SUPREME STEEL v.

NAGKAKAISANG MANGGAGAWA

On July 27, 2005, respondent filed a notice of strike with the National Conciliation and Mediation Board (NCMB) on
the ground that petitioner violated certain provisions of the CBA. The parties failed to settle their dispute.
Consequently, the Secretary of Labor certified the case to the NLRC for compulsory arbitration pursuant to Article
263(g) of the Labor Code.

Respondent alleged eleven CBA violations, enumerated as follows: (1) denial to four employees of the CBA-provided
wage increase, (2) contracting-out labor, (3) failure to provide shuttle service, (4) refusal to answer for medical
expenses incurred by three employees, (5) failure to comply with time-off provision, (6) visitors free access to
company premises, (7) failure to comply with reporting time-off provision, (8) dismissal of an employee supposedly
due to disease, (9) denial of paternity leave benefit to two employees, (10) discrimination and harassment, and (11)
non-implementation of COLA in Wage Order Nos. RBIII-10 and 11.

Out of the eleven issues raised by respondent, eight were decided in its favor; two (denial of paternity leave benefit
and discrimination of union members) were decided in favor of petitioner; while the issue on visitors free access to
company premises was deemed settled during the mandatory conference. Petitioners appeal to the CA was dismissed.

According to the CA, petitioner failed to show that the NLRC committed grave abuse of discretion in finding that it
violated certain provisions of the CBA. With regard to wage increase, The CA concluded that, based on the wording
of the CBA, which uses the words "general increase" and "over and above," it cannot be said that the parties have
intended the anniversary increase to be given in lieu of the CBA wage increase. The CA declared that the withdrawal
of the COLA under Wage Order No. RBIII-10 from the employees who were not minimum wage earners amounted
to a diminution of benefits because such grant has already ripened into a company practice. Based on the principle of
liberal construction of the CBA, the CA likewise sustained the NLRCs rulings on the issues pertaining to medical
expenses, the shuttle service, time-off for attendance in grievance meetings/hearings, and time-off due to brownouts.
Finally, the CA affirmed the NLRCs finding that Madayags dismissal was illegal. It emphasized that the burden to
prove that the employees disease is of such nature or at such stage that it cannot be cured within a period of six
months rests on the employer, who failed to prove such.

ISSUE
Did the CA err in affirming the NLRC?

HELD

It is a familiar and fundamental doctrine in labor law that the CBA is the law between the parties and compliance
therewith is mandated by the express policy of the law. If the terms of a CBA are clear and there is no doubt as to the
intention of the contracting parties, the literal meaning of its stipulation shall prevail. Moreover, the CBA must be
construed liberally rather than narrowly and technically and the Court must place a practical and realistic
construction upon it. Any doubt in the interpretation of any law or provision affecting labor should be resolved in
favor of labor. Upon these well-established precepts, the CAs findings and conclusions on all the issues are sustained,
except the issue pertaining to the denial of the COLA under Wage Order No. RBIII-10 and 11 to the employees who
are not minimum wage earners, which respondent avers as a 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 of time;

(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.

The implementation of the COLA under Wage Order No. RBIII-10 across the board, which only lasted for less than a
year, cannot be considered as having been practiced "over a long period of time." While it is true that jurisprudence
has not laid down any rule requiring a specific minimum number of years in order for a practice to be considered as
a voluntary act of the employer, under existing jurisprudence on this matter, an act carried out within less than a year
would certainly not qualify as such. Hence, the withdrawal of the COLA Wage Order No. RBIII-10 from the salaries
of non-minimum wage earners did not amount to a "diminution of benefits" under the law.

PARTIALLY GRANTED
 LUZON STEVEDORING v. LUZON MARINE DEPARTMENT UNION

Luzon Marine Department Union filed a petition with the Court of Industrial Relations against petitioner Luzon
Stevedoring Co., Inc for full recognition of the right of COLLECTIVE bargaining, close shop and check off.

One of those claims was that the work performed in excess of eight (8) hours he paid an overtime pay of 50 per
cent the regular rate of pay, and that work performed on Sundays and legal holidays be paid double the regular
rate of pay.

TRIAL COURT: Petitioner gave said employees 3 free meals every day and about 20 minutes rest after each
mealtime; that they worked from 6:00 am. to 6:00 p.m. every day including Sundays and holidays, and for work
performed in excess of 8 hours, the officers, patrons and radio operators were given overtime pay in the amount
of P4 each and P2 each for the rest of the crew up to March, 1947, and after said date, these payments were
increased to P5 and P2.50, respectively, until the time of their separation or the strike of July 19, 1948; that when
the tugboats underwent repairs, their personnel worked only 8 hours a day excluding Sundays and holidays;
that although there was an effort on the part of claimants to show that some had worked beyond 6:00 p.m., the
evidence was uncertain and indefinite and that demand was, therefore, denied; that respondent Company, by
the nature of its business and as defined by law is considered a public service operator by the Public Service
Commission, and, therefore, exempt from paying additional remuneration or compensation for work performed
on Sundays and legal holidays.

CIR: Ruled that the 20 minutes rest given the claimants after mealtime should not be deducted from the 4 hours
of overtime worked performed by said claimants

The company though insists that the rules on the 8 hours work of land based jobs should be different from their
seamen counterparts.

ISSUE

WON the rest periods given to the claimants (after each meal) should be deducted from their overtime pay.

HELD: NO.

The SC finds no reason to set for seamen a criterion different from that applied to laborers on land.

Section 1 of Commonwealth Act No. 444, known as the Eight-Hour Labor Law, provides:

SEC. 1. The legal working day for any person employed by another shall be of not more than eight hours
daily. When the work is not continuous, the time during which the laborer is not working AND CAN
LEAVE HIS WORKING PLACE and can rest completely, shall not be counted.

The only thing to be done is to determine the meaning and scope of the term working place used therein. As
understood, a laborer need not leave the premises of the factory, shop or boat in order that his period of rest
shall not be counted, it being enough that he cease to work, may rest completely and leave or may leave at his
will the spot where he actually stays while working, to go somewhere else, whether within or outside the
premises of said factory, shop or boat. If these requisites are complied with, the period of such rest shall not be
counted.

In the case at bar We do not need to look into the nature of the work of claimant mariners to ascertain the truth
of petitioners allegation that this kind of seamen have had enough free time, a task of which we are relieved,
for although after an ocular inspection of the working premises of the seamen affected in this case, the TRIAL
COURT declared in his decision that the Company gave the complaining laborers 3 free meals a day with a
recess of 20 minutes after each meal, this decision was specifically amended by the CIR, wherein it held that the
claimants herein rendered services to the Company from 6:00 a.m. to 6:00 p.m. including Sundays and holidays,
which implies either that said laborers were not given any recess at all, or that they were not allowed to leave
the spot of their working place, or that they could not rest completely. And such resolution being on a question
essentially of fact, this Court is now precluded to review the same.

the resolutions of the Court of Industrial Relations appealed from are hereby affirmed.
 AKLAN ELECTRIC COOPERATIVE v. NLRC

These are consolidated cases/claims for non-payment of salaries and wages, 13th month pay, ECOLA and other
fringe benefits as rice, medical and clothing allowances, submitted by complainant Rodolfo M. Retiso and 165
others against respondent Aklan Electric Cooperative, Inc. (AKELCO).

On January 22, 1992, by way of resolution, the Board of Directors of AKELCO allowed the temporary transfer
holding of office at Amon Theater, Kalibo, Aklan and that their head office was closed. Nevertheless, majority
of the employees including herein complainants continued to report for work at Lezo, Aklan and were paid of
their salaries. On February 11, 1992, unnumbered resolution was passed by the Board of AKELCO withdrawing
the temporary designation of office at Kalibo, Aklan, and that the daily operations must be held again at the
main office of Lezo, Aklan.

Complainants who were then reporting at the Lezo office from January 1992 up to May 1992 were duly paid of
their salaries, while in the meantime some of the employees through the instigation of respondent Mationg
continued to remain and work at Kalibo, Aklan. However, from June 1992 up to March 18, 1993, complainants
who continuously reported for work at Lezo, Aklan in compliance with the aforementioned resolution were not
paid their salaries.

The Labor Arbiter dismissed the complaints, which was reversed by the NLRC and held that the private
respondents are entitled to their unpaid wages.

ISSUE

Whether or not private respondents are entitled for unpaid wages.

HELD

Private respondents are not entitled for unpaid wages. The Supreme Court held that NLRC committed grave
abuse of discretion amounting to excess or want of jurisdiction when it reversed the findings of the Labor Arbiter
that private respondents refused to work under the lawful orders of the petitioner AKELCO management; hence
they are covered by the "no work, no pay" principle and are thus not entitled to the claim for unpaid wages from
June 16, 1992 to March 18, 1993.

The Supreme Court affirmed the LAs finding that the complainants were requested to report to work at the
Kalibo office but despite these lawful orders of the General Manager, the complainants did not follow such
order. The Board of Directors passed a Resolution resisting and denying the claims of these complainants, under
the principle of "no work no pay" which is legally justified. These complainants have "mass leave" from their
customary work on June 1992 up to March 18, 1993 and had a "sit-down" stance for these periods of time in their
alleged protest of the appointment of respondent Atty. Leovigildo Mationg as the new General Manager of the
AKELCO.

The age-old rule governing the relation between labor and capital, or management and employee of a "fair days
wage for a fair days labor" remains as the basic factor in determining employees wages. If there is no work
performed by the employee there can be no wage or pay unless, of course, the laborer was able, willing and
ready to work but was illegally locked out, suspended or dismissed, or otherwise illegally prevented from
working, a situation which is not present in the instant case. It would neither be fair nor just to allow private
respondents to recover something they have not earned and could not have earned because they did not render
services at the Kalibo office during the stated period.

Hence, the Supreme Court reversed NLRCs decision, and affirmed the Labor Arbiters decision.
 ARICA v. NLRC

Teofilo Arica and 577 others sued Standard Fruits Corporation (STANFILCO) Philippines for allegedly
not paying the workers for their assembly time which takes place every work day from 5:30am to 6am.
The assembly time consists of the roll call of the workers; their getting of assignments from the foreman;
their filling out of the Laborers Daily Accomplishment Report; their getting of tools and equipment
from the stockroom; and their going to the field to work. The workers alleged that this is necessarily
and primarily for STANFILCOs benefit.

LA: The 30-minute assembly time long practiced cannot be considered waiting time or work time and,
therefore, not compensable,

ISSUE

Whether the 30-minute activity of the petitioners before the scheduled working time is compensable
under the Labor Code.

HELD

No.

The 30-minute assembly time, long practiced and institutionalized by mutual consent of the parties
under Article IV, Section 3, of the Collective Bargaining Agreement cannot be considered as waiting
time within the purview of Section 5, Rule I, Book III of the Rules and Regulations Implementing the
Labor Code.

Furthermore, 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. 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 petition is DISMISSED for lack of merit and the decision of the National Labor Relations
Commission is AFFIRMED.
 RADA v. NLRC

In 1977, Hilario Rada was contracted by Philnor Consultants and Planners, Inc as a driver. He was assigned to a
specific project in Manila. The contract he signed was for 2.3 years. His task was to drive employees to the project
from 7am to 4pm. He was allowed to bring home the company vehicle in order to provide a timely transportation
service to the other project workers. The project he was assigned to was not completed as scheduled hence, since
he has a satisfactory record, he was re-contracted for an additional 10 months. After 10 months, the project was
not yet completed. Several contracts thereafter were made until the project was finished in 1985.

At the completion of the project, Rada was terminated as his employment was coterminous with the project. He
later sued Philnor for non-payment of separation pay and overtime pay. He said he is entitled to be paid OT pay
because he uses extra time to get to the project site from his home and from the project site to his home every
day in total, he spends an average of 3 hours OT every day.

ISSUE: Whether or not Rada is entitled to separation pay and OT pay.

HELD:

Separation pay NO.

Overtime pay Yes.

Separation Pay

The SC ruled that Rada was a project employee whose work was coterminous with the project for which he was
hired. Project employees, as distinguished from regular or non-project employees, are mentioned in Section 281
of the Labor Code as those where the 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.

Project employees are not entitled to termination pay if they are terminated as a result of the completion of the
project or any phase thereof in which they are employed, regardless of the number of projects in which they
have been employed by a particular construction company. Moreover, the company is not required to obtain
clearance from the Secretary of Labor in connection with such termination.

OT Pay

Rada is entitled to OT pay. The fact that he picks up employees of Philnor at certain specified points along EDSA
in going to the project site and drops them off at the same points on his way back from the field office going
home to Marikina, Metro Manila is not merely incidental to Radas job as a driver. On the contrary, said
transportation arrangement had been adopted, not so much for the convenience of the employees, but primarily
for the benefit of Philnor. As embodied in Philnors memorandum, they allowed their drivers to bring home
their transport vehicles in order for them to provide a timely transport service and to avoid delay not really so
that the drivers could enjoy the benefits of the company vehicles nor for them to save on fair.
 SHELL COMPANY v. NLU

National Labor Union instituted this action to ask for 50% additional compensation for the employees of Shell Company
who work at night to attend to the foreign planes landing and taking off (at night), to supply petrol and lubricants, and
perform other duties. Court of Industrial Relations held ordered The Shell Company to pay its workers working at night,
an additional compensation of 50% over their regular salaries by working during daytime.

Shell argues that there is no legal provision empowering CIR to order payment of additional compensation to workers who
work at night, and that Act No. 444 relieved the employer of such obligation as it is provided in the Act where it made
compulsory the overtime (additional compensation) pay for work rendered beyond 8 hours, and such cases do not
include the work at night.

NLU argues decision of the CIR is part of its broad and effective powers as granted by Commonwealth Act No. 103 - the
charter of the Industrial Relations Court, and that Act No. 444 has no application to this case because it is referring only to
particular and the maximum working day permitted in industrial establishments - the 8-hour day.

ISSUES/HELD
1. WON CIR has the authority to order payment of additional compensation to workers who work at night? (YES)
2. WON those who work at night are entitled to 50% additional compensation? (YES)

(1) Articles 1, 4 and 13 of Commonwealth Act No. 103:

It is evident from the Com Act. No. 103: SECTION 1. (a) that when a dispute arises between the principal and the employee
or worker on the question of wages, CIR has jurisdiction throughout the Philippines to consider, investigate and resolve
the dispute, setting the wages they deem fair and reasonable.

SEC. 4. (b) that for the purposes of prevention, arbitration, decision and arrangement, CIR also has jurisdiction over any
dispute - industry and agriculture - resulting from any differences in wages, compensation or participation, working hours,
conditions of employment or tenancy between the employers and employees or between workers and owners and the
landowners or farm workers subject to the fulfillment of certain requirements and conditions when it sees that the dispute
could cause results or a strike,

SEC. 13. (c) that in exercising its powers specified above, the Court Industrial Relations is not limited, to decide the dispute,
to grant the remedy or remedies requested by the parties to the dispute, but may include in any order or decision or
determination relating to the purpose of settling the dispute or to prevent further agricultural or industrial disputes.

Shells Arguments: The power of CIR to fix wages is subject to restrictions of law. Com. Act No. 444 expressly specified
those items where payment of extra compensation is authorized:

(a) for "overtime" or work in excess of regular hours for emergency imposed during any disaster or accident, or to
avoid loss or repair, (b) for work on Sundays and holidays, (c) in case of emergency,

There is nothing that relates to the work done at night, then the order in question is illegal because not authorized by
law (expressio unius est exclusio alterius).

The argument of Shell is mistaken. Law No. 444 does not apply to this case, it is evident that it has a specific objective,
namely: (a) set at 8 hours the maximum working day, (b) at some exceptional cases employees could be allowed Work off
the day, (c) provide increment, which must be not less than 25% of regular salary for the "overtime" or work in excess of 8
hours.

The work required by Shell is not covered by the overtime of Com Act. 444 since the work which is the subject of controversy
in this case is not overtime but a full day of work for 8 hours, done at night or in night shift.

Hence, if CIR has the authority to fix wages for the work done during the day, it also has the authority to fix wages done at
night. (Work Day- 24-hr period commencing from the time an employee regularly starts to work regardless of whether the
work is broken or continuous. It may not coincide with a calendar day. -Beda Reviewer)

(2) SC discussed a lot of issues about the pernicious effect of working at night justifying the award of additional 50% to the
compensation of affected workers, affirming the decision of CIR. Conclusion of SC

The case against nightwork, then, may be said to rest upon several grounds. In the first place, there are the remotely
injurious effects of permanent nightwork manifested in the later years of the worker's life. Of more immediate importance
to the average worker is the disarrangement of his social life, including the recreational activities of his leisure hours and
the ordinary associations of normal family relations. From an economic point of view, nightwork is to be discouraged
because of its adverse effect upon efficiency and output. A moral argument against nightwork in the case of women is that
the night shift forces the workers to go to and from the factory in darkness. Recent experiences of industrial nations have
added much to the evidence against the continuation of nightwork, except in extraordinary circumstances and unavoidable
emergencies. The immediate prohibition of nightwork for all laborers is hardly practicable; its discontinuance in the case of
women employees is unquestionably desirable. 'The night was made for rest and sleep and not for work' is a common
saying among wage-earning people, and many of them dream of an industrial order in which there will be no night shift.
(Labor Problems, 3rd Edition, pp. 325-328, by Watkins & Dodd.).
 SLL INTL CABLES SPECIALIST and SONNY LAGON v. NLRC

Private Respondents Roldan Lopez, Danilo Caete and Edgardo Zuiga were hired by petitioner Lagon as
apprentice or trainee cable/lineman and were paid the full minimum wage and other benefits. They did not
report to work regularly, since they are trainees, but came in as substitutes for other regular workers.

After training, they were engaged as project employees in 3 consecutive projects (Bohol, Antipolo Bulacan) and
were terminated after completion of each project. They received full minimum wage in each of those projects.

Private respondents for the 4th time worked with Lagons project in Caloocan City with Furukawa Corporation
as the general contractor. This time, they received below the minimum wage prescribed in the area.

For reasons of delay on the delivery of imported materials from Furukawa Corporation, the Camarin project
was not completed on the scheduled date. Faced with economic problems, Lagon was constrained to cut down
the overtime work of its workers. Thus, when private respondents requested to work overtime, Lagon refused
and told them that if they insist, they would have to go home at their own expense. This prompted private
respondents to leave their work and went home to file a complaint for illegal dismissal, non-payment of wages,
holiday pay, 13th month pay and service incentive leave pay as well as damages and attorneys fees.

Petitioners admitted private respondents employment but claimed that the latter were only project employees
for their services were merely engaged for a specific project or undertaking and the same were covered by
contracts duly signed by private respondents. They alleged that food allowance, lodging house, transportation,
electricity, water and snacks allowance were provided thus, should be added to their basic pay. And also, since
the workplaces of private respondents were all in Manila, the complaint should be filed there. Thus, petitioners
prayed for the dismissal of the complaint for lack of jurisdiction and utter lack of merit.

The LA claimed that his office had jurisdiction under RULE 4 SEC 1 of the NLRC RULES because the
"workplace," as defined in the said rule, included the place where the employee was supposed to report back
after a temporary detail, assignment or travel, which in this case was Cebu. As to the status of their employment,
the LA opined that private respondents were regular employees because they were repeatedly hired by
petitioners and they performed activities which were usual, necessary and desirable in the business or trade of
the employer.

LA found that private respondents were underpaid. It ruled that the free board and lodging, electricity, water,
and food enjoyed by them could not be included in the computation of their wages because these were given
without their written consent. However, petitioners were not liable for illegal dismissal. The LA viewed private
respondents act of going home as an act of indifference when petitioners decided to prohibit overtime work.

The NLRC affirmed the LAs decision. It noted that no single report of project completion was filed with the
PUBLIC EMPLOYMENT office as required by DOLE.

The CA affirmed both the LAs and NLRCs decisions and considered that petitioners failure to comply with the
simple but compulsory requirement to submit a report of termination to the nearest Public Employment Office
every time private respondents employment was terminated was proof that the latter were not project
employees but regular employees.

ISSUES

(1) Whether private respondents are entitled to minimum wage.

(2) Whether the free board and lodging, electricity, water, and food enjoyed by the employees be included
in the computation of the wages.

HELD

(1) The Court noted that the petition generally involves factual issues decided by the lower courts which the
Court cannot entertain. Settled is the rule that factual findings of labor officials, who are deemed experts in
matters within their jurisdiction, are generally accorded not only respect but even finality, and bind the Court
when supported by substantial evidence. It is not the Courts function to assess and evaluate the evidence all
over again, particularly where the findings of both the Labor tribunals and the CA concur. Thus, it cannot decide
on the issue of whether the employees are project or regular employees, and must affirm the ruling that they are
regular employees. In any case, project employees are entitled to the minimum wage, since they are not among
the exclusions enumerated in the Labor Code Implementing Rules.
(2) On the issue of whether the facilities should be included as wages.

Before the value of facilities can be deducted from the employees wages, the following requisites must all be
attendant: first, proof must be shown that such facilities are customarily furnished by the trade; second, the
provision of deductible facilities must be voluntarily accepted in writing by the employee; and finally, facilities
must be charged at reasonable value. Mere availment is not sufficient to allow deductions from employees
wages.

These requirements, however, have not been met in this case. SLL failed to present any company policy or
guideline showing that provisions for meals and lodging were part of the employees salaries. It also failed to
provide proof of the employees written authorization, much less show how they arrived at their valuations. At
any rate, it is not even clear whether private respondents actually enjoyed said facilities.

The Court made a distinction between "facilities" and "supplements." It is of the view that the food and lodging,
or the electricity and water allegedly consumed by private respondents in this case were not facilities but
supplements. In the case of Atok-Big Wedge Assn. v. Atok-Big Wedge Co., the two terms were distinguished
from one another in this wise:

"Supplements," therefore, constitute extra remuneration or special privileges or benefits given to or

received by the laborers over and above their ordinary earnings or wages. "Facilities," on the other hand,
are items of expense necessary for the laborer's and his family's existence and subsistence so that by express
provision of law (Sec. 2[g]), they form part of the wage

In short, the benefit or privilege given to the employee which constitutes an extra remuneration above and over
his basic or ordinary earning or wage is supplement; and when said benefit or privilege is part of the laborers'
basic wages, it is a facility. The distinction lies not so much in the kind of benefit or item (food, lodging, bonus
or sick leave) given, but in the purpose for which it is given.

In the case at bench, the items provided were given freely by SLL for the purpose of maintaining the efficiency
and health of its workers while they were working at their respective projects.

Petition is DENIED
 STATE MARINE CORPORATION v. CEBU SEAMENS ASSOCIATION

Petitioners States Marine Corporation and Royal Line were engaged in the business of marine
coastwise transportation. They had a CBA with the Cebu Seamens Association. On September 12, 1952,
the respondent union filed a complaint against the petitioners alleging that the officers and men
working on board the petitioners vessels have not been paid their sick leave, vacation leave and
overtime pay; that the petitioners threatened or coerced them to accept the reduction of salaries,
observed by other shipowners; that after the Minimum Wage Law had taken effect, the petitioners
required their employees on board their vessels, to pay the sum of P0.40 for every meal, while the
masters and officers were not required to pay their meals and that because the Captain had refused to
yield to the general reduction of salaries, the petitioners dismissed said captain who now claims for
reinstatement and the payment of back wages.

The petitioner, on their defense, stated that they have suffered financial losses in the operation of their
vessels and there is no law which provides for the payment of sick leave or vacation leave to employees
of private firms; that with regards to their overtime pay, they have always observed the Eight-hour
labor Law and that overtime does not apply to those who provide means of transportation; that salaries
were paid, depending upon the margin of profits they could realize and other factors or circumstances
of the business.

A decision was rendered in favor of the respondent union. The motion for reconsideration was denied.

ISSUE

Whether the required meals which the petitioner company deducted from the salary of the employees
is considered as facilities or supplements.

HELD

Supplements constitute extra remuneration or special privileges or benefits given to or received by the
laborers over and above their ordinary earnings or wages.

Facilities, on the other hand, are items of expense necessary for the laborers and his familys existence
and subsistence so that by express provisions of law, they form part of the wage and when furnished
by the employer are deductible therefrom, since if they are not so furnished, the laborer would spend
and pay them just the same.

It is argued that the food or meal given to the deck officers, marine engineers and unlicensed crew
members in question, were mere facilities which should be deducted from wages, and not supplements
which, according to Section 19 of the Minimum Wage Law, should not be deducted from such wages.

It was found out that the meals were freely given to crew members prior to the effectivity of the
Minimum Wage Law while they were on the high seas not as part of their wages but as a necessary
matter in the maintenance of the health and efficiency of the crew members during the voyage. The
deductions therein made for the meals given should be returned to them, and the operator of the
coastwise vessels should continue giving the benefits.

Petition is dismissed.
Petitioners numbering 116 occupied different positions 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 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,
they lodged a complaint for separation pay differentials.

The allowances in question pertained to the following

(1) Staff/Managers Allowance

Respondent PICOP provides free housing facilities to supervisory and managerial employees assigned in Bislig.
The privilege includes free water and electric consumption.

(2) Transportation Allowance

The company grants transportation allowance to key officers and Managers assigned in the mill site who use their
own vehicles in the performance of their duties.

(3) Bislig Allowance

The Bislig Allowance is given to Division Managers and corporate officers assigned in Bislig on account of the
hostile environment prevailing therein.

Applying Art. 97, par (f) of the Labor Code which defines 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 latters wage.

However, the NLRC decreed that the allowances did not form part of the salary base used in computing
separation pay since the same were contingency-based.

Specifically, wage is defined in letter (f) as the remuneration or earnings, however designated, capable of being
expressed in terms of money, whether fixed or ascertained on a time, task, piece, or commission basis, or other
method of calculating the same, which is payable by an employer to an employee under a written or unwritten
contract of employment for work done or to be done, or for services rendered or to be rendered and includes the
fair and reasonable value, as determined by the Secretary of Labor, of board, lodging, or other facilities
customarily furnished by the employer to the employee.

We invite attention to the above-underlined clause. Stated differently, when an employer customarily furnishes
his employee board, lodging or other facilities, the fair and reasonable value thereof, as determined by the
Secretary of Labor and Employment, is included in wage.

In order to ascertain whether the subject allowances form part of petitioners wages, we divide the discussion
on the following customarily furnished; board, lodging or other facilities; and, fair reasonable value as
determined by the Secretary of Labor.

customarily furnished

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. We agree with the observation of the OSG that the subject
allowances were temporarily, not regularly, received by petitioners because

board, lodging or other facilities

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 employers business. The
Staff/Managers 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/Managers allowance
for PICOPs benefit and convenience, i.e., to ensure that petitioners render quality performance. In determining
whether a privilege is a facility, the criterion is not so much its kind but its purpose.

fair reasonable value as determined by the Secretary of Labor.

The Secretary of Labor and Employment under Sec. 6, Rule VII, Book III, of the Rules Implementing the Labor
Code may from time to time fix in appropriate issuances the fair and reasonable value of board, lodging and
other facilities customarily furnished by an employer to his employees. Petitioners allowances do not represent
such fair and reasonable value as determined by the proper authority simply because the Staff/Managers
allowance and transportation allowance were amounts given by respondent company in lieu of actual
provisions for housing and transportation needs whereas the Bislig allowance was given in consideration of
being assigned to the hostile environment then prevailing in Bislig.