GR 107994; (August, 1995) (Digest)
G.R. No. 107994 August 14, 1995
PHILIPPINE AGRICULTURAL COMMERCIAL AND INDUSTRIAL WORKERS UNION (PACIWU)-TUCP, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION AND VALLACAR TRANSIT, INC., respondents.
FACTS
Petitioner PACIWU-TUCP, the exclusive bargaining agent for the rank-and-file employees of respondent Vallacar Transit, Inc., filed a complaint for payment of 13th month pay on behalf of the company’s bus drivers and conductors. The union argued that while the Collective Bargaining Agreement (CBA) described their compensation as “purely commission,” these employees were guaranteed the statutory minimum wage if their commissions fell short of it for an eight-hour workday. Respondent company resisted the claim, citing an exempting provision in the Revised Guidelines on the Implementation of the Thirteenth Month Pay Law for those paid on a purely commission basis, and a specific CBA clause stating such employees were not legally entitled to 13th month pay. The Labor Arbiter and the National Labor Relations Commission (NLRC) both dismissed the complaint, prompting this petition.
ISSUE
Whether bus drivers and conductors who are paid on a commission basis, but with a guaranteed statutory minimum wage, are entitled to 13th month pay.
RULING
Yes, the drivers and conductors are entitled to 13th month pay. The legal logic proceeds from the fundamental purpose and mandatory coverage of Presidential Decree No. 851, the 13th Month Pay Law, as expanded by Memorandum Order No. 28. The law requires all employers to pay their rank-and-file employees this benefit. The implementing rules, specifically MOLE Explanatory Bulletin No. 86-12, explicitly state that employees paid a fixed or guaranteed wage plus commission are entitled to the 13th month pay based on their total annual earnings.
The Court rejected the company’s reliance on the “purely commission” label in the CBA and guidelines. What controls is the substantive nature of the remuneration, not its contractual designation. Since the drivers and conductors receive a guaranteed minimum wage—a fixed or guaranteed component—whenever their commissions are insufficient, they do not fall under the exemption for those paid on a “purely commission” basis. Their commissions are integrated into their wage structure as compensation for services rendered. To allow an employer to circumvent the law by a mere label in a CBA would defeat the social justice objective of the 13th Month Pay Law, which is to augment the income of low-wage earners. Therefore, the 13th month pay must be computed as one-twelfth of their total earnings (guaranteed wage and commissions) for the calendar year. The NLRC decision was reversed and set aside.