27. Philippine Duplicators, Inc. vs.

NLRC, 241 SCRA 380 (1995)

Posted by Pius Morados on November 10, 2011
(Labor Standards – Commissions included in the computation of 13th month pay)

Facts: Petitioner Corporation pays its salesmen a small fixed or guaranteed wage; the greater part of
the latter’s wages or salaries being composed of the sales or incentive commissions earned on actual
sales of duplicating machines closed by them. Thus the sales commissions received for every duplicating
machine sold constituted part of the basic compensation or remuneration of the salesmen of the
Philippine Duplicators for doing their job.

The Labor Arbiter directed Petitioner Duplicators to pay 13th month pay to private respondent
employees computed on the basis of their fixed wages plus sales commission.

Sec. 4 of the Supplementary Rules and Regulations Implementing PD No. 851 (Revised Guidelines
Implementing 13th Month Pay) provides that overtime pay, earning and other remuneration which are
not part of the basic salary shall not be included in the computation of the 13th month pay.

Petitioner Corporation contends that their sales commission should not be included in the computation
of the 13th month pay invoking the consolidated cases of Boie-Takeda Chemicals, Inc. vs Hon. Dionisio
dela Serna and Philippine Fuji Xerox Corp. vs Hon. Crecencio Trajano, were the so-called commissions of
medical representatives of Boie-Takeda Chemicals and rank-and-file employees of Fuji Xerox Co. were
not included in the term “basic salary” in computing the 13th month pay.

Issue: WON sales commissions comprising a pre-determined percent of the selling price of the goods are
included in the computation of the 13th month pay.

Held: Yes. These commission which are an integral part of the basic salary structure of the Philippine
Duplicator’s employees-salesmen, are not overtime payments, nor profit-sharing payments nor any
other fringe benefit. Thus, salesmen’s commissions comprising a pre-determined percent of the selling
price of the goods were properly included in the term “basic salary” for purposes of computing the 13th
month pay.

Commissions of medical representatives of Boie-Takeda Chemicals and rank-and-file employees of Fuji

Xerox Co. were not included in the term “basic salary” because these were paid as “productivity
bonuses” which is not included in the computation of 13th month pay.