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wages and should be entitled to their COLA on those days "even if

unworked"; CBAprovides that basicpay is computed on the basis
of5 days a week; Case at bar.—Applied to monthly-paid employees
if their monthly salary covers all the days in a month, they are
deemed paid their basic wages for all those days and they should
be entitled to their COLA on those days "even if unworked," as
the NLRC had opined. Peculiar to this case, however, is the
VOL. 163, JUNE 29, 1988 71
circumstance that pursuant to the Collective Bargaining
Globe Mackay Cable and Radio Corp. vs. NLRC Agreement (CBA) between Petitioner Corporation and
Respondent Union, the monthly basic pay is computed on the
*
No. L-74156. June 29,1988. basis of five (5) days a week, or twenty two (22) days a month.
Thus, the pertinent provisions of that Agreement read: "Art.
GLOBE MACKAY CABLE AND RADIO CORPORATION, XV(a)—Eight net working hours shall constitute the regular work
FREDERICKWHITE and JESUS SANTIAGO, petitioners, day for five days." "Art. XV(b)—Forty net hours of work, 5
vs. NATIONAL LABOR RELATIONS COMMISSION, working days, all constitute the regular work week." "Art. XVI,
FFWGLOBE MACKAY EMPLOYEES UNION and EDA Sec. l(b)—All overtime worked in excess of eight net hours daily or
CONCEPCION, respondents. in excess of 5 days weekly shall be computed on hourly basis at
the rate of time and one haif."
Same; Same; Same; Computation of overtime pay of monthly
Labor Laws; COLA; For entitlement for COLA is that basic
paid employees.—The Labor Arbiter also found that in
wage is being paid.—Section 5 of the Rules Implementing Wage
determining the hourly ratc of monthly paid employees for
Orders Nos. 2, 3, 5 and 6 uniformly read as follows: "Section 5.
purposes of computing overtime pay, the monthly wage is divided
Allowance for Unworked Days. "All covered employees shall be
by the number of actual work days in a month and then, by eight
entitled to their daily living allowance during the days that they
(8) working hours. If a monthly-paid employee renders overtime
are paid their basic
work, he is paid his basic salary rate plus one-half thereof. For
example, after examining the specimen payroll of employee Jesus
________________ L. Santos, the Labor Arbiter found: "the employee Jesus L.
Santos, who worked on Saturday and Sunday was paid base pay
* SECOND DIVISION.
plus 50% premium. This is over and above his monthly basic pay
as supported by the fact that base pay was paid. If the 6th and
7th days of the week are deemed paid even if unworkd and
72
included in the monthly salary. Santos should not

73

72 SUPREME COURT REPORTS ANNOTATED

Globe Mackay Cable and Radio Corp. vs. NLRC

VOL. 163, JUNE 29, 1988 73

wage, even ifunworked" The primordial consideration, therefore, Globe Mackay Cable and Radio Corp. vs. NLRC
for entitlement to COLA is that basic wage is being paid. In other
words, the payment of COLA is mandated only for the days that have been paid his base pay for Saturday and Sunday but should
the employees are paid their basic wage, even if said days are have received only the 50% overtime premium."
unworked. So that, on the days that employees are not paid their
basic wage, the payment of COLA is not mandated. As held in Same; Same; Same; CBA, law between the parties and can be
University of Pangasinan Faculty Union vs. University of subject of future re-negotiation.—Under the peculiar
Pangasinan, L-63122, February 20,1984,127 SCRA 691): "x x x it circumstances obtaining, therefore, where the company observes a
iS evident that the intention of the law is to grant ECOLA upon 5-day work week, it will have to be held that the COLA should be
the payment of basic wages. Hence, we have the principle of 'No computed on the basis of twenty two (22) days, which is the period
Pay, No ECOLA/ " during which the monthly-paid employees of Petitioner
Corporation receive their basic wage. The CBA is the law between
Same; Same; Same; Monthly paid employees whose monthly the parties and, if not acceptable, can be the subject of future re-
salary covers all the days in a month are deemed paid their basic negotiation.
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Same; Same; Same; Formula for conversion ofdaily allowance Ordering respondents-appellees to pay complainants-
2. appellants their back allowances reckoned from the time
to its monthly equivalent.—Moreover, before Wage Order No. 4,
there was lack of administrative guidelines for the of illegal deduction; and
implementation of the Wage Orders. It was only when the Rules 3. Ordering respondents-appellees from further illegally
Implementing Wage Order No. 4 were issued on 21 May 1984 that deducting the allowances of complainants-appellants.
a formula for the conversion of the daily allowance to its monthly
equivalent was laid down, thus: "Section 3. Application of Section SO ORDERED."
2—"xxx xxx (a) Monthly rates for non-agricultural workers
Presiding Commissioner of the NLRC, Diego P. Atienza,
covered under PDs 1614, 1634, 1678 and 1713: xxx xxx (3) For
concurred in the result, while Commissioner Cleto T.
workers who do not work and are not considered paid on
Villaltuya dissented and voted to affirm in toto the Labor
Saturdays and Sundays: P60 + P90 + P60 + (P2.00 x 262)
Arbiter's Decision.
dividedby!2 = P253.7(X"
On 19 May 1986, we issued the Temporary Restraining
Same; Same; Same; Petitioner cannot be faulted for erroneous Order enjoining respondents from enforcing the assailed
application ofa "doubtful or difficult question oflaw." (Art. 2155 Decision. On 2 September 1987, we gave due course to the
and 2154 ofthe Civil Code).—Absent clear administrative petition and required the submittal of memoranda, by the
guidelines, Petitioner Corporation cannot be faulted for erroneous parties, which has been comjplied with.
application of the law. Payment may be said to have been made The facts follow:
by reason of a mistake in the construction or application of a Wage Order No. 6, which took effect on 30 October 1984,
"doubtful or difficult question of law" (Article 2155, in relation to increased the cost-of-living allowance of non-agricultural
Article 2154 of the Civil Code). Since it is a past error that is workers in the private sector. Petitioner corporation
being corrected, no vested right may be said to have arisen nor complied with the said Wage Order by paying its monthly-
any diminution of benefit under Article 100 of the Labor Code paid employees the mandated P3.00 per day COLA.
may be said to have resulted by virtue of the correction. However, in computing said COLA, Petitioner Corporation
multiplied the P3.00 daily COLA by 22 days, which is the
PETITION for certiorari to review the order of the National number of working day^ in the company.
Labor Relations Commission. Respondent Union disagreed with the computation of
the monthly COLA claiming that the daily COLA rate of
The facts are stated in the opinion of the Court.
P3.00
Castillo, Laman, Tan & Pantaleon for petitioners.
Edwin D. Dellaban for private respondents. 75

74
VOL. 163, JUNE 29, 1988 75
74 SUPREME COURT REPORTS ANNOTATED Globe Mackay Cable and Radio Corp. vs. NLRC
Globe Mackay Cable and Radio Corp. vs. NLRC
should be multiplied by 30 days to arrive at the monthly
COLA rate. The union alleged furthermore that prior to the
MELENCIO-HERRERA, J.:
effectivity of Wage Order No. 6, Petitioner Corporation had
A special civil action for Certiorari with a prayer for a been computing and paying the monthly COLA on the basis
Temporary Restraining Order to enjoin respondents from of thirty (30) days per month and that this constituted an
enforcing the Decision of 10 March 1986 of the National employer practice, which should not be unilaterally
Labor Relations Commission (NLRC), in NGR Case No. 1- withdrawn. After several grievance proceedings proved
168-85 entitled "FFW-Globe Mackay Employees Union, et futile, the Union filed a complaint against Petitioner
al., vs. Globe Mackay Cable & Radio Corporation, et al.," Corporation, its President, F. White, and Vice-President, J.
the dispositive portion of which reads: Santiago, for illegal deduction, underpayment, unpaid
allowances, and violation of Wage Order No. 6. Petitioners
"WHEREFORE, premises considered, the appealed Decision is as White and Santiago were sought to be held personally
it is hereby SET ASIDE and another one issued: liable for the money claims thus demanded.
Labor Arbiter Adelaido F. Martinez sustained the
1. Declaring respondents-appellees (petitioners herein) position of Petitioner Corporation by holding that since the
guilty of illegal deductions of cost-of-living allowance; individual petitioners acted in their corporate capacity they

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should not have been impleaded; and that the monthly University of Pangasinan, L-63122, February 20,1984,127
COLA should be computed on the basis of twenty two (22) SCRA 691):
days, since the evidence showed that there are only 22 paid
days in a month for monthly-paid employees in the "x x x it is evident that the intention of the law is to grant ECOLA
company. His reasoning, inter alia, was as follows: upon the payment of basic wages. Hence, we have the principle of
'No Pay, No ECOLA.'"
"To compel the respondent company to use 30 days in a month to
compute the allowance and retain 22 days for vacation and sick Applied to monthly-paid employees if their monthly salary
leave, overtime pay and other benefits is inconsistent and covers all the days in a month, they are deemed paid their
palpably unjust. If 30 days is used as divisor, then it must be used basic wages for all those days and they should be entitled
for the computation of all benefits, not just the allowance. But this to their COLA on those days "even if unworked," as the
is not fair to complainants, not to mention that it will contravene NLRC had opined. Peculiar to this case, however, is the
the provision of the parties' CBA." circumstance that pursuant to the Collective Bargaining
Agreement (CBA) between Petitioner Corporation and
On appeal, the NLRC reversed the Labor Arbiter, as Respondent Union, the monthly basic pay is computed on
heretofore stated, and held that Petitioner Corporation was the basis of five (5) days a week, or twenty two (22) days a
guilty of illegal deductions, upon the following month. Thus, the pertinent provisions of that Agreement
considerations: (1) that the P3.00 daily COLA under Wage read:
Order No. 6 should be paid and computed on the basis of
thirty (30) days instead of twentytwo (22) days since "Art. XV(a)—Eight net working hours shall constitute the regular
workers paid on a monthly basis are entitled to COLA on work day for five days."
Saturdays, Sundays and legal holidays "even if unworked;" "Art. XV(b)—Forty net hours of work, 5 working days, shall
(2) that the full allowance enjoyed by Petitioner constitute the regular work week."
Corporation's monthly-paid employees before the CBA "Art. XVI, Sec. l(b)—All overtime worked in excess of eight net
executed between the parties in 1982 constituted voluntary hours daily or in excess of 5 days weekly shall be computed on
employer practice, which cannot be unilaterally withdrawn; hourly
and (3) that petitioners White and Santiago were prop-
77
76

VOL. 163, JUNE 29, 1988 77

76 SUPREME COURT REPORTS ANNOTATED Globe Mackay Cable and Radio Corp. vs. NLRC
Globe Mackay Cable and Radio Corp. vs. NLRC
basis at the rate of time and one half."
erly impleaded as respondents in the case beiow.
The Labor Arbiter also found that in determining the
Hence, this Petition, anchored on the charge of grave
hourly. rate of monthly paid employees for purposes of
abuse of discretion by the NLRC.
computing overtime pay, the monthly wage is divided by
We are constrained to reverse the reversal.
the number of actual work days in a month and then, by
Section 5 of the Rules Implementing Wage Orders Nos.
eight (8) working hours. If a monthly-paid employee
2,3, 5 and 6 uniformly read as follows:
renders overtime work, he is paid his basic salary rate plus
"Section 5. Allowance for Unworked Days. one-half thereof. For example, after examining the
"All covered employees shall be entitled to their daily living spccimen payroll of employee Jesus L.
allowance during the days that they are paid their basic wage, Santos, the Labor Arbiter found:
even if unworked." (italics suppiied)
"the employee Jesus L. Santos, who worked on Saturday and
The primordial consideration, therefore, for entitlement to Sunday was paid base pay plus 50% premium. This is over and
COLA is that basic wage is being paid. In other words, the above his monthly basic pay as supported by the fact that base
payment of COLA is mandated only for the days that the pay was paid. If the 6th and 7th days of the week are deemed paid
employees are paid their basic wage, even if said days are even if unworked and included in the monthly salary, Santos
unworked. So that, on the days that employees are not paid should not have been paid his base pay for Saturday and Sunday
their basic wage, the payment of COLA is not mandated. but should have received only the 50% overtime premium."
As held in University of Pangasinan Faculty Union vs.

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Similarly, the speeimen payrolls of employees, Dennis "Under the aforecited formula/guideline, issued for the first time,
Dungon and Rene Sanvictores, showed that in computing when applied to a company like respondent which observes a 5day
the vacation and sick leaves of the employees, Petitioner work week (or where 2 days in a week, not necessarily Saturday
Corporation consistently used twenty-two (22) days. and Sunday, are not considered paid), the monthly equivalent of a
Under the peculiar circumstances obtaining, therefore, daily allowance is arrived at by multiplying the daily allowance
where the company observes a 5-day work week, it will by 262 divided by 12. This formula results in the equivalent of
have to be held that the COLA should be computed on the 21.8 days in a month."
basis of twenty two (22) days, which is the period during
which the monthlypaid employees of Petitioner Corporation Absent clear administrative guidelines, Petitioner
receive their basic wage. The CBA is the law between the Corporation cannot be faulted for erroneous application of
pai ties and, if not acceptable, can be the subject of future the law. Payment may be said to have been made by reason
re-negotiation. of a mistake in the construction or application of1 a
2) Payment in full by Petitioner Corporation of the "doubtful or difficult question of law." (Article 2155, in
COLA before the execution of the CBA in 1982 and in relation to Article
compliance with Wage Orders Nos. 1 (26 March 1981) to 5
(11 June 1984), should not be construed as constitutive of ________________
voluntary employer practice, which cannot now be
1 ART. 2155. Payment by reason of a mistake in the construction or
unilaterally withdrawn by petitioner. To be considered as
application of a doubtful or diificult question of law may come within the
such, it should have been practiced over a long period of
scope of the preceding article.
time, and must be shown to have been consistent and
deliberate. Adequate proof is wanting in this respect. The 79
test of long practice has been enunciated thus:
78 VOL. 163, JUNE 29, 1988 79
Globe Mackay Cable and Radio Corp. vs. NLRC
78 SUPREME COURT REPORTS ANNOTATED
2

Globe Mackay Cable and Radio Corp. vs. NLRC 2154 of the Civil Code). Since it is a past error that is
being corrected, no vested right may be said to have arisen
"x x x Respondent Company agreed to continue giving holiday pay nor any diminution
3
of benefit under Article 100 of the
knowing fully well that said employees are not covered by the law Labor Code may be said to have resulted by virtue of the
requiring payment of holiday pay." (Oceanic Pharmacal correction.
Employees Union [FFW] vs. Inciong, L-50568, November With the conclusions thus reached, there is no further
7,1979,94 SCRA 270). (Italics ours) need to discuss the liability of the officers of Petitioner
Corporation.
Moreover, before Wage Order No. 4, there was lack of WHEREFORE, Certiorari is granted, the Decision of the
administrative guidelines for the implementation of the National Labor Relations Commission, dated 10 March
Wage Orders. It was only when the Rules Implementing 1986, is SET ASIDE, and the Decision of the Labor Arbiter,
Wage Order No. 4 were issued on 21 May 1984 that a dated 9 May 1985, is hereby REINSTATED. The
formula for the conversion of the daily allowance to its Temporary Restraining Order heretofore issued is hereby
monthly equivalent was laid down, thus: made permanent.
SO ORDERED.
"Section 3. Application of Section 2—
"x x x xxx Yap (C.J.), Paras, and Sarmiento, JJ., concur.
"(a) Monthly rates for non-agricultural workers covered Under Paditla, J., took no part in the deliberation.
PDs 1614,1634,1678 and 1713:
"x x x xxx Petition granted; decision set aside.
"(3) For workers who do not work and are not considered paid
on Saturdays and Sundays: Note.—The Court has already ruled that Sec. 2, Rule
P60 + P90 + P60 + (P2.00 x 262) divided by 12 = P253.70" IV, Book III of the Rules Implementing Article 94 of the
(Italics ours) Labor Code and Policy Instructions No. 9 excluding
employees regularly paid by the month from payment of
As the Labor Arbiter had analyzed said formula:
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holiday pay is null and void. (CBTCEmployees Union vs.

Clave, 141 SCRA 9.)

——oOo——

________________

2 ART. 2154. Ifsomethingisreceivedwhenthereisnorightto demand it,

and it was unduly delivered through mistake, the obligation to return it
arises.
3 ART. 100. Prohibition against elimination or diminution of benefits.—
Nothing in this Book shall be construed to eliminate or in any way
diminish supplements, or other employee benefits bcing enjoyed at the
time of promulgation of this Code.

80

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