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G.R. No.

110068 November 11, 1993 Petitioner: PHILIPPINE DUPLICATORS, INC Respondents: NATIONAL LABOR RELATIONS COMMISSION and PHILIPPINE DUPLICATORS EMPLOYEES UNION - TUPAS Ponente: FELICIANO, J.: ISSUE: What is the appropriate mode of computation of the 13th month pay of the employees who receive a fixed or guaranteed salary plus sales commissions? STATCON PRINCIPLE: the principle that the contemporaneous construction of a statute by the executive officers of the government, whose duty it is to execute it, is entitled to great respect, and should ordinarily control and construction of the statute by the courts, is so firmly embedded in our jurisprudence that no authorities need be cited to support it.

FACTS: Petitioner Philippine Duplicators, Inc. is a domestic corporation engaged in the distribution of foreign-made copying machines and related consumables . In petitioner's employ are salesmen who are paid a fixed or guaranteed salary plus commissions, which commissions are computed on the selling price of the duplicating machines sold by the respective salesmen. P.D. No. 851, promulgated on 16 December 1975 , prescribed payment of 13th month pay in the following terms: Sec. 1. All employers are hereby required to pay all their employees receiving a basic salary of not more than P1,000.00 a month, regardless of the nature of the employment, a 13th month pay not later than December 24 of every year. The Rules and Regulations Implementing P.D. No. 851 , issued by the Secretary of Labor and Employment on 22 December 1975, defined the following basic terms: (a) 13th month pay - shall mean one-twelfth (1/12) of the basic salary of an employee within a calendar year virtual law library (b) Basic salary-include all remunerations or earnings paid by an employer to an employee for service rendered, but may not include cost of living allowances granted pursuant to President Decree No. 525 or Letter of Instructions No. 174, profit-sharing payments, and all allowances and monetary benefits which are not considered or integrated as part of the regular or basic salary of the employee at the time of the promulgation of the Decree on December 16, 1975. Private respondent union, for and on behalf of its member-salesmen, asked petitioner corporation for payment of 13th month pay computed on the basis of the salesmen's fixed or guaranteed wages plus commissions.

Director Augusto G. Sanchez of the Bureau of Working Conditions, MOLE, rendered an opinion to respondent union declaring applicable the provisions of Explanatory Bulletin No. 86-12, Item No. 5 (a): . . . . Since the salesmen of Philippine Duplicators are receiving a fixed basic wage plus commission on sales and not purely on commission basis, they are entitled to receive 13th month pay provided they worked at least one (1) month during the calendar year. May we add at this point that in computing such 13th month pay, the total commissions of said salesmen for the calendar year shall be divided by twelve (12).

Petitioner appealed to the National Labor Relations Commission ("NLRC"), formulating the basic issue in terms of whether or not an employer is liable to give his employee a separate 13th month pay on commissions independently of, aside from and in addition to, 13th month pay on basic wage." And maintained that the commissions earned by its salesmen fell outside the scope of the term "basic salary" for purposes of computing the 13th month pay of employees


Petitioner corporation has curiously chosen to ignore, while citing Item No. 4 (a) of the same Guidelines, reads as follows: 5. 13th Month Pay for Certain Types of Employees. (a) Employees Paid by Results - Employees who are paid on piece work basis are by law entitled to the 13th month pay. Employees who are paid a fixed or guaranteed wage plus commission are also entitled to the mandated 13th month pay, based on their total earnings during the calendar year, i.e. on both their fixed or guaranteed wage and commission.

The 13th month pay of employees paid by fixed or guaranteed wage plus sales commission must be equivalent to one-twelfth (1/12) of the total earnings (fixed or guaranteed wage-cum-sales commissions) during the calendar year. Petitioner has excluded from the computation of the 13th month pay the sales commissions earned by its individual salesmen.

WHEREFORE, petitioner failed to show any grave abuse of discretion on the part of the National Labor Relations Commission in rendering its decision dated 17 November 1992, the petition for Certiorari is hereby DISMISSED for lack of merit. Costs against the petitioner.