IV.

Labor Standards

1. Hours of work

[P.D. No. 442, Book Three: CONDITIONS OF EMPLOYMENT; Title I: Working Conditions and Rest Periods]

Chapter 1

HOURS OF WORK

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

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

"Field personnel" 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.

Article 83. Normal hours of work. The normal hours of work of any employee shall not exceed eight in a
day.

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

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

Rest periods of short duration during working hours shall be counted as hours worked.
Article 85. Meal periods. Subject to such regulations as the Secretary of Labor and Employment may
prescribe, it shall be the duty of every employer to give his employees not less than sixty minutes time-
off for their regular meals.

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

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

Article 88. Undertime not offset be 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.

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

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

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

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

(d) When the work is necessary to prevent loss or damage to perishable goods;

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

Any employee required to render overtime work under this Article shall be paid the additional
compensation required in this Chapter.
Article 90. Computation of additional compensation. For purposes of computing overtime and other
additional remuneration as required by this Chapter, the "regular wage" of an employee shall include
the cash wage only, without deduction on account of facilities provided by the employer.

Night work

REPUBLIC ACT NO. 10151

AN ACT ALLOWING THE EMPLOYMENT OF NIGIIT WORKERS, THEREBY REPEALING ARTICLES 130 AND
131 OF PRESIDENTIAL DECREE NUMBER FOUR HUNDRED FORTY-TWO, AS AMENDED, OTHERWISE
KNOWN AS THE LABOR CODE OF THE PHILIPPINES

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

Section 1. Article 130 of the Labor Code is hereby repealed.

Section 2. Article 131 of the Labor Code is hereby repealed.

Section 3. The subsequent articles in Book Three, Title III, Chapter I to Chapter IV of Presidential Decree
No. 442 are hereby renumbered accordingly.

Section 4. A new chapter is hereby inserted after Book Three, Title III of Presidential Decree No. 442, to
read as follows:

"Chapter V

"Employment of Night Workers

"Article 154. Coverage. - This chapter' shall apply to all persons, who shall be employed or permitted or
suffered to work at night, except those employed in agriculture, stock raising, fishing, maritime transport
and inland navigation, during a period of not less than seven (7) consecutive hours, including the interval
from midnight to five o'clock in the morning, to be determined by the Secretary of Labor and
Employment, after consulting the workers' representatives/labor organizations and employers.

"'Night worker' means any employed person whose work requires performance of a substantial number
of hours of night work which exceeds a specified limit. This limit shall be fixed by the Secretary of Labor
after consulting the workers' representatives/labor organizations and employers."

"Article 155. Health Assessment. - At their request, workers shall have the right to undergo a health
assessment without charge and to receive advice on how to reduce or avoid health problems associated
with their work:

"(a) Before taking up an assignment as a night worker;

"(b) At regular intervals during such an assignment; and

"(c) If they experience health problems during such, an assignment which are not caused by factors
other than the performance of night work.

"With the exception of a finding of unfitness for night work, the findings of such assessments shall not
be transmitted to others without the workers' consent and shall not be used to their detriment."

"Article 156. Mandatory Facilities. - Suitable first·aid facilities shall be made available for workers
performing night work, including arrangements where such workers, where necessary, can be taken
immediately to a place for appropriate treatment. The employers are likewise required to provide safe
and healthful working conditions and adequate or reasonable facilities such as sleeping or resting
quarters in the establishment and transportation from the work premises to the nearest point of their
residence subject to exceptions and guidelines to be provided by the DOLE."

"Article 157. Transfer. - Night workers who are certified as unfit for night work, due to health reasons,
shall be transferred, whenever practicable, to a similar job for which they are fit to work.

"If such transfer to a similar job is not practicable, these workers shall be granted the same benefits as
other workers who are unable to work, or to secure employment during such period.

"A night worker certified as temporarily unfit for night work shall be given the same protection against
dismissal or notice of dismissal as other workers who are prevented from working for reasons of health."

"Article 158. Women Night Workers. - Measures shall be taken to ensure that an alternative to night
work is available to women workers who would otherwise be called upon to perform such work:

"(a) Before and after childbirth, for a period of at least sixteen (16) weeks, which shall be divided
between the time before and after childbirth;

"(b) For additional periods, in respect of winch a medical certificate IS produced stating that said
additional periods are necessary for the health of the mother or child:

"(1) During pregnancy;

"(2) During a specified time beyond the period, after childbirth is fixed pursuant to subparagraph (a)
above, the length of which shall be determined by the DOLE after consulting the labor organizations and
employers.

"During the periods referred to in this article:

"(i) A woman worker shall not be dismissed or given notice of dismissal, except for just or authorized
causes provided for in this Code that are not connected with pregnancy, childbirth and childcare
responsibilities.
"(ii) A woman worker shall not lose the benefits regarding her status, seniority, and access to promotion
which may attach to her regular night work position.

"Pregnant women and nursing mothers may be allowed to work .at night only if a competent physician,
other than the company physician, shall certify their fitness to render night work, and specify, in the
case of pregnant employees, the period of the pregnancy that they can safely work.

"The measures referred to in this article may include transfer to day work where this is possible, the
provision of social security benefits or an extension of maternity leave.

"The provisions of this article shall not leave the effect of reducing the protection and benefits
connected with maternity leave under existing laws."

"Article 159. Compensation. The compensation for night workers in the form of working time, pay or
similar benefits shall recognize the exceptional nature of night work."

"Article 160. Social Services. - Appropriate social services shall be provided for night workers and, where
necessary, for workers performing night work."

"Article 161. Night Work Schedules. - Before introducing work schedules requiring the services of night
workers, the employer shall consult the workers' representatives/labor organizations concerned on the
details of such schedules and the forms of organization of night work that are best adapted to the
establishment and its personnel, as well as on the occupational health measures and social services
which are required. In establishments employing night workers, consultation shall take place regularly."

Section 5. The subsequent articles starting from Book Four, Title I, Chapter I of Presidential Decree No.
442 are hereby renumbered accordingly.

Section 6. Application. - The measures referred to in this chapter shall be applied not later than six (6)
months from the effectivity of this Act.

Section 7. Guidelines. - The DOLE shall promulgate appropriate regulations in addition to existing ones to
ensure protection, safety and welfare of night workers.

Section 8. Penalties. - Any violation of this Act, and the rules and regulations issued pursuant hereof
shall be punished with a fine of not less than Thirty thousand pesos (P30,000.00) nor more than Fifty
thousand pesos (P50,000.00) or imprisonment of not less than six (6) months, or both, at the discretion
of the court. If the offense is committed by a corporation, trust, firm, partnership at association, or other
entity, the penalty shall be imposed upon the guilty officer or officers of such corporation, trust, firm,
partnership or association, or entity.

Section 9. Separability Clause. - If any portion of this Act is declared unconstitutional, the same shall not
affect the validity and effectivity of the other provisions not affected thereby.

Section 10. Repealing Clause. - All laws, acts, decrees, executive orders, rules and regulations or other
issuances or parts thereof, which are inconsistent with this Act, are hereby modified and repealed.

Section 11. Effectivity Clause. - This Act shall take effect after fifteen (15) days following its publication in
two (2) national newspapers of general circulation.

Contract for piece of work (Civil Code – R.A. 386)

SECTION 3

Contract for a Piece of Work

ARTICLE 1713. By the contract for a piece of work the contractor binds himself to execute a piece of
work for the employer, in consideration of a certain price or compensation. The contractor may either
employ only his labor or skill, or also furnish the material. (1588a)

ARTICLE 1714. If the contractor agrees to produce the work from material furnished by him, he shall
deliver the thing produced to the employer and transfer dominion over the thing. This contract shall be
governed by the following articles as well as by the pertinent provisions on warranty of title and against
hidden defects and the payment of price in a contract of sale. (n)

ARTICLE 1715. The contractor shall execute the work in such a manner that it has the qualities agreed
upon and has no defects which destroy or lessen its value or fitness for its ordinary or stipulated use.
Should the work be not of such quality, the employer may require that the contractor remove the defect
or execute another work. If the contractor fails or refuses to comply with this obligation, the employer
may have the defect removed or another work executed, at the contractor’s cost. (n)

ARTICLE 1716. An agreement waiving or limiting the contractor’s liability for any defect in the work is
void if the contractor acted fraudulently. (n)
ARTICLE 1717. If the contractor bound himself to furnish the material, he shall suffer the loss if the work
should be destroyed before its delivery, save when there has been delay in receiving it. (1589)

ARTICLE 1718. The contractor who has undertaken to put only his work or skill, cannot claim any
compensation if the work should be destroyed before its delivery, unless there has been delay in
receiving it, or if the destruction was caused by the poor quality of the material, provided this fact was
communicated in due time to the owner. If the material is lost through a fortuitous event, the contract is
extinguished. (1590a)

ARTICLE 1719. Acceptance of the work by the employer relieves the contractor of liability for any defect
in the work, unless:

(1) The defect is hidden and the employer is not, by his special knowledge, expected to recognize the
same; or

(2) The employer expressly reserves his rights against the contractor by reason of the defect. (n)

ARTICLE 1720. The price or compensation shall be paid at the time and place of delivery of the work,
unless there is a stipulation to the contrary. If the work is to be delivered partially, the price or
compensation for each part having been fixed, the sum shall be paid at the time and place of delivery, in
the absence of stipulation. (n)

ARTICLE 1721. If, in the execution of the work, an act of the employer is required, and he incurs in delay
or fails to perform the act, the contractor is entitled to a reasonable compensation.

The amount of the compensation is computed, on the one hand, by the duration of the delay and the
amount of the compensation stipulated, and on the other hand, by what the contractor has saved in
expenses by reason of the delay, or is able to earn by a different employment of his time and industry.
(n)

ARTICLE 1722. If the work cannot be completed on account of a defect in the material furnished by the
employer, or because of orders from the employer, without any fault on the part of the contractor, the
latter has a right to an equitable part of the compensation proportionally to the work done, and
reimbursement for proper expenses made. (n)

ARTICLE 1723. The engineer or architect who drew up the plans and specifications for a building is liable
for damages if within fifteen years from the completion of the structure, the same should collapse by
reason of a defect in those plans and specifications, or due to the defects in the ground. The contractor
is likewise responsible for the damages if the edifice falls, within the same period, on account of defects
in the construction or the use of materials of inferior quality furnished by him, or due to any violation of
the terms of the contract. If the engineer or architect supervises the construction, he shall be solidarily
liable with the contractor.

Acceptance of the building, after completion, does not imply waiver of any of the causes of action by
reason of any defect mentioned in the preceding paragraph.

The action must be brought within ten years following the collapse of the building. (n)

ARTICLE 1724. The contractor who undertakes to build a structure or any other work for a stipulated
price, in conformity with plans and specifications agreed upon with the land-owner, can neither
withdraw from the contract nor demand an increase in the price on account of the higher cost of labor
or materials, save when there has been a change in the plans and specifications, provided: EaEmmw

(1) Such change has been authorized by the proprietor in writing; and

(2) The additional price to be paid to the contractor has been determined in writing by both parties.
(1593a)

ARTICLE 1725. The owner may withdraw at will from the construction of the work, although it may have
been commenced, indemnifying the contractor for all the latter’s expenses, work, and the usefulness
which the owner may obtain therefrom, and damages. (1594a)

ARTICLE 1726. When a piece of work has been entrusted to a person by reason of his personal
qualifications, the contract is rescinded upon his death.

In this case the proprietor shall pay the heirs of the contractor in proportion to the price agreed upon,
the value of the part of the work done, and of the materials prepared, provided the latter yield him
some benefit.

The same rule shall apply if the contractor cannot finish the work due to circumstances beyond his
control. (1595)

ARTICLE 1727. The contractor is responsible for the work done by persons employed by him. (1596)

ARTICLE 1728. The contractor is liable for all the claims of laborers and others employed by him, and of
third persons for death or physical injuries during the construction. (n)
ARTICLE 1729. Those who put their labor upon or furnish materials for a piece of work undertaken by
the contractor have an action against the owner up to the amount owing from the latter to the
contractor at the time the claim is made. However, the following shall not prejudice the laborers,
employees and furnishers of materials:

(1) Payments made by the owner to the contractor before they are due;

(2) Renunciation by the contractor of any amount due him from the owner.

This article is subject to the provisions of special laws. (1597a)

ARTICLE 1730. If it is agreed that the work shall be accomplished to the satisfaction of the proprietor, it
is understood that in case of disagreement the question shall be subject to expert judgment. mdmiri

If the work is subject to the approval of a third person, his decision shall be final, except in case of fraud
or manifest error. (1598a)

ARTICLE 1731. He who has executed work upon a movable has a right to retain it by way of pledge until
he is paid. (1600)

2. Rest Periods

[Book 3: Conditions of Employment; Title I: Working Conditions and Rest Periods]

Chapter 2

WEEKLY REST PERIODS

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

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

Article 92. When employer may require work on a rest day. The employer may require his employees to
work on any day:
(a) In case of actual or impending emergencies caused by serious accidents, fire, flood, typhoon,
earthquake, epidemic or other disaster or calamity to prevent loss of life and property or imminent
danger to public safety;

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

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

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

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

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

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

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

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

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

3. Holiday pay/Premium Pay

[Book 3: Conditions of Employment; Title I: Working Conditions and Rest Periods]

Chapter 3

HOLIDAYS, SERVICE INCENTIVE LEAVES AND SERVICE CHARGES

Article 94. Right to holiday pay. (a) Every worker shall be paid his regular daily wage during regular
holidays, except in retail and service establishment regularly employing less than ten workers;

(b) The employer may require an employee to work on any holiday but such employee shall be paid a
compensation equivalent to twice his regular rate; and

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

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

(b) This provision shall not apply to those who are already enjoying the benefit herein provided, those
enjoying vacation leave with pay at least five days and those employed in establishments regularly
employing less than ten employees or in establishments exempted from granting this benefit by the
Secretary of Labor after considering the viability or financial condition of such establishment.

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

Article 96. Service charges. All service charges collected by hotels, restaurants and similar
establishments shall be distributed at the rate of 85 percent for all covered employees and 15 percent
for management. The share of the employees shall be equally distributed among them. In case the
service charge is abolished, the share of the covered employees shall be integrated into their wages.

4. Leaves

Service Incentive Leave

 P.D. 442 is the legal basis for service incentive leave.

 Service incentive leaves are given to employees who may want to take a leave from work and
still get paid on their absences.
 There are five (5) service incentive leave credits given to an employee who has rendered at least
12 months of service.
 The leave credits may be used for whatever reason.
 The employer is required to pay the cash equivalent of the unused leave credits.
 The service incentive leave credits replenish yearly.
Legal basis

The legal basis is Presidential Decree No. 442 (“P.D. 442”), otherwise known as the “Labor Code of the
Philippines”.

Concept

Service incentive leaves are five (5) leave credits with full pay given to qualified employees who have
rendered at least one (1) year of service.

Covered and excluded

The benefit applies to all employees except:

1. Government employees, whether employed by the National Government or any of its political
subdivisions, including those employed in government-owned and/or controlled corporations with
original charters or created under special laws;

2. Persons in the personal service of another;

3. Managerial employees, if they meet all of the following conditions:

3.1. Their primary duty is to manage the establishment in which they are employed or of a department
or subdivision thereof;

3.2. They customarily and regularly direct the work of two or more employees therein; and

3.3. They have the authority to hire or fire other employees of lower rank; or their suggestions and
recommendations as to hiring, firing, and promotion, or any other change of status of other employees
are given particular weight.

4. Officers or members of a managerial staff, if they perform the following duties and responsibilities:

4.1. Primarily perform work directly related to management policies of their employer;

4.2. Customarily and regularly exercise discretion and independent judgment

4.3. (a) Regularly and directly assist a proprietor or managerial employee in the management of the
establishment or subdivision thereof in which he or she is employed; or (b) execute, under general
supervision, work along specialized or technical lines requiring special training, experience, or
knowledge; or (c) execute, under general supervision, special assignments and tasks; and

4.4. Do not devote more than twenty percent (20%) 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 5.1,
5.2, and 5.3 above;

5. Field personnel and those whose time and performance are unsupervised by the employer;

6. Those already enjoying this benefit;

7. Those enjoying vacation leave with pay of at least five (5) days; and

8. Those employed in establishments regularly employing less than ten (10) employees.
Interpretation of 1 year

The 1-year of service means that the covered employee has rendered service for at least twelve (12)
months, whether continuous or broken, counting form the start of his employment.

Usage

The service incentive leave is a leave credit which may be used at the discretion of the employee who
may use it for sick leave, vacation leave, or for any other personal reasons.

Convertible to cash

Unused service incentive leaves are required to be converted to cash at the end of the year or upon the
termination of employment due to just causes or separation from the service due to authorized causes.

Replenishes yearly

The service incentive leave replenishes yearly.

Employment contract, company policies, CBA

The above discussion may be superseded by any stipulation favorable to the employee via an
employment contract, company policies, collective bargaining agreement, or analogous thereto.

References

 Republic Act No. 8972, a.k.a. Solo Parents’ Welfare Act of 2000
 Implementing Rules and Regulations of R.A. 8972
 DOLE-BWC Handbook on Workers’ Statutory Monetary Benefits
 Jurisprudence or Supreme Court Decisions

SERVICE INCENTIVE LEAVE

• What is service incentive leave?

Every covered employee who has rendered at least one (1) year of service is entitled to a yearly service
incentive leave of five (5) days with pay.

The term “at least one year of service” should mean service within twelve (12) months, whether
continuous or broken, reckoned from the date the employee started working, including authorized
absences and paid regular holidays, unless the number of working days in the establishment as a matter
of practice or policy, or that provided in the employment contract, is less than twelve (12) months, in
which case, said period should be considered as one (1) year for the purpose of determining entitlement
to the service incentive leave benefit.

• Who are excluded from its coverage?

All employees are covered by the rule on service incentive leave except:
a. Those of the government and any of its political subdivisions, including government-owned and
controlled corporations;

b. Domestic workers or kasambahays;

c. Persons in the personal service of another;

d. Managerial employees as defined in Book III of the Labor Code;

e. Field personnel and other employees whose performance is unsupervised by the employer;

f. 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;

g. Those who are already enjoying the benefit provided in the law;

h. Those enjoying vacation leave with pay of at least five (5) days;

i. Those employed in establishments regularly employing less than ten (10) employees;

j. Other officers and members of the managerial staff; and

k. Members of the family of the employer who are dependent on him for support.

 Are unavailed service incentive leaves commutable to cash?

Yes. The service incentive leave is commutable to its money equivalent if not used or exhausted at the
end of the year.

Maternity Leave

• What is maternity leave?

“Maternity leave” is the period of time which may be availed of by a woman employee, married or
unmarried, to undergo and recuperate from childbirth, miscarriage or complete abortion during which
she is permitted to retain her rights and benefits flowing from her employment.

• What is the period of leave?

60 days – for normal delivery

78 days – for caesarian delivery

• What is the amount granted?

Daily maternity benefit equivalent to one hundred percent (100%) of her average daily salary credit for
sixty (60) days or seventy-eight (78) days in case of caesarian delivery/

• What is the number of delivery or miscarriage covered?

The maternity benefits shall be paid only for the first four (4) deliveries or miscarriages/

• Is an unmarried woman entitled to maternity leave benefit?

Yes. For as long as a woman is pregnant, she is entitled to maternity leave benefit regardless of whether
she is married or unmarried.

REPUBLIC ACT No. 11210

An Act Increasing the Maternity Leave Period to One Hundred Five (105) Days for Female Workers
With an Option to Extend for an Additional Thirty (30) Days Without Pay, and Granting an Additional
Fifteen (15) Days for Solo Mothers, and for Other Purposes

Be it enacted by the Senate and House of Representatives of the Philippine Congress Assembled:

Section 1. Short Title. - This Act shall be known and cited as the "105-Day Expanded Maternity Leave
Law".

Section 2. Declaration of Policy. — It is the declared policy of the State under Article XIII, Section 14 of
the 1987 Constitution to protect and promote the rights and welfare of working women, taking into
account them maternal functions, and to provide an enabling environment in which their full potential
can be achieved.

Article II, State Policies, Section 12 of the 1987 Constitution provides that the State recognizes the
sanctity of family life and shall protect and strengthen the family as the basic autonomous social
institution and that it shall equally protect the life of the mother and the life of the unborn from
conception. Moreover, Sections 17 and 22 of Republic Act No. 9710, otherwise known as "The Magna
Carta of Women", provides for women’s rights to health and decent work.

To achieve these, and in recognition of women’s maternal function as a social responsibility, the State
shall institutionalize a mechanism to expand the maternity leave period of women workers. This will
provide them with ample transition time to regain health and overall wellness as well as to assume
maternal roles before resuming paid work. This Act is consistent with local and international legal
instruments that protect and promote the rights of women.

Section 3. Grant of Maternity Leave.— All covered female workers in government and the private
sector, including those in the informal economy, regardless of civil status or the legitimacy of her child,
shall be granted one hundred five (105) days maternity leave with full pay and an option to extend for
an additional thirty (30) days without pay: Provided, That in case the worker qualifies as a solo parent
under Republic Act No. 8972, or the "Solo Parents’ Welfare Act", the worker shall be granted an
additional fifteen (15) days maternity leave with full pay.

Enjoyment of maternity leave cannot be deferred but should be availed of either before or after the
actual period of delivery in a continuous and uninterrupted manner, not exceeding one hundred five
(105) days, as the case may be.

Maternity leave shall be granted to female workers in every instance of pregnancy, miscarriage or
emergency termination of pregnancy, regardless of frequency: Provided, That for cases of miscarriage or
emergency termination of pregnancy, sixty (60) days maternity leave with full pay shall be granted.

Section 4. Maternity Leave for Female Workers in the Public Sector.— Any pregnant female worker in
the government service, regardless of employment status, in National Government Agencies (NGAs),
Local Government Units (LGUs), Government-Owned or -Controlled Corporations (GOCCs), or State
Universities and Colleges (SUCs), shall be granted a maternity leave of one hundred five (105) days with
full pay regardless if the delivery was normal or caesarian: Provided, That, in case the employee qualifies
as a solo parent under Republic Act No. 8972, or the "Solo Parents’ Welfare Act", the employee shall be
paid an additional maternity benefit of fifteen (15) days. An additional maternity leave of thirty (30)
days, without pay, can be availed of, at the option of the female worker: Provided, further, That, the
head of the agency shall be given due notice, in writing, at least forty-five (45) days before the end of
her maternity leave: Provided, finally, That no prior notice shall be necessary in the event of a medical
emergency but subsequent notice shall be given to the head of the agency.

Maternity leave of sixty (60) days, with full pay, shall be granted for miscarriage or emergency
termination of pregnancy.

Section 5. Maternity Leave for Female Workers in the Private Sector.— Any pregnant female worker in
the private sector shall be granted a maternity leave of one hundred five (105) days with full pay,
regardless of whether she gave birth via caesarian section or natural delivery, while maternity leave of
sixty (60) days with full pay shall be granted for miscarriage or emergency termination of pregnancy.

(a) A female Social Security System (SSS) member who has paid at least three (3) monthly contributions
in the twelve (12)-month period immediately preceding the semester of her childbirth, miscarriage, or
emergency termination of pregnancy shall be paid her daily maternity benefit which shall be computed
based on her average monthly salary credit for one hundred five (105) days, regardless of whether she
gave birth via caesarian section or natural delivery, subject to the following conditions:

(1) That the female worker shall have notified her employer of her pregnancy and the probable date of
her childbirth, which notice shall be transmitted to the SSS in accordance with the rules and regulations
it may provide;

(2) That the full payment shall be advanced by the employer within thirty (30) days from the filing of the
maternity leave application;

(3) That payment of daily maternity benefits shall be a bar to the recovery of sickness benefits provided
under Republic Act No. 1161, as amended, for the same period for which daily maternity benefits have
been received;

(4) That the SSS shall immediately reimburse the employer of one hundred percent (100%) of the
amount of maternity benefits advanced to the female worker by the employer upon receipt of
satisfactory and legal proof of such payment; and

(5) That if a female worker should give birth or suffer a miscarriage or emergency termination of
pregnancy without the required contributions having been remitted for her by her employer to the SSS,
or without the latter having been previously notified by the employer of the time of the pregnancy, the
employer shall pay to the SSS damages equivalent to the benefits which said female member would
otherwise have been entitled to.

In case the employee qualifies as a solo parent under Republic Act No. 8972, or the "Solo Parents’
Welfare Act", the employee shall be paid an additional maternity benefit of fifteen (15) days.
(b) An additional maternity leave of thirty (30) days, without pay, can be availed of, at the option of the
female worker: Provided, That the employer shall be given due notice, in writing, at least forty-five (45)
days before the end of her maternity leave: Provided, further, That no prior notice shall be necessary in
the event of a medical emergency but subsequent notice shall be given to the head of the agency.

(c) Workers availing of the maternity leave period and benefits must receive their full pay. Employers
from the private sector shall be responsible for payment of the salary differential between the actual
cash benefits received from the SSS by the covered female workers and their average weekly or regular
wages, for the entire duration of the maternity leave, with the following exceptions, subject to the
guidelines to be issued by the Department of Labor and Employment (DOLE):

(1) Those operating distressed establishments;

(2) Those retail/service establishments and other enterprises employing not more than ten (10) workers;

(3) Those considered as micro-business enterprises and engaged in the production, processing, or
manufacturing of products or commodities including agro-processing, trading, and services, whose total
assets are not more than Three million pesos (₱3,000,000.00); and

(4) Those who are already providing similar or more than the benefits herein provided.

Provided, That said exemptions shall be subject to an annual submission of a justification by the

employer claiming exemption for the approval of the DOLE.

Section 6. Allocation of Maternity Leave Credits.— Any female worker entitled to maternity leave
benefits as provided for herein may, at her option, allocate up to seven (7) days of said benefits to the
child’s father, whether or not the same is married to the female worker: Provided, That in the death,
absence, or incapacity of the former, the benefit may be allocated to an alternate caregiver who may be
a relative within the fourth degree of consanguinity or the current partner of the female worker sharing
the same household, upon the election of the mother taking into account the best interests of the
child: Provided, further, That written notice thereof is provided to the employers of the female worker
and alternate caregiver: Provided, furthermore, That this benefit is over and above that which is
provided under Republic Act No. 8187, or the "Paternity Leave Act of 1996": Provided, finally, That in the
event the beneficiary female worker dies or is permanently incapacitated, the balance of her maternity
leave benefits shall accrue to the father of the child or to a qualified caregiver as provided above.

Section 7. Maternity Leave for Women Regardless of Civil Status.— All female workers in the
government and female members of the SSS, regardless of their civil status, shall be granted maternity
leave, with full pay, upon compliance with the preceding section.

Section 8. Maternity Leave With Pay in Case of Childbirth, Miscarriage, or Emergency Termination of
Pregnancy After the Termination of an Employee’s Service.— Maternity leave with full pay shall be
granted even if the childbirth, miscarriage, or emergency termination of pregnancy occurs not more
than fifteen (15) calendar days after the termination of an employee’s service, as her right thereto has
already accrued: Provided, That such period is not applicable when the employment of the pregnant
woman worker has been terminated without just cause, in which case the employer will pay her the full
amount equivalent to her salary for one hundred five (105) days for childbirth and sixty (60) days for
miscarriage or emergency termination of pregnancy based on her full pay, in addition to the other
applicable daily cash maternity benefits that she should have received had her employment not been
illegally terminated.

Section 9. Maternity Leave Credits.— The maternity leave can be credited as combinations of prenatal
and postnatal leave as long as it does not exceed one hundred five (105) days and provided that
compulsory postnatal leave shall not be less than sixty (60) days.

Section 10. Maternity Leave Benefits for Women in the Informal Economy and Voluntary Contributors to
the SSS.— Maternity benefits shall cover all married and unmarried women, including female workers in
the informal economy.

Female workers in the informal economy are entitled to maternity leave benefits if they have remitted
to the SSS at least three (3) monthly contributions in the .twelve (12)-month period immediately
preceding the semester of her childbirth, miscarriage, or emergency termination of pregnancy.

Section 11. Maternity Benefits for Female Workers Who are Non-Members of the SSS.— Female workers
who are neither voluntary nor regular members of the SSS shall be governed by the Philippine Health
Insurance Corporation (PhilHealth) Circular No. 022-2014 or the "Social Health Insurance Coverage and
Benefits for Women About to Give Birth".

Section 12. Maternity Leave of a Female Worker With Pending Administrative Case. — The maternity
leave benefits granted under this Act shall be enjoyed by a female worker in the government service and
in the private sector even if she has a pending administrative case.

Section 13. Maternity Leave for Female National Athletes.— In the event a national athlete becomes
pregnant, she will be referred to the team physician or an accredited physician of the Philippine Sports
Commission (PSC) or an obstetrician-gynecologist to determine her fitness to continue training. She will
be allowed to participate in all team-related activities, unless the physician advises that participation is
not medically safe or should be limited. Upon medical advice, she shall go on maternity leave until
cleared to return to training. She shall continue receiving her allowance and be entitled to the same
benefits while on maternity leave prior to childbirth and up to six (6) months after, unless she can
resume sooner as advised by her physician, in which case, she will be entitled to the allowance and
benefits she had prior to pregnancy: Provided, That a female national athlete employed in the public
sector shall not receive double compensation or benefits.

Section 14. Non-Diminution of Benefits. - Nothing in this Act shall be construed as to diminish existing
maternity benefits currently enjoyed whether or not these are granted under collective bargaining
agreements (CBA) or present laws, if the same are more beneficial to the female worker. Any other
working arrangement which the female worker shall agree to, during the additional maternity leave
period, shall be allowed: Provided, That this shall be consented to in writing by the female worker and
shall primarily uphold her maternal functions and the requirements of postnatal care.

Section 15. Security of Tenure. - Those who avail of the benefits of this Act, whether in the government
service or private sector, shall be assured of security of tenure. As such, the exercise of this option by
them shall not be used as basis for demotion in employment or termination. The transfer to a parallel
position or reassignment from one organizational unit to another in the same agency or private
enterprise shall be allowed: Provided, That it shall not involve a reduction in rank, status, salary, or
otherwise amount to constructive dismissal.1âwphi1
Section 16. Non-Discrimination. - No employer whether in the public or private sector shall discriminate
against the employment of women in order to avoid the benefits provided for in this Act.

Section 17. Periodic Review. - The Civil Service Commission (CSC), the DOLE, the SSS, and the Gender
Ombud of the Commission on Human Rights (CHR), in consultation with trade unions, labor
organizations, and employers’ representatives shall within one (1) month after the effectivity of this Act
conduct a review of the maternity leave benefits of female workers in the government service and the
private sector, respectively. Thereafter, they shall include maternity leave benefits in their valuation
report conducted every four (4) years for the SSS and the DOLE and every three (3) years for the CSC, or
more frequently as may be necessary, with the end in view of meeting the needs of pregnant women
and newly-born infants, and improving their welfare.

Section 18. Penalties. - Whoever fails or refuses to comply with the provisions of this Act shall be
punished by a fine of not less than Twenty thousand pesos (₱20,000.00) nor more than Two hundred
thousand pesos (₱200,000.00), and imprisonment of not less than six (6) years and one (1) day nor more
than twelve (12) years or both. If the act or omission penalized by this Act shall be committed by an
association, partnership, corporation, or any other institution, its managing head, directors, or partners
shall be liable to the penalties provided in this Act for the offense.

Failure on the part of any association, partnership, corporation, or private enterprise to comply with the
provisions of this Act shall be a ground for non-renewal of business permits.

Section 19. Implementing Rules and Regulations. - The CSC, the DOLE, and the SSS shall issue the
necessary rules and regulations for the effective implementation of this Act within sixty (60) days from
the effectivity of the same.

Section 20. Separability Clause. - If any provision of this Act is declared unconstitutional or otherwise
invalid, the validity of the other provisions shall not be affected thereby.

Section 21. Repealing Clause. - All laws, decrees, orders, rules and regulations or parts thereof
inconsistent with this Act are hereby repealed or modified accordingly.

Section 22. Effectivity. - This Act shall take effect after fifteen (15) days from its publication in the Official
Gazette or in a newspaper of general circulation.

Paternity Leave

• What is paternity leave benefit?

“Paternity leave” covers a married male employee allowing him not to report for work for seven (7)
calendar days but continues to earn the compensation therefor, on the condition that his spouse has
delivered a child or suffered miscarriage for purposes of enabling him to effectively lend support to his
wife in her period of recovery and/or in the nursing of the newlyborn child.

“Delivery” includes childbirth or any miscarriage.

“Spouse” refers to the lawful wife. For this purpose, “lawful wife” refers to a woman who is legally
married to the male employee concerned.
“Cohabiting” refers to the obligation of the husband and wife to live together.

• What is the covered total number of deliveries?

Every married employee in the private and public sectors is entitled to a paternity leave of seven (7)
calendar days with full pay for the first four (4) deliveries of the legitimate spouse with whom he is
cohabiting.

Paternity leave benefits are granted to the qualified employee after the delivery by his wife, without
prejudice to an employer allowing an employee to avail of the benefit before or during the delivery,
provided that the total number of days should not exceed seven (7) calendar days for each delivery.

• Is an unavailed paternity leave benefit convertible to cash?

No. In the event that the paternity leave benefit is not availed of, said leave shall not be convertible to
cash.

[REPUBLIC ACT NO. 8187]

AN ACT GRANTING PATERNITY LEAVE OF SEVEN (7) DAYS WITH FULL PAY TO ALL MARRIED MALE
EMPLOYEES IN THE PRIVATE AND PUBLIC SECTORS FOR THE FIRST FOUR (4) DELIVERIES OF THE
LEGITIMATE SPOUSE WITH WHOM HE IS COHABITING AND FOR OTHER PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

SECTION 1. Short Title. – This Act shall be known as the “Paternity Leave Act of 1996”.

SEC. 2. Notwithstanding any law, rules and regulations to the contrary, every married male employee in
the private and public sectors shall be entitled to a paternity leave of seven (7) days with full pay for the
first four (4) deliveries of the legitimate spouse with whom he is cohabiting. The male employee
applying for paternity leave shall notify his employer of the pregnancy of his legitimate spouse and the
expected date of such delivery.

For purposes of this Act, delivery shall include childbirth or any miscarriage.

SEC. 3. Definition of Term.  – For purposes of this Act, Paternity Leave refers to the benefits granted to a
married male employee allowing him not to report for work for seven (7) days but continues to earn the
compensation therefor, on the condition that his spouse has delivered a child or suffered a miscarriage
for purposes of enabling him to effectively lend support to his wife in her period of recovery and/or in
the nursing of the newly-born child.

SEC. 4. The Secretary of Labor and Employment, the Chairman of the Civil Service Commission and the
Secretary of Health shall, within thirty (30) days from the effectivity of this Act, issue such rules and
regulations necessary for the proper implementation of the provisions hereof.
SEC. 5. Any person, corporation, trust, firm, partnership, association or entity found violating this Act or
the rules and regulations promulgated thereunder shall be punished by a fine not exceeding Twenty-five
thousand pesos (P25,000) or imprisonment of not less than thirty (30)days nor more than six (6) months.

If the violation is committed by a corporation, trust or firm, partnership, association or any other entity,
the penalty of imprisonment shall be imposed on the entity’s responsible officers, including, but not
limited to, the president, vice-president, chief executive officer, general manager, managing director or
partner directly responsible therefor.

SEC. 6. Nondiminution Clause. – Nothing in this Act shall be construed to reduce any existing benefits of
any form granted under existing laws, decrees, executive orders, or any contract agreement or policy
between employer and employee.

SEC. 7. Repealing Clause.  – All laws, ordinances, rules, regulations, issuances, or parts thereof which are
inconsistent with this Act are hereby repealed or modified accordingly.

SEC. 8. Effectivity.  – This Act shall take effect (15) days from its publication in the Official Gazette or in at
least two (2) newspapers of national circulation.

Parental Leave

• What is parental leave?

“Parental leave” is the leave benefit granted to a male or female solo parent to enable him/her to
perform parental duties and responsibilities where physical presence is required.

• How many days may be availed of as parental leave?

The parental leave shall not be more than seven (7) working days every year to a solo parent who has
rendered service of at least one (1) year, to enable him/her to perform parental duties and
responsibilities where his/her physical presence is required. This leave shall be non-cumulative.

It bears noting that this leave privilege is an additional leave benefit which is separate and distinct from
any other leave benefits provided under existing laws or agreements.

• Who is a solo parent?

The term "solo parent" refers to any individual who falls under any of the following categories:

(1) A woman who gives birth as a result of rape and other crimes against chastity even without a final
conviction of the offender: Provided, That the mother keeps and raises the child;

(2) Parent left solo or alone with the responsibility of parenthood due to death of spouse;

(3) Parent left solo or alone with the responsibility of parenthood while the spouse is detained or is
serving sentence for a criminal conviction for at least one (1) year;
(4) Parent left solo or alone with the responsibility of parenthood due to physical and/or mental
incapacity of spouse as certified by a public medical practitioner;

(5) Parent left solo or alone with the responsibility of parenthood due to legal separation or de facto
separation from spouse for at least one (1) year, as long as he/she is entrusted with the custody of the
children;

(6) Parent left solo or alone with the responsibility of parenthood due to declaration of nullity or
annulment of marriage as decreed by a court or by a church as long as he/she is entrusted with the
custody of the children;

(7) Parent left solo or alone with the responsibility of parenthood due to abandonment of spouse for at
least one (1) year;

(8) Unmarried mother/father who has preferred to keep and rear her/his child/children instead of
having others care for them or give them up to a welfare institution;

(9) Any other person who solely provides parental care and support to a child or children;

(10) Any family member who assumes the responsibility of head of family as a result of the death,
abandonment, disappearance or prolonged absence of the parents or solo parent.

• What is the effect of change of status of the solo parent?

A change in the status or circumstance of the parent claiming benefits under this Act, such that he/she is
no longer left alone with the responsibility of parenthood, shall terminate his/her eligibility for these
benefits.

• Who are considered children under this law?

"Children" refer to those living with and dependent upon the solo parent for support who are
unmarried, unemployed and not more than eighteen (18) years of age, or even over eighteen (18) years
but are incapable of self-support because of mental and/or physical defect/disability.

• Is an unavailed parental leave convertible to cash?

No. In the event that the parental leave is not availed of, said leave shall not be convertible to cash
unless specifically agreed upon previously.

Republic Act 8972: Solo Parents’ Welfare Act of 2000

AN ACT PROVIDING FOR BENEFITS AND PRIVILEGES TO SOLO PARENTS AND THEIR CHILDREN,
APPROPRIATING FUNDS THEREFOR AND FOR OTHER PURPOSES.

Section 1. Title. – This Act shall be known as the “Solo Parents’ Welfare Act of 2000.“
Section 2. Declaration of Policy. – It is the policy of the State to promote the family as the foundation of
the nation, strengthen its solidarity and ensure its total development. Towards this end, it shall develop
a comprehensive program of services for solo parents and their children to be carried out by the
Department of Social Welfare and Development (DSWD), the Department of Health (DOH), the
Department of Education, Culture and Sports (DECS), the Department of the Interior and Local
Government (DILG), the Commission on Higher Education (CHED), the Technical Education and Skills
Development Authority (TESDA), the National Housing Authority (NHA), the Department of Labor and
Employment (DOLE) and other related government and nongovernment agencies.

Section 3. Definition of Terms. – Whenever used in this Act, the following terms shall mean as follows:

(a) “Solo parent” – any individual who falls under any of the following categories:

(1) A woman who gives birth as a result of rape and other crimes against chastity even without a final
conviction of the offender: Provided, That the mother keeps and raises the child;

(2) Parent left solo or alone with the responsibility of parenthood due to death of spouse;

(3) Parent left solo or alone with the responsibility of parenthood while the spouse is detained or is
serving sentence for a criminal conviction for at least one (1) year;

(4) Parent left solo or alone with the responsibility of parenthood due to physical and/or mental
incapacity of spouse as certified by a public medical practitioner;

(5) Parent left solo or alone with the responsibility of parenthood due to legal separation or de facto
separation from spouse for at least one (1) year, as long as he/she is entrusted with the custody of the
children;

(6) Parent left solo or alone with the responsibility of parenthood due to declaration of ‘ity or annulment
of marriage as decreed by a court or by a church as long as he/she is entrusted with the custody of the
children;

(7) Parent left solo or alone with the responsibility of parenthood due to abandonment of spouse for at
least one (1) year;

(8) Unmarried mother/father who has preferred to keep and rear her/his child/children instead of
having others care for them or give them up to a welfare institution;

(9) Any other person who solely provides parental care and support to a child or children;

(10) Any family member who assumes the responsibility of head of family as a result of the death,
abandonment, disappearance or prolonged absence of the parents or solo parent.

A change in the status or circumstance of the parent claiming benefits under this Act, such that he/she is
no longer left alone with the responsibility of parenthood, shall terminate his/her eligibility for these
benefits.
(b) “Children” – refer to those living with and dependent upon the solo parent for support who are
unmarried, unemployed and not more than eighteen (18) years of age, or even over eighteen (18) years
but are incapable of self-support because of mental and/or physical defect/disability.

(c) “Parental responsibility” – with respect to their minor children shall refer to the rights and duties of
the parents as defined in Article 220 of Executive Order No. 209, as amended, otherwise known as the
“Family Code of the Philippines.”

(d) “Parental leave” – shall mean leave benefits granted to a solo parent to enable him/her to perform
parental duties and responsibilities where physical presence is required.

(e) “Flexible work schedule” – is the right granted to a solo parent employee to vary his/her arrival and
departure time without affecting the core work hours as defined by the employer.

Section 4. Criteria for Support. – Any solo parent whose income in the place of domicile falls below the
poverty threshold as set by the National Economic and Development Authority (NEDA) and subject to
the assessment of the DSWD worker in the area shall be eligible for assistance: Provided, however, That
any solo parent whose income is above the poverty threshold shall enjoy the benefits mentioned in
Sections 6, 7 and 8 of this Act.

Section 5. Comprehensive Package of Social Development and Welfare Services. – A comprehensive

package of social development and welfare services for solo parents and their families will be developed
by the DSWD, DOH, DECS, CHED, TESDA, DOLE, NHA and DILG, in coordination with local government
units and a nongovernmental organization with proven track record in providing services for solo
parents.

The DSWD shall coordinate with concerned agencies the implementation of the comprehensive package
of social development and welfare services for solo parents and their families. The package will initially
include:

(a) Livelihood development services which include trainings on livelihood skills, basic business
management, value orientation and the provision of seed capital or job placement.

(b) Counseling services which include individual, peer group or family counseling. This will focus on the
resolution of personal relationship and role conflicts.

(c) Parent effectiveness services which include the provision and expansion of knowledge and skills of
the solo parent on early childhood development, behavior management, health care, rights and duties
of parents and children.

(d) Critical incidence stress debriefing which includes preventive stress management strategy designed
to assist solo parents in coping with crisis situations and cases of abuse.

(e) Special projects for individuals in need of protection which include temporary shelter, counseling,
legal assistance, medical care, self-concept or ego-building, crisis management and spiritual enrichment.
Section 6. Flexible Work Schedule. – The employer shall provide for a flexible working schedule for solo
parents: Provided, That the same shall not affect individual and company productivity: Provided, further,
That any employer may request exemption from the above requirements from the DOLE on certain
meritorious grounds.

Section 7. Work Discrimination. – No employer shall discriminate against any solo parent employee with
respect to terms and conditions of employment on account of his/her status.

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

Section 9. Educational Benefits. – The DECS, CHED and TESDA shall provide the following benefits and
privileges:

(1) Scholarship programs for qualified solo parents and their children in institutions of basic, tertiary and
technical/skills education; and

(2) Nonformal education programs appropriate for solo parents and their children.

The DECS, CHED and TESDA shall promulgate rules and regulations for the proper implementation of this
program.

Section 10. Housing Benefits. – Solo parents shall be given allocation in housing projects and shall be
provided with liberal terms of payment on said government low-cost housing projects in accordance
with housing law provisions prioritizing applicants below the poverty line as declared by the NEDA.

Section 11. Medical Assistance. – The DOH shall develop a comprehensive health care program for solo
parents and their children. The program shall be implemented by the DOH through their retained
hospitals and medical centers and the local government units (LGUs) through their
provincial/district/city/municipal hospitals and rural health units (RHUs).

Section 12. Additional Powers and Functions of the DSWD. — The DSWD shall perform the following
additional powers and functions relative to the welfare of solo parents and their families:

(a) Conduct research necessary to: (1) develop a new body of knowledge on solo parents; (2) define
executive and legislative measures needed to promote and protect the interest of solo parents and their
children; and (3) assess the effectiveness of programs designed for disadvantaged solo parents and their
children;
(b) Coordinate the activities of various governmental and nongovernmental organizations engaged in
promoting and protecting the interests of solo parents and their children; and

(c) Monitor the implementation of the provisions of this Act and suggest mechanisms by which such
provisions are effectively implemented.

Section 13. Implementing Rules and Regulations. – An interagency committee headed by the DSWD, in
coordination with the DOH, DECS, CHED, TESDA, DOLE, NHA, and DILG is hereby established which shall
formulate, within ninety (90) days upon the effectivity of this Act, the implementing rules and
regulations in consultation with the local government units, nongovernment organizations and people’s
organizations.

Section 14. Appropriations. – The amount necessary to carry out the provisions of this Act shall be
included in the budget of concerned government agencies in the General Appropriations Act of the year
following its enactment into law and thereafter.

Section 15. Repealing Clause. – All laws, decrees, executive orders, administrative orders or parts
thereof inconsistent with the provisions of this Act are hereby repealed, amended or modified
accordingly.

Section 16. Separability Clause. – If any provision of this Act is held invalid or unconstitutional, other
provisions not affected thereby shall continue to be in full force and effect.

Section 17. Effectivity Clause. – This Act shall take effect fifteen (15) days following its complete
publication in the Official Gazette or in at least two (2) newspaper of general circulation.

Leave for Victims of Violence against Women and Children

• What is this kind of leave?

This special leave is granted to a woman employee who is a victim under this law. It is for a total of ten
(10) days of paid leave of absence, in addition to other paid leaves under the law. It is extendible when
the necessity arises as specified in the protection order. Its purpose is to enable the woman employee to
attend to the medical and legal concerns relative to said law. This leave is not convertible to cash.

• What is the requirement for its entitlement?

At any time during the application of any protection order, investigation, prosecution and/or trial of the
criminal case, a victim of Violence Against Women and their Children (VAWC) who is employed shall be
entitled to said paid leave of up to ten (10) days. The Punong Barangay/kagawad or prosecutor or the
Clerk of Court, as the case may be, shall issue a certification at no cost to the woman that such an action
is pending, and this is all that is required for the employer to comply with the 10-day paid leave.

Republic Act 9262: Anti-Violence Against Women and Their Children Act of 2004

SECTION 1. Short Title.– This Act shall be known as the “Anti-Violence Against Women and Their
Children Act of 2004.”

SECTION 2. Declaration of Policy.– It is hereby declared that the State values the dignity of women and
children and guarantees full respect for human rights. The State also recognizes the need to protect the
family and its members particularly women and children, from violence and threats to their personal
safety and security.

Towards this end, the State shall exert efforts to address violence committed against women and
children in keeping with the fundamental freedoms guaranteed under the Constitution and the
Provisions of the Universal Declaration of Human Rights, the convention on the Elimination of all forms
of discrimination Against Women, Convention on the Rights of the Child and other international human
rights instruments of which the Philippines is a party.

SECTION 43. Entitled to Leave. – Victims under this Act shall be entitled to take a paid leave of absence
up to ten (10) days in addition to other paid leaves under the Labor Code and Civil Service Rules and
Regulations, extendible when the necessity arises as specified in the protection order.

Any employer who shall prejudice the right of the person under this Sec. shall be penalized in
accordance with the provisions of the Labor Code and Civil Service Rules and Regulations. Likewise, an
employer who shall prejudice any person for assisting a co-employee who is a victim under this Act shall
likewise be liable for discrimination.

Special Leave Benefit for Women

SPECIAL LEAVE BENEFIT FOR WOMEN

• What is this special leave benefit [GYNECOLOGICAL SURGERY LEAVE]?

A special leave benefit for women was granted under R.A. No. 9710, otherwise known as “The Magna
Carta of Women” [August 14, 2009]. Thus, any female employee in the public and private sector
regardless of age and civil status shall be entitled to a special leave of two (2) months with full pay
based on her gross monthly compensation subject to existing laws, rules and regulations due to surgery
caused by gynecological disorders under the following terms and conditions:
1. She has rendered at least six (6) months continuous aggregate employment service for the last twelve
(12) months prior to surgery;

2. In the event that an extended leave is necessary, the female employee may use her earned leave
credits; and

3. This special leave shall be non-cumulative and non-convertible to cash.

“Gynecological disorders” refer to disorders that would require surgical procedures such as, but not
limited to, dilatation and curettage and those involving female reproductive organs such as the vagina,
cervix, uterus, fallopian tubes, ovaries, breast, adnexa and pelvic floor, as certified by a competent
physician. Gynecological surgeries shall also include hysterectomy, ovariectomy, and mastectomy.

• Is this leave similar to maternity leave?

No. This leave should be distinguished from maternity leave benefit, a separate and distinct benefit,
which may be availed of in case of childbirth, miscarriage or complete abortion.

A woman, therefore, may avail of this special leave benefit in case she undergoes surgery caused by
gynaecological disorder and at the same time maternity benefit as these two leaves are not mutually
exclusive.
Suggested Readings

THIRD DIVISION

G.R. No. 122917 July 12, 1999

MARITES BERNARDO, ELVIRA GO DIAMANTE, REBECCA E. DAVID, DAVID P. PASCUAL, RAQUEL

ESTILLER, ALBERT HALLARE, EDMUND M. CORTEZ, JOSELITO O. AGDON GEORGE P. LIGUTAN JR., CELSO
M. YAZAR, ALEX G. CORPUZ, RONALD M. DELFIN, ROWENA M. TABAQUERO, CORAZON C. DELOS
REYES, ROBERT G. NOORA, MILAGROS O. LEQUIGAN, ADRIANA F. TATLONGHARI, IKE CABANDUCOS,
COCOY NOBELLO, DORENDA CANTIMBUHAN, ROBERT MARCELO, LILIBETH Q. MARMOLEJO, JOSE E.
SALES, ISABEL MAMAUAG, VIOLETA G. MONTES, ALBINO TECSON, MELODY V. GRUELA, BERNADETH
D. AGERO, CYNTHIA DE VERA, LANI R. CORTEZ, MA. ISABEL B. CONCEPCION, DINDO VALERIO,
ZENAIDA MATA, ARIEL DEL PILAR, MARGARET CECILIA CANOZA, THELMA SEBASTIAN, MA. JEANETTE
CERVANTES, JEANNIE RAMIL, ROZAIDA PASCUAL, PINKY BALOLOA, ELIZABETH VENTURA, GRACE S.
PARDO and TIMOSA, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and FAR EAST BANK AND TRUST COMPANY, respondents.

PANGANIBAN, J.:

The  Magna Carta  for Disabled Persons mandates that qualified disabled persons be granted the same
terms and conditions of employment as qualified able-bodied employees. Once they have attained the
status of regular workers, they should be accorded all the benefits granted by law, notwithstanding
written or verbal contracts to the contrary. This treatments is rooted not merely on charity or
accomodation, but on justice for all.

The Case

Challenged in the Petition for Certiorari 1 before us is the June 20, 1995 Decision 2 of the National Labor
Relations Commission (NLRC), 3 which affirmed the August, 22 1994 ruling of Labor Arbiter Cornelio L.
Linsangan. The labor arbiter's Decision disposed as follows: 4

WHEREFORE, judgment is hereby rendered dismissing the above-mentioned complaint for lack of merit.

Also assailed is the August 4, 1995 Resolution 5 of the NLRC, which denied the Motion for
Reconsideration.

The Facts

The facts were summarized by the NLRC in this wise: 6

Complainants numbering 43 (p. 176, Records) are deaf-mutes who were hired on various periods from
1988 to 1993 by respondent Far East Bank and Trust Co. as Money Sorters and Counters through a
uniformly worded agreement called "Employment Contract for Handicapped Workers". (pp. 68 & 69,
Records) The full text of said agreement is quoted below:
EMPLOYMENT CONTRACT FOR

HANDICAPPED WORKERS

This Contract, entered into by and between:

FAR EAST BANK AND TRUST COMPANY, a universal banking corporation duly organized and existing
under and by virtue of the laws of the Philippines, with business address at FEBTC Building, Muralla,
Intramuros, Manila, represented herein by its Assistant Vice President, MR. FLORENDO G. MARANAN,
(hereinafter referred to as the "BANK");

-and-

—————, ————— years old, of legal age, ————, and residing at (hereinafter referred to as the
("EMPLOYEE").

WITNESSETH : That

WHEREAS, the BANK, cognizant of its social responsibility, realizes that there is a need to provide
disabled and handicapped persons gainful employment and opportunities to realize their potentials,
uplift their socio-economic well being and welfare and make them productive, self-reliant and useful
citizens to enable them to fully integrate in the mainstream of society;

WHEREAS, there are certain positions in the BANK which may be filled-up by disabled and handicapped
persons, particularly deaf-mutes, and the BANK ha[s] been approached by some civic-minded citizens
and authorized government agencies [regarding] the possibility of hiring handicapped workers for these
positions;

WHEREAS, the EMPLOYEE is one of those handicapped workers who [were] recommended for possible
employment with the BANK;

NOW, THEREFORE, for and in consideration of the foregoing premises and in compliance with Article 80
of the Labor Code of the Philippines as amended, the BANK and the EMPLOYEE have entered into this
Employment Contract as follows:

1. The BANK agrees to employ and train the EMPLOYEE, and the EMPLOYEE agrees to diligently and
faithfully work with the BANK, as Money Sorter  and Counter.

2. The EMPLOYEE shall perform among others, the following duties and responsibilities:

i. Sort out bills according to color;

ii. Count each denomination per hundred, either manually or with the aid of a counting machine;

iii. Wrap and label bills per hundred;

iv. Put the wrapped bills into bundles; and

v. Submit bundled bills to the bank teller for verification.

3. The EMPLOYEE shall undergo a training period of one (1) month, after which the BANK shall
determine whether or not he/she should be allowed to finish the remaining term of this Contract.
4. The EMPLOYEE shall be entitled to an initial compensation of P118.00 per day, subject to adjustment
in the sole judgment of the BANK, payable every 15th and end of the month.1âwphi1.nêt

5. The regular work schedule of the EMPLOYEE shall be five (5) days per week, from Mondays thru
Fridays, at eight (8) hours a day. The EMPLOYEE may be required to perform overtime work as
circumstance may warrant, for which overtime work he/she [shall] be paid an additional compensation
of 125% of his daily rate if performed during ordinary days and 130% if performed during Saturday or [a]
rest day.

6. The EMPLOYEE shall likewise be entitled to the following benefits:

i. Proportionate 13th month pay based on his basic daily wage.

ii. Five (5) days incentive leave.

iii. SSS premium payment.

7. The EMPLOYEE binds himself/herself to abide [by] and comply with all the BANK Rules and
Regulations and Policies, and to conduct himself/herself in a manner expected of all employees of the
BANK.

8. The EMPLOYEE acknowledges the fact that he/she had been employed under a special employment
program of the BANK, for which reason the standard hiring requirements of the BANK were not applied
in his/her case. Consequently, the EMPLOYEE acknowledges and accepts the fact that the terms and
conditions of the employment generally observed by the BANK with respect to the BANK's regular
employee are not applicable to the EMPLOYEE, and that therefore, the terms and conditions of the
EMPLOYEE's employment with the BANK shall be governed solely and exclusively by this Contract and by
the applicable rules and regulations that the Department of Labor and Employment may issue in
connection with the employment of disabled  and handicapped workers. More specifically, the
EMPLOYEE hereby acknowledges that the provisions of Book Six of the Labor Code of the Philippines as
amended, particularly on regulation of employment and separation pay are not applicable to him/her.

9. The Employment Contract shall be for a period of six (6) months or from —— to —— unless earlier
terminated by the BANK for any just or reasonable cause. Any continuation or extension of this Contract
shall be in writing and therefore this Contract will automatically expire at the end of its terms unless
renewed in writing by the BANK.

IN WITNESS WHEREOF, the parties, have hereunto affixed their signature[s] this —— day of ———,
——— at Intramuros, Manila, Philippines.

In 1988, two (2) deaf-mutes were hired under this Agreement; in 1989 another two (2); in 1990,
nineteen (19); in 1991 six (6); in 1992, six (6) and in 1993, twenty-one (21). Their employment[s] were
renewed every six months such that by the time this case arose, there were fifty-six (56) deaf-mutes
who were employed by respondent under the said employment agreement. The last one was Thelma
Malindoy who was employed in 1992 and whose contract expired on July 1993.

xxx xxx xxx

Disclaiming that complainants were regular employees, respondent Far East Bank and Trust Company
maintained that complainants who are a special class of workers — the hearing impaired employees
were hired temporarily under [a] special employment arrangement which was a result of overtures
made by some civic and political personalities to the respondent Bank; that complainant[s] were hired
due to "pakiusap" which must be considered in the light of the context career and working environment
which is to maintain and strengthen a corps of professionals trained and qualified officers and regular
employees who are baccalaureate degree holders from excellent schools which is an unbending policy in
the hiring of regular employees; that in addition to this, training continues so that the regular employee
grows in the corporate ladder; that the idea of hiring handicapped workers was acceptable to them only
on a special arrangement basis; that it was adopted the special program to help tide over a group of
workers such as deaf-mutes like the complainants who could do manual work for the respondent Bank;
that the task of counting and sorting of bills which was being performed by tellers could be assigned to
deaf-mutes that the counting and sorting of money are tellering works which were always logically and
naturally part and parcel of the tellers' normal functions; that from the beginning there have been no
separate items in the respondent Bank plantilla for sortes or counters; that the tellers themselves
already did the sorting and counting chore as a regular feature and integral part of their duties (p. 97,
Records); that through the "pakiusap" of Arturo Borjal, the tellers were relieved of this task of counting
and sorting bills in favor of deaf-mutes without creating new positions as there is no position either in
the respondent or in any other bank in the Philippines which deals with purely counting and sorting of
bills in banking operations.

Petitioners specified when each of them was hired and dimissed, viz: 7

NAME OF PETITIONER WORKPLACE Date Hired Date Dismissed

1. MARITES BERNARDO Intramuros 12-Nov-90 17-Nov-93

2. ELVIRA GO DIAMANTE Intramuros 24-Jan-90 11-Jan-94

3. REBECCA E. DAVID Intramuros 16-Apr-90 23-Oct-93

4. DAVID P. PASCUAL Bel-Air 15-Oct-88 21-Nov-94

5. RAQUEL ESTILLER Intramuros 2-Jul-92 4-Jan-94

6. ALBERT HALLARE West 4-Jan-91 9-Jan-94

7. EDMUND M. CORTEZ Bel-Air 15-Jan-91 3-Dec-93

8. JOSELITO O. AGDON Intramuros 5-Nov-90 17-Nov-93

9. GEORGE P. LIGUTAN JR. Intramuros 6-Sep-89 19-Jan-94

10. CELSO M. YAZAR Intramuros 8-Feb-93 8-Aug-93

11. ALEX G. CORPUZ Intramuros 15-Feb-93 15-Aug-93

12. RONALD M. DELFIN Intramuros 22-Feb-93 22-Aug-93

13. ROWENA M. TABAQUERO Intramuros 22-Feb-93 22-Aug-93

14. CORAZON C. DELOS REYES Intramuros 8-Feb-93 8-Aug-93

15. ROBERT G. NOORA Intramuros 15-Feb-93 15-Aug-93

16. MILAGROS O. LEQUIGAN Intramuros 1-Feb-93 1-Aug-93

17. ADRIANA F. TATLONGHARI Intramuros 22-Jan-93 22-Jul-93

18. IKE CABUNDUCOS Intramuros 24-Feb-93 24-Aug-93

19. COCOY NOBELLO Intramuros 22-Feb-93 22-Aug-93

20. DORENDA CATIMBUHAN Intramuros 15-Feb-93 15-Aug-93

21. ROBERT MARCELO West 31 JUL 93 8 1-Aug-93

22. LILIBETH Q. MARMOLEJO West 15-Jun-90 21-Nov-93

23. JOSE E. SALES West 6-Aug-92 12-Oct-93

24. ISABEL MAMAUAG West 8-May-92 10-Nov-93

25. VIOLETA G. MONTES Intramuros 2-Feb-90 15-Jan-94

26. ALBINO TECSON Intramuros 7-Nov-91 10-Nov-93

27. MELODY B. GRUELA West 28-Oct-91 3-Nov-93

28. BERNADETH D. AGERO West 19-Dec-90 27-Dec-93

29. CYNTHIA DE VERA Bel-Air 26-Jun-90 3-Dec-93

30. LANI R. CORTEZ Bel-Air 15-Oct-88 10-Dec-93

31. MARIA ISABEL B.CONCEPCION West 6-Sep-90 6-Feb-94

32. DINDO VALERIO Intramuros 30-May-93 30-Nov-93

33. ZENAIDA MATA Intramuros 10-Feb-93 10-Aug-93

34. ARIEL DEL PILAR Intramuros 24-Feb-93 24-Aug-93

35. MARGARET CECILIA CANOZA Intramuros 27-Jul-90 4-Feb-94

36. THELMA SEBASTIAN Intramuros 12-Nov-90 17-Nov-93

37. MA. JEANETTE CERVANTES West 6-Jun-92 7-Dec-93

38. JEANNIE RAMIL Intramuros 23-Apr-90 12-Oct-93

39. ROZAIDA PASCUAL Bel-Air 20-Apr-89 29-Oct-93

 40. PINKY BALOLOA West 3-Jun-91 2-Dec-93

41. ELIZABETH VENTURA West 12-Mar-90 FEB 94 [sic]

42. GRACE S. PARDO West 4-Apr-90 13-Mar-94

43. RICO TIMOSA Intramuros 28-Apr-93 28-Oct-93

As earlier noted, the labor arbiter and, on appeal, the NLRC ruled against herein petitioners. Hence, this
recourse to this Court. 9

The Ruling of the NLRC

In affirming the ruling of the labor arbiter that herein petitioners could not be deemed regular
employees under Article 280 of the Labor Code, as amended, Respondent Commission ratiocinated as
follows:

We agree that Art. 280 is not controlling herein. We give due credence to the conclusion that
complainants were hired as an accommodation to [the] recommendation of civic oriented personalities
whose employment[s] were covered by . . . Employment Contract[s] with special provisions on duration
of contract as specified under Art. 80. Hence, as correctly held by the Labor Arbiter a quo, the terms of
the contract shall be the law between the parties. 10

The NLRC also declared that the Magna Carta for Disabled Persons was not applicable, "considering the
prevailing circumstances/milieu of the case."

Issues

In their Memorandum, petitioners cite the following grounds in support of their cause:

I. The Honorable Commission committed grave abuse of discretion in holding that the petitioners —
money sorters and counters working in a bank — were not regular employees.

II. The Honorable Commission committed grave abuse of discretion in holding that the employment
contracts signed and renewed by the petitioners — which provide for a period of six (6) months — were
valid.

III. The Honorable Commission committed grave abuse of discretion in not applying the provisions of the
Magna Carta for the Disabled (Republic Act No. 7277), on proscription against discrimination against
disabled persons. 11

In the main, the Court will resolve whether petitioners have become regular employees.

This Court's Ruling

The petition is meritorious. However, only the employees, who worked for more than six months and
whose contracts were renewed are deemed regular. Hence, their dismissal from employement was
illegal.

Preliminary Matter:

Propriety of Certiorari
Respondent Far East Bank and Trust Company argues that a review of the findings of facts of the NLRC is
not allowed in a petition for certiorari. Specifically, it maintains that the Court cannot pass upon the
findings of public respondent that petitioners were not regular employees.

True, the Court, as a rule, does not review the factual findings of public respondents in
a certiorari proceeding. In resolving whether the petitioners have become regular employees, we shall
not change the facts found by the public respondent. Our task is merely to determine whether the NLRC
committed grave abuse of discretion in applying the law to the established facts, as above-quoted from
the assailed Decision.

Main Issue

Are Petitioners Regular Employee?

Petitioners maintain that they should be considered regular employees, because their task as money
sorters and counters was necessary and desirable to the business of respondent bank. They further
allege that their contracts served merely to preclude the application of Article 280 and to bar them from
becoming regular employees.

Private respondent, on the other hand, submits that petitioners were hired only as "special workers and
should not in any way be considered as part of the regular complement of the Bank." 12 Rather, they
were "special" workers under Article 80 of the Labor Code. Private respondent contends that it never
solicited the services of petitioners, whose employment was merely an "accommodation" in response to
the requests of government officials and civic-minded citizens. They were told from the start, "with the
assistance of government representatives," that they could not become regular employees because
there were no plantilla positions for "money sorters," whose task used to be performed by tellers. Their
contracts were renewed several times, not because of need "but merely for humanitarian reasons."
Respondent submits that "as of the present, the "special position" that was created for the petitioners
no longer exist[s] in private respondent [bank], after the latter had decided not to renew anymore their
special employment contracts."

At the outset, let it be known that this Court appreciates the nobility of private respondent's effort to
provide employment to physically impaired individuals and to make them more productive members of
society. However, we cannot allow it to elude the legal consequences of that effort, simply because it
now deems their employment irrelevant. The facts, viewed in light of the Labor Code and the Magna
Carta for Disabled Persons, indubitably show that the petitioners, except sixteen of them, should be
deemed regular employees. As such, they have acquired legal rights that this Court is duty-bound to
protect and uphold, not as a matter of compassion but as a consequence of law and justice.

The uniform employment contracts of the petitioners stipulated that they shall be trained for a period of
one month, after which the employer shall determine whether or not they should be allowed to finish
the 6-month term of the contract. Furthermore, the employer may terminate the contract at any time
for a just and reasonable cause. Unless renewed in writing by the employer, the contract shall
automatically expire at the end of the term.1âwphi1.nêt

According to private respondent, the employment contracts were prepared in accordance with Article
80 of the Labor code, which provides;
Art. 80. Employment agreement. — Any employer who employs handicapped workers shall enter into an
employment agreement with them, which agreement shall include:

(a) The names and addresses of the handicapped workers to be employed;

(b) The rate to be paid the handicapped workers which shall be not less than seventy five (75%) per cent
of the applicable legal minimum wage;

(c) The duration of employment period; and

(d) The work to be performed by handicapped workers.

The employment agreement shall be subject to inspection by the Secretary of Labor or his duly
authorized representatives.

The stipulations in the employment contracts indubitably conform with the aforecited provision.
Succeeding events and the enactment of RA No. 7277 (the Magna Carta for Disabled
Persons), 13 however, justify the application of Article 280 of the Labor Code.

Respondent bank entered into the aforesaid contract with a total of 56 handicapped workers and
renewed the contracts of 37 of them. In fact, two of them worked from 1988 to 1993. Verily, the
renewal of the contracts of the handicapped workers and the hiring of others lead to the conclusion that
their tasks were beneficial and necessary to the bank. More important, these facts show that they were
qualified to perform the responsibilities of their positions. In other words, their disability did not render
them unqualified or unfit for the tasks assigned to them.

In this light, the Magna Carta for Disabled Persons mandates that a qualified disabled employee should
be given the same terms and conditions of employment as a qualified able-bodied person. Section 5 of
the Magna Carta provides:

Sec. 5. Equal Opportunity for Employment. — No disabled person shall be denied access to opportunities
for suitable employment. A qualified disabled employee shall be subject to the same terms and
conditions of employment and the same compensation, privileges, benefits, fringe benefits, incentives
or allowances as a qualified able bodied person.

The fact that the employees were qualified disabled persons necessarily removes the employment
contracts from the ambit of Article 80. Since the Magna Carta accords them the rights of qualified able-
bodied persons, they are thus covered by Article 280 of the Labor Code, which provides:

Art. 280. Regular and Casual Employment. — The provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to
be regular where the employee has been engaged to perform activities which are usually necessary or
desirable in the usual business or trade of the employer, except where the employment has been fixed
for a specific project or undertaking the completion or termination of which has been determined at the
time of the engagement of the employee or where the work or services to be performed is seasonal in
nature and the employment is for the duration of the season.

An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided,
That, any employee who has rendered at least one year of service, whether such service is continuous or
broken, shall be considered as regular employee with respect to the activity in which he is employed and
his employment shall continue while such activity exists.

The test of whether an employee is regular was laid down in De Leon v. NLRC, 14 in which this Court held:

The primary standard, therefore, of determining regular employment is the reasonable connection
between the particular activity performed by the employee in relation to the usual trade or business of
the employer. The test is whether the former is usually necessary or desirable in the usual business or
trade of the employer. The connection can be determined by considering the nature of the work
performed and its relation to the scheme of the particular business or trade in its entirety. Also if the
employee has been performing the job for at least one year, even if the performance is not continuous
and merely intermittent, the law deems repeated and continuing need for its performance as sufficient
evidence of the necessity if not indispensibility of that activity to the business. Hence, the employment
is considered regular, but only with respect to such activity, and while such activity exist.

Without a doubt, the task of counting and sorting bills is necessary and desirable to the business of
respondent bank. With the exception of sixteen of them, petitioners performed these tasks for more
than six months. Thus, the following twenty-seven petitioners should be deemed regular employees:
Marites Bernardo, Elvira Go Diamante, Rebecca E. David, David P. Pascual, Raquel Estiller, Albert Hallare,
Edmund M. Cortez, Joselito O. Agdon, George P. Ligutan Jr., Lilibeth Q. Marmolejo, Jose E. Sales, Isabel
Mamauag, Violeta G. Montes, Albino Tecson, Melody V. Gruela, Bernadeth D. Agero, Cynthia de Vera,
Lani R. Cortez, Ma. Isabel B. Concepcion, Margaret Cecilia Canoza, Thelma Sebastian, Ma. Jeanette
Cervantes, Jeannie Ramil, Rozaida Pascual, Pinky Baloloa, Elizabeth Ventura and Grace S. Pardo.

As held by the Court, "Articles 280 and 281 of the Labor Code put an end to the pernicious practice of
making permanent casuals of our lowly employees by the simple expedient of extending to them
probationary appointments, ad infinitum."15 The contract signed by petitioners is akin to a probationary
employment, during which the bank determined the employees' fitness for the job. When the bank
renewed the contract after the lapse of the six-month probationary period, the employees thereby
became regular employees. 16 No employer is allowed to determine indefinitely the fitness of its
employees.

As regular employees, the twenty-seven petitioners are entitled to security of tenure; that is, their
services may be terminated only for a just or authorized cause. Because respondent failed to show such
cause, 17 these twenty-seven petitioners are deemed illegally dismissed and therefore entitled to back
wages and reinstatement without loss of seniority rights and other privileges. 18 Considering the
allegation of respondent that the job of money sorting is no longer available because it has been
assigned back to the tellers to whom it originally belonged, 18 petitioners are hereby awarded separation
pay in lieu of reinstatement. 20

Because the other sixteen worked only for six months, they are not deemed regular employees and
hence not entitled to the same benefits.

Applicability of the

Brent Ruling
Respondent bank, citing  Brent School v. Zamora 21 in which the Court upheld the validity of an
employment contract with a fixed term, argues that the parties entered into the contract on equal
footing. It adds that the petitioners had in fact an advantage, because they were backed by then DSWD
Secretary Mita Pardo de Tavera and Representative Arturo Borjal.

We are not persuaded. The term limit in the contract was premised on the fact that the petitioners were
disabled, and that the bank had to determine their fitness for the position. Indeed, its validity is based
on Article 80 of the Labor Code. But as noted earlier, petitioners proved themselves to
be qualified disabled persons who, under the Magna Carta for Disabled Persons, are entitled to terms
and conditions of employment enjoyed by qualified  able-bodied individuals; hence, Article 80 does not
apply because petitioners are qualified  for their positions. The validation of the limit imposed on their
contracts, imposed by reason of their disability, was a glaring instance of the very mischief sought to be
addressed by the new law.

Moreover, it must be emphasized that a contract of employment is impressed with public

interest. 22 Provisions of applicable statutes are deemed written into the contract, and the "parties are
not at liberty to insulate themselves and their relationships from the impact of labor laws and
regulations by simply contracting with each other." 23 Clearly, the agreement of the parties regarding the
period of employment cannot prevail over the provisions of the Magna Carta for Disabled Persons,
which mandate that petitioners must be treated as qualified able-bodied employees.

Respondent's reason for terminating the employment of petitioners is instructive. Because the Bangko
Sentral ng Pilipinas (BSP) required that cash in the bank be turned over to the BSP during business hours
from 8:00 a.m. to 5:00 p.m., respondent resorted to nighttime sorting and counting of money. Thus, it
reasons that this task "could not be done by deaf mutes because of their physical limitations as it is very
risky for them to travel at night." 24 We find no basis for this argument. Travelling at night involves risks
to handicapped and able-bodied persons alike. This excuse cannot justify the termination of their
employment.

Other Grounds Cited by Respondent

Respondent argues that petitioners were merely "accommodated" employees. This fact does not change
the nature of their employment. As earlier noted, an employee is regular because of the nature of work
and the length of service, not because of the mode or even the reason for hiring them.

Equally unavailing are private respondent's arguments that it did not go out of its way to recruit
petitioners, and that its plantilla did not contain their positions. In L. T. Datu v. NLRC, 25 the Court held
that "the determination of whether employment is casual or regular does not depend on the will or
word of the employer, and the procedure of hiring . . . but on the nature of the activities performed by
the employee, and to some extent, the length of performance and its continued existence."

Private respondent argues that the petitioners were informed from the start that they could not become
regular employees. In fact, the bank adds, they agreed with the stipulation in the contract regarding this
point. Still, we are not persuaded. The well-settled rule is that the character of employment is
determined not by stipulations in the contract, but by the nature of the work performed. 26 Otherwise,
no employee can become regular by the simple expedient of incorporating this condition in the contract
of employment.
In this light, we iterate our ruling in Romares v. NLRC: 27

Art. 280 was emplaced in our statute books to prevent the circumvention of the employee's right to be
secure in his tenure by indiscriminately and completely ruling out all written and oral agreements
inconsistent with the concept of regular employment defined therein. Where an employee has been
engaged to perform activities which are usually necessary or desirable in the usual business of the
employer, such employee is deemed a regular employee and is entitled to security of tenure
notwithstanding the contrary provisions of his contract of employment.

xxx xxx xxx

At this juncture, the leading case of Brent School, Inc.  v.  Zamora proves instructive. As reaffirmed in
subsequent cases, this Court has upheld the legality of fixed-term employment. It ruled that the decisive
determinant in "term employment" should not be the activities that the employee is called upon to
perform but the day certain agreed upon the parties for the commencement and termination of their
employment relationship. But this Court went on to say that where from the circumstances it is
apparent that the periods have been imposed to preclude acquisition of tenurial security by the
employee, they should be struck down or disregarded as contrary to public policy and morals.

In rendering this Decision, the Court emphasizes not only the constitutional bias in favor of the working
class, but also the concern of the State for the plight of the disabled. The noble objectives of Magna
Carta for Disabled Persons are not based merely on charity or accommodation, but on justice and the
equal treatment of qualified  persons, disabled or not. In the present case, the handicap of petitioners
(deaf-mutes) is not a hindrance to their work. The eloquent proof of this statement is the repeated
renewal of their employment contracts. Why then should they be dismissed, simply because they are
physically impaired? The Court believes, that, after showing their fitness for the work assigned to them,
they should be treated and granted the same rights like any other regular employees.

In this light, we note the Office of the Solicitor General's prayer joining the petitioners' cause. 28

WHEREFORE, premises considered, the Petition is hereby GRANTED. The June 20, 1995 Decision and the
August 4, 1995 Resolution of the NLRC are REVERSED and SET ASIDE. Respondent Far East Bank and
Trust Company is hereby ORDERED to pay back wages and separation pay to each of the following
twenty-seven (27) petitioners, namely, Marites Bernardo, Elvira Go Diamante, Rebecca E. David, David P.
Pascual, Raquel Estiller, Albert Hallare, Edmund M. Cortez, Joselito O. Agdon, George P. Ligutan Jr.,
Liliberh Q. Marmolejo, Jose E. Sales, Isabel Mamauag, Violeta G. Montes, Albino Tecson, Melody V.
Gruela, Bernadeth D. Agero, Cynthia de Vera, Lani R. Cortez, Ma. Isabel B. Concepcion, Margaret Cecilia
Canoza, Thelma Sebastian, Ma. Jeanette Cervantes, Jeannie Ramil, Rozaida Pascual, Pinky Baloloa,
Elizabeth Ventura and Grace S. Pardo. The NLRC is hereby directed to compute the exact amount due
each of said employees, pursuant to existing laws and regulations, within fifteen days from the finality of
this Decision. No costs.1âwphi1.nêt

SO ORDERED.

Romero, Vitug, Purisima and Gonzaga-Reyes, JJ., concur.

 SECOND DIVISION

G.R. No. 79182 September 11, 1991

PNOC-ENERGY DEVELOPMENT CORPORATION, petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION (Third Division) and DANILO MERCADO, respondents.

Bacorro & Associates for petitioner.

Alberto L. Dalmacion for private respondent.

PARAS, J.:

This is a petition for certiorari to set aside the Resolution * dated July 3, 1987 of respondent National
Labor Relations Commission (NLRC for brevity) which affirmed the decision dated April 30, 1986 of Labor
Arbiter Vito J. Minoria of the NLRC, Regional Arbitration Branch No. VII at Cebu City in Case No. RAB-VII-
0556-85 entitled "Danilo Mercado, Complainant, vs. Philippine National Oil Company-Energy
Development Corporation, Respondent", ordering the reinstatement of complainant Danilo Mercado
and the award of various monetary claims.

The factual background of this case is as follows:

Private respondent Danilo Mercado was first employed by herein petitioner Philippine National Oil
Company-Energy Development Corporation (PNOC-EDC for brevity) on August 13, 1979. He held various
positions ranging from clerk, general clerk to shipping clerk during his employment at its Cebu office
until his transfer to its establishment at Palimpinon, Dumaguete, Oriental Negros on September 5, 1984.
On June 30, 1985, private respondent Mercado was dismissed. His last salary was P1,585.00 a month
basic pay plus P800.00 living allowance (Labor Arbiter's Decision, Annex "E" of Petition, Rollo, p. 52).

The grounds for the dismissal of Mercado are allegedly serious acts of dishonesty committed as follows:

1. On ApriI 12, 1985, Danilo Mercado was ordered to purchase 1,400 pieces of nipa shingles from Mrs.
Leonardo Nodado of Banilad, Dumaguete City, for the total purchase price of Pl,680.00. Against
company policy, regulations and specific orders, Danilo Mercado withdrew the nipa shingles from the
supplier but paid the amount of P1,000.00 only. Danilo Mercado appropriated the balance of P680.00
for his personal use;

2. In the same transaction stated above, the supplier agreed to give the company a discount of P70.00
which Danilo Mercado did not report to the company;

3. On March 28, 1985, Danilo Mercado was instructed to contract the services of Fred R. Melon of
Dumaguete City, for the fabrication of rubber stamps, for the total amount of P28.66. Danilo Mercado
paid the amount of P20.00 to Fred R. Melon and appropriated for his personal use the balance of P8.66.

In addition, private respondent, Danilo Mercado violated company rules and regulations in the following
instances:
1. On June 5, 1985, Danilo Mercado was absent from work without leave, without proper turn-over of
his work, causing disruption and delay of company work activities;

2. On June 15, 1985, Danilo Mercado went on vacation leave without prior leave, against company
policy, rules and regulations. (Petitioner's Memorandum, Rollo, p. 195).

On September 23, 1985, private respondent Mercado filed a complaint for illegal dismissal, retirement
benefits, separation pay, unpaid wages, etc. against petitioner PNOC-EDC before the NLRC Regional
Arbitration Branch No. VII docketed as Case No. RAB-VII-0556-85.

After private respondent Mercado filed his position paper on December 16, 1985 (Annex "B" of the
Petition, Rollo, pp. 28-40), petitioner PNOC-EDC filed its Position Paper/Motion to Dismiss on January 15,
1986, praying for the dismissal of the case on the ground that the Labor Arbiter and/or the NLRC had no
jurisdiction over the case (Annex "C" of the Petition, Rollo, pp. 41-45), which was assailed by private
respondent Mercado in his Opposition to the Position Paper/Motion to Dismiss dated March 12, 1986
(Annex "D" of the Petition, Rollo, pp. 46-50).

The Labor Arbiter ruled in favor of private respondent Mercado. The dispositive onion of said decision
reads as follows:

WHEREFORE, in view of the foregoing, respondents are hereby ordered:

1) To reinstate complainant to his former position with full back wages from the date of his dismissal up
to the time of his actual reinstatement without loss of seniority rights and other privileges;

2) To pay complainant the amount of P10,000.00 representing his personal share of his savings account
with the respondents;

3) To pay complainants the amount of P30,000.00 moral damages; P20,000.00 exemplary damages and
P5,000.00 attorney's fees;

4) To pay complainant the amount of P792.50 as his proportionate 13th month pay for 1985.

Respondents are hereby further ordered to deposit the aforementioned amounts with this Office within
ten days from receipt of a copy of this decision for further disposition.

SO ORDERED.
(Labor Arbiter's Decision, Rollo, p. 56)

The appeal to the NLRC was dismissed for lack of merit on July 3, 1987 and the assailed decision was
affirmed.

Hence, this petition.

The issues raised by petitioner in this instant petition are:

1. Whether or not matters of employment affecting the PNOC-EDC, a government-owned and controlled
corporation, are within the jurisdiction of the Labor Arbiter and the NLRC.
2. Assuming the affirmative, whether or not the Labor Arbiter and the NLRC are justified in ordering the
reinstatement of private respondent, payment of his savings, and proportionate 13th month pay and
payment of damages as well as attorney's fee.

Petitioner PNOC-EDC alleges that it is a corporation wholly owned and controlled by the government;
that the Energy Development Corporation is a subsidiary of the Philippine National Oil Company which is
a government entity created under Presidential Decree No. 334, as amended; that being a government-
owned and controlled corporation, it is governed by the Civil Service Law as provided for in Section 1,
Article XII-B of the 1973 Constitution, Section 56 of Presidential Decree No. 807 (Civil Service Decree)
and Article 277 of Presidential Decree No. 442, as amended (Labor Code).

The 1973 Constitution provides:

The Civil Service embraces every branch, agency, subdivision and instrumentality of the government
including government-owned or controlled corporations.

Petitioner PNOC-EDC argued that since Labor Arbiter Minoria rendered the decision at the time when
the 1973 Constitution was in force, said decision is null and void because under the 1973 Constitution,
government-owned and controlled corporations were governed by the Civil Service Law. Even assuming
that PNOC-EDC has no original or special charter and Section 2(i), Article IX-B of the 1987 Constitution
provides that:

The Civil Service embraces all branches, subdivision, instrumentalities and agencies of the Government,
including government-owned or controlled corporations with original charters.

such circumstances cannot give validity to the decision of the Labor Arbiter (Ibid., pp. 192-193).

This issue has already been laid to rest in the case of PNOC-EDC vs. Leogardo, 175 SCRA 26 (July 5, 1989),
involving the same petitioner and the same issue, where this Court ruled that the doctrine that
employees of government-owned and/or con controlled corporations, whether created by special law or
formed as subsidiaries under the General Corporation law are governed by the Civil Service Law and not
by the Labor Code, has been supplanted by the present Constitution. "Thus, under the present state of
the law, the test in determining whether a government-owned or controlled corporation is subject to
the Civil Service Law are the manner of its creation, such that government corporations created by
special charter are subject to its provisions while those incorporated under the General Corporation Law
are not within its coverage."

Specifically, the PNOC-EDC having been incorporated under the General Corporation Law was held to be
a government owned or controlled corporation whose employees are subject to the provisions of the
Labor Code (Ibid.).

The fact that the case arose at the time when the 1973 Constitution was still in effect, does not deprive
the NLRC of jurisdiction on the premise that it is the 1987 Constitution that governs because it is the
Constitution in place at the time of the decision (NASECO v. NLRC, G.R. No. 69870, 168 SCRA 122
[1988]).

In the case at bar, the decision of the NLRC was promulgated on July 3, 1987. Accordingly, this case falls
squarely under the rulings of the aforementioned cases.
As regards the second issue, the record shows that PNOC-EDC's accusations of dishonesty and violations
of company rules are not supported by evidence. Nonetheless, while acknowledging the rule that
administrative bodies are not governed by the strict rules of evidence, petitioner PNOC-EDC alleges that
the labor arbiter's propensity to decide the case through the position papers submitted by the parties is
violative of due process thereby rendering the decision null and void (Ibid., p. 196).

On the other hand, private respondent contends that as can be seen from petitioner's Motion for
Reconsideration and/or Appeal dated July 28, 1986 (Annex "F" of the Petition, Rollo, pp. 57- 64), the
latter never questioned the findings of facts of the Labor Arbiter but simply limited its objection to the
lack of legal basis in view of its stand that the NLRC had no jurisdiction over the case (Private
Respondent's Memorandum, Rollo, p. 104).

Petitioner PNOC-EDC filed its Position Paper/Motion to Dismiss dated January 15, 1986 (Annex "C" of
the Petition Rollo, pp. 41-45) before the Regional Arbitration Branch No. VII of Cebu City and its Motion
for Reconsideration and/or Appeal dated July 28, 1986 (Annex "F" of the Petition, Rollo, pp. 57-64)
before the NLRC of Cebu City. Indisputably, the requirements of due process are satisfied when the
parties are given an opportunity to submit position papers. What the fundamental law abhors is not the
absence of previous notice but rather the absolute lack of opportunity to ventilate a party's side. There
is no denial of due process where the party submitted its position paper and flied its motion for
reconsideration (Odin Security Agency vs. De la Serna, 182 SCRA 472 [February 21, 1990]). Petitioner's
subsequent Motion for Reconsideration and/or Appeal has the effect of curing whatever irregularity
might have been committed in the proceedings below (T.H. Valderama and Sons, Inc. vs. Drilon, 181
SCRA 308 [January 22, 1990]).

Furthermore, it has been consistently held that findings of administrative agencies which have acquired
expertise because their jurisdiction is confined to specific matters are accorded not only respect but
even finality (Asian Construction and Development Corporation vs. NLRC, 187 SCRA 784 [July 27, 1990];
Lopez Sugar Corporation vs. Federation of Free Workers, 189 SCRA 179 [August 30, 1990]). Judicial
review by this Court does not go so far as to evaluate the sufficiency of the evidence but is limited to
issues of jurisdiction or grave abuse of discretion (Filipinas Manufacturers Bank vs. NLRC, 182 SCRA 848
[February 28, 1990]). A careful study of the records shows no substantive reason to depart from these
established principles.

While it is true that loss of trust or breach of confidence is a valid ground for dismissing an employee,
such loss or breach of trust must have some basis (Gubac v. NLRC, 187 SCRA 412 [July 13, 1990]). As
found by the Labor Arbiter, the accusations of petitioner PNOC-EDC against private respondent Mercado
have no basis. Mrs. Leonardo Nodado, from whom the nipa shingles were purchased, sufficiently
explained in her affidavit (Rollo, p. 36) that the total purchase price of P1,680.00 was paid by respondent
Mercado as agreed upon. The alleged discount given by Mrs. Nodado is not supported by evidence as
well as the alleged appropriation of P8.66 from the cost of fabrication of rubber stamps. The Labor
Arbiter, likewise, found no evidence to support the alleged violation of company rules. On the contrary,
he found respondent Mercado's explanation in his affidavit (Rollo, pp. 38-40) as to the alleged violations
to be satisfactory. Moreover, these findings were never contradicted by petitioner petitioner PNOC-EDC.

PREMISES CONSIDERED, the petition is DENIED and the resolution of respondent NLRC dated July 3,
1987 is AFFIRMED with the modification that the moral damages are reduced to Ten Thousand
(P10,000.00) Pesos, and the exemplary damages reduced to Five Thousand (P5,000.00) Pesos.
SO ORDERED.

Melencio-Herrera (Chairperson), Padilla and Regalado, JJ., concur.

Sarmiento, J., is on leave.

EN BANC

G.R. No. L-18353             July 31, 1963

SAN MIGUEL BREWERY, INC., petitioner, vs. DEMOCRATIC LABOR ORGANIZATION, ET AL., respondents.

Paredes, Poblador, Cruz and Nazareno for petitioner.

Delfin N. Mercader for respondents.

BAUTISTA ANGELO, J.:

On January 27, 1955, the Democratic Labor Association filed complaint against the San Miguel Brewery,
Inc. embodying 12 demands for the betterment of the conditions of employment of its members. The
company filed its answer to the complaint specifically denying its material averments and answering the
demands point by point. The company asked for the dismissal of the complaint.

At the hearing held sometime in September, 1955, the union manifested its desire to confine its claim to
its demands for overtime, night-shift differential pay, and attorney's fees, although it was allowed to
present evidence on service rendered during Sundays and holidays, or on its claim for additional
separation pay and sick and vacation leave compensation.1äwphï1.ñët

After the case had been submitted for decision, Presiding Judge Jose S. Bautista, who was commissioned
to receive the evidence, rendered decision expressing his disposition with regard to the points
embodied in the complaint on which evidence was presented. Specifically, the disposition insofar as
those points covered by this petition for review are concerned, is as follows:

1. With regard to overtime compensation, Judge Bautista held that the provisions of the Eight-Hour
Labor Law apply to the employees concerned for those working in the field or engaged in the sale of the
company's products outside its premises and consequently they should be paid the extra compensation
accorded them by said law in addition to the monthly salary and commission earned by them, regardless
of the meal allowance given to employees who work up to late at night.

2. As to employees who work at night, Judge Bautista decreed that they be paid their corresponding
salary differentials for work done at night prior to January 1, 1949 with the present qualification: 25% on
the basis of their salary to those who work from 6:00 to 12:00 p.m., and 75% to those who work from
12:01 to 6:00 in the morning.

3. With regard to work done during Sundays and holidays, Judge Bautista also decreed that the
employees concerned be paid an additional compensation of 25% as provided for in Commonwealth Act
No. 444 even if they had been paid a compensation on monthly salary basis.
The demands for the application of the Minimum Wage Law to workers paid on "pakiao" basis, payment
of accumulated vacation and sick leave and attorney's fees, as well as the award of additional separation
pay, were either dismissed, denied, or set aside.

Its motion for reconsideration having been denied by the industrial court en banc, which affirmed the
decision of the court a quo  with few exceptions, the San Miguel Brewery, Inc. interposed the present
petition for review.

Anent the finding of the court  a quo, as affirmed by the Court of Industrial Relations, to the effect that
outside or field sales personnel are entitled to the benefits of the Eight-Hour Labor Law, the pertinent
facts are as follows:

After the morning roll call, 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 require 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 at most, or that the
employees could make their sales on their routes within such number of hours variable in the sense that
sometimes they can be completed in less than 8 hours, sometimes 6 to 7 hours, or more. The moment
these outside or field employees leave the plant and while in their sales routes they are on their own,
and often times when the sales are completed, or when making short trip deliveries only, they go back
to the plant, load again, and make another round of sales. These employees receive monthly salaries
and sales commissions in variable amounts. The amount of compensation they receive is uncertain
depending upon their individual efforts or industry. Besides the monthly salary, they are paid sales
commission that range from P30, P40, sometimes P60, P70, to sometimes P90, P100 and P109 a month,
at the rate of P0.01 to P0.01-½ per case.

It is contended that since the employees concerned are paid a commission on the sales they make
outside of the required 8 hours besides the fixed salary that is paid to them, the Court of Industrial
Relations erred in ordering that they be paid an overtime compensation as required by the Eight-Hour
Labor Law for the reason that the commission they are paid already takes the place of such overtime
compensation. Indeed, it is claimed, overtime compensation is an additional pay for work or services
rendered in excess of 8 hours a day by an employee, and if the employee is already given extra
compensation for labor performed in excess of 8 hours a day, he is not covered by the law. His situation,
the company contends, can be likened to an employee who is paid on piece-work, "pakiao", or
commission basis, which is expressly excluded from the operation of the Eight-Hour Labor Law. 1

We are in accord with this view, for in our opinion 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. 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. This philosophy is better explained in Jewel
Tea Co. v. Williams, C.C.A. Okla., 118 F. 2d 202, as follows:
The reasons for excluding an outside salesman are fairly apparent. Such salesman, to a greater extent,
works individually. There are no restrictions respecting the time he shall work and he can earn as much
or as little, within the range of his ability, as his ambition dictates. In lieu of overtime he ordinarily
receives commissions as extra compensation. He works away from his employer's place of business, is
not subject to the personal supervision of his employer, and his employer has no way of knowing the
number of hours he works per day.

True it is that the employees concerned are paid a fixed salary for their month of service, such as
Benjamin Sevilla, a salesman, P215; Mariano Ruedas, a truck driver, P155; Alberto Alpaza and Alejandro
Empleo, truck helpers, P125 each, and sometimes they work in excess of the required 8-hour period of
work, but for their extra work they are paid a commission which is in lieu of the extra compensation to
which they are entitled. The record shows that these employees during the period of their employment
were paid sales commission ranging from P30, P40, sometimes P60, P70, to sometimes P90, P100 and
P109 a month depending on the volume of their sales and their rate of commission per case. And so,
insofar is the extra work they perform, they can be considered as employees paid on piece work,
"pakiao", or commission basis. The Department of Labor, called upon to implement, the Eight-Hour
Labor Law, is of this opinion when on December 9, 1957 it made the ruling on a query submitted to it,
thru the Director of the Bureau of Labor Standards, to the effect that field sales personnel receiving
regular monthly salaries, plus commission, are not subject to the Eight-Hour Labor Law. Thus, on this
point, said official stated:

. . . Moreover, when a fieldman receives a regular monthly salary plus commission on percentage basis
of his sales, it is also the established policy of the Office to consider his commission as payment for the
extra time he renders in excess of eight hours, thereby classifying him as if he were on piecework basis,
and therefore, technically speaking, he is not subject to the Eight-Hour Labor Law.

We are, therefore, of the opinion that the industrial court erred in holding that the Eight-Hour Labor
Law applies to the employees composing the outside service force and in ordering that they be paid the
corresponding additional compensation.

With regard to the claim for night salary differentials, the industrial court found that claimants Magno
Johnson and Jose Sanchez worked with the respondent company during the period specified by them in
their testimony and that watchmen Zoilo Illiga, Inocentes Prescillas and Daniel Cayuca rendered night
duties once every three weeks continuously during the period of the employment and that they were
never given any additional compensation aside from their monthly regular salaries. The court found that
the company started paying night differentials only in January, 1949 but never before that time. And so
it ordered that the employees concerned be paid 25% additional compensation for those who worked
from 6:00 to 12:00 p.m. and 75% additional compensation for those who worked from 12:01 to 6: 00 in
the morning. It is now contended that this ruling is erroneous because an award for night shift
differentials cannot be given retroactive effect but can only be entertained from the date of demand
which was on January 27, 1953, citing in support thereof our ruling in Earnshaws Docks & Honolulu Iron
Works v. The Court of Industrial Relations, et al., L-8896, January 25, 1957.

This ruling, however, has no application here for it appears that before the filing of the petition
concerning this claim a similar one had already been filed long ago which had been the subject of
negotiations between the union and the company which culminated in a strike in 1952. Unfortunately,
however, the strike fizzled out and the strikers were ordered to return to work with the understanding
that the claim for night salary differentials should be settled in court. It is perhaps for this reason that
the court a quo  granted this claim in spite of the objection of the company to the contrary.

The remaining point to be determined refers to the claim for pay for Sundays and holidays for service
performed by some claimants who were watchmen or security guards. It is contended that these
employees are not entitled to extra pay for work done during these days because they are paid on a
monthly basis and are given one day off which may take the place of the work they may perform either
on Sunday or any holiday.

We disagree with this claim because it runs counter to law. Section 4 of Commonwealth Act No. 444
expressly provides that no person, firm or corporation may compel an employee or laborer to work
during Sundays and legal holidays unless he is paid an additional sum of 25% of his regular
compensation. This proviso is mandatory, regardless of the nature of compensation. The only exception
is with regard to public utilities who perform some public service.

WHEREFORE, the decision of the industrial court is hereby modified as follows: 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.

Bengzon, C.J., Labrador, Concepcion, Reyes, J.B.L., Barrera, Paredes, Dizon, Regala and Makalintal, JJ.,
concur.
Padilla, J., took no part.

EN BANC

G.R. No. 79255 January 20, 1992

UNION OF FILIPRO EMPLOYEES (UFE), petitioner, vs. BENIGNO VIVAR, JR., NATIONAL LABOR
RELATIONS COMMISSION and NESTLÉ PHILIPPINES, INC. (formerly FILIPRO, INC.), respondents.

Jose C. Espinas for petitioner.

Siguion Reyna, Montecillo & Ongsiako for private respondent.

GUTIERREZ, JR., J.:

This labor dispute stems from the exclusion of sales personnel from the holiday pay award and the
change of the divisor in the computation of benefits from 251 to 261 days.

On November 8, 1985, respondent Filipro, Inc. (now Nestle Philippines, Inc.) filed with the National
Labor Relations Commission (NLRC) a petition for declaratory relief seeking a ruling on its rights and
obligations respecting claims of its monthly paid employees for holiday pay in the light of the Court's
decision in Chartered Bank Employees Association v.  Ople (138 SCRA 273 [1985]).

Both Filipro and the Union of Filipino Employees (UFE) agreed to submit the case for voluntary
arbitration and appointed respondent Benigno Vivar, Jr. as voluntary arbitrator.

On January 2, 1980, Arbitrator Vivar rendered a decision directing Filipro to:

pay its monthly paid employees holiday pay pursuant to Article 94 of the Code, subject only to the
exclusions and limitations specified in Article 82 and such other legal restrictions as are provided for in
the Code. (Rollo,
p. 31)

Filipro filed a motion for clarification seeking (1) the limitation of the award to three years, (2)
the exclusion of salesmen, sales representatives, truck drivers, merchandisers and medical
representatives (hereinafter referred to as sales personnel) from the award of the holiday pay, and (3)
deduction from the holiday pay award of overpayment for overtime, night differential, vacation and sick
leave benefits due to the use of 251 divisor. (Rollo, pp. 138-145)

Petitioner UFE answered that the award should be made effective from the date of effectivity of the
Labor Code, that their sales personnel are not field personnel and are therefore entitled to holiday pay,
and that the use of 251 as divisor is an established employee benefit which cannot be diminished.

On January 14, 1986, the respondent arbitrator issued an order declaring that the effectivity of the
holiday pay award shall retroact to November 1, 1974, the date of effectivity of the Labor Code. He
adjudged, however, that the company's sales personnel are field personnel and, as such, are not entitled
to holiday pay. He likewise ruled that with the grant of 10 days' holiday pay, the divisor should be
changed from 251 to 261 and ordered the reimbursement of overpayment for overtime, night
differential, vacation and sick leave pay due to the use of 251 days as divisor.

Both Nestle and UFE filed their respective motions for partial reconsideration. Respondent Arbitrator
treated the two motions as appeals and forwarded the case to the NLRC which issued a resolution dated
May 25, 1987 remanding the case to the respondent arbitrator on the ground that it has no jurisdiction
to review decisions in voluntary arbitration cases pursuant to Article 263 of the Labor Code as amended
by Section 10, Batas Pambansa Blg. 130 and as implemented by Section 5 of the rules implementing B.P.
Blg. 130.

However, in a letter dated July 6, 1987, the respondent arbitrator refused to take cognizance of the case
reasoning that he had no more jurisdiction to continue as arbitrator because he had resigned from
service effective May 1, 1986.

Hence, this petition.

The petitioner union raises the following issues:

1) Whether or not Nestle's sales personnel are entitled to holiday pay; and

2) Whether or not, concomitant with the award of holiday pay, the divisor should be changed from 251
to 261 days and whether or not the previous use of 251 as divisor resulted in overpayment for overtime,
night differential, vacation and sick leave pay.
The petitioner insists that respondent's sales personnel are not field personnel under Article 82 of the
Labor Code. The respondent company controverts this assertion.

Under Article 82, field personnel are not entitled to holiday pay. Said article defines field personnel as
"non-agritultural employees who regularly perform their duties away from the principal place of
business or branch office of the employer and whose actual hours of work in the field cannot be
determined with reasonable certainty."

The controversy centers on the interpretation of the clause "whose actual hours of work in the field
cannot be determined with reasonable certainty."

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
personnel's 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.

We concur with the following disquisition by the respondent arbitrator:

The requirement for the salesmen and other similarly situated employees to report for work at the
office at 8:00 a.m. and return at 4:00 or 4:30 p.m. is not within the realm of work in the field as defined
in the Code but an exercise of purely management prerogative of providing administrative control over
such personnel. This does not in any manner provide a reasonable level of determination on the actual
field work of the employees which can be reasonably ascertained. The theoretical analysis that salesmen
and other similarly-situated workers regularly report for work at 8:00 a.m. and return to their home
station at 4:00 or 4:30 p.m., creating the assumption that their field work is supervised, is surface
projection. Actual field work begins after 8:00 a.m.,  when the sales personnel follow their field itinerary,
and ends immediately before 4:00 or 4:30 p.m. when they report back to their office. The period
between 8:00 a.m. and 4:00 or 4:30 p.m. comprises their hours of work in the field, the extent or scope
and result of which are subject to their individual capacity and industry and which "cannot be
determined with reasonable certainty." This is the reason why effective supervision over field work of
salesmen and medical representatives, truck drivers and merchandisers is practically a physical
impossibility. Consequently, they are excluded from the ten holidays with pay award. (Rollo, pp. 36-37)

Moreover, the requirement that "actual hours of work in the field cannot be determined with
reasonable certainty" must be read in conjunction with Rule IV, Book III of the Implementing Rules
which provides:

Rule IV Holidays with Pay

Sec. 1. Coverage — This rule shall apply to all employees except:

xxx xxx xxx

(e) Field personnel and other employees whose time and performance is unsupervised by the
employer . . . (Emphasis supplied)

While contending that such rule added another element not found in the law (Rollo, p. 13), the
petitioner nevertheless attempted to show that its affected members are not covered by the
abovementioned rule. The petitioner asserts that the company's sales personnel are strictly supervised
as shown by the SOD (Supervisor of the Day) schedule and the company circular dated March 15, 1984
(Annexes 2 and 3, Rollo, pp. 53-55).

Contrary to the contention of the petitioner, the Court finds that the aforementioned rule did not add
another element to the Labor Code definition of field personnel. The clause "whose time and
performance is unsupervised by the employer" did not amplify but merely 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.
Hence, in deciding whether or not an employee's actual working hours in the field can be determined
with reasonable certainty, query must be made as to whether or not such employee's time and
performance is constantly supervised by the employer.

The SOD schedule adverted to by the petitioner does not in the least signify that these sales personnel's
time and performance are supervised. The purpose of this schedule is merely to ensure that the sales
personnel are out of the office not later than 8:00 a.m. and are back in the office not earlier than 4:00
p.m.

Likewise, the Court fails to see how the company can monitor the number of actual hours spent in field
work by an employee through the imposition of sanctions on absenteeism contained in the company
circular of March 15, 1984.

The petitioner claims that the fact that these sales personnel are given incentive bonus every quarter
based on their performance is proof that their actual hours of work in the field can be determined with
reasonable certainty.

The Court thinks otherwise.

The criteria for granting incentive bonus are: (1) attaining or exceeding sales volume based on sales
target; (2) good collection performance; (3) proper compliance with good market hygiene; (4) good
merchandising work; (5) minimal market returns; and (6) proper truck maintenance. (Rollo, p. 190).

The above criteria indicate that these sales personnel are given incentive bonuses precisely because of
the difficulty in measuring their actual hours of field work. These employees are evaluated by the result
of their work and not by the actual hours of field work which are hardly susceptible to determination.

In San Miguel Brewery, Inc.  v.  Democratic Labor Organization  (8 SCRA 613 [1963]), the Court had
occasion to discuss the nature of the job of a salesman. Citing the case of Jewel Tea
Co.  v.  Williams,  C.C.A. Okla.,  118 F. 2d 202, the Court stated:

The reasons for excluding an outside salesman are fairly apparent. Such a salesman, to a greater extent,
works individually. There are no restrictions respecting the time he shall work and he can earn as much
or as little, within the range of his ability, as his ambition dictates. In lieu of overtime he ordinarily
receives commissions as extra compensation. He works away from his employer's place of business, is
not subject to the personal supervision of his employer, and his employer has no way of knowing the
number of hours he works per day.

While in that case the issue was whether or not salesmen were entitled to overtime pay, the same
rationale for their exclusion as field personnel from holiday pay benefits also applies.

The petitioner union also assails the respondent arbitrator's ruling that, concomitant with the award of
holiday pay, the divisor should be changed from 251 to 261 days to include the additional 10 holidays
and the employees should reimburse the amounts overpaid by Filipro due to the use of 251 days'
divisor.

Arbitrator Vivar's rationale for his decision is as follows:

. . . The new doctrinal policy established which ordered payment of ten holidays certainly adds to or
accelerates the basis of conversion and computation by ten days. With the inclusion of ten holidays as
paid days, the divisor is no longer 251 but 261 or 262 if election day is counted. This is indeed an
extremely difficult legal question of interpretation which accounts for what is claimed as falling within
the concept of "solutio indebti."

When the claim of the Union for payment of ten holidays was granted, there was a consequent need to
abandon that 251 divisor. To maintain it would create an impossible situation where the employees
would benefit with additional ten days with pay but would simultaneously enjoy higher benefits by
discarding the same ten days for purposes of computing overtime and night time services and
considering sick and vacation leave credits. Therefore, reimbursement of such overpayment with the
use of 251 as divisor arises concomitant with the award of ten holidays with pay. (Rollo, p. 34)

The divisor assumes an important role in determining whether or not holiday pay is already included in
the monthly paid employee's salary and in the computation of his daily rate. This is the thrust of our
pronouncement in Chartered Bank Employees Association v. Ople (supra). In that case, We held:

It is argued that even without the presumption found in the rules and in the policy instruction, the
company practice indicates that the monthly salaries of the employees are so computed as to include
the holiday pay provided by law. The petitioner contends otherwise.

One strong argument in favor of the petitioner's stand is the fact that the Chartered Bank, in computing
overtime compensation for its employees, employs a "divisor" of 251 days. The 251 working days divisor
is the result of subtracting all Saturdays, Sundays and the ten (10) legal holidays from the total number
of calendar days in a year. If the employees are already paid for all non-working days, the divisor should
be 365 and not 251.

In the petitioner's case, its computation of daily ratio since September 1, 1980, is as follows:

monthly rate x 12 months

———————————

251 days
Following the criterion laid down in the Chartered Bank case, the use of 251 days' divisor by respondent
Filipro indicates that holiday pay is not yet included in the employee's salary, otherwise the divisor
should have been 261.

It must be stressed that the daily rate, assuming there are no intervening salary increases, is a constant
figure for the purpose of computing overtime and night differential pay and commutation of sick and
vacation leave credits. Necessarily, the daily rate should also be the same basis for computing the 10
unpaid holidays.

The respondent arbitrator's order to change the divisor from 251 to 261 days would result in a lower
daily rate which is violative of the prohibition on non-diminution of benefits found in Article 100 of the
Labor Code. To maintain the same daily rate if the divisor is adjusted to 261 days, then the dividend,
which represents the employee's annual salary, should correspondingly be increased to incorporate the
holiday pay. To illustrate, if prior to the grant of holiday pay, the employee's annual salary is P25,100,
then dividing such figure by 251 days, his daily rate is P100.00 After the payment of 10 days' holiday pay,
his annual salary already includes holiday pay and totals P26,100 (P25,100 + 1,000). Dividing this by 261
days, the daily rate is still P100.00. There is thus no merit in respondent Nestle's claim of overpayment
of overtime and night differential pay and sick and vacation leave benefits, the computation of which are
all based on the daily rate, since the daily rate is still the same before and after the grant of holiday pay.

Respondent Nestle's invocation of solutio indebiti, or payment by mistake, due to its use of 251 days as
divisor must fail in light of the Labor Code mandate that "all doubts in the implementation and
interpretation of this Code, including its implementing rules and regulations, shall be resolved in favor of
labor." (Article 4). Moreover, prior to September 1, 1980, when the company was on a 6-day working
schedule, the divisor used by the company was 303, indicating that the 10 holidays were likewise not
paid. When Filipro shifted to a 5-day working schebule on September 1, 1980, it had the chance to
rectify its error, if ever there was one but did not do so. It is now too late to allege payment by mistake.

Nestle also questions the voluntary arbitrator's ruling that holiday pay should be computed from
November 1, 1974. This ruling was not questioned by the petitioner union as obviously said decision was
favorable to it. Technically, therefore, respondent Nestle should have filed a separate petition raising
the issue of effectivity of the holiday pay award. This Court has ruled that an appellee who is not an
appellant may assign errors in his brief where his purpose is to maintain the judgment on other grounds,
but he cannot seek modification or reversal of the judgment or affirmative relief unless he has also
appealed. (Franco v. Intermediate Appellate Court, 178 SCRA 331 [1989], citing La Campana Food
Products, Inc. v. Philippine Commercial and Industrial Bank, 142 SCRA 394 [1986]). Nevertheless, in
order to fully settle the issues so that the execution of the Court's decision in this case may not be
needlessly delayed by another petition, the Court resolved to take up the matter of effectivity of the
holiday pay award raised by Nestle.

Nestle insists that the reckoning period for the application of the holiday pay award is 1985 when
the Chartered Bank decision, promulgated on August 28, 1985, became final and executory, and not
from the date of effectivity of the Labor Code. Although the Court does not entirely agree with Nestle,
we find its claim meritorious.

In Insular Bank of Asia and America Employees' Union (IBAAEU) v.  Inciong, 132 SCRA 663 [1984],
hereinafter referred to as the IBAA case, the Court declared that Section 2, Rule IV, Book III of the
implementing rules and Policy Instruction No. 9, issued by the then Secretary of Labor on February 16,
1976 and April 23, 1976, respectively, and which excluded monthly paid employees from holiday pay
benefits, are null and void. The Court therein reasoned that, in the guise of clarifying the Labor Code's
provisions on holiday pay, the aforementioned implementing rule and policy instruction amended them
by enlarging the scope of their exclusion. The  Chartered Bank case reiterated the above ruling and
added the "divisor" test.

However, prior to their being declared null and void, the implementing rule and policy instruction
enjoyed the presumption of validity and hence, Nestle's non-payment of the holiday benefit up to the
promulgation of the IBAA case on October 23, 1984 was in compliance with these presumably valid rule
and policy instruction.

In the case of De Agbayani v.  Philippine National Bank, 38 SCRA 429 [1971], the Court discussed the
effect to be given to a legislative or executive act subsequently declared invalid:

xxx xxx xxx

. . . It does not admit of doubt that prior to the declaration of nullity such challenged legislative or
executive act must have been in force and had to be complied with. This is so as until after the judiciary,
in an appropriate case, declares its invalidity, it is entitled to obedience and respect. Parties may have
acted under it and may have changed their positions. What could be more fitting than that in a
subsequent litigation regard be had to what has been done while such legislative or executive act was in
operation and presumed to be valid in all respects. It is now accepted as a doctrine that prior to its being
nullified, its existence as a fact must be reckoned with. This is merely to reflect awareness that precisely
because the judiciary is the government organ which has the final say on whether or not a legislative or
executive measure is valid, a period of time may have elapsed before it can exercise the power of
judicial review that may lead to a declaration of nullity. It would be to deprive the law of its quality of
fairness and justice then, if there be no recognition of what had transpired prior to such adjudication.

In the language of an American Supreme Court decision: "The actual existence of a statute, prior to such
a determination of [unconstitutionality], is an operative fact and may have consequences which cannot
justly be ignored. The past cannot always be erased by a new judicial declaration. The effect of the
subsequent ruling as to invalidity may have to be considered in various aspects, — with respect to
particular relations, individual and corporate, and particular conduct, private and official." (Chicot
County Drainage Dist. v. Baxter States Bank, 308 US 371, 374 [1940]). This language has been quoted
with approval in a resolution in  Araneta v.  Hill (93 Phil. 1002 [1952]) and the decision in Manila Motor
Co., Inc.  v.  Flores (99 Phil. 738 [1956]). An even more recent instance is the opinion of Justice Zaldivar
speaking for the Court in Fernandez v.  Cuerva and Co. (21 SCRA 1095 [1967]. (At pp. 434-435)

The "operative fact" doctrine realizes that in declaring a law or rule null and void, undue harshness and
resulting unfairness must be avoided. It is now almost the end of 1991. To require various companies to
reach back to 1975 now and nullify acts done in good faith is unduly harsh. 1984 is a fairer reckoning
period under the facts of this case.

Applying the aforementioned doctrine to the case at bar, it is not far-fetched that Nestle, relying on the
implicit validity of the implementing rule and policy instruction before this Court nullified them, and
thinking that it was not obliged to give holiday pay benefits to its monthly paid employees, may have
been moved to grant other concessions to its employees, especially in the collective bargaining
agreement. This possibility is bolstered by the fact that respondent Nestle's employees are among the
highest paid in the industry. With this consideration, it would be unfair to impose additional burdens on
Nestle when the non-payment of the holiday benefits up to 1984 was not in any way attributed to
Nestle's fault.

The Court thereby resolves that the grant of holiday pay be effective, not from the date of promulgation
of the Chartered Bank case nor from the date of effectivity of the Labor Code, but from October 23,
1984, the date of promulgation of the  IBAA case.

WHEREFORE, the order of the voluntary arbitrator in hereby MODIFIED. The divisor to be used in
computing holiday pay shall be 251 days. The holiday pay as above directed shall be computed from
October 23, 1984. In all other respects, the order of the respondent arbitrator is hereby AFFIRMED.

SO ORDERED.

Narvasa, C.J., Melencio-Herrera, Paras, Feliciano, Padilla, Bidin, Medialdea, Griño-Aquino, Regalado,
Davide, Jr. and Romero, JJ., concur.

Cruz and Nocon, JJ., took no part.

EN BANC

G.R. No. L-21348             June 30, 1966

RED V COCONUT PRODUCTS, LTD., petitioner, vs. COURT OF INDUSTRIAL RELATIONS, TANGLAW NG

PAGGAWA, ALBERTO DELA CRUZ, ET AL., respondents.

Romeo A. Real for petitioner.

A. V. Villacorta for respondents.

BENGZON, J.P., J.:

Red V Coconut Products, Ltd. is a corporation with principal office and place of business at Lucena City. It
has in that city a desiccated coconut factory. In said factory, it has several hundred workers. About 800
of said workers are members of Tanglaw ng Paggawa labor union.

Tanglaw ng Paggawa and Red V Coconut Products, Ltd. entered into a collective bargaining agreement
on July 15, 1958. Subsequently, however, on October 5, 1961, the aforementioned company and union
entered into another collective bargaining agreement, to expire on October 31, 1965.

The 1958 collective bargaining agreement provided among other things for payment of differentials
to night shift workers in the desiccated coconut factory.1äwphï1.ñët

The 1961 collective bargaining agreement retained the same arrangement. It stated:
The present shift differential will remain in effect, namely, 35¢ for the second shift and 55¢ for the third
Shift.

In the factory, there are two groups of workers, the three-shift group — let us call it Group A — and the
two — shift group — which we shall call Group B. As observed by the parties thereto, differentials were
paid to workers, under the 1958 and 1961 contracts, thus:

Hours of Work Differentials

Group A — 1st shift 4 A.M. — 12 Noon (8 Hrs.) None

2nd shift 12 Noon — 8 P.M. (8 Hrs.) .35

3rd shift 8 P.M. — 4 A.M. (8 Hrs.) .55

Group B — 1st shift 4 A.M. — 4 P.M. (12 Hrs.) None

2nd shift 4 P.M. — 4 A.M. (12 Hrs.) .55

On January 17, 1962, Tanglaw ng Paggawa and some 300 workers in the above-stated factory,
members of the said union, who belong to Group B, filed a petition in the Court of Industrial Relations.
Petitioners therein alleged that the petitioners-workers are shellers, parers, counters and haulers in the
two shifts (Group B) consisting of 12 hours each shift, the first shift from 4: 00 A.M. to 4: 00 P.M. and the
second shift from 4 P.M. to 4 A.M.; that said workers change shift assignments every week; that,
accordingly, all of them work from 4 A.M. to 4 P.M. (first shift) for two alternate weeks per month and
from 4 P.M. to 4 A.M. (second shift) likewise for two alternate weeks in a month; that although said
workers perform work from 4 P.M. to 4 A.M., they receive only P.55 differential pay for the
corresponding hours of night work; that their nightwork is equivalent to the nightwork of the 2nd and
3rd shifts of Group A combined, so that they should receive what the 2nd and 3rd shifts of Group A,
combined, receive as differential pay, namely, P.90 (P.75 plus P.35); that, therefore, they are entitled to
payment of P.35 more as differential pay, since up to the time of the petition, they received only P.55
per night as differential pay.

Said additional P.35 was asked by the petitioners-workers of Group B f or work done by them from 4
P.M. to 4 A.M. Their claim referred to the time from July 15, 1958 to the date of the petition, allegedly at
P186.90 per sheller, parer, counter and hauler, or a total sum of P65,228.10 more or less.

Respondent company therein filed on January 28, 1962 a motion to dismiss, stating that the Court of
Industrial Relations has no jurisdiction over the case for the reason that the claim asserted in the
petition is a simple money claim and that an interpretation of a contract (the collective bargaining
agreement is involved, which pertains to the regular courts.

The Court of Industrial Relations denied said motion by resolution of February 17, 1962 ruling that the
claim is for unpaid overtime pay of laborers still employed by the company. Said court likewise denied a
motion for reconsideration of the resolution. Red V Coconut Products, Ltd. filed its answer on May 2,
1962.
In the meanwhile, on April 25, 1962, Tanglaw ng Paggawa filed with the Court of Industrial Relations a
new and independent petition alleging unfair labor practice against Red V Coconut Products, Ltd. (CIR
Case No. 3150 ULP). It was asserted therein that the company refused to grant 15 days leave with pay to
the members of the union in violation of the 1961 collective bargaining agreement.

The Court of Industrial Relations, on January 19, 1963 after trial, rendered its decision on the petition for
differential pay (CIR Case No. 1642-V). It found therein that the petitioners-workers are engaged
on  pakiao or piece-work basis, and, therefore, are not entitled to overtime pay under the Eight-Hour
Labor Law (Sec. 2, CA 444); that their petition for night shift differentials based on the collective
bargaining agreements is meritorious because the company having paid night differentials
indiscriminately to the night shift workers of Group A and Group B alike, the payments should be
uniform and equal for the night shifts of both groups, that is, P.90. It therefore ordered payment of the
deficiency in said differentials to the workers of Group B.

Red V Coconut Products, Ltd. moved for reconsideration of said decision on January 29, 1963. The Court
of Industrial Relations en banc denied said motion by resolution of February 25, 1963. And, hence, Red V
Coconut Products, Ltd. filed this petition for review herein.

Petitioner herein contends that the present case involves a mere money claim over which the Court of
Industrial Relations has no jurisdiction.1

It is exiomatic that to determine the issue of jurisdiction resort is to be made to the allegations in the
petition or complaint.2 The petition for shift differential in the present case, it is true, did not expressly
mention the Eight-Hour Labor Law. Nonetheless, it clearly asserted that (1) petitioners-laborers "are
working in the Red V Coconut Products, Ltd." and (2) they "work in two (2) shifts (Blue and Red shifts)
consisting of approximately 12 hours each shift." Accordingly, from the said allegations, it is proper to
regard the petition, as the Court of Industrial Relations did, as one for overtime pay by workers still
employed by the company. As such it falls within the jurisdiction of the Court of Industrial Relations. For
the same is in effect an assertion not of a simple money claim but, as respondent court rightly held, of a
claim for overtime pay by workers who are employees of the company. 3

During the trial, as stated, evidence was adduced to the effect that the aforesaid petitioners-workers
were engaged on a piece-work basis. The same, however, does not appear from the petition or
complaint filed with the respondent court. It therefore cannot affect its jurisdiction over the case, which
was already acquired. For jurisdiction, once acquired, continues until final adjudication of the litigation. 4

Furthermore, although the Eight-Hour Labor Law provides that it does not cover those workers who
prefer to be paid on piece-work basis (Sec. 2, CA 444), nothing in said law precludes an agreement for
the payment of overtime compensation to piece-workers. And in agreeing to the provision for payment
of shift differentials to the petitioners-workers aforementioned, in the bargaining agreement, as well as
in actually paying to them said differentials, though not in full, the company in effect freely adhered to
an application and implementation of the Eight-Hour Labor Law, or its objectives, to said workers. It
should be observed that while the provision in the bargaining agreements speaks of shift differentials for
the "second shift" and the "third shift" and Group B has no third shift, said Group B has a second shift,
which performs work equivalent to that of the corresponding shifts of Group A. It follows that
respondent court did not err in ordering the company to pay the full and equivalent amount of said
differentials (P.90) corresponding, under the bargaining agreements, to the workers who performed 12
hours of work, from 4 P.M. to 4 A.M.

And, finally, the laborers in question are not strictly under the full concept of piece-workers as
contemplated by law for the reason that their hours of work — that is, 12 hours per shift — are fixed by
the employer. As ruled by this Court in Lara v. Del Rosario, 94 Phil. 780, 781-782, the philosophy
underlying the exclusion of piece workers from the Eight-Hour Labor Law is that said workers are paid
depending upon the work they do "irrespective of the amount of time employed" in doing said work.
Such freedom as to hours of work does not obtain in the case of the laborers herein involved, since they
are assigned by the employer to work in two shifts for 12 hours each shift. Thus it cannot be said that for
all purposes these workers fall outside the law requiring payment of compensation for work done in
excess of eight hours. At least for the purpose of recovering the full differential pay stipulated in the
bargaining agreement as due to laborers who perform 12 hours of work under the night shift, said
laborers should be deemed  pro tanto or to that extent within the scope of the afore-stated law.

Wherefore, the decision and resolution of the Court of Industrial Relations under review are affirmed. So
ordered.

Concepcion, C.J., Reyes, J.B.L., Barrera, Dizon, Regala, Makalintal, Zaldivar and Sanchez, JJ., concur.

EN BANC

G.R. No. L-21675             May 23, 1967

NATIONAL SHIPYARDS AND STEEL CORPORATION, petitioner, vs. COURT OF INDUSTRIAL RELATIONS

AND DOMINGO DE JESUS, respondents.

Vitaliano T. Estacio for petitioner.

Cipriano Cid and Associates for respondents.

ZALDIVAR, J.:

This is a petition for certiorari, filed by the National Shipyards and Steel Corporation (hereinafter
referred to as NASSCO) to review: (1) the order of Judge Arsenic I. Martinez of the Court of Industrial
Relations (herein after referred to as CIR) dated July 30, 1962 denying the motion to dismiss the
complaint of respondent Domingo de Jesus; (2) the decision of Judge Martinez dated March 12, 1963;
and (3) the resolution of the CIR en banc  dated May 24, 1963 denying petitioner's motion for
reconsideration of the decision of Judge Martinez. The orders and decision, therein mentioned, are
incidents in CIR Case No. 1674-V.

On March 21, 1962, respondent Domingo de Jesus filed a complaint with the CIR alleging, among other
things, that he was employed as welder by the NASSCO since its initial operation, with a daily wage of
P9.02; that he had rendered overtime services for which he was not paid; and that on October 14, 1960,
he was suspended from his employment for three months but when he reported for work after the
suspension the NASSCO refused to reinstate him, hence he prayed that he be reinstated to his former
employment with back wages and that he be paid his overtime compensation.

On April 6, 1962, the NASSCO filed its answer denying the material allegations of the complaint and
setting up special defenses, to wit: (1) that the Court of Industrial Relations has no jurisdiction over the
case; (2) that the complaint states no cause of action; (3) that the action is already barred by laches or
prescription; and (4) that the dismissal of De Jesus was legal and done through due process. Later, or on
June 20, 1962, the NASSCO moved for the dismissal of the complaint upon the first three grounds
aforestated, which motion was denied by Associate Judge Arsenio I. Martinez in his order dated July 30,
1962.

At the trial, De Jesus certified that he had been employed by the NASSCO as a welder since 1937; that on
October 14, 1960, he received a memorandum requiring him to explain within 72 hours why no
administrative action should be taken against him for having taken welding rods in his locker; that after
making his explanation his case was set for hearing; that at the which lasted for only five minutes the
investigator, Atty. Abundio Macalingcag, only reprimanded him and he was not given a chance to explain
his side; that later he came to know through his union president that said investigator recommended his
one-month suspension; that after one month he reported for work but the president of his union told
him to wait for the decision of the General Manager of the NASSCO; that thereafter he learned from the
manager that he was suspended 90 days; that after the lapsed of the 90-day period he again reported
for work but the management did not accept him, that Atty. Macalingcag advised him to wait for the
decision of the Board of Directors; that he returned to the NASSCO after six months from the date of his
suspension and he was informed that he was already dismissed from the service. De Jesus further
testified that from June to September, 1960, he was required to work overtime because there were
plenty of work; and that he had actually worked 20 hours overtime a month for which he was only paid
12 hours, leaving a monthly balance of 8 hours unpaid, or 32 hours for four months from June to
September, 1960.

Petitioner NASSCO, on the other hand, presented as its sole witness Atty. Abundio Macalingcag who
testified that it was he who investigated the administrative case against De Jesus; that on the date of the
hearing, October 27, 1960, he apprised De Jesus of his right to be represented by counsel but that De
Jesus told him that the service of the president of their union was enough; that this notwithstanding the
investigator appointed Atty. Augusto Trinidad to act as counsel de oficio for him; that after the
investigation he (Atty. Macalingcag) submitted his report to the Board of Directors finding De Jesus guilty
of the charge. This witness, however, did not touch on, nor refute, the testimony of De Jesus on his
claim for overtime pay.

On March 12, 1963, Judge Arsenio I. Martinez rendered a decision finding the dismissal of respondent
De Jesus illegal or without just cause, and ordered his reinstatement, and the payment to him of the
additional amount equivalent to 25% of his daily wage of P9.02, as overtime compensation for 32 hours
covering the period from June to September, 1960. NASSCO's motion for reconsideration of the decision
of Judge Martinez having been denied by the CIR en banc, it interposed the present petition for review
raising issues which may be consolidated as follows: (1) whether the CIR has jurisdiction to take
cognizance of the case; (2) whether the action of respondent De Jesus for reinstatement had already
prescribed, or had been barred by laches; and (3) whether the CIR erred in awarding overtime
compensation to said respondent.
Petitioner questions the jurisdiction of the CIR over this case upon the ground that although respondent
had asked for reinstatement the case does not relate to violation of the Minimum Wage Law, or Eight-
Hour Labor Law, or unfair labor practice. We find this contention untenable for it misses the doctrine
laid down in the Prisco case,1 as amplified in the case of Campos, et al. v. Manila Railroad Company, et
al., L-17905, May 25, 1962, wherein this Court held:

We may, therefore, restate, for the benefit of the bench and the bar, that in order that the Court of
Industrial Relations may acquire jurisdiction over a controversy in the light of Republic Act No. 875, the
following circumstances must be present: (a) there must exist between the parties an employer-
employee relationship, or claimant must seek his reinstatement; and (b) the controversy must relate to
a case certified by the President to the C.I.R. as one involving national interest, or must have a bearing
on an unfair labor practice charge, or must arise either under the Eight-Hour Labor Law, or under the
Minimum Wage Law. In default of any of these circumstances, the claim becomes a mere money claim
that comes under the jurisdiction of the regular courts.

In the case at bar, it is undisputed that petitioner merely seeks his reinstatement with back wages. He
does not claim any salary differential nor overtime pay that may make his case come either under the
Eight-Hour Labor Law or the Minimum Wage Law. Neither does he prefer any unfair labor practice
charge against his employer. Consequently, the Court of Industrial Relations has no power to act on his
claim for the same is a mere money claim that comes under the jurisdiction of the regular
courts.1äwphï1.ñët

And elucidating further, this Tribunal, in another case, declared:

A mere claim for reinstatement, therefore, does not suffice to bring a case within the jurisdiction of the
Court of Industrial Relations. It is necessary also that the case be one of the four enumerated cases as
amplified in the Campos case. Here, a reading of the allegations of the complaint shows that while
plaintiff-appellant seeks her reinstatement in the company, nothing is alleged therein to indicate that
plaintiff-appellant's dismissal from the service amounted to an unfair labor practice. Neither is it claimed
that this is a case certified by the President to the Court of Industrial Relations as involving national
interest . . . or a case arising under the Eight-Hour Labor Law, . . . or the Minimum Wage Law . . . .

For plaintiff-appellant merely seeks her reinstatement with back wages, the recovery of moral and
exemplary damages suffered as a result of allegedly malicious criminal actions filed against her at the
instance of defendant appellee; the recovery of her contributions to a pension and saving plan; and the
recovery of the money value of her accrued sick leave.

The Court of First Instance of Rizal erred therefore in holding that the case is cognizable by the Court of
Industrial Relations and in dismissing the case. (Barranta vs. International Harvester Company of the
Philippines, L-18198, April 22, 1963).

From the foregoing rulings it can be deduced that a mere action for reinstatement or one coupled with a
claim for back wages and or damages is not enough to confer jurisdiction upon the industrial court.
Neither should the claim for reinstatement be related to the Eight-Hour Labor Law or the Minimum
Wage Law, etc., as insinuated by petitioner, for what is required is that said action for reinstatement
must be accompanied by another claim arising out of the Minimum Wage Law or the Eight-Hour Labor
Law in order that the case would fall under the jurisdiction of the Court of Industrial Relations. The
court's jurisdiction over the subject matter of the litigation is determined by the allegations in the
complaint, and We find that the allegations in the complaint in the court below are sufficient to confer
jurisdiction to the CIR. Since in the instant case the complaint prayed for reinstatement of respondent
with payment of back wages and also for the payment of overtime compensation, the latter necessarily
involving the Eight-Hour Labor Law, following the rule enunciated in the aforecited cases, the CIR has
jurisdiction to hear and decide the case at bar. In the case of Serrano v. Serrano, et al., L-19562, May 23,
1964, this Court declared:

x x x It being settled that the Court of Industrial Relations has jurisdiction over claims for overtime
compensation when coupled with a prayer for reinstatement, it is clear that the satisfaction of the
unpaid wages may likewise be ordered incidentally to said jurisdiction (Gomez vs. North Camarines
Lumber Co., Inc., L-11945, August 18, 1958). 2

Having disposed of the first issue, the next question to be resolved is whether respondent De Jesus has
incurred in laches in seeking his reinstatement. It is not denied that respondent De Jesus, being a welder
of the NASSCO which is a corporation owned or controlled by the government, belongs to the
unclassified service and covered by the Civil Service Law. 3 It is also undisputed that he was separated
from the service as of October 14, 1960 and he instituted the present action for his reinstatement only
on March 21, 1962, or after the lapse of 17 months. Without ruling on whether or not the industrial
court could still modify or reverse the decision in the administrative case dismissing respondent, or
inquire and/or declare his dismissal with or without just cause, considering that said respondent filed
the present action for reinstatement more than one year from his removal from the service, We declare
that his action is now barred by laches. In the case of Alipio, et al. v. Rodriguez, et al., L-17336,
December 26, 1963, this Court held:

x x x In the case of Unabia vs. City Mayor of Cebu, et al., . . . we 'held that in view of the policy of the
State contained in the law fixing the period of one year within which actions for quo warranto may be
instituted, any person claiming right to a petition in the civil service should also be required to file his
petition for reinstatement within the period of one year, otherwise he is thereby considered as having
abandoned his office.' The defense of laches in the present case was therefore correctly sustained by the
lower court.

In the more recent case of Morales v. Patriarca, et al., L-21280, April 30, 1965, this Court held:

Petitioner, however, cannot be reinstated, since the present action for reinstatement is filed. more than
one year from his removal. As a public official in the service, he should have begun his court action for
reinstatement be it by quo warranto  or mandamus, within one year from his removal or separation,
otherwise his action is barred (Sec. 16, Rule 66, Rules of Court; Unabia vs. Mayor, 53 O.G., 132;
Velasquez vs. Gil, 53, O.G. 5615; Jose vs. Lacson, L-10477, May 17, 1957; Cuyo vs. City Mayor of Baguio,
L-9912, May 23, 1957; Abella vs. Rodriguez, 54 O.G. 2879; Erauda vs. Cramen, 54 O.G. 6253; Alipio vs.
Rodriguez, L-17336, December 26, 1963).

Anent the third issue raised in this appeal, we agree with the finding of the industrial court that
respondent De Jesus should be awarded overtime compensation equivalent to 25% of his daily wage of
P9.02 for 32 hours corresponding to the period from June to September, 1960. We quote the pertinent
part of the lower court's decision, as follows:
With respect to the first issue, it is opined that petitioner has rendered overtime services in respondent
corporation. From the evidence on record, it has been established that petitioner had rendered a total
of 20 hours overtime a month starting from June up to September, 1960. Out of these 20 hours a
month, he was only paid 12 hours a month thus leaving a balance of 8 hours unpaid per month. In other
words, petitioner had not been paid a total of 32 hours during the 4-month period in question. This fact
has been creditably portrayed in the direct and cross-examination of petitioner. No evidence was
introduced by respondent to deny or overcome such fact. Atty. Abundio Macalingcag, the only witness
presented by respondent, testified on the manner how the investigation of the administrative charge
against petitioner was conducted, without touching on petitioner's claim of overtime. In the absence of
any proof, testimonial or documentary, to contradict the overtime claim there is no plausible reason
why the Court should not grant petitioner's claim on the face of such situation, since the burden of proof
lies upon respondent to dispute such claim. In the light of the failure of respondent to adduce evidence
and/or deny such assertion, the inescapable conclusion is that petitioner truly rendered overtime
services on the aforestated period of time.

The foregoing findings of facts of the court a quo  are conclusive upon this Court.4

While We have ruled in this decision that the action of respondent De Jesus for reinstatement has been
barred, his action for the payment of overtime compensation is not barred. The record shows that said
respondent's right of action for payment of overtime pay accrued in October, 1960 and he filed his
complaint on March 21, 1962. An action to enforce a right under the Eight-Hour Labor Law can be
brought any time within three years after the cause of action accrued. 5

Wherefore, with the modification that respondent De Jesus should not be reinstated and not paid his
back wages, the decision and orders appealed from are affirmed in all other respects, without
pronouncement as to costs. It is so ordered.

Concepcion, C.J., Reyes, J.B.L., Dizon, Regala, Makalintal Bengzon, J.P., Sanchez and Castro, JJ., concur.

SECOND DIVISION

G.R. No. 78210 February 28, 1989

TEOFILO ARICA, DANILO BERNABE, MELQUIADES DOHINO, ABONDIO OMERTA, GIL TANGIHAN,
SAMUEL LABAJO, NESTOR NORBE, RODOLFO CONCEPCION, RICARDO RICHA, RODOLFO NENO,
ALBERTO BALATRO, BENJAMIN JUMAMOY, FERMIN DAAROL, JOVENAL ENRIQUEZ, OSCAR BASAL,
RAMON ACENA, JAIME BUGTAY, and 561 OTHERS, HEREIN REPRESENTED BY KORONADO B.
APUZEN, petitioners
vs.
NATIONAL LABOR RELATIONS COMMISSION, HONORABLE FRANKLIN DRILON, HONORABLE CONRADO
B. MAGLAYA, HONORABLE ROSARIO B. ENCARNACION, and STANDARD (PHILIPPINES) FRUIT
CORPORATION, respondents.
 Koronado B. Apuzen and Jose C. Espinas for petitioners.

The Solicitor General for public respondent.

Dominguez & Paderna Law Offices Co. for private respondent.

PARAS,  J.:

This is a petition for review on certiorari of the decision of the National Labor Relations Commission
dated December 12, 1986 in NLRC Case No. 2327 MC-XI-84 entitled Teofilo Arica et al. vs. Standard
(Phil.) Fruits Corporation (STANFILCO) which affirmed the decision of Labor Arbiter Pedro C. Ramos,
NLRC, Special Task Force, Regional Arbitration Branch No. XI, Davao City dismissing the claim of
petitioners.

This case stemmed from a complaint filed on April 9, 1984 against private respondent Stanfilco for
assembly time, moral damages and attorney's fees, with the aforementioned Regional Arbitration
Branch No. XI, Davao City.

After the submission by the parties of their respective position papers (Annex "C", pp. 30-40; Annex "D",
Rollo, pp. 41-50), Labor Arbiter Pedro C. Ramos rendered a decision dated October 9, 1985 (Annex 'E',
Rollo, pp. 51-58) in favor of private respondent STANFILCO, holding that:

Given these facts and circumstances, we cannot but agree with respondent that the pronouncement in
that earlier case, i.e. the thirty-minute assembly time long practiced cannot be considered waiting time
or work time and, therefore, not compensable, has become the law of the case which can no longer be
disturbed without doing violence to the time- honored principle of res-judicata.

WHEREFORE, in view of the foregoing considerations, the instant complaint should therefore be, as it is
hereby, DISMISSED.

SO ORDERED. (Rollo, p. 58)

On December 12, 1986, after considering the appeal memorandum of complainant and the opposition
of respondents, the First Division of public respondent NLRC composed of Acting Presiding
Commissioner Franklin Drilon, Commissioner Conrado Maglaya, Commissioner Rosario D. Encarnacion as
Members, promulgated its Resolution, upholding the Labor Arbiters' decision. The Resolution's
dispositive portion reads:

'Surely, the customary functions referred to in the above- quoted provision of the agreement includes
the long-standing practice and institutionalized non-compensable assembly time. This, in effect,
estopped complainants from pursuing this case.

The Commission cannot ignore these hard facts, and we are constrained to uphold the dismissal and
closure of the case.

WHEREFORE, let the appeal be, as it is hereby dismissed, for lack of merit.

SO ORDERED. (Annex "H", Rollo, pp. 86-89).

On January 15, 1987, petitioners filed a Motion for Reconsideration which was opposed by private
respondent (Annex "I", Rollo, pp. 90-91; Annex J Rollo, pp. 92-96).

Public respondent NLRC, on January 30, 1987, issued a resolution denying for lack of merit petitioners'
motion for reconsideration (Annex "K", Rollo, p. 97).

Hence this petition for review on certiorari filed on May 7, 1987.

The Court in the resolution of May 4, 1988 gave due course to this petition.

Petitioners assign the following issues:

1) Whether or not the 30-minute activity of the petitioners before the scheduled working time is
compensable under the Labor Code.

2) Whether or not res judicata applies when the facts obtaining in the prior case and in the case at bar
are significantly different from each other in that there is merit in the case at bar.

3) Whether or not there is finality in the decision of Secretary Ople in view of the compromise
agreement novating it and the withdrawal of the appeal.

4) Whether or not estoppel and laches lie in decisions for the enforcement of labor standards (Rollo, p.
10).

Petitioners contend that the preliminary activities as workers of respondents STANFILCO in the assembly
area is compensable as working time (from 5:30 to 6:00 o'clock in the morning) since these preliminary
activities are necessarily and primarily for private respondent's benefit.

These preliminary activities of the workers are as follows:

(a) First there is the roll call. This is followed by getting their individual work assignments from the
foreman.

(b) Thereafter, they are individually required to accomplish the Laborer's Daily Accomplishment Report
during which they are often made to explain about their reported accomplishment the following day.

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

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

All these activities take 30 minutes to accomplish (Rollo, Petition, p. 11).

Contrary to this contention, respondent avers that the instant complaint is not new, the very same claim
having been brought against herein respondent by the same group of rank and file employees in the
case of Associated Labor Union and Standard Fruit Corporation, NLRC Case No. 26-LS-XI-76 which was
filed way back April 27, 1976 when ALU was the bargaining agent of respondent's rank and file workers.
The said case involved a claim for "waiting time", as the complainants purportedly were required to
assemble at a designated area at least 30 minutes prior to the start of their scheduled working hours "to
ascertain the work force available for the day by means of a roll call, for the purpose of assignment or
reassignment of employees to such areas in the plantation where they are most needed." (Rollo, pp. 64-
65)
Noteworthy is the decision of the Minister of Labor, on May 12, 1978 in the aforecited case (Associated
Labor Union vs. Standard (Phil.) Fruit Corporation, NLRC Case No. 26-LS-XI-76 where significant findings
of facts and conclusions had already been made on the matter.

The Minister of Labor held:

The thirty (30)-minute assembly time long practiced and institutionalized by mutual consent of the
parties under Article IV, Section 3, of the Collective Bargaining Agreement cannot be considered as
waiting time within the purview of Section 5, Rule I, Book III of the Rules and Regulations Implementing
the Labor Code. ...

Furthermore, the thirty (30)-minute assembly is a deeply- rooted, routinary practice of the employees,
and the proceedings attendant thereto are not infected with complexities as to deprive the workers the
time to attend to other personal pursuits. They are not new employees as to require the company to
deliver long briefings regarding their respective work assignments. Their houses are situated right on the
area where the farm are located, such that after the roll call, which does not necessarily require the
personal presence, they can go back to their houses to attend to some chores. In short, they are not
subject to the absolute control of the company during this period, otherwise, their failure to report in
the assembly time would justify the company to impose disciplinary measures. The CBA does not
contain any provision to this effect; the record is also bare of any proof on this point. This, therefore,
demonstrates the indubitable fact that the thirty (30)-minute assembly time was not primarily intended
for the interests of the employer, but ultimately for the employees to indicate their availability or non-
availability for work during every working day. (Annex "E", Rollo, p. 57).

Accordingly, the issues are reduced to the sole question as to whether public respondent National Labor
Relations Commission committed a grave abuse of discretion in its resolution of December 17, 1986.

The facts on which this decision was predicated continue to be the facts of the case in this questioned
resolution of the National Labor Relations Commission.

It is clear that herein petitioners are merely reiterating the very same claim which they filed through the
ALU and which records show had already long been considered terminated and closed by this Court in
G.R. No. L-48510. Therefore, the NLRC can not be faulted for ruling that petitioners' claim is already
barred by  res-judicata.

Be that as it may, petitioners' claim that there was a change in the factual scenario which are
"substantial changes in the facts" makes respondent firm now liable for the same claim they earlier filed
against respondent which was dismissed. It is thus axiomatic that the non-compensability of the claim
having been earlier established, constitute the controlling legal rule or decision between the parties and
remains to be the law of the case  making this petition without merit.

As aptly observed by the Solicitor General that this petition is "clearly violative of the familiar principle
of res judicata. There will be no end to this controversy if the light of the Minister of Labor's decision
dated May 12, 1979 that had long acquired the character of finality and which already resolved that
petitioners' thirty (30)-minute assembly time is not compensable, the same issue can be re-litigated
again." (Rollo, p. 183)

This Court has held:

In this connection account should be taken of the cognate principle that res judicata operates to bar not
only the relitigation in a subsequent action of the issues squarely raised, passed upon and adjudicated in
the first suit, but also the ventilation in said subsequent suit of any other issue which could have been
raised in the first but was not. The law provides that 'the judgment or order is, with respect to the
matter directly adjudged or as to any other matter that could have been raised in relation thereto,
conclusive between the parties and their successors in interest by title subsequent to the
commencement of the action .. litigating for the same thing and in the same capacity.' So, even if new
causes of action are asserted in the second action (e.g. fraud, deceit, undue machinations in connection
with their execution of the convenio de transaccion), this would not preclude the operation of the
doctrine of  res judicata. Those issues are also barred, even if not passed upon in the first. They could
have been, but were not, there raised. (Vda. de Buncio v. Estate of the late Anita de Leon, 156 SCRA 352
[1987]).

Moreover, as a rule, the findings of facts of quasi-judicial agencies which have acquired expertise
because their jurisdiction is confined to specific matters are accorded not only respect but at times even
finality if such findings are supported by substantial evidence (Special Events & Central Shipping Office
Workers Union v. San Miguel Corporation, 122 SCRA 557 [1983]; Dangan v. NLRC, 127 SCRA 706 [1984];
Phil. Labor Alliance Council v. Bureau of Labor Relations, 75 SCRA 162 [1977]; Mamerto v. Inciong, 118
SCRA 265 (1982]; National Federation of Labor Union (NAFLU) v. Ople, 143 SCRA 124 [1986]; Edi-Staff
Builders International, Inc. v. Leogardo, Jr., 152 SCRA 453 [1987]; Asiaworld Publishing House, Inc. v.
Ople, 152 SCRA 219 [1987]).

The records show that the Labor Arbiters' decision dated October 9, 1985 (Annex "E", Petition) pointed
out in detail the basis of his findings and conclusions, and no cogent reason can be found to disturb
these findings nor of those of the National Labor Relations Commission which affirmed the same.

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

SO ORDERED.

Melencio-Herrera (Chairperson), Padilla and Regalado, JJ., concur.

SECOND DIVISION

G.R. No. 96078 January 9, 1992

HILARIO RADA, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION (Second Division) and
PHILNOR CONSULTANTS AND PLANNERS, INC., respondents.

Cabellero, Calub, Aumentado & Associates Law Offices for petitioner.

REGALADO, J.:

In this special civil action for certiorari, petitioner Rada seeks to annul the decision of respondent
National Labor Relations Commission (NLRC), dated November 19, 1990, reversing the decision of the
labor arbiter which ordered the reinstatement of petitioner with backwages and awarded him overtime
pay. 1

The facts, as stated in the Comment of private respondent Philnor Consultants and Planners, Inc.
(Philnor), are as follows:

Petitioner's initial employment with this Respondent was under a "Contract of Employment for a
Definite Period" dated July 7, 1977, copy of which is hereto attached and made an integral part hereof
as Annex A whereby Petitioner was hired as "Driver" for the construction supervision phase of the
Manila North Expressway Extension, Second Stage (hereinafter referred to as MNEE Stage 2) for a term
of "about 24 months effective July 1, 1977.

xxx xxx xxx

Highlighting the nature of Petitioner's employment, Annex A specifically provides as follows:

It is hereby understood that the Employer does not have a continuing need for the services of the
Employee beyond the termination date of this contract and that the Employee's services shall
automatically, and without notice, terminate upon the completion of the above specified phase of the
project; and that it is further understood that the engagement of his/her services is coterminus with the
same and not with the whole project or other phases thereof wherein other employees of similar
position as he/she have been hired. (Par. 7, emphasis supplied)

Petitioner's first contract of employment expired on June 30, 1979. Meanwhile, the main project, MNEE
Stage 2, was not finished on account of various constraints, not the least of which was inadequate
funding, and the same was extended and remained in progress beyond the original period of 2.3 years.
Fortunately for the Petitioner, at the time the first contract of employment expired, Respondent was in
need of Driver for the extended project. Since Petitioner had the necessary experience and his
performance under the first contract of employment was found satisfactory, the position of Driver was
offered to Petitioner, which he accepted. Hence a second Contract of Employment for a Definite Period
of 10 months, that is, from July 1, 1979 to April 30, 1980 was executed between Petitioner and
Respondent on July 7, 1979. . . .

In March 1980 some of the areas or phases of the project were completed, but the bulk of the project
was yet to be finished. By that time some of those project employees whose contracts of employment
expired or were about to expire because of the completion of portions of the project were offered
another employment in the remaining portion of the project. Petitioner was among those whose
contract was about to expire, and since his service performance was satisfactory, respondent renewed
his contract of employment in April 1980, after Petitioner agreed to the offer. Accordingly, a third
contract of employment for a definite period was executed by and between the Petitioner and the
Respondent whereby the Petitioner was again employed as Driver for 19 months, from May 1, 1980 to
November 30, 1981, . . .
This third contract of employment was subsequently extended for a number of times, the last extension
being for a period of 3 months, that is, from October 1, 1985 to December 31, 1985, . . .

The last extension, from October 1, 1985 to December 31, 1985 (Annex E) covered by an "Amendment
to the Contract of Employment with a Definite Period," was not extended any further because Petitioner
had no more work to do in the project. This last extension was confirmed by a notice on November 28,
1985 duly acknowledged by the Petitioner the very next day, . . .

Sometime in the 2nd week of December 1985, Petitioner applied for "Personnel Clearance" with
Respondent dated December 9, 1985 and acknowledged having received the amount of P3,796.20
representing conversion to cash of unused leave credits and financial assistance. Petitioner also released
Respondent from all obligations and/or claims, etc. in a "Release, Waiver and Quitclaim" . . . 2

Culled from the records, it appears that on May 20, 1987, petitioner filed before the NLRC, National
Capital Region, Department of Labor and Employment, a Complaint for non-payment of separation pay
and overtime pay. On June 3, 1987, Philnor filed its Position Paper alleging, inter alia, that petitioner was
not illegally terminated since the project for which he was hired was completed; that he was hired
under three distinct contracts of employment, each of which was for a definite period, all within the
estimated period of MNEE Stage 2 Project, covering different phases or areas of the said project; that his
work was strictly confined to the MNEE Stage 2 Project and that he was never assigned to any other
project of Philnor; that he did not render overtime services and that there was no demand or claim for
him for such overtime pay; that he signed a "Release, Waiver and Quitclaim" releasing Philnor from all
obligations and claims; and that Philnor's business is to provide engineering consultancy services,
including supervision of construction services, such that it hires employees according to the
requirements of the project manning schedule of a particular contract. 3

On July 2, 1987, 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.

On July 7, 1987, petitioner filed his Position Paper claiming that he was illegally dismissed since he was a
regular employee entitled to security of tenure; that he was not a project employee since Philnor is not
engaged in the construction business as to be covered by Policy Instructions No. 20; that the contract of
employment for a definite period executed between him and Philnor is against public policy and a clear
circumvention of the law designed merely to evade any benefits or liabilities under the statute; that his
position as driver was essential, necessary and desirable to the conduct of the business of Philnor; that
he rendered overtime work until 6:00 p.m. daily except Sundays and holidays and, therefore, he was
entitled to overtime pay. 4

In his Reply to Respondent's Position Paper, petitioner claimed that he was a regular employee pursuant
to Article 278(c) of the Labor Code and, thus, he cannot be terminated except for a just cause under
Article 280 of the Code; and that the public respondent's ruling in Quiwa vs.  Philnor Consultants and
Planners, Inc. 5 is not applicable to his case since he was an administrative employee working as a
company driver, which position still exists and is essential to the conduct of the business of Philnor even
after the completion of his contract of employment. 6 Petitioner likewise avers that the contract of
employment for a definite period entered into between him and Philnor was a ploy to defeat the intent
of Article 280 of the Labor Code.
On July 28, 1987, Philnor filed its Respondent's Supplemental Position Paper, alleging therein that
petitioner was not a company driver since his job was to drive the employees hired to work at the MNEE
Stage 2 Project to and from the filed office at Sto. Domingo Interchange, Pampanga; that the office
hours observed in the project were from 7:00 a.m. to 4:00 p.m. Mondays through Saturdays; that
Philnor adopted the policy of allowing certain employees, not necessarily the project driver, to bring
home project vehicles to afford fast and free transportation to and from the project field office
considering the distance between the project site and the employees' residence, to avoid project delays
and inefficiency due to employee tardiness caused by transportation problem; that petitioner was
allowed to use a project vehicle which he used to pick up and drop off some ten employees along
Epifanio de los Santos Avenue (EDSA), on his way home to Marikina, Metro Manila; that when he was
absent or on leave, another employee living in Metro Manila used the same vehicle in transporting the
same employees; that the time used by petitioner to and from his residence to the project site from
5:30 a.m. to 7:00 a.m. and from 4:00 p.m. to 6:00 p.m., or about three hours daily, was not overtime
work as he was merely enjoying the benefit and convenience of free transportation provided by Philnor,
otherwise without such vehicle he would have used at least four hours by using public transportation
and spent P12.00 daily fare; that in the case of Quiwa vs.  Philnor Consultants and Planners, Inc., supra,
the NLRC upheld Philnor's position that Quiwa was a project employee and he was not entitled to
termination pay under Policy Instructions No. 20 since his employment was coterminous with the
completion of the project.

On August 25, 1987, Philnor filed its Respondent's Reply/Comments to Complainant's Rejoinder and
Reply, submitting therewith two letters dated January 5, 1985 and February 6, 1985, signed by MNEE
Stage 2 Project employees, including herein petitioner, where they asked what termination benefits
could be given to them as the MNEE Stage 2 Project was nearing completion, and Philnor's letter-reply
dated February 22, 1985 informing them that they are not entitled to termination benefits as they are
contractual/project employees.

On August 31, 1989, Labor Arbiter Dominador M. Cruz rendered a decision 7 with the following
dispositive portion:

WHEREFORE, in view of all the foregoing considerations, judgment is hereby rendered:

(1) Ordering the respondent company to reinstate the complainant to his former position without loss of
seniority rights and other privileges with full backwages from the time of his dismissal to his actual
reinstatement;

(2) Directing the respondent company to pay the complainant overtime pay for the three excess hours
of work performed during working days from January 1983 to December 1985; and

(3) Dismissing all other claims for lack of merit.

SO ORDERED.

Acting on Philnor's appeal, the NLRC rendered its assailed decision dated November 19, 1990, setting
aside the labor arbiter's aforequoted decision and dismissing petitioner's complaint.

Hence this petition wherein petitioner charges respondent NLRC with grave abuse of discretion
amounting to lack of jurisdiction for the following reasons:
1. The decision of the labor arbiter, dated August 31, 1989, has already become final and executory;

2. The case of Quiwa vs.  Philnor Consultants and Planners, Inc. is not binding nor is it applicable to this
case;

3. The petitioner is a regular employee with eight years and five months of continuous services for his
employer, private respondent Philnor;

4. The claims for overtime services, reinstatement and full backwages are valid and meritorious and
should have been sustained; and

5. The decision of the labor arbiter should be reinstated as it is more in accord with the facts, the law
and evidence.

The petition is devoid of merit.

1. Petitioner questions the jurisdiction of respondent NLRC in taking cognizance of the appeal filed by
Philnor in spite of the latter's failure to file a supersedeas bond within ten days from receipt of the labor
arbiter's decision, by reason of which the appeal should be deemed to have been filed out of time. It will
be noted, however, that Philnor was able to file a bond although it was made beyond the 10-day
reglementary period.

While it is true that the payment of the supersedeas bond is an essential requirement in the perfection
of an appeal, however, where the fee had been paid although payment was delayed, the broader
interests of justice and the desired objective of resolving controversies on the merits demands that the
appeal be given due course. Besides, it was within the inherent power of the NLRC to have allowed late
payment of the bond, considering that the aforesaid decision of the labor arbiter was received by
private respondent on October 3, 1989 and its appeal was duly filed on October 13, 1989. However, said
decision did not state the amount awarded as backwages and overtime pay, hence the amount of the
supersedeas bond could not be determined. It was only in the order of the NLRC of February 16, 1990
that the amount of the supersedeas bond was specified and which bond, after an extension granted by
the NLRC, was timely filed by private respondent.

Moreover, as provided by Article 221 of the Labor Code, "in any proceeding before the Commission or
any of the Labor Arbiters, the rules of evidence prevailing in Courts of law or equity shall not be
controlling and it is the spirit and intention of this Code that the Commission and its members and the
Labor Arbiters shall use every and all reasonable means to ascertain the facts in each case speedily and
objectively without regard to technicalities of law or procedure, all in the interest of due
process. 8 Finally, the issue of timeliness of the appeal being an entirely new and unpleaded matter in
the proceedings below it may not now be raised for the first time before this Court. 9

2. Petitioner postulates that as a regular employee, he is entitled to security of tenure, hence he cannot
be terminated without cause. Private respondent Philnor believes otherwise and asserts that petitioner
is merely a project employee who was terminated upon the completion of the project for which he was
employed.

In holding that petitioner is a regular employee, the labor arbiter found that:
. . . There is no question that the complainant was employed as driver in the respondent company
continuously from July 1, 1977 to December 31, 1985 under various contracts of employment. Similarly,
there is no dispute that respondent Philnor Consultant & Planner, Inc., as its business name connotes,
has been engaged in providing to its client(e)le engineering consultancy services. The record shows that
while the different labor contracts executed by the parties stipulated definite periods of engaging the
services of the complainant, yet the latter was suffered to continue performing his job upon the
expiration of one contract and the renewal of another. Under these circumstances, the complaint has
obtained the status of regular employee, it appearing that he has worked without fail for almost eight
years, a fraction of six months considered as one whole year, and that his assigned task as driver was
necessary and desirable in the usual trade/business of the respondent employer. Assuming to be true,
as spelled out in the employment contract, that the Employer has no "continuing need for the services
of the Employe(e) beyond the termination date of this contract and that the Employee's services shall
automatically, and without notice, terminate upon completion of the above specified phase of the
project," still we cannot see our way clear why the complainant was hired and his services engaged
contract after contract straight from 1977 to 1985 which, to our considered view, lends credence to the
contention that he worked as regular driver ferrying early in the morning office personnel to the
company main office in Pampanga and bringing back late in the afternoon to Manila, and driving
company executives for inspection of construction workers to the jobsites. All told, we believe that the
complainant, under the environmental facts obtaining in the case at bar, is a regular employee, the
provisions of written agreement to the
contrary notwithstanding and regardless of the oral understanding of the parties . . . 10

On the other hand, respondent NLRC declared that, as between the uncorroborated and unsupported
assertions of petitioners and those of private respondent which are supported by documents, greater
credence should be given the latter. It further held that:

Complainant was hired in a specific project or undertaking as driver. While such project was still on-
going he was hired several times with his employment period fixed every time his contract was
renewed. At the completion of the specific project or undertaking his employment contract was not
renewed.

We reiterate our ruling in the case of (Quiwa) vs.  Philnor Consultants and Planners, Inc.,  NLRC RAB III 5-
1738-84, it is being applicable in this case,  viz.:

. . . While it is true that the activities performed by him were necessary or desirable in the usual business
or trade of the respondent as consultants, planners, contractor and while it is also true that the duration
of his employment was for a period of about seven years, these circumstances did not make him a
regular employee in contemplation of Article 281 of (the) Labor Code. . . . 11

Our ruling in Sandoval Shipyards, Inc.  vs.  National Labor Relations Commission, et al.  12 is applicable to
the case at bar. Thus:

We hold that private respondents were project employees whose work was coterminous with the
project or which they were hired. Project employees, as distinguished from regular or non-project
employees, are mentioned in section 281 of the Labor Code as those "where the employment has been
fixed for a specific project or undertaking the completion or termination of which has been determined
at the time of the engagement of the employee."
Policy Instructions No. 20 of the Secretary of Labor, which was issued to stabilize employer-employee
relations in the construction industry, provides:

Project employees are those employed in connection with a particular construction project. Non-project
(regular) employees are those employed by a construction company without reference to any particular
project.

Project employees are not entitled to termination pay if they are terminated as a result of the
completion of the project or any phase thereof in which they are employed, regardless of the number of
projects in which they have been employed by a particular construction company. Moreover, the
company is not required to obtain clearance from the Secretary of Labor in connection with such
termination.

The petitioner cited three of its own cases wherein the National Labor Relations Commission, Deputy
Minister of Labor and Employment Inciong and the Director of the National Capital Region held that the
layoff of its project employees was lawful. Deputy Minister Inciong in TFU Case No. 1530, In Re Sandoval
Shipyards, Inc. Application for Clearance to Terminate Employees, rendered the following ruling on
February 26, 1979;

We feel that there is merit in the contention of the applicant corporation. To our mind, the employment
of the employees concerned were fixed for a specific project or undertaking.  For the nature of the
business the corporation is engaged into is one which will not allow it to employ workers for an indefinite
period.

It is significant to note that the corporation does not construct vessels for sale or otherwise which will
demand continuous productions of ships and will need permanent or regular workers. It merely accepts
contracts for shipbuilding or for repair of vessels form third parties and, only, on occasion when it has
work contract of this nature that it hires workers to do the job which, needless to say, lasts only for less
than a year or longer.

The completion of their work or project automatically terminates their employment, in which case, the
employer is, under the law, only obliged to render a report on the termination of the employment. (139-
140, Rollo  of G.R. No. 65689) (Emphasis supplied)

In  Cartagenas, et al.  vs.  Romago Electric Company, Inc., et al., 13 we likewise held that:

As an electrical contractor, the private respondent depends for its business on the contracts it is able to
obtain from real estate developers and builders of buildings. Since its work depends on the availability
of such contracts or "projects," necessarily the duration of the employment's of this work force is not
permanent but co-terminus with the projects to which they are assigned and from whose payrolls they
are paid. It would be extremely burdensome for their employer who, like them, depends on the
availability of projects, if it would have to carry them as permanent employees and pay them wages
even if there are no projects for them to work on. (Emphasis supplied.)

It must be stressed herein that although petitioner worked with Philnor as a driver for eight years, the
fact that his services were rendered only for a particular project which took that same period of time to
complete categorizes him as a project employee. Petitioner was employed for one specific project.
A non-project employee is different in that the employee is hired for more than one project. A non-
project employee, vis-a-vis a project employee, is best exemplified in the case of Fegurin, et
al.  vs.  National Labor Relations Commission, et al.  14 wherein four of the petitioners had been working
with the company for nine years, one for eight years, another for six years, the shortest term being
three years. In holding that petitioners are regular employees, this Court therein explained:

Considering the nature of the work of petitioners, that of carpenter, laborer or mason, their respective
jobs would actually be continuous and on-going. When a project to which they are individually assigned
is completed, they would be assigned to the next project or a phase thereof. In other words, they
belonged to a "work pool" from which the company would draw workers for assignment to other
projects at its discretion. They are, therefore, actually "non-project employees."

From the foregoing, it is clear that petitioner is a project employee considering that he does not belong
to a "work pool" from which the company would draw workers for assignment to other projects at its
discretion. It is likewise apparent from the facts obtaining herein that petitioner was utilized only for one
particular project, the MNEE Stage 2 Project of respondent company. Hence, the termination of herein
petitioner is valid by reason of the completion of the project and the expiration of his employment
contract.

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

The herein Respondent resorted to the above transport arrangement because from its previous project
construction supervision experiences, Respondent found out that project delays and inefficiencies
resulted from employees' tardiness; and that the problem of tardiness, in turn, was aggravated by
transportation problems, which varied in degrees in proportion to the distance between the project site
and the employees' residence. In view of this lesson from experience, and as a practical, if expensive,
solution to employees' tardiness and its concomitant problems, Respondent adopted the policy of
allowing certain employees — not necessarily project drivers — to bring home project vehicles, so that
employees could be afforded fast, convenient and free transportation to and from the project field
office. . . . 15

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

WHEREFORE, subject to the modification regarding the award of overtime pay to herein petitioner, the
decision appealed from is AFFIRMED in all other respects.

SO ORDERED.

Melencio-Herrera, Paras and Padilla, JJ., concur.

Nocon, J., took no part.

THIRD DIVISION

G.R. NO. 41314 November 13, 1992

UNION CARBIDE LABOR UNION (NLU), petitioner, vs. UNION CARBIDE PHILIPPINES, INC. AND THE
HON. SECRETARY OF LABOR, respondents.

MELO, J.:

This refers to a petition for review of the decision of the then Secretary of Labor Blas Ople handed down
on February 7, 1975 which set aside the decision of the Arbitrator ordering reinstatement with
backwages, and instead adjudged the payment of separation pay; and the resolution dated July 24, 1975
denying petitioner's motion for reconsideration for lack of merit.

The undisputed facts as found by the Secretary of Labor are as follows:

. . . Complainants Agapito Duro, Alfredo Torio, and Rustico Javillonar, were dismissed from their
employment after an application for clearance to terminate them was approved by the Secretary of
Labor on December 19, 1972. Respondent's application for clearance was premised on "willful violation
of Company regulations, gross insubordination and refusal to submit to a Company investigation . . . ."

Prior events leading to the dismissal of complainants are recited in the Arbitrator's decision, which we
quote:

It appears that the Company is operating on three (3) shifts namely: morning, afternoon and night shifts.
The workers in the third shift normally work from Monday to Saturday, the last working day being Friday
or forty (40) hours a week or from Monday to Friday.

Sometime in July 1972, there seems to be a change in the working schedule from Monday to Friday as
contained in the collective bargaining agreement aforecited to Sunday thru Thursday. The change
became effective July 5, 1972. The third shift employees were required to start the new work schedule
from Sunday thru Thursday.

On November 6, 1972, the night shift employees filed a demand to maintain the old working schedule
from Monday thru Friday. (Letter of November 6, 1972 addressed to the Committee on Labor Relation,
UCLU). The demand was referred to the Labor Management Relation Committee and discussed from
November 15, up to November 24, 1972. In the discussions had, it was arrived at that all night shift
operating personnel were allowed to start their work Monday and on Saturday. This excepted the
employees in the maintenance and preparation crews whose work schedule is presumed to be
maintained from Sunday to Thursday. The work schedule between management representatives and the
alleged officers of the Union (Varias group) was approved and disseminated to take effect November 26,
1972. (Exh. "2" Respondent).

In manifestation of their dissention to the new work schedule, the three respondents Duro, Torio, and
Javillonar did not report for work on November 26, 1972 which was a Sunday since it was not a working
day according to the provisions of the Collecrtive Bargaining Agreement. (Exh. "A" Complainant). Their
absence caused their suspension for fourteen (14) days. (pp. 29-30, Rollo).

On May 4, 1973, the Arbitrator rendered a decision ordering the reinstatement with backwages of the
complainants. On June 8, 1973, the National Labor Relations Commission dismissed respondent
company's appeal for having been filed out of time. A motion for reconsideration which was treated as
an appeal was then filed by respondent company before the Secretary of Labor, resulting in the
modification of the Arbitrator's decision by awarding complainants separation pay. A motion for
reconsideration subsequently filed by the petitioner was denied for lack of merit.

Hence, this petition.

The main issue in this case is whether or not the complainants could be validly dismissed from their
employment on the ground of insubordination for refusing to comply with the new work schedule.

Petitioner alleges that the change in the company's working schedule violated the existing Collective
Bargaining Agreement of the parties. Hence, complainants cannot be dismissed since their refusal to
comply with the re-scheduled working hours was based on a provision of the Collective Bargaining
Agreement. Petitioner further contends that the dismissal of the complainants violated Section 9, Article
II of the 1973 Constitution which provides "the right of workers to self-organization, collective
bargaining, security of tenure, and just and humane conditions of work."

The petition has no merit.

Although Article XIX of the CBA provides for the duration of the agreement, which We quote:

This agreement shall become effective on September 1, 1971 and shall remain in full force and effect
without change until August 31, 1974. Unless the parties hereto agree otherwise, negotiation for
renewal, or renewal and modification, or a new agreement may not be initiated before July 1, 1974.

this does not necessarily mean that the company can no longer change its working schedule, for Section
2, Article II of the same CBA expressly provides that:
Sec. 2. In the exercise of its functions of management, the COMPANY shall have the sole and exclusive
right and power, among other things, to direct the operations and the working force of its business in all
respects; to be the sole judge in determining the capacity or fitness of an employee for the position or
job to which he has been assigned; to schedule the hours of work, shifts and work schedules; to require
work to be done in excess of eight hours or Sundays or holidays as the exigencies of the service may
require; to plan, schedule, direct, curtail and control factory operations and schedules of production; to
introduce and install new or improved methods or facilities; to designate the work and the employees to
perform it; to select and hire new employees; to train new employees and improve the skill and ability
of employees from one job to another or form one shift to another; to classify or reclassify employees;
and to make such changes in the duties of its employees as the COMPANY may see fit or convenient for
the proper conduct of its business.

Verily and wisely, management retained the prerogative, whenever exigencies of the service so require,
to change the working hours of its employees. And as 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 (San Miguel Brewery Sales Force Union (PTGWO) vs. Ople, 170 SCRA 25 [1989]).

Thus, in the case of Abbott Laboratories (Phil.), Inc.  vs.  NLRC  (154 SCRA 713 [1987]), We ruled:

. . . Even as the law is solicitous of the welfare of employees, it must also protect the 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. (p.717)

Further, the incident complained of took place sometime in 1972, so there is no violation of the 1973
Constitution to speak of because the guarantee of security of tenure embodied under Section 9, Article
II may not be given a retroactive effect. It is the basic norm that provisions of the fundamental law
should be given prospective application only, unless legislative intent for its retroactive application is so
provided.

As pointed out by Justice Isagani Cruz, to wit:

Finally, it should be observed that the provisions of the Constitution should be given only a prospective
application unless the contrary is clearly intended. Were the rule otherwise, rights already acquired or
vested might be unduly disturbed or withdrawn even in the absence of an unmistakable intention to
place them within the scope of the Constitution.

(p.10, Constitutional Law, Isagani Cruz, 1991 Edition)

We agree with the findings arrived at by both Arbitrator and the Secretary of Labor that there is no
unfair labor practice in this case. Neither was there gross and habitual neglect of complainants' duties.
Nor did the act of complainants in refusing to follow the new working hours amount to serious
misconduct or willful disobedience to the orders of respondent company.

Although no serious objections may be offered to the Arbitrator's conclusion to order reinstatement
with backwages of the complainants, We now refrain from doing so considering that reinstatement is no
longer feasible due to the fact that the controversy started more than 20 years ago aside from the
obviously strained relations between the parties.
WHEREFORE, the decision appealed from is hereby AFFIRMED.

SO ORDERED.

Gutierrez, Jr., Bidin, Davide, Jr. and Romero, JJ., concur.

THIRD DIVISION

G.R. No. 76746               July 27, 1987

DURABUILT RECAPPING PLANT & COMPANY and EDUARDO LAO, GENERAL MANAGER, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, HON. COMM. RICARDO C. CASTRO, HON. ARBITER
AMELIA M. GULOY, KAPISANAN NG MGA MANGGAGAWA SA DURABUILT and REYNALDO
BODEGAS, respondents.

GUTIERREZ, JR., J.:

This is a petition to review the May 16, 1986 resolution of respondent National Labor Relations
Commission (NLRC) affirming the Labor Arbiter's order in NLRC Case No. NCR-73162083. The sole issue
raised is the proper basis for the computation of backwages in favor of an illegally dismissed employee.

The facts of the case are simple and uncontroverted.

On July 11, 1983, a complaint for illegal dismissal was filed by respondent Reynaldo Bodegas, against
petitioner Durabuilt, a tire recapping company.

In a decision rendered by the Labor Arbiter on February 13, 1984, the private respondent was ordered
reinstated to his former position with full backwages, from the time he was terminated up to the time
he is actually reinstated, without loss of seniority rights and benefits accruing to him.

The petitioners failed to file a seasonable appeal and entry of final judgment was made on July 8, 1985.

On August 8, 1985, the Acting Chief of Research and Information and the Corporation Auditing Examiner
of the then Ministry of Labor and Employment submitted a computation of backwages, ECOLA, 13th
month pay, sick and vacation leave benefits in favor of Reynaldo Bodegas in the total amount of
P24,316.38.

The petitioner filed its opposition to the computation on the ground that it contemplated a straight
computation of twenty six (26) working days in one month when the period covered by the computation
was intermittently interrupted due to frequent brownouts and machine trouble and that respondent
Bodegas had only a total of 250.75 days of attendance in 1982 due to absences. According to the
petitioner, Bodegas is entitled only to the amount of P3,834.05 broken down as follows: salaries —
P1,993.00; ECOLA — P1,433.50, and 13th month pay — P407.55.
On October 23, 1985, the Labor Arbiter denied the opposition to the computation. The petitioner
appealed to the NLRC which, in an order dated May 16, 1986, affirmed the order of the Labor Arbiter
and dismissed the appeal.

Claiming grave abuse of discretion on the part of the public respondents, Durabuilt filed the instant
petition.

Backwages, in general, are granted on grounds of equity for earnings which a worker or employee has
lost due to his dismissal from work (New Manila Candy Workers Union (NACONWA-PAFLU v. CIR, 86
SCRA 37).

The general principle is that an employee is entitled to receive as backwages all the amounts he may
have lost starting from the date of his dismissal up to the time of his reinstatement (Capital Garment
Corporation v. Ople, 117 SCRA 473; New Manila Candy Workers' Union (NACONWA-PAFLU) v.
CIR, supra).

In a line of cases, this Court has established a policy fixing the amount of backwages to a just and
reasonable level without qualification or deduction  (Insular Life Assurance Co., Ltd. Employees'
Association-NATU v. Insular Life Assurance Co., Ltd., 76 SCRA 501; Feati University Club v. Feati
University, 58 SCRA 395; Mercury Drug Co., Inc. v. CIR, 56 SCRA 694). The respondents center their
attention on the above underlined portion of this policy. Hence, their contention that the deductions
cited by the petitioners cannot be made.

In their bid to recover a greater amount of backwages, the rationale of the policy has escaped the
respondents' consideration. In  Insular Life Assurance Employees Association-NATU v. Insular Life
Assurance Co., Ltd.  (76 SCRA 50) we held that to fix the amount of backwages without qualification or
deduction simply means that the workers are to be paid their backwages fixed as of the time of their
dismissal or strike without deduction for their earnings elsewhere during their law-off and without
qualification of their backwages as thus fixed; i.e. unqualified by any wage increases or other benefits
that may have been received by their co-workers who were not dismissed or did not go on strike. The
principle is justified "as a realistic, reasonable and mutually beneficial solution for it relieves the
employees from proving their earnings during their law-offs and the employer from submitting counter
proofs. It was meant to obviate the twin evils of Idleness on the part of the employees and attrition and
undue delay in satisfying the award on the part of the employer" (New Manila Candy Workers Union
NACONWA-PAFLU v. CIR supra). The same was not to establish an inflexible rule of computation of any
Backwages due an employee.

The age-old rule governing the relation between labor and capital, or management and employee of a
"fair day's wage for a fair day's labor" remains as the basic factor in determining employees' wages, and
for that matter backwages. If there is no work performed by the employee there can be no wage or pay
unless, of course, the laborer was able, willing and ready to work but was illegally locked out, or
suspended (SSS v. SSS Supervisors Union-CUGCO, 117 SCRA 746).

The illegal dismissal of the private respondent is conceded by the petitioner. It is willing to pay
backwages. However, the petitioner argues that for days where no work was required and could be
done by its employees, no wages could have been earned and, thereafter, lost by said employees to
justify an award of backwages. We quote with approval the Solicitor General's comment,* to wit:
From the indubitable facts on record, it appears that petitioners have valid reasons to claim that certain
days should not be considered days worked for purposes of computing private respondent's backwages
since their business was not in actual operation due to brownouts or power interruption and the
retrenchment of workers they had during the period of private respondent's dismissal.

It cannot be denied that during the past years particularly in 1983, there was chronic electrical power
interruption resulting to disruption of business operations. To alleviate the situation, the government
thru the Ministry of Trade and Industry called on the industrial sector to resort to the so-called
Voluntary Loan Curtailment Plan (or VLCP), whereby brownouts or electrical power interruption was
scheduled by area. The program while it may have been called 1. voluntary" was not so as electrical
power consumers had no choice then due to the prevailing energy crisis.

Petitioners heeding the government's call, participated in the VLCP as indicated in their statement of
conformity dated November 23, 1982. Thus, beginning March 21, 1983 and every Wednesday
thereafter, petitioner's business (which indicentally is recapping rubber tires) was not in actual
operation. No less than the former Minister of Trade and Industry expressed his gratitude to petitioners
for participating in the VLCP. Petitioners substantiated claim therefore, that the days during which they
were not in operation due to the VLCP should be excluded in the number of days worked for purposes of
computing private respondents backwages stands reasonable and should have been considered by the
corporation auditing examiner.1avvphi1

Moreover, as early as May 1978, the Ministry of Labor and Employment, thru Policy Instruction No. 36,
has said that —

2. Brownouts running for more than twenty minutes may not be treated as hours worked provided that
any of the following conditions are present;

a) The employees can leave their work place or go elsewhere whether within or without the work
premises; or

b) The employees can use the time effectively for their own interest.

It is of record that during electrical power interruptions, petitioners business was not in operation. This
was never disputed by private respondent.

Petitioners' claim that the period (December 1983) during which they effected retrenchment of workers
owing to economic crisis then prevailing likewise appears plausible. There is substantial evidence
consisting of reports to MOLE and Social Security System showing that petitioners had laid off workers
due to lack of raw materials. The petitioners payrolls submitted to support their objection to
computation indicate that the number of working days was reduced from the normal weekly six working
days to four working days for a great number of petitioners' workers. Obviously, private respondent
could not have been among those laid off, as at that time he was already dismissed by petitioner. (Rollo,
pp. 31-34).

Thus, we have held that where the failure of workers to work was not due to the employer's fault, the
burden of economic loss suffered by the employees should not be shifted to the employer. Each party
must bear his own loss (SSS v. SSS Supervisors' Union-CUGCO, supra; Pan-American World Airways, Inc.
v. CIR, 17 SCRA 813). As pointed out by the Solicitor General —
... to allow payment of backwages of P24,316.68 as ordered by public respondents instead of P3,834.16
as petitioners claim and which appears to be just and reasonable under the circumstances of this case
would not only be unconscionable but would be grossly unfair to other employees who were not paid
when petitioners' business was not in operation. (Rollo, p. 35).

Indeed, it would neither be fair nor just to allow respondent to recover something he has not earned
and could not have earned and to further penalize the petitioner company over and above the losses it
had suffered due to lack of raw materials and the energy-saving programs of the government. The
private respondent cannot be allowed to enrich himself at the expense of the petitioner company. The
computation of backwages should be based on daily rather than on monthly pay schedules where, as in
the case at bar, such basis is more realistic and accurate. (Compania Maritima v. United Seamen's Union
of the Philippines, 65 SCRA 393).

In conclusion, we again quote the Solicitor General's comment:

Finally, what strengthens petitioners claim for mitigated liability is their evident good faith as manifested
by their reinstatement of private respondent while the case for illegal dismissal was still pending and
their willingness to pay backwages. While it is true that as a general rule order of reinstatement carries
with it an award of backwages (Art. 280, Labor Code) this Honorable Court did not only mitigate but
absolved employers from liability of backwages where good faith is evident (Findlay Millar Timber Co. v.
PLASLU, 6 SCRA 26: Cromwell Com. Employees & Laborers Union v. CIR, 13 SCRA 259, Norton and
Harrison Labor Union v. Harrison Co. Inc. 15 SCRA 310; PAL v. PALEA, 57 SCRA 489; Cruz v. MOLE, 120
SCRA 15). There is no indication, to paraphrase this Honorable Court's ruling in Pantranco North Express
Inc. v. NLRC (126 SCRA 526) that private respondent was a "victim of arbitrary and high handed action.
Rollo, pp. 34-35).

WHEREFORE, in view of the foregoing, the petition is hereby GRANTED. The order of the Labor Arbiter,
Amelia M. Guloy in NLRC Case No. NCR-7-3162083, dated October 23, 1985, as affirmed by the NLRC is
SET ASIDE. The petitioner is ordered to pay private respondent his backwages from the time he was
terminated up to the time he was actually reinstated computed on the basis of the number of days
when petitioner's business was in actual operation. The number of days where no work was required
and could be done by petitioner's employees on account of shutdowns due to electrical power
interruptions, machine repair, and lack of raw materials are not considered hours worked for purposes
of computing the petitioner's obligation to respondent employee. In no case shall the award exceed
three year's backpay as above computed.

SO ORDERED.

Fernan (Chairman), Feliciano, Bidin and Cortes, JJ., concur.

FIRST DIVISION
 G.R. No. L-98368 December 15, 1993

OPULENCIA ICE PLANT AND STORAGE AND/OR DR. MELCHOR OPULENCIA, petitioners,

vs.
NATIONAL LABOR RELATIONS COMMISSION (THIRD DIVISION), LABOR ARBITER NUMERIANO VILLENA
AND MANUEL P. ESITA, respondents.

Inocentes, De Leon, Leogardo, Atienza, Magnaye & Azucena (IDLAMA) Law Offices for petitioners.

Noli J. De los Santos for private respondent.

BELLOSILLO, J.:

MANUEL P. ESITA was for twenty (20) years a compressor operator of Tiongson Ice Plant in San Pablo
City. In 1980 he was hired as compressor operator-mechanic for the ice plants of petitioner Dr. Melchor
Opulencia located in Tanauan, Batangas, and Calamba, Laguna. Initially assigned at the ice plant in
Tanauan, Esita would work from seven o'clock in the morning to five o'clock in the afternoon receiving a
daily wage of P35.00.

In 1986, Esita was transferred to the ice plant in Calamba, which was then undergoing overhauling,
taking the place of compressor operator Lorenzo Eseta, who was relieved because he was already old
and weak. For less than a month, Esita helped in the construction-remodeling of Dr. Opulencia's house.

On 6 February 1989, for demanding the correct amount of wages due him, Esita was dismissed from
service. Consequently, he filed with Sub-Regional Arbitration Branch IV, San Pablo City, a complaint for
illegal dismissal, underpayment, non-payment for overtime, legal holiday, premium for holiday and rest
day, 13th month, separation/retirement pay and allowances against petitioners.

Petitioners deny that Esita is an employee. They claim that Esita could not have been employed in 1980
because the Tanauan ice plant was not in operation due to low voltage of electricity and that Esita was
merely a helper/peon of one of the contractors they had engaged to do major repairs and renovation of
the Tanauan ice plant in 1986. Petitioners further allege that when they had the Calamba ice plant
repaired and expanded, Esita likewise rendered services in a similar capacity, and thus admitting that he
worked as a helper/peon  in the repair or remodeling of Dr. Opulencia's residence in Tanauan.

Opulencia likewise maintains that while he refused the insistent pleas of Esita for employment in the ice
plants due to lack of vacancy, he nonetheless allowed him to stay in the premises of the ice plant for
free and to collect fees for crushing or loading ice of the customers and dealers of the ice plant.
Opulencia claims that in addition, Esita enjoyed free electricity and water, and was allowed to cultivate
crops within the premises of the ice plant to augment his income. Petitioners however admit that
"following the tradition of 'pakikisama' and as a token of gratitude of the part of the complainant (Esita),
he helps in the cleaning of the ice plant premises and engine room whenever he is requested to do so,
and this happens only (at) twice a month."

On 8 December 1989, Labor Arbiter Nemeriano D. Villena rendered a decision 1 finding the existence of
an employer-employee relationship between petitioners and Esita and accordingly directed them to pay
him P33,518.02 representing separation pay, underpayment of wages, allowances, 13th month, holiday,
premium for holiday, and rest day pays. The claim for overtime pay was however dismissed for lack of
basis, i.e., Esita failed to prove that overtime services were actually rendered.

On 29 November 1990, the Third Division of the National Labor Relations Commission, in Case No. RAB-
IV-2-2206-89, affirmed the decision of Labor Arbiter Villena but reduced the monetary award to
P28,344.60 as it was not proven that Esita worked every day including rest days and on the days before
the legal holidays. On 26 March 1991, petitioners' motion for reconsideration was denied.

In this present recourse, petitioners seek reversal of the ruling of public respondents Labor Arbiter and
NLRC, raising the following arguments: that public respondents have no jurisdiction over the instant
case; that Esita's work in the repair and construction of Dr. Opulencia's residence could not have ripened
into a regular employment; that petitioners' benevolence in allowing Esita to stay inside the company's
premises free of charge for humanitarian reason deserves commendation rather than imposition of
undue penalty; that Esita's name does not appear in the payrolls of the company which necessarily
means that he was not an employee; and, that Esita's statements are inconsistent and deserving of
disbelief. On 13 May 1991, petitioners' prayer for a temporary restraining order to prevent respondents
from enforcing the assailed resolutions of NLRC was granted.

The instant petition lacks merit, hence, must be dismissed.

Petitioners allege that there is no employer-employee relationship between them and Esita;
consequently, public respondents have no jurisdiction over the case. Petitioners even go to the extent of
asserting that "in case like the one at bar where employer-employee relationship has been questioned
from the very start, Labor Arbiters and the NLRC have no jurisdiction and should not assume jurisdiction
therein."

While the Labor Arbiter and the NLRC may subsequently be found without jurisdiction over a case when
it would later appear that no employer-employee relationship existed between the contending parties,
such is not the situation in this case where the employer-employee relationship between the petitioners
and Esita was clearly established. If the argument of petitioners were to be allowed, then unscrupulous
employers could readily avoid the jurisdiction of the Labor Arbiters and NLRC, and may even elude
compliance with labor laws only on the bare assertion that an employer-employee relationship does not
exist.

Petitioners further argue that "complainant miserably failed to present any documentary evidence to
prove his employment. There was no time sheet, pay slip and/or payroll/cash voucher to speak of.
Absence of these material documents are necessary fatal to complainant's cause."

We do not agree. No particular form of evidence is required to prove the existence of an employer-
employee relationship. Any competent and relevant evidence to prove the relationship may be
admitted. For, if only documentary evidence would be required to show that relationship, no scheming
employer would ever be brought before the bar of justice, as no employer would wish to come out with
any trace of the illegality he has authored considering that it should take much weightier proof to
invalidate a written instrument. 2 Thus, as in this case where the employer-employee relationship
between petitioners and Esita was sufficiently proved by testimonial evidence, the absence of time
sheet, time record or payroll has become inconsequential.
The petitioners' reliance on Sevilla v.  Court of Appeals 3 is misplaced. In that case, we did not consider
the inclusion of employer's name in the payroll as an independently crucial evidence to prove an
employer-employee relation. Moreover, for a payroll to be utilized to disprove the employment of a
person, it must contain a true and complete list of the employees. But, in this case, the testimonies of
petitioners' witnesses admit that not all the names of the employees were reflected in the payroll.

In their Consolidated Reply, petitioners assert that "employees who were absent were naturally not
included in the weekly payrolls." 4 But this simply emphasizes the obvious. Petitioners' payrolls do not
contain the complete list of the employees, so that the payroll slips cannot be an accurate basis in
determining who are and are not their employees. In addition, as the Solicitor General observes: ". . . .
the payroll slips submitted by petitioners do not cover the entire period of nine years during which
private respondent claims to have been employed by them, but only the periods from November 2 to
November 29, 1986 and April 26 to May 30, 1987 . . . . It should be noted that petitioners repeatedly
failed or refused to submit all payroll slips covering the period during which private respondent claims to
have been employed by them despite repeated directives from the Labor Arbiter . . . ." 5 In this regard,
we can aptly apply the disputable presumption that evidence willfully suppressed would be adverse if
produced.6

Petitioners further contend that the claim of Esita that he worked from seven o'clock in the morning to
five o'clock in the afternoon, which is presumed to be continuous, is hardly credible because otherwise
he would not have had the time to tend his crops. 7 As against this positive assertion of Esita, it
behooves petitioners to prove the contrary. It is not enough that they raise the issue of probability, nay,
improbability, of the conclusions of public respondents based on the facts bared before them, for in
case of doubt, the factual findings of the tribunal which had the opportunity to peruse the conflicting
pieces of evidence should be sustained.

The petitioners point out that even granting arguendo that Esita was indeed a mechanic, he could never
be a regular employee because his presence would be required only when there was a need for repair.
We cannot sustain this argument. This circumstance cannot affect the regular status of employment of
Esita. An employee who is required to remain on call in the employer's premises or so close thereto that
he cannot use the time effectively and gainfully for his own purpose shall be considered as working
while on call. 8 In sum, the determination of regular and casual employment 9 is not affected by the fact
that the employee's regular presence in the place of work is not required, the more significant
consideration being that the work of the employee is usually necessary or desirable in the business of
the employer. More importantly, Esita worked for 9 years and, under the Labor Code, "any employee
who has rendered at least one year of service, whether such service is continuous or broken, shall be
considered a regular employee with respect to that activity in which he is employed . . . ." 10

The petitioners would give the impression that the repair of the ice plant and the renovation of the
residence of Dr. Opulencia were voluntarily extended by Esita because "[r]espondent did it on their (sic)
own." Unfortunately for petitioners, we cannot permit these baseless assertions to prevail against the
factual findings of public respondents which went through the sanitizing process of a public hearing. The
same observation may be made of the alleged inconsistencies in Esita's testimonies. Moreover, on the
claim that Esita's construction work could not ripen into a regular employment in the ice plant because
the construction work was only temporary and unrelated to the ice-making business, needless to say,
the one month spent by Esita in construction is insignificant compared to his nine-year service as
compressor operator in determining the status of his employment as such, and considering further that
it was Dr. Opulencia who requested Esita to work in the construction of his house.

In allowing Esita to stay in the premises of the ice plant and permitting him to cultivate crops to
augment his income, there is no doubt that petitioners should be commended; however, in view of the
existence of an employer-employee relationship as found by public respondents, we cannot treat
humanitarian reasons as justification for emasculating or taking away the rights and privileges of
employees granted by law. Benevolence, it is said, does not operate as a license to circumvent labor
laws. If petitioners were genuinely altruistic in extending to their employees privileges that are not even
required by law, then there is no reason why they should not be required to give their employees what
they are entitled to receive. Moreover, as found by public respondents, Esita was enjoying the same
privileges granted to the other employees of petitioners, so that in thus treating Esita, he cannot be
considered any less than a legitimate employee of petitioners.

WHEREFORE, there being no grave abuse of discretion on the part of public respondents, the instant
petition is DISMISSED. Accordingly, the restraining order we issued on 13 May 1991 is LIFTED.

SO ORDERED.

Cruz, Davide, Jr. and Quiason, JJ., concur.

EN BANC

G.R. No. L-15422           November 30, 1962

NATIONAL DEVELOPMENT COMPANY, petitioner,

vs.
COURT OF INDUSTRIAL RELATIONS and NATIONAL TEXTILE WORKERS UNION, respondents.

Government Corporate Counsel Simeon M. Gopengco and Lorenzo R. Mosqueda for petitioner.
Eulogio R. Lerum for respondent National Textile Workers Union.
Mariano B. Tuason for respondent Court of Industrial Relations.

REGALA, J.:

This is a case for review from the Court of Industrial Relations. The pertinent facts are the following:

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.

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. On the other hand, respondent National Textile Workers Union whose
members are employed at the NDC, maintained the opposite view and asked the Court of Industrial
Relations to order the payment of additional overtime pay corresponding to the mealtime periods.

After hearing, Judge Arsenio I. Martinez of the CIR issued an order dated March 19, 1959, holding that
mealtime should be counted in the determination of overtime work and accordingly ordered petitioner
to pay P101,407.96 by way of overtime compensation. Petitioner filed a motion for reconsideration but
the same was dismissed by the CIR en banc on the ground that petitioner failed to furnish the union a
copy of its motion.

Thereafter, petitioner appealed to this Court, contending, first, that the CIR has no jurisdiction over
claims for overtime compensation and, secondary that the CIR did not make "a correct appraisal of the
facts, in the light of the evidence" in holding that mealtime periods should be included in overtime work
because workers could not leave their places of work and rest completely during those hours.

In support of its contention that the CIR lost its jurisdiction over claims for overtime pay upon the
enactment of the Industrial Peace Act (Republic Act No. 875), petitioner cites a number of decisions of
this Court. On May 23, 1960, however, We ruled in Price Stabilization Corp. v. Court of Industrial
Relations, et al., G.R. No. L-13206, that

Analyzing these cases, the underlying principle, it will be noted in all of them, though not stated in
express terms, is that where the employer-employee relationship is still existing or is sought to be
reestablished because of its wrongful severance, (as where the employee seeks reinstatement) the
Court of Industrial Relations has jurisdiction over all claims arising out of, or in connection with the
employment, such as those related to the Minimum Wage Law and the Eight-Hour Labor Law. After the
termination of their relationship and no reinstatement is sought, such claims become mere money
claims, and come within the jurisdiction of the regular courts,

We are aware that in 2 cases, some statements implying a different view have been made, but we now
hold and declare the principle set forth in the next preceding paragraph as the one governing all cases of
this nature.

This has been the constant doctrine of this Court since May 23, 1960. 1

A more recent definition of the jurisdiction of the CIR is found in Campos, et al. v. Manila Railroad Co., et
al., G.R. No. L-17905, May 25, 1962, in which We held that, for such jurisdiction to come into play, the
following requisites must be complied with: (a) there must exist between the parties an employer-
employee relationship or the claimant must seek his reinstatement; and (b) the controversy must relate
to a case certified by the President to the CIR as one involving national interest, or must arise either
under the Eight-Hour Labor Law, or under the Minimum Wage Law. In default of any of these
circumstances, the claim becomes a mere money claim that comes under the jurisdiction of the regular
courts. Here, petitioner does not deny the existence of an employer-employee relationship between it
and the members of the union. Neither is there any question that the claim is based on the Eight-Hour
Labor Law (Com. Act No. 444, as amended). We therefore rule in favor of the jurisdiction of the CIR over
the present claim.

The other issue raised in the appeal is whether or not, on the basis of the evidence, the mealtime breaks
should be considered working time under the following provision of the law;

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, as amended.
Emphasis ours.)

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 2 of his employer, is not counted
as working time only where the work is broken or is not continuous.

The determination as to whether work is continuous or not is mainly one of fact which We shall not
review as long as the same is supported by evidence. (Sec. 15, Com. Act No. 103, as amended, Philippine
Newspaper Guild v. Evening News, Inc., 86 Phil. 303).

That is why We brushed aside petitioner's contention in one case that workers who worked under a 6
a.m. to 6 p.m. schedule had enough "free time" and therefore should not be credited with four hours of
overtime and held that the finding of the CIR "that claimants herein rendered services to the Company
from 6:00 a.m. to 6:00 p.m. including Sundays and holidays, . . . implies either that they were not
allowed to leave the spot of their working place, or that they could not rest completely" (Luzon
Stevedoring Co., Inc. v. Luzon Marine Department Union, et al., G.R. No. L-9265, April 29, 1957).

Indeed, it has been said that no general rule can be laid down is to what constitutes compensable work,
rather the question is one of fact depending upon particular circumstances, to be determined by the
controverted in cases. (31 Am. Jurisdiction Sec. 626 pp. 878.)

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. Thus, the CIR found:

While it may be correct to say that it is well-high impossible for an employee to work while he is eating,
yet under Section 1 of Com. Act No. 444 such a time for eating can be segregated or deducted from his
work, if the same is continuous and the employee can leave his working place rest completely. 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 freely leave their working place nor rest completely.
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.

Petitioner gives an eight-hour credit to its employees who work a single shift say from 6 a.m. to 2 p.m.
Why cannot it credit them sixteen hours should they work in two shifts?
There is another reason why this appeal should dismissed and that is that there is no decision by the
CIR en banc from which petitioner can appeal to this Court. As already indicated above, the records
show that petitioner's motion for reconsideration of the order of March 19, 1959 was dismissed by the
CIR en banc because of petitioner's failure to serve a copy of the same on the union.

Section 15 of the rules of the CIR, in relation to Section 1 of Commonwealth Act No. 103, states:

The movant shall file the motion (for reconsideration), in six copies within five (5) days from the date on
which he receives notice of the order or decision, object of the motion for reconsideration, the same to
be verified under oath with respect to the correctness of the allegations of fact, and serving a copy
thereof personally or by registered mail, on the adverse party. The latter may file an answer, in six (6)
copies, duly verified under oath. (Emphasis ours.)

In one case (Bien, et al. v. Castillo, etc., et al., G.R. No. L-7428, May 24, 1955), We sustained the dismissal
of a motion for reconsideration filed outside of the period provided in the rules of the CIR. A motion for
reconsideration, a copy of which has not been served on the adverse party as required by the rules,
stands on the same footing. For "in the very nature of things, a motion for reconsideration against a
ruling or decision by one Judge is in effect an appeal to the Court of Industrial Relations, en banc," the
purpose being "to substitute the decision or order of a collegiate court for the ruling or decision of any
judge." The provision in Commonwealth Act No. 103 authorizing the presentation of a motion for
reconsideration of a decision or order of the judge to the CIR, en banc and not direct appeal therefore to
this Court, is also in accord with the principal of exhaustion of administrative remedies before resort can
be made to this Court. (Broce, et al., v. The Court of Industrial Relations, et al., G.R. No. L-12367,
October 29, 1959).

Petitioner's motion for reconsideration having been dismissed for its failure to serve a copy of the same
on the union, there is no decision of the CIR en banc that petitioner can bring to this Court for review.

WHEREFORE, the order of March 19, 1959 and the resolution of April 27, 1959 are hereby affirmed and
the appeal is dismissed, without pronouncement as to costs.

Padilla, Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L., Barrera, Paredes, Dizon and
Makalintal concur.
Bengzon, C.J., took no part.

EN BANC

G.R. No. L-9265             April 29, 1957

LUZON STEVEDORING CO., INC., petitioner,

vs.
LUZON MARINE DEPARTMENT UNION and THE HON. MODESTO CASTILLO, THE HON. JOSE S.
BAUTISTA, THE HON. V. JIMENEZ YANSON and THE HON. JUAN L. LANTING, Judges of the Court of
Industrial Relations, respondents.
 Perkins, Ponce Enrile and Associates for petitioner.
Mariano B. Tuason for respondent Judge of the Court of Industrial Relations.
Sioson, Roldan and Vidanes for respondent union.

FELIX, J.:

This case involves a petition for certiorari filed by the Luzon Stevedoring Co., Inc., to review a resolution
dated June 5, 1955, issued by the Court of Industrial Relations. On September 5, 1955, with leave of
court, a supplemental petition was filed by said petitioner, and both petitions were given due course by
resolution of this Court of September 15, 1955. The facts of the case may be summarized as follows:

On June 21, 1948, herein respondent Luzon Marine Department Union filed a petition with the Court of
Industrial Relations containing several demands against herein petitioner Luzon Stevedoring Co., Inc.,
among which were the petition for full recognition of the right of COLLECTIVE bargaining, close shop and
check off. However, on July 18, 1948, while the case was still pending with the CIR, said labor union
declared a strike which was ruled down as illegal by this Court in G.R. No. L-2660 promulgated on May
30, 1950. In view of said ruling, the Union filed a "Constancia" with the Court of Industrial Relations
praying that the remaining unresolved demands of the Union presented in their original petition, be
granted. Said unresolved demands are the following:

a. Point No. 2.

That the work performed in excess of eight (8) hours he paid an overtime pay of 50 per cent the regular
rate of pay, and that work performed on Sundays and legal holidays be paid double the regular rate of
pay.

b. Point No. 7.

That all officers, engineers and crew members of motor tugboats who have not received their pay
corresponding to the second half of December, 1941, be paid accordingly.

c. Point No. 11.

That Ciriaco Sarmiento, Chief Mate, M/V Marlin, Rafael Santos, Port Engineer, and Lorenzo de la Cruz,
Chief Engineer, M/V Shark who have been suspended without justifiable cause and for union activities,
be reinstated with pay from time of suspension.

d. Point No. 12.

That all officers, engineers and crew members of the motor tugboats "Shark", "Hearing", "Pike" and
"Ray", who have been discharged without justifiable cause and for union activities, be reinstate with pay
from time of discharge. (p. 65-66, Record).

On the basis of these demands, the case was set for hearing and the parties submitted their respective
evidence, both oral and documentary, from June 8,1951, to January 7, 1954. In one of the hearings of
the case, the original intervenor in Union de Obreros Estibadores de Filipinas (UOEF), through counsel,
moved for the withdraw al of said Union from the case, which motion was granted by the Court.

After the parties had submitted exhaustive memoranda, the trial Judge rendered a decision on February
10, 1955, finding that the company gave said employees 3 free meals every day and about 20 minutes
rest after each mealtime; that they worked from 6:00 am. to 6:00 p.m. every day including Sundays and
holidays, and for work performed in excess of 8 hours, the officers, patrons and radio operators were
given overtime pay in the amount of P4 each and P2 each for the rest of the crew up to March, 1947,
and after said date, these payments were increased to P5 and P2.50, respectively, until the time of their
separation or the strike of July 19, 1948; that when the tugboats underwent repairs, their personnel
worked only 8 hours a day excluding Sundays and holidays; that although there was an effort on the part
of claimants to show that some had worked beyond 6:00 p.m., the evidence was uncertain and
indefinite and that demand was, therefore, denied; that respondent Company, by the nature of its
business and as defined by law (Section 18-b of Commonwealth Act as amended) is considered a public
service operator by the Public Service Commission in its decision in case No. 3035-C entitled "Philippine
Shipowners. Association vs. Luzon Stevedoring Co., Inc., et al."(Exh. 23), and, therefore, exempt from
paying additional remuneration or compensation for work performed on Sundays and legal holidays,
pursuant to the provisions of section 4 of Commonwealth Act No. 444 (Manila Electric Co. vs. Public
Utilities Employees Association, 79 Phil., 408. 44 Off. Gaz., 1760); and ruled that:

For the above reasons, the aforementioned employees are only entitled to receive overtime pay for
work rendered in excess of 8 hours on ordinary days including Sundays and legal holidays.

However, the respondent company has proved to the satisfaction of the Court that it has paid its
employees for such overtime work as shown above Exhs. 1 to 20-B).

It is, therefore, only a matter of computation whether such over time pay by the respondent for
overtime services rendered covers the actual overtime work performed by the employees concerned
equivalent to 25 per cent which is the minimum rate fixed by law in the absence of other proof to justify
the granting of more beyond said minimum rate.

Demands Nos. 11 and 12 regarding the reinstatement to the service of the employees named therein
were denied and respondent Company was only or to pay the separation pay and overtime work
rendered by Ciriaco Sarmiento, Rafael Santos and Lorenzo de la Cruz, after making the pronouncement
that their separation or dismissal was not due to union activities but for valid and legal grounds.

The Luzon Marine Department Union, through counsel, therefore, filed a motion for reconsideration
praying that the decision of February 10, 1955, be modified so as to declare and rule that the members
of the Union who had rendered services from 6:00 a.m. to 6:00 p.m. were entitled to 4 hours' overtime
pay; that allotted to the taking of their meals should not be deducted from the 4 hours of overtime
rendered by said employees, that the amounts of P3 and P2 set aside for the daily meals of the
employees be considered as part of their actual compensation in determining the amount due to said
employees separated from the service without just cause be paid their unearned wages and salaries
from the date of their separation up to the time the decision in case L-2660 became final; and for such
other relief as may be just and equitable in the premises.

Luzon Stevedoring Co., Inc. also sought for the reconsideration of the decision only in so far as it
interpreted that the period during which a seaman is aboard a tugboat shall be considered as "working
time" for the purpose of the Eight-Hour-Labor Law.

In pursuance of Section 1 of Commonwealth Act No. 103, as amended by Commonwealth Act No. 254
and further amended by Commonwealth Act No. 559, the motions for reconsideration were passed
upon by the Court en banc, and on June 6, 1955, a resolution modifying the decision of February 10,
1955, was issued, in the sense that the 4 hours of overtime work included in the regular daily schedule
of work from 6:00 a.m. to 6:00 p.m. should be paid independently of the so-called "coffee-money", after
making a finding that said extra amounts were given to crew members of some tugboats for work
performed beyond 6:00 p.m. over a period of some 16 weeks. The Company's motion for
reconsideration was denied.

From this resolution, the Luzon Stevedoring Co., Inc. filed the present petition for certiorari and when
the Court of Industrial Relations, acting upon said Company's motion for clarification, ruled that the 20
minutes' rest given the claimants after mealtime should not be deducted from the 4 hours of overtime
worked performed by said claimants, petitioner filed a supplemental petition for certiorari dated
September 5, 1955, and both petitions were given due course by this Court.

Respondent Luzon Marine Labor Union filed within the reglementary period a motion to dismiss, which
this Court considered as an answer by resolution of October 14, 1955, alleging that the decision,
resolution and order of the Court of Industrial Relations sought to be reviewed by petitioner do not
present any question of law, the issues in said CIR case No. 147-V being purely factual. The respondent
Judges of the Court of Industrial Relations, represented by counsel, timely filed an answer likewise
asserting that there could have been no question of law involved or error of law committed by the said
Judges in the resolutions appealed from, same having been based on purely findings of fact.

In this instance, petitioner does not seek to alter the lower court's finding that the regular daily schedule
of work of the members of the herein respondent Union was from 6:00 a.m. to 6:00 p.m. Petitioner,
however, submits several "issues" which We will proceed to discuss one after the other. They are the
following:

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

Petitioner questions the applicability to seamen of the interpretation given to the phrase "hours of
work" for the purpose of the Eight-Hour Labor Law, insinuating that although the seamen concerned
stayed in petitioner's tugboats, or merely within its compound, for 12 hours, yet their work was not
continuous but interrupted or broken. It has been the consistent stand of petitioner that while it is true
that the workers herein were required to report for work at 6:00 a.m. and were made to stay up to 6:00
p.m., their work was not continuous and they could have left the premises of their working place were it
not for the inherent physical impossibility peculiar to the nature of their duty which prevented them
from leaving the tugboats. It is the Company's defense that a literal interpretation of what constitutes
non-working hours would result in absurdity if made to apply to seamen aboard vessels in bays and
rivers, and We are called upon to make an interpretation of the law on "non-working hours" that may
comprehend within its embrace not only the non-working hours of laborers employed in land jobs, but
also of that particular group of seamen, i.e., those employed in vessels plying in rivers and bays, since
admittedly there is no need for such ruling with respect to officers and crew of interisland vessels which
have aboard 2 shifts of said men and strictly follow the 8-hour working period.

Section 1 of Commonwealth Act No. 444, known as the Eight-Hour Labor Law, provides:
SEC. 1. The legal working day for any person employed by another shall be of not more than eight hours
daily. When the work is not continuous, the time during which the laborer is not working AND CAN
LEAVE HIS WORKING PLACE and can rest completely, shall not be counted.

The requisites contained in this section are further implemented by contemporary regulations issued by
administrative authorities (Sections 4 and 5 of Chapter III, Article 1, Code of Rules and Regulations to
Implement the Minimum Wage Law).

For the purposes of this case, We do not need to set for seamen a criterion different from that applied
to laborers on land, for under the provisions of the above quoted section, the only thing to be done is to
determine the meaning and scope of the term "working place" used therein. As We understand this
term, a laborer need not leave the  premises  of the factory, shop or boat in order that his period of rest
shall not be counted, it being enough that he "cease to work", may rest completely and leave or may
leave at his will the spot where he actually stays while working, to go somewhere else, whether within
or outside the premises of said factory, shop or boat. If these requisites are complied with, the period of
such rest shall not be counted.

In the case at bar We do not need to look into the nature of the work of claimant mariners to ascertain
the truth of petitioners allegation that this kind of seamen have had enough "free time", a task of which
We are relieved, for although after an ocular inspection of the working premises of the seamen affected
in this case the trial Judge declared in his decision that the Company gave the complaining laborers 3
free meals a day with a recess of 20 minutes after each meal, this decision was specifically amended by
the Court en banc in its Resolution of June 6, 1955, wherein it held that the claimants herein rendered
services to the Company from 6:00 a.m. to 6:00 p.m. including Sundays and holidays, which implies
either that said laborers were not given any recess at all, or that they were not allowed to leave
the spot of their working place, or that they could not rest completely. And such resolution being on a
question essentially of fact, this Court is now precluded to review the same (Com. Act No. 103, Sec. 15,
as amended by Sec. 2 of Com. Act No. 559; Rule 44 of the Rules of Court; Kaisahan Ng Mga Manggagawa
sa Kahoy sa Filipinas vs. Gotamco Sawmill, 80 Phil., 521; Operators, Inc. vs. Pelagio, 99 Phil, 893, and
others).

II. Should a person be penalized for following an opinion issued by the Secretary of Justice in the
absence of any judicial pronouncement whatsoever?

Petitioner cites Opinion No. 247, Series of 1941 of the Secretary of Justice to a query made by the
Secretary of Labor in connection with a similar subject matter as the one involved, in this issue, but that
opinion has no bearing on the case at bar because it refers to officers and crew on board interisland
boats whose situation is different from that of mariners or sailors working in small tugboats that ply
along bays and rivers and have no cabins or places for persons that man the same. Moreover, We can
not pass upon this second issue because, aside from the fact that there appears nothing on record that
would support petitioner's assertion that in its dealing with its employees, it was guided by an opinion of
the Secretary of Justice, the issue involves a mere theoretical question.

III. When employees with full knowledge of the law, voluntarily agreed to work for so many hours in
consideration of a certain definite wage, and continue working without any protest for a period of
almost two years, is said compensation as agreed upon legally deemed and retroactively presumed to
constitute full payment for all services rendered, including whatever overtime wages might be due?
Especially so if such wages, though received years before the enactment of the Minimum Wage Law,
were already set mostly above said minimum wage?

IV. The members set of respondent Union having expressly manifested acquiescence over a period of
almost two years with reference to the sufficiency of their wages and having made no protest
whatsoever with reference to said compensation does the legal and equitable principle of estoppel
operate to bar them from making a claim for, or making any recovery of, back overtime compensation?

We are going to discuss these two issues jointly. Section 6 of Commonwealth Act No. 444 provides:

Sec. 6. Any agreement or contract between the employer and the laborer or employee contrary to the
provisions of this Act shall be null and void ab initio.

In the case of the Manila Terminal Co. vs. Court of Industrial Relations et al., 91 Phil., 625, 48 Off. Gaz.,
2725, this Court held:

The principles of estoppel and laches cannot be, invoked against employees or laborers in an action for
the recovery of compensation for past overtime work. In the first place, it would be contrary to the spirit
of the Eight-Hour Labor Law, under which. as 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 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 a claim which may cause the employer to devise a way for exercising his right
to terminate the employment.

Moreover, if the principle of estoppel and laches is to be applied, it would bring about a situation
whereby the employee or laborer, can not expressly renounce the right to extra compensation under
the Eight-Hour Labor Law, may be compelled to accomplish the same thing by mere silence or lapse of
time, thereby frustrating the purpose of the law by indirection.

This is the law on the matter and We certainly adhere, to it in the present case. We deem it, however,
convenient to say a few words of explanation so that the principle enunciated herein may not lead to
any misconstruction of the law in future cases. There is no question that the right of the laborers to
overtime pay cannot be waived. But there may be cases in which the silence of the employee or laborer
who lets the time go by for quite a long period without claiming or asserting his right to overtime
compensation may favor the inference that he has not worked any such overtime or that his extra work
has been duly compensated. But this is not so in the case at bar. The complaining laborers have declared
that long before the filing of this case, they had informed Mr. Martinez, a sort of overseer of the
petitioner, that they had been working overtime and claiming the corresponding compensation
therefor, and there is nothing on record to show that the claimants, at least the majority of them, had
received wages in excess of the minimum wage later provided by Republic Act No. 602, approved April
6, 1951. On the contrary, in the decision of the trial Judge, it appears that 34 out of the 58 claimants
received salaries less than the minimum wage authorized by said Minimum Wage Law, to wit:

Per
month

1. Ambrosio Tañada …………….. oiler P82.50

      but after passing the
examinations his wages were
increased to P225 per month;

2. Patricio Santiago …………….. quartermaster 82.50

      but after passing the
examinations his wages were
increased to P225 per month;

3. Fidelino Villanueva …………… oiler 82.50

4. Pedro Filamor ………………… quartermaster 82.50

      then his wage was reduced to
P67.50 per month as cook;

5. Emiliano Irabon ………………. seaman 82.50

      then his wage was reduced to
P60 and he stayed for 1 month only;
it was increased again to P67.50;

6. Juanito de Luna oiler 82.50

7. Benigno Curambao oiler 82.50

8. Salvador Mercadillo oiler 82.50

9. Nicasio Sta. Lucia cook 82.50

10. Damaso Arciaga seaman 82.50

11. Leonardo Patnugot oiler 82.50

12. Bienvenido Crisostomo oiler 82.50

13. Isidro Malabanan cook 82.50

14. Saturnino Tumbokon seaman 67.50

15. Bonifacio Cortez quartermaster 82.50

16. Victorio Carillo cook 67.50

17. Francisco Atilano cook 67.50

18. Gualberto Legaspi seaman 67.50

19. Numeriano Juanillo quartermaster 82.50

20. Moises Nicodemus quartermaster 82.50

 21. Arsenio Indiano seaman 82.50

22. Ricardo Autencio oiler 82.50

23. Mateo Arciaga seaman 67.50

24. Romulo Magallanes quartermaster 82.50

25. Antonio Belbes seaman 67.50

26. Benjamin Aguirre quartermaster 82.50

27. Emilio Anastasio quartermaster 82.50

28. Baltazar Labrada oiler 82.50

29. Emeterio Magallanes seaman 67.50

30. Agripino Laurente quartermaster 82.50

31. Roberto Francisco oiler 82.50

32. Elias Matrocinio seaman 82.50

33. Baltazar Vega seaman 67.50

34. Jose Sanchez oiler 82.50

Consequently, for lack of the necessary supporting evidence for the petitioner, the inference referred to
above cannot be drawn in this case.

V. Granting, without conceding, that any overtime pay in arrears is due, what is the extent and rule of
retro-activity with reference to overtime pay in arrears as set forth and established by the precedents
and policies of the Court of Industrial Relations in past decisions duly affirmed by the Honorable
Supreme Court?

VI. Is the grant of a sizeable amount as back overtime wages by the Court of Industrial Relations in
consonance with the dictates of public policy and the avowed national and government policy on
economic recovery and financial stability?

In connection with issue No. 5, petitioner advances the theory that the computation of the overtime
payment in arrears should be based from the filing of the petition. In support of this contention,
petitioner cites the case of Gotamco Lumber Co. vs- Court of Industrial Relations, 85 Phil., 242; 47 Off.
Gaz., 3421. This case is not in point; it merely declares that Commonwealth Act No. 444 imposes upon
the employer the duty to secure the permit for overtime work, and the latter may not therefore be
heard to plead his own negligence as exemption or defense. The employee in rendering extra services at
the request of his employer has a right to assume that the latter has complied with the requirements of
the law and therefore has obtained the required permission from the Department of Labor (47 Off, Gaz.,
3421). The other decisions of the Court of Industrial Relations cited by petitioner, to wit: Cases 6-V, 7-V
and 8-V, Gotamco & Co., Dy Pac & Co., Inc. and D. C. Chuan; Case 110-V, National Labor Union vs.
Standard Vacuum Oil Co.; Case No. 76-v, Dee Cho Workers, CLO vs. Dee Cho Lumber Co., and Case No.
70-V, National Labor Union vs. Benguet Consolidated Mining Co., do not seem to have reached this
Court and to have been affirmed by Us.

It is of common occurrence that a workingman has already rendered services in excess of the statutory
period of 8 hours for some time before he can be led or he can muster enough courage to confront his
employer with a demand for payment thereof. Fear of possible unemployment sometimes is a very
strong factor that gags the man from asserting his right under the law and it may take him months or
years before he could be made to present a claim against his employer. To allow the workingman to be
compensated only from the date of the filing of the petition with the court would be to penalize him for
his acquiescence or silence which We have declared in the case of the Manila Terminal Co. vs. CIR,
supra, to be beyond the intent of the law. It is not just and humane that he should be deprived of what
is lawfully his under the law, for the true intendent of Commonwealth Act No. 444 is to compensate the
worker for services rendered beyond the statutory period and this should be made to retroact to the
date when such services were actually performed.

Anent issue No. VI, petitioner questions the reasonableness of the law providing for the grant of
overtime wages. It is sufficient for Us to state here that courts cannot go outside of the field of
interpretation so as to inquire into the motive or motives of Congress in enacting a particular piece of
legislation. This question, certainly, is not within Our province to entertain.

It may be alleged, however, that the delay in asserting the right to back overtime compensation may
cause an unreasonable or irreparable injury to the employer, because the accumulation of such back
overtime wages may become so great that their payment might cause the bankruptcy or the closing of
the business of the employer who might not be in a position to defray the same. Perhaps this situation
may occur, but We shall not delve on it this time because petitioner does not claim that the payment of
the back overtime wages it is ordered to pay to its claimant laborers will cause the injury it foresees or
force it to close its business, a situation which it speaks of theoretically and in general.

VII. Should not a Court of Industrial Relations' resolution, en banc, which is clearly unsupported in fact
and in law, patently arbitrary and capricious and absolutely devoid of sustaining reason, be declared
illegal? Especially so, if the trial court's decision which the resolution en banc reversed, is most detailed,
exhaustive and comprehensive in its findings as well as most reasonable and legal in its conclusions?
This issue was raised by petitioner in its supplemental petition and We have this much to say. The Court
of Industrial Relations has been considered "a court of justice" (Metropolitan Transportation Service vs.
Paredes,* G.R. No. L-1232, prom. January 12, 1948), although in another case. We said that it is "more an
administrative board than a part of the integrated judicial system of the nation" (Ang Tibay vs. Court of
Industrial Relations, 69 Phil., 635). But for procedural purposes, the Court of Industrial Relations is a
court with well-defined powers vested by the law creating it and with such other powers as generally
pertain to a court of justice (Sec. 20, Com. Act No. 103). As such, the general rule that before a judgment
becomes final, the Court that rendered the same may alter or modify it so as to conform with the law
and the evidence, is applicable to the Court of Industrial Relations (Connel Bros. Co.(Phil.) vs. National
Labor Union, G.R. No. L-3631, prom. January 30, 1956). The law also provides that after a judge of the
Court of Industrial Relations, duly designated by the Presiding Judge therein to hear a particular case,
had rendered a decision, any agrieved party may request for reconsideration thereof and the judges of
said Court shall sit together, the concurrence of the 3 of them being necessary for the pronouncement
of a decision, order or award (See. 1, Com. Act No. 103). It was in virtue of these rules and upon motions
for reconsideration presented by both parties that resolution subject of the present petition was issued,
the Court en banc finding it necessary to modify a part of the decision of February 10, 1955, which is
clearly within its power to do.

On the other hand, the issue under consideration is predicated on a situation which is not obtaining in
the case at bar, for, it presupposes that the resolutions en banc of the respondent Court "are clearly
unsupported in fact and in law, patently arbitrary and capricious and absolutely devoid of any sustaining
reason", which does not seem to be the case as a matter of fact.

Wherefore, and on the strength of the foregoing consideration, the resolutions of the Court of Industrial
Relations appealed from are hereby affirmed, with costs against petitioner. It is so ordered.

Bengzon, Padilla, Reyes, A., Bautista Angelo, Labrador. Concepcion, Reyes, J.B.L. and Endencia,
JJ., concur.

EN BANC

G.R. No. L-16275             February 23, 1961

PAN AMERICAN WORLD AIRWAYS SYSTEM (PHILIPPINES), petitioner, vs. PAN AMERICAN EMPLOYEES
ASSOCIATION, respondent.

Ross, Selph and Carrascoso for petitioner.

Jose Espinas for respondent.

REYES, J.B.L., J.:

Appeal by certiorari from the decision of the Court of Industrial Relations in Case No. 1055-V dated
October 10, 1959, and its resolution en banc denying the motion for reconsideration filed by the
petitioner herein.

The dispositive portion of the appealed decision reads: .

WHEREFORE, the Court orders the Chief of the Examining Division or his representative to compute the
overtime compensation due the aforesaid fourteen (14) aircraft mechanic and the two employees from
the Communication Department based on the time sheet of said employees from February 23 1952 up
to and including July 15, 1958 and to submit his report within 30 days for further disposition by the
Court; and the company shall show to the Court Examiner such time sheets an other documents that
may be necessary in the aforesaid computation; and two (2) representatives for the company and two
(2) representatives for the union shall be chosen to help the Court Examiner in said computation.

The company is also ordered to permanently adopt the straight 8-hour shift inclusive of meal period
which is mutually beneficial to the parties.
SO ORDERED.

In this appeal, petitioner advances five proposition which, briefly, are as follows: (1) the Industrial Court
has no jurisdiction to order the payment of overtime compensation, it being a mere monetary claim
cognizable by regular courts; (2) the finding that the one-hour meal period should be considered
overtime work (deducting 15 minutes as time allotted for eating) is not supported by substantial
evidence; (3) the court below had no authority to delegate its judicial functions by ordering the Chief of
the Examining Division or his representative to compute the overtime pay; (4) the finding that there was
no agreement to withdraw Case No. 1055-V in consideration of the wage increases in the Collective
Bargaining Contract (Exh. "A") is not supported by substantial evidence; and (5) the court below had no
authority to order the company to adopt a straight 8-hour shift inclusive of meal period.

On the issue of jurisdiction over claims for overtime pay, we have since definitely ruled in a recent
decisions that the Industrial Court may properly take cognizance of such cases if, at the time of the
petition, the complainants were still in the service of the employer, or, having been separated from such
service, should ask for reinstatement; otherwise, such claims should be brought before the regular
courts (NASSCO v. CIR, et al., L-13888, April 29, 1960; FRISCO v. CIR, et al., L-13806, May 23, 1960; Board
of Liquidators, et al. vs. CIR, et al., L-15485, May 23, 1960; Sta. Cecilia, Sawmills Co. vs. CIR, L-14254 & L-
14255, May 27, 1960; Ajax International Corp. v. Seguritan, L-16038, October 25, 1960; Sampaguita
Pictures, Inc., et al. vs. CIR, L-16404, October 25, 1960). Since, in the instant case there is no question
that the employees claiming overtime compensation were still in the service of the company when the
case was filed, the jurisdiction of the Court of Industrial Relations cannot be assailed. In fact, since it is
not pretended that, thereafter, the complainants were discharged or otherwise terminated their
relationship with the company for any reason, all of said complainants could still be with the company
up to the present.

Petitioner herein claims that the one-hour meal period should not be considered as overtime work (after
deducting 15 minutes), because the evidence showed that complainants could rest completely, and
were not in any manner under the control of the company during that period. The court below found,
on the contrary, that during the so called meal period, the mechanics were required to stand by for
emergency work; that if they happened not to be available when called, they were reprimanded by the
leadman; that as in fact it happened on many occasions, the mechanics had been called from their meals
or told to hurry Employees Association up eating to perform work during this period. Far from being
unsupported by substantial evidence, the record clearly confirms the above factual findings of the
Industrial Court.

Similarly, this Court is satisfied with the finding that there was no agreement to withdraw Case No.
1055-V in consideration of the wage increases obtained by the, union and set forth in the Collective
Bargaining Agreement Exhibit "A". As reasoned out by the court below, such alleged agreement would
have been incorporated in the contract if it existed. The fact that the union filed a motion to dismiss
without prejudice, after the Collective Bargaining Contract had been signed, did not necessarily mean
that it had agreed to withdraw the case in consideration of the wage increases. The motion itself (Annex
"B", Petition for Certiorari) was expressly based on an understanding that the company would
"formulate a schedule of work which shall be in consonance with C. A. 444". All in all, there is substantial
evidence in the record to support the finding of the court below that no such agreement was made.
It is next contended that in ordering the Chief of the Examining Division or his representative to
compute the compensation due, the Industrial Court unduly delegated its judicial functions and thereby
rendered an incomplete decision. We do not believe so. Computation of the overtime pay involves a
mechanical function, at most. And the report would still have to be submitted to the Industrial Court for
its approval, by the very terms of the order itself. That there was no specification of the amount of
overtime pay in the decision did not make it incomplete, since this matter would necessarily be made
clear enough in the implementation of the decision (see Malate Taxicab & Garage, Inc. vs. CIR, et al., L-
8718, May 11, 1956).

The Industrial Court's order for permanent adoption of a straight 8-hour shift including the meal period
was but a consequence of its finding that the meal hour was not one of complete rest, but was actually a
work hour, since for its duration, the laborers had to be on ready call. Of course, if the Company
practices in this regard should be modified to afford the mechanics a real rest during that hour (f. ex., by
installing an entirely different emergency crew, or any similar arrangement), then the modification of
this part of the decision may be sought from the Court below. As things now stand, we see no warrant
for altering the decision.

The judgment appealed from is affirmed. Costs against appellant.

Bengzon, Padilla, Bautista Angelo, Labrador, Concepcion , Barrera, Paredes and Dizon, JJ., concur.

EN BANC

G.R. No. L-13806             May 23, 1960

PRICE STABILIZATION CORPORATION, petitioner, vs. COURT OF INDUSTRIAL RELATIONS and PRISCO

WORKER'S UNION, ET AL., respondents.

Govt. Corp. Counsel Simeon M. Gopengco and Lorenzo R. Mosqueda for petitioner.
Ezer R. Yutuc for the respondent CIR.
Vicente T. Ocampo for respondent Union.

BARRERA, J.:

This is a petition for review by certiorari taken by the Price Stabilization Corporation (PRISCO) from the
decision of the Court of Industrial Relations (in Case No. 840-V [6]) of December 27, 1957.

It appears that under date of February 15, 1955, respondent PRISCO Worker's Union, a labor
organization duly registered with the Department of Labor, filed with respondent court, a petition
praying that herein petitioner-employer PRISCO be ordered to pay its present employees, claimants-
members of the said Union, their basic pay and at least 25 per cent additional compensation for one
hour overtime work they had previously rendered as security guards of petitioner, from April 17, 1953 to
January 13, 1954, and the additional compensation of at least 25 per cent for the work they have been
rendering on Sundays and legal holidays, from March 7, 1954 and on.
On March 15, 1955, the petitioner filed an answer denying respondent Union's claim for payment of one
hour overtime work, asserting that such overtime, if rendered, not having been authorized; although
some of the said claimants had rendered work in Sundays and legal holidays, the same had already been
paid from March 6, 1954; and finally alleging that the same claim for work on Sundays and legal holidays
had already been withdrawn.

The case was thereafter heard and, after hearing, respondent court, on December 27, 1957, issued an
order requiring petitioner to pay the said claimants, members of respondent Union, their basic pay and
25 per cent additional compensation for the one hour overtime work they had rendered from April 16,
1953 to January 13, 1954. However, for lack of evidence and in view of a petition signed by 59 of the 131
claimants withdrawing their claim for pay for work performed on Sundays and legal holidays, the court
dismissed the second claim.

On January 8, 1958, petitioner corporation filed a motion for reconsideration of said order, which
motion was resolved by respondent court, en banc, as follows: 2 judges voting for straight denial; 2
judges voting for the setting aside of the order as null and void on the ground of lack of jurisdiction; and
1 judge concurring in the denial of the motion for reconsideration, on the ground that the question of
lack of jurisdiction has not been raised in the pleading. As a result; petitioner corporation has filed this
present petition.

There are two questions of law to be determined in this case, to wit: (1) whether respondent court had
jurisdiction over the present claim for overtime pay filed by respondent Union; and (2) whether the
same court correctly applied Articles 1393 and 1396 to the new Civil Code to the case.

As to the first question, there still seems to be some lack of clear and definite understanding of the
jurisdiction of the Court of Industrial Relations, with regards to money claims of laborers or employees
against their employers. The fact that in the present case the judges themselves of the Court of
Industrial Relations are divided on this matter, attests to the existence of such misapprehension. It is
well therefore to review some of the leading decided cases touching on this point, for the purpose of
clarifying this fundamental question.

In the PAFLU vs. Tan Case,1 we held that the Court of Industrial Relations has jurisdiction over cases (1)
when the labor dispute affects an industry which is indispensable in the national interest and is so
certified by the President to the industrial court (Sec. 10, Rep. Act No. 875); (2) when the controversy
refers to the minimum wage under the Minimum Wage Law (Rep. Act No. 602); (3) when it involves
hours of employment under the Eight-Hour Labor Law (Com. Act No. 444); and (4) when it involves an
unfair labor practice (Sec. 5-a, Rep. Act No. 875).

Later, in the case of Detective and Protective Bureau Incorporated vs. Felipe Guevarra, et al.,2 involving
claims for refunds of deductions from respondents' salaries, payment of additional compensation for
work performed on Sundays and holidays, and for night work, and grant of vacation and sick leave pay,
this Court held that the Court of Industrial Relations had jurisdiction, inasmuch as the claimants were all
employees of the Detective and Protective Bureau, Inc., at the time of filing of their claims in Case No.
764-V in the Court of Industrial Relations. To the same effect is the case of Isaac Peral Bowling Alley vs.
United Employees Welfare Association, et al., (102 Phil., 219).
Subsequently, in the case of Santiago Aguilar vs. Jose Salumbides  (G.R. No. L-10124, prom, December
28, 1957), this Court declared that the Court of Industrial Relations had no longer jurisdiction to hear
and determine claims of ex-employees against their former employer for overtime, wage differential,
and separation pays.

Again, in the case of Roman Catholic Archbishop of Manila vs. Yanson, et al.,(G.R. No. L-12341)
and Elizalde and Co. Inc., vs. Yanson et al., (G.R. No. L-12345) jointly decide on April 30, 1958, this Court,
in a unanimous opinion, declared:

In the present case, it is apparent that the petition below is simply for the collection of unpaid salaries
and wages alleged to be due for the services rendered years ago. No labor dispute appears to be
presently involved since the petition itself indicates that the employment has long terminated and
petitioners are not asking that they be reinstated. Clearly, the petition does not fall under any of the
cases enumerated in the law as coming within the jurisdiction of the Industrial Court, so that it was error
for that court not to have ordered its dismissal.

Indeed, even under Commonwealth Act No. 103, as amended by Com. Act No. 559, the court below
could not have taken cognizance of the present case. For in order for that court to acquire jurisdiction
under that law, the requisites mentioned in section 4 thereof must all be present, one of them being
that there must be an industrial or agricultural dispute which is causing of likely to cause a strike or
lockout. With the employment already terminated years ago, this last mentioned requisite cannot be
supposed to still exist.

Then came the decision in the NASSCO vs. Almin, et al., case  (104 Phil., 835;56 Off. Gaz. [9] 1879) in
which this Court upheld again the jurisdiction of the Court of Industrial Relations to hear and determine
the claim of respondents at the time presently and actually in the employ of the petitioner — for
overtime compensation for work they were then rendering since 1950 on Sundays and holidays and
even at night.

On the same theory, this Tribunal and the Chua Workers' Union (NLU) vs. City Automotive Company, et
al., case3 were the claimants for differential and overtime pays were former employees of the
respondent company, ruled that the Court of Industrial Relations had no jurisdiction.

The latest case is that of Monares vs. CNS Enterprises, et al., (G.R. No. L-11749, prom. May 29, 1959) in
which this Court, speaking through the Chief Justice, held that the Court of Industrial Relations and not
the Court of First Instance, has jurisdiction where the claimant, although no longer in the service of the
employer, seeks in his petition the payment of differential and overtime pay and his reinstatement.

Analyzing these cases, the underlying principle, it will be noted in all of them, though not stated in
express terms, is that where the employer-employee relationship is still existing or is sought to be
reestablished because of its wrongful severance (as where the employee seeks reinstatement), the
Court of Industrial Relations has jurisdiction over all claims arising out of, or in connection with
employment, such as those related to the Minimum Wage Law and the Eight-Hour Labor Law. After the
termination of the relationship and no reinstatement is sought, such claims becomes mere money
claims, and come within the jurisdiction of the regular courts.
We are aware that in 2 cases,4 some statements implying a different view have been made, but we now
hold and declare the principle set forth in the preceding paragraph as the one governing all cases of this
nature.

It appearing that in the present case, the respondents-claimants are, or at least were, at the time of
presenting their claims, actually in the employ of herein petitioner, the Court of Industrial Relations
correctly took cognizance of the case.

In respect of the second issue, it appears that claimants-security guards have been employed and
required to observe a 24-hour guard duty divided into 3 shifts of 8 hours each. On April 15, 1953, the
Assistant Chief Security Officer of petitioner corporation, acting for the Chief Security Officer, issued a
Memorandum (Annex A), directing the Security guards to report for duty 2 hours in advance of the usual
time for guard work. Pursuant thereto, claimants had been rendering such overtime work until January
13, 1954 when the order was revoked after a change of management.

Petitioner, however, contends that said memorandum of the Assistant Chief Security Officer was issued
without authority and, therefore, it is not bound to pay for the alleged overtime. But, as found by
respondent court, shortly after the enforcement of the aforementioned memorandum, the security
guards protested to the management of petitioner corporation, more particularly to Mr. Santiago de la
Cruz, General Manager, Atty. Graciano Borja, Director, and Mr. Espiritu, Director. Instead of revoking
said memorandum on the ground that it was unauthorized by the management, General Manager De la
Cruz told the security guards that the reason why it was being enforced, was to discipline them and that
their work was only light and that 1 hour was of no importance. This, the lower court held, amounted to
a tacit ratification of the memorandum, on the part of the said official who, as claimed by petitioner
itself, had the power to validly act for it. (See also Sec. 6, Exec. Order No. 350, series of 1950.) Hence,
the lower court concluded, applying the provisions of Articles 1393 and 1396 5 of the new Civil Code, that
any defect, if any which said memorandum of the Assistant Chief Security Officer may have at the time it
was constituted, was, therefore, corrected.

But petitioner urges that Articles 1393 and 1396 refer to voidable contracts and the questioned
memorandum is not such a contract but an order issued by one not authorized and, therefore, is illegal
and cannot be ratified tacitly.

This view is without merit. There is no question that a contract of employment exists between petitioner
and claimants-respondents, and that pursuant to the terms thereof, the latter are to render 8 hours
labor. When petitioner's official required respondents to render an additional hour work, and the
respondents had to comply (as non-compliance was punishable and actually punished with disciplinary
action), a supplemental contractual obligation was created both under the terms of the original contract
of employment and of the Eight-hour Labor Law, that such additional work was to be compensated. That
the memorandum giving rise to this situation was originally authorized, did not make it illegal to the
extent of not being capable of ratification by the duly authorized official, the General Manager of
petitioner corporation. Hence, the lower court correctly applied Articles 1393 and 1396, upon the facts
found by it in this case and amply supported by the record. Wherefore, finding no error in the decision
appealed from and the resolution upholding it, the same are hereby affirmed, with costs against the
petitioner. So ordered.
Paras, C.J., Bengzon, Montemayor, Bautista Angelo, Labrador, Concepcion, and Gutierrez David,
JJ., concur.

FIRST DIVISION

G.R. No. L-59847 October 18, 1982

PHILIPPINES INTER-FASHION, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION,

SHERIFF'S OFFICE OF THE NATIONAL LABOR RELATIONS COMMISSION, AND NATIONAL FEDERATION
OF LABOR UNIONS (NAFLU), respondents.

Francisco, De Castro, Zulueta and Reyes Law Offices for petitioner.

The Solicitor General for respondent NLRC.

Rolando M. Olalia for respondent NAFLU.

TEEHANKEE, J.:

Petitioner employer seeks to set aside the resolution of respondent commission of October 1, 1981 and
February 9, 1982, respectively ordering the reinstatement with three months' backwages of its 114
striking employees listed in the case record and represented by respondent National Federation of Labor
Unions (NAFLU) and denying reconsideration.

The established background facts as found by public respondent's commissioner are as follows:

Sometime on 12 December 1979, the workers in the COMPANY grouped themselves and organized a
labor union known as the Philippine Inter-Fashion Workers Union and thereafter directly affiliated the
same with the NAFLU.

Believing that it has a majority of the more or less 600 employees, it filed on 26 December 1979 a
petition for direct certification as the exclusive bargaining agent of the employees which, as of the date
of submission for resolution of this case, remained unresolved.

Sometime in January 1980, the COMPANY conceived and decided to retrench its employees and
selected about 40 employees to be dismissed effective 20 February 1980 allegedly because of lack of
work (Affidavit of Asterio Guanzon, personnel assistant of the company; Annex "A" thereof).

Sometime on 8, 9 and 11 February 1980, Asterio Guanzon, Personnel Assistant of the COMPANY, called
about 20 of the affected employees and informed them of the intended retrenchment and offered them
to voluntarily resign and be paid retrenchment benefit. Since said employees refused, Guanzon asked
them "to acknowledge receipt of the clearance application and the termination letter but except for two
(2) workers, they refused even to acknowledge receipt of the forms. (Affidavit of Guanzon).
The following day, 12 February 1980, during breaktime at 9:15, about 200 employees boarded two
buses and went to the Ministry of Labor and talked with then Deputy Minister who advised them to
return to their work. These employees actually returned in the afternoon but stayed outside the
compound.

On 14 February 1980, the employees returned to the Ministry of Labor and on the same day obtained a
Return to Work Order pertinently reading as follows:

... all workers of Inter-Fashion are hereby directed to return to work and the management to take them
back under the same terms and conditions prior to the walkout/lockout. Parties are hereby enjoined to
maintain status quo until final determination of the case.

xxx xxx xxx

(Annex "L", NAFLU'S Position Paper)

The following day, 15 February 1980, the employees returned to the company with the aforesaid Order
and were allowed to enter the compound but they merely stayed in the canteen because they were not
given work on the pretext that machines were undergoing repairs and servicing and because the sewing
lines were reorganized and workers were reassigned to new lines ...

On February 1980, more than 200 employees returned and reported for work but again they were only
made to stay at the canteen inside the compound and were not allowed to work but they were
nevertheless paid their wages from 12 February 1980 to 20 February 1980 (Company's Position Paper
dated 13 March 1980).

On the same date, 20 February 1980, the COMPANY filed with this Ministry "applications for clearance
to terminate the workers who participated in the (alleged) walkout for serious misconduct, effective
March 1, 1980 placing the affected employees under preventive suspension in the meantime."
(parenthesis supplied: Affidavit of Guanzon, personnel assistant).

Subsequently, the COMPANY hired "additional workers to be able to complete twelve (12) production
lines and to be able to deliver according to my production schedule." (Affidavit, Solito P. Sandoval,
production services manager).

On 20 October 1980, one hundred fifty (150) employees who were not re- admitted before were
allowed to return to work and in so doing withdrew their case or complaint against the COMPANY
(Annex "A"; Company's Memorandum dated 18 March 1981), thereby leaving 114 employees still
subject of its clearance application.

The Solicitor General has correctly stated in his comment that "from these facts are derived the
following conclusions which are likewise undisputed: that petitioner engaged in an illegal lockout while
the NAFLU engaged in an illegal strike; that the unconditional offer of the 150 striking employees to
return to work and to withdraw their complaint of illegal lockout against petitioner constitutes
condonation of the illegal lock-out; and that the unqualified acceptance of the offer of the150 striking
employees by petitioner likewise constitutes condonation of the illegal strike insofar as the reinstated
employees are concerned."
The issues at bar arise, however, from respondent commission's approval of its commissioner's
conclusions that (1) petitioner must be deemed to have waived its right to pursue the case of illegal
strike against the 114 employees who were not reinstated and who pursued their illegal lockout claim
against petitioner; and (2) the said 114 employees are entitled to reinstatement with three months'
backwages.

The Court approves the stand taken by the Solicitor General that there was no clear and unequivocal
waiver on the part of petitioner and on the contrary the record shows that it tenaciously pursued its
application for their dismissal, but nevertheless in view of the undisputed findings of illegal strike on the
part of the 114 employees and illegal lockout on petitioner's part, both parties are in pari delicto and
such situation warrants the restoration of the status quo ante and bringing the parties back to the
respective positions before the illegal strike and illegal lockout through the reinstatement of the said
114 employees, as follows:

The Bisaya case (102 Phil. 438) is inapplicable to the present case, because in the former, there were
only two strikers involved who were both reinstated by their employer upon their request to return to
work. However, in the present case, there were more than 200 strikers involved, of which 150 who
desired to return to work were reinstated. The rest were not reinstated because they did not signify
their intention to return to work. Thus, the ruling cited in the Bisaya case that the employer waives his
defense of illegality of the strike upon reinstatement of strikers is applicable only to strikers who
signified their intention to return to work and were accepted back ...

Truly, it is more logical and reasonable for condonation to apply only to strikers who signified their
intention to return and did return to work. The reason is obvious. These strikers took the initiative in
normalizing relations with their employer and thus helped promote industrial peace. However, as
regards the strikers who decided to pursue with the case, as in the case of the 114 strikers herein, the
employer could not be deemed to have condoned their strike, because they had not shown any
willingness to normalize relations with it. So, if petitioner really had any intention to pardon the 114
strikers, it would have included them in its motion to withdraw on November 17, 1980. The fact that it
did not, but instead continued to pursue the case to the end, simply means that it did not pardon the,
114 strikers.

xxx xxx xxx

The finding of illegal strike was not disputed. Therefore, the 114 strikers employees who participated
therein are liable for termination (Liberal Labor Union v. Phil. Can Co., 91 Phil. 72; Insurefco Employees
Union v. Insurefco, 95 Phil. 761). On the other hard, the finding of illegal lockout was likewise not,
disputed. Therefore, the 114 employees affected by the lockout are also subject to reinstatement.
Petitioner, however, contends that the application for readmission to work by the 150 strikers
constitutes condonation of ,the lockout which should likewise bind the l14 remaining strikers. Suffice it
to say that the 150 strikers acted for themselves, not behalf of the 114 remaining strikers, and therefore
the latter could not be deemed to have condoned petitioner's lockout.<äre||anº•1àw>

The findings show that both petitioner and the 114 strikers are in pari delicto, a situation which warrants
the maintenance of the  status quo. This means that the contending parties must be brought back to
their respective positions before the controversy; that is, before the strike. Therefore, the order
reinstating the 114 employees is proper.
With such restoration of the status quo ante it necessarily follows, as likewise submitted by the Solicitor
General, that the petition must be granted insofar as it seeks the setting aside of the award of three
months' backwages to the 114 employees ordered reinstated on the basis of the general rule that
strikers are not entitled to backwages 1 (with some exceptions not herein applicable, such as where the
employer is guilty of oppression and union-busting activities and strikers ordered reinstated are denied
such reinstatement and therefore are declared entitled to backwages from the date of such denial  2 ).
More so, is the principle of "no work, no pay" applicable to the case at bar, in view of the undisputed
finding of illegality of the strike.

ACCORDINGLY, judgment is hereby rendered affirming respondent commission's Resolution insofar as it

orders the reinstatement of the 114 employees but setting aside the award therein for the payment of
three months' backwages.

SO ORDERED.

Melencio-Herrera, Plana, Vasquez, Relova and Gutierrez, Jr., concur.

THIRD DIVISION

G.R. Nos. 64821-23 January 29, 1993

UNIVERSITY OF PANGASINAN FACULTY UNION, petitioner, vs. NATIONAL LABOR RELATIONS

COMMISSION and UNIVERSITY OF PANGASINAN, respondents.

Tanopo & Serafica for petitioner.

Hermogenes S. Decano for private respondents.

ROMERO, J.:

In the instant petition for mandamus and certiorari, petitioner union seeks to enjoin the respondent
National Labor Relations Commission (NLRC) to resolve, or direct the Labor Arbiter to hear and decide,
the merits of three of petitioner's unresolved complaints, and to annul and set aside the resolution of
the NLRC affirming the decision of the Executive Labor Arbiter dismissing the petitioner's complaints for
violation of certain labor standards laws but requiring respondent university to integrate the cost of
living allowance into the basic pay of the covered employees and reminding it to pay its employees at
intervals not exceeding sixteen (16) days.

The uncontroverted facts show that on various dates, petitioner filed the following complaints against
the University of Pangasinan (University for brevity) before the Arbitration Branch of the NLRC in
Dagupan City:
1. October 14, 1980: for nonpayment of benefits under P.D. No. 1713 and emergency cost of living
allowance (ecola) to part-time teachers, and for prompt and accurate computation of benefits under
P.D. No. 451 and the payment of ecolas;

2. November 7, 1980: for nonpayment of all ecolas to instructors from October 18-31, 1980;

3. November 20, 1980: for nonpayment of ecolas under P.D. Nos. 525, 1123, 1614, 1634, 1678 and 1713
for November 1-15, 1980, and extra loads during typhoons "Nitang" and "Osang" on July 21 and 25,
1980, respectively;

4. April 13, 1981: for violation of P.D. No. 1751 and nonpayment of extra loads on February 12-13, 1980
(Anniversary celebration);

5. April 27, 1981: for nonpayment of all ecolas for April 1-15, 1981 to faculty members who were also
members of the union;

6. May 21, 1981: for violation of Wage Order No. 1 and delayed payment of salaries; and

7. June 17, 1981: for nonpayment of salary differentials for summer under P.D. No. 451. 1

The Regional Director in San Fernando, La Union certified six (6) of these complaints to Labor Arbiter
Pedro Fernandez of the Dagupan City District Office of the then Ministry of Labor and Employment for
compulsory arbitration. 2 According to the petitioner, it was made to understand by Fernandez that the
seventh complaint should also be discussed in its position paper. Accordingly, petitioner filed a position
paper discussing the merits of all the seven complaints. On the other hand, the University limited its
discussion to only four: the complaints filed on April 13, 1981, April 27, 1981, May 21, 1981 and June 17,
1981. Petitioner was of the view that Executive Labor Arbiter Sotero L. Tumang adopted the stand of the
University on the four complaints and accordingly dismissed them in his decision of January 25, 1982. 3

Observing that in its position paper, the petitioner included matters which were "beyond the scope of
the issues alleged in the complaints," said Labor Arbiter discussed the four complaints individually. On
the April 13, 1981 complaint, he ruled that because at the time P.D. No. 1123 took effect on May 1,
1977, the University had not increased its tuition fees, there was of "nothing to integrate." 4 However,
from June 16, 1979 when the University increased its tuition fees, it was obligated to cause the
integration of the across-the-board increase of P60.00 in emergency allowance into the basic pay as
mandated by P.D. Nos. 1123 and 1751.

On the alleged nonpayment of extra loads handled by the employees on February 12 and 13, 1981 when
classes were suspended, Tumang stated that Consuelo Abad, the petitioner's president, had no cause to
complain because her salary was fully paid and that, since there were "no complainants for the alleged
nonpayment of extra loads for two days," the issue had become academic.

With respect to the April 27, 1981 complaint, Tumang said that since the salary paid to Consuelo Abad
and other faculty members for the April 1-15, 1981 period had been earned "as part of their salary for
the ten-month period," she was no longer entitled to an emergency cost of living allowance. He added
that "payment of emergency cost of living allowance is based on actual work performed except when
they (employees) are on leave with pay." Hence, because classes ended in March 1981, the teachers
who did not report for work could not be considered on leave with pay and, therefore, they were not
entitled to an emergency cost of living allowance.
As regards the May 21, 1981 complaint alleging violation of Wage Order No. 1, Tumang found that the
University had actually implemented the additional living allowance of P2.00 a day required therein. On
the alleged delay in the payment of salaries of the employees, he rationalized that delays could not be
avoided but he reminded the University to pay its employees on time.

The June 17, 1981 complaint was also resolved in favor of the University. Stating that P.D. No. 451 which
mandates salary increases is dependent on enrollment and allowable deductions, Tumang ruled that,
again, Consuelo Abad had no cause to complain as she had been paid out of the allowable 12.74% for
distribution which was a "substantial compliance with P.D. No. 451." 5 The dispositive portion of the
decision states:

IN THE LIGHT OF THE FOREGOING CONSIDERATION, the above-entitled cases are dismissed for lack of
merit. Respondent however, is required to integrate the allowance of P60.00 under P.D. 1123 into the
basic pay of the covered employees if the same has not as yet been complied with. Respondent is also
reminded to pay the employees at intervals not exceeding sixteen (16) days pursuant to Article 102 of
the Labor Code.

SO ORDERED.

The petitioner appealed the said decision to the NLRC. In its resolution of June 20, 1993, the NLRC
affirmed the decision of Executive Labor Article Tumang. Hence, the instant petition
for mandamus and certiorari with the following prayer:

WHEREFORE, the foregoing premises considered, it is respectfully prayed that this petition be given due
course and that judgment issue:

1. Declaring petitioner as possessed with capacity to represent its members in the complaints it filed
thru its president, Miss Consuelo Abad, against private respondent, and the complaints are pertaining to
the members who are entitled under the law to the claims sought herein, not to Miss Abad alone;

2. Annulling and setting aside the appealed resolution insofar as the issues of nonpayment of Ecola for
April 1-15, 1981 and nonpayment of salary differentials for summer of 1981 under P.D. No. 451 are
concerned;

3. Ordering private respondent to pay covered members of petitioner their Ecola for April 1-15, 1981
and their salary differentials for summer of 1981 pursuant to the mandate of P.D. 451;

4. Enjoining public respondent to resolve on the merits the issues of nonpayment of extra loads of
February 12-13, 1980 and violation of Wage Order No. 1 which were properly brought on appeal to said
office;

5. Enjoining public respondent to resolve on the merits the issues or grievances alleged in the
complaints filed on October 14, November 7 and November 20, all in 1980, which were not resolved by
the labor arbiter but nonetheless appealed to public respondents, or

6. Enjoining public respondent to order or direct the labor arbiter to resolve on the merits the said
issues or grievances alleged in the complaints mentioned in the next preceding paragraph;

7. Attorney's fee in such amount as this Honorable Tribunal may deem just and reasonable in the
premises;
8. Ordering private respondent to pay costs of suit, including this appeal.

Petitioner further prays for safeguards and/or measures to insure the correct computation of the
amount of claims herein sought due to each covered member of petitioner, and for such other reliefs
just and equitable in the premises. 6

We shall first deal with the propriety of the special civil action of mandamus. In this regard, petitioner
contends that the NLRC should have, in the exercise of its appellate jurisdiction, resolved the issues
raised in the three (3) complaints filed on October 14, November 7 and November 20, 1980 or, in the
alternative, ordered the Labor Arbiter to hear and decide the aforementioned three (3) complaints, it
having the power of supervision over Labor Arbiters.

Sec. 3, Rule 65 of the Rules of Court provides:

Sec. 3. Petition for Mandamus. — When any tribunal, corporation, board, or person unlawfully neglects
the performance of an act which the law specifically enjoins as a duty resulting from an office, trust, or
station, or unlawfully excludes another from the use and enjoyment of a right or office to which such
other is entitled, and there is no other plain, speedy and adequate remedy in the ordinary course of law,
the person aggrieved thereby may file a verified petition in the proper court alleging the facts with
certainty and praying that judgment be rendered commanding the defendant, immediately or at some
other specified time, to do the act required to be done to protect the rights of the petitioner, and to pay
the damages sustained by the petitioner by reason of the wrongful acts of the defendant.

As succinctly provided in this section, anyone who wishes to avail of the remedy of mandamus must
state in a verified petition "the facts with certainty." On account of this requirement, mandamus is never
issued in doubtful cases and showing of a clear and certain right on the part of the petitioner is
required. 7 Indeed, while the labor arbiter is duty bound to resolve all complaints referred to him for
arbitration and, therefore, he may be compelled by mandamus  to decide them (although not in any
particular way or in favor of anyone), 8 we find that the peculiar circumstances in this case do not merit
the issuance of the writ of mandamus.

Petitioner admits that only six of the complaints were certified to Labor Arbiter Fernandez for
compulsory arbitration. It failed, however, to allege why this was the case or whether it had exerted any
effort to include the remaining complaint in the certification. What it stresses is the alleged assurance of
Labor Arbiter Fernandez that the seventh complaint may be discussed in its position paper. It turned
out, however, that, according to the unrebutted allegation of the Solicitor General, Labor Arbiter
Fernandez inhibited himself from handling the cases referred to him as he was teaching at the
University. Hence, Labor Arbiter Fernandez forwarded the complaints to the Assistant Director for
Arbitration in Regional Office No. 1 in San Fernando, La Union for appropriate action. He should have
forwarded all of the complaints to the said Assistant Director, but it appears that Fernandez turned over
only  four of them. In turn, the Assistant Director referred only complaints Nos. 5, 6 and 7, which had
been docketed as RBI-C-24-81, LS-42-81 and LS-43-81, to Executive Labor Arbiter Sotero L. Tumang for
compulsory arbitration. However, while only these three docket numbers appear on the caption of the
decision, the same actually resolved four complaints, as earlier mentioned. 9

From these facts, one may infer that there must have been a mishandling of the complaints and/or the
records of the cases. However, the petitioner failed to substantiate by evidence such negligence on the
part of the public respondents as to warrant the issuance of a writ of mandamus. 10 Its officials even
neglected the simple act of verifying from the MOLE office in Dagupan City whether the records of all
the cases filed had been forwarded to the proper official who should resolve them. 11 Infact, nowhere in
its pleadings 12 is there an allegation to that effect.

On the contrary, the petitioner took Fernandez' words seriously and allowed the proceedings to reach
its inevitable conclusion. When it received a copy of the decision, the petitioner should have taken note
of Executive Labor Arbiter Tumang's observation therein that it had discussed matters "beyond the
scope of the issues alleged in the complaints." In its memorandum of appeal, it should have prayed for
the inclusion of the three complaints inasmuch as in labor cases, an appeal may be treated as a motion
for reconsideration or
vice-versa. 13 The fact that three complaints had been omitted did not escape the attention of the NLRC
which stated in its resolution that "since those cases were not consolidated it is now too late to
consolidate them" with the four decided cases. 14 We agree with the NLRC that the said complaints
should proceed separately as long as their resolution would not conflict with the resolved
cases.15 It should be added that under Art. 217(b) of the Labor Code, the NLRC has "exclusive appellate
jurisdiction over all cases decided by the Labor Arbiters." Needless to say, the NLRC could not have acted
on matters outside of the cases appealed to it.

Petitioner's contention that the cases filed by Consuelo Abad as its president should affect, not only
herself, but all the other union members similarly situated as she was, is well taken. The uncontroverted
allegation of the petitioner is that it is the holder of Registration Certificate No. 9865-C, having been
registered with the then Ministry of Labor and Employment on February 16, 1978. As such, petitioner
possessed the legal personality to sue and be sued under its registered name. 16 Corollarily, its president,
Consuelo Abad, correctly filed the complaints even if some of them involved rights and interest purely or
exclusively appertaining to individual employees, it appearing that she signed the complaints "for and in
behalf of the University of Pangasinan Faculty Union." 17

The University's contention that petitioner had no legal personality to institute and prosecute money
claims must, therefore, fail. To quote then Associate Justice Teehankee in  Heirs of Teodelo M. Cruz v.
CIR,18 "[w]hat should be borne in mind is that the interest of the individual worker can be better
protected on the whole by a strong union aware of its moral and legal obligations to represent the rank
and file faithfully and secure for them the best wages and working terms and conditions. . . . Although
this was stated within the context of collective bargaining, it applies equally well to cases, such as the
present wherein the union, through its president, presented its individual members' grievances through
proper proceedings. While the complaints might not
have disclosed the identities of the individual employees claiming monetary benefits, 19 such technical
defect should not be taken against the claimants, especially because the University appears to have
failed to demand a bill of particulars during the proceedings before the Labor Arbiter.

On the merits of the petition, the NLRC did not abuse its discretion in resolving the appeal from the
decision of Executive Labor Arbiter Tumang except for the disallowance of the emergency cost of living
allowance to members of the petitioner. The Rules Implementing P.D. No. 1713 which took effect on
August 18, 1980 provide:

Sec. 6. Allowances of full-time and part-time employees. — Employees shall be paid in full the monthly
allowance on the basis of the scales provided in Section 3 hereof, 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 provided that in
determining the equivalent daily allowance of such deduction, the applicable monthly allowance shall be
divided by thirty (30) days.

xxx xxx xxx

(Emphasis supplied).

This Section, which is a virtual reproduction of Section 12 of the old Rules Implementing P.D. No. 1123,
has been interpreted by this Court as requiring that the full amount of the cost of living allowance
mandated by law should be given monthly to each employee if the latter has worked continuously for
each month, regardless of the number of the regular working days. 20 But more apropos  is the ruling of
this Court in University of Pangasinan Faculty Union v. University of Pangasinan and NLRC,21 a case
involving the same parties as in the instant petition and dealing with a complaint filed by the petitioner
on December 18, 1981 seeking, among others, the payment of emergency cost of living allowances for
November 7 to December 5, 1981, a semestral break. The Court held therein:

. . . The "No work, no pay" principle does not apply in the instant case. The petitioner's members
received their regular salaries during this period. It is clear from the . . . law that it contemplates a "no
work" situation where the employees voluntarily absent themselves. Petitioners, in the case at bar,
certainly do not, ad voluntatem  absent themselves during semestral breaks. Rather, they 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 those days.

As interpreted and emphasized in the same case, the law granting emergency cost of living allowances
was designed to augment the income of the employees to enable them to cope with the rising cost of
living and inflation. Clearly, it was enacted in pursuance of the State's duty to protect labor and to
alleviate the plight of the workers. To uphold private respondent's interpretation of the law would be
running counter to the intent of the law and the Constitution.

WHEREFORE, the petition for mandamus is hereby DISMISSED. The decision of the NLRC is AFFIRMED
subject to the MODIFICATION that private respondent University of Pangasinan shall pay its regular and
fulltime teachers and employees emergency cost of living allowance for the period April 1-15, 1981.
Costs against private respondent.

SO ORDERED.

Gutierrez, Jr., Bidin, Davide, Jr. and Melo, JJ., concur.

Case Digest

Bernardo vs NLRC

GR 122917 07/03/99

Facts:

Petitioners numbering 43 are deaf–mutes who were hired on various periods from 1988 to 1993 by
respondent Far East Bank and Trust Co. as Money Sorters and Counters through a uniformly worded
agreement called ‘Employment Contract for Handicapped Workers. Subsequently, they are dismissed.

Petitioners maintain that they should be considered regular employees, because their task as money
sorters and counters was necessary and desirable to the business of respondent bank.  They further
allege that their contracts served merely to preclude the application of Article 280 and to bar them from
becoming regular employees.

Private respondent, on the other hand, submits that petitioners were hired only as “special workers and
should not in any way be considered as part of the regular complement of the Bank.”[12] Rather, they
were “special” workers under Article 80 of the Labor Code.

Issue: WON petitioners have become regular employees.

Held:

The uniform employment contracts of the petitioners stipulated that they shall be trained for a period of
one month, after which the employer shall determine whether or not they should be allowed to finish
the 6-month term of the contract.  Furthermore, the employer may terminate the contract at any time
for a just and reasonable cause.  Unless renewed in writing by the employer, the contract shall
automatically expire at the end of the term.

Respondent bank entered into the aforesaid contract with a total of 56 handicapped workers and
renewed the contracts of 37 of them.  In fact, two of them worked from 1988 to 1993.  Verily, the
renewal of the contracts of the handicapped workers and the hiring of others lead to the conclusion that
their tasks were beneficial and necessary to the bank.  More important, these facts show that they
were qualified to perform the responsibilities of their positions.  In other words, their disability did not
render them unqualified or unfit for the tasks assigned to them.

In this light, the Magna Carta for Disabled Persons mandates that a qualified  disabled employee should
be given the same terms and conditions of employment as a qualified  able-bodied person.  Section 5 of
the Magna Carta provides:

“Section 5.  Equal Opportunity for Employment.—No disabled person shall be denied access to
opportunities for suitable employment.  A qualified disabled employee shall be subject to the same
terms and conditions of employment and the same compensation, privileges, benefits, fringe benefits,
incentives or allowances as a qualified able bodied person.”
The fact that the employees were qualified disabled persons necessarily removes the employment
contracts from the ambit of Article 80.  Since the Magna Carta accords them the rights of qualified able-
bodied persons, they are thus covered by Article 280 of the Labor Code, which provides:

“ART. 280. Regular and Casual Employment. — The provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to
be regular where the employee has been engaged to perform activities which are usually necessary or
desirable in the usual business or trade of the employer, x x x”

“The primary standard, therefore, of determining regular employment is the reasonable connection
between the particular activity performed by the employee in relation to the usual trade or business of
the employer.  The test is whether the former is usually necessary or desirable in the usual business or
trade of the employer.  The connection can be determined by considering the nature of the work
performed and its relation to the scheme of the particular business or trade in its entirety.  Also if the
employee has been performing the job for at least one year, even if the performance is not continuous
and merely intermittent, the law deems repeated and continuing need for its performance as sufficient
evidence of the necessity if not indispensability of that activity to the business.  Hence, the employment
is considered regular, but only with respect to such activity, and while such activity exists.”

Respondent bank entered into the aforesaid contract with a total of 56 handicapped workers and
renewed the contracts of 37 of them.  In fact, two of them worked from 1988 to 1993.  Verily, the
renewal of the contracts of the handicapped workers and the hiring of others lead to the conclusion that
their tasks were beneficial and necessary to the bank.  More important, these facts show that they
were qualified to perform the responsibilities of their positions.  In other words, their disability did not
render them unqualified or unfit for the tasks assigned to them.

Without a doubt, the task of counting and sorting bills is necessary and desirable to the business of
respondent bank.  With the exception of sixteen of them, petitioners performed these tasks for more
than six months. 

Petition granted

PNOC-EDC v NLRC

Facts:

Danilo Mercado, an employee of the Philippine National Oil Company- Energy Development
Corporation, was dismissed on the grounds of serious acts of dishonesty and violation of company rules
and regulations allegedly committed as follows:

1. Withdrew P1680.00 from company funds, appropriated P680.00 for personal use and paid the nipa
supplier P1000.00.
2. Withdrew P28.66 as payment for the fabrication of rubber stamp but appropriated the P8.66 for
personal use.

3. Absence without leave and without proper turn-over thus disrupting and delaying company work
activities.

4. Vacation leave without prior leave.

Mercado filed a complaint against PNOC-EDC before the NLRC Regional Arbitration Branch. After
considerations of position papers presented by both parties, the labor arbiter ruled in favour of
Mercado.

Issues:

1. Whether or not matters of employment of PNOC-EDC is within the jurisdiction of the labor arbiter and
the NLRC.

2. Whether or not the labor arbiter and the NLRC are justified in ordering the reinstatement of the
private respondent, payment of his savings, 13th month pay, and payment of damages as well as
attorney’s fees.

Held:

The High Court affirmed the resolution of the respondent NLRC with modification: reducing moral
damages to P10000 and exemplary damages to P5000.

1. The test whether a government-owned or controlled corporation is subject to Civil Service Law is the
manner of its creation. Those created by special charter are subject to its provision while those created
under General Corporation Law are not within its coverage. The PNOC-EDC, having been incorporated
under General Corporation Law, is subject to the provisions of the Labor Law.

2. PNOC-EDC’s accusations are not supported by evidence. Loss of trust or breach of confidence is a
valid ground for dismissing an employee, but such loss or breach must have some basis.

SAN MIGUEL BREWERY, INC., Petitioner, -versus –DEMOCRATIC LABOR ORGANIZATION, ET AL,
Respondents.

G.R. No. L-18353, EN BANC, July 31, 1963, BAUTISTA ANGELO, J.:

We are in accord with this view, for in our opinion 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. This law has no application when the employee or labourer 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.

The record shows that these employees during the period of their employment were paid sales
commission ranging from P30, P40, sometimes P60, P70, to sometimes P90, P100 and P109 a month
depending on the volume of their sales and their rate of commission per case. And so, insofar is the extra
work they perform, they can be considered as employees paid on piece work, "pakiao", or commission
basis. The Department of Labor, called upon to implement, the Eight-Hour Labor Law, is of this opinion
when on December 9, 1957 it made the ruling on a query submitted to it, thru the Director of the Bureau
of Labor Standards, to the effect that field sales personnel receiving regular monthly salaries, plus
commission, are not subject to the Eight-Hour Labor Law.

FACTS:

On January 27, 1955, the Democratic Labor Association filed complaint against the San Miguel Brewery,
Inc. embodying 12 demands for the betterment of the conditions of employment of its members. The
company filed its answer to the complaint specifically denying its material averments and answering the
demands point by point. The company asked for the dismissal of the complaint.

At the hearing held sometime in September, 1955, the union manifested its desire to confine its claim to
its demands for overtime, night-shift differential pay, and attorney's fees, although it was allowed to
present evidence on service rendered during Sundays and holidays, or on its claim for additional
separation pay and sick and vacation leave compensation.

After the case had been submitted for decision, Presiding Judge Bautista, who was commissioned to
receive the evidence, rendered decision expressing his disposition with regard to the points embodied in
the complaint on which evidence was presented.

The demands for the application of the Minimum Wage Law to workers paid on "pakiao" basis, payment
of accumulated vacation and sick leave and attorney's fees, as well as the award of additional separation
pay, were either dismissed, denied, or set aside.

Anent the finding of the court a quo, as affirmed by the Court of Industrial Relations, to the effect that
outside or field sales personnel are entitled to the benefits of the Eight-Hour Labor Law, the pertinent
facts are as follows:

“After the morning roll call, the employees leave the plant of the company to go on their respective
sales routes. They do not have a daily time record. The company never require 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 at most, or that the
employees could make their sales on their routes within such number of hours variable in the sense that
sometimes they can be completed in less than 8 hours.

The moment these outside or field employees leave the plant and while in their sales routes they are on
their own, and often times when the sales are completed, or when making short trip deliveries only,
they go back to the plant, load again, and make another round of sales. These employees receive
monthly salaries and sales commissions in variable amounts. The amount of compensation they receive
is uncertain depending upon their individual efforts or industry. Besides the monthly salary, they are
paid sales commission.

It is contended that since the employees concerned are paid a commission on the sales they make
outside of the required 8 hours besides the fixed salary that is paid to them, the Court of Industrial
Relations erred in ordering that they be paid an overtime compensation as required by the EightHour
Labor Law for the reason that the commission they are paid already takes the place of such overtime
compensation. His situation, the company contends, can be likened to an employee who is paid on
piece-work, "pakiao", or commission basis, which is expressly excluded from the operation of the Eight-
Hour Labor Law.

ISSUE:

Whether or not the workers are entitled to the benefits of the Eight-Hour Labor Law.

RULING:

We are in accord with this view, for in our opinion 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. 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.

The record shows that these employees during the period of their employment were paid sales
commission ranging from P30, P40, sometimes P60, P70, to sometimes P90, P100 and P109 a month
depending on the volume of their sales and their rate of commission per case. And so, insofar is the
extra work they perform, they can be considered as employees paid on piece work, "pakiao", or
commission basis. The Department of Labor, called upon to implement, the Eight-Hour Labor Law, is of
this opinion when on December 9, 1957 it made the ruling on a query submitted to it, thru the Director
of the Bureau of Labor Standards, to the effect that field sales personnel receiving regular monthly
salaries, plus commission, are not subject to the Eight-Hour Labor Law.

We are, therefore, of the opinion that the industrial court erred in holding that the Eight-Hour Labor
Law applies to the employees composing the outside service force and in ordering that they be paid the
corresponding additional compensation.

The remaining point to be determined refers to the claim for pay for Sundays and holidays for service
performed by some claimants who were watchmen or security guards. It is contended that these
employees are not entitled to extra pay for work done during these days because they are paid on a
monthly basis and are given one day off which may take the place of the work they may perform either
on Sunday or any holiday.
We disagree with this claim because it runs counter to law. Section 4 of Commonwealth Act No. 444
expressly provides that no person, firm or corporation may compel an employee or laborer to work
during Sundays and legal holidays unless he is paid an additional sum of 25% of his regular
compensation. This proviso is mandatory, regardless of the nature of compensation. The only exception
is with regard to public utilities who perform some public service.

G.R. No. 79255 January 20, 1992

UNION OF FILIPRO EMPLOYEES (UFE), petitioner, vs. BENIGNO VIVAR, JR., NATIONAL LABOR
RELATIONS COMMISSION and NESTLÉ PHILIPPINES, INC. (formerly FILIPRO, INC.), respondents.

We used to have ten (10) regular holidays. This is the reason for the 251 divisor, used by some
companies in computing the daily wage, which represents the 365 days of the year, less 52 Saturdays, 52
Sundays and the 10 legal holidays. The new law added one more regular holiday – the Eid’l Fitr. We thus
have eleven (11) regular holidays under R.A. 9492:

 New Year’s Day (January 1)

 Maundy Thursday (Movable date)

 Good Friday (Movable date)

 Eid’l Fitr (Movable date)

 Araw ng Kagitingan – Bataaan and Corregidor Day (Monday nearest April 9)

 Labor Day (Monday nearest May 1)

 Independence Day (Monday nearest June 12)

 National Heroes Day (Last Monday of August)

 Bonifacio Day (Monday nearest November 30)

 Christmas Day (December 25)

 Rizal Day (Monday nearest December 30)

The Labor Code provides that every worker shall be paid his daily wage during regular holidays.
Employers are now required to pay for an extra regular holiday.

Facts:

On November 8, 1985, respondent Filipro, Inc. (now Nestle Philippines, Inc.) filed with the National
Labor Relations Commission (NLRC) a petition for claims of its monthly paid employees for holiday pay.

Abitrator Vivar: Filipro to pay its monthly paid employees holiday pay pursuant to Art 94 of Labor Code,
subject to exclusions and limitations in Art 82.
Filipro filed a motion for clarification seeking (1) the limitation of the award to three years, (2)
the exclusion of salesmen, sales representatives, truck drivers, merchandisers and medical
representatives (hereinafter referred to as sales personnel) from the award of the holiday pay, and (3)
deduction from the holiday pay award of overpayment for overtime, night differential, vacation and sick
leave benefits due to the use of 251 divisor.

Petitioner UFE answered that the award should be made effective from the date of effectivity of the
Labor Code, that their sales personnel are not field personnel and are therefore entitled to holiday pay,
and that the use of 251 as divisor is an established employee benefit which cannot be diminished.

Arbitrator Vivar: On January 14, 1986, the respondent arbitrator issued an order declaring that the
effectivity of the holiday pay award shall retroact to November 1, 1974, the date of effectivity of the
Labor Code. He adjudged, however, that the company’s sales personnel are field personnel and, as such,
are not entitled to holiday pay. He likewise ruled that with the grant of 10 days’ holiday pay, the divisor
should be changed from 251 to 261 and ordered the reimbursement of overpayment for overtime, night
differential, vacation and sick leave pay due to the use of 251 days as divisor.

Issues:

1) Whether or not Nestle’s sales personnel are entitled to holiday pay; and

2) Whether or not, concomitant with the award of holiday pay, the divisor should be changed from 251
to 261 days and whether or not the previous use of 251 as divisor resulted in overpayment for overtime,
night differential, vacation and sick leave pay.

Held:

1.  Sales personnel are not entitled to holiday pay.

Under Article 82, field personnel are not entitled to holiday pay. Said article defines field personnel as
“non-agritultural employees who regularly perform their duties away from the principal place of
business or branch office of the employer and whose actual hours of work in the field cannot be
determined with reasonable certainty.”

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.

Moreover, the requirement that “actual hours of work in the field cannot be determined with
reasonable certainty” must be read in conjunction with Rule IV, Book III of the Implementing Rules
which provides:

Rule IV Holidays with Pay

Sec. 1. Coverage — This rule shall apply to all employees except:

xxx xxx xxx

(e) Field personnel and other employees  whose time and performance is unsupervised by the
employer  . . . (Emphasis supplied)
Hence, in deciding whether or not an employee’s actual working hours in the field can be determined
with reasonable certainty, query must be made as to whether or not such employee’s time and
performance is constantly supervised by the employer.

2. The divisor in computing the award of holiday pay should still be 251 days.

While in that case the issue was whether or not salesmen were entitled to overtime pay, the same
rationale for their exclusion as field personnel from holiday pay benefits also applies.

The petitioner union also assails the respondent arbitrator’s ruling that, concomitant with the award of
holiday pay, the divisor should be changed from 251 to 261 days to include the additional 10 holidays
and the employees should reimburse the amounts overpaid by Filipro due to the use of 251 days’
divisor.

The 251 working days divisor is the result of subtracting all Saturdays, Sundays and the ten (10) legal
holidays from the total number of calendar days in a year. If the employees are already paid for all non-
working days, the divisor should be 365 and not 251.

In the petitioner’s case, its computation of daily ratio since September 1, 1980, is as follows:

monthly rate x 12 months / 251 days

The use of 251 days’ divisor by respondent Filipro indicates that holiday pay is not yet included in the
employee’s salary, otherwise the divisor should have been 261.

It must be stressed that the daily rate, assuming there are no intervening salary increases, is a constant
figure for the purpose of computing overtime and night differential pay and commutation of sick and
vacation leave credits. Necessarily, the daily rate should also be the same basis for computing the 10
unpaid holidays.

The respondent arbitrator’s order to change the divisor from 251 to 261 days would result in a lower
daily rate which is violative of the prohibition on non-diminution of benefits found in Article 100 of the
Labor Code. To maintain the same daily rate if the divisor is adjusted to 261 days, then the dividend,
which represents the employee’s annual salary, should correspondingly be increased to incorporate the
holiday pay.

To illustrate, if prior to the grant of holiday pay, the employee’s annual salary is P25,100, then dividing
such figure by 251 days, his daily rate is P100.00 After the payment of 10 days’ holiday pay, his annual
salary already includes holiday pay and totals P26,100 (P25,100 + 1,000). Dividing this by 261 days,
the daily rate is still P100.00. There is thus no merit in respondent Nestle’s claim of overpayment of
overtime and night differential pay and sick and vacation leave benefits, the computation of which are
all based on the daily rate, since the daily rate is still the same before and after the grant of holiday pay.

SC Decision:

The Court thereby resolves that the grant of holiday pay be effective, not from the date of promulgation
of the Chartered Bank case nor from the date of effectivity of the Labor Code, but from October 23,
1984, the date of promulgation of the  IBAA case (Insular Bank of Asia and America Employees’ Union
(IBAAEU) v.  Inciong, where the court declared that Sec 2, Rule IV, Book III of IRR which excluded monthly
paid employees from holiday pay benefits, are null and void).
WHEREFORE, the order of the voluntary arbitrator in hereby MODIFIED. The divisor to be used in
computing holiday pay shall be 251 days. The holiday pay as above directed shall be computed from
October 23, 1984. In all other respects, the order of the respondent arbitrator is hereby AFFIRMED.

Red V Coconut Products vs. CIR

17 SCRA 553

National Shipyards and Steel Corporation (NASSCO) vs. Court of Industrial Relations and Dominador
Malondras

G.R. No L-17068 December 30, 1961

Facts:

 The petitioner NASSCO, a GOCC, 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.
 On April 15, 1957, 39 crew members of petitioner’s tugboat service, including therein respondent
Dominador Malondras, filled with for the payment of overtime compensation to which NASSCO
admitted that they were required to render service during Sundays and legal holidays and the
petitioners are paid by the respondent their regular salaries and subsistence allowance, without
additional compensation for overtime work.
 Pursuant thereto, CIR ordered that the overtime pay be computed.
 The crew members were granted by the court an overtime service of five (5) hours each day on the
first report covering January 1 to December 31, 1957. They were also given the same overtime pay
on the second report covering the period from January 1, 1954 to December 31, 1956 to the
exclusion of herein private respondent Dominador Malondras.
 Because of his exclusion from the second report of the examiner, and his time sheets having been
located in the meantime, Dominador Malondras filed petitions in the same case asking for the
compensation and payment of his overtime compensation for the period from January 1, 1954 to
December 31, 1956.
 The examiner submitted report giving Malondras an average of sixteen (16) overtime hours a day,
on the basis of being detailed on board in his time sheets, and recommending the payment to him
of the total amount of P 15, 242.15 as overtime compensation during the periods covered by the
report.
 This was objected by NASSCO but was denied. The NASSCO moved for reconsideration, which was
denied by the Court en banc, with one judge dissenting. Whereupon, the NASSCO appealed to this
Court.
 CONTENTION OF EXAMINER: The words “Detail” or “Detailed on Board” means that as long as
respondent Malondras was in his barge for twenty-four hours, he should be paid overtime for
sixteen hours a day or the time in excess of the legal eight working hours that he could not leave his
barge.
 CONTENTION OF NASSCO: The mere fact that Malondras was required to be on board his barge all
day so that he could immediately be called to duty when his services were needed does not imply
that he should be paid overtime for sixteen hours a day, but that he should receive compensation
only for the actual service in excess of eight hours that he can prove.

Issue: WON Malondras is entitled to 16 hours overtime while detailed on board.

Held: NO.

The correct criterion in determining whether or not sailors are entitled to overtime pay is not, therefore,
whether they were on board and cannot leave ship beyond the regular eight working hours a day, but
whether they actually rendered service in excess of said number of hours.

Seamen are required to stay on board their vessels by the very nature of their duties, and it is for this
reason that, in addition to their regular compensation, they are given free living quarters and
subsistence allowances when required to be on board. It could not have been the purpose of our law to
require their employers to pay them overtime even when they are not actually working; otherwise,
every sailor on board a vessel would be entitled to overtime for sixteen hours each day, even if he had
spent all those hours resting or sleeping in his bunk, after his regular tour of duty.

While Malondras’ daily time sheets do not show his actual working hours, nevertheless, petitioner has
already admitted in the Stipulation of Facts. In this case that Malondras and his co-claimants did render
service beyond eight (8) hours a day when so required by the exigencies of the service; and in fact,
Malondras was credited and already paid for five (5) hours daily overtime work during the period from
May 1 to December 31, 1957, under the examiner’s first report. Since Malondras has been at the same
job since 1954, it can be reasonably inferred that the overtime service he put in whenever he was
required to be aboard his barge all day from 1954 to 1957 would be more or less consistent. In truth, the
other claimants who served with Malondras under the same conditions and period have been finally
paid for an overtime of 5 hours a day, and no substantial difference exists between their case and the
present one, which was not covered by the same award only because Malondras’ time records not
found until later.

TEOFILO ARICA, DANILO BERNABE, MELQUIADES DOHINO, ABONDIO OMERTA, GIL TANGIHAN,
SAMUEL IABAJO, NESTOR NORBE, RODOLFO CONCEPCION, RICARDO RICHA, RODOLFO NENO,
ALBERTO BALATRO, BENJAMIN JUMAMOY, FERMIN DAAROL, JOVENAL ENRIQUEZ, OSCAR BASAL,
RAMON ACENA, JAIME BUGTAY, and 561 OTHERS, HEREIN REPRESENTED BY KORONADO B. APUZEN,
petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, HONORABLE FRANKLIN DRILON,
 HONORABLE CONRADO B. MAGLAYA, HONOR. ABLE ROSARIO B. ENCARNACION, and STANDARD
(PHILIPPINES) FRUIT CORPORATION, respondents.

GRN 78210  February 28, 1989

FACTS:

This case stemmed from a complaint filed against private respondent Stanfilco for assembly time, moral
damages and attorney’s fees, with the Regional Arbitration- Davao City. The Labor Arbiter rendered a
decision in favor of private respondent STANFILCO, holding that:

“We cannot but agree with respondent that the pronouncement in that earlier case, i.e.  the thirty-
minute assembly time long practiced cannot be considered waiting time or  work time and, therefore, not
compensable, has become the law of the case which can no  longer be disturbed without doing violence
to the time-honored principle of resjudicata.”

NLRC uphold the Labor Arbiters’ decision and declared that:

“Surely, the customary functions referred to in the above-quoted provision of the  agreement includes the
long-standing practice and institutionalized non-compensable  assembly time. This, in effect, estopped
complainants from pursuing this case.

MR was denied hence this petition for review on certiorari. Petitioners contend that the preliminary
activities as workers of respondents STANFILCO in the assembly area is compensable as working time
(from 5:30am to 6:00 am) since these preliminary activities are necessarily and primarily for private
respondent’s benefit. These preliminary activities of the workers are as follows-.

(a) First there is the roll call. Followed by getting their individual work assignments from the foreman.

(b) Then, they are individually required to accomplish the Laborer’s Daily Accomplishment Report during
which they are often made to explain about their reported accomplishment the following day.

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

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

All these activities take 30 minutes to accomplish.

.Respondent avers that the instant complaint is not new because it is the very same claim they brought
against respondent by the same group of rank and file employees in the case of Arica vs. National Labor
Relations Commission which was filed before in a different case. The said case involved a claim for
“waiting time”, as the complainants purportedly were required to assemble.

In the previous case, the 30-minute assembly time long practiced and institutionalized by mutual
consent of the parties under their CBA cannot be considered as ‘waiting time’ within the purview of
Section 5, Rule 1, Book III of the Rules and Regulations Implementing the Labor.

ISSUE:

WON the “assembly time” is compensable.

RULING:
 1. The 30-minute assembly is a deeply-rooted, routinary practice of the employees, and the
proceedings attendant thereto are not infected with complexities as to deprive the workers the
time to attend to other personal pursuits. They are not new employees as to require the
company to deliver long briefings regarding their respective work assignments. Their houses are
situated right on the area where the farms are located, such that after the roll call, which does
not necessarily require the personal presence, they can go back to their houses to attend to
some chores. In short, they are not subject to the absolute control of the company during this
period, otherwise, their failure to report in the assembly time would justify the company to
impose disciplinary measures. The evidence of the case demonstrates that the 30-minute
assembly time was not primarily intended for the interests of the employer, but ultimately for
the employees to indicate their availability or non-availability for work during every working
day.

Herein petitioners are merely reiterating the very same claim which they filed in Arica vs NLRC and
which records show had already long been considered terminated and closed by this Court. Therefore,
the NLRC can not be faulted for ruling that petitioners’ claim is already barred by res judicata.

Petition is DISMISSED for lack of merit and the decision of the National Labor Relations Commission is
AFFIRMED.

RADA v. NLRCG.R. No. 96078, January 9, 1992

NATURE OF THE CASE: this is a special civil action forcertiorari where petitioner seeks to annul the NLRC
decision reversing the ruling of the labor arbiter which ordered the reinstatement of petitioner with
backwages and awarded him overtime pay.

FACTS: Petitioner was contracted in 1977 by private respondent Philnor Consultants and Planners, Inc as
a driver and was assigned to a specific project in Manila for a period of 2.3 years. His task was to drive
employees to the project from 7am to 4pm. He was allowed to bring home the company vehicle in order
to provide a timely transportation service to the other project workers.

The project he was assigned to was not completed as scheduled so the company renewed his contract
for 10 months on account of his satisfactory record. 10 months has passed and the project was far from
completion. Several contracts thereafter were made until the project was finished in 1985 and Rada was
terminated.

He later sued Philnor for non-payment of separation pay and overtime pay.

ISSUE: Whether Rada is entitled to separation pay and OT pay.

HELD: Rada was not entitled to Separation pay. He was entitled to Overtime pay.

RATIO DECIDENDI:

On Separation Pay:
The Court held that although petitioner worked with Philnor as a driver for eight years, the fact that his
services were rendered only for a particular project which took that same period of time to complete
categorizes him as a project employee. Petitioner was employed for one specific project. The private
respondent was a project employees whose work was coterminous with the project for which he was
hired. Project employees, as distinguished from regular or non-project employees, are mentioned in
section 281 of the Labor Code as those "where the employment has been fixed for a specific project or
undertaking the completion or termination of which has been determined at the time of the
engagement of the employee."

Project employees are not entitled to termination pay if they are terminated as a result of the
completion of the project or any phase thereof in which they are employed, regardless of the number of
projects in which they have been employed by a particular construction company. Moreover, the
company is not required to obtain clearance from the Secretary of Labor in connection with such
termination.

On Overtime Pay:

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

DISPOSITIVE: the decision appealed from is affirmed.

UNION CARBIDE LABOR UNION v. UNION CARBIDE PHILIPPINES, GR No. L-41314, 1992-11-13

Facts:

set aside the decision of the Arbitrator ordering reinstatement with backwages, and instead adjudged
the payment of separation pay

Complainants Agapito Duro, Alfredo Torio, and Rustico Javillonar, were dismissed from their
employment after an application for clearance to terminate them was approved by the Secretary of
Labor

"willful violation of Company regulations, gross insubordination and refusal to submit to a Company
investigation x x x."... three (3) shifts namely: morning, afternoon and night shifts. The workers in the
third shift normally work from Monday to Saturday,... change in the working schedule from Monday to
Friday as contained in the collective bargaining agreement aforecited to Sunday thru... third shift
employees were required to start... the new work schedule from Sunday thru Thursday.

night shift employees filed a demand to maintain the old working schedule... it was arrived at that all
night shift operating personnel were allowed to start their work Monday and on Saturday. This excepted
the employees in the maintenance and preparation crews whose work... schedule is presumed to be
maintained from Sunday to Thursday.

respondents Duro, Torio, and Javillonar did not report for work on November 26, 1972 which was a
Sunday since it was not a working day... suspension... the Arbitrator rendered a decision ordering the
reinstatement with backwages of the complainants. On June 8, 1973, the National Labor Relations
Commission dismissed respondent company's appeal for having been filed out of time.

reconsideration which was treated as an appeal was then filed by respondent company before the
Secretary of Labor, resulting in the modification of the Arbitrator's decision by awarding complainants
separation pay.

Issues:

whether or not the complainants could be validly dismissed from their employment on the ground of
insubordination for refusing to comply with the new work schedule.

Ruling:

The petition has no merit.

In the exercise of its functions of management, the COMPANY shall have the sole and exclusive right and
power, among other things, to direct the operations and the working force of its business in all
respects... as 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... must also protect the 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." (p. 717)

We agree with the findings arrived at by both Arbitrator and the Secretary of Labor that there is no
unfair labor practice in this case.

We now refrain from doing so considering that reinstatement is no longer feasible due to the fact that
the controversy started... more than 20 years ago aside from the obviously strained relations between
the parties.

WHEREFORE, the decision appealed from is hereby AFFIRMED.

SO ORDERED.

DURABUILT RECAPPING PLANT AND CO. VS NLRC G.R No. 76746 July 27, 1987

Petitioner: DURABUILT RECAPPING PLANT & COMPANY and EDUARDO LAO, GENERAL MANAGER
Respondents: NATIONAL LABOR RELATIONS COMMISSION, HON. COMM. RICARDO C. CASTRO, HON.
ARBITER AMELIA M. GULOY, KAPISANAN NG MGA MANGGAGAWA SA DURABUILT and REYNALDO
BODEGAS Ponente: Gutierrez, Jr., J.
Facts:

On July 11, 1983, a complaint for illegal dismissal was filed by respondent Reynaldo Bodegas, against
petitioner Durabuilt, a tire recapping company. In a decision rendered by the Labor Arbiter, the private
respondent was ordered reinstated to his former position with full back wages, from the time he was
terminated up to the time he is actually reinstated, without loss of seniority rights and benefits accruing
to him. The petitioners failed to file a seasonable appeal and entry of final judgment. The petitioner filed
its opposition to the computation on the ground that it contemplated a straight computation of twenty
six (26) working days in one month when the period covered by the computation was intermittently
interrupted due to frequent brownouts and machine trouble and that respondent Bodegas had only a
total of 250.75 days of attendance in 1982 due to absences. According to the petitioner, Bodegas is
entitled only to the amount of P3,834.05 broken down as follows: salaries — P1,993.00; ECOLA —
P1,433.50, and 13th month pay — P407.55. The Labor Arbiter denied the opposition to the
computation. The petitioner appealed to the NLRC which affirmed the order of the Labor Arbiter and
dismissed the appeal.

Issue:

Whether or not the computation of back wages should be based on daily rather than on monthly pay
schedules

Held:

The petition is granted. We have held that where the failure of workers to work was not due to the
employer's fault, the burden of economic loss suffered by the employees should not be shifted to the
employer. Each party must bear his own loss. It would neither be fair nor just to allow respondent to
recover something he has not earned and could not have earned and to further penalize the petitioner
company over and above the losses it had suffered due to lack of raw materials and the energy-saving
programs of the government. The private respondent cannot be allowed to enrich himself at the
expense of the petitioner company. The computation of back wages should be based on daily rather
than on monthly pay schedules where, as in the case at bar, such basis is more realistic and accurate.

Opulencia vs. NLRC

G.R. No.: L-98368
Date: December 15 1993
Petitioner: Opulencia Ice Plant and/or Melchor Opulencia
Respondent: NLRC, Labor Arbiter Villena and Manuel Esita
Ponente: Bellosillo, J.:
Facts:

Manuel Esita was an employee of Opulencia Ice Plant for 20 years. He was initially assigned to the plant
in San Pablo but was later moved to Calamba to replace the old and weak compressor operator Lorenzo
Eseta. Sometime, for about a month he helped in the renovation of Dr. Opulencia'a house. On 6
February 1989, for demanding the correct amount of wages due him, Esita was dismissed from service.
Consequently, he filed with Sub-Regional Arbitration Branch IV, San Pablo City, a complaint for illegal
dismissal, underpayment, non-payment for overtime, legal holiday, premium for holiday and rest day,
13th month, separation/retirement pay and allowances against petitioners.

On his defense Opulencia denied that Esita was his employee in the Ice plant. He contended that he was
a mere peon during the renovation of his house. He further asserted that Esita was not even included in
the payroll. He further contended that granting arguendo Esita was truly a mechanic, his services would
only be required when there is a need for repair and therefore not on a regular basis. Lastly, Opulencia
justified the stay of Esita in the premises of the ice plant saying that it is purely out of benevolence.

Labor Arbiter decided in favor of Esita and affirmed by NLRC with modifications as the the amount of
monetary award. Thus the petition.

Issue: Whether or not Manuel Esit is an employee of Opulencia ice plant?

Held:

The court cannot agree with the petitioner's contentions, his petition is devoid of merit. Absence of
payroll or material evidence does not give rise to the conclusion the employer-employee relationship
could no longer be proven. Absent such can still be validated through testimonial evidence. The
admission of the petitioner that the weekly payroll he presented do not contain all the names of
employee negates his claims. The court also took notice of his unwillingness to present the payroll
covering the period on which Esita claimed to be the period of his employment. In this regard the court
aptly applied the disputable presumption that evidence willfully suppressed would be adverse if
produced.

On the petitioners argument that Esita's mechanic services is not regular but based on necessity alone is
likewise devoid of merit. We cannot sustain this argument. This circumstance cannot affect the regular
status of employment of Esita. An employee who is required to remain on call in the employer's
premises or so close thereto that he cannot use the time effectively and gainfully for his own purpose
shall be considered as working while on call. In sum, the determination of regular and casual
employment is not affected by the fact that the employee's regular presence in the place of work is not
required, the more significant consideration being that the work of the employee is usually necessary or
desirable in the business of the employer. More importantly, Esita worked for 9 years and, under the
Labor Code, "any employee who has rendered at least one year of service, whether such service is
continuous or broken, shall be considered a regular employee with respect to that activity in which he is
employed . . . ."

Petition is dismissed
 NATIONAL DEVELOPMENT COMPANY VS. COURT OF INDUSTRIAL RELATIONS AND NATIONAL TEXTILE
WORKERS UNION
G.R. No.: L – 15422
Date: November 30, 1962
Petitioner: National Development Company
Respondent: Court Of Industrial Relations And National Textile Workers Union
Ponente: J. Regala
Facts:

Case for review from the Court of Industrial Relations

The National Development Company or government – owned and controlled corporation had four

shifts of work.

8am – 4pm

6am – 2pm

2pm – 10pm

10pm – 6pm

Each shift had 1 – hr meal time period, to wit; from (1) 11am to 12nn for those working between 6am
and 2pm and from (2) 7pm to 8om for those working between 2pm and 10pm.

The records show that although there was a one – hour meal time, petitioner nevertheless credited the
workers with 8 hours of work for each shift and paid them for the same number of hours. Also,
whenever workers in one shift were required to continue working until the next shift, petitioner has
been paying them for six hours only, and argued that the 2 hours corresponding to the mealtime periods
should not be included in computing compensation. Respondents, whose members are employed at the
NDC, asked the court of Industrial Relations to order the payment of additional overtime pay
corresponding to the mealtime periods.

CIR issued an order holding that mealtime should be counted in determining overtime work and ordered
to pay P101, 407.96 by way of overtime compensation. Petitioners filed a motion for reconsideration but
were dismissed by the CIR. Hence, this petition.

Issue: Whether or not on the basis of evidence, the mealtime breaks should be considered working
time?

Held:

Yes. The Court ruled that when the work is not continuous, the time which the laborer is not working
place and can rest completely shall not be counted. Claimants herein rendered services to the Company
from 6am – 6pm implies either that they were not allowed to leave the spot of their working place, or
that they could not rest completely. 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. The timecards show that the work was continuous and without interruption breaks should be
counted as working time for purposes of overtime compensation. Order of March 19, 1959 and the
resolution of April 27, 1959 are hereby affirmed and the appeal is dismissed.

LUZON STEVEDORING CO., INC., VS. LUZON MARINE DEPARTMENT UNION AND THE HON. MODESTO
CASTILLO, THE HON. JOSE S. BAUTISTA, THE HON. V. JIMENEZ YANSON and THE HON. JUAN L.
LANTING, JUDGE OF THE COURT OF INDUSTRIAL RELATIONS
G.R. No.: L – 9265
Date: April 29, 1957
Petitioner: Luzon Stevedoring Co., Inc.
Respondent: Luzon Marine Department Union And The Hon. Modesto Castillo, The Hon. Jose S.
Bautista, The Hon. V. Jimenez Yanson And The Hon. Juan L. Lanting
Ponente: J. Felix
Facts:

Petition for review on certiorari in the resolution of the Court of Industrial Relations. Herein respondents
filed a petition with the CIR containing the full recognition of the right of Collective bargaining, close
shop and check off. Also, that the work performed in excess of 8 hours be paid an overtime pay of 50 per
cent the regular rate of pay, and that work performed on Sundays and legal holidays be paid double the
regular rate of pay. In one of the hearing of the case, the Court ruled that the employees are only
entitled to receive overtime pay for work rendered in excess of 8 hours on ordinary days including
Sundays and legal holidays. Herein petitioner sought for the reconsideration of the decision only in so
far as it interpreted that the period during which a seaman is aboard a tugboat shall be considered as
“working time” for the purpose of the 8 – hours – Labor Law. However, it was denied. Hence, this
petition.

Issue: Whether or not the definition for “hours of work” as presently applied to dry land laborers equally
applicable to seaman?

Held:

No. The Court ruled that we do not need to set for seaman a criterion different from that applied to
laborers on land, that the only thing to be done is to determine the meaning and scope of the term
“working place”. A laborer need not leave the premises of the factory, shop or boat in order that his
period of rest shall not be counted, it being enough that he “cease to work” may rest completely and
leave or may leave at his will the spot where he actually stays while working, to go somewhere else,
whether within or outside the premises of said factory, shop or boat. If these requires are complied
with, the period of such rest shall not be counted. Claimants rendered services to the Company from
6am to 6pm including Sundays and holidays, which implies either that said laborers were not given any
recess at all, or that they were not allowed to leave the spot their working place, or that they could not
rest completely. Resolutions of the Court of Industrial Relations appealed from are affirmed with costs
against petitioner.

PAN AMERICAN WOLRD AIRWAYS SYSTEM (PHIL.) V. PAN AMERICAN EMPLOYEES ASSOCIATION
G.R. No.: L - 16275
Date: February 23, 1961
Petitioner: Pan American Wolrd Airways System (Phil.)
Respondent: Pan American Employees Association Ponente: J. Reyes, J.B.L.
Facts:

Appeal by certiorari from the decision of the Court of Industrial Relations in case No. 1055 – V dated
October 10, 1959, and its resolution en banc denying the motion for reconsideration by the petitioner
herein.

The Court orders to compute the overtime compensation due the aforesaid fourteen (14) aircraft
mechanic and the 2 employees from the Communication Department based on the time sheet of said
employees from February 23, 1952 – July 15, 1958 and to submit his report within 30 days for further
disposition by the court.

Petitioner contends that the finding of that the 1 – hour meal period should be considered work
(deducting 15 minutes as time allowed for eating) is not supported by substantial evidence.

Issue: Whether or not the 1 hour meal period should be considered as overtime work (after deducting
15 minutes)?

Held: Yes. The Court ruled that during the so called meal period, the mechanics were required to stand
by for emergency work; that if they happened not to be available when called, they were reprimanded
by the lead man; that as in fact it happened on many occasions, the mechanics had been called from
their meals or told to hurry Employees Association up eating to perform work during this period.
Judgment appealed from is affirmed. Cost against appellant.

PRICE STABILIZATION CORPORATION v. CIR, GR No. L-13806, 1960-05-23

Facts:

respondent PRISCO Workers' Union, a labor organization duly registered with the Department of Labor,
filed with respondent court, a petition praying that herein petitioner-employer PRISCO be ordered to
pay its present... employees, claimants-members of the said Union, their basic pay and at least 25 per
cent additional compensation for one hour overtime work they had previously rendered as security
guards

25 per cent for the work they have been rendering on Sundays and legal holidays... petitioner filed an
answer denying respondent Union's claim for payment of one hour overtime work, asserting that such
overtime, if rendered, not having been authorized; although some of the said claimants had rendered
work on Sundays and legal... holidays, the same had already been paid... respondent court, on
December 27, 1957, issued an order requiring petitioner to pay the said claimants, members of
respondent Union, the... lack of evidence and in view of a petition signed by 59 of the 131 claimants
withdrawing their claim for pay for work performed on Sundays and legal holidays, the court dismissed
the second claim.

petitioner corporation filed a motion for reconsideration

: (1) whether respondent court had jurisdiction over the present claim for overtime pay filed by
respondent Union; and (2) whether the same court correctly applied Articles 1393 and 1396 of the new
Civil Code... to the case.

Issues:

(1) whether respondent court had jurisdiction over the present claim for overtime pay filed by
respondent Union; and (2) whether the same court correctly applied Articles 1393 and 1396 of the new
Civil Code... to the case.

Ruling:

(1) whether respondent court had jurisdiction over the present claim for overtime pay filed by
respondent Union; and (2) whether the same court correctly applied Articles 1393 and 1396 of the new
Civil Code... to the case.

payment of additional compensation for work performed on Sundays and holidays,... and for night work,
and grant of vacation and sick leave pay, this Court held that the Court of Industrial Relations had
jurisdiction, inasmuch as the claimants were all employees of the Detective and Protective Bureau, Inc,
at the time of the filing of their claims... this Court declared that the Court of Industrial Relations had no
longer jurisdiction to hear and determine the claims of ex-employees against their former... employer
for overtime, wage differential, and separation pays.

Court of Industrial Relations and not the Court of First Instance, has jurisdiction where the... claimant,
although no longer in the service of the employer, seeks in his petition the payment of differential and
overtime pay and his reinstatement.

where the employer-employee relationship is still existing or is sought to be reestablished because of its
wrongful severance (as where the employee... seeks reinstatement), the Court of Industrial Relations
has jurisdiction over all claims arising out of, or in connection with employment, such as those related to
the Minimum Wage Law and the Eight-Hour Labor Law.

respondents claimants are, or at least were, at the time of presenting their claims, actually in the
employ of herein petitioner,... acting for the
Chief Security Officer, issued a Memorandum (Annex A), directing the Security guards to report for duty
2 hours in advance of the usual time for guard work. Pursuant thereto, claimants had been rendering
such overtime work until January 13, 1954, when the order was revoked after... a change of
management.

Petitioner, however, contends that said memorandum of the Assistant Chief Security Officer was issued
without authority and, therefore, it is not bound to pay for the alleged overtime. But, as found by
respondent court, shortly after the enforcement of the aforementioned... memorandum, the security
guards protested to the management of petitioner corporation, more particularly to Mr. Santiago de la
Cruz, General Manager, Atty. Gr

Instead of revoking said memorandum on the ground that it was... unauthorized by the management,
General Manager De la Cruz told the security guards that the reason why it was being enforced, was to
discipline them and that their work was only light and that 1 hour was of no importance.

There is no question that a contract of employment exists between petitioner and claimants-
respondents, and that pursuant to the terms thereof, the latter are to render 8 hours labor. When
petitioner's official required respondents to render an... additional hour work, and the respondents had
to comply (as non-compliance was punishable and actually punished with disciplinary action), a
supplemental contractual obligation was created both under the terms of the original contract of
employment and of the Eight-hour Labor

Law,... affirmed

Principles:

we held that the Court of Industrial Relations has jurisdiction over cases (1) when the labor dispute
affects an industry which is indispensable to the national interest and is so certified by the President to
the... industrial court (Sec. 10, Rep. Act No. 875) ; (2) when the controversy refers to minimum wage
under the Minimum Wage Law (Rep. Act No. 602); (3) when it involves hours of employment under the
Eight-Hour Labor Law (Com. Act No. 444); and (4) when it involves an unfair labor... practice (Sec. 5-a,
Rep. Act No. 875).

G.R. No. L-59847 October 18, 1982

PHILIPPINES INTER-FASHION, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION,

SHERIFF'S OFFICE OF THE NATIONAL LABOR RELATIONS COMMISSION, AND NATIONAL FEDERATION
OF LABOR UNIONS (NAFLU), respondents.

Facts:

Phil. Inter-fashion, Inc. decided to retrench its employees and selected about 40 employees to be
dismissed due to lack of work. The day after the company informed about 20 of the affected employees
regarding the plan, around 200 employees went to the Ministry of Labor and talked with then Deputy
Minister who advised them to return to their work. They actually returned but did not work. The
following day, the workers returned to their work with the return-to-work order but the company did
not allow them to work.

Issues:

1. WoN the petitioner must be deemed to have waived its right to pursue the case of illegal strike
against the 114 employees who were not reinstated and who pursued their illegal lockout claim against
petitioner

2. WoN the said 114 employees are entitled to reinstatement with three months' backwages.

Held:

1. There was no clear and unequivocal waiver on the part of petitioner and on the contrary the record
shows that it tenaciously pursued its application for their dismissal.

2. In view of the undisputed findings of illegal strike on the part of the 114 employees and illegal lockout
on petitioner's part, both parties are in pari delicto and such situation warrants the restoration of the
status quo ante and bringing the parties back to the respective positions before the illegal strike and
illegal lockout through the reinstatement of the said 114 employees.

Ratio:

1. The Bisaya case (102 Phil. 438) is inapplicable to the present case. xxx if petitioner really had any
intention to pardon the 114 strikers, it would have included them in its motion to withdraw on
November 17, 1980. The fact that it did not, but instead continued to pursue the case to the end, simply
means that it did not pardon the, 114 strikers.

2. The finding of illegal strike was not disputed. xxx On the other hard, the finding of illegal lockout was
likewise not, disputed. xxx The findings show that both petitioner and the 114 strikers are in pari delicto,
a situation which warrants the maintenance of the status quo. This means that the contending parties
must be brought back to their respective positions before the controversy; that is, before the strike.
Therefore, the order reinstating the 114 employees is proper.

UNIVERSITY OF PANGASINAN FACULTY UNION, petitioner, vs. UNIVERSITY OF PANGASINAN And

NATIONAL LABOR RELATIONS COMMISSION, respondents.

GRN L-63122  February 20, 1984

FACTS:

Petitioner is a labor union composed of faculty members of the respondent University of Pangasinan, an
educational institution duly organized and existing by virtue of the laws of the Philippines.

The petitioner filed a complaint against the private respondent with the Arbitration Branch of the NLRC-
Dagupan City 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 60% of the incremental proceeds
of increased tuition fees; and (c) payment of salaries for suspended extra loads.

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 10 months a school year, divided into 2
semesters of 5 months each, excluding the 2 months summer vacation. These teachers are paid their
salaries on a regular monthly basis.

During the semestral break (Nov. 7- Dec. 5, 1981), 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.

During the same school year (1981-1982), the private respondent was authorized by the Ministry of
Education and Culture to collect, from its students a 15% increase of tuition fees. Petitioner’s members
demanded a salary increase effective the first semester of said schoolyear to be taken from the 60%
percent incremental proceeds of the said increased tuition fees as mandated by the PD 451. Private
respondent refused.

ISSUES:

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,

RULING:

1. Yes. 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.”

The petitioner’s members are full-time employees receiving their monthly salaries irrespective of the
number of working days or teaching hours in a month. However, they find themselves in a situation
where they are forced to go on leave during semestral breaks. These semestral breaks are in the nature
of work interruptions beyond the employees’ control. 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 in the instant case. The petitioner’s members received
their regular salaries during this period. It is clear from the provision of law that it contemplates a “no
work” situation where the employees voluntarily absent themselves. Petitioners, in the case at bar, do
not voluntarily absent themselves during semestral breaks. Rather, they 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.

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.

Although said to be on forced leave, professors and teachers are, nevertheless, burdened with the task
of working during a period of time supposedly available for rest and private matters. There are papers to
correct, students to evaluate, deadlines to meet, and periods within which to submit grading reports.
Although they may be considered by the respondent to be on leave, the semestal break could not be
used effectively for the teacher’s own purposes for the nature of a teacher’s job imposes upon him
further duties which must be done during the said period of time. Arduous preparation is necessary for
the delicate task of educating our children. Teaching involves not only an application of skill and an
imparting of knowledge, but a responsibility which entails self dedication and sacrifice. It would be
unfair for the private respondent to consider these teachers as employees on leave without pay to suit
its purposes and, yet, in the meantime, continue availing of their services as they prepare for the next
semester or complete all of the last semester’s requirements.

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. With regard to the second issue, under Section 3 of Presidential Decree 451, “no increase in
tuition or other school fees or charges shall be approved 60% of the proceeds is allocated for
increase in salaries or wages of the members of the faculty and all other employees of the school
concerned, and the balance for institutional development, student assistance and extension
services, and return to investments: Provided, That in no case shall the return to investments
exceed twelve (12%) per centum of the incremental proceeds; . . .”

Such allowances must be taken in resources of the school not derived from tuition fees.

If the school happen to have no other resources to grant allowances and benefits, either mandated by
law or secured by collective bargaining, such allowances and benefits should be charged against the
return to investments referred.

The law is clear. 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.

Petition for certiorari is GRANTED.