Wage

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 and Employment, 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.
(Article 97 (f) Labor Code)

Facilities/Supplements

Atok-Big Wedge Co. Doctrine:

Facilities items of expense necessary for the
laborers and his familys existence and
subsistence so that by express provision of law
(Sec. 2 [g]), they form part of the wage and when
furnished (to provide what is needed) by the
employer are deductible therefrom, since if they
are not furnished, the laborer would spend and
pay for them just the same.

Supplements extra remuneration/special
privileges/benefits given to or received by the
laborers over and above their ordinary earnings
or wages.

SLL International and Mayon Doctrine:
The distinction is not in the kind of benefit or item
(food, lodging, bonus or sick leave) given but in
the purpose for which it is given.

Facilities the benefit/privilege is part of the
laborers basic wages.

Supplements benefit/privilege is above and over
an employees basic wages.

SLL International and Mabeza Doctrine:
Before the value of facilities can be deducted from
the employees wages, the following requisites
must be present:
(1) Proof that the facilities are customarily
furnished by trade
(2) Provision of deductible facilities must be
voluntarily accepted in writing by the
employee
(3) Facilities must be charged at reasonable
value

SLL International and Mayon Doctrine:
Mere availment is not sufficient to allow
deductions from employees wages.

Mabeza Doctrine:
Food/snacks or other convenience provided by
the employers are deemed as supplements if they
are granted for the convenience of the employer.





SLL International vs. NLRC

Facts:
Private Respondents were employed as
cable/linemen project employees by SLL
International. Their services were engaged in four
projects of the company from March 1997 to
February 2000. During these periods, SLL
International was underpaying the private
respondents as to the prescribed minimum wage
in the particular area of the project.

On the fourth project, due to economic problems,
SLL had to cut down the overtime work of its
employees including private respondents. Private
Respondents requested to work overtime to
which the Lagon, owner/officer of SLL
International, refused and told them that should
they insist, they would have to go home at their
own expense and that they would not be allowed
to stay in the quarters.

Private Respondents left and went home to Cebu.
Then, they filed a complaint for illegal dismissal,
non-payment of wages, holiday pay, 13th month
pay, service incentive leaves, damages and
attorneys fees.

SLL International claim that the food, lodging
house, transportation, electricity, water and
snacks they provided to the private respondents
should be added to the computation of their basic
pay.

Labor Arbiter: Private Respondents are regular
employees. However, they were not illegally
dismissed. The claims of SLL International should
not be added in the computation of their basic pay
since these were not given without their consent.
Thus, private respondents were underpaid.

NLRC: affirmed Labor Arbiters decision

CA: affirmed the decision of NLRC and Labor
Arbiter

Issue/s:
Whether or not the benefits/privileges provided
by SLL International to private respondents
should be considered as Facilities even without a
written consent from the latter.

Decision:
The court denied SLL Internationals petition and
affirmed the ruling of the lower courts.

In labor cases, the burden of proof of proving
payment of monetary claims rests on the
employer because the pertinent personal files,
payrolls, records, remittances and other similar
documents are in their possession and not in the
workers.
In this case, SLL International failed to
present any evidence payroll or payslips
to support their defense of payment.

Before the value of facilities can be deducted from
the employees wages, the following requisites
must be present:
(1) Proof that the facilities are customarily
furnished by trade
(2) Provision of deductible facilities must be
voluntarily accepted in writing by the
employee
(3) Facilities must be charged at reasonable
value
Mere availment is not sufficient to allow
deductions from employees wages.
SLL International failed to meet these
requirements:
(1) They failed to present
company policy showing that
provisions for meals and
lodging were part of the
employers salary.
(2) They failed to provide proof
of the employees written
authorization.
(3) They failed to show how they
arrived at the computation of
the expenses.

The benefits/privileges provided by SLL
International to private respondents are
supplements since they were given freely for the
purpose of maintaining the efficiency and health
of their workers while they were working at their
respective project.

Mayon Hotel and Restaurant vs. Adana, et al.

Facts:
On various dates starting 1981, private
respondents were hired by Mayon Hotel and
Restaurant for different positions (Waiter, Cook,
Roomboy, etc.) Due to expiration and non-renewal
of lease contract for the rented space, the
operations of the hotel were suspended but it
continued its operation in a new location.
However, not all the employees continued
working in the Mayon Restaurant at its new site.

Thus, the employees filed complaints for illegal
dismissal, underpayment of wages and money
claims.

Labor Arbiter: held that the employees were
illegally dismissed and granted
separation/retirement pay and other money
claims of the employees.

NLRC: reversed the Labor Arbiters decision and
dismissed all the complaints.

CA: reversed NLRCs decision and reinstated
Labor Arbiters

Issue/s:
Whether or not the employees were illegally
dismissed

Whether or not the employees are entitled to
money claims due to underpayment of wages,
holiday pay, rest day premium, SILP, COLA,
overtime pay and night shift differential pay.

Decision:
The court dismissed this petition and affirmed
CAs decision.

At first, Mayon Hotel and Restaurant contends
that the employees were temporarily laid off; the
money claims of the employees were premature.
But when the Labor Arbiter ruled that there was
illegal dismissal when the lay-off had exceeded 6
months, petitioner company claimed that they
were not able to reinstate the employees due to
financial losses.
Court held that the evidence on record
show that Mayon Hotel and Restaurant
intended the termination of the
employees as permanent.
(1) In their position paper to the
Labor Arbiter, they made no
mention of any intent to
recall the employees.
(2) The owners of Mayon
continually accused the
employees of
mismanagement is contrary
with the desire to recall them
to work.
Even if the cessation of employment was
merely temporary, it became dismissal by
operation of law when Mayon Hotel and
Restaurant failed to reinstate
respondents after the lapse of 6 months,
as provided in the Labor Code.

Invocation of serious business losses is not a
defense to payment of labor standard benefits.
Employer cannot exempt himself from liability to
pay minimum wages because of poor financial
condition of the company. Payment of minimum
wage is not dependent on the employers ability to
pay.


Mayon Hotel and Restaurant contends that the
cost of food and snacks provided to respondents
as facilities should have been included in the
payment of their wages. They invoke Sections 5
and 6, Rule VII-A which allow the deduction of
facilities provided by the employer through an
appropriate Facility Evaluation Order issued by
the Regional Director of DOLE. They also aver that
they give 5 percent gross each month as
incentives.

Before the value of facilities can be deducted from
the employees wages, the following requisites
must be present:
(1) Proof that the facilities are customarily
furnished by trade
(2) Provision of deductible facilities must be
voluntarily accepted in writing by the
employee
(3) Facilities must be charged at reasonable
value
Mere availment is not sufficient to allow
deductions from employees wages.
Mayon Hotel and Restaurant failed to
comply with these requirements:
(1) No proof of respondents
written authorization
(2) Owner admitted that she did
not inform the employees of
the facilities she had applied
for.
(3) Labor Arbiter found that the
actual food served on the
employees was different
from what was provided in
the Facility Evaluation Order.

Food/snacks or other convenience provided by
the employers are deemed as supplements if they
are granted for the convenience of the employer.
The employees testified that they were
required to eat in the hotel and restaurant
so that they will not go home and there is
no interruption in the services of Mayon
Hotel and Restaurant.

The distinction is not in the kind of benefit or item
(food, lodging, bonus or sick leave) given but in
the purpose for which it is given.
The hotel workers were provided with
food and snack because their ready
availability is a necessary matter in the
operations of a small hotel - they work in
different shifts and are expected to be
available at various odd hours.

The 5 percent gross income of the establishment
cannot be considered as part of the respondents
wage because it is in the nature of share from
service charges since the respondents testified
that these were not fixed amounts and not given
monthly.

Mabeza vs. NLRC, Ng/Hotel Supreme

Facts:
Petitioner Mabeza was employed as a
chambermaid by Ng in Hotel Supreme.

They were made to sign an instrument attesting to
Hotel Supremes compliance with minimum wage
and other labor standards provisions of law.
Mabeza signed the same but refused to go to the
City Prosecutors Office to swear to the veracity of
the contents of the instrument.
Ng strongly reprimanded Mabeza for refusing to
go to the City Prosecutors Office. Then, Mabeza
was ordered to return the keys of her living
quarters and remove her belongings from the
hotel premises. She then reluctantly filed a leave
of absence which was denied by management.
When she attempted to return to work, she was
informed that she should not report to work and
instead continue with her unofficial leave. Three
days after her attempt to return to work, she filed
a complaint for illegal dismissal.

Ng alleged that Mabeza abandoned her work. A
few months after, Ng supplemented his answer by
saying that Mabeza was dismissed due to loss of
confidence supported by a criminal complaint of
qualified theft at the City Prosecutors Office.

Labor Arbiter: dismissed Mabezas complaint on
the ground of loss of confidence.
NLRC: affirmed Labor Arbiters decision

Issue/s:
Whether or not Mabeza was illegally dismissed

Whether or not Mabeza is entitled to money
claims.

Decision:
The court granted this petition, reversed NLRCs
decision and held that Mabeza was illegally
dismissed and is entitled to money claims.

For abandonment to arise, there must be
concurrence of two things:
(1) Lack of intention to work
(2) Presence of overt acts signifying
employees intention not to work
The fact Mabeza attempted to file a leave
of absence indicates not an intention to
abandon but her intention to return to
work after the period of her leave of
absence, had it been granted, shall have
expired.

While absence from work for a prolonged period
may suggest abandonment in certain instances,
mere absence of one or two days would not be
enough to sustain such claim.
Mabeza tried to resume working to the
hotel, to no avail. It was only after she had
been repeatedly rejected that she filed a
case for illegal dismissal.

Loss of confidence as a just cause for dismissal
was never intended to provide employers with a
blank check for terminating their employees. Loss
of confidence apply only to cases involving
employees occupying positions of trust and
confidence or where employees is routinely
charged with the care and custody of the
employers money or property managerial
employees, cashiers, auditors, and employees who
regularly handle significant amounts of money or
property.
Loss of confidence as a just cause for
dismissal cannot apply to Mabeza - a
chambermaid.

Hotel Supreme claims that the reason Mabeza
received less than the minimum wage was
because she did not include the meals, lodging,
electricity and water she received in her
computations.
Before the value of facilities can be deducted from
the employees wages, the following requisites
must be present:
(1) Proof that the facilities are customarily
furnished by trade
(2) Provision of deductible facilities must be
voluntarily accepted in writing by the
employee
(3) Facilities must be charged at reasonable
value
These requirements were not met.
(1) Hotel Supreme failed to
present any company policy
to show that the meal and
lodging are part of the salary.
(2) They failed to provide proof
of the employees written
authorization.
(3) They failed to show how they
arrived at the valuations.

Food/snacks or other convenience provided by
the employers are deemed as supplements if they
are granted for the convenience of the employer.
The distinction is not in the kind of benefit or item
(food, lodging, bonus or sick leave) given but in
the purpose for which it is given.
The food, lodging, electricity and water
consumed by Mabeza were not facilities
but supplements. The hotel workers were
provided with food and snack because
their ready availability is a necessary
matter in the operations of a small hotel -
they work in different shifts and are
expected to be available at various odd
hours.

Wage Distortion
A situation where an increase in
prescribed wage rates results in the
elimination or severe contraction of
intentional quantitative differences in
wage or salary rates between and among
employee groups in an establishment as
to effectively obliterate the distinctions
embodied in such wage structure based
on skills, length of service, or other logical
bases of differentiation.

Manila Mandarin Doctrine:
The issue of whether a wage distortion exists as a
consequence of the grant of a wage increase to
certain employees is a question of fact.

RA 6727: Procedure to be followed when
application of any prescribed wage increase by
virtue of law or Wage order issued by any
Regional Board results in distortions of the wage
structure within an establishment:
1. Employer and union shall negotiate to
correct the distortions through:
a. Grievance procedure under their
collective bargaining agreement
b. If unresolved, through voluntary
arbitration
2. If there are no collective bargaining
agreement or recognized labor unions,
Employers and workers shall endeavor to
correct such distortions through:
a. National Conciliation and
Mediation Board
b. If unresolved, National Labor
Relations Commission (NLRC)

Manila Mandarin Employees Union vs. NLRC

Facts:
Petitioner Manila Mandarin Employees Union filed
a complaint, in behalf of its members, to compel
Mandarin to pay salary differentials of the
individual employees concerned because of wage
distortions in their salary structure allegedly
created by the upward revisions of the minimum
wage pursuant to various Presidential Decrees
and Wage Orders.

Labor Arbiter: ruled that there were in fact wage
distortions entitling the union members to salary
adjustments.
NLRC: reversed Labor Arbiters decision and
dismissed the complaint.

Issue:
Whether there is a wage distortion in this case.

Decision:
The court affirmed NLRCs decision.

The burden of proving the existence of a wage
distortion lies upon the Union. They failed to do
this. They failed to show substantial evidence the
quantitative differences in wage rates between
employee groups and if there were any severe
contractions of these quantitative differences.

The court held that NLRC correctly concluded that
there was no wage distortion contemplated by the
law. The court refuted the evidence presented by
the Union which shows employees which have
same position but different salary. The court
adopted the explanation provided by Mandarin
that the Union failed to appreciate various
circumstances relating to the employment of the
13 employees:
1. An employee was hired initially at a
position level carrying a higher hiring rate
than the others
2. Employee failed to meet the cut-off date
in the grant of yearly CBA increase
3. Union did not get the correct data on
salaries.

Even if there exists a wage distortion, this was
corrected under the fully implemented
Compromise Agreement. Union and Mandarin
entered into a New Collective Bargaining
Agreement thus it is deemed to have thereby
settled any remaining question of wage distortion
since the wages and wage distortions are
economic issues and are a proper subject of
collective bargaining.