Vous êtes sur la page 1sur 35

1

CASE DIGEST_PART 3(1)


1a. UNIVERSITY OF THE EAST vs. UNIVERSITY OF THE EAST EMPLOYEES ASSOCIATION G.R. No. 179593 September 14, 2011 FACTS: Petitioner UE is an educational institution duly organized and existing under the Philippine laws. On the other hand, respondent UEEA is a duly registered labor union of the rand-and-file employees of UE. Prior to SY 1983-1984, the 70% incremental proceeds from tuition fee increases as mandated by PD No. 451 was distributed by UE in proportion to the average number of academic and non-academic personnel. However, starting SY 1994-1995, the 70% incremental proceeds was distributed by UE based on a new formula of percentage of salary. Relative to this, UEEA sent a letter to the UE President questioning the manner of distribution of the employees share in the 1994-1995 tuition fee increase. After UEEAs second letter reiterating the earlier objection, a tripartite meeting was held among the representatives of management, faculty union and UEEA. It was agreed that the distribution of the incremental proceeds would now be based on percentage of salary and not anymore on the average number of personnel. UEEA filed a complaint before the NLRC for non-payment/underpayment of the rank-and-file employees share of the tuition fee increases. It alleged that starting SY 1994-1995, UE had been withholding from the rank-and-file employees a sizeable portion of their share in the tuition increases. UE arbitrarily and unilaterally distributed the tuition fee increase proceeds through percentage based on salaries, thereby reducing the shares of the rank-and-file employees, while increasing those of the management personnel. UE denied the allegations and stated that discretion in the distribution was vested in the school authorities. The Labor Arbiter rendered a decision favoring the UEEA. The LA ruled that the equal sharing distribution scheme in relation to the incremental proceeds from the tuition fee increases had been adopted as a matter of policy by UE since 1983 and was made part of its collective bargaining agreement with UEEA and the existence of such policy was made part of the tripartite agreement. ISSUE: WON the change in the scheme of distribution of the incremental proceeds from tuition fee increase is a diminution of benefit. HELD: No. The Court agrees with petitioner UE that the change in the distribution of the 70% incremental proceeds from tuition fee increase from equal sharing to percentage of salaries is not a diminution of benefits. Its distribution to covered employees based on equal sharing scheme cannot be considered to have ripened into a company practice that the respondents have a right to demand. Generally, employees have a vested right over existing benefits voluntarily granted to them by their employer, thus, said benefits cannot be reduced, diminished, discontinued or eliminated by the latter. This principle against diminution of benefits, however, is applicable only if the grant or benefit is founded on an express policy or has ripened into a practice over a long period of time which is consistent and deliberate. It does not contemplate the continuous grant of unauthorized or irregular compensation but it presupposes that a company practice, policy and tradition favorable to the employees has been clearly established; and that the payments made by the company pursuant to it have ripened into benefits enjoyed by them. In sum, the benefit must be characterized by regularity, voluntary and deliberate intent of the employer to grant the benefits over a significant period of time. In the case at bar, the distribution of the 70% incremental proceeds based on equal sharing scheme cannot be held to have ripened into a company practice that the respondents have a right to demand. Jurisprudence is replete with the rule specifying a minimum number of years within which a company practice must be exercised in order to constitute voluntary company practice. 1b. MATERNITY CHILDRENS HOSPITAL vs. SECRETARY OF LABOR G.R. No. 78909 June 30, 1989 FACTS:
1

Petitioner is a semi-government hospital , managed by the Board of Directors of the Cagayan de Oro Womens Club and Puericulture Center. The hospital derives its finances from the club itself as well as from paying patients, averaging 130 per month. It is also partly subsidized by the PCSO and the CDO City government. Petitioner has 41 employees. Aside from salary and living allowances, the employees are given food but the amount spent therefor is deducted from their respective salaries. On May 23, 1986, 10 employees of the petitioner employed in different capacities/positions filed a complaint with the Office of the Regional Director of Labor and Employment in Region X for underpayment of their salaries and ECOLAS. The Regional Director then directed 2 of his Labor Standar and Welfare Officers to inspect the records of the petitioner to ascertain the truth of the allegations. They submitted a report confirming that there was underpayment of wages and ECOLAS of all the employees by the petitioner. The Regional Director issued an Order directing the payment of P723,888.58 representing the underpayment of wages and ECOLAS to all the petitioners employees. Petitioner appealed to the Minister of Labor and Employment who rendered a Decision modifying the said Order. The petitioner filed a motion for reconsideration but was denied by the Secretary of Labor. ISSUE: WON the Regional Director had jurisdiction over the case. HELD: The present case is a labor standards case governed by Art. 128-b of the Labor Code as amended by E.O. No. 111. Labor standards refer to the minimum requirements prescribed by existing laws, rules and regulations relating to wages, hours of work, cost of living allowance and other monetary and welfare benefits, including occupational, safety and health standards. Under the present rules, a Regional Director exercises both visitorial and enforcement power over labor standard cases, and is therefore empowered to adjudicate money claims, provided there still exists an employer-employee relationship and the findings of the regional office is not contested by the employer concerned. 2. PEFTOK INTEGRATED SERVICES, INC. vs. NLRC G.R. No. 124841 July 31, 1998 FACTS: On October 13, 1989, the private respondents executed a waiver of all their claims against PEFTOK for the period ending on June 30, 1989. Said waiver appeared to bar all claims they may have had against PEFTOK before June 30, 1989. Urged by their entitlement to full benefits as provided in the labor arbiters decision, the private respondents sought the issuance of an alias writ of execution. On May 29, 1992, they again executed another waiver and quitclaim purportedly renouncing whatever claims they may have against PEFTOK for the period ending March 15, 1998. Such waiver or quitclaim was worded to preclude whatever claim they may have against PEFTOK on or before March 16, 1998. However, the private respondents subsequently executed affidavits stating that the quitclaims were prepared and readied for their signature by PEFTOK and they were forced to sign the same for fear that they would not be given their salary on pay day, and worse, their services would be terminated if they did not sign the said quitclaims. Private respondents asserted that the waivers of claims signed by them are contrary to public policy; the same being written in the English language which they do not understand and the contents thereof were not explained to them. The Labor Arbiter granted their prayer for alias writ of execution. ISSUE: WON the waivers/quitclaims signed by the private respondents are contrary to public policy. HELD: It is decisively clear that the private respondents affixed their signatures to subject waivers and/or quitclaims for fear that they would not be paid their salaries on pay day or worse, still, their services would be terminated if they did not sign those papers. In short, there was no voluntariness in the execution of
2

3
the quitclaim or waivers in question. It should be borne in mind that in this jurisdiction, quitclaims, waivers or releases are looked upon with disfavor. Necessitous men are not free men. They are commonly frowned upon as contrary to public policy and ineffective to bar claims for the full measure of the workers legal rights. 3. SAN MIGUEL BREWERY SALES FORCE UNION (PTGWO) vs. HON. BLAS F. OPLE G.R. No. L-53515 February 8, 1989 FACTS: On April 17, 1978, a collective bargaining agreement was entered into by petitioner PTGWO and the private respondent, San Miguel Corporation, Section 1 of Article IV of which provided as follows: Art IV, Section 1. Employees within the appropriate bargaining unit shall be entitled to a basic monthly compensation plus commission based on their respective sales. In September 1979, the company introduced a marketing scheme known as the Complementary Distribution System (CDS) whereby its beer products were offered for sale directly to wholesalers through San Miguels sales offices. PTGWO filed a complaint for unfair labor practice in the Ministry of Labor, with a notice of strike on the ground that the CDS was contrary to the existing marketing scheme whereby the Route Salesmen were assigned specific territories within which to sell their stocks of beer, and wholesalers had to buy beer products from them, not from the company. It was alleged that the new marketing scheme violates Section 1 Art. IV of the CBA because the introduction of the CDS would reduce the take-home pay of the salesmen and their truck helpers for the company would be unfairly competing with them. The Minister of Labor found that the establishment of the new sales scheme was part of the overall plan of the company to improve efficiency and economy and at the same time gain profit to the highest and not designed to discourage union organization or diminish its influence. Hence, the petition. ISSUE: WON the CDS violates the collective bargaining agreement (CBA). HELD: No. The Minister of Labor was correct in holding that the CDS is a valid exercise of management prerogatives: Except as limited by special laws, an employer is free to regulate, according to his own discretion and judgment, all aspects of employment, including hiring, work assignments, working methods, time, place and manner of work, tools to be used, processes to be followed, supervision of workers, working regulations, transfer of employees, work supervision, lay-off of workers and the discipline, dismissal and recall of work So long as the companys management prerogatives are exercised in good faith for the advancement of the employers interest and not for the purpose of defeating or circumventing the rights of the employees under special laws or under valid agreements, this Court will uphold them. SMCs offer to compensate the members of its sales force who will be adversely affected by the implementation of the CDS by paying them a so-called back adjustment commission to make up for the commissions they might lose as a result of the CDS proves the companys good faith and lack of intention to bust their union. 4. NATIONAL SUGAR REFINERIES CORPORATION (NASUREFCO) vs. NLRC G.R. No. 101761 March 24, 1993 FACTS: Petitioner NASUREFCO, a corporation which is fully owned and controlled by the Government, operates 3 sugar refineries located at Bukidnon, Iloilo and Batangas. The Batangas refinery was privatized pursuant to Proclamation No. 50. Private respondent union represents the former supervisors of the NASUREFCO Batangas Sugar Refinery.

4
On June 1, 1988, NASUREFCO implemented a Job Evaluation (JE) Program affecting all employees, from rank-and-file to department heads. The JE Program was designed to rationalize the duties and functions of all positions, reestablish levels of responsibility, and recognize both wage and operational structures. Jobs were ranked according to effort, responsibility, training and working conditions and relative worth of the job. As a result, all positions were re-evaluated and all employees including the members of respondent union were granted salary adjustments and increases in benefits commensurate to their actual duties and functions. Two years after the implementation of the JE Program, the members of respondent union filed a complaint with the executive labor arbiter for non-payment of overtime, rest day and holiday pay allegedly in violation of Art. 100 of the Labor Code. ISSUE: WON the members of the respondent union are entitled to overtime, rest day and holiday pay. HELD: The members of the union are not entitled to overtime, rest and holiday pay since they fall within the classification of managerial employees which makes them a part of the exempted employees. It must of necessity be ascertained first whether or not the union members, as supervisory employees, are to be considered as officers or members of the managerial staff who are exempt from the coverage of Article 82 of the Labor Code. It is not disputed that the members of respondent union are supervisory employees, as defined employees, as defined under Article 212(m), Book V of the Labor Code on Labor Relations, which reads: 'Managerial employee' is one who is vested with powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharged, assign or discipline employees. Supervisory employees are those who, in the interest of the employer effectively recommend such managerial actions if the exercise of such authority is not merely routinary or clerical in nature but requires the use of independent judgment. All employees not falling within any of those above definitions are considered rank-and-file employees of this Book." Article 82 of the Labor Code states: The provisions of this title shall apply to employees in all establishments and undertakings whether for profit or not, but not to government employees, managerial employees, field personnel, members of the family of the employer who are dependent on him for support, domestic helpers, persons in the personal service of another, and workers who are paid by results as determined by the Secretary of Labor in Appropriate regulations. As used herein, 'managerial employees' refer to those whose primary duty consists of the management of the establishment in which they are employed or of a department or subdivision thereof, and to other officers or members of the managerial staff. 'Sec. 2. Exemption. The provisions of this rule shall not apply to the following persons if they qualify for exemption under the condition set forth herein: (b) Managerial employees, if they meet all of the following conditions, namely: (1) Their primary duty consists of the management of the establishment in which they are employed or of a department or subdivision thereof: (2) They customarily and regularly direct the work of two or more employees therein: (3) They have the authority to hire or fire other employees of lower rank; or their suggestions and recommendations as to the hiring and firing and as to the promotion or any other change of status of other employees are given particular weight. (c) Officers or members of a managerial staff if they perform the following duties and responsibilities:

5
(1) The primary duty consists of the performance of work directly related to management policies of their employer; (2) Customarily and regularly exercise discretion and independent judgment; (3) (i) Regularly and directly assist a proprietor or a managerial employee whose primary duty consists of the management of the establishment in which he is employed or subdivision thereof; or (ii) execute under general supervision work along specialized or technical lines requiring special training, experience, or knowledge; or (iii) execute under general supervision special assignments and tasks; (4) Who do not devote more 20 percent of their hours worked in a work-week to activities which are not directly and closely related to the performance of the work described in paragraphs (1), (2), and above." They are clearly officers or members of the managerial staff because they meet all the conditions prescribed by law and, hence, they are not entitled to overtime, rest day and supervisory employees under Article 212 (m) should be made to apply only to the provisions on Labor Relations, while the right of said employees to the questioned benefits should be considered in the light of the meaning of a managerial employee and of the officers or members of the managerial staff, as contemplated under Article 82 of the Code and Section 2, Rule I Book III of the implementing rules. In other words, for purposes of forming and joining unions, certification elections, collective bargaining, and so forth, the union members are supervisory employees. In terms of working conditions and rest periods and entitlement to the questioned benefits, however, they are officers or members of the managerial staff, hence they are not entitled thereto. The union members will readily show that these supervisory employees are under the direct supervision of their respective department superintendents and that generally they assist the latter in planning, organizing, staffing, directing, controlling communicating and in making decisions in attaining the company's set goals and objectives. These supervisory employees are likewise responsible for the effective and efficient operation of their respective departments. More specifically, their duties and functions include, among others, the following operations whereby the employee: 1) assists the department superintendent in the following: a) planning of systems and procedures relative to department activities; b) organizing and scheduling of work activities of the department, which includes employee shifting scheduled and manning complement; c) decision making by providing relevant information data and other inputs; d) attaining the company's set goals and objectives by giving his full support; e) selecting the appropriate man to handle the job in the department; and f) preparing annual departmental budget; 2) observes, follows and implements company policies at all times and recommends disciplinary action on erring subordinates; 3) trains and guides subordinates on how to assume responsibilities and become more productive; 4) conducts semi-annual performance evaluation of his subordinates and recommends necessary action for their development/advancement;

6
5) represents the superintendent or the department when appointed and authorized by the former; 6) coordinates and communicates with other inter and intra department supervisors when necessary; 7) recommends disciplinary actions/promotions; 8) recommends measures to improve work methods, equipment performance, quality of service and working conditions; 9) sees to it that safety rules and regulations and procedure and are implemented and followed by all NASUREFCO employees, recommends revisions or modifications to said rules when deemed necessary, and initiates and prepares reports for any observed abnormality within the refinery; 10) supervises the activities of all personnel under him and goes to it that instructions to subordinates are properly implemented; and 11) performs other related tasks as may be assigned by his immediate superior. From the foregoing, it is apparent that the members of respondent union discharge duties and responsibilities which ineluctably qualify them as officers or members of the managerial staff, as defined in Section 2, Rule I Book III of the aforestated Rules to Implement the Labor Code, viz.: (1) their primary duty consists of the performance of work directly related to management policies of their employer; (2) they customarily and regularly exercise discretion and independent judgment; (3) they regularly and directly assist the managerial employee whose primary duty consist of the management of a department of the establishment in which they are employed (4) they execute, under general supervision, work along specialized or technical special training, experience, or knowledge; (5) they execute, under general supervision, special assignments and tasks; and (6) they do not devote more than 20% of their hours worked in a work-week to activities which are not directly and clearly related to the performance of their work hereinbefore described. Under the facts obtaining in this case, The Court is constrained to agree with petitioner that the union members should be considered as officers and members of the managerial staff and are, therefore, exempt from the coverage of Article 82. Perforce, they are not entitled to overtime, rest day and holiday. 5. APEX MINING COMPANY, INC. vs. NLRC G.R. No. 94951 April 22, 1991 FACTS: Private respondent Sinclitica Candida was employed by petitioner Apex Mining Company, Inc. to perform laundry services at its staff house located at Masara, Maco, Davao del Norte. In the beginning, she was paid on a piece rate basis and later on a monthly basis at P250.00 a month which was ultimately increased to P575.00 a month. On December 18, 1987, while she was attending to her assigned task and she was hanging her laundry, she accidentally slipped and hit her back on a stone. She reported the accident to her immediate supervisor and to the personnel officer. As a result of the accident she was not able to continue with her work. She was permitted to go on leave for medication. Her immediate supervisor offered her an amount to persuade her to quit her job, but Candida refused the offer and preferred to return to work. Petitioner did not allow her to return to work and dismissed her on February 4, 1988. Private respondent filed a request for assistance with the Department of Labor and Employment and the Labor Arbiter rendered a decision ordering the Apex Mining Company, Inc. to pay the complainant. Not satisfied, the petitioner appealed to the public respondent NLRC wherein the appeal was dismissed for lack of merit and affirmed the appealed decision. A motion for reconsideration was denied, hence, the petition
6

lines requiring

7
for review by certiorari with the main thrust that the private respondent should be treated as a mere househelper or domestic servant and not as a regular employee of petitioner. ISSUE: WON private respondent is a mere househelper or domestic servant and not as a regular employee of Apex. HELD: No. The petition is devoid of merit. Under Rule XIII, Section 1(b), Book III of the Labor Code it provides: The term househelper as used herein is synonymous to the term domestic servant and shall refer to any person, whether male or female, who renders services in and about the employers home and which services are usually necessary or desirable for the maintenance and enjoyment thereof, and ministers exclusively to the personal comfort and enjoyment of the employers family. The definition cannot be interpreted to include househelp or laundrywomen working in staffhouses of a company, like petitioner who attends to the needs of the companys guest and other persons availing of said facilities. They may not be considered as within the meaning of a househelper or domestic servant as above-defined by law. The criteria is the personal comfort and enjoyment of the family of the employer in the home of said employer. While it may be true that the nature of the work of a househelper, domestic servant or laundrywoman in a home or in a company staffhouse may be similar in nature, the difference in their circumstances is that in the former instance they are actually serving the family while in the latter case, whether it is a corporation or a single proprietorship engaged in business or industry or any other agricultural or similar pursuit, service is being rendered in the staffhouses or within the premises of the business of the employer. In such instance, they are employees of the company or employer in the business concerned entitled to the privileges of a regular employee. 6. SAN MIGUEL BREWERY, INC. vs. DEMOCRATIC LABOR ORGANIZATION G.R. No. L-18353 July 31, 1963 FACTS: After the morning roll call, the employees leave the plant of the company to go on their respective sales routes either at 7:00am for softdrinks trucks or 8:00am 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. The respondent union filed complaint against the San Miguel Brewery Inc. embodying 12 demands for the betterment of the conditions of employment of its members. They manifested its desire to confine its claim to its demands for overtime, night-shift differential pay, and attorneys fees. The Court of Industrial Relations ordered that the respondents be paid overtime compensation as required by the Eight-Hour Labor Law. ISSUE: WON respondent union is entitled to the Eight-Hour Labor Law. HELD: No. 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
7

8
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. In the present case, the members of the respondent union are considered as employees paid on piece work, pakiao, or commission basis insofar as the extra work they perform. To that effect, they cannot be subject to the Eight-Hour Labor Law. The Court said: 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 8 hours, thereby classifying him as if he were on a piece work basis, and therefore, technically speaking, he is not subject to the Eight-Hour Labor Law. 7. NATIONAL SHIPYARDS AND STEEL CORPORATION (NASSCO) vs. CIR| G.R. No. L-17068 December 30, 1961 FACTS: The petitioner NASSCO, a government-owned and controlled corporation, is the owner of several barges and tugboats used in the transportation of cargoes and personnel in connection with its business of shipbuilding and repair. In order that its bargeman could immediately be called to duty whenever their services are needed, they are required to stay in their respective barges, for which reason they are given living quarters therein as well as subsistence allowance during the time they are on board. However, upon prior authority of their superior officers, they may leave their barges when said barges are idle. Thirty-nine (39) crew members of petitioners tugboat service, including respondent Malondras, filed with the Industrial Court a complaint for the payment of overtime compensation. The Industrial Court issued an order directing the court examiner to compute the overtime compensation due the claimants. The examiner found that the petitioners rendered an average overtime service of five (5) hours each day for the period of January 1 to December 31, 1957 and upon approval of the report by the Court, all the claimants were paid their overtime compensation by the NASSCO. The second partial report covering the period from January 1, 1954 to December 31, 1956 was again approved by the Court and the crewmen concerned were paid their overtime compensation. However, Malondras was not included as his daily time sheets were not then available. Because of this, Malondras filed petitions in the same case asking for the compensation and payment of his overtime compensation for the period of January 1, 1954 to December 31, 1956 and from January to April 30, 1957. This petition was opposed by NASSCO upon the argument that its records do not indicate the actual number of working hours rendered by Malondras during the periods in question. The Court then submitted a report giving Malondras an average of 16 overtime hours a day and recommending the payment of overtime compensation during the periods covered by the report. NASSCO moved for reconsideration but was denied, hence, the appeal. ISSUE: WON Malondras is entitled to receive overtime compensation only for the actual service in excess of eight hours that he can prove and not for 16 hours a day. HELD: The Court does not agree that Malondras should be paid overtime compensation for every hour in excess of the regular working hours that he was on board his vessel or barge each day, irrespective of whether or not he actually put in work during those 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 the law to require their employers to pay them overtime for even when they are not actually working; otherwise, every sailor on board a vessel would be entitled to overtime for 16 hours each day, even if he had spent all those hours resting or sleeping in his bunk, after his regular tour of duty. The correct criterion in determining whether or not sailors are entitled to overtime pay is not, therefore, whether they were on board and can not leave ship beyond the regular 8 working hours a day, but whether they actually rendered service in excess of said number of hours.
8

Section 1 of CA No. 444 (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. 8. CALTEX REGULAR EMPLOYEES AT MANILA OFFICE, LEGAZPI BULK DEPOT AND MARINDUQUE BULK DEPOT (MACLU) vs. CALTEX (PHILIPPINES) INC. G.R. No. 111359 August 15, 1995 FACTS: Petitioner Union and private respondent Caltex entered into a collective bargaining agreement (1985 CBA), which among others, included the following provisions: the regular work week shall consist of 8 hours per day, 7 days, Monday through Sunday, during which regular rates of pay shall be paid in accordance with Annex B and work on the employees one Day of Rest, shall be considered a special work day, during which Day of Rest rates of pay shall be paid as provided in Annex BProvided, however employees required to work in excess of 40 hours in any week shall be compensated in accordance with Annex B of this Agreement. The Union instituted a complaint for unfair labor practice against Caltex alleging violation of the provisions of the 1985 CBA. The Caltex was charged with shortchanging its employees when Caltex compensated work performed on the first 2 hours of Saturday, an employees day of rest, at regular rates, when it should be paying at day of rest or day off rates. ISSUE: WON Caltex violated the provisions of Annex B of the 1985 CBA. HELD: In all the CBAs (1973, 1976, 1979, 1982), Article III provides that only work on an employees one day of rest shall be paid on the basis of day of rest rates. The relevant point here is that petitioner Union had never suggested that more than 1 day of rest had been agreed upon, and certainly Caltex had never treated Article III or any other portion of the CBAs as providing 2 days of rest. It is well settled that the contemporaneous and subsequent conduct of the parties may be taken into account by a court called upon to interpret and apply a contract entered into by them. The Court also finds the petitioners contention of overtime work bereft of merit. Overtime work consists of hours worked on a given day in excess of the applicable work period, which here is 8 hours. The hours worked must be in excess of and in addition to the 8 hours worked during the prescribed daily work period or the 40 hours worked during the regular work week Monday thru Friday. In the present case, under the 1985 CBA, hours worked on a Saturday do not, by that fact alone, necessarily constitute overtime work compensable at premium rates of pay. It is only when an employee has been required on Saturday to render work in excess of the 40 hours which constitute the regular work week that such employee may be considered as performing overtime work on that Saturday. 9. JULIO CAGAMPAN, et al. vs. NLRC| G.R. Nos. 85122-24 March 22, 1991 FACTS: The petitioners, all seamen, entered into separate contracts of employment with the Golden Light Ocean Transport, Ltd., through its local agency, private respondent Ace Maritime Agencies, Inc. Petitioners were deployed on May 7, 1985 and discharged on July 12, 1986. Thereafter, petitioners collectively and/or individually filed complaints for non-payment of overtime pay, vacation pay and terminal pay against private respondent. They also claimed to sign their contracts in blank. They also averred that although they agreed to render services on board the vessel Rio Colorado managed by Golden Light Ocean Transport, Ltd., the vessel they actually boarded was MV SOIC I managed by Columbus Navigation. Two petitioners charged that although they were employed as Ordinary Seamen, they actually performed the work and duties of Able Seamen. The POEA rendered a decision dismissing petitioners claim for terminal
9

10
pay but granted their prayer for leave pay and overtime pay. Upon appeal, the NLRC reversed the decision of POEA and dismissed the cases for lack of merit. ISSUE: WON the NLRC gravely abused its discretion or erred in deciding in favor of private respondent company. HELD: No. The Court sustained the finding of NLRC that petitioners were actually paid more than the amounts fixed in their employment contracts. The overpayment is more than enough and sufficient to offset whatever claims for leave pay they filed. The NLRC cannot be faulted also for disallowing the payment of overtime pay because it merely straightened out the distorted interpretation asserted by petitioners and defined the correct interpretation of the provision on overtime pay embodied in the contract conformably with settled doctrines on the matter. Notably, the NLRC ruling on the disallowance of overtime pay is ably supported by the fact that petitioners never produced any proof of actual performance of overtime work. 10. ROMEO LAGATIC vs. NLRC G.R. No. 121004 January 28, 1998 FACTS: Petitioner Romeo Lagatic was employed in May 1986 by Cityland, first as a probationary sales agent, and later on as a marketing specialist. He was tasked with soliciting sales for the company, with the corresponding duties of accepting call-ins, referrals, and making client calls and cold calls. Cold calls refer to the practice of prospecting for clients through the telephone directory. Cityland, believing that the same is an effective and cost-efficient method of finding clients, requires all its marketing specialists to make cold calls. The number of cold calls depends on the sales generated by each: more sales mean less cold calls. Likewise, in order to assess cold calls made by the sales staff, as well as to determine the results thereof, Cityland requires the submission of daily progress reports on the same. On October 22, 1991, Cityland issued a written reprimand to petitioner for his failure to submit cold call reports for September 10, October 1 and 10, 1991. This notwithstanding, petitioner again failed to submit cold call reports for September 2, 5, 8, 10, 11, 12, 15, 17, 18, 19, 20, 22, and 28, as well as for October 6, 8, 9, 10, 12, 13 and 14, 1992. Petitioner was required to explain his inaction, with a warning that further non-compliance would result in his termination from the company. In a reply dated October 18, 1992, petitioner claimed that the same was an honest omission brought about by his concentration on other aspects of his job. Cityland found said excuse inadequate and, on November 9, 1992, suspended him for three days, with a similar warning. Notwithstanding the aforesaid suspension and warning, petitioner again failed to submit cold call reports for February 5, 6, 8, 10 and 12, 1993. He was verbally reminded to submit the same and was even given up to February 17, 1993 to do so. Instead of complying with said directive, petitioner, on February 16, 1993, wrote a note, "TO HELL WITH COLD CALLS! WHO CARES?" and exhibited the same to his coemployees. To worsen matters, he left the same lying on his desk where everyone could see it. On February 23, 1993, petitioner received a memorandum requiring him to explain why Cityland should not make good its previous warning for his failure to submit cold call reports, as well as for issuing the written statement aforementioned. On February 24, 1993, he sent a letter-reply alleging that his failure to submit cold call reports should trot be deemed as gross insubordination. He denied any knowledge of the damaging statement, "TO HELL WITH COLD CALLS!" Finding petitioner guilty of gross insubordination, Cityland served a notice of dismissal upon him on February 26, 1993. Aggrieved by such dismissal, petitioner filed a complaint against Cityland for illegal dismissal, illegal deduction, underpayment, overtime and rest day pay, damages and attorney's fees. The labor arbiter dismissed the petition for lack of merit. On appeal, the same was affirmed by the NLRC; hence the present recourse. ISSUE: WON NLRC gravely abused its discretion in not finding that petitioner was illegally dismissed.
10

11

HELD: The petition lacks merit. To constitute a valid dismissal from employment, two requisites must be met, namely: (1) the employee must be afforded due process, and (2) the dismissal must be for a valid cause. Employers may, thus, make reasonable rules and regulations for the government of their employees, and when employees, with knowledge of an established rule, enter the service, the rule becomes a part of the contract of employment. It is also generally recognized that company policies and regulations, unless shown to be grossly oppressive or contrary to law, are generally valid and binding on the parties and must be complied with. Corollarily, an employee may be validly dismissed for violation of a reasonable company rule or regulation adopted for the conduct of the company business. An employer cannot rationally be expected to retain the employment of a person whose . . . lack of regard for his employer's rules . . . has so plainly and completely been bared." 5 Petitioner's continued infraction of company policy requiring cold call reports, as evidenced by the 28 instances of non-submission of aforesaid reports, justifies his dismissal. RATIONALE EXEMPTION MANAGERIAL EMPLOYEES 11. INTERNATIONAL PHARMACEUTICALS INC. vs. NLRC 287 SCRA 213 FACTS: Petitioner International Pharmaceuticals, Inc. (IPI) is a corporation engaged in the manufacture, production and sale of pharmaceutical products wherein private respondent Virginia Camacho Quintia was employed as Medical Director of its Research and Development department. The government then launched a program encouraging the development of herbal medicine and offering incentives to interested parties. Petitioner decided to venture into the development of herbal medicine to find out if it would be feasible to include herbal medicine in its business. One of the government requirements was the hiring of a pharmacologist. Petitioner avers that it was only for this purpose that private respondent was hired, hence its contention that Quintia was a project employee. On July 10, 1986, Quintia was replaced as head of the Research and Development department by Paz Wong. Two days later, Quintia received an inter-office memorandum officially terminating her services allegedly because of the expiration of her contract of employment. Quintia filed a complaint charging petitioner with illegal dismissal and praying that petitioner be ordered to reinstate Quintia and to pay her full backwages and moral damages. Petitioner claimed that Quintia had been hired on a consultancy basis coterminous with the duration of the project involving the development of herbal medicine and that her employment was terminated upon the abandonment of that project. The Labor Arbiter rendered a decision that private respondent have been illegally dismissed and held that she was a regular employee and not a project employee and so could not be dismissed without just and/or legal causes as provided in the Labor Code. The NLRC affirmed this decision of the Labor Arbiter. ISSUE: WON the private respondent was considered to be a regular employee of the petitioner IPI. HELD: Article 280 of the Labor Code 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 service to be performed is seasonal in nature and the employment is for the duration of the season.
11

12

The primary standard,of determining a regular employment is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade 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 1 year, even if the performance is not continuous or merely intermittent, the law deems the 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 also considered regular, but only with respect to such activity and while such activity exists. 12. SHEPS

FIELD PERSONNEL 13. Rada vs NLRC (same with No. 24) In 1977, Rada was contracted by Philnor Consultants and Planners, Inc as a driver. He was assigned to a specific project in Manila. The contract he signed was for 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 hence, since he has a satisfactory record, he was re-contracted for an additional 10 months. After 10 months the project was not yet completed. Several contracts thereafter were made until the project was finished in 1985. At the completion of the project, Rada was terminated as his employment was co-terminous with the project. Rada 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 his position as driver was essential, necessary and desirable to the conduct of the business of Philnor. Philnor alleging 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 Philnor adopted the policy of allowing certain employees, not necessarily the project driver, to bring home project vehicles to afford fast and free transportation.The Labor Arbiter redered a decision ordering the company to reinstate the complainant to his former position without loss of seniority rights and other privileges with full backwages and disimissing the complaint for lack of merit. The NLRC rendered its assailed decision setting aside the labor arbiter's aforequoted decision and dismissing petitioner's complaint. ISSUE: Whether or not petitioners termination is valid and not entitled to separation pay considering that he is a project employee HELD: 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. Policy Instructions No. 20 of the Secretary of Labor, 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. Therefore, 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.
12

13

14. FAR EAST AGRICULTURAL SUPPLY, INC. vs. JIMMY LEBATIQUE FACTS: Petitioner Lebatique, was the truck driver of the respondent who is tasked to deliver animal feeds to his clients, complained of nonpayment of overtime work with DOLE and was consequently suspended by the petitioner for alleged illegal use of company vehicle and thereafter terminated. Petitioners contend that Lebatique was not dismissed but merely suspended; was not barred from entering the company premises since he never reported back towork; estopped from claiming that he was illegally dismissed since his complaint before the DOLE was only on the nonpayment of his overtime pay. Also maintained that Lebatique, is not entitled to overtime pay since he is a field personnel. The Labor Arbiter found that Lebatique was illegally dismissed, and ordered his reinstatement and the payment of his full back wages, 13th month pay, service incentiveleave pay, and overtime pay. The NLRC reversed the decision which was later on reversed by the CA. ISSUES: Whether or not Lebatique was a field personnel, not entitled to overtime pay. RULING OF THE SUPREME COURT: The Court held that field personnel are those who regularly perform their duties away from the principal place of business of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty. Lebatique is not a field personnel as defined above for the following reasons: (1)company drivers, are directed to deliver the goods at a specified time and place; (2)they are not given the discretion to solicit, select and contact prospective clients; and (3)Far East issued a directive that company drivers should stay at the clients premises during truck-ban hours. Drivers are under the control and supervision of management officers. Lebatique, therefore, is a regular employee whose tasks are usually necessary and desirable to the usual trade and business of the company. Thus, he is entitled to the benefits accorded to regular employees of Far East, including overtime pay and service incentive leave pay. 15. Union of Filipino Employees vs Vivar (same with Case No. 28) Facts: 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. Filipro filed a motion for clarification seeking 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. 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. Issue: WON the respondent's sales personnel are not field personnel under Article 82 of the Labor Code, not entitled to holiday pay Held: Under Article 82, field personnel are not entitled to holiday pay. Said article defines field personnel as "non-agricultural employees who regularly perform their duties away from the principal place of business or branch office of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty." The 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 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. The divisor to be used in computing holiday pay shall be 251 days.

13

14
16. SHEPS

PIECE WORKER 17.Labor Congress of the Philippines vs. NLRC Facts: The 99 persons named as petitioners in this proceeding were rank-and-file employees of respondent Empire Food Products, which hired them on various dates. Petitioners filed against private respondents a complaint for payment of money claims and for violation of labor standards laws They also filed a petition for direct certification of petitioner Labor Congress of the Philippines as their bargaining representative. In an Order dated October 24, 1990, Mediator Arbiter approved the memorandum of agreement and certified LCP "as the sole and exclusive bargaining agent among the rank-and-file employees of Empire Food Products for purposes of collective bargaining with respect to wages, hours of work and other terms and conditions of employment". On November 1990, petitioners through LCP President Navarro submitted to private respondents a proposal for collective bargaining. On January 1991, petitioners filed a complaint against private respondents for Unfair Labor Practice by way of Illegal Lockout and/or Dismissal; Union busting thru Harassments [sic], threats, and interfering with the rights of employees to self-organization; Violation of the Memorandum of Agreement dated October 23, 1990; Underpayment of Wages in violation of R.A. No. 6640 and R.A. No. 6727, such as Wages promulgated by the Regional Wage Board; Actual, Moral and Exemplary Damages." Issue: Whether or not the petitioners are entitled to labor standard benefits considering they are paid by piece rate worker. Ruling: The petitioners are so entitled to these benefits namely, holiday pay, premium pay, 13th month pay and service incentive leave. Three (3) factors lead us to conclude that petitioners, although piece-rate workers, were regular employees of private respondents. First, as to the nature of petitioners' tasks were necessary or desirable in the usual business of private respondents, who were engaged in the manufacture and selling of such food products; second, petitioners worked for private respondents throughout the year, and third, the length of time that petitioners worked for private respondents. Thus, while petitioners' mode of compensation was on a "per piece basis," the status and nature of their employment was that of regular employees. The Rules Implementing the Labor Code exclude certain employees from receiving benefits such as nighttime pay, holiday pay, service incentive leave and 13th month pay, "field personnel and other employees whose time and performance is unsupervised by the employer, including those who are engaged on task or contract basis, purely commission basis, or those who are paid a fixed amount for performing work irrespective of the time consumed in the performance thereof." Plainly, petitioners as piece-rate workers do not fall within this group. As mentioned earlier, not only did petitioners labor under the control of private respondents as their employer, likewise did petitioners toil throughout the year with the fulfillment of their quota as supposed basis for compensation. Further, in Section 8(b), Rule IV, Book III which we quote hereunder, piece workers are specifically mentioned as being entitled to holiday pay. SEC. 8. Holiday pay of certain employees. (b) Where a covered employee is paid by results or output, such as payment on piece work, his holiday pay shall not be less than his average daily earnings for the last seven (7) actual working days preceding the regular holiday: Provided, however, that in no case shall the holiday pay be less than the applicable statutory minimum wage rate. In addition, the Revised Guidelines on the Implementation of the 13th Month Pay Law, in view of the modifications to P.D. No. 851 19 by Memorandum Order No. 28, clearly exclude the employer of piece rate workers from those exempted from paying 13th month pay, to wit: 2. EXEMPTED EMPLOYERS The following employers are still not covered by P.D. No. 851: d. Employers of those who are paid on purely commission, boundary or task basis, and those who are paid a fixed amount for performing specific work, irrespective of the time consumed in the performance thereof, except where the workers are paid on piece-rate basis in which case the employer shall grant the required 13th month pay to such workers. The Revised Guidelines as well as the Rules and Regulations identify those workers who fall under the piece-rate category as those who are paid a standard amount for every piece or unit of work produced that is more or less regularly replicated, without regard to the time spent in producing the same. As to overtime pay, the rules, however, are different. According to Sec 2(e), Rule I, Book III of the Implementing Rules, workers who are paid by results including those who are paid on piece-work, takay, pakiao, or task basis, if their output rates are in accordance with the standards prescribed under Sec. 8,
14

15
Rule VII, Book III, of these regulations, or where such rates have been fixed by the Secretary of Labor in accordance with the aforesaid section, are not entitled to receive overtime pay. As such, petitioners are beyond the ambit of exempted persons and are therefore entitled to overtime pay. 18. SHEPS IDLE TIME 19. Luzon Stevedoring Co., Inc. vs. Luzon Marine Department Union Facts: LMDU 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. 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. CONTINUOUS WORK 20. State Marine Corporation vs. Cebu Seamens Association Facts: The petitioners were engaged in the business of marine coastwise transportation. They had a CBA with the Cebu Seamens Association. On September 12, 1952, the respondent union filed a complaint against the petitioners alleging that the officers and men working on board the petitioners vessels have not been paid their sick leave, vacation leave and overtime pay; that the petitioners threatened then to accept the reduction of salaries, observed by other ship owners; that after the Minimum Wage Law had taken effect, the petitioners required their employees on board their vessels, to pay the sum of P0.40 for every meal, while the masters and officers were required to pay their meals and that because the captain had refused to yield to the general reduction of salaries, the petitioners dismissed the captain. The petitioner, on their defense, stated that they have suffered a financial losses in the operation of their vessels and there is no law which provides for the payment of sick leave or vacation leave to employees of private firms; that with regards to their overtime pay, they have always observed the Eight-hour labor Law and that overtime does not apply to those who provide means of transportation. The decision ruled in favor of the respondent union. Issue: Whether or not the required meals which the petitioner company deducted from the salary of the employees is considered as facilities, and not supplements. Held: Supplements constitute extra remuneration or special privileges or benefits given to or received by the laborers over and above their ordinary earnings or wages. Facilities, on the other hand, are items of expense necessary for the laborers and his familys existence and subsistence so that by express provisions of law, they form part of the wage and when furnished by the employer are deductible therefrom, since if they are not so furnished, the laborer would spend and pay them just the same. It is argued that the food or meal given to the deck officers, marine engineers and unlicensed crew members in question, were mere facilities which should be deducted from wages, and not supplements which, according to Section 19 of the Minimum Wage Law, should not be deducted from such wages. It was found out that the meals were freely given to crew members prior to the effectivity of the Minimum Wage Law while they were on the high seas not as part of their wages but as a necessary matter in the maintenance of the health and efficiency of the crew members during the voyage. The deductions therein made for the meals given after August 4, 1951, should be returned to them, and the operator of the coastwise vessels
15

16
should continue giving the benefits. Wherefore, the petition is dismissed, finding out that the meals or food in question are not facilities but supplements. 21.Philippine Airlines, Inc., vs. NLRC Facts: Private respondent was employed as flight surgeon at petitioner company. He was assigned at the PAL Medical Clinic at Nichols and was on duty from 4:00 in the afternoon until 12:00 midnight. On February 17, 1994, at around 7:00 in the evening, private respondent left the clinic to have his dinner at his residence, which was about five-minute drive away. A few minutes later, the clinic received an emergency call from the PAL Cargo Services. One of its employees, Mr. Manuel Acosta, had suffered a heart attack. The nurse on duty, Mr. Merlino Eusebio, called private respondent at home to inform him of the emergency. The patient arrived at the clinic at 7:50 in the evening and Mr. Eusebio immediately rushed him to the hospital. When private respondent reached the clinic at around 7:51 in the evening, Mr. Eusebio had already left with the patient. Mr. Acosta died the following day. Upon learning about the incident, PAL Medical Director Dr. Godofredo B. Banzon ordered the Chief Flight Surgeon to conduct an investigation. The Chief Flight Surgeon required private respondent to explain why no disciplinary sanction should be taken against him. In his explanation, private respondent asserted that he was entitled to a thirty-minute meal break; that he immediately left his residence upon being informed by Mr. Eusebio about the emergency and he arrived at the clinic a few minutes later; that Mr. Eusebio panicked and brought the patient to the hospital without waiting for him. Finding private respondents explanation unacceptable, the management charged private respondent with abandonment of post while on duty. He was given ten days to submit a written answer to the administrative charge. In his answer, private respondent reiterated the assertions in his previous explanation. He further denied that he abandoned his post on February 17, 1994. He said that he only left the clinic to have his dinner at home. In fact, he returned to the clinic at 7:51 in the evening upon being informed of the emergency. After evaluating the charge as well as the answer of private respondent, petitioner company decided to suspend private respondent for three months effective December 16, 1994. Issue: Whether or not being a full-time employee is obliged to stay in the company premises for not less than eight (8) hours. Hence, he may not leave the company premises during such time, even to take his meals. Ruling: The Court does not agree with the petitioner. Articles 83 and 85 of the Labor Code read: Normal hours of workThe normal hours of work of any employee shall not exceed eight (8) hours a day. Health personnel in cities and municipalities with a population of at least one million (1,000,000) or in hospitals and clinics with a bed capacity of at least one hundred (100) shall hold regular office hours for eight (8) hours a day, for five (5) days a week, exclusive of time for meals, except where the exigencies of the service require that such personnel work for six (6) days or forty-eight (48) hours, in which case they shall be entitled to an additional compensation of at least thirty per cent (30%) 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. Art. 85. Meal periods.Subject to such regulations as the Secretary of Labor may prescribe, it shall be the duty of every employer to give his employees not less than sixty (60) minutes time-off for their regular meals. Section 7, Rule I, Book III of the Omnibus Rules Implementing the Labor Code further states: Sec. 7. Meal and Rest Periods.Every employer shall give his employees, regardless of sex, not less than one (1) hour time-off for regular meals, except in the following cases when a meal period of not less than twenty (20) minutes may be given by the employer provided that such shorter meal period is credited as compensable hours worked of the employee; (a) Where the work is non-manual work in nature or does not involve strenuous physical exertion; (b) Where the establishment regularly operates not less than sixteen hours a day; (c) In cases of actual or impending emergencies or there is urgent work to be performed on machineries, equipment or installations to avoid serious loss which the employer would otherwise suffer; and (d) Where the work is necessary to prevent serious loss of perishable goods. Rest periods or coffee breaks running from five (5) to twenty (20) minutes shall be considered as compensable working time. Thus, the eight-hour work period does not include the meal break. Nowhere in the law may it be inferred that employees must take their meals within the company premises. Employees are not prohibited from
16

17
going out of the premises as long as they return to their posts on time. Private respondents act of going home to take his dinner does not constitute abandonment. 22. SHEPS 23. DORIS

24. Hilario Rada vs. NLRC (same with Case No. 13) Facts: Petitioners initial employment to private respondent PHILNOR Consultants and Planners,Inc. was under a Contract of Employment for a Definite Period whereby petitioner was hired as driver for the construction supervision phase of Manila North Expressway Extension, Second Stage (MNEE Stage2) for a term of about 24 months. Petitioners first contract expired. Meanwhile, the main project , MNEE Stage 2, was not finished and was extended and remained in progress beyond the original period of 2.3 years. Respondent was in need of driver for the extended project, the position of driver was offered to petitioner, which he accepted. Hence a second Contract of Employment for a Definite Period of 10 months was executed between petitioner and respondent. 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. Petitioner was among those whose contract was about to expire , respondent renewed his contract of employment. The third contract of employment for a definite period was executed whereby petitioner was again employed as driver for 19 months. This third contract was subsequently extended for a number of times. The last extension from oct. 1,1985 to Dec.31 1985 was not extended any further because petitioner had no more work to do in project. Petitioner filed an amended complaint alleging that he was illegally dismissed since he was a regular employee entitled to security of tenure . ISSUE: Whether or not petitioner was a regular employee and was illegally dismissed. HELD: No. Although petitioner worked with Philnor as a driver for 8 years, the fact that his services were rendered only for a particular project which took the same period of time to complete categorizes him as a project employee. Petitioner was employed for one specific project. 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 o other projects as 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. 25. Interphil Laboratories Employees Union FFW vs. Interphil Laboratories Inc. Facts: Petitioner FFW is the sole and exclusive bargaining agent of the rank-and-file employees of respondent company engaged in the business of manufacturing and packaging pharmaceutical products. They had a Collective Bargaining Agreement (CBA) effective from 01 August 1990 to 31 July 1993. Sometime in Feb.1993 Mr.Salazar Vice president HR department of respondent company was approached by the union president and the union director. The two union officers inquired about the stand of the company regarding the duration of the Collective Bargaining Agreement (CBA) which was set to expire in few months. Salazar told the union that the matter be discussed during the formal negotiations. A meeting was held on Apr.15,1993 where the union officers asked whether Salazar would be amenable to make the new CBA effective for 2 years,starting Aug.1,1993. Salazar,however, declared that it would still be premature to discuss the matter and that the company could not make a decision at the moment. The very next day, all the rank and file employees of the company refused to follow their regular two shift work schedule of from 6:00 am- 6:00pm and from 6:00pm- 6:00am. At 2:00pm and 2:00am, respectively, the employees stopped working and left their workplace without sealing the containers and securing the raw
17

18
materials they were working on. To minimize the damage the overtime boycott was causing the company ,Salazar immediately asked for a meeting with the union officers. In the meeting the union director told Salzar that the employees would only return to their normal work schedule if the company agree to their demands as to the effectivity and duration of the new CBA. Since the union was apparently unsatisfied with the answer of the company,the overtime boycott continued. In addition, the employees started to engage in a work slowdown campaign during the time they were working,thus substantially delaying the production of the company. Respondent company filed with the NLRC a petition to declare illegal petitioner unions overtime boycott and work slowdown which according to respondent company amounted to illegal strike. ISSUE: Whether or not the overtime boycott is justified because they were not obliged to work beyond 8 hours. RULING: No,the boycott is not justified. In any event, the parties stipulated: Section 1. Regular Working Hours A normal workday shall consist of not more than eight (8) hours. The regular working hours for the Company shall be from 7:30 A.M. to 4:30 P.M. The schedule of shift work shall be maintained; however the company may change the prevailing work time at its discretion, should such change be necessary in the operations of the Company. All employees shall observe such rules as have been laid down by the company for the purpose of effecting control over working hours .17 It is evident from the foregoing provision that the working hours may be changed, at the discretion of the company, should such change be necessary for its operations, and that the employees shall observe such rules as have been laid down by the company . In the case before us, Labor Arbiter Caday found that respondent company had to adopt a continuous 24-hour work daily schedule by reason of the nature of its business and the demands of its clients. It was established that the employees adhered to the said work schedule since 1988. The employees are deemed to have waived the eight-hour schedule since they followed, without any question or complaint, the two-shift schedule while their CBA was still in force and even prior thereto. The two-shift schedule effectively changed the working hours stipulated in the CBA. As the employees assented by practice to this arrangement, they cannot now be heard to claim that the overtime boycott is justified because they were not obliged to work beyond eight hours. 26. RE: Request of muslim employees in the different courts in Iligan City FACTS: Several Muslim employees in the different courts in the said city request that they be allowed to enjoy the following privileges: 1) to hold office hours from 7:30am to 3:30pm without lunch break or coffee breaks during the month of Ramadan; 2) to be excused from work from 10:00am to 2:00pm every Friday (Muslim Prayer Day) during the entire calendar year. Judge Salazar forwarded a letter-request to the Office of Court Administrator(OCA). Judge Salazar expressed his conformity with the first request that is allowing them to hold office from 7:30am-3:30pm without any break during the month of Ramadan. However, he expressed some misgivings about the second request that is excusing them from work from 10:00am-2:00pm every Friday during the entire calendar year. Issue: Whether or not the muslim employees request to be excused from work from 10:00am to 2:00pm every Friday during the entire calendar year is allowed. HELD: No. To allow the Muslim employees in the Judiciary to be excused from work from 10:00 a.m. to 2:00 p.m. every Friday (Muslim Prayer Day) during the entire calendar year would mean a diminution of the prescribed government working hours. For then, they would be rendering service twelve (12) hours less than that required by the civil service rules for each month. Further, this would encourage other religious denominations to request for similar treatment. The performance of religious practices, whether by the Muslim employees or those belonging to other religious denominations, should not prejudice the courts and the public. Indeed, the exercise of religious freedom does not exempt anyone from compliance with reasonable requirements of the law, including civil service laws. In fine, the remedy of the Muslim employees, with respect to their request to be excused from work from 10:00 a.m. to 2:00 p.m. every Friday during the entire calendar year, is legislative, which is to ask Congress to enact a legislation expressly exempting them from compliance with the prescribed government working hours.

18

19
27. MANTRADE/FMMC DIVISION EMPLOYEES ANDWORKERS UNION V BACUNGAN 144 SCRA 510FERIA; September 30, 1986 NATURE Petition for Certiorari and Mandamus FACTS - Petitioner employees question the validity of the pertinent section of the Rules and Regulations Implementing the Labor Code as amended on which respondent arbitrator Froilan M.Bacungan based his decision ruling that Mantrade Devt Corp is not under legal obligation to pay holiday pay (as provided for in Article 94 of the Labor Code) to its monthly paid employees who are uniformly paid by the month, irrespective of the number of working days therein, with a salary of not less than thestatutory or established minimum wage, and that this rule is applicable not only as of March 2, 1976 but as of November 1,1974.- Respondent corporation contends, among others thatpetitioner is barred from pursuing the present action in view of (1) Article 263 of the Labor Code; (2) the pertinent provision of the CBA between petitioner and respondent corporation; and(3) Article 2044 of the Civil Code; that the special civil action of certiorari does not lie because respondent arbitrator is not an "officer exercising judicial functions" within the contemplation of Rule 65, Section 1, of the Rules of Court; that the instant petition raises an error of judgment on the part of respondent arbitrator and not an error of jurisdiction; that it prays for the annulment of certain rules and regulations issued by the DOLE ,not for the annulment of the voluntary arbitration proceedings; and that appeal by certiorari under Section 29 of the Arbitration Law, Republic Act No. 876, is not applicable to the case at bar because arbitration in labor disputes is expressly excluded by Section 3 of said law. ISSUES 1. WON decisions of arbitrators are subject to judicial review2. WON Mantrade employees are entitled to holiday pay3. WON mandamus lies in the case at bar HELD 1. YESOceanic Bic Division (FFW) vs. Romero (July 16, 1984): The decisions of voluntary arbitrators must be given the highestrespect and as a general rule must be accorded a certain measure of finality. It is not correct, however, that this respect precludes the exercise of judicial review over their decisions. Article 262 of the Labor Code making voluntary arbitrationawards final, inappealable and executory, except where themoney claims exc eed P100,000.00 or 40% of the paid-upcapital of the employer or where there is abuse of discretion orgross incompetence refers to appeals to the National Labor Relations Commission and not to judicial review. Judicial review still lies where want of jurisdiction, grave abuse of discretion,violation of due process, denial of substantial justice, orerroneous interpretation of the Law are brought to SCs attention. 2. YES - Under Art. 94 of the Labor Code, monthly salaried employees are not among those excluded from receiving holiday pay. Butthey appear to be excluded under Sec. 2, Rule IV, Book III of the Rules and Regulations implementing said provision.Insular Bank of Asia and America Employees' Union (IBAAEU)vs. Inciong (October 24, 1984): Section 2, Rule IV, Book III of the implementing rules and Policy Instruction No. 9, issued by the then Secretary of Labor are null and void since in the guise of clarifying the Labor Code's provisions on holiday pay, they in effect amended them by enlarging the scope of their exclusion.Chartered Bank Employees Association vs. Ople (August 28,1985): An administrative interpretation which diminishes thebenefits of labor more than what the statute delimits orwithholds is obviously ultra vires. 3. YES- While it is true that mandamus is not proper to enforce a contractual obligation, the remedy being an action for specific performance, in view of the above cited subsequent decisions of this Court clearly defining the legal duty to grant holiday pay tomonthly salaried employees, mandamus is an appropriateequitable remedy. Disposition Questioned decision of respondent arbitrator is SET ASIDE and respondent corporation is ordered to GRANT holiday pay to its monthly salaried employees. No costs. 28. Union of Filipro Employees (UFE) vs. Benigno Vivar (same with No. 15) Facts: 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. The petitioner insists that respondents sales personnel are not field personnel under Art.82 of the Labor Code. The respondent controverts this assertion.
19

20
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. ISSUE: Whether or not petitioners sales personnel are field personnel and entitled to holiday pay. HELD: The Court does not agree. 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. 29. San Miguel Corporation vs. CA Facts: On Oct.17,1992, the Department of Labor and Employment (DOLE) Iligan District Office, conducted a routine inspection in the premises of San Miguel Corporation (SMC) in Sta.Filomena,Iligan City. In the course of inspection it was discovered that there was underpayment by SMC of regular Muslim holiday pay to its employees. Still SMC failed to submit proof that it was paying regular Muslim holiday pay to its employees. Hence, Alan Macaraya Director IV of DOLE Iligan District issued a compliance order, directing SMC to consider Muslim holiday as a regular holidays and to pay both its Muslim and non-Muslim employees holiday pay. Petitioner contends that its non-Muslim employees are not entitled to Muslim holiday pay. Petitioner asserts that Art.3(3) of PD No.1083 provides that the provisions of this Code shall be applicable only to Muslim.xxx. However there should be no distinction between muslims and non-Muslims as regards payment of benefits for Muslim holidays. ISSUE: Whether or not non-Muslim employees are entitled to Muslim holiday pay. HELD: Yes non-Muslim employees are entitled to Muslim holiday pay.The Court ruled that the CA did not err in sustaining Undersecretary Espaol who stated: Assuming arguendo that the respondents position is correct, then by the same token, Muslims throughout the Philippines are also not entitled to holiday pays on Christian holidays declared by law as regular holidays. We must remind the respondent-appellant that wages and other emoluments granted by law to the working man are determined on the basis of the criteria laid down by laws and certainly not on the basis of the workers faith or religion. At any rate, Article 3(3) of Presidential Decree No. 1083 also declares that x x x nothing herein shall be construed to operate to the prejudice of a non-Muslim. 30. ZOSI 31 and 33. ASIAN TRANSMISSION CORP vs CA NATURE Petition for certiorari seeking the nullification of the March 28,2000 Decision of the Court of Appeals FACTS:

20

21
The Department of Labor and Employment (DOLE), throughUndersecretary Cresenciano B. Trajano, issued an ExplanatoryBulletin dated March 11, 1993, wherein it clarified,thatemployees are entitled to 200% of their basic wage on April 9,1993, which, apart from being Good Friday, and, therefore, alegal holiday, is also Araw ng Kagitingan, which is also a legalholiday, even if unworked. - Said bulletin was reproduced on January 23, 1998,when April 9, 1998 was both Maundy Thursday and Araw ng Kagitingan - Despite the explanatory bulletin, petitioner Asian Transmission Corporation opted to pay its daily paid employees only 100% of their basic pay on April 9, 1998.- Respondent Bisig ng Asian Transmission Labor Union (BATLU)protested.- In accordance with Step 6 of the grievance procedure of the Collective Bargaining Agreement (CBA) existing between petitioner and BATLU, the controversy was submitted for voluntary arbitration.- On July 31, 1998, the Office of the Voluntary Arbitrator rendered a decision directing petitioner to pay its covered employees "200% and not just 100% of their regular daily wages for the unworked April 9, 1998- Subject of interpretation in the case at bar is Article 94 of theLabor which was amended by Executive Order No. 2034- In deciding in favor of the Bisig ng Asian Transmission Labor Union (BATLU), the Voluntary Arbitrator held that Article 94 of the Labor Code provides for holiday pay for every regular holiday, the computation of which is determined by a legal formula which is not changed by the fact that there are two holidays falling on one day; and that that the law, as amended, enumerates ten regular holidays for every year, and should not be interpreted as authorizing a reduction to nine the number of paid regular holidays "just because April 9 (Araw ng Kagitingan)in certain years, like 1993 and 1998, is also Holy Friday or Maundy Thursday."- The Court of Appeals upheld the findings of the Voluntary Arbitrator, holding that the Collective Bargaining Agreement(CBA) between petitioner and BATLU, the law governing the relations between them, clearly recognizes their intent to consider Araw ng Kagitingan and Maundy Thursday, on whatever date they may fall in any calendar year, as paid legal holidays during the effectivity of the CBA and that "there is no condition, qualification or exception for any variance from the clear intent that all holidays shall be compensated.- The Court of Appeals further held that "in the absence of an explicit provision in law which provides for [a] reduction of holiday pay if two holidays happen to fall on the same day, Any doubt in the interpretation and implementation of the Labor Code provisions on holiday pay must be resolved in favor of labor." -Hence, this petition. ISSUE: WON daily-paid employees are entitled to be paid for two regular holidays which fall on the same day HELD: YES- Holiday pay is a legislated benefit enacted as part of the Constitutional imperative that the State shall afford protection to labor. Only an employee who works on the day immediately preceding or after a regular holiday shall be entitled to the holiday pay. A paid legal holiday occurring during the scheduled vacation leave will result in holiday payment in addition to normal vacation pay but will not entitle the employee to another vacation leave. Under similar circumstances, the COMPANY will give a days wage for November 1st and December 31st whenever declared a holiday. When required to work on said days, the employee will be paid according to Art. VI, Sec. 3B hereof.18WHEREFORE, the petition is hereby DISMISSED. 32. ZOSI 33. ASIAN TRANSMISSION CORP vs CA (See 31, same case) 34. Jose Rizal College vs. NLRC FACTS: The National Alliance of Teachers sued Jose Rizal College for alleged nonpayment of unworked holidays from 1975 to 1977. The members of the Alliance concerned are faculty members who are paid on the basis of student contract hour. ISSUE: Whether or not the school faculty are entitled to unworked holiday pay. HELD: As far as unworked regular holidays are concerned, the teachers are not entitled to holiday pay. Regular holidays specified as such by law are known to both school and faculty members as no class days; certainly the latter do not expect payment for said unworked days, and this was clearly in their minds when they entered into the teaching contracts. On the other hand, the teachers are entitled to be paid for unworked special holidays. Otherwise stated, the faculty member, although forced to take a rest, does not earn what he should earn on that day. Be it
21

22
noted that when a special public holiday is declared, the faculty member paid by the hour is deprived of expected income, and it does not matter that the school calendar is extended in view of the days or hours lost, for their income that could be earned from other sources is lost during the extended days. Similarly, when classes are called off or shortened on account of typhoons, floods, rallies, and the like, these faculty members must likewise be paid, whether or not extensions are ordered. 35. ACE NAVIGATION CO., INC. and/or CONNING SHIPPING LTD., petitioners, vs. COURT OF APPEALS FACTS: Ace Navigation Co., Inc. (Ace Nav) recruited private respondent Orlando Alonsagay to work as a bartender on board the vessel M/V "Orient Express" owned by its principal, Conning Shipping Ltd. (Conning). Under their POEA approved contract of employment, Orlando shall receive a monthly basic salary of four hundred fifty U.S. dollars (U.S. $450.00), flat rate, including overtime pay for 12 hours of work daily plus tips of two U.S. dollars (U.S. $2.00) per passenger per day. He, was also entitled to 2.5 days of vacation leave with pay each month. The contract was to last for one (1) year. Petitioners alleged that on June 13, 1994, Orlando was deployed and boarded M/V "Orient Express" at the seaport of Hong Kong. After the expiration of the contract on June 13, 1995, Orlando returned to the Philippines and demanded from Ace Nav his vacation leave pay. Ace Nav did not pay him immediately. It told him that he should have been paid prior to his disembarkation and repatriation to the Philippines. Moreover, Conning did not remit any amount for his vacation leave pay. Ace Nav, however, promised to verify the matter and asked Orlando to return after a few days. Orlando never returned. On November 25, 1995, Orlando filed a complaint before the labor arbiter for vacation leave pay of four hundred fifty U.S. dollars (U.S. $450.00) and unpaid tips amounting to thirty six, thousand U.S. dollars (U.S. $36,000.00).[4] On November 15, 1996, Labor Arbiter Felipe P. Pati ordered Ace Nav and Conning to pay jointly and severally Orlando his vacation leave pay of US$450.00. The claim for tips of Orlando was dismissed for lack of merit.[5] Orlando appealed to the National Labor Relations Commission (NLRC) on February 3, 1997. In a decision promulgated on November 26, 1997, the NLRC ordered Ace Nav and Conning to pay the unpaid tips of Orlando which amounted to US$36,000.00 in addition to his vacation leave pay. Ace Nav and Conning filed a motion for reconsideration on February 2, 1998 which was denied on May 20, 1999. On July 2, 1999, Ace Nav and Conning filed a petition for certiorari before the Court of Appeals to annul the decision of the NLRC. On July 28, 1999, the Court of Appeals promulgated a three-page resolution dismissing the petition. Their motion for reconsideration filed on September 8, 1999 was denied on October 8, 1999. Hence this appeal. ISSUE: WON petitioners are liable to pay the tips claimed by Orlando. HELD: In assailing the dismissal of their petition on technical grounds, petitioners argued that the Court of Appeals erred in rigidly and technically applying Section 13, Rule 13 and Section 1, Rule 65 of the 1997 Rules of Civil Procedure. They also contend that the respondent court erred in ruling that they are the ones liable to pay tips to Orlando. They point out that if tips will be considered as part of the salary of Orlando, it will make him the highest paid employee on M/V "Orient Express." The ship captain, the highest ranking officer, receives U.S.$3,000.00 per month without tips. Orlando, who is a bartender, will receive U.S. $3,450.00 per month. Allegedly, this will compel foreign ship owners to desist from hiring Filipino bartenders. It will create an unfavorable precedent detrimental to the future recruitment, hiring and deployment of Filipino overseas workers specially in service oriented businesses. It will also be a case of double compensation that will unjustly enrich Orlando at the expense of petitioners. They also stress that Orlando never complained that they should pay him the said tips. The word [tip] has several meanings, with origins more or less obscure, connected with "tap" and with "top." In the sense of a sum of money given for good service, other languages are more specific, e.g., Fr. pourboire, for drink. It is also absurd that petitioners intended to give Orlando a salary higher than that of the ship captain. As petitioners point out, the captain of M/V "Orient Princess" receives US$3,000.00 per month while Orlando will receive US$3,450.00 per month if the tip of US$2.00 per passenger per day will be given in addition to his US$450.00 monthly salary. It will be against common sense for an employer to give a lower ranked employee a higher compensation than an employee who holds the highest position in an enterprise. However, Orlando should be paid his vacation leave pay. Petitioners denied this liability by raising the defense that the usual practice is that vacation leave pay is given before repatriation. But as the labor arbiter correctly observed, petitioners did not present any evidence to prove that they already paid the amount. The burden of proving payment was not discharged by the petitioners.
22

23
IN VIEW WHEREOF, the resolutions of the Court of Appeals in CA G.R. SP No. 53508 are reversed and set aside. The decision of the labor arbiter ordering petitioners to pay jointly and severally the unpaid vacation leave pay of private respondent, Orlando Alonsagay, in the amount of US$450.00 and dismissing his other claim for lack of merit is reinstated. SO ORDERED. 36. Sugue vs Triumph international FACTS: -Sugue in May 1990 as Marketing Services Manager -Valderrama was hired in April 1993 as Direct Sales Manager -October 1999, Triumphs top management began to notice a sharp decline in the sales of the company. -Consequently, on June 1, 2000, Sugue and Valderrama filed a complaint with the NLRC against Triumph for payment of money claims arising from allegedly unpaid vacation and sick leave credits, birthday leave and 14th month pay for the period 1999-2000 (the period of the said decline in sales). -On June 19, 2000, Sugue and Valderrama personally attended the preliminary conference of the said case -That same day, both were asked to explain their whereabouts on June 19, 2000 from 9:06 a.m. to 11:15 a.m. -This was charged by Triumph as halfday to their vacation leave credit. -Petitioners with this regard and for other allegedly unreasonable discriminatory acts committed by Triumph wrote the company a letter stating that they considered themselves constructively dismissed. -They filed for constructive dismissal. -LA ruled in favour of petitioners. -NLRC reversed the ruling. -CA partly granted petition, deleting atty fees and reducing moral damages. ISSUE: Whether Triumph rightfully charged the absence due to Pre-Conf to their VL RULING: With respect to the alleged discriminatory act, Triumph is justified in charging Sugue and Valderramas half-day absence to their vacation leave credits. It is fair and reasonable for Triumph to do so considering that Sugue and Valderrama did not perform work for one-half day on June 19, 2000. The age-old rule governing the relation between labor and capital or management and employee is that a fair days wage for a fair days labor. 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, dismissed or suspended. It is hardly fair or just for an employee or laborer to fight or litigate against his employer on the employers time. In a case where a laborer absents himself from work because of a strike or to attend a conference or hearing in a case or incident between him and his employer, he might seek reimbursement of his wages from his union which had declared the strike or filed the case in the industrial court. Or, in the present case, he might have his absence from his work charged against his vacation leave 37. Aklan Electric Cooperative Incorporated (AKELCO) v. NLRC FACTS: On January 22, the Board of AKELCO allowed the temporary transfer holding of office at Kalibo, Aklan. Nevertheless, majority of the employees continued to work at Lezo Aklan and were paid of their salaries. An unnumbered resolution was passed by AKELCO withdrawing the temporary designation of office at kalibo, Aklan and that daily operation be held again at the main office of Lezo, Aklan. From June 1992 to March 1993, complainants who reported at Lezo were not paid their salaries. From March up to the present, complainants were allowed to draw their salaries, with the exception of a few who were not paid their salaries for April and May 1993. The respondents allege that the complainants voluntarily abandoned their work assignments and that they defied the lawful orders by the General manager and thus the Board of Directors passed a resolution resisting and denying the claims of these complainants under the principle of no work, no pay. NLRC held that private respondents are entitled to unpaid wages from June 1992 up to march 1993. ISSUE: Whether or not private respondents are covered by the no work, no pay principle and thus not entitled to the claim for unpaid wages from June 1992 to March 1993. HELD: Yes. Petitioner was able to show that the private respondents did not render services during the stated period. Also, private respondents in their position paper admitted that they did not report at the Kalibo office, as Lezo remained to be their office where they continuously reported. Their excuse that the transfer to Kalibo was illegal; however it was not for private respondents to declare the managements act of transferring the AKELCO office to Kalibo as an illegal act as there was no allegation of proof that such was made in bad faith or with malice. The unnumbered resolution returning the office from Kalibo to Lezo was not a valid act of petitioners legitimate board and was never implemented. Private respondents were dismissed by petitioner effective January 1992 and were accepted back, subject to the condition of no work, no pay effective March 1993 which is they were allowed to draw their salaries again. Since the
23

24
burden of evidence lies with the party who asserts the affirmative allegation, the plaintiff or complainant has to prove his allegations in the complaint. 38. SLL International Cables Specialist vs NLRC FACTS: Sometime in 1996, and January 1997, private respondents Roldan Lopez and Danilo Caete and Edgardo Zuiga respectively, were hired by petitioner Lagon as apprentice or trainee cable/lineman. The three were paid the full minimum wage and other benefits but since they were only trainees, they did not report for work regularly but came in as substitutes to the regular workers or if there is a need for additional workers. After their training, Zuiga, Caete and Lopez were engaged as project employees by the petitioners in their Islacom project in Bohol. Private respondents started on March 15, 1997 until December 1997. Upon the completion of their project, their employment was also terminated. Private respondents received the amount of P145.00, the minimum prescribed daily wage for Region VII. In July 1997, the amount of P145 was increased to P150.00 by the Regional Wage Board (RWB) and in October of the same year, the latter was increased to P155.00. Sometime in March 1998, Zuiga and Caete were engaged again by Lagon as project employees for its PLDT Antipolo, Rizal project, which ended sometime in (sic) the late September 1998. As a consequence, Zuiga and Caetes employment was terminated. For this project, Zuiga and Caete received only the wage of P145.00 daily. The minimum prescribed wage for Rizal at that time was P160.00. November 1998, private respondents re-applied in the Racitelcom project of Lagon in Bulacan. Zuiga and Caete were re-employed. For this, private respondents received the wage of P145.00. Again, after the completion of project in March 1999, respondents went home to Cebu City. On May 21, 1999, private respondents for the 4th time worked with Lagons project in Camarin, Caloocan City with Furukawa Corporation as the general contractor. Their contract would expire on February 28, 2000, the period of completion of the project. From May 21, 1997-December 1999, private respondents received the wage ofP145.00. At this time, the minimum prescribed rate for Manila was P198.00. In January to February 28, the three received the wage of P165.00. The existing rate at that time was P213.00. For reasons of delay on the delivery of imported materials from Furukawa Corporation, the Camarin project was not completed on the scheduled date of completion. Face[d] with economic problem[s], Lagon was constrained to cut down the overtime work of its worker[s][,] including private respondents. Thus, when requested by private respondents on February 28, 2000 to work overtime, Lagon refused and told private respondents that if they insist, they would have to go home at their own expense and that they would not be given anymore time nor allowed to stay in the quarters. This prompted private respondents to leave their work and went home to Cebu. On March 3, 2000, private respondents filed a complaint for illegal dismissal, non-payment of wages, holiday pay, 13th month pay for 1997 and 1998 and service incentive leave pay as well as damages and attorneys fees. In their answers, petitioners admit employment of private respondents but claimed that the latter were only project employees[,] for their services were merely engaged for a specific project or undertaking and the same were covered by contracts duly signed by private respondents. Petitioners further alleged that the food allowance ofP63.00 per day as well as private respondents allowance for lodging house, transportation, electricity, water and snacks allowance should be added to their basic pay. With these, petitioners claimed that private respondents received higher wage rate than that prescribed in Rizal and Manila. Lastly, petitioners alleged that since the workplaces of private respondents were all in Manila, the complaint should be filed there. Thus, petitioners prayed for the dismissal of the complaint for lack of jurisdiction and utter lack of merit. (Citations omitted.) On January 18, 2001, Labor Arbiter Reynoso Belarmino (LA) rendered his decision5 declaring that his office had jurisdiction to hear and decide the complaint filed by private respondents. Referring to Rule IV, Sec. 1 (a) of the NLRC Rules of Procedure prevailing at that time,6 the LA ruled that it had jurisdiction because the "workplace," as defined in the said rule, included the place where the employee was supposed to report back after a temporary detail, assignment or travel, which in this case was Cebu. As to the status of their employment, the LA opined that private respondents were regular employees because they were repeatedly hired by petitioners and they performed activities which were usual, necessary and desirable in the business or trade of the employer. With regard to the underpayment of wages, the LA found that private respondents were underpaid. It ruled that the free board and lodging, electricity, water, and food enjoyed by them could not be included in the computation of their wages because these were given without their written consent. The LA, however, found that petitioners were not liable for illegal dismissal. The LA viewed private respondents act of going home as an act of indifference when petitioners decided to prohibit overtime work.7
24

25
In its March 31, 2004 Decision, the NLRC affirmed the findings of the LA. In addition, the NLRC noted that not a single report of project completion was filed with the nearest Public Employment Office as required by the Department of Labor and Employment (DOLE) Department Order No. 19, Series of 1993. 8 The NLRC later denied9 the motion for reconsideration10 subsequently filed by petitioners. CA on a petition for certiorari, it affirmed the findings that the private respondents were regular employees. It considered the fact that they performed functions which were the regular and usual business of petitioners. The CA likewise found that the private respondents were underpaid. It ruled that the board and lodging, electricity, water, and food enjoyed by the private respondents could not be included in the computation of their wages because these were given without their written consent. The CA added that the private respondents were entitled to 13th month pay. The CA also agreed with the NLRC that there was no illegal dismissal. The CA opined that it was the petitioners prerogative to grant or deny any request for overtime work and that the private respondents act of leaving the workplace after their request was denied was an act of abandonment. In this petition for review on certiorari,12 petitioners seek the reversal and setting aside of the CA decision anchored on this lone: Petitioners reiterated their position that the value of the facilities that the private respondents enjoyed should be included in the computation of the "wages" received by them. On November 29, 2006, the Court resolved to issue a Temporary Restraining Order (TRO) enjoining the public respondent from enforcing the NLRC and CA decisions until further orders from the Court. After a thorough review of the records, however, the Court finds no merit in the petition. ISSUE: Whether or not there is evidence on record to support the findings of the LA, the NLRC and the CA that private respondents were project or regular employees and that their salary differentials had been paid. HELD: As a general rule, on payment of wages, a party who alleges payment as a defense has the burden of proving it.17Specifically with respect to labor cases, the burden of proving payment of monetary claims rests on the employer, the rationale being that the pertinent personnel files, payrolls, records, remittances and other similar documents which will show that overtime, differentials, service incentive leave and other claims of workers have been paid are not in the possession of the worker but in the custody and absolute control of the employer.18 In this case, petitioners, aside from bare allegations that private respondents received wages higher than the prescribed minimum, failed to present any evidence, such as payroll or payslips, to support their defense of payment. Thus, petitioners utterly failed to discharge the onus probandi. Private respondents, on the other hand, are entitled to be paid the minimum wage, whether they are regular or non-regular employees. On whether the value of the facilities should be included in the computation of the "wages" received by private respondents, Section 1 of DOLE Memorandum Circular No. 2 provides that an employer may provide subsidized meals and snacks to his employees provided that the subsidy shall not be less that 30% of the fair and reasonable value of such facilities. In such cases, the employer may deduct from the wages of the employees not more than 70% of the value of the meals and snacks enjoyed by the latter, provided that such deduction is with the written authorization of the employees concerned. Moreover, before the value of facilities can be deducted from the employees wages, the following requisites must all be attendant: first, proof must be shown that such facilities are customarily furnished by the trade; second, the provision of deductible facilities must be voluntarily accepted in writing by the employee; and finally, facilities must be charged at reasonable value.20 Mere availment is not sufficient to allow deductions from employees wages.21 These requirements, however, have not been met in this case. SLL failed to present any company policy or guideline showing that provisions for meals and lodging were part of the employees salaries. It also failed to provide proof of the employees written authorization, much less show how they arrived at their valuations. The Court sustains the deletion of the award of differentials with respect to respondent Roldan Lopez. As correctly pointed out by the CA, he did not work for the project in Antipolo. WHEREFORE, the petition is DENIED. The temporary restraining order issued by the Court on November 29, 2006 is deemed, as it is hereby ordered, DISSOLVED.SO ORDERED. 39. ZOSI 40. ZOSI 41. MILLARES VS. NATIONAL LABOR RELATIONS COMMISSION, 305 SCRA 500 (1999) (LABOR STANDARDS WAGES, CUSTOMARY FACILITIES)

25

26
FACTS: Article 97, par. (f), of the Labor Code defined wage as the remuneration or earnings, however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece, or commission basis, or other method of calculating the same, which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done, or for services rendered or to be rendered and includes the fair and reasonable value, as determined by the Secretary of Labor, of board, lodging, or other facilities customarily furnished by the employer to the employee. 116 employees of Paper Industries Corporation of the Philippines (PICOP) in Bislig, Surigao del Sur were terminated under a retrenchment program as a solution to a major financial setback. Aside from their one month basic pay, petitioners believe that the allowances they allegedly regularly received on a monthly basis should have also been included in the computation of their separation. PICOP grants the following allowances: 1. Staff allowance/managers allowance to those who live in rented houses near the mill site which ceases whenever a vacancy occurs in the companys free housing facilities. 2. Transportation allowance in the form of advances for actual transportation expenses subject to liquidation is given to key officers and managers who use their own vehicles in the performance of their duties. This privilege is discontinued when the conditions no longer obtain. 3. Bislig allowance is given to managers and officers on account of the hostile environment prevailing therein. Once the recipient is transferred elsewhere, the allowance ceases. Applying Art. 97, par (f) of the Labor Code which defines wage, the Executive Labor Arbiter opined that the subject allowances, being customarily furnished by respondent PICOP and regularly received by petitioners, formed part of the latters wage. However, the NLRC decreed that the allowances did not form part of the salary base used in computing separation pay since the same were contingency-based. ISSUE: Whether or not the allowances in question are considered facilities customarily furnished? HELD: No. Customary is founded on long established and constant practice connoting regularity. The receipt of allowance on a monthly basis does not ipso facto characterize it as regular and forming part of salary because the nature of the grant is a factor worth considering. The subject allowances were temporarily, not regularly received by petitioners because once the conditions for the availment ceased to exist, the allowance reached the cutoff point. The petitioners continuous enjoyment of the disputed allowances was based on contingencies the occurrence of which wrote finis to such enjoyment. 42. SONGCO VS. NLRC [G.R. NO. L-50999 MARCH 23, 1990] FACTS: Zuellig (M) Inc. filed with the Department of Labor (Regional Office No. 4) a clearance to terminate the services of petitioners Jose Songco, Romeo Cipres and Amancio Manuel due to alleged financial losses. However, the petitioners argued that the company is not suffering any losses and the real reason for their termination was their membership in the union. Later, petitioners manifested that they no longer contesting their dismissal, however, they argued that they should be granted a separation pay. Each of the petitioners was receiving a monthly salary of P40, 000.00 plus commissions for every sale they made. Under the CBA entered by the Zuellig Inc. and the petitioners, in Article XIV, Section 1(a), Any employee, who is separated from employment due to old age, sickness, death or permanent lay-off not due to the fault of said employee shall receive from the company a retirement gratuity in an amount equivalent to one months salary per year of service. One month of salary as used in this paragraph shall be deemed equivalent to the salary at date of retirement; years of service shall be deemed equivalent to total service credits, a fraction of at least six months being considered one year, including probationary employment. Other basis for petitioners contention are Article 284 of the Labor Code with regard to reduction of personnel and Sections 9(b) and 10 of Rule 1, Book VI of the Rules Implementing the Labor Code. The Labor Arbiter rendered his decision directing the company to pay the complainants separation pay equivalent to their one month salary (exclusive of commissions, allowances, etc.) for every year of service that they have worked with the company. The petitioners appealed to the NLRC but it was denied. Petitioner Romeo Cipres filed a Notice of Voluntary Abandonment and Withdrawal of petition contending that he had received, to his full and complete satisfaction, his separation pay. Hence, this petition. ISSUE: Whether or not earned sales commissions and allowances should be included in the monthly salary of petitioners for the purpose of computation of their separation pay?
26

27

HELD: It has been settled in the case of Santos vs. NLRC that the computation of backwages and separation pay, account must be taken not only of the basic salary of petitioner but also of her transportation and emergency living allowances. In the issue of whether commission should be included in the computation of their separation pay. Commission is define as the recompensed, compensation or reward of an agent, salesman, executor, trustees, receiver, factor, broker or bailee, when the same is calculated as a percentage on the amount of his transactions or on the profit to the principal (Blacks Law Dictionary).The nature of the work of a salesman and the reason for such type of remuneration for services rendered demonstrate clearly that the commission are part of petitioners wage and salary. Some salesmen do not receive any basic salary but depend on commission and allowances or commissions alone, are part of petitioners wage and salary. Some salesman do not received any basic salary but depend on commission and allowances or commissions alone, although an employer-employee relationship exist. In Soriano v. NLRC, it is ruled then that, the commissions also claimed by petitioner (override commission plus net deposit incentive) are not properly includible in such base figure since such commissions must be earned by actual market transactions attributable to petitioner. Applying this by analogy, since the commissions in the present case were earned by actual market transactions attributable to petitioners, these should be included in their separation pay. In the computation thereof, what should be taken into account is the average commissions earned during their last year of employment. 43. PNB V PNB EMPLOYEES ASSOCIATION115 SCRA 507| July 30, 1982 FACTS: PNB and PNB Employees Association (PEMA) had a dispute regarding the proper computation of overtime pay. PEMA wanted the cost of living allowance (granted in 1958) and longevity pay (granted in 1961) to be included in the computation. PNB disagreed and the 2 parties later went before the CIR to resolve the dispute. CIR decided in favor of PEMA and held that PNB should compute the overtime pay of its employees on the basis of the sum total of the employees basic salary or wage plus cost of living allowance and longevity pay. The CIR relied on the ruling in NAWASA v NAWASA Consolidated Unions, which held that for purposes of computing overtime compensation, regular wage includes all payments which the parties have agreed shall be received during the work week, including differentiated payments for working at undesirable times, such as at night and the board and lodging customarily furnished the employee. This prompted PNB to appeal, hence this case. ISSUE: Whether or not the cost of living allowance and longevity pay should be included in the computation of overtime pay as held by the CIR? HELD: No. Overtime Pay as defined by C.A. 444, now Art. 87 Labor Code, is the additional pay for service or work rendered or performed in excess of 8 hours a day by employees or laborers in employment covered by the 8 hour Labor Law and not exempt from its requirements. It is computed by multiplying the overtime hourly rate by the number of hours worked in excess of eight. Overtime pay is for extra effort beyond that contemplated in the employment contract. Additional pay given for any other purpose cannot be included in the basis for the computation of overtime pay. Absent a specific provision in the CBA, the bases for the computation of overtime pay are two (2) computations, namely: 1. Whether or not the additional pay is for extra work done or service rendered; and 2. Whether or not the same is intended to be permanent and regular, not contingent nor temporary as a given only to remedy a situation which can change any time. Longevity pay cannot be included in the computation of overtime pay for the very simple reason that the contrary is expressly stipulated in the CBA, which constitutes the law between the parties. As regards cost of living allowance, there is nothing in Commonwealth Act 444 [or the 8-hour Labor Law, now Art. 87 Labor Code] that could justify PEMAs posture that it should be added to the regular wage in computing overtime pay. CA 444 prescribes that overtime work shall be paid at the same rate as their regular wages or salary, plus at least 25% additional. The law did not define what is a regular wage or salary. What the law emphasized is that in addition to regular wage, there must be paid an additional 25% of that regular wage to constitute overtime rate of pay. Parties were thus allowed to agree on what shall be mutually considered regular pay from or upon which a 25% premium shall be based and added to makeup overtime compensation. No rule of universal application to other cases may be justifiably extracted from the NAWASA case. CIR relies on the part of the NAWASA decision where the SC cited American decisions whose legislation on overtime is at variance with the law in this jurisdiction. The US legislation considers work in
27

28
excess of forty hours a week as overtime; whereas, what is generally considered overtime in the Philippines is work in excess of the regular 8 hours a day. It is understandably material to refer to precedents in the US for purposes of computing weekly wages under a 40-hour week rule, since the particular issue involved in NAWASA is the conversion of prior weekly regular earnings into daily rates without allowing diminution or addition. To apply the NAWASA computation would require a different formula for each and every employee. It would require reference to and continued use of individual earnings in the past, thus multiplying the administrative difficulties of the Company. It would be cumbersome and tedious a process to compute overtime pay and this may again cause delays in payments, which in turn could lead to serious disputes. To apply this mode of computation would retard and stifle the growth of unions themselves as Companies would be irresistibly drawn into denying, new and additional fringe benefits, if not those already existing, for fear of bloating their overhead expenses through overtime which, by reason of being unfixed, becomes instead a veritable source of irritant in labor relations. As to the question why is a laborer or employee who works beyond the regular hours of work entitled to extra compensation called, in this enlightened time, overtime pay, the answer is that: there can be no other reason than that he is made to work longer than what is commensurate with his agreed compensation for the statutorily fixed or voluntarily agreed hours of labor he is supposed to do. When he thus spends additional time to his work, the effect upon him is multi- faceted; he puts in more effort, physical and/or mental; he is delayed in going home to his family to enjoy the comforts thereof; he might have no time for relaxation, amusement or sports; he might miss important pre-arranged engagements; etc. It is thus the additional work, labor or service employed and the adverse effects just mentioned of his longer stay in his place of work that justify and are the real reasons for the extra compensation that is called overtime pay. 44. PHILIPPINE AGRICULTURAL COMMERCIAL AND INDUSTRIAL WORKERS UNION (PACIWU)TUCP, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION AND VALLACAR TRANSIT, INC., respondents. G.R. No. 107994 August 14, 1995 FACTS: Philippine Agricultural Commercial and Agricultural Workers Union TUCP is the exclusive bargaining agent of the rank and file employees of Vallacar Transit, Inc. The union instituted a complaint with NLRC for payment of 13th month pay in behalf of the drivers and conductors of respondent company's Visayan operation on the ground that although said drivers and conductors are compensated on a "purely commission" basis as described in their Collective Bargaining Agreement (CBA), they are automatically entitled to the basic minimum pay mandated by law should said commission be less than their basic minimum for eight (8) hours work. Labor Arbiter and NLRC dismissed the petition. Hence, this motion for reconsideration. ISSUE: Whether or not the bus drivers and conductors are entitled to 13th month pay HELD: Yes. P.D. 851, otherwise known as the "13th Month Pay" Law prescribed payment of 13th month pay. 13th month pay means one-twelfth (1/12) of the basic salary of an employee within a calendar year and that basic salary shall include all remunerations or earnings paid by an employer to an employer for services rendered. In Memorandum Order No. 28 issued by President Corazon C. Aquino, it provides that all employers are required to pay all their rank-and-file employees a 13th month pay not later than December 24 of every year. Later, Minister of Labor and Employment issued MOLE Explanatory Bulletin which provides that employees who are paid a fixed or guaranteed wage plus commission are also entitled to the mandated 13th month pay, based on their total earning(s) during the calendar year. Commission is the recompense, compensation, reward of an employee, agent, salesman, executor, trustee, receiver, factor, broker or bailee, when the same is calculated as a percentage on the amount of his transactions or on the profit of the principal. Hence, every employee receiving a commission in addition to a fixed or guaranteed wage or salary, is entitled to a 13th month pay. For purposes of entitling rank and file employees a 13th month pay, it is immaterial whether the employees concerned are paid a guaranteed wage plus commission or a commission with guaranteed wage inasmuch as the bottom line is that they receive a guaranteed wage. While the bus drivers and conductors are considered as being compensated on a commission basis, they are not paid purely by what they receive as commission. Thus, the 13th month pay of the bus drivers and conductors who are paid a fixed or guaranteed minimum wage in case their commissions be less than the statutory minimum, and commissions only in case where
28

29
the same is over and above the statutory minimum, must be equivalent to one-twelfth (1/12) of their total earnings during the calendar year. 45. NASIPIT LUMBER COMPANY, INC., and PHILIPPINE WALLBOARD CORPORATION, petitioners, vs. NATIONAL WAGES AND PRODUCTIVITY COMMISSION, WESTERN AGUSAN WORKERS UNION (WAWU-ULGWP LOCAL 101), TUNGAO LUMBER WORKERS UNION (TULWU-ULGWP LOCAL 102) and UNITED WORKERS UNION (UWU-ULGWP LOCAL 103), respondents. G.R. No. 113097 April 27, 1998 The Labor Code, as amended by RA 6727 (the Wage Rationalization Act), grants the National Wages and Productivity Commission (NWPC) the power to prescribe rules and guidelines for the determination of appropriate wages in the country. Hence, "guidelines" issued by the Regional Tripartite Wages and Productivity Boards (RTWPB) without the approval of or, worse, contrary to those promulgated by the NWPC are ineffectual, void and cannot be the source of rights and privileges. FACTS: The Region X [Tripartite Wages and Productivity] Board issued Wage Order No. RX-01 which provides the increase in minimum wage rates applicable to workers and employees in the private sector in Northern Mindanao (Region X) (P13.00/day for Agusan del Norte, Bukidnon, Misamis Oriental, and the Cities of Butuan, Gingoog, and Cagayan de Oro; P11.00/day for Agusan del Sur, Surigao del Norte and Misamis Occidental, and the Cities of Surigao Oroquieta, Ozamis and Tangub; and P9.00/dayfor Camiguin) Nasipit Lumber Company, Inc. (NALCO), Philippine Wallboard Corporation (PWC), and Anakan Lumber Company (ALCO), claiming to be separate and distinct from each other but for expediency and practical purposes, jointly filed an application for exemption from the Wage Orders as distressed establishments an based the exemption on Guidelines No. 3 issued by the herein Board but did not pass the approval of the Commission. ISSUE: Whether or not the guideline issued by an RTWPB without the approval of or, worse, contrary to the guidelines promulgated by the NWPC valid? HELD: Not valid. Article 121 of the Labor Code lists the powers and functions of the NWPC. Which includes that the Commission has the power to (c) To prescribe rules and guidelines for the determination of appropriate minimum wage and productivity measures at the regional, provincial or industry levels ; (d) To review regional wage levels set by the Regional Tripartite Wages and Productivity Boards to determine if these are in accordance with prescribed guidelines and national development plans ; among others. Article 122 of the Labor Code, on the other hand, prescribes the powers of the RTWPB, one of which is (b) To determine and fix minimum wage rates applicable in their region, provinces or industries therein and to issue the corresponding wage orders, subject to guidelines issued by the Commission. The foregoing clearly grants the NWPC, not the RTWPB, the power to "prescribe the rules and guidelines" for the determination of minimum wage and productivity measures. While the RTWPB has the power to issue wage orders under Article 122 (b) of the Labor Code, such orders are subject to the guidelines prescribed by the NWPC. Significantly, the NWPC authorized the RTWPB to issue exemptions from wage orders, but subject to its review and approval. Since the NWPC never assented to Guideline No. 3 of the RTWPB, the said guideline is inoperative and cannot be used by the latter in deciding or acting on petitioners' application for exemption. To allow RTWPB Guideline No. 3 to take effect without the approval of the NWPC is to arrogate unto RTWPB a power vested in the NWPC by Article 121 of the Labor Code, as amended by RA 6727. If a discrepancy occurs "between the basic law and an implementing rule or regulation, it is the former that prevails." This is so because the law cannot be broadened by a mere administrative issuance. It is axiomatic that "[a]n administrative agency cannot amend an act of Congress." Article 122 (e) of the Labor Code cannot be construed to enable the RTWPB to decide applications for exemption on the basis of its own guidelines which were not reviewed an approved by the NWPC, for the simple reason that a statutory grant of "powers should not be extended by implication beyond what may be necessary for their just and reasonable execution. Official powers cannot be merely assumed by administrative officers, nor can they be created by the courts in the exercise of their judicial functions ." 46. Employees Confederation of the Philippines (ECOP) vs. NWPC201 SCRA 759 (1991)

29

30
Facts: Petitioners ECOP questioned the validity of the wage order issued by the RTWPB dated October 23, 1990 pursuant to the authority granted by RA 6727. The wage order increased the minimum wage by P17.00 daily in the National Capital Region. The wage order is applied to all workers and employees in the private sector of an increase of P 17.00 including those who are paid above the statutory wage rate. ECOP appealed with the NWPC but dismissed the petition. The Solicitor General in its comment posits that the Board upon the issuance of the wage order fixed minimum wages according to the salary method. Petitioners insist that the power of RTWPB was delegated, through RA 6727, to grant minimum wage adjustments and in the absence of authority, it can only adjust floor wages. Issue: Whether or not the wage order issues by RTWPB dated October 23, 1990 is valid. Ruling: The Court agrees with the Solicitor General. It noted that there are two ways in the determination of wage, these are floor wage method and salary ceiling method. The floor wage method involves the fixing of determinate amount that would be added to the prevailing statutory minimum wage while the salary ceiling method involves where the wage adjustment is applied to employees receiving a certain denominated salary ceiling. RA 6727 gave statutory standards for fixing the minimum wage. ART. 124. Standards/Criteria for Minimum Wage Fixing The regional minimum wages to be established by the Regional Board shall be as nearly adequate as is economically feasible to maintain the minimum standards of living necessary for the health, efficiency and general well-being of the employees within the framework of the national economic and social development program. In the determination of such regional minimum wages, the Regional Board shall, among other relevant factors, consider the following: (a) The demand for living wages; (b) Wage adjustment vis-a-vis the consumer price index; (c) The cost of living and changes or increases therein; (d) The needs of workers and their families; (e) The need to induce industries to invest in the countryside; (f) Improvements in standards of living; (g) The prevailing wage levels; (h) Fair return of the capital invested and capacity to pay of employers; (i) Effects of employment generation and family income; and (j) The equitable distribution of income and wealth along the imperatives of economic and social development." The wage order was not acted in excess of boards authority. The law gave reasonable limitations to the delegated power of the board 47. APEX MINING COMPANY, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and SANDIGAN NG MANGGAGAWANG PILIPINO, represented by RANULFO PEDRERA, President, respondents. G.R. No. 86200 February 25, 1992 FACTS: Sandigan ng Manggagawang Pilipino ("Sandigan") filed before the Labor Arbiter a claim for Emergency Cost of Living Allowance ("ECOLA") differential against petitioner Apex Mining Company, Inc. ("Apex") alleging that Apex had paid its employees an aggregate cumulative daily ECOLA of only P15.00 which was P2.00 below the cumulative minimum ECOLA of P17.00 (for non-agricultural workers) established under Wage Order No. 6; and that petitioner had belatedly granted the additional P2.00. Apex denied having failed to comply with Wage Order No. 6, contending that it had, by previous agreement, incorporated the alleged P2.00 deficiency into the basic salary of its employees. In turn, Sandigan denies that such an agreement had been made, but conceded that a P2.00 increase in basic salary had been made by Apex, in compliance with a provision of the Collective Bargaining Agreement ("CBA") then in force between Apex and Sandigan, and not in fulfillment of Apex's obligation under Wage Order No. 6. Sandigan pointed out that Wage Order No. 6 had taken effect on 1 November 1984, several months after the P2.00 had been integrated by Apex into the basic salary of its employees.

30

31
ISSUE: Whether or not the P2.00 per day increase in basic salary granted by Apex pursuant to the CBA, was lawfully credited towards compliance with increases in ECOLA required under Wage Orders Nos. 5 and 6? HELD: Yes. The P2.00 increase integrated in the basic salary of Apex's, employees was concededly given under the provisions of the CBA. Both Wage Order No. 5 and Wage Order No. 6 expressly allowed the crediting of increases in wages or allowances granted under CBAs towards compliance with increases in ECOLA requirements prescribed by those Wage Orders. Section 7 o f Wage Order No. 5 provided as follows: All increases in wages and/or allowances granted by employers between February 1, 1984 and the effectivity of this order [16 June 1984] shall be credited as compliance with the minimum wage and allowance adjustments prescribed herein . . . Section 4 of Wage Order No. 6 had very similar language: All increases in wages and/or allowances granted by employers between June 17, 1984 and the effectivity of this order [November 1, 1984] shall be credited as compliance with the minimum wage and allowance adjustments prescribed herein It is important to note that the creditability provisions in Wage Orders Nos. 5 and 6 are grounded in an important public policy. That public policy may be seen to be the encouragement of employers to grant wage and allowance increases to their employees higher than the minimum rates of increases prescribed by statute or administrative regulation. Further, every grant of daily increase in statutory minimum wage rates and living allowance must be considered as independent, separate or apart from the wage increases in the collective bargaining agreement and must be integrated into the salary scale of the employees to the end that the desired rates decreed by the National Wages Council are attained. Thus, Apex having lawfully credited the P2.00 increase in basic salary towards compliance of the increase in ECOLA prescribed by Wage Orders Nos. 5 and 6, it follows that respondent Sandigan's claim to a differential in ECOLA lacks basis in fact and in law. 48. PHILIPPINE TELEGRAPH AND TELEPHONE CORPORATION, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and PT&T EMPLOYEE'S UNION-ALU, respondents. G.R. No. 99858 June 19, 1995 FACTS: Herein private respondent PT&T Union-ALU initiated this case via a complaint, filed on 25 November 1986, charging petitioner Philippine Telegraph and Telephone Corporation ("PT&T") with unfair labor practice acts and underpayment of statutory and contractual benefits claimed to be due pursuant to Wage Orders No. 3, 4, 5 and 6, and also under Sections 2 and 3, Article IX, of the 1984 Collective Bargaining Agreement ("CBA") and Section 2, Article XII, of the 1986 CBA. Petitioner denied the charges. ISSUE; Whether or not the PT&T be obligated to pay both the CBA and statutory, wage increases? HELD: No. Union members should be paid their salary differentials in accordance with Wage Orders No. 3 to 6; and Sections 2 and 3, Article IX of the 1984 CBA and Section 2, of Article XII of the 1986 CBA. The common provisions of Wage Orders No. 3, 5, and 6, state that: All increases in wages and/or allowances granted or paid by employers . . . shall be credited as compliance with the minimum wage and allowance adjustments prescribed herein, provided that where the increases are less than the applicable amount provided in this Order, the employer shall pay the difference. Such increases shall not include anniversary wage increases provided in collective bargaining agreements unless the agreements expressly provide otherwise Petitioner company and private respondent union, in the 1984 and 1986 CBAs, in turn, have stipulated that: The parties agree that in the event of additional wage increases, bonuses or allowances which may during the life of this agreement being made mandatory as a matter of law, such that the minimum wage including bonuses and allowances shall be greater than the wage provided therein, then such wages shall ipso factobecome the total remunerations under such agreement in lieu of all other remunerations and increases herein provided. The foregoing CBA provisions reveal quite sufficiently the parties' intention to consider salary increases provided in the CBA to be creditable to wage increases that are or may be mandated within the applicable period by law. Such agreements merely create an equivalence between legal and contractual imperatives, rendering both obligations susceptible performance by compliance with either, subject only to the

31

32
condition that where the increases given under agreement fall short in amount of those fixed by law, the difference must be made up by the employer 49. PRUBANKERS ASSOCIATION VS. PRUDENTIAL BANK AND TRUST COMPANY302 SCRA 74 (1999) Facts: On November, the RTWPB Region V issued Wage Order No. RB 05-03 which provided for a Cost of Living Allowance (COLA) to workers in the private sector who had rendered service for at least three (3) months before its effectivity, and for the same period thereafter, in the following categories: P17.50 in the cities of Naga and Legaspi; P15.50 in the municipalities of Tabaco, Daraga, Pili and the city of Iriga; and P10.00 for all other areas in the Bicol Region. On November 1993, RTWPB Region VII issued Wage Order No. RB VII-03, which directed the integration of the COLA mandated pursuant to Wage Order No. RO VII-02-A into the basic pay of all workers. It also established an increase in the minimum wage rates for all workers and employees in the private sector as follows: by Ten Pesos (P10.00) in the cities of Cebu, Mandaue and Lapulapu; Five Pesos (P5.00) in the municipalities of Compostela, Liloan, Consolacion, Cordova, Talisay, Minglanilla, Naga and the cities of Davao, Toledo, Dumaguete, Bais, Canlaon, and Tagbilaran. The bank granted a COLA of P17.50 to its employees at its Naga Branch, the only branch covered by Wage Order No. RB 5-03, and integrated the P150.00 per month COLA into the basic pay of its rank-and-file employees at its Cebu, Mabolo and P. del Rosario branches, the branches covered by Wage Order No. RB VII-03. On June 7, 1994, Prubankers Association wrote the petitioner requesting that the Labor Management Committee be immediately convened to discuss and resolve the alleged wage distortion created in the salary structure upon the implementation of the said wage orders. It demanded in the Labor Management Committee meetings that the petitioner extend the application of the wage orders to its employees outside Regions V and VII, claiming that the regional implementation of the said orders created a wage distortion in the wage rates of petitioner's employees nationwide. As the grievance could not be settled in the said meetings, the parties agreed to submit the matter to voluntary arbitration. Issue: Whether or not a wage distortion resulted from respondent's implementation of the Wage Orders. Ruling: The court ruled that there is no wage distortion since the wage order implementation covers all the branches of the bank. The hierarchy of positions was still preserved. The levels of different pay classes was not eliminated. The statutory definition of wage distortion is found in Article 124 of the Labor Code, as amended by Republic Act No. 6727, which reads: Standards/Criteria for Minimum Wage Fixing . . ."As used herein, a wage distortion shall mean a situation where an increase in prescribed wage results in the elimination or severe contraction of intentional quantitative differences in wage or salary rates between and among employee groups in an establishment as to effectively obliterate the distinctions embodied in such wage structure based on skills, length of service, or other logical bases of differentiation." Wage distortion involves four elements : (1) An existing hierarchy of positions with corresponding salary rates; (2) A significant change in the salary rate of a lower pay class without a concomitant increase in the salary rate of a higher one; (3)The elimination of the distinction between the two levels and (4) The existence of the distortion in the same region of the country. A disparity in wages between employees holding similar positions but in different regions does not constitute wage distortion as contemplated by law. As stated, it is the hierarchy of positions and the disparity of their corresponding wages and other emoluments that are sought to be preserved by the concept of wage distortion. 50. METRO TRANSIT ORGANIZATION, INC., petitioner, vs. THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION, Second Division; EDNA BONTO-PEREZ, Presiding Commissioner; DOMINGO H. ZAPANTA, Commissioner; ROGELIO I. RAYAZA, Commissioner; and THE SUPERVISORY EMPLOYEES ASSOCIATION OF METRO (SEAM), respondents. G.R. No. 116008 July 11, 1995 FACTS: Metro Transit Organization, Inc. ("Metro") is the operator and manager of the Light Railway Transit (LRT) System in Metro Manila. It employs close to 1,000 rank-and-file and over 200 supervisory employees. Private respondent Supervisory Employees Association of Metro (SEAM) is a union composed of

32

33
supervisory employees of petitioner Metro. In May 1989, SEAM was certified as the sole bargaining unit for the supervisory employees of Metro. The first CBA between petitioner Metro and private respondent SEAM took effect. Prior to this, Metro had a CBA only with its rank-and-file employees. During the period when no CBA governed the terms and conditions of employment between Metro and its supervisory employees, whenever rank-and-file employees were paid a statutorily mandated salary increase, supervisory employees were, as a matter of practice, also paid the same amount plus P50.00. Later, Metro paid its rank-and-file employees a salary increase of P500.00 per month in accordance with the terms of their CBA. Metro, however, did not extend a corresponding salary increase to its supervisory employees. Then, Metro, in compliance with its CBA with SEAM, paid its supervisory employees a salary increase of P800.00 per month. Thereafter, Metro paid its rank-and-file and supervisory employees a P600.00 monthly increase. Then, it paid its supervisory employees the remaining balance of P400.00 per month in addition to the P600.00 a month it had earlier started to pay. Hence, SEAM filed a Notice of Strike before the National Conciliation and Mediation Board ("NCMB") charging petitioner Metro with (a) discrimination in terms of wages; (b) underpayment of salary increase per CBA for 1990 and/or adjustment of salaries for correction of disparity/inequity in pay with rank-and-file employees and (c) harassment and demotion of union officers. ISSUE: (a) Whether or not a wage distortion exists in respect of the salaries of the rank-and-file and supervisory employees of petitioner Metro? and (b) assuming a wage distortion existed, whether or not it has been corrected by petitioner Metro in accordance with law? HELD: (a) Yes, wage distortion exists when the salaries of rank-and-file employees were increased by P500.00 per month as stipulated in their CBA and no corresponding increase was paid to the supervisory employees. The increase of P550.00 sought by SEAM was neither an inducement nor was it contingent on (a) the success of the business of petitioner Metro; or (b) the increased production or work output of the company or (c) the realization of profits. The demand for this increase was based on a company practice, admitted by Metro, of granting a salary increase (and a premium) to supervisory employees whenever rank-and-file employees were granted a salary increase. That those increases were precisely designed to correct or minimize the wage distortion effects of increases given to rank-and-file employees (under their CBA or under Wage Orders), highlights the fact that those increases were part of the wage structure of supervisory employees. The demanded increase therefore is not a bonus that is generally not demandable as a matter of right. The demanded increase, in this instance, is an enforceable obligation so far as the supervisory employees of Metro are concerned. (b) Metro shall pay the "P550.00 per month wage increase effective April 17, 1989 and onwards" and similarly ordered the payment of P600.00 per month which it found to have been underpaid "effective December 1, 1990 and onwards." Thus, together with the increase of P550.00, those provisions will have adequately rectified the wage distortion which arose in respect of rank-and-file and supervisory employees. Metro must pay, the increase in pay of supervisory employees would be P1,500.00 more per month than the increases in pay of rank-and-file employees By the grant of the award of P550.00 to supervisory employees and by the operation of the Metro-SEAM CBA, the wage distortion which occurred on 17 April 1989 had been corrected. By 1 December 1991, a substantial gap or differential had been re-established between the salaries of the rank-and-file and supervisory employees of petitioner Metro. It was, therefore, grievous abuse of discretion for the NLRC to disregard such rectification and to rule that petitioner Metro was liable to its supervisory employees for P550.00 monthly increase beyond 1 December 1989 and "onwards." That distortion, as already pointed out, lasted only from 17 April 1989 up to 30 November 1989, since the following day, 1 December 1989, the CBA of Metro and SEAM went into effect. Additional payments of P600.00 per month to supervisory employees from 17 April 1990 up to 1 December 1990 should be deemed included in the P1,000.00 monthly increase effective from 1 December 1990 and onwards. Otherwise, allowing such will amount to unjust enrichment of supervisory employees at the expense of their employer Metro. Clearly therefore, supervisory employees, who then (i.e., on April 17, 1989) had, unlike the rank-and-file employees, no CBA governing the terms and conditions of their employment, had the right to rely on the company practice of unilaterally correcting the wage distortion effects of a salary increase given to
33

34
the rank-and-file employees, by giving the supervisory employees a corresponding salary increase plus a premium. 51. BANKARD EMPLOYEES UNION-WORKERS ALLIANCE TRADE UNIONS, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and BANKARD, INC., respondents. G.R. No. 140689| February 17, 2004 FACTS: Bankard, Inc. (Bankard) classifies its employees by levels. Its Board of Directors approved a "New Salary Scale" for the purpose of making its hiring rate competitive in the industrys labor market. It increased the hiring rates of new employees, to wit: Levels I and V by one thousand pesos (P1,000.00), and Levels II, III and IV by nine hundred pesos (P900.00). Accordingly, the salaries of employees who fell below the new minimum rates were also adjusted to reach such rates under their levels. Bankard Employees Union-WATU (petitioner), the duly certified exclusive bargaining agent of the regular rank and file employees of Bankard, continue to request for an increase in the wages and salaries of Bankards regular employees. As their request remained unheeded, it filed a Notice of Strike on the grounds of refusal to bargain, discrimination, and other acts of ULP - union busting. The strike was averted, however, when the dispute was certified by the Secretary of Labor and Employment for compulsory arbitration. NLRC, finding no wage distortion, dismissed the case for lack of merit. Petitioners motion for reconsideration of the dismissal of the case was denied. Petitioner thereupon filed a petition for certiorari which was referred to the Court of Appeals which denied the same for lack of merit. ISSUE: Whether or not the unilateral adoption by an employer of an upgraded salary scale that increased the hiring rates of new employees without increasing the salary rates of old employees resulted in wage distortion? HELD: Upon the enactment of R.A. No. 6727 (WAGE RATIONALIZATION ACT, amending, among others, Article 124 of the Labor Code) on June 9, 1989, the term "wage distortion" was explicitly defined as: ... a situation where an increase in prescribed wage rates results in the elimination or severe contraction of intentional quantitative differences in wage or salary rates between and among employee groups in an establishment as to effectively obliterate the distinctions embodied in such wage structure based on skills, length of service, or other logical bases of differentiation. The four elements of wage distortion is laid down in the case of Prubankers Association v. Prudential Bank and Trust Company. Normally, a company has a wage structure or method of determining the wages of its employees. In a problem dealing with "wage distortion," the basic assumption is that there exists a grouping or classification of employees that establishes distinctions among them on some relevant or legitimate bases such as: (a) the degrees of responsibility, (b) the skills and knowledge required, (c) the complexity of the job, (d) or other logical basis of differentiation. The differing wage rate for each of the existing classes of employees reflects this classification. If the compulsory mandate under Article 124 to correct "wage distortion" is applied to voluntary and unilateral increases by the employer in fixing hiring rates which is inherently a business judgment prerogative, then the hands of the employer would be completely tied even in cases where an increase in wages of a particular group is justified due to a re-evaluation of the high productivity of a particular group, or as in the present case, the need to increase the competitiveness of Bankards hiring rate. An employer would be discouraged from adjusting the salary rates of a particular group of employees for fear that it would result to a demand by all employees for a similar increase, especially if the financial conditions of the business cannot address an across-the-board increase. Bankards right to increase its hiring rate, to establish minimum salaries for specific jobs, and to adjust the rates of employees affected thereby is embodied under Section 2, Article V (Salary and Cost of Living Allowance) of the parties Collective Bargaining Agreement (CBA), to wit: Section 2. Any salary increase granted under this Article shall be without prejudice to the right of the Company to establish such minimum salaries as it may hereafter find appropriate for specific jobs, and to adjust the rates of the employees thereby affected to such minimum salaries thus established . This CBA provision, which is based on legitimate business-judgment prerogatives of the employer, is a valid and legally enforceable source of rights between the parties. Therefore, absent any indication that the voluntary increase of salary rates by an employer was done arbitrarily and illegally for the purpose of circumventing the laws or was devoid of any legitimate purpose other than to discriminate against the regular employees, this Court will not step in to interfere with this management prerogative. Employees are of course not precluded from negotiating with its employer and lobby for wage increases through appropriate channels, such as through a CBA.

34

35

35