20. Arica vs. NLRC, 170 SCRA 776, G.R. No.

78210 February 28, 1989

The farm workers who lived in the farm were required to assemble 30 minutes before work for roll call. Held: The 30-minute assembly time is
not compensable under the Labor Code. Their houses are situated right on the area where the farm are located, such that after the roll call, they
can go back to their houses to attend to some chores. In short, they are not subject to the absolute control of the company during this period.
Otherwise, their failure to report in the assembly time would justify the company to impose disciplinary measures

FACTS: This case stemmed from a complaint filed against private respondent Stanfilco for assembly time, moral damages and
attorney’s fees, with the Regional Arbitration- Davao City. The Labor Arbiter rendered a decision in favor of private respondent
STANFILCO, holding that:

“We cannot but agree with respondent that the pronouncement in that earlier case, i.e. the thirty-minute assembly time long
practiced cannot be considered waiting time or work time and, therefore, not compensable, has become the law of the case which
can no longer be disturbed without doing violence to the time-honored principle of res judicata.”

NLRC uphold the Labor Arbiters’ decision and declared that: “Surely, the customary functions referred to in the above-quoted
provision of the agreement includes the long-standing practice and institutionalized non-compensable assembly time. This, in
effect, estopped complainants from pursuing this case.

MR was denied hence this petition for review on certiorari. Petitioners contend that the preliminary activities as workers of
respondents STANFILCO in the assembly area is compensable as working time (from 5:30am to 6:00 am) since these preliminary
activities are necessarily and primarily for private respondent’s benefit. These preliminary activities of the workers are as follows:

(a) First there is the roll call. Followed by getting their individual work assignments from the foreman. (b) Then, they are
individually required to accomplish the Laborer’s Daily Accomplishment Report during which they are often made to explain about
their reported accomplishment the following day. (c) Then they go to the stockroom to get the working materials, tools and
equipment. (d) Lastly, they travel to the field bringing with them their tools, equipment and materials. All these activities take 30
minutes to accomplish.

Respondent avers that the instant complaint is not new because it is the very same claim they brought against respondent by the
same group of rank and file employees in the case of Arica vs. National Labor Relations Commission which was filed before in a
different case. The said case involved a claim for “waiting time”, as the complainants purportedly were required to assemble.

In the previous case, the 30-minute assembly time long practiced and institutionalized by mutual consent of the parties under
their CBA cannot be considered as ‘waiting time’ within the purview of Section 5, Rule 1, Book III of the Rules and Regulations
Implementing the Labor Code.

ISSUE: Whether or not the “assembly time” is compensable. (NO)

RULING: The 30-minute assembly is a deeply-rooted, routinary practice of the employees, and the proceedings attendant thereto
are not infected with complexities as to deprive the workers the time to attend to other personal pursuits.

They are not new employees as to require the company to deliver long briefings regarding their respective work assignments.
Their houses are situated right on the area where the farms are located, such that after the roll call, which does not necessarily
require the personal presence, they can go back to their houses to attend to some chores.

In short, they are not subject to the absolute control of the company during this period, otherwise, their failure to report in the
assembly time would justify the company to impose disciplinary measures. The evidence of the case demonstrates that the 30-
minute assembly time was not primarily intended for the interests of the employer, but ultimately for the employees to indicate
their availability or non-availability for work during every working day

21. PAN AM vs. Pan American Employees Association, 1 SCRA 527, G.R. No. L-16275, February 23, 1961
During the meal period, the mechanics were required to stand by for emergency work; and if they happened not to be available when called, they
were reprimanded by the leadman. Held: The one-hour meal period should be considered over time work. It was not one of complete rest, but
was actually a work hour, since for its duration, the laborers had to be on ready call.
Facts: Appeal by certiorari from the decision of the Court of Industrial Relations in case No. 1055 – V dated October 10, 1959, and
its resolution en banc denying the motion for reconsideration by the petitioner herein.

The Court orders to compute the overtime compensation due the aforesaid fourteen (14) aircraft mechanic and the 2 employees
from the Communication Department based on the time sheet of said employees from February 23, 1952 – July 15, 1958 and to
submit his report within 30 days for further disposition by the court.

Petitioner contends that the finding of that the 1 – hour meal period should be considered work (deducting 15 minutes as time
allowed for eating) is not supported by substantial evidence.

Issue: Whether or not the 1 hour meal period should be considered as overtime work (after deducting 15 minutes)?

Held: Yes. The Court ruled that during the so called meal period, the mechanics were required to stand by for emergency work;
that if they happened not to be available when called, they were reprimanded by the lead man; that as in fact it happened on
many occasions, the mechanics had been called from their meals or told to hurry Employees Association up eating to perform
work during this period. Judgment appealed from is affirmed. Cost against appellant.

22. Detective Protection Bureau vs. CIR, GR L-4337, 90 Phil 665

The Bureau contended that the members of the Association impliedly renounced their right to claim OT pay since until the commencement of the
litigation, they never claimed for the same. Held: The law gives laborers the right to extra compensation even if they never claimed for OT pay.
As they could not expressly waive such extra compensation, they cannot be held to have impliedly waived it.

It appears that the Bureau had been granting the members of the Association, every month, "two days off"-days in which they
rendered no service, although they received salary for the whole month. Said Bureau contended below that the pay
corresponding to said 2-day vacation corresponded to the wages for extra work. The court rejected the contention, quite
property we believe, because in the contract there was no agreement to that effect; and such agreement, if any, would
probably be contrary to the provisions of the Eight-Hour Law (Act No. 444 sec. 6) and would be null and void ab initio.

It is argued here, in opposition to the payment, that until the commencement of this litigation the members of the Association
never claimed for overtime pay. That may be true. Nevertheless the law give them the right to extra compensation. And they
could not be held to have impliedly waived such extra compensation, for the obvious reason that they could not
have expressly waived it.

23. Cagampan vs. NLRC, 195 SCRA 533, G.R. Nos. 85122-24, March 22, 1991

FACTS
1. On April 17 and 18,1985, petitioners, all seamen, entered into separate contracts of employment with the Golden
Light Ocean Transport, Ltd., through its local agency, private respondent ACE MARITIME AGENCIES, INC.

2. Petitioners were deployed on May 7, 1985, and discharged on July 12, 1986. Thereafter, petitioners collectively
and/or individually filed complaints for nonpayment of overtime pay, vacation pay and terminal pay against private
respondent.

3. In addition, they claimed that they were made to sign their contracts in blank. Likewise, petitioners averred that
although they agreed to render services on board the vessel Rio Colorado managed by Golden Light Ocean Transport,
Ltd., the vessel they actually boarded was MV "SOIC I" managed by Columbus Navigation.

4. Two (2) petitioners, Jorge de Castro and Juanito de Jesus, charged that although they were employed as ordinary
seamen (OS), they actually performed the work and duties of Able Seamen (AB).

5. Private respondent was furnished with copies of petitioners' complaints and summons, but it failed to file its answer
within the reglementary period.

6. Thus, on January 12, 1987, an Order was issued declaring that private respondent has waived its right to present
evidence in its behalf and that the cases are submitted for decision.

7. On August 5, 1987, the Philippine Overseas Employment Administration (POEA) rendered a Decision dismissing
petitioners' claim for terminal pay but granted their prayer for leave pay and overtime pay. On appeal, the NLRC
reversed the decision; Hence, the petition. Petitioner contends, inter alia, that they are entitled to leave pay and
overtime pay.

ISSUE
Whether or not petitioners are entitled to leave pay and overtime pay

HELD
The court sustains the finding of respondent NLRC that petitioners were actually paid more than the amounts fixed in
their employment contracts. Even as the denial of petitioners' terminal pay by the NLRC has been justified, such denial
should not have been applied to petitioners Julio Cagampan and Silvino Vicera. For, a deeper scrutiny of the records by
the Solicitor General has revealed that the fact of overpayment does not cover the aforenamed petitioners since the
amounts awarded them were equal only to the amounts stipulated in the crew contracts. Since petitioners Cagampan
and Vicera were not overpaid by the company, they should be paid the amounts of US$583.33 and US$933.33,
respectively. As regards the question of overtime pay, the NLRC cannot be faulted for disallowing the payment of said
pay because it merely straightened out the distorted interpretation asserted by petitioners and defined the correct
interpretation of the provision on overtime pay embodied in the contract conformably with settled doctrines on the
matter. Notably, the NLRC ruling on the disallowance of overtime pay is ably supported by the fact that petitioners never
produced any proof of actual performance of overtime work. In short, the contract provision guarantees the right to
overtime pay but the entitlement to such benefit must first be established. Realistically speaking, a seaman, by the very
nature of his job, stays on board a ship or vessel beyond the regular eight-hour work schedule. For the employer to give
him overtime pay for the extra hours when he might be sleeping or attending to his personal chores or even just lulling
away his time would be extremely unfair and unreasonable.

24. Gaa vs. CA, 140 SCRA 304, G.R. No. L-44169, December 3, 1985

FACTS: Europhil Industries Corporation was formerly one of the tenants in Trinity Building, while Rosario A. Gaa was then the
building administrator. Europhil filed an action for damages against Gaa alleging that the latter perpetrated certain acts that can
be considered a trespass upon its rights namely, cutting of its electricity and removing its name from the building directory and
gate passes of its officials and employees.

The lower court ordered Gaa to pay Europhil actual, moral and exemplary damages. After such decision became final and
executory, the court issued a Notice of Garnishment and was served upon El Grande Hotel, where Gaa was then employed. The
sheriff garnished Gaa’s salary, commission and/or remuneration. Gaa filed a motion to lift said garnishment on the ground that her
"salaries, commission and, or remuneration” are exempted from execution under Article 1708 of the New Civil Code. The lower
court denied the motion. The Court of Appeals affirmed the lower court’s decision and held that Gaa is a manager and not a mere
laborer as contemplated under Article 1708.

ISSUE: Whether the petitioner is covered by Ariticle 1708 of the New Civil Code. (NO)

RULING: Article 1708 of the New Civil Code provides that “The laborer's wage shall not be subject to execution or attachment,
except for debts incurred for food, shelter, clothing and medical attendance.”

In determining whether a particular laborer or employee is really a "laborer," the character of the word he does must be taken
into consideration. He must be classified not according to the arbitrary designation given to his calling, but with reference to the
character of the service required of him by his employer. (See Oliver vs. Macon Hardware Co.)

A laborer is one whose work depends on mere physical power to perform ordinary manual labor and not one engaged in services
consisting mainly of work requiring mental skill or business capacity or the exercise of intellectual faculties. (See Kline vs. Russell)

Article 1708 used the word "wages" and not "salary" in relation to "laborer" when it declared what are to be exempted from
attachment and execution. The term "wages" applies to the compensation for manual labor, skilled or unskilled, paid at stated
times, and measured by the day, week, month, or season. While "salary" denotes a higher degree of employment, or a superior
grade of services, and implies a position of office. By contrast, the term “wages” indicates considerable pay for a lower and less
responsible character of employment, while "salary" is suggestive of a larger and more important service (See 35 Am. Jur. 496).
It is the legislature’s intent to operate the exemption in Article 1708 of the New Civil Code to those who are laboring men or
women in the sense that their work is manual. Persons belonging to this class usually look to the reward of a day's labor for
immediate or present support, and such persons are more in need of the exemption than any others.

In the instant case, Gaa is definitely not within that class of laborers to exempt her salary from execution. Gaa not an ordinary or
rank and file laborer but "a responsibly place employee," of El Grande Hotel. She is responsible for planning and coordinating the
activities of all housekeeping personnel to ensure the maintenance and orderliness of hotel rooms. She is then, occupying a
position equivalent to that of a managerial or supervisory position.

25. Mabeza vs. NLRC, GR 118506, April 18, 1997, 271 SCRA 670
Petitioner was dismissed as a chambermaid in private respondent’s hotel. The requirements for deducting values for facilities 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 at the valuations. More significantly, the
food and lodging, or the electricity and water consumed by the petitioner were not facilities but supplements.

Facts: Petitioner Norma Mabeza and her co-employees at the Hotel Supreme in Baguio City were asked by the hotel’s
management to sign an instrument attesting to the latter’s compliance with minimum wage and other labor standard provision.
The instrument provides that they have no complaints against the management of the Hotel Supreme as they are paid accordingly
and that they are treated well. The petitioner signed the affidavit but refused to go to the City’s Prosecutor’s Office to confirm the
veracity and contents of the affidavit as instructed by management. That same day, as she refused to go to the City Prosecutor’s
Office, she was ordered by the hotel management to turn over the keys to her living quarters and to remove her belongings to the
hotel’s premises. She then filed a leave of absence which was denied by her employer. She attempted to return to work but the
hotel’s cashier told her that she should not report to work and instead continue with her unofficial leave of absence. Three days
after her attempt to return to work, she filed a complaint against the management for illegal dismissal before the Arbitration
Branch of the NLRC in Baguio City. In addition to that, she alleged underpayment of wages, non-payment of holiday pay, service
incentive leave pay, 13th month pay, night differential and other benefits. Peter Ng, in their Answer, argued that her unauthorized
leave of absence from work is the ground for her dismissal. He even maintained that her alleged of underpayment and non-
payment of benefits had no legal basis. He raises a new ground of loss of confidence, which was supported by his filing of criminal
case for the alleged qualified theft of the petitioner. The Labor Arbiter ruled in favor of the hotel management on the ground of
loss of confidence. She appealed to the NLRC which affirmed the Labor Arbiter’s decision. hence, this petition.

Issue: Whether or not the dismissal by the private respondent of petitioner constitutes an unfair labor practice.

Held: The NLRC’s decision is reversed. The pivotal question in any case where unfair labor practice on the part of the employer is
alleged is whether or not the employer has exerted pressure, in the form of restraint, interference or coercion, against his
employee’s right to institute concerted action for better terms and conditions of employment. Without doubt, the act of
compelling employees to sign an instrument indicating that the employer observed labor standard provisions of the law when he
might not have, together with the act of terminating or coercing those who refuse to cooperate with the employees’ scheme
constitutes unfair labor practice. The labor arbiter’s contention that the reason for the monetary benefits received by the
petitioner between 1981 to 1987 were less than the minimum wage was because petitioner did not factor in the meals, lodging,
electric consumption and water she received during the period of computations. Granting that meals and lodging were provided
and indeed constituted facilities, such facilities could not be deducted without the employer complying first with certain legal
requirements. Without satisfying these requirements, the employer simply cannot deduct the value from the employee’s ages.
First, proof must be shown that such facilities are customarily furnished by the trade. Second, the provision of deductible facilities
must be voluntary accepted in writing by the employee. Finally, facilities must be charged at fair and reasonable value. These
requirements were not met in the instant case. Private respondent failed to present any company policy to show that the meal
and lodging are part of the salary. He also failed to provide proof of the employee’s written authorization and he failed to show
how he arrived at the valuations. More significantly, the food and lodging, or 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. The criterion in making a distinction between the two not so much lies in the kind but the purpose. Considering, therefore,
that hotel workers are required to work on different shifts and 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 the private respondent’s hotel.
 26. Millares vs. NLRC, 365 SCRA 42, GR No. 122827, Mar 29, 1999
Facts: Petitioners numbering one hundred sixteen (116) occupied the positions of Technical Staff,
Unit Manager, Section Manager, Department Manager, Division Manager and Vice President in
the mill site of respondent Paper Industries Corporation of the Philippines (PICOP) in Bislig,
Surigao del Sur. In 1992 PICOP suffered a major financial setback allegedly brought about by the
joint impact of restrictive government regulations on logging and the economic crisis. To avert
further losses, it undertook a retrenchment program and terminated the services of petitioners.
Accordingly, petitioners received separation pay computed at the rate of one (1) month basic
pay for every year of service. Believing however that the allowances they allegedly regularly
received on a monthly basis during their employment should have been included in the
computation thereof they lodged a complaint for separation pay differentials.
Applying Art.,97, par. (f), of the Labor Code which defines if wage," the Executive Labor Arbiter
opined that the subject allowances, being customarily furnished by respondent PICOP and
regularly received by petitioners, formed part of the latter's wages. Resolving the controversy
from another angle, on the strength of the ruling in Santos v. NLRC and Soriano v. NLRC that in the
computation of separation pay account should be taken not just of the basic salary but also of
the regular allowances that the employee had been receiving, he concluded that the allowances
should be included in petitioners' base pay. Thus respondent PICOP was ordered on 28 April
1994 to pay petitioners Four Million Four Hundred Eighty-One Thousand Pesos (P4,481,000.00)
representing separation pay differentials plus ten per cent (10%) thereof as attorney's fees.
The National Labor Relations did not share the view of the Executive Labor Arbiter. On 7 October
1994 it set aside the assailed decision by decreeing that the allowances did not form part of the
salary base used in computing
separation pay.
Issue: Whether or not petitioner’s allowances are included in the definition of "facilities" in Article
97, par. (f), of the Labor Code.
Held: "Customary" is founded on long-established and constant practice connoting regularity.
The receipt of an allowance on a monthly basis does not ipso facto characterize it as regular and
forming part of salary because the nature of the grant is a factor worth considering. On the
other hand, the transportation allowance is in the form of advances for actual transportation
expenses subject to liquidation x x x given only to employees who have personal cars.
The Bislig allowance is given to Division Managers and corporate officers assigned in Bislig,
Surigao del Norte. Once the officer is transferred outside Bislig, the allowance stops. The Court
added that in the availment of the transportation allowance, respondent PICOP set another
requirement that the personal cars be used by the employees in the performance of their duties.
When the conditions for availment ceased to exist, the allowance reached the cutoff point. The
finding of the NLRC along the same line likewise merits concurrence, i.e., petitioners' continuous
enjoyment of the disputed allowances was based on contingencies the occurrence of which
wrote finis to such enjoyment.
Although it is quite easy to comprehend "board" and "lodging," it is not so with "facilities." Thus
Sec. 5, Rule VII, Book III, of the Rules Implementing the Labor Code gives meaning to the term as
including articles or services for the benefit of the employee or his family but excluding tools of the trade or articles or
service primarily for the benefit of the employer or necessary to the conduct of the employer's business. The Staff
/Manager's allowance may fall under "lodging" but the transportation and Bislig allowances are
not embraced in "facilities" on the main consideration that they are granted as well as the
Staff/Manager's allowance for respondent PICOP's benefit and convenience, i.e., to insure that
petitioners render quality performance. In determining whether a privilege is a facility, the
criterion is not so much its kind but its purpose.
27. Traders Royal Bank vs. NLRC, 189 SCRA 274, G.R. No. 88168 August 30, 1990
Respondent union filed a complaint against TRB for diminution of benefits in reducing their bonus for 1986. Held: No diminution of benefits.
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 employee’s basic salaries or wages”.

Facts: Respondent union filed a letter-complaint against petitioner TRB for the diminution of benefits being enjoyed by the employees since time
immemorial, e.g. mid-year bonus, from 2 months gross pay to 2 months basic and year-end bonus from 3 months gross to only 2 months.
Petitioner insisted that it had paid the employees holiday pay. The practice of giving them bonuses at year’s end, would depend on how profitable
the operation of the bank had been.

NLRC found TRB guilty of diminution of benefits due to the private respondents and ordered it to pay the said employees’ claims for differentials in
their holiday, mid-year, and year-end bonuses.

Issue: Whether or not bonuses are part of labor standards.

Held: No. A bonus is a “gratuity or act of liberality of the giver which the recipient has no right to demand as a matter of right”. It is something given
in addition to what is ordinarily received by or strictly due the recipient. 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
employee’s basic salaries or wages”.

28. TSPIC Corp. vs. TSPICEU-FFW, 545 SCRA 215 G.R. NO. 163419 : February 13, 2008
An erroneously granted benefit may be withdrawn without violating the prohibition against non-diminution of benefits. Hence, any amount given
to the employees in excess of what they were entitled to may be legally deducted by TSPIC from the employees' salaries

FACTS: TSPI Corporation entered into a Collective Bargaining Agreement with the corporation Union for the increase of salary for
the latter’s members for the year 2000 to 2002 starting from January 2000. thus, the increased in salary was materialized on
January 1, 2000. However, on October 6, 2000, the Regional Tripartite Wage and production Board raised daily minimum wage
from P 223.50 to P 250.00 starting November 1, 2000. Conformably, the wages of the 17 probationary employees were increased
to P250.00 and became regular employees therefore receiving another 10% increase in salary. In January 2001, TSPIC
implemented the new wage rates as mandated by the CBA. As a result, the nine employees who were senior to the 17 recently
regularized employees, received less wages. On January 19, 2001, TSPIC’s HRD notified the 24 employees who are private
respondents, that due to an error in the automated payroll system, they were overpaid and the overpayment would be deducted
from their salaries starting February 2001. The Union on the other hand, asserted that there was no error and the deduction of the
alleged overpayment constituted diminution of pay.

ISSUE: Whether the alleged overpayment constitutes diminution of pay as alleged by the Union.

RULING: Yes, because it is considered that Collective Bargaining Agreement entered into by unions and their employers are
binding upon the parties and be acted in strict compliance therewith. Thus, the CBA in this case is the law between the employers
and their employees. Therefore, there was no overpayment when there was an increase of salary for the members of the union
simultaneous with the increasing of minimum wage for workers in the National Capital Region. The CBA should be followed thus,
the senior employees who were first promoted as regular employees shall be entitled for the increase in their salaries and the
same with lower rank workers.
TSPIC also maintains that charging the overpayments made to the 16 respondents through staggered deductions from their
salaries does not constitute diminution of benefits.

Diminution of benefits is the unilateral withdrawal by the employer of benefits already enjoyed by the employees. There is
diminution of benefits when it is shown that: (1) the grant or benefit is founded on a policy or has ripened into a practice over a
long period; (2) the practice is consistent and deliberate; (3) the practice is not due to error in the construction or application of
a doubtful or difficult question of law; and (4) the diminution or discontinuance is done unilaterally by the employer. 27

As correctly pointed out by TSPIC, the overpayment of its employees was a result of an error. This error was immediately
rectified by TSPIC upon its discovery. We have ruled before that an erroneously granted benefit may be withdrawn without
violating the prohibition against non-diminution of benefits.

Here, no vested right accrued to individual respondents when TSPIC corrected its error by crediting the salary increase for the
year 2001 against the salary increase granted under WO No. 8, all in accordance with the CBA.

Hence, any amount given to the employees in excess of what they were entitled to, as computed above, may be legally
deducted by TSPIC from the employees’ salaries. It was also compassionate and fair that TSPIC deducted the overpayment
in installments over a period of 12 months starting from the date of the initial deduction to lessen the burden on the overpaid
employees. TSPIC, in turn, must refund to individual respondents any amount deducted from their salaries which was in
excess of what TSPIC is legally allowed to deduct from the salaries based on the computations discussed in this Decision.

29. Aguador vs. Enerio, GR L-20388, Jan. 30, 1971

Minimum Wage Law whose provisions fixing the minimum wage of employees in both the private and government sectors are mandatory and
cannot be waived

Facts: On February 20, 1956 the appellees filed a petition for mandamus in the court below against the
municipal treasurer, the then incumbent municipal mayor and members of the municipal council of Oroquieta,
Misamis Occidental, for payment of salary differentials allegedly due them, as employees of the municipal
government, under the terms of their respective appointments. The main cause of complaint of the appellees
in that case was that, while the municipal council of Oroquieta, on December 29, 1955 passed two
resolutions, numbered 125 and 126, authorizing the appropriation and payment to them of salary differentials
on account of the enactment of the Minimum Wage Law (R.A. 602 which fixed the minimum wage of
industrial workers and government employees at P4.00 per day), the said council, on January 14, 1956,
revoked the said resolutions, allegedly because the latter were passed merely to benefit a few officials and
employees of the municipality, there were not enough funds to pay the said salary differentials, and the
Minimum Wage Law is not obligatory upon the government and public corporations.

With respect, in turn, to the argument that the court below should have admitted evidence that
the appellees were extended subsequent appointments at reduced salary rates, it is our consi-
dered opinion that it is now late in the day to raise this point.  This particular issue should
have been raised in the mandamus case.  Moreover, from the decision of the lower court in
civil case 1865, it appears that except for two of the petitioners[4] in that case, the salary due the
rest of the petitioners therein was P120.00 a month under their respective appointments.  This
monthly salary, at the time the Minimum Wage Law took effect, was, as practiced by the
government, the minimum monthly salary that government employees were supposed to
receive per month.  Hence, even if the appellees were really extended subsequent
appointments at reduced salary rates, such a reduction would have been void for being
contrary to the provisions of the law.
30. National Federation of Labor vs. NLRC, 234 SCRA 311, GR 103586, July 2, 1994

FACTS: Between 1 November 1983 and 1 November 1984, Wage Orders Nos. 3, 4, 5 and 6 were successively promulgated. Before
the effectivity of Wage Order No. 3, there existed between the wage rates of regular employees and of casual (or non-regular)
employees a positive differential in the amount of P4.56. Upon the effectivity of Wage Order No. 5, dated 16 June 1984, the
positive differential between the two groups of employees was eliminated. Thus, grievance meetings were held by petitioner
National Federation of Labor ("NFL") and private respondent.
On 21 June 1984, all the casual or non-regular employees of private respondent Company were "regularized," pursuant to the
request of petitioner NFL. On 1 July 1984, the effectivity date of the 1984 Collective Bargaining Agreement between NFL and the
Company, all regular employees of the Company received an increase of P1.84 in their daily wage; the regular daily wage of the
regular employees thus became P35.84 as against P34.00 per day for non-regular employees.

As a result of the implementation of Wage Order No. 6, the daily wage of casual employees was increased to P36.00. At the same
time, the Company unilaterally granted an across-the-board increase of P2.00 in the daily rate of all regular employees, thus
increasing their daily wage to P37.84. On 1 July 1985, the anniversary date of the increases under the CBA, all regular employees
who were members of the collective bargaining unit got a raise of P1.76 in their basic daily wage, which pushed that daily wage
from P37.84 to P39.60, as against the non-regular's basic wage of P36.00 per day.

Meantime, while the above wage developments were unfolding, the Company experienced a work output slow down. The
Company directed some workers to explain the reduction in their work output, but they failed to comply. This situation eventually
escalated into a labor dispute, which was certified by the Secretary of Labor to the National Labor Relations Commission for
compulsory conciliation. Although the Union and the Company reached an agreement on other matters, the wage distortion issue
was left unresolved

The NLRC En Banc rendered a decision which in effect found the existence of wage distortion and required the Company to pay a
P1.00 wage increase effective 1 May 1984. On motion for partial reconsideration filed by the Company, the NLRC En Banc's
decision was reconsidered and set aside by the NLRC Fifth Division. The Fifth Division of the NLRC in effect found that while a wage
distortion did exist commencing 16 June 1984, the distortion persisted only for a total of fifteen days and accordingly required
private respondent company to pay "a wage increase of P2.00 per day to all regular workers effective June 16, 1984 up to June 30,
1984 or a total of fifteen days.

According to the NLRC Fifth Division, from July 1, 1984, the regular employees received an increase of P1.84 making their daily
wage P35.84 as against the wage of casual employees of P34.00 per day. The difference in the wage scale between the two groups
of employees was maintained even after the implementation of Wage Order No. 6 which took effect on November 1, 1984

ISSUE: Whether or not the wage distortion had ceased to exist after 1 July 1984 (YES)

RULING: The claim of NFL was that the initial — prior to effectivity of Wage Order No. 3 — differential of P4.56 in the wage rate of
regular employees and that of casual employees, should be re-created this time between the wage rates of the newly
"regularized" employees (i.e., the casual employees regularized by the Company on 21 June 1984) and the "old" regular
employees (employees who, allegedly, had been regular employees for at least three years before the "regularization" of the
casuals). NFL stresses that seniority is a valid basis of distinction between differing groups of employees, under the Labor Code.

A statutory definition of "wage distortion" is now found in Article 124 of the Labor Code, as amended by Republic Act. No. 6727
(dated 9 June 1989), which reads as follows:

Article 124. Standards/Criteria for Minimum Wage Fixing — . . . xxx xxx xxx As used herein, a wage distortion shall mean a situation
where an increase in prescribed wage rates results in the elimination or severe contraction of intentional quantitative differences
in wage or salary rates between and among employee groups in an establishment as to effectively obliterate the distinctions
embodied in such wage structure based on skills, length of service, or other logical bases of differentiation. (Emphasis supplied)

From the above quoted material, it will be seen that the concept of wage distortion assumes an existing grouping or classification
of employees which establishes distinctions 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. 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 total elimination or the severe reduction of the differential or gap existing between the wage
rates of the differing classes of employees.

It is important to note that the remedy contemplated in the Wage Orders, and now in Article 124 of the Labor Code, for a wage
distortion consisted of negotiations between employer and employees for the rectification of the distortion by re-adjusting the
wage rates of the differing classes of employees. As a practical matter, this ordinarily meant a wage increase for one or more of
the affected classes of employees so that some gap or differential would be re-established. There was no legal requirement that
the historical gap which existed before the implementation of the Wage Orders be restored in precisely the same form or amount.

Applying the above concept to the case at bar, we note that there did exist a two-fold classification of employees within the
private respondent Company: regular employees on the one hand and casual (or non-regular) employees on the other. As can be
seen from the figures referred to earlier, the differential between these two (2) classes of employees existing before Wage Order
No. 3 was reduced to zero upon the effectivity of Wage Order No. 5 on 16 June 1984. Obviously, distortion — consisting of
complete elimination of the wage rate differential — had occurred. It is equally clear, however, that fifteen (15) days later, on 1
July 1984, upon effectivity of the wage increase stipulated in the collective bargaining agreement between the parties, a gap or
differential of P1.84 was recreated. This restored differential persisted after the effectivity of Wage Order No. 6 on 1 November
1984. By operation of the same CBA, by 1 July 1985, the wage differential had grown to P3.60.

We believe and so hold that the re-establishment of a significant gap or differential between regular employees and casual
employees by operation of the CBA was more than substantial compliance with the requirements of the several Wage Orders (and
of Article 124 of the Labor Code). That this reestablishment of a significant differential was the result of collective bargaining
negotiations, rather than of a special grievance procedure, is not a legal basis for ignoring it. The NLRC En Banc was in serious error
when it disregarded the differential of P3.60 which had been restored by 1 July 1985 upon the ground that such differential
"represent[ed] negotiated wage increase[s] which should not be considered covered and in compliance with the Wage Orders."
The Wage Orders referred to above had provided for the crediting of increases in wages or allowances granted or paid by
employers within a specified time against the statutorily prescribed increases in minimum wages. A similar provision recognizing
crediting of increases in daily basic wage rates granted by employers pursuant to collective bargaining agreements, is set out in
Section 4(d) of R.A. No. 6727, a statute which sought to "rationalize wage policy determination by establishing the mechanism and
proper standards therefor —." In Apex Mining Company, Inc. v. National Labor Relations Commission, the Supreme Court said:

It is important to note that the creditability provisions in Wage Orders Nos. 5 and 6 (as well as the parallel provisions in Wage
Orders Nos. 2, 3 and 4) are grounded in an important public policy. That public policy may be seen to be the encouragement of
employers to grant wage and allowance increases to their employees higher than the minimum rates of increases prescribed by
statute or administrative regulation.

To obliterate the creditability provisions in the Wage Orders through interpretation or otherwise, and to compel employers simply
to add legislated increases in salaries or allowances without regard to what is already being paid, would be to penalize employers
who grant their workers more than the statutorily prescribed minimum rates of increases. Clearly, this would be counter-
productive so far as securing the interests of labor is concerned. The creditability provisions in the Wage Orders prevent the
penalizing of employers who are industry leaders and who do not wait for statutorily prescribed increases in salary or allowances
and pay their workers more than what the law or regulations require. (Emphases in the original)

We consider, still further, that the "regularization" of the casual or non-regular employees on 21 June 1984 which was unilaterally
effected by the Company (albeit upon the request of petitioner NFL), in conjunction with the coming into effect of the increases in
daily wage stipulated in the CBA, had the effect of rendering the whole problem of wage distortion academic. The act of
"regularization" eliminated the classification scheme in respect of which the wage distortion had existed.

Petitioner NFL's principal contention that the wage distortion persisted with respect to the "old" regular employees and the
"newly regularized" employees, is realistically a claim or demand that the classification of "regular" employees be broken down
into a sub-classification of "new regulars" and "old regulars." A basic problem with this contention is that, per the record of this
case and during the period of time here relevant, there was in fact no pre-existing sub-classification of regular employees into
"new regulars" and "old regulars" (i.e., on the basis of seniority or longevity) in the Company. It follows that, as pointed out by the
Solicitor-General, no wage distortion within the meaning of Wage Orders Nos. 3 through 6 (and of Article 124 of the Labor Code)
continued beyond the "regularization" of the casual employees on 21 June 1984. It may be — though here again the record is
silent — that the Company had some other sub-grouping of regular employees on the basis, for instance, of the kind of functions
discharged by employees (e.g., rank and file; supervisory; middle management; senior management; highly technical, etc.).

31. Congson vs. NLRC, 243 SCRA 260 G.R. No. 114250 April 5, 1995
Undoubtedly, petitioner's practice of paying the private respondents the minimum wage by means of legal tender combined with tuna liver and
intestines runs counter to the above cited provision of the Labor Code. The fact that said method of paying the minimum wage was not only
agreed upon by both parties in the employment agreement but even expressly requested by private respondents, does not shield petitioner. Article
102 of the Labor Code is clear. Wages shall be paid only by means of legal tender. The only instance when an employer is permitted to pay
wages in forms other than legal tender, that is, by checks or money order, is when the circumstances prescribed in the second paragraph of Article
102 are present.

Facts: Petitioner is the registered owner of Southern Fishing Industry. Private respondents were
hired on various dates by petition'er as regular piece-rate workers. They were uniformly paid at
a rate of P1.00 per tuna weighing thirty (30) to eighty (80) kilos per movement, that is — from
the fishing boats down to petitioner's storage plant at a load/unload cycle of work until the tuna
catch reached its final shipment/destination. They did the work of unloading tuna from fishing
boats to truck haulers; unloading them again at petitioner's cold storage plant for filing, storing,
cleaning, and maintenance; and finally loading the processed tuna for shipment. They worked
seven (7) days a week.
During the first week of June 1990, petitioner notified his workers of his proposal to reduce the
rate-per-tuna movement due to the scarcity of tuna. Private respondents resisted petitioner's
proposed rate reduction. When they reported for work the next day, they were informed that
they had been replaced by a new set of workers, When they requested for a dialogue with the
management, they were instructed to wait for further notice. They waited for the notice of
dialogue for a full week but in vain.
On 15 June 1990, private respondents filed a case against petitioner before the NLRC Sub-
Regional Arbitration. On 2 July 1990, private respondents filed another case against petitioner,
containing an additional claim for separation pay should their complaint for constructive
dismissal be upheld. Labor Arbiter held that petitioner indeed constructively dismissed the
respondents. On appeal, NLRC ruled that the petitioner was guilty of illegal dismissal. Hence this
petition.
Issue: Whether or not the mode of payment used by the petitioner is accepted and what the law
mandates.
Held: Article 102 of the Labor Code provides that: No employer shall pay the wages of an
employee by means of, promissory notes, vouchers, coupons, tokens tickets, chits, or any object
other than legal tender, even when expressly requested by the employee. Payment of wages by
check or money order shall be allowed when such manner of payment is customary on the date
of effectivity of this Code, or is necessary as specified in appropriate regulations to be issued by
the Secretary of Labor or as stipulated in a collective bargaining agreement.
Undoubtedly, petitioner's practice of paying the private respondents the minimum wage by
means of legal tender combined with tuna liver and intestines runs counter to the above cited
provision of the Labor Code. The fact that said method of paying the minimum wage was not
only agreed upon by both parties in the employment agreement but even expressly requested
by private respondents, does not shield petitioner. Article 102 of the Labor Code is clear. Wages
shall be paid only by means of legal tender. The only instance when an employer is permitted to
pay wages informs other than legal tender, that is, by checks or money order, is when the
circumstances prescribed in the second paragraph of Article 102 are present
32. Bolinao vs. Padolina, 186 SCRA 368 G.R. No. 81415 June 6, 1990
Article 110 of the Labor Code and its implementing rule cannot be invoked absent of formal declaration of bankruptcy or a liquidation order.
Facts: Petitioners were former employees of Sabena Mining Corporation. In 1982 and 1983 they were laid off without being
recalled. In September, 1983, petitioners filed a formal complaint for collection of unpaid salaries, unused accrued vacation and
sick leave benefits, 13th month pay and separation pay before the National Labor Relations Commission (NLRC) against Sabena
Mining Corporation and Development Bank of the Philippines. On May 29,1984, a compromise agreement was entered into by the
parties, wherein petitioners were to be paid on a staggered basis. The company faithfully complied with the scheduled payments
only up to March, 1985 because it ceased operations effective April 1, 1985. With this development, petitioners moved for the
issuance of a writ of execution in June, 1985. In an order dated June 21, 1985, the Labor Arbiter issued a writ of execution against
the company to collect the balance. On June 27, 1985 Deputy Sheriff Antonio P. Soriano garnished the remaining amount of
P150,279.64 in the savings account of the company at the Development Bank of the Philippines (DBP). However, the same amount
was previously garnished by two creditors of the company; namely, Bank of America and Phelps Dodge (Phils). In an order dated
September 30, 1987, the respondent court directed the DBP to release to its Deputy Sheriff, herein respondent Carlos G. Maog,
the amount of P150,279.64 declaring that the writ of preliminary attachment made by Bank of America thru Deputy Sheriff
Norberto Doblado in Civil Case No. 45452 by the Pasig Regional Trial Court cannot prevail over the garnishment pursuant to a writ
of execution issued in Civil Case No. 50936 in favor of respondent Phelps Dodge (Phils.) Inc., for failure of Bank of America to
prosecute its hen.

Issue: Whether the petitioners enjoy preferential right or claim over the funds of Sabena Mining Corporation.

Held: No. It is quite clear from the provisions of Article 110 of the Labor Code and Section 10, Rule VIII, Book H of the Revised Rules
and Regulations Implementing the Labor Code, that a declaration of bankruptcy or a judicial liquidation must be present before
the worker's preference may be enforced. Thus, it was held that Article 110 of the Labor Code and its implementing rule cannot be
invoked absent a formal declaration of bankruptcy or a liquidation order.

In the case at bar, there was no showing of any insolvency proceeding or declaration of bankruptcy or judicial liquidation that was
being filed by Sabena Mining Corporation. It is only an extra-judicial foreclosure that was being enunciated as when DBP
extrajudicially foreclosed the assets of Sabena Mining Corporation. Conversely, to hold that Article 110 is also applicable in extra-
judicial proceedings would be putting the worker in a better position than the State which could only assert its own prior
preference in case of a judicial proceeding. Article 110 must not be viewed in isolation and must always be reckoned with the
provisions of the Civil Code.

The reason behind the necessity for a judicial proceeding or a proceeding in rem before the concurrence and preference of credits
may be appealed is to bind all interested persons whether known to the parties or not. The claims of all credits whether preferred
or non-preferred, the Identification of the preferred ones and the totality of the employer's assets should be brought into the
picture. There can then be an authoritative, fair and binding adjudication instead of the piece meal settlement which would result
from the questioned decision in this case.

33. Republic vs. Peralta, 150 SCRA 37 G.R. No. 56568, 20 May 1987
Insolvency proceedings but there’s claims of workers (separation pay), BIR (taxes), BuCor. Which of these claims should be given preference?
TAXES and Customs Duty over Separation pay because the matter is special preferred credit under Art 2241 of Civil Code

Facts: In the voluntary insolvency proceedings commenced in May 1977 by private respondent
Quality Tobacco Corporation (the "Insolvent"), the following claims of creditors were filed. In its
questioned Order of 17 November 1980, the trial court held that the above-enumerated claims
of USTC and FOITAF (hereafter collectively referred to as the "Unions") for separation pay of
their respective members embodied in final awards of the National Labor Relations Commission
were to be preferred over the claims of the Bureau of Customs and the Bureau of Internal
Revenue. The trial court, in so ruling, relied primarily upon Article 110 of the Labor Code which
reads thus:
Article 110. Worker preference in case of bankruptcy — In the event of bankruptcy or liquidation of an
employer's business, his workers shall enjoy first preference as regards wages due them for
services rendered during the period prior to the bankruptcy or liquidation, any provision of law
to the contrary notwithstanding. Union paid wages shall be paid in full before other creditors
may establish any claim to a share in the assets of the employer.
The Solicitor General, in seeking the reversal of the questioned Orders, argues that Article 110
of the Labor Code is not applicable as it speaks of "wages," a term which he asserts does not
include the separation pay claimed by the Unions. "Separation pay," the Solicitor General contends,
is given to a laborer for a separation from employment computed on the basis of the number of
years the laborer was employed by the employer; it is a form of penalty or damage against the employer in
favor of the employee for the latter's dismissal or separation from service.
Issue: Whether or not Article 110 would affect the complete scheme of classification, concurrence
and preference of credits in insolvency set out in the Civil Code.
Held: Yes, it does. We come to the question of what impact Article 110 of the Labor Code has had
upon the complete scheme of classification, concurrence and preference of credits in insolvency
set out in the Civil Code. We believe and so hold that Article 110 of the Labor Code did not
sweep away the overriding preference accorded under the scheme of the Civil Code to tax
claims of the government or any subdivision thereof which constitute a lien upon properties of
the Insolvent. It is frequently said that taxes are the very lifeblood of government. The effective
collection of taxes is a task of highest importance for the sovereign. It is critical indeed for its
own survival. It follows that language of a much higher degree of specificity than that exhibited
in Article 110 of the Labor Code is necessary to set aside the intent and purpose of the legislator
that shines through the precisely crafted provisions of the Civil Code. It cannot be assumed
simpliciter that the legislative authority, by using in Article 110 the words "first preference" and
"any provision of law to the contrary notwithstanding" intended to disrupt the elaborate and
symmetrical structure set up in the Civil Code. Neither can it be assumed casually that Article
110 intended to subsume the sovereign itself within the term "other creditors" in stating that
"unpaid wages shall be paid in full before other creditors may establish any claim to a share in the
assets of employer." Insistent considerations of public policy prevent us from giving to "other
creditors" a linguistically unlimited scope that would embrace the universe of creditors save only
unpaid employees.
We, however, do not believe that Article 110 has had no impact at all upon the provisions of the
Civil Code. Bearing in mind the overriding precedence given to taxes, duties and fees by the
Civil Code and the fact that the Labor Code does not impress any lien on the property of an
employer, the use of the phrase "first preference" in Article 110 indicates that what Article 110
intended to modify is the order of preference found in Article 2244, which order relates, as we have seen,
to property of the Insolvent that is not burdened with the liens or encumbrances created or
recognized by Articles 2241 and 2242. We have noted that Article 2244, number 2, establishes
second priority for claims for wages for services rendered by employees or laborers of the
Insolvent "for one year preceding the commencement of the proceedings in insolvency." Article
110 of the Labor Code establishes "first preference" for services rendered "during the period
prior to the bankruptcy or liquidation, " a period not limited to the year immediately prior to the
bankruptcy or liquidation. Thus, very substantial effect may be given to the provisions of Article
110 without grievously distorting the framework established in the Civil Code by holding, as we
so hold, that Article 110 of the Labor Code has modified Article 2244 of the Civil Code in two
respects: (a) firstly, by removing the one year limitation found in Article 2244, number 2; and (b)
secondly, by moving up claims for unpaid wages of laborers or workers of the Insolvent from
second priority to first priority in the order of preference established I by Article 2244.
34. PLDT vs. Estranero, GR 192518, Oct 15, 2014
FACTS: On July 1, 1995, PLDT employed the respondent as an Auto-mechanic/Electrician Helper until his separation
from the service in 2003.

In the year 1195, PLDT adopted a company-wide Manpower Reduction Program, aimed at reducing its work force. By virtue of the
MRP, a number of positions were declared redundant. Among those gravely affected by the MRP was the Fleet Management
Division where respondent was assigned.

Attracted by the separation pay offered by the company, the respondent expressed his conformity to his inclusion in the MRP.

The respondent was entitled to 200% of his basic monthly salary for ever year of service by way of redundancy pay or equivalent to
P240,000.00. In addition, he was also entitled to other benefits he has earned for the years prior to, and during the year of his actual
separation. Thus, his aggregate redundancy pay plus other earned benefits amounted to P267,028.37.

However, the respondent had outstanding liabilities arising from various loans he obtained from different entities, namely: the Home
Development Mutual Fund, PLDT Employee Credit Cooperative, Inc., PLDT Service Cooperative, Inc., Social Security System and
the Manggagawa ng Komunikasyon sa Pilipinas, which summed to P267,028.37. Thus, PLDT deducted the said amount from the
payment that the respondent was supposed to receive as his redundancy pay.

 As a result, repondent’s take home pay showed in the amount of “zero pesos”. This prompted the respondent to retract his
availment of the separation pay package offered to him. However, despite said retraction, respondent was no longer allowed to
report for work.

ISSUE: Whether or not the petitioners can validly deduct the respondent’s outstanding loan obligation from his
redundancy pay

RULING: It is clear in Article 113 of the Labor Code that no employer, in his own behalf or in behalf of any person,
shall make any deduction from the wages of his employees, except in cases where the employer is authorized by law or
regulations issued by the Secretary of Labor and Employment. Meanwhile, the Omnibus Rules Implementing the Labor
Code provides that deductions from the wages of the employees may be made by the employer when such deductions are
authorized by law, or when the deductions are with the written authorization of the employees for payment to a third
person. Thus, any withholding of an employee’s wages by an employer may only be allowed in the form of wage
deductions under the circumstances provided in Article 113 of the Labor Code, as well as the Omnibus Rules
implementing it. Further, Article 116 of the Labor Code clearly provides that it is unlawful for any person, directly or
indirectly, to withhold any amount from the wages of a worker without the worker’s consent.

In this case, the deductions made to the respondent’s redundancy pay do not fall under any of the circumstances provided under
Article 113, nor was it established with certainty that respondent has consented to the said deductions or that the petitioners had
authority to make such deductions. 

35. Milan vs. NLRC, GR 202961, Feb 4, 2015

FACTS: As Solid Mills’ employees, petitioners Milan, et al. and their families were allowed to occupy SMI Village, a property owned
by respondent Solid Mills. According to Solid Mills, this was “out of liberality and for the convenience of its employees . . . and on
the condition that the employees . . . would vacate the premises anytime the Company deems fit.”

Subsequently, petitioners were informed that Solid Mills would cease its operations due to serious business losses. NAFLU
(petitioner’s labor union) recognized Solid Mills’ closure due to serious business losses in the memorandum of agreement. The
memorandum of agreement provided for Solid Mills’ grant of separation pay less accountabilities, accrued sick leave benefits,
vacation leave benefits, and 13th month pay to the employees. Later on, Solid Mills, through Alfredo Jingco, sent to petitioners
individual notices to vacate SMI Village. As a consequence, petitioners were no longer allowed to report for work. They were
required to sign a memorandum of agreement with release and quitclaim before their vacation and sick leave benefits, 13th
month pay, and separation pay would be released. Employees who signed the memorandum of agreement were considered to
have agreed to vacate SMI Village, and to the demolition of the constructed houses inside as condition for the release of their
termination benefits and separation pay. Petitioners refused to sign the documents and demanded to be paid their benefits and
separation pay.

Hence, petitioners filed complaints before the Labor Arbiter for alleged non- payment of separation pay, accrued sick and vacation
leaves, and 13th month pay. They argued that their accrued benefits and separation pay should not be withheld because their
payment is based on company policy and practice. Moreover, the 13th month pay is based on law, specifically, Presidential Decree
No. 851. Their possession of Solid Mills property is not an accountability that is subject to clearance procedures. They had already
turned over to Solid Mills their uniforms and equipment when Solid Mills ceased operations.

ISSUE: Whether Solid Mills is allowed to withhold terminal pay and benefits pending the petitioners’ return of its properties. (YES)

RULING: Requiring clearance before the release of last payments to the employee is a standard procedure among employers,
whether public or private. Clearance procedures are instituted to ensure that the properties, real or personal, belonging to the
employer but are in the possession of the separated employee, are returned to the employer before the employee’s departure.

The Civil Code also provides that the employer is authorized to withhold wages for debts due: Article 1706. Withholding of the
wages, except for a debt due, shall not be made by the employer

“Debt” in this case refers to any obligation due from the employee to the employer. It includes any accountability that the
employee may have to the employer. There is no reason to limit its scope to uniforms and equipment, as petitioners would argue.

More importantly, respondent Solid Mills and NAFLU, the union representing petitioners, agreed that the release of petitioners’
benefits shall be “less accountabilities.”

“Accountability,” in its ordinary sense, means obligation or debt. The ordinary meaning of the term “accountability” does not limit
the definition of accountability to those incurred in the worksite. As long as the debt or obligation was incurred by virtue of the
employer-employee relationship, generally, it shall be included in the employee’s accountabilities that are subject to clearance
procedures.

It may be true that not all employees enjoyed the privilege of staying in respondent Solid Mills’ property. However, this alone does
not imply that this privilege when enjoyed was not a result of the employer-employee relationship. Those who did avail of the
privilege were employees of respondent Solid Mills. Petitioners’ possession should, therefore, be included in the term
“accountability.” The return of the property owned by their employer Solid Mills became an obligation or liability on the part of
the employees when the employer-employee relationship ceased. Thus, respondent Solid Mills has the right to withhold
petitioners’ wages and benefits because of this existing debt or liability.

36. Morabe vs. Brown, 95 Phil 181 G.R. No. L-6018. May 31, 1954

Facts: The original petition filed in the Court of First Instance alleges that the respondent had dismissed Pablo
S. Afuang because in an investigation conducted by the petitioner of charges against the respondent that the
latter paid his employees beyond the time fixed in Republic Act No. 602, the said Afuang was one of the
complainants; that the respondent discharged the said employee in violation of section 13 of said Act. The
petitioner, therefore, prayed that the respondent be ordered to reinstate Pablo S. Afuang, and that a writ of
preliminary mandatory injunction issue for his reinstatement.

Court of First Instance rendered judgment finding that the dismissal from the service of Pablo S. Afuang is
unlawful and violates section 13 of the Minimum Wage Law, because the fact that he testified at the
investigation is not a valid ground for his dismissal from the service. The court, however, refused to grant an
order for the reinstatement of said Pablo S. Afuang on the ground that this remedy, which it considers as an
injunction, is available only against acts about to be committed or actually being committed, and not against
past acts; that injunction is preventive in nature only; and that as the law has already been violated, the
remedy now available is for the prosecution of the employer for the violation of the Minimum Wage Law, and
not for the reinstatement of Pablo S. Afuang. It, therefore, dismissed the action
The only assignment of error is that the lower court erred in not ordering the respondent to reinstate Pablo S.
Afuang in the service. It is evident that the court a quo erred in considering that mandatory injunction is
preventive in nature, and may not be granted by the Court of First Instance once the act complained of has
been carried out. The action of the petitioner is not an action of injunction but one of mandamus, because it
seeks the performance of a legal duty, the reinstatement of Pablo S. Afuang.

In the case at bar, Pablo S. Afuang was entitled to continue in the service of respondent, because his act is
expressly provided to be no ground or reason for an employee's dismissal. Section 13 of Republic Act No. 602
states that "it shall be unlawful for any person to discharge or in any other manner to discriminate against
any employee because such employee has filed any complaint or instituted or caused to be instituted any
proceeding under or related to this Act, ...." Pablo S. Afuang was, therefore, unlawfully deprived of his right
or privilege to continue in the service of the respondent, because his dismissal was unlawful or illegal. Having
been deprived of such right or privilege, it is within the competence of courts to compel the respondent to
admit him back to his service.cha

Were we to hold that Afuang may not be reinstated because he has already been dismissed, there would not
be any remedy against the injustice done him, or for him to return to the position or employment from which
he was unlawfully discharged. This remedy (of ordering reinstatement) has been granted in parallel situations
by the Court of Industrial Relations with our approval, when laborers have been illegally separated by their
employers without legal or just cause. This remedy has also been granted in similar cases in the United
States, from which jurisdiction the Minimum Wage Law or Republic Act No. 602 has been taken.