Professional Documents
Culture Documents
Protacio Vs Mananghaya and Co.
Protacio Vs Mananghaya and Co.
- versus -
MARTINEZ,*
CORONA,**
TINGA,
Acting Chairperson,
VELASCO, JR., and
BRION, JJ.
Promulgated:
March 25, 2009
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DECISION
TINGA, J.:
Before the Court is a petition for review on certiorari [1] under Rule 45 of the
1997 Rules of Civil Procedure, assailing the decision[2] and resolution[3] of the
Court of Appeals in CA-G.R. SP No. 85038. The Court of Appeals decision
reduced the monetary award granted to petitioner by the National Labor Relations
Commission (NLRC) while the resolution denied petitioners motion for
reconsideration for lack of merit.
The following factual antecedents are matters of record.
Respondent KPMG Laya Mananghaya & Co. (respondent firm) is a general
professional partnership duly organized under the laws of the Philippines.
petitioner received the lump sum amount of P573,000.00 for the fiscal year ending
1998.[8]
Respondent firm denied it had intentionally delayed the processing of
petitioners claims but alleged that the abrupt departure of petitioner and three
other members of the firms Tax Division had created problems in the
determination of petitioners various accountabilities, which could be finished only
by going over voluminous documents. Respondents further averred that they had
been taken aback upon learning about the labor case filed by petitioner when all
along they had done their best to facilitate the processing of his claims.[9]
During the pendency of the case before the Labor Arbiter, respondent firm
on three occasions sent check payments to petitioner in the following amounts:
(1)P71,250.00, representing petitioners 13th month pay; (2) P54,824.18, as
payments for the cash equivalent of petitioners leave credits and reimbursement
claims; and (3)P10,762.57, for the refund of petitioners taxes withheld on his
vacation leave credits. Petitioners copies of his withholding tax certificates were
sent to him along with the check payments.[10] Petitioner acknowledged the receipt
of the 13th month pay but disputed the computation of the cash value of his
vacation leave credits and reimbursement claims.[11]
[12]
P573,000.00
SO ORDERED.[18]
Before delving into the merits of the petition, the issues raised by petitioner
adverting to the Constitution must be addressed. Petitioner contends that the Court
of Appeals resolution which denied his motion for reconsideration violated Article
VIII, Section 14 of the Constitution, which states:
Section 14. No decision shall be rendered by any court without expressing
therein clearly and distinctly the facts and the law on which it is based.
No petition for review or motion for reconsideration of a decision of the
court shall be refused due course or denied without stating the legal basis
therefor.
was not fully justified and supported by the evidence on record. The Court fully
agrees that the lump sum award of P573,000.00 to petitioner seemed to have been
plucked out of thin air. Noteworthy is the fact that in his position paper, petitioner
claimed that he was entitled to the amount of P674,756.70.[28] The variance
between the claim and the amount awarded, with the record bereft of any proof to
support either amount only shows that the appellate court was correct in holding
that the award was a mere speculation devoid of any factual basis. In the
exceptional circumstance as in the instant case, the Court finds no error in the
appellate courts review of the evidence on record.
After an assessment of the evidence on record, the Court of Appeals reversed
the findings of the NLRC and the Labor Arbiter with respect to the award of the
year-end lump sum pay and the cash value of petitioners leave credits. The
appellate court held that while the lump sum payment was in the nature of a
proportionate share in the firms annual income to which petitioner was entitled,
the payment thereof was contingent upon the financial position of the firm.
According to the Court of Appeals, since no evidence was adduced showing the net
income of the firm for fiscal year ending 1999 as well as petitioners corresponding
share therein, the amount awarded by the labor tribunals was a baseless speculation
and as such must be deleted.[29]
On the other hand, the NLRC affirmed the Labor Arbiters award of the
lump sum payment in the amount of P573,000.00 on the basis that the payment
thereof had become a company policy which could not be withdrawn arbitrarily.
Furthermore, the NLRC held that respondent firm had failed to controvert
petitioners claim that he was responsible for generating some P7,365,044.47 in
cash revenue during the fiscal year ending 1999.
The evidence on record establishes that aside from the basic monthly
compensation,[30] petitioner received a yearly lump sum amount during the first two
years[31] of his employment, with the payments made to him after the annual net
incomes of the firm had been determined. Thus, the amounts thereof varied and
were dependent on the firms cash position and financial performance.[32] In one of
the letters of respondent Mananghaya to petitioner, the amount was referred to as
petitioners share in the incentive compensation program.[33]
While the amount was drawn from the annual net income of the firm, the
distribution thereof to non-partners or employees of the firm was not, strictly
speaking, a profit-sharing arrangement between petitioner and respondent firm
contrary to the Court of Appeals finding. The payment thereof to non-partners of
the firm like herein petitioner was discretionary on the part of the chairman and
managing partner coming from their authority to fix the compensation of any
employee based on a share in the partnerships net income. [34] The distribution
being merely discretionary, the year-end lump sum payment may properly be
considered as a year-end bonus or incentive. Contrary to petitioners claim, the
granting of the year-end lump sum amount was precisely dependent on the firms
net income; hence, the same was payable only after the firms annual net income
and cash position were determined.
By definition, a bonus is a gratuity or act of liberality of the giver. It is
something given in addition to what is ordinarily received by or strictly due the
recipient.[35] A bonus is granted and paid to an employee for his industry and
loyalty which contributed to the success of the employers business and made
possible the realization of profits.[36] Generally, a bonus is not a demandable and
enforceable obligation. It is so only when it is made part of the wage or salary or
compensation. When considered as part of the compensation and therefore
demandable and enforceable, the amount is usually fixed. If the amount would be a
contingent one dependent upon the realization of the profits, the bonus is also not
demandable and enforceable.[37]
In the instant case, petitioners claim that the year-end lump sum represented
the balance of his total compensation package is incorrect. The fact remains that
the amounts paid to petitioner on the two occasions varied and were always
dependent upon the firms financial position.
case, the granting of the year-end lump sum bonus was discretionary and
conditional, thus, petitioner may not question the basis for the granting of a mere
privilege.
With regard to the computation of the cash equivalent of petitioners leave
credits, the Court of Appeals used a base figure of P71,250.00 representing
petitioners monthly salary as opposed to P95,000.00 used by the Labor Arbiter
and NLRC. Meanwhile, respondents insist on a base figure of only P61,000.00,
which excludes the advance incentive pay of P15,000.00, transportation allowance
of P15,000.00 and representation allowance of P4,000.00, which petitioner
regularly received every month. Because of a lower base figure (representing the
monthly salary) used by the appellate court, the cash equivalent of petitioners
leave credits was lowered from P28,407.08 toP9,802.83.
The monthly compensation of P71,250.00 used as base figure by the Court
of Appeals is totally without basis. As correctly held by the Labor Arbiter and the
NLRC, the evidence on record reveals that petitioner was receiving a monthly
compensation of P95,000.00 consisting of a basic salary of P61,000.00, advance
incentive pay ofP15,000.00, transportation allowance of P15,000.00 and
representation allowance of P4,000.00. These amounts totaling P95,000.00 are all
deemed part of petitioners monthly compensation package and, therefore, should
be the basis in the cash commutation of the petitioners leave credits. These
allowances were customarily furnished by respondent firm and regularly received
by petitioner on top of the basic monthly pay of P61,000.00. Moreover, the Labor
Arbiter noted that respondent firms act of paying petitioner a 13 thmonth-pay at the
rate of P95,000.00 was an admission on its part that petitioners basic monthly
salary was P95,000.00
The Court of Appeals, Labor Arbiter and NLRC used a 30-working day
divisor instead of 26 days which petitioner insists. The Court of Appeals relied on
Section 2, Rule IV, Book III[42] of the implementing rules of the Labor Code in
using the 30-working day divisor. The provision essentially states that monthly-
paid employees are presumed to be paid for all days in the month whether worked
or not.
The provision has long been nullified in Insular Bank of Asia and American
Employees Union (IBAAEU) v. Hon. Inciong, etc., et al.,[43] where the Court ruled
that the provision amended the Labor Codes provisions on holiday pay by
enlarging the scope of their exclusion.[44] In any case, the provision is inapplicable
to the instant case because it referred to the computation of holiday pay for
monthly-paid employees.
Petitioners claim that respondent firm used a 26-working day divisor is
supported by the evidence on record. In a letter addressed to
petitioner,[45] respondents counsel expressly admitted that respondent used a 26working day divisor. The Court is perplexed why the tribunals below used a 30-day
divisor when there was an express admission on respondents part that they used a
26-day divisor in the cash commutation of leave credits. Thus, with a monthly
compensation ofP95,000.00 and using a 26-working day divisor, petitioners daily
rate is P3,653.85.[46] Based on this rate, petitioners cash equivalent of his leave
credits of 23.5 isP85,865.48.[47] Since petitioner has already received the
amount P46,009.67, a balance of P39,855.80 remains payable to petitioner.
WHEREFORE, the instant petition for review on certiorari is PARTLY
GRANTED. The Decision of the Court of Appeals in CA-G.R. SP No. 85038
isAFFIRMED with the MODIFICATION that respondents are liable for the
underpayment of the cash equivalent of petitioners leave credits in the amount
of P39,855.80.
SO ORDERED.
DANTE
TINGA
WE CONCUR:
On Official Leave
LEONARDO A. QUISUMBING
O.
Associate Justice
Associate Justice
Chairperson
RENATO C. CORONA
Associate Justice
ARTURO D. BRION
Associate Justice
ATTESTATION
I attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Courts Division.
DANTE O. TINGA
Associate Justice
Acting Chairperson, Second Division
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, and the
Division Acting Chairpersons Attestation, it is hereby certified that the
conclusions in the above Decision had been reached in consultation before
the case was assigned to the writer of the opinion of the Courts Division.
REYNATO S. PUNO
Chief Justice
Additional member per Special Order No. 590 in lieu of J. Quisumbing who is on official business
**
Additional member per Special Order No. 600 in lieu of J. Carpio Morales who is on official business.
[1]
[2]
Id. at 37-54. Dated 19 April 2005 and penned by Justice Jose C. Reyes, Jr. and concurred in by Justices
Delilah Vidallon-Magtolis, Chairperson of the Fourth Division, and Perlita J. Tria Tirona.
[3]
[4]
Id. at 38.
[5]
Id. at 38-39.
[6]
Id. at 72.
[7]
[8]
Id. at 71-72.
[9]
Id. at 73-74.
[10]
Id. at 74-75.
[11]
Id. at 75.
[12]
Id. at 70-81.
[13]
Id. at 80-81.
[14]
Id. at 80.
[15]
Id. at 78-79.
[16]
Id. at 79.
[17]
Id. at 83-96.
[18]
Id. at 96.
[19]
Id. at 94.
[20]
[21]
Id. at 42.
[22]
Id. at 2-39.
[23]
[24]
Id. at 15-16.
[25]
Nunal v. Commission on Audit, G.R. No. 78648, 24 January 1989, 169 SCRA 356, 362.
[26]
Soriano, Jr. v. National Labor Relations Commission, G.R. No. 165594, 23 April 2007, citing Danzas
Intercontinental, Inc. v. Daguman, 456 SCRA 382.
[27]
See Philippine Pizza, Inc., v. Bungabong, G.R. No. 154315, 09 May 2005, 458 SCRA 288; Danzas
Intercontinental, Inc. v. Daguman, G.R. No. 154368, 15 April 2005, 456 SCRA 382; Go v. Court of Appeals, G.R.
No. 158922, 28 May 2004, 430 SCRA 358.
[28]
Records, p. 31.
[29]
Rollo, p. 53.
[30]
Records, p. 33.
[31]
Id. at 34-36.
[32]
Id. at 35.
[33]
Id. at 33.
[34]
Section 8, Article IX of respondent firms Amended Articles of Partnership states: Nothing in this
Agreement shall prevent the Chairman and Managing Partner, from fixing the just compensation of any employee of
the Firm, fully or partially, on the basis of a share in the Partnerships net profits.
[35]
The Manila Banking Corp. v. NLRC, 345 Phil. 105, 125 (1997).
[36]
The Manila Banking Corp. v. NLRC, 345 Phil. 105, 126 (1997).
[37]
Id.
[38]
[39]
Id. at 419.
[40]
Id.
[41]
Id. at 420.
[42]
Sec. 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 not less than the statutory or established minimum
wage shall be presumed to 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.
[43]
[44]
Id. at 641.
[45]
Rollo, p. 103.
[46]
[47]
Cash commutation of leave credits (Daily rate x 23.5): P3,653.85 x 23.5 = P85,865.48