Académique Documents
Professionnel Documents
Culture Documents
COLLEGE OF LAW
LABOR STANDARDS
(MIDTERMS CASE DIGEST COMPILATION)
A.Y 2011-2012
Page
Table of Contents
1. APPLICABLE LAWS....................................................................
2. BASIC PRINCIPLES....................................................................
Singer Sewing Machine vs. NLRC................................................
Manila Golf Club vs. IAC..............................................................
Encyclopedia Britanica vs. NLRC.................................................
Carungcong vs. Sunlife...............................................................
Ramos vs. CA............................................................................ 10
Sonza vs. ABS-CBN...................................................................11
Lazaro vs. Social Security Commission.....................................13
Phil. Global Comm. vs. De Vera.................................................13
ABS-CBN vs. Nazareno..............................................................14
Francisco vs. NLRC....................................................................16
Nogales et. al. vs. Capitol Medical Center et. al........................17
Coca-Cola Bottlers Phils. vs. Dr. Climaco...................................18
Calamba Medical Center vs. NLRC et. al...................................19
Escasinas et. al. vs. Shangri-la..................................................21
Tongko vs. The Manufacturers Life Insurance Co., Inc.
November 7, 2008....................................................................22
3. HIRING OF EMPLOYEES...........................................................25
Ollendorf vs. Abrahanson..........................................................25
Del Castillo vs. Richmond.........................................................26
Balahadia, A. (USC-LLB 2, EH402)
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1. APPLICABLE LAWS
2. BASIC PRINCIPLES
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year from his separation from work before he decided to file his
claims.
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Carungcong
promptly
instituted
proceedings
for
vindication in the Arbitration Branch of the National Labor
Relations Commissions on January 16, 1990.
There she
succeeded in obtaining a favorable judgment. Labor Arbiter
found that there existed an employer-employee relationship
between her and Sun Life. On appeal, the National Labor
Relations Commission reversed the Arbiters judgment.
It
affirmed that no employment relationship existed between
Carungcong and Sun Life.
ISSUE:
Whether or not there exists an employer-employee
relationship between the parties.
RULING:
SC held that Carungcong is not an employee of Sun Life
Co. She was an independent contractor.
Noteworthy is that this last agreement which emphasized,
like the Career Agents or Unit Managers Agreement first
signed by her, that in performance of her duties defined herein.
Carungcong would be considered an independent contractor
and not an employee of Sun Life, and that under no
circumstance shall the New Business Manager and/or his
employees be considered employees of Sun Life.
Carungcong is an independent contractor. It was indicated
in the very face of the contract. The rules and regulations of the
company is not sufficient to establish an employer-employee
relationship. It does not necessarily create any employeremployee relationship where the employers controls have to
interfere in the methods and means by which employee would
like employ to arrive at the desired results.
Carungcong admitted that she was free to work as she
pleases, at the place and time she felt convenient for her to do
so. She was not paid to a fixed salary and was mainly paid by
commissions depending on the volume of her performance.
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Ramos vs. CA
G.R. No. 124354; April 11, 2002
FACTS:
Petitioner Erlinda Ramos, after seeking professional
medical help, was advised to undergo an operation for the
removal of a stone in her gall bladder (cholecystectomy).
She was referred to Dr. Hosaka, a surgeon, who agreed to
perform the operation on her. The operation was scheduled
for June 17, 1985 at 9:00 in the morning at private
respondent De Los Santos Medical Center (DLSMC). Since
neither petitioner Erlinda nor her husband, petitioner
Rogelio, knew of any anesthesiologist, Dr. Hosaka
recommended to them the services of Dr. Gutierrez. On the
following day, she was ready for operation as early as 7:30
am. Around 9:30, Dr. Hosaka has not yet arrived. By 10 am,
Rogelio wanted to pull out his wife from the operating room.
Dr. Hosaka finally arrived at 12:10 pm more than 3 hours of
the scheduled operation.
Dr. Guiterres tried to intubate Erlinda. The nail beds of
Erlinda were bluish discoloration in her left hand. At 3 pm,
Erlinda was being wheeled to the Intensive care Unit and
stayed there for a month. Since the ill-fated operation,
Erlinda remained in comatose condition until she died.
The family of Ramos sued them for damages.
ISSUE:
Whether or not there exists an employer-employee
relationship between the medical center and Drs. Hosaka and
Guiterrez.
RULING:
SC ruled that there was no employee-employer
relationship between de Los Santos Medical Center and Drs.
Hosaka and Gutierrez.
After a careful consideration of the arguments raised by
DLSMC, the Court finds that respondent hospitals position on
this issue is meritorious. There is no employer-employee
Balahadia, A. (USC-LLB 2, EH402)
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for Royal Star from April of 1979 to March of 1986, Lazaro had
failed during the said period, to report her to the SSC for
compulsory coverage or remit Laudato's social security
contributions.
ISSUE:
Whether or not there exists an employee-employer
relationship between Laudato and Royal Star Marketing.
RULING:
SC ruled that there exists such relationship between the
parties.
It is an accepted doctrine that for the purposes of
coverage under the Social Security Act, the determination of
employer-employee relationship warrants the application of the
"control test," that is, whether the employer controls or has
reserved the right to control the employee, not only as to the
result of the work done, but also as to the means and methods
by which the same is accomplished.
Suffice it to say, the fact that Laudato was paid by way of
commission does not preclude the establishment of an
employer-employee relationship. The relevant factor remains,
as stated earlier, whether the "employer" controls or has
reserved the right to control the "employee" not only as to the
result of the work to be done but also as to the means and
methods by which the same is to be accomplished.
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FACTS:
Angelina Francisco was hired by Kasei Corporation during
the incorporation stage. She was designated as accountant and
corporate secretary and was assigned to handle all the
accounting needs of the company. She was also designated as
Liason Officer to the City of Manila to secure permits for the
operation of the company.
In 1996, Petitioner was designated as Acting Manager. She
was assigned to handle recruitment of all employees and
perform management administration functions. In 2001, she
was replaced by Liza Fuentes as Manager. Kasei Corporation
reduced her salary to P2,500 per month which was until
September. She asked for her salary but was informed that she
was no longer connected to the company. She did not anymore
report to work since she was not paid for her salary. She filed
an action for constructive dismissal with the Labor Arbiter.
ISSUE:
Whether
relationship.
or
not
there
was
an
employer-employee
RULING:
SC held that there was such relationship. Francisco was
constructively dismissed. To ascertain if such relationship
exists, the Court used two-tiered testcontrol test and
economic reality test.
The court held that in this jurisdiction, there has been no
uniform test to determine the existence of an employeremployee relation. Generally, courts have relied on the socalled right of control test where the person for whom the
services are performed reserves a right to control not only the
end to be achieved but also the means to be used in reaching
such end. In addition to the standard of right-of-control, the
existing economic conditions prevailing between the parties,
like the inclusion of the employee in the payrolls, can help in
determining
the
existence
of
an
employer-employee
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The better approach would therefore be to adopt a twotiered test involving: (1) the putative employers power to
control the employee with respect to the means and methods
by which the work is to be accomplished; and (2) the
underlying economic realities of the activity or relationship.
The court observed the need to consider the existing
economic conditions prevailing between the parties, in addition
to the standard of right-of-control like the inclusion of the
employee in the payrolls, to give a clearer picture in
determining
the
existence
of
an
employer-employee
relationship based on an analysis of the totality of economic
circumstances of the worker.
Thus, the determination of the relationship between
employer and employee depends upon the circumstances of
the whole economic activity, such as: (1) the extent to which
the services performed are an integral part of the employers
business; (2) the extent of the workers investment in
equipment and facilities; (3) the nature and degree of control
exercised by the employer; (4) the workers opportunity for
profit and loss; (5) the amount of initiative, skill, judgment or
foresight required for the success of the claimed independent
enterprise; (6) the permanency and duration of the relationship
between the worker and the employer; and (7) the degree of
dependency of the worker upon the employer for his continued
employment in that line of business. The proper standard of
economic dependence is whether the worker is dependent on
the alleged employer for his continued employment in that line
of business.
By applying the control test, there is no doubt that
petitioner is an employee of Kasei Corporation because she was
under the direct control and supervision of Seiji Kamura, the
corporations Technical Consultant. It is therefore apparent that
petitioner
is
economically
dependent
on
respondent
corporation for her continued employment in the latters line of
business.
There can be no other conclusion that petitioner is an
employee of respondent Kasei Corporation. She was selected
and engaged by the company for compensation, and is
Balahadia, A. (USC-LLB 2, EH402)
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FACTS:
Registered nurses Jeromie D. Escasinas and Evan Rigor
Singco (petitioners) were engaged in 1999 and 1996,
respectively, by Dr. Jessica Joyce R. Pepito (respondent doctor)
to work in her clinic at respondent Shangri-las Mactan Island
Resort (Shangri-la) in Cebu of which she was a retained
physician.
In late 2002, petitioners filed with the NLRC a complaint
for regularization, underpayment of wages, non-payment of
holiday pay, night shift differential and 13th month pay
differential against respondents, claiming that they are regular
employees of Shangri-la. Shangri-la claimed, however, that
petitioners were not its employees but of respondent doctor
whom it retained via Memorandum of Agreement (MOA)
pursuant to Article 157 of the Labor Code, as amended.
Respondent doctor for her part claimed that petitioners were
already working for the previous retained physicians of Shangrila before she was retained by Shangri-la; and that she
maintained petitioners services upon their request.
ISSUE:
Whether or not there was an employee-employer
relationship between Shangri-La and the petitioners.
Whether or not Dr. Pepito is an independent
contractor
RULING:
SC ruled that there no such relationship. The petitioners
are under the direct supervision of Dr. Pepito, an independent
contractor.
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FACTS:
Respondent was engaged as part-time consultant on retainer
basis by petitioner. As a consultant on retainer basis,
respondent assisted petitioner's retained legal counsel with
matters pertaining to the prosecution of cases against illegal
surface occupants within the area covered by the company's
mineral claims. Respondent was likewise tasked to perform
liaison work with several government agencies, which he said
was his expertise.Petitioner did not require respondent to report
to its office on a regular basis, except when occasionally
requested by the management to discuss matters needing his
expertise as a consultant. As payment for his services,
respondent received a retainer fee of P3,000.00 a month. The
said arrangement continued for the next eleven years.
Sometime thereafter, since respondent was getting old, he
requested that petitioner cause his registration with the Social
Security System (SSS), but petitioner did not accede to his
request. He later reiterated his request but it was ignored by
petitioner considering that he was only a retainer/consultant.
On the same date petitioner, issued a memorandum advising
respondent that within 30 days from receipt thereof, petitioner
is terminating his retainer contract with the company since his
services are no longer necessary. Respondent filed a complaint
for illegal dismissal, unfair labor practice, underpayment of
wages, non-payment of 13th month pay, vacation pay, and sick
leave pay with the National Labor Relations Commission
(NLRC).
ISSUE:
Whether or not there existed an employer-employee
relationship between the petitioner and respondent.
Balahadia, A. (USC-LLB 2, EH402)
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HELD:
To ascertain the existence of an employer-employee
relationship jurisprudence has invariably adhered to the fourfold test, to wit:
(1) the selection and engagement of the employee;
(2) the payment of wages;
(3) the power of dismissal; and
(4) the power to control the employee's conduct, or the
so-called "control test."
Of these four, the last one is the most important. The so-called
"control test" is commonly regarded as the most crucial and
determinative indicator of the presence or absence of an
employer-employee relationship. Under the control test, an
employer-employee relationship exists where the person for
whom the services are performed reserves the right to control
not only the end achieved, but also the manner and means to
be used in reaching that end. Applying the aforementioned
test, an employer-employee relationship is apparently absent in
the case at bar. Among other things, respondent was not
required to report everyday during regular office hours of
petitioner. Respondent's monthly retainer fees were paid to him
either at his residence or a local restaurant. More importantly,
petitioner did not prescribe the manner in which respondent
would accomplish any of the tasks in which his expertise as a
liaison officer was needed; respondent was left alone and given
the freedom to accomplish the tasks using his own means and
method. Respondent was assigned tasks to perform, but
petitioner did not control the manner and methods by which
respondent performed these tasks. Verily, the absence of the
element of control on the part of the petitioner engenders a
conclusion that he is not an employee of the petitioner.
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FACTS:
Petitioners assert that they were hired by respondents, as the
official masiador and sentenciador, respectively, of the cockpit
sometime in 1993.
Amasiador calls and takes the bets from the gamecock owners
and other bettors and orders the start of the cockfight. He also
distributes the winnings after deducting the arriba, or the
commission for the cockpit. Meanwhile, as the sentenciador
oversees the proper gaffing of fighting cocks, determines the
fighting cocks' physical condition and capabilities to continue
the cockfight, and eventually declares the result of the
cockfight.
For their services as masiador and sentenciador, Semblante
receives PhP2,000 per week or a total of PhP8,000 per month,
while Pilar gets PhP3,500 a week or PhP14,000 per month. They
work every Tuesday, Wednesday, Saturday, and Sunday every
week, excluding monthly derbies and cockfights held on special
holidays. Their working days start at 1:00 p.m. and last until
12:00 midnight, or until the early hours of the morning
depending on the needs of the cockpit. Petitioners had both
been issued employees' identification cards that they wear
every time they report for duty. They alleged never having
incurred any infraction and/or violation of the cockpit rules and
regulations.
On November 14, 2003, however, petitioners were denied entry
into the cockpit upon the instructions of respondents, and were
informed of the termination of their services effective that date.
Balahadia, A. (USC-LLB 2, EH402)
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HELD:
To determine the existence of an employer-employee
relationship, case law has consistentlyapplied the four-fold test,
to wit: (a) the selectionand engagement of the employee; (b)
the paymentof wages; (c) the power of dismissal; and (d)
theemployer's power to control the employee onthe means and
methods by which the work isaccomplished. The so-called
"control test" is themost important indicator of the presence
orabsence of an employer-employee relationship.
In the case at bar, the petitioner, a basketballreferee of the
PBA, is an independent contractor.There was no control over
the means and methodsby which petitioner performs his work
as a refereeofficiating a PBA basketball game. The
contractualstipulations in the retainer contracts do notpertain
to, much less dictate, how and whenpetitioner will blow the
whistle and make calls.On the contrary, they merely serve as
rules ofconduct or guidelines in order to maintain theintegrity
of the professional basketball league.Moreover, the following
circumstances indicatethat petitioner is an independent
contractor: (1)the referees are required to report for work
onlywhen PBA games are scheduled, which is threetimes a
week spread over an average of only 105playing days a year,
and they officiate games atan average of two hours per game;
and (2) theonly deductions from the fees received by
thereferees are withholding taxes. In other words,unlike regular
employees who ordinarily reportfor work eight hours per day for
five days aweek, petitioner is required to report for workonly
when PBA games are scheduled or threetimes a week. In
addition, there are no deductionsfor contributions to the Social
Security System,Philhealth or Pag-Ibig, which are the
usualdeductions from employees' salaries. Theseundisputed
circumstances buttress the fact thatpetitioner is an
independent contractor, and notan employee of respondents.
Furthermore, theapplicable foreign case law declares that a
Balahadia, A. (USC-LLB 2, EH402)
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LIRIO V. GENOVIA
GR No. 169757
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3. HIRING OF EMPLOYEES
Ollendorf vs. Abrahanson
G.R. No. 13228; September 13, 1918
FACTS:
The record discloses that Ollendorf is and for a long time
past has been engaged in the city of Manila and elsewhere in
the Philippines in the business of manufacturing ladies'
embroidered underwear for export. Ollendorf imports the
material from which this underwear is made and adopts
decorative designs which are embroidered upon it by Filipino
needle workers from patterns selected and supplied by him.
Most of the embroidery work is done in the homes of the
workers. The embroiderers employed by plaintiff are under
contract to work for plaintiff exclusively.
On September 1915, plaintiff and defendant entered into a
contract. Under the terms of this, agreement defendant entered
the employ of plaintiff and worked for him until April 1916,
when defendant, on account of ill health, left plaintiff's employ
and went to the United States. While in plaintiff's employ
defendant had access to all parts of plaintiff's establishment,
and had full opportunity to acquaint himself with plaintiff's
business methods and business connections. The duties
performed by him were such as to make it necessary that he
should have this knowledge of plaintiff s business. Defendant
had a general knowledge of the Philippine embroidery business
before his employment by plaintiff, having been engaged in
similar work for several years.
Some months after his departure, defendant returned to
Manila as the manager of the Philippine Underwear Company, a
corporation. This corporation does not maintain a factory in the
Philippine Islands, but sends material and embroidery designs
from New York to its local representative here who employs
Filipino needle workers to embroider the designs and make up
the garments in their homes. The only difference between
plaintiff's business and that of the firm by which the defendant
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The proper weight for a man of his height and body structure is
from 147 to 166 pounds, the ideal weight being 166 pounds, as
mandated by the Cabin and Crew Administration Manual of PAL.
The weight problem of petitioner dates back to 1984.
Back then, PAL advised him to go on an extended vacation
leave from December 29, 1984 to March 4, 1985 to address his
weight concerns. Apparently, petitioner failed to meet the
companys weight standards, prompting another leave
without pay from March 5, 1985 to November 1985.
After meeting the required weight, petitioner was allowed
to return to work. But petitioners weight problem recurred. He
again went on leave without pay from October 17, 1988 to
February 1989.
On April 26, 1989, petitioner weighed 209 pounds, 43
pounds over his ideal weight. In line with company policy, he
was removed from flight duty effective May 6, 1989 to July 3,
1989. He was formally requested to trim down to his ideal
weight and report for weight checks on several dates. He was
also told that he may avail of the services of the company
physician should he wish to do so. He was advised that his
case will be evaluated on July 3, 1989.
On February 25, 1989, petitioner underwent weight check.
It was discovered that he gained, instead of losing, weight. He
was overweight at 215 pounds, which is 49 pounds beyond the
limit. Consequently, his off-duty status was retained.
Despite efforts, he remained to be overweight based on
the companys weight standards. He was served Notice of
Administrative Charge for violation of company standards on
weight requirements. He did not deny his being overweight.
What he claimed, instead, is that his violation, if any, had
already been condoned by PAL since no action has been taken
by the company regarding his case since 1988. He also
claimed that PAL discriminated against him because the
company has not been fair in treating the cabin crew members
who are similarly situated.
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RULING:
SC ruled that there was unfair labor practice.
Without doubt, the act of compelling employees to sign an
instrument indicating that the employer observed labor
standards provisions of law when he might have not, together
with the act of terminating or coercing those who refuse to
cooperate with the employer's scheme constitutes unfair labor
practice. The first act clearly preempts the right of the hotel's
workers to seek better terms and conditions of employment
through concerted action. For refusing to cooperate with the
private respondent's scheme, petitioner was obviously held up
as an example to all of the hotel's employees, that they could
only cause trouble to management at great personal
inconvenience. Implicit in the act of petitioner's termination and
the subsequent filing of charges against her was the warning
that they would not only be deprived of their means of
livelihood, but also possibly, their personal liberty.
Granting that meals and lodging were provided and indeed
constituted facilities, such facilities could not be deducted
without the employer complying first with certain legal
requirements. Without satisfying these requirements, the
employer simply cannot deduct the value from the employee's
wages. 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. Finally, facilities must be charged at fair and
reasonable value. These requirements were not met in the
instant case.
More significantly, the food and lodging, or the electricity
and water consumed by the petitioner were not facilities but
supplements. A benefit or privilege granted to an employee for
the convenience of the employer is not a facility. The criterion
in making a distinction between the two not so much lies in the
kind (food, lodging) but the purpose. Considering that hotel
workers are required to work different shifts and are expected
to be available at various odd hours, their ready availability is a
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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:
Balahadia, A. (USC-LLB 2, EH402)
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RULING:
SC 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.
Millares et. al vs. NLRC
G.R. No. 122827; March 29, 1999
FACTS:
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of
Educators
vs.
FACTS:
International School, Inc., pursuant to Presidential Decree
732, is a domestic educational institution established primarily
for dependents of foreign diplomatic personnel and other
temporary residents. To enable the School to continue carrying
out its educational program and improve its standard of
instruction, Section 2(c) of the same decree authorizes the
School to employ its own teaching and management personnel
selected by it either locally or abroad, from Philippine or other
nationalities, such personnel being exempt from otherwise
applicable laws and regulations attending their employment,
except laws that have been or will be enacted for the protection
of employees.
The School hires both foreign and local teachers as
members of its faculty, classifying the same into two: (1)
foreign-hires and (2) local-hires. The School employs four tests
to determine whether a faculty member should be classified as
a foreign-hire or a local hire: (a) What is one's domicile? (b)
Where is one's home economy? (c) To which country does one
owe economic allegiance? (d) Was the individual hired abroad
specifically to work in the School and was the School
responsible for bringing that individual to the Philippines?
Should the answer to any of these queries point to the
Philippines, the faculty member is classified as a local hire;
otherwise, he or she is deemed a foreign-hire.
Balahadia, A. (USC-LLB 2, EH402)
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contend that private respondents were paid over and above the
minimum wage required for a retail establishment, thus the
Labor Arbiter is correct in ruling that private respondents claim
for underpayment has no factual and legal basis. Petitioners
claim that since private respondents alleged that petitioners
employed 24 workers, it was incumbent upon them to prove
such allegation which private respondents failed to do.
ISSUE:
Whether or not petitioner
application of minimum wage law.
is
exempted
from
the
RULING:
The contention of the petitioners that they are exempted
by the law must be proven. The petitioners have not
successfully shown that they had applied for the exemption.
R.A. No. 6727 known as the Wage Rationalization Act
provides for the statutory minimum wage rate of all workers
and employees in the private sector. Section 4 of the Act
provides for exemption from the coverage, thus: Sec. 4. (c)
Exempted from the provisions of this Act are household or
domestic helpers and persons employed in the personal service
of another, including family drivers. Also, retail/service
establishments regularly employing not more than ten (10)
workers may be exempted from the applicability of this Act
upon application with and as determined by the appropriate
Regional Board in accordance with the applicable rules and
regulations issued by the Commission.
Whenever an
application for exemption has been duly filed with the
appropriate Regional Board, action on any complaint for alleged
non-compliance with this Act shall be deferred pending
resolution of the application for exemption by the appropriate
Regional Board.
In the event that applications for exemptions are not
granted, employees shall receive the appropriate compensation
due them as provided for by this Act plus interest of one
percent (1%) per month retroactive to the effectivity of this Act.
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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 attorney's 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 of P63.00 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.
LA ruled that the respondents were regular employees and
were underpaid. However, the LA 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. These decisions
of the LA were affirmed by the NLRC, and subsequently by the
CA, on appeal. Hence, this petition.
ISSUE:
WON respondents were underpaid
WON the allowances should be added to their basic pay
HELD:
The petition is bereft of merit.
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While it is true that under Articles 129 and 217 of the Labor
Code, the Labor Arbiter has jurisdiction to hear and decide
cases where the aggregate money claims of each employee
exceeds P5,000.00, said provisions do not contemplate nor
cover the visitorial and enforcement powers of the Secretary of
Labor or his duly authorized representatives.
The Secretary of Labor, under Art. 106, LC, exercises quasijudicial power, at least to the extent necessary to determine
violations of labor standards provisions of the Code. He, or the
regional directors, can issue compliance orders and writs of
execution for the execution thereof. The Secretary or his duly
authorized representatives shall issue writs of execution to the
appropriate authority for the enforcement of their orders,
except in cases where the employer contests the finding of the
labor employment and enforcement officer and raises issues
supported by documentary proofs which were not considered in
the course of inspection.
Radyo
Phils.)
vs.
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employer-employee relationship
parties from the start.
between
the
evidentiary
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issue in the labor case. The rights and obligations of the parties
under those contracts may be enforced by a separate civil
action in the regular courts, not in the NLRC.
Five J Taxi vs. NLRC
G.R. No. 111474 August 22, 1994
FACTS:
Private respondents Domingo Maldigan and Gilberto
Sabsalon were hired by the petitioners as taxi drivers. Aside
from the daily "boundary", they were also required to pay
P20.00 for car washing, and to further make a P15.00 deposit to
answer for any deficiency in their "boundary," for every actual
working day.
ISSUE:
Whether or not the car wash payment is an illegal
deduction as contemplated in the Labor Code.
RULING:
SC held that the amount doled out was paid directly to the
person who washed the unit, thus we find nothing illegal in this
practice, much more to consider the amount paid by the driver
as illegal deduction in the context of the law. Consequently,
private respondents are not entitled to the refund of the P20.00
car wash payments they made. It will be noted that there was
nothing to prevent private respondents from cleaning the taxi
units themselves, if they wanted to save their P20.00.Car
washing after a tour of duty is a practice in the taxi industry,
and is, in fact, dictated by fair play.
Phil. Veterans Bank vs. NLRC
G.R. No. 130439 October 26, 1999
FACTS:
Due to financial losses, the Philippine Veterans Bank was
placed in receivership pursuant to the order of the Central Bank
Balahadia, A. (USC-LLB 2, EH402)
135 of 261
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FACTS:
Petitioner Manila Jockey Club Employees Labor UnionPTGWO and respondent Manila Jockey Club, Inc., a corporation
with a legislative franchise to conduct, operate and maintain
horse races, entered into a Collective Bargaining Agreement
(CBA). The CBA governed the economic rights and obligations
of respondents regular monthly paid rank-and-file employees.
In the CBA, the parties agreed to a 7-hour work schedule from
9:00 a.m. to 12:00 noon and from 1:00 p.m. to 5:00 p.m. on a
work week of Monday to Saturday, as contained under Section
1, Article IV, of the same CBA. All work performed in excess of
seven (7) hours work schedule and on days not included within
the work week shall be considered overtime and paid as such.
Except those monthly compensation which includes work
performed during Saturday, Sunday, and Holiday when races
Balahadia, A. (USC-LLB 2, EH402)
144 of 261
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ISSUE:
Whether or not the change in the work schedule violated
Article 100 of the Labor Code on the non-diminution of wages
and benefits guaranteed under the parties CBA.
RULING:
SC held in favor of Manila Jockey Club. It stated that the
work schedule is justified, it being a management prerogative.
Respondent, as employer, cites the change in the program
of horse races as reason for the adjustment of the employees
work schedule. It rationalizes that when the CBA was signed,
the horse races started at 10:00 a.m. When the races were
moved to 2:00 p.m., there was no other choice for
management but to change the employees' work schedule as
there was no work to be done in the morning. Evidently, the
adjustment in the work schedule of the employees is justified.
While it is true that Section 1, Article IV of the CBA provides for
a 7-hour work schedule from 9:00 a.m. to 12:00 noon and from
1:00 p.m. to 5:00 p.m. from Mondays to Saturdays, Section 2,
Article XI, however, expressly reserves on respondent the
prerogative to change existing methods or facilities to change
the schedules of work.
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ISSUE:
Whether or not the No Time Card Policy constitutes a
violation of Article 100 of the Labor Code.
RULING:
SC ruled in favor of the petitioners. Petitioners exercised
management prerogative in the implementation of the No
Time Card Policy.
As a general rule, managerial employees are not entitled
to overtime pay for services rendered in excess of eight hours a
day. Respondents failed to show that the circumstances of the
present case constitute an exception to this general rule.
Respondents assert that Article 100 of the Labor Code
prohibits the elimination or diminution of benefits. However,
contrary to the nature of benefits, petitioners did not freely give
the payment for overtime work to respondents. Petitioners
paid respondents overtime pay as compensation for services
rendered in addition to the regular work hours. Respondents
rendered overtime work only when their services were needed
after their regular working hours and only upon the instructions
of their superiors. Respondents even differ as to the amount of
overtime pay received on account of the difference in the
additional hours of services rendered.
Aside from their allegations, respondents were not able to
present anything to prove that petitioners were obliged to
permit respondents to render overtime work and give them the
corresponding overtime pay. Even if petitioners did not
institute a no time card policy, respondents could not demand
overtime pay from petitioners if respondents did not render
overtime work. The requirement of rendering additional service
differentiates overtime pay from benefits such as thirteenth
month pay or yearly merit increase. These benefits do not
require any additional service from their beneficiaries. Thus,
overtime pay does not fall within the definition of benefits
under Article 100 of the Labor Code.
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RULING:
SC ruled in favor of the respondents. The voluntary grant
of the benefits has been an established company practice. It
Balahadia, A. (USC-LLB 2, EH402)
149 of 261
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FACTS:
Petitioner Gualberto Aguanza was employed with respondent
company Asian Terminal, Inc. from April 15, 1989 to October
1997. He was initially employed as Derickman or Crane
Operator and was assigned as such aboard Bismark IV, a
floating crane barge owned by Asian Terminals, Inc. based at
the port of Manila. Aside from his basic pay, he received meal
allowance, fixed overtime pay and out-of port allowance [when
the barge is assigned outside Metro Manila].
Sometime in September 1997, the Bismark IV, together with its
crew, was temporarily assigned at the Mariveles Grains
Terminal in Mariveles, Bataan. Then, on October 20, 1997,
respondent James Keith issued a memo to the crew of Bismark
IV stating that the barge had been permanently transferred to
the Mariveles Grains terminal beginning October 1, 1997 and
because of that, its crew would no longer be entitled to out of
port benefits of 16 hours overtime and P200 a day out-of port
allowance.
Because of the said development, Aguanza questioned the
diminution of his benefits. Aguanza insisted on reporting to
work in Manila although his barge, Bismark IV, and its other
crew were already permanently based in Mariveles, Bataan.
Balahadia, A. (USC-LLB 2, EH402)
151 of 261
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FACTS:
Respondent Juan Taroy was hired by petitioner Genesis
Transport Service, Inc. (Genesis Transport) as driver on
commission basis at 9% of the gross revenue per trip.
On May 10, 2002, Taroy was, after due notice and hearing,
terminated from employment after an accident on April 20,
2002 where he was deemed to have been driving recklessly.
Taroy thus filed a complaint for illegal dismissal and payment of
service incentive leave pay, claiming that he was singled out
for termination because of his union activities, other drivers
who had met accidents not having been dismissed from
employment. Taroy later amended his complaint to implead his
herein co-respondent Unyon ng Malayang Manggagawa ng
Genesis Transport (the union) as complainant and add as
grounds of his cause of action unfair labor practice (ULP),
reimbursement of illegal deductions on tollgate fees, and
payment of service incentive leave pay.
Respecting the claim for refund of illegal deductions, Taroy
alleged that in 1997, petitioner started deducting from his
weekly earnings an amount ranging from P160 to P900
representing toll fees, without his consent and written
authorization as required under Article 113 of the Labor Code
and contrary to company practice; and that deductions were
also taken from the bus conductors earnings to thus result to
double deduction.
Genesis Transport countered that Taroy committed several
violations of company rules for which he was given warnings or
disciplined accordingly; that those violations, the last of which
was the April 20, 2002 incident, included poor driving skills,
tardiness, gambling inside the premises, use of shabu, smoking
while driving, insubordination and reckless driving; and that
Taroys dismissal was on a valid cause and after affording him
due process.
The Labor Arbiter rendered dismissing instant complaint for
illegal dismissal for lack of merit and was ordered to refund to
complainant the underpayment/differential due him as a result
of the deduction of the tollgate fees from the gross receipts.
The NLRC affirmed the Labor Arbiters decision with
modification. It deleted the award to Taroy of attorneys fees.
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SC RULING:
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8. PAYMENT OF WAGES
Congson vs. NLRC
G.R. No. 114250; April 5, 1995
FACTS:
Dominico C. Congson is the registered owner of Southern
Fishing Industry. Respondents were hired as piece-rate
employees uniformly paid at a rate of P1.00 per tuna weighing
thirty (30) to eighty (80) kilos per movement. They work for 7
days a week. Due to alleged scarcity of tuna, Congson notified
his proposal to reduce the rate-per-tuna movement. When they
reported the following day, they found out that they were
already replaced with new set of workers. They wanted to have
a dialogue with the management, but they waited in vain. Thus,
they filed a case before NLRC for underpayment of wages
(violation of the minimum wage law) and non-payment of
overtime pay, 13th month pay, holiday pay, rest day pay, and
five (5)-day service incentive leave pay; and for constructive
dismissal.
Petitioner conceded that his payment of wages falls below
the minimum wage law. He averred that NLRC should have
considered as forming a substantial part of private respondents'
total wages the cash value of the tuna liver and intestines
private respondents were entitled to retrieve. He argued that
the combined value of the cash wage and monetary value of
the tuna liver and intestines clearly exceeded the minimum
wage fixed by law.
Both the Labor Arbiter and the NLRC ruled in favor of the
respondents.
ISSUE:
Whether or not the form of payment by Congson is valid
pursuant to Article 102 of the Labor Code.
RULING:
Balahadia, A. (USC-LLB 2, EH402)
162 of 261
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9. CONDITIONS OF EMPLOYMENT
San Juan de Dios Hospital vs. NLRC
G.R. No. 126383; November 28, 1997
FACTS:
Petitioners, the rank-and-file employee-union officers and
members of San Juan De Dios Hospital Employees Association
sent a letter requesting and pleading for the expeditious
implementation and payment by respondent Juan De Dios
Hospital of the 40 HOURS/5-DAY WORKWEEK with
compensable weekly two (2) days off provided for by Republic
Act 5901 as clarified for enforcement by the Secretary of
Labors Policy Instructions No. 54. RA 5901 seeks to reduce the
number of hospital personnel, considering the nature of their
work, and at the same time guarantee the payment to them of
a full weekly wage for seven (7) days. Respondent hospital
failed to give a favorable response; thus, petitioners filed a
complaint regarding their claims for statutory benefits under
the above-cited law and policy issuance. Both Labor Arbiter and
NLRC dismissed the complaint.
ISSUE:
Whether or not the Policy Instructions No. 54 issued by
then Labor Secretary (now Senator) Franklin M. Drilon is valid.
RULING:
The interpretation of Labor Secretary Drilon is not valid.
A cursory reading of Article 83 of the Labor Code betrays
petitioners position that hospital employees are entitled to
a full weekly salary with paid two (2) days off if they have
completed the 40-hour/5-day workweek. What Article 83
merely provides are: (1) the regular office hour of eight hours a
day, five days per week for health personnel, and (2) where the
exigencies of service require that health personnel work for six
days or forty-eight hours then such health personnel shall be
entitled to an additional compensation of at least thirty percent
of their regular wage for work on the sixth day. There is
Balahadia, A. (USC-LLB 2, EH402)
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RULING:
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 going out of the premises as
long as they return to their posts on time. Private respondents
act, therefore, of going home to take his dinner does not
constitute abandonment.
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Book
III
of
the
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(c)
(1)
(2)
(3)
(2)
(3)
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in
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SECTION 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:
(c) Officers or members of a managerial staff if they
perform 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) [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 work-week to activities which are
not directly and closely related to the performance of
the work described in paragraphs (1), (2), and (3)
above.
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EXEMPTED EMPLOYERS
The following employers are still not covered by P.D. No. 851:
d.
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RULING:
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.
San Miguel Corp., vs. CA
G.R. No. 146775; Jan. 30, 2000
FACTS:
On 17 October 1992, the Department of Labor and
Employment conducted a routine inspection in the premises of
San Miguel Corporation in Sta. Filomena, Iligan City. In the
course of the inspection, it was discovered that there was
underpayment by SMC of regular Muslim holiday pay to its
employees. DOLE sent a copy of the inspection result to SMC
and it was received by and explained to its personnel officer
Elena dela Puerta.
SMC contested the findings and DOLE conducted summary
hearings on 19 November 1992, 28 May 1993 and 4 and 5
October 1993. Still, SMC failed to submit proof that it was
Balahadia, A. (USC-LLB 2, EH402)
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2.
Maundy Thursday
Movable Date
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Good Friday
Movable Date
4.
5.
Labor Day
6.
7.
8.
Bonifacio Day
November 30
9.
Christmas Day
December 25
Day)
May 1
December 30
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3.
To
manpower.
4.
evaluate
performance
of
machinery
and
fuel.
5.
To train new employees for effective and safety white
working.
6.
7.
To recommend personnel actions such as: promotion,
or disciplinary action.
8.
9.
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LEYECO
IV
FACTS:
On April 6, 1998, Leyte IV Electric Cooperative, Inc.
(petitioner) and Leyeco IV Employees Union-ALU (respondent)
entered into a Collective Bargaining Agreement (CBA) covering
petitioner rank-and-file employees, for a period of five (5) years
effective January 1, 1998. On June 7, 2000, respondent, through
its Regional Vice-President, Vicente P. Casilan, sent a letter to
petitioner demanding holiday pay for all employees, as
provided for in the CBA.
Petitioner, on the other hand, in its Position Paper, insisted
payment of the holiday pay in compliance with the CBA
provisions, stating that payment was presumed since the
formula used in determining the daily rate of pay of the
covered employees is Basic Monthly Salary divided by 30 days
or Basic Monthly Salary multiplied by 12 divided by 360 days,
thus with said formula, the employees are already paid their
regular and special days, the days when no work is done, the
51 un-worked Sundays and the 51 un-worked Saturdays.
ISSUE:
Whether or not Leyte IV Electric Cooperative is liable for
underpayment of holiday pay.
RULING:
The Voluntary Arbitrator gravely abused its discretion in
giving a strict or literal interpretation of the CBA provisions that
the holiday pay be reflected in the payroll slips. Such literal
Balahadia, A. (USC-LLB 2, EH402)
214 of 261
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their holiday pay. Thus, the Voluntary Arbitrator should not have
simply brushed aside petitioner's divisor formula. In granting
respondent's claim of non-payment of holiday pay, a "double
burden" was imposed upon petitioner because it was being
made to pay twice for its employees' holiday pay when
payment thereof had already been included in the computation
of their monthly salaries. Hence, the petition is granted.
Bahia Shipping Services vs. Chua
G.R. No. 162195; April 8, 2008
FACTS:
Private respondent Reynaldo Chua was hired by the
petitioner shipping company, Bahia Shipping Services, Inc., as a
restaurant waiter on board a luxury cruise ship liner M/S Black
Watch pursuant to a Philippine Overseas Employment
Administration (POEA) approved employment contract dated
October 9, 1996 for a period of nine (9) months from October
18, 1996 to July 17, 1997. On October 18, 1996, the private
respondent left Manila for Heathrow, England to board the said
sea vessel where he will be assigned to work. On February 15,
1997, the private respondent reported for his working station
one and one-half hours late. On February 17, 1997, the master
of the vessel served to the private respondent an official
warning-termination form pertaining to the said incident. On
March 8, 1997, the vessel's master, ship captain Thor Fleten
conducted an inquisitorial hearing to investigate the said
incident. Thereafter, on March 9, 1997, private respondent was
dismissed from the service on the strength of an unsigned and
undated notice of dismissal. An alleged record or minutes of the
said investigation was attached to the said dismissal notice.
On March 24, 1997, the private respondent filed a
complaint for illegal dismissal and other monetary claims. The
private respondent alleged that he was paid only US$300.00
per month as monthly salary for five (5) months instead of
US$410.00 as stipulated in his employment contract. Thus, he
claimed that he was underpaid in the amount of US$110.00 per
month for that same period of five (5) months. He further
Balahadia, A. (USC-LLB 2, EH402)
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assists
in
the
(4) that he does not devote twenty per cent of his time to
work other than those described above.
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had not yet reached the age of sixty (60) years. The Court
stresses that there is nothing to prevent petitioners from
voluntarily giving private respondents some financial assistance
on an ex gratia basis.
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able to prove that it has been its practice worldwide that the
notional salary of an employee is its basis in computing its
contribution to the retirement plan for a local employee
detailed abroad. It follows that the amount of retirement
benefits of a retiring employee assigned abroad is based on his
notional salary.
Sta. Catalina College vs. NLRC
G.R. No. 144483; November 19, 2003
FACTS:
In June 1955, Hilaria was hired as an elementary school
teacher at the Sta. Catalina College. In 1970, she applied for
and was granted a one year leave of absence without pay on
account of the illness of her mother. After the expiration in
1971 of her leave of absence, she had not been heard from by
Sta. Catalina College. In the meantime, she was employed as a
teacher at the San Pedro Parochial School during school year
1980-1981 and at the Liceo de San Pedro, Bian, Laguna during
school year 1981-1982.
In 1982, she applied anew at petitioner school which hired
her. On March 1997, during the 51st Commencement Exercises
of petitioner school, Hilaria was awarded a Plaque of
Appreciation for thirty years of service and P12,000.00 as
gratuity pay. On May 1997, Hilaria reached the compulsory
retirement age of 65. Retiring pursuant to Article 287 of the
Labor Code, as amended by Republic Act 7641, petitioner
school pegged her retirement benefits at P59,038.35,
computed on the basis of fifteen years of service from 1982 to
1997. Her service from 1955 to 1970 was excluded in the
computation, petitioner school having asserted that she had, in
1971, abandoned her employment. Hilaria insisted, that her
retirement benefits should be computed on the basis of her
thirty years of service, inclusive of the period from 1955 to
1970 and that the gratuity pay earlier given to her should not
be deducted there from.
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tenure. Article 287 of the Labor Code provides: Retirement Any employee may be retired upon reaching the retirement age
established in the collective bargaining agreement or other
applicable employment contract. By its express language, the
Labor Code permits employers and employees to fix the
applicable retirement age at below 60 years.
The rules and regulations of the plan show that
participation therein was not voluntary at all. Rule III of the
plan, on membership, stated:
SECTION 1 MEMBERSHIP, All full-time Filipino employees
of the University will automatically become members of
the Plan, provided, however, that those who have retired
from the University, even if rehired, are no longer eligible
for membership in the Plan. A member who continues to
serve the University cannot withdraw from the Plan.
SECTION 2 EFFECTIVITY OF MEMBERSHIP, Membership in
the Plan starts on the day a person is hired on a full-time
basis by the University.
SECTION 3 TERMINATION OF MEMBERSHIP, Termination
of membership in the Plan shall be upon the death of the
member, resignation or termination of employees
contract by the University, or retirement from the
University.
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15 years-19 years
20 years or more
15-19 years
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RULING:
This Court has held, in Philippine Duplicators that, the
salesmen's commissions, comprising a pre-determined
percentage of the selling price of the goods sold by each
salesman, were properly included in the term basic salary for
purposes of computing the 13th month pay. The salesmen's
commission are not overtime payments, nor profit-sharing
payments nor any other fringe benefit but a portion of the
salary structure which represents an automatic increment to
the monetary value initially assigned to each unit of work
rendered by a salesman.
Contrarily, in Boie-Takeda, the so-called commissions paid
to or received by medical representatives of Boie-Takeda
Chemicals or by the rank and file employees of Philippine Fuji
Xerox Co., were excluded from the term basic salary because
these were paid to the medical representatives and rank-andfile employees as productivity bonuses, which are generally
tied to the productivity, or capacity for revenue production, of a
corporation and such bonuses closely resemble profit-sharing
payments and have no clear direct or necessary relation to the
amount of work actually done by each individual employee.
Further, commissions paid by the Boie-Takeda Company to its
medical representatives could not have been sales
commissions in the same sense that Philippine Duplicators paid
the salesmen their sales commissions. Medical representatives
are not salesmen; they do not effect any sale of any article at
all.
In fine, whether or not a commission forms part of the
basic salary depends upon the circumstances or conditions for
its payment, which indubitably are factual in nature for they will
require a re-examination and calibration of the evidence on
record.
As to the main issue whether petitioner's commissions be
considered in the computation of his retirement benefits and
13th month pay, we rule in the negative. Article 287 of the
Labor Code, as amended by Republic Act No. 7641, otherwise
known as The New Retirement Law, 22 provides: Retirement.
Any employee may be retired upon reaching the retirement age
Balahadia, A. (USC-LLB 2, EH402)
252 of 261
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ISSUE:
Whether or not the grant of 13 th month pay, bonus, and
leave encashment in full regardless of actual service rendered
constitutes voluntary employer practice and, consequently,
whether or not the prorated payment of the said benefits
constitute diminution of benefits under Article 100 of the Labor
Code.
RULING:
Any benefit and supplement being enjoyed by employees
cannot be reduced, diminished, discontinued or eliminated by
the employer. The principle of non-diminution of benefits is
founded on the Constitutional mandate to "protect the rights of
workers and promote their welfare and to afford labor full
protection. Said mandate in turn is the basis of Article 4 of the
Labor Code which states that all doubts in the implementation
and interpretation of this Code, including its implementing rules
and regulations shall be rendered in favor of labor.
Jurisprudence is replete with cases which recognize the
right of employees to benefits which were voluntarily given by
the employer and which ripened into company practice. Thus in
DavaoFruits Corporation v. Associated Labor Unions, et al.
where an employer had freely and continuously included in the
computation of the 13th month pay those items that were
expressly excluded by the law, we held that the act which was
favorable to the employees though not conforming to law had
thus ripened into a practice and could not be withdrawn,
reduced, diminished, discontinued or eliminated. In Sevilla
Trading Company v. Semana, we ruled that the employers act
of including non-basic benefits in the computation of the 13 th
month pay was a voluntary act and had ripened into a company
practice which cannot be peremptorily withdrawn.
In the years 1992, 1993, 1994, 1999, 2002 and 2003,
petitioner had adopted a policy of freely, voluntarily and
consistently granting full benefits to its employees regardless of
the length of service rendered. True, there were only a total of
seven employees who benefited from such a practice, but it
was an established practice nonetheless. Jurisprudence has not
Balahadia, A. (USC-LLB 2, EH402)
255 of 261
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terminated on
or the same
RULING:
SC ruled in favor of the respondents.
Retirement is the result of a bilateral act of the parties, a
voluntary agreement between the employer and the employee
whereby the latter, after reaching a certain age, agrees to
Balahadia, A. (USC-LLB 2, EH402)
257 of 261
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