A. APPRENTICE4.02 APPRENTICEA. DEFINED – 4(j) of RA. 7796“Apprenticeship” training within employment with compulsory related theoretical instructions involving a contract between an apprentice and an employer on an approved apprenticeable occupation.

B. APPRENTICEABLE OCCUPATION – 4(m) RA 7796“Apprenticeable Occupation” is an occupation officially endorsed by a tripartite body and approved for apprenticeship by the Authority

C. QUALIFICATION – Sec.12, RA 7610, as amended by RA 7658

Sec. 12. Employment of Children. – Children below fifteen (15) years of age may be employed except:

(1) When a child works directly under the sole responsibility of his parents or legal guardian and where only members of the employer's family are employed: Provided, however, That his employment neither endangers his life, safety and health and morals, nor impairs his normal development: Provided, further, That the parent or legal guardian shall provide the said minor child with the prescribed primary and/or secondary education; or

(2) When a child's employment or participation in public & entertainment or information through cinema, theater, radio or television is essential: Provided, The employment contract concluded by the child's parent or guardian, with the express agreement of the child concerned, if possible, and the approval of the Department of Labor and Employment: Provided, That the following requirements in all instances are strictly complied with:

(a) The employer shall ensure the protection, health, safety and morals of the child;(b) the employer shall institute measures to prevent the child's exploitation or discrimination taking into account the system and level of remuneration, and the duration and arrangement of working time; and;(c) The employer shall formulate and implement, subject to the approval and supervision of competent authorities, a continuing program for training and skill acquisition of the child.

In the above exceptional cases where any such child may be employed, the employer shall first secure, before engaging such child, a work permit from the Department of Labor and Employment

which shall ensure observance of the above requirement.

The Department of Labor Employment shall promulgate rules and regulations necessary for the effective implementation of this Sec.

D. ALLOWED EMPLOYMENT - Requirement Program Approval

Nitto Enterprises vs. NLRC318 Phil 780 Kapunan

FACTS: Roberto Capili was hired as an apprentice on May 1990, paid 75% of minimum wage at P66.75 in Nitto Enterprises as a machinist , molder, and core maker. On August 1, 1990,m the piece of glass he was working on accidentally hit and injured the leg of a secretary. On the same day after work hours, he entered the office premises and operated one of the machines without authority and injured his left thumb. The company paid for his medical expenses and was asked to resign and sign a tagalog quitclaim.The labor arbiter found that he was an apprentice, and that the termination was valid due to his gross negligenceThe NLRC found him as a regular employee under Art 280, and found his termination to be invalid.

ISSUE: 1. WON the employee in question should be

considered as an apprentice - No2. WON there was valid cause in his termination

HELD:1. While there had been an apprenticeship

agreement in accordance with Art 61, the same has not been filed with the DOLE until June 1990, and was pending approval, during the time of termination. He was also initially hired as a kargador. Prior approval, the apprenticeship program is a condition sine qua non. The act of filing does not give rise to an employee – apprentice relationship. Prior approval is needed. Without which, he is to be considered as a regular employee.

Article 61 of the Labor Code provides:Contents of apprenticeship agreement. — Apprenticeship agreements, including the main rates of apprentices, shall conform to the rules issued by the Minister of Labor and Employment. The period of apprenticeship shall not exceed six months. Apprenticeship agreements providing for wage rates below the legal minimum wage, which in no case shall start below 75% per cent of the applicable minimum wage, may be entered into only in accordance with apprenticeship program duly approved by the Minister of Labor and Employment. The Ministry shall develop standard model programs of apprenticeship.

2. For there be a valid dismissal the twin requirements of procedural and substantive

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due process is needed. As can be ascertained, he filed a case of illegal dismissal 3 days after he was made to sign a quit claim shows that his resignation was not voluntary and that he was strong-armed into signing the quitclaim.

Decision of the NLRC affirmed.

E. TERMS AND CONDITIONS OF EMPLOYMENT – 61, 72

Art. 61. Contents of apprenticeship agreements. Apprenticeship agreements, including the wage rates of apprentices, shall conform to the rules issued by the Secretary of Labor and Employment. The period of apprenticeship shall not exceed six months. Apprenticeship agreements providing for wage rates below the legal minimum wage, which in no case shall start below 75 percent of the applicable minimum wage, may be entered into only in accordance with apprenticeship programs duly approved by the Secretary of Labor and Employment. The Department shall develop standard model programs of apprenticeship. (As amended by Section 1, Executive Order No. 111, December 24, 1986)

Art. 72. Apprentices without compensation. The Secretary of Labor and Employment may authorize the hiring of apprentices without compensation whose training on the job is required by the school or training program curriculum or as requisite for graduation or board examination.

F. COSTS – 71

Art. 71. Deductibility of training costs. An additional deduction from taxable income of one-half (1/2) of the value of labor training expenses incurred for developing the productivity and efficiency of apprentices shall be granted to the person or enterprise organizing an apprenticeship program: Provided, That such program is duly recognized by the Department of Labor and Employment: Provided, further, That such deduction shall not exceed ten (10%) percent of direct labor wage: and Provided, finally, That the person or enterprise who wishes to avail himself or itself of this incentive should pay his apprentices the minimum wage.

G. ENFORCEMENT – 65, 66, 67Art. 65. Investigation of violation of apprenticeship agreement. Upon complaint of any interested person or upon its own initiative, the appropriate agency of the Department of Labor and Employment or its authorized representative shall investigate any violation of an apprenticeship agreement pursuant to such rules and regulations as may be prescribed by the Secretary of Labor and Employment.

Art. 66. Appeal to the Secretary of Labor and Employment. The decision of the authorized agency of the Department of Labor and Employment may

be appealed by any aggrieved person to the Secretary of Labor and Employment within five (5) days from receipt of the decision. The decision of the Secretary of Labor and Employment shall be final and executory.

Art. 67. Exhaustion of administrative remedies. No person shall institute any action for the enforcement of any apprenticeship agreement or damages for breach of any such agreement, unless he has exhausted all available administrative remedies.

B. LEARNERS4.05 LEARNERSA. DEFINED – 4(n), R.A. 7796“Learners” refer to persons hired as trainees in semi-skilled and other industrial occupations which are non-apprenticeable.

Learnership programs must be approved by the Authority.

B. ALLOWED EMPLOYMENT – 74 (b)?Art. 74. When learners may be hired. Learners may be employed when no experienced workers are available, the employment of learners is necessary to prevent curtailment of employment opportunities, and the employment does not create unfair competition in terms of labor costs or impair or lower working standards.

C. TERMS AND CONDITIONS OF EMPLOYMENT – 75, 76Art. 75. Learnership agreement. Any employer desiring to employ learners shall enter into a learnership agreement with them, which agreement shall include: The names and addresses of the learners; The duration of the learnership period, which shall not exceed three (3) months;The wages or salary rates of the learners which shall begin at not less than seventy-five percent (75%) of the applicable minimum wage; and A commitment to employ the learners if they so desire, as regular employees upon completion of the learnership. All learners who have been allowed or suffered to work during the first two (2) months shall be deemed regular employees if training is terminated by the employer before the end of the stipulated period through no fault of the learners.The learnership agreement shall be subject to inspection by the Secretary of Labor and Employment or his duly authorized representative.

Art. 76. Learners in piecework. Learners employed in piece or incentive-rate jobs during the training period shall be paid in full for the work done.

C. HANDICAPPED WORKERS

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4.06 HANDICAPPED WORKER – RA 7277 (1992, MAGNA CARTA FOR DISABLED PERSONS)A. DEFINED – 4(a), (b), (c), (d), 1-8 RA 7277

Section 1. Title. — This Act shall be known and cited as the "Magna Carta for Disabled Persons." 

Sec. 2. Declaration of Policy — The grant of the rights and privileges for disabled persons shall be guided by the following principles:

(a) Disabled persons are part of Philippine society, thus the State shall give full support to the improvement of the total well-being of disabled persons and their integration into the mainstream of society. Toward this end, the State shall adopt policies ensuring the rehabilitation, self-development and self-reliance of disabled persons. It shall develop their skills and potentials to enable them to compete favorably for available opportunities.  

(b) Disabled persons have the same rights as other people to take their proper place in society. They should be able to live freely and as independently as possible. This must be the concern of everyone — the family, community and all government and nongovernment organizations. Disabled persons' rights must never be perceived as welfare services by the Government.

(c) The rehabilitation of the disabled persons shall be the concern of the Government in order to foster their capacity to attain a more meaningful, productive and satisfying life. To reach out to a greater number of disabled persons, the rehabilitation services and benefits shall be expanded beyond the traditional urban-based centers to community based programs, that will ensure full participation of different sectors as supported by national and local government agencies. 

(d) The State also recognizes the role of the private sector in promoting the welfare of disabled persons and shall encourage partnership in programs that address their needs and concerns. 

(e) To facilitate integration of disabled persons into the mainstream of society, the State shall advocate for and encourage respect for disabled persons. The State shall exert all efforts to remove all social, cultural, economic, environmental and attitudinal barriers that are prejudicial to disabled persons.

Sec.  3. Coverage. — This Act shall cover all disabled persons and, to the extent herein provided, departments, offices and agencies of the National Government or nongovernment organizations involved in the attainment of the objectives of this Act. 

Sec.  4. Definition of Terms. — For purposes of this Act, these terms are defined as follows:

(a) Disabled persons are those suffering from restriction or different abilities, as a result of a mental, physical or sensory impairment, to perform an activity in the manner or within the range considered normal for a human being; 

(b) Impairment is any loss, diminution or aberration of psychological, physiological, or anatomical structure or function; 

(c) Disability shall mean 1) a physical or mental impairment that substantially limits one or more psychological, physiological or anatomical function of an individual or activities of such individual; 2) a record of such an impairment; or 3) being regarded as having such an impairment; 

(d) Handicap refers to a disadvantage for a given individual, resulting from an impairment or a disability, that limits or prevents the function or activity, that is considered normal given the age and sex of the individual; (e) Rehabilitation is an integrated approach to physical, social, cultural, spiritual, educational and vocational measures that create conditions for the individual to attain the highest possible level of functional ability; 

(f) Social Barriers refer to the characteristics of institutions, whether legal, economic, cultural, recreational or other, any human group, community, or society which limit the fullest possible participation of disabled persons in the life of the group. Social barriers include negative attitudes which tend to single out and exclude disabled persons and which distort roles and inter-personal relationships; 

(g) Auxiliary Aids and Services include:(1) qualified interpreters or other effective methods of delivering materials to individuals with hearing impairments;

(2) qualified readers, taped tests, or other effective methods of delivering materials to individuals with visual impairments;

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(3) acquisition or modification of equipment or devices; and 

(4) other similar services and actions or all types of aids and services that facilitate the learning process of people with mental disability. (h) Reasonable Accommodation include 1) improvement of existing facilities used by employees in order to render these readily accessible to and usable by disabled persons; and 2) modification of work schedules, reassignment to a vacant position, acquisition or modification of equipment or devices, appropriate adjustments or modifications of examinations, training materials or company policies, rules and regulations, the provision of auxiliary aids and services, and other similar accommodations for disabled persons; 

(i) Sheltered Employment refers to the provision of productive work for disabled persons through workshops providing special facilities, income-producing projects or homework schemes with a view to giving them the opportunity to earn a living thus enabling them to acquire a working capacity required in open industry; 

(j) Auxiliary Social Services are the supportive activities in the delivery of social services to the marginalized sectors of society;(k) Marginalized Disabled Persons refer to disabled persons who lack access to rehabilitative services and opportunities to be able to participate fully in socioeconomic activities and who have no means of livelihood and whose incomes fall below the poverty threshold; chan robles virtual law library

(l) Qualified Individual with a Disability shall mean an individual with a disability who, with or without reasonable accommodations, can perform the essential functions of the employment position that such individual holds or desires. However, consideration shall be given to the employer's judgment as to what functions of a job are essential, and if an employer has prepared a written description before advertising or interviewing applicants for the job, this description shall be considered evidence of the essential functions of the job;

(m) Readily Achievable means a goal can be easily attained and carried out without much difficulty or expense. In determining

whether an action is readily achievable, factors to be considered include — (1) the nature and cost of the action;(2) the overall financial resources of the facility or facilities involved in the action; the number of persons employed at such facility; the effect on expenses and resources, or the impact otherwise of such action upon the operation of the facility; 

(3) the overall financial resources of the covered entity with respect to the number of its employees; the number, type and location of its facilities; and 

(4) the type of operation or operations of the covered entity, including the composition, structure and functions of the work force of such entity; the geographic separateness, administrative or fiscal relationship of the facility or facilities in question to the covered entity. 

(n) Public Transportation means transportation by air, land and sea that provides the public with general or special service on a regular and continuing basis; (o) Covered Entity means an employer, employment agency, labor organization or joint-labor management committee; and 

(p) Commerce shall be taken to mean as travel, trade, traffic, commerce, transportation, or communication among the provinces or between any foreign country or any territory or possession and any province.

TITLE II: RIGHTS AND PRIVILEGES OF DISABLED PERSONS

CHAPTER I: EMPLOYMENTSec.  5. Equal Opportunity for Employment. — No disable 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. Five percent (5%) of all casual emergency and contractual positions in the Departments of Social Welfare and Development; Health; Education, Culture and Sports; and other government agencies, offices or corporations engaged in social development shall be reserved for disabled persons.

Sec.  6. Sheltered Employment — If suitable employment for disabled persons cannot be found through open employment as provided in the immediately preceding Section, the State shall endeavor to provide it by means of sheltered

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employment. In the placement of disabled persons in sheltered employment, it shall accord due regard to the individual qualities, vocational goals and inclinations to ensure a good working atmosphere and efficient production. 

Sec.  7. Apprenticeship. — Subject to the provisions of the Labor Code as amended, disabled persons shall be eligible as apprentices or learners: Provided, That their handicap is not as much as to effectively impede the performance of job operations in the particular occupation for which they are hired; Provided, further, That after the lapse of the period of apprenticeship, if found satisfactory in the job performance, they shall be eligible for employment. 

Sec.  8. Incentives for Employers. — (a) To encourage the active participation of the private sector in promoting the welfare of disabled persons and to ensure gainful employment for qualified disabled persons, adequate incentives shall be provided to private entities which employ disabled persons. 

(b) Private entities that employ disabled persons who meet the required skills or qualifications, either as regular employee, apprentice or learner, shall be entitled to an additional deduction, from their gross income, equivalent to twenty-five percent (25%) of the total amount paid as salaries and wages to disabled persons: Provided, however, That such entities present proof as certified by the Department of Labor and Employment that disabled persons are under their employ: Provided, further, That the disabled employee is accredited with the Department of Labor and Employment and the Department of Health as to his disability, skills and qualifications.(c) Private entities that improve or modify their physical facilities in order to provide reasonable accommodation for disabled persons shall also be entitled to an additional deduction from their net taxable income, equivalent to fifty percent (50%) of the direct costs of the improvements or modifications. This Section, however, does not apply to improvements or modifications of facilities required under Batas Pambansa Bilang 344.

B. ALLOWED EMPLOYMENT – 5 RA 7277

Regular WorkerBERNARDO ET AL V. NLRCJuly 12, 1999 J. Panganiban

Topic: Regular Handicapped Workers

Doctrine: The Magna Carta for Disabled Persons mandates that qualified disabled persons be granted the same terms and conditions of employment as qualified able-bodied employees. Once they have attained the status of regular workers, they should be accorded all the benefits

granted by law, notwithstanding written or verbal contracts to the contrary. (copy paste from previous digest)

FACTS:•Bernardo and 37 others were deaf mutes who were hired for various periods by Far East Bank and Trust Co as Money Sorters and Counters•They were dismissed after a few years of renewal of contracts•Bank says that their employment was only an accommodation in response to the requests of government officials and civic-minded citizens•LA said they could not be deemed regular; NLRC affirmed

ISSUE: WON Handicapped workers may be considered regular workers

HELD: Yes

RATIO:•LC 280 – regular employee if performs activities that are necessary or desirable•Task of counting and sorting bills is necessary to the business of the bank•Renewal also indicates that the contracts of the handicapped workers leads to the conclusion that their tasks were beneficial and necessary to the bank•The fact that the employees were qualified disabled persons necessarily removes the employment contracts from the ambit of LC 80•They should be treated and granted the same rights like any other regular employees

SECTION 5. CONDITIONS OF EMPLOYMENT – HOURS OF WORK

STATUTORY REFERENCE – ARTS. 82-90; BOOK III, RULE I, IA, II, OMNIBUS RULES IMPLEMENTING THE LABOR CODE

Art. 82. Coverage. The provisions of this Title shall apply to employees in all establishments and undertakings whether for profit or not, but not to government employees, managerial employees, field personnel, members of the family of the employer who are dependent on him for support, domestic helpers, persons in the personal service of another, and workers who are paid by results as determined by the Secretary of Labor in appropriate regulations.As used herein, "managerial employees" refer to those whose primary duty consists of the management of the establishment in which they are employed or of a department or subdivision thereof, and to other officers or members of the managerial staff.

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"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.

Art. 83. Normal hours of work. The normal hours of work of any employee shall not exceed eight (8) hours a day.

Health personnel in cities and municipalities with a population of at least one million (1,000,000) or in hospitals and clinics with a bed capacity of at least one hundred (100) shall hold regular office hours for eight (8) hours a day, for five (5) days a week, exclusive of time for meals, except where the exigencies of the service require that such personnel work for six (6) days or forty-eight (48) hours, in which case, they shall be entitled to an additional compensation of at least thirty percent (30%) of their regular wage for work on the sixth day. For purposes of this Article, "health personnel" shall include resident physicians, nurses, nutritionists, dietitians, pharmacists, social workers, laboratory technicians, paramedical technicians, psychologists, midwives, attendants and all other hospital or clinic personnel.

Art. 84. Hours worked. Hours worked shall include (a) all time during which an employee is required to be on duty or to be at a prescribed workplace; and (b) all time during which an employee is suffered or permitted to work.

Rest periods of short duration during working hours shall be counted as hours worked.

Art. 85. Meal periods. Subject to such regulations as the Secretary of Labor may prescribe, it shall be the duty of every employer to give his employees not less than sixty (60) minutes time-off for their regular meals.

Art. 86. Night shift differential. Every employee shall be paid a night shift differential of not less than ten percent (10%) of his regular wage for each hour of work performed between ten o’clock in the evening and six o’clock in the morning.

Art. 87. Overtime work. Work may be performed beyond eight (8) hours a day provided that the employee is paid for the overtime work, an additional compensation equivalent to his regular wage plus at least twenty-five percent (25%) thereof. Work performed beyond eight hours on a holiday or rest day shall be paid an additional compensation equivalent to the rate of the first eight hours on a holiday or rest day plus at least thirty percent (30%) thereof.

Art. 88. Undertime not offset by overtime. Undertime work on any particular day shall not be offset by overtime work on any other day. Permission given to the employee to go on leave on some other day of the week shall not exempt the employer from paying the additional compensation required in this Chapter.

Art. 89. Emergency overtime work. Any employee may be required by the employer to perform overtime work in any of the following cases:

a. When the country is at war or when any other national or local emergency has been declared by the National Assembly or the Chief Executive;

b. When it is necessary to prevent loss of life or property or in case of imminent danger to public safety due to an actual or impending emergency in the locality caused by serious accidents, fire, flood, typhoon, earthquake, epidemic, or other disaster or calamity; 

c. When there is urgent work to be performed on machines, installations, or equipment, in order to avoid serious loss or damage to the employer or some other cause of similar nature; 

d. When the work is necessary to prevent loss or damage to perishable goods; and 

e. Where the completion or continuation of the work started before the eighth hour is necessary to prevent serious obstruction or prejudice to the business or operations of the employer.Any employee required to render overtime work under this Article shall be paid the additional compensation required in this Chapter.

Art. 90. Computation of additional compensation. For purposes of computing overtime and other additional remuneration as required by this Chapter, the "regular wage" of an employee shall include the cash wage only, without deduction on account of facilities provided by the employer.

RULE I: Hours of WorkSECTION 1. General statement on coverage. — The provisions of this Rule shall apply to all employees in all establishments and undertakings, whether operated for profit or not, except to those specifically exempted under Section 2 hereof.

SECTION 2. Exemption. — The provisions of this Rule shall not apply to the following persons if they qualify for exemption under the conditions set forth herein:

(a) Government employees whether employed by the National Government or any of its political

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subdivision, including those employed in government-owned and/or controlled corporations;

(b) Managerial employees, if they meet all of the following conditions:

(1) Their primary duty consists of the management of the establishment in which they are employed or of a department or sub-division thereof.(2) They customarily and regularly direct the work of two or more employees therein.(3) They have the authority to hire or fire employees of lower rank; or their suggestions and recommendations as to hiring and firing and as to the promotion or any other change of status of other employees, are given particular weight.

(c) Officers or members of a managerial staff if they perform the following duties and responsibilities:

(1) The primary duty consists of the performance of work directly related to management policies of their employer;(2) Customarily and regularly exercise discretion and independent judgment; and(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 work week to activities which are not directly and closely related to the performance of the work described in paragraphs (1), (2) and (3) above.

(d) Domestic servants and persons in the personal service of another if they perform such services in the employer's home which are usually necessary or desirable for the maintenance and enjoyment thereof, or minister to the personal comfort, convenience, or safety of the employer as well as the members of his employer's household.

(e) Workers who are paid by results, including those who are paid on piece-work, "takay," "pakiao" or task basis, and other non-time work if their output rates are in accordance with the standards prescribed under Section 8, Rule VII, Book Three of these regulations, or where such rates have been fixed by the Secretary of Labor and Employment in accordance with the aforesaid Section.

(f) Non-agricultural field personnel if they regularly perform their duties away from the principal or branch office or place of business of the employer

and whose actual hours of work in the field cannot be determined with reasonable certainty.

SECTION 3. Hours worked. — The following shall be considered as compensable hours worked:

(a) All time during which an employee is required to be on duty or to be at the employer's premises or to be at a prescribed work place; and(b) All time during which an employee is suffered or permitted to work.

SECTION 4. Principles in determining hours worked. — The following general principles shall govern in determining whether the time spent by an employee is considered hours worked for purposes of this Rule:

(a) All hours are hours worked which the employee is required to give his employer, regardless of whether or not such hours are spent in productive labor or involve physical or mental exertion.(b) An employee need not leave the premises of the work place in order that his rest period shall not be counted, it being enough that he stops working, may rest completely and may leave his work place, to go elsewhere, whether within or outside the premises of his work place.(c) If the work performed was necessary, or it benefited the employer, or the employee could not abandon his work at the end of his normal working hours because he had no replacement, all time spent for such work shall be considered as hours worked, if the work was with the knowledge of his employer or immediate supervisor.(d) The time during which an employee is inactive by reason of interruptions in his work beyond his control shall be considered working time either if the imminence of the resumption of work requires the employee's presence at the place of work or if the interval is too brief to be utilized effectively and gainfully in the employee's own interest.

SECTION 5. Waiting time. — (a) Waiting time spent by an employee shall be considered as working time if waiting is an integral part of his work or the employee is required or engaged by the employer to wait.

(b) An employee who is required to remain on call in the employer's premises or so close thereto that he cannot use the time effectively and gainfully for his own purpose shall be considered as working while on call. An employee who is not required to leave word at his home or with company officials where he may be reached is not working while on call.

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SECTION 6. Lectures, meetings, training programs. — Attendance at lectures, meetings, training programs, and other similar activities shall not be counted as working time if all of the following conditions are met:

(a) Attendance is outside of the employee's regular working hours;(b) Attendance is in fact voluntary; and(c) The employee does not perform any productive work during such attendance.

SECTION 7. Meal and Rest Periods. — Every employer shall give his employees, regardless of sex, not less than one (1) hour time-off for regular meals, except in the following cases when a meal period of not less than twenty (20) minutes may be given by the employer provided that such shorter meal period is credited as compensable hours worked of the employee:

(a) Where the work is non-manual work in nature or does not involve strenuous physical exertion;(b) Where the establishment regularly operates not less than sixteen (16) hours a day;(c) In case of actual or impending emergencies or there is urgent work to be performed on machineries, equipment or installations to avoid serious loss which the employer would otherwise suffer; and(d) Where the work is necessary to prevent serious loss of perishable goods.

Rest periods or coffee breaks running from five (5) to twenty (20) minutes shall be considered as compensable working time.

SECTION 8. Overtime pay. — Any employee covered by this Rule who is permitted or required to work beyond eight (8) hours on ordinary working days shall be paid an additional compensation for the overtime work in the amount equivalent to his regular wage plus at least twenty-five percent (25%) thereof.

SECTION 9. Premium and overtime pay for holiday and rest day work. — (a) Except employees referred to under Section 2 of this Rule, an employee who is permitted or suffered to work on special holidays or on his designated rest days not falling on regular holidays, shall be paid with an additional compensation as premium pay of not less than thirty percent (30%) of his regular wage. For work performed in excess of eight (8) hours on special holidays and rest days not falling on regular holidays, an employee shall be paid an additional compensation for the overtime work equivalent to his rate for the first eight hours on a special holiday or rest day plus at least thirty percent (30%) thereof.

(b) Employees of public utility enterprises as well as those employed in non-profit institutions and

organizations shall be entitled to the premium and overtime pay provided herein, unless they are specifically excluded from the coverage of this Rule as provided in Section 2 hereof.

(c) The payment of additional compensation for work performed on regular holidays shall be governed by Rule IV, Book Three, of these Rules.

SECTION 10. Compulsory overtime work. — In any of the following cases, an employer may require any of his employees to work beyond eight (8) hours a day, provided that the employee required to render overtime work is paid the additional compensation required by these regulations:

(a) When the country is at war or when any other national or local emergency has been declared by Congress or the Chief Executive;

(b) When overtime work is necessary to prevent loss of life or property, or in case of imminent danger to public safety due to actual or impending emergency in the locality caused by serious accident, fire, floods, typhoons, earthquake, epidemic or other disaster or calamities;

(c) When there is urgent work to be performed on machines, installations, or equipment, in order to avoid serious loss or damage to the employer or some other causes of similar nature;(d) When the work is necessary to prevent loss or damage to perishable goods;

(e) When the completion or continuation of work started before the 8th hour is necessary to prevent serious obstruction or prejudice to the business or operations of the employer; or

(f) When overtime work is necessary to avail of favorable weather or environmental conditions where performance or quality of work is dependent thereon.

In cases not falling within any of these enumerated in this Section, no employee may be made to work beyond eight hours a day against his will.

RULE I-A: Hours of Work of Hospital and Clinic PersonnelSECTION 1. General statement on coverage. — This Rule shall apply to:

(a) All hospitals and clinics, including those with a bed capacity of less than one hundred (100) which are situated in cities or municipalities with a population of one million or more; and

(b) All hospitals and clinics with a bed capacity of at least one hundred (100), irrespective of the size of the population of the city or municipality where they may be situated.

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SECTION 2. Hospitals or clinics within the meaning of this Rule. — The terms "hospitals" and "clinics" as used in this Rule shall mean a place devoted primarily to the maintenance and operation of facilities for the diagnosis, treatment and care of individuals suffering from illness, disease, injury, or deformity, or in need of obstetrical or other medical and nursing care. Either term shall also be construed as any institution, building, or place where there are installed beds, or cribs, or bassinets for twenty-four (24) hours use or longer by patients in the treatment of disease, injuries, deformities, or abnormal physical and mental states, maternity cases or sanitorial care; or infirmaries, nurseries, dispensaries, and such other similar names by which they may be designated.

SECTION 3. Determination of bed capacity and population. — (a) For purposes of determining the applicability of this Rule, the actual bed capacity of the hospital or clinic at the time of such determination shall be considered, regardless of the actual or bed occupancy. The bed capacity of hospital or clinic as determined by the Bureau of Medical Services pursuant to Republic Act No. 4226, otherwise known as the Hospital Licensure Act, shall prima facie be considered as the actual bed capacity of such hospital or clinic.

(b) The size of the population of the city or municipality shall be determined from the latest official census issued by the Bureau of the Census and Statistics.

SECTION 4. Personnel covered by this Rule. — This Rule applies to all persons employed by any private or public hospital or clinic mentioned in Section 1 hereof, and shall include, but not limited to, resident physicians, nurses, nutritionists, dieticians, pharmacists, social workers, laboratory technicians paramedical technicians, psychologists, midwives, and attendants.

SECTION 5. Regular working hours. — The regular working hours of any person covered by this Rule shall not be more than eight (8) hours in any one day nor more than forty (40) hours in any one week.

For purposes of this Rule a "day" shall mean a work day of twenty-four (24) consecutive hours beginning at the same time each calendar year. A "week" shall mean the work of 168 consecutive hours, or seven consecutive 24-hour work days, beginning at the same hour and on the same calendar day each calendar week.

SECTION 6. Regular working days. — The regular working days of covered employees shall not be more than five days in a work week. The work week

may begin at any hour and on any day, including Saturday or Sunday, designated by the employer.

Employers are not precluded from changing the time at which the work day or work week begins, provided that the change is not intended to evade the requirements of this Rule.

SECTION 7. Overtime work. — Where the exigencies of the service so require as determined by the employer, any employee covered by this Rule may be scheduled to work for more than five (5) days or forty (40) hours a week, provided that the employee is paid for the overtime work an additional compensation equivalent to his regular wage plus at least thirty percent (30%) thereof, subject to the provisions of this Book on the payment of additional compensation for work performed on special and regular holidays and on rest days.SECTION 8. Hours worked. — In determining the compensable hours of work of hospital and clinic personnel covered by this Rule, the pertinent provisions of Rule 1 of this Book shall apply.

SECTION 9. Additional compensation. — Hospital and clinic personnel covered by this Rule, with the exception of those employed by the Government, shall be entitled to an additional compensation for work performed on regular and special holidays and rest days as provided in this Book. Such employees shall also be entitled to overtime pay for services rendered in excess of forty hours a week, or in excess of eight hours a day, whichever will yield the higher additional compensation to the employee in the work week.

SECTION 10. Relation to Rule I. — All provisions of Rule I of this Book which are not inconsistent with this Rule shall be deemed applicable to hospital and clinic personnel.

RULE II: Night Shift DifferentialSECTION 1. Coverage. — This Rule shall apply to all employees except:(a) Those of the government and any of its political subdivisions, including government-owned and/or controlled corporations;

(b) Those of retail and service establishments regularly employing not more than five (5) workers;

(c) Domestic helpers and persons in the personal service of another;

(d) Managerial employees as defined in Book Three of this Code;

(e) Field personnel and other employees whose time and performance is unsupervised by the employer including those who are engaged on task or contract basis, purely commission basis, or those

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who are paid a fixed amount for performing work irrespective of the time consumed in the performance thereof.

SECTION 2. Night shift differential. — An employee shall be paid night shift differential of no less than ten per cent (10%) of his regular wage for each hour of work performed between ten o'clock in the evening and six o'clock in the morning.

SECTION 3. Additional compensation. — Where an employee is permitted or suffered to work on the period covered after his work schedule, he shall be entitled to his regular wage plus at least twenty-five per cent (25%) and an additional amount of no less than ten per cent (10%) of such overtime rate for each hour or work performed between 10 p.m. to 6 a.m.

SECTION 4. Additional compensation on scheduled rest day/special holiday. — An employee who is required or permitted to work on the period covered during rest days and/or special holidays not falling on regular holidays, shall be paid a compensation equivalent to his regular wage plus at least thirty (30%) per cent and an additional amount of not less than ten (10%) per cent of such premium pay rate for each hour of work performed.

SECTION 5. Additional compensation on regular holidays. — For work on the period covered during regular holidays, an employee shall be entitled to his regular wage during these days plus an additional compensation of no less than ten (10%) per cent of such premium rate for each hour of work performed.

SECTION 6. Relation to agreements. — Nothing in this Rule shall justify an employer in withdrawing or reducing any benefits, supplements or payments as provided in existing individual or collective agreements or employer practice or policy.

5.01 HOURS REGULATIONRATIONALE AND ENFORCEMENT

Manila Terminal Relief and Mutual Aid Assn vs Manila Terminal Co Inc et al

Facts: Manila Terminal Company hired thirty men as watchmen on twelve-hour shifts at a compensation of P3 per day for the day shift and P6 per day for the night shift. A member of the Manila Terminal Relief and Mutual Aid Association sent a letter to the Department of Labor, requesting that the matter of overtime pay be instituted. Petitioner company stressed that the contract between it and the Association upon the commencement of the employment of its watchmen was to the effect that the latter were to work twelve hours a day at certain rates of pay including overtime compensation. The Supreme Court ruled in favour of the watchmen, and granted the overtime pay of

the watchmen since the commencement of their employment.

Doctrine: Petitioner’s allegation that the workers had acquiesced in the twelve-hour shifts leading to the conclusion that they impliedly waived their right to overtime compensation is untenable. The workers cannot be said that they have impliedly waived their right for the simple reason that they cannot waive their right to extra compensation, for that would be contrary to the spirit of the Eight-Hour Labor Law. It is high time that all employers were warned that the public is interested in the strict enforcement of the Eight-Hour Labor Law. This was designed not only to safeguard the health and welfare of the laborer or employee, but in a way to minimize unemployment by forcing employers, in cases where more than 8-hour operation is necessary, to utilize different shifts of laborers or employees working only for eight hours each.

5.02 COVERAGE – 82; 276Art. 82. Coverage. The provisions of this Title shall apply to employees in all establishments and undertakings whether for profit or not, but not to government employees, managerial employees, field personnel, members of the family of the employer who are dependent on him for support, domestic helpers, persons in the personal service of another, and workers who are paid by results as determined by the Secretary of Labor in appropriate regulations.As used herein, "managerial employees" refer to those whose primary duty consists of the management of the establishment in which they are employed or of a department or subdivision thereof, and to other officers or members of the managerial staff.

"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.

Art. 276. Government employees. The terms and conditions of employment of all government employees, including employees of government-owned and controlled corporations, shall be governed by the Civil Service Law, rules and regulations. Their salaries shall be standardized by the National Assembly as provided for in the New Constitution. However, there shall be no reduction of existing wages, benefits and other terms and conditions of employment being enjoyed by them at the time of the adoption of this Code.

EXEMPTION – MANAGERIAL EMPLOYEEPenaranda vs. Baganga Plywood Corporation

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G.R. No. 159577 / May 3, 2006 / 1st division / Panganiban, CJ

Facts: 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.He claims he was not paid his overtime pay, premium pay for working during holidays/rest days, night shift differentials and finally claims for payment of damages and attorney’s fees having been forced to litigate the present complaint.(There was a procedural issue because he failed to submit supporting documents. The Court frowns upon the practice of dismissing cases purely on procedural grounds. Reviewed and decided based on merits.)

Doctrine: Managerial employees and members of the managerial staff are exempted from the provisions of the Labor Code on labor standards. Since petitioner belongs to this class of employees, he is not entitled to overtime pay and premium pay for working on rest days.Article 82 of the Labor Code exempts managerial employees from the coverage of labor standards. Labor standards provide the working conditions of employees, including entitlement to overtime pay and premium pay for working on rest days. Under this provision, managerial employees are "those whose primary duty consists of the management of the establishment in which they are employed or of a department or subdivision.”For guidance: 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.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.

Asia-Pacific Chartering (Phils) Inc. vs. Maria Linda Farolan

393 SCRA 454 Dec. 4, 2002 Carpio-Morales(there is NOTHING in this case about hours of work. Sir naman. Tsk.)

FACTS: Respondent Linda was hired as Sales Manager by petitioner APCI for its passenger and cargo sales for the Scandinavian Airline System (SAS). She was only verbally briefed about the nature of the work before she accepted it. But SAS and APCI suffered decrease in sales. Its high-ranking officer Roberto Zozobrado took action, informally taking over Linda’s duties but Linda still remained the Sales Manager and continued to receive her salary. He found out that Linda did not do her duties. But because of Robert’s efforts, sales increased beyond their target and were looking good. APCI then sent Linda a letter of termination on the ground of loss of confidence regarding her work during the ‘decrease period.’ So she filed for illegal dismissal.

ISSUES:1) Was Linda illegally dismissed? YES2) What are the differences between rank-and-

file employees and managerial employees in this case? (please see below)

HELD and RATIO:requisites for a valid dismissal of an employee:(a) the employee must be afforded due process, i.e., he must be given opportunity to be heard and to defend himself; and

(here, NOT present! Robert took over her functions without her consent. She was made to choose between voluntarily resigning or to face termination. She refused the former, so she was suddenly terminated. No chance to defend herself)

(b) dismissal must be for a valid cause as provided in LC 282 or any of the authorized causes LC 283 and 284

(valid or authorized cause NOT present here)Caoile vs NLRC: “with respect to rank and file personnel, loss of trust and confidence as ground for valid dismissal requires proof of involvement in the alleged events in question and that mere uncorroborated assertions and accusations by the employer will not be sufficient. But as regards a managerial employee, mere existence of a basis for believing that such employee has breached the trust of his employer would suffice for his dismissal."

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Samson vs NLRC: Before one may be properly considered a managerial employee, all the following conditions must be met:(1) Their primary duty consists of the management of the establishment in which they are employed or of a department or subdivision thereof;(2) They customarily and regularly direct the work of two or more employees therein;(3) They have the authority to hire or fire other employees of lower rank; or their suggestions and recommendations as to the hiring and firing and as to the promotion or any other change of status of other employees are given particular weight. (Section 2(b), Rule I, Book III of the Omnibus Rules Implementing the Labor Code)Surigao del Norte Elec. Coop. vs NLRC as cited in National Bookstore Inc and Ramos vs CA): “Loss of trust and confidence to be a valid ground for an employee’s dismissal must be based on a willful breach and founded on clearly established facts. A breach is willful if it is done intentionally, knowingly and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently.”Here, no showing that she had willful breach. The losses were due to market forces beyond her control. National Waterworks and Sewerage Authority

v NWSA Consolidated Unions, Et AlDate: August 31, 1964

Ponente: Bautista Angelo

Facts: NWSA (P) is a GOCC governed by RA 1383.

NWSA Consolidated Unions (R) are various labor organizations composed of laborers and employees of the NAWASA. The intervenors are Centeno, et. al.

CIR conducted a hearing regarding the controversy between NWSA and NWSA Consolidated Unions on the following:

o Implementation of the 40-Hour Week Law (RA 1880); alleged violations of the collective bargaining agreement dated December 28, 1956 concerning "distress pay"; minimum wage of P5.25; promotional appointments and filling of vacancies of newly created positions; additional compensation for night work; wage increases to some laborers and employees; and strike duration pay.

o NWSA Consolidated Unions also raised the issue of whether the 25% additional compensation for Sunday work should be included in computing the daily wage and whether, in determining the daily wage of a monthly-salaried

employee, the salary should be divided by 30 days.

o Intervenors’ issues: Additional compensation for night work and new demand for overtime pay in favor of Jesus Centeno, Cesar Cabrera, Feliciano Duiguan, Cecilio Remotigue, and other employees receiving P4,200.00 per annum or more.

Respondent Court ruled as follows:1. The NAWASA is an agency not

performing governmental functions and, therefore, is liable to pay additional compensation for work on Sundays and legal holidays conformably to Commonwealth Act No. 444, known as the Eight-Hour Labor Law, even if said days should be within the staggered five work days authorized by the President.

2. The intervenors do not fall within the category of "managerial employees" as contemplated in Republic Act 2377 and so are not exempt from the coverage of the Eight-Hour Labor Law.

3. Those intervenors attached to the General Auditing Office and the Bureau of Public Works come within the purview of Commonwealth Act No. 444.

4. The computation followed by NAWASA in computing overtime compensation is contrary to Commonwealth Act 444.

5. The undertime of a worker should not be set-off against the worker in determining whether the latter has rendered service in excess of eight hours for that day.

6. In computing the daily wage of those employed on daily basis, the additional 25% compensation for Sunday work should be included.

7. The computation used by the NAWASA for monthly salaried employees to wit, dividing the monthly basic pay by 30 is erroneous.

8. The minimum wage awarded by respondent court way back on November 25, 1950 in Case No. 359-V entitled MWD Workers Union v. Metropolitan Water District, applies even to those who were employed long after the promulgation of the award and even if their workers are hired only as temporary, emergency and casual workers for a definite period and for a particular project.

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9. The authority granted to NAWASA by the President to stagger the working days of its workers should be limited exclusively to those specified in the authorization and should not be extended to others who are not therein specified.

10. Under the collective bargaining agreement entered into between the NAWASA and respondent unions on December 28, 1956, as well as under Resolution No. 29, series of 1957 of the Grievance Committee, even those who work outside the sewerage chambers should be paid 25% additional compensation as "distress pay."

Issues, Held & Ratio: 1. I: WON NAWASA is performing

governmental functions and, therefore, essentially a service agency of the government

H: No. NAWASA, though a public corporation, does not perform governmental functions. It performs proprietary functions, and hence, it is covered by Commonwealth Act No. 444.

The National Waterworks and Sewerage Authority was not created for purposes of local government. It was created for the "purpose of consolidating and centralizing all waterworks, sewerage and drainage system in the Philippines under one control and direction and general supervision."

Its functions are but mere ministrant functions of government which are aimed at advancing the general interest of society.

2. I: WON NAWASA is a public utility and, therefore, exempted from paying additional compensation for work on Sundays and legal holidays

H: NAWASA is a public utility. Although pursuant to Section 4 of Commonwealth Act 444 it is not obliged to pay an additional sum of 25% to its laborers for work done on Sundays and legal holidays, YET IT MUST PAY said additional compensation by virtue of the contractual obligation it assumed under the collective bargaining agreement.

NAWASA is a public utility because its primary function is to construct, maintain and operate water reservoirs and waterworks for the purpose of supplying water to the inhabitants, as well as consolidate and centralize all water supplies and drainage systems in the Philippines.

While under Commonwealth Act 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. NAWASA committed itself to pay this additional compensation. It must pay not because of compulsion of law but because of contractual obligation. In the collective bargaining agreement entered into between the NAWASA and respondent unions it was agreed that all existing benefits enjoyed by the employees and laborers prior to its effectivity shall remain in force and shall form part of the agreement, among which certainly is the 25% additional compensation for work on Sundays and legal holidays therefore enjoyed by said laborers and employees.

3. I: WON the intervenors are "managerial employees" within the meaning of Republic Act 2377 and, therefore, not entitled to the benefits of Commonwealth Act No. 444, as amended

H: No. The intervenors are not "managerial employees" as defined in Republic Act No. 2377, hence they are covered by Commonwealth Act No. 444 (Eight Hour Labor Law), as amended.

Discussion on Managerial Employees:o Section 2, RA 2377: This Act shall

apply to all persons employed in any industry or occupation, whether public or private with the exception of farm laborers, laborers who prefer to be paid on piece work basis, managerial employees, outside sales personnel, domestic servants, persons in the personal service of another and members of the family of the employer working for him. The term "managerial employee" in this Act shall mean either (a) any person whose primary duty consists of the management of the establishment in which he is employed or of a customarily recognized department or subdivision thereof, or (b) ally officer or member of the managerial staff.

Distinguishing Characteristic of Managerial Employees (RA 2377 Explanatory Note): He is not subject to the rigid observance of regular office hours. The true worth of his service does not depend so much on the time he spends in office but more on the results he accomplishes. In

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fact, he is free to go out of office anytime.

o Reason behind exemption: The philosophy behind the exemption of managerial employees from the 8-Hour Labor Law is that such workers are not usually employed for every hour of work but their compensation is determined considering their special training, experience or knowledge which requires the exercise of discretion and independent judgment, or perform work related to management policies or general business operations along specialized or technical lines. For these workers it is not feasible to provide a fixed hourly rate of pay or maximum hours of labor.

The intervenors are holding position of responsibility. One of them is the Secretary of the Board of Directors. Another is the private secretary of the general manager. Another is a public relations officer, and many other chiefs of divisions or sections and others are supervisors and overseers. Respondent court, however, after examining carefully their respective functions, duties and responsibilities found that their primary duties do not bear any direct relation with the management of the NAWASA, nor do they participate in the formulation of its policies nor in the hiring and firing of its employees. The chiefs of divisions and sections are given ready policies to execute and standard practices to observe for their execution. Hence, it concludes, they have little freedom of action, as their main function is merely to carry out the company's orders, plans and policies.

As a matter of fact, the intervenors are required to observe working hours and record their time work and are not free to come and go to their offices, nor move about at their own discretion.

4. I: WON respondent Court of Industrial Relations has jurisdiction to adjudicate overtime pay considering that this issue was not among the demands of respondent union in the principal case but was merely dragged into the case by the intervenors

H: Yes. The Court of Industrial Relations has jurisdiction to adjudicate overtime pay in the case at bar there being an employer-employee relationship existing between intervenors and petitioner.

SC has held time and again that disputes that call for the application of the 8-Hour Labor Law are within the jurisdiction of the Court of Industrial Relations if they arise while the employer-employee relationship still exists, it is clear that the matter subject of intervention comes within the jurisdiction of respondent court.

In labor disputes technicalities of procedure should as much as possible be avoided not only in the interest of labor but to avoid multiplicity of action.

5. I: WON those attached to the General Auditing Office and the Bureau of Public Works come within the purview of Commonwealth Act No. 444, as amended

H: The GAO employees assigned to work in the NAWASA cannot be regarded as employees of the NAWASA on matters relating to compensation. They are employees of the national government and are not covered by the Eight-Hour Labor Law. The same may be said of the employees of the Bureau of Public Works assigned to work in the NAWASA.

Precedent: National Marketing Corporation, et al. v. Court of Industrial Relations which ruled that members of audition force are not employees of now defunct PRISCO but of the Auditor General, the one who appointed and supervised them.

6. I: In determining whether one has worked in excess of eight hours, WON the undertime for that day should be set off

H: No. The method used by the NAWASA in off-setting the overtime with the undertime and at the same time charging said undertime to the accrued leave is unfair.

This is unfair for under such method the employee is made to pay twice for his undertime because his leave is reduced to that extent while he was made to pay for it with work beyond the regular working hours. The proper method should be to deduct the undertime from the accrued leave but pay the employee the overtime to which he is entitled. This method also obviates the irregular schedule that would result if the overtime should be set off against the undertime for that would place the schedule for working hours dependent on the employee.

7. In computing the daily wage, WON the additional compensation for Sunday work should be included

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H: Yes. The differential pay for Sundays is a part of the legal wage. Hence, it was correctly included in computing the weekly wages of those employees and laborers who worked seven days a week and were regularly receiving the 25% salary differential for a period of three months prior to the implementation of Republic Act 1880. This is so even if petitioner is a public utility in view of the contractual obligation it has assumed on the matter.

8. I: What is the correct method to determine the equivalent daily wage of a monthly salaried employee, especially in a firm which is a public utility?

H: In the computation of the daily wages of employees paid by the month distinction should be made between government employees like the GAO employees and those who are not. The computation for government employees is governed by Section 254 of the Revised Administrative Code (i.e. in making payments for part of a month, the amount to be paid for each day shall be determined by dividing the monthly pay. Into as many parts as there are days in the particular month) while for others the correct computation is the monthly salary divided by the actual number of working hours in the month or the regular monthly compensation divided by the number of working days in the month.

9. I: Considering that the payment of night compensation is not by virtue of any statutory provision but emanates only from an award of respondent Court of Industrial Relations, whether the same can be made retroactive and cover a period prior to the promulgation of the award

H: Yes. The Court of Industrial Relations did not err in ordering the payment of night compensation from the time such services were rendered. The laborer must be compensated for nighttime work as of the date the same was rendered.

It is of common occurrence that a working man who has already rendered night time service takes him a long time before he can muster enough courage to confront his employer with the demand for payment for it for fear of possible reprisal. It happens that many months or years are allowed to pass by before he could be made to present such claim against his employer, and so it is neither fair nor just that he be deprived of what is due him simply because of his silence for fear of losing the means of his livelihood.

10. I: WON minimum wage fixed and awarded by respondent Court of Industrial Relations in another case

(MWD Workers Union v. MWD CIR Case No. 359-V) applies to those employed long after the promulgation thereof, whether hired as temporary, emergency and casual workers for a definite period and for a specific project

H: Yes. The rates of minimum pay fixed in CIR Case No. 359-V are applicable not only to those who were already in the service as of the date of the decision but also to those who were employed subsequent to said date.

11. I: How should the collection bargaining agreement of December 28, 1956 and Resolution No. 29, series of 1957 of the Grievance Committee be interpreted and construed insofar as the stipulations therein contained relative to "distress pay" is concerned?

H: All the laborers, whether assigned to the sewerage division or not who are actually working inside or outside the sewerage chambers are entitled to distress pay.

CBA: “Because of the peculiar nature of the function of those employees and laborers of the Sewerage Division who actually work in the sewerage chambers, causing "unusual distress" to them, they shall receive extra compensation equivalent to twenty-five (25%) of their basic wage.”

November 25, 1957 Agreement between labor and management: "Distress Management agreed to pay effective October 1, 1956 25% additional compensation for those who actually work in and outside sewerage chambers in accordance with Resolution No. 9 (explaining CBA stipulation) of the Grievance Committee."

SC finds that those who are entitled to the distress pay are those employees and laborers who work in the sewerage chambers whether they belong to the sewerage division or not, and by sewerage chambers should be understood to mean as the surroundings where the work is actually done, not necessarily "inside the sewerage chambers." It is clear then that all the laborers whether of the sewerage division or not assigned to work in and outside the sewerage chambers and suffer in unusual distress because of the nature of their work are entitled to the extra compensatory. And this conclusion is further bolstered by the findings of the industrial court regarding the main activities of the sewerage division.

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o Activities of sewerage division: (a) cooperation of the sewerage pumping stations; (b) cleaning and maintenance of sewer mains; and (c) installation and repairs of house sewer connections.

o The wet pits, trenches, manholes, which are full of sewage matters, are filthy sources of germs and different diseases. They emit foul and filthy odor dangerous to health. Those working in such places and exposed directly to the distress of contamination.

12. I: WON, under the first indorsement of the President of the Philippines dated August 12, 1957, which authorizes herein petitioner to stagger the working days of its employees and laborers, those whose services are indispensably continuous throughout the year may be staggered in the same manner as the pump, valve, filter and chlorine operators, guards, watchmen, medical services, and those attached to the recreational facilities.

H: There is no valid reason to disturb the finding of the Court of Industrial Relations that the work of the personnel in the construction, sewerage, maintenance, machineries and shops of petitioner is not continuous as to require staggering.

In resolving this issue, the industrial court justified the staggering of the work days of those holding positions as pump operators, valve operators, filter operators, chlorine operators, watchmen and guards, and those in the medical service for the reason that the same was made pursuant to the authority granted by the President who in the valid exercise of the powers conferred upon him by Republic Act No. 1880 could prescribe the working days of employees and laborers in government-owned and controlled corporations depending upon the exigencies of the service. The court, however, stated that the staggering should not apply to the personnel in the construction, sewerage, maintenance, machineries and shops because they work below 365 days a year and their services are not continuous to require staggering.

TESTS – FIELD PERSONNELAuto Bus Transport Systems, Inc. v. Bautista

May 16, 2005 Chico-Nazario

Doctrine:The disposition of the first issue revolves around the proper interpretation of Article 95 of the Labor

Code vis-à-visSection 1(D), Rule V, Book III of the Implementing Rules and Regulations of the Labor Code which provides:

Art. 95. RIGHT TO SERVICE INCENTIVE LEAVE

(a) Every employee who has rendered at least one year of service shall be entitled to a yearly service incentive leave of five days with pay.

Book III, Rule V: SERVICE INCENTIVE LEAVESECTION 1. Coverage. – 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 perusal 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.

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

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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 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. 

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.

Fast Facts:Bautista has been employed by Auto Bus as driver-conductor since 1995. He is paid on commission basis. In 2000, the bus Bautista was driving bumped the rear of another bus of his ER. The management made him shoulder 30% (P75k+++) of the expenses for the repair of the damaged bus and since he did and could not pay for it, he was terminated.Bautista filed a complaint for Illegal Dismissal with Money Claims for nonpayment of 13th month pay and service incentive leave pay.However, the ER was able to prove that Bautista’s employment is replete with offenses and that he was given due process before termination. So, there was no illegal dismissal but he was entitled to 13th month and service incentive leave pay.

Far-East Agri Supply v Labatique

Fast FactsPetitioner Far East Agricultural Supply, Inc. (Far East) hired private respondent Jimmy Lebatique as

truck driver. Lebatique complained of nonpayment of overtime work ever since he started working for the company. After talking to Manuel Uy, brother of Far East’s General Manager, Alexander terminated Lebatique and told him to look for another job. Hence, Lebatique filed a complaint for illegal dismissal and nonpayment of overtime pay.The issue is whether or not Lebatique was a field personnel, not entitled to overtime pay. The court held that Lebatique is not a field personnel because (1) company drivers, including Lebatique, are directed to deliver the goods at a specified time and place; (2) they are not given the discretion to solicit, select and contact prospective clients; and (3) Far East issued a directive that company drivers should stay at the client’s premises during truck-ban hours which is from 5:00 to 9:00 a.m. and 5:00 to 9:00 p.m. Drivers, like Lebatique, are under the control and supervision of management officers. Lebatique, therefore, is a regular employee. Thus, he is entitled to the benefits accorded to regular employees of Far East, including overtime pay and service incentive leave pay.

DoctrineArticle 82 of the Labor Code provides that "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.In Auto Bus Transport Systems, Inc. v. Bautista, the Court emphasized 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. 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 determine 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

UNION OF FILIPRO EMPLOYEES (UFE) VS. BENIGNO VIVAR, JR., NLRC & NESTLÉ

PHILIPPINES, INC. (FILIPRO, INC.)G.R. No. 79255 January 20, 1992 GUTIERREZ,

JR.

Facts: The sales personnel of Filipro (Nestle now)

were excluded from the holiday pay award and

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the change of the divisor in the computation of benefits from 251 to 261 days.

On November 8, 1985, respondent filed with NLRC a petition for declaratory relief seeking a ruling on its rights and obligations respecting claims of its monthly paid employees for holiday pay based on Chartered Bank Employees Association v. Ople.

On January 2, 1980, Arbitrator Vivar told Filipro to pay its monthly paid employees holiday pay pursuant to Article 94 of the Code, subject only to Article 82 and such other legal restrictions as are provided for in the Code.

Filipro filed a motion for clarification. Arbitrator - effectivity of the holiday pay award

IS November 1, 1974, the date of effectivity of the Labor Code; sales personnel are field personnel and so are not entitled to holiday pay; the divisor should be changed from 251 to 261. Ordered the reimbursement of overpayment for overtime, night differential, vacation and sick leave pay bec. of 251 days as divisor.

Issue: 1) WON Nestle's sales personnel are entitled to holiday pay.2) WON the divisor should be changed from 251 to 261 days.3) WON the use of 251 as divisor resulted in overpayment.4) Beginning when HP should be computed.

Held: 1) No. 2)Yes. 3) No. 4)Rationale:1) Under Art. 82, field personnel are not entitled to holiday pay. Field personnel = "non-agritultural employees who regularly perform their duties away from the principal place of business or branch office of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty." Sales personnel start field work at 8:00 a.m. after reporting to the office and report back at 4:00/4:30 p.m. if they are Makati-based. The law requires that actual hours of work in the field be reasonably ascertained. The company has no way of determining WON these sales personnel really spend the hours in between in actual field work. This requirement for the salesmen is but an exercise of purely management prerogative of providing administrative control. Rule IV, Book III of the Implementing Rules which provides that the rule shall apply to all employees except field personnel and other employees whose time and performance is unsupervised by the employer. The clause "whose time and performance is unsupervised by the employer" merely interpreted/expounded the clause "whose actual hours of work in the field cannot be determined with reasonable certainty." The former clause is still within the scope of Art. 82 which defines field personnel. So, WON an

employee's actual working hours in the field can be determined with reasonable certainty WON the employee's time and performance is constantly supervised by the employer.

The criteria for granting incentive bonus (sales/collection) indicate that these sales personnel are given incentive bonuses precisely because of the difficulty in measuring their actual hours of field work. They are evaluated by the result of their work and not by the actual hours of work. A salesman mostly works individually. There are no restrictions in the time he works. He earns as much or as little, within the range of his ability, as his ambition dictates. In lieu of overtime, he receives commissions. He works away from his employer's place of business, is not subject to the personal supervision of his employer, and his employer has no way of knowing the number of hours he works per day.

2) The divisor assumes an important role in determining whether or not holiday pay is already included in the monthly paid employee's salary and in the computation of his daily rate. In Chartered Bank Employees Association v. Ople  the Chartered Bank, in computing overtime compensation for its employees, employs a "divisor" of 251 days. The 251 working days divisor is the result of subtracting all Saturdays, Sundays and the ten (10) legal holidays from the total number of calendar days in a year. If the employees are already paid for all non-working days, the divisor should be 365 and not 251. In the petitioner's case, its computation of daily ratio since September 1, 1980, is as follows [(monthly rate x 12 months)/251 days].

Following the criterion laid down in the Chartered Bank case, the use of 251 days' divisor by respondent Filipro indicates that holiday pay is not yet included in the employee's salary, otherwise the divisor should have been 261. The daily rate, assuming there are no intervening salary increases, is a constant figure for the purpose of computing overtime and night differential pay and commutation of sick and vacation leave credits. Necessarily, the daily rate should also be the same basis for computing the 10 unpaid holidays.

3) The v. arbitrator's order to change the divisor from 251 to 261 days would result in a lower daily rate which is violative of the prohibition on non-diminution of benefits found in Article 100 of the Labor Code. If the divisor is adjusted to 261 days, then the dividend (employee's annual salary) should be increased to incorporate the holiday pay. So, there is no merit in respondent Nestle's claim of overpayment of overtime and night differential pay and sick and vacation leave

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benefits, the computation of which are all based on the daily rate, since the daily rate is still the same before and after the grant of holiday pay.

4) Nestle, relying on the implicit validity of the implementing rule and policy instruction before this Court nullified them, and thinking that it was not obliged to give holiday pay benefits to its monthly paid employees, may have been moved to grant other concessions to its employees, especially in the collective bargaining agreement. Nestle's employees are among the highest paid in the industry. It would be unfair to impose additional burdens on Nestle when the non-payment of the holiday benefits up to 1984 was not in any way attributed to Nestle's fault. So, grant of holiday pay should be effective, not from the date of promulgation of the Chartered Bank case nor from the date of effectivity of the Labor Code, but from October 23, 1984, the date of promulgation of the IBAA case.

Judgment: The order of the voluntary arbitrator is modified. The divisor to be used in computing holiday pay shall be 251 days. HP shall be computed from October 23, 1984.

Salazar v NLRC (April 17, 1996) Kapunan

Doctrines: Field personnel are those who perform their duties in the project site or away from the principal place or business of their employer. It does not include managerial employees.

Facts: H.L. Carlos Construction employed

Engineer Salazar as a project engineer for the construction of a building. When the building was completed, Salazar received a memorandum of his termination. Salazar filed a complaint for illegal dismissal and non-payment of wages and other benefits (overtime, service incentive leave pay, commission, allowance, profit-sharing, separation pay).

The Court held that Salazar was a managerial employee and not entitled to the benefits he sought to recover. Salazar tried to argue that since he performs his duties in the project site or away from the principal place of business of his employer, he falls under the category of “field personnel” and that his actual working hours can be determined as evidence by the vouchers containing payments of salries and overtime services; but the Court disagreed with him. The nature of his work was supervisory-engineering and even if he was not strictly a ‘managerial employee”, he still falls within the category of “officers or members of a managerial staff”; therefore exempt from receiving such benefits.

Salazar tried to argue that the NLRC failed to give weight to the fact that the company compensated him for his overtime services as indicated in various disbursement vouchers. The Court held that that Salazar was paid overtime benefits does not automatically and necessarily denote that he is entitled to such benefits.

Mercidar Fishing Corporation v. NLRCG.R. No. 112574, 08 October 1998, 297 SCRA

440Ponente: Mendoza

FACTS: Fermin Agao Jr. filed a case of illegal

dismissal, alleging that Mercidar has constructively dismissed him from employ after he took a one month leave. After his leave, the company refused to give him work. He asked for a certificate of employment but was made to come back after 3 days. When he returned, instead he was asked to resign.

Mercidar Fishing on the other hand alleged that Fermin did not return after his leave, and was AWOL for 3 months; that he was assigned to another vessel but he was left behind. When he asked for a certificate of employment it was under the pretext that he was looking for work in another company. He refused to get the certificate and resign unless he was given separation pay.

LA ordered reinstatement with payment of backwages, 13 month pay and incentive leave pay

Mercidar appealed to NLRC claiming that it should not be held liable for incentive leave pay because Fermin was considered as filed personnel and thus not entitled to such benefit. NLRC denied his petition

ISSUE:1. WON NLRC erred in holding that Fermin

cannot be classified as a field personnel2. WON NLRC committed grave abuse of

discretion when it found that there has been constructive dismissal

HELD: No.1. The contested provision is :

ART. 82. Coverage. — The provisions of this title [Working Conditions and Rest Periods] shall apply to employees in all establishments and undertakings whether for profit or not, but not to government employees, field personnel, members of the family of the employer who are dependent on him for support, domestic helpers, persons in the personal service of another, and workers who are paid by results as determined by the Secretary of Labor in appropriate regulations.xxx xxx xxx

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"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 certaintyMercidar claims that being a fisherman, the work of Fermin is performed away from business, and his actual number of hours worked cannot be verified, qualifying him as a field personnel. The court cited the case of Nestle personnel where it held that in the case of salesmen, while they have to report at appointed hours in the office, it cannot be ascertained whether they actually worked or not ouside the office. In the case at bar, since they are fishermen they cannot leave the fishing vessel in the meantime, rendering them under full effective control and supervision of the company.

2. There was no abuse of discretion that transpired in the instant case because the LA and NLRC based their findings on factual evidence (showing of medical certificate) supported by evidence on record.

Petition of Mercidar dismissed.

RATIONALE EXEMPTION – PIECE WORKERRED COCONUT PRODUCTS V. CIR

June 30, 1966 J. Bengzon

Doctrine: Although the Eight-Hour Labor Law provides that it does not cover those workers who prefer to be paid on piece-work basis, nothing in said law precludes an agreement for the payment of overtime compensation to piece workers

FACTS: Workers of Red Coconut Products entered into

a CBA with the company in 1958 and also in 1961 one of the provisions provides for payment of night shift differentials

There were 2 groups of workers Group A – 3 shifts; Group B- 2 shifts.

35c for the second shift, 55c for the third shift Group B workers said they receive only 55c and

were asking for 35c more CIR said workers were engaged in piece-work

basis and not entitled to overtime pay under the eight-hour labor law but CBA was meritorious and said that payments should be uniform (90c)

ISSUE: WON petitioners are entitled to 90c of payment for night shift differential even if they were allegedly piece-workers

HELD: Yes

RATIO:

Although the Eight-Hour Labor Law provides that it does not cover those workers who prefer to be paid on piece-work basis, nothing in said law precludes an agreement for the payment of overtime compensation to piece workers

The fact that the company and the union agreed to a CBA and actually paid for the differentials (even if not in full) shows that the company freely adhered to an application and implementation of the eight-hour labor law

SC thinks that laborers are not in the full concept of piece-workers since they have fixed hours of work

Philosophy of exclusion of piece-workers is that they are paid depending upon the work they do “irrespective of the amount of time employed” in doing said work

5.03 NORMAL HOURS OF WORK – 83Art. 83. Normal hours of work. The normal hours of work of any employee shall not exceed eight (8) hours a day.

Health personnel in cities and municipalities with a population of at least one million (1,000,000) or in hospitals and clinics with a bed capacity of at least one hundred (100) shall hold regular office hours for eight (8) hours a day, for five (5) days a week, exclusive of time for meals, except where the exigencies of the service require that such personnel work for six (6) days or forty-eight (48) hours, in which case, they shall be entitled to an additional compensation of at least thirty percent (30%) of their regular wage for work on the sixth day. For purposes of this Article, "health personnel" shall include resident physicians, nurses, nutritionists, dietitians, pharmacists, social workers, laboratory technicians, paramedical technicians, psychologists, midwives, attendants and all other hospital or clinic personnel.

5.04 HOURS WORKED – 84Art. 84. Hours worked. Hours worked shall include (a) all time during which an employee is required to be on duty or to be at a prescribed workplace; and (b) all time during which an employee is suffered or permitted to work.

Rest periods of short duration during working hours shall be counted as hours worked.

IDLE TIMENational Development Co vs. Court of Industrial Relations

Facts: National Development Co is a government-owned and controlled corporation were there were four shifts of work (8am-4pm, 6am-2pm, 2pm-10pm, 10pm-6am). For each shift there was a one-hour mealtime period, and for each shift, the workers are credited with eight hours of work. However, since 1953, whenever workers in one

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shift were required to continue working until the next shift, petitioner instead of crediting them with eight hours of overtime work, has been paying them for six hours only, petitioner claiming that the two hours corresponding to the mealtime periods should not be included in computing compensation. The issue in this case was whether mealtime breaks should be considered working time and the Court ruled in this case that yes the meal times were part of the working hours.

Doctrine: Under the law, the idle time that an employee may spend for resting and during which he may leave the spot or place of work though not the premises of his employer, is not counted as working time only where the work is broken or is not continuous. No general rule can be laid down as to what constitutes compensable work, but under Section of CA 444, such a time for eating can only be segregated or deducted from his work if the same is not continuous and the employee can leave his working place and rest completely.

Luzon Stevedoring Co. vs. Luzon Marine Department Union

G.R. No. L-9265 / April 29, 1957 / En Banc / Felix, J.

Facts: Respondent Luzon Marine Department Union filed a petition with the CIR containing several demands against herein petitioner Luzon Stevedoring Co., Inc., among which were the petition for full recognition of the right of COLLECTIVE bargaining, close shop and check off. They held a strike which was later declared illegal by the SC. In view of said ruling, the Union filed a "Constancia" with the Court of Industrial Relations praying that the remaining unresolved demands of the Union one of which is: That the work performed in excess of eight (8) hours he paid an overtime pay of 50 per cent the regular rate of pay, and that work performed on Sundays and legal holidays be paid double the regular rate of pay.

The Court found out that the company gave said employees 3 free meals every day and about 20 minutes rest after each mealtime; that they worked from 6:00 am. to 6:00 p.m. every day including Sundays and holidays, and for work performed in excess of 8 hours, the officers, patrons and radio operators were given overtime pay in the amount of P4 each and P2 each for the rest of the crew up to March. It is, therefore, only a matter of computation whether such over time pay by the respondent for overtime services rendered covers the actual overtime work performed by the employees concerned.

The members of the Union also prayed that those who had rendered services from 6:00 a.m. to 6:00 p.m. were entitled to 4 hours' overtime pay.

Is the definition for "hours of work" as presently applied to dryland laborers equally applicable to seamen? Or should a different criterion be applied by virtue of the fact that the seamen's employment is completely different in nature as well as in condition of work from that of a dryland laborer?

Petitioner company argues that although the seamen concerned stayed in petitioner's tugboats, or merely within its compound, for 12 hours, yet their work was not continuous but interrupted or broken. It has been the consistent stand of petitioner that while it is true that the workers herein were required to report for work at 6:00 a.m. and were made to stay up to 6:00 p.m., their work was not continuous and they could have left the premises of their working place were it not for the inherent physical impossibility peculiar to the nature of their duty which prevented them from leaving the tugboats. Section 1 of Commonwealth Act No. 444, known as the Eight-Hour Labor Law, provides:

SEC. 1. The legal working day for any person employed by another shall be of not more than eight hours daily. When the work is not continuous, the time during which the laborer is not working AND CAN LEAVE HIS WORKING PLACE and can rest completely, shall not be counted.

Interpretation of this provision / Working place: a laborer need not leave the premises of the factory, shop or boat in order that his period of rest shall not be counted, it being enough that he "cease to work", may rest completely and leave or may leave at his will the spot where he actually stays while working, to go somewhere else, whether within or outside the premises of said factory, shop or boat. If these requisites are complied with, the period of such rest shall not be counted.

The Court said that the claimants herein rendered services to the Company from 6:00 a.m. to 6:00 p.m. including Sundays and holidays, which implies either that said laborers were not given any recess at all, or that they were not allowed to leave the spot of their working place, or that they could not rest completely. 

Laches: There is no question that the right of the laborers to overtime pay cannot be waived. But there may be cases in which the silence of the employee or laborer who lets the time go by for quite a long period without claiming or asserting his right to overtime compensation may favor the inference that he has not worked any such overtime or that his extra work has been duly compensated.

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It is of common occurrence that a workingman has already rendered services in excess of the statutory period of 8 hours for some time before he can be led or he can muster enough courage to confront his employer with a demand for payment thereof. Fear of possible unemployment sometimes is a very strong factor that gags the man from asserting his right under the law and it may take him months or years before he could be made to present a claim against his employer. To allow the workingman to be compensated only from the date of the filing of the petition with the court would be to penalize him for his acquiescence or silence which We have declared in the case of the Manila Terminal Co. vs. CIR, supra, to be beyond the intent of the law. It 

What if the the delay in asserting the right to back overtime compensation causes an unreasonable or irreparable injury to the employer (the accumulation of such back overtime wages may become so great that their payment might cause the bankruptcy or the closing of the business of the employer)?

Perhaps this situation may occur, but We shall not delve on it this time because petitioner does not claim that the payment of the back overtime wages it is ordered to pay to its claimant laborers will cause the injury it foresees or force it to close its business, a situation which it speaks of theoretically and in general.

CONTINUOUS WORKStates Marine Corporation and Royal Line,

Inc., vs Cebu Seamen's Association, Inc.7 SCRA 294 / Feb. 27, 1963

EN BANC – Paredes

FACTS:Petitioners SMC and RLI operates several steamships of Philippine registry. Their workers have the respondent union make a CBA with SMC-RLI. Union filed a case, saying that the workers on board the vessels were not paid sick leave, vacation leave and overtime pay; that their salaries were reduced forcibly; that after the Minimum Wage Law had taken effect, the workers were required to pay the sum of P.40 for every meal, while the masters and officers were not required to pay their meals; and that a certain Captain Asensi who refused the reduction of salaries was dismissed and is now claiming backwages.

SMC-RLI argues that the work on board a vessel is one of comparative ease; that they have suffered financial losses in the operation of their vessels; that there is no law which provides for the payment of sick leave or vacation leave to employees or workers of private firms; that as regards the claim for overtime pay, the petitioners have always observed the provisions of Comm. Act No. 444, (Eight-Hour Labor Law), notwithstanding the fact

that it does not apply to those who provide means of transportation; that they were paying the workers according to their profits and other circumstances; that in enacting RA 602 (Minimum Wage Law), the Congress had in mind that the amount of P.40 per meal, furnished the employees should be deducted from the daily wages; that Captain Asensi was not dismissed for alleged union activities, but with the expiration of the terms of the contract between said officer and the company, his services were terminated.

ISSUES/SYLLABUS TOPICS and respective

DISCUSSIONS:Hours Worked—Continuous Work (p.21)There was only one worker, Severino Pepito, who was alleged to have worked overtime and yet not paid. He worked during the late hours of the evening and during the early hours of the day when the boat docks and unloads, and did other jobs such as removing rusts and cleaning the vessel, which overtime work totalled to 6 hours a day.

SC said “considering the established fact that the work of Severino Pepito was continuous, and during the time he was not working, he could not leave and could not completely rest, because of the place and nature of his work, the provisions of sec. 1, of Comm. Act No. 444 (Eight-Hour Labor Law), which states "When the work is not continuous, the time during which the laborer is not working and can leave his working place and can rest completely shall not be counted", find NO application in his case.”

Wage—Facilities and Supplements—Valuation of Meals and other Facilities (p.25)

- When the workers are hired, they are made to sign “shipping articles” which clearly state the salaries/wages they would receive. These articles have a stipulation that says the master of the vessel “will provide each member of the crew such daily subsistence as shall be mutually agreed daily upon between said master and crew; or, in lieu of such subsistence the crew may reserve the right to demand at the time of execution of these articles that adequate daily rations be furnished each member of the crew."

- It is, therefore, apparent that, aside from the payment of the respective salaries or wages, set opposite the names of the crew members, the SMC-RLI bound themselves to supply the crew with ship's provisions, daily subsistence or daily rations, which include food.

- They were indeed given food until August 4, 1951, when the Minimum Wage Law (RA 602) became effective. After this date, however, the companies began deducting

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the cost of meals from the wages or salaries of crew members; but no such deductions were made from the salaries of the deck officers and engineers in all the boats of SMC-RLI. SC said this is a “great and unjust discrimination”

- “We hold that such deductions are not authorized. In the coastwise business of transportation of passengers and freight, the men who compose the complement of a vessel are provided with free meals by the shipowners, operators or agents, because they hold on to their work and duties, regardless of "the stress and strain concomitant of a bad weather, unmindful of the dangers that lurk ahead in the midst of the high seas."

- Sec. 3 par. f of RA 602 (Minimum Wage Law) says: “Until and unless investigations by the Secretary of Labor on his initiative or on petition of any interested party result in a different determination of the fair and reasonable value, the furnishing of meals shall be valued at not more than 30 centavos per meal for agricultural employees and not more than 40 centavos for any other employees covered by this Act…” this is the GENERAL RULE.

- Sec 19 of RA 602 says: “Relations to other labor laws and practices.— Nothing in this Act shall deprive an employee of the right to seek fair wages, shorter working hours and better working conditions nor justify an employer in violating any other labor law applicable to his employees, in reducing the wage now paid to any of his employees in excess of the minimum wage established under this Act, or in reducing supplements furnished on the date of enactment.” This is the EXCEPTION.

- Atok Big Wedge Assn. vs. Atok Big Wedge Co. (CA decision, 1955)

o “"Supplements", therefore, constitute extra remuneration or special privileges or benefits given to or received by the laborers over and above their ordinary earnings or wages. "Facilities", on the other hand, are items of expense necessary for the laborer's and his family's existence and subsistence so that by express provision of law (Sec. 2[g]), they form part of the wage and when furnished by the employer are deductible therefrom, since if they are not so furnished, the laborer would spend and pay for them just the same.”

- “In short, the benefit or privilege given to the employee which constitutes an extra remuneration above and over his basic or ordinary earning or wage, is supplement;

and when said benefit or privilege is part of the laborers' basic wages, it is a facility. The criterion is not so much with the kind of the benefit or item (food, lodging, bonus or sick leave) given, but its purpose”

- “Considering, therefore, as definitely found by the CIR that the meals were freely given to crew members prior to August 4, 1951, while they were on the high seas "not as part of their wages but as a necessary matter in the maintenance of the health and efficiency of the crew personnel during the voyage", the deductions therein made for the meals given after August 4, 1951, should be returned to them, and the operator of the coastwise vessels affected should continue giving the same benefit.”

- If we follow SMC-RLI, then a crew member whose salary before RA 602 was P100, then we are to deduct P0.40 as meals, then he would only be getting P86 per month, which is way below the minimum wage of P122. Congress did not intend this!

- The meals here are SUPPLEMENTS!

WAITING TIMEArica v NLRC

February 28, 1989 Paras

Facts: Arica and others filed a complaint against

STANFILCO (Standard Phil. Fruits Corp.) regarding their assembly time, and award of moral damages and attorney's fees.

o They contend that the preliminary activities as workers of STANFILCO in the assembly area is compensable as working time (5:30-6:00 am) since these preliminary activities are necessarily and primarily for private respondent's benefit. First there is the roll call. This is

followed by getting their individual work assignments from the foreman.

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.

Then they go to the stockroom to get the working materials, tools and equipment.

Lastly, they travel to the field bringing with them their tools, equipment and materials.

LA dismissed the complaint. It held that the 30-minute assembly time cannot be compensated because it cannot be considered waiting time or work time. According to LA, this ruling has

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become the law of the case which can no longer be disturbed without doing violence to the time- honored principle of res-judicata.

NLRC affirmed LA. MR denied. STANFILCO: Instant complaint is not new (i.e.

ruling in Associated Labor Union v STANFILCO).

Issues: 1. WON 30-minute assembly time is compensable

under the Labor Code2. WON NLRC committed grave abuse of

discretion

Held: No (for both).

Ratio: Associated Labor Union v STANFILCO

(Citing Minister of Labor – Blas Ople): “The thirty minute assembly time long practiced and institutionalized by mutual consent of the parties under Article IV, Section 3, of the Collective Bargaining Agreement cannot be considered as waiting time within the purview of Section 5, Rule I, Book III of the Rules and Regulations Implementing the Labor Code. Said time is a deeply- rooted, routinary practice of the employees, and the proceedings attendant thereto are not infected with complexities as to deprive the workers the time to attend to other personal pursuits. Also, employees 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. This, therefore, demonstrates the indubitable fact that the 30-minute assembly time was not primarily intended for the interests of the employer, but ultimately for the employees to indicate their availability or non-availability for work during every working day.”

NLRC cannot be faulted for ruling that petitioners' claim is already barred by res-judicata. The non-compensability of the claim having been earlier established (i.e. previous case), constitute the controlling legal rule or decision between the parties and remains to be the law of the case making this petition without merit.

Moreover, as a rule, the findings of facts of quasi-judicial agencies which have acquired expertise because their jurisdiction is confined to specific matters are accorded not only respect but at times even finality if such findings are supported by substantial evidence

Dispositive: PREMISES CONSIDERED, the petition is DISMISSED for lack of merit and the decision of the National Labor Relations Commission is AFFIRMED.

Sarmiento (Dissenting): GRANT THE PETITION. Res judicata is not a bar. ALU v STANFILCO is not a controlling precedent. It is evident that the Ople decision was predicated on the absence of any insinuation of obligatoriness in the course or after the assembly activities on the part of the employees. 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. As indicated, however, by the petitioners in the instant case, things had since changed (for these substantial changes, see 4 preliminary activities above), and the latter had since been placed under a number of restrictions. My considered opinion is that the thirty-minute assembly time had become, in truth and fact, a "waiting time" as contemplated by the Labor Code; hence, compensable.

TRAVEL TIMERada v. NLRC and Philnor Consultants and

Planners, Inc.January 9, 1992 Regalado

Doctrine:Anent the claim for overtime compensation, we hold that petitioner is entitled to the same. The fact that he picks up employees of Philnor at certain specified points along EDSA in going to the project site and drops them off at the same points on his way back from the field office going home to Marikina, Metro Manila is not merely incidental to petitioner's job as a driver. On the contrary, said transportation arrangement had been adopted, not so much for the convenience of the employees, but primarily for the benefit of the employer.

Private respondent does not hesitate to admit that it is usually the project driver who is tasked with picking up or dropping off his fellow employees. Proof thereof is the undisputed fact that when petitioner is absent, another driver is supposed to replace him and drive the vehicle and likewise pick up and/or drop off the other employees at the designated points on EDSA. If driving these employees to and from the project site is not really part of petitioner's job, then there would have been no need to find a replacement driver to fetch these employees. But since the assigned task of fetching and delivering employees is indispensable and consequently mandatory, then the time required of and used by petitioner in going from his residence to the field office and back, that is, from 5:30 a.m. to 7:00 a.m. and from 4:00 p.m. to around 6:00 p.m., which the labor arbiter rounded off as averaging three hours each working day, should be paid as overtime work. Quintessentially, petitioner should be given overtime pay for the three excess hours of work performed during working days from January, 1983 to December, 1985.

Fast Facts:

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In 1977, Rada was hired as driver under a Contract of Employment for a Definitie Period for the construction supervision phase of the Manila North Expressway Extension, 2nd Stage. However, after the phase for which he was hired for was finished, he was hired again for the other phases of the construction. This continuous rehiring was done until 1985 when the project was finally completed.

Part of Rada’s job was to drive his co-employees to and from the project site.

Rada was thereafter terminated since the project was already completed. He filed a complaint for non-payment of separation pay and overtime pay.

The issue in point under this topic is whether he is entitled to overtime payment for his travel from his house to his place of work.

ENTRY TIME CARDSAklan Electric Coop v NLRC

Fast FactsComplainants alleged that prior to the temporary transfer of the office of AKELCO from Lezo Aklan to Amon Theater, Kalibo, Aklan, they were continuously performing their task and were duly paid of their salaries at their main office located at Lezo, Aklan. However, they claim that from June 1992 up to March 18, 1993, those who continuously reported for work at Lezo, Aklan in compliance with a resolution were not paid their salaries.The issue is whether or not they were not indeed paid their salaries. The court held that the complainants failed to prove that they rendered services from June 16, 1992 to March 18, 1993 so as to entitle them to payment of wages. The pieces of evidence which the complainants presented: (a) letter requesting for the payment of private respondents’ unpaid wages from June 16, 1992 to March 18, 1993; (b) memorandum where Atty. Mationg made an assurance that he will recommend such request; (c) their own computation of their unpaid wages, did not establish the fact that they actually rendered services in the Kalibo office during the stated period.

DoctrineThere must be competent proof such as time cards or office records to show that they actually rendered compensable service during the stated period to entitle them to wages. It was incumbent upon the complainants to prove that they indeed rendered services for petitioner, which they failed to do. It is a basic rule in evidence that each party must prove his affirmative allegation.

EDUARDO B. PRANGAN VS.  NLRC, MASAGANA SECURITY SERVICES

CORPORATION, and/or VICTOR C. PADILLAG.R. No. 126529 April 15, 1998

ROMERO

Facts: Private respondent provides security services

to its clients and hired petitioner on November 4, 1980 as one of its security guards. Prangan was assigned to the Cat House Bar and Restaurant with a monthly salary of P2,000.00 until its closure on August 31, 1993.

On May 4, 1994, petitioner filed a complaint against private respondent for underpayment of wages, non-payment of salary from August 16-31, 1993, overtime pay, premium pay for holiday, rest day, night shift differential, uniform allowance, service incentive leave pay and 13th month pay from the year 1990 to 1993.

Private respondent claimed to be an agent of the Prangan in securing his employment. So, the liability for the claims of the petitioner should be charged to Cat House Bar and its owner, being his direct employer.

Labor Arbiter ordered Masagana Security Service Corporation and Victor C. Padilla to pay premium pay for holiday and rest days, night shift differential, service incentive leave pay, 13th month pay, uniform allowance, and unpaid salary based on a 4 hr work day.

Petitioner still appealed to NLRC saying that he worked twelve hours a day and not four. NLRC dismissed his appeal.

Issue: WON petitioner worked for 12 hours

Held: 12 HOURS.Rationale: Private respondent submitted the forged daily

time records showing that petitioner only worked four hours daily. Petitioner argues that he was not required to submit one. There is no dispute that matters concerning an employees actual hours of work are within the ambit of management prerogative. However, when an employer alleges that his employee works less than the normal hours of employment as provided for in the law, he bears the burden of proving his allegation with clear and satisfactory evidence.

The NLRC relied solely on the supposed daily time records of the petitioner submitted by the private respondent. However, these documents cannot be considered substantial evidence as to conclude that petitioner only worked for four hours. The petitioner said he never made nor submitted any daily time record and his signature was forged.

Private respondent has unlimited access to all relevant documents and records on the hours

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of work of the petitioner. No employment contract, payroll, notice of assignment or posting, cash voucher or any other convincing evidence which may attest to the actual hours of work of the petitioner were even presented.

In said alleged daily time record, it showed that petitioner started work at 10:00 p.m. and would invariably leave his post at exactly 2:00 a.m. Such unvarying recording of a daily time record is improbable and contrary to human experience. It is impossible for an employee to arrive at the workplace and leave at exactly the same time, day in day out. The very uniformity and regularity of the entries are badges of untruthfulness and as such indices of dubiety.

In the personnel data sheet of the petitioner, duly signed by the formers operation manager, it shows on its face that his hours of work are from 7:00 p.m. to 7:00 a.m. or twelve hours a day. Hence, private respondent is estopped from assailing the contents of its own documents.

The attendance sheets of Cat House Bar and Restaurant showed that petitioner worked from 7:00 p.m. to 7:00 a.m. daily, documents which were never repudiated by the private respondent.

Judgment: The petition is granted. Whatever money claims due to the petitioner shall be computed on the basis of a twelve-hour daily work schedule. Remanded to the Labor Arbiter for immediate recomputation of claims.

Nicario v NLRC (September 17, 1998)Ponente: Romero

Topic: Entry Time Card

Doctrines: In evaluating the evidentiary value of daily time records especially those which show uniform entries with regard to the hours of work rendered by an employee, the Court has ruled that “such unvarying recording of a daily time record is improbable and contrary to human experience. It is impossible for an employee to arrive at a workplace and leave at exactly the same time, day in day out. The uniformity and regularity of the entries are badges of untruthfulness and as such indices of dubiety.”

Facts: Emelita Nicario is a sales supervisor of

Mancao Supermarket. When she was terminated, she filed a complaint for illegal dismissal with prayer for backwages, wage differential, service incentive leave pay, overtime pay, 13th month pay, and unpaid wages. The LA awarded all except for the holiday premium pay and unpaid salaries. The NLRC affirmed the decision of the LA but deleted the award for overtime pay.

Nicario claimed that she worked for 12 hours a day from 7:30am – 7:30pm, thus rendering overtime work for 4 hours each day. The LA based its decision on the fact that all Mancao establishments open at 8:00am and close at 8:00pm.

The NLRC however gave more credence to the daily time records (DTRs) presented by the company which showed that Nicario worked only 8 hours a day from 9:00am-12:00pm and 2:00pm-7:00pm.

The Court held that the DTRs were unreliable because:1) The originals were not presented in evidence2) They made it appear that Nicario had a 2-hour rest period which is highly unusual for a store establishment because employees should attend to customers almost every minute as well as contrary to the judicial notice that no noon break is observed3) All entries were suspiciously consistent: Nicario never reported earlier than 9:00am and never went home later than 8:00pm

The Court agreed with the LA and took notice that all establishments open at 8:00am and close at 8:00pm with no noon break so it was believable tat employees rendered 4 ½ hours of overtime, 7 days a week. It is also a well-settled doctrine that if doubt exists between the evidence presented by the employer and the employee, the scales of justice may be tilted in favor of the latter.

5.05 MEAL PERIOD – 85Art. 85. Meal periods. Subject to such regulations as the Secretary of Labor may prescribe, it shall be the duty of every employer to give his employees not less than sixty (60) minutes time-off for their regular meals.

MEAL TIME – FREE TIMEPAL vs. NLRC

GR 132805 Puno

FACTS: Private respondent was employed as flight

surgeon at petitioner company Philippine Air Lines (PAL). He was assigned at the PAL Medical Clinic at Nichols. On February 17, 1994, at around 7:00 in the evening, private respondent left the clinic to have his dinner at his residence, which was about five minute-drive away.

A few minutes later, the clinic received an emergency call. The nurse on duty called private respondent at home to inform him of the emergency. When private respondent reached the clinic around 7:50 in the evening, the nurse on duty had already left with the patient. The patient died the following day.

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The Chief Flight Surgeon required private respondent to explain why no disciplinary sanction should be taken against him.

In his explanation, private respondent asserted that he is entitled to a thirty-minute meal break; that he immediately left his residence after being informed by the nurse about the emergency; that the nurse panicked and brought the patient to the hospital without waiting for him.

Finding his explanation unacceptable, the management charged private respondent with abandonment of post while on duty. In his answer, private respondent denied the charge. He said that he only left his clinic to have his dinner at home and he returned at 7:51 in the evening upon being informed of the emergency.

After evaluating the charge, as well as the answer of private respondent, PAL decided to suspend private respondent for three months. Private respondent filed a complaint for illegal suspension against petitioner.

The Labor Arbiter rendered a decision finding the suspension illegal. Petitioner appealed to the NLRC. The NLRC dismissed the appeal after finding that the decision of the Labor Arbiter is supported by the facts on record and the law on the matter.

ISSUE: WON Respondent was to be held liable for abandonment of work

HELD: No.Supreme Court held that there was no abandonment of work and that public respondent NLRC did not err in nullifying the three-month suspension of private respondent. The NLRC, however, erred in awarding moral damages to private respondent.

There was no abandonment as the doctor’s house was a few minutes’ drive away and his whereabouts were known to the nurse on duty. He also arrived immediately after being informed of the incident.

Secondly, the 8 hour work period does not include the meal hour of the respondent and nowhere in the law does it state the respondent has to stay within the company premises during this time.

The award of moral damages was deleted because there was no malicious intent on the part of PAL to suspend him Provisions in Question in the case:

ARTICLE 85. Meal periods. — Subject to such regulations as the Secretary of Labor may prescribe, it shall be the duty of every employer to give his employees not less than sixty (60) minutes time-off for their regular meals.

Section 7, Rule I, Book III of the Omnibus Rules Implementing the Labor Code further states:

SECTION 7. Meal and Rest Periods. — Every employer shall give his employees, regardless of sex, not less than one (1) hour time-off for regular meals, except in the following cases when a meal period of not less than twenty (20) minutes may be given by the employer provided that such shorter meal period is credited as compensable hours worked of the employee;(a) Where the work is non-manual work in nature or does not involve strenuous physical exertion;(b) Where the establishment regularly operates not less than sixteen hours a day;(c) In cases of actual or impending emergencies or there is urgent work to be performed on machineries, equipment or installations to avoid serious loss which the employer would otherwise suffer; and(d) Where the work is necessary to prevent serious loss of perishable goods.Rest periods or coffee breaks running from five (5) to twenty (20) minutes shall be considered as compensable working time.

PAN AMERICAN AIRWAYS V. PAN AMERICAN EMPLOYEES ASSOCIATION

February 23, 1961 J.B.L. ReyesTopic: Meal time – free time

Doctrine: the straight 8-hour shift included the meal hour because it was no one of complete rest but actually a work hour since laborers had to be on ready call

FACTS: Company believes that the one-hour meal

period should not be considered overtime work because the evidence allegedly showed that employees could rest completely and were not in any manner under the control of the company

CIR said that during the meal periods, the mechanics were required to stand by for emergency work and they were reprimanded if they fail to be available

ISSUE: WON the meal period should be included as overtime work

HELD: YesRATIO: The straight 8-hour shift included the meal hour because it was no one of complete rest but actually a work hour since laborers had to be on ready call

5.06 OVERTIME WORK AND OFFSETTING PROHIBITION – 87-89

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Art. 87. Overtime work. Work may be performed beyond eight (8) hours a day provided that the employee is paid for the overtime work, an additional compensation equivalent to his regular wage plus at least twenty-five percent (25%) thereof. Work performed beyond eight hours on a holiday or rest day shall be paid an additional compensation equivalent to the rate of the first eight hours on a holiday or rest day plus at least thirty percent (30%) thereof.

Art. 88. Undertime not offset by overtime. Undertime work on any particular day shall not be offset by overtime work on any other day. Permission given to the employee to go on leave on some other day of the week shall not exempt the employer from paying the additional compensation required in this Chapter.

Art. 89. Emergency overtime work. Any employee may be required by the employer to perform overtime work in any of the following cases:

When the country is at war or when any other national or local emergency has been declared by the National Assembly or the Chief Executive;

When it is necessary to prevent loss of life or property or in case of imminent danger to public safety due to an actual or impending emergency in the locality caused by serious accidents, fire, flood, typhoon, earthquake, epidemic, or other disaster or calamity;

When there is urgent work to be performed on machines, installations, or equipment, in order to avoid serious loss or damage to the employer or some other cause of similar nature;When the work is necessary to prevent loss or damage to perishable goods; andWhere the completion or continuation of the work started before the eighth hour is necessary to prevent serious obstruction or prejudice to the business or operations of the employer.

Any employee required to render overtime work under this Article shall be paid the additional compensation required in this Chapter.

Art. 90. Computation of additional compensation. For purposes of computing overtime and other additional remuneration as required by this Chapter, the "regular wage" of an employee shall include the cash wage only, without deduction on account of facilities provided by the employer.

DEFINITION AND RATIONALE – OVERTIME PAYLetran Calamba Faculty and Employees

Association vs NLRC

Facts: The Letran Calamba Faculty and Employees Association filed a complaint against Colegio de

San Juan de Letran for collection of various monetary claims due its members. One of the allegations of the Association is that in the computation of the thirteenth month pay of its academic personnel, CSJL does not include as basis therefor their compensation for overloads; it only takes into account the pay the faculty members receive for their teaching loads not exceeding 18 units. The teaching overloads are rendered within 8 hours a day.

The basic salary of an employee is used as the basis in the determination of his 13th month pay. Any compensations or remunerations which are deemed not part of the basic pay is excluded as basis in the computation of the mandatory bonus. Petitioner argues that under the Revised Guidelines on the Implementation of the 13th-Month Pay Law, promulgated by the Secretary of Labor on November 16, 1987, the basic pay of an employee includes remunerations or earnings paid by his employer for services rendered, and that excluded therefrom are the cash equivalents of unused vacation and sick leave credits, overtime, premium, night differential, holiday pay and cost-of-living allowances. Petitioner claims that since the pay for excess loads or overloads does not fall under any of the enumerated exclusions and considering that the said overloads are being performed within the normal working period of eight hours a day, it only follows that the overloads should be included in the computation of the faculty members' 13th-month pay.

Doctrine: In resolving the issue of the inclusion or exclusion of overload pay in the computation of a teacher's 13th-month pay, it is decisive to determine what "basic salary" includes and excludes. In the same manner that payment for overtime work and work performed during special holidays is considered as additional compensation apart and distinct from an employee's regular wage or basic salary, an overload pay, owing to its very nature and definition, may not be considered as part of a teacher's regular or basic salary, because it is being paid for additional work performed in excess of the regular teaching load.

Caltex Regular Employees vs. Caltex Phils. IncG.R. No. 111359 / August 15, 1995 / 3rd

division / Feliciano, J.

Facts: Petitioner Union and private respondent Caltex (Philippines), Inc. ("Caltex") entered into a Collective Bargaining Agreement ("1985 CBA") which was to be in effect until midnight of 31 December 1988. The CBA included, among others, the following provision:

ARTICLE IIIHOURS OF WORK

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In conformity with Presidential Decree 442, otherwise known as the Labor Code of the Philippines, as amended, the regular work week shall consist of eight (8) hours per day, seven (7) days, Monday through Sunday, during which regular rates of pay shall be paid in accordance with Annex B and work on the employee's one "Day of Rest," shall be considered a special work day, during which "Day of Rest" rates of pay shall be paid as provided in Annex B. Daily working schedules shall be established by management in accordance with the requirements of efficient operations on the basis of eight (8) hours per day for any five (5) days. Provided, however employees required to work in excess of forty (40) hours in any week shall be compensated in accordance with Annex B of this Agreement. 

(Huhuhu Annex B is a long list of equations)

The Union called Caltex's attention to alleged violations by Caltex of Annex "B" of the 1985 CBA, e.g. non-payment of night-shift differential, non-payment of overtime pay and non-payment at "first day-off rates" for work performed on a Saturday. Subsequently, Petitioner Union charged Caltex with shortchanging its employees when Caltex compensated work performed on the first 2 1/2 hours of Saturday, an employees' day of rest, at regular rates, when it should be paying at "day of rest" or "day off" rates.

Regular pay:1) Hourly rate = X2) OT Hourly Rate 12 MN = (X + 50% X)3) NSD 6 PM - 12 MN = (X + 25% X)4) OT Hourly Rate NSD 6 PM - 12 MN= (X + 25% X) + 50% (X + 25% X)5) NSD 12 MN - 6 AM = (X + 50% X)6) OT Hourly Rate NSD 12 MN - 6 AM= (X + 50% X) + 50% (X + 50% X)

Sunday as day off1. Hourly Rate = (X + 100% X)2. OT HR = (X + 100% X) + 50% (X + 100% X)3. NSD 6 PM - 12 MN= [ (X + 100% X) + 25% (X+ 100% X) ]4. OT Hourly Rate NSD 6 PM - 12 MN= [ (X + 100% X) + 25% (X + 100% X) ] +50% [ (X+ 100% X) + 25% (X + 100% X) ]5. NSD 12 MN - 6 AM= [ (X + 100% X) + 50% (X + 100% X) ]6. OT Hourly Rate NSD 12 MN - 6 AM= [ (X + 100% X) + 50% (X + 100% X) ] +50% [ (X + 100% X) + 50% (X + 100% X) ]

Caltex denied the accusations of the Union. It averred that Saturday was never designated as a day of rest, much less a "day-off". It maintained that the 1985 CBA provided only 1 day of rest and that is Sunday.

SC said that Article III provide that only "work on an employee's one day of rest "shall be paid on the basis of "day of rest rates". The relevant point here is that petitioner Union had never suggested that more than 1 day of rest had been agreed upon, and certainly Caltex had never treated Article III or any other portion of the CBAs as providing two (2) days of rest. Doctrine: Overtime work consists of hours worked on a given day in excess of the applicable work period, which here is eight (8) hours. It is not enough that the hours worked fall on disagreeable or inconvenient hours. In order that work may be considered as overtime work, the hours worked must be in excess of and in addition to the eight (8) hours worked during the prescribed daily work period, or the forty (40) hours worked during the regular work week Monday thru Friday.In the present case, under the 1985 CBA, hours worked on a Saturday do not, by that fact alone, necessarily constitute overtime work compensable at premium rates of pay, contrary to petitioner's assertion. These are normal or regular work hours, compensable at regular rates of pay, as provided in the 1985 CBA; under that CBA, Saturday is not a rest day or a "day off". It is only when an employee has been required on a Saturday to render work in excess of the forty (40) hours which constitute the regular work week that such employee may be considered as performing overtime work on that Saturday. We consider that the statutory prohibition against offsetting undertime one day with overtime another day has no application in the case at bar. 

PNB vs. PNB Employees Association (PEMA)115 SCRA 507 / July 30, 1982

EN BANC – Barredo(ok guys, this is long . SC copied 2 previous cases. Sinama ko na rin. And copied all the definitions in the case.)

DOCTRINE of this case according to SC itself:“Doctrinally, We hold that, in the absence of any specific provision on the matter in a collective bargaining agreement, what are decisive in determining the basis for the computation of overtime pay are two very germane considerations, namely, (1) whether or not the additional pay is for extra work done or service rendered and (2) whether or not the same is intended to be permanent and regular, not contingent nor temporary and given only to remedy a situation which can change any time. We reiterate, overtime pay is for extra effort beyond that contemplated in the employment contract, hence when additional pay is given for any other purpose, it is illogical to include the same in the basis for the computation of overtime pay. This holding supersedes NAWASA.”

FACTS:

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PEMA and PNB had a collective bargaining agreement, but the portion regarding the computation of overtime pay was disputed by the parties. Overtime pay was supposed to be an additional percentage of the basic salary (paid on top of the latter), but what is included in the basic salary is disputed. PEMA says the cost of living allowance (COLA) and longevity pay (not defined in the case but it is pay based on the length of service in the company, the longer you worked for them, the higher this pay) should be included in the basic salary (therefore the overtime pay would be bigger too). PNB says it should not, because these 2 are not work-related.

ISSUE/topic in syllabus:Definition and Rationale – Overtime Pay

HELD:The SC in the end said that these 2 are not part of the basic salary and thus could not be included in the computation of the overtime pay.

RATIO/DISCUSSION:The Court cited 2 previous cases. PEMA was basing its claim on the case of NAWASA. But SC said that is a special case with a special set of facts. Besides, there is a later case, Shell. Please see below.

RATIONALE OF OVERTIME PAY:“Why is a laborer or employee who works beyond the regular hours of work entitled to extra compensation called in this enlightened time, overtime pay? Verily, there can be no other reason than that he is made to work longer than what is commensurate with his agreed compensation for the statutorily fixed or voluntarily agreed hours of labor he is supposed to do. When he thus spends additional time to his work, the effect upon him is multi-faceted: he puts in more effort, physical and/or mental; he is delayed in going home to his family to enjoy the comforts thereof; he might have no time for relaxation, amusement or sports; he might miss important pre-arranged engagements; etc., etc. It is thus the additional work, labor or service employed and the adverse effects just mentioned of his longer stay in his place of work that justify and is the real reason for the extra compensation that he called overtime pay.”

“Overtime work is actually the lengthening of hours developed to the interests of the employer and the requirements of his enterprise. It follows that the wage or salary to be received must likewise be increased, and more than that, a special additional amount must be added to serve either as encouragement or inducement or to make up fop the things he loses which We (the SC) have already referred to. And on this score, it must always be borne in mind that wage is indisputably intended as payment for work done or services rendered. Thus, in the definition of wage for

purposes of the Minimum Wage Law, Republic Act No. 602 (old?), it is stated:'Wage' paid to any employee shall mean the remuneration or earnings, however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time task, piece, commission basis or other method of calculating the same, which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done or for services rendered or to be rendered and includes the fair and reasonable value as determined by the Secretary of Labor, of board, lodging or other facilities customarily furnished by the employer to the employee. 'Fair and reasonable value' shall not include a profit to the employer which reduces the wage received by the employee below the minimum wage applicable to the employee under this Act, nor shall any transaction between an employer or any person affiliated with the employer and the employee of the employer include any profit to the employer or affiliated person which reduces the employee's wage below the wage applicable to the employee under this Act.” (same definition in Labor Code Title II Chap 1 Sec 97)

Or simply put,“wage under said law, in whatever means or form it is given to the worker, is "for work done or to be done or for services rendered or to be rendered" and logically "includes (only) the fair and reasonable value as determined by the Secretary of Labor, of board, lodging or other facilities customarily furnished by the employer to the employee".And wage is NOT a supplement, which is defined as:“extra remuneration or benefits received by wage earners from their employers and include but are not restricted to pay for vacation and holidays not worked; paid sick leave or maternity leave; overtime rate in excess of what is required by law; pension, retirement, and death benefits; profit-sharing, family allowances; Christmas, war risk and cost-of-living bonuses; or other bonuses other than those paid as a reward for extra output or time spent on the job.”

NAWASA vs NAWASA Consolidated Unions (Aug 31, 1964)In this case, there were some employees of NAWASA who were working 7 days/week and paid a 25% Sunday differential. Then RA 1880 was enacted (1957), which provided that work hours for government employees are only 40hrs/week, PROVIDED that the monthly salaries they are receiving shall not be diminished by this reduction in work hours. Now, NAWASA filed a case and said that this law meant that the said workers’ basic daily wage should not include the 25% differential anymore because it would increase their daily wage after RA 1880. The CIR said that that can’t

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be, the salaries the workers were previously receiving should not be diminished by that RA.

The SC said that “It is evident that RA 1880 does not intend to raise the wages of the employees over what they are actually receiving. Rather, its purpose is to limit the working days in a week to five days, or to 40 hours without however permitting any reduction in the weekly or daily wage of the compensation which was previously received.” (a simpler way of putting it: they’ll work 5days/40 hours but the pay is the same as when they were working 7 days, i.e. including the 25% Sunday differential) And these employees are to be paid the same way 3 months after the implementation of RA 1880. Then the SC clearly expressed that this decision has limited application, because it did not take into consideration other bonuses, payments, allowances, money value of fringe benefits received outside the week or any other time in computing the basic daily wage (or weekly for these employees)Simple NAWASA (if read wrongly) doctrine: wage differential awarded on top of the regular wage is part of the regular wage after RA 1880Actual doctrine: wage differential paid because it was work-related is part of the regular wageEnter the case of…

Shell Oil Workers Union vs. Shell Co., et al. (March 31, 1976)(also Shell & Affiliates Supervisors Union vs. Shell Company of the Philippines, et al.,-- CIR case)In this case, the workers’ union wanted to include (for purposes of computing overtime pay) in the regular wage all these payments: all payments which the parties have agreed shall be received during the work week, including piece-work wages, differential payments for working at undesirable times, such as at night or on Sundays and holidays, and the cost of board and lodging customarily furnished the employee, incentive bonus or profit- sharing payments made in addition to the normal basic pay, and consider the higher night pay as regular pay because “the higher rate is merely an inducement to accept employment at times which are not at desirable form a workman's standpoint”, citing NAWASA and some US cases.

The SC said there that…- Usually, we don’t consider US cases in

computing overtime pay because what is overtime there is beyond 40hrs/week. Here, it is what is beyond 8hrs/day. 

- NAWASA is not doctrinal. There are special circumstances there (the fact that the employees were previously working 7 days/week and paid accordingly) that are not present in this case

- If we apply NAWASA to each and every case, it would be unjust. Every employee

then would have a different computation of overtime pay, the company would have to take note of his working hours history, it will take longer to pay him, and this would cause serious disputes then. Companies would be discouraged from paying fringe benefits and other bonuses, because it would increase the basic wage and in turn increase the overtime pay. NAWASA is NOT applicable here!

- One more reason is that the SC “is not prepared to accept that it can lay down a less cumbersome formula for a company-wide overtime pay other than that which is already provided in the collective bargaining agreement. Courts cannot make contracts for the parties themselves.”

- Yes, there is Comm. Act. 444 which said that overtime pay is at least 25% additional of the regular wage. YET, that law did not define what the regular wage is—because this is up to the workers/union and the employer to decide. What CA 444 emphasizes is that there should be an additional 25% (at least) as overtime pay

- Here the employees were already offered 4-6 times this rate as overtime pay (and this was a product of union-employer negotiations resulting in their CBA), so we can’t declare this CBA illegal

Simple Shell doctrine: CBA governs in determination of overtime pay beyond that of CA 444’s 25%BACK TO THE PRESENT CASE…

- PEMA argued that PNB started paying the COLA and longevity pay as per their CBA with PNB and after the NAWASA case was decided, so NAWASA should govern

- SC said we have already decided in Shell that NAWASA is not to apply in all cases. The facts here aren’t even the same as those in NAWASA

- The COLA was granted to the employee by the PNB to help its employees in these times of inflation and something something poetic whatever. Its nature is contingent, it’s not meant to be a regular payment (because it may decrease IF EVER cost of living should go down). It is NOT dependent on extra or special work of the employee. It is based on the needs of the families of these employees. (COLA payment here: P140/employee regardless of position or civil status, additional P10/minor dependent child).

- PEMA had long bargained for the inclusion of the COLA in the basic wage, but it was never granted by the PNB. PEMA seemed to have accepted it in good grace, for it accepted that decision of the PNB until this case.

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- The longevity pay is also NOT based on the amount of work done by the employee. it is “a gratuity for their loyalty, or their having been in the bank's employment for consideration periods of time.” The CBA also expressly states that this pay is not to be part of their basic salary.

- The court cannot impose terms and conditions to the parties in an employer-employee conflict inconsistent with existing law and jurisprudence, more so when the parties went to the court for clarification of legal issues and not because of that court’s arbitration powers.

- NAWASA NEVER referred to any “extra, temporary and contingent compensation unrelated to work done or service rendered, which as explained earlier is the very nature of cost-of- living allowance”

SC also said…“Doctrinally, We hold that, in the absence of any specific provision on the matter in a collective bargaining agreement, what are decisive in determining the basis for the computation of overtime pay are two very germane considerations, namely, (1) whether or not the additional pay is for extra work done or service rendered and (2) whether or not the same is intended to be permanent and regular, not contingent nor temporary and given only to remedy a situation which can change any time. We reiterate, overtime pay is for extra effort beyond that contemplated in the employment contract, hence when additional pay is given for any other purpose, it is illogical to include the same in the basis for the computation of overtime pay. This holding supersedes NAWASA.”There is a concurring by Aquino but it only followed the majority. Useless.

NO COMPUTATION FORMULA BASIC CONTRACT

MANILA TERMINAL CO., INC. (SUPRA)

BUILD IN COMPENSATIONEngineering Equipment, Inc. v Minister of

LaborSeptember 23, 1985 Aquino

Facts: Miguel Aspera, a mechanical engineer, worked

for Engineering Equipment, Inc. in Saudi Arabia for nearly a year at a monthly salary of P750 (P860) with a 6-day work week consisting of 10 working hours. He claims that his monthly salary should correspond to 8 hours of daily work only and that for the additional 2 hours daily, he was entitled to overtime pay at $1.2162 per hour or to $814.85 for 670 hours during 335 working days.

The Director of Employment Services and the National Labor Relations Commission sustained

his claim and awarded him that amount as overtime pay. They declared VOID the stipulation for a 10-hour working day because it was contrary to Section 83 of the Labor Code, formerly Eight-Hour Labor Law, which expressly provides that "the normal hours of work of any employee shall not exceed 8 hours a day" and to section 87 of the same Code which provides that work performed "beyond 8 hours a day" is treated as overtime work.

Engineering Equipment Inc. contends the following:o Section 82 of the Labor Code provides that

managerial employees are not entitled to overtime pay. Aspera was a managerial employee exercising supervision and control over its rank-and-file employees with power to recommend disciplinary action or their dismissal.

o Written contract signed was with a "built-in" overtime pay in the 10-hour working day and that the stipulated basic monthly pay was adjusted to reflect the higher amount covering the guaranteed two-hour extra time whether worked or unworked.

o Said contracts (with “built-in” overtime pay) were submitted to BES Director Jonathan M.R.A. de la Cruz, the same director who rendered the questioned decision He approved the same. Without his approval, the petitioner would not have stipulated the 10-hour work schedule and would have provided for a lower basic salary for an 8-hour working day.

o Aspera was given free board and lodging while in Saudi Arabia and free transportation in going to and returning from that country.

Issue: WON Acting Minister of Labor and Director De la Cruz committed a grave abuse of discretion amounting to lack of jurisdiction in awarding overtime pay

Held: YesRatio:We hold that under the particular circumstances of this case 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. Furthermore, Aspera had not denied that he was a managerial employee within the meaning of section 82. As such, he was not entitled to overtime pay.

Dispositive: The resolution of the Acting Minister of Labor dated November 16, 1981 is reversed and

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set aside. Aspera's complaint is dismissed. No costs.

PROOF OF WORKLAGATIC V. NLRC

January 28, 1998 J. Romero

Doctrine: Entitlement to overtime pay must first be established by proof that said overtime work was actually performed.

FACTS:• Lagatic was employed as a marketing specialist by Cityland where he solicits sales from clients and makes cold calls• Cold calls – practice of calling prospective clients using the telephone directory – more sales means less cold calls• Lagatic repeatedly failed to submit cold call reports and so he was reprimanded by the company to which he replied in a not “TO HELL WITH COLD CALLS! WHO CARES?”• He was asked to explain himself but denied making statements, he was dismissed for gross insubordination• LA says valid dismissal, affirmed by NLRC

ISSUE: WON he was validly dismissed; WON he is entitled to overtime pay

HELD: Yes; NoRATIO:• Requisites for valid dismissalO Due process – notice and hearing was compliedO Dismissal for a valid cause – employee was dismissed because of violation of a reasonable company rule• Requisites of willful disobedienceO Conduct must be willful/intentional characterized by a wrongful and perverse attitudeO Order violated must be reasonable, lawful, and made known to employee• Lagatic claims he is entitled to amounts deducted from his commissions• SC says that “petitioner failed to show his entitlement to overtime and rest day pay due to the lack of sufficient evidence as to the number of days and hours when he rendered overtime and rest day work. Entitlement to overtime pay must be established by proof that said overtime work was actually performed, before an employee may avail of said benefit”

SSS v CAFast FactsMargarita Tana, widow of the late Ignacio Tana, Sr., alleged that her husband was, before his demise, was an employee of Conchita Ayalde as a farmhand in the two (2) sugarcane plantations she owned. She further alleged that throughout the period that he worked, social security contributions, as well as medicare and employees compensation premiums were deducted from

Tana’s wages. It was only after his death that Margarita discovered that Tana was never reported for coverage, nor were his contributions/premiums remitted to the Social Security System (SSS). Consequently, she was deprived of the burial grant and pension benefits accruing to the heirs of Tana had he been reported for coverage.The issue is whether or not there was sufficient proof of Tana’s employment in Ayalde’s farmhand. The court held that the testimonial evidence of the claimant and her witnesses constitute positive and credible evidence of the existence of an employer-employee relationship between Tana and Ayalde. As the employer, the latter is duty-bound to keep faithful and complete records of her business affairs, not the least of which would be the salaries of the workers. And yet, the documents presented have been selective, few and incomplete in substance and content. Consequently, Ayalde has failed to convince the court that, indeed, Tana was not her employee. Hence, Tana was and should have been covered under the Social Security Law.

DoctrineNo particular form of evidence is required to prove the existence of an employer-employee relationship. Any competent and relevant evidence to prove the relationship may be admitted. For, if only documentary evidence would be required to show that relationship, no scheming employer would ever be brought before the bar of justice, as no employer would wish to come out with any trace of the illegality he has authored considering that it should take much weightier proof to invalidate a written instrument.

LAZARO V. DACUT, CESARIO G. CAJOTE, ROMERLO F. TUNGALA, LOWEL Z. ZUBISTA, and ORLANDO P. TABOY vs. CA, STA. CLARA

INTERNATIONAL TRANSPORT AND EQUIPMENT CORPORATION, and NICANDRO

LINAOG.R. No. 169434 March 28, 2008

QUISUMBING

Facts:Petitioners were crew members of a cargo vessel owned by Sta. Clara International Transport and Equipment Corporation. Dacut and Tungala resigned in July 1999 due to the vessel’s alleged unseaworthiness. Cajote went on leave from April 12-28, 1999 to undergo eye treatment. Fearing that he will be charged as Absent Without Leave (AWOL), Cajote resigned in June 1999.

On September 22, 1999, petitioners filed a complaint for constructive dismissal amounting to illegal dismissal (except for Zubista and Taboy); underpayment of wages, special and regular holidays; non-payment of rest days, sick and vacation leaves, night shift differentials, subsistence allowance, and fixed overtime pay;

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actual, moral and exemplary damages; and litigation costs and attorney’s fees.Labor Arbiter dismissed petitioners’ complaint ruling that there was sufficient evidence to prove that the vessel was seaworthy and that Cajote has incurred excessive unauthorized absences which would warrant his dismissal under the Labor Code. He noted that except for the holiday pay, accrued sick and vacation leaves, and wage differential, petitioners failed to substantiate their monetary claims.

Petitioners appealed to the NLRC. NLRC and CA affirmed the Labor Arbiter’s decision. 

Issues:(1) WON Dacut, Tungala and Cajote voluntarily resigned from their employment (Yes)(2) WON petitioners were entitled to their monetary claims. (No)

Rationale:As crew members, petitioners were required to stay on board the vessel by the very nature of their duties, and it is for this reason that, in addition to their regular compensation, they are given free living quarters and subsistence allowances when required to be on board. It could not have been the purpose of our law to require their employers to give them overtime pay or night shift differential, even when they are not actually working.

The correct criterion in determining whether they are entitled to overtime pay or night shift differential is not whether they were on board and cannot leave ship beyond the regular eight working hours a day, but whether they actually rendered service in excess of said number of hours. Petitioners failed to submit sufficient proof that overtime and night shift work were actually performed to entitle them to the corresponding pay.

Judgment: CA AFFIRMED.

Villar v NLRC (May 11, 2000)Ponente: Bellosillo

Doctrines: The general rule is that the burden rests on the defendant to prove payment, rather than on the plaintiff to prove non-payment. The reason for this rule is that pertinent personnel files, payrolls, records, remittances and other similar documents – which will show that overtime, differentials, service incentive leave and other claims of workers have been paid – are not in the possession of the worker but in the custody and absolute control of the employer.

Facts: Villar et al (petitioners) were employees of Hi-Tech Manufacturing Corporation (HI-TECH). They filed

for a certification election among the rank-and-file employees for a Union but they lost because majority voted for “No Union.” The following day, petitioners failed to report for work because they claimed that they were barred from the premises. Hi-Tech argued that they didn’t report to work because they lost the vote. Petitioners claimed that they were summarily dismissed for organizing a labor union and that they were paid below the minimum wage without overtime pay, service incentive leave pay and 13th month pay.

Hi-Tech presented in evidence joint affidavits of the petitioners (it stated that they weren’t illegally dismissed and it completely absolved Hi-Tech from any liability) and handwritten notes of two petitioners, Arturo and Exequiel Manimtim, which stated that the 2 asked for financial assistance and admission that they were the ones at fault.

The NLRC found that there was no record that the petitioners were terminated and that after they lost in the certification election, they refused to report to work for no justification. However, the Court held differently. Immediately after petitioners supposedly “refused to work”, several complaints for illegal dismissal against Hi-Tech were filed; and it was inconsistent with the concept of abandonment of work. Also, the statements of the employees acknowledging their guilt and absolutely exonerating their employer from liability, were rigidly and uniformly stated, and appeared too good to be true.

The NLRC next stated that petitioners’ claims for underpayment of wages, 13th month pay and service incentive leave pay were without basis. The Court disagreed and held that the joint affidavit specified their daily wages, positions and periods of employment and that the burden of proving payment rests on the employer.

EMPLOYER OBLIGATIONSSS vs. CA (SUPRA)

COMPUTATIONPCL Shipping Phil Inc v NLRC

511 SCRA 44 Austria – Martinez

FACTS:• The case comes to court under RULE 45, petition for certiorari • Seaman Rusel employed by PCL Shipping Phils jumped from the vessel he was assigned to and swam 2 nautical miles after he was denied medical assistance for the broken/sprained ankle injury he sustained after slipping. He took a life jacket and swam to shore, and was taken to a nearby hospital where he was confined for 8 days• The vessels’ agent found him and put him on a flight headed to the Philippines

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• Upon his return he filed a case for illegal dismissal, as well as claim for non-payment of wages, medical benefits, sick leave pay and damages

ISSUE: 1. WON desertion was committed by the seaman when he jumped off the ship and swam to shore2. WON the seaman was deserving of the benefits accorded to him by the NLRC when he was terminated with just cause and his repatriation should be considered in effect as to cancelling the awards of the NLRC based on the Memorandum circular No. 41HELD:1. For the claim of desertion to prosper, the person involved should have the intention to leave, and the intention not to return to his post. While the seaman left his post, it was to garner medical attention for his injury. The logs presented by PCL were self-serving and only proves his absence on board but not his intention to not return to his post.PCL contented that had the pain been unbearable, the seaman could not have swam to shore. The seaman’s hospitalization was not proven to have been caused by an ankle injury but after his repatriation to the Philippines, his medical examination showed the swelling – it was consistent evidence with his motive to jump off2. Part I of Memorandum Circular No. 41, which has almost identical provisions with Section 19 (C) of Memorandum Circular No. 055-96, provides as follows:SECTION H. TERMINATION OF EMPLOYMENT x xxx

6. If the vessel arrives at a convenient port within a period of three (3) months before the expiration of the Contract, the master/employer may repatriate the seaman from such port provided that the seaman shall be paid all his earned wages. In addition, the seaman shall also be paid his leave pay for the entire contract period plus a termination pay equivalent to one (1) month of his basic pay, provided, however, that this mode of termination may only be exercised by the master/employer if the original contact period of the seaman is at least ten (10) months; provided, further, that the conditions for this mode of termination shall not apply to dismissal for cause.

3. PCL’s argument is conflicting – if it claims desertion, it cannot later claim that he was terminated for just cause.

4. Furthermore, the Court finds nothing in the records to show that petitioners complied with the other conditions enumerated in the quoted memo, such as the payment of all of private respondent's earned wages

together with his leave pay for the entire contract period as well as termination pay equivalent to his one month salary.

5. PCL advances the theory that since they are under international/ maritime law, the requirements for due process should not apply – the court finds that the statutory provisions clearly state that our labor laws apply to Filipinos here and abroad.

6. Offset for repatriation cost is untenable – Part II of Memorandum Circular No. 41, to wit:SECTION H. REPATRIATION x xxx

2. When the seaman is discharged for disciplinary reasons, the employer shall have the right to recover the costs of maintenance and repatriation from the seaman's balance of wages and other earnings. x xxxThe employer shall have the right to recover the cost of repatriation from the seaman's wages and other earnings only if the concerned seaman is validly discharged for disciplinary measures. In the present case, since petitioners failed to prove that private respondent was validly terminated from employment on the ground of desertion, it only follows that they do not have the right to deduct the costs of private respondent's repatriation from his wages and other earnings

7. The grant of overtime pay by the NLRC has been modified by the SC- such should be paid if there is proof that service has been rendered beyond the required hours; in this case there was none.

5.07 NIGHT WORK – 86Art. 86. Night shift differential. Every employee shall be paid a night shift differential of not less than ten percent (10%) of his regular wage for each hour of work performed between ten o’clock in the evening and six o’clock in the morning.

RATIONALE PROHIBITIONThe Shell Company of Philippine Islands,

Limited v. National Labor UnionJuly 26, 1948 Briones

Doctrine:The case against nightwork, then, may be said to rest upon several grounds. In the first place, there are the remotely injurious effects of permanent nightwork manifested in the later years of the worker's life. Of more immediate importance to the average worker is the disarrangement of his social life, including the recreational activities of his leisure hours and the ordinary associations of

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normal family relations. From an economic point of view, nightwork is to be discouraged because of its adverse effect upon efficiency and output. A moral argument against nightwork in the case of women is that the night shift forces the workers to go to and from the factory in darkness. Recent experiences of industrial nations have added much to the evidence against the continuation of nightwork, except in extraordinary circumstances and unavoidable emergencies. The immediate prohibition of nightwork for all laborers is hardly practicable; its discontinuance in the case of women employees is unquestionably desirable. 'The night was made for rest and sleep and not for work' is a common saying among wage-earning people, and many of them dream of an industrial order in which there will be no night shift. (Labor Problems, 3rd Edition, pp. 325-328, by Watkins & Dodd.).

Fast Facts:Shell employs night workers for its services to international flights which land and take-off at night. The National Labor Union, wherein Shell’s employees are members, sent a petition to the Court of Industrial Relations asking for a salary that is 50% higher than that received by the day workers. CIR granted the petition and Shell contested the same saying that it is not within the power of the CIR to order payment of additional compensation. It also argued that nightworkers do not fall under the specific list of people who should be paid overtime pay.

The Supreme Court ruled that CIR has acted within its powers. And that nightwork is not considered overtime in the sense used in CA 444. Instead, it is also similar to a full day’s work except that it is done at night. Also, since nightwork is admittedly more burdensome and heavy, it is but fair and reasonable to give nightworkers higher remuneration.

DACUT VS. CA (SUPRA)

5.08 HOLIDAYMantle Trading Services, Incorporated vs

NLRC

Facts: Mantle Trading Services is a company engaged in the fishing business which hired Pablo Madriaga as a fish hauler. Subsequently, he became a “tagapuno” or someone who filled up tubs with fish. He worked from 6am – 6 pm with a daily pay of 150. Because Madriaga conducted certain alleged illicit incidents, one of the fish brokers submitted formal incident reports to the company. It was alleged that when he was about to be investigated for the two incident reports, Madriaga abandoned his work, which warranted his dismissal from service. The Labor Arbiter held the dismissal to be illegal for lack of due notice, and Madriaga was awarded with backwages,

separation pay, underpaid wages, and unpaid holiday pay. The Supreme Cour affirmed the ruling of the Labor Arbiter.Doctrine: Although petitioner had cause to terminate Madriaga, this has no bearing on the issue of award of salary differentials, holiday pay and 13th month pay because prior to his valid dismissal, he performed work as a regular employee of the company, and he is entitled to the benefits provided under the law. An employee should be compensated for the work he has rendered in accordance with the minimum wage, and must be appropriately remunerated when he was suffered to work on a regular holiday during the time he was employed by the petitioner company. As regards the 13th month pay, an employee who was terminated at any time before the time for payment of the 13th month pay is entitled to this monetary benefit in proportion to the length of time he worked during the year, reckoned from the time he started working during the calendar year up to the time of his termination from the service.

SECTION 6. CONDITIONS OF EMPLOYMENT-WEEKLY REST PERIODS

STATUTORY REFERENCE:ART. 91. Right to weekly rest day. - (a) It shall be the duty of every employer, whether operating for profit or not, to provide each of his employees a rest period of not less than twenty-four (24) consecutive hours after every six (6) consecutive normal work days.

(b) The employer shall determine and schedule the weekly rest day of his employees subject to collective bargaining agreement and to such rules and regulations as the Secretary of Labor and Employment may provide. However, the employer shall respect the preference of employees as to their weekly rest day when such preference is based on religious grounds.

ART. 92. When employer may require work on a rest day. - The employer may require his employees to work on any day:

(a) In case of actual or impending emergencies caused by serious accident, fire, flood, typhoon, earthquake, epidemic or other disaster or calamity to prevent loss of life and property, or imminent danger to public safety;

(b) In cases of urgent work to be performed on the machinery, equipment, or installation, to avoid serious loss which the employer would otherwise suffer;

(c) In the event of abnormal pressure of work due to special circumstances, where the employer

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cannot ordinarily be expected to resort to other measures;

(d) To prevent loss or damage to perishable goods;

(e) Where the nature of the work requires continuous operations and the stoppage of work may result in irreparable injury or loss to the employer; and

(f) Under other circumstances analogous or similar to the foregoing as determined by the Secretary of Labor and Employment.

ART. 93. Compensation for rest day, Sunday or holiday work. - (a) Where an employee is made or permitted to work on his scheduled rest day, he shall be paid an additional compensation of at least thirty percent (30%) of his regular wage. An employee shall be entitled to such additional compensation for work performed on Sunday only when it is his established rest day.chanrobles virtual law library

(b) When the nature of the work of the employee is such that he has no regular workdays and no regular rest days can be scheduled, he shall be paid an additional compensation of at least thirty percent (30%) of his regular wage for work performed on Sundays and holidays.

(c) Work performed on any special holiday shall be paid an additional compensation of at least thirty percent (30%) of the regular wage of the employee. Where such holiday work falls on the employee’s scheduled rest day, he shall be entitled to an additional compensation of at least fifty per cent (50%) of his regular wage.

(d) Where the collective bargaining agreement or other applicable employment contract stipulates the payment of a higher premium pay than that prescribed under this Article, the employer shall pay such higher rate.

BOOK III, RULE III, OMNIBUS RULES IMPLEMENTING THE LABOR CODE 

Weekly Rest PeriodsSECTION 1. General statement on coverage. — This Rule shall apply to all employers whether operating for profit or not, including public utilities operated by private persons.

SECTION 2. Business on Sundays/Holidays. — All establishments and enterprises may operate or open for business on Sundays and holidays provided that the employees are given the weekly rest day and the benefits as provided in this Rule.

SECTION 3. Weekly rest day. — Every employer shall give his employees a rest period of not less

than twenty-four (24) consecutive hours after every six consecutive normal work days.

SECTION 4. Preference of employee. — The preference of the employee as to his weekly day of rest shall be respected by the employer if the same is based on religious grounds. The employee shall make known his preference to the employer in writing at least seven (7) days before the desired effectivity of the initial rest day so preferred.

Where, however, the choice of the employee as to his rest day based on religious grounds will inevitably result in serious prejudice or obstruction to the operations of the undertaking and the employer cannot normally be expected to resort to other remedial measures, the employer may so schedule the weekly rest day of his choice for at least two (2) days in a month.

SECTION 5. Schedule of rest day. — (a) Where the weekly rest is given to all employees simultaneously, the employer shall make known such rest period by means of a written notice posted conspicuously in the work place at least one week before it becomes effective.

(b) Where the rest period is not granted to all employees simultaneously and collectively, the employer shall make known to the employees their respective schedules of weekly rest through written notices posted conspicuously in the work place at least one week before they become effective.SECTION 6. When work on rest day authorized. — An employer may require any of his employees to work on his scheduled rest day for the duration of the following emergencies and exceptional conditions:

(a) In case of actual or impending emergencies caused by serious accident, fire, flood, typhoon, earthquake, epidemic or other disaster or calamity, to prevent loss of life or property, or in cases of force majeure or imminent danger to public safety;(b) In case of urgent work to be performed on machineries, equipment or installations to avoid serious loss which the employer would otherwise suffer;

(c) In the event of abnormal pressure of work due to special circumstances, where the employer cannot ordinarily be expected to resort to other measures;

(d) To prevent serious loss of perishable goods;

(e) Where the nature of the work is such that the employees have to work continuously for seven (7) days in a week or more, as in the case of the crew members of a vessel to complete a voyage and in other similar cases; and

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(f) When the work is necessary to avail of favorable weather or environmental conditions where performance or quality of work is dependent thereon.

No employee shall be required against his will to work on his scheduled rest day except under circumstances provided in this Section: Provided, However, that where an employee volunteers to work on his rest day under other circumstances, he shall express such desire in writing, subject to the provisions of Section 7 hereof regarding additional compensation.

SECTION 7. Compensation on rest day/Sunday/holiday. — (a) Except those employees referred to under Section 2, Rule I, Book Three, an employee who is made or permitted to work on his scheduled rest day shall be paid with an additional compensation of at least 30% of his regular wage. An employee shall be entitled to such additional compensation for work performed on a Sunday only when it is his established rest day.

(b) Where the nature of the work of the employee is such that he has no regular work days and no regular rest days can be scheduled, he shall be paid an additional compensation of at least 30% of his regular wage for work performed on Sundays and holidays.

(c) Work performed on any special holiday shall be paid with an additional compensation of at least 30% of the regular wage of the employees. Where such holiday work falls on the employee's scheduled rest day, he shall be entitled to additional compensation of at least 50% of his regular wage.

(d) The payment of additional compensation for work performed on regular holiday shall be governed by Rule IV, Book Three, of these regulations.

(e) Where the collective bargaining agreement or other applicable employment contract stipulates the payment of a higher premium pay than that prescribed under this Section, the employer shall pay such higher rate.

SECTION 8. Paid-off days. — Nothing in this Rule shall justify an employer in reducing the compensation of his employees for the unworked Sundays, holidays, or other rest days which are considered paid-off days or holidays by agreement or practice subsisting upon the effectivity of the Code.SECTION 9. Relation to agreements. — Nothing herein shall prevent the employer and his employees or their representatives in entering into any agreement with terms more favorable to the

employees than those provided herein, or be used to diminish any benefit granted to the employees under existing laws, agreements, and voluntary employer practices.

6.01. RATIONALERationale

Manila Electric Company vs. The Public Utilities Employees’ Association

G.R. No. L-1206 / October 30, 1947 / En banc / Feria, J.Facts: Manila Electric Company challenges the decision of the CIR which states that:

          Although the practice of the company has been to grant one day vacation with pay to every workingman who had worked for seven consecutive days including Sundays, the Court considers justified the opposition presented by the workingmen to the effect that they need Sundays and holidays for the observance of their religion and for rest. Therefore, the Court orders the respondent company to pay 50 per cent increase for overtime work done on ordinary days and 50 per cent increase for work done during Sundays and legal holidays irrespective of the number of days they work during the week.

Relevant to this case is Section 4 of Commonwealth Act No. 444, which reads:

          No person, firm, or corporation, business establishment or place or center of labor shall compel an employee or laborer to work during Sundays and legal holidays, unless he is paid an additional sum of at least twenty-five per centum of his regular remuneration: | Provided, however, That this prohibition shall not apply to public utilities performing some public service such as supplying gas, electricity, power, water, or providing means of transportation or communication.

As the appellant is a public utility that supplies the electricity and provides means of transportation to the public, it is evident that the appellant is exempt from the qualified prohibition established in the enactment clause, and may compel its employees or laborers to work during Sundays and legal holidays without paying them said extra compensation.

Analysis of the provision (it has 2 parts):

          To hold that the exception or second part of section 4, Commonwealth Act No. 444, only exempts public utilities mentioned therein from the prohibition to compel employees or laborers to work during Sundays and legal holidays, but not from the obligation to pay them an extra or

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additional compensation for compelling them to work during those days, is to make the exception meaningless or a superfluity, that is, an exception to a general rule that does not exist, because the prohibition in the enactment clause is not an absolute prohibition to compel a laborer or employee to work during Sundays and legal holidays. The prohibition to compel a laborer or employee to work during those days is qualified by the clause "unless he is paid an additional sum of at least twenty five per centum of his regular remuneration," which is inseparable from the prohibition which they qualify and of which they are a part and parcel. The 2nd portion of said section is in reality an exception and not a proviso although it is introduced by the word "provided"; and it is elemental that an exception takes out of an enactment something which would otherwise be part of the subject matter of it.

Issue on equal protection of the law: The division is not arbitrary, and the basis thereof is reasonable. Public utilities exempted from the prohibition since they are required to perform a continuous service including Sundays and legal holidays to the public, since the public good so demands.

To require public utilities performing service to do pay an additional or extra compensation from their regular pay would be tantamount to penalize them for performing public service during said days in compliance with the requirement of the law and public interest.

Rational for the weekly rest periods was actually in the dissent:It is a fact that Sundays and legal holidays are set aside by law as days of rest. The life, existence, and happiness of a person do not depend only on the satisfaction of his physical needs. There are moral, intellectual and spiritual needs as imperative as the physical ones. Ordinarily, Sundays and legal holidays are dedicated to reading and instruction so as to fill the mind with culture or some sort of advancement. On those days the laborer enjoys longer hours in the company of his family. That gives him an opportunity to satisfy his moral needs. During Sundays and holidays more time is dedicated to worship and other religious services. That gives a laborer an opportunity to satisfy his spiritual needs. The deprivation of that opportunity to satisfy mental, moral, and spiritual needs should not be ignored, and should be properly compensated.

6.02. COVERAGE ART. 82. Coverage. - The provisions of this Title shall apply to employees in all establishments and undertakings whether for profit or not, but not to government employees, managerial employees, field personnel, members of the family of the employer who are dependent on him for support,

domestic helpers, persons in the personal service of another, and workers who are paid by results as determined by the Secretary of Laborin appropriate regulations.

As used herein, "managerial employees" refer to those whose primary duty consists of the management of the establishment in which they are employed or of a department or subdivision thereof, and to other officers or members of the managerial staff.

"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.

Art. 91 (a) supra

6.03. SCHEDULING OF REST DAY – Art 91 (b) supra

6.04. COMPULSORY WORK AND COMPENSATION – Art 92 supra

SECTION 7. CONDITIONS OF EMPLOYMENT – HOLIDAYS

STATUTORY REFERENCE

HOLIDAYS, SERVICE INCENTIVE LEAVESAND SERVICE CHARGES

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

(c) As used in this Article, "holiday" includes: New Year’s Day, Maundy Thursday, Good Friday, the ninth of April, the first of May, the twelfth of June, the fourth of July, the thirtieth of November, the twenty-fifth and thirtieth of December and the day designated by law for holding a general election.

ART. 95. Right to service incentive leave. - (a) Every employee who has rendered at least one year of service shall be entitled to a yearly service incentive leave of five days with pay.

(b) This provision shall not apply to those who are already enjoying the benefit herein provided, those enjoying vacation leave with pay of at least five days and those employed in establishments regularly employing less than ten employees or in

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establishments exempted from granting this benefit by the Secretary of Labor and Employment after considering the viability or financial condition of such establishment.chanroblesvirtuallawlibrary

(c) The grant of benefit in excess of that provided herein shall not be made a subject of arbitration or any court or administrative action.

EXECUTIVE ORDER NO. 203 June 30, 1987PROVIDING A LIST OF REGULAR HOLIDAYS

AND SPECIAL DAYS TO BE OBSERVED THROUGHOUT THE PHILIPPINES AND FOR

OTHER PURPOSESWHEREAS, a Cabinet Assistance Secretariat Committee was constituted to review all existing public holidays;WHEREAS, there are too many holidays being observed which has caused confusion among the public.NOW, THEREFORE, I, CORAZON C. AQUINO, President of the Philippines, do hereby order:

Sec. 1. Unless otherwise modified by law, order or proclamation, the following regular holidays and special days shall be observed in this country:

A.

Regular Holidays

New Year's Day January 1Maundy Thursday Movable dateGood Friday Movable dateAraw ng Kagitingan (Bataan and Corregidor Day)

April 9

Labor Day May 1Independence Day June 12National Heroes Day Last Sunday of

AugustBonifacio Day November 30Christmas Day December 25Rizal Day December 30

B.

Nationwide Special Days

All Saints Day November 1Last Day of the Year December 31

Sec. 2. Henceforth, the terms "legal or regular holiday" and "special holiday", as used in laws, orders, rules and regulations or other issuances shall now be referred to as "regular holiday" and "special day", respectively.

Sec. 3. All laws, orders, issuances, rules and regulations or parts thereof inconsistent with this Executive Order are hereby repealed or modified accordingly.

Sec. 4. This Executive Order shall take effect immediately.

RULE IV Holidays with Pay

SECTION 1. Coverage. — This rule shall apply to all employees except:(a) Those of the government and any of the political subdivision, including government-owned and controlled corporation;(b) Those of retail and service establishments regularly employing less than ten (10) workers;(c) Domestic helpers and persons in the personal service of another;(d) Managerial employees as defined in Book Three of the Code;(e) Field personnel and other employees whose time and performance is unsupervised by the employer including those who are engaged on task or contract basis, purely commission basis, or those who are paid a fixed amount for performing work irrespective of the time consumed in the performance thereof.

SECTION 2. Status of employees paid by the month. — Employees who are uniformly paid by the month, irrespective of the number of working days therein, with a salary of not less than the statutory or established minimum wage shall be paid for all days in the month whether worked or not.For this purpose, the monthly minimum wage shall not be less than the statutory minimum wage multiplied by 365 days divided by twelve.

SECTION 3. Holiday Pay. — Every employer shall pay his employees their regular daily wage for any worked regular holidays.As used in the rule, the term 'regular holiday' shall exclusively refer to: New Year's Day, Maundy Thursday, Good Friday, the ninth of April, the first of May, the twelfth of June, the last Sunday of August, the thirtieth of November, the twenty-fifth and thirtieth of December. Nationwide special days shall include the first of November and the last day of December.As used in this Rule legal or regular holiday and special holiday shall now be referred to as 'regular holiday' and 'special day', respectively.

SECTION 4. Compensation for holiday work. — Any employee who is permitted or suffered to work on any regular holiday, not exceeding eight (8) hours, shall be paid at least two hundred percent (200%) of his regular daily wage. If the holiday work falls on the scheduled rest day of the employee, he shall be entitled to an additional premium pay of at least 30% of his regular holiday rate of 200% based on his regular wage rate.

SECTION 5. Overtime pay for holiday work. — For work performed in excess of eight hours on a regular holiday, an employee shall be paid an

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additional compensation for the overtime work equivalent to his rate for the first eight hours on such holiday work plus at least 30% thereof.Where the regular holiday work exceeding eight hours falls on the scheduled rest day of the employee, he shall be paid an additional compensation for the overtime work equivalent to his regular holiday-rest day for the first 8 hours plus 30% thereof. The regular holiday rest day rate of an employee shall consist of 200% of his regular daily wage rate plus 30% thereof.SECTION 6. Absences. — (a) All covered employees shall be entitled to the benefit provided herein when they are on leave of absence with pay. Employees who are on leave of absence without pay on the day immediately preceding a regular holiday may not be paid the required holiday pay if he has not worked on such regular holiday.(b) Employees shall grant the same percentage of the holiday pay as the benefit granted by competent authority in the form of employee's compensation or social security payment, whichever is higher, if they are not reporting for work while on such benefits.(c) Where the day immediately preceding the holiday is a non-working day in the establishment or the scheduled rest day of the employee, he shall not be deemed to be on leave of absence on that day, in which case he shall be entitled to the holiday pay if he worked on the day immediately preceding the non-working day or rest day.

SECTION 7. Temporary or periodic shutdown and temporary cessation of work. — (a) In cases of temporary or periodic shutdown and temporary cessation of work of an establishment, as when a yearly inventory or when the repair or cleaning of machineries and equipment is undertaken, the regular holidays falling within the period shall be compensated in accordance with this Rule.(b) The regular holiday during the cessation of operation of an enterprise due to business reverses as authorized by the Secretary of Labor and Employment may not be paid by the employer.

SECTION 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 vacation;(b) Where a covered employee, is paid by results or output, such as payment on piece work, his holiday pay shall not be less than his average daily earnings for the last seven (7) actual working days preceding the regular holiday; Provided, However, that in no case shall the holiday pay be less than the applicable statutory minimum wage rate.(c) Seasonal workers may not be paid the required holiday pay during off-season when they are not at work.

(d) Workers who have no regular working days shall be entitled to the benefits provided in this Rule.

SECTION 9. Regular holiday falling on rest days or Sundays. — (a) A regular holiday falling on the employee's rest day shall be compensated accordingly.(b) Where a regular holiday falls on a Sunday, the following day shall be considered a special holiday for purposes of the Labor Code, unless said day is also a regular holiday.

SECTION 10. Successive regular holidays. — Where there are two (2) successive regular holidays, like Holy Thursday and Good Friday, an employee may not be paid for both holidays if he absents himself from work on the day immediately preceding the first holiday, unless he works on the first holiday, in which case he is entitled to his holiday pay on the second holiday.

SECTION 11. Relation to agreements. — Nothing in this Rule shall justify an employer in withdrawing or reducing any benefits, supplements or payments for unworked holidays as provided in existing individual or collective agreement or employer practice or policy.

7.01. COVERAGE – 94 (a) supraCoverage and Purpose

Mantrade/FMMC Division Employees and Workers Union vs Bacungan and Mantrade

Dev’t Corp.144 SCRA 510 / Sept. 30, 1986

Feria. Petition for certiorari and mandamus

FACTS:Voluntary Arbitrator (VA) Bacungan (former Dean!) decided in a case that Mantrade (respondent) does not have to pay holiday pay to its “monthly paid employees who are uniformly paid by the month, irrespective of the number of working days therein, with a salary of not less than the statutory or established minimum wage…” and citing LC 94. Petitioner union now questions the validity of the LC Rules. Mantrade assails this on procedural grounds, saying that decisions of VA are final and inappealable (sic) based on LC 263 and their CBA, that certiorari does not lie because a VA does not exercise judicial functions, mandamus does not lie because this is not a duty, etc. Bacungan also said that although LC 94 does not exclude monthly salaried employees from being given holiday pay, they seem to be excluded under Sec.2, Rule IV, Book III of the Rules and Regulations implementing the LC.

ISSUE:Are the workers entitled to holiday pay?

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HELD and RATIO.YES, they are entitled to holiday pay. (regarding the procedural issues, SC said the case of Oceanic Bic Division vs Romero answers these in the negative. Even though the VA has first rate credentials like Flerida Romero—a Director of the UP Law Center—they are to be given only the highest respect and a certain measure of finality except when there is abuse of discretion, gross incompetence, lack of jurisdiction, lack of due process etc. Plus a VA acts in a quasi-judicial capacity so certiorari may apply)

SC also said this question of holiday pay was already answered in a former case (NOT en banc): Insular Bank of Asia etc. vs Inciong (1984)

- Sec.2, Rule IV, Book III of the Rules (OLD RULES) (and Policy Instruction No. 9 of the Sec. of Labor) is null and void because it enlarges the scope of the exclusion of the LC’s provisions on holiday pay (See LC 94, LC 82)

o Article 82. Coverage. The provision of this Title (Title I: Working Conditions and Rest Periods) shall apply to employees in all establishments and undertakings, whether for profit or not, but not to government employees, managerial employees, field personnel, members of the family of the employer who are dependent on him for support, domestic helpers, persons in the personal service of another and workers who are paid by results as determined by the Secretary of Labor and Employment in appropriate regulations.

- Monthly paid employees are NOT excluded from the benefits of holiday pay

and reiterated in Chartered Bank Employees Association vs Ople (en banc) (1985)

- “The questioned Section 2, Rule IV, Book III of the Integrated Rules and the Secretary's Policy Instruction No. 9 add another excluded group, namely, "employees who are uniformly paid by the month." While the additional exclusion is only in the form of a presumption that all monthly paid employees have already been paid holiday pay, it constitutes a taking away or a deprivation which must be in the law if it is to be valid. An administrative interpretation which diminishes the benefits of labor more than what the statute delimits or withholds is obviously ultra vires (beyond the powers).”

Re: mandamus argument, SC said: “True it is also that mandamus is not proper to enforce a

contractual obligation, the remedy being an action for specific performance… however, in view of the above-cited subsequent decisions of this Court clearly defining the legal duty to grant holiday pay to monthly salaried employees, mandamus is an appropriate equitable remedy.”

San Miguel Corporation v CADate: January 30, 2002

Ponente: Kapunan

Related Laws: 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:

o Art. 169. Official Muslim holidays. - The following are hereby recognized as legal Muslim holidays: (a) New Year which falls on the first day of the first lunar month of Muharram; (b) Birthday of Prophet Muhammad which falls on the twelfth day of the third lunar month of Rabi-ul-Awwal; (c) Nocturnal Journey and Ascension of the Prophet Muhammad) which falls on the twenty-seventh day of the seventh lunar month of Rajab; (d) 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) Hari Raya Haji which falls on the tenth day of the twelfth lunar month of Dhu’l Hijja.

o Art. 170. 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.

Facts: October 17, 1992 - DOLE Iligan District

Office conducted a routine inspection in the premises of San Miguel Corporation (SMC) in Sta. Filomena, Iligan City. In the course of the inspection, it was discovered that

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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 November 19, 1992, May 28, 1993 and October 4-5, 1993. Still, SMC failed to submit proof that it was paying regular Muslim holiday pay to its employees.

December 17, 1993 - Alan M. Macaraya, 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 30 days from the receipt of the order.

SMC appealed to the DOLE main office in Manila but its appeal was dismissed for having been filed late. Later, the appeal was found to be filed within reglementary period; however, it was still dismissed for lack of merit and the order of Director Macaraya was affirmed. CA affirmed this decision with modifications (i.e. modified with regards the payment of Muslim holiday pay from 200% to 150% of the employee's basic salary) and remanded to the Regional Director for the proper computation of the said holiday pay.

In this petition for certiorari, SMC contends the following:

o There was grave abuse of discretion in granting Muslim holiday pay to non-Muslim employees.

SMC asserts that Article 3(3) of Presidential Decree No. 1083 provides that “(t)he provisions of this Code shall be applicable only to Muslims.” [SC: SMC did not deny that it was not paying Muslim holiday pay to its non-Muslim employees. SMC merely contends that its non-Muslim employees are not entitled to Muslim holiday pay.]

Issue on Muslim holiday pay was already resolved in Fernan v SMC: “We also deny the claims for Muslim holiday pay for lack of factual and legal basis. Muslim holidays are legally observed within the area of jurisdiction of the present Autonomous Region for

Muslim Mindanao (ARMM), particularly in the provinces of Maguindanao, Lanao del Sur, Sulu and Tawi-Tawi. It is only upon Presidential Proclamation that Muslim holidays may be officially observed outside the Autonomous Region and generally extends to Muslims to enable them the observe said holidays.”

o It was not accorded due process of law.

o No/excess of jurisdicition in issuing compliance order.

Issues:1. WON Muslim holiday pay should be

granted to non-Musim employees2. WON SMC was accorded due process of

law3. WON compliance order was issued

without/in excess of jurisdiction

Held & Ratio:1. Yes. Muslim holidays provided under Articles

169 and 170, Title I, Book V, of Presidential Decree No. 1083 should be read in conjunction with LC 94. Thus, there should be no distinction between Muslims and non-Muslims as regards payment of benefits for Muslim holidays. 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.”

Undersecretary Español: Assuming arguendo that the respondent’s position is correct, then by the same token, Muslims throughout the Philippines are also not entitled to holiday pays on Christian holidays declared by law as regular holidays. We must remind 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.

1999 Handbook on Workers’ Statutory Benefits (approved by then DOLE Secretary Bienvenido E. Laguesma on 14 December 1999): 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.

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Napoleon E. Fernan vs. San Miguel Corporation Beer Division and Leopoldo Zaldarriaga has no consequence to issues in the instant case and, as aptly declared by Undersecretary Español, it “can never be a benchmark nor a guideline to the present case. This is for the reason that the Fernan case was primarily for illegal dismissal and the claim for benefits (i.e. Muslim Holiday pay) was only incidental to the main case.

2. Yes. SMC was furnished a copy of the inspection

order and it was received by and explained to its Personnel Officer.

Series of summary hearings were conducted.

3. No. Regional Director Macaraya acted as the

duly authorized representative of the Secretary of Labor and Employment and it was within his power to issue the compliance order to SMC (in accordance with Article 128, Section B of the Labor Code, as amended by Republic Act No. 7730).

Also, there was no indication that Regional Director Macaraya failed to consider any documentary proof presented by SMC in the course of the inspection.

Asian Transmission Corporation v. CAMarch 15, 2004Carpio-Morales

Doctrine:Holiday pay is a legislated benefit enacted as part of the Constitutional imperative that the State shall afford protection to labor. Its purpose is not merely "to prevent diminution of the monthly income of the workers on account of work interruptions. In other words, although the worker is forced to take a rest, he earns what he should earn, that is, his holiday pay." It is also intended to enable the worker to participate in the national celebrations held during the days identified as with great historical and cultural significance.Independence Day (June 12), Araw ng Kagitingan (April 9), National Heroes Day (last Sunday of August), Bonifacio Day (November 30) and Rizal Day (December 30) were declared national holidays to afford Filipinos with a recurring opportunity to commemorate the heroism of the Filipino people, promote national identity, and deepen the spirit of patriotism. Labor Day (May 1) is a day traditionally reserved to celebrate the contributions of the working class to the development of the nation, while the religious holidays designated in Executive Order No. 203 allow the worker to celebrate his faith with his family.

Art. 94 of the Labor Code, as amended, affords a worker the enjoyment of ten paid regular holidays. The provision is mandatory, regardless of whether an employee is paid on a monthly or daily basis.Unlike a bonus, which is a management prerogative, holiday pay is a statutory benefit demandable under the law. Since a worker is entitled to the enjoyment of ten paid regular holidays, the fact that two holidays fall on the same date should not operate to reduce to nine the ten holiday pay benefits a worker is entitled to receive.

It is elementary, under 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, there is nothing in the law which provides or indicates that the entitlement to ten days of holiday pay shall be reduced to nine when two holidays fall on the same day.

Fast Facts:The DOLE, through Usec Trajano, issued an Explanatory Bulletin that employees are entitled to 200% of their basic wage on April 9, 1993 which was both a Good Friday and Araw ng Kagitingan. The same Bulletin was issued for April 9, 2008 which was both a Maundy Thursday and Araw ng Kagitingan.

Despite this, Asian Transmission paid its daily paid employees only 100% of their basic pay. Bisig ng Asian Transmission Labor Union (BATLU) protested.

7.02 HOLIDAYS – EO 203 (SUPRA)CODE OF MUSLIM PERSONAL LAWS OF THE

PHILIPPINES (PD 1083, 1977)

Article 169. Official Muslim holidays. The following are hereby recognized as legal Muslim holidays:

(a) 'Amun Jadid (New Year), which falls on the first day of the first lunar month of Muharram;(b) Maulid-un-Nabi (Birthday of the Prophet Muhammad), which falls on the twelfth day of the third lunar month of Rabi-ul-Awwal;(c) Lailatul Isra Wal Mi'raj (Nocturnal Journey and Ascension of the Prophet Muhammad), which falls on the twenty-seventh day of the seventh lunar month of Rajab;(d) 'Id-ul-Fitr (Hari Raya Pausa), which falls on the first day of the tenth lunar month of Shawwal, commemorating the end of the fasting season; and(e) 'Id-ul-Adha (Hari Raja Haji), which falls on the tenth day of the twelfth lunar month of Dhu 1-Hijja.

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7.03. HOLIDAY PAY – 94 supraFaculty Private School

Jose Rizal College v NLRCDecember 1, 1987

Paras

Fast FactsPetitioner is a non-stock, non-profit educational institution duly organized and existing under the laws of the Philippines. It has three groups of employees categorized as follows: (a) personnel on monthly basis, who receive their monthly salary uniformly throughout the year, irrespective of the actual number of working days in a month without deduction for holidays; (b) personnel on daily basis who are paid on actual days worked and they receive unworked holiday pay and (c) collegiate faculty who are paid on the basis of student contract hour. Before the start of the semester they sign contracts with the college undertaking to meet their classes as per schedule. Unable to receive their corresponding holiday pay, 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.The sole issue in this case is whether or not the school faculty who according to their contracts are paid per lecture hour are entitled to unworked holiday pay. There appears to be no problem as to the first two classes or categories of petitioner's workers. The problem, however, lies with its faculty members, who are paid on an hourly basis. The court held that petitioner is exempted 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; and 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..

DoctrineSubject 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. ...Under the foregoing provisions, apparently, the petitioner, although a non-profit institution is under obligation to give pay even on unworked regular holidays to hourly paid faculty members subject to the terms and conditions provided for therein.

The court believes that 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 who because of their teaching contracts are obliged to work and consent to be paid only for work actually done (except when an emergency or a fortuitous event or a national need calls for the declaration of special holidays). 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.

Divisor as FactorTRANS-ASIA PHILS. EMPLOYEES

ASSOCIATION (TAPEA) and ARNEL GALVEZ VS. NLRC, TRANS-ASIA (PHILS.) and

ERNESTO S. DE CASTROG.R. No. 118289 December 13, 1999

KAPUNAN

Facts: Trans-Asia Philippines Employees Association,

the duly-recognized collective bargaining agent

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of the monthly-paid rank-and-file employees of Trans-Asia (Phils.), entered into a Collective Bargaining Agreement ("CBA") with their employer. The CBA, which was to be effective from 1 April 1988 up to 31 March 1991, provided for, among others, the payment of holiday pay with a stipulation that if an employee is permitted to work on a legal holiday, the said employee will receive a salary equivalent to 200% of the regular daily wage plus a 60% premium pay. The claim of TAPEA for payment of holiday pay covering the period from January of 1985 up to December of 1987 remained unresolved so eventually petitioners, filed a complaint before the labor arbiter. Petitioners amended their complaint to include the payment of holiday pay for the duration of the recently concluded CBA (from 1988 to 1991), unfair labor practice, damages and attorney's fees.

Trans-Asia said it has always honored the labor law provisions on holiday pay by incorporating the same in the payment of the monthly salaries of its employees. o Trans-Asia had been using the divisor of

"286" days in computing for its employees' overtime pay and daily rate deductions for absences. Trans-Asia explained that this divisor is arrived at by multiplying the 52 number of weeks in a year with the 44 number of work hours a week, divided by the 8 number of work hours a day.

Trans-Asia said the divisor takes into account the ten regular holidays in a year since it only subtracts from the 365 calendar days the unworked and unpaid 52 Sundays and 26 Saturdays (employees are required to work half-day during Saturdays). o If the ten regular holidays were not included

in the computation of their employees' monthly salary, the divisor which they would have used would only be 277 days which is arrived at by subtracting 52 Sundays, 26 Saturdays and the 10 legal holidays from 365 calendar days.

o Trans-Asia explained that the "286" days divisor is based on Republic Act No. 6640, wherein the divisor of 262 days is used in computing for the monthly rate of workers who do not work and are not considered paid on Saturdays and Sundays or rest days. The additional 26 working Saturdays in a year factored-in to the divisor = "286" days.

Trans-Asia explained that this holiday pay rate was included in the CBA in order to comply with Section 4, Rule IV, Book III of the Omnibus Rules Implementing the Labor Code1.

1 Sec. 4. Compensation for holiday work. — Any employee who is permitted or suffered to work on any regular holiday, not exceeding eight (8) hours, shall be paid at least two hundred percent (200%) of his regular daily wage. If the holiday falls on the scheduled rest day of the employee, he shall be entitled to an additional

On the contention that Trans-Asia's acquiescence to the inclusion of a holiday pay provision in the CBA is an admission of non-payment of the same in the past, Trans-Asia reiterated that it is simply a recognition of the mandate of the Labor Code that employees are entitled to holiday pay.

LA said the CBA provides that the ten legal holidays are recognized by the Company as full holiday with pay. What is more, there can be no doubt that since 1977 up to the execution of the CBA, the Trans-Asia never used conflicting or different divisors but consistently employed the divisor of 286 days. The consistency in the established practice of the Trans-Asia, which incidentally is not disputed by complainants, did not give rise to any doubt which could have been resolved in favor of complainants.

NLRC dismissed the petitioner’s appeal and affirmed the decision of the labor arbiter.

Petitioners' motion for reconsideration was, likewise, denied.

Issue: WON 286 is the proper divisor based on the evidence provided.

Held: Depends. (see last paragraph)

Rationale:Trans-Asia's inclusion of holiday pay in petitioners' monthly salary is clearly established by its consistent, undisputed, use of the divisor of "286" days in the computation of its employees' benefits and deductions. If one is to deduct the unworked 52 Sundays and 26 Saturdays from the 365 calendar days in a year, the resulting divisor would be 286 days (should actually be 287 days). Since the ten (10) legal holidays were never included in subtracting the unworked and unpaid days in a calendar year, the only logical conclusion would be that the payment for holiday pay is already incorporated into the said divisor.

Petitioners cite the case of Chartered Bank Employees Association vs. Ople2. Wrong. In the Chartered Bank case, the bank used different divisors in computing for its employees benefits and deductions. For computing overtime compensation, the bank used 251 days as its divisor. For computing deductions due to absences, the bank used 365 days as divisor. Due to this confusing situation, the Court declared that there

premium pay of at least 30% of his regular holiday rate of 200% based on his regular wage rate.2 “Any remaining doubts which may arise from the conflicting or different divisors used in the computation of overtime pay and employees' absences are resolved by the manner in which work actually rendered on holidays is paid. Thus, whenever monthly paid employees work on a holiday, they are given an additional 100% base pay on top of a premium pay of 50%. If the employees' monthly pay already includes their salaries for holidays, they should be paid only premium pay but not both base pay and premium pay. 12

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existed a doubt as to whether holiday pay is already incorporated in the employees' monthly salary. Since doubts should be resolved in favor of labor, the Court in the Chartered Bank case ruled in favor of the employees and further stated that its conclusion is fortified by the manner in which the employees are remunerated for work rendered on holidays. In the present case, however, there is no confusion with regard to the divisor used by Trans-Asia in computing for petitioners' benefits and deductions. Trans-Asia consistently used a "286" days divisor for all its computations.

BUT there is a need to adjust the divisor used by Trans-Asia to 287 days in order to properly account for the entirety of regular holidays and special days in a year as prescribed by Executive Order No. 2033 in relation to Section 6 of the Rules Implementing Republic Act 67274.The proper divisor that should be used for a situation wherein the employees do not work and are not considered paid on Saturdays and Sundays or rest days is 262 days. In the present case, since the employees of Trans-Asia are required to work half-day on Saturdays, 26 days should be added to the divisor of 262 days, thus, resulting to 288 days. However, due to the fact that the rest days of petitioners fall on a Sunday, the number of unworked but paid legal holidays should be reduced to nine (9), instead of ten (10), since one legal holiday under E.O. No. 203 always falls on the last Sunday of August, National Heroes Day. Thus, the divisor that should be used in the present case should be 287 days.

3 Sec. 1. Unless otherwise modified by law, order or proclamation, the following regular holidays and special days shall be observed in the country:A. Regular Holidays: New Year's Day — January 1 Maundy Thursday — Movable Date Good Friday — Movable Date Araw ng Kagitingan — April 9 (Bataan and Corregidor Day) Labor Day — May 1 Independence Day — June 12 National Heroes Day — Last Sunday of August Bonifacio Day — November 30 Christmas Day — December 25 Rizal Day — December 30 B. Nationwide Special DaysAll Saints Day — November 1 Last Day of the Year — December 314 Sec. 6. Suggested Formula in Determining the Equivalent Monthly Statutory Minimum Wage Rates. — Without prejudice from existing company practices, agreements or policies, the following formulas may be used as guides in determining the equivalent monthly statutory minimum wage rates: d) For those who do not work and are not considered paid on Saturdays and Sundays or rest days: Equivalent Monthly = Average Daily Wage Rate x 262 daysRate (EMR) 12Where 262 days =250 days — Ordinary working days; 10 days — Regular holidays; 2 days — Special days (If considered paid; if actuallyworked, this is equivalent to 2.6 days)

If the divisor is increased to 287 days, the daily rate for purposes of overtime pay, holiday pay and conversions of accumulated leaves would be diminished (violative of the proscription on the non-diminution of benefits under Section 100 of the Labor Code.)

The use of the divisor of 287 days would be to the advantage of petitioners if it is used for purposes of computing for deductions due to the employee's absences.

So, the adjusted divisor of 287 days should only be used by Trans-Asia for computations which would be advantageous to petitioners, i.e., deductions for absences, and not for computations which would diminish the existing benefits of the employees, i.e., overtime pay, holiday pay and leave conversions.

Judgment: NLRC decision is affirmed with the modification that trans-asia is hereby ordered to adjust its divisor to 287 days and pay the resulting holiday pay in arrears brought about by this adjustment starting from 30 June 1987, the date of effectivity of E.O. No. 203.

UNION OF FILIPRO EMPLOYEES (UFE) VS. BENIGNO VIVAR, JR., NLRC & NESTLÉ

PHILIPPINES, INC. (FILIPRO, INC.)G.R. No. 79255 January 20, 1992

GUTIERREZ, JR.Facts: The sales personnel of Filipro (Nestle now) were

excluded from the holiday pay award and the change of the divisor in the computation of benefits from 251 to 261 days.

On November 8, 1985, respondent filed with NLRC a petition for declaratory relief seeking a ruling on its rights and obligations respecting claims of its monthly paid employees for holiday pay based on Chartered Bank Employees Association v. Ople.

Benigno Vivar, Jr. was the voluntary arbitrator. On January 2, 1980, Arbitrator Vivar told Filipro

to pay its monthly paid employees holiday pay pursuant to Article 94 of the Code, subject only to Article 82 and such other legal restrictions as are provided for in the Code.

Filipro filed a motion for clarification seeking (1) the limitation of the award to 3 years, (2) the exclusion of salesmen, sales representatives, truck drivers, merchandisers and medical representatives from the award of the holiday pay, and (3) deduction from the holiday pay award of overpayment for overtime, night differential, vacation and sick leave benefits due to the use of 251 divisor.

So, the arbitrator held that the effectivity of the holiday pay award shall be from November 1, 1974, the date of effectivity of the Labor Code; that the company's sales personnel are field

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personnel and so are not entitled to holiday pay; and that with the grant of 10 days' holiday pay, the divisor should be changed from 251 to 261 and ordered the reimbursement of overpayment for overtime, night differential, vacation and sick leave pay bec. of 251 days as divisor. V. Arbiter said “when the claim of the Union for payment of ten holidays was granted, there was a consequent need to abandon that 251 divisor.”

On appeal, NLRC, in May 25, 1987 remanded the case to the v. arbitrator on the ground that it has no jurisdiction to review decisions in voluntary arbitration cases.

V. arbitrator refused to take cognizance of the case because he had resigned from service effective May 1, 1986.

Issue: 1) WON Nestle's sales personnel are entitled to holiday pay.2) WON the divisor should be changed from 251 to 261 days.3) WON the use of 251 as divisor resulted in overpayment.4) Beginning when HP should be computed.

Held: 1) No. 2)Yes. 3) No. 4)

Rationale:1) Under Art. 82, field personnel are not entitled to holiday pay. Field personnel = "non-agritultural employees who regularly perform their duties away from the principal place of business or branch office of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty." Sales personnel start field work at 8:00 a.m. after reporting to the office and report back at 4:00/4:30 p.m. if they are Makati-based. The law requires that actual hours of work in the field be reasonably ascertained. The company has no way of determining WON these sales personnel really spend the hours in between in actual field work. This requirement for the salesmen is but an exercise of purely management prerogative of providing administrative control. Between 8:00 a.m. and 4:00 or 4:30 p.m. the extent or scope and result of which are subject to their individual capacity and industry and which "cannot be determined with reasonable certainty."

Rule IV, Book III of the Implementing Rules which provides that the rule shall apply to all employees except field personnel and other employees whose time and performance is unsupervised by the employer. The clause "whose time and performance is unsupervised by the employer" merely interpreted/expounded the clause "whose actual hours of work in the field cannot be determined with reasonable certainty." The former clause is still within the scope of Art. 82 which defines field personnel. So, WON an employee's actual working hours in the field

can be determined with reasonable certainty WON the employee's time and performance is constantly supervised by the employer. The criteria for granting incentive bonus (sales/collection) indicate that these sales personnel are given incentive bonuses precisely because of the difficulty in measuring their actual hours of field work. They are evaluated by the result of their work and not by the actual hours of work. A salesman mostly works individually. There are no restrictions in the time he works. He earns as much or as little, within the range of his ability, as his ambition dictates. In lieu of overtime, he receives commissions. He works away from his employer's place of business, is not subject to the personal supervision of his employer, and his employer has no way of knowing the number of hours he works per day.

2) The divisor assumes an important role in determining whether or not holiday pay is already included in the monthly paid employee's salary and in the computation of his daily rate. In Chartered Bank Employees Association v. Ople  the Chartered Bank, in computing overtime compensation for its employees, employs a "divisor" of 251 days. The 251 working days divisor is the result of subtracting all Saturdays, Sundays and the ten (10) legal holidays from the total number of calendar days in a year. If the employees are already paid for all non-working days, the divisor should be 365 and not 251.

In the petitioner's case, its computation of daily ratio since September 1, 1980, is as follows [(monthly rate x 12 months)/251 days].

Following the criterion laid down in the Chartered Bank case, the use of 251 days' divisor by respondent Filipro indicates that holiday pay is not yet included in the employee's salary, otherwise the divisor should have been 261. The daily rate, assuming there are no intervening salary increases, is a constant figure for the purpose of computing overtime and night differential pay and commutation of sick and vacation leave credits. Necessarily, the daily rate should also be the same basis for computing the 10 unpaid holidays.

3) The v. arbitrator's order to change the divisor from 251 to 261 days would result in a lower daily rate which is violative of the prohibition on non-diminution of benefits found in Article 100 of the Labor Code. If the divisor is adjusted to 261 days, then the dividend (employee's annual salary) should be increased to incorporate the holiday pay. So, there is no merit in respondent Nestle's claim of overpayment of overtime and night differential pay and sick and vacation leave benefits, the computation of which are all

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based on the daily rate, since the daily rate is still the same before and after the grant of holiday pay.

4) Nestle, relying on the implicit validity of the implementing rule and policy instruction before this Court nullified them, and thinking that it was not obliged to give holiday pay benefits to its monthly paid employees, may have been moved to grant other concessions to its employees, especially in the collective bargaining agreement. Nestle's employees are among the highest paid in the industry. It would be unfair to impose additional burdens on Nestle when the non-payment of the holiday benefits up to 1984 was not in any way attributed to Nestle's fault. So, grant of holiday pay should be effective, not from the date of promulgation of the Chartered Bank case nor from the date of effectivity of the Labor Code, but from October 23, 1984, the date of promulgation of the IBAA case.

Judgment: The order of the voluntary arbitrator is modified. The divisor to be used in computing holiday pay shall be 251 days. HP shall be computed from October 23, 1984.

ComputationAgga v NLRC (November 16, 1998)

Ponente: Puno

Doctrines: The vacation leave pay is different from

“days-off pay”. Petitioners’ vacation pay is accounted for with the 13th month pay. The two months off with pay refer to the 13th month pay and 1 month vacation leave pay. It is therefore erroneous for the complainants to contend that the vacation leave pay is a distinct benefir when in truth and in fact the same has been duly considered in the computation of their statutorily mandated compensation under the column of 13th

month pay.

PD 442 declares that night shift differential and additional remuneration, overtime, rest day, Sunday and holiday work shall be computed on the basis of the employee’s regular wage.

Facts: Supply Oilfield Services, Inc. (SOS) hired

Agga et al. (petitioners) to work on board a drillship operated by Underseas Drilling, Inc (UDI). Their contracts ran from 1 year with petitioners enjoying 2 months’ off with pay for every 2 months duty. The contracts provided for service 12 hours a day, 7 days a week in a two-shift 24-hour operation. The petitioners also received a fixed monthly compensation covering basic allowances, privileges, travel allowances, and benefits granted by law during and after employment with the company.

The petitioners filed a complaint for non-payment of overtime pay, holiday pay, rest day pay, 13th month pay and night shift differential. They added that they were both land-based and sea-based workers and should be entitled to the benefits given to both. Lastly, they claimed that they were not amply covered by insurance.

The Court held that petitioners were not underpaid of their compensation. The alleged underpayments represent the difference between “Actual Pay on Board” and the amounts “Basic Salary + OT Pay + 13th month pay and Vacation Pay.”

To illustrate, Agga was given as an example: basic salary = $900 OT Pay = $973.71 13th month/Vacation leave pay = $ 150TOTAL = $2023.71 (mandated basic salary and benefits)

While on board, Agga received $1500 leaving a balance of $523.71. This amount is what Agga now claims as underpayment and for a period of 2 months with a total claim of $1047.42. But Agga disregarded his day-off pay or pay on leave which amounted to $750. Adding the $750 to the $1500 he already received, Agga actually got $2250 which is higher than his mandated basic salary and benefits of $2027.71. Hence, there is no underpayment.

The Court found that the petitioners were only land-based workers and not entitled to the benefits given to sea-based workers. Also, the petitioners were covered by insurance and even superior to that mandated by law.

SundayWellington Investment Inc v Trajano

GR 114698Ponente: Narvasa

FACTS: Due to a routine inspection,, the Labor

Enforcement officer, on August 6, 1991 found that Wellington has not paid its workers for the regular holidays that fell on a Sunday”.

Wellington claimed that such holidays were already covered by its 314 days salary formula that it uses as basis for the payment of monthly wages. The 314 days was derived from 365 – 51 Sundays.

The labor officer on the other hand contends that when holidays fall on a Sunday, the employees had to work for an additional day that month –

o . . . By using said (314) factor, the respondent (Wellington) assumes that all the regular holidays fell on ordinary days and never on a Sunday. Thus, the respondent failed

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to consider the circumstance that whenever a regular holiday coincides with a Sunday, an additional working day is created and left unpaid. In other words, while the said divisor may be utilized as proof evidencing payment of 302 working days, 2 special days and the ten regular holidays in a calendar year, the same does not cover or include payment of additional working days created as a result of some regular holidays falling on Sundays

o Wellington should have used the "317 factor," not the "314 factor."

ISSUE:WON 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: There is no provision of law requiring any

employer to make such adjustments in the monthly salary rate set by him to take account of legal holidays falling on Sundays in a given year, or, contrary to the legal provisions bearing on the point, otherwise to reckon a year at more than 365 days

the law requires of employers opting to pay by the month is to assure that "the monthly minimum wage shall not be less than the statutory minimum wage multiplied by 365 days divided by twelve," and to pay that salary "for all days in the month whether worked or not," and "irrespective of the number of working days therein."

the legal provisions governing monthly compensation are evidently intended precisely to avoid re-computations and alterations in salary on account of the contingencies

Proof of PaymentBUILDING CARE CORP V. NLRC

February 26, 1997J. Panganiban

Doctrine: Burden of proving that the employee received holiday pay is on the employer

FACTS: Rodil claims that he was illegally dismissed

and that his wages, 13th month pay, service incentive leave and holiday pay were unpaid

Company claims that Rodil was paid and that his performance was not satisfactory

LA ordered company to pay Rodil; NLRC affirmed

ISSUE: WON Rodil is entitled to holiday pay etc

HELD: Yes

RATIO: If company really paid Rodil his holiday

pay, they could have easily presented its payrolls which constitute the best proof of payment

Failed to comply with the mandate of the law – they have the burden of proof and not the employee

SECTION 8. CONDITIONS OF EMPLOYMENT – LEAVES

A. SERVICE INCENTIVE LEAVE

STATUTORY REFERENCE – Art 95 supra

RULE V Service Incentive Leave

SECTION 1. Coverage. — This rule shall apply to all employees except:(a) Those of the government and any of its political subdivisions, including government-owned and controlled corporations;(b) Domestic helpers and persons in the personal service of another;(c) Managerial employees as defined in Book Three of this Code;(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 a fixed amount for performing work irrespective of the time consumed in the performance thereof;(e) Those who are already enjoying the benefit herein provided;(f) Those enjoying vacation leave with pay of at least five days; and(g) Those employed in establishments regularly employing less than ten employees.

SECTION 2. Right to service incentive leave. — 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.

SECTION 3. Definition of certain terms. — The term "at least one-year service" shall mean service for not less than 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

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than 12 months, in which case said period shall be considered as one year.

SECTION 4. Accrual of benefit. — Entitlement to the benefit provided in this Rule shall start December 16, 1975, the date the amendatory provision of the Code took effect.

SECTION 5. Treatment of benefit. — The service incentive leave shall be commutable to its money equivalent if not used or exhausted at the end of the year.

SECTION 6. Relation to agreements. — Nothing in the Rule shall justify an employer from withdrawing or reducing any benefits, supplements or payments as provided in existing individual or collective agreements or employer's practices or policies.

8.01. COVERAGE – 95 (a) (b) supra

CoverageMakati Haberdashery, Inc vs NLRC

Facts: Respondents herein have been working for Makati Haberdashery as tailors, seamstress, sewers, basters (manlililip) and "plantsadoras". They are paid on a piece-rate basis. In addition to their piece-rate, they are given a daily allowance of three (P 3.00) pesos provided they report for work before 9:30 a.m. everyday. Dioscoro Pelobello and Salvador Rivera were dismissed for accepting a job offer which is prejudicial and in direct competition with the business of the company. They filed a complaint for illegal dismissal before the NLRC. The court found the dismissal to be valid but permitted the employees to claim cost of living allowance. However, they were not entitled to service incentive leave pay.

Doctrine: While private respondents are entitled to Minimum Wage, COLA and 13th Month Pay, they are not entitled to service incentive leave pay because as piece-rate workers being paid at a fixed amount for performing work irrespective of time consumed in the performance thereof, they fall under one of the exceptions stated in Section 1(d), Rule V, Implementing Regulations, Book III, Labor Code.

8.02. ENTITLEMENT AND ARBITRATION – 95 (a) (c) supra

8.03. COMPUTATION AND LIABLITYAuto Bus Transport Systems, Inc. v. Bautista

May 16, 2005Chico-Nazario

Doctrine:The disposition of the first issue revolves around the proper interpretation of Article 95 of the Labor

Code vis-à-visSection 1(D), Rule V, Book III of the Implementing Rules and Regulations of the Labor Code which provides:

Art. 95. RIGHT TO SERVICE INCENTIVE LEAVE

(a) Every employee who has rendered at least one year of service shall be entitled to a yearly service incentive leave of five days with pay.

Book III, Rule V: SERVICE INCENTIVE LEAVESECTION 1. Coverage. – 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 perusal 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.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

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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 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. 

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.

Fast Facts:Bautista has been employed by Auto Bus as driver-conductor since 1995. He is paid on commission basis. In 2000, the bus Bautista was driving bumped the rear of another bus of his ER. The management made him shoulder 30% (P75k+++) of the expenses for the repair of the damaged bus and since he did and could not pay for it, he was terminated.

Bautista filed a complaint for Illegal Dismissal with Money Claims for nonpayment of 13th month pay and service incentive leave pay.

However, the ER was able to prove that Bautista’s employment is replete with offenses and that he was given due process before termination. So,

there was no illegal dismissal but he was entitled to 13th month and service incentive leave pay.

Sentinel Security Agency vs. NLRCG.R. No. 122468 / September 3, 1998 / First

division / Panganiban, J.

Facts: The complainants were employees of Sentinel Segurity Agency. They were assigned to render guard duty at the premises of Philippine American Life Insurance Company in Cebu City (the Client). The Client sent notice to all concerned that the Agency was again awarded the contract of security services together with a request to replace all the security guards in the company's offices at the cities of Cebu, Bacolod, Cagayan de Oro, Dipolog and Iligan.

The Agency issued a Relief and Transfer Order replacing the complainants as guards of the Client and for them to be re-assigned to other clients effective January 16, 1994. As ordered, the complainants reported but were never given new assignments but instead they were told in the vernacular, "gui-ilisan mo kay mga tigulang naman mo" which when translated means, "you were replaced because you are already old.

In the case at bar, the relief and transfer order per se did not sever the employment relationship between the complainants and the Agency. Thus, despite the fact that complainants were no longer assigned to the Client, Article 287 of the Labor Code, as amended by RA 7641, still binds the Agency to provide them — upon their reaching the retirement age of sixty to sixty-five years — retirement pay or whatever else was established in the collective bargaining agreement or in any other applicable employment contract. 

The Court has recognized the prerogative of management to transfer an employee from one office to another within the same business establishment, as the exigency of the business my require, provided that the said transfer does nor result in a demotion in rank or a diminution in salary, benefits and other privileges of the employee; or is not unreasonable, inconvenient or prejudicial to the latter.

A transfer means a movement (1) from one position to another of equivalent rank, level or salary, without a break in the service; and (2) from one office to another within the same business establishment. It is distinguished from a promotion in the sense that it involves a lateral change as opposed to a scalar ascent.

However, in the case at bar, this legally recognized concept of transfer was not implemented. The

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Agency hired new security guards to replace the complainants, resulting in a lack of posts to which the complainants could have been reassigned.

Regarding liability: Based on Articles 106, 107 and 109, the indirect employer (the Client) is jointly and severally liable with the contractor for the workers' wages, in the same manner and extent that it is liable to its direct employees. This liability of the Client covers the payment of the service incentive leave pay of the complainants during the time they were posted at the Cebu branch of the Client. As service had been rendered, the liability accrued, even if the complainants were eventually transferred or reassigned.

Doctrine: Even if the Client is not responsible for the illegal dismissal of the complainants, it is jointly and severally liable with the Agency for the complainants' service incentive leave pay. 

B. PATERNITY LEAVE

REPUBLIC ACT NO. 8187AN ACT GRANTING PATERNITY LEAVE OF SEVEN (7) DAYS WITH FULL PAY TO ALL

MARRIED MALE EMPLOYEES IN THE PRIVATE AND PUBLIC  SECTORS FOR THE

FIRST FOUR (4) DELIVERIES OF THE LEGITIMATE SPOUSE WITH WHOM HE IS

COHABITING AND FOR OTHER PURPOSES.    Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:         SECTION 1. Short Title. - This Act shall be known as the  "Paternity Leave Act of 1996".           SECTION 2. Notwithstanding any law, rules and regulations to the contrary, every married male employee in the  private and public sectors shall be entitled to a paternity leave  of seven (7) days with full pay for the first four (4) deliveries of  the legitimate spouse with whom he is cohabiting. The male  employee applying for paternity leave shall notify his employer of the pregnancy of his legitimate spouse and the   expected date of such delivery.         For purposes, of this Act, delivery shall include childbirth  or any miscarriage.         SECTION 3. Definition of Term. - For purposes of this Act,  Paternity Leave refers to the benefits granted to a married male employee allowing him not to report for work for seven (7) days but continues to earn the compensation therefor, on the  condition that his spouse has delivered a child or suffered a miscarriage for purposes of enabling him to effectively lend support to his wife in her period of recovery and/or

in the  nursing of the newly-born child.         SECTION 4. The Secretary of Labor and Employment, the  Chairman of the Civil Service Commission and the Secretary  of Health shall, within thirty (30) days from the effectivity of this Act, issue such rules and regulations necessary for the  proper implementation of the provisions hereof.         SECTION 5. Any person, corporation, trust, firm, partnership, association or entity found violating this Act or the rules and  regulations promulgated thereunder shall be punished by a fine  not exceeding Twenty-five thousand pesos (P25,000) or imprisonment of not less than thirty (30)days nor more than six (6) months.         If the violation is committed by a corporation, trust or  firm, partnership, association or any other entity, the penalty  of imprisonment shall be imposed on the entity's responsible  officers, including, but not limited to, the president, vice-president, chief executive officer, general manager, managing  director or partner directly responsible therefor.         SECTION 6. Nondiminution Clause. - Nothing in this Act  shall be construed to reduce any existing benefits of any form granted under existing laws, decrees, executive orders, or any contract agreement or policy between employer and employee.         SECTION 7. Repealing Clause. - All laws, ordinances, rules,  regulations, issuances, or parts thereof which are inconsistent  with this Act are hereby repealed or modified accordingly.          SECTION 8. Effectivity. - This Act shall take effect (15)  days from its publication in the Official Gazette or in at least  two (2) newspapers of national circulation.

C. MATERNITY LEAVE

REPUBLIC ACT NO. 7322AN ACT INCREASING MATERNITY BENEFITS

IN FAVOR OF WOMEN WORKERS IN THE PRIVATE SECTOR, AMENDING FOR THE

PURPOSE  SECTION 14-A OF REPUBLIC ACT NO. 1161, AS AMENDED, AND FOR  OTHER

PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:         SECTION 1. Section 14-A of Republic Act No. 1161, as  amended, is further amended to read as follows:

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     "SEC. 14-A.  Maternity Leave Benefit. - A covered female  employee who has paid at least three monthly maternity  contributions in the twelve-month period preceding the semester of her childbirth, abortion or miscarriage and who is  currently employed shall be paid a daily maternity benefit  equivalent to one hundred percent (100%) of her present basic  salary, allowances and other benefits or the cash equivalent of such benefits for sixty (60) days subject to the following  conditions:  

      "(a) That the employee shall have notified her employer of  her pregnancy and the probable date of her childbirth which  notice shall be transmitted to the SSS in accordance with the  rules and regulations it may provide;           "(b) That the payment shall be advanced by the employer  in two equal installments within thirty (30) days from the  filing of the maternity leave application:           "(c) That in case of caesarian delivery, the employee shall  be paid the daily maternity benefit for seventy-eight (78) days;         "(d) That payment of daily maternity benefits shall be a bar to the recovery of sickness benefits provided by this Act for  the same compensable period of sixty (60) days for the same  childbirth, abortion, or miscarriage;          "(e) That the maternity benefits provided under this  Section shall be paid only for the first four deliveries after March 13, 1973;         "(f) That the SSS shall immediately reimburse the employer of one hundred percent (100%) of the amount of maternity benefits advanced to the employee by the employer  upon receipt of satisfactory proof of such payment and legality  thereof; and              "(g) That if an employee should give birth or suffer  abortion or miscarriage without the required contributions  having been remitted for her by her employer to the SSS, or  without the latter having been previously notified by the  employer of the time of the pregnancy, the employer shall pay  to the SSS damages equivalent to the benefits which said   employee would otherwise have been entitled to, and the SSS  shall in turn pay such amount to the employee concerned."

D. VACATION AND SICK LEAVE

McLeod vs NLRCJanuary 23, 2007

Carpio

Facts John F. McLeod filed a complaint for

retirement benefits, vacation and sick leave benefits, non-payment of unused airline tickets, holiday pay, underpayment of salary and 13th month pay, moral and exemplary damages, attorney’s fees plus interest against Filipinas Synthetic Corporation (Filsyn), Far Eastern Textile Mills, Inc., Sta. Rosa Textiles, Inc., Patricio Lim and Eric Hu.

McLeod’s contentions: He was hired at Universal Textiles, Inc. Under President Patricio Lim. Patricio Lim formed Peggy Mills, Inc. (PMI) with Filsyn having controlling interest. He was absorbed by Peggy Mills. He then retired and received benefits which were convertible to cash if unused as per Collective Bargaining Agreement provision. Respondents however failed to pay him his vacation and leave credits, his holiday pay up, etc. due to shortage of funds. Filsyn then ssold Peggy Mills to Far Eastern Textile Mills and this was renamed to Sta. Rosa Textile. And when he reached retirement age, he again requested for his retirement and other benefits. Hence, this complaint, asking for full payment of all benefits. Respondents, being one and the same entities, are solidarily liable for all benefits that McLeod is entitled to.

Respondents contentions: Peggy Mills closed due to irreversible losses but the corporation still exists. McLeod was hired at Sta. Rosa Textile but then he resigned. Filsyn and Far Eastern Textiles are separate legal entitites and have no employer-employee relationship with McLeod. He therefore has no cause of action against Filsyn, Far Eastern Textile, Sta. Rosa Textile, and Eric Hu who is the director of Sta. Rosa Textile Corp. Besides, Sta. Rosa onlly acquired the assets and not the liabilities of Peggy Mills. Patricio Lim was only impleaded as Board Chairman of Sta. Rosa Textile and not as private individual. And when the union held a strike resulting in closure due to losses, McLeod was supposed to remedy the problem but due to his absence and lack of attention, the company closed. Furthermore, whatever amount McLeod is entitled should be offset with the counterclaims.

Labor arbiter: held all respondents as jointly and solidarily liable for complainant’s money claims.

NLRC: reversed labor arbiter’s decision. CA: upheld NLRC’s findings. It rejected

McLeod’s theory that all respondent corporations are the same corporate entity

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which shall be held solidarily liable for the payment of his monetary claims. There should be clear and convincing evidence that SRTI, FETMI, and Filsyn were being used as alter ego for the sole benefit of Peggy Mills, Inc, otherwise said corporations should be treated as distinct and separate from each other. McLeod failed to substantiate his claims.

Issues1. WON CA decision is in accord with law and

jurisprudenceo WON an employer-employee relationship exists between the private respondents and McLeod for purposes of determining employer liability to McLeodo WON private respondents may avoid their financial obligations to the petitioner by invoking the veil of corporate fiction

2. WON McLeod is entitled to the relief he seeks against private respondents

Held and Ratio1. Yes Noo Records disclose the McLeod was am

employee of PMI. After the strike, plant operations were stopped. PMI informed its employees of the closure. PMI payed all of its employees except McLeod. Under the compromise agreement, the employer-employee relationship between them ended. McLeod’s claims that FETMI purchase PMI and that FETMI merely renamed PMI as SRTI is untenable. What took place between PMI and SRTI was dation in payment with lease.

o There is no showing in this case that the subject dation in payment involved merger or consolidation. Neither is there any showing of those indicative factors that SRTI is a mere instrumentality of PMI. SRTI did not expressly or impliedly agree to assume any of PMI’s debts..McLeod did not present any evidence to show the alleged renaming of PMI to Sta. Rosa Textiles Inc. McLeod could have presented evidence to support his allegation of employer-employee relationship between him and any of Filsyn, SRTI, and FETMI, but he did not.

Noo The assertion that "for purposes of

determining employer liability, all private respondents are one and the same employer" because: (1) they have

the same address; (2) they are all engaged in the same business; and (3) they have interlocking directors and officers, is untenable because a corporation is an artificial being invested by law with a personality separate and distinct from that of its stockholders and from that of other corporations to which it may be connected. But while a corporation may exist for any lawful purpose, the law will regard it as an association of persons or, in case of two corporations, merge them into one, when its corporate legal entity is used as a cloak for fraud or illegality. This is the doctrine of piercing the veil of corporate fiction. To disregard the separate juridical personality of a corporation, the wrongdoing must be established clearly and convincingly. It cannot be presumed. Here, the court did not fine any of the evils sought to be prevented by the doctrine of piercing the corporate veil.

o Personal liability of corporate directors, trustees or officers attaches only when (1) they assent to a patently unlawful act of the corporation, or when they are guilty of bad faith or gross negligence; (2) they consent to the issuance of watered down stocks or when, having knowledge of such issuance, do not forthwith file with the corporate secretary their written objection; (3) they agree to hold themselves personally and solidarily liable with the corporation; or (4) they are made by specific provision of law personally answerable for their corporate action. McLeod failed to prove any of the foregoing exceptions in the present case, hence McLeod cannot hold Patricio solidarily liable with PMI. Besides, there is nothing on record to show that Patricio acted in bad faith in terminating McLeod’s services to warrant Patricio’s personal liability. PMI had no other choice but to stop plant operations. The work stoppage therefore was by necessity.

2. No McLeod is a managerial employee who is

excluded from the coverage of entitlement or payment of vacation leave and sick leave as well as to holiday pay as mentioned in Title I, Book Three of the Labor Code.

McLeod’s assertion of underpayment of his 13th month pay in December 1993 is unavailing since he was no longer an employee by that time.

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Also unavailing is McLeod’s claim that he was entitled to the "unpaid monetary equivalent of unused plane tickets for PMI has no company policy granting its officers and employees expenses for trips abroad. That at one time PMI reimbursed McLeod for his and his wife’s plane tickets in a vacation to London. could not be deemed as an established practice considering that it happened only once. To be considered a “regular practice,” the giving of the benefits should have been done over a long period, and must be shown to have been consistent and deliberate.

McLeod cannot successfully pretend that his monthly salary was reduced without his consent. McLeod testified that in 1990, Philip Lim explained to him why his salary would have to be reduced.

Since PMI has no retirement plan, Section 5, Rule II of the Rules Implementing the New Retirement Law shoould apply. Hence, with McLeod having worked with PMI for 12 years, from 1980 to 1992, he is entitled to a retirement pay equivalent to ½ month salary for every year of service based on his latest salary rate.

Finally, there is no basis for the award of moral damages. Moral damages are recoverable only if the defendant has acted fraudulently or in bad faith. From the records of the case, the Court finds no ultimate facts to support a conclusion of bad faith on the part of PMI.

The awards for exemplary damages and attorney’s fees are not proper in the present case.

REPUBLIC ACT NO. 8972AN ACT PROVIDING FOR BENEFITS AND

PRIVILEGES TO SOLO PARENTS AND THEIR CHILDREN, APPROPRIATING FUNDS

THEREFOR AND FOR OTHER PURPOSES

Section 2. Declaration of Policy. - It is the policy of the State to promote the family as the foundation of the nation, strengthen its solidarity and ensure its total development. Towards this end, it shall develop a comprehensive program of services for solo parents and their children to be carried out by the Department of Social Welfare and Development (DSWD), the Department of Health (DOH), the Department of Education, Culture and Sports (DECS), the Department of the Interior and Local Government (DILG), the Commission on Higher Education (CHED), the Technical Education and Skills Development Authority (TESDA), the National Housing Authority (NHA), the Department of Labor and Employment (DOLE) and other related government and nongovernment agencies.

Section 6. Flexible Work Schedule. - The employer

shall provide for a flexible working schedule for solo parents: Provided, That the same shall not affect individual and company productivity: Provided, further, That any employer may request exemption from the above requirements from the DOLE on certain meritorious grounds.

Section 8. Parental Leave. - In addition to leave privileges under existing laws, parental leave of not more than seven (7) working days every year shall be granted to any solo parent employee who has rendered service of at least one (1) year.

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