PHILIPPINE DUPLICATORS, INC., petitioner, vs.,
NATIONAL LABOR RELATIONS COMMISSION and PHILIPPINE DUPLICATORS EMPLOYEES
UNION-TUPAS, respondents
G.R. No. 110068 | November 11, 1993
TOPIC:
Wages
FACTS:
Petitioner Philippine Duplicators, Inc.
employ salesmen who are paid a fixed or guaranteed salary plus commissions. The
commissions are computed based on the selling price of the duplicating machines
sold by the respective salesmen.
On November 24, 1986, Minister August
Sanchez of the Ministry of Labor and Employment issued MOLE Explanatory
Bulletin No. 86-12 which reads that “employees who are paid a fixed or
guaranteed wage pays commission are also entitled to the mandated 13th
month pay, based on their total earning during the calendar year i.e. on both
their fixed and guaranteed wage and commission.”
Respondent union, for and on behalf of its
member-salesmen, asked petitioner corporation to base their 13th
month pay calculation on the salesmen’s fixed or guaranteed wages plus
commission. Petitioner corporation refused the union’s request but stated that
it would respect an opinion from MOLE.
ON November 17, 1987 the Director of the
Bureau of Working Condition MOLE, rendered an opinion saying that 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 that they worked at least 1 month during the
calendar year and that in computing such 13th month pay, the total commissions
of said salesmen for the calendar year shall be divided by twelve 12.”
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.
Respondent union thereupon instituted a
complaint against petitioner corporation for payment of the demand of its
sales-men-members for 13th month pay. The union averred that the salesmen
received 13th month pay computed only on the basis of their fixed or guaranteed
wage.
On appeal to the NLRC, the petitioner
maintained that the commissions earned by its salesmen fell outside the scope
of the term “basic salary” for purposes of computing the 13th month
pay of employees. .
ISSUE:
Whether commissions should be included as
basis for the 13th month pay
RULING:
Article 97 of the Labor Code defines the
term “wage” to mean the “remuneration or earnings, however designated, capable
of being expressed in terms of money, whether fixed or ascertained on 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 included 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.
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 petitioner’s salesmen.
In San Miguel Corporation v. Inciong, the
catch-all phrase “allowances” and “monetary benefits” which are deemed not
considered or integrated as part of “basic salary” was construed to refer to
“any and all additions which may be in the form of allowances or ‘fringe’
benefits.” These fringe benefits include payments for sick leave, vacation
leave or maternity leave; premium pay for work performed on rest day and
special holidays; premium pay for regular holidays and night differential pay;
and cost of living allowances. Sales commissions form part of the “wage” or
“salary” of salesmen and are not in the nature of an “allowance” or “additional
fringe” benefit.
In Songco v. NLRC, the Court, in declaring
that sales commission must be included in the salary base of salesmen for
purposes of computing separation pay, stressed that salary and wages generally
refer to one and the same meaning, that is, a reward or recompense for services
performed. Furthermore, the Court said that the commissions were in the form of
incentives or encouragement, so that the petitioners would be inspired to put a
little more industry on the jobs particularly assigned to them, still these
commissions are direct remunerations for services rendered which contributed to
the increase of income of Zuellig. The nature of the work of a salesman and the
reason for such type of remuneration for services rendered demonstrate clearly
that commissions are part of petitioners’ wage or salary.
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