Songco Vs NLRC

 

Frances Claire R. Caceres Labor I - Block A

Case No. 13

SONGCO, ET. AL. vs. NLRC G.R. No. 50999-51000 March 23, 1990

FACTS: Zuelig filed an application for clearance to terminate the services of Songco, and others, on the ground of retrenchment due to financial losses. The parties have agreed to resolve the the  basis of the separation pay during the hearing. It was stated in the Collective Bargaining Agreement between Zuelig and the union of Songco, et. al. that “any “any employee who is separated from employment due to old age, sickness, death or permanent lay-off, not due to the fault of said employee, shall receive from the company a retirement gratuity in an amount equivalent to one (1) month's salary per year of service." On decision by the Labor Arbiter, Zuelig was ordered to pay the separation pay of Songco, et. al. equivalent to one month salary, exclusive of commissions, allowances, etc. for every year of service with the company. compan y. This decision was later sustained by the NLRC. ISSUE: Should the earned sales commissions and allowance be included in the monthly salary of Songco for the purpose of computing their separation pay?

RULING: Yes. Even if the commissions were in the form of incentives or encouragement for the salesmen to be more inspired to work, these commissions are direct remunerations for services rendered which contributed to the increase of income of the employee. The nature of the work of a salesman and the reason for such type of remuneration for services rendered demonstrate that commissions are part of Songco, et. al’s wage or salary.  salary.  If the opposite view is to be adopted, then in effect it will be saying that this kind of salesmen do not receive any salary and, therefore, not entitled to separation pay in the event of discharge from employment. This interpretation is not in accordance with the liberal spirit of labor laws, which is to alleviate the difficulties faced by a dismissed employee.