Pnb-Republic Bank V. NLRC GR No. 117460 January 6, 1997

OCOP, Feliz Kathleen D.
8/23/2019
LABOR
SERVICE INCENTIVE LEAVE

PNB-REPUBLIC BANK v. NLRC
GR No. 117460
January 6, 1997
Facts:
Antonio G. Santos was employed by Republic Planters Bank, now known as PNB-Republic Bank (PNB-RB), for thirty-one (31)
years and fifteen (15) days occupying various positions. At the time of his retirement on 31 May 1990 he was a Department Manager
with a monthly salary of P8,965.00 and accumulated leave credits of two hundred and seventy-two (272) days. He received a gratuity
pay of P434,468.52 out of which P20,615.62 was deducted for taxes due. Santos filed the instant suit for underpayment of gratuity pay,
non-payment of accumulated sick and vacation leaves, mid-year and year-end bonuses, financial assistance, at the same time claiming
damages and attorney's fees.
The petitioner contens that the resolution of NLRC is contrary to the evidence and existing jurisprudence; that NLRC gravely
abused its discretion when it upheld the order of the Labor Arbiter awarding P661,210.63 to Santos; and, that the award to Santos of
mid-year and year-end bonuses, moral and exemplary damages and attorney's fees has no legal basis. Petitioner argues that Santos is
not entitled to the award as he signed a Release, Waiver and Quitclaim therefor when he received his gratuity pay of P434,468.52.
Petitioner posits that as the CBA had long expired it could no longer be used as basis in computing the gratuity pay of its retiring
officers; instead, the computation should be based on the practice and policy of the bank effective at the time of the employee's
retirement.
Issues:
(a) Whether the quitclaim signed by Santos is valid
(b) Whether the old and expired Collective Bargaining Agreement (CBA) should be the basis of the computation for the
gratuity pay
Law Analysis:
The Petitioner invokes Periquet v. NLRC. In Periquet, the consideration for the quitclaim was found to be credible and
reasonable as opposed with the the case at bar. Additionally, regarding the issue of the basis for the computation of the gratuity
payment for Santos, Republic Planters Banks v. National Labor Relations Commission ruled that the company’s practice or policy is a
labor standard in determining the retirement benefits of its employees. This is in consonance with Section 14(a), Rule 1 of the Rules
and Regulations Implementing Book VI of the Labor Code which provides:
Sec. 14. Retirement Benefits. — (a) An employee who is retired

pursuant to a bona fide retirement plan or in accordance with the applicable
individual or collective agreement or established employer policy shall be
entitled to all the retirement benefits provided therein
Case History:
The Labor Arbiter found for complainant Santos awarding P661,210.63 and additional compensation for mid-year and year-
end bonuses, moral and exemplary damages and attorney’s fees. This was affirmed by the National Labor Relations Commission
(NLRC).
Ruling:
In the instant case, the total amount claimed by Santos is P908,022.65 of which only P434,468.52 was received by him.
Considering that the Release, Waiver and Quitclaim was signed by Santos under protest as found by the Labor Arbiter and the NLRC,
and the difference between the amount claimed and that paid cannot in any way be considered negligible, the Court deemed it proper
to recompute and determine the exact amount of the retirement benefits due private respondent. The Court perceived the waiver under
the facts of the case to dangerously encroach on the entrenched domain of public policy.
Moreover, the Court ruled that the PNB-RB continued to adopt the practice stated in the CBA even after its expiration. The
grant was consistent and deliberate although petitioner knew fully well that it was not required to give the benefits after the expiration of
the 1971-1973 CBA. Under these circumstances, the granting of the gratuity pay on the basis of the salary rate of the rank next higher
may be deemed to have ripened into company practice or policy which can no longer be peremptorily withdrawn. Any benefit and
supplement being enjoyed by the employees cannot be reduced, diminished, discontinued or eliminated by the employer by virtue of
Sec. 10 of the Rules and Regulations Implementing P.D. No. 851 and Art. 100 of the Labor Code which prohibit the diminution or
elimination by the employer of the employees' existing benefits. 13 Leave credits should likewise be computed based on the upgraded
salary rate, i.e., the salary rate of the next higher rank in conformity with the provisions of the 1971-1973 CBA
Opinion:
PNB0RB cannot ignore its policy just because its basis. Such as the CBA, has expired. By the doctrine of estoppel, any
person acting in a certain way cannot deny such conduct. The employees have already thought that they will receive the subject
payments based on the salary of the rank next higher to their position. It is only just and equitable to let them receive a proper payment
for the services they provided.
HOLIDAY PAY
CEZAR ODANGO v. NATIONAL LABOR RELATIONS COMMISSION

GR No. 147420
June 10, 2004
Facts:
After the routine inspection, the Regional Branch of the Department of Labor and Employment (DOLE) directed the ANTECO
to pay the petitioners wage differentials amounting to P1,427,412.75. The petitioners are monthly-paid employees of ANTECO whose
workdays are from Monday to Friday and half of Saturday.
Issue:
Whether the petitioners are entitled with the wage differential.
Law Analysis:
The law involved is the OMNIBUS RULES TO IMPLEMENT THE LABOR CODE OF THE PHILIPPINES Book IV Rule IV
SECTION 2. Status of employees paid by the month. — Employees who are

uniformly paid by the month, irrespective of the number of working days therein, with a
salary of not less than the statutory or established minimum wage shall be paid for all
days in the month whether worked or not.
For this purpose, the monthly minimum wage shall not be less than the
statutory minimum wage multiplied by 365 days divided by twelve.
Case History:
The Labor Arbiter granted the petitioners a wage differential amounting to P1,017,507.73 and attorney’s fees of 10%. It
reasoned that ANTECO failed to refute petitioners’ argument that monthly-paid employees are considered paid for all the days in a
month under Section 2, Rule IV of Book 3 of the Implementing Rules of the Labor Code ("Section 2"). The Labor Arbiter agreed with
petitioners that ANTECO’s use of 304 as divisor is an admission that it is paying its employees for only 304 days a year instead of the
365 days as specified in Section 2. The Labor Arbiter concluded that ANTECO owed its employees the wages for 61 days, the
difference between 365 and 304, for every year.
The NLRC reversed the Labor Arbiter’s ruling that ANTECO underpaid its employees. The NLRC pointed out that the Labor
Arbiter’s own computation showed that the daily wage rates of ANTECO’s employees were above the minimum daily wage of ₱124
using the formula: [(Daily Wage Rate = (Wage x 12)/365)].
The Court of Appeals held that the petition was insufficient in form and substance since it "does not allege the essential
requirements of the extra-ordinary special action of certiorari." The appellate court characterized the allegations in the petition as
"sweeping" and clearly falling short of the requirement of Section 3, Rule 46 of the Rules of Court.
Ruling:
The Court have long ago declared void Section 2, Rule IV of Book III of the Omnibus Rules Implementing the Labor Code
(Insular Bank of Asia v. Inciong). Moreover, The basic rule in this jurisdiction is "no work, no pay." The right to be paid for un-worked
days is generally limited to the ten legal holidays in a year.15 Petitioners’ claim is based on a mistaken notion that Section 2, Rule IV of
Book III gave rise to a right to be paid for un-worked days beyond the ten legal holidays. Thus, Section 2 cannot serve as basis of any
right or claim. Absent any other legal basis, petitioners’ claim for wage differentials must fail. The use of a divisor less than 365 days
cannot make ANTECO automatically liable for underpayment. The facts show that petitioners are required to work only from Monday to
Friday and half of Saturday. Thus, the minimum allowable divisor is 287, which is the result of 365 days, less 52 Sundays and less 26
Saturdays (or 52 half Saturdays). Any divisor below 287 days means that ANTECO’s workers are deprived of their holiday pay for some
or all of the ten legal holidays. The 304 days divisor used by ANTECO is clearly above the minimum of 287 days.
Opinion:
The petitioners arguments are unmeritorious because they based their arguments on law which was already declared void. It
was also reiterated in a case, namely Insular Bank, which was decided 20 years ago so it is inappropriate for them to use a law already
ineffective.

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Pnb-Republic Bank V. NLRC GR No. 117460 January 6, 1997

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OCOP, Feliz Kathleen D.

SERVICE INCENTIVE LEAVE

Sec. 14. Retirement Benefits. — (a) An employee who is retired

CEZAR ODANGO v. NATIONAL LABOR RELATIONS COMMISSION

SECTION 2. Status of employees paid by the month. — Employees who are

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