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Distinguish "salary" from "wages." Are these subject to attachment and I agree, with some conditions. In computing separation pay, the monthly salary
execution? should include commissions because commissions received by a salesman is
part of his salary.
SUGGESTED ANSWER:
But for allowances to be included as part of salary, they should be for services
The term "WAGES" applies to compensation for manual labor, skilled or rendered or to be rendered, like a cost of living allowance. But transportation
unskilled, while salary denotes a compensation for a higher degree of and representation allowances are not considered as part of salary because
employment. (Gaa vs. Court of Appeals, 140 SCRA 304), they are to meet expenses for transportation and representation. Thus, cost of
ALTERNATIVE ANSWER: living allowances, but not transportation or representation allowances, shall be
included as part of salary in the computation of separation pay.
"WAGES" are those paid to any employee as his remuneration or earnings
payable by an employer for work done or to be done, or for services rendered
or to be rendered. QUESTION NO. 3
On the other hand, "SALARY" is used in the law that provides for a 13th-month Wages; Employee‘s Wage; Facilities (2010)
pay. In this law, basic salary includes all remuneration or earnings paid by an
employer to his employees for services rendered, but does not include A worked as a room boy in La Mallorca Hotel. He sued for underpayment of
allowances or monetary benefits which are not considered or integrated as wages before the NLRC, alleging that he was paid below the minimum wage.
part of the regular or basic salary. (Art. 97(f), Labor Code; Sec, 2(b), P.D. No. The employer denied any underpayment, arguing that based on long standing,
851) unwritten policy, the Hotel provided food and lodging to its housekeeping
employees, the costs of which were partly shouldered by it and the balance
2) Under Article 1708 of the Civil Code, only "wages" are exempt from was charged to the employees. The employees’ corresponding share in the
attachment or execution. Salaries are not exempt from attachment or costs was thus deducted from their wages. The employer concluded that such
execution. (Gaa vs. Court of Appeals, 140 SCRA 304). valid deduction naturally resulted in the payment of wages below the
prescribed minimum. If you were the Labor Arbiter, how would you rule?
Explain. (3%)
QUESTION NO. 2
Wages; Computation of Basic Salary (1997)
(B) The provision of deductible facilities is voluntarily accepted by the No. The grant of a bonus is a prerogative, not an obligation, of the employer.
employee (Traders Royal Bank v. NLRC. 189 SCRA 274 (1990). The matter of giving a
bonus over and above that which is required by law is entirely dependent on
(C) The facilities are charged at the fair and reasonable value. Mere availment the financial capability of the employer to give it. (Businessday v. NLRC. 221
is not sufficient to allow deduction from the employees‘ wages. (Mayon Hotel SCRA 9 (1993).
& restaurant v. Adarna, 458 SCRA 609 [2005]).
Hence, given the circumstances, ABC Bank cannot be compelled to continue
QUESTION NO. 5 paying its employees the traditional mid-year and Christmas bonuses in
Wages; Bonus (2002) addition to the 13th month pay.
The projected bonus for the employees of Suerte Co. was 50% of their
monthly compensation. Unfortunately, due to the slump in the business, the
president reduced the bonus to 5% of their compensation. Can the company
unilaterally reduce the amount of bonus? Explain briefly. (2%)
QUESTION NO. 7 policy, and cannot anymore be removed. (Sevilla Trading v. Semana, 428
SCRA 239 [2004]) This is deliberate, consistent and practiced over a long
Wages; Bonus; Nature (1995) period of time
What is a bonus? When is it demandable as a matter of right? Explain.
SUGGESTED ANSWER: QUESTION NO. 9
A bonus is money given in addition to an employee's usual compensation. It Lito was anticipating the bonus he would receive for 2013. Aside from the 13th
may be given as a gratuity, as an act of liberality. But a bonus is demandable month pay, the company has been awarding him and his other co-employees
as a matter of right if it is made a legal obligation by law or in a collective a two to three months bonus for the last 10 years. However, because of poor
bargaining agreement or in a contract of employment or by its having been over-all sales performance for the year, the company unilaterally decided to
given for such a long time such that the receipt of a bonus has ripened into a pay only a one month bonus in 2013. Is Lito’s employer legally allowed to
right reduce the bonus? (2014 Bar Question)
Vigilant Union, the rank-and-file bargaining agent, charged the company with Wire and Cable Co., Inc. and the Court of Appeals, G.R. No. 155059, April 29,
Unfair Labor Practice on the ground that (1) no consultations had been made 2005).
on who would render overtime work; and (2) the unilateral overtime pay rate
reduction is a violation of Article 100 (entitled Prohibition Against Elimination
or Diminution of Benefits) of the Labor Code. SUGGESTED ALTERNATIVE ANSWER:
Is the union position meritorious? (2013 Bar Questions) No. Having been enjoyed for the last 10 years, the granting of the bonus has
ripened into a company practice or policy which can no longer be peremptorily
withdrawn. Art. 100 of the Labor Code prohibits the diminution or elimination
SUGGESTED ANSWER: by the employer of the employees' existing benefits.
The allegation of ULP by the Union is not meritorious. The selection as to who
would render overtime work is a management prerogative.
Because of its poor performance over-all, FEB decided to cut back on the LKG Garments Inc. makes baby clothes for export. As part of its measures to
bonuses this year and limited itself to the following: meet its orders, LKG requires its employees to work beyond eight (8) hours
everyday, from Monday to Saturday. It pays its employees an additional 35%
of their regular hourly wage for work rendered in excess of eight (8) hours per
day. Because of additional orders, LKG now requires two (2) shifts of workers
(a) 13th month pay; with both shifts working beyond eight (8) hours but only up to a maximum of
(b) 14th month pay; four (4) hours. Carding is an employee who used to render up to six (6) hours
of overtime work before the change in schedule. He complains that the change
(c) Christmas basket worth P4,000; and adversely affected him because now he can only earn up to a maximum of four
(4) hours worth of overtime pay. Does Carding have a cause of action against
(d) Gift check worth P2,000 the company? (2015 Bar Question)
Katrina, an employee of FEB, who had gotten a rating of "Excellent" for the
last 3 quarters was looking forward to the bonuses plus the productivity
incentive bonus. After learning that FEB had modified the bonus scheme, she SUGGESTED ANSWER:
objected. Is Katrina's objection justified? Explain. (2015 Bar Question)
NO. A change in work schedule is a management prerogative of LKG. Thus,
Carding has no cause of action against LKG if, as a result of its change to two
(2) shifts, he now can only expect a maximum of four (4) hours overtime work.
SUGGESTED ANSWER: Besides, Art. 97 of the Labor Code does not guarantee
Wages; 13th month pay (1994) 2.) After the 1981 San Miguel ruling, the High Court decided the case of
Philippine Duplicators Inc. vs. NLRC, on 11 November 1993, Accordingly,
Concepcion Textile Co. included the overtime pay, night-shift differential pay, management may undertake to exclude sick leave, vacation leave, maternity
and the like in the computation of its employees' 13th-month pay. leave, premium pay for regular holiday, night differential pay and cost of
Subsequently, with the promulgation of the decision of the Supreme Court in living allowance. Sales commissions, however, should be included based on
the case of San Miguel Corporation vs. Inciong (103 SCRA 139) holding that the settled rule as earlier enunciated in Songco vs. NLRC, 183 SCRA 610.
these other monetary claims should not be included in the computation of the
13thmonth pay, Concepcion Textile Co. sought to recover under the principle
of solutio indebiti its overpayment of its employees' 13th-month pay, by
debiting against future 13th-month payments whatever excess amounts it had QUESTION NO. 13
previously made. Wages; 13th month pay (1998)
(1) Is the Company's action tenable? What would be your advice to your client, a manufacturing company, who asks
(2) With respect to the payment of the 13th-month pay after the San for your legal opinion on whether or not the 13th Month Pay Law (Presidential
Miguel Corporation, ruling, what arrangement, if any, must the Company make Decree No. 851) covers a casual employee who is paid a dally wage? (5%)
in order to exclude from the 13th-month pay all earnings and remunerations SUGGESTED ANSWER
other than the basic pay.
I will advise the manufacturing company to pay the casual employee 13th
SUGGESTED ANSWER: Month Pay if such casual employee has worked for at least one (1) month
The Company's action is not tenable. The principle of salutio indebiti which is during a calendar year. The law on the 13th Month Pay provides that
a civil law concept is not applicable in labor law. Thus, solutio indebiti is not employees are entitled to the benefit of said law regardless of their designation
applicable to the instant case, (Davao Fruits Corporations vs. National Labor or employment status.
Relations Commission, et at. 225 SCRA 562) The Supreme Court ruled in Jackson BuildingCondominium Corporation v.
ALTERNATIVE ANSWERS: NLRC, 246 SCRA 329, (1995) interpreting P.D. No. 851, as follows: xxx
employees are entitled to the thirteenthmonth pay benefits regardless of their
a) The Company's action would be tenable if payment was done by mistake, designation and irrespective of the method by which their wages are paid.
In which case recovery can be done under the principle of solutio indebiti. But
if there was no mistake, the Company's action would be untenable because it
would violate Article 100 of the Labor Code which prohibits elimination or QUESTION NO. 14
diminution of benefits.
In computing for 13th month pay, Balagtas Company used as basis both the
b) No. The Company's action is not tenable. The grant by Concepcion Textile employee’s regular base pay and the cash value of his unused vacation and
Co. of a better formula, more favorable to the employee, constituted a valid sick leaves. After two and a half years, it announced that it had made a mistake
offer by the company as the offerer and the employees as the offeree. There and was discontinuing such practice. Is the management action legally
having been a meeting of the minds of the parties, the rights and obligations justified?
arising therefrom were valid. Thus, any amount received by virtue thereof
could not be recovered, much less taken away unilaterally. The principle does (A) Yes, since 13th month pay should only be one-twelfth of the regular pay.
not apply to the case at bar.
(B) No, since the erroneous computation has ripened into an established,
nonwithdrawable practice.
Who among the following is not entitled to 13th month pay? “Piece rate employees” are those who are paid by results or other non-time
basis. As such they are NOT entitled to overtime pay for work done beyond
(A) Stephanie, a probationary employee of a cooperative bank who rendered eight hours if
six (6) months of service during the calendar year before filing her resignation;
(A) their workplace is away from the company's principal place of work.
(B) Rafael, the secretary of a Senator;
(B) they fail to fill up time sheets.
(C) Selina, a cook employed by and who lives with an old maid and who also
tends the sari-sari store of the latter; (C) the product pieces they do are not countable.
(D) Roger, a house gardener who is required to report to work only thrice a (D) the piece rate formula accords with the labor department‘s approved
week. rates.
QUESTION NO. 16
No. IX. a. Dennis was a taxi driver who was being paid on the "boundary"
system basis. He worked tirelessly for Cabrera Transport Inc. for fourteen (14)
years until he waseligible for retirement. He was entitled to retirement benefits.
During the entire duration of his service, Dennis was not given his 13th month
pay or his service incentive leave pay.
Is Dennis entitled to 13th month pay and service leave incentive pay? Explain.
(5%)
SUGGESTED ANSWER:
No, a taxi driver paid under the ―boundary system‖ is not entitled to a 13th
and SIL pay.
Hence, his retirement pay should be computed solely on the basis of his salary.
Specifically, Sec. 3 (e) of the Rules and Regulations implementing P.D. 851
excludes form the obligation of 13th Month Pay ―Employees of those who are
paid on xxx boundary ―basis.
On the other hand, Sec. 1(d), Rule V, Book III of the Omnibus Rule provides
that those ―employees whose performance is unsupervised by the employer‖