(C) LABOR STANDARDS including SPECIAL LAWS

14. Pearanda v. Baganga Plywood Corporation

[G.R. No. 159577. May 3, 2006]
Facts: Sometime in June 1999, petitioner Pearanda was hired as an employee of
respondent to take charge of the operations and maintenance of its steam plant
boiler. In 2001, Pearanda filed a Complaint for illegal dismissal with money claims
against BPC.
Labor Arbiterruled that there was no illegal dismissal and that the complaint was
premature because he was still employed by BPC. It also ruled that he was a
managerial employee.
Issue: Was he entitled to overtime pay and other monetary benefits?
Held:Article 82 of the Labor Code exempts managerial employees from the coverage
of labor standards.
Under this provision, managerial employees are those whose primary duty consists of
the management of the establishment in which they are employed or of a department
or subdivision.
However, petitioner was a member of the managerial staff, which also takes him out
of the coverage of labor standards. Like managerial employees, officers and members
of the managerial staff are not entitled to the provisions of law on labor standards.
Thus, there is no justification to award overtime pay and premium pay for rest days to
petitioner.
14. CharlitoPenaranda v Banganga Plywood Corporation and Chua
Facts:CharlitoPenaranda was hired as an employee of Baganga Corporation with a
monthly salary of P5,000 as Foreman/Boiler Head/ Shift Engineer to take charge of
the operations and maintenance of its steam plant boiler.
He alleges that he was illegally terminated and that his termination was without due
process and valid grounds. Furthermore, he was not paid his OT pay, premium pay for
working during holidays, and night shift differentials. So he filed an action for illegal
dismissal.
Hudson Chua, the General Manager of Baganga alleges that Penarandas separation
was done pursuant to Art. 238 of the Labor Code. The company was on temporary
closure due to repair and general maintenance and it applied for clearance with the
DOLE to shut down and dismiss employees. He claims that due to the insistence of
complainant, he was paid his separation benefits. But when the company partially reopened, Penarandafaild to re-apply.
Chua also alleges that since he is a managerial employee, he is not entitled to OT pay
and if ever he rendered services beyond the normal hours of work, there was no office
order/authorization for him to do so.
The Labor Arbiter ruled that there was no illegal dismissal and that Penarandas
complaint was premature because he was still employed with Baganga. As regards
the benefits, the Labor Arbiter found petitioner entitled to OT pay, premium pay for
working on rest days and attorneys fees.
On appeal, NLRC deleted the award of OT pay, premium pay and attorneys fees.
The CA dismissed Penarandas Petition for Certiorari based on procedural failures.
Issue:Whether or not Penaranda is a regular employee entitled to monetary benefits
under Art. 82 of the Labor Code.

Held:NO. Penaranda is part of the managerial staff which takes him out of the
coverage of labor standards. The Implementing Rules define members of a managerial
staff as those with the ff. responsibilities:
(1) The primary duty consists of the performance of work directly related to
management policies of the employer;
(2) Customarily and regularly exercise discretion and independent judgment;
(3)
(i) Regularly and directly assist a proprietor or a managerial
employee whose primary duty consists of the management of the
establishment in which he is employed or subdivision thereof; or
(ii) execute under general supervision work along specialized or
technical lines requiring special training, experience, or knowledge;
or
(iii) execute under general supervision special assignments and
tasks; and
(4) who do not devote more than 20 percent of their hours worked in a
workweek to activities which are not directly and closely related to the
performance of the work described in paragraphs (1), (2), and (3) above."
Petitioner supervised the engineering section of the steam plant boiler. His
work involved overseeing the operation of the machines and the performance of the
workers in the engineering section. This work necessarily required the use of
discretion and independent judgment to ensure the proper functioning of the steam
plant boiler. As supervisor, petitioner is deemed a member of the managerial staff.
Even Penaranda admitted that he was a supervisor. In his Position Paper, he
stated that he was the foreman responsible for the operation of the boiler. The term
foreman implies that he was the representative of management over the workers and
the operation of the department. His classification as supervisor is further evident
from the manner his salary was paid. He belonged to the 10% of respondents 354
employees who were paid on a monthly basis; the others were paid only on a daily
basis.
*No justification to award overtime pay and premium pay for rest days to Penaranda.
16. INTERNATIONAL PHARMACEUTICALS, INC. (IPI) v. NLRC;
DR. VIRGINIA QUINTIA
09 March 1998; Mendoza, J.
FACTS: IPI, a corporation engaged in the manufacture, production and sale of
pharmaceutical products engaged Dr. Quintia as MedicalDirector of its Research &
Development department in March1983. On the same year, the government launched
a programincentivizing development of herbal medicine. IPI decided toventure into the
field and one of the government requirementsfor entitlement to incentives was hiring
of pharmacologist. IPIthus contends that Quintia was hired only for this purpose and
isthus a project employee.The contract of employment was for the term of one year
fromits execution 19 March 1983, subject to renewal by mutualconsent. When said
contract was about to expire, she wasinvited to be chair of the Xavier University
PharmacologyDepartment. However, Castillo (president of IPI) prevailed uponher to
stay, assuring her of security of tenure. Thus, she stayednot only as Medical Director
of the R&D department but also ascompany physician.
On 12 July 1986, Quintiasemployment with the company was terminated. It is alleged
that this was due to her taking up the cudgels of rank and file employees against the
officers of theSavings and Loans Association. She had reportedly pointed out
inequality in the imposition of interest rates, leading to ademand of full disclosure of
association finances. When Pres Castill returned from a trip to China, she was asked to
report tohis office where she was berated in front of some laborers.When she sought
permission to explain her side, this wasturned down and she was told to leave.
On 10 July, she was replaced as head of R&D by Paz Wong.

On 12 July, she received an inter-office memorandum officiallyterminating her

services.She thus filed a complaint for illegal dismissal before the LA. IPIraised the
defense that Quintia was a project employee who hadbeen hired on a consultancy
basis coterminous with the projectinvolving the development of herbal medicine. Her
continuedemployment for more than two years after the originalemployment contract
expired was based on an oral agreementwith the same terms as the written contract,
or at least wasbased on implied extension.
LA: Quintia was a regular employee and not a project employee,thus could not be
dismissed without just/valid cause; also foundthat IPI failed to observe due process.
NLRC: affirmed the ruling of the LA
ISSUES-HELD-RATIO
WON Quintia is a regular employee of IPI: YES
IPI alleges that article 280 should not be used as it distinguishes between regular
and casual employee,
and they specifically allege that there is no employer-employee relationship. The
Court ruled that there is nodispute that Quintia is an employee with the issuebeing
whether she is a project employee (as alleged byIPI) or a regular employee. Hence,
the standard in art.280 of work that is necessary and desirable to thebusiness
applies.

IPI alleges that Quintias work was not necessary anddesirable but only for the
duration of the herbal
medicine development project. Both the LA and NLRCfound that Quintia was the head
of the R&D Dept; thatshe was also company physician; that she undertookvarious
civic activities for IPI; and that her employmentlasted for more than 3 years. Hence,
they ruled thatQuintia was not a consultant but a regular employee.The NLRC
observed that she was replaced upon termination implying that she was occupying an
existing position and wasnot merely a project employee. The employment contract
alsomakes no mention of any particular project or consultancy.
IPI alleges that Quintia was not required to keep fixed office hours. As found by the
LA, this wasindicative that she was a managerial employeewho was not covered by
the Labor Codeprovisions on hours of work.
IPI alleges that there was implied renewal, or at least implied extension, of their
written fixed-termemployment contract. The Court found that there is noprinciple of
law to support this contention. Furthermore,to sustain such argument would allow
employers tocircumvent art. 280 and allow employers to preventregularization by
extending fixed-term contracts. Moreover, if there was extension of the written
contract with thetermination only being pursuant to the expiration of the
latestextension, then Quintias termination would have occurred inMarch when the
term runs out and not in July.
WON there had been valid termination: NO
IPI alleges that the termination of Quintia was valid, being based on the termination
of the herbal medicinedevelopment project. As the Court has already foundthat
Quintia is not a project employee but is instead aregular employee, this contention
has no merit.

As a regular employee, Quintias employment could only be terminated for just or

authorizedcause. Though the employer is given a widerdiscretion in terminating
employment ofmanagerial personnel such that they may bedismissed for loss of
confidence, mere allegationof such ground is not sufficient.
Moreover, as found by both the LA, IPI has failed toaccord due process to Quintia.
The memoranda sent toher on 10 and 12 July did not sufficiently comply withthe twin-

notice requirement nas they did not state theparticular acts or omissions for which her
dismissal issought. Nor was she given the opportunity to be heard.
WON reinstatement is feasible: NO, because of antagonismbetween the parties and
Quintias own preference for separationpay, reinstatement would no longer be
feasible.
Petition is DISMISSED. Decision of NLRC MODIFIED by ordering IPI to pay Quintia
separation pay.
19. G.R. No. 79255 January 20, 1992
UNION OF FILIPRO EMPLOYEES (UFE), petitioner, vs. BENIGNO VIVAR, JR.,
NATIONAL LABOR RELATIONS COMMISSION and NESTL PHILIPPINES, INC.
(formerly FILIPRO, INC.), respondents.
We used to have ten (10) regular holidays. This is the reason for the 251 divisor, used
by some companies in computing the daily wage, which represents the 365 days of
the year, less 52 Saturdays, 52 Sundays and the 10 legal holidays. The new law added
one more regular holiday the EidlFitr. We thus have eleven (11) regular holidays
under R.A. 9492:

New Years Day (January 1)

Maundy Thursday (Movable date)

Good Friday (Movable date)

EidlFitr (Movable date)

Araw ng Kagitingan Bataaan and Corregidor Day (Monday nearest

April 9)

Labor Day (Monday nearest May 1)

Independence Day (Monday nearest June 12)

National Heroes Day (Last Monday of August)

Bonifacio Day (Monday nearest November 30)

Christmas Day (December 25)

Rizal Day (Monday nearest December 30)

The Labor Code provides that every worker shall be paid his daily wage during regular
holidays. Employers are now required to pay for an extra regular holiday.
Facts: On November 8, 1985, respondent Filipro, Inc. (now Nestle Philippines, Inc.)
filed with the National Labor Relations Commission (NLRC) a petition for claims of its
monthly paid employees for holiday pay.
AbitratorVivar: Filipro to pay its monthly paid employees holiday pay pursuant to Art
94 of Labor Code, subject to exclusions and limitations in Art 82.
Filipro filed a motion for clarification seeking (1) the limitation of the award to three
years, (2) the exclusion of salesmen, sales representatives, truck drivers,
merchandisers and medical representatives (hereinafter referred to as sales
personnel) from the award of the holiday pay, and (3) deduction from the holiday pay
award of overpayment for overtime, night differential, vacation and sick leave benefits
due to the use of 251 divisor.
Petitioner UFE answered that the award should be made effective from the date of
effectivity of the Labor Code, that their sales personnel are not field personnel and are
therefore entitled to holiday pay, and that the use of 251 as divisor is an established
employee benefit which cannot be diminished.
Arbitrator Vivar: On January 14, 1986, the respondent arbitrator issued an order
declaring that the effectivity of the holiday pay award shall retroact to November 1,
1974, the date of effectivity of the Labor Code. He adjudged, however, that the
companys sales personnel are field personnel and, as such, are not entitled to holiday
pay. He likewise ruled that with the grant of 10 days holiday pay, the divisor should

be changed from 251 to 261 and ordered the reimbursement of overpayment for
overtime, night differential, vacation and sick leave pay due to the use of 251 days as
divisor.
Issues:
1) Whether or not Nestles sales personnel are entitled to holiday pay; and
2) Whether or not, concomitant with the award of holiday pay, the divisor should be
changed from 251 to 261 days and whether or not the previous use of 251 as divisor
resulted in overpayment for overtime, night differential, vacation and sick leave pay.
Held:
1. Sales personnel are not entitled to holiday pay.
Under Article 82, field personnel are not entitled to holiday pay. Said article defines
field personnel as non-agritultural employees who regularly perform their duties
away from the principal place of business or branch office of the employer and whose
actual hours of work in the field cannot be determined with reasonable certainty.
The law requires that the actual hours of work in the field be reasonably ascertained.
The company has no way of determining whether or not these sales personnel, even if
they report to the office before 8:00 a.m. prior to field work and come back at 4:30
p.m, really spend the hours in between in actual field work.
Moreover, the requirement that actual hours of work in the field cannot be
determined with reasonable certainty must be read in conjunction with Rule IV, Book
III of the Implementing Rules which provides:
Rule IV Holidays with Pay
Sec. 1. Coverage This rule shall apply to all employees except:
xxx xxxxxx
(e) Field personnel and other employees whose time and performance is unsupervised
by the employer . . . (Emphasis supplied)
Hence, in deciding whether or not an employees actual working hours in the field can
be determined with reasonable certainty, query must be made as to whether or not
such employees time and performance is constantly supervised by the employer.
2. The divisor in computing the award of holiday pay should still be 251
days.
While in that case the issue was whether or not salesmen were entitled to overtime
pay, the same rationale for their exclusion as field personnel from holiday pay benefits
also applies.
The petitioner union also assails the respondent arbitrators ruling that, concomitant
with the award of holiday pay, the divisor should be changed from 251 to 261 days to
include the additional 10 holidays and the employees should reimburse the amounts
overpaid by Filipro due to the use of 251 days divisor.
The 251 working days divisor is the result of subtracting all Saturdays, Sundays and
the ten (10) legal holidays from the total number of calendar days in a year. If the
employees are already paid for all non-working days, the divisor should be 365 and
not 251.
In the petitioners case, its computation of daily ratio since September 1, 1980, is as
follows:
monthly rate x 12 months / 251 days
The use of 251 days divisor by respondent Filipro indicates that holiday pay is not yet
included in the employees salary, otherwise the divisor should have been 261.
It must be stressed that the daily rate, assuming there are no intervening salary
increases, is a constant figure for the purpose of computing overtime and night

differential pay and commutation of sick and vacation leave credits. Necessarily, the
daily rate should also be the same basis for computing the 10 unpaid holidays.
The respondent arbitrators order to change the divisor from 251 to 261 days would
result in a lower daily rate which is violative of the prohibition on non-diminution of
benefits found in Article 100 of the Labor Code. To maintain the same daily rate if the
divisor is adjusted to 261 days, then the dividend, which represents the employees
annual salary, should correspondingly be increased to incorporate the holiday pay.
To illustrate, if prior to the grant of holiday pay, the employees annual salary is
P25,100, then dividing such figure by 251 days, his daily rate is P100.00 After the
payment of 10 days holiday pay, his annual salary already includes holiday pay and
totals P26,100 (P25,100 + 1,000). Dividing this by 261 days, the daily rate is still
P100.00. There is thus no merit in respondent Nestles claim of overpayment of
overtime and night differential pay and sick and vacation leave benefits, the
computation of which are all based on the daily rate, since the daily rate is still the
same before and after the grant of holiday pay.
SC Decision: The Court thereby resolves that the grant of holiday pay be effective,
not from the date of promulgation of the Chartered Bank case nor from the date of
effectivity of the Labor Code, but from October 23, 1984, the date of promulgation of
the IBAA case (Insular Bank of Asia and America Employees Union (IBAAEU)
v. Inciong, where the court declared that Sec 2, Rule IV, Book III of IRR which excluded
monthly paid employees from holiday pay benefits, are null and void).
WHEREFORE, the order of the voluntary arbitrator in hereby MODIFIED. The divisor to
be used in computing holiday pay shall be 251 days. The holiday pay as above
directed shall be computed from October 23, 1984. In all other respects, the order of
the respondent arbitrator is hereby AFFIRMED.
20. MERCIDAR FISHING v NLRC (FERMY)
G.R. No. 112574; 8 Oct 1998; MENDOZA, J.
I. Facts: The private respondent was employed as a bodegero/ship quartermaster for 2
years before he was allegedly constructivelydismissed. He alleged that he had been
sick and was allowed togo on leave without pay for one month-- when he reported
towork, he was not allowed to come back yet. This continued until
they completely refused to give him work. When the respondentasked for a certificate
of employment, they refused to give itunless he submitted his resignation. He then
filed a complaintfor constructive dismissal.
The petitioners claimed that he abandoned his work-- after hisleave expired, he was
AWOL for 3 months. He sought thecertificate of employment because he was applying
for acompetitor; when they gave it to him, he refused unless he wasgiven separation
pay.
The Labor Arbiter favored the respondent, orderingreinstatement with backwages
AND service incentive pay. Onappeal to the NLRC, the petitioners argued that
thepetitioner cannot be held for service incentive pay as therespondent was a type of
field personnel (under Art. 82 LC),and has no right to it. The NLRC did not consider
thisargument, and affirmed the decision in toto.
Issue: Whether or not the respondent was a kind of field personnel on account of his
work hours.
Held/Ratio: NO. Actual hours of work could be determined with reasonable certainty,
making Art. 82 on field personnelinapplicable.
- Art. 82 LC states that field personnel are non-agricultural employees who (1)
REGULARLY PERFORM THEIR DUTIESAWAY from the principal place of business/branch
office ofemployer AND (2) WHOSE ACTUAL HOURS OF WORKcannot be determined
with reasonable certainty.

Argument: The mere fact that work was performed away from the principal place of
business should suffice to make theemployees 'field personnel.'In Union of Filipino
Employees v Vicar, the Court held that ifin the course of a certain time period, there is
a means bywhich the employer had control-- it would still be hours ofwork that can be
determined with reasonable certainty. Thisis also found in Rule IV, Book III of the
Omnibus RulesImplementing the Labor Code, which points out that fieldpersonnel are
those whose time and performance isunsupervised by the employer. In this case,
during the entirevoyage, the fishermen had to stay in the boat and were underthe
control of the vessel's patron or master. They are not fieldpersonnel as defined in the
Labor Code.

Bus. He claimed that he bumped the he accidentally bumped the bus as he was so
tired and that he has not slept for more than 24 hours because Auto Bus required him
to return to Isabela immediately after arriving at Manila. Damages were computed
and 30% or P75,551.50 of it was being charged to Bautista. Bautista refused payment.

(On constructive dismissal: It found that there was constructive dismissal, as the
respondent was prevented from working inspite of submission of a medical
certificate.)

The case was appealed before the National Labor Relations Commission. NLRC
modified the LAs ruling. It deleted the award for 13th Month pay. The court of Appeals
affirmed the NLRC.

20. Mercidar Fishing Corporation vs. NLRC & Fermin Agao, Jr.
FACTS: This case originated from a complaint filed on September 20, 1990 by private
respondent FerminAgao, Jr. against petitioner for illegal dismissal, violation of P.D. No.
851, and non-payment of five days service incentive leave for 1990. Private
respondent had been employed as a "bodegero" or ship's quartermaster on February
12, 1988. He complained that he had been constructively dismissed by petitioner
when the latter refused him assignments aboard its boats after he had reported to
work on May 28, 1990. Private respondent alleged that he had been sick and thus
allowed to go on leave without pay for one month from April 28, 1990 but that when
he reported to work at the end of such period with a health clearance, he was told to
come back another time as he could not be reinstated immediately. Thereafter,
petitioner refused to give him work. For this reason, private respondent asked for a
certificate of employment from petitioner on September 6, 1990. However, when he
came back for the certificate on September 10, petitioner refused to issue the
certificate unless he submitted his resignation. Since private respondent refused to
submit such letter unless he was given separation pay, petitioner prevented him from
entering the premises. Petitioner, on the other hand, alleged that it was private
respondent who actually abandoned his work.

Auto Bus averred that Bautista is a commissioned employee and if that is not reason
enough that Bautista is also a field personnel hence he is not entitled to a service
incentive leave. They invoke:

ISSUE: Whether or not the fishing crew members are considered field personnel as
classified in Art. 82 of the Labor Code.
HELD: Art. 82 of the Labor Code provides: The provisions of this title [Working
Conditions and Rest Periods] shall apply to employees in all establishments and
undertakings whether for profit or not, but not to government employees, field
personnel, members of the family of the employer who are dependent on him for
support, domestic helpers, persons in the personal service of another, and workers
who are paid by results as determined by the Secretary of Labor in appropriate
regulations. "Field personnel" shall refer to non-agricultural employees who regularly
perform their duties away from the principal place of business or branch office of the
employer and whose actual hours of work in the field cannot be determined with
reasonable certainty. In contrast, in the case at bar, during the entire course of their
fishing voyage, fishermen employed by petitioner have no choice but to remain on
board its vessel. Although they perform non-agricultural work away from petitioner's
business offices, the fact remains that throughout the duration of their work they are
under the effective control and supervision of petitioner through the vessel's patron or
master.
21. LABOR CASE: AUTO BUS TRANSPORT SYSTEMS, INC. vs ANTONIO
BAUTISTA G.R. No. 156367 May 16 2005
FACTS: Antonio Bautista was employed by Auto Bus Transport Systems, Inc. in May
1995. He was assigned to the Isabela-Manila route and he was paid by commission
(7% of gross income per travel for twice a month).
In January 2000, while he was driving his bus he bumped another bus owned by Auto

Auto Bus terminated Bautista after due hearing as part of Auto Bus management
prerogative. Bautista sued Auto Bus for Illegal Dismissal. The Labor Arbiter Monroe
Tabingan dismissed Bautistas petition but ruled that Bautista is entitled to
P78,1117.87 13th month pay payments and P13,788.05 for his unpaid service
incentive leave pay.

Art. 95. RIGHT TO SERVICE INCENTIVE LEAVE

(a) Every employee who has rendered at least one year of service shall be entitled to
a yearly service incentive leave of five days with pay.
Book III, Rule V: SERVICE INCENTIVE LEAVE
SECTION 1. Coverage. ' This rule shall apply to all employees except:
(d) Field personnel and other employees whose performance is unsupervised by the
employer including those who are engaged on task or contract basis, purely
commission basis, or those who are paid in a fixed amount for performing work
irrespective of the time consumed in the performance thereof; . . .
ISSUE: Whether or not Bautista is entitled to Service Incentive Leave.
If he is, Whether or not the three (3)-year prescriptive period provided under Article
291 of the Labor Code, as amended, is applicable to respondent's claim of service
incentive leave pay.
HELD: Yes, Bautista is entitled to Service Incentive Leave. The Supreme Court
emphasized that it does not mean that just because an employee is paid on
commission basis he is already barred to receive service incentive leave pay.
The question actually boils down to whether or not Bautista is a field employee.
According to Article 82 of the Labor Code, 'field personnel shall refer to nonagricultural 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.
As a general rule, field personnel are those whose performance of their job/service is
not supervised by the employer or his representative, the workplace being away from
the principal office and whose hours and days of work cannot be determined with
reasonable certainty; hence, they are paid specific amount for rendering specific
service or performing specific work. If required to be at specific places at specific
times, employees including drivers cannot be said to be field personnel despite the
fact that they are performing work away from the principal office of the employee.
Certainly, Bautista is not a field employee. He has a specific route to traverse as a bus
driver and that is a specific place that he needs to be at work. There are inspectors
hired by Auto Bus to constantly check him. There are inspectors in bus stops who
inspects the passengers, the punched tickets, and the driver. Therefore he is definitely
supervised though he is away from the Auto Bus main office.
On the other hand, the 3 year prescriptive period ran but Bautista was able to file his
suit in time before the prescriptive period expired. It was only upon his filing of a
complaint for illegal dismissal, one month from the time of his dismissal, that Bautista

demanded from his former employer commutation of his accumulated leave credits.
His cause of action to claim the payment of his accumulated service incentive leave
thus accrued from the time when his employer dismissed him and failed to pay his
accumulated leave credits.
24 APEX Mining Co. v NLRC
EMPLOYMENT OF HOUSEHELPERS Apex Mining Company, Inc v. NLRC Laundrywoman
not actually serving the family of the employer but working in the staffhouses or
within the premises of the business of the employer is a regular employee and not a
domestic helper. NOTE: The term househelper 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 of the employers family
22. Far East Agri Supply Co. v Jimmy Lebatique
Feb 12, 2007; Quisumbing
FACTS:
Petitioner Far East Agricultural Supply, Inc. (Far East) hired on March 4, 1996 private
respondent Jimmy
Lebatique as truck driver with a daily wage of P223.50.He delivered animal feeds to
the companys clients.
January 24, 2000: Lebatique complained of nonpayment of overtime work
particularly on January22, 2000, when he was required to make a seconddelivery in
Novaliches, Quezon City.
That same day, Manuel Uy, brother of Far EastsGeneral Manager and petitioner
Alexander Uy,suspended Lebatique apparently for illegal use of company vehicle.
Even so, Lebatique reported for workthe next day but he was prohibited from entering
thecompany premises.
January 26, 2000: Lebatique sought the assistance of the DOLE Public Assistance
and Complaints Unitconcerning the nonpayment of his overtime pay. Lebatique
explained to Alexander that he had neverbeen paid for overtime work since he started
workingfor the company. He also told Alexander that Manuelhad fired him. After
talking to Manuel, Alexanderterminated Lebatique and told him to look for another
job.
March 20, 2000, Lebatique filed a complaint for illegal dismissal and nonpayment of
overtime pay with the LA.o LA found that Lebatique was illegallydismissed, and
ordered his reinstatement andthe payment of his full back wages, 13 th
Mediator Arbiter Cortez approved the MOA and certified LCP as the sole and
exclusive bargainingagent
LCP President Navarro submitted a proposal forcollective bargaining
Petitioners filed a complaint in the NLRC againstEmpire Food Products for unfair
labor practice by wayof illegal lockout and/or dismissal; union busting; violation of the
MOA; underpayment of wages anddamages
LA absolved Empire Food Products of the charges. LA directed the reinstatement of
the individual complaintsruling that the respondents violated a cardinal rule thata
payroll and other papers evidencing hours of work,payments, etc. shall always be
maintained andsubjected to inspection and visitation by personnel ofthe DOLE.
Respondents should not escape liability forthis technicality, hence, proper that
allindividual complaints except those whoresigned and executed quitclaims
andreleases should be reinstated admonition torespondents that any harassment,
intimidation, coercion or any form of threat asa result of this reinstatement shall be
dealtwith accordingly.
NLRC vacated LA decision and remanded the case forfurther proceeding ruling that
the LA overlookedtestimonies of some of the individual complainants
LA dismissed the complaint.
A charge of unfair labor practice connotes afinding of prima facie evidence of
probabilitythat a criminal offense may have beencommitted so as to warrant the filing
ofcriminal information.

The charge of illegal lockout has no leg tostand on because the testimony
ofrespondent through their guard Orlando Cairothat the complainants refused and
failed toreport for work, hence guilty of abandoningtheir post without permission. Due
to failure toreport to work, the cheese curls ready forrepacking were all spoiled.
Complainants also failed to specify what typeof threats or intimidation was
committed
MOA could not be the basis of an obligationwithin the ambit of NLRC jurisdiction as
itspoke of a resolutory condition which could or could not happen
Complaint of underpayment has no leg tostand on as the complainants admission
thatthey are piece workers or paid on pakiaobasis (certain amount for every
thousandpieces of cheese curls or other products
repacked). The only limitation for pieceworkers is that they should
receivecompensation no less than the minimumwage for an 8 hour work. Lazy workers
earnless than minimum wage.
No moral and exemplary damages as therewas no malice, bad faith or fraud
NLRC affirmed LA decision. MR denied
Petitioners filed special civil action for certiorari under Rule 65
W/N employees abandoned work NO, 2 days after thesupposed abandonment of
work, they filed a complaint for illegaldismissal
o In finding that the employees abandoned work, LA and NLRC relied on the sole
testimony of Security GuardCairo. The failure to work for one day, which resulted inthe
spoilage of cheese curls does not amount toabandonment of work.
o In several cases, it has been held that one could notpossibly abandon his work and
shortly thereafter
vigorously pursue his complaint for illegal dismissal
o In De Ysasi III v NLRC, SC held that it is the clear, deliberate and unjustified refusal
to resumeemployment and not mere absence that constitutesabandonment. The
absence of petitioner employeesfor one day on January 21, 1991 as testified [to]
bySecurity Guard Orlando Cairo did not constituteabandonment.
W/N employees are entitled to reinstatement YES, they are entitled to reinstatement
with full back wages pursuant to Article279 of the Labor Code, as amended by R.A.
No. 6715.
o As piece workers or packyao basis employees, it doesnot mean that they are not
entitled to reinstatement.
o The work of processed food repackers is necessary inthe day to day operations of
Empire Food Products
o Burden of proving existence of just cause fordismissing an employee, such as
abandonment, restswith the employer, a burden that it failed to dischargein this case
o Employees are entitled to reinstatement with full backwages pursuant to Art. 279 of
the LC. However, takinginto account the number of employees, the length oftime
lapsed from dismissal, the resentment and enmitybetween the parties, reinstatement
would beimpractical and hardly promotive of the best interestsof the parties.
Separation pay at the rate of 1 month forevery year of service, with a fraction of at
least 6months of service considered as 1 year is in order
W/N employees rights security of tenure and constitutional right to due process was
violated YES, Section 2, Rule XIV, Book Vof the Omnibus Rules Implementing the LC
requires a writtennotice from the employer constituting the grounds for hisdismissal.
In cases of abandonment, notice to be served at theworkers last known address
W/N petitioners are entitled to back wages Cannot be fully settled, as piece rate
workers, there is a need to determine thevarying degrees of production and days
worked of each workerwhich must be settled by the NLRC
W/N petitioners are regular employees YES, although they are piece-rate workers
they are regular employees and areentitled to other benefits (holiday pay, premium
pay, 13thmonth pay, service incentive leave)
o 3 factors to conclude that although piece rateworkers, they were regular employees

1. The nature of the task of repacking snack food was necessary anddesirable in the
usual business of
respondents who were engaged in themanufacture and selling of such foodproducts
2. Petitioners worked throughout the year, their employment not having been
dependent on a specific projector season
3. The length of time that the petitionersworked for the respondents.
o Thus, while the mode of compensation was on aper piece basis, the status and
nature of theiremployment was that of a regular employee
W/N NLRC abused its discretion when it deprived petitioners oftheir constitutional
right to self-organization, security of tenure,protection to labor, just and humane
conditions of work and dueprocess NO, evidence does not support this claim
HELD: Petition GRANTED. NLRC and LA decision set aside.
1. Declaring employees illegally dismissed, entitled to full back wages, and other
privileges, and separation payin lieu of reinstatement at the rate of one monthssalary
for every year of service with a fraction of sixmonths of service considered as one
year;
2. Remanding the case to the NLRC for determination ofthe back wages and other
benefits and separation pay;and
3. Directing NLRC to resolve the issued within 60 daysfrom receipt of decision
No OT Pay for Drivers who are Field Personnel
Are drivers entitled to overtime pay?
It depends on the status of the driver.
In summary, a driver who is not a field personnel is entitled to overtime pay.
Conversely, a driver who is considered a field personnel is not entitled to overtime
pay. A driver who is a househelper is not entitled to overtime pay
.

In Far East Agricultural Supply v. Lebatique (G.R. No. 162813, 12 February 2007), the
employee-driver filed a complaint seeking to paid overtime pay. As the complainant
was not considered a field personnel, the employer was made liable to pay for the
overtime pay. Thus:

As correctly found by the Court of Appeals, Lebatique is not a field personnel as

defined above for the following reasons: (1) company drivers, including Lebatique, are
directed to deliver the goods at a specified time and place; (2) they are not given the
discretion to solicit, select and contact prospective clients; and (3) Far East issued a
directive that company drivers should stay at the clients premises during truck-ban
hours which is from 5:00 to 9:00 a.m. and 5:00 to 9:00 p.m.14 Even petitioners admit
that the drivers can report early in the morning, to make their deliveries, or in the
afternoon, depending on the production of animal feeds.15 Drivers, like Lebatique, 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.
The key, then, is to determine the proper status of a driver to know whether overtime
pay is due.

Driver as a field personnel

The rules are different if a driver is considered as a field personnel who is not under
the supervision of the employer. Such employees are not entitled to overtime pay as
stated above in Article 82.

Driver as ordinary employee

For provisions on Working Conditions such as overtime pay, Article 82 of the Labor
Code limits coverage as to who may be entitled thereto, viz:

Who is a field personnel?

Article 82 of the Labor Code defines a field personnel as follows:

ART. 82. Coverage. The provisions of this title [Working Conditions and Rest Periods]
shall apply to employees in all establishments and undertakings whether for profit or
not, but not to government employees, 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. (Underscoring and emphasis supplied.)

Consequently, a driver who is an ordinary employee (and not a field personnel) is

entitled to overtime pay as he is not one of those exempted.

Field personnel shall refer to non-agricultural employees who regularly perform their
duties away from the principal place of business or branch office of the employer and
whose actual hours of work in the field cannot be determined with reasonable
certainty. (Underscoring and emphasis supplied.)
The definition was expanded by the Supreme Court in the Lebatique case:
In Auto Bus Transport Systems, Inc. v. Bautista, this Court emphasized that the
definition of a field personnel is not merely concerned with the location where the
employee regularly performs his duties but also with the fact that the employees
performance is unsupervised by the employer. We 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. Thus, in order to determine whether an employee is a field

employee, it is also necessary to ascertain if actual hours of work in the field

can be determined with reasonable certainty by the employer. In so doing, an
inquiry must be made as to whether or not the employees time and performance are
constantly supervised by the employer. (Citations omitted; Underscoring and
emphasis supplied.)

If a driver is categorized as a field personnel who is not supervised by the employer

and whose actual hours in the field cannot be determined with reasonable certainty
by the employer, then such driver may be considered a field personnel. In that case,
such driver is not entitled to overtime pay. These may apply to truck drivers or bus
drivers provided those conditions are met.

Driver as househelper
Family
or
personal
drivers
may
be
considered
either
as
domestic
househelpersor persons in the personal service of another. Domestic househelpers are
those who provide domestic or household service.
Domestic or household service shall mean service in the employers home which is
usually necessary or desirable for the maintenance and enjoyment thereof and
includes ministering to the personal comfort and convenience of the members of the
employers household, including services of family drivers. (Par. 2, Article 139, Labor
C0de)

On the same day,Lebatique filed a complaint for nonpayment of overtime pay against
Alexander Uy.
Uy summoned Lebatique and asked why he was claiming overtime pay. Lebatique said
since he started working with the company he has never been paid OT pay. Uy
consulted with his brother. On January 29, 2000, Uy told Lebatique to look for another
job.

Lebatique then filed an Illegal Dismissal case against the company.

The Labor Arbiter ruled in favor of Lebatique. Uy was ordered to reinstate Lebatique
and at the same time to pay Lebatique his 13 th month pay, back wages (time when
case was pending), service incentive leave pay and OT pay all amounting to
P196,659.72.

Uy argued that Lebatique was not dismissed and that he was merely suspended; that
he abandoned his job; and that Lebatique was a field personnel not entitled to
overtime pay and service incentive leave.

ISSUE: Whether or not Lebatique is a field personnel.

Househelpers include family drivers, domestic servants, laundry women, yayas,
gardeners, houseboys, and similar househelps (Apex Mining Company v. NLRC, G.R.
No. 94951, 22 April 1991).
When considered as domestic househelpers, drivers are not entitled to overtime pay.

22. Far East Agri Supply Co. v Jimmy Lebatique

HELD: No. Lebatique is a regular employee.

Uy illegally dismissed Lebatique when he told him to look for another job. Judging at
the sequence of event, Lebatique earned the ire of Uy when he filed a complaint for
nonpayment of OT pay on the day Lebatique was suspended by Manuel Uy. Such is
not a valid reason for dismissing Lebatique.

Feb 12, 2007; Quisumbing

In March 1996, Lebatique was hired as a driver by FAR EAST AGRICULTURAL SUPPLY,
INC. with a daily wage of P223.50. His job as a driver includes the delivery of animal
feeds to the clients of the company. He must report either in the morning or in the
afternoon to make the deliveries.

On January 24, 2000, Lebatique was suspended by Manuel Uy (brother of FEASIs

General Manager Alexander Uy) for allegedly using the company vehicle illegally.

Uy cannot therefore claim that he merely suspended Lebatique.

Further, Lebatique did not abandon his job. His filing of this case is proof enough that
he had no intention to abandon his job.

To constitute abandonment as a just cause for dismissal, there must be:

(a) absence without justifiable reason; and

under the Code reinstated and their cases subjected to further hearing; and that PAL
be declared guilty of unfair labor practice and be ordered to pay damages.

(b) a clear intention, as manifested by some overt act, to sever the employeremployee relationship.

PAL filed a Motion to Dismiss, asserting its prerogative as an employer to prescribe

rules and regulations regarding employees' conduct in carrying out their duties and
functions, and alleging that it had not violated the CBA or any provision of the Labor
Code. ISSUE: WON the formulation of a Code of Discipline among employees is a
shared responsibility of the employer and the employees .

None of the above was proven by Uy.

HELD: YES. Employees have a right to participate in the deliberation of matters which
may affect their rights and the formulation of policies relative thereto and one such
matter is the formulation of a code of discipline. It was only on March 2, 1989, with the
approval of RA 6715, amending Art 211 of the Labor Code, that the law explicitly
considered it a State policy "to ensure the participation of workers in decision and
policy-making processes affecting their rights, duties and welfare." However, even in
the absence of said clear provision of law, the exercise of management prerogatives
was never considered boundless. Thus, in Cruz vs. Medina, it was held that
management's prerogatives must be without abuse of discretion.

Also, Lebatique is not a field personnel as defined above for the following reasons:
(1) company drivers, including Lebatique, are directed to deliver the goods at a
specified time and place;
(2) they are not given the discretion to solicit, select and contact prospective clients;
and
(3) Far East issued a directive that company drivers should stay at the clients
premises during truck-ban hours which is from 5:00 to 9:00 a.m. and 5:00 to 9:00 p.m.

As a regular employee, Lebatique is entitled to service incentive leave and OT pay.

The Supreme Court affirmed the Labor Arbiters decision but remanded the case for
properly computing Lebatiques OT pay taking in to consideration the companys time
keeping records.

Field Personnel Defined

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

28. PAL INC V. NLRC 225 SCRA 301 (1993)

FACTS: On March 15, 1985, PAL completely revised its 1966 Code of Discipline. The
Code was circulated among the employees and was immediately implemented, and
some employees were subjected to the disciplinary measures. The Philippine Airlines
Employees Association (PALEA) filed a complaint before the NLRC contending that PAL,
by its unilateral implementation of the Code, was guilty of unfair labor practice,
specifically Paragraphs E and G of Art 249 and Art 253 of the Labor Code. PALEA
alleged that copies of the Code had been circulated in limited numbers; that being
penal in nature the Code must conform to the requirements of sufficient publication,
and that the Code was arbitrary, oppressive, and prejudicial to the rights of the
employees. It prayed that implementation of the Code be held in abeyance; that PAL
should discuss the substance of the Code with PALEA; that employees dismissed

In San Miguel Brewery Sales Force Union vs. Ople, we upheld the company's right to
implement a new system of distributing itsproducts, but gave the following caveat: So
long as a company's management prerogatives are exercised in good faith for the
advancement the employer's interest and not for the purpose of defeating or
circumventing the rights of the employee, under special laws or under valid
agreements, this Court will uphold them.
All this points to the conclusion that the exercise of managerial prerogatives is not
unlimited. It is circumscribed by limitations found in law, a CBA, or the general
principles of fair play and justice.
Moreover, it must be duly established that the prerogative being invoked is clearly a
managerial one.
Verily, a line must be drawn between management prerogatives regarding business
operations per se and those which affect the rights of the employees. In treating the
latter, management should see to it that its employees are at least properly informed
of its decisions or modes of action. PAL asserts that all its employees have been
furnished copies of the Code, the LA and the NLRC found to the contrary, which
finding, is entitled to great respect. PALEA recognizes the right of the Company to
determine matters of management policy and Company operations and to direct its
manpower. Management of the Company includes the right to organize, plan, direct
and control operations, to hire, assign employees to work, transfer employees from
one department to another, to promote, demote, discipline, suspend or discharge
employees for just cause; to lay-off employees for valid and legal causes, to introduce
new or improved methods or facilities or to change existing methods or facilities and
the right to make and enforce Company rules and regulations to carry out the
functions of management. The exercise by management of its prerogative shall be
done in a just, reasonable, humane and/or lawful manner.
Such provision in the CBA may not be interpreted as cession of employees' rights to
participate in the deliberation of matters which may affect their rights and the
formulation of policies relative thereto. And one such matter is the formulation of a
code of discipline. Industrial peace cannot be achieved if the employees are denied
their just participation in the discussion of matters affecting their rights.
Disposition Petition is DISMISSED
For purposes of labor standards, managerial employees are those whose primary
duty consists of the management of the establishment in which they are employed or
of a department or subdivision thereof, and to other officers or members of the
managerial staff. (Art. 82, Labor Code)

One is an officer or member of a managerial staf if he performs the following duties

and responsibilities:
(1) The primary duty consists of the performance of work directly related to
management policies of their employer;
(2) Customarily and regularly exercise discretion and independent judgment;
(3)

Further, similar to managerial employees, officers and members of the managerial

staff are not entitled to the provisions on labor standards. For example, a supervisor
even holding such title but he exercises independent judgment results in him being
considered a member of the managerial staff. (Pearanda v. Baganga Plywood
Corporation, supra.)

Previous payment of benefits to managerial employees do not ripen to a legal claim

(i) Regularly and directly assist a proprietor or a managerial employee whose
primary duty consists of the management of the establishment in which he is
employed or subdivision thereof; or
(ii) execute under general supervision work along specialized or technical
lines requiring special training, experience, or knowledge; or
(iii) execute under general supervision special assignments and tasks; and,

(4) Who not devote more than 20 percent of their hours worked in a workweek to
activities which are not directly and closely related to the performance of the worked
described in Nos. (1), (2), and (3). (IMPLEMENTING RULES OF BOOK III OF THE LABOR
CODE, Section 2(c), Rule I.)
If a supervisory employee exercises the above-mentioned duties and responsibilities,
the law considers him a managerial employee.
No Labor Standards for Managerial Employees
Managerial employees and members of the managerial staff are exempted from the
provisions of the Labor Code on labor standards. (Pearanda v. Baganga Plywood
Corporation, G.R. No. 159577, 03 May 2006)
That is to say, managerial employees are excluded from the rules on holiday,
overtime, rest day, night shift differential, and service incentive leave (Salazar v.
NLRC, H.L. Carlos Construction Co. Inc., G.R. No. 109210, 17 April 1996, cf.Clientlogic
Philippines, Inc., v. Castro, G.R. No. 186070). Accordingly, they are not entitled to
holiday pay, overtime pay, premium pay, night shift differential pay, and service
incentive leave.

Article 82 of the Labor Code states that the provisions of the Labor Code on working
conditions and rest periods shall not apply to managerial employees. The other
provisions in the Title include normal hours of work (Article 83), hours worked (Article
84), meal periods (Article 85), night shift differential (Article 86), overtime work
(Article 87), undertime not offset by overtime (Article 88), emergency overtime work
(Article 89), and computation of additional compensation (Article 90). It is thus clear
that, generally, managerial employees such as respondents are not entitled to
overtime pay for services rendered in excess of eight hours a day (San Miguel
Corporation v. NumerianoLayoc, Jr., G.R. No. 149640, 19 October 2007)

May the payment of overtime benefits to a managerial employee ripen to a legal

claim? No. Despite the previous payment by the employer of the holiday pay,
managerial employees cannot have a legal claim to overtime benefits as they are
expressly exempted.
That petitioner was paid overtime benefits does not automatically and necessarily
denote that petitioner is entitled to such benefits. Art. 82 of the Labor Code
specifically delineates who are entitled to the overtime premiums and service
incentive leave pay provided under Art. 87, 93, 94 and 95 of the Labor Code and the
exemptions thereto. As previously determined, petitioner falls under the exemptions
and therefore has no legal claim to the said benefits. It is well and good that petitioner
was compensated for his overtime services. However, this does not translate into a
right on the part of petitioner to demand additional payment when, under the law,
petitioner is clearly exempted therefrom. (Salazar v. NLRC, H.L. Carlos Construction
Co. Inc., supra.)

This being the case, the rule on company practice resulting in a vested right does not
apply to managerial employees.

Payment of benefits dependent on company policy or agreement

Not being entitled to the above-mentioned benefits, the managerial employee may
only be entitled thereto only if there is a company policy on the matter or they were
agreed upon, viz:

McLeod is not entitled to payment of vacation leave and sick leave as well as to
holiday pay. Article 82, Title I, Book Three of the Labor Code, on Working Conditions
and Rest Periods,
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.
(Emphasis supplied)

As Vice President/Plant Manager, McLeod is a managerial employee who is excluded

from the coverage of Title I, Book Three of the Labor Code. McLeod is entitled to
payment of vacation leave and sick leave only if he and PMI had agreed on it. The
payment of vacation leave and sick leave depends on the policy of the employer or
the agreement between the employer and employee. In the present case, there is no
showing that McLeod and PMI had an agreement concerning payment of these
benefits. (McLeod v. NLRC, Filpinas Synthetic Fiber Corporation, G.R. No. 146667, 23
January 2007)

27. Makati Haberdashery v NLRC

Management's Right to Dismiss Employees
The law in protecting the rights of the laborer authorizes neither oppression nor selfdestruction of the employer.
While the Constitution is committed to the policy of social justice and the protection of
the working class, it should not be supposed that every labor dispute will be
automatically decided in favor of labor. Management also has its own rights, which as
such are entitled to respect and enforcement in the interest of simple fair play. Out of
its concern for those with less privileges in life, the Supreme Court has inclined more
often than not toward the worker and upheld his cause in his conflicts with the
employer. Such favoritism, however, has not blinded the Court to rule that justice is in
every case for the deserving, to be dispensed in the light of the established facts and
applicable law and doctrine. (Mercury Drug Corporation vs. National Labor Relations
Commission, G.R. No. 75662, Sept. 15, 1989)
No employer may rationally be expected to continue in employment a person whose
lack of morals, respect and loyalty to his employer, regard for his employer's rules and
appreciation of the dignity and responsibility of his office, has so plainly and
completely been bared. (Makati Haberdashery, Inc. vs. National Labor Relations
Commission, G.R. No. 83380-81, Nov. 15, 1989)
The right of the company to dismiss its employees is a measure of self-protection.
(Reyes vs. Minister of Labor, G.R. No. 48705, Feb. 9, 1989)
29. Supreme Steel v. NagkakaisangManggagawa
G.R. No. 185556: March 28, 2011
NACHURA,J.:
FACTS:Petitioner Supreme Steel Pipe Corporation is a domestic corporation engaged
in the business of manufacturing steel pipes for domestic and foreign markets.
Respondent NagkakaisangManggagawa ng Supreme Independent Union is the
certified
bargaining
agent
of
petitioners
rank-and-file
employees.

HELD: LABOR LAW

CBA is the law between the parties and compliance therewith is mandated by the
express policy of the law. If the terms of a CBA are clear and there is no doubt as to
the intention of the contracting parties, the literal meaning of its stipulation shall
prevail.
Upon these well-established precepts, we sustain the CAs findings and conclusions on
all the issues, except the issue pertaining to the denial of the COLA under Wage Order
No. RBIII-10 and 11 to the employees who are not minimum wage earners.
The wording of the CBA on general wage increase cannot be interpreted any other
way: The CBA increase should be given to all employees "over and above" the amount
they are receiving, even if that amount already includes an anniversary increase.
Stipulations in a contract must be read together, not in isolation from one another.
Clearly then, even if petitioner had already awarded an anniversary increase to its
employees, such increase cannot be credited to the "contractual" increase as
provided in the CBA, which is considered "separate and distinct."
Petitioner claims that it has been the company practice to offset the anniversary
increase with the CBA increase. It however failed to prove such material fact.
Company practice, just like any other fact, habits, customs, usage or patterns of
conduct must be proven. The offering party must allege and prove specific, repetitive
conduct that might constitute evidence of habit,or company practice. Evidently, the
pay slips of the four employees do not serve as sufficient proof.
Petitioners excuse in not providing a shuttle service to its employees is unacceptable.
In fact, it can hardly be considered as an excuse. Petitioner simply says that it is
difficult to implement the provision. It relies on the fact that "no time element is
explicitly stated in the CBA within which to fulfill the undertaking." We cannot allow
petitioner to dillydally in complying with its obligation and take undue advantage of
the fact that no period is provided in the CBA. Petitioner should recondition the
company vehicle at once, lest it be charged with and found guilty of unfair labor
practice.
Petitioner gave a narrow construction to the wording of the CBA when it denied (a)
reimbursement for the first-aid medicines taken by Rodrigo Solitario when he was
injured during the company sportsfest and the transportation cost incurred by Alberto
Guevara and Job Canizares in going to the hospital, (b) payment of the wages of
certain employees during the time they spent at the grievance meetings, and (c)
payment of the employees wages during the brownout that occurred on July 25, 2002.
As previously stated, the CBA must be construed liberally rather than narrowly and
technically.

Respondent filed a notice of strike with the National Conciliation and Mediation Board
on the ground that petitioner violated certain provisions of the CBA. The parties failed
to settle their dispute. Consequently, the Secretary of Labor certified the case to the
NLRC for compulsory arbitration pursuant to Article 263(g) of the Labor Code.
Respondent
cited
eleven
violations
committed
by
petitioner.

We likewise agree with the CA on the issue of nonpayment of the time-off for
attending grievance meetings. The intention of the parties is obviously to compensate
the employees for the time that they spend in a grievance meeting as the CBA
provision categorically states that the company will pay the employee "a paid time-off
for handling of grievances, investigations, labor-management conferences." It does
not make a qualification that such meeting should be held during office hours or
within the company premises.

Out of the eleven issues raised by respondent, eight were decided in its favor; two
(denial of paternity leave benefit and discrimination of union members) were decided
in favor of petitioner; while the issue on visitors free access to company premises was
deemed
settled
during
the
mandatory
conference.

On the issue of contracting-out labor, we sustain the CA. Petitioner, in effect, admits
having hired "temporary" employees, but it maintains that it was an exercise of
management prerogative, necessitated by the increase in demand for its product.

On appeal, the CA affirmed the NLRC decision. Upon denial of its motion for
reconsideration, petitioner filed this petition for review on certiorari, contending that
the CA erred in finding that it violated certain provisions of the CBA.
ISSUE: Whether or not petitioner violated certain provisions of the CBA

Indeed, jurisprudence recognizes the right to exercise management prerogative.

Labor laws also discourage interference with an employer's judgment in the conduct
of its business. For this reason, the Court often declines to interfere in legitimate
business decisions of employers. The law must protect not only the welfare of
employees, but also the right of employers.However, the exercise of management

10

prerogative is not unlimited. Managerial prerogatives are subject to limitations

provided by law, collective bargaining agreements, and general principles of fair play
and justice.
The implementation of the COLA under Wage Order No. RBIII-10 across the board,
which only lasted for less than a year, cannot be considered as having been practiced
"over a long period of time." While it is true that jurisprudence has not laid down any
rule requiring a specific minimum number of years in order for a practice to be
considered as a voluntary act of the employer, under existing jurisprudence on this
matter, an act carried out within less than a year would certainly not qualify as such.
Hence, the withdrawal of the COLA Wage Order No. RBIII-10 from the salaries of nonminimum wage earners did not amount to a "diminution of benefits" under the law.
Hence, the order for petitioner to continue implementing Wage Order No. RBIII-10 and
11 across the board is SET ASIDE.

ISSUE: WON the refusal of private respondents to work under the lawful orders of
AKELCO management are covered by the no work, no pay principle (thus not
entitled to the claim for unpaid wages)

RULING: The above bases of the NLRC does not constitute substantial evidence to
support the conclusion that private respondents are entitled to the payment of wages
from June 16, 1992 to March18, 1993. Substantial evidence is that amount of relevant
evidence which a reasonable mind might accept as adequate to justify a conclusion.
These evidences relied upon by public respondent did not establish the fact that
private respondents actually rendered services in the Kalibo office during the stated
period.

PARTLY GRANTED
31. Aklan Electric Corp. Inc. vs NLRC
FACTS: January 22, 1991 by way of a resolution of the Board of Directors of AKELCO it
allowed the temporary holding of office at Amon Theater, Kalibo, Aklan upon the
recommendation of Atty. LeovigildoMationg, then project supervisor, on the ground
that the office at Lezo, Aklan was dangerous and unsafe. Majority of the employees
including the herein complainants, continued to report for work at Lezo, Aklan and
were paid of their salaries. The complainants claimed that transfer of office from Lezo,
Aklan to Kalibo, Aklan was illegal because it failed to comply with the legal
requirements under P.D. 269, thus the they remained and continued to work at the
Lezo Office until they were illegally locked out therefrom by the respondents. Despite
the illegal lock out however, complainants continued to report daily to the location of
the Lezo Office, prepared to continue in the performance of their regular duties.
Complainants who continuously reported for work at Lezo, Aklan were not paid their
salaries from June 1992 up to March 18, 1993.

LA dismissed the complaints. NLRC reversed and set aside the LAs decision and
RULING that private respondents are entitled to unpaid wages.

NLRC based its conclusion on the following: (a) the letter of Leyson, Office Manager of
AKELCO addressed to AKELCOs General Manager, Atty. Mationg, requesting for the
payment of private respondents unpaid wages from June 16, 1992 to March18, 1993;
(b) the memorandum of said Atty. Mationg in answer to the letter request of Leyson
where he made an assurance that he will recommend such request; (c) the private
respondents own computation of their unpaid wages.Petitioner AKELCO claims compensable service is best shown by timecards, payslips
and other similar documents and it was an error for public respondent to consider the
computation of the claims for wages and benefits submitted merely by private
respondents as substantial evidence

It has been established that the petitioners business office was transferred to Kalibo
and all its equipments, records and facilities were transferred thereat and that it
conducted its official business in Kalibo during the period in question. It was
incumbent upon private respondents to prove that they indeed rendered services for
petitioner, which they failed to do.

It would neither be fair nor just to allow private respondents to recover something
they have not earned and could not have earned because they did not render services
at the Kalibo office during the stated period.

31. Aklan Electric Corp 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 LezoAklan 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

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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 burden of evidence lies with the party who asserts the affirmative
allegation, the plaintiff or complainant has to prove his allegations in the complaint.

At the completion of the project, Rada was terminated as his employment was coterminous with the project. He later sued Philnor for non payment of separation pay
and overtime pay. He said he is entitled to be paid OT pay because he uses extra time
to get to the project site from his home and from the project site to his home
everyday in total, he spends an average of 3 hours OT every day.

32. Arica v NLRC

Teofilo Arica et al and 561 others sued Standard Fruits Corporation (STANFILCO)
Philippines for allegedly not paying the workers for their assembly time which takes
place every work day from 5:30am to 6am. The assembly time consists of the roll call
of the workers; their getting of assignments from the foreman; their filling out of the
Laborers Daily Accomplishment Report; their getting of tools and equipments from
the stockroom; and their going to the field to work. The workers alleged that this is
necessarily and primarily for STANFILCOs benefit.

ISSUE: Whether or not Rada is entitled to separation pay and OT pay.

ISSUE: Whether or not the workers assembly time should be paid.

HELD: No. The thirty minute assembly time long practiced and institutionalized by
mutual consent of the parties under Article IV, Section 3, of the Collective Bargaining
Agreement cannot be considered as waiting time within the purview of Section 5,
Rule I, Book III of the Rules and Regulations Implementing the Labor Code . . .

Furthermore, the thirty (30)-minute assembly is a deeply-rooted, routinary practice of

the employees, and the proceedings attendant thereto are not infected with
complexities as to deprive the workers the time to attend to other personal pursuits.
In short, they are not subject to the absolute control of the company during this
period, otherwise, their failure to report in the assembly time would justify the
company to impose disciplinary measures.

HELD: Separation pay NO. Overtime pay Yes.

Separation Pay
The SC ruled that Rada was a project employee whose work was coterminous with the
project for which he was hired. Project employees, as distinguished from regular or
non-project employees, are mentioned in Section 281 of the Labor Code as those
where the employment has been fixed for a specific project or undertaking the
completion or termination of which has been determined at the time of the
engagement of the employee.

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

OT Pay
33. Rada v NLRC
In 1977, Hilario 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 recontracted 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.

Rada is entitled to OT pay. The fact that he picks up employees of Philnor at certain
specified points along EDSA in going to the project site and drops them off at the
same points on his way back from the field office going home to Marikina, Metro
Manila is not merely incidental to Radas job as a driver. On the contrary, said
transportation arrangement had been adopted, not so much for the convenience of
the employees, but primarily for the benefit of Philnor. As embodied in Philnors
memorandum, they allowed their drivers to bring home their transport vehicles in
order for them to provide a timely transport service and to avoid delay not really so
that the drivers could enjoy the benefits of the company vehicles nor for them to save
on fair.

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