compensation and benefits gerald william c. paragas 14 april 2012

COMPENSATION AND BENEFITS

GERALD WILLIAM C. PARAGAS

14 APRIL 2012

MANAGING COMPENSATION

• According to Sherman (1996), the compensation program must be tailored to the needs of an organization and its employees. Below are the common goals of compensation policy:

• To reward employees’ past performance.

• To remain competitive in the labor market.

• To maintain salary equity among employees


• To motivate employees’ future performance.

• To maintain the budget.

• To attract new employees.

• To reduce unnecessary turnover.


• To actualize these goals stated above, Sherman (1996) enumerated sample policies of compensation:

• The rate of pay within the organization and whether it is to be above, below, or at the prevailing community rate.

• The ability of the pay program to gain employee acceptance while motivating employees to perform to the best of their abilities.


• The pay level at which employees may be recruited and the pay differential between new and more senior employees.


MANAGERIAL LEVEL

Job Grade 3

FSO I FSO II FSO III FSO IV

54,088 50,334 46,848 43,612

3,754 3,486 3,236

0.07 0.07 0.07


• The pay levels needed to facilitate the achievement of a sound financial position in relation to the products or services offered.


• The Pay-For-Performance Standard:

• This standard refers to the manager’s role to tie at least some reward to employee effort and performance. Without this standard, motivation to perform with greater effort will be low, resulting in higher wage costs to the organization. (Sherman, 1996)


• This standard is exhibited through merit pay, cash bonuses, incentive pay and gain sharing. Sherman (1996)


• The Motivating Value of Compensation:

• Sherman (1996) notes that pay is based on the equity theory wherein pay should be equitable to the contributions of the employee.


• Pay Equity:

• This refers to the employee’s perception that compensation received is equal to the value of the work performed. Sherman (1996)


Example:

• Sherman (1996) notes that E.A. Savinelli, CEO of Aquatec Chemical International Inc., states that, “An important part of creating an environment in which teamwork is effective, is a pay policy that reflects the true value of work to the overall organization, and helps all members of the team respect one another’s contribution and role.”


• Sherman (1996) also notes that pay equity must be both internally and externally equitable:

• Employees must believe that wage rates for jobs within the organization approximate the job’s worth to the organization.

• The employer’s wage rates must correspond closely to prevailing market rates for the employee’s occupation.


• Pay Expectancy:

• Sherman (1996) based its pay expectancy on the expectancy theory of motivation wherein one’s level of motivation is based on the attractiveness of the reward sought.


High Effort

High Performance

Valued Monetary Rewards

Pay Satisfaction

Expectancy Linkage

Value Linkage

PAY EXPECTANCY CONCEPT


• In this regard, the high effort will lead to high performance (expectancy) and high performance will lead to monetary rewards that are appreciated (valued).


• Pay Secrecy:

• Sherman (1996) notes that pay schedule can be created in the organization in secrecy. There are various effects of pay secrecy. To wit:

• Generates distrust in the compensation system.• Reduces employee motivation.• Inhibits organizational effectiveness.


• Reasons for pay secrecy:

• Managers are given greater freedom on

compensation management.• Avoid grievances about one’s pay.• Covers up inequities existing within the pay

structure.• Misleads employees to believe that there is no

direct relationship between pay and performance.


• The concept of pay for Noe (2010):

• Pay has a large impact on employee attitudes and behaviors. It influences the kind of employees who are attracted to the organization, and it can be a powerful tool for aligning current employees’ interests with those of the broader organization.


• Second, pay or employee compensation is a significant cost which shows the following table that constitutes 22 percent of the revenues of various industries:


INDUSTRY 25TH 50TH 75TH

Hospitals/health care

43% 46% 49%

Manufacturing 22% 27% 34% Insurance/health care

6% 8% 11%

All industries 13% 22% 32%


• Pay is considered a sign of status and success. Employees attach great importance to pay decisions when they evaluate their relationship with the organization. Therefore, pay decisions must be carefully managed and communicated.


• Key components of pay structure:

Pay structure is the relative pay of different jobs (job

structure) and how much they are paid (pay level).

Pay level is the average pay, including wages,

salaries and bonuses of jobs in an organization.

Job structure is the relative pay of jobs in an

organization.


• Equity Theory and Fairness:

• Noe (2010) states that equity theory’s main

implication for managing employee compensation is that employees evaluate their pay by comparing with what others get paid, and their work attitudes and behaviors are influenced by such comparisons.


• Example: A scenario of being well paid in relative terms (as compared to others):

• Alex Rodriguez signed a contract with the Texas Rangers baseball team. A provision in that contract for the 2001 to 2004 season states that his base compensation must be at least US$2 Million higher than that of other major league players. However, a second provision states that Alex Rodriguez can void a contract after 2008 season unless his base compensation is again US$1 Million higher than that of his other co-players.


• Another scenario is the employees’ perceptions wherein employees may have different information or make different comparisons than management.

Example:

• Toyota set a goal of transferring the rates of its wages from

the U.S. auto industry to the prevailing wages in the state where each plant is located. This goal has a different interpretation for the employees and the management.


• Developing pay levels:

• Noe (2010) has two competitions to which pay to employees are based. To wit:

• Product market competition – An organization

that has higher labor costs than its product market competitors will need to charge higher average prices for products of similar qualities.


• Example: If labor costs 30 percent of revenues at Company A and B, but company A has labor costs that are 20 percent higher than Company B, we would expect that company A will charge the following:

• 0.30 X 0.20 = 0.06 or 6%

• Hence, company A will charge product prices 6

percent higher than company B.


• Labor market competition – is the amount an organization needs to pay to compete against other companies to hire similar employees.

• Example: Even if a computer company offers the newly graduated electrical engineers the same pay as other computer manufacturers, if automobile manufacturers and other labor market competitors offer salaries of US$5,000 higher, then that computer company will not be able to hire qualified electrical engineers.


• Employees as a Resource:

• Organizations should consider their

employees not just as cost but as resource in which the organization has invested and from which it expects valuable returns.


• Although controlling costs directly affects an organization’s ability to compete in the product market, the organization’s competitive position can be compromised if costs are kept low at the expense of employee productivity and quality.


• Justification: Having high labor costs than your competitors is not necessarily bad if you also have the best and most effective workforce, one that produces more products of better quality.


• Deciding What to Pay:

• Noe (2010) states that there is a strategic decision of whether to pay above or below the market average.

• The advantage of paying above the market average

is the ability to attract and retain the top talent available, which can translate into a highly effective and productive workforce.


• Justification: Based on the Efficiency Wage Theory which states that wages influence worker productivity.

MANAGING COMPENSATION• Example: Organizations that emphasize decentralized

decision making may need higher caliber employees.

• Example: Higher pay may also be warranted if the organization has difficulties observing and monitoring its employees’ performance.

• Hence, the theory is that employees who are paid more

than they would be paid elsewhere will be reluctant to shirk because they wish to retain their good jobs.

MANAGING COMPENSATION•

Market Pay Surveys:

• Benchmarking is comparing an organization’s practices against those of the competition.

• There are several points to be answered:

• Who are the key labor market and product market

competitors?• Which jobs are included in the survey? The job content must

be sufficiently similar.

MANAGING COMPENSATION• Key Jobs and Non Key Jobs:

• Key Jobs refer to benchmark jobs, used in pay surveys, that have

relatively stable content and are common to many organizations.

• Example: Engineering jobs.

• Non Key Jobs refer to jobs that are unique to organizations and that

cannot be directly valued or compared through the use of market surveys.

• Example: Fung Shui consultancies.


• Job Evaluation:

• Refers to an administrative procedure used to measure internal job worth.

• A job evaluation system composed of

compensable factors. These factors are the characteristics of jobs that an organization values and chooses to pay for. To wit:


• Job complexity• Working conditions• Required education• Required experience • Responsibility


• The Point - Factor System:

• Job evaluators often apply a weighting scheme to account for the differing importance of the compensable factors to the organization, Noe (2010). The author picked three compensable factors stated below and provided weights for each factor.


Three-Factor Job Evaluation System (Compensable Factors) JOB TITLE EXPERIENCE EDUCATION COMPLEXITY TOTAL

Computer Operator

40 30 40 110

Computer Programmer

40 50 60 155

Systems Analyst

65 60 85 210


• Sherman (1996) created a table called Wage Apportionment for Each Factor by multiplying the weights indicated in the abovementioned table of the Three - Factor Job Evaluation System with the respective monetary values. To wit:


Wage Apportionment for Each Factor JOB TITLE EXPERIENCE US$ EDUCATION US$ COMPLEXITY US$ TOTAL

Computer Operator

40 2 30 3 40 4 330

Computer Programmer

40 2 50 6 60 8 860

Systems Analyst

65 8 60 24 85 32 4,680


• Developing a Pay Structure:

• Job-Based Method is the traditional approach for classifying jobs based on their worth in the organization. Under this method, there are 5 steps in developing a compensation based structure as shown here:


Job Analysis

Job Description Preparation

Job Evaluation

Creation of Job Levels/Grades

Determining Pay Rates for Each Level

Adjusting Pay Structure

MANAGING COMPENSATION• Job Analysis:

• Specific activities performed • Responsibilities and accountabilities • Expected results or outcome of the activities • Reporting relationships• Nature and extent of supervision over the incumbent• Physical conditions of the work area where the job is performed• Physical demands of the job• Work location• Relationships of this job to other jobs in the unit

MANAGING COMPENSATION• A job description usually consists of the following:

• Job title• Statement of duties and responsibilities to be performed by the incumbent• Description of the relation of the job to the other jobs in the unit or

department• Reporting relationships• Summary of skills, knowledge and abilities, experience, education or

training required to successfully perform the job also known as job specifications

• Working conditions• Other data unique to this job (job number, salary grade, position number,

department number etc.)


• Job Evaluation:

• The main objective of the job evaluation process is to establish pay differentials among jobs in an organization. This process will help HR establish the value or worth of the job in the organization, its position in the hierarchy of jobs, and its appropriate pay level.


• Job Evaluation Methods:

• Non-quantitative methods, wherein a job as a whole is compared to other jobs to determine its worth in the organization. The non-quantitative methods are:

• Ranking Method• Position Classification Method

MANAGING COMPENSATION• Job Evaluation Methods:

• Quantitative Methods, wherein a job is broken down into two distinct factors, assigned values and weights and evaluated in a previously set standard rating scale. The quantitative methods are:

• Point system• Factor comparison system


• Non-Quantitative Methods:• Ranking Method:

JOB TITLE RANK Data Processing Supervisor Accountant

5 4

Senior Account Clerk 3 Secretary 2 Clerk Typist

1

MANAGING COMPENSATION• Non-Quantitative Methods:

• Position Classification Method:

Job Grade

Description (Skills, efforts requires, responsibilities)

Positions in this Grade

1 At least a high school graduate; No experience required; Semi-skilled work

Janitor, Laborer Messenger, Utility Aide, Elevator Operator

2 Bachelor’s degree holder; No experience required; Computer literate; performs word processing; Answer phones

Transcriptionist/Transcribers Secretaries, Clerks Word Processors

3 Administrative Assistants Jr. Accountants, Purchasers

4 HR Officers, Systems Manager, Operations Manager, Administrative Officer

MANAGING COMPENSATION• Quantitative Methods:• The Point System:

Compensable Factors COMPENSABLE FACTORS POINTS WEIGHTS POINT RANGE

Knowledge required for the position, e.g., education, experience 2,000 40% 50 - 2000Accountability for equipment, plant, materials, capital, budget 800 16% 50 - 800Supervisory function 800 16% 25 - 800Complexity of task 600 12% 25 - 600Contacts (internal and external) 400 8% 15 - 400Physical demands 200 4% 10 - 200Working Environment 200 4% 10 - 200TOTAL POINTS 5,000 100%

MANAGING COMPENSATION• Quantitative Methods:

• The Factor Comparison Method:

Knowledge Levels Point RangeLevel 1 50 - 200Level 2 201- 450Level 3 451 - 1,000Level 4 1,000 - 2,000


SAMPLE SALARY GRADE TABLE Points Job Grade Position Minimum Midpoint Maximum

185-250 1 FSSE 12,880 14,857 17,099 250-320 2 FSSO 19,658 31,635 43,612 320-525 3 FSO 43,612 48,850 54,088 525-730 4 FAA 43,569 45,208 46,848 730-950 5 CARMIN 44,180 51,156 58,132

950-1200 6 CM 62,488 65,216 67,944


• Person-Based Approach also known as the pay-for-knowledge approach which uses the package skills or competencies possessed by employees in creating a pay structure and in deciding their pay. It bases compensation on what employees can do – the knowledge, experience, training skills levels, or competencies they bring to the organization, and not the nature of the positions they fill.


• Person-Based Approach :• Skill-Based Pay Method:

LEVEL/DEPTH

OF SKILLSPROCESS

OPERATORQUALITY

CONTROL PACKAGING MAINTENANCEAdvanced 1-3 2-3 3-3 4-3Intermediate 1-2 2-2 3-2 4-2Entry 1-1 2-1 3-1 4-1


• Person-Based Approach :• Competency-Based Pay Method:

Competency Levels Level 1 (lowest level) - ProficientLevel 2 - AccomplishedLevel 3 - AdvancedLevel 4 (highest level) - Expert

MANAGING BENEFITSEmployee Benefits Objectives: (Diamante and Tan, 2007)

• These benefits are perks (employee benefits) and perquisites (something gained from employment for services rendered) given to select group of employees.

• These benefits are no longer considered as fringe benefits since these benefits constitute a big percentage of payroll.

• These benefits are developed for the employees’ welfare.

MANAGING BENEFITS

• These benefits are important tools to attract and retain the required talent in the organization.

• These benefits create incentives that could boost employee morale.

• The benefits may be mandated by law, granted by the employer voluntarily or as a result of a collective bargaining agreement (negotiated benefits).

MANAGING BENEFITS

• Employee Benefits Planning:

• Value of the employee benefits to the employer and to the employee.

• Fair and equitable administration of benefits.

• Financial capability of the company.

MANAGING BENEFITS

• Eligibility.

• Employee awareness of the cost of benefits.

• Employee participation.

MANAGING BENEFITS• Statutory Benefits:

• Section 2 of Republic Act No.8282 otherwise known as the Social Security Law mandates that the Philippine Government, as a matter of policy, extends social security protection to workers and their beneficiaries against the hazards of disability, sickness, maternity, old age, death and other contingencies during one’s employment which may result in loss of income or financial burden.

MANAGING BENEFITS

• Government Service Insurance System (GSIS) provides benefits for all public sector employees.

• Social Security System (SSS) provides

benefits for all private sector employees.

MANAGING BENEFITS• Below are the benefits provided under the Social Security and

Employees’ Compensation Program:

• Sickness benefits – is a daily cash allowance paid for the number of days an employee is unable to work due to sickness or injury.

• Partial or total permanent disability – maybe in the form of a monthly pension or lump sum.

• Maternity benefits – is granted to a pregnant female employee with a paid leave of absence of 60 days if normal delivery or 78 days if caesarian section (CS) delivery.

• Death benefits – is a cash benefit in monthly pension or lump sum paid to the beneficiaries of a deceased employee.

MANAGING BENEFITS• Below are the benefits provided under the Social Security and

Employees’ Compensation Program:

• Funeral benefits – is cash given to whoever pays for the burial expenses of the deceased employee or pensioner.

• Retirement benefits – is a cash benefit either in monthly pension or lump sum paid to the employee who is unable to work due to old age.

• Medical services, appliances and supplies, rehabilitation and vocational services provided to employees who suffer work related sickness or injury.

• Salary/policy loans to cover the short term credit needs of employees.

MANAGING BENEFITS• National Health Insurance Program (PhilHealth)

under R.A. Act No.7875 covers employees from the public and private sectors. The benefits of PhilHealth are as follows:

• Room and board• Services of health care professionals• Diagnostic, laboratory and other medical

examination services• Use of surgical or medical equipment and facilities

MANAGING BENEFITS• National Health Insurance Program (PhilHealth)

under R.A. Act No.7875 covers employees from the public and private sectors. The benefits of PhilHealth are as follows:

• Prescription drugs and biologicals• Personal preventive services• Emergency and transfer services

MANAGING BENEFITS

• The Labor Code of the Philippines (LCP) has many benefits as follows:

• Holiday pay• Premium pay• Night shift pay• Overtime pay

MANAGING BENEFITS

• The Labor Code of the Philippines (LCP) has many benefits as follows:

• 5 days incentive leave after one (1) year of service• Service charges or tips• Separation pay of one month or one half month salary for every

year of service owing to any authorized causes of termination of employees under Article 283 of LCP which states that, “The employer may also terminate the employment of any employee due to the installation of labor saving devices, redundancy, retrenchment to prevent any losses…”

MANAGING BENEFITS

• The Pag – Ibig (The Home Development Mutual Fund) has the following benefits:

• Provident savings benefits• Multi – purpose loans for minor home

improvement, livelihood, medical and educational needs, purchase of appliance, furniture and other needs

• Housing loan

MANAGING BENEFITS

• Retirement benefits under R.A. No.7641 for all employees regardless of position, designation or status and manner of receiving wages. The retirement age is 65 and 60 for optional retirement age. The minimum retirement pay is equivalent to one half month salary for every year of service.

MANAGING BENEFITS

• Presidential Decree 851 provides the benefit of 13th month pay.

• R.A. No.8187 or Paternity Leave Act of 1996 provides the benefit of seven (7) days paternity leave for the first four (4) deliveries of the legitimate spouse with whom the male employee is cohabiting.

MANAGING BENEFITS

• R.A. No. 8972 or Solo Parents Welfare Act of 2000 provides solo parental leave of seven (7) days. Example: A woman who gives birth as a result of rape and other crimes against chastity without a final conviction of the offender. Other benefits of this Act are as follows:

MANAGING BENEFITS

• R.A. No. 8972 or Solo Parents Welfare Act of 2000 provides:

• Livelihood projects• Flexible work schedules• Protection against work discrimination• Educational benefits• Housing benefits• Medical assistance

MANAGING BENEFITS• Non – Statutory Benefits: • Binghay (1998) study provides the following benefits:• • Medical and dental benefits. Example: DFA under PhilCare (HMO) and DelamLife (Major medical

insurance) • Life / accident insurance• Leave privileges such as:

– Sick leave– Vacation leave– Bereavement leave– Emergency leave– Wedding leave– Sabbatical leave– Court appearance leave

• Study leave

MANAGING BENEFITS• Non – Statutory Benefits:

• Binghay (1998) study provides the following benefits:

• Scholarship grants and training• Bonuses • Service or loyalty awards (cash incentives)• Rice or meal benefits• Grocery packages• Bus services (shuttle services to workplace)• Clothing allowance or free uniform

MANAGING BENEFITS• Non – Statutory Benefits:

• Binghay (1998) study provides the following benefits:• Day care center for employees’ children• Company car• Gas allowance• Transportation and representation allowances• Schools and colleges grant their employees discounts on

the tuition fees of their children’s education

MANAGING BENEFITS

• Negotiated Benefits:

• Union leave• Profit sharing

CASE: ARTICLE 94

G.R. No. L-65482 December 1, 1987JOSE RIZAL COLLEGE, petitioner,

vs.

NATIONAL LABOR RELATIONS COMMISSION AND NATIONAL ALLIANCE OF TEACHERS/OFFICE WORKERS, respondents.

CASE: ARTICLE 94

Background of the Case:

• Petitioner (JRC) is a non-stock, non-profit educational institution

duly organized and existing under the laws of the Philippines. • It has three groups of employees categorized as follows:

(a) personnel on monthly basis, who receive their monthly salary uniformly throughout the year, irrespective of the actual number of working days in a month without deduction for holidays;

(b) personnel on daily basis who are paid on actual days worked and they receive un-worked holiday pay and

(c) collegiate faculty who are paid on the basis of student contract hour. • Before the start of the semester they sign contracts with the college

undertaking to meet their classes as per schedule.

CASE: ARTICLE 94


• Due to non-receipt of their corresponding holiday pay, as claimed,

from 1975 to 1977, private respondent National Alliance of Teachers and Office Workers (NATOW) in behalf of the faculty and personnel of Jose Rizal College filed with the Ministry of Labor a complaint against the college for said alleged non-payment of holiday pay, docketed as Case No. R04-10-81-72.

• Case was certified for compulsory arbitration where it was docketed as RB-IV-23037-78 due to the failure of the parties to settle their differences on conciliation.

CASE: ARTICLE 94

Issues: • Are the school faculty who according to their contracts are paid

per lecture hour, entitled to un-worked holiday pay?• Faculty members, who are paid on an hourly basis, are not entitled to

holiday pay according to the labor arbiter• The Solicitor General argues that under Article 94 of the Labor Code (P.D.

No. 442 as amended), holiday pay applies to all employees except those in retail and service establishments. To deprive therefore employees paid at an hourly rate of un-worked holiday pay is contrary to the policy considerations underlying such presidential enactment, and its precursor, the Blue Sunday Law (Republic Act No. 946) apart from the constitutional mandate to grant greater rights to labor (Constitution, Article II, Section 9).

CASE: ARTICLE 94

Issues:

• National Labor Relations Commission in its decision

promulgated on June 2, 1982, ruled that the purpose of a holiday pay is obvious; • that is to prevent diminution of the monthly

income of the workers on account of work interruptions;

• although the worker is forced to take a rest, he earns what he should earn, that is his holiday pay.

CASE: ARTICLE 94

Issues:

Art. 94. Right to holiday pay — (a) Every worker shall be paid his regular daily wage during regular holidays, except in retail and service establishments regularly employing less than ten (10) workers; (b) The employer may require an employee to work on any holiday but such employee shall be paid a compensation equivalent to twice his regular rate; ... "

CASE: ARTICLE 94

Issues:

• JRC alleges that it was deprived of due process as it was not

notified of the appeal made to the NLRC against the decision of the labor arbiter.

• However, records show petitioner JRC was amply heard and represented in the instant proceedings. It submitted its position paper before the Labor Arbiter and the NLRC and even filed a motion for reconsideration of the decision of the latter, as well as an "Urgent Motion for Hearing En Banc" (Rollo, p. 175). Thus, petitioner's claim of lack of due process is unfounded.

CASE: ARTICLE 94Decision:

National Labor Relations Commission decision on the case:(a) exempting petitioner from paying hourly paid faculty members their pay for regular holidays, whether the same be during the regular semesters of the school year or during semestral, Christmas, or Holy Week vacations; (b) ordering petitioner to pay said faculty members their regular hourly rate on days declared as special holidays or for some reason classes are called off or shortened for the hours they are supposed to have taught, whether extensions of class days be ordered or not; in case of extensions said faculty members shall likewise be paid their hourly rates should they teach during said extensions.

CASE: ARTICLE 88

G.R. No. L-32019 October 26, 1973NATIONAL WATERWORKS AND SEWERAGE AUTHORITY, petitioner,

vs.

NWSA CONSOLIDATED UNIONS, SIMEON CHONGCO and COURT OF INDUSTRIAL RELATIONS, respondents.

CASE: ARTICLE 88


• On October 23, 1967, Simeon Chongco filed with respondent Court of

Industrial Relations a "Motion to Extend Benefits" docketed as Case No. 19-IPA(4), alleging that he was employed as Administrative Assistant of the National Waterworks and Sewerage Authority (hereinafter referred to as the NWSA),

• At the time of filing of his motion, he was Chief of the Recreation Section, with a salary of P4,860.00 per annum, with free quarters; that from January, 1955 to June, 1965, he rendered overtime, night time, Sunday, legal holiday and basic time services, but he was not paid in full for the said services despite the decision of the Supreme Court in G.R. No. L-18938, entitled "National Waterworks and Sewerage Authority vs. NWSA Consolidated Unions, et al.," promulgated on August 31, 1964 (11 SCRA 766);

•

CASE: ARTICLE 88


• Pursuant to said decision, he was also entitled to an adjustment of his basic

weekly salary beginning July 1, 1957, equivalent to seven-fifths (7/5) of his overall weekly wage prior to said date, but such adjustment was not effected by the NWSA.

• NWSA alleged the following:• that the claim for overtime compensation accruing for more than three (3)

years prior to the filing of the motion had already prescribed; • that Chongco had no written authority from the NWSA's General Manager

to render overtime, night time, Sunday and legal holiday services; • and that Republic Act No. 1880 does not apply to employees like Chongco

who receive salaries on a monthly basis.

CASE: ARTICLE 88

Issues:

• Unpaid overtime and night time service of Simeon Chongco• On March 14, 1968, the Court Examiner submitted to the

court a report which found Chongco entitled to the following benefits: • overtime differential — P1,023.69; • Sunday and legal holiday differential — P8,219.53; • and basic time differential — P4,773.44, • in the aggregate amount of P14,016.66.

CASE: ARTICLE 88

Issues:

However Chongco objected to the order on the following grounds:(a) The Court Examiner's report did not include salary adjustment,

which should have been effected on July 1, 1957, as required by the court's Order of January 16, 1961, which was affirmed by the Supreme Court in its decision in G.R. No. L-18938.

(b) In computing his overtime and other fringe benefits, the Court Examiner failed to take into account the money value of the lodging furnished free by the NWSA to him in the nature of quarters.

CASE: ARTICLE 88

Issues:

While NWSA’s objections to the report were as follows: (a) The alleged overtime and night time services covered in the report

were not duly authorized in writing by the NWSA General Manager, and any service rendered in excess of eight (8) hours a day or at night time was voluntary and did not redound to the NWSA's benefit.

(b) Chongco is not entitled to additional compensation for work rendered on Sundays and legal holidays.

(c) The Examining Division arrogated unto itself judicial powers when it included in the report additional compensation for services rendered within eight (8) hours a day, which was not an award in the main case.

CASE: ARTICLE 88

Issues:

•On June 7, 1968, Chongco filed a Petition to Admit Amended Motion to Extend Benefits so as to include in his claim additional compensation for work rendered on Saturdays after the effectivity of Republic Act No. 1880.•In an opposition filed by it on June 20, 1968, the NWSA denied the material averments of Chongco’s petition and argued that there is no law authorizing payment of additional compensation for work done on Saturday, and that payment for Saturday work was not among the awards made in the main case.

CASE: ARTICLE 88Decision:

After trial, Associate Judge Joaquin M. Salvador of respondent court issued an Order on February 25, 1970, the dispositive portion:

(a) The portion of the motion to extend benefits (including the amended motion of June 7, 1968) relative to the claims for payment of the following:

(1) overtime, (2) Sundays & legal holidays(3) Saturdays after June 30, 1957, and (4) basic time services is hereby granted;

(b) The Report of the Court Examiner dated March 14, 1968 covering the amount of P14,016.66 is hereby approved; and

(c) Respondent is hereby ordered to deposit with the Clerk of Court within fifteen (15) days from receipt hereof the sum of P14,016.66, plus the amount of deposit fee, for further disposition

CASE: ARTICLE 88

Decision:

• The Clerk of Court is directed to issue the corresponding writ of execution should NWSA fail to deposit the required amount within the stated period.

• The claims of Chongco for salary adjustment and adjusted overtime are held in abeyance for further deliberation and proceedings.

• In the meantime, the Court Examiner is directed to compute the added overtime differential Chongco would receive by including a new factor, the value of his living quarters tentatively fixed at P100.00 a month, and submit the same in a Report for further disposition.

Thank you!

compensation and benefits gerald william c. paragas 14 april 2012

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