G.R. No.
152456 April 28, 2004
SEVILLA TRADING COMPANY, petitioner, vs. A.V.A. TOMAS E. SEMANA, SEVILLA TRADING WORKERS
UNION–SUPER, respondents.
FACTS
For two to three years prior to 1999, petitioner Sevilla Trading Company, added to the base figure, in its
computation of the 13th-month pay of its employees, the amount of other benefits received by the
employees which are beyond the basic pay. These benefits included:
(a) Overtime premium for regular overtime, legal and special holidays;
(b) Legal holiday pay, premium pay for special holidays;
(c) Night premium;
(d) Bereavement leave pay;
(e) Union leave pay;
(f) Maternity leave pay;
(g) Paternity leave pay;
(h) Company vacation and sick leave pay; and
(i) Cash conversion of unused company vacation and sick leave.
Petitioner claimed that it entrusted the preparation of the payroll to its office staff, including the
computation and payment of the 13th-month pay and other benefits. When it changed its person in
charge of the payroll in the process of computerizing its payroll, and after audit was conducted, it
allegedly discovered the error of including non-basic pay or other benefits in the base figure used in the
computation of the 13th-month pay of its employees. It cited the Rules and Regulations Implementing
P.D. No. 851 (13th-Month Pay Law), effective December 22, 1975, Sec. 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.D. No.
525 or Letter of Instruction No. 174, profit-sharing payments, 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, 1975.
Petitioner then effected a change in the computation of the thirteenth month pay, as follows:
13th-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, legal and special holidays;
b) Legal holiday pay, premium pay for special holidays;
c) Night premium;
d) Bereavement leave pay;
e) Union leave pay;
f) Maternity leave pay;
g) Paternity leave pay;
h) Company vacation and sick leave pay; and
i) Cash conversion of unused vacation/sick leave.
Hence, the new computation reduced the employees’ thirteenth month pay. The daily piece-rate
workers represented by private respondent Sevilla Trading Workers Union – SUPER, a duly organized and
registered union, through the Grievance Machinery in their CBA, contested the new computation and
reduction of their thirteenth month pay. The parties failed to resolve the issue.
The parties submitted the issue of "whether or not the exclusion of leaves and other related benefits in
the computation of 13th-month pay is valid" to respondent VA-NCMB.
A.V.A. decided in favor of the Union.
Petitioner filed its Petition for Certiorari before the CA which the latter denied.
ISSUES
1. THE DECISION OF THE RESPONDENT COURT TO REVERT TO THE OLD COMPUTATION OF THE 13th-
MONTH PAY ON THE BASIS THAT THE OLD COMPUTATION HAD RIPENED INTO PRACTICE IS WITHOUT
LEGAL BASIS.
2. IF SUCH BE THE CASE, COMPANIES HAVE NO MEANS TO CORRECT ERRORS IN COMPUTATION WHICH
WILL CAUSE GRAVE AND IRREPARABLE DAMAGE TO EMPLOYERS.
RULING
The instant case needs to be distinguished from Globe Mackay Cable and Radio Corp. vs. NLRC,7 which
petitioner Sevilla Trading invokes.
In that case, this Court decided on the proper computation of the cost-of-living allowance (COLA) for
monthly-paid employees. Petitioner Corporation, pursuant to Wage Order No. 6 (effective 30 October
1984), increased the COLA of its monthly-paid employees by multiplying the ₱3.00 daily COLA by 22 days,
which is the number of working days in the company. The Union disagreed with the computation, claiming
that the daily COLA rate of ₱3.00 should be multiplied by 30 days, which has been the practice of the
company for several years. We upheld the contention of the petitioner corporation.
To be considered as such, it should have been practiced over a long period of time, and must be shown to
have been consistent and deliberate . . . The test of long practice has been enunciated thus:
. . . 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." Moreover, before Wage Order No. 4, there was
lack of administrative guidelines for the implementation of the Wage Orders. It was only when the Rules
Implementing Wage Order No. 4 were issued on 21 May 1984 that a formula for the conversion of the
daily allowance to its monthly equivalent was laid down.
Absent clear administrative guidelines, Petitioner Corporation cannot be faulted for erroneous application
of the law . . .
In the above quoted case, 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. 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. Any compensations or
remunerations which are deemed not part of the basic pay is excluded as basis in the computation of the
mandatory bonus.
Under the Rules and Regulations Implementing Presidential Decree 851, 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. 174;
b) Profit sharing payments;
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, 1975.
Under a later set of Supplementary Rules and Regulations Implementing Presidential Decree 851 issued
by the then Labor Secretary Blas Ople, overtime pay, earnings and other remunerations are excluded as
part of the basic salary and in the computation of the 13th-month pay. The exclusion of cost-of-living
allowances under Presidential Decree 525 and Letter of Instruction No. 174 and profit sharing payments
indicate the intention to strip basic salary of other payments which are properly considered as "fringe"
benefits. 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, this cloud is dissipated in the later and more controlling Supplementary Rules
and Regulations which categorically, exclude from the definition of basic salary earnings and other
remunerations paid by employer to an employee.
The all-embracing phrase "earnings and other remunerations" which are deemed not part of the basic
salary includes within its meaning payments for sick, vacation, or maternity leaves, premium for works
performed on rest days and special holidays, pay for regular holidays and night differentials. As such they
are deemed not part of the basic salary and shall not be considered in the computation of the 13th-
month pay. If they were not so excluded, it is hard to find any "earnings and other remunerations"
expressly excluded in the computation of the 13th-month pay. Then the exclusionary provision would
prove to be idle and with no purpose.
In the light of the clear ruling of this Court, there is, thus no reason for any mistake in the construction or
application of the law. When petitioner Sevilla Trading still included over the years non-basic benefits of
its employees, such as maternity leave pay, cash equivalent of unused vacation and sick leave, among
others in the computation of the 13th-month pay, this may only be construed as a voluntary act on its
part. Putting the blame on the petitioner’s payroll personnel is inexcusable. The considerable length of
time the questioned items had been included by petitioner indicates a unilateral and voluntary act on its
part, sufficient in itself to negate any claim of mistake.
A company practice favorable to the employees had indeed been established and the payments made
pursuant thereto, ripened into benefits enjoyed by them. And any benefit and supplement being
enjoyed by the employees cannot be reduced, diminished, discontinued or eliminated by the employer.
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, we hold that
jurisprudence has not laid down any rule requiring a specific minimum number of years. In the case at
bar, petitioner Sevilla Trading kept the practice of including non-basic benefits such as paid leaves for
unused sick leave and vacation leave in the computation of their 13th-month pay for at least two (2)
years. This, we rule likewise constitutes voluntary employer practice which cannot be unilaterally
withdrawn by the employer.
G.R. No. 131247 January 25, 1999
PRUBANKERS ASSOCIATION, petitioner, vs. PRUDENTIAL BANK & TRUST COMPANY, respondent.
FACTS
The Regional Tripartite Wages and Productivity Board of Region V issued a Wage Order which provided
for a Cost of Living Allowance (COLA) to workers in the private sector who ha[d] rendered service for at
least (3) months before its effectivity, and for the same period [t]hereafter, in the following categories:
P17.50 in the cities of Naga and Legaspi; P15.50 in the municipalities of Tabaco, Daraga, Pili and the city
of Iriga; and P10.00 for all other areas in the Bicol Region.
Subsequently the Regional Tripartite Wages and Productivity Board of Region VII issued also a Wage
Order which directed the integration of the COLA mandated pursuant to a prior Wage Order into the
basic pay of all workers. It also established an increase in the minimum wage rates for all workers and
and employees in the private sector as follows: by P10.00 in the cities of Cebu, Mandaue and Lapulapu;
P5.00 in the municipalities of Compostela, Liloan, Consolacion, Cordova, Talisay, Minglanilla, Naga and
the cities of Davao, Toledo, Dumaguete, Bais, Canlaon and Tagbilaran.
The petitioner then granted a COLA of P17.50 to its employees at its Naga Branch, the only branch
covered by the Wage Order, and integrated the P150.00 per month COLA into the basic pay of its rank-
and-file employees at its Cebu, Mabolo and P. del Rosario branches, the branches covered by Wage
Order.
Prubankers Association wrote the petitioner requesting that the Labor Management Committee be
immediately convened to discuss and resolve the alleged wage distortion created in the salary structure
upon the implementation of the said wage orders and extend the application of the wage orders to its
employees outside Regions V and VII, claiming that the regional implementation of the said orders
created a wage distortion in the wage rates of petitioner's employees nationwide. Then the parties
agreed to submit the matter to voluntary arbitration. VA ruloed there was wage distortion.
Court of Appeals held that there was no wage distortion & the variance in the salary rates of employees
in different regions of the country was justified by RA 6727. Hence, there is no basis to apply the salary
increases imposed by Wage Order No. VII-03 to employees outside of Region VII."
ISSUE
The main issue is whether or not a wage distortion resulted from respondent's implementation of the
aforecited Wage Orders.
RULING
No. Wage distortion presupposes an increase in the compensation of the lower ranks in an office
hierarchy wirhout a corresponding raise for higher-tiered employees in the same region of the country,
resulting in the elimination or the severe diminution of the distinction between the two groups. Such
distortion does not arise when a wage order gives employees in one branch of a bank higher
compensation than that given to their counterparts in other regions occupying the same pay scale, who
are not covered by said wage order. In short, the implementation of wage orders in one region but not in
others does not in itself necessarily result in wage distortion.
The statutory definition of wage distortion is found in Article 124 of the Labor Code, as amended by
Republic Act No. 6727, which reads:
Art. 124. Standards/Criteria for Minimum Wage Fixing — . . .
As used herein, a wage distortion shall mean a situation where an increase in prescribed wage results in
the elimination of severe contraction of intentional quantitative differences in wage or salary rates
between and among employee groups in an establishment as to effectively obliterate the distinctions
embodied in such wage structure based on skills, length of service, or other logical bases of differentiation.
Elaborating on this statutory definition, this Court ruled: "Wage distortion presupposes a classification of
positions and ranking of these positions at various levels. One visualizes a hierarchy of positions with
corresponding ranks basically in terms of wages and other emoluments. The concept of a wage
distortion assumes an existing grouping or classification of employees which establishes distinctions
among such employees on some relevant or legitimate basis. Wage distortion involves four elements:
1. An existing hierarchy of positions with corresponding salary rates
2. A significant change in the salary rate of a lower pay class without a concomitant increase in the salary
rate of a higher one
3. The elimination of the distinction between the two levels
4. The existence of the distortion in the same region of the country
In the present case, it is clear that no wage distortion resulted when respondent implemented the
subject Wage Orders in the covered branches. In the said branches, there was an increase in the salary
rates of all pay classes. Furthermore, the hierarchy of positions based on skills, lengh of service and other
logical bases of differentiation was preserved. In other words, the quantitative difference in
compensation between different pay classes remained the same in all branches in the affected region.
Put differently, the distinction between Pay Class 1 and Pay Class 2, for example, was not eliminated as a
result of the implementation of the two Wage Orders in the said region. Hence, it cannot be said that
there was a wage distortion.
Petitioner's claim of wage distortion must also be denied for one other reason. The difference in wages
between employees in the same pay scale in different regions is not the mischief sought to be banished
by the law. From the above-quoted rationale of the law, as well as the criteria enumerated, a disparity in
wages between employees with similar positions in different regions is necessarily expected. In insisting
that the employees of the same pay class in different regions should receive the same compensation,
petitioner has apparently misunderstood both the meaning of wage distortion and the intent of the law
to regionalize wage rates.
Petitioner also insists that the Bank has adopted a uniform wage policy, which has attained the status of
an established management practice; thus, it is estopped from implementing a wage order for a specific
region only. We are not persuaded. Said nationwide uniform wage policy of the Bank had been adopted
prior to the enactment of RA 6727. After the passage of said law, the Bank was mandated to regionalize
its wage structure.
G.R. No. 121439 January 25, 2000
AKLAN ELECTRIC COOPERATIVE INCORPORATED (AKELCO), petitioner, vs. NATIONAL LABOR RELATIONS
COMMISSION (Fourth Division), RODOLFO M. RETISO and 165 OTHERS, respondents.
FACTS
These are consolidated cases/claims for non-payment of salaries and wages, 13th month pay, ECOLA and
other fringe benefits as rice, medical and clothing allowances, by complainant Rodolfo M. Retiso and 163
others, against respondents Aklan Electric Cooperative, Inc. (AKELCO), Atty. Leovigildo Mationg in his
capacity as General Manager; Manuel Calizo, in his capacity as Acting Board President, Board of
Directors, AKELCO. Complainants alleged that prior to the temporary transfer of the office of AKELCO
from Lezo Aklan to Amon Theater, Kalibo, Aklan, complainants were continuously performing their task
and were duly paid of their salaries at their main office located at Lezo, Aklan. By way of resolution of the
Board of Directors of AKELCO allowed the temporary transfer holding of office at Amon Theater, Kalibo,
Aklan per information by their Project Supervisor, Atty. Leovigildo Mationg, that their head office is
closed and that it is dangerous to hold office thereat; Nevertheless, majority of the employees including
herein complainants continued to report for work at Lezo Aklan and were paid of their salaries. That, an
unnumbered resolution was passed by the Board of AKELCO withdrawing the temporary designation of
office at Kalibo, Aklan, and that the daily operations must be held again at the main office of Lezo, Aklan;
That complainants who were then reporting at the Lezo office were duly paid of their salaries, while in
the meantime some of the employees through the instigation of respondent Mationg continued to
remain and work at Kalibo, Aklan; That, complainants who continuously reported for work at Lezo, Aklan
in compliance with the aforementioned resolution were not paid their salaries; That up to the present,
complainants were again allowed to draw their salaries; with the exception of a few complainants who
were not paid their salaries for the months of April and May;
According to the respondents, these complainants voluntarily abandoned their respective work/job
assignments, without any justifiable reason and without notifying the management and defied the
lawful orders and other issuances by the General Manager and the Board of Directors of the AKELCO.
These complainants were requested to report to work at the Kalibo office, but despite these lawful
orders of the General Manager, the complainants did not follow and wilfully and maliciously defied said
orders and issuance of the General Manager;
LA DISMISSED THE COMPLAINT. NLRC Cebu City, reversed.
ISSUE.
WON public respondent NLRC committed grave abuse of discretion amounting to excess or want of
jurisdiction when it reversed the finding of the Labor Arbiter that private respondent refused to work
under the lawful orders of the petitioner AKELCO management; hence they are covered by the "no work,
no pay" principle and are thus not entitled to the claim for unpaid wages from June 16, 1992 to March
18, 1993.
RULING
YES. It must be pointed out that complainants worked and continuously reported at Lezo office despite
the management holding office at Kalibo. In fact, they were paid their wages before it was withheld and
then were allowed to draw their salaries again on March 1993 while reporting at Lezo up to the present.
Respondents' acts and payment of complainants' salaries and again from March 1993 is an unequivocal
recognition on the part of respondents that the work of complainants is continuing and uninterrupted
and they are therefore entitled to their unpaid wages for the period from June 1992 to March 1993.
They have taken amongst themselves declaring management's acts of temporarily transferring the
holding of the AKELCO office from Lezo to Kalibo, Aklan as illegal. It is never incumbent upon themselves
to declare the same as such. It is lodged in another forum or body legally mantled to do the same. What
they should have done was first to follow management's orders temporarily transferring office for it has
the first presumption of legality.
We are also unable to agree with public respondent NLRC when it held that the assurance made by Atty.
Mationg to the letter-request of office manager Leyson for the payment of private respondents' wages
from June 1992 to March 1993 was an admission on the part of general manager Mationg that private
respondents are indeed entitled to the same. The letter reply of Atty. Mationg to Leyson merely stated
that he will recommend the request for payment of backwages to the Board of Directors for their
consideration and appropriate action and nothing else, thus, the ultimate approval will come from the
Board of Directors.
As cited earlier, petitioner's Board in a Resolution dismissed private respondents who were on illegal
strike and who refused to report for work at Kalibo office; since no services were rendered by private
respondents they were not paid their salaries. Private respondents never questioned nor controverted
the Resolution dismissing them.
Private respondents were dismissed by petitioner effective January 31, 1992 and were accepted back by
petitioner, as an act of compassion, subject to the condition of "no work, no pay" effective March 1993
which explains why private respondents were allowed to draw their salaries again.
Finally, we hold that public respondent erred in merely relying on the computations of compensable
services submitted by private respondents. There must be competent proof such as time cards or office
records to show that they actually rendered compensable service during the stated period to entitle
them to wages. It has been established that the petitioner's business office was .transferred to Kalibo
and all its equipments, records and facilities were transferred thereat and that it conducted its official
business in Kalibo during the period in question. It was incumbent upon private respondents to prove
that they indeed rendered services for petitioner, which they failed to do.
G.R. No. 111474 August 22, 1994
FIVE J TAXI and/or JUAN S. ARMAMENTO, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION,
DOMINGO MALDIGAN and GILBERTO SABSALON, respondents.
FACTS
Private respondents Domingo Maldigan and Gilberto Sabsalon were hired by the petitioners as taxi
drivers and, as such, they worked for 4 days weekly on a 24-hour shifting schedule. Aside from the daily
"boundary" of P700.00 for air-conditioned taxi or P450.00 for non-air-conditioned taxi, they were also
required to pay P20.00 for car washing, and to further make a P15.00 deposit to answer for any
deficiency in their "boundary," for every actual working day. In less than 4 months after Maldigan was
hired as an extra driver by the petitioners, he already failed to report for work for unknown reasons.
Later, petitioners learned that he was working for "Mine of Gold" Taxi Company. With respect to
Sabsalon, while driving a taxicab of petitioners, he was held up by his armed passenger who took all his
money and thereafter stabbed him. He was hospitalized and after his discharge, he went to his home
province to recuperate.
Sabsalon was re-admitted by petitioners as a taxi driver under the same terms and conditions as when
he was first employed, but his working schedule was made on an "alternative basis," that is, he drove
only every other day. However, on several occasions, he failed to report for work during his schedule.
Sabsalon failed to remit his "boundary" of P700.00 for the previous day. Also, he abandoned his taxicab
in Makati without fuel refill worth P300.00. Despite repeated requests of petitioners for him to report for
work, he adamantly refused. Afterwards it was revealed that he was driving a taxi for "Bulaklak
Company."
Maldigan requested petitioners for the reimbursement of his daily cash deposits for 2 years, but herein
petitioners told him that not a single centavo was left of his deposits as these were not even enough to
cover the amount spent for the repairs of the taxi he was driving. This was allegedly the practice adopted
by petitioners to recoup the expenses incurred in the repair of their taxicab units. When Maldigan
insisted on the refund of his deposit, petitioners terminated his services. Sabsalon, on his part, claimed
that his termination from employment was effected when he refused to pay for the washing of his taxi
seat covers.
Private respondents filed a complaint with the Manila Arbitration Office of the NLRC charging petitioners
with illegal dismissal and illegal deductions. That complaint was dismissed, as unreasonable delay was
not consistent with the natural reaction of a person who claimed to be unjustly treated, hence the filing
of the case could be interpreted as a mere afterthought.
NLRC concurred in said findings, with the observation that they voluntarily left their jobs for similar
employment with other taxi operators. It, accordingly, affirmed the ruling of the labor arbiter that private
respondents' services were not illegally terminated.
RULING
Respondent NLRC held that the P15.00 daily deposits made by respondents to defray any shortage in
their "boundary" is covered by the general prohibition in Article 114 of the Labor Code against requiring
employees to make deposits, and that there is no showing that the Secretary of Labor has recognized the
same as a "practice" in the taxi industry. Consequently, the deposits made were illegal and the
respondents must be refunded therefor.
Article 114 of the Labor Code provides as follows: Deposits for loss or damage. — 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, materials, or equipment supplied by the employer, except when the employer is
engaged in such trades, occupations or business where the practice of making deposits is a recognized
one, or is necessary or desirable as determined by the Secretary of Labor in appropriate rules and
regulations.
It can be deduced therefrom that the said article provides the rule on deposits for loss or damage to
tools, materials or equipments supplied by the employer. Clearly, the same does not apply to or permit
deposits to defray any deficiency which the taxi driver may incur in the remittance of his "boundary. "
Also, when private respondents stopped working for petitioners, the alleged purpose for which
petitioners required such unauthorized deposits no longer existed. In other case, any balance due to
private respondents after proper accounting must be returned to them with legal interest.
Sabsalon was able to withdraw his deposits through vales or he incurred shortages, such that he is even
indebted to petitioners in the amount of P3,448.00. With respect to Maldigan's deposits, nothing was
mentioned questioning the same even in the present petition. We accordingly agree with the
recommendation of the Solicitor General that since the evidence shows that he had not withdrawn the
same, he should be reimbursed the amount of his accumulated cash deposits.
On the matter of the car wash payments, the labor arbiter had this to say in his decision: "Anent the
issue of illegal deductions, there is no dispute that as a matter of practice in the taxi industry, after a tour
of duty, it is incumbent upon the driver to restore the unit he has driven to the same clean condition
when he took it out, and were made to shoulder the expenses for washing, the amount doled out was
paid directly to the person who washed the unit, thus we find nothing illegal in this practice, much more
(sic) to consider the amount paid by the driver as illegal deduction in the context of the law."
G.R. No. 77959 January 9, 1989
RADIO COMMUNICATIONS OF THE PHILIPPINES, INC., petitioner, vs. THE SECRETARY OF LABOR AND
EMPLOYMENT, THE REGIONAL DIRECTOR OF THE NATIONAL CAPITAL REGION, DEPARTMENT OF LABOR
AND EMPLOYMENT and UNITED RCPI COMMUNICATIONS LABOR ASSOCIATION (URCPICLA)-FUR,
respondents.
FACTS
Petitioner, a domestic corporation engaged in the telecommunications business, filed with the National
Wages Council an application for exemption from the coverage of Wage Order No. 1. The application was
opposed by respondent URCPICLA-FUR, a labor organization affiliated with the Federation of Unions of
Rizal (FUR). National Wages Council, through its Chairman, rendered a letter-decision disapproving said
application and ordering the petitioner to pay its covered employees the mandatory living allowance of
P2.00 daily. Said letter-decision was affirmed by the Office of the President and, subsequently, this Court
in its resolution. Entry of final judgment was issued by the Court.
However, before the aforesaid case was elevated to this Court, respondent union filed a motion for the
issuance of a writ of execution, asserting its claim to 15% of the total backpay due to all its members as
"union service fee" for having successfully prosecuted the latter's claim for payment of wages and for
reimbursement of expenses incurred by FUR and prayed for the segregation and remittance of said
amount to FUR thru its National President.
An alias writ of execution was issued. Without the knowledge and consent of respondent union,
petitioner entered into a compromise agreements with BMRCPI-NFL as the new bargaining agent of
oppositors RCPI employees. Thereupon, the parties to the compromise agreement filed a joint Motion to
Dismiss with Prejudice praying for the dismissal of the same with prejudice. Acting on the Urgent Motion
for Lien, Director Severo M. Pucan issued an Order awarding to URCPICLA-FUR and FUR 15% of the total
backpay of RCPI employees as their union service fees, and directing RCPI to deposit said amount with
the cashier of the Regional Office for proper disposition to said awardees.
Despite notice petitioner paid in full the covered employees, without deducting the union service fee of
15%. At this juncture, the record shows that said Regional Director issued an order declaring the decision
fully satisfied and lifting all the garnishments effected pursuant thereto "(C)onsidering that the Alias Writ
of Execution in this case had already been fully satisfied.
However, it appears that thereafter, in an order, NCR officer-in-charge Romeo A. Young found petitioner
RCPI and its employees jointly and severally liable for the payment of the 15% union service fee
amounting to P427,845.60 to private respondent URCPICLA-FUR and consequently ordered the
garnishment of petitioner's bank account to enforce said claim.
Secretary of Labor and Employment issued an order modifying the order appealed from by holding
petitioner solely liable to respondent union for 10% of the awarded amounts as attorney's fees.
ISSUE
WON the public respondents acted with grave abuse of discretion amounting to lack of jurisdiction in
holding the petitioner solely liable for "union service fee' to respondent URCPICLA-FUR.
RULING
We hold in the negative. While it is true that the original decision of said Council; did not expressly
provide for payment of attorney's fees, that particular aspect or deficiency is deemed to have been
supplied, if not modified pro tanto, by the compromise agreement subsequently executed between the
parties. A cursory perusal of said agreement shows an unqualified admission by petitioner that "from the
aforesaid total amount due every employee, 10% thereof shall be considered as attorney's fee, although,
as hereinafter discussed, it sought to withhold it from respondent union. Considering, however, that
respondent union was categorically found by the Labor Secretary to have been responsible for the
successful prosecution of the case to its ultimate conclusion in behalf of its member, employees of
herein petitioner, its right to fees for services rendered, or what it termed as "union service fee," is
indubitable.
The appearance of labor federations and local unions as counsel in labor proceedings has been given
legal sanction and we need only cite Art. 222 of the Labor Code which allows non-lawyers to represent
their organization or members.
As already stated, private respondent had moved for the deduction of said fee from the total backpay
awarded in the decision of the Council. Again, as is evident in the aforequoted provisions of the
compromise agreement, petitioner was bound to pay only 30% of the amount due each employee on
November 30, 1985, while the balance of 70% would still be the subject of renegotiation by the parties
on July 31, 1986. Yet, despite such conditions beneficial to it, petitioner paid in full the backpay of its
employees on November 29, 1985, ignoring the service fee due the private respondent.
Worse, petitioner supposedly paid to one Atty. Rodolfo M. Capocyan the 10% fee that properly pertained
to herein private respondent, an unjustified and baffling diversion of funds.
Finally, petitioner cannot invoke the lack of an individual written authorization from the employees as a
shield for its fraudulent refusal to pay the service fee of private respondent. Prior to the payment made
to its employees, petitioner was ordered by the Regional Director to deduct the 15% attorney's fee from
the total amount due its employees and to deposit the same with the Regional Labor Office.
We agree that Article 222 of the Labor Code requiring an individual written authorization as a
prerequisite to wage deductions seeks to protect the employee against unwarranted practices that
would diminish his compensation without his knowledge and consent. However, for all intents and
purposes, the deductions required of the petitioner and the employees do not run counter to the
express mandate of the law since the same are not unwarranted or without their knowledge and
consent. Also, the deductions for the union service fee in question are authorized by law and do not
require individual check-off authorizations. 22
G.R. No. 95844 July 20, 1992
COMMANDO SECURITY AGENCY, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and
NEMESIO DECIERDO, respondents.
FACTS
Private respondent Nemesio Decierdo was a security guard of the petitioner. Petitioner entered into a
contract to provide guarding services to the Alsons Development and Investment Corporation (ALSONS
for brevity) at its Aldevinco Building on Claro M. Recto Avenue, Davao, for a period of one year. The
number of guards to be assigned by the petitioner would depend on ALSON's demand, sometimes (2)
guards on a daily shift, and sometimes (4) guards. Decierdo was one of the guards assigned to the
Aldevinco Building by the petitioner.
THEN, Properties Administration Head of ALSONS, requested the petitioner for a "periodic reshuffling" of
[Link] to that reasonable request of its client, served the following recall order.
Decierdo was assigned then to the Pacific Oil Company in Bunawan, Davao, with instruction to report to
the manager, but Decierdo refused to accept the assignment.
Decierdo filed a complaint for illegal dismissal, unfair labor practice, underpayment of wages, overtime
pay, night premium, 13th month pay, holiday pay, rest day pay and incentive leave pay.
LA : Found Decierdo illegally dismissed. NLRC affirmed.
ISSUE
WON NLRC erred in not holding that petitioner is entitled to a 25% share of his monthly salary as agreed
between them.
RULING
Petitioner's contention that Decierdo is estopped from complaining about the 25% deduction from his
salary representing petitioner's share in procuring job placement for him, is not well taken. That
provision of the employment contract was illegal and inequitous, hence, null and void.
The constitutional provisions on social justice (Sections 9 and 10,Article II) and protection to labor (Sec.
18, Article II) in the declaration of Principles and State Policies, impose upon the courts the duty to be
ever vigilant in protecting the rights of workers who are placed in a contractually disadvantaged position
and who sign waivers or provisions contrary to law and public policy (Mercury Drug Co. Inc. vs. Dayao,
117 SCRA 99, 116). We affirm the NLRC's ruling that:
It goes without saying that respondent may not deduct its so-called "share" from the salaries of its
guards without the latter's express consent and if such deductions are not allowed by law. This is
notwithstanding any previous agreement or understanding between them. Any such agreement or
contract is void ab initio being contrary to law and public policy.
