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    Davao Fruits Corp Vs Associated Labor Union

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    Maricris Galinggana
    This case involved a dispute between Davao Fruits Corporation and its employees' labor union, the Associated Labor Union, over the exclusion of certain pay items from the computation of the employees' 13th month pay in 1982. While Philippine law excludes those items, the company had included them in 13th month pay computations from 1975 to 1981. The labor arbiter and NLRC ruled in favor of the union, finding that the long-standing practice of including those items constituted a unilateral and voluntary act that could not be reduced or eliminated under Philippine labor law. The Supreme Court affirmed, finding that the favorable practice had ripened into an enforceable benefit for the employees.

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    Davao Fruits Corp Vs Associated Labor Union

    Uploaded by

    Maricris Galinggana
    96 views2 pages
    This case involved a dispute between Davao Fruits Corporation and its employees' labor union, the Associated Labor Union, over the exclusion of certain pay items from the computation of the employees' 13th month pay in 1982. While Philippine law excludes those items, the company had included them in 13th month pay computations from 1975 to 1981. The labor arbiter and NLRC ruled in favor of the union, finding that the long-standing practice of including those items constituted a unilateral and voluntary act that could not be reduced or eliminated under Philippine labor law. The Supreme Court affirmed, finding that the favorable practice had ripened into an enforceable benefit for the employees.

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    Davao Fruits Corp vs Associated Labor Union

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    This case involved a dispute between Davao Fruits Corporation and its employees' labor union, the Associated Labor Union, over the exclusion of certain pay items from the computation of the employees' 13th month pay in 1982. While Philippine law excludes those items, the company had included them in 13th month pay computations from 1975 to 1981. The labor arbiter and NLRC ruled in favor of the union, finding that the long-standing practice of including those items constituted a unilateral and voluntary act that could not be reduced or eliminated under Philippine labor law. The Supreme Court affirmed, finding that the favorable practice had ripened into an enforceable benefit for the employees.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    96 views2 pages

    Davao Fruits Corp Vs Associated Labor Union

    Uploaded by

    Maricris Galinggana
    This case involved a dispute between Davao Fruits Corporation and its employees' labor union, the Associated Labor Union, over the exclusion of certain pay items from the computation of the employees' 13th month pay in 1982. While Philippine law excludes those items, the company had included them in 13th month pay computations from 1975 to 1981. The labor arbiter and NLRC ruled in favor of the union, finding that the long-standing practice of including those items constituted a unilateral and voluntary act that could not be reduced or eliminated under Philippine labor law. The Supreme Court affirmed, finding that the favorable practice had ripened into an enforceable benefit for the employees.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    Davao Fruits Corp vs Associated Labor Union

    Petitioner: DAVAO FRUITS CORPORATION


    Respondents: ASSOCIATED LABOR UNIONS (ALU) for in behalf of all the rank-
    and-file workers/employees of DAVAO FRUITS CORPORATION and NATIONAL
    LABOR RELATIONS COMMISSION
    G.R. No. 85073 August 24, 1993

    Facts:

    Respondent Associated Labor Union (ALU alleged that on the computation of


    the 1982 13th month pay, petitioner excluded therein the equivalent of their sick,
    vacation and maternity leaves, premium for work done on rest days and special
    holidays, and pay for regular holidays which the petitioner used to include since
    1975. Thus, respondent instituted a complaint to recover the 13 th month pay
    differential.

    In its answer, petitioner claimed that it erroneously included items subject of the
    complaint in the computation of the thirteenth month pay for the years prior to 1982.
    According to petitioner, this mistake was discovered only in 1981 after the
    promulgation of the Supreme Court decision pertinent to the issue raised at bar.

    The Labor Arbiter ruled in favor of the ALU and ordered respondent to pay the 1982
    13th month pay differential to all its rank-and-file workers/employees herein
    represented by complainant Union which the NLRC affirmed.

    Issue:

    Whether or not in the computation of the thirteenth month pay given by employers to
    their employees under P.D.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,
    regardless of long-standing company practice.

    Ruling:

    Yes. As early as January 16, 1976, when the Supplemental Rules and Regulations
    was issued, it put to rest all doubts in the computation of the thirteenth month pay.
    Aside from fringe benefits of allowances expressly mentioned in the first
    Implementing Rules such as ECOLA and profit sharing agreements, said
    Supplemental Rules and Regulations are very emphatic in declaring that
    overtime pay, earnings and other renumerations shall be excluded in
    computing the thirteenth month pay.

    In other words, whatever compensation an employee receives for an eight-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, premium for work done on rest days special
    holidays, as well as pay for regular holidays, are likewise excluded in computing the
    basic salary for the purpose of determining the thirteen month pay.

    However, in the case at bar, petitioner had freely, voluntarily and continuously
    included in the computation of its employees' thirteenth month pay from 1975 to
    1981 the payments for sick, vacation and maternity leaves, premiums 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.

    Thus, 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 Section
    10 of the Rules and Regulations Implementing P.D. No. 851, and Article 100 of the
    labor of the Philippines, which prohibit the diminution or elimination by the employer
    of the employees' existing benefits. Thus the ruling of the NLRC is hereby affirmed
    and respondents are entitled to their 13th month pay differentials.

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