G.R. No.

L-13806
May 23, 1960
PRICE STABILIZATION CORPORATION, petitioner,
vs.
COURT OF INDUSTRIAL RELATIONS and PRISCO WORKER'S UNION, ET AL., respondents.
Govt. Corp. Counsel Simeon M. Gopengco and Lorenzo R. Mosqueda for petitioner.
Ezer R. Yutuc for the respondent CIR.
Vicente T. Ocampo for respondent Union.
BARRERA, J.:
This is a petition for review by certiorari taken by the Price Stabilization Corporation (PRISCO) from
the decision of the Court of Industrial Relations (in Case No. 840-V [6]) of December 27, 1957.
It appears that under date of February 15, 1955, respondent PRISCO Worker's Union, a labor
organization duly registered with the Department of Labor, filed with respondent court, a petition
praying that herein petitioner-employer PRISCO be ordered to pay its present employees, claimantsmembers of the said Union, their basic pay and at least 25 per cent additional compensation for one
hour overtime work they had previously rendered as security guards of petitioner, from April 17, 1953
to January 13, 1954, and the additional compensation of at least 25 per cent for the work they have
been rendering on Sundays and legal holidays, from March 7, 1954 and on.
On March 15, 1955, the petitioner filed an answer denying respondent Union's claim for payment of
one hour overtime work, asserting that such overtime, if rendered, not having been authorized;
although some of the said claimants had rendered work in Sundays and legal holidays, the same
had already been paid from March 6, 1954; and finally alleging that the same claim for work on
Sundays and legal holidays had already been withdrawn.
The case was thereafter heard and, after hearing, respondent court, on December 27, 1957, issued
an order requiring petitioner to pay the said claimants, members of respondent Union, their basic
pay and 25 per cent additional compensation for the one hour overtime work they had rendered from
April 16, 1953 to January 13, 1954. However, for lack of evidence and in view of a petition signed by
59 of the 131 claimants withdrawing their claim for pay for work performed on Sundays and legal
holidays, the court dismissed the second claim.
On January 8, 1958, petitioner corporation filed a motion for reconsideration of said order, which
motion was resolved by respondent court, en banc, as follows: 2 judges voting for straight denial; 2
judges voting for the setting aside of the order as null and void on the ground of lack of jurisdiction;
and 1 judge concurring in the denial of the motion for reconsideration, on the ground that the
question of lack of jurisdiction has not been raised in the pleading. As a result; petitioner corporation
has filed this present petition.
There are two questions of law to be determined in this case, to wit: (1) whether respondent court
had jurisdiction over the present claim for overtime pay filed by respondent Union; and (2) whether
the same court correctly applied Articles 1393 and 1396 to the new Civil Code to the case.
As to the first question, there still seems to be some lack of clear and definite understanding of the
jurisdiction of the Court of Industrial Relations, with regards to money claims of laborers or
employees against their employers. The fact that in the present case the judges themselves of the
Court of Industrial Relations are divided on this matter, attests to the existence of such
misapprehension. It is well therefore to review some of the leading decided cases touching on this
point, for the purpose of clarifying this fundamental question.
In the PAFLU vs. Tan Case,1 we held that the Court of Industrial Relations has jurisdiction over cases
(1) when the labor dispute affects an industry which is indispensable in the national interest and is so
certified by the President to the industrial court (Sec. 10, Rep. Act No. 875); (2) when the
controversy refers to the minimum wage under the Minimum Wage Law (Rep. Act No. 602); (3) when
it involves hours of employment under the Eight-Hour Labor Law (Com. Act No. 444); and (4) when it
involves an unfair labor practice (Sec. 5-a, Rep. Act No. 875).
Later, in the case of Detective and Protective Bureau Incorporated vs. Felipe Guevarra, et
al.,2 involving claims for refunds of deductions from respondents' salaries, payment of additional

compensation for work performed on Sundays and holidays, and for night work, and grant of
vacation and sick leave pay, this Court held that the Court of Industrial Relations had jurisdiction,
inasmuch as the claimants were all employees of the Detective and Protective Bureau, Inc., at the
time of filing of their claims in Case No. 764-V in the Court of Industrial Relations. To the same effect
is the case of Isaac Peral Bowling Alley vs. United Employees Welfare Association, et al., (102 Phil.,
219).
Subsequently, in the case of Santiago Aguilar vs. Jose Salumbides (G.R. No. L-10124, prom,
December 28, 1957), this Court declared that the Court of Industrial Relations had no longer
jurisdiction to hear and determine claims of ex-employees against their former employer for
overtime, wage differential, and separation pays.
Again, in the case of Roman Catholic Archbishop of Manila vs. Yanson, et al.,(G.R. No. L-12341)
and Elizalde and Co. Inc., vs. Yanson et al., (G.R. No. L-12345) jointly decide on April 30, 1958, this
Court, in a unanimous opinion, declared:
In the present case, it is apparent that the petition below is simply for the collection of unpaid
salaries and wages alleged to be due for the services rendered years ago. No labor dispute
appears to be presently involved since the petition itself indicates that the employment has
long terminated and petitioners are not asking that they be reinstated. Clearly, the petition
does not fall under any of the cases enumerated in the law as coming within the jurisdiction
of the Industrial Court, so that it was error for that court not to have ordered its dismissal.
Indeed, even under Commonwealth Act No. 103, as amended by Com. Act No. 559, the
court below could not have taken cognizance of the present case. For in order for that court
to acquire jurisdiction under that law, the requisites mentioned in section 4 thereof must all
be present, one of them being that there must be an industrial or agricultural dispute which is
causing of likely to cause a strike or lockout. With the employment already terminated years
ago, this last mentioned requisite cannot be supposed to still exist.
Then came the decision in the NASSCO vs. Almin, et al., case (104 Phil., 835;56 Off. Gaz. [9] 1879)
in which this Court upheld again the jurisdiction of the Court of Industrial Relations to hear and
determine the claim of respondents at the time presently and actually in the employ of the petitioner
for overtime compensation for work they were then rendering since 1950 on Sundays and
holidays and even at night.
On the same theory, this Tribunal and the Chua Workers' Union (NLU) vs. City Automotive
Company, et al., case3were the claimants for differential and overtime pays were former employees
of the respondent company, ruled that the Court of Industrial Relations had no jurisdiction.
The latest case is that of Monares vs. CNS Enterprises, et al., (G.R. No. L-11749, prom. May 29,
1959) in which this Court, speaking through the Chief Justice, held that the Court of Industrial
Relations and not the Court of First Instance, has jurisdiction where the claimant, although no longer
in the service of the employer, seeks in his petition the payment of differential and overtime pay and
his reinstatement.
Analyzing these cases, the underlying principle, it will be noted in all of them, though not stated in
express terms, is that where the employer-employee relationship is still existing or is sought to be
reestablished because of its wrongful severance (as where the employee seeks reinstatement), the
Court of Industrial Relations has jurisdiction over all claims arising out of, or in connection with
employment, such as those related to the Minimum Wage Law and the Eight-Hour Labor Law. After
the termination of the relationship and no reinstatement is sought, such claims becomes mere
money claims, and come within the jurisdiction of the regular courts.
We are aware that in 2 cases,4 some statements implying a different view have been made, but we
now hold and declare the principle set forth in the preceding paragraph as the one governing all
cases of this nature.
It appearing that in the present case, the respondents-claimants are, or at least were, at the time of
presenting their claims, actually in the employ of herein petitioner, the Court of Industrial Relations
correctly took cognizance of the case.

In respect of the second issue, it appears that claimants-security guards have been employed and
required to observe a 24-hour guard duty divided into 3 shifts of 8 hours each. On April 15, 1953, the
Assistant Chief Security Officer of petitioner corporation, acting for the Chief Security Officer, issued
a Memorandum (Annex A), directing the Security guards to report for duty 2 hours in advance of the
usual time for guard work. Pursuant thereto, claimants had been rendering such overtime work until
January 13, 1954 when the order was revoked after a change of management.
Petitioner, however, contends that said memorandum of the Assistant Chief Security Officer was
issued without authority and, therefore, it is not bound to pay for the alleged overtime. But, as found
by respondent court, shortly after the enforcement of the aforementioned memorandum, the security
guards protested to the management of petitioner corporation, more particularly to Mr. Santiago de
la Cruz, General Manager, Atty. Graciano Borja, Director, and Mr. Espiritu, Director. Instead of
revoking said memorandum on the ground that it was unauthorized by the management, General
Manager De la Cruz told the security guards that the reason why it was being enforced, was to
discipline them and that their work was only light and that 1 hour was of no importance. This, the
lower court held, amounted to a tacit ratification of the memorandum, on the part of the said official
who, as claimed by petitioner itself, had the power to validly act for it. (See also Sec. 6, Exec. Order
No. 350, series of 1950.) Hence, the lower court concluded, applying the provisions of Articles 1393
and 13965 of the new Civil Code, that any defect, if any which said memorandum of the Assistant
Chief Security Officer may have at the time it was constituted, was, therefore, corrected.
But petitioner urges that Articles 1393 and 1396 refer to voidable contracts and the questioned
memorandum is not such a contract but an order issued by one not authorized and, therefore, is
illegal and cannot be ratified tacitly.
This view is without merit. There is no question that a contract of employment exists between
petitioner and claimants-respondents, and that pursuant to the terms thereof, the latter are to render
8 hours labor. When petitioner's official required respondents to render an additional hour work, and
the respondents had to comply (as non-compliance was punishable and actually punished with
disciplinary action), a supplemental contractual obligation was created both under the terms of the
original contract of employment and of the Eight-hour Labor Law, that such additional work was to be
compensated. That the memorandum giving rise to this situation was originally authorized, did not
make it illegal to the extent of not being capable of ratification by the duly authorized official, the
General Manager of petitioner corporation. Hence, the lower court correctly applied Articles 1393
and 1396, upon the facts found by it in this case and amply supported by the record. Wherefore,
finding no error in the decision appealed from and the resolution upholding it, the same are hereby
affirmed, with costs against the petitioner. So ordered.
G.R. No. L-17068
December 30, 1961
NATIONAL SHIPYARDS AND STEEL CORPORATION, petitioner,
vs.
COURT OF INDUSTRIAL RELATIONS and DOMINADOR MALONDRAS, respondents.
N. C. Virata for petitioner.
Mariano B. Tuason for respondent Court.
Manuel P. Calanog for respondent Dominador Malondras.
REYES, J.B.L., J.:
Petition filed by the National Shipyards and Steel Corporation (otherwise known as the NASSCO) to
review certain orders of the respondent Court of Industrial Relations requiring it to pay its bargeman
Dominador Malondras overtime service of 16 hours a day for a period from January 1, 1954 to December
31, 1956, and from January 1, 1957 to April 30, 1957, inclusive.
The petitioner NASSCO, a government-owned and controlled corporation, is the owner of several barges
and tugboats used in the transportation of cargoes and personnel in connection with its business of
shipbuilding and repair. In order that its bargeman could immediately be called to duty whenever their
services are needed, they are required to stay in their respective barges, for which reason they are given
living quarters therein as well as subsistence allowance of P1.50 per day during the time they are on

board. However, upon prior authority of their superior officers, they may leave their barges when said
barges are idle.
On April 15, 1957, 39 crew members of petitioner's tugboat service, including therein respondent
Dominador Malondras, filed with the Industrial Court a complaint for the payment of overtime
compensation (Case No. 1059-V). In the course of the proceeding, the parties entered into a stipulation of
facts wherein the NASSCO recognized and admitted
4. That to meet the exigencies of the service in the performance of the above work, petitioners
have to work when so required in excess of eight (8) hours a day and/or during Sundays and
legal holidays (actual overtime service is subject to determination on the basis of the logbook of
the vessels, time sheets and other pertinent records of the respondent).
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6. The petitioners are paid by the respondent their regular salaries and subsistence allowance,
without additional compensation for overtime work;
Pursuant to the above stipulation, the Industrial Court, on November 22, 1957, issued an order directing
the court examiner to compute the overtime compensation due the claimants.
On February 14, 1958, the court examiner submitted his report covering the period from January 1 to
December 31, 1957. In said report, the examiner found that the petitioners in Case No. 1058-V, including
herein respondent Dominador Malondras, rendered an average overtime service of five (5) hours each
day for the period aforementioned, and upon approval of the report by the Court, all the claimants,
including Malondras, were paid their overtime compensation by the NASSCO.
Subsequently, on April 30, 1958, the court examiner submitted his second partial report covering the
period from January 1, 1954 to December 31, 1956, again giving each crewman an average of five (5)
overtime hours each day. Respondent Malondras was not, however, included in this report as his daily
time sheets were not then available. Again upon approval by the Court, the crewmen concerned were
paid their overtime compensation.
Because of his exclusion from the second report of the examiner, and his time sheets having been
located in the meantime, Dominador Malondras, on September 18, 1959, filed petitions in the same case
asking for the compensation and payment of his overtime compensation for the period from January 1,
1954 to December 31, 1956, and from January to April 30, 1957 which, he alleged, was not included in
the first report of the examiner because his time sheets for these months could not be found at the time.
Malondras' petition was opposed by the NASSCO upon the argument, among others, that its records do
not indicate the actual number of working hours rendered by Malondras during the periods in question.
Acting on the petition and opposition, the Industrial Court ordered the examiner to examine the log books,
daily time sheets, and other pertinent records of the corporation for the purpose of determining and
computing whatever overtime service Malondras had rendered from January 1, 1954 to December 31,
1956.
On January 15, 1960, the chief examiner submitted a report crediting Malondras with a total of 4,349
overtime hours from January 1, 1954 to December 31, 1956, at an average of five (5) overtime hours a
day, and after deducting the aggregate amount of subsistence allowance received by Malondras during
this period, recommended the payment to him of overtime compensation in the total sum of P2,790.90.
On February 20, 1960, the Court ordered the examiner to make a re-examination of the records with a
view to determining Malondras' overtime service from January 1, 1954 to December 31, 1956, and from
January 1, 1957 to April 30, 1957, but without deducting from the compensation to be paid to him his
subsistence allowance. Pursuant to this last order, the examiner, on April 23, 1960, submitted an
amended report giving Malondras an average of sixteen (16) overtime hours a day, on the basis of his
time sheets, and recommending the payment to him of the total amount of P15,242.15 as overtime
compensation during the periods covered by the report. This report was, over the NASSCO's vigorous
objections, approved by the Court below on May 6, 1960. The NASSCO moved for reconsideration, which
was denied by the Court en banc, with one judge dissenting. Whereupon, the NASSCO appealed to this
Court.
There appears to be no question that respondent Malondras actually rendered overtime services during
the periods covered by the examiner's report. This is admitted in the stipulation of facts of the parties in
Case No. 1058-V; and it was on the basis of this admission that the Court below, in its order of November
22, 1957, ordered the payment of overtime compensation to all the petitioners in Case No. 1058-V,

including respondent Dominador Malondras, after the overtime service rendered by them had been
determined and computed on the basis of the log books, time sheets and other pertinent records of the
petitioner corporation.
The only matter to be determined here is, therefore, the number of hours of overtime for which Malondras
should be paid for the periods January 1, 1954 to December 31, 1956, and from January to April 30,
1957. Respondents urge that this is a question of fact and not subject to review by this Court, there being
sufficient evidence to support the Industrial Court's ruling on this point. It appears, however, that in
crediting Malondras with 16 hours of overtime service daily for the periods in question, the court examiner
relied only on his daily time sheets which, although approved by petitioner's officers in charge and its
auditors, do not show the actual number of hours of work rendered by him each day but only indicate,
according to the examiner himself, that:
almost everyday Dominador Malondras was on "Detail" or "Detailed on Board". According to the
officer in charge of Dominador Malondras, when he (Dominador Malondras) was on "Detail" or
"Detailed on Board", he was in the boat for twenty-four (24) hours.
In other words, the court examiner interpreted the words "Detail" or "Detailed on Board" to mean that as
long as respondent Malondras was in his barge for twenty-four hours, he should be paid overtime for
sixteen hours a day or the time in excess of the legal eight working hours that he could not leave his
barge. Petitioner NASSCO, upon the other hand, argues that the mere fact that Malondras was required
to be on board his barge all day so that he could immediately be called to duty when his services were
needed does not imply that he should be paid overtime for sixteen hours a day, but that he should receive
compensation only for the actual service in excess of eight hours that he can prove. This question is
clearly a legal one that may be reviewed and passed upon by this Court.lawphil.net
We can not agree with the Court below that respondent Malondras should be paid overtime compensation
for every hour in excess of the regular working hours that he was on board his vessel or barge each day,
irrespective of whether or not he actually put in work during those hours. Seamen are required to stay on
board their vessels by the very nature of their duties, and it is for this reason that, in addition to their
regular compensation, they are given free living quarters and subsistence allowances when required to be
on board. It could not have been the purpose of our law to require their employers to pay them overtime
even when they are not actually working; otherwise, every sailor on board a vessel would be entitled to
overtime for sixteen hours each day, even if he had spent all those hours resting or sleeping in his bunk,
after his regular tour of duty. The correct criterion in determining whether or not sailors are entitled to
overtime pay is not, therefore, whether they were on board and can not leave ship beyond the regular
eight working hours a day, but whether they actually rendered service in excess of said number of hours.
We have ruled to that effect in Luzon Stevedoring Co., Inc. vs. Luzon Marine Department Union, et al., L9265, April 29, 1957:
I. Is the definition for "hours of work" as presently applied to dryland laborers equally applicable to
seamen? Or should a different criterion be applied by virtue of the fact that the seaman's
employment is completely different in nature as well as in condition of work from that of a dryland
laborer?
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Section 1 of Commonwealth Act No. 444, known as the Eight-Hour Labor Law, provides:
"SEC. 1. The legal working day for any person employed by another shall be of not more
than eight hours daily. When the work is not continuous, the time during which the laborer
is not working AND CAN LEAVE HIS WORKING PLACE and can rest completely, shall
not be counted."
The requisites contained in this section are further implemented by contemporary regulations
issued by administrative authorities (Sections 4 and 5 of Chapter III, Article 1, Code of Rules and
Regulations to implement the Minimum Wage Law).
For the purposes of this case, we do not need to set for seamen a criterion different from that
applied to laborers on land, for under the provisions of the above quoted section, the only thing to
be done is to determine the meaning and scope of the term "working place" used therein. As we
understand this term, alaborer need not leave the premises of the factory shop or boat in order
that his period of rest shall not be counted, it being enough that he "cease to work", may rest
completely and leave or may leave at his will the spot where he actually stays while working, to

go somewhere else, whether within or outside the premises of said factory, shop or boat. If these
requisites are complied with, the period of such rest shall not be counted. (Emphasis supplied)
While Malondras' daily time sheets do not show his actual working hours, nevertheless, petitioner has
already admitted in the Stipulation of Facts in this case that Malondras and his co-claimants did render
service beyond eight (8) hours a day when so required by the exigencies of the service; and in fact,
Malondras was credited and already paid for five (5) hours daily overtime work during the period from
May 1 to December 31, 1957, under the examiner's first report. Since Malondras has been at the same
job since 1954, it can be reasonably inferred that the overtime service he put in whenever he was
required to be aboard his barge all day from 1954 to 1957 would be more or less consistent. In truth, the
other claimants who served with Malondras under the same conditions and period have been finally paid
for an overtime of 5 hours a day, and no substantial difference exists between their case and the present
one, which was not covered by the same award only because Malondras' time records not found until
later.
The next question is whether or not the subsistence allowance received by Malondras for the periods
covered by the report in question should be deducted from his overtime compensation. We do not think
so, for the Stipulation of the Facts of the parties show that this allowance is independent of and has
nothing to do with whatever additional compensation for overtime work was due the petitioner NASSCO's
bargemen. According to the petitioner itself, the reason why their bargemen are given living quarters in
their barges and subsistence allowance at the rate of P1.50 per day was because they were required to
stay in their respective barges in order that they could be immediately called to duty when their services
were needed (Petition, par. 5, p. 2). Petitioner having already paid Malondras and his companions
overtime for 1957 without deduction of the subsistence allowances received by them during this period,
and Malondras' companions having been paid overtime for the other years also without deducting their
subsistence allowances, there is no valid reason why Malondras should be singled out now and his
subsistence allowance deducted from the overtime compensation still due him.
The last question involves petitioner's claim that it was error for the examiner to base Malondras' overtime
compensation for the whole year 1954 at P6.16 a day, when he was appointed in the tubgoat service only
on October 1, 1954, and before that was a derrick man with a daily salary of P6.00. In answer, respondent
Malondras asserts that the report of the examiner, based on his time sheets from January 1, 1954, show
that he had already been rendering overtime service from that date. This answer does not, however, deny
that Malondras started to get P6.16 a day only in October, 1954, and was before that time receiving only
P6.00 daily, as claimed by petitioner. We think, therefore, that the records should be reexamined to find
out Malondras' exact daily wage from January 1, 1954 to September, 1954, and his overtime
compensation for these months computed on the basis thereof.
WHEREFORE, the order appealed from is modified in the sense that respondent Malondras should be
credited five (5) overtime hours instead of sixteen (16) hours a day for the periods covered by the
examiner's report. The court below is ordered to determine from the records the exact daily wage
received by respondent Malondras from January 1, 1954 to September, 1954, and to compute
accordingly his overtime compensation for that period. In all other respects, the judgment appealed from
is affirmed. No costs in this instance. So ordered.