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Petitioners, rank-and-file employees and members of San Juan de Dios Hospital Employees Association sent a 4 page letter
requesting and pleading for the expeditious implementation and payment by the respondent Hospital of the 40 HOURS/5-
DAY WORKWEEK with compensable weekly two (2) days off provided for by Republic Act 5901 as clarified for enforcement
by the Secretary of Labors Policy Instructions No. 54 dated April 12, 1988. Respondent hospital failed to give a favourable
response; thus, petitioners filed a complaint regarding their claims for statutory benefits under the above-cited law and
policy issuance. The Labor Arbiter dismissed the complaint which was also confirmed by NLRC, hence the petition under
Rule 65 of the Rules of Court.
Issue: WON Policy Instructions No. 54 issued by then Labor Secretary Franklin Drilon is valid?
Held: It is invalid.
The Policy Instruction No. 54 relies and purports to implement Republic Act No. 5901, otherwise known as An Act
Prescribing Forty Hours A Week Of Labor For Government and Private Hospitals Or Clinic Personnel, but reliance to this RA
is misplaced since it has long been repealed with the passage of the Labor Code. Accordingly, only Article 83 of the Labor
Code which appears to have substantially incorporated or reproduced the basic provisions of Republic Act No. 5901 may
support Policy Instructions No. 54 on which the latters validity may be gauged.
What Article 83 merely provides are: (1) the regular office hour of eight hours a day, five days per week for health
personnel, and (2) where the exigencies of service require that health personnel work for six days or forty-eight hours then
such health personnel shall be entitled to an additional compensation of at least thirty percent of their regular wage for
work on the sixth day. There is nothing in the law that supports then Secretary of Labors assertion that personnel in
subject hospitals and clinics are entitled to a full weekly wage for seven (7) days if they have completed the 40-hour/5-day
workweek in any given workweek.
Further, petitioners' position is also negated by the very rules and regulations promulgated by the Bureau of Labor
Standards which implement Republic Act No. 5901. Pertinent portions of the implementing rules provided in Sections 1,7,
and 15 of the said Act.
If petitioners are entitled to two days off with pay, then there appears to be no sense at all why Section 15 of the
implementing rules grants additional compensation equivalent to the regular rate plus at least twenty-five percent thereof
for work performed on Sunday to health personnel, or an additional straight-time pay which must be equivalent at least to
the regular rate [f]or work performed in excess of forty hours a week xxx. Policy Instructions No. 54 to our mind unduly
extended the statute. The Secretary of Labor moreover erred in invoking the spirit and intent of Republic Act No. 5901
and Article 83 of the Labor Code for it is an elementary rule of statutory construction that when the language of the law is
clear and unequivocal, the law must be taken to mean exactly what it says.

2. Interphil Laboratories Employees Union Vs. Interphil Laboratories

Interphil Laboratories Employees Union-FFW is the sole and exclusive bargaining agent of the rank- and- file
employees of Interphil Laboratories, Inc- a company engaged in the business of manufacturing and packaging
pharmaceutical products.
They had a Collective Bargaining Agreement (CBA) effective from August 01, 1990 to July 31, 1993.
Prior to the expiration of the CBA, Allesandro G. Salazar, the Vice President of the Human Resources Department of
the respondent company was approached by Nestor Ocampo, the union president and Hernando Clemente. Sa lazar told
the union officers that the matter could be discussed during formal negotiations.
March 1993- The union officers again approached Salazar. They required once more about the CBA status and
received the same reply from Salazar.
April 1993- Ocampo requested for a meeting to discuss the duration and effectivity of CBA. Salazar however,
declared that it would still be premature to discuss the matter and that the company could not make a decision at a
The following day all the rank- and file employees refused to follow their regular shift work schedule:
o From 6:00 am to 6:00 pm /6:00 pm to 6:00 am
o 2:00 pm to 2:00 am
The employees stopped working and left their workplace without sealing the containers and securing the raw
materials they were working on
To minimize the damage the overtime boycott was causing the company, Salazar immediately asked for the
meeting with the union officers.
Gonzales told Salazar that the employees will return to their normal work schedule if the company would agree to
their demands as to the effectivity and duration of the new CBA (agreement must be effective for 2 years).
Again, Salazar told the union officers that the matter could be discussed during formal negotiations unsatisfied with
the answer the employees started to engage in a work slowdown campaign to delay the production of the company.
September 1993- respondent company filed with NLRC a petition to declare illegal petitioner unions overtime
boycott and work slowdown . It amounted to illegal strike.
October 1993, respondent company filed with National Conciliation and Mediation Board (NCMB) an urgent
request for preventive mediation aimed to help the parties in their CBA negotiations.
January 1994- petitioner union filed with the NCMB a Notice of Strike citing unfair labor allegedly committed by
the respondent company.
February 1994- Secretary of Labor Nieves Confessor issued an order directing respondent company to
o Immediately accept all striking workers, including the 53 terminated union officers
o Shop stewards and union members back to work under the same terms and conditions
o To pay all the unpaid accrued year end benefits of its employees.
On the other hand, petitioner union was directed to strictly and immediately comply with the return-to work
September 1995- Secretary Quisumbing approved and adopted the decision of the Labor Arbiter Caday declaring
the overtime boycott and work slowdown as illegal strike and found out that the respondent company is guilty of unfair
labor practice.
Petitioner unions reconsideration and petition for certiorari were denied.

1. Whether or not the Secretary of Labor and Employment has a jurisdiction over labor and labor related dispute.
2. Whether or not the 12 working hours violate the right of the employees to just work for not more than 8 hours a
day. NO
3. Whether or not the overtime boycott or work slowdown by the employees constitutes a violation of the CBA
which prohibits the union to stage a strike or engage in slowdown or interruption of work. YES

1. In the present case, the Secretary was explicitly granted by Article 263 of the labor Code the authority to assume
jurisdiction over a labor dispute causing or likely to cause or lockout in an industry. Necessarily, this authority to assume
jurisdiction over the said labor dispute must include and extend to all questions and controversies including cases over
which the labor arbiter has exclusive jurisdiction.
2. The regular working hours shall consist of not more than eight (8) hours. It shall be 7:30 am to 4:30 pm. The
schedule of shift work shall be maintained; however, the company may change the prevailing work time at its discretion,
should such change be necessary in the operations of the company. All employees shall observe such rules as have been laid
down by the company for the purpose of effecting control over working hours. The Labor Arbiter found out that the
respondent company had to adopt a continuous 24-hour work daily schedule by reason of the nature of its business and the
demands of its clients.
3. Because there is a contractual commitment that there shall be no strikes, walkouts, stoppage or slowdown of
work, boycotts or secondary boycotts x x x or any interference with any of the operations of the company during CBA. The
workers refusal to adhere to the work schedule in force is a slowdown and it is inherently illegal activity essentially illegal
even in the absence of a no-strike clause in a CBA. The court also agrees that such slowdown is generally condemned as
inherently illicit and unjustifiable because while the employees continue to work and remain at their positions and accept
the wages paid to them. They select what part of their allotted tasks they care to perform. In other words, they work on
their own terms.

Wherefore, the petition is DENIED DUE COURSE.

3. NLU vs Union Carbide Phil

FACTS: On May 22, 1997, A. Soriano Aviation (petitioner or the company) which is engaged in providing transportation of
guests to and from Amanpulo and El Nido resorts in Palawan, and respondent Employees Association of A. Soriano Aviation
(the Union), the duly-certified exclusive bargaining agent of the rank and file employees of petitioner, entered into a
Collective Bargaining Agreement (CBA) effective January 1, 1997 up to December 31, 1999. The CBA included a "No-Strike,
No-Lock-out" clause.
On May 1 & 12, and June 12, 1997, which were legal holidays and peak season for the company, eight mechanics-members
of respondent Union, its herein co-respondents Albert Aguila (Aguila), Reynante Amimita (Amimita), Galmier Balisbis
(Balisbis), Raymond Barco (Barco), Gerardo Bungabong (Bungabong), Josefino Espino (Espino), Jeffrey Neri (Neri) and
Rodolfo Ramos, Jr. (Ramos), refused to render overtime work.
Petitioner treated the refusal to work as a concerted action which is a violation of the "No-Strike, No-Lockout" clause in the
CBA. It thus meted the workers a 30-day suspension. It also filed on July 31, 1997 a complaint for illegal strike against them,
docketed as NLRC Case No. 07-05409-97, which was later dismissed at its instance in order to give way to settlement,
without prejudice to its re-filing should settlement be unavailing.
The attempted settlement between the parties having been futile, the Union filed a Notice of Strike with the National
Conciliation and Mediation Board (NCMB) on October 3, 1997, attributing to petitioner the following acts: (1) union busting,
(2) illegal dismissal of union officer, (3) illegal suspension of eight mechanics, (4) violation of memorandum of agreement,
(5) coercion of employees and interrogation of newly-hired mechanics with regard to union affiliation, (6) discrimination
against the aircraft mechanics, (7) harassment through systematic fault-finding, (8) contractual labor, and (9) constructive
dismissal of the Union President, Julius Vargas (Vargas).
As despite conciliation no amicable settlement of the dispute was arrived at, the Union went on strike on October 22, 1997.
Meanwhile, pursuant to its reservation in NLRC Case No. 07-05409-97, petitioner filed a Motion to Re-Open the Case which
was granted by Labor Arbiter Manuel P. Asuncion by Order of October 21, 1997.
By Decision dated September 28, 1998 rendered in petitioner's complaint in NLRC Case No. 07-05409-97, the Labor Arbiter
declared that the newly implemented work-shift schedule was a valid exercise of management prerogative and the refusal
of herein individual respondents to work on three consecutive holidays was a form of protest by the Union, hence, deemed
a concerted action. Noting that the Union failed to comply with the formal requirements prescribed by the Labor Code in
the holding of strike, the strike was declared illegal.
The Union appealed to the NLRC which dismissed it in a per curiam Decision dated September 14, 1999, and the subsequent
motion for reconsideration was denied by Resolution dated November 11, 1999.
In the interim or on June 16, 1998, eight months into the "second strike", petitioner filed a complaint against respondents
before the Labor Arbiter, praying for the declaration as illegal of the strike on account of their alleged pervasive and
widespread use of force and violence and for the loss of their employment, citing the following acts committed by them:
publicly shouting of foul and vulgar words to company officers and non-striking employees; threatening of officers and non-
striking employees with bodily harm and dousing them with water while passing by the strike area; destruction of or
inflicting of damage to company property, as well as private property of company officers; and putting up of placards and
streamers containing vulgar and insulting epithets including imputing crime on the company.
By Decision of June 15, 2000, Labor Arbiter Ramon Valentin C. Reyes declared the "second strike" illegal. Taking judicial
notice of the September 28, 1998 Decision of Labor Arbiter Asuncion, he noted that as the Union went on the "first strike"
on a non-strikeable issue the questioned change of work schedule, it violated the "No-Strike, No-Lockout" clause in the
CBA and, in any event, the Union failed to comply with the requirements for a valid strike.
The Labor Arbiter went on to hold that the Union deliberately resorted to the use of violent and unlawful acts in the course
of the "second strike", hence, the individual respondents were deemed to have lost their employment.
On appeal, the National Labor Relations Commission (NLRC) affirmed in toto the Labor Arbiter's decision, by Resolution
dated October 31, 2001. It held that even if the strike were legal at the onset, the commission of violent and unlawful acts
by individual respondents in the course thereof rendered it illegal.

ISSUE: Whether the strike staged by respondents is illegal due to the alleged commission of illegal acts and violation of the
"No Strike-No Lockout" clause of the CBA and, if in the affirmative, whether individual respondents are deemed to have lost
their employment status on account thereof.

HELD: The Court rules in the affirmative.

The Court notes that, as found by the Labor Arbiter in NLRC Case No. 07-05409-97, the first strike or the mechanics' refusal
to work on 3 consecutive holidays was prompted by their disagreement with the management-imposed new work schedule.
Having been grounded on a non-strikeable issue and without complying with the procedural requirements, then the same is
a violation of the "No Strike-No Lockout Policy" in the existing CBA. Respecting the second strike, where the Union complied
with procedural requirements, the same was not a violation of the "No Strike- No Lockout" provisions, as a "No Strike-No
Lockout" provision in the Collective Bargaining Agreement (CBA) is a valid stipulation but may be invoked only by employer
when the strike is economic in nature or one which is conducted to force wage or other concessions from the employer that
are not mandated to be granted by the law. It would be inapplicable to prevent a strike which is grounded on unfair labor
practice. In the present case, the Union believed in good faith that petitioner committed unfair labor practice when it went
on strike on account of the 30-day suspension meted to the striking mechanics, dismissal of a union officer and perceived
union-busting, among others.
The Court holds that the second strike became invalid due to the commission of illegal action in its course.
The Union committed illegal acts during the strike. The Union members' repeated name-calling, harassment and threats of
bodily harm directed against company officers and non-striking employees and, more significantly, the putting up of
placards, banners and streamers with vulgar statements imputing criminal negligence to the company, which put to doubt
reliability of its operations, come within the purview of illegal acts under Art. 264 and jurisprudence.
That the alleged acts of violence were committed in nine non-consecutive days during the almost eight months that the
strike was on-going does not render the violence less pervasive or widespread to be excusable. Nowhere in Art. 264 does it
require that violence must be continuous or that it should be for the entire duration of the strike.
The acts complained of including the display of placards and banners imputing criminal negligence on the part of the
company and its officers, apparently with the end in view of intimidating the company's clientele, are, given the nature of its
business, that serious as to make the "second strike" illegal. Specifically with respect to the putting up of those banners and
placards, coupled with the name-calling and harassment, the same indicates that it was resorted to to coerce the resolution
of the dispute the very evil which Art. 264 seeks to prevent.
As to the issue of loss of employment of those who participated in the illegal strike:
The liability for prohibited acts has thus to be determined on an individual basis. A perusal of the Labor Arbiter's Decision,
which was affirmed in toto by the NLRC, shows that on account of the staging of the illegal strike, individual respondents
were all deemed to have lost their employment, without distinction as to their respective participation.
Of the participants in the illegal strike, whether they knowingly participated in the illegal strike in the case of union officers
or knowingly participated in the commission of violent acts during the illegal strike in the case of union members, the
records do not indicate. While respondent Julius Vargas was identified to be a union officer, there is no indication if he
knowingly participated in the illegal strike. The Court not being a trier of facts, the remand of the case to the NLRC is in
order only for the purpose of determining the status in the Union of individual respondents and their respective liability, if
5. Manila Jockey Club Employees Labor Union vs Manila Jockey Club
Petitioner Manila Jockey Club Employees Labor Union-PTGWO and respondent Manila Jockey Club, Inc., a corporation with a
legislative franchise to conduct, operate and maintain horse races, entered into a Collective Bargaining Agreement (CBA)
effective January 1, 1996 to December 31, 2000. The CBA governed the economic rights and obligations of respondents
regular monthly paid rank-and-file employees. In the CBA, the parties agreed to a 7-hour work schedule from 9:00 a.m. to
12:00 noon and from 1:00 p.m. to 5:00 p.m. on a work week of Monday to Saturday.
On April 3, 1999, respondent issued an inter-office memorandum declaring that, effective April 20, 1999, the hours of work
of regular monthly-paid employees shall be from 1:00 p.m. to 8:00 p.m. when horse races are held, that is, every Tuesday
and Thursday. The memorandum, however, maintained the 9:00 a.m. to 5:00 p.m. schedule for non-race days.
On October 12, 1999, petitioner and respondent entered into an Amended and Supplemental CBA retaining Section 1 of
Article IV and Section 2 of Article XI, supra, and clarified that any conflict arising therefrom shall be referred to a voluntary
arbitrator for resolution. Subsequently, before a panel of voluntary arbitrators of the National Conciliation and Mediation
Board (NCMB), petitioner questioned the above office memorandum as violative of the prohibition against non-diminution
of wages and benefits guaranteed under Section 1, Article IV, of the CBA which specified the work schedule of respondent's
employees to be from 9:00 a.m. to 5:00 p.m. Petitioner claimed that as a result of the memorandum, the employees are
precluded from rendering their usual overtime work from 5:00 p.m. to 9:00 p.m.
The NCMBs panel of voluntary arbitrators, in a decision dated October 18, 2001, upheld respondent's prerogative to
change the work schedule of regular monthly-paid employees under Section 2, Article XI, of the CBA. Petitioner moved for
reconsideration but the panel denied the motion.
Issue: WON the respondent violated the non-diminution of benefits under Article 100 of the Labor Code.
Held: The respondent did not violate the principle of non-diminution of benefits.
The provision of the CBA also grants respondent the prerogative to relieve employees from duty because of lack of work.
Petitioners argument, therefore, that the change in work schedule violates Article 100 of the Labor Code because it resulted
in the diminution of the benefit enjoyed by regular monthly-paid employees of rendering overtime work with pay, is
Section 1, Article IV, of the CBA does not guarantee overtime work for all the employees but merely provides that "all work
performed in excess of seven (7) hours work schedule and on days not included within the work week shall be considered
overtime and paid as such."
Respondent was not obliged to allow all its employees to render overtime work everyday for the whole year, but only
those employees whose services were needed after their regular working hours and only upon the instructions of
management. The overtime pay was not given to each employee consistently, deliberately and unconditionally, but as
a compensation for additional services rendered. Thus, overtime pay does not fall within the definition of benefits
under Article 100 of the Labor Code on prohibition against elimination or diminution of benefits.

6. Durabuilt vs. NLRC

-In July 1983, Reynaldo Bodegas filed a complaint for illegal dismissal against Durabuilt, a tire capping company.
-Labor Arbiter rendered a decision reinstating Bodegas to his former position with full backwages (including benefits) from
the time of his termination up to the time he was actually reinstated.
- A computation of backwages, ECOLA, 13th month pay, sick and vacation leave benefits in favor or Bodegas was then
submitted which amounted to Php 24, 316.38.
- Durabuilt filed an opposition to the computation.
Durabuilts contention: Bodegas should only be entitled to a total of P3,834.05 and not 24, 316.38. The submitted
computation contemplated a straight computation of twenty six (26) working days in one month when the period covered
by the computation was intermittently interrupted due to frequent brownouts and machine trouble. Hence, the days during
which they were not in operation due to the brownouts should be excluded in the number of days worked for the purpose
of computing Bodegas backwages.
ISSUE: WON Bodegas is entitled to backwages. YES, (for 3,834.05 and not 24, 316.38)
The illegal dismissal of Bodegas is conceded by the Durabuilt and is willing to pay backwages. However, it argues that for
days where no work was required and could be done by its employees, no wages could have been earned and, thereafter,
lost by said employees to justify an award of backwages.
Here, it appears that Durabuilts business was not in actual operation due to brownouts or power interruption and the
retrenchment of workers they had during the period of private respondent's dismissal, thus it is justified to exclude certain
days for purposes of computing backwages.
It cannot be denied that during the past years particularly in 1983, there was chronic electrical power interruption resulting
to disruption of business operations. To alleviate the situation, the government thru the Ministry of Trade and Industry
called on the industrial sector to resort to the so-called Voluntary Loan Curtailment Plan (or VLCP), whereby brownouts or
electrical power interruption was scheduled by area. The program while it may have been called voluntary" was not so as
electrical power consumers had no choice then due to the prevailing energy crisis.
As early as 1978, Ministry of Labor thru Policy Instruction No. 36 provides that:
2. Brownouts running for more than twenty minutes may not be treated as hours worked provided that any of the following
conditions are present;
a) The employees can leave their work place or go elsewhere whether within or without the work premises; or
b) The employees can use the time effectively for their own interest.
It is of record that during the electrical power interruptions, Durabuilts business was not in operation. Hence, it would
neither be fair nor just to allow Bodegas to recover something he has not earned and could not have earned and to further
penalize Durabuilt over and above the losses it had suffered due to lack of raw materials and the energy-saving programs of
the government. Bodegas cannot be allowed to enrich himself at the expense of Durabuilt. The computation of backwages
should be based on daily rather than on monthly pay schedules where, as in the case at bar, such basis is more realistic and
7. Opulencia Ice Plant & Storage v. NLRC
MANUEL P. ESITA was for twenty (20) years a compressor operator of Tiongson Ice Plant in San Pablo City. In 1980 he was
hired as compressor operator-mechanic for the ice plants of petitioner Dr. Melchor Opulencia located in Tanauan, Batangas,
and Calamba, Laguna. Initially assigned at the ice plant in Tanauan, Esita would work from seven o'clock in the morning to
five o'clock in the afternoon receiving a daily wage of P35.00.

In 1986, Esita was transferred to the ice plant in Calamba, which was then undergoing overhauling, taking the place of
compressor operator Lorenzo Eseta, who was relieved because he was already old and weak. For less than a month, Esita
helped in the construction-remodeling of Dr. Opulencia's house.

In February 1989, for demanding the correct amount of wages due him, Esita was dismissed from service. Consequently, he
filed with Sub-Regional Arbitration in San Pablo City, a complaint for illegal dismissal, underpayment, non-payment for
overtime, legal holiday, premium for holiday and rest day, 13th month, separation/retirement pay and allowances against

Petitioners deny that Esita is an employee. They claim that Esita could not have been employed in 1980 because the
Tanauan ice plant was not in operation due to low voltage of electricity and that Esita was merely a helper/peon of one of
the contractors they had engaged to do major repairs and renovation of the Tanauan ice plant in 1986. Petitioners further
allege that when they had the Calamba ice plant repaired and expanded, Esita likewise rendered services in a similar
capacity, and thus admitting that he worked as a helper/peon in the repair or remodeling of Dr. Opulencia's residence in

In December 1989, Labor Arbiter Villena rendered a decision 1 finding the existence of an employer-employee relationship
between petitioners and Esita and accordingly directed them to pay him separation pay, underpayment of wages,
allowances, 13th month, holiday, premium for holiday, and rest day pays. Almost a year after, NLRC affirmed the decision of
Labor Arbiter Villena but reduced the monetary award as it was not proven that Esita worked every day including rest days
and on the days before the legal holidays. In March 1991, petitioners' motion for reconsideration was denied.

W/N there was an employee-employer relationship between Opulencia and Esita.


No particular form of evidence is required to prove the existence of an employer-employee relationship. Any competent and
relevant evidence to prove the relationship may be admitted. For, if only documentary evidence would be required to show
that relationship, no scheming employer would ever be brought before the bar of justice, as no employer would wish to
come out with any trace of the illegality he has authored considering that it should take much weightier proof to invalidate a
written instrument.

On the claim that Esita's construction work could not ripen into a regular employment in the ice plant because the
construction work was only temporary and unrelated to the ice-making business, needless to say, the one month spent by
Esita in construction is insignificant compared to his nine-year service as compressor operator in determining the status of
his employment as such, and considering further that it was Dr. Opulencia who requested Esita to work in the construction
of his house.

In allowing Esita to stay in the premises of the ice plant and permitting him to cultivate crops to augment his income, there
is no doubt that petitioners should be commended; however, in view of the existence of an employer-employee relationship
as found by public respondents, we cannot treat humanitarian reasons as justification for emasculating or taking away the
rights and privileges of employees granted by law. Benevolence, it is said, does not operate as a license to circumvent labor
laws. If petitioners were genuinely altruistic in extending to their employees privileges that are not even required by law,
then there is no reason why they should not be required to give their employees what they are entitled to receive.

Moreover, as found by public respondents, Esita was enjoying the same privileges granted to the other employees of
petitioners, so that in thus treating Esita, he cannot be considered any less than a legitimate employee of petitioners.

8. Arica vs NLRC
170 SCRA 776 Labor Law Labor Standards Hours of Work Assembly Time

Teofilo Arica et al and 561 others sued Standard Fruits Corporation (STANFILCO) Philippines for allegedly not paying the
workers for their assembly time which takes place every work day from 5:30am to 6am. The assembly time consists of the
roll call of the workers; their getting of assignments from the foreman; their filling out of the Laborers Daily
Accomplishment Report; their getting of tools and equipments from the stockroom; and their going to the field to work. The
workers alleged that this is necessarily and primarily for STANFILCOs benefit.

ISSUE: Whether or not the workers assembly time should be paid.

HELD: No. The thirty minute assembly time long practiced and institutionalized by mutual consent of the parties under
Article IV, Section 3, of the Collective Bargaining Agreement cannot be considered as waiting time within the purview of
Section 5, Rule I, Book III of the Rules and Regulations Implementing the Labor Code . . .

Furthermore, the thirty (30)-minute assembly is a deeply-rooted, routinary practice of the employees, and the proceedings
attendant thereto are not infected with complexities as to deprive the workers the time to attend to other personal pursuits.
In short, they are not subject to the absolute control of the company during this period, otherwise, their failure to report in
the assembly time would justify the company to impose disciplinary measures.

9. Pan American World Airways System vs. Pan American Employees Association
Petitioner herein claims that the one hour meal period should not be considered as overtime work, because the evidence
showed that complainants could rest completely, and were not in any manner under the control of the company during that
period. The court below found, on the contrary, that during the so-called meal period, the mechanics were required to stand
by for emergency work; that if they happened not to be available when called, they were reprimanded by the lead man;
that as in fact it happened on many occasions, the mechanics had been called from their meals or told to hurry up eating to
perform work during this period.
Whether or not the 1 hour meal period of the mechanics is considered working time.

Yes. The Industrial Courts order for permanent adoption of a straight 8-hour shift including the meal period was but a
consequence of its finding that the meal hour was not one of complete rest but was actually a work hour, since for its
duration, the laborers had to be on ready call.
10. Rada vs NLRC
205 SCRA 69 Labor Law Labor Standards Hours of Work OT Pay of a Project Based Employee

In 1977, Hilario Rada was contracted by Philnor Consultants and Planners, Inc as a driver. He was assigned to a specific
project in Manila. The contract he signed was for 2.3 years. His task was to drive employees to the project from 7am to 4pm.
He was allowed to bring home the company vehicle in order to provide a timely transportation service to the other project
workers. The project he was assigned to was not completed as scheduled hence, since he has a satisfactory record, he was
re-contracted for an additional 10 months. After 10 months the project was not yet completed. Several contracts thereafter
were made until the project was finished in 1985.

At the completion of the project, Rada was terminated as his employment was co-terminous with the project. He later sued
Philnor for non payment of separation pay and overtime pay. He said he is entitled to be paid OT pay because he uses extra
time to get to the project site from his home and from the project site to his home everyday in total, he spends an average
of 3 hours OT every day.

ISSUE: Whether or not Rada is entitled to separation pay and OT pay.

HELD: Separation pay NO. Overtime pay Yes.

Separation Pay

The SC ruled that Rada was a project employee whose work was coterminous with the project for which he was hired.
Project employees, as distinguished from regular or non-project employees, are mentioned in Section 281 of the Labor Code
as those where the employment has been fixed for a specific project or undertaking the completion or termination of which
has been determined at the time of the engagement of the employee.

Project employees are not entitled to termination pay if they are terminated as a result of the completion of the project or
any phase thereof in which they are employed, regardless of the number of projects in which they have been employed by a
particular construction company. Moreover, the company is not required to obtain clearance from the Secretary of Labor in
connection with such termination.

OT Pay

Rada is entitled to OT pay. The fact that he picks up employees of Philnor at certain specified points along EDSA in going to
the project site and drops them off at the same points on his way back from the field office going home to Marikina, Metro
Manila is not merely incidental to Radas job as a driver. On the contrary, said transportation arrangement had been
adopted, not so much for the convenience of the employees, but primarily for the benefit of Philnor. As embodied in
Philnors memorandum, they allowed their drivers to bring home their transport vehicles in order for them to provide a
timely transport service and to avoid delay not really so that the drivers could enjoy the benefits of the company vehicles
nor for them to save on fair.

11. Sugue vs Triumph international

Sugue in May 1990 as Marketing Services Manager
Valderrama was hired in April 1993 as Direct Sales Manager
October 1999, Triumphs top management began to notice a sharp decline in the sales of the company.
Consequently, on June 1, 2000, Sugue and Valderrama filed a complaint with the NLRC against Triumph for
payment of money claims arising from allegedly unpaid vacation and sick leave credits, birthday leave and 14th month pay
for the period 1999-2000 (the period of the said decline in sales).
On June 19, 2000, Sugue and Valderrama personally attended the preliminary conference of the said case
That same day, both were asked to explain their whereabouts on June 19, 2000 from 9:06 a.m. to 11:15 a.m.
This was charged by Triumph as halfday to their vacation leave credit.
Petitioners with this regard and for other allegedly unreasonable discriminatory acts committed by Triumph wrote
the company a letter stating that they considered themselves constructively dismissed.
They filed for constructive dismissal.
LA ruled in favour of petitioners.
NLRC reversed the ruling.
CA partly granted petition, deleting atty fees and reducing moral damages.

ISSUE: Whether Triumph rightfully charged the absence due to Pre-Conf to their VL

RULING: With respect to the alleged discriminatory act, Triumph is justified in charging Sugue and Valderramas half-day
absence to their vacation leave credits. It is fair and reasonable for Triumph to do so considering that Sugue and Valderrama
did not perform work for one-half day on June 19, 2000.

The age-old rule governing the relation between labor and capital or management and employee is that a fair days wage
for a fair days labor. If there is no work performed by the employee there can be no wage or pay, unless of course, the
laborer was able, willing and ready to work but was illegally locked out, dismissed or suspended. It is hardly fair or just for an
employee or laborer to fight or litigate against his employer on the employers time.

In a case where a laborer absents himself from work because of a strike or to attend a conference or hearing in a case or
incident between him and his employer, he might seek reimbursement of his wages from his union which had declared the
strike or filed the case in the industrial court. Or, in the present case, he might have his absence from his work charged
against his vacation leave.


Petitioner is a labor union composed of faculty members of the respondent University of Pangasinan, an educational
institution duly organized and existing by virtue of the laws of the Philippines.

Th petitioner filed a complaint against the private respondent with the Arbitration Branch of the NLRC- Dagupan City
seeking: (a) the payment of Emergency Cost of Living Allowances (ECOLA) for November 7 to December 5, 1981, a semestral
break; (b) salary increases from the 60% of the incremental proceeds of increased tuition fees; and (c) payment of salaries
for suspended extra loads.

The petitioners members are full-time professors, instructors, and teachers of respondent University. The teachers in the
college level teach for a normal duration of 10 months a school year, divided into 2 semesters of 5 months each, excluding
the 2 months summer vacation. These teachers are paid their salaries on a regular monthly basis.

During the semestral break (Nov. 7- Dec. 5, 1981), they were not paid their ECOLA. The private respondent claims that the
teachers are not entitled thereto because the semestral break is not an integral part of the school year and there being no
actual services rendered by the teachers during said period, the principle of No work, no pay applies.
During the same school year (1981-1982), the private respondent was authorized by the Ministry of Education and Culture
to collect, from its students a 15% increase of tuition fees. Petitioners members demanded a salary increase effective the
first semester of said schoolyear to be taken from the 60% percent incremental proceeds of the said increased tuition fees
as mandated by the PD 451. Private respondent refused.

Yes. According to various Presidential Decrees on ECOLAs Allowances of Fulltime Employees . . . that Employees shall be
paid in full the required monthly allowance regardless of the number of their regular working days if they incur no absences
during the month. If they incur absences without pay, the amounts corresponding to the absences may be deducted from
the monthly allowance . . .; and on Leave of Absence Without Pay, that All covered employees shall be entitled to the
allowance provided herein when they are on leave of absence with pay.
The petitioners members are full-time employees receiving their monthly salaries irrespective of the number of working
days or teaching hours in a month. However, they find themselves in a situation where they are forced to go on leave during
semestral breaks. These semestral breaks are in the nature of work interruptions beyond the employees control. As such,
these breaks cannot be considered as absences within the meaning of the law for which deductions may be made from
monthly allowances. The No work, no pay principle does not apply in the instant case. The petitioners members received
their regular salaries during this period. It is clear from the provision of law that it contemplates a no work situation where
the employees voluntarily absent themselves. Petitioners, in the case at bar, do not voluntarily absent themselves during
semestral breaks. Rather, they are constrained to take mandatory leave from work. For this they cannot be faulted nor can
they be begrudged that which is due them under the law.

The intention of the law is to grant ECOLA upon the payment of basic wages. Hence, we have the principle of No pay, no
ECOLA the converse of which finds application in the case at bar. Petitioners cannot be considered to be on leave without
pay so as not to be entitled to ECOLA, for, as earlier stated, the petitioners were paid their wages in full for the months of
November and December of 1981, notwithstanding the intervening semestral break.

Although said to be on forced leave, professors and teachers are, nevertheless, burdened with the task of working during a
period of time supposedly available for rest and private matters. There are papers to correct, students to evaluate, deadlines
to meet, and periods within which to submit grading reports. Although they may be considered by the respondent to be on
leave, the semestal break could not be used effectively for the teachers own purposes for the nature of a teachers job
imposes upon him further duties which must be done during the said period of time. Arduous preparation is necessary for
the delicate task of educating our children. Teaching involves not only an application of skill and an imparting of knowledge,
but a responsibility which entails self dedication and sacrifice. It would be unfair for the private respondent to consider
these teachers as employees on leave without pay to suit its purposes and, yet, in the meantime, continue availing of their
services as they prepare for the next semester or complete all of the last semesters requirements.

Thus, the semestral break may also be considered as hours worked. For this, the teachers are paid regular salaries and, for
this, they should be entitled to ECOLA. The purpose of the law is to augment the income of employees to enable them to
cope with the harsh living conditions brought about by inflation; and to protect employees and their wages against the
ravages brought by these conditions

With regard to the second issue, under Section 3 of Presidential Decree 451, no increase in tuition or other school fees or
charges shall be approved 60% of the proceeds is allocated for increase in salaries or wages of the members of the faculty
and all other employees of the school concerned, and the balance for institutional development, student assistance and
extension services, and return to investments: Provided, That in no case shall the return to investments exceed twelve (12%)
per centum of the incremental proceeds; . . .
Such allowances must be taken in resources of the school not derived from tuition fees.

If the school happen to have no other resources to grant allowances and benefits, either mandated by law or secured by
collective bargaining, such allowances and benefits should be charged against the return to investments referred.

The law is clear. The 60% incremental proceeds from the tuition increase are to be devoted entirely to wage or salary
increases which means increases in basic salary. The law cannot be construed to include allowances which are benefits over
and above the basic salaries of the employees. To charge such benefits to the 60% incremental proceeds would be to reduce
the increase in basic salary provided by law.

Law provides that 60% of tuition fee increase should go to wage increases and 40% to institutional developments, student
assistance, extension services, and return on investments. Framers of the law intended this portion (return on investments)
of the increases in tuition fees to be a general fund to cover up for the universitys miscellaneous expenses.

13. Sibal vs. Notre Dame of Greater Manila

Petitioner Delia R. Sibal was employed as school nurse by private respondent Notre Dame of Greater Manila,
o she was compensated on a 12-month basis,
although she worked only during the ten-month period of classes.
She was not required to report for work for the entire Christmas and summer vacations.
o However, respondent's director, Fr. Gonzales, requested her to shorten her summer vacation,
From two weeks after the last day of classes to two weeks before the first day of classes of the next school year.
Petitioner acceded to the request
Fr. Gonzales required petitioner to report during that summer to help in the library. Petitioner contested the order,
stating that:
o it will necessitate a change in the terms and conditions of her employment
o that library work is alien to her profession as nurse
Later on, Fr. Gonzales was replaced by Fr. Pablo Garcia, as new director.
o required petitioner to report for work during the summer before the beginning of school year.
o Petitioner informed him that her contract does not require her to report for work during the summer vacation.
o Fr. Garcia promised to verify her allegation.
However, he failed to inform petitioner of his findings.
o Thus, in order that her failure to report for work may not be misinterpreted, petitioner filed leaves of absence
during the summer break.
Petitioner failed to receive her vacation pay.
During school year 1981-1982,
o petitioner was assigned to teach health subjects
This situation came about because the two (2) teachers of the health subjects had left the school.
o Petitioner, however, was not given compensation for teaching,
notwithstanding the fact that other teachers were duly compensated for extra work done.
o During the school year petitioner tried to arrange for a meeting with Fr. Garcia regarding her vacation pay,
but to no avail because Fr. Garcia was always busy and also suffered a heart attack which necessitated his
o In December 1981, petitioner received her 13th month pay which was computed on the basis of a 10-month period
Fr. Garcia again required petitioner to work during that summer to update all the clinical records of the students.
o petitioner objected by reiterating that her contract does not require her to report for work during summer
Respondent said that it was imperative for her to report for work during the summer because it is the best time to
update the clinical records when no students could disturb her
o In addition, she reminded Fr. Garcia that she had not received any compensation for teaching health subjects the
past school year.
Respondent said that petitioner was not entitled to extra compensation for teaching because teaching was
allegedly part of her regular working program as a school nurse.
On April 14, 1982, petitioner, apart from reiterating her objection to the order, called the attention of Fr. Garcia to
the school's failure to pay her salary for the summer of 1981 and of the deficiency in her 13th month pay for that year.
o Fr. Garcia refused to consider petitioner's demands and threatened to take drastic measures against her if she
remains obstinate in her refusal to follow his order to report for work that summer.
o Petitioner, for the fourth time, informed Fr. Garcia that her contract does not require her to report for work during
summer, and she does not intend to do so that summer of 1982.
Petitioner filed a complaint for non-payment of the following; (1) vacation pay for four (4) summer months; (2)
compensation for teaching health subjects; and (3) deficiency in the 13th month pay for 1981.
o Summons was served on respondent school on the opening day of classes on June 14, 1982.
o That very day when petitioner reported for work, respondent school served petitioner her letter of termination
effective immediately and it also submitted a copy of the termination paper to the Ministry of Labor and Employment
o The following day, petitioner filed an amended complaint, adding two more charges: illegal dismissal and unfair
labor practice.
petitioner alleges the following:
o Respondent NLRC failed to give full respect to the constitutional mandate on security of tenure when the majority
decision affirmed the decision of the Labor Arbiter:
Separating and dismissing petitioner on the basis of her perception that petitioner and the director could no longer
work harmoniously.
The award of separation pay would defeat and render nugatory the Constitutional guaranty of security of tenure.
o Petitioner is entitled to compensation relative to her teaching job which is distinct and separate from her duties as
school nurse.
Public respondent NLRC, however, submits the following:
o The relationship between petitioner and respondent school had come to the point that reinstatement of petitioner
would cause undue burden on both parties.
It would affect petitioner's performance of her duties as school nurse and private respondent's business.
o Teaching health subjects is allied to petitioner's job as school nurse, particularly so when the same is done within
the official eight (8) working hour schedule.

o Whether or not petitioner is entitled to compensation for teaching health subjects? Yes
o Whether or not petitioner is entitled to reimbursements for services rendered during semestral breaks? YES

o The respondent NLRC erred is sustaining the Labor Arbiter's ruling that petitioner is not entitled to compensation
for teaching health subjects allegedly because:
o petitioner taught during her regular working hours;
o the subject Health is allied to her profession as nurse;
o she and respondent school had no clear understanding regarding extra compensation.

o Petitioner is entitled to compensation for teaching health subjects.

o Petitioner's teaching the subject in the classroom and her administering to the health needs of students in the
clinic involve two different and distinct jobs.
o Cannot be equated with each other for they refer to different functions.
Teaching requires preparation of lesson plans, examinations and grades, while clinical work entails preparation of
clinical records and treating illnesses of students in school.
o There can be no doubt that teaching health subjects is extra work for petitioner, and therefore necessitates extra
it has been the practice of the school to pay extra compensation to teachers who were given extra load even during
regular working hours

o The court cited that in University of Pangasinan Faculty Union v. University of Pangasinan:
o that semestral breaks may be considered as "hours worked" under the Rules implementing the Labor Code
o that regular professors and teachers are entitled to ECOLA (Emergency Cost of Living Allowance) during the
semestral breaks, their "absence" from work not being of their own will.
WHEREFORE, the appealed decision of respondent NLRC is hereby SET ASIDE. Private respondent is hereby ordered to
REINSTATE petitioner to her former position without loss of seniority rights and with backwages for three (3) years from the
time of her illegal dismissal; to pay her the regular extra compensation relative to her teaching health subjects; and to pay
her moral damages, the amount of which shall be determined by respondent NLRC. Let this case be remanded to the NLRC
for the proper implementation of this decision.
Presented before the SC for review is the decision of public respondent National Labor Relations Commission handed down
on March 16, 1988 reversing the decision of the Philippine Oversees Employment Administration and correspondingly
dismissing the cases for lack of merit. The POEA decision granted overtime pay to petitioners equivalent to 30% of their
basic pay.
On April 17 and 18,1985, petitioners, all seamen, entered into separate contracts of employment with the Golden Light
Ocean Transport, Ltd., through its local agency, private respondent ACE MARITIME AGENCIES, INC. with their respective
ratings and monthly salary rates. Petitioners were deployed on May 7, 1985, and discharged on July 12, 1986. Thereafter,
petitioners collectively and/or individually filed complaints for non-payment of overtime pay, vacation pay and terminal pay
against private respondent. In addition, they claimed that they were made to sign their contracts in blank; that although
they agreed to render services on board the vessel Rio Colorado managed by Golden Light Ocean Transport, Ltd., the vessel
they actually boarded was MV "SOIC I" managed by Columbus Navigation; and more so, petitioners de Castro and de Jesus
charged that although they were employed as ordinary seamen, they actually performed the work and duties of Able
Private respondent was furnished with copies of petitioners' complaints and summons, but it failed to file its answer within
the reglementary period. Thus, on January 12, 1987, an Order was issued declaring that private respondent has waived its
right to present evidence in its behalf and that the cases are submitted for decision.
On August 5, 1987, the Philippine Overseas Employment Administration (POEA) rendered a Decision DISMISSING
petitioners' claim for terminal pay but GRANTED their prayer for leave pay and overtime pay. Private respondent appealed
from the POEA's Decision to the NLRC on August 24, 1987. On March 16, 1988, the NLRC promulgated a Decision,
REVERSING and SETTING ASIDE and another one entered dismissing the cases for lack of merit.
On May 8, 1988, petitioners filed an Urgent Motion for Reconsideration of the NLRC's Decision but the same was denied by
the NLRC for lack of merit in its Resolution dated September 12, 1988. Hence, this appeal from the decision and resolution
of the respondent NLRC.
Petitioners allege that respondent Commission, NLRC, gravely abused its discretion or erred in reversing and setting aside
the POEA decision and correspondingly dismissing the appeal of petitioners, allegedly in contravention of law and
Private respondent maritime company disclaims the aforesaid allegations of petitioners. The Solicitor General, arguing for
public respondent NLRC, contends that:
The NLRC did not abuse its discretion in the rendition of subject decision because the evidence presented by petitioners in
support of their complaint is by itself sufficient to back up the decision. The issue of the disallowance of overtime pay stems
from an interpretation of particular provisions of the employment contract.

WON respondent Commission NLRC gravely abused its discretion or erred in REVERSING the decision of POEA (in granting
overtime pay to petitioners equivalent to 30% of their basic pay).
The NLRC cannot be faulted for disallowing the payment of overtime pay because it merely straightened out the distorted
interpretation asserted by petitioners and defined the correct interpretation of the provision on overtime pay embodied in
the contract conformably with settled doctrines on the matter. Notably, the NLRC ruling on the disallowance of overtime pay
is ably supported by the fact that petitioners never produced any proof of actual performance of overtime work.
Petitioners have conveniently adopted the view that the "guaranteed or fixed overtime pay of 30% of the basic salary per
month" embodied in their employment contract should be awarded to them as part of a "package benefit." They have
theorized that even without sufficient evidence of actual rendition of overtime work, they would automatically be entitled
to overtime pay. Their theory is erroneous for being illogical and unrealistic. Their thinking even runs counter to the
intention behind the provision. The contract provision means that the fixed overtime pay of 30% would be the basis for
computing the overtime pay if and when overtime work would be rendered. Simply, stated, the rendition of overtime work
and the submission of sufficient proof that said work was actually performed are conditions to be satisfied before a seaman
could be entitled to overtime pay which should be computed on the basis of 30% of the basic monthly salary. In short, the
contract provision guarantees the right to overtime pay but the entitlement to such benefit must first be established.
Realistically speaking, a seaman, by the very nature of his job, stays on board a ship or vessel beyond the regular eight-hour
work schedule. For the employer to give him overtime pay for the extra hours when he might be sleeping or attending to
his personal chores or even just lulling away his time would be extremely unfair and unreasonable.
Reiterated in the case of National Shipyards and Steel Corporation v. CIR (3 SCRA 890), the SC ruled:
We cannot agree with the Court below that respondent Malondras should be paid overtime compensation for every hour in
excess of the regular working hours that he was on board his vessel or barge each day, irrespective of whether or not he
actually put in work during those hours. Seamen are required to stay on board their vessels by the very nature of their
duties, and it is for this reason that, in addition to their regular compensation, they are given free living quarters and
subsistence allowances when required to be on board. It could not have been the purpose of our law to require their
employers to pay them overtime even when they are not actually working; otherwise, every sailor on board a vessel would
be entitled to overtime for sixteen hours each day, even if he spent all those hours resting or sleeping in his bunk, after his
regular tour of duty. The correct criterion in determining whether or not sailors are entitled to overtime pay is not,
therefore, whether they were on board and cannot leave ship beyond the regular eight working hours a day, but whether
they actually rendered service in excess of said number of hours.

15. Philippine Airlines vs NLRC (1999) 302 SCRA 582

Private respondent was employed as flight surgeon at petitioner company. He was assigned at the PAL Medical Clinic at
Nichols and was on duty from 4:00 in the afternoon until 12:00 midnight. On February 17, 1994, at around 7:00 in the
evening, private respondent left the clinic to have his dinner at his residence, which was about five-minute drive away. A
few minutes later, the clinic received an emergency call from the PAL Cargo Services.
One of its employees, Mr. Manuel Acosta, had suffered a heart attack. The nurse on duty, Mr. Merlino Eusebio, called
private respondent at home to inform him of the emergency. The patient arrived at the clinic at 7:50 in the evening and Mr.
Eusebio immediately rushed him to the hospital. When private respondent reached the clinic at around 7:51 in the evening,
Mr. Eusebio had already left with the patient. Mr. Acosta died the following day. Upon learning about the incident, PAL
Medical Director Dr. Godofredo B. Banzon ordered the Chief Flight Surgeon to conduct an investigation. The Chief Flight
Surgeon required private respondent to explain why no disciplinary sanction should be taken against him.
In his explanation, private respondent asserted that he was entitled to a thirty-minute meal break; that he immediately left
his residence upon being informed by Mr. Eusebio about the emergency and he arrived at the clinic a few minutes later; that
Mr. Eusebio panicked and brought the patient to the hospital without waiting for him. Finding private respondents
explanation unacceptable, the management charged private respondent with abandonment of post while on duty. He was
given ten days to submit a written answer to the administrative charge.
In his answer, private respondent reiterated the assertions in his previous explanation. He further denied that he
abandoned his post on February 17, 1994. He said that he only left the clinic to have his dinner at home. In fact, he
returned to the clinic at 7:51 in the evening upon being informed of the emergency.
Issue: WON being a full-time employee is obliged to stay in the company premises for not less than eight (8) hours.
Held: Employees are not prohibited from going out of the premises as long as they return to their posts on time.
Articles 83 and 85 of the Labor Code read: Normal hours of workThe normal hours of work of any employee shall not
exceed eight (8) hours a day.
Health personnel in cities and municipalities with a population of at least one million (1,000,000) or in hospitals and clinics
with a bed capacity of at least one hundred (100) shall hold regular office hours for eight (8) hours a day, for five (5) days a
week, exclusive of time for meals, except where the exigencies of the service require that such personnel work for six (6)
days or forty-eight (48) hours, in which case they shall be entitled to an additional compensation of at least thirty per cent
(30%) of their regular wage for work on the sixth day. For purposes of this Article, health personnel shall include: resident
physicians, nurses, nutritionists, dieticians, pharmacists, social workers, laboratory technicians, paramedical technicians,
psychologists, midwives, attendants and all other hospital or clinic personnel.
Art. 85. Meal periods.Subject to such regulations as the Secretary of Labor may prescribe, it shall be the duty of every
employer to give his employees not less than sixty (60) minutes time-off for their regular meals.

Section 7, Rule I, Book III of the Omnibus Rules Implementing the Labor Code further states:
Sec. 7. Meal and Rest Periods.Every employer shall give his employees, regardless of sex, not less than one (1) hour time-
off for regular meals, except in the following cases when a meal period of not less than twenty (20) minutes may be given by
the employer provided that such shorter meal period is credited as compensable hours worked of the employee;
(a) Where the work is non-manual work in nature or does not involve strenuous physical exertion;
(b) Where the establishment regularly operates not less than sixteen hours a day;
(c) In cases of actual or impending emergencies or there is urgent work to be performed on machineries, equipment or
installations to avoid serious loss which the employer would otherwise suffer; and
(d) Where the work is necessary to prevent serious loss of perishable goods.
Rest periods or coffee breaks running from five (5) to twenty (20) minutes shall be considered as compensable working
Thus, the eight-hour work period does not include the meal break. Nowhere in the law may it be inferred that employees
must take their meals within the company premises. Employees are not prohibited from going out of the premises as long
as they return to their posts on time. Private respondents act of going home to take his dinner does not constitute

16. Sime Darby Pilipinas, Inc. vs NLRC

289 SCRA 86 Labor Law Labor Relations Management Prerogative
The workers of Sime Darby Pilipinas, Inc. have a an 8-hour daily schedule which starts at 7:45 am and ends at 3:45 pm. They
have a 30-minute paid lunch break but during said break, they are on call hence can be pulled out at any time if the need
arises. However, in August 1992, Sime Darby issued a memorandum which changed the working schedule from 7:45 am to
4:45 pm. This time, all employees will have a one-hour lunch break which is no longer paid but at the same time, employees
will no longer be on call.

The labor union (Sime Darby Salaried Employees Association) opposed the revised schedule. The union insists that the
scrapping of the 30-minute paid lunch break is a diminution of benefits.

ISSUE: Whether or not the new memorandum constitutes diminution of benefits.

HELD: No. It is a valid exercise of management prerogative. In the old schedule, the workers were paid for eight hours and
included in that is the paid 30-minute lunch break. In the new schedule, the workers are still paid for 8 hours, so theres
really no diminution of benefit. It would be unfair on the part of Sime Darby for the workers to be paid still for their new 1
hour break even though this time they are no longer on call. If that would be the case, the workers will be unjustly
In this case, it is the right of Sime Darby as the employer to change the work schedules of the workers so long as such
prerogative is exercised in good faith for the advancement of the employers interest and not for the purpose of defeating or
circumventing the rights of the employees under special laws or under valid agreements. Further, the new work schedule
also benefits the workers as they can now enjoy a longer lunch break of 1 hour instead of the old 30-minute break and they
can enjoy it without being interrupted as theyre no longer on call. For a full one-hour undisturbed lunch break, the
employees can freely and effectively use this hour not only for eating but also for their rest and comfort which are
conducive to more efficiency and better performance in their work.


The respondents filed a petition against the petitioner praying: 1) payment of their unpaid back wages for work done on
Sundays and legal holidays plus 25c/c additional compensation from date of their employment up to June 30, 1962; 2)
payment of extra compensation on work done at night; 3) reinstatement of Januario Referente and Oscar Echalar to their
former positions with back salaries; and, as against the respondent union, for its disestablishment and the refund of all
monies it had collected from petitioners.

The respondent court rendered its decision that:

1. The claim of the petitioners for payment of back wages corresponding to the first four hours work rendered on every
other Sunday and first four hours on legal holidays should be denied for lack of merit;

2. Respondent Mercury Drug Company, Inc. is hereby ordered to pay the sixty- nine (69) petitioners: (a) An additional sum
equivalent to 25% of their respective basic or regular salaries for services rendered on Sundays and legal holidays during the
period from March 20, 1961 up to June 30, 1962; and (b) Another additional sum or premium equivalent to 25% of their
respective basic or regular salaries for nighttime services rendered from March 20, 1961 up to June 30, 1962; and

3. Petitioners' petition to convert them to monthly employees should be, as it is hereby, denied for lack of merit. Not
satisfied with the decision, the respondents filed a motion for its reconsideration. The motion for reconsideration, was
however, denied by the Court en banc.


a. WON private respondent is entitled to claims for 25% additional compensation performing work during Sunday and legal

b. WON the 25% compensation had already been included in the private respondents monthly salaries?

c. WON the contracts of employment were null and void was not put in issue, hence, the respondent court pursuant to the
Rules of Court should have refrained from ruling that such contracts of employment were null and void?


The Supreme Court dismissed the petition. On the first issue, based on Sec. 4 CA No. 444, No person, firm or corporation,
business establishment or place of center of labor shall compel an employee or laborer to work during Sundays and legal
holidays unless he is paid an additional sum of at least twenty-five per centum of his regular remuneration: PROVIDED,
HOWEVER, That this prohibition shall not apply to public utilities performing some public service such as supplying gas,
electricity, power, water, or providing means of transportation or communication.
In this case, the petitioner does not fall on exemptions. On the second issue, their 25% additional compensation for work
done on Sundays and Legal Holidays were not included in their respective monthly salaries. The petitioner contention was
not supported by substantial evidence.

The last issue, the Mercury Drug Co., Inc., maintains a chain of drugstores that are open every day of the week and, for
some stores, up to very late at night because of the nature of the pharmaceutical retail business. The respondents knew that
they had to work Sundays and holidays and at night, not as exceptions to the rule but as part of the regular course of
employment. Presented with contracts setting their compensation on an annual basis with an express waiver of extra
compensation for work on Sundays and holidays, the workers did not have much choice.

The private respondents were at a disadvantage insofar as the contractual relationship was concerned. Workers in our
country do not have the luxury or freedom of declining job openings or filing resignations even when some terms and
conditions of employment are not only onerous and in-equitous but illegal.

It is precisely because of this situation that the framers of the Constitution embodied the provisions on social justice
(Section 6, Article 11) and protection to labor (Section 9, Article I I) in the Declaration of Principles And State Policies.

Section3.Night Differential pay.The Company shall continue to pay nightshift differential for work during the first and third
shifts to all covered employees within the bargaining unit as follows:
For the First Shift (11:00 p.m. to 7:00 a.m.), the differential pay will be 20% of the basic rate. For the Third Shift (3:00 p.m. to 11:00
p.m.), the differential pay will be 15% of the basic rate.
However, for overtime work, which extends beyond the regular day shift (7:00 a.m. to 3:00 p.m.), there [will] be no night differential
pay added before the overtime pay is calculated.


Section9.Longevity pay.The company shall grant longevity pay of P30.00 per month effective July 1, 1998 and every year

During the effectivity of the first three CBAs, petitioner paid night shift differentials to other workers who were members of
respondent for work performed beyond 3:00 p.m. Petitioner also paid night shift differential for work beyond 3:00 p.m. during the
effectivity of the 4th CBA. However, petitioner alleges that the payment of night shift differential for work performed beyond 3:00
p.m. during the 4th CBA was a mistake on the part of its accounting department.

Respondent Union filed a complaint with the National Conciliation and Mediation Board, alleging that petitioner failed to pay the
night shift differential and longevity pay of respondents members as provided in the 4th CBA. Petitioner and respondent failed to
amicably settle the dispute so they agreed to submit the issue to a voluntary arbitrator (VA).

VA ruled in favor of respondent (Union) that the inclusion of paragraph 3, Section 3, Article VIII of the 4th CBA disclosed the intent of
the parties to grant night shift differential benefits to employees who rendered work beyond the regular day shift. The Voluntary
Arbitrator ruled that if the intention were otherwise, paragraph 3 would have been deleted.

CA affirmed VA and held that petitioners act disclosed the parties intent to include employees in the second shift in the payment of
night shift differential.

The issue is whether workers are entitled to night shift differential for work performed beyond the regular day shift, from 7:00 a.m.
to 3:00 p.m.

YES. SC affirmed CA. The first paragraph of Section 3 provides that petitioner shall continue to pay night shift differential to workers
of the first and third shifts. It does not provide that workers who performed work beyond the second shift shall not be entitled to
night shift differential. The inclusion of the third paragraph is not intended to exclude the regular day shift workers from receiving
night shift differential for work performed beyond 3:00 p.m. It only provides that the night shift differential pay shall be excluded in
the computation of the overtime pay.
The CA correctly ruled that petitioner failed to present any convincing evidence to prove that the payment was erroneous. In fact, the
Court of Appeals found that even after the promulgation of the Voluntary Arbitrators decision and while the case was pending
appeal, petitioner still paid night shift differential for work performed beyond 3:00 p.m. It affirms the intention of the parties to the
CBA to grant night shift differential for work performed beyond 3:00 p.m.


The terms and conditions of a collective bargaining contract constitute the law between the parties. If the terms of the CBA are clear
and have no doubt upon the intention of the contracting parties, the literal meaning of its stipulation shall prevail.

In order to ascertain the intention of the contracting parties, the Voluntary Arbitrator shall principally consider their
contemporaneous and subsequent acts as well as their negotiating and contractual history and evidence of past practices.

19. Engineering Equipment vs Minister of Labor

133 SCRA 752 Labor Law Labor Standards Working Conditions and Rest Periods Overtime Pay Managerial Employee
not entitled to OT pay

In 1977, Miguel Aspera was contracted by Engineering Equipment, Inc. to work as a mechanical engineer in Saudi Arabia. He
was contracted to work for 10 hours a day. Later he sued Engineering Equipment claiming that he is entitled to overtime pay
because under the law, the working hours should be 8 hours a day only hence the extra 2 hours should be paid as overtime.
Engineering Equipment averred that Aspera is a managerial employee who was exempted from overtime pay.

ISSUE: Whether or not Aspera is entitled to OT pay.

HELD: No. Engineering Equipment was able to prove that Aspera is part of the managerial staff, a fact which Aspera did not
deny. Aspera was a managerial employee exercising supervision and control over rank-and-file employees with power to
recommend disciplinary action or their dismissal. As a managerial employee within the meaning of the law, he was not
entitled to overtime pay.

20. Pal Employees Savings and Loan Association, Inc. vs. NLRC

Facts: The respondent used to be a security guard under the employ of the petitioner company. He works for 12 hours a day
and is receiving a monthly salary. He was then dismissed by the petitioner company. Because of this, the respondent filed a
complaint with the Labor Arbiter for the payment of his overtime pay. The Labor Arbiter ruled that the respondent is
entitled to an overtime pay. The NLRC affirmed the decision of the Labor Arbiter. Hence, the current petition.

The petitioner contends that the fact that the monthly salary of the petitioner is higher than the minimum wage provided by
law is already compensatory of the excess of 4 hours of work rendered by the said employee. It argues that the salary of the
petitioner already includes the payment for the excess of 4 hours of work rendered by the respondent. It also contends that
since there is a meeting of the minds between the respondent and the petitioner, there is already a perfected contract
which means that the parties are bound by their agreements.

Issue: Whether or not the respondent is entitled to an overtime pay.

Ruling: The Supreme Court ruled that the respondent is entitled to an overtime pay. The contention of the petitioner that
since the respondents monthly salary is higher than the minimum wage, it is already commensurate of the 4 hours excess
of work rendered by the respondent. The Supreme Court held that the fact that ones salary is higher than the minimum
wage does not in any way offset the other benefits that are due to the employees, in the absence of an agreement to the
contrary. To consider the overtime pay of the respondent included in his monthly salary would be in contravention of the
rule against non-diminution of benefits and a violation of the Labor Code since it prescribes a certain manner on how
overtime pay is included. Moreover, the Supreme Court found that contrary to what the petitioner aver, as shown in the
computation of the petitioner itself, the monthly salary of the respondent is only a basic salary which is exclusive of all the
other benefits that the respondent is to receive.

With regard to the petitioners second contention that there is already a perfected contract, hence the terms and conditions
imposed therein binds the parties to the contract, the Supreme Court held that while such contention has the weight and
force of law, it is still subject to certain exception. The general right to contract is subject to a limitation that such terms and
conditions must not be contrary to law, public order, public policy, morals and good customs. Employment contracts are
imbued with public interest and are therefore subject to the police power of the state. The subject contract in the case at
bar is contrary to labor laws. Therefore, not binding to the parties of the case.

21. bisig manggagawa vs nlrc (supra)

22. stolt-nielsen marine services vs nlrc
23. PCL Shipping Philippines, Inc v. NLRC
In April 1996, Rusel was employed as seaman by PCL Shipping Philippines for and in behalf of its foreign principal, U-Ming
Marine. Rusel thereby joined the vessel MV Cemtex for 12 months with a basic monthly salary of US$400.00, living
allowance of US$140.00, fixed overtime rate of US$120.00 per month, vacation leave with pay of US$40.00 per month and
special allowance of US$175.00.
On July 16, 1996, while Rusel was cleaning the vessel's kitchen, he slipped, and as a consequence thereof, he suffered a
broken/sprained ankle on his left foot. A request for medical examination was flatly denied by the captain of the vessel. On
August 13, 1996, feeling an unbearable pain in his ankle, Rusel jumped off the vessel using a life jacket and swam to shore.
He was brought to a hospital where he was confined for 8 days. On August 22, 1996, a vessel's agent fetched Rusel from the
hospital and was required to board a plane bound for the Philippines. On September 26, 1996, Rusel filed a complaint for
illegal dismissal, non-payment of wages, overtime pay, claim for medical benefits, sick leave pay and damages against PCL
Shipping and U-Ming Marine before the arbitration branch of the NLRC. In their answer, the latter alleged that Rusel
deserted his employment by jumping off the vessel.
Labor Arbiter held that respondent is liable for the unjust repatriation of the complainant. NLRC affirmed the finding of the
Labor Arbiter.

Issue: Whether or not respondent was guilty of desertion to justify his dismissal.
Held: No
For a seaman to be considered as guilty of desertion, it is essential that there be evidence to prove that if he leaves the ship
or vessel in which he had engaged to perform a voyage, he has the clear intention of abandoning his duty and of not
returning to the ship or vessel. In the present case, however, petitioners failed to present clear and convincing proof to show
that when private respondent jumped ship, he no longer had the intention of returning. The fact alone that he jumped off
the ship where he was stationed, swam to shore and sought medical assistance for the injury he sustained is not a sufficient
basis for petitioners to conclude that he had the intention of deserting his post.

Issue: Whether or not the provisions of the Constitution as well as the Labor Code which afford protection to labor apply to
Filipino employees working abroad.
Held: Yes, it does.
Petitioners admit that they did not inform private respondent in writing of the charges against him and that they failed to
conduct a formal investigation to give him opportunity to air his side. However, petitioners contend that the twin
requirements of notice and hearing applies strictly only when the employment is within the Philippines and that these need
not be strictly observed in cases of international maritime or overseas employment.
The Court does not agree. The provisions of the Constitution as well as the Labor Code which afford protection to labor
apply to Filipino employees whether working within the Philippines or abroad. Moreover, the principle of lex loci contractus
(the law of the place where the contract is made) governs in this jurisdiction. In the present case, it is not disputed that the
Contract of Employment entered into by and between petitioners and private respondent was executed here in the
Philippines with the approval of the Philippine Overseas Employment Administration (POEA). Hence, the Labor Code
together with its implementing rules and regulations and other laws affecting labor apply in this case. Accordingly, as to the
requirement of notice and hearing in the case of a seafarer, the Court has already ruled in a number of cases that before a
seaman can be dismissed and discharged from the vessel, it is required that he be given a written notice regarding the
charges against him and that he be afforded a formal investigation where he could defend himself personally or through a
representative. Hence, the employer should strictly comply with the twin requirements of notice and hearing without
regard to the nature and situs of employment or the nationality of the employer. Petitioners failed to comply with these
twin requirements.
Wherefore, the petition is partly granted. The Court of Appeals' Decision dated December 18, 2001 and Resolution dated
April 10, 2002 are affirmed with modification to the effect that the award of US$1620.00 representing private respondent's
three months salary is reduced to US$1200.00. The award of US$550.00 representing private respondent's living allowance,
overtime pay, vacation pay and special allowance for two months is deleted and in lieu thereof, an award of US$710.00 is
granted representing private respondent's living allowance, special allowance and vacation leave with pay for the same
24. Mercader vs Manila Polo Club
25. Pal Employees Savings and Loan Association, Inc. vs. NLRC (supra)

26. Damasco vs NLRC

27. Nwsa VS nwsa CONSOLIDATED UNIONS (supra)