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Respondent. ....................................................................................................................

Contents

G.R. No. 187200 ..............................................................................................................

Present: ........................................................................................................................... [A.M. No. P-02-1629. September 11, 2002] ................................................................................................ 2

PUNO, C.J., Chairperson, ................................................................................................ CONCERNED EMPLOYEE, complainant, vs. HELEN D. NUESTRO, COURT STENOGRAPHER III, RTC, BRANCH 28, BAYOMBONG, NUEVA CARPIO MORALES, .......................................................................................................... VIZCAYA, respondent. ................................................................................................................................... 2 LEONARDO-DE CASTRO,.................................................................................................. G.R. No. L-65786 July 16, 1984 ..................................................................................................................... 4 BERSAMIN, and ............................................................................................................... SINGAPORE AIRLINES LOCAL EMPLOYEES ASSOCIATION, and CECILIA VILLARAMA, JR., JJ........................................................................................................... MATRIANO, petitioners, vs. NATIONAL LABOR RELATIONS Promulgated:................................................................................................................... COMMISSION and SINGAPORE AIRLINES LIMITED, respondents. ................................................................ 4

May 5, 2010..................................................................................................................... SEVILLA TRADING COMPANY, petitioner, vs. A.V.A. TOMAS E. SEMANA, SEVILLA TRADING WORKERS UNION–SUPER, respondents.......................................................... 8 1995 ................................................................................ G.R. No. 110068 February 15,

G.R. No. 81477 April 19, 1989 ..................................................................................................................... 14INC., petitioner, vs. NATIONAL LABOR PHILIPPINE DUPLICATORS, RELATIONS COMMISSION and PHILIPPINE DUPLICATORS DENTECH MANUFACTURING CORPORATION and JACINTO LEDESMA EMPLOYEES UNION-TUPAS,respondents. ....................................................................... in his capacity as General Manager,petitioners, vs. NATIONAL

LABOR RELATIONS COMMISSION, CCLU, BENJAMIN MARBELLA, G.R. No. 92174 December 10, 1993 ................................................................................ ARMANDO TORNO, JUANITO TAJAN, JR. and JOEL BOIE-TAKEDA CHEMICALS, INC., petitioner, vs. ............................................................. TORNO, respondents. ................................................................................................................................. 14 HON. DIONISIO DE LA SERNA, Acting Secretary of the Department of G.R. No. 97346 March 23, 1992 .................................................................................................................. 18 Labor and Employment, respondent. ............................................................................. RODOLFO YOSORES, petitioner, vs. EMPLOYEE'S COMPENSATION G.R. No. L-102552 December 10, 1993 ........................................................................... COMMISSION, respondent. ........................................................................................................................ 18 PHILIPPINE FUJI XEROX CORP., petitioner, vs. ............................................................... GOLDEN ACE BUILDERS and ARNOLD U. AZUL, .......................................................................................... 20 CRESENCIANO B. TRAJANO, Undersecretary of the Department of Petitioners, .................................................................................................................................................. 20 Labor and Employment, and PHILIPPINE FUJI XEROX EMPLOYEES - versus - ...................................................................................................................................................... 20 UNION, respondents. ...................................................................................................... JOSE A. TALDE, ............................................................................................................................................ 20 1

Executive Judge Rosales leaves the matter for appropriate action of the Court.

[A.M. No. P-02-1629. September 11, 2002] CONCERNED EMPLOYEE, complainant, vs. HELEN D. NUESTRO, COURT STENOGRAPHER III, RTC, BRANCH 28, BAYOMBONG, NUEVA VIZCAYA, respondent.
RESOLUTION PER CURIAM: The instant administrative case stemmed from the lettercomplaint dated March 1, 1999 filed with the Office of the Court Administrator by a ―concerned employee‖ against Helen D. Nuestro, Court Stenographer of the Regional Trial Court of Bayombong, Nueva Vizcaya, Branch 28 charging her with dishonesty. It is alleged therein that respondent availed of maternity leave effective October [1] 1, 1998 to November 25, 1998 although she did not get pregnant nor delivered but merely adopted a child which the Nuestro couple were able to register in their name with the local civil registrar. Acting on the letter-complaint, Deputy Court Administrator Bernardo T. Ponferrada referred the matter by way of 1st Indorsement dated April 23,1999 to Executive Judge Jose B. Rosales of the Regional Trial Court, Branch 28, Bayombong, Nueva Viscaya and to make a discreet investigation thereon. Based on his investigation, Executive Judge Rosales found that the Nuestro couple adopted a child whom they registered in their name; that respondent filed an application for maternity leave allegedly upon the advice of someone knowledgeable in law; that respondent subsequently tried to withdraw her application as she was bothered by her conscience but failed; and that accordingly,

On September 18, 2000, respondent was required by the Office of the Court Administrator to file her comment on the letter-complaint as well as on the findings of Executive Judge Rosales in his investigation. Respondent admits that she applied for maternity leave for a period of sixty (60) days effective September 1998 to October 1998; that she availed of the privilege after seeking the advice of someone knowledgeable in the law; that her application for the said privilege was occasioned by the overwhelming joy she experienced in having an adopted child after eleven (11) years of marriage; that she was, however, bothered by her conscience so she tried to withdraw the same but failed; and that she even filed an adoption case to correct the simulated birth of the child. Hence, respondent begs for utmost consideration and compassion from the Court for her infraction. She also pleads to be spared the penalty of suspension or dismissal from service as she has a family who depends on her for support. Respondent has been in the government service since November 16, 1990 and should therefore be familiar with the Civil Service Law and Rules. Sections 12, 13 and 14, Rule XVI of the Civil [2] Service Commission Resolution No. 91-1631 explicitly provide that only female married employees in every instance of pregnancy and irrespective of its frequency can be granted maternity leave. Said provisions state: Sec. 12. Married women in the government service who have rendered two (2) years or more of continuous service, shall, in addition to the vacation and sick leave granted to them, be entitled to maternity leave of sixty (60) days with full pay. For those who have rendered less than two (2) years of government service at the time of the enjoyment of maternity leave, the computation of their maternity leave pay shall be proportionate to their length of service.

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Sec. 13. Maternity leave shall be granted to female married employees in every instance of pregnancy irrespective of its frequency. Sec. 14. When an employee wants to report back to duty before the expiration of her maternity leave, she may be allowed to do so without refunding the commuted money value of the unexpired portion of her maternity leave and she shall be paid the corresponding salary for the services rendered. The act of filing an application for maternity leave when respondent never actually got pregnant constitutes dishonesty that deserves severe sanction from the Court. There is no need to remind respondent that she is an officer of the court and her conduct and behavior must always be beyond reproach and circumscribed [3] with the heavy burden of responsibility. A public servant must exhibit at all times the highest sense of honesty and integrity for no less than the Constitution mandates the principle that ―a public office is a public trust and all public officers and employees must at all times be accountable to the people, serve them with utmost [4] responsibility, integrity, loyalty and efficiency.‖ As the administration of justice is a sacred task, the persons involved in it ought to live up to the highest standards of honesty and integrity. Their conduct must, at all times, not only be characterized by propriety and [5] decorum but, above all, be above suspicion. This Court cannot countenance any act or omission of any of its officers which diminishes or tends to diminish the faith of the people in the judiciary. Her futile attempt to withdraw the fraudulent application for maternity leave is no point in her favor because it was obviously an afterthought and a result of her fear of getting caught. Notably respondent even bragged before this complaint was filed about being able to get around the law by successfully availing of maternity leave [6] even without getting pregnant. She must not be allowed to get away with it because of the bad example such a behavior will give to her co-employees and the bad image it will create for the judiciary. Under the Omnibus Rules Implementing Book V of Executive Order No. 292, (Administrative Code of 1987), the penalty for [7] dishonesty is dismissal, even for the first offense. Sec. 9 of the said rule likewise provides that the penalty shall carry with it cancellation

of eligibility, forfeiture of leave credits and retirement benefits and disqualification from reemployment in the government service. Further, it may be imposed without prejudice to criminal or civil liability. Dishonesty is a malevolent act that has no place in the court system. In the present case, respondent’s misconduct constitutes grave dishonesty that disqualifies her from holding any position in the judiciary. Her action is a blatant disregard for the values of integrity, uprightness and good conduct which are expected of all court personnel without exception. The behavior of even minor employees mirrors the image of the courts they serve, thus, they should at all times preserve the judiciary’s good name and standing as a true [8] temple of justice. The recommendation of the Office of the Court Administrator for six (6) months suspension is therefore too lenient in view of the gravity of the offense charged. It may be true that the respondent has been in the service for eleven years but she has blemished her record irreparably and, under the circumstances, we believe that her dismissal is warranted. WHEREFORE, the Court finds respondent Court Stenographer Helen D. Nuestro administratively liable for dishonesty and hereby resolves to DISMISS her from the service with forfeiture of all leave credits and retirement benefits, if any, and with prejudice to reinstatement or re-employment in any branch, instrumentality or agency of the government including government-owned and controlled corporations. SO ORDERED.

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Yet. On July 25.R. Jose C. Complainants are aware or should have been aware of this claimed benefit from the CBA since they are participants to the contract. Zarraga. L-65786 July 16. petitioners.00 per calendar year for ward charges and surgical fees in respect of each employee except as provided in Section 3.. and CECILIA MATRIANO. is employed by Singapore Airlines Limited (hereinafter referred to as SIA) as a telephone operator/receptionist.. The COMPANY will meet expenses up to P9.G. 1984 SINGAPORE AIRLINES LOCAL EMPLOYEES ASSOCIATION. J.000. they could have easily provided it so in Article X of the CBA. Really.. For us therefore to interpret the provision of Article X beyond its simple and precise meaning would certainly be sheer abuse of discretion on our part. they did not do anything about it during the negotiation and conclusion of the CBA. No. on the other hand. Azcuna & Bengzon for private respondent. Petitioner. The Solicitor General for respondent NLRC. And it only grants maternity leave benefits of 45 days. NATIONAL LABOR RELATIONS COMMISSION and SINGAPORE AIRLINES LIMITED.1981. a Collective Bargaining Agreement (CBA) was concluded between the complainant Singapore Airlines Local Employees-NTUAI-TRANSPIL-TUPAS (of which petitioner Matriano is a member) and respondent Singapore Airlines Limited. Bengzon. JR.: This is a petition for certiorari to review the decision of respondent National Labor Relations Commission (NLRC) dated March 31. vs. parties is for the company to undertake the expenses incurred by way of caesarian or even natural child birth. respondents. . Narciso. Matriano. The company shall not bear any expenses arising from any of the following: 4 .. Espinas for petitioners. if the intention of the Section 1. Cecilia E. The CBA provides among other things: ARTICLE Benefits XI — Hospitalization. Cudala & Pecson. xxx xxx xxx Section 3. dismissing the petitioner's appeal and affirming in toto the Labor Arbiter's decision to wit: xxx xxx xxx . Singapore Airlines Limited is a foreign corporation duly licensed to engage in the business of common carrier in the Philippines. Suffice it for us to state that the only provision in the CBA granting maternity benefits is Article X of the said CBA. 1982. Medical Care- GUTIERREZ..

contending that Matriano is not entitled to hospitalization and medical benefits under Article XI as its liability in maternity cases is limited to the maternity leave benefit provided in Article X of the CBA. to wit: (a) Whether or not under the CBA petitioner Matriano is entitled to reimbursement of her hospitalization expenses as a result of her caesarian operation. stating that pregnancy cannot be considered as sickness per se to entitle an employee to the hospitalization benefits under Article XI of the CBA. the Singapore Airlines Employees' Association. which provides ARTICLE X — Maternity Leave Benefits The COMPANY will grant maternity leave benefits of forty-five (45) days pursuant to PD 1202. exposure to any unjustifiable hazards except when endeavoring to save human life. petitioners are of the considered view that the liability of SIA regarding maternity leaves. is separate and distinct from: the hospitalization benefits provided under Article XI. Thereafter. the benefits for the same being specifically provided for under Article X of the CBA in question. traditionally understood to exclude maternity cases. finding no basis for the charge of unfair labor practice. if such was the intent. On appeal the NLRC sustained the Labor Arbiter's decision. petitioner Matriano underwent a caesarian operation for which expenses were incurred amounting to P6. (b) where hospitalization is necessary as a result of misconduct or negligence on the part of the employee. The Labor Arbiter dismissed the case. upon SIA's refusal to grant the complainant's claim. under Article X. 5 . except for the amount of benefit. medical. On the other hand. provoked assault. Hence. As expressly agreed Upon in Article XVIII of the CBA.393. and surgical fees. Hence. charged SIA before Labor Arbiter Sofronio Ona with unfair labor practice for violation of the CBA. In June 1981." (page 30 of the CBA They also contend that maternity cases. should receive the same interpretation as the latter. Two main issues are to be resolved. this petition. has been lifted from Paragraph 13 of the "Conditions for Employment for Locally Engaged Staff in the Philippines" which was adopted in toto. in behalf of individual complainant Matriano. the use of drugs other than those prescribed by the COMPANY's doctors or other duly qualified and registered medical practitioner or any breach of the peace or disorderly conduct. Respondent SIA refused. and (b) Whether or not respondents are guilty of unfair labor practice.70 representing hospital. "Each article in this agreement is separate and independent: from the others and not to be construed as having' to have restrictive effect upon the meaning of the other. xxx xxx xxx It is further contended that Article XI which.(a) illness or disablement arising from attempted suicide the performance o f any unlawful act. Matriano filed a claim with SIA for reimbursement of said expenses pursuant to Article XI of the CBA aforequoted. more specifically operations are not among those mentioned as exceptions to Article X or these would have been so provided.

Aquino. and yet the respondents would apply it to another form of leave." Undoubtedly. The disputed CBA provision states that the "Company will meet expenses up to P9. There is absolutely no connection between the expenditures for sickness. as amended. 54 Phil.. Not being so excepted. Tillanan 1 P: 2d 154. Had it been their purpose to exclude. Thus.000 per calendar year for ward expenses and surgical fees in respect of each employee . disability or incapacity. 726. it speaks of "illness or disablement". 102 S Co. et al. aggressive. If an employee is on leave for 100 days. or compassionate leave. Bord. Shimonek v. In very general terms. No. for one may be hospitalized not only for treatment of disease but also for injury. immoral. qualified workers in the private sector are given sickness benefits under the Social Security Act. 167. as well as medicare benefits under the Medicare provisions of the Labor Code. One benefit does not exclude the other. (Martin v. or vacation trips and the amount of sick leave. Dec. Article XI neither states nor implies that its provisions apply only to sickness.R. The very title of Article XI alone provides us with an answer to the first issue raised. 29 Phil. AC Pa 193F 2d p. To adopt respondent's strained interpretation would be to create an absurd situation whereby an employee may no longer avail of the benefits under Article XI when one is on vacation. Anything that is not included in an enumeration is 6 . Section 1. which are also separated granted in the same way that maternity leave benefits are provided as distinct privileges. negligent. The provisions of the CBA in question are clear and from them we gather the intent of the contracting parties. 92 Phil. lost income during the period of sickness while medicare benefits partially defray the cost of hospitalization and surgical care. From the language of the Article in question. 1025). v. In the same manner. Reasonable and practical interpretation must be placed on contractual provisions. childbirth. Interpretatio fienda est ut res magis valeat quam pereat. The above conclusion is bolstered by the fact that under the CBA in this case. G.1965). 21. wrongful. of course. Ventura. Sheppard. The disputed contingency of surgery and hospitalization does not come under the exceptions provided by Section 3 of Article XI which enumerates specific instances to wit: "illness and disablement" arising from illegal. it is well-established that titles given to sections of an act or contract are of ' ten resorted to for the purpose of determining the scope of the provisions and their relation to other portions of the act (Francisco. Borrowing a principle of statutory construction. that the thing may continue to have efficacy rather than fail. Florentino. 578. Such interpretation is to be adopted. hospital and medical care benefits due to pregnancy or childbirth are reimbursable under the general rule set by Article XI. even if only partially.. By analogy.We find no difficulty in disposing of the matter at hand. exceptions are specifically provided. Statutory Construction. Gomez v. or similar acts. Expression unius est exclusion alterius (In re Estate of Enriquez. sick. or vacation petition leave benefits. maternity leave. pp. Almeda v. 1036. no qualification as to cause of confinement or need of medical care is made. L23800. maternity leave. Sick leave. 2nd p. Second Edition. Article XI provides hospitalization and medical care benefits. if a company grants sick leave or full pay during the period when an employee is sick and at the same time grants hospital or medical expenses incurred as a result of the sickness. 186-187). Sickness benefits are intended to replace. the hospitalization expenses of petitioner for her caesarian operation are covered by the very wordings of the provision. then SIA should have expressly excluded the two as it did in the CBA with its employees in Singapore. there is no incongruity or conflict between the two types of privileges — one is sick leave while the other is medical benefits. he gets his salary for 100 days without having to work during those days. Such a construction would. The contention that pregnancy or childbirth is not sickness per se so as to be reimbursable under the CBA is untenable. there is no conflict between maternity leave benefits which are nothing else but full salaries for 45 days in this case and the hospitalization and surgical benefits for expenses incurred during the same period for hospitalization and surgery. None of these specify nor even remotely imply pregnancy or childbirth. and vacation leave benefits are intended to be replacements for regular income which otherwise would not be earned because an employee is not working during the period of said leaves. be absurd. In fact. Adamonski v. Managat et al. as it involves surgery.

the CBA is law between the parties (Kapisanan ng mga Manggagawa sa La Suerte FOITAF v. Having the force of law between the parties. Firstly. Noriel. it should likewise be interpreted as excluding maternity hospitalization and medical care benefits. 106 SCRA 444). Venturanza. Article XI provided for non-hospitalization medical care and dental benefits (Sections 4 and 5) which were not in the "Conditions of Employment". Insular Lumber Co. use of drugs and those arising from employees misconduct. we cannot restrict the application of Article XI by correlating it with another separate and independent Article on Maternity Leave. However. They agreed that one article of the CBA cannot have a restrictive effect upon the meaning of another article. relating to attempted suicide. xxx xxx xxx Finally. We do not agree. PAL. NLRC. from the "Conditions of Employment for Locally Engaged Staff in the Philippines". Secondly. NLRC. Respondents also advance the argument that since the CBA in question was lifted. Petitioner's reasons are well taken and we quote: We beg to disagree. Moreover. v. C. it is therefore. Batangas-Laguna Tayabas Bus Company v. to exclude hospitalization expenses for child delivery from the coverage of the said CBA provision would be a strained application that favors the employer. Phil.excluded therefrom.A. its implementation was solely within the prerogative of SIA and the employees could not do anything even if SIA did not funny implement it by refusing to extend hospitalization and medical care benefits to its employees who were hospitalized because of childbirth. Apparel Workers' Union v. An error in interpretation without malice or bad faith does not constitute unfair labor practice. Despite a finding of petitioner's entitlement to her claim for reimbursement. 80 SCRA 28. the employees thru their Union have as much right as the Company in its proper implementation. once the policy was incorporated in a collective bargaining agreement. We take 7 . included in its coverage. As a bilateral act and a result of long deliberation and dialogue between the parties.. 79 SCRA 709). The parties have provided for a separability clause under Article XVIII of the CBA. and a meaning that does not appear nor is intended or reflected in the very language of the statute cannot be placed therein. we are not prepared to pronounce respondent SIA guilty of unfair labor practice. Philippine Apparel Workers' Union v. since the said policy was unilaterally promulgated by SIA. SIA's refusal to grant benefits was not a willful evasion of its obligations under the CBA but was due to an honest mistake in the belief that the same is not covered by the aforementioned CBA provision. 77 SCRA 414. 70 SCRA 214. almost verbatim. 71 SCRA 470. 106 SCRA 444). obligations arising therefrom should be complied with in good faith (De Cortes v. The only exceptions where hospitalization benefits may not be availed of are those enumerated in Section 3 of the same Article XI. the Solicitor General. Court of Appeals. as counsel for the public respondent agrees that this petition is impressed with merit and states: Whether child birth is an illness or not is immaterial. Parenthetically. negates the labor protection clause in the Constitution and runs counter to the pronouncement of this Honorable Court that the construction of labor legislation and labor contracts should be in favor of safety and decent living of the laborer (PALEA v. Child birth not being one of the excepted causes. Article XI of the CBA does not make a distinction.

525 or Letter of Instruction No. The petition is granted insofar as petitioners' claim for reimbursement is concerned. medical and surgical expenses which the latter had incurred during her pregnancy and childbirth. and Cash conversion of unused company vacation and sick leave. Semana dated 13 [3] November 2000. Sec. The respondent Commission's finding that no unfair labor practice was committed is AFFIRMED. The facts of the case are as follows: For two to three years prior to 1999. Maternity leave pay. profit-sharing payments. SEVILLA TRADING WORKERS UNION–SUPER. SEMANA. Bereavement leave pay.70) representing hospital. 2(b) which stated that: ―Basic salary‖ shall include all remunerations or earnings paid by an employer to an employee for services rendered but may not include cost-of-living allowances granted pursuant to P. for short). These benefits included: (a) Overtime premium for regular overtime. a domestic corporation engaged in trading business. petitioner Sevilla Trading Company (Sevilla Trading. respondents.393. (b) (c) (d) (e) (f) Legal holiday pay. 174. effective December 22. premium pay for special holidays. SO ORDERED.: On appeal is the Decision of the Court of Appeals in CA-G. Union leave pay. Private respondent Singapore Airlines Limited is ordered to refund petitioner Cecilia Matriano the amount of SIX THOUSAND THREE HUNDRED NINETY THREE PESOS and SEVENTY CENTAVOS (P6. the decision of the respondent Commission is hereby MODIFIED. organized and existing under Philippine th laws. Night premium. TOMAS E. legal and special holidays. in its computation of the 13 -month pay of its employees. WHEREFORE.A. vs. petitioner. 63086 dated 27 November 2001 sustaining the Decision of Accredited Voluntary Arbitrator Tomas E.D. the amount of other benefits received by the [1] (g) (h) (i) Petitioner claimed that it entrusted the preparation of the payroll th to its office staff. No. and after audit was conducted.D. No.judicial notice of the fact that honest differences in construction may arise in the actual application of contractual provisions. employees which are beyond the basic pay. added to the base figure. as well as its subsequent Resolution dated 06 March 2002 denying petitioner’s Motion for Reconsideration.R. and all allowances and monetary benefits which are not considered or integrated as part 8 . When it changed its person in charge of the payroll in the process of computerizing its payroll. J.V. 851 (13 -Month Pay Law). It cited the th Rules and Regulations Implementing P. Company vacation and sick leave pay. SEVILLA TRADING COMPANY. DECISION PUNO. 1975. A. it allegedly discovered the error of including non-basic pay or other benefits in the base figure used in the th computation of the 13 -month pay of its employees. Paternity leave pay. [2] SP No. including the computation and payment of the 13 month pay and other benefits.

for short). as amended. through the Grievance Machinery in their Collective Bargaining Agreement. 1975. this Voluntary Arbitrator hereby declared that: 1. and Cash conversion of unused vacation/sick leave. Bereavement leave pay. contested the new computation and reduction of their thirteenth month pay.A. 100 of the Labor Code.of the regular or basic salary of the employee at the time of the promulgation of the Decree on December 16. 851. and pay for regular holidays in the computation th of the 13 -month pay to all covered and entitled employees. petitioner insisted that the computation of th the 13 -month pay is based on basic salary. Night premium. They claimed that paid leaves. 2. vacation leave. union leave. a duly organized and registered union.V.A. paternity leave.V. b) c) d) e) f) g) h) i) Legal holiday pay. Semana (A. On the other hand. The company is hereby ordered to pay corresponding backwages to all covered and entitled employees arising from the Hence. The daily piece-rate workers represented by private 9 .D. The parties failed to resolve the issue. for short) of the National Conciliation and Mediation Board. Paternity leave pay. it merely rectified the mistake its personnel committed in the previous years. premium pay for special holidays. for consideration and resolution. The company is hereby ordered to include sick leave and vacation leave. Company vacation and sick leave pay. the new computation reduced the employees’ thirteenth month pay. in adjusting its computation of the 13 -month pay. bereavement leave. Semana decided in favor of the Union. The dispositive portion of his Decision reads as follows: WHEREFORE. the parties submitted the issue of ―whether or not the exclusion of leaves and other related benefits in the th computation of 13 -month pay is valid‖ to respondent Accredited Voluntary Arbitrator Tomas E. A. Semana. bereavement leave and other leave with pay in the CBA. like sick leave. as per P. The Union alleged that petitioner violated the rule prohibiting the elimination or diminution of employees’ benefits as provided for in Art. It maintained th that. premises considered. No. Maternity leave pay. legal and special holidays. 2000. as amended. excluding benefits such as leaves with pay. premium for work done on rest days and special holidays. holiday pay and other leaves with pay in the CBA should be included in the base figure in the computation of their th 13 -month pay. as follows: 13 -month pay = net basic pay 12 months where: net basic pay = gross pay – (non-basic pay or other benefits) Now excluded from the base figure used in the computation of the thirteenth month pay are the following: a) Overtime premium for regular overtime. On March 24. union leave. Petitioner then effected a change in the computation of the thirteenth month pay. Union leave pay. th respondent Sevilla Trading Workers Union – SUPER (Union. paternity leave.

‖ and on February 19. Petitioner Sevilla Trading enumerates the grounds of its appeal. Semana on December 20. 2000. Bureau of Patents. Central Board of Assessment Appeals. In addition to its earlier allegations. A month later. Section 1 of Rule 43 states: RULE 43 Appeals from the Court of Tax Appeals and th Quasi-Judicial Agencies to the Court of Appeals SECTION 1. Petitioner Sevilla Trading failed to file an appeal within the fifteen-day reglementary period from its notice of the adverse decision of A. 6657. 2001. Clearly. and should have filed its appeal under Rule 43 of the 1997 Rules of Civil Procedure on or before January 4. Trademarks and Technology Transfer. Securities and Exchange Commission. It filed before the Court of Appeals.V. It must exclude those nonbasic benefits which. Rule 65 is an independent action that cannot be availed of as a substitute for the lost remedy of an ordinary appeal. Office of the President. 2000. Philippine Atomic Energy Commission. the reversal to the old computation can only be made to the extent of including non-basic benefits actually included by petitioner in the base figure in the computation th of their 13 -month pay in the prior years. Instead. Construction Industry Arbitration Commission. First. as follows: 1. COMPANIES HAVE NO MEANS TO CORRECT ERRORS IN COMPUTATION WHICH WILL CAUSE GRAVE AND IRREPARABLE [4] DAMAGE TO EMPLOYERS. National Telecommunications Commission. Agricultural Inventions Board. in the case at bar). Petitioner received a copy of the Decision of the Arbitrator on December 20. Board of Investments. Semana. and voluntary arbitrators authorized by law . Department of Agrarian Reform under Republic Act No. were not included in the original computation. on February 19. Energy Regulatory Board. 2001. [Emphasis supplied. this appeal. A special civil action under Rule 65 of the Rules of Court will not be a cure for failure to timely file a petition for review on certiorari under Rule 45 (Rule 43.exclusion of said benefits in the computation of 13 -month pay for the year 1999. it filed a petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure. in the case at bar) of the Rules of Court.V. Government Service Insurance System. in the first place. The appellate court denied due course to. as it was in this case. we uphold the Court of Appeals in ruling that the proper remedy from the adverse decision of the arbitrator is a petition for review under Rule 43 of the 1997 Rules of Civil Procedure.A. Insurance Commission.] It is elementary that the special civil action of certiorari under Rule 65 is not. 2001. including that under Rule 45 (Rule 43. final orders or resolutions of or authorized by any quasi-judicial agency in the exercise of its quasi-judicial functions. Among these agencies are the Civil Service Commission. petitioner Sevilla Trading had a remedy of appeal but failed to use it. Social Security Commission. petitioner claimed that assuming the old computation will be upheld. a ―Manifestation and Motion for Time to File Petition for Certiorari‖ on January 19. Hence. it filed its Petition for Certiorari under Rule 65 of the 1997 Rules of Civil Procedure for the nullification of the Decision of the Arbitrator. 2001 a ―Manifestation and Motion for Time to File Petition forCertiorari. not a petition forcertiorari under Rule 65. Scope. petitioner filed on January 19. 2001. It received a copy of the decision of A. judgments. THE DECISION OF THE RESPONDENT COURT TO TH REVERT TO THE OLD COMPUTATION OF THE 13 MONTH PAY ON THE BASIS THAT THE OLD COMPUTATION HAD RIPENED INTO PRACTICE IS WITHOUT LEGAL BASIS. where the latter remedy is available. Land Registration Authority. and cannot be a substitute for an appeal. Employees Compensation Commission. National Electrification Administration.A. — This Rule shall apply to appeals from judgments or final orders of the Court of Tax Appeals and from awards. and dismissed the petition. especially if such 10 . Civil Aeronautics Board. 2. IF SUCH BE THE CASE.

Petitioner Corporation. ―Grave abuse of discretion‖ has been interpreted to mean ―such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction. Inciong. Semana to be sound. 94 SCRA 270 [1979]) Moreover. More particularly.00 daily COLA by 22 days. This is merely basic cost accounting. we ruled that: Payment in full by Petitioner Corporation of the COLA before the execution of the CBA in 1982 and in compliance with Wage Orders Nos. valid. To be considered as such.V.A.V. . 1 (26 March 1981) to 5 (11 June 1984).loss or lapse was occasioned by one’s own neglect or error in the [5] choice of remedies. petitioner failed to adduce any other relevant evidence to support its contention. In that case. Semana had become final and executory when petitioner Sevilla Trading filed its petition for certiorari on February 19. before Wage Order No. increased the COLA of its monthly-paid employees by multiplying the P3. Semana. vs.A. On the contrary. Semana. and must be shown to have been consistent and deliberate . To answer the Union’s contention of company practice. pursuant to Wage Order No. nullify the decision of A. 11 . A. Hence. . Petitioner’s submission of financial statements every year requires the services of a certified public accountant to audit its finances. or much less. petitioner merely appended to its petition a copy of the 1997-2002 Collective Bargaining Agreement and an alleged ―corrected‖ computation of the thirteenth month pay. in other words where the power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility. It is quite impossible to suggest that they have discovered the alleged error in the payroll only in 1999. Petitioner Corporation cannot be faulted for erroneous application of the law .00 should be multiplied by 30 days. the Court of Appeals is correct in holding that it no longer had appellate jurisdiction to alter. there was lack of administrative guidelines for the implementation of the Wage Orders. Absent clear administrative guidelines.A. Thus. The Union disagreed with the computation. 6 (effective 30 October 1984). NLRC. It was only when the Rules Implementing Wage Order No.A. claiming that the daily COLA rate of P3. 4. Even assuming that the present petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure is a proper action. which petitioner Sevilla Trading invokes. or on January 5. 2001. which cannot now be unilaterally withdrawn by petitioner. Aside from its bare claim of mistake or error in the computation of the thirteenth month pay. and in accord with law and jurisprudence. Semana is correct in holding that petitioner’s stance of mistake or error in the computation of the thirteenth month pay is unmeritorious. Semana became final and executory upon the lapse of the fifteen-day reglementary period to appeal. we still find no grave abuse of discretion amounting to lack or excess of jurisdiction committed by A. which is the number of working days in the company. it should have been practiced over a long period of time. or. 2001. Respondent Company agreed to continue giving holiday pay knowing fully well that said employees are not covered by the law requiring payment of holiday pay. this Court decided on the proper computation of the cost-of-living allowance (COLA) for monthly-paid employees. which has been the practice of the company for several years. We upheld the contention of the petitioner corporation.V. the decision of A. and it must be so patent and gross as to amount to an evasion of positive duty or to a virtual refusal to perform the duty enjoined or to act at all [6] in contemplation of law. the decision of A. we find the decision of A.‖ (Oceanic Pharmacal Employees Union [FFW] vs.V. 4 were issued on 21 May 1984 that a formula for the conversion of the daily allowance to its monthly equivalent was laid down. The instant case needs to be distinguished from Globe Mackay [7] Cable and Radio Corp. There was no explanation whatsoever why its inclusion of non-basic benefits in the base figure in the computation of their th 13 -month pay in the prior years was made by mistake. . should not be construed as constitutive of voluntary employer practice.V. . This implies that in previous years it does not know its cost of labor and operations. The test of long practice has been enunciated thus: .A.‖ We find nothing of that sort in the case at bar. . . Also.A. despite the clarity of statute and jurisprudence at that time.V.

this may only be construed 12 . 174 and profit sharing payments indicate the intention to strip basic salary of other payments which are properly considered as ―fringe‖ benefits. the catch-all exclusionary phrase ―all allowances and monetary benefits which are not considered or integrated as part of the basic salary‖ shows also the intention to strip basic salary of any and all additions which may be in the form of allowances or ―fringe‖ benefits. among others in th the computation of the 13 -month pay. this cloud is dissipated in the later and more controlling Supplementary Rules and Regulations which categorically. Likewise. the following compensations are deemed not part of the basic salary: a) Cost-of-living allowances granted pursuant to Presidential Decree 525 and Letter of Instruction No. the Court of Appeals is correct when it pointed out that as early as 1981. Then the exclusionary provision would prove to be idle and with no purpose. A cursory perusal of the two sets of Rules indicates that what has hitherto been the subject of a broad inclusion is now a subject of broad exclusion. The all-embracing phrase ―earnings and other remunerations‖ which are deemed not part of the basic salary includes within its meaning payments for sick. In the case at bar. 1975. this Court has held in San Miguel [8] Corporation vs. b) Profit sharing payments. the grant by the employer of benefits through an erroneous application of the law due to absence of clear administrative guidelines is not considered a voluntary act which cannot be unilaterally discontinued. In the light of the clear ruling of this Court. pay for regular holidays and night differentials. While doubt may have been created by the prior Rules and Regulations Implementing Presidential Decree 851 which defines basic salary to include all remunerations or earnings paid by an employer to an employee. the Supplementary Rules and Regulations Implementing Presidential Decree 851 is even more empathic in declaring that earnings and other remunerations which are not part of the basic th salary shall not be included in the computation of the 13 -month pay. The Supplementary Rules and Regulations cure the seeming tendency of the former rules to include all remunerations and earnings within the definition of basic salary. it is hard to find any ―earnings and other remunerations‖ expressly excluded in the th computation of the 13 -month pay. premium for works performed on rest days and special holidays. Moreover. Any compensations or remunerations which are deemed not part of the basic pay is excluded as basis in the computation of the mandatory bonus. The exclusion of cost-of-living allowances under Presidential Decree 525 and Letter of Instruction No. Such is not the case now. such as maternity leave pay. Under the Rules and Regulations Implementing Presidential Decree 851. vacation. earnings and other remunerations are excluded as part of the basic salary and in the th computation of the 13 -month pay. c) All allowances and monetary benefits which are not considered or integrated as part of the regular basic salary of the employee at the time of the promulgation of the Decree on December 16. Inciong that: Under Presidential Decree 851 and its implementing rules. the basic salary of an employee is used as the basis in the determination of his th 13 -month pay. thus no reason for any mistake in the construction or application of the law. or maternity leaves. Under a later set of Supplementary Rules and Regulations Implementing Presidential Decree 851 issued by the then Labor Secretary Blas Ople. As such they are deemed not part of the basic salary and shall not be considered in the computation of the th 13 -month pay. overtime pay. exclude from the definition of basic salary earnings and other remunerations paid by employer to an employee. cash equivalent of unused vacation and sick leave.In the above quoted case. there is. 174. When petitioner Sevilla Trading still included over the years non-basic benefits of its employees. If they were not so excluded.

851 and its Implementing Rules. 851‖ which put to rest all doubts in the computation of the thirteenth month pay. sufficient in itself to negate any claim of mistake. In another case. In the case at bar. And any benefit and supplement being enjoyed by the employees cannot be reduced. without excluding the subject items therein until 1981. Leogardo. A company practice favorable to the employees had indeed been established and the payments made pursuant thereto. barely one month after the effectivity of P. petitioner computed and paid the thirteenth month pay.. 122 SCRA 267 (1983)] With regard to the length of time the company practice should have been exercised to constitute voluntary employer practice which cannot be unilaterally withdrawn by the employer. 100 of the Labor Code of the Philippines which prohibit the diminution or elimination by the employer of the employees’ existing benefits. and pay for regular holidays. Jr. The Decision of the Court of Appeals in CA-G. Abarquez. 10 of the Rules and Regulations Implementing P. 100. Associated Labor Unions. premium for work done on rest days and special holidays. Jr. 63086 dated 27 November 2001 and its Resolution dated 06 March 2002 are hereby AFFIRMED. While in Tiangco vs. [Tiangco vs.as a voluntary act on its part. The considerable length of time the questioned items had been included by petitioner indicates a unilateral and voluntary act on its part.D. we hold that jurisprudence has not laid down any rule requiring a specific minimum number of years. SP No. was issued by the Secretary of Labor as early as January 16. 13 . diminished. This. or other employee benefits being enjoyed at the time of promulgation of this Code. vacation and maternity leave. From 1975 to 1981. when petitioner purportedly ―discovered‖ its mistake. Leogardo. voluntarily and continuously included in the computation of its employees’ thirteenth month pay. for three (3) years and nine (9) months. IN VIEW WHEREOF.. petitioner had freely. 851. the company practice lasted for six (6) years. the petition is DENIED. Davao Integrated [11] Port Stevedoring Services vs. petitioner Sevilla Trading kept the practice of including non-basic benefits such as paid leaves for unused sick leave and vacation leave in the th computation of their 13 -month pay for at least two (2) years. In Davao Fruits Corporation [9] Unions. – Nothing in this Book shall be construed to eliminate or in any way diminish supplements. 1976. Putting the blame on the petitioner’s payroll personnel is inexcusable. approved the commutation to cash of the unenjoyed portion of the sick leave with pay benefits of [12] its intermittent workers.D. No. after promulgation of the aforequoted San Miguel decision on February 24. SO ORDERED. In all these cases. discontinued or eliminated by the employer. ripened into benefits enjoyed by them. and Art. No.D. 1981. Petitioner continued its practice in December 1981. this Court held that the grant of these benefits has ripened into company practice or policy which cannot be peremptorily withdrawn. by virtue of Sec. Prohibition against elimination or diminution of benefits.R. we rule likewise constitutes voluntary employer practice which cannot be unilaterally withdrawn by the employer without violating Art. And yet. we likewise held that: vs. 100 of the Labor Code: Art. Associated Labor The ―Supplementary Rules and Regulations Implementing P. the employer. In the above quoted case of Davao [10] Fruits Corporation vs. without the payments for sick. the employer carried on the practice of giving a fixed monthly emergency allowance from November 1976 to February 1980. No. or three (3) years and four (4) months.

the labor arbiter assigned to the case rendered a GANCAYCO. A hearing was conducted to allow the parties to further ventilate their views. They used to be the employees of the petitioner firm. Armando Torno. such employees are not entitled to receive a 13th month pay. and the refund of the cash bond they filed with the company at the start of their employment. It is alleged in the Complaint and Position Paper accompanying the same 2 that they were dismissed from the firm for pursuing union activities. it was known as the J. At first. No.G. a sole proprietorship owned by the herein petitioner Jacinto Ledesma.petitioners. he is the president and general manager of the corporation as well as the owner of the controlling interest thereof. NATIONAL LABOR RELATIONS COMMISSION.000. 851. They maintained that the private respondents abandoned their work without informing the company about their reasons for doing so and that. the private respondents filed a Complaint with the arbitration branch of the respondent National Labor Relations Commission (NLRC) against the petitioners for. They were originally joined by another employee. and separation pay in the event that they are not reinstated. working therein as welders.00 and that under Section 1 of Presidential Decree No. Before the firm became a corporate entity. 1985. Later on. J. ARMANDO TORNO. The petitioners also argued that the private respondents are not entitled to a 13th month pay. the private respondents are not entitled to service incentive leave pay and separation pay.: The principal issue in this Petition is whether or not the private respondents are entitled as a matter of right to a 13th month pay. 81477 April 19. 1985. Ledesma Enterprises. and JOEL TORNO. The petitioners likewise alleged that the company is in bad financial shape and that pursuant to Section 3 of the Decree. vs. On June 26. upholsterers and painters. The herein petitioner Dentech Manufacturing Corporation is a domestic corporation organized under Philippine laws. 14 . and Joel Torno are members of the Confederation of Citizens Labor Union. CCLU. who later withdrew his Complaint. they only sought the payment of their 13th month pay under Presidential Decree No. BENJAMIN MARBELLA. JR. 851. They were already employed with the company when it was still a sole proprietorship. respondents. At present. The firm is engaged in the manufacture and sale of dental equipment and supplies. 851 as well as their separation pay.L. they sought their reinstatement as well as the payment of their 13th month pay and service incentive leave pay.R. On the other hand. Thereafter. accordingly. a labor organization registered with the Department of Labor and Employment. They were dismissed from the firm beginning February 14. Juanito Tajan. the petitioners alleged in their Position Paper that the private respondents were not dismissed from the firm on account of their union activities. Jr. the firm is 3 exempted from complying with the provisions of the Decree. 1989 DENTECH MANUFACTURING CORPORATION and JACINTO LEDESMA in his capacity as General Manager. They maintained that each of the private respondents receive a total monthly compensation of more that Pl. illegal 1 dismissal and violation of Presidential Decree No. JUANITO TAJAN. The herein private respondents Benjamin Marbella. among others. one Raymundo Labarda.

The petitioners went on to reiterate that the firm is in bad financial shape and is. In short..00 4.3. On the other hand. the Third Division of the NLRC affirmed the Decision of the labor arbiter. The petitioners maintained that no provision of law was cited in the Decision of the labor arbiter to support the view therein that the 13th month pay ceiling of P1.. The pertinent portions thereof are as followsThe award of 13th month pay to the complainants is assailed by the respondents for the reason that no provision of law was cited in the decision supporting the statement that the ceiling of 13th month pay (sic) has been removed.878.. 28 issued by President Corazon C.00 a month in the matter of 13th month pay has been removed and complainants are entitled to receive from respondents at least the unprescribed 13th month pay for the last three years based on their uncontroverted pleadings. 1987.Decision dated January 28.. For the record. Joel Torno . .270. xxx xxx xxx Premises considered.000. . judgment is hereby rendered ordering respondents to reinstate complainants to their former positions. while complainants supposedly wanted to report for work and respondents.. we cannot imagine why the parties never achieved (an) understanding on this aspect.00 2. 851. the pertinent portions of which are as followsNoticeable in this case is that complainants initially made manifest their lack of intent to seek reinstatement and their preference to collect their separation pay.3. In a Resolution dated November 4.000. In line with the above manifestation of the parties.00 P1 1. Juanito Tajan Jr. therefore.921. Aquino modified Presidential Decree No.P3. Memorandum Order No..828.00 xxx xxx xxx All other claims are hereby dismissed. willing to accept them back to work. We also find respondent's contention for exemption in the payment of (the) 13th month pay as without validity (sic).1987. supposedly . . respondent has indicated with sufficient clarity even at the inception of the case that it is charging complainant with abandonment and is willing to accept them back to work.00 3. Benjamin Marbella . we hereby order the reinstatement of complainants.. 851 to the extent that all employers are . The ceiling of P1. without backwages and to pay them the following amounts 1. Armando Torno . Towards the end of (the) proceedings this was changed to preference for reinstatement . (now) required to pay all their rank- 15 . This order includes the money value of the service incentive leave pay of complainants and the cash bond .00 had been duly eliminated. exempted from complying with the provisions of Presidential Decree No. 4 Both parties filed their respective appeals with the NLRC. The petitioners added that the refund of the cash bond filed by the private respondents should not have been ordered by the labor arbiter inasmuch as the proceeds of the same 5 had already been given by the company to a certain carinderia to 6 pay for the outstanding accounts of the private respondents therein..897.

the respondents filed their respective comments on the Petition. this Court resolved to treat the instant Petition as a special civil action for certiorari under Rule 65 of the Rules of Court on account of a number of jurisdictional issues raised by the petitioners. and to consider the case submitted for decision. the same 10 cannot be given a retroactive effect.00 a month and that. 1978. promulgated on May 1. 1988. 28 cited by the NLRC cannot apply to the case at bar. the Solicitor General points out that each of the private respondents is actually paid less than Pl. accordingly. It is likewise the position of the petitioners that the refund of the cash bond filed by the private respondents is improper inasmuch as the proceeds of the same had already been given to a certain carinderia to pay for the outstanding 11 accounts of the private respondents therein. the petitioners elevated the case to this Court by way of the instant Petition. 851 was signed into law in 1975 by then President Ferdinand Marcos. In support of this claim. As to the refund of the cash bond filed by the private respondents. 851. The private respondents. 851 has been eliminated by Presidential 12 Decree No.000. all employers are required to pay all their employees receiving a basic salary of not more than Pl. they call attention to the alleged testimony of the general manager of the petitioner 8 firm. In seeking the dismissal of the Petition. the Solicitor General submits that such cash bond required from the private respondents is disallowed under Article 114 of the Labor 13 Code. The Petition is devoid of merit.000. On January 29. As instructed by the Court. however. The petitioners likewise maintain that the company is a financially distressed firm exempted from complying with the 9 provisions of Presidential Decree No. 851." This error notwithstanding. thus in effect removing from exclusion from entitlement to the (sic) 13th month pay those employees who were receiving a basic salary of more than P1. They point out that the said Memorandum Order was signed into law only in 1986. The Solicitor General likewise maintains that the Pl. Presidential Decree No. Under the original provisions of Section 1 thereof. they are entitled to a 13th month pay pursuant to Presidential Decree No.00 a month. a distressed employer shall qualify for exemption from the requirements of the Decree only upon prior authorization from the Secretary of Labor and Employment. as amended. The main pleading is erroneously captioned "Petition For Review On Certiorari. The cash bond required of complainants is likewise in direct contravention to (sic) the provisions of Article 114 of the Labor Code. The petitioners reiterate their contention that the private respondents abandoned their work. The Solicitor General manifests that no such prior authorization had been obtained by the petitioner firm. 7 the refund of the cash bond appears to be in order.00 a month. the Court resolved to give due course to the Petition.and-file employees 13th month pay. The petitioners also contend that Memorandum Order No. 1364. regardless of the nature of their employment. a 13th month pay not 16 . decided not to challenge the Resolution of the NLRC. accordingly. The Solicitor General also argues that under the rules and regulations implementing the said Decree.000.000. long after the case was instituted with the NLRC and. After the parties submitted other supplementary pleadings. At any rate the simple assertion of the respondent that it is in financial distress and thus exempt (sic) from payment of 13th month pay (sic) to the complainants is not in itself sufficient to evade payment of the 13th month pay to which complainants were entitled prior to the commencement of the respondent's financial problems. and in the interest of justice. Thus.00 ceiling recited in Presidential Decree No.

. arguendo.later than December 24 of every year.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. Deposits for loss or damage. 1986. not total monthly compensation. The said issuance eliminated the Pl. President Corazon C. i. occupations or business where the practice of making deductions or requiring deposits is a recognized one.00 a month. From the foregoing.00. 28 which modified Section 1 of Presidential Decree No. A simple computation of the basic daily wage multiplied by the number of working days in a month results in an amount of less than Pl. 1364 was signed into 14 law. On May 1. The petitioners have not satisfactorily disputed the applicability of this provision of the Labor Code to the case at bar.000. those currently incurring substantial losses. 851 which mandated the payment of 13th month compensation to employees receiving less than P1. As correctly observed by the Solicitor General.00 salary ceiling provided in Presidential Decree No. Aquino issued Memorandum Order No. 114. except when the employer is engaged in such trades. no evidence or receipt has been shown to prove such payment. are not covered by the Decree. or is necessary or desirable as determined by the Secretary of Labor in appropriate rules and regulations. inter alia. Under Section 3 of the rules and regulations implementing said Presidential Decree financially distressed employers. 1978. however. On August 13.00.00 only. Presidential Decree No. that the private respondents are each paid a monthly salary of over Pl.000.. Even assuming. the company is still not in a position to claim exemption. Presidential Decree No. Article 114 of the Labor Code prohibits an employer from requiting his employees to file a cash bond or to make deposits. that such distressed employers must obtain the prior authorization of the Secretary of Labor and Employment before they may qualify for such exemption. The refund of the cash bond filed by the private respondents is in order. materials. to witArt. 851. Section 7 thereof requires.00 salary ceiling. no such prior authorization had been obtained by the petitioner firm. subject to certain exceptions. 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 and Employment.000. The rules and regulations implementing Presidential Decree No.. the refund thereof is in order. The petitioners admit that the private respondents work only five days a week and that they each receive a basic daily wage of P40. 851 pertains to basic salary. e. there is no basis for the contention that the company is exempted from the provision of Presidential Decree No.000. it clearly appears that the petitioners have no basis to claim that the company is exempted from complying with the pertinent provisions of the law relating to the payment of 13th month compensation.000. Considering further that the petitioners failed to show that the company is authorized by law to require the private respondents to file the cash bond in question. The Decree enjoined the Department of Labor and Employment to stop accepting applications for exemption under. 17 . Thus. or equipment supplied by the employer. The allegation of the petitioners to the effect that the proceeds of the cash bond had already been given to a certain carinderia to pay for the accounts of the private respondents therein does not merit serious consideration. As correctly pointed out by the Solicitor General. 851. The Pl.

Orlando C. On December 20. but was awarded disability benefits for only nine (9) months "due to pulmonary tuberculosis. citing two decided Employees' Compensation cases (ECC Case No. GRIÑO-AQUINO. 18. respondent. denying his request for reconsideration on the ground that his ailment was not work-connected." affirming the decision of the System which denied petitioner's claim compensation benefits. in holding that the ailment of Parkinson's Disease has no causal relation with the nature working conditions of the petitioner as field collection officer. respectively. 1580 in favor of one Rufino Chungalao). 1988. the Employees' Compensation Commission rendered a decision upholding the adverse decision of GSIS. Rollo) having basis in fact or in law. April 6. petitioner. "Rodolfo Yosores vs. the ailment (Parkinson's Disease) has no causal relation with the nature and working conditions of appellant as Field Collection Officer. Government Service Insurance System. Rodolfo Yosores was employed by the GSIS for a period of twentyfive (25) years." (p.: This petition seeks the review of the decision dated December 20. and 2. On July 31. had already developed fine tremors of the extremities way back as 1960.) Hence. and thereby entitling each of them to benefits pursuant to Presidential Decree No. this recourse with the petitioner alleging that the respondent Commission erred: 1. compensable." He asked for a reconsideration of the action taken on his claim. he filed a claim for compensation benefits. 1990. The cause of his disability. 1992 RODOLFO YOSORES. in stating that the appellant "was already suffering from Parkinson's Disease as early as 1960 [before his employment] and . On August 9. 1990 of the Employees' Compensation Commission in ECC Case No. Yosores retired from the GSIS for total and permanent disability. praying for compensation based on his actual ailment as diagnosed by the company physicians. (pp. 1990. considering that the records are bereft of any evidence that would indicate that the risk of contracting hid ailment was increased by his working conditions. 1988. we are constrained to rule against the compensability of the claim. 4827 entitled. Rollo. A re-evaluation was made by the GSIS Medical Evaluation and Underwriting Group. vs. Therefore. 1963. commencing on May 3. . Misa (Vice-President & Medical Director). 626. No. 4827). was Parkinson's Disease.R. 97346 March 23. 35-36. EMPLOYEE'S COMPENSATION COMMISSION. as indicated in his claim papers and approved by Cesar Alina (Senior Vice-President & Chairman of the Social Insurance Group) and by Dr. where the Commission settled their respective claims by declaring their disabilities. caused by Parkinson's Disease. .G. J. Not satisfied with the GSIS' decision he appealed to the Employees' Compensation cases (ECC Case No. The Commission ruled that: As the foregoing medical findings suggest. doing the rounds of GSIS mortagees in different areas of Metro Manila in the performance of his collection work. He was doing electrical work during the first ten (10) years until his assignment in 1973 as Field Collection Officer. which rendered a Report on 18 .

etc. hold that petitioner's debilitating ailment which caused his total and permanent disability is compensable under the employees' compensation program in P. Although there is no known treatment that will halt or reverse the neuronal degeneration that presumably underlies this disease. .Rollo. and anxiety neurosis (p.The petition is meritorious. The petitioner's attending physician also attested to the fact that in 1967 (four years after entering the government service) he constracted essential hypertension with tremors. occurring in most cases between the ages of 50 and 60. Yosores. emotional upset. . the senses and intellect being uninjured. 626. from eight o'clock in the morning to four o'clock in the afternoon (when he would return to the office to prepare his daily collection report) for five days a week and for fifteen long years. said official's development of Hypertensive Cardiovascular Disease. with lessened muscular power in parts of the body which are not in action and even when supported. poverty and slowness of voluntary movement. 874-875. therefore. Jr. Rollo). 42. The following observation of the ECC in the case of Chungalao is relevant: . which may have constituted "predisposing or exciting factors" in the development of the disease. insomnia. 1980) and Rufino Chungalao (ECC Resolution No. have been suggested as predisposing or exciting factors. is a core syndrome of the late middle life.D. rigidity and festinating gait. No. by Steven Schroeder. for now. who spent the prime years of his life as a GSIS employee. scientifically known as paralysis agitans. 19 . and was subjected to the elements of nature and to all kinds of risks. merely possible to replace for a time some of the transmitter deficiency. was directly causally job-connected and that the same risk exacerbated by employment conditions. resulting from an excessive loss of melanin pigment and degeneration of neurones in the substantia nigra. 199 Ed. 29. Marcus Krupp & Lawrence Tierney. This conclusion finds affirmation in the ECC's decisions in the cases of Francisco Samuray (ECC Resolution No. He commuted in all kinds of public transport. 1580 dated August 21. (p. pp. pp. It is.) We cannot see how Chungalao's case can be any different from the case at bar. 626. 1988). which triggerd his ailment of Basal Ganglia (Parkinson's Disease) as the evidence on record had borne out substantially. Parkinson's Disease or Parkinsonism. 3041 dated October 5. Current Medical Diagnosis & Treatment.. Trauma. We.. the appealed decision of the respondent Employees' Compensation Commission is hereby REVERSED and the claim of the petitioner. coupled with the hypertension which he contracted in the course of his employment. for total and permanent disability benefits is approved. overwork exposure to cold. stooped posture. ethnic groups. As field collection officer during the years 1973 to 1988. 339342. The Court is unable to accept the sweeping statement in the ECC decision that the disease has no causal relation with the nature and working conditions of Yosores' job. thus making the symptoms more tolerable for a number of years. Further research on the diagnosis of the cause of parkinsonism mentions the existence of arteriosclerotic parkinsonism (Principles of Neurology by Raymonds Adams & Maurice Victor. for it is not improbable that there were factors affecting his work as a field collection officer. 594-597). is entitled to the same beneficial consideration from the Government. socio-economic classes and in both sexes. Let the records of this case be remanded to the Government Service Insurance System for computation and payment of the benefits due the petitioner under P. as amended. Rodolfo Yosores. the petitioner performed collection work around Metro Manila. observed in all countries. WHEREFORE. an expressionless face. methods are available which can afford considerable relief from its symptoms. pp. characterized by involuntary tremulous motion.D. Researches have proven that the rate of parkinsonian tremor is increase by emotional excitement and disappears during sleep. Brains Clinical Neurology by Sir Roger Bannister.

No. Petitio ners. AZUL.: Jose A. DECISION 5. Present: JOSE A. x-------------------------------------------------x LEONARDO-DE CASTRO.. C. Promulgated: May 2010 PUNO. alleging the unavailability of construction projects. Respondent.R. 187200 and ARNOLD U. JJ. Talde (respondent) was hired in 1990 as a carpenter by petitioner Golden Ace Builders of which its co-petitioner Arnold Azul (Azul) is the owner-manager. J. CARPIO MORALES. . Chairper son. In February 1999.versus CARPIO MORALES. Azul. TALDE.J. and VILLARAMA.. stopped giving work 20 .GOLDEN ACE BUILDERS G. JR. BERSAMIN.

37 representing premium pay for rest days. hence.236. It held that since respondent did not appeal the Decision of the Labor Arbiter granting him only reinstatement and backwages. favor of respondent and ordered his immediate reinstatement without loss of seniority rights and other privileges. 2002. and the amount of P3. which at that time was computed at P144. 2006. he may not be afforded affirmative of April 22. advised respondent to report for work in the construction site within 10 days from receipt thereof. however. Petitioners’ motion for reconsideration was denied by Resolution [5] for illegal dismissal. [9] to the Labor Arbiter that actual animosities existed between him and petitioners and there had been threats to his life and his family’s safety. Meanwhile. th As an agreement could not be forged by the parties on the satisfaction of the judgment.804. 2002. service incentive leave pay and 13 month pay. 2005 was Pending their appeal to the National Labor Relations Commission (NLRC) and in compliance with the Labor Arbiter’s Decision.69 the amount due respondent. the date when he manifested his refusal to be reinstated. Respondent submitted. of August 6. 2004 which attained finality on September of January 10. 2001 a manifestation [3] thereupon issued. hence. petitioners. Petitioners denied the existence of any such animosity.23. and with payment of full backwages. prompting the latter to file a ground for the termination of his services. the matter was referred to the Fiscal Examiner of the NLRC who recomputed at P562. which was approved by the Labor Arbiter by Order [7] [8] of July 5. on May 16. the NLRC granted petitioners’ motion and accordingly vacated the computation. A writ of execution dated July 8. 2001. 2005. 2001. not separation pay in lieu thereof. Petitioners’ appeal to the Court of Appeals was dismissed by Decision By Decision [2] [6] of August 12. holding that respondent was a regular employee and not a project employee. and that there was no valid 21 .382.assignments complaint [1] to respondent. he opted for the payment of separation pay. through counsel. contending that since respondent refused to report back to work. the recomputation of the wages and benefits due him should not be beyond May 15. the Labor Arbiter ruled in 15. 2004. the NLRC dismissed petitioners’ appeal by Resolution [4] By Resolution of March 9. Finding the amount exorbitant. he should be considered to have abandoned the same. petitioners filed a motion for reconsideration with the NLRC.

SO ORDERED. Respondent’s motion for reconsideration was denied by the NLRC by Resolution [10] of June 30. Furthermore.564. 2009. They assailed too as contrary to prevailing jurisprudence the computation of backwages from the time of dismissal up to actual reinstatement. the appellate court modified an already final and executory decision. hence. They contend that. Thus. Petitioners assail the appellate court’s award of separation pay. the day he was supposed to return to the job site. 2001. even if separation pay was not granted by the Labor Arbiter. The appellate court disposed: WHEREFORE. he rights and interests. 2006 of the NLRC are hereby SET ASIDE. when the decision of this Court as to the monetary award becomes final and executory.720/month x years = 45. and since he refused to go back to work. 2008. in effect.00 P5.760. 2006 and March 9. (emphasis in the original) filed a petition for certiorari with the Court of Appeals. 2006.relief. he may recover backwages only up to May 20. hence.69 Separation Pay: P220.804. in view of all the foregoing premises. [11] By Decision of September 10. Separation pay is granted 8 where reinstatement is no longer advisable because of strained relations between the employee and the employer. Petitioners’ motion for reconsideration was denied by Resolution [12] of March 12. judgment is hereby rendered by us GRANTING the petition filed in this case.720. The assailed RESOLUTIONS dated 30. this interim period being deemed to be by then an equivalent to a forbearance of credit. holding that respondent is entitled to both backwages and separation pay.00 x 26 days = P5. the present petition for review on certiorari. The basis for the payment of backwages is different from that for the award of separation pay.69 We also award an additional 10% of the total monetary award by way of attorney’s fees for the expenses incurred by the petitioner to protect his Full 30. The petition fails. the appellate court set aside the NLRC Resolutions. the full backwages and separation pay to be awarded to the petitioner shall be computed as follows: Backwages as of June = P562.00 2005 P608. The basis for computing backwages is usually the length of the employee’s service while that 22 . the latter in view of the strained relations between the parties. Backwages represent compensation that should have been earned but were not collected because of the unjust dismissal. the rate of legal interest shall be imposed at 12% per annum from such finality until its satisfaction.

for under Article 279 of the Labor Code and as held in a catena of cases. and payment of backwages computed from the time compensation was withheld up to the date of actual reinstatement. Separation pay in lieu of reinstatement may likewise be awarded if the employee decides not to be reinstated. italics supplied) 23 . (emphasis. The normal consequences of respondents’ illegal dismissal. italics and underscoring supplied) Velasco v. or separation pay if reinstatement is no longer viable. Where reinstatement is no longer viable as an option. The two reliefs provided are separate and distinct. In effect. In instances where reinstatement is no longer feasible because of strained relations between the employee and the employer. an employee who is dismissed without just cause and without due process is entitled to backwages and reinstatement or payment of separation pay in lieu thereof: Thus. National Labor Relations Commission emphasizes: The accepted doctrine is that separation pay may avail in lieu of reinstatement if reinstatement is no longer practical or in the best interest of the parties. The payment of separation pay is in addition to payment of backwages. Southern Industrial Gases Philippines [14] instructs: [T]he award of separation pay is inconsistent with a finding that there was no illegal dismissal. (emphasis in the original. and backwages. if viable. Macasero v. are reinstatement without loss of seniority rights. then. an illegally dismissed employee is entitled to either reinstatement. [13] As to how both awards should be computed. separation pay is granted. separation pay equivalent to one (1) month salary for every year of service should be awarded as an alternative. an illegally dismissed employee is entitled to two reliefs: backwages and reinstatement.for separation pay is the actual period when the employee was unlawfully prevented from working.

[15] Strained relations must be demonstrated as a fact. 961082 of are AFFIRMED with separation pay due theMODIFICATION that the amount respondent is. is binding upon the Court. the backwages due respondent must be computed from the time he was unjustly dismissed until his actual reinstatement. such payment liberates the employee from what could be a highly oppressive work environment. when he was unjustly dismissed. the payment of separation pay is considered an acceptable alternative to Clearly then. Such finding. the day he is reinstatement when the latter option is no longer desirable or viable. Petitioner was hired in 1990. however. does not find the appellate court’s computation of separation pay in order. 24 . but until June 30. The appellate court considered respondent to have served petitioner company for only eight years. the Labor Arbiter found that actual animosity existed between petitioner Azul and respondent as a result of the filing of the illegal dismissal case.R. computed at P85. especially when affirmed by the appellate court as in the case at bar. to be adequately supported by evidence [16] — substantial evidence to show that the relationship between the employer and the employee is indeed strained as a necessary consequence of the judicial controversy. consistent with the prevailing rules that this Court will not try facts anew and that findings of facts of quasijudicial bodies are accorded great respect. or from February 1999 until June 30. deemed to have been actually separated (his reinstatement having been rendered impossible) from petitioner company or for a total of 15 years. G. 2005. respondent is entitled to backwages and separation pay as his reinstatement has been rendered impossible due to strained relations. WHEREFORE. however.800. 2005 when his reinstatement was rendered impossible without fault on his part.Under the doctrine of strained relations.00. 2009 in C. however. The Court. On one hand. As correctly held by the appellate court. even finality. 2008 and its Resolution dated March 12.A. [17] In the present case. and he must be considered to have been in the service not only until 1999. it releases the employer from the grossly unpalatable obligation of maintaining in its employ a worker it could no longer trust. the Court of Appeals Decision dated September 10. On the other hand. in light of the discussion in the immediately foregoing paragraph. SP No.

92174 and 102552. Petitioner submits that the decision in the Duplicators case should now be considered as having been abandoned or reversed by the Boie-Takeda decision. on 10 December 1993 in the two (2) consolidated cases of Boie-Takeda Chemicals. (Duplicators) in G. considering that the latter went "directly opposite and contrary to" the conclusion reached in the former. 110068.respondents. before the Boie-Takeda decision became final on 5 January 1994. 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. which affirmed the order of Labor Arbiter Felipe T. Inc. rendered a decision dismissing the Petition forCertiorari filed by petitioner Philippine Duplicators. In view of the nature of the issues raised. respectively. Also. the petitioner's (first) Motion for Reconsideration of the decision dated 10 November 1993 had already been denied. 110068 February 15. respectively. Hon.R. i. the Third Division of this Court referred the petitioner's Second Motion for Reconsideration. (through its Third Division). The Third Division also denied with finality on 15 December 1993 the Motion for Reconsideration filed (on 12 December 1993) by petitioner..: On 11 November 1993.R. Preliminarily. this Court. No. NATIONAL LABOR RELATIONS COMMISSION and PHILIPPINE DUPLICATORS EMPLOYEES UNION-TUPAS. after preliminary deliberation. Dionisio de la Serna and Philippine Fuji Xerox Corp. Deliberating upon the arguments contained in petitioner's Second Motion for Reconsideration. No. petitioner Duplicators filed (a) a Motion for Leave to Admit Second Motion for Reconsideration and (b) a Second Motion for Reconsideration. as well as its Motion for Leave to Admit the Second Motion for Reconsideration.e. Inc. petitioner invoked the decision handed down by this Court. accepted G. to the Court en banc en consulta. Nos. vs. This time. through its Second Division. and inorder to settle the condition of the relevant case law. on 15 December 1993. The Boie-Takeda decision was promulgated a month after this Court. 1995 PHILIPPINE DUPLICATORS. in Duplicators and Boie-Takeda. Hon. The decision rendered in Boie-Takeda cannot serve as a precedent under the doctrine of stare decisis. and after review of the doctrines embodied. No. the Second Division inter 1 alia declared null and void the second paragraph of Section 5 (a) of the Revised Guidelines issued by then Secretary of Labor Drilon. we consider that these Motions must fail. petitioner. by then Labor 25 . 1987. we note that petitioner Duplicators did not put in issue the validity of the Revised Guidelines on the Implementary on of the 13th Month Pay Law.Trajano. The Court upheld the decision of public respondent National Labor Relations Commission (NLRC). had rendered the decision in the instant case.SO ORDERED. INC. G. RESOLUTION FELICIANO. issued on November 16.R. with finality. vs. Cresenciano B. through its Third Division. J. In its decision.R. and its Motion for Leave to Admit the Second Motion for Reconsideration.. Garduque II directing petitioner to pay 13th month pay to private respondent employees computed on the basis of their fixed wages plus sales commissions. On 17 January 1994. 110068 as a banc case. vs. in G. The Court en banc.

00 74.04 15.200. cannot be allowed. In other words.266. To the contrary. More importantly.17 1. Melecio. This.00 51.536.00 15. No doubt this particular galary structure was intended for the benefit of the petitioner corporation. Tomas Bunagan.287. The portion of the salary structure representing commissions simply comprised an automatic increment to the monetary value initially assigned to each unit of work rendered by a salesman. 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. at this late stage of the proceedings. The two (2) cases present quite different factual situations (although the same word "commissions" was used or invoked) the legal characterizations of which must accordingly differ.00 26 .75 1. the doctrines enunciated in these two (2) cases in fact co-exist one with the other.Secretary Franklin M. Jr. Drilon. Rogelio Dasig. 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.678. however. Any attempted change in petitioner's theory.00 54. constitute part of the compensation or remuneration paid to salesmen for serving as salesmen.00 14.15 1.00 16.200. The Third Division in Durplicators found that: In the instant case.00 P16. 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.192.00 64. either in its Petition for Certiorari or in its (First) Motion for Reconsideration.350.266.780.625. Jorge Canilan.854.378. petitioner's counsel relied upon these Guidelines and asserted their validity in opposing the decision rendered by public respondent NLRC. 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.16 1. and hence as part of the "wage" or salary of petitioner's salesmen.00 14.856.00 16. Indeed.00 1.182. 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. 90.00 89.184. we do not agree with petitioner that the decision in Boie-Takeda is "directly opposite or contrary to" the decision in the present (Philippine Duplicators).30 Benedicto Bautista Salvador Brito.238.75 1.350. P76. In fact.610. Jeordan Centeno. 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.85 P1.382. it appears that petitioner pays its salesmen a small fixed or guaranteed wage. We note the following facts on record: Salesmen's Total Earnings and 13th Month Pay 2 For the Year 1986 Name of Total Amount Paid Montly Fixed 3 Salesman Earnings as 13th Month Pay Wages x 12 Baylon.192.

266.00 42. the Third Division held.00 15.208.192.20 403.10 Constancio Carrasco.888.89 1.00 52.266.00 30.75 323.00 16. such bonuses closely resemble profitsharing payments and have no clear director necessary relation to the amount of work actually done by each individual employee.00 25.00 50.75* 27 .950.00 32.00 15.50 1.192.71 1. were properly included in the term "basic salary" for purposes of computing their 13th month pay.35 323.350.275. Wilfredo Garcia. Teresa Ochosa.75 1.238. Delfin Navarro. Danilo Baltazar. 41.00 Considering the above circumstances.00 146.75 1.618.208.00* 93.528.266. More generally.192. the salesmen's commissions.. Leynard Talampas. Ma." were excluded from the term "basic salary" because these were paid to the medical representatives and rank-and-file employees as "productivity 4 bonuses. correctly.406.681. Rolano Quisumbing.872.00 15.201.39 1.209. Carlito 24.00 Ricardo del Mundo.00 16.200. nor profit-sharing payments nor any other fringe benefit. Teofilo Rubina.551. Cicero 1. Reynaldo Poblador.00 15.510.406.00 101. rather than as a demandable or enforceable obligation.406. comprising a pre-determined percent of the selling price of the goods sold by each salesman.516. These commissions are not overtime payments.864.00 14.00 16.65 1.00 16. Alberto Cruz. We note that productivity bonuses are generally tied to the productivity.00 15.00 15.230. its payment constitutes an act of enlightened generosity and self-interest on the part of the employer.00* 98. Celso Sopelario.27 1.643.00 14. Pedro 108. that the sales commissions were an integral part of the basic salary structure of Philippine Duplicators' employees salesmen.00 17. In Boie-Takeda the so-called commissions "paid to or received by medical representatives of Boie-Takeda Chemicals or by the rank and file employees of Philippine Fuji Xerox Co.25 1.622.753. Thus. a bonus is an amount granted and paid ex gratia to the employee.00 Villarin.322.00* 66.434.872. Ludivico Tan.065.45 323.35 1. In Philippine Education 64.73 1. of a corporation.434. Emma Salazar.127.294.238.00 17.872.856.856. or capacity for revenue production.00 Punzalan.De los Santos 73.65 1.351." The Second Division characterized these payments as additional monetary benefits not properly included in the term "basic salary" in computing their 13th month pay.

"It is something given in addition to what is ordinarily received by or strictly due the recipient. . . Medical representatives are not salesmen. 8 . orally and with the aid of printed brochures. Inc. 6 . . (PECO) v. . 4567). such as success of business or greater production or output." The granting of a bonus is basically a management prerogative which cannot be forced upon the employer "who may not be obliged to assume the onerous burden of granting bonuses or other benefits aside from the employee's basic salaries or wages . If it is an additional compensation which the employer promised and agreed to give without any conditions imposed for its payment. They commonly leave medical samples with each physician visited. 177 SCRA 160 [1989]). Atok-Big Wedge Mutual 7 Benefit Association. (Emphasis supplied) If an employer cannot be compelled to pay a productivity bonus to his employees. in the Philippines and elsewhere. Thus. but those samples are not "sold" to the physician and the physician is. (Emphasis supplied) 5 More recently. It is also important to note that the purported "commissions" paid by the Boie-Takeda Company to its medical representatives could not have been "sales commissions" in the same sense that Philippine Duplicators paid its salesmen Sales commissions. . It is also granted by an enlightened employer to spur the employee to greater efforts for the success of the business and realization of bigger profits. It is an act of generosity of the employer for which the employee ought to be thankful and grateful. . should not be deemed to fall within the "basic salary" of employees when the time comes to compute their 13th month pay. of which we take judicial notice.. They promote such products by visiting identified physicians and inform much physicians. they do not effect any sale of any article at all. . Inc." (Aragon v. In common commercial practice. In such a case the latter would be a fixed amount and the former would be a contingent one dependent upon the realization of profits . or the amount of actual work accomplished. the Court amplified: . medical representatives are employees engaged in the promotion of pharmaceutical products or medical devices manufactured by their employer. the Court explained the nature of a bonus in the following general terms: As a rule a bonus is an amount granted and paid to an employee for his industry loyalty which contributed to the success of the employer's business and made possible the realization of profits. the additional payments made to Boie-Takeda's medical representatives 28 .Co. . it cannot be considered part of wages. . when given.. the non-demandable character of a bonus was stressed by the Court in Traders Royal Bank v. prohibited from selling such samples to their patients. as a matter of professional ethics. . If the desired goal of production is not obtained. . . then it is part of the wage.G. Court of Industrial Relations. From the legal point of view a bonus is not and mandable and enforceable obligation. of the existence and chemical composition and virtues of particular products of their company. . v." (Kamaya Point Hotel v.National Labor 9 Relations Commission: A bonus is a "gratuity or act of liberality of the giver which the recipient has no right to demand as a matter of right. It is so when It is made part of the wage or salary or compensation. 61 O. 10 NLRC. it should follow that such productivity bonus. . But if it is paid only if profits are realized or a certain amount of productivity achieved. It is also paid on the basis of actual or actual work accomplished. . the bonus does not accrue. Cebu Portland Cement Co. Whether or not [a] bonus forms part of waqes depends upon the circumstances or conditions for its payment. (Emphasis supplied) In Atok-Big Wedge Mining Co. .

If and to the extent that such second paragraph is so interpreted and applied. that additional payments made to employees." However. like those paid in Duplicators. We observe that the third item excluded from the term "basic salary" is cast in open ended and apparently circular terms: "other remunerations which are not part of the basic salary. Such additional payments are not "commissions" within the meaning of the second paragraph of Section 5 (a) of the Revised Guidelines Implementing 13th Month Pay. However. But there is reason to distinguish one from the other here. in the light of the specific and detailed facts of each case. are properly excluded from the ambit of the term "basic salary" for purposes of computing the 13th month pay due to employees. where these earnings and remuneration are closely akin to fringe benefits. viz. 29 . The Supplementary Rules and Regulations Implementing P. Productivity bonuses are generally tied to the productivity or profit generation of the employer corporation. shall be included in determining his 13th month pay. Productivity bonuses are not directly dependent on the extent an individual employee exerts himself. correctly recognizes that commissions. is properly understood as holding that that second paragraph provides no legal basis for including within the term "commission" there used additional payments to employees which are. That same second paragraph however. earnings and other remunerations which are not part of the basic salary shall not be included in the computation of the 13th month pay. are intimately related to or directly proportional to the extent or energy of an employee's endeavors. on the other hand. No.D. 851 subsequently issued by former Labor Minister Ople sought to clarify the scope of items excluded in the computation of the 13th month pay.were not in fact sales commissions but rather partook of the nature of profit-sharing bonuses. overtime pay or profit-sharing payments. It is a percentage of the sales closed by a salesman and operates as an integral part of such salesman's basic pay. such as those paid in Duplicators. Finally. it must be regarded as invalid as having been issued in excess of the statutory authority of the Secretary of Labor. to the extent they partake of the nature of profit-sharing payments. to this extent. the statement of the Second Division in BoieTakeda declaring null and void the second paragraph of Section 5(a) of the Revised Guidelines Implementing the 13th Month Pay issued by former Labor Secretary Drilon. accordingly. may constitute part of the basic salary structure of salesmen and hence should be included in determining the 13th month pay. The doctrine set out in the decision of the Second Division is. absent a contractual undertaking to pay it. the second paragraph is and remains valid. We recognize that both productivity bonuses and sales commissions may have an incentive effect.: Sec. sales commissions which are effectively an integral portion of the basic salary structure of an employee. Commissions are paid upon the specific results achieved by a salesman-employee. In principle. in the nature of profitsharing payments or bonuses. they are properlyexcluded in computing the 13th month pay. A productivity bonus is something extra for which no specific additional services are rendered by any particular employee and hence not legally demandable. as a matter of fact. Sales commissions. what particular types of earnings and remuneration are or are not properly included or integrated in the basic salary are questions to be resolved on a case to case basis. 4. Overtime pay.

vs. vs.. The Solicitor General for public respondents. Laurel. and Phil Xerox Corp.D. No. 92174 December 10. Definition of certain terms. Sections 1 and 2 of Presidential Decree No. Employers already paying their employees a 13th month pay or its equivalent are not covered by this Decree. TRAJANO. Roxas & Teehankee for Boie-Takeda Chemicals. . NARVASA. committed "grave abuse of discretion amounting to lack of jurisdiction.: What items or items of employee remuneration should go into the computation of thirteenth month pay is the basic issue presented in these consolidated petitions. Franklin Drilon. L-102552 December 10. 1993 BOIE-TAKEDA CHEMICALS. respondents. Acting Secretary of the Department of Labor and Employment. respondent. 30 . Herrera. The Rules and Regulations Implementing P. No. Resolution of the issue entails. the question is whether or not the respondent labor officials in computing said benefit.R. G. C. CRESENCIANO B. Sec. DIONISIO DE LA SERNA. 1993 PHILIPPINE FUJI XEROX CORP.R. and overruling petitioner's contention that said provision constituted a usurpation of legislative power because not justified by or within the authority of the law sought to be implemented besides being violative of the equal protection of the law clause of the Constitution. petitioner. Undersecretary of the Department of Labor and Employment. 2..000. read as follows: Sec 1. a 13th month pay not later than December 24 of every year. . Otherwise stated. Inc. 851) promulgated by then Secretary of Labor and Employment. 2. regardless of the nature of the employment.00 a month. the Thirteenth Month Pay Law. 851 promulgated by then Labor Minister Blas Ople on December 22. De los Reyes. 851. INC.G. — . Hon. a review of the pertinent provisions of the laws and implementing regulations. petitioner. All employees are hereby required to pay all their employees receiving basic salary of not more than P1. and PHILIPPINE FUJI XEROX EMPLOYEES UNION. HON. 1975 contained the following relevant provisions relative to the concept of "thirteenth month pay" and the employers exempted from giving it. to wit: Sec.J." by giving effect to Section 5 of the Revised Guidelines on the implementation of the Thirteenth Month Pay (Presidential Decree No. first.

defined with particularity what remunerative items were and were not embraced in the concept of 13th month pay. 174. The relevant provisions read: 31 . cost of living allowances and all other allowances regularly enjoyed by the employee. Employers covered. and those who are paid a fixed amount for performing a specific work.: Sec.a) "Thirteenth month pay" shall mean one twelfth (1/12) of the basic salary of an employee within a calendar year. (The law applies) to all employers except to: xxx xxx xxx c) Employers already paying their employers a 13month pay or more in calendar year or is equivalent at the time of this issuance. 851 by removing the salary ceiling of P1. as follows: Section 1 of Presidential Decree No.000. 3. boundary. Aquino promulgated Memorandum Order No. 851 is hereby modified to the extent that all employers are hereby required to pay all their rank-and-file employees a 13th month pay not later than December 24. xxx xxx xxx e) Employers of those who are paid on purely commission. Sec. except where the workers are paid on piece-rate basis in which case the employer shall be covered by this issuance insofar as such workers are concerned. among other things. .00 a month set by the latter. b) "Basic Salary" shall include all remunerations or earnings paid by an employer to an employee for services rendered but may not include cost of living allowances granted pursuant to Presidential Decree No. viz. — . 525 or Letter of Instructions No. Slightly more than a year later. 1986. xxx xxx xxx The term "its equivalent" as used in paragraph (c) shall include Christmas bonus. 4. Where an employer pays less than 1/12th of the employee's basic salary. and specifically dealt with employees who are paid a fixed or guaranteed wage plus commission. on November 16. or task basis. which contained a single provision modifying Presidential Decree No. profit-sharing payments and other cash bonuses amounting to not less than 1/12th of the basic salary but shall not include cash and stock dividends.D. . 1987. irrespective of the time consumed in the performance thereof. Supplementary Rules and Regulations implementing P. earnings and other remunerations which are not part of the basic salary shall not be included in the computation of the 13th month pay. and all allowances and monetary benefits which are not considered or integrated as part of the regular or basic salary of the employee at the time of the promulgation of the Decree on December 16. the employer shall pay the difference. President Corazon C. 1975. On August 13. Revised Guidelines on the Implementation of the 13th Month Pay Law were promulgated by then Labor Secretary Franklin Drilon which. of every year. Overtime pay. profit sharing payments. 28. mid-year bonus. 851 were subsequently issued by Minister Ople whichinter alia set out items of compensation not included in the computation of the 13th month pay. as well as nonmonetary benefits.

R. 1987 and 1988 of Med Rep (Revised Guidelines on the Implementation of 13th month pay # 5) in the total amount of P558. Inc. on both their fixed or guaranteed wage and commission. such as the cash equivalent of unused vacation and sick leave credits. (its) medical representatives and its managers the total amount of FIVE HUNDRED SIXTY FIVE THOUSAND SEVEN HUNDRED FORTY SIX AND FORTY SEVEN CENTAVOS (P565. Finding that Boie-Takeda had not been including the commissions earned by its medical representatives in the computation of their 13th month pay. . . No. 4-209-89. and expressing the view "that the commission paid to our medical representatives are not to be included in the computation of the 13th month pay .89. 1989. Employees who are paid a fixed or guaranteed wage plus commission are also entitled to the mandated 13th month pay based on their total earnings during the calendar year. . . Mr.47) representing underpayment of thirteenth (13th) month pay for the years 1986. xxx xxx xxx 5." Boie-Takeda wrote the Labor Department contesting the Notice of Inspection Results." It pointed out that.e. 1987. Director Piezas issued an 3 Order directing Boie-Takeda: . to pay . Ramos under Inspection Authority No. these salary-related benefits should be included as part of the basic salary in the computation of the 13th month pay if by individual or collective agreement. overtime. This was the state of the law when the controversies at bar arose out of the following antecedents: (RE G. . Amount and payment of 13th Month Pay. by Labor and Development Officer Reynaldo B.746.810. Ramos served a Notice of 1 Inspection Results on Boie-Takeda through its president. . the same are treated as part of the basic salary of the employees. xxx xxx xxx The basic salary of an employee for the purpose of computing the 13th month pay shall include all remunerations or earnings paid by the 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. night differential and holiday pay. "if no sales is (sic) made under the effort of a particular representative. (since the) law and its implementing rules speak of REGULAR or BASIC salary and therefore exclude all other remunerations which are not part of the REGULAR salary. and the matter had perforce to be resolved on the basis of the evidence at hand. 1988. revised 32 . (a) Employees Paid by Results. — Employees who are paid on piece work basis are by law entitled to the 13th month pay. 92174) A routine inspection was conducted on May 2. pursuant to the . 13th Month Pay for Certain Types of Employees. and despite due notice. premium. no one appeared for Boie-Takeda. . requiring Boie-Takeda within ten (10) calendar days from notice to effect restitution or correction of "the underpayment of 13th month pay for the year(s) 1986. there is no commission during the period when no sale was transacted. 1989 in the premises of petitioner Boie-Takeda Chemicals. . On July 24.4. company practice or policy. inclusive. Benito Araneta. and cost-of-living allowances. however. so that commissions 2 are not and cannot be legally defined as regular in nature. 1989. However. i. Regional Director Luna C.. On the appointed dates. Piezas directed Boie-Takeda to appear before his Office on June 9 and 16.

more or less — pursuant to Revised Guidelines on the Implementation of the 13th month pay law for the period covering 1986. through common counsel. President of the Philxerox Employee Union. No action having been taken thereon by Philippine Fuji Xerox.R. Philippine Fuji Xerox was requested to effect rectification and/or restitution of the noted violation within five (5) working days from notice. the Revised Guidelines on the Implementation of the 13th Month Pay Law issued by then Secretary Drilon providing for the inclusion of commissions in the 13th month pay. They maintain that under P. on September 7. 1990 and October 10. 1989 pursuant to Routine Inspection Authority No.. Torres noted the following violation committed by Philippine Fuji Xerox Corp. 1990. the petition in G. 1991. No. shall 5 be excluded in the computation of their 13th month pay. Dionisio dela Serna and Undersecretary Cresenciano B. (RE G. Regional Director Luna C. the 13th month pay is based solely on basic salary. A motion for reconsideration was seasonably filed by Boie-Takeda under date of August 3. Philippine Fuji Xerox appealed the aforequoted Order to the Office of the Secretary of Labor. Nicolas and Gonzales were summoned to appear before Labor Employment and Development Officer Mario F. to wit: Underpayment of 13th month pay of 62 employees. NCR Office. No. premises considered. remunerations which do not form part of the basic or regular salary of an employee. 1989.R. Santos. Nicolas O. which was ordered consolidated with G. As defined by the law itself and clarified by the implementing and Supplementary Rules as well as by the Supreme Court in a long line of decisions. should not be considered in the computation of the 13th month pay. Treated as an appeal. NICANOR TORRES. Respondent PHILIPPINE FUJI XEROX is hereby ordered to restitute to its salesmen the portion of the 13th month pay which arose out of the nonimplementation of the said revised guidelines. such as commissions. otherwise. Department of 4 Labor for a conciliation conference. When no amicable settlement was reached. No. Trajano denied the appeal for lack of merit. the effectivity date of Memorandum Order No. 1989. In an Order dated October 120. 92174. the SR.R. Gonzales. Subsequently. Katigbak. In their almost identically-worded petitioner. Mr. Senior Labor and Employment Officer Nicanor M. wrote then Labor Secretary Franklin Drilon requesting a follow-up of the inspection findings. This being the case. disposing as follows: WHEREFORE. attribute grave abuse of discretion to respondent labor officials Hon. 851. Mr. Hence. 92174 as involving the same issue. 1991. addressed to the Manager.guidelines within ten (10) days from receipt of this Order. 102552. MR. Eduardo G. 28 and its Implementing Guidelines. Messrs. Undersecretary Cresenciano B. were issued in excess of the statutory authority 33 . 1989 Order with modification that the sales commissions earned by Boie-Takeda's medical representatives before August 13. NCR-LSED-RI-494-89. Trajano in issuing the questioned Orders of January 17. 1990 by then Acting Labor Secretary Dionisio de la Serna. petitioners.D. respectively. 1987 and 1988. Piezas issued an Order 7 dated August 23.R. No. ten (10) days from receipt hereof. 6 In his Notice of Inspection Results. it was resolved on January 17. who affirmed the July 24. the parties were required to file their position papers. LABOR EMPLOYMENT OFFICER is hereby Ordered to proceed to the premises of the Respondent for the purpose of computing the said deficiency (sic) should respondent fail to heed his Order. Hence the petition docketed as G. 102552) A similar Routine Inspection was conducted in the premises of Philippine Fuji Xerox Corp.

they contend. Thus.00 salary ceiling.D. No. 851. including matters of grave abuse of discretion amounting to lack or excess of jurisdiction and not extend to a collateral attack on the validity and/or constitutionality of a law or statute. P. Under the Rules and Regulations implementing Presidential Decree 851. and worked no violation of the equal protection clause of the Constitution. 851. 851. They add that the Revised Guidelines issued by then Labor Secretary Drilon merely clarified a gray area occasioned by the silence of the law as to the nature of commissions.D. said benefit was.000. They aver that the petitions do not advance any cogent reason or state any valid ground to sustain the allegation of grave abuse of discretion. 103 SCRA 139. supersede or abrogate P. b) Profit-sharing payments. Inciong.D. 34 .000. 851.conferred by P.D. 851. We rule for the petitioners. Respondents point to the case of Songco vs. defined and implemented under P. Petitioners further contend that assuming that Secretary Drilon did not exceed the statutory authority conferred by P. vs. wherein the Court declared that Article 97(f) of the Labor Code is explicit that commission is included in the definition of the term "wage". 183 SCRA 610. and still is. to be computed on the basic salary of the employee-recipient as provided under P. Any compensations or remunerations which are deemed not part of the basic pay is excluded as basis in the computation of the mandatory bonus. still the Revised Guidelines are null and void as they violate the equal protection of the law clause.D. Respondents through the Office of the Solicitor General question the propriety of petitioners' attack on the constitutionality of the Revised Guidelines in a petition for certiorari which. this conclusion becomes even more evident when considered in light of the opinion rendered by Labor Secretary Drilon himself in "In Re: Labor Dispute at the Philippine Long Distance Telephone Company" which affirmed the contemporaneous interpretation by then Secretary Ople that commissions are excluded from the basic salary. Memorandum Order No.D. and that at any rate. The concept of 13th Month Pay as envisioned. National Labor Relations Commission. In the case of San Miguel Corp. c) All allowances and monetary benefits which are not considered or integrated as part of the regular basic salary of the employee at the time of the promulgation of the Decree on December 16. 28 issued by President Corazon C.D. said Guidelines being based on reasonable classification. Contrary to respondents' contention. 851 remained unaltered.D. 174. this Court delineated the coverage of the term "basic salary" as used in P. Aquino on August 13. otherwise known as the 13th Month Pay Law has already been amended by Memorandum Order No. 28. 28 did not repeal. 1986 so that commissions are now imputed into the computation of the 13th Month Pay. According to petitioners. the interpretation given to the term "basic salary" as defined in P. it merely "modified" Section 1 of the decree by removing the P1. 28. We said at some length: Under Presidential Decree 851 and its implementing rules. the basic salary of an employee is used as the basis in the determination of his 13th month pay.00. should be confined purely to the correction of errors and/or defects of jurisdiction. 851. and while entitlement to said benefit was no longer limited to employees receiving a monthly basic salary of not more than P1. 1975. the following compensations are deemed not part of the basic salary: a) Cost-of-living allowances granted pursuant to Presidential Decree 525 and Letter of Instructions No. As may be gleaned from the language of the Memorandum Order No. 851 applies equally to "basic salary" under Memorandum Order No.

In Article 93 of the same Code. or maternity leaves. The Supplementary Rules and Regulations cure the seeming tendency of the former rules to include all remunerations and earnings within the definition of basic salary. Likewise. 174. Work may be performed beyond eight (8) hours a day provided that the employee is paid for the overtime work. overtime pay.Under a later set of Supplementary Rules and Regulations Implementing Presidential Decree 851 Presidential Decree 851 issued by then Labor Secretary Blas Ople. it is hard to find any "earnings and other remunerations" expressly excluded in the computation of the 13th month pay. the Supplementary Rules and Regulations Implementing Presidential Decree 851 is even more emphatic in declaring that earnings and other remunerations which are not part of the basic salary shall not be included in the computation of the 13th-month pay. this cloud is dissipated in the later and more controlling Supplementary Rules and Regulations which categorically exclude from the definitions of basic salary earnings and other remunerations paid by an employer to an employee. the catch-all exclusionary phrase "all allowances and monetary benefits which are not considered or integrated as part of the basic salary" shows also the intention to strip basic salary of any and all additions which may be in the form of allowances or "fringe" benefits. for reason of which such is categorically excluded from the definition of basic salary under the Supplementary Rules and Regulations Implementing Presidential Decree 851. The all embracing phrase "earnings and other remunerations" which are deemed not part of the basic salary includes within its meaning payments for sick. To cite a few provisions: Art. While doubt may have been created by the prior Rules and Regulations Implementing Presidential Decree 851 which defines basic salary to include all remunerations or earnings paid by an employer to an employee. The exclusion of the cost-of-living allowances under Presidential Decree 525 and Letter of Instructions No. paragraph c) work performed on any special holiday shall be paid an additional compensation of at least thirty percent (30%) of the regular wage of the employee. Overtime Work. This conclusion finds strong support under the Labor Code of the Philippines. As such they are deemed not part of the basic salary and shall not be considered in the computation of the 13th-month pay. earnings and other remunerations are excluded as part of the basic salary and in the computation of the 13th month pay. additional compensation equivalent to his regular wage plus at least twenty-five (25%) percent thereof. 35 . premium for works performed on rest days and special holidays. 87. vacation. If they were not excluded. A cursory perusal of the two sets of Rules indicates that what has hitherto been the subject of a broad inclusion is now a subject of broad exclusion. and profit-sharing payments indicate the intention to strip basic salary of other payments which are properly considered as "fringe" benefits. Moreover. It is clear that overtime pay is an additional compensation other than and added to the regular wage or basic salary. pays for regular holidays and night differentials. Then the exclusionary provision would prove to be idle and with no purpose.

WHEREFORE. Quite obvious from the foregoing is that the term "basic salary" is to be understood in its common. i. Thus. generally-accepted meaning. For similar reason. hence issued with grave abuse of discretion correctible by the writ of prohibition andcertiorari. in said case. additional pay. 2nd. 202 Tenn. Drilon is declared null and void as being violative of the law said Guidelines were issued to implement. 403." which statement is quite significant in that it speaks of a "basic salary" apart and distinct from "commissions" and "allowances". we also took judicial notice of the fact "that some salesmen do not receive any basic salary but depend on commissions and allowances or commissions alone.It is likewise clear the premiums for special holiday which is at least 30% of the regular wage is anadditional pay other than and added to the regular wage or basic salary." recognizes that In including commissions in the computation of the 13th month pay. which held that in statutes providing that pension should not less than 50 percent of "basic salary" at the time of retirement. Instead of supporting respondents' stand. although an employer-employee relationship exists.W.. 1991 based thereon are SET ASIDE.. it would appear that Songco itself commissions are not part of "basic salary. 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. In the same case. it shall not be considered in the computation of the 13th month pay. 1990 and October 10. Franks. National Labor Relations Commission. the fixed or guaranteed wage is patently the "basic salary" for this is what the employee receives for a standard work period. The assailed Orders of January 17. SO ORDERED. the quoted words meant the salary that an employee (e. An 10 administrative agency cannot amend an act of Congress. we deem it unnecessary to discuss the other issues raised in these petitions. the consolidated petitions are hereby GRANTED.g. 402. we construed the term in its generic sense to refer to all types of "direct remunerations for services rendered. 308 S. a policeman) was receiving at the time he retired without taking into consideration any extra compensation to which he might be 9 entitled for extra work. They cannot widen its scope. Having reached this conclusion. supra.e." Respondents would do well to distinguish this case from Songco vs. It is a fundamental rule that implementing rules cannot add to or detract from the provisions of the law it is designed to implement. as a rate of pay for a standard work period exclusive of such additional 8 payments as bonuses and overtime. upon which they rely so heavily. Commissions are given for extra efforts exerted in consummating sales or other related transactions.D. 630. The second paragraph of Section 5 (a) of the Revised Guidelines on the Implementation of the 13th Month Pay Law issued on November 126. 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." including commissions. What was involved therein was the term "salary" without the restrictive adjective "basic". In remunerative schemes consisting of a fixed or guaranteed wage plus commission. which this Court has made clear do not form part of the "basic salary. as such. 851. This is how the term was also understood in the case of Pless v. 36 . They are. 1987 by then Labor Secretary Franklin M.