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UNION OF FILIPRO EMPLOYEES (UFE), petitioner, the company’s sales personnel are field personnel and, as

vs. such, are not entitled to holiday pay. He likewise ruled that with
BENIGNO VIVAR, JR., NATIONAL LABOR RELATIONS the grant of 10 days’ holiday pay, the divisor should be
COMMISSION and NESTLÉ PHILIPPINES, INC. (formerly changed from 251 to 261 and ordered the reimbursement of
FILIPRO, INC.), respondents. overpayment for overtime, night differential, vacation and sick
leave pay due to the use of 251 days as divisor.
We used to have ten (10) regular holidays. This is the reason
for the 251 divisor, used by some companies in computing the Issues:
daily wage, which represents the 365 days of the year, less 52
Saturdays, 52 Sundays and the 10 legal holidays. The new law 1) Whether or not Nestle’s sales personnel are entitled to
added one more regular holiday – the Eid’l Fitr. We thus have holiday pay; and
eleven (11) regular holidays under R.A. 9492:
2) Whether or not, concomitant with the award of holiday pay,
New Year’s Day (January 1) the divisor should be changed from 251 to 261 days and
Maundy Thursday (Movable date) whether or not the previous use of 251 as divisor resulted in
Good Friday (Movable date) overpayment for overtime, night differential, vacation and sick
Eid’l Fitr (Movable date) leave pay.
Araw ng Kagitingan – Bataaan and Corregidor Day (Monday
nearest April 9) Held:
Labor Day (Monday nearest May 1)
Independence Day (Monday nearest June 12) 1. Sales personnel are not entitled to holiday pay.
National Heroes Day (Last Monday of August)
Bonifacio Day (Monday nearest November 30) Under Article 82, field personnel are not entitled to holiday pay.
Christmas Day (December 25) Said article defines field personnel as “non-agritultural
Rizal Day (Monday nearest December 30) employees who regularly perform their duties away from the
The Labor Code provides that every worker shall be paid his principal place of business or branch office of the employer
daily wage during regular holidays. Employers are now and whose actual hours of work in the field cannot be
required to pay for an extra regular holiday. determined with reasonable certainty.”

Facts: The law requires that the actual hours of work in the field be
reasonably ascertained. The company has no way of
On November 8, 1985, respondent Filipro, Inc. (now Nestle determining whether or not these sales personnel, even if they
Philippines, Inc.) filed with the National Labor Relations report to the office before 8:00 a.m. prior to field work and
Commission (NLRC) a petition for claims of its monthly paid come back at 4:30 p.m, really spend the hours in between in
employees for holiday pay. actual field work.

Abitrator Vivar: Filipro to pay its monthly paid employees Moreover, the requirement that “actual hours of work in the
holiday pay pursuant to Art 94 of Labor Code, subject to field cannot be determined with reasonable certainty” must be
exclusions and limitations in Art 82. read in conjunction with Rule IV, Book III of the Implementing
Rules which provides:
Filipro filed a motion for clarification seeking (1) the limitation of
the award to three years, (2) the exclusion of salesmen, sales Rule IV Holidays with Pay
representatives, truck drivers, merchandisers and medical
representatives (hereinafter referred to as sales personnel) Sec. 1. Coverage — This rule shall apply to all employees
from the award of the holiday pay, and (3) deduction from the except:
holiday pay award of overpayment for overtime, night
differential, vacation and sick leave benefits due to the use of xxx xxx xxx
251 divisor.
(e) Field personnel and other employees whose time and
Petitioner UFE answered that the award should be made performance is unsupervised by the employer . . . (Emphasis
effective from the date of effectivity of the Labor Code, that supplied)
their sales personnel are not field personnel and are therefore
entitled to holiday pay, and that the use of 251 as divisor is an Hence, in deciding whether or not an employee’s actual
established employee benefit which cannot be diminished. working hours in the field can be determined with reasonable
certainty, query must be made as to whether or not such
Arbitrator Vivar: On January 14, 1986, the respondent employee’s time and performance is constantly supervised by
arbitrator issued an order declaring that the effectivity of the the employer.
holiday pay award shall retroact to November 1, 1974, the date
of effectivity of the Labor Code. He adjudged, however, that 2. The divisor in computing the award of holiday pay should

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still be 251 days. Bank case nor from the date of effectivity of the Labor Code,
but from October 23, 1984, the date of promulgation of the
While in that case the issue was whether or not salesmen were IBAA case (Insular Bank of Asia and America Employees’
entitled to overtime pay, the same rationale for their exclusion Union (IBAAEU) v. Inciong, where the court declared that Sec
as field personnel from holiday pay benefits also applies. 2, Rule IV, Book III of IRR which excluded monthly paid
employees from holiday pay benefits, are null and void).
The petitioner union also assails the respondent arbitrator’s
ruling that, concomitant with the award of holiday pay, the WHEREFORE, the order of the voluntary arbitrator in hereby
divisor should be changed from 251 to 261 days to include the MODIFIED. The divisor to be used in computing holiday pay
additional 10 holidays and the employees should reimburse the shall be 251 days. The holiday pay as above directed shall be
amounts overpaid by Filipro due to the use of 251 days’ computed from October 23, 1984. In all other respects, the
divisor. order of the respondent arbitrator is hereby AFFIRMED

The 251 working days divisor is the result of subtracting all


Saturdays, Sundays and the ten (10) legal holidays from the
total number of calendar days in a year. If the employees are
already paid for all non-working days, the divisor should be 365
and not 251.

In the petitioner’s case, its computation of daily ratio since


September 1, 1980, is as follows:

monthly rate x 12 months / 251 days

The use of 251 days’ divisor by respondent Filipro indicates


that holiday pay is not yet included in the employee’s salary,
otherwise the divisor should have been 261.

It must be stressed that the daily rate, assuming there are no


intervening salary increases, is a constant figure for the
purpose of computing overtime and night differential pay and
commutation of sick and vacation leave credits. Necessarily,
the daily rate should also be the same basis for computing the
10 unpaid holidays.

The respondent arbitrator’s order to change the divisor from


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

To illustrate, if prior to the grant of holiday pay, the employee’s


annual salary is P25,100, then dividing such figure by 251
days, his daily rate is P100.00 After the payment of 10 days’
holiday pay, his annual salary already includes holiday pay and
totals P26,100 (P25,100 + 1,000). Dividing this by 261 days,
the daily rate is still P100.00. There is thus no merit in
respondent Nestle’s claim of overpayment of overtime and
night differential pay and sick and vacation leave benefits, the
computation of which are all based on the daily rate, since the
daily rate is still the same before and after the grant of holiday
pay.

SC Decision:

The Court thereby resolves that the grant of holiday pay be


effective, not from the date of promulgation of the Chartered