Question A.6, Labor Law, 2019 Bar Exam

D, one of the sales representatives of OP, Inc., was receiving a basic pay of ₱50,000.00 a month, plus a 1% overriding commission on his actual sales transactions. In addition, beginning three (3) months ago, or in August 2019, D was able to receive a monthly gas and transportation allowance of ₱5,000.00 despite the lack of any company therefor.

In November 2019, D approached his manager and asked for his gas and transportation allowance for the month. The manager declined his request, saying that the company had decided to discontinue the aforementioned allowance considering the increased costs of its overhead expenses. In response, D argued that OP, Inc.’s removal of the gas and transportation allowance amounted to a violation of the rule on non-diminution of benefits.

Is the argument of D tenable? Explain. (2.5%)

Suggested Answer:

No. Answer

Under the Labor Code, the principle of non-diminution of benefits prohibits the elimination or in any way diminishment of supplements or other employee benefits. Rule

In the case at bar, the monthly gas and transportation allowance are not considered or integrated as part of the regular or basic salary of D. Instead, it is an allowance that is not integrated as part of the wage and thus may be withdrawn by the employer. The said allowance is thus not a benefit and thus not covered by the principle of non-diminution of benefits. Apply

Thus, D’s argument is not tenable. Conclusion

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