GR 114698; (July, 1995) (Digest)
G.R. No. 114698 July 3, 1995
WELLINGTON INVESTMENT AND MANUFACTURING CORPORATION, petitioner, vs. CRESENCIANO B. TRAJANO, Under-Secretary of Labor and Employment, ELMER ABADILLA, and 34 others, respondents.
FACTS
A routine labor inspection of petitioner Wellington Investment and Manufacturing Corporation revealed an alleged violation for non-payment of regular holidays falling on a Sunday to its monthly-paid employees. Wellington argued it complied with the law by paying a fixed monthly salary computed using the “314 factor” (365 days a year minus 51 Sundays), which it contended already included payment for all regular holidays. The Regional Director ruled against Wellington, ordering payment for extra working days created when a regular holiday coincides with a Sunday, as the holiday pay is already included in the 314-day divisor, thus allegedly creating an additional workday. The Undersecretary of Labor affirmed this order.
ISSUE
Whether a monthly-paid employee, receiving a fixed monthly compensation not less than the statutory minimum wage, is entitled to additional pay when a regular holiday falls on a Sunday.
RULING
No. The Supreme Court ruled in favor of Wellington, nullifying the orders of the public respondents. The legal logic is anchored on the nature of monthly compensation under the Labor Code and its Implementing Rules. For monthly-paid employees, the minimum monthly wage is determined by multiplying the statutory daily minimum wage by 365 days and dividing by twelve. This fixed monthly salary compensates the employee for all days in the month, whether worked or not, and is intended to avoid constant adjustments for non-working days, including regular holidays.
The Court held that Wellington’s use of the 314-day divisor to compute the monthly salary was a legitimate method that already accounted for all annual working days, inclusive of the ten regular holidays. The public respondents’ imposition of an additional payment for a holiday falling on a Sunday effectively created an obligation not found in law. They erroneously interpreted the rules to mean an “extra working day” is created in such a scenario, thereby legislating a new requirement. Since Wellington paid its employees the required statutory minimum monthly wage, no further obligation existed. The assailed orders constituted grave abuse of discretion for attempting to create a legal duty where none was provided.