GR No. 78210 Arica vs.

NLRC, Paras, J:
FACTS: Petitoners spend 30 minutes before their actual working schedule for their morning
activity. This happens between 5:30 to 6:00 in the morning. The court cannot consider the 30
minute assembly time as waiting time. 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
Petitioners contend that these activities must be compensable because it is necessarily and
primarily for the benefit of the private respondent’s benefit.
ISSUE(S): Whether or not the 30 minute activity before the scheduled working time of the
petitioners are compensable under the labor code.

Held: No. Minister of Labor held in ALU vs. STANFILCO : 30 minute assembly time “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. “
Engineering Equipment Inc. vs Minister of Labor
J Aquino

Facts: Miguel Aspera is working as an overseas mechanical engineer for herein petitioner
corporation. The employment contract contains a stipulation as to the work schedule and
compensation wherein: His working day is consisted of 10 working hours on a six day work
basis. He will be receiving a monthly salary of 750 pesos plus overtime pay for work rendered
during holidays in excess of the 10 hour regular schedule.
For having worked for 10 hours in the past 335 days, he is now claiming for the overtime
payment and contends that the monthly salary should correspond to the eight hours of daily
work and that the two hour excess must be compensated for overtime pay. The director of
employment services as well as the NLRC ruled in favor of Aspera and awarded the claimed
overtime pay and declared void the 10 hour working day as it is contrary to section 83 of the
labor code. Hence, this petition by Engineering Equipment contending that Aspera is a
managerial employee and that under section 82 of the labor code, they are not entitled to pay
and that since there is a built-in overtime pay in the contract already since his basic monthly pay
is higher than the normal rates.
Issue: Whether Aspera is entitled to the overtime pay claimed
Ruling: No, he is not entitled. This is because non-payment by employer of overtime pay to
employee in excess of the regular hours worked, valid, as said overtime pay was already
provided in the written contract with a “built-in overtime pay and signed by the Director of the
Bureau of Employment Services and enforced by the employer. The facts is clear that e the
Acting Minister of Labor and Director De la Cruz committed a grave abuse of discretion
amounting to lack of jurisdiction in awarding overtime pay and in disregarding a contract that De
la Cruz himself, who is supposed to know the Eight-Hour Labor Law, had previously sealed with
his imprimatur. Because of that approval, the petitioner acted in good faith in enforcing the
contract. Additionally, Section 82 is express to the notion that Managerial employees are not
entitled to overtime pay and since Aspera did not deny that he is a managerial employee, then
he is not entitled to the overtime pay.
Mercury v Dayao
Gutierrez, J:

Facts Respondents Dayao et al filed a petition against the petitioner before the Court of
Industrial Relations 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.

Issue 1. WON RESPONDENT IS ENTITLED TO CLAIMS FOR 25% ADDITIONAL

COMPENSATION PERFORMING WORK DURING SUNDAY AND LEGAL HOLIDAYS (YES)
2. Whether or not the 25% compensation had already been included in the private respondents
monthly salaries. (NO)
3. WON IT WAS CORRECT FOR THE RESPONDENT COURT TO DECLARE VOID THE
EMPLOYMENT CONTRACTS BETWEEN PETITIONER AND RESPONDENT (YES)

Held: The Supreme Court ruled for respondents. 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.

On 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. The 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
San Miguel vs CA
J Kapunan

Facts: Petitioner was inspected by the DOLE in 1992 wherein they discovered that the
employees were underpaid during the regular Muslim Holidays. Petitioner contested the findings
however it failed to submit proof that it was paying regular Muslim holiday pay which led for
DOLE to issue a compliance order. This was then appealed by petitioner to the main office of
DOLE however it was dismissed for being filed belatedly. A petition for certiorari was then filed
with CA however it only affirmed the DOLE's directive with modifications as to the amount of
holiday pay. Hence, this petition contending that the Muslim Holliday pay should only be given
to Muslims and non-Muslims should be excluded from its coverage.
Issue: Whether or not Non-Muslims are excluded from the coverage of the Muslim Holiday pay

Held: Negative. Muslim holidays are provided under Articles 169 and 170, Title I, Book V, of
Presidential Decree No. 1083 which are: Amun Jadid (New Year); Maulid-un-Nabi (Birthday of
the Prophet Muhammad); Lailatul Isra Wal Mi’raj (Nocturnal Journey and Ascension of the
Prophet Muhammad) Id-ul-Fitr (Hari Raya Puasa), and ‘Id-ul-Adha (Hari Raya Haji) This should
be read in conjunction with Article 94 of the labor code which states that 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 and 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. There should be no distinction between Muslims and non-Muslims
as regards payment of benefits for Muslim holidays since 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.
WELLINGTON INVESTMENT AND MANUFACTURING CORPORATION vs CRESENCIANO
TRAJANO et al
NAVASA, J:
FACTS: The case arose from a routine inspection conducted by a Labor Enforcement Officer of
the Wellington Flour Mills, an establishment owned and operated by petitioner Wellington
Investment and Manufacturing Corporation. The officer thereafter drew up a report with his
finding of non-payment of regular holidays falling on a Sunday for monthly-paid employees.
Wellington sought consideration arguing that the monthly salary of the company’s monthly-
salaried employees already includes holiday for all regular holidays and there is no legal basis
for the finding of the alleged non-payment of regular holidays falling on a Sunday. It further
explained that it pays its monthly-paid employees a fixed monthly compensation “using the 314
factor which undeniably covers and already includes payment for all the working days in a
month as well as all the 10 unworked regular holidays within a year.” Wellington’s argument
failed to persuade the Regional Director, who issued an Order holding that “when a regular
holiday falls on a Sunday, an extra or additional working day is created and the employer has
the obligation to pay the employees for the extra day except the last Sunday of August since the
payment for the said holiday is already included in the 314 factor” and directed Wellington to
pay its employees compensation corresponding to four (4) extra working days. The same order
was affirmed by Respondent Undersecretary of Labor; hence, the present petition.

ISSUE: Whether a monthly paid employee, receiving a fixed monthly compensation, is entitled
to an additional pay aside from his usual holiday pay whenever a regular holiday falls on a
Sunday

HELD: NO, the Court held that a monthly paid employee receiving monthly compensation is not
entitled to an additional pay aside from his usual holiday pay whenever a regular holiday falls on
a Sunday. Under the Labor Code, every worker should be paid his regular daily wage during
regular holidays, except in retail and service establishments regularly employing less than ten
(10) workers; even if the worker does no work on these holidays. As regards the employees
who are uniformly paid by the month, “the monthly minimum wage shall not be less than the
statutory minimum wage multiplied by 365 days divided by twelve (12). This monthly salary shall
serve as compensation “for all the days in the month whether worked or not, and irrespective of
the number of working days therein.” Whether the month is of a 30 or 31days’ duration or 28 or
29 in case of February, as well as in the event of declaration of any special holiday, or any
fortuitous cause precluding work on any particular day or days, the employee is entitled to
receive the entire monthly salary and the employer has no right to deduct the proportionate
amount corresponding to the days when no work was done.
Chartered Bank Employees Association vs Blas Ople
J Gutierrez
Facts: Herein petitioner filed a complaint with the DOLE regional office against their employer
Chartered Bank for the payment of 10 unworked legal holidays and premiums for the overtime
differentials over worked legal holidays for the year 1974. This was in accordance with the CBA
wherein (Art. VII thereof) said monthly paid employees are paid for overtime work wherein: In
computing overtime pay and premium pay for work done during regular holidays, the divisor
used in arriving at the daily rate of pay is 251 days although formerly the divisor used was 303
days and this was when the respondent bank was still operating on a 6-day work week basis.
However, for purposes of computing deductions corresponding to absences without pay the
divisor used is 365 days The arbitrator and NLRC both ruled in favor of the petitioner and
ordered the petitioner to pay them. It was appealed to the minister of labor but the same was
dismissed for lack of merit. However, if deductions are made from his monthly salary on account
of holidays in months where they occur, then he is still entitled to the ten (10) paid legal
holidays.
Issue: Whether or not Sec. 2, Rule IV of the Integrated Rules and Policy Instruction No. 9 is
contrary to Articles 82 and 94 of the Labor Code

Ruling: YES, it is contrary to Articles 82 and 94 of the Labor Code. It is elementary in the rules
of statutory construction that when the language of the law is clear and unequivocal the law
must be taken to mean exactly what it says. In the case at bar, the provisions of the Labor Code
on the entitlement to the benefits of holiday pay are clear and explicit it provides for both the
coverage of and exclusion from the benefit. In Policy Instruction No. 9, the then Secretary of
Labor went as far as to categorically state that the benefit is principally intended for daily paid
employees, when the law clearly states that every worker shall be paid their regular holiday pay.
This is flagrant violation of the mandatory directive of Article 4 of the Labor Code, which states
that 'All doubts in the implementation and interpretation of the provisions of this Code, including
its implementing rules and regulations, shall be resolved in favor of labor.' Moreover, it shall
always be presumed that the legislature intended to enact a valid and permanent statute which
would have the most beneficial effect that its language permits.
G.R. No. 152427. August 9, 2005
INTEGRATED CONTRACTOR AND PLUMBING WORKS, INC., Petitioners, vs. NATIONAL
LABOR RELATIONS COMMISSION and GLEN SOLON, Respondent.
QUISUMBING, J.:
Facts: Petitioner is a plumbing contractor. Its business depends on the number and frequency of
the projects it is able to contract with its clients. Respondent Solon worked for petitioner from 14
December 1994 up to 5 January 1998. On 23 February 1998, respondent was informed that it
was his last day of work as he had been terminated. When private respondent went to the
petitioner’s office the next day, to verify his status, he found out that indeed, he had been
terminated. Respondent refused to sign a clearance where it was made to appear that he had
resigned. Respondent then filed a complaint for illegal dismissal against petitioner before the
NLRC where the LA ruled that respondent was a regular employee and could only be removed
for cause. Petitioner was ordered by the LA to reinstate respondent in addition to paying the
latter full backwages from the time his salary was withheld until his actual reinstatement, and
pay him service incentive leave pay, and 13th month pay for three years in the amount of
₱2,880 and ₱14,976, respectively. The decision of the LA was affirmed by the NLRC with
modification that the 13th month pay should be given only for the year 1997 and portion of 1998.
The CA dismissed petitioner’s appeal, awarding 13th month pay in favor of respondent for the
year 1997. Hence, this petition.
Issue: WAS RESPONDENT ENTITLED TO 13TH MONTH PAY ON THE YEAR 1997?
Held:
1. No. Article 95(a) of the Labor Code governs the award of service incentive leave. It 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, and Section 3, Rule V, Book III of the
Implementing Rules and Regulations, defines the term "at least one year of service" to mean
service 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
contract is less than 12 months, in which case said period shall be considered as one year.
Accordingly, private respondent’s service incentive leave credits of five days for every year of
service, based on the actual service rendered to the petitioner, in accordance with each contract
of employment should be computed up to the date of reinstatement pursuant to Article 279 of
the Labor Code.
ROSARIO A. GAA, petitioner, vs. THE HONORABLE COURT OF APPEALS, EUROPHIL
INDUSTRIES CORPORATION, and CESAR R. ROXAS, Deputy Sheriff of Manila, respondents.
Patajo, J:
Facts:
On December 12, 1973, Europhil Industries commenced an action in the Court of First Instance
of Manila for damages against petitioner "for having perpetrated certain acts that Europhil
Industries considered a trespass upon its rights, namely, cutting of its electricity, and removing
its name from the building directory and gate passes of its officials and employees". On June
28, 1974, said court rendered judgment in favor of respondent Europhil Industries.The said
decision became final and executory, and a writ of garnishment was issued pursuant to which
Deputy Sheriff Cesar A. Roxas on August 1, 1975 served a Notice of Garnishment upon El
Grande Hotel, where petitioner was then employed, garnishing her "salary, commission and/or
remuneration." Petitioner then filed with the Court of First Instance of Manila a motion to lift said
garnishment on the ground that her "salaries, commission and, or remuneration are exempted
from execution under Article 1708 of the New Civil Code. Said motion was denied by the lower
Court in an order dated November 7, 1975. A motion for reconsideration of said order was
likewise denied, and on January 26, 1976 petitioner filed with the Court of Appeals a petition for
certiorari against filed with the Court of Appeals a petition for certiorari against said order of
November 7, 1975.
On March 30, 1976, the Court of Appeals dismissed the petition for certiorari.The Court of
Appeals held that petitioner is not a mere laborer as contemplated under Article 1708 as the
term laborer does not apply to one who holds a managerial or supervisory position like that of
petitioner, but only to those "laborers occupying the lower strata." It also held that the term
"wages" means the pay given" as hire or reward to artisans, mechanics, domestics or menial
servants, and laborers employed in manufactories, agriculture, mines, and other manual
occupation and usually employed to distinguish the sums paid to persons hired to perform
manual labor, skilled or unskilled, paid at stated times, and measured by the day, week, month,
or season," citing 67 C.J. 285, which is the ordinary acceptation of the said term, and that
"wages" in Spanish is "jornal" and one who receives a wage is a "jornalero."
Issue:
1. Is Gaa considered a laborer as to exempt her salary from garnishment under art. 1708?
Ruling:
1. NO. It is beyond dispute that petitioner is not an ordinary or rank and file laborer but "a
responsibly place employee," of El Grande Hotel, responsible for planning, directing, controlling,
and coordinating the activities of all housekeeping personnel. Considering the importance of
petitioner's function in El Grande Hotel, it is undeniable that petitioner is occupying a position
equivalent to that of a managerial or supervisory position.
In its broadest sense, the word "laborer" includes everyone who performs any kind of mental or
physical labor, but as commonly and customarily used and understood, it only applies to one
engaged in some form of manual or physical labor.
The distinction between wages and salary was adverted to in Bell vs. Indian Livestock Co.
(Tex. Sup.), 11 S.W. 344, wherein it was said: " 'Wages' are the compensation given to a hired
person for service, and the same is true of 'salary'. The words seem to be synonymous,
convertible terms, though we believe that use and general acceptation have given to the word
'salary' a significance somewhat different from the word 'wages' in this: that the former is
understood to relate to position of office, to be the compensation given for official or other
service, as distinguished from 'wages', the compensation for labor."
Therefore, CA was correct in ruling that Gaa’s salaries, commission and other remuneration due
her from the El Grande Hotel do not constitute wages due a laborer which, under Article 1708 of
the Civil Code, are not subject to execution or attachment.
Mabeza vs NLRC
J Kapunan
Facts: Mabeza together with her co-employees were allegedly asked by their employers to sign
an instrument that they are being given the minimum wage and that the company is compliant
with labor standards. An affidavit was made to this matter however she refused to swore over
the same. •As a result of this, she was ordered by her employer to turn over the keys to her
living quarters and remove her belongings within the hotel premises. This made petitioner to file
a leave of absence but the same was denied. Three days after, petitioner decided to go to work
but the hotel's cashier told her to not go to work. •This led petitioner to file a complaint for illegal
dismissal with NLRC-CAR. Her employer responded to the complaint by saying that she left
without notice and abandoned her work so that she should not be paid for the benefits she is
claiming. The Labor Arbiter then rendered a decision which dismissed the complaint of
petitioner on the ground of loss of confidence. Petitioner appealed to NLRC however it only
affirmed the Labor Arbiter's decision. Hence, this petition.

Issue: Whether or not NLRC committed grave abuse of discretion when it disregarded the
evidence submitted to show that the employer is guilty of unfair labor practice
Held: Affirmative. In this case, petitioner was dismissed from work without just cause.
Respondent employer contends that petitioner is guilty of abandonment of work. The court find
this untenable. For abandonment to arise, there must be concurrence of two things: 1) lack of
intention to work; and 2) the presence of overt acts signifying the employee’s intention not to
work. Here, the fact that petitioner filed an application for leave of absence shows that she
clearly does not have any intention of abandoning her work. Moreover, mere absence of one or
two days would not be enough to sustain such a claim. In here, petitioner tried to resume
working with the hotel after 2 days but to no avail, she was not allowed to go back to work. As to
the respondent's contention that petitioner was validly dismissed for loss of confidence, the
court find this without merit. Loss of confidence should ideally apply only to cases involving
employees occupying positions of trust and confidence or to those situations where the
employee is routinely charged with the care and custody of the employer’s money or property.
In here, petitioner is just an ordinary chambermaid and clearly her day to day job does not fall
under the class of employees bonded with confidence. As to the issue of whether petitioner was
receiving less than minimum wage due to meals, lodging and electric and water consumption
was being deducted to her salary: The court found that the respondent employer did not provide
any evidences showing compliance with the legal requirements for the deduction. These are: 1.
proof must be shown that such facilities are customarily furnished by the trade. 2. the provision
of deductible facilities must be voluntarily accepted in writing by the employee 3. facilities must
be charged at fair and reasonable value.
Ilaw at Buklod ng Manggagawa vs. NLRC .
GR No. 91980. June 27, 1991
Narvasa J.
Facts: The Union known as Ilaw at Buklod ng Manggagawa (IBM) said to represent 4,500
employees of San Miguel Corporation, presented to the company a demand for correction of the
significant distortion in wages. In that demand, the Union invoked Section 4 of RA 6727, “The
Wage Rationalization Act”. The Union claims that the demand was ignored. When the Company
rejected the reduced proposal of the Union the members thereof, on their own accord, refused
to render overtime services, most especially at the Beer Bottling Plants at Polo, starting October
16, 1989. In this connection, the workers involved issues a joint notice reading as follows:
Sama-samang pahayag: Kaming arawang manggagawa ng Polo Brewery pawang kasapi ng
Ilaw at Buklod ng Manggagawa (IBM) ay nagkakaisang nagpasya na ipatupad muna ang eight
hours work shift pansamantala habang hindi ipinapatupad ng SMC Management ang tamang
Wage Distortion.
Issue: Whether or not wage distortion shall be a ground for strike/lockout.
Held: No. It is SMC's submittal that the coordinated reduction by the Union's members of the
work time theretofore willingly and consistently observed by them, thereby causing financial
losses to the employer in order to compel it to yield to the demand for correction of "wage
distortions," is an illegal and "unprotected" activity. It is, SMC argues, contrary to the law and to
the collective bargaining agreement between it and the Union. The argument is correct and will
be sustained. Among the rights guaranteed to employees by the Labor Code is that of engaging
in concerted activities in order to attain their legitimate objectives. Article 263 of the Labor Code,
as amended, declares that in line with "the policy of the State to encourage free trade unionism
and free collective bargaining. Workers shall have the right to engage in concerted activities for
purposes of collective bargaining or for their mutual benefit and protection." A similar right to
engage in concerted activities for mutual benefit and protection is tacitly and traditionally
recognized in respect of employers. On the other hand, the counterpart activity that
management may licitly undertake is the lockout. In this connection, the same Article 263
provides that the "right of legitimate labor organizations to strike and picket and of employer to
lockout, consistent with the national interest, shall continue to be recognized and respected."
The legality of these activities is usually dependent on the legality of the purposes sought to be
attained and the means employed therefor. It goes without saying that these joint or coordinated
activities may be forbidden or restricted by law or contract.
JPL MARKETING PROMOTIONS v. NATIONAL LABOR RELATIONS COMMISSION, NOEL
GONZALES, RAMON ABESA III and FAUSTINO ANINIPOT,
G.R. No. 151966/July 8, 2005/Tinga, J.:
FACTS: JPL Marketing and Promotions (hereinafter referred to as “JPL”) is a domestic
corporation engaged in the business of recruitment and placement of workers.  On the other
hand, private respondents Noel Gonzales, Ramon Abesa III and Faustino Aninipot were
employed by JPL as merchandisers on separate dates and assigned at different establishments
in Naga City and Daet, Camarines Norte as attendants to the display of California Marketing
Corporation (CMC), one of petitioner’s clients.
       On 13 August 1996, JPL notified private respondents that CMC would stop its direct
merchandising activity in the Bicol Region, Isabela, and Cagayan Valley effective 15 August
1996.  They were advised to wait for further notice as they would be transferred to other clients.
However, on 17 October 1996, private respondents Abesa and Gonzales filed before the NLRC
complaints for illegal dismissal, praying for separation pay, 13th month pay, service incentive
leave pay and payment for moral damages.  Aninipot filed a similar case thereafter.
It must be noted that private respondents were not given their 13th month pay and service
incentive leave pay while they were under the employ of JPL.  Instead, JPL provided salaries
which were over and above the minimum wage.
ISSUE: Whether or not the 13th month pay and service incentive leave pay should be computed
from the start of employment up to the finality of the NLRC resolution.
RULING: Service incentive leave, as provided in Art. 95 of the Labor Code, is a yearly leave
benefit of five (5) days with pay, enjoyed by an employee who has rendered at least one year of
service.  Unless specifically excepted, all establishments are required to grant service incentive
leave to their employees.  The term “at least one year of service” shall mean service within
twelve (12) months, whether continuous or broken reckoned from the date the employee started
working.  The Court has held in several instances that “service incentive leave is clearly
demandable after one year of service.”
While computation for the 13th month pay should properly begin from the first day of
employment, the service incentive leave pay should start a year after commencement of
service, for it is only then that the employee is entitled to said benefit.  On the other hand,
the computation for both benefits should only be up to 15 August 1996, or the last day that
private respondents worked for JPL.  To extend the period to the date of finality of the NLRC
resolution would negate the absence of illegal dismissal, or to be more precise, the want of
dismissal in this case.  Besides, it would be unfair to require JPL to pay private respondents the
said benefits beyond 15 August 1996 when they did not render any service to JPL beyond that
date. These benefits are given by law on the basis of the service actually rendered by the
employee, and in the particular case of the service incentive leave, is granted as a motivation
for the employee to stay longer with the employer.  There is no cause for granting said incentive
to one who has already terminated his relationship with the employer.
ETPI VS. ETEU
G.R. No. 185665
February 8, 2012
FACTS: Eastern Telecommunications Phils., Inc. (ETPI) is a corporation engaged in the
business of providing telecommunications facilities. Eastern Telecoms Employees Union
(ETEU) is the certified exclusive bargaining agent of the company’s rank and file employees. It
has an existing CBA with the company to expire in the year 2004 with a Side
Agreement signed on September 3, 2001.
In essence, the labor dispute was a spin-off of the company’s plan to defer payment of the 2003
14th, 15th and 16th month bonuses sometime in April 2004. The company’s main ground in
postponing the payment of bonuses is due to allege continuing deterioration of company’s
financial position which started in the year 2000. However, ETPI while postponing payment of
bonuses sometime in April 2004, such payment would also be subject to availability of funds.
Invoking the Side Agreement of the existing CBA for the period 2001-2004 between ETPI and
ETEU, the union strongly opposed the deferment in payment of the bonuses by filing a
preventive mediation complaint with the NCMB.
Later, the company made a sudden turnaround in its position by declaring that they will no
longer pay the bonuses until the issue is resolved through compulsory arbitration.
Thus ETEU filed a Notice of Strike on the ground of unfair labor practice for failure of ETPI to
pay the bonuses in gross violation of the economic provision of the existing CBA.
ISSUES: Is ETPI is liable to pay 14th, 15th and 16th month bonuses for the year 2003 and 14th
month bonus for the year 2004 to the members of respondent union?
HELD: YES
From a legal point of view, a bonus is a gratuity or act of liberality of the giver which the recipient
has no right to demand as a matter of right. The grant of a bonus is basically a management
prerogative which cannot be forced upon the employer who may not be obliged to assume the
onerous burden of granting bonuses or other benefits aside from the employee’s basic salaries
or wages.
A bonus, however, becomes a demandable or enforceable obligation when it is made part of
the wage or salary or compensation of the employee. Particularly instructive is the ruling of the
Court in Metro Transit Organization, Inc. v. NLRC, where it was written:
Whether or not a bonus forms part of wages depends upon the circumstances and conditions
for its payment. If it is additional compensation which the employer promised and agreed to give
without any conditions imposed for its payment, such as success of business or greater
production or output, then it is part of the wage. But if it is paid only if profits are realized or if a
certain level of productivity is achieved, it cannot be considered part of the wage. Where it is not
payable to all but only to some employees and only when their labor becomes more efficient or
more productive, it is only an inducement for efficiency, a prize therefore, not a part of the wage.
In the case at bench, it is indubitable that ETPI and ETEU agreed on the inclusion of a provision
for the grant of 14th, 15th and 16th month bonuses in the 1998-2001 CBA Side Agreement, as
well as in the 2001-2004 CBA Side Agreement, which was signed on September 3, 2001.
STA CATALINA COLLEGE V. NLRC (LABOR)
Carpio – Morales, J:

FACTS: Hilaria was hired as an elementary teacher in petitioner school in 1955 until 1970. In
1970, she applied for and was granted 1-year leave of absence without pay on account of her
mother's illness. In the meantime, she was employed as a teacher in another school. In 1982,
she applied anew at petitioner school. When she reached the compulsory retirement age of 65,
petitioner school pegged her retirement benefits only from her service from 1982 to 1997. Hilaria
then files a complaint for non-payment of retirement benefits.

HELD: HILARIA ABANDONED HER WORK, for which reason, she could not be credited for her
services from 1955 to 1970 in determining her retirements benefits for after 1 year of leave of
absence in 1971 without her requesting for extension thereof as in fact she had not been heard
from until she resurfaces in 1982 when she reapplied, she abandoned her teaching position as
in fact she was employed elsewhere and effectively relinquished the retirement benefits that
accumulated during said period.

ABANDONMENT OF WORK being a just cause for terminating the services of Hilaria, petitioner
school was under no obligation to serve a written notice to her.
Bernardo vs NLRC
GR 122917 07/03/99
Facts:
Petitioners numbering 43 are deaf–mutes who were hired on various periods from 1988 to 1993
by respondent Far East Bank and Trust Co. as Money Sorters and Counters through a uniformly
worded agreement called ‘Employment Contract for Handicapped Workers. Subsequently, they
are dismissed.
Petitioners maintain that they should be considered regular employees, because their task as
money sorters and counters was necessary and desirable to the business of respondent
bank.  They further allege that their contracts served merely to preclude the application of Article
280 and to bar them from becoming regular employees.
Private respondent, on the other hand, submits that petitioners were hired only as “special
workers and should not in any way be considered as part of the regular complement of the
Bank.”[12] Rather, they were “special” workers under Article 80 of the Labor Code.
Issue: WON petitioners have become regular employees.
Held:
The uniform employment contracts of the petitioners stipulated that they shall be trained for a
period of one month, after which the employer shall determine whether or not they should be
allowed to finish the 6-month term of the contract.  Furthermore, the employer may terminate
the contract at any time for a just and reasonable cause.  Unless renewed in writing by the
employer, the contract shall automatically expire at the end of the term.
Respondent bank entered into the aforesaid contract with a total of 56 handicapped workers
and renewed the contracts of 37 of them.  In fact, two of them worked from 1988 to
1993.  Verily, the renewal of the contracts of the handicapped workers and the hiring of others
lead to the conclusion that their tasks were beneficial and necessary to the bank.  More
important, these facts show that they were qualified to perform the responsibilities of their
positions.  In other words, their disability did not render them unqualified or unfit for the tasks
assigned to them.
In this light, the Magna Carta for Disabled Persons mandates that a qualified disabled employee
should be given the same terms and conditions of employment as a qualified able-bodied
person.  Section 5 of the Magna Carta provides:
“Section 5.  Equal Opportunity for Employment.—No disabled person shall be denied access to
opportunities for suitable employment.  A qualified disabled employee shall be subject to the
same terms and conditions of employment and the same compensation, privileges, benefits,
fringe benefits, incentives or allowances as a qualified able bodied person.”
The fact that the employees were qualified disabled persons necessarily removes the
employment contracts from the ambit of Article 80.  Since the Magna Carta accords them the
rights of qualified able-bodied persons, they are thus covered by Article 280 of the Labor Code,
which provides:
“ART. 280. Regular and Casual Employment. — The provisions of written agreement to the
contrary notwithstanding and regardless of the oral agreement of the parties, an employment
shall be deemed to be regular where the employee has been engaged to perform activities
which are usually necessary or desirable in the usual business or trade of the employer, x x x”
“The primary standard, therefore, of determining regular employment is the reasonable
connection between the particular activity performed by the employee in relation to the usual
trade or business of the employer.  The test is whether the former is usually necessary or
desirable in the usual business or trade of the employer.  The connection can be determined by
considering the nature of the work performed and its relation to the scheme of the particular
business or trade in its entirety.  Also if the employee has been performing the job for at least
one year, even if the performance is not continuous and merely intermittent, the law deems
repeated and continuing need for its performance as sufficient evidence of the necessity if not
indispensability of that activity to the business.  Hence, the employment is considered regular,
but only with respect to such activity, and while such activity exists.”
Respondent bank entered into the aforesaid contract with a total of 56 handicapped workers
and renewed the contracts of 37 of them.  In fact, two of them worked from 1988 to
1993.  Verily, the renewal of the contracts of the handicapped workers and the hiring of others
lead to the conclusion that their tasks were beneficial and necessary to the bank.  More
important, these facts show that they were qualified to perform the responsibilities of their
positions.  In other words, their disability did not render them unqualified or unfit for the tasks
assigned to them.
Without a doubt, the task of counting and sorting bills is necessary and desirable to the
business of respondent bank.  With the exception of sixteen of them, petitioners performed
these tasks for more than six months.