G.R. No. 116593 September 24, 1997
PULP AND PAPER, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION AND EPIFANIA ANTONIO, respondents.

FACTS

Private respondent Epifania Antonio was a regular employee of petitioner Pulp and Paper, Inc., having worked as a wrapper/packer since September 1975. She was a piece-rate worker, with her salary depending on the number of reams of bond paper she packed per day. On June 29, 1991, she was temporarily laid off due to a lack of work caused by dwindling customer orders. On November 29, 1991, she was verbally informed of her termination and presented with a Quitclaim and Release, which she refused to sign. She filed a complaint for illegal dismissal and underpayment of wages, claiming she was rarely paid in accordance with the minimum wage law and was not paid overtime, holiday, and service incentive leave pay. The Labor Arbiter dismissed the illegal dismissal complaint but ordered petitioner to pay separation pay and salary differentials. The National Labor Relations Commission (NLRC) affirmed the Labor Arbiter’s decision in toto. Petitioner admitted private respondent was entitled to separation pay but contested the computation, arguing that as a piece-rate worker, her separation pay and wage differentials should not be based on the daily minimum wage applicable to time-workers.

ISSUE

The main issue is how to compute the separation pay and salary differential of a piece-rate worker in the absence of wage rates specially prescribed for such workers.

RULING

The Supreme Court denied the petition and affirmed the NLRC’s decision. On the first issue, the Court ruled that in the absence of wage rates based on time and motion studies determined or approved by the Secretary of Labor, the wage rates of piece-rate workers must be based on the applicable daily minimum wage determined by the Regional Tripartite Wages and Productivity Commission. The labor arbiter correctly used the prevailing minimum daily wage (P118.00 under Wage Order No. NCR-02) for computing separation pay. The Court also upheld the award of separation pay, as the temporary layoff exceeded six months without recall, effectively constituting a termination. On the second issue, the Court ruled that the labor arbiter correctly computed the salary differentials based on the difference between the prevailing minimum wage and the amount actually received by private respondent, as petitioner failed to present evidence of a time and motion study or any approved scheme to determine proper piece rates. The computation covered various periods under different wage laws and orders.