Overtime Pay

MANILA TERMINAL COMPANY, INC., vs. THE COURT OF INDUSTRIAL RELATIONS and MANILA TERMINAL RELIEF AND MUTUAL
AID ASSOCIATION, respondents.
G.R. No. L-4148 July 16, 1952
PARAS, C. J.:
FACTS:
1945: Engaging in arrastre service at Manilas Port Area under the control of US Army, The petitioner hired some
thirty men as watchmen on twelve-hour shifts at a compensation of P3 per day for the day shift and P6 per day for
the night shift.
1946: When the petitioner worked for the Bureau of Customs for the post war operations, their watchmen continued
in the service with a number of substitutions and additions, their salaries having been raised during the month of
February to P4 per day for the day shift and P6.25 per day for the nightshift.
A member of the Manila Terminal Relief and Mutual Aid Association requested the Department of Labor that the
matter of overtime pay be investigated; nothing was done by the Department
Another letter was sent from a member of the Association but the Department again failed to do anything about the
matter
On May 27, 1947, the petitioner instituted the system of strict eight-hour shifts.
The Manila Terminal Relief and Mutual Aid Association was organized for the first time, having been granted
certificate by the Department of Labor. In 1947, Manila Terminal Relief and Mutual Aid Association filed an amended
petition with the Court of Industrial Relations praying, among others, that the petitioner be ordered to pay its
watchmen or police force overtime pay from the commencement of their employment.
In 1949, by virtue of Customs Administrative Order No. 81 and Executive Order No. 228 of the President of the
Philippines, the entire police force of the petitioner was consolidated with the Manila Harbor Police of the Customs
Patrol Service, a Government agency under the exclusive control of the Commissioner of Customs and the Secretary
of Finance.
Judge V. Jimenez Yanson of the Court of Industrial Relations in his decision in 1950, while dismissing other demands
of the Association for lack of jurisdiction, ordered the petitioner to pay to its police force
(a) Regular or base pay corresponding to four hours' overtime plus 25 per cent thereof as additional overtime
compensation for the period from September 1, 1945 to May 24, 1947;
(b) Additional compensation of 25 per cent to those who worked from 6:00 p.m. to 6:00 a.m. during the same period:
(c) Additional compensation of 50 per cent for work performed on Sundays and legal holidays during the same period;
(d) Additional compensation of 50 per cent for work performed on Sundays and legal holidays from May 24, 1947 to
May 9, 1949; and
(e) Additional compensation of 25 per cent for work performed at night from May 29, 1947 to May 9, 1949.
The petitioner find a motion for reconsideration. 2 judges concurred with the decision while Judge Juan S. Lanting ,
with respect to overtime compensation, ruled:
1. The decision under review should be affirmed in so far it grants compensation for overtime on regular days (not
Sunday and legal holidays) during the period from the date of entrance to duty to May 24, 1947, such compensation
to consists of the amount corresponding to the four hours' overtime at the regular rate and an additional amount of
25 per cent thereof.
2. As to the compensation for work on Sundays and legal holidays, the petitioner should pay to its watchmen the
compensation that corresponds to the overtime (in excess of 8 hours) at the regular rate only, that is, without any
additional amount, thus modifying the decision under review accordingly.
3. The watchmen are not entitled to night differential pay for past services, and therefore the decision should be
reversed with the respect thereto.
ISSUES:
The agreement under which its police force were paid certain specific wages for twelve-hour shifts, included overtime
compensation.
o The record does not bear out these allegations. The petitioner has relied merely on the facts that its
watchmen had worked on twelve-hour shifts at specific wages per day and that no complaint was made
about the matter until 1947 and 1949.
o note that after the petition had instituted the strict eight-hour shifts, no reduction was made in the salaries
which its watchmen received under the twelve hour arrangement. Indeed, as admitted by the petitioner,
"when the members or the respondent union were placed on strict eight-hour shifts, the lowest salary of all
the members of the respondent union was P165 a month, or P5.50 daily, for both day and night shifts."
Although it may be argued that the salary for the night shift was somewhat lessened, the fact that the rate
for the day shift was increased in a sense tends to militate against the contention that the salaries given
during the twelve-hour shifts included overtime compensation.
The Association cannot be said to have impliedly waived the right to overtime compensation, for the obvious reason
that they could not have expressly waived it.
o The principle of estoppel and the laches cannot well be invoked against the Association.
1. it would be contrary to the spirit of the Eight Hour Labor Law, under which as already seen, the
laborers cannot waive their right to extra compensation.
2. the law principally obligates the employer to observe it, so much so that it punishes the employer for
its violation and leaves the employee or laborer free and blameless.
3. the employee or laborer is in such a disadvantageous position as to be naturally reluctant or even
apprehensive in asserting any claim which may cause the employer to devise a way for exercising his
right to terminate the employment.
Moreover, the Eight-Hour Law, in providing that "any agreement or contract between the employer and the laborer
or employee contrary to the provisions of this Act shall be null avoid ab initio," (Commonwealth Act No. 444, sec. 6),
obviously intended said provision for the benefit of the laborers or employees.
It is high time that all employers were warned that the public is interested in the strict enforcement of the Eight-Hour
Labor Law. This was designed not only to safeguard the health and welfare of the laborer or employee, but in a way
to minimize unemployment by forcing employers, in cases where more than 8-hour operation is necessary, to utilize
different shifts of laborers or employees working only for eight hours each.Mania
Wherefore, the appealed decision, in the form voted by Judge Lanting, is affirmed, it being understood that the
petitioner's watchmen will be entitled to extra compensation only from the dates they respectively entered the
service of the petitioner, hereafter to be duly determined by the Court of Industrial Relations. So ordered, without
costs.