FIRST DIVISION

[G.R. Nos. 50999-51000. March 23, 1990.]

JOSE SONGCO, ROMEO CIPRES, and AMANCIO

MANUEL, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION (FIRST
DIVISION), LABOR ARBITER FLAVIO AGUAS, and F.E. ZUELLIG (M),
INC., respondents.

Raul E. Espinosa for petitioners.

Lucas Emmanuel B. Canilao for petitioner A. Manuel.
Atienza, Tabara, Del Rosario & Castillo for private respondent.

PONENTE: MEDIALDEA, J  : p

This is a petition for certiorari seeking to modify the decision of the National Labor
Relations Commission in NLRC Case No. RB-IV-20840-78-T entitled, "Jose Songco and
Romeo Cipres, Complainants-Appellants, v. F.E. Zuellig (M), Inc., Respondent-Appellee"
and NLRC Case No. RN-IV-20855-78-T entitled, "Amancio Manuel, Complainant-Appellant,
v. F.E. Zuellig (M), Inc., Respondent-Appellee," which dismissed the appeal of petitioners
herein and in effect affirmed the decision of the Labor Arbiter ordering private respondent to
pay petitioners separation pay equivalent to their one month salary (exclusive of
commissions, allowances, etc.) for every year of service.
The antecedent facts are as follows:
Private respondent F.E. Zuellig (M), Inc., (hereinafter referred to as Zuellig) filed with
the Department of Labor (Regional Office No. 4) an application seeking clearance to
terminate the services of petitioners Jose Songco, Romeo Cipres, and Amancio Manuel
(hereinafter referred to as petitioners) allegedly on the ground of retrenchment due to
financial losses. This application was seasonably opposed by petitioners alleging that the
company is not suffering from any losses. They alleged further that they are being dismissed
because of their membership in the union. At the last hearing of the case, however,
petitioners manifested that they are no longer contesting their dismissal. The parties then
agreed that the sole issue to be resolved is the basis of the separation pay due to
petitioners. Petitioners, who were in the sales force of Zuellig received monthly salaries of at
least P400.00. In addition, they received commissions for every sale they made.  LibLex

The Collective Bargaining Agreement entered into between Zuellig and F.E. Zuellig
Employees Association, of which petitioners are members, contains the following provision
(p. 71, Rollo):
"ARTICLE XIV — Retirement Gratuity.
"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 (1) 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 least six
months being considered one year, including probationary employment. (Emphasis
supplied).
On the other hand, Article 284 of the Labor Code then prevailing provides:
"Art. 284. Reduction of personnel. — The termination of employment of any
employee due to the installation of labor saving-devices, redundancy, retrenchment
to prevent losses, and other similar causes, shall entitle the employee affected
thereby to separation pay. In case of termination due to the installation of labor-
saving devices or redundancy, the separation pay shall be equivalent to one (1)
month pay or to at least one (1) month  pay for every year of service, whichever
is higher. In case of retrenchment to prevent losses and other similar causes,
the separation pay shall be equivalent to one (1) month  pay or at least one-half
(1/2) month pay for every year of service, whichever is higher. A fraction of at
least six (6) months shall be considered one (1) whole year." (Emphasis supplied)  llcd

In addition, Sections 9 (b) and 10, Rule 1, Book VI of the Rules Implementing the
Labor Code provide:
xxx xxx xxx
"Sec. 9(b). Where the termination of employment is due to retrenchment
initiated by the employer to prevent losses or other similar causes, or where the
employee suffers from a disease and his continued employment is prohibited by law
or is prejudicial to his health or to the health of his co-employees, the employee
shall be entitled to termination pay equivalent at least to his one
month salary, or to one-half month pay for every year of service, whichever is
higher, a fraction of at least six (6) months being considered as one whole year.
 
xxx xxx xxx
"Sec. 10. Basis of termination pay. — The computation of the termination
pay of an employee as provided herein shall be based on his latest salary rate,
unless the same was reduced by the employer to defeat the intention of the Code, in
which case the basis of computation shall be the rate before its deduction."
(Emphasis supplied)
On June 26, 1978, the Labor Arbiter rendered a decision, the dispositive portion of
which reads (p. 78, Rollo):
"RESPONSIVE TO THE FOREGOING, respondent should be as it is
hereby, ordered 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.
"SO ORDERED."
The appeal by petitioners to the National Labor Relations Commission was
dismissed for lack of merit.
Hence, the present petition.
On June 2, 1980, the Court, acting on the verified "Notice of Voluntary Abandonment
and Withdrawal of Petition" dated April 7, 1980 filed by petitioner Romeo Cipres, based on
the ground that he wants "to abide by the decision appealed from" since he had "received,
to his full and complete satisfaction, his separation pay," resolved to dismiss the petition as
to him.
 The issue is whether or not earned sales commissions and allowances should
be included in the monthly salary of petitioners for the purpose of computation of
their separation pay.
The petition is impressed with merit.
Petitioners' position was that in arriving at the correct and legal amount of separation
pay due them, whether under the Labor Code or the CBA, their basic salary, earned sales
commissions and allowances should be added together. They cited Article 97(f) of the
Labor Code which includes commission as part of one's salary, to wit:  LibLex

"(f) 'Wage' paid to any employee shall mean 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 the Secretary of Labor, of board, lodging, or other facilities customarily
furnished by the employer to the employee. 'Fair and reasonable value' shall not
include any profit to the employer or to any person affiliated with the employer."
Zuellig argues that if it were really the intention of the Labor Code as well as its
implementing rules to include commission in the computation of separation pay, it could
have explicitly said so in clear and unequivocal terms. Furthermore, in the definition of the
term "wage", "commission" is used only as one of the features or designations attached to
the word remuneration or earnings.
Insofar as the issue of whether or not 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 v. NLRC, et al., G.R. No. 76721,
September 21, 1987, 154 SCRA 166, where We ruled that "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 living allowances." This ruling was
reiterated in Soriano v. NLRC, et al., G.R. No. 75510, October 27, 1987, 155 SCRA 124 and
recently, in Planters Products, Inc. v. NLRC, et al., G.R. No. 78524, January 20, 1989.  cdphil

We shall concern ourselves now with the issue of whether or not earned sales
commissions should be included in the monthly salary of petitioners for the purpose
of computation of their separation pay.
Article 97(f) by itself is explicit that commission is included in the definition of the
term "wage". It has been repeatedly declared by the courts that where the law speaks in
clear and categorical language, there is no room for interpretation or construction; there is
only room for application (Cebu Portland Cement Co. v. Municipality of Naga, G.R. Nos.
24116-17, August 22, 1968, 24 SCRA 708; Gonzaga v. Court of Appeals, G.R. No. L-27455,
June 28, 1973, 51 SCRA 381). A plain and unambiguous statute speaks for itself, and any
attempt to make it clearer is vain labor and tends only to obscurity. However, it may be
argued that if We correlate Article 97(f) with Article XIV of the Collective Bargaining
Agreement, Article 284 of the Labor Code and Sections 9(b) and 10 of the Implementing
Rules, there appears to be an ambiguity. In this regard, the Labor Arbiter rationalized his
decision in this manner (pp. 74-76, Rollo):
'The definition of 'wage' provided in Article 96 (sic) of the Code can be
correctly be (sic) stated as a general definition. It is 'wage' in its generic sense. A
careful perusal of the same does not show any indication that commission is part of
salary. We can say that commission by itself may be considered a wage. This is not
 something novel for it cannot be gain said that certain types of employees like
agents, field personnel and salesmen do not earn any regular daily, weekly or
monthly salaries, but rely mainly on commission earned.  LibLex

"Upon the other hand, the provisions of Section 10, Rule I, Book VI of the
implementing rules in conjunction with Articles 273 and 274 (sic) of the Code
specifically states that the basis of the termination pay due to one who is sought to be
legally separated from the service is 'his latest salary rates.'
xxx xxx xxx
"Even Articles 273 and 274 (sic) invariably use 'monthly pay or monthly
salary.'
"The above terms found in those Articles and the particular Rules were
intentionally used to express the intent of the framers of the law that for purposes of
separation pay they mean to be specifically referring to salary only.
". . . . Each particular benefit provided in the Code and other Decrees on
Labor has its own pecularities and nuances and should be interpreted in that light.
Thus, for a specific provision, a specific meaning is attached to simplify matters that
may arise therefrom. The general guidelines in (sic) the formation of specific rules for
particular purpose. Thus, that what should be controlling in matters concerning
termination pay should be the specific provisions of both Book VI of the Code
and the Rules. At any rate, settled is the rule that in matters of conflict between
the general provision of law and that of a particular or specific provision, the
latter should prevail."
On its part, the NLRC ruled (p. 110, Rollo):
"From the aforequoted provisions of the law and the implementing rules, it
could be deduced that wage is used in its generic sense and obviously refers to the
basic wage rate to be ascertained on a time, task, piece or commission basis or other
method of calculating the same. It does not, however, mean that commission,
allowances or analogous income necessarily forms part of the employee's salary
because to do so would lead to anomaleas (sic), if not absurd, construction of the
word "salary." For what will prevent the employee from insisting that emergency living
allowance, 13th month pay, overtime and premium pay, and other fringe benefits
should be added to the computation of their separation pay. This situation, to our
mind, is not the real intent of the Code and its rules."
We rule otherwise. The ambiguity between Article 97(f), which defines the term
'wage' and Article XIV of the Collective Bargaining Agreement, Article 284 of the Labor Code
and Sections 9(b) and 10 of the Implementing Rules, which mention the terms "pay" and
"salary", is more apparent than real. Broadly, the word "salary" means a recompense or
consideration made to a person for his pains or industry in another man's business. Whether
it be derived from "salarium," or more fancifully from "sal," the pay of the Roman soldier, it
carries with it the fundamental idea of compensation for services rendered. Indeed, there is
eminent authority for holding that the words "wages" and "salary" are in essence
synonymous (Words and Phrases, Vol. 38 Permanent Edition, p. 44 citing Hopkins vs.
Cromwell, 85 N.Y.S. 839, 841, 89 App. Div. 481; 38 Am. Jur. 496). "Salary," the etymology
of which is the Latin word "salarium," is often used interchangeably with "wage", the
etymology of which is the Middle English word "wagen". Both words generally refer to one
and the same meaning, that is, a reward or recompense for services performed. Likewise,
"pay" is the synonym of "wages" and "salary" (Black's Law Dictionary, 5th Ed.). Inasmuch as
the words "wages", "pay" and "salary" have the same meaning, and commission is included
in the definition of "wage", the logical conclusion, therefore, is, in the computation of the
 separation pay of petitioners, their salary base should include also their earned sales
commissions.  LibLex

The aforequoted provisions are not the only consideration for deciding the petition in
favor of the petitioners.
We agree with the Solicitor General that granting, in gratia argumenti, that the
commissions were in the form of incentives or encouragement, so that the petitioners would
be inspired to put a little more industry on the jobs particularly assigned to them, still these
commissions are direct remunerations for services rendered which contributed to the
increase of income of Zuellig. Commission is the recompense, 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
(Black's Law Dictionary, 5th Ed., citing Weiner v. Swales, 217 Md. 123, 141 A.2d 749, 750).
The nature of the work of a salesman and the reason for such type of remuneration for
services rendered demonstrate clearly that commissions are part of petitioners' wage or
salary. We take 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 relationship exists. Bearing in mind the preceding discussions, if We
adopt the opposite view that commissions do not form part of 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. Will this not be
absurd? This narrow interpretation is not in accord with the liberal spirit of our 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.  LexLib

Additionally, in Soriano v. NLRC, et al., supra, in resolving the issue of the salary

base that should be used in computing the separation pay, We held 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.
The final consideration is, in carrying out and interpreting the Labor Code's
provisions and its implementing regulations, the workingman's welfare should be the
primordial and paramount consideration. This kind of interpretation gives meaning and
substance to the liberal and compassionate spirit of the law as provided for in Article 4 of the
Labor Code which states that "all doubts in the implementation and interpretation of the
provisions of the Labor Code including its implementing rules and regulations shall be
resolved in favor of labor" (Abella v. NLRC, G.R. No. 71812, July 30, 1987, 152 SCRA
140; Manila Electric Company v. NLRC, et al., G.R. No. 78763, July 12, 1989), and Article
1702 of the Civil Code which provides that "in case of doubt, all labor legislation and all labor
contracts shall be construed in favor of the safety and decent living for the laborer.  LLphil

ACCORDINGLY, the petition is hereby GRANTED. The decision of the respondent

National Labor Relations Commission is MODIFIED by including allowances and
commissions in the separation pay of petitioners Jose Songco and Amancio Manuel. The
case is remanded to the Labor Arbiter for the proper computation of said separation pay.
 SO ORDERED.
Narvasa, Cruz, Gancayco and Griño-Aquino, JJ., concur.
 
 (Songco v. National Labor Relations Commission, G.R. Nos. 50999-51000, [March 23, 1990],
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262 PHIL 667-677)