Case Summary (G.R. No. 110068)
Stare Decisis and Precedential Value
The en banc Court held that the Boie-Takeda decision could not overturn the prior Third Division ruling under stare decisis because:
- Boie-Takeda was promulgated after the Third Division’s decision in Duplicators.
- Duplicators’ first motion for reconsideration had become final before Boie-Takeda attained finality.
Therefore, Boie-Takeda did not constitute a binding precedent to reverse the Duplicators decision.
Late-Theory Change Not Permitted
Duplicators did not question the validity of the Revised Guidelines in its initial petition or first motion for reconsideration; its counsel relied on them below. Introducing an attack on the Guidelines at the second reconsideration stage was deemed an impermissible shift in theory too late in the proceedings.
Commissions Versus Productivity Bonuses
The Court distinguished the factual circumstances in Duplicators from those in Boie-Takeda:
• In Duplicators, sales commissions formed the predominant portion (70%–85%) of a salesman’s annual earnings and were directly tied to individual sales performance, thus constituting part of the basic wage.
• In Boie-Takeda, so-called “commissions” were actually productivity bonuses unlinked to specific sales; they resembled profit-sharing and were granted at the employer’s discretion.
Nature of Bonus Payments
Drawing on precedent (PECO v. CIR; Atok-Big Wedge; Traders Royal Bank v. NLRC), the Court reaffirmed that:
• A bonus is generally ex gratia, dependent on business success or productivity targets.
• Such payments are not demandable unless made part of an agreed compensation package.
• Productivity bonuses bear no direct correlation to individual work rendered and thus lie outside “basic salary.”
Implementation of the 13th Month Pay Guidelines
The Revised Guidelines (1987) provided that employees receiving fixed wages plus commissions are entitled to 13th month pay computed on total earnings, including commissions. Subsequent clarifications (Ople’s Supplementary Rules) excluded from the “basic salary” overtime pay and other non-salary remunerations, to be determined case by case. Sales commissions that operate as integral compensation are included; profit
Case Syllabus (G.R. No. 110068)
Procedural History
- On November 11, 1993, the Supreme Court Third Division dismissed the petition for certiorari filed by Philippine Duplicators, Inc. (“Duplicators”) in G.R. No. 110068.
- The Third Division upheld the NLRC decision affirming Labor Arbiter Garduque’s order that Duplicators pay 13th month pay computed on fixed wages plus sales commissions.
- On December 15, 1993, the Third Division denied Duplicators’ first motion for reconsideration with finality.
- On January 17, 1994, Duplicators filed:
- A motion for leave to admit a second motion for reconsideration.
- A second motion for reconsideration invoking the December 10, 1993 Boie-Takeda decision.
- The Third Division referred these motions to the Court en banc, which treated G.R. No. 110068 as a banc case and heard the issues in en consulta.
Petitioner’s Argument in the Second Motion for Reconsideration
- Petitioner argued that Boie-Takeda (Second Division) had nullified the second paragraph of Section 5(a) of the Revised Guidelines on 13th Month Pay.
- It contended that Boie-Takeda’s ruling directly contradicted the Duplicators decision and effectively reversed it.
- Duplicators sought to set aside the Third Division decision and dismiss the employees’ money claims entirely.
Stare Decisis and Boie-Takeda Decision
- The Court en banc held that Boie-Takeda cannot serve as precedent for Duplicators under the doctrine of stare decisis because:
- Duplicators’ Third Division decision was rendered on November 11, 1993—before Boie-Takeda was promulgated.
- Duplicators’ first motion for reconsideration had been denied on December 15, 1993—prior to Boie-Takeda becoming final on January 5, 1994.
- Thus, Boie-Takeda’s ruling is not retroactively applicable to the Duplicators case.
Validity of the Revised Guidelines and Change of Theory
- Petitioner never challenged the validity of the Revised Guidelines (is