Boie-Takeda Chemicals, Inc. vs. de la Serna 228 SCRA 329, Dec. 1 , 1993 !ac"s# P.D. No.

851 provides for the Thirteen-Month Pay Law. Under Sec. 1 of said law !all e"ployers are re#$ired to pay all their e"ployees receivin% &asic salary of not "ore than P 1 '''.'' a "onth re%ardless of the nat$re of the e"ploy"ent and s$ch sho$ld &e paid on Dece"&er () of every year.* The +$les and +e%$lations ,"ple"entin% P.D. 851 contained provisions definin% !1--"onth pay* and !&asic salary* and the e"ployers e.e"pted fro" %ivin% it and to who" it is "ade applica&le. S$pple"entary +$les and +e%$lations ,"ple"entin% P.D. 851 were s$&se#$ently iss$ed &y Minister /ple which inter alia set ite"s of co"pensation not incl$ded in the co"p$tation of 1--"onth pay. 0overti"e pay earnin%s and other re"$nerations which are not part of &asic salary shall not &e incl$ded in the co"p$tation of 1-"onth pay1. Pres. 2ora3on 4#$ino pro"$l%ated on 4$%$st 1- 1585 M./. No. (8 containin% a sin%le provision that "odifies P.D. 851 &y re"ovin% the salary ceilin% of P 1 '''.'' a "onth. More than a year later +evised 6$idelines on the ,"ple"entation of the 1--"onth pay law was pro"$l%ated &y the then La&or Secretary 7ran8lin Drilon a"on% other thin%s defined partic$larly what re"$nerative ite"s were and were not incl$ded in the concept of 1--"onth pay and specifically dealt with e"ployees who are paid a fi.ed or %$aranteed wa%e pl$s co""ission or co""issions were incl$ded in the co"p$tation of 1-th "onth pay1 4 ro$tine inspection was cond$cted in the pre"ises of petitioner. 7indin% that petitioner had not &een incl$din% the co""issions earned &y its "edical representatives in the co"p$tation of their 1-"onth pay a Notice of ,nspection +es$lt was served on petitioner to effect restit$tion or correction of !the $nderpay"ent of 1--"onth pay for the years 1589 to 1588 of Medical representatives. Petitioner wrote the La&or Depart"ent contestin% the Notice of ,nspection +es$lts and e.pressin% the view that the co""ission paid to its "edical representatives are not to &e incl$ded in the co"p$tation of the 1--"oth pay since the law and its i"ple"entin% r$les spea8 of +:6UL4+ or ;4S,2 salary and therefore e.cl$de all re"$nerations which are not part of the +:6UL4+ salary. +e%ional Dir. L$na Pie3as iss$ed an order for the pay"ent of $nderpaid 1--"onth pay for the years 1589 158< and 1588. 4 "otion for reconsideration was filed and the then 4ctin% la&or Secretary Dionisio de la Serna affir"ed the order with "odification that the sales co""ission earned of "edical representatives &efore 4$%$st 1- 1585 0effectivity date of M/ (8 and its i"ple"entin% %$idelines1 shall &e e.cl$ded in the co"p$tation of the 1-"onth pay. Si"ilar ro$tine inspection was cond$cted in the pre"ises of Phil. 7$=i >ero. where it was fo$nd there was $nderpay"ent of 1-th "onth pay since co""issions were not incl$ded. ,n their al"ost identically-worded petitioner petitioners thro$%h co""on co$nsel attri&$te %rave a&$se of discretion to respondent la&or officials ?on. Dionisio dela Serna and Undersecretary 2resenciano ;. Tra=ano. ISS$%# @hether or not co""issions are incl$ded in the co"p$tation of 1--"onth pay

&%'D# N/. 2ontrary to respondentAs contention M./ No. (8 did not repeal s$persede or a&ro%ate P.D. 851. 4s "ay &e %leaned fro" the lan%$a%e of M/ No. (8 it "erely !"odified* Section 1 of the decree &y re"ovin% the P 1 '''.'' salary ceilin%. The concept of 1-th Month pay as envisioned defined and i"ple"ented $nder P.D. 851 re"ained $naltered and while entitle"ent to said &enefit was no lon%er li"ited to e"ployees receivin% a "onthly &asic salary of not "ore than P 1 '''.'' said &enefit was and still is to &e co"p$ted on the &asic salary of the e"ployee-recipient as provided $nder P.D. 851. Th$s the interpretation %iven to the ter" !&asic salary* was defined in PD 851 applies e#$ally to !&asic salary* $nder M./. No. (8. The ter" !&asic salary* is to &e $nderstood in its co""on %enerally accepted "eanin% i.e. as a rate of pay for a standard wor8 period e.cl$sive of s$ch additional pay"ents as &on$ses and overti"e. ,n re"$nerative sche"es consists of a fi.ed or %$aranteed wa%e pl$s co""ission the fi.ed or %$aranteed wa%e is patently the !&asic salary* for this is what the e"ployee receives for a standard wor8 period. 2o""issions are %iven for e.tra efforts e.erted in cons$""atin% sales of other related transactions. They are as s$ch additional pay which the S2 has "ade clear do not fro" part of the !&asic salary.* Moreover the S$pre"e 2o$rt said that incl$din% co""issions in the co"p$tation of the 1-th "onth pay the second para%raph of Section 50a1 of the +evised 6$idelines on the ,"ple"entation of the 1-th Month Pay Law $nd$ly e.panded the concept of B&asic salaryB as defined in P.D. 851. ,t is a f$nda"ental r$le that i"ple"entin% r$les cannot add to or detract fro" the provisions of the law it is desi%ned to i"ple"ent. 4d"inistrative re%$lations adopted $nder le%islative a$thority &y a partic$lar depart"ent "$st &e in har"ony with the provisions of the law they are intended to carry into effect. They cannot widen its scope. 4n ad"inistrative a%ency cannot a"end an act of 2on%ress.