ZAYBER
JOHN B. PROTACIO, G.R.
No. 168654
Petitioner,
Present:
- versus
-
TINGA,
Acting
Chairperson,
VELASCO,
JR., and
LAYA
MANANGHAYA & CO. BRION, JJ.
and/or
MARIO T. MANANGHAYA,
Respondents.
Promulgated:
March 25, 2009
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Tinga,
J.:
Before
the Court is a petition for review on certiorari[1]
under Rule 45 of the 1997 Rules of Civil Procedure, assailing the decision[2]
and resolution[3] of the
Court of Appeals in CA-G.R. SP No. 85038. The Court of Appeals’ decision
reduced the monetary award granted to petitioner by the National Labor
Relations Commission (NLRC) while the resolution denied petitioner’s motion for
reconsideration for lack of merit.
The
following factual antecedents are matters of record.
Respondent KPMG Laya Mananghaya &
Co. (respondent firm) is a general professional partnership duly organized
under the laws of the
However, on
Respondent firm failed to act upon
the demand letters. Thus, on 15 December 1999, petitioner filed before the NLRC
a complaint for the non-issuance of petitioner’s W-2 tax form for 1999 and the non-payment
of the following benefits: (1) cash equivalent of petitioner’s leave credits in
the amount of P55,467.60; (2) proportionate 13th month pay
for the year 1999; (3) reimbursement claims in the amount of P19,012.00;
and (4) lump sum pay for the fiscal year 1999 in the amount of P674,756.70.
Petitioner also sought moral and exemplary damages and attorney’s fees. Respondent
Mario T. Managhaya was also impleaded in his official capacity as respondent
firm’s managing partner.[6]
In his complaint,[7]
petitioner averred, inter alia, that when he was promoted to the
position of Tax Principal in October 1997, his compensation package had consisted
of a monthly gross compensation of P60,000.00, a 13th month
pay and a lump sum payment for the year 1997 in the amount of P240,000.00
that was paid to him on 08 February 1998.
According to petitioner, beginning P95,000.00,
inclusive of nontaxable allowance; (b) 13th month pay; and (c) a lump
sum amount in addition to the aggregate monthly gross compensation. On P573,000.00 for the fiscal year ending 1998.[8]
Respondent firm denied it had intentionally
delayed the processing of petitioner’s claims but alleged that the abrupt
departure of petitioner and three other members of the firm’s Tax Division had created
problems in the determination of petitioner’s various accountabilities, which
could be finished only by going over voluminous documents. Respondents further
averred that they had been taken aback upon learning about the labor case filed
by petitioner when all along they had done their best to facilitate the
processing of his claims.[9]
During the pendency of the case
before the Labor Arbiter, respondent firm on three occasions sent check
payments to petitioner in the following amounts: (1) P71,250.00,
representing petitioner’s 13th month pay; (2) P54,824.18, as
payments for the cash equivalent of petitioner’s leave credits and reimbursement
claims; and (3) P10,762.57, for the refund of petitioner’s taxes
withheld on his vacation leave credits. Petitioner’s copies of his withholding
tax certificates were sent to him along with the check payments.[10] Petitioner
acknowledged the receipt of the 13th month pay but disputed the
computation of the cash value of his vacation leave credits and reimbursement
claims.[11]
On
WHEREFORE,
judgment is hereby rendered ordering respondents to jointly and solidarily pay
complainant the following:
P12,681.00 - representing
the reimbursement claims of complainant;
P28,407.08 - representing
the underpayment of the cash equivalent of the unused leave credits of
complainant;
P573,000.00 - representing
complainant’s 1999 year-end lump sum payment; and
10% of the total judgment awards way of attorney’s
fees.
SO ORDERED.[13]
The Labor Arbiter awarded
petitioner’s reimbursement claims on the ground that respondent firm’s refusal
to grant the same was not so much because the claim was baseless but because petitioner
had failed to file the requisite reimbursement forms. He held that the formal
defect was cured when petitioner filed several demand letters as well as the case
before him.[14]
The Labor Arbiter held that
petitioner was not fully paid of the cash equivalent of the leave credits due
him because respondent firm had erroneously based the computation on a basic
pay of P61,000.00. He held that the evidence showed that petitioner’s
monthly basic salary was P95,000.00 inclusive of the other benefits that
were deemed included and integrated in the basic salary and that respondent
firm had computed petitioner’s 13th month pay based on a monthly
basic pay of P95,000.00; thus, the cash commutation of the leave credits
should also be based on this figure.[15]
The Labor Arbiter also ruled that
petitioner was entitled to a year-end payment of P573,000.00 on the
basis of the company policy of granting yearly lump sum payments to petitioner during
all the years of service and that respondent firm had failed to give petitioner
the same benefit for the year 1999 without any explanation.[16]
Aggrieved, respondent firm appealed
to the NLRC. On
WHEREFORE, the Decision dated P2,301.00
as reimbursement claims. The award of P12,681.00 representing the
reimbursement claims of complainant is set aside for lack of basis.
SO ORDERED.[18]
From the amount of P12,681.00
awarded by the Labor Arbiter as payment for the reimbursement claims, the NLRC
lowered the same to P2,301.00 representing the amount which remained
unpaid.[19]
As regards the issues on the lump sum payments and cash equivalent of the leave
credits, the NLRC affirmed the findings of the Labor Arbiter.
Respondents filed a motion for
reconsideration[20] but the NLRC denied the motion for lack of
merit.[21] Hence, respondents elevated the matter to the
Court of Appeals via a petition for certiorari.[22]
In the assailed Decision dated
WHEREFORE,
in the light of the foregoing, the assailed resolution of public respondent
NLRC dated
(1) P2,301.00
representing private respondent’s reimbursement claims;
(2) P9,802.83
representing the underpayment of the cash equivalent of private respondent’s
unused leave credits;
(3) P10,000.00
attorney’s fees.
SO ORDERED.[23]
Petitioner sought reconsideration. In the
assailed Resolution dated
Hence,
the instant petition, raising the following issues:
I.
WHETHER PUBLIC
RESPONDENT COURT OF APPEALS’ SUMMARY DENIAL OF PETITIONER’S MOTION FOR
RECONSIDERATION VIOLATES THE CONSTITUTIONAL REQUIREMENT THAT
II
WHETHER PUBLIC RESPONDENT COURT OF APPEALS COMMITTED
GRAVE ABUSE OF DISCRETION AND ACTED IN WANTON EXCESS OF JURISDICTION IN TAKING
COGNIZANCE OF [RESPONDENTS] PETITION FOR
CERTIORARI WHEN THE RESOLUTION THEREOF HINGES ON MERE EVALUATION OF EVIDENCE.
III.
WHETHER PUBLIC RESPONDENT COURT OF APPEALS WANTONLY
ABUSED ITS DISCRETION IN EMPLOYING A LARGER DIVISOR TO COMPUTE PETITIONER’S
DAILY SALARY RATE THEREBY DIMINISHING HIS BENEFITS, IN [VIOLATION] OF THE LABOR CODE.
IV.
WHETHER PUBLIC RESPONDENT COURT OF APPEALS
CAPRICIOUSLY ABUSED ITS DISCRETION IN REVERSING THE [CONCURRING] FINDINGS OF
BOTH LABOR ARBITER AND NLRC ON THE COMPENSABLE NATURE OF PETITIONER’S YEAR END [LUMP]
SUM PLAY [sic] CLAIM.[24]
Before delving into the merits of the petition, the issues raised by
petitioner adverting to the Constitution must be addressed. Petitioner contends
that the Court of Appeals’ resolution which denied his motion for
reconsideration violated Article VIII, Section 14 of the Constitution, which
states:
Section 14. No decision shall
be rendered by any court without expressing therein clearly and distinctly the
facts and the law on which it is based.
No petition for review or
motion for reconsideration of a decision of the court shall be refused due
course or denied without stating the legal basis therefor.
Obviously, the assailed resolution is not a “decision” within the meaning
of the Constitutional requirement. This mandate is applicable only in cases “submitted
for decision,” i.e., given due course and after filing of briefs or
memoranda and/or other pleadings, as the case may be.[25]
The requirement is not applicable to a resolution denying a motion for
reconsideration of the decision. What is applicable is the second paragraph of
the above-quoted Constitutional provision referring to “motion for
reconsideration of a decision of the court.” The assailed resolution complied
with the requirement therein that a resolution denying a motion for
reconsideration should state the legal basis of the denial. It sufficiently
explained that after reading the pleadings filed by the parties, the appellate
court did not find any cogent reason to reverse itself.
Next, petitioner argues that the Court of Appeals erred in giving due
course to the petition for certiorari when the resolution thereof hinged on
mere evaluation of evidence. Petitioner opines that respondents failed to make
its case in showing that the Labor Arbiter and the NLRC had exercised their
discretion in an arbitrary and despotic manner.
As a general rule, in certiorari proceedings under Rule 65 of the Rules
of Court, the appellate court does not assess and weigh the sufficiency of
evidence upon which the Labor Arbiter and the NLRC based their conclusion. The
query in this proceeding is limited to the determination of whether or not the
NLRC acted without or in excess of its jurisdiction or with grave abuse of
discretion in rendering its decision. However, as an exception, the appellate
court may examine and measure the factual findings of the NLRC if the same are
not supported by substantial evidence.[26] The
Court has not hesitated to affirm the appellate court’s reversals of the
decisions of labor tribunals if they are not supported by substantial evidence.[27]
The Court is not unaware that the appellate court had reexamined and weighed the evidence on record
in modifying the monetary award of the NLRC. The Court of Appeals held that the
amount of the year-end lump sum compensation was not fully justified and
supported by the evidence on record. The Court fully agrees that the lump sum
award of P573,000.00 to petitioner seemed to have been plucked out of
thin air. Noteworthy is the fact that in his position paper, petitioner claimed
that he was entitled to the amount of P674,756.70.[28]
The variance between the claim and the amount awarded, with the record bereft
of any proof to support either amount only shows that the appellate court was
correct in holding that the award was a mere speculation devoid of any factual
basis. In the exceptional circumstance
as in the instant case, the Court finds no error in the appellate court’s
review of the evidence on record.
After an assessment of the evidence on record, the Court of Appeals
reversed the findings of the NLRC and the Labor Arbiter with respect to the
award of the year-end lump sum pay and the cash value of petitioner’s leave
credits. The appellate court held that while the lump sum payment was in the
nature of a proportionate share in the firm’s annual income to which petitioner
was entitled, the payment thereof was contingent upon the financial position of
the firm. According to the Court of Appeals, since no evidence was adduced
showing the net income of the firm for fiscal year ending 1999 as well as
petitioner’s corresponding share therein, the amount awarded by the labor
tribunals was a baseless speculation and as such must be deleted.[29]
On the other hand, the NLRC affirmed the Labor Arbiter’s award of the
lump sum payment in the amount of P573,000.00 on the basis that the
payment thereof had become a company policy which could not be withdrawn
arbitrarily. Furthermore, the NLRC held that respondent firm had failed to
controvert petitioner’s claim that he was responsible for generating some P7,365,044.47
in cash revenue during the fiscal year ending 1999.
The evidence on record establishes that aside from the basic monthly compensation,[30]
petitioner received a yearly lump sum amount during the first two years[31]
of his employment, with the payments made to him after the annual net incomes of
the firm had been determined. Thus, the amounts thereof varied and were dependent
on the firm’s cash position and financial performance.[32] In one of the letters of respondent Mananghaya
to petitioner, the amount was referred to as petitioner’s “share in the
incentive compensation program.”[33]
While the amount was drawn from the annual net income of the firm, the
distribution thereof to non-partners or employees of the firm was not, strictly
speaking, a profit-sharing arrangement between petitioner and respondent firm contrary
to the Court of Appeals’ finding. The payment thereof to non-partners of the
firm like herein petitioner was discretionary on the part of the chairman and
managing partner coming from their authority to fix the compensation of any
employee based on a share in the partnership’s net income.[34] The
distribution being merely discretionary, the year-end lump sum payment may
properly be considered as a year-end bonus or incentive. Contrary to
petitioner’s claim, the granting of the year-end lump sum amount was precisely dependent
on the firm’s net income; hence, the same was payable only after the firm’s
annual net income and cash position were determined.
By definition, a “bonus” is a gratuity or act of liberality of the giver.
It is something given in addition to what is ordinarily received by or strictly
due the recipient.[35] A
bonus is granted and paid to an employee for his industry and loyalty which
contributed to the success of the employer’s business and made possible the
realization of profits.[36] Generally,
a bonus is not a demandable and enforceable obligation. It is so only when it
is made part of the wage or salary or compensation. When considered as part of
the compensation and therefore demandable and enforceable, the amount is
usually fixed. If the amount would be a contingent one dependent upon the
realization of the profits, the bonus is also not demandable and enforceable.[37]
In the instant case, petitioner’s claim that the year-end lump sum represented
the balance of his total compensation package is incorrect. The fact remains that
the amounts paid to petitioner on the two occasions varied and were always dependent
upon the firm’s financial position.
Moreover, in Philippine Duplicators, Inc. v. NLRC,[38]
the Court held that if the bonus is paid only if profits are realized or a
certain amount of productivity achieved, it cannot be considered part of wages.
If the desired goal of production is not obtained, of the amount of actual work
accomplished, the bonus does not accrue.[39]
Only when the employer promises and agrees to give without any conditions imposed
for its payment, such as success of business or greater production or output,
does the bonus become part of the wage.[40]
Petitioner’s assertion that he was responsible for generating revenues
amounting to more than P7 million remains a mere allegation in his pleadings. The records are
absolutely bereft of any supporting evidence to substantiate the allegation.
The granting of a bonus is basically a management prerogative which
cannot be forced upon the employer who may not be obliged to assume the onerous
burden of granting bonuses or other benefits aside from the employees’ basic
salaries or wages.[41] Respondents
had consistently maintained from the start that petitioner was not entitled to
the bonus as a matter of right. The payment of the year-end lump sum bonus
based upon the firm’s productivity or the individual performance of its
employees was well within respondent firm’s prerogative. Thus, respondent firm
was also justified in declining to give the bonus to petitioner on account of
the latter’s unsatisfactory performance.
Petitioner failed to present evidence refuting respondents’ allegation and
proof that they received a number of complaints from clients about petitioner’s
“poor services.” For purposes of determining whether or not petitioner was
entitled to the year-end lump sum bonus, respondents were not legally obliged
to raise the issue of substandard performance with petitioner, unlike what the
Labor Arbiter had suggested. Of course, if what was in question was
petitioner’s continued employment vis-à-vis the allegations of unsatisfactory
performance, then respondent firm was required under the law to give petitioner
due process to explain his side before instituting any disciplinary measure.
However, in the instant case, the granting of the year-end lump sum bonus was
discretionary and conditional, thus, petitioner may not question the basis for
the granting of a mere privilege.
With regard to the computation of the
cash equivalent of petitioner’s leave credits, the Court of Appeals used a base
figure of P71,250.00 representing petitioner’s monthly salary as opposed
to P95,000.00 used by the Labor Arbiter and NLRC. Meanwhile, respondents
insist on a base figure of only P61,000.00, which excludes the advance
incentive pay of P15,000.00, transportation allowance of P15,000.00 and
representation allowance of P4,000.00, which petitioner regularly
received every month. Because of a lower base figure (representing the monthly
salary) used by the appellate court, the cash equivalent of petitioner’s leave
credits was lowered from P28,407.08 to P9,802.83.
The monthly compensation of P71,250.00
used as base figure by the Court of Appeals is totally without basis. As
correctly held by the Labor Arbiter and the NLRC, the evidence on record
reveals that petitioner was receiving a monthly compensation of P95,000.00
consisting of a basic salary of P61,000.00, advance incentive pay of P15,000.00,
transportation allowance of P15,000.00 and representation allowance of P4,000.00.
These amounts totaling P95,000.00 are all deemed part of petitioner’s
monthly compensation package and, therefore, should be the basis in the cash
commutation of the petitioner’s leave credits. These allowances were customarily
furnished by respondent firm and regularly received by petitioner on top of the
basic monthly pay of P61,000.00. Moreover, the Labor Arbiter noted that
respondent firm’s act of paying petitioner a 13th month-pay at the
rate of P95,000.00 was an admission on its part that petitioner’s basic
monthly salary was P95,000.00
The Court of Appeals, Labor Arbiter
and NLRC used a 30-working day divisor instead of 26 days which petitioner
insists. The Court of Appeals relied on Section 2, Rule IV, Book III[42]
of the implementing rules of the Labor Code in using the 30-working day divisor.
The provision essentially states that monthly-paid employees are presumed to be
paid for all days in the month whether worked or not.
The provision has long been nullified
in Insular Bank of Asia and American Employees’ Union (IBAAEU) v. Hon. Inciong,
etc., et al.,[43] where
the Court ruled that the provision amended the Labor Code’s provisions on
holiday pay by enlarging the scope of their exclusion.[44] In
any case, the provision is inapplicable to the instant case because it referred
to the computation of holiday pay for monthly-paid employees.
Petitioner’s claim that respondent
firm used a 26-working day divisor is
supported by the evidence on record. In a letter addressed to
petitioner,[45]
respondents’ counsel expressly admitted that respondent used a 26-working day
divisor. The Court is perplexed why the tribunals below used a 30-day divisor
when there was an express admission on respondents’ part that they used a
26-day divisor in the cash commutation of leave credits. Thus, with a monthly
compensation of P95,000.00 and using a 26-working day divisor, petitioner’s daily rate is P3,653.85.[46] Based
on this rate, petitioner’s cash equivalent of his leave credits of 23.5 is P85,865.48.[47] Since petitioner has already received the
amount P46,009.67, a balance of P39,855.80 remains payable to
petitioner.
WHEREFORE, the instant petition for review on
certiorari is PARTLY GRANTED. The Decision of the Court of Appeals in
CA-G.R. SP No. 85038 is AFFIRMED with the MODIFICATION that
respondents are liable for the underpayment of the cash equivalent of
petitioner’s leave credits in the amount of P39,855.80.
SO ORDERED.
DANTE O. TINGA Associate Justice
WE CONCUR:
On
Official Leave
LEONARDO A.
QUISUMBING
Associate
Justice
Chairperson
MA. ALICIA
Associate Justice Associate Justice
PRESBITERO J. VELASCO, JR. ARTURO D. BRION
Associate Justice Associate Justice
ATTESTATION
I attest that the conclusions in the above
Decision had been reached in consultation before the case was assigned to the
writer of the opinion of the Court’s Division.
DANTE O. TINGA
Associate
Justice
Acting Chairperson, Second
Division
CERTIFICATION
Pursuant to Section 13, Article VIII
of the Constitution, and the Division Acting Chairperson’s Attestation, it is
hereby certified that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Court’s Division.
REYNATO S. PUNO
Chief Justice
**Additional member per Special Order No. 600 in lieu of J. Carpio Morales who is on official business.
[2]
[26]Soriano,
Jr. v. National Labor Relations Commission, G.R. No. 165594,
[27]See Philippine
Pizza, Inc., v. Bungabong, G.R. No. 154315, 09 May 2005, 458 SCRA 288;
Danzas Intercontinental, Inc. v. Daguman, G.R. No. 154368, 15 April 2005,
456 SCRA 382; Go v. Court of Appeals,
G.R. No. 158922, 28 May 2004, 430 SCRA 358.
[34]Section 8, Article IX of respondent firm’s Amended Articles of Partnership states: Nothing in this Agreement shall prevent the Chairman and Managing Partner, from fixing the just compensation of any employee of the Firm, fully or partially, on the basis of a share in the Partnership’s net profits.
[36]The Manila Banking Corp. v. NLRC, 345 Phil. 105, 126 (1997).
[42]Sec. 2. 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 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.
For this purpose, the monthly minimum wage shall not be less than the statutory minimum wage multiplied by 365 days divided by twelve.