Philippine Duplicators vs.
NLRC (f) Wage paid
GR 110068 February 15, 1995
Facts:
Private respondent union, for and on behalf of its member-
salesmen, asked petitioner corporation for payment of 13th
month pay computed on the basis of the salesmens fixed or
guaranteed wages plus commissions.
Petitioner corporation refused the unions request, but
stated it would respect an opinion from the MOLE. On 17
November 1987, acting upon a request for opinion
submitted by respondent union, Director Augusto G.
Sanchez of the Bureau of Working Conditions, MOLE,
rendered an opinion to respondent union declaring
applicable the provisions of Explanatory Bulletin No. 86-12,
Item No. 5 (a):
. . . . Since the salesmen of Philippine Duplicators
are receiving a fixed basic wage plus commission on
sales and not purely on commission basis, they are entitled
to receive 13th month pay provided they worked at least
one (1) month during the calendar year. May we add at this
point that in computing such 13th month pay, the total
commissions of said salesmen for the calendar year shall be
divided by twelve (12). (Emphasis supplied)
Notwithstanding Director Sanchez opinion or ruling,
petitioner refused to pay the claims of its salesmen for 13th
month pay computed on the basis of both fixed wage plus
sales commissions.
Issue: WON sales commission is included in the coverage of
basic salary for purposes of computing 13th month pay.
Held:
1 Resolution (1995)
2 Decision (1993)
In the first place, Article 97 (f) of the Labor Code defines the
term wage (which is equivalent to salary, as used in P.D.
No. 851 and Memorandum Order No. 28) in the following
terms:
to any employee shall
mean the remuneration or earnings, however designated,
capable of being expressed in terms of money, whether
fixed or ascertained on a time, task, piece, or commission
basis, or other method of calculating the same, which
is payable by an employer to an employee under a written
or unwritten contract of employment for work done or to be
done, or for services rendered or to be rendered, and
includes the fair and reasonable value, as determined by the
Secretary of Labor, of board, lodging, or other facilities
customarily furnished by the employer to the employee.
Fair and reasonable value shall not include any profit to
the employer or to any person affiliated with the employer.
(Emphasis supplied)
In the instant case, there is no question that the sales
commissions earned by salesmen who make or close a sale
of duplicating machines distributed by petitioner corporation
constitute part of the compensation or remuneration paid to
salesmen for serving as salesmen, and hence as part of the
wage or salary of petitioners salesmen. Indeed, it
appears that petitioner pays its salesmen a small fixed or
guaranteed wage; the greater part of the salesmens wages
or salaries being composed of the sales or incentive
commissions earned on actual sales closed by them. No
doubt this particular salary structure was intended for the
benefit of petitioner corporation, on the apparent
assumption that thereby its salesmen would be moved to
greater enterprise and diligence and close more sales in the
expectation of increasing their sales commissions. This,
however, does not detract from the character of such
commissions as part of the salary or wage paid to each of its
salesmen for rendering services to petitioner corporation.
Petition and MR dismissed
In Boie-Takeda the so-called commissions paid to or
received by medical representatives of Boie-Takeda
Chemicals or by the rank and file employees of Philippine
Fuji Xerox Co., were excluded from the term basic salary
because these were paid to the medical representatives and
rank-and-file employees as productivity bonuses. The
Second Division characterized these payments as additional
monetary benefits not properly included in the term basic
salary in computing their 13th month pay. As a rule a bonus
is an amount granted and paid to an employee for his
industry loyalty which contributed to the success of the
employers business and made possible the realization of
profits. It is an act of generosityof the employer for which
the employee ought to be thankful and grateful. It is also
granted by an enlightened employer to spur the employee
to greater efforts for the success of the business and
realization of bigger profits. From the legal point of view a
bonus is not and mandatory and enforceable obligation. It is
so when It is made part of the wage or salary or
compensation.
2nd MR dismissed.