Bisig ng Manggagawa vs Philippine Refining Co.

A Summary of a Decision of the Supreme Court of the Philippines

G.R. No. L-27761 September 30, 1981

Facts of the case:

In 1966, petitioner union Bisig ng Manggagawa ng Philippine Refining Company, Inc. filed with the Court of First Instance of Manila a petition for declaratory relief seeking, among others, the judgement that their Christmas bonus be included as part of their basic pay for the computation of overtime pay. Petitioner based its contention primarily on the ruling of the Supreme Court in NAWASA vs. NAWASA Consolidated Unions, et all G.R. No. L-18938, August 31, 1964, 11 SCRA 766 where it was declared that the 'regular rate' is also deemed to include other incentives and bonuses which employers may receive as part of their regular pay.

Respondent Philippine Refining Company, Inc. on the other hand contended that in their collective bargaining agreement (CBA), the parties never intended to include the employees' Christmas bonus in the computation of the overtime pay, and that it did agree to raise the overtime rate to 50% instead of 25% of the regular base pay precisely on the consideration that it be based only on the regular base pay and should not include Christmas bonus.

Issue:

The issue resolved by the Supreme Court was whether or not, in the interpretation of the provision of the CBA of the parties on overtime pay, the term "regular base pay" should include Christmas bonus, and that in case it should not, whether such interpretation would contravene the principle established in the Nawasa vs Nawasa case.

Ruling:

The Supreme Court ruled that the term "regular base pay" is clear, unequivocal and requires no interpretation. It held that the term means regular basic pay which necessarily EXCLUDES money received in different concepts such as Christmas bonus and other fringe benefits. The Court observed that in framing up their CBA escpecially on the provision regarding overtime pay, it was only the regular base pay that was considered, and the same fact was undeniably known to the petitioner - the very reason, according to the court, why it attempted to have a different provision pertaining to overtime pay which would include Christmas bonus and other benefits. This factual information by itself constrains the petitioner to question the intention of that particular phrase in their CBA pertaining to overtime pay but could only claim that it violated the Nawasa doctrine and insist that it be reformed to conform to said doctrine.

The Supreme Court held that the Nawasa ruling did not limit that the computation of overtime pay to be based solely on the employees' regular wage or salary, which according to law includes bonuses and other benefits. What is important is that the product resulting from the computation must always be equal or higher than the statutory requirement of 25% more than the regular wage. In the case at bar, the formula adopted by the CBA is 50% more than the regular basi pay, which when computer is much higher than what can be arrived at using the statutory formula. Thus, the Court declared that the provisions of the CBA as to the computation of overtime pay has amply complied with what is required by law, and therefore is valid and not in contravention to the Nawasa doctrine.