PALEA vs.
PAL
G.R. No. L-31341, March 31, 1976
FACTS: Petitioners PHILIPPINE AIR LINES EMPLOYEES ASSOCIATION
(PALEA) and PHILIPPINE AIR LINES SUPERVISORS' ASSOCIATION
(PALSA) commenced an action against the PAL in the CIR, praying
that PAL be ordered to revise its method of computing the basic
daily and hourly rate of its monthly salaried employees and to pay
them their accrued salary differentials.
The sought to be revised PAL’s formula in computing wages of its
employees is:
Monthly Salary x 12
= x(Basic Daily Rate )
365(No. of Calendar Days∈aYear )
x Such being the case, the divisor in computing an employee's basic
= Basic Hourly Rate
8 daily rate should be the actual working days in a year. The number
The unions would like PAL to modify the above formula in this wise:
Monthly Salary x 12
=x(Basic Daily Rate)
(No . of Actual Working Days)
x rate, such off-day is deemed subsumed by the divisor. For it is
= Basic Hourly Rate
8 elementary in the fundamental process of division that with a
However, the CIR issued an order denying the union’s prayer for a
modified wage formula. It ruled that from the records, however, it
appears that for many years since 1952, and even previously, PAL
has been consistently and regularly determining the basic and
hourly rates of monthly salaried employees by multiplying the
monthly salary by 12 months and dividing the product by 365 days to
arrive at the basic daily rate and dividing the quotient by 8 to
compute the basic hourly rate. There has been no attempt to revise
this formula notwithstanding the various negotiations PAL and with
the unions ever since its operations, and it was only on July 18, 1962,
when PALSA, for the first time, proposed that it be changed in
accordance with what is now alleged in the petition. This is just a
mere proposal for adoption of new formula and not a demand for
the application of a formula that the union claimed to be correct
under the law. Hence, PALEA and PALSA are estopped from
questioning the said method employed by PAL.
Contention of PALEA PALSA: The union attributed error to PAL's
wage formula, particularly in the use of 365 days as divisor. They
contended that the use of 365 days as divisor would necessarily
include off-days which, under the terms of the CBA entered into
between the parties, were not paid days. This is so since for work
done on an off-day, an employee was paid 100% plus 25%, or 100%
plus 37-½ of his regular working hour rate.
Eventually, CIR ordered the reversal of its decision and sustained the
unions' method of wage computation.
ISSUE: Whether or not PALEA and PALSA are entitled to a revision in
computing their basic and hourly rate and to pay them its
corresponding accrued salary differentials. YES.
RULING: The Supreme Court agreed with the CIR that the PALEA and
PALSA’s way of computation was the correct one.
There should hardly be any doubt that off-days are not paid days
and are rest days for the worker. He is not required to work on such
days. This finds support not only in the basic principle in labor that
the basis of remuneration or compensation is actual service
rendered, but in the ever pervading labor spirit aimed at humanizing
the conditions of hie working man.
Since during his off-days an employee is not compelled to work, he
cannot, conversely, demand for his corresponding pay. If, however,
a worker works on his off-day, our welfare laws duly reward him
with a premium higher than what he would receive when he works
on his regular working day.
of off-days are not to be counted precisely because on such off-days,
an employee is not required to work.
Simple common-sense dictates that should an employee opt not to
work — which he can legally do — on an off-day, and for such he
gets no pay, he would be unduly robbed of a portion of his
legitimate pay if and when in computing his basic daily and hourly
constant dividend, the bigger your divisor is, the smaller our
quotient will be.
The basis of the above ruling is the NAWASA doctrine which
provides that while under CA No. 444 a public utility is not required
to pay additional compensation to its employees and workers for
work done on Sundays and legal holidays, there is, however, no
prohibition for it to pay such additional compensation if it voluntarily
agrees to do so. The NAWASA committed itself to pay this additional
compensation. It must pay not because of compulsion of law but
because of contractual obligation.
As to the contention of PAL that the unions are estopped from
questioning the method computation imposed by it, the Court held
that mere innocent silence will not work estoppel. It is not denied
that PAL's formula of determining daily and hourly rate of pay has
been decided and adopted by it unilaterally without the knowledge
and express consent of the employees. It was only later on that the
employees came to know of the formula's irregularity and its being
violative of the CBA. Hence, they proposed to use the correct
method of computation but to no avail because PAL choose to
ignore it.
Furthermore, jurisprudence provides that, in the interest of public
policy, estoppel and laches cannot arrest the recovery of overtime
compensation. It would be contrary to the spirit of the Eight-Hour
Labor Law, under which the laborers cannot waive their right to
extra compensation.
Hence, the Supreme Court ordered the modification of the method
of computation and ordered PAL to pay salary differentials of the
employees.