Philippine Duplicators Inc. vs.

NLRC
GR 110068 February, 15,
Facts : Case differentiates between Productivity Bonuses vs. Commissions. P r o d u c t i v i t y b o n u s e s a r e g e n e r a l l y t i e d
t o t h e p r o d u c t i v i t y o r p r o f i t ge n e r a t i o n o f t h e e m p l o ye r c o r p o r a t i o n . P r o d u c t i v i t y b o n u s e s a r e n o t
directly dependent on the extent an individual employee exerts himself. A p r o d u c t i v i t y b o n u s i s s o m e t h i n g e x t r a f o r
w h i c h n o s p e c i f i c a d d i t i o n a l services are rendered by any particular employee and hence not legally demandable,
absent a contractual undertaking to pay it. Sales commissions are intimately related to or directly proportional to the e x t e n t o r
e n e r gy o f a n e m p l o ye e ' s e n d e a v o u r s . C o m m i s s i o n s a r e p a i d u p o n t h e s p e c i f i c r e s u l t s a c h i e v e d b y a
s a l e s m a n - e m p l o y e e . I t i s a percentage of the sales closed by a salesman and operates as an integral part of such salesman's
basic pay.
ISSUE:1 . W O N Th e c o m m i s s i o n s r e c e i v e d b y t h e s a l e s m e n w e r e p a r t o f t h e wages to be considered for their 13th
month pay. - Yes2.
WON Productivity bonus shall be considered as part of wages in 13 thmonth pay No
HELD:
1 . Th e c o m m i s s i o n s w e r e a n i n t e g r a l p a r t o f t h e p a y o f t h e w o r k e r s , c o n s i d e r i n g t h a t t h e f i x e d w a ge w a s
o n l y 3 0 % o f w h a t t h e y w e r e normally receiving.2 . P r o d u c t i v i t y b o n u s e s a r e g e n e r a l l y t i e d t o t h e
p r o d u c t i v i t y , o r c a p a c i t y f o r r e v e n u e p r o d u c t i o n , o f a c o r p o r a t i o n ; s u c h b o n u s e s closely resemble profitsharing payments and have no clear director n e c e s s a r y r e l a t i o n t o t h e a m o u n t o f w o r k a c t u a l l y d o n e b y e a c h
individual employee. More generally, a bonus is an amount granted and paid
ex gratia to the employee; its payment constitutes an acto f e n l i g h t e n e d g e n e r o s i t y a n d s e l f - i n t e r e s t o n t h e p a r t
o f t h e employer, rather than as a demandable or enforceable obligation. S i n c e p r o d u c t i v i t y b o n u s i s n o t
d e m a n d a b l e , t h e n i t c a n n o t b e considered part of basic salary when time comes to compute 13 th month pay.
A d d i t i o n a l p a ym e n t s m a d e t o e m p l o ye e s , t o t h e e x t e n t t h e y p a r t a k e o f t h e n a t u r e o f p r o f i t - s h a r i n g
p a ym e n t s , a r e p r o p e r l y excluded from the ambit of the term "basic salary" for purposes of computing the 13th
month pay due to employees. Such additional payments are not "commissions" within the meaning of the second paragraph of
Section 5 (a) of the Revised Guidelines Implementing 13th Month Pay. The Supplementary Rules and
Regulations Implementing P.D. No.851 subsequently issued by former Labor Minister Ople
sought to clarify the scope of items excluded in the computation of the 13th month pay ;viz .:S e c . 4 . O v e r t i m e
p a y , e a r n i n gs a n d o t h e r r e m u n e r a t i o n s which are not part of the basic salary shall not be included in the computation of the
13th month pay.