PT&T Co. v. NLRC, GR No.
118978, May 23, 1997 employment and equality of employment opportunities for all” and Article XIII Section 14
FACTS:
Grace de Guzman was hired by PT&T as a Supernumerary Project Worker for a fixed period
from November 21, 1990 until April 20, 1991 as reliever for C.F. Tenorio who went on
maternity leave. Under the Reliever Agreement signed by Grace, her employment was to be
immediately terminated upon expiration of the agreed period. From June 10, 1991 to July 1,
1991, and from July 19, 1991 to August 8, 1991, PT&T again engaged the services of Grace
as reliever for Erlinda F. Dizon who went on leave during both periods. On September 2,
1991, Grace was asked to join petitioner company as a probationary employee. In the job
application form furnished to Grace, she indicated in the civil status that she was single
although she had in fact contracted marriage on May 26, 1991. This meant she was not
single, as she had represented herself, when she signed the reliever agreements on June
10, 1991 and July 8, 1991. Petitioner dismissed Grace from the company after learning
about Grace’s real civil status and being unconvinced of Grace’s explanation for the
discrepancy. Grace immediately filed a complaint for illegal dismissal coupled with a claim
for non-payment of cost of living allowances (COLA), before the Regional Arbitration Branch
of the National Labor Relations Commission (NLRC) in Baguio City. At the preliminary
conference, Grace volunteered the information that she had failed to remit the amount
of P2,380.75 of her collections, and executed a promissory note for that amount in favor of
petitioner. The Labor Arbiter handed down a decision declaring that private respondent,
who had already gained the status of a regular employee, was illegally dismissed by
petitioner and ordered her reinstatement plus payment of the corresponding back wages
and COLA. On appeal, the NLRC upheld the Labor Arbiter but modified the Labor Arbiter’s
decision with the qualification that Grace de Guzman deserved to be suspended for three
months due to the dishonest nature of her acts which should not be condoned.
ISSUE:
Can the alleged concealment of civil status be a ground for terminating the services of an
employee?
HELD:
No. The Constitution provides a gamut of protective provisions due to the disparity in rights
between men and women in almost all phases of social and political life. Article II Section 14
of the 1987 Constitution states that “The State recognizes the role of women in nation-
building, and shall ensure the fundamental equality before the law of women and men.”
Corollary to this is Article XIII Section 3 which states that “The State shall afford full
protection to labor, local and overseas, organized and unorganized, and promote full
which states that “The State shall protect working women by providing safe and healthful
working conditions, taking into account their maternal functions, and such facilities and
opportunities that will enhance their welfare and enable them to realize their full potential
in the service of the nation.” Since the Labor Code was enacted on May 1, 1974, corrective
labor and social laws on gender inequality have emerged with more frequency in the years.
Two of these are Republic Act No. 6727 which explicitly prohibits discrimination against
women with respect to terms and conditions of employment, promotion, and training
opportunities; and Republic Act No. 7192 or the Women in Development and Nation
Building Act which, among others, affords women equal opportunities with men to act and
to enter into contracts. In the Labor Code, Article 136 explicitly prohibits discrimination
merely by reason of the marriage of a female employee. The private respondent’s act of
concealing the true nature of her status from PT&T could not be properly characterized as
willful or in bad faith as she was moved to act the way she did mainly because she wanted
to retain a permanent job in a stable company. In other words, she was practically forced by
that very same illegal company policy into misrepresenting her civil status for fear of being
disqualified from work.
G.R. No. 170054 : January 21, 2013 GOYA, INC., Petitioner, v. GOYA, INC. EMPLOYEES
UNION-FFW, Respondent.
PERALTA, J.:
FACTS: Petitioner Goya Inc. (Goya) hired contractual employees from PESO Resources
Development Corporation (PESO). This prompted Goya, Inc. Employees Union-FFW (Union)
to request for a grievance conference on the ground that the contractual workers do not
belong to the categories of employees stipulated in their CBA. The Union also argued that
hiring contractual employees is contrary to the union security clause embodied in the CBA.
When the matter remained unresolved, the grievance was referred to the NCMB for
voluntary arbitration. The Union argued that Goya is guilty of ULP for gross violation of the
CBA. The voluntary arbitrator dismissed the Unions charge of ULP but Goya was directed to
observe and comply with the CBA. While the Union moved for partial consideration of the
VA decision, Goya immediately filed a petition for review before the Court of Appeals to set
aside the VAs directive to observe and comply with the CBA commitment pertaining to the
hiring of casual employees. Goya argued that hiring contractual employees is a valid
management prerogative. The Court of Appeals dismissed the petition.
ISSUE: Whether the act of hiring contractual employees is a valid exercise of management
prerogative?
HELD: The petition must fail. LABOR LAW: management prerogative; ULP; collective
bargaining agreement The CA did not commit serious error when it sustained the ruling that
the hiring of contractual employees from PESO was not in keeping with the intent and spirit
of the CBA. In this case, a complete and final adjudication of the dispute between the
parties necessarily called for the resolution of the related and incidental issue of whether
the Company still violated the CBA but without being guilty of ULP as, needless to state, ULP
is committed only if there is gross violation of the agreement. Goya kept on harping that
both the VA and the CA conceded that its engagement of contractual workers from PESO
was a valid exercise of management prerogative. It is confused. To emphasize, declaring
that a particular act falls within the concept of management prerogative is significantly
different from acknowledging that such act is a valid exercise thereof. What the VA and the
CA correctly ruled was that the Companys act of contracting out/outsourcing is within the
purview of management prerogative. Both did not say, however, that such act is a valid
exercise thereof. Obviously, this is due to the recognition that the CBA provisions agreed
upon by Goya and the Union delimit the free exercise of management prerogative
pertaining to the hiring of contractual employees. A collective bargaining agreement is the
law between the parties. A collective bargaining agreement or CBA refers to the negotiated
contract between a legitimate labor organization and the employer concerning wages,
hours of work and all other terms and conditions of employment in a bargaining unit. As in
all contracts, the parties in a CBA may establish such stipulations, clauses, terms and
conditions as they may deem convenient provided these are not contrary to law, morals,
good customs, public order or public policy. Thus, where the CBA is clear and unambiguous,
it becomes the law between the parties and compliance therewith is mandated by the
express policy of the law. As repeatedly held, the exercise of management prerogative is
not unlimited; it is subject to the limitations found in law, collective bargaining agreement
or the general principles of fair play and justice. Petition is DENIED
Case Digest: TAMPCO v. Duclan (March 16, 2016)
G.R. No. 203005
March 14, 2016
DEL CASTILLO, J.:
Facts:
Petitioner Tabuk Multi-Purpose Cooperative, Inc. (TAMPCO) is a duly registered cooperative
based in Tabuk City, Kalinga. It is engaged in the business of obtaining investments from its
members which are lent out to qualified member-borrowers. The two other petitioners are
both officers of TAMPCO.
On the other hand, respondent Duclan, was employed as TAMPCO cashier. One of her
duties as Cashier was to sign checks for release.
In 2002, TAMPCO introduced Special Investment Loans (SILs) to its members and
prospective borrowers. A year after introducing the SIL program, TAMPCO realized that a
considerable amount of the cooperative's loanable funds was being allocated to SILs, which
thus adversely affected its ability to lend under the regular loan program. It further
discovered that single individual borrowings under the SIL program reached precarious
levels, thus placing the resources of the cooperative at risk. Thus, in June 2003, the TAMPCO
BOD issued BA No. 28, putting a cap on SIL borrowings at P5 million. In October of the same
year, BA No. 55 was issued, completely prohibiting the grant of SILs.
Despite issuance of BA Nos. 28 and 55, respondent and the other officers of the cooperative
including its former General Manager, continued to approve and release SILs to borrowers,
among them Falgui and Kotoken, who received millions of pesos in loans in January and
December of 2004, and in January 2005. Eventually, Falgui claimed insolvency, and Kotoken
failed to pay back her loans.
Upon discovery of the said irregularity, TAMPCO BOD initiated an investigation. Respondent
and the other officers who appeared to be responsible were made to explain. Respondent
admitted to her failure to obey BA Nos. 28 & 55 despite knowledge of the directives. Thus,
TAMPCO BOD suspended them from work and were ordered to collect the amount lost by
the cooperative with a threat that should they fail to collect, they would be dismissed.
Respondent failed to collect the amount she was told to collect and thereafter, after notice,
the cooperative dismissed her service.
Thus, respondent filed a complaint for illegal dismissal.
Issue:
Whether or not respondent was dismissed for a just cause.
Ruling:
The dismissal is proper.
Under Article 282 of the Labor Code, the employer may terminate the services of its
employee for the latter's serious misconduct or willful disobedience of its or its
representative's lawful orders. And for willful disobedience to constitute a ground, it is
required that: "(a) the conduct of the employee must be willful or intentional; and (b) the
order the employee violated must have been reasonable, lawful, made known to the
employee, and must pertain to the duties that he had been engaged to discharge.
In releasing loan proceeds to SIL borrowers like Falgui and Kotoken even after the BOD
issued BA Nos. 28 and 55, respondent, and the other cooperative officers, willfully and
repeatedly defied a necessary, reasonable and lawful directive of the cooperative's BOD,
which directive was made known to them and which they were expected to know and
follow as a necessary consequence of their respective positions in the cooperative. They
placed the resources of the cooperative - the hard-earned savings of its members - in a
precarious state as a result of the inability to collect the loans owing to the borrowers'
insolvency or refusal to honor their obligations, Respondent committed gross
insubordination which resulted in massive financial losses to the cooperative. Applying
Article 282, her dismissal is only proper.
In termination proceedings of employees, procedural due process consists of the twin
requirements of notice and hearing. In this case, due process was properly observed since
respondent was given a chance to explain and was informed of the decision after a
thorough investigation.
Respondent cannot question the TAMPCO BOD’s decision as regards the General Manager,
whom the BOD permitted to retire and collect his benefits in full, for such decision is
management’s prerogative on which the courts cannot interfere unless they violate labor
laws, CBA and general principles of fairness & justice
Charlito Peñaranda vs. Baganga Plywood Corp, National Labor Relations Commission
G.R. No. 159577
May 3, 2006
Facts: Sometime in June 1999, Petitioner Charlito Peñaranda was hired as an employee of
Baganga Plywood Corporation (BPC) to take charge of the operations and maintenance of
its steam plant boiler. In May 2001, Peñaranda filed a Complaint for illegal dismissal with
money claims against BPC and its general manager, Hudson Chua, before the NLRC.
After the parties failed to settle amicably, the labor arbiter directed the parties to file their
position papers and submit supporting documents.
Peñaranda alleges that he was employed by respondent Banganga on March 15, 1999 with
a monthly salary of P5,000.00 as Foreman/Boiler Head/Shift Engineer until he was illegally
terminated on December 19, 2000. he alleges that his services were terminated without the
benefit of due process and valid grounds in accordance with law. Furthermore, he was not
paid his overtime pay, premium pay for working during holidays/rest days, night shift
differentials and finally claimed for payment of damages and attorney's fees having been
forced to litigate the present complaint.
Respondent BPC is a domestic corporation duly organized and existing under Philippine laws
and is represented herein by its General Manager HUDSON CHUA, the individual
respondent. Respondents allege that complainant's separation from service was done
pursuant to Art. 283 of the Labor Code. The respondent BPC was on temporary closure due
to repair and general maintenance and it applied for clearance with the Department of
Labor and Employment, Regional Office No. XI, to shut down and to dismiss employees. And
due to the insistence of herein complainant he was paid his separation benefits.
Consequently, when respondent BPC partially reopened in January 2001, Peñaranda failed
to reapply.
The labor arbiter ruled that there was no illegal dismissal and that petitioner's Complaint
was premature because he was still employed by BPC. Petitioner’s money claims for illegal
dismissal was also weakened by his quitclaim and admission during the clarificatory
conference that he accepted separation benefits, sick and vacation leave conversions and
thirteenth month pay.
Issue: Whether or not Peñaranda is a regular, common employee entitled to monetary
benefits under Art. 82 of the Labor Code and is entitled to the payment of overtime pay and
other monetary benefits.
Ruling: The petitioner is not entitled to overtime pay and other monetary benefits.
The Court disagrees with the NLRC's finding that petitioner was a managerial employee.
However, petitioner was a member of the managerial staff, which also takes him out of the
coverage of labor standards. Like managerial employees, officers and member of the
managerial staff are not entitled to the provisions of law on labor standards.
The Implementing Rules of the Labor Code define members of a managerial staff as those
with the following duties and responsibilities:
(1) The primary duty consists of the performance of work directly related to management
policies of the employer;
(2) Customarily and regularly exercise discretion and independent judgment;
(3) (i) Regularly and directly assist a proprietor or a managerial employee whose primary
duty consists of the management of the establishment in which he is employed or
subdivision thereof; or (ii) execute under general supervision work along specialized or
technical lines requiring special training, experience, or knowledge; or (iii) execute under
general supervision special assignments and tasks; and
(4) who do not devote more than 20 percent of their hours worked in a workweek to
activities which are not directly and closely related to the performance of the work
described in paragraphs (1), (2), and (3) above."
The petitioner’s work involves:
1. To supply the required and continuous steam to all consuming units at minimum cost.
2. To supervise, check and monitor manpower workmanship as well as operation of boiler
and accessories.
3. To evaluate performance of machinery and manpower.
4. To follow-up supply of waste and other materials for fuel.
5. To train new employees for effective and safety white working.
6. Recommend parts and suppliers purchases. acEHSI
7. To recommend personnel actions such as: promotion, or disciplinary action.
8. To check water from the boiler, feedwater and softener, regenerate softener if beyond
hardness limit.
9. Implement Chemical Dosing.
10. Perform other task as required by the superior from time to time." 34
The foregoing enumeration, particularly items, 1, 2, 3, 5 and 7 illustrates that petitioner was
a member of the managerial staff. His duties and responsibilities conform to the definition
of a member of a managerial staff under the Implementing Rules.
Petitioner supervised the engineering section of the steam plant boiler. His work involved
overseeing the operation of the machines and the performance of the workers in the
engineering section. This work necessarily required the use of discretion and independent
judgment to ensure the proper functioning of the steam plant boiler. As supervisor,
petitioner is deemed a member of the managerial staff.
Noteworthy, even petitioner admitted that he was a supervisor. In his Position Paper, he
stated that he was the foreman responsible for the operation of the boiler. The term
foreman implies that he was the representative of management over the workers and the
operation of the department. Petitioner's evidence also showed that he was the supervisor
of the steam plant. His classification as supervisors is further evident from the manner his
salary was paid. He belonged to the 10% of respondent's 354 employees who were paid on
a monthly basis; the others were paid only on a daily basis.
ARIEL L. DAVID vs. JOHN G. MACASIO
G.R. No. 195466 JULY 2, 2014
For: overtime pay, holiday pay, 13th month pay and payment for service incentive leave.
Facts:
In January 2009, Macasio filed before the LA a complaint against petitioner Ariel L. David,
doing business under the name and style “Yiels Hog Dealer,” for non-payment of overtime
pay, holiday pay and 13th month pay. He also claimed payment for moral and exemplary
damages and attorney’s fees. Macasio also claimed payment for service incentive leave (SIL)
David claimed that he started his hog dealer business in 2005 and that he only has ten
employees. The LA concluded that as Macasio was engaged on “pakyaw” or task basis, he is
not entitled to overtime, holiday, SIL and 13th month pay. The NLRC affirmed the LA
decision, thus this case reach the CA which says that Macasio is entitled to his monetary
claims following the doctrine laid down in Serrano v. Severino Santos Transit.The CA
explained that as a task basis employee, Macasio is excluded from the coverage of holiday,
SIL and 13th month pay only if he is likewise a “field personnel.”Thus this case reached the
SC.
Issue: Whether or not Macasio is entitled of overtime pay, holiday pay, 13th month pay and
payment for service incentive leave.
Ruling: Yes, in so far as the Holiday and SIL pay is concern. To determine whether workers
engaged on “pakyaw” ortask basis” is entitled to holiday and SIL pay, the presence (or
absence) of employer supervision as regards the worker’s time and performance is the key:
if the worker is simply engaged on pakyaw or task basis, then the general rule is that he is
entitled to a holiday pay and SIL pay unless exempted from the exceptions specifically
provided under Article 94 (holiday pay) and Article 95 (SIL pay) of the Labor Code. However,
if the worker engaged on pakyaw or task basis also falls within the meaning of “field
personnel” under the law, then he is not entitled to these monetary benefits. CA that
Macasio does not fall under the definition of “field personnel.” The CA’s finding in this
regard is supported by the established facts of this case: first, Macasio regularly performed
his duties at David’s principal place of business; second, his actual hours of work could be
determined with reasonable certainty; and, third, David supervised his time and
performance of duties. Since Macasio cannot be considered a “field personnel,” then he is
not exempted from the grant of holiday, SIL pay even as he was engaged on “pakyaw” or
task basis.
However, the governing law on 13th month pay is PD No. 851. As with holiday and SIL pay,
13th month pay benefits generally cover all employees; an employee must be one of those
expressly enumerated to be exempted. Section 3 of the Rules and Regulations
Implementing P.D. No. 851 enumerates the exemptions from the coverage of 13th month
pay benefits. Under Section 3(e), “employers of those who are paid on task basis, and those
who are paid a fixed amount for performing a specific work, irrespective of the time
consumed in the performance thereof are exempted. Note that unlike the IRR of the Labor
Code on holiday and SIL pay, Section 3(e) of the Rules and Regulations Implementing PD No.
851exempts employees "paid on task basis" without any reference to "field personnel." This
could only mean that insofar as payment of the 13th month pay is concerned, the law did
not intend to qualify the exemption from its coverage with the requirement that the task
worker be a "field personnel" at the same time. Thus Macasio is not entitled to 13th month
pay.
Wherefore, the petition was partially granted the petition insofar as the payment of 13th
month pay to respondent is concerned. But all other aspect of the CA’s decision was
affirmed.
SAN JUAN DE DIOS HOSPITAL EMPLOYEES ASSOCIATION v. NLRC GR 126383 | 28
November 1997 (health personnel; hours of work)
FACTS: The officers and members of San Juan De Dios Hospital Employees Association,
herein petitioners, sent a letter requesting and pleading for the expeditious implementation
and payment by respondent San Juan De Dios Hospital of the “40 HOURS/5-DAY
WORKWEEK with compensable weekly two (2) days off” provided for by Republic Act (RA)
5901 (An Act prescribing 40 hours a week of labor for government and private hospitals or
clinic personnel) as clarified for enforcement by the Secretary of Labors Policy Instructions
No. 54. Respondent hospital, however, failed to give a favorable response; thus, petitioners
filed a complaint regarding their claims for statutory benefits under the above-cited law and
policy issuance. The Labor Arbiter dismissed the complaint. Petitioners appealed before
public respondent National Labor Relations Commission (NLRC), which affirmed the Labor
Arbiters decision. Hence, the petitioners filed for petition for certiorari, ascribing grave
abuse of discretion on the part of NLRC in concluding that Policy Instructions No. 54
proceeds from a wrong interpretation of RA 5901and Article 83 of the Labor Code.
ISSUE: Whether Policy Instructions No. 54 issued by the Labor Secretary is valid.
HELD: It is invalid. The Policy Instruction No. 54 relies on and seeks to implement RA 5901,
otherwise known as “An Act Prescribing Forty Hours a Week of Labor for Government and
Private Hospitals or Clinic Personnel,” but reliance to this RA is misplaced since it has long
been repealed with the passage of the Labor Code. Accordingly, only Article 83 of the Labor
Code which appears to have substantially incorporated or reproduced the basic provisions
of RA 5901 may support Policy Instructions No. 54 on which the latter’s validity may be
gauged. What Article 83 merely provides are: (1) the regular office hour of eight hours a
day, five days per week for health personnel, and (2) where the exigencies of service require
that health personnel work for six days or forty-eight hours then such health personnel shall
be entitled to an additional compensation of at least thirty percent of their regular wage for
work on the sixth day. There is nothing in the law that supports the Secretary of Labor’s
assertion that “personnel in subject hospitals and clinics are entitled to a full weekly wage
for seven (7) days if they have completed the 40-hour/5-day workweek in any given
workweek.” Further, petitioners' position is also negated by the very rules and regulations
promulgated by the Bureau of Labor Standards which implement RA 5901. Pertinent
portions of the implementing rules provided in Sections 1, 7, and 15 of the said Act.
Rada vs NLRC
January 9, 1992
Labor Standards
–
Hours of Work
–
OT Pay of a Project Based Employee
Facts:
In 1977, Rada was contracted by Philnor Consultants and Planners, Inc as a driver. He was
assigned to a specific project in Manila.The contract he signed was for 2.3 years. His task
was to drive employees to the project from 7am to 4pm. He was allowed to bring home the
company vehicle in order to provide a timely transportation service to the other project
workers. The project he was assigned to was not completed as scheduled hence, since he
has a satisfactory record, he was re-contracted for an additional 10months. After 10 months
the project was not yet completed. Several contracts thereafter were made until the project
was finished in1985.At the completion of the project, Rada was terminated as his
employment was co-terminous with the project. He later sued Philnor for non payment of
separation pay and overtime pay. He said he is entitled to be paid OT pay because he uses
extra time to get to the project site from his home and from the project site to his home
everyday–in total, he spends an average of 3 hours OT everyday.
ISSUE:
Whether or not Rada is entitled to separation pay and OT pay.
HELD:
Separation pay–NO.
Overtime pay–Yes.
Separation Pay
The SC ruled that Rada was a project employee whose work was coterminous with the
project for which he was 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.'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.'
OT Pay
Rada is entitled to OT pay. 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 Rada'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 Philnor. As embodied in Philnor’s memorandum, they allowed
their drivers to bring home their transport vehicles in order for them to provide a timely
transport service and to avoid delay–not really so that the drivers could enjoy the benefits
of the company vehicles nor for them to save on fair.
Sime Darby Pilipinas, Inc. vs. NLRC 2nd Division and Sime Darby Salaried Employees
Association (ALU-TUCP) G.R. No. 119205. April 15, 1998
FACTS: All company factory workers of Sime Darby Pilipinas, Inc., manufacturer of
automotive tires, tubes and other rubber products, in Marikina including members of
private respondent union, Sime Darby Salaried Employees Association (ALU-TUCP), worked
from 7:45 a.m. to 3:45 p.m. with a 30-minute paid on-call lunch break. On August 14, 1992,
the petitioner issued a memorandum to all factory-based employees advising all its monthly
salaried employees in its Marikina Tire Plant a change in work schedule. The new schedule
extends to 9 hours with two 10-minute paid coffee break and 1-hour unpaid and
undisturbed lunch break. The Warehouse and Quality Assurance Department working on
shifts, are excluded from this change in work schedule.
Private respondent, which is an association of monthly salaried employees of petitioner at
its Marikina factory, filed on behalf of its members a complaint with the Labor Arbiter for
unfair labor practice, discrimination and evasion of liability.
The Labor Arbiter dismissed the complaint on the ground that the change in the work
schedule and the elimination of the 30-minute paid lunch break of the factory workers
constituted a valid exercise of management prerogative and that the new work schedule,
break time and one-hour lunch break did not have the effect of diminishing the benefits
granted to factory workers as the working time did not exceed eight (8) hours.
NLRC sustained the decision of Labor Arbiter but upon motion for reconsideration by
private respondent, the NLRC, having two new commissioners, reversed its earlier decision.
ISSUE: Whether or not the act of management in revising the work schedule of its
employees and eliminating their paid lunch break constitutes unfair labor practice?
RULING: The Court held that the employer has the right to exercise its management
prerogatives. Management is free to regulate, according to its own discretion and
judgment, all aspects of employment, including hiring, work assignments, working methods,
time, place and manner of work, processes to be followed, supervision of workers, working
regulations, transfer of employees, work supervision, lay off of workers and discipline,
dismissal and recall of workers. Management retains the prerogative, whenever exigencies
of the service so require, to change the working hours of its employees. So long as such
prerogative is exercised in good faith for the advancement of the employers interest and
not for the purpose of defeating or circumventing the rights of the employees under special
laws or under valid agreements.
In this case, the new work schedule set by the employer fully complies with the daily work
period of eight (8) hours without violating the Labor Code. Although the old work schedule
included a 30-minute paid lunch break, the employees were on call and could be called
upon to do jobs during lunch break. With the new schedule, they can take one-hour lunch
break without any interruption from their employer.
Moreover, this act was not discriminatory as the new schedule applies to all employees in
the factory similarly situated whether they are union members or not.
Pal Employees Savings and Loan Association, Inc. vs. NLRC
August 22, 1996
G.R. No. 105963
Panganiban, J.
Facts: The respondent used to be a security guard under the employ of the petitioner
company. He works for 12 hours a day and is receiving a monthly salary. He was then
dismissed by the petitioner company. Because of this, the respondent filed a complaint with
the Labor Arbiter for the payment of his overtime pay. The Labor Arbiter ruled that the
respondent is entitled to an overtime pay. The NLRC affirmed the decision of the Labor
Arbiter. Hence, the current petition.
The petitioner contends that the fact that the monthly salary of the petitioner is higher than
the minimum wage provided by law is already compensatory of the excess of 4 hours of
work rendered by the said employee. It argues that the salary of the petitioner already
includes the payment for the excess of 4 hours of work rendered by the respondent. It also
contends that since there is a meeting of the minds between the respondent and the
petitioner, there is already a perfected contract which means that the parties are bound by
their agreements.
Issue: Whether or not the respondent is entitled to an overtime pay.
Ruling: The Supreme Court ruled that the respondent is entitled to an overtime pay. The
contention of the petitioner that since the respondent’s monthly salary is higher than the
minimum wage, it is already commensurate of the 4 hours excess of work rendered by the
respondent. The Supreme Court held that the fact that one’s salary is higher than the
minimum wage does not in any way offset the other benefits that are due to the
employees, in the absence of an agreement to the contrary. To consider the overtime pay
of the respondent included in his monthly salary would be in contravention of the rule
against non-diminution of benefits and a violation of the Labor Code since it prescribes a
certain manner on how overtime pay is included. Moreover, the Supreme Court found that
contrary to what the petitioner aver, as shown in the computation of the petitioner itself,
the monthly salary of the respondent is only a basic salary which is exclusive of all the other
benefits that the respondent is to receive.
With regard to the petitioner’s second contention that there is already a perfected contract,
hence the terms and conditions imposed therein binds the parties to the contract, the
Supreme Court held that while such contention has the weight and force of law, it is still
subject to certain exception. The general right to contract is subject to a limitation that such
terms and conditions must not be contrary to law, public order, public policy, morals and
good customs. Employment contracts are imbued with public interest and are therefore
subject to the police power of the state. The subject contract in the case at bar is contrary
to labor laws. Therefore, not binding to the parties of the case.
Lagatic v NLRC
G.R. No. 121004 January 28, 1998
Facts:
Petitioner Romeo Lagatic was employed in May 1986 by Cityland, first as a probationary
sales agent, and later on as a marketing specialist. He was tasked with soliciting sales for the
company, with the corresponding duties of accepting call-ins, referrals, and making client
calls and cold calls. Cold calls refer to the practice of prospecting for clients through the
telephone directory. Cityland, believing that the same is an effective and cost-efficient
method of finding clients, requires all its marketing specialists to make cold calls. The
number of cold calls depends on the sales generated by each: more sales mean less cold
calls. Likewise, in order to assess cold calls made by the sales staff, as well as to determine
the results thereof, Cityland requires the submission of daily progress reports on the same.
On October 22, 1991, Cityland issued a written reprimand to petitioner for his failure to
submit cold call reports for September 10, October 1 and 10, 1991. This notwithstanding,
petitioner again failed to submit cold call reports for September 2, 5, 8, 10, 11, 12, 15, 17,
18, 19, 20, 22, and 28, as well as for October 6, 8, 9, 10, 12, 13 and 14, 1992. Petitioner was
required to explain his inaction, with a warning that further non-compliance would result in
his termination from the company. In a reply dated October 18, 1992, petitioner claimed
that the same was an honest omission brought about by his concentration on other aspects
of his job. Cityland found said excuse inadequate and, on November 9, 1992, suspended
him for three days, with a similar warning.
Notwithstanding the aforesaid suspension and warning, petitioner again failed to submit
cold call reports for February 5, 6, 8, 10 and 12, 1993. He was verbally reminded to submit
the same and was even given up to February 17, 1993 to do so. Instead of complying with
said directive, petitioner, on February 16, 1993, wrote a note, "TO HELL WITH COLD CALLS!
WHO CARES?" and exhibited the same to his co-employees. To worsen matters, he left the
same lying on his desk where everyone could see it.
On February 23, 1993, petitioner received a memorandum requiring him to explain why
Cityland should not make good its previous warning for his failure to submit cold call
reports, as well as for issuing the written statement aforementioned. On February 24, 1993,
he sent a letter-reply alleging that his failure to submit cold call reports should trot be
deemed as gross insubordination. He denied any knowledge of the damaging statement,
"TO HELL WITH COLD CALLS!"
Finding petitioner guilty of gross insubordination, Cityland served a notice of dismissal upon
him on February 26, 1993. Aggrieved by such dismissal, petitioner filed a complaint against
Cityland for illegal dismissal, illegal deduction, underpayment, overtime and rest day pay,
damages and attorney's fees. The labor arbiter dismissed the petition for lack of merit. On
appeal, the same was affirmed by the NLRC; hence the present recourse.
Issue:
W/N NLRC gravely abused its discretion in not finding that petitioner was illegally
dismissed?
Whether or not he was entitled to separation pay, premium pay, and overtime pay
Held:
The petition lacks merit. To constitute a valid dismissal from employment, two requisites
must be met, namely: (1) the employee must be afforded due process, and (2) the dismissal
must be for a valid cause.
Employers may, thus, make reasonable rules and regulations for the government of their
employees, and when employees, with knowledge of an established rule, enter the service,
the rule becomes a part of the contract of employment. It is also generally recognized that
company policies and regulations, unless shown to be grossly oppressive or contrary to law,
are generally valid and binding on the parties and must be complied with. Corollarily, an
employee may be validly dismissed for violation of a reasonable company rule or regulation
adopted for the conduct of the company business. An employer cannot rationally be
expected to retain the employment of a person whose . . . lack of regard for his employer's
rules . . . has so plainly and completely been bared." 5 Petitioner's continued infraction of
company policy requiring cold call reports, as evidenced by the 28 instances of non-
submission of aforesaid reports, justifies his dismissal.
With the finding that petitioner's dismissal was for a just and valid cause, his claims for
moral and exemplary damages, as well as attorney's fees, must fail. Resolution is AFFIRMED
and this petition is hereby DISMISSED for lack of merit. Costs against petitioner.
SO ORDERED.
Interphil Laboratories Employees Union, et.al. v. Interphil Laboratories, Inc., and Sec. of
Labor
G.R. No. 142824. 19 December 2001. Justice Kapunan
TOPIC: Twelve-Hour Work Shift With Overtime
FACTS:
 Interphil Lab Employees Union is the sole and exclusive bargaining agent of the
rank-and-file employees of Interphil Lab (company engaged in manufacturing and
packaging pharmaceutical products). They had a CBA from 1990-1993. Nearing
the expiry, the officers of the union asked Salazar, the VP for HR, many times
whether they were amenable to make a new CBA. Salazar declared that the
company could not make a decision at the moment.
 The very next day after that declaration, workers having a 2 straight 12-hour
shifts, decided that after working 8 hours per shift company conducted an
overtime boycott.
 Upon inquiry by Salazar for the boycott, he was told to ask the union officers. At a
meeting, Gonzales, a union director, told Salazar that the employees would only
return to their normal work schedule if the company would agree to their
demands as to the effectivity and duration of the new CBA. Salazar declared that
such agreement could only be conducted through formal negotiations.
Dissatisfied, workers proceeded with the strike.
 The employees also engaged in a work slowdown campaign – which delayed the
production of the company. Then, the company submitted its CBA proposal, and
the union its counter-proposal.
 The company filed with the NLRC a petition to declare illegal petitioner union’s
overtime boycott and work slowdown, which the company claimed to amount to
illegal strike.
 At mediation in the National Conciliation and Mediation Board, the parties failed
to arrive to an agreement.
 The union filed with the NCMB a Notice of Strike citing unfair labor practice – they
did eventually stage a strike.
 The Sec. of Labor assumed jurisdiction and the company was ordered to accept
the striking workers, while the union was directed to comply with the return-to-
work orders.
 Eventually, in the hearing in the LA, which was recommended to the Sec. of Labor,
resulted in an Order stating: (1) The OT Boycott and Work Slowdown were
declared as illegal strike; (2) Declared the union officers to have lost their
employment; and (3) Found the company guilty of unfair labor practice for
violating the then existing CBA. MR denied, CA dismissed appeal of the union.
 Union is contending that the CBA stated working hours to be 8 hours, and that the
regular working hours is 7:30am-4:30pm. But there is a however clause which
allows the company to change the prevailing work time at its discretion.
ISSUE:
Whether or not the working hours contained in the CBA should be the controlling evidence
of the work hours.
HELD:
No, petition denied. In resolving the case, the Supreme Court held that it is evident that the
working hours may be changed, at the discretion of the company, should such change be
necessary for its operations, and that the employees shall observe such rules as have been
laid down by the company.
In the case at bar, the LA found that the company had to adopt a continuous 24-hour work
daily schedule by reason of the nature of its business and the demands of the clients. It was
established that the employees adhered to the said work schedule since 1988. The
employees are deemed to have waived the 8-hour schedule since they followed, without
any question or complaint, the 2-shift schedule while their CBA was still in force and even
prior thereto. The 2-shift schedule effectively changed the working hours stipulated in the
CBA. As the employees assented by practice to this arrangement, they cannot now be heard
to claim that the OT boycott is justified because they were not obliged to work beyond the 8
hours.
G.R. No. L-30452 September 30, 1982
MERCURY DRUG CO., INC., petitioner,
vs.
NARDO DAYAO, ET AL., respondents,
Facts:
The respondents filed a petition against the petitioner praying: 1) payment of their unpaid
back wages for work done on Sundays and legal holidays plus 25c/c additional
compensation from date of their employment up to June 30, 1962; 2) payment of extra
compensation on work done at night; 3) reinstatement of Januario Referente and Oscar
Echalar to their former positions with back salaries; and, as against the respondent union,
for its disestablishment and the refund of all monies it had collected from petitioners.
The respondent court rendered its decision that:
1. The claim of the petitioners for payment of back wages correspoding to the first four
hours work rendered on every other Sunday and first four hours on legal holidays should be
denied for lack of merit;
2. Respondent Mercury Drug Company, Inc. is hereby ordered to pay the sixty- nine (69)
petitioners: (a) An additional sum equivalent to 25% of their respective basic or regular
salaries for services rendered on Sundays and legal holidays during the period from March
20, 1961 up to June 30, 1962; and (b) Another additional sum or premium equivalent to
25% of their respective basic or regular salaries for nighttime services rendered from March
20, 1961 up to June 30, 1962; and
3. Petitioners' petition to convert them to monthly employees should be, as it is hereby,
denied for lack of merit. Not satisfied with the decision, the respondents filed a motion for
its reconsideration. The motion for reconsideration, was however, denied by the Court en
banc.
Issues:
a.Whether or not private respondent is entitled to claims for 25% additional compensation
performing work during Sunday and legal holidays.
b.Whether or not the 25% compensation had already been included in the private
respondents monthly salaries.
c.Whether or not the contracts of employment were null and void was not put in issue,
hence, the respondent court pursuant to the Rules of Court should have refrained from
ruling that such contracts of employment were null and void.
Held:
The Supreme Court dismissed the petition. On the first issue, based on Sec. 4 CA No. 444,
No person, firm or corporation, business establishment or place of 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.
In this case, the petitioner does not fall on exemptions. On the second issue, their 25%
additional compensation for work done on Sundays and Legal Holidays were not included in
their respective monthly salaries. The petitioner contention was not supported by
substantial evidence.
The last issue, the Mercury Drug Co., Inc., maintains a chain of drugstores that are open
every day of the week and, for some stores, up to very late at night because of the nature of
the pharmaceutical retail business. The respondents knew that they had to work Sundays
and holidays and at night, not as exceptions to the rule but as part of the regular course of
employment. Presented with contracts setting their compensation on an annual basis with
an express waiver of extra compensation for work on Sundays and holidays, the workers did
not have much choice. T
he private respondents were at a disadvantage insofar as the contractual relationship was
concerned. Workers in our country do not have the luxury or freedom of declining job
openings or filing resignations even when some terms and conditions of employment are
not only onerous and inequitous but illegal.
It is precisely because of this situation that the framers of the Constitution embodied the
provisions on social justice (Section 6, Article 11) and protection to labor (Section 9, Article I
I) in the Declaration of Principles And State Policies.
National Semiconductor Distribution, Ltd., petitioner,
vs NLRC and Edgar Philip Santos, respondents
Ponente: Bellosillo
Issue: (1) Who has the burden of providing a claim for night shift differential pay, the
worker who claims not to have been paid night shift differentials, or the employer in
custody of pertinent documents which would prove the fact of payment of the same? (2)
Were the requirements of due process substantially complied with in dismissing the
worker?
Facts:
NSC a foreign corporation licensed to do business in the Phil. manufactures and assembles
electronic parts for export in mactan, lapu-lapu city. Santos was employed by NSC as a
technicioan in its special products group assigned to the graveyard shift from 10pm-6am.
On January 8, 1993 Santos did not report for work on his shift. He resumed his duties as
night shift on January 9. However, at the end of his shift, he made 2 entries in his DTR to
make it appear that he worked on both the 8th and 9th.
His supervisor Limisiaco, received the report that there was no technician in the graveyard
shift on January 8. Limsiaco then checked the DTRs and found out that Santos did not report
on 8th and have found in the DTR the otherwise.
Informal investigation were conducted by management and have required Santos to explain
in writing why no disciplinary action should be taken against him for dishonesty, falsifying
DTR and violation of company rules. Santos explain that he was sick on the 8th and his DTR
was a mere oversight or carelessness on his part.
Not satisfied with the explanation, NSC dismissed Santos for the violations made. Santos
then filed a complaint for illegal dismissal and non-payment of wages and other money
claims.
Labor arbiter found that Santos was dismissed on legal grounds although he was not
afforded due process, ordering NSC to indemnify him and the unpaid night shift
differentials.
NSC appealed to NLRC, but NLRC affirmed the labor arbiter holding that the conclusions
were sufficiently supported by the evidence.
NSC now imputes grave abuse of discretion to NLRC in affirming the labor arbiter.
Contending that the night shift differentials were never raised as an issue nor pusued by
Santos; also denied that Santos was not given due process because he was afforded ample
opportunity to be heard.
Issues: (1) Was Santos illegally dismissed? (2) Santos entitled for the money claims?
Ruling:
The fact that Santos neglected to substantiate his claim for night shift differentials is not
prejudicial to his cause. After all, the burden of proving payment rests on petitioner NSC.
Santos' allegation of non-payment of this benefit, to which he is by law entitled, is a
negative allegation which need not be supported by evidence unless it is an essential part of
his cause of action. It must be noted that his main cause of action is his illegal dismissal, and
the claim for night shift differential is but an incident of the protest against such dismissal.
Thus, the burden of proving that payment of such benefit has been made rests upon the
party who will suffer if no evidence at all is presented by either party. By choosing not to
fully and completely disclose information to prove that it had paid all the night shift
differentials due to private respondent, petitioner failed to discharge the burden of proof.
On the issue of due process, we agree with petitioner that Santos was accorded full
opportunity to be heard before he was dismissed.
The essence of due process is simply an opportunity to be heard, or as applied to
administrative proceedings, an opportunity to explain one's side. In the instant case,
petitioner furnished private respondent notice as to the particular acts which constituted
the ground for his dismissal. By requiring him to submit a written explanation within 48
hours from receipt of the notice, the company gave him the opportunity to be heard in his
defense. Private respondent availed of this chance by submitting a written explanation.
Furthermore, investigations on the incident were actually conducted.
Finally, private respondent was notified on 14 January 1993 of the management's decision
to terminate his services.
Thus, it is clear the minimum requirements of due process have been fulfilled by petitioner.
Petition Dismissed.
G.R. No. L-65482 December 1, 1987
JOSE RIZAL COLLEGE, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION AND NATIONAL ALLIANCE OF
TEACHERS/OFFICE WORKERS, respondents.
Facts:
Petitioner is a non-stock, non-profit educational institution duly organized and existing
under the laws of the Philippines.
Private respondent National Alliance of Teachers and Office Workers (NATOW) in behalf of
the faculty and personnel of Jose Rizal College filed a complaint against the college for said
alleged non-payment of holiday pay from 1975 to 1977.
Labor Arbiter:
1. The faculty and personnel of the respondent Jose Rizal College who are paid their
salary by the month uniformly in a school year, irrespective of the number of
working days in a month, without deduction for holidays, are presumed to be
already paid the 10 paid legal holidays and are no longer entitled to separate
payment for the said regular holidays;
2. The personnel of the respondent Jose Rizal College who are paid their wages daily
are entitled to be paid the 10 unworked regular holidays according to the
pertinent provisions of the Rules and Regulations Implementing the Labor Code;
3. Collegiate faculty of the respondent Jose Rizal College who by contract are paid
compensation per student contract hour are not entitled to unworked regular
holiday pay considering that these regular holidays have been excluded in the
programming of the student contact hours.
NLRC: Teaching personnel paid by the hour are entitled to holiday pay
Issue:
Whether or not the school faculty who according to their contracts are paid per lecture
hour are entitled to unworked holiday pay.
Held:
No. The provisions in the Labor Code as to holiday pay do not apply in this case.
Subject holiday pay is provided for in the Labor Code (Presidential Decree No. 442, as
amended), which reads:
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;
(b) The employer may require an employee to work on any holiday but such employee shall
be paid a compensation equivalent to twice his regular rate; … “
and in the Implementing Rules and Regulations, Rule IV, Book III, which reads:
SEC. 8. Holiday pay of certain employees. — (a) Private school teachers, including faculty
members of colleges and universities, may not be paid for the regular holidays during
semestral vacations. They shall, however, be paid for the regular holidays during Christmas
vacations. …
The aforementioned implementing rule is not justified by the provisions of the law which
after all is silent with respect to faculty members paid by the hour. Regular holidays
specified as such by law are known to both school and faculty members as no class days;”
certainly the latter do not expect payment for said unworked days, and this was clearly in
their minds when they entered into the teaching contracts.
On the other hand, both the law and the Implementing Rules governing holiday pay are
silent as to payment on Special Public Holidays.
It is readily apparent that the declared purpose of the holiday pay which is the prevention of
diminution of the monthly income of the employees on account of work interruptions is
defeated when a regular class day is cancelled on account of a special public holiday and
class hours are held on another working day to make up for time lost in the school calendar.
Otherwise stated, the faculty member, although forced to take a rest, does not earn what
he should earn on that day. Be it noted that when a special public holiday is declared, the
faculty member paid by the hour is deprived of expected income, and it does not matter
that the school calendar is extended in view of the days or hours lost, for their income that
could be earned from other sources is lost during the extended days. Similarly, when classes
are called off or shortened on account of typhoons, floods, rallies, and the like, these faculty
members must likewise be paid, whether or not extensions are ordered.
SC Decision:
(a) exempting petitioner from paying hourly paid faculty members their pay for regular
holidays, whether the same be during the regular semesters of the school year or during
semestral, Christmas, or Holy Week vacations;
(b) but ordering petitioner to pay said faculty members their regular hourly rate on days
declared as special holidays or for some reason classes are called off or shortened for the
hours they are supposed to have taught, whether extensions of class days be ordered or
not; in case of extensions said faculty members shall likewise be paid their hourly rates
should they teach during said extensions.
San Miguel Corporation vs. Court of Appeals
G.R. No. 146775
January 30, 2002
Facts: On 17 October 1992, the Department of Labor and Employment conducted a routine
inspection in the premises of San Miguel Corporation in Sta. Filomena, Iligan City. In the
course of the inspection, it was discovered that there was underpayment by SMC of regular
Muslim holiday pay to its employees. DOLE sent a copy of the inspection result to SMC and
it was received by and explained to its personnel officer Elena dela Puerta.
SMC contested the findings and DOLE conducted summary hearings on 19 November 1992,
28 May 1993 and 4 and 5 October 1993. Still, SMC failed to submit proof that it was paying
regular Muslim holiday pay to its employees. Hence, Director IV of DOLE Iligan District Office
issued a compliance order directing SMC to consider Muslim holidays as regular holidays
and to pay both its Muslim and non-Muslim employees holiday pay within thirty (30) days
from the receipt of the order. SMC appealed but it was dismissed.
Issue: Whether or not the employees are entitled with regular Muslim holiday pay.
Ruling: The employees are entitled to regular Muslim holiday pay. Muslim holidays are
provided under Articles 169 and 170, Title I, Book V, of Presidential Decree No. 1083,
otherwise known as the Code of Muslim Personal Laws, which states: Official Muslim
holidays. — The following are hereby recognized as legal Muslim holidays:
(a) 'Amun Jadîd (New Year), which falls on the first day of the first lunar month of
Muharram;
(b) Maulid-un-Nabî (Birthday of the Prophet Muhammad), which falls on the twelfth day of
the third lunar month of Rabi-ul-Awwal,
(c) Lailatul Isrâ Wal Mi'râj (Nocturnal Journey and Ascension of the Prophet Muhammad),
which falls on the twenty-seventh day of the seventh lunar month of Rajab:
(d) 'Îd-ul-Fitr (Hari Raya Puasa), which falls on the first day of the tenth lunar month of
Shawwal, commemorating the end of the fasting season; and
(e) 'Îd-ul-Adhâ (Hari Raya Haji),which falls on the tenth day of the twelfth lunar month of
Dhû'l-Hijja.
Art. 170 provides the provinces and cities where officially observed. — (1) Muslim holidays
shall be officially observed in the Provinces of Basilan, Lanao del Norte, Lanao del Sur,
Maguindanao, North Cotabato, Iligan, Marawi, Pagadian, and Zamboanga and in such other
Muslim provinces and cities as may hereafter be created; (2) Upon proclamation by the
President of the Philippines, Muslim holidays may also be officially observed in other
provinces and cities.
The foregoing provisions should be read in conjunction with Article 94 of the Labor Code,
which provides: 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; (b) The employer may require an employee to work on any holiday
but such employee shall be paid a compensation equivalent to twice his regular rate;
However, there should be no distinction between Muslims and non-Muslims as regards
payment of benefits for Muslim holidays. The Court reminds the respondent-appellant that
wages and other emoluments granted by law to the working man are determined on the
basis of the criteria laid down by laws and certainly not on the basis of the worker's faith or
religion.
At any rate, Article 3(3) of Presidential Decree No. 1083 also declares that ". . . nothing
herein shall be construed to operate to the prejudice of a non-Muslim." In addition, the
1999 Handbook on Workers' Statutory Benefits states considering that all private
corporations, offices, agencies, and entities or establishments operating within the
designated Muslim provinces and cities are required to observe Muslim holidays, both
Muslim and Christians working within the Muslim areas may not report for work on the
days designated by law as Muslim holidays.
G.R. No. 114698 July 3, 1995
Wellington Investment vs Trajano
Facts:
Upon an inspection of the Wellington Flour Mills, owned and operated by petitioner, the
latter was accused of non-payment of regular holidays falling on a Sunday for monthly-paid
employees.
Petitioner’s Arguments:
1. Monthly salary of the monthly-paid employees already includes holiday pay for all
the regular holidays.
2. To pay for the extra days (regular holidays on a Sunday), as compelled by the
Order of the DOLE, it is in effect being compelled to pay for alleged extra working
days.
DOLE’s Contentions:
1. Regular holidays falling on Sundays have precluded the enjoyment by the
employees of a non-working day and the employees consequently have to work
for additional days.
2. When a regular holiday falls on a Sunday, an extra or additional working day is
created and the employer has the obligation to pay its employees for the extra
day.
Issue: Whether or not a monthly-paid employee is entitled to an additional pay aside from
his usual holiday pay, whenever a regular holiday falls on a Sunday.
Held:
No.
To agree with DOLE’s theory would increase the number of days in a year, instead of 365
days, as basis for computation of salary for monthly-paid employees. There is no provision
of law requiring employers to make adjustments in the monthly salary rate set by them to
take account of the legal holiday falling on Sundays or to reckon a year at more than 365
days.
Cesar Odango vs. NLRC and Antique Electric Cooperative, Inc.
G.R. No.147420. June 10, 2004
Facts: Petitioners are monthly-paid employees of ANTECO whose workdays are from
Monday to Friday and half of Saturday. After a routine inspection, the Regional Branch of
the Department of Labor and Employment found ANTECO liable for underpayment of the
monthly salaries of its employees. On September 1989, the DOLE directed ANTECO to pay
its employees wage differentials amounting to P1,427,412.75. ANTECO failed to pay. On
various dates in 1995, thirty-three (33) monthly-paid employees filed complaints with the
NLRC praying for payment of wage differentials, damages and attorney’s fees.
On November 1996, the Labor Arbiter rendered a Decision in favor of petitioners granting
them wage differentials amounting to P1,017,507.73 and attorney’s fees of 10%. ANTECO
appealed the Decision to the NLRC where it reversed the Labor Arbiter’s Decision. The NLRC
denied petitioners’ motion for reconsideration. Petitioners then elevated the case to CA
where it dismissed the petition for failure to comply with Section 3, Rule 46 of the Rules of
Court. The Court of Appeals explained that petitioners failed to allege the specific instances
where the NLRC abused its discretion. The appellate court denied petitioners’ motion for
reconsideration. Hence, this petition.
Issue: Whether or not the petitioners are entitled to money claims.
Ruling: The Court ruled that the petitioners are not entitled to money claims or wage
differentials.
The petitioners claim is based on Section 2, Rule IV, Book III of the Implementing Rules and
Policy Instructions No. 9 issued by the Secretary of Labor which was declared null and void
since in the guise of clarifying the Labor Code’s provisions on holiday pay, they in effect
amended them by enlarging the scope of their exclusion.
Even assuming that Section 2, Rule IV of Book III is valid, their claim will still fail. The basic
rule in this jurisdiction is "no work, no pay." The right to be paid for un-worked days is
generally limited to the ten legal holidays in a year. Petitioners’ claim is based on a mistaken
notion that Section 2, Rule IV of Book III gave rise to a right to be paid for un-worked days
beyond the ten legal holidays. Petitioners’ line of reasoning is not only a violation of the "no
work, no pay" principle, it also gives rise to an invidious classification, a violation of the
equal protection clause.
Autobus Transport System vs. Antonio Bautista
G.R. No. 156364
May 16, 2005
Facts: Respondent Antonio Bautista has been employed by petitioner Auto Bus Transport
Systems, Inc., since May 1995, as driver-conductor with travel routes Manila-Tuguegarao via
Baguio, Baguio-Tuguegarao via Manila and Manila-Tabuk via Baguio. Respondent was paid
on commission basis, seven percent (7%) of the total gross income per travel, on a twice a
month basis.
On January 2000, while respondent was driving Autobus No. 114 along Sta. Fe, Nueva
Vizcaya, the bus he was driving accidentally bumped the rear portion of Autobus No. 124, as
the latter vehicle suddenly stopped at a sharp curve without giving any warning.
Respondent averred that the accident happened because he was compelled by the
management to go back to Roxas, Isabela, although he had not slept for almost twenty-four
(24) hours, as he had just arrived in Manila from Roxas, Isabela.
Respondent further alleged that he was not allowed to work until he fully paid the amount
of P75,551.50, representing thirty percent (30%) of the cost of repair of the damaged buses
and that despite respondent's pleas for reconsideration, the same was ignored by
management. After a month, management sent him a letter of termination. Thus, on 02
February 2000, respondent instituted a Complaint for Illegal Dismissal with Money Claims
for nonpayment of 13th month pay and service incentive leave pay against Autobus.
On 29 September 2000, based on the pleadings and supporting evidence presented by the
parties, Labor Arbiter decided that the complaint be dismissed where the respondent must
pay to the complainant
Issue: Whether or not respondent is entitled to service incentive leave.
Ruling: The respondent is entitled to service incentive leave.
The disposition of the issue revolves around the proper interpretation of Article 95 of the
Labor Code vis-à-vis Section 1(D), Rule V, Book III of the Implementing Rules and
Regulations of the Labor Code which provides: 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 leave of five days with pay.
Moreover, Book III, Rule V: SERVICE INCENTIVE LEAVE also states that this rule shall apply to
all employees except: (d) Field personnel and other employees whose performance is
unsupervised by the employer including those who are engaged on task or contract basis,
purely commission basis, or those who are paid in a fixed amount for performing work
irrespective of the time consumed in the performance thereof;
A careful examination of said provisions of law will result in the conclusion that the grant of
service incentive leave has been delimited by the Implementing Rules and Regulations of
the Labor Code to apply only to those employees not explicitly excluded by Section 1 of Rule
V. According to the Implementing Rules, Service Incentive Leave shall not apply to
employees classified as "field personnel."
The phrase "other employees whose performance is unsupervised by the employer" must
not be understood as a separate classification of employees to which service incentive leave
shall not be granted. Rather, it serves as an amplification of the interpretation of the
definition of field personnel under the Labor Code as those "whose actual hours of work in
the field cannot be determined with reasonable certainty."
The same is true with respect to the phrase "those who are engaged on task or contract
basis, purely commission basis." Said phrase should be related with "field personnel,"
applying the rule on ejusdem generis that general and unlimited terms are restrained and
limited by the particular terms that they follow. Hence, employees engaged on task or
contract basis or paid on purely commission basis are not automatically exempted from the
grant of service incentive leave, unless, they fall under the classification of field personnel.
What must be ascertained in order to resolve the issue of propriety of the grant of service
incentive leave to respondent is whether or not he is a field personnel.
According to Article 82 of the Labor Code, "field personnel" shall refer to non-agricultural
employees who regularly perform their duties away from the principal place of business or
branch office of the employer and whose actual hours of work in the field cannot be
determined with reasonable certainty. This definition is further elaborated in the Bureau of
Working Conditions (BWC), Advisory Opinion to Philippine Technical-Clerical Commercial
Employees Association 10 which states that:
As a general rule, field personnel are those whose performance of their job/service is not
supervised by the employer or his representative, the workplace being away from the
principal office and whose hours and days of work cannot be determined with reasonable
certainty; hence, they are paid specific amount for rendering specific service or performing
specific work. If required to be at specific places at specific times, employees including
drivers cannot be said to be field personnel despite the fact that they are performing work
away from the principal office of the employee.
At this point, it is necessary to stress that the definition of a "field personnel" is not merely
concerned with the location where the employee regularly performs his duties but also with
the fact that the employee's performance is unsupervised by the employer. As discussed
above, field personnel are those who regularly perform their duties away from the principal
place of business of the employer and whose actual hours of work in the field cannot be
determined with reasonable certainty. Thus, in order to conclude whether an employee is a
field employee, it is also necessary to ascertain if actual hours of work in the field can be
determined with reasonable certainty by the employer. In so doing, an inquiry must be
made as to whether or not the employee's time and performance are constantly supervised
by the employer. Respondent is not a field personnel but a regular employee who performs
tasks usually necessary and desirable to the usual trade of petitioner's business.
Accordingly, respondent is entitled to the grant of service incentive leave.
The clear policy of the Labor Code is to grant service incentive leave pay to workers in all
establishments, subject to a few exceptions. Section 2, Rule V, Book III of the Implementing
Rules and Regulations provides that "every employee who has rendered at least one year of
service shall be entitled to a yearly service incentive leave of five days with pay."
Service incentive leave is a right which accrues to every employee who has served "within
12 months, whether continuous or broken reckoned from the date the employee started
working, including authorized absences and paid regular holidays unless the working days in
the establishment as a matter of practice or policy, or that provided in the employment
contracts, is less than 12 months, in which case said period shall be considered as one year."
It is also "commutable to its money equivalent if not used or exhausted at the end of the
year." In other words, an employee who has served for one year is entitled to it. He may use
it as leave days or he may collect its monetary value. To limit the award to three years, as
the solicitor general recommends, is to unduly restrict such right.
Serrano vs Severino Santos Transit
GR 187698
Facts:
After 14 years of service or on July 14, 2006, petitioner applied for optional retirement from
the company whose representative advised him that he must first sign the already prepared
Quitclaim before his retirement pay could be released. As petitioner’s request to first go
over the computation of his retirement pay was denied, he signed the Quitclaim on which
he wrote “U.P.” (under protest) after his signature, indicating his protest to the amount of
P75,277.45 which he received, computed by the company at 15 days per year of service.
Petitioner soon after filed a complaint, alleging that the company erred in its computation
since under Republic Act No. 7641, otherwise known as the Retirement Pay Law, his
retirement pay should have been computed at 22.5 days per year of service to include the
cash equivalent of the 5-day service incentive leave (SIL) and 1/12 of the 13th month pay
which the company did not.
The company maintained, however, that the Quitclaim signed by petitioner barred his claim
and, in any event, its computation was correct since petitioner was not entitled to the 5-day
SIL and pro-rated 13th month pay for, as a bus conductor, he was paid on commission basis.
Issue: WON 22.5 days retirement pay per year of service is the correct formula.
Held:
Republic Act No. 7641 which was enacted on December 9, 1992 amended Article 287 of the
Labor Code by providing for retirement pay to qualified private sector employees in the
absence of any retirement plan in the establishment. The pertinent provision of said law
reads:
Section 1. Article 287 of Presidential Decree No. 442, as amended, otherwise known as the
Labor Code of the Philippines, is hereby amended to read as follows:
In the absence of a retirement plan or agreement providing for retirement benefits of
employees in the establishment, an employee upon reaching the age of sixty (60) years or
more, but not beyond sixty-five (65) years which is hereby declared the compulsory
retirement age, who has served at least five (5) years in the said establishment, may retire
and shall be entitled to retirement pay equivalent to at least one-half (1/2) month salary for
every year of service, a fraction of at least six (6) months being considered as one whole
year.
Unless the parties provide for broader inclusions, the term one-half (1/2) month salary shall
mean fifteen (15) days plus one-twelfth (1/12) of the 13th month pay and the cash
equivalent of not more than five (5) days of service incentive leaves.
Admittedly, petitioner worked for 14 years for the bus company which did not adopt any
retirement scheme. Even if petitioner as bus conductor was paid on commission basis then,
he falls within the coverage of R.A. 7641 and its implementing rules. As thus correctly ruled
by the Labor Arbiter, petitioner’s retirement pay should include the cash equivalent of the
5-day SIL and 1/12 of the 13th month pay.
ARIEL L. DAVID vs. JOHN G. MACASIO
G.R. No. 195466 JULY 2, 2014
For: overtime pay, holiday pay, 13th month pay and payment for service incentive leave.
Facts:
In January 2009, Macasio filed before the LA a complaint against petitioner Ariel L. David,
doing business under the name and style “Yiels Hog Dealer,” for non-payment of overtime
pay, holiday pay and 13th month pay. He also claimed payment for moral and exemplary
damages and attorney’s fees. Macasio also claimed payment for service incentive leave (SIL)
David claimed that he started his hog dealer business in 2005 and that he only has ten
employees. The LA concluded that as Macasio was engaged on “pakyaw” or task basis, he is
not entitled to overtime, holiday, SIL and 13th month pay. The NLRC affirmed the LA
decision, thus this case reach the CA which says that Macasio is entitled to his monetary
claims following the doctrine laid down in Serrano v. Severino Santos Transit.The CA
explained that as a task basis employee, Macasio is excluded from the coverage of holiday,
SIL and 13th month pay only if he is likewise a “field personnel.”Thus this case reached the
SC.

Issue: Whether or not Macasio is entitled of overtime pay, holiday pay, 13th month pay and
payment for service incentive leave.

Ruling: Yes, in so far as the Holiday and SIL pay is concern. To determine whether workers
engaged on “pakyaw” ortask basis” is entitled to holiday and SIL pay, the presence (or
absence) of employer supervision as regards the worker’s time and performance is the key:
if the worker is simply engaged on pakyaw or task basis, then the general rule is that he is
entitled to a holiday pay and SIL pay unless exempted from the exceptions specifically
provided under Article 94 (holiday pay) and Article 95 (SIL pay) of the Labor Code. However,
if the worker engaged on pakyaw or task basis also falls within the meaning of “field
personnel” under the law, then he is not entitled to these monetary benefits. CA that
Macasio does not fall under the definition of “field personnel.” The CA’s finding in this
regard is supported by the established facts of this case: first, Macasio regularly performed
his duties at David’s principal place of business; second, his actual hours of work could be
determined with reasonable certainty; and, third, David supervised his time and
performance of duties. Since Macasio cannot be considered a “field personnel,” then he is
not exempted from the grant of holiday, SIL pay even as he was engaged on “pakyaw” or
task basis.

However, the governing law on 13th month pay is PD No. 851. As with holiday and SIL pay,
13th month pay benefits generally cover all employees; an employee must be one of those
expressly enumerated to be exempted. Section 3 of the Rules and Regulations
Implementing P.D. No. 851 enumerates the exemptions from the coverage of 13th month
pay benefits. Under Section 3(e), “employers of those who are paid on task basis, and those
who are paid a fixed amount for performing a specific work, irrespective of the time
consumed in the performance thereof are exempted. Note that unlike the IRR of the Labor
Code on holiday and SIL pay, Section 3(e) of the Rules and Regulations Implementing PD No.
851exempts employees "paid on task basis" without any reference to "field personnel." This
could only mean that insofar as payment of the 13th month pay is concerned, the law did
not intend to qualify the exemption from its coverage with the requirement that the task
worker be a "field personnel" at the same time. Thus Macasio is not entitled to 13th month
pay.

Wherefore, the petition was partially granted the petition insofar as the payment of 13th
month pay to respondent is concerned. But all other aspect of the CA’s decision was
affirmed.