Summary Finals

7/28/2019 Summary Finals

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Labor Standard Reviewer

Art. Case Title Fast Facts Ruling/Ratio

A-1 1-6 Uy vs. Centro Ee from Sales Executive to Marketing Ee: pinag-initan sya ng officer Er: insubordination

Dismissal must have a clear basis. Anyambiguity should be interpreted

against the Er.

A-2 1-6 De Castro vs. Liberty

Broadcasting Doubts as to the credibility of the

witnesses against petitioner Ee, i.e.

those who have personal resentmentagainst him.

Ee: Building administrator Charges: extracting commissions

from suppliers

If doubts exist between the evidencepresented by the employer and the

employee, the scales of justice must betilted in favor of the latter.

A-3 1-6 Peaflor vs. Outdoor VP of Operations (Lee) and COO (Syfu)had a bitter falling out.

VP left the company. Petitioner was close to Lee. Petitioner is probi HRD Manager. HRD downsized, Peaflor replaced

while he is the field.

Doubt: Undated letter of resignationwhether filed before or afterannouncement of replacement.

Rule: In employee terminationdisputes, the employer bears the

burden of proving that the employees

dismissal was for just and valid cause.

Rule: all doubt s in the interpretationand implement at ion of the Labor

Code should be interpreted in favor of

t he workingman (i.e., doubts in Ers

evidence). Peaflor was illegally dismissed.

A-4 1-6 Norkis Union vs.

Norkis Trading Norkis Ees were receiving higher

salary than that contained in the new

Wage Order.

Norkis Union interpreted a provisionof the CBA to mean that they are

entitled to additional increase by way

of the new Wage Order.

Doubt: qualifying phrase according tothe provisions of the law and merely

focuses its attention on the across-

the-board increase.

Stipul ations in a contract must beread together, not in isolation from

one another.

2 Methods: The floor wage method(i.e., fixing of a determinate amount to

be added to the prevailing statutory

minimum wage rates). Salary-

ceiling method (i.e., workers already

being paid more than the existing

minimum wage (up to a certain

amount stated in the Wage Order) are

also to be given a wage increase). The intention of the Wage Order is to

effect a floor wage.

Social justice does not, however,mandate that ever dispute shoul d be

automatically decided in favor of

labor.

Union was not given their requestfor another salary increase.

A-5 82-90 Nasurefco vs. NLRC Nasurefco implemented a JobEvaluation Program that reclassified

petitioner Ees as supervisors.

As supervisors they are no longerentitled to overtime rest day and

holiday pay.

Managerial employee is one who isvested with powers or prerogatives to

lay down and execute management

policies and/or to hire, transfer,

suspend, lay-off, recall, discharged,

assign or discipline employees. (LC,

Art. 212)

Supervisory employees recommendsuch managerial actions if the exercise

of such authority, not merely

routinary or clerical but requires the

use of independent judgment.

Members of respondent uniondischarge duties and responsibilities

which ineluctably qualify them as

officers or members of the managerial


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staff: (1) work directly related to

management policies; (2) exercise

discretion and independent judgment;

(3) regularly and directly assist the

managerial employee ;(4) they

execute, under general supervision,

work along specialized or technical

lines requiring special training,

experience, or knowledge; (5) execute,

special assignments and tasks; and (6)they do not devote more than 20% of

their hours worked in a work-week to

activities which are not directly and

clearly related to the performance of

their work hereinbefore described.

Supervisors are deemed membersof the managerial staff for purposes

of labor standards.

A-6 82-90 Serrano vs. Severino

Santos Serrano is a bus conductor who is

about to retire.

Doubt: if he is a field personnel. Re: computation of retirement pay, i.e.,

inclusion of 13th month pay and cashequivalent of SIL pay.

Signed quitclaim under protest.

Field personnel shall refer to non-agricultural employees who regularly

perform their duties away from the

principal place of business or branch

office of the employer and whoseactual hours of work in the field

cannot be determined with reasonable

certainty (LC, Art. 82).

Definition does not apply to the case atbar.

Bureau of Working Conditions: As ageneral rule, [field personnel] are

those whose performance of their

job/service is not supervised by the Er

or his rep, the workplace being away

from the principal office and whose

hours and days of work cannot be

determined with reasonablecertainty;. If required to be at

specific places at specific times,

employees including drivers cannot

be said to be field personnel despite

the fact that they are performing

work away from the principal office

of the employee.

Serrano is not a field personnel.A-7 82-90 Union Filipro vs. Vivar Union Filipro members contest that

they are notfield personnel, i.e.,

entitlement to holiday pay.

They are salesmen, sales reps, truckdrivers, merchandisers and med reps.

They clock in at 8:00am, go to thefield, go back to the office to punch out

at 4:00 or 4:30pm. They argue that

their time can be ascertained.

The law requires that the actual hoursofwork in the field be reasonably

ascertained. The company has no

way of determining whether or not

these sales personnel, even if theyreport to the office before 8:00 a.m.

prior to field work and come back at

4:30 p.m, really spend the hours in

between in actual field work.

Petitioners are field personnel.A-8 82-90 Semblante vs CA Petitioners Semblante and Pilar were

masiador and sentenciador,

respectively.

They were given IDs and salary. One day they were not allowed entry

into the cockpit.

Respondent spouses: (1) had no partin petitioners selection and

management; (2) petitioners salaries

were paid out of the arriba; and (3)

petitioners performed their functions

as masiador and sentenciador free


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Filed for illegal dismissal. from the direction and control ofrespondents, i.e., mainly on their

expertise & they provided their own

tools.

No Ee-Er relationship.A-9 82-90 PSI vs. CA Respondent Natividad Agana had an

operation gone wrong in a hospital

under the management of petitioner

company.

2 gauzes were left inside her body. The gauze discrepancy was reported

by the nurses after the operation

Drs. Fuentes and Ampil were implededin the original complaint.

Dr. Ampil was not an employee butmore like an independent contractor

Dr. Fuentes was acquitted Dr. Ampil was held liable

Hospital's liability was not due to theprinciple ofrespondeat superiorfor

there is no employee-employer

relationship (i.e., power of control), it

is due to the principles of OstensibleAgency and Corporate Negligence, i.e.

did not order a review of what

occurred in the operating room.

A-

10

82-90 Tongko vs.

Manufacturers Life

(2008)

Tongko and Manulife President DeDios had disagreement as to the

direction of the company.

On the basis of low performance andinvoking the companys prerogative,his services were terminated.

Tongko filed for illegal dismissal.

Employing the Control Test: (1) In aletter, Manulife gave Tongko direct

orders in how he conducts business,

e.g. hiring of an assistant; (2) Codes of

Conduct evince control; (3)Agreement evince control, i.e.

regulations/requirements, quota

There is Er-Ee relationship.A-

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82-90 Tongko vs.

Manufacturers Life

(2010)

There are two phases of Tongkoscareer in Manulife: Phase 1, as an

insurance agent and Phase 2, as a

manager.

Distinction between 2 controls, i.e,Labor Law / Operative Control vs.

Built-in Control / Directive Control

Guide line s indicative of labor lawcontrol, as the first Insular Life case

tells us, should not merely relate to

the mutually desirable result intended

by the contractual relationship; they

must have the nature of dictating the

means or methods to be employed in

attaining the result, or of fixing the

methodology and of binding or

restricting the party hire d to the use

of these means.

No Er-Ee relationship, onlyprincipal-agent relationship.

A-

12

82-90 Benares vs. Pancho Respondents are sugar farm workersin Petitioners hacienda.

Farm workers talked to DOLE anddivulged info that irritated petitioner.

Respondents were fired.

Filed for illegal dismissal. Doubt: Er-Ee relationship.

The law provides for three kinds ofemployees: (1) regular employees,

i.e. perform activities which are

usually necessary or desirable in the

usual business or trade of the

employer; (2) project employees, i.e.employment has been fixed for a

specific project or undertaking, the

completion or termination of which

has been determined at the time of the

engagement of the employee or where

the work or service to be performed is

seasonal in nature and the

employment is for the duration of the

season; and (3) casual employees, i.e.

neither regular nor project employees.

A- 82-90 Francisco vs. NLRC Corporate Secretary to Accountant to Two-tiered Test


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12 Liaison Officer to Manager

Replaced as manager, made to sign aresolution but assured that will be

kept.

Terminated instead Salary reduced by P2,500 An illegal dismissal case.

Control test is not sufficient. Economic Reality Test: involves the

showing of the degree of dependency

of the worker upon the employer for

his continued employment in the line

of business.

Petitioner is an employee: receivedcheck vouchers indicating her

salaries/wages, benefits, 13th month

pay, bonuses and allowances,deductions and SSS contributions.


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82-90 Autobus vs. Bautista Bautista was an Autobusdriver/conductor who met an accident

with another Autobus unit.

Penalty: not allowed to work until hepaid P75K or 30% of repair cost.

Unable to pay he was terminated. Doubt: entitlement to SIL pay (i.e. field

personnel)

Field Personnel LC definition: non-agricultural

employees who regularly perform

their duties away from the principal

place of business or branch office of

the employer and whose actual hours

of work in the field cannot be

determined with reasonable certainty.

Bu. Of Working Conditions definition:those whose performance is not

supervised by the employer or hisrepresentative, the workplace being

away from the principal office and

whose hours and days of work cannot

be determined with reasonable

certainty; hence, they are paid specific

amount for rendering specific service

or performing specific work. If

required to be at specific places at

specific times, employees including

drivers cannot be said to be field

personnel despite the fact that they are

performing work away from the

principal office of the employee. Application: (1) inspectors assigned at

strategic places; (2) once-a-week

carbarn; (3) prompt departure and

arrival from the point of origin to the

point destination.

Driver/conductor is not a fieldpersonnel.

A-

15

82-90 Paguio vs NLRC Account Exec for Multimedia TimesCorp. dismissed on vague grounds

Renewed contract 5 times but contractsays no Er-Ee relationship

Illegal dismissal

Status of regular employees is decisivedeterminant, i.e. activities not

stipulation in contract

Engaged to perform activitiesnecessary and desirable in the usual

business or trade

Control test: Er controls the resultsand the manner and means used in

reaching that end.

Application: (1) daily sales activityreport; (2) monthly sales report; (3)

company president, advertising

manager, and ad director directed and

monitored the sales activities of

petitioner.

There is Er-Ee relationshipA- 82-90 Makati Haberdashery Prvt respondents were tailors, By the 4-fold Test, esp. Control Test:


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16 vs NLRC seamstress, sewers, basters &

plantsadoras paid in piece-rate basis

(1) there was supervision in the

manner and quality of cutting, sewing

and ironing; (2) Memo, following of

instructions and orders, i.e.

acceptance of job orders, behavior

inside shop

Not independent contractors, i.e.resources, equipment, tools,

accessories, and paraphernalia were

supplied and owned by petitioners. There is an Er-Ee relationship.

A-

17

82-90 Corporal Sr. vs NLRC Petitioners were barbers andmanicurists of company

Paid 50-60% commissions, registeredas Ees in SSS, own their own

equipment (e.g., brushes, combs,

scissors, etc.)

Building was sold servicesterminated.

Filed for illegal dismissal.

Control Test: (1) barber shop ownedby respondent company; (2) report

daily and observe hours of work; (3)

cannot accept other employment; (4)

Petitioner Patricia Nas was instructed

to watch over the other petitioners.

Barbers were NOT joint venturepartners, i.e. no partnership

agreement

Barbers were not independentcontractors, i.e. elements: (1) carries

on an independent business, free fromcontrol of Er/principal only has

control on the result; (2) has

substantial capital or investment (i.e.

tools, equipment, machineries, work

premises).


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82-90 Villamaria vs. CA Bustamante was a jeepney driver. He entered into a boundary-hulog

arrangement with petitioner

Signed a Kasunduan detailed theagreement with directives like driving

carefully, wearing ID, wearing decent

attire, parking the jeepney in hisgarage.

Control Test: Control and supervisionevident in the Kasunduan.

Determining factor is not how Ee ispaid but the presence or absence of

control over the eans and methods.

Possible for the concurrence of Er-Eeand vendor-vendee relationship.

There is an Er-Ee relationship.A-

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82-90 Jardin vs. NLRC Petitioners were taxi drivers ofrespondent company, Goodman Taxi.

Additional P30 as washing fee. Unacceptable to taxi drivers, formed a

union.

Services were terminated. Filed for unfair labor practice and

illegal dismissal.

Prevailing jurisprudence: There is Er-Ee relationship even though payment

comes by way of the boundary system;

management of the business is in the

owners hands, and he holds the

certificate of public convenience.

Elements of valid termination: (1) justand authorized cause; and (2) twin

notice requirement.

Illegal dismissal, both were notcomplied with.

There is an Er-Ee relationship.A-

20

82-90 Calamba Medical vs.

NLRC Drs. Ronaldo and Merceditha were

doctor spouses employed in Calamba

Medical.

Dr. Ronaldo was suspended,misunderstanding on a phone

conversation.

Dr. Ronaldo was a member of theunion.

Union held a strike. Dr. Ronaldo didnt go back to work

because he was suspended, but the

Existence of Er-Ee relationship perControl Test: (1) Specific work

schedules, under pain of sanction;

(2)Work is supervised thru nurse

supervisor, charge nurses, & orderlies

(3)Decisions re: operations Need

approval of petitioner or its Medical

Director; (3)Made to abide by the

hospital's Code of EthicsPvt.

respondents are Ees

Respondent doctors are rank-and-file,


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hospital took it as a violation.

He was terminated. His wife was also terminated on the

ground that she is his wife, she is loyal

to him.

not managers nor supervisors:

Although they supervise, they do not

recommend managerial action Can

be union members

>Twin Notice Rule, due process req't.(i.e., first re: grounds why dismissal is

sought, second re: decision of

termination): Respondent was only

served his notice of terminationHe

was illegally dismissed. Worse was the termination of the

wife no cause and no due process.

A-

21

82-90 SIP Food House vs.

Batolina Petitioner operates a canteen inside

GSIS.

Respondents are workers in thecanteen.

Respondents were issued IDs by theGMPC (GSIS Multi-Purpose

Cooperative), i.e. to gain access inside

the GSIS building.

Re: Er-Ee relationship: (1)Petitionletter prepared by counsel, used the

terms "our clients and their

employees"; (2)Petitioners pay

respondents' salaries; (3)Memo re:

AWOL which petitioner signed

Respondents are Ees

Control Test; (1)hiring; (2) paymentof wages; (3)power of control

Respondents are NOT labor-only

contractors

A-

22

82-90 RB Michael Press vs.

Galit Galit was an machine offset operator

who refused to render OT when asked.

He was a habitual tardy/absentee Doubt: legality of termination bcoz it

was for a valid cause

The employment of the respondentwas not illegally terminated because it

is based on a valid ground, i.e., a

groundless refusal to perform

overtime work. However, he was

awarded nominal damages because

the company did not properly observe

the requirement for procedural due

process, i.e., first notice and hearing

was conducted on the same day and

second notice was furnished the

following day.B-1 91-93 Labadan vs. Forest

Hills Teacher-Registrar super extended her

leave.

Went back to school when classesalready started.

Naturally, there is already areplacement for her.

Filed for constructive dismissal. Claims: holiday pay, OT pay, SIL pay,

illegal deduction of tithes.

Obiter: While in cases of illegaldismissal, the employer bears the

burden of proving that the dismissal is

for a valid or authorized cause, the

employee must first establish by

substantial evidence the fact of

dismissal.

The provision that a worker is entitledto twice his regular rate if he is

required to work on a holiday

implies that the provision entitling a

worker to his regular rate on

holidays applies even if he does notwork.

B-2 91-93 Imbuido vs. NLRC Petitioner was a data encoder in a datacomputing company.

Project Ee who re-hired for 13 times. Maraguinotcase: A project Ee may

acquire the status of a regular Ee; (1)

Continuous rehiring even after the

cessation of the project; (2) Tasks are

vital, necessary & indispensable

Application: (1)Petitioner Ee wascontinuously rehired for 3 years, 13

successive projects; (2) Tasks are

necessary, indispensablePetitioner

has attained the status of regular


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Ee.

On the legality of dismissal: (1)Petitioner Ee is deemed regular Ee; (2)

Regular Ees can only be dismissed

upon just cause; (3) Low volume of

work & completion of project are not

valid causesPetitioner is entitled

to reinstatement

On computation of SIL pay: Since aservice incentive leave is clearlydemandable after one year of service

whether continuous or broken

or its equivalent period, and it is one

of the "benefits" which would have

accrued if an employee was not

otherwise illegally dismissed, it is fair

and legal that its computation should

be up to the date of reinstatement

(i.e., other benefits or their monetary

equivalent computed from the time

his compensation is withheld from hi

m up to the time of hi s actual

reinstatement).B-3 94-96 Integrated Contractor

vs NLRC Petitioner is a plumbing contractor

where respondent worked with an

intermittent service.

Test for Project Employee: Assigned tocarry out a specific project or

undertaking, the duration (and

scope) of which are specified at the

time the employee is engaged in the

project.

Project refers to a particular job orundertaking that is within the regular

or usual business of the employer, but

which i s distinct and separate and

identifiable from the undertakings of

the company. Such job or undertaking

begins and ends at determined ordeterminable times.

A project or work pool employeeDEEMED a regular employee: (1)

continuously, as opposed to

intermittently, re-hired by the same

employer for the same tasks or nature

of tasks; and (2) these tasks are vital,

necessary and indispensable to the

usual business or trade of the

employer.

Test to for a regular Ee: (1) Thereasonable connection between the

particular activity performed by theemployee in relation to the usual

business or trade of the employer.; (2)

Ee has been performing the job for at

least one year, even if the performance

is not continuous or merely

intermittent

Policy Instructions No. 20: Ers tosubmit a report of an employee s

termination to the nearest public

employment office every time his

employment was terminated due to a


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completion of a project.

As to entitlement to SIL pay: at leastone year of service to mean service

within 12 months, whether

continuous or broken reckoned from

the date the employee started

working, including authorized

absences and paid regular holidays,

unless the working days in the

establishment as a matter of practiceor policy, or that provided in the

employment contract is less than 12

months, in which case said period

shall be considered as one year.

B-4 94-46 JPL Marketing vs. CA Computation of 13th mo. pay and SILpay: up to the termination of CMC's

contract, reason: they were not

illegally terminated

Computation of SIL pay: from thesecond year of service, reason:

definition, at least one year of service

Arts. 283 and 284, LC, separation payis authorized ONLY in cases ofdismissals due to any of these reasons:

(a) installation of labor saving devices;

(b) redundancy; (c) retrenchment; (d)

cessation of the employer's business;

and (e) when the employee is

suffering from a disease and his

continued employment is prohibited

by law or is prejudicial to his health

and to the health of his co-employees.

Separation pay shall be allowed as ameasure of social justice in those cases

where: (1) the employee is validly

dismissed for causes other thanserious misconduct or those reflecting

on his moral character, but only when

he was illegally dismissed;(2) Ee

entitled to reinstatement but the

establishment where he is to be

reinstated has closed or has ceased

operations or his present position no

longer exists at the time of

reinstatement for reasons not

attributable to the employer.

Allowed by law... Ee on "floatingstatus" for a a period not exceeding 6

months...... if more than 6 months, i.e.,illegally terminated.

Respondents having been employedelsewhere, severed their relations w/

petitioner, therefore not entitled to

separation pay.

Re: Er liability to pay nominaldamages,Agabon ruling: yes, if Er

failed to comply with due process

requirements in dismissal; > case at

bar, no dismissal, therefore NOT

entitled to nominal damages


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13th mo. pay and SIL pay aremandated by law, therefore

respondents are entitled to them

B-5 94-46 PNCC vs PNCC In CBA: The company shall schedulethe vacation leave of employees

during the year taking into

consideration the request of

preference of the empl oyees.

Where the language of a contract isplain and unambiguous, its meaning

should be determined without

reference to extrinsic facts or aids.

The contested provision of the CBA isclear and unequivocal.

Scheduling of vacation leave shall beunder the option of the employer. Thepreference requested by the

employees is not controlling.

B-6 94-46 Mansion Printing vs.

Bitara Habitual tardiness, driver of petitioner

company.

No illegal dismissal, substantive andprocedual requirements met

CA ruled that SIL was used up as leavecredits

An employee who has served for oneyear is entitled to SIL. He may use it as

leave days or he may collect its

monetary value.

There was no proof showing that SILleave were already used up.

C-1 97-98 Soriano vs. NLRC Commissions also claimed by the Ee(override commission plus net deposit

incentive) are not properly includible

ins such base figure since suchcommissions must be earned by actual

market transactions attributable to

Songco, et al., these should be taken

into account is the average

commission earned during their last

year of employment.

C-2 97-98 Songco vs. NLRC Zuelig retrenched Ees on th ground offinancial losses.

Doubt: computation separation pay,base salary (i.e., commissions,

allowances, etc.)

Basic salary plus the transportationand emergency living allowances.

These commissions are directremunerations for services rendered

which contributed to the increase of

income of the Er.

C-3 97-98 Javier vs. Fly Ace Javier was apahinante of Fly Ace. Javiers tasks as pahinante are related,necessary and desirable to the line of

business by Fly Ace which is engaged

in the importation and sale of grocery

items.

Payment to a worker on a per tripbasis is not significant because this is

merely a method of computing

compensation and not a basis for

determining the existence of

employer-employee relationship

(Chavez vs. NLRC).

Rule statement: The onus probandifalls on petitioner to establish or

substantiate such claim by the

requisite quantum of evidence.

Whoever claims entitlement to the

benefits provided by law should

establish his or her right thereto x x x.

Case-Fact statement: Javier was notable to persuade the Court that the

above elements exist in his case. He

could not submit competent proof that

Fly Ace engaged his services as a

regular employee; that Fly Ace paid


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his wages as an employee, or that Fly

Ace could dictate what his conduct

should be while at work.

C-4 97-98 SLL International vs.

NLRC Petitioners alleged: the food allowance

of P63.00 per day as well as private

respondents allowance for lodging

house, transportation, electricity ,

water and snacks allowance should be

added to their basic pay Thereby,

their wage is higher than theminimum wage in Metro Manila.

On whether the value of the facilitiesshould be included in the computation

of the wages received by private

respondents, Section 1 of DOLE

Memorandum Circular No. 2 provides

that an employer may provide

subsidized meals and snacks to hisemployees provided that the subsidy

shall not be less that 30% of the fair

and reasonable value of such facilities.

In such cases, the employer may

deduct from the wages of the

employees not more than 70% of the

value of the meals and snacks enjoyed

by the latter, provided that such

deduction is with the written

authorization of the employees

concerned.

Rule Statement: Requisites must all beattendant:first, proof must be shownthat such facilities are customarily

furnished by the trade; second, the

provision of deductible facilities must

be voluntarily accepted in writing by

the employee; andfinally, facilities

must be charged at reasonable value.

deductions from employees wages.

Case-Fact Statement: Theserequirements, however, have not been

met in this case.

C-5 97-98 Mayon Hotel vs.

Adana Rule Statement: Even granting that

meals and snacks were provided and

indeed constituted facilities, suchfacilities could not be deducted

without compliance with certain legal

requirements. As stated in Mabeza v.

NLRC: the employer simply cannot

deduct the value from the employee's

wages without satisfying the

following: (a) proof that such facilities

are customarily furnished by the

trade; (b) the provision of deductible

facilities is voluntarily accepted in

writing by the employee; and (c) the

facilities are charged at fair and

reasonable value. The records areclear that petitioners failed to comply

with these requirements.

Case-Fact Statement: There was noproof of respondents written

authorization. Indeed, the Labor

Arbiter found that while the

respondents admitted that they were

given meals and merienda, the quality

of food served to them was not what

was provided for in the Facility

Evaluation Orders and it was only


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when they filed the cases that they

came to know of this supposed Facility

Evaluation Orders.

Rule Statement: As ruled in Mabeza,food or snacks or other convenience

provided by the employers are

deemed as supplements if they are

granted for the convenience of the

employer.

Case-Fact Statement: hotel workersare required to work different shiftsand are expected to be available at

various odd hours, their ready

availability is a necessary matter in

the operations of a small hotel, such as

petitioners business.The deduction

ofthe cost of meals from

respondents wages, therefore,

should be removed.

C-6 97-98 Mabeza vs NLRC Baguio Summer Hotel Doubt: inclusion of the meals,

electiricity, lodging in the basic salary.

Rule Statement: First, proof must beshown that such facilities are

customarily furnished by the trade.

Second, the provision of deductiblefacilities must be voluntarily accepted

in writing by the employee. Finally,

facilities must be charged at fair and

reasonable value.

Case-Fact Statement: Theserequirements were not met in the

instant case. Private respondent

"failed to present any company policy

or guideline to show that the meal and

lodging . . . (are) part of the salary;" he

failed to provide proof of the

employee's written authorization; and,

he failed to show how he arrived atthe valuations.

More significantly, the food andlodging, or the electricity and water

consumed by the petitioner were not

facilities but supplements. A benefit

or privilege granted to an employee

for the convenience of the employer is

not a facility.

D-1 99-

101

Manila Mandarin vs.

NLRC Metro Transit Organization, Inc. vs.

NLRC: (a) The concept of wage

distortion assumes an existing

grouping or classification of

employees which establishesdistinctions among such employees on

some relevant or legitimate basis.

This classification is reflected in a

differing wage rate for each of the

existing classes of employees.; (b)

Wage distortions have often been the

result of government- decreed

increases in minimum wages. There

are, however, other causes of wage

distortions, like the merger of two (2)

companies (with differing


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classification of employees and

different wage rates) where the

surviving company absorbs all the

employees of the dissolved

corporation. (In the present Metro

case, as already noted, the wage

distortion arose because the

effectivity dates of wage increases

given to each of the two (2) classes of

employees (rank- in- file andsupervisory) had not been

synchronized in their respective

CBAs.); (c) Should a wage distortion

exist, there is no legal requirement

that, in the rectification of that

distortion by re- adjustment of the

wage rates of the differing classes of

employees, the gap which had

previously or historically existed be

restored in precisely the same amount

. In other words, correction of a wage

distortion may be done by re-

establishing a substantial orsignificant gap (as distinguished from

the historical gap) between the wage

rates of the differing classes of

employees;(d) The re-establishment

of a significant difference in wage

rates may be the result of resort to

grievance procedures or collective

bargaining negotiations.

D-2 99-

101

National Federation of

Labor vs. NLRC The concept of wage distortion

assumes an existing grouping or

classification of employees which

establishes distinctions among such

employees on some relevant orlegitimate basis. This classification is

reflected in a differing wage rate for

each of the existing classes of

employees. The wage distortion

anticipated in Wage Orders Nos. 3, 4, 5

and 6 was a "distortion" (or

"compression") which ensued from

the impact of those Wage Orders upon

the different wage rates of the several

classes of employees. Thus distortion

ensued where the result of

implementation of one or another of

the several Wage Orders was the totalelimination or the severe reduction of

the differential or gap existing

between the wage rates of the

differing classes of employees.

D-3 99-

101

Bankard Ees Union vs.

NLRC Rule: Prubankers Association v.

Prudential Bank and Trust Company

laid down the four elements of wage

distortion, to wit: (1.) An existing

hierarchy of positions with

corresponding salary rates; (2) A

significantchange in the salary rate of


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a lower pay class without a

concomitant increase in the salary

rate of a higher one; (3) The

elimination of the distinction

between the two levels; and (4) The

existence of the distortion in the

same region of the country.

Case Fact: It is thus clear that there isno hierarchy of positions between the

newly hi red and regular employees ofBankard, hence, the first element of

wage distorti on provided in

Prubankers is wanting. While

seniority may be a factor in

determining the wages of employees,

it cannot be made the sole basis in

cases where the nature of their work

differs. Moreover, for purposes of

determining the existence of wage

distortion, employees cannot create

their own independent classification

and use it as a basis to demand an

across-the-board increase in salary. The increase in the wages and salaries

of the newly-hi red was not due to a

prescribed law or wage order.

D-4 99-

101

Prubankers vs.

Prudential Prubankers Association v. Prudential

Bank and Trust Company laid down

the four elements of wage distortion,

to wit: (1.) An existing hierarchy of

positions with corresponding salary

rates; (2) A significantchange in the

salary rate of a lower pay class

without a concomitant increase in the

salary rate of a higher one; (3) Theelimination of the distinction

between the two levels; and (4) The

existence of the distortion in the

same region of the country.

Such distortion does not arise when awage order gives employees in one

branch of a bank higher compensation

than that given to their counterparts

in other regions occupying the same

pay scale, who are not covered by said

wage order. In short, the

implementation of wage orders in

one region but not in others doesnot in itself necessarily result in

wage distortion.


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Summary Finals

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