SECOND DIVISION
SEVILLA
TRADING
COMPANY,
Petitioner,
G.R.
No.
152456
April 28, 2004 -versus-
A.V.A. TOMAS
E.
SEMANA,SEVILLA
TRADING
WORKERS UNION–SUPER,
Respondents.
D E C I
S I
O N
PUNO,
J.:chanroblesvirtuallawlibrary
On appeal
is the decision[1]
of the Court of Appeals in CA-G.R. SP No. 63086 dated 27 November 2001
sustaining the Decision[2]
of Accredited Voluntary Arbitrator Tomas E. Semana dated 13 November
2000,
as well as its subsequent Resolution[3]
dated 06 March 2002 denying petitioner’s Motion for Reconsideration.
The facts
of the case
are as follows:
For two to
three years
prior to 1999, petitioner Sevilla Trading Company (Sevilla Trading, for
short), a domestic corporation engaged in trading business, organized
and
existing under Philippine laws, added to the base figure, in its
computation
of the 13th-month pay of its employees, the amount of other benefits
received
by the employees which are beyond the basic pay. These benefits
included:
(a)
Overtime premium for regular overtime, legal and special holidays;chanrobles virtual law library
(b)
Legal holiday pay, premium pay for special holidays;chanrobles virtual law library
(c)
Night premium;chanrobles virtual law library
(d)
Bereavement leave pay;chanrobles virtual law library
(e)
Union leave pay;
(f)
Maternity leave pay;
(g)
Paternity leave pay;
(h)
Company vacation and sick leave pay; and
(i)
Cash conversion of unused company vacation and sick leave.
Petitioner claimed that
it entrusted the preparation of the payroll to its office staff,
including
the computation and payment of the 13th-month pay and other
benefits.
When it changed its person in charge of the payroll in the process of
computerizing
its payroll, and after audit was conducted, it allegedly discovered the
error of including non-basic pay or other benefits in the base figure
used
in the computation of the 13th-month pay of its employees. It
cited
the Rules and Regulations Implementing P.D. No. 851 (13th-Month Pay
Law),
effective December 22, 1975, Sec. 2(b) which stated that:
“Basic
salary” shall
include all remunerations or earnings paid by an employer to an
employee
for services rendered but may not include cost-of-living allowances
granted
pursuant to P.D. No. 525 or Letter of Instruction 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.cralaw:red
Petitioner
then effected
a change in the computation of the thirteenth month pay, as follows:
13th-month
pay = net basic pay
12 months
where:
net basic pay =
gross
pay – (non-basic pay or other benefits)chanrobles virtual law library
Now excluded from
the
base figure used in the computation of the thirteenth month pay are the
following:chanrobles virtual law library
a)
Overtime premium for regular overtime, legal and special holidays;chanrobles virtual law library
b)
Legal holiday pay, premium pay for special holidays;chanrobles virtual law library
c)
Night premium;chanrobles virtual law library
d)
Bereavement leave pay;chanrobles virtual law library
e)
Union leave pay;chanrobles virtual law library
f)
Maternity leave pay;chanrobles virtual law library
g)
Paternity leave pay;chanrobles virtual law library
h)
Company vacation and sick leave pay; andchanrobles virtual law library
i)
Cash conversion of unused vacation/sick leave.
Hence, the new
computation
reduced the employees’ thirteenth month pay. The daily piece-rate
workers represented by private respondent Sevilla Trading Workers Union
– SUPER (Union, for short), a duly organized and registered union,
through
the Grievance Machinery in their Collective Bargaining Agreement,
contested
the new computation and reduction of their thirteenth month pay.
The parties failed to resolve the issue.
On March
24, 2000, the
parties submitted the issue of “whether or not the exclusion of leaves
and other related benefits in the computation of 13th-month pay is
valid”
to respondent Accredited Voluntary Arbitrator Tomas E. Semana (A.V.A.
Semana,
for short) of the National Conciliation and Mediation Board, for
consideration
and resolution.cralaw:red
The Union
alleged that
petitioner violated the rule prohibiting the elimination or diminution
of employees’ benefits as provided for in Art. 100 of the Labor Code,
as
amended. They claimed that paid leaves, like sick leave, vacation
leave, paternity leave, union leave, bereavement leave, holiday pay and
other leaves with pay in the CBA should be included in the base figure
in the computation of their 13th-month pay.cralaw:red
On the
other hand, petitioner
insisted that the computation of the 13th-month pay is based on basic
salary,
excluding benefits such as leaves with pay, as per P.D. No. 851, as
amended.
It maintained that, in adjusting its computation of the 13th-month pay,
it merely rectified the mistake its personnel committed in the previous
years.cralaw:red
A.V.A.
Semana decided
in favor of the Union. The dispositive portion of his decision
reads
as follows:
WHEREFORE,
premises considered, this Voluntary Arbitrator hereby declared that:
1.
The company is hereby ordered to include sick leave and vacation leave,
paternity leave, union leave, bereavement leave and other leave with
pay
in the CBA, premium for work done on rest days and special holidays,
and
pay for regular holidays in the computation of the 13th-month pay to
all
covered and entitled employees;
2.
The company is hereby ordered to pay corresponding backwages to all
covered
and entitled employees arising from the exclusion of said benefits in
the
computation of 13th-month pay for the year 1999.chanrobles virtual law library
Petitioner received a
copy
of the Decision of the Arbitrator on December 20, 2000. It filed
before the Court of Appeals, a “Manifestation and Motion for Time to
File
Petition for Certiorari” on January 19, 2001. A month later, on
February
19, 2001, it filed its Petition for Certiorari under Rule 65 of the
1997
Rules of Civil Procedure for the nullification of the Decision of the
Arbitrator.
In addition to its earlier allegations, petitioner claimed that
assuming
the old computation will be upheld, the reversal to the old computation
can only be made to the extent of including non-basic benefits actually
included by petitioner in the base figure in the computation of their
13th-month
pay in the prior years. It must exclude those non-basic benefits
which, in the first place, were not included in the original
computation.
The appellate court denied due course to, and dismissed the petition.
Hence, this
appeal.
Petitioner Sevilla Trading enumerates the grounds of its appeal, as
follows:
1.
THE DECISION OF THE
RESPONDENT COURT TO REVERT TO THE OLD COMPUTATION OF THE 13TH-MONTH PAY
ON THE BASIS THAT THE OLD COMPUTATION HAD RIPENED INTO PRACTICE IS
WITHOUT
LEGAL BASIS.
2.
IF SUCH BE THE CASE,
COMPANIES HAVE NO MEANS TO CORRECT ERRORS IN COMPUTATION WHICH WILL
CAUSE
GRAVE AND IRREPARABLE DAMAGE TO EMPLOYERS.[4]
First, we
uphold the
Court of Appeals in ruling that the proper remedy from the adverse
decision
of the arbitrator is a petition for review under Rule 43 of the 1997
Rules
of Civil Procedure, not a petition for certiorari under Rule 65.
Section 1 of Rule 43 states:
RULE 43
Appeals from the
Court
of Tax Appeals and Quasi-Judicial Agencies to the Court of Appeals
SECTION 1.
Scope. — This Rule shall apply to appeals from judgments or final
orders
of the Court of Tax Appeals and from awards, judgments, final orders or
resolutions of or authorized by any quasi-judicial agency in the
exercise
of its quasi-judicial functions. Among these agencies are the Civil
Service
Commission, Central Board of Assessment Appeals, Securities and
Exchange
Commission, Office of the President, Land Registration Authority,
Social
Security Commission, Civil Aeronautics Board, Bureau of Patents,
Trademarks
and Technology Transfer, National Electrification Administration,
Energy
Regulatory Board, National Telecommunications Commission, Department of
Agrarian Reform under Republic Act No. 6657, Government Service
Insurance
System, Employees Compensation Commission, Agricultural Inventions
Board,
Insurance Commission, Philippine Atomic Energy Commission, Board of
Investments,
Construction Industry Arbitration Commission, and voluntary arbitrators
authorized by law. [Emphasis supplied]
It is elementary that
the
special civil action of certiorari under Rule 65 is not, and cannot be
a substitute for an appeal, where the latter remedy is available, as it
was in this case. Petitioner Sevilla Trading failed to file an
appeal
within the fifteen-day reglementary period from its notice of the
adverse
decision of A.V.A. Semana. It received a copy of the decision of
A.V.A. Semana on December 20, 2000, and should have filed its appeal
under
Rule 43 of the 1997 Rules of Civil Procedure on or before January 4,
2001.
Instead, petitioner filed on January 19, 2001 a “Manifestation and
Motion
for Time to File Petition for Certiorari,” and on February 19, 2001, it
filed a petition for certiorari under Rule 65 of the 1997 Rules of
Civil
Procedure. Clearly, petitioner Sevilla Trading had a remedy of
appeal
but failed to use it.
A special
civil action
under Rule 65 of the Rules of Court will not be a cure for failure to
timely
file a petition for review on certiorari under Rule 45 (Rule 43, in the
case at bar) of the Rules of Court. Rule 65 is an independent
action
that cannot be availed of as a substitute for the lost remedy of an
ordinary
appeal, including that under Rule 45 (Rule 43, in the case at bar),
especially
if such loss or lapse was occasioned by one’s own neglect or error in
the
choice of remedies.[5]
Thus, the
decision of
A.V.A. Semana had become final and executory when petitioner Sevilla
Trading
filed its petition for certiorari on February 19, 2001. More
particularly,
the decision of A.V.A. Semana became final and executory upon the lapse
of the fifteen-day reglementary period to appeal, or on January 5,
2001.
Hence, the Court of Appeals is correct in holding that it no longer had
appellate jurisdiction to alter, or much less, nullify the decision of
A.V.A. Semana.cralaw:red
Even
assuming that the
present petition for certiorari under Rule 65 of the 1997 Rules of
Civil
Procedure is a proper action, we still find no grave abuse of
discretion
amounting to lack or excess of jurisdiction committed by A.V.A.
Semana.
“Grave abuse of discretion” has been interpreted to mean “such
capricious
and whimsical exercise of judgment as is equivalent to lack of
jurisdiction,
or, in other words where the power is exercised in an arbitrary or
despotic
manner by reason of passion or personal hostility, and it must be so
patent
and gross as to amount to an evasion of positive duty or to a virtual
refusal
to perform the duty enjoined or to act at all in contemplation of law.”[6]
We find nothing of that sort in the case at bar.cralaw:red
On the
contrary, we
find the decision of A.V.A. Semana to be sound, valid, and in accord
with
law and jurisprudence. A.V.A. Semana is correct in holding that
petitioner’s
stance of mistake or error in the computation of the thirteenth month
pay
is unmeritorious. Petitioner’s submission of financial statements
every year requires the services of a certified public accountant to
audit
its finances. It is quite impossible to suggest that they have
discovered
the alleged error in the payroll only in 1999. This implies that
in previous years it does not know its cost of labor and
operations.
This is merely basic cost accounting. Also, petitioner failed to
adduce any other relevant evidence to support its contention.
Aside
from its bare claim of mistake or error in the computation of the
thirteenth
month pay, petitioner merely appended to its petition a copy of the
1997-2002
Collective Bargaining Agreement and an alleged “corrected” computation
of the thirteenth month pay. There was no explanation whatsoever
why its inclusion of non-basic benefits in the base figure in the
computation
of their 13th-month pay in the prior years was made by mistake, despite
the clarity of statute and jurisprudence at that time.chanrobles virtual law library
The instant
case needs
to be distinguished from Globe Mackay Cable and Radio Corp. vs. NLRC,[7]
which petitioner Sevilla Trading invokes. In that case, this
Court
decided on the proper computation of the cost-of-living allowance
(COLA)
for monthly-paid employees. Petitioner Corporation, pursuant to
Wage
Order No. 6 (effective 30 October 1984), increased the COLA of its
monthly-paid
employees by multiplying the P3.00 daily COLA by 22 days, which is the
number of working days in the company. The Union disagreed with
the
computation, claiming that the daily COLA rate of P3.00 should be
multiplied
by 30 days, which has been the practice of the company for several
years.
We upheld the contention of the petitioner corporation. To answer
the Union’s contention of company practice, we ruled that:
Payment in
full by Petitioner
Corporation of the COLA before the execution of the CBA in 1982 and in
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 unilaterally withdrawn by petitioner. To be
considered
as such, it should have been practiced over a long period of time, and
must be shown to have been consistent and deliberate. The test of
long practice has been enunciated thus:
Respondent
Company agreed
to continue giving holiday pay knowing fully well that said employees
are
not covered by the law requiring payment of holiday pay.” (Oceanic
Pharmacal
Employees Union [FFW] vs. Inciong, 94 SCRA 270 [1979])chanrobles virtual law library
Moreover,
before Wage
Order No. 4, there was lack of administrative guidelines for the
implementation
of the Wage Orders. It was only when the Rules Implementing Wage
Order No. 4 were issued on 21 May 1984 that a formula for the
conversion
of the daily allowance to its monthly equivalent was laid down.cralaw:red
Absent
clear administrative
guidelines, Petitioner Corporation cannot be faulted for erroneous
application
of the law.cralaw:red
In the
above quoted
case, the grant by the employer of benefits through an erroneous
application
of the law due to absence of clear administrative guidelines is not
considered
a voluntary act which cannot be unilaterally discontinued. Such
is
not the case now. In the case at bar, the Court of Appeals is
correct
when it pointed out that as early as 1981, this Court has held in San
Miguel
Corporation vs. Inciong[8]
that:
Under
Presidential Decree
851 and its implementing rules, the basic salary of an employee is used
as the basis in the determination of his 13th-month pay. Any
compensations
or remunerations which are deemed not part of the basic pay is excluded
as basis in the computation of the mandatory bonus.cralaw:red
Under the
Rules and
Regulations Implementing Presidential Decree 851, the following
compensations
are deemed not part of the basic salary:
a)
Cost-of-living allowances
granted pursuant to Presidential Decree 525 and Letter of Instruction
No.
174;chanrobles virtual law library
b) Profit
sharing payments;chanrobles virtual law library
c) All
allowances and
monetary benefits which are not considered or integrated as part of the
regular basic salary of the employee at the time of the promulgation of
the Decree on December 16, 1975.cralaw:red
Under a
later set of
Supplementary Rules and Regulations Implementing Presidential Decree
851
issued by the then Labor Secretary Blas Ople, overtime pay, earnings
and
other remunerations are excluded as part of the basic salary and in the
computation of the 13th-month pay.cralaw:red
The
exclusion of cost-of-living
allowances under Presidential Decree 525 and Letter of Instruction No.
174 and profit sharing payments indicate the intention to strip basic
salary
of other payments which are properly considered as “fringe”
benefits.
Likewise, the catch-all exclusionary phrase “all allowances and
monetary
benefits which are not considered or integrated as part of the basic
salary”
shows also the intention to strip basic salary of any and all additions
which may be in the form of allowances or “fringe” benefits.cralaw:red
Moreover,
the Supplementary
Rules and Regulations Implementing Presidential Decree 851 is even more
empathic in declaring that earnings and other remunerations which are
not
part of the basic salary shall not be included in the computation of
the
13th-month pay.cralaw:red
While doubt
may have
been created by the prior Rules and Regulations Implementing
Presidential
Decree 851 which defines basic salary to include all remunerations or
earnings
paid by an employer to an employee, this cloud is dissipated in the
later
and more controlling Supplementary Rules and Regulations which
categorically,
exclude from the definition of basic salary earnings and other
remunerations
paid by employer to an employee. A cursory perusal of the two sets of
Rules
indicates that what has hitherto been the subject of a broad inclusion
is now a subject of broad exclusion. The Supplementary Rules and
Regulations
cure the seeming tendency of the former rules to include all
remunerations
and earnings within the definition of basic salary.cralaw:red
The
all-embracing phrase
“earnings and other remunerations” which are deemed not part of the
basic
salary includes within its meaning payments for sick, vacation, or
maternity
leaves, premium for works performed on rest days and special holidays,
pay for regular holidays and night differentials. As such they
are
deemed not part of the basic salary and shall not be considered in the
computation of the 13th-month pay. If they were not so excluded,
it is hard to find any “earnings and other remunerations” expressly
excluded
in the computation of the 13th-month pay. Then the exclusionary
provision
would prove to be idle and with no purpose.cralaw:red
In the
light of the
clear ruling of this Court, there is, thus no reason for any mistake in
the construction or application of the law. When petitioner
Sevilla
Trading still included over the years non-basic benefits of its
employees,
such as maternity leave pay, cash equivalent of unused vacation and
sick
leave, among others in the computation of the 13th-month pay, this may
only be construed as a voluntary act on its part. Putting the
blame
on the petitioner’s payroll personnel is inexcusable.cralaw:red
In Davao
Fruits Corporation
vs. Associated Labor Unions, we likewise held that:[9]
The
“Supplementary Rules
and Regulations Implementing P.D. No. 851” which put to rest all doubts
in the computation of the thirteenth month pay, was issued by the
Secretary
of Labor as early as January 16, 1976, barely one month after the
effectivity
of P.D. No. 851 and its Implementing Rules. And yet, petitioner
computed
and paid the thirteenth month pay, without excluding the subject items
therein until 1981. Petitioner continued its practice in December
1981, after promulgation of the aforequoted San Miguel decision on
February
24, 1981, when petitioner purportedly “discovered” its mistake.cralaw:red
From 1975
to 1981, petitioner
had freely, voluntarily and continuously included in the computation of
its employees’ thirteenth month pay, without the payments for sick,
vacation
and maternity leave, premium for work done on rest days and special
holidays,
and pay for regular holidays. The considerable length of time the
questioned items had been included by petitioner indicates a unilateral
and voluntary act on its part, sufficient in itself to negate any claim
of mistake.cralaw:red
A company
practice favorable
to the employees had indeed been established and the payments made
pursuant
thereto, ripened into benefits enjoyed by them. And any benefit
and
supplement being enjoyed by the employees cannot be reduced,
diminished,
discontinued or eliminated by the employer, by virtue of Sec. 10 of the
Rules and Regulations Implementing P.D. No. 851, and Art. 100 of the
Labor
Code of the Philippines which prohibit the diminution or elimination by
the employer of the employees’ existing benefits. [Tiangco vs.
Leogardo,
Jr., 122 SCRA 267 (1983)]chanrobles virtual law library
With regard
to the length
of time the company practice should have been exercised to constitute
voluntary
employer practice which cannot be unilaterally withdrawn by the
employer,
we hold that jurisprudence has not laid down any rule requiring a
specific
minimum number of years. In the above quoted case of Davao Fruits
Corporation vs. Associated Labor Unions,[10]
the company practice lasted for six (6) years. In another case,
Davao
Integrated Port Stevedoring Services vs. Abarquez,[11]
the employer, for three (3) years and nine (9) months, approved the
commutation
to cash of the unenjoyed portion of the sick leave with pay benefits of
its intermittent workers. While in Tiangco vs. Leogardo, Jr.,[12]
the employer carried on the practice of giving a fixed monthly
emergency
allowance from November 1976 to February 1980, or three (3) years and
four
(4) months. In all these cases, this Court held that the grant of
these benefits has ripened into company practice or policy which cannot
be peremptorily withdrawn. In the case at bar, petitioner Sevilla
Trading kept the practice of including non-basic benefits such as paid
leaves for unused sick leave and vacation leave in the computation of
their
13th-month pay for at least two (2) years. This, we rule likewise
constitutes voluntary employer practice which cannot be unilaterally
withdrawn
by the employer without violating Art. 100 of the Labor Code:
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 being enjoyed at the time of promulgation of this
Code.cralaw:red
IN VIEW
WHEREOF, the
petition is DENIED. The Decision of the Court of Appeals in
CA-G.R.
SP No. 63086 dated 27 November 2001 and its Resolution dated 06 March
2002
are hereby AFFIRMED.cralaw:red
SO ORDERED.cralaw:red
Quisumbing, Austria-Martinez,
and Tinga, JJ., concur.
Callejo, Sr., J., no
part.chanrobles virtual law library
____________________________
Endnotes:
[1]
CA Rollo, pp. 124-134.
[2]
CA Rollo, pp. 31-43.
[3]
Rollo, p. 141.
[4]
Rollo, p. 22.chanrobles virtual law library
[5]
National Irrigation Administration vs. Court of Appeals, 318 SCRA 255,
265 (1999).
[6]
Concurring Opinion of Justice Angelina Sandoval-Gutierrez in the
consolidated
cases of Tecson vs. COMELEC, G.R. No. 161434, Velez vs. Poe, G.R. No.
161634,
and Fornier vs. COMELEC, G.R. No. 161824, 03 March 2004, citing Benito
vs. COMELEC, 349 SCRA 705 (2001).
[7]
163 SCRA 71 (1988).chanrobles virtual law library
[8]
103 SCRA 139 (1981).
[9]
225 SCRA 562 (1993).chanrobles virtual law library
[10]
Ibid.chanrobles virtual law library
[11]
220 SCRA 197 (1993).
[12]
122 SCRA 267 (1983).
chan
robles virtual law library |