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Minimum Wage and Bonus Dispute Ruling

The petitioner mining company demanded various concessions from the respondent mutual benefit association including increased wages and other benefits. Some demands were granted and others were rejected, leading to hearings. The court ruled that the minimum wage should be P3.20 per day and that efficiency bonuses should not be included in the minimum wage. The petitioner argued that the minimum wage should be based on the minimum amount needed for food, but the court found that needs increase with means and the minimum wage must provide a fair margin over basic needs. The court also ruled that the efficiency bonus was an inducement for productivity rather than part of the basic wage.

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95 views1 page

Minimum Wage and Bonus Dispute Ruling

The petitioner mining company demanded various concessions from the respondent mutual benefit association including increased wages and other benefits. Some demands were granted and others were rejected, leading to hearings. The court ruled that the minimum wage should be P3.20 per day and that efficiency bonuses should not be included in the minimum wage. The petitioner argued that the minimum wage should be based on the minimum amount needed for food, but the court found that needs increase with means and the minimum wage must provide a fair margin over basic needs. The court also ruled that the efficiency bonus was an inducement for productivity rather than part of the basic wage.

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Pia
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ATOK-BIG WEDGE MINING CO., INC., petitioner, vs.

ATOK-BIG WEDGE MUTUAL BENEFIT


ASSOCIATION, respondent. G.R. No. L-5276 March 3, 1953

 Petitioner Union demanded for various concession, among which were (a) an increase of P0.50 in
wages, (b) commutation of sick and vacation leave if not enjoyed during the year, (c) various
privileges, such as free medical care, medicine, and hospitalization, and others
 Some demands were granted, others were rejected, hence the need for hearings
 The Court rendered a decision where it fixed the minimum wage of the laborers at P3.20 declaring
that additional compensation representing efficiency bonus should not be included as part of the
wage
 Petitioner Company contends that since the court found that the laborer and his family at least
needs P2.58 for food, this should be the basis for the determination of his wage, not what he
actually spends. It also contends that the bonus given to the laborer should have been included in
his minimum wage.

ISSUE + RULING: Whether the minimum amount actually needed by the laborer and his family for
food should be the basis of the minimum wage

NO. 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.

ISSUE + RULING: Whether the bonus should be included in the minimum wage

NO. In this case, it cannot be part of the minimum wage because it is only an inducement for efficiency.

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.

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