Case Digest: Atok-Big Wedge Mining Co., Inc., v. Atok-Big Wedge Mutual Benefit Association, G.R. No. L-7349, March 3, 1953

Labor Law | Art. 100 Bonus

Facts:

Atok-Big Wedge Mutual Benefit Association submitted demands to Atok-Big Wedge Mining Co., Inc., including a wage increase of P0.50, sick and vacation leave commutation, various privileges free medical care, medicine, and hospitalization, closed shop rights, and no dismissal without just cause.

Some demands were granted, and hearings were held for the rejected demands, resulting in fixing the minimum wage for laborers at P3.20 effective from September 4, 1950.

The petitioner argued that as the Court if Industrial Relations found, the laborer and his family at least need the amount of P2.58 for food, and this should be the basis for the determination of his wage, not what he actually spends.

Issues:

WoN the Atok-Big Wedge Mining Co., Inc. is correct that the basis for the determination of the wage should be P2.58. NO

WoN the efficiency bonus paid the laborer should have been included in his (minimum) wage, in the same manner as the value of living quarters.  NO

Held:

The respondent court found that P2.58 is the minimum amount actually needed by the laborer and his family. That does not mean that it is his actual expense. A person's needs increase as his means increase. This is true not only as to food but as to everything else — education, clothing, entertainment, etc. The law guarantees the laborer a fair and just wage. The minimum must be fair and just. The "minimum wage" can by no means imply only the actual minimum. Some margin or leeway must be provided, over and above the minimum, to take care of contingencies such as increase of prices of commodities and desirable improvement in his mode of living. Certainly, the amount of P0.22 a day (difference between P2.80 fixed and P2.58 actual) is not excessive for this purpose. That the P3 minimum wage fixed in the law is still far below what is considered a fair and just minimum is shown by the fact that this amount is only for the year after the law takes effect, as thereafter the law fixes it at P4. Neither may it be correctly contended that the demand for increase is due to an alleged pernicious practice. Frequent demands for increase are indicative of a healthy spirit of wakefulness to the demands of a progressing and an increasingly more expensive world. We, therefore, find no reason or ground for disturbing the finding contained in the decision fixing the amount of P3.20 as the minimum wage.

Whether or not bonus forms part of wages depends upon the circumstances or condition for its payment. If it is an additional compensation which the employer promised and agreed to give without any conditions imposed for its payment, such as success of business or greater production or output, then it is part of the wage. But if it is paid only if profits are realized or a certain amount of productivity achieved, it cannot be considered part of the wages. In the case at bar, it is not payable to all but to laborers only. It is also paid on the basis of actual production or actual work accomplished. If the desired goal of production is not obtained or the amount of actual work accomplished, the bonus does not accrue. It is evidence that under the circumstances it is paid only when the labor becomes more efficient or more productive. It is only an inducement for efficiency, a prize therefor, not a part of the wage.

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