Davao Fruits Corporation vs Associated Labor Unions, G.R. No. 85073, August 24, 1993; 225 SCRA 562

(Labor Standards – Fringe benefits not included in 13th month pay)

Facts: Respondent ALU for and in behalf of all the rank-and-file workers and employees of petitioner sought to recover from the latter the 13th month pay differential for 1982 of said employees, equivalent to their sick, vacation and maternity leaves, premium for work done on rest days and special holidays, and pay for regular holidays which petitioner, allegedly in disregard of company practice since 1975, excluded from the computation of the 13th month pay for 1982.

Issue: WON in the computation of the 13th month pay under PD No. 851, payments for sick, vacation  and maternity leaves, premiums for work done on rest days and special holidays, and pay for regular holidays may be excluded in the computation and payment thereof.

Held: Yes. Basic salary does not merely exclude the benefits expressly mentioned but all payments which may be in the form of fringe benefits or allowances.

Sec. 4 of the Supplementary Rules and Regulations Implementing PD No. 851 provides that “overtime pay, earnings and other remunerations which are not part of the basic salary shall not be included in the computation of the 13th month pay.

Whatever compensation an employee receives for an 8 hour work daily or the daily wage rate is the basic salary. Any compensation or remuneration other than the daily wage rate is excluded. It follows therefore, that payments for sick, vacation and maternity leaves, premiums for work done on rest days and special holidays, as well as pay for regular holidays, are likewise excluded in computing the basic salary for the purpose of determining the 13th month pay.

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