Case Digest (G.R. No. 185215)
Facts:
In Songco, Cipres, and Manuel v. NLRC, petitioners Jose Songco, Romeo Cipres, and Amancio Manuel were salesmen employed by F.E. Zuellig (M), Inc. in Region IV. On January 23, 1978, Zuellig sought Department of Labor clearance to retrench them for alleged financial losses. The petitioners opposed, contending no losses existed and that dismissals were union-related. At the last hearing, they withdrew contestation of dismissal, leaving only the separation-pay basis unresolved. Under their Collective Bargaining Agreement (CBA), retirees or those laid off “not due to [their] fault” are entitled to “one (1) month’s salary per year of service,” defined as the salary at separation. The Labor Code then in force (Art. 284) and its implementing Rules (Sec. 9(b), 10, Book VI) provided separation pay of “one (1) month pay or at least one-half (1/2) month pay for every year of service,” based on “latest salary rate.” On June 26, 1978, Labor Arbiter Flavio Aguas ordered Zuellig to pay one montCase Digest (G.R. No. 185215)
Facts:
- Application for retrenchment and opposition
- Private respondent F.E. Zuellig (M), Inc. filed with the Department of Labor (Regional Office No. 4) for clearance to terminate petitioners on the ground of retrenchment due to alleged financial losses.
- Petitioners Jose Songco, Romeo Cipres, and Amancio Manuel opposed, alleging no actual losses and dismissal motivated by union membership; they later ceased contesting dismissal and confined the dispute to the basis of separation pay.
- Employment terms and collective bargaining agreement (CBA)
- Petitioners, employed in the sales force, received a monthly salary of at least ₱400 plus commissions on sales.
- CBA Article XIV (“Retirement Gratuity”) provides that any employee separated due to permanent lay-off not attributable to fault shall receive a retirement gratuity equivalent to one month’s salary per year of service.
- Relevant statutory and regulatory provisions
- Labor Code Article 284 (as then prevailing) entitles retrenched employees to separation pay: one month’s pay or at least one-half month’s pay per year of service, whichever is higher; a fraction of six months counts as one year.
- Rules Implementing the Labor Code, Book VI, Rule I, Sections 9(b) and 10, prescribe termination pay equivalent to at least one month’s salary or one-half month’s pay per year of service (whichever is higher), computed on the latest salary rate.
- Proceedings below and appellate disposition
- The Labor Arbiter ordered Zuellig to pay separation pay equivalent to one month’s salary (excluding commissions and allowances) for every year of service.
- The National Labor Relations Commission dismissed petitioners’ appeal for lack of merit, affirming exclusion of commissions and allowances from the salary base.
- Romeo Cipres voluntarily withdrew his petition after receiving his separation pay; the Supreme Court granted certiorari for Jose Songco and Amancio Manuel on the sole issue of the salary base for separation pay.
Issues:
- Whether earned sales commissions should be included in the monthly salary base for computation of separation pay.
- Petitioners contend that, under Labor Code Article 97(f), “wage” includes commissions, and that basic salary, commissions, and allowances must be aggregated.
- Respondent argues that neither the Labor Code nor its rules explicitly include commissions in “salary” for separation pay and that such inclusion would lead to anomalous results if all fringe benefits were aggregated.
- Whether allowances should be included in the computation of separation pay.
- Prior decisions (Santos v. NLRC, Soriano v. NLRC, Planters Products, Inc. v. NLRC) hold that transportation and living allowances form part of the salary base for backwages and separation pay.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)