COMMISSIONS, TAX REBATES, or PROFIT SHARING GIVEN as FORMS OF ENCOURAGEMENT FALL WITHIN THE AMBIT OF THE GENERAL TERM “COMMISSIONS” AND WAGES

Toyota Pasig, Inc. vs. De Peralta
G.R. No. 213488. November 7, 2016

Facts:

Toyota Pasig hired Peralta as a cashier initially. Eventually, she worked her way up to the position of Insurance Sales Executive (ISE). However, things turned sour when her husband, also Toyota’s employee and the President of the Toyota Shaw-Pasig Workers Union -Automotive Industry Workers Alliance (TSPWU-AIWA), organized a collective bargaining unit through a certification election.

According to Peralta, Toyota suddenly dismissed from service the officials/directors of TSPWU-AIWA, including her husband. Thereafter, Toyota allegedly started harassing Peralta for her husband’s active involvement in TSPWU-AIW A, which resulted to the issuance of a Notice to Explain accusing her of “having committed various acts” relative to the processing of insurance of three (3) units as “outside transactions” and claiming commissions therefor, instead of considering the said transactions as “new business accounts” under the dealership’s marketing department.

Accordingly, Peralta was preventively suspended because of such charge. On February 3, 2012, she received a Notice of Termination, which prompted her to file the instant complaint, where she also prayed for the payment of her earned substantial commissions, tax rebates, and other benefits dating back from July 2011 to January 2012, amounting to P617,248.08.14

In their defense, Toyota maintained that Peralta was dismissed from service for just cause and with due process. They explained that Peralta was charged and proven to have committed acts of dishonesty and falsification by claiming commissions for new business accounts which should have been duly credited to the dealership’s marketing department.

They further averred that Peralta’s claims for commissions, tax rebates, and other benefits were unfounded and without documentation and validation.

LA Ruling:

The Labor Arbiter (LA) dismissed the complaint for lack of merit. It found that Peralta herself admitted through her letter-explanation to the Notice to Explain that she indeed processed the insurance of units from Toyota’s own dealership, and as a result, received commissions which were rightly attributable to the dealership’s marketing department not being “outside transactions.”

According to the LA, Peralta’s acts constituted dishonesty which is tantamount to serious misconduct, a just cause for dismissal. Anent Peralta’s claims for unpaid commissions, the LA found no basis to grant the same, considering that the documents submitted in support thereof were mere computations which are insufficient proof of her entitlement thereto. Aggrieved, Peralta appealed to the NLRC.

NLRC Ruling:

The NLRC affirmed the LA ruling with modification finding Toyota liable to Peralta in the amount of P617,248.08 representing the latter’s unpaid commissions, tax rebate for achieved monthly targets, salary deductions, salary for the month of January 2012, and success share/profit sharing.

The NLRC agreed with the LA’s finding that Peralta’s act of taking credit in the form of commissions on accounts rightly attributable to the dealership’s marketing department constituted serious misconduct, which justified her termination from employment. As such, Peralta is not entitled to backwages, separation pay, damages, and attorney’s fees.

Dissatisfied, the parties separately elevated the case to the CA via petitions for certiorari. In their respective petitions before the CA, Peralta assailed the legality of her dismissal, while Toyota questioned NLRC’s award of the amount of P617,248.08 in Peralta’s favor.

CA Ruling:

The CA dismissed the consolidated petitions and, accordingly, affirmed the NLRC ruling in toto. It held that the NLRC did not gravely abuse its discretion in declaring Peralta to have been dismissed for just cause as such finding conforms with the facts and the law on the matter.

Similarly, it held that no grave abuse of discretion may be ascribed to the NLRC in awarding Peralta her other monetary claims, considering that Toyota failed to discharge its burden of proving that Peralta was not entitled to the same. Both parties moved for reconsideration, which were however, denied. Hence, the petition.

Peralta filed a separate petition before the Supreme Court (SC). In a Resolution, the SC denied Peralta’s separate petition for her failure to show that the CA committed reversible error in upholding the legality of her dismissal. Said ruling had then lapsed into finality.

Issue/s:

Whether or not Peralta is entitled to the amount of P617,248.08 representing unpaid commissions, tax rebate for achieved monthly targets, salary deductions, salary, and success share/profit sharing.

Whether or not said monetary claim partakes the nature of wages where the burden to prove payment lies with the employer.

SC Ruling:

The SC held that “Wage” paid to any employee shall mean the remuneration of earnings, however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece, or commission basis xxx.

The aforesaid provision explicitly includes commissions as part of wages. In Iran vs. NLRC, the Court thoroughly explained the wisdom behind such inclusion as follows:

“While commissions are, indeed, incentives or forms of encouragement to inspire employees to put a little more industry on the jobs particularly assigned to them, still these commissions are direct remunerations for services rendered.

The nature of the work of a salesman and the reason for such type of remuneration for services rendered demonstrate clearly that commissions are part of a salesman’s wage or salary. This, however, does not detract from the character of such commissions as part of the salary or wage paid to each of its salesmen for rendering services to the corporation.”

Learn How to Properly Compute Employee Compensation and Benefits

In this case, Peralta’s monetary claims, such as commissions, tax rebates for achieved monthly targets, and success share/profit sharing, are given to her as incentives or forms of encouragement in order for her to put extra effort in performing her duties as an ISE.

Clearly, such claims fall within the ambit of the general term “commissions” which in tum, fall within the definition of wages pursuant to prevailing law and jurisprudence. Thus, Peralta’s allegation of nonpayment of such monetary benefits places the burden on the employer, i.e., Toyota, to prove with a reasonable degree of certainty that it paid said benefits and that the employee, i.e., Peralta, actually received such payment or that the employee was not entitled thereto.

It is well-settled that the failure of employers to submit the necessary documents that are in their possession gives rise to the presumption that the presentation thereof is prejudicial to its cause.