Chavez vs NLRC

FACTS:

Respondent company, Supreme Packaging, Inc., is engaged in the business of manufacturing cartons and
other packaging materials for export and distribution, which hired the services of the petitioner, Pedro Chavez, as
truck driver.  As such, the petitioner was tasked to deliver the respondent company’s products from its factory in
Mariveles, Bataan, to its various customers, mostly in Metro Manila. Most of the delivery trips were at nighttime,
commencing at 6:00pm and returning thereto 2 to 3 days after. Initially, the petitioner was paid P300/trip, and
then was later adjusted to P480, and then at the time of his dismissal, he was receiving P900/trip.

Subsequently, he expressed to the company’s plant manager his desire to avail himself of the benefits
that a regular employees were receiving but his request was denied. He then filed a complaint for regularization,
but before his case could be heard, respondent company terminated his services. Respondent contended
thereafter that Chavez is not an employee of the company but an independent contractor, therefore not entitled
to the backpay wages, separation pay, 13th month pay, and service incentive leave pay that he is requesting.

Issue:

Whether the elements for determining employment relationship are present

Held:
Yes, all the four elements are present in this case. First, it was the respondent who engaged in the services of
the petitioner without the intervention of the third party. Second, the power to dismiss was inherent in this case
and has been exercised by the respondent upon the termination of Chavez’s services. Third, the presence of the
control power by the respondent to petitioner’s work was manifested by careful review of the records. Fourth, the
payment of wages is also present. The Supreme Court defined wage as “remuneration or earnings, however
designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece or
commission basis, or other method of calculating the same, which is payable by an employer to an employee
under a written or unwritten contract of employment for work done or to be done, or for service rendered or to be
rendered.”
Moreover, under the Rules Implementing the Labor Code, every employer is required to pay his employees
by means of payroll.
Mayon Hotel and Restaurant vs Adana
FACTS:
Petitioner Mayon Hotel and Restaurant hired herein 16 respondents as employees in its business which
has continued its operations in its new location in Legazpi City, due to the expiration and non-renewal of the lease
contract for the space it rented at its first location at Rizal Street. Only nine (9) of the sixteen (16) employees
continued working in the Mayon Restaurant at its new site. On various dates of April and May 1997, the 16
employees filed complaints for underpayment of wages and other money claims against petitioners.
MHR asserted that business losses is the reason for not reinstating the respondents.

ISSUE:
Whether the respondents are entitled to their money claims due to underpayment of wages, nonpayment
of holiday pay, rest day premium, OT pay, and night shift differential.

HELD:
Yes. The Supreme Court reinstated the award of monetary claims granted by the Labor Arbiter.
E n ti t l e m e n t t o   l a b o r s t a n d a r d   b e n e fi t s i s   a separate and distinct concept from payment of
separation pay aris ing from illegal dismissal,  and is governed by diff erent provisions of the Labor
Code. Respondents have set out with particularity in their complaint, position paper, affidavits and other
documents the labor standard benefits they are entitled to, and which they alleged that petitioners have failed to
pay them. It was therefore peti ti oners' burden to prove that they have paid these money claims. One
who pleads payment has the burden of proving it, and even where the employees must allege nonpayment, the
general rule is that the burden rests on the defendant to prove nonpayment, rather than on the plaintiff to prove
nonpayment. This petitioner failed to do.
Aklan Electric Cooperative Inc., vs NLRC

FACTS:

The board of AKELCO allowed the temporary transfer holding of office at Kalibo, Aklan. Nevertheless,
majority of the employees continued to work at its main office at Lezo, Aklan and were paid of their salaries. An
unnumbered resolution was passed by AKELCO withdrawing the temporary designation of office at Kalibo and that
daily operation be held again at the main office. Subsequently, complainants who reported at Lezo were not paid
their salaries and were then allowed to draw their salaries with exception of the few who were not paid of their
salaries for April and May 1993. Respondent alleged that the complainants voluntarily abandoned their work
assignments that they defied the lawful orders by the General manager under the principle of “now work no pay”.

ISSUE:

Whether private respondents are covered of the principle “no work no pay”

HELD:

Yes. 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 their wages. It was incumbent upon
private respondents to prove that they indeed rendered services for petitioners, which they failed to do. The
principle says that if there is no work performed by the employee, there can be no pay unless the laborer was able,
willing and ready to work but was prevented by management or was illegally locked out, suspended or dismissed.
International School Alliance of Educators vs Quisumbing

FACTS:

Private respondent International School Alliance of Educators, pursuant to PD 732, is a domestic

educational institution established primarily for dependents of foreign diplomatic personnel and other temporary
residents. The said decree authorizes the School to employ its own teaching and management personnel selected
by it either locally or abroad, from Philippines or other nationalities, such personnel being exempt from otherwise
applicable laws and regulations attending their employment, except the laws that have been and will be enacted
for the protection of the employees. The said School hires both foreign and local teachers, classifying them into 1)
foreign-hires and 20 local-hires.

The School grants certain benefits that are entitled only to the foreign-hires, and they are afforded to
salary rates that are 25% more than local-hires. When the negotiations for a new collective bargaining agreement
were held on June 1995, petitioner alliance, contested the difference of the salary rates between the local and
foreign-hires.

ISAE filed a notice of strike. Due to the failure to reach a compromise between the parties, the issue
reached the DOLE who favored the School.

ISSUE:

Whether the foreign-hires should be included in bargaining unit as local-hires.

HELD:

NO. That public policy abhors inequality and discrimination is beyond contention. Our Constitution and
laws reflect the policy against these evils. The Constitution in the Article on Social Justice and Human Rights
exhorts Congress to "give highest priority to the enactment of measures that protect and enhance the right of all
people to human dignity, reduce social, economic, and political inequalities." The very broad Article 19 of the Civil
Code requires every person, "in the exercise of his rights and in the performance of his duties, [to] act with justice,
give everyone his due, and observe honesty and good faith." The Constitution ] also directs the State to promote
"equality of employment opportunities for all." Similarly, the Labor Code provides that the State shall "ensure
equal work opportunities regardless of sex, race or creed." It would be an affront to both the spirit and letter of
these provisions if the State, in spite of its primordial obligation to promote and ensure equal employment
opportunities, closes its eyes to unequal and discriminatory terms and conditions of employment. However,
foreign-hires do not belong to the same bargaining unit as the local-hires.

Discrimination, particularly in terms of wages, is frowned upon by the Labor Code. Article 248 declares it an unfair
labor practice for an employer to discriminate in regard to wages in order to encourage or discourage membership
in any labor organization.

The factors in determining the appropriate collective bargaining unit are (1) the will of the employees (Globe
Doctrine); (2) affinity and unity of the employees’ interest, such as substantial similarity of work and duties, or
similarity of compensation and working conditions (Substantial Mutual Interests Rule); (3) prior collective
bargaining history; and (4) similarity of employment status. The basic test of an asserted bargaining unit’s
acceptability is whether or not it is fundamentally the combination which will best assure to all employees the
exercise of their collective bargaining rights.

In the case at bar, it does not appear that foreign-hires have indicated their intention to be grouped together with
local-hires for purposes of collective bargaining. The collective bargaining history in the School also shows that
these groups were always treated separately. Foreign-hires have limited tenure; local-hires enjoy security of
tenure. Although foreign-hires perform similar functions under the same working conditions as the local-hires,
foreign-hires are accorded certain benefits not granted to local-hires such as housing, transportation, shipping
costs, taxes and home leave travel allowances. These benefits are reasonably related to their status as foreign-
hires, and justify the exclusion of the former from the latter. To include foreign-hires in a bargaining unit with local-
hires would not assure either group the exercise of their respective collective bargaining rights.

The ramification is that “(i)f the employer pays one employee less than the rest, it is not for that
employee to explain why he receives less or why the others receive more.  That would be adding insult to injury. 
The employer has discriminated against that employee; it is for the employer to explain why the employee is
treated unfairly.
Philex Gold Philippines, Inc. vs Philex Bulawan Supervisors Union

FACTS:

Philex Bulawan Supervisors Union is the sole and exclusive collective bargaining representative of
all supervisors of the petitioner company, a gold mining company which has its mine asite at Negros Occidental.
Parties entered into a bargaining agreement which made the employees of Philex Mining Corporation, from
Benguet, its regular supervisory employees. Some of the so-called “ex-Padcal” supervisors began to work in the
Bulawan mines of Philex Mining 1992 as ordinary rank-and-file workers. When Philex Gold was incorporated in
1996 to exclusively handle gold mining, it took over the operations of the Bulawan mines and absorbed some of
the  ex-Padcal employees.
 
Philex Gold conveyed to Philex Supervisors Union the status of the  ex-Padcal supervisors upon the
insistence of the union to be informed of their standing. It turned out that the ex-Padcal supervisors were
maintained under a confidential payroll, receiving a different set of benefits and higher salaries compared to the
locally hired supervisors of similar rank and classification doing parallel duties and functions.

Respondent filed a complaint against Philex Gold with the (NCMB),  for the payment of wage differential
and damages and the rectification of the discriminatory salary structure and benefits between the ex-Padcal
supervisors and the local-hires.

ISSUE:
Whether  the doctrine of “equal pay for equal work” should not remove management
prerogative to institute difference in salary within the same
supervisory level

HELD:

No, the Court cannot agree because petitioners failed to adduce evidence to show that an ex-Padcal
supervisor and a locally hired supervisor of the same rank are initially paid the same basic salary for doing the same
kind of work.  They failed to differentiate this basic salary from any kind of salary increase or additional benefit
which may have been given to the ex-Padcal supervisors due to their seniority, experience and other factors.  
 
The records only show that an ex-Padcal supervisor is paid a higher salary than a locally hired supervisor
of the same rank.  Therefore, petitioner failed to prove with satisfactory evidence that it has not discriminated
against the locally hired supervisor in view of  the unequal salary.

Bankard Employers Union vs NLRC

FACTS:
Bankard, Inc. (Bankard) classifies its employees by levels, to wit: Level I, Level II, Level III, Level IV, and
Level V. On May 28, 1993, its Board of Directors approved a “New Salary Scale”, made retroactive to April 1, 1993,
for the purpose of making its hiring rate competitive in the industry’s labor market. The “New Salary Scale”
increased the hiring rates of new employees, to wit: Levels I and V by one thousand pesos (P1,000.00), and Levels
II, III and IV by nine hundred pesos (P900.00). Accordingly, the salaries of employees who fell below the new
minimum rates were also adjusted to reach such rates under their levels.
As a result, petitioner demanded for salary increase of its old, regular employees. Bankard refused, on the
ground that it had no obligation to grant all its employees the same increase. Bankard Union filed a Notice of Strike
on the ground of discrimination and other aspects of unfair labor practice, and was treated as preventive
mediation. Upon the second notice of strike, it was certified for compulsory notice of arbitration.

ISSUE:
Whether the unilateral adoption by an employer of an upgraded salary scale that increased the hiring
rates of new employees without increasing the salary rates of old employees resulted in wage distortion.

HELD:
No. Wage distortion is a factual and economic condition that may be brought about by different causes.
In Metro Transit, the reduction or elimination of the normal differential between the wage rates of rank-and-file
and those of supervisory employees was due to the granting to the former of wage increase which was, however,
denied to the latter group of employees.
The mere factual existence of wage distortion does not, however,  ipso facto  result to an obligation to
rectify it,  absent a law or other source of obligation which requires its rectification.
Bankard’s right to increase its hiring rate, to establish minimum salaries for specific jobs, and to adjust the
rates of employees affected thereby is embodied under Section 2, Article V (Salary and Cost of Living Allowance) of
the parties’ Collective Bargaining Agreement (CBA), to wit:

Section 2. Any salary increase granted under this Article shall be without prejudice to the right of the Company
to establish such minimum salaries  as it  may hereafter find appropriate for specific jobs, and to adjust the rates of
the employees  thereby affected to such minimum salaries thus established .

This CBA provision, which is based on legitimate business-judgment prerogatives of the employer, is a valid
and legally enforceable source of rights between the parties.
In fine, absent any indication that the voluntary increase of salary rates by an employer was done arbitrarily
and illegally for the purpose of circumventing the laws or was devoid of any legitimate purpose other than to
discriminate against the regular employees, this Court will not step in to interfere with this management
prerogative. Employees are of course not precluded from negotiating with its employer and lobby for wage
increases through appropriate channels, such as through a CBA.
This Court, time and again, has shown concern and compassion to the plight of workers in adherence to the
Constitutional provisions on social justice and has always upheld the right of workers to press for better terms and
conditions of employment. It does not mean, however, that every dispute should be decided in favor of labor, for
employers correspondingly have rights under the law which needs to be respected.
Statesmarine Corporation vs Cebu Seaman’s Association

FACTS:

Petitioner, together with Royale Line Inc. was engaged in the business of marine transportation,
employing steamships of Philippine Registry and had collective bargaining contract with Cebu Seaman’s
Association Inc. Subsequently, respondent union filed a complaint that officers and men working on board the
petitioner’s vessel, have not been paid their sick leave, vacation leave, and overtime pay. Subsequently,
respondent union alleged that they were threatened to accept the reduction of salaries, which is also observed by
the other shipowners. They also alleged that after the Minimum Wage Law took effect, the petitioner company
required them to pay the sum of P0.40 for every meal, and that because the captain had refused to  yield to the
general reduction of salaries, the petitioners dismissed the captain. The petitioner, on their defense, stated that
they have suffered a financial losses in the operation of their vessels and that there is no law which provides for
the payment of sick leave or vacation leave to employees of private firms, and that with regard to their overtime
pay, they have always observed the Eight-hour labor Law and overtime does not apply to those who provide
means of transportation.

ISSUE:

Whether the deducted amount in the salary of the employees for their meals is considered as facilities,
and not supplements. 

HELD:

It is considered as supplements.

Supplements constitute extra remuneration or special privileges or benefits given to or received by the

laborers over and above their ordinary earnings or wages. Facilities, on the other hand, are items of expense
necessary for the laborer’s and his family’s existence and subsistence so that by express provisions of law, they
form part of the wage and when furnished by the employer are deductible therefrom, since if they are not so
furnished, the laborer would spend and pay them just the same.

In the case at bar, it was found out that the meals were freely given to crew members prior to the
effectivity of the Minimum Wage Law while they were on the high seas not as part of their wages but as a
necessary matter in the maintenance of the health and efficiency of the crew members during the voyage. The
deductions therein made for the meals given after August 4, 1951, should be returned to them, and the operator
of the coastwise vessels should continue giving the benefits.
Milares vs NLRC

FACTS:

Petitioners numbering one hundred sixteen (116) occupied the positions of Technical Staff, Unit Manager,
Section Manager, Department Manager, Division Manager and Vice President in the mill site of respondent Paper
Industries Corporation of the Philippines (PICOP) in Surigao del Sur.  In 1992 PICOP suffered a major financial
setback. To avert further losses, it undertook a retrenchment program and terminated the services of
petitioners.  Accordingly, petitioners received separation pay computed at the rate of one (1) month basic pay for
every year of service.  Believing however that the allowances they allegedly regularly received on a monthly basis
during their employment should have been included in the computation thereof they lodged a complaint for
separation pay differentials.

ISSUE:

Whether the allowances of the employees are deemed included in the definition of “facilities” under
Article 97 of the Labor Code, being necessary and indispensable for their existence and subsistence.

HELD:

No, subject allowances did not form part of petitioner’s wages. The Court correlated Art. 283 with Art. 97
of the same Code on definition of terms.  "Pay" is not defined therein but  "wage."  In Songco the Court explained
that both words (as well as salary) generally refer to one and the same meaning, i.e., a reward or recompense for
services performed.  Specifically, "wage" is defined in letter (f) as the remuneration or earnings, however
designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece, or
commission basis, or other method of calculating the same, which is payable by an employer to an employee under
a written or unwritten contract of employment for work done or to be done, or for services rendered or to
be rendered and includes the fair and reasonable value, as determined by theSecretary of Labor, of board, lodging,
or other facilities customarily furnished by the employer to the employee.

The Secretary of Labor and Employment under Sec. 6, Rule VII, Book III, of the Rules Implementing the
Labor Code may from time to time fix in appropriate issuances the "fair and reasonable value of board, lodging and
other facilities customarily furnished by an employer to his employees." Petitioners' allowances do not represent
such fair and reasonable value as determined by the proper authority simply because the Staff/Manager's
allowance and transportation allowance were amounts given by respondent company in lieu of actual provisions
for housing and transportation needs whereas the Bislig allowance was given in consideration of being assigned to
the hostile environment then prevailing in Bislig.
It is the obligation of the employer to pay an illegally dismissed employee the whole amount of his salaries
plus all other benefits, bonuses and general increases to which he would have been normally entitled had he not
been dismissed and had not stopped working. The same holds true in case of retrenched employees.  And thus we
applied Insular and Soriano in Planters in the computation of separation pay of retrenched
employees.  Songco likewise involved retrenchment and was relied upon in Planters, Soriano and Santos  in
determining the proper amount of separation pay.  As culled from the foregoing jurisprudence, separation pay
when awarded to an illegally dismissed employee in lieu of reinstatement or to a retrenched employee should be
computed based not only on the basic salary but also on the regular allowances that the employee had been
receiving.  But in view of the previous discussion that the disputed allowances were not regularly received by
petitioners herein, there was no reason at all for petitioners to resort to the above cases.
Ace Navigation Co. Inc vs NLRC

FACTS:
In June 1994, Ace Navigation Co., Inc. (Ace Nav) recruited private respondent Orlando Alonsagay to
work as a bartender on board the vessel M/V "Orient Express" owned by its principal, Conning Shipping Ltd.
(Conning). Under their POEA approved contract of employment, Orlando shall receive a monthly basic salary
of four hundred fifty U.S. dollars (U.S. $450.00), flat rate, including overtime pay for 12 hours of work daily
plus tips of two U.S. dollars (U.S. $2.00) per passenger per day. He, was also entitled to 2.5 days of vacation
leave with pay each month. The contract was to last for one (1) year.
Petitioners alleged that on June 13, 1994, Orlando was deployed and boarded M/V "Orient Express"
at the seaport of Hong Kong. After the expiration of the contract on June 13, 1995, Orlando returned to the
Philippines and demanded from Ace Nav his vacation leave pay. Ace Nav did not pay him immediately. It told
him that he should have been paid prior to his disembarkation and repatriation to the Philippines. Moreover,
Conning did not remit any amount for his vacation leave pay. Ace Nav, however, promised to verify the
matter and asked Orlando to return after a few days. Orlando never returned.
Private respondent filed a complaint before the labor arbiter for the payment of vacation leave and
the unpaid tips amounting to $36,000. The Labor Arbiter ordered the recruitment agency and the principal to
jointly and severally pay private respondent his vacation leave pay. The claim for unpaid tips was dismissed
for lack of merit. However, NLRC reversed the decision of labor arbiter and ordered for the payment of the
said tips.
ISSUE:
Whether the employers are liable to pay tips.
HELD:
No. Payment for overtime was included in the monthly salary, the supposed tips mentioned in the
contract should be deemed included thereat. It is presumed that the parties were aware of the plain,
ordinary, and common meaning of the word “tip”. A bartender cannot feign ignorance on the practice of
tipping and that tips are normally paid by customers and not by the employer.
It has been said that a tip denotes a voluntary act, but whether considered from the standpoint of
the giver or the recipient, a tip lacked the essential element of a gift, namely, the free bestowing of a gratuity
without a consideration, and that despite its apparent voluntariness, there is an element of compulsion in
tipping.
Songco vs NLRC

FACTS:
Zuellig (M) Inc., filed with the Department of Labor, a clearance to terminate the services of
petitioners Jose Songco, Romeo Cipres and Amancio Manuel due to alleged financial losses. However, the
petitioners argued that the company is not suffering any losses and the real reason for their termination was
their membership in the union. At the last hearing of the case, the petitioner manifested that they no longer
contesting their dismissal, however, they argued that they should be granted a separation pay. Each of the
petitioners was receiving a monthly salary of P40, 000.00 plus commissions for every sale they made. Under
the CBA entered by the Zuellig Inc. and the petitioners, in Article XIV, Section 1(a), 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 month’s
salary per year of service. One month of salary as used in this paragraph shall be deemed equivalent to the
salary at date of retirement; years of service shall be deemed equivalent to total service credits, a fraction of
at leastsix months being considered one year, including probationary employment. Other basis for
petitioners’ contention are Article 284 of the Labor Code with regards to reduction of personnel and Sections
9(b) and 10 of Rule 1, Book VI of the Rules Implementing the Labor Code. The Labor Arbiter rendered his
decision directing the company to pay the complainants separation pay equivalent to their one month salary
(exclusive of commissions, allowances, etc.) for every year of service that they have worked with the
company. The petitioners appealed to the NLRC but it was denied. Petitioner Romeo Cipres filed a Notice of
Voluntary Abandonment and Withdrawal of petition contending that he had received, to his full and
complete satisfaction, his separation pay.
ISSUE:
Whether or not earned sales commissions and allowancesshould be included in the monthly salary
of petitioners for the purpose of computation of their separation pay. 
HELD:
Yes. Petitioners’ contention that in arriving at the correct and legal amount of separation pay due to
them, whether under the Labor Code or the CBA, their basic salary, earned sales commissions
and allowances should be added together. Insofar as whether the allowances should be included in the
monthly salary of petitioners for the purpose of computation of their separation pay is concerned, this has
been settled in the case of Santos vs. NLRC, 76721, in the computation of backwages and separation pay,
account must be taken not only of the basic salary of petitioner but also of her transportation and emergency
livingallowances. In the issue of whether commission should be included in the computation of their
separation pay, it is proper to define first commission. Black’s Law Dictionary defined commission as the
recompensed, compensation or reward of an agent, salesman, executor, trustees, 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 clearly that the commission are part of petitioners’ wage and salary. Some
salesmen do not receive any basic salary but depend on commission and allowances or commissions alone,
are part of petitioners’ wage and salary. Some salesman do not received any basic salary but depend on
commission and allowances or commissions alone, although an employer-employee relationship exist. In
Soriano v. NLRC, it is ruled then that, the commissions also claimed by petitioner (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 petitioner. Applying this by analogy, since the commissions in
the present case were earned by actual market transactions attributable to petitioners, these should be
included in their separation pay. In the computation thereof, what should be taken into account is the
average commissions earned during their last year of employment.