ASIA PACIFIC CHARTERING

FAROLAN, respondent.

(PHILS.)

INC., petitioner,

vs. MARIA

LINDA

R.

Petitioner Asia Pacific Chartering (Phils) Inc. was the general sales agent of the Scandinavian Airline
System, an off-line international airline company with license to do business in the Philippines. As GSA,
petitioner sold passenger and cargo spaces for airlines operated by SAS.
Respondent Maria Linda R. Farolan was hired as Sales Manager of petitioner for its passenger and cargo
GSA operations for SAS with the following stipulated:
It is gathered that Leslie Murray, then Sales Manager of petitioner, talked to respondent into accepting the
position after verbally briefing her on the nature of the position.
Soon after respondent assumed her post, she participated in a number of meetings/seminars all geared
towards improving her marketing and sales skills.
It was then reported in 1993 that there was a drop in performance. As reflected in Farolans report, there
was a drop in SAS sales revenues which to her was attributable to market forces beyond her control.
Noting the marked decline in SAS sales revenues, petitioner directed its high ranking officer Roberto
Zozobrado in January 1994 to conduct an investigation on the matter and identify the problem/s and
implement possible solutions.
Zozobrado thus informally took over some of Farolans marketing and sales responsibilities but Farolan
still remained in position and received same salary and benefits.
By petitioners claim, Zozobrado found out that respondent did not adopt any sales strategy nor conduct any
sales meeting or develop other sources of revenue for SAS, she having simply let her sales staff perform
their functions all by themselves; in 1994, Soren Jespersen, General Manager of SAS in Hongkong,
Southern China, Taipei and the Philippines, came to the Philippines to assess the statistics on SAS sales
revenues and SAS was convinced that respondent was not fit for the job of Sales Manager; and in view of
the changes introduced by Zozobrado, SAS-GSA sales operations drew positive results.
Despite a letter commending Zozobrado and Farolans achievement, petitioner sent Farolan a letter of
termination on the ground of loss of confidence.
Thus spawned the filing by respondent of a complaint for illegal dismissal against petitioner, Bondoc,
Zozobrado and one Donald Marshall (the record indicates that he had ceased to be connected with
petitioner when the case was pending before the Labor Arbiter), with prayer for damages and attorneys
fees. In her complaint petitioner alleged that Bondoc and Zozobrado had asked her to tender her resignation
as she was not the person whom SAS was looking for to handle the position of Sales Manager but that she
refused, hence, she was terminated.
The Labor Arbiter, after a detailed analysis of the evidence for both parties, found for respondent upon the
following issues:
1. Whether or not complainant was validly terminated for cause;
2. Whether or not due process was observed when complainant was terminated; and
3. Whether or not any of the parties are entitled to damages,
and disposed in his decision[11] as follows:
The LA then found the dismissal to be without just cause and effected with malice, ill will and bad faith.
On appeal, the NLRC, by Decision reversed the Labor Arbiters decision, it recognizing the right of
petitioner as employer to terminate or dismiss employees based on loss of trust and confidence, the right
being a management prerogative.
Respondents Motion for Reconsideration of the NLRC Decision having been denied, she brought her case
to the Court of Appeals via Certiorari.
By Decision of June 28, 2001, the Court of Appeals, as stated early on, reversed the NLRC decision for
having been issued with grave abuse of discretion amounting to lack or in excess of jurisdiction.
Petitioner filed a motion for reconsideration of the Court of Appeals decision but it was denied, hence, the
present Petition for Review on Certiorari anchored on the following grounds.

Before passing on petitioners position, this Court deems it imperative to discuss the nature of respondents
job as sales manager of petitioner. It is not disputed that her job description, and the terms and conditions of
her employment, with the exception of her salary and allowances, were never reduced to writing.
Recent decisions of this Court distinguish the treatment of managerial employees from that of rank and file
personnel insofar as the application of the doctrine of loss of trust and confidence is concerned.
As enunciated in Samson v. NLRC, 330 SCRA 460,
Before one may be properly considered a managerial employee, all the following conditions must be met:
(1) Their primary duty consists of the management of the establishment in which they are employed or of a
department or subdivision thereof;
(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 and
recommendations as to the hiring and firing and as to the promotion or any other change of status of other
employees are given particular weight.
Managerial employees are ranked as Top Managers, Middle Managers and First Line Managers. The mere
fact that an employee is designated manager does not ipso facto make him one-designation should be
reconciled with the actual job description of the employee for it is the job description that determines the
nature of employment.
Even assuming, however, that respondent was a managerial employee, the stated ground (in the letter of
termination) for her dismissal, loss of confidence, should have a basis and determination thereof cannot be
left entirely to the employer.
Loss of trust and confidence to be a valid ground for an employees dismissal must be based on
a willful breach and founded on clearly established facts.[26] A breach is willful if it is
done intentionally, knowingly and purposely, withoutjustifiable excuse, as distinguished from an act done
carelessly, thoughtlessly, heedlessly or inadvertently.[27]
While an employee may be dismissed because of inefficiency, neglect or carelessness, the law implies a
situation or undertaking by an employee in entering into a contract of employment that he is competent to
perform the work undertaken and is possessed of the requisite skill and knowledge to enable him to do so,
and that he will do the work of the employer in a careful manner
In fine, this Court finds that respondent had been illegally dismissed and is accordingly entitled to
reinstatement to her former position without loss of seniority rights and payment of backwages. [30] But as
the matter of reinstatement is no longer feasible as the GSA contract between SAS and petitioner had been
terminated in May of 1996, respondent is, as correctly held by the Court of Appeals, entitled to separation
pay in an amount equivalent to one (1) month salary for every year of service, a fraction of six (6) months
to be considered a year.
MERCIDAR FISHING CORPORATION represented by its President DOMINGO B.
NAVAL, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and FERMIN AGAO,
JR., respondents.
Fermin Agao, Jr. filed a case against MFC for illegal dismissal, violation of P.D. No. 851, and nonpayment of five days service incentive leave Private respondent had been employed as a bodegero or ships
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 reported to work.
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 health
clearance, he was told to come back another time as he could not be reinstated immediately.
MFC 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, absent without leave for three
months until August 28, 1998. Petitioner further claims that, nonetheless, it assigned private respondent to

another vessel, but the latter was left behind on September 1, 1990. Thereafter, private respondent asked for
a certificate of employment on September 6 on the pretext that he was applying to another fishing
company. On September 10, 1990, he refused to get the certificate and resign unless he was given
separation pay.[3]
Labor Arbiter Arthur L. Amansec rendered a decision ordering MFC to reinstate complainant with
backwages, pay him his 13th month pay and incentive leave pay for 1990.
MFC appealed to the NLRC which dismissed the appeal for lack of merit. The NLRC dismissed petitioners
claim that it cannot be held liable for service incentive leave pay by fishermen in its employ as the latter
supposedly are field personnel and thus not entitled to such pay under the Labor Code.
The NLRC likewise denied petitioners motion for reconsideration of its decision in its order dated October
25, 1993.
The petition has no merit.
Art. 82 of the Labor Code provides:
ART. 82. Coverage. - The provisions of this Title [Working Conditions and Rest Periods] shall
apply 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
dependent on him for support, domestic helpers, persons in the personal service of another, and
workers who are paid by results as determined by the Secretary of Labor in appropriate
regulations.
Field personnel shall refer to non-agricultural employees who regularly perform their duties
away from the principal place of business or branch office of the employer and whose actual
hours of work in the field cannot be determined with reasonable certainty.
MFC argues essentially that since the work of private respondent is performed away from its principal
place of business, it has no way of verifying his actual hours of work on the vessel. It contends that private
respondent and other fishermen in its employ should be classified as field personnel who have no statutory
right to service incentive leave pay.
In the case of Union of Filipro Employees (UFE) v. Vicar, this Court explained the meaning of the phrase
whose actual hours of work in the field cannot be determined with reasonable certainty in Art. 82 of the
Labor Code.
In contrast, in the case at bar, during the entire course of their fishing voyage, fishermen employed by
petitioner have no choice but to remain on board its vessel. Although they perform non-agricultural work
away from petitioners business offices, the fact remains that throughout the duration of their work they are
under the effective control and supervision of petitioner through the vessels patron or master as the NLRC
correctly held.
LABOR CONGRESS OF THE PHILIPPINES (LCP) petitioners, vs. NATIONAL LABOR
RELATIONS COMMISSION, EMPIRE FOOD PRODUCTS, its Proprietor/President & Manager,
MR. GONZALO KEHYENG and MRS. EVELYN KEHYENG, respondents.
99 persons were named as petitioners in this proceeding were rank-and-file employees of respondent
Empire Food Products, which hired them on various dates.
Petitioners filed against private respondents a complaint for payment of money claim[s] and for violation of
labor standard[s] laws They also filed a petition for direct certification of petitioner Labor Congress of the
Philippines as their bargaining representative.
On October 23, 1990, petitioners represented by LCP President Benigno B. Navarro, Sr. and private
respondents Gonzalo Kehyeng and Evelyn Kehyeng in behalf of Empire Food Products, Inc. entered into a
Memorandum of Agreement.
In an Order dated October 24, 1990, Mediator Arbiter Antonio Cortez approved the memorandum of
agreement and certified LCP as the sole and exclusive bargaining agent among the rank-and-file employees
of Empire Food Products for purposes of collective bargaining with respect to wages, hours of work and
other terms and conditions of employment (Annex B of Petition).

On November 9, 1990, petitioners through LCP President Navarro submitted to private respondents a
proposal for collective bargaining.
On January 23, 1991, petitioners filed a complaint for
a. Unfair Labor Practice by way of Illegal Lockout and/or Dismissal;
b. Union busting thru Harassments, threats, and interfering with the rights of employees to selforganization;
c. Violation of the Memorandum of Agreement dated October 23, 1990;
d. Underpayment of Wages,
e. Actual, Moral and Exemplary Damages.
Labor Arbiter Ariel C. Santos absolved private respondents of the charges of unfair labor practice, union
busting, violation of the memorandum of agreement, underpayment of wages and denied petitioners prayer
for actual, moral and exemplary damages.
Labor Arbiter Santos, however, directed the reinstatement of the individual complainants:
The undersigned Labor Arbiter is not oblivious to the fact that respondents have violated a cardinal rule in
every establishment that a payroll and other papers evidencing hours of work, payments, etc. shall always
be maintained and subjected to inspection and visitation by personnel of the Department of Labor and
Employment. As such penalty, respondents should not escape liability for this technicality, hence, it is
proper that all individual complainants except those who resigned and executed quitclaim[s] and releases
prior to the filing of this complaint should be reinstated to their former position[s] with the admonition to
respondents that any harassment, intimidation, coercion or any form of threat as a result of this immediately
executory reinstatement shall be dealt with accordingly.
On appeal, the National Labor Relations Commission vacated the Decision and remanded the case to the
Labor Arbiter for further proceedings.
Anent the charge that there was underpayment of wages, the evidence points to the contrary. The
enumeration of complainants wages in their consolidated Affidavits of merit and position paper which
implies underpayment has no leg to stand on in the light of the fact that complainants admission that they
are piece workers or paid on a pakiao [basis] i.e. a certain amount for every thousand pieces of cheese curls
or other products repacked. The only limitation for piece workers or pakiao workers is that they should
receive compensation no less than the minimum wage for an eight (8) hour work compliance therewith was
satisfactorily explained by respondent Gonzalo Kehyeng.
On appeal, the NLRC, in its Resolution dated 29 March 1995, affirmed in toto the decision of Labor
Arbiter Santos. In so doing, the NLRC sustained the Labor Arbiters findings that: the claims for
underpayment of wages were without basis as complainants were admittedly pakiao workers and paid on
the basis of their output subject to the lone limitation that the payment conformed to the minimum wage
rate for an eight-hour workday; and petitioners were not underpaid.
Their motion for reconsideration having been denied by the NLRC in its Resolution of 31 October 1995,
petitioners filed the instant special civil action for certiorari.
WHETHER OR NOT THE PUBLIC RESPONDENT GRAVELY ABUSED ITS DISCRETION WHEN IT DEPRIVED THE
PETITIONERS OF THEIR CONSTITUTIONAL RIGHT TO SELF-ORGANIZATION, SECURITY OF TENURE,
PROTECTION TO LABOR, JUST AND HUMANE CONDITIONS OF WORK AND DUE PROCESS.
III
WHETHER OR NOT THE PETITIONERS WERE ILLEGALLY EASED OUT [OF] OR CONSTRUCTIVELY DISMISSED
FROM THEIR ONLY MEANS OF LIVELIHOOD.
IV
WHETHER OR NOT PETITIONERS SHOULD BE REINSTATED FROM THE DATE OF THEIR DISMISSAL UP TO THE
TIME OF THEIR REINSTATEMENT, WITH BACKWAGES, STATUTORY BENEFITS, DAMAGES AND ATTORNEYS
FEES.[7]

That petitioner employees are pakyao or piece workers does not imply that they are not regular employees
entitled to reinstatement. Private respondent Empire Food Products, Inc. is a food and fruit processing
company. In Tabas v. California Manufacturing Co., Inc. (169 SCRA 497), this Honorable Court held that
the work of merchandisers of processed food, who coordinate with grocery stores and other outlets for the
sale of the processed food is necessary in the day-to-day operation[s] of the company. With more reason,
the work of processed food repackers is necessary in the day-to-day operation[s] of respondent Empire
Food Products.[10]
It may likewise be stressed that the burden of proving the existence of just cause for dismissing an
employee, such as abandonment, rests on the employer, [11] a burden private respondents failed to discharge.
Private respondents, moreover, in considering petitioners employment to have been terminated by
abandonment, violated their rights to security of tenure and constitutional right to due process in not even
serving them with a written notice of such termination. [12] Section 2, Rule XIV, Book V of the Omnibus
Rules Implementing the Labor Code provides:
That being said, the amount of back wages to which each petitioner is entitled, however, cannot be
fully settled at this time. Petitioners, as piece-rate workers having been paid by the piece, [14] there is need to
determine the varying degrees of production and days worked by each worker. Clearly, this issue is best left
to the National Labor Relations Commission.
As to the other benefits, namely, holiday pay, premium pay, 13 th month pay and service incentive
leave which the labor arbiter failed to rule on but which petitioners prayed for in their complaint, [15] we hold
that petitioners are so entitled to these benefits. Three (3) factors lead us to conclude that petitioners,
although piece-rate workers, were regular employees of private respondents.
First, as to the nature of petitioners tasks, their job of repacking snack food was necessary or
desirable in the usual business of private respondents, who were engaged in the manufacture and selling of
such food products; second, petitioners worked for private respondents throughout the year, their
employment not having been dependent on a specific project or season; and third, the length of time [16] that
petitioners worked for private respondents. Thus, while petitioners mode of compensation was on a per
piece basis, the status and nature of their employment was that of regular employees.
SEC. 8. Holiday pay of certain employees.(b) Where a covered employee is paid by results or output, such as payment on piece work, his
holiday pay shall not be less than his average daily earnings for the last seven (7) actual working
days preceding the regular holiday:Provided, however, that in no case shall the holiday pay be
less than the applicable statutory minimum wage rate.
In addition, the Revised Guidelines on the Implementation of the 13 th Month Pay Law, in view of the
modifications to P.D. No. 851[19] by Memorandum Order No. 28, clearly exclude the employer of piece rate
workers from those exempted from paying 13th month pay, to wit:
2. EXEMPTED EMPLOYERS
The following employers are still not covered by P.D. No. 851:
d. Employers of those who are paid on purely commission, boundary or task basis, and those
who are paid a fixed amount for performing specific work, irrespective of the time
consumed in the performance thereof, except where the workers are paid on piece-rate
basis in which case the employer shall grant the required 13th month pay to such
workers. (italics supplied)
As to overtime pay, the rules, however, are different. According to Sec. 2(e), Rule I, Book III of the
Implementing Rules, workers who are paid by results including those who are paid on piecework, takay, pakiao, or task basis, if their output rates are in accordance with the standards prescribed
under Sec. 8, Rule VII, Book III, of these regulations, or where such rates have been fixed by the Secretary
of Labor in accordance with the aforesaid section, are not entitled to receive overtime pay.Here, private
respondents did not allege adherence to the standards set forth in Sec. 8 nor with the rates prescribed by the
Secretary of Labor. As such, petitioners are beyond the ambit of exempted persons and are therefore

entitled to overtime pay. Once more, the National Labor Relations Commission would be in a better
position to determine the exact amounts owed petitioners, if any.
The court then DECLARES petitioners to have been illegally dismissed by private respondents, thus
entitled to full back wages and other privileges, and separation pay in lieu of reinstatement.

PHILIPPINE AIRLINES, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION,

LABOR ARBITER ROMULUS PROTACIO and DR. HERMINIO A. FABROS, respondents.
Dr. Herminio Fabros was employed as flight surgeon at petitioner company. He was assigned at the
PAL Medical Clinic at Nichols and was on duty from 4:00 in the afternoon until 12:00 midnight.
Fabros left his clinic to have his dinner. A few minutes later, the clinic received an emergency call
from the PAL Cargo Services that Mr. Manuel Acosta suffered a heart attack. The nurse on duty, Mr.
Merlino Eusebio, called Fabros at home to inform him of the emergency. The patient arrived at the clinic at
7:50 in the evening and Mr. Eusebio immediately rushed him to the hospital. When private respondent
reached the clinic at around 7:51 in the evening, Mr. Eusebio had already left with the patient. Mr. Acosta
died the following day.
Upon learning about the incident, PAL Medical Director ordered the Chief Flight Surgeon to conduct
an inverstigation which in turn, required private respondent to explain why no disciplinary sanction should
be taken against him.
In his explanation, private respondent asserted that he was entitled to a thirty-minute meal break; that
Mr. Eusebio panicked and brought the patient to the hospital without waiting for him. His explanation was
not accepted.
In his answer, private respondent reiterated the assertions in his previous explanation. He further
denied that he abandoned his post. He said that he only left the clinic to have his dinner at home.
After evaluating the charge as well as the answer of private respondent, petitioner company decided to
suspend private respondent for three months.
Private respondent filed a complaint for illegal suspension against petitioner.
Labor Arbiter Romulus A. Protasio rendered a decisiondeclaring 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 P500,000.00 moral damages. The dispositive
portion of the decision reads:
Petitioner appealed to the NLRC who 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. The NLRC likewise denied petitioners
motion for reconsideration.
The court finds that public respondents did not err in nullifying the three-month suspension of private
respondent. They, however, erred in awarding moral damages to private respondent.
First, as regards the legality of private respondents suspension. The facts do not support petitioners
allegation that private respondent abandoned his post on the evening of February 17, 1994. Private
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 could be easily
reached in case of emergency. Upon being informed of Mr. Acostas condition, private respondent
immediately left his home and returned to the clinic. These facts belie petitioners claim of abandonment.
Petitioner argues that being a full-time employee, private respondent is obliged to stay in the company
premises for not less than eight (8) hours. Hence, he may not leave the company premises during such time,
even to take his meals. We are not impressed.
Articles 83 and 85 of the Labor Code read:
Art. 83. Normal hours of work.The normal hours of work of any employee shall not exceed eight (8) hours
a day.

Art. 85. Meal periods.Subject to such regulations as the Secretary of Labor may prescribe, it shall be the
duty of every employer to give his employees not less than sixty (60) minutes time-off for their regular
meals.
Section 7, Rule I, Book III of the Omnibus Rules Implementing the Labor Code further states:
Sec. 7. Meal and Rest Periods.Every employer shall give his employees, regardless of sex, not less than
one (1) hour time-off for regular meals, except in the following cases when a meal period of not less than
twenty (20) minutes may be given by the employer provided that such shorter meal period is credited as
compensable hours worked of the employee;
(a) Where the work is non-manual work in nature or does not involve strenuous physical exertion;
(b) Where the establishment regularly operates not less than sixteen hours a day;
(c) In cases of actual or impending emergencies or there is urgent work to be performed on machineries,
equipment or installations to avoid serious loss which the employer would otherwise suffer; and
(d) Where the work is necessary to prevent serious loss of perishable goods.
Rest periods or coffee breaks running from five (5) to twenty (20) minutes shall be considered as
compensable working time.
Thus, the eight-hour work period does not include the meal break. Nowhere in the law may it be
inferred that employees must take their meals within the company premises. Employees are not prohibited
from going out of the premises as long as they return to their posts on time.Private respondents act,
therefore, of going home to take his dinner does not constitute abandonment.
TEOFILO ARICA, et. al petitioners vs. NATIONAL LABOR RELATIONS COMMISSION,
HONORABLE FRANKLIN DRILON, HONORABLE CONRADO B. MAGLAYA, HONORABLE
ROSARIO B. ENCARNACION, and STANDARD (PHILIPPINES) FRUIT
CORPORATION, respondents.
This case stemmed from a complaint filed on April 9, 1984 against private respondent Stanfilco for
assembly time, moral damages and attorney's fees, with the aforementioned Regional Arbitration Branch
No. XI, Davao City.
After the submission by the parties of their respective position papers (Annex "C", pp. 30-40; Annex "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:
Given these facts and circumstances, we cannot but agree with respondent that the
pronouncement in that earlier case, i.e. the thirty-minute assembly time long practiced
cannot be 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.
SO ORDERED. (Rollo, p. 58)
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.
SO ORDERED. (Annex "H", Rollo, pp. 86-89).
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:
1) Whether or not the 30-minute activity of the petitioners before the scheduled working
time is compensable under the Labor Code.
2) Whether or not res judicata applies when the facts obtaining in the prior case and in
the case 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 agreement novating it and the withdrawal of the appeal.
4) Whether or not estoppel and laches lie in decisions for the enforcement of labor
standards (Rollo, p. 10).
Petitioners contend that the preliminary activities as workers of respondents STANFILCO in the assembly
area is compensable as working time (from 5:30 to 6:00 o'clock in the morning) since these preliminary
activities are necessarily and primarily for private respondent's benefit.
These preliminary activities of the workers are as follows:
(a) First there is the roll call. This is followed by getting their individual work
assignments from the foreman.
(b) Thereafter, they are individually required to accomplish the Laborer's Daily
Accomplishment Report during which they are often made to explain about their reported
accomplishment the following day.
(c) Then they go to the stockroom to get the working materials, tools and equipment.
(d) Lastly, they travel to the field bringing with them their tools, equipment and materials.
All these activities take 30 minutes to accomplish (Rollo, Petition, p. 11).
Contrary to this contention, respondent avers that the instant complaint is not new, the very same claim
having been brought against herein respondent by the same group of rank and file employees in the case of
Associated Labor Union and Standard Fruit Corporation, NLRC Case No. 26-LS-XI-76 which was filed

way back April 27, 1976 when ALU was the bargaining agent of respondent's rank and file workers. The
said case involved a claim for "waiting time", as the complainants purportedly were required to assemble at
a designated area at least 30 minutes prior to the start of their scheduled working hours "to ascertain the
work force available for the day by means of a roll call, for the purpose of assignment or reassignment of
employees to such areas in the plantation where they are most needed." (Rollo, pp. 64- 65)
Noteworthy is the decision of the Minister of Labor, on May 12, 1978 in the aforecited case (Associated
Labor Union vs. Standard (Phil.) Fruit Corporation, NLRC Case No. 26-LS-XI-76 where significant
findings of facts and conclusions had already been made on the matter.
The Minister of Labor held:
The thirty (30)-minute assembly time long practiced and institutionalized by mutual
consent of the parties under Article IV, Section 3, of the Collective Bargaining Agreement
cannot be considered as waiting time within the purview of Section 5, Rule I, Book III of
the Rules and Regulations Implementing the Labor Code. ...
Furthermore, the thirty (30)-minute assembly is a deeply- rooted, routinary practice of the
employees, and the proceedings attendant thereto are not infected with complexities as to
deprive the workers the time to attend to other personal pursuits. They are not new
employees as to require the company to deliver long briefings regarding their respective
work assignments. Their houses are situated right on the area where the farm are located,
such that after the roll call, which does not necessarily require the personal presence, they
can go back to their houses to 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 to impose disciplinary measures. The CBA
does not contain any provision to this effect; the record is also bare of any proof on this
point. This, therefore, demonstrates the indubitable fact that the thirty (30)-minute
assembly time was not primarily intended for the interests of the employer, but ultimately
for the employees to indicate their availability or non-availability for work during every
working day. (Annex "E", Rollo, p. 57).
Accordingly, the issues are reduced to the sole question as to whether public respondent National Labor
Relations Commission committed a grave abuse of discretion in its resolution of December 17, 1986.
The facts on which this decision was predicated continue to be the facts of the case in this questioned
resolution of the National Labor Relations Commission.
It is clear that herein petitioners are merely reiterating the very same claim which they filed through the
ALU and which records show had already long been considered terminated and closed by this Court in
G.R. No. L-48510. Therefore, the NLRC can not be faulted for ruling that petitioners' claim is already
barred by res-judicata.
Be that as it may, petitioners' claim that there was a change in the factual scenario which are "substantial
changes in the facts" makes respondent firm now liable for the same claim they earlier filed against
respondent which was dismissed. It is thus axiomatic that the non-compensability of the claim having been
earlier established, constitute the controlling legal rule or decision between the parties and remains to be
the law of the case making this petition without merit.
As aptly observed by the Solicitor General that this petition is "clearly violative of the familiar principle
of res judicata. There will be no end to this controversy if the light of the Minister of Labor's decision dated
May 12, 1979 that had long acquired the character of finality and which already resolved that petitioners'
thirty (30)-minute assembly time is not compensable, the same issue can be re-litigated again." (Rollo, p.
183)
This Court has held:
In this connection account should be taken of the cognate principle that res
judicata operates to bar not only the relitigation in a subsequent action of the issues
squarely raised, passed upon and adjudicated in the first suit, but also the ventilation in

said subsequent suit of any other issue which could have been raised in the first but was
not. The law provides that 'the judgment or order is, with respect to the matter directly
adjudged or as to any other matter that could have been raised in relation thereto,
conclusive between the parties and their successors in interest by title 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, 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 not passed upon in the first. They could have been, but were not, there
raised. (Vda. de Buncio v. Estate of the late Anita de Leon, 156 SCRA 352 [1987]).
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 even finality if
such findings are supported by substantial evidence (Special Events & Central Shipping Office Workers
Union v. San Miguel Corporation, 122 SCRA 557 [1983]; Dangan v. NLRC, 127 SCRA 706 [1984]; Phil.
Labor Alliance Council v. Bureau of Labor Relations, 75 SCRA 162 [1977]; Mamerto v. Inciong, 118
SCRA 265 (1982]; National Federation of Labor Union (NAFLU) v. Ople, 143 SCRA 124 [1986]; EdiStaff Builders International, Inc. v. Leogardo, Jr., 152 SCRA 453 [1987]; Asiaworld Publishing House, Inc.
v. Ople, 152 SCRA 219 [1987]).
The records show that the Labor Arbiters' decision dated October 9, 1985 (Annex "E", Petition) pointed out
in detail the basis of his findings and conclusions, and no cogent reason can be found to disturb these
findings nor of those of the National Labor Relations Commission which affirmed the same.
PREMISES CONSIDERED, the petition is DISMISSED for lack of merit and the decision of the National
Labor Relations Commission is AFFIRMED.
SO ORDERED.
Melencio-Herrera (Chairperson), Padilla and Regalado, JJ., concur.

Separate Opinions

SARMIENTO, J., Dissenting:

It is my opinion that res judicata is not a bar.
The decision penned by then Minister Blas Ople in ALU v. STANFILCO (NLRC Case No. 26-LS-XI-76)
relied upon by the respondents as basis for claims of res judicata, is not, to my mind, a controlling
precedent. In that case, it was held that the thirty-minute "waiting time" complained of was a mere
"assembly time" and not a waiting time as the term is known in law, and hence, a compensable hour of
work. Thus:
The thirty (30)-minute assembly time long practiced and institutionalized by mutual
consent of the parties under Article IV, Section 3, of the Collective Bargaining Agreement
cannot be considered as 'waiting time' within the purview of Section 5, Rule 1, Book III
of the Rules and Regulations Implementing the Labor Code. ...
Furthermore, the thirty (30)-minute assembly is a deeply- rooted, routinary practice of the
employees, and the proceedings attendant thereto are not infected with complexities as to
deprive the workers the time to attend to other personal pursuits. They are not new
employees as to require the company to deliver long briefings regarding their respective
work assignments. Their houses are situated right on the area where the farms are located,

such that after the roll call, which does not necessarily require the personal presence, they
can go back to their houses to 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 to
impose disciplinary measures. The CBA does not contain any provision to this effect; the
record is also bare of any proof on this point. This, therefore, demonstrates the
indubitable fact that the thirty (30)-minute assembly time was not primarily intended for
the interests of the employer, but ultimately for the employees to indicate their
availability or non-availability for work during every working day. (Decision, 6.)
Precisely, it is the petitioners' contention that the assembly time in question had since undergone dramatic
changes, thus:
(a) First there is the roll call. This is followed by getting their individual work
assignments from the foreman.
(b) Thereafter,they are individually required to accomplish the Laborer's Daily
Accomplishment Report during which they are often made to explain about their reported
accomplishment the following day.
(c) Then they go to the stockroom to get the working materials, tools and equipment.
(d) Lastly, they travel to the field bringing with them their tools, equipment and materials.
(Supra, 4-5.)
The petitioners have vehemently maintained that in view thereof, the instant case should be distinguished
from the first case. And I do not believe that the respondents have successfully rebutted these allegations.
The Solicitor General relies solely on the decision of then Minister Ople, the decision the petitioners
precisely reject in view of the changes in the conditions of the parties. The private respondent on the other
hand insists that these practices were the same practices taken into account in ALU v. STANFILCO. If this
were so, the Ople decision was silent thereon.
It is evident that the Ople decision was predicated on the absence of any insinuation of obligatoriness in the
course or after the assembly activities on the part of the employees.(" . . [T]hey are not subject to the
absolute control of the company during this period, otherwise, their failure to report in the assembly time
would justify the company to impose disciplinary measures;" supra, 6.) As indicated, however, by the
petitioners, things had since changed, and remarkably so, and the latter had since been placed under a
number of restrictions. My considered opinion is that the thirty-minute assembly time had become, in truth
and fact, a "waiting time" as contemplated by the Labor Code.
I vote, then, to grant the petition.

Separate Opinions
SARMIENTO, J., Dissenting:
It is my opinion that res judicata is not a bar.
The decision penned by then Minister Blas Ople in ALU v. STANFILCO (NLRC Case No. 26-LS-XI-76)
relied upon by the respondents as basis for claims of res judicata, is not, to my mind, a controlling
precedent. In that case, it was held that the thirty-minute "waiting time" complained of was a mere
"assembly time" and not a waiting time as the term is known in law, and hence, a compensable hour of
work. Thus:

The thirty (30)-minute assembly time long practiced and institutionalized by mutual
consent of the parties under Article IV, Section 3, of the Collective Bargaining Agreement
cannot be considered as 'waiting time' within the purview of Section 5, Rule 1, Book III
of the Rules and Regulations Implementing the Labor Code. ...
Furthermore, the thirty (30)-minute assembly is a deeply- rooted, routinary practice of the
employees, and the proceedings attendant thereto are not infected with complexities as to
deprive the workers the time to attend to other personal pursuits. They are not new
employees as to require the company to deliver long briefings regarding their respective
work assignments. Their houses are situated right on the area where the farms are located,
such that after the roll call, which does not necessarily require the personal presence, they
can go back to their houses to 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 to
impose disciplinary measures. The CBA does not contain any provision to this effect; the
record is also bare of any proof on this point. This, therefore, demonstrates the
indubitable fact that the thirty (30)-minute assembly time was not primarily intended for
the interests of the employer, but ultimately for the employees to indicate their
availability or non-availability for work during every working day. (Decision, 6.)
Precisely, it is the petitioners' contention that the assembly time in question had since undergone dramatic
changes, thus:
(a) First there is the roll call. This is followed by getting their individual work
assignments from the foreman.
(b) Thereafter,they are individually required to accomplish the Laborer's Daily
Accomplishment Report during which they are often made to explain about their reported
accomplishment the following day.
(c) Then they go to the stockroom to get the working materials, tools and equipment.
(d) Lastly, they travel to the field bringing with them their tools, equipment and materials.
(Supra, 4-5.)
The petitioners have vehemently maintained that in view thereof, the instant case should be distinguished
from the first case. And I do not believe that the respondents have successfully rebutted these allegations.
The Solicitor General relies solely on the decision of then Minister Ople, the decision the petitioners
precisely reject in view of the changes in the conditions of the parties. The private respondent on the other
hand insists that these practices were the same practices taken into account in ALU v. STANFILCO. If this
were so, the Ople decision was silent thereon.
It is evident that the Ople decision was predicated on the absence of any insinuation of obligatoriness in the
course or after the assembly activities on the part of the employees.(" . . [T]hey are not subject to the
absolute control of the company during this period, otherwise, their failure to report in the assembly time
would justify the company to impose disciplinary measures;" supra, 6.) As indicated, however, by the
petitioners, things had since changed, and remarkably so, and the latter had since been placed under a
number of restrictions. My considered opinion is that the thirty-minute assembly time had become, in truth
and fact, a "waiting time" as contemplated by the Labor Code.
I vote, then, to grant the petition.

UNIVERSITY OF PANGASINAN FACULTY UNION, Petitioner, v. UNIVERSITY OF

PANGASINAN And NATIONAL LABOR RELATIONS COMMISSION, Respondents.
Tanopo, Serafico, Juanitez & Callanta Law Office and Hermogenes S. Decano for Petitioner.

The Solicitor General for Respondents.

DECISION
GUTIERREZ, JR., J.:
This is a petition for review on certiorari pursuant to Rule 65 of the Rules of Court to annul and to set aside
the decision of respondent National Labor Relations Commission (NLRC) dated October 25, 1982,
dismissing the appeal of petitioner in NLRC Case No. RBI-47-82, entitled "University of Pangasinan
Faculty Union, complainant, versus University of Pangasinan, Respondent." chanrobles law library : red
Petitioner is a labor union composed of faculty members of the respondent University of Pangasinan, an
educational institution duly organized and existing by virtue of the laws of the Philippines.
On December 18, 1981, the petitioner, through its President, Miss Consuelo Abad, filed a complaint against
the private respondent with the Arbitration Branch of the NLRC, Dagupan District Office, Dagupan City.
The complaint seeks: (a) the payment of Emergency Cost of Living Allowances (ECOLA) for November 7
to December 5, 1981, a semestral break; (b) salary increases from the sixty (60%) percent of the
incremental proceeds of increased tuition fees; and (c) payment of salaries for suspended extra loads.
The petitioners members are full-time professors, instructors, and teachers of respondent University. The
teachers in the college level teach for a normal duration of ten (10) months a school year, divided into two
(2) semesters of five (5) months each, excluding the two (2) months summer vacation. These teachers are
paid their salaries on a regular monthly basis.
In November and December, 1981, the petitioners members were fully paid their regular monthly salaries.
However, from November 7 to December 5, during the semestral break, they were not paid their ECOLA.
The private respondent claims that the teachers are not entitled thereto because the semestral break is not an
integral part of the school year and there being no actual services rendered by the teachers during said
period, the principle of "No work, no pay" applies.
During the same school year (1981-1982), the private respondent was authorized by the Ministry of
Education and Culture to collect, as it did collect, from its students a fifteen (15%) percent increase of
tuition fees. Petitioners 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 filed in the case at
bar. While the complaint was pending in the arbitration branch, the private respondent granted an acrossthe-board salary increase of 5.86%. Nonetheless, the petitioner is still pursuing full distribution of the 60%
of the incremental proceeds as mandated by the Presidential Decree No. 451.
Aside from their regular loads, some of petitioners members were given extra loads to handle during the
same 1981-1982 schoolyear. Some of them had extra loads to teach on September 21, 1981, but they were
unable to teach as classes in all levels throughout the country were suspended, although said days was
proclaimed by the President of the Philippines as a working holiday. Those with extra loads to teach on said
day claimed they were not paid their salaries for those loads, but the private respondent claims otherwise.
The issue to be resolved in the case at bar are the following:chanrob1es virtual 1aw library
I
"WHETHER OR NOT PETITIONERS MEMBERS ARE ENTITLED TO ECOLA DURING THE
SEMESTRAL BREAK FROM NOVEMBER 7 TO DECEMBER 5, 1981 OF THE 1981-82 SCHOOL
YEAR.
II

"WHETHER OR NOT 60% OF THE INCREMENTAL PROCEEDS OF INCREASED TUITION FEES

SHALL BE DEVOTED EXCLUSIVELY TO SALARY INCREASE,
III
"WHETHER OR NOT ALLEGED PAYMENT OF SALARIES FOR EXTRA LOADS ON SEPTEMBER
21, 1981 WAS PROVEN BY SUBSTANTIAL EVIDENCE."cralaw virtua1aw library
Anent the first issue, the various Presidential Decrees on ECOLAs to wit: PDs 1614, 1634, 1678 and 1713,
provide on "Allowances of Fulltime Employees . . ." that "Employees shall be paid in full the required
monthly allowance regardless of the number of their regular working days if they incur no absences during
the month. If they incur absences without pay, the amounts corresponding to the absences may be deducted
from the monthly allowance . . ." ; and on "Leave of Absence Without Pay", that "All covered employees
shall be entitled to the allowance provided herein when they are on leave of absence with pay."cralaw
virtua1aw library
It is beyond dispute that the petitioners members are full-time employees receiving their monthly salaries
irrespective of the number of working days or teaching hours in a month. However, they find themselves in
a most peculiar situation whereby they are forced to go on leave during semestral breaks. These semestral
breaks are in the nature of work interruptions beyond the employees control. The duration of the semestral
break varies from year to year dependent on a variety of circumstances affecting at times only the private
respondent but at other times all educational institutions in the country. As such, these breaks cannot be
considered as absences within the meaning of the law for which deductions may be made from monthly
allowances. The "No work, no pay" principle does not apply in the instant case. The petitioners members
received their regular salaries during this period. It is clear from the aforequoted provision of law that it
contemplates a "no work" situation where the employees voluntarily absent themselves. Petitioners, in the
case at bar, certainly do not, ad voluntatem, absent themselves during semestral breaks. Rather, they are
constrained to take mandatory leave from work. For this they cannot be faulted nor can they be begrudged
that which is due them under the law. To a certain extent, the private respondent can specify dates when no
classes would be held. Surely, it was not the intention of the framers of the law to allow employers to
withhold employee benefits by the simple expedient of unilaterally imposing "no work" days and
consequently avoiding compliance with the mandate of the law for those days.chanrobles.com.ph : virtual
law library
Respondents contention that "the fact of receiving a salary alone should not be the basis of receiving
ECOLA", is, likewise, without merit. Particular attention is brought to the Implementing Rules and
Regulations of Wage Order No. 1 to wit.
SECTION 5. Allowance for Unworked Days.
"a) All covered employees whether paid on a monthly or daily basis shall be entitled to their daily living
allowance when they are paid their basic wage."cralaw virtua1aw library
x

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" the
converse of which finds application in the case at bar. Petitioners cannot be considered to be on leave
without pay so as not to be entitled to ECOLA, for, as earlier stated, the petitioners were paid their wages in
full for the months of November and December of 1981, notwithstanding the intervening semestral break.
This, in itself, is a tacit recognition of the rather unusual state of affairs in which teachers find themselves.
Although said to be on forced leave, professors and teachers are, nevertheless, burdened with the task of
working during a period of time supposedly available for rest and private matters. There are papers to
correct, students to evaluate, deadlines to meet, and periods within which to submit grading reports.
Although they may be considered by the respondent to be on leave, the semestral break could not be used
effectively for the teachers own purposes for the nature of a teachers job imposes upon him further duties
which must be done during the said period of time. Learning is a never ending process. Teachers and
professors must keep abreast of developments all the time. Teachers cannot also wait for the opening of the
next semester to begin their work. Arduous preparation is necessary for the delicate task of educating our
children. Teaching involves not only an application of skill and an imparting of knowledge, but a

responsibility which entails self dedication and sacrifice. The task of teaching ends not with the perceptible
efforts of the petitioners members but goes beyond the classroom: a continuum where only the visible
labor is relieved by academic intermissions. It would be most unfair for the private respondent to consider
these teachers as employees on leave without pay to suit its purposes and, yet, in the meantime, continue
availing of their services as they prepare for the next semester or complete all of the last semesters
requirements. Furthermore, we may also by analogy apply the principle enunciated in the Omnibus Rules
Implementing the Labor Code to wit:chanrob1es virtual 1aw library
Sec. 4. Principles in Determining Hours Worked. The following general principles shall govern in
determining whether the time spent by an employee is considered hours worked for purposes of this
Rule:chanrob1es virtual 1aw library
x

"(d) The time during which an employee is inactive by reason of interruptions in his work beyond his
control shall be considered time either if the imminence of the resumption of work requires the employees
presence at the place of work or if the interval is too brief to be utilized effectively and gainfully in the
employees own interest." (Emphasis supplied).
The petitioners members in the case at bar, are exactly in such a situation. The semestral break scheduled
is an interruption beyond petitioners control and it cannot be used "effectively nor gainfully in the
employees interest. Thus, the semestral break may also be considered as "hours worked." For this, the
teachers are paid regular salaries and, for this, they should be entitled to ECOLA. Not only do the teachers
continue to work during this short recess but much less do they cease to live for which the cost of living
allowance is intended. The legal principles of "No work, no pay; No pay, no ECOLA" must necessarily
give way to the purpose of the law to augment the income of employees to enable them to cope with the
harsh living conditions brought about by inflation; and to protect employees and their wages against the
ravages brought by these conditions. Significantly, it is the commitment of the State to protect labor and to
provide means by which the difficulties faced by the working force may best be alleviated. To submit to the
respondents interpretation of the no work, no pay policy is to defeat this noble purpose. The Constitution
and the law mandate otherwise.chanrobles.com:cralaw:red
With regard to the second issue, we are called upon to interpret and apply Section 3 of Presidential Decree
451 to wit:chanrob1es virtual 1aw library
SEC. 3. Limitations. The increase in tuition or other school fees or other charges as well as the new fees
or charges authorized under the next preceding section shall be subject to the following
conditions:jgc:chanrobles.com.ph
"(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 of the faculty and all
other employees of the school concerned, and the balance for institutional development, student assistance
and extension services, and return to investments: Provided, That in no case shall the return to investments
exceed twelve (12%) per centum of the incremental proceeds; . . ."cralaw virtua1aw library
x

This Court had the occasion to rule squarely on this point in the very recent case entitled, University of the
East v. University of the East Faculty Association, 117 SCRA 554. We held that:jgc:chanrobles.com.ph
"In effect, the problem posed before Us is whether or not the reference in Section 3(a) to increase in
salaries or wages of the faculty and all other employees of the schools concerned as the first purpose to
which the incremental proceeds from authorized increases to tuition fees may be devoted, may be construed
to include allowances and benefits. In the negative, which is the position of respondents, it would follow
that such allowances must be taken in resources of the school not derived from tuition fees.
"Without delving into the factual issue of whether or not there could be any such other resources, We note
that among the items of second purpose stated in provision in question is return in investment. And the law
provides only for a maximum, not a minimum. In other words, the schools may get a return to investment
of not more than 12%, but if circumstances warrant, there is no minimum fixed by law which they should

get.
"On this predicate, We are of the considered view that, if the school happen to have no other resources to
grant allowances and benefits, either mandated by law or secured by collective bargaining, such allowances
and benefits should be charged against the return to investments referred to in the second purpose stated in
Section 3(a) of P.D. 451."cralaw virtua1aw library
Private respondent argues that the above interpretation "disregarded the intention and spirit of the law"
which intention is clear from the "whereas" clauses as follows:jgc:chanrobles.com.ph
"It is imperative that private educational institutions upgrade classroom instruction . . . provide salary and
or wage increases and other benefits . . ."cralaw virtua1aw library
Respondent further contends that PD 451 was issued to alleviate the sad plight of private schools, their
personnel and all those directly or indirectly on school income as the decree was aimed
". . . to upgrade classroom instruction by improving their facilities and bring competent teachers in all
levels of education, provide salary and or wage increases and other benefits to their teaching,
administrative, and other personnel to keep up with the increasing cost of living." (Emphasis supplied)
Respondent overlooks the elemental principle of statutory construction that the general statements in the
whereas clauses cannot prevail over the specific or particular statements in the law itself which define or
limit the purposes of the 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 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 basic salary. The
law cannot be construed to include allowances which are benefits over and above the basic salaries of the
employees. To charge such benefits to the 60% incremental proceeds would be to reduce the increase in
basic salary provided by law, an increase intended also to help the teachers and other workers tide
themselves and their families over these difficult economic times.chanrobles virtual lawlibrary
This Court is not guilty of usurpation of legislative functions as claimed by the respondents. We expressed
the opinion in the University of the East case that benefits mandated by law and collective bargaining may
be charged to the 12% return on investments within the 40% incremental proceeds of tuition increase. As
admitted by respondent, we merely made this statement as a suggestion in answer to the respondents 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 provides that 60% should go to wage increases and
40% to institutional developments, student assistance, extension services, and return on investments (ROI).
Under the law, the last item ROI has flexibility sufficient to accommodate other purposes of the law and the
needs of the university. ROI is not set aside for any one purpose of the university such as profits or returns
on investments. The amount may be used to comply with other duties and obligations imposed by law
which the university exercising managerial prerogatives finds cannot under present circumstances, be
funded by other revenue sources. It may be applied to any other collateral purpose of the university or
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 universitys miscellaneous expenses and, precisely, for this reason, it was
not so delimited. Besides, ROI is a return or profit over and above the operating expenditures of the
university, and still, over and above the profits it may have had prior to the tuition increase. The earning
capacities of private educational institutions are not dependent on the increases in tuition fees allowed by
P.D. 451. Accommodation of the allowances required by law 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 could not afford the same, considering that additional funds are even
granted them by the law in question. We find no compelling reason, therefore, to deviate from our previous
ruling in the University of the East case even as we take the second hard look at the decision requested by
the 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 in the light
of these subsequent legislations which bear upon but do not modify nor amend, the same. We need not go
beyond the ruling in the University of the East case.
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 members have been

paid for the extra loads. We agree with the respondents that this issue involves a question of fact properly
within the competence of the respondent NLRC to pass upon. The findings of fact of the respondent
Commission are binding on this Court there being no indication of their being unsubstantiated by evidence.
We find no grave abuse in the findings of respondent NLRC on this matter to warrant reversal. Assuming
arguendo, however, that the petitioners have not been 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 under the first issue. We are now concerned with extra, not
regular loads for which the petitioners are paid regular salaries every month regardless of the number of
working days or hours in such a month. Extra loads should be paid for only when actually performed by the
employee. Compensation is based, therefore, on actual work done and on the number of hours and days
spent over and beyond their regular hours of duty. Since there was no work on September 21, 1981, it
would now be unfair to grant petitioners demand for extra wages on that day.chanrobles law library : red
Finally, disposing of the respondents charge of petitioners lack of legal capacity to sue, suffice it 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 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 grants it the rights of a legitimate labor
organization and recognition by the respondent University is not necessary for it to institute this action in
behalf of its members to protect their interests and obtain relief from grievances. The issues raised by the
petitioner do not involve pure money claims but are more intricately intertwined with conditions of
employment.
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 from
November 7 to December 5, 1981 and the undistributed balance of the sixty (60%) percent incremental
proceeds from tuition increases for the same schoolyear as outlined above. The respondent Commission is
sustained insofar as it DENIED the payment of salaries for the suspended extra loads on September 21,
1981.
SO ORDERED.

HILARIO RADA, petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION (Second Division) and PHILNOR
CONSULTANTS AND PLANNERS, INC., respondents.
Cabellero, Calub, Aumentado & Associates Law Offices for petitioner.

REGALADO, J.:
In this special civil action for certiorari, petitioner Rada seeks to annul the decision of respondent National
Labor Relations Commission (NLRC), dated November 19, 1990, reversing the decision of the labor arbiter
which ordered the reinstatement of petitioner with backwages and awarded him overtime pay. 1
The facts, as stated in the Comment of private respondent Philnor Consultants and Planners, Inc. (Philnor),
are as follows:
Petitioner's initial employment with this Respondent was under a "Contract of
Employment for a Definite Period" dated July 7, 1977, copy of which is hereto attached
and made an integral part hereof as Annex A whereby Petitioner was hired as "Driver" for
the construction supervision phase of the Manila North Expressway Extension, Second
Stage (hereinafter referred to as MNEE Stage 2) for a term of "about 24 months effective
July 1, 1977.
xxx xxx xxx

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

follows:
It is hereby understood that the Employer does not have a continuing
need for the services of the Employee beyond the termination date of
this contract and that the Employee's services 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 is coterminus with the same and not
with the whole project or other phases thereof wherein other employees
of similar position as he/she have been hired. (Par. 7, emphasis
supplied)
Petitioner's first contract of employment expired on June 30, 1979. Meanwhile, the main
project, MNEE Stage 2, was not finished on account of various constraints, not the least
of which was inadequate funding, and the same was extended and remained in progress
beyond the original period of 2.3 years. Fortunately for the Petitioner, at the time the first
contract of employment 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 satisfactory, the position of Driver was offered to
Petitioner, which he accepted. Hence a second Contract of Employment for a Definite
Period of 10 months, that is, from July 1, 1979 to April 30, 1980 was executed between
Petitioner and Respondent on July 7, 1979. . . .
In March 1980 some of the areas or phases of the project were completed, but the bulk of
the project was yet to be finished. By that time some of those project employees whose
contracts of employment expired or were about to expire because of the completion of
portions of the project 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, respondent renewed his contract of employment in
April 1980, after Petitioner agreed to the offer. Accordingly, a third contract of
employment for a definite period was executed by and between the Petitioner and the
Respondent whereby the Petitioner was again employed as Driver for 19 months, from
May 1, 1980 to November 30, 1981, . . .
This third contract of employment was subsequently extended for a number of times, the
last extension being for a period of 3 months, that is, from October 1, 1985 to December
31, 1985, . . .
The last extension, from October 1, 1985 to December 31, 1985 (Annex E) covered by an
"Amendment to the Contract of Employment with a Definite Period," was not extended
any further because Petitioner had no more work to do in the project. This last extension
was confirmed by a notice on November 28, 1985 duly acknowledged by the Petitioner
the very next day, . . .
Sometime in the 2nd week of December 1985, Petitioner applied for "Personnel
Clearance" with Respondent dated December 9, 1985 and acknowledged having received
the amount of P3,796.20 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" . . .2
Culled from the records, it appears that on May 20, 1987, petitioner filed before the NLRC, National
Capital Region, Department of Labor and Employment, a Complaint for non-payment of separation 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 he was hired under
three distinct contracts of employment, each of which was for a definite period, 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 assigned to any other project of
Philnor; that he did not render overtime services and that there was no demand or claim for him for such
overtime pay; that he signed a "Release, Waiver and Quitclaim" releasing Philnor from all obligations and
claims; and that Philnor's business is to provide engineering consultancy services, including supervision of

construction services, such that it hires employees according to the requirements of the project manning
schedule of a particular contract. 3
On July 2, 1987, petitioner filed an Amended Complaint alleging that he was illegally dismissed and that he
was not paid overtime pay although he was made to render three hours overtime work form Monday to
Saturday for a period of three years.
On July 7, 1987, petitioner filed his Position Paper claiming that he was illegally dismissed since he was a
regular employee entitled to security of tenure; that he was not a project employee since 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 public policy and a clear
circumvention of the law designed merely to evade any benefits or liabilities under the statute; that his
position as driver was essential, necessary and desirable to the conduct of the business of Philnor; that he
rendered overtime work until 6:00 p.m. daily except Sundays and holidays and, therefore, he was entitled to
overtime pay. 4
In his Reply to Respondent's Position Paper, petitioner claimed that he was a regular employee pursuant to
Article 278(c) of the Labor Code and, thus, he cannot be terminated except for a just cause under Article
280 of the Code; and that the public respondent's ruling in Quiwa vs. Philnor 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 the business of Philnor even after the
completion of his contract of employment. 6Petitioner likewise avers that the contract of employment for a
definite period entered into between him and Philnor was a ploy to defeat the intent of Article 280 of the
Labor Code.
On July 28, 1987, Philnor filed its Respondent's Supplemental Position Paper, alleging therein that
petitioner was not a company driver since his job was to drive the employees hired to work at the MNEE
Stage 2 Project to and from the filed office at Sto. Domingo Interchange, Pampanga; that the office hours
observed in the project were from 7:00 a.m. to 4:00 p.m. Mondays through Saturdays; 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 considering the distance between
the project site and the employees' residence, to avoid project 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 along Epifanio de los Santos Avenue (EDSA), on his way
home to Marikina, Metro Manila; that when he was absent or on leave, another employee living in Metro
Manila used the same vehicle in transporting the same employees; that the time used by petitioner to and
from his residence to the 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 daily, was not overtime work as he was merely enjoying the benefit and convenience of free
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 a project
employee and he was not entitled to termination pay under Policy Instructions No. 20 since his employment
was coterminous with the completion of the project.
On August 25, 1987, Philnor filed its Respondent's Reply/Comments to Complainant's Rejoinder and
Reply, submitting therewith two letters dated January 5, 1985 and February 6, 1985, signed by MNEE
Stage 2 Project employees, including herein petitioner, where they asked what termination benefits could
be given to them as the MNEE Stage 2 Project was nearing completion, and Philnor's letter-reply dated
February 22, 1985 informing them that they are not entitled to termination benefits as they are
contractual/project employees.
On August 31, 1989, Labor Arbiter Dominador M. Cruz rendered a decision 7 with the following
dispositive portion:
WHEREFORE, in view of all the foregoing considerations, judgment is hereby rendered:
(1) Ordering the respondent company to reinstate the complainant to his former position
without loss of seniority rights and other privileges with full backwages from the time of
his dismissal to his actual reinstatement;

(2) Directing the respondent company to pay the complainant overtime pay for the three
excess hours of work performed during working days from January 1983 to December
1985; and
(3) Dismissing all other claims for lack of merit.
SO ORDERED.
Acting on Philnor's appeal, the NLRC rendered its assailed decision dated November 19, 1990, setting
aside the labor arbiter's aforequoted decision and dismissing petitioner's complaint.
Hence this petition wherein petitioner charges respondent NLRC with grave abuse of discretion amounting
to lack of jurisdiction for the following reasons:
1. The decision of the labor arbiter, dated August 31, 1989, has already become final and executory;
2. The case of Quiwa vs. Philnor Consultants and Planners, Inc. is not binding nor is it applicable to this
case;
3. The petitioner is a regular employee with eight years and five months of continuous services for his
employer, private respondent Philnor;
4. The claims for overtime services, reinstatement and full backwages are valid and meritorious and should
have been sustained; and
5. The decision of the labor arbiter should be reinstated as it is more in accord with the facts, the law and
evidence.
The petition is devoid of merit.
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 the labor
arbiter's decision, by reason of which the appeal should be deemed to have been filed out of time. It will be
noted, however, that Philnor was able to file a bond although it was made beyond the 10-day reglementary
period.
While it is true that the payment of the supersedeas bond is an essential requirement in the perfection of an
appeal, however, where the fee had been paid although payment was delayed, the broader interests of
justice and the desired objective of resolving controversies on the merits demands that the appeal be given
due course. Besides, it was within the inherent power of the NLRC to have allowed late payment of the
bond, considering that the aforesaid decision of the labor arbiter was received by private respondent on
October 3, 1989 and its appeal was duly filed on October 13, 1989. However, said decision did not state the
amount awarded as backwages and overtime pay, hence the amount of the supersedeas bond could not be
determined. It was only in the order of the NLRC of February 16, 1990 that the amount of the supersedeas
bond was specified and which bond, after an extension granted by the NLRC, was timely filed by private
respondent.
Moreover, as provided by Article 221 of the Labor Code, "in any proceeding before the Commission or any
of the Labor Arbiters, the rules of evidence prevailing in Courts of law or equity shall not be controlling
and it is the spirit and intention of this Code that the Commission and its members and the Labor Arbiters
shall use every and all reasonable means to ascertain the facts in each case speedily and objectively without
regard to technicalities of law or procedure, all in the interest of due process. 8 Finally, the issue of
timeliness of the appeal being an entirely new and unpleaded matter in the proceedings below it may not
now be raised for the first time before this Court. 9
2. Petitioner postulates that as a regular employee, he is entitled to security of tenure, hence he cannot be
terminated without cause. Private respondent Philnor believes otherwise and asserts that petitioner is
merely a project employee who was terminated upon the completion of the project for which he was
employed.

In holding that petitioner is a regular employee, the labor arbiter found that:
. . . There is no question that the complainant was employed as driver in the respondent
company continuously from July 1, 1977 to December 31, 1985 under various contracts
of employment. 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. The record shows that while the different
labor contracts executed by the parties stipulated definite 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 circumstances, the
complaint has obtained the status of regular employee, it appearing that he has worked
without fail for almost eight years, a fraction of six months considered as one whole year,
and that his assigned task as driver was necessary and desirable in the usual
trade/business of the respondent employer. Assuming to be true, as spelled out in the
employment contract, that the Employer has no "continuing need for the services of the
Employe(e) beyond the termination date of this contract and that the Employee's services
shall automatically, and without notice, terminate upon completion of the above specified
phase of the project," still we cannot see our way clear why the complainant was hired
and his services engaged contract after contract straight from 1977 to 1985 which, to our
considered view, lends credence to the contention that he worked as regular driver
ferrying early in the morning office personnel to the company main office in Pampanga
and bringing back late in the afternoon to Manila, and driving company executives for
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 written agreement to the
contrary notwithstanding and regardless of the oral understanding of the parties . . . 10
On the other hand, respondent NLRC declared that, as between the uncorroborated and unsupported
assertions of petitioners and those of private respondent which are supported by documents, greater
credence should be given the latter. It further held that:
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 renewed. At the completion of the specific project or undertaking
his employment contract was not renewed.
We reiterate our ruling in the case of (Quiwa) vs. Philnor Consultants and Planners,
Inc., NLRC RAB III 5-1738-84, it is being applicable in this case, viz.:
. . . While it is true that the activities performed by him were necessary
or desirable in the usual business or trade of the respondent as
consultants, planners, contractor and while it is also true that the
duration of his employment was for a period of about seven years,
these circumstances 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 applicable to
the case at bar. Thus:
We hold that private respondents were project employees whose work was coterminous
with the project or which they were hired. Project employees, as distinguished from
regular or non-project employees, are mentioned in section 281 of the Labor Code as
those "where the employment has been fixed for a specific project or undertaking the
completion or termination of which has been determined at the time of the engagement of
the employee."
Policy Instructions No. 20 of the Secretary of Labor, which was issued to stabilize
employer-employee relations in the construction industry, provides:

Project employees are those employed in connection with a particular

construction project. Non-project (regular) employees are those
employed by a construction company without reference to any
particular project.
Project employees are not entitled to termination pay if they are
terminated as a result of the completion of the project or any phase
thereof in which they are employed, regardless of the number of
projects in which they have been employed by a particular construction
company. Moreover, the company is not required to obtain clearance
from the Secretary of Labor in connection with such termination.
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 held that the layoff of its project employees was lawful. Deputy
Minister Inciong in TFU Case No. 1530, In Re Sandoval Shipyards, Inc. Application for
Clearance to Terminate Employees, rendered the following ruling on February 26, 1979;
We feel that there is merit in the contention of the applicant
corporation. To our mind, the employment of the employees concerned
were fixed for a specific project or undertaking. For the nature of the
business the corporation is engaged into is one which will not allow it
to employ workers for an indefinite period.
It is significant to note that the corporation does not construct vessels
for sale or otherwise which will demand continuous productions of
ships and will need permanent or regular workers. It merely accepts
contracts for shipbuilding or for repair of vessels form third parties and,
only, on occasion when it has work contract of this nature that it hires
workers to do the job which, needless to say, lasts only for less than a
year or longer.
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 employment. (139140, Rollo of G.R. No. 65689) (Emphasis supplied)
In Cartagenas, et al. vs. Romago Electric Company, Inc., et al., 13 we likewise held that:
As an electrical contractor, the private respondent depends for its business on the
contracts it is able to obtain from real estate developers and builders of buildings. Since
its work depends on the availability of such contracts or "projects," necessarily the
duration of the employment's of this work force is not permanent but co-terminus with
the projects to which they are assigned and from whose payrolls they are paid. It would
be extremely burdensome for their employer who, like them, depends on the availability
of projects, if it would have to carry them as permanent employees and pay them wages
even if there are no projects for them to work on. (Emphasis supplied.)
It must be stressed herein that although petitioner worked with Philnor as a driver for eight years, the fact
that his services were rendered only for a particular project which took that same period of time to
complete categorizes him as a project employee. Petitioner was employed for one specific project.
A non-project employee is different in that the employee is hired for more than one project. A non-project
employee, vis-a-vis a project employee, is best exemplified in the case of Fegurin, et al. vs. National Labor
Relations Commission, et al. 14 wherein four of the petitioners had been working with the company for nine
years, one for eight years, another for six years, the shortest term being three years. In holding that
petitioners are regular employees, this Court therein explained:
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 individually assigned is completed, they would be assigned to the next project or
a phase thereof. In other words, they belonged to a "work pool" from which the company
would draw workers for assignment to other projects at its discretion. They are, therefore,
actually "non-project employees."
From the foregoing, it is clear that petitioner is a project employee considering that he does not belong to a
"work pool" from which the company would draw workers for assignment to other projects at its discretion.
It is likewise apparent from the facts obtaining herein that petitioner was utilized only for one particular
project, the MNEE Stage 2 Project of respondent company. Hence, the termination of herein petitioner is
valid by reason of the completion of the project and the expiration of his employment contract.
3. Anent the claim for overtime compensation, we hold that petitioner is entitled to the same. The fact that
he picks up employees of Philnor at certain specified points along EDSA in going to the project site and
drops them off at the same points on his way back from the field office going home to Marikina, Metro
Manila is not merely incidental to petitioner's job as a driver. On the contrary, said transportation
arrangement had been adopted, not so much for the convenience of the employees, but primarily for the
benefit of the employer, herein private respondent. This fact is inevitably deducible from the Memorandum
of respondent company:
The herein Respondent resorted to the above transport arrangement because from its
previous 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 aggravated by transportation problems, which varied in degrees in
proportion to the distance between the project site and the employees' residence. In view
of this lesson from experience, and as a practical, if expensive, solution to employees'
tardiness and its concomitant problems, Respondent adopted the policy of allowing
certain employees not necessarily project drivers to bring home project vehicles, so
that employees could be afforded fast, convenient and free transportation to and from the
project field office. . . . 15
Private respondent does not hesitate to admit that it is usually the project driver who is tasked with 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 pick up and/or drop off the
other employees at the designated points on EDSA. If driving these employees to and from the project site
is not really part of petitioner's job, then there would have been no need to find a replacement driver to
fetch these employees. But since the assigned task of fetching and delivering employees is indispensable
and consequently mandatory, then the time required of and used by petitioner in going from his residence to
the field office and back, that is, 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 rounded off as averaging three hours each working day, should be paid as overtime work.
Quintessentially, petitioner should be given overtime pay for the three excess hours of work performed
during working days from January, 1983 to December, 1985.
WHEREFORE, subject to the modification regarding the award of overtime pay to herein petitioner, the
decision appealed from is AFFIRMED in all other respects.
SO ORDERED.
ABDULJUAHID R. PIGCAULAN,

G.R. No. 173648

Petitioner,
Present:
- versus -

CORONA, C.J., Chairperson,

LEONARDO-DE CASTRO,
DEL CASTILLO,
ABAD, and

SECURITY and CREDIT

VILLARAMA, JR., JJ.

INVESTIGATION, INC. and/or

RENE AMBY REYES ,
Respondents.

Promulgated:
January 16, 2012

x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
It is not for an employee to prove non-payment of benefits to which he is entitled by law. Rather, it is on the employer
that the burden of proving payment of these claims rests.
This Petition for Review on Certiorari[1] assails the February 24, 2006 Decision[2] of the Court of Appeals
(CA) in CA-G.R. SP No. 85515, which granted the petition for certiorari filed therewith, set aside the March 23,
2004[3] and June 14, 2004[4] Resolutions of the National Labor Relations Commission (NLRC), and dismissed the
complaint filed by Oliver R. Canoy (Canoy) and petitioner Abduljuahid R. Pigcaulan (Pigcaulan) against respondent
Security and Credit Investigation, Inc. (SCII) and its General Manager, respondent Rene Amby Reyes. Likewise
assailed is the June 28, 2006 Resolution[5] denying Canoys and Pigcaulans Motion for Reconsideration.[6]
Factual Antecedents
Canoy and Pigcaulan were both employed by SCII as security guards and were assigned to SCIIs different
clients.Subsequently, however, Canoy and Pigcaulan filed with the Labor Arbiter separate complaints [7] for
underpayment of salaries and non-payment of overtime, holiday, rest day, service incentive leave and 13th month
pays. These complaints were later on consolidated as they involved the same causes of action.
Canoy and Pigcaulan, in support of their claim, submitted their respective daily time records reflecting the number of
hours served and their wages for the same. They likewise presented itemized lists of their claims for the corresponding
periods served.
Respondents, however, maintained that Canoy and Pigcaulan were paid their just salaries and other benefits
under the law; that the salaries they received were above the statutory minimum wage and the rates provided by the
Philippine Association of Detective and Protective Agency Operators (PADPAO) for security guards; that their holiday
pay were already included in the computation of their monthly salaries; that they were paid additional premium of 30%
in addition to their basic salary whenever they were required to work on Sundays and 200% of their salary for work
done on holidays; and, that Canoy and Pigcaulan were paid the corresponding 13th month pay for the years 1998 and
1999. In support thereof, copies of payroll listings[8] and lists of employees who received their 13th month pay for the
periods December 1997 to November 1998 and December 1998 to November 1999 [9] were presented. In addition,
respondents contended that Canoys and Pigcaulans monetary claims should only be limited to the past three years of
employment pursuant to the rule on prescription of claims.
Ruling of the Labor Arbiter

Giving credence to the itemized computations and representative daily time records submitted by Canoy and
Pigcaulan, Labor Arbiter Manuel P. Asuncion awarded them their monetary claims in his Decision[10] dated June 6,
2002. The Labor Arbiter held that the payroll listings presented by the respondents did not prove that Canoy and
Pigcaulan were duly paid as same were not signed by the latter or by any SCII officer. The 13th month payroll was,
however, acknowledged as sufficient proof of payment, for it bears Canoys and Pigcaulans signatures. Thus, without
indicating any detailed computation of the judgment award, the Labor Arbiter ordered the payment of overtime pay,
holiday pay, service incentive leave pay and proportionate 13 thmonth pay for the year 2000 in favor of Canoy and
Pigcaulan, viz:
WHEREFORE, the respondents are hereby ordered to pay the complainants: 1) their
salary differentials in the amount ofP166,849.60 for Oliver Canoy and P121,765.44 for
Abduljuahid Pigcaulan; 2) the sum of P3,075.20 for Canoy and P2,449.71 for Pigcaulan for
service incentive leave pay and; [3]) the sum of P1,481.85 for Canoy and P1,065.35 for Pigcaulan
as proportionate 13thmonth pay for the year 2000. The rest of the claims are dismissed for lack of
sufficient basis to make an award.
SO ORDERED.[11]

Ruling of the National Labor Relations Commission

Respondents appealed to the NLRC. They alleged that there was no basis
for the awards made because aside from the self-serving itemized computations, no representative daily time record
was presented by Canoy and Pigcaulan. On the contrary, respondents asserted that the payroll listings they submitted
should have been given more probative value. To strengthen their cause, they attached to their Memorandum on
Appeal payrolls[12]bearing the individual signatures of Canoy and Pigcaulan to show that the latter have received their
salaries, as well as copies of transmittal letters[13] to the bank to show that the salaries reflected in the payrolls were
directly deposited to the ATM accounts of SCIIs employees.
The NLRC, however, in a Resolution[14] dated March 23, 2004, dismissed the appeal and held that the
evidence show underpayment of salaries as well as non-payment of service incentive leave benefit. Accordingly, the
Labor Arbiters Decision was sustained. The motion for reconsideration thereto was likewise dismissed by the NLRC
in a Resolution[15] dated June 14, 2004.
Ruling of the Court of Appeals
In respondents petition for certiorari with prayer for the issuance of a temporary restraining order and preliminary
injunction[16] before the CA, they attributed grave abuse of discretion on the part of the NLRC in finding that Canoy
and Pigcaulan are entitled to salary differentials, service incentive leave pay and proportionate 13th month pay and in
arriving at amounts without providing sufficient bases therefor.

The CA, in its Decision[17] dated February 24, 2006, set aside the rulings of
both the Labor Arbiter and the NLRC after noting that there were no factual and legal bases mentioned in the
questioned rulings to support the conclusions made. Consequently, it dismissed all the monetary claims of Canoy and
Pigcaulan on the following rationale:
First. The Labor Arbiter disregarded the NLRC rule that, in cases involving money awards and at
all events, as far as practicable, the decision shall embody the detailed and full amount awarded.
Second. The Labor Arbiter found that the payrolls submitted by SCII have no probative value for
being unsigned by Canoy, when, in fact, said payrolls, particularly the payrolls from 1998 to 1999
indicate the individual signatures of Canoy.
Third. The Labor Arbiter did not state in his decision the substance of the evidence adduced by
Pigcaulan and Canoy as well as the laws or jurisprudence that would show that the two are indeed
entitled to the salary differential and incentive leave pays.
Fourth. The Labor Arbiter held Reyes liable together with SCII for the payment of the claimed
salaries and benefits despite the absence of proof that Reyes deliberately or maliciously designed to
evade SCIIs alleged financial obligation; hence the Labor Arbiter ignored that SCII has a corporate
personality separate and distinct from Reyes. To justify solidary liability, there must be an
allegation and showing that the officers of the corporation deliberately or maliciously designed to
evade the financial obligation of the corporation.[18]

Canoy and Pigcaulan filed a Motion for Reconsideration, but same was denied by the CA in a Resolution [19] dated June
28, 2006.
Hence, the present Petition for Review on Certiorari.
Issues
The petition ascribes upon the CA the following errors:
I. The Honorable Court of Appeals erred when it dismissed the complaint on mere
alleged failure of the Labor Arbiter and the NLRC to observe the prescribed form of decision,
instead of remanding the case for reformation of the decision to include the desired detailed
computation.
II. The Honorable Court of Appeals erred when it [made] complainants suffer the
consequences of the alleged non-observance by the Labor Arbiter and NLRC of the prescribed
forms of decisions considering that they have complied with all needful acts required to support
their claims.
III. The Honorable Court of Appeals erred when it dismissed the complaint allegedly due
to absence of legal and factual [bases] despite attendance of substantial evidence in the records.[20]

It is well to note that while the caption of the petition reflects both the names of Canoy and Pigcaulan as
petitioners, it appears from its body that it is being filed solely by Pigcaulan. In fact, the Verification and Certification of
Non-Forum Shopping was executed by Pigcaulan alone.

In his Petition, Pigcaulan submits that the Labor Arbiter and the NLRC are not strictly bound by the
rules. And even so, the rules do not mandate that a detailed computation of how the amount awarded was arrived at
should be embodied in the decision. Instead, a statement of the nature or a description of the amount awarded and the
specific figure of the same will suffice. Besides, his and Canoys claims were supported by substantial evidence in the
form of the handwritten detailed computations which the Labor Arbiter termed as representative daily time records,
showing that they were not properly compensated for work rendered. Thus, the CA should have remanded the case
instead of outrightly dismissing it.
In their Comment,[21] respondents point out that since it was only Pigcaulan who filed the petition, the CA
Decision has already become final and binding upon Canoy. As to Pigcaulans arguments, respondents submit that they
were able to present sufficient evidence to prove payment of just salaries and benefits, which bits of evidence were
unfortunately ignored by the Labor Arbiter and the NLRC. Fittingly, the CA reconsidered these pieces of evidence and
properly appreciated them. Hence, it was correct in dismissing the claims for failure of Canoy and Pigcaulan to
discharge their burden to disprove payment.
Pigcaulan, this time joined by Canoy, asserts in his Reply[22] that his filing of the present petition redounds
likewise to Canoys benefit since their complaints were consolidated below. As such, they maintain that any kind of
disposition made in favor or against either of them would inevitably apply to the other. Hence, the institution of the
petition solely by Pigcaulan does not render the assailed Decision final as to Canoy. Nonetheless, in said reply they
appended Canoys affidavit[23] where he verified under oath the contents and allegations of the petition filed by
Pigcaulan and also attested to the authenticity of its annexes. Canoy, however, failed to certify that he had not filed any
action or claim in another court or tribunal involving the same issues. He likewise explains in said affidavit that his
absence during the preparation and filing of the petition was caused by severe financial distress and his failure to inform
anyone of his whereabouts.
Our Ruling
The assailed CA Decision is considered final as to Canoy.

We have examined the petition and find that same was filed by Pigcaulan solely on his own behalf. This is very clear
from the petitions prefatory which is phrased as follows:
COMES NOW Petitioner Abduljuahid R. Pigcaulan, by counsel, unto this Honorable
Court x x x. (Emphasis supplied.)

Also, under the heading Parties, only Pigcaulan is mentioned as petitioner and consistent with this, the body of the
petition refers only to a petitioner and never in its plural form petitioners. Aside from the fact that the Verification and
Certification of Non-Forum Shopping attached to the petition was executed by Pigcaulan alone, it was plainly and
particularly indicated under the name of the lawyer who prepared the same, Atty. Josefel P. Grageda, that he is
the Counsel for Petitioner Adbuljuahid Pigcaulan only. In view of these, there is therefore, no doubt, that the petition

was brought only on behalf of Pigcaulan. Since no appeal from the CA Decision was brought by Canoy, same has
already become final and executory as to him.
Canoy cannot now simply incorporate in his affidavit a verification of the contents and allegations of the petition as he
is not one of the petitioners therein. Suffice it to state that it would have been different had the said petition been filed in
behalf of both Canoy and Pigcaulan. In such a case, subsequent submission of a verification may be allowed as noncompliance therewith or a defect therein does not necessarily render the pleading, or the petition as in this case, fatally
defective.[24] The court may order its submission or correction, or act on the pleading if the attending circumstances are
such that strict compliance with the Rule may be dispensed with in order that the ends of justice may be served
thereby. Further, a verification is deemed substantially complied with when one who has ample knowledge to swear to
the truth of the allegations in the complaint or petition signs the verification, and when matters alleged in the petition
have been made in good faith or are true and correct. [25] However, even if it were so, we note that Canoy still failed to
submit or at least incorporate in his affidavit a certificate of non-forum shopping.
The filing of a certificate of non-forum shopping is mandatory so much so
that non-compliance could only be tolerated by special circumstances and compelling reasons.[26] This Court has held
that when there are several petitioners, all of them must execute and sign the certification against forum shopping;
otherwise, those who did not sign will be dropped as parties to the case.[27] True, we held that in some cases, execution
by only one of the petitioners on behalf of the other petitioners constitutes substantial compliance with the rule on the
filing of a certificate of non-forum shopping on the ground of common interest or common cause of action or defense.
[28]

We, however, find that common interest is not present in the instant petition. To recall, Canoys and Pigcaulans

complaints were consolidated because they both sought the same reliefs against the same respondents. This does not,
however, mean that they share a common interest or defense. The evidence required to substantiate their claims may
not be the same. A particular evidence which could sustain Canoys action may not effectively serve as sufficient to
support Pigcaulans claim.
Besides, assuming that the petition is also filed on his behalf, Canoy failed to show any reasonable cause for
his failure to join Pigcaulan to personally sign the Certification of Non-Forum Shopping. It is his duty, as a litigant, to
be prudent in pursuing his claims against SCII, especially so, if he was indeed suffering from financial
distress. However, Canoy failed to advance any justifiable reason why he did not inform anyone of his whereabouts
when he knows that he has a pending case against his former employer. Sadly, his lack of prudence and diligence
cannot merit the courts consideration or sympathy. It must be emphasized at this point that procedural rules should not
be ignored simply because their non-observance may result in prejudice to a partys substantial rights. The Rules of
Court should be followed except only for the most persuasive of reasons.[29]
Having declared the present petition as solely filed by Pigcaulan, this Court shall consider the subsequent
pleadings, although apparently filed under his and Canoys name, as solely filed by the former.
There was no substantial evidence to support the grant of
overtime pay.

The Labor Arbiter ordered reimbursement of overtime pay, holiday pay, service incentive leave pay and 13 th month
pay for the year 2000 in favor of Canoy and Pigcaulan. The Labor Arbiter relied heavily on the itemized computations
they submitted which he considered as representative daily time records to substantiate the award of salary
differentials. The NLRC then sustained the award on the ground that there was substantial evidence of underpayment
of salaries and benefits.
We find that both the Labor Arbiter and the NLRC erred in this regard. The handwritten itemized computations are
self-serving, unreliable and unsubstantial evidence to sustain the grant of salary differentials, particularly overtime
pay. Unsigned and unauthenticated as they are, there is no way of verifying the truth of the handwritten entries stated
therein. Written only in pieces of paper and solely prepared by Canoy and Pigcaulan, these representative daily time
records, as termed by the Labor Arbiter, can hardly be considered as competent evidence to be used as basis to prove
that the two were underpaid of their salaries. We find nothing in the records which could substantially support
Pigcaulans contention that he had rendered service beyond eight hours to entitle him to overtime pay and during
Sundays to entitle him to restday pay. Hence, in the absence of any concrete proof that additional service beyond the
normal working hours and days had indeed been rendered, we cannot affirm the grant of overtime pay to Pigcaulan.
Pigcaulan is entitled to holiday pay, service incentive leave
pay and proportionate 13thmonth pay for year 2000.

However, with respect to the award for holiday pay, service incentive leave
pay and 13th month pay, we affirm and rule that Pigcaulan is entitled to these benefits.
Article 94 of the Labor Code provides that:
ART. 94. RIGHT TO HOLIDAY PAY. (a) Every worker shall be paid his regular daily
wage during regular holidays, except in retail and service establishments regularly employing less
than ten (10) workers;
xxxx
While Article 95 of the Labor Code provides:
ART. 95. RIGHT TO SERVICE INCENTIVE LEAVE. (a) Every employee who has
rendered at least one year of service shall be entitled to a yearly service incentive of five days with
pay.
xxxx

Under the Labor Code, Pigcaulan is entitled to his regular rate on holidays even if he does not work.
[30]

Likewise, express provision of the law entitles him to service incentive leave benefit for he rendered service for

more than a year already.Furthermore, under Presidential Decree No. 851,[31] he should be paid his 13th month pay. As
employer, SCII has the burden of proving that it has paid these benefits to its employees.[32]

SCII presented payroll listings and transmittal letters to the bank to show that Canoy and Pigcaulan received
their salaries as well as benefits which it claimed are already integrated in the employees monthly salaries. However,
the documents presented do not prove SCIIs allegation. SCII failed to show any other concrete proof by means of
records, pertinent files or similar documents reflecting that the specific claims have been paid. With respect to
13th month pay, SCII presented proof that this benefit was paid but only for the years 1998 and 1999. To repeat, the
burden of proving payment of these monetary claims rests on SCII, being the employer. It is a rule that one who pleads
payment has the burden of proving it. Even when the plaintiff alleges non-payment, still the general rule is that the
burden rests on the defendant to prove payment, rather than on the plaintiff to prove non-payment. [33] Since SCII failed
to provide convincing proof that it has already settled the claims, Pigcaulan should be paid his holiday pay, service
incentive leave benefits and proportionate 13th month pay for the year 2000.
The CA erred in dismissing the claims instead of
remanding the case to the Labor Arbiter for a detailed
computation of the judgment award.

Indeed, the Labor Arbiter failed to provide sufficient basis for the monetary
awards granted. Such failure, however, should not result in prejudice to the substantial rights of the party. While we
disallow the grant of overtime pay and restday pay in favor of Pigcaulan, he is nevertheless entitled, as a matter of right,
to his holiday pay, service incentive leave pay and 13 th month pay for year 2000. Hence, the CA is not correct in
dismissing Pigcaulans claims in its entirety.
Consistent with the rule that all money claims arising from an employer-employee relationship shall be filed within
three years from the time the cause of action accrued, [34] Pigcaulan can only demand the amounts due him for the
period within three years preceding the filing of the complaint in 2000. Furthermore, since the records are insufficient
to use as bases to properly compute Pigcaulans claims, the case should be remanded to the Labor Arbiter for a detailed
computation of the monetary benefits due to him.
WHEREFORE, the petition is GRANTED. The Decision dated
February 24, 2006 and Resolution dated June 28, 2006 of the Court of Appeals in CA-G.R. SP No. 85515
are REVERSEDand SET ASIDE. Petitioner Abduljuahid R. Pigcaulan is hereby declared ENTITLED to holiday
pay and service incentive leave pay for the years 1997-2000 and proportionate 13th month pay for the year 2000.
The case is REMANDED to the Labor Arbiter for further proceedings to determine the exact amount and to make a
detailed computation of the monetary benefits due Abduljuahid R. Pigcaulan which Security and Credit Investigation
Inc. should pay without delay.
SO ORDERED.
SOCIAL SECURITY SYSTEM, petitioner, vs. THE COURT OF APPEALS and CONCHITA
AYALDE,respondents.

DECISION
YNARES-SANTIAGO, J.:
In a petition before the Social Security Commission, Margarita Tana, widow of the late Ignacio Tana,
Sr., alleged that her husband was, before his demise, an employee of Conchita Ayalde as a farmhand in the
two (2) sugarcane plantations she owned (known as Hda. No. Audit B-70 located in Pontevedra, La Carlota
City) and leased from the University of the Philippines (known as Hda. Audit B-15-M situated in La
Granja, La Carlota City). She further alleged that Tana worked continuously six (6) days a week, four (4)
weeks a month, and for twelve (12) months every year between January 1961 to April 1979. For his labor,
Tana allegedly received a regular salary according to the minimum wage prevailing at the time. She further
alleged that throughout the given period, social security contributions, as well as medicare and employees
compensation premiums were deducted from Tanas wages. It was only after his death that Margarita
discovered that Tana was never reported for coverage, nor were his contributions/premiums remitted to the
Social Security System (SSS).Consequently, she was deprived of the burial grant and pension benefits
accruing to the heirs of Tana had he been reported for coverage.
Hence, she prayed that the Commission issue an order directing:
1. respondents Conchita Ayalde and Antero Maghari as her administrator to pay the premium
contributions of the deceased Ignacio Tana, Sr. and report his name for SSS coverage; and
2. the SSS to grant petitioner Margarita Tana the funeral and pension benefits due her.[1]
The SSS, in a petition-in-intervention, revealed that neither Hda. B-70 nor respondents Ayalde and
Maghari were registered members-employers of the SSS, and consequently, Ignacio Tana, Sr. was never
registered as a member-employee. Likewise, SSS records reflected that there was no way of verifying
whether the alleged premium contributions were remitted since the respondents were not registered
members-employers. Being the agency charged with the implementation and enforcement of the provisions
of the Social Security Law, as amended, the SSS asked the Commissions leave to intervene in the case. [2]
In his answer, respondent Antero Maghari raised the defense that he was a mere employee who was
hired as an overseer of Hda. B-70 sometime during crop years 1964-65 to 1971-72, and as such, his job was
limited to those defined for him by the employer which never involved matters relating to the SSS. Hence,
he prayed that the case against him be dismissed for lack of cause of action.[3]
For her part, respondent Ayalde belied the allegation that Ignacio Tana, Sr. was her employee,
admitting only that he was hired intermittently as an independent contractor to plow, harrow, or burrow
Hda. No. Audit B-15-M. Tana used his own carabao and other implements, and he followed his own
schedule of work hours. Ayalde further alleged that she never exercised control over the manner by which
Tana performed his work as an independent contractor. Moreover, Ayalde averred that way back in 1971,
the University of the Philippines had already terminated the lease over Hda. B-15-M and she had since
surrendered possession thereof to the University of the Philippines. Consequently, Ignacio Tana, Sr. was no
longer hired to work thereon starting in crop year 1971-72, while he was never contracted to work in Hda.
No. Audit B-70.She also prayed for the dismissal of the case considering that Ignacio Tana, Sr. was never
her employee.[4]
After hearing both parties, the Social Security Commission issued a Resolution on January 28, 1988,
the dispositive portion of which reads:
After a careful evaluation of the testimonies of the petitioner and her witnesses, as well as the testimony of
the respondent together with her documentary evidences, this Commission finds that the late Ignacio Tana
was employed by respondent Conchita Ayalde from January 1961 to March 1979. The testimony of the
petitioner which was corroborated by Agaton Libawas and Aurelio Tana, co-workers of the deceased
Ignacio Tana, sufficienty established the latters employment with the respondent.
As regards respondent Antero Maghari, he is absolved from liability because he is a mere employee of
Conchita Ayalde.
PREMISES CONSIDERED, this Commission finds and so holds that the late Ignacio Tana had been
employed continuously from January 1961 to March 1979 in Hda. B-70 and Hda. B-15-M which are owned
and leased, respectively, by respondent Conchita (Concepcion) Ayalde with a salary based on the Minimum
Wage prevailing during his employment.

Not having reported the petitioners husband for coverage with the SSS, respondent Conchita (Concepcion)
Ayalde is, therefore, liable for the payment of damages equivalent to the death benefits in the amount of
P7,067.40 plus the amount of P750.00 representing funeral benefit or a total of P7,817.40.
Further, the SSS is ordered to pay to the petitioner her accrued pension covering the period after the 5-year
guaranteed period corresponding to the employers liability.
SO ORDERED.[5]
Respondent Ayalde filed a motion for reconsideration [6]which the Commission denied for lack of merit
in an Order dated November 3, 1988.[7]
Not satisfied with the Commissions ruling, Ayalde appealed to the Court of Appeals, docketed as CAG.R. SP No. 16427, raising the following assignment of errors:

The Social Security Commission erred in not finding that there is sufficient evidence to show that:
(a) The deceased Ignacio Tana, Sr. never worked in the farmland of respondent-appellant situated in
Pontevedra, La Carlota City, otherwise known as Hacienda No. Audit B-70, (Pontevedra B-70 Farm for
short), in any capacity, whether as a daily or monthly laborer or as independent contractor;
(b) During the time that respondent-appellant was leasing a portion of the land of the University of the
Philippines, otherwise known as Hacienda Audit No. B-15-M, (La Granja B-15 Farm for short), the
deceased Ignacio Tana, Sr. was hired thereat on a pakyaw basis, or as an independent contractor,
performing the services of an arador (Plower), for which he was proficient, using his own carabao and
farming implements on his own time and discretion within the period demanded by the nature of the job
contracted.

II

The Social Security Commission erred in holding that there is no evidence whatsoever to show that
respondent-appellant was no longer leasing La Granja B-15 Farm.

III

The Social Security Commission erred in not holding that the deceased Ignacio Tana, having been hired as
an independent contractor on pakyaw basis, did not fall within the coverage of the Social Security Law.[8]
The Court of Appeals rendered judgment in favor of respondent-appellant Conchita Ayalde and
dismissed the claim of petitioner Margarita Tan.
The SSS, as intervenor-appellee, filed a Motion for Reconsideration, which was denied on the ground
that the arguments advanced are mere reiterations of issues and arguments already considered and passed
upon in the decision in question which are utterly insufficient to justify a modification or reversal of said
decision.[9]
Hence, this petition for review on certiorari on the following assigned errors:
1) The Court of Appeals was in error in ruling that an employee working under
the pakyaw system is considered under the law to be an independent contractor.
2) The Court of Appeals was in error in not giving due consideration to the fundamental tenet
that doubts in the interpretation and implementation of labor and social welfare laws should
be resolved in favor of labor.

3) The Court of Appeals was in error in disregarding the settled rule that the factual findings of
administrative bodies on matters within their competence shall not be disturbed by the courts.
4) The Court of Appeals was in error in ruling that even granting arguendo that Ignacio Tana was
employed by Conchita Ayalde, such employment did not entitle him to compulsory coverage
since he was not paid any regular daily wage or basic pay and he did not work for an
uninterrupted period of at least six months in a year in accordance with Section 8(j) (1) of the
SS Law.
The pivotal issue to be resolved in this petition is whether or not an agricultural laborer who was hired
on pakyaw basis can be considered an employee entitled to compulsory coverage and corresponding
benefits under the Social Security Law.
Petitioner, Social Security System (or SSS), argues that the deceased Ignacio Tana, Sr., who was hired
by Conchita Ayalde on pakyaw basis to perform specific tasks in her sugarcane plantations, should be
considered an employee; and as such, his heirs are entitled to pension and burial benefits.
The Court of Appeals, however, ruled otherwise, reversing the ruling of the Social Security
Commission and declaring that the late Ignacio Tana, Sr. was an independent contractor, and in the absence
of an employer-employee relationship between Tana and Ayalde, the latter cannot be compelled to pay to
his heirs the burial and pension benefits under the SS Law.
At the outset, we reiterate the well-settled doctrine that the existence of an employer-employee
relationship is ultimately a question of fact. [10] And while it is the general rule that factual issues are not
within the province of the Supreme Court, said rule is not without exception. In cases, such as this one,
where there are conflicting and contradictory findings of fact, this Court has not hesitated to scrutinize the
records to determine the facts for itself. [11] Our disquisition of the facts shall be our guide as to whose
findings are supported by substantial evidence.
The mandatory coverage under the SSS Law (Republic Act No. 1161, as amended by PD 1202 and
PD 1636) is premised on the existence of an employer-employee relationship, and Section 8(d) defines an
employee as any person who performs services for an employer in which either or both mental and physical
efforts are used and who receives compensation for such services where there is an employer-employee
relationship. The essential elements of an employer-employee relationship are: (a) the selection and
engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the power of
control with regard to the means and methods by which the work is to be accomplished, with the power of
control being the most determinative factor.[12]
There is no question that Tana was selected and his services engaged by either Ayalde herself, or by
Antero Maghari, her overseer. Corollarily, they also held the prerogative of dismissing or terminating Tanas
employment. The dispute is in the question of payment of wages. Claimant Margarita Tana and her
corroborating witnesses testified that her husband was paid daily wages per quincena as well as
on pakyaw basis. Ayalde, on the other hand, insists that Tana was paid solely onpakyaw basis. To support
her claim, she presented payrolls covering the period January of 1974 to January of 1976; [13] and November
of 1978 to May of 1979.[14]
A careful perusal of the records readily show that the exhibits offered are not complete, and are but a
mere sampling of payrolls. While the names of the supposed laborers appear therein, their signatures are
nowhere to be found. And while they cover the years 1975, 1976 and portions of 1978 and 1979, they do
not cover the 18-year period during which Tana was supposed to have worked in Ayaldes plantations. Also
an admitted fact is that these exhibits only cover Hda. B70, Ayalde having averred that all her records and
payrolls for the other plantation (Hda. B-15-M) were either destroyed or lost.[15]
To our mind, these documents are not only sadly lacking, they are also unworthy of credence. The fact
that Tanas name does not appear in the payrolls for the years 1975, 1976 and part of 1978 and 1979, is no
proof that he did not work in Hda. B70 in the years 1961 to 1974, and the rest of 1978 and 1979. The
veracity of the alleged documents as payrolls are doubtful considering that the laborers named therein never
affixed their signatures to show that they actually received the amounts indicated corresponding to their
names. Moreover, no record was shown pertaining to Hda. B-15-M, where Tana was supposed to have
worked. Even Ayalde admitted that she hired Tana as arador and sometimes as laborer during milling in
Hda. B-15-M.[16] In light of her incomplete documentary evidence, Ayaldes denial that Tana was her
employee in Hda. B-70 or Hda. B-15-M must fail.
In contrast to Ayaldes evidence, or lack thereof, is Margarita Tanas positive testimony, corroborated
by two (2) other witnesses. On the matter of wages, they testified as follows:

Margarita Tana:
Q. During the employment of your late husband, was he paid any wages?
A. Yes, he was paid.
Q. What was the manner of payment of his salary, was it on pakyaw or daily basis?
A. Daily basis.
Q. How many times did he receive his salary in a months time?
A. 2 times.
Q. You mean, payday in Hda. B-70 is every 15 days?
A. Yes, sir.
xxxxxxxxx
ATTY. GALVAN:
To prove that it is material to the main question because if ever the hacienda maintains complete
payrolls of their employees, then the burden of proof lies in the petitioner..
HEARING OFFICER:
Let the witness answer, if she knows.
WITNESS:
There was no payroll, only pad paper.
ATTY. GALVAN: (continuing)
Q. Were the names of workers of the hacienda all listed in that pad paper every payday?
A. Yes, we just sign on pad paper because we have no payroll to be signed.
xxxxxxxxx
Q. What do you understand by payroll?
A. Payroll is the list where the whole laborers are listed and receive their salaries.
Q. And how did that differ from the pad paper which you said you signed?
A. There is a difference.
Q. What is the difference?
A. In the payroll, at the end there is a column for signature but in the pad paper, we only sign directly.
Q. Did it contain the amount that you receive?
A. Yes, sir.
Q. And the date corresponding to the payroll pad?
A. I am not sure but it only enumerates our names and then we were given our salaries.
Q. Now, did you have a copy of that?
ATTY. GALVAN:
Objection, Your Honor, it is not the petitioner who had a copy, it is usually the owner because the
preparation of the payrolls is done by the employer who..
ATTY. UNGCO:
That is why Im asking ..
HEARING OFFICER:
Let the witness answer. Objection overruled.

WITNESS:
I dont have.
xxxxxxxxx
Q. When you are receiving daily wage of P4.00 how much was your quincenal together with your
husband?
A. The highest salary I received for my own was P30.00 in one quincena.
Q. What about the salary of your husband, how much?
A. The same.
Q. Was this P30.00 per quincena later on increased?
A. There was an increase because formerly it was P4.00 now it is P8.00.
Q. In 1979 how much was your husbands salary per quincena?
A. In one quincena my husband receives P60.00 while I only receive P30.00.[17]
AGATON LIBAWAS:
Q. During your employment, do you sign payrolls everytime you draw your salary?
A. We sign on intermediate pad.
Q. You mean, the practice of the hacienda is to have the names of the laborers receiving that salaries
listed on that intermediate pad?
A. Yes, sir.[18]
AURELIO TANA:
Q. By the way, how many times did you receive your salaries in a month?
A. We receive our wages twice a month that is, every 15 days.
Q. Did you sign payrolls everytime you received your salaries?
A. In the pad paper as substitute payroll.
Q. Do you know if all the workers of the hacienda were listed in that payrolls?
A. Yes, sir.
Q. Who was in charge in giving your salaries?
A. Antero Maghari.[19]
These witnesses did not waver in their assertion that while Tana was hired by Ayalde as
an arador on pakyaw basis, he was also paid a daily wage which Ayaldes overseer disbursed every fifteen
(15) days. It is also undisputed that they were made to acknowledge receipt of their wages by signing on
sheets of ruled paper, which are different from those presented by Ayalde as documentary evidence. In fine,
we find that the testimonies of Margarita Tana, Agaton Libawas and Aurelio Tana prevail over the
incomplete and inconsistent documentary evidence of Ayalde.
In the parallel case of Opulencia Ice Plant and Storage v. NLRC, the petitioners argued that since
Manuel P. Esitas name does not appear in the payrolls of the company it necessarily means that he was not
an employee. This Court held:
Petitioners further argue that complainant miserably failed to present any documentary evidence to prove
his employment.There was no timesheet, pay slip and/or payroll/cash voucher to speak of. Absence of these
material documents are necessarily fatal to complainants cause.
We do not agree. No particular form of evidence is required to prove the existence of an employeremployee relationship.Any competent and relevant evidence to prove the relationship may be
admitted. For, if only documentary evidence would be required to show that relationship, no scheming
employer would ever be brought before the bar of justice, as no employer would wish to come out with any

trace of the illegality he has authored considering that it should take much weightier proof to invalidate a
written instrument. Thus, as in this case where the employer-employee relationship between petitioners and
Esita was sufficiently proved by testimonial evidence, the absence of time sheet, time record or payroll has
become inconsequential.[20] (Underscoring ours)
Clearly, then, the testimonial evidence of the claimant and her witnesses constitute positive and
credible evidence of the existence of an employer-employee relationship between Tana and Ayalde. As the
employer, the latter is duty-bound to keep faithful and complete records of her business affairs, not the least
of which would be the salaries of the workers. And yet, the documents presented have been selective, few
and incomplete in substance and content. Consequently, Ayalde has failed to convince us that, indeed, Tana
was not her employee.
The argument is raised that Tana is an independenent contractor because he was hired and paid wages
on pakyawbasis. We find this assertion to be specious for several reasons.
First, while Tana was sometimes hired as an arador or plower for intermittent periods, he was hired to
do other tasks in Ayaldes plantations. Ayalde herself admitted as much, although she minimized the extent
of Tanas labors. On the other hand, the claimant and her witnesses were direct and firm in their testimonies,
to wit:
MARGARITA TANA:
Q. Was your late husbands work continuous or not?
A. His work was continuous except on Sundays.
Q. Mrs. Witness, in January 1961, how many days in a week did your late husband work?
A. 4 weeks in January 1961.
Q. And how many months for that year did he work?
A. 12 months.
Q. Is this working pattern of your husband, considering that you testified that he worked continuously,
the same all throughout his employment from 1961 to 1978?
A. Yes, he worked continuously from 1961 to 1978 for 6 days a week, 4 weeks a month and 12 months
each year.
Q. Mrs. Witness, how many months did your husband work in 1979 considering that he died in 1979?
A. 3 months.
Q. What was the nature of the work of your late husband from 1961 until his death in 1979?
A. Cutting canes, hauling canes with the use of canecarts, plowing, hauling fertilizers, weeding and
stubble cleaning.
xxxxxxxxx
Q. Now, the other co-workers of yours, you said they were Agaton Libawas, Narciso Dueas, Juan
Dueas, and Aurelio Tana, what were their jobs?
A. Hauling canes by the use of bull carts and cutting canes. Their works are the same with that of my
husbands.
Q. But you mentioned among the duties of your husband as arador meaning plowing the fields?
A. Yes, he was also plowing because that is one of his duties.[21]
AGATON LIBAWAS:
Q. How about petitioner Margarita Tana and the late Ignacio Tana, were they regular workers, or extra
workers?
A. They were regular workers.
Q. In your case, Mr. Witness, considering that according to you, you are only a relief worker, please
inform the Commission how many months each year from 1961 to 1984 did you work in Hda. B70 and Hda. B-15M with Conchita Ayalde?

A. During milling season, I worked 2 months, during cultivation if they are short of plowers then they
would call me to work for at least 3 months as a plower.
Q. So, all in all, each year, from 1961 to 1984 your average working months in Hda. B-70 and B-15M
are 5 months each year?
A. Yes, sir.
Q. Mr. Witness, to prove that you have worked there, will you please inform at least 5 laborers of Hda.
B-70 and B-15M of Conchita Ayalde?
A. Juan Dueas, Narciso Dueas, Aurelio Tana, Ignacio and Margarita Tana.
xxxxxxxxx
Q. Will you please inform the Commission if the deceased Ignacio Tana which is according to you, was
a regular worker of the 2 haciendas, if how many months did he work during lifetime from 1961
until he died in 1979?
A. His work was continuous.
Q. And by continuous you mean he worked straight 12 months each year except in 1979?
A. He worked only for 10 months because the 2 months are already preparation for cultivation.
xxxxxxxxx
Q. And according to you, in a years time, you worked only for at least 5 months in Hda. B-70 and B15M, is that correct?
A. Yes.
Q. And during this time that you are working in your riceland you will agree with me that you do not
know whether the laborers of this Hda. B-70 and Had B-15M are really working because you are
devoting your time in your riceland, is that correct?
A. I knew because the place of their work is just near my house, it is along the way.
Q. How about when the canes are already tall, can you actually see the workers in Hda. B-70 and B15M when you are busy at your riceland?
A. Yes, because they have to pass in my house.
Q. Is there no other passage in that hacienda except that road in front of your house?
A. Yes.
Q. Are you sure about that?
A. Yes, I am sure.[22]
AURELIO TANA:
Q. Do you know what is the work of the petitioner during the time when you were together working in
the field?
A. We were working together, like cutting and loading canes, hoeing, weeding, applying fertilizers,
digging canals and plowing.
Q. During your employment in the said hacienda where were you residing?
A. There inside the hacienda.
Q. What about the petitioner?
A. The same.
Q. How far is your house from the house of the petitioner?
A. About 20 arms-length.
Q. How far is Hda. B-70 from Hda. B-15.
A. It is very near it is divided by the road.

Q. What road are you referring to?

A. Highway road from Barangay Buenavista to La Granja.
Q. During your employment will you please inform the Commission the frequency of work of the late
Ignacio Tana?
A. 4 weeks a month, 6 days a week, 12 months a year.
Q. Why is it that you are in a position to inform the Commission about the period of employment of
Ignacio Tana?
A. Because we were together working.[23]
It is indubitable, therefore, that Tana worked continuously for Ayalde, not only
as arador on pakyaw basis, but as a regular farmhand, doing backbreaking jobs for Ayaldes business. There
is no shred of evidence to show that Tana was only a seasonal worker, much less a migrant worker. All
witnesses, including Ayalde herself, testified that Tana and his family resided in the plantation. If he was a
mere pakyaw worker or independent contractor, then there would be no reason for Ayalde to allow them to
live inside her property for free. The only logical explanation is that he was working for most part of the
year exclusively for Ayalde, in return for which the latter gratuitously allowed Tana and his family to reside
in her property.
The Court of Appeals, in finding for Ayalde, relied on the claimants and her witnesses admission that
her husband was hired as an arador on pakyaw basis, but it failed to appreciate the rest of their
testimonies. Just because he was, for short periods of time, hired on pakyaw basis does not necessarily
mean that he was not employed to do other tasks for the remainder of the year. Even Ayalde admitted that
Tana did other jobs when he was not hired to plow. Consequently, the conclusion culled from their
testimonies to the effect that Tana was mainly and solely an arador was at best a selective appreciation of
portions of the entire evidence. It was the Social Security Commission that took into consideration all the
documentary and testimonial evidence on record.
Secondly, Ayalde made much ado of her claim that Tana could not be her employee because she
exercised no control over his work hours and method of performing his task as arador. It is also an
admitted fact that Tana, Jr. used his own carabao and tools. Thus, she contends that, applying the control
test, Tana was not an employee but an independent contractor.
A closer scrutiny of the records, however, reveals that while Ayalde herself may not have directly
imposed on Tana the manner and methods to follow in performing his tasks, she did exercise control
through her overseer.
Be that as it may, the power of control refers merely to the existence of the power. It is not essential
for the employer to actually supervise the performance of duties of the employee; it is sufficient that the
former has a right to wield the power.[24]Certainly, Ayalde, on her own or through her overseer, wielded the
power to hire or dismiss, to check on the work, be it in progress or quality, of the laborers. As the
owner/lessee of the plantations, she possessed the power to control everyone working therein and
everything taking place therein.
Jurisprudence provides other equally important considerations which support the conclusion that Tana
was not an independent contractor. First, Tana cannot be said to be engaged in a distinct occupation or
business. His carabao and plow may be useful in his livelihood, but he is not independently engaged in the
business of farming or plowing. Second, he had been working exclusively for Ayalde for eighteen (18)
years prior to his demise. Third, there is no dispute that Ayalde was in the business of growing sugarcane in
the two plantations for commercial purposes. There is also no question that plowing or preparing the soil
for planting is a major part of the regular business of Ayalde.
Under the circumstances, the relationship between Ayalde and Tana has more of the attributes of
employer-employee than that of an independent contractor hired to perform a specific project. In the case
of Dy Keh Beng v. International Labor,[25] we cited our long-standing ruling in Sunripe Coconut Products
Co. v. Court of Industrial Relations, to wit:
When a worker possesses some attributes of an employee and others of an independent contractor, which
make him fall within an intermediate area, he may be classified under the category of an employee when
the economic facts of the relations make it more nearly one of employment than one of independent
business enterprise with respect to the ends sought to be accomplished. (Underscoring Ours)[26]

We find the above-quoted ruling to be applicable in the case of Tana. There is preponderance of
evidence to support the conclusion that he was an employee rather than an independent contractor.
The Court of Appeals also erred when it ruled, on the alternative, that if ever Tana was an employee,
he was still ineligible for compulsory coverage because he was not paid any regular daily wage and he did
not work for an uninterrupted period of at least six months in a year in accordance with Section 8(j) (I) of
the Social Security Law. There is substantial testimonial evidence to prove that Tana was paid a daily wage,
and he worked continuously for most part of the year, even while he was also occasionally called on to
plow the soil on a pakyaw basis. As a farm laborer who has worked exclusively for Ayalde for eighteen (18)
years, Tana should be entitled to compulsory coverage under the Social Security Law, whether his service
was continuous or broken.
Margarita Tana alleged that SSS premiums were deducted from Tanas salary, testifying, thus:
Q. Were there deductions from the salaries of your husband while he was employed with the respondent
from 1961 to 1979?
A. Yes, there were deductions but I do not know because they were the ones deducting it.
Q. Why do you know that his salaries were deducted for SSS premiums?
A. Because Antero Maghari asked me and my husband to sign SSS papers and he told us that they will
take care of everything.
Q. How much were the deductions every payday?
A. I do not know how much because our daily wage was only P4.00.[27]
Agaton Libawas, also testified:
Q. Mr. Witness, in your 15-day wages do you notice any deductions from it?
A. There were deductions and we were informed that it was for SSS.
Q. Mr. Witness, since when were there deductions from your salaries?
A. Since 1961.
Q. Up to when?
A. Up to 1979.
Q. Mr. Witness, are you a member of the SSS?
A. No.
Q. How about petitioner, if you know?
A. No, also.
Q. What happened to the deductions did you not ask your employer?
A. We asked but we were answered that we were being remitted for our SSS.
Q. Did you not verify?
A. No, because I just relied on their statement.[28]
Ayalde failed to counter these positive assertions. Even on the assumption that there were no
deductions, the fact remains that Tana was and should have been covered under the Social Security
Law. The circumstances of his employment place him outside the ambit of the exception provided in
Section 8(j) of Republic Act No. 1611, as amended by Section 4 of R.A. 2658.
WHEREFORE, in view of all the foregoing, the Decision of the Court of Appeals in C.A.-G.R. SP
No. 16427 and the Resolution dated June 14, 1991 are hereby REVERSED and SET ASIDE. The
Resolution of the Social Security Commission in SSC Case No. 8851 is REINSTATED.
No costs.
SO ORDERED.

THE SHELL COMPANY OF PHILIPPINE ISLANDS, LIMITED, recurrente,

vs.
NATIONAL LABOR UNION, recurrida.
Sres. Ross, Selph, Carrascoso y Janda en representacion de la recurrente.
Sres. Paguia y Villanueva en representacion de la recurrida.
BRIONES, J.:
Actuando sobre una peticion de la entidad obrera llamada "National Labor Union," la Corte de Relaciones
Industriales ha dictado una decision en la que, entre otras cosas, se obliga a la firma petrolera "The Shell
Company of Philippine Islands, Limited" a pagar a sus obreros que trabajan de noche (desde que se pone el
sol hasta que se levanta al dia siguiente) una compensacion adicional de 50% sobre sus salarios regulares si
trabajasen de dia. Parece que la comania tiene necesidad del servicio nocturno de un determinado numero
de obreros, pues los aviones procedentes del extranjero suelen aterrizar y despegarse de noche, siendo por
esto necesario el que se hagan faenas de noche para el suministro de gasolina y lubricantes, y para otros
menesteres. La compania petrolera se ha excepcionado contra dicha decision de ahi el presente recurso
de certiorari para que la revoquemos.
La compania recurrente alega y arguye que no solo no existe ninguna disposicion legal que faculte a la
Corte de Relaciones Industriales para ordenar el pago de compensacion adicional a obreros que trabajan de
noche, sino que, por el contrario, la ley del Commonwealth No. 444 exime al patrono de semejante
obligacion toda vez que en dicha ley se proveen los casos en que es compulsorio el pago de "overtime"
(compensacion adicional), y entre tales casos no figura el trabajo de noche.
Por su parte, la union obrera recurrida sostiene que la facultad que se discute forma parte de los poderes
amplios y efectivos que la ley del Commonwealth No. 103 la carta organica del Tribunal de Relaciones
Industriales otorga a dicho tribunal; y que la ley No. 444 del Commonwealth que se invoca no tiene
ninguna aplication al presente caso, pues la misma es de alcance forzosamente limitado, refiriendose
particular y exclusivamente a la jornada maxima de trabajo contidiano permitida en los establecimientos
industriales la jornada de 8 horas.
Nuestra conclusion es que la union obrera recurrida tiene la razon de su parte. Para una clara y cabal
elucidacion de los puntos discutidos, estmamos conveniente, aun a riesgo de alargar esta ponencia,
transcribir lasdisposiciones legales pertinentes que son los articulos 1, 4 y 13 de la ley del Commonwealth
No. 103. Helas aqui:
SECTION 1. The Judge: his appointment, qualifications, compensation, tenure. There is
hereby created a Court of Industrial Relations, which shall have jurisdiction over the entire
Philippines, to consider, investigate, decide, and settle any question, matter, controversy or dispute
arising between, and/or affecting, employers and employees or laborers, and landlords and tenants
or farm-laborers, and regulate the relation between them, subject to, and in accordance with, the
provisions of this Act. The Court shall keep a record of all its proceedings and shall be presided
over by a Judge to be appointed by the President of the Philippines with the consent of the
Commission on Appointments of the National Assembly. The Judge of the Court shall hold office
during good behavior 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 Supreme Court and he shall receive an annual compensation of
ten thousand pesos and shall be entitled to traveling expenses and per diems when performing
official duties outside of the City of Manila. The Department of Justice shall have executive
supervision over the Court.
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
cause a strike or lockout, arising form differences as regards wages, shares or compensation, hours
of labor or conditions of tenancy or employment, between employers and employees or laborers
and between landlords and tenants or farm-laborers, provided that the number of employees,
laborers or tenants or farm-laborers involved exceeds thirty, and such industrial or agricultural
dispute is submitted to the Court by the Secretary of Labor, or by any or both of the parties to the
controversy and certified by the Secretary of Labor as existing and proper to be dealt with by the

Court for the 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 submission of such a controversy or question by the Secretary of Labor, his intervention
therein as authorized by law, shall cease.
The Court shall, before hearing the dispute and in the course of such hearing, endeavor to
reconcile the parties and induce them to settle the dispute by amicable agreement. If any
agreement as to the whole or any part of the dispute is arrived at by the parties, a memorandum of
its terms shall be made in writing, signed and acknowledged by the parties thereto before the
Judge of the Court or any official acting in his behalf and authorized to administer oaths or
acknowledgments, or, before a notary public. The memorandum shall be filed in the office of the
Clerk of the Court, and, unless otherwise ordered by the Court, shall, as between the parties to the
agreement, have the same effect as, and be deemed to be, a decision or award.
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 made by the parties to the industrial or agricultural dispute, but may include in the
award, order or decision any matter or determination which my be deemed necessary or expedient
for the purpose of setting the dispute or of preventing further industrial or agricultural disputes.
Resulta evidente de las disposiciones transcritas lo siguiente: (a) que cuando surge una disputa entre el
principal y el empleado u obrero, vgr. sobre cuestion de salarios, la Corte de Relaciones Industriales tiene
jurisdiccion en todo el territorio de Filipinas para considerar, investigar y resolver dicha disputa, fijando los
salarios que estime justos y razonables; (b) que para los efectos de prevencion, arbitraje, decision y arreglo,
el mismo Tribunal de Relaciones Industriales tien igualmente jurisdiccion para conocer de cualquier disputa
industrial o agricola resultante de cualesquier diferencias respecto de los salarios, participaciones o
compensaciones, horas de trabajo, condiciones del empleo o de la aparceria entre los patronos y los
empleados u obreros y entre los propietarios y los terratenientes u obreros agricolas previo el cumplimiento
de ciertos requisitos y condiciones, cuando se viere que dicha disputa ocasiona o puede ocasionar una
huelga; (c) que en el ejercicio de sus facultades arriba especificadas, el Tribunal de Relaciones Industriales
no queda limitado, al decidir la disputa, a conceder el remedio o remedios solicitados por las partes en la
controversia, sino que puede incluir en la orden or decision cualquier materia o determinacion para el
proposito de arreglar la disputa o de prevenir ulteriores controversias industriales o agricolas.
En el caso nos ocupa existe indudablemente una dispunta industrial. Mientras la empresa, la compania
Shell, no esta dispuesta a pagar a sus obreros de noche mayores salarios que los obreros de ida, la
"NationalLabor Union", a la cual estan afiliados los trabajadoresde la Shell, reclama otro tipo de salarios
para el servicio nocturno un 50% mas. En esto consiste la disputa, el litigio industrial. Ahora bien: que
ha hecho la Corte de Relaciones Industriales, despues de sometido el conflicto a su jurisdiccion? Pues
precisamente lo que manda la citada ley No. 103 del Commonwealth, carta organica de su creacion y
funcionamiento, a saber: considerar, investigar y enjuiciar la disputa, resolviedola despues en el sentido en
que la ha resuelto, es decir, remunerando el trabajo de noche con un 50% mas de los salarios de dia. Y esto
es perfectamente legal tanto dentro del alcance del articulo 1 de la referida ley No. 103 que faculta a la
Corte de Relaciones Industriales para decidir cualquier disputa sobre salarios y compensaciones en la forma
que estime razonable y conveniente, como dentro del marco del articulo 4 de la misma ley que autoriza a
dicho tribunal para enjuiciar y decidir cualquier pleito o controversia industrial o agricola determine el
estallido de una huelga o tienda a causarla. Mas todavia: lo hecho por el Trbunal de Relaciones Industriales
en el presente caso es asimismo legal dentro del marco del articulo 13 de la misma ley No. 103, articulo
que, como queda visto, no solo faculta a dicho tribunal a conceder el remedio que recabanlas partes, sino
inclusive a ir mas alla, esto es, a otorgar remedios no expresamente solicitados, siempre que los mismos se
encamienen a resolver de una vez la disputa o a prevenir el estallido de ulteriores disputas o huelgas.
Es evidente que con estos amplios poderes el Estadose ha propuesto equipar al Tribunal de Relaciones
Industriales hasta el maximum posible de utilidad y eficacia, haciendo del mismo no una simple agencia
academica, sino verdaderamente activa, dinamica y eficiente en una palabra, la maquinaria oficial por
excelencia en la formidable y espinosa tarea de resolver los conflictos industriales, yagricolas de cierta
clase, previniendo y evitando de esta manera esos paros y huelgas que tanto afligen y danan no solo a las
empresas y a los obreros, sino, en general, a toda la comunidad. En su opinion concurrente dictada en el
caso autoritativo de Ang Tibay contra Tribunal de Relaciones Industriales 1 (R.G. No. 46496), el Magistado
Laurel ha expresado muy acertadamente la idea fundamental que subraya la creacion de dicho tribunal, con
el siguiente pronunciamiento:

In Commonwealth Act No. 103, and by it, our government no longer performs the role of mere
mediator or intervenor but that of supreme arbiter. (Las cursivas son nuestras.).
La recurrente arguye, sin embargo, que si bien es verdad que en caso de disputa el Tribunal de relaciiones
Industriales tiene, en virtud de su ley organica, el poder de fijar los salarios, tal poder no es absoluto, sino
que esta sujeto a ciertas restricciones y cortapizas, provistas en la ley comunmente conocida por ley sobre
la jornada de ocho horas, la ley del Commonwealth No. 444, cuyos articulos pertinentes se transacriben
integramente a continuacion:
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
working and can leave his working place and can rest completely shall not be counted.
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
disaster or calamity in order to prevent loss to life and property or imminent danger to public
safety; or in case 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
of a similar nature; but in all such cases the laborers and employees shall be entitled to receive
compensation for the overtime work performed at the same rate as their regular wages or salary,
plus at least twenty-five per centum additional.
In case of national emergency the government is empowered to establish rules and regulations for
the operation of the plants and factories and to determine the wages to be paid the laborers.
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
additional sum of at least twenty-five per centum of his regular remuneration: Provided however,
That this prohibition shall not apply to public utilities performing some public service such as
supplying gas, electricity, power, water, or providing means of transportation or communication.
Como quiera argumentanlos abogados de la recurrente que en estos articulos se especifican los casos
en que se autoriza el pago de compensacion extra o adicional y son solo, a saber: (a) en caso de "overtime"
o trabajo en exceso de las horas regulares por razones imperiosasde urgencia con motivo de algun desastre
o accidente, o para evitar perdidas o repararlas; (b) en caso de trabajo por los domingos y fiestas; (c) en
caso de emergencia, y nada hay que se refiera al trabajo de noche; luego la orden de que se trata es ilegal,
pues no esta autorizada por la ley. "In the absence recalcan los abogados de la recurrente legislation
authorizing the payment of extra compensation for work done at night, the Court of Industrial Relations ha
no power or authority to order the petitioner company to pay extra compensation for work done by its
laborers at night. Expressio unius est exclusio alterius. Where, as inthe case at bar, statute expressly
specifies the cases where payment of extra compensation may be demanded, extra compensation may be
allowed in those cases only, and in no others. The provisions of the Commonwealth Act No. 444 cannot be
enlarged by implication or otherwise. Expressum facit cessare tacitum.
La argumentacion es erronea. La Ley No. 444 no es aplicable al presente caso, siendo evidente que la
misma tiene un objeto especifico, a saber: (a) fijar en 8 horas la jornada maxima de trabajo; (b) senalar
ciertos casos excepcionales en que se puede autorizar el trabajo fuera de dicha jornada; (c) proveer un
sobresueldo, que no debe ser menor de 25% del salario regular, para el "overtime" o trabajo en exceso de
las 8 horas.
En el caso de Manila Electric, solicitante-apelante, contra The Public Utities Employees'
Association,2 apelada, L-1206 (45 Off. Gaz., 1760), esta Corte ha declarado que la facultad conferida por el
articulo 1 de la ley del Commonwealth No. 103 al Tribunal de relaciones Industriales para enjuciar y
decidir pleitos y controversias industriales entre el capital y el trabajo, que incluye la de fijar salarios y
compnsaciones de empleados y obreros, ha quedado restringida por el articulo 4 de la ley Commonwealth
No. 444, que al mismo tiempo que limita a un 25% del salario o compensacion regular del obrero el
minimum de la compensacion adicional que el tribunal puede conceder por trabajos en los Domingos y
fiestas oficiales, exime del pago de dicha compensacion adicional a las entidades de utilidad publica que
prestan algun servicio publico, como las que suministran gas, electricidad, fuerza mortriz, agua, o proveen
medios de transporte o communicacion. Tal restriccion viene a ser una excepcion de la facultad general del

tribunal para fijar, en casos de disputa, los salarios y compensaciones que deben pagar los patronos a los
empleados y obreros; y como quiera que dicho articulo 4 se refiere solamente a salario o compensacion por
trabajos durante los dias de Domingo y fiestas oficiales, es obvio que no puede referirse a salario o
compensacion adicional por trabajos fuera de lajornada de ocho horas que generalmente se realizan desde
primeras horas de la manana a ultimas horas de la tarde, pues una cosa es trabajar en dias de Domingo y
fiestas oficiales, y otra cosa bien distinta es trabajar de noche of fuera de la jornada de ocho horas en dias
laborables. Aplicando la maxima legal "expressio unius est exclusio alterius," se puede sostener, sin temor
de equivocarse, que una ley que provee una excepcion especifica a sus disposiciones generales, como la
compensacion adicional por trabajos en dias de Domingo y fiestas oficiales, excluye cualquiera otra, como
la compensacion adicional por trabajos de noche en dias laborables."Another case in which this maxim may
almost invariably by followed is that of statute which makes certain specific exceptions to its general
provisions. Here wemay safely assume that all other exceptions were intended to be excluded." (Wabash R.
Co.vs. United States, 178 Fed., 5, 101 C. C. A. 133; Cella Commision Co. vs. Bohlinger, 147 Fed., 419; 78
C. C. A. 467; Kunkalman vs. Gibson, 171 Ind., 503; 84 N.E. 985; Hering vs. Clement, 133 App. Div., 293;
117 N.Y., Supp. 747.).
El trabajo denoche que la compania Shell exige de sus obreros no es talmente un "overtime", en el sentido
en que se emplea esta palabra en la Le No. 444, sino que es una jornada completa de trabajo, tambien de 8
horas: solo que, en vez de realizarse de dia, se hace de noche. Dicho en otras palabras, el trabajo de noche
de que aqui se trata no es solamente unexceso, prolongacion u "overtime" del trabajo regular de dia, sino
que es otro tipo de trabajo, absolutamente independiente de la jornada diurna. Por eso hay dos turnos: el
turno de obreros que trabajan de dia; y el turno de los que trabajan de noche. Asi que no es extrano que el
legislador no haya incluido este tipo de trabajo entre los casos de "overtime" senalados en la referida ley
No. 444.
La cuestion que, a nuestro juicio, se debe determinar es si entre las facultades generales de la Corte de
Relaciones Industriales que estan admitidas sin dipusta, esta la de considerar la jornada de noche como una
jornada completa de trabajo; la de estimarla como mas gravosa que la jornada de dia; y consiguientemente,
la de proveer y ordenar que se remunere con un 50% mas de los salarios regulares diurnos. Nuestra
contestacion es afirmativa: todo esto se halla comprendido entre los poderes generales de la Corte de
Relaciones Industriales. Si este tribunal tiene, en casos de disputa, el poder de fijar los salarios que estime
justos y razonables para el trabajo de dia, no hay razon por que no ha de tener el mismo poder con respecto
a los salarios de noche; es tan trabajo lo uno como lo otro. Y con respecto ala apreciacion de que el trabajo
de noche es mas pesado y oneroso que el de dia y, por tanto, merece mayor remuneracion, tampoco hay
motivospara revocarla o alterarla. No hay argumento posible contra el hecho universal de que el trabajo
regular, normal y ordinario es el de dia, y que el trabajo de noche es muy exceptional y justificado solo por
ciertos motivos imperativamente inevitables. Por algo la humanidad ha trabajadosiempre de dia.
Razones de higiene, de medicina, de moral, de cultura, de sociologia, establecen de consuno que el trabajo
de nocho tiene muchos inconvenientes, y cuando no hay mas remedio que hacerlo es solo justo que se
remunero mejor que de ordinario para resarcir hasa cierto punto al obrero de tales inconvenientes. Es
indudable que el trabajo de noche no solo a la larga afecta a la salud del trabajador, sino que le priva a este
de ciertas cosas que hacen relativamente agradable la vida, como, vgr., un reposo completo e
ininterrumpido y ciertos ratos de solaz, ocio o expansion espiritual y cultural que podria tener al terminar el
trabajo por la tarde y durante las primeras horas de la noche. Se dice que el obrero puede descansar de dia
despues de haber trabajado toda la noche; pero puede acaso el reposo de dia dar al cuerpo aquel tonico y
aquel efecto reparador completo que solo puede proporcionar el reposo natural de noche? Se dice tambien
que algunos prefieren trabajar de noche bajo nuestro clima abrasador, evitando asi el calor del dia. Mucho
tememos, sin embargo, que esto sea mejor hablado que praticado. Creemos que desde tiempo inmemorial la
regla universal es que el hombre trabja de noche mas por necesidad irremediable que por placentera
conveniencia.
A la opinion vulgar, universal, hay que sumar la opinionpericial, el criterio especialista. La opinion de los
tratadistas y expertos milita decididamente en favor de la tesis de que el trabajo de noche es mas duro y
oneroso que el trabajo de dia, considerandose por esto con marcada repugnancia y compeliendo
consiguientemente a las gerencias capitalisticas a establecer una escala mas alta de salarios como incentivo
a los obreros para aceptarlo. Se podrian citar virias autoridades, pero para no extender demasiado esta
ponencia optamos por transcriber solamente algunas, a saber:
. . . Then, it must be remembered that it is distinctly unphysiological to turn the night into day and
deprive the body of the beneficial effects of sunshine. The human organism revolts against this

procedure. Added to artificial lighting are reversed and unnatural times of eating, resting, and
sleeping. Much of the inferiority of nightwork can doubtless be traced to the failure of the workers
to secure proper rest and sleep, by day. Because of inability or the lack of opportunity to sleep,
nightworkers often spend their days in performing domestic duties, joining the family in the
midday meal, 'tinkering about the place', watching the baseball game, attending the theater or
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.).
Nightwork. Nightwork has gained a measure of prominence in the modern industrial system in
connection with continuous industries, that is, industries in which the nature of the processes
makes it necessary to keep machinery and equipment in constant operation. Even in continuous
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 place with regard to the lengths of the period any workers should be allowed to remain on
the 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
where temporary changes are made for individual convenience.
There is sharp difference of opinion concerning the relative merits of these systems. Advocates of
the weekly change of shifts contend that the strain of nightwork and the difficulty of getting
adequate sleep during the day make it unwise for workers to remain on the"graveyard" shift for
more than a week at a time. Opponents urge that repeated changes make it more difficult to settle
down to either kind of shift and that after the first week nightwork becomes less trying while the
ability to sleep by day increases. Workers themselves react in various ways to the different
systems. This much, however, is certain: Few persons react favorably to nightwork, whether the
shift be continuous or alternating. Outside of continuous industries, nightwork can scarcely be
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,
and the conservation of the health and vitality of the workers.
Nightwork cannot be regarded as desirable, either from the point of view of the employer or of the
wage earner. It is uneconomical unless overhead costs are unusually heavy. Frequently the scale of
wages is higher as an inducement to employees to accept employment on the night shift, and the
rate of production is generally lower. (Management of Labor Relations, by Watkins & Dodd, pp.
522-524; emphasis ours.)
. . . The lack of sunlight tends to produce anemia and tuberculosis and to predispose to other ills.
Nightwork brings increased liability to eyestrain and accident. Serious moral dangers also are
likely to result from the necessity of traveling the streets alone at night, and from the interference
with normal home life. From an economic point of view, moreover, the investigations showed that
nightwork was unprofitable, being inferior to day work both in quality and in quantity. Wherever it
had been abolished, in the long run the efficiency both of the management and of the workers was
raised. Furthermore, it was found that nightwork laws are a valuable aid in enforcing acts fixing
the maximum period of employment. (Principles of Labor Legislation, by Commons and Andrews,
4th Revised Edition, p. 142.)
Special regulation of nightwork for adult men is a comparatively recent development. Some
European countries have adopted laws placing special limitations on hours of nightwork for men,
and others prohibit such work except in continuous processes. (Principles of Labor legislation, 4th
Revised Edition by Common & Andrews, p. 147.)
Nightwork has almost invariably been looked upon with disfavor by students of the problem
because of the excessive strain involved, especially for women and young persons, the large
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
going" on artificial stimulants, the general curtailment of time for rest, leisure, and cultural
improvement, and the fact that night workers, although precluded to an extent from the activities
of day life, do attempt to enter into these activities, with resultant impairment of physical wellbeing. It is not contended, of course, that nightwork could be abolished in the continuous-process
industries, but it is possible to put such industries upon a three- or four-shifts basis, and to prohibit

nightwork for women and children. (Labor's Progress and Problems, Vol. I, p. 464, by Professors
Millis and Montgomery.)
Nightwork. Civilized peoples are beginning to recognize the fact that except in cases of
necessity or in periods of great emergency, nightwork is socially undesirable. Under our modern
industrial system, however, nightwork has greatly aided the production of commodities, and has
offered a significant method of cutting down the ever-increasing overhead costs of industry. This
result has 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 whether nightwork has deleterious effects upon the health of laborers and tends to reduce
the ultimate supply of efficient labor. If it can proved that nightwork affects adversely both the
quality and quantity of productive labor, its discontinuance will undoubtedly be sanctioned by
employers. From a social point of view, even a relatively high degree of efficiency in night
operations must be forfeited if it is purchased with rapid exhaustion of the health and energy of the
workers. From an economic point of view, nightwork may be necessary if the employer is to meet
the demand for his product, or if he is to maintain his market in the face of increasing competition
or mounting variable production costs.
Industrial experience has shown that the possession of extra-ordinary physical strength and selfcontrol 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
common possessions. It has been found that the most serious obstacle to a reversal of the routine is
the lack of self-discipline. Many night workers enter into the numerous activities of day life that
preclude sleep, and continue to attempt to do their work at night. Evidence gathered by the British
Health of Munition Workers' Committee places permanent night workers, whether judged on the
basis of output or loss of time, in a very unfavorable positions as compared with day workers.
Systems of nightwork differ. There is the continuous system, in which employees labor by night
and do not attend the establishment at all by day, and the discontinuous system, in which the
workers change to the day turn at regular intervals, usually every other week. There are, of course,
minor variations in these systems, depending upon the nature of the industry and the wishes of
management. Such bodies as the British Health Munition Workers' Committee have given us
valuable conclusions concerning the effect of nightwork. Continuous nightwork is definitely less
productive than the discontinuous system. The output of the continuous day shift does not make up
for this loss in production.
There is, moreover, a marked difference between the rates of output of night and day shifts on the
discontinuous plan. In each case investigated the inferiority of night labor was definitely
established. This inferiority is evidently the result of the night worker's failure to secure proper
amounts of sleep and rest during the day. The system of continuous shifts, especially for women,
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 be
spent in rest and sleep is certainly as common among men as among women workers and accounts
largely for the loss of efficiency and time on the part of both sexes in nightwork.
The case against nightwork, then, may be said to rest upon several grounds. In the first place, there
are the remotely injurious effects of permanent nightwork manifested in the later years of the
worker's life. Of more immediate importance to the average worker is the disarrangement of his
social life, including the recreational activities of his leisure hours and the ordinary associations of
normal family relations. From an economic point of view, nightwork is to be discouraged because
of its adverse effect upon efficiency and output. A moral argument against nightwork in the case of
women is that the night shift forces the workers to go to and from the factory in 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 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 wage-earning people, and many of them dream of an industrial
order in which there will be no night shift. (Labor Problems, 3rd Edition, pp. 325-328, by Watkins
& Dodd.).

En meritos de lo expuesto, se deniega el recurso de certiorari interpuesto y se confirma la sentencia del

Tribunal De Reclaciones Industriales, con costas a cargo de a recurrente. Asi se ordena.