G.R. No. 162021 June 16, 2014
MEGA MAGAZINE PUBLICATIONS, INC., JERRY TIU, AND SARITA V. YAP, Petitioners, vs. MARGARET A. DEFENSOR, Respondent.

FACTS

Respondent Margaret A. Defensor was employed by petitioner Mega Magazine Publications, Inc. (MMPI) and promoted to Group Publisher. On February 25, 1999, she proposed a year-end commission scheme for herself and a special incentive plan for the Sales Department via a memorandum to Executive Vice-President Sarita V. Yap. Yap made marginal notes on the memorandum, counter-proposing adjustments to the schedules and instructing Defensor to draft a formal proposal. On April 5, 1999, Defensor sent another memorandum proposing her outright commissions start at 0.05% of ₱34.5 million total revenue. Defensor resigned effective December 1999. On December 8, 1999, Yap sent a memorandum “formalizing” her approval of a revised 1999 special incentive scheme, starting commissions at 0.05% of ₱35-₱38 million gross advertising revenue. After leaving MMPI, Defensor filed a complaint for payment of bonus and incentive compensation. The Labor Arbiter dismissed the complaint, finding no evidence MMPI agreed to Defensor’s terms and noting MMPI’s audited gross revenue for 1999 was only ₱31,947,677.00. The NLRC affirmed. The Court of Appeals initially dismissed Defensor’s petition but, on motion for reconsideration, issued an amended decision annulling the NLRC resolutions and remanding the case for reception of additional evidence (an affidavit from a former MMPI traffic clerk, Lie Tabingo, regarding gross revenue).

ISSUE

Whether respondent Margaret A. Defensor is entitled to the claimed commissions and special incentive bonus.

RULING

Yes, in part. The Supreme Court ruled that the grant of a bonus or special incentive is generally a management prerogative and not a demandable obligation, except when it is made part of the wage or is promised and expressly agreed upon. The Court found that petitioners, through Yap’s actions, had exercised this prerogative and agreed to grant a bonus or incentive, as Yap never flatly refused the request and instead bargained over the rates and revenue targets. The contested issue was the specific schedule. The Court determined that the parties ultimately agreed on the terms in Yap’s December 8, 1999 memorandum, which set the commission at 0.05% of gross revenue between ₱35-₱38 million and a special incentive bonus of ₱8,500.00. On the matter of whether the revenue target was met, the Court held that in labor cases, the rules of evidence are applied liberally. It considered the Tabingo memorandum (indicating gross revenue of ₱36,022,624.07), which was presented before the Labor Arbiter, and found it constituted substantial evidence that the minimum target of ₱35 million was achieved. Therefore, Defensor was entitled to the commission and bonus as per the agreed schedule. The Court reversed the CA amended decision and entered a new judgment granting Defensor’s claim for outright commissions (₱181,083.12) and special incentive bonus (₱8,500.00), for a total of ₱189,583.12.