Caltex(Philippines) Inc.

vs Philippine Labor
Organization G.R. No. L-9915, May 27, 1959
FACTS:

Del Rosario was hired by Caltex Inc. as labourer in its Pandacan Terminal. About 2months later, the c
ompany suspended him for insubordination and later filed a petition with the Industrial Court for aut
hority to dismiss him. After hearing, del Rosario was found guilty. However, ordered his reinstatemen
t, believing, the punishment was too severe.

ISSUE:

Whether or not the employee guilty of insubordination should be reinstated.

RULING:

No, he should not be reinstated and even if ordered by the court. Considering the period of time that
Del Rosario had been working before his suspension, 2 months, can be said that he was on temporary
or trial basis. Caltex has the right to place him under this condition to determine his fitness and comp
etency.

Furthermore, the acts of insubordination for which del Rosario was found guilty consist od disorderly
conduct and wilful disobedience, committed in a very short period of 2months and willful disobedienc
e is a justifiable ground for an employee’s discharge.

Union of Filipro Employees v. Vivar

Facts:

Filipro Inc. (now Nestle Philippines, Inc.) had excluded sales personnel from the holiday pay award
and changed the divisor in the computation of benefits from 251 to 261 days. Both Filipro and the
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Union of Filipro Employees submitted the case for voluntary arbitration and appointed respondent
Benigno Vivar, Jr. as voluntary arbitrator. In his decision, Vivar directed Filipro to “pay its monthly
paid employees holiday pay pursuant to Article 94 of the Code, subject only to the exclusions and
limitations specified in Article 82 and such other legal restrictions as are provided for in the Code.”

With the decision by Vivar, Filipro filed a motion for clarification seeking (1) the limitation of the award
to 3 years, (2) exclusion of its sales personnel (consisted by salesmen, sales representatives, truck
drivers, merchandisers and medical representatives) from the award of the holiday pay, and (3)
deduction from the holiday pay award of overpayment for overtime, night differential, vacation and
sick leave benefits due to the use of 251 divisor. On the same light, the Union filed their answer that
the award should be made effective from the date of effectivity of the Labor Code, their sales
personnel are not field personnel and are therefore entitled to holiday pay, and the use of 251 as
divisor is an established employee benefit which cannot be diminished.

Vivar issued an order declaring that the effectivity of the holiday pay award shall retroact to November
1, 1974, the date of effectivity of the labor Code. However, he adjudged the sales personnel are field
personnel and, as such, are not entitled to holiday pay. He likewise ruled that the divisor should be
changed from 251 to 261 due to the grant of 10 days’ holiday pay and ordered the reimbursement of
overpayment for overtime, night differential, vacation and sick leave pay due to the use of 251 days
as divisor.

Treating the motions for partial reconsideration of the parties, Vivar forwarded the case to the NLRC,
which remanded the case to Vivar on the ground that it has no jurisdiction to review decisions in
voluntary arbitration cases. In a letter, Vivar refused to take cognizance of the case because,
according to him, he had resigned from service already.

Ruling:

1. Whether or not Nestle’s sales personnel are entitled to holiday pay

Under Article 82, field personnel are not entitled to holiday pay. Said article defines field personnel as
“non-agricultural employees who regularly perform their duties away from the principal place of
business or branch office of the employer and whose actual hours of work in the field cannot be
determined with reasonable certainty.”

It is undisputed that these sales personnel start their field work at 8:00 a.m. after having reported to
the office and come back to the office at 4:00 p.m. or 4:30 p.m. if they are Makati-based. However,
the Union maintains that the period between 8:00 a.m. to 4:00 or 4:30 p.m. comprises the sales
personnel’s working hours which can be determined with reasonable certainty.

However, the court does not agree. The law requires that the actual hours of work in the field be
reasonably ascertained. The company has no way of determining whether or not these sales
personnel, even if they report to the office before 8:00 a.m. prior to field work and come back at 4:30
p.m., really spend the hours in between in actual field work.

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Moreover, the Court fails to see how the company can monitor the number of actual hours spend in
field work by an employee through imposition of sanctions on absenteeism.

2. Whether or not, related to the award of holiday pay, the divisor should be changed from 251 to 261 days and
whether or not the previous use of 251 as divisor resulted in overpayment for overtime

The use of 251 days’ divisor by Filipro indicates that holiday pay is not yet included in the employee’s
salary, otherwise the divisor should have been 261.

It must be stressed that the daily rate, assuming there are no intervening salary increases, is a
constant figure for the purpose of computing overtime and night differential pay and commutation of
sick and vacation leave credits. Necessarily, the daily rate should also be the same for computing the
10 unpaid holidays.

The respondent Arbitrator’s order to change the divisor from 251 to 261 days would result in a lower
daily rate which is violative of the prohibition or non-diminution of benefits found in Article 100 of the
Labor Code. To maintain the same daily rate if the divisor is adjusted to 261 days, then the dividend,
which represents the employee’s annual salary, should correspondingly be increased too incorporate
the holiday pay.

Moreover, the reckoning period for the application of the holiday award is October 23, 1984.

JPL MARKETING PROMOTIONS,v. CA

G.R. No. 151966 July 8, 2005 TINGA, J.:

petitioners JPL MARKETING PROMOTIONS,

respondents COURT OF APPEALS, NATIONAL LABOR RELATIONS COMMISSION, NOEL

GONZALES, RAMON ABESA III and FAUSTINO ANINIPOT

summary JPL stopped direct merchandising in employees assigned location. They were
requested to wait for further notice for new reassignment. There was no illegal
dismissal mainly because the employees were the ones who severed ties with JPL
within the 6-month period allotted to the employers to resume work or reassign its
employees pursuant to art 286 of the LC.

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facts of the case

 JPL is a domestic corporation engaged in the business of recruitment and placement of workers, while
private respondents Noel Gonzales, Ramon Abesa III and Faustino Aninipot were employed by JPL as
merchandisers on separate dates and assigned at different establishments in Naga City and Daet,
Camarines Norte as attendants to the display of California Marketing Corporation, one of JPL clients.
 13 Aug ‘96: JPL notified private respondents that CMC would stop its direct merchandising activity in the
Bicol Region, Isabela, and Cagayan Valley effective 15 August 1996.
 They were advised to wait for further notice as they would be transferred to other clients.
 However, on 17 October 1996, private respondents Abesa and Gonzales filed before the NLRC
complaints for illegal dismissal, praying for separation pay, 13th month pay, service incentive leave
pay and payment for moral damages. Aninipot filed a similar case thereafter.
 LA Rivera dismissed complaints for lack of merit
 The LA said that Gonzales and Abesa applied with another store before the 6-month period
given by law to JPL to provide private respondents a new assignment. Thus, they may be
considered to have unilaterally severed their relation with JPL, and cannot charge JPL with
illegal dismissal.
 LA said that it was their obligatioin to wait until they were reassigned by JPL, and if after six
months they were not reassigned, they can file an action for separation pay but not for illegal
dismissal.
 The claims for 13th month pay and service incentive leave pay was also denied since private
respondents were paid way above the applicable minimum wage during their employment.
 NLRC affirmed LA but ordered Separation pay, based on their last salary rate and counted from the first
day of their employment with the respondent JPL up to the finality of this judgment; Service
Incentive Leave pay, and 13th month pay, computed as in No.1 hereof
 CA affirmed
issue

WON private respondents are entitled to separation pay, 13th month pay and service incentive
leave pay - YES

What should be the reckoning point for computing said awards. – From the time the employees
severed their ties with JPL

ratio

 The employee is granted separation pay:

 Under Arts. 283 and 284 of the Labor Code, separation pay is authorized only in cases of
dismissals due to any of these reasons: (a) installation of labor saving devices; (b)
redundancy; (c) retrenchment; (d) cessation of the employer's business; and (e) when the
employee is suffering from a disease and his continued employment is prohibited by
law or is prejudicial to his health and to the health of his co-employees.
 As a measure of social justice in those cases where the employee is validly dismissed for
causes other than serious misconduct or those reflecting on his moral character, but only
when he was illegally dismissed

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  Under Sec. 4(b), Rule I, Book VI of the Implementing Rules to Implement the Labor
Code that provides for the payment of separation pay to an employee entitled to
reinstatement but the establishment where he is to be reinstated has closed or has ceased
operations or his present position no longer exists at the time of reinstatement for
reasons not attributable to the employer.
 The common denominator of the instances where payment of separation pay is
warranted is that the employee was dismissed by the employer.
 In the instant case, there was no dismissal to speak of. Private respondents were simply not
dismissed at all, whether legally or illegally. What they received from JPL was not a notice
of termination of employment, but a memo informing them of the termination of CMC’s
contract with JPL. More importantly, they were advised that they were to be reassigned. At
that time, there was no severance of employment to speak of.

(MAIN TOPIC)

 Furthermore, Art. 286 of the Labor Code allows the bona fide suspension of the operation of a
business or undertaking for a period not exceeding six 6 months, wherein an employee/employees are
placed on the so­called “floating status.”
 When that “floating status” of an employee lasts for more than six months, he may be considered to
have been illegally dismissed from the service. Thus, he is entitled to the corresponding benefits for his
separation, and this would apply to suspension either of the entire business or of a specific component
thereof.
 As clearly borne out by the records of this case, private respondents sought employment from other
establishments even before the expiration of the six (6)-month period provided by law. As they
admitted in their comment, all three of them applied for and were employed by another establishment
after they received the notice from JPL.
 JPL did not terminate their employment; they themselves severed their relations with JPL. Thus, they
are not entitled to separation pay.

 The Court is not inclined in this case to award separation pay even on the ground of
compassionate justice.
 The Court of Appeals relied on the cases wherein the Court awarded separation pay to
legally dismissed employees on the grounds of equity and social consideration.
 Said cases involved employees who were actually dismissed by their employers,
whether for cause or not. Clearly, the principle applies only when the employee is
dismissed by the employer, which is not the

 Nonetheless, JPL cannot escape the payment of 13th month pay and service incentive leave
pay to private respondents. Said benefits are mandated by law and should be given to
employees as a matter of right.
 They were not given their 13th month pay and service incentive leave pay while they
were under the employ of JPL. Instead, JPL provided salaries which were over and
above the minimum wage.
 The Court rules that the difference between the minimum wage and the actual salary
received by private respondents cannot be deemed as their 13th month pay and service

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 incentive leave pay as such difference is not equivalent to or of the same import as the
said benefits contemplated by law.
 The computation for both benefits should only be up to 15 August 1996, or the last day
that private respondents worked for JPL.
 To extend the period to the date of finality of the NLRC resolution would negate the
absence of illegal dismissal, or to be more precise, the want of dismissal in this case.
Besides, it would be unfair to require JPL to pay private respondents the said benefits
beyond 15 August 1996 when they did not render any service to JPL beyond that date.