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PAFLU v.

Bureau of Labor Relations


GR L-43760, 21 August 1976 (72 SCRA 396)
Second Division, Fernando (p): 4 concurring

Facts: In the certification election held on February 27, 1976, respondent


Union obtained 429 votes as against 414 of petitioner Union. Again,
admittedly, under the Rules and Regulations implementing the present Labor
Code, a majority of the valid votes cast suffices for certification of the victorious
labor union as the sole and exclusive bargaining agent. There were four votes
cast by employees who did not want any union. On its face therefore,
respondent Union ought to have been certified in accordance with the above
applicable rule. Petitioner, undeterred, would seize upon the doctrine
announced in the case of Allied Workers Association of the Philippines v. Court
of Industrial Relations that spoiled ballots should be counted in determining
the valid votes cast. Considering there were seventeen spoiled ballots, it is the
submission that there was a grave abuse of discretion on the part of
respondent Director.

Issue: Whether Director Noriel acted with grave abuse of discretion in granting
NAFLU as the exclusive bargaining agent of all the employees in the Philippine
Blooming Mills

Held: Director Noriel did not act with grave abuse of discretion. Certiorari does
not lie. The conclusion reached by the Court derives support from the
deservedly high repute attached to the construction placed by the executive
officials entrusted with the responsibility of applying a statute. The Rules and
Regulations implementing the present Labor Code were issued by Secretary
Blas Ople of the Department of Labor and took effect on 3 February 1975, the
present Labor Code having been made known to the public as far back as 1
May 1974, although its date of effectivity was postponed to 1 November 1974,.
It would appear then that there was more than enough time for a really serious
and careful study of such suppletory rules and regulations to avoid any
inconsistency with the Code. This Court certainly cannot ignore the
interpretation thereafter embodied in the Rules. As far back as In re Allen,” a
1903 decision, Justice McDonough, as ponente, cited this excerpt from the
leading American case of Pennoyer v. McConnaughy, decided in 1891: “The
principle that the contemporaneous construction of a statute by the executive
officers of the government, whose duty it is to execute it, is entitled to great
respect, and should ordinarily control the construction of the statute by the
courts, is so firmly embedded in our jurisprudence that no authorities need be
cited to support it.” There was a paraphrase by Justice Malcolm of such a
pronouncement in Molina v. Rafferty,” a 1918 decision: “Courts will and should
respect the contemporaneous construction placed upon a statute by the
executive officers whose duty it is to enforce it, and unless such interpretation
is clearly erroneous will ordinarily be controlled thereby.” Since then, such a
doctrine has been reiterated in numerous decisions. As was emphasized by
Chief Justice Castro, “the construction placed by the office charged with
implementing and enforcing the provisions of a Code should he given
controlling weight.”

The Supreme Court dismissed the petition, with costs against petitioner
PAFLU.

IBAA Employees Union v. Inciong


GR L52415, 23 October 1984 (132 SCRA 663)
Second Division, Makasiar (p): 3 concur, 2 concur in result, 1 took no part

Facts: On June 20, 1975, the Union filed a complaint against the bank for the
payment of holiday pay before the then Department of Labor, National Labor
Relations Commission, Regional Office IV in Manila. Conciliation having failed,
and upon the request of both parties, the case was certified for arbitration on 7
July 1975. On 25 August 1975, Labor Arbiter Ricarte T. Soriano rendered a
decision in the above-entitled case, granting petitioner’s complaint for payment
of holiday pay. Respondent bank did not appeal from the said decision.
Instead, it complied with the order of the Labor Arbiter by paying their holiday
pay up to and including January 1976.

On 16 December 1975, Presidential Decree 850 was promulgated amending,


among others, the provisions of the Labor Code on the right to holiday pay.
Accordingly, on 16 February 1976, by authority of Article 5 of the same Code,
the Department of Labor (now Ministry of Labor) promulgated the rules and
regulations for the implementation of holidays with pay. The controversial
section thereof reads as “Status of employees paid by the month. — Employees
who are uniformly paid by the month, irrespective of the number of working
days therein, with a salary of not less than the statutory or established
minimum wage shall be presumed to be paid for all days in the month whether
worked or not.” On 23 April 1976, Policy Instruction 9 was issued by the then
Secretary of Labor (now Minister) interpreting the above-quoted rule. The bank,
by reason of the ruling laid down by the rule implementing Article 94 of the
Labor Code and by Policy Instruction 9, stopped the payment of holiday pay to
an its employees.

On 30 August 1976, the Union filed a motion for a writ of execution to enforce
the arbiter’s decision of 25 August 1975, which the bank opposed. On 18
October 1976, the Labor Arbiter, instead of issuing a writ of execution, issued
an order enjoining the bank to continue paying its employees their regular
holiday pay. On 17 November 1976, the bank appealed from the order of the
Labor Arbiter to the NLRC. On 20 June 1978, the NLRC promulgated its
resolution en banc dismissing the bank’s appeal, and ordering the issuance of
the proper writ of execution. On 21 February 1979, the bank filed with the
Office of the Minister of Labor a motion for reconsideration/appeal with urgent
prayer to stay execution. On 13 August 1979,s the NLRC issued an order
directing the Chief of Research and Information of the Commission to compute
the holiday pay of the IBAA employees from April 1976 to the present in
accordance with the Labor Arbiter dated 25 August 1975. On 10 November
1979, the Office of the Minister of Labor, through Deputy Minister Amado G.
Inciong, issued an order setting aside the resolution en banc of the NLRC dated
20 June 1978, and dismissing the case for lack of merit. Hence, the petition for
certiorari charging Inciong with abuse of discretion amounting to lack or excess
of jurisdiction.

Issue: Whether the Ministry of Labor is correct in determining that monthly


paid employees are excluded from the benefits of holiday pay.

Held: From Article 92 of the Labor Code, as amended by Presidential Decree


850, and Article 82 of the same Code, it is clear that monthly paid employees
are not excluded from the benefits of holiday pay. However, the implementing
rules on holiday pay promulgated by the then Secretary of Labor excludes
monthly paid employees from the said benefits by inserting, under Rule IV,
Book Ill of the implementing rules, Section 2, which provides that: “employees
who are uniformly paid by the month, irrespective of the number of working
days therein, with a salary of not less than the statutory or established
minimum wage shall be presumed to be paid for all days in the month whether
worked or not.” Even if contemporaneous construction placed upon a statute
by executive officers whose duty is to enforce it is given great weight by the
courts, still if such construction is so erroneous, the same must be declared as
null and void. So long, as the regulations relate solely to carrying into effect
the provisions of the law, they are valid. Where an administrative order betrays
inconsistency or repugnancy to the provisions of the Act, the mandate of the
Act must prevail and must be followed. A rule is binding on the Courts so long
as the procedure fixed for its promulgation is followed and its scope is within
the statutory authority granted by the legislature, even if the courts are not in
agreement with the policy stated therein or its innate wisdom. Further,
administrative interpretation of the law is at best merely advisory, for it is the
courts that finally determine what the law means.

The Supreme Court granted the petition, set aside the order of the Deputy
Minister of Labor, and reinstated the 25 August 1975 decision of the Labor
Arbiter Ricarte T. Soriano.

Aisporna v. CA
GR L-39419, 12 April 1982 (113 SCRA 459)
First Division, de Castro (p): 5 concur, 1 took no part

Facts: Since 7 March and on 21 June 1969, a Personal Accident Policy was
issued by Perla Compania de Seguros, through its authorized agent Rodolfo
Aisporna, for a period of 12 months with the beneficiary designated as Ana M.
Isidro. The insured died by violence during lifetime of policy. Mapalad Aisporna
participated actively with the aforementioned policy.
For reason unexplained, an information was filed against Mapalad Aisporna,
Rodolfo’s wife, with the City Court of Cabanatuan for violation of Section 189 of
the Insurance Act on 21 November 1970, or acting as an agent in the soliciting
insurance without securing the certificate of authority from the office of the
Insurance Commissioner. Mapalad contends that being the wife of true agent,
Rodolfo, she naturally helped him in his work, as clerk, and that policy was
merely a renewal and was issued because Isidro had called by telephone to
renew, and at that time, her husband, Rodolfo, was absent and so she left a
note on top of her husband’s desk to renew. On 2 August 1971, the trial court
found Mapalad guilty and sentenced here to pay a fine of P500.00 with
subsidiary imprisonment in case of insolvency and to pay the costs. On appeal
and on 14 August 1974, the trial court’s decision was affirmed by the appellate
court (CA-GR 13243-CR). Hence, the present recourse was filed on 22 October
1974. On 20 December 1974, the Office of the Solicitor General, representing
the Court of Appeals, submitted that Aisporna may not be considered as having
violated Section 189 of the Insurance Act.

Issue: Whether Mapalad Aisporna is an insurance agent within the scope or


intent of the Insurance Act

Held: Legislative intent must be ascertained from a consideration of the statute


as a whole. The particular words, clauses and phrases should not be studied
as detached and isolated expressions, but the whole and every part of the
statute must be considered in fixing the meaning of any of its parts and in
order to produce harmonious whole. In the present case, the first paragraph of
Section 189 prohibits a person from acting as agent, subagent or broker in the
solicitation or procurement of applications for insurance without first procuring
a certificate of authority so to act from the Insurance Commissioner; while the
second paragraph defines who is an insurance agent within the intent of the
section; while the third paragraph prescribes the penalty to be imposed for its
violation. The appellate court’s ruling that the petitioner is prosecuted not
under the second paragraph of Section 189 but under its first paragraph is a
reversible error, as the definition of insurance agent in paragraph 2 applies to
the paragraph 1 and 2 of Section 189, which is “any person who for
compensation shall be an insurance agent within the intent of this section.”
Without proof of compensation, directly or indirectly, received from the
insurance policy or contract, Mapalad Aisporna may not be held to have
violated Section 189 of the Insurance Act.

The Supreme Court reversed the appealed judgment and acquitted the accused
of the crime charged, with costs de oficio.

Board of Administrators of the PVA v. Bautista


GR L-37867, 22 February 1982 (112 SRCA 59)
First Division, Guerrero (p): 5 concurring
Facts: Calixto Gasilao was a veteran in good standing during the last World
War that took active participation in the liberation drive against the enemy,
and due to his military service, he was rendered disabled. The Philippine
Veterans Administration, formerly the Philippine Veterans Board, (now
Philippine Veterans Affairs Office) is an agency of the Government charged with
the administration of different laws giving various benefits in favor of veterans
and their orphans/or widows and parents. On July 23, 1955, Gasilao filed a
claim for disability pension under Section 9 of Republic Act 65, with the
Philippine Veterans Board, alleging that he was suffering from Pulmonary
Tuberculosis (PTB), which he incurred in line of duty. Due to Gasilao’s failure
to complete his supporting papers and submit evidence to establish his service-
connected illness, his claim was disapproved by the Board on 18 December
1955. On 8 August 1968, Gasilao was able to complete his supporting papers
and, after due investigation and processing, the Board of Administrators found
out that his disability was 100% thus he was awarded the full benefits of
section 9 of Republic Act 65.

Later on, Republic Act 5753 was approved on 22 June 1969, providing for an
increase in the basic pension and additional pension for the wife and each of
the unmarried minor children. Gasilao’s monthly pension was, however,
increased only on 15 January 1971, and by 25% of the increases provided by
law, due to the fact that it was only on said date that funds were released for
the purpose, and the amount so released was only sufficient to pay only 25% of
the increase. On 15 January 1972, more funds were released to implement
fully Republic Act 5753 and allow payment in full of the benefits thereunder
from said date.

In 1973, Gasilao filed an action against the Board to recover the pension,
which he claims he is entitled to, from July 1955, when he first filed his
application for pension, up to 1968 when his pension was finally approved. The
Board contends, however, based on Section 15 of Republic Act 65, that since
the section impliedly requires that the application filed should first be approved
by the Board of Administrators before the claimant could receive his pension,
therefore, an award of pension benefits should commence from the date of
approval of the application.

Issue: Whether Gasilao is entitled to the pension from 1955 instead of from
1968.

Held: As it is generally known, the purpose of Congress in granting veteran


pensions is to compensate a class of men who suffered in the service for the
hardships they endured and the dangers they encountered, and more
particularly, those who have become incapacitated for work owing to sickness,
disease or injuries sustained while in line of duty. A veteran pension law is,
therefore, a governmental expression of gratitude to and recognition of those
who rendered service for the country, especially during times of war or
revolution, by extending to them regular monetary aid. For this reason, it is the
general rule that a liberal construction is given to pension statutes in favor of
those entitled to pension. Courts tend to favor the pensioner, but such
constructional preference is to be considered with other guides to
interpretation, and a construction of pension laws must depend on its own
particular language. In the present case, Republic Act 65 is a veteran pension
law which must be accorded a liberal construction and interpretation in order
to favor those entitled to rights, privileges, and benefits granted thereunder,
among which are the right to resume old positions in government, educational
benefits, the privilege to take promotion examinations, a life pension for the
incapacited, pension for widow and children, and hospitalization and medical
benefits. Upholding the Board that the pension awards are made effective only
upon approval of the application, this would be dependent upon the discretion
of the Board which had been abused in this case through inaction extending
for 12 years. Such stand, therefore does not appear to be, or simply is not, in
consonance with the spirit and intent of the law. Gasilao’s claim was
sustained.

The Supreme Court modified the judgment of the court a quo, ordering the
Board of Administrators of the Philippine Veterans Administration (now the
Philippine Veterans Affairs Office) to make Gasilao’s pension effective 18
December 1955 at the rate of P50.00 per month plus P10.00 per month for
each of his then unmarried minor children below 18, and the former amount
increased to P100.00 from 22 June 1957 to 7 August 1968; and declaring the
differentials in pension to which said Gasilao, his wife and his unmarried
minor children below 18 are entitled for the period from 22 June 1969 to 14
January 1972 by virtue of Republic Act 5753 subject to the availability of
Government funds appropriated for the purpose.

Sanciangco v. Rono
GR L-68709, 19 July 1985 (137 SCRA ___)
En Banc, Melencio-Herrera (p): 10 concur, 1 dissents in separate opinion, 1
took no part

Facts: Petitioner was elected Barangay Captain of Barangay Sta. Cruz, Ozamiz
City, in the 17 May 1982 Barangay elections. Later, he was elected President of
the Association of Barangay Councils (ABC) of Ozamiz City by the Board of
Directors of the said Association. As the President of the Association, petitioner
was appointed by the President of the Philippines as a member of the City’s
Sangguniang Panlungsod. On 27 March 1984, petitioner filed his Certificate of
Candidacy for the 14 May 1984 Batasan Pambansa elections for Misamis
Occidental under the banner of the Mindanao Alliance. He was not successful
in the said election. Invoking Section 13(2), Article 5 of BP 697, petitioner
informed Vice-Mayor Benjamin A. Fuentes, Presiding Officer of the
Sangguniang Panlungsod, that he was resuming his duties as member of that
body. The matter was elevated to the Minister of Local Government Jose A.
Roño, who ruled that since petitioner is an appointive official, he is deemed to
have resigned from his appointive position upon the filing of his Certificate of
Candidacy.

Issue: Whether the accused is considered resigned from the latter’s filing of a
certificate of candidacy for the Batasan.

Held: Although it may be that Section 13(2), Batas Pambansa 697, admits of
more than one construction, taking into sconsideration the nature of the
positions of the officials enumerated therein, namely, governors, mayors,
members of the various sanggunians or barangay officials, the legislative intent
to distinguish between elective positions in section 13(2), as contrasted to
appointive positions in section 13(l) under the all-encompassing clause reading
“any person holding public appointive office or position,” is clear. It is a rule of
statutory construction that when the language of a particular section of a
statute admits of more than one construction, that construction which gives
effect to the evident purpose and object sought to be attained by the enactment
of the statute as a whole, must be followed. A statute’s clauses and phrases
should not be taken as detached and isolated expressions, but the whole and
every part thereof must be considered in fixing the meaning of any of its
parts. The legislative intent to cover public appointive officials in subsection
(1), and officials mentioned in subsection (2) which should be construed to
refer to local elective officials, can be gleaned from the proceedings of the
Batasan Pambansa. Since petitioner is unquestionably an appointive member
of the Sangguniang Panlungsod of Ozamiz City, as he was appointed by the
President as a member of the City’s Sangguniang Panlungsod by virtue of his
having been elected President of the Association of Barangay Councils, he is
deemed to have ipso facto ceased to be such member when he filed his
certificate of candidacy for the 14 May 1984 Batasan elections.

The Supreme Court dismissed the petition and denied the writs prayed for,
holding that there was no grave abuse of discretion on the part of the officials;
without costs.

Araneta vs. Hon. Concepcion Case Digest

Facts:

Luis Araneta filed an action for legal separation on the ground of adultery against
his wife Emma. After the issues were joined, Emma filed an omnibus petition,
supported by her Affidavit, to secure custody of their three minor children, a
monthly support for herself and said children, the return of her passport, to
enjoin Luis from ordering his hirelings from harassing and molesting her.
Luis opposed the petition, denying the misconduct imputed to him and alleging
that Emma had abandoned the children. He prayed that the parties be required
to submit their respective evidence.

Judge Concepcion resolved the omnibus petition, granting the custody of the
children to Emma and a monthly allowance of P2,300 for support for her and
the children, P300 for a house and P2,000 as attorney’s fees. Upon refusal of the
judge to reconsider the order, Luis filed a petition for certiorari against said order
and for mandamus to compel the respondent judge to require the parties to
submit evidence before deciding the omnibus petition.

The main reason given by the judge, for refusing Luis’ request that evidence be
allowed to be introduced on the issues, is the prohibition contained in Article
103 of the Civil Code, which reads as follows:

“ART. 103. An action for legal separation shall in no case be tried before six
months shall have elapsed since the filing of the petition.” (now Art 58, Family
Code)

Issue:

Does the rule prohibiting the hearing of an action for legal separation before the
lapse of six months from the filing of the petition preclude the court from acting
on an omnibus petition for support and custody?

Held:

It is conceded that the period of six months fixed therein is evidently intended
as a cooling off period to make possible a reconciliation between the spouses.
The recital of their grievances against each other in court may only fan their
already inflamed passions against one another, and the lawmaker has imposed
the period to give them opportunity for dispassionate reflection. But this
practical expedient, necessary to carry out legislative policy, does not have the
effect of overriding other provisions such as the determination of the custody of
the children and alimony and support pendente lite according to the
circumstances. (Article 105, Civil Code, now Art. 49, Family Code.) The law
expressly enjoins that these should be determined by the court according to the
circumstances. If these are ignored or the courts close their eyes to actual facts,
rank injustice may be caused.
The rule is that all the provisions of the law even if apparently contradictory,
should be allowed to stand and given effect by reconciling them if necessary.

“The practical inquiry in litigation is usually to determine what a particular


provision, clause or word means. To answer it one must proceed as he would
with any other composition — construe it with reference to the leading idea or
purpose of the whole instrument. A statute is passed as a whole and not in parts
or sections and is animated by one general purpose and intend. Consequently,
each part of section should be construed in connection with every other part or
section so as to produce a harmonious whole. Thus it is not proper to confine
interpretation to the one section to be construed.” (Southerland, Statutory
Construction section 4703, pp. 336-337.)

Thus the determination of the custody and alimony should be given effect and
force provided it does not go to the extent of violating the policy of the cooling off
period. That is, evidence not affecting the cause of the separation, like the actual
custody of the children, the means conducive to their welfare and convenience
during the pendency of the case, these should be allowed that the court may
determine which is best for their custody.

The writ prayed for is hereby issued and the Respondent judge or whosoever
takes his place is ordered to proceed on the question of custody and support
pendente lite in accordance with this opinion. The court’s order fixing the
alimony and requiring payment is reversed. Without costs. (Araneta vs. Hon.
Concepcion, G.R. No. L-9667, July 31, 1956)

People v. Martinez et al.

G.R. No. 191366, December 13, 2010

FACTS: On September 2, 2006 at around 1245 PM, PO1 Bernard Azarden was
on duty at the Police Community Precinct along Arellano St., Dagupan City
when a concerned citizen reported that a pot session was underway in the
house of accused Rafael Gonzales in Trinidad Subdivision, Dagupan City. PO1
Azardan, PO1 Alejandro dela Cruz and members of Special Weapons and
Tactics (SWAT) proceeded to aforesaid house. Upon inquiry from people in the
area, the house of Gonzales was located. As the team entered the house,
accused Orlando Doria was arrested while coming out. Inside the house were
Gonzales, Arnold Martinez, Edgar Dizon, and Rezin Martinez. Seized from the
accused were open plastic sachets (containing shabu residue), pieces of rolled
used aluminum foil and pieces of used aluminum foil. The accused were
arrested and brought to police station, seized items were sent to the
Pangasinan Provincial Police Crime Laboratory. All accused, except for Doria,
were found positive for methylamphetamine HCL.

On February 13, 2008, RTC found Arnold Martinez, Edgar Dizon, Rezin
Martinez and Rafael Gonzales guilty beyond reasonable doubt under Sec. 13 in
relation to Sec. 11, Art. II of RA 9165 and sentenced each to life imprisonment
and fined PHP 500,000 plus cost of suit.

The CA supported the findings of the lower court.

ISSUE: Were the guilt of the accused proven beyond reasonable doubt?

RULING: No, the Court finds that the prosecution failed to prove the guilt of
the accused beyond reasonable doubt because (1) evidence against the accused
are inadmissible and (2) even if the evidence were admissible, the chain of
custody was not duly established .

The evidence is inadmissible because of the illegal arrest, search and


seizure. Searches and seizures without a warrant are valid in (1) incidence of
lawful arrest, (2) “plain view” search of evidence, (3) moving vehicle search, (4)
consented search, (5) customs search, (6) stop and frisk, (7)exigent and
emergency cases. Under Rule 113, Sec. 5 of RRCP warrantless arrest can only
be done in in flagrante cases, hot pursuit cases, and fugitive cases. The arrest
of the accused-appellants were based solely on the report of a concerned
citizen, no surveillance of the place was conducted. Under Rule 113, fugitive
case does not apply. In flagrante and hot pursuit case may apply only upon
probable cause, which means actual belief or reasonable ground of suspicion.
It is reasonable ground of suspicion when suspicion of a person to be arrested
is probably guilty of the offense based on actual facts, that is, supported by
circumstances. In case at bar, this is not the case since the entire arrest was
based on uncorroborated statement of a concerned citizen.

The chain of custody as outlined in Sec. 21, Art. II of RA 9165 was not
observed as no proper inventory, photographing, was done in the presence of
the accused nor were there representatives from the media, the DOJ and any
popularly elected official present, although in warrantless seizures, marking
and photographing of evidence may be done at the nearest police station.

Court sets aside and reverses the decision of the CA dated August 7,
2009, acquits the accused and orders their immediate release.

Republic of the Philippines


SUPREME COURT
Manila

FIRST DIVISION

G.R. No. L-49774 February 24, 1981

SAN MIGUEL CORPORATION (CAGAYAN COCA-COLA PLANT), petitioner,


vs.
Hon. AMADO G. INCIONG, Deputy Minister of Labor and CAGAYAN COCA-
COLA FREE WORKERS UNION,respondents.

Actions sought to be redressed:

On January 3, 1977, Cagayan Coca-Cola Free Workers Union, private


respondent herein, filed a complaint against San Miguel Corporation (Cagayan
Coca-Cola Plant), petitioner herein, alleging failure or refusal of the latter to
include in the computation of 13th- month pay such items as sick, vacation or
maternity leaves, premium for work done on rest days and special holidays,
including pay for regular holidays and night differentials.

The Regional Office No. 10 ruled in favor of the union which ordered herein
petitioner “to pay the difference of whatever earnings and the amount
actually received as 13th month pay excluding overtime premium and
emergency cost of living allowance.” The order of the Regional Office was
affirmed by herein public respondent Deputy Minester Inciong in behalf of the
Minister of Labor.

Issue:

Whether or not payments for sick, vacation or maternity leaves, premium for
work done on rest days and special holidays, including pay for regular holidays
and night differentials are included in the computation of 13th-month pay under
Presidential Decree 851

CONTENTIONS OF THE RESPONDENTS:

Public respondent's consistent stand on the matter since the effectivity of


Presidential Decree 851 is that "payments for sick leave, vacation leave, and
maternity benefits, as well as salaries paid to employees for work performed on
rest days, special and regular holidays are included in the computation of the
13th-month pay.

On its part, private respondent cited innumerable past rulings, opinions and
decisions rendered by then Acting Labor Secretary Amado G. Inciong to the effect
that, "in computing the mandatory bonus, the basis is the total gross basic salary
paid by the employer during the calendar year. Such gross basic salary includes:
(1) regular salary or wage; (2) payments for sick, vacation and maternity leaves;
(3) premium for work performed on rest days or holidays: (4) holiday pay for
worked or unworked regular holiday; and (5) emergency allowance if given in the
form of a wage adjustment."

CONTENTIONS OF HEREIN PETITIONER:

1.) Presidential Decree 851 speaks only of basic salary as basis for the
determination of the 13th-month pay;
2.) Submits that payments for sick, vacation, or maternity leaves, night
differential pay, as well as premium paid for work performed on rest days,
special and regular holidays do not form part of the basic salary;
3.) Concludes that the inclusion of those payments in the computation of the
13th-month pay is clearly not sanctioned by Presidential Decree 851.
RULING OF THE COURT:

The Court finds petitioner's contention meritorious.

The Court cited the provisions of the law in dispute which are Section 1 of
Presidential Decree 851 and Section 2 of the Rules and Regulations.

Under Presidential Decree 851 and its implementing rules, the basic salary of an
employee is used as the basis in the determination of his 13th-month pay. Any
compensations or remunerations which are deemed NOT part of the basic
pay is excluded as basis in the computation of the mandatory bonus.

Under the Rules and Regulations Implementing Presidential Decree 851, the
following compensations are deemed not part of the basic salary:

a) Cost-of-living allowances granted pursuant to Presidential Decree


525 and Letter of Instructions No. 174;

b) Profit sharing payments;

c) All allowances and monetary benefits which are not considered or


integrated as part of the regular basic salary of tile employee at the
time of the promulgation of the Decree on December 16, 1975.

Under a later set of Supplementary Rules and Regulations Implementing


Presidential Decree 851 issued by the then Labor Secretary Blas
Ople, OVERTIME PAY, EARNINGS AND OTHER REMUNERATIONS ARE
EXCLUDED AS PART OF THE BASIC SALARY AND IN THE COMPUTATION
OF THE 13TH-MONTH PAY.

The exclusion of cost-of-living allowances under Presidential Decree 525 and


Letter of Instructions No. 174, and profit sharing payments indicate the intention
to strip basic salary of other payments which are properly considered as "fringe"
benefits. Likewise, the catch-all exclusionary phrase "all allowances and
monetary benefits which are not considered or integrated as part of the
basic salary" shows also the intention to strip basic salary of any and all
additions which may be in the form of allowances or "fringe" benefits.

Moreover, the Supplementary Rules and Regulations Implementing Presidential


Decree 851 is even more emphatic in declaring that earnings and other
remunerations which are not part of the basic salary shall not be included in the
computation of the 13th-month pay.

While doubt may have been created by the prior Rules and Regulations
Implementing Presidential Decree 851 which defines basic salary to include all
remunerations or earnings paid by an employer to an employee, this cloud is
dissipated in the later and more controlling Supplementary Rules and
Regulations which categorically, exclude from the definition of basic salary
earnings and other remunerations paid by employer to an employee. A cursory
perusal of the two sets of Rules indicates that what has hitherto been the subject
of a broad inclusion is now a subject of broad exclusion. The Supplementary
rules and Regulations cure the seeming tendency of the former rules to include
all remunerations and earnings within the definition of basic salary.

The all-embracing phrase "earnings and other renumeration" which are deemed
not part of the basic salary includes within its meaning payments for sick,
vacation, or maternity leaves. Maternity premium for works performed on rest
days and special holidays pays for regular holidays and night differentials. As
such they are deemed not part of the basic salary and shall not be considered in
the computation of the 13th-month they, were not so excluded, it is hard to find
any "earnings and other remunerations" expressly excluded in the computation
of the 13th-month pay. Then the exclusionary provision would prove to be Idle
and with no purpose.

According to the Court, the conclusion finds basis in Section 87 and Section 93
of the Labor Code.

It is clear that overtime pay is an additional compensation other than and added
to the regular wage or basic salary, for reason of which such is categorically
excluded from the definition of basic salary under the Supplementary Rules and
Regulations Implementing Presidential Decree 851.

It is likewise clear that prernium for special holiday which is at least 30% of the
regular wage is an additional compensation other than and added to the regular
wage or basic salary. For similar reason it shall not be considered in the
computation of the 13th- month pay.

Lopez v. El Hogar Filipino

Case No. 152

G.R. No. L-22678 (January 12, 1925)

Chapter VI, Page 251, Footnote No. 16

FACTS:

Pursuant to a contract of loan and mortgage, El Hogar Filipino caused the


mortgaged properties to be sold publicly in an extra-judicial sale. Lopez and

Javelona, in whose favor the loan was made, sought to have the contract of
loan

and mortgage annulled on the ground that the agreement was usurious. They

contended that the court erred in holding that the word “void”, as used in the
Usury

Law, was intended to make the entire transaction a nullity.

ISSUE:

W/N the meaning of the word “void”, as used in the Usury Law, was intended

to make the entire transaction a nullity.

HELD:

No. From the very context of the law, the legislature, in using the word “void”,

did not intend that the transaction should be a complete nullity. It was only
with

respect to the usurious interest. The intention of the legislature must be


ascertained,

not from the consideration of a single word or a particular phrase of the law,
but from

the context of the whole law or from a portion thereof, as compared with the
whole.

Every part of the act should be read with the purpose of discovering the mind
of the

legislature.