Songco V NLRC

RAQUEL Q.
CANDELARIA
20.
JOSE SONGCO, ROMEO CIPRES, and AMANCIO MANUEL, petitioners,

vs
NATIONAL LABOR RELATIONS COMMISSION (FIRST DIVISION), LABOR
ARBITER FLAVIO AGUAS, and F.E. ZUELLIG (M), INC., respondents.
G.R. No. L-50999
MEDIALDEA, J.:
STATEMENT OF THE ISSUE:
Whether or not the terms “wage”, defined in Article 97(f) and Article XIV of the
Collective Bargaining Agreement, Article 284 of the Labor Code and Sections 9(b) and 10 of the
Implementing Rules includes commission in the computation of the separation pay of petitioners.
COMPLAINANT’S ARGUMENTS:
F.E. Zuelling filed with DOLE Regional Office seeking clearance to terminate the
petitioners services (Songco, Cipres and Manuela) due to financial losses. Thus, opposed by the
petitioner and agreed to resolve the issue through their separation pay based on their salaries and
received commissions for every sale they made.
Petitioners' position was that in arriving at the correct and legal amount of separation pay
due them, whether under the Labor Code or the CBA, their basic salary, earned sales
commissions and allowances should be added together. They cited Article 97(f) of the Labor
Code.
RESPONDENT’S ARGUMENTS:
On June 26,1978, the Labor Arbiter rendered a decision and ordered to pay the
complainants separation pay equivalent to their one month salary (exclusive of commissions,
allowances, etc.) for every year of service that they have worked with the company.
Zuellig argues if the intention of the Labor Code to include commission in the
computation of separation pay, it could have explicitly said so in clear and unequivocal terms.
Furthermore, in the definition of the term “wage”, “commission” is used only as one of the
features or designations attached to the word remuneration or earnings.
DECISION OF THE COURT:
Yes.
The ambiguity between Article 97(f), which defines the term 'wage' and Article XIV of
the Collective Bargaining Agreement, Article 284 of the Labor Code and Sections 9(b) and 10 of
the Implementing Rules, which mention the terms "pay" and "salary", is more apparent than real.
Broadly, the word "salary" means a recompense or consideration made to a person for his pains
or industry in another man's business. Whether it be derived from "salarium," or more fancifully
from "sal," the pay of the Roman soldier, it carries with it the fundamental idea of compensation
for services rendered. Indeed, there is eminent authority for holding that the words "wages" and
"salary" are in essence synonymous (Words and Phrases, Vol. 38 Permanent Edition, p. 44 citing
RAQUEL Q. CANDELARIA
Hopkins vs. Cromwell, 85 N.Y.S. 839,841,89 App. Div. 481; 38 Am. Jur. 496). "Salary," the
etymology of which is the Latin word "salarium," is often used interchangeably with "wage", the
etymology of which is the Middle English word "wagen". Both words generally refer to one and
the same meaning, that is, a reward or recompense for services performed. Likewise, "pay" is the
synonym of "wages" and "salary" (Black's Law Dictionary, 5th Ed.). Inasmuch as the words
"wages", "pay" and "salary" have the same meaning, and commission is included in the
definition of "wage", the logical conclusion, therefore, is, in the computation of the separation
pay of petitioners, their salary base should include also their earned sales commissions.
The nature of the work of a salesman and the reason for such type of remuneration for
services rendered demonstrate clearly that commission are part of petitioners' wage or salary. We
take judicial notice of the fact that some salesmen do not receive any basic salary but depend on
commissions and allowances or commissions alone, are part of petitioners' wage or salary. We
take judicial notice of the fact that some salesman do not received any basic salary but depend on
commissions and allowances or commissions alone, although an employer-employee relationship
exists. Bearing in mind the preceeding dicussions, if we adopt the opposite view that
commissions, do not form part of wage or salary, then, in effect, We will be saying that this kind
of salesmen do not receive any salary and therefore, not entitled to separation pay in the event of
discharge from employment. Will this not be absurd? This narrow interpretation is not in accord
with the liberal spirit of our labor laws and considering the purpose of separation pay which is, to
alleviate the difficulties which confront a dismissed employee thrown the streets to face the harsh
necessities of life.
RATIO:
The final consideration is, in carrying out and interpreting the Labor Code's provisions
and its implementing regulations, the workingman's welfare should be the primordial and
paramount consideration. This kind of interpretation gives meaning and substance to the liberal
and compassionate spirit of the law as provided for in Article 4 of the Labor Code which states
that "all doubts in the implementation and interpretation of the provisions of the Labor Code
including its implementing rules and regulations shall be resolved in favor of labor" (Abella v.
NLRC, G.R. No. 71812, July 30,1987,152 SCRA 140; Manila Electric Company v. NLRC, et
al., G.R. No. 78763, July 12,1989), and Article 1702 of the Civil Code which provides that "in
case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety
and decent living for the laborer.

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RAQUEL Q.

JOSE SONGCO, ROMEO CIPRES, and AMANCIO MANUEL, petitioners,

STATEMENT OF THE ISSUE:

DECISION OF THE COURT:

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