Terminal Facilities and Services Corporation v. National Labor Relations Commission
REITERATIONFacts
The Antecedents: Respondent Associated Labor Unions (ALU) filed a complaint against petitioner Terminal Facilities and Services Corporation (TEFASCO) for underpayment of emergency cost of living allowance (ECOLA) for its monthly-paid employees who are members of ALU. ALU alleged that TEFASCO paid its employees P455.00 monthly as ECOLA, which was less than the prescribed P517.08 per month under Wage Order No. 6 and its implementing rules. Procedural History: The Labor Arbiter ruled in favor of ALU, finding that the employees were entitled to the higher ECOLA and ordering TEFASCO to pay the differential. The National Labor Relations Commission (NLRC) affirmed the decision with modification regarding the specific recipients of the allowance. TEFASCO's motion for reconsideration was denied. The Petition: TEFASCO filed a petition for certiorari, seeking to annul the NLRC resolutions, arguing that the NLRC committed a jurisdictional error and that its findings were not supported by substantial evidence. TEFASCO contended that its employees belonged to Group II under the Ministry of Labor and Employment's table of computations, where rest days are considered unworked and unpaid, justifying the use of a 26-day divisor for salary computations.
Issue(s)
Whether the NLRC committed grave abuse of discretion in categorizing the monthly-paid employees under Group III of the table of computations for Wage Order No. 6, despite the petitioner's use of a 26-day divisor for payroll deductions.
Ruling
The petition is dismissed for failure to show a grave abuse of discretion. The questioned resolutions of the National Labor Relations Commission are affirmed.
Ratio Decidendi
On Issue 1: The Court ruled that the NLRC correctly categorized the employees as Group III because, as monthly-paid employees, they are presumed to be compensated for all days of the month including rest days and holidays. In the absence of an express provision in a Collective Bargaining Agreement (CBA) or law to the contrary, this presumption must prevail to ensure full protection to labor. The Court explicitly distinguished the case from Chartered Bank Employees Association v. Ople, noting that in Chartered Bank, the divisor was specifically provided for in the parties' CBA, whereas TEFASCO had no such provision. Furthermore, the Court held that a company practice of using a 26-day divisor to determine deductions for absences does not automatically translate into a legal classification that the rest days are unpaid for purposes of mandatory allowances. Applying the principle in Ditan v. POEA, the Court emphasized that where the law allows two interpretations, the one liberally in favor of the worker must be chosen. Consequently, TEFASCO's failure to prove that the monthly salary excluded rest days meant the employees were entitled to the higher allowance differential of P62.08 per month.
Main Doctrine
The company practice of using a divisor of 26 days to determine the daily wage for deductions in case of absences does not preclude the application of the presumption that monthly paid employees are considered paid even on rest days when determining their monthly cost of living allowance under Wage Order No. 6, absent any contrary provision in a collective bargaining agreement.