SAN MIGUEL BREWERY SALES FORCE UNION (PTGWO) V. HON. BLAS F.

OPLE
FACTS:
A collective bargaining agreement was entered into by petitioner San Miguel
Corporation Sales Force Union, and the private respondent, San Miguel Corporation,
Section 1, of Article IV of which provided as follows:

“Art. IV, Section 1. Employees within the appropriate bargaining unit shall be entitled
to a basic monthly compensation plus commission based on their respective sales."

Sometime in 1979, the company introduced a marketing scheme known as the

"Complementary Distribution System" (CDS) whereby its beer products were offered
for sale directly to wholesalers through San Miguel's sales offices.

Petitioner filed a complaint for unfair labor practice in the Ministry of Labor, with a
notice of strike on the ground that the CDS was contrary to the existing marketing
scheme (whereby the Route Salesmen were assigned specific territories within which
to sell their stocks of beer, and wholesalers had to buy beer products from them, not
from the company.)

It was alleged that the new marketing scheme violates the collective bargaining
agreement because the introduction of the CDS would reduce the take-home pay of
the salesmen and their truck helpers for the company would be unfairly competing
with them.
ISSUE
(1) Whether or not the CDS violates the collective bargaining agreement.
(2) whether or not it is an indirect way of busting the union.
RULING:
1. No. Public respondent was correct in holding that the CDS is a valid exercise of
management prerogatives:

“Except as limited by special laws, an employer is free to regulate, according to his

own discretion and judgment, all aspects of employment, including hiring, work
assignments, working methods, time, place and manner of work, tools to be used,
processes to be followed, supervision of workers, working regulations, transfer of
employees, work supervision, lay-off of workers and the discipline, dismissal and
recall of work. . . .”

Every business enterprise aims to increase its profits. In the process, it may adopt or
devise means designed towards that goal.

So long as a company's management prerogatives are exercised in good faith for the
advancement of the employer's interest and not for the purpose of defeating or
circumventing the rights of the employees under special laws or under valid
agreements, this Court will uphold them
2. No. San Miguel Corporation's proposed to compensate the members of its sales
force who will be adversely affected by the implementation of the CDS, by paying
them a so-called "back adjustment commission" to make up for the commissions they
might lose as a result of the CDS, proves the company's good faith and lack of
intention to bust their union.
NOTES
Abott Laboratories v. NLRC : “right of an employer to exercise what are clearly
management prerogatives. The free will of management to conduct its own business
affairs to achieve its purpose cannot be denied."
PHILIPPINE TELEGRAPH AND TELEPHONE COMPANY v. NLRC
FACTS:
Grace de Guzman was hired by petitioner as a reliever, specifically as a
"Supernumerary Project Worker (means EXCESS employee)," for a fixed period as
substitute for CF Tenorio who went on maternity leave.

Under the Reliever Agreement which she signed with company, her employment was
to be immediately terminated upon expiration of the agreed period.

After termination, services as reliever were again engaged by petitioner, this time in
replacement of one Erlinda F. Dizon who went on leave during both periods.

Her services as reliever were again engaged by petitioner, this time in replacement of
one Erlinda F. Dizon who went on leave during both periods. SHE IS ALREASY A
REGULAR EMPLOYEE. In the job application form, she stated that she was single
although she had contracted marriage a few months earlier.

The branch supervisor sent her a memorandum, reminding her about the company’s
policy of not accepting married woman for employment. She argues that she was not
aware of that policy and the petitioner remained unconvinced by her explanation. She
was dismissed thereafter.

She initiated a complaint for illegal dismissal and claim for non-payment of cost of
living allowance (COLA) before the NLRC.
LABOR ARBITER
Declared that private respondent, who had already gained the status of a regular
employee, was illegally dismissed by petitioner. Her reinstatement, plus payment of
the corresponding back wages and COLA, was correspondingly ordered, the labor
arbiter being of the firmly expressed view that the ground relied upon by petitioner in
dismissing private respondent was clearly insufficient, and that it was apparent that
she had been discriminated against on account of her having contracted marriage in
violation of company rules.
NLRC
Ruled that private respondent had indeed been the subject of an unjust and unlawful
discrimination by her employer, PT&T. However, the decision of the labor arbiter was
modi􀀼ed with the qualification that Grace de Guzman deserved to be suspended for
three months in view of the dishonest nature of her acts which should not be
condoned. In all other respects, the NLRC affirmed the decision of the labor arbiter,
including the order for the reinstatement of
private respondent in her employment with PT&T.
ISSUE
Whether or not the company policy of PT&T of not accepting married woman for
employment is valid.
RULING:
No. In the case at bar, petitioner's policy of not accepting any woman worker who
contracts marriage is contrary to the the right against, discrimination, afforded all
women workers by our labor laws and the Constitution

Petitioner's policy is in derogation of the provisions of Article 136 of the Labor Code
on the right of a woman to be free from any kind of stipulation against marriage in line
with her employment and it likewise contrary to good morals and public policy, tending
as it does to deprive a woman of the freedom to choose her status, a privilege that by
all accounts inheres in the individual as an intangible and inalienable right.

Hence, while it is true that the parties to a contract may establish any agreements,
terms, and conditions that they may deem convenient, the same should not be
contrary to law, morals, good customs, public order, or public policy. As a logical
consequences, it may even be said that petitioner's policy against legitimate marital
bonds would encourage illicit or common-law relations and subvert the sacrament of
marriage.

While loss of confidence is a just cause of termination of employment, it should not be

simulated. It must rest on an actual breach of duty committed by the employee and
not on the employer's impulses. Furthermore, it should never be used as a subterfuge
for causes which are improper, illegal, or unjustified.

AN EMPLOYEE ILLEGALLY DISMISSED A FEW DAYS BEFORE COMPLETION OF

HER PROBATIONARY EMPLOYMENT AND WHO WAS PREVIOUSLY HIRED
RELIEVER FOR SEVERAL TIMES GAINED REGULAR STATUS.

As regular status, and as she had been dismissed without just cause, she is entitled
to reinstatement without loss of seniority rights and other privileges and to full back
wages, inclusive of allowances and other benefits or their monetary equivalent.

However, as she had undeniably committed an act of dishonesty in concealing her

status, albeit under the compulsion of an unlawful imposition of petitioner, the three-
month suspension imposed by respondent NLRC must be upheld to obviate the
impression or inference that such act should be condoned.

It would be unfair to the employer if she were to return to its fold without any sanction
whatsoever for her act which was not totally justified. Thus, her entitlement to back
wages, which shall be computed from the time her compensation was withheld
up to the time of her actual reinstatement, shall be reduced by deducting
therefrom the amount corresponding to her three months suspension.
NOTES
1. Decreed in the Bible itself is the universal norm that women should be regarded
with love and respect
- prejudice against womankind been so pervasive as in the field of labor, especially
on the matter of equal employment opportunities and standards
- In the Philippine setting, women have traditionally been considered as falling
within the vulnerable groups or types of workers who must be safeguarded with
preventive and remedial social legislation against discriminatory
 - Constitution: a) Section 14, Article II on the Declaration of Principles and State
Policies, expressly recognizes the role of women in nation-building and commands
the State to ensure, at all times, the fundamental equality before the law of women
and men. b) Section 3 of Article XIII: requires the State to afford full protection to labor
and to promote full employment and equality of employment opportunities for all,
including an assurance of entitlement to tenurial security of all workers. c) Section 14
of Article XIII: mandates that the State shall protect working women through
provisions for opportunities that would enable them to reach their full potential.

2. Corrective labor and social laws on gender inequality have emerged with more
frequency in the years since the Labor Code was enacted on May 1, 1974 as
Presidential Decree No. 442, largely due to our country's commitment as a signatory
to the United Nations Convention on the Elimination of All Forms of Discrimination
Against Women (CEDAW).
-LAWS: a) RA No 2727 – prohibits discrimination against women in employment
b) RA No. 6955 – bans the “mail-order-bride” practice for a fee and export
of women
c) RA No. 7192 – “Women in Development and Nation Building Act,"
affords women
equal opportunities with men to act and to enter into contracts, and for appointment,
admission, training, graduation, and commissioning in all military or similar schools of
the Armed Forces of the Philippines and the Philippine National Police
d) RA No. 7322 – increasing the maternity benefits granted to women in
the private sector
e) RA No. 7877 – which outlaws and punishes sexual harassment in the
workplace and in the education and training environment
f) RA No. 8042 – Migrant Workers and Overseas Filipinos Act of 1995,"
which prescribes as a matter of policy, inter alia, the deployment of migrant workers,
with emphasis on women, only in countries where their rights are secure.
g) Family Code – women’s right in the field of civil law
i) Labor Code – Article 130-138 : involves right of women workers on
night work, facilities and standards, health and safety, protection to employment
simply of sex and ARTICLE 136 which prohibits discrimination merely by reason of
the marriage of employee.

3. Acknowledged as paramount in the due process scheme is the constitutional

guarantee of protection to labor and security of tenure. Employer shall establish
substantial evidence before dispensing the EE.

MANAGEMENT PREROGATIVES: which prescriptions encompass the matter of

hiring, supervision of workers, work assignments, working methods and assignments
as well as regulations on the transfer of employees, lay-off of workers, and the
discipline, dismissal, and recall of employees.

4. ARTICLE 136 of Labor Code

- Zialcita v. PAL : policy on requiring flight attendance to be single and will
automatically be separated from service once thay got married in VOID for being
violative of Article 136
- Gualberto v. Marinduque Mining and Industrial Corp : dismissing female
employees in the project the moment they get married due to lack of facilities for
married women.
- American Jurisprudence : job requirements which establish employer preference
or conditions relating to the marital status of an employee are categorized as a "sex-
plus" discrimination where it is imposed on one sex and not on the other. Further, the
same should be evenly applied and must not inflict adverse effects on a racial or
sexual group which is protected by federal job discrimination laws. Employment rules
that forbid or restrict the employment of married women, but do not apply to married
men, have been held to violate Title VII of the United States Civil Rights Act of 1964,
the main federal statute prohibiting job discrimination against employees and
applicants on the basis of, among other things, sex.

Upon the other hand, a requirement that a woman employee must remain unmarried
could be
justified as a "bona fide occupational qualification," or BFOQ, where the particular
requirements of the job would justify the same, but not on the ground of a general
principle, such as the desirability of spreading work in the workplace. A requirement of
that nature would be valid provided it reflects an inherent quality reasonably
necessary for satisfactory job performance. Thus, in one case, a no-marriage rule
applicable to both male and female flight attendants, was regarded as unlawful since
the restriction was not related to the job performance of the flight attendants.

CEDAW – PH under signatory

GOYA INC vs. GOYA, INC. EMPLOYEES UNION-FFW
FACTS:
Petitioner Goya Inc. hired contractual employees from PESO Resources
Development Corporation (PESO). This prompted Goya, Inc. Employees Union-FFW
(Union) to request for a grievance conference on the ground that the contractual
workers do not belong to the categories of employees stipulated in their CBA.
The Union also argued that hiring contractual employees is contrary to the union
security clause embodied in the CBA.

When the matter remained unresolved, the grievance was referred to the NATIONAL
CONCILLIATION AND MEDIATION BOARD NCMB for voluntary arbitration. The
Union argued that Goya is guilty of UNFAIR LABOR PRACTICE (ULP) for gross
violation of the CBA. The voluntary arbitrator dismissed the Unions charge of ULP but
Goya was directed to observe and comply with the CBA.

While the Union moved for partial consideration of the VOLUNTARY ARBITRATOR
(VA) decision, Goya immediately filed a petition for review before the Court of
Appeals to set aside the VAs directive to observe and comply with the CBA
commitment pertaining to the hiring of casual employees. Goya argued that hiring
contractual employees is a valid management prerogative. The Court of Appeals
dismissed the petition.
ISSUE
WON the act of hiring contractual employees a valid exercise of management
prerogative?
RULING:
No. The CA did not commit serious error when it sustained the ruling that the hiring of
contractual employees from PESO was not in keeping with the intent and spirit of the
CBA. In this case, a complete and final adjudication of the dispute between the
parties necessarily called for the resolution of the related and incidental issue of
whether the Company still violated the CBA but without being guilty of ULP as,
needless to state, ULP is committed only if there is gross violation of the
agreement.

Goya kept on harping that both the VA and the CA conceded that its engagement of
contractual workers from PESO was a valid exercise of management prerogative. It is
confused. To emphasize, declaring that a particular act falls within the concept of
management prerogative is significantly different from acknowledging that such act is
a valid exercise thereof. What the VA and the CA correctly ruled was that the
Companys act of contracting out/outsourcing is within the purview of management
prerogative. Both did not say, however, that such act is a valid exercise thereof.
Obviously, this is due to the recognition that the CBA provisions agreed upon by Goya
and the Union delimit the free exercise of management prerogative pertaining to the
hiring of contractual employees.

A collective bargaining agreement is the law between the parties. A collective

bargaining agreement or CBA refers to the negotiated contract between a legitimate
 labor organization and the employer concerning wages, hours of work and all other
terms and conditions of employment in a bargaining unit. As in all contracts, the
parties in a CBA may establish such stipulations, clauses, terms and conditions as
they may deem convenient provided these are not contrary to law, morals, good
customs, public order or public policy. Thus, where the CBA is clear and
unambiguous, it becomes the law between the parties and compliance therewith is
mandated by the express policy of the law.

As repeatedly held, the exercise of management prerogative is not unlimited; it is

subject to the limitations found in law, collective bargaining agreement or the general
principles of fair play and justice. DENIED.
NOTES

GOYA can only hire the following 3 types of employee:

 Regular
 Probational
 Casual
Goya hired CONTRACTUAL COMPANY – the union question it because it was only
stipulated in the CBA that only 3 types of employee can be hired.
What is the impact?
-dissipate the number of the union: this is their main concern.
CBA – must be respect because it is the law between ee and er. Hiring beyond those 3
stipulation, management prerogative is not valid. But absent the CBA, the hiring of
GOYA of other than the three is valid as long as lawful.
NATIONAL SUGAR REFINERIES CORPORATION v NLRC and NBSR
SUPERVISORY UNION
FACTS:
NASUREFCO was a GOCC which was privatized. NBSR Supervisory Union
represented the former supervisors of NASUREFCO. On June 1, 1988, NASUREFCO
implemented a Job Evaluation program affecting rank and file EEs. With the
implementation of the JE Program, the following adjustments were made:

(1) the members of respondent union were re-classified under levels S-5 to S-8 which
are considered managerial staff for purposes of compensation and benefits;
(2) there was an increase in basic pay of the average of 50% of their basic pay prior
to the JE Program, with the union members now enjoying a wide gap (P1,269.00 per
month) in basic pay compared to the highest paid rank-and-file employee;
(3) longevity pay was increased on top of alignment adjustments;
(4) they were entitled to increased company COLA of P225.00 per month;
(5) there was a grant of P100.00 allowance for rest day/holiday work.

This was essentially a promotion of the members of the respondent union. On June
20, 1990, members of NBSR Supervisory Union filed a complaint with the ELA for
non-payment of Rest-Day, Overtime PAY, and holiday pay in violation of Art. 100 of
the LC.

The ELA ruled for the Union, on the ground that since the members of the Union had
been receiving such benefits for a long time before the JE Program, such had turned
into a property right. On appeal, the NLRC affirmed the decision of the LA. Hence, the
instant petition.
NASUREFCO argues that the members of the Union are managerial employees and
is therefore exempt from the payment of the benefits claimed by the Union according
to Art. 82 of the LC.

LA:
the labor ruled that the along span of time during which the benefits were being paid
to the supervisors has accused the payment thereof to ripen into contractual
obligation; the complainants cannot be estopped from questioning the validity of the
new compensation package, hence there was no way for the individual supervisors to
express their collective response thereto prior to the formation of the union;
comparative computations presented by the private respondent union showed that the
P100.00 special allowance given NASUREFCO fell short of what the supervisors
ought to receive had the overtime pay rest day pay and holiday pay not been
discontinued, which arrangement, therefore, amounted to a diminution of benefits.

NLRC:
Affirmed the decision of LA on the ground that the members of respondent union are
not managerial employees, as defined under Article 212 (m) of the Labor Code and,
therefore, they are entitled to overtime, rest day and holiday pay.
ISSUE
Whether the members of respondent union are entitled to overtime, rest day and
holiday pay

Whether or not the union members, as supervisory employees, are to be considered

as officers or members of the managerial staff who are exempt from the coverage of
Article 82 of the Labor Code.
RULING:
Yes, the Court held that the Union members are managerial employees and are
exempt from the payment of rest day, overtime, and holiday pay.

The Court held that, according to Art. 82 of the LC managerial employees are exempt
from the payment of rest day, overtime, and holiday pay. Further, the Court held that
in determining if an employee is managerial or rank and file is not the title of the
employee, but the nature of the work performed by the employee.
Sec. 2, Rule 1, Book 3 of the Rules Implementing the Labor Code provide that
managerial employees are:
1. Their primary duty consists of performance of work directly related to the
management policies of employer.
2. They customarily and regularly exercise discretion and independent judgment.
3. They regularly and primarily assist the managerial employee whose primary
duty consist of the management of a department of the establishment of which
they are employed.
4. They execute, under general supervision, work along specialized or technical
lines requiring special training, experience or knowledge.
5. (5) they execute, under general supervision, special assignments and tasks.
6. They do not devote more than 20% of their hours worked in a work-week to
activities which are not directly related to the performance of their work
hereinbefore described.

In the case at bar, the Court held that the members of the Union are performing such
functions and are such managerial employees. Therefore, they are exempted from
the payment of rest day, overtime, and holiday pay.

Private respondent union has miserably failed to convince this Court that the
petitioner acted implementing the JE Program. There is no showing that the JE
Program was intended to circumvent the law and deprive the members of respondent
union of the benefits they used to receive.
NOTES
- 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 ."

- The test or rationale of this rule on long practice requires an indubitable showing that
the employer agreed to continue giving the benefitts knowingly fully well that said
employees are not covered by the law requiring payment thereof. In the case at bar,
 respondent union failed to sufficiently establish that petitioner has been motivated or
is wont to give these benefits out of pure generosity.

Class notes:
Supervisors cannot joint the labor union of rank and file because they are not entitled in
the provisions of book 3.
CHARLITO PEÑARANDA V. BAGANGA PLYWOOD CORP., ET AL.,
FACTS:
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.
Peñaranda filed a Complaint for illegal dismissal with money claims against BPC and
its general manager, Hudson Chua, before the NLRC. After failure to settle
harmoniously, the labor arbiter directed them to file a complaint for illegal dismissal
with money claims against BPC and its general manager, Hudson Chua before the
NLRC.

BPC - domestic corporation duly organized and existing under Philippine laws and is
represented by its General manager, Hudson Chua.

Peñaranda through counsel in his position paper alleges that he was not paid his
overtime pay, premium pay for working during holidays/rest days, night shift
differentials and claims for payment of damages and attorney's fees having been
forced to litigate the present complaint.

Because of the insistence of complainant he was paid his separation benefits.

Consequently, when respondent [BPC] partially reopened in January 2001,
[Peñaranda] failed to reapply. Hence, he was not terminated from employment much
less illegally.

He opted to severe employment when he insisted payment of his separation benefits.

Furthermore, being a managerial employee he is not entitled to overtime pay and if
ever he rendered services beyond the normal hours of work, [there] was no office
order/or authorization for him to do so. Finally, respondents allege that the claim for
damages has no legal and factual basis and that the instant complaint must
necessarily fail for lack of merit.
LABOR ARBITER
no illegal dismissal but found petitioner entitled to overtime pay, premium pay for
working on rest days, and attorney's fees in the total amount of P21,257.98.
NLRC
deleted overtime pay and premium pay -- because he was a managerial employee.
CA
denied petition for certiorari
ISSUE
Whether or not Penaranda is a regular, common employee entitled to monetary
benefits under Article 82 of the Labor Code.
RULING:

NO. Not a managerial employee. BUT MEMBER OF MANAGERIAL STAFF

WHICH STILL TAKES HIM OUT OF LABOR LAW COVERAGE.

No. He is not entitled to monetary benefits under Article 82 of the Labor Code. He is
not a managerial employee but a member of managerial staff which still makes him
exempted of labor law coverage.

Petitioner claims that he was not a managerial employee, and therefore, entitled to
the award granted by the labor arbiter.

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."

The Implementing Rules of the Labor Code state that managerial employees are
those who meet the following conditions:

"(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."

The Court disagrees with the NLRC's finding that petitioner was a managerial
employee. However, petitioner was a member of the managerial staff, which
also takes him out of the coverage of labor standards. Like managerial
employees, officers and members of the managerial staff are not entitled to the
provisions of law on labor standards. The Implementing Rules of the Labor Code
define members of a managerial staff as those with the following duties and
responsibilities:

"(1) The primary duty consists of the performance of work directly related to
management policies of the employer;
"(2) Customarily and regularly exercise discretion and independent judgment;
"(3) (i) Regularly and directly assist a proprietor or a managerial employee whose
primary duty consists of the management of the establishment in which he is
employed or subdivision thereof; or (ii) execute under general supervision work along
specialized or technical lines requiring special training, experience, or knowledge; or
(iii) execute under general supervision special assignments and tasks;
"(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."

As shift engineer, petitioner’s duties and responsibilities were as follows:

"1. To supply the required and continuous steam to all consuming units at minimum
cost.
"2. To supervise, check and monitor manpower workmanship as well as operation of
boiler and accessories.
"3. To evaluate performance of machinery and manpower.
"4. To follow-up supply of waste and other materials for fuel.
"5. To train new employees for effective and safety while working.
"6. Recommend parts and supplies purchases.
"7. To recommend personnel actions such as: promotion, or disciplinary action.
"8. To check water from the boiler, feedwater and softener, regenerate softener if
beyond hardness limit.
"9. Implement Chemical Dosing.
"10. Perform other task as required by the superior from time to time."

The foregoing enumeration, particularly items 1, 2, 3, 5 and 7 illustrates that petitioner

was a member of the managerial staff. His duties and responsibilities conform to the
definition of a member of a managerial staff under the Implementing Rules.

Petitioner supervised the engineering section of the steam plant boiler. His work
involved overseeing the operation of the machines and the performance of the
workers in the engineering section. This work necessarily required the use of
discretion and independent judgment to ensure the proper functioning of the steam
plant boiler. As supervisor, petitioner is deemed a member of the managerial staff.

NOTES
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.

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.
SAN MIGUEL BREWERY vs. DEMOCRATIC LABOR ORGANIZATION, ET AL.
GR L-18353. July 31, 1963.

FACTS:
● In this case, the employees leave the plant of the company to go on their
respective sales routes either at 7:00 a.m. for soft drinks trucks, or 8:00 a.m. for beer
trucks. They do not have a daily time record. The company never required them to start
their work as outside sales personnel earlier than the above schedule.
● The sales routes are so planned that they can be completed within 8 hours. The
moment these field employees leave the plant and while in their own sales routes, they
go back to the plant, load again, and make another round of sales.
● They receive monthly salaries and sales commission. Amount of compensation
depends upon their individual efforts or industry. On top of the monthly salary, they are
paid sales commissions that range from P30, P40, P60, P70, to sometimes P90, P100,
and P109 a month, at the rate of P.01 to P.01 1/2 per case.
● In 1953, Respondent Democratic Labor Association filed a complaint against San
Miguel Brewery for better employment conditions.
● The company denied the complaint and asked for the dismissal of such
complaint
● At the hearing in 1955, the union demanded for the ff: overtime pay, night-shift
differential pay, attorney’s fees, separation pay, and sick and vacation leave
compensation.
● Presiding Judge Bautista ruled that:
o those working outside the company’s premises are entitled to overtime
compensation, hence, the 8-hour Labor Law applies to them.
o For those who work at night, Bautista decreed that they be paid their
corresponding salary differentials for work done at night: 25% on the basis of their
salary to those who work from 6:00 to 12:00 pm and 75% to those who work from 12:01
to 6:00 in the morning.
o Work done during Sundays and holidays be paid additional compensation of 25%
as provided for in CA 444

● Petitioner filed for a Motion for Reconsideration but it was denied. This was
affirmed by the Court of Industrial Relations. Hence, they filed this petition.
ISSUE: Whether or not the 8-hour Labor Law applies to employees who are paid on
commission, piecework, “pakiao” basis

RULING: NO.
Eight-Hour Labor Law
The Eight-Hour Labor Law only has application where an employee or laborer is paid on
a monthly or daily basis, or is paid a monthly or daily compensation, in which case, if he
is made to work beyond the requisite period of 8 hours, he should be paid the additional
compensation prescribed by law.

Piece-work, “pakiao”, or commission basis; philosophy behind it

This law has no application when the employee or laborer is paid on a piece-work,
"pakiao", or commission basis, regardless of the time employed. The philosophy behind
this exemption is that his earnings in the form of commission based on the gross
receipts of the day. His participation depends upon his industry so that the more hours
he employs in the work the greater are his gross returns and the higher his commission.

No application to outside or field sales personnel

It is held that the Eight-Hour Labor Law has no application to said outside or field sales
personnel and that they are not entitled to overtime compensation where after the
morning roll call the outside or field sales personnel leave the plant of the company to
go on their respective sales routes and they do not have a daily time record but the
sales routes are so planned that they can be completed within 8 hours at most, and they
receive monthly salaries and sales commissions in variable amounts, so that they are
made to work beyond the required eight hours similar to piece work, "pakiao", or
commission basis regardless of the time employed, and the employees' participation
depends on their industry.

Night salary differentials retroactive

Watchmen who rendered night duties once every three weeks continuously during the
period of their employment should be paid 25% Additional compensation for work from
6:00 to 12:00 p.m. 75% additional compensation for work from 12:01 to 6:00 in the
morning retroactive prior to date of demand because a similar claim had been fied long
before and had been the subject of negotiation between the union and the company
which culminated in a strike which fizzled out with the understanding that such claim
should be settled in court.

Sundays and Holidays Pay

Watchmen who work on Sundays and holidays are entitled to extra pay for work done
during these days although they are paid on a monthly basis and are given one day off.
Section 4 of Commonwealth Act No. 444 expressly provides that no employer may
compel an employee to work during Sundays and legal holidays unless he is paid an
additional sum of his regular compensation. This proviso is mandatory, regardless of the
nature of the compensation. The only exception is with regard to public utilities who
perform some public service.

DISPOSITIVE PORTION:
WHEREFORE, the decision of the industrial court is modified. The award with regard to
extra work performed by those employed in the outside or field sales force is set aside.
The rest of the decision insofar as work performed on Sundays and holidays covering
watchmen and security guards, as well as the award for night salary differentials is
affirmed. No costs.
AUTO BUS TRANSPORT SYSTEMS, INC. V. ANTONIO BAUTISTA
FACTS:
Antonio Bautista has been employed as a driver-conductor by petitioner Auto Bus
Transport Systems, Inc., paid on commission basis.

On January 3, 2000, while respondent was driving the bus, he got into an accident.
He averred that the accident happened because he was compelled by the
management to go back to Isabela, although he had not slept for almost 24 hours
since he arrived in Manila.

He was not allowed to work until he fully paid the amount representing 30% of the
cost of repair of the damaged buses. After a month, he was sent a termination letter.

Bautista instituted a complain for illegal dismissal with money claims for non-payment
of 13 month pay and SIL.

Petitioner maintained that was replete with offenses involving reckless imprudence,
gross negligence and dishonesty – copies of reports and memos were presented as
evidence.

Petitioner also contends that in the exercise of management prerogative, respondent

was terminated only after respondent was provided opportunity to provide for an
explanation.
LABOR ARBITER
Dismissed the complaint for illegal dismissal. However, company must pay
respondent 13th month pay and Service Incentive leave (SIL)
NLRC
Modified decision of LA stating that respondent is not entitled to 13th month pay – SIL
is maintained.
CA
Denied petition for lack of merit; and affirmed in toto the decision of NLRC.
ISSUE
1)Whether or not respondent is entitled to Service incentive leave (SIL)
2)Whether or not 3-year prescriptive period is applicable to respondent’s claim of SIL.
RULING:
1st ISSUE
YES.

The grant of SIL has been delimited by the IRR of the Labor code to apply only to
those employees not explicitly excluded by Section 1 of Rule V. It states that 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.
The same is true to those who are engaged on task or contract basis, purely
commission basis. This phrase should be related to field personnel by application of
ejusdem generis

What must be ascertained in order to resolve the issue of propriety of the grant of SIL
to respondents is whether or not he is a field personnel.

Field personnel are 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 correctly concluded by the appellate court, respondent is not a field personnel but
a regular employee who performs tasks usually necessary and desirable to the usual
trade of petitioner’s business. There are inspectors assigned at strategic places who
board the bus and inspect the passengers and the conductor’s reports. There is also
a mandatory once-a-week car barn day where the bus is regularly checked.
Respondent, thus, is in constant supervision while in the performance of his work.
Thus, he is entitled to the grant of SIL.

2nd ISSUE

Art 291 of LC states that all money claims arising from E-E relationship shall be filed
within three years from the time the cause of action accrued. So the question is, when
does the cause of action for money claims accrue in order to determine the reckoning
date of the 3 year prescriptive period

Cause of action has 3 elements:

1) A right in favor of the plaintiff by whatever means and under whatever law it
arises or is created
2) An obligation on the part of the named defendant to respect or not to violate
such right and
3) An act or omission on the part of such defendant violative of the right of the
plaintiff or constituting a breach of the obligation of the defendant to the plaintiff

In cases of nonpayment of allowances and other monetary benefits, if it is established

that the benefits being claimed have been withheld from the employee for a period
longer than 3 years, the amount pertaining to the period beyond the three year
prescriptive period is therefore barred by prescription.
In case of SIL, the employee may choose to either use his leave credits or commute it
to its monetary equivalent if not exhausted at the end of the year. If the employee
entitled to SIL does not use or commute the same, he is entitled upon his resignation
or separation from work to the commutation of his accrued SIL

Applying Art 291 of the LC, we can conclude that the 3 year prescriptive period
commences not at the end of the year when the employee becomes entitled to the
commutation of his SIL but from the time when the employer refuses to pay its
monetary equivalent after demand of commutation or upon termination of the
employee’s services.

In the case at bar, respondent had not made use of his SIL nor demanded for its
commutation until his employment was terminated. Neither did petitioner compensate
his accumulated service incentive leave pay at the time of his dismissal. It was only
upon his filing of a complaint for illegal dismissal, one month from the time of his
dismissal, that respondent demanded from his former employer commutation of his
accumulated leave credits. His action, thus, accrued from the time when his employer
dismissed him and failed to pay his accumulated leave credits.

Therefore, the prescriptive period only commenced from the time the employer failed
to compensate his accumulated SIL pay at the time of his dismissal.

NOTES
MERCIDAR FISHING CORPORATION V. NLRC
FACTS:
Private Respondent Fermin Agao, Jr. (respondent/Ago) was employed as a bodegero
or ships quartermaster on February 12, 1988 in Mercidar Fishing Corporation
(petitioner/Corporation).

He alleged that he had been sick and was allowed to go on leave without pay for one
month (from April 28, 1990), but when he reported to work with a health clearance, he
was told to just come back another time because he cannot be reinstated
immediately. Petitioner refused to give him work.

Respondent asked for a certificate of employment and when he claimed it, petitioner
refused until respondent shall submit his resignation. Respondent refused to send his
resignation until he shall be given a separate pay. This resulted to the petitioner to
prevent Agao to enter the premises.

In the Corporation’s defense, petitioner allegedly abandoned his work because he

failed to report for work after his leave was expired. Petitioner stated that the
respondent was absent without leave for three months. In fact, the Corporation
assigned him to another vessel but respondent was left behind. When respondent
asked for a certificate of employment on the pretext that he was applying to another
fishing company.

Respondent filed a complaint against petitioner for illegal dismissal (stating that he
was constructively dismissed when petitioner refused to give him assignments aboard
its boat after he had reported to work on May 28, 1990), violation of P.D. No. 851, and
non-payment of five days service incentive leave for 1990.
LABOR ARBITER
Ordered to reinstate Ago with backwages, payment of 13th month pay and incentive
leave
NLRC
Dismissed the appeal of Corporation
ISSUE
1. Whether or not NLRC erred in ruling Fermin Agao, Jr. was not a field personnel
under the Labor Code.

2. Whether or not NLRC acted with grave abuse of discretion when it held that Fermin
Ago, Jr. was constructively dismissed..
RULING:
No (in both issues)

The issue of field personnel

Article 82 of the Labor Code provides for the meaning of field personnel:
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.

The Court cited Union of Filipro Employees (YFE) v. Vicar wherein the Court
explained the meaning of the phrase “whose actual hours of work in the field
cannot be determined with reasonable certainty in Art. 82 of the Labor Code”.
The Court held that it must be read in conjunction with Rule IV, Book III of the
Implementing Rules which states:

Rule IV Holidays with Pay

Section 1. Coverage - This rule shall apply to all employees except:
(e) Field personnel and other employees whose time and performance is
unsupervised by the employer.

In determining whether or not whether or not an employee actual working hours in the
field can be determined with reasonable certainty, query must be made as to whether
or not such employees time and performance is constantly supervised by the
employer.
Furthermore, the company in the given case has no way of determining whether their
sales personnel really spend hours in between in actual field work even if they report
to the office before 8:00 a.m. prior to field work and come back at 4:30 p.m.

In application to the case at hand, the fishermen like Ago do not have a choice but to
remain on board its vessel. Although they perform non-agricultural work away from
petitioners business offices, the fact remains that throughout the duration of their work
they are under the effective control and supervision of petitioner through the vessels
patron or master as the NLRC correctly held.

The issue of grave abuse of discretion

“The factual findings of quasi-judicial bodies are generally binding as long as they are
supported substantially by evidence in the record of the case. This is especially so
where, as here, the agency and its subordinate who heard the case in the first
instance are in full agreement as to the facts”.

Reinstatement
Reinstatement may not be ordered if as a result of the case between the parties, their
relation is already strained. In the case at hand, reinstatement shall be ordered.
NOTES
Union of Filipro Employees (YFE) v. Vicar (yung nakasulat lang din dito sa case hehe
baka tanungin ni atty.)

It is undisputed that these sales personnel start their field work at 8:00 a.m. after
having reported to the office and come back to the office at 4:00 p.m. or 4:30 p.m. if
they are Makati-based.
The petitioner maintains that the period between 8:00 a.m. to 4:00 or 4:30 p.m.
comprises the sales personnels working hours which can be determined with
reasonable certainty.

The Court does not agree. The law requires that the actual hours of work in the field
be reasonably ascertained. The company has no way of determining whether or not
these sales personnel, even if they report to the office before 8:00 a.m. prior to field
work and come back at 4:30 p.m., really spend the hours in between in actual field
work.

The Corporation in this case contends that sales personnel are strictly supervised as
shown by the Supervisor of the Day (SOD) schedule and the company circular. The
also contend that Rule IV, Book III of the Implementing Rules added another element
found in the law but the Court said that such provision only interpreted and
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 and purview of
Article 82 which defines field personnel.

This case held the salesmen of Nestle Philippines, Inc as filed personnel.
LABOR CONGRESS OF THE PHILIPPINES V. NLRC
FACTS:
Petitioners (99 persons) were rank-and-file employees of respondent Empire Food
Products, which hired them on various dates. Petitioners filed against private
respondents a complaint for payment of money claim[s] and for violation of labor
standard[s] laws. They also filed a petition for direct certification of petitioner Labor
Congress of the Philippines as their bargaining representative.

Petitioners represented by LCP President Benigno B. Navarro, Sr. and private

respondents Gonzalo Kehyeng and Evelyn Kehyeng in behalf of Empire Food
Products, Inc. entered into a Memorandum of Agreement.

Mediator Arbiter Antonio Cortez approved the memorandum of agreement and

certified LCP "as the sole and exclusive bargaining agent among the rank-and-file
employee of Empire Food Products for purposes of collective bargaining with respect
to wages, hours of work and other terms and conditions of employment".

On January 23, 1991, petitioners filed a complaint against private respondents for
Unfair Labor Practice, Union busting, violation of the Memorandum of Agreement,
Underpayment of Wages, and actual, moral and exemplary damages.

LABOR ARBITER
Labor Arbiter absolved private respondents of the charges, but ordered the
reinstatement of the individual complainants.
NLRC
On appeal, the National Labor Relations Commission vacated the Decision and
remanded the case to the Labor Arbiter for further proceedings. In a Decision dated
July 27, 1994, Labor Arbiter Santos made the following determination: “Complainants
failed to present with definiteness and clarity the particular act or acts constitutive of
unfair labor practice

As regards the issue of harassments [sic], threats and interference with the rights of
employees to self-organization which is actually an ingredient of unfair labor practice,
complainants failed to specify what type of threats or intimidation was committed and
who committed the same.

Anent the charge that there was underpayment of wages, the evidence points to the
contrary.

Finally, the claim for moral and exemplary damages has no leg to stand on when no
malice, bad faith or fraud was ever proven to have been perpetuated by respondents.”
On appeal, the NLRC, in its Resolution dated 29 March 1995, affirmed in toto the
decision of Labor Arbiter Santos.
ISSUE
Whether or not petitioners should be reinstated from the date of their dismissal up to
the time of their reinstatement, with backwages, statutory benefits, damages and
attorney's fees.
RULING:
Invocation of the general rule that factual findings of the NLRC bind this Court is
unavailing under the circumstances. Initially, the court was unable to discern any
compelling reason justifying the Labor Arbiter's volte face from his 14 April 1992
decision reinstating petitioners to his diametrically opposed 27 July 1994 decision,
when in both instances, he had before him substantially the same evidence. Neither
do the court find the 29 March 1995 NLRC resolution to have sufficiently discussed
the facts so as to comply with the standard of substantial evidence.

Apparently, the Labor Arbiter perceived that if not for petitioners, he would not have
fallen victim to this stinging rebuke at the hands of the NLRC. Thus does it appear to
us that the Labor Arbiter, in concluding in his 27 July 1994 Decision that petitioners
abandoned their work, was moved by, at worst, spite, or at best, reluctantly glossed
over petitioner's evidence. On this score, we find the following observations of the
OSG most persuasive:

“In finding that petitioner employees abandoned their work, the Labor Arbiter and the
NLRC relied on the testimony of Security Guard Rolando Cairo that on January 21,
1991, petitioners refused to work. As a result of their failure to work, the cheese curls
ready for repacking on said date were spoiled.

The failure to work for one day, which resulted in the spoilage of cheese curls does
not amount to abandonment of work. In fact two (2) days after the reported
abandonment of work or on January 23, 1991, petitioners filed a complaint for, among
others, unfair labor practice, illegal lockout and/or illegal dismissal.”

BACKWAGES

Yes. Petitioners are entitled to reinstatement with full backwages pursuant to Article
279 of Labor Code.

It may be stressed that the burden of proving the existence of just cause for
dismissing an employee, such as abandonment, rests on the employer, a burden
private respondents failed to discharge. Private respondents, moreover, in
considering petitioners' employment to have been terminated by abandonment,
violated their rights to security of tenure and constitutional right to due process in not
even serving them with a written notice of such termination.

Petitioners are therefore entitled to reinstatement with full back wages pursuant to
Article 279 of the Labor Code. Nevertheless, the records disclose that taking into
account the number of employees involved, the length of time that has lapsed since
their dismissal, and the perceptible resentment and enmity between petitioners and
private respondents which necessarily strained their relationship, reinstatement would
be impractical and hardly promotive of the best interests of the parties. In lieu of
reinstatement then, separation pay at the rate of one month for every year of service,
with a fraction of at least six (6) months of service considered as one (1) year, is in
order.

That being said, the amount of back wages to which each petitioner is entitled,
however, cannot be fully settled at this time. Petitioners, as piece-rate workers having
been paid by the piece, there is need to determine the varying degrees of production
and days worked by each worker. Clearly, this issue is best left to the National Labor
Relations Commission.

As to the other benefits, namely, holiday pay, premium pay, 13th month pay and
service incentive leave which the Labor Arbiter failed to rule on but which petitioners
prayed for in their complaint, we hold that petitioners are so entitled to these benefits.

Three (3) factors lead us to conclude that petitioners, although piece-rate workers,
were regular employees of private respondents.
1. First, as to the nature of petitioners' tasks, their job of repacking snack food
was necessary or desirable in the usual business of private respondents, who
were engaged in the manufacture and selling of such food products;
2. second, petitioners worked for private respondents throughout the year, their
employment not having been dependent on a specific project or season; and
3. third, the length of time that petitioners worked for private respondents. Thus,
while petitioners' mode of compensation was on a "per piece basis," the status
and nature of their employment was that of regular employees.

OTHER BENEFITS:

The Rules Implementing the Labor Code exclude certain employees from receiving
benefits such as nighttime pay, holiday pay, service incentive leave and 13th month
pay, inter alia, "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." Plainly,
petitioners as piece-rate workers do not fall within this group.

As mentioned earlier, not only did petitioners labor under the control of private
respondents as their employer, likewise did petitioners toil throughout the year with
the fulfillment of their quota as supposed basis for compensation.

Further, in Section 8 (b), Rule IV, Book III which quote hereunder, piece workers are
specifically mentioned as being entitled to holiday pay

13TH MONTH PAY

In addition, the Revised Guidelines on the Implementation of the 13th Month Pay
Law, clearly exclude the employer of piece rate workers from those exempted from
paying 13th month pay.
The Revised Guidelines as well as the Rules and Regulations identify those workers
who fall under the piece-rate category as those who are paid a standard amount for
every piece or unit of work produced that is more or less regularly replicated, without
regard to the time spent in producing the same.

OVERTIME PAY:
As to overtime pay, the rules, however, are different. According to Sec. 2(e), Rule I,
Book III of the Implementing Rules, workers who are paid by results including those
who are paid on piecework, takay, pakiao, or task basis, if their output rates are in
accordance with the standards prescribed under Sec. 8, Rule VII, Book III, of these
regulations, or where such rates have been fixed by the Secretary of Labor in
accordance with the aforesaid section, are not entitled to receive overtime pay. Here,
private respondents did not allege adherence to the standards set forth in Sec. 8 nor
with the rates prescribed by the Secretary of Labor. As such, petitioners are beyond
the ambit of exempted persons and are therefore entitled to overtime pay. Once
more, the National Labor Relations Commission would be in a better position to
determine the exact amounts owed petitioners, if any
NOTES
DAVID V. MACASIO
FACTS:
Macasio filed before the LA a complaint against petitioner Ariel L. David, doing
business under the name and style "Yiels Hog Dealer," for non-payment of overtime
pay, holiday pay and 13th month pay. He also claimed payment for moral and
exemplary damages and attorney's fees. Macasio also claimed payment for service
incentive leave (SIL).

Macasio alleged before the LA that he had been working as a butcher for David since
January 6, 1995. Macasio claimed that David exercised effective control and
supervision over his work, pointing out that David:

1) set the work day, reporting time and hogs to be chopped, as well as the
manner by which he was to perform his work;
2) daily paid his salary of P700.00, which was increased from P600.00 in 2007,
P500.00 in 2006 and P400.00 in 2005; and
3) approved and disapproved his leaves.

Macasio added that David owned the hogs delivered for chopping, as well as the work
tools and implements; the latter also rented the workplace. Macasio further claimed
that David employs about twenty-five (25) butchers and delivery drivers.

In his defense, David claimed that he started his hog dealer business in 2005 and that
he only has ten employees. He alleged that he hired Macasio as a butcher or chopper
on "pakyaw" or task basis who is, therefore, not entitled to overtime pay, holiday pay
and 13th month pay pursuant to the provisions of the Implementing Rules and
Regulations (IRR) of the Labor Code. David pointed out that Macasio:

1) usually starts his work at 10:00 p.m. and ends at 2:00 a.m. of the following day
or earlier, depending on the volume of the delivered hogs;
2) received the fixed amount of P700.00 per engagement, regardless of the
actual number of hours that he spent chopping the delivered hogs; and
3) was not engaged to report for work and, accordingly, did not receive any fee
when no hogs were delivered.

LABOR ARBITER
The LA dismissed Macasio's complaint for lack of merit. The LA gave credence to
David's claim that he engaged Macasio on "pakyaw" or task basis. The LA concluded
that as Macasio was engaged on "pakyaw" or task basis, he is not entitled to
overtime, holiday, SIL and 13th month pay.
NLRC
The NLRC affirmed the LA ruling. Since Macasio was paid by result and not in terms
of the time that he spent in the workplace, Macasio is not covered by the Labor
Standards laws on overtime, SIL and holiday pay, and 13th month pay under the
Rules and Regulations Implementing the 13th month pay law.
CA
The CA partly granted Macasio's certiorari petition and reversed the NLRC's ruling for
having been rendered with grave abuse of discretion.

While the CA agreed with the LA and the NLRC that Macasio was a task basis
employee, it nevertheless found Macasio entitled to his monetary claims. As a task
basis employee, Macasio is excluded from the coverage of holiday, SIL and 13th
month pay only if he is likewise a "field personnel." As defined by the Labor Code, a
"field personnel" is one who performs the work away from the office or place of work
and whose regular work hours cannot be determined with reasonable certainty.

In Macasio's case, the elements that characterize a "field personnel" are evidently
lacking as he had been working as a butcher at David's "Yiels Hog Dealer" business
in Sta. Mesa, Manila under David's supervision and control, and for a fixed working
schedule that starts at 10:00 p.m.

Accordingly, the CA awarded Macasio's claim for holiday, SIL and 13th month pay for
three years, with 10% attorney's fees on the total monetary award. The CA, however,
denied Macasio's claim for moral and exemplary damages for lack of basis.

ISSUE
Whether or not Macasio, being a worker engaged on “pakyaw” or task basis is entitled
to receive a holiday, service incentive leave and 13th month pay?
RULING:
Holiday and service incentive leave pay – YES; 13th month pay – NO

Even a factual review shows that Macasio is David's employee

Selection and engament of the employee. David engaged the services of Macasio.
David confirmed this fact in his "Sinumpaang Salaysay," Also, Solano and Antonio
stated in their "Pinagsamang Sinumpaang Salaysay" that they are working in Yiels
that is owned by Ariel David and they know Macasio who is also a butcher and their
co-worker.

Wages. David paid Macasio's wages. Both David and Macasio categorically stated in
their respective pleadings that the former had been paying the latter P700.00 each
day after the latter had finished the day's task. Solano and Antonio also confirmed this
fact of wage payment in their "Pinagsamang Sinumpaang Salaysay."

Power of Dismissal. David had been setting the day and time when Macasio should
report for work. By having the power to control Macasio's work schedule, David could
regulate Macasio's work and could even refuse to give him any assignment, thereby
effectively dismissing him.

Control. David had the right and power to control and supervise Macasio's work as to
the means and methods of performing it. In addition to setting the day and time when
Macasio should report for work, the established facts show that David rents the place
where Macasio had been performing his tasks. Moreover, Macasio would leave the
workplace only after he had finished chopping all of the hog meats given to him for
the day's task. Also, David would still engage Macasio's services and have him report
for work even during the days when only few hogs were delivered for butchering.

Macasio is engaged on "pakyaw" or task basis

A distinguishing characteristic of "pakyaw" or task basis engagement, as

opposed to straight-hour wage payment, is the non-consideration of the time
spent in working. In a task-basis work, the emphasis is on the task itself, in the
sense that payment is reckoned in terms of completion of the work, not in terms of the
number of time spent in the completion of work. Once the work or task is completed,
the worker receives a fixed amount as wage, without regard to the standard
measurements of time generally used in pay computation.

In Macasio's case, the established facts show that he would usually start his
work at 10:00 p.m. Thereafter, regardless of the total hours that he spent at the
workplace or of the total number of the hogs assigned to him for chopping,
Macasio would receive the fixed amount of P700.00 once he had completed his
task. Clearly, these circumstances show a "pakyaw" or task basis engagement
that all three tribunals uniformly found.

In sum, the existence of employment relationship between the parties is determined

by applying the "four-fold" test; engagement on "pakyaw" or task basis does not
determine the parties' relationship as it is simply a method of pay computation.
Accordingly, Macasio is David's employee, albeit engaged on "pakyaw" or task
basis.

On the issue of Macasio's entitlement to holiday, SIL and 13th month pay

The general rule is that holiday and SIL pay provisions cover all employees. To be
excluded from their coverage, an employee must be one of those that these
provisions expressly exempt, strictly in accordance with the exemption.

The payment of an employee on task or pakyaw basis alone is insufficient to

exclude one from the coverage of SIL and holiday pay. They are exempted from
the coverage of Title I (including the holiday and SIL pay) only if they qualify as
"field personnel." The IRR therefore validly qualifies and limits the general exclusion
of "workers paid by results" found in Article 82 from the coverage of holiday and SIL
pay. This is the only reasonable interpretation since the determination of
excluded workers who are paid by results from the coverage of Title I is
"determined by the Secretary of Labor in appropriate regulations."

In Serrano, the Court, applying the rule on ejusdem generis declared that
"employees engaged on task or contract basis xxx are not automatically
exempted from the grant of service incentive leave, unless they fall under the
classification of field personnel." The Court explained that the phrase "including
those who are engaged on task or contract basis, purely commission basis"
found in Section 1(d), Rule V of Book III of the IRR should not be understood as
a separate classification of employees to which SIL shall not be granted.
Rather, as with its preceding phrase - "other employees whose performance is
unsupervised by the employer" - the phrase "including those who are engaged on
task or contract basis" serves to amplify the interpretation of the Labor Code
definition of "field personnel" as those "whose actual hours of work in the field
cannot be determined with reasonable certainty."

Entitlement to holiday pay in determining whether workers engaged on "pakyaw" or

task basis" is entitled to holiday and SIL pay, the presence (or absence) of employer
supervision as regards the worker's time and performance is the key: if the worker is
simply engaged on pakyaw or task basis, then the general rule is that he is
entitled to a holiday pay and SIL pay unless exempted from the exceptions
specifically provided under Article 94 (holiday pay) and Article 95 (SIL pay) of
the Labor Code. However, if the worker engaged on pakyaw or task basis also
falls within the meaning of "field personnel" under the law, then he is not
entitled to these monetary benefits.

Macasio does not fall under the classification of "field personnel"

The CA's finding in this regard is supported by the established facts of this case: first,
Macasio regularly performed his duties at David's principal place of business ; second,
his actual hours of work could be determined with reasonable certainty; and, third,
David supervised his time and performance of duties. Since Macasio cannot be
considered a "field personnel," then he is not exempted from the grant of
holiday, SIL pay even as he was engaged on "pakyaw" or task basis.

Entitlement to 13th month pay

With respect to the payment of 13th month pay however, we find that the CA legally
erred in finding that the NLRC gravely abused its discretion in denying this benefit to
Macasio.

The governing law on 13th month pay is PD No. 851. As with holiday and SIL pay,
13th month pay benefits generally cover all employees; an employee must be one of
those expressly enumerated to be exempted. Section 3 of the Rules and
Regulations Implementing P.D. No. 851 enumerates the exemptions from the
coverage of 13th month pay benefits. Under Section 3(e), "employers of those
who are paid on xxx task... basis, and those who are paid a fixed amount for
performing a specific work, irrespective of the time consumed in the
performance thereof" are exempted.

Note that unlike the IRR of the Labor Code on holiday and SIL pay, Section 3(e)
of the Rules and Regulations Implementing PD No. 851 exempts employees
"paid on task basis" without any reference to "field personnel." This could only
mean that insofar as payment of the 13th month pay is concerned, the law did
not intend to qualify the exemption from its coverage with the requirement that
the task worker be a "field personnel" at the same time.

NOTES
APEX MINING COMPANY, INC. V. NLRC AND SINCLITICA CANDIDA
FACTS:
Sinclitica Candida was employed by petitioner Apex Mining Company, Inc. to perform
laundry services at its staff house located at Masara, Maco, Davao del Norte. In the
beginning, she was paid on a piece rate basis. Later, she was paid monthly at
P250.00 a month which was ultimately increased to P575.00 a month.

One day, while she was attending to her assigned task and she was hanging her
laundry, she accidentally slipped and hit her back on a stone. She reported the
accident to her immediate supervisor Mila de la Rosa and to the personnel officer,
Florendo D. Asirit. As a result of the accident she was not able to continue with her
work. She was permitted to go on leave for medication. De la Rosa offered her the
amount of P2,000.00 which was eventually increased to P5,000.00 to persuade her to
quit her job, but she refused the offer and preferred to return to work. Petitioner did
not allow her to return to work and dismissed thereafter.

Private respondent filed a request for assistance with the DOLE.

LABOR ARBITER
Ordered the respondent, Apex Mining Company, Inc., Masara, Davao del Norte, to
pay the complainant of Salary Differential, Emergency Living Allowance, 13th month
pay, and separation pay.
NLRC
Dismiss the appeal for lack of merit.
ISSUE
WON private respondent should be treated as a mere househelper or domestic
servant and not as a regular employee of petitioner.
RULING:
No. The mere fact that the househelper or domestic servant is working within the
premises of the business of the employer and in relation to its business, as in its staff
houses for its guest or even for its officers and employees, warrants the conclusion
that such househelper or domestic servant is and should be considered as a regular
employee of the employer and not as a mere family househelper or domestic servant
as contemplated in Rule XIII, Section l(b), Book 3 of the Labor Code, as amended.

Under Rule XIII, Section l(b), Book 3 of the Labor Code, as amended, the terms
"househelper" or "domestic servant" are defined as follows:

The term "househelper" as used herein is synonymous to the term "domestic servant"
and shall refer to any person, whether male or female, who renders services in and
about the employer's home and which services are usually necessary or desirable for
the maintenance and enjoyment thereof, and ministers exclusively to the personal
comfort and enjoyment of the employer's family.

The foregoing definition clearly contemplates such househelper or domestic servant

who is employed in the employer's home to minister exclusively to the personal
comfort and enjoyment of the employer's family. Such definition covers family drivers,
domestic servants, laundry women, yayas, gardeners, houseboys and other similar
househelps. The definition cannot be interpreted to include house help or
laundrywomen working in staff houses of a company, like petitioner who attends to
the needs of the company's guest and other persons availing of said facilities.

The criteria is the personal comfort and enjoyment of the family of the employer in the
home of said employer. While it may be true that the nature of the work of a
househelper, domestic servant or laundrywoman in a home or in a company staff
house may be similar in nature, the difference in their circumstances is that in the
former instance they are actually serving the family while in the latter case, whether it
is a corporation or a single proprietorship engaged in business or industry or any
other agricultural or similar pursuit, service is being rendered in the staff houses or
within the premises of the business of the employer. In such instance, they are
employees of the company or employer in the business concerned entitled to the
privileges of a regular employee.

There is enough evidence to show that because of an accident which took place while
private respondent was performing her laundry services, she was not able to work
and was ultimately separated from the service. She is, therefore, entitled to
appropriate relief as a regular employee of petitioner. Inasmuch as private respondent
appears not to be interested in returning to her work for valid reasons, the payment of
separation pay to her is in order.
NOTES
MANILA TERMINAL CO. V. CIR AND MANILA TERMINAL RELIEF AND MUTUAL
AID ASSOCIATION
FACTS:
Manila Terminal Company, Inc. the petitioner, undertook the arrastre service in
some of the piers in Manila's Port Area at the request and under the control of the
United States Army. The petitioner hired some 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.

The watchmen continued in the service with a number of substitutions and additions,
their salaries having been raised during the month of February to P4 per day for
the day shift and P6.25 per day for the nightshift. Hence, the private respondent,
Manila Terminal Relief and Mutual Aid Association, sent a letter addressed to the
DOLE for the investigation of the overtime pay.

Later on, the petitioner instituted the system of strict eight-hour shifts. On July 28,
1947, Manila Terminal Relief and Mutual Aid Association filed an amended petition
with the Court of Industrial Relations praying, among others, that the petitioner be
ordered to pay its watchmen or police force overtime pay from the commencement of
their employment.

By virtue of Customs Administrative Order No. 81 and Executive Order No. 228 of the
President of the Philippines, the entire police force of the petitioner was consolidated
with the Manila Harvor Police of the Customs Patrol Service, a Government agency
under the exclusive control of the Commissioner of Customs and the Secretary of
Finance The Manila Terminal Relief and Mutual Aid Association will hereafter be
referred to as the Association.
COURT OF INDUSTRIAL RELATION RULING
Judge Jimenez Yanson rendered a decision which ordered the petitioner to pay to its
police force. However, with regards to the pay for overtime service after the
watchmen had been integrated into the Manila Harbor Police, Judge Yanson ruled
that the court has no jurisdiction because it affects the Bureau of Customs, an
instrumentality of the Government having no independent personality and which
cannot be sued without the consent of the State.

Hence, Judge Yanson et al. ruled that to pay the private respondents there:
a) overtime on regular days at the regular rate and in additional amount of 25
percent
b) overtime on Sunday and legal holidays at the regular rate only and;
c) watchmen are not entitled to night differentials pay for the past services.

ISSUE
W/N the overtime pay should be granted to the watchmen
RULING:
YES, the petitioner’s watchmen should be entitled overtime pay with respect to the
Eight Hour Law which is the mandatory hours of work given to a worker. Hence,
anything beyond 8-hour period should be entitled an additional compensation.

It is stressed by the petitioner that the contract between them and the Association
upon the commencement of the employment of its watchman was to the certain rates
of pay, including overtime compensation. Thus, it is untenable since, the petitioner
has relied merely on the facts that its watchmen had worked on twelve-hour shifts at
specific wages per day.

In the said case, there was an agreement to work, wherein the watchmen found
themselves required to work for twelve hours a day in exchange for the thought that
they would then have an income on which to subsist. Thus, in times of acute
unemployment, the people, urged by the instinct of self-preservation, go from
place to place and from office to office in search for any employment, regardless of its
terms and conditions, their main concern in the first place being admission to
some work.

One of the petitioner’s contention is that the association had accept in the twelve-hour
shifts for more than 18 months. Hence, the watchmen already waived their rights for
extra compensation. The Court ruled in negative.

Citing the similar case of Detective & Protective Bureau, Inc. vs. Court of
Industrial Relations and United Employees Welfare Association, it is true that,
the watchmen did not claim for overtime pay, however, it cannot be said that they
waived the said overtime pay because the law gives them the right to extra
compensation. Hence, if they could not be held to have impliedly waived such extra
compensation, for the obvious reason that could not have expressly waived it.

Invocation of the principle of estoppel and the laches Petitioner:

The principle of estoppel and the laches cannot well be invoked against the
Association. In the first place, it would be contrary to the spirit of the Eight Hour
Labor Law, under which has already seen, the laborers cannot waive their right to
extra compensation. In the second place, the law principally obligates the employer
to observe it, so much so that it punishes the employer for its violation and leaves the
employee or laborer free and blameless. In the third place, the employee or laborer is
in such a disadvantageous position as to be naturally reluctant or even apprehensive
in asserting any claim which may cause the employer to devise a way for exercising
his right to terminate the employment.

Commonwealth Act No. 444 or “Eight-Hour Labor Law (prevailing law)

Under Sec. 6 of the same act, "any agreement or contract between the employer and
the laborer or employee contrary to the provisions of this Act shall be void ab initio,"
Hence, any participation or acquiescence of the employee or laborer that they
must work more than 8 hours as required by the law is indispensable , because
the latter in view of his need and desire to live, cannot be considered as being on the
same level with the employer when it comes to the question of applying for and
accepting an employment.
Under sections 3 and 5 expressly provides for the payment of extra compensation in
cases where overtime services are required, with the result that the employees or
laborers are entitled to collect such extra compensation for past overtime work.
Hence, failure of the employer to provide it to the employee shall constitute to
violation of the said act.

In conclusion, 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.

NOTES
Detective & Protective Bureau, Inc. vs. Court of Industrial Relations and United
Employees Welfare Association
SAN JUAN DE DIOS HOSPITAL EMPLOYEES ASSOCIATION V. NLRC
FACTS:
Petitioners who are the rank-and-file employee-union officers and members of San
Juan De Dios Hospital Employees Association, sent a writte request with attached
support signatures requesting and pleading for the expeditious implementation and
payment by respondent" Juan De Dios Hospital "of the '40-HOURS/5-DAY
WORKWEEK' with compensable weekly two (2) days off provided for by Republic Act
5901 as clarified for enforcement by the Secretary of Labor's Policy Instructions No.
54 dated April 12, 1988."

Respondent hospital failed to give a favorable response. Petitioners filed a complaint

regarding their "claims for statutory benefits under the above-cited law and policy
issuance.

LABOR ARBITER
Petitioners filed a complaint regarding their "claims for statutory benefits under the law
and policy issuance. The Labor Arbiter dismissed the complaint.
NLRC
Petitioners appealed before public respondent National Labor Relations Commission
(NLRC), which affirmed the Labor Arbiter's decision. Petitioners' subsequent motion
for reconsideration was denied; hence, this petition under Rule 65 of the Rules of
Court ascribing grave abuse of discretion on the part of NLRC in concluding that
Policy Instructions No. 54 "proceeds from a wrong interpretation of RA 5901" and
Article 83 of the Labor Code.
ISSUE
Whether Policy Instructions No. 54 issued by then Labor Secretary Franklin M. Drilon
is valid or not?
RULING:
UNCONSTITUTIONAL. Content of POLICY INSTRUCTIONS NO. 54 provides
personnel in subject hospital and clinics entitled to a full weekly wage for seven (7)
days if they have completed the 40-hour/5-day workweek in any given workweek
which was declared void by SC.

The court note that Policy Instruction No. 54 relies and purports to implement
Republic Act No. 5901, otherwise known as "An Act Prescribing Forty Hours A Week
Of Labor For Government and Private Hospitals Or Clinic Personnel", enacted on
June 21, 1969.

Reliance on Republic Act No. 5901 is misplaced for the said statute, as correctly ruled
by respondent NLRC, has long been repealed with the passage of the Labor Code on
May 1, 1974, Article 302 of which explicitly provides: "All labor laws not adopted as
part of this Code either directly or by reference are hereby repealed. All provisions of
existing laws, orders, decree, rules and regulations inconsistent herewith are likewise
repealed." Accordingly, only Article 83 of the Labor Code which appears to have
substantially incorporated or reproduced the basic provisions of Republic Act No.
5901 may support Policy Instructions No. 54 on which the latter's validity may be
gauged.

THE COURT MAY STRIKE DOWN ADMINISTRATIVE INTERPRETATION THAT

DEVIATES FROM THE PROVISION OF THE STATUTE

A cursory reading of Article 83 of the Labor Code betrays petitioners' position that
"hospital employees" are entitled to "a full weekly salary with paid two (2) days' off if
they have completed the 40-hour/5-day workweek". What Article 83 merely provides
are:

(1) the regular office hour of eight hours a day, five days per week for health
personnel, and

(2) where the exigencies of service require that health personnel work for six days or
forty-eight hours then such health personnel shall be entitled to an additional
compensation of at least thirty percent of their regular wage for work on the sixth day.

There is nothing in the law that supports then Secretary of Labor's assertion that
"personnel in subject hospitals and clinics are entitled to a full weekly wage for seven
(7) days if they have completed the 40-hour/5-day workweek in any given workweek".
Needless to say, the Secretary of Labor exceeded his authority by including a two
days off with pay in contravention of the clear mandate of the statute. Such act the
Court shall not countenance. Administrative interpretation of the law, we reiterate, is
at best merely advisory, and the Court will not hesitate to strike down an
administrative interpretation that deviates from the provision of the statute.

Indeed, even if we were to subscribe with petitioners' erroneous assertion that

Republic Act No. 5901 has neither been amended nor repealed by the Labor Code,
we nevertheless find Policy Instructions No. 54 invalid. A perusal of Republic Act No.
5901 reveals nothing therein that gives two days off with pay for health personnel who
complete a 40-hour work or 5-day workweek. In fact, the Explanatory Note of House
Bill No. 16630 (later passed into law as Republic Act No. 5901) explicitly states that
the bill's sole purpose is to shorten the working hours of health personnel and not to
dole out a two days off with pay.

The Secretary of Labor moreover erred in invoking the "spirit and intent" of Republic
Act No. 5901 and Article 83 of the Labor Code for it is an elementary rule 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. No additions or revisions may be permitted.
Policy Instructions No. 54 being inconsistent with and repugnant to the provision of
Article 83 of the Labor Code, as well as to Republic Act No. 5901, should be, as it is
hereby, declared void.
NOTES
RADA V. NLRC and Philnor Consultants and Planner
FACTS:
1. Sometime in 1977, Hilario Rada was contracted by Philnor Consultants and
Planners, Inc as a driver.

2. He was assigned to a specific project in Manila. The contract he signed was for 2.3
years.

3. His task was to drive employees to the project from 7am to 4pm.

4. He was allowed to bring home the company vehicle in order to provide a timely
transportation service to the other project workers. The project he was assigned to
was not completed as scheduled hence, since he has a satisfactory record, he was
re-contracted for an additional 10 months.

5. After 10 months the project was not yet completed. Several contracts thereafter
were made until the project was finished in 1985.

6. At the completion of the project, Rada was terminated as his employment was co-
terminous with the project.

7. Petitioner filed before the NLRC, National Capital Region, Department of Labor and
Employment, a Complaint for non-payment of separation pay and overtime pay.

8. Subsequently petitioner filed an Amended Complaint alleging that he was illegally

dismissed and that he was not paid overtime pay although he was made to render
three hours overtime work form Monday to Saturday for a period of three years.

LA
Labor Arbiter Dominador Cruz found petitioner to be a regular employee and ordered
respondent to reinstate him to his former position and to pay his overtime pay for the
three excess hours of work performed from January 1983 to December 1985.

NLRC
Upon Philnor’s appeal, NLRC ruled that complainant was a project employee and set
aside LA’s decision, which dismissed the complaint.
ISSUE
1) Whether or not petitioner is a regular employee.
2) Whether or not petitioner is entitled to overtime pay.
RULING:
1) No. Applying the ruling in Sandoval Shipyards vs. NLRC, Court ruled that
petitioner is a project employee whose work was coterminous with the project
for which they were hired. Although petitioner worked with Philnor as a driver for
eight years, his services were rendered only for a particular project which took that
same period of time to complete. To be considered a non-project worker, petitioner
must belong to a work pool from which the company would draw workers for
assignments to other projects at its discretion. In the case at bar, it is evident that
petitioner is a project employee considering that he does not belong to a "work pool"
and was only utilized for one particular project—the MNEE Stage 2 of respondent
company. Hence, his termination is valid by reason of the completion of the project
and the expiration of his employment contract.

2) Yes. The fact that he picks up employees of Philnor at certain points along
EDSA in going to the project site and drops them off at the same points on his way
back from the office going home to Marikina, Metro Manila is not merely incidental to
petitioner's job as a driver. Said transportation arrangement had been adopted for the
benefit of the employer. 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 mandatory, 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 AM and from 4:00 PM to around 6:00 PM, should be considered as
overtime. Court then ordered Philnor to pay for the three excess hours of work
performed during work days from January 1983 to December 1985.
NOTES
UNIVERSITY OF PANGASINAN FACULTY UNION V. UNIVERSITY OF
PANGASINAN And NATIONAL LABOR RELATIONS COMMISSION
FACTS:
The petitioner’s members are full-time professors, instructors, and teachers of
respondent University. The teachers in the college level teach for a normal duration of
ten (10) months a school year, divided into two (2) semesters of five (5) months each,
excluding the two (2) months summer vacation. These teachers are paid their salaries
on a regular monthly basis.

However, from November 7 to December 5, during the semestral break, they were not
paid their ECOLA. The private respondent claims that the teachers are not entitled
thereto because the semestral break is not an integral part of the school year and
there being no actual services rendered by the teachers during said period, the
principle of "No work, no pay" applies.

In 1981, petitioner, through its president, filed a complaint against the private
respondent with the Arbitration Branch of the NLRC, Dagupan District Office seeking
(a) the payment of Emergency Cost of Living Allowances (ECOLA) for November
7 to December 5, 1981, a semestral break; (b) salary increases from the sixty (60%)
percent of the incremental proceeds of increased tuition fees; and (c) payment of
salaries for suspended extra loads.

During the same school year (1981-1982), the private respondent was authorized by
the Ministry of Education and Culture to collect, as it did collect, from its students a
fifteen (15%) percent increase of tuition fees. Petitioner’s members demanded a
salary increase effective the first semester of said schoolyear to be taken from the
sixty (60%) percent incremental proceeds of the increased tuition fees. Private
respondent refused, compelling the petitioner to include said demand in the complaint
filed in the case at bar. While the complaint was pending in the arbitration branch, the
private respondent granted an across-the-board salary increase of 5.86%.
Nonetheless, the petitioner is still pursuing full distribution of the 60% of the
incremental proceeds as mandated by the Presidential Decree No. 451. Aside from
their regular loads, some of petitioner’s members were given extra loads to handle
during the same 1981-1982 schoolyear. Some of them had extra loads also allegedly
unpaid, to teach on September 21, 1981, but they were unable to teach as classes in
all levels throughout the country were suspended, although said days was proclaimed
by the President of the Philippines as a working holiday.

ISSUE
1)WON PETITIONER’S MEMBERS ARE ENTITLED TO ECOLA DURING THE
SEMESTRAL BREAK FROM NOV. 7 – DEC. 5, 1981 OF THE 1981-82 SCHOOL
YEAR.

2)WON 60% OF THE INCREMENTAL PROCEEDS OF INCREASED TUITION FEES

SHALL BE DEVOTED EXCLUSIVELY TO SALARY INCREASE.. (I don’t think na
main issue siya but isama ko na rin baka tanungin ni atty.)

RULING:

1)YES. Petitioner's members are full-time employees receiving their monthly salaries
irrespective of the number of working days or teaching hours in a month. They are
forced to go on leave during semestral breaks. These semestral breaks are in the
nature of work interruptions beyond their control. The duration of the semestral break
varies from year to year dependent on a variety of circumstances, affecting at times
only the private respondent but at other times, all educational institutions in the
country. As such, these breaks cannot be considered as absences within the meaning
of the law for which deductions may be made from monthly allowances.

The "no work, no pay" principle does not apply here. These teachers received their
regular salaries during this period. Such principle applies only when workers
voluntarily skip work. They were are constrained to take mandatory leave from work.
For this, they cannot be faulted nor can they be begrudged that which is due them
under the law. To a certain extent, the private respondent can specify dates when no
classes would be held. Surely, it was not the intention of the framers of the law to
allow employers to withhold employee benefits by the simple expedient of unilaterally
imposing "no work" days and consequently avoiding compliance with the mandate of
the law for these days.

The intention of the law is to grant ECOLA upon the payment of basic wages . Hence,
we have the principle of “No pay, no ECOLA” the converse of which finds
application in the case at bar. Petitioners cannot be considered to be on leave
without pay so as not to be entitled to ECOLA, for, as earlier stated, the petitioners
were paid their wages in full for the months of November and December of 1981,
notwithstanding the intervening semestral break. According to various Presidential
Decrees on ECOLAs :
“Allowances of Fulltime Employees . . .” that “Employees shall be paid in
full the required monthly allowance regardless of the number of their regular
working days if they incur no absences during the month. If they incur
absences without pay, the amounts corresponding to the absences may be
deducted from the monthly allowance . . .”; and on “Leave of Absence Without
Pay”, that “All covered employees shall be entitled to the allowance provided
herein when they are on leave of absence with pay.”

Thus, the semestral break may also be considered as “hours worked.” For this, the
teachers are paid regular salaries and, for this, they should be entitled to ECOLA. The
purpose of the law is to augment the income of employees to enable them to cope
with the harsh living conditions brought about by inflation; and to protect employees
and their wages against the ravages brought by these conditions.

2) YES. Under Section 3 of Presidential Decree 451, it is clear that the 60%
incremental proceeds from the tuition increase are to be devoted entirely to wage or
salary increases which means increases in basic salary. The law cannot be construed
to include allowances which are benefits over and above the basic salaries of the
employees. To charge such benefits to the 60% incremental proceeds would be to
reduce the increase in basic salary provided by law.

Law provides that 60% of tuition fee increase should go to wage increases and 40%
to institutional developments, student assistance, extension services, and return on
investments. Framers of the law intended this portion (return on investments) of the
increases in tuition fees to be a general fund to cover up for the university’s
miscellaneous expenses.

NOTES
NATIONAL SHIPYARDS AND STEEL CORPORATION
vs.
COURT OF INDUSTRIAL RELATIONS and DOMINADOR MALONDRAS
FACTS:
The petitioner NASSCO is the owner of several barges and tugboats used in the
transportation of cargoes and personnel in connection with its business of
shipbuilding and repair. In order that its bargeman could immediately be called to duty
whenever their services are needed, they are required to stay in their respective
barges, for which reason they are given living quarters therein as well as subsistence
allowance of P1.50 per day during the time they are on board. However, upon prior
authority of their superior officers, they may leave their barges when said barges are
idle.
On April 15, 1957, 39 crew members of petitioner's tugboat service, including therein
respondent Dominador Malondras, filed with the Industrial Court a complaint for the
payment of overtime compensation.
Thus, the Industrial court directed the court examiner to determine the facts.
On the examiner’s first report, covering January 1 to December 31, 1957, he found
out that the crew members were entitled to 5 hours each day for the period mentioned
of overtime pay which were promptly paid by NASSCO.
On his subsequent report, covering January 1, 1954 to December 31, 1956, he again
found out the crew members, except Dominador, were entitled to 5 hours each day
for the period mentioned of overtime pay. The reason behind is that Dominador’s time
sheet for the time period were missing.
Upon finding the aforementioned missing time sheet, Dominador filed a petition which
the Court granted, giving him the overtime pay due to him. The Court directed the
examiner as well to examine all the pertinent records to determine the proper
overtime pay.
On the re-examination, the examiner’s report gave Dominador an average of sixteen
(16) hours of overtime pay. Which the industrial court approved.
Thus this petition.

ISSUE
1) Whether the Industrial Court is correct
RULING:
No.
The 16 hours of overtime pay which the Court ordered, included the rest day of the
seamen inside their barges. Even though the allowable maximum hour of work is
eight (8) hours, this is not applicable to seaman since their jobs are different in nature.
The correct criterion in determining whether or not sailors are entitled to overtime pay
is not, therefore, whether they were on board and can not leave ship beyond the
regular eight working hours a day, but whether they actually rendered service in
excess of said number of hours.

Only the five (5) overtime hours should be credited.

NOTES
NATIONAL DEVELOPMENT COMPANY, petitioner,
vs.
COURT OF INDUSTRIAL RELATIONS and NATIONAL TEXTILE WORKERS
UNION, respondents.
FACTS:
 At the National Development Co., a government-owned and controlled
corporation, there were four shifts of work. One shift was from 8 a.m. to 4 p.m.,
while the three other shifts were from 6 a.m. to 2 p.m; then from 2 p.m. to 10 p.m.
and, finally, from 10 p.m. to 6 a.m.
 In each shift, there was a one-hour mealtime period, to wit: From (1) 11 a.m. to 12
noon for those working between 6 a.m. and 2 p.m. and from (2) 7 p.m. to 8 p.m.
for those working between 2 p.m. and 10 p.m.
 Petitioner does not want to pay for the 1 hour lunch time
 The records disclose that although there was a one-hour mealtime, petitioner
nevertheless credited the workers with eight hours of work for each shift
and paid them for the same number of hours.
 However, since 1953, whenever workers in one 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
that the two hours corresponding to the mealtime periods should not be included
in computing compensation. 
 CIR: Mealtime should be counted in the determination of overtime work

ISSUE
W/N mealtime breaks should be considered working time
RULING:

HELD: YES
 The legal working day for any person employed by another shall be of not
more than eight hours daily. When the work is not continuous, the time during
which the laborer is not working and can leave his working place and can rest
completely shall not be counted. (Sec. 1, Com. Act No. 444)
 It will be noted that, 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.
 In this case, the CIR’s finding that work in the petitioner company was
continuous and did not permit employees and laborers to rest completely
is not without basis in evidence and following our earlier rulings, shall
not disturb the same.
 The time cards show that the work was continuous and without interruption.
 There is also the evidence adduced by the petitioner that the pertinent
employees can’t freely leave their working place nor rest completely. (sabi sa
full text can freely leave idk huhu)
 There is furthermore the aspect that during the period covered the computation
the work was on a 24-hour basis and previously stated divided into shifts.
 From these facts, the CIR correctly concluded that work in petitioner company
was continuous and therefore the mealtime breaks should be counted as
working time for purposes of overtime compensation.

NOTES
SIME DARBY PILIPINAS, INC. vs. NLRC and
SIME DARBY SALARIED EMPLOYEE ASSOCIATION (ALU-TUCP)
FACTS:
 Petitioner is engaged in the manufacture of automotive tires, tubes and other
rubber products. Private Respondent, ALU-TUCP, is an association of monthly
salaried employees of petitioner at its Marikina factory.

 All company factory workers of petitioner in Marikina including members of private

respondent-union worked from 7:45 a.m. to 3:45 p.m. with a 30-minute paid "on
call" lunch break. However, on August 14, 1992, in a Memorandum issued by
petitioner, it advised all factory-based employees in Marikina Tire Plant, except
those employees who are working on shifts, that a change in work schedule will be
effective on Sept. 14, 1992, changing the lunch break between 12NN to 1PM
(Monday to Friday).

 Private respondent filed with the LA for unfair labor practice, discrimination and
evasion of liability basing its claim on the earlier resolution of the SC in “Sime
Darby International Tire Co., Inc. v. NLRC”.

RULING OF THE LA:

It dismissed the complaint: (a) the change in work schedule constituted a valid
exercise of management prerogative;  (b) it did not diminished the benefits granted to
factory workers, as the working time did not exceed 8 hours; (c) factory workers would
be unjustly enriched if they will be paid during lunch break, even if they are no longer
“on call” or required to work during breaks; and (d) earlier SC decision not applicable,
it involves discrimination of employees who were not paid for their 30-minute lunch
break, while the rest are paid.

Private respondent appealed to the NLRC.

RULING OF THE NLRC:

It dismissed the appeal. However, on MR by private respondent, the NLRC, with the
2 new commissioners, reversed its decision. It considered the former SC decision in
the 1990 Sime Darby Case. The NLRC declared that the new work schedule deprived
the employees of the benefits of a time-honored company practice of providing its
employees a 30-minute paid lunch break resulting in an unjust diminution of company
privileges prohibited by Art. 100 of the Labor Code, as amended.

Hence, a petition to the SC.

ISSUE
Whether or not the act of management in revising the work schedule of its employees
and discarding their paid lunch break constitutive of unfair labor practice? 
RULING:
No. We agree with petitioner. The right to fix the work schedules of the employees
rests principally on their employer.

While the old work schedule included a 30-minute paid lunch break, the employees
could be called upon to do jobs during that period as they were "on call." Even if
denominated as lunch break, this period could very well be considered as working
time because the factory employees were required to work if necessary and were
paid accordingly for working. But with the new work schedule, the employees are now
given a one-hour lunch break without any interruption from their employer. Since the
employees are no longer required to work during this one-hour lunch break, there is
no more need for them to be compensated for this period.

We agree with the Labor Arbiter that the new work schedule fully complies with the
daily work period of eight (8) hours without violating the Labor Code. Besides, the
new schedule applies to all employees in the factory similarly situated whether they
are union members or not.

Sime Darby case, not applicable. The present case pertains to issue of change of
work schedule, and not discrimination of employees.

Further, management retains the prerogative, whenever exigencies of the service so

require, to change the working hours of its employees. So long as such prerogative is
exercised in good faith for the advancement of the employer's interest and not for the
purpose of defeating or circumventing the rights of the employees under special laws
or under valid agreements, this Court will uphold such exercise.
NOTES
BISIG NG MANGGAGAWA NG PHILIPPINE REFINING CO., INC v. PHILIPPINE
REFINING CO., INC
FACTS:
On April 15,1966, Bisig ng Manggagawa ng Philippine Refining Company, Inc., as the
representative union of the rank and file employees of the Philippine Refining Co.,
Inc., filed with the Court of First Instance of Manila a petition for declaratory relief
praying, among others that a declaratory judgment be rendered declaring and
adjudicating the rights and duties of petitioner and respondent under their Collective
agreements and further declaring that the Christmas bonus of one month or thirty
days pay and other de determinable benefits should be included for the purpose of
computation of the overtime pay spread throughout the twelve months period of each
year from August, 1963 up to the present and subsequently hereafter.

Petitioner’s Arguments:
The union contended that the respondent company was under obligation to include
the employees' Christmas bonus and other fringe benefits in the computation of their
overtime pay by virtue of the ruling of this Court in the case of NAWASA vs. NAWASA
Consolidated Unions, et al

Respondent Corporation’s Arguments:

It contends that ever did the parties intend, in the 1965 collective bargaining
agreement and in prior agreements, to include the employees' Christmas bonus and
other fringe benefits in the computation of the overtime pay and that the company
precisely agreed to a rate of 50%, which is much higher than the 25% required by the
Eight-Hour Labor Law (Commonwealth Act No. 444, as amended), on the condition
that in computing the overtime pay only the "regular base pay" would be considered.
Furthermore, respondent company contended that the ruling of this Court in the
NAWASA case relative to the computation of overtime compensation could not be
applied to its employees since it was a private corporation and not a government-
owned or controlled corporation like the NAWASA.

Respondent company refused to give in to such demand contending that — (1) the
company agreed to a 5% overtime rate, which was higher than the 25% rate required
by law, precisely on the condition that the same should be computed solely on the
basis of the employees' basic monthly salary, excluding Christmas bonus and other
fringe benefits; (2) the parties had the freedom to choose the basis for computing the
overtime pay provided that the same should not be less than the minimum prescribed
by law; and (3) the NAWASA decision was inapplicable to a private corporation like
the Philippine Refining Co

Court of First Instance:

During the trial, the parties presented their respective witnesses from whose
testimonies the following facts were established: that the collective bargaining
agreements entered into between the parties before 1965 all contained a provision
similar to the aforequoted Sec. 6, Art. VI of the 1965 collective bargaining agreement;
that in the enforcement of said earlier agreements, the overtime compensation of the
employees was computed on the basis solely of their basic monthly pay, i.e.,
excluding the employees' Christmas bonus and other fringe benefits; that in the
negotiations which led to the execution of the 1965 collective bargaining agreement,
the matter of the proper interpretation of the phrase "regular base pay" was
discussed; that the petitioner union demanded that the NAWASA ruling should be
applied by including the employees' Christmas bonus and other fringe benefits in the
computation of the overtime compensation

CFI issued a judgment declaring that the term "regular base pay" in Section 6, Article
VI of Exhibit A refers only to "regular base pay" and does not include Christmas
bonus and other fringe benefits.

CA AFFIRMED THE DECISION OF CFI MANILA HENCE THIS APPEAL

ISSUE
Whether or not the phrase "regular base pay" as used in the above-quoted provision
of the 1965 CBA includes Christmas bonus and other fringe benefits
RULING:

Yes, the phrase "regular base pay" is clear, unequivocal and requires no
interpretation. It means regular basic pay and necessarily excludes money received in
different concepts such as Christmas bonus and other fringe benefits. In this
connection it is necessary to remember that in the enforcement of previous collective
bargaining agreements containing the same provision of overtime pay at the rate of
regular base pay plus 50% thereof", the overtime compensation was invariably based
only on the regular basic pay, exclusive of Christmas bonus and other tinge benefits.

Applying the NAWASA ruling to the above provision of law, We arrive at the following
conclusion: all employees covered by said law are under legal compulsion to grant
their employees overtime compensation in amounts not less than their basic pay and
the fringe benefits regularly and continuously received by them plus 25% thereof. This
does not however mean that agreements concerning overtime compensation should
always provide for a computation based on the employee's "regular wage or salary
i.e. regular base pay plus fringe benefits regularly and continuously received. In fine,
the parties may agree for the payment of overtime compensation in an amount to be
determined by applying a formula other than the statutory formula of "regular wage or
qqqs plus at least twenty-five per centum additional" provided that the result in
applying the contractual formula is not less than the result in applying said statutory
formula. In the case at bar, the contractual formula of "regular base pay plus 50%
thereof" yields an overtime compensation which is higher than the result in applying
the statutory formula as elaborated in the Nawasa case. Consequently, its validity is
upheld and the parties are enjoined to accord due respect to it.

NAWASA Ruling:

It has been held that for purposes of computing overtime compensation a regular
wage includes 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. The 'regular rate' of pay also
ordinarily includes incentive bonus or profit-sharing payments made in addition to the
normal basic pay, and it was also held that the higher rate for night, Sunday and
holiday work is just as much a regular rate as the lower rate for daytime work. The
higher rate is merely an inducement to accept employment at times which are not as
desirable from a workman's standpoint. Respondent court, therefore, correctly
included such differential pay in computing the weekly wages of those employees and
laborers who worked seven days a week and were continuously receiving 25%
Sunday differential for a period of three months immediately preceedin g the
implementation of Republic Act 1880.
NOTES
PAL EMPLOYEES SAVINGS AND LOAN ASSOCIATION 
VS
 NATIONAL LABOR RELATIONS COMMISSION
FACTS:
On October 10, 1990, private respondent filed with public respondent a complaint for
non-payment of overtime pay and non-payment of the P25.00 statutory minimum
wage increase which was mandated by RA NO. 6727. The private respondent then
filed a supplemental complaint for illegal suspension praying for the reinstatement and
payment of backwages but before the case was submitted for resolution, the private
respondent filed a “Motion to withdraw Supplemental Complaint” on the ground that a
separate action for illegal suspension, illegal dismissal, etc. had been filed and was
pending before another labor arbiter. Because of this, the issue was decided by the
public respondent and which is under review by the court and only involves his claim
for overtime pay.

On November 26, 1990, the private respondent filed his position paper with the labor
arbiter and is alleged that he started working with PESALA sometime las March 1,
1986 as a company guard and was receiving a monthly salary of P1990 plus an
emergency allowance of P510.00 and that he was required to work 12 hours a day.
Respondent Board of Directors then held a board meeting wherein they approved a
salary adjustment for the complainant which increased his salary to P2310. On
August 25, 1987, due to his impressive performance his salary was adjusted again by
the President of the Association to P2880. It was attached on the position paper that
during his entire period of employment with the respondent, he was required to
perform overtime work without any additional compensation from the latter. On
October 12, 1990, the complainant was suspended for a period of 37 days for an
offense he committed. Petitioner then went to PESALA and filed its position paper
wherein it stated that the complainant was charged with serious misconduct or
disobedience of the lawful orders of respondent or its officers and habitual neglect of
his duties. It was stated that the complainant forwarded the checks corresponding to
withdrawals without the signature of the Treasurer and President of PESALA which is
the root cause of his offense. It was also stated there that the complainant failed to
surrender the keys of the office when he went to vacation. The labor arbiter then
rendered a decision which entitled the complainant for overtime pay, hence, the
petitioner then appealed to the NLRC but was then rejected. The petitioner then filed
the instant special civil action before the court.

It was revealed in the payroll sheets that the complainant received his substantial
overtime pay. The court was asked then for a TRO because of this evidence.

ISSUE
Whether or not the NLRC committed a grave abuse of discretion for allowing the
complainant to receive overtime pay?
Is there Unjust Enrichment?

BASIS of NLRC’s decision?

Newly Discovered Evidence
RULING:
RULING:
1. No, we find for the private respondent and uphold the respondent NLRC's
ruling that he is entitled for overtime pay.
Based on petitioner's own computations, it appears that the basic salary plus
emergency allowance given to private respondent did not actually include the
overtime pay claimed by private respondent. Following the computations it
would appear that by adding the legal minimum monthly salary which at the
time was P1,413.00 and the legal overtime pay P877.50, the total amount due
the private respondent as basic salary should have been P2,290.50. By adding
the emergency cost of living allowance (ECOLA) of P510.00 as provided by the
employment contract, the total basic salary plus emergency allowance should
have amounted to P2,800.50. However, petitioner admitted that it actually paid
private respondent P1,990.00 as basic salary plus P510.00 emergency
allowance or a total of only P2,500.00. Undoubtedly, private respondent was
shortchanged in the amount of P300.50. Petitioner's own computations thus
clearly establish that private respondent's claim for overtime pay is valid.

2. Petitioner contends that the award of overtime pay is "plain and simple unjust
and illegal enrichment." Such award "in effect sanctioned and approved the
grant of payment to respondent Esquejo which will result in double payment for
the overtime work rendered by paid employee." Also, per petitioner, "(n)othing
in the Labor Code nor in the Rules and Regulations issued in the
implementation thereof prohibits the manner of paying the overtime pay (by)
including the same in the salary."

This is begging the issue. To reiterate, the main question raised before the
labor tribunals is whether the provision on wages in the contract of employment
already included the overtime pay for four (4) working hours rendered six days
a week in excess of the regular eight-hour work. And we hold that the tribunals
below were correct in ruling that the stipulated pay did not include overtime.
Hence, there can be no undue enrichment in claiming what legally belongs to
private respondent.

3. "Respondent claims that the award of P28,344.55 is bereft of any factual basis.
Records show that as per computation of the office of the Fiscal Examiner,
(Records, p. 116) the said amount was arrived at. The computation was
however based on the assumption that the complainant regularly reported for
work. Records however show that the complainant absented himself from work
for one day in August 1989. (Records, p. 63) For this unworked day, no
overtime pay must be due. As to the rest of his period of employment subject
 to the three year limitation rule which dates from October 10, 1987 up to his
appointment as Ledger Custodian on December 1, 1989 after which is regular
work period was already reduced to eight hours, there being no showing that
the complainant absented himself from work, and he being then required to
work for a period of twelve hours daily, We therefore rule on complainant's
entitlement to overtime compensation for the duration of the aforesaid period in
excess of one working day.

4. Because of the payroll sheets presented, which is  Contrary to petitioner's

claim however, said documents consisting of payroll sheets, cannot be
considered as "newly-discovered evidence" since said papers were in its
custody and possession all along, petitioner being the employer of private
respondent. "It is clear from the payroll, although the substantial pages thereof
do not show that the net amount indicated therein have been received or duly
acknowledged to have been received by the complainant, THAT OVERTIME
PAYMENTS THAT WERE MADE REFER TO WORK RENDERED DURING
COMPLAINANT'S OFF DAYS. What has been rightfully claimed by the
complainant and awarded by this Honorable Office is the overtime works (sic)
rendered by the complainant daily for six (6) days a week computed at four (4)
hours per day. This computation is based on the evidence thus submitted by
the parties. All appointments issued by the respondent carries (sic) with it (sic)
that the basic salary of the complainant is equivalent to 12 hours work
everyday for six (6) days a week, hence, the four (4) hours overtime daily was
not considered and therefore not paid by the respondent."

NOTES
Lagatic vs. NLRC.
FACTS:

Romeo Lagatic (Lagatic) was employed in May 1986 by Cityland, first as a

probationary sales agent, and later on as a marketing specialist. He was tasked with
soliciting sales for the company, with the corresponding duties of accepting call-ins,
referrals, and making client calls and cold calls. Cold calls refer to the practice of
prospecting for clients through the telephone directory. Cityland requires all its
marketing specialists to make cold calls. The number of cold calls depends on the
sales generated by each: more sales mean less cold calls. Likewise, Cityland
requires the submission of daily progress reports on the same.

In October 1991, Cityland issued a written reprimand to (Lagatic) for his failure to
submit cold call reports for September 10, October 1 and 10, 1991. This
notwithstanding, petitioner again failed to submit cold call reports for September 2, 5,
8, 10, 11, 12, 15, 17, 18, 19, 20, 22, and 28, as well as for October 6, 8, 9, 10, 12, 13
and 14, 1992. Lagatic was required to explain his inaction, with a warning that further
non-compliance would result in his termination from the company. In a reply, Lagatic
claimed that the same was an honest omission brought about by his concentration on
other aspects of his job. Cityland suspended him for three days, with a similar
warning.

Lagatic again failed to submit cold call reports for February 5, 6, 8, 10 and 12, 1993.
He was verbally reminded to submit the same and was even given up to February
17, 1993 to do so. Instead of complying with said directive, he wrote a note, "TO
HELL WITH COLD CALLS! WHO CARES?" and exhibited the same to his co-
employees. To worsen matters, he left the same lying on his desk where everyone
could see it.

In February, 1993, Lagatic received a memorandum requiring him to explain why

Cityland should not make good its previous warning for his failure to submit cold call
reports, as well as for issuing the written statement aforementioned. He sent a letter-
reply alleging that his failure to submit cold call reports should trot be deemed as
gross insubordination. He denied any knowledge of the damaging statement, "TO
HELL WITH COLD CALLS!"
Finding petitioner guilty of gross insubordination, Cityland served a notice of dismissal
upon him. Lagatic filed a complaint against Cityland for illegal dismissal, illegal
deduction, underpayment, overtime and rest day pay, damages and attorney's fees.
The labor arbiter dismissed the petition for lack of merit. On appeal, the same was
affirmed by the NLRC; hence the present recourse.

ISSUE
1) 1. Whether or not Lagatic was illegally dismissed.
2) 2. Whether or not Lagatic is entitled to salary differentials, backwages,
 separation pay, overtime pay, rest day pay, unpaid commissions, moral and
exemplary damages and attorney's fees.
RULING:

1. No. 

Petitioner is guilty of willful disobedience. Willful disobedience requires the

concurrence  of at least two requisites: the employee's assailed conduct must have
been willful or  intentional, the willfulness being characterized by a wrongful and
perverse attitude; and  the order violated must have been reasonable, lawful, made
known to the employee and  must pertain to the duties which he had been engaged to
discharge. 

Petitioner's failure to comply with Cityland's policy of requiring cold call reports is
clearly  willful, given the 28 instances of his failure to do so, despite a previous
reprimand and  suspension. More than that, his written statement shows his open
defiance and  disobedience to lawful rules and regulations of the company. Likewise,
said company  policy of requiring cold calls and the concomitant reports thereon is
clearly reasonable  and lawful, sufficiently known to petitioner, and in connection with
the duties which he  had been engaged to discharge. There is, thus, just cause for his
dismissal. 

Lastly, petitioner made it worse for himself when he wrote the statement, "TO HELL 
WITH COLD CALLS! WHO CARES?" When required to explain, he merely denied all
knowledge of the same. He never, in all of his pleadings, categorically denied writing
the  same. He only denied knowledge of the allegation that he issued such a
statement. 

2. No.  

As regards the second issue, petitioner contends that he is entitled to amounts

illegally  deducted from his commissions, to unpaid overtime, rest day and holiday
premiums, to  moral and exemplary damages, as well as attorney's fees and
costs. 

Petitioner anchors his claim for illegal deductions of commissions on Cityland's

formula  for determining commissions, 

COMMISSIONS = Credits Earned (CE) less CUMULATIVE NEGATIVE 

(CN) less AMOUNTS RECEIVED (AR) 

= (CE - CN) - AR where CE = Monthly Sales Volume x 

Commission Rate (CR) 
 AR = Monthly Compensation/.75 
CR = 4.5% 

Under said formula, an increase in salary would entail an increase in AR, thus
diminishing  the amount of commissions that petitioner would receive. Petitioner
construes the same  as violative of the non-diminution of benefits clause embodied in
the wage orders  applicable to petitioner. Inasmuch as Cityland has paid petitioner
commissions based on a  higher AR each time there has been a wage increase, the
difference between the original  AR and the subsequent ARs have been viewed by
petitioner as illegal deductions, to wit:
Petitioner even goes as far as to claim that with the use of Cityland's formula, he is 
indebted to the company in the amount of P1,410.00 

While it is true that an increase in salary would cause an increase in AR, with the
same  being deducted from credits earned, thus lessening his commissions, the fact
remains that  petitioner still receives his basic salary without deductions. Petitioner's
argument that he  is indebted to respondent by P1,410.00 is fallacious as his basic
salary remains the same  and he continues to receive the same, regardless of his
collections. The failure to attain a  CE equivalent to the AR of P5,640.00 only means
that the difference would be credited to  his CN for the next month. Clearly, the
purpose of the same is to encourage sales  personnel to accelerate their sales in
order for them to earn commissions. 

Additionally, there is no law which requires employers to pay commissions, and when 
they do so, as stated in the letter-opinion of the DOLE "there is no law which
prescribes a  method for computing commissions. The determination of the amount of
commissions is  the result of collective bargaining negotiations, individual employment
contracts or  established employer practice. Since the formula for the computation of
commissions was  presented to and accepted by petitioner, such prescribed formula
is in order. As to the  allegation that said formula diminishes the benefits being
received by petitioner  whenever there is a wage increase, it must be noted that his
commissions are not meant  to be in a fixed amount.  

In fact, there was no assurance that he would receive any commission at all. Non
diminution of benefits, as applied here, merely means that the company may not
remove  the privilege of sales personnel to earn a commission, not that they are
entitled to a fixed  amount thereof. 

With respect to petitioner's claims for overtime pay, rest day pay and holiday
premiums,  Cityland maintains that Saturday and Sunday call-ins were voluntary
activities on the part  of sales personnel who wanted to realize more sales and
thereby earn more commissions.  It is their contention that sales personnel were
clamoring for the "privilege" to attend  Saturday and Sunday call-ins, as well as to
entertain walk-in clients at project sites during  weekends, that Cityland had to stagger
the schedule of sales employees to give everyone a  chance to do so. But
simultaneously, Cityland claims that the same were optional because  call-ins and
walk-ins were not scheduled every weekend. If there really were a clamor on  the part
of sales staff to "voluntarily" work on weekends, so much so that Cityland needed  to
schedule them, how come no call-ins or walk-ins were scheduled on some
weekends? 

In addition to the above, the labor arbiter and the NLRC sanctioned respondent's 
practice of offsetting rest day or holiday work with equivalent time on regular 
workdays on the ground that the same is authorized by Department Order 21,
Series  of 1990. As correctly pointed out by petitioner, said D.O. was misapplied
in this case.  The D.O. involves the shortening of the workweek from six days to
five days but with  prolonged hours on those five days. Under this scheme,
non-payment of overtime  premiums was allowed in exchange for longer
weekends for employees. In the  instant case, petitioner's workweek was never
compressed. Instead, he claims  payment for work over and above his normal 5
1/2 days of work in a week. Applying 
by analogy the principle that overtime cannot be offset by undertime, to allow
off setting would prejudice the worker. He would be deprived of the additional
pay for  the rest day work he has rendered and which is utilized to offset his
equivalent time  off on regular workdays. To allow Cityland to do so would be to
circumvent the law  on payment of premiums for rest day and holiday work. 

Moreover, 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 first be
established by  proof that said overtime work was actually performed, before an
employee may avail of  said benefit. 

Lastly, with the finding that petitioner's dismissal was for a just and valid cause,
his  claims for moral and exemplary damages, as well as attorney's fees, must
fail.

NOTES
Interphil Laboratories Employees Union-FFW v. Interphil Laboratories, Inc.
FACTS:
Interphil Laboratories Employees Union-FFW is the sole and exclusive bargaining
representative of rank-and-file employees of Interphil Laboratories, Inc., a company
engaged in the business of manufacturing and packaging pharmaceutical products.
They had a collective bargaining agreement from August 1, 1990 to July 31, 1993.

A few months before the expiration of the CBA or sometime in February 1993, some
union officers (Nestor Ocampo, the union president and Hernando Clemente, a union
director) approached Allesandro Salazar, Vice-President of the Human Resources
Department to inquire about the stand of the company regarding the CBA which was
set to expire in a few months. Salazar told the union officers that the matter could best
be discussed during the formal negotiations which would start soon.

In March 1993, Ocampo and Clemente again approached Salazar and inquired once
more about the CBA status. However, they received the same reply. On April 15,
1993, the union officers asked Salazar in a meeting whether the company would be
amenable to make a new CBA effective for two years starting Aug 1, 1993. However,
Salazar declared that the company could not make a decision at the moment.

Hence, the very next day after that declaration, workers having 2 straight 12-hour
shifts, decided that after working 8 hours per shift conducted a work slowdown and an
overtime boycott.

[All rank-and-file employees of the company refused to follow their regular two-shift
work schedule from 6 AM to 6 PM, and from 6 PM to 6 AM. At 2 PM and 2 AM, the
employees stopped working and left their workplace without sealing the containers
and securing the raw materials they were working on.]

Upon inquiry by Salazar for the boycott, he was told to ask the union officers. At a
meeting, Gonzales, a union director, told Salazar that the employees would only
return to their normal work schedule if the company would agree to their demands as
to the effectivity and duration of the new CBA. Salazar declared that such agreement
could only be conducted through formal negotiations. Dissatisfied, workers proceeded
with a strike. The employees also engaged in a work slowdown campaign – which
delayed the production of the company. Then, the union submitted its CBA proposal,
and the company its counter-proposal.

The company filed with the NLRC a petition to declare illegal petitioner union’s
overtime boycott and work slowdown which, according to the company, amounted to
illegal strike. At mediation in the National Conciliation and Mediation Board, the
parties failed to arrive to an agreement. Hence, the union filed with the NCMB a
notice to strike citing unfair labor practice. Eventually, they staged a strike.

Thereafter, the Secretary of Labor assumed jurisdiction and the company was
ordered to accept the striking workers, while the union was directed to comply with
the return-to-work orders. In the meantime, the labor arbiter issued an order: (1)
declaring the overtime boycott and work slowdown as illegal strike; (2) declaring the
union officers to have lost their employment; and (3) found the union guilty of unfair
labor practice for violating the then existing CBA which prohibits the union or any
employee during the existence of the CBA from staging a strike or engaging in
slowdown or interruption of work.

The union filed a motion for reconsideration, which was denied. The CA dismissed
appeal of the union. Hence, this petition.

The union contended that the LA and the CA disregarded the “parole evidence rule”
when they upheld the allegation of the company that the work schedule of its
employees was from 6 AM to 6 PM and from 6 PM to 6 AM. According to the union,
the provisions of their CBA on working hours clearly stated that the normal working
hours were from 7:30 am to 4:30 pm and that the regular work hours for the company
was only 8 hours. It further contended that the LA and the CA should not have
admitted any other evidence contrary to what was stated in the CBA.

ISSUE
Whether or not the working hours contained in the CBA should be the controlling
evidence of the work hours
RULING:

No. The parties stipulated in their CBA: 

Section  1. Regular  Working  Hours  —  A  normal  workday  shall  consist  of not 

more  than  eight  (8)  hours.  The  regular  working  hours  for  the  Company  shall
be  from  7:30  A.M.  to  4:30  P.M.  The  schedule  of  shift  work  shall  be 
maintained; however  the  company  may  change  the  prevailing  work  time  at 
its  discretion, should  such  change  be  necessary  in  the  operations  of  the 
Company.  All employees  shall  observe  such  rules  as  have  been  laid  down 
by  the  company  for the  purpose  of  effecting  control  over  working  hours.

From the foregoing provision, the Court held that the working hours may be changed,
at the discretion of the company, should such change be necessary for its operations,
and that the employees shall observe such rules as have been laid down by the
company. In this case, the LA found that the company had to adopt a continuous 24-
hour work daily schedule by reason of the nature of its business and the demand of
its clients. Since it was established that the employees adhered to the said work
schedule since 1988, the employees are deemed to have waived the eight-hour
schedule, because they followed, without any question or complaint, the two-shift
schedule while their CBA was still in force and even prior thereto. As the employees
assented by practice to such arrangement, they cannot now claim that the overtime
boycott is justified because they were not obliged to work beyond eight hours.
NOTES
 MERCURY DRUG CO. v. NARDO DAYAO, GR No. L-30452, 1982-09-30

DOCTRINE

FACTS

A petition was filed to the Court of Industrial Relations (CIR), by Nardo Dayao
and 70 others against Mercury Drug Co., Inc., and/or Mariano Que, President & General
Manager, and Mercury Drug Co., Inc., Employees Association praying, with respect to
the corporation and its president and general manager:  

1) payment of their unpaid back wages for work done on Sundays and legal
holidays plus 25% additional compensation from date of their employment up to June
30, 1962;

 2) payment of extra... compensation on work done at night;

 3) reinstatement of Januario Referente and Oscar Echalar to their former

positions with back salaries; 

Mercury Drug Co moved to dismiss, alleging that the petition states no cause of
action, the court has no jurisdiction, there is another action pending between the same
parties, namely, Mercury Drug Co., Inc., and/or Mariano Que and Nardo Dayao.

The CIR denied the motion to dismiss

By way of affirmative and special defenses, respondents alleged that petitioners

have no cause of action against Mariano Que because their employer is respondent
Mercury Drug Company, Inc., an existing corporation which has a separate and distinct
personality from its incorporators, stockholders and/or officers; 

That the company being a service enterprise is excluded from the coverage of
the Eight Hour Labor Law, as amended;... that no court has the power to set wages,
rates of pay, hours of employment or other conditions of employment to the extent of
disregarding an agreement thereon between the respondent company and the
petitioners, and of fixing night differential wages; that the respondents were fully paid for
the services rendered under the terms and conditions of the individual contracts of
employment that there is no employer-employee relationship between management and
petitioner Nardo Dayao and that his claim has been released and/or barred by another
action.

The Court ruled in favor of respondents, however, it denied the claim of the
petitioners for payment of backwages corresponding to the first four hours work
rendered on every other Sunday and first four hours on legal holidays. That Mercury
Drug Company is ordered to pay the sixty-nine (69) petitioners:
"(a) An additional sum equivalent to 25% of their respective basic or regular
salaries for services rendered on Sundays and legal holidays during the period
from March 20, 1961 up to June 30, 1962; and
"(b) Another additional sum or premium equivalent to 25% of their respective
basic or regular salaries for nighttime services rendered from March 20, 1961 up
to June 30, 1962.
"3 .  Petitioners' petition to convert them to monthly employees should be, as it is
hereby, denied for lack of merit.

Not satisfied with the decision, the respondents filed a motion for its reconsideration
which was denied

Hence this petition by petitioner Mercury Drug Company, Inc. assigning, among others,
the ff errors:

RESPONDENT CIR ERRED IN DECLARING THE CONTRACTS OF EMPLOYMENT,

EXHIBITS "A" AND "B", NULL AND VOID AS BEING CONTRARY TO PUBLIC POLICY
AND IN SUSTAINING, ACCORDINGLY, PRIVATE RESPONDENTS' CLAIMS FOR
25% SUNDAY AND LEGAL HOLIDAY PREMIUMS BECAUSE SUCH DECLARATION
AND AWARD ARE NOT SUPPORTED BY SUBSTANTIAL EVIDENCE, THUS
INFRINGING UPON THE CARDINAL RIGHTS OF THE PETITIONER; AND ALSO
BECAUSE THE VALIDITY OF SAID CONTRACTS OF EMPLOYMENT HAS NOT
BEEN RAISED.

ISSUE

Whether CA 444, as amended, known as the Eight Hour Labor Law applies to
respondent employees.

RULING

Yes, CA 444 applies to them, they are not included in the exemptions provided by law.

Three issues are discussed by the petitioner in its first assignment of error.  The first
issue refers to its allegation that the respondent Court erred in declaring the contracts of
employment null and void and contrary to law.  This allegation is premised upon the
following finding of the respondent court:

"But the Court finds merit in the claim for the payment of additional compensation
for work done on Sundays and holidays.  While an employer may compel his
employees to perform service on such days, the law nevertheless imposes upon
him the obligation to pay his employees at least 25% additional of their basic of
regular salaries.

“That according to Sec 4 of CA no. 44, No person, firm or corporation business

establishment or place of center of labor shall compel an employee or laborer to work
during Sundays and legal holidays unless he is paid an additional sum of at least
twenty-five per centum of his regular remuneration:  PROVIDED, HOWEVER, That this
prohibition shall not apply to public utilities performing some public service such
as supplying gas, electricity, power, water, or providing means of transportation
or communication”

Although a service enterprise, respondent company's employees are within

the coverage of C. A. No. 444, as amended known as the Eight Hour Labor Law,
for they do not fall within the category or class of employees or laborers excluded
from its provisions.

And that the respondent court rejected the petitioner’s argument that under the
contracts of employment the petitioners are not entitled to such claim for the reason
that the same are contrary to law.  Payment of extra or additional pay for services
rendered during Sundays and legal holidays is mandated by law.  Even assuming
that the petitioners had agreed to work on Sundays and legal holidays without
any further consideration than their monthly salaries, they are not barred
nevertheless from claiming what is due them, because such agreement is
contrary to public policy and is declared null and void by law. That any agreement
or contract between employer and the laborer or employee contrary to the provisions of
CA no. 44 shall be null and void ab initio.'

The Supreme Court held that that the petitioner-company based its arguments in
its first assignment of error on the wrong premise.  The contracts of employment signed
by the private respondents are on a standard form, an example of which is that of
private respondent Nardo Dayao quoted hereunder:

Dear Mr. Dayao:

You are hereby appointed as Checker, in the Checking Department of MERCURY

DRUG CO., INC., effective July 1, 1959 and you shall receive an annual
compensation the amount of Two Thousand four hundred pesos only (P2,400.00),
that includes the additional compensation for work on Sundays and legal
holidays.

Your firm being a Service Enterprise, you will be required to perform work every day in a
year as follows:

8 Hours work on regular days and all special Holidays that may be declared but with the
25% additional compensation;
4 Hours work on every other Sundays of the month;
For any work performed in excess of the hours as above mentioned, you shall be paid
25% additional compensation per hour.

The quoted contract was not declared by respondent court as null and void. But
in effect it: a) rejected the theory of the petitioner company that the 25% additional
compensation claimed by the private respondents for the four-hour work they rendered
during Sundays and legal holidays provided in their contracts of employment were
covered by the private respondents' respective monthly salaries, b) gave credence to
private respondents' testimonies that the 25% additional compensation was not
included in the private respondents' respective monthly salaries and 3) ruled that
any agreement in a contract of employment which would exclude the 25%
additional compensation for work done during Sundays and holidays is null and
void as mandated by law.

Petitioner company reiterated its stand that the compensation in the contract
already included the 25%  additional compensation, and offered a computation as
evidence. Exhibit A shows that for the period of October 30, 1960, the annual
compensation of private respondent Nardo Dayao, including the additional
compensation for the work he renders during the first four (4) hours on every other
Sunday and on the eight (8) Legal Holidays at the time was P2 ,400.00 or P200.00 per
month.  These amounts did not represent basic salary only, but they represented the
basic daily wage of Nardo Dayao considered to be in the amount of P7.36 x 305
ordinary working days at the time or in the total amount of P2 ,244.80.   So plus the
amount of P156.40 which is the equivalent of the Sunday and Legal Holiday rate at
P9.20 (basic rate of P7.36 plus 25% thereof or P1.84) x 17, the latter figure representing
13 Sundays and 4 Legal Holidays of 8 hours each. 

However, the aforesaid computations were not given credence by the respondent
court, that it miserably failed to show the exact and correct annual salary as stated in
the respective contracts of employment of the respondent employees.  The figures
arrived at in each case did not tally with the annual salaries on the employees' contracts
of employment, the difference varying from P1.20 to as much as P14.40 always against
the interest of the employees.

With respect to night time differential, the court held that the respondents were
entitled to it as well, they are entitled to it by law.  The "waiver rule" is not applicable in
the case at bar.  Additional compensation for nighttime work is founded on public policy,
hence the same cannot be waived.  (Article 6, Civil Code)

The petitioner's contention that its employees fully understood what they signed
when they entered into the contracts of employment and that they should be bound by
their voluntary commitments is anachronistic in this time and age.

The Mercury Drug Co., Inc ., maintains a chain of drugstores that are open every
day of the week and, for some stores, up to very late at night because of the nature of
the pharmaceutical retail business.  The respondents knew that they had to work
Sundays and holidays and at night, not as exceptions to the rule but as part of the
regular course of employment.  Presented with contracts setting their compensation on
an annual basis with an express waiver of extra compensation for work on Sundays and
holidays, the workers did not have much choice.  The private respondents were at a
disadvantage insofar as the contractual relationship was concerned.  Workers in our
country do not have the luxury or freedom of declining job openings or filing resignations
even when some terms and conditions of employment are not only onerous and
inequitous but illegal.  It is precisely because of this situation that the framers of the
Constitution embodied the provisions on social justice (Section 6, Article II) and
protection to labor (Section 9, Article II) in the Declaration of Principles And State
Policies.

WHEREFORE, the petition is hereby dismissed.  The decision and resolution

appealed from are affirmed with costs against the petitioner.
JOSE RIZAL COLLEGE V. NLRC
FACTS:

ISSUE

RULING:

NOTES
SAN MIGUEL CORP V. CA
FACTS:

ISSUE

RULING:

NOTES
INSULAR BANK OF ASIA V. INCIONG
FACTS:
 Petitioner filed a complaint against the respondent bank for the payment of holiday
pay. Conciliation having failed, and upon the request of both parties, the case was
certified for arbitration. Labor Arbiter Soriano rendered a decision in the above-
entitled case, granting petitioner's complaint for payment of holiday pay. Respondent
bank did not appeal from the said decision. Instead, it complied with the order by
paying their holiday pay. 
P.D. No. 850 was promulgated amending, among others, the provisions of the Labor
Code on the right to holiday pay. Accordingly, by authority of Article 5 of the same
Code, the Department of Labor (now Ministry of Labor) promulgated the rules and
regulations for the implementation of holidays with pay. The controversial section
thereof reads: 
"Sec. 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
e salary of not less than the statutory or established minimum wage shall be
presumed to 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.” Policy Instruction No. 9 was issued
by the then Secretary of Labor (now Minister) interpreting the above-quoted rule,
pertinent portions of which read: “The ten (10) paid legal holidays law, to start with, is
intended to benefit principally daily employees. In the case of monthly, only those
whose monthly salary did not yet include payment for the ten (10) paid legal holidays
are entitled to the benefit.” 
Respondent bank, by reason of the ruling laid down by the aforecited rule
implementing Article 94 of the Labor Code and by Policy Instruction No. 9, stopped
the payment of holiday pay to all its employees.
Petitioner filed a motion for a writ of execution to enforce the arbiter's decision
whereby the respondent bank was ordered to pay its employees their daily wage for
the unworked regular holidays. Respondent bank filed an opposition to the motion for
a writ of execution alleging, among others, that: (a) its refusal to pay the
corresponding unworked holiday pay in accordance with the award of Labor Arbiter
Soriano is based on and justified by Policy Instruction No. 9 which interpreted the
rules implementing P.D. 850; and (b) that the said award is already repealed by P.D.
850 which, and by said Policy Instruction No. 9 of the Department of Labor. 
Labor Arbiter Soriano, instead of issuing a writ of execution, issued an order enjoining
the respondent bank to continue paying its employees their regular holiday pay on the
following grounds: (a) that the judgment is already final and the findings which is
found in the body of the decision as well as the dispositive portion thereof is res
judicata or is the law of the case between the parties; and (b) that since the decision
had been partially implemented by the respondent bank, appeal from the said
decision is no longer available. The National Labor Relations Commission
promulgated its resolution en banc dismissing respondent bank's appeal. The Office
of the Minister of Labor, through Deputy Minister Inciong, issued an order setting
aside and a new judgment promulgated dismissing the instant case for lack of merit.
Hence, this petition.
ISSUE
Whether or not monthly paid employees are entitled to Holiday pa
RULING:
Yes. Monthly paid employees are entitled to Holiday pay. Petitioner's contention that
Section 2, Rule IV, Book III of the implementing rules and Policy Instruction No. 9
issued by the then Secretary of Labor are null and void since in the guise of clarifying
the Labor Code's provisions on holiday pay, they in effect amended them by enlarging
the scope of their exclusion. 
The coverage and scope of exclusion of the Labor Code's holiday pay provisions is
spelled out under Article 82. (Read Art. 82) 
From the above-cited provisions, it is clear that monthly paid employees are not
excluded from the benefits of holiday pay. However, the implementing rules on
holiday pay promulgated by the then Secretary of Labor excludes monthly paid
employees from the said benefits by inserting, under Rule IV, Book III of the
implementing rules, Section 2, which provides that: "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 presumed to be
paid for all days in the month whether worked or not."
It is elementary in the rules of statutory construction that when the language of the
law is clear and unequivocal the law must be taken to mean exactly what it says. In
the case at bar, the provisions of the Labor Code on the entitlement to the benefits of
holiday pay are clear and explicit — it provides for both the coverage of and exclusion
from the benefits. In Policy Instruction No. 9, the then Secretary of Labor went as far
as to categorically state that the benefit is principally intended for daily paid
employees, when the law clearly states that every worker shall be paid their regular
holiday pay. This is a flagrant violation of the mandatory directive of Article 4 of the
Labor Code, which states that "All doubts in the implementation and interpretation of
the provisions of this Code, including its implementing rules and regulations, shall be
resolved in favor of labor." Moreover, it shall always be presumed that the legislature
intended to enact a valid and permanent statute which would have the most beneficial
effect that its language permits. 
Obviously, the Secretary (Minister) of Labor had exceeded his statutory authority
granted by Article 5 of the Labor Code authorizing him to promulgate the necessary
implementing rules and regulations. 
Until the provisions of the Labor Code on holiday pay is amended by another law,
monthly paid employees are definitely included in the benefits of regular holiday pay.
As earlier stated, the presumption is always in favor of law, negatively put, the Labor
Code is always strictly construed against management. 
While it is true that the contemporaneous construction placed upon a statute by
executive officers whose duty is to enforce it should be given great weight by the
courts, still if such construction is so erroneous, as in the instant case, the same must
be declared as null and void. It is the role of the Judiciary to refine and, when
necessary, correct constitutional (and/or statutory) interpretation, in the context of the
interactions of the three branches of the government, almost always in situations
where some agency of the State has engaged in action that stems ultimately from
some legitimate area of governmental power. 
In view of the foregoing, Section 2, Rule IV, Book III of the Rules to implement the
Labor Code and Policy Instruction No. 9 issued by the then Secretary of Labor must
be declared null and void. Accordingly, public respondent Deputy Minister of Labor
Amado G. Inciong had no basis at all to deny the members of petitioner union their
regular holiday pay as directed by the Labor Code.

NOTES
WELLINGTON INVESTMENT AND MANUFACTURING CORPORATION vs.
TRAJANO

FACTS:
The case started when the Labor Enforcement Officer conducted a routine inspection
on August 6, 1991 of the Wellington Flour Mills, an establishment owned and
operated by petitioner Wellington Investment and Manufacturing Corporation
(hereafter, simply Wellington). The officer drew up a report, a copy of which was
"explained to and received by" Wellington's personnel manager, in which he set forth
his finding of "(n)on-payment of regular holidays falling on a Sunday for monthly-paid
employees." 

Wellington sought reconsideration of the Labor Inspector's report arguing that "the
monthly salary of the company's monthly-salaried employees already includes holiday
pay for all regular holidays . . . (and hence) there is no legal basis for the finding of
alleged non-payment of regular holidays falling on a Sunday." They also expounded
in their position paper which was submitted to the Regional Director, stating that they
pay their monthly-paid employees in a  fixed monthly compensation "using the 314
factor which undeniably covers and already includes payment for all the working days
in a month as well as all the 10 unworked regular holidays within a year." 
 
Wellington's arguments failed to persuade the Regional Director who, in an Order
issued on July 28, 1992, ruled that "when a regular holiday falls on a Sunday, an
extra or additional working day is created and the employer has the obligation
to pay the employees for the extra day except the last Sunday of August since
the payment for the said holiday is already included in the 314 factor," and
accordingly directed Wellington to pay its employees compensation
corresponding to four (4) extra working days. 

Wellington filed a motion for reconsideration of the said Order pointing out that it was
in effect being compelled to “shell out an additional pay for an alleged extra working
day" despite its complete payment of all compensation lawfully due its workers, using
the 314 factor. This was taken as an appeal, and acted on by Undersecretary
Trajano. The latter held that the “divisor being used by WELLINGTON does not
reliably reflect the actual working days in a year,” and demanded Wellington to pay
the six additional working days resulting from regular holidays falling on Sundays in
1988, 1989 and 1990. Petitioner’s reconsideration was denied.

Petitioner’s instituted this special civil action of certiorari to nullify the above orders.
The Supreme Court granted Temporary Restraining Order enjoining Respondent’s
from enforcing the above orders.

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
RULING:
NO

Every worker should, according to the Labor Code, "be paid his regular daily
wage during regular holidays, except in retail and service establishments regularly
employing less than ten (10) workers;" this, of course, even if the worker does no
work on these holidays. The regular holidays include: "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 of December, and the day
designated by law for holding a general election (or national referendum or plebiscite).

There is no question that WELLINGTON’s complied with the minimum norm laid down
by the law – by paying its employees "a salary of not less than the statutory or
established minimum wage," and that the monthly salary thus paid was "not less than
the statutory minimum wage multiplied by 365 days divided by twelve.”

The monthly salary was fixed by Wellington to provide for compensation for every
working day of the year including the holidays specified by law — and excluding only
Sundays. The “314 factor” simply deducted 51 Sundays from the 365 days normally
comprising a year, and used the difference as basis for determining the monthly
salary. The monthly salary thus fixed actually covers payment for 314 days of
the year, including regular and special holidays, as well as days when no work
is done by reason of fortuitous cause, as above specified, or causes not
attributable to the employees.

Based on the routine inspection, it was discovered that in certain years, two or three
regular holidays had fallen on Sundays. According to Labor Under-Secretary:
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 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.

DISPOSITION: WHEREFORE, the orders complained of, namely: that of the

respondent Undersecretary dated September 22, 1993, and that of the Regional
Director dated July 30, 1992, are NULLIFIED AND SET ASIDE, and the proceeding
against petitioner DISMISSED.

NOTES
Caltex Regular Employees at Manila Office v. Caltex (Phils.), Inc.
FACTS:
Sometime in August 1986, the Petitioner called Respondent 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.

Respondent’s Industrial Relations manager immediately evaluated petitioner’s claims

and accordingly informed petitioner Union that differential payments would be timely
implemented, which, however, was never implemented.

Petitioner’s Contention:
Petitioner, then, instituted a complaint for unfair labor practice against Respondent
alleging violation of the provisions of the 1985 CBA. Petitioner Union charged
Respondent with shortchanging its employees when it 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.

Respondent’s Contention: 
Respondent denied the accusations of the Petitioner 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 for employees at the Manila Office, as well as
employees similarly situated at the Legazpi and Marinduque Bulk Depots. This day of
rest, according to Caltex, was Sunday.

In this line, under Art. III of their CBA which states that, “…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…”  

Labor Arbiter Ruling:

LA ruled in favor of petitioner Union, while finding at the same time that private
respondent Caltex was not guilty of any unfair labor practice. Hence, LA concludes
that Caltex’s employees had been given two (2) days of rest, with the result that work
performed on the employee’s first day of rest, thus, Saturday, should be compensated
at "First day-off" rates. 

NLRC Ruling: 
Set aside the ruling of LA. The NLRC found that the conclusions of the Labor Arbiter
were not supported by the evidence on record. The NLRC, interpreting the provisions
of the 1985 CBA, concluded that CBA granted only one (1) day of rest, which is
Sunday. 
ISSUE
W/N the petitioners shall be entitled to the “2 day-off rates”
W/N undertime work may be offset by an overtime work, respectively on separate
days.

RULING:

I.
NO, Labor Arbiter merely suspected that the parties agreed to provide two (2) days of
rest on the ground that they had so stipulated in their 1970 CBA. The fact that it
already disregarded in the 1987 CBA. Moreover, the 1970 CBA cannot take effect
because the preceding CBA of 1987 CBA, expressly deleted the two days of rest. 

II.
NO, Article 88 of the Labor Code, as amended, provides:
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.

Under the CBA, 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 case at bar, 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. 

NOTES
 Cebu Institute of Technology (CIT) vs. Hon. Blas Ople, et al.
G.R. No. L-58870, 18 December 1987

The present case submitted for Decision seeks to resolve six (6) consolidated petitions
which involves various private schools, their teachers and non-teaching school
personnel, and even parents with children studying in said schools, as well as the then
Minister of Labor and Employment, his Deputy, the National Labor Relations
Commission, and the then Minister of Education, Culture and Sports. 

The controversy revolves on the claims of some school personnel for allowances and
other benefits and the refusal of the private schools concerned to pay said allowances
and benefits on the ground that said items should be deemed included in the salary
increases they had paid out of the 60% portion of the proceeds from tuition fee
increases provided for in section 3(a) of Pres. Dec. No. 451.

FACTS:

CEBU INSTITUTE OF TECHNOLOGY CASE

A complaint was filed with the Regional Office No. VII of the Ministry of Labor against
petitioner Cebu Institute of Technology (CIT) by private respondents, Panfilo Canete, et
al., teachers of CIT, for non-payment of: a) cost of living allowances (COLA) b)
thirteenth (13th) month pay differentials and c) service incentive leave. 

Thereafter, herein public respondent, then Minister of Labor and Employment issued the
assailed Order and held that the basic hourly rate designated in the Teachers' Program
is regarded as the basic hourly rate of teachers exclusive of the COLA, and that COLA
should not be taken from the 60% incremental proceeds of the approved increase in
tuition fee. 

Petitioner assails the aforesaid Order in this Special Civil Action of Certiorari with
Preliminary Injunction and/or Restraining Order. 

The Court issued a Temporary Restraining Order against the enforcement of the
questioned Order of the Minister of Labor and Employment. 

ISSUE:

WHETHER OR NOT PUBLIC RESPONDENT ERRED IN NOT DECLARING THAT

PETITIONER IS EXEMPTED AND/OR NOT OBLIGED TO PAY SERVICE INCENTIVE
LEAVE?

RULING:

NO.
According to petitioner, private respondents are engaged by the school on a contract
basis as shown by the individual teachers contract which defines the nature, scope and
period of their employment.

Hence, they are not entitled to the said benefit according to Rule V of the Implementing
Rules and Regulations of the Labor Code to wit:  

SEC. 1. Coverage - This rule [on Service Incentive Leave] 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; (MOLE Rules and Regulations, Rule V, Book III). 

However, the phrase "those who are engaged on task or contract basis" 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. [Vera
v. Cuevas, G.R. No. L-33693, May 31, 1979, 90 SCRA 379]. 

Clearly, petitioner's teaching personnel cannot be deemed field personnel which

refers "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. [Par. 3, Article 82,
Labor Code of the Philippines]. 

Petitioner's claim that private respondents are not entitled to the service incentive leave
benefit cannot therefore be sustained.
Tan v. Lagrama
FACTS:
Doctrine: Payment by result is not determinative of employer-employee relationship.
There is an employer-employee relationship in this case.
FACTS: Petitioner Rolando Tan is the president of Supreme Theater Corporation and
the general manager of Crown and Empire Theaters in Butuan City. Private
respondent Leovigildo Lagrama is a painter, making ad billboards and murals for the
motion pictures shown at the Empress, Supreme, and Crown Theaters for more than
10 years, from September 1, 1988 to October 17, 1998.
On October 17, 1998, private respondent Lagrama was summoned by Tan and
upbraided: "Nangihi na naman ka sulod sa imong drawinganan." ("You again urinated
inside your work area.") When Lagrama asked what Tan was saying, Tan told him,
"Ayaw daghang estorya. Dili ko gusto nga mo-drawing ka pa. Guikan karon, wala nay
drawing. Gawas." ("Don't say anything further. I don't want you to draw anymore.
From now on, no more drawing. Get out.")
He finishes the paintings in three to four days a week and receives as payment a
fixed amount of P1,475.00 per week. Lagrama was dismissed for having urinated in
his working area. Lagrama denied the charge against him. He claimed that, even if
the charge was true, it was a minor infraction to warrant his dismissal. 
Lagrama filed a complaint for illegal dismissal and sought reinvestigation and
payment of 13th month pay, service incentive leave pay, salary differential, and
damages. illegal dismissal and non-payment of benefits. 
Tan asserted that Lagrama was not an employee but an independent contractor who
did his work according to his methods, while he (petitioner) was only interested in the
result thereof as he was paid in piece-work basis i.e., that he was paid for every
painting turned out as ad billboard or mural for the pictures shown in the three
theaters, on the basis of a "no mural/billboard drawn, no pay" policy. 

LA: Declaring complainant's [Lagrama's] dismissal illegal and ordering respondents

[Tan] to pay Separation Pay, Backwages, 13th month pay (3 years), Service Incentive
Leave Pay, and Damages.
NLRC: Tan appealed to the NLRC. Reversed the decision of LA and found Lagrama
to be an independent contractor.
Lagrama filed a MR, but it was denied for lack of merit by the NLRC. He then filed a
petition for certiorari under Rule 65 before the Court of Appeals.
CA: reinstated the decision of the LA finding Lagrama as an employee of Tan. That
petitioner exercised control over Lagrama's work by dictating the time when Lagrama
should submit his billboards and murals and setting rules on the use of the work area
and rest room. Also, no evidence of any intention on the part of Lagrama to leave his
job or sever his employment relationship with Tan. 
Tan moved for a reconsideration, but CA denied his motion for lack of merit.

ISSUE
Whether or not an employer-employee relationship existed between petitioner and
private respondent,

RULING:
Yes. Lagrama is an employee and not an independent contractor.
Four-Fold Test
(Selection) Tan engaged the services of Lagrama without the intervention of third
party.
(Wages) Payment of wages is one of the four factors to be considered in determining
the existence of employer-employee relation. Wages are defined as "remuneration or
earnings, however designated, capable of being expressed in terms of money,
whether fixed or ascertained on a time, task, piece, or 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.
That Lagrama worked for Tan on a fixed piece-work basis is of no moment. Payment
by result is a method of compensation and does not define the essence of the
relation. It is a method of computing compensation, not a basis for determining the
existence or absence of employer-employee relationship. One may be paid on the
basis of results or time expended on the work, and may or may not acquire an
employment status, depending on whether the elements of an employer-employee
relationship are present or not. Payment by result is not determinative of employer-
employee relationship. 
The Bureau of Working Conditions classifies workers paid by results into two
groups, namely; (1) those whose time and performance is supervised by the
employer, and (2) those whose time and performance is unsupervised by the
employer. The first involves an element of control and supervision over the manner
the work is to be performed, while the second does not. If a piece worker is
supervised, there is an employer-employee relationship, as in this case. However,
such an employee is not entitled to service incentive leave pay since, as pointed out
in Makati Haberdashery v. NLRC33 and Mark Roche International v. NLRC, he is paid
a fixed amount for work done, regardless of the time he spent in accomplishing such
work.
Those in the first type (NOT SUPERVISED) are excluded by Article 82 of Book III of
the Labor Code of the Philippines from benefits (e.g. overtime pay, holiday pay, etc.)
under Title I of Book III. Those in the second type are NOT excluded.
Here, Lagrama a painter is a regular employee. That he worked on a fixed piece-work
basis is of no moment; that is, the employment relationship may exist even in a
payment-by-result arrangement.
(Dismissal) by Tan stating that he had the right to fire Lagrama, Tan in effect
acknowledged Lagrama to be his employee. Indeed, the fact that, as petitioner
himself said, he waited for Lagrama to report for work but the latter simply stopped
reporting for work reinforces the conviction that Lagrama was indeed an employee of
petitioner. For only an employee can nurture such an expectancy.
(Control) In the case at bar, albeit petitioner Tan claims that private respondent
Lagrama was an independent contractor and never his employee, evidence shows
that the Lagrama performed his work as painter and under the supervision and control
of Tan.
Lagrama worked in a designated work area inside the theater of Tan for the use of
which petitioner prescribed rules, which rules included the observance of cleanliness
and hygiene and prohibition against urinating in the work area and any other place
other than rest rooms and
Tan's control over Lagrama's work extended not only the use of work area but also
the result of Lagrama’s work and the manner and means by which the work was to be
accomplished.
Lagrama is not an independent contractor because he did not enjoy independence
and freedom from the control and supervision of Tan and he was subjected to Tan's
control over the means and methods by which his work is to be performed and
accomplished.
On whether private respondent Lagrama was illegally dismissed. 
To begin, the employer has the burden of proving the lawfulness of his employee's
dismissal. The validity of the charge must be clearly established in a manner
consistent with due process. The Implementing Rules of the Labor Code provide that
no worker shall be dismissed except for a just or authorized cause provided by law
and after due process. This provision has two aspects: (1) the legality of the act of
dismissal, that is, dismissal under the grounds provided for under Article 282 of the
Labor Code and (2) the legality in the manner of dismissal. The illegality of the act of
dismissal constitutes discharge without just cause, while illegality in the manner of
dismissal is dismissal without due process.
In this case, by his refusal to give Lagrama work to do and ordering Lagrama to get
out of his sight as the latter tried to explain his side, petitioner made it plain that
Lagrama was dismissed. Urinating in a work place other than the one designated for
the purpose by the employer constitutes violation of reasonable regulations intended
to promote a healthy environment under Art. 282(1) of the Labor Code for purposes of
terminating employment, but the same must be shown by evidence. Here there is no
evidence that Lagrama did urinate in a place other than a rest room in the premises of
his work.
Instead of ordering his reinstatement as provided in Art. 279 of the Labor Code, the
Labor Arbiter found that the relationship between the employer and the employee has
been so strained that the latter's reinstatement would no longer serve any purpose.
The parties do not dispute this finding. Hence, the grant of separation pay in lieu of
reinstatement is appropriate. This is of course in addition to the payment of
backwages which, in accordance with the ruling in Bustamante v. NLRC, should be
computed from the time of Lagrama's dismissal up to the time of the finality of this
decision, without any deduction or qualification.

NOTES
SERRANO V. SEVERINO SANTOS TRANSIT
FACTS:
Petitioner Rodolfo J. Serrano was hired on September 28, 1992 as bus conductor by
respondent Severino Santos Transit, a bus company owned and operated by its co-
respondent Severino Santos.
After 14 years of service or on July 14, 2006, petitioner applied for optional retirement
from the company whose representative advised him that he must first sign the
already prepared Quitclaim before his retirement pay could be released. As
petitioner’s request to first go over the computation of his retirement pay was denied,
he signed the Quitclaim on which he wrote “U.P.” (under protest) after his signature,
indicating his protest to the amount of P75,277.45 which he received, computed by
the company at 15 days per year of service.
Petitioner soon after filed a complaint, alleging that the company erred in its
computation since under Republic Act No. 7641, otherwise known as the Retirement
Pay Law, his retirement pay should have been computed at 22.5 days per year of
service to include the cash equivalent of the 5-day service incentive leave (SIL) and
1/12 of the 13th month pay which the company did not.
The company maintained, however, that the Quitclaim signed by petitioner barred his
claim and, in any event, its computation was correct since petitioner was not entitled
to the 5-day SIL and pro-rated 13th month pay for, as a bus conductor, he was paid
on commission basis.

LABOR ARBITER
By Decision of February 15, 2007, Labor Arbiter Cresencio Ramos, Jr. ruled in
favor of petitioner, awarding him P116,135.45 as retirement pay differential, and
10% of the total monetary award as attorney's fees. 
(NOTE: as far as reporting the case goes, you can probably end it here for the Labor
arbiter but I included the rationalization just in case because SC say that Labor
Arbiter is correct)
(Labor Arbiters reasoning just in case)
In arriving at such computation, the Labor Arbiter ratiocinated:
In the same Labor Advisory on Retirement Pay Law, it was likewise decisively made
clear that "the law expanded the concept of "one-half month salary" from the usual
one-month salary divided by two", to wit:
B. COMPUTATION OF RETIREMENT PAY
A covered employee who retires pursuant to RA 7641 shall be entitled to
retirement pay equivalent to at least one-half ( 1/12) month salary for every year
of service, a fraction of at least six (6) months being considered as one whole
year.
The law is explicit that "one-half month salary shall mean fifteen (15) days plus
one-twelfth (1/12) of the 13th month pay and the cash equivalent of not more
 than five (5) days service incentive leaves" unless the parties provide for
broader inclusions. Evidently, the law expanded the concept of "one-half month
salary" from the usual one-month salary divided by two.
The retirement pay is equal to half-month's pay per year of service. But "half-
month's pay" is "expanded" because it means not just the salary for 15 days
but also one-twelfth of the 13th-month pay and the cash value of five-day
service incentive leave. THIS IS THE MINIMUM. 
The retirement pay package can be improved upon by voluntary company
policy, or particular agreement with the employee, or through a collective
bargaining agreement." (The Labor Code with Comments and Cases, C.A.
Azcunea, Vol. II, page 765, Fifth Edition 2004).
Thus, having established that 22.5 days pay per year of service is the correct
formula in arriving at the complete retirement pay of complainant…the next
critical issue that needs discernment is the determination of what is a fair and
rational amount of daily earning of complainant to be used in the computation
of his retirement pay.
Labor Arbiter finds it logical, just and equitable for both parties to rely on the
summary of monthly income provided by respondent, thus, they added
complainant's monthly income from June 2005 until June 2006 or the last
twelve months and we arrived at P189,591.30 and we divided it by twelve (12)
to arrive at complainant's average monthly earning of P15,799.28. 
Thereafter, the average monthly of P15,799.28 is divided by twenty-six (26)
days, the factor commonly used in determining the regular working days in a
month, to arrive at his average daily income of P607.66. 
Finally, P607.66 (average daily income) x 22.5 days = P13,672.35 x 14 (length
of service) = P191,412.90 (COMPLETE RETIREMENT PAY). 
However, inasmuch as complainant already received P75,277.45, the
retirement differential pay due him is P116,135.45 (P191,412.90 - P75,277.45).
(underscoring partly in the original and partly supplied)
(END REASONING)
NLRC
The National Labor Relations Commission (NLRC) to which respondents
appealed reversed the Labor Arbiter's ruling and dismissed petitioner's complaint
by Decision dated April 23, 2008. It, however, ordered respondents to pay retirement
differential in the amount of P2,365.35.
Citing R & E Transport, Inc. v. Latag, the NLRC held that since petitioner was paid on
purely commission basis, he was excluded from the coverage of the laws on 13th
month pay and SIL pay, hence, the 1/12 of the 13th month pay and the 5-day SIL
should not be factored in the computation of his retirement pay.
CA Affirmed the NLRC ruling

ISSUE
WON Serrano is entitled to 13th Month pay and SIL pay.

RULING:
YES. HE IS.
Republic Act No. 7641 which was enacted on December 9, 1992 amended Article 287
of the Labor Code by providing for retirement pay to qualified private sector
employees in the absence of any retirement plan in the establishment. The pertinent
provision of said law reads:
Section 1. Article 287 of Presidential Decree No. 442, as amended, otherwise known
as the Labor Code of the Philippines, is hereby amended to read as follows:
In the absence of a retirement plan or agreement providing for retirement
benefits of employees in the establishment, an employee upon reaching the
age of sixty (60) years or more, but not beyond sixty-five (65) years which is
hereby declared the compulsory retirement age, who has served at least five
(5) years in the said establishment, may retire and shall be entitled to
retirement pay equivalent to at least one-half (1/2) month salary for every year
of service, a fraction of at least six (6) months being considered as one whole
year.
Unless the parties provide for broader inclusions, the term one-half (1/2)
month salary shall mean fifteen (15) days plus one-twelfth (1/12) of the
13th month pay and the cash equivalent of not more than five (5) days of
service incentive leaves.
Admittedly, petitioner worked for 14 years for the bus company which did not adopt
any retirement scheme. Even if petitioner as bus conductor was paid on commission
basis then, he falls within the coverage of R.A. 7641 and it’s implementing rules. As
thus correctly ruled by the Labor Arbiter, petitioner’s retirement pay should include the
cash equivalent of the 5-day SIL and 1/12 of the 13th month pay.
(As far as reporting the case, you can probably end it here. 
TLDR: NLRC and CA were wrong because the petitioner is NOT classified as a
“Field personnel” under existing laws and IRR. Hence, 13 th month pay and
Service incentive leave (SIL) pay still apply to him. The rest after this are the
rational in case mam asked for more details)
The affirmance by the appellate court of the reliance by the NLRC on R & E
Transport, Inc. is erroneous. In said case, the Court held that a taxi driver paid
according to the "boundary system" is not entitled to the 13th month and the SIL pay,
hence, his retirement pay should be computed on the sole basis of his salary.
For purposes, however, of applying the law on SIL, as well as on retirement, the Court
notes that there is a difference between drivers paid under the "boundary system" and
conductors who are paid on commission basis.
In practice, taxi drivers do not receive fixed wages. They retain only those sums in
excess of the "boundary" or fee they pay to the owners or operators of the
vehicles. Conductors, on the other hand, are paid a certain percentage of the
bus' earnings for the day.
It bears emphasis that under P.D. 851 or the SIL Law, the exclusion from its
coverage of workers who are paid on a purely commission basis is only with
respect to field personnel. The more recent case of Auto Bus Transport Systems,
Inc., v. Bautista clarifies that an employee who is paid on purely commission basis is
entitled to SIL.
…employees engaged on task or contract basis or paid on purely
commission basis are not automatically exempted from the grant of
service incentive leave, unless, they fall under the classification of field
personnel.

According to Article 82 of the Labor Code, "field personnel" shall refer to non-
agricultural employees who regularly perform their duties away from the
principal place of business or branch office of the employer and whose actual
hours of work in the field cannot be determined with reasonable certainty. This
definition is further elaborated in the Bureau of Working Conditions (BWC), Advisory
Opinion to Philippine Technical-Clerical Commercial Employees Association 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.

WHEREFORE, the petition is GRANTED. The Court of Appeals Decision of February

11, 2009 and Resolution of April 28, 2009 are REVERSED and SET ASIDE and the
Labor Arbiter's Decision dated February 15, 2007 is REINSTATED.

NOTES