COMMISSION CAN BE FORFEITED BY EMPLOYERAtty Elvin
If Agreed Upon in an Employment Agreement, Commission can be Forfeited upon Violation of Non-Compete Clause
In an employment agreement, the Mr. Babiano agreed that in case of violation of the non-compete clause, his sales commission can be forfeited. During the time of his employment with Century Properties, he admitted having applied and worked for a competitor.
Hence, his commission was forfeited as agreed upon. He filed a complaint claiming for his commission. But the Supreme Court declared that forfeiture was proper.
The Court said that Article 1370 of the Civil Code provides that “[i]f the terms of a contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulations shall control.”
The commissions of Babiano were properly forfeited for violating the “confidentiality of Documents and Non-Compete Clause.”
(Century Properties, Inc. vs. Babiano, G.R. No. 220978. July 5, 2016)