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Labor Congress of the Philippines (LCP) for and in behalf of its 99 members

named
as
petitioners
v.
NLRC,
Empire
Food
Products,
its
Proprietor/President & Manager, Mr. Gonzalo Kehyeng and Mrs. Evelyn
Kehyeng
21 May 1998 | 1st Division | J. Davide Jr.
Facts:
1. The 99 persons names as petitioners were rank and file employees of Empire
Food Products paid on a piece rate basis (pakiao basis). They filed a complaint
against the company for payment of money claims and for violation of labor
standards law. They also filed a petition for direct certification of LCP as their
sole bargaining representative.
2. LCP and the company entered into a MOA wherein:
- the company recognized the LCP and its local chapter as the sole and
exclusive bargaining agent of the rank and file EEs of the company
- both parties agreed that the issues of the case filed shall be discussed and
resolved by the parties during the CBA negotiations
- the parties agreed that the NLRC case be provisionally withdrawn in
consideration of the agreements of the parties.
3. The MOA was approved by the mediator arbiter and the LCP was certified as
the sole and exclusive bargaining agent for the rank and file EEs.
4. LCP submitted to the company a proposal for collective bargaining.
5. LCP filed a complaint against the respondents for:
- ULP by way of illegal lockout and/or dismissal
- Union busting thru harassments, threats, and interfering with the rights of
employees to self-organization
- Violation of the MOA
- Underpayment of wages
- Actual, Moral, and Exemplary Damages.
6. LA: absolved the company from the claims of the petitioners but directed the
reinstatement of the individual complainants.
7. NLRC: Vacated the LAs decision and remanded the case to the LA for the
reason that the LA must have overlooked the testimonies of some of the
individual complainants which are on record.
8. LA: Dismissed the complaint for lack of merit.
- The complainants failed to present with definiteness and clarity the
particular act/s constitutive of ULP. The charge of illegal lockout is
unfounded because it was the complainant-petitioners who abandoned
their work.
- They also failed to specify the type of threats or intimidation committed
and who committed the same
- There is no obligation on the part of the company to resolve the issues
raised in the first case as the NLRC has the exclusive jurisdiction thereof.
- There was no underpayment of wages as the complainants admitted that
they are piece workers or paid on a pakiao basis. The only limitation for
piece workers is that they should receive compensation no less than the
minimum wage for at least 8 hours of work
9. NLRC: affirmed in toto LAs decision
Issues:
1. W/N complainants-petitioners were illegally dismissed. YES.
2. W/N complainants-petitioners are entitled to holiday pay, premium pay, 13 th month
pay, and service incentive leave. YES
3. W/N complainants-petitioners are entitled to overtime pay. YES

Ratio:
1. The LA concluded in his Decision that the complainants-petitioners abandoned
their work on the basis of the sole testimony of Empires security guard. The LA in
coming up with the Decision, which was later on affirmed in toto by the NLRC,
appeared to be motivated by, at worst, spite, or at best, lackadaisically glossed
over the petitioners evidence. Apparently, the LA perceived that if not for
petitioners, he would not have fallen victim to the stinging rebuke by the NLRC.
The Court agreed with the OSG that the failure to work for one day, which
resulted in the spoilage of cheese curls does not amount to abandonment of
work. In fact 2 days after, the petitioners filed a complaint for, among others, ULP,
illegal lockout and/or illegal dismissal. In several cases the Court held that one
could not possibly abandon his work and shortly thereafter vigorously pursue his
complaint for illegal dismissal.
The company also failed to overcome its burden of proving the existence of just
cause for the dismissing an EE. Likewise, the company violated the rights to
security of tenure and to due process in not even serving the EEs with a written
notice of termination.
2. Definition: Piece rate workers - workers who are paid a standard amount for

every piece or unit of work produced that is more or less regularly replicated,
without regard to the time spent in producing the same

Although petitioners are piece rate workers, they are regular employees of the
company. They are performing tasks (repacking snack foods) necessary or
desirable in the usual business of the company (manufacture and sale of food
products); they worked throughout the year, their employment not dependent on
a specific project or season; and the length of time that they worked for the
company.
The Labor Code IRR excludes certain employees from receiving nighttime pay,
holiday pay, SIL, and 13th month pay, inter alia, "field personnel and other
employees whose time and performance is unsupervised by the employer,
including those who are engaged on task or contract basis, purely commission
basis, or those who are paid a fixed amount for performing work irrespective of
the time consumed in the performance thereof." Petitioners as piece rate workers
do not fall within this group. Not only did petitioners labor under the control of
their employer, likewise did petitioners toil throughout the year with the
fulfillment of their quota as supposed basis for compensation.
Further, in Section 8 (b), Rule IV, Book III of the Labor Code IRR specifically
mentioned piece workers as being entitled to holiday pay.
In addition, Revised IRR of the 13 th Month Pay Law clearly exclude ER of piece rate
workers from those exempted from paying 13th month pay.

3. Workers who are paid by results including those who are paid on piecework, takay, pakiao, or task basis, if their output rates are in accordance with
the standards prescribed under Sec. 8, Rule VII, Book III, of these regulations,
or where such rates have been fixed by the Secretary of Labor in accordance
with the aforesaid section, are not entitled to receive overtime pay. Here,
private respondents did not allege adherence to the standards set forth in
Sec. 8 nor with the rates prescribed by the Secretary of Labor. As such,
petitioners are therefore entitled to overtime pay.

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