

Garnishment/Attachment

PACIFIC CUSTOMS BROKERAGE V INTER-ISLANDDOCKMEN AND LABOR UNION AND CIR

89 PHIL 722BAUTISTA ANGELO; August 24, 1951

FACTS

-Inter-island Dockmen and Labor Union filed petition in CIR against Pacific Customs

Brokerage praying that said company be ordered to desist from dismissing members of said

union, to turn over to the treasurer of union all dues and fees withheld by the company and to

reinstate with back pay the workers.

-A motion was filed by labor union praying that Pacific Customs Brokerage be ordered to pay

union members their wages which was allegedly withheld by it for certain alleged damages

caused by said members for staging a strike. To this motion, Pacific objected.

ISSUE

WON Pacific Customs Brokerage can be compelled by CIR to p a y w a g e s o f t h e

u n i o n m e m b e r s i n s p i t e o f t h e w r i t o f garnishment issued by CFI in civil case,

directing the sheriff to levy upon moneys of Pacific Customs Brokerage Workers Union which are

in the possession of Pacific Customs Brokerage

HELD

YES- Pacific Customs Brokerage contends otherwise because the moneys having been

garnished, are in custodia legis, and cant be controlled by CIR. The Court noticed that this is the same argument advanced by petitioner before the respondent court in its effort to frustrate the

purpose of the motion of the labor u n i o n , a n d t h e r e s p o n d e n t c o u r t f o u n d s a i d

a r g u m e n t untenable. Art 1708 of new Civil Code provides, Laborers wages shall not be subject to execution or attachment, except f o r d e b t s i n c u r r e d f o r f o o d ,

s h e l t e r , c l o t h i n g , a n d m e d i c a l attendance. - P ac i f i c C us t om s Br o k e rage d o es n t d i s pu t e t h a t mo n ey garnished is intended to pay wages of members of labor union. There is nothing to show that such money was garnished

or a t t a ch ed fo r d eb t s i n cu r r ed f o r fo o d , s h e l t e r , c lo th in g an d medical

attendance. The writ of garnishment issued by the court, while it purports to include

all moneys and properties belonging to the employing company, cannot, in any manner,

touch or affect what said company has in its possession to pay the wages of its laborers.- When CFI

issued writ of garnishment, its scope could not have been extended to include money intended to

pay the wages of members of labor union.

-But before the order of the respondent court can be enforced there is need of lifting the

garnishment by presentation of a motion to that effect by the labor union.- Petitioner's

contention that the motion should be denied b ecau s e i t i s p r ed i ca t ed on a l abo r

co n t r ac t en t e r ed in t o between the petitioner and the Pacific Customs Brokerage

Workers Union has no foundation in fact, it appearing that the members of the two labor unions

are one and the same. The members of the Pacific Customs Brokerage Workers' Union are the

same laborers now members of the petitioner union

Garnishment/Attachment

GAA vs. COURT OF APPEALS

Facts

It appears that respondent Europhil Industries Corporation was formerly one of the tenants in

Trinity Building at T.M. Kalaw Street, Manila, while petitioner Rosario A. Gaa was then the

building administrator. On December 12, 1973, Europhil Industries commenced an action (in the

Court of First Instance of Manila for damages against petitioner for having perpetrated certain

acts that Europhil Industries considered a trespass upon its rights, namely, cutting of its

electricity, and removing its name from the building directory and gate passes of its officials and

employees", On June 28, 1974, said court rendered judgment in favor of respondent Europhil

Industries, ordering petitioner to pay the former the sum of P10,000.00 as actual damages,

P5,000.00 as moral damages, P5,000.00 as exemplary damages and to pay the costs. The said

decision having become final and executory, a writ of garnishment was issued pursuant to which

Deputy Sheriff Cesar A. Roxas on August 1, 1975 served a Notice of Garnishment upon El

Grande Hotel, where petitioner was then employed, garnishing her "salary, commission and/or

remuneration." Petitioner then filed with the Court of First Instance of Manila a motion to lift

said garnishment on the ground that her "salaries, commission and or remuneration" are

exempted from execution under Article 1708 of the New Civil Code. Said motion was denied by

the lower Court. Court of Appeals dismissed the petition. In dismissing the petition, the Court of

Appeals held that petitioner is not a mere laborer as contemplated under Article 1708 as the term

laborer does not apply to one who holds a managerial or supervisory position like that of

petitioner, but only to those laborers occupying the lower strata.

Issue

Whether or not the Petitioner is covered by Article 1708 of the New Civil Code.

Ruling

Petitioner is not covered by Article 1708 since she does not fall within the criteria of laborer.

Article 1708 of the Civil Code provides: The laborer's wage shall not be subject to execution or attachment, except for debts incurred for food, shelter, clothing and medical attendance." It is

beyond dispute that petitioner is not an ordinary or rank and file laborer but a responsibly place

employee, of El Grande Hotel, responsible for planning, directing, controlling, and coordinating

the activities of all housekeeping personnel so as to ensure the cleanliness, maintenance and

orderliness of all guest rooms, function rooms, public areas, and the surroundings of the hotel.

Considering the importance of petitioner's function in El Grande Hotel, it is undeniable that

petitioner is occupying a position equivalent to that of a managerial or supervisory position. We

do not think that the legislature 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 is definitely not within that class.

Garnishment/Attachment

Special Steel Products vs Villareal (2004) G.R. 143304

Facts:

Special Steel Products, Inc., is a domestic corporation engaged in the principal business of

importation, sale, and marketing of BOHLER steel products. Respondents worked

for petitioner as assistant manager and salesman. Villareal obtained a car loan from

Bank of Commerce with petitioner as surety wherein they are jointly and severally

agreed to p a y t h e b ank in i n s t a l lm en t b as i s . In J anu a ry 1 9 9 7 , V i l l a r ea l

r e s i gn ed an d j o i n ed H i - Grade Industrial and Technical Products as Executive vice-

president. Respondent So was sponsored by petitioner to attend a training course in

Kapfenberg, Austria conducted by BOHLER. It rewarded Sos outstanding sales performance. When So returned, the petitioner asked respondent So to sign a memorandum to

work for the company for three years. After 2 years and 4 months, So resigned from

the company. Petitioner ordered respondents an accounting of the various Christmas

giveaways they received. In return, respondents also demanded payment of their

separation benefits, commissions, monetary benefits but petitioner refused and withheld the

13Th

month pay and other benefits.

Issue:

WON the employer can withhold its employees wages and benefits as lien to protect its interest as surety in the car loan and for expenses in the training abroad.

Held:

The employer cannot withhold respondents 13th month pay and other monetary benefits. Article 116 of the Labor Code, as amended, provides:

Withholding of wages and kickbacks prohibited. It shall be unlawful for any person, directly or indirectly, to withhold any amount from the wages (and benefits) of a worker or

induce him to give up any part of his wages by force, s t e a l t h , i n t i mid a t io n ,

t h rea t o r b y an y o t h e r m ean s wh a t s oev e r without the workers consent. The above provision is clear and needs no further elucidation. Indeed, petitioner has no legal

authority to withhold respondents 13 th month pay and other benefits. What an em plo yee h a s w o rk ed f o r , h i s em plo ye r m u s t p a y. T h us , an em pl o ye r

c an no t s im pl y refuse to pay the wages or benefits of its employee because he has

either defaulted in p a y i n g a l o a n g u a r a n t e e d b y h i s e m p l o y e r ; o r

v i o l a t e d t h e i r m e m o r a n d u m o f agreement; or failed to render an accounting of

his employers property.

Record Keeping

SOUTH MOTORISTS ENTERPRISES V TOSOC [SECOF DOLE]

181 SCRA 386MELENCIO-HERRERA; January 23, 1990

FACTS

-January 1983, complaints for non-payment of emergency cost of living allowances were

filed by 46 workers, Tosoc, et als., against SOUTH MOTORISTS(SM) before the Naga

City District Office of Regional Office No. 5 of the then Ministry of Labor

-10 January 1983 a Special Order was issued by the District Labor Officer directing its

Labor Regulation Officers to conduct a n i n s p e c t i o n a n d v e r i f i c a t i o n o f

S O U T H M O T O R I S T S ' employment records.

- O n t h e d a t e o f t h e i n s p e c t i o n a n d v e r i f i c a t i o n , S O U T H MOTORISTS

was unable to present its employment records on the allegation that they had been sent to

the main office in Manila.

-The case was then set for conference on 25 January 1983 but was reset twice.

-SM kept on requesting for postponements on the ground that the documents were still being prepared

and collated and that a formal manifestation or motion would follow. Nothing did.

-After the submission of an Inspection Report on the basis of which an Order dated 14 April

1983 was issued by Labor Officer Domingo Reyes directing SM to pay Tosoc, et als.,

the total amount of P184,689.12 representing the latter's corresponding emergency cost of living

allowances.

-SM FILED a Motion for Reconsideration BUT was denied.

ISSUE

WON Regional Directors of DOLE have jurisdiction to validly acton/ award money claims

HELD

YES

-Regional Directors are empowered to hear and decide, in a summary proceeding, claims for recovery of

wages and other monetary claims and benefits, including legal interest, subject to the concurrence of

the following requisites:

1) the claim is presented by an employee or person employed in domestic or household

service, or house helper under the Code;

2) the claim arises from employer-employee relations;

3 ) t he c l a i m an t n o l on ge r be in g em pl oyed , d o es n o t s eek reinstatement; and

4) the aggregate money claim of each employee or house helper does not exceed P5,000.00

(Art. 129, Labor Code, as amended by R.A. 6715).But where these requisites do not

concur, the Labor Arbiters shall have exclusive original jurisdiction over claims arising from employer-

employee relationship except claims for employees' compensation, social security, medicare and

maternity benefits

- Two provisions of law are crucial to the issueA129 and A217o f t he LC , a s r e cen t l y am end ed b y R ep ub l i c A c t N o . 6 71 5 , approved on 2 March 1989. Said amendments,

being curative in nature, have retroactive effect and, thus, should apply in this c a se ( BR IA D

A G RO vs . DE LA C ER NA , G.R . No . 8 2 80 5 , and C AM US E NG IN E E R IN G

v s . D E LA C ER N A, G .R . No . 8 32 25 , 9 November 1989).- The aforesaid Articles, as

amended, respectively read as follows:

Art. 129. Recovery of wages, simple money claims and other benefits.

U po n co mp la in t o f an y i n t e re s t ed p a r t y, t h e Regional Director o f t h e D e p a r t m e n t o f L a b o r a n d Employment or any of the duly authorized hearing

officers of the Department is empowered, through summary proceeding and after due notice, to

hear and decide cases involving the recovery of wages and other monetary claims and benefits,

including legal interest, owing to an employee or person employed in domestic or

household service and house helper under this Code, arising from employer-employee relations:

Provided, That such complaint does not include a claim for reinstatement: Provided,

further, That the aggregate claim of each employee or house helper does not exceed five

thousand pesos (P5,000.00). . . .and Art. 217. Jurisdiction of Labor Arbiters and the

Commission.

(a) Except as otherwise provided under this Code, the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the

submission of the case by the parties for decision without extension, even in the

absence of stenographic notes, the following cases involving all workers, whether

agricultural or non-agricultural:

Except claims for employees compensation, social security, medicare and maternity

benefits, all other claims arising from employer-employee relations, including those

of persons in domestic or household service, involving an a m o u n t e x c e e d i n g

f i v e t h o u s a n d p e s o s ( P 5 , 0 0 0 ) , w h e t h e r o r n o t a c c o m p a n i e d

w i t h a c l a i m f o r reinstatement.

- In a cco rd an ce s a id a r t i c l es , t h os e aw ar ds i n ex ces s o f P5,000.00, particularly

those given to Gavino, Euste, Brequillo,Cis, Agreda, Galona, Tosoc, Guinoo, Cea,

Guinoo, and Osoc, each of which exceeds P5,000.00, should be ventilated in a

proceeding before the LAs. -SM also caused the resetting of all subsequent hearings on the g r o u nd th a t t h e

d o cu m ent s w e r e s t i l l be in g p rep a r ed an d collated.

-Having been given the opportunity to put forth its case, SM has only itself to blame for

having failed to avail of the same

-What is more, its repeated failure to attend the hearings and to submit any motion as

manifested may be construed as a waiver of its right to adduce evidence to controvert the worker's

claims.

-The award P l84,689.12 was MODIFIED. The i n d iv id ua l c l a im s o f G av i no , E us t e

, B r equ i l l o , C i s , A gr ed a , Galona, Tosoc, Guinoo, Cea, Guinoo, and Osoc, each of which

ex ceeds P 5 , 00 0 . 00 , w e r e r em an ded t o t h e LA f o r p r op e r d i s po s i t i o n . Al l

o th e r i n d i v id u a l awa r d s no t i n ex ce ss o f P5,000.00 were AFFIRMED.

321 - MARANAW HOTELS AND RESORT CO. VS NLRC AND EDDIE DAMALERIO

(SERVICE CHARGES)

Facts:

On April 2, 1992, Damalerio was caught by one of the hotel guests, Jaime Glaser, when the

formers left hand was inside the latters suitcase. When he was asked by Glaser what he was

doing, he said that he is just cleaning Glasers room. Glaser filed a complaint to the Chief of

Security of the Hotel against Damalerio. After hearing and investigation of the hotel

management, he was found to have committed a qualified theft in violation of their House Rule

No. 1. He received a memorandum on April 13, 1992 which serves as a Notice of Termination.

He filed a complaint of illegal dismissal against the Hotel. Labor Arbiter ruled in favor of

Damalerio and ordered his reinstatement and other benefits including share in charges and tips.

Petitioner appealed. NLRC modified the ruling by giving the petitioner the option of payment of

separation pay instead of reinstating Damalerio.

Issue: Whether or not Damalerio is entitled to a share on the service charge.

Ruling:

Yes. Since dismissal has been adjudged to be illegal, he is entitled not only to the full backwages

but also to other benefits, including a just share in the service charges, to be computed from the

start of his preventive suspension until his reinstatement. However, since a strained relation

might occur due to the litigation, petitioner should be given an option to give Damalerio his

separation pay instead of reinstating the latter. Should petitioner opt in favor of separation pay,

Damalerio shall no longer be entitled to share in the service charge collected during his

preventive suspension.

322- ACE NAVIGATION CO. VS COURT OF APPEALS, NLRC AND ORLANDO

ALONSAGAY

(TIPS)

Facts:

Ace Navi hired Alonsagay as a bartender in the vessel owned by its principal, Conning Shipping

Ltd with a monthly basic salary of USD 450.00, flat rate, including overtime pay for 12 hours of

daily work plus tips of USD 2.00 per passenger per day. He was also entitled to 2.5 days of

vacation leave with pay each month. His contract started from June 13, 1994 up to June 13,

1995. After the termination of his contract, he claimed for his unpaid vacation leave pay

amounting to USD 450.00 and unpaid tips amounting to USD 36,000.00

Issue: Whether or not petitioner is liable to pay the tips to Alonsagay.

Ruling:

No. Tip denotes a voluntary act and generosity of the giver. The contract of employment

between petitioners and Orlando is categorical that the monthly salary of Orlando is

US$450.00 flat rate. This already included his overtime pay which is integrated in his 12 hours

of work. The words "plus tips of US$2.00 per passenger per day" were written at the line for

overtime. Since payment for overtime was included in the monthly salary of Orlando, the

supposed tips mentioned in the contract should be deemed included thereat. As a bartender,

Orlando cannot feign ignorance on the practice of tipping and that tips are normally paid by

customers and not by the employer.

It is also absurd that petitioners intended to give Orlando a salary higher than that of the ship

captain. As petitioners point out, the captain of M/V "Orient Princess" receives US$3,000.00 per

month while Orlando will receive US$3,450.00 per month if the tip of US$2.00 per passenger

per day will be given in addition to his US$450.00 monthly salary. It will be against common

sense for an employer to give a lower ranked employee a higher compensation than an employee

who holds the highest position in an enterprise.

323 ULTRA VILLA FOOD HAUS and ROSE TIO VS GENISTON (13

TH MONTH PAY COVERAGE)

Facts:

Geniston was allegedly hired as do it all guy in the Ultra Villa. He allegedly acts as waiter,

driver and maintenance in said restaurant. His employment therein spanned from March 1, 1989

until he was dismissed on May 13, 1992 by petitioner Tio. It appears that on May 11-12, 1993,

Geniston acted as Poll Watcher in the election instead of reporting to work as a driver to Tio.

Respondent prayed before the Labor Arbiter to order Tio to pay his overtime pay, premium pay,

service incentive leave pay and his 13th

month pay, as well as damages. The Labor Arbiter

concluded that he is a personal driver of Tio and not an employee of Ultra Villa. Thus, he is not

entitled to overtime pay, premium pay, service incentive leave pay and his 13th

month pay.

NLRC reversed the decision and ordered Tio to pay Genistons monetary claims as the court

determined.

Issue:

1. Whether or not private respondent is a personal driver of Tio. (for Case No. 327)

2. Whether or not private respondent is entitled to 13th

month pay. (for Case No. 323)

Ruling:

1. Yes. The Labor Arbiter correctly ruled that private respondent was petitioner's personal driver

and not an employee of the subject establishment. Accordingly, the terms and conditions of

private respondent's employment are governed by Chapter III, Title III, Book III of the Labor

Code as well as by the pertinent provisions of the Civil Code. Thus, Article 141 of the Labor

Code provides:

Art. 141. Coverage - This Chapter shall apply to all persons rendering services in

households for compensation.

Domestic or household service" shall mean services in the employers home which is usually

necessary or desirable for the maintenance and enjoyment thereof and includes ministering to the

personal comfort and convenience of the members of the employers household, including

services of family drivers.

Moreover, the specific provisions mandating these benefits are found in Book III, Title I of the

Labor Code , Article 82, which defines the scope of the application of these provisions, expressly

excludes domestic helpers from its coverage. Clearly then, petitioner is not obliged by law to

grant private respondent any of these benefits.

2. Yes. It would seem that in the Revised Guidelines on the Implementation of the 13th

month

pay, it excludes employers of household helpers from the coverage of P.D. No. 851.

Nevertheless, the court deemed it just to award the private respondent 13th

month pay in view of

petitioners practice of according private respondent such benefit. Indeed, petitioner admitted

that she gave private respondent 13th month pay every December.

324 PETROLEUM SHIPPING LTD. VS NLRC and FLORELLO TANCHICO (13

TH MONTH PAY COVERAGE)

Facts:

Private respondent was hired by Petitioner as First Assistant Engineer in 1978. He was then

promoted as Chief Engineer in 1981. Tanchico returned to the Philippines for his 2 month

vacation in 1992. However, when private respondent underwent to standard medical examination

prior boarding, it was found out that he was suffering from Heart Disease, Hypertension and

Diabetes. Petitioner no longer deployed him instead offered to pay him benefits under the Career

Employment Incentive Plan to which he accepted.

On 1993, he filed a complaint against petitioner for illegal dismissal with claims of other

monetary benefits including 13th

month pay.

Issue: Whether or not a seafarer is entitled to 13th

month pay.

Ruling:

No. The Court of Appeals rely its grant of 13th

month pay to Tanchico on the premise that the

latter is a regular employee. It was traced in the Courts previous rulings that seafarers are

contractual employees whose employments are terminated every time their contracts of

employment expire. Further, P.D. 851 does not apply to seafarers. P.D. 85 contemplates the

situation of land based workers and not of seafarers who generally earn more than domestic land-

based workers. Tanchichos employment is governed by the Contract of Employment which is a

standard contract of the POEA, which likewise does not provide for the payment of 13th

month

pay.

325 JACKSON BLDG. ETC VS NLRC and FERDINAND GUMOGDA (MANNER OF WAGE PAYMENT)

Facts:

Gumogda was employed as janitor on the petitioner corporation. He then filed a 45-day leave of

absence since he will undergo an appendectomy, which would necessitate complete bed rest for

about 30 days from the date of the operation as shown by his medical certificate to which the

petitioner agreed. On January 3, 1992, private respondent informed petitioner Razul Requesto,

President of petitioner corporation, that he was physically fit to assume his work. However,

petitioners refused to accept him back contending that he had abandoned his work.

On March 24, 1992, private respondent filed with the Labor Arbiter a complaint against

petitioners for illegal dismissal, underpayment of wages and non-payment of thirteenth-month

pay and service-incentive leave pay.

Issue: Whether petitioners are liable for the payment of private respondent's 13th

month pay.

Ruling:

Private respondent is entitled to the thirteenth-month pay. Presidential Decree No. 851, as

amended by Memorandum Order No. 28, provides that employees are entitled to the thirteenth-

month pay benefit regardless of their designation and irrespective of the method by which their

wages are paid.

326 JPL MARKETING PROMOTIONS VS CA, NLRC, NOEL GONZALES, RAMON ABESA III AND FAUSTINO ANINIPOT

(WAGE DIFFERENCE)

Facts:

Petitioner is engaged on a business of recruitment and placement of workers. The 3 private

respondents were employed by JPL as merchandisers in Bicol Region as attendants for the

display of California Marketing Corporation (CMC). On August 13, 1996, JPL informed the

private respondents that CMC would stop its direct merchandising activity in Bicol Region

effective August 15, 1996. Private respondents were advised to wait for further notice as they

will be assigned to other clients. On October 17, 1996, respondents filed a complaint of illegal

dismissal against JPL, praying for separation pay, 13th

month pay, service incentive leave pay

and payment of moral damages. It appears that JPL is providing the respondents salaries which

were over and above the minimum claiming that 13th

month and service incentive leave pay

should not be given to the latter.

Issue: Whether or not private respondents are entitled to 13th

month pay.

Ruling:

Yes. Admittedly, private respondents were not given their 13th month pay and service incentive

leave pay while they were under the employ of JPL. Instead, JPL provided salaries which were

over and above the minimum wage. The Court rules that the difference between the minimum

wage and the actual salary received by private respondents cannot be deemed as their 13th month

pay and service incentive leave pay as such difference is not equivalent to or of the same import

as the said benefits contemplated by law. Thus, as properly held by the Court of Appeals and by

the NLRC, private respondents are entitled to the 13th month pay and service incentive leave

pay.

327 ULTRA VILLA FOOD HAUS VS GENISTON (HOUSEHELPERS)

Facts:

Geniston was allegedly hired as do it all guy in the Ultra Villa. He allegedly acts as waiter,

driver and maintenance in said restaurant. His employment therein spanned from March 1, 1989

until he was dismissed on May 13, 1992 by petitioner Tio. It appears that on May 11-12, 1993,

Geniston acted as Poll Watcher in the election instead of reporting to work as a driver for Tio.

Respondent prayed before the Labor Arbiter to order Tio to pay his overtime pay, premium pay,

service incentive leave pay and his 13th

month pay, as well as damages. The Labor Arbiter

concluded that he is a personal driver of Tio and not an employee of Ultra Villa. Thus, he is not

entitled to overtime pay, premium pay, service incentive leave pay and his 13th

month pay.

NLRC reversed the decision and ordered Tio to pay Genistons monetary claims as the court

determined.

Issue:

1. Whether or not private respondent is a personal driver of Tio. (for Case No. 327)

2. Whether or not private respondent is entitled to 13th

month pay. (for Case No. 323)

Ruling:

1. Yes. The Labor Arbiter correctly ruled that private respondent was petitioner's personal driver

and not an employee of the subject establishment. Accordingly, the terms and conditions of

private respondent's employment are governed by Chapter III, Title III, Book III of the Labor

Code as well as by the pertinent provisions of the Civil Code. Thus, Article 141 of the Labor

Code provides:

Art. 141. Coverage - This Chapter shall apply to all persons rendering services in

households for compensation.

Domestic or household service" shall mean services in the employers home which is usually

necessary or desirable for the maintenance and enjoyment thereof and includes ministering to the

personal comfort and convenience of the members of the employers household, including

services of family drivers.

Moreover, the specific provisions mandating these benefits are found in Book III, Title I of the

Labor Code , Article 82, which defines the scope of the application of these provisions, expressly

excludes domestic helpers from its coverage. Clearly then, petitioner is not obliged by law to

grant private respondent any of these benefits.

2. Yes. It would seem that in the Revised Guidelines on the Implementation of the 13th

month

pay, it excludes employers of household helpers from the coverage of P.D. No. 851.

Nevertheless, the court deemed it just to award the private respondent 13th

month pay in view of

petitioners practice of according private respondent such benefit. Indeed, petitioner admitted

that she gave private respondent 13th month pay every December.

328 ALLIANCE OF GOVERNMENT WORKERS VS NLRC (GOVERNMENT EMPLOYEES)

Facts:

Petitioner is a registered labor federation while the others are its affiliate unions which members

are employees of the government and other GOCCs. According to petitioners, P.D. No. 851

requires ALL EMPLOYERS to pay the 13th month pay to their employees with one sole

exception found in Section 2, which states that EMPLOYERS ALREADY PAYING THEIR

EMPLOYEES A 13TH

MONTH PAY OR ITS EQUIVALENT ARE NOT COVERED BY THIS

DECREE. Petitioners contend that Section 3 of the Rules and Regulations Implementing P.D.

851 included other types of employers not exempted by the decree. They further contend that the

secretary of Labor is not authorized to exempt other types of employers from the requirement.

Issue: Whether or not branches, subd., and instrumentalities of the Government including

GOCCs employees are entitled to 13th

month pay.

Ruling:

No. Personnel of the Government including any political subdivision or instrumentality thereof

and GOCCs are covered by the Civil Service and are governed by law. It would not be fair to

allow them to engage in concerted activities to wring higher salaries or fringe benefits from

Government.

As in other countries, government salaries and wages have always been lower than salaries,

wages, and bonuses in the private sector. However, civil servants have no cause for despair.

Service in the government may at times be a sacrifice but it is also a welcome privilege. Apart

from the emotional and psychic satisfactions, there are various material advantages.

329 ARCHILLES MANUFACTURING VS NLRC, GERONIMO MANUEL, ARNULFO DIAZ, JAIME CARUNUNGAN AND BENJAMIN RINDON

(TERMINATED EMPLOYEES)

Facts:

Archilles Manufacturing hired the private respondents as laborers in its steel factory in

Meycauayan, Bulacan. Petitioner is maintaining a bunkhouse in the work area which serves as

resting place for the laborers. A mauling incident happened involving a relative of the employee.

As a result, petitioner disallowed its workers from bringing their families to the bunkhouse.

However, private respondents continued to bring their families which cause discomfort to the

other employees. The management ordered the private respondents to remove their families and

to explain their violation to the rule. They consequently removed their families but failed to

submit their explanation, instead, they absented themselves for 5 days. Archilled terminated their

employment for abandonment. NLRC ordered the payment of the withheld salaries of the

respondents including their 13th

month pay. Petitioner appealed.

Issue: Whether or not private respondents are entitled of 13th

month pay.

Ruling:

Yes. Paragraph 6 of the Revised Guidelines on the Implementation of the 13th Month Pay Law

(P. D. 851) provides that "an employee who has resigned or whose services were terminated at

any time before the payment of the 13th month pay is entitled to this monetary benefit in

proportion to the length of time he worked during the year, reckoned from the time he started

working during the calendar year up to the time of his resignation or termination from the

service. The payment of the 13th month pay may be demanded by the employee upon the

cessation of employer-employee relationship. Furthermore, Sec. 4 of the original Implementing

Rules of P.D. 851 mandates employers to pay their employees a 13th month pay not later than

the 24th of December every year provided that they have worked for at least one (1) month

during a calendar year. Such benefit may not be lost or forfeited even in the event of the

employee's subsequent dismissal for cause without violating his property rights.

330 BOIE TAKEDA VS DE LA SERNA (BASIC WAGE/COMMISSION)

Facts:

A routine inspection was conducted on the premises of the petitioner by the Labor and

Development Officer Ramos. It was found out by Ramos that petitioner had not been including

the commissions earned by its medical representatives in computing their 13th

month pay.

Issue: Whether or not commissions should be included in the computation of the 13th

month pay.

Ruling:

No. The term "basic salary" is to be understood in its common, generally-accepted meaning, i.e.,

as a rate of pay for a standard work period exclusive of such additional payments as bonuses and

overtime. In remunerative schemes consisting of a fixed or guaranteed wage plus commission,

the fixed or guaranteed wage is patently the "basic salary" for this is what the employee receives

for a standard work period. Commissions are given for extra efforts exerted in consummating

sales or other related transactions. They are, as such, additional pay, which this Court has made

clear do not form part of the "basic salary."

In including commissions in the computation of the 13th month pay, the second paragraph of

Section 5(a) of the Revised Guidelines on the Implementation of the 13th Month Pay Law

unduly expanded the concept of "basic salary" as defined in P.D. 851. It is a fundamental rule

that implementing rules cannot add to or detract from the provisions of the law it is designed to

implement. Administrative regulations adopted under legislative authority by a particular

department must be in harmony with the provisions of the law they are intended to carry into

effect. They cannot widen its scope. An administrative agency cannot amend an act of Congress.

BASIC WAGE/COMMISSIONS

Philippine Duplicators Inc. vs. NLRC 241 SCRA 380 (1995)

Facts:

A previous case also petitioned by the Duplicators resulted in the directing of petitioner

to pay 13th month pay to private respondent employees computed on the basis of their

fixed wages plus sales commissions.

Petitioner Duplicators filed (a) a Motion for Leave to Admit Second Motion for

Reconsideration and (b) a Second Motion for Reconsideration. They submit that the

decision in the Duplicators case should now be considered as having been abandoned or

reversed by the Boie-Takeda decision, considering that the latter went "directly opposite

and contrary to" the conclusion reached in the former. Petitioner prays that the decision

rendered in Duplicators be set aside and another be entered directing the dismissal of the

money claims of private respondent Philippine Duplicators' Employees' Union.

Issue: W/N sales commissions of employees are included in the computation of their 13 month

pay?

Held:

The Third Division in Durplicators found that: o In the instant case, there is no question that the sales commission earned by the

salesmen who make or close a sale of duplicating machines distributed by

petitioner corporation, constitute part of the compensation or remuneration paid to

salesmen for serving as salesmen, and hence as part of the "wage" or salary of

petitioner's salesmen. Indeed, it appears that petitioner pays its salesmen a small

fixed or guaranteed wage; the greater part of the salesmen's wages or salaries

being composed of the sales or incentive commissions earned on actual sales

closed by them. No doubt this particular galary structure was intended for the

benefit of the petitioner corporation, on the apparent assumption that thereby its

salesmen would be moved to greater enterprise and diligence and close more sales

in the expectation of increasing their sales commissions. This, however, does not

detract from the character of such commissions as part of the salary or wage paid

to each of its salesmen for rendering services to petitioner corporation.

In other words, the sales commissions received for every duplicating machine sold

constituted part of the basic compensation or remuneration of the salesmen of Philippine

Duplicators for doing their job.

Especially significant here also is the fact that the fixed or guaranteed portion of the

wages paid to the Philippine Duplicators' salesmen represented only 15%-30% of an

employee's total earnings in a year.

Considering the above circumstances, the Third Division held, correctly, that the sales

commissions were an integral part of the basic salary structure of Philippine Duplicators'

employees salesmen. These commissions are not overtime payments, nor profit-sharing

payments nor any other fringe benefit. Thus, the salesmen's commissions, comprising a

pre-determined percent of the selling price of the goods sold by each salesman, were

properly included in the term "basic salary" for purposes of computing their 13th month

pay.

In the Boie-Takeda case, productivity bonuses are included in the basic salary of the

employees and are therefore not part of the computation of the 13-month.

Iran vs. NLRC 289 SCRA 433 (1998)

Facts:

Petitioner Antonio Iran is engaged in softdrinks merchandising and distribution in

Mandaue City, Cebu. He hired private respondents as truck drivers who double as

salesmen, truck helpers, and non-field personnel in pursuit thereof.

As part of their compensation, the driver/salesmen and truck helpers of petitioner

received commissions per case of softdrinks sold.

Pending the investigation of irregularities and settlement of the cash shortages, upon

audit operations, petitioner required private respondents to report for work every day but

they were not allowed to go on their respective routes. However, private respondents

stopped reporting for work, prompting petitioner to conclude that the former had

abandoned their employment. Consequently, petitioner terminated their services and filed

a case of estafa against private respondents

On the other hand, private respondents filed complaints against petitioner for illegal

dismissal, illegal deduction, and underpayment of wages, premium pay for holiday and

rest day, holiday pay, service incentive leave pay, 13th month pay, allowances, separation

pay, and recovery of cash bond, damages and attorney's fees.

According to the labor arbiter, the petitioner validly terminated the private respondents

services but ruled that petitioner did not comply with minimum wage requirements

(commissions paid not computed within the employees wages) and failed to pay their

13-month pay as well.

Both appealed from decision. NLRC affirmed the decision of the labor arbiter.

Issue: W/N the commissions paid by petitioner is included as actual wages of the private

respondents?

Held:

NLRCs decision is unsupported by law and jurisprudence. Article 97(f) of the Labor Code defines wage as follows:

Art. 97(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.

Art. 97 explicitly includes commissions as part of wages. These commissions are direct remunerations for services rendered. The nature of the work of a salesman and the reason

for such type of remuneration for services rendered demonstrate clearly that commissions

are part of a salesman's wage or salary.

Thus, the commissions earned by private respondents in selling softdrinks constitute part of the compensation or remuneration paid to drivers/salesmen and truck helpers for

serving as such, and hence, must be considered part of the wages paid them.

Likewise, there is no law mandating that commissions be paid only after the minimum wage has been paid to the employee. Verily, the establishment of a minimum wage only

sets a floor below which an employee's remuneration cannot fall, not that commissions

are excluded from wages in determining compliance with the minimum wage law.

Drivers and conductors who are compensated purely on a commission basis are

automatically entitled to the basic minimum pay mandated by law should said

commissions be less than their basic minimum for eight hours work. It can, thus, be

inferred that were said commissions equal to or even exceed the minimum wage, the

employer need not pay, in addition, the basic minimum pay prescribed by law. It follows

then that commissions are included in determining compliance with minimum wage

requirements.

Honda Phils. Inc. vs. Samahan ng Malayang Manggagawa sa Honda 460 SCRA 185 (2005)

Facts:

Petitioner entered into a Collective Bargaining Agreement (CBA) with respondents stating that:

o Section 3. 13th Month Pay The COMPANY shall maintain the present practice in the implementation

[of] the 13th month pay.

o Section 6. 14th Month Pay The COMPANY shall grant a14th Month Pay, computed on the same

basis as computation of 13th Month Pay.

o Section 7. The COMPANY agrees to continue the practice of granting, in its discretion, financial assistance to covered employees in December of each year,

of not less than 100% of basic pay.

The CBA is effective until 2000. And in 1998, the parties entered into negotiations regarding a new CBA but failed because talks bogged down. With this in mind,

respondents initiated a strike against the petitioner and the petitioner in turn filed a Notice

of Lockout. DOLE Secretary intervened and gave the case to NLRC for compulsory

arbitration and ordered the employees to go back to work and management accepted

them.

The management of Honda issued a memorandum announcing its new computation of the 13th and 14th month pay to be granted to all its employees whereby the thirty-one (31)-

day long strike shall be considered unworked days for purposes of computing said

benefits. As per the companys new formula, the amount equivalent to 1/12 of the employees basic salary shall be deducted from these bonuses, with a commitment however that in the event that the strike is declared legal, Honda shall pay the amount

deducted.

The union opposed the pro-rated computation of the bonuses and the matter was submitted for voluntary arbitration where the arbitrator ruled that the pro-ration is invalid.

Issue: W/N the pro-rated computation of the 13th month pay and the other bonuses in question is

valid and lawful.

Held:

A cursory reading of the provisions will show that the stipulations in the CBA did not

state categorically whether the computation of the 13th month pay, 14th month pay and

the financial assistance would be based on one full months basic salary of the

employees, or pro-rated based on the compensation actually received. The arbitrator thus

properly resolved the ambiguity in favor of labor as mandated by Article 1702 of the

Civil Code. The Court of Appeals affirmed the arbitrators finding and added that the

computation of the 13th month pay should be based on the length of service and not on

the actual wage earned by the worker.

The "basic salary" of an employee for the purpose of computing the 13th month pay shall

include all remunerations or earnings paid by his employer for services rendered but

does not include allowances and monetary benefits which are not considered or integrated

as part of the regular or basic salary, such as the cash equivalent of unused vacation and

sick leave credits, overtime premium, night differential and holiday pay, and cost-of-

living allowances.

For employees receiving regular wage, we have interpreted "basic salary" to mean, not

the amount actually received by an employee, but 1/12 of their standard monthly wage

multiplied by their length of service within a given calendar year. Thus, we exclude from

the computation of "basic salary" payments for sick, vacation and maternity leaves, night

differentials, regular holiday pay and premiums for work done on rest days and special

holidays.

SUBSTITUTE PAYMENTS

Framanlis Farms Inc. vs. MOLE 171 SCRA 87 (1989)

Facts:

18 employees of petitioners filed a case against their employers alleging that in 1977 to

1979 they were not paid emergency cost of living allowance (ECOLA) minimum wage,

13th month pay, holiday pay, and service incentive leave pay.

In their answer to the amended complaint, petitioners alleged that the private respondents

were not regular workers on their hacienda but were migratory (sacadas) or pakyaw

workers who worked on-and-off and were hired seasonally, or only during the milling

season, to do piece-work on the farms, hence, they were not entitled to the benefits

claimed by them.

The claims for holiday pay, service incentive leave pay, social amelioration bonus and

underpayment of minimum wage were not controverted. With respect to the

complainants' other claims, the petitioners submitted only random payrolls which showed

that the women workers were underpaid as they were receiving an average daily wage of

P5.94 only, although the male workers received P10 more or less, per day.

Minister of Labor ruled against petitioner but upon appeal modified the ruling and

ordering the employer to pay:

o 1. all non-pakyaw workers their claim for holiday and incentive leave pay for the

years 1977, 1978 and 1979;

2. all complainants their 13th month pay for the years 1978 and 1979;

3. all 'pakyaw' workers for the same period on days they worked for at least eight

(8) hours and earned below P8.06 daily, their pay differentials.

Petitioners admitted that they failed to pay their workers 13th month pay in 1978 and 1979. However, they argued that they substantially complied with the law by giving their

workers a yearly bonus and other non-monetary benefits amounting to not less than

1/12th of their basic salary, in the form of:

1. a weekly subsidy of choice pork meat for only P9.00 per kilo and later

increased to P11 per kilo in March 1980, instead of the market price of P10 to P15

per kilo;

2. free choice pork meat in May and December of every year; and

3. free light or electricity.

4. all of which were allegedly "the equivalent" of the 13th month pay.

Issue: W/N the enumerated items can be substitutes for payment of 13th

month pay.

Held:

Unfortunately, under Section 3 of PD No. 851, such benefits in the form of food or free electricity, assuming they were given, were not a proper substitute for the 13th month pay

required by law. PD 851 provides:

Section 3. Employees covered The Decree shall apply to all employees except to:

The term 'its equivalent' as used in paragraph (c) hereof shall include Christmas

bonus, mid-year bonus, profit-sharing payments and other cash bonuses

amounting to not less than 1/12 of the basic salary but shall not include cash and

stock dividends, cost of living allowances and all other allowances regularly

enjoyed by the employee, as well as non-monetary benefits.

Where an employer pays less than 1/12 of the employee's basic salary, the

employer shall pay the difference."

Neither may year-end rewards for loyalty and service be considered in lieu of 13th month pay. Section 10 of the Rules and Regulations Implementing Presidential Decree No. 851

provides:

o Section 10. Prohibition against reduction or elimination of benefits-Nothing herein shall be construed to authorize any employer to eliminate, or diminish in

any way, supplements, or other employee benefits or favorable practice being

enjoyed by the employee at the time of promulgation of this issuance."

14TH

MONTH PAY

Kamaya Port Hotel vs. NLRC 177 SCRA 160 (1989)

Facts:

Respondent Memia Quiambao with thirty others who are members of private respondent Federation of Free Workers (FFW) were employed by petitioner as hotel crew.

On the basis of the profitability of the company's business operations, management granted a 14th month pay to its employees starting in 1979.

In January 1982, operations ceased to give way to the hotel's conversion into a training center for Libyan scholars. However, due to technical and financing problems, the

Libyans pre-terminated the program on July 7, 1982, and petitioner allegedly suffered

losses amounting to P2 million and in the end totally closed its business.

Private respondent Federation of Free Workers (FFW), filed with the Ministry of Labor and Employment a complaint against petitioner for illegal suspension, violation of the

CBA and non-payment of the 14th month pay. Records however show that the case was

submitted for decision on the sole issue of alleged non-payment of the 14th month pay

for the year 1982.

Labor Arbiter ordered petitioner to pay the 14th month pay to respondents for the year 1982. And NLRC, on appeal affirmed the payment of the 14

th month pay saying: we

believe that individual complainants herein are still entitled to the 14th month pay for

1982 because to our mind, the granting of this 14th month pay has already ripened into a

company practice which respondent company cannot withdraw unilaterally. This 14th

month pay is now an existing benefit which cannot be withdrawn without violating article

100 of the Labor Code. To allow its withdrawal now would certainly amount to a

diminution of existing benefits which complainants are presently enjoying. Premised on

the above, the individual complainants are entitled to the 14th month pay for 1982 and

respondent should pay the same.

Issue: W/N the 14th

Month Pay can be withdrawn without violating article 100 of the Labor

Code.

Held:

Article 100 of the Labor Code which states: o 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

It is patently obvious that Article 100 is clearly without applicability. The date of effectivity of the Labor Code is May 1, 1974. In the case at bar, petitioner extended its

14th month pay beginning 1979 until 1981. What is demanded is payment of the 14th

month pay for 1982. Indubitably from these facts alone, Article 100 of the Labor Code

cannot apply.

Moreover, there is no law that mandates the payment of the 14th month pay. This is emphasized in the grant of exemption under Presidential Decree 851 (13th Month Pay

Law) which states: "Employers already paying their employees a 13th month pay or its

equivalent are not covered by this Decree." Necessarily then, only the 13th month pay is

mandated.

Also contractually, as gleaned from the collective bargaining agreement between management and the union, there is no stipulation as to such extra remuneration.

Verily, a 14th month pay is a misnomer because it is basically a bonus and, therefore, gratuitous in nature. The granting of the 14th month pay is a management prerogative

which cannot be forced upon the employer. It is something given in addition to what is

ordinarily received by or strictly due the recipient. It is a gratuity to which the recipient

has no right to make a demand.

DIMUNUTION

Davao Fruits Corp. vs. Associated Labor Unions 225 SCRA 562 (1993)

Facts:

Respondent Associated Labor Unions (ALU), for and in behalf of all the rank-and-file workers and employees of petitioner, filed a complaint before the Ministry of Labor and

Employment, against petitioner, for "Payment of the Thirteenth-Month Pay

Differentials." Respondent ALU sought to recover from petitioner the thirteenth month

pay differential for 1982 of its rank-and-file employees, equivalent to their sick, vacation

and maternity leaves, premium for work done on rest days and special holidays, and pay

for regular holidays which petitioner, allegedly in disregard of company practice since

1975, excluded from the computation of the t