Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-50999 March 23, 1990
JOSE SONGCO, ROMEO CIPRES, and MNCIO MNUEL, petitioners,
vs
NTIONL L!OR RELTIONS COMMISSION "#IRST $I%ISION&, L!OR
R!ITER #L%IO GUS, and #.E. 'UELLIG "M&, INC., respondents.
Raul E. Espinosa for petitioners.
Lucas Emmanuel B. Canilao for petitioner A. Manuel.
Atienza, Tabora, Del Rosario & Castillo for private respondent.

ME$IL$E, J.:
This is a petition for certiorari seein! to "odif# the decision of the National $abor
Relations %o""ission in N$R% %ase No. R&'IV'()*+)',*'T entitled, -ose !on"co
and Romeo Cipres, Complainants#Appellants, v. $.E. %uelli" &M', (nc., Respondent#
Appellee- and N$R% %ase No. RN' IV'()*..',*'T entitled, )Amancio Manuel,
Complainant#Appellant, v. $.E. %uelli" &M', (nc., Respondent#Appellee,) /hich dis"issed
the appeal of petitioners herein and in effect affir"ed the decision of the $abor 0rbiter
orderin! private respondent to pa# petitioners separation pa# e1uivalent to their one
"onth salar# 2e3clusive of co""issions, allo/ances, etc.4 for ever# #ear of service.
The antecedent facts are as follo/s5
Private respondent F.6. 7uelli! 2M4, Inc., 2hereinafter referred to as 7uelli!4 filed /ith the
Depart"ent of $abor 2Re!ional Office No. +4 an application seein! clearance to
ter"inate the services of petitioners 8ose Son!co, Ro"eo %ipres, and 0"ancio Manuel
2hereinafter referred to as petitioners4 alle!edl# on the !round of retrench"ent due to
financial losses. This application /as seasonabl# opposed b# petitioners alle!in! that
the co"pan# is not sufferin! fro" an# losses. The# alle!ed further that the# are bein!
dis"issed because of their "e"bership in the union. 0t the last hearin! of the case,
ho/ever, petitioners "anifested that the# are no lon!er contestin! their dis"issal. The
parties then a!reed that the sole issue to be resolved is the basis of the separation pa#
due to petitioners. Petitioners, /ho /ere in the sales force of 7uelli! received "onthl#
salaries of at least P+),))). In addition, the# received co""issions for ever# sale the#
"ade.
The collective &ar!ainin! 0!ree"ent entered into bet/een 7uelli! and F.6. 7uelli!
6"plo#ees 0ssociation, of /hich petitioners are "e"bers, contains the follo/in!
provision 2p. ,9, Rollo45
0RTI%$6 :IV ; Retire"ent <ratuit#
Section l2a4'0n# e"plo#ee, /ho is separated fro" e"plo#"ent due to
old a!e, sicness, death or per"anent la#'off not due to the fault of
said e"plo#ee shall receive fro" the co"pan# a retire"ent !ratuit# in
an a"ount e1uivalent to one 294 "onth=s salar* per #ear of service.
One "onth of salar* as used in this para!raph shall be dee"ed
e1uivalent to the salar* at date of retire"ent> #ears of service shall be
dee"ed e1uivalent to total service credits, a fraction of at least si3
"onths bein! considered one #ear, includin! probationar#
e"plo#"ent. 26"phasis supplied4
On the other hand, 0rticle (*+ of the $abor %ode then prevailin! provides5
0rt. (*+. Reduction of personnel. ; The ter"ination of e"plo#"ent
of an# e"plo#ee due to the installation of labor savin!'devices,
redundanc#, retrench"ent to prevent losses, and other si"ilar
causes, shall entitle the e"plo#ee affected thereb# to separation pa*.
In case of ter"ination due to the installation of labor'savin! devices or
redundanc#, the separation pa# shall be e1uivalent to one 294 "onth
pa* or to at least one 294 "onth pa* for ever# #ear of service,
/hichever is hi!her. In case of retrench"ent to prevent losses and
other si"ilar causes, the separation pa# shall be e1uivalent to one 294
"onth pa# or at least one'half 29?(4 "onth pa# for ever# #ear of
service, /hichever is hi!her. 0 fraction of at least si3 2@4 "onths shall
be considered one 294 /hole #ear. 26"phasis supplied4
In addition, Sections A2b4 and 9), Rule 9, &oo VI of the Rules I"ple"entin! the $abor
%ode provide5
3 3 3
1
Sec. A2b4. Bhere the ter"ination of e"plo#"ent is due to retrech"ent
initiated b# the e"plo#er to prevent losses or other si"ilar causes, or
/here the e"plo#ee suffers fro" a disease and his continued
e"plo#"ent is prohibited b# la/ or is preCudicial to his health or to the
health of his co'e"plo#ees, the e"plo#ee shall be entitled to
ter"ination pa# e1uivalent at least to his one "onth salar#, or to one'
half "onth pa* for ever# #ear of service, /hichever is hi!her, a
fraction of at least si3 2@4 "onths bein! considered as one /hole #ear.
3 3 3
Sec. 9). Basis of termination pa*. ; The co"putation of the
ter"ination pa# of an e"plo#ee as provided herein shall be based on
his latest salar# rate, unless the sa"e /as reduced b# the e"plo#er
to defeat the intention of the %ode, in /hich case the basis of
co"putation shall be the rate before its deduction. 26"phasis
supplied4
On 8une (@,9A,*, the $abor 0rbiter rendered a decision, the dispositive portion of /hich
reads 2p. ,*, Rollo45
R6SPONSIV6 TO TD6 FOR6<OIN<, respondent should be as it is
hereb#, ordered to pa# the co"plainants separation pa# e1uivalent to
their one "onth salar# 2e3clusive of co""issions, allo/ances, etc.4
for ever# #ear of service that the# have /ored /ith the co"pan#.
SO ORD6R6D.
The appeal b# petitioners to the National $abor Relations %o""ission /as dis"issed
for lac of "erit.
Dence, the present petition.
On 8une (, 9A*), the %ourt, actin! on the verified -Notice of Voluntar# 0bandon"ent
and Bithdra/al of Petition dated 0pril ,, 9A*) filed b# petitioner Ro"eo %ipres, based
on the !round that he /ants -to abide b# the decision appealed fro"- since he had
-received, to his full and co"plete satisfaction, his separation pa#,- resolved to dis"iss
the petition as to hi".
The issue is /hether or not earned sales co""issions and allo/ances should be
included in the "onthl# salar# of petitioners for the purpose of co"putation of their
separation pa#.
The petition is i"pressed /ith "erit.
Petitioners= position /as that in arrivin! at the correct and le!al a"ount of separation
pa# due the", /hether under the $abor %ode or the %&0, their basic salar#, earned
sales co""issions and allo/ances should be added to!ether. The# cited 0rticle A,2f4 of
the $abor %ode /hich includes co""ission as part on one=s salar#, to /it>
2f4 =Ba!e= paid to an# e"plo#ee shall "ean the re"uneration or
earnin!s, ho/ever desi!nated, capable of bein! e3pressed in ter"s
of "one#, /hether fi3ed or ascertained on a ti"e, tas, piece, or
co""ission basis, or other "ethod of calculatin! the sa"e, /hich is
pa#able b# an e"plo#er to an e"plo#ee under a /ritten or un/ritten
contract of e"plo#"ent for /or done or to be done, or for services
rendered or to be rendered, and includes the fair and reasonable
value, as deter"ined b# the Secretar# of $abor, of board, lod!in!, or
other facilities custo"aril# furnished b# the e"plo#er to the e"plo#ee.
=Fair reasonable value= shall not include an# profit to the e"plo#er or
to an# person affiliated /ith the e"plo#er.
7uelli! ar!ues that if it /ere reall# the intention of the $abor %ode as /ell as its
i"ple"entin! rules to include co""ission in the co"putation of separation pa#, it could
have e3plicitl# said so in clear and une1uivocal ter"s. Further"ore, in the definition of
the ter" -/a!e-, -co""ission- is used onl# as one of the features or desi!nations
attached to the /ord re"uneration or earnin!s.
Insofar as the issue of /hether or not allo/ances should be included in the "onthl#
salar# of petitioners for the purpose of co"putation of their separation pa# is concerned,
this has been settled in the case of !antos v. +LRC, et al., <.R. No. ,@,(9, Septe"ber
(9, 9A*,, 9.+ S%R0 9@@, /here Be ruled that -in the co"putation of bac/a!es and
separation pa#, account "ust be taen not onl# of the basic salar# of petitioner but also
of her transportation and e"er!enc# livin! allo/ances.- This rulin! /as reiterated in
!oriano v. +LRC, et al., <.R. No. ,..9), October (,, 9A*,, 9.. S%R0 9(+ and
recentl#, in ,lanters ,roducts, (nc. v. +LRC, et al., <.R. No. ,*.(+, 8anuar# (), 9A*A.
Be shall concern ourselves no/ /ith the issue of /hether or not earned sales
co""ission should be included in the "onthl# salar# of petitioner for the purpose of
co"putation of their separation pa#.
0rticle A,2f4 b# itself is e3plicit that co""ission is included in the definition of the ter"
-/a!e-. It has been repeatedl# declared b# the courts that /here the la/ speas in
clear and cate!orical lan!ua!e, there is no roo" for interpretation or construction> there
is onl# roo" for application 2%ebu Portland %e"ent %o. v. Municipalit# of Na!a, <.R.
Nos. (+99@'9,, 0u!ust ((, 9A@*, (+ S%R0 ,)*> <onEa!a v. %ourt of 0ppeals, <.R.No.
2
$'( ,+.., 8une (*,9A,F, .9 S%R0 F*94. 0 plain and una"bi!uous statute speas for
itself, and an# atte"pt to "ae it clearer is vain labor and tends onl# to obscurit#. Do/
ever, it "a# be ar!ued that if Be correlate 0rticle A,2f4 /ith 0rticle :IV of the %ollective
&ar!ainin! 0!ree"ent, 0rticle (*+ of the $abor %ode and Sections A2b4 and 9) of the
I"ple"entin! Rules, there appears to be an a"bi!uit#. In this re!ard, the $abor 0rbiter
rationaliEed his decision in this "anner 2pp. ,+',@, Rollo45
The definition of =/a!e= provided in 0rticle A@ 2sic4 of the %ode can be
correctl# be 2sic4 stated as a !eneral definition. It is =/a!e = in its
!eneric sense. 0 careful perusal of the sa"e does not sho/ an#
indication that co""ission is part of salar#. Be can sa# that
co""ission b# itself "a# be considered a /a!e. This is not
so"ethin! novel for it cannot be !ainsaid that certain t#pes of
e"plo#ees lie a!ents, field personnel and sales"en do not earn an#
re!ular dail#, /eel# or "onthl# salaries, but rel# "ainl# on
co""ission earned.
Gpon the other hand, the provisions of Section 9), Rule 9, &oo VI of
the i"ple"entin! rules in conCunction /ith 0rticles (,F and (,+ 2sic4
of the %ode specificall# states that the basis of the ter"ination pa#
due to one /ho is sou!ht to be le!all# separated fro" the service is
=his latest salar# rates.
3 3 3.
6ven 0rticles (,F and (,+ 2sic4 invariabl# use ="onthl# pa# or "onthl#
salar#=.
The above ter"s found in those 0rticles and the particular Rules /ere
intentionall# used to e3press the intent of the fra"ers of the la/ that
for purposes of separation pa# the# "ean to be specificall# referrin!
to salar# onl#.
.... 6ach particular benefit provided in the %ode and other Decrees on
$abor has its o/n pecularities and nuances and should be interpreted
in that li!ht. Thus, for a specific provision, a specific "eanin! is
attached to si"plif# "atters that "a# arise there fro". The !eneral
!uidelines in 2sic4 the for"ation of specific rules for particular
purpose. Thus, that /hat should be controllin! in "atters concernin!
ter"ination pa# should be the specific provisions of both &oo VI of
the %ode and the Rules. 0t an# rate, settled is the rule that in "atters
of conflict bet/een the !eneral provision of la/ and that of a
particular' or specific provision, the latter should prevail.
On its part, the N$R% ruled 2p. 99), Rollo45
Fro" the afore1uoted provisions of the la/ and the i"ple"entin!
rules, it could be deduced that /a!e is used in its !eneric sense and
obviousl# refers to the basic /a!e rate to be ascertained on a ti"e,
tas, piece or co""ission basis or other "ethod of calculatin! the
sa"e. It does not, ho/ever, "ean that co""ission, allo/ances or
analo!ous inco"e necessaril# for"s part of the e"plo#ee=s salar#
because to do so /ould lead to ano"alies 2sic4, if not absurd,
construction of the /ord -salar#.- For /hat /ill prevent the e"plo#ee
fro" insistin! that e"er!enc# livin! allo/ance, 9Fth "onth pa#,
overti"e, and pre"iu" pa#, and other frin!e benefits should be
added to the co"putation of their separation pa#. This situation, to our
"ind, is not the real intent of the %ode and its rules.
Be rule other/ise. The a"bi!uit# bet/een 0rticle A,2f4, /hich defines the ter" =/a!e=
and 0rticle :IV of the %ollective &ar!ainin! 0!ree"ent, 0rticle (*+ of the $abor %ode
and Sections A2b4 and 9) of the I"ple"entin! Rules, /hich "ention the ter"s -pa#-
and -salar#-, is "ore apparent than real. &roadl#, the /ord -salar#- "eans a
reco"pense or consideration "ade to a person for his pains or industr# in another
"an=s business. Bhether it be derived fro" -salariu",- or "ore fancifull# fro" -sal,- the
pa# of the Ro"an soldier, it carries /ith it the funda"ental idea of co"pensation for
services rendered. Indeed, there is e"inent authorit# for holdin! that the /ords -/a!es-
and -salar#- are in essence s#non#"ous 2Bords and Phrases, Vol. F* Per"anent
6dition, p. ++ citin! Dopins vs. %ro"/ell, *. N.H.S. *FA,*+9,*A 0pp. Div. +*9> F* 0".
8ur. +A@4. -Salar#,- the et#"olo!# of /hich is the $atin /ord -salariu",- is often used
interchan!eabl# /ith -/a!e-, the et#"olo!# of /hich is the Middle 6n!lish /ord
-/a!en-. &oth /ords !enerall# refer to one and the sa"e "eanin!, that is, a re/ard or
reco"pense for services perfor"ed. $ie/ise, -pa#- is the s#non#" of -/a!es- and
-salar#- 2&lac=s $a/ Dictionar#, .th 6d.4. Inas"uch as the /ords -/a!es-, -pa#- and
-salar#- have the sa"e "eanin!, and co""ission is included in the definition of -/a!e-,
the lo!ical conclusion, therefore, is, in the co"putation of the separation pa# of
petitioners, their salar# base should include also their earned sales co""issions.
The afore1uoted provisions are not the onl# consideration for decidin! the petition in
favor of the petitioners.
Be a!ree /ith the Solicitor <eneral that !rantin!, in "ratia ar"umenti, that the
co""issions /ere in the for" of incentives or encoura!e"ent, so that the petitioners
/ould be inspired to put a little "ore industr# on the Cobs particularl# assi!ned to the",
still these co""issions are direct re"uneration services rendered /hich contributed to
the increase of inco"e of 7uelli! . %o""ission is the reco"pense, co"pensation or
re/ard of an a!ent, sales"an, e3ecutor, trustees, receiver, factor, broer or bailee,
3
/hen the sa"e is calculated as a percenta!e on the a"ount of his transactions or on
the profit to the principal 2&lac=s $a/ Dictionar#, .th 6d., citin! Beiner v. S/ales, (9,
Md. 9(F, 9+9 0.(d ,+A, ,.)4. The nature of the /or of a sales"an and the reason for
such t#pe of re"uneration for services rendered de"onstrate clearl# that co""ission
are part of petitioners= /a!e or salar#. Be tae Cudicial notice of the fact that so"e
sales"en do not receive an# basic salar# but depend on co""issions and allo/ances
or co""issions alone, are part of petitioners= /a!e or salar#. Be tae Cudicial notice of
the fact that so"e sales"an do not received an# basic salar# but depend on
co""issions and allo/ances or co""issions alone, althou!h an e"plo#er'e"plo#ee
relationship e3ists. &earin! in "ind the preceedin! dicussions, if /e adopt the opposite
vie/ that co""issions, do not for" part of /a!e or salar#, then, in effect, Be /ill be
sa#in! that this ind of sales"en do not receive an# salar# and therefore, not entitled to
separation pa# in the event of dischar!e fro" e"plo#"ent. Bill this not be absurdI This
narro/ interpretation is not in accord /ith the liberal spirit of our labor la/s and
considerin! the purpose of separation pa# /hich is, to alleviate the difficulties /hich
confront a dis"issed e"plo#ee thro/n the the streets to face the harsh necessities of
life.
0dditionall#, in !oriano v. +LRC, et al., supra, in resolvin! the issue of the salar# base
that should be used in co"putin! the separation pa#, Be held that5
The co""issions also clai"ed b# petitioner 2=override co""ission=
plus =net deposit incentive=4 are not properl# includible in such base
fi!ure since such co""issions "ust be earned b# actual "aret
transactions attributable to petitioner.
0ppl#in! this b# analo!#, since the co""issions in the present case /ere earned b#
actual "aret transactions attributable to petitioners, these should be included in their
separation pa#. In the co"putation thereof, /hat should be taen into account is the
avera!e co""issions earned durin! their last #ear of e"plo#"ent.
The final consideration is, in carr#in! out and interpretin! the $abor %ode=s provisions
and its i"ple"entin! re!ulations, the /orin!"an=s /elfare should be the pri"ordial
and para"ount consideration. This ind of interpretation !ives "eanin! and substance
to the liberal and co"passionate spirit of the la/ as provided for in 0rticle + of the $abor
%ode /hich states that -all doubts in the i"ple"entation and interpretation of the
provisions of the $abor %ode includin! its i"ple"entin! rules and re!ulations shall be
resolved in favor of labor- 20bella v. N$R%, <.R. No. ,9*9(, 8ul# F),9A*,,9.( S%R0
9+)> Manila 6lectric %o"pan# v. N$R%, et al., <.R. No. ,*,@F, 8ul# 9(,9A*A4, and
0rticle 9,)( of the %ivil %ode /hich provides that -in case of doubt, all labor le!islation
and all labor contracts shall be construed in favor of the safet# and decent livin! for the
laborer.
0%%ORDIN<$H, the petition is hereb# <R0NT6D. The decision of the respondent
National $abor Relations %o""ission is MODIFI6D b# includin! allo/ances and
co""issions in the separation pa# of petitioners 8ose Son!co and 0"ancio Manuel.
The case is re"anded to the $abor 0rbiter for the proper co"putation of said separation
pa#.
SO ORD6R6D.
4