Lab Stan

LABOR STANDARDS CASE DIGEST
BERNARDO VS NLRC, FAR EAST BANK

G.R. No. 122917, July 12, 1999
PANGANIBAN,
J
Facts:
The 43 petitioners are deaf-mutes who were hired on various periods from 1988 to 1993 by
respondent Far East Bank and Trust Co. as Money Sorters and Counters through a uniformly worded
agreement called "Employment Contract for Handicapped Workers". The said agreement provides for
the manner of how they are hired and be rehired, the amount of their wages (P118.00 per day),
period of employment (5 days a week, 8 hours a day, training for 1 month, 6 months period) and the
manner and methods of how their works are to be done (Sort out bills according to color; Count each
denomination per hundred, either manually or with the aid of a counting machine; Wrap and label bills
per hundred; Put the wrapped bills into bundles; and Submit bundled bills to the bank teller for
verification.) Many of their employments were renewed every six months. Claiming that they should
be considered as regular employees they filed a complaint for illegal dismissal and recovery of
various benefits.
Issue:
Whether the petitioners are considered regular employees
RULING:
Yes. They are considered regular employees
However, only the employees, who worked for more than six months and whose contracts were
renewed are deemed regular. Hence, their dismissal from employment was illegal. The stipulations in
the employment contracts indubitably conform with Article 80, however, the application of Article 280
of the Labor Code is justified because of the advent of RA No. 7277 (the Magna Carta for Disabled
Persons) which mandates that a qualified disabled employee should be given the same terms and
conditions of employment as a qualifiedable-bodied person (compensation, privileges, benefits, fringe
benefits, incentives or allowances) 27 of the petitioners are considered regular employees by
provision of law regardless of any agreement between the parties as embodied in article280 in
relation to article 281 of the Labor Code. The test is whether the former is usually necessary or
desirable in the usual business or trade of the employer. Hence, the employment is considered
regular, but only with respect to such activity, and while such activity exist. Without a doubt, thet ask
of counting and sorting bills is necessary and desirable to the business of respondent bank. When the
bank renewed the contract after the lapse of the six-month probationary period, the employees
thereby became regular employees. No employer is allowed to determine indefinitely the fitness of its
employees. Those who have workedfor only 6 months and employments were not renewed are not
considered regular employees.
OPINION:
The Court correctly finds that 27 of the handicapped workers are regular employees. The test is
whether the activity is usually necessary or desirable in the usual business or trade of the employer.
The employment is considered regular, but only with respect to such activity, and while such activity
exist. Without a doubt, the task of counting and sorting bills is necessary and desirable to the
business of respondent bank. As regular employees, the twenty-seven petitioners are entitled to
security of tenure; that is, their services may be terminated only for a just or authorized cause.
Brotherhood Labor Unity Movement of the Phil. v. Zamora
MARIA ANNY G. YANONG Page 1

Facts:
The petitioners are workers who have been employed at the San Miguel Parola Glass Factory as
“pahinantes” or “kargadors” for almost seven years. They worked exclusively at the SMC plant, never
having been assigned to other companies or departments of San Miguel Corp, even when the volume
of work was at its minimum. Their work was neither regular nor continuous, depending on the volume
of bottles to be loaded and unloaded, as well as the business activity of the company. However, work
exceeded the eight-hour day and sometimes, necessitated work on Sundays and holidays. -for this,
they were neither paid overtime nor compensation.
Sometime in 1969, the workers organized and affiliated themselves with Brotherhood Labor Unity
Movement (BLUM). They wanted to be paid to overtime and holiday pay. They pressed the SMC
management to hear their grievances. BLUM filed a notice of strike with the Bureau of Labor
Relations in connection with the dismissal of some of its members. San Miguel refused to bargain
with the union alleging that the workers are not their employees but the employees of an independent
labor contracting firm, Guaranteed Labor Contractor.
The workers were then dismissed from their jobs and denied entrance to the glass factory despite
their regularly reporting for work. A complaint was filed for illegal dismissal and unfair labor practices.
Issue:
Whether or not there was employer-employee (ER-EE) relationship between the workers and San
Miguel Corp.
Held:
YES. In determining if there is an existence of the (ER-EE) relationship, the four-fold test was used by
the Supreme Court. These are:
· The selection and engagement of the employee
· Payment of wages
· Power of dismissal
· Control Test- the employer’s power to control the employee with respect to the means and
methods by which work is to be accomplished
In the case, the records fail to show that San Miguel entered into mere oral agreements of
employment with the workers. Considering the length of time that the petitioners have worked with the
company, there is justification to conclude that they were engaged to perform activities necessary in
the usual business or trade. Despite past shutdowns of the glass plant, the workers promptly returned
to their jobs. The term of the petitioner’s employment appears indefinite and the continuity and
habituality of the petitioner’s work bolsters the claim of an employee status.
As for the payment of the workers’ wages, the contention that the independent contractors were paid
a lump sum representing only the salaries the workers where entitled to have no merit. The amount
paid by San Miguel to the contracting firm is no business expense or capital outlay of the latter. What
the contractor receives is a percentage from the total earnings of all the workers plus an additional
amount from the earnings of each individual worker.
The power of dismissal by the employer was evident when the petitioners had already been refused
entry to the premises. It is apparent that the closure of the warehouse was a ploy to get rid of the
petitioners, who were then agitating the company for reforms and benefits.

The inter-office memoranda submitted in evidence prove the company’s control over the workers.
That San Miguel has the power to recommend penalties or dismissal is the strongest indication of the
company’s right of control over the workers as direct employer.
CONTINENTAL MARBLE CORP. vs NLRC

G.R. No. L-43825 May 9, 1988
Facts
Nasayao claims to have been employed as plant manager with a monthly income equivalent of P
3,000 or 25% net monthly income of Continental Marble (Continental) [whichever is greater] which he
alleged to have failed his three months income sometime in 1974, thus sought from the NLRC
recovery of such unpaid salary. Continental denies such employment status and insists that the
relationship is that of a joint venture and clarified further that the agreement to pay Nasayao’s share
in the net income is limited if there is any income, and during those three months, Continental had no
such profits to speak of to give Nasayao his share. When the matter was submitted for voluntary
arbitration, Continental challenged the capacity of the arbitrator, but arbitrator refused and rendered
judgment awarding money claims to Nasayao. Petitioner appealed citing labor arbiter for grave abuse
of discretion and that the resulting judgment was not supported by evidence. Nasayao filed a motion
to dismiss citing that the Labor Arbiter’s decision is final [subject to exhaustion of administrative
remedies] and thereafter filed a motion for writ of execution. NLRC dismissed the appeal and ordered
petitioners to comply with the earlier decision.
Issue(s)
(1). Can the Court review decisions of voluntary arbitrators?
(2). Is Nasayao an employee?
Held
(1). No, subject to exceptions. The proper venue is through NLRC, except when a question of law is
involved or where a showing of abuse of authority or discretion in their official acts is properly raised
in petitions for certiorari. On the other hand, Nasayao’s contention on exhausting administrative
remedies is inapplicable to the case. The Court may review the decisions warrants jurisdiction or
rendered with grave abuse of discretion. Further, his contention that only questions of law and not
findings of fact are cognizable by the Court is unacceptable.
(2). No. The Court accords respect and finality to the decisions of quasi-judicial agencies, but when
the same is not supported by substantial evidence, the Court will intervene. In this case, the finding of
Nasayao as an employee of Continental by the Voluntary Arbitrator is not supported by substantial
evidence:
(1) It was impossible for Continental Marble to hire a plant manager on account of its business
reverses at the time;
(2) he was not included in the payroll nor in the list of employees submitted by the Continental
to SSS;
(3) the element of control is wanting for:
(a) Nasayao was free to conduct performance of his work;
(b) at his own time;
(c) was compensated as a result of his own efforts. And since there was no employment
relationship between Continental Marble and Nasayao, there is no basis for the award
of unpaid wages or salaries.
Insular Life v. NLRC

G.R. No. 84484 Nov. 15, 1989

Facts:
Insular Life (company) and Basiao entered into a contract by which Basiao was authorized to solicit
for insurance in accordance with the rules of the company. He would also receive compensation, in
the form of commissions. The contract also contained the relations of the parties, duties of the agent
and the acts prohibited to him including the modes of termination. After 4 years, the parties entered
into another contract – an Agency Manager’s Contact – and to implement this end of it, Basiao
organized an agency while concurrently fulfilling his commitment under the first contract. The
company terminated the Agency Manager’s Contract. Basiao sued the company in a civil action.
Thus, the company terminated Basiao’s engagement under the first contract and stopped payment of
his commissions.
ISSUE:
Whether Basiao had become the company’s employee by virtue of the contract, thereby placing his
claim for unpaid commissions
HELD:
No.Rules and regulations governing the conduct of the business are provided for in the Insurance
Code. These rules merely serve as guidelines towards the achievement of the mutually desired result
without dictating the means or methods to be employed in attaining it. Its aim is only to promote the
result, thereby creating no employer-employee relationship. It is usual and expected for an insurance
company to promulgate a set of rules to guide its commission agents in selling its policies which
prescribe the qualifications of persons who may be insured. None of these really invades the agent’s
contractual prerogative to adopt his own selling methods or to sell insurance at his own time and
convenience, hence cannot justifiable be said to establish an employer-employee relationship
between Basiao and the company. The respondents limit themselves to pointing out that Basiao’s
contract with the company bound him to observe and conform to such rules. No showing that such
rules were in fact promulgated which effectively controlled or restricted his choice of methods of
selling insurance. Therefore, Basiao was not an employee of the petitioner, but a commission agent,
an independent contract whose claim for unpaid commissions should have been litigated in an
ordinary civil action. Wherefore, the complain of Basiao is dismissed.
JARDIN V. NLRC
G.R. NO. 119268 February 23, 2000
Facts:
Petitioners were drivers of private respondent’s taxicabs under the boundary system whose earnings
were regularly deducted washing fee for the taxi units. Petitioners decided to form a labor union to
protect their rights and interests on the belief that the deductions made were illegal. Upon learning,
respondent refused to let petitioners drive their taxicabs when they reported for work. Aggrieved,
petitioners filed a complaint for illegal dismissal with the Labor Arbiter but the latter dismissed said
complaint. On appeal, the NLRC tribunal declared that petitioners are employees of private
respondent. On reconsideration however, the decision was reversed by the NLRC tribunal and held
that no employer-employee relationship between the parties exists.
Issue:
Whether petitioner taxi drivers are employees of respondent company.
Ruling: YES.

In a number of cases decided by this Court, we ruled that the relationship between jeepney
owners/operators on one hand and jeepney drivers on the other under the boundary system is that of
employer-employee and not of lessor-lessee. In the case of jeepney owners/operators and jeepney
drivers, the former exercise supervision and control over the latter. The management of the business
is in the owner’s hands. The owner as holder of the certificate of public convenience must see to it
that the driver follows the route prescribed by the franchising authority and the rules promulgated as
regards its operation. Now, the fact that the drivers do not receive fixed wages but get only that in
excess of the so-called “boundary” they pay to the owner/operator is not sufficient to withdraw the
relationship between them from that of employer and employee. We have applied by analogy the
doctrine to the relationships between bus owner/operator and bus conductor, auto-calesa
owner/operator and driver, and recently between taxi owners/operators and taxi drivers. Hence,
petitioners are undoubtedly employees of private respondent because as taxi drivers they perform
activities which are usually necessary or desirable in the usual business or trade of their employer.
MANILA GOLF CLUB, INC. VS. INTERMEDIATE APPELLATE COURT

[237 SCRA 207]
Facts:
This is originally filed with the Social Security Commission (SSC) via petition of 17 persons who
styled themselves as ³ Caddies of Manila Golf and Country Club-PTCCEA´ for the coverage and
availment of benefits of the Social Security Act as amended, PTCCEA (Philippine Technical, Clerical,
Commercial Employees Association) a labor organization where which they claim for membership.
The same time two other proceedings were filed and pending. These are certification election case
filed by PTCCEA on behalf of the same caddies of Manila Golf and Country club which was in favor of
the caddies and compulsory arbitration case involving PTCCEA and Manila Golf and Country Club
which was dismissed and ruled that there was no employer-employee relationship between the
caddies and the club.
Issue:
Whether rendering caddying services for members of golf clubs and their guests in said clubs
premises are the employees of such clubs and therefore within the compulsory coverage of the Social
Security System (SSS).
Ruling:
The Court does not agree that the facts logically point to the employer-employee relationship. In the
very nature of things, caddies must submit to some supervision of their conduct while enjoying the
privilege of pursuing their occupation within the premises and grounds of whatever club they do work
in. They work for the club to which they attach themselves on sufferance but, on the other hand, also
without having to observe any working hours, free to leave anytime they please, to stay away for as
long they like. These considerations clash frontally with the concept of employment. It can happen
that a caddy who has rendered services to a player on one day may still find sufficient time to work
elsewhere. Under such circumstances, the caddy may leave the premises and to go to such other
place of work that he wishes. These are things beyond the control of the petitioner. The caddy
(LLamar) is not an employee of petitioner Manila Golf and Country Club and the petitioner is under
no obligation to report him for compulsory coverage of SSS.
Dy Keh Beng vs. Int’l Labor and Maritime Union
Facts

A charge of unfair labor practice was filed against Dy Keh Beng, a proprietor of a basket factory,
bydismissing Solano and Tudla for their union activities.Dy Keh Beng contended that he did not know
Tudla and Solano was not his employee because the lattercame to the establishment only when there
was work which he did on pakiaw basis.Dy Keh Beng countered with a special defense of simple
extortion committed by the head of the laborunion.
Issue:
Whether there existed an employee-employer relation between petitioner and respondents
Ruling:
Yes. Evidence showed that the work of Solano and Tudla was continuous except in the event of
illness, although their services were compensated on piece basis. The control test calls for the
existence of the right to control the manner of doing the work, not the actual exercise of the right
considering that Dy Keh Beng is engaged in the manufacture of baskets known as “kaing”, those
working under Dy would be subject to Dy’s specifications such as the size and quality of the “kaing”.
And since the laborers are done at Dy’s establishments, it could be inferred that Dy could easily
exercise control upon them.
As to the contention that Solano was not an employee because he worked on piece basis, the court
ruled that it should be determined that if indeed payment by piece is just a method of compensation
and does not define the essence of the relation. Payment cannot be construed by piece where work
is done in such establishment so as to put the worker completely at liberty to turn him out and take it
another at pleasure.
Justice Perfecto also contended that pakyaw system is a labor contract between employers and
employees between capitalists and laborers.
Wherefore, the award of backwages is modified to an award of backwages for 3 years at the rated of
compensation the employees were receiving at the time of dismissal.
JOSE SONZA vs. ABS-CBN BROADCASTING CORPORATION

G.R. No. 138051 June 10, 2004
Facts:
In May 1994, ABS-CBN signed an agreement with the Mel and Jay Management and Development
Corporation (MJMDC). ABS-CBN was represented by its corporate officers while MJMDC was
represented by Sonza, as President and general manager, and Tiangco as its EVP and treasurer.
Referred to in the agreement as agent, MJMDC agreed to provide Sonza’s services exclusively to
ABS-CBN as talent for radio and television. ABS-CBN agreed to pay Sonza a monthly talent fee of
P310, 000 for the first year and P317, 000 for the second and third year.
On April 1996, Sonza wrote a letter to ABS-CBN where he irrevocably resigned in view of the recent
events concerning his program and career. After the said letter, Sonza filed with the Department of
Labor and Employment a complaint alleging that ABS-CBN did not pay his salaries, separation pay,
service incentive pay,13th month pay, signing bonus, travel allowance and amounts under the
Employees Stock Option Plan (ESOP). ABS-CBN contended that no employee-employer relationship
existed between the parties. However, ABS-CBN continued to remit Sonza’s monthly talent fees but
opened another account for the same purpose.
The Labor Arbiter dismissed the complaint and found that there is no employee-employer
relationship. NLRC affirmed the decision of the Labor Arbiter. CA also affirmed the decision of NLRC.

Issue:
Whether or not there was employer-employee relationship between the parties.
Ruling:
Case law has consistently held that the elements of an employee-employer relationship are selection
and engagement of the employee, the payment of wages, the power of dismissal and the employer’s
power to control the employee on the means and methods by which the work is accomplished. The
last element, the so-called "control test", is the most important element.
Sonza’s services to co-host its television and radio programs are because of his peculiar talents,
skills and celebrity status. Independent contractors often present themselves to possess unique skills,
expertise or talent to distinguish them from ordinary employees. The specific selection and hiring of
SONZA, because of his unique skills, talent and celebrity status not possessed by ordinary
employees, is a circumstance indicative, but not conclusive, of an independent contractual
relationship. All the talent fees and benefits paid to SONZA were the result of negotiations that led to
the Agreement. For violation of any provision of the Agreement, either party may terminate their
relationship. Applying the control test to the present case, we find that SONZA is not an employee but
an independent contractor.
The control test is the most important test our courts apply in distinguishing an employee from an
independent contractor. This test is based on the extent of control the hirer exercises over a worker.
The greater the supervision and control the hirer exercises, the more likely the worker is deemed an
employee. The converse holds true as well – the less control the hirer exercises, the more likely the
worker is considered an independent contractor. To perform his work, SONZA only needed his skills
and talent. How SONZA delivered his lines, appeared on television, and sounded on radio were
outside ABS-CBN’s control. ABS-CBN did not instruct SONZA how to perform his job. ABS-CBN
merely reserved the right to modify the program format and airtime schedule "for more effective
programming." ABS-CBN’s sole concern was the quality of the shows and their standing in the
ratings.
Clearly, ABS-CBN did not exercise control over the means and methods of performance of Sonza’s
work. A radio broadcast specialist who works under minimal supervision is an independent contractor.
Sonza’s work as television and radio program host required special skills and talent, which SONZA
admittedly possesses.
ABS-CBN claims that there exists a prevailing practice in the broadcast and entertainment industries
to treat talents like Sonza as independent contractors. The right of labor to security of tenure as
guaranteed in the Constitution arises only if there is an employer-employee relationship under labor
laws. Individuals with special skills, expertise or talent enjoy the freedom to offer their services as
independent contractors. The right to life and livelihood guarantees this freedom to contract as
independent contractors. The right of labor to security of tenure cannot operate to deprive an
individual, possessed with special skills, expertise and talent, of his right to contract as an
independent contractor.
INVESTMENT PLANNING CORPORATION vs SSS

G. R. No. L-19124 November 18, 1967
Facts:
Petitioner is a domestic corporation engaged in business management and sale of securities. It has
two classes of agents who sell its investment plans: 1). Salaried employees who keep definite hours

and work under control and supervision of the company, and 2). Registerd representatives who work
on commission basis. In 1960, the petitioner applied to the Social Security System, the respondent,
for exemption of the registered representatives from the compulsory coverage of the Social Security
Act but later denied.
Issue:
Whether the petitioner’s, registered representatives are employees within the meaning of the Social
Security Act?
Ruling:
NO. Wherefore the employee was defined by the Social Security Act as: Any person who performs
services for an employer in which either or both mental and physical efforts are used and who
receives compensation for such services, where there is an employer-employee relationship:
Provided, That a self-employed professional shall be both employee and employer at the same time.
(As amended by Sec. 4, R.A. 2658 and Sec. 2, P.D. No. 1636, S-1979)
The representatives are in reality commission agents. They cannot be considered employees for they
were just paid not by the investor but in a form of a commission, their services may be terminated at
any certain time, and there is no element of control for they do not devote their time exclusively to or
solely for the petitioner; the time and the effort they spend in their work depend upon entirely upon
their own will and initiative.
NATIONAL SUGAR REFINERIES CORPORATION vs. NATIONAL LABOR RELATIONS

COMMISSION and NBSR SUPERVISORY UNION
G.R. No. 101761 March 24, 1993
Facts:
Petitioner National Sugar Refineries Corporation (NASUREFCO), a corporation which is fully owned
and controlled by the Government, operates three (3) sugar refineries located at Bukidnon, Iloilo and
Batangas. Private respondent union represents the former supervisors of the NASUREFCO Batangas
Sugar Refinery.
In 1988, petitioner implemented a Job Evaluation (JE) Program affecting all employees, from rank-
and-file to department heads. We glean from the records that for about ten years prior to the JE
Program, the members of respondent union were treated in the same manner as rank-and file
employees. As such, they used to be paid overtime, rest day and holiday pay pursuant to the
provisions of Articles 87, 93 and 94 of the Labor Code as amended.
With the implementation of the JE Program, members of respondent union were re-classified under
levels S-5 to S-8 which are considered managerial staff for purposes of compensation and benefits.
In May 1990, petitioner NASUREFCO recognized herein respondent union, which was organized
pursuant to Republic Act NO. 6715 allowing supervisory employees to form their own unions, as the
bargaining representative of all the supervisory employees at the NASUREFCO Batangas Sugar

Refinery.
In June 1990, the members of herein respondent union filed a complainant with the executive labor
arbiter for non-payment of overtime, rest day and holiday pay allegedly in violation of Article 100 of
the Labor Code.
Issue:
W/N the Supervisors are considered Managerial Employees and should no longer receive overtime,
rest day and holiday pay.
Ruling: Yes. Art. 82 Coverage. — The provisions of this title shall apply to employees in all
establishments and undertakings whether for profit or not, but not to government employees,
managerial employees, field personnel, members of the family of the employer who are dependent on
him for support, domestic helpers, persons in the personal service of another, and workers who are
paid by results as determined by the Secretary of Labor in Appropriate regulations.
"As used herein, 'managerial employees' refer to those whose primary duty consists of the
management of the establishment in which they are employed or of a department or subdivision
thereof, and to other officers or members of the managerial staff." (Emphasis supplied.)
It is the submission of petitioner that while the members of respondent union, as supervisors, may not
be occupying managerial positions, they are clearly officers or members of the managerial staff
because they meet all the conditions prescribed by law and, hence, they are not entitled to overtime,
rest day.
Auto Bus Transport Systems vs Bautista
458 SCRA 578
Facts:
Antonio Bautista was employed by Auto Bus Transport Systems, Inc. in May 1995. He was assigned
to the Isabela-Manila route and he was paid by commission (7% of gross income per travel for twice a
month).
In January 2000, while he was driving his bus he bumped another bus owned by Auto Bus. He
claimed that he accidentally bumped the bus as he was so tired and that he has not slept for more
than 24 hours because Auto Bus required him to return to Isabela immediately after arriving at
Manila. Damages were computed and 30% or P75,551.50 of it was being charged to Bautista.
Bautista refused payment.

Auto Bus terminated Bautista after due hearing as part of Auto Bus’ management prerogative.
Bautista sued Auto Bus for Illegal Dismissal. The Labor Arbiter Monroe Tabingan dismissed
Bautista’s petition but ruled that Bautista is entitled to P78,117.87 13th month pay payments and
P13,788.05 for his unpaid service incentive leave pay.
The case was appealed before the National Labor Relations Commission. NLRC modified the LA’s
ruling. It deleted the award for 13th Month pay. The court of Appeals affirmed the NLRC.
Auto Bus averred that Bautista is a commissioned employee and if that is not reason enough that
Bautista is also a field personnel hence he is not entitled to a service incentive leave.
ISSUE: Whether or not Bautista is entitled to Service Incentive Leave.
HELD: Yes, Bautista is entitled to Service Incentive Leave. The Supreme Court emphasized that it
does not mean that just because an employee is paid on commission basis he is already barred to
receive service incentive leave pay.
The question actually boils down to whether or not Bautista is a field employee.
According to Article 82 of the Labor Code, ‘field personnel shall refer to 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.
As a general rule, field personnel are those whose performance of their job/service is not supervised
by the employer or his representative, the workplace being away from the principal office and whose
hours and days of work cannot be determined with reasonable certainty; hence, they are paid specific
amount for rendering specific service or performing specific work. If required to be at specific places
at specific times, employees including drivers cannot be said to be field personnel despite the fact
that they are performing work away from the principal office of the employee.
Certainly, Bautista is not a field employee. He has a specific route to traverse as a bus driver and that
is a specific place that he needs to be at work. There are inspectors hired by Auto Bus to constantly
check him. There are inspectors in bus stops who inspects the passengers, the punched tickets, and
the driver. Therefore he is definitely supervised though he is away from the Auto Bus main office.
San Juan de Dios Hospital vs NLRC (1997) G.R. 126383

Facts:
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 Labor’s 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 latter’s 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 Labor’s 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.
Sime Darby Pilipinas Inc., vs NLRC (1998) 289 SCRA 86
Facts: Prior to the present controversy, all company factory workers in Marikina including members
of private respondent union worked from 7:45 a.m. to 3:45 p.m. with a 30 minute paid “on call” lunch
break.
On 14 August 1992 petitioner issued a memorandum to all factory-based employees advising all its
monthly salaried employees in its Marikina Tire Plant, except those in the Warehouse and Quality
Assurance Department working on shifts, a change in work schedule effective 14 September 1992
thus –
7:45 A.M. – 4:45 P.M. (Mon to Fri)
7:45 A.M. – 11:45 P.M. (Sat).
Coffee break time will be ten minutes only anytime between:
9:30 A.M. –10:30 A.M. and 2:30 P.M. –3:30 P.M.
Lunch break will be between: 12:00 NN –1:00 P.M. (Mon to Fri).
Excluded from the above schedule are the Warehouse and QA employees who are on shifting.
Their work and break time schedules will be maintained as it is now.
Since private respondent felt affected adversely by the change in the work schedule and
discontinuance of the 30-minute paid “on call” lunch break, it filed on behalf of its members a
complaint with the Labor Arbiter for unfair labor practice, discrimination and evasion of liability
pursuant to the resolution of this Court the Labor Arbiter dismissed the complaint on the ground that
the change in the work schedule and the elimination of the 30-minute paid lunch break of the factory
workers constituted a valid exercise of management prerogative and that the new work schedule,
break time and one-hour lunch break did not have the effect of diminishing the benefits granted to
factory workers as the working time did not exceed eight (8) hours.
Issue: WON the act of management in revising the work schedule of its employees and discarding
their paid lunch break constitutive of unfair labor practice.
Held: The revision of work schedule is a management prerogative and does not amount to unfair
labor practice in discarding the paid lunch break.
The right to fix the work schedules of the employees rests principally on their employer. In the instant
case petitioner, as the employer, cites as reason for the adjustment the efficient conduct of its
business operations and its improved production. It rationalizes that while the old work schedule
included a 30-minute paid lunch break, the employees could be called upon to do jobs during that
period as they were “on call.” Even if denominated as lunch break, this period could very well be
considered as working time because the factory employees were required to work if necessary and
were paid accordingly for working.
With the new work schedule, the employees are now given a one-hour lunch break without any
interruption from their employer. 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. Since the employees are no longer
required to work during this one-hour lunch break, there is no more need for them to be compensated
for this period. The Court agrees with the Labor Arbiter that the new work schedule fully complies with
the daily work period of eight (8) hours without violating the Labor Code.
Besides, the new schedule applies to all employees in the factory similarly situated whether they are
union members or not.
NATIONAL DEVELOPMENT COMPANY vs. COURT OF INDUSTRIAL RELATIONS and
NATIONAL TEXTILE WORKERS UNION
G.R. No. L-15422 November 30, 1962
FACTS: At the National Development Co., a government-owned and controlled corporation, there
were four shifts of work. One shift was from 8 a.m. to 4 p.m., while the three other shifts were from 6
a.m. to 2 p.m; then from 2 p.m. to 10 p.m. and, finally, from 10 p.m. to 6 a.m. In each shift, there was
a one-hour mealtime period, to wit: From (1) 11 a.m. to 12 noon for those working between 6 a.m.
and 2 p.m. and from (2) 7 p.m. to 8 p.m. for those working between 2 p.m. and 10 p.m.

(Petitioner does not want to pay for the 1 hour lunch time) The records disclose that although there
was a one-hour mealtime, petitioner nevertheless credited the workers with eight hours of work for
each shift and paid them for the same number of hours. However, since 1953, whenever workers in
one shift were required to continue working until the next shift, petitioner instead of crediting them
with eight hours of overtime work, has been paying them for six hours only, petitioner that the two
hours corresponding to the mealtime periods should not be included in computing compensation.
CIR: Mealtime should be counted in the determination of overtime work
ISSUE: WON mealtime breaks should be considered working time
HELD: YES.The legal working day for any person employed by another shall be of not more than
eight hours daily.When the work is not continuous, the time during which the laborer is not working
and can leave his working place and can rest completely shall not be counted. (Sec. 1, Com. Act No.
444)
It will be noted that, under the law, the idle time that an employee may spend for resting and during
which he may leave the spot or place of work though not the premises of his employer, is not counted
as working time only where the work is broken or is not continuous.
In this case, the CIR’s finding that work in the petitioner company was continuous and did not permit
employees and laborers to rest completely is not without basis in evidence and following our earlier
rulings, shall not disturb the same.
The time cards show that the work was continuous and without interruption. There is also the
evidence adduced by the petitioner that the pertinent employees can freely leave their working place
nor rest completely. There is furthermore the aspect that during the period covered the computation
the work was on a 24-hour basis and previously stated divided into shifts.
From these facts, the CIR correctly concluded that work in petitioner company was continuous and
therefore the mealtime breaks should be counted as working time for purposes of overtime
compensation.
LUZON STEVEDORING CO., INC. vs. LUZON MARINE DEPARTMENT UNION
G.R. No. L-9265 April 29, 1957
Facts:
In June 1948, herein respondent Luzon Marine Department Union filed a petition with the Court of

Industrial Relations containing several demands against herein petitioner Luzon Stevedoring Co., Inc.
However, while the case was still pending with the CIR, said labor union declared a strike which was
ruled down as illegal by this Court in 1950. In view of said ruling, the Union filed a "Constancia" with
the Court of Industrial Relations praying that the remaining unresolved demands of the Union
presented in their original petition, be granted. Said unresolved included: “a. Point No. 2. That the
work performed in excess of eight (8) hours he paid an overtime pay of 50 per cent the regular rate of
pay, and that work performed on Sundays and legal holidays be paid double the regular rate of pay.”
On February 10, 1955, the decision was issued, in the sense that the 4 hours of overtime work
included in the regular daily schedule of work from 6:00 a.m. to 6:00 p.m. should be paid
independently of the so-called "coffee-money", after making a finding that said extra amounts were
given to crew members of some tugboats for work performed beyond 6:00 p.m. over a period of some
16 weeks. The Company's motion for reconsideration was denied.
From this resolution, the Luzon Stevedoring Co., Inc. filed the present petition for certiorari and when
the Court of Industrial Relations, acting upon said Company's motion for clarification, ruled that the 20
minutes' rest given the claimants after mealtime should not be deducted from the 4 hours of overtime
worked performed by said claimants, petitioner filed a supplemental petition for certiorari, and both
petitions were given due course by this Court.
Issue:
W/N the definition for "hours of work" as presently applied to dryland laborers equally applicable to
seamen?
Ruling: NO. Petitioner questions the applicability to seamen of the interpretation given to the phrase
"hours of work" for the purpose of the Eight-Hour Labor Law, insinuating that although the seamen
concerned stayed in petitioner's tugboats, or merely within its compound, for 12 hours, yet their work
was not continuous but interrupted or broken. It has been the consistent stand of petitioner that while
it is true that the workers herein were required to report for work at 6:00 a.m. and were made to stay
up to 6:00 p.m., their work was not continuous and they could have left the premises of their working
place were it not for the inherent physical impossibility peculiar to the nature of their duty which
prevented them from leaving the tugboats.
It is the Company's defense that a literal interpretation of what constitutes non-working hours would
result in absurdity if made to apply to seamen aboard vessels in bays and rivers, and We are called
upon to make an interpretation of the law on "non-working hours" that may comprehend within its
embrace not only the non-working hours of laborers employed in land jobs, but also of that particular
group of seamen, i.e., those employed in vessels plying in rivers and bays, since admittedly there is
no need for such ruling with respect to officers and crew of interisland vessels which have aboard 2
shifts of said men and strictly follow the 8-hour working period. Section 1 of Commonwealth Act No.
444, known as the Eight-Hour Labor Law, provides:

“SEC. 1. The legal working day for any person employed by another shall be of not more than eight
hours daily. When the work is not continuous, the time during which the laborer is not working AND
CAN LEAVE HIS WORKING PLACE and can rest completely, shall not be counted.”
DE LEON V PAMPANGA SUGAR DEVELOPMENT CO.
20 SCRA 628
SEPTEMBER 30, 1969
CASTRO, J.
Facts: The respondent Pampanga Sugar Development Company (PASUDECO) operates a sugar
central at San Fernando, Pampanga. The petitioners, 21 all told, were its security guards required to
work eight hours a day, seven days a week. On November 28, 1961 the petitioners filed with the CIR
a complaint seeking payment to them of premium or differential pay in the total amount P49,581.79,
plus attorney's fees of P3,000 and costs of suit. Upon the finding that the "petitioners were paid their
monthly salaries plus 25% additional compensation for work on Sundays and Holidays as provided
for by law and that work on said days is one of the terms and conditions of their employment as
security guards." The Court of Industrial Relations dismissed the case. The petitioners' claim, in
essence, is that under the authority of section 4 of Commonwealth Act 444 as amended (Eight-Hour
Labor Law), for a Sunday or legal holiday work of not more than eight hours, each of them is entitled
to his monthly salary and his premium or differential compensation.
Issue: Whether or not the petitioners are entitled to the 25% premium pay who worked on Sunday or
legal holiday??
Held: Yes, The import of the law and the decision in Manalo is that for work on Sundays and legal
holidays, the employer must pay the employee: (1) his regular remuneration, or 100%; and (2) an
additional sum of at least 25% of the regular remuneration, which is called the "premium pay." In
other words, the pay for Sundays and legal holidays is 125% of the pay for ordinary days, but only the
excess of 25% is premium pay. With respect to employees paid on a monthly basis, the first 100% (of
the 125%), corresponding to the regular remuneration, may or may not be included in the monthly
salary. If it is, then the employee is entitled to collect only the premium of 25%. If it is not, then the
employee has a right to receive the entire 125%. The court en banc affirmed the decision of Court of
Industrial relations, there is a finding that the "petitioners were paid their monthly salaries plus 25%
additional compensation for work on Sundays and holidays."
UNIVERSITY OF PANGASINAN FACULTY UNION V. UNIVERSITY OF PANGASINAN

G.R. NO. L-63122 FEBRUARY 20, 1984 GUTIERREZ, JR., J.
Facts:
On December 18, 1981, the petitioner, through its President, Miss Consuelo Abad, filed a complaint
against the private respondent with the Arbitration Branch of the NLRC, Dagupan District Office,
Dagupan City. The complaint seeks: (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 sixty
(60%) percent of the incremental proceeds of increased tuition fees; and (c) payment of salaries for
suspended extra loads.
The petitioner’s members are full-time professors, instructors, and teachers of respondent University.
The teachers in the college level teach for a normal duration of ten (10) months a school year, divided
into two (2) semesters of five (5) months each, excluding the two (2) months summer vacation. These
teachers are paid their salaries on a regular monthly basis.

In November and December, 1981, the petitioner’s members were fully paid their regular monthly
salaries. However, from November 7 to December 5, during the semestral break, 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.
Issue:
"WHETHER OR NOT PETITIONER’S MEMBERS ARE ENTITLED TO ECOLA DURING THE
SEMESTRAL BREAK FROM NOVEMBER 7 TO DECEMBER 5, 1981 OF THE 1981-82 SCHOOL
YEAR.
Held:
Yes. It is beyond dispute that the petitioner’s 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 most peculiar situation whereby they are forced to go on leave during semestral
breaks. These semestral breaks are in the nature of work interruptions beyond the employees’
control. The duration of the semestral break varies from year to year dependent on a variety of
circumstances affecting at times only the private respondent but at other times all educational
institutions in the country. 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 petitioner’s members received their regular
salaries during this period. It is clear from the aforequoted provision of law that it contemplates a "no
work" situation where the employees voluntarily absent themselves.
Petitioners, in the case at bar, certainly do not, ad voluntatem, 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. To a certain extent, the
private respondent can specify dates when no classes would be held. Surely, it was not the intention
of the framers of the law to allow employers to withhold employee benefits by the simple expedient of
unilaterally imposing "no work" days and consequently avoiding compliance with the mandate of the
law for those days.
JOSE RIZAL COLLEGE VS. NLRC AND NATOW

G.R. NO. L-65482
DECEMBER 1, 1987
FACTS:
Petitioner is a non-stock, non-profit educational institution duly organized and existing under the laws
of the Philippines. It has three groups of employees categorized as follows: (a) personnel on monthly
basis, who receive their monthly salary uniformly throughout the year, irrespective of the actual
number of working days in a month without deduction for holidays; (b) personnel on daily basis who
are paid on actual days worked and they receive unworked holiday pay and (c) collegiate faculty who
are paid on the basis of student contract hour. Before the start of the semester they sign contracts
with the college undertaking to meet their classes as per schedule. Unable to receive their
corresponding holiday pay, as claimed, from 1975 to 1977.
ISSUE:
WON the school faculty who according to their contracts are paid per lecture hour and are entitled to
unworked holiday pay.

HELD:
No. Supreme Court rendered a decision: (a) exempting petitioner from paying hourly paid faculty
members their pay for regular holidays, whether the same be during the regular semesters of the
school year or during semestral, Christmas, or Holy Week vacations; (b) but ordering petitioner to pay
said faculty members their regular hourly rate on days declared as special holidays or for some
reason classes are called off or shortened for the hours they are supposed to have taught, whether
extensions of class days be ordered or not; in case of extensions said faculty members shall likewise
be paid their hourly rates should they teach during said extensions.
Regular holidays specified as such by law are known to both school and faculty members as no class
days;" certainly the latter do not expect payment for said unworked days, and this was clearly in their
minds when they entered into the teaching contracts.
On the other hand, both the law and the Implementing Rules governing holiday pay are silent as to
payment on Special Public Holidays.
Declared purpose of the holiday pay which is the prevention of diminution of the monthly income of
the employees on account of work interruptions is defeated when a regular class day is cancelled on
account of a special public holiday and class hours are held on another working day to make up for
time lost in the school calendar.
Wellington Investment vs Trajano

G.R. No. 114698, 03 July 1995
NARVASA, C.J.:
Facts: Upon an inspection of the Wellington Flour Mills, owned and operated by Wellington
Investment, the latter was accused of non-payment of regular holidays falling on a Sunday for
monthly-paid employees.
Petitioner’s Arguments:
1. Monthly salary of the monthly-paid employees already includes holiday pay for all the regular
holidays.
2. To pay for the extra days (regular holidays on a Sunday), as compelled by the Order of the DOLE,
it is in effect being compelled to pay for alleged extra working days.
DOLE’s Contentions:
1. Regular holidays falling on Sundays have precluded the enjoyment by the employees of a non-
working day and the employees consequently have to work for additional days.
2. When a regular holiday falls on a Sunday, an extra or additional working day is created and the
employer has the obligation to pay its employees for the extra day.
Issue: Is a monthly-paid employee entitled to an additional pay aside from his usual holiday pay,
whenever a regular holiday falls on a Sunday?

Held: No. To agree with DOLE’s theory would increase the number of days in a year, instead of 365
days, as basis for computation of salary for monthly-paid employees. There is no provision of law
requiring employers to make adjustments in the monthly salary rate set by them to take account of
the legal holiday falling on Sundays or to reckon a year at more than 365 days.
Philippine Airlines vs NLRC

G.R. No. 83834, 30 June 1989
Grino-Aquino, J.
FACTS: Gassie C. Sangel was an employee of PAL from May, 1978 until June 1986. At the time of
his dismissal, he was a Cargo Representative A. He was placed under preventive suspension due to
several underweighing of cargos done by him. On July 1986, Sangel received a Notice of Termination
on the ground of committing serious misconduct and breach of trust in the improprieties in his
dealings with some cargo agents and forwarders, and considering his date of termination from the
Company effective June 25, 1986 the date he was placed on preventive suspension.
Sangel filed a complaint for illegal dismissal with damages and attorney's fees against PAL.
The Labor Arbiter rendered a decision ordering the reinstatement of Sangel with full backwages but
denied his claim for damages and attorney's fees. On appeal, the NLRC affirmed the Labor Arbiter's
decision, but awarded damages and attorney's fees to Sangel.
ISSUE: Did the NLRC committed grave abuse of discretion in deciding in favor of Sangel?
HELD: Yes.
The essential elements of due process in a labor dispute are: notice of the charge and a
hearing where the employee is given an opportunity to defend himself. The Labor Arbiter and the
NLRC erred in finding that Sangel was not given notice of the charge against him before he was
dismissed. Sangel was informed of the said charge during the "fact-finding interview". Formal notice
of the charge was also given him eleven (11) days after his interview or investigation. He was placed
under suspension and advised to submit evidence within ten (10) days but he did not submit any
evidence to rebutt the charge against him on the pretext that it would have been futile to do so
because the investigating committee had already prejudged and pronounced him guilty. Under the
circumstances, it cannot be said that Sangel was dismissed without due process. If the process of
investigation was not completed, it was because he refused to submit to it.
We find ourselves unable to agree with the Commission's finding that PAL acted with malice
and bad faith in conducting the "fact-finding interview" to fish for evidence against employees who
were suspected of involvement in the underweighing anomalies at its International Cargo Terminal (p.
28, Rollo). PAL may not be accused of bad faith and malice for trying to ferret out the culprits
responsible for the shenanigans in its international cargo department. The fraudulent underweighing
of cargo not only robs PAL of substantial revenues from this particular field of its operations, but,
more importantly, it endangers the safety of the airline's aircraft and passengers. PAL must be vigilant
to protect its airplanes, its passengers, and its business for, as a carrier, it has the obligation to
exercise extraordinary diligence to safely conduct its passengers and cargo to their destinations (Art.
1733, Civil Code). Its efforts to discharge that grave responsibility may not be characterized as
malicious or in bad faith.

ATOK-BIG WEDGE MUTUAL BENEFIT ASSOCIATION vs. ATOK-BIG WEDGE MINING

COMPANY, INCORPORATED
G.R. No. L-7349, 19 July 1955
REYES, J. B. L., J.:
FACTS: Atok Big Wedge Mutual Benefit Association (ABWMBA, for brevity) submitted a demand to
Atok Big Wedge Mining Co. Inc (ABWMCI, for brevity) for various concessions, among which were an
increase of P0.50 in wages. The matter was referred by the mining company to the Court of Industrial
Relations for arbitration and settlement. The said court granted some of the demands and the others
(including the demand for increased wages) were rejected. Subsequently, an urgent petition was
presented in Court by the ABWMCI for authority to stop operations and lay off employees and
laborers, for the reason that due to the heavy losses, increased taxes, high cost of materials,
negligible quantity of ore deposits, and the enforcement of the Minimum Wage Law, the continued
operation of the company would lead to its immediate bankruptcy and collapse.
The parties reached an agreement after the SC decision on October 29, 1952 which states
agreement that the following facilities heretofore given or actually being given by petitioner to its
workers and laborers, and which constitute as part of their wages, be valued as follows:
Rice ration P.55 per day
Housing facility 40 per day
All other facilities at least 85 per day
It is understood that the said amount of facilities valued at the above-mentioned prices, may be
charged in full or partially by the Company against laborer or employee, as they may see fit pursuant
to the exigencies of its operation. This was approved by the Court on December 26, 1952. Later,
another case was decided involving the 2 parties giving the employees minimum cash wage of 3.45 a
day with rice ration or 4.00 without rice ration.
ISSUE: Which of the two decisions would prevail? The agreement or the subsequent decision giving
the employees minimum case wage?
HELD: The Agreement subsists.
An agreement to deduct certain facilities received by the laborers from their employer is not a waiver
of the minimum wage fixed by the law. Wage includes the fair and reasonable value as determined by
the Secretary of Labor, of board, lodging, or other facilities customarily furnished by the employer to
the employee (Sec 2 of RA 602).
Thus, the law permits the deduction of such facilities from the laborer’s minimum wage of P4, as long
as their value is “fair and reasonable”
DIFFERENCE BETWEEN A SUPPLEMENT and FACILITY
(1) Supplements, defined – extra remuneration or special privileges or benefits given to or received

by the laborers over and above their ordinary earnings or wages [vacation and holidays not worked;
paid sick leave or maternity leave; overtime rate in excess of what is required by law; sick, pension,
retirement and death benefits; profit sharing; family allowances; Christmas, war risk and cost of living
bonuses or other bonuses other than those paid as a reward for extra output or time spent on the
job].
(2) Facilities, defined – items of expense necessary for laborer’s and his family’s existence and
subsistence, so that by express provision of the law, they form part of the wage and when furnished
by the employer are deductible therefrom since if they are not so furnished, the laborer would spend
and pay for them just the same.
MABEZA vs NLRC
G.R. No. 118506, 18 April 1997, 271 SCRA 670
KAPUNAN, J.:
FACTS: Norma Mabeza was an employee hired by Hotel Supreme in Baguio City. In 1991, an
inspection was made by DOLE at Hotel Supreme and the DOLE inspectors discovered several
violations by the hotel management. Immediately, the owner of the hotel, Peter Ng, directed his
employees to execute an affidavit which would purport that they have no complaints whatsoever
against Hotel Supreme. But Mabeza refused to certify said affidavit with the fiscal’s office so this led
to her dismissal. She sued Peter Ng and one of her complaints against him is underpayment because
her wage was less than the minimum wage. Peter Ng argued that the reason for such low payment
was because she was being given free lodging, water, electricity, and water consumption by the
hotel.
ISSUE: Whether or not such amenities provided by the hotel be considered as facilities which are
deductible from Mabeza’s wage.
HELD: No. There are requisites before such can be done and they are:
1. Proof must be shown that such facilities are customarily furnished by the trade.
2. The provision of deductible facilities must be voluntarily accepted in writing by the employee.
3. Facilities must be charged at fair and reasonable value.
None of these were complied with in the case at bar. More significantly, the food and lodging,
or the electricity and water consumed by Mabeza were not facilities but supplements. A benefit or
privilege granted to an employee for the convenience of the employer is not a facility. The criterion in
making a distinction between the two not so much lies in the kind (food, lodging) but the
purpose. Considering, therefore, that hotel workers are required to work different shifts and are
expected to be available at various odd hours, their ready availability is a necessary matter in the
operations of a small hotel, such as Hotel Supreme.

DEL ROSARIO vs COURT OF INDUSTRIAL RELATION

G.R. No. L-23133, 13 July 1967, 20 SCRA 650
BENGZON, J.P., J.:
FACTS: Vicente del Rosario Ceferina Vda. de del Rosario and Teresita Reyes owned in common
Hacienda del Rosario, which has been devoted to large-scale sugar cane planting, processing and
milling. PLASLU (Philippine Land-Air-Sea Labor Union) filed before the Court of Industrial Relations
against del Rosario and Reyes a charge of unfair labor practice, for alleged violation of Section 4-A of
Republic Act 875 consisting in dismissals of 87 workers in said hacienda due to membership in
petitioning union. The Court of Industrial Relations upheld PLASLU's legal capacity to sue and ruled
that it had jurisdiction over the case. Finding that about fifty of the hacienda workers were dismissed
by respondents for reasons of union membership, it ordered respondents to reinstate them with back
wages.
A motion for reconsideration was lodged with the Court of Industrial Relations en banc. The
Court ruled that in accordance with the doctrine in Victorias Milling Co. vs. CIR, L-17281, March 30,
1963, the complaint should be dismissed as to the agricultural workers such as field laborers planting
and harvesting sugar cane in the hacienda. As to those whose work is by nature industrial, like the
mill laborers, trapicheros, chemists, fuelmen, oilers, mangongogay, tractor and truck drivers, those
undertaking or transporting the sugar cane from the field to the mill and then to the market, it held that
the same doctrine sustained its jurisdiction, thereby affirming the decision as to said industrial
workers.
ISSUE: Does the Court of Industrial Relations have jurisdiction over the case?
HELD: CIR has jurisdiction over industrial workers only, but not on agricultural workers.
The first issue leads Us to consider Our rulings in Pampanga Sugar Mills vs. Pasumil Workers'
Union and Victorias Milling Co. vs. CIR, supra. In the Pasumil case, We held that where "petitioner is
a highly mechanized industrial concern with the work of planting and harvesting clearly distinguished
from that of transporting the cane from the fields, first to a switch and later to the mill x x x all its
workers are to be considered industrial workers, except those devoted to purely agricultural work." (at
p. 561) Reiterating this, We said in the Victorias case that it is "the nature of the work which classifies
a worker as one falling under the exemption [from coverage of R.A. 875] as agricultural laborers." In
an hacienda, there may therefore be both agricultural and industrial workers. Regarding the former,
exclusive jurisdiction has been given to the Court of Agrarian Relations. As to the latter, exclusive
jurisdiction has been placed in the Court of Industrial Relations. As regards those workers who
perform functions the nature of which is industrial, therefore, suit was properly filed in the Court of
Industrial Relations.
The record shows that the petitioners' undertaking is a merchanized one, rendering applicable
the norm set forth in the Victorias and Pasumil cases:

(1) Petitioners already owned 200 hectares, yet they leased 107 hectares more. It would be
very difficult for them to profitably carry on under conditions they alleged unless the haciendas are
mechanized;
(2) Petitioners had 2 mills in the haciendas — one in their own land and another in the land
leased;
(3) The field workers were different from the mill workers, showing specialization in the kind of
work done;
(4) The presence of a timekeeper and inspector in the hacienda, showing that the workers had
a working schedule, and laborers were made to sign payrolls, a practice typical of industrial concerns;
(5) The positions in question, mill laborers, trapicheros, chemists, fuelmen,
oilers, mangongogay, tractor and truck drivers, those involving taking or transporting sugar cane from
the field to the mill and to the market, are positions commonly found in industrial concerns.
Petitioners' liability for unfair labor practice is thus premised on Sec. 4-A of Republic Act 875,
not under Republic Act 2263. As industrial employees, the laborers in the positions aforementioned
were already covered by Republic Act 875, even before the effectivity of R.A. 2263, and were so
covered when they were dismissed.

DE RACHO vs MUNICIPALITY OF ILAGAN

G.R. No. L-23542, 02 January 1968, 22 SCRA 1
BENGZON, J.P., J.:
FACTS: Manuel Racho was a market cleaner in the municipality of Ilagan from 1954 to January
1960. At the time of his retirement, he was earning P60.00 per month. He died in October 1960.
Later, his widow, Juana Racho, petitioned to claim salary differentials because supposedly, the
minimum wage at the time when her husband was working was P120.00 a month. The municipality of
Ilagan appealed that they cannot comply with the Minimum Wage Law because it lack funds.
ISSUE: Does lack of funds of a local government unit excuses it from compliance with the Minimum
Wage Law?
HELD: No. Lack of funds of a municipality does not excuse it from paying the statutory minimum
wages to its employees, which, after all, is a mandatory statutory obligation of the municipality. To
uphold such defense of lack of available funds would render the Minimum Wage Law futile and defeat
its purpose.

AMERICAN WIRE AND CABLE DAILY RATED EMPLOYEES UNION vs. AMERICAN WIRE AND
CABLE CO., INC.
G.R. No. 155059, 29 April 2005
CHICO-NAZARIO, J.
FACTS: American Wire and Cable Co., Inc., is a corporation engaged in the manufacture of wires
and cables. There are two unions in this company, the American Wire and Cable Monthly-Rated
Employees Union and the American Wire and Cable Daily-Rated Employees. An original action was
filed before the NCMB of DOLE by the two unions for voluntary arbitration. The petitioner submits that
the withdrawal of the private respondent of the 35%premium pay for selected days during the Holy
Week and Christmas season, the holding of the Christmas Party and its incidental benefits, and the
giving of service awards, which they have long enjoyed, violated Article 100 of the Labor Code. A
decision was rendered by the Voluntary Arbitrator in favor of the private respondent. On appeal, CA
affirmed and upheld the Arbitrator’s decision.
ISSUE: Is the private respondent guilty of violating Article 100 of the Labor Code, as amended, when
the benefits/entitlements given to the members of petitioner union were withdrawn?
HELD: No, the respondent is not guilty of violating Art. 100 of the Labor Code.
ART. 100. PROHIBITION AGAINST ELIMINATION OR DIMINUTION OF BENEFITS. –

Nothing in this Book shall be construed to eliminate or in any way diminish supplements, or other
employee benefits being enjoyed at the time of promulgation of this Code.
The benefits and entitlements mentioned in the instant case are all considered bonuses which
were given by the private respondent out of its generosity and munificence. A bonus is an amount
granted and paid to an employee for his industry and loyalty which contributed to the success of the
employer’s business and made possible the realization of profits. The granting of a bonus is a
management prerogative, something given in addition to what is ordinarily received by or strictly due
the recipient. Thus, a bonus is not a demandable and enforceable obligation, except when it is made
part of the wage, salary or compensation of the employee.
For a bonus to be enforceable, it must have been promised by the employer and expressly
agreed upon by the parties or it must have had a fixed amount and had been a long and regular
practice on the part of the employer. The assailed benefits were never subjects of any agreement
between the union and the company. It was never incorporated in the CBA. To be considered a
“regular practice,” the giving of the bonus should have been done over a long period of time, and
must be shown to have been consistent and deliberate. The downtrend in the grant of these two
bonuses over the years demonstrates that there is nothing consistent about it. To hold that an
employer should be forced to distribute bonuses which it granted out of kindness is to penalize him
for his past generosity.

INTERNATIONAL SCHOOL OF SPEECH vs NLRC

G.R. No. 112658, 16 March 1995
REGALADO, J.
FACTS: Private respondent Ma. Corazon D. Mamuyac charged petitioners with violation of P.D. No.
851 (13th Month Pay Law), among others.
The following computation was granted by the Labor Arbiter based on the numbers of months
Mamuyac went to work for the years 1989 and 1990:
1989:
6 mos. x P7,319.00
———————————
12 = P3,659.50
1990:
3.5 x P10,205.00
———————————
12 = P2,976.46
TOTAL 13TH MONTH PAY = P6,635.96
The above was affirmed by NLRC. Hence, this petition.
ISSUE: Should 1/12 of the number of months worked multiplied by the total salary received for those
months be given to an employee, to determine the 13 th month pay he should receive?
HELD: No.
According to No. 4(a) of the Revised Guidelines on the implementation of the 13th Month Pay
Law, the 13th month pay of an individual is (not less than) one-twelfth (1/12) of the total basic salary
earned by an employee within a calendar year. Moreover, in No. 6 thereof, it is provided that an
employee who has resigned or whose services were terminated at any time before the time for
payment of the 13th month pay is entitled to this monetary benefit in proportion to the length of time
he worked during the year, reckoned from the time he started working during the calendar year up to
the time of his resignation or termination from the service.
Following the same formula, private respondent should receive a 13th month pay of P850.00
for the year 1990 for services rendered for three months wherein she received a total compensation
of P10,205.00, that is, P10,205.00 divided by 12 equals P850.00.
LABOR CONGRESS VS NLRC

Labor Congress of the Philippines vs. NLRC
GR No. 123938 May 21, 1998
FIRST DIVISION | Davide, Jr., J.:

FACTS:
- Private petitioners, represented by Labor Congress of the Philippines (LCP), are rank-and-file
employees of respondent Empire Food Products.
- Petitioners filed a complaint against Empire, praying for money claims and direct certification of
Labor Congress as their bargaining representative.
- Oct. 1990 - LCP and Empire entered into a Memorandum of Agreement (MOA), providing:
A) LCP is recognized as the sole bargaining rep. of the employees.

B) To adjust the wages of the employees.
C) Deduct Union dues to the payroll
- Nov. 9, 1990 - LCP submitted to Empire a proposal for collective bargaining.
- Jan. 29, 1991 - LCP filed a complaint against Empire, alleging:
A) Unfair labor practices ( illegal lockout, dismissal)

B) Union busting
C) violation of MOA
D) underpayment of wages
E) other damages
- The Labor Arbiter ruled IN FAVOR of Empire, but ordered the reinstatement of the employees who
resigned and those who signed quitclaims and releases.
- Upon appeal, NLRC remanded the case back to the Labor Arbiter
- The Labor Arbiter, and AFFIRMED by NLRC, ruled that:

A) no prima facie evidence of existence of unfair labor practice, etc.

B) Employees were piece-rate workers, hence not entitles to benefits

C) Not underpaid
ISSUE/S: 1) Whether the petitioners who are piece-rate workers are entitled to benefits
2) Whether they are considered regular employees
HELD: They are piece-rate workers; they are entitled to benefits; they are regular employees
RATIO: They are piece-rate workers. They are entitled to full backwages, however, the amount is
indeterminate, hence, there is need to determine the varying degrees of production and days worked
by each worker. They are REGULAR EMPLOYESS although they are paid in piece-rate basis, based
on the following factors: (a) their job is necessary and desirable in the usual business of Empire, (b)
petitioners work for them throughout the year, their employment NOT HAVING BEEN DEPENDENT
on a specific season, and ( c ) the length of time they worked for Empire. Thus, “while petitioners
mode of compensation was on a ‘per piece basis’, the status and nature of their employment was that
of regular employees.”
PETITION: GRANTED
[G.R. No. 116960. April 2, 1996]
BERNARDO JIMENEZ and JOSE JIMENEZ, as Operators of JJs TRUCKING, petitioners,
vs. NATIONAL LABOR RELATIONS COMMISSION, PEDRO JUANATAS and FREDELITO
JUANATAS, respondents.
FACTS:
Pedro and Fredelito Juanatas, father and son, filed a claim for unpaid wages/commissions,
separation pay and damages against JJs Trucking and/or Dr. Bernardo Jimenez. They alleged that in
December, 1987, they were hired by herein Bernardo Jimenez as driver mechanic and helper,
respectively, in his trucking firm, JJ Trucking. They were assigned to a ten-wheeler truck to haul soft
drinks of Coca-Cola Bottling Company and paid on commission basis, initially fixed at 17% but later
increased to 20% in 1988.The Juanatas claimed that for the years 1988 and 1989, they received only
a partial commission from the petitioners’ total gross income. They further alleged that petitioners’
refusal to pay their aforestated commission was a ploy to unjustly terminate them.
Disputing the complaint, the Jimenez’ contend that respondent Fredelito Juanatas was not an
employee of the firm but was merely a helper of his father Pedro; that all commissions for 1988 and
1989, as well as those up to March, 1990, were duly paid; and that the truck driven by respondent
Pedro Juanatas was sold to one Winston Flores in 1991 and, therefore, private respondents were not
illegally dismissed.
After hearings duly conducted, and with the submission of the parties position/supporting papers,
Labor Arbiter Roque B. de Guzman rendered a decision ordering JJs Trucking and/or Dr. Bernardo
Jimenez to pay jointly and severally complainant Pedro Juanatas a separation pay of FIFTEEN
THOUSAND FIFTY (P15,050.00) PESOS however, the complaint of Fredelito Juanatas was
dismissed for lack of merit.

ISSUES:
(1) Whether or not the Juanatas were paid of their commissions in full, and
(2) Whether or not Fredelito Juanatas was an employee of JJs Trucking.
HELD:
(1)
No. The commission of Pedro Juanatas was not paid in full. As a general rule, one who pleads
payment has the burden of proving it. Even where the plaintiff must allege non-payment, the general
rule is that the burden rests on the defendant to prove payment, rather than on the plaintiff to prove
non-payment. The debtor has the burden of showing with legal certainty that the obligation has been
discharged by payment.
In the instant case, the right of respondent Pedro Juanatas to be paid a commission equivalent
to 17%, later increased to 20%, of the gross income is not disputed by petitioners. Although private
respondents admit receipt of partial payment, petitioners still have to present proof of full payment.
Where the defendant sued for a debt admits that the debt was originally owed, and pleads payment in
whole or in part, it is incumbent upon him to prove such payment.
The testimony of petitioners which merely denied the claim of private respondents,
unsupported by documentary evidence, is not sufficient to establish payment. Hence, for failure to
present evidence to prove payment, petitioners defaulted in their defense and in effect admitted the
allegations of private respondents.
(2)
No, Fredelito Juanatas was not an employee. The test in determining the existence of an
employee-employer relationship is not the necessity and/or desirability of ones functions in relation to
an employer’s business, but (1) the selection and engagement of the employee; (2) the payment of
wages; (3) the power of dismissal; and (4) the power to control the employees conduct. The latter is
the most important element
In the case at bar, the aforementioned elements are not present. The agreement was between
petitioner JJs Trucking and respondent Pedro Juanatas. The hiring of a helper was discretionary on
the part of Pedro. Under their contract, should he employ a helper, he would be responsible for the
latter’s compensation. With or without a helper, respondent Pedro Juanatas was entitled to the same
percentage of commission.
Respondent Fredelito Juanatas was hired by his father, Pedro, and the compensation he
received was paid by his father out of the latter’s commission. Further, Fredelito was not subject to
the control and supervision of and dismissal by petitioners but of and by his father. Thus, he is not
entitled to share in the award for commission and separation pay of his father.
[G.R. No. 129584. December 3, 1998]
TRIPLE EIGHT INTEGRATED SERVICES, INC., petitioner, vs.

NATIONAL LABOR RELATIONS COMMISSION,

HON. LABOR ARBITER POTENCIANO S. CANIZARES, JR. And
ERLINDA R. OSDANA, respondents.
FACTS:
Erlinda Osdana was recruited by TRIPLE EIGHT INTEGRATED SERVICES, INC for
employment with its principal, Gulf Catering Company (GCC), a firm based in the Kingdom of Saudi
Arabia. Osdana sighed a Contractor-Employee Agreement which provided that she would be
employed as a waitress for twelve (12) months with a salary of two hundred eighty US dollars ($280).
Such employment agreement was approved by the Philippine Overseas Employment Administration
(POEA). However, contrary to the terms and conditions of the employment contract, she was made to
wash dishes, cooking pots, and utensils, perform janitorial work and other tasks which were unrelated
to her job designation as waitress
Because of the long hours and the strenuous nature of her work, Osdana suffered from
numbness and pain in her arms. The pain was such that she had to be confined and was diagnosed
as having Bilateral Carpal Tunnel Syndrome, a condition precipitated by activities requiring repeated
flexion, pronation, and supination of the wrist and characterized by excruciating pain and numbness
in the arms. She underwent two surgical operations and with very good improvement of the
symptoms she was discharged two days after. However, four days after she was dismissed from
work, allegedly on the ground of illness. She was not given any separation pay nor was she paid her
salaries for the periods when she was not allowed to work. Upon her return to the Philippines,
Osdana sought the help of petitioner, but to no avail.
ISSUE:
Is Osdana entitled to receive salary for the unexpired portion of her employment contract?
HELD:
Yes. Article 284 of the Labor Code is clear on the matter of termination by reason of disease,
specifically, Section 8, Rule 1, Book VI of the Omnibus Rules Implementing the Labor Code which
provides that
“Where the employee suffers from a disease and his continued employment is
prohibited by law or prejudicial to his health or to the health of his co-employees, the employer
shall not terminate his employment unless there is a certification by competent public authority
that the disease is of such nature or at such a stage that it cannot be cured within a period of
six (6) months with proper medical treatment. If the disease or ailment can be cured within the
period, the employer shall not terminate the employee but shall ask the employee to take a
leave. The employer shall reinstate such employee to his former position immediately upon the
restoration of his normal health”
Osdanas continued employment despite her illness was not prohibited by law nor was it prejudicial to
her health, as well as that of her co-employees. In fact, the medical report issued after her second
operation stated that she had very good improvement of the symptoms. Besides, Carpal Tunnel
Syndrome is not a contagious disease.
Thus, as provided for in Paragraph 5, Section 10 of R.A. No. 8042, in case of termination of overseas
employment without just, valid or authorized cause as defined by law or contract, the worker shall be
entitled to the full reimbursement of his placement fee with interest at twelve percent (12%) per

annum, plus his salaries for the unexpired portion of his employment contract or for three (3) months
for every year of the unexpired term, whichever is less.
G.R. No. 87700 June 13, 1990
SAN MIGUEL CORPORATION EMPLOYEES UNION-PTGWO, DANIEL S.L. BORBON II,

HERMINIA REYES, MARCELA PURIFICACION, ET AL., petitioners,
vs.
HON. JESUS G. BERSAMIRA, IN HIS CAPACITY AS PRESIDING JUDGE OF BRANCH 166, RTC,
PASIG, and SAN MIGUEL CORPORATION, respondents.
FACTS;
Sometime in 1983 and 1984, SanMig entered into contracts for merchandising services with Lipercon
and D'Rite to maintain its competitive position and in keeping with the imperatives of efficiency,
business expansion and diversity of its operation. In said contracts, it was expressly understood and
agreed that the workers employed by the contractors were to be paid by the latter and that none of
them were to be deemed employees or agents of SanMig. There was to be no employer-employee
relation between the contractors and/or its workers, on the one hand, and SanMig on the other.
Petitioner San Miguel Corporation Employees Union-PTWGO (the Union, for brevity) is the duly
authorized representative of the monthly paid rank-and-file employees of SanMig with whom the latter
executed a Collective Bargaining Agreement (CBA). Section 1 of their CBA specifically provides that
"temporary, probationary, or contract employees and workers are excluded from the bargaining unit
and, therefore, outside the scope of this Agreement."
In a letter, dated 20 November 1988, the Union advised SanMig that some Lipercon and D'Rite
workers had signed up for union membership and sought the regularization of their employment with
SMC. They contended that there exists a "labor-only" contracting situation hence the demand that the
employment status of these workers be regularized.
The Union believes that the controversy in the court a quo involves or arose out of a labor dispute
and is directly connected or interwoven with the cases pending with the NCMB-DOLE, and is thus
beyond the ambit of the public respondent's jurisdiction. On the other hand SanMig denies the
existence of any employer-employee relationship and consequently of any labor dispute between
itself and the Union.
ISSUE:
Whether or not the case at bar involves, or is in connection with, or relates to a labor dispute
HELD:
Yes, the case involves a labor dispute. A "labor dispute" as defined in Article 212 (1) of the Labor
Code includes "any controversy or matter concerning terms and conditions of employment or the
association or representation of persons in negotiating, fixing, maintaining, changing, or arranging the
terms and conditions of employment, regardless of whether the disputants stand in the proximate
relation of employer and employee."

While it is SanMig's submission that no employer-employee relationship exists between itself, on the
one hand, and the contractual workers of Lipercon and D'Rite on the other, a labor dispute can
nevertheless exist "regardless of whether the disputants stand in the proximate relationship of
employer and employee" (Article 212 [1], Labor Code, supra) provided the controversy concerns,
among others, the terms and conditions of employment or a "change" or "arrangement" thereof (ibid).
Pursuant to Article 217 of the Labor Code, the jurisdiction of the case belongs to the labor tribunals.
While the court recognizes the proprietary right of SanMig to exercise an inherent management
prerogative and its best business judgment to determine whether it should contract out the
performance of some of its work to independent contractors. However, the rights of all workers to self-
organization, collective bargaining and negotiations, and peaceful concerted activities, including the
right to strike in accordance with law (Section 3, Article XIII, 1987 Constitution) equally call for
recognition and protection. Those contending interests must be placed in proper perspective and
equilibrium.
[G.R. No. 127598. February 22, 2000]
MANILA ELECTRIC COMPANY, petitioner, vs. Hon. Secretary of Labor Leonardo Quisumbing
and Meralco Employees and Workers Association (MEWA), respondents.
FACTS:
MEWA is the duly recognized labor organization of the rank-and-file employees of MERALCO. On
September 7, 1995, MEWA informed MERALCO of its intention to re-negotiate the terms and
conditions of their existing 1992-1997 Collective Bargaining Agreement (CBA) covering the remaining
period of two years starting from December 1, 1995 to November 30, 1997. MERALCO signified its
willingness to re-negotiate through its letter dated October 17, 1995 and formed a CBA negotiating
panel for the purpose. On November 10, 1995, MEWA submitted its proposal to MERALCO, which,
in turn, presented a counter-proposal. Thereafter, collective bargaining negotiations proceeded.
However, despite the series of meetings between the negotiating panels of MERALCO and MEWA,
the parties failed to arrive at “terms and conditions acceptable to both of them.”
On April 23, 1996, MEWA filed a Notice of Strike with the National Capital Region Branch of the
National Conciliation and Mediation Board (NCMB) of the Department of Labor and Employment
(DOLE) which was docketed as NCMB-NCR-NS-04-152-96, on the grounds of bargaining deadlock
and unfair labor practices. The NCMB then conducted a series of conciliation meetings but the
parties failed to reach an amicable settlement. MERALCO filed a petition to let the Secretary of
DOLE to assume jurisdiction over the case which was granted.
ISSUE:
Whether the members of MEWA are entitled to benefits given as bonuses, being negotiated in the
CBA.
HELD:
The members of MEWA are entitled to the benefits although in the form of benefits which is a subject
of the negotiation of CBA.
As a rule, a bonus is not a demandable and enforceable obligation; it may nevertheless be granted on
equitable consideration as when the giving of such bonus has been the company’s long and

regular practice. To be considered a “regular practice,” the giving of the bonus should have been
done over a long period of time, and must be shown to have been consistent and deliberate.
The ruling in National Sugar Refineries Corporation vs. NLRC: “The test or rationale of this rule on
long practice requires an indubitable showing that the employer agreed to continue giving the benefits
knowing fully well that said employees are not covered by the law requiring payment thereof.”
In this case, the record shows the MERALCO, aside from complying with the regular 13 th month
bonus, has further been giving its employees an additional Christmas bonus at the tail-end of the year
since 1988. While the special bonuses differed in amount and bore different titles, it can not be
denied that these were given voluntarily and continuously on or about Christmas time.
The considerable length of time MERALCO has been giving the special grants to its employees
indicates a unilateral and voluntary act on its part, to continue giving said benefits knowing that such
act was not required by law. Indeed, a company practice favorable to the employees has been
established and the payments made by MERALCO pursuant thereto ripened into benefits enjoyed by
the employees. Consequently, the giving of the special bonus can no longer be withdrawn by the
company as this would amount to a diminution of the employee’s existing benefits.
G.R. No. 115394 September 27, 1995
FE S. SEBUGUERO, CARLOS ONG, NENE MANAOG, JUANITO CUSTODIO, CRISANTA

LACSAM, SATURNINO GURAL, WILMA BALDERA, LEONILA VALDEZ, FATIMA POTESTAD,
EVANGELINE AGNADO, RESTITUTO GLORIOSO, JANESE DE LOS REYES, RODOLFO
SANCHEZ, WILMA ORBELLO, DAISY PASCUA, and ALEX MASAYA, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, G.T.I. SPORTSWEAR CORPORATION and/or
BENEDICTO YUJUICO, respondents.
FACTS:
The petitioners were among the thirty-eight (38) regular employees of private respondent GTI
Sportswear Corporation (hereinafter GTI), who were given "temporary lay-off" notices due to alleged
lack of work and heavy losses caused by the cancellation of orders from abroad and by the garments
embargo of 1990.
Believing that their "temporary lay-off" was a ploy to dismiss them, resorted to because of their union
activities and was in violation of their right to security of tenure since there was no valid ground
therefor, the 38 laid-off employees filed with the Labor Arbiter's office in the National Capital Region
complaints for illegal dismissal, unfair labor practice, underpayment of wages under Wage Orders
Nos. 01 and 02, and non-payment of overtime pay and 13th month pay.
Private respondent GTI denied the claim of illegal dismissal and asserted that it was its prerogative to
lay-off its employees temporarily for a period not exceeding six months to prevent losses due to lack
of work or job orders from abroad, and that the lay-off affected both union and non-union members. It
justified its failure to recall the 38 laid-off employees after the lapse of six months because of the
subsequent cancellations of job orders made by its foreign principals, a fact which was communicated
to the petitioners and the other complainants who were all offered severance pay. Twenty-two (22) of
the 38 complainants accepted the separation pay. The petitioners herein did not.

ISSUE:
Are the petitioners entitled to the full payment of back wages?
HELD
No, Under the aforequoted Article 283 of the Labor Code, there are three basic requisites for a valid
retrenchment:
(1) the retrenchment is necessary to prevent losses and such losses are proven;
(2) written notice to the employees and to the Department of Labor and Employment at least one
month prior to the intended date of retrenchment; and
(3) payment of separation pay equivalent to one month pay or at least 1/2 month pay for every year of
service, whichever is higher.
As to the first requisite both the Labor Arbiter and the NLRC found that the private respondent was
suffering and would continue to suffer serious losses, thereby justifying the retrenchment of some of
its employees, including the petitioners. Since the petitioners did not appeal the finding of the Labor
Arbiter that their temporary lay-off to prevent losses was amply justified, they cannot now question
this finding that there is a valid ground to lay-off or retrench them.
As to the second requirement, it is undisputed that the petitioners were given notice of the temporary
lay-off. There is, however, no evidence that any written notice to permanently retrench them was
given at least one month prior to the date of the intended retrenchment. There is also nothing in the
records to prove that a written notice was ever given to the DOLE as required by law. The law
requires two notices — one to the employee/s concerned and another to the DOLE — not just one.
The notice to the DOLE is essential because the right to retrench is not an absolute prerogative of an
employer but is subject to the requirement of law that retrenchment be done to prevent losses. The
DOLE is the agency that will determine whether the planned retrenchment is justified and adequately
supported by facts.
With respect to the payment of separation pay, the NLRC found that GTI offered to give the
petitioners their separation pay but that the latter rejected such offer which was accepted only by 22
out of the 38 original complainants in this case. As to when this offer was made was not, however,
proven. All that the parties, the Labor Arbiter and the NLRC stated in their respective pleadings and
decisions was that the offer and payment were made during the pendency of the illegal dismissal
case with the Labor Arbiter. But with or without this offer of separation pay, our conclusion would
remain the same: that the retrenchment of the petitioners is defective in the face of our finding that
the required notices to both the petitioners and the DOLE were not given.
The lack of written notice to the petitioners and to the DOLE does not, however, make the petitioners'
retrenchment illegal such that they are entitled to the payment of back wages and separation pay in
lieu of reinstatement as they contend. Their retrenchment, for not having been effected with the
required notices, is merely defective.
Accordingly, the court affirmed the deletion by the NLRC of the award of back wages. But because
the required notices of the petitioners' retrenchment were not served upon the petitioners and the
DOLE, GTI must be sanctioned for such failure and thereby required to indemnify each of the
petitioners the sum of P2,000.00 which we find to be just and reasonable under the circumstances of
this case.

As for the award of the 13th-month pay made by the Labor Arbiter and deleted by the NLRC, the
court did not find anything in the decision of the NLRC to support the deletion of this award other than
its opinion that there is lack of legal basis to support such an award, without, however, furnishing any
explanation for this finding. Thus, the award of the 13th-month pay made and sufficiently justified by
the Labor Arbiter must be reinstated as prayed for by the petitioners.
[G.R. No. 116354. December 4, 1997]
HEIRS OF THE LATE R/O REYNALDO ANIBAN represented by BRIGIDA P.

ANIBAN, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, PHILIPPINE
TRANSMARINE CARRIERS, INC., NORWEGIAN SHIP MANAGEMENT, INC. A/S, and
PIONEER INSURANCE AND SURETY CORPORATION, respondents.
FACTS:
Reynaldo Aniban was employed by the Philippine Transmarine Carriers, Inc. (TRANSMARINE) as
radio operator (R/O) on board the vessel "Kassel" for a contract period of nine (9) to eleven (11)
months. During the period of his employment, R/O Aniban died due to myocardial infarction. He was
survived by a pregnant wife and three (3) minor children who prayed for death benefits provided
under par. (1) of the POEA Standard Employment Contract and additional death benefits under the
Collective Bargaining Agreement executed between Associated Marine Officers and Seamen's Union
of the Philippines and NORWEGIAN represented by TRANSMARINE
However, only $13,000 was granted under the POEA Standard Employment Contract. The claim
under the CBA was rejected on the ground that myocardial infarction of which R/O Aniban died was
not an occupational disease as to entitle his heirs to the additional death benefits provided therein.
Consequently, Brigida Aniban (wife) and her children filed a formal complaint for non-payment of
death compensation benefits under the CBA.
ISSUE:
Whether or not myocardial infarction is an occupational disease as to entitle petitioners to the death
benefits provided under the CBA.
HELD:
Yes. In Eastern Shipping Lines, Inc. v. POEA, although compensability was not the main issue, the
court upheld the decision of the POEA adjudging as compensable the death of a seaman on board
the vessel of his foreign employer due to myocardial infraction
In the present case, the POEA likened the infirmity to a "heart attack" commonly aggravated by
pressure and strain. Reynaldo Aniban was healthy at the time he boarded the vessel of his foreign
employer. His medical records reveal that he had no health problem except for a "defective central
vision secondary to injury." Hence, he was certified "fit to work as radio operator" by the examining
physician. However, R/O Aniban died three (3) months after he boarded "Kassel" due to myocardial
infarction.

As aforesaid, the POEA ruled that the cause of death could be considered occupational. Being a
factual finding by the administrative agency tasked with its determination, such conclusion deserves
respect and must be accorded finality. Besides we have already repeatedly ruled that death due to
myocardial infarction is compensable.
[G.R. No. 113097. April 27, 1998]
NASIPIT LUMBER COMPANY, INC., and PHILIPPINE WALLBOARD

CORPORATION, petitioners, vs. NATIONAL WAGES AND PRODUCTIVITY COMMISSION,
WESTERN AGUSAN WORKERS UNION (WAWU-ULGWP LOCAL 101), TUNGAO
LUMBER WORKERS UNION (TULWU-ULGWP LOCAL 102) and UNITED WORKERS
UNION (UWU-ULGWP LOCAL 103), respondents.
The Labor Code, as amended by RA 6727 (the Wage Rationalization Act), grants the National Wages
and Productivity Commission (NWPC) the power to prescribe rules and guidelines for the
determination of appropriate wages in the country. Hence, "guidelines" issued by the Regional
Tripartite Wages and Productivity Boards (RTWPB) without the approval of or, worse, contrary to
those promulgated by the NWPC are ineffectual, void and cannot be the source of rights and
privileges.
FACTS:
The Region X [Tripartite Wages and Productivity] Board issued Wage Order No. RX-01 which
provides the increase in minimum wage rates applicable to workers and employees in the private
sector in Northern Mindanao (Region X) (P13.00/day for Agusan del Norte, Bukidnon, Misamis
Oriental, and the Cities of Butuan, Gingoog, and Cagayan de Oro; P11.00/day for Agusan del Sur,
Surigao del Norte and Misamis Occidental, and the Cities of Surigao Oroquieta, Ozamis and Tangub;
and P9.00/dayfor Camiguin) Nasipit Lumber Company, Inc. (NALCO), Philippine Wallboard
Corporation (PWC), and Anakan Lumber Company (ALCO), claiming to be separate and distinct from
each other but for expediency and practical purposes, jointly filed an application for exemption from
the Wage Orders as distressed establishments an based the exemption on Guidelines No. 3 issued
by the herein Board but did not pass the approval of the Commission.
ISSUE:
Whether or not the guideline issued by an RTWPB without the approval of or, worse, contrary to the
guidelines promulgated by the NWPC valid?
HELD:
Not valid. Article 121 of the Labor Code lists the powers and functions of the NWPC. Which includes
that the Commission has the power to (c) To prescribe rules and guidelines for the determination of
appropriate minimum wage and productivity measures at the regional, provincial or industry levels; (d)
To review regional wage levels set by the Regional Tripartite Wages and Productivity Boards to
determine if these are in accordance with prescribed guidelines and national development plans;
among others. Article 122 of the Labor Code, on the other hand, prescribes the powers of the
RTWPB, one of which is (b) To determine and fix minimum wage rates applicable in their region,

provinces or industries therein and to issue the corresponding wage orders, subject to guidelines
issued by the Commission.
The foregoing clearly grants the NWPC, not the RTWPB, the power to "prescribe the rules and
guidelines" for the determination of minimum wage and productivity measures. While the RTWPB has
the power to issue wage orders under Article 122 (b) of the Labor Code, such orders are subject to
the guidelines prescribed by the NWPC. Significantly, the NWPC authorized the RTWPB to issue
exemptions from wage orders, but subject to its review and approval. Since the NWPC never
assented to Guideline No. 3 of the RTWPB, the said guideline is inoperative and cannot be used by
the latter in deciding or acting on petitioners' application for exemption.
To allow RTWPB Guideline No. 3 to take effect without the approval of the NWPC is to arrogate unto
RTWPB a power vested in the NWPC by Article 121 of the Labor Code, as amended by RA 6727. If a
discrepancy occurs "between the basic law and an implementing rule or regulation, it is the
former that prevails." This is so because the law cannot be broadened by a mere administrative
issuance. It is axiomatic that "[a]n administrative agency cannot amend an act of Congress." Article
122 (e) of the Labor Code cannot be construed to enable the RTWPB to decide applications for
exemption on the basis of its own guidelines which were not reviewed an approved by the NWPC, for
the simple reason that a statutory grant of "powers should not be extended by implication beyond
what may be necessary for their just and reasonable execution. Official powers cannot be merely
assumed by administrative officers, nor can they be created by the courts in the exercise of their
judicial functions."
[G.R. No. 128399. January 15, 1998]
CAGAYAN SUGAR MILLING COMPANY, petitioner, vs. SECRETARY OF LABOR AND

EMPLOYMENT, DIRECTOR RICARDO S. MARTINEZ, SR., and CARSUMCO EMPLOYEES
UNION, respondents.
FACTS:
Cagayan Sugar Milling, Co. violated the Regional Wage Order No. RO2-02 issued by the RTWPB,
having failed to implement the across the board increase in the salary of its employees. Petitioner
maintained that it complied with the order as it paid the mandated increase in the minimum wage.
However, Regional Director Ricardo S. Martinez, Sr. ruled and ordered petitioner to pay the
deficiency in the salary of its employees in the total amount of P555,133.41.
Pending appeal to the Labor Secretary Leonardo A. Quisumbing, another wage order was issued,
amending the earlier wage order and providing that the across the board wage increase shall retroact
to the date of the effectivity of the earlier wage order No. RO2-02. Petitioner now assails the validity
of Wage Order RO2-02-A on the ground that it was passed without the required public consultation
and newspaper publication. Thus, petitioner claims that Labor Secretary Quisumbing abused his
discretion in upholding the validity of said wage order..
ISSUE:
Whether or not the amendatory wage order violated CSMC’s right to due process

HELD:
YES. It is a fundamental rule, borne out of a sense of fairness, that the public is first notified of a law
or wage order before it can be held liable for violation thereof.
Article 123 of the Labor Code provides, whenever conditions in the region so warrant, the Regional
Board shall investigate and study all pertinent facts, and, based on the standards and criteria herein
prescribed, shall proceed to determine whether a Wage Order should be issued. Any such Wage
Order shall take effect after fifteen (15) days from its complete publication in at least one (1)
newspaper of general circulation in the region. In the performance of its wage-determining
functions, the Regional Board shall conduct public hearings/consultations, giving notices to
employees' and employers' groups and other interested parties.
In the present case, it is indisputable that there was no public consultation or hearing conducted prior
to the passage of RO2-02-A. Neither was it published in a newspaper of general circulation as
attested in the February 3, 1995 minutes of the meeting of the Regional Wage Board that the non-
publication was by consensus of all the board members.
Hence, RO2-02-A must be struck down for lack of public consultations and hearings and non-
publication in a newspaper of general circulation, in violation of Article 123 of the Labor Code.
G.R. No. 102636 September 10, 1993
METROPOLITAN BANK & TRUST COMPANY EMPLOYEES UNION-ALU-TUCP and ANTONIO V.

BALINANG, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION (2nd Division) and METROPOLITAN BANK and
TRUST COMPANY, respondents.
Gilbert P. Lorenzo for petitioners.
Marcial G. dela Fuente for private respondents.
FACTS:
Metrobank entered into a CBA with Petitioner, granting a P900 increase in wages. Subsequently, a
law was passed increasing the minimum wage. Metrobank classified employees into those receiving
less than 100 per day and those receiving more. Those receiving more were not covered by the
implementation of the new law but only the increase as agreed upon in the CBA. Petitioners argue
that the method of implementation created a wage distortion within the employees of Metrobank
because the differences in the salaries of the employee classifications were substantially reduced.
ISSUE:
Whether or not there was wage distortion?
HELD:
Yes. There was wage distortion. Under the Rules Implementing Act 6727, Wage Distortion means a
situation where an increase in prescribed wage rates results in the elimination or severe contradiction
of intentional quantitative differences in wage or salary rates between and among employee groups in

an establishment as to effectively obliterate the distinctions embodied in such wage structure based
on skills, length of service, or other logical bases of differentiation.
However, in keeping then with the intendment of the law and the agreement of the parties
themselves, the court did not subscribe to the labor arbiter's exacting prescription in correcting the
wage distortion. Like the majority of the members of the NLRC, we are also of the view that giving the
employees an across-the-board increase of P750 may not be conducive to the policy of encouraging
"employers to grant wage and allowance increases to their employees higher than the minimum rates
of increases prescribed by statute or administrative regulation," particularly in this case where both
Republic Act 6727 and the CBA allow a credit for voluntary compliance.
The formula suggested by Commissioner Bonto-Perez viewed by the court as being just and
equitable has been the standard considered by the regional Tripartite Wages and Productivity
Commission for the correction of pay scale structures in cases of wage distortion. Hence it may well
be the appropriate measure to balance the respective contentions of the parties.
ILAW AT BUKLOD NG MANGGAGAWA vs. NLRC et. al.

G.R. No. 91980 June 27, 1991
NARVASA, J.
FACTS: The controversy at bar had its origin in the "wage distortions" affecting the employees of
respondent San Miguel Corporation allegedly caused by Republic Act No. 6727, otherwise known as
the Wage Rationalization Act. Upon the effectivity of the Act, the union known as "Ilaw at Buklod Ng
Manggagawa (IBM)" said to represent 4,500 employees of San Miguel Corporation, more or less,
"working at the various plants, offices, and warehouses located at the National Capital Region"
presented to the company a "demand" for correction of the "significant distortion in . . . (the workers')
wages." In that "demand," the Union explicitly invoked Section 4 (d) of RA 6727 which reads as
follows: xxx xxx xxx
(d) . . .Where the application of the increases in the wage rates under this Section results in
distortions as defined under existing laws in the wage structure within an establishment and gives rise
to a dispute therein, such dispute shall first be settled voluntarily between the parties and in the event
of a deadlock, the same shall be finally resolved through compulsory arbitration by the regional
branches of the National Labor Relations Commission (NLRC) having jurisdiction over the
workplace…
The Union claims that demand was ignored. In this connection, the workers involved issued a
joint notice reading as follows:
SAMA-SAMANG PAHAYAG: KAMING ARAWANG MANGGAGAWA NG POLO BREWERY
PAWANG KASAPI NG ILAW AT BUKLOD NG MANGGAGAWA (IBM) AY NAGKAISANG
NAGPASYA NA IPATUPAD MUNA ANG EIGHT HOURS WORK SHIFT PANSAMANTALA HABANG
HINDI IPINATUTUPAD NG SMC MANAGEMENT ANG TAMANG WAGE DISTORTION.
That decision to observe the "eight hours work shift" was implemented on October 16, 1989 by "some
800 daily-paid workers at the Polo Plant's production line of SMC] joined by others at statistical quality
control and warehouse. There ensued thereby a change in the work schedule which had been
observed by daily-paid workers at the Polo Plant for the past five (5) years, i.e. "ten (10) hours for the
first shift and ten (10) to fourteen (14) hours for the second shift, from Mondays to Fridays . . ; (and

on) Saturdays, . . eight (8) hours for both shifts" a work schedule which, SMC says, the workers had
"welcomed, and encouraged" because the automatic overtime built into the schedule "gave them a
steady source of extra-income," and pursuant to which it (SMC) "planned its production targets and
budgets.
This abandonment of the long-standing schedule of work and the reversion to the eight-hour shift
apparently caused substantial losses to SMC. It is SMC's submittal that the coordinated reduction by
the Union's members of the work time theretofore willingly and consistently observed by them,
causing financial losses to the employer in order to compel it to yield to the demand for correction of
"wage distortions," is an illegal and "unprotected" activity.
ISSUE: Whether or not the strike is illegal?
RULING: YES. Among the rights guaranteed to employees by the Labor Code is that of engaging in
concerted activities in order to attain their legitimate objectives. The more common of these concerted
activities as far as employees are concerned are: strikes- the temporary stoppage of work as a result
of an industrial or labor dispute. On the other hand, the counterpart activity that management may
licitly undertake is the lockout- the temporary refusal to furnish work on account of a labor dispute,
Article 263 provides that the "right of legitimate labor organizations to strike and of employer to
lockout, consistent with the national interest, shall continue to be recognized and respected." The
legality of these activities is usually dependent on the legality of the purposes sought to be attained
and the means employed therefor.It goes without saying that these joint or coordinated activities may
be forbidden or restricted by law or contract.
Section 3 of Republic Act No. 6727 prescribes a specific, detailed and comprehensive procedure for
the correction thereof, thereby implicitly excluding strikes or lockouts or other concerted activities as
modes of settlement of the issue. The provision states that:
xxx … the employer and the union shall negotiate to correct the distort-ions. Any dispute arising from
wage distortions shall be resolved through the grievance procedure under their collective bargaining
agreement and, if it remains unresolved, through voluntary arbitration…
Furthermore, Section 16, Chapter I of the implementing rules of said law… declares that, "Any issue
involving wage distortion shall not be a ground for a strike/lockout."
Moreover, the worker’s concerted refusal to adhere to the work schedule in force is a slowdown, an
inherently illegal activity even in the absence of a no strike clause because while the employees
continue to work and remain at their positions and accept their wages, they at the same time select
part of the work they care to perform at their own volition or in their own terms.
PRUBANKERS ASSOCIATION, petitioner,  vs. PRUDENTIAL BANK & TRUST COMPANY,

respondent
G.R. No. 131247

January 25, 1999
FACTS:

The Regional Tripartite Wages and Productivity Board (RTWPB) Region V issued Wage Order No.
RB 05-03 which provided for a Cost of Living Allowance (COLA) to workers in the private sector who
had rendered service for at least three (3) months before its effectivity, and for the same period
thereafter. RTWPB Region VII however followed suit but the COLA amounts in other cities nationwide
were different from that issued by RTWPN region V. This caused Prubankers Association to write the
petitioner requesting that the Labor Management Committee be immediately convened to discuss
and resolve the alleged wage distortion created in the salary structure upon the implementation of the
said wage orders. As the grievance could not be settled in the meetings, the parties agreed to submit
the matter to voluntary arbitration.
Respondent brought the case to appeal and was favored by CA, petitioner then sought the review by
SC. It argued that a wage distortion exists, because the implementation of the two Wage Orders has
resulted in the discrepancy in the compensation of employees of similar pay classification in different
regions.
ISSUE:
WON two wage orders resulting in the discrepancy of employees’ compensation in different regions
also results to a wage distortion.
HELD:
No.
There is no wage distortion since the wage order implementation covers all the branches of the bank.
The hierarchy of positions was still preserved.
Also, petitioner’s claim of wage distortion must also be denied for one other reason. The difference in
wages between employees in the same pay scale in different regions is not the mischief sought to be
banished by the law. Republic Act No. 6727 (the Wage Rationalization Act), recognizes “existing
regional disparities in the cost of living” as provided in Section 2 of said law.
***Notes: The levels of different pay classes was not eliminated. The statutory definition of wage
distortion is found in Article 124 of the Labor Code, as amended by Republic Act No. 6727, which
reads: Standards/Criteria for Minimum Wage Fixing. ―As used herein, a wage distortion shall mean
a situation where an increase in prescribed wage results in the elimination or severe contraction of
intentional quantitative differences in wage or salary rates between and among employee groups in
on skills, length of service, or other logical bases of differentiation. Wage distortion involves four
elements: (1) An existing hierarchy of positions with corresponding salary rates; (2) A significant
change in the salary rate of a lower pay class without a concomitant increase in the salary rate of a
higher one; (3)The elimination of the distinction between the two levels and (4) The existence of the
distortion in the same region of the country.

A disparity in wages between employees holding similar positions but in different regions does not
constitute wage distortion as contemplated by law. As stated, it is the hierarchy of positions and the
disparity of their corresponding wages and other emoluments that are sought to be preserved by the
concept of wage distortion.
BANKARD EMPLOYEES UNION-WORKERS ALLIANCE TRADE UNIONS v. NATIONAL LABOR

RELATIONS COMMISSION and BANKARD, INC. G.R. No. 140689 February 17, 2004 CARPIO
MORALES, J.: ARTICLE 124
DOCTRINE:
The four elements of wage distortion are: (1.) An existing hierarchy of positions with corresponding
salary rates; (2) A significant change in the salary rate of a lower pay class without a concomitant
increase in the salary rate of a higher one; (3) The elimination of the distinction between the two
levels; and (4) The existence of the distortion in the same region of the country.
FACTS:
Bankard, Inc. classifies its employees by levels, to wit: Level I to V. In 1993, its Board of Directors
approved a New Salary Scale for the purpose of making its hiring rate competitive in the industry’s
labor market. The New Salary Scale increased the hiring rates of new employees, to wit: Levels I and
V by P1,000, and Levels II, III and IV by P900. Accordingly, the salaries of employees who fell below
the new minimum rates were also adjusted to reach such rates under their levels.
Bankard’s move drew the Bankard Employees Union-WATU, the duly certified exclusive bargaining
agent of the regular rank and file employees of Bankard, to press for the increase in the salary of its
old, regular employees. Bankard took the position, however, that there was no obligation on the part
of the management to grant to all its employees the same increase in an across-the-board manner.
As the continued request remained unheeded, it filed a Notice of Strike on the ground of
discrimination and other acts of Unfair Labor Practice.
NLRC RULING: finding no wage distortion, dismissed the case for lack of merit.
CA RULING: denied the same for lack of merit. Hence, the present petition.
ISSUE:
Whether the unilateral adoption by an employer of an upgraded salary scale that increased the hiring
rates of new employees without increasing the salary rates of old employees resulted in wage
distortion within the contemplation of Article 124 of the Labor Code.
SC RULING: NO.
Upon the enactment of R.A. No. 6727 (WAGE RATIONALIZATION ACT, amending, among others,
Article 124 of the Labor Code) on June 9, 1989, the term wage distortion was explicitly defined as: ...
a situation where an increase in prescribed wage rates results in the elimination or severe contraction
of intentional quantitative differences in wage or salary rates between and among employee groups in
on skills, length of service, or other logical bases of differentiation. The four elements of wage
distortion are: (1.) An existing hierarchy of positions with corresponding salary rates; (2) A significant
change in the salary rate of a lower pay class without a concomitant increase in the salary rate of a
higher one; (3) The elimination of the distinction between the two levels; and (4) The existence of the
distortion in the same region of the country. Involved in the classification of employees are various
factors such as the degrees of responsibility, the skills and knowledge required, the complexity of the
job, or other logical basis of differentiation. The differing wage rate for each of the existing classes of
employees reflects this classification. Petitioner maintains that for purposes of wage distortion, the
classification is not one based on levels or ranks but on two groups of employees, the newly hired
and the old, in each and every level, and not between and among the different levels or ranks in the
salary structure. The employees of Bankard have been historically classified into levels, i.e. I to V,
and not on the basis of their length of service.
The Union cannot make a contrary classification of Bankard’s employees without encroaching upon
recognized management prerogative of formulating a wage structure, in this case, one based on
level. It is thus clear that there is no hierarchy of positions between the newly hired and regular
employees of Bankard, hence, the first element of wage distortion is wanting. For purposes of
determining the existence of wage distortion, employees cannot create their own independent
classification and use it as a basis to demand an across-the-board increase in salary. Even assuming
that there is a decrease in the wage gap between the pay of the old employees and the newly hired
employees, said gap is not significant as to obliterate or result in severe contraction of the intentional
quantitative differences in the salary rates between the employee group. The classification under the
wage structure is based on the rank of an employee, not on seniority. For this reason, wage distortion
does not appear to exist.
PT&T Co. v. NLRC, GR No. 118978, May 23, 1997

FACTS:
Grace de Guzman was hired by PT&T as a Supernumerary Project Worker for a fixed period from
November 21, 1990 until April 20, 1991 as reliever for C.F. Tenorio who went on maternity leave.
Under the Reliever Agreement signed by Grace, her employment was to be immediately terminated
upon expiration of the agreed period. From June 10, 1991 to July 1, 1991, and from July 19, 1991 to
August 8, 1991, PT&T again engaged the services of Grace as reliever for Erlinda F. Dizon who went
on leave during both periods. On September 2, 1991, Grace was asked to join petitioner company as
a probationary employee. In the job application form furnished to Grace, she indicated in the civil
status that she was single although she had in fact contracted marriage on May 26, 1991. This meant
she was not single, as she had represented herself, when she signed the reliever agreements on
June 10, 1991 and July 8, 1991. Petitioner dismissed Grace from the company after learning about
Grace’s real civil status and being unconvinced of Grace’s explanation for the discrepancy. Grace
immediately filed a complaint for illegal dismissal coupled with a claim for non-payment of cost of
living allowances (COLA), before the Regional Arbitration Branch of the National Labor Relations
Commission (NLRC) in Baguio City. At the preliminary conference, Grace volunteered the information
that she had failed to remit the amount of P2,380.75 of her collections, and executed a promissory
note for that amount in favor of petitioner. The Labor Arbiter handed down a decision declaring that
private respondent, who had already gained the status of a regular employee, was illegally dismissed
by petitioner and ordered her reinstatement plus payment of the corresponding back wages and
COLA. On appeal, the NLRC upheld the Labor Arbiter but modified the Labor Arbiter’s decision with
the qualification that Grace de Guzman deserved to be suspended for three months due to the
dishonest nature of her acts which should not be condoned.
ISSUE:

Can the alleged concealment of civil status be a ground for terminating the services of an employee?
HELD:
No. The Constitution provides a gamut of protective provisions due to the disparity in rights between
men and women in almost all phases of social and political life. Article II Section 14 of the 1987
Constitution states that “The State recognizes the role of women in nation-building, and shall ensure
the fundamental equality before the law of women and men.” Corollary to this is Article XIII Section 3
which states that “The State shall afford full protection to labor, local and overseas, organized and
unorganized, and promote full employment and equality of employment opportunities for all” and
Article XIII Section 14 which states that “The State shall protect working women by providing safe and
healthful working conditions, taking into account their maternal functions, and such facilities and
opportunities that will enhance their welfare and enable them to realize their full potential in the
service of the nation.” Since the Labor Code was enacted on May 1, 1974, corrective labor and social
laws on gender inequality have emerged with more frequency in the years. Two of these are Republic
Act No. 6727 which explicitly prohibits discrimination against women with respect to terms and
conditions of employment, promotion, and training opportunities; and Republic Act No. 7192 or the
Women in Development and Nation Building Act which, among others, affords women equal
opportunities with men to act and to enter into contracts. In the Labor Code, Article 136 explicitly
prohibits discrimination merely by reason of the marriage of a female employee. The private
respondent’s act of concealing the true nature of her status from PT&T could not be properly
characterized as willful or in bad faith as she was moved to act the way she did mainly because she
wanted to retain a permanent job in a stable company. In other words, she was practically forced by
that very same illegal company policy into misrepresenting her civil status for fear of being
disqualified from work.
Libres v NLRC G.R. No. 123737. May 28, 1999

Facts:
Petitioner Carlos G. Libres, an electrical engineer, was holding a managerial position with National
Steel Corporation (NSC) as Assistant Manager. He was then asked to comment regarding the
charge of sexual harrassment filed against him by the VP's secretary Capiral. This was included with
a waiver of his right to be heard once he didn't comment.
On 14 August 1993 petitioner submitted his written explanation denying the accusation against him
and offering to submit himself for clarificatory interrogation.
The Management Evaluation Committee said that "touching a female subordinate's hand and
shoulder, caressing her nape and telling other people that Capiral was the one who hugged and
kissed or that she responded to the sexual advances are unauthorized acts that damaged her honor."
They suspended Libres for 30 days without pay.
He filed charges against the corporation in the Labor Arbiter, but the latter held that the company
acted with due process and that his punishment was only mild.
Moreover, he assailed the NLRC decision as without basis due to the massaging of her shoulders
never “discriminated against her continued employment,” “impaired her rights and privileges under
the Labor Code,” or “created a hostile, intimidating or offensive environment.”

He claimed that he wasn't guaranteed due process because he wasn't given the right be heard. This
was due to his demand for personal confrontation not being recognized by the MEC.
In the Supreme Court, petitioner assailed the failure of the NLRC to strictly apply RA No. 7877 or the
law against sexual harassment to the instant case. Moreover, petitioner also contends that public
respondent’s reliance on Villarama v. NLRC and Golden Donuts was misplaced. He draws attention
to victim Divina Gonzaga’s immediate filing of her letter of resignation in the Villarama case as
opposed to the one year delay of Capiral in filing her complaint against him. He now surmises that
the filing of the case against him was merely an afterthought and not borne out of a valid complaint,
hence, the Villarama case should have no bearing on the instant case.
Issue:
1. Was Libres accorded due process when the MEC denied his request for personal confrontation?
2.
Held: Yes.
Ratio:
1. Requirements were sufficiently complied with. Due process as a constitutional precept does not
always and in all situations require a trial type proceeding. Due process is satisfied when a person is
notified of the charge against him and given an opportunity to explain or defend himself. The
essence of due process is simply to be heard, or as applied to administrative proceedings, an
opportunity to explain one’s side, or an opportunity to seek a reconsideration of the action or ruling
complained of.
It is undeniable that petitioner was given a Notice of Investigation informing him of the charge of
sexual harassment as well as advising him to submit a written explanation regarding the matter; that
he submitted his written explanation to his superior. The VP further allowed him to air his grievance in
a private session He was given more than adequate opportunity to explain his side and air his
grievances.
Personal confrontation was not necessary. Homeowners v NLRC- litigants may be heard through
pleadings, written explanations, position papers, memoranda or oral arguments.
2. Was Capiral’s filing delay an after thought?
The delay could be expected since Libres was Capiral’s immediate superior. Fear of retaliation and
backlash, not to forget the social humiliation and embarrassment that victims of this human frailty
usually suffer, are all realities that Capiral had to contend with. Moreover, the delay did not detract
from the truth derived from the facts. Petitioner Libres never questioned the veracity of Capiral’s
allegations. In fact his narration even corroborated the latter’s assertion in several material points.
He only raised issue on the complaint’s protracted filing.A

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[G.R. No. 129584. December 3, 1998]

PRUBANKERS ASSOCIATION, petitioner,  vs. PRUDENTIAL BANK & TRUST COMPANY,