SONGCO V.

NLRC 183 SCRA 610 MEDIALDEA, J:

FACTS 1. Petitioners were members of the sales force of respondent Zuellig. Zuellig filed with the DOLE an application seeking clearance to terminate the services of petitioners allegedly on the ground of retrenchment due to financial losses. Petitioners opposed said application alleging that the company is not suffering from losses and that they are being dismissed because of their membership in the union. 2. During the last day of hearing of the case, the petitioners manifested that they are no longer contesting their dismissal. The parties agreed that the sole issue to be resolved is the basis of the separation pay due to petitioners. 3. Petitioners, as members of the sales force of Zuellig, received monthly salaries of at least P400 plus commissions for every sale they made. 4. The Collective Bargaining Agreement entered into by Zuellig and Zuellig Employees Association of which the petitioners are members, contains: Any employee, who is separated from employment due to XXX permanent lay-off not due to the fault of said employee shall receive from the company a retirement gratuity in an amount equivalent to 1 months salary per year of service. One month of salary as used in this paragraph shall be deemed equivalent to the salary date of retirement, years of service shall be deemed equivalent to total service credits, a fraction of at least 6 months being considered 1 year, including probationary employment. 5. Article 284 of the Labor Code then prevailing likewise provides: The termination of employment of any employee due to XXX retrenchment to prevent losses XXX shall entitle the employee affected thereby to separation pay. XXX The separation pay shall be equivalent to 1 month pay or at least 1 month pay for every year of service, whichever is higher. 6. Petitioners argue that their sales commissions and allowances should be included in the monthly salary for the purpose of computing their separation pay. 7. Zuellig contends that if it really were the intention of the Labor Code and its Implementing Rules to include commissions in the computation of separation pay, it could have explicitly said so in clear and equivocal terms. In addition, in the definition of the term wage (Article 97), commission is used only as one of the features or designations attached to the word remuneration or earnings 8. The labor arbiter rendered a decision ordering private respondent to pay the petitioners separation pay equivalent to their 1 month salary (exclusive of commissions allowances, etc) for every year of service. The labor arbiter ruled wage as defined in Article 97(f) of the Code is not synonymous with salary as provided in the CBA and Article 284. 9. Petitioners appeal to the NLRC was dismissed for lack of merit. Hence, the present petition for review.

ISSUE Whether or nor earned sales commissions and allowances be included in the monthly salary of the petitioners for the purpose of computing their separation pay

HELD YES. Anent the inclusion of allowances, the Court ruled in Santos v. NLRC that in the computation of back wages and separation pay, account must be taken not only of the basis salary of the petitioner but also her transportation and emergency living allowances.

Anent the inclusion of commissions, Art 97(f) by itself is explicit that commission is included in the definition of the term wage. Where the law speaks in clear and categorical language, there is no room for interpretation or construction; there is only room for application. The ambiguity between Art 97(f), which defines the term wage and Article 284 and the CBA, which mention the words pay and salary is more apparent than real. The word salary

means a recompense or consideration made to a person for his pains and industry in another mans business. There is eminent authority for holding that the words wages (Middle English: wagen) and salary (Latin: salarium) are essentially synonymous. Both words are interchangeably used and refer to one and the same meaning: a reward or recompense for services performed. Likewise, pay is synonymous with wage and salary. Inasmuch as the three words have the same meaning and commission is included in the definition of wage the logical conclusion is, in the computation of the separation pay of the petitioners, their salary base should also include their earned sales commissions.

Granting, for the sake of argument that the commissions were in the form of incentives or encouragement, so that the petitioners would be inspired to put little more industry on the jobs assigned to them, these commissions are still direct remunerations for services rendered which increased the income of Zuellig.

Commission is the recompense, compensation, or reward of an agent, salesman, executor, trustee, receiver, when the same is calculated as a percentage on the amount of his transactions or on the profit of the principal. The nature of the work of a salesman and the reason for such type of remuneration for services rendered demonstrate clearly that commissions are part of petitioners wage or salary. The Court takes judicial notice that some salesmen do not receive basic salary but depend on commissions and allowances alone, although an employer-employee relationship exists. If the opposite view is taken that commissions do not form part of salary or wage, the Court will be saying that such salesmen will not be entitled to separation pay, which is absurd. The workingmans welfare should be the primordial concern in interpreting the Labor Code and its implementing rules and regulations. All doubts should be resolved in favor of labor.

Ruga et. Al. vs. NLRC (G.R. No. L-72654-61 January 22, 1990) Facts: Records show that the petitioners were the fishermen-crew members of 7/B Sandyman II, one of several fishing vessels owned and operated by private respondent De Guzman Fishing Enterprises which is primarily engaged in the fishing business with port and office at Camaligan, Camarines Sur. For services rendered in the conduct of private respondent's regular business of "trawl" fishing, petitioners were paid on percentage commission basis in cash by one Mrs. Pilar de Guzman, cashier of private respondent. On September 11, 1983 upon arrival at the fishing port, petitioners were told by Jorge de Guzman, president of private respondent, to proceed to the police station at Camaligan, Camarines Sur, for investigation on the report that they sold some of their fish-catch at midsea to the prejudice of private respondent. Petitioners denied the charge claiming that the same was a countermove to their having formed a labor union and becoming members of Defender of Industrial Agricultural Labor Organizations and General Workers Union (DIALOGWU) on September 3, 1983. On March 31, 1984, after the case was submitted for resolution, Labor Arbiter Asisclo S. Coralde rendered a joint decision dismissing all the complaints of petitioners on a finding that a "joint fishing venture" and not one of employer-employee relationship existed between private respondent and petitioners. Issue: The issue to be resolved in the instant case is whether or not the fishermen-crew members of the trawl fishing vessel 7/B Sandyman II are employees of its owner-operator, De Guzman Fishing Enterprises, and if so, whether or not they were illegally dismissed from their employment. Held: Fishermen crew members who were recruited by one master fisherman locally known as "maestro" in charge of recruiting others to complete the crew members are considered employees, not industrial partners, of the boat-owners. Also, there existed an employeremployee relationship between the boat-owner and the fishermen crew members not only because they worked for and in the interest of the business of the boat-owner but also because they were subject to the control, supervision and dismissal of the boat-owner. WHEREFORE, in view of the foregoing, the petition is GRANTED. The questioned resolution of the National Labor Relations Commission dated May 30,1985 is hereby REVERSED and SET ASIDE. Private respondent is ordered to reinstate petitioners to their former positions or any equivalent positions with 3-year backwages and other monetary benefits under the law. No pronouncement as to costs.

INTERNATIONAL SCHOOL ALLIANCE OF EDUCATORS vs. Quisumbing G.R. No. 128845 June 1, 2000 FACTS: Private respondent International School, Inc is a domestic educational institution established primarily for dependents of foreign diplomatic personnel and other temporary residents. Accordingly, the School hires both foreign and local teachers as members of its faculty, classifying the same into two: (1) foreign-hires and (2) local-hires. The School employs four tests to determine whether a faculty member should be classified as a foreign-hire or a local hire: a. What is one's domicile? b. Where is one's home economy? c. To which country does one owe economic allegiance? d. Was the individual hired abroad specifically to work in the School and was the School responsible for bringing that individual to the Philippines? 2 The School grants foreign-hires certain benefits not accorded local-hires. These include housing, transportation, shipping costs, taxes, and home leave travel allowance. Foreign-hires are also paid a salary rate twenty-five percent (25%) more than local-hires. The School justifies the difference on two "significant economic disadvantages" foreign-hires have to endure, namely: (a) the "dislocation factor" and (b) limited tenure When negotiations for a new collective bargaining agreement were held on June 1995, petitioner International School Alliance of Educators, "a legitimate labor union and the collective bargaining representative of all faculty members" 4 of the School, contested the difference in salary rates between foreign and local-hires. On September 7, 1995, petitioner filed a notice of strike. The failure of the National Conciliation and Mediation Board to bring the parties to a compromise prompted the Department of Labor and Employment (DOLE) to assume jurisdiction over the dispute. On June 10, 1996, the DOLE Acting Secretary, Crescenciano B. Trajano, issued an Order resolving the parity and representation issues in favor of the School. Then DOLE Secretary Leonardo A. Quisumbing subsequently denied petitioner's motion for reconsideration in an Order dated March 19, 1997. Petitioner claims that the point-of-hire classification employed by the School is discriminatory to Filipinos and that the grant of higher salaries to foreign-hires constitutes racial discrimination. The School disputes these claims and gives a breakdown of its faculty members, numbering 38 in all, with nationalities other than Filipino, who have been hired locally and classified as local hires. 5 The Acting Secretary of Labor found that these non-Filipino local-hires received the same benefits as the Filipino local-hires. ISSUE: Whether or not there was an equal pay for an equal work. HELD: We cannot agree. The foregoing provisions impregnably institutionalize in this jurisdiction the long honored legal truism of "equal pay for equal work." Persons who work with substantially equal qualifications, skill, effort and responsibility, under similar conditions, should be paid similar salaries. 22 This rule applies to the School, its "international character" notwithstanding. If an employer accords employees the same position and rank, the presumption is that these employees perform equal work. This presumption is borne by logic and human experience. If the employer pays one employee less than the rest, it is not for that employee to explain why he receives less or why the others receive more. That would be adding insult to injury. The employer has discriminated against that employee; it is for the employer to explain why the employee is treated unfairly. The local-hires perform the same services as foreign-hires and they ought to be paid the same salaries as the latter. For the same reason, the "dislocation factor" and the foreign-hires' limited tenure also cannot serve as valid bases for the distinction in salary rates. The dislocation factor and limited tenure affecting foreign-hires are adequately compensated by certain benefits accorded them which are not enjoyed by local-hires, such as housing, transportation, shipping costs, taxes and home leave travel allowances. In this case, we find the point-of-hire classification employed by respondent School to justify the distinction in the salary rates of foreign-hires and local hires to be an invalid classification. There is no reasonable distinction between the services rendered by foreign-hires and local-hires. The practice of the School of according higher salaries to foreign-hires contravenes public policy and, certainly, does not deserve the sympathy of this Court.

MABEZA V. NLRC 271 SCRA 670 KAPUNAN, J. FACTS 1. Norma Mabeza was an employee of Hotel Supreme in Baguio City. 2. Sometime around May 1991, she and her co-employees were asked by the hotels management to sign an instrument attesting to the latters compliance with minimum wage order and other labor standard provisions of law. 3. Mabeza signed the affidavit but refused to go to the Prosecutors Office to swear to the veracity of its contents. 4. The affidavit was drawn by the management was for the purpose of refuting the findings of the Labor Inspector of DOLE in an inspection conducted in the establishment of the private respondent. 5. After Mabeza refused to proceed to the Prosecutors Office, she was ordered by management to turn over the keys to her living quarters and to remove all her belongings from the hotel premises. 6. She thereafter filed a leave of absence which was denied by management. When she attempted to return to work of May 10, 1991, she was advised to just continue with her unofficial leave of absence. 7. Petitioner filed a complaint for illegal dismissal. She alleged in her complaint the underpayment of wages, non-payment of holiday pay, service incentive leave pay, 13th month pay, night differential and other benefits. 8. Private respondent avers on the other hand that petitioner abandoned her job without notice to management. They also contend that there was no basis for the money claim for underpayment and other benefits as these were paid in the form of facilities to petitioner and the hotels other employees. ISSUE Whether or not the wages received by the employees of private respondent are below the minimum set by law. HELD YES. The Labor Arbiter accepted hook, line and sinker the private respondents bare claim that the reason the monetary benefits received by petitioner between 1981 to 1987 were less than the minimum wage was because petitioner did not factor in the meals, lodging, electric consumption and the water she received during the period in her computations. Granting that means and lodging were provided and indeed constituted facilities, such facilities could not be deducted without the employer complying first with certain legal requirements. Without satisfying these requirements, the employer simply cannot deduct the value from the employees wages. First proof must be shown that such facilities are customarily furnished by the trade. Second, the provision of deductible facilities must be voluntarily accepted in writing by the employee. Finally, facilities must be charged at fair and reasonable value. These requirements were not met in the instance case. More significantly, the food and lodging or the electricity and water consumed by the petitioner were not facilities but supplements. A benefit or privilege granted to an employee for the convenience of the employer is not a facility. The criterion in making a distinction between the two not so much lies in the king (food, lodgingn) but the purpose. Considering therefore, that hotel workers are required to work different shifts and are expected to be available at various odd hours, their ready availability is necessary matter in the operations of a small hotel, such as the private respondents hotel.