1. Wilgen Loon et al v Power Master [G.R. No.

189404, Dec 11, 2013]

Facts:

Respondents employed petitioners as janitors and leadsmen in PDLT offices. The

petitioners filed the complaint for illegal dismissal and payment of wages, overtime, holiday,
premium, service incentive leave, and 13th month pays.

LA awarded the petitioners salary differential, service incentive leave, and13 th month pay
plus attorney’s fees but denied the claims for backwages, overtime, holiday, and premium pays
for failure to show that they rendered overtime work and worked on holidays and rest days
without compensation.

NLRC affirmed the LA’s awards of holiday pay and attorney’s fees. NLRC allowed the
respondents to submit pieces of evidence for the first time on appeal on the ground that they had
been deprived of due process. NLRC however, annulled the LA’s awards of salary differential,
thirteenth month and service incentive leave pays on account of the evidences attached to the
memorandum on appeal and the supplemental appeal.

The CA affirmed the NLRC’s ruling.

Issue:

Whether or not petitioners are entitled to the payment of wages, overtime, holiday,
premium, service incentive leave, and 13th month pays.

Ruling:

The Court reversed the CA decision and remanded the case back to the RTC for the
computation of the petitioners’ full backwages and their salary differential, service incentive
leave, holiday, thirteenth month pays, and attorney’s fees.

In termination cases, the burden of proving just and valid cause for dismissing an
employee from his employment rests upon the employer. The employer’s failure to discharge
this burden results in the finding that the dismissal is unjustified. In this case, respondents failed
to prove just cause of petitioners’ dismissal. Hence, they were entitled to backwages.

Moreover, the petitioners are entitled to salary differential, service incentive, holiday, and
13th month pays in illegal dismissal cases. The general rule is that the burden rests on the
defendant to prove payment rather than on the plaintiff to prove nonpayment of these money
claims since the petitioners have the payrolls, records and other documents in their possession.

However, the burden of proving entitlement to overtime pay and premium pay for
holidays and rest days rests on the employee because these are not incurred in the normal course
of business. In the present case, the petitioners failed to adduce any evidence that would show
that they actually rendered service in excess of the regular eight working hours a day, and that
they in fact
worked on holidays and rest days.

2. A. Nate Casket Maker v Elias Arango [G.R. No. 192282, Oct. 5, 2016]

Facts:

Respondents filed a complaint for illegal dismissal and nonpayment of separation pay
against petitioners with additional claims for underpayment of wages, nonpayment of overtime
pay, holiday pay, 5-day service incentive leave pay and 13th month pay.

Petitioners employed respondents on a pakyaw basis as carpenters, mascilladors and

painters in their casket-making business. Petitioners then proposed employment agreement
which would change the existing pakyaw system to contractual basis with the following terms
and conditions: 1) the contract will be for 5 months and renewable on a case to-case basis or
subject to respondents’ efficiency and performance; 2) petitioners shall reserve the right to
terminate their employment; 3) they are paid on a piece rate basis and are obliged to strictly
follow their work schedules; and 4) they are not entitled to sick leave or vacation leave, nor
receive 13th month pay and/or bonuses, or any other benefits given to a regular employee. When
respondents refused to sign the new contract, their employment was terminated.

LA denied the respondents claims for lack of merit. LA held respondents were earning
more than the minimum wage per day and were therefore not underpaid. Although they regular
workers, they are not entitled to overtime pay, holiday pay, service incentive leave pay and 13th
month pay citing the case of field personnel and those paid on purely commission basis.

NLRC affirmed LA decision and held that pakyaw workers are not entitled to money
claims because their work depends on the availability of job orders from petitioners’ clients.
Also, there was no proof that overtime work was rendered by respondents.

CA reversed the decision of NLRC and held that respondents have been illegally
dismissed and ordered petitioners to pay them backwages, separation pay and other monetary
benefits as required by law. The Court also directed the LA of origin to conduct further
proceedings for the purpose of determining the amount of backwages and separation pay due
petitioners.

Issues:

Whether or not respondents who are pakyaw workers and considered regular workers are
entitled to overtime pay, holiday pay, service incentive leave pay and 13th month pay.

Ruling:

The Court partially granted the petition and denied payment of the 13 th month pay of the
respondents and affirmed the CA decision in all other aspects.
 The respondents are regular employees of the petitioners considering the length of time
of service and the tasks performed by respondents as carpenters, painters, and mascilladors were
necessary and desirable in the usual business of petitioners who are engaged in the manufacture
and selling of caskets. In addition, the power of control of petitioners over respondents is clearly
present in this case. Respondents follow the steps in making a casket, as instructed by the
petitioners, like carpentry, mascilla, rubbing and painting. They had their own notebooks where
they listed the work completed with their signature and the date finished. The same would be
checked by petitioners as basis for the compensation for the day. Thus, petitioners wielded
control over the respondents in the discharge of their work.

Since respondents are regular employees, they are entitled to separation in lieu of
reinstatement and backwages. Respondents performed their duties at the petitioner’s place of
busines where the latter supervised their time and performance of their duties. Thus, respondents
cannot be considered as “field personnel,” therefore, they are not exempted from the grant of
holiday and service incentive leave pay (SIL). Moreover, respondents were not entitled to 13 th
month pay since employers of those who are paid on task basis, and those who are paid a fixed
amount for performing a specific work, irrespective of the time consumed in the performance
thereof were exempted from payment of 13th month pay.

3. Phil Duplicators v NLRC [G.R. No. 110068, Nov 11, 1993]

Facts:

Respondent Phil Duplicators Employees Union-Tupas, in behalf of its member-salesmen,

filed a case against the petitioner their employer Phil Duplicators for payment of 13 th month
computed on the basis of the salesmen’s fixed or guaranteed wages plus commissions pursuant to
P.D. 851.

P.D. 851 prescribed payment of 13th month pay based on the basic salary of employees.
However, upon computation of the 13th month pay for its salesmen, petitioner excluded the
commissions alleging that sales commissions did not form part of the basic salary of the
salesmen. This was in spite of the issuance of the Memorandum Order and MOLE Explanatory
bulletin opining that sales commission are part of the basin salary of the salesmen.

Both the Labor Arbiter and the NLRC favored the respondents.

Issue:

Whether or not commissions are considered as basic pay in the computation for 13 th
month pay.

Ruling:
 The Court denied the petition for certiorari for failure to show grave abuse of discretion
of the NLRC.

Sales commissions form part of the “wage” or “salary” of salesmen and are not in the
nature of an “allowance” or “additional fringe” benefit. The Court noted that in the instant case,
sales commissions form the bulk of the salaries or wages of petitioner’s salesmen. Petitioner
pays its salesmen a small fixed or guaranteed wage; the greater part of the salesmen’s wages or
salaries being composed of the sales or incentive commissions earned on actual sales closed by
them. Such commissions are part of the salary or wage paid to each of its salesmen for rendering
services to petitioner corporation.

4. Our Haus Realty Dev. Corp v Parian [G.R No. 204651, Aug 6, 2014]

Facts:

Respondents are laborers of the petitioner’s construction busines. Respondents filed a

complaint for underpayment of wages against petitioner. Respondents alleged that their wages
were below the minimum rates prescribed and petitioner also failed to pay for their holiday,
service incentive leave (SIL), 13th month and overtime pays.

Petitioner alleged that aside from the monetary amount of the wages, petitioners also
subsidized respondents their meals (3 times a day), and gave them free lodging near the
construction project they were assigned to which should form part of their daily wages.

LA ruled in favor of petitioner but NLRC reversed the LA decision in favor of the
respondents. CA affirmed the NLRC decision.

Issue:

Whether or not the facilities (meals and free lodging) furnished by the petitioner form
part of the daily wages of respondents.

Ruling:

The Court denied the petition and affirmed the CA decision. The meals and lodging are
not considered as facilities deductible from the wages. As stated in the Mabeza case, a. proof
must be shown that such facilities are customarily furnished by the trade; b. the provision of
deductible facilities must be voluntarily accepted in writing by the employee; and c. the facilities
must be charged at fair and reasonable value.

One of the badges to show that a facility is customarily furnished by the trade is the
existence of a company policy or guideline showing that provisions for a facility were designated
as part of the employees’ salaries. Apart from company policy, the employer may also prove
compliance with the first requirement by showing the existence of an industry-wide practice of
furnishing the benefits in question among enterprises engaged in the same line of business.
 Moreover, the benefit must pass the purpose test. Under this test, if the benefit is
primarily for the employee’s gain, then the benefit is a facility; if its provision is mainly for the
employer’s advantage or convenience, then it is a supplement. Supplements are paid to
employees on top of their basic pay and are free of charge. Only the value of the facilities may be
deducted from the employees’ wages but not the value of supplements. The real difference lies
not on the kind of the benefit but on the purpose why it was given. In the present case, the board
and lodging provided were supplements and not facilities. By ensuring that the workers are
adequately and well fed, the employer is actually investing on its business. Also, it will be more
convenient to the employer if its workers are housed near the construction site to ensure their
ready availability during urgent or emergency circumstances.

On the other hand, the provision of deductible facilities must be voluntarily accepted in
writing by the employee. The five kasunduans presented by the petitioner after NLRC pointed
out the lack of consent for the deduction.

Lastly, the facility must be charged at a fair and reasonable value. Although the deduction
was within the 70% ceiling prescribed by the rules, the petitioner failed to support documents
such as receipts and company records as basis for valuation of the facility for it to be considered
as fair and reasonable .