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G.R. No.

L-24394 August 30, 1968 1962 and demanding the enforcement of the 40-hour a week work law with respect to the
Uniformed Force Division of the Manila Fire Department, and the reply thereto was that services
JUANITO CARLOS, petitioner-appellant, rendered beyond a regular period fixed by R.A. No. 1880 will not entitle the employee to overtime
vs. pay as a matter of legal right, citing Opinion No. 218, Series of 1957, of the Secretary of Justice.
ANTONIO J. VILLEGAS, as Mayor, City of Manila and/or EULOGIO SAMIO, as Chief, Manila
Fire Department and/or MANUEL CUDIAMAT, as Treasurer, City of Manila, respondents- 5. On December 26, 1962, petitioner addressed a petition to His Excellency, the President of the
appellees. Philippines, petitioning also the latter to order the City of Manila to pay petitioner and other
members of the MFD Uniformed Force Division for overtime services rendered during 1962 and
Juanito Carlos for and in his behalf as petitioner-appellant. caused to be enforced the 40-hour a week law and there was no favorable reply. "6. The parties
Assistant City Fiscal Olimpio R. Navarro for respondents-appellees. herein reserve the right to submit additional evidence should a necessity therefor arise.
"1äwphï1.ñët

ANGELES, J.:
No additional evidence was submitted thereafter, and upon the foregoing stipulation of facts and the
law applicable thereon, the lower court dismissed the petition.
This is an appeal from the decision of the Court of First Instance of Manila dismissing the petition
for mandamus (Civil Case No. 53514) seeking to order the respondents to cause the City of Manila
to pay petitioner and other members of the Uniformed Force Division of the Manila Fire Department The issue for adjudication is whether the petitioner-appellant and other firemen similarly situated
(MFD) for overtime services rendered from January 1, 1962, up to the date when the petition was are entitled to collect overtime pay for overtime services rendered by them since January 1, 1962.
filed January 4, 1963; to enforce immediately the 40-Hour a Week Work Law to petitioner and said
other members of the MFD; and to pay damages sustained by them as a consequence of the acts The provisions of law that resolve the issue are neither those of Republic Act 1880, otherwise known
complained of. 1äwphï1.ñët as the Forty Hour Week Work Law, nor Commonwealth Act 444, the Eight-Hour Labor Law, as
suggested by the petitioner-appellant, but the following sections of the Revised Administrative Code,
The facts of the case are set forth in the stipulation of facts submitted by the parties in the lower to wit: .
court, to wit: .
SEC. 566. Extension of hours and requirement of overtime work. — When the interests of the
1. Under Sec. 15 of the Revised Charter of the City of Manila (Rep. Act 409, as amended), "there public service so require, the head of any Department, Bureau, or Office may extend the daily
shall be a chief of the Fire Department, ... who shall have the management and control of all hours of labor, in what manner so ever fixed, for any or all of the employees under him, and may
matters relating to the administration of said department, and the organization, government, likewise require any or all of them to do overtime work not only on work days but also on
discipline, and disposition of fire forces; ... [Emphasis supplied] holidays.".

2. Pursuant to the foregoing provision, from September 16, 1957, to the present, the petitioner SEC. 259. Inhibition against payment of extra compensation. — In the absence of special
and other members of the Uniformed Force Division of the Manila Fire Department have been provision, persons regularly and permanently appointed under the Civil Service Law or whose
required and ordered by the Chief of the Manila Fire Department, upon approval of the City Mayor, salary, wages or emoluments are fixed by law or regulation shall not, for any service rendered or
the Commissioner of the Civil Service and the Office of the President, to be 24 hours on duty and labor done by them on holidays or for other overtime work, receive or be paid any additional
24 hours off duty, alternately; that is, a member of the MFD Uniformed Force Division reports to compensation; nor, in the absence of special provision, shall any officer or employee in an branch
his station at 8:00 o'clock in the morning and continues on duty until 8:00 o'clock of the following of the Government service receive additional compensation on account of the discharge of duties
morning for 24 hours; he is then off duty for the next 24 hours immediately thereafter; this pertaining to the position of another or for the performance of any public service whatever,
schedule continuous throughout the days of the week regardless of Saturdays, Sundays and whether such service is rendered voluntarily or exacted of him under authority of law." .
holidays; for an average of eighty-four (84) hours a week the firemen stay at the station and while
there, their duties are to clean and maintain the station, fire engines or apparatuses and The petitioner-appellant contends that the above-quoted portions of the Revised Administrative Code
equipment to respond to fire and to perform other duties required by ordinances and laws; during have been repealed by the provisions of Commonwealth Act 444, in so far as the provisions of the
the 24 hours' stay in the station, unless they are out working to fight and extinguish fires, the former are inconsistent with the latter. The contention is erroneous. This Court has explicitly
firemen are given time to rest from 12:00 noon to 4:00 o'clock in the afternoon, and time to sleep declared1 that the Eight-Hour Labor Law was not intended to apply to civil service employees who
from 9:00 o'clock in the evening to 6:00 o'clock the following morning. are still governed by the above provisions of the Revised Administrative Code. As there appears to
be no debate over the employment of petitioner-appellant and the other firemen similarly situated
3. On July 10, 1957, the Chief of the Manila Fire Department requested the Office of the President as falling under the civil service, they being employees of the City of Manila, a municipal corporation,
for authority, in the interest of the service, for the members of the Uniformed Force Division and in its governmental capacity, We perceive no reason to deviate from said ruling. And as We hold
of the Fire Alarm and Radio Division of the department to render service without overtime pay that the above sections of the Revised Administrative Code are still legally in force, it necessarily
beyond the 40-hour-5-day a week requirement of the law. follows that Rule XV, section 3 of the Civil Service Rules, a similar provision promulgated pursuant
to that of Section 16(e) of the Civil Service Act of 1959 (Republic Act No. 2260) is likewise applicable
to petitioner-appellant. Said provision reads:.
4. On December 9, 1962, a petition was addressed to the Mayor, City of Manila, through the Chief,
Fire Department, Manila, claiming payment for overtime services rendered effective January 1,
SEC. 3. When the nature of the duties to be performed or the interest of the public service so G.R. No. 149640 October 19, 2007
requires, the head of any Department or agency may extend the daily hours of work specified for
any or all the employees under him, and such extension shall be without additional compensation SAN MIGUEL CORPORATION, ANDRES SORIANO III, FRANCISCO C. EIZMENDI, JR., and
unless otherwise provided by law. Office and employees may be required by the head of the FAUSTINO F. GALANG, Petitioners,
Department or agency to work on Saturdays, Sundays and public holidays also, without additional vs.
compensation unless otherwise specifically authorized by law. NUMERIANO LAYOC, JR., CARLOS APONESTO, PAULINO BALDUGO, QUEZON BARIT,
BONIFACIO BOTOR, HERMINIO CALINA, DANILO CAMINGAL, JUAN DE MESA, REYNOLD
DESEMBRANA, BERNARDITO DEUS, EDUARDO FILLARTA, MAXIMIANO FRANCISCO,
It needs no lengthy explanation that the nature of work of a fireman requires him to be always on
MARIO MARILIM, DEMETRIO MATEO, FILOMENO MENDOZA, CONRADO NIEVA, FRANCISCO
the alert to respond to fire alarms which may occur at any time of the day, for the exigency of the
PALINES, FELIPE POLINTAN, MALCOLM SATORRE, and ALEJANDRO TORRES, Respondents.
service necessitates a round-the-clock observance of his duties, which situation excepts him from
the applicability of Section 562 of the Revised Administrative Code, as amended by Republic Act The Case
18809 the Forty-Hour a Week Work Law, which provides, in part: .1äwphï1.ñët
Such hours, except for schools, courts, hospitals and health clinics or where the exigencies of This is a petition for review 1 of the decision2 promulgated on 29 August 2001 by the Court of Appeals (appellate
service so require, shall be as prescribed in the Civil Service Rules and as otherwise from time to court) in CA-G.R. SP No. 55838. The appellate court’s decision set aside the decision 3 in NLRC NCR Case No. 00-12-
08656-94 dated 23 March 1998, the decision4 dated 27 November 1998, and the resolution5 dated 31 August 1999
time disposed in temporary executive orders in the discretion of the President of the Philippines
in NLRC CA No. 015710-98. The appellate court ordered San Miguel Corporation (SMC), Andres Soriano III, Francisco
but shall be eight (8) hours a day, for five (5) days a week or a total of forty (40) hours a week,
C. Eizmendi, Jr., and Faustino F. Galang (collectively, petitioners) to pay respondent Numeriano Layoc, Jr. (Layoc)
exclusive of the time for lunch. [Emphasis supplied]. ₱125,000, representing overtime pay for services that he could have rendered from January 1993 up to his retirement
on 30 June 1997, and respondents Carlos Aponesto, Paulino Baldugo, Quezon Barit, Bonifacio Botor, Herminio Calina,
Parallel to the instant case are the circumstances obtaining in Department of Public Services Labor Danilo Camingal, Juan de Mesa, Reynold Desembrana, Bernardito Deus, Eduardo Fillarta, Maximiano Francisco, Mario
Marilim, Demetrio Mateo, Filomeno Mendoza, Conrado Nieva, Francisco Palines, Felipe Polintan, Malcolm Satorre,
Union vs. CIR, et al.,2 where this Court held that in view of the exigency of the service, garbage
and Alejandro Torres (collectively, respondents) ₱10,000 each as nominal damages.
collectors in Manila are not entitled to the benefits of the Forty-Hour a Week Work Law.
The Facts
In the light of the foregoing, the conclusion is inevitable that the petitioner-appellant and other
firemen of his situation are not entitled to overtime pay and to the coverage of the said Forty-Hour The appellate court stated the facts as follows:
a Week Work Law.
[Respondents] were among the "Supervisory Security Guards" of the Beer Division of the San Miguel
Corporation (p. 10, Rollo), a domestic corporation duly organized and existing under and by virtue
Parenthetically, a side issue has come up in this appeal during its pendency, and that is whether or
of the laws of the Republic of the Philippines with offices at No. 40 San Miguel Avenue, Mandaluyong
not the City Fiscal of Manila should continue his appearance for the respondents-appellees, despite
City.1âwphi1 They started working as guards with the petitioner San Miguel Corporation assigned
the creation of the office and subsequent appointment of a City Legal Officer of Manila, pursuant to
to the Beer Division on different dates until such time that they were promoted as supervising
Republic Act 5185, known as the Decentralization Act of 1967, to take charge of civil cases
security guards. The dates of their employment commenced as follows (Ibid., pp. 87-89):
concerning the City. We believe this is not the proper forum to first pass upon the question since
the motion for withdrawal of appearance filed by the City Fiscal and the opposition thereto put at
As guards As supervising guards
issue the validity of an ordinance3 passed by the City Council of Manila which is alleged to be in
conflict with the said Decentralization Act. Anyway, the said motion for withdrawal of appearance
a. Aponesto, Carlos June 1970 February 1983
was filed only on May 19, 1968, long after August 18, 1965, when the case had been rested for
resolution and when there was no more need for further representation in behalf of the parties. b. Baldugo, Paulino November 1978 May 1984

c. Barit, Quezon January 1969 May 1984


IN VIEW OF THE FOREGOING, the decision appealed from is hereby affirmed. For equitable
considerations, no costs. 1äwphï1.ñët d. Botor, Bonifacio April 1980 January 1987

e. De Mesa, Juan November 1977 May 1984

f. Calina, Herminio February 1976 May 1984

g. Desembrana, Reynold November 1976 April 1983

h. Camingal, Danilo December 1975 December 1985

i. Deus, Bernardito July 1976 May 1983

j. Fillarta, Eduardo January 1979 May 1989

k. Francisco, Maximiano October 1977 May 1984


l. Layoc, Numeriano June 1974 January 1982 19. Continuously monitors the personal needs and problems of his men to his superiors;
20. Acts as Detachment Commander in the latter’s absence;
m. Marilim, Mario December 1977 June 1984
21. Responds to emergencies and activates the Corporate Security Alerting System as appropriate;
n. Mateo, Demetrio November 1976 March 1984
and
o. Mendoza, Filomena March 1980 May 1983
22. Performs such other duties as may be required by his Detachment Commander/Plant Security
Officer.
p. Palines, Francisco May 1979 May 1985
From the commencement of their employment, the private respondents were required to punch their
q. Nieva, Conrado January 1977 June 1987 time cards for purposes of determining the time they would come in and out of the company’s work
place. Corollary [sic], the private respondents were availing the benefits for overtime, holiday and
r. Polintan, Felipe June 1972 May 1983
night premium duty through time card punching (Rollo, p. 89). However, in the early 1990’s, the
s. Satorre, Malcolm September 1970 May 1984 San Miguel Corporation embarked on a Decentralization Program aimed at enabling the separate
divisions of the San Miguel Corporation to pursue a more efficient and effective management of their
t. Torres, Alejandro January 1974 May 1984
respective operations (Ibid., p. 99).
As supervising security guards, the private respondents were performing the following functions
(Ibid., pp. 202-204): As a result of the Decentralization Program, the Beer Division of the San Miguel Corporation
implemented on January 1, 1993 a "no time card policy" whereby the Supervisory I and II composing
1. Supervises the facility security force under his shift; of the supervising security guards of the Beer Division were no longer required to punch their time
2. Inspects all company-owned firearms and ammunition and promptly submits report as regards cards (Ibid., p. 100). Consequently, on January 16, 1993, without prior consultation with the private
to discrepancy and/or state of doubtful/suspected serviceability; respondents, the time cards were ordered confiscated and the latter were no longer allowed to
3. Receives and transfers from outgoing to incoming supervising security guard all company render overtime work (Ibid., p. 117).
property, all official papers, documents and/or cases investigated including pieces of evidence
properly labeled and secured; However, in lieu of the overtime pay and the premium pay, the personnel of the Beer Division of the
4. Physically checks and accounts for all company property within his area of responsibility petitioner San Miguel Corporation affected by the "No Time Card Policy" were given a 10% across-
immediately upon assumption of duty; the-board increase on their basic pay while the supervisors who were assigned in the night shift
5. Updates compilation of local security rules, policies and regulations and ensures that all his (6:00 p.m. to 6:00 a.m.) were given night shift allowance ranging from ₱2,000.00 to ₱2,500.00 a
guards are posted thereon; month (Rollo, p. 12).6
6. Conducts regular and irregular inspection to determine his guards’ compliance with all guard
On 1 December 1994, respondents filed a complaint for unfair labor practice, violation of Article 100
force instructions, corporate security standards and procedures;
of the Labor Code of the Philippines, and violation of the equal protection clause and due process of
7. Passes on all official communications, requests, applications of leaves, etc. and makes his
law in relation to paragraphs 6 and 8 of Article 32 of the New Civil Code of the Philippines.
comments and/or recommendations to his superior;
Respondents prayed for actual damages for two years (1993-1994), moral damages, exemplary
8. Systematically and continuously screens the good performers from the marginal or poor among
damages, and overtime, holiday, and night premium pay.
his guards; concentrates on teaching and guiding the latter; determines further what training
and/or skills that should be learned and submits appropriate report to superior; In their position paper dated 28 February 1995, respondents stated that the Beer Division of SMC
9. Corrects, on the spot, all deficiencies noted and institutes corrective measures within his maliciously and fraudulently refused payment of their overtime, holiday, and night premium pay
authority; recommends commendations for those guards who deserves [sic] recognition for good from 1 to 15 January 1993 because of the "no time card policy." Moreover, petitioners had no written
work; authority to stop respondents from punching their time cards because the alleged memorandum
10. Conducts an investigation of all cases coming to his attention and promptly submits authorizing such stoppage did not include supervisory security guards. Thus, the respondents
appropriate report to his superiors; suffered a diminution of benefits, making petitioners liable for non-payment of overtime, holiday,
and night premium pay.
11. Evaluates individual guard performance and renders efficiency reports in accordance with
standing instructions; In their position paper dated 23 February 1995, petitioners maintained that respondents were
12. Ensures that all his guards are courteous, respectful and accommodating at all times; supervisory security guards who were exempt from the provisions of the Labor Code on hours of
13. Ensures that even those who have been found violating the facility’s policies, rules and work, weekly rest periods, and rest days. The "no time card policy" did not just prevent respondents
procedures are professionally treated with courtesy and understanding to preclude embarrassment from punching their time cards, but it also granted respondents an across-the-board increase of
and humiliation; 10% of basic salary and either a ₱2,000 or ₱2,500 night shift allowance on top of their yearly merit
14. Ensures the maintenance of [a] logbook of all incidents, communications, personnel and increase. Petitioners further asserted that the "no time card policy" was a valid exercise of
materials’ movements; management prerogative and that all supervisors in the Beer Division were covered by the "no time
15. Responds to all calls for assistance; card policy," which classification was distinct and separate from the other divisions within SMC.
16. Conducts continuing physical checks of the facility’s critical and vulnerable areas;
17. Obtains critical security information and passes it on to his superiors;
18. Assesses the need for extra guard service requirements;
Respondents filed their reply dated 15 March 1995 to petitioners’ position paper. Petitioners, on the WHEREFORE, the November 27, 1998 Decision of this Commission is hereby REITERATED with a
other hand, filed their rejoinder dated 27 March 1995 to respondents’ reply. Respondents filed a slight modification to the effect that the computation of the [respondents]’ withdrawn benefits at
request for admission dated 2 May 1995 to which petitioners filed their reply dated 15 May 1995. ₱125,000.00 yearly from 1993 should terminate in 1996 or the date of each complainant’s
retirement, whichever came first.
The Ruling of the Labor Arbiter
Petitioners then filed their petition for certiorari before the appellate court on 16 November 1999.
In his decision dated 23 March 1998, Labor Arbiter Potenciano S. Canizares, Jr. (Arbiter Canizares)
stated that the principal issue is whether petitioners can, in their "no time card policy," remove the The Ruling of the Appellate Court
benefits that respondents have obtained through overtime services. Arbiter Canizares then stated
that the facts and the evidence are in respondents’ favor. Arbiter Canizares ruled that rendering On 29 August 2001, the appellate court set aside the ruling of the NLRC and entered a new judgment
services beyond the regular eight-hour work day has become company practice. Moreover, in favor of respondents. The appellate court stated that there is no legal issue that respondents,
petitioners failed to show good faith in the exercise of their management prerogative in altering being the supervisory security guards of the Beer Division of SMC, were performing duties and
company practice because petitioners changed the terms and conditions of employment from "hours responsibilities being performed by those who were considered as officers or members of the
of work rendered" to "result" only with respect to respondents and not with other supervisors in managerial staff as defined under Section 2, paragraph (c), Rule 1, Book III of the Implementing
other departments. The dispositive portion of Arbiter Canizares’ decision reads: Rules of the Labor Code.10 The appellate court ruled that while the implementation of the "no time
WHEREFORE, the [petitioners] are hereby ordered to restore to the [respondents] their right to card policy" was a valid exercise of management prerogative, the rendering of overtime work by
earn for overtime services rendered as enjoyed by the other employees. respondents was a long-accepted practice in SMC which could not be peremptorily withdrawn without
The [petitioners] are further ordered to indemnify the [respondents] for lost earnings after their running afoul with the principles of justice and equity. The appellate court affirmed the deletion of
terms and conditions of employment have been unilaterally altered by the [petitioners], namely the award of actual, moral, and exemplary damages. With the exception of Layoc, respondents did
in the amount of ₱500,000.00 each as computed by the [respondents], and the [petitioners] failed not present proof of previous earnings from overtime work and were not awarded with actual
to refute. damages. Moreover, the appellate court did not find that the implementation of the "no time card
[Petitioners] are furthermore ordered to pay the [respondents] ₱100,000.00 each as moral and policy" caused any physical suffering, moral shock, social humiliation, besmirched reputation, and
exemplary damages. similar injury to respondents to justify the award of moral and exemplary damages. Nonetheless, in
All other claims are hereby dismissed for lack of evidence. the absence of competent proof on the specific amounts of actual damages suffered by respondents,
the appellate court awarded them nominal damages.
On 26 May 1998, petitioners filed their notice of appeal and memorandum of appeal with the National
Labor Relations Commission (NLRC). The dispositive portion of the appellate court’s decision reads thus:

The Ruling of the NLRC WHEREFORE, foregoing considered, the instant petition is hereby GIVEN DUE COURSE and is
GRANTED. The Decision issued in NLRC NCR CASE No. 00-12-08656-94 dated March 23, 1998, the
On 27 November 1998, the NLRC affirmed with modification the ruling of Arbiter Canizares that Decision issued in NLRC CA No. 015710-98 dated November 27, 1998 and the Resolution dated
respondents suffered a diminution of benefits as a result of the adoption of the "no time card policy." August 31, 1999, are hereby ANNULLED and SET ASIDE, and a new judgment is hereby entered
The NLRC cited a well-established rule that employees have a vested right over existing benefits ordering the petitioners to pay as follows:
voluntarily granted to them by their employer, who may not unilaterally withdraw, eliminate, or 1) the private respondent Numeriano Layoc, Jr., the amount of One Hundred Twenty-Five
diminish such benefits. In the present case, there was a company practice which allowed the Thousand (₱125,000.00) Pesos per year, representing overtime pay for overtime services that he
enjoyment of substantial additional remuneration. Furthermore, there is no rule excluding could have rendered computed from the date of the implementation of the "no time card policy"
managerial employees from the coverage of the principle of non-diminution of benefits. or on January 1993 and up to the date of his retirement on June 30, 1997; and
2) the other private respondents, the amount of Ten Thousand (₱10,000.00) Pesos each as
The NLRC ruled thus: nominal damages.
WHEREFORE, the decision appealed from is hereby AFFIRMED, with slight modification deleting
the award of moral and exemplary damages. Dissatisfied with the appellate court’s ruling, petitioners filed a petition before this Court.

Both petitioners and respondents filed their respective motions for reconsideration. Petitioners stated The Issues
that the NLRC erred in sustaining the award of overtime pay despite its finding that respondents
were managerial personnel. Furthermore, there was no evidence that respondents rendered Petitioners ask whether the circumstances in the present case constitute an exception to the rule
overtime work and respondents admitted that they never or seldom rendered overtime work. The that supervisory employees are not entitled to overtime pay.
award of overtime pay was thus contrary to the principle of no work, no pay. For their part,
Respondents, on the other hand, question petitioners’ procedure. Respondents submit that the Court
respondents stated that the NLRC erred in deleting the award of moral and exemplary damages.
should dismiss the present petition because petitioners did not file a motion for reconsideration
The implementation of the "no time card policy," the discrimination against them vis-a-vis the
before the appellate court.
supervising security officers in other divisions of SMC, and the execution of quitclaims and releases
during the pendency of the case were all attended with bad faith, thus warranting the award of moral
The Ruling of the Court
and exemplary damages.
The petition has merit.
On 31 August 1999, the NLRC further modified Arbiter Canizares’ decision. The NLRC ruled thus:
Requirement of Prior Filing of a Motion for Reconsideration normal hours of work (Article 83), hours worked (Article 84), meal periods (Article 85), night shift
differential (Article 86), overtime work (Article 87), undertime not offset by overtime (Article 88),
It appears that respondents confuse certiorari as a mode of appeal under Rule 45 of the 1997 Rules emergency overtime work (Article 89), and computation of additional compensation (Article 90). It
of Civil Procedure with certiorari as an original special civil action under Rule 65 of the same Rules. is thus clear that, generally, managerial employees such as respondents are not entitled to overtime
In Paa v. Court of Appeals,12 we stated that: pay for services rendered in excess of eight hours a day. Respondents failed to show that the
circumstances of the present case constitute an exception to this general rule.
There are, of course, settled distinctions between a petition for review as a mode of appeal and a
special civil action for certiorari, thus: First, respondents assert that Article 10014 of the Labor Code prohibits the elimination or diminution
of benefits. However, contrary to the nature of benefits, petitioners did not freely give the payment
a. In appeal by certiorari, the petition is based on questions of law which the appellant desires the for overtime work to respondents. Petitioners paid respondents overtime pay as compensation for
appellate court to resolve. In certiorari as an original action, the petition raises the issue as to
services rendered in addition to the regular work hours. Respondents rendered overtime work only
whether the lower court acted without or in excess of jurisdiction or with grave abuse of discretion.
when their services were needed after their regular working hours and only upon the instructions of
their superiors. Respondents even differ as to the amount of overtime pay received on account of
b. Certiorari, as a mode of appeal, involves the review of the judgment, award or final order on
the difference in the additional hours of services rendered. To illustrate, Layoc’s records15 show the
the merits. The original action for certiorari may be directed against an interlocutory order of the
varying number of hours of overtime work he rendered and the varying amounts of overtime pay
court prior to appeal from the judgment or where there is no appeal or any other plain, speedy or
he received from the years 1978 to 1981 and from 1983 to 1994:
adequate remedy.

c. Appeal by certiorari must be made within the reglementary period for appeal. An original action Number of Hours Worked Overtime Overtime Pay Received
(in Pesos)
for certiorari may be filed not later than sixty (60) days from notice of the judgment, order or
resolution sought to be assailed. 1974 – Appointment No record No record
as guard
d. Appeal by certiorari stays the judgment, award or order appealed from. An original action for
1975 No record No record
certiorari, unless a writ of preliminary injunction or a temporary restraining order shall have been
issued, does not stay the challenged proceeding.
1976 No record No record

e. In appeal by certiorari, the petitioner and respondent are the original parties to the action, and 1977 No record No record
the lower court or quasi-judicial agency is not to be impleaded. In certiorari as an original action,
the parties are the aggrieved party against the lower court or quasi-judicial agency and the 1978 1,424.00 5,214.88

prevailing parties, who thereby respectively become the petitioner and respondents.
1979 1,312.56 5,189.30

f. In certiorari for purposes of appeal, the prior filing of a motion for reconsideration is 1980 1,357.50 5,155.71
not required (Sec. 1, Rule 45); while in certiorari as an original action, a motion for
reconsideration is a condition precedent (Villa-Rey Transit vs. Bello, L-18957, April 23, 1981 474.00 1,781.81

1963), subject to certain exceptions.


1982 – Appointment as No record No record
supervising security guard
g. In appeal by certiorari, the appellate court is in the exercise of its appellate jurisdiction and
power of review for, while in certiorari as an original action, the higher court exercises original 1983 947.50 6,304.33
jurisdiction under its power of control and supervision over the proceedings of lower courts.
1984 889.00 8,937.00
(Emphasis added)
1985 898.00 12,337.47
Respondents’ contention that the present petition should be denied for failure to file a motion for
reconsideration before the appellate court is, therefore, incorrect. 1986 1,086.60 18,085.34

Overtime Work and Overtime Pay for Supervisory Employees 1987 1,039.50 32,109.85

Both petitioners and respondents agree that respondents are supervising security guards and, thus, 1988 633.00 29,126.10

managerial employees.1avvphi1 The dispute lies on whether respondents are entitled to render
1989 723.50 39,594.55
overtime work and receive overtime pay despite the institution of the "no time card policy" because
(1) SMC previously allowed them to render overtime work and paid them accordingly, and (2) 1990 376.50 21,873.33
supervising security guards in other SMC divisions are allowed to render overtime work and receive
1991 149.50 12,694.97
the corresponding overtime pay.
1992 144.00 17,403.38
Article 8213 of the Labor Code states that the provisions of the Labor Code on working conditions
and rest periods shall not apply to managerial employees. The other provisions in the Title include
1993 0.50 47.69
G.R. No. L-27463, L-27503 & L-27504 May 16, 1969

1994 0.00 0.00 NATIONAL WATERWORKS & SEWERAGE AUTHORITY, petitioner,


vs.
1995 0.00 0.00 NWSA CONSOLIDATED UNION, JESUS CENTENO, ET AL., and COURT OF INDUSTRIAL
Aside from their allegations, respondents were not able to present anything to prove that petitioners RELATIONS, respondents.
were obliged to permit respondents to render overtime work and give them the corresponding
DIZON, J.:
overtime pay. Even if petitioners did not institute a "no time card policy," respondents could not
demand overtime pay from petitioners if respondents did not render overtime work. The requirement
Appeal on purely questions of law taken by the National Waterworks and , Sewerage Authority,
of rendering additional service differentiates overtime pay from benefits such as thirteenth month
hereinafter referred to as NAWASA, from the order issue on February 20, 1967 by the Court of
pay or yearly merit increase. These benefits do not require any additional service from their
Industrial Relations, referred to hereinafter as CIR, for the former to deposit the amount of
beneficiaries. Thus, overtime pay does not fall within the definition of benefits under Article 100 of
P99,332.21 representing overtime, nighttime, Sunday, holiday and basic time salaries, within thirty
the Labor Code.16
days (Annex D attached to the Petition for Review), and from the CIR's resolution en banc dated
March 13, 1967 (attached the petition for review as Annex F) denying NAWASA's motion for
Second, respondents allege that petitioners discriminated against them vis-a-vis supervising security
reconsideration, both issued in Cases Nos. 19-IPA, 19-IPA(1) and 19-IPA(2).
guards in other SMC divisions. Respondents state that they should be treated in the same manner
as supervising security guards in the Packaging Products Division, who are allowed to render
It appears that on January 16, 1961 the CIR issued in the abovementioned cases an order awarding
overtime work and thus receive overtime pay. Petitioners counter by saying that the "no time card
additional compensation to Engineer Jesus Centeno and 12 others — referred to in the record as
policy" was applied to all supervisory personnel in the Beer Division. Petitioners further assert that
intervenors — for work rendered in excess of eight hours a day, as well as for work rendered at
there would be discrimination if respondents were treated differently from other supervising security
nighttime, etc., the dispositive portion of which reads as follows:
guards within the Beer Division or if other supervisors in the Beer Division are allowed to render
In view thereof, we are of the opinion and so hold, that the respondent Company shall pay to the
overtime work and receive overtime pay. The Beer Division merely exercised its management
intervenors who have not been paid the additional compensation of 25% of their basic salary for
prerogative of treating its supervisors differently from its rank-and-file employees, both as to
services rendered in excess of the regular eight (8) hours a day, from February 6, 1956 onward,
responsibilities and compensation, as they are not similarly situated.
the same benefit effective on the same date, based on the written authorizations of the General
Manager of the NAWASA ....
We agree with petitioners’ position that given the discretion granted to the various divisions of SMC
in the management and operation of their respective businesses and in the formulation and
In relation to their claims for additional compensation for work rendered on Sundays and legal
implementation of policies affecting their operations and their personnel, the "no time card policy"
holidays before and after the effectivity of Republic Act 1880 and also on Saturdays after the
affecting all of the supervisory employees of the Beer Division is a valid exercise of management
effectivity of said law, the CIR said the following:
prerogative. The "no time card policy" undoubtedly caused pecuniary loss to respondents. However,
petitioners granted to respondents and other supervisory employees a 10% across-the-board The intervenors, in their memorandum, wanted to include the claim for additional compensation
increase in pay and night shift allowance, in addition to their yearly merit increase in basic salary, for services rendered on Sundays and legal holidays before and after the effectivity of Republic
to cushion the impact of the loss. So long as a company’s management prerogatives are exercised Act No. 1880 and also on Saturdays after the effectivity of the said law, contending that Saturday
in good faith for the advancement of the employer’s interest and not for the purpose of defeating or becomes an off-day or day of rest. This particular claim is not covered by the present petition,
circumventing the rights of the employees under special laws or under valid agreements, this Court which only seeks payment of additional payment for night work and overtime pay. The records
will uphold them.18 show that the respondent company interposed its timely objection to the evidence tending to
establish such claim. The intervenors did not file any amended petition covering the claim for extra
WHEREFORE, the petition is GRANTED. The Decision dated 29 August 2001 of the Court of Appeals
premium for work performed on Saturdays, Sundays and legal holidays, contrary to their
in CA-G.R. SP No. 55838 ordering petitioners San Miguel Corporation, Andres Soriano III, Francisco
announcement made in open court. And neither was it touched by the respondent company during
C. Eizmendi, Jr., and Faustino F. Galang to pay Numeriano Layoc, Jr. overtime pay and the other
the presentation of its evidence.
respondents nominal damages is SET ASIDE. The complaint of respondents is DISMISSED.
We are, therefore, of the opinion that it will be improper and illegal to take cognizance of and
consider in this case such claim of the intervenors ....

To implement its provisions, the same order directed the Chief Examiner of the CIR to make the
necessary computation to determine said additional compensation in accordance with its findings,
as follows:
... to proceed to the office of the National Waterworks and Sewerage Authority to examine the
payrolls and other pertinent records and to make the necessary computation for additional
compensation for work on Sundays and legal holidays, distress pay, wage differentials, night
compensation and overtime pay of the employees and laborers concerned in accordance with the
findings of the Court. (Emphasis supplied)
In connection with the portion of the order of January 16, 1961 quoted in the immediately preceding computation used by the NAWASA for monthly salaried employees, to wit, dividing the monthly basic
paragraph, We have noticed that the petition for review under consideration has, on page three pay by 30 is erroneous; the minimum wage awarded by respondent court way back on November
thereof and after the words "for work", deliberately omitted the following words "on Sundays and 25, 1950 in Case No. 359-V entitled MWD Workers Union v. Metropolitan Water District, applies even
legal holidays, distress pay, wage differentials", presumably to bolster petitioner's claim that, in the to those who were employed long after the promulgation of the award and even if the workers are
body of the order itself, the CIR had expressed the opinion that it was improper and illegal to take hired only as temporary, emergency and casual workers for a definite period and for a particular
cognizance of, and consider the claim of the intervenors for additional compensation for service project; the authority granted to NAWASA by the President to stagger the working days of its workers
rendered on Sundays and legal holidays before and after the effectivity of RA 1880 and also on should be limited exclusively to those specified in the authorization and should not be extended to
Saturdays after the effectivity of said law in the proceedings then before it. others who are not therein specified; and under the collective bargaining agreement entered into
between the NAWASA and respondent unions on December 28, 1956, as well as under Resolution
It appear further that in National Waterworks and Sewerage Authority, Petitioner vs. NWSA No. 29, series of 1957 of the Grievance Committee, even those who work outside the sewerage
Consolidated Unions and others (G.R. No. L-18938) in which the CIR's order of January 16, 1961 chambers should be paid 25% additional compensation as "distress pay."
was directly involved, We said, inter alia, the following:
Its motion for reconsideration having been denied, NAWASA filed the present petition for review
Acting on a certification of the President of the Philippines, the Court of Industrial Relations raising merely questions of law.
conducted hearing on December 5, 1957 on the controversy then existing between petitioner and
respondent unions which the latter embodied in a "Manifesto" dated December 5, 1957, namely: It is to be noted, however, that in the case at bar it has been stipulated that prior to the enactment
implementation of the 40-Hour Week Law (Republic Act No. 1880); alleged violations of the of Republic Act No. 1880, providing for the implementation of the 40-Hour Week Law, the
collective bargaining agreement dated December 28, 1956 concerning "distress pay"; minimum Metropolitan Water district had been paying 25% additional compensation for work on Sundays and
wage of P5.25; promotional appointments and filling of vacancies of newly created positions; legal holidays to its employees and laborers by virtue of Resolution No. 47, series of 1948, of its
additional compensation for night work; was increases to some laborers and employees; and strike board of Directors, which practice was continued by the NAWASA when the latter took over the
duration pay. In addition, respondent unions raised the issue whether the 25% additional service. And in the collective bargaining agreement entered into between the NAWASA and
compensation for Sunday work should be included in computing the daily wage and whether in respondent unions it was agreed that all existing benefit enjoyed by the employees and laborers
determining the daily wage of a monthly salaried employee, the salary would be divided by 30 prior to its effectivity shall remain in force and shall form part of the agreement, among which
days.lawphi1.ñet certainly is the 25% additional compensation for work on Sundays and legal holidays theretofore
enjoyed by said laborers and employees. It may, therefore, be said that while under Commonwealth
On December 13, 1957, petitioner and respondent unions, conformably to a suggestion of the Act No. 444 a public utility is not required to pay additional compensation to its employees and
Court of Industrial Relations, submitted a joint stipulation of facts on the issues concerning the workers for work done on Sundays and legal holidays, there is, however, no prohibition for it to pay
40-Hour Week Law, "distress pay," minimum wage of P5.25, filling of vacancies, night such additional compensation if it voluntarily agrees to do so. The NAWASA committed itself to pay
compensation, and salary adjustments reserving the right to present evidence on matters not it additional compensation. It must pay not because of compulsion of law but because of contractual
covered therein. On December 4, 1957, respondent in intervenors filed a petition in intervention obligation.
on the issue for additional compensation for night work. Later, however, they amended their
petition by including a new demand for overtime pay in favor of Jesus Centeno, Cesar Cabrera, In resume, this Court holds:
Feliciano Duiguan, Cecilio Remotigue, and other employees receiving P4,200.00 per annum or (1) The NAWASA, though a public corporation, does not perform governmental functions. It
more. performs propriety functions, and hence, it is covered by Commonwealth Act No. 444;
(2) The NAWASA is a public utility. Although pursuant to Section 4 of Commonwealth Act 444 it is
On February 5, 1958, petitioner filed a motion to dismiss the claim for overtime pay alleging that not obliged to pay an additional sum of 25% to its laborers for work done on Sundays and legal
respondent Court of Industrial Relations was without jurisdiction to pass upon the same because, holidays, yet it must pay additional compensation by virtue of the contractual obligation it assumed
as mere intervenors, the latter cannot raise new issues not litigated in the principal case, the same of under the collective bargaining agreement;
not being the lis mota therein involved. To this motion the intervenors filed an opposition. With the modification indicated in the above resume as elaborated in this decision, we hereby
Thereafter, respondent court issued an order allowing the issue to be litigated. Petitioner's motion affirm the decision of respondent court in all other respects, without pronouncement as to costs.
to reconsider having been denied, it filed its answer to the petition for intervention. Finally, on (Emphasis supplied)
January 16, 1961, respondent court tendered its decision stating substantially as follows:
In further implementation of its order of January 16, 1961, as modified by Us in G.R. L-18938, the
The NAWASA is an agency not performing governmental functions and, therefore, is liable to pay CIR issued on October 5, 1964 an order holding in abeyance the writ of execution issued in
additional compensation for work on Sundays and legal holidays conformably to Commonwealth Act connection with the former until after a complete report upon the matter had been submitted to it,
No. 444, known as the Eight-Hour Labor Law, even if said days should be within the staggered five- saying the following in its dispositive portion:
work days authorized by the President; the intervenors do not fall within the category of "managerial
employees" as contemplated in Republic Act 2377 and so are not exempt from the coverage of the Consequently, the Auditing Examiner who is assigned to these cases is hereby directed to compute
Eight-Hour Labor Law; even those intervenors attached to the General Auditing Office and the immediately all the money claims awarded by the Court to the parties concerned, taking into
Bureau of Public Works come within the purview of Commonwealth Act No. 444; the computation consideration the decision promulgated by the Supreme Court on August 31, 1964, and forthwith
followed by NAWASA in computing overtime compensation is contrary to Commonwealth Act 444; submit his report to this Court for further disposition.
the undertime of a worker should not be set off against the worker in determining whether the latter
has rendered service in excess of eight hours for that day; in computing the daily wage of those The Clerk of Court is directed to furnish copies of said report of examiner to the parties concerned
employed on daily basis, the additional 25% compensation for Sunday work should be included; the who are given twenty (20) days counted from the receipt of a copy thereof, within which to file
objections, if any. Failure to file objections thereto within the specified period above-mentioned, the necessary computations of the money claims awarded by the court; to furnish copy of his report
said report of examiner shall be considered approved and final for further disposition of this Court. to the parties concerned, and gave the latter a period of twenty (20) days counted from receipt of
a copy thereof within which to file objections against it, if any, and finally, warning the parties that
Pursuant to the above decision and orders the Chief Examiner of the CIR submitted to the latter, failure to file objections to the report within the specified period, said report will be considered
from time to time, a series of partial reports, the sixth of which dated March 26, 1966 — which is approved and final for further disposition by the court.
the one involved in the present appeal — covers the claims of the thirteen Intervenors with a total
money value of P99,332.21. There is no serious dispute as to the fact that the procedure and method The record discloses that notwithstanding the clear meaning and intent of the order on October 5,
of computation followed by the Examiner in connection with this sixth partial report were the same 1964, NAWASA, instead of filing its objections to the report a copy of which was received by it on
as those used and followed in connection with the five previous reports. April 4, 1966, took another step manifestly intended to delay the final disposition of the claims, by
filing a motion for a bill of particulars. This pleading was not only filed clearly in violation of the order
On April 19, 1966 the NAWASA filed a motion entitled "Motion for Bill of Particulars" claiming therein of the CIR of October 5, 1964 but was beyond doubt without merit, it appearing from the contents
that the sixth partial report mentioned above did not specify the period covered by each claim, thus of the report and the document thereto attached that the information NAWASA sought to obtain
failing to state the claims with sufficient definiteness to enable it to check the correctness thereof, through a bill of particulars was already there.
to prepare its pleadings and thereafter prepare for trial, and prayed that the Court Examiner be
directed to specify the period covered by each claim and that, pending submission of the desired It is of course true that under Rule 12 of the Rules of Court a party against whom a complaint has
information, the running of the period for filing a responsive pleading be suspended. been filed is entitled to compel the plaintiff to submit a bill of particulars in relation to such allegations
of the latter's pleading as appear to be indefinite and uncertain, and that the filing of the motion for
On April 25, 1966 the Intervenors, Jesus Centeno and 12 others, filed a reply to the motion referred the purpose suspends the running of the period for the filing of the corresponding responsive
to above, pointing out that the information sought therein was specifically indicated in Appendix 1 pleading. Even under this rule, however, it is doubtful whether the filing of a motion for a bill of
attached to the report itself, and prayed that the suspension of the period for the filing of a particulars would automatically suspend the running of the period for the filing of the required
responsive pleading be denied for lack of merit. responsive pleading if it appears, as it does in the present case, that it was filed manifestly for delay
and was entirely without merit. Be that as it may, it is settled that the Rules of Court are not of strict
On May 5, 1966, said Intervenors filed a motion for the approval of the sixth partial report and for application but merely suppletory to the CIR's own Rules of Procedure, and when, as in the present
an order requiring the deposit in court of the amount of P99,332.21, in view of the fact that the
case, by formal order the CIR had clearly given the direction for the filing of objections to the report
period of twenty days for the submission of objections thereto had already elapsed.
under question within a definite period to prevent the parties from resorting to dilatory tactics, We
do not believe said court erred in disregarding a pleading violative of its order and clearly intended
On June 3, 1966, the NAWASA filed its objection to the report claiming: (1) that it was not
to delay the proceedings in a case which had started almost eight years before. We, therefore, find
mathematically correct; (2) that it included Sunday and legal holiday diffentials to which Intervenors
no merit in the first assignment of error.
were not entitled; and (3) that overtime services covered by the report were not sanctioned by
written authority.
In view of our conclusion set forth heretofore in connection with the first assignment of error, no
lengthy discussion need be made of the second error. Petitioner having received a copy of the sixth
On June 11, 1966 the Intervenors filed a reply to NAWASA's objection, praying that it be overruled
partial report of the CIR Examiner on April 4, 1966, and having filed its objection thereto to only on
having been filed beyond the period fixed by the Court, and prayed further that the report be
June 3, 1966, it is obvious that the same was filed long after the expiration of the twenty (20) day
approved and considered final in accordance with the order of October 5, 1964 and that the NAWASA
period given to it for the purpose in the CIR's order October 5, 1964.
be directed to deposit the total amount of P99,332.21 with the CIR for its further disposition.
In the light of our views in relation to the first two assignments of error, the third cannot stand
Finally, on February 20, 1967 the CIR issued an order approving the sixth partial report of the Court
prosper. If petitioner had no opportunity to prove the grounds upon which it objected against the
Examiner and directing the NAWASA to deposit the amount of P99,332.21 with the Court within
sixth partial report of the CIR Examiner, that was entirely its own fault. If instead of resorting to a
thirty (30) days from notice, for its further disposition. This order was affirmed by the Court en
clearly unfounded demand for the submission of a bill of particulars it had filed its objection to said
banc on March 13, 1967.
report within twenty days after it had received a copy thereof, that would not have happened. Having
To sustain its appeal from the orders mentioned in the preceding paragraph, petitioner now claims failed to do so, the CIR was entirely correct in proceeding to the approval of the questioned report
that the CIR erred (1) in not holding that the filing of its "motion for bill of particulars" stayed the — a step strictly in accordance with the terms of its order of Oct. 5, 1964.
running of the period for the filing of its objection to the sixth partial report of the CIR Examiner;
Finally, in relation to the specific grounds upon which NAWASA objected against the Examiner's sixth
(2) in holding that petitioner's objection to said report was filed out of time, and lastly, (3) in
partial report, the following should be borne in mind:
depriving it of due process when, acting en banc, it affirmed the order of February 20, 1967.
(1) Nowhere in its pleading nor in its brief submitted in the present case did NAWASA attempt to
It is not disputed that petitioner was served with a copy of the sixth partial report on April 4, 1966.
prove its contention that said report "is not mathematically correct" in any particular respect, nor
It is, on the other hand, conceded that petitioner had the right to object thereto and to be heard in
did it in any manner give even an inkling of the evidence it had to prove such assertion.
connection therewith. But in this connection it is worth remembering that the litigation over
intervenors' claim was one of very long standing and had previously reached this Court for (2) As to (a) the inclusion of Sunday and legal holiday differentials to which, in NAWASA's opinion,
adjudication of the principles involved (G.R. No. L-18938). It is not strange therefore, that after our the herein Intervenors were not entitled and (b) the alleged lack of written authorization to render
decision in the case just mentioned, the CIR, intent upon preventing any further delay in the final
overtime work for the period covered by the report, We only need to say that both questions were
disposition of intervenors' claim, issued on October 5, 1964 an order directing its Examiner to make
squarely resolved by Us in National Waterworks Sewerage Authority, petitioner vs. NWSA
Consolidated Union, Jesus Centeno, et al., respondents, (G.R. L-26894-96) promulgated on salaries or wages for work on Sundays and legal holidays even if the same should fall within the
February 28 of the present year. The cases involved a similar award in favor of other intervenors staggered five working days effective on the date their working days were staggered." 7
and against which NAWASA had raised exactly the same grounds as the ones relied upon against
the award in favor of the present Intervenors. In disposing of them We said, among other things: Respondents, in their brief, could thus correctly conclude: "The awardees are not solely the
petitioners in the said cases, but all "the employees and laborers concerned" of the NWSA.
In National Waterworks & Sewerage Authority v. NWSA Consolidated Unions, 1 we made clear Obviously, a member of the NWSA Consolidated Unions, who has not rendered work on Sundays
beyond doubt that employees of such government owned and controlled corporation, who and legal holidays, is not concerned with the benefit in question. The Industrial Court did not
intervened therein, were entitled to the benefits not only of the Eight-Hour Labor Law 2 but also impose any limitation affecting the qualification of the intended recipients of award, except that
to those arising from any contractual obligation that might have been incurred by it. they should be employees, or laborers, of the NWSA, and must be concerned with the benefit in
Subsequently, on May 12, 1965, the aforesaid labor union, acting for and in behalf of Aurelio B. question, i.e., that they rendered services on Sundays and legal holidays. Indeed, the intervenors
Zurbano, 3 Francisco P. Domingo 4 and Rufo R. Fabregas, 5 filed a motion alleging that such were very much concerned about the afore-stated benefit because they did actually perform said
individuals were similarly situated as they rendered work in excess of the regular eight-hour services; so much so, that they demanded it during the hearing and likewise in their
period, including nighttime, having performed overtime services as well on Sundays and legal memorandum.8
holidays and therefore entitled to a similar award in accordance with the aforesaid decision. The
National Waterworks & Sewerage Authority, hereinafter referred to as the Nawasa, was duly Whatever doubt could conceivably exist should be erased if heed be paid to what was explicitly
heard. After which, on August 10, 1966, such a claim for financial benefits was granted in the set forth by us in our opinion in the main case. As we stated there: "It is to be noted, however,
respective amounts of P29,640.81 for Zurbano, P9,212.78 for Domingo and P22,711.24 for that in the case at bar it has been stipulated that prior to the enactment of Republic Act No. 1880,
Fabregas, the order being issued by the Hon. Joaquin M. Salvador, Associate Judge of respondent providing for the implementation of the 40-Hour Week Law, the Metropolitan Water District had
Court of Industrial Relations. This order was subsequently affirmed by respondent Court en been paying 25% additional compensation for work on Sundays and legal holidays to its employees
banc in a resolution dated September 22, 1966, denying a motion for reconsideration. and laborers by virtue of Resolution No. 47, series of 1948, of its Board of Directors, which practice
Dissatisfied with such turn of events, this petition for review was filed by the Nawasa. We sustain was continued by the [Nawasa] when the latter took over the service. And in the collective
respondent court. bargaining agreement entered into between the [Nawasa] and respondent unions it was agreed
that all existing benefits enjoyed by the employees and laborers prior to its effectivity shall remain
As noted at the outset, we sustain respondent Court. Our August 31, 1964 decision in the main in force and shall form part of the agreement, among which certainly is the 25% additional
Nawasa suit is decisive of the case at hand. It furnishes the law of the case. compensation for work on Sundays and legal holidays theretofore enjoyed by said laborers and
employees. It may, therefore, be said that while under Commonwealth Act No. 444 a public utility
How did petitioner propose to discharge it? It would assign as errors allegedly committed the is not required to pay additional compensation to its employees and workers for work done on
holding of respondent Court that it had jurisdiction over the claim of Domingo; the award to Sundays and legal holidays, there is, however, no prohibition for it to pay such additional
Zurbano, Domingo and Fabregas of the aforesaid additional compensation for work rendered compensation if it voluntarily agrees to do so. The [Nawasa] committed itself to pay this additional
during Sundays and legal holidays on the ground that previously respondent Court did deny such compensation. It must pay not because of compulsion of law but because of contractual
a claim and that no amount should have been granted for work rendered in excess of eight hours obligation.9
a day as there was no written authorization by petitioner's general manager; and the failure to
sustain its plea of prescription of whatever claim could have been made by the aforesaid It would be to defy rather to defer to the above decision, which is the law of the case, if petitioner
individuals. We are satisfied that on the above facts as found by the Court of Industrial Relations is to be indulged in its unwarranted assertion that the award of additional compensation for work
and the law as previously declared by us, such errors alleged cannot be accorded acceptance. rendered during Sundays and legal holidays was done with grave abuse of discretion.

2. The second assigned error is equally without merit. It is there alleged that respondent Court WHEREFORE, the orders appealed from are hereby affirmed with costs.
committed a grave abuse of discretion amounting to lack of jurisdiction, when it awarded to
Zurbano, Domingo and Fabregas additional compensation for work rendered during Sundays
and legal holidays considering that such a demand was denied by it in the main case.

In support of such an alleged error, petitioner cited in its brief this portion of the order of January
16, 1961 of respondent Court: "The intervenors, in their Memorandum, wanted to include the claim
for additional compensation for services rendered on Sundays and legal holidays before and after
the effectivity of R. A. No. 1880 and also on Saturdays after the effectivity of the said law, contending
that Saturday becomes an off-day or day of rest. This particular claim is not covered by the present
petition, which only seeks payment of additional payment for night work and overtime pay. The
records show that the respondent Company interposed its timely objection to the evidence tending
to establish such claim. The intervenors did not file any amended petition covering the claim for
extra premium for work performed on Saturdays, Sundays and legal holidays, contrary to their
announcement made in open court. And neither was it touched by the respondent Company during
the presentation of its evidence. 6 Its very own brief, however, two pages later, duly took of this
excerpt from the aforesaid order thus: "It is, therefore, our resolution that respondent NWSA should
pay its employees and laborers concerned additional compensation equivalent to 25% of their basic
G.R. No. 101761. March 24, 1993. Two years after the implementation of the JE Program, specifically on June 20, 1990, the members
of herein respondent union filed a complainant with the executive labor arbiter for non-payment of
NATIONAL SUGAR REFINERIES CORPORATION, petitioner, vs. NATIONAL LABOR RELATIONS overtime, rest day and holiday pay allegedly in violation of Article 100 of the Labor Code.
COMMISSION and NBSR SUPERVISORY UNION, (PACIWU) TUCP, respondents.
On January 7, 1991, Executive Labor Arbiter Antonio C. Pido rendered a decision 2 disposing as
REGALADO, J p: follows:
"WHEREFORE, premises considered, respondent National Sugar refineries Corporation is hereby
directed to —
The main issue presented for resolution in this original petition for certiorari is whether supervisory
1. pay the individual members of complainant union the usual overtime pay, rest day pay and
employees, as defined in Article 212 (m), Book V of the Labor Code, should be considered as officers
holiday pay enjoyed by them instead of the P100.00 special allowance which was implemented
or members of the managerial staff under Article 82, Book III of the same Code, and hence are not
on June 11, 1988; and
entitled to overtime rest day and holiday pay.
2. pay the individual members of complainant union the difference in money value between the
P100.00 special allowance and the overtime pay, rest day pay and holiday pay that they ought
Petitioner National Sugar Refineries Corporation (NASUREFCO), a corporation which is fully owned to have received from June 1, 1988.
and controlled by the Government, operates three (3) sugar refineries located at Bukidnon, Iloilo All other claims are hereby dismissed for lack of merit.
and Batangas. The Batangas refinery was privatized on April 11, 1992 pursuant to Proclamation No.
50. 1 Private respondent union represents the former supervisors of the NASUREFCO Batangas
In finding for the members therein respondent union, the labor ruled that the along span of time
Sugar Refinery, namely, the Technical Assistant to the Refinery Operations Manager, Shift Sugar
during which the benefits were being paid to the supervisors has accused the payment thereof to
Warehouse Supervisor, Senior Financial/Budget Analyst, General Accountant, Cost Accountant,
ripen into contractual obligation; at the complainants cannot be estopped from questioning the
Sugar Accountant, Junior Financial/Budget Analyst, Shift Boiler Supervisor,, Shift Operations
validity of the new compensation package despite the fact that they have been receiving the benefits
Chemist, Shift Electrical Supervisor, General Services Supervisor, Instrumentation Supervisor,
therefrom, considering that respondent union was formed only a year after the implementation of
Community Development Officer, Employment and Training Supervisor, Assistant Safety and
the Job Evaluation Program, hence there was no way for the individual supervisors to express their
Security Officer, Head and Personnel Services, Head Nurse, Property Warehouse Supervisor, Head
collective response thereto prior to the formation of the union; and the comparative computations
of Inventory Control Section, Shift Process Supervisor, Day Maintenance Supervisor and Motorpool
presented by the private respondent union showed that the P100.00 special allowance given
Supervisor.
NASUREFCO fell short of what the supervisors ought to receive had the overtime pay rest day pay
and holiday pay not been discontinued, which arrangement, therefore, amounted to a diminution of
On June 1, 1988, petitioner implemented a Job Evaluation (JE) Program affecting all employees, benefits.
from rank-and-file to department heads. The JE Program was designed to rationalized the duties
and functions of all positions, reestablish levels of responsibility, and recognize both wage and
On appeal, in a decision promulgated on July 19, 1991 by its Third Division, respondent National
operational structures. Jobs were ranked according to effort, responsibility, training and working
Labor Relations Commission (NLRC) affirmed the decision of the labor arbiter on the ground that the
conditions and relative worth of the job. As a result, all positions were re-evaluated, and all
members of respondent union are not managerial employees, as defined under Article 212 (m) of
employees including the members of respondent union were granted salary adjustments and
the Labor Code and, therefore, they are entitled to overtime, rest day and holiday pay. Respondent
increases in benefits commensurate to their actual duties and functions.
NLRC declared that these supervisory employees are merely exercising recommendatory powers
subject to the evaluation, review and final action by their department heads; their responsibilities
We glean from the records that for about ten years prior to the JE Program, the members of do not require the exercise of discretion and independent judgment; they do not participate in the
respondent union were treated in the same manner as rank-and file employees. As such, they used formulation of management policies nor in the hiring or firing of employees; and their main function
to be paid overtime, rest day and holiday pay pursuant to the provisions of Articles 87, 93 and 94 is to carry out the ready policies and plans of the corporation. 3 Reconsideration of said decision was
of the Labor Code as amended. With the implementation of the JE Program, the following denied in a resolution of public respondent dated August 30, 1991. 4
adjustments were made: (1) the 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; (2) there
Hence this petition for certiorari, with petitioner NASUREFCO asseverating that public respondent
was an increase in basic pay of the average of 50% of their basic pay prior to the JE Program, with
commission committed a grave abuse of discretion in refusing to recognized the fact that the
the union members now enjoying a wide gap (P1,269.00 per month) in basic pay compared to the
members of respondent union are members of the managerial staff who are not entitled to overtime,
highest paid rank-and-file employee; (3) longevity pay was increased on top of alignment
rest day and holiday pay; and in making petitioner assume the "double burden" of giving the benefits
adjustments; (4) they were entitled to increased company COLA of P225.00 per month; (5) there
due to rank-and-file employees together with those due to supervisors under the JE Program.
was a grant of P100.00 allowance for rest day/holiday work.

We find creditable merit in the petition and that the extraordinary writ of certiorari shall accordingly
On May 11, 1990, petitioner NASUREFCO recognized herein respondent union, which was organized
issue.
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. The primordial issue to be resolved herein is whether the members of respondent union are entitled
to overtime, rest day and holiday pay. Before this can be resolved, however it must of necessity be
ascertained first whether or not the union members, as supervisory employees, are to be considered
as officers or members of the managerial staff who are exempt from the coverage of Article 82 of (4) Who do not devote more 20 percent of their hours worked in a work-week to activities which
the Labor Code. are not directly and closely related to the performance of the work described in paragraphs (1),
(2), and above."
It is not disputed that the members of respondent union are supervisory employees, as defined
employees, as defined under Article 212(m), Book V of the Labor Code on Labor Relations, which It is the submission of petitioner that while the members of respondent union, as supervisors, may
reads: not be occupying managerial positions, they are clearly officers or members of the managerial staff
"(m) 'Managerial employee' is one who is vested with powers or prerogatives to lay down and because they meet all the conditions prescribed by law and, hence, they are not entitled to overtime,
execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharged, assign rest day and supervisory employees under Article 212 (m) should be made to apply only to the
or discipline employees. Supervisory employees are those who, in the interest of the employer provisions on Labor Relations, while the right of said employees to the questioned benefits should
effectively recommend such managerial actions if the exercise of such authority is not merely be considered in the light of the meaning of a managerial employee and of the officers or members
routinary or clerical in nature but requires the use of independent judgment. All employees not of the managerial staff, as contemplated under Article 82 of the Code and Section 2, Rule I Book III
falling within any of those above definitions are considered rank-and-file employees of this Book." of the implementing rules. In other words, for purposes of forming and joining unions, certification
elections, collective bargaining, and so forth, the union members are supervisory employees. In
Respondent NLRC, in holding that the union members are entitled to overtime, rest day and holiday terms of working conditions and rest periods and entitlement to the questioned benefits, however,
pay, and in ruling that the latter are not managerial employees, adopted the definition stated in the they are officers or members of the managerial staff, hence they are not entitled thereto.
aforequoted statutory provision.
While the Constitution is committed to the policy of social justice and the protection of the working
Petitioner, however, avers that for purposes of determining whether or not the members of class, it should not be supposed that every labor dispute will be automatically decided in favor of
respondent union are entitled to overtime, rest day and holiday pay, said employees should be labor. Management also has its own rights which, as such, are entitled to respect and enforcement
considered as "officers or members of the managerial staff" as defined under Article 82, Book III of in the interest of simple fair play. Out of its concern for those with less privileges in life, this Court
the Labor Code on "Working Conditions and Rest Periods" and amplified in Section 2, Rule I, Book has inclined more often than not toward the worker and upheld his cause in his conflicts with the
III of the Rules to Implement the Labor Code, to wit: employer. Such favoritism, however, has not blinded us to the rule that justice is in every case for
"Art. 82 Coverage. — The provisions of this title shall apply to employees in all establishments and the deserving, to be dispensed in the light of the established facts and the applicable law and
undertakings whether for profit or not, but not to government employees, managerial employees, doctrine. 5
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 This is one such case where we are inclined to tip the scales of justice in favor of the employer.
as determined by the Secretary of Labor in Appropriate regulations.
"As used herein, 'managerial employees' refer to those whose primary duty consists of the The question whether a given employee is exempt from the benefits of the law is a factual one
management of the establishment in which they are employed or of a department or subdivision dependent on the circumstances of the particular case, In determining whether an employee is within
thereof, and to other officers or members of the managerial staff." (Emphasis supplied.) the terms of the statutes, the criterion is the character of the work performed, rather than the title
of the employee's position. 6
'Sec. 2. Exemption. — The provisions of this rule shall not apply to the following persons if they
qualify for exemption under the condition set forth herein: Consequently, while generally this Court is not supposed to review the factual findings of respondent
(b) Managerial employees, if they meet all of the following conditions, namely: commission, substantial justice and the peculiar circumstances obtaining herein mandate a deviation
(1) Their primary duty consists of the management of the establishment in which they are from the rule.
employed or of a department or subdivision thereof:
(2) They customarily and regularly direct the work of two or more employees therein:
A cursory perusal of the Job Value Contribution Statements 7 of the union members will readily show
(3) They have the authority to hire or fire other employees of lower rank; or their suggestions
that these supervisory employees are under the direct supervision of their respective department
and recommendations as to the hiring and firing and as to the promotion or any other change
superintendents and that generally they assist the latter in planning, organizing, staffing, directing,
of status of other employees are given particular weight.
controlling communicating and in making decisions in attaining the company's set goals and
objectives. These supervisory employees are likewise responsible for the effective and efficient
(c) Officers or members of a managerial staff if they perform the following duties and operation of their respective departments. More specifically, their duties and functions include,
responsibilities: among others, the following operations whereby the employee:
(1) The primary duty consists of the performance of work directly related to management policies
of their employer;
1) assists the department superintendent in the following:
(2) Customarily and regularly exercise discretion and independent judgment;
a) planning of systems and procedures relative to department activities;
(3) (i) Regularly and directly assist a proprietor or a managerial employee whose primary duty
b) organizing and scheduling of work activities of the department, which includes employee
consists of the management of the establishment in which he is employed or subdivision thereof;
shifting scheduled and manning complement;
or (ii) execute under general supervision work along specialized or technical lines requiring
c) decision making by providing relevant information data and other inputs;
special training, experience, or knowledge; or (iii) execute under general supervision special
d) attaining the company's set goals and objectives by giving his full support;
assignments and tasks; and
e) selecting the appropriate man to handle the job in the department; and
f) preparing annual departmental budget; A. Prior to the JE Program, the union members, while being supervisors, received benefits similar to
the rank-and-file employees such as overtime, rest day and holiday pay, simply because they were
2) observes, follows and implements company policies at all times and recommends disciplinary treated in the same manner as rank-and-file employees, and their basic pay was nearly on the same
action on erring subordinates; level as those of the latter, aside from the fact that their specific functions and duties then as
3) trains and guides subordinates on how to assume responsibilities and become more productive; supervisors had not been properly defined and delineated from those of the rank-and-file. Such fact
4) conducts semi-annual performance evaluation of his subordinates and recommends necessary is apparent from the clarification made by petitioner in its motion for reconsideration 8 filed with
action for their development/advancement; respondent commission in NLRC Case No. CA No. I-000058, dated August 16, 1991, wherein, it
5) represents the superintendent or the department when appointed and authorized by the former; lucidly explained:
6) coordinates and communicates with other inter and intra department supervisors when "But, complainants no longer occupy the same positions they held before the JE Program. Those
necessary; positions formerly classified as 'supervisory' and found after the JE Program to be rank-and-file
7) recommends disciplinary actions/promotions; were classified correctly and continue to receive overtime, holiday and restday pay. As to them,
8) recommends measures to improve work methods, equipment performance, quality of service the practice subsists.
and working conditions; "However, those whose duties confirmed them to be supervisory, were re-evaluated, their duties
9) sees to it that safety rules and regulations and procedure and are implemented and followed re-defined and in most cases their organizational positions re-designated to confirm their superior
by all NASUREFCO employees, recommends revisions or modifications to said rules when deemed rank and duties. Thus, after the JE program, complainants cannot be said to occupy the same
necessary, and initiates and prepares reports for any observed abnormality within the refinery; positions." 9
10) supervises the activities of all personnel under him and goes to it that instructions to
subordinates are properly implemented; and It bears mention that this positional submission was never refuted nor controverted by respondent
11) performs other related tasks as may be assigned by his immediate superior. union in any of its pleadings filed before herein public respondent or with this Court. Hence, it can
be safely concluded therefrom that the members of respondent union were paid the questioned
From the foregoing, it is apparent that the members of respondent union discharge duties and benefits for the reason that, at that time, they were rightfully entitled thereto. Prior to the JE
responsibilities which ineluctably qualify them as officers or members of the managerial staff, as Program, they could not be categorically classified as members or officers of the managerial staff
defined in Section 2, Rule I Book III of the aforestated Rules to Implement the Labor Code, viz.: (1) considering that they were then treated merely on the same level as rank-and-file. Consequently,
their primary duty consists of the performance of work directly related to management policies of the payment thereof could not be construed as constitutive of voluntary employer practice, which
their employer; (2) they customarily and regularly exercise discretion and independent judgment; cannot be now be unilaterally withdrawn by petitioner. To be considered as such, it should have
(3) they regularly and directly assist the managerial employee whose primary duty consist of the been practiced over a long period of time, and must be shown to have been consistent and
management of a department of the establishment in which they are employed (4) they execute, deliberate. 10
under general supervision, work along specialized or technical lines requiring special training,
experience, or knowledge; (5) they execute, under general supervision, special assignments and The test or rationale of this rule on long practice requires an indubitable showing that the employer
tasks; and (6) they do not devote more than 20% of their hours worked in a work-week to activities agreed to continue giving the benefits knowingly fully well that said employees are not covered by
which are not directly and clearly related to the performance of their work hereinbefore described. the law requiring payment thereof. 11 In the case at bar, respondent union failed to sufficiently
establish that petitioner has been motivated or is wont to give these benefits out of pure generosity.
Under the facts obtaining in this case, we are constrained to agree with petitioner that the union
members should be considered as officers and members of the managerial staff and are, therefore, B. It remains undisputed that the implementation of the JE Program, the members of private
exempt from the coverage of Article 82. Perforce, they are not entitled to overtime, rest day and respondent union were re-classified under levels S-5 S-8 which were considered under the program
holiday. as managerial staff purposes of compensation and benefits, that they occupied re-evaluated
positions, and that their basic pay was increased by an average of 50% of their basic salary prior to
The distinction made by respondent NLRC on the basis of whether or not the union members are the JE Program. In other words, after the JE Program there was an ascent in position, rank and
managerial employees, to determine the latter's entitlement to the questioned benefits, is misplaced salary. This in essence is a promotion which is defined as the advancement from one position to
and inappropriate. It is admitted that these union members are supervisory employees and this is another with an increase in duties and responsibilities as authorized by law, and usually accompanied
one instance where the nomenclatures or titles of their jobs conform with the nature of their by an increase in salary. 12
functions. Hence, to distinguish them from a managerial employee, as defined either under Articles
82 or 212 (m) of the Labor Code, is puerile and in efficacious. The controversy actually involved Quintessentially, with the promotion of the union members, they are no longer entitled to the
here seeks a determination of whether or not these supervisory employees ought to be considered benefits which attach and pertain exclusively to their positions. Entitlement to the benefits provided
as officers or members of the managerial staff. The distinction, therefore, should have been made for by law requires prior compliance with the conditions set forth therein. With the promotion of the
along that line and its corresponding conceptual criteria. members of respondent union, they occupied positions which no longer met the requirements
imposed by law. Their assumption of these positions removed them from the coverage of the law,
II. We likewise no not subscribe to the finding of the labor arbiter that the payment of the questioned ergo, their exemption therefrom.
benefits to the union members has ripened into a contractual obligation.
As correctly pointed out by petitioner, if the union members really wanted to continue receiving the
benefits which attach to their former positions, there was nothing to prevent them from refusing to
accept their promotions and their corresponding benefits. As the sating goes by, they cannot have
their cake and eat it too or, as petitioner suggests, they could not, as a simple matter of law and G.R. No. 159577 May 3, 2006
fairness, get the best of both worlds at the expense of NASUREFCO.
CHARLITO PEÑARANDA, Petitioner,
Promotion of its employees is one of the jurisprudentially-recognized exclusive prerogatives of vs.
management, provided it is done in good faith. In the case at bar, private respondent union has BAGANGA PLYWOOD CORPORATION and HUDSON CHUA, Respondents.
miserably failed to convince this Court that the petitioner acted implementing the JE Program. There
is no showing that the JE Program was intended to circumvent the law and deprive the members of PANGANIBAN, CJ:
respondent union of the benefits they used to receive.

Managerial employees and members of the managerial staff are exempted from the provisions of
Not so long ago, on this particular score, we had the occasion to hold that: the Labor Code on labor standards. Since petitioner belongs to this class of employees, he is not
". . . it is the prerogative of the management to regulate, according to its discretion and judgment, entitled to overtime pay and premium pay for working on rest days.
all aspects of employment. This flows from the established rule that labor law does not authorize
the substitution of the judgment of the employer in the conduct of its business. Such management
The Case
prerogative may be availed of without fear of any liability so long as it is exercised in good faith
for the advancement of the employer's interest and not for the purpose of defeating on
circumventing the rights of employees under special laws or valid agreement and are not exercised Before us is a Petition for Review1 under Rule 45 of the Rules of Court, assailing the January 27,
in a malicious, harsh, oppressive, vindictive or wanton manner or out of malice or spite." 13 20032 and July 4, 20033 Resolutions of the Court of Appeals (CA) in CA-GR SP No. 74358. The earlier
Resolution disposed as follows:
"WHEREFORE, premises considered, the instant petition is hereby DISMISSED."4
WHEREFORE, the impugned decision and resolution of respondent National Labor Relations
Commission promulgated on July 19, 1991 and August 30, 1991, respectively, are hereby ANNULLED
and SET ASIDE for having been rendered and adopted with grave abuse of discretion, and the basic The latter Resolution denied reconsideration.
complaint of private respondent union is DISMISSED.
On the other hand, the Decision of the National Labor Relations Commission (NLRC) challenged in
the CA disposed as follows:
"WHEREFORE, premises considered, the decision of the Labor Arbiter below awarding overtime
pay and premium pay for rest day to complainant is hereby REVERSED and SET ASIDE, and the
complaint in the above-entitled case dismissed for lack of merit.5

The Facts

Sometime in June 1999, Petitioner Charlito Peñaranda was hired as an employee of Baganga Plywood
Corporation (BPC) to take charge of the operations and maintenance of its steam plant boiler. 6 In
May 2001, Peñaranda filed a Complaint for illegal dismissal with money claims against BPC and its
general manager, Hudson Chua, before the NLRC.7

After the parties failed to settle amicably, the labor arbiter 8 directed the parties to file their position
papers and submit supporting documents.9 Their respective allegations are summarized by the labor
arbiter as follows:

"[Peñaranda] through counsel in his position paper alleges that he was employed by respondent
[Baganga] on March 15, 1999 with a monthly salary of P5,000.00 as Foreman/Boiler Head/Shift
Engineer until he was illegally terminated on December 19, 2000. Further, [he] alleges that his
services [were] terminated without the benefit of due process and valid grounds in accordance with
law. Furthermore, he was not paid his overtime pay, premium pay for working during holidays/rest
days, night shift differentials and finally claims for payment of damages and attorney’s fees having
been forced to litigate the present complaint.

"Upon the other hand, respondent [BPC] is a domestic corporation duly organized and existing under
Philippine laws and is represented herein by its General Manager HUDSON CHUA, [the] individual
respondent. Respondents thru counsel allege that complainant’s separation from service was done
pursuant to Art. 283 of the Labor Code. The respondent [BPC] was on temporary closure due to
repair and general maintenance and it applied for clearance with the Department of Labor and "II. The finding that [Peñaranda] is entitled to the payment of OVERTIME PAY and OTHER
Employment, Regional Office No. XI to shut down and to dismiss employees (par. 2 position paper). MONETARY BENEFITS."18
And due to the insistence of herein complainant he was paid his separation benefits (Annexes C and
D, ibid). Consequently, when respondent [BPC] partially reopened in January 2001, [Peñaranda] The Court’s Ruling
failed to reapply. Hence, he was not terminated from employment much less illegally. He opted to
severe employment when he insisted payment of his separation benefits. Furthermore, being a
The Petition is not meritorious.
managerial employee he is not entitled to overtime pay and if ever he rendered services beyond the
normal hours of work, [there] was no office order/or authorization for him to do so. Finally,
respondents allege that the claim for damages has no legal and factual basis and that the instant Preliminary Issue: Resolution on the Merits
complaint must necessarily fail for lack of merit."10
The CA dismissed Peñaranda’s Petition on purely technical grounds, particularly with regard to the
The labor arbiter ruled that there was no illegal dismissal and that petitioner’s Complaint was failure to submit supporting documents.
premature because he was still employed by BPC. 11 The temporary closure of BPC’s plant did not
terminate his employment, hence, he need not reapply when the plant reopened. In Atillo v. Bombay,19 the Court held that the crucial issue is whether the documents accompanying
the petition before the CA sufficiently supported the allegations therein. Citing this case, Piglas-
According to the labor arbiter, petitioner’s money claims for illegal dismissal was also weakened by Kamao v. NLRC20 stayed the dismissal of an appeal in the exercise of its equity jurisdiction to order
his quitclaim and admission during the clarificatory conference that he accepted separation benefits, the adjudication on the merits.
sick and vacation leave conversions and thirteenth month pay.12
The Petition filed with the CA shows a prima facie case. Petitioner attached his evidence to challenge
Nevertheless, the labor arbiter found petitioner entitled to overtime pay, premium pay for working the finding that he was a managerial employee.21 In his Motion for Reconsideration, petitioner also
on rest days, and attorney’s fees in the total amount of P21,257.98.13 submitted the pleadings before the labor arbiter in an attempt to comply with the CA
rules.22 Evidently, the CA could have ruled on the Petition on the basis of these attachments.
Petitioner should be deemed in substantial compliance with the procedural requirements.
Ruling of the NLRC

Under these extenuating circumstances, the Court does not hesitate to grant liberality in favor of
Respondents filed an appeal to the NLRC, which deleted the award of overtime pay and premium
petitioner and to tackle his substantive arguments in the present case. Rules of procedure must be
pay for working on rest days. According to the Commission, petitioner was not entitled to these
adopted to help promote, not frustrate, substantial justice. 23 The Court frowns upon the practice of
awards because he was a managerial employee.14
dismissing cases purely on procedural grounds. 24 Considering that there was substantial
compliance,25 a liberal interpretation of procedural rules in this labor case is more in keeping with
Ruling of the Court of Appeals the constitutional mandate to secure social justice. 26

In its Resolution dated January 27, 2003, the CA dismissed Peñaranda’s Petition for Certiorari. The First Issue: Timeliness of Appeal
appellate court held that he failed to: 1) attach copies of the pleadings submitted before the labor
arbiter and NLRC; and 2) explain why the filing and service of the Petition was not done by personal
Under the Rules of Procedure of the NLRC, an appeal from the decision of the labor arbiter should
service.15
be filed within 10 days from receipt thereof.27

In its later Resolution dated July 4, 2003, the CA denied reconsideration on the ground that petitioner
Petitioner’s claim that respondents filed their appeal beyond the required period is not substantiated.
still failed to submit the pleadings filed before the NLRC. 16
In the pleadings before us, petitioner fails to indicate when respondents received the Decision of the
labor arbiter. Neither did the petitioner attach a copy of the challenged appeal. Thus, this Court has
The Issues no means to determine from the records when the 10-day period commenced and terminated. Since
petitioner utterly failed to support his claim that respondents’ appeal was filed out of time, we need
Petitioner states the issues in this wise: not belabor that point. The parties alleging have the burden of substantiating their allegations.28
"The [NLRC] committed grave abuse of discretion amounting to excess or lack of jurisdiction when
it entertained the APPEAL of the respondent[s] despite the lapse of the mandatory period of TEN Second Issue: Nature of Employment
DAYS.
"The [NLRC] committed grave abuse of discretion amounting to an excess or lack of jurisdiction
Petitioner claims that he was not a managerial employee, and therefore, entitled to the award
when it rendered the assailed RESOLUTIONS dated May 8, 2002 and AUGUST 16, 2002
granted by the labor arbiter.
REVERSING AND SETTING ASIDE the FACTUAL AND LEGAL FINDINGS of the [labor arbiter] with
respect to the following:
"I. The finding of the [labor arbiter] that [Peñaranda] is a regular, common employee entitled Article 82 of the Labor Code exempts managerial employees from the coverage of labor standards.
to monetary benefits under Art. 82 [of the Labor Code]. Labor standards provide the working conditions of employees, including entitlement to overtime pay
and premium pay for working on rest days.29 Under this provision, managerial employees are "those
whose primary duty consists of the management of the establishment in which they are employed Noteworthy, even petitioner admitted that he was a supervisor. In his Position Paper, he stated that
or of a department or subdivision."30 he was the foreman responsible for the operation of the boiler.36 The term foreman implies that he
was the representative of management over the workers and the operation of the
The Implementing Rules of the Labor Code state that managerial employees are those who meet department.37 Petitioner’s evidence also showed that he was the supervisor of the steam plant. 38 His
the following conditions: classification as supervisor is further evident from the manner his salary was paid. He belonged to
"(1) Their primary duty consists of the management of the establishment in which they are the 10% of respondent’s 354 employees who were paid on a monthly basis; the others were paid
employed or of a department or subdivision thereof; only on a daily basis.39
"(2) They customarily and regularly direct the work of two or more employees therein;
"(3) They have the authority to hire or fire other employees of lower rank; or their suggestions On the basis of the foregoing, the Court finds no justification to award overtime pay and premium
and recommendations as to the hiring and firing and as to the promotion or any other change of pay for rest days to petitioner.
status of other employees are given particular weight."31
WHEREFORE, the Petition is DENIED. Costs against petitioner.
The Court disagrees with the NLRC’s finding that petitioner was a managerial employee. However,
petitioner was a member of the managerial staff, which also takes him out of the coverage of labor
standards. Like managerial employees, officers and members of the managerial staff are not entitled
to the provisions of law on labor standards. 32 The Implementing Rules of the Labor Code define
members of a managerial staff as those with the following duties and responsibilities:
"(1) The primary duty consists of the performance of work directly related to management policies
of the employer;
"(2) Customarily and regularly exercise discretion and independent judgment;
"(3) (i) Regularly and directly assist a proprietor or a managerial employee whose primary duty
consists of the management of the establishment in which he is employed or subdivision thereof;
or (ii) execute under general supervision work along specialized or technical lines requiring special
training, experience, or knowledge; or (iii) execute under general supervision special assignments
and tasks; and
"(4) who do not devote more than 20 percent of their hours worked in a workweek to activities
which are not directly and closely related to the performance of the work described in paragraphs
(1), (2), and (3) above."33

As shift engineer, petitioner’s duties and responsibilities were as follows:


"1. To supply the required and continuous steam to all consuming units at minimum cost.
"2. To supervise, check and monitor manpower workmanship as well as operation of boiler and
accessories.
"3. To evaluate performance of machinery and manpower.
"4. To follow-up supply of waste and other materials for fuel.
"5. To train new employees for effective and safety while working.
"6. Recommend parts and supplies purchases.
"7. To recommend personnel actions such as: promotion, or disciplinary action.
"8. To check water from the boiler, feedwater and softener, regenerate softener if beyond hardness
limit.
"9. Implement Chemical Dosing.
"10. Perform other task as required by the superior from time to time."34

The foregoing enumeration, particularly items 1, 2, 3, 5 and 7 illustrates that petitioner was a
member of the managerial staff. His duties and responsibilities conform to the definition of a member
of a managerial staff under the Implementing Rules.

Petitioner supervised the engineering section of the steam plant boiler. His work involved overseeing
the operation of the machines and the performance of the workers in the engineering section. This
work necessarily required the use of discretion and independent judgment to ensure the proper
functioning of the steam plant boiler. As supervisor, petitioner is deemed a member of the
managerial staff.35
G.R. No. 162813 February 12, 2007 b) Overtime Pay: (3 hours/day)
03/20/97 – 4/30/97 = 1.36 mos.
₱ 180/8 x 1.25 x 3 x 26 x 1.36 = ₱ 2,983.50
FAR EAST AGRICULTURAL SUPPLY, INC. and/or ALEXANDER UY, Petitioners, 05/01/97 – 02/05/98 = 9.16 mos.
vs. ₱ 185/8 x 1.25 x 3 x 26 x 9.16 = 20,652.94
JIMMY LEBATIQUE and THE HONORABLE COURT OF APPEALS, Respondents. 02/06/98 – 10/30/99 = 20.83 mos.
₱ 198/8 x 1.25 x 3 x 26 x [20.83] = 50,265.39
10/31/99 – 01/24/00 = 2.80 mos.
QUISUMBING, J.: ₱ 223.50/8 x 1.25 x 3 x 26 x 2.80 = 7,626.94 81,528.77

Before us is a petition for review on certiorari assailing the Decision 1 dated September 30, 2003 of TOTAL AWARD ₱ 196,659.72
the Court of Appeals in CA-G.R. SP No. 76196 and its Resolution2 dated March 15, 2004 denying the
motion for reconsideration. The appellate court had reversed the Decision 3 dated October 15, 2002 On appeal, the NLRC reversed the Labor Arbiter and dismissed the complaint for lack of merit. The
of the National Labor Relations Commission (NLRC) setting aside the Decision 4 dated June 27, 2001 NLRC held that there was no dismissal to speak of since Lebatique was merely suspended. Further,
of the Labor Arbiter. it found that Lebatique was a field personnel, hence, not entitled to overtime pay and service
incentive leave pay. Lebatique sought reconsideration but was denied.
Petitioner Far East Agricultural Supply, Inc. (Far East) hired on March 4, 1996 private respondent
Jimmy Lebatique as truck driver with a daily wage of ₱223.50. He delivered animal feeds to the Aggrieved, Lebatique filed a petition for certiorari with the Court of Appeals.1awphi1.net
company’s clients.

The Court of Appeals, in reversing the NLRC decision, reasoned that Lebatique was suspended on
On January 24, 2000, Lebatique complained of nonpayment of overtime work particularly on January January 24, 2000 but was illegally dismissed on January 29, 2000 when Alexander told him to look
22, 2000, when he was required to make a second delivery in Novaliches, Quezon City. That same for another job. It also found that Lebatique was not a field personnel and therefore entitled to
day, Manuel Uy, brother of Far East’s General Manager and petitioner Alexander Uy, suspended payment of overtime pay, service incentive leave pay, and 13th month pay.
Lebatique apparently for illegal use of company vehicle. Even so, Lebatique reported for work the
next day but he was prohibited from entering the company premises.
It reinstated the decision of the Labor Arbiter as follows:
WHEREFORE, premises considered, the decision of the NLRC dated 27 December 2002 is
On January 26, 2000, Lebatique sought the assistance of the Department of Labor and Employment hereby REVERSED and the Labor Arbiter’s decision dated 27 June 2001 REINSTATED.
(DOLE) Public Assistance and Complaints Unit concerning the nonpayment of his overtime pay.
According to Lebatique, two days later, he received a telegram from petitioners requiring him to
Petitioners moved for reconsideration but it was denied.
report for work. When he did the next day, January 29, 2000, Alexander asked him why he was
claiming overtime pay. Lebatique explained that he had never been paid for overtime work since he
started working for the company. He also told Alexander that Manuel had fired him. After talking to Hence, the instant petition wherein petitioners assign the following errors:
Manuel, Alexander terminated Lebatique and told him to look for another job.
I. THE COURT OF APPEALS … ERRED IN REVERSING THE DECISION OF THE NATIONAL
On March 20, 2000, Lebatique filed a complaint for illegal dismissal and nonpayment of overtime LABOR RELATIONS COMMISSION DATED 15 OCTOBER 2002 AND IN RULING THAT THE
pay. The Labor Arbiter found that Lebatique was illegally dismissed, and ordered his reinstatement PRIVATE RESPONDENT WAS ILLEGALLY DISMISSED.
and the payment of his full back wages, 13th month pay, service incentive leave pay, and overtime
pay. The dispositive portion of the decision is quoted herein in full, as follows: II. THE COURT OF APPEALS … ERRED IN REVERSING THE DECISION OF THE NATIONAL
LABOR RELATIONS COMMISSION DATED 15 OCTOBER 2002 AND IN RULING THAT
WHEREFORE, we find the termination of complainant illegal. He should thus be ordered reinstated PRIVATE RESPONDENT IS NOT A FIELD PERSONNEL AND THER[E]FORE ENTITLED TO
with full backwages. He is likewise ordered paid his 13th month pay, service incentive leave pay and OVERTIME PAY AND SERVICE INCENTIVE LEAVE PAY.
overtime pay as computed by the Computation and Examination Unit as follows:
III. THE COURT OF APPEALS … ERRED IN NOT DISMISSING THE PETITION FOR CERTIORARI
a) Backwages: FOR FAILURE OF PRIVATE RESPONDENT TO ATTACH CERTIFIED TRUE COPIES OF THE
01/25/00 - 10/31/00 = 9.23 mos. QUESTIONED DECISION AND RESOLUTION OF THE PUBLIC RESPONDENT.7
₱ 223.50 x 26 x 9.23 = ₱ 53,635.53
11/01/00 – 06/26/01 = 7.86 mos.
₱ 250.00 x 26 x 7.86 = 51,090.00 ₱ 104,725.53 Simply stated, the principal issues in this case are: (1) whether Lebatique was illegally dismissed;
13th Month Pay: 1/12 of ₱ 104,725.53 = 8,727.13 and (2) whether Lebatique was a field personnel, not entitled to overtime pay.
Service Incentive Leave Pay
01/25/00 – 10/31/00 = 9.23 mos.
Petitioners contend that, (1) Lebatique was not dismissed from service but merely suspended for a
₱ 223.50 x 5/12 x 9.23 = ₱ 859.54
day due to violation of company rules; (2) Lebatique was not barred from entering the company
11/01/00 – 06/26/01 = 7.86 mos.
₱ 250.00 x 5/12 x 7.86 = [818.75] 1,678.29 115,130.95 premises since he never reported back to work; and (3) Lebatique is estopped from claiming that
he was illegally dismissed since his complaint before the DOLE was only on the nonpayment of his of another, and workers who are paid by results as determined by the Secretary of Labor in
overtime pay. appropriate regulations.

Also, petitioners maintain that Lebatique, as a driver, is not entitled to overtime pay since he is a "Field personnel" shall refer to non-agricultural employees who regularly perform their duties away
field personnel whose time outside the company premises cannot be determined with reasonable from the principal place of business or branch office of the employer and whose actual hours of work
certainty. According to petitioners, the drivers do not observe regular working hours unlike the other in the field cannot be determined with reasonable certainty.
office employees. The drivers may report early in the morning to make their deliveries or in the
afternoon, depending on the production of animal feeds and the traffic conditions. Petitioners also In Auto Bus Transport Systems, Inc. v. Bautista, 12 this Court emphasized that the definition of a
aver that Lebatique worked for less than eight hours a day.8 "field personnel" is not merely concerned with the location where the employee regularly performs
his duties but also with the fact that the employee’s performance is unsupervised by the employer.
Lebatique for his part insists that he was illegally dismissed and was not merely suspended. He We held that field personnel are those who regularly perform their duties away from the principal
argues that he neither refused to work nor abandoned his job. He further contends that place of business of the employer and whose actual hours of work in the field cannot be determined
abandonment of work is inconsistent with the filing of a complaint for illegal dismissal. He also claims with reasonable certainty. Thus, in order to determine whether an employee is a field employee, it
that he is not a field personnel, thus, he is entitled to overtime pay and service incentive leave pay. is also necessary to ascertain if actual hours of work in the field can be determined with reasonable
certainty by the employer. In so doing, an inquiry must be made as to whether or not the employee’s
After consideration of the submission of the parties, we find that the petition lacks merit. We are in time and performance are constantly supervised by the employer.13
agreement with the decision of the Court of Appeals sustaining that of the Labor Arbiter.
As correctly found by the Court of Appeals, Lebatique is not a field personnel as defined above for
It is well settled that in cases of illegal dismissal, the burden is on the employer to prove that the the following reasons: (1) company drivers, including Lebatique, are directed to deliver the goods
termination was for a valid cause.9 In this case, petitioners failed to discharge such burden. at a specified time and place; (2) they are not given the discretion to solicit, select and contact
Petitioners aver that Lebatique was merely suspended for one day but he abandoned his work prospective clients; and (3) Far East issued a directive that company drivers should stay at the
thereafter. To constitute abandonment as a just cause for dismissal, there must be: (a) absence client’s premises during truck-ban hours which is from 5:00 to 9:00 a.m. and 5:00 to 9:00
without justifiable reason; and (b) a clear intention, as manifested by some overt act, to sever the p.m.14 Even petitioners admit that the drivers can report early in the morning, to make their
employer-employee relationship.10 deliveries, or in the afternoon, depending on the production of animal feeds. 15 Drivers, like
Lebatique, are under the control and supervision of management officers. Lebatique, therefore, is a
regular employee whose tasks are usually necessary and desirable to the usual trade and business
The records show that petitioners failed to prove that Lebatique abandoned his job. Nor was there
of the company. Thus, he is entitled to the benefits accorded to regular employees of Far East,
a showing of a clear intention on the part of Lebatique to sever the employer-employee relationship.
including overtime pay and service incentive leave pay.
When Lebatique was verbally told by Alexander Uy, the company’s General Manager, to look for
another job, Lebatique was in effect dismissed. Even assuming earlier he was merely suspended for
illegal use of company vehicle, the records do not show that he was afforded the opportunity to Note that all money claims arising from an employer-employee relationship shall be filed within three
explain his side. It is clear also from the sequence of the events leading to Lebatique’s dismissal that years from the time the cause of action accrued; otherwise, they shall be forever barred. 16 Further,
it was Lebatique’s complaint for nonpayment of his overtime pay that provoked the management to if it is established that the benefits being claimed have been withheld from the employee for a period
dismiss him, on the erroneous premise that a truck driver is a field personnel not entitled to overtime longer than three years, the amount pertaining to the period beyond the three-year prescriptive
pay. period is therefore barred by prescription. The amount that can only be demanded by the aggrieved
employee shall be limited to the amount of the benefits withheld within three years before the filing
of the complaint.17
An employee who takes steps to protest his layoff cannot by any stretch of imagination be said to
have abandoned his work and the filing of the complaint is proof enough of his desire to return to
work, thus negating any suggestion of abandonment.11 A contrary notion would not only be illogical Lebatique timely filed his claim for service incentive leave pay, considering that in this situation, the
but also absurd. prescriptive period commences at the time he was terminated.18 On the other hand, his claim
regarding nonpayment of overtime pay since he was hired in March 1996 is a different matter. In
the case of overtime pay, he can only demand for the overtime pay withheld for the period within
It is immaterial that Lebatique had filed a complaint for nonpayment of overtime pay the day he was
three years preceding the filing of the complaint on March 20, 2000. However, we find insufficient
suspended by management’s unilateral act. What matters is that he filed the complaint for illegal
the selected time records presented by petitioners to compute properly his overtime pay. The Labor
dismissal on March 20, 2000, after he was told not to report for work, and his filing was well within
Arbiter should have required petitioners to present the daily time records, payroll, or other
the prescriptive period allowed under the law.
documents in management’s control to determine the correct overtime pay due Lebatique.

On the second issue, Article 82 of the Labor Code is decisive on the question of who are referred to
WHEREFORE, the petition is DENIED for lack of merit. The Decision dated September 30, 2003 of
by the term "field personnel." It provides, as follows:
the Court of Appeals in CA-G.R. SP No. 76196 and its Resolution dated March 15, 2004
ART. 82. Coverage. - The provisions of this title [Working Conditions and Rest Periods] shall
are AFFIRMED with MODIFICATION to the effect that the case is hereby REMANDED to the
apply to employees in all establishments and undertakings whether for profit or not, but not to
Labor Arbiter for further proceedings to determine the exact amount of overtime pay and other
government employees, managerial employees, field personnel, members of the family of the
monetary benefits due Jimmy Lebatique which herein petitioners should pay without further delay.
employer who are dependent on him for support, domestic helpers, persons in the personal service
G.R. No. 79255 January 20, 1992 The petitioner union raises the following issues:
1) Whether or not Nestle's sales personnel are entitled to holiday pay; and
UNION OF FILIPRO EMPLOYEES (UFE), petitioner, 2) Whether or not, concomitant with the award of holiday pay, the divisor should be changed from
vs. 251 to 261 days and whether or not the previous use of 251 as divisor resulted in overpayment
BENIGNO VIVAR, JR., NATIONAL LABOR RELATIONS COMMISSION and NESTLÉ for overtime, night differential, vacation and sick leave pay.
PHILIPPINES, INC. (formerly FILIPRO, INC.), respondents.
The petitioner insists that respondent's sales personnel are not field personnel under Article 82 of
GUTIERREZ, JR., J.: the Labor Code. The respondent company controverts this assertion.

This labor dispute stems from the exclusion of sales personnel from the holiday pay award and the Under Article 82, field personnel are not entitled to holiday pay. Said article defines field personnel
change of the divisor in the computation of benefits from 251 to 261 days. as "non-agritultural 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
On November 8, 1985, respondent Filipro, Inc. (now Nestle Philippines, Inc.) filed with the National
determined with reasonable certainty."
Labor Relations Commission (NLRC) a petition for declaratory relief seeking a ruling on its rights and
obligations respecting claims of its monthly paid employees for holiday pay in the light of the Court's The controversy centers on the interpretation of the clause "whose actual hours of work in the field
decision in Chartered Bank Employees Association v. Ople (138 SCRA 273 [1985]). cannot be determined with reasonable certainty."

Both Filipro and the Union of Filipino Employees (UFE) agreed to submit the case for voluntary It is undisputed that these sales personnel start their field work at 8:00 a.m. after having reported
arbitration and appointed respondent Benigno Vivar, Jr. as voluntary arbitrator. to the office and come back to the office at 4:00 p.m. or 4:30 p.m. if they are Makati-based.

On January 2, 1980, Arbitrator Vivar rendered a decision directing Filipro to: The petitioner maintains that the period between 8:00 a.m. to 4:00 or 4:30 p.m. comprises the
pay its monthly paid employees holiday pay pursuant to Article 94 of the Code, subject only to the sales personnel's working hours which can be determined with reasonable certainty.
exclusions and limitations specified in Article 82 and such other legal restrictions as are provided
for in the Code. The Court does not agree. The law requires that the actual hours of work in the field be reasonably
ascertained. The company has no way of determining whether or not these sales personnel, even if
Filipro filed a motion for clarification seeking (1) the limitation of the award to three years, (2) they report to the office before 8:00 a.m. prior to field work and come back at 4:30 p.m, really
the exclusion of salesmen, sales representatives, truck drivers, merchandisers and medical spend the hours in between in actual field work.
representatives (hereinafter referred to as sales personnel) from the award of the holiday pay, and
(3) deduction from the holiday pay award of overpayment for overtime, night differential, vacation We concur with the following disquisition by the respondent arbitrator:
and sick leave benefits due to the use of 251 divisor. (Rollo, pp. 138-145) The requirement for the salesmen and other similarly situated employees to report for work at the
office at 8:00 a.m. and return at 4:00 or 4:30 p.m. is not within the realm of work in the field as
Petitioner UFE answered that the award should be made effective from the date of effectivity of the defined in the Code but an exercise of purely management prerogative of providing administrative
Labor Code, that their sales personnel are not field personnel and are therefore entitled to holiday control over such personnel. This does not in any manner provide a reasonable level of
pay, and that the use of 251 as divisor is an established employee benefit which cannot be determination on the actual field work of the employees which can be reasonably ascertained. The
diminished. theoretical analysis that salesmen and other similarly-situated workers regularly report for work
at 8:00 a.m. and return to their home station at 4:00 or 4:30 p.m., creating the assumption that
On January 14, 1986, the respondent arbitrator issued an order declaring that the effectivity of the
their field work is supervised, is surface projection. Actual field work begins after 8:00 a.m., when
holiday pay award shall retroact to November 1, 1974, the date of effectivity of the Labor Code. He
the sales personnel follow their field itinerary, and ends immediately before 4:00 or 4:30 p.m.
adjudged, however, that the company's sales personnel are field personnel and, as such, are not when they report back to their office. The period between 8:00 a.m. and 4:00 or 4:30 p.m.
entitled to holiday pay. He likewise ruled that with the grant of 10 days' holiday pay, the divisor comprises their hours of work in the field, the extent or scope and result of which are subject to
should be changed from 251 to 261 and ordered the reimbursement of overpayment for overtime,
their individual capacity and industry and which "cannot be determined with reasonable certainty."
night differential, vacation and sick leave pay due to the use of 251 days as divisor.
This is the reason why effective supervision over field work of salesmen and medical
representatives, truck drivers and merchandisers is practically a physical impossibility.
Both Nestle and UFE filed their respective motions for partial reconsideration. Respondent Arbitrator
Consequently, they are excluded from the ten holidays with pay award. (Rollo, pp. 36-37)
treated the two motions as appeals and forwarded the case to the NLRC which issued a resolution
dated May 25, 1987 remanding the case to the respondent arbitrator on the ground that it has no
Moreover, the requirement that "actual hours of work in the field cannot be determined with
jurisdiction to review decisions in voluntary arbitration cases pursuant to Article 263 of the Labor
reasonable certainty" must be read in conjunction with Rule IV, Book III of the Implementing Rules
Code as amended by Section 10, Batas Pambansa Blg. 130 and as implemented by Section 5 of the
which provides:
rules implementing B.P. Blg. 130.
Rule IV Holidays with Pay
Sec. 1. Coverage — This rule shall apply to all employees except:
However, in a letter dated July 6, 1987, the respondent arbitrator refused to take cognizance of the
(e) Field personnel and other employees whose time and performance is unsupervised by the
case reasoning that he had no more jurisdiction to continue as arbitrator because he had resigned
employer . . . (Emphasis supplied)
from service effective May 1, 1986.

Hence, this petition.


While contending that such rule added another element not found in the law (Rollo, p. 13), the holidays and the employees should reimburse the amounts overpaid by Filipro due to the use of 251
petitioner nevertheless attempted to show that its affected members are not covered by the days' divisor.
abovementioned rule. The petitioner asserts that the company's sales personnel are strictly
supervised as shown by the SOD (Supervisor of the Day) schedule and the company circular dated Arbitrator Vivar's rationale for his decision is as follows:
March 15, 1984 (Annexes 2 and 3, Rollo, pp. 53-55).
. . . The new doctrinal policy established which ordered payment of ten holidays certainly adds to
Contrary to the contention of the petitioner, the Court finds that the aforementioned rule did not or accelerates the basis of conversion and computation by ten days. With the inclusion of ten
add another element to the Labor Code definition of field personnel. The clause "whose time and holidays as paid days, the divisor is no longer 251 but 261 or 262 if election day is counted. This
performance is unsupervised by the employer" did not amplify but merely interpreted and is indeed an extremely difficult legal question of interpretation which accounts for what is claimed
expounded the clause "whose actual hours of work in the field cannot be determined with reasonable as falling within the concept of "solutio indebti."
certainty." The former clause is still within the scope and purview of Article 82 which defines field
When the claim of the Union for payment of ten holidays was granted, there was a consequent
personnel. Hence, in deciding whether or not an employee's actual working hours in the field can be
need to abandon that 251 divisor. To maintain it would create an impossible situation where the
determined with reasonable certainty, query must be made as to whether or not such employee's
employees would benefit with additional ten days with pay but would simultaneously enjoy higher
time and performance is constantly supervised by the employer.
benefits by discarding the same ten days for purposes of computing overtime and night time
The SOD schedule adverted to by the petitioner does not in the least signify that these sales services and considering sick and vacation leave credits. Therefore, reimbursement of such
personnel's time and performance are supervised. The purpose of this schedule is merely to ensure overpayment with the use of 251 as divisor arises concomitant with the award of ten holidays with
that the sales personnel are out of the office not later than 8:00 a.m. and are back in the office not pay. (Rollo, p. 34)
earlier than 4:00 p.m.
The divisor assumes an important role in determining whether or not holiday pay is already included
Likewise, the Court fails to see how the company can monitor the number of actual hours spent in in the monthly paid employee's salary and in the computation of his daily rate. This is the thrust of
field work by an employee through the imposition of sanctions on absenteeism contained in the our pronouncement in Chartered Bank Employees Association v. Ople (supra). In that case, We held:
company circular of March 15, 1984.
It is argued that even without the presumption found in the rules and in the policy instruction, the
The petitioner claims that the fact that these sales personnel are given incentive bonus every quarter company practice indicates that the monthly salaries of the employees are so computed as to
based on their performance is proof that their actual hours of work in the field can be determined include the holiday pay provided by law. The petitioner contends otherwise.
with reasonable certainty.
One strong argument in favor of the petitioner's stand is the fact that the Chartered Bank, in
The Court thinks otherwise. computing overtime compensation for its employees, employs a "divisor" of 251 days. The 251
working days divisor is the result of subtracting all Saturdays, Sundays and the ten (10) legal
The criteria for granting incentive bonus are: (1) attaining or exceeding sales volume based on sales holidays from the total number of calendar days in a year. If the employees are already paid for
target; (2) good collection performance; (3) proper compliance with good market hygiene; (4) good all non-working days, the divisor should be 365 and not 251.
merchandising work; (5) minimal market returns; and (6) proper truck maintenance. (Rollo, p. 190).
In the petitioner's case, its computation of daily ratio since September 1, 1980, is as follows:
The above criteria indicate that these sales personnel are given incentive bonuses precisely because monthly rate x 12 months
of the difficulty in measuring their actual hours of field work. These employees are evaluated by the ———————————
result of their work and not by the actual hours of field work which are hardly susceptible to 251 days
determination.
Following the criterion laid down in the Chartered Bank case, the use of 251 days' divisor by
In San Miguel Brewery, Inc. v. Democratic Labor Organization (8 SCRA 613 [1963]), the Court had respondent Filipro indicates that holiday pay is not yet included in the employee's salary, otherwise
occasion to discuss the nature of the job of a salesman. Citing the case of Jewel Tea the divisor should have been 261.
Co. v. Williams, C.C.A. Okla., 118 F. 2d 202, the Court stated:
The reasons for excluding an outside salesman are fairly apparent. Such a salesman, to a greater It must be stressed that the daily rate, assuming there are no intervening salary increases, is a
extent, works individually. There are no restrictions respecting the time he shall work and he can constant figure for the purpose of computing overtime and night differential pay and commutation
earn as much or as little, within the range of his ability, as his ambition dictates. In lieu of overtime of sick and vacation leave credits. Necessarily, the daily rate should also be the same basis for
he ordinarily receives commissions as extra compensation. He works away from his employer's computing the 10 unpaid holidays.
place of business, is not subject to the personal supervision of his employer, and his employer has
The respondent arbitrator's order to change the divisor from 251 to 261 days would result in a lower
no way of knowing the number of hours he works per day.
daily rate which is violative of the prohibition on non-diminution of benefits found in Article 100 of
While in that case the issue was whether or not salesmen were entitled to overtime pay, the same the Labor Code. To maintain the same daily rate if the divisor is adjusted to 261 days, then the
rationale for their exclusion as field personnel from holiday pay benefits also applies. 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
The petitioner union also assails the respondent arbitrator's ruling that, concomitant with the award salary is P25,100, then dividing such figure by 251 days, his daily rate is P100.00 After the payment
of holiday pay, the divisor should be changed from 251 to 261 days to include the additional 10 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 merely to reflect awareness that precisely because the judiciary is the government organ which
vacation leave benefits, the computation of which are all based on the daily rate, since the daily rate has the final say on whether or not a legislative or executive measure is valid, a period of time
is still the same before and after the grant of holiday pay. may have elapsed before it can exercise the power of judicial review that may lead to a declaration
of nullity. It would be to deprive the law of its quality of fairness and justice then, if there be no
Respondent Nestle's invocation of solutio indebiti, or payment by mistake, due to its use of 251 days recognition of what had transpired prior to such adjudication.
as divisor must fail in light of the Labor Code mandate that "all doubts in the implementation and
interpretation of this Code, including its implementing rules and regulations, shall be resolved in In the language of an American Supreme Court decision: "The actual existence of a statute, prior
favor of labor." (Article 4). Moreover, prior to September 1, 1980, when the company was on a 6- to such a determination of [unconstitutionality], is an operative fact and may have consequences
day working schedule, the divisor used by the company was 303, indicating that the 10 holidays which cannot justly be ignored. The past cannot always be erased by a new judicial declaration.
were likewise not paid. When Filipro shifted to a 5-day working schebule on September 1, 1980, it The effect of the subsequent ruling as to invalidity may have to be considered in various aspects,
had the chance to rectify its error, if ever there was one but did not do so. It is now too late to allege — with respect to particular relations, individual and corporate, and particular conduct, private
payment by mistake. and official." (Chicot County Drainage Dist. v. Baxter States Bank, 308 US 371, 374 [1940]). This
language has been quoted with approval in a resolution in Araneta v. Hill (93 Phil. 1002 [1952])
Nestle also questions the voluntary arbitrator's ruling that holiday pay should be computed from and the decision in Manila Motor Co., Inc. v. Flores (99 Phil. 738 [1956]). An even more recent
November 1, 1974. This ruling was not questioned by the petitioner union as obviously said decision instance is the opinion of Justice Zaldivar speaking for the Court in Fernandez v. Cuerva and Co.
was favorable to it. Technically, therefore, respondent Nestle should have filed a separate petition (21 SCRA 1095 [1967]. (At pp. 434-435)
raising the issue of effectivity of the holiday pay award. This Court has ruled that an appellee who
is not an appellant may assign errors in his brief where his purpose is to maintain the judgment on The "operative fact" doctrine realizes that in declaring a law or rule null and void, undue harshness
other grounds, but he cannot seek modification or reversal of the judgment or affirmative relief and resulting unfairness must be avoided. It is now almost the end of 1991. To require various
unless he has also appealed. (Franco v. Intermediate Appellate Court, 178 SCRA 331 [1989], citing companies to reach back to 1975 now and nullify acts done in good faith is unduly harsh. 1984 is a
La Campana Food Products, Inc. v. Philippine Commercial and Industrial Bank, 142 SCRA 394 fairer reckoning period under the facts of this case.
[1986]). Nevertheless, in order to fully settle the issues so that the execution of the Court's decision
in this case may not be needlessly delayed by another petition, the Court resolved to take up the Applying the aforementioned doctrine to the case at bar, it is not far-fetched that Nestle, relying on
matter of effectivity of the holiday pay award raised by Nestle. the implicit validity of the implementing rule and policy instruction before this Court nullified them,
and thinking that it was not obliged to give holiday pay benefits to its monthly paid employees, may
Nestle insists that the reckoning period for the application of the holiday pay award is 1985 when have been moved to grant other concessions to its employees, especially in the collective bargaining
the Chartered Bank decision, promulgated on August 28, 1985, became final and executory, and not agreement. This possibility is bolstered by the fact that respondent Nestle's employees are among
from the date of effectivity of the Labor Code. Although the Court does not entirely agree with Nestle, the highest paid in the industry. With this consideration, it would be unfair to impose additional
we find its claim meritorious. burdens on Nestle when the non-payment of the holiday benefits up to 1984 was not in any way
attributed to Nestle's fault.
In Insular Bank of Asia and America Employees' Union (IBAAEU) v. Inciong, 132 SCRA 663 [1984],
hereinafter referred to as the IBAA case, the Court declared that Section 2, Rule IV, Book III of the The Court thereby resolves that the grant of holiday pay be effective, not from the date of
implementing rules and Policy Instruction No. 9, issued by the then Secretary of Labor on February promulgation of the Chartered Bank case nor from the date of effectivity of the Labor Code, but from
16, 1976 and April 23, 1976, respectively, and which excluded monthly paid employees from holiday October 23, 1984, the date of promulgation of the IBAA case.
pay benefits, are null and void. The Court therein reasoned that, in the guise of clarifying the Labor
Code's provisions on holiday pay, the aforementioned implementing rule and policy instruction WHEREFORE, the order of the voluntary arbitrator in hereby MODIFIED. The divisor to be used in
amended them by enlarging the scope of their exclusion. The Chartered Bank case reiterated the computing holiday pay shall be 251 days. The holiday pay as above directed shall be computed from
above ruling and added the "divisor" test. October 23, 1984. In all other respects, the order of the respondent arbitrator is hereby AFFIRMED.

However, prior to their being declared null and void, the implementing rule and policy instruction
enjoyed the presumption of validity and hence, Nestle's non-payment of the holiday benefit up to
the promulgation of the IBAA case on October 23, 1984 was in compliance with these presumably
valid rule and policy instruction.

In the case of De Agbayani v. Philippine National Bank, 38 SCRA 429 [1971], the Court discussed
the effect to be given to a legislative or executive act subsequently declared invalid:

. . . It does not admit of doubt that prior to the declaration of nullity such challenged legislative
or executive act must have been in force and had to be complied with. This is so as until after the
judiciary, in an appropriate case, declares its invalidity, it is entitled to obedience and respect.
Parties may have acted under it and may have changed their positions. What could be more fitting
than that in a subsequent litigation regard be had to what has been done while such legislative or
executive act was in operation and presumed to be valid in all respects. It is now accepted as a
doctrine that prior to its being nullified, its existence as a fact must be reckoned with. This is
G.R. No. 112574 October 8, 1998 I. THE RESPONDENT COMMISSION PALPABLY ERRED IN RULING AND SUSTAINING THE VIEW
THAT FISHING CREW MEMBERS. LIKE FERMIN AGAO, JR., CANNOT BE CLASSIFIED AS FIELD
MERCIDAR FISHING CORPORATION represented by its President DOMINGO B. PERSONNEL UNDER ARTICLE 82 OF THE LABOR CODE.
NAVAL, petitioner, II. THE RESPONDENT COMMISSION ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO
vs. LACK OF JURISDICTION WHEN IT UPHELD THE FINDINGS OF THE LABOR ARBITER THAT HEREIN
NATIONAL LABOR RELATIONS COMMISSION and FERMIN AGAO, JR., respondents. PETITIONER HAD CONSTRUCTIVELY DISMISSED FERMIN AGAO, JR., FROM EMPLOYMENT.

MENDOZA, J.: The petition has no merit.

This is a petition for certiorari to set aside the decision, dated August 30, 1993, of the National Labor Art. 82 of the Labor Code provides:
Relations Commission dismissing the appeal of petitioner Mercidar Fishing Corporation from the
decision of the Labor Arbiter in NLRC NCR Case No. 09-05084-90, as well as the resolution dated Art. 82. Coverage. — The provisions of this Title [Working Conditions and Rest Periods] shall apply
October 25, 1993, of the NLRC denying reconsideration. to employees in all establishments and undertakings whether for profit or not, but not to
government employees, field personnel, members of the family of the employer who are
This case originated from a complaint filed on September 20, 1990 by private respondent Fermin dependent on him for support, domestic helpers, persons in the personal service of another, and
Agao, Jr. against petitioner for illegal dismissal, violation of P.D. No. 851, and non-payment of five workers who are paid by results as determined by the Secretary of Labor in appropriate
days service incentive leave for 1990. Private respondent had been employed as a "bodegero" or regulations.
ship's quartermaster on February 12, 1988. He complained that he had been constructively
dismissed by petitioner when the latter refused him assignments aboard its boats after he had "Field personnel" shall refer to non-agricultural employees who regularly perform their duties away
reported to work on May 28, 1990.1 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.
Private respondent alleged that he had been sick and thus allowed to go on leave without pay for
one month from April 28, 1990 but that when he reported to work at the end of such period with a Petitioner argues essentially that since the work of private respondent is performed away from its
health clearance, he was told to come back another time as he could not be reinstated immediately. principal place of business, it has no way of verifying his actual hours of work on the vessel. It
Thereafter, petitioner refused to give him work. For this reason, private respondent asked for a contends that private respondent and other fishermen in its employ should be classified as "field
certificate of employment from petitioner on September 6, 1990. However, when he came back for personnel" who have no statutory right to service incentive leave pay.
the certificate on September 10, petitioner refused to issue the certificate unless he submitted his
resignation. Since private respondent refused to submit such letter unless he was given separation In the case of Union of Pilipro Employees (UFE) v. Vicar, 5 this Court explained the meaning of the
pay, petitioner prevented him from entering the premises. 2 phrase "whose actual hours of work in the field cannot be determined with reasonable certainty" in
Art. 82 of the Labor Code, as follows:
Petitioner, on the other hand, alleged that it was private respondent who actually abandoned his
work. It claimed that the latter failed to report for work after his leave had expired and was, in fact, Moreover, the requirement that "actual hours of work in the field cannot be determined with
absent without leave for three months until August 28, 1998. Petitioner further claims that, reasonable certainty" must be read in conjunction with Rule IV, Book III of the Implementing
nonetheless, it assigned private respondent to another vessel, but the latter was left behind on Rules which provides:
September 1, 1990. Thereafter, private respondent asked for a certificate of employment on Rule IV Holidays with Pay
September 6 on the pretext that he was applying to another fishing company. On September 10, Sec. 1. Coverage — This rule shall apply to all employees except:
1990, he refused to get the certificate and resign unless he was given separation pay. 3 (e) Field personnel and other employees whose time and performance is unsupervised by the
employer . . . (Emphasis supplied).
On February 18, 1992, Labor Arbiter Arthur L. Amansec rendered a decision disposing of the case
as follows: While contending that such rule added another element not found in the law (Rollo, p. 13), the
ACCORDINGLY, respondents are ordered to reinstate complainant with backwages, pay him his petitioner nevertheless attempted to show that its affected members are not covered by the
13th month pay and incentive leave pay for 1990. abovementioned rule. The petitioner asserts that the company's sales personnel are strictly
All other claims are dismissed. supervised as shown by the SOD (Supervisor of the Day) schedule and the company circular dated
March 15, 1984 (Annexes 2 and 3, Rollo, pp. 53-55).
Petitioner appealed to the NLRC which, on August 30, 1993, dismissed the appeal for lack of merit.
The NLRC dismissed petitioner's claim that it cannot be held liable for service incentive leave pay by Contrary to the contention of the petitioner, the Court finds that the aforementioned rule did not
fishermen in its employ as the latter supposedly are "field personnel" and thus not entitled to such add another element to the Labor Code definition of field personnel. The clause "whose time and
pay under the Labor Code.4 performance is unsupervised by the employer" did not amplify but merely interpreted and
expounded the clause "whose actual hours of work in the field cannot be determined with
The NLRC likewise denied petitioner's motion for reconsideration of its decision in its order dated reasonable certainty." The former clause is still within the scope and purview of Article 82 which
October 25, 1993. defines field personnel. Hence, in deciding whether or not an employee's actual working hours in
the field can be determined with reasonable certainty, query must be made as to whether or not
Hence, this petition. Petitioner contends: such employee's time and performance is constantly supervised by the employer. 6
Accordingly, it was held in the aforementioned case that salesmen of Nestle Philippines, Inc. were G.R. No. 211141
field personnel:
HILARIO DASCO, REYMIR PARAFINA, RICHARD PARAFINA, EDILBERTO ANIA, MICHAEL
It is undisputed that these sales personnel start their field work at 8:00 a.m. after having reported
ADANO, JAIME BOLO, RUBEN E. GULA, ANTONIO CUADERNO and JOVITO
to the office and come back to the office at 4:00 p.m. or 4:30 p.m. if they are Makati-based.
CATANGUI, Petitioners,
vs.
The petitioner maintains that the period between 8:00 a.m. to 4:00 or 4:30 p.m. comprises the
PHILTRANCO SERVICE ENTERPRISES INC./CENTURION SOLANO,Manager, Respondents.
sales personnel's working hours which can be determined with reasonable certainty.

The Court does not agree. The law requires that the actual hours of work in the field be reasonably REYES, J.:
ascertained. The company has no way of determining whether or not these sales personnel, even
if they report to the office before 8:00 a.m. prior to field work and come back at 4:30 p.m., really This appeal by petition for review on certiorari1 seeks to annul and set aside the Decision2 dated
spend the hours in between in actual field work.7 August 30, 2013 and Resolution3 dated January 28, 2014 of the Court of Appeals (CA) in CA-G.R.
SP No. 126210, which nullified and set aside the Decision 4 dated February 22, 2012 and
In contrast, in the case at bar, during the entire course of their fishing voyage, fishermen employed
Resolution5 dated May 30, 2012 of the National Labor Relations Commission (NLRC) in NLRC-NCR
by petitioner have no choice but to remain on board its vessel. Although they perform non-
Case No. 07-10173-11, and reinstated the Decision6 dates October 17, 2011 of the Labor Arbiter
agricultural work away from petitioner's business offices, the fact remains that throughout the
(LA), dismissing the monetary claims of Hilario Dasco, Reymir Parafina, Richard Parafina, Edilberto
duration of their work they are under the effective control and supervision of petitioner through the
Ania, Michael Adano, Jaime Bolo, Ruben E. Gula, Antonio Cuaderno and Jovito Catangui (petitioners).
vessel's patron or master as the NLRC correctly held. 8

Neither did petitioner gravely abuse its discretion in ruling that private respondent had constructively The Facts
been dismissed by petitioner. Such factual finding of both the NLRC and the Labor Arbiter is based
not only on the pleadings of the parties but also on a medical certificate of fitness which, contrary This case stemmed from a complaint7 for regularization, underpayment of wages, non-payment of
to petitioner's claim private respondent presented when he reported to work on May 28, 1990.9 As service incentive leave (SIL) pay, and attorney’s fees, filed by the petitioners against Philtranco
the NLRC held: Service Enterprises Inc., (PSEI), a domestic corporation engaged in providing public utility
Anent grounds (a) and (b) of the appeal, the respondent, in a nutshell, would like us to believe transportation, and its Manager, Centurion Solano (respondents).
that the Arbiter abused his discretion (or seriously erred in his findings of facts) in giving credence
to the factual version of the complainant. But it is settled that "(W)hen confronted with conflicting On various dates from 2006 to 2010, the petitioners were employed by the respondents as bus
versions of factual matters," the Labor Arbiter has the "discretion to determine which party drivers and/or conductors with travel routes of Manila (Pasay) to Bicol, Visayas and Mindanao,
deserves credence on the basis of evidence received." [Gelmart Industries (Phils.), Inc. vs. and vice versa.8
Leogardo, 155 SCRA 403, 309, L-70544, November 5, 1987]. And besides, it is settled in this
jurisdiction that "to constitute abandonment of position, there must be concurrence of the intention
On July 4, 2011, the petitioners filed a case against the respondents alleging that: (1) they were
to abandon and some overt acts from which it may be inferred that the employee concerned has
already qualified for regular employment status since they have been working with the respondents
no more interest in working" (Dagupan Bus Co., Inc. vs. NLRC, 191 SCRA 328), and that the filing
for several years; (2) they were paid only P404.00 per round trip, which lasts from two to five days,
of the complaint which asked for reinstatement plus backwages (Record, p. 20) is inconsistent
without overtime pay and below the minimum wage rate; (3) they cannot be considered as field
with respondents' defense of abandonment (Hua Bee Shirt Factory vs. NLRC, 188 SCRA 586). 10
personnel because their working hours are controlled by the respondents from dispatching to end
It is trite to say that the factual findings of quasi-judicial bodies are generally binding as long as point and their travel time is monitored and measured by the distance because they are in the
they are supported substantially by evidence in the record of the case. 11 This is especially so where, business of servicing passengers where time is of the essence; and (4) they had not been given
as here, the agency and its subordinate who heard the case in the first instance are in full agreement their yearly five-day SIL since the time they were hired by the respondents. 9
as to the facts. 12
In response, the respondents asserted that: (1) the petitioners were paid on a fixed salary rate of
As regards the labor arbiter's award which was affirmed by respondent NLRC, there is no reason to P0.49 centavos per kilometer run, or minimum wage, whichever is higher; (2) the petitioners are
apply the rule that reinstatement may not be ordered if, as a result of the case between the parties, seasonal employees since their contracts are for a fixed period and their employment was dependent
their relation is strained. 13 Even at this late stage of this dispute, petitioner continues to reiterate on the exigency of the extraordinary public demand for more buses during peak months of the year;
its offer to reinstate private respondent. 14 and (3) the petitioners are not entitled to overtime pay and SIL pay because they are field personnel
whose time outside the company premises cannot be determined with reasonable certainty since
WHEREFORE, the petition is DISMISSED. they ply provincial routes and are left alone in the field unsupervised.10

Ruling of the LA

On October 17, 2011, the LA rendered a Decision11 in favor of the respondents but declared the
petitioners as regular employees of the respondents. 12 The LA held that the respondents were able
to prove that the petitioners were paid on a fixed salary of P0.49 per kilometer run, or minimum Aggrieved by the foregoing disquisition, the petitioners moved for reconsideration 26 but it was denied
wage, whichever is higher. The LA also found that the petitioners are not entitled to holiday pay and by the CA in its Resolution27 dated January 28, 2014. Hence, the present petition for review
SIL pay because they are considered as field personnel. 13 on certiorari.

Dissatisfied with the LA’s decision, the petitioners interposed a Partial Appeal14 filed on December 8, The Issue
2011 before the NLRC.
The main issue in this case is whether the petitioners as bus drivers and/ or conductors are field
Ruling of the NLRC personnel, and thus entitled to overtime pay and SIL pay.28

In a Decision15 dated February 22, 2012, the NLRC granted the petitioners’ appeal and modified the Ruling of the Court
LA’s decision, the dispositive part of which reads:
WHEREFORE, the premises considered, the Partial Appeal is GRANTED. The Decision of the [LA] The petition is impressed with merit.
dated October 17, 2011 is hereby MODIFIED in that [PSEI] is directed to pay [the petitioners]
wage differentials covering a period of three (3) years counted backwards from the time they filed
Again, the Court reiterates that as a rule, it is not a trier of facts and this applies with greater force
their complaint against respondents.
in labor cases.1avvphi1 Hence, factual findings of quasi-judicial bodies like the NLRC, particularly
when they coincide with those of the LA and if supported by substantial evidence, are accorded
The NLRC held that the petitioners are not field personnel considering that they ply specific routes respect and even finality by this Court. But where the findings of the NLRC and the LA are
with fixed time schedules determined by the respondents; thus, they are entitled to minimum wage, contradictory, as in the present case, this Court may delve into the records and examine for itself
SIL pay, and overtime benefits.17 With regard to the respondents’ claim that the petitioners have the questioned findings.29
fixed term contract, the NLRC concurred with the findings of the LA that the respondents failed to
show any document, such as employment contracts and employment records, that would show the
Nevertheless, the facts and the issues surrounding this petition are no longer novel for this Court.
dates of hiring, as well as the fixed period agreed upon.18
The determination of whether bus drivers and/or conductors are considered as field personnel was
already threshed out in the case of Auto Bus Transport Systems, Inc. v. Bautista, 30 where the Court
The respondents filed a Motion for Reconsideration19 on March 12, 2012 but it was denied in a explained that:
Resolution20 dated May 30, 2012; hence, they filed a Petition for Certiorari21 before the CA. 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
Meanwhile, during the pendency of this case before the CA, the petitioners filed a motion for issuance office and whose hours and days of work cannot be determined with reasonable certainty; hence,
of writ of execution to enforce the NLRC decision. Accordingly, a Writ of Execution dated November they are paid specific amount for rendering specific service or performing specific work. If required
6, 2012 was issued. By the virtue of such writ, two units of buses owned by PSEI were levied and to be at specific places at specific times, employees including cannot be said to be field personnel
sold in a public auction, for the amount of P600,000.00. Thereafter, a corresponding Sheriff’s despite the fact that they are performing work away from the principal office of the employee.
Certificate of Sale was issued.22
x x x At this point, it is necessary to stress that the definition of a "field personnel" is not merely
Ruling of the CA concerned with the location where the employee regularly performs is unsupervised by the employer.
As discussed above, field personnel are those who regularly perform their duties away from the
The CA, in its Decision23 dated August 30, 2013, reversed and set aside the NLRC rulings and principal place of business of the employer and whose actual hours of work in the field cannot be
reinstated the LA’s decision. Consequently, the writ of execution, levy, auction sale and certificate determined with reasonable certainty. Thus, in order to conclude whether an employee is a field
of sale of PSEI’s properties were declared null and void. The petitioners and the NLRC Sheriff were employee, it is also necessary to ascertain if actual hours of work in the field can be determined with
directed to return the subject properties or turn over the monetary value thereof to the reasonable certainty by the employer. In so doing, an inquiry must be made as to whether or not
respondents.24 the employee’s time and performance are constantly supervised by the employer.31

In overturning the NLRC’s decision, the CA considered the petitioners as field workers and, on that Guided by the foregoing norms, the NLRC properly concluded that the petitioners
basis, denied their claim for benefits, such as overtime pay and SIL pay. According to the CA, there
was no way for the respondents to supervise the petitioners on their job. The petitioners are Are not field personnel but regular employees who perform tasks usually necessary and desirable to
practically on their own in plying the routes in the field, as in fact, they can deviate from the fixed the respondents’ business. Evidently, the petitioners are not field personnel as defined above and
routes, take short cuts, make detours, and take breaks, among others. The petitioners work time the NLRC’s finding in this regard is supported by the established facts of this case: (1) the petitioners,
and performance are not constantly supervised by the respondents, thus making them field as bus drivers and/or conductors, are directed to transport their passengers at a specified time and
personnel.25 place; (2) they are not given the discretion to select and contract with prospective passengers; (3)
their actual work hours could be determined with reasonable certainty, as well as their average trips
per month; and (4) the respondents supervised their time and performance of duties.
In order to monitor their drivers and/or conductors, as well as the passengers and the bus itself, the G.R. No. 120473 June 23, 1999
bus companies put checkers, who are assigned at tactical places along the travel routes that are
plied by their buses. The drivers and/or conductors are required to be at the specific bus terminals ULTRA VILLA FOOD HAUS, and/or ROSIE TIO, petitioners,
at a specified time. In addition, there are always dispatchers in each and every bus terminals, who vs.
supervise and ensure prompt departure at specified times and arrival at the estimated proper time. RENATO GENISTON, NATIONAL LABOR RELATIONS COMMISSION PRESIDING
Obviously, these drivers and/or conductors cannot be considered as field personnel because they COMMISSIONER (4TH DIVISION), respondents.
are under control and constant supervision of the bus companies while in the performance of their
work.
This special civil action for certiorari stems from a complaint for illegal dismissal filed by Renato
Geniston, private respondent herein, against the Ultra Villa Food Haus restaurant and/or its alleged
As correctly observed by the NLRC: owner Rosie Tio. Private respondent alleged that he was employed as a "do it all guy." acting as
[I]t is undisputed that [the petitioners] as bus drivers/conductors ply specific routes of [PSEI], x waiter, driver, and maintenance man, in said restaurant. His employment therein spanned from
x x averaging 2 to 5 days per round trip. They follow fixed time schedules of travel and follow the March 1, 1989 until he was dismissed on May 13, 1992. For his services, private respondent was
designated route of [PSEI]. Thus, in carrying out their functions as bus drivers/conductors, they paid P60.00 in 1989, P70.00 in 1990, P80.00 in 1991 and P90.00 when he was dismissed in 1992.
are not at liberty to deviate from the fixed time schedules for departure or arrival or change the
routes other than those specifically designated for [PSEI], in accordance with the franchise granted
During the elections of May 11, 1992, private respondent acted as a Poll Watcher for the National
to the [PSEI], as a public utility provider. In other words, [the petitioners] are clearly under the
Union of Christian Democrats. The counting of votes lasted until 3:00 p.m. the next day, May 12.
strict supervision and control of [PSEI] in the performance of their functions otherwise the latter
Private respondent did not report for work on both days on account of his poll-watching.
will not be able to carry out its business as public utility service provider in accordance with its
franchise.32
Upon arriving home on May 12, private respondent discovered that Tio had phoned his mother that
morning. Tio allegedly gave his mother "an inscrutable verbal lashing," and informed the latter that
The Court agrees with the above-quoted findings of the NLRC. Clearly, the petitioners, as bus drivers
private respondent was dismissed from work. On May 13, 1992, private respondent went to Tio's
and/or conductors, are left alone in the field with the duty to comply with the conditions of the
residence to plead his case only to be subjected to a "brow beating" by Tio who even attempted to
respondents’ franchise, as well as to take proper care and custody of the bus they are using. Since
force him to sign a resignation letter.
the respondents are engaged in the public utility business, the petitioners, as bus drivers and/or
conductors, should be considered as regular employees of the respondents because they perform
tasks which are directly and necessarily connected with the respondents’ business. Thus, they are Private respondent prayed that the Labor Arbiter order petitioner Tio to pay him overtime pay,
consequently entitled to the benefits accorded to regular employees of the respondents, including premium pay, holiday pay, service incentive leave pay, salary differential and 13th month pay. He
overtime pay and SIL pay. likewise prayed for reinstatement plus backwages or, in the alternative, separation pay, as well as
moral damages, exemplary damages and attorney's fees.

WHEREFORE, the petition is GRANTED. The Decision dated August 30, 2013 and Resolution dated
January 28, 2014 of the Court of Appeals in CA-G.R. SP No. 126210 are REVERSED and SET Petitioner Rosie Tio, on the other hand, maintained that private respondent was her personal driver,
ASIDE. The Decision dated February 22, 2012 and Resolution dated May 30, 2012 of the National not an employee of the Ultra Villa Food Haus. As petitioner's personal driver, private respondent was
Labor Relations Commission in NLRC-NCR Case No. 07-10173-11 are REINSTATED. required to report for work at 7:00 a.m. to drive petitioner to Mandaue City where petitioner worked
as the Manager of the CFC Corporation. Accordingly, private respondent was paid P65.00 a day
which was gradually increased to P70.00 then to P90.00. Private respondent was likewise given free
meals as well as 13th month pay at the end of the year. Petitioner denied dismissing private
respondent whom she claimed abandoned his job.

Though well aware that May 12, 1992 was a holiday, petitioner called up private respondent that
day to ask him to report for work as she had some important matters to attend to. Private
respondent's wife, however, coldly told petitioner that private respondent was helping in the
counting of ballots. Petitioner was thus forced to hire another driver to replace private respondent.
Private respondent came back a week after but only to collect his salary.

The Labor Arbiter found that private respondent was indeed petitioner's personal driver. Private
respondent's claim that he was an employee of the Ultra Villa Food Haus was deemed by the Labor
Arbiter to be a mere afterthought, considering that:
. . . . In his verified complaint, complainant states that the nature of his work position was a driver.
If it [were] true that he was made to perform these functions as a waiter, it would be incongruous
with the position of a driver. The nature of the position of a waiter is one that requires him to be
at the place of work at all times while that of a driver, complainant had to be away from the
restaurant at all times. At any rate, an admission is made that he was only a personal driver of The respondents are likewise ordered to pay the complainant his overtime pay, holiday pay,
the individual respondent.1 premium pay for holiday and rest day, 13th month pay, and service incentive leave covering the
period from October 28, 1990 to May 10, 1992.
The "admission" referred to above is contained in the mandatory conference order issued by the
Labor Arbiter on January 10, 1994, to wit: Complainant's backwages up to the time of this Decision and his other monetary claims as
computed by Nazarina C. Cabahug, Fiscal Examiner II of the Commission are the following:
Also on this date, the following matters were threshed out:
That complainant started his employment with the individual respondent as the latter's personal SUMMARY
1) Backwages P 14,130.00
driver on March 1, 1989 and the last day of his service was on May 13, 1992;2 2) Overtime Pay P 22,060.00
3) Holiday Pay; Premium pay for Holiday P 1,554.00
4) Premium Pay for Rest Day P 1,683.00
The Labor Arbiter concluded that private respondent, being a personal driver, was not entitled to 5) 13th Month Pay P 5,484.55
overtime pay, premium pay, service incentive leave pay and 13th month pay. Private respondent's 6) Service Incentive Leave P 400.00
TOTAL P 45,311.55
claim for salary differential was likewise denied since he "received a daily salary of P90.00 which is
more than that set by law."3
Acting on the parties' respective motions for reconsideration, the NLRC granted private respondent
Neither was private respondent awarded separation pay. While the hiring of a substitute driver separation pay in lieu of reinstatement on account of the establishment's closure but denied his
amounted to a constructive dismissal, the Labor Arbiter ruled that the same was justified in view of prayer for moral, actual and exemplary damages, and attorney's fees. The NLRC also denied
petitioner's "dire need" for the services of a driver. petitioner's motion, reiterating its earlier ruling that private respondent was an employee of the Ultra
Villa Food Haus.

The Labor Arbiter, however, noted that petitioner failed to comply with procedural due process in
dismissing private respondent and thus ordered the former to indemnify the latter the amount of Two issues are thus presented before this Court:
P1,000.00. The dispositive portion of the Labor Arbiter's decision states: (1) Whether private respondent was an employee of the Ultra Villa Food Haus or the personal
WHEREFORE in the light of the foregoing premises, judgment is rendered finding complainant's driver of petitioner; and
dismissal for a valid cause. Complaint is hereby ordered dismissed. However, respondent is (2) Whether private respondent was illegally dismissed from employment.
directed to indemnify complainant the amount of P1,000.00 for failure to observe the due process
requirement before dismissing the complainant. I

Both parties appealed the decision of the Labor Arbiter to the National Labor Relations Commission The Solicitor General, in his "Manifestation and Motion In Lieu of Comment," agrees with petitioner's
(NLRC). submission that private respondent was her personal driver.6

Petitioner questioned the Labor Arbiter's decision insofar as it required her to pay private respondent We find that private respondent was indeed the personal driver of petitioner, and not an employee
the amount of P1.000.00. Petitioner maintained that private respondent abandoned his job, and was of the Ultra Villa Food Haus. There is substantial evidence to support such conclusion, namely:
not constructively dismissed as found by the Labor Arbiter. Petitioner concluded that she could not (1) Private respondent's admission during the mandatory conference that he was petitioner's
be held liable for failing to observe procedural due process in dismissing private respondent, there personal driver.7
being no dismissal to speak of. (2) Copies of the Ultra Villa Food Haus payroll which do not contain private respondent's name. 8
(3) Affidavits of Ultra Villa Food Haus employees attesting that private respondent was never an
On the other hand, private respondent denied admitting that he was employed as petitioner's employee of said establishment.9
personal driver. He alleged that what was admitted during the mandatory conference was that he (4) Petitioner Tio's undisputed allegation that she works as the branch manager of the CFC
was made to drive for the manager and his wife (petitioner) on top of his other duties which were Corporation whose office is located in Mandaue City. This would support the Labor Arbiter's
necessary and desirable to petitioner's business. Private respondent likewise maintained his claim observation that private respondent' position as driver would be "incongruous" with his function
that he was unjustly dismissed, contending that his absence on May 11 and 12, 1992 did not warrant as a waiter of Ultra Villa Food Haus. 10
dismissal since those days were official holidays. (5) The Joint Affidavit of the warehouseman and warehouse checker of the CFC Corporation stating
that:

The NLRC found private respondent's arguments meritorious, and ordered petitioner to reinstate
private respondent and to pay him the sum of P45,311.55 in backwages, overtime pay, premium Renato Geniston usually drive[s] Mrs. Tio from her residence to the office. Thereafter, Mr. Geniston
pay for holiday and rest days, 13th month pay, and service incentive pay. Thus: will wait for Mrs. Tio in her car. Most of the time, Renato Geniston slept in the car of Mrs. Tio and
WHEREFORE, the respondents are hereby ordered to reinstate the complainant with backwages will be awakened only when the latter will leave the office for lunch.
fixed for 6 months as he delayed in filing this case.
Mr. Geniston will again drive Mrs. Tio to the office at around 2:00 o'clock in the afternoon and
thereafter the former will again wait for Mrs. Tio at the latter's car until Mrs. Tio will again leave
the office to make her rounds at our branch office at the downtown area. 11
In contrast, private respondent has not presented any evidence other than his self-serving allegation employer-employee relationship as manifested by some over acts, with the second requisites as the
to show that he was employed in the Ultra Villa Food Haus. On this issue, therefore, the evidence more determinative factor.17 The burden of proving abandonment as a just cause for dismissal is on
weighs heavily in petitioner's favor. The Labor Arbiter thus correctly ruled that private respondent the employer.18 Petitioner failed to discharge this burden. The only evidence adduced by petitioner
was petitioner's personal driver and not an employee of the subject establishment. to prove abandonment is her affidavit, the pertinent portion of which states:
On May 12, 1992, a day after the election, complainant was again absent. Since it was a holiday
Accordingly, the terms and conditions of private respondent's employment are governed by Chapter and I have no work on that day, I just did not bother to call up complainant. Although the following
III, Title III, Book III of the Labor Code 12 as well as by the pertinent provisions of the Civil day was still a holiday, I called up complainant to inform him that he has to report for work as I
Code.13 Thus, Article 141 of the Labor Code provides: will report to the office to do some important things there. Unfortunately, complainant's wife
Art. 141. Coverage. — This Chapter shall apply to all persons rendering services in households for instead coldly told me that complainant was fetched by the latter's uncle to help in the counting
compensation. of ballots. I then told his wife to let complainant choose between his job with me or that of election
Domestic or household service" shall mean services in the employers home which is usually watcher. The following day, I was informed again by complainant's wife that he is no longer
necessary or desirable for the maintenance and enjoyment thereof and includes ministering to the interested to work with me as he is earning more as election watcher. I was really disenchanted
personal comfort and convenience of the members of the employers household, including services to know his respon[se] as all of a sudden, I have no driver to drive me to my place of work.
of family drivers. (Emphasis supplied.) Nevertheless, I have no other choice to accept it as I can not also forced him to continue working
with me. Hence, I was really inconvenience for about a week due to the absence of a driver.

Chapter III, Title III, Book III, however, is silent on the grant of overtime pay, holiday pay, premium
pay and service incentive leave to those engaged in the domestic or household service. Complainant then collected his salary after one week's absence. 19

Moreover, the specific provisions mandating these benefits are found in Book III, Title I of the Labor It is quite unbelievable that private respondent would leave a stable and relatively well paying job
Code,14 and Article 82, which defines the scope of the application of these provisions, expressly as petitioner's family driver to work as an election watcher. Though the latter may pay more in a
excludes domestic helpers from its coverage: day, elections in this country are so far in between that it is unlikely that any person would abandon
Art. 82. Coverage. — The provision of this title shall apply to employees in all establishments his job to embark on a career as an election watcher, the functions of which are seasonal and
and undertakings whether for profit or not; but not to government employees, managerial temporary in nature. Consequently, we do not find private respondent to have abandoned his job.
employees, field personnel, members of the family of the employer who are dependent on him His dismissal from petitioner's employ being unjust, petitioner is entitled to an indemnity under
for support, domestic helpers, persons in the personal service of another, and workers who are Article 149 of the Labor Code:20
paid by results as determined by the Secretary of Labor in appropriate regulations. Art. 149. Indemnity for unjust termination of services. — If the period of household service is
The limitations set out in the above article are echoed in Book III of the Omnibus Rules fixed, neither the employer nor the househelper may terminate the contract before the expiration
Implementing the Labor Code.15 of the term, except for a just cause. If the househelper is unjustly dismissed, he or she shall be
paid the compensation already earned plus that for fifteen (15) days by way of indemnity.
If the househelper leaves without justifiable reason he or she shall forfeit any unpaid salary due
Clearly then, petitioner is not obliged by law to grant private respondent any of these benefits.
him or her not exceeding fifteen (15) days. (Emphasis supplied.)

Employing the same line of analysis, it would seem that private respondent is not entitled to 13th
Petitioner likewise concedes that she failed to comply with due process in dismissing private
month pay. The Revised Guidelines on the Implementation of the 13th Month Pay Law also excludes
respondent since private respondent had already abandoned his job. 21 As we have shown earlier
employers of household helpers from the coverage of Presidential Decree No. 851, thus:
however, petitioner's theory of abandonment has no leg to stand on, and with it, her attempts to
justify her failure to accord due process must also fail. Accordingly, private respondent is ordered to
2. Exempted Employers pay private respondent the sum of P1,000.00.22
The following employers are still not covered by P.D. No. 851:
b. Employers of household helpers . . .;
WHEREFORE, the decision of the National Labor Relations Commission is hereby REVERSED and a
new one entered declaring:
Nevertheless, we deem it just to award private respondent 13th month pay in view of petitioner's (1) Private respondent Renato Geniston, the personal driver of petitioner Rosie Tio, and not an
practice of according private respondent such benefit. Indeed, petitioner admitted that she gave employee of the Ultra Villa Food Haus;
private respondent 13th month pay every December.16 (2) The dismissal of private respondent to be without a valid cause and without due process.
Accordingly, petitioner Rosie Tio is ordered to pay private respondent;
II (a) Thirteenth Month Pay to be computed in accordance with the Rules and Regulations, and the
Revised Guidelines, Implementing Presidential Decree No. 851;
We come now to the issue of private respondent's dismissal. Petitioner submits that private (b) Indemnity equal to 15 days of his salary as personal driver at the time of his unjust dismissal;
respondent abandoned his job, referring to work as an election watcher instead. and
(c) Indemnity in the sum of P1,000.00.
We do not agree. To constitute abandonment, two requisites must concur: (1) the failure to report
to work or absence without valid or justifiable reason, and (2) a clear intention to sever the
G.R. No. 94951 April 22, 1991 Under Rule XIII, Section l(b), Book 3 of the Labor Code, as amended, the terms "househelper" or
"domestic servant" are defined as follows:
APEX MINING COMPANY, INC., petitioner, The term "househelper" as used herein is synonymous to the term "domestic servant" and shall
vs. refer to any person, whether male or female, who renders services in and about the employer's
NATIONAL LABOR RELATIONS COMMISSION and SINCLITICA CANDIDO, respondents. home and which services are usually necessary or desirable for the maintenance and enjoyment
thereof, and ministers exclusively to the personal comfort and enjoyment of the employer's
Bernabe B. Alabastro for petitioner.
family.3
Angel Fernandez for private respondent.
The foregoing definition clearly contemplates such househelper or domestic servant who is employed
GANCAYCO, J.: in the employer's home to minister exclusively to the personal comfort and enjoyment of the
employer's family. Such definition covers family drivers, domestic servants, laundry women, yayas,
Is the househelper in the staff houses of an industrial company a domestic helper or a regular
gardeners, houseboys and other similar househelps.
employee of the said firm? This is the novel issue raised in this petition.
The definition cannot be interpreted to include househelp or laundrywomen working in staffhouses
Private respondent Sinclita Candida was employed by petitioner Apex Mining Company, Inc. on May
of a company, like petitioner who attends to the needs of the company's guest and other persons
18, 1973 to perform laundry services at its staff house located at Masara, Maco, Davao del Norte.
availing of said facilities. By the same token, it cannot be considered to extend to then driver,
In the beginning, she was paid on a piece rate basis. However, on January 17, 1982, she was paid
houseboy, or gardener exclusively working in the company, the staffhouses and its premises. They
on a monthly basis at P250.00 a month which was ultimately increased to P575.00 a month.
may not be considered as within the meaning of a "househelper" or "domestic servant" as above-
On December 18, 1987, while she was attending to her assigned task and she was hanging her defined by law.
laundry, she accidentally slipped and hit her back on a stone. She reported the accident to her
The criteria is the personal comfort and enjoyment of the family of the employer in the home of said
immediate supervisor Mila de la Rosa and to the personnel officer, Florendo D. Asirit. As a result of
employer. While it may be true that the nature of the work of a househelper, domestic servant or
the accident she was not able to continue with her work. She was permitted to go on leave for
laundrywoman in a home or in a company staffhouse may be similar in nature, the difference in
medication. De la Rosa offered her the amount of P 2,000.00 which was eventually increased to
their circumstances is that in the former instance they are actually serving the family while in the
P5,000.00 to persuade her to quit her job, but she refused the offer and preferred to return to work.
latter case, whether it is a corporation or a single proprietorship engaged in business or industry or
Petitioner did not allow her to return to work and dismissed her on February 4, 1988.
any other agricultural or similar pursuit, service is being rendered in the staffhouses or within the
On March 11, 1988, private respondent filed a request for assistance with the Department of Labor premises of the business of the employer. In such instance, they are employees of the company or
and Employment. After the parties submitted their position papers as required by the labor arbiter employer in the business concerned entitled to the privileges of a regular employee.
assigned to the case on August 24, 1988 the latter rendered a decision, the dispositive part of which
Petitioner contends that it is only when the househelper or domestic servant is assigned to certain
reads as follows:
aspects of the business of the employer that such househelper or domestic servant may be
WHEREFORE, Conformably With The Foregoing, judgment is hereby rendered ordering the considered as such as employee. The Court finds no merit in making any such distinction. The mere
respondent, Apex Mining Company, Inc., Masara, Davao del Norte, to pay the complainant, to wit: fact that the househelper or domestic servant is working within the premises of the business of the
employer and in relation to or in connection with its business, as in its staffhouses for its guest or
1 Salary: Differential –– P16,289.20 even for its officers and employees, warrants the conclusion that such househelper or domestic
servant is and should be considered as a regular employee of the employer and not as a mere family
2. Emergency Living: Allowance –– 12,430.00 househelper or domestic servant as contemplated in Rule XIII, Section l(b), Book 3 of the Labor
Code, as amended.
3. 13th Month Pay: Differential –– 1,322.32
Petitioner denies having illegally dismissed private respondent and maintains that respondent
4. Separation Pay: (One-month for every year of service [1973-19881) –– 25,119.30 or in the abandoned her work.1âwphi1 This argument notwithstanding, there is enough evidence to show
total of FIFTY FIVE THOUSAND ONE HUNDRED SIXTY ONE PESOS AND 42/100 (P55,161.42). that because of an accident which took place while private respondent was performing her laundry
services, she was not able to work and was ultimately separated from the service. She is, therefore,
Not satisfied therewith, petitioner appealed to the public respondent National Labor Relations
entitled to appropriate relief as a regular employee of petitioner. Inasmuch as private respondent
Commission (NLRC), wherein in due course a decision was rendered by the Fifth Division thereof on
appears not to be interested in returning to her work for valid reasons, the payment of separation
July 20, 1989 dismissing the appeal for lack of merit and affirming the appealed decision. A motion
pay to her is in order.
for reconsideration thereof was denied in a resolution of the NLRC dated June 29, 1990.
WHEREFORE, the petition is DISMISSED and the appealed decision and resolution of public
Hence, the herein petition for review by certiorari, which appopriately should be a special civil action
respondent NLRC are hereby AFFIRMED. No pronouncement as to costs.
for certiorari, and which in the interest of justice, is hereby treated as such.2 The main thrust of the
petition is that private respondent should be treated as a mere househelper or domestic servant and
not as a regular employee of petitioner.

The petition is devoid of merit.


G.R. No. 195466 July 2, 2014 In the April 30, 2009 decision,15 the LA dismissed Macasio’s complaint for lack of merit. The LA gave
credence to David’s claim that he engaged Macasio on "pakyaw" or task basis. The LA noted the
ARIEL L. DAVID, doing business under the name and style "YIELS HOG DEALER," Petitioner, following facts to support this finding: (1) Macasio received the fixed amount of ₱700.00 for every
vs. work done, regardless of the number of hours that he spent in completing the task and of the volume
JOHN G. MACASIO, Respondent. or number of hogs that he had to chop per engagement; (2) Macasio usually worked for only four
hours, beginning from 10:00 p.m. up to 2:00 a.m. of the following day; and (3) the ₱700.00 fixed
wage far exceeds the then prevailing daily minimum wage of ₱382.00. The LA added that the nature
BRION, J.:
of David’s business as hog dealer supports this "pakyaw" or task basis arrangement.

We resolve in this petition for review on certiorari 1 the challenge to the November 22, 2010
The LA concluded that as Macasio was engaged on "pakyaw" or task basis, he is not entitled to
decision2 and the January 31, 2011 resolution3 of the Court of Appeals (CA) in CA-G.R. SP No.
overtime, holiday, SIL and 13th month pay.
116003. The CA decision annulled and set aside the May 26, 2010 decision 4 of the National Labor
Relations Commission (NLRC)5 which, in turn, affirmed the April 30, 2009 Decision6 of the Labor
Arbiter (LA). The LA's decision dismissed respondent John G. Macasio's monetary claims. The NLRC’s Ruling

The Factual Antecedents In its May 26, 2010 decision,16 the NLRC affirmed the LA ruling.17 The NLRC observed that David did
not require Macasio to observe an eight hour work schedule to earn the fixed ₱700.00 wage; and
that Macasio had been performing a non-time work, pointing out that Macasio was paid a fixed
In January 2009, Macasio filed before the LA a complaint 7 against petitioner Ariel L. David, doing
amount for the completion of the assigned task, irrespective of the time consumed in its
business under the name and style "Yiels Hog Dealer," for non-payment of overtime pay, holiday
performance. Since Macasio was paid by result and not in terms of the time that he spent in the
pay and 13th month pay. He also claimed payment for moral and exemplary damages and attorney’s
workplace, Macasio is not covered by the Labor Standards laws on overtime, SIL and holiday pay,
fees. Macasio also claimed payment for service incentive leave (SIL). 8
and 13th month pay under the Rules and Regulations Implementing the 13th month pay law.18

Macasio alleged9 before the LA that he had been working as a butcher for David since January 6,
Macasio moved for reconsideration19 but the NLRC denied his motion in its August 11, 2010
1995. Macasio claimed that David exercised effective control and supervision over his work, pointing
resolution,20 prompting Macasio to elevate his case to the CA via a petition for certiorari. 21
out that David: (1) set the work day, reporting time and hogs to be chopped, as well as the manner
by which he was to perform his work; (2) daily paid his salary of ₱700.00, which was increased from
₱600.00 in 2007, ₱500.00 in 2006 and ₱400.00 in 2005; and (3) approved and disapproved his The CA’s Ruling
leaves. Macasio added that David owned the hogs delivered for chopping, as well as the work tools
and implements; the latter also rented the workplace. Macasio further claimed that David employs In its November 22, 2010 decision,22 the CA partly granted Macasio’s certiorari petition and reversed
about twenty-five (25) butchers and delivery drivers. the NLRC’s ruling for having been rendered with grave abuse of discretion.

In his defense,10 David claimed that he started his hog dealer business in 2005 and that he only has While the CA agreed with the LAand the NLRC that Macasio was a task basis employee, it
ten employees. He alleged that he hired Macasio as a butcher or chopper on "pakyaw" or task basis nevertheless found Macasio entitled to his monetary claims following the doctrine laid down in
who is, therefore, not entitled to overtime pay, holiday pay and 13th month pay pursuant to the Serrano v. Severino Santos Transit.23 The CA explained that as a task basis employee, Macasio is
provisions of the Implementing Rules and Regulations (IRR) of the Labor Code. David pointed out excluded from the coverage of holiday, SIL and 13th month pay only if he is likewise a "field
that Macasio: (1) usually starts his work at 10:00 p.m. and ends at 2:00 a.m. of the following day personnel." As defined by the Labor Code, a "field personnel" is one who performs the work away
or earlier, depending on the volume of the delivered hogs; (2) received the fixed amount of ₱700.00 from the office or place of work and whose regular work hours cannot be determined with reasonable
per engagement, regardless of the actual number of hours that he spent chopping the delivered certainty. In Macasio’s case, the elements that characterize a "field personnel" are evidently lacking
hogs; and (3) was not engaged to report for work and, accordingly, did not receive any fee when no as he had been working as a butcher at David’s "Yiels Hog Dealer" business in Sta. Mesa, Manila
hogs were delivered. under David’s supervision and control, and for a fixed working schedule that starts at 10:00 p.m.

Macasio disputed David’s allegations.11 He argued that, first, David did not start his business only in Accordingly, the CA awarded Macasio’s claim for holiday, SIL and 13th month pay for three years,
2005. He pointed to the Certificate of Employment12 that David issued in his favor which placed the with 10% attorney’s fees on the total monetary award. The CA, however, denied Macasio’s claim for
date of his employment, albeit erroneously, in January 2000. Second, he reported for work every moral and exemplary damages for lack of basis.
day which the payroll or time record could have easily proved had David submitted them in evidence.
David filed the present petition after the CA denied his motion for reconsideration 24 in the CA’s
Refuting Macasio’s submissions,13 David claims that Macasio was not his employee as he hired the January 31, 2011 resolution.25
latter on "pakyaw" or task basis. He also claimed that he issued the Certificate of Employment, upon
Macasio’s request, only for overseas employment purposes. He pointed to the "Pinagsamang The Petition
Sinumpaang Salaysay,"14 executed by Presbitero Solano and Christopher (Antonio Macasio’s co-
butchers), to corroborate his claims.
In this petition,26 David maintains that Macasio’s engagement was on a "pakyaw" or task basis. We partially grant the petition.
Hence, the latter is excluded from the coverage of holiday, SIL and 13th month pay. David reiterates
his submissions before the lower tribunals27 and adds that he never had any control over the manner Preliminary considerations: the Montoya ruling and the factual-issue-bar rule
by which Macasio performed his work and he simply looked on to the "end-result." He also contends
that he never compelled Macasio to report for work and that under their arrangement, Macasio was
In this Rule 45 petition for review on certiorari of the CA’s decision rendered under a Rule 65
at liberty to choose whether to report for work or not as other butchers could carry out his tasks.
proceeding, this Court’s power of review is limited to resolving matters pertaining to any perceived
He points out that Solano and Antonio had, in fact, attested to their (David and Macasio’s)
legal errors that the CA may have committed in issuing the assailed decision. This is in contrast with
established "pakyawan" arrangement that rendered a written contract unnecessary. In as much as
the review for jurisdictional errors, which we undertake in an original certiorari action. In reviewing
Macasio is a task basis employee – who is paid the fixed amount of ₱700.00 per engagement
the legal correctness of the CA decision, we examine the CA decision based on how it determined
regardless of the time consumed in the performance – David argues that Macasio is not entitled to
the presence or absence of grave abuse of discretion in the NLRC decision before it and not on the
the benefits he claims. Also, he posits that because he engaged Macasio on "pakyaw" or task basis
basis of whether the NLRC decision on the merits of the case was correct.32 In other words, we have
then no employer-employee relationship exists between them.
to be keenly aware that the CA undertook a Rule 65 review, not a review on appeal, of the NLRC
decision challenged before it.33
Finally, David argues that factual findings of the LA, when affirmed by the NLRC, attain finality
especially when, as in this case, they are supported by substantial evidence. Hence, David posits
Moreover, the Court’s power in a Rule 45 petition limits us to a review of questions of law raised
that the CA erred in reversing the labor tribunals’ findings and granting the prayed monetary claims.
against the assailed CA decision.34

The Case for the Respondent


In this petition, David essentially asks the question – whether Macasio is entitled to holiday, SIL and
13th month pay. This one is a question of law. The determination of this question of law however is
Macasio counters that he was not a task basis employee or a "field personnel" as David would have intertwined with the largely factual issue of whether Macasio falls within the rule on entitlement to
this Court believe.28 He reiterates his arguments before the lower tribunals and adds that, contrary these claims or within the exception. In either case, the resolution of this factual issue presupposes
to David’s position, the ₱700.00 fee that he was paid for each day that he reported for work does another factual matter, that is, the presence of an employer-employee relationship between David
not indicate a "pakyaw" or task basis employment as this amount was paid daily, regardless of the and Macasio.
number or pieces of hogs that he had to chop. Rather, it indicates a daily-wage method of payment
and affirms his regular employment status. He points out that David did not allege or present any
In insisting before this Court that Macasio was not his employee, David argues that he engaged the
evidence as regards the quota or number of hogs that he had to chop as basis for the "pakyaw" or
latter on "pakyaw" or task basis. Very noticeably, David confuses engagement on "pakyaw" or task
task basis payment; neither did David present the time record or payroll to prove that he worked
basis with the lack of employment relationship. Impliedly, David asserts that their "pakyawan" or
for less than eight hours each day. Moreover, David did not present any contract to prove that his
task basis arrangement negates the existence of employment relationship.
employment was on task basis. As David failed to prove the alleged task basis or "pakyawan"
agreement, Macasio concludes that he was David’s employee. Procedurally, Macasio points out that
David’s submissions in the present petition raise purely factual issues that are not proper for a At the outset, we reject this assertion of the petitioner. Engagement on "pakyaw" or task basis does
petition for review on certiorari. These issues – whether he (Macasio) was paid by result or on not characterize the relationship that may exist between the parties, i.e., whether one of
"pakyaw" basis; whether he was a "field personnel"; whether an employer-employee relationship employment or independent contractorship. Article 97(6) of the Labor Code defines wages as "xxx
existed between him and David; and whether David exercised control and supervision over his work the remuneration or earnings, however designated, capable of being expressed in terms of money,
– are all factual in nature and are, therefore, proscribed in a Rule 45 petition. He argues that the whether fixed or ascertained on a time, task, piece, or commission basis, or other method of
CA’s factual findings bind this Court, absent a showing that such findings are not supported by the calculating the same, which is payable by an employer to an employee under a written or unwritten
evidence or the CA’s judgment was based on a misapprehension of facts. He adds that the issue of contract of employment for work done or to be done, or for services rendered or to be
whether an employer-employee relationship existed between him and David had already been rendered[.]"35 In relation to Article 97(6), Article 10136 of the Labor Code speaks of workers paid by
settled by the LA29 and the NLRC30 (as well as by the CA per Macasio’s manifestation before this results or those whose pay is calculated in terms of the quantity or quality of their work output which
Court dated November 15, 2012),31 in his favor, in the separate illegal case that he filed against includes "pakyaw" work and other non-time work.
David.
More importantly, by implicitly arguing that his engagement of Macasio on "pakyaw" or task basis
The Issue negates employer-employee relationship, David would want the Court to engage on a factual
appellate review of the entire case to determine the presence or existence of that relationship. This
approach however is not authorized under a Rule 45 petition for review of the CA decision rendered
The issue revolves around the proper application and interpretation of the labor law provisions on
under a Rule 65 proceeding.
holiday, SIL and 13th month pay to a worker engaged on "pakyaw" or task basis. In the context of
the Rule 65 petition before the CA, the issue is whether the CA correctly found the NLRC in grave
abuse of discretion in ruling that Macasio is entitled to these labor standards benefits. First, the LA and the NLRC denied Macasio’s claim not because of the absence of an employer-
employee but because of its finding that since Macasio is paid on pakyaw or task basis, then he is
not entitled to SIL, holiday and 13th month pay. Second, we consider it crucial, that in the separate
The Court’s Ruling
illegal dismissal case Macasio filed with the LA, the LA, the NLRC and the CA uniformly found the
existence of an employer-employee relationship.37
In other words, aside from being factual in nature, the existence of an employer-employee In sum, the totality of the surrounding circumstances of the present case sufficiently points to an
relationship is in fact a non-issue in this case. To reiterate, in deciding a Rule 45 petition for review employer-employee relationship existing between David and Macasio.
of a labor decision rendered by the CA under 65, the narrow scope of inquiry is whether the CA
correctly determined the presence or absence of grave abuse of discretion on the part of the NLRC. Macasio is engaged on "pakyaw" or task basis
In concrete question form, "did the NLRC gravely abuse its discretion in denying Macasio’s claims
simply because he is paid on a non-time basis?"
At this point, we note that all three tribunals – the LA, the NLRC and the CA – found that Macasio
was engaged or paid on "pakyaw" or task basis. This factual finding binds the Court under the rule
At any rate, even if we indulge the petitioner, we find his claim that no employer-employee that factual findings of labor tribunals when supported by the established facts and in accord with
relationship exists baseless. Employing the control test, 38 we find that such a relationship exist in the laws, especially when affirmed by the CA, is binding on this Court.
the present case.

A distinguishing characteristic of "pakyaw" or task basis engagement, as opposed to straight-hour


Even a factual review shows that Macasio is David’s employee wage payment, is the non-consideration of the time spent in working. In a task-basis work, the
emphasis is on the task itself, in the sense that payment is reckoned in terms of completion of the
To determine the existence of an employer-employee relationship, four elements generally need to work, not in terms of the number of time spent in the completion of work.45 Once the work or task
be considered, namely: (1) the selection and engagement of the employee; (2) the payment of is completed, the worker receives a fixed amount as wage, without regard to the standard
wages; (3) the power of dismissal; and (4) the power to control the employee’s conduct. These measurements of time generally used in pay computation.
elements or indicators comprise the so-called "four-fold" test of employment relationship. Macasio’s
relationship with David satisfies this test. In Macasio’s case, the established facts show that he would usually start his work at 10:00 p.m.
Thereafter, regardless of the total hours that he spent at the workplace or of the total number of
First, David engaged the services of Macasio, thus satisfying the element of "selection and the hogs assigned to him for chopping, Macasio would receive the fixed amount of ₱700.00 once he
engagement of the employee." David categorically confirmed this fact when, in his "Sinumpaang had completed his task. Clearly, these circumstances show a "pakyaw" or task basis engagement
Salaysay," he stated that "nag apply po siya sa akin at kinuha ko siya na chopper[.]"39 Also, Solano that all three tribunals uniformly found.
and Antonio stated in their "Pinagsamang Sinumpaang Salaysay"40 that "[k]ami po ay nagtratrabaho
sa Yiels xxx na pag-aari ni Ariel David bilang butcher" and "kilalanamin si xxx Macasio na isa ring In sum, the existence of employment relationship between the parties is determined by applying the
butcher xxx ni xxx David at kasama namin siya sa aming trabaho." "four-fold" test; engagement on "pakyaw" or task basis does not determine the parties’ relationship
as it is simply a method of pay computation. Accordingly, Macasio is David’s employee, albeit
Second, David paid Macasio’s wages.Both David and Macasio categorically stated in their respective engaged on "pakyaw" or task basis.
pleadings before the lower tribunals and even before this Court that the former had been paying the
latter ₱700.00 each day after the latter had finished the day’s task. Solano and Antonio also As an employee of David paid on pakyaw or task basis, we now go to the core issue of whether
confirmed this fact of wage payment in their "Pinagsamang Sinumpaang Salaysay." 41 This satisfies Macasio is entitled to holiday, 13th month, and SIL pay.
the element of "payment of wages."

On the issue of Macasio’s entitlement to holiday, SIL and 13th month pay
Third, David had been setting the day and time when Macasio should report for work. This power to
determine the work schedule obviously implies power of control. By having the power to control
The LA dismissed Macasio’s claims pursuant to Article 94 of the Labor Code in relation to Section 1,
Macasio’s work schedule, David could regulate Macasio’s work and could even refuse to give him
Rule IV of the IRR of the Labor Code, and Article 95 of the Labor Code, as well as Presidential Decree
any assignment, thereby effectively dismissing him.
(PD) No. 851. The NLRC, on the other hand, relied on Article 82 of the Labor Code and the Rules
and Regulations Implementing PD No. 851. Uniformly, these provisions exempt workers paid on
And fourth, David had the right and power to control and supervise Macasio’s work as to the means "pakyaw" or task basis from the coverage of holiday, SIL and 13th month pay.
and methods of performing it. In addition to setting the day and time when Macasio should report
for work, the established facts show that David rents the place where Macasio had been performing
In reversing the labor tribunals’ rulings, the CA similarly relied on these provisions, as well as on
his tasks. Moreover, Macasio would leave the workplace only after he had finished chopping all of
Section 1, Rule V of the IRR of the Labor Code and the Court’s ruling in Serrano v. Severino Santos
the hog meats given to him for the day’s task. Also, David would still engage Macasio’s services and
Transit.46 These labor law provisions, when read together with the Serrano ruling, exempt those
have him report for work even during the days when only few hogs were delivered for butchering.
engaged on "pakyaw" or task basis only if they qualify as "field personnel."

Under this overall setup, all those working for David, including Macasio, could naturally be expected
In other words, what we have before us is largely a question of law regarding the correct
to observe certain rules and requirements and David would necessarily exercise some degree of
interpretation of these labor code provisions and the implementing rules; although, to conclude that
control as the chopping of the hog meats would be subject to his specifications. Also, since Macasio
the worker is exempted or covered depends on the facts and in this sense, is a question of fact:
performed his tasks at David’s workplace, David could easily exercise control and supervision over
first, whether Macasio is a "field personnel"; and second, whether those engaged on "pakyaw" or
the former. Accordingly, whether or not David actually exercised this right or power to control is
task basis, but who are not "field personnel," are exempted from the coverage of holiday, SIL and
beside the point as the law simply requires the existence of this power to control 4243 or, as in this
13th month pay.
case, the existence of the right and opportunity to control and supervise Macasio.44
To put our discussion within the perspective of a Rule 45 petition for review of a CA decision rendered benefit by the Secretary of Labor and Employment after considering the viability or financial
under Rule 65 and framed in question form, the legal question is whether the CA correctly ruled that condition of such establishment. [emphases ours]
it was grave abuse of discretion on the part of the NLRC to deny Macasio’s monetary claims simply
because he is paid on a non-time basis without determining whether he is a field personnel or not. Section 1. Coverage. – This rule shall apply to all employees except:
(e) Field personnel and other employees whose performance is unsupervised by the employer
To resolve these issues, we need tore-visit the provisions involved. including those who are engaged on task or contract basis, purely commission basis, or those who
are paid a fixed amount for performing work irrespective of the time consumed in the performance
Provisions governing SIL and holiday pay thereof. [emphasis ours]

Article 82 of the Labor Code provides the exclusions from the coverage of Title I, Book III of the Under these provisions, the general rule is that holiday and SIL pay provisions cover all employees.
Labor Code - provisions governing working conditions and rest periods. To be excluded from their coverage, an employee must be one of those that these provisions
expressly exempt, strictly in accordance with the exemption. Under the IRR, exemption from the
coverage of holiday and SIL pay refer to "field personnel and other employees whose time and
Art. 82. Coverage.— The provisions of [Title I] shall apply to employees in all establishments and
performance is unsupervised by the employer including those who are engaged on task or contract
undertakings whether for profit or not, but not to government employees, managerial employees,
basis[.]" Note that unlike Article 82 of the Labor Code, the IRR on holiday and SIL pay do not exclude
field personnel, members of the family of the employer who are dependent on him for support,
employees "engaged on task basis" as a separate and distinct category from employees classified
domestic helpers, persons in the personal service of another, and workers who are paid by results
as "field personnel." Rather, these employees are altogether merged into one classification of
as determined by the Secretary of Labor in appropriate regulations.
exempted employees.

"Field personnel" shall refer to non-agricultural employees who regularly perform their duties away
Because of this difference, it may be argued that the Labor Code may be interpreted to mean that
from the principal place of business or branch office of the employer and whose actual hours of
those who are engaged on task basis, per se, are excluded from the SIL and holiday payment since
work in the field cannot be determined with reasonable certainty. [emphases and underscores
this is what the Labor Code provisions, in contrast with the IRR, strongly suggest. The arguable
ours]
interpretation of this rule may be conceded to be within the discretion granted to the LA and NLRC
as the quasi-judicial bodies with expertise on labor matters.
Among the Title I provisions are the provisions on holiday pay (under Article 94 of the Labor Code)
and SIL pay (under Article 95 of the Labor Code). Under Article 82,"field personnel" on one hand
However, as early as 1987 in the case of Cebu Institute of Technology v. Ople 49 the phrase "those
and "workers who are paid by results" on the other hand, are not covered by the Title I provisions.
who are engaged on task or contract basis" in the rule has already been interpreted to mean as
The wordings of Article82 of the Labor Code additionally categorize workers "paid by results" and
follows:
"field personnel" as separate and distinct types of employees who are exempted from the Title I
[the phrase] should however, be related with "field personnel" applying the rule on ejusdem
provisions of the Labor Code.
generis that general and unlimited terms are restrained and limited by the particular terms that
they follow xxx Clearly, petitioner's teaching personnel cannot be deemed field personnel which
The pertinent portion of Article 94 of the Labor Code and its corresponding provision in the refers "to non-agricultural employees who regularly perform their duties away from the principal
IRR47 reads: place of business or branch office of the employer and whose actual hours of work in the field
Art. 94. Right to holiday pay. (a) Every worker shall be paid his regular daily wage during regular cannot be determined with reasonable certainty. [Par. 3, Article 82, Labor Code of the Philippines].
holidays, except in retail and service establishments regularly employing less than (10) workers[.] Petitioner's claim that private respondents are not entitled to the service incentive leave benefit
SECTION 1. Coverage. – This Rule shall apply to all employees except: cannot therefore be sustained.
(e)Field personnel and other employees whose time and performance is unsupervised by the
employer including those who are engaged on task or contract basis, purely commission basis,
In short, the payment of an employee on task or pakyaw basis alone is insufficient to exclude one
or those who are paid a fixed amount for performing work irrespective of the time consumed
from the coverage of SIL and holiday pay. They are exempted from the coverage of Title I (including
in the performance thereof. [emphases ours]
the holiday and SIL pay) only if they qualify as "field personnel." The IRR therefore validly qualifies
and limits the general exclusion of "workers paid by results" found in Article 82 from the coverage
On the other hand, Article 95 of the Labor Code and its corresponding provision in the of holiday and SIL pay. This is the only reasonable interpretation since the determination of excluded
IRR48 pertinently provides: workers who are paid by results from the coverage of Title I is "determined by the Secretary of Labor
in appropriate regulations."
Art. 95. Right to service incentive. (a) Every employee who has rendered at least one year of
service shall be entitled to a yearly service incentive leave of five days with pay. The Cebu Institute Technology ruling was reiterated in 2005 in Auto Bus Transport Systems, Inc.,
v. Bautista:
(b) This provision shall not apply to those who are already enjoying the benefit herein provided, A careful perusal of said provisions of law will result in the conclusion that the grant of service
those enjoying vacation leave with pay of at least five days and those employed in establishments incentive leave has been delimited by the Implementing Rules and Regulations of the Labor Code
regularly employing less than ten employees or in establishments exempted from granting this to apply only to those employees not explicitly excluded by Section 1 of Rule V. According to the
Implementing Rules, Service Incentive Leave shall not apply to employees classified as "field
personnel." The phrase "other employees whose performance is unsupervised by the employer" Based on the definition of field personnel under Article 82, we agree with the CA that Macasio does
must not be understood as a separate classification of employees to which service incentive leave not fall under the definition of "field personnel." The CA’s finding in this regard is supported by the
shall not be granted. Rather, it serves as an amplification of the interpretation of the definition of established facts of this case: first, Macasio regularly performed his duties at David’s principal place
field personnel under the Labor Code as those "whose actual hours of work in the field cannot be of business; second, his actual hours of work could be determined with reasonable certainty; and,
determined with reasonable certainty." third, David supervised his time and performance of duties. Since Macasio cannot be considered a
"field personnel," then he is not exempted from the grant of holiday, SIL pay even as he was engaged
The same is true with respect to the phrase "those who are engaged on task or contract basis, purely on "pakyaw" or task basis.
commission basis." Said phrase should be related with "field personnel," applying the rule on
ejusdem generis that general and unlimited terms are restrained and limited by the particular terms Not being a "field personnel," we find the CA to be legally correct when it reversed the NLRC’s ruling
that they follow. dismissing Macasio’s complaint for holiday and SIL pay for having been rendered with grave abuse
of discretion.
The Autobus ruling was in turn the basis of Serrano v. Santos Transit which the CA cited in support
of granting Macasio’s petition. Entitlement to 13th month pay

In Serrano, the Court, applying the rule on ejusdem generis50 declared that "employees engaged on With respect to the payment of 13th month pay however, we find that the CA legally erred in finding
task or contract basis xxx are not automatically exempted from the grant of service incentive leave, that the NLRC gravely abused its discretion in denying this benefit to Macasio.1âwphi1
unless, they fall under the classification of field personnel."51 The Court explained that the phrase
"including those who are engaged on task or contract basis, purely commission basis" found in The governing law on 13th month pay is PD No. 851.
Section 1(d), Rule V of Book III of the IRR should not be understood as a separate classification of
employees to which SIL shall not be granted. Rather, as with its preceding phrase - "other employees
As with holiday and SIL pay, 13th month pay benefits generally cover all employees; an employee
whose performance is unsupervised by the employer" - the phrase "including those who are engaged
must be one of those expressly enumerated to be exempted. Section 3 of the Rules and Regulations
on task or contract basis" serves to amplify the interpretation of the Labor Code definition of "field
Implementing P.D. No. 85154 enumerates the exemptions from the coverage of 13th month pay
personnel" as those "whose actual hours of work in the field cannot be determined with reasonable
benefits. Under Section 3(e), "employers of those who are paid on xxx task basis, and those who
certainty."
are paid a fixed amount for performing a specific work, irrespective of the time consumed in the
performance thereof"55 are exempted.
In contrast and in clear departure from settled case law, the LA and the NLRC still interpreted the
Labor Code provisions and the IRR as exempting an employee from the coverage of Title I of the
Note that unlike the IRR of the Labor Code on holiday and SIL pay, Section 3(e) of the Rules and
Labor Code based simply and solely on the mode of payment of an employee. The NLRC’s utter
Regulations Implementing PD No. 851 exempts employees "paid on task basis" without any
disregard of this consistent jurisprudential ruling is a clear act of grave abuse of discretion. 52 In
reference to "field personnel." This could only mean that insofar as payment of the 13th month pay
other words, by dismissing Macasio’s complaint without considering whether Macasio was a "field
is concerned, the law did not intend to qualify the exemption from its coverage with the requirement
personnel" or not, the NLRC proceeded based on a significantly incomplete consideration of the case.
that the task worker be a "field personnel" at the same time.
This action clearly smacks of grave abuse of discretion.

WHEREFORE, in light of these considerations, we hereby PARTIALLY GRANT the petition insofar as
Entitlement to holiday pay
the payment of 13th month pay to respondent is concerned. In all other aspects, we AFFIRM the
decision dated November 22, 2010 and the resolution dated January 31, 2011 of the Court of Appeals
Evidently, the Serrano ruling speaks only of SIL pay. However, if the LA and the NLRC had only in CA-G.R. SP No. 116003.
taken counsel from Serrano and earlier cases, they would have correctly reached a similar conclusion
regarding the payment of holiday pay since the rule exempting "field personnel" from the grant of
holiday pay is identically worded with the rule exempting "field personnel" from the grant of SIL pay.
To be clear, the phrase "employees engaged on task or contract basis "found in the IRR on both SIL
pay and holiday pay should be read together with the exemption of "field personnel."

In short, in determining whether workers engaged on "pakyaw" or task basis" is entitled to holiday
and SIL pay, the presence (or absence) of employer supervision as regards the worker’s time and
performance is the key: if the worker is simply engaged on pakyaw or task basis, then the general
rule is that he is entitled to a holiday pay and SIL pay unless exempted from the exceptions
specifically provided under Article 94 (holiday pay) and Article95 (SIL pay) of the Labor Code.
However, if the worker engaged on pakyaw or task basis also falls within the meaning of "field
personnel" under the law, then he is not entitled to these monetary benefits.

Macasio does not fall under the classification of "field personnel"


G.R. No. L-4148 July 16, 1952 With reference to the pay for overtime service after the watchmen had been integrated into the
Manila Harbor Police, Judge Yanson ruled that the court has no jurisdiction because it affects the
MANILA TERMINAL COMPANY, INC., petitioner, Bureau of Customs, an instrumentality of the Government having no independent personality and
vs. which cannot be sued without the consent of the State. (Metran vs. Paredes, 45. Off. Gaz., 2835.)
THE COURT OF INDUSTRIAL RELATIONS and MANILA TERMINAL RELIEF AND MUTUAL AID
ASSOCIATION, respondents. The petitioner find a motion for reconsideration. The Association also filed a motion for
reconsideration in so far its other demands were dismissed. Judge Yanson, concurred in by Judge
PARAS, C. J.: Jose S. Bautista, promulgated on July 13, 1950, a resolution denying both motions for
reconsideration. Presiding Judge Arsenio C. Roldan, in a separate opinion concurred in by Judge
Modesto Castillo, agreed with the decision of Judge Yanson of April 1, 1950, as to the dismissal of
On September 1, 1945, the Manila Terminal Company, Inc. hereinafter to be referred as to the
other demands of the Association, but dissented therefrom as to the granting of overtime pay. In a
petitioner, undertook the arrastre service in some of the piers in Manila's Port Area at the request
separate decisive opinion, Judge Juan S. Lanting concurred in the dismissal of other demands of the
and under the control of the United States Army. The petitioner hired some thirty men as watchmen
Association. With respect to overtime compensation, Judge Lanting ruled:
on twelve-hour shifts at a compensation of P3 per day for the day shift and P6 per day for the night
shift. On February 1, 1946, the petitioner began the postwar operation of the arrastre service at the
present at the request and under the control of the Bureau of Customs, by virtue of a contract 1. The decision under review should be affirmed in so far it grants compensation for overtime on
entered into with the Philippine Government. The watchmen of the petitioner continued in the service regular days (not Sunday and legal holidays)during the period from the date of entrance to duty
with a number of substitutions and additions, their salaries having been raised during the month of to May 24, 1947, such compensation to consists of the amount corresponding to the four hours'
February to P4 per day for the day shift and P6.25 per day for the nightshift. On March 28, 1947, overtime at the regular rate and an additional amount of 25 per cent thereof.
Dominador Jimenez, a member of the Manila Terminal Relief and Mutual Aid Association, sent a
letter to the Department of Labor, requesting that the matter of overtime pay be investigated, but 2. As to the compensation for work on Sundays and legal holidays, the petitioner should pay to its
nothing was done by the Department. On April 29, 1947, Victorino Magno Cruz and five other watchmen the compensation that corresponds to the overtime (in excess of 8 hours) at the regular
employees, also member of the Manila Transit Mutual Aid Association, filed a 5-point demand with rate only, that is, without any additional amount, thus modifying the decision under review
the Department of Labor, including overtime pay, but the Department again filed to do anything accordingly.
about the matter. On May 27, 1947, the petitioner instituted the system of strict eight-hour shifts.
On June 19, 1947, the Manila Port Terminal Police Association, not registered in accordance with the 3. The watchmen are not entitled to night differential pay for past services, and therefore the
provisions of Commonwealth Act No. 213, filed a petition with the Court of Industrial Relations. On decision should be reversed with the respect thereto.
July 16, 1947, the Manila Terminal Relief and Mutual Aid Association was organized for the first time,
having been granted certificate No. 375 by the Department of Labor. On July 28, 1947, Manila
The petitioner has filed a present petition for certiorari. Its various contentions may be briefly
Terminal Relief and Mutual Aid Association filed an amended petition with the Court of Industrial
summed up in the following propositions: (1) The Court of Industrial Relations has no jurisdiction to
Relations praying, among others, that the petitioner be ordered to pay its watchmen or police force
render a money judgment involving obligation in arrears. (2) The agreement under which its police
overtime pay from the commencement of their employment. On May 9, 1949, by virtue of Customs
force were paid certain specific wages for twelve-hour shifts, included overtime compensation. (3)
Administrative Order No. 81 and Executive Order No. 228 of the President of the Philippines, the
The Association is barred from recovery by estoppel and laches. (4) the nullity or invalidity of the
entire police force of the petitioner was consolidated with the Manila Harvor Police of the Customs
employment contract precludes any recovery by the Association. (5) Commonwealth Act No. 4444
Patrol Service, a Government agency under the exclusive control of the Commissioner of Customs
does not authorize recovery of back overtime pay.
and the Secretary of Finance The Manila Terminal Relief and Mutual Aid Association will hereafter be
referred to as the Association.
The contention that the Court of Industrial Relations has no jurisdiction to award a money judgment
was already overruled by this Court in G.R. No. L-4337, Detective & protective Bureau, Inc. vs. Court
Judge V. Jimenez Yanson of the Court of Industrial Relations in his decision of April 1, 1950, as
of Industrial Relations and United Employees Welfare Association, 90 Phil., 665, in this wise: "It is
amended on April 18, 1950, while dismissing other demands of the Association for lack of
also argued that the respondent court has no jurisdiction to award overtime pay, which is money
jurisdiction, ordered the petitioner to pay to its police force —
judgment. We believe that under Commonwealth Act No. 103 the Court is empowered to make the
(a) Regular or base pay corresponding to four hours' overtime plus 25 per cent thereof as
order for the purpose of settling disputes between the employer and employee1. As a matter of fact
additional overtime compensation for the period from September 1, 1945 to May 24, 1947;
this Court has confirmed an order of the Court of Industrial Relations requiring the Elks Club to pay
(b) Additional compensation of 25 per cent to those who worked from 6:00 p.m. to 6:00 a.m.
to its employees certain sum of money as overtime back wages from June 3, 1939 to March 13,
during the same period:
1941. This, in spite the allegation of lack or excess of jurisdiction on the part of said court. (45 Off.
(c) Additional compensation of 50 per cent for work performed on Sundays and legal holidays
Gaz., 3829; 80 Phil. 272)"
during the same period;
(d) Additional compensation of 50 per cent for work performed on Sundays and legal holidays
from May 24, 1947 to May 9, 1949; and The important point stressed by the petitioner is that the contract between it and the Association
(e) Additional compensation of 25 per cent for work performed at night from May 29, 1947 to May upon the commencement of the employment of its watchman was to the certain rates of pay,
9, 1949. including overtime compensation namely, P3 per day for the day shift and P6 per day for night shift
beginning September 1, 1945, and P4 per day shift and P6.25 per day for the night shift since
February, 1946. The record does not bear out these allegations. The petitioner has relied merely on
the facts that its watchmen had worked on twelve-hour shifts at specific wages per day and that no It appears that the Bureau had been granting the members of the Association, every month, "two
complaint was made about the matter until, first on March 28, 1947 and, secondly, on April 29, days off" days in which they rendered no service, although they received salary for the whole
1947. month. Said Bureau contended below that the pay corresponding to said 2 day vacation
corresponded to the wages for extra work. The court rejected the contention, quite properly we
In times of acute unemployment, the people, urged by the instinct of self-preservation, go from believe, because in the contract there was no agreement to that effect; and such agreement, if
place to place and from office to office in search for any employment, regardless of its terms and any, would probably be contrary to the provisions of the Eight-Hour Law (Act No. 444, sec. 6) and
conditions, their main concern in the first place being admission to some work. Specially for positions would be null and void ab initio.
requiring no special qualifications, applicants would be good as rejected if they ever try to be
inquisitive about the hours of work or the amount of salary, ever attempt to dictate their terms. The It is argued here, in opposition to the payment, that until the commencement of this litigation the
petitioner's watchmen must have railroaded themselves into their employment, so to speak, happy members of the Association never claimed for overtime pay. That may be true. Nevertheless the
in the thought that they would then have an income on which to subsist. But, at the same time, they law gives them the right to extra compensation. And they could not be held to
found themselves required to work for twelve hours a day. True, there was agreement to work, but have impliedly waived such extra compensation, for the obvious reason that could not
can it fairly be supposed that they had the freedom to bargain in any way, much less to insist in the have expressly waived it.
observance of the Eight Hour Labor Law?
The foregoing pronouncements are in point. The Association cannot be said to have impliedly waived
As was aptly said in Floyd vs. Du Bois Soap Co., 1942, 317 U. S. 596, 63 Sup. Ct. 159; 6 CCH Labor the right to overtime compensation, for the obvious reason that they could not have expressly
Cases, Par. 51, 147, "A contract of employment, which provides for a weekly wage for a specified waived it."
number of hours, sufficient to cover both the statutory minimum wage and overtime compensation,
if computed on the basis of the statutory minimum wage, and which makes no provision for a fixed The principle of estoppel and the laches cannot well be invoked against the Association. In the first
hourly rate or that the weekly wage includes overtime compensation, does not meet the place, it would be contrary to the spirit of the Eight Hour Labor Law, under which as already seen,
requirements of the Act." the laborers cannot waive their right to extra compensation. In the second place, the law principally
obligates the employer to observe it, so much so that it punishes the employer for its violation and
Moreover, we note that after the petition had instituted the strict eight-hour shifts, no reduction was leaves the employee or laborer free and blameless. In the third place, the employee or laborer is in
made in the salaries which its watchmen received under the twelve hour arrangement. Indeed, as such a disadvantageous position as to be naturally reluctant or even apprehensive in asserting any
admitted by the petitioner, "when the members or the respondent union were placed on strict eight- claim which may cause the employer to devise a way for exercising his right to terminate the
hour shifts, the lowest salary of all the members of the respondent union was P165 a month, or employment.
P5.50 daily, for both day and night shifts." Although it may be argued that the salary for the night
shift was somewhat lessened, the fact that the rate for the day shift was increased in a sense tends If the principle of estoppel and laches is to be applied, it may bring about a situation, whereby the
to militate against the contention that the salaries given during the twelve-hour shifts included employee or laborer, who cannot expressly renounce their right to extra compensation under the
overtime compensation. Eight-Hour Labor Law, may be compelled to accomplish the same thing by mere silence or lapse of
time, thereby frustrating the purpose of law by indirection.
Petitioner's allegation that the association had acquiesced in the twelve-hour shifts for more than
18 months, is not accurate, because the watchmen involved in this case did not enter the service of While counsel for the petitioner has cited authorities in support of the doctrine invoked, there are
the petitioner, at one time, on September 1, 1945. As Judge Lanting found, "only one of them also authorities pointed out in the opinion of Judge Lanting to the contrary. Suffice it to say, in this
entered the service of the company on said date, very few during the rest of said month, some connection, that we are inclined to rule adversely against petitioner for the reasons already stated.
during the rest of that year (1945) and in 1946, and very many in 1947, 1948 and 1949."

The argument that the nullity or invalidity of the employment contract precludes recovery by the
The case at bar is quite on all fours with the case of Detective & Protective Bureau, Inc. vs. Court of Association of any overtime pay is also untenable. The argument, based on the supposition that the
Industrial Relations and United Employees Welfare Association, supra, in which the facts were as parties are in pari delicto, was in effect turned down in Gotamo Lumber Co. vs. Court of Industrial
follows: "The record discloses that upon petition properly submitted, said court made an Relations,* 47 Off. Gaz., 3421, wherein we ruled: "The petitioner maintains that as the overtime
investigation and found that the members of the United Employees Welfare Association (hereafter work had been performed without a permit from the Department of Labor, no extra compensation
called the Association) were in the employ of the petitioner Detective and Protective Bureau, Inc. should be authorized. Several decisions of this court are involved. But those decisions were based
(herein called the Bureau) which is engaged in the business of furnishing security guards to on the reasoning that as both the laborer and employer were duty bound to secure the permit from
commercial and industrial establishments, paying to said members monthly salaries out of what it the Department of Labor, both were in pari delicto. However the present law in effect imposed that
received from the establishments benefited by guard service. The employment called for daily tours duty upon the employer (C.A. No. 444). Such employer may not therefore be heard to plead his own
of duty for more than eight hours, in addition to work on Sundays and holidays. Nonetheless the neglect as exemption or defense.
members performed their labors without receiving extra compensation." The only difference is that, The employee in rendering extra service at the request of his employer has a right to assume that
while in said case the employees concerned were paid monthly salaries, in the case now before us the latter has complied with the requirement of the law, and therefore has obtained the required
the wages were computed daily. In the case cited, we held the following: permission from the Department of Labor.
Moreover, the Eight-Hour Law, in providing that "any agreement or contract between the employer G.R. NO. 41314 November 13, 1992
and the laborer or employee contrary to the provisions of this Act shall be null avoid ab initio,"
(Commonwealth Act No. 444, sec. 6), obviously intended said provision for the benefit of the laborers UNION CARBIDE LABOR UNION (NLU), petitioner,
or employees. The employer cannot, therefore, invoke any violation of the act to exempt him from vs.
liability for extra compensation. This conclusion is further supported by the fact that the law makes UNION CARBIDE PHILIPPINES, INC. AND THE HON. SECRETARY OF LABOR, respondents.
only the employer criminally liable for any violation. It cannot be pretended that, for the employer
MELO, J.:
to commit any violation of the Eight-Hour Labor Law, the participation or acquiescence of the
employee or laborer is indispensable, because the latter in view of his need and desire to live, cannot
This refers to a petition for review of the decision of the then Secretary of Labor Blas Ople handed
be considered as being on the same level with the employer when it comes to the question of
down on February 7, 1975 which set aside the decision of the Arbitrator ordering reinstatement with
applying for and accepting an employment.
backwages, and instead adjudged the payment of separation pay; and the resolution dated July 24,
1975 denying petitioner's motion for reconsideration for lack of merit.
Petitioner also contends that Commonwealth Act No. 444 does not provide for recovery of back
overtime pay, and to support this contention it makes referrence to the Fair Labor Standards Act of The undisputed facts as found by the Secretary of Labor are as follows:
the United States which provides that "any employer who violates the provisions of section 206 and
section 207 of this title shall be liable to the employee or employees affected in the amount of their . . . Complainants Agapito Duro, Alfredo Torio, and Rustico Javillonar, were dismissed from their
unpaid minimum wages or their unpaid overtime compensation as the case may be," — a provision employment after an application for clearance to terminate them was approved by the Secretary
not incorporated in Commonwealth Act No. 444, our Eight-Hour Labor Law. We cannot agree to the of Labor on December 19, 1972. Respondent's application for clearance was premised on "willful
proposition, because sections 3 and 5 of Commonwealth Act 444 expressly provides for the payment violation of Company regulations, gross insubordination and refusal to submit to a Company
of extra compensation in cases where overtime services are required, with the result that the investigation . . . ."
employees or laborers are entitled to collect such extra compensation for past overtime work. To
hold otherwise would be to allow an employer to violate the law by simply, as in this case, failing to Prior events leading to the dismissal of complainants are recited in the Arbitrator's decision, which
provide for and pay overtime compensation. we quote:

It appears that the Company is operating on three (3) shifts namely: morning, afternoon and
The point is stressed that the payment of the claim of the Association for overtime pay covering a night shifts. The workers in the third shift normally work from Monday to Saturday, the last
period of almost two years may lead to the financial ruin of the petitioner, to the detriment of its working day being Friday or forty (40) hours a week or from Monday to Friday.
employees themselves. It is significant, however, that not all the petitioner's watchmen would
receive back overtime pay for the whole period specified in the appealed decision, since the record Sometime in July 1972, there seems to be a change in the working schedule from Monday to
shows that the great majority of the watchmen were admitted in 1946 and 1947, and even 1948 Friday as contained in the collective bargaining agreement aforecited to Sunday thru Thursday.
and 1949. At any rate, we are constrained to sustain the claim of the Association as a matter of The change became effective July 5, 1972. The third shift employees were required to start the
simple justice, consistent with the spirit and purpose of the Eight-Hour Labor Law. The petitioner, in new work schedule from Sunday thru Thursday.
the first place, was required to comply with the law and should therefore be made liable for the
consequences of its violation. On November 6, 1972, the night shift employees filed a demand to maintain the old working
schedule from Monday thru Friday. (Letter of November 6, 1972 addressed to the Committee
It is high time that all employers were warned that the public is interested in the strict enforcement on Labor Relation, UCLU). The demand was referred to the Labor Management Relation
of the Eight-Hour Labor Law. This was designed not only to safeguard the health and welfare of the Committee and discussed from November 15, up to November 24, 1972. In the discussions had,
laborer or employee, but in a way to minimize unemployment by forcing employers, in cases where it was arrived at that all night shift operating personnel were allowed to start their work Monday
more than 8-hour operation is necessary, to utilize different shifts of laborers or employees working and on Saturday. This excepted the employees in the maintenance and preparation crews whose
only for eight hours each. work schedule is presumed to be maintained from Sunday to Thursday. The work schedule
between management representatives and the alleged officers of the Union (Varias group) was
approved and disseminated to take effect November 26, 1972. (Exh. "2" Respondent).
Wherefore, the appealed decision, in the form voted by Judge Lanting, is affirmed, it being
understood that the petitioner's watchmen will be entitled to extra compensation only from the dates In manifestation of their dissention to the new work schedule, the three respondents Duro, Torio,
they respectively entered the service of the petitioner, hereafter to be duly determined by the Court and Javillonar did not report for work on November 26, 1972 which was a Sunday since it was
of Industrial Relations. So ordered, without costs. not a working day according to the provisions of the Collecrtive Bargaining Agreement. (Exh.
"A" Complainant). Their absence caused their suspension for fourteen (14) days.

On May 4, 1973, the Arbitrator rendered a decision ordering the reinstatement with backwages of
the complainants. On June 8, 1973, the National Labor Relations Commission dismissed respondent
company's appeal for having been filed out of time. A motion for reconsideration which was treated
as an appeal was then filed by respondent company before the Secretary of Labor, resulting in the
modification of the Arbitrator's decision by awarding complainants separation pay. A motion for
reconsideration subsequently filed by the petitioner was denied for lack of merit.
Hence, this petition. Finally, it should be observed that the provisions of the Constitution should be given only a
prospective application unless the contrary is clearly intended. Were the rule otherwise, rights
The main issue in this case is whether or not the complainants could be validly dismissed from their already acquired or vested might be unduly disturbed or withdrawn even in the absence of an
employment on the ground of insubordination for refusing to comply with the new work schedule. unmistakable intention to place them within the scope of the Constitution.

Petitioner alleges that the change in the company's working schedule violated the existing Collective We agree with the findings arrived at by both Arbitrator and the Secretary of Labor that there is no
Bargaining Agreement of the parties. Hence, complainants cannot be dismissed since their refusal unfair labor practice in this case. Neither was there gross and habitual neglect of complainants'
to comply with the re-scheduled working hours was based on a provision of the Collective Bargaining duties. Nor did the act of complainants in refusing to follow the new working hours amount to serious
Agreement. Petitioner further contends that the dismissal of the complainants violated Section 9, misconduct or willful disobedience to the orders of respondent company.
Article II of the 1973 Constitution which provides "the right of workers to self-organization, collective
bargaining, security of tenure, and just and humane conditions of work." Although no serious objections may be offered to the Arbitrator's conclusion to order reinstatement
with backwages of the complainants, We now refrain from doing so considering that reinstatement
The petition has no merit. is no longer feasible due to the fact that the controversy started more than 20 years ago aside from
the obviously strained relations between the parties.
Although Article XIX of the CBA provides for the duration of the agreement, which We quote:
This agreement shall become effective on September 1, 1971 and shall remain in full force and WHEREFORE, the decision appealed from is hereby AFFIRMED.
effect without change until August 31, 1974. Unless the parties hereto agree otherwise,
negotiation for renewal, or renewal and modification, or a new agreement may not be initiated
before July 1, 1974.

this does not necessarily mean that the company can no longer change its working schedule, for
Section 2, Article II of the same CBA expressly provides that:
Sec. 2. In the exercise of its functions of management, the COMPANY shall have the sole and
exclusive right and power, among other things, to direct the operations and the working force
of its business in all respects; to be the sole judge in determining the capacity or fitness of an
employee for the position or job to which he has been assigned; to schedule the hours of work,
shifts and work schedules; to require work to be done in excess of eight hours or Sundays or
holidays as the exigencies of the service may require; to plan, schedule, direct, curtail and
control factory operations and schedules of production; to introduce and install new or improved
methods or facilities; to designate the work and the employees to perform it; to select and hire
new employees; to train new employees and improve the skill and ability of employees from one
job to another or form one shift to another; to classify or reclassify employees; and to make
such changes in the duties of its employees as the COMPANY may see fit or convenient for the
proper conduct of its business.

Verily and wisely, management retained the prerogative, whenever exigencies of the service so
require, to change the working hours of its employees. And as long as such prerogative is exercised
in good faith for the advancement of the employer's interest and not for the purpose of defeating or
circumventing the rights of the employees under special laws or under valid agreements, this Court
will uphold such exercise (San Miguel Brewery Sales Force Union (PTGWO) vs. Ople, 170 SCRA 25
[1989]).

Thus, in the case of Abbott Laboratories (Phil.), Inc. vs. NLRC (154 SCRA 713 [1987]), We ruled:
. . . Even as the law is solicitous of the welfare of employees, it must also protect the right of an
employer to exercise what are clearly management prerogatives. The free will of management to
conduct its own business affairs to achieve its purpose cannot be denied. (p.717)

Further, the incident complained of took place sometime in 1972, so there is no violation of the 1973
Constitution to speak of because the guarantee of security of tenure embodied under Section 9,
Article II may not be given a retroactive effect. It is the basic norm that provisions of the fundamental
law should be given prospective application only, unless legislative intent for its retroactive
application is so provided.

As pointed out by Justice Isagani Cruz, to wit:


G.R. No. 119205 April 15, 1998 by private respondent, the NLRC, this time with two (2) new commissioners replacing those who
earlier retired, reversed its earlier decision of 20 April 1994 as well as the decision of the Labor
SIME DARBY PILIPINAS, INC. petitioner, Arbiter.5 The NLRC considered the decision of this Court in the Sime Darby case of 1990 as the law
vs. of the case wherein petitioner was ordered to pay "the money value of these covered employees
NATIONAL LABOR RELATIONS COMMISSION (2ND DIVISION) and SIME DARBY SALARIED deprived of lunch and/or working time breaks." The public respondent declared that the new work
EMPLOYEES ASSOCIATION (ALU-TUCP), respondents. schedule deprived the employees of the benefits of a time-honored company practice of providing
its employees a 30-minute paid lunch break resulting in an unjust diminution of company privileges
BELLOSILLO, J.: prohibited by Art. 100 of the Labor Code, as amended. Hence, this petition alleging that public
respondent committed grave abuse of discretion amounting to lack or excess of jurisdiction: (a) in
Is the act of management in revising the work schedule of its employees and discarding their paid
ruling that petitioner committed unfair labor practice in the implementation of the change in the
lunch break constitutive of unfair labor practice?
work schedule of its employees from 7:45 a.m. — 3:45 p.m. to 7:45 a.m. — 4:45 p.m. with one-
Sime Darby Pilipinas, Inc., petitioner, is engaged in the manufacture of automotive tires, tubes and hour lunch break from 12:00 nn to 1:00 p.m.; (b) in holding that there was diminution of benefits
other rubber products. Sime Darby Salaried Employees Association (ALU-TUCP), private respondent, when the 30-minute paid lunch break was eliminated; (c) in failing to consider that in the earlier
is an association of monthly salaried employees of petitioner at its Marikina factory. Prior to the Sime Darby case affirming the decision of the NLRC, petitioner was authorized to discontinue the
present controversy, all company factory workers in Marikina including members of private practice of having a 30-minute paid lunch break should it decide to do so; and, (d) in ignoring
respondent union worked from 7:45 a.m. to 3:45 p.m. with a 30-minute paid "on call" lunch break. petitioner's inherent management prerogative of determining and fixing the work schedule of its
employees which is expressly recognized in the collective bargaining agreement between petitioner
On 14 August 1992 petitioner issued a memorandum to all factory-based employees advising all its and private respondent.
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 The Office of the Solicitor General filed in a lieu of comment a manifestation and motion
thus — recommending that the petitioner be granted, alleging that the 14 August 1992 memorandum which
contained the new work schedule was not discriminatory of the union members nor did it constitute
TO: ALL FACTORY-BASED EMPLOYEES unfair labor practice on the part of petitioner.
RE: NEW WORK SCHEDULE
Effective Monday, September 14, 1992, the new work schedule of the factory office will be as follows: We agree, hence, we sustain petitioner. The right to fix the work schedules of the employees rests
7:45 A.M. — 4:45 P.M. (Monday to Friday) principally on their employer. In the instant case petitioner, as the employer, cites as reason for the
7:45 A.M. — 11:45 A.M. (Saturday). adjustment the efficient conduct of its business operations and its improved production. 6 It
Coffee break time will be ten minutes only anytime between:
rationalizes that while the old work schedule included a 30-minute paid lunch break, the employees
9:30 A.M. — 10:30 A.M. and
2:30 P.M. — 3:30 P.M. could be called upon to do jobs during that period as they were "on call." Even if denominated as
Lunch break will be between: lunch break, this period could very well be considered as working time because the factory
12:00 NN — 1:00 P.M. (Monday to Friday). employees were required to work if necessary and were paid accordingly for working. With the new
Excluded from the above schedule are the Warehouse and QA employees who are on shifting. Their work and work schedule, the employees are now given a one-hour lunch break without any interruption from
break time schedules will be maintained as it is now. 1 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
Since private respondent felt affected adversely by the change in the work schedule and efficiency and better performance in their work. Since the employees are no longer required to work
discontinuance of the 30-minute paid "on call" lunch break, it filed on behalf of its members a during this one-hour lunch break, there is no more need for them to be compensated for this period.
complaint with the Labor Arbiter for unfair labor practice, discrimination and evasion of liability We agree with the Labor Arbiter that the new work schedule fully complies with the daily work period
pursuant to the resolution of this Court in Sime Darby International Tire of eight (8) hours without violating the Labor Code. 7 Besides, the new schedule applies to all
Co., Inc. v. NLRC.2 However, the Labor Arbiter dismissed the complaint on the ground that the employees in the factory similarly situated whether they are union members or not.8
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, Consequently, it was grave abuse of discretion for public respondent to equate the earlier Sime
break time and one-hour lunch break did not have the effect of diminishing the benefits granted to Darby case9 with the facts obtaining in this case. That ruling in the former case is not applicable
factory workers as the working time did not exceed eight (8) hours. here. The issue in that case involved the matter of granting lunch breaks to certain employees while
depriving the other employees of such breaks. This Court affirmed in that case the NLRC's finding
The Labor Arbiter further held that the factory workers would be unjustly enriched if they continued that such act of management was discriminatory and constituted unfair labor practice.
to be paid during their lunch break even if they were no longer "on call" or required to work during
the break. He also ruled that the decision in the earlier Sime Darby case 3 was not applicable to the The case before us does not pertain to any controversy involving discrimination of employees but
instant case because the former involved discrimination of certain employees who were not paid for only the issue of whether the change of work schedule, which management deems necessary to
their 30-minute lunch break while the rest of the factory workers were paid; hence, this Court increase production, constitutes unfair labor practice. As shown by the records, the change effected
ordered that the discriminated employees be similarly paid the additional compensation for their by management with regard to working time is made to apply to all factory employees engaged in
lunch break. the same line of work whether or not they are members of private respondent union. Hence, it
cannot be said that the new scheme adopted by management prejudices the right of private
Private respondent appealed to respondent National Labor Relations Commission (NLRC) which respondent to self-organization.
sustained the Labor Arbiter and dismissed the appeal. 4 However, upon motion for reconsideration
Every business enterprise endeavors to increase its profits. In the process, it may devise means to G.R. No. 151309 October 15, 2008
attain that goal. Even as the law is solicitous of the welfare of the employees, it must also protect
the right of an employer to exercise what are clearly management prerogatives. 10 Thus, BISIG MANGGAGAWA SA TRYCO and/or FRANCISCO SIQUIG, as Union President,
management is free to regulate, according to its own discretion and judgment, all aspects of JOSELITO LARIÑO, VIVENCIO B. BARTE, SATURNINO EGERA and SIMPLICIO AYA-
employment, including hiring, work assignments, working methods, time, place and manner of work, AY, petitioners,
processes to be followed, supervision of workers, working regulations, transfer of employees, work vs.
supervision, lay off of workers and discipline, dismissal and recall of workers. 11 Further, NATIONAL LABOR RELATIONS COMMISSION, TRYCO PHARMA CORPORATION, and/or
management retains the prerogative, whenever exigencies of the service so require, to change the WILFREDO C. RIVERA, respondents.
working hours of its employees. So long as such prerogative is exercised in good faith for the
advancement of the employer's interest and not for the purpose of defeating or circumventing the
NACHURA, J.:
rights of the employees under special laws or under valid agreements, this Court will uphold such
exercise.12
This petition seeks a review of the Decision1 of the Court of Appeals (CA) dated July 24, 2001 and
While the Constitution is committed to the policy of social justice and the protection of the working Resolution dated December 20, 2001, which affirmed the finding of the National Labor Relations
class, it should not be supposed that every dispute will be automatically decided in favor of labor. Commission (NLRC) that the petitioners' transfer to another workplace did not amount to a
Management also has rights which, as such, are entitled to respect and enforcement in the interest constructive dismissal and an unfair labor practice.
of simple fair play. Although this Court has inclined more often than not toward the worker and has
upheld his cause in his conflicts with the employer, such favoritism has not blinded the Court to the The pertinent factual antecedents are as follows:
rule that justice is in every case for the deserving, to be dispensed in the light of the established
facts and the applicable law and doctrine.13 Tryco Pharma Corporation (Tryco) is a manufacturer of veterinary medicines and its principal office
is located in Caloocan City. Petitioners Joselito Lariño, Vivencio Barte, Saturnino Egera and Simplicio
WHEREFORE, the Petition is GRANTED. The Resolution of the National Labor Relations Commission
Aya-ay are its regular employees, occupying the positions of helper, shipment helper and factory
dated 29 November 1994 is SET ASIDE and the decision of the Labor Arbiter dated 26 November
workers, respectively, assigned to the Production Department. They are members of Bisig
1993 dismissing the complaint against petitioner for unfair labor practice is AFFIRMED.
Manggagawa sa Tryco (BMT), the exclusive bargaining representative of the rank-and-file
employees.

Tryco and the petitioners signed separate Memorand[a] of Agreement2 (MOA), providing for a
compressed workweek schedule to be implemented in the company effective May 20, 1996. The
MOA was entered into pursuant to Department of Labor and Employment Department Order (D.O.)
No. 21, Series of 1990, Guidelines on the Implementation of Compressed Workweek. As provided in
the MOA, 8:00 a.m. to 6:12 p.m., from Monday to Friday, shall be considered as the regular working
hours, and no overtime pay shall be due and payable to the employee for work rendered during
those hours. The MOA specifically stated that the employee waives the right to claim overtime pay
for work rendered after 5:00 p.m. until 6:12 p.m. from Monday to Friday considering that the
compressed workweek schedule is adopted in lieu of the regular workweek schedule which also
consists of 46 hours. However, should an employee be permitted or required to work beyond 6:12
p.m., such employee shall be entitled to overtime pay.

Tryco informed the Bureau of Working Conditions of the Department of Labor and Employment of
the implementation of a compressed workweek in the company. 3

In January 1997, BMT and Tryco negotiated for the renewal of their collective bargaining agreement
(CBA) but failed to arrive at a new agreement.

Meantime, Tryco received the Letter dated March 26, 1997 from the Bureau of Animal Industry of
the Department of Agriculture reminding it that its production should be conducted in San Rafael,
Bulacan, not in Caloocan City:

MR. WILFREDO C. RIVERA


President, Tryco Pharma Corporation
San Rafael, Bulacan
Subject: LTO as VDAP Manufacturer at San Rafael, Bulacan following reasons: (1) complainants are not members of the negotiating panel; and (2) the transfer
Dear Mr. Rivera: was made pursuant to the directive of the Department of Agriculture.

This is to remind you that your License to Operate as Veterinary Drug and Product Manufacturer The Labor Arbiter also denied the money claims, ratiocinating that the nonpayment of wages was
is addressed at San Rafael, Bulacan, and so, therefore, your production should be done at the justified because the petitioners did not render work from May 26 to 31, 1997; overtime pay is not
above mentioned address only. Further, production of a drug includes propagation, processing, due because of the compressed workweek agreement between the union and management; and
compounding, finishing, filling, repacking, labeling, advertising, storage, distribution or sale of the service incentive leave pay cannot be claimed by the complainants because they are already enjoying
veterinary drug product. In no instance, therefore, should any of the above be done at your vacation leave with pay for at least five days. As for the claim of noncompliance with Wage Order
business office at 117 M. Ponce St., EDSA, Caloocan City. No. 4, the Labor Arbiter held that the issue should be left to the grievance machinery or voluntary
arbitrator.
Please be guided accordingly.
Thank you. On October 29, 1999, the NLRC affirmed the Labor Arbiter's Decision, dismissing the case, thus:
Very truly yours, PREMISES CONSIDERED, the Decision of February 27, 1998 is hereby AFFIRMED and
(sgd.) complainants' appeal therefrom DISMISSED for lack of merit. Complainants Joselito Lariño,
EDNA ZENAIDA V. VILLACORTE, D.V.M. Vivencio Barte, Saturnino Egera and Simplicio Aya-ay are directed to report to work at
Chief, Animal Feeds Standard Division4 respondents' San Rafael Plant, Bulacan but without backwages. Respondents are directed to accept
the complainants back to work.
Accordingly, Tryco issued a Memorandum5 dated April 7, 1997 which directed petitioner Aya-ay to
report to the company's plant site in Bulacan. When petitioner Aya-ay refused to obey, Tryco On December 22, 1999, the NLRC denied the petitioners' motion for reconsideration for lack of
reiterated the order on April 18, 1997.6 Subsequently, through a Memorandum7 dated May 9, 1997, merit.12
Tryco also directed petitioners Egera, Lariño and Barte to report to the company's plant site in
Bulacan. Left with no recourse, petitioners filed a petition for certiorari with the CA.

BMT opposed the transfer of its members to San Rafael, Bulacan, contending that it constitutes On July 24, 2001, the CA dismissed the petition for certiorari and ruled that the transfer order was
unfair labor practice. In protest, BMT declared a strike on May 26, 1997. a management prerogative not amounting to a constructive dismissal or an unfair labor practice.
The CA further sustained the enforceability of the MOA, particularly the waiver of overtime pay in
In August 1997, petitioners filed their separate complaints8 for illegal dismissal, underpayment of light of this Court's rulings upholding a waiver of benefits in exchange of other valuable privileges.
wages, nonpayment of overtime pay and service incentive leave, and refusal to bargain against The dispositive portion of the said CA decision reads:
Tryco and its President, Wilfredo C. Rivera. In their Position Paper, petitioners alleged that the WHEREFORE, the instant petition is DISMISSED. The Decision of the Labor Arbiter dated February
company acted in bad faith during the CBA negotiations because it sent representatives without 27, 1998 and the Decision and Resolution of the NLRC promulgated on October 29, 1999 and
authority to bind the company, and this was the reason why the negotiations failed. They added that December 22, 1999, respectively, in NLRC-NCR Case Nos. 08-05715-97, 08-06115-97 and 08-
the management transferred petitioners Lariño, Barte, Egera and Aya-ay from Caloocan to San 05920-97, are AFFIRMED.
Rafael, Bulacan to paralyze the union. They prayed for the company to pay them their salaries from
May 26 to 31, 1997, service incentive leave, and overtime pay, and to implement Wage Order No. The CA denied the petitioners' motion for reconsideration on December 20, 2001. 14
4.

Dissatisfied, petitioners filed this petition for review raising the following issues:
In their defense, respondents averred that the petitioners were not dismissed but they refused to -A- THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING THE PATENTLY ERRONEOUS
comply with the management's directive for them to report to the company's plant in San Rafael, RULING OF THE LABOR ARBITER AND THE COMMISSION THAT THERE WAS NO DISMISSAL, MUCH
Bulacan. They denied the allegation that they negotiated in bad faith, stating that, in fact, they sent LESS ILLEGAL DISMISSAL, OF THE INDIVIDUAL PETITIONERS.
the Executive Vice-President and Legal Counsel as the company's representatives to the CBA -B- THE COURT OF APPEALS GRAVELY ERRED IN NOT FINDING AND CONCLUDING THAT PRIVATE
negotiations. They claim that the failure to arrive at an agreement was due to the stubbornness of RESPONDENTS COMMITTED ACTS OF UNFAIR LABOR PRACTICE.
the union panel. -C- THE COURT OF APPEALS ERRED IN NOT FINDING AND CONCLUDING THAT PETITIONERS ARE
ENTITLED TO THEIR MONEY CLAIMS AND TO DAMAGES, AS WELL AS LITIGATION COSTS AND
Respondents further averred that, long before the start of the negotiations, the company had already ATTORNEY'S FEES.15
been planning to decongest the Caloocan office to comply with the government policy to shift the
concentration of manufacturing activities from the metropolis to the countryside. The decision to The petition has no merit.
transfer the company's production activities to San Rafael, Bulacan was precipitated by the letter-
reminder of the Bureau of Animal Industry.
We have no reason to deviate from the well-entrenched rule that findings of fact of labor officials,
who are deemed to have acquired expertise in matters within their respective jurisdiction, are
On February 27, 1998, the Labor Arbiter dismissed the case for lack of merit. 10 The Labor Arbiter generally accorded not only respect but even finality, and bind us when supported by substantial
held that the transfer of the petitioners would not paralyze or render the union ineffective for the evidence.16 This is particularly true when the findings of the Labor Arbiter, the NLRC and the CA are
in absolute agreement.17 In this case, the Labor Arbiter, the NLRC, and the CA uniformly agreed that The Court has previously declared that mere incidental inconvenience is not sufficient to warrant a
the petitioners were not constructively dismissed and that the transfer orders did not amount to an claim of constructive dismissal.23 Objection to a transfer that is grounded solely upon the personal
unfair labor practice. But if only to disabuse the minds of the petitioners who have persistently inconvenience or hardship that will be caused to the employee by reason of the transfer is not a
pursued this case on the mistaken belief that the labor tribunals and the appellate court committed valid reason to disobey an order of transfer.24
grievous errors, this Court will go over the issues raised in this petition.
Incidentally, petitioners cite Escobin v. NLRC25 where the Court held that the transfer of the
Petitioners mainly contend that the transfer orders amount to a constructive dismissal. They employees therein was unreasonable. However, the distance of the workplace to which the
maintain that the letter of the Bureau of Animal Industry is not credible because it is not employees were being transferred can hardly compare to that of the present case. In that case, the
authenticated; it is only a ploy, solicited by respondents to give them an excuse to effect a massive employees were being transferred from Basilan to Manila; hence, the Court noted that the transfer
transfer of employees. They point out that the Caloocan City office is still engaged in production would have entailed the separation of the employees from their families who were residing in Basilan
activities until now and respondents even hired new employees to replace them. and accrual of additional expenses for living accommodations in Manila. In contrast, the distance
from Caloocan to San Rafael, Bulacan is not considerably great so as to compel petitioners to seek
We do not agree. living accommodations in the area and prevent them from commuting to Metro Manila daily to be
with their families.

We refuse to accept the petitioners' wild and reckless imputation that the Bureau of Animal Industry
conspired with the respondents just to effect the transfer of the petitioners. There is not an iota of Petitioners, however, went further and argued that the transfer orders amounted to unfair labor
proof to support this outlandish claim. Absent any evidence, the allegation is not only highly practice because it would paralyze and render the union ineffective.
irresponsible but is grossly unfair to the government agency concerned. Even as this Court has given
litigants and counsel a relatively wide latitude to present arguments in support of their cause, we To begin with, we cannot see how the mere transfer of its members can paralyze the union. The
will not tolerate outright misrepresentation or baseless accusation. Let this be fair warning to counsel union was not deprived of the membership of the petitioners whose work assignments were only
for the petitioners. transferred to another location.

Furthermore, Tryco's decision to transfer its production activities to San Rafael, Bulacan, regardless More importantly, there was no showing or any indication that the transfer orders were motivated
of whether it was made pursuant to the letter of the Bureau of Animal Industry, was within the scope by an intention to interfere with the petitioners' right to organize. Unfair labor practice refers to acts
of its inherent right to control and manage its enterprise effectively. While the law is solicitous of that violate the workers' right to organize. With the exception of Article 248(f) of the Labor Code of
the welfare of employees, it must also protect the right of an employer to exercise what are clearly the Philippines, the prohibited acts are related to the workers' right to self-organization and to the
management prerogatives. The free will of management to conduct its own business affairs to observance of a CBA. Without that element, the acts, no matter how unfair, are not unfair labor
achieve its purpose cannot be denied.18 practices.26

This prerogative extends to the management's right to regulate, according to its own discretion and Finally, we do not agree with the petitioners' assertion that the MOA is not enforceable as it is
judgment, all aspects of employment, including the freedom to transfer and reassign employees contrary to law. The MOA is enforceable and binding against the petitioners. Where it is shown that
according to the requirements of its business. 19 Management's prerogative of transferring and the person making the waiver did so voluntarily, with full understanding of what he was doing, and
reassigning employees from one area of operation to another in order to meet the requirements of the consideration for the quitclaim is credible and reasonable, the transaction must be recognized
the business is, therefore, generally not constitutive of constructive dismissal. 20 Thus, the as a valid and binding undertaking.27
consequent transfer of Tryco's personnel, assigned to the Production Department was well within
the scope of its management prerogative. D.O. No. 21 sanctions the waiver of overtime pay in consideration of the benefits that the employees
will derive from the adoption of a compressed workweek scheme, thus:
When the transfer is not unreasonable, or inconvenient, or prejudicial to the employee, and it does The compressed workweek scheme was originally conceived for establishments wishing to save
not involve a demotion in rank or diminution of salaries, benefits, and other privileges, the employee on energy costs, promote greater work efficiency and lower the rate of employee absenteeism,
may not complain that it amounts to a constructive dismissal. 21 However, the employer has the among others. Workers favor the scheme considering that it would mean savings on the increasing
burden of proving that the transfer of an employee is for valid and legitimate grounds. The employer cost of transportation fares for at least one (1) day a week; savings on meal and snack expenses;
must show that the transfer is not unreasonable, inconvenient, or prejudicial to the employee; nor longer weekends, or an additional 52 off-days a year, that can be devoted to rest, leisure, family
does it involve a demotion in rank or a diminution of his salaries, privileges and other benefits. 22 responsibilities, studies and other personal matters, and that it will spare them for at least another
day in a week from certain inconveniences that are the normal incidents of employment, such as
Indisputably, in the instant case, the transfer orders do not entail a demotion in rank or diminution commuting to and from the workplace, travel time spent, exposure to dust and motor vehicle
of salaries, benefits and other privileges of the petitioners. Petitioners, therefore, anchor their fumes, dressing up for work, etc. Thus, under this scheme, the generally observed workweek of
objection solely on the ground that it would cause them great inconvenience since they are all six (6) days is shortened to five (5) days but prolonging the working hours from Monday to Friday
residents of Metro Manila and they would incur additional expenses to travel daily from Manila to without the employer being obliged for pay overtime premium compensation for work performed
Bulacan. in excess of eight (8) hours on weekdays, in exchange for the benefits abovecited that will accrue
to the employees.
Moreover, the adoption of a compressed workweek scheme in the company will help temper any G.R. No. 126383 November 28, 1997
inconvenience that will be caused the petitioners by their transfer to a farther workplace.
SAN JUAN DE DIOS HOSPITAL EMPLOYEES ASSOCIATION-AFW/MA. CONSUELO
MACQUILING LEONARDO MARTINEZ, DOMINGO ELA, JR., RODOLFO CALUCIN, JR., PERLA
Notably, the MOA complied with the following conditions set by the DOLE, under D.O. No. 21, to
MENDOZA, REX RAPHAEL REYES, ROGELIO BELMONTE, and 375 other EMPLOYEE-UNION
protect the interest of the employees in the implementation of a compressed workweek scheme:
MEMBERS, petitioners,
1. The employees voluntarily agree to work more than eight (8) hours a day the total in a week
vs.
of which shall not exceed their normal weekly hours of work prior to adoption of the compressed
NATIONAL LABOR RELATIONS COMMISSION, and SAN JUAN DE DIOS
workweek arrangement;
HOSPITAL, respondents.
2. There will not be any diminution whatsoever in the weekly or monthly take-home pay and fringe
benefits of the employees;
FRANCISCO, J.:
3. If an employee is permitted or required to work in excess of his normal weekly hours of work
prior to the adoption of the compressed workweek scheme, all such excess hours shall be Petitioners, the rank-and-file employee-union officers and members of San Juan De Dios Hospital
considered overtime work and shall be compensated in accordance with the provisions of the Labor Employees Association, sent on July 08, 1991, a "four (4)-page letter with attached support
Code or applicable Collective Bargaining Agreement (CBA); signatures . . . requesting and pleading for the expeditious implementation and payment by
4. Appropriate waivers with respect to overtime premium pay for work performed in excess of respondent" Juan De Dios Hospital "of the '40-HOURS/5-DAY WORKWEEK' with compensable weekly
eight (8) hours a day may be devised by the parties to the agreement. two (2) days off provided for by Republic Act 5901 as clarified for enforcement by the Secretary of
5. The effectivity and implementation of the new working time arrangement shall be by agreement Labor's Policy Instructions No. 54 dated April 12, 1988." 1 Respondent hospital failed to give a
of the parties. favorable response; thus, petitioners filed a complaint regarding their "claims for statutory benefits
under the above-cited law and policy issuance" 2, docketed as NLRC NCR Case No. 00-08-04815-
PESALA v. NLRC,28 cited by the petitioners, is not applicable to the present case. In that case, an 19. On February 26, 1992, the Labor Arbiter 3 dismissed the complaint. Petitioners appealed before
employment contract provided that the workday consists of 12 hours and the employee will be paid public respondent National Labor Relations Commission 4 (NLRC), docketed as NLRC NCR CA
a fixed monthly salary rate that was above the legal minimum wage. However, unlike the present 003028-92, which affirmed the Labor Arbiter's decision. Petitioners' subsequent motion for
MOA which specifically states that the employee waives his right to claim overtime pay for work reconsideration was denied; hence, this petition under Rule 65 of the Rules of Court ascribing grave
rendered beyond eight hours, the employment contract in that case was silent on whether overtime abuse of discretion on the part of NLRC in concluding that Policy Instructions No. 54 "proceeds from
pay was included in the payment of the fixed monthly salary. This necessitated the interpretation a wrong interpretation of RA 5901" 5 and Article 83 of the Labor Code.
by the Court as to whether the fixed monthly rate provided under the employment contract included
overtime pay. The Court noted that if the employee is paid only the minimum wage but with overtime As the Court sees it, the core issue is whether Policy Instructions No. 54 issued by then Labor
pay, the amount is still greater than the fixed monthly rate as provided in the employment contract. Secretary (now Senator) Franklin M. Drilon is valid or not.
It, therefore, held that overtime pay was not included in the agreed fixed monthly rate.
The policy instruction in question provides in full as follows:

Considering that the MOA clearly states that the employee waives the payment of overtime pay in Policy Instruction No. 54
exchange of a five-day workweek, there is no room for interpretation and its terms should be
implemented as they are written. To: All Concerned

Subject: Working Hours and Compensation of Hospital/Clinic Personnel


WHEREFORE, the petition is DENIED. The Court of Appeals Decision dated July 24, 2001 and
Resolution dated December 20, 2001 are AFFIRMED.
This issuance clarifies the enforcement policy of this Department on the working hours and
compensation of personnel employed by hospitals/clinics with a bed capacity of 100 or more and
those located in cities and municipalities with a population of one million or more.

Republic Act 5901 took effect on 21 June 1969 prescribes a 40-hour/5 day work week for
hospital/clinic personnel. At the same time, the Act prohibits the diminution of the compensation
of these workers who would suffer a reduction in their weekly wage by reason of the shortened
workweek prescribed by the Act. In effect, RA 5901 requires that the covered hospital workers
who used to work seven (7) days a week should be paid for such number of days for working only
5 days or 40 hours a week.

The evident intention of RA 5901 is to reduce the number of hospital personnel, considering the
nature of their work, and at the same time guarantee the payment to them of a full weekly wage
for seven (7) days. This is quite clear in the Exemplary Note of RA 5901 which states:

As compared with the other employees and laborers, these hospital and health clinic personnel
are over-worked despite the fact that their duties are more delicate in nature. If we offer them
better working conditions, it is believed that the "brain drain", that our country suffers nowadays eight hours a day, five days per week for health personnel, and (2) where the exigencies of service
as far as these personnel are concerned will be considerably lessened. The fact that these hospitals require that health personnel work for six days or forty-eight hours then such health personnel shall
and health clinics personnel perform duties which are directly concerned with the health and lives be entitled to an additional compensation of at least thirty percent of their regular wage for work on
of our people does not mean that they should work for a longer period than most employees and the sixth day. There is nothing in the law that supports then Secretary of Labor's assertion that
laborers. They are also entitled to as much rest as other workers. Making them work longer than "personnel in subject hospitals and clinics are entitled to a full weekly wage for seven (7) days if
is necessary may endanger, rather than protect the health of their patients. Besides, they are not they have completed the 40-hour/5-day workweek in any given workweek". Needless to say, the
receiving better pay than the other workers. Therefore, it is just and fair that they may be made Secretary of Labor exceeded his authority by including a two days off with pay in contravention of
to enjoy the privileges of equal working hours with other workers except those excepted by law. the clear mandate of the statute. Such act the Court shall not countenance. Administrative
(Sixth Congress of the Republic of the Philippines, Third Session, House of Representatives, H. No. interpretation of the law, we reiterate, is at best merely advisory, 7 and the Court will not hesitate
16630) to strike down an administrative interpretation that deviates from the provision of the statute.

The Labor Code in its Article 83 adopts and incorporates the basic provisions of RA 5901 Indeed, even if we were to subscribe with petitioners' erroneous assertion that Republic Act No.
and retains its spirit and intent which is to shorten the workweek of covered hospital personnel 5901 has neither been amended nor repealed by the Labor Code, we nevertheless find Policy
and at the same time assure them of a full weekly wage. Instructions No. 54 invalid. A perusal of Republic Act No. 5901 8 reveals nothing therein that gives
two days off with pay for health personnel who complete a 40-hour work or 5-day workweek. In
Consistent with such spirit and intent, it is the position of the Department that personnel in subject fact, the Explanatory Note of House Bill No. 16630 (later passed into law as Republic Act No. 5901)
hospital and clinics are entitled to a full weekly wage for seven (7) days if they have completed explicitly states that the bill's sole purpose is to shorten the working hours of health personnel and
the 40-hour/5-day workweek in any given workweek. not to dole out a two days off with pay.

All enforcement and adjudicatory agencies of this Department shall be guided by this issuance in Hence:
the disposition of cases involving the personnel of covered hospitals and clinics.
The accompanying bill seeks to grant resident physicians, staff nurses, nutritionist, midwives,
Done in the City of Manila, this 12th day of April, 1988. attendants and other hospital and health clinic personnel of public and private hospitals and
clinics, the privilege of enjoying the eight hours a week exclusive of time for lunch granted by law
(Sgd.) FRANKLIN M. DRILON
to all government employees and workers except those employed in schools and in courts. At
Secretary
present those hospitals and clinics, work six days a week, 8 hours a day or 48 hours a week.

We note that Policy Instruction No. 54 relies and purports to implement Republic Act No. 5901,
As compared with the other employees and laborers, these hospital and health clinic personnel
otherwise known as "An Act Prescribing Forty Hours A Week Of Labor For Government and Private
are over-worked despite the fact that their duties are more delicate in nature. If we offer them
Hospitals Or Clinic Personnel", enacted on June 21, 1969. Reliance on Republic Act No. 5901,
better working conditions, it is believed that the "brain drain", that our country suffers nowadays
however, is misplaced for the said statute, as correctly ruled by respondent NLRC, has long been
as far as these personnel are concerned will be considerably lessened. The fact that these hospitals
repealed with the passage of the Labor Code on May 1, 1974, Article 302 of which explicitly provides:
and health clinic personnel perform duties which are directly concerned with the health and lives
"All labor laws not adopted as part of this Code either directly or by reference are hereby repealed.
of our people does not mean that they should work for a longer period than most employees and
All provisions of existing laws, orders, decree, rules and regulations inconsistent herewith are
laborers. They are also entitled to as much rest as other workers. Making them work longer than
likewise repealed." Accordingly, only Article 83 of the Labor Code which appears to have substantially
is necessary may endanger, rather than protect, the health of their patients. Besides, they are not
incorporated or reproduced the basic provisions of Republic Act No. 5901 may support Policy receiving better pay than the other workers. Therefore, it is just and fair that they be made to
Instructions No. 54 on which the latter's validity may be gauged. Article 83 of the Labor Code states: enjoy the privileges of equal working hours with other workers except those excepted by law.

Art. 83. Normal Hours of Work. — The normal hours of work of any employee shall not exceed
In the light of the foregoing, approval of this bill is strongly recommended.
eight (8) hours a day.
(SGD.) SERGIO H. LOYOLA
Health personnel in cities and municipalities with a population of at least one million (1,000,000)
or in hospitals and clinics with a bed capacity of at least one hundred (100) shall hold regular office "Congressman, 3rd District
hours for eight (8) hours a day, for five (5) days a week, exclusive of time for meals, except where Manila" (Annex "F" of petition, emphasis supplied)
the exigencies of the service require that such personnel work for six (6) days or forty-eight (48)
hours, in which case they shall be entitled to an additional compensation of at least thirty per cent Further, petitioners' position is also negated by the very rules and regulations promulgated by the
(30%) of their regular wage for work on the sixth day. For purposes of this Article, "health Bureau of Labor Standards which implement Republic Act No. 5901. Pertinent portions of the
personnel" shall include: resident physicians, nurses, nutritionists, dietitians, pharmacists, social implementing rules provide:
workers, laboratory technicians, paramedical technicians, psychologists, midwives, attendants and
all other hospital or clinic personnel. (Emphasis supplied) RULES AND REGULATIONS IMPLEMENTING
REPUBLIC ACT NO. 5901
A cursory reading of Article 83 of the Labor Code betrays petitioners' position that "hospital
employees" are entitled to "a full weekly salary with paid two (2) days' off if they have completed By virtue of Section 79 of the Revised Administrative Code, as modified by section 18 of
the 40-hour/5-day workweek". 6 What Article 83 merely provides are: (1) the regular office hour of Implementation Report for Reorganization Plan No. 20-A on Labor, vesting in the Bureau of Labor
Standards the authority to promulgate rules and regulations to implement wage and hour laws,
the following rules and regulations to are hereby issued for the implementation of Republic Act G.R. No. 132805 February 2, 1999
No. 5901.
PHILIPPINE AIRLINES, INC., petitioner,
CHAPTER I — Coverage
vs.
NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER ROMULUS PROTACIO and
Sec. 1. General Statement on Coverage. Republic Act No. 5901, hereinafter referred to as the Act,
DR. HERMINIO A. FABROS, respondents.
shall apply to:

(a) All hospitals and clinics, including those with a bed capacity of less than one hundred, which Petitioner Philippine Airlines, Inc. assails the decision of the National Labor Relations Commission dismissing its
are situated in cities or municipalities with a population of one million or more; and to appeal from the decision of Labor Arbiter Romulus S. Protacio which declared the suspension of private respondent
Dr. Herminio A. Fabros illegal and ordered petitioner to pay private respondent the amount equivalent to all the
benefits he should have received during his period of suspension plus P500,000.00 moral damages.
(b) All hospitals and clinics with a bed capacity of at least one hundred, irrespective of the size of
population of the city or municipality where they may be situated.
The facts are as follow:
Sec. 7. Regular Working Day. The regular working days of covered employees shall be not more
than five days in a workweek. The workweek may begin at any hour and on any day, including Private respondent was employed as flight surgeon at petitioner company. He was assigned at the
Saturday or Sunday, designated by the employer. PAL Medical Clinic at Nichols and was on duty from 4:00 in the afternoon until 12:00 midnight.

Employers are not precluded from changing the time at which the workday or workweek begins,
provided that the change is not intended to evade the requirements of these regulations on the On February 17, 1994, at around 7:00 in the evening, private respondent left the clinic to have his
payment of additional compensation. dinner at his residence, which was about five-minute drive away. A few minutes later, the clinic
received an emergency call from the PAL Cargo Services. One of its employees, Mr. Manuel Acosta,
Sec. 15. Additional Pay Under the Act and C.A. No. 444. (a) Employees of covered hospitals and had suffered a heart attack. The nurse on duty, Mr. Merlino Eusebio, called private respondent at
clinics who are entitled to the benefits provided under the Eight-Hour Labor Law, as amended, home to inform him of the emergency. The patient arrived at the clinic at 7:50 in the evening and
shall be paid an additional compensation equivalent to their regular rate plus at least twenty-five Mr. Eusebio immediately rushed him to the hospital. When private respondent reached the clinic at
percent thereof for work performed on Sunday and Holidays, not exceeding eight hours, such around 7:51 in the evening, Mr. Eusebio had already left with the patient. Mr. Acosta died the
employees shall be entitled to an additional compensation of at least 25% of their regular rate. following day.

(b) For work performed in excess of forty hours a week, excluding those rendered in excess of Upon learning about the incident, PAL Medical Director Dr. Godofredo B. Banzon ordered the Chief
eight hours a day during the week, employees covered by the Eight-Hour Labor Law shall be Flight Surgeon to conduct an investigation. The Chief Flight Surgeon, in turn, required private
entitled to an additional straight-time pay which must be equivalent at least to their regular rate. respondent to explain why no disciplinary sanction should be taken against him.

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 In his explanation, private respondent asserted that he was entitled to a thirty-minute meal break;
plus at least twenty-five percent thereof for work performed on Sunday to health personnel, or an that he immediately left his residence upon being informed by Mr. Eusebio about the emergency and
"additional straight-time pay which must be equivalent at least to the regular rate" "[f]or work he arrived at the clinic a few minutes later; that Mr. Eusebio panicked and brought the patient to
performed in excess of forty hours a week. . . . Policy Instructions No. 54 to our mind unduly the hospital without waiting for him.
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 Finding private respondent's explanation unacceptable, the management charged private
construction that when the language of the law is clear and unequivocal, the law must be taken to respondent with abandonment of post while on duty. He was given ten days to submit a written
mean exactly what it says. 9 No additions or revisions may be permitted. Policy Instructions No. 54 answer to the administrative charge.
being inconsistent with and repugnant to the provision of Article 83 of the Labor Code, as well as to
Republic Act No. 5901, should be, as it is hereby, declared void. In his answer, private respondent reiterated the assertions in his previous explanation. He further
denied that he abandoned his post on February 17, 1994. He said that he only left the clinic to have
WHEREFORE, the decision appealed from is AFFIRMED. No costs. his dinner at home. In fact, he returned to the clinic at 7:51 in the evening upon being informed of
the emergency.

After evaluating the charge as well as the answer of private respondent, petitioner company decided
to suspend private respondent for three months effective December 16, 1994.

Private respondent filed a complaint for illegal suspension against petitioner.

On July 16, 1996, Labor Arbiter Romulus A. Protasio rendered a decision 1 declaring the suspension
of private respondent illegal. It also ordered petitioner to pay private respondent the amount
equivalent to all the benefits he should have received during his period of suspension plus personnel" shall include: resident physicians, nurses, nutritionists, dieticians, pharmacists, social
P500,000.00 moral damages. The dispositive portion of the decision reads: workers, laboratory technicians, paramedical technicians, psychologists, midwives, attendants and
WHEREFORE, in view of all the foregoing, judgment is hereby rendered declaring the suspension all other hospital or clinic personnel. (emphasis supplied)
of complainant as illegal, and ordering the respondents the restitution to the complainant of all
employment benefits equivalent to his period of suspension, and the payment to the complainant Art. 85. Meal periods. — Subject to such regulations as the Secretary of Labor may prescribe, it
of P500,000.00 by way of moral damages.2 shall be the duty of every employer to give his employees not less than sixty (60) minutes time-
off for their regular meals.
Petitioner appealed to the NLRC. The NLRC, however, dismissed the appeal after finding that the
decision of the Labor Arbiter is supported by the facts on record and the law on the matter. 3 The Sec. 7, Rule I, Book III of the Omnibus Rules Implementing the Labor Code further states:
NLRC likewise denied petitioner's motion for reconsideration.4 Sec. 7. Meal and Rest Periods. — Every employer shall give his employees, regardless of sex, not
less than one (1) hour time-off for regular meals, except in the following cases when a meal period
Hence, this petition raising the following arguments: of not less than twenty (20) minutes may be given by the employer provided that such shorter
1. The public respondents acted without or in excess of their jurisdiction and with grave abuse of meal period is credited as compensable hours worked of the employee;
discretion in nullifying the 3-month suspension of private respondent despite the fact that the (a) Where the work is non-manual work in nature or does not involve strenuous physical
private respondent has committed an offense that warranted the imposition of disciplinary action. exertion;
2. The public respondents acted without or in excess of their jurisdiction and with grave abuse of (b) Where the establishment regularly operates not less than sixteen hours a day;
discretion in holding the petitioner liable for moral damages: (c) In cases of actual or impending emergencies or there is urgent work to be performed on
(a) Despite the fact that no formal hearing whatsoever was conducted for complainant to machineries, equipment or installations to avoid serious loss which the employer would
substantiate his claim; otherwise suffer; and
(b) Despite the absence of proof that the petitioner acted in bad faith in imposing the 3-month (d) Where the work is necessary to prevent serious loss of perishable goods.
suspension; and Rest periods or coffee breaks running from five (5) to twenty (20) minutes shall be considered as
(c) Despite the fact that the Labor Arbiter's award of moral damages is highly irregular, compensable working time.
considering that it was more than what the private respondent prayed for. 5
Thus, the eight-hour work period does not include the meal break. Nowhere in the law may it be
We find that public respondents did not err in nullifying the three-month suspension of private inferred that employees must take their meals within the company premises. Employees are not
respondent. They, however, erred in awarding moral damages to private respondent. prohibited from going out of the premises as long as they return to their posts on time. Private
respondent's act, therefore, of going home to take his dinner does not constitute abandonment.
First, as regards the legality of private respondent's suspension. The facts do not support petitioner's
allegation that private respondent abandoned his post on the evening of February 17, 1994. Private We now go to the award of moral damages to private respondent.
respondent left the clinic that night only to have his dinner at his house, which was only a few
minutes' drive away from the clinic. His whereabouts were known to the nurse on duty so that he Not every employee who is illegally dismissed or suspended is entitled to damages. As a rule, moral
could be easily reached in case of emergency. Upon being informed of Mr. Acosta's condition, private damages are recoverable only where the dismissal or suspension of the employee was attended by
respondent immediately left his home and returned to the clinic. These facts belie petitioner's claim bad faith or fraud, or constituted an act oppressive to labor, or was done in a manner contrary to
of abandonment. morals, good customs or public policy.6 Bad faith does not simply mean negligence or bad judgment.
It involves a state of mind dominated by ill will or motive. It implies a conscious and intentional
Petitioner argues that being a full-time employee, private respondent is obliged to stay in the design to do a wrongful act for a dishonest purpose or some moral obliquity. 7 The person claiming
company premises for not less than eight (8) hours. Hence, he may not leave the company premises moral damages must prove the existence of bad faith by clear and convincing evidence for the law
during such time, even to take his meals. always presumes good faith.8

We are not impressed. In the case at bar, there is no showing that the management of petitioner company was moved by
some evil motive in suspending private respondent. It suspended private respondent on an honest,
Art. 83 and 85 of the Labor Code read: albeit erroneous, belief that private respondent's act of leaving the company premises to take his
meal at home constituted abandonment of post which warrants the penalty of suspension. Also, it
is evident from the facts that petitioner gave private respondent all the opportunity to refute the
Art. 83. Normal hours of work. — The normal hours of work of any employee shall not exceed
charge against him and to defend himself. These negate the existence of bad faith on the part of
eight (8) hours a day.
petitioner. Under the circumstances, we hold that private respondent is not entitled to moral
Health personnel in cities and municipalities with a population of at least one million (1,000,000)
damages.
or in hospitals and clinics with a bed capacity of at least one hundred (100) shall hold regular office
hours for eight (8) hours a day, for five (5) days a week, exclusive of time for meals, except where
the exigencies of the service require that such personnel work for six (6) days or forty-eight (48) IN VIEW WHEREOF, the petition is PARTIALLY GRANTED. The portion of the assailed decision
hours, in which case they shall be entitled to an additional compensation of at least thirty per cent awarding moral damages to private respondent is DELETED. All other aspects of the decision are
(30%) of their regular wage for work on the sixth day. For purposes of this Article, "health AFFIRMED.
G.R. No. 119205 April 15, 1998 Private respondent appealed to respondent National Labor Relations Commission (NLRC) which
sustained the Labor Arbiter and dismissed the appeal. 4 However, upon motion for reconsideration
SIME DARBY PILIPINAS, INC. petitioner, by private respondent, the NLRC, this time with two (2) new commissioners replacing those who
vs. earlier retired, reversed its earlier decision of 20 April 1994 as well as the decision of the Labor
NATIONAL LABOR RELATIONS COMMISSION (2ND DIVISION) and SIME DARBY SALARIED Arbiter.5 The NLRC considered the decision of this Court in the Sime Darby case of 1990 as the law
EMPLOYEES ASSOCIATION (ALU-TUCP), respondents. of the case wherein petitioner was ordered to pay "the money value of these covered employees
deprived of lunch and/or working time breaks." The public respondent declared that the new work
BELLOSILLO, J.: schedule deprived the employees of the benefits of a time-honored company practice of providing
its employees a 30-minute paid lunch break resulting in an unjust diminution of company privileges
Is the act of management in revising the work schedule of its employees and discarding their paid
prohibited by Art. 100 of the Labor Code, as amended. Hence, this petition alleging that public
lunch break constitutive of unfair labor practice?
respondent committed grave abuse of discretion amounting to lack or excess of jurisdiction: (a) in
Sime Darby Pilipinas, Inc., petitioner, is engaged in the manufacture of automotive tires, tubes and ruling that petitioner committed unfair labor practice in the implementation of the change in the
other rubber products. Sime Darby Salaried Employees Association (ALU-TUCP), private respondent, work schedule of its employees from 7:45 a.m. — 3:45 p.m. to 7:45 a.m. — 4:45 p.m. with one-
is an association of monthly salaried employees of petitioner at its Marikina factory. Prior to the hour lunch break from 12:00 nn to 1:00 p.m.; (b) in holding that there was diminution of benefits
present controversy, all company factory workers in Marikina including members of private when the 30-minute paid lunch break was eliminated; (c) in failing to consider that in the earlier
respondent union worked from 7:45 a.m. to 3:45 p.m. with a 30-minute paid "on call" lunch break. Sime Darby case affirming the decision of the NLRC, petitioner was authorized to discontinue the
practice of having a 30-minute paid lunch break should it decide to do so; and, (d) in ignoring
On 14 August 1992 petitioner issued a memorandum to all factory-based employees advising all its petitioner's inherent management prerogative of determining and fixing the work schedule of its
monthly salaried employees in its Marikina Tire Plant, except those in the Warehouse and Quality employees which is expressly recognized in the collective bargaining agreement between petitioner
Assurance Department working on shifts, a change in work schedule effective 14 September 1992 and private respondent.
thus —
The Office of the Solicitor General filed in a lieu of comment a manifestation and motion
TO: ALL FACTORY-BASED EMPLOYEES recommending that the petitioner be granted, alleging that the 14 August 1992 memorandum which
RE: NEW WORK SCHEDULE contained the new work schedule was not discriminatory of the union members nor did it constitute
Effective Monday, September 14, 1992, the new work schedule of the factory office will be as unfair labor practice on the part of petitioner.
follows:
7:45 A.M. — 4:45 P.M. (Monday to Friday) We agree, hence, we sustain petitioner. The right to fix the work schedules of the employees rests
7:45 A.M. — 11:45 A.M. (Saturday). principally on their employer. In the instant case petitioner, as the employer, cites as reason for the
Coffee break time will be ten minutes only anytime between: adjustment the efficient conduct of its business operations and its improved production. 6 It
9:30 A.M. — 10:30 A.M. and rationalizes that while the old work schedule included a 30-minute paid lunch break, the employees
2:30 P.M. — 3:30 P.M. could be called upon to do jobs during that period as they were "on call." Even if denominated as
Lunch break will be between: lunch break, this period could very well be considered as working time because the factory
12:00 NN — 1:00 P.M. (Monday to Friday). employees were required to work if necessary and were paid accordingly for working. With the new
Excluded from the above schedule are the Warehouse and QA employees who are on shifting. work schedule, the employees are now given a one-hour lunch break without any interruption from
Their work and break time schedules will be maintained as it is now. 1 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
Since private respondent felt affected adversely by the change in the work schedule and efficiency and better performance in their work. Since the employees are no longer required to work
discontinuance of the 30-minute paid "on call" lunch break, it filed on behalf of its members a during this one-hour lunch break, there is no more need for them to be compensated for this period.
complaint with the Labor Arbiter for unfair labor practice, discrimination and evasion of liability We agree with the Labor Arbiter that the new work schedule fully complies with the daily work period
pursuant to the resolution of this Court in Sime Darby International Tire of eight (8) hours without violating the Labor Code. 7 Besides, the new schedule applies to all
Co., Inc. v. NLRC.2 However, the Labor Arbiter dismissed the complaint on the ground that the employees in the factory similarly situated whether they are union members or not. 8
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, Consequently, it was grave abuse of discretion for public respondent to equate the earlier Sime
break time and one-hour lunch break did not have the effect of diminishing the benefits granted to Darby case9 with the facts obtaining in this case. That ruling in the former case is not applicable
factory workers as the working time did not exceed eight (8) hours. here. The issue in that case involved the matter of granting lunch breaks to certain employees while
depriving the other employees of such breaks. This Court affirmed in that case the NLRC's finding
The Labor Arbiter further held that the factory workers would be unjustly enriched if they continued that such act of management was discriminatory and constituted unfair labor practice.
to be paid during their lunch break even if they were no longer "on call" or required to work during
the break. He also ruled that the decision in the earlier Sime Darby case 3 was not applicable to the The case before us does not pertain to any controversy involving discrimination of employees but
instant case because the former involved discrimination of certain employees who were not paid for only the issue of whether the change of work schedule, which management deems necessary to
their 30-minute lunch break while the rest of the factory workers were paid; hence, this Court increase production, constitutes unfair labor practice. As shown by the records, the change effected
ordered that the discriminated employees be similarly paid the additional compensation for their by management with regard to working time is made to apply to all factory employees engaged in
lunch break. the same line of work whether or not they are members of private respondent union. Hence, it
cannot be said that the new scheme adopted by management prejudices the right of private G.R. No. 78210 February 28, 1989
respondent to self-organization.
TEOFILO ARICA, DANILO BERNABE, MELQUIADES DOHINO, ABONDIO OMERTA, GIL TANGIHAN, SAMUEL
LABAJO, NESTOR NORBE, RODOLFO CONCEPCION, RICARDO RICHA, RODOLFO NENO, ALBERTO
Every business enterprise endeavors to increase its profits. In the process, it may devise means to
BALATRO, BENJAMIN JUMAMOY, FERMIN DAAROL, JOVENAL ENRIQUEZ, OSCAR BASAL, RAMON ACENA,
attain that goal. Even as the law is solicitous of the welfare of the employees, it must also protect JAIME BUGTAY, and 561 OTHERS, HEREIN REPRESENTED BY KORONADO B. APUZEN, petitioners
the right of an employer to exercise what are clearly management prerogatives. 10 Thus, vs.
management is free to regulate, according to its own discretion and judgment, all aspects of NATIONAL LABOR RELATIONS COMMISSION, HONORABLE FRANKLIN DRILON, HONORABLE CONRADO B.
employment, including hiring, work assignments, working methods, time, place and manner of work, MAGLAYA, HONORABLE ROSARIO B. ENCARNACION, and STANDARD (PHILIPPINES) FRUIT
processes to be followed, supervision of workers, working regulations, transfer of employees, work CORPORATION, respondents.

supervision, lay off of workers and discipline, dismissal and recall of workers. 11 Further,
PARAS, J.:
management retains the prerogative, whenever exigencies of the service so require, to change the
working hours of its employees. So long as such prerogative is exercised in good faith for the This is a petition for review on certiorari of the decision of the National Labor Relations Commission
advancement of the employer's interest and not for the purpose of defeating or circumventing the dated December 12, 1986 in NLRC Case No. 2327 MC-XI-84 entitled Teofilo Arica et al. vs. Standard
rights of the employees under special laws or under valid agreements, this Court will uphold such (Phil.) Fruits Corporation (STANFILCO) which affirmed the decision of Labor Arbiter Pedro C. Ramos,
exercise.12 NLRC, Special Task Force, Regional Arbitration Branch No. XI, Davao City dismissing the claim of
petitioners.
While the Constitution is committed to the policy of social justice and the protection of the working
class, it should not be supposed that every dispute will be automatically decided in favor of labor. This case stemmed from a complaint filed on April 9, 1984 against private respondent Stanfilco for
Management also has rights which, as such, are entitled to respect and enforcement in the interest assembly time, moral damages and attorney's fees, with the aforementioned Regional Arbitration
of simple fair play. Although this Court has inclined more often than not toward the worker and has Branch No. XI, Davao City.
upheld his cause in his conflicts with the employer, such favoritism has not blinded the Court to the
rule that justice is in every case for the deserving, to be dispensed in the light of the established After the submission by the parties of their respective position papers (Annex "C", pp. 30-40; Annex
facts and the applicable law and doctrine.13 "D", Rollo, pp. 41-50), Labor Arbiter Pedro C. Ramos rendered a decision dated October 9, 1985
(Annex 'E', Rollo, pp. 51-58) in favor of private respondent STANFILCO, holding that:
WHEREFORE, the Petition is GRANTED. The Resolution of the National Labor Relations Commission Given these facts and circumstances, we cannot but agree with respondent that the
dated 29 November 1994 is SET ASIDE and the decision of the Labor Arbiter dated 26 November pronouncement in that earlier case, i.e. the thirty-minute assembly time long practiced cannot be
1993 dismissing the complaint against petitioner for unfair labor practice is AFFIRMED. considered waiting time or work time and, therefore, not compensable, has become the law of the
case which can no longer be disturbed without doing violence to the time- honored principle of res-
judicata.
WHEREFORE, in view of the foregoing considerations, the instant complaint should therefore be,
as it is hereby, DISMISSED.

On December 12, 1986, after considering the appeal memorandum of complainant and the
opposition of respondents, the First Division of public respondent NLRC composed of Acting Presiding
Commissioner Franklin Drilon, Commissioner Conrado Maglaya, Commissioner Rosario D.
Encarnacion as Members, promulgated its Resolution, upholding the Labor Arbiters' decision. The
Resolution's dispositive portion reads:
'Surely, the customary functions referred to in the above- quoted provision of the agreement
includes the long-standing practice and institutionalized non-compensable assembly time. This, in
effect, estopped complainants from pursuing this case.
The Commission cannot ignore these hard facts, and we are constrained to uphold the dismissal
and closure of the case.
WHEREFORE, let the appeal be, as it is hereby dismissed, for lack of merit.

On January 15, 1987, petitioners filed a Motion for Reconsideration which was opposed by private
respondent (Annex "I", Rollo, pp. 90-91; Annex J Rollo, pp. 92-96).

Public respondent NLRC, on January 30, 1987, issued a resolution denying for lack of merit
petitioners' motion for reconsideration (Annex "K", Rollo, p. 97).

Hence this petition for review on certiorari filed on May 7, 1987.

The Court in the resolution of May 4, 1988 gave due course to this petition.
Petitioners assign the following issues: is also bare of any proof on this point. This, therefore, demonstrates the indubitable fact that the
1) Whether or not the 30-minute activity of the petitioners before the scheduled working time is thirty (30)-minute assembly time was not primarily intended for the interests of the employer, but
compensable under the Labor Code. ultimately for the employees to indicate their availability or non-availability for work during every
2) Whether or not res judicata applies when the facts obtaining in the prior case and in the case working day. (Annex "E", Rollo, p. 57).
at bar are significantly different from each other in that there is merit in the case at bar.
3) Whether or not there is finality in the decision of Secretary Ople in view of the compromise Accordingly, the issues are reduced to the sole question as to whether public respondent National
agreement novating it and the withdrawal of the appeal. Labor Relations Commission committed a grave abuse of discretion in its resolution of December 17,
4) Whether or not estoppel and laches lie in decisions for the enforcement of labor standards 1986.

Petitioners contend that the preliminary activities as workers of respondents STANFILCO in the The facts on which this decision was predicated continue to be the facts of the case in this questioned
assembly area is compensable as working time (from 5:30 to 6:00 o'clock in the morning) since resolution of the National Labor Relations Commission.
these preliminary activities are necessarily and primarily for private respondent's benefit.
It is clear that herein petitioners are merely reiterating the very same claim which they filed through
These preliminary activities of the workers are as follows: the ALU and which records show had already long been considered terminated and closed by this
(a) First there is the roll call. This is followed by getting their individual work assignments from Court in G.R. No. L-48510. Therefore, the NLRC can not be faulted for ruling that petitioners' claim
the foreman. is already barred by res-judicata.
(b) Thereafter, they are individually required to accomplish the Laborer's Daily Accomplishment
Be that as it may, petitioners' claim that there was a change in the factual scenario which are
Report during which they are often made to explain about their reported accomplishment the
"substantial changes in the facts" makes respondent firm now liable for the same claim they earlier
following day.
filed against respondent which was dismissed. It is thus axiomatic that the non-compensability of
(c) Then they go to the stockroom to get the working materials, tools and equipment.
the claim having been earlier established, constitute the controlling legal rule or decision between
(d) Lastly, they travel to the field bringing with them their tools, equipment and materials.
the parties and remains to be the law of the case making this petition without merit.
All these activities take 30 minutes to accomplish (Rollo, Petition, p. 11).
As aptly observed by the Solicitor General that this petition is "clearly violative of the familiar
Contrary to this contention, respondent avers that the instant complaint is not new, the very same principle of res judicata. There will be no end to this controversy if the light of the Minister of Labor's
claim having been brought against herein respondent by the same group of rank and file employees decision dated May 12, 1979 that had long acquired the character of finality and which already
in the case of Associated Labor Union and Standard Fruit Corporation, NLRC Case No. 26-LS-XI-76 resolved that petitioners' thirty (30)-minute assembly time is not compensable, the same issue can
which was filed way back April 27, 1976 when ALU was the bargaining agent of respondent's rank be re-litigated again." (Rollo, p. 183)
and file workers. The said case involved a claim for "waiting time", as the complainants purportedly
This Court has held:
were required to assemble at a designated area at least 30 minutes prior to the start of their
In this connection account should be taken of the cognate principle that res judicata operates to
scheduled working hours "to ascertain the work force available for the day by means of a roll call,
bar not only the relitigation in a subsequent action of the issues squarely raised, passed upon and
for the purpose of assignment or reassignment of employees to such areas in the plantation where
adjudicated in the first suit, but also the ventilation in said subsequent suit of any other issue
they are most needed." (Rollo, pp. 64- 65)
which could have been raised in the first but was not. The law provides that 'the judgment or order
Noteworthy is the decision of the Minister of Labor, on May 12, 1978 in the aforecited case is, with respect to the matter directly adjudged or as to any other matter that could have been
(Associated Labor Union vs. Standard (Phil.) Fruit Corporation, NLRC Case No. 26-LS-XI-76 where raised in relation thereto, conclusive between the parties and their successors in interest by title
significant findings of facts and conclusions had already been made on the matter. subsequent to the commencement of the action .. litigating for the same thing and in the same
capacity.' So, even if new causes of action are asserted in the second action (e.g. fraud, deceit,
The Minister of Labor held: undue machinations in connection with their execution of the convenio de transaccion), this would
not preclude the operation of the doctrine of res judicata. Those issues are also barred, even if
The thirty (30)-minute assembly time long practiced and institutionalized by mutual consent of not passed upon in the first. They could have been, but were not, there raised. (Vda. de Buncio v.
the parties under Article IV, Section 3, of the Collective Bargaining Agreement cannot be Estate of the late Anita de Leon, 156 SCRA 352 [1987]).
considered as waiting time within the purview of Section 5, Rule I, Book III of the Rules and
Regulations Implementing the Labor Code. ... Moreover, as a rule, the findings of facts of quasi-judicial agencies which have acquired expertise
because their jurisdiction is confined to specific matters are accorded not only respect but at times
Furthermore, the thirty (30)-minute assembly is a deeply- rooted, routinary practice of the even finality if such findings are supported by substantial evidence.
employees, and the proceedings attendant thereto are not infected with complexities as to deprive
the workers the time to attend to other personal pursuits. They are not new employees as to The records show that the Labor Arbiters' decision dated October 9, 1985 (Annex "E", Petition)
require the company to deliver long briefings regarding their respective work assignments. Their pointed out in detail the basis of his findings and conclusions, and no cogent reason can be found to
houses are situated right on the area where the farm are located, such that after the roll call, disturb these findings nor of those of the National Labor Relations Commission which affirmed the
which does not necessarily require the personal presence, they can go back to their houses to same.
attend to some chores. In short, they are not subject to the absolute control of the company
during this period, otherwise, their failure to report in the assembly time would justify the company PREMISES CONSIDERED, the petition is DISMISSED for lack of merit and the decision of the National
to impose disciplinary measures. The CBA does not contain any provision to this effect; the record Labor Relations Commission is AFFIRMED.
[G.R. No. L-63122. February 20, 1984.] 5. ID.; ID.; ID.; PRESIDENTIAL DECREE 451; CONSTRUED. — Respondent overlooks the elemental
principle of statutory construction that the general statements in the whereas clauses cannot prevail
UNIVERSITY OF PANGASINAN FACULTY UNION, Petitioner, v. UNIVERSITY OF over the specific or particular statements in the law itself which define or limit the purposes of the
PANGASINAN And NATIONAL LABOR RELATIONS COMMISSION, Respondents. legislation or proscribe certain acts. True, the whereas clauses of PD 451 provide for salary and or
wage increase and other benefits, however, the same do not delineate the source of such funds and
it is only in Section 3 which provides for the limitations wherein the intention of the framers of the
SYLLABUS
law is clearly outlined. The law is clear. The sixty (60%) percent incremental proceeds from the
tuition increase are to be devoted entirely to wage or salary increases which means increases in
1. LABOR AND SOCIAL LEGISLATIONS; LABOR LAWS; PRESIDENTIAL DECREES ON basic salary. The law cannot be construed to include allowances which are benefits over and above
EMERGENCY COST OF LIVING ALLOWANCE; REQUISITES FOR ENTITLEMENT TO the basic salaries of the employees.
ALLOWANCES PROVIDED THEREUNDER. — The various Presidential Decrees on ECOLAs to
wit: PD’s 1614, 1634, 1678 and 1713, provide on "Allowances of Fulltime Employees . . ."
6. REMEDIAL LAW; APPEALS; FINDINGS OF FACT OF NATIONAL LABOR RELATIONS COMMISSION
that "Employees shall be paid in full the required monthly allowance regardless of the
ARE BINDING WHEN FULLY SUBSTANTIATED BY EVIDENCE. — As evidenced by the payrolls
number of their regular working days if they incur no absences during the month. If they
submitted by them during the period September 16 to September 30, 1981, the faculty members
incur absences without pay, the amounts corresponding to the absences may be deducted
have been paid for the extra loads. We agree with the respondents that this issue involves a question
from the monthly allowance . . ." ; and on "Leave of Absence Without Pay", that "All
of fact properly within the competence of the respondent NLRC to pass upon. The findings of fact of
covered employees shall be entitled to the allowance provided herein when they are on
the respondent Commission are binding on this Court there being no indication of their being
leave of absence with pay."
unsubstantiated by evidence.

2. ID.; ID.; ID.; "NO WORK, NO PAY" PRINCIPLE NOT APPLICABLE’ CASE AT BAR. — It is
DECISION
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 This is a petition for review on certiorari pursuant to Rule 65 of the Rules of Court to annul and to
on leave during semestral breaks. These semestral breaks are in the nature of work set aside the decision of respondent National Labor Relations Commission (NLRC) dated October 25,
interruptions beyond the employees’ control. The duration of the semestral break varies 1982, dismissing the appeal of petitioner in NLRC Case No. RBI-47-82, entitled "University of
from year to year dependent on a variety of circumstances affecting at times only the Pangasinan Faculty Union, complainant, versus University of Pangasinan, Respondent."
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 Petitioner is a labor union composed of faculty members of the respondent University of Pangasinan,
deductions may be made from monthly allowances. The "No work, no pay" principle does an educational institution duly organized and existing by virtue of the laws of the Philippines.
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 On December 18, 1981, the petitioner, through its President, Miss Consuelo Abad, filed a complaint
a "no work" situation where the employees voluntarily absent themselves. Petitioners, in against the private respondent with the Arbitration Branch of the NLRC, Dagupan District Office,
the case at bar, certainly do not, ad voluntatem, absent themselves during semestral Dagupan City. The complaint seeks: (a) the payment of Emergency Cost of Living Allowances
breaks. Rather, they are constrained to take mandatory leave from work. For this they (ECOLA) for November 7 to December 5, 1981, a semestral break; (b) salary increases from the
cannot be faulted nor can they be begrudged that which is due them under the law. sixty (60%) percent of the incremental proceeds of increased tuition fees; and (c) payment of
salaries for suspended extra loads.
3. ID.; ID.; ID.; EMPLOYEES WHETHER PAID ON MONTHLY OR DAILY BASIS ENTITLED TO
DAILY LIVING ALLOWANCE WHEN PAID THEIR BASIC WAGE. — Respondent’s contention The petitioner’s members are full-time professors, instructors, and teachers of respondent
that the "factor receiving a salary alone should not be the basis of receiving ECOLA", is University. The teachers in the college level teach for a normal duration of ten (10) months a school
likewise, without merit. Particular attention is brought to the Implementing Rules and year, divided into two (2) semesters of five (5) months each, excluding the two (2) months summer
Regulations of Wage Order No. 1 to wit: "Sec. 5. Allowance for Unworked Days. — a) All vacation. These teachers are paid their salaries on a regular monthly basis.
covered employees whether paid on a monthly or daily basis shall be entitled to their daily
living allowance when they are paid their basic.." . .
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
4. ID.; ID.; ID.; PURPOSE OF THE LAW. — The legal principles of "No work, no pay; No pay, their ECOLA. The private respondent claims that the teachers are not entitled thereto because the
no ECOLA" must necessarily give way to the purpose of the law to augment the income of semestral break is not an integral part of the school year and there being no actual services rendered
employees to enable them to cope with the harsh living conditions brought about by by the teachers during said period, the principle of "No work, no pay" applies.
inflation; and to protect employees and their wages against the ravages brought by these
conditions. Significantly, it is the commitment of the State to protect labor and to provide
During the same school year (1981-1982), the private respondent was authorized by the Ministry of
means by which the difficulties faced by the working force may best be alleviated.
Education and Culture to collect, as it did collect, from its students a fifteen (15%) percent increase
of tuition fees. Petitioner’s members demanded a salary increase effective the first semester of said
schoolyear to be taken from the sixty (60%) percent incremental proceeds of the increased tuition
fees. Private respondent refused, compelling the petitioner to include said demand in the complaint SECTION 5. Allowance for Unworked Days. —
filed in the case at bar. While the complaint was pending in the arbitration branch, the private "a) All covered employees whether paid on a monthly or daily basis shall be entitled to their daily
respondent granted an across-the-board salary increase of 5.86%. Nonetheless, the petitioner is living allowance when they are paid their basic wage."
still pursuing full distribution of the 60% of the incremental proceeds as mandated by the Presidential
Decree No. 451. This provision, at once refutes the above contention. It is evident that the intention of the law is to
grant ECOLA upon the payment of basic wages. Hence, we have the principle of "No pay, no ECOLA"
Aside from their regular loads, some of petitioner’s members were given extra loads to handle during the converse of which finds application in the case at bar. Petitioners cannot be considered to be on
the same 1981-1982 schoolyear. Some of them had extra loads to teach on September 21, 1981, leave without pay so as not to be entitled to ECOLA, for, as earlier stated, the petitioners were paid
but they were unable to teach as classes in all levels throughout the country were suspended, their wages in full for the months of November and December of 1981, notwithstanding the
although said days was proclaimed by the President of the Philippines as a working holiday. Those intervening semestral break. This, in itself, is a tacit recognition of the rather unusual state of affairs
with extra loads to teach on said day claimed they were not paid their salaries for those loads, but in which teachers find themselves. Although said to be on forced leave, professors and teachers are,
the private respondent claims otherwise. nevertheless, burdened with the task of working during a period of time supposedly available for
rest and private matters. There are papers to correct, students to evaluate, deadlines to meet, and
The issue to be resolved in the case at bar are the following:chanrob1es virtual 1aw library periods within which to submit grading reports. Although they may be considered by the respondent
I. "WHETHER OR NOT PETITIONER’S MEMBERS ARE ENTITLED TO ECOLA DURING THE to be on leave, the semestral break could not be used effectively for the teacher’s own purposes for
SEMESTRAL BREAK FROM NOVEMBER 7 TO DECEMBER 5, 1981 OF THE 1981-82 SCHOOL YEAR. the nature of a teacher’s job imposes upon him further duties which must be done during the said
II. "WHETHER OR NOT 60% OF THE INCREMENTAL PROCEEDS OF INCREASED TUITION FEES period of time. Learning is a never ending process. Teachers and professors must keep abreast of
SHALL BE DEVOTED EXCLUSIVELY TO SALARY INCREASE, developments all the time. Teachers cannot also wait for the opening of the next semester to begin
III. "WHETHER OR NOT ALLEGED PAYMENT OF SALARIES FOR EXTRA LOADS ON SEPTEMBER 21, their work. Arduous preparation is necessary for the delicate task of educating our children. Teaching
1981 WAS PROVEN BY SUBSTANTIAL EVIDENCE." involves not only an application of skill and an imparting of knowledge, but a responsibility which
entails self dedication and sacrifice. The task of teaching ends not with the perceptible efforts of the
petitioner’s members but goes beyond the classroom: a continuum where only the visible labor is
Anent the first issue, the various Presidential Decrees on ECOLAs to wit: PD’s 1614, 1634, 1678 and
relieved by academic intermissions. It would be most unfair for the private respondent to consider
1713, provide on "Allowances of Fulltime Employees . . ." that "Employees shall be paid in full the
these teachers as employees on leave without pay to suit its purposes and, yet, in the meantime,
required monthly allowance regardless of the number of their regular working days if they incur no
continue availing of their services as they prepare for the next semester or complete all of the last
absences during the month. If they incur absences without pay, the amounts corresponding to the
semester’s requirements. Furthermore, we may also by analogy apply the principle enunciated in
absences may be deducted from the monthly allowance . . ." ; and on "Leave of Absence Without
the Omnibus Rules Implementing the Labor Code to wit:
Pay", that "All covered employees shall be entitled to the allowance provided herein when they are
Sec. 4. Principles in Determining Hours Worked. — The following general principles shall govern
on leave of absence with pay."
in determining whether the time spent by an employee is considered hours worked for purposes
of this Rule:
It is beyond dispute that the petitioner’s members are full-time employees receiving their monthly "(d) The time during which an employee is inactive by reason of interruptions in his work beyond
salaries irrespective of the number of working days or teaching hours in a month. However, they his control shall be considered time either if the imminence of the resumption of work requires
find themselves in a most peculiar situation whereby they are forced to go on leave during semestral the employee’s presence at the place of work or if the interval is too brief to be utilized effectively
breaks. These semestral breaks are in the nature of work interruptions beyond the employees’ and gainfully in the employee’s own interest." (Emphasis supplied).
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
The petitioner’s members in the case at bar, are exactly in such a situation. The semestral break
institutions in the country. As such, these breaks cannot be considered as absences within the
scheduled is an interruption beyond petitioner’s control and it cannot be used "effectively nor
meaning of the law for which deductions may be made from monthly allowances. The "No work, no
gainfully in the employee’s interest’. Thus, the semestral break may also be considered as "hours
pay" principle does not apply in the instant case. The petitioner’s members received their regular
worked." For this, the teachers are paid regular salaries and, for this, they should be entitled to
salaries during this period. It is clear from the aforequoted provision of law that it contemplates a
ECOLA. Not only do the teachers continue to work during this short recess but much less do they
"no work" situation where the employees voluntarily absent themselves. Petitioners, in the case at
cease to live for which the cost of living allowance is intended. The legal principles of "No work, no
bar, certainly do not, ad voluntatem, absent themselves during semestral breaks. Rather, they are
pay; No pay, no ECOLA" must necessarily give way to the purpose of the law to augment the income
constrained to take mandatory leave from work. For this they cannot be faulted nor can they be
of employees to enable them to cope with the harsh living conditions brought about by inflation;
begrudged that which is due them under the law. To a certain extent, the private respondent can
and to protect employees and their wages against the ravages brought by these conditions.
specify dates when no classes would be held. Surely, it was not the intention of the framers of the
Significantly, it is the commitment of the State to protect labor and to provide means by which the
law to allow employers to withhold employee benefits by the simple expedient of unilaterally
difficulties faced by the working force may best be alleviated. To submit to the respondents’
imposing "no work" days and consequently avoiding compliance with the mandate of the law for
interpretation of the no work, no pay policy is to defeat this noble purpose. The Constitution and the
those days.
law mandate otherwise.

Respondent’s contention that "the fact of receiving a salary alone should not be the basis of receiving
With regard to the second issue, we are called upon to interpret and apply Section 3 of Presidential
ECOLA", is, likewise, without merit. Particular attention is brought to the Implementing Rules and
Decree 451 to wit:
Regulations of Wage Order No. 1 to wit.
SEC. 3. Limitations. — The increase in tuition or other school fees or other charges as well as the the 60% incremental proceeds would be to reduce the increase in basic salary provided by law, an
new fees or charges authorized under the next preceding section shall be subject to the following increase intended also to help the teachers and other workers tide themselves and their families
conditions: over these difficult economic times.
"(a) That no increase in tuition or other school fees or charges shall be approved unless sixty
(60%) per centum of the proceeds is allocated for increase in salaries or wages of the members This Court is not guilty of usurpation of legislative functions as claimed by the respondents. We
of the faculty and all other employees of the school concerned, and the balance for institutional expressed the opinion in the University of the East case that benefits mandated by law and collective
development, student assistance and extension services, and return to investments: Provided, bargaining may be charged to the 12% return on investments within the 40% incremental proceeds
That in no case shall the return to investments exceed twelve (12%) per centum of the of tuition increase. As admitted by respondent, we merely made this statement as a suggestion in
incremental proceeds; . . ." answer to the respondent’s query as to where then, under the law, can such benefits be charged.
We were merely interpreting the meaning of the law within the confines of its provisions. The law
This Court had the occasion to rule squarely on this point in the very recent case entitled, University provides that 60% should go to wage increases and 40% to institutional developments, student
of the East v. University of the East Faculty Association, 117 SCRA 554. We held that: assistance, extension services, and return on investments (ROI). Under the law, the last item ROI
"In effect, the problem posed before Us is whether or not the reference in Section 3(a) to ‘increase has flexibility sufficient to accommodate other purposes of the law and the needs of the university.
in salaries or wages of the faculty and all other employees of the schools concerned’ as the first ROI is not set aside for any one purpose of the university such as profits or returns on investments.
purpose to which the incremental proceeds from authorized increases to tuition fees may be The amount may be used to comply with other duties and obligations imposed by law which the
devoted, may be construed to include allowances and benefits. In the negative, which is the university exercising managerial prerogatives finds cannot under present circumstances, be funded
position of respondents, it would follow that such allowances must be taken in resources of the by other revenue sources. It may be applied to any other collateral purpose of the university or
school not derived from tuition fees. invested elsewhere. Hence, the framers of the law intended this portion of the increases in tuition
fees to be a general fund to cover up for the university’s miscellaneous expenses and, precisely, for
"Without delving into the factual issue of whether or not there could be any such other resources, this reason, it was not so delimited. Besides, ROI is a return or profit over and above the operating
We note that among the items of second purpose stated in provision in question is return in expenditures of the university, and still, over and above the profits it may have had prior to the
investment. And the law provides only for a maximum, not a minimum. In other words, the schools tuition increase. The earning capacities of private educational institutions are not dependent on the
may get a return to investment of not more than 12%, but if circumstances warrant, there is no increases in tuition fees allowed by P.D. 451. Accommodation of the allowances required by law
minimum fixed by law which they should get. require wise and prudent management of all the university resources together with the incremental
proceeds of tuition increases. Cognizance should be taken of the fact that the private respondent
had, before PD 451, managed to grant all allowances required by law. It cannot now claim that it
"On this predicate, We are of the considered view that, if the school happen to have no other
could not afford the same, considering that additional funds are even granted them by the law in
resources to grant allowances and benefits, either mandated by law or secured by collective
question. We find no compelling reason, therefore, to deviate from our previous ruling in the
bargaining, such allowances and benefits should be charged against the return to investments
University of the East case even as we take the second hard look at the decision requested by the
referred to in the second purpose stated in Section 3(a) of P.D. 451."
private Respondent. This case was decided in 1982 when PDs 1614, 1634, 1678, and 1713 which
are also the various Presidential Decrees on ECOLA were already in force. PD 451 was interpreted
Private respondent argues that the above interpretation "disregarded the intention and spirit of the in the light of these subsequent legislations which bear upon but do not modify nor amend, the
law" which intention is clear from the "whereas" clauses as follows: same. We need not go beyond the ruling in the University of the East case.
"It is imperative that private educational institutions upgrade classroom instruction . . . provide
salary and or wage increases and other benefits . . ."
Coming now to the third issue, the respondents are of the considered view that as evidenced by the
payrolls submitted by them during the period September 16 to September 30, 1981, the faculty
Respondent further contends that PD 451 was issued to alleviate the sad plight of private schools, members have been paid for the extra loads. We agree with the respondents that this issue involves
their personnel and all those directly or indirectly on school income as the decree was aimed — a question of fact properly within the competence of the respondent NLRC to pass upon. The findings
". . . to upgrade classroom instruction by improving their facilities and bring competent teachers of fact of the respondent Commission are binding on this Court there being no indication of their
in all levels of education, provide salary and or wage increases and other benefits to their teaching, being unsubstantiated by evidence. We find no grave abuse in the findings of respondent NLRC on
administrative, and other personnel to keep up with the increasing cost of living." (Emphasis this matter to warrant reversal. Assuming arguendo, however, that the petitioners have not been
supplied) paid for these extra loads, they are not entitled to payment following the principles of "No work, no
pay." This time, the rule applies. Involved herein is a matter different from the payment of ECOLA
Respondent overlooks the elemental principle of statutory construction that the general statements under the first issue. We are now concerned with extra, not regular loads for which the petitioners
in the whereas clauses cannot prevail over the specific or particular statements in the law itself are paid regular salaries every month regardless of the number of working days or hours in such a
which define or limit the purposes of the legislation or proscribe certain acts. True, the whereas month. Extra loads should be paid for only when actually performed by the employee. Compensation
clauses of PD 451 provide for salary and or wage increase and other benefits, however, the same is based, therefore, on actual work done and on the number of hours and days spent over and
do not delineate the source of such funds and it is only in Section 3 which provides for the limitations beyond their regular hours of duty. Since there was no work on September 21, 1981, it would now
wherein the intention of the framers of the law is clearly outlined. The law is clear. The sixty (60%) be unfair to grant petitioner’s demand for extra wages on that day.
percent incremental proceeds from the tuition increase are to be devoted entirely to wage or salary
increases which means increases in basic salary. The law cannot be construed to include allowances Finally, disposing of the respondent’s charge of petitioner’s lack of legal capacity to sue, suffice it to
which are benefits over and above the basic salaries of the employees. To charge such benefits to say that this question can no longer be raised initially on appeal or certiorari. It is quite belated for
the private respondent to question the personality of the petitioner after it had dealt with it as a G.R. No. 76746 July 27, 1987
party in the proceedings below. Furthermore, it was not disputed that the petitioner is a duly
registered labor organization and as such has the legal capacity to sue and be sued. Registration DURABUILT RECAPPING PLANT & COMPANY and EDUARDO LAO, GENERAL
grants it the rights of a legitimate labor organization and recognition by the respondent University MANAGER, petitioners,
is not necessary for it to institute this action in behalf of its members to protect their interests and vs.
obtain relief from grievances. The issues raised by the petitioner do not involve pure money claims NATIONAL LABOR RELATIONS COMMISSION, HON. COMM. RICARDO C. CASTRO, HON.
but are more intricately intertwined with conditions of employment. ARBITER AMELIA M. GULOY, KAPISANAN NG MGA MANGGAGAWA SA DURABUILT and
REYNALDO BODEGAS, respondents.
WHEREFORE the petition for certiorari is hereby GRANTED. The private respondent is ordered to pay
its regular fulltime teachers/employees emergency cost of living allowances for the semestral break This is a petition to review the May 16, 1986 resolution of respondent National Labor Relations Commission (NLRC)
from November 7 to December 5, 1981 and the undistributed balance of the sixty (60%) percent affirming the Labor Arbiter's order in NLRC Case No. NCR-73162083. The sole issue raised is the proper basis for the
incremental proceeds from tuition increases for the same schoolyear as outlined above. The computation of backwages in favor of an illegally dismissed employee.
respondent Commission is sustained insofar as it DENIED the payment of salaries for the suspended
extra loads on September 21, 1981. The facts of the case are simple and uncontroverted.

On July 11, 1983, a complaint for illegal dismissal was filed by respondent Reynaldo Bodegas, against
petitioner Durabuilt, a tire recapping company.

In a decision rendered by the Labor Arbiter on February 13, 1984, the private respondent was
ordered reinstated to his former position with full backwages, from the time he was terminated up
to the time he is actually reinstated, without loss of seniority rights and benefits accruing to him.

The petitioners failed to file a seasonable appeal and entry of final judgment was made on July 8,
1985.

On August 8, 1985, the Acting Chief of Research and Information and the Corporation Auditing
Examiner of the then Ministry of Labor and Employment submitted a computation of backwages,
ECOLA, 13th month pay, sick and vacation leave benefits in favor of Reynaldo Bodegas in the total
amount of P24,316.38.

The petitioner filed its opposition to the computation on the ground that it contemplated a straight
computation of twenty six (26) working days in one month when the period covered by the
computation was intermittently interrupted due to frequent brownouts and machine trouble and that
respondent Bodegas had only a total of 250.75 days of attendance in 1982 due to absences.
According to the petitioner, Bodegas is entitled only to the amount of P3,834.05 broken down as
follows: salaries — P1,993.00; ECOLA — P1,433.50, and 13th month pay — P407.55.

On October 23, 1985, the Labor Arbiter denied the opposition to the computation. The petitioner
appealed to the NLRC which, in an order dated May 16, 1986, affirmed the order of the Labor Arbiter
and dismissed the appeal.

Claiming grave abuse of discretion on the part of the public respondents, Durabuilt filed the instant
petition.

Backwages, in general, are granted on grounds of equity for earnings which a worker or employee
has lost due to his dismissal from work (New Manila Candy Workers Union (NACONWA-PAFLU v.
CIR, 86 SCRA 37).

The general principle is that an employee is entitled to receive as backwages all the amounts he
may have lost starting from the date of his dismissal up to the time of his reinstatement
In a line of cases, this Court has established a policy fixing the amount of backwages to a just and Moreover, as early as May 1978, the Ministry of Labor and Employment, thru Policy Instruction
reasonable level without qualification or deduction. The respondents center their attention on the No. 36, has said that —
above underlined portion of this policy. Hence, their contention that the deductions cited by the 2. Brownouts running for more than twenty minutes may not be treated as hours worked
petitioners cannot be made. provided that any of the following conditions are present;
a) The employees can leave their work place or go elsewhere whether within or without the
In their bid to recover a greater amount of backwages, the rationale of the policy has escaped the work premises; or
respondents' consideration. In Insular Life Assurance Employees Association-NATU v. Insular Life b) The employees can use the time effectively for their own interest.
Assurance Co., Ltd. (76 SCRA 50) we held that to fix the amount of backwages without qualification
or deduction simply means that the workers are to be paid their backwages fixed as of the time of It is of record that during electrical power interruptions, petitioners business was not in operation.
their dismissal or strike without deduction for their earnings elsewhere during their law-off and This was never disputed by private respondent.
without qualification of their backwages as thus fixed; i.e. unqualified by any wage increases or
other benefits that may have been received by their co-workers who were not dismissed or did not Petitioners' claim that the period (December 1983) during which they effected retrenchment of
go on strike. The principle is justified "as a realistic, reasonable and mutually beneficial solution for workers owing to economic crisis then prevailing likewise appears plausible. There is substantial
it relieves the employees from proving their earnings during their law-offs and the employer from evidence consisting of reports to MOLE and Social Security System showing that petitioners had
submitting counter proofs. It was meant to obviate the twin evils of Idleness on the part of the laid off workers due to lack of raw materials. The petitioners payrolls submitted to support their
employees and attrition and undue delay in satisfying the award on the part of the employer". The objection to computation indicate that the number of working days was reduced from the normal
same was not to establish an inflexible rule of computation of any Backwages due an employee. weekly six working days to four working days for a great number of petitioners' workers.
Obviously, private respondent could not have been among those laid off, as at that time he was
The age-old rule governing the relation between labor and capital, or management and employee of already dismissed by petitioner. (Rollo, pp. 31-34).
a "fair day's wage for a fair day's labor" remains as the basic factor in determining employees'
wages, and for that matter backwages. If there is no work performed by the employee there can be Thus, we have held that where the failure of workers to work was not due to the employer's fault,
no wage or pay unless, of course, the laborer was able, willing and ready to work but was illegally the burden of economic loss suffered by the employees should not be shifted to the employer. Each
locked out, or suspended (SSS v. SSS Supervisors Union-CUGCO, 117 SCRA 746). party must bear his own loss. As pointed out by the Solicitor General —
... to allow payment of backwages of P24,316.68 as ordered by public respondents instead of
The illegal dismissal of the private respondent is conceded by the petitioner. It is willing to pay P3,834.16 as petitioners claim and which appears to be just and reasonable under the
backwages. However, the petitioner argues that for days where no work was required and could be circumstances of this case would not only be unconscionable but would be grossly unfair to other
done by its employees, no wages could have been earned and, thereafter, lost by said employees employees who were not paid when petitioners' business was not in operation. (Rollo, p. 35).
to justify an award of backwages. We quote with approval the Solicitor General's comment,* to wit:
Indeed, it would neither be fair nor just to allow respondent to recover something he has not earned
From the indubitable facts on record, it appears that petitioners have valid reasons to claim that and could not have earned and to further penalize the petitioner company over and above the losses
certain days should not be considered days worked for purposes of computing private respondent's it had suffered due to lack of raw materials and the energy-saving programs of the government. The
backwages since their business was not in actual operation due to brownouts or power interruption private respondent cannot be allowed to enrich himself at the expense of the petitioner company.
and the retrenchment of workers they had during the period of private respondent's dismissal. The computation of backwages should be based on daily rather than on monthly pay schedules
where, as in the case at bar, such basis is more realistic and accurate.
It cannot be denied that during the past years particularly in 1983, there was chronic electrical
power interruption resulting to disruption of business operations. To alleviate the situation, the In conclusion, we again quote the Solicitor General's comment:
government thru the Ministry of Trade and Industry called on the industrial sector to resort to the Finally, what strengthens petitioners claim for mitigated liability is their evident good faith as
so-called Voluntary Loan Curtailment Plan (or VLCP), whereby brownouts or electrical power manifested by their reinstatement of private respondent while the case for illegal dismissal was
interruption was scheduled by area. The program while it may have been called 1. voluntary" was still pending and their willingness to pay backwages. While it is true that as a general rule order
not so as electrical power consumers had no choice then due to the prevailing energy crisis. of reinstatement carries with it an award of backwages (Art. 280, Labor Code) this Honorable
Court did not only mitigate but absolved employers from liability of backwages where good faith
Petitioners heeding the government's call, participated in the VLCP as indicated in their statement is evident. There is no indication, to paraphrase this Honorable Court's ruling in Pantranco North
of conformity dated November 23, 1982. Thus, beginning March 21, 1983 and every Wednesday Express Inc. v. NLRC that private respondent was a "victim of arbitrary and high handed action.
thereafter, petitioner's business (which indicentally is recapping rubber tires) was not in actual
operation. No less than the former Minister of Trade and Industry expressed his gratitude to WHEREFORE, in view of the foregoing, the petition is hereby GRANTED. The order of the Labor Arbiter, Amelia M.
petitioners for participating in the VLCP. Petitioners substantiated claim therefore, that the days Guloy in NLRC Case No. NCR-7-3162083, dated October 23, 1985, as affirmed by the NLRC is SET ASIDE. The
petitioner is ordered to pay private respondent his backwages from the time he was terminated up to the time he
during which they were not in operation due to the VLCP should be excluded in the number of
was actually reinstated computed on the basis of the number of days when petitioner's business was in actual
days worked for purposes of computing private respondents backwages stands reasonable and operation. The number of days where no work was required and could be done by petitioner's employees on account
should have been considered by the corporation auditing examiner.1avvphi1 of shutdowns due to electrical power interruptions, machine repair, and lack of raw materials are not considered
hours worked for purposes of computing the petitioner's obligation to respondent employee. In no case shall the
award exceed three year's backpay as above computed.
G.R. No. 96078 January 9, 1992 representing conversion to cash of unused leave credits and financial assistance. Petitioner also
released Respondent from all obligations and/or claims, etc. in a "Release, Waiver and Quitclaim"
HILARIO RADA, petitioner,
vs. Culled from the records, it appears that on May 20, 1987, petitioner filed before the NLRC, National
NATIONAL LABOR RELATIONS COMMISSION (Second Division) and PHILNOR Capital Region, Department of Labor and Employment, a Complaint for non-payment of separation
CONSULTANTS AND PLANNERS, INC., respondents. pay and overtime pay. On June 3, 1987, Philnor filed its Position Paper alleging, inter alia, that
petitioner was not illegally terminated since the project for which he was hired was completed; that
The facts, as stated in the Comment of private respondent Philnor Consultants and Planners, Inc. he was hired under three distinct contracts of employment, each of which was for a definite period,
(Philnor), are as follows: all within the estimated period of MNEE Stage 2 Project, covering different phases or areas of the
said project; that his work was strictly confined to the MNEE Stage 2 Project and that he was never
Petitioner's initial employment with this Respondent was under a "Contract of Employment for a
assigned to any other project of Philnor; that he did not render overtime services and that there was
Definite Period" dated July 7, 1977, copy of which is hereto attached and made an integral part
no demand or claim for him for such overtime pay; that he signed a "Release, Waiver and Quitclaim"
hereof as Annex A whereby Petitioner was hired as "Driver" for the construction supervision phase
releasing Philnor from all obligations and claims; and that Philnor's business is to provide engineering
of the Manila North Expressway Extension, Second Stage (hereinafter referred to as MNEE Stage
consultancy services, including supervision of construction services, such that it hires employees
2) for a term of "about 24 months effective July 1, 1977.
according to the requirements of the project manning schedule of a particular contract. 3

Highlighting the nature of Petitioner's employment, Annex A specifically provides as follows:


On July 2, 1987, petitioner filed an Amended Complaint alleging that he was illegally dismissed and
It is hereby understood that the Employer does not have a continuing need for the services of
that he was not paid overtime pay although he was made to render three hours overtime work form
the Employee beyond the termination date of this contract and that the Employee's services
Monday to Saturday for a period of three years.
shall automatically, and without notice, terminate upon the completion of the above specified
phase of the project; and that it is further understood that the engagement of his/her services On July 7, 1987, petitioner filed his Position Paper claiming that he was illegally dismissed since he
is coterminus with the same and not with the whole project or other phases thereof wherein was a regular employee entitled to security of tenure; that he was not a project employee since
other employees of similar position as he/she have been hired. (Par. 7, emphasis supplied) Philnor is not engaged in the construction business as to be covered by Policy Instructions No. 20;
that the contract of employment for a definite period executed between him and Philnor is against
Petitioner's first contract of employment expired on June 30, 1979. Meanwhile, the main project,
public policy and a clear circumvention of the law designed merely to evade any benefits or liabilities
MNEE Stage 2, was not finished on account of various constraints, not the least of which was
under the statute; that his position as driver was essential, necessary and desirable to the conduct
inadequate funding, and the same was extended and remained in progress beyond the original
of the business of Philnor; that he rendered overtime work until 6:00 p.m. daily except Sundays and
period of 2.3 years. Fortunately for the Petitioner, at the time the first contract of employment
holidays and, therefore, he was entitled to overtime pay. 4
expired, Respondent was in need of Driver for the extended project. Since Petitioner had the
necessary experience and his performance under the first contract of employment was found In his Reply to Respondent's Position Paper, petitioner claimed that he was a regular employee
satisfactory, the position of Driver was offered to Petitioner, which he accepted. Hence a second pursuant to Article 278(c) of the Labor Code and, thus, he cannot be terminated except for a just
Contract of Employment for a Definite Period of 10 months, that is, from July 1, 1979 to April 30, cause under Article 280 of the Code; and that the public respondent's ruling in Quiwa vs. Philnor
1980 was executed between Petitioner and Respondent on July 7, 1979. . . . Consultants and Planners, Inc. 5 is not applicable to his case since he was an administrative
employee working as a company driver, which position still exists and is essential to the conduct of
In March 1980 some of the areas or phases of the project were completed, but the bulk of the
the business of Philnor even after the completion of his contract of employment. 6 Petitioner likewise
project was yet to be finished. By that time some of those project employees whose contracts of avers that the contract of employment for a definite period entered into between him and Philnor
employment expired or were about to expire because of the completion of portions of the project was a ploy to defeat the intent of Article 280 of the Labor Code.
were offered another employment in the remaining portion of the project. Petitioner was among
those whose contract was about to expire, and since his service performance was satisfactory, On July 28, 1987, Philnor filed its Respondent's Supplemental Position Paper, alleging therein that
respondent renewed his contract of employment in April 1980, after Petitioner agreed to the offer. petitioner was not a company driver since his job was to drive the employees hired to work at the
Accordingly, a third contract of employment for a definite period was executed by and between MNEE Stage 2 Project to and from the filed office at Sto. Domingo Interchange, Pampanga; that the
the Petitioner and the Respondent whereby the Petitioner was again employed as Driver for 19 office hours observed in the project were from 7:00 a.m. to 4:00 p.m. Mondays through Saturdays;
months, from May 1, 1980 to November 30, 1981, . . . that Philnor adopted the policy of allowing certain employees, not necessarily the project driver, to
bring home project vehicles to afford fast and free transportation to and from the project field office
This third contract of employment was subsequently extended for a number of times, the last
considering the distance between the project site and the employees' residence, to avoid project
extension being for a period of 3 months, that is, from October 1, 1985 to December 31, 1985.
delays and inefficiency due to employee tardiness caused by transportation problem; that petitioner
was allowed to use a project vehicle which he used to pick up and drop off some ten employees
The last extension, from October 1, 1985 to December 31, 1985 (Annex E) covered by an
along Epifanio de los Santos Avenue (EDSA), on his way home to Marikina, Metro Manila; that when
"Amendment to the Contract of Employment with a Definite Period," was not extended any further
he was absent or on leave, another employee living in Metro Manila used the same vehicle in
because Petitioner had no more work to do in the project. This last extension was confirmed by a
transporting the same employees; that the time used by petitioner to and from his residence to the
notice on November 28, 1985 duly acknowledged by the Petitioner the very next day, . . .
project site from 5:30 a.m. to 7:00 a.m. and from 4:00 p.m. to 6:00 p.m., or about three hours
Sometime in the 2nd week of December 1985, Petitioner applied for "Personnel Clearance" with daily, was not overtime work as he was merely enjoying the benefit and convenience of free
Respondent dated December 9, 1985 and acknowledged having received the amount of P3,796.20 transportation provided by Philnor, otherwise without such vehicle he would have used at least four
hours by using public transportation and spent P12.00 daily fare; that in the case of Quiwa
vs. Philnor Consultants and Planners, Inc., supra, the NLRC upheld Philnor's position that Quiwa was NLRC of February 16, 1990 that the amount of the supersedeas bond was specified and which bond,
a project employee and he was not entitled to termination pay under Policy Instructions No. 20 since after an extension granted by the NLRC, was timely filed by private respondent.
his employment was coterminous with the completion of the project.
Moreover, as provided by Article 221 of the Labor Code, "in any proceeding before the Commission
On August 25, 1987, Philnor filed its Respondent's Reply/Comments to Complainant's Rejoinder and or any of the Labor Arbiters, the rules of evidence prevailing in Courts of law or equity shall not be
Reply, submitting therewith two letters dated January 5, 1985 and February 6, 1985, signed by controlling and it is the spirit and intention of this Code that the Commission and its members and
MNEE Stage 2 Project employees, including herein petitioner, where they asked what termination the Labor Arbiters shall use every and all reasonable means to ascertain the facts in each case
benefits could be given to them as the MNEE Stage 2 Project was nearing completion, and Philnor's speedily and objectively without regard to technicalities of law or procedure, all in the interest of
letter-reply dated February 22, 1985 informing them that they are not entitled to termination due process. 8 Finally, the issue of timeliness of the appeal being an entirely new and unpleaded
benefits as they are contractual/project employees. matter in the proceedings below it may not now be raised for the first time before this Court. 9

On August 31, 1989, Labor Arbiter Dominador M. Cruz rendered a decision 7 with the following 2. Petitioner postulates that as a regular employee, he is entitled to security of tenure, hence he
dispositive portion: cannot be terminated without cause. Private respondent Philnor believes otherwise and asserts that
WHEREFORE, in view of all the foregoing considerations, judgment is hereby rendered: petitioner is merely a project employee who was terminated upon the completion of the project for
(1) Ordering the respondent company to reinstate the complainant to his former position without which he was employed.
loss of seniority rights and other privileges with full backwages from the time of his dismissal to
his actual reinstatement; In holding that petitioner is a regular employee, the labor arbiter found that:
(2) Directing the respondent company to pay the complainant overtime pay for the three excess . . . There is no question that the complainant was employed as driver in the respondent company
hours of work performed during working days from January 1983 to December 1985; and continuously from July 1, 1977 to December 31, 1985 under various contracts of employment.
(3) Dismissing all other claims for lack of merit. Similarly, there is no dispute that respondent Philnor Consultant & Planner, Inc., as its business
name connotes, has been engaged in providing to its client(e)le engineering consultancy services.
Acting on Philnor's appeal, the NLRC rendered its assailed decision dated November 19, 1990, setting The record shows that while the different labor contracts executed by the parties stipulated definite
aside the labor arbiter's aforequoted decision and dismissing petitioner's complaint. periods of engaging the services of the complainant, yet the latter was suffered to continue
performing his job upon the expiration of one contract and the renewal of another. Under these
Hence this petition wherein petitioner charges respondent NLRC with grave abuse of discretion circumstances, the complaint has obtained the status of regular employee, it appearing that he
amounting to lack of jurisdiction for the following reasons: has worked without fail for almost eight years, a fraction of six months considered as one whole
1. The decision of the labor arbiter, dated August 31, 1989, has already become final and year, and that his assigned task as driver was necessary and desirable in the usual trade/business
executory; of the respondent employer. Assuming to be true, as spelled out in the employment contract, that
2. The case of Quiwa vs. Philnor Consultants and Planners, Inc. is not binding nor is it applicable the Employer has no "continuing need for the services of the Employe(e) beyond the termination
to this case; date of this contract and that the Employee's services shall automatically, and without notice,
3. The petitioner is a regular employee with eight years and five months of continuous services terminate upon completion of the above specified phase of the project," still we cannot see our
for his employer, private respondent Philnor; way clear why the complainant was hired and his services engaged contract after contract straight
4. The claims for overtime services, reinstatement and full backwages are valid and meritorious from 1977 to 1985 which, to our considered view, lends credence to the contention that he worked
and should have been sustained; and as regular driver ferrying early in the morning office personnel to the company main office in
5. The decision of the labor arbiter should be reinstated as it is more in accord with the facts, the Pampanga and bringing back late in the afternoon to Manila, and driving company executives for
law and evidence. inspection of construction workers to the jobsites. All told, we believe that the complainant, under
the environmental facts obtaining in the case at bar, is a regular employee, the provisions of
The petition is devoid of merit.
written agreement to the contrary notwithstanding and regardless of the oral understanding of the
parties.
1. Petitioner questions the jurisdiction of respondent NLRC in taking cognizance of the appeal filed
by Philnor in spite of the latter's failure to file a supersedeas bond within ten days from receipt of
On the other hand, respondent NLRC declared that, as between the uncorroborated and unsupported
the labor arbiter's decision, by reason of which the appeal should be deemed to have been filed out
assertions of petitioners and those of private respondent which are supported by documents, greater
of time. It will be noted, however, that Philnor was able to file a bond although it was made beyond
credence should be given the latter. It further held that:
the 10-day reglementary period.
Complainant was hired in a specific project or undertaking as driver. While such project was still
on-going he was hired several times with his employment period fixed every time his contract was
While it is true that the payment of the supersedeas bond is an essential requirement in the
renewed. At the completion of the specific project or undertaking his employment contract was
perfection of an appeal, however, where the fee had been paid although payment was delayed, the
not renewed.
broader interests of justice and the desired objective of resolving controversies on the merits
We reiterate our ruling in the case of (Quiwa) vs. Philnor Consultants and Planners, Inc., NLRC
demands that the appeal be given due course. Besides, it was within the inherent power of the NLRC
RAB III 5-1738-84, it is being applicable in this case, viz.:
to have allowed late payment of the bond, considering that the aforesaid decision of the labor arbiter
. . . While it is true that the activities performed by him were necessary or desirable in the usual
was received by private respondent on October 3, 1989 and its appeal was duly filed on October 13,
business or trade of the respondent as consultants, planners, contractor and while it is also true
1989. However, said decision did not state the amount awarded as backwages and overtime pay,
that the duration of his employment was for a period of about seven years, these circumstances
hence the amount of the supersedeas bond could not be determined. It was only in the order of the
did not make him a regular employee in contemplation of Article 281 of (the) Labor Code. . . . 11
Our ruling in Sandoval Shipyards, Inc. vs. National Labor Relations Commission, et al. 12 is A non-project employee is different in that the employee is hired for more than one project. A non-
applicable to the case at bar. Thus: project employee, vis-a-vis a project employee, is best exemplified in the case of Fegurin, et
We hold that private respondents were project employees whose work was coterminous with the al. vs. National Labor Relations Commission, et al. 14 wherein four of the petitioners had been
project or which they were hired. Project employees, as distinguished from regular or non-project working with the company for nine years, one for eight years, another for six years, the shortest
employees, are mentioned in section 281 of the Labor Code as those "where the employment has term being three years. In holding that petitioners are regular employees, this Court therein
been fixed for a specific project or undertaking the completion or termination of which has been explained:
determined at the time of the engagement of the employee." Considering the nature of the work of petitioners, that of carpenter, laborer or mason, their
respective jobs would actually be continuous and on-going. When a project to which they are
Policy Instructions No. 20 of the Secretary of Labor, which was issued to stabilize employer- individually assigned is completed, they would be assigned to the next project or a phase thereof.
employee relations in the construction industry, provides: In other words, they belonged to a "work pool" from which the company would draw workers for
Project employees are those employed in connection with a particular construction project. Non- assignment to other projects at its discretion. They are, therefore, actually "non-project
project (regular) employees are those employed by a construction company without reference employees."
to any particular project.
Project employees are not entitled to termination pay if they are terminated as a result of the From the foregoing, it is clear that petitioner is a project employee considering that he does not
completion of the project or any phase thereof in which they are employed, regardless of the belong to a "work pool" from which the company would draw workers for assignment to other
number of projects in which they have been employed by a particular construction company. projects at its discretion. It is likewise apparent from the facts obtaining herein that petitioner was
Moreover, the company is not required to obtain clearance from the Secretary of Labor in utilized only for one particular project, the MNEE Stage 2 Project of respondent company. Hence,
connection with such termination. the termination of herein petitioner is valid by reason of the completion of the project and the
expiration of his employment contract.
The petitioner cited three of its own cases wherein the National Labor Relations Commission,
Deputy Minister of Labor and Employment Inciong and the Director of the National Capital Region 3. Anent the claim for overtime compensation, we hold that petitioner is entitled to the same. The
held that the layoff of its project employees was lawful. Deputy Minister Inciong in TFU Case No. fact that he picks up employees of Philnor at certain specified points along EDSA in going to the
1530, In Re Sandoval Shipyards, Inc. Application for Clearance to Terminate Employees, rendered project site and drops them off at the same points on his way back from the field office going home
the following ruling on February 26, 1979; to Marikina, Metro Manila is not merely incidental to petitioner's job as a driver. On the contrary,
said transportation arrangement had been adopted, not so much for the convenience of the
We feel that there is merit in the contention of the applicant corporation. To our mind, the employees, but primarily for the benefit of the employer, herein private respondent. This fact is
employment of the employees concerned were fixed for a specific project or undertaking. For inevitably deducible from the Memorandum of respondent company:
the nature of the business the corporation is engaged into is one which will not allow it to employ The herein Respondent resorted to the above transport arrangement because from its previous
workers for an indefinite period. project construction supervision experiences, Respondent found out that project delays and
inefficiencies resulted from employees' tardiness; and that the problem of tardiness, in turn, was
It is significant to note that the corporation does not construct vessels for sale or otherwise
aggravated by transportation problems, which varied in degrees in proportion to the distance
which will demand continuous productions of ships and will need permanent or regular workers.
between the project site and the employees' residence. In view of this lesson from experience,
It merely accepts contracts for shipbuilding or for repair of vessels form third parties and, only,
and as a practical, if expensive, solution to employees' tardiness and its concomitant problems,
on occasion when it has work contract of this nature that it hires workers to do the job which, Respondent adopted the policy of allowing certain employees — not necessarily project drivers —
needless to say, lasts only for less than a year or longer. to bring home project vehicles, so that employees could be afforded fast, convenient and free
transportation to and from the project field office. . . . 15
The completion of their work or project automatically terminates their employment, in which
case, the employer is, under the law, only obliged to render a report on the termination of the
Private respondent does not hesitate to admit that it is usually the project driver who is tasked with
employment. (139-140, Rollo of G.R. No. 65689) (Emphasis supplied)
picking up or dropping off his fellow employees. Proof thereof is the undisputed fact that when
petitioner is absent, another driver is supposed to replace him and drive the vehicle and likewise
In Cartagenas, et al. vs. Romago Electric Company, Inc., et al., 13 we likewise held that:
pick up and/or drop off the other employees at the designated points on EDSA. If driving these
As an electrical contractor, the private respondent depends for its business on the contracts it is
employees to and from the project site is not really part of petitioner's job, then there would have
able to obtain from real estate developers and builders of buildings. Since its work depends on the
been no need to find a replacement driver to fetch these employees. But since the assigned task of
availability of such contracts or "projects," necessarily the duration of the employment's of this
fetching and delivering employees is indispensable and consequently mandatory, then the time
work force is not permanent but co-terminus with the projects to which they are assigned and
required of and used by petitioner in going from his residence to the field office and back, that is,
from whose payrolls they are paid. It would be extremely burdensome for their employer who,
from 5:30 a.m. to 7:00 a.m. and from 4:00 p.m. to around 6:00 p.m., which the labor arbiter
like them, depends on the availability of projects, if it would have to carry them as permanent
rounded off as averaging three hours each working day, should be paid as overtime work.
employees and pay them wages even if there are no projects for them to work on.
Quintessentially, petitioner should be given overtime pay for the three excess hours of work
It must be stressed herein that although petitioner worked with Philnor as a driver for eight years, performed during working days from January, 1983 to December, 1985.
the fact that his services were rendered only for a particular project which took that same period of
WHEREFORE, subject to the modification regarding the award of overtime pay to herein petitioner,
time to complete categorizes him as a project employee. Petitioner was employed for one specific
the decision appealed from is AFFIRMED in all other respects.
project.
[G.R. No. L-63122. February 20, 1984.] 5. ID.; ID.; ID.; PRESIDENTIAL DECREE 451; CONSTRUED. — Respondent overlooks the elemental
principle of statutory construction that the general statements in the whereas clauses cannot prevail
UNIVERSITY OF PANGASINAN FACULTY UNION, Petitioner, v. UNIVERSITY OF over the specific or particular statements in the law itself which define or limit the purposes of the
PANGASINAN And NATIONAL LABOR RELATIONS COMMISSION, Respondents. legislation or proscribe certain acts. True, the whereas clauses of PD 451 provide for salary and or
wage increase and other benefits, however, the same do not delineate the source of such funds and
it is only in Section 3 which provides for the limitations wherein the intention of the framers of the
SYLLABUS
law is clearly outlined. The law is clear. The sixty (60%) percent incremental proceeds from the
tuition increase are to be devoted entirely to wage or salary increases which means increases in
1. LABOR AND SOCIAL LEGISLATIONS; LABOR LAWS; PRESIDENTIAL DECREES ON basic salary. The law cannot be construed to include allowances which are benefits over and above
EMERGENCY COST OF LIVING ALLOWANCE; REQUISITES FOR ENTITLEMENT TO the basic salaries of the employees.
ALLOWANCES PROVIDED THEREUNDER. — The various Presidential Decrees on ECOLAs to
wit: PD’s 1614, 1634, 1678 and 1713, provide on "Allowances of Fulltime Employees . . ."
6. REMEDIAL LAW; APPEALS; FINDINGS OF FACT OF NATIONAL LABOR RELATIONS COMMISSION
that "Employees shall be paid in full the required monthly allowance regardless of the
ARE BINDING WHEN FULLY SUBSTANTIATED BY EVIDENCE. — As evidenced by the payrolls
number of their regular working days if they incur no absences during the month. If they
submitted by them during the period September 16 to September 30, 1981, the faculty members
incur absences without pay, the amounts corresponding to the absences may be deducted
have been paid for the extra loads. We agree with the respondents that this issue involves a question
from the monthly allowance . . ." ; and on "Leave of Absence Without Pay", that "All
of fact properly within the competence of the respondent NLRC to pass upon. The findings of fact of
covered employees shall be entitled to the allowance provided herein when they are on
the respondent Commission are binding on this Court there being no indication of their being
leave of absence with pay."
unsubstantiated by evidence.

2. ID.; ID.; ID.; "NO WORK, NO PAY" PRINCIPLE NOT APPLICABLE’ CASE AT BAR. — It is
DECISION
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 This is a petition for review on certiorari pursuant to Rule 65 of the Rules of Court to annul and to
on leave during semestral breaks. These semestral breaks are in the nature of work set aside the decision of respondent National Labor Relations Commission (NLRC) dated October 25,
interruptions beyond the employees’ control. The duration of the semestral break varies 1982, dismissing the appeal of petitioner in NLRC Case No. RBI-47-82, entitled "University of
from year to year dependent on a variety of circumstances affecting at times only the Pangasinan Faculty Union, complainant, versus University of Pangasinan, Respondent."
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 Petitioner is a labor union composed of faculty members of the respondent University of Pangasinan,
deductions may be made from monthly allowances. The "No work, no pay" principle does an educational institution duly organized and existing by virtue of the laws of the Philippines.
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 On December 18, 1981, the petitioner, through its President, Miss Consuelo Abad, filed a complaint
a "no work" situation where the employees voluntarily absent themselves. Petitioners, in against the private respondent with the Arbitration Branch of the NLRC, Dagupan District Office,
the case at bar, certainly do not, ad voluntatem, absent themselves during semestral Dagupan City. The complaint seeks: (a) the payment of Emergency Cost of Living Allowances
breaks. Rather, they are constrained to take mandatory leave from work. For this they (ECOLA) for November 7 to December 5, 1981, a semestral break; (b) salary increases from the
cannot be faulted nor can they be begrudged that which is due them under the law. sixty (60%) percent of the incremental proceeds of increased tuition fees; and (c) payment of
salaries for suspended extra loads.
3. ID.; ID.; ID.; EMPLOYEES WHETHER PAID ON MONTHLY OR DAILY BASIS ENTITLED TO
DAILY LIVING ALLOWANCE WHEN PAID THEIR BASIC WAGE. — Respondent’s contention The petitioner’s members are full-time professors, instructors, and teachers of respondent
that the "factor receiving a salary alone should not be the basis of receiving ECOLA", is University. The teachers in the college level teach for a normal duration of ten (10) months a school
likewise, without merit. Particular attention is brought to the Implementing Rules and year, divided into two (2) semesters of five (5) months each, excluding the two (2) months summer
Regulations of Wage Order No. 1 to wit: "Sec. 5. Allowance for Unworked Days. — a) All vacation. These teachers are paid their salaries on a regular monthly basis.
covered employees whether paid on a monthly or daily basis shall be entitled to their daily
living allowance when they are paid their basic.." . .
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
4. ID.; ID.; ID.; PURPOSE OF THE LAW. — The legal principles of "No work, no pay; No pay, their ECOLA. The private respondent claims that the teachers are not entitled thereto because the
no ECOLA" must necessarily give way to the purpose of the law to augment the income of semestral break is not an integral part of the school year and there being no actual services rendered
employees to enable them to cope with the harsh living conditions brought about by by the teachers during said period, the principle of "No work, no pay" applies.
inflation; and to protect employees and their wages against the ravages brought by these
conditions. Significantly, it is the commitment of the State to protect labor and to provide
During the same school year (1981-1982), the private respondent was authorized by the Ministry of
means by which the difficulties faced by the working force may best be alleviated.
Education and Culture to collect, as it did collect, from its students a fifteen (15%) percent increase
of tuition fees. Petitioner’s members demanded a salary increase effective the first semester of said
schoolyear to be taken from the sixty (60%) percent incremental proceeds of the increased tuition
fees. Private respondent refused, compelling the petitioner to include said demand in the complaint SECTION 5. Allowance for Unworked Days. —
filed in the case at bar. While the complaint was pending in the arbitration branch, the private "a) All covered employees whether paid on a monthly or daily basis shall be entitled to their daily
respondent granted an across-the-board salary increase of 5.86%. Nonetheless, the petitioner is living allowance when they are paid their basic wage."
still pursuing full distribution of the 60% of the incremental proceeds as mandated by the Presidential
Decree No. 451. This provision, at once refutes the above contention. It is evident that the intention of the law is to
grant ECOLA upon the payment of basic wages. Hence, we have the principle of "No pay, no ECOLA"
Aside from their regular loads, some of petitioner’s members were given extra loads to handle during the converse of which finds application in the case at bar. Petitioners cannot be considered to be on
the same 1981-1982 schoolyear. Some of them had extra loads to teach on September 21, 1981, leave without pay so as not to be entitled to ECOLA, for, as earlier stated, the petitioners were paid
but they were unable to teach as classes in all levels throughout the country were suspended, their wages in full for the months of November and December of 1981, notwithstanding the
although said days was proclaimed by the President of the Philippines as a working holiday. Those intervening semestral break. This, in itself, is a tacit recognition of the rather unusual state of affairs
with extra loads to teach on said day claimed they were not paid their salaries for those loads, but in which teachers find themselves. Although said to be on forced leave, professors and teachers are,
the private respondent claims otherwise. nevertheless, burdened with the task of working during a period of time supposedly available for
rest and private matters. There are papers to correct, students to evaluate, deadlines to meet, and
The issue to be resolved in the case at bar are the following:chanrob1es virtual 1aw library periods within which to submit grading reports. Although they may be considered by the respondent
I. "WHETHER OR NOT PETITIONER’S MEMBERS ARE ENTITLED TO ECOLA DURING THE to be on leave, the semestral break could not be used effectively for the teacher’s own purposes for
SEMESTRAL BREAK FROM NOVEMBER 7 TO DECEMBER 5, 1981 OF THE 1981-82 SCHOOL YEAR. the nature of a teacher’s job imposes upon him further duties which must be done during the said
II. "WHETHER OR NOT 60% OF THE INCREMENTAL PROCEEDS OF INCREASED TUITION FEES period of time. Learning is a never ending process. Teachers and professors must keep abreast of
SHALL BE DEVOTED EXCLUSIVELY TO SALARY INCREASE, developments all the time. Teachers cannot also wait for the opening of the next semester to begin
III. "WHETHER OR NOT ALLEGED PAYMENT OF SALARIES FOR EXTRA LOADS ON SEPTEMBER 21, their work. Arduous preparation is necessary for the delicate task of educating our children. Teaching
1981 WAS PROVEN BY SUBSTANTIAL EVIDENCE." involves not only an application of skill and an imparting of knowledge, but a responsibility which
entails self dedication and sacrifice. The task of teaching ends not with the perceptible efforts of the
petitioner’s members but goes beyond the classroom: a continuum where only the visible labor is
Anent the first issue, the various Presidential Decrees on ECOLAs to wit: PD’s 1614, 1634, 1678 and
relieved by academic intermissions. It would be most unfair for the private respondent to consider
1713, provide on "Allowances of Fulltime Employees . . ." that "Employees shall be paid in full the
these teachers as employees on leave without pay to suit its purposes and, yet, in the meantime,
required monthly allowance regardless of the number of their regular working days if they incur no
continue availing of their services as they prepare for the next semester or complete all of the last
absences during the month. If they incur absences without pay, the amounts corresponding to the
semester’s requirements. Furthermore, we may also by analogy apply the principle enunciated in
absences may be deducted from the monthly allowance . . ." ; and on "Leave of Absence Without
the Omnibus Rules Implementing the Labor Code to wit:
Pay", that "All covered employees shall be entitled to the allowance provided herein when they are
Sec. 4. Principles in Determining Hours Worked. — The following general principles shall govern
on leave of absence with pay."
in determining whether the time spent by an employee is considered hours worked for purposes
of this Rule:
It is beyond dispute that the petitioner’s members are full-time employees receiving their monthly "(d) The time during which an employee is inactive by reason of interruptions in his work beyond
salaries irrespective of the number of working days or teaching hours in a month. However, they his control shall be considered time either if the imminence of the resumption of work requires
find themselves in a most peculiar situation whereby they are forced to go on leave during semestral the employee’s presence at the place of work or if the interval is too brief to be utilized effectively
breaks. These semestral breaks are in the nature of work interruptions beyond the employees’ and gainfully in the employee’s own interest." (Emphasis supplied).
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
The petitioner’s members in the case at bar, are exactly in such a situation. The semestral break
institutions in the country. As such, these breaks cannot be considered as absences within the
scheduled is an interruption beyond petitioner’s control and it cannot be used "effectively nor
meaning of the law for which deductions may be made from monthly allowances. The "No work, no
gainfully in the employee’s interest’. Thus, the semestral break may also be considered as "hours
pay" principle does not apply in the instant case. The petitioner’s members received their regular
worked." For this, the teachers are paid regular salaries and, for this, they should be entitled to
salaries during this period. It is clear from the aforequoted provision of law that it contemplates a
ECOLA. Not only do the teachers continue to work during this short recess but much less do they
"no work" situation where the employees voluntarily absent themselves. Petitioners, in the case at
cease to live for which the cost of living allowance is intended. The legal principles of "No work, no
bar, certainly do not, ad voluntatem, absent themselves during semestral breaks. Rather, they are
pay; No pay, no ECOLA" must necessarily give way to the purpose of the law to augment the income
constrained to take mandatory leave from work. For this they cannot be faulted nor can they be
of employees to enable them to cope with the harsh living conditions brought about by inflation;
begrudged that which is due them under the law. To a certain extent, the private respondent can
and to protect employees and their wages against the ravages brought by these conditions.
specify dates when no classes would be held. Surely, it was not the intention of the framers of the
Significantly, it is the commitment of the State to protect labor and to provide means by which the
law to allow employers to withhold employee benefits by the simple expedient of unilaterally
difficulties faced by the working force may best be alleviated. To submit to the respondents’
imposing "no work" days and consequently avoiding compliance with the mandate of the law for
interpretation of the no work, no pay policy is to defeat this noble purpose. The Constitution and the
those days.
law mandate otherwise.

Respondent’s contention that "the fact of receiving a salary alone should not be the basis of receiving
With regard to the second issue, we are called upon to interpret and apply Section 3 of Presidential
ECOLA", is, likewise, without merit. Particular attention is brought to the Implementing Rules and
Decree 451 to wit:
Regulations of Wage Order No. 1 to wit.
SEC. 3. Limitations. — The increase in tuition or other school fees or other charges as well as the the 60% incremental proceeds would be to reduce the increase in basic salary provided by law, an
new fees or charges authorized under the next preceding section shall be subject to the following increase intended also to help the teachers and other workers tide themselves and their families
conditions: over these difficult economic times.
"(a) That no increase in tuition or other school fees or charges shall be approved unless sixty
(60%) per centum of the proceeds is allocated for increase in salaries or wages of the members This Court is not guilty of usurpation of legislative functions as claimed by the respondents. We
of the faculty and all other employees of the school concerned, and the balance for institutional expressed the opinion in the University of the East case that benefits mandated by law and collective
development, student assistance and extension services, and return to investments: Provided, bargaining may be charged to the 12% return on investments within the 40% incremental proceeds
That in no case shall the return to investments exceed twelve (12%) per centum of the of tuition increase. As admitted by respondent, we merely made this statement as a suggestion in
incremental proceeds; . . ." answer to the respondent’s query as to where then, under the law, can such benefits be charged.
We were merely interpreting the meaning of the law within the confines of its provisions. The law
This Court had the occasion to rule squarely on this point in the very recent case entitled, University provides that 60% should go to wage increases and 40% to institutional developments, student
of the East v. University of the East Faculty Association, 117 SCRA 554. We held that: assistance, extension services, and return on investments (ROI). Under the law, the last item ROI
"In effect, the problem posed before Us is whether or not the reference in Section 3(a) to ‘increase has flexibility sufficient to accommodate other purposes of the law and the needs of the university.
in salaries or wages of the faculty and all other employees of the schools concerned’ as the first ROI is not set aside for any one purpose of the university such as profits or returns on investments.
purpose to which the incremental proceeds from authorized increases to tuition fees may be The amount may be used to comply with other duties and obligations imposed by law which the
devoted, may be construed to include allowances and benefits. In the negative, which is the university exercising managerial prerogatives finds cannot under present circumstances, be funded
position of respondents, it would follow that such allowances must be taken in resources of the by other revenue sources. It may be applied to any other collateral purpose of the university or
school not derived from tuition fees. invested elsewhere. Hence, the framers of the law intended this portion of the increases in tuition
fees to be a general fund to cover up for the university’s miscellaneous expenses and, precisely, for
"Without delving into the factual issue of whether or not there could be any such other resources, this reason, it was not so delimited. Besides, ROI is a return or profit over and above the operating
We note that among the items of second purpose stated in provision in question is return in expenditures of the university, and still, over and above the profits it may have had prior to the
investment. And the law provides only for a maximum, not a minimum. In other words, the schools tuition increase. The earning capacities of private educational institutions are not dependent on the
may get a return to investment of not more than 12%, but if circumstances warrant, there is no increases in tuition fees allowed by P.D. 451. Accommodation of the allowances required by law
minimum fixed by law which they should get. require wise and prudent management of all the university resources together with the incremental
proceeds of tuition increases. Cognizance should be taken of the fact that the private respondent
had, before PD 451, managed to grant all allowances required by law. It cannot now claim that it
"On this predicate, We are of the considered view that, if the school happen to have no other
could not afford the same, considering that additional funds are even granted them by the law in
resources to grant allowances and benefits, either mandated by law or secured by collective
question. We find no compelling reason, therefore, to deviate from our previous ruling in the
bargaining, such allowances and benefits should be charged against the return to investments
University of the East case even as we take the second hard look at the decision requested by the
referred to in the second purpose stated in Section 3(a) of P.D. 451."
private Respondent. This case was decided in 1982 when PDs 1614, 1634, 1678, and 1713 which
are also the various Presidential Decrees on ECOLA were already in force. PD 451 was interpreted
Private respondent argues that the above interpretation "disregarded the intention and spirit of the in the light of these subsequent legislations which bear upon but do not modify nor amend, the
law" which intention is clear from the "whereas" clauses as follows: same. We need not go beyond the ruling in the University of the East case.
"It is imperative that private educational institutions upgrade classroom instruction . . . provide
salary and or wage increases and other benefits . . ."
Coming now to the third issue, the respondents are of the considered view that as evidenced by the
payrolls submitted by them during the period September 16 to September 30, 1981, the faculty
Respondent further contends that PD 451 was issued to alleviate the sad plight of private schools, members have been paid for the extra loads. We agree with the respondents that this issue involves
their personnel and all those directly or indirectly on school income as the decree was aimed — a question of fact properly within the competence of the respondent NLRC to pass upon. The findings
". . . to upgrade classroom instruction by improving their facilities and bring competent teachers of fact of the respondent Commission are binding on this Court there being no indication of their
in all levels of education, provide salary and or wage increases and other benefits to their teaching, being unsubstantiated by evidence. We find no grave abuse in the findings of respondent NLRC on
administrative, and other personnel to keep up with the increasing cost of living." (Emphasis this matter to warrant reversal. Assuming arguendo, however, that the petitioners have not been
supplied) paid for these extra loads, they are not entitled to payment following the principles of "No work, no
pay." This time, the rule applies. Involved herein is a matter different from the payment of ECOLA
Respondent overlooks the elemental principle of statutory construction that the general statements under the first issue. We are now concerned with extra, not regular loads for which the petitioners
in the whereas clauses cannot prevail over the specific or particular statements in the law itself are paid regular salaries every month regardless of the number of working days or hours in such a
which define or limit the purposes of the legislation or proscribe certain acts. True, the whereas month. Extra loads should be paid for only when actually performed by the employee. Compensation
clauses of PD 451 provide for salary and or wage increase and other benefits, however, the same is based, therefore, on actual work done and on the number of hours and days spent over and
do not delineate the source of such funds and it is only in Section 3 which provides for the limitations beyond their regular hours of duty. Since there was no work on September 21, 1981, it would now
wherein the intention of the framers of the law is clearly outlined. The law is clear. The sixty (60%) be unfair to grant petitioner’s demand for extra wages on that day.
percent incremental proceeds from the tuition increase are to be devoted entirely to wage or salary
increases which means increases in basic salary. The law cannot be construed to include allowances Finally, disposing of the respondent’s charge of petitioner’s lack of legal capacity to sue, suffice it to
which are benefits over and above the basic salaries of the employees. To charge such benefits to say that this question can no longer be raised initially on appeal or certiorari. It is quite belated for
the private respondent to question the personality of the petitioner after it had dealt with it as a G.R. No. 93699 September 10, 1993
party in the proceedings below. Furthermore, it was not disputed that the petitioner is a duly
registered labor organization and as such has the legal capacity to sue and be sued. Registration RAMON PRIETO, PACIFICO CANILLO, and WILFREDO AZUELA, petitioners,
grants it the rights of a legitimate labor organization and recognition by the respondent University vs.
is not necessary for it to institute this action in behalf of its members to protect their interests and NATIONAL LABOR RELATIONS COMMISSION, AR and SONS INTERNATIONAL
obtain relief from grievances. The issues raised by the petitioner do not involve pure money claims DEVELOPMENT CORP., SAUDI SERVICES and OPERATING COMPANY, LTD., and SAUDI
but are more intricately intertwined with conditions of employment. ARABIAN MORRISON, respondents.

CRUZ, J.:
WHEREFORE the petition for certiorari is hereby GRANTED. The private respondent is ordered to pay
its regular fulltime teachers/employees emergency cost of living allowances for the semestral break The petitioners seek modification of the decision of the National Labor Relations Commission dated
from November 7 to December 5, 1981 and the undistributed balance of the sixty (60%) percent May 31, 1990, reversing the decision of the Philippine Overseas Employment Administration dated
incremental proceeds from tuition increases for the same schoolyear as outlined above. The July 24, 1989. It is averred that the public respondent committed grave abuse of discretion in ruling
respondent Commission is sustained insofar as it DENIED the payment of salaries for the suspended in favor of the private respondents, contrary to the evidence on record.
extra loads on September 21, 1981.
This case arose from a complaint filed by Ramon Prieto, Pacifico Canillo and Wilfredo Azuela against
AR and Sons International Development Corporation, Saudi Services and Operations Co. Ltd., and
Saudi Arabian Morrison.1 Their claim was for non-payment of wages, illegal dismissal, illegal exaction
of placement fees, illegal imposition of performance bond, substitution of contract and deployment
of workers to an unaccredited principal.

The complainants alleged they were recruited by AR and Sons International Development
Corporation (AR and Sons) for employment for a period of 24 months with Saudi Services and
Operating Co., Ltd. (SSOC) in Saudi Arabia. The corresponding Agency Worker Agreements, which
were duly approved by the POEA, provided for their respective positions and salaries as follows:

Name Position Salary (per month in

US Dollars)

Prieto Mechanic A/C $370.00


Azuela Mechanic A/C $370.00
Canillo Clerk $420.00

Later, however, taking advantage of their need for employment, the respondent placement agency
coerced them into signing another employment contract with Saudi Arabia Morrison (SAM) without
the knowledge and approval of the POEA. The second contract gave all three of them the lower
positions of assistant cook with a salary of only SR625.00 per month for a period of three years.2

The complainants said that when they reached Jeddah, Saudi Arabia, in November 1987, they were
asked to sign still another employment contract by a certain Muhammad Abbas, a representative of
SAM, which would further lower their salaries to SR250.00 a month. When they refused, they were
not assigned any work but were confined in a small room in a villa and given spoiled food for their
sustenance. On December 22, 1987, they were summarily dismissed and repatriated to the
Philippines.3

The respondents denied the charges and said that the complainants entered into separate uniform
Agency Worker Agreements where it was stipulated that they would be employed by SSOC for 24
months upon departure from the Philippines. When the petitioners arrived in Jeddah, it was
discovered that Prieto and Azuela were not qualified as mechanics and that Canillo was not qualified
as clerk, so all three of them were rejected. The complainants then requested SSOC to help them
secure employment as assistant cooks with SAM, which at that time was also a foreign principal of
AR and Sons. Taking pity on them, SSOC referred them to the latter agency but they also failed to
pass the trade tests for assistant cooks. It was for this reason that they were finally repatriated to
the Philippines at the expense of the latter agency.
After considering the evidence and arguments of the parties, the POEA held in favor of the time to prove their fitness for the positions they were hired. Two weeks for this purpose is not
complainants. The dispositive portion of its decision decreed as follows: enough.
WHEREFORE, in the light of the foregoing, judgment is hereby rendered ordering AR & SONS
INTERNATIONAL DEVELOPMENT CORPORATION and SAUDI ARABIAN MORRISON to pay jointly The private respondents point to the petitioners' allegation in their complaint that they were mere
and severally complainants Ramon Prieto, Pacifico Canillo and Wilfredo Azuela the following assistant cooks and argue that this belies their representation that they did not apply for these
amounts to be paid in Philippine Currency at the prevailing rate of exchange at the rate of actual positions. The argument has no merit. The petitioners were not assisted by lawyers when they filed
payment: their complaint and must have had in mind the positions stipulated in the second contract. In the
amended complaint, this statement was rectified. At any rate, the slight error must not be taken
1. for Ramon Prieto against the petitioners. As we held in Cuadra v. NLRC,6 "our overseas workers are mostly ordinary
a) SIX HUNDRED SIXTEEN US DOLLARS AND 67/100 (US$616.67) representing his salaries from November 2, laborers not conversant with legal principles and with the manner they can assert and protect rights.
1987 to December 22, 1987;
They have no compatriot lawyers to consult and no labor unions to support them in the foreign land.
b) EIGHT THOUSAND TWO HUNDRED SIXTY THREE US DOLLARS AND 33/100 (US$8,263.33) representing his
salaries for the unexpired portion of his employment contract.
. . . The claims of our overseas workers should therefore be received with sympathy and allowed, if
warranted, conformably to the constitutional mandate for the protection of the working class."
2. for Pacifico Canillo
a) SIX HUNDRED TEN US DOLLARS (US$610.00) representing his salaries from November 12, 1987 to December We find no basis either for the conclusion of the NLRC that there was no
22, 1987; employer-employee relationship between the parties. The record shows that the petitioners became
b) NINE THOUSAND FOUR HUNDRED SEVENTY US DOLLARS (US$9,470.00) representing his salaries for the employees of Saudi Services and Operating Company, Ltd., and later of Saudi Arabian Morrison,
unexpired portion of his employment contract.
both entities being represented by AR and Sons International Development Corporation, which
3. for Wilfredo Azuela admitted in its Comment that the petitioners were "hired and deployed abroad . . ." This relationship
a) SIX HUNDRED SIXTEEN US DOLLARS AND 67/100 (US$616.67) representing his salaries from November 2, is even more firmly supported by the Agency Worker Agreements between the petitioners and AR
1987 to December 22, 1987; and Sons acting for SSOC which were approved by the POEA under Accreditation Certificate No
b) EIGHT THOUSAND TWO HUNDRED SIXTY THREE US DOLLARS AND 33/100 (US$8,263.33) representing his 8181,7 and by the second contract under which the petitioners were deployed to SAM, its other
salaries for the unexpired portion of his employment contract; and principal, by AR and Sons.8
4. FIVE THOUSAND PESOS (P5,000.00) as and for attorney's fees.
Article 279 of the Labor Code provides:
The decision was reversed by the NLRC, which ordered the dismissal of the complaint. The NLRC Art. 279. Security of Tenure — In cases of regular employment, the employer shall not terminate
found that the complainants had misrepresented themselves as mechanics and cooks when they the services of an employee except for a just cause or when authorized by this title. An employee
were not qualified for these positions and so had only themselves to blame if they were subsequently who was unjustly dismissed from work shall be entitled to reinstatement without lose of seniority
rejected by a foreign employer. rights and to his backwages computed from the time his compensation was withheld from him up
to the time of reinstatement.
The factual findings of administrative bodies are as a rule binding on this Court, but this is true only
when they do not come under the established exceptions. One of these is where the findings of the Where the employer-employee relationship has been established, the burden of proof in termination
POEA and the NLRC are contrary to each other,4 as in this case, and there is a necessity to determine cases lies with the employer.9 This burden was not discharged by the private respondents. It is clear
which of them should be preferred as more conformable to the established facts. form the record that the petitioners were hired as mechanics and clerk (or as assistant cooks under
the second contract) after presumably having passed the corresponding trade tests conducted by
A study of the two decisions, together with the evidence and the arguments adduced by the parties, the recruiting agency prior to their deployment. If AR and Sons felt they were not qualified for these
inclines the Court in favor of the POEA. positions, it should have rejected their applications outright instead of accepting their recruitment
fees just the same and assuring them that their employment had already been approved by the
We reject the respondents' argument that the petitioners' services were terminated because they foreign principal. It was the fault of AR and Sons for holding the petitioners to its foreign principal
were not qualified either as mechanics or as assistant cooks. It is presumed that before their as qualified when they were found later to be deficient. As a result of its negligence, if not its
deployment, the petitioners were subjected to the trade tests required by law to be conducted by deliberate misrepresentation, the petitioners found themselves stranded in a foreign land, without
the recruiting agency to insure employment of only technically qualified workers for the foreign the employment and income that they hoped would give them a better life.
principal. There was no misrepresentation on the part of the petitioners. They had applied as A/C
mechanics and clerk, and we may assume that the trade tests conducted on them were for these The principle of "no work, no pay" does not apply in this case for, as correctly pointed out by POEA,
positions and not for the position of assistant cook. If they fell short of the employer's expectations, the fact that the complainants had not worked at the jobsite was not of their own doing. If they were
the fault lies not with the petitioners but with the recruiting agency for deploying them even if they not able to work at all, it was because they refused to sign the third contract providing for another
did not possess the skills necessary for the positions they were seeking. lowering of their salaries in violation of their first agreement as approved by the POEA. They had a
right to insist on the higher salaries agreed upon in the original contract and to reject the subsequent
As we said in one case:5 impositions of SAM, which obviously thought the petitioners would have to accept because they had
. . . Moreover, before the private respondents were hired they were lengthily interviewed by a no choice.
representative of the foreign employer, Modern System. They must have passed, otherwise, they
would not have been hired. They must also be subjected to a trade test because this is one of the Rule V, Book I of the Omnibus Rules Implementing the Labor Code defines the duties and obligations
requirements for employment abroad. Thirdly, the private respondents were not given sufficient of a duly licensed placement and recruitment agency. Section 2(e) requires a private employment
agency to assume all responsibilities for the implementation of the contract of employment of an
overseas worker. Section 10(a) (2) provides that a private employment agency can be sued jointly G.R. No. 147420 June 10, 2004
and severally with the principal or foreign-based employer for any violation of the recruitment
agreement or the contract of employment. CEZAR ODANGO in his behalf and in behalf of 32 complainants, petitioners,
vs.
Book II, Rule II, Section 1(f) (3) of the new Rules and Regulations Governing Overseas Employment
NATIONAL LABOR RELATIONS COMMISSION and ANTIQUE ELECTRIC COOPERATIVE,
promulgated by the Governing Board of the POEA substantially reiterates Rule II of Book II, Section
INC., respondents.
1(d) (3) of 1985 POEA Rules, which governs this case. It provides that a private employment agency
shall assume joint and solidary liability with the employer for all claims and liabilities that may arise
in connection with the implementation of the contracts including but not limited to payment of CARPIO, J.:
wages, health and disability compensation and repatriation. There is no doubt that, under the facts
established in this case, AR and Sons is jointly and solidarily liable with overseas employer SAM for The Case
the claims of the petitioners.
Before the Court is a petition for review1 assailing the Court of Appeals’ Resolutions of 27 September
The Court is not unaware of the many abuses suffered by our overseas workers in the foreign land 20002 and 7 February 2001 in CA-G.R. SP No. 51519. The Court of Appeals upheld the
where they have ventured, usually with heavy hearts, in pursuit of a more fulfilling future. Breach Decision3 dated 27 November 1997 and the Resolution dated 30 April 1998 of the National Labor
of contract, maltreatment, rape, insufficient nourishment, sub-human lodgings, insults and other Relations Commission ("NLRC") in NLRC Case No. V-0048-97. The NLRC reversed the Labor Arbiter’s
forms of debasement, are only a few of the inhumane acts to which they are subjected by their Decision of 29 November 1996, which found respondent Antique Electric Cooperative ("ANTECO")
foreign employers, who probably feel they can do as they please in their own country. While these liable for petitioners’ wage differentials amounting to ₱1,017,507.73 plus attorney’s fees of 10%.
workers may indeed have relatively little defense against exploitation while they are abroad, that
disadvantage must not continue to burden them when they return to their own territory to voice
Antecedent Facts
their muted complaint. There is no reason why, in their very own land, the protection of our own
laws cannot be extended to them in full measure for the redress of their grievances.
Petitioners are monthly-paid employees of ANTECO whose workdays are from Monday to Friday and
WHEREFORE, the challenged decision of the NLRC dated May 31, 1980 is REVERSED and SET ASIDE. half of Saturday. After a routine inspection, the Regional Branch of the Department of Labor and
The POEA decision dated July 24, 1989 is REINSTATED, with costs against the private respondents. Employment ("DOLE") found ANTECO liable for underpayment of the monthly salaries of its
employees. On 10 September 1989, the DOLE directed ANTECO to pay its employees wage
differentials amounting to ₱1,427,412.75. ANTECO failed to pay.

Thus, on various dates in 1995, thirty-three (33) monthly-paid employees filed complaints with the
NLRC Sub-Regional Branch VI, Iloilo City, praying for payment of wage differentials, damages and
attorney’s fees. Labor Arbiter Rodolfo G. Lagoc ("Labor Arbiter") heard the consolidated complaints.

On 29 November 1996, the Labor Arbiter rendered a Decision in favor of petitioners granting them
wage differentials amounting to ₱1,017,507.73 and attorney’s fees of 10%. Florentino Tongson,
whose case the Labor Arbiter dismissed, was the sole exception.

ANTECO appealed the Decision to the NLRC on 24 December 1996. On 27 November 1997, the NLRC
reversed the Labor Arbiter’s Decision. The NLRC denied petitioners’ motion for reconsideration in its
Resolution dated 30 April 1998. Petitioners then elevated the case to this Court through a petition
for certiorari, which the Court dismissed for petitioners’ failure to comply with Section 11, Rule 13
of the Rules of Court. On petitioners’ motion for reconsideration, the Court on 13 January 1999 set
aside the dismissal. Following the doctrine in St. Martin Funeral Home v. NLRC,4 the Court
referred the case to the Court of Appeals.

On 27 September 2000, the Court of Appeals issued a Resolution dismissing the petition for failure
to comply with Section 3, Rule 46 of the Rules of Court. The Court of Appeals explained that
petitioners failed to allege the specific instances where the NLRC abused its discretion. The appellate
court denied petitioners’ motion for reconsideration on 7 February 2001.

Hence, this petition.

The Labor Arbiter’s Ruling


The Labor Arbiter reasoned that ANTECO failed to refute petitioners’ argument that monthly-paid 13 January 1999 as their basis. This Resolution granted petitioners’ motion for reconsideration and
employees are considered paid for all the days in a month under Section 2, Rule IV of Book 3 of the set aside the dismissal of their petition for review.
Implementing Rules of the Labor Code ("Section 2").5 Petitioners claim that this includes not only
the 10 legal holidays, but also their un-worked half of Saturdays and all of Sundays. Petitioners’ reliance on our 16 September 1998 Resolution is misplaced. In our Resolution, we
dismissed petitioners’ case for failure to comply with Section 11, Rule 13 of the Rules of Court.7 The
The Labor Arbiter gave credence to petitioners’ arguments on the computation of their wages based petition lacked a written explanation on why service was made through registered mail and not
on the 304 divisor used by ANTECO in converting the leave credits of its employees. The Labor personally.
Arbiter agreed with petitioners that ANTECO’s use of 304 as divisor is an admission that it is paying
its employees for only 304 days a year instead of the 365 days as specified in Section 2. The Labor The error petitioners committed before the Court of Appeals is different. The appellate court
Arbiter concluded that ANTECO owed its employees the wages for 61 days, the difference between dismissed their petition for failure to comply with the first paragraph of Section 3 of Rule 46 8 in
365 and 304, for every year. relation to Rule 65 of the Rules of Court, outlining the necessary contents of a petition for certiorari.
This is an entirely different ground. The previous dismissal was due to petitioners’ failure to explain
The NLRC’s Ruling why they resorted to service by registered mail. This time the content of the petition itself is
deficient. Petitioners failed to allege in their petition the specific instances where the actions of the
On appeal, the NLRC reversed the Labor Arbiter’s ruling that ANTECO underpaid its employees. The NLRC amounted to grave abuse of discretion.
NLRC pointed out that the Labor Arbiter’s own computation showed that the daily wage rates of
ANTECO’s employees were above the minimum daily wage of ₱124. The lowest paid employee of There is nothing in this Court’s Resolution dated 13 January 1999 that remotely supports petitioners’
ANTECO was then receiving a monthly wage of ₱3,788. The NLRC applied the formula in Section 2 argument. What we resolved then was to reconsider the dismissal of the petition due to a procedural
[(Daily Wage Rate = (Wage x 12)/365)] to the monthly wage of ₱3,788 to arrive at a daily wage defect and to refer the case to the Court of Appeals for its proper disposition. We did not in any way
rate of ₱124.54, an amount clearly above the minimum wage. rule that the petition is sufficient in form and substance.

The NLRC noted that while the reasoning in the body of the Labor Arbiter’s decision supported the Petitioners also argue that their petition is clear and specific in its allegation of grave abuse of
view that ANTECO did not underpay, the conclusion arrived at was the opposite. Finally, the NLRC discretion. They maintain that they have sufficiently complied with the requirement in Section 3,
ruled that the use of 304 as a divisor in converting leave credits is more favorable to the employees Rule 46 of the Rules of Court.
since a lower divisor yields a higher rate of pay.
Again, petitioners are mistaken.
The Ruling of the Court of Appeals
We quote the relevant part of their petition:
The Court of Appeals held that the petition was insufficient in form and substance since it "does not
allege the essential requirements of the extra-ordinary special action of certiorari." The Court of REASONS RELIED UPON FOR ALLOWANCE OF PETITION
Appeals faulted petitioners for failing to recite "where and in what specific instance public respondent
abused its discretion." The appellate court characterized the allegations in the petition as "sweeping"
12. This Honorable court can readily see from the facts and circumstances of this case, the
and clearly falling short of the requirement of Section 3, Rule 46 of the Rules of Court.
petitioners were denied of their rights to be paid of 4 hours of each Saturday, 51 rest days and 10
legal holidays of every year since they started working with respondent ANTECO.
The Issues

13. The respondent NLRC while with open eyes knew that the petitioners are entitled to salary
Petitioners raise the following issues: differentials consisting of 4 hours pay on Saturdays, 51 rest days and 10 legal holidays plus 10%
I. WHETHER THE COURT OF APPEALS IS CORRECT IN DISMISSING THE CASE. attorney’s fees as awarded by the Labor Arbiter in the above-mentioned decision, still contrary to
II WHETHER PETITIONERS ARE ENTITLED TO THEIR MONEY CLAIM.6 law, contrary to existing jurisprudence issued arbitrary, without jurisdiction and in excess of
jurisdiction the decision vacating and setting aside the said decision of the Labor Arbiter, to the
The Ruling of the Court irreparable damage and prejudice of the petitioners.

The petition has no merit. 14. That the respondent NLRC in grave abuse of discretion in the exercise of its function, by way
of evasion of positive duty in accordance with existing labor laws, illegally refused to reconsider
On the sufficiency of the petition its decision dismissing the petitioners’ complaints.

Petitioners argue that the Court of Appeals erred in dismissing their petition because this Court had 15. That there is no appeal, nor plain, speedy and adequate remedy in law from the above-
already ruled that their petition is sufficient in form and substance. They argue that this precludes mentioned decision and resolution of respondent NLRC except this petition for certiorari.9
any judgment to the contrary by the Court of Appeals. Petitioners cite this Court’s Resolution dated
These four paragraphs comprise the petitioners’ entire argument. In these four paragraphs Thus, Section 2 cannot serve as basis of any right or claim. Absent any other legal basis, petitioners’
petitioners ask that a writ of certiorari be issued in their favor. We find that the Court of Appeals did claim for wage differentials must fail.
not err in dismissing the petition outright. Section 3, Rule 46 of the Rules of Court requires that a
petition for certiorari must state the grounds relied on for the relief sought. A simple perusal of the Even assuming that Section 2, Rule IV of Book III is valid, petitioners’ claim will still fail. The basic
petition readily shows that petitioners failed to meet this requirement. rule in this jurisdiction is "no work, no pay." The right to be paid for un-worked days is generally
limited to the ten legal holidays in a year. 15 Petitioners’ claim is based on a mistaken notion that
The appellate court’s jurisdiction to review a decision of the NLRC in a petition for certiorari is Section 2, Rule IV of Book III gave rise to a right to be paid for un-worked days beyond the ten legal
confined to issues of jurisdiction or grave abuse of discretion. 10 An extraordinary remedy, a petition holidays. In effect, petitioners demand that ANTECO should pay them on Sundays, the un-worked
for certiorari is available only and restrictively in truly exceptional cases. The sole office of the writ half of Saturdays and other days that they do not work at all. Petitioners’ line of reasoning is not
of certiorari is the correction of errors of jurisdiction including the commission of grave abuse of only a violation of the "no work, no pay" principle, it also gives rise to an invidious classification, a
discretion amounting to lack or excess of jurisdiction. 11 It does not include correction of the NLRC’s violation of the equal protection clause. Sustaining petitioners’ argument will make monthly-paid
evaluation of the evidence or of its factual findings. Such findings are generally accorded not only employees a privileged class who are paid even if they do not work.
respect but also finality.12 A party assailing such findings bears the burden of showing that the
tribunal acted capriciously and whimsically or in total disregard of evidence material to the The use of a divisor less than 365 days cannot make ANTECO automatically liable for underpayment.
controversy, in order that the extraordinary writ of certiorari will lie.13 The facts show that petitioners are required to work only from Monday to Friday and half of Saturday.
Thus, the minimum allowable divisor is 287, which is the result of 365 days, less 52 Sundays and
We agree with the Court of Appeals that nowhere in the petition is there any acceptable less 26 Saturdays (or 52 half Saturdays). Any divisor below 287 days means that ANTECO’s workers
demonstration that the NLRC acted either with grave abuse of discretion or without or in excess of are deprived of their holiday pay for some or all of the ten legal holidays. The 304 days divisor used
its jurisdiction. Petitioners merely stated generalizations and conclusions of law. Rather than by ANTECO is clearly above the minimum of 287 days.
discussing how the NLRC acted capriciously, petitioners resorted to a litany of generalizations.
Finally, petitioners cite Chartered Bank Employees Association v. Ople16 as an analogous
Petitions that fail to comply with procedural requisites, or are unintelligible or clearly without legal situation. Petitioners have misread this case.
basis, deserve scant consideration. Section 6, Rule 65 of the Rules of Court requires that every
petition be sufficient in form and substance before a court may take further action. Lacking such In Chartered Bank, the workers sought payment for un-worked legal holidays as a right guaranteed
sufficiency, the court may dismiss the petition outright. by a valid law. In this case, petitioners seek payment of wages for un-worked non-legal holidays
citing as basis a void implementing rule. The circumstances are also markedly different. In Chartered
The insufficiency in substance of this petition provides enough reason to end our discussion here. Bank, there was a collective bargaining agreement that prescribed the divisor. No CBA exists in this
However, we shall discuss the issues raised not so much to address the merit of the petition, for case. In Chartered Bank, the employer was liable for underpayment because the divisor it used was
there is none, but to illustrate the extent by which petitioners have haphazardly pursued their claim. 251 days, a figure that clearly fails to account for the ten legal holidays the law requires to be paid.
Here, the divisor ANTECO uses is 304 days. This figure does not deprive petitioners of their right to
On the right of the petitioners to wage differentials be paid on legal holidays.

Petitioners claim that the Court of Appeals gravely erred in denying their claim for wage differentials. A final note. ANTECO’s defense is likewise based on Section 2, Rule IV of Book III of the Omnibus
Petitioners base their claim on Section 2, Rule IV of Book III of the Omnibus Rules Implementing Rules Implementing the Labor Code although ANTECO’s interpretation of this provision is opposite
the Labor Code. Petitioners argue that under this provision monthly-paid employees are considered that of petitioners. It is deplorable that both parties premised their arguments on an implementing
paid for all days of the month including un-worked days. Petitioners assert that they should be paid rule that the Court had declared void twenty years ago in Insular Bank. This case is cited
for all the 365 days in a year. They argue that since in the computation of leave credits, ANTECO prominently in basic commentaries.17 And yet, counsel for both parties failed to consider this. This
uses a divisor of 304, ANTECO is not paying them 61 days every year. does not speak well of the quality of representation they rendered to their clients. This controversy
should have ended long ago had either counsel first checked the validity of the implementing rule
on which they based their contentions.
Petitioners’ claim is without basis

WHEREFORE, the petition is DENIED. The Resoution of the Court of Appeals DISMISSING CA-
We have long ago declared void Section 2, Rule IV of Book III of the Omnibus Rules Implementing
G.R. SP No. 51519 is AFFIRMED.
the Labor Code. In Insular Bank of Asia v. Inciong,14 we ruled as follows:
Section 2, Rule IV, Book III of the Implementing Rules and Policy Instructions No. 9 issued by the
Secretary (then Minister) of Labor are null and void since in the guise of clarifying the Labor Code’s
provisions on holiday pay, they in effect amended them by enlarging the scope of their exclusion.
The Labor Code is clear that monthly-paid employees are not excluded from the benefits of holiday
pay. However, the implementing rules on holiday pay promulgated by the then Secretary of Labor
excludes monthly-paid employees from the said benefits by inserting, under Rule IV, Book III of
the implementing rules, Section 2 which provides that monthly-paid employees are presumed to
be paid for all days in the month whether worked or not.
G.R. No. L-1309 July 26, 1948 SECTION 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
THE SHELL COMPANY OF PHILIPPINE ISLANDS, LIMITED, recurrente, working and can leave his working place and can rest completely shall not be counted.
vs.
NATIONAL LABOR UNION, recurrida. SEC. 3. Work may be performed beyond eight hours a day in case of actual or impending
emergencies caused by serious accidents, fire, flood, typhoon, earthquake, epidemic, or other
SECTION 1. The Judge: his appointment, qualifications, compensation, tenure. — There is hereby disaster or calamity in order to prevent loss to life and property or imminent danger to public
created a Court of Industrial Relations, which shall have jurisdiction over the entire Philippines, to safety; or in case urgent work to be performed on the machines, equipment, or installations in
consider, investigate, decide, and settle any question, matter, controversy or dispute arising order to avoid a serious loss which the employer would otherwise suffer, or some other just cause
between, and/or affecting, employers and employees or laborers, and landlords and tenants or farm- of a similar nature; but in all such cases the laborers and employees shall be entitled to receive
laborers, and regulate the relation between them, subject to, and in accordance with, the provisions compensation for the overtime work performed at the same rate as their regular wages or salary,
of this Act. The Court shall keep a record of all its proceedings and shall be presided over by a Judge plus at least twenty-five per centum additional.
to be appointed by the President of the Philippines with the consent of the Commission on In case of national emergency the government is empowered to establish rules and regulations
Appointments of the National Assembly. The Judge of the Court shall hold office during good behavior for the operation of the plants and factories and to determine the wages to be paid the laborers.
until he reaches the age of seventy years, or becomes incapacitated to discharge the duties of his
office. His qualifications shall be the same as those provided in the Constitution for members of the SEC. 4. No person, firm, or corporation, business establishment or place or center of labor shall
Supreme Court and he shall receive an annual compensation of ten thousand pesos and shall be compel an employee or laborer to work during Sundays and legal holidays, unless he is paid an
entitled to traveling expenses and per diems when performing official duties outside of the City of additional sum of at least twenty-five per centum of his regular remuneration: Provided however,
Manila. The Department of Justice shall have executive supervision over the Court. That this prohibition shall not apply to public utilities performing some public service such as
supplying gas, electricity, power, water, or providing means of transportation or communication.
SEC. 4. Strikes and lockouts. — The Court shall take cognizance for purpose of prevention,
arbitration, decision and settlement, of any industrial or agricultural dispute causing or likely to "In the absence — recalcan los abogados de la recurrente — legislation authorizing the payment of
cause a strike or lockout, arising form differences as regards wages, shares or compensation, hours extra compensation for work done at night, the Court of Industrial Relations ha no power or authority
of labor or conditions of tenancy or employment, between employers and employees or laborers and to order the petitioner company to pay extra compensation for work done by its laborers at
between landlords and tenants or farm-laborers, provided that the number of employees, laborers night. Expressio unius est exclusio alterius. Where, as inthe case at bar, statute expressly specifies
or tenants or farm-laborers involved exceeds thirty, and such industrial or agricultural dispute is the cases where payment of extra compensation may be demanded, extra compensation may be
submitted to the Court by the Secretary of Labor, or by any or both of the parties to the controversy allowed in those cases only, and in no others. The provisions of the Commonwealth Act No. 444
and certified by the Secretary of Labor as existing and proper to be dealt with by the Court for the cannot be enlarged by implication or otherwise. Expressum facit cessare tacitum.
sake of public interest. In all such cases, the Secretary of Labor or the party or parties submitting
the disputes, shall clearly and specifically state in writing the questions to be decided. Upon the Another case in which this maxim may almost invariably by followed is that of statute which makes
submission of such a controversy or question by the Secretary of Labor, his intervention therein as certain specific exceptions to its general provisions. Here wemay safely assume that all other
authorized by law, shall cease. exceptions were intended to be excluded."

The Court shall, before hearing the dispute and in the course of such hearing, endeavor to reconcile . . . Then, it must be remembered that it is distinctly unphysiological to turn the night into day
the parties and induce them to settle the dispute by amicable agreement. If any agreement as to and deprive the body of the beneficial effects of sunshine. The human organism revolts against
the whole or any part of the dispute is arrived at by the parties, a memorandum of its terms shall this procedure. Added to artificial lighting are reversed and unnatural times of eating, resting, and
be made in writing, signed and acknowledged by the parties thereto before the Judge of the Court sleeping. Much of the inferiority of nightwork can doubtless be traced to the failure of the workers
or any official acting in his behalf and authorized to administer oaths or acknowledgments, or, before to secure proper rest and sleep, by day. Because of inability or the lack of opportunity to sleep,
a notary public. The memorandum shall be filed in the office of the Clerk of the Court, and, unless nightworkers often spend their days in performing domestic duties, joining the family in the
otherwise ordered by the Court, shall, as between the parties to the agreement, have the same midday meal, 'tinkering about the place', watching the baseball game, attending the theater or
effect as, and be deemed to be, a decision or award. taking a ride in the car. It is not strange that nightworkers tend to be less efficient than dayworkers
and lose more time. . . (The Management of Labor Relations, by Watkins & Dodd, page 524.).
SEC. 13. Character of the award. — In making an award, order or decision, under the provisions of
section four of this Act, the Court shall not be restricted to the specific relief claimed or demands Nightwork. — Nightwork has gained a measure of prominence in the modern industrial system in
made by the parties to the industrial or agricultural dispute, but may include in the award, order or connection with continuous industries, that is, industries in which the nature of the processes
decision any matter or determination which my be deemed necessary or expedient for the purpose makes it necessary to keep machinery and equipment in constant operation. Even in continuous
of setting the dispute or of preventing further industrial or agricultural disputes. industries the tendency is definitely in the direction of FOUR shifts of 6 hours each, with provision
for an automatic change of shift for all workers at stated intervals. Some discussion has taken
In Commonwealth Act No. 103, and by it, our government no longer performs the role of mere place with regard to the lengths of the period any workers should be allowed to remain on the
mediator or intervenor but that of supreme arbiter. (Las cursivas son nuestras.). night shift. A weekly change of shifts is common, specially where three or four shifts are in
operation; in other cases the change is made fortnightly or monthly; in still other instances, no
alternation is provided for, the workers remaining on day — or nightwork permanently, except significant method of cutting down the ever-increasing overhead costs of industry. This result has
where temporary changes are made for individual convenience. led employers to believe that such work is necessary and profitable. Here again one meets a
conflict of economic and social interests. Under these circumstances it is necessary to discover
There is sharp difference of opinion concerning the relative merits of these systems. Advocates of whether nightwork has deleterious effects upon the health of laborers and tends to reduce the
the weekly change of shifts contend that the strain of nightwork and the difficulty of getting ultimate supply of efficient labor. If it can proved that nightwork affects adversely both the quality
adequate sleep during the day make it unwise for workers to remain on the"graveyard" shift for and quantity of productive labor, its discontinuance will undoubtedly be sanctioned by employers.
more than a week at a time. Opponents urge that repeated changes make it more difficult to settle From a social point of view, even a relatively high degree of efficiency in night operations must be
down to either kind of shift and that after the first week nightwork becomes less trying while the forfeited if it is purchased with rapid exhaustion of the health and energy of the workers. From an
ability to sleep by day increases. Workers themselves react in various ways to the different economic point of view, nightwork may be necessary if the employer is to meet the demand for
systems. This much, however, is certain: Few persons react favorably to nightwork, whether the his product, or if he is to maintain his market in the face of increasing competition or mounting
shift be continuous or alternating. Outside of continuous industries, nightwork can scarcely be variable production costs.
justified, and, even in these, it presents serious disadvantages which must be recognized in planing
for industrial efficiency, stabilization of the working force, the promotion of industrial good-will, Industrial experience has shown that the possession of extra-ordinary physical strength and self-
and the conservation of the health and vitality of the workers. control facilitates the reversal of the ordinary routine of day work and night rest, with the little or
no unfavorable effect on health and efficiency. Unusual vitality and self-control, however, are not
Nightwork cannot be regarded as desirable, either from the point of view of the employer or of the common possessions. It has been found that the most serious obstacle to a reversal of the routine
wage earner. It is uneconomical unless overhead costs are unusually heavy. Frequently the scale is the lack of self-discipline. Many night workers enter into the numerous activities of day life that
of wages is higher as an inducement to employees to accept employment on the night shift, and preclude sleep, and continue to attempt to do their work at night. Evidence gathered by the British
the rate of production is generally lower. (Management of Labor Relations, by Watkins & Dodd, Health of Munition Workers' Committee places permanent night workers, whether judged on the
pp. 522-524; emphasis ours.) basis of output or loss of time, in a very unfavorable positions as compared with day workers.

. . . The lack of sunlight tends to produce anemia and tuberculosis and to predispose to other ills. Systems of nightwork differ. There is the continuous system, in which employees labor by night
Nightwork brings increased liability to eyestrain and accident. Serious moral dangers also are likely and do not attend the establishment at all by day, and the discontinuous system, in which the
to result from the necessity of traveling the streets alone at night, and from the interference with workers change to the day turn at regular intervals, usually every other week. There are, of course,
normal home life. From an economic point of view, moreover, the investigations showed that minor variations in these systems, depending upon the nature of the industry and the wishes of
nightwork was unprofitable, being inferior to day work both in quality and in quantity. Wherever management. Such bodies as the British Health Munition Workers' Committee have given us
it had been abolished, in the long run the efficiency both of the management and of the workers valuable conclusions concerning the effect of nightwork. Continuous nightwork is definitely less
was raised. Furthermore, it was found that nightwork laws are a valuable aid in enforcing acts productive than the discontinuous system. The output of the continuous day shift does not make
fixing the maximum period of employment. (Principles of Labor Legislation, by Commons and up for this loss in production.
Andrews, 4th Revised Edition, p. 142.)
There is, moreover, a marked difference between the rates of output of night and day shifts on
Special regulation of nightwork for adult men is a comparatively recent development. Some the discontinuous plan. In each case investigated the inferiority of night labor was definitely
European countries have adopted laws placing special limitations on hours of nightwork for men, established. This inferiority is evidently the result of the night worker's failure to secure proper
and others prohibit such work except in continuous processes. (Principles of Labor legislation, 4th amounts of sleep and rest during the day. The system of continuous shifts, especially for women,
Revised Edition by Common & Andrews, p. 147.) is regarded by all investigators as undesirable. Women on continuous nightwork are likely to
perform domestic duties, and this added strain undoubtedly accounts for the poorer results of their
industrial activities. The tendency to devote to amusement and other things the time that should
Nightwork has almost invariably been looked upon with disfavor by students of the problem
be spent in rest and sleep is certainly as common among men as among women workers and
because of the excessive strain involved, especially for women and young persons, the large
accounts largely for the loss of efficiency and time on the part of both sexes in nightwork.
amount of lost time consequent upon exhaustion of the workers, the additional strain and
responsibility upon the executive staff, the tendency of excessively fatigued workers to "keep
The case against nightwork, then, may be said to rest upon several grounds. In the first place, there are the
going" on artificial stimulants, the general curtailment of time for rest, leisure, and cultural
remotely injurious effects of permanent nightwork manifested in the later years of the worker's life. Of more
improvement, and the fact that night workers, although precluded to an extent from the activities
immediate importance to the average worker is the disarrangement of his social life, including the recreational
of day life, do attempt to enter into these activities, with resultant impairment of physical well- activities of his leisure hours and the ordinary associations of normal family relations. From an economic point of
being. It is not contended, of course, that nightwork could be abolished in the continuous-process view, nightwork is to be discouraged because of its adverse effect upon efficiency and output. A moral argument
industries, but it is possible to put such industries upon a three- or four-shifts basis, and to prohibit against nightwork in the case of women is that the night shift forces the workers to go to and from the factory in
nightwork for women and children. (Labor's Progress and Problems, Vol. I, p. 464, by Professors darkness. Recent experiences of industrial nations have added much to the evidence against the continuation of
nightwork, except in extraordinary circumstances and unavoidable emergencies. The immediate prohibition of
Millis and Montgomery.)
nightwork for all laborers is hardly practicable; its discontinuance in the case of women employees is
unquestionably desirable. 'The night was made for rest and sleep and not for work' is a common saying among
Nightwork. — Civilized peoples are beginning to recognize the fact that except in cases of necessity wage-earning people, and many of them dream of an industrial order in which there will be no night shift. (Labor
or in periods of great emergency, nightwork is socially undesirable. Under our modern industrial Problems, 3rd Edition, pp. 325-328, by Watkins & Dodd.).
system, however, nightwork has greatly aided the production of commodities, and has offered a
G.R. No. 123520 June 26, 1998 NSC imputes grave abuse of discretion to the NLRC in affirming the Labor Arbiter's award of night
shift differentials and P1,000.00 indemnity for alleged violation of due process. It contends that the
NATIONAL SEMICONDUCTOR (HK) DISTRIBUTION, LTD., petitioner, question of non-payment of night shift differentials was never raised as an issue nor pursued and
vs. proved by Santos in the proceeding before the Labor Arbiter; that Santos was already paid his night
NATIONAL LABOR RELATIONS COMMISSION (4TH DIVISION) and EDGAR PHILIP C. shift differentials, and any further payment to him would amount to unjust enrichment; and, that
SANTOS, respondents. the P1,000.00 indemnity is totally unjustified as he was afforded ample opportunity to be heard.

The main issues to be resolved in his petition for certiorari are: First, who has the burden of We now resolve. A perusal of Santos' position paper filed before the Labor Arbiter reveals that the
providing a claim for night shift differential pay, the worker who claims not to have been paid night question of non-payment of night shift differentials was specifically raised as an issue in the
shift differentials, or the employer in custody of pertinent documents which would prove the fact of proceedings below which was never abandoned by Santos as erroneously claimed by NSC thus —
payment of the same? Second, were the requirements of due process substantially complied with in
dismissing the worker? ISSUES
1. Did respondent National Semiconductor (HK) Distribution Ltd. illegally dismiss complainant
Petitioner National Semiconductor (HK) Distribution, Ltd. (NSC for brevity), a foreign corporation Edgar Philip Santos?
licensed to do business in the Philippines, manufactures and assembles electronic parts for export 2. Is complainant Edgar Philip Santos entitled to recover unpaid salary, holiday pay, night shift
with principal office at the Mactan Export Processing Zone, Mactan, Lapu-Lapu City. Private differential, allowances, separation pay, retirement benefits and moral damages? 6
respondent Edgar Philip C. Santos was employed by NSC as a technician in its Special Products
7
Group with a monthly salary of P5,501.00 assigned to the graveyard shift starting at ten o' clock in And, in his prayer, Santos sought to be afforded the reliefs prayed for in his complaint.
the evening until six o' clock in the morning.
The fact that Santos neglected to substantiate his claim for night shift differentials is not prejudicial
On 8 January 1993 Santos did not report for work on his shift. He resumed his duties as night shift to his cause. After all, the burden of proving payment rests on petitioner NSC. Santos' allegation of
Technician Support only on 9 January 1993. However, at the end of his shift the following morning, non-payment of this benefit, to which he is by law entitled, is a negative allegation which need not
he made two (2) entries in his daily time record (DTR) to make it appear that he worked on both be supported by evidence unless it is an essential part of his cause of action. It must be noted that
the 8th and 9th of January 1993. his main cause of action is his illegal dismissal, and the claim for night shift differential is but an
incident of the protest against such dismissal. Thus, the burden of proving that payment of such
His immediate supervisor, Mr. Joel Limsiaco, unknown to private respondent Santos, received the benefit has been made rests upon the party who will suffer if no evidence at all is presented by
report that there was no technician in the graveyard shift of 8 January 1993. Thus, Limsiaco checked either party. 8 Moreover, in Jimerez v. National Labor Relations Commission, 9 we declared —
the DTRs and found out that Santos indeed did not report for work on 8 January. But when he As a general rule, one who pleads payment has the burden of proving it. Even where the plaintiff
checked Santos' DTR again in the morning of 9 January 1993 he found the entry made by Santos must allege non-payment, the general rule is that the burden rests on the defendant to prove
for the day before. 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.
Informal investigations were conducted by management. Santos was required in a memorandum to
explain in writing within 48 hours from notice why no disciplinary action should be taken against him For sure, private respondent cannot adequately prove the fact of non-payment of night shift
for dishonesty, falsifying daily time record (DTR) and violation of company rules and differentials since the pertinent employee files, payrolls, records, remittances and other similar
regulations. 1 On 11 January 1993 Santos submitted his written explanation alleging that he was ill documents — which will show that private respondent rendered night shift work; the time he
on the day he was absent. As regards the entry on 8 January, he alleged that it was merely due to rendered services; and, the amounts owed as night shift differentials — are not in his possession
oversight or carelessness on his part. 2 but in the custody and absolute control of petitioner.

Finding Santos' explanation unsatisfactory, NSC dismissed him on 14 January 1993 on the ground Private respondent has been in petitioner's employ for five (5) years — starting 13 January 1988
of falsification of his DTR, which act was inimical to the company and constituted dishonesty and when he was hired to 14 January 1993 when his services were terminated — and petitioner never
serious misconduct. 3 denied that private respondent rendered night shift work. In fact, it even presented some documents
purporting to prove that private respondent was assigned to work on the night shift.
Thus, on 20 January 1993, Santos filed a complaint for illegal dismissal and non-payment of back
wages, premium pay for holidays and rest days, night shift differential pay, allowances, separation By choosing not to fully and completely disclose information to prove that it had paid all the night
pay, moral damages and attorney's fees. shift differentials due to private respondent, petitioner failed to discharge the burden of proof.
Consequently, no grave abuse of discretion can be ascribed to the NLRC for sustaining the Labor
Labor Arbiter Dominador A. Almirante found that Santos was dismissed on legal grounds although
Arbiter when it ruled thus —
he was not afforded due process, hence, NSC was ordered to indemnify him P1,000.00. The Labor
Arbiter likewise ordered the payment of P19,801.47 representing Santos' unpaid night shift It is not disputed that complainant was regularly assigned to a night shift (10:00 P.M. to 7:00
differentials. 4 A.M.). Under Section 2, Rule II, Book Three of the Implementing Rules of the Labor Code,
complainant is entitled to an additional benefit of not less ten percent (10%) of his regular wage
NSC appealed to the National Labor Relations Commission (NLRC). In its Decision of 29 September for each hour of work performed. The record is bereft of evidence that respondent has paid
1995 the NLRC affirmed the Labor Arbiter holding that his conclusions were sufficiently supported complainant this benefit. The best evidence for respondent corporation would have been the
by the evidence and therefore must be respected by the appellate tribunal because the hearing
payrolls, vouchers, daily time records and the like which under Sections 6, 7, 8, 11 and 12, Rule
officer was in a unique position to observe the demeanor of witnesses and to judge their credibility. 5
X, Book III of the Implementing Rules it is obliged to keep. Its failure gives rise to the presumption G.R. No. L-30279 July 30, 1982
that either it does not have them or if it does, their presentation is prejudicial to its cause.
PHILIPPINE NATIONAL BANK, petitioner,
We rule therefore that complainant should be awarded a night shift differential but limited to there vs.
(3) years considering the prescriptive period of money claims. 10 PHILIPPINE NATIONAL BANK EMPLOYEES ASSOCIATION (PEMA) and COURT OF
INDUSTRIAL RELATIONS, respondents.
On the issue of due process, we agree with petitioner that Santos was accorded full opportunity to
be heard before he was dismissed. BARREDO, J.:

The essence of due process is simply an opportunity to be heard, or as applied to administrative Appeal by the Philippine National Bank from the decision of the trial court of the Court of Industrial
proceedings, an opportunity to explain one's side. 11 In the instant case, petitioner furnished private Relations in Case No. IPA-53 dated August 5, 1967 and affirmed en banc by said court on January
respondent notice as to the particular acts which constituted the ground for his dismissal. By 15, 1968.
requiring him to submit a written explanation within 48 hours from receipt of the notice, the company
gave him the opportunity to be heard in his defense. Private respondent availed of this chance by This case started on January 28, 1965 in consequence of the certification of the President of the
submitting a written explanation. Furthermore, investigations on the incident were actually Philippines of an industrial dispute between the Philippine National Bank Employees Association
conducted on 9 January 1993 and 11 January 1993. Mr. Reynaldo Gandionco, petitioner's witness, (PEMA, for short), on the one hand, and the Philippine National Bank (PNB, for short), on the other,
testified: which arose from no more than the alleged failure of the PNB to comply with its commitment of
Q: I reform my question. Was there an investigation conducted on the complainant regarding the organizing a Committee on Personnel Affairs to take charge of screening and deliberating on the
alleged falsification of DTR? promotion of employees covered by the collective bargaining agreement then in force between the
A: Yes, ma'am, there was. said parties. On January 28, 1965, the Industrial Court issued an order aimed at settling the dispute
Q: Who was present during the alleged investigation? I am referring to the first investigation? temporarily between the parties, which was certified by the President. Pertinent portions of the order
A: The first investigation we were many. We were Daryll Go, Joel Limsiaco, Edgar Philip Santos read thus:
and me. 1. That in order to settle the strike and for the employees to return to work immediately starting
Q: When was the first investigation conducted? January 29, 1965, the Committee on Personnel Affairs is hereby created to start functioning on
A: On the night of January 9, 1993. February 1, 1965;
Q: During the second investigation, who were present? f. That in return for this concession, an injunction against future strikes or lockouts shall be
A: We were: Daryll Go, Edgar Philip Santos and me. issued by the Court to last for a period of six months but which shall terminate even before that
Q: And when was the second investigation conducted? period should all disputes of the parties be already resolved; (Page 84, Record.)
A: It was on January 11, 1993 in the afternoon. 12
According to the very decision now on appeal, "on May 22, 1965, petitioner (private respondent
Finally, private respondent was notified on 14 January 1993 of the management's decision to herein) filed another pleading submitting to this Court for determination certain matters which it
terminate his services. claims cannot be resolved by the parties, which are as follows:

Thus, it is clear the minimum requirements of due process have been fulfilled by petitioner. First Cause of Action

That the investigations conducted by petitioner may not be considered formal or recorded hearings a. In a Resolution No. 1162 dated September 16, 1957, the Respondent's Board of Directors
or investigations is immaterial. A formal or trial type hearing is not all times and in all instances approved a revision of the computation of overtime pay retroactive as of July 1, 1954, and
essential to due process, the requirements of which are satisfied where the parties are afforded fair authorized a recomputation of the regular one- hour and extra overtime already rendered by all
and reasonable opportunity to explain their side of the controversy. 13 It is deemed sufficient for the officers and employees of the Respondent Bank.
employer to follow the natural sequence of notice, hearing and judgment. 14
The details of the benefits involved in said Resolution are contained in a Memorandum of the
WHEREFORE, petition is DISMISSED. The NLRC Decision of 29 September 1995 is AFFIRMED subject Respondent Bank dated September 18, 1957.
to the modification that the award of P1,000.00 as indemnity is DELETED in accordance with the
b. Since the grant of the benefits in question, the employees of the Respondent, represented by
foregoing discussion.
the petitioner, have always considered them to be a part of their salaries and/or fringe benefits;
nevertheless, the Respondent, in 1963, without just cause, withdrew said benefits and in spite of
repeated demands refused, and still refuses to reinstate the same up to the present.

Second Cause of Action

c. After the promulgation of the Decision in National Waterworks and Sewerage Authority vs.
NAWASA Consolidated Unions, et al. G.R. No. L-18938, Aug. 31, 1964, the Petitioner has
repeatedly requested Respondent that the cost of living allowance and longevity pay be taken into
account in the computation of overtime pay, effective as of the grant of said benefits on January
1, 1958, in accordance with the ruling in said Decision of the Supreme Court.
d. Until now Respondent has not taken any concrete steps toward the payment of the differential 'Any agreement or contract between the employer and the laborer or employee contrary to the
overtime and nighttime pays arising from the cost of living allowance and longevity pay. provisions of this Act shall be null and void ab initio'.

Respondent in its answer of June 7, 1965 took exception to this mentioned petition on several The instant action is partially subject to the provisions of Commonwealth Act 444, as amended.
grounds, namely, (1) the said alleged causes of action were not disputes existing between the Even if, the parties have stipulated to the extent that overtime will not be paid, the same will not
parties, (2) the same are mere money claims and therefore not within this Court's jurisdiction, and be binding. More so under the present circumstances, where the only question is the correctness
(3) that the parties have not so stipulated under the collective bargaining agreement between them, of the computation of the overtime payments.
or the same is premature as the pertinent collective bargaining agreement has not yet expired."
(Pp. 84-86, Record.) 1 While the Court notes that the first cause of action has become moot and academic in view of the
compliance by respondent, hence there is no further need to resolve the same (t.s.n., pp. 5-7,
Resolving the issues of jurisdiction and prematurity thus raised by PNB, the court held: August 16, 1965), the settlement of said first cause of action further strengthens the view that
the second cause of action is indeed an existing dispute between the parties. Both causes of fiction
As to the first ground, it is well to note that this Court in its Order of January 28, 1965 has enjoined involve overtime questions. Both stem from dates well beyond and before the presidential
the parties not to strike or lockout for a period of six (6) months starting from said date. In a very certification of the present proceedings. If respondent has been fit to take steps to expedite and
definite sense the labor disputes between the parties have been given a specific period for the resolve, without court intervention, the first cause of action, it cannot deny the existence of the
settlement of their differences. The fact that thereafter the question of the manner of payment of second cause of action as the first and second appear to be interrelated matters. (Pp. 86-89,
overtime pay is being put in issue, appears to indicate that this was a part of the labor dispute. If Record)
we are to consider that this question, particularly the second cause of action, has in fact existed
as early as 1958, shows the necessity of resolving the same now. And the same would indeed be And We agree that the foregoing holding is well taken. It would be more worthwhile to proceed to
an existing issue considering that the present certification came only in 1965. the basic issues immediately than to add anything more of Our own discourse to the sufficiently
based disposition of the court a quo of the above- mentioned preliminary questions.
It is further to be noted that the presidential certification has not limited specific areas of the labor
dispute embraced within the said certification. It speaks of the existence of a labor dispute between After discussing the pros and cons on the issue involved in the second cause of action as to whether
the parties and of a strike declared by the PEMA, for which the Court has been requested to take or not the cost-of-living allowance otherwise denominated as equity pay and longevity pay granted
immediate steps in the exercise of its powers under the law. by the bank, the first beginning January 1, 1958 and the latter effective July 1, 1961, should be
included in the computation of overtime-pay, the court granted the demands of PE MA, except the
Even on the assumption that the present issue is not one embraced by the presidential certification additional rate of work for night pay, and rendered the following judgment:
or it is an issue presented by one party on a cause arising subsequent to the certification, the
same would still be subject to the jurisdiction of this Court. In "Apo Cement Workers Union versus WHEREFORE, in view of the foregoing, this Court hereby promulgates the following:
Cebu Portland Cement", Case No. 11 IPA (G.R. No. L-12451, July 10, 1957), the Court en banc
(where this Sala has taken an opposite view) upheld its jurisdiction under the circumstances just 1. The respondent Philippine National Bank is hereby required to pay overtime and nighttime rates
enumerated. It would seem that this question has been further settled by our Supreme Court in to its employees from January 28, 1962; and such overtime compensation shall be based on the
"National Waterworks & Sewerage Authority vs. NAWASA Consolidated Unions, et al." (supra), sum total of the employee's basic salary or wage plus cost of living allowance and longevity pay
which we quote in part: under the following schedule:
4. Petitioner's claim that the issue of overtime compensation not having been raised in the 'a. Overtime services rendered shall be paid at the rate of time and one-third, but overtime work
original case but merely dragged into it by intervenors, respondent Court cannot take cognizance performed between 6:00 P.M. and 6- .00 A.M. shall be paid at the rate of 150% or 50% beyond
thereof under Section 1, Rule 13 of the Rules of Court. the regular rate;
'b. The rate for work performed in the night shift, or during the period from 6:00 P.M. to 6:00
... The fact that the question of overtime payment is not included in the principal case in the sense A.M. shall be compensated at the rate of 150% or 50% beyond the regular rate, provided the
that it is not one of the items of dispute certified to by the President is of no moment, for it comes work performed involved a definite night shift and not merely a continuation by way of overtime
within the sound discretion of the Court of Industrial Relations. Moreover, in labor disputes of the regular and established hours of the respondent Bank.
technicalities of procedure should as much as possible be avoided not only in the interest of labor
but to avoid multiplicity of action. This claim has no merit. 2. The Chief of the Examining Division of the Court or any of his duly designated representatives
is hereby ordered to compute the overtime rates due each employee of the respondent Bank from
As to the objection posed that the issues are mere money claims, there appears to be no ground January 28, 1962, in accordance with the above determination; and to complete the same within
for the same. In the first place, although the same involves a claim for additional compensation it a period of sixty (60) days from receipt of this Order. However, considering that the Philippine
is also a part of the labor dispute existing between the parties and subject to the compulsory National Bank is a government depository, and renders and performs functions distinct and
arbitration powers of the Court, pursuant to Section 10 of Rep. Act No. 875. In the second place, unique; and, while it may be a banking institution, its relationship with other government agencies
on the basis of the so-called PRISCO doctrine (G.R. No. L- 13806, May 23,.1960), there is an and the public is such that it has no basis for comparison with other banking institutions organized
existing and current employer-employee relationship between the respondent and the members under the corporation law or special charter. To require it to pay immediately the liability after the
of petitioner union, for whom the additional overtime compensation is claimed. exact amount shall have been determined by the Court Examiner and duly approved by the Court,
as in other cases, would work undue hardship to the whole government machinery, not to mention
With respect to ground three of the answer on which objection is based, on C.A. 444, as amended, the outstanding foreign liabilities and outside commitments, if any. Moreover, the records show
Section 6 thereof, provides as follows: that this case was initiated long before the taking over of the incumbent bank officials.
Accordingly, the Court feels that the payment shall be subject to the negotiations by the parties was there required to decide. Above all care should be taken not to lose sight of the truth that the
as to time, amount, and duration. facts obtaining, the issue settled, and the law applied in the said case, and these, though
The Court may intervene in said negotiations for the purpose of settling once and for all this case extractable from the records thereof as material in the resolution herein, were, as they are,
to maintain industrial peace pursuant to Section 13 of Commonwealth Act 103, as amended, if primarily declarative of the rights and liabilities of the parties involved therein.
desired, however by the parties.
After all this is not an unfair labor practice case. Recourse to the records of the NAWASA case shows that the fact- situation, as far as can be
materially connected with the instant case, is as follows:
In connection with the above decision, two interesting points appear at once to be of determinative In view of the enactment of Rep. Act 1880, providing that the legal hours of work for government
relevance: employees, (including those in government-owned or controlled corporations) shall be eight (8)
hours a day for five (5) days a week or forty (40) hours a week, its implementation by NAWASA
The first is that in upholding its jurisdiction to take cognizance of the demand in question about cost- was disputed by the Union. The workers affected were those who, for a period of three (3)
of-living allowance and longevity pay, the Industrial Court carefully noted that it was not resolving months prior to or immediately preceding the implementation of Rep. Act 1880, were working
a petition for declaratory relief in the light of the decision of this Court in NAWASA vs. NAWASA seven (7) days a week and were continuously receiving 25% Sunday differential pay. The
Consolidated Unions, G.R. No. L- 18938, August 31, 1964, 11 SCRA 766. Thus the decision under manner of computing or determining the daily rate of monthly salaried employees.
review states:
Incidentally, the present action is not one for declaratory relief as to the applicability of a judicial And the Supreme Court, specifically laid out the issue to be decided, as it did decide, in the
decision to the herein parties. A careful perusal of the pleadings indicates that what is being sought NAWASA, as follows:
is the payment of differential overtime and nighttime pay based on existing law and jurisprudence.
The cause of action is not anchored on any decision of any court but on provisions of the law which 7. and 8. How is a daily wage of a weekly employee computed in the light of Republic Act
have been in effect at the time of the occurrence of the cause of the action in relation to a labor 1880?'(G.R. L-18938)
dispute. Hence, this is not a petition for declaratory relief. (Pp. 94-95, Record.)
Resolving the above issue, it was held;
The second refers to a subsequent decision of the same Industrial Court in Shell Oil Workers Union According to petitioner, the daily wage should be computed exclusively on the basic wage
vs. Shell Co., et al., Case No. 2410-V and Shell & Affiliates Supervisors Union vs. Shell Company of without including the automatic increase of 25% corresponding to the Sunday differential. To
the Philippines, et al., Case No. 2411- V, in which the court made an explanatory discourse of its include said Sunday differential would be to increase the basic pay which is not contemplated
understanding of the NAWASA ruling, supra, and on that basis rejected the claim of the workers. In by said Act. Respondent court disagrees with this manner of computation. lt holds that Republic
brief, it held that (1) NAWASA does not apply where the collective bargaining agreement does not Act 1880 requires that the basic weekly wage and the basic monthly salary should not be
provide for the method of computation of overtime pay herein insisted upon by private respondent diminished notwithstanding the reduction in the number of working days a week. If the
PEMA and (2) the fact-situation in the Shell cases differed from that of NAWASA, since the sole and automatic increase corresponding to the salary differential should not be included there would
definite ratio decidendi in NAWASA was merely that inasmuch as Republic Act 1880 merely fixed a be a diminution of the weekly wage of the laborer concerned. Of course, this should only benefit
40-hour 5-day work for all workers, laborers and employees including government-owned those who have been working seven days a week and had been regularly receiving 25%
corporations like NAWASA, the weekly pay of NAWASA workers working more than five days a week additional compensation for Sunday work before the effectivity of the Act.
should remain intact; with overtime pay in excess of eight hours work and 25 % additional
It is thus necessary to analyze the Court's rationale in the said NAWASA case, 'in the light of Rep.
compensation on Sundays. There was no pronouncement at all therein regarding the basis of the
computation of overtime pay in regard to bonuses and other fringe benefits. Act 1880', and the 'specific corollaries' discussed preparatory to arriving at a final conclusion on
the main issue. What was required to be done, by way of implementing R. A. 1880? The statute
For being commendably lucid and comprehensive, We deem it justified to quote from that Shell directs that working hours and days of government employees (including those of government
decision: owned and controlled proprietary corporations) shall be reduced to five days-forty hours a week.
But, the same law carried the specific proviso, designed to guard against diminution of salaries or
The main issue: earnings of affected employees. The Supreme Court itself clearly spelled this out in the following
language: 'It is evident that Republic Act 1880 does not intend to raise the wages of the employees
The Unions appear to have read the NAWASA case very broadly. They would want it held that in over what they are actually receiving. Rather, its purpose is to limit the working days in a week
view of the said ruling of the Supreme Court, employers and employees must, even in the face of to five days, or to 40 hours without however permitting any reduction in the weekly or daily wage
existing bargaining contracts providing otherwise, determine the daily and hourly rates of of the compensation which was previously received. ...
employees in this manner: Add to basic pay all the money value of all fringe benefits agreed upon
or already received by the workers individually and overtime pay shall be computed thus — If the object of the law was to keep intact, (not either to increase it or decrease it) it is but natural
that the Court should concern itself, as it did, with the corollary, what is the weekly wage of worker
Basic yearly Rate plus Value of all Fringe Benefits divided by number of days worked during the who, prior to R.A. 1880, had been working seven (7) days a week and regularly receiving
year equals daily wage; Daily wage divided by 8 equals hourly rate. Hourly rate plus premium rate differential payments for work on Sundays or at night? It seems clear that the Court was only
equals hourly overtime rate. concerned in implementing correctly R.A. 1880 by ensuring that in diminishing the working days
and hours of workers in one week, no diminution should result in the worker's weekly or daily
The NAWASA case must be viewed to determine whether it is that broad. NAWASA case must be
wage. And, the conclusion reached by the Supreme Court was to affirm or recognize the
understood in its setting. The words used by the Supreme Court in its reasoning should not be
correctness of the action taken by the industrial court including such differential pay in computing
disengaged from the fact-situation with which it was confronted and the specific question which it
the weekly wages of these employees and laborers who worked seven days a week and were
continuously receiving 25% Sunday differential for a period of three months immediately resolution of the issue dependent on the relation of the terms and conditions of the contract to the
preceding the implementation of R.A. 1880.' Nothing was said about adding the money value of phraseology and purpose of the Eight-Hour Labor Law (Act 444).
some other bonuses or allowances or money value of other fringe benefits, received outside the
week or at some other periods. That was not within the scope of the issue before the Court. in The more we read the NAWASA case, the more we are convinced that the overtime computation
fact, the limited application of the decision is expressed in the decision itself. The resolution of this set therein cannot apply to the cases at bar. For to do so would lead to unjust results, inequities
particular issue was for the benefit of only a segment of the NAWASA employees. Said the Court between and among the employees themselves and absurd situations. To apply the NAWASA
'Of course, this should only benefit those who have been working seven days a week and had been computation would require a different formula for each and every employee, would require
regularly receiving 25% additional compensation for Sunday work before the effectivity of the Act.' reference to and continued use of individual earnings in the past, thus multiplying the
administrative difficulties of the Company. It would be cumbersome and tedious a process to
Unions make capital of the following pronouncement of the Supreme Court in the NAWASA case: compute overtime pay and this may again cause delays in payments, which in turn could lead to
serious disputes. To apply this mode of computation would retard and stifle the growth of unions
It has been held that for purposes of computing overtime compensation a regular wage includes themselves as Companies would be irresistibly drawn into denying, new and additional fringe
all payments which the parties have agreed shall be received during the work week, including benefits, if not those already existing, for fear of bloating their overhead expenses through
piece-work wages, differential payments for working at undesirable times, such as at night or overtime which, by reason of being unfixed, becomes instead a veritable source of irritant in labor
on Sundays and holidays, and the cost of board and lodging customarily furnished the employee relations.
(Walling v. Yangerman-Reynolds Hardwook Co., 325 U.S. 419; Walling v. Harischfeger Corp.
325 U.S. 427). The 'Regular rate of pay also ordinarily includes incentive bonus or profit- sharing One other reason why application of the NAWASA case should be rejected is that this Court is not
payments made in addition to the normal basic pay (56 C.J.S., pp. 704-705), and it was also prepared to accept that it can lay down a less cumbersome formula for a company-wide overtime
held that the higher rate for night, Sunday and holiday work is just as much as regular rate as pay other than that which is already provided in the collective bargaining agreement. Courts
the lower rate for daytime work. The higher rate is merely an inducement to accept employment cannot make contracts for the parties themselves.
at times which are not at desirable form a workman's standpoint (International L. Ass'n. Wise
50 F. Supp. 26, affirmed C.C.A. Carbunao v. National Terminals Corp. 139 F. 853). Commonwealth Act 444 prescribes that overtime work shall be paid 'at the same rate as their
regular wages or salary, plus at least twenty-five per centum additional' (Secs. 4 & 5). The law
But this paragraph in the decision appears to have been used and cited by the Court to sustain did not define what is a 'regular wage or salary'. What the law emphasized by way of repeated
the action of the court a quo: that it was correct to include the 25% Sunday premium for the expression is that in addition to 'regular wage', there must be paid an additional 25% of that
purpose of setting the weekly wage of specified workers whose weekly earnings before the passage 'regular wage' to constitute overtime rate of pay. The parties were thus allowed to agree on what
of R.A. 1880 would be diminished, if said premium pay regularly received for three months were shag be mutually considered regular pay from or upon which a 25% premium shall be based and
not included. It is significant that the citations therein used by the Supreme Court are excerpts added to make up overtime compensation. This the parties did by agreeing and accepting for a
from American decisions whose legislation on overtime is at variance with the law in this very long period to a basic hourly rate to which a premium shall be added for purposes of overtime.
jurisdiction in this respect: the U.S. legislation considers work in excess of forty hours a week as
overtime; whereas, what is generally considered overtime in the Philippines is work in excess 'of Also significant is the fact that Commonwealth Act 444 merely sets a minimum, a least premium
the regular 8-hours a day. It is understandably material to refer to precedents in the U.S. for rate for purposes of overtime. In this case, the parties agreed to premium rates four (4) or even
purposes of computing weekly wages under a 40- hour a week rule, since the particular issue six (6) times than that fixed by the Act. Far from being against the law, therefore, the agreement
involved in NAWASA is the conversion of prior weekly regular earnings into daily rates without provided for rates 'commensurate with the Company's reputation of being among the leading
allowing diminution or addition. employers in the Philippines' (Art. 1, Sec. 2, Coll. Barg. Agreement) at the same time that the
Company is maintained in a competitive position in the market Coll. Barg. Agreement, lbid).
No rule of universal application to other cases may, therefore, be justifiably extracted from the
NAWASA case. Let it be enough that in arriving at just solution and correct application of R.A. Since the agreed rates are way above prevailing statutory wages and premiums, fixed by
1880, an inference was drawn from other decisions that a regular wage includes payments 'agreed themselves bona fide through negotiations favored by law, there appears no compelling reason
by the parties to be received during the week.' But to use this analogy in another fact- situation nor basis for declaring the same illegal. A basic principle forming an important foundation of R.A.
would unmitigatingly stretch its value as basis for legal reasoning, for analogies are not perfect 875 is the encouragement given to parties to resort to peaceful settlement of industrial problems
and can bring a collapse if stretched far beyond their logical and reasoned efficacy. Neither would through collective bargaining. It behooves this Court, therefore, to help develop respect for those
it be far to ascribe to the Supreme Court's citation of foreign jurisprudence, which was used for agreements which do not exhibit features of illegality This is the only way to build confidence in
purposes of analogy, the force of statute law, for this would be the consequence if it were allowed the democratic process of collective bargaining. Parties cannot be permitted to avoid the
to be used as authority for all fact-situations, even if different from the NAWASA case. This, implications and ramifications of the agreement.
because courts do not legislate. All they do is apply the law.
Although this Court has gone very far in resolving an doubts and in giving great weight to evidence
The above discussions impel the objective analyst to reject the proposition that the NAWASA and presumptions in favor of labor, it may not go as far as reconstruct the law to fit particular
decision is an embracing and can be used with the authority of a statute's effects on existing cases." (Pp. 174-181, Record)
contracts.
Proof of the correctness of the aforequoted considerations, the appeal of the workers from the
It appears that the answer to dispute lies, not in the text of the NAWASA case but in the terms Industrial Court's decision did not prosper. Affirming the appealed decision, We held:
and conditions and practice in the implementation of, the agreement, an area which makes
The theory, therefore, of the petitioners is to the effect that, notwithstanding the terms and pay, whereas, under Appendix 'B', (Exhs. 'A-l', Petitioners and 'l-A', Respondent) of the Collective
conditions of their existing collective bargaining agreement with respondent Shell Company, Bargaining Agreement of the parties, the premium rate of overtime pay is as high as l50% on
particularly Exhibit 'A-l' for the Petitioners and Exhibit 'l-A' for the Respondent (which is Appendix regular working days up to 250 % on Sundays and recognized national holidays.
'B' of the Collective Bargaining Agreement of the parties), considering the ruling in the NAWASA
case, a recomputation should be made of their basic wage by adding the money value of the fringe In the instant case, on May 22, 1965 PEMA alleged in the court below the following cause of action
benefits enjoyed by them from whence the premium rates agreed upon shall be computed in order as amended on June 7, 1965:
to arrive at the correct computation of their overtime compensation from the Company. On the Since the start of the giving of cost of living allowance and longevity pay and reiterated, after the
other hand, respondent Shell Company maintains that the NAWASA case should not be utilized as promulgation of the Decision in National Waterworks and Sewerage Authority vs. NAWASA
the basis for the alteration of their mode of computing overtime rate of pay as set forth in their Consolidated Unions et al., G.R. No. L-18938, August 31, 1964, the petitioner has repeatedly
collective Bargaining Agreement. It insists that their collective bargaining agreement should be requested respondent that the cost of living allowance and longevity pay be taken into account in
the law between them. the computation of overtime pay, effective as of the grant of said benefits on January 1, 1958, in
accordance with the ruling in said Decision of the Supreme Court. (Page 14, PNB's Brief.)
After a careful and thorough re-examination of the NAWASA case, supra, and a minute
examination of the facts and the evidence of the case now before Us, We rule that the NAWASA To be sure, there could be some plausibility in PNB's pose regarding the jurisdiction of the Industrial
case is not in point and, therefore, is inapplicable to the case at bar. Court over the above cause of action. But, as We have already stated, We agree with the broader
view adopted by the court a quo on said point, and We find that it is in the best interests of an
The ruling of this Court in the NAWASA case contemplates the regularity and continuity of the concerned that this almost 25-year dispute be settled once and for all without the need of going
benefits enjoyed by the employees or workers (for at least three (3) months) as the condition through other forums only for the matter to ultimately come back to this Court probably years later,
precedent before such additional payments or benefits are taken into account. This is evident in taking particular note as We do, in this regard, of the cases cited on pages 9-10 of PEMA's original
the aforequoted ruling of this Court in the NAWASA case as well as in the hereinbelow cited memo, as follows:
authorities, to wit:
The 'regular rate' of pay on the basis of which overtime must be computed must reflect an Realizing its error before in not considering the present case a certified labor dispute, the Bank
payments which parties have agreed shall be received regularly during the work week, exclusive now concedes that the case at bar 'belongs to compulsory arbitration'. Hence, the lawful powers
of overtime payments.' Walling v. Garlock Packing Co. C.C.A.N.Y., 159 F. 2d 44, 45. (Page 289, of the CIR over the same. However, the Bank says 'overtime differential is but a money claim,
WORDS And PHRASES, Permanent Edition, Vol. 36A; Italics supplied); and (and) respondent court does not have jurisdiction to take cognizance of the same'.
As a general rule the words 'regular rate' mean the hourly rate actually paid for the normal,
But this is not a pure money claim (pp. 10-11, Opposition) because other factors are involved -
non-overtime work week, and an employee's regular compensation is the compensation which
certification by the President, the matter may likely cause a strike, the dispute concerns national
regularly and actually reaches him, ... .' (56 C.J.S. 704; Emphasis supplied).
interest and comes within the CIR's injunction against striking, and the employer-employee
Even in the definition of wage under the Minimum Wage Law, the words 'customarily furnished' relationship between the Bank and the employees has not been severed. Besides, 'money claim'
are used in referring to the additional payments or benefits, thus, - is embraced within the term 'compensation' and therefore falls squarely under the jurisdiction of
the CIR in the exercise of its arbitration power (Sec. 4, CA 103; Please see also Republic vs. CIR,
'Wage' paid to any employee shag mean the remuneration or earnings, however designated, L- 21303, Sept. 23/68; Makalintal J., NWSA Case, L-26894-96, Feb. 28/69; Fernando, J.).
capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece,
commission basis, or other method of calculating the same, which is payable by an employer to What confers jurisdiction on the Industrial Court, says Justice J.B.L. Reyes, is not the form or
an employee under a written or unwritten contract of employment for work done or to be done or manner of certification by the President, but the referral to said court of the industrial dispute
for services rendered or to be rendered, and includes the fair and reasonable value, as determined between the employer and the employees. (Liberation Steamship vs. CIR, etc., L-25389 & 25390,
by the Secretary of Labor, of board, lodging or other facilities customarily furnished by the June 27/68).
employer to the employee.' (Sec. 2 (g), R.A. No. 602).
In Phil. Postal Savings Bank, et al. vs. CIR, et al., L-24572, Dec. 20/67, this Honorable Court,
Having been stipulated by the parties that ... the Tin Factory Incentive Pay has ceased in view of speaking through Chief Justice Concepcion, held that the certification of the issue 'as a dispute
the closure of the factory in May 1966 the fringe benefits as described show that they are affecting an industry indispensable to the national interest' leaves 'no room for doubt on the
occasionally not regularly enjoyed and that not all employees are entitled to them', herein jurisdiction of the CIR to settle such dispute.'
petitioners failed to meet the test laid down by this Court in the NAWASA case. Further, the
Relatedly, however, it is to be noted that it is clear from the holding of the Industrial Court's decision
collective bargaining agreement resorted to by the parties being in accordance with R.A. 875, with
We have earlier quoted, "the cause of action (here) is not on any decision of any court but on the
its provision on overtime pay far way beyond the premium rate provided for in Sections 4 and 5
provisions of the law which have been in effect at the time of the occurrence of the cause of action
of Commonwealth Act 444, the same should govern their relationship. Since this is their contract
in relation to a labor dispute". Viewed from such perspective laid by the lower court itself, it can
entered into by them pursuant to bargaining negotiations under existing laws, they are bound to
respect it. It is the duty of this Court to see to it that contracts between parties, not tainted with hardly be said that it indeed exercised purely its power of arbitration, which means laying down the
infirmity or irregularity or illegality, be strictly complied with by the parties themselves. This is the terms and conditions that should govern the relationship between the employer and employees of
an enterprise following its own appreciation of the relevant circumstances rather empirically. More
only way by which unity and order can be properly attained in our society.
accurately understood, the court in fact indulged in an interpretation of the applicable law, namely,
It should be noted in passing that Commonwealth Act 444 prescribes only a minimum of at least CA 444, in the light of its own impression of the opinion of this Court in NAWASA and based its
25% in addition to the regular wage or salary of an employee to constitute his overtime rate of decision thereon.
Accordingly, upon the fact-situation of this case hereunder to be set forth, the fundamental question to. And on this score, it must always be borne in mind that wage is indisputably intended as payment
for Us to decide is whether or not the decision under appeal is in accordance with that law and the for work done or services rendered. Thus, in the definition of wage for purposes of the Minimum
cited jurisprudence. In brief, as PEMA posits, is NAWASA four-square with this case? And even Wage Law, Republic Act No. 602, it is stated:
assuming, for a while, that in a sense what is before Us is an arbitration decision, private respondent 'Wage' paid to any employee shall mean the remuneration or earnings, however designated,
itself admits in its above-mentioned memorandum that this Court is not without power and authority capable of being expressed in terms of money, whether fixed or ascertained on a time task, piece,
to determine whether or not such arbitration decision is against the law or jurisprudence or commission basis or other method of calculating the same, which is payable by an employer to an
constitutes a grave abuse of discretion. Thus, in PEMA's memorandum, it makes the observation employee under a written or unwritten contract of employment for work done or to be done or for
that "(F)urthermore, in the Shell cases, the unions are using the NAWASA decision as a source of services rendered or to be rendered and includes the fair and reasonable value as determined by
right for recomputation, while in the PNB, the Union merely cites the NAWASA doctrine, not as a the Secretary of Labor, of board, lodging or other facilities customarily furnished by the employer
source of right, but as a legal authority or reference by both parties so the Union demand may be to the employee. 'Fair and reasonable value' shall not include a profit to the employer which
granted. " (Motion to Dismiss, p. 3.) reduces the wage received by the employee below the minimum wage applicable to the employee
under this Act, nor shall any transaction between an employer or any person affiliated with the
Obviously, therefore, the polestar to which Our mental vision must be focused in order that We may employer and the employee of the employer include any profit to the employer or affiliated person
arrive at a correct legal and equitable determination of this controversy and, in the process make which reduces the employee's wage below the wage applicable to the employee under this
NAWASA better understood as We believe it should be, is none other than Sections 3 and 4 of Com. Act.' 2 (Emphasis supplied).
Act No. 444, the Eight Hour Labor Law, which pertinently provide thus:
As can be seen, wage under said law, in whatever means or form it is given to the worker, is "for
SEC. 3. Work may be performed beyond eight hours a day in case of actual or impending work done or to be done or for services rendered or to be rendered" and logically "includes (only)
emergencies caused by serious accidents, fire, flood, typhoon, earthquake, epidemic, or other the fair and reasonable value as determined by the Secretary of Labor, of board, lodging or other
disaster or calamity in order to prevent loss to life and property or imminent danger to public facilities customarily furnished by the employer to the employee".
safety; or in case of urgent work to be performed on the machines, equipment, or installations in
order to avoid a serious loss which the employer would otherwise suffer, or some other just cause Indeed, for the purpose of avoiding any misunderstanding or misinterpretation of the word "wage"
of a similar nature; but in all such cases the laborers and employees shall be entitled to receive used in the law and to differentiate it from "supplement", the Wage Administration Service to
compensation for the overtime work performed at the same rate as their regular wages or salary, implement the Minimum Wage Law, defined the latter as:
plus at least twenty-five per centum additional. extra remuneration or benefits received by wage earners from their employers and include but are
not restricted to pay for vacation and holidays not worked; paid sick leave or maternity leave;
In case of national emergency the Government is empowered to establish rules and regulations overtime rate in excess of what is required by law; pension, retirement, and death benefits; profit-
for the operation of the plants and factories and to determine the wages to be paid the laborers. 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. (Emphasis ours).
SEC. 4. No person, firm, or corporation, business establishment or place or center of labor shall
compel an employee or laborer to work during Sundays and legal holidays, unless he is paid an In these times when humane and dignified treatment of labor is steadily becoming universally an
additional sum of at least twenty-five per centum of his regular remuneration: Provided, however, obsession of society, we, in our country, have reached a point in employer- employee relationship
that this prohibition shall not apply to public utilities performing some public service such as wherein employers themselves realize the indispensability of at least making the compensation of
supplying gas, electricity, power, water, or providing means of transportation or communication. workers equal to the worth of their efforts as much as this case can be statistically determined.
Thus, in order to meet the effects of uncertain economic conditions affecting adversely the living
The vital question is, what does "regular wage or salary" mean or connote in the light of the demand conditions of wage earners, employers, whenever the financial conditions of the enterprise permit,
of PEMA?
grant them what has been called as cost-of-living allowance. In other words, instead of leaving the
workers to assume the risks of or drift by themselves amidst the cross -currents of country-wide
In Our considered opinion, the answer to such question lies in the basic rationale of overtime pay.
economic dislocation, employers try their best to help them tide over the hardships and difficulties
Why is a laborer or employee who works beyond the regular hours of work entitled to extra
of the situation. Sometimes, such allowances are voluntarily agreed upon in collective bargaining
compensation called in this enlightened time, overtime pay? Verily, there can be no other reason
agreements. At other times, it is imposed by the government as in the instances of Presidential
than that he is made to work longer than what is commensurate with his agreed compensation for
Decrees Nos. 525, 928, 1123, 1389, 1614, 1678, 1751 and 1790; Letters of Instructions No. 1056
the statutorily fixed or voluntarily agreed hours of labor he is supposed to do. When he thus spends
and Wage Order No. 1. Notably, Presidential Decree No. 1751 increased the statutory wage at all
additional time to his work, the effect upon him is multi-faceted: he puts in more effort, physical
levels by P400 in addition to integrating the mandatory emergency living allowances under
and/or mental; he is delayed in going home to his family to enjoy the comforts thereof; he might
Presidential Decree No. 525 and Presidential Decree No. 1123 into the basic pay of all covered
have no time for relaxation, amusement or sports; he might miss important pre-arranged
workers.
engagements; etc., etc. It is thus the additional work, labor or service employed and the adverse
effects just mentioned of his longer stay in his place of work that justify and is the real reason for Going over these laws, one readily notices two distinctive features: First, it is evidently gratifying
the extra compensation that he called overtime pay. that the government, in keeping with the humanitarian trend of the times, always makes every
effort to keep wages abreast with increased cost of living conditions, doing it as soon as the necessity
Overtime work is actually the lengthening of hours developed to the interests of the employer and
for it arises. However, obviously, in order not to overdo things, except when otherwise provided, it
the requirements of his enterprise. It follows that the wage or salary to be received must likewise
spares from such obligation employers who by mutual agreement with their workers are already
be increased, and more than that, a special additional amount must be added to serve either as
paying what the corresponding law provides (See Sec. 4 of P.D. No. 525; Section 2 of P.D. No. 851
encouragement or inducement or to make up fop the things he loses which We have already referred
until P.D. 1684 abolished all exemptions under P.D. No. 525, P.D. No. 1123, P.D. No. 851 and P.D. So also with the longevity pay; manifestly, this was not based on the daily or monthly amount of
No. 928 among distressed employers who even though given sufficient lapse of time to make the work done or service rendered it was more of a gratuity for their loyalty, or their having been in the
necessary adjustment have not done so.)3 bank's employment for consideration periods of time. Indeed, with particular reference to the
longevity pay, the then existing collective bargaining contract expressly provided: "... That this
In the case at bar, as already related earlier, the cost-of-living allowance began to be granted in benefit shall not form part of the basic salaries of the officers so affected."
1958 and the longevity pay in 1981. In other words, they were granted by PNB upon realizing the
difficult plight of its labor force in the face of the unusual inflationary situation in the economy of the PEMA may contend that the express exclusion of the longevity pay, means that the cost-of-living
country, which, however acute, was nevertheless expected to improve. There was thus evident an allowance was not intended to be excluded. Considering, however, the contingent nature of the
inherently contingent character in said allowances. They were not intended to be regular, much less allowances and their lack of relation to work done or service rendered, which in a sense may be
permanent additional part of the compensation of the employees and workers. To such effect were otherwise in respect to longevity pay PEMA's contention is untenable. The rule of exclusio
the testimonies of the witnesses at the trial. For instance, Mr. Ladislao Yuzon declared: unius, exclusio alterius would not apply here, if only because in the very nature of the two benefits
in question, considerations and conclusions as to one of them could be non-sequitur as to the other.
ATTORNEY GESMUNDO
Withal, there is the indisputable significant fact that after 1958, everytime a collective bargaining
Questioning ....
agreement was being entered into, the union always demanded the integration of the cost-of-living
Q. Calling your attention to paragraph No. 1, entitled monthly living allowance, which has been marked as Exhibit 'A-l', will you kindly allowances and longevity pay, and as many times, upon opposition of the bank, no stipulation to
tell us the history of this benefit- monthly living allowance, why the same has been granted? such effect has ever been included in any of said agreements. And the express exclusion of longevity
pay was continued to be maintained.
A. Well, in view of the increasing standard of living, we decided to demand from management in our set of demands ... included in our
set of demands in 1957-1958 a monthly living allowance in addition to our basic salary. This benefit was agreed upon and granted to
take effect as of January 1, 1958. That was the first time it was enjoyed by the employees of the Philippine National Bank. I t started on On this point, the respondent court held that under its broad jurisdiction, it was within the ambit of
a lesser amount but year after year we have been demanding for increases on this living allowance until we have attained the present
its authority to provide for what the parties could not agree upon. We are not persuaded to view the
amount of P 1 50.00 a month, starting with P40.00 when it was first granted. The same is still being enjoyed by the employees on a
much higher amount. There were a few variations to that. (t. t.s.n., pp. 18-19, Hearing of August 16, 1965) matter that way. We are not convinced that the government, thru the Industrial Court, then, could
impose upon the parties in an employer-employee conflict, terms and conditions which are
which testimony was affirmed by Mr. Panfilo Domingo, on cross- examination by counsel for the inconsistent with the existing law and jurisprudence, particularly where the remedy is sought by the
respondent, reading as follows: actors more on such legal basis and not purely on the court's arbitration powers.

ATTORNEY GESMUNDO:
As pointed out earlier in this opinion, Our task here is two-fold: First, reviewing the decision under
Q. Do you recall Mr. Domingo, that in denying the cost of living allowance and longevity pay for incorporation with the basic salary, the scrutiny as based on law and jurisprudence, the question is whether or not the rulings therein are
reason given by the management was that as according to you, it will mean an added cost and ' furthermore it will increase the correct. And second, reading such judgment as an arbitration decision, did the court a quo gravely
contribution of the Philippine National Bank to the GSIS, is that correct?
abuse its discretion in holding, as it did, that cost-of-living allowance and longevity pay should be
A. This is one of the reasons, of the objections for the inclusion of the living allowance and longevity pay to form part of the basic pay, I included in the computation of overtime pay?
mean among others, because the basic reason why management would object is the cost of living allowance is temporary in nature, the
philosophy behind the grant of this benefit, Nonetheless, it was the understanding if I recall right that in the event that cost of li ving In regard to the first question, We have already pointed out to start with, that as far as longevity
should go down then there should be a corresponding decrease in the cost of living allowance being granted I have to mention this
because this is the fundamental philosophy in the grant of cost of living allowance. (Pp. 19-20, Record.) pay is concerned, it is beyond question that the same cannot be included in the computation of
overtime pay for the very simple reason that the contrary is expressly stipulated in the collective
Much less were they dependent on extra or special work done or service rendered by the bargaining agreement and, as should be the case, it is settled that the terms and conditions of a
corresponding recipient. Rather, they were based on the needs of their families as the conditions of collective bargaining agreement constitute the law between the parties. (Mactan Workers Union vs.
the economy warranted. Such is the inexorable import of the pertinent provisions of the collective Aboitiz, 45 SCRA 577. See also Shell Oil Workers Union et al. vs. Shell Company of the Philippines,
bargaining agreement: supra) The contention of PEMA that the express provision in the collective bargaining agreement
that "this benefit (longevity pay) shall not form part of the basic salaries of the officers so affected"
MONTHLY LIVING ALLOWANCE cannot imply the same Idea insofar as the computation of the overtime pay is concerned defies the
rules of logic and mathematics. If the basic pay cannot be deemed increased, how could the overtime
All employees of the Bank shall be granted a monthly living allowance of P140, plus P10 for each
pay be based on any increased amount at all?
minor dependent child below 21 years of age, but in no case shall the total allowance exceed P200
or 25% of the monthly salary, whichever is higher, subject to the following conditions: However, the matter of the cost-of-living allowance has to be examined from another perspective,
a) That this new basic allowance shall be applicable to all employees, irrespective of their civil namely, that while PEMA had been always demanding for its integration into the basic pay, it never
status; succeeded in getting the conformity of PNB thereto, and so, all collective bargaining agreements
b) That a widow or widower shall also enjoy the basic allowance of P140 a month, plus the entered -4 into periodically by the said parties did not provide therefor. And it would appear that
additional benefit of P10 for each minor dependent child but not to exceed P200 or 25% of basic PEMA took the non-agreement of the bank in good grace, for the record does not show that any
salary whichever is higher. remedial measure was ever taken by it in connection therewith. In other words, the parties seemed
c) That in case the husband and wife are both employees in the Bank both shall enjoy this new to be mutually satisfied that the matter could be better left for settlement on the bargaining table
basic monthly living allowance of P140 but only one of spouses shall be entitled to claim the sooner or later, pursuant to the spirit of free bargaining underlying Republic Act 875, the Industrial
additional benefit of P10 for each minor legitimate or acknowledged child. (Pp. 30-31, PNB's Peace Act then in force. Or, as observed by PEMA in its memorandum, (page 23), the parties "agreed
memo.)
to let the question remain open-pending decision of authorities that would justify the demand of the parties anything beyond what they have agreed upon which is not tainted with illegality. On the
Union." Indeed, on pages 23-24 of said memorandum, the following position of PEMA is stated thus: other hand, where the parties fail to come to an agreement, on a matter not legally required, the
court abuses its discretion when it obliges any 6f them to do more than what is legally obliged.
Thus the following proceeding took place at the Court a quo:
Doctrinally, We hold that, in the absence of any specific provision on the matter in a collective
ATTY. GESMUNDO: That is our position, Your Honor, because apparently there was an understanding reached between the parties as to
their having to wait for authorities and considering that the issue or one of the issues then involved in the NAWASA case pending in the
bargaining agreement, what are decisive in determining the basis for the computation of overtime
CIR supports the stand of the union, that the principle enunciated in connection with that issue is applicable to this case. pay are two very germane considerations, namely, (1) whether or not the additional pay is for extra
work done or service rendered and (2) whether or not the same is intended to be permanent and
Q. Do we understand from you, Mister Yuson, that it was because of the management asking you for authorities in allowing the
integration of the cost of living allowance with your basic salary and your failure to produce at the time such authorities that the union
regular, not contingent nor temporary and given only to remedy a situation which can change any
then did not bring any case to the Court? time. We reiterate, overtime pay is for extra effort beyond that contemplated in the employment
contract, hence when additional pay is given for any other purpose, it is illogical to include the same
A. Well, in the first place, it is not really my Idea to be bringing matters to the Court during my time but I would much prefer that we
agree on the issue. Well, insofar as you said that the management was asking me, welt I would say that they were invoking (on) in the basis for the computation of overtime pay. This holding supersedes NAWASA.
authorities that we can show in order to become as a basis for granting or for agreeing with us although we were aware of the existence
of a pending case which is very closely similar to our demand, yet we decided to wait until this case should be decided by the Court Having arrived at the foregoing conclusions, We deem it unnecessary to discuss any of the other
so that we can avail of the decision to present to management as what they are asking for. (t.s.n., pp. 31-32, 35-36, Aug. 28,1965.)
issues raised by the parties.
Now, to complete proper understanding of the character of the controversy before Us, and lest it be
WHEREFORE, judgment is hereby rendered reversing the decision appealed from, without costs.
felt by those concerned that We have overlooked a point precisely related to the matter touched in
the above immediately preceding paragraph, it should be relevant to quote a portion of the
"Stipulation of Facts" of the parties hereto:
1. This particular demand was among those submitted by Petitioner-Union in the current collective
bargaining negotiations to the Respondent Bank. However, since this case was already filed in
court on May 22, 1965, the parties agreed not to include this particular demand in the discussion,
leaving the matter to the discretion and final judicial determination of the courts of justice." (Page
81, Rec.)

In fine, what the parties commonly desire is for this Court to construe CA 444 in the light of NAWASA,
considering the fact- situation of the instant case.

In this respect, it is Our considered opinion, after mature deliberation, that notwithstanding the
portions of the NAWASA's opinion relied upon by PEMA, there is nothing in CA 444 that could justify
its posture that cost-of-living allowance should be added to the regular wage in computing overtime
pay.

After all, what was said in NAWASA that could be controlling here? True, it is there stated that "for
purposes of computing overtime compensation, regular wage includes all payments which the parties
have agreed shall be received during the work week, including - differential payments for working
at undesirable times, such as at night and the board and lodging customarily furnished the employee.
... The 'regular rate' of pay also ordinarily includes incentive bonus or profit-sharing payments made
in addition to the normal basic pay (56 C.J.S., pp. 704-705), and it was also held that the higher
rate for night, Sunday and holiday work is just as much a regular rate as the lower rate for daytime
work. The higher rate is merely an inducement to accept employment at times which are not as
desirable from a workmen's standpoint (International L. Ass'n vs. National Terminals Corp. C.C.
Wise, 50 F. Supp. 26, affirmed C.C.A. Carbunoa v. National Terminals Corp. 139 F. 2d 853)." (11
SCRA, p. 783)

But nowhere did NAWASA refer to extra, temporary and contingent compensation unrelated to work
done or service rendered, which as explained earlier is the very nature of cost-of- living allowance.
Withal, in strict sense, what We have just quoted from NAWASA was obiter dictum, since the only
issue before the Court there was whether or not "in computing the daily wage, (whether) the addition
compensation for Sunday should be included. " (See No. 7 of Record)

In any event, as stressed by Us in the Shell cases, the basis of computation of overtime pay beyond
that required by CA 444 must be the collective bargaining agreement, 4 for, to reiterate Our
postulation therein and in Bisig ng Manggagawa, supra, it is not for the court to impose upon the

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