ROGELIO REYES, G.R. No. 160233
Petitioner,
Present:
- versus - Ynares-Santiago, J. (Chairperson),
Austria-Martinez,
Chico-Nazario,
and
Nachura, JJ.
NATIONAL
LABOR RELATIONS
COMMISSION,
Fifth Division, and Promulgated:
UNIVERSAL
ROBINA CORPORATION
GROCERY
DIVISION,
Respondents.
x ----------------------------------------------------------------------------------------
x
YNARES-SANTIAGO, J.:
This
petition for review on certiorari
under Rule 45 of the Rules of Court seeks to reverse the November 14, 2002
Decision[1] of
the Court of Appeals in CA-G.R. SP No. 64799, affirming the Decision of the
National Labor Relations Commission (NLRC) which modified the Decision of the
Labor Arbiter as regards the awards of retirement pay and 13th month
pay, and deleted the award of attorney’s fees; as well as the August 19, 2003
Resolution[2] denying
the motion for reconsideration.
Petitioner
was employed as a salesman at private respondent’s Grocery Division in
MR. ROGELIO J. REYES
Skyline Village, Catalunan Grande
Davao City 8000
Dear Mr. Reyes,
This
is in reply to your letter dated
We
wish to advise you that per our computation, your separation pay amounts to:
|
Retirement benefit (computed
at 50% pay for every year of service, a fraction of at least 6 months
considered as 1 year) |
Php 109,192.20 |
|
VL Cash Conversion (144 hours) |
7,511.31 |
|
SL Cash Conversion (120 hours) |
3,129.72 |
|
Financial Assistance (as approved by LY Gokongwei in Memo dated |
30,000.00 |
|
Final Accountability/Accounting Tax Refund 16,699.35 13th
Month Pay 10,919.22 Withheld
Commission November
1997 30,000.00 Salary Overpaid ( 834.59) Lost Pager ( 6,295.00) |
50,488.98 |
|
TOTAL |
Php 200,322.21 |
This computation is pursuant to
Company policy and practice. We are unable
to agree with your suggested basis of computation as they are without legal
basis. Also, we regret that we cannot
pay you the Sales Commission and Tax Refund ahead of the other payments.
Kindly
get in touch with us at 671-7098 if you have any questions.
Very truly yours,
(SGD) ATTY. MANUEL
R.
Group Human Resources
Director
cc: Mr. Lance
Gokongwei
Atty. Danny Bolos
Mr. Al Bacleon[4]
Insisting
that his retirement benefits and 13th month pay must be based on the
average monthly salary of P42,766.19, which consists of P10,919.22
basic salary and P31,846.97 average monthly commission, petitioner
refused to accept the check[5]
issued by private respondent in the amount of P200,322.21.[6] Instead, he filed a complaint before the arbitration
branch of the NLRC for retirement benefits, 13th month pay, tax
refund, earned sick and vacation leaves, financial assistance, service
incentive leave pay, damages and attorney’s fees.[7]
On
WHEREFORE, JUDGMENT IS HEREBY
RENDERED ordering respondent Universal Robina Corporation-Grocery Division to
pay complainant the net amount of PESOS: NINE HUNDRED ELEVEN THOUSAND SIX
HUNDRED NINETY NINE AND 92/100 (P911,699.92) representing his retirement
benefits, 13th month pay for 1997, 13th month pay
differential for 1996 and 1995, VL and SL Cash conversion, withheld commission
for 1997, financial assistance and tax refund plus attorney’s fees equivalent
to 5% of the total award.
All other claims are dismissed for
lack of basis.
SO ORDERED.[8]
On
appeal, the NLRC modified the decision of the Labor Arbiter by excluding the
overriding commission in the computation of the retirement benefits and 13th
month pay and deleted the award of attorney’s fees, thus:
WHEREFORE,
judgment is rendered:
1. Affirming with modification the
decision appealed from insofar as the award of retirement pay and 13th
month pay to the effect that same be computed based on the P10,919.22
basic salary to the exclusion of the overriding commissions of complainant.
2. Affirming in toto the award of VL cash
conversion, SL cash conversion, tax refund, withheld commission and financial
assistance.
3. Deleting the award of attorney’s fees
for lack of merit.
SO
ORDERED.[9]
Both
parties moved for reconsideration of the NLRC decision but were denied by the
NLRC for lack of merit. Only petitioner
filed a petition for certiorari
before the Court of Appeals but was dismissed for lack of merit.
Petitioner’s
motion for reconsideration was denied; hence this petition raising the sole
issue:
WHETHER OR NOT THE
AVERAGE MONTHLY SALES COMMISSION OF THIRTY ONE THOUSAND EIGHT HUNDRED FORTY SIX
AND 97/100 (Php 31,846.97) SHOULD BE INCLUDED IN THE COMPUTATION OF HIS
RETIREMENT BENEFITS AND 13TH MONTH PAY.[10]
Petitioner
contends that the commissions form part of the basic salary, citing the case of
Philippine Duplicators, Inc. v. National
Labor Relations Commission,[11] wherein the Court held that commissions
earned by salesmen form part of their basic salary.[12]
Private
respondent counters that petitioner knew that the overriding commission is not
included in the basic salary because it had not been considered as such for a
long time in the computation of the 13th month pay, leave
commissions, absences and tardiness. Petitioner
himself stated in the complaint that his basic salary is P10,919.22,
thus, he is estopped from claiming otherwise.
Moreover, in Boie-Takeda
Chemicals, Inc. v. De la Serna,[13]
the Supreme Court held that the fixed or guaranteed wage is patently “the basic
salary” for this is what the employee receives for a standard work period, and
that commissions are given for extra efforts exerted in consummating sales or
other transactions. Also, in Soriano v. National Labor Relations Commission,[14]
the Court clarified that overriding
commission is not properly includible in the basic salary as it must be
earned by actual market transactions attributable to the claimant. Thus, as a unit manager who supervised the
salesmen under his control and did not enter into actual sale transactions,
petitioner’s overriding commissions must not be considered in the computation
of the retirement benefits and 13th month pay.[15]
The
petition lacks merit. Any seeming
inconsistencies between Philippine
Duplicators and Boie-Takeda had
been clarified by the Court in the Resolution dated
The Court thus clarified that in Philippine Duplicators, the salesmen’s
commissions, comprising a pre-determined percentage of the selling price of the
goods sold by each salesman, were properly included in the term basic salary for purposes of computing
the 13th month pay. The salesmen’s
commission are not overtime payments, nor profit-sharing payments nor any other
fringe benefit,[17] but a
portion of the salary structure which represents an automatic increment to the
monetary value initially assigned to each unit of work rendered by a salesman.[18]
Contrarily, in Boie-Takeda, the so-called commissions paid to or received by
medical representatives of Boie-Takeda Chemicals or by the rank and file
employees of Philippine Fuji Xerox Co., were excluded from the term basic salary because these were paid to
the medical representatives and rank-and-file employees as productivity bonuses, which are generally tied to the productivity,
or capacity for revenue production, of a corporation and such bonuses closely
resemble profit-sharing payments and have no clear direct or necessary relation
to the amount of work actually done by each individual employee.[19] Further, commissions
paid by the Boie-Takeda Company to its medical representatives could not have
been sales commissions in the same sense
that Philippine Duplicators paid the salesmen their sales commissions. Medical
representatives are not salesmen; they do not effect any sale of any article at
all.[20]
In fine, whether or not a commission forms
part of the basic salary depends upon the circumstances or conditions for its
payment, which indubitably are factual in nature for they will require a re-examination
and calibration of the evidence on record.
Thus, our review thereof in the case at bar would violate the settled
rule that findings of facts of quasi-judicial bodies like the NLRC, and
affirmed by the Court of Appeals in due course, are conclusive on this Court,
which is not a trier of facts.[21] Nevertheless, should petitioner’s commissions
be considered in the computation of his retirement benefits and 13th
month pay?
We rule in the negative.
Article 287 of the Labor Code, as
amended by Republic Act No. 7641, otherwise known as The New Retirement Law,[22] provides:
Art.
287. Retirement. — Any employee may be retired upon reaching the retirement age
established in the collective bargaining agreement or other applicable
employment contract.
x x
x x
In
the absence of a retirement plan or agreement providing for retirement benefits
of employees in the establishment, an employee upon reaching the age of sixty
(60) years or more, but not beyond sixty five (65) years which is hereby
declared the compulsory retirement age, who has served at least five (5) years
in the said establishment, may retire and shall be entitled to retirement pay
equivalent to at least one half (1/2) month salary for every year of service, a
fraction of at least six (6) months being considered as one whole year.
Unless
the parties provide for broader inclusions, the term one half (1/2) month
salary shall mean fifteen (15) days plus one twelfth (1/12) of the 13th month
pay and the cash equivalent of not more than five (5) days of service incentive
leaves.
And,
Section 5 of Rule II of the Rules Implementing the New Retirement Law,
provides:
RULE II
Retirement Benefits
x x
x x
Section 5. Retirement Benefits.
5.1 In the absence of an applicable agreement or retirement plan, an employee who retires pursuant to the Act shall be entitled to retirement pay equivalent to at least one-half (1/2) month salary for every year of service, a fraction of at least six (6) months being considered as one whole year.
5.2
Components of One-half (1/2) Month Salary. – For the
purpose of determining the minimum retirement pay due an employee under this
Rule, the term “one-half-month salary” shall include all the following:
(a)
Fifteen (15) days salary of the employee based on his
latest salary rate. As used herein, the term “salary” includes all
remunerations paid by an employer to his employees for services rendered during
normal working days and hours, whether such payments are fixed or ascertained
on a time, task, piece or commission basis, or other method of calculating the
same, and includes the fair and reasonable value, as determined by the
Secretary of Labor and Employment, of food, lodging, or other facilities
customarily furnished by the employer to his employees. The term does not include cost of living allowance, profit-sharing
payments and other monetary benefits which are not considered as part of or
integrated into the regular salary of the employees.
(b)
The cash equivalent of not more than five (5) days of
service incentive leave.
(c)
One-twelfth of the 13 month pay due the employee.
(d)
All other benefits that the employer and employee may
agree upon that should be included in the computation of the employee’s
retirement pay. (Emphasis supplied)
The article provides for two types of
retirement: (a) compulsory and (b) optional.
The first takes place at age 65, while the second is primarily
determined by the collective bargaining agreement or other employment contract
or employer’s retirement plan. In the
absence of any provision on optional retirement in a collective bargaining
agreement, other employment contract, or employer’s retirement plan, an employee
may optionally retire upon reaching the age of 60 years or more, but not beyond
65 years, provided he has served at least five years in the establishment
concerned.
For the purpose of computing
retirement pay, “one-half month salary” shall include all of the following:
1)
15 days salary based on the latest salary rate;
2)
cash equivalent of 5 days of service incentive leave
(or vacation leave);
3)
1/12 of the 13th month pay;
4)
other benefits as may be agreed upon by employer and
employee for inclusion.
But, it shall not include the
following:
1)
cost of living allowance;
2)
profit-sharing
payments; and
3)
other monetary benefits which are not considered as
part of or integrated into the regular salary of the employees
Petitioner filed for optional
retirement upon reaching the age of 60.
However, the basis in computing his retirement benefits is his latest salary
rate of P10,919.22 as the commissions he received are in the form of
profit-sharing payments specifically excluded by the foregoing rules.
As aptly observed by the Court of
Appeals:
In
fine, Boie-Takeda and Philippine Duplicator particularize the types of earnings
and remuneration that should or should not properly be included or integrated
in the basic salary and which questions are to be resolved or determined on a
case-to-case basis, in the light of the specific and detailed facts of each
case. In other words, when these
earnings and remuneration are closely akin to fringe benefits, overtime pay or
profit-sharing statements, they are properly excluded in computing retirement
pay. However, sales commissions which
are effectively an integral portion of the basic salary structure of an
employee, shall be included in determining the retirement pay.
At
bar, petitioner Rogelio J. Reyes was receiving a monthly sum of P10,919.22
as salary corresponding to his position as Unit Manager. Thus, as correctly ruled by public respondent
NLRC, the “overriding commissions” paid to him by Universal Robina Corp. could
not have been ‘sales commissions’ in the same sense that Philippine Duplicators
paid its salesmen sales commissions.
Unit Managers are not salesmen; they do not effect any sale of article
at all. Therefore, any commission which
they receive is certainly not the basic salary which measures the standard or
amount of work of complainant as Unit Manager.
Accordingly, the additional payments made to petitioner were not in fact
sales commissions but rather partook of the nature of profit-sharing
business. Certainly, from the foregoing,
the doctrine in Boie-Takeda Chemicals and Philippine Fuji Xerox Corporation,
which pronounced that commissions are additional pay that does not form part of
the basic salary, applies to the present case.[23]
Aside from the fact that as unit
manager petitioner did not enter into actual sale transactions, but merely
supervised the salesmen under his control, the disputed commissions were not
regularly received by him. Only when the
salesmen were able to collect from the sale transactions can petitioner receive
the commissions. Conversely, if no
collections were made by the salesmen, then petitioner would receive no
commissions at all.[24] In fine, the commissions which petitioner
received were not part of his salary structure but were profit-sharing payments
and had no clear, direct or necessary relation to the amount of work he
actually performed. The collection made
by the salesmen from the sale transactions was the profit of private respondent
from which petitioner had a share in the form of a commission.
It may be argued that petitioner may
have exerted efforts in pushing the salesmen to close more sale transactions;
however, it is not the criterion which would entitle him to a commission, but
the actual sale transactions brought about by the individual efforts of the
salesmen.
Insofar as what constitutes “basic
salary,” the foregoing discussions equally apply to the computation of
petitioner’s 13th month pay. As
held in San Miguel Corporation v. Inciong:[25]
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 Instruction 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
the employee at the time of the promulgation of the Decree on
Finally,
considering that the computations, as well as the propriety of the awards, are
unquestionably factual issues that have been discussed and ruled upon by NLRC
and affirmed by the Court of Appeals, we cannot depart from such findings. Findings of fact of administrative agencies
and quasi-judicial bodies, which have acquired expertise because their
jurisdiction is confined to specific matters, are generally accorded not only
respect, but finality when affirmed by the Court of Appeals. Such findings deserve full respect and,
without justifiable reason, ought not to be altered, modified or reversed.[26]
WHEREFORE, the petition is DENIED.
The
SO ORDERED.
CONSUELO
YNARES-SANTIAGO
Associate Justice
WE CONCUR:
MA. ALICIA AUSTRIA-MARTINEZ
Associate Justice
MINITA V. CHICO-NAZARIO ANTONIO
EDUARDO B. NACHURA
Associate Justice Associate Justice
ATTESTATION
I
attest that the conclusions in the above decision were reached in consultation
before the case was assigned to the writer of the opinion of the Court’s
Division.
CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson, Third Division
CERTIFICATION
Pursuant
to Section 13, Article VIII of the Constitution and the Division Chairperson’s
Attestation, it is hereby certified that the conclusions in the above Decision
were reached in consultation before the case was assigned to the writer of the
opinion of the Court’s Division.
REYNATO S. PUNO
Chief Justice
[1] Rollo, p. 29. Penned by Associate Justice Conrado M.
Vasquez, Jr. and concurred in by Associate Justices Elvi John S. Asuncion and
Sergio L. Pestaño.
[2]
[3]
[4]
[5]
[6]
[7]
[8]
[9]
[10]
[11]
G.R. No. 110068,
[12] Rollo, p. 19.
[13]
G.R. Nos. 92174 and 102552,
[14]
G.R. No. L-75510,
[15] Rollo, pp. 227-228.
[16]
311 Phil. 407 (1995).
[17]
[18]
[19]
[20]
[21] Acevedo v. Advanstar Company Inc., G.R.
No. 157656, November 11, 2005, 474 SCRA 656, 664.
[22]
Took effect on
[23] Rollo, p. 36.
[24]
[25]
G.R. No. L-49774,
[26] Ramos Vda. de Brigino v. Ramos, G.R. No.
130260, February 6, 2006, 481 SCRA 546, 555.