Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-4148 July 16, 1952
MANILA TERMINAL COMPANY, INC., petitioner,
vs.
TE COURT O! IN"USTRIAL RELATIONS #$% MANILA TERMINAL RELIE! AN"
MUTUAL AI" ASSOCIATION, respondents.
Perkins, Ponce Enrile and Contreras for petitioner.
Antonio V. Raquiza, Honesto Ricobal and Perfecto E. Llacarfor respondent Association.
Mariano R. Padilla for respondent Court of Industrial Relations.
PARAS, C. J.&
On September , !"#, the Manila $erminal Compan%, &nc. hereinafter to be referred as
to the petitioner, undertoo' the arrastre service in some of the piers in Manila(s Port
Area at the re)uest and under the control of the *nited States Arm%. $he petitioner hired
some thirt% men as +atchmen on t+elve,hour shifts at a compensation of P- per da% for
the da% shift and P. per da% for the ni/ht shift. On 0ebruar% , !"., the petitioner
be/an the post+ar operation of the arrastre service at the present at the re)uest and
under the control of the Bureau of Customs, b% virtue of a contract entered into +ith the
Philippine 1overnment. $he +atchmen of the petitioner continued in the service +ith a
number of substitutions and additions, their salaries havin/ been raised durin/ the
month of 0ebruar% to P" per da% for the da% shift and P..2# per da% for the ni/htshift.
On March 23, !"4, 5ominador 6imene7, a member of the Manila $erminal Relief and
Mutual Aid Association, sent a letter to the 5epartment of 8abor, re)uestin/ that the
matter of overtime pa% be investi/ated, but nothin/ +as done b% the 5epartment. On
April 2!, !"4, 9ictorino Ma/no Cru7 and five other emplo%ees, also member of the
Manila $ransit Mutual Aid Association, filed a #,point demand +ith the 5epartment of
8abor, includin/ overtime pa%, but the 5epartment a/ain filed to do an%thin/ about the
matter. On Ma% 24, !"4, the petitioner instituted the s%stem of strict ei/ht,hour shifts.
On 6une !, !"4, the Manila Port $erminal Police Association, not re/istered in
accordance +ith the provisions of Common+ealth Act No. 2-, filed a petition +ith the
Court of &ndustrial Relations. On 6ul% ., !"4, the Manila $erminal Relief and Mutual
Aid Association +as or/ani7ed for the first time, havin/ been /ranted certificate No. -4#
b% the 5epartment of 8abor. On 6ul% 23, !"4, Manila $erminal Relief and Mutual Aid
Association filed an amended petition +ith the Court of &ndustrial Relations pra%in/,
amon/ others, that the petitioner be ordered to pa% its +atchmen or police force
overtime pa% from the commencement of their emplo%ment. On Ma% !, !"!, b% virtue
of Customs Administrative Order No. 3 and E:ecutive Order No. 223 of the President
of the Philippines, the entire police force of the petitioner +as consolidated +ith the
Manila ;arvor Police of the Customs Patrol Service, a 1overnment a/enc% under the
e:clusive control of the Commissioner of Customs and the Secretar% of 0inance $he
Manila $erminal Relief and Mutual Aid Association +ill hereafter be referred to as the
Association.
6ud/e 9. 6imene7 <anson of the Court of &ndustrial Relations in his decision of April ,
!#=, as amended on April 3, !#=, +hile dismissin/ other demands of the Association
for lac' of >urisdiction, ordered the petitioner to pa% to its police force ?
@aA Re/ular or base pa% correspondin/ to four hours( overtime plus 2# per cent thereof
as additional overtime compensation for the period from September , !"# to Ma% 2",
!"4B
@bA Additional compensation of 2# per cent to those +ho +or'ed from .C== p.m. to .C==
a.m. durin/ the same periodC
@cA Additional compensation of #= per cent for +or' performed on Sunda%s and le/al
holida%s durin/ the same periodB
@dA Additional compensation of #= per cent for +or' performed on Sunda%s and le/al
holida%s from Ma% 2", !"4 to Ma% !, !"!B and
@eA Additional compensation of 2# per cent for +or' performed at ni/ht from Ma% 2!,
!"4 to Ma% !, !"!.
Dith reference to the pa% for overtime service after the +atchmen had been inte/rated
into the Manila ;arbor Police, 6ud/e <anson ruled that the court has no >urisdiction
because it affects the Bureau of Customs, an instrumentalit% of the 1overnment havin/
no independent personalit% and +hich cannot be sued +ithout the consent of the State.
@Metran vs. Paredes, "#. Off. 1a7., 23-#.A
$he petitioner find a motion for reconsideration. $he Association also filed a motion for
reconsideration in so far its other demands +ere dismissed. 6ud/e <anson, concurred
in b% 6ud/e 6ose S. Bautista, promul/ated on 6ul% -, !#=, a resolution den%in/ both
motions for reconsideration. Presidin/ 6ud/e Arsenio C. Roldan, in a separate opinion
concurred in b% 6ud/e Modesto Castillo, a/reed +ith the decision of 6ud/e <anson of
April , !#=, as to the dismissal of other demands of the Association, but dissented
therefrom as to the /rantin/ of overtime pa%. &n a separate decisive opinion, 6ud/e 6uan
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S. 8antin/ concurred in the dismissal of other demands of the Association. Dith respect
to overtime compensation, 6ud/e 8antin/ ruledC
. $he decision under revie+ should be affirmed in so far it /rants compensation for
overtime on re/ular da%s @not Sunda% and le/al holida%sAdurin/ the period from the date
of entrance to dut% to Ma% 2", !"4, such compensation to consists of the amount
correspondin/ to the four hours( overtime at the re/ular rate and an additional amount
of 2# per cent thereof.
2. As to the compensation for +or' on Sunda%s and le/al holida%s, the petitioner should
pa% to its +atchmen the compensation that corresponds to the overtime @in e:cess of 3
hoursA at the re/ular rate onl%, that is, +ithout an% additional amount, thus modif%in/ the
decision under revie+ accordin/l%.
-. $he +atchmen are not entitled to ni/ht differential pa% for past services, and therefore
the decision should be reversed +ith the respect thereto.
$he petitioner has filed a present petition for certiorari. &ts various contentions ma% be
briefl% summed up in the follo+in/ propositionsC @A $he Court of &ndustrial Relations
has no >urisdiction to render a mone% >ud/ment involvin/ obli/ation in arrears. @2A $he
a/reement under +hich its police force +ere paid certain specific +a/es for t+elve,hour
shifts, included overtime compensation. @-A $he Association is barred from recover% b%
estoppel and laches. @"A the nullit% or invalidit% of the emplo%ment contract precludes
an% recover% b% the Association. @#A Common+ealth Act No. """" does not authori7e
recover% of bac' overtime pa%.
$he contention that the Court of &ndustrial Relations has no >urisdiction to a+ard a
mone% >ud/ment +as alread% overruled b% this Court in 1.R. No. 8,"--4, 5etective E
protective ureau, Inc. !s. Court of Industrial Relations and "nited E#plo$ees %elfare
Association, != Phil., ..#, in this +iseC F&t is also ar/ued that the respondent court has
no >urisdiction to a+ard overtime pa%, +hich is mone% >ud/ment. De believe that under
Common+ealth Act No. =- the Court is empo+ered to ma'e the order for the purpose
of settlin/ disputes bet+een the emplo%er and emplo%ee

. As a matter of fact this Court

has confirmed an order of the Court of &ndustrial Relations re)uirin/ the El's Club to
pa% to its emplo%ees certain sum of mone% as overtime bac' +a/es from 6une -, !-!
to March -, !". $his, in spite the alle/ation of lac' or e:cess of >urisdiction on the
part of said court. @"# Off. 1a7., -32!B 3= Phil. 242AF
$he important point stressed b% the petitioner is that the contract bet+een it and the
Association upon the commencement of the emplo%ment of its +atchman +as to the
certain rates of pa%, includin/ overtime compensation namel%, P- per da% for the da%
shift and P. per da% for ni/ht shift be/innin/ September , !"#, and P" per da% shift
and P..2# per da% for the ni/ht shift since 0ebruar%, !".. $he record does not bear out
these alle/ations. $he petitioner has relied merel% on the facts that its +atchmen had
+or'ed on t+elve,hour shifts at specific +a/es per da% and that no complaint +as made
about the matter until, first on March 23, !"4 and, secondl%, on April 2!, !"4.
&n times of acute unemplo%ment, the people, ur/ed b% the instinct of self,preservation,
/o from place to place and from office to office in search for an% emplo%ment,
re/ardless of its terms and conditions, their main concern in the first place bein/
admission to some +or'. Speciall% for positions re)uirin/ no special )ualifications,
applicants +ould be /ood as re>ected if the% ever tr% to be in)uisitive about the hours of
+or' or the amount of salar%, ever attempt to dictate their terms. $he petitioner(s
+atchmen must have railroaded themselves into their emplo%ment, so to spea', happ%
in the thou/ht that the% +ould then have an income on +hich to subsist. But, at the
same time, the% found themselves re)uired to +or' for t+elve hours a da%. $rue, there
+as a/reement to +or', but can it fairl% be supposed that the% had the freedom to
bar/ain in an% +a%, much less to insist in the observance of the Ei/ht ;our 8abor 8a+G
As +as aptl% said in &lo$d !s. 'u ois (oap Co., !"2, -4 *. S. #!., .- Sup. Ct. #!B
. CC; 8abor Cases, Par. #, "4, FA contract of emplo%ment, +hich provides for a
+ee'l% +a/e for a specified number of hours, sufficient to cover both the statutor%
minimum +a/e and overtime compensation, if computed on the basis of the statutor%
minimum +a/e, and +hich ma'es no provision for a fi:ed hourl% rate or that the +ee'l%
+a/e includes overtime compensation, does not meet the re)uirements of the Act.F
Moreover, +e note that after the petition had instituted the strict ei/ht,hour shifts, no
reduction +as made in the salaries +hich its +atchmen received under the t+elve hour
arran/ement. &ndeed, as admitted b% the petitioner, F+hen the members or the
respondent union +ere placed on strict ei/ht,hour shifts, the lo+est salar% of all the
members of the respondent union +as P.# a month, or P#.#= dail%, for both da% and
ni/ht shifts.F Althou/h it ma% be ar/ued that the salar% for the ni/ht shift +as some+hat
lessened, the fact that the rate for the da% shift +as increased in a sense tends to
militate a/ainst the contention that the salaries /iven durin/ the t+elve,hour shifts
included overtime compensation.
Petitioner(s alle/ation that the association had ac)uiesced in the t+elve,hour shifts for
more than 3 months, is not accurate, because the +atchmen involved in this case did
not enter the service of the petitioner, at one time, on September , !"#. As 6ud/e
8antin/ found, Fonl% one of them entered the service of the compan% on said date, ver%
fe+ durin/ the rest of said month, some durin/ the rest of that %ear @!"#A and in !".,
and ver% man% in !"4, !"3 and !"!.F
$he case at bar is )uite on all fours +ith the case of 'etecti!e ) Protecti!e ureau, Inc.
!s. Court of Industrial Relations and "nited E#plo$ees %elfare Association, supra, in
+hich the facts +ere as follo+sC F$he record discloses that upon petition properl%
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submitted, said court made an investi/ation and found that the members of the *nited
Emplo%ees Delfare Association @hereafter called the AssociationA +ere in the emplo% of
the petitioner 5etective and Protective Bureau, &nc. @herein called the BureauA +hich is
en/a/ed in the business of furnishin/ securit% /uards to commercial and industrial
establishments, pa%in/ to said members monthl% salaries out of +hat it received from
the establishments benefited b% /uard service. $he emplo%ment called for dail% tours of
dut% for more than ei/ht hours, in addition to +or' on Sunda%s and holida%s.
Nonetheless the members performed their labors +ithout receivin/ e:tra
compensation.F $he onl% difference is that, +hile in said case the emplo%ees concerned
+ere paid monthl% salaries, in the case no+ before us the +a/es +ere computed dail%.
&n the case cited, +e held the follo+in/C
&t appears that the Bureau had been /rantin/ the members of the Association, ever%
month, Ft+o da%s offF da%s in +hich the% rendered no service, althou/h the% received
salar% for the +hole month. Said Bureau contended belo+ that the pa% correspondin/ to
said 2 da% vacation corresponded to the +a/es for e:tra +or'. $he court re>ected the
contention, )uite properl% +e believe, because in the contract there +as no a/reement
to that effectB and such a/reement, if an%, +ould probabl% be contrar% to the provisions
of the Ei/ht,;our 8a+ @Act No. """, sec. .A and +ould be null and void ab initio.
&t is ar/ued here, in opposition to the pa%ment, that until the commencement of this
liti/ation the members of the Association never claimed for overtime pa%. $hat ma% be
true. Nevertheless the la+ /ives them the ri/ht to e:tra compensation. And the% could
not be held to have i#pliedl$ +aived such e:tra compensation, for the obvious reason
that could not have e*pressl$ +aived it.
$he fore/oin/ pronouncements are in point. $he Association cannot be said to have
impliedl% +aived the ri/ht to overtime compensation, for the obvious reason that the%
could not have e:pressl% +aived it.F
$he principle of estoppel and the laches cannot +ell be invo'ed a/ainst the Association.
&n the first place, it +ould be contrar% to the spirit of the Ei/ht ;our 8abor 8a+, under
+hich as alread% seen, the laborers cannot +aive their ri/ht to e:tra compensation. &n
the second place, the la+ principall% obli/ates the emplo%er to observe it, so much so
that it punishes the emplo%er for its violation and leaves the emplo%ee or laborer free
and blameless. &n the third place, the emplo%ee or laborer is in such a disadvanta/eous
position as to be naturall% reluctant or even apprehensive in assertin/ an% claim +hich
ma% cause the emplo%er to devise a +a% for e:ercisin/ his ri/ht to terminate the
emplo%ment.
&f the principle of estoppel and laches is to be applied, it ma% brin/ about a situation,
+hereb% the emplo%ee or laborer, +ho cannot e:pressl% renounce their ri/ht to e:tra
compensation under the Ei/ht,;our 8abor 8a+, ma% be compelled to accomplish the
same thin/ b% mere silence or lapse of time, thereb% frustratin/ the purpose of la+ b%
indirection.
Dhile counsel for the petitioner has cited authorities in support of the doctrine invo'ed,
there are also authorities pointed out in the opinion of 6ud/e 8antin/ to the contrar%.
Suffice it to sa%, in this connection, that +e are inclined to rule adversel% a/ainst
petitioner for the reasons alread% stated.
$he ar/ument that the nullit% or invalidit% of the emplo%ment contract precludes
recover% b% the Association of an% overtime pa% is also untenable. $he ar/ument,
based on the supposition that the parties are in pari delicto, +as in effect turned do+n in
+ota#o Lu#ber Co. !s. Court of Industrial Relations,
H
"4 Off. 1a7., -"2, +herein +e
ruledC F$he petitioner maintains that as the overtime +or' had been performed +ithout a
permit from the 5epartment of 8abor, no e:tra compensation should be authori7ed.
Several decisions of this court are involved. But those decisions +ere based on the
reasonin/ that as both the laborer and emplo%er +ere dut% bound to secure the permit
from the 5epartment of 8abor, both +ere in pari delicto. ;o+ever the present la+ in
effect imposed that dut% upon the emplo%er @C.A. No. """A. Such emplo%er ma% not
therefore be heard to plead his o+n ne/lect as e:emption or defense.
$he emplo%ee in renderin/ e:tra service at the re)uest of his emplo%er has a ri/ht to
assume that the latter has complied +ith the re)uirement of the la+, and therefore has
obtained the re)uired permission from the 5epartment of 8abor.
Moreover, the Ei/ht,;our 8a+, in providin/ that Fan% a/reement or contract bet+een the
emplo%er and the laborer or emplo%ee contrar% to the provisions of this Act shall be null
avoid ab initio,F @Common+ealth Act No. """, sec. .A, obviousl% intended said provision
for the benefit of the laborers or emplo%ees. $he emplo%er cannot, therefore, invo'e an%
violation of the act to e:empt him from liabilit% for e:tra compensation. $his conclusion
is further supported b% the fact that the la+ ma'es onl% the emplo%er criminall% liable for
an% violation. &t cannot be pretended that, for the emplo%er to commit an% violation of
the Ei/ht,;our 8abor 8a+, the participation or ac)uiescence of the emplo%ee or laborer
is indispensable, because the latter in vie+ of his need and desire to live, cannot be
considered as bein/ on the same level +ith the emplo%er +hen it comes to the )uestion
of appl%in/ for and acceptin/ an emplo%ment.
Petitioner also contends that Common+ealth Act No. """ does not provide for recover%
of bac' overtime pa%, and to support this contention it ma'es referrence to the 0air
8abor Standards Act of the *nited States +hich provides that Fan% emplo%er +ho
violates the provisions of section 2=. and section 2=4 of this title shall be liable to the
emplo%ee or emplo%ees affected in the amount of their unpaid minimum +a/es or their
unpaid overtime compensation as the case ma% be,F ? a provision not incorporated in
Common+ealth Act No. """, our Ei/ht,;our 8abor 8a+. De cannot a/ree to the
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proposition, because sections - and # of Common+ealth Act """ e:pressl% provides for
the pa%ment of e:tra compensation in cases +here overtime services are re)uired, +ith
the result that the emplo%ees or laborers are entitled to collect such e:tra compensation
for past overtime +or'. $o hold other+ise +ould be to allo+ an emplo%er to violate the
la+ b% simpl%, as in this case, failin/ to provide for and pa% overtime compensation.
$he point is stressed that the pa%ment of the claim of the Association for overtime pa%
coverin/ a period of almost t+o %ears ma% lead to the financial ruin of the petitioner, to
the detriment of its emplo%ees themselves. &t is si/nificant, ho+ever, that not all the
petitioner(s +atchmen +ould receive bac' overtime pa% for the +hole period specified in
the appealed decision, since the record sho+s that the /reat ma>orit% of the +atchmen
+ere admitted in !". and !"4, and even !"3 and !"!. At an% rate, +e are
constrained to sustain the claim of the Association as a matter of simple >ustice,
consistent +ith the spirit and purpose of the Ei/ht,;our 8abor 8a+. $he petitioner, in the
first place, +as re)uired to compl% +ith the la+ and should therefore be made liable for
the conse)uences of its violation.
&t is hi/h time that all emplo%ers +ere +arned that the public is interested in the strict
enforcement of the Ei/ht,;our 8abor 8a+. $his +as desi/ned not onl% to safe/uard the
health and +elfare of the laborer or emplo%ee, but in a +a% to minimi7e unemplo%ment
b% forcin/ emplo%ers, in cases +here more than 3,hour operation is necessar%, to utili7e
different shifts of laborers or emplo%ees +or'in/ onl% for ei/ht hours each.
Dherefore, the appealed decision, in the form voted b% 6ud/e 8antin/, is affirmed, it
bein/ understood that the petitioner(s +atchmen +ill be entitled to e:tra compensation
onl% from the dates the% respectivel% entered the service of the petitioner, hereafter to
be dul% determined b% the Court of &ndustrial Relations. So ordered, +ithout costs.
&eria, Pablo, en,zon, Padilla, -uason, autista An,elo, and Labrador, ..., concur.
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