Case Summary (G.R. No. 85073)
Relevant Dates
- Initial Complaint Filed: December 28, 1982
- Labor Arbiter's Decision: March 7, 1984
- Supreme Court Decision: August 24, 1993
Applicable Law
The ruling is governed by the 1987 Philippine Constitution and relies particularly on Presidential Decree No. 851, which mandates payment of the thirteenth month pay to employees.
Case Background
On December 28, 1982, the ALU lodged a complaint against Davao Fruits Corporation with the Ministry of Labor and Employment, claiming that the corporation failed to correctly compute the thirteenth month pay for its employees for the year 1982. The union asserted that the employer excluded essential components such as sick leaves, vacation leaves, maternity leaves, and premiums for work on rest days and holidays from the calculation of the thirteenth month pay, thereby violating established company practices since 1975.
Labor Arbiter's Decision
The Labor Arbiter ruled in favor of the ALU on March 7, 1984, ordering Davao Fruits Corporation to pay the thirteenth month pay differentials to its rank-and-file employees. The petitioner subsequently appealed this decision to the National Labor Relations Commission (NLRC), which upheld the Labor Arbiter's ruling, declaring the appeal without merit.
Jurisdiction and Procedural Aspects
Davao Fruits Corporation filed a petition for review under Rule 45 of the Revised Rules of Court but the Supreme Court opted to treat it as a special civil action for certiorari under Rule 65 of the Revised Rules of Court due to the significant legal questions involved.
Core Legal Issue
The central issue in this case revolves around whether payments for sick, vacation, and maternity leaves, as well as premiums for work done on rest days and holidays, can be excluded from the thirteenth month pay computation according to P.D. No. 851 and its implementing rules.
Analysis of the Law
Presidential Decree No. 851 mandates that all employers pay a thirteenth month pay structured as one-twelfth of an employee’s basic salary within a calendar year. The definition of "basic salary," as articulated in both the decree and its supplementary regulations, explicitly includes all remuneration or earnings but expressly excludes fringe benefits like cost-of-living allowances and profit-sharing payments. The regulations clarify that overtime pay and other remuneration not integrated into the basic salary are also to be excluded in the calculation of the thirteenth month pay.
Interpretation of Basic Salary
The Court emphasized that due to the clarifying supplementary regulations issued soon after P.D. No. 851's enactment, any prior ambiguities in the definition of "basic salary" were resolved. The supplementary rules specifically delineated the items that do not constitute part of the basic salary, including all identified compensations as not to be included in the thirteenth month pay calculation.
Petitioner’s Claims of Error
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...continue readingCase Syllabus (G.R. No. 85073)
Case Background
- The case arises from a petition for certiorari filed by Davao Fruits Corporation (petitioner) seeking to overturn the resolution of the National Labor Relations Commission (NLRC) which dismissed its appeal against the Labor Arbiter's decision favoring the Associated Labor Unions (ALU) on behalf of rank-and-file employees.
- The complaint, filed on December 28, 1982, involved the payment of thirteenth-month pay differentials for 1982, specifically concerning sick, vacation, and maternity leaves, premiums for work on rest days and special holidays, and regular holiday pay.
- The petitioner contended that these items had been mistakenly included in the computation of thirteenth-month pay in previous years.
Labor Arbiter's Decision
- On March 7, 1984, Labor Arbiter Pedro C. Ramos ruled in favor of the ALU, ordering Davao Fruits Corporation to pay the thirteenth-month pay differential to all rank-and-file workers for 1982.
- The ruling specifically emphasized the entitlement of employees to the thirteenth-month pay as mandated by law.
Appeal to the NLRC
- The petitioner appealed the Labor Arbiter's decision to the NLRC, which upheld the ruling and dismissed the appeal for lack of merit, prompting the petitioner to seek further review from the Supreme Court.
Supreme Court's Jurisdiction
- The Supreme Court resolved to treat the petition as a special civil action for certiorari under Rule 65, despite being initially filed under Rule 45, indicating the court's commitment to ensure justice.
Core Controversy
- The primary issue was whether the c