Case Digests

Boie Takeda Chemicals Inc vs Dela Serna

March 16, 2015

Boie

This is the case of Boie Takeda Chemicals Inc vs Dela Serna. This tackles about the kinds of administrative regulation; with GR 92174. This is about the kinds of administrative regulation.

Boie Takeda Chemicals Inc vs Dela Serna

Kinds of Administrative Regulation | GR 92174

Facts:

A routine inspection was conducted on May 2, 1989 in the premises of petitioner Boie-Takeda Chemicals Inc. by Labor and Development officer Reynaldo B. Ramos under Inspection Authority No. 4-209-89. It was found out that Boie-Takeda had not been including the commissions earned by its medical representatives in the computation of their 13th month pay.

Ramos served a Notice of Inspection Results on Boie-Takeda through its president (Mr. Benito Araneta) requiring Boie-Takeda that within 10 calendar days from notice to effect restitution or correction of “the underpayment of 13th month pay for the years 1986, 1987 and 1988 of med reps in the amount of Php 558, 810.89. Boie-Tekeda wrote the Labor Department contesting the Notice of Inspection Results and expressing that the commission paid to the med reps are not included in the computation of the 13th month pay. It also pointed out that if there were no sales made under the effort of a particular rep, there’s no commission during the period when no sale was transacted so commissions are not and cannot be legally defined as regular in nature.

A motion for reconsideration was filed by Boie-Takeda. Acting Labor Secretary De La Serna affirmed the order on July 24, 1989 with modification that the commissions earned by the med reps before August 13, 1989, the effectivity date of Memorandum Order No. 28 and its implementing guidelines, shall be excluded in the computation of the 13th month pay.

Issue:

Whether the commissions earned by the med reps should be included in the computation of the 13th month pay

Ruling:

In including the commissions in the computation of the 13th month pay, the second paragraph of section 5 (a) of the Revised Guidelines on the Implementation of the 13th Month Pay Law unduly expanded the concept of “basic salary” as defined in Presidential Decree 851. It is a fundamental rule that implementing cannot add to or detract from the provisions of the law. It is designed to implement. Administrative regulations adopted under legislative authority by a particular department must be in harmony with the provisions of the law. They are intended to carry into effect. Their scope cannot be widened. An administrative agency cannot amend an act of Congress.

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