part 3_2nd part_case nos 52-66

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1. Agencies for Wage Fixing Machinery

a. Advisory Agency- National Wages and Productivity Commission 120, 121 and 126

Chapter V

WAGE STUDIES, WAGE AGREEMENTS AND WAGE DETERMINATION

Art. 120. Creation of National Wages and Productivity Commission.There is hereby created a National Wages and Productivity

Commission, hereinafter referred to as the Commission, which shall be attached to the Department of Labor and Employment

(DOLE) for policy and program coordination. (As amended by Republic Act No. 6727, June 9, 1989).

Art. 121. Powers and functions of the Commission.The Commission shall have the following powers and functions:

1. To act as the national consultative and advisory body to the President of the Philippines and Congress on matters relating to

wages, incomes and productivity;

2. To formulate policies and guidelines on wages, incomes and productivity improvement at the enterprise, industry and

national levels;

3. To prescribe rules and guidelines for the determination of appropriate minimum wage and productivity measures at the

regional, provincial, or industry levels;

4. To review regional wage levels set by the Regional Tripartite Wages and Productivity Boards to determine if these are in

accordance with prescribed guidelines and national development plans;

5. To undertake studies, researches and surveys necessary for the attainment of its functions and objectives, and to collectand compile data and periodically disseminate information on wages and productivity and other related information,

including, but not limited to, employment, cost-of-living, labor costs, investments and returns;

6. To review plans and programs of the Regional Tripartite Wages and Productivity Boards to determine whether these are

consistent with national development plans;

7. To exercise technical and administrative supervision over the Regional Tripartite Wages and Productivity Boards;

8. To call, from time to time, a national tripartite conference of representatives of government, workers and employers for the

consideration of measures to promote wage rationalization and productivity; and

9. To exercise such powers and functions as may be necessary to implement this Act.The Commission shall be composed of the Secretary of Labor and Employment as ex-officio chairman, the Director-General of

the National Economic and Development Authority (NEDA) as ex-officio vice-chairman, and two (2) members each from workers

and employers sectors who shall be appointed by the President of the Philippines upon recommendation of the Secretary of

Labor and Employment to be made on the basis of the list of nominees submitted by the workers and employers sectors,

respectively, and who shall serve for a term of five (5) years. The Executive Director of the Commission shall also be a member of

the Commission.

The Commission shall be assisted by a Secretariat to be headed by an Executive Director and two (2) Deputy Directors, who shall

be appointed by the President of the Philippines, upon the recommendation of the Secretary of Labor and Employment.

The Executive Director shall have the same rank, salary, benefits and other emoluments as that of a Department Assistant

Secretary, while the Deputy Directors shall have the same rank, salary, benefits and other emoluments as that of a Bureau

Director. The members of the Commission representing labor and management shall have the same rank, emoluments,

allowances and other benefits as those prescribed by law for labor and management representatives in the EmployeesCompensation Commission. (As amended by Republic Act No. 6727, June 9, 1989)

x x x x x

Art. 126. Prohibition against injunction.No preliminary or permanent injunction or temporary restraining order may be issued

by any court, tribunal or other entity against any proceedings before the Commission or the Regional Boards. (As amended by

Republic Act No. 6727, June 9, 1989)

b. Wage Fixing Agency-Regional Tripartite Wages and Productivity Board- 122, 126, RA 6727

Art. 122. Creation of Regional Tripartite Wages and Productivity Boards.There is hereby created Regional Tripartite Wages and

Productivity Boards, hereinafter referred to as Regional Boards, in all regions, including autonomous regions as may be

established by law. The Commission shall determine the offices/headquarters of the respective Regional Boards.

The Regional Boards shall have the following powers and functions in their respective territorial jurisdictions:1. To develop plans, programs and projects relative to wages, incomes and productivity improvement for their respective

regions;

2. To determine and fix minimum wage rates applicable in their regions, provinces or industries therein and to issue the

corresponding wage orders, subject to guidelines issued by the Commission;


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3. To undertake studies, researches, and surveys necessary for the attainment of their functions, objectives and programs, and

to collect and compile data on wages, incomes, productivity and other related information and periodically disseminate the

same;

4. To coordinate with the other Regional Boards as may be necessary to attain the policy and intention of this Code;

5. To receive, process and act on applications for exemption from prescribed wage rates as may be provided by law or any

Wage Order; and

6. To exercise such other powers and functions as may be necessary to carry out their mandate under this Code.

Implementation of the plans, programs, and projects of the Regional Boards referred to in the second paragraph, letter (a) of

this Article, shall be through the respective regional offices of the Department of Labor and Employment within their territorial

jurisdiction; Provided, however, That the Regional Boards shall have technical supervision over the regional office of the

Department of Labor and Employment with respect to the implementation of said plans, programs and projects.

Each Regional Board shall be composed of the Regional Director of the Department of Labor and Employment as chairman, the

Regional Directors of the National Economic and Development Authority and the Department of Trade and Industry as vice-

chairmen and two (2) members each from workers and employers sectors who shall be appointed by the President of the

Philippines, upon the recommendation of the Secretary of Labor and Employment, to be made on the basis of the list of

nominees submitted by the workers andemployers sectors, respectively, and who shall serve for a term of five (5) years.

Each Regional Board to be headed by its chairman shall be assisted by a Secretariat. (As amended by Republic Act No. 6727, June

9, 1989)

Art. 126. Prohibition against injunction.No preliminary or permanent injunction or temporary restraining order may be issued

by any court, tribunal or other entity against any proceedings before the Commission or the Regional Boards. (As amended by

Republic Act No. 6727, June 9, 1989)

2. Standards/Criteria for Minimum Wage Fixing- 124; EO 178

Art. 124. Standards/Criteria for minimum wage fixing.The regional minimum wages to be established by the Regional Board

shall be as nearly adequate as is economically feasible to maintain the minimum standards of living necessary for the health,

efficiency and general well-being of the employees within the framework of the national economic and social development

program. In the determination of such regional minimum wages, the Regional Board shall, among other relevant factors,

consider the following:

1. The demand for living wages;

2. Wage adjustment vis--vis the consumer price index;3. The cost of living and changes or increases therein;

4. The needs of workers and their families;

5. The need to induce industries to invest in the countryside;

6. Improvements in standards of living;

7. The prevailing wage levels;

8. Fair return of the capital invested and capacity to pay of employers;

9. Effects on employment generation and family income; and

10. The equitable distribution of income and wealth along the imperatives of economic and social development.

The wages prescribed in accordance with the provisions of this Title shall be the standard prevailing minimum wages in every

region. These wages shall include wages varying with industries, provinces or localities if in the judgment of the Regional Board,

conditions make such local differentiation proper and necessary to effectuate the purpose of this Title.Any person, company, corporation, partnership or any other entity engaged in business shall file and register annually with the

appropriate Regional Board, Commission and the National Statistics Office, an itemized listing of their labor component,

specifying the names of their workers and employees below the managerial level, including learners, apprentices and

disabled/handicapped workers who were hired under the terms prescribed in the employment contracts, and their

corresponding salaries and wages.

Where the application of any prescribed wage increase by virtue of a law or wage order issued by any Regional Board results in

distortions of the wage structure within an establishment, the employer and the union shall negotiate to correct the distortions.

Any dispute arising from wage distortions shall be resolved through the grievance procedure under their collective bargaining

agreement and, if it remains unresolved, through voluntary arbitration. Unless otherwise agreed by the parties in writing, such

dispute shall be decided by the voluntary arbitrators within ten (10) calendar days from the time said dispute was referred to

voluntary arbitration.

In cases where there are no collective agreements or recognized labor unions, the employers and workers shall endeavor to

correct such distortions. Any dispute arising therefrom shall be settled through the National Conciliation and Mediation Board

and, if it remains unresolved after ten (10) calendar days of conciliation, shall be referred to the appropriate branch of the

National Labor Relations Commission (NLRC). It shall be mandatory for the NLRC to conduct continuous hearings and decide the

dispute within twenty (20) calendar days from the time said dispute is submitted for compulsory arbitration.


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The pendency of a dispute arising from a wage distortion shall not in any way delay the applicability of any increase in

prescribed wage rates pursuant to the provisions of law or wage order.

As used herein, a wage distortion shall mean a situation where an increase in prescribed wage rates results in the elimination or

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.

All workers paid by result, including those who are paid on piecework, takay, pakyaw or task basis, shall receive not less than the

prescribed wage rates per eight (8) hours of work a day, or a proportion thereof for working less than eight (8) hours.

All recognized learnership and apprenticeship agreements shall be considered automatically modified insofar as their wage

clauses are concerned to reflect the prescribed wage rates. (As amended by Republic Act No. 6727, June 9, 1989)

52. Metropolitan Bank and Trust Company (Metrobank) vs. NWPC and RTWPB | G.R. No.144322| February 6, 2007

Facts: The Regional Tripartite Wages and Productivity Board, Region II, Tuguegarao, Cagayan (RTWPB), by virtue of R.A. No.

6727, a.k.a. Wage Rationalization Act, issued Wage Order No. R02-03 (Wage Order), as follows: Section 1. Upon effectivity of this

Wage Order, all employees/workers in the private sector throughout Region II, regardless of the status of employment are

granted an across-the-board increase of P15.00 daily.

The Wage Order was published in a newspaper of general circulation on December 2, 1995 and took effect on January 1, 1996.

Its Implementing Rules were approved on February 14, 1996. Per Section 13 of the Wage Order, any party aggrieved by the

Wage Order may file an appeal with the National Wages and Productivity Commission (NWPC) through the RTWPB within 10

calendar days from the publication of the Wage Order.

Bankers Council in a letter inquiry to NWPC requested for ruling to seek exemption from coverage of the wage order since the

members bank are paying more than the regular wage. NWPC replied that the member banks are covered by the wage order

and does not fall with the exemptible categories. In another letter inquiry, Metrobank asked for the interpretation of the

applicability of the wage order. NWPC referred it to RTWPB. RTWPB in return clarified that establishments in Region 2 are

covered by the wage order. Metrobank filed a petition with the CA and denied the petition.

Issue: Whether or not the wage order is void thus it has no legal effect?

Ruling: Section 1, Wage Order No. R02-03 is void insofar as it grants a wage increase to employees earning more than the

minimum wage rate; and pursuant to the separability clause of the Wage Order, Section 1 is declared valid with respect to

employees earning the prevailing minimum wage rate. R.A. No. 6727 created the NWPC which is vested with the power toprescribe rules and guidelines for the determination of appropriate minimum wage and productivity measures at the regional,

provincial or industry levels; and authorized the RTWPB to determine and fix the minimum wage rates applicable in their

respective regions, provinces, or industries therein and issue the corresponding wage orders, subject to the guidelines issued by

the NWPC. Pursuant to its wage fixing authority, the RTWPB may issue wage orders which set the daily minimum wage rates,

based on the standards or criteria set by Article 124 of the Labor Code.

There are two ways of fixing the minimum wage: the "floor-wage" method and the "salary-ceiling" method. The "floor-wage"

method involves the fixing of a determinate amount to be added to the prevailing statutory minimum wage rates. On the other

hand, in the "salary-ceiling" method, the wage adjustment was to be applied to employees receiving a certain denominated

salary ceiling. In other words, workers already being paid more than the existing minimum wage (up to a certain amount stated

in the Wage Order) are also to be given a wage increase. RTWPB did not determine or fix the minimum wage rate by the "floor-

wage method" or the "salary-ceiling method" in issuing the Wage Order. The RTWPB did not set a wage level nor a range towhich a wage adjustment or increase shall be added. Instead, it granted an across-the-board wage increase of P15.00 to all

employees and workers of Region.

3. Wage Distortion

How to resolve wage distortion

53. Prubankers Association vs. Prudential Bank and Trust Company|302 SCRA 74 (1999)

*Same with Case No. 49

Facts: RTWPB Region V issued Wage Order No. RB 05-03 which provided for a Cost of Living Allowance (COLA) to workers in the

private sector who had rendered service for at least three (3) months before its effectivity, and for the same period thereafter,

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.

RTWPB Region VII issued Wage Order No. RB VII-03, which directed the integration of the COLA mandated pursuant to

Wage Order No. RO VII-02-A into the basic pay of all workers. It also established an increase in the minimum wage rates for all

workers and employees in the private sector as follows: by Ten Pesos (P10.00) in the cities of Cebu, Mandaue and Lapulapu; Five

Pesos (P5.00) in the municipalities of Compostela, Liloan, Consolacion, Cordova, Talisay, Minglanilla, Naga and the cities of


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Davao, Toledo, Dumaguete, Bais, Canlaon, and Tagbilaran. The bank granted a COLA of P17.50 to its employees at its Naga

Branch, the only branch covered by Wage Order No. RB 5-03, 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 No. RB VII-

03.

On June 7, 1994, 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. It demanded in the Labor Management Committee meetings that the petitioner 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. As the grievance could not be

settled in the said meetings, the parties agreed to submit the matter to voluntary arbitration.

Issue: Whether or not a wage distortion resulted from respondent's implementation of the Wage Orders.

Held: The court ruled that there is no wage distortion since the wage order implementation covers all the branches of the bank.

The hierarchy of positions was still preserved. The levels of different pay classes was not eliminated. The statutory definition of

wage distortion is found in Article 124 of the Labor Code, as amended by Republic Act No. 6727, which reads: 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 or 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."

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 and (4) The existence of the distortion in the same region of the country. A

disparity in wages between employees holding similar positions but in different regions does not constitute wage distortion as

contemplated by law. As stated, it is the hierarchy of positions and the disparity of their corresponding wages and other

emoluments that are sought to be preserved by the concept of wage distortion.

4. Freedom to bargain: RA 6727, Sec 2; LCP, Art 125

Art. 125. Freedom to bargain.No wage order shall be construed to prevent workers in particular firms or enterprises or

industries from bargaining for higher wages with their respective employers. (As amended by Republic Act No. 6727, June 9,

1989)

5. Penalty for Violation: RA 8188 (Double Indemnity Law), sec 12

REPUBLIC ACT No. 8188

AN ACT INCREASING THE PENALTY AND IMPOSING DOUBLE INDEMNITY FOR VIOLATION OF THE PRESCRIBED INCREASES OR

ADJUSTMENTS IN THE WAGE RATES. AMENDING FOR THE PURPOSE SECTION TWELVE OF REPUBLIC ACT NUMBERED SIXTY-

SEVEN HUNDRED TWENTY-SEVEN. OTHERWISE KNOWN AS THE WAGE RATIONALIZATION ACT.

Be it enacted by the Senate and House of Representatives of the Philippines in the Congress assembled :

SECTION 1.Section 12 of Republic Act Numbered Sixty-seven hundred twenty- seven is hereby amended to read to as follows:

SEC 12 Any person, corporation, trust, firm, partnership, association or entity which refuses or fails to pay any of the

prescribed increases or adjustments in the wage rales made in accordance with this Act shall be punished by a fine not less thanTwenty-five thousand pesos (P25.000) nor more than One hundred thousand pesos (P100.000) or imprisonment of not less than

two (2) years nor more than four (4) years or both such fine and imprisonment at the discretion of the court:

Provided. That any person convicted under this Act shall not be entitled to the benefits provided for under the Probation Law.

The employer concerned shall be ordered to pay an arnount equivalent to double the unpaid benefits owing to the

employees:Provided.That payment of indemnity shall not absolve the employer from the criminal liability imposable under this

Act.

"If the violation is committed by a corporation. trust or firm. partnership, association or any other entity, the penalty of

imprisonment shall be imposed upon the entity's responsible officers including but not limited to the president, vicepresident,

chief executive officer, general manager, managing director or partner.

SECTION 2. All laws, presidential decrees, executive orders, rules and regulations or parts thereof inconsistent with the

provisions of this Act are hereby repealed or modified accordingly.

SECTION 3. This Act shall take effect fifteen (15) days after its complete publication in a newspaper of general circulation.

Approved.


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6. Wage Order-123

Art. 123. Wage Order.Whenever conditions in the region so warrant, the Regional Board shall investigate and study all

pertinent facts; and based on the standards and criteria herein prescribed, shall proceed to determine whether a Wage Order

should be issued. Any such Wage Order shall take effect after fifteen (15) days from its complete publication in at least one (1)

newspaper of general circulation in the region.

In the performance of its wage-determining functions, the Regional Board shall conduct public hearings/consultations, giving

notices to employees and employers groups, provincial, city and municipal officials and other interested parties.

Any party aggrieved by the Wage Order issued by the Regional Board may appeal such order to the Commission within ten (10)

calendar days from the publication of such order. It shall be mandatory for the Commission to decide such appeal within sixty

(60) calendar days from the filing thereof.

The filing of the appeal does not stay the order unless the person appealing such order shall file with the Commission, an

undertaking with a surety or sureties satisfactory to the Commission for the payment to the employees affected by the order of

the corresponding increase, in the event such order is affirmed. (As amended by Republic Act No. 6727, June 9, 1989)

I. Wages and Protective measures

1. Wages and Salary- 97 (f)

Article 97 (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 and Employment, of board, lodging, or other facilitiescustomarily 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.

54. Rosario Gaa vs. COURT OF APPEALS| [140 SCRA 304]

Facts:It appears that Europhil Industries Corporation (Europhil) was formerly one of the tenants in Trinity Building at T.M. Kalaw

Street, Manila, while Rosario A. Gaa was then the building administrator. Europhil commenced an action (in the Court of First

Instance of Manila for damages against Gaa for having perpetrated certain acts that Europhil considered a trespass upon its

rights, namely, cutting of its electricity, and removing its name from the building directory and gate passes of its officials and

employees". Said court rendered judgment in favor of Europhil, ordering Gaa to pay the damages and costs. A writ of

garnishment was issued pursuant to which Deputy Sheriff Cesar A. Roxas served a Notice of Garnishment upon El Grande Hotel,

where Gaa was then employed, garnishing her "salary, commission and/or remuneration." Gaa then filed with the Court of First

Instance of Manila a motion to lift said garnishment on the ground that her "salaries, commission and or remuneration" areexempted from execution under Article 1708 of the New Civil Code. Said motion was denied by the lower Court.

Court of Appeals dismissed the petition and held that Gaa is not a mere laborer as contemplated under Article 1708 as the term

laborer does not apply to one who holds a managerial or supervisory position like that of Gaa, but only to those laborers

occupying the lower strata.

Issue:Whether or not the Gaa is covered by Article 1708 of the New Civil Code?

Held: The Court ruled that Gaa is not covered by Article 1708 since she does not fall within the criteria of laborer. Said article

provides that, The laborer's wage shall not be subject to execution or attachment, except for debts incurred for food, shelter,

clothing and medical attendance."It is beyond dispute that petitioner is not an ordinary or rank and file laborer but a

responsibly place employee, of El Grande Hotel, responsible for planning, directing, controlling, and coordinating the activities of

all housekeeping personnel so as to ensure the cleanliness, maintenance and orderliness of all guest rooms, function rooms,public areas, and the surroundings of the hotel. Considering the importance of Gaa's function in El Grande Hotel, it is undeniable

that he is occupying a position equivalent to that of a managerial or supervisory position.

The legislature does not intended the exemption in Article 1708 of the New Civil Code to operate in favor of any but

those who are laboring men or women in the sense that their work is manual. Persons belonging to this class usually look to the

reward of a day's labor for immediate or present support, and such persons are more in need of the exemption than any others.

Petitioner is definitely not within that class.

2. Wage Payment and Protection102 to 105, 1705 of NCC, RA 6727 (Sec 7)

Chapter III

PAYMENT OF WAGES

Art. 102. Forms of payment.No employer shall pay the wages of an employee by means of promissory notes, vouchers,

coupons, tokens, tickets, chits, or any object other than legal tender, even when expressly requested by the employee.


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Payment of wages by check or money order shall be allowed when such manner of payment is customary on the date of

effectivity of this Code, or is necessary because of special circumstances as specified in appropriate regulations to be issued by

the Secretary of Labor and Employment or as stipulated in a collective bargaining agreement.

Art. 103. Time of payment.Wages shall be paid at least once every two (2) weeks or twice a month at intervals not exceeding

sixteen (16) days. If on account of force majeure or circumstances beyond the employers control, payment of wages on or

within the time herein provided cannot be made, the employer shall pay the wages immediately after such force majeure or

circumstances have ceased. No employer shall make payment with less frequency than once a month.

The payment of wages of employees engaged to perform a task which cannot be completed in two (2) weeks shall be subject to

the following conditions, in the absence of a collective bargaining agreement or arbitration award:

1. That payments are made at intervals not exceeding sixteen (16) days, in proportion to the amount of work completed;

2. That final settlement is made upon completion of the work.

Art. 104. Place of payment.Payment of wages shall be made at or near the place of undertaking, except as otherwise provided

by such regulations as the Secretary of Labor and Employment may prescribe under conditions to ensure greater protection of

wages.

Art. 105. Direct payment of wages.Wages shall be paid directly to the workers to whom they are due, except:1. In cases of force majeure rendering such payment impossible or under other special circumstances to be determined by the

Secretary of Labor and Employment in appropriate regulations, in which case, the worker may be paid through another

person under written authority given by the worker for the purpose; or

2. Where the worker has died, in which case, the employer may pay the wages of the deceased worker to the heirs of the

latter without the necessity of intestate proceedings. The claimants, if they are all of age, shall execute an affidavit attesting

to their relationship to the deceased and the fact that they are his heirs, to the exclusion of all other persons. If any of the

heirs is a minor, the affidavit shall be executed on his behalf by his natural guardian or next-of-kin. The affidavit shall be

presented to the employer who shall make payment through the Secretary of Labor and Employment or his representative.

The representative of the Secretary of Labor and Employment shall act as referee in dividing the amount paid among the

heirs. The payment of wages under this Article shall absolve the employer of any further liability with respect to the amountpaid.

NCC, Art. 1705. The laborer's wages shall be paid in legal currency.

RA 6727, Section 7.Upon written permission of the majority of the employees or workers concerned, all private establishments,

companies, businesses, and other entities with twenty five (25) or more employees and located within one (1) kilometer radius

to a commercial, savings or rural bank shall pay the wages and other benefits of their employees through any of said banks and

within the period of payment of wages fixed by Presidential Decree No. 442, as amended, otherwise known as the Labor Code of

the Philippines.

Form, time, place and recipient of payment: 102-105, Art 1705 of NCC, Rule VIII, Book III, Secs 1-2

.

55.LMG Chemicals Corporation v. Sec. of the DOLE (April 17, 2001)

FACTS: LMG has three divisions and there are two unions within one of the divisions. One union represents the daily paid

employees and the other union represents the monthly paid employees. Chemical Workers Union, respondent, a duly registered

labor organization acts as the collective bargaining agent of all the daily paid employees of petitionersInorganic Division.

Negotiations for a new CBA took place as the old CBA was about to expire. They were able to agree on the political provisions of

the new CBA, but no agreement was reached on the issue of wage increase and economic issues were also not settled so with

the negotiations at a deadlock. The union filed a Notice of Strike with the NCMB and despite several conferences and efforts of

the conciliator-mediator, the parties failed to reach an amicable settlement so the union staged a strike. In an attempt to end

the strike early, petitioner made an improved offer. Another conciliation meeting was held and petitioner reiterated its

improved offer but the union rejected it. The Secretary of Labor found the labor disputeimpressed with national interest and

assumed jurisdiction. Then petitioner stated that it could no longer afford to grant its previous offer due to serous losses of the

division so they made a lower offer. The union claims it has a positive performance in terms of income. The Secretary ordered

the company to increase the wages but all other economic demands of the union were rejected. Also since the new CBA
http://cofferette.blogspot.com/2009/01/lmg-chemicals-corporation-v-sec-of-dole.htmlhttp://cofferette.blogspot.com/2009/01/lmg-chemicals-corporation-v-sec-of-dole.html


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wasntsigned within 6 months after the old one expired and the parties could not agree as to the retroactivity, the Secretary

fixed the date of retroactivity.

ISSUE: W/N the company should be made to pay increased wages despite losses and whether or not the Secretary of Labor

could fix the date of effectivity.

HELD: The SC ruled that the wage increases were justified. It is the income from all sources that determine financial condition. A

particular division may have lost money, but other divisions may make up for it so there will be net income as a whole. Also, the

company granted an increase to its supervisory employees so its unfair to deny a wage increase to the rank and file workers.

On the second ground, the SC ruled that the Secretarys authority to assume jurisdiction carries with its the power to determine

the retroactivity of the CBA. The authority of the Secretary to assume jurisdiction over a labor dispute includes and extends to all

questions and controversies arising there from. The power is plenary and discretionary in nature for an effective and efficient

disposal of the primary dispute. To deprive the Secretary of such power and discretion runs counter to the well-established rule

that all doubts in the interpretation of labor laws be resolved in favor of labor. The SC is only giving meaning to this rule as the

labor authorities should be helped in providing workers immediate benefits, without being hampered

by arbitration or litigation processes that prove to be nerve-wracking and financially burdensome.

56. Special Steel Products vs. Lutgardo Villareal & Frederick So

[G.R. No.143304. July 8, 2004]Facts:

Special Steel Products, Inc., is a domestic corporation engaged in the principal business of importation, sale, and marketing of

BOHLER steel products. Respondents worked for petitioner as assistant manager and salesman. Villareal obtained a car loan

from Bank of Commerce with petitioner as surety wherein they are jointly and severally agreed to pay the bank in installment

basis. In January 1997, Villareal resigned and joined Hi-Grade Industrial and Technical Products as Executive vice-president.

Respondent So was sponsored by petitioner to attend a training course in Kapfenberg, Austria conducted by BOHLER. It

rewarded Sos outstanding sales performance. When So returned, the petitioner asked respondent So to sign a memorandum to

work for the company for three years. After 2 years and 4 months, So resigned from the company. Petitioner ordered

respondents an accounting of the various Christmas giveaways they received. In return, respondents also demanded payment of

their separation benefits, commissions, monetary benefits but petitioner refused and withheld the 13 thmonth pay and other

benefits.

Issue:Whether or not the employer can withhold its employees wages and benefits as lien to protect its interest as surety in

the car loan and for expenses in the training abroad.

Held:The employer cannot withhold respondents 13thmonth pay and other monetary benefits.

Article 116 of the Labor Code, as amended, provides:

Withholding of wages and kickbacks prohibited.It shall be unlawful for any person, directly or indirectly, to withhold any

amount from the wages (and benefits) of a workeror induce him to give up any part of his wages by force, stealth,

intimidation, threat or by any other means whatsoever without the workers consent.

The above provision is clear and needs no further elucidation. Indeed, petitioner has no legal authority to withhold respondents

13th

month pay and other benefits. What an employee has worked for, his employer must pay. Thus, an employer cannot simplyrefuse to pay the wages or benefits of its employee because he has either defaulted in paying a loan guaranteed by his

employer; or violated their memorandum of agreement; or failed to render an accounting of his employers property.

57. MAYON HOTEL & RESTAURANTvs. ROLANDO ADANA, et al.| G.R. No. 157634| May 16, 2005

FACTS:Petitioner Mayon Hotel & Restaurant (MHR) hired herein 16 respondents as employees in its business in Legaspi City. Its

operation was suspended on March 31, 1997 due to the expiration and non-renewal of the lease contract for the space it

rented. While waiting for the completion of the construction of its new site, MHR continued its operation in another site with 9

of the 16 employees. When the new site constructed and MHR resumed its business operation, none of the 16 employees was

recalled to work.

MHR alleged business losses as the reason for not reinstating the respondents. On various dates, respondents filed complaints

for underpayment of wages, money claims and illegal dismissal.

ISSUE: Whether or not respondents are entitled to their money claims due to underpayment of wages, and nonpayment of

holiday pay, rest day premium, SILP, COLA, overtime pay, and night shift differential pay.


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HELD:Yes, they are entitled to money claims. The cost of meals and snacks purportedly provided to respondents cannot be

deducted as part of respondents minimum wage. Even granting that meals and snacks were provided and indeed constituted

facilities, such facilities could not be deducted without compliance with certain legal requirements. The employer simply cannot

deduct the value from the employees wages without satisfying the following:

1. proof that such facilities are customarily furnished by the trade;

2. the provision of deductible facilities is voluntarily accepted in writing by the employee; and

3. the facilities are charged at fair and reasonable value.

The law is clear that mere availment is not sufficient to allow deductions from employees wages. As for petitioners

repeated invocation of serious business losses, suffice to say that this is not a defense to payment of labor standard

benefits. The employer cannot exempt himself from liability to pay minimum wages because of poor financial condition of

the company. The payment of minimum wages is not dependent on the employers ability to pay.

Employee has the right to personally receive his wages EXCEPTION: Home Allotment Under PEOA Memorandum Circular No.

55, Series of 1996, Sec 8

58. SKIPPERS UNITED PACIFIC, INC. vs DOZA| G.R. No. 175558| February 8, 2012

FACTS: This arose from consolidated labor case against local manning agency Skippers United Pacific, Inc. and its foreign

principal, Skippers Maritime Services, Inc., Ltd. (Skippers) for unremitted home allotment, salaries for the unexpired portion of

their employment contracts, moral damages, exemplary damages, and attorneys fees.No award was given to Doza for lack of

factual basis. Hence, this Petition.

Paragraph 2 of all the employment contracts stated that: The terms and conditionsof the Revised Employment Contract

Governing the Employment of All Seafarers approved per Department Order No. 33 and Memorandum Circular No. 55, both

series of 1996 shall be strictly and faithfully observed.No employment contract was submitted for Nathaniel Doza.

Claims against Skippers were filed and it admitted non-payment of home allotment for the month of December 1998, but

prayed for the offsetting of such amount with the repatriation expenses.

ISSUE: Whether nor not Skippers isliable to pay unremitted home allotment pay notwithstanding the baseless claims?

HELD: It depends. Skippers can seek the repatriation expenses to be offset with the home allotment pay if there was a legal

dismissal. However, if the dismissal was illegal, repatriation expenses were for the account of Skippers and could not be offset

with the home allotment pay. Contrary to the claim of the Labor Arbiter and NLRC that the home allotment pay is in the natureof extraordinary money where the burden of proof is shifted to the worker who must prove he is entitled to such monetary

benefit,Section 8 of POEA Memorandum Circular No. 55, series of 1996, states that the allotment actually constitutes at least

eighty percent (80%) of the seafarers salary:

The seafarer is required to make an allotment which is payable once a month to his designated allottee in the

Philippines through any authorized Philippine bank. The master/employer/agency shall provide the seafarer with

facilities to do so at no expense to the seafarer. The allotment shall be at least eighty percent (80%) of the seafarers

monthly basic salary including backwages, if any.

Since said memorandum states that home allotment of seafarers actually constitutes at least eighty percent (80%) of their

salary, home allotment pay is not in the nature of an extraordinary money or benefit, but should actually be considered as salary

which should be paid for services rendered. For this reason, such non-remittance of home allotment pay should be consideredas unpaid salaries, and Skippers shall be liable to pay the home allotment pay.

3. LIABILITY FOR WAGES

1. Articles 105-111

Art. 105. Direct payment of wages.Wages shall be paid directly to the workers to whom they are due, except:

1. In cases of force majeure rendering such payment impossible or under other special circumstances to be

determined by the Secretary of Labor and Employment in appropriate regulations, in which case, the worker

may be paid through another person under written authority given by the worker for the purpose; or

2. Where the worker has died, in which case, the employer may pay the wages of the deceased worker to the

heirs of the latter without the necessity of intestate proceedings. The claimants, if they are all of age, shall

execute an affidavit attesting to their relationship to the deceased and the fact that they are his heirs, to the

exclusion of all other persons. If any of the heirs is a minor, the affidavit shall be executed on his behalf by his

natural guardian or next-of-kin. The affidavit shall be presented to the employer who shall make payment

through the Secretary of Labor and Employment or his representative. The representative of the Secretary of


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Labor and Employment shall act as referee in dividing the amount paid among the heirs. The payment of

wages under this Article shall absolve the employer of any further liability with respect to the amount paid.

Art. 106. Contractor or subcontractor.Whenever an employer enters into a contract with another person for the

performance of the formers work, the employees of the contractor and of the latters subcontractor, if any, shall

be paid in accordance with the provisions of this Code.

In the event that the contractor or subcontractor fails to pay the wages of his employees in accordance with this

Code, the employer shall be jointly and severally liable with his contractor or subcontractor to such employees to

the extent of the work performed under the contract, in the same manner and extent that he is liable to employees

directly employed by him.

The Secretary of Labor and Employment may, by appropriate regulations, restrict or prohibit the contracting-out of

labor to protect the rights of workers established under this Code. In so prohibiting or restricting, he may make

appropriate distinctions between labor-only contracting and job contracting as well as differentiations within these

types of contracting and determine who among the parties involved shall be considered the employer for purposes

of this Code, to prevent any violation or circumvention of any provision of this Code.

There is "labor-only" contracting where the person supplying workers to an employer does not have substantial

capital or investment in the form of tools, equipment, machineries, work premises, among others, and the workers

recruited and placed by such person are performing activities which are directly related to the principal business of

such employer. In such cases, the person or intermediary shall be considered merely as an agent of the employer

who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by

him.

Art. 107. Indirect employer.The provisions of the immediately preceding article shall likewise apply to any person,

partnership, association or corporation which, not being an employer, contracts with an independent contractor

for the performance of any work, task, job or project.

Art. 108. Posting of bond.An employer or indirect employer may require the contractor or subcontractor to

furnish a bond equal to the cost of labor under contract, on condition that the bond will answer for the wages due

the employees should the contractor or subcontractor, as the case may be, fail to pay the same.

Art. 109. Solidary liability.The provisions of existing laws to the contrary notwithstanding, every employer or

indirect employer shall be held responsible with his contractor or subcontractor for any violation of any provision

of this Code. For purposes of determining the extent of their civil liability under this Chapter, they shall be

considered as direct employers.

Art. 110. Worker preference in case of bankruptcy.In the event of bankruptcy or liquidation of an employers

business, his workers shall enjoy first preference as regards their wages and other monetary claims, any provisions

of law to the contrary notwithstanding. Such unpaid wages and monetary claims shall be paid in full before claims

of the government and other creditors may be paid. (As amended by Section 1, Republic Act No. 6715, March 21,

1989)

Art. 111. Attorneysfees.

1. In cases of unlawful withholding of wages, the culpable party may be assessed attorneys fees equivalent to

ten percent of the amount of wages recovered.

2. It shall be unlawful for any person to demand or accept, in any judicial or administrative proceedings for the

recovery of wages, attorneys fees which exceed ten percent of the amount of wages recovered.

2. Book III, Rule VIII, Sections 7 to 11 of the Omnibus Implementing Rules

59. Development Bank of the Philippines ("DBP") vs NLRC| G.R. No. 86227| January 19, 1994

FACTS: DBP seeks the reversal of the decision of the NLRC, which holds DBP, along with Atlas Textile Development Corporation

("ATLAS"), a textile firm which hypothecated its certain assets to DBP, liable to the employees of ATLAS for wage differentials,

"illegal" salary deductions, separation pay, and similar money claims. Nevertheless, ATLAS is involved because it defaulted in its

obligations with DBP, which made DBP to foreclose the mortgage and acquired the mortgaged assets by virtue of the

foreclosure sale.

ISSUE: Whether or not is valid to consider the workers' preference under Article 110 of the Labor Code over that of DBP's

mortgage lien?


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HELD: Article 110 of the Labor Code does not purport to create a lien in favor of workers or employees for unpaid wages either

upon all of the properties or upon any particular property owned by their employer. Claims for unpaid wages does not therefore

fall at all within the category of specially preferred claims established under Articles 2241 and 2242 of the Civil Code, except to

the extent that such claims for unpaid wages are already covered by Article 2241, number 6 : "claims for laborers' wages, on the

goods manufactured or the work done;" or by Article 2242, number 3: "claims of laborers and other workers engaged in the

construction, reconstruction or repair of buildings, canals and other works upon said buildings, canals or other works."

To the extent that claims for unpaid wages fall outside the scope of Article 2241, number 6 and 2242, number 3, they would

come within the ambit of the category of ordinary preferred credits under Article 2244. Applying Article 2241, number 6 to the

instant case, the claims of the Unions for separation pay of their members constitute liens attaching to the processed leaf

tobacco, cigars and cigarettes and other products produced or manufactured by Insolvent, but not to other assets owned by the

Insolvent. And even in respect of such tobacco and tobacco products produced by Insolvent, the claims of the Unions may be

given effect only after the Bureau of Internal Revenue's claim for unpaid tobacco inspection fees shall have been satisfied out of

the products so manufactured by the Insolvent.

Article 110 of the Labor Code was later amended by Republic Act No. 6715 expands worker preference to cover not only unpaid

wages but also other monetary claims to which even claims of the Government must be deemed subordinate. Also, Article 110

of the Labor Code, as amended, must be viewed and read in conjunction with the provisions of the Civil Code on concurrence

and preferences of credits. The amendatory provisions of Republic Act 6715, which took effect on 21 March 1989, should only

be given prospective application.

60. Development Bank of the Philippines ("DBP") vs NLRC| G.R. No. 108031| March 1, 1995

FACTS: Leonor A. Ang started employment as Executive Secretary with Tropical Philippines Wood Industries, Inc. (TPWII), a

corporation engaged in the manufacture and sale of veneer, plywood and sawdust panel boards. She was promoted to the

position of Personnel Officer. Development Bank of the Philippines, as mortgagee of TPWII, foreclosed its plant facilities and

equipment. Nevertheless TPWII continued its business operations interrupted only by brief shutdowns for the purpose of

servicing its plant facilities and equipment. Later, DBP took possession of the foreclosed properties. From then on the company

ceased its operations. As a consequence, Ang was verbally terminated from the service. Hence, she filed a complaint for

separation pay, 13th month pay, vacation and sick leave pay, salaries and allowances. against TPWII, its General Manager, and

petitioner.

Labor Arbiter found TPWII primarily liable to private respondent but only for her separation pay and vacation and sick leave pay

because her claims for unpaid wages and 13th month pay were later paid after the complaint was filed. 1The General Managerwas absolved of any liability. But with respect to DBP, it was held subsidiarily liable in the event the company failed to satisfy the

judgment. The Labor Arbiter rationalized that the right of an employee to be paid benefits due him from the properties of his

employer is superior to the right of the latter's mortgage notwithstanding the absence of any formal declaration of bankruptcy

or judicial liquidation of TPWII.

ISSUE: Whether or not the declaration of bankruptcy or judicial liquidation is required before the worker's preference may be

invoked under Article 110 of the Labor Code?

HELD: Yes. Art. 110 should not be treated apart from other laws but applied in conjunction with the pertinent provisions of the

Civil Code and the Insolvency Law to the extent that piece-meal distribution of the assets of the debtor is avoided. Art. 110, then

prevailing, provides:

Art. 110. Worker preference in case of bankruptcy. In the event of bankruptcy or liquidation of anemployer's business, his workers shall enjoy first preference as regards wages due them for services rendered

during the period prior to the bankruptcy or liquidation, any provision to the contrary notwithstanding. Unpaid

wages shall be paid in full before other creditors may establish any claim to a share in the assets of the

employer.

Complementing Art. 110, Sec. 10, Rule VIII, Book III, of the Revised Rules and Regulations Implementing the Labor Code

provides:

Sec. 10. Payment of wages in case of bankruptcy. Unpaid wages earned by the employees before the

declaration of bankruptcy or judicial liquidation of the employer's business shall be given first preference and

shall be paid in full before other creditors may establish any claim to a share in the assets of the employer.

Thus, . . . a declaration of bankruptcy or a judicial liquidation must be present before the worker's preference may be enforced.

The rationale is that to hold Art. 110 to be applicable also to extrajudicial proceedings would be putting the worker in a better

position than the State which could only assert its own prior preference in case of a judicial proceeding. Further, having no

declaration of bankruptcy or judicial liquidation of TPWII, it would be premature to enforce the worker's preference.


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61. COMMANDO SECURITY AGENCY V. NLRC| G.R. No. 95844| July 20, 1992

FACTS: Nemesio Decierdo was a security guard of Commando Security Agency (Commando).It entered into a contract to

provide guarding services to the Alsons Development and Investment Corporation (ALSONS) for a period of one year, unless

renewed under such terms and conditions as may be mutually acceptable. The number of guards to be assigned by the

Commando would depend on ALSON's demand. Decierdo was one of the guards assigned.

Maria Mila D. Samonte, Properties Administration Head of ALSONS, requested the Commando for a "periodic reshuffling" of

guards. Decierdo was assigned to the Pacific Oil Company in Bunawan, Davao City, but he 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.

Labor Arbiter rendered a decision ordering Commando to pay complainant Decierdo for his salary, holiday and rest day pay

differentials, 13th month pay differentials and service incentive leave pay and dismissing the complaint for illegal dismissal,

unfair labor practice, overtime pay and night premium for lack of merit. NLRC AFFIRMED the decision.

ISSUE: Whether or not Commando can deduct 25% share of Decierdosmonthly salary as agreed between them?

HELD: Commandoscontention 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 beever 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.

4. Wage Prohibition-Consti. Article III, Sec 1 (right to wage is a property right); LCP Article 112-117; 1708 of the

NCC; Rule VII, Book III, Section 13

a. Non-deductability: LCP, Article 113

62. APODACA vs. NLRC| G.R. No. 80039| April 18, 1989

FACTS:

Apocada was employed in Intrans Phils, Inc. He was persuaded by Mirasol to subscribe to 1,500 shares (P150,000.00). He paid

P37,500.00. He was appointed as President and General Manager of the corporation. Later, he instituted with the NLRC a

complaint against Mirasol and the corporation for the payment of his unpaid wages, his cost of living allowance, the balance of

his gasoline and representation expenses and his bonus compensation. The corporation admitted that there is due to Apocada

the amount of P17,060.07 but this was applied to the unpaid balance of his subscription in the amount of P95,439.93. Apocada

questioned the set-off alleging that there was no call or notice for the payment of the unpaid subscription and that, accordingly,

the alleged obligation is not enforceable.

ISSUES:

(1) Whether or not NLRC has jurisdiction to resolve a claim for non-payment of stock subscriptions to a corporation?

(2) If so, whether or not an obligation arising therefrom can be offset against a money claim of an employee against the

employer?

HELD:

(1) NLRC has no jurisdiction to determine such intra-corporate dispute between the stockholder and the corporation

as in the matter of unpaid subscriptions. This controversy is within the exclusive jurisdiction of the Securities and Exchange

Commission (SEC).

(2) No. the unpaid subscriptions are not due and payable until a call is made by the corporation for payment. Private

respondents have not presented a resolution of the board of directors of respondent corporation calling for the payment of the

unpaid subscriptions. It does not even appear that a notice of such call has been sent to petitioner by the respondent

corporation. As there was no notice or call for the payment of unpaid subscriptions, the same is not yet due and payable. Even if

there was a call for payment, the NLRC cannot validly set it off against the wages and other benefits due petitioner. Article 113

of the Labor Code allows such a deduction from the wages of the employees by the employer, only in three instances.


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63. GENESIS TRANSPORT SERVICE INC, ET AL vs UNYON NG MALAYANG MANGGAGAWA NG GENESIS TRANSPORT, ET AL

GR 182114 April 05, 2010

FACTS:

ISSUE:

HELD:

b. Allowable deductions: LCP, Article 111 in relation to Art. 241 (o); Art. 258 (e) last sentence (agency fees)NOTE: PAO LAW 10% attorneys fees allowed.

Art. 111. Attorneysfees.

1. In cases of unlawful withholding of wages, the culpable party may be assessed attorneys fees equivalent

to ten percent of the amount of wages recovered.

2. It shall be unlawful for any person to demand or accept, in any judicial or administrative proceedings for

the recovery of wages, attorneys fees which exceed ten percent of the amount of wages recovered.

c. No deposits for loss or damage; LCP Art 114-115

64.DENTECH MANUFACTURING CORPORATION VS NLRC| G.R. No. 81477 April 19, 1989

FACTS: Dentech Manufacturing Corporation (Dentech) is a domestic corporation organized under Philippine laws. Before thefirm became a corporate entity, it was known as the J.L. Ledesma Enterprises, a sole proprietorship owned by Jacinto Ledesma.

At present, he is the president and general manager of the corporation as well as the owner of the controlling interest thereof.

The firm is engaged in the manufacture and sale of dental equipment and supplies.

Benjamin Marbella, Armando Torno, Juanito Tajan, Jr. and Joel Torno are members of the Confederation of Citizens Labor Union,

a labor organization registered with the Department of Labor and Employment. They used to be the employees of the petitioner

firm, working therein as welders, upholsterers and painters. They were already employed with the company when it was still a

sole proprietorship. They were dismissed from the firm. So, they filed a Complaint for illegal dismissal and violation of

Presidential Decree No. 851.

They seek the refund of the cash bond they filed with the company at the start of their employment. Dentech, however, aver

that the refund of the cash bond filed is improper inasmuch as the proceeds of the same had already been given to acertain carinderia to pay for the outstanding accounts of the employees.

ISSUE: Whether or not the employees of Dentech seek the refund of the cash bond they filed with the company at the start of

their employment?

HELD:The refund of the cash bond filed by the employees is in order. Such cash bond required is disallowed under Article 114 of

the Labor Code which prohibits an employer from requiting his employees to file a cash bond or to make deposits, subject to

certain exceptions, to wit-

Art. 114. 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 wherethe practice of making deductions or requiring deposits is a recognized one, or is necessary or desirable as

determined by the Secretary of Labor in appropriate rules and regulations.

Clearly, Dentech failed to show that the company is authorized by law to require the private respondents to file the cash bond in

question, the refund thereof is in order. The allegation of Dentech to the effect that the proceeds of the cash bond had already

been given to a certain carinderia to pay for the accounts of the employees does not merit serious consideration. As correctly

observed by the Solicitor General, no evidence or receipt has been shown to prove such payment.

65. Five J Taxi and/or Juan Armamiento vs. NLRC| 235 SCRA 556

Facts: Domingo Maldigan and Gilberto Sabsalon were hired by the Five J Taxi 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 Five J Taxi, he already failed to report for work for

unknown reasons. Five J Taxi learned that he was working for Mine of Gold Taxi Company. With respect to Sabsalon, while


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driving a taxicab of Five J Taxi on September 1983, 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 this home province to recuperate.

Sabsalon was re-admitted by Five J Taxi 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 where 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 Five J Taxi for him to report for

work, he adamantly refused. Afterwards it was revealed that he was driving a taxi for Bulaklak Company.

Maldigan requested Five J Taxi for the reimbursement of his daily cash deposits for 2 years, but herein Five J Taxi 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 Five J Taxi to recoup the expenses incurred in the repair of their

taxicab units. When Maldigan insisted on the refund of his deposit, Five J Taxi 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. Hence, they filed a complaint with against Five J Taxi with illegal dismissal and illegal deductions.

Issue: Whether or not the deductions made were illegal and if illegal, considered a prohibition regarding wages?

Ruling:The Court declares that the deposits made amounts to the prohibition provided by law. The deposits made were illegal

and the respondents must be refunded.

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 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.

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 restorethe unit he has given to the same clean condition when he took it out, and as claimed by the respondents (Five J Taxi in the

present case), complainant(s) (private respondents herein) 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."

Consequently, private respondents are not entitled to the refund of the P20.00 car wash payments they made. It will be noted

that there was nothing to prevent private respondents from cleaning the taxi units themselves, if they wanted to save their

P20.00. Also, as the Solicitor General correctly noted, car washing after a tour of duty is a practice in the taxi industry, and is, in

fact, dictated by fair play.

d. Whistleblower protection/false reporting/prohibited acts: LCP Arts. 118-119

66. Alert Security and Investigation Agency, Inc., et al. vs. Saidali Pasawilan, et al.,G.R. No. 182397. September 14, 2011.

FACTS: Saidali Pasawilan, Wilfredo Verceles and Melchor Bulusan were all employed by Alert Security and Investigation Agency,

Inc. (Alert Security) as security guards. They were paid 165.00 pesos a day as regular employees, and assigned at the

Department of Science and Technology (DOST) pursuant to a security service contract between the DOST and Alert Security.

They aver that because they were underpaid, they filed a complaint for money claims against Alert Security. As a result of their

complaint, they were relieved from their posts in the DOST and were not given new assignments despite the lapse of six months.

Later, they filed a joint complaint for illegal dismissal against petitioners.

Labor Arbiter rendered decision finding complainants to have been illegally dismissed. Consequently, each complainant should

be paid in solidum by the respondents the individual awards. The NLRC affirmed the decision, however, dismissed the complaint

for illegal dismissal. The CA reversed the decision of the NLRC thus, decision of the Labor Arbiter is hereby revived.

ISSUE: Whether or not the security guards were illegally dismissed?

HELD:Yes, they were illegally dismissed. As a rule, employment cannot be terminated by an employer without any just or

authorized cause. Employers are barred from arbitrarily removing their workers whenever and however they want. The law
http://sc.judiciary.gov.ph/jurisprudence/2011/september2011/182397.htmhttp://sc.judiciary.gov.ph/jurisprudence/2011/september2011/182397.htmhttp://sc.judiciary.gov.ph/jurisprudence/2011/september2011/182397.htmhttp://sc.judiciary.gov.ph/jurisprudence/2011/september2011/182397.htm


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sets the valid grounds for termination as well as the proper procedure to take when terminating the services of an employee.

Although we recognize the right of employers to shape their own work force, this management prerogative must not curtail the

basic right of employees to security of tenure. There must be a valid and lawful reason for terminating the employment of a

worker. Otherwise, it is illegal and would be dealt with by the courts accordingly.

The security guards were relieved from their posts because they filed with the Labor Arbiter a complaint against their

employer for money claims due to underpayment of wages. This reason is unacceptable and illegal. Nowhere in the law

providing for the just and authorized causes of termination of employment is there any direct or indirect reference to filing a

legitimate complaint for money claims against the employer as a valid ground for termination. The Labor Code, as amended,

enumerates several just and authorized causes for a valid termination of employment. An employee asserting his right and

asking for minimum wage is not among those causes. Dismissing an employee on this ground amounts to retaliation by

management for an employees legitimate grievance without due process. Such stroke of retribution has no place in Philippine

Labor Laws.

Assuming that the security guard voluntarily abandoned their jobs when they failed to report for duty in the new

location, does not mean that they abandoned their posts. For abandonment of work to fall under Article 282 (b) of the Labor

Code, as amended, as gross and habitual neglect of duties there must be the concurrence of two elements. First, there should

be a failure of the employee to report for work without a valid or justifiable reason, and second, there should be a showing that

the employee intended to sever the employer-employee relationship, the second element being the more determinative factor

as manifested by overt acts. The employer cannot simply conclude that an employee is ipso factonotified of a transfer when

there is no evidence to indicate that the employee had knowledge of the transfer order. Hence, the failure of an employee to

report for work at the new location cannot be taken against him as an element of abandonment.

e. Payment of wages in calamity-stricken areas: DOLE Labor Advisory No. 01, August 8, 2012


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APPENDICES

Republic of the PhilippinesCongress of the Philippines

Metro Manila

Eighth Congress

Republic Act No. 6727 June 9, 1989

AN ACT TO RATIONALIZE WAGE POLICY DETERMINATION BY ESTABLISHING THEMECHANISM AND PROPER STANDARDS THEREFOR, AMENDING FOR THE PURPOSEARTICLE 99 OF, AND INCORPORATING ARTICLES 120, 121, 122, 123, 124, 126 AND 127

INTO,PRESIDENTIAL DECREE NO. 442,AS AMENDED, OTHERWISE KNOWN AS THE LABORCODE OF THE PHILIPPINES, FIXING NEW WAGE RATES, PROVIDING WAGE INCENTIVES FOR

INDUSTRIAL DISPERSAL TO THE COUNTRYSIDE, AND FOR OTHER PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled::

Section 1.This Act shall be known as the "Wage Rationalization Act."

Section 2.It is hereby declared the policy of the State to rationalize the fixing of minimum wages andto promote productivity-improvement and gain-sharing measures to ensure a decent standard of livingfor the workers and their families; to guarantee the rights of labor to its just share in the fruits ofproduction; to enhance employment generation in the countryside through industry dispersal; and toallow business and industry reasonable returns on investment, expansion and growth.

The State shall promote collective bargaining as the primary mode of settling wages and other termsand conditions of employment; and whenever necessary, the minimum wage rates shall be adjusted ina fair and equitable manner, considering existing regional disparities in the cost of living and othersocio-economic factors and the national economic and social development plans.

Section 3.In line with the declared policy under this Act, Article 99 of Presidential Decree No. 442, asamended, is hereby amended and Articles 120, 121, 122, 123, 124, 126 and 127 are herebyincorporated into Presidential Decree No. 442, as amended, to read as follows:

"Art. 99. Regional Minimum Wages.The minimum wage rates for agricultural and non-

agricultural employees and workers in each and every region of the country shall be thoseprescribed by the Regional Tripartite Wages and Productivity Boards."

"Art. 120. Creation of the National Wages and Productivity Commission.There is herebycreated a National Wages and Productivity Commission, hereinafter referred to as theCommission, which shall be attached to the Department of Labor and Employment (DOLE) forpolicy and program coordination."

"Art. 121. Powers and Functions of the Commission.The Commission shall have thefollowing powers and functions:

"(a) To act as the national consultative and advisory body to the President of thePhilippines and Congress on matters relating to wages, incomes and productivity;

"(b) To formulate policies and guidelines on wages, incomes and productivityimprovement at the enterprise, industry and national levels;
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"(c) To prescribe rules and guidelines for the determination of appropriate minimumwage and productivity measures at the regional, provincial or industry levels;

"(d) To review regional wage levels set by the Regional Tripartite Wages andProductivity Boards to determine if these are in accordance with prescribed guidelinesand national development plans;

"(e) To undertake studies, researches and surveys necessary for the attainment of its

functions and objectives, and to collect and compile data and periodically disseminateinformation on wages and productivity and other related information, including, but notlimited to, employment, cost-of-living, labor costs, investments and returns;

"(f) To review plans and programs of the Regional Tripartite Wages and ProductivityBoards to determine whether these are consistent with national development plans;

"(g) To exercise technical and administrative supervision over the Regional TripartiteWages and Productivity Boards;

"(h) To call, from time to time, a national tripartite conference of representatives of

government, workers and employers for the consideration of measures to promote wagerationalization and productivity; and

"(i) To exercise such powers and functions as may be necessary to implement this Act.

"The Commission shall be composed of the Secretary of Labor and Employment as ex-officiochairman, the Director-General of the National Economic and Development Authority (NEDA)as ex-officio vice-chairman, and two (2) members each from workers and employers sectorswho shall be appointed by the President of the Philippines upon recommendation of theSecretary of Labor and Employment to be made on the basis of the list of nominees submittedby the workers and employers sectors, respectively, and who shall serve for a term of five (5)

years. The Executive Director of the Commission shall also be a member of the Commission.

"The Commission shall be assisted by a Secretariat to be headed by an Executive Director andtwo (2) Deputy Directors, who shall be appointed by the President of the Philippines, upon therecommendation of the Secretary of Labor and Employment.

"The Executive Director shall have the same rank, salary, benefits and other emoluments asthat of a Department Assistant Secretary, while the Deputy Directors shall have the same rank,salary, benefits and other emoluments as that of a Bureau Director. The members of theCommission representing labor and management shall have the same rank, emoluments,allowances and other benefits as those prescribed by law for labor and management

representatives in the Employees' Compensation Commission.

"Art. 122. Creation of Regional Tripartite Wages and Productivity Boards.There is herebycreated Regional Tripartite Wages and Productivity Boards, hereinafter referred to as RegionalBoards, in all regions, including autonomous regions as may be established by law. TheCommission shall determine the offices/headquarters of the respective Regional Boards.

"The Regional Boards shall have the following powers and functions in their respective territorialjurisdiction:

"(a) To develop plans, programs and projects relative to wages, incomes and

productivity improvement for their respective regions;

"(b) To determine and fix minimum wage rates applicable in their region, provinces orindustries therein and to issue the corresponding wage orders, subject to guidelinesissued by the Commission;


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"(c) To undertake studies, researches and surveys necessary for the attainment of theirfunctions, objectives and programs, and to collect and compile data on wages, incomes,productivity and other related information and periodically disseminate the same;

"(d) To coordinate with the other Regional Boards as may be necessary to attain thepolicy and intention of this Code;

"(e) To receive, process and act on applications for exemption from prescribed wage

rates as may be provided by law or any Wage Order; and

"(f) To exercise such other powers and functions as may be necessary to carry out theirmandate under this Code.

Implementation of the plans, programs and projects of the Regional Boards referred to in thesecond paragraph, letter (a) of this Article, shall be through the respective regional offices of theDepartment of Labor and Employment within their territorial jurisdiction; Provided, however,That the Regional Boards shall have technical supervision over the regional office of theDepartment of Labor and Employment with respect to the implementation of said plans,programs and projects.

"Each Regional Board shall be composed of the Regional Director of the Department of Laborand Employment as chairman, the Regional Directors of the National Economic andDevelopment Authority and the Department of Trade and Industry as vice-chairmen and two (2)members each from workers and employers sectors who shall be appointed by the President ofthe Philippines, upon the recommendation of the Secretary of Labor and Employment, to bemade on the basis of the list of nominees submitted by the workers and employers sectors,respectively, and who shall serve for a term of five (5) years.

"Each Regional Board to be headed by its chairman shall be assisted by a Secretariat.

"Art. 123. Wage Order.

Whenever conditions in the region so warrant, the Regional Boardshall investigate and study all pertinent facts; and based on the standards and criteria hereinprescribed, shall proceed to determine whether a Wage Order should be issued. Any suchWage Order shall take effect after fifteen (15) days from its complete publication in at least one(1) newspaper of general circulation in the region.

"In the performance of its wage determining functions, the Regional Board shall conduct publichearings/consultations, giving notices to employees' and employers' groups, provincial, city andmunicipal officials and other interested parties.

"Any party aggrieved by the Wage Order issued by the Regional Board may appeal such order

to the Commission within ten (10) calendar days from the publication of such order. It shall bemandatory for the Commission to decide such appeal within sixty (60) calendar days from thefiling thereof.

"The filing of the appeal does not stay the order unless the person appealing such order shallfile with the Commission an undertaking with a surety or sureties satisfactory to theCommission for the payment to the employees affected by the order of the correspondingincrease, in the event such order is affirmed."

"Art. 124. Standards/Criteria for Minimum Wage Fixing.The regional minimum wages to beestablished by the Regional Board shall be as nearly adequate as is economically feasible to

maintain the minimum standards of living necessary for the health, efficiency and general well-being of the employees within the framework of the national economic and social developmentprogram. In the determination of such regional minimum wages, the Regional Board shall,among other relevant factors, consider the following:


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"(a) The demand for living wages;

"(b) Wage adjustment vis-a-vis the consumer price index;

"(c) The cost of living and changes or increases therein;

"(d) The needs of workers and their families;

"(e) The need to induce industries to invest in the countryside;

"(f) Improvements in standards of living;

"(g) The prevailing wage levels;

"(h) Fair return of the capital invested and capacity to pay of employers;

"(i) Effects on employment generation and family income; and

"(j) The equitable distribution of income and wealth along the imperatives of economic

and social development.

"The wages prescribed in accordance with the provisions of this Title shall be the standardprevailing minimum wages in every region. These wages shall include wages varying withinindustries, provinces or localities if in the judgment of the Regional Board conditions make suchlocal differentiation proper and necessary to effectuate the purpose of this Title.

"Any person, company, corporation, partnership or any other entity engaged in business shallfile and register annually with the appropriate Regional Board, Commission and the NationalStatistics Office an itemized listing of their labor component, specifying the names of theirworkers and employees below the managerial level, including learners, apprentices and

disabled/handicapped workers who were hired under the terms prescribed in the employmentcontracts, and their corresponding salaries and wages.

"Where the application of any prescribed wage increase by virtue of law or Wage order issuedby any Regional Board results in distortions of the wage structure within an establishment, theemployer and the union shall negotiate to correct the distortions. Any dispute arising from wagedistortions shall be resolved through the grievance procedure under their collective bargainingagreement and, if it remains unresolved, through voluntary arbitration. Unless otherwise agreedby the parties in writing, such dispute shall be decided by the voluntary arbitrator or panel ofvoluntary arbitrators within ten (10) calendar days from the time said dispute was referred tovoluntary arbitration.

"In cases where there are no collective agreements or recognized labor unions, the employersand workers shall endeavor to correct such distortions. Any dispute arising therefrom shall besettled through the National Conciliation and Mediation Board and, if it remains unresolved afterten (10) calendar days of conciliation, shall be referred to the appropriate branch of the NationalLabor Relations Commission (NLRC). It shall be mandatory for the NLRC to conductcontinuous hearings and decide the dispute within twenty (20) calendar days from the time saiddispute is submitted for compulsory arbitration.

"The pendency of a dispute arising from a wage distortion shall not in any way delay theapplicability of any increase in prescribed wage rates pursuant to the provisions of law or Wage

Order.

"As used herein, a wage distortion shall mean a situation where an increase in prescribed wagerates results in the elimination or severe contraction of intentional quantitative differences inwage or salary rates between and among employee groups in an establishment as to effectively


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obliterate the distinctions embodied in such wage structure based on skills, length of service, orother logical bases of differentiation.

"All workers paid by result, including those who are paid on piecework, takay, pakyaw or taskbasis, shall receive not less than the prescribed wage rates per eight (8) hours work a day, or aproportion thereof for working less than eight (8) hours.

"All recognized learnership and apprenticeship agreements shall be considered automatically

modified insofar as their wage clauses are concerned to reflect the prescribed wage rates."

"Art. 126. Prohibition Against Injunction.No preliminary or permanent injunction or temporaryrestraining order may be issued by any court, tribunal or other entity against any proceedingsbefore the Commission or the Regional Boards."

"Art. 127. Non-diminution of Benefits.No Wage Order issued by any Regional Board shallprovide for wage rates lower than the statutory minimum wage rates prescribed by Congress."

Section 4.(a) Upon the effectivity of this Act, the statutory minimum wage rates of all workers andemployees in the private sector, whether agricultural or non-agricultural, shall be increased by twenty-

five pesos (P25.00) per day, except that workers and employees in plantation agricultural enterprisesoutside of the National Capital Region (NCR) with an annual gross sales of less than five million pesos(P5,000,000.00) in the preceding year shall be paid an increase of twenty pesos (P20.00), and exceptfurther that workers and employees of cottage/handicraft industries, non-plantation agriculturalenterprises, retail/service establishments regularly employing not more than ten (10) workers, andbusiness enterprises with a capitalization of not more than five hundred thousand pesos (P500,000.00)and employing not more than twenty (20) employees, which are located or operating outside the NCR,shall be paid only an increase of fifteen pesos (P15.00): Provided, That those already receiving abovethe minimum wage rates up to one hundred pesos (P100.00) shall also receive an increase of twenty-five pesos (P25.00) per day, except that the workers and employees mentioned in the first exceptionclause of this Section shall also be paid only an increase of twenty pesos (P20.00), and except further

that those employees enumerated in the second exception clause of this Section shall also be paid anincrease of fifteen pesos (P15.00): Provided, further, That the appropriate Regional Board is herebyauthorized to grant additional increases to the workers and employees mentioned in the exceptionclauses of this Section if, on the basis of its determination pursuant to Article 124 of the Labor Codesuch increases are necessary.

(b) The increase of twenty-five pesos (P25.00) prescribed under this Section shall apply to all workersand employees entitled to the same in private educational institutions as soon as they have increasedor

part 3_2nd part_case nos 52-66

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