GLOBE MACKAY CABLE AND RADIO CORPORATION v.

NLRC FACTS:

There was a disagreement on the computation of COLA between the Petitioner corporation and the respondent union. In computing said COLA, Petitioner Corporation multiplied the P 3.00 dail COLA b !! da s, which is the number of wor"ing da s in the compan . #espondent $nion disagreed with the computation of the monthl COLA claiming that the dail COLA rate of P3.00 should be multiplied b 30 da s to arri%e at the monthl COLA rate. The union alleged furthermore that prior to the effecti%it of &age Order, Petitioner Corporation had been computing and pa ing the monthl COLA on the basis of thirt '30( da s per month and that this constituted an emplo er practice, which should not be unilaterall withdrawn. $nion filed a complaint against Petitioner Corporation, for illegal deduction, underpa ment, unpaid allowances, and %iolation of &age Order )o. *. Petitioners &hite and +antiago were sought to be held personall liable for the mone claims thus demanded. Labor Arbiter Adelaido ,. -artine. sustained the position of Petitioner Corporation b holding that since the indi%idual petitioners acted in their corporate capacit the should not ha%e been impleaded/ and that the monthl COLA should be computed on the basis of twent two '!!( da s, since the e%idence showed that there are onl !! paid da s in a month for monthl 0 paid emplo ees in the compan . On appeal, the )L#C re%ersed the Labor Arbiter, as heretofore stated, and held that Petitioner Corporation was guilt of illegal deductions, upon the following considerations1 '2( that the P3.00 dail COLA under &age Order )o. * should be paid and computed on the basis of thirt '30( da s instead of twent 0two '!!( da s since wor"ers paid on a monthl basis are entitled to COLA on +aturda s, +unda s and legal holida s 3e%en if unwor"ed/3 '!( that the full allowance en4o ed b Petitioner Corporation5s monthl 0paid emplo ees before the C6A e7ecuted between the parties in 289! constituted %oluntar emplo er practice, which cannot be unilaterall withdrawn/ and '3( that petitioners &hite and +antiago were properl impleaded as respondents in the case below. ISSUE: &hether the )L#C erred in re%ersing the :ecision of Labor Arbiter. HELD: ;es. The primordial consideration, for entitlement to COLA is that basic wage is being paid. In other words, the pa ment of COLA is mandated onl for the da s that the emplo ees are paid their basic wage, e%en if said da s are unwor"ed. +o that, on the da s that emplo ees are not paid their basic wage, the pa ment of COLA is not mandated.

$nder the peculiar circumstances obtaining, therefore, where the compan obser%es a <0 da wor" wee", it will ha%e to be held that the COLA should be computed on the basis of twent two '!!( da s, which is the period during which the monthl 0paid emplo ees of Petitioner Corporation recei%e their basic wage. The C6A is the law between the parties and, if not acceptable, can be the sub4ect of future re0negotiation.

G.R. No. 74156 June 29, 1988 GLOBE MA !A" ABLE AND RADIO OR#ORA$ION, %REDERI ! &HI$E 'n( JESUS SAN$IAGO, petitioners, %s. NA$IONAL LABOR RELA$IONS OMMISSION, %%&)GLOBE MA !A" EM#LO"EES UNION 'n( EDA ON E# ION, respondents. Castillo, Laman, Tan & Pantaleon for petitioners. Edwin D. Dellaban for private respondents.

MELEN IO)HERRERA, J.: A special ci%il action for certiorari with a pra er for a Temporar #estraining Order to en4oin respondents from enforcing the :ecision of 20 -arch 289* of the )ational Labor #elations Commission ')L#C(, in )C# Case )o. 202*909< entitled 3,,&0=lobe -ac"a >mplo ees $nion, et al., %s. =lobe -ac"a Cable ? #adio Corporation, et al.,3 the dispositi%e portion of which reads1 &@>#>,O#>, premises considered, the appealed :ecision is as it is hereb +>T A+I:> and another one issued1 2. :eclaring respondents0appellees 'petitioners herein( guilt of illegal deductions of cost0of0li%ing allowance/ !. Ordering respondents0appellees to pa complainants0appellants their bac" allowances rec"oned from the time of illegal deduction/ and 3. Ordering respondents0appellees from further illegall deducting the allowances of complainants0appellants. +O O#:>#>:.

Presiding Commissioner of the )L#C, :iego P. Atien.a, concurred in the result, while Commissioner Cleto T. Aillaltu a dissented and %oted to affirm in toto the Labor Arbiter5s :ecision. On 28 -a 289*, we issued the Temporar #estraining Order en4oining respondents from enforcing the assailed :ecision. On ! +eptember 289B, we ga%e due course to the petition and reCuired the submittal of memoranda, b the parties, which has been complied with. The facts follow1 &age Order )o. *, which too" effect on 30 October 289D, increased the cost0of0li%ing allowance of non0agricultural wor"ers in the pri%ate sector. Petitioner corporation complied with the said &age Order b pa ing its monthl 0paid emplo ees the mandated P3.00 per da COLA. @owe%er, in computing said COLA, Petitioner Corporation multiplied the P 3.00 dail COLA b !! da s, which is the number of wor"ing da s in the compan . #espondent $nion disagreed with the computation of the monthl COLA claiming that the dail COLA rate of P3.00 should be multiplied b 30 da s to arri%e at the monthl COLA rate. The union alleged furthermore that prior to the effecti%it of &age Order )o. *, Petitioner Corporation had been computing and pa ing the monthl COLA on the basis of thirt '30( da s per month and that this constituted an emplo er practice, which should not be unilaterall withdrawn. After se%eral grie%ance proceedings pro%ed futile, the $nion filed a complaint against Petitioner Corporation, its President, ,. &hite, and Aice0President, E. +antiago, for illegal deduction, underpa ment, unpaid allowances, and %iolation of &age Order )o. *. Petitioners &hite and +antiago were sought to be held personall liable for the mone claims thus demanded. Labor Arbiter Adelaido ,. -artine. sustained the position of Petitioner Corporation b holding that since the indi%idual petitioners acted in their corporate capacit the should not ha%e been impleaded/ and that the monthl COLA should be computed on the basis of twent two '!!( da s, since the e%idence showed that there are onl !! paid da s in a month for monthl 0paid emplo ees in the compan . @is reasoning, inter alia, was as follows1 To compel the respondent compan to use 30 da s in a month to compute the allowance and retain !! da s for %acation and sic" lea%e, o%ertime pa and other benefits is inconsistent and palpabl un4ust. If 30 da s is used as di%isor, then it must be used for the computation of all benefits, not 4ust the allowance. 6ut this is not fair to complainants, not to mention that it will contra%ene the pro%ision of the parties5 C6A. On appeal, the )L#C re%ersed the Labor Arbiter, as heretofore stated, and held that Petitioner Corporation was guilt of illegal deductions, upon the following considerations1 '2( that the P3.00 dail COLA under &age Order )o. * should be paid and computed on the basis of thirt '30( da s instead of twent 0two '!!( da s since wor"ers paid on a monthl basis are entitled to COLA on +aturda s, +unda s and legal holida s 3e%en if unwor"ed/3 '!( that the full allowance

en4o ed b Petitioner Corporation5s monthl 0paid emplo ees before the C6A e7ecuted between the parties in 289! constituted %oluntar emplo er practice, which cannot be unilaterall withdrawn/ and '3( that petitioners &hite and +antiago were properl impleaded as respondents in the case below. @ence, this Petition, anchored on the charge of gra%e abuse of discretion b the )L#C. &e are constrained to re%erse the re%ersal. +ection < of the #ules Implementing &age Orders )os. !, 3, < and * uniforml read as follows1 +ection <. Allowance for $nwor"ed :a s. All co%ered emplo ees shall be entitled to their dail li%ing allowance during the days that they are paid their basic wage, even if unwor ed. '>mphasis supplied( The primordial consideration, therefore, for entitlement to COLA is that basic wage is being paid. In other words, the pa ment of COLA is mandated onl for the da s that the emplo ees are paid their basic wage, e%en if said da s are unwor"ed. +o that, on the da s that emplo ees are not paid their basic wage, the pa ment of COLA is not mandated. As held in !niversity of Pangasinan "aculty !nion vs. !niversity of Pangasinan, L0*32!!, ,ebruar !0, 289D, 2!B +C#A *82(1 ... it is e%ident that the intention of the law is to grant >COLA upon the pa ment of basic wages. @ence, we ha%e the principle of 5)o Pa , )o >COLA. Applied to monthl 0paid emplo ees if their monthl salar co%ers all the da s in a month, the are deemed paid their basic wages for all those da s and the should be entitled to their COLA on those da s 3e%en if unwor"ed,3 as the )L#C had opined. Peculiar to this case, howe%er, is the circumstance that pursuant to the Collecti%e 6argaining Agreement 'C6A( between Petitioner Corporation and #espondent $nion, the monthl basic pa is computed on the basis of fi%e '<( da s a wee", or twent two '!!( da s a month. Thus, the pertinent pro%isions of that Agreement read1 Art. FA'a(G>ight net wor"ing hours shall constitute the regular wor" da for fi%e da s. Art. FA'b(G,ort net hours of wor", < wor"ing da s, shall constitute the regular wor" wee". Art. FAI, +ec. 2'b(GAll o%ertime wor"ed in e7cess of eight net hours dail or in e7cess of < da s wee"l shall be computed on hourl basis at the rate of time and one half. The Labor Arbiter also found that in determining the hourl rate of monthl paid emplo ees for purposes of computing o%ertime pa , the monthl wage is di%ided b the number of actual wor"

da s in a month and then, b eight '9( wor"ing hours. If a monthl 0paid emplo ee renders o%ertime wor", he is paid his basic salar rate plus one0half thereof. ,or e7ample, after e7amining the specimen pa roll of emplo ee Eesus L. +antos, the Labor Arbiter found1 the emplo ee Eesus L. +antos, who wor"ed on +aturda and +unda was paid base pa plus <0H premium. This is o%er and abo%e his monthl basic pa as supported b the fact that base pa was paid. If the *th and Bth da s of the wee" are deemed paid e%en if unwor"ed and included in the monthl salar , +antos should not ha%e been paid his base pa for +aturda and +unda but should ha%e recei%ed onl the <0H o%ertime premium. +imilarl , the specimen pa rolls of emplo ees, :ennis :ungon and #ene +an%ictores, showed that in computing the %acation and sic" lea%es of the emplo ees, Petitioner Corporation consistentl used twent 0two '!!( da s. $nder the peculiar circumstances obtaining, therefore, where the compan obser%es a <0da wor" wee", it will ha%e to be held that the COLA should be computed on the basis of twent two '!!( da s, which is the period during which the monthl 0paid emplo ees of Petitioner Corporation recei%e their basic wage. The C6A is the law between the parties and, if not acceptable, can be the sub4ect of future re0negotiation. !( Pa ment in full b Petitioner Corporation of the COLA before the e7ecution of the C6A in 289! and in compliance with &age Orders )os. 2 '!* -arch 2892( to < '22 Eune 289D(, should not be construed as constituti%e of %oluntar emplo er practice, which cannot now be unilaterall withdrawn b petitioner. To be considered as such, it should ha%e been practiced o%er a long period of time, and must be shown to ha%e been consistent and deliberate. AdeCuate proof is wanting in this respect. The test of long practice has been enunciated thus1 ... #espondent Compan agreed to continue gi%ing holida pa nowing fully well that said emplo ees are not co%ered b the law reCuiring pa ment of holida pa .5 'Oceanic Pharmacal >mplo ees $nion I,,&J %s. Inciong, L0<0<*9, )o%ember B, 28B8, 8D +C#A !B0(. '>mphasis ours( -oreo%er, before &age Order )o. D, there was lac" of administrati%e guidelines for the implementation of the &age Orders. It was onl when the #ules Implementing &age Order )o. D were issued on !2 -a 289D that a formula for the con%ersion of the dail allowance to its monthl eCui%alent was laid down, thus1 +ection 3. Application of +ection !00 777 777 777 'a( #onthly rates for non0agricultural wor"ers co%ered $nder P:s 2*2D, 2*3D, 2*B9 and 2B231 777 777 777

'3( ,or wor"ers who do not wor" and are not considered paid on +aturda s and +unda s1 P*0 K P80 K P*0 K 'P!.00 7 !*!( di%ided b 2! L P !<3.B0 '>mphasis ours( As the Labor Arbiter had anal .ed said formula1 $nder the aforecited formulaMguideline, issued for the first time, when applied to a compan li"e respondent which obser%es a <0da wor" wee" 'or where ! da s in a wee", not necessaril +aturda and +unda , are not considered paid(, the monthl eCui%alent of a dail allowance is arri%ed at b multipl ing the dail allowance b !*! di%ided b 2!. This formula results in the eCui%alent of !2.9 da s in a month. Absent clear administrati%e guidelines, Petitioner Corporation cannot be faulted for erroneous application of the law. Pa ment ma be said to ha%e been made b reason of a mista"e in the construction or application of a 3doubtful or difficult Cuestion of law.3 'Article !2<<, 1 in relation to Article !2<D 2 of the Ci%il Code(. +ince it is a past error that is being corrected, no %ested right ma be said to ha%e arisen nor an diminution of benefit under Article 200 of the Labor Code * ma be said to ha%e resulted b %irtue of the correction. &ith the conclusions thus reached, there is no further need to discuss the liabilit of the officers of Petitioner Corporation. &@>#>,O#>, certiorari is granted, the :ecision of the )ational Labor #elations Commission, dated 20 -arch 289*, is +>T A+I:>, and the :ecision of the Labor Arbiter, dated 8 -a 289<, is hereb #>I)+TAT>:. The Temporar #estraining Order heretofore issued is hereb made permanent. +O O#:>#>:. $ap, C.%., Paras, and &armiento, %%., concur. Padilla, %., too no part.