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Millares Vs NLRC Digest

The case involved 116 employees who were terminated from Paper Industries Corporation of the Philippines (PICOP) due to financial difficulties. The employees believed their separation pay should have included certain allowances in addition to their basic monthly pay. PICOP provided staff/managers allowance for housing, transportation allowance for vehicle expenses, and Bislig allowance due to the hostile environment. The labor arbiter ruled the allowances formed part of the employees' wage since they were customarily furnished and regularly received. However, the National Labor Relations Commission determined the allowances were contingency-based and did not form part of the salary base used to compute separation pay, as they were temporarily rather than regularly received and ceased when certain conditions no longer applied. The

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107 views2 pages

Millares Vs NLRC Digest

The case involved 116 employees who were terminated from Paper Industries Corporation of the Philippines (PICOP) due to financial difficulties. The employees believed their separation pay should have included certain allowances in addition to their basic monthly pay. PICOP provided staff/managers allowance for housing, transportation allowance for vehicle expenses, and Bislig allowance due to the hostile environment. The labor arbiter ruled the allowances formed part of the employees' wage since they were customarily furnished and regularly received. However, the National Labor Relations Commission determined the allowances were contingency-based and did not form part of the salary base used to compute separation pay, as they were temporarily rather than regularly received and ceased when certain conditions no longer applied. The

Uploaded by

Mama Mia
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Millares vs.

National Labor Relations Commission, 305 SCRA 500 (1999)


Posted by Pius Morados on November 15, 2011
(Labor Standards wages, customary facilities)
Facts: Article 97, par. (f), of the Labor Code defined wage as the remuneration or
earnings, however designated, capable of being expressed in terms of money, whether
fixed or ascertained on a time, task, piece, or commission basis, or other method of
calculating the same, which is payable by an employer to an employee under a written
or unwritten contract of employment for work done or to be done, or for services
rendered or to be rendered and includes the fair and reasonable value, as determined
by the Secretary of Labor, of board, lodging, or other facilities customarily furnished by
the employer to the employee.
116 employees of Paper Industries Corporation of the Philippines (PICOP) in Bislig,
Surigao del Sur were terminated under a retrenchment program as a solution to a
major financial setback. Aside from their one month basic pay, petitioners believe that
the allowances they allegedly regularly received on a monthly basis should have also
been included in the computation of their separation.
PICOP grants the following allowances:
1. Staff allowance/managers allowance to those who live in rented houses near the
mill site which ceases whenever a vacancy occurs in the companys free housing
facilities.
2. Transportation allowance in the form of advances for actual transportation
expenses subject to liquidation is given to key officers and managers who use their
own vehicles in the performance of their duties. This privilege is discontinued when
the conditions no longer obtain.
3. Bislig allowance is given to managers and officers on account of the hostile
environment prevailing therein. Once the recipient is transferred elsewhere, the
allowance ceases.
Applying Art. 97, par (f) of the Labor Code which defines wage, the Executive Labor
Arbiter opined that the subject allowances, being customarily furnished by respondent
PICOP and regularly received by petitioners, formed part of the latters wage.
However, the NLRC decreed that the allowances did not form part of the salary base
used in computing separation pay since the same were contingency-based.
Issue: Whether or not the allowances in question are considered facilities customarily
furnished.
Held: No. Customary is founded on long established and constant practice connoting
regularity. The receipt of allowance on a monthly basis does not ipso facto characterize
it as regular and forming part of salary because the nature of the grant is a factor worth
considering.
The subject allowances were temporarily, not regularly received by petitioners because
once the conditions for the availment ceased to exist, the allowance reached the cutoff
point. The petitioners continuous enjoyment of the disputed allowances was based on
contingencies the occurrence of which wrote finis to such enjoyment.

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