​Intercontinental Broadcasting vs. Benedicto, July 20, 2006

Facts:
In 1993, Reynaldo Benedicto was appointed by Ceferino Basilio, the general manager, as marketing manager with a monthly compensation of P20,000 plus 1% commission from collections of all advertising contracts consummated. In a letter dated October 11, 1994 signed by Tomas Gomez III, at that time the president of the petitioner, Benedicto was terminated from his position.
Benedicto filed a complaint with the NLRC for illegal dismissal and damages. He alleged that after his appointment, he was able to increase the televiewing, listening and audience ratings of IBC which resulted in its improved competitive financial strength and his termination was without just or authorized cause.
 
The Labor Arbiter ruled in favor of Benedicto, finding that he was indeed illegally dismissed and ordered reinstatement with full backwages, commission, and attorney’s fees. Finding the award excessive, filed with the NLRC its memorandum on appeal with motion to re-compute the award on which the appeal bond was to be based. This motion was not acted upon, hence, petitioner proceeded to file the appeal bond based on the amounts awarded in the judgment appealed from. The NLRC dismissed the appeal and ruled that petitioner failed to perfect its appeal since it did not file the appeal bond within the reglementary period. The CA affirmed the NLRC's decision.

Issue:
Whether Benedicto was entitled to reinstatement, award of backwages, and commissions.

​Held:
The issue of reinstatement was mooted by Benedicto's death in 2002.
When the labor arbiter promulgated his decision (wherein he awarded the amount of P920,000 as backwages), Benedicto was already 68 years old. However, Benedicto was entitled to backwages only up to the time he reached 65 years old, the compulsory retirement age under the law. When Benedicto was illegally dismissed on October 11, 1994, he was already 64 years old. He turned 65 years old on December 1, 1994 at which age he was deemed to have retired. Since backwages are granted on grounds of equity for earnings lost by an employee due to his illegal dismissal, Benedicto was entitled to backwages only for the period he could have worked had he not been illegally dismissed, i.e. from October 11, 1994 to December 1, 1994.
In computing the amount of the commission Benedicto was entitled to, the following should be considered:
First, because Benedicto was entitled to backwages only from October 11 to December 1, 1994 when he turned 65 years old, petitioner should pay his commission only for this period.
Second, by nature, commissions are given to employees only if the employer receives income. Employees, as a reward, receive a percentage of the earnings of the employer, which they, through their efforts, helped produce. Commissions are also given in the form of incentives or encouragement so that employees will be inspired to put a little more industry into their tasks. Commissions can also be considered as direct remunerations for services rendered. All these different concepts of commissions are incongruent with the claim that an employee can continue to receive them indefinitely after reaching his mandatory retirement age.
Benedicto's right to the commissions was coterminous with his employment with petitioner and this ended when he reached the compulsory retirement age.
Lastly, the stipulation providing for commissions (which did not specify the period of entitlement) would be too burdensome if interpreted to mean that Benedicto had a right to it even after his employment with petitioner. Doubts in contracts should be settled in favor of the greatest reciprocity of interests. A lopsided and open-minded construction could not have been the parties' contemplation. Had that been their intent, then they should have spelled it out in no uncertain terms.