LABOR STANDARDS CASE DIGEST
Bargaining Agreement plus attorney's fees of
HEIRS OF ANIBAN VS NLRC
(1997) G.R. 155034
FACTS:
Reynaldo Aniban was employed by the
Philippine Transmarine Carriers, Inc. (TRANSMARINE)
acting in behalf ofits foreign principal Norwegian Ship
Management A/S (NORWEGIAN) as radio operator on
board the vessel "Kassel." Aniban died due to
myocardial infarction during the period of his
employment. A claim was made for additional death
benefits under the Collective Bargaining Agreement
between Associated Marine Officers and Seamen's
Union of the Philippines and NORWEGIAN. The claim
was rejected on the ground that myocardial infarction
was not an occupational disease. However, on 11
January 1994 the POEA ruled that myocardial
infarction was an occupational disease in the case of
R/O Aniban and granted the prayer of his heirs for
payment of death benefits under the POEA Standard
Employment Contract as well as under the Collective
MARIA ANNY G. YANONG Page 1
US$6,700.00 equivalent to 10% of the total award. On
appeal, the NLRC reversed the POEA and denied the
claim on the ground that it was the Employees'
Compensation Commission (ECC) which had original
jurisdiction to hear and determine the claim for death
benefits.
NLRC likewise deleted he award of attorney’s
fees on the ground that there was no unlawful
withholding of wages. A motion to reconsider the
decision of the NLRC was denied; hence, this petition
by the heirs of Aniban. The Supreme Court ruled that
the Employees Compensation Commission may not be
considered as having jurisdiction over money claims,
albeit death compensation benefits of overseas
contract workers. Article 180 of the Labor Code
provides that the Commission exercises appellate
jurisdiction only over decisions rendered either by the
GSIS or the SSS in the exercise of their respective
original and exclusive jurisdictions. On the issue of
whether the death of Aniban due to myocardial
infarction is compensable, the Court ruled that it is
compensable. Although the physical exertion involved
in carrying out the functions of a radio operator may
have been quite minimal, the pressure and strain that
went with the position should be considered.
Furthermore, the Court stressed that probability and
not the ultimate degree of certainty is the test of
proof in compensation.
ISSUE: WON attorney’s fees can be awarded in a case
not involving unlawful withholding of wages.
HELD:
Yes. ARTICLE 111 OF THE LABOR CODE DOES
NOT LIMIT THE AWARD OF ATTORNEY'S FEES TOCASES
OF UNLAWFUL WITHHOLDING OF WAGES ONLY; WHAT
THE PROVISION EXPLICITLY PROHIBITSIS THE AWARD
OF ATTORNEY'S FEES WHICH EXCEEDED 10% OF THE
AMOUNT OF WAGES RECOVERED.
—
On the award of attorney's fees which NLRC deleted
on the ground that there was no unlawful withholding
ofwages, suffice it to say that Art.111 of the Labor
Code does not limit the award of attorney's fees to
cases of unlawful withholding of wages only. What it
explicitly prohibits is the award of attorney's fees
which exceed 10% of the amount of wages recovered.
Thus, under the circumstances, attorney's fees are
recoverable for the services rendered by petitioner's
counsel to compel Aniban's employer to
pay its monetary obligations under the CBA. However,
the amount of P50,000.00 claimed as attorney's fees
in this case is the reasonable compensation based
 LABOR STANDARDS CASE DIGEST
on the records and not the maximum 10% of the total
award as granted by POEA. The reduction of
unreasonable attorney's fees is within our regulatory
powers.
NASIPIT LUMBER COMPANY, INC., AND PHILIPPINE
WALLBOARD CORPORATION VS NATIONALWAGES
AND PRODUCTIVITY COMMISSION, ET AL.
HELD:
No, the applications should be denied. The
law grants the NWPC, not the Regional Wage Board,
the power to “prescribe the rules and guidelines” for
the determination of minimum wage and productivity
measures. While the Regional Wage Board has the
power to issue wage orders, such wage orders are
subject to the guidelines prescribed by the NWPC.
Since the Regional Wage Board’s Guideline No. 3 was
not approved by the NWPC and is contrary to NWPC’s
guidelines, the said guideline issued by the Regional
Wage Board is inoperative and cannot be used by the
latter in deciding on the applications for exemption.
METROPOLITAN BANK v. NLRC
SEPTEMBER 10, 1993
MARIA ANNY G. YANONG Page 2
FACTS:
On 25 May 1989, the bank entered into a
collective bargaining agreement with the MBTCEU,
granting a monthly P900 wage increase effective 01
January 1989, P600 wage increase effective 01 January
1990, and P200 wage increase effective 01 January
1991. The MBTCEU had also bargained for the
inclusion of probationary employees in the list of
employees who would benefit from the first P900
increase but the bank had adamantly refused to
accede thereto. Consequently, only regular employees
as of 01 January 1989 were given the increase to the
exclusion of probationary employees.
Barely a month later, or on 01 July 1989, Republic Act
6727, "an act to rationalize wage policy determination
by establishing the mechanism and proper standards
therefor, x x x fixing new wage rates, providing wage
incentives for industrial dispersal to the countryside,
and for other purposes," took effect. Its provisions,
pertinent to this case, state:
"SEC. 4. (a) Upon the effectivity of this Act, the
statutory minimum wage rates of all workers
and employees in the private sector, whether
agricultural or non-agricultural, shall be
increased by twenty-five pesos (P25) per day,
x x x: Provided, That those already receiving
above the minimum wage rates up to one
hundred pesos (P100.00) shall also receive an
increase of twenty-five pesos (P25.00) per day,
(d) If expressly provided for and
agreed upon in the collective
bargaining agreements, all increases
in the daily basic wage rates granted
by the employers three (3) months
before the effectivity of this Act shall
be credited as compliance with the
increases in the wage rates prescribed
herein, provided that, where such
increases are less than the prescribed
increases in the wage rates under this
Act, the employer shall pay the
difference. Such increase shall not
include anniversary wage increases,
merit wage increase and those
resulting from the regularization or
promotion of employees.
Pursuant to the above provisions, the bank gave the
P25 increase per day, or P750 a month, to its
probationary employees and to those who had
been promoted to regular or permanent status before
01 July 1989 but whose daily rate was P100 and
below. The bank refused to give the same increase to
 LABOR STANDARDS CASE DIGEST
its regular employees who were receiving more than
P100 per day and recipients of the P900 CBA increase.
The parties ultimately agreed to refer the issue for
compulsory arbitration to the NLRC.
NLRC: The labor arbiter disagreed with the bank's
contention that the increase in its implementation of
Republic Act 6727 did not constitute a
distortion because "only 143 employees or 6.8% of
the bank's population of a total of 2,108 regular
employees" benefited. He concluded that since the
"intentional quantitative difference" in wage or salary
rates between and among groups of employees is
not based purely on skills or length of service but also
on "other logical bases of differentiation, a P900.00
wage gap intentionally provided in a collective
bargaining agreement as a quantitative difference in
wage between those who WERE regular employees as
of January 1, 1989 and those who WERE NOT as of
that date, is definitely a logical basis of differentiation
(that) deserves protection from any distorting
statutory wage increase."
The labor arbiter disposed of the case, thus:
WHEREFORE, premises considered, the
respondent is hereby directed to restore to
complainants and their members the Nine
Hundred (P900.00) Pesos CBA wage gap they
used to enjoy over non-regular employees as
of January 1, 1989 by granting them a Seven
Hundred Fifty (P750.00) Pesos monthly
increase effective July 1, 1989.
SO ORDERED."[
The bank appealed to the NLRC, and the decision was
reversed.
"A wage distortion can arise only in a situation where
the salary structure is characterized intentional
quantitative differences among employee groups
determined or fixed on the basis of skills, length of
service, or other logical basis of differentiation and
such differences or distinctions are obliterated or
contracted by subsequent wage increases.
WHEREFORE, premises considered,
the appealed decision is hereby set aside and
a new judgment is hereby entered, dismissing
the complaint for lack of merit.
As applied in this case, We noted that in the new wage
salary structure, the wage gaps between Levels 6 and
7 levels 5 and 6, and levels 6 and 7 (sic) were
maintained. While there is a noticeable decrease in
the wage gap between Levels 2 and 3, Levels 3 and 4,
and Levels 4 and 5, the reduction in the wage gaps
MARIA ANNY G. YANONG Page 3
between said levels is not significant as to obliterate
or result in severe contraction of the intentional
quantitative differences in salary rates between the
employee groups. For this reason, the basic
requirement for a wage distortion to exist does not
appear in this case. Moreover, there is nothing in the
law which would justify an across-the-board
adjustment of P750.00 as ordered by the Labor
Arbiter.
ISSUE: Whether or not a wage distortion exists as a
consequence of the grant of a wage increase to
certain employees.
HELD:
We agree, is, by and large, a question of fact
the determination of which is the statutory function of
the NLRC. Judicial review of labor cases, we may add,
does not go beyond the evaluation of the sufficiency
of the evidence upon which the labor officials’ findings
rest. As such, factual findings of the NLRC are
generally accorded not only respect but also finality
provided that its decisions are supported by
substantial evidence and devoid of any taint of
unfairness or arbitrariness. When, however, the
members of the same labor tribunal are not in accord
on those aspects of a case, as in this case, this Court is
well cautioned not to be as so conscious in passing
upon the sufficiency of the evidence, let alone the
conclusions derived therefrom.
Same; Same; Same; Same; In mandating an
adjustment, the law did not require that there be an
elimination or total abrogation of quantitative wage
or salary differences, a severe contraction thereof is
enough.—The definition of “wage distortion,”
aforequoted, shows that such distortion can so exist
when, as a result of an increase in the prescribed
wage rate, an “elimination or severe contraction of
intentional quantitative differences in wage or salary
rates” would occur “between and among employee
groups in an establishment as to effectively obliterate
the distinctions embodied in such wage structure
based on skills, length of service, or other logical bases
of differentiation.” In mandating an adjustment, the
law did not require that there be an elimination or
total abrogation of quantitative wage or salary
differences; a severe contraction thereof is enough. As
has been aptly observed by Presiding Commissioner
Edna Bonto-Perez in her dissenting opinion, the
contraction between personnel groupings comes close
to eighty-three (83%), which cannot, by any stretch of
imagination, be considered less than severe.
Same; Same; Same; Same; Same; The Solicitor General
has correctly emphasized that the intention of the
parties, whether the benefits under a collective
 LABOR STANDARDS CASE DIGEST
bargaining agreement should be equated with those
granted by law or not unless there are compelling
reasons otherwise must prevail and be given effect.—
The “intentional quantitative differences” in wage
among employees of the bank has been set by the
CBA to about P900 per month as of 01 January 1989.
It is intentional as it has been arrived at through the
collective bargaining process to which the parties are
thereby concluded. The Solicitor General, in
recommending the grant of due course to the petition,
has correctly emphasized that the intention of the
parties, whether the benefits under a collective
bargaining agreement should be equated with those
granted by law or not, unless there are compelling
reasons otherwise, must prevail and be given effect.
PHILIPINE TELEGRAPH VS. NLRC
MAY 23, 1997
FACTS:
PT&T (Philippine Telegraph & Telephone
Company) initially hired Grace de
Guzman specifically as “Supernumerary
Project Worker”, for a fixed period from
November 21, 1990 until April 20, 1991
as reliever for C.F. Tenorio who went on
maternity leave. She was again invited
for employment as replacement of Erlina
F. Dizon who went on leave on 2 periods,
from June 10, 1991 to July 1, 1991 and
July 19, 1991 to August 8, 1991.
On September 2, 1991, de Guzman was
again asked to join PT&T as a
probationary employee where
probationary period will cover 150 days.
She indicated in the portion of the job
application form under civil status that
she was single although she had
contracted marriage a few months
earlier. When petitioner learned later
about the marriage, its branch supervisor,
Delia M. Oficial, sent de Guzman a
memorandum requiring her to explain the
discrepancy. Included in the
memorandum, was a reminder about the
company’s policy of not accepting
married women for employment. She
was dismissed from the company
effective January 29, 1992. Labor Arbiter
handed down decision on November 23,
1993 declaring that petitioner illegally
dismissed De Guzman, who had already
gained the status of a regular employee.
Furthermore, it was apparent that she
had been discriminated on account of her
MARIA ANNY G. YANONG Page 4
having contracted marriage in violation of
company policies.
ISSUE: Whether the alleged concealment
of civil status can be grounds to
terminate the services of an employee.
HELD:
Article 136 of the Labor Code, one of the
protective laws for women, explicitly
prohibits discrimination merely by reason
of marriage of a female employee. It is
recognized that company is free to
regulate manpower and employment
from hiring to firing, according to their
discretion and best business judgment,
except in those cases of unlawful
discrimination or those provided by law.
PT&T’s policy of not accepting or
disqualifying from work any woman
worker who contracts marriage is afoul of
the right against discrimination provided
to all women workers by our labor laws
and by our Constitution. The record
discloses clearly that de Guzman’s ties
with PT&T were dissolved principally
because of the company’s policy that
married women are not qualified for
employment in the company, and not
merely because of her supposed acts of
dishonesty.
The government abhors any stipulation or
policy in the nature adopted by PT&T. As
stated in the labor code:
“ART. 136. Stipulation against marriage.
— It shall be unlawful for an employer to
require as a condition of employment or
continuation of employment that a
woman shall not get married, or to
stipulate expressly or tacitly that upon
getting married, a woman employee shall
be deemed resigned or separated, or to
actually dismiss, discharge, discriminate
or otherwise prejudice a woman
employee merely by reason of marriage.”
The policy of PT&T is in derogation of the
provisions stated in Art.136 of the Labor
Code on the right of a woman to be free
from any kind of stipulation against
marriage in connection with her
employment and it likewise is contrary to
 LABOR STANDARDS CASE DIGEST
good morals and public policy, depriving
a woman of her freedom to choose her
status, a privilege that is inherent in an
individual as an intangible and inalienable
right. The kind of policy followed by PT&T
strikes at the very essence, ideals and
purpose of marriage as an inviolable
social institution and ultimately, family as
the foundation of the nation. Such policy
must be prohibited in all its indirect,
disguised or dissembled forms as
discriminatory conduct derogatory of the
laws of the land not only for order but
also imperatively required.
VILLARAMA VS. NLRC
SEPTEMBER 2, 1994
FACTS:
On November 16, 1987, petitioner DELFIN
VILLARAMA was employed by private respondent
GOLDEN DONUTS, INC., as its Materials Manager. His
starting salary was P6,500.00 per month, later
increased to P8,500.00.
On July 15 1989, petitioner Villarama was
charged with sexual harassment by Divina Gonzaga, a
clerk-typist assigned in his department. The
humiliating experience compelled her to resign from
work. Her letter-resignation, dated July 15, 1989,
reads:
"MR. LEOPOLDO H. PRIETO
President
Golden Donuts, Inc.
Dear Sir:
I would like to tender my resignation from my post as
Clerk Typist of Materials Department effective
immediately.
It is really my regret to leave this company which has
given me all the opportunity I long desired. My five (5)
months stay in the company have been very gratifying
professionally and financially and I would not
entertain the idea of resigning except for the most
shocking experience I have had in my whole life.
Last Friday, July 7, 1989, Mr. Delfin Villarama and Mr.
Jess de Jesus invited all the girls of Materials
Department for a dinner when in (sic) the last minute
the other three (3) girls decided not to join the group
anymore. I do (sic) not have second thought(s) in
accepting their invitation for they are my colle(a)gues
and I had nothing in mind that would in any manner
prompt me to refuse to what appeared to me as a
MARIA ANNY G. YANONG Page 5
simple and cordial invitation. We went to a restaurant
along Makati Avenue where we ate our dinner. Mr.
Villarama, Mr. Olaybar and Mr. Jess de Jesus were
drinking while we were eating and (they) even offered
me a few drinks and when we were finished, they
decided to bring me home. While on my way, I found
out that Mr. Villarama was not driving the way to my
house. I was wondering why we were taking the
wrong way until I found out that we were entering a
motel. I was really shock(ed). I did not expect
that a somewhat reputable person like Mr. Villarama
could do such a thing to any of his subordinates. I
should have left the company without any word but I
feel that I would be unfair to those who might be
similarly situated. I hope that you would find time to
investigate the veracity of my allegations and make
each (sic) responsible for his own deed. (emphasis
ours)
Thank you very much and more power.
Very respectfully yours,
DIVINA GONZAGA"
The letter prompted Mr. Leopoldo Prieto, President of
Golden Donuts, Inc., to call petitioner to a meeting on
August 4, 1989. Petitioner was then required to
explain the letter against him. It appears that
petitioner agreed to tender his resignation. Private
respondent moved swiftly to separate petitioner. Thus,
private respondent approved petitioner's application
for leave of absence with pay from August 5-28, 1989.
It also issued an inter-office memorandum, dated
August 4, 1989, advising "all concerned" that
petitioner was no longer connected with the company
effective August 5, 1989.Two (2) days later, or on
August 7, 1989, Mr. Prieto sent a letter to petitioner
confirming their agreement that petitioner would be
officially separated from the private respondent. The
letter reads:
"Dear Mr. Villarama:
This is to officially confirm our discussion last Friday,
August 4, 1989, regarding your employment with us.
As per our agreement, you will be officially separated
from the company effective August 23, 1989.
May I, therefore, request you to please submit or send
us your resignation letter on or before the close of
business hours of August 22, 1989.
Please see the Personnel & Industrial Relations Office
for your clearance.
Very truly yours,
 LABOR STANDARDS CASE DIGEST

(SGD). LEOPOLDO H. PRIETO, JR.
President"
In the interim, petitioner had a change of mind. In a
letter dated August 16, 1989, petitioner sought
reconsideration of the management's decision to
terminate him, viz:
"DEAR SIR:
Private respondent appealed to the National Labor
Relations Commission setting aside its first decision
declaring the cause of dismissal of complainant as
valid.
ISSUE: WON sexual harassment is a valid cause for
separation from service.
HELD:

MAY I REQUEST FOR A RECONSIDERATION ON THE

DECISION HANDED DURING OUR MEETING OF
AUGUST 4, 1989, TERMINATING MY SERVICES WITH
THE COMPANY EFFECTIVE AUGUST 5, 1989.
THE SIGNIFICANT CONTRIBUTION OF THE MATERIALS
DEPARTMENT, WHICH I HAD BEEN HEADING FOR THE
PAST 21 MONTHS, TO THE PERFORMANCE OF THE
COMPANY FAR OUTWEIGHS THE ERROR THAT I HAD
COMMITTED. AN ERROR THAT MUST NOT BE A BASIS
FOR SUCH A DRASTIC DECISION.
AS I AM STILL OFFICIALLY ON LEAVE UNTIL THE 29th,
OF THIS MONTH, MAY I EXPECT THAT I WILL RESUME
MY REGULAR DUTY ON THE 29th?
ANTICIPATING YOUR FAVORABLE REPLY.
VERY TRULY YOURS,
(SGD.) DELFIN G. VILLARAMA"
For his failure to tender his resignation, petitioner was
dismissed by private respondent on August 23, 1989.
Feeling aggrieved, petitioner filed an illegal dismissal
case[2] against private respondent.
NLRC: Due process was not observed in the dismissal
of petitioner and there was no valid cause for
dismissal.
Private respondent GOLDEN DONUTS, INC. was
ordered to:
(1) reinstate petitioner DELFIN G. VILLARAMA
to his former position, without loss of seniority
rights, and pay his backwages at the rate of
P8,500.00 per month from August 1989, until
actual reinstatement;
(2) pay petitioner the amount of P24,866.66,
representing his unused vacation leave and
proportionate 13th month pay;
(3) pay petitioner P100,000.00, as moral
damages, and P20,000.00, as exemplary
damages; and (3) pay the attorney's fees
equivalent to ten percent of the entire
monetary award.

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