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Songco, et al. vs.

National Labor Relations Commission

FACTS: Zuelig filed an application for clearance to terminate the services of Songco, and others, on the ground of
retrenchment due to financial losses. During the hearing, the parties agreed that the sole issue to be resolved was the
basis of the separation pay due. The salesmen received monthly salaries of at least P400.00 and commission for
every sale they made.
The Collective Bargaining Agreements between Zuelig and the union of which Songco, et al. were members
contained the following provision: "Any employee who is separated from employment due to old age, sickness,
death or permanent lay-off, not due to the fault of said employee, shall receive from the company a retirement
gratuity in an amount equivalent to one (1) month's salary per year of service."
The Labor Arbiter ordered Zuelig to pay Songco et al., separation pay equivalent to their one month salary
(exclusive of commissions, allowances, etc.) for every year of service with the company.
The National Labor Relations Commission sustained the Arbiters decision
ISSUE: Whether or not earned sales commissions and allowances should be included in the monthly salary of
Songco, et al. for the purpose of computing their separation pay.
In the computation of backwages and separation pay, account must be taken not only of the basic salary of the
employee, but also of the transportation and emergency living allowances.
Even if the commissions were in the form of incentives or encouragement, so that the salesman would be inspired to
put a little more industry on jobs particularly assigned to them, still these commissions are direct remunerations for
services rendered which contributed to the increase of income of the employee. Commission is the recompense
compensation or reward of an agent, salesman, executor, trustee, receiver, factor, broker or bailee, when the same is
calculated as a percentage on the amount of his transactions or on the profit to the principal. The nature of the work
of a salesman and the reason for such type of remuneration for services rendered demonstrate that commissions are
part of Songco, et al's wage or salary.
The Court takes judicial notice of the fact that some salesmen do not receive any basic salary, but depend on
commissions and allowances or commissions alone, although an employer-employee relationships exists.
If the opposite view is adopted, i.e., that commissions do not form part of the wage or salary, then in effect, we will
be saying that this kind of salesmen do not receive any salary and, therefore, not entitled to separation pay in the
event of discharge from employment. This narrow interpretation is not in accord with the liberal spirit of the labor
laws, and considering the purpose of separation pay which is, to alleviate the difficulties which confront a dismissed
employee thrown to the streets to face the harsh necessities of life.
In Soriano vs. NLRC (155 SCRA 124), we held that the commissions also claimed by the employee (override
commission plus net deposit incentive) are not properly includible in such base figure since such commissions must
be earned by actual market transactions attributable to the petitioner [salesman]. Since the commissions in the
present case were earned by actual transactions attributable to Song, et al., these should be included in their
separation pay. In the computation thereof, what should be taken into account is the average commission earned
during their last year of employment.


166 SCRA 533, G.R. No. 76633, October 18,
Cruz, J.
Vitaliano Saco was Chief Officer of the M/V Eastern Polaris when he was killed in an accidentin Tokyo, Japan on March 15,
1985.His widow sued for damages under Executive Order No. 797 and Memorandum Circular No. 2of the POEA.The
petitioner, as owner of the vessel, argued that the complaint was cognizable not by thePOEA but by the Social Security System
and should have been filed against the State FundInsurance.The POEA nevertheless assumed jurisdiction and after considering
the position papers of theparties ruled in favour of the complainant.The petition is DISMISSED, with costs against the
petitioner. The temporary restraining orderdated December 10, 1986 is hereby LIFTED. It is so ordered.
1. Whether or not the POEA had jurisdiction over the case as the husband was not an overseasworker
1. Yes. The Philippine Overseas Employment Administration was created under Executive OrderNo. 797, promulgated on
May 1, 1982, to promote and monitor the overseas employment of Filipinos and t o protect their rights. It replaced the
National Seamen Board created earlier under Article 20 of the Labor Code in 1974. Under Section 4(a) of the said executive
order, the POEAis vested with "original and exclusive jurisdiction over all cases, including money claims ,involving employeeemployer relations arising out of or by virtue of any law or contract involving Filipino contract workers, including seamen."
These cases, according to the 1985Rules and Regulations on Over seas Employment issued by the POEA, include,
claims for death,disability and other benefits arising out of such employment..The award of P180,000.00 for
death benefits and P12,000.00 for burial expenses was made bythe POEA pursuant to its Memorandum Circular No. 2, which
became effective on February 1,1984. This circular prescribed a standard contract to be adopted by both foreign and domestic
shipping companies in the hiring of Filipino seamen for overseas employment.


G.R. No. L-16600 dated December 27, 1961

Facts: Santiago Fabrigar had been employed as a janitor-messenger of the respondent Iloilo Chinese
Commercial School. His work includes sweeping and scrubbing the floors, cleaning the classrooms and
the school premises, and other janitorial chores. On March 11, 1956, in preparation for the graduation, he
carried desks and chairs from the classroom to the auditorium, set curtains and worked harder and faster
than usual. Although he felt shortness of breath and did not feel well, he continued working. On March
13, he spat blood and stopped working. From April 29 to May 15, 1956 , he received treatment for far
advanced pulmonary tuberculosis and for heart disease from Dr. Quirico Villareal.
On June 28, 1956, Santiago Fabrigar died of beriberi adult. His common-law wife, Leonora Fabrigar
with his heirs filed claim for compensation with the Workmens Compensation Commission wherein it
was alleged tht the cause of death was pulmonary tuberculosis contracted during and as a result of his
employment as janitor. The hearing officer denied the claim and dismissed the case. He concluded that

there was no causal connection between the cause of death and the said employment. The decision was
appealed. The Workmens compensation Commission concluded that he had been suffering from such
disease and his employment as a janitor aggravated his pre-existing illness. And although there was a
discrepancy between the cause of death beriberi adult and the testimony of Dr. Villareal, the latter was
given credence. The commission ordered Chinese Commercial School, Inc. to pay the claimant. The
decision was appealed. Petitioner contended that the Commission erred in finding that the cause of death
was tuberculosis and as a result of his employment; holding that the petitioner was the employer of the
Issue: whether there is an employee-employer relationship when the former is employed and paid by its
Board of Directors that would warrant the heirs of the deceased employer compensation under
Workmens compensation law?
Held: Yes. There was an employee-employer relationship between the respondent school and the
deceased. Although it is true that the Board of Directors, the Chinese Chamber of Commerce was the one
who pays for the janitorial service of the school, it was still the latter who exercised supervision and
control over the performance of the deceased. And the court held that power to control employees
conduct is the most important test of employer-employee relation. The decision appealed from was