(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:
- Staff allowance/managers allowance to those who live in rented houses near the mill site which ceases whenever a vacancy occurs in the company’s free housing facilities.
- 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.
- 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 latter’s 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.
CASE EATER 