VI.

Wages
Asia Pacific vs. Farolan

Labor Law; Dismissals; Requisites.—A statement of the requisites for a valid dismissal of an employee is thus in order, to wit: (a) the employee must
be afforded due process, i.e., he must be given opportunity to be heard and to defend himself; and (b) dismissal must be for a valid cause as provided
in Article 282 of the Labor Code or any of the authorized causes under Articles 283 and 284 of the same Code.

Second Requisite; In termination cases, the employer bears the onus of proving that the dismissal is for just cause.—As regards the second requisite,
the rule is settled that in termination cases, the employer bears the onus of proving that the dismissal is for just cause failing which the dismissal is
not justified and the employee is entitled to reinstatement.

Managerial Employees; Distinguished from Rank-and-File Employees; Recent decisions of this Court distinguish the treatment of managerial
employees from that of rank and file personnel insofar as the application of the doctrine of loss of trust and confidence is concerned.—Recent
decisions of this Court distinguish the treatment of managerial employees from that of rank and file personnel insofar as the application of the
doctrine of loss of trust and confidence is concerned. “Thus with respect to rank and file personnel, loss of trust and confidence as ground for valid
dismissal requires proof of involvement in the alleged events in question and that mere uncorroborated assertions and accusations by the employer
will not be sufficient. But as regards a managerial employee, mere existence of a basis for believing that such employee has breached the trust of his
employer would suffice for his dismissal.” (Italics supplied)

Conditions to be Considered as Managerial Employee.—As enunciated in Samson v. NLRC, 330 SCRA 460, “Before one may be properly
considered a managerial employee, all the following conditions must be met: (1) Their primary duty consists of the management of the establishment
in which they are employed or of a department or subdivision thereof; (2) They customarily and regularly direct the work of two or more employees
therein; (3) They have the authority to hire or fire other employees of lower rank; or their suggestions and recommendations as to the hiring and
firing and as to the promotion or any other change of status of other employees are given particular weight. (Section 2(b), Rule I, Book III of the
Omnibus Rules Implementing the Labor Code, emphasis supplied).

Loss of Trust and Confidence; Definition.—Loss of trust and confidence to be a valid ground for an employee’s dismissal must be based on a willful
breach and founded on clearly established facts. A breach is willful if it is done intentionally, knowingly and purposely, without justifiable excuse, as
distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently.

Damages; Award of moral and exemplary damages for an illegally dismissed employee is proper where the employee had been harassed and
arbitrarily terminated by the employer.—To warrant award of moral damages, it must be shown that the dismissal of the employee was attended to
by bad faith, or constituted an act opposite to labor, or was done in a manner contrary to morals, good customs or public policy. Award of moral and
exemplary damages for an illegally dismissed employee is proper where the employee had been harassed and arbitrarily terminated by the employer.

Autobus vs. Bautista

Labor Law; Service Incentive Leave; Field Personnel; Words and Phrases; The phrase “other employees whose performance is unsupervised by the
employer” in Section 1(D), Rule V, Book III of the Implementing Rules and Regulations of the Labor Code must not be understood as a separate
classification of employees to which service incentive leave shall not be granted—rather, it serves as an amplification of the interpretation of the
definition of field personnel under the Labor Code as those “whose actual hours of work in the field cannot be determined with reasonable certainty;
Employees engaged on task or contract basis or paid on purely commission basis are not automatically exempted from the grant of service incentive
leave, unless, they fall under the classification of field personnel.”—A careful perusal of said provisions of law will result in the conclusion that the
grant of service incentive leave has been delimited by the Implementing Rules and Regulations of the Labor Code to apply only to those employees
not explicitly excluded by Section 1 of Rule V. According to the Implementing Rules, Service Incentive Leave shall not apply to employees
classified as “field personnel.” The phrase “other employees whose performance is unsupervised by the employer” must not be understood as a
separate classification of employees to which service incentive leave shall not be granted. Rather, it serves as an amplification of the interpretation of
the definition of field personnel under the Labor Code as those “whose actual hours of work in the field cannot be determined with reasonable
certainty.” The same is true with respect to the phrase “those who are engaged on task or contract basis, purely commission basis.” Said phrase
should be related with “field personnel,” applying the rule on ejusdem generis that general and unlimited terms are restrained and limited by the
particular terms that they follow. Hence, employees engaged on task or contract basis or paid on purely commission basis are not automatically
exempted from the grant of service incentive leave, unless, they fall under the classification of field personnel.

What must be ascertained in order to resolve the issue of propriety of the grant of service incentive leave to a bus driver-conductor is whether or not
he is a field personnel; According to 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.—Petitioner’s contention that respondent is not entitled to the grant of service incentive leave just because he was paid on
purely commission basis is misplaced. What must be ascertained in order to resolve the issue of propriety of the grant of service incentive leave to
respondent is whether or not he is a field personnel. According to Article 82 of the Labor Code, “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. This definition is further elaborated in the Bureau of Working Conditions (BWC),
Advisory Opinion to Philippine Technical-Clerical Commercial Employees Association which states that: 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.

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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 employee’s performance is unsupervised by the employer—in order to conclude 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.—At this point, it is necessary
to stress 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 employee’s performance is unsupervised by the employer. As discussed above, 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 conclude 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 employee’s time
and performance are constantly supervised by the employer.

Bus Drivers and Conductors; A bus driver-conductor, not being a field personnel but a regular employee who performs tasks usually necessary and
desirable to the usual trade of the company’s business, is entitled to the grant of service incentive leave.—As observed by the Labor Arbiter and
concurred in by the Court of Appeals: It is of judicial notice that along the routes that are plied by these bus companies, there are its inspectors
assigned at strategic places who board the bus and inspect the passengers, the punched tickets, and the conductor’s reports. There is also the
mandatory once-a-week car barn or shop day, where the bus is regularly checked as to its mechanical, electrical, and hydraulic aspects, whether or
not there are problems thereon as reported by the driver and/or conductor. They too, must be at specific place as [sic] specified time, as they generally
observe prompt departure and arrival from their point of origin to their point of destination. In each and every depot, there is always the Dispatcher
whose function is precisely to see to it that the bus and its crew leave the premises at specific times and arrive at the estimated proper time. These, are
present in the case at bar. The driver, the complainant herein, was therefore under constant supervision while in the performance of this work. He
cannot be considered a field personnel. We agree in the above disquisition. Therefore, as correctly concluded by the appellate court, respondent is not
a field personnel but a regular employee who performs tasks usually necessary and desirable to the usual trade of petitioner’s business. Accordingly,
respondent is entitled to the grant of service incentive leave.

Prescription; In the computation of the three-year prescriptive period, a determination must be made as to the period when the act constituting a
violation of the workers’ right to the benefits being claimed was committed.—It is settled jurisprudence that a cause of action has three elements, to
wit, (1) a right in favor of the plaintiff by whatever means and under whatever law it arises or is created; (2) an obligation on the part of the named
defendant to respect or not to violate such right; and (3) an act or omission on the part of such defendant violative of the right of the plaintiff or
constituting a breach of the obligation of the defendant to the plaintiff. To properly construe Article 291 of the Labor Code, it is essential to ascertain
the time when the third element of a cause of action transpired. Stated differently, in the computation of the three-year prescriptive period, a
determination must be made as to the period when the act constituting a violation of the workers’ right to the benefits being claimed was committed.
For if the cause of action accrued more than three (3) years before the filing of the money claim, said cause of action has already prescribed in
accordance with Article 291.

It is essential to recognize that the service incentive leave is a curious animal in relation to other benefits granted by law to every employee; If the
employee entitled to service incentive leave does not use or commute the same, he is entitled upon his resignation or separation from work to the
commutation of his accrued service incentive leave.—It is essential at this point, however, to recognize that the service incentive leave is a curious
animal in relation to other benefits granted by the law to every employee. In the case of service incentive leave, the employee may choose to either
use his leave credits or commute it to its monetary equivalent if not exhausted at the end of the year. Furthermore, if the employee entitled to service
incentive leave does not use or commute the same, he is entitled upon his resignation or separation from work to the commutation of his accrued
service incentive leave. As enunciated by the Court in Fernandez v. NLRC: The clear policy of the Labor Code is to grant service incentive leave pay
to workers in all establishments, subject to a few exceptions. Section 2, Rule V, Book III of the Implementing Rules and Regulations provides that
“[e]very employee who has rendered at least one year of service shall be entitled to a yearly service incentive leave of five days with pay.” Service
incentive leave is a right which accrues to every employee who has served “within 12 months, whether continuous or broken reckoned from the date
the employee started working, including authorized absences and paid regular holidays unless the working days in the establishment as a matter of
practice or policy, or that provided in the employment contracts, is less than 12 months, in which case said period shall be considered as one year.” It
is also “commutable to its money equivalent if not used or exhausted at the end of the year.” In other words, an employee who has served for one
year is entitled to it. He may use it as leave days or he may collect its monetary value. To limit the award to three years, as the solicitor general
recommends, is to unduly restrict such right.

With regard to service incentive leave, the three-year prescriptive period commences, not at the end of the year when the employee becomes entitled
to the commutation of his service incentive leave, but from the time when the employer refuses to pay its monetary equivalent after demand or
commutation or upon termination of the employee’s services, as the case may be.—Correspondingly, it can be conscientiously deduced that the cause
of action of an entitled employee to claim his service incentive leave pay accrues from the moment the employer refuses to remunerate its monetary
equivalent if the employee did not make use of said leave credits but instead chose to avail of its commutation. Accordingly, if the employee wishes
to accumulate his leave credits and opts for its commutation upon his resignation or separation from employment, his cause of action to claim the
whole amount of his accumulated service incentive leave shall arise when the employer fails to pay such amount at the time of his resignation or
separation from employment. Applying Article 291 of the Labor Code in light of this peculiarity of the service incentive leave, we can conclude that
the three (3)-year prescriptive period commences, not at the end of the year when the employee becomes entitled to the commutation of his service
incentive leave, but from the time when the employer refuses to pay its monetary equivalent after demand of commutation or upon termination of the
employee’s services, as the case may be.

Social Justice; The Court’s construal of Art. 291 of the Labor Code, vis-à-vis the rules on service incentive leave, is in keeping with the rudimentary
principle that in the implementation and interpretation of the provisions of the Labor Code and its implementing regulations, the workingman’s
welfare should be the primordial and paramount consideration.—The above construal of Art. 291, vis-à-vis the rules on service incentive leave, is in
keeping with the rudimentary principle that in the implementation and interpretation of the provisions of the Labor Code and its implementing

2
regulations, the workingman’s welfare should be the primordial and paramount consideration. The policy is to extend the applicability of the decree
to a greater number of employees who can avail of the benefits under the law, which is in consonance with the avowed policy of the State to give
maximum aid and protection to labor.
Red Coconut vs CIR

Courts; When Industrial Court has jurisdiction over claim for overtime pay.—To determine the issue of jurisdiction resort is to be made to the
allegations in the petition or complaint (Administrator, etc. vs. Alberto, L-12133, October 31, 1958; Campos Rueda Corporation vs. Bautista, L-
18453, September 29, 1962; American Oxygen & Acetylene Co. vs. Court of Industrial Relations, L-18554, December 27, 1962). Where in the
petition for shift differentials the Eight-Hour Labor Law was not mentioned but it was clearly asserted that petitioners laborers “are working in the
Red V Coconut Products, Ltd.” and that they “work in two (2) shifts x x x consisting of approximately 12 hours each shift,” it is proper to regard the
petition not as a simple money claim but as one for overtime pay by workers still employed by the company, and, as such, it falls within the
jurisdiction of the Court of Industrial Relations.

Effect of evidence that workers were engaged on piece-work basis.—During the trial, evidence was adduced to the effect that petitioners-workers
were engaged on a piecework basis. The same, however, does not appear from the petition. It, therefore, cannot affect the jurisdiction of the Court of
Industrial Relations over the case, because jurisdiction once acquired continues until final adjudication of the litigation (Pamintuan vs. Tiglao, 53
Phil. 1; Philippine Land-Air-Sea Labor Union vs. Court of Industrial Relations, 93 Phil. 747; Rizal Surety & Insurance Company vs. Manila Railroad
Company, L-20875, April 30, 1966).

Eight-Hour Labor Law; Applicability to piece-workers.—Although the Eight-Hour Labor Law provides that it does not cover those workers who
prefer to be paid on piece-work basis (Sec. 2. Com. Act 444), nothing in said law precludes an agreement for the payment of overtime compensation
to piece-workers.

Effect of payment of shift differentials to pieceworkers.—In agreeing to the provision for payment of shift differentials to petitioners-workers in the
collective bargaining agreement, as well as in actually paying to them said differentials, though not in full, the company in effect freely adhered to an
application and implementation of the Eight-Hour Labor Law, or its objectives, to said workers.

Philosophy underlying exclusion of piece-workers.—The laborers in question are not strictly under the full concept of piece-workers as contemplated
by law for the reason that their hours of work—that is, 12 hours per shift—are fixed by the employer. As ruled by this Court in Lara vs. Del Rosario,
94 Phil. 780, 781–782, the philosophy underlying the exclusion of piece-workers from the Eight-Hour Labor Law is that said workers are paid
depending upon the work they do “irrespective of the amount of time employed” in doing said work. Such freedom as to hours of work does not
obtain in the present case, because here the laborers are assigned by the employer to work in two shifts for 12 hours each shift. Thus, it cannot be said
that for all purposes these workers fall outside the law requiring payment of compensation for work done in excess of eight hours. At least for the
purpose of recovering the full differential pay stipulated in the collective bargaining agreement as due to laborers who perform 12 hours of work
under the night shift, said laborers should be deemed pro tanto or to that extent within the scope of the afore-stated law.

Arica vs. NLRC

Labor Law; Labor Relations; “Waiting Time”; The 30-minute assembly time practiced by the employees of the company (private respondent), cannot
be considered “waiting time”, and is therefore not compensable.—Noteworthy is the decision of the Minister of Labor, on May 12, 1978 in the
aforecited case (Associated Labor Union vs. Standard (Phil.) Fruit Corporation, NLRC Case No. 26-LS-XI-76) where significant findings of facts
and conclusions had already been made on the matter. The Minister of Labor held: “The thirty (30)-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. x x x 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. They are not new employees as to require the company to deliver
long briefings regarding their respective work assignments. Their houses are situated right on the area where the farms are located, such that after the
roll call, which does not necessarily require the personal presence, they can go back to their houses to attend to some chores. 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.”

PAL vs. NLRC

Labor Law; Dismissal; Abandonment; Facts do not support petitioner’s allegation that private respondent abandoned his post on the evening of
February 17, 1994.—As regards the legality of private respondent’s suspension. The facts do not support petitioner’s allegation that private
respondent abandoned his post on the evening of February 17, 1994. Private respondent left the clinic that night only to have his dinner at his house,
which was only a few minutes’ drive away from the clinic. His whereabouts were known to the nurse on duty so that he could be easily reached in
case of emergency. Upon being informed of Mr. Acosta’s condition, private respondent immediately left his home and returned to the clinic. These
facts belie petitioner’s claim of abandonment.

The eight-hour work period does not include the meal break; Private respondent’s act of going home to take his dinner does not constitute
abandonment.—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 respondent’s act, therefore, of going home to take his dinner does not constitute abandonment.

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Damages; Not every employee who is illegally dismissed or suspended is entitled to damages; The person claiming moral damages must prove the
existence of bad faith by clear and convincing evidence for the law always presumes good faith.—Not every employee who is illegally dismissed or
suspended is entitled to damages. As a rule, moral damages are recoverable only where the dismissal or suspension of the employee was attended by
bad faith or fraud, or constituted an act oppressive to labor, or was done in a manner contrary to morals, good customs or public policy. Bad faith
does not simply mean negligence or bad judgment. It involves a state of mind dominated by ill will or motive. It implies a conscious and intentional
design to do a wrongful act for a dishonest purpose or some moral obliquity. The person claiming moral damages must prove the existence of bad
faith by clear and convincing evidence for the law always presumes good faith.

In the case at bar, there is no showing that the management of petitioner company was moved by some evil motive in suspending private respondent;
Under the circumstances, Court holds that private respondent is not entitled to moral damages.—In the case at bar, there is no showing that the
management of petitioner company was moved by some evil motive in suspending private respondent. It suspended private respondent on an honest,
albeit erroneous, belief that private respondent’s act of leaving the company premises to take his meal at home constituted abandonment of post
which warrants the penalty of suspension. Also, it is evident from the facts that petitioner gave private respondent all the opportunity to refute the
charge against him and to defend himself. These negate the existence of bad faith on the part of petitioner. Under the circumstances, we hold that
private respondent is not entitled to moral damages.

Mercury Drug vs. Nardo Dayao

Appeal; Labor Law; Petitioner's assignment of error that the C.I.R. declared the contracts of employment null and void is misplaced inasmuch as the
C.I.R. merely rejected certain portions thereof.—These contracts were not declared by the respondent court null and void in their entirety. The
respondent court, on the basis of the conflicting evidence presented by the parties, in effect: 1) rejected the theory of the petitioner company that the
25% additional compensation claimed by the private respondents for the four-hour work they rendered during Sundays and legal holidays provided in
their contracts of employment were covered by the private respondents' respective monthly salaries; 2) gave credence to private respondents', (Nardo
Dayao, Ernesto Talampas and Josias Federico) testimonies that the 25% additional compensation was not included in the private respondents'
respective monthly salaries and 3) ruled that any agreement in a contract of employment which would exclude the 25% additional compensation for
work done during Sundays and holidays is null and void as mandated by law.

Contracts; The petitioner has not adequately shown that the C.I.R. abused its discretion in the interpretation of the employment contracts issued by
the petitioner—that the salary specified therein does not include the 25% additional pay for work on Sundays and holidays.—In not giving weight to
the evidence of the petitioner-company, the respondent court sustained the private respondents' evidence to the effect that their 25% additional
Compensation for work done on Sundays and Legal Holidays were not included in their respective monthly salaries. The private respondents
presented evidence through the testimonies of Nardo Dayao, Ernesto Talampas, and Josias Federico who are themselves among the employees who
filed the case for unfair labor practice in the respondent court and are private respondents herein. The petitioner-company's contention that the
respondent court's conclusion on the issue of the 25% additional compensation for work done on Sundays and legal holidays during the first four
hours that the private respondents had to work under their respective contracts of employment was not supported by substantial evidence is,
therefore, unfounded. Much less do We find any grave abuse of discretion on the part of the respondent court in its interpretation of the employment
contract's provision on salaries. In view of the controlling doctrine that a grave abuse of discretion must be shown in order to warrant our disturbing
the findings of the respondent court, the reversal of the court's findings on this matter is unwarranted. (Sanchez vs. Court of Industrial Relations, 27
SCRA 490).

Labor Law; Work done at night should be paid more than work done at daytime.—After the passage of Republic Act 875, this Court has not only
upheld the industrial court's assumption of jurisdiction over cases for salary differentials and overtime pay [Chua Workers Union (NLU) vs. City
Automotive Co., et al., G.R. No. L-11655, April 29, 1959; Prisco vs. CIR, et al., G.R. No. L-13806, May 23, 1960] or for payment of additional
compensation for work rendered on Sunays and holidays and for night work [Nassco vs. Almin, et al., G.R. No. L-9055, November 28, 1958;
Detective & Protective Bureau, Inc. vs. Felipe Guevara, et al., G.R. No. L-8738, May 31, 1957] but has also supported such court's ruling that work
performed at night should be paid more than work done at daytime, and that if that work is done beyond the worker's regular hours of duty, he should
also be paid additional compensation for overtime work.

Evidence; Ruling of C.I.R. awarding additional pay for nighttime work is supported by evidence.—The respondent court's ruling on additional
compensation for work done at night is, therefore, not without evidence. Moreover, the petitioner-company did not deny that the private respondents
rendered nighttime work. In fact, no additional evidence was necessary to prove that the private respondents were entitled to additional compensation
for whether or not they were entitled to the same is a question of law which the respondent court answered correctly. The "waiver rule" is not
applicable in the case at bar. Additional compensation for nighttime work is founded on public policy, hence the same cannot be waived. (Article 6,
Civil Code). On this matter, We believe that the respondent court acted according to justice and equity and the substantial merits of the case, without
regard to technicalities or legal forms and should be sustained.

In issue of compensation not all the claimants need testify.—The third assignment of error is likewise without merit. The fact that only three of the
private respondents testified in court does not adversely affect the interests of the other respondents in the case. The ruling in Dimayuga v. Court of
Industrial Relations (G.R. No. L-0213, May 27, 1957) has been abandoned in later rulings of this Court. In Philippine Land-Air-Sea Labor Union
(PLASLU) v. Sy Indong Company Rice And Corn Mill (11 SCRA 277) We had occasion to re-examine the ruling in Dimayuga.

Contracts; The contention that the employees knew the terms of their employment contracts and should be bound thereto is anachronistic in this time
and age. Filipino workers do not have the luxury or freedom to decline job openings or resign when terms are onerous.—The petitioner's contention
that its employees fully understood what they signed when they entered into the contracts of employment and that they should be bound by their
voluntary commitments is anachronistic in this time and age. The Mercury Drug Co., Inc., maintains a chain of drugstores that are open every day of
the week and, for some stores, up to very late at night because of the nature of the pharmaceutical retail business. The respondents knew that they had

4
to work Sundays and holidays and at night, not as exceptions to the rule but as part of the regular course of employment. Presented with contracts
setting their compensation on an annual basis with an express waiver of extra compensation for work on Sundays and holidays, the workers did not
have much choice. The private respondents were at a disadvantage insofar as the contractual relationship was concerned. Workers in our country do
not have the luxury or freedom of declining job openings or filing resignations even when some terms and conditions of employment are not only
onerous and inequitous but illegal It is precisely because of this situation that the framers of the Constitution embodied the provisions on social
justice (Section 6, Article II) and protection to labor (Section 9, Article II) in the Declaration of Principles and State Policies.

Loon vs. Powermaster

Evidence; Documentary Evidence; Administrative Proceedings; While we generally admit in evidence and give probative value to photocopied
documents in administrative proceedings, allegations of forgery and fabrication should prompt the adverse party to present the original documents
for inspection.—Why the respondents’ photocopied and computerized copies of documentary evidence were not presented at the earliest opportunity
is a serious question that lends credence to the petitioners’ claim that the respondents fabricated the evidence for purposes of appeal. While we
generally admit in evidence and give probative value to photocopied documents in administrative proceedings, allegations of forgery and fabrication
should prompt the adverse party to present the original documents for inspection. It was incumbent upon the respondents to present the originals,
especially in this case where the petitioners had submitted their specimen signatures. Instead, the respondents effectively deprived the petitioners of
the opportunity to examine and controvert the alleged spurious evidence by not adducing the originals. This Court is thus left with no option but to
rule that the respondents’ failure to present the originals raises the presumption that evidence willfully suppressed would be adverse if produced.

Burden of Proof; Termination of Employment; In termination cases, the burden of proving just and valid cause for dismissing an employee from his
employment rests upon the employer.—In termination cases, the burden of proving just and valid cause for dismissing an employee from his
employment rests upon the employer. The employer’s failure to discharge this burden results in the finding that the dismissal is unjustified. This is
exactly what happened in the present case.

Payment; As in illegal dismissal cases, the general rule is that the burden rests on the defendant to prove payment rather than on the plaintiff to
prove nonpayment of these money claims.—As in illegal dismissal cases, the general rule is that the burden rests on the defendant to prove payment
rather than on the plaintiff to prove nonpayment of these money claims. The rationale for this rule is that the pertinent personnel files, payrolls,
records, remittances and other similar documents — which will show that differentials, service incentive leave and other claims of workers have been
paid — are not in the possession of the worker but are in the custody and control of the employer.

Overtime Pay; Premium Pay; The burden of proving entitlement to overtime pay and premium pay for holidays and rest days rests on the employee
because these are not incurred in the normal course of business.—The CA was correct in its finding that the petitioners failed to provide sufficient
factual basis for the award of overtime, and premium pays for holidays and rest days. The burden of proving entitlement to overtime pay and
premium pay for holidays and rest days rests on the employee because these are not incurred in the normal course of business. In the present case, the
petitioners failed to adduce any evidence that would show that they actually rendered service in excess of the regular eight working hours a day, and
that they in fact worked on holidays and rest days.

PNB vs. PNB Employees Association

Labor Law; Courts Appeal; The Court of Industrial Relations did not decide the issues raised below in this certified dispute as an arbitration court,
but on the basis of its interpretation of applicable law and jurisprudence. The decision’s correctness is appealable.—Relatedly, however, it is to be
noted that it is clear from the holding of the Industrial Court’s decision We have earlier quoted, “the cause of action (here) is not on any decision of
any court but on the provisions of the law which have been in effect at the time of the occurrence of the cause of action in relation to a labor dispute”.
Viewed from such perspective laid by the lower court itself, it can hardly be said that it indeed exercised purely its power of arbitration, which means
laying down the terms and conditions that should govern the relationship between the employer and employees of an enterprise following its own
appreciation of the relevant circumstances rather empirically. More accurately understood, the court in fact indulged in an interpretation of the
applicable law, namely, CA 444, in the light of its own impression of the opinion of this Court in NAWASA and based its decision thereon.
Accordingly, upon the fact-situation of this case hereunder to be set forth, the fundamental question for Us to decide is whether or not the decision
under appeal is in accordance with that law and the cited jurisprudence. In brief, as PEMA posits, is NAWASA four-square with this case? And even
assuming, for a while, that in a sense what is before Us is an arbitration decision, private respondent itself admits in its above-mentioned
memorandum that this Court is not without power and authority to determine whether or not such arbitration decision is against the law or
jurisprudence or constitutes a grave abuse of discretion.

Rationale for overtime pay.—In Our considered opinion, the answer to such question lies in the basic rationale of overtime pay. Why is a laborer or
employee who works beyond the regular hours of work entitled to extra compensation called in this enlightened time, overtime pay? Verily, there can
be no other reason than that he is made to work longer than what is commensurate with his agreed compensation for the statutorily fixed or
voluntarily agreed hours of labor he is supposed to do. When he thus spends additional time to his work, the effect upon him is multi-faceted: he puts
in more effort, physical and/or mental; he is delayed in going home to his family to enjoy the comforts thereof; he might have no time for relaxation,
amusement or sports; he might miss important prearranged engagements; etc., etc. It is thus the additional work, labor or service employed and the
adverse effects just mentioned of his longer stay in his place of work that justify and is the real reason for the extra compensation that he called
overtime pay.

There is presently a consciousness towards helping our employees by giving of additional allowance in times of economic uncertainty.—In these
times when humane and dignified treatment of labor is steadily becoming universally an obsession of society, we, in our country, have reached a
point in employer-employee relationship wherein employers themselves realize the indispensability of at least making the compensation of workers
equal to the worth of their efforts as much as this case can be statistically determined. Thus, in order to meet the effects of uncertain economic

5
conditions affecting adversely the living conditions of wage earners, employers, whenever the financial conditions of the enterprise permit, grant
them what has been called as cost-of-living allowance. In other words, instead of leaving the workers to assume the risks of or drift by themselves
amidst the cross-currents of country-wide economic dislocation, employers try their best to help them tide over the hardships and difficulties of the
situation. Sometimes, such allowances are voluntarily agreed upon in collective bargaining agreements. At other times, it is imposed by the
government as in the instances of Presidential Decrees Nos. 525, 928, 1123, 1389, 1614, 1678, 1751 and 1790; Letters of Instructions No. 1056 and
Wage Order No. 1. Notably, Presidential Decree No. 1751 increased the statutory minimum wage at all levels by P400 in addition to integrating the
mandatory emergency living allowances under Presidential Decree No. 525 and Presidential Decree No. 1123 into the basic pay of all covered
workers.

The industrial court cannot even in a certified labor dispute impose upon the parties terms and conditions inconsistent with existing law and
jurisprudence.—On this point, the respondent court held that under its broad jurisdiction, it was within the ambit of its authority to provide for what
the parties could not agree upon. We are not persuaded to view the matter that way. We are not convinced that the government, thru the Industrial
Court, then, could impose upon the parties in an employer-employee conflict, terms and conditions which are inconsistent with the existing law and
jurisprudence, particularly where the remedy is sought by the actors more on such legal basis and not purely on the court’s arbitration powers.

Longevity pay cannot be included in the computation of overtime pay when the Collective Bargaining Agreement so stipulates.—In regard to the first
question, We have already pointed out to start with, that as far as longevity pay is concerned, it is beyond question that the same cannot be included
in the computation of overtime pay for the very simple reason that the contrary is expressly stipulated in the collective bargaining agreement and, as
should be the case, it is settled that the terms and conditions of a collective bargaining agreement constitute the law between the parties. (Mactan
Workers Union vs. Aboitiz, 45 SCRA 577. See also Shell Oil Workers Union et al. vs. Shell Company of the Philippines, supra.) The contention of
PEMA that the express provision in the collective bargaining agreement that “this benefit (longevity pay) shall not form part of the basic salaries of
the officers so affected” cannot imply the same idea insofar as the computation of the overtime pay is concerned defies the rules of logic and
mathematics. If the basic pay cannot be deemed increased, how could the overtime pay be based on any increased amount at all?

The basis of computation of overtime pay beyond the required by law must be the Collective Bargaining Agreement between the parties.—In any
event, as stressed by Us in the Shell cases, the basis of computation of overtime pay beyond that required by CA 4444 must be the collective
bargaining agreement, for, to reiterate Our postulation therein and in Bisig ng Manggagawa, supra, it is not for the court to impose upon the parties
anything beyond what they have agreed upon which is not tainted with illegality. On the other hand, where the parties fail to come to an agreement,
on a matter not legally required, the court abuses its discretion when it obliges any of them to do more than what is legally obliged.

Basis for computation of overtime pay where the Collective Bargaining Agreement does not contain any provision thereon. Rule in NAWASA vs.
NAWASA Consolidated Unions, L-18938, Aug. 31, 196 , 11 SCRA 766 is superseded by instant decision.—Doctrinally, We hold that, in the absence
of any specific provision on the matter in a collective bargaining agreement, what are decisive in determining the basis for the computation of
overtime pay are two very germane considerations, namely, (1) whether or not the additional pay is for extra work done or service rendered and (2)
whether or not the same is intended to be permanent and regular, not contingent nor temporary and given only to remedy a situation which can
change any time. We reiterate, overtime pay is for extra effort beyond that contemplated in the employment contract, hence when additional pay is
given for any other purpose, it is illogical to include the same in the basis for the computation of overtime pay. This holding supersedes NAWASA.

Labor Law; The rulings that base pay or regular pay includes other benefits being received by the employee cannot be adopted in the computation of
overtime pay because the law, Commonwealth Act No. 444, as amended, specifically, define what regular wages or salary is for purposes of
computing overtime pay.—These rulings cannot be applied under the Eight-Hour Labor Law, Commonwealth Act No. 4444, because sections 3 and 4
thereof provide that the overtime pay should be based on the “regular wages or salary” or “regular remuneration” of the laborers and employees.
Those terms should be sensibly interpreted. They should be given their ordinary meaning. Those terms do not include the cost-of-living allowance,
longevity pay or other fringe benefits, which items constitute extra pay or additions to the regular or basic pay.

Asian Transmission vs. CA

Labor Law; Salaries; Holiday Pay; Holiday pay is a legislated benefit enacted as part of the Constitutional imperative that the State shall afford
protection to labor.—Holiday pay is a legislated benefit enacted as part of the Constitutional imperative that the State shall afford protection to labor.
Its purpose is not merely “to prevent diminution of the monthly income of the workers on account of work interruptions. In other words, although the
worker is forced to take a rest, he earns what he should earn, that is, his holiday pay.” It is also intended to enable the worker to participate in the
national celebrations held during the days identified as with great historical and cultural significance.

Unlike a bonus, which is a management prerogative, holiday pay is a statutory benefit demandable under the law.—As reflected above, Art. 94 of the
Labor Code, as amended, affords a worker the enjoyment of ten paid regular holidays. The provision is mandatory, regardless of whether an
employee is paid on a monthly or daily basis. Unlike a bonus, which is a management prerogative, holiday pay is a statutory benefit demandable
under the law. Since a worker is entitled to the enjoyment of ten paid regular holidays, the fact that two holidays fall on the same date should not
operate to reduce to nine the ten holiday pay benefits a worker is entitled to receive.

Article 4 of the Labor Code provides that all doubts in the implementation and interpretation of its provisions shall be resolved in favor of labor.—In
any event, Art. 4 of the Labor Code provides that all doubts in the implementation and interpretation of its provisions, including its implementing
rules and regulations, shall be resolved in favor of labor. For the working man’s welfare should be the primordial and paramount consideration.

The Omnibus Rules provides for non-diminution of benefits for unworked regular holidays.—Sec. 11, Rule IV, Book III of the Omnibus Rules to
Implement the Labor Code provides that “Nothing in the law or the rules shall justify an employer in withdrawing or reducing any benefits,
supplements or payments for unworked regular holidays as provided in existing individual or collective agreement or employer practice or policy.”

6
 Jose Rizal College vs NLRC

Labor; Employer-Employee Relations; Holiday Pay; Hourly paid faculty members are entitled to their pay for unworked regular holidays; Reason.—
Under the foregoing provisions, apparently, the petitioner, although a non-profit institution is under obligation to give pay even on unworked regular
holidays to hourly paid faculty members subject to the terms and conditions provided for therein. We believe that the aforementioned implementing
rule is not justified by the provisions of the law which after all is silent with respect to faculty members paid by the hour who because of their
teaching contracts are obliged to work and consent to be paid only for work actually done (except when an emergency or a fortuitous event or a
national need calls for the declaration of special holidays). Regular holidays specified as such by law are known to both school and faculty members
as "no class days;" certainly the latter do not expect payment for said unworked days, and this was clearly in their minds when they entered into the
teaching contracts.

Hourly paid faculty members are however entitled to their regular hourly rate on days declared as special holidays or when classes are called off or
shortened; Reason; Declared purpose of holiday pay.—lt is readily apparent that the declared purpose of the holiday pay which is the prevention of
diminution of the monthly income of the employees on account of work interruptions is defeated when a regular class day is cancelled on account of
a special public holiday and class hours are held on another working day to make up for time lost in the school calendar. Otherwise stated, the faculty
member, although forced to take a rest, does not earn what he should earn on that day. Be it noted that when a special public holiday is declared, the
faculty member paid by the hour is deprived of expected income, and it does not matter that the school calendar is extended in view of the days or
hours lost, for their income that could be earned from other sources is lost during the extended days. Similarly, when classes are called off or
shortened on account of typhoons, floods, rallies, and the like, these faculty members must likewise be paid, whether or not extensions are ordered.

Due Process; "Cardinal primary" requirements of due process in administrative proceedings.—The Court has already set forth what is now known
as the "cardinal primary" requirements of due process in administrative proceedings, to wit: "(1) the right to a hearing which includes the right to
present one's case and submit evidence in support thereof; (2) the tribunal must consider the evidence presented; (3) the decision must have
something to support itself; (4) the evidence must be substantial, and substantial evidence means such evidence as a reasonable mind might accept as
adequate to support a conclusion; (5) the decision must be based on the evidence presented at the hearing, or at least contained in the record and
disclosed to the parties affected; (6) the tribunal or body of any of its judges must act on its or his own independent consideration of the law and facts
of the controversy, and not simply accept the views of a subordinate; (7) the board or body should in all controversial questions, render its decisions
in such manner that the parties to the proceeding can know the various issues involved, and the reason for the decision rendered." (Doruelo vs.
Commission on Elections, 133 SCRA 382 [1984]).

Claim of lack of due process, not true, where petitioner was amply heard and represented in the proceedings, and even filed its position paper and
motions.—The records show petitioner JRC was amply heard and represented in the instant proceedings. It submitted its position paper before the
Labor Arbiter and the NLRC and even filed a motion for reconsideration of the decision of the latter, as well as an "Urgent Motion for Hearing En
Banc" (Rollo, p. 175). Thus, petitioner's claim of lack of due process is unfounded.

Mansion Printing vs. Bitara

Labor Law; Termination of Employment; The termination of employment must be based on a just or authorized cause of dismissal and the dismissal
must be effected after due notice and hearing.—In order to validly dismiss an employee, the employer is required to observe both substantive and
procedural aspects—the termination of employment must be based on a just or authorized cause of dismissal and the dismissal must be effected after
due notice and hearing.

Habitual Tardiness; Absenteeism; His last absences on 11, 13, 14, 15 and 16 March 2000 were undertaken without even notice/permission from
management. These attendance delinquencies may be characterized as habitual and are sufficient justifications to terminate the complainant’s
employment.—We, therefore, agree with the Labor Arbiter’s findings, to wit: The imputed absence and tardiness of the complainant are documented.
He faltered on his attendance 38 times of the 66 working days. His last absences on 11, 13, 14, 15 and 16 March 2000 were undertaken without even
notice/permission from management. These attendance delinquencies may be characterized as habitual and are sufficient justifications to terminate
the complainant’s employment. On this score, Valiao v. Court of Appeals, 435 SCRA 543 (2004), is instructive: xxx It bears stressing that
petitioner’s absences and tardiness were not isolated incidents but manifested a pattern of habituality. xxx The totality of infractions or the number of
violations committed during the period of employment shall be considered in determining the penalty to be imposed upon an erring employee. The
offenses committed by him should not be taken singly and separately but in their totality. Fitness for continued employment cannot be
compartmentalized into tight little cubicles of aspects of character, conduct, and ability separate and independent of each other.

Gross Negligence; Habitual Neglect of Duty; Words and Phrases; In Valiao, we defined gross negligence as “want of care in the performance of
one’s duties” and habitual neglect as “repeated failure to perform one’s duties for a period of time, depending upon the circumstances.”—In Valiao,
we defined gross negligence as “want of care in the performance of one’s duties” and habitual neglect as “repeated failure to perform one’s duties for
a period of time, depending upon the circumstances.” These are not overly technical terms, which, in the first place, are expressly sanctioned by the
Labor Code of the Philippines, to wit: ART. 282. Termination by employer.—An employer may terminate an employment for any of the following
causes: (a) xxx (b) Gross and habitual neglect by the employee of his duties; xxx Clearly, even in the absence of a written company rule defining
gross and habitual neglect of duties, respondent’s omissions qualify as such warranting his dismissal from the service.

Supreme Court cannot simply tolerate injustice to employers if only to protect the welfare of undeserving employees.—We cannot simply tolerate
injustice to employers if only to protect the welfare of undeserving employees. As aptly put by then Associate Justice Leonardo A. Quisumbing:
Needless to say, so irresponsible an employee like petitioner does not deserve a place in the workplace, and it is within the management’s prerogative
xxx to terminate his employment. Even as the law is solicitous of the welfare of employees, it must also protect the rights of an employer to exercise

7
what are clearly management prerogatives. As long as the company’s exercise of those rights and prerogative is in good faith to advance its interest
and not for the purpose of defeating or circumventing the rights of employees under the laws or valid agreements, such exercise will be upheld.

Procedural Due Process; Procedural due process entails compliance with the two-notice rule in dismissing an employee.—Procedural due process
entails compliance with the two-notice rule in dismissing an employee, to wit: (1) the employer must inform the employee of the specific acts or
omissions for which his dismissal is sought; and (2) after the employee has been given the opportunity to be heard, the employer must inform him of
the decision to terminate his employment.

In Bughaw v. Treasure Island Industrial Corporation, 550 SCRA 307 (2008), this Court, in verifying the veracity of the allegation that respondent
refused to receive the Notice of Termination, essentially looked for the following: (1) affidavit of service stating the reason for failure to serve the
notice upon the recipient; and (2) a notation to that effect, which shall be written on the notice itself.—In Bughaw v. Treasure Island Industrial
Corporation, 550 SCRA 307 (2008), this Court, in verifying the veracity of the allegation that respondent refused to receive the Notice of
Termination, essentially looked for the following: (1) affidavit of service stating the reason for failure to serve the notice upon the recipient; and (2) a
notation to that effect, which shall be written on the notice itself. Thus: xxx Bare and vague allegations as to the manner of service and the
circumstances surrounding the same would not suffice. A mere copy of the notice of termination allegedly sent by respondent to petitioner, without
proof of receipt, or in the very least, actual service thereof upon petitioner, does not constitute substantial evidence. It was unilaterally prepared by
the petitioner and, thus, evidently self-serving and insufficient to convince even an unreasonable mind.

Service Incentive Leaves; The clear policy of the Labor Code is to grant service incentive leave pay to workers in all establishments, subject to a few
exceptions, he may use it as leave days or he may collect its monetary value.—As to respondent’s monetary claims, petitioners did not deny
respondent’s entitlement to service incentive leave pay as, indeed, it is indisputable that he is entitled thereto. In Fernandez v. NLRC, 285 SCRA 149
(1998), this Court elucidated: The clear policy of the Labor Code is to grant service incentive leave pay to workers in all establishments, subject to a
few exceptions. Section 2, Rule V, Book III of the Implementing Rules and Regulations provides that “[e]very employee who has rendered at least
one year of service shall be entitled to a yearly service incentive leave of five days with pay.” Service incentive leave is a right which accrues to
every employee who has served “within 12 months, whether continuous or broken reckoned from the date the employee started working, including
authorized absences and paid regular holidays unless the working days in the establishment as a matter of practice or policy, or that provided in the
employment contracts, is less than 12 months, in which case said period shall be considered as one year.” It is also “commutable to its money
equivalent if not used or exhausted at the end of the year.” In other words, an employee who has served for one year is entitled to it. He may use it as
leave days or he may collect its monetary value. xxx.

Mayon Hotel vs. Adana,

Labor Law; Appeals; Due Process; While it is within the NLRC’s competence, as an appellate agency reviewing decisions of Labor Arbiters, to
disagree with and set aside the latter’s findings, it stands to reason that it should state an acceptable cause therefore, otherwise it would be a
whimsical, capricious, oppressive, illogical, unreasonable exercise of quasi-judicial prerogative, subject to invalidation by the extraordinary writ of
certiorari.—There is no denying that it is within the NLRC’s competence, as an appellate agency reviewing decisions of Labor Arbiters, to disagree
with and set aside the latter’s findings. But it stands to reason that the NLRC should state an acceptable cause therefore, otherwise it would be a
whimsical, capricious, oppressive, illogical, unreasonable exercise of quasi-judicial prerogative, subject to invalidation by the extraordinary writ of
certiorari. And when the factual findings of the Labor Arbiter and the NLRC are diametrically opposed and this disparity of findings is called into
question, there is, necessarily, a re-examination of the factual findings to ascertain which opinion should be sustained.

Dismissals; Article 286 of the Labor Code is clear—there is termination of employment when an otherwise bona fide suspension of work exceeds six
(6) months.—The above factual finding of the Labor Arbiter was never refuted by petitioners in their appeal with the NLRC. It confounds us,
therefore, how the NLRC could have so cavalierly treated this uncontroverted factual finding by ruling that respondents have not introduced any
evidence to show that they were illegally dismissed, and that the Labor Arbiter’s finding was based on conjecture. It was a serious error that the
NLRC did not inquire as to the legality of the cessation of employment. Article 286 of the Labor Code is clear—there is termination of employment
when an otherwise bona fide suspension of work exceeds six (6) months. The cessation of employment for more than six months was patent and the
employer has the burden of proving that the termination was for a just or authorized cause.

Serious business losses do not excuse the employer from complying with the clearance or report required under Art. 283 of the Labor Code and its
implementing rules before terminating the employment of its workers; The requirement of law mandating the giving of notices was intended not only
to enable the employees to look for another employment and therefore ease the impact of the loss of their jobs and the corresponding income, but
more importantly, to give the Department of Labor and Employment (DOLE) the opportunity to ascertain the verity of the alleged authorized cause
of termination.—We are not impressed by petitioners’ claim that severe business losses justified their failure to reinstate respondents. The evidence to
prove this fact is inconclusive. But more important, serious business losses do not excuse the employer from complying with the clearance or report
required under Article 283 of the Labor Code and its implementing rules before terminating the employment of its workers. In the absence of
justifying circumstances, the failure of petitioners to observe the procedural requirements set out under Article 284, taints their actuations with bad
faith, especially since they claimed that they have been experiencing losses in the three years before 1997. To say the least, if it were true that the lay-
off was temporary but then serious business losses prevented the reinstatement of respondents, then petitioners should have complied with the
requirements of written notice. The requirement of law mandating the giving of notices was intended not only to enable the employees to look for
another employment and therefore ease the impact of the loss of their jobs and the corresponding income, but more importantly, to give the
Department of Labor and Employment (DOLE) the opportunity to ascertain the verity of the alleged authorized cause of termination.

While the Court recognizes the right of the employer to terminate the services of an employee for a just or authorized cause, the dismissal of
employees must be made within the parameters of law and pursuant to the tenets of fair play.—While we recognize the right of the employer to
terminate the services of an employee for a just or authorized cause, the dismissal of employees must be made within the parameters of law and

8
pursuant to the tenets of fair play. And in termination disputes, the burden of proof is always on the employer to prove that the dismissal was for a
just or authorized cause. Where there is no showing of a clear, valid and legal cause for termination of employment, the law considers the case a
matter of illegal dismissal.

Evidence; Damages; If doubts exist between the evidence presented by the employer and the employee, the scales of justice must be tilted in favor of
the latter—the employer must affirmatively show rationally adequate evidence that the dismissal was for a justifiable cause; As a rule, moral
damages are recoverable where the dismissal of the employee was attended by bad faith or fraud or constituted an act oppressive to labor, or was
done in a manner contrary to morals, good customs or public policy.—Under these circumstances, the award of damages was proper. As a rule, moral
damages are recoverable where the dismissal of the employee was attended by bad faith or fraud or constituted an act oppressive to labor, or was
done in a manner contrary to morals, good customs or public policy. We believe that the dismissal of the respondents was attended with bad faith and
meant to evade the lawful obligations imposed upon an employer. To rule otherwise would lead to the anomaly of respondents being terminated from
employment in 1997 as a matter of fact, but without legal redress. This runs counter to notions of fair play, substantial justice and the constitutional
mandate that labor rights should be respected. If doubts exist between the evidence presented by the employer and the employee, the scales of justice
must be tilted in favor of the latter—the employer must affirmatively show rationally adequate evidence that the dismissal was for a justifiable cause.
It is a time-honored rule that in controversies between a laborer and his master, doubts reasonably arising from the evidence, or in the interpretation
of agreements and writing should be resolved in the former’s favor. The policy is to extend the doctrine to a greater number of employees who can
avail of the benefits under the law, which is in consonance with the avowed policy of the State to give maximum aid and protection of labor.

Labor Standards; Pleadings and Practice; Petitioners’ arguments are not only tiring, repetitive and unconvincing, but confusing and confused—
entitlement to labor standard benefits is a separate and distinct concept from payment of separation pay arising from illegal dismissal, and are
governed by different provisions of the Labor Code.—Petitioners assail this ruling by repeating their long and convoluted argument that as there was
no illegal dismissal, then respondents are not entitled to their monetary claims or separation pay and damages. Petitioners’ arguments are not only
tiring, repetitive and unconvincing, but confusing and confused—entitlement to labor standard benefits is a separate and distinct concept from
payment of separation pay arising from illegal dismissal, and are governed by different provisions of the Labor Code.

Evidence; One who pleads payment has the burden of proving it, and even where the employees must allege nonpayment, the general rule is that the
burden rests on the defendant to prove nonpayment, rather than on the plaintiff to prove nonpayment.—We agree with the CA and the Labor Arbiter.
Respondents have set out with particularity in their complaint, position paper, affidavits and other documents the labor standard benefits they are
entitled to, and which they alleged that petitioners have failed to pay them. It was therefore petitioners’ burden to prove that they have paid these
money claims. One who pleads payment has the burden of proving it, and even where the employees must allege nonpayment, the general rule is that
the burden rests on the defendant to prove nonpayment, rather than on the plaintiff to prove nonpayment. This petitioners failed to do.

Presumptions; Failure of an employer to submit necessary documents which are in its possession, in spite of orders to do so, gives rise to the
presumption that their presentation is prejudicial to its cause.—We also agree with the Labor Arbiter and the CA that the documents petitioners
submitted, i.e., affidavits executed by some of respondents during an ocular inspection conducted by an inspector of the DOLE; notices of inspection
result and Facility Evaluation Orders issued by DOLE, are not sufficient to prove payment. Despite repeated orders from the Labor Arbiter,
petitioners failed to submit the pertinent employee files, payrolls, records, remittances and other similar documents which would show that
respondents rendered work entitling them to payment for overtime work, night shift differential, premium pay for work on holidays and rest day, and
payment of these as well as the COLA and the SILP—documents which are not in respondents’ possession but in the custody and absolute control of
petitioners. By choosing not to fully and completely disclose information and present the necessary documents to prove payment of labor standard
benefits due to respondents, petitioners failed to discharge the burden of proof. Indeed, petitioners’ failure to submit the necessary documents which
as employers are in their possession, in spite of orders to do so, gives rise to the presumption that their presentation is prejudicial to its cause. As
aptly quoted by the CA: [W]hen the evidence tends to prove a material fact which imposes a liability on a party, and he has it in his power to produce
evidence which from its very nature must overthrow the case made against him if it is not founded on fact, and he refuses to produce such evidence,
the presumption arises that the evidence, if produced, would operate to his prejudice, and support the case of his adversary.

Cost of Facilities; Meals and Snacks; Before an employer may deduct the value of facilities from the employee’s wages, it must first satisfy the
following—(a) proof that such facilities are customarily furnished by the trade, (b) the provision of deductible facilities is voluntarily accepted in
writing by the employee, and, (c) the facilities are charged at fair and reasonable value—the law is clear that mere availment is not sufficient to
allow deductions from employees’ wages.—Even granting that meals and snacks were provided and indeed constituted facilities, such facilities could
not be deducted without compliance with certain legal requirements. As stated in Mabeza v. NLRC, the employer simply cannot deduct the value
from the employee’s wages without satisfying the following: (a) proof that such facilities are customarily furnished by the trade; (b) the provision of
deductible facilities is voluntarily accepted in writing by the employee; and (c) the facilities are charged at fair and reasonable value. The records are
clear that petitioners failed to comply with these requirements. There was no proof of respondents’ written authorization. Indeed, the Labor Arbiter
found that while the respondents admitted that they were given meals and merienda, the quality of food served to them was not what was provided
for in the Facility Evaluation Orders and it was only when they filed the cases that they came to know of this supposed Facility Evaluation Orders.
Petitioner Josefa Po Lam herself admitted that she did not inform the respondents of the facilities she had applied for. Considering the failure to
comply with the above-mentioned legal requirements, the Labor Arbiter therefore erred when he ruled that the cost of the meals actually provided to
respondents should be deducted as part of their salaries, on the ground that respondents have availed themselves of the food given by petitioners. The
law is clear that mere availment is not sufficient to allow deductions from employees’ wages.

Food or snacks or other convenience provided by the employers are deemed as supplements if they are granted for the convenience of the
employer—the criterion in making a distinction between a supplement and a facility does not so much lie in the kind (food, lodging) but the
purpose.—We note the uncontroverted testimony of respondents on record that they were required to eat in the hotel and restaurant so that they will
not go home and there is no interruption in the services of Mayon Hotel & Restaurant. As ruled in Mabeza, food or snacks or other convenience
provided by the employers are deemed as supplements if they are granted for the convenience of the employer. The criterion in making a distinction

9
between a supplement and a facility does not so much lie in the kind (food, lodging) but the purpose. Considering, therefore, that hotel workers are
required to work different shifts and are expected to be available at various odd hours, their ready availability is a necessary matter in the operations
of a small hotel, such as petitioners’ business. The deduction of the cost of meals from respondents’ wages, therefore, should be removed.

Serious business losses is not a defense to payment of labor standard benefits.—As for petitioners repeated invocation of serious business losses,
suffice to say that this is not a defense to payment of labor standard benefits. The employer cannot exempt himself from liability to pay minimum
wages because of poor financial condition of the company. The payment of minimum wages is not dependent on the employer’s ability to pay.

Damages; While it is true that other forms of damages under the Civil Code may be awarded to illegally dismissed employees, any award of moral
damages by the Labor Arbiter cannot be based on the Labor Code but should be grounded on the Civil Code.—There is no denying that the
actuations of petitioners in this case have been reprehensible. They have terminated the respondents’ employment in an underhanded manner, and
have used and abused the quasi-judicial and judicial processes to resist payment of their employees’ rightful claims, thereby protracting this case and
causing the unnecessary clogging of dockets of the Court. They have also forced respondents to unnecessary hardship and financial expense. Indeed,
the circumstances of this case would have called for exemplary damages, as the dismissal was effected in a wanton, oppressive or malevolent
manner, and public policy requires that these acts must be suppressed and discouraged. Nevertheless, we cannot agree with the Labor Arbiter in
granting exemplary damages of P10,000.00 each to all respondents. While it is true that other forms of damages under the Civil Code may be
awarded to illegally dismissed employees, any award of moral damages by the Labor Arbiter cannot be based on the Labor Code but should be
grounded on the Civil Code. And the law is clear that exemplary damages can only be awarded if plaintiff shows proof that he is entitled to moral,
temperate or compensatory damages. As only respondents Loveres, Guades, Macandog, Llarena, Nicerio, Atractivo and Broñola specifically claimed
damages from petitioners, then only they are entitled to exemplary damages.

VII. WAGES
GAA vs. CA

Labor Law; Words and Phrases; Damages; Execution; Attachment; Art 1708 of the Civil Code which exempts "laborer's wage" from attachment or
execution does not apply to a responsibly placed employee, supervisory or managerial employee, but only to the rank and file.—ln its broadest sense,
the word "laborer" includes everyone who performs any kind of mental or physical labor, but as commonly and customarily used and understood, it
only applies to one engaged in some form of manual or physical labor. That is the sense in which the courts generally apply the term as applied in
exemption acts, since persons of that class usually look to the reward of a day's labor for immediate or present support and so are more in need of the
exemption than are other.

We do not think that the legislature intended the exemption in Article 1708 of the New Civil Code to operate in favor of any but those who are
laboring men or women in the sense that their work is manual. Persons belonging to this class usually look to the reward of a day's labor for
immediate or present support, and such person are more in need of the exemption than any others. Petitioner Rosario A. Gaa is definitely not within
that class.

We find, therefore, and so hold that the Trial Court did not err in denying in its order of November 7, 1975 the motion of petitioner to lift the notice
of garnishment against her salaries, commission and other remuneration from El Grande Hotel since said salaries, commission and other
remuneration due her from the El Grande Hotel do not constitute wages due a laborer which, under Article 1708 of the Civil Code, are not subject to
execution or attachment.

"Wages" distinguished from "Salary."—Article 1708 used the word "wages" and not "salary" in relation to "laborer" when it declared what are to be
exempted from attachment and execution. The term "wages" as distinguished from "salary", applies to the compensation for manual labor, skilled or
unskilled, paid at stated times, and measured by the day, week, month, or season, while "salary" denotes a higher degree of employment, or a superior
grade of services, and implies a position of office: by contrast, the term "wages" indicates considerable pay for a lower and less responsible character
of employment, while "salary" is suggestive of a larger and more important service (

The distinction between wages and salary was adverted to in Bell vs. Indian Livestock Co., wherein it was said: " 'Wages' are the compensation given
to a hired person for service, and the same is true of 'salary'. The words seem to be synonymous, convertible terms, though we believe that use and
general acceptation have given to the word 'salary' a significance somewhat different from the word 'wages' in this: that the former is understood to
relate to position of office, to be the compensation given for official or other service, as distinguished from 'wages', the compensation for labor."

Atok Big Wedge Assoc. vs. Atok Mining Co.,

1.EMPLOYER AND LABORERS; AGREEMENT BETWEEN THEM INTERPRETED; WAGES; MINIMUM WAGE LAW.—Under the facts of the
case, the compromise agreement between the petitioner labor association and the respondent company to abide by whatever decision the Supreme
Court may render in Case L-5276 (then pending appeal) can only be interpreted thus: That the company agreed to pay whatever award this Court
would make in said case from the date fixed by the decision (which was that of the original demand, September 4, 1950) up to August 3, 1952 (the
day previous to the effectivity of the Compromise Agreement), and from August 4, 1952 to December 31, 1954, they are to be bound by their
agreement of October 29, 1952.

2. WAGES; MINIMUM WAGE LAW; AGREEMENT TO DEDUCT FROM WAGES CERTAIN FACILITIES RECEIVED IS NOT WAIVER OF
MINIMUM WAGE FIXED BY LAW.—Section 20 of Republic Act 602 provides that "no agreement or contract... to accept a lower wage or less than
any other under this Act, shall be valid." An agreement to deduct certain facilities received by the laborers from their employer is not prohibited
waiver of the minimum wage fixed by the law. Wage, as defined by section 2 of Republic Act No. 602, "includes the fair and reasonable value as

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determined by the Secretary of Labor, or board, lodging, or other facilities customarily furnished by the employer to the employee." The law permits
the decision of such facilities from the laborer's minimum wage, as long as their value is "fair and reasonable."

3. SUPPLEMENTS" AND "FACILITIES" DISTINGUISHED.—"Supplements" constitute extra remuneration or special privileges or benefits given to
or received by the laborers over and above their ordinary earnings or wages. "Facilities", on the other hand, are items of expense necessary for the
laborer's and his family's existence and subsistence, so that by express provision of the law (sec. 2[0]) they form part of the wage and when furnished
by the employer are deductible therefrom, since if they are not so furnished, the laborer would spend and pay for them just the same.

Chavez vs NLRC, 448 SCRA 478

Labor Law; Elements of an employer-employee relationship.—The elements to determine the existence of an employment relationship are: (1) the
selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the employer’s power to control the
employee’s conduct. The most important element is the employer’s control of the employee’s conduct, not only as to the result of the work to be
done, but also as to the means and methods to accomplish it. All the four elements are present in this case.

Benefits; Wages; Definition of Wages.—Wages are defined as “remuneration or earnings, however designated, capable of being expressed in terms of
money, whether fixed or ascertained on a time, task, piece or commission basis, or other method of calculating the same, which is payable by an
employer to an employee under a written or unwritten contract of employment for work done or to be done, or for service rendered or to be
rendered.” That the petitioner was paid on a per trip basis is not significant. This is merely a method of computing compensation and not a basis for
determining the existence or absence of employer-employee relationship. One may be paid on the basis of results or time expended on the work, and
may or may not acquire an employment status, depending on whether the elements of an employer-employee relationship are present or not. In this
case, it cannot be gainsaid that the petitioner received compensation from the respondent company for the services that he rendered to the latter.

Under the Rules Implementing the Labor Code, every employer is required to pay his employees by means of payroll.—Under the Rules
Implementing the Labor Code, every employer is required to pay his employees by means of payroll. The payroll should show, among other things,
the employee’s rate of pay, deductions made, and the amount actually paid to the employee. Interestingly, the respondents did not present the payroll
to support their claim that the petitioner was not their employee, raising speculations whether this omission proves that its presentation would be
adverse to their case.

Dismissals; Respondent’s power to dismiss the petitioner was inherent in the fact that they engaged the services of the petitioner as truck driver.—
The respondents’ power to dismiss the petitioner was inherent in the fact that they engaged the services of the petitioner as truck driver. They
exercised this power by terminating the petitioner’s services albeit in the guise of “severance of contractual relation” due allegedly to the latter’s
breach of his contractual obligation.

While an independent contractor enjoys independence and freedom from the control and supervision of his principal, an employee is subject to the
employer’s power to control the means and methods by which the employee’s work is to be performed and accomplished.—Of the four elements of
the employer-employee relationship, the “control test” is the most important. Compared to an employee, an independent contractor is one who carries
on a distinct and independent business and undertakes to perform the job, work, or service on its own account and under its own responsibility
according to its own manner and method, free from the control and direction of the principal in all matters connected with the performance of the
work except as to the results thereof. Hence, while an independent contractor enjoys independence and freedom from the control and supervision of
his principal, an employee is subject to the employer’s power to control the means and methods by which the employee’s work is to be performed
and accomplished.

The employment status of a person is defined and prescribed by law and not by what the parties say it should be.—It bears stressing that the existence
of an employer-employee relationship cannot be negated by expressly repudiating it in a contract and providing therein that the employee is an
independent contractor when, as in this case, the facts clearly show otherwise. Indeed, the employment status of a person is defined and prescribed by
law and not by what the parties say it should be.

Abandonment; As a rule, the employer bears the burden to prove that the dismissal was for a valid and just cause; Factors to constitute
abandonment; A charge of abandonment is totally inconsistent with the immediate filing of a complaint for illegal dismissal more so when it includes
a prayer for reinstatement.—As a rule, the employer bears the burden to prove that the dismissal was for a valid and just cause. In this case, the
respondents failed to prove any such cause for the petitioner’s dismissal. They insinuated that the petitioner abandoned his job. To constitute
abandonment, these two factors must concur: (1) the failure to report for work or absence without valid or justifiable reason; and (2) a clear intention
to sever employer-employee relationship. Obviously, the petitioner did not intend to sever his relationship with the respondent company for at the
time that he allegedly abandoned his job, the petitioner just filed a complaint for regularization, which was forthwith amended to one for illegal
dismissal. A charge of abandonment is totally inconsistent with the immediate filing of a complaint for illegal dismissal, more so when it includes a
prayer for reinstatement.

The negligence, to warrant removal from service, should not merely be gross but also habitual.—Neither can the respondents’ claim that the
petitioner was guilty of gross negligence in the proper maintenance of the truck constitute a valid and just cause for his dismissal. Gross negligence
implies a want or absence of or failure to exercise slight care or diligence, or the entire absence of care. It evinces a thoughtless disregard of
consequences without exerting any effort to avoid them. The negligence, to warrant removal from service, should not merely be gross but also
habitual. The single and isolated act of the petitioner’s negligence in the proper maintenance of the truck alleged by the respondents does not amount
to “gross and habitual neglect” warranting his dismissal.

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The lack of a valid and just cause in terminating the services of the petitioner renders his dismissal illegal.—The lack of a valid and just cause in
terminating the services of the petitioner renders his dismissal illegal. Under Article 279 of the Labor Code, an employee who is unjustly dismissed is
entitled to reinstatement, without loss of seniority rights and other privileges, and to the payment of full backwages, inclusive of allowances, and
other benefits or their monetary equivalent, computed from the time his compensation was withheld from him up to the time of his actual
reinstatement.
LG Marcos vs. NLRC

Labor Law; Quitclaims and Releases; The law does not consider as valid any agreement whereby a worker agrees to receive less compensation than
what he is entitled to recover.—Under prevailing jurisprudence, the fact that an employee has signed a satisfaction receipt for his claims does not
necessarily result in the waiver thereof. The law does not consider as valid any agreement whereby a worker agrees to receive less compensation than
what he is entitled to recover. A deed of release or quitclaim cannot bar an employee from demanding benefits to which he is legally entitled.

The reason why quitclaims are commonly frowned upon as contrary to public policy, and why they are held to be ineffective to bar claims for the full
measure of the workers’ legal rights, is the fact that the employer and the employee obviously do not stand on the same footing.—We have heretofore
explained that the reason why quitclaims are commonly frowned upon as contrary to public policy, and why they are held to be ineffective to bar
claims for the full measure of the workers’ legal rights, is the fact that the employer and the employee obviously do not stand on the same footing.
The employer drove the employee to the wall. The latter must have to get hold of money. Because, out of a job, he had to face the harsh necessities of
life. He thus found himself in no position to resist money proffered. His, then, is a case of adherence, not of choice. One thing sure, however, is that
petitioners did not relent on their claim. They pressed it. They are deemed not have waived any of their rights. Renuntiatio non praesumitur.

Dismissals; Unfair Labor Practices; The acceptance of termination pay does not divest a laborer of the right to prosecute his employer for unfair
labor practice acts.—Along this line, we have more trenchantly declared that quitclaims and/or complete releases executed by the employees do not
estop them from pursuing their claims arising from unfair labor practices of the employer. The basic reason for this is that such quitclaims and/or
complete releases are against public policy and, therefore, null and void. The acceptance of termination does not divest a laborer of the right to
prosecute his employer for unfair labor practice acts. While there may be possible exceptions to this holding, we do not perceive any in the case at
bar.

Words and Phrases; Bonus, Explained.—A bonus is not a gift or gratuity, but is paid for some services or consideration and is in addition to what
would ordinarily be given. The term “bonus” as used in employment contracts, also conveys an idea of something which is gratuitous, or which may
be claimed to be gratuitous, over and above the prescribed wage which the employer agrees to pay.

After the acceptance of a promise by an employer to pay the bonus, the same cannot be withdrawn, but may be enforced by the employee.—The
weight of authority in American jurisprudence, with which we are persuaded to agree, is that after the acceptance of a promise by an employer to pay
the bonus, the same cannot be withdrawn, but may be enforced by the employee. However, in the case at bar, equity demands that the performance
and anniversary bonuses should be prorated to the number of months that petitioners actually served respondent company in the year 1990. This
observation should be taken into account in the computation of the amounts to be awarded to petitioners.

Sevilla Trading vs. Semana

On the contrary, we find the decision of A.V.A. Semana to be sound, valid, and in accord with law and jurisprudence. A.V.A. Semana is correct in
holding that petitioner’s stance of mistake or error in the computation of the thirteenth month pay is unmeritorious. Petitioner’s submission of
financial statements every year requires the services of a certified public accountant to audit its finances. It is quite impossible to suggest that they
have discovered the alleged error in the payroll only in 1999. This implies that in previous years it does not know its cost of labor and operations.
This is merely basic cost accounting. Also, petitioner failed to adduce any other relevant evidence to support its contention. Aside from its bare claim
of mistake or error in the computation of the thirteenth month pay, petitioner merely appended to its petition a copy of the 1997-2002 Collective
Bargaining Agreement and an alleged “corrected” computation of the thirteenth month pay. There was no explanation whatsoever why its inclusion
of non-basic benefits in the base figure in the computation of their 13th-month pay in the prior years was made by mistake, despite the clarity of
statute and jurisprudence at that time.

Under Presidential Decree 851 and its implementing rules, the basic salary of an employee is used as the basis in the determination of his 13th-month
pay. Any compensations or remunerations which are deemed not part of the basic pay is excluded as basis in the computation of the mandatory
bonus.

Under the Rules and Regulations Implementing Presidential Decree 851, the following compensations are deemed not part of the basic salary:

(a)Cost-of-living allowances granted pursuant to Presidential Decree 525 and Letter of Instruction No. 174;
(b)Profit sharing payments;
(c)All allowances and monetary benefits which are not considered or integrated as part of the regular basic salary of the employee at the time of the
promulgation of the Decree on December 16, 1975.
Under a later set of Supplementary Rules and Regulations Implementing Presidential Decree 851 issued by the then Labor Secretary Blas Ople,
overtime pay, earnings and other remunerations are excluded as part of the basic salary and in the computation of the 13th-month pay.

The exclusion of cost-of-living allowances under Presidential Decree 525 and Letter of Instruction No. 174 and profit sharing payments indicate the
intention to strip basic salary of other payments which are properly considered as “fringe” benefits. Likewise, the catch-all exclusionary phrase “all
allowances and monetary benefits which are not considered or integrated as part of the basic salary” shows also the intention to strip basic salary of
any and all additions which may be in the form of allowances or “fringe” benefits.

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Moreover, the Supplementary Rules and Regulations Implementing Presidential Decree 851 is even more empathic in declaring that earnings and
other remunerations which are not part of the basic salary shall not be included in the computation of the 13th-month pay.

While doubt may have been created by the prior Rules and Regulations Implementing Presidential Decree 851 which defines basic salary to include
all remunerations or earnings paid by an employer to an employee, this cloud is dissipated in the later and more controlling Supplementary Rules and
Regulations which categorically, exclude from the definition of basic salary earnings and other remunerations paid by employer to an employee. A
cursory perusal of the two sets of Rules indicates that what has hitherto been the subject of a broad inclusion is now a subject of broad exclusion. The
Supplementary Rules and Regulations cure the seeming tendency of the former rules to include all remunerations and earnings within the definition
of basic salary.

The all-embracing phrase “earnings and other remunerations” which are deemed not part of the basic salary includes within its meaning payments for
sick, vacation, or maternity leaves, premium for works performed on rest days and special holidays, pay for regular holidays and night differentials.
As such they are deemed not part of the basic salary and shall not be considered in the computation of the 13th-month pay. If they were not so
excluded, it is hard to find any “earnings and other remunerations” expressly excluded in the computation of the 13th-month pay. Then the
exclusionary provision would prove to be idle and with no purpose.

In the light of the clear ruling of this Court, there is, thus no reason for any mistake in the construction or application of the law. When petitioner
Sevilla Trading still included over the years non-basic benefits of its employees, such as maternity leave pay, cash equivalent of unused vacation and
sick leave, among others in the computation of the 13th-month pay, this may only be construed as a voluntary act on its part. Putting the blame on the
petitioner’s payroll personnel is inexcusable.

In Davao Fruits Corporation vs. Associated Labor Unions, we likewise held that:9

The “Supplementary Rules and Regulations Implementing P.D. No. 851” which put to rest all doubts in the computation of the thirteenth month pay,
was issued by the Secretary of Labor as early as January 16, 1976, barely one month after the effectivity of P.D. No. 851 and its Implementing Rules.
And yet, petitioner computed and paid the thirteenth month pay, without excluding the subject items therein until 1981. Petitioner continued its
practice in December 1981, after promulgation of the aforequoted San Miguel decision on February 24, 1981, when petitioner purportedly
“discovered” its mistake.

From 1975 to 1981, petitioner had freely, voluntarily and continuously included in the computation of its employees’ thirteenth month pay, without
the payments for sick, vacation and maternity leave, premium for work done on rest days and special holidays, and pay for regular holidays. The
considerable length of time the questioned items had been included by petitioner indicates a unilateral and voluntary act on its part, sufficient in itself
to negate any claim of mistake.

A company practice favorable to the employees had indeed been established and the payments made pursuant thereto, ripened into benefits enjoyed
by them. And any benefit and supplement being enjoyed by the employees cannot be reduced, diminished, discontinued or eliminated by the
employer, by virtue of Sec. 10 of the Rules and Regulations Implementing P.D. No. 851, and Art. 100 of the Labor Code of the Philippines which
prohibit the diminution or elimination by the employer of the em-ployees’ existing benefits.

Art. 100. Prohibition against elimination or diminution of benefits.—Nothing in this Book shall be construed to eliminate or in any way diminish
supplements, or other employee benefits being enjoyed at the time of promulgation of this Code.

Davao Integrated Ports vs. Abarquez

Labor Law; CBA defined.—A collective bargaining agreement (CBA), as used in Article 252 of the Labor Code, refers to a contract executed upon
request of either the employer or the exclusive bargaining representative incorporating the agreement reached after negotiations with respect to
wages, hours of work and all other terms and conditions of employment, including proposals for adjusting any grievances or questions arising under
such agreement.

CBA not an ordinary contract.—While the terms and conditions of a CBA constitute the law between the parties, it is not, however, an ordinary
contract to which is applied the principles of law governing ordinary contracts. A CBA, as a labor contract within the contemplation of Article 1700
of the Civil Code of the Philippines which governs the relations between labor and capital, is not merely contractual in nature but impressed with
public interest, thus, it must yield to the common good. As such, it must be construed liberally rather than narrowly and technically, and the courts
musts place a practical and realistic construction upon it, giving due consideration to the context in which it is negotiated and purpose which it is
intended to serve.

Nature of sick leave benefits.—Sick leave benefits, like other economic benefits stipulated in the CBA such as maternity leave and vacation leave
benefits, among others, are by their nature, intended to be replacements for regular income which otherwise would not be earned because an
employee is not working during the period of said leaves. They are non-contributory in nature, in the sense that the employees contribute nothing to
the operation of the benefits. By their nature, upon agreement of the parties, they are intended to alleviate the economic condition of the workers.

Intermittent field workers who are members of a regular pool are entitled to sick leave benefits under the CBA at bar.—After a careful examination
of Section 1 in relation to Section 3, Article VIII of the 1989 CBA in light of the facts and circumstances attendant in the instant case, we find and so
hold that the last sentence of Section 1, Article VIII of the 1989 CBA, invoked by petitioner-company does not bar the regular intermittent workers
from the privilege of commutation or conversion to cash of the unenjoyed portion of their sick leave with pay benefits, if qualified. For the phrase

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"herein sick leave privilege," as used in the last sentence of Section 1, refers to the privilege of having a fixed 15-day sick leave with pay which, as
mandated by Section 1, only the non-intermittent workers are entitled to. This fixed 15-day sick leave with pay benefit should be distinguished from
the variable number of days of sick leave, not to exceed 15 days, extended to intermittent workers under Section 3 depending on the number of hours
of service rendered to the company, including overtime pursuant to the schedule provided therein. It is only fair and reasonable for petitioner-
company not to stipulate a fixed 15-day sick leave with pay for its regular intermittent workers since, as the term "intermittent" implies, there is
irregularity in their work-days. Reasonable and practical interpretation must be placed on contractual provisions. Interpretatio fienda est ut res magis
valeat quam pereat. Such interpretation is to be adopted, that the thing may continue to have efficacy rather than fail.

An employer may not unilaterally withdraw benefits enjoyed for a long time by its employees.—Whatever doubt there may have been early on was
clearly obliterated when petitioner-company recognized the said privilege and paid its intermittent workers the cash equivalent of the unenjoyed
portion of their sick leave with pay benefits during the lifetime of the CBA of October 16, 1985 until three (3) months from its renewal on April 15,
1989. Well-settled is it that the said privilege of commutation or conversion to cash, being an existing benefit, the petitioner-company may not
unilaterally withdraw, or diminish such benefits. It is a fact that petitioner-company had, on several instances in the past, granted and paid the cash
equivalent of the unenjoyed portion of the sick leave benefits of some intermittent workers. Under the circumstances, these may be deemed to have
ripened into company practice or policy which cannot be peremptorily withdrawn.

Voluntary arbitrator may order grant of benefits as part of his authority to interpret a CBA.—Moreover, petitioner-company's objection to the
authority of the Voluntary Arbitrator to direct the commutation of the unenjoyed portion of the sick leave with pay benefits of intermittent workers in
his decision is misplaced. Article 261 of the Labor Code is clear. The questioned directive of the herein public respondent is the necessary
consequence of the exercise of his arbitral power as Voluntary Arbitrator under Article 261 of the Labor Code "to hear and decide all unresolved
grievances arising from the interpretation or implementation of the Collective Bargaining Agreement." We, therefore, find that no grave abuse of
discretion was committed by public respondent in issuing the award (decision). Moreover, his interpretation of Sections 1 and 3, Article VIII of the
1989 CBA cannot be faulted with and is absolutely correct.

RTG Construction vs. Facto,

Labor Law; Termination of Employment; Due Process; Procedural due process in the dismissal of employees requires notice and hearing.—
Procedural due process in the dismissal of employees requires notice and hearing. The employer must furnish the employee two written notices
before termination may be effected. The first notice apprises the employee of the particular acts or omissions for which his dismissal is sought, while
the second notice informs the employee of the employer’s decision to dismiss him. The requirement of a hearing, on the other hand, is complied with
as long as there is an opportunity to be heard; an actual hearing need not necessarily be conducted.

Money Claims; Evidence; Burden of Proof; Where the employee alleges nonpayment, the general rule is that the burden rests on the employer to
prove payment, rather than on the employee to prove nonpayment.—Facto claims that he was not paid the above-mentioned benefits for certain
periods during his employment. Where the employee alleges nonpayment, the general rule is that the burden rests on the employer to prove payment,
rather than on the employee to prove nonpayment. The reason for the rule is that the pertinent personnel files, payrolls, records, remittances and
similar documents—which will show that the 13th month pay, service incentive leave and other claims of workers, have been paid—are not in the
possession of the employee, but in the custody and absolute control of the employer. Since, in the instant case, petitioners have not shown any proof
of payment of the correct amount of 13th month pay and service incentive leave pay, the Court affirms the rulings of the Labor Arbiter, the NLRC
and the CA, awarding Facto’s monetary claims.

Attorney’s Fees; Settled is the rule that in actions for recovery of wages, or where an employee was forced to litigate and, thus, incur expenses to
protect his rights and interests, a monetary award by way of attorney’s fees is justifiable.—Finally, we find no error committed by the CA in
affirming the award of attorney’s fees. Settled is the rule that in actions for recovery of wages, or where an employee was forced to litigate and, thus,
incur expenses to protect his rights and interests, a monetary award by way of attorney’s fees is justifiable under Article 111 of the Labor Code;
Section 8, Rule VIII, Book III of its Implementing Rules; and paragraph 7, Article 2208 of the Civil Code. The award of attorney’s fees is proper,
and there need not be any showing that the employer acted maliciously or in bad faith when it withheld the wages. There need only be a showing that
the lawful wages were not paid accordingly.
Babas vs. Lorenzo Shipping,

Labor Law; Labor-Only Contracting; The parties cannot dictate by the mere expedience of a unilateral declaration in a contract the character of
their business.—In declaring BMSI as an independent contractor, the CA, in the challenged Decision, heavily relied on the provisions of the
Agreement, wherein BMSI declared that it was an independent contractor, with substantial capital and investment. De Los Santos v. NLRC, 372
SCRA 723 (2001), instructed us that the character of the business, i.e., whether as labor-only contractor or as job contractor, should be measured in
terms of, and determined by, the criteria set by statute. The parties cannot dictate by the mere expedience of a unilateral declaration in a contract the
character of their business.

In distinguishing between prohibited labor-only contracting and permissible job contracting, the totality of the facts and the surrounding
circumstances of the case are to be considered.—Thus, in distinguishing between prohibited labor-only contracting and permissible job contracting,
the totality of the facts and the surrounding circumstances of the case are to be considered. Labor-only contracting, a prohibited act, is an
arrangement where the contractor or subcontractor merely recruits, supplies, or places workers to perform a job, work, or service for a principal. In
labor-only contracting, the following elements are present: (a) the contractor or subcontractor does not have substantial capital or investment to
actually perform the job, work, or service under its own account and responsibility; and (b) the employees recruited, supplied, or placed by such
contractor or subcontractor perform activities which are directly related to the main business of the principal. On the other hand, permissible job
contracting or subcontracting refers to an arrangement whereby a principal agrees to put out or farm out with the contractor or subcontractor the

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performance or completion of a specific job, work, or service within a definite or predetermined period, regardless of whether such job, work, or
service is to be performed or completed within or outside the premises of the principal.

Job Contracting; Requisites.—A person is considered engaged in legitimate job contracting or subcontracting if the following conditions concur: (a)
The contractor carries on a distinct and independent business and undertakes the contract work on his account under his own responsibility according
to his own manner and method, free from the control and direction of his employer or principal in all matters connected with the performance of his
work except as to the results thereof; (b) The contractor has substantial capital or investment; and (c) The agreement between the principal and the
contractor or subcontractor assures the contractual employees’ entitlement to all labor and occupational safety and health standards, free exercise of
the right to self-organization, security of tenure, and social welfare benefits.

Burden of Proof; The law casts the burden on the contractor to prove that it has substantial capital, investment, tools, etc.—employees need not
prove that the contractor does not have substantial capital, investment, and tools to engage in job-contracting.—LSC was unable to present proof that
BMSI had substantial capital. The record before us is bereft of any proof pertaining to the contractor’s capitalization, nor to its investment in tools,
equipment, or implements actually used in the performance or completion of the job, work, or service that it was contracted to render. What is clear
was that the equipment used by BMSI were owned by, and merely rented from, LSC. In Mandaue Galleon Trade, Inc. v. Andales, 548 SCRA 17
(2008), we held: The law casts the burden on the contractor to prove that it has substantial capital, investment, tools, etc. Employees, on the other
hand, need not prove that the contractor does not have substantial capital, investment, and tools to engage in job-contracting.

A Certificate of Registration issued by the Department of Labor and Employment is not conclusive evidence of such status—the fact of registration
simply prevents the legal presumption of being a mere labor-only contractor from arising.—The CA erred in considering BMSI’s Certificate of
Registration as sufficient proof that it is an independent contractor. In San Miguel Corporation v. Vicente B. Semillano, Nelson Mondejas, Jovito
Remada, Alilgilan Multi-Purpose Coop (AMPCO), and Merlyn N. Policarpio, 623 SCRA 114 (2010), we held that a Certificate of Registration
issued by the Department of Labor and Employment is not conclusive evidence of such status. The fact of registration simply prevents the legal
presumption of being a mere labor-only contractor from arising.

Where an entity is classified as a labor-only contractor, the workers it supplies to another become regular employees of the latter, and such workers
having gained regular status are entitled to security of tenure.—BMSI can only be classified as a labor-only contractor. The CA, therefore, erred
when it ruled otherwise. Consequently, the workers that BMSI supplied to LSC became regular employees of the latter. Having gained regular status,
petitioners were entitled to security of tenure and could only be dismissed for just or authorized causes and after they had been accorded due process.
Petitioners lost their employment when LSC terminated its Agreement with BMSI. However, the termination of LSC’s Agreement with BMSI cannot
be considered a just or an authorized cause for petitioners’ dismissal.

Superior Packaging vs. Balagsa

Labor Law; Labor-Only Contracting; Labor-only contracting is prohibited and the person acting as contractor shall be considered merely as an
agent or intermediary of the employer who shall be responsible to the workers in the same manner and extent as if the latter were directly employed
by him.—At the time of the respondents’ employment in 1998, the applicable regulation was DOLE Department Order No. 10, Series of 1997. Under
said Department Order, labor-only contracting was defined as follows: Sec. 9. Labor-only contracting.—(a) Any person who undertakes to supply
workers to an employer shall be deemed to be engaged in labor only contracting where such person: (1) Does not have substantial capital or
investment in the form of tools, equipment, machineries, work premises and other materials; and (2) The workers recruited and placed by such
persons are performing activities which are directly related to the principal business or operations of the employer in which workers are habitually
employed. Labor-only contracting is prohibited and the person acting as contractor shall be considered merely as an agent or intermediary of the
employer who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by him.

A finding that a contractor is a “labor-only” contractor is equivalent to declaring that there is an employer-employee relationship between the
principal and the employees of the supposed contractor, and the “labor-only” contractor is considered as a mere agent of the principal, the real
employer.—A finding that a contractor is a “labor-only” contractor is equivalent to declaring that there is an employer-employee relationship between
the principal and the employees of the supposed contractor, and the “labor-only” contractor is considered as a mere agent of the principal, the real
employer. The former becomes solidarily liable for all the rightful claims of the employees. The petitioner therefore, being the principal employer
and Lancer, being the labor-only contractor, are solidarily liable for respondents’ unpaid money claims.

Boie Takeda vs. Dela Serna

Labor Law; 13th Month Pay; Memorandum Order No. 28 did not repeal, supersede or abrogate P.D. 851, thus the interpretation given to the term
“basic salary” remains the same.—Contrary to respondents’ contention, Memorandum Order No. 28 did not repeal, supersede or abrogate P.D. 851.
As may be gleaned from the language of Memorandum Order No. 28, it merely “modified” Section 1 of the decree by removing the P1,000.00 salary
ceiling. The concept of 13th Month Pay as envisioned, defined and implemented under P.D. 851 remained unaltered, and while entitlement to said
benefit was no longer limited to employees receiving a monthly basic salary of not more than P1,000.00, said benefit was, and still is, to be computed
on the basic salary of the employee-recipient as provided under P.D. 851. Thus, the interpretation given to the term “basic salary” as defined in P.D.
851 applies equally to “basic salary” under Memorandum Order No. 28.

“Basic salary”; Commissions do not form part of the “basic salary”.—In remunerative schemes consisting of a fixed or guaranteed wage plus
commission, the fixed or guaranteed wage is patently the “basic salary” for this is what the employee receives for a standard work period.
Commissions are given for extra efforts exerted in consummating sales or other related transactions. They are, as such, additional pay, which this
Court has made clear do not form part of the “basic salary.”

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Present case distinguished from Songco v. National Labor Relations Commission.—Respondents would do well to distinguish this case from Songco
vs. National Labor Relations Commission, supra, upon which they rely so heavily. What was involved therein was the term “salary” without the
restrictive adjective “basic”. Thus, in said case, we construed the term in its generic sense to refer to all types of “direct remunerations for services
rendered,” including commissions. In the same case, we also took judicial notice of the fact “that some salesmen do not receive any basic salary but
depend on commissions and allowances or commissions alone, although an employer-employee relationship exists,” which statement is quite
significant in that it speaks of a “basic salary” apart and distinct from “commissions” and “allowances”. Instead of supporting respondents’ stand, it
would appear that Songco itself recognizes that commissions are not part of “basic salary.”

Administrative Law; An administrative agency cannot amend an act of Congress.—In including commissions in the computation of the 13th month
pay, the second paragraph of Section 5(a) of the Revised Guidelines on the Implementation of the 13th Month Pay Law unduly expanded the concept
of “basic salary” as defined in P.D. 851. It is a fundamental rule that implementing rules cannot add to or detract from the provisions of the law it is
designed to implement. Administrative regulations adopted under legislative authority by a particular department must be in harmony with the
provisions of the law they are intended to carry into effect. They cannot widen its scope. An administrative agency cannot amend an act of Congress.

Barayoga vs. Asset Privatization Trust

Labor Law; Contracts; Collective Bargaining Agreements; In Sundowner Development Corp. v. Drilon, 180 SCRA 14, 18 (1989), the Supreme Court
ruled that, unless expressly assumed, labor contracts like collective bargaining agreements are not enforceable against the transferee of an
enterprise. Labor contracts are in personam and thus binding only between the parties.—The duties and liabilities of BISUDECO, including its
monetary liabilities to its employees, were not all automatically assumed by APT as purchaser of the foreclosed properties at the auction sale. Any
assumption of liability must be specifically and categorically agreed upon. In Sundowner Development Corp. v. Drilon, the Court ruled that, unless
expressly assumed, labor contracts like collective bargaining agreements are not enforceable against the transferee of an enterprise. Labor contracts
are in personam and thus binding only between the parties.

Nasipit Lumber vs. NWCP,

Labor Law; National Wages and Productivity Commission; The NWPC has the power not only to prescribe guidelines to govern wage orders but
also to issue exemptions therefrom.—Interpreting the above provision, this Court through Justice Artemio V. Panganiban, in Nasipit Lumber
Company, Inc. vs. National Wages and Productivity Commission, held: “The foregoing clearly grants the NWPC, x x x, the power to ‘prescribe the
rules and guidelines’ for the determination of minimum wage and productivity measures. x x x, the NWPC has the power not only to prescribe
guidelines to govern wage orders, but also to issue exemptions therefrom, x x x. In short, the NWPC lays down the guidelines which the RTWPB
implements.”

NWPC did not act with grave abuse of discretion in denying petitioners’ application for extension for another year of their full exemption from
compliance with Wage Order No. RX-03.—In affirming the RTWPB’s Resolution denying petitioners’ application for extension for another year of
their full exemption from compliance with Wage Order No. RX-03, the NWPC did not act with grave abuse of discretion. On the contrary, it merely
applied its own Guideline No. 01, Series of 1992 limiting the duration of exemption to only one (1) year.

Bankard Employees vs. NLRC

Labor Law; Definition of the term “Wage Distortion.”–Upon the enactment of R.A. No. 6727 (WAGE RATIONALIZATION ACT, amending,
among others, Article 124 of the Labor Code) on June 9, 1989, the term “wage distortion” was explicitly defined as: . . . a situation where an increase
in prescribed wage rates results in the elimination or severe contraction of intentional quantitative differences in wage or salary rates between and
among employee groups in an establishment as to effectively obliterate the distinctions embodied in such wage structure based on skills, length of
service, or other logical bases of differentiation.

Elements of Wage Distortion.–Prubankers Association v. Prudential Bank and Trust Company laid down the four elements of wage distortion, to wit:
(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.

In a problem dealing with “wage distortion,” the basic assumption is that there exists a grouping or classification of employees that establishes
distinctions among them on some relevant or legitimate bases.–Normally, a company has a wage structure or method of determining the wages of its
employees. In a problem dealing with “wage distortion,” the basic assumption is that there exists a grouping or classification of employees that
establishes distinctions among them on some relevant or legitimate bases.

For purposes of determining the existence of wage distortion, employees cannot create their own independent classification and use it as a basis to
demand an across-the-board increase in salary.– Moreover, for purposes of determining the existence of wage distortion, employees cannot create
their own independent classification and use it as a basis to demand an across-the-board increase in salary.

The formulation of a wage structure through the classification of employees is a matter of management judgment and discretion.–As National
Federation of Labor v. NLRC, et al. teaches, the formulation of a wage structure through the classification of employees is a matter of management
judgment and discretion.

Mere factual existence of wage distortion does not ipso facto result to an obligation to rectify it, absent a law or other source of obligation which
requires its rectification.–The mere factual existence of wage distortion does not, however, ipso facto result to an obligation to rectify it, absent a law

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or other source of obligation which requires its rectification. Unlike in Metro Transit then where there existed a “company practice,” no such
management practice is herein alleged to obligate Bankard to provide an across-the-board increase to all its regular employees. Bankard Employees
Union-Workers Alliance Trade Unions vs. National Labor Relations Commission.

VIII. WORKING CONDITIONS FOR SPECIAL GROUPS OF EMPLOYEES

PLDT vs. NLRC & Grace De Guzman

Labor Law; Dismissals; Petitioner’s policy of not accepting or considering as disqualified from work any woman worker who contracts marriage
runs afoul of the test of, and the right against discrimination afforded all women workers by our labor laws and by no less than the Constitution.—In
the case at bar, petitioner’s policy of not accepting or considering as disqualified from work any woman worker who contracts marriage runs afoul of
the test of, and the right against, discrimination, afforded all women workers by our labor laws and by no less than the Constitution. Contrary to peti-
tioner’s as sertion that it dismissed private respondent from employment on account of her dishonesty, the record discloses clearly that her ties with
the company were dissolved principally because of the company’s policy that married women are not qualified for employment in PT&T, and not
merely because of her supposed acts of dishonesty.

While loss of confidence is a just cause for termination of employment, it should not be simulated.—Verily, private respondent’s act of concealing the
true nature of her status from PT&T could not be properly characterized as willful or in bad faith as s he was m oved to act the way she did mainly
because she wanted to retain a permanent job in a stable company. In other words, she was practically forced by that very same illegal company
policy into misrepresenting her civil status for fear of being disqualified from work. While loss of confidence is a just cause for termination of
employment, it should not be simulated. It must rest on an actual breach of duty committed by the employee and not on the employer’s caprices.
Furthermore, it should never be used as a subterfuge for causes which are improper, illegal, or unjustified.

The primary standard of determining regular employment is the reasonable connection between the activity performed by the employee in relation to
the business or trade of the employer.—Private respondent, it mus t be observed, had gained regular status at the time of her dismissal. When she was
served her walking papers on January 29, 1992, she was about to complete the probationary period of 150 days as she was contracted as a
probationary employee on September 2, 1991. That her dismissal would be effected just when her probationary period was winding down clearly
raises the plausible conclusion that it was done in order to prevent her from earning security of tenure. On the other hand, her earlier stints with the
company as reliever were undoubtedly those of a regular employee, even if the same were for fixed periods, as she performed activities which were
essential or necessary in the usual trade and business of PT&T. The primary standard of determining regular employment is the reasonable
connection between the activity performed by the employee in relation to the busines s or trade of the employer.

Policy of Philippine Air Lines requiring that prospective flight attendants must be single and that they will be automatically separated from the
service once they marry declared void in Zialcita, et al. v. Philippine Air Lines.—It would be worthwhile to reflect upon and adopt here the
rationalization in Zialcita, et al. vs. Philippine Air Lines, a decision that emanated from the Office of the President. There, a policy of Philippine Air
Lines requiring that prospective flight attendants must be single and that they will be automatically s eparated from the service once they marry was
declared void, it being violative of the clear mandate in Article 136 of the Labor Code with regard to discrimination against married women.

While it is true that the parties to a contract may establish any agreements, terms and conditions that they may deem convenient, the same should not
be contrary to law, morals, good customs, public order or public policy.—Petitioner’s policy is not only in derogation of the provisions of Article
136 of the Labor Code on the right of a woman to be free from any kind of stipulation against marriage in connection with her employment, but it
likewise assaults good morals and public policy, tending as it does to deprive a woman of the freedom to choose her status, a privilege that by all
accounts inheres in the individual as an intangible and inalienable right. Hence, while it is true that the parties to a contract may establish any
agreements, terms, and conditions that they may deem convenient, the same should not be contrary to law, morals, good customs, public order, or
public policy. Carried to its logical consequences, it may even be said that petitioner’s policy against legitimate marital bonds would encourage illicit
or common-law relations and subvert the sacrament of marriage.

The relations between capital and labor are not merely contractual, impressed as they are with so much public interest that the same should yield to
the common good.—Parenthetically, the Civil Code provisions on the contract of labor state that the relations between the parties, that is, of capital
and labor, are not merely contractual, impressed as they are with so much public interest that the same should yield to the common good. It goes on
to intone that neither capital nor labor should visit acts of oppression against the other, nor impair the interest or convenience of the public. In the
final reckoning, the danger of just such a policy against marriage followed by petitioner PT&T is that it strikes at the very essence, ideals and purpose
of marriage as an inviolable social institution and, ultimately, of the family as the foundation of the nation. That it must be effectively interdicted here
in all its indirect, disguised or dissembled forms as discriminatory conduct derogatory of the laws of the land is not only in order but imperatively
required.

Apex Mining vs. NLRC

Labor Laws; Domestic Helper, defined.—Under Rule XIII, Section 1(b), Book 3 of the Labor Code, as amended, the terms “househelper” or
“domestic servant” are defined as follows: “The term ‘househelper’ as used herein is synonymous to the term ‘domestic servant’ and shall refer to
any person, whether male or female, who renders services in and about the employer’s home and which services are usually necessary or desirable
for the maintenance and enjoyment thereof, and ministers exclusively to the personal comfort and enjoyment of the employer’s family.” The
foregoing definition clearly contemplates such househelper or domestic servant who is employed in the employer’s home to minister exclusively to
the personal comfort and enjoyment of the employer’s family. Such definition covers family drivers, domestic servants, laundry women, yayas,
gardeners, houseboys and other similar househelps.

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Laundrywoman in staffhouses of a company, not included in the definition of domestic helpers.—The definition cannot be interpreted to include
househelp or laundrywomen working in staffhouses of a company, like petitioner who attends to the needs of the company’s guest and other persons
availing of said facilities. By the same token, it cannot be considered to extend to the driver, houseboy, or gardener exclusively working in the
company, the staffhouses and its premises. They may not be considered as within the meaning of a “househelper” or “domestic servant” as above-
defined by law.

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.—The criteria is the personal comfort and enjoyment of the family of the employer in the home of said employer. While it may
be true that the nature of the work of a househelper, domestic servant or laundrywoman in a home or in a company staffhouse may be similar in
nature, the difference in their circumstances is that in the former instance they are actually serving the family while in the latter case, whether it is a
corporation or a single proprietorship engaged in business or industry or any other agricultural or similar pursuit, service is being rendered in the
staffhouses or within the premises of the business of the employer. In such instance, they are employees of the company or employer in the business
concerned entitled to the privileges of a regular employee. Petitioner contends that it is only when the househelper or domestic servant is assigned to
certain aspects of the business of the employer that such househelper or domestic servant may be considered as such an employee. The Court finds no
merit in making any such distinction. The mere fact that the househelper or domestic servant is working within the premises of the business of the
employer and in relation to or in connection with its business, as in its staffhouses for its guest or even for its officers and employees, warrants the
conclusion that such househelper or domestic servant is and should be considered as a regular employee of the employer and not as a mere family
househelper or domestic servant as contemplated in Rule XIII, Section 1(b), Book 3 of the Labor Code, as amended.

Barcenas vs. NLRC

Labor Law; Employer-employee relationship; Court agrees with the petitioner’s claim that she was a regular employee of the Manila Buddhist
Temple as Secretary and Interpreter of its Head Monk.—At the outset, however, We agree with the petitioner’s claim that she was a regular
employee of the Manila Buddhist Temple as secretary and interpreter of its Head Monk, Su. As Head Monk, President and Chairman of the Board of
Directors of the Poh Toh Buddhist Association of the Philippines, Su was empowered to hire the petitioner under Article V of the By-laws of the
Association.

The work that petitioner performed in the temple could not be categorized as mere domestic work.—Moreover, the work that petitioner performed in
the temple could not be categorized as mere domestic work. Thus, We find that petitioner, being proficient in the Chinese language, attended to the
visitors, mostly Chinese, who came to pray or seek advice before Buddha for personal or business problems; arranged meetings between these
visitors and Su and supervised the preparation of the food for the temple visitors; acted as tourist guide of foreign visitors; acted as liaison with some
government offices; and made the payment for the temple’s Meralco, MWSS and PLDT bills. Indeed, these tasks may not be deemed activities of a
household helper. They were essential and important to the operation and religious functions of the temple.

Benefits; Prescription; All money claims arising from employer-employee relations must be filed within three years from the time the cause of action
accrued otherwise they shall forever be barred; Petitioner’s claim for unpaid wages has already prescribed.—Anent the petitioner’s claim for
unpaid wages since May, 1982 which she filed only in 1986, We hold that the same has already prescribed. Under Article 292 of the Labor Code, all
money claims arising from employer-employee relations must be filed within three years from the time the cause of action accrued, otherwise they
shall forever be barred.
Remington vs. Castaneda

Employer-Employee Relationship; That a person works within company premises, and that she does not cater exclusively to the personal comfort of a
company officer and his family, is reflective of the existence of the company’s right of control over her functions, which is the primary indicator of
the existence of an employer-employee relationship.—In the case at bar, the petitioner itself admits in its position paper that respondent worked at the
company premises and her duty was to cook and prepare its employees’ lunch and merienda. Clearly, the situs, as well as the nature of respondent’s
work as a cook, who caters not only to the needs of Mr. Tan and his family but also to that of the petitioner’s employees, makes her fall squarely
within the definition of a regular employee under the doctrine enunciated in the Apex Mining case. That she works within company premises, and
that she does not cater exclusively to the personal comfort of Mr. Tan and his family, is reflective of the existence of the petitioner’s right of control
over her functions, which is the primary indicator of the existence of an employer-employee relationship.

The determination of the existence of an employer-employee relationship is defined by law according to the facts of each case, regardless of the
nature of the activities involved.—It is wrong to say that if the work is not directly related to the employer’s business, then the person performing
such work could not be considered an employee of the latter. The determination of the existence of an employer-employee relationship is defined by
law according to the facts of each case, regardless of the nature of the activities involved. Indeed, it would be the height of injustice if we were to
hold that despite the fact that respondent was made to cook lunch and merienda for the petitioner’s employees, which work ultimately redounded to
the benefit of the petitioner corporation, she was merely a domestic worker of the family of Mr. Tan.

The mere fact that the househelper or domestic servant is working within the premises of the business of the employer and in relation to or in
connection with its business, as in its staffhouses for its guest or even for its officers and employees, warrants the conclusion that such househelper or
domestic servant is and should be considered as a regular employee of the employer and not as a mere family househelper or domestic servant as
contemplated in Rule XIII, Section 1(b), Book 3 of the Labor Code, as amended.”

Abandonment; Words and Phrases; Abandonment is the deliberate and unjustified refusal of an employee to resume his employment—it is a form of
neglect of duty; hence, a just cause for termination of employment by the employer.—Abandonment is the deliberate and unjustified refusal of an
employee to resume his employment. It is a form of neglect of duty; hence, a just cause for termination of employment by the employer under Article
282 of the Labor Code, which enumerates the just causes for termination by the employer. For a valid finding of abandonment, these two factors

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should be present: (1) the failure to report for work or absence without valid or justifiable reason; and (2) a clear intention to sever employer-
employee relationship, with the second as the more determinative factor which is manifested by overt acts from which it may be deduced that the
employee has no more intention to work. The intent to discontinue the employment must be shown by clear proof that it was deliberate and
unjustified. This, the petitioner failed to do in the case at bar. Alongside the petitioner’s contention that it was the respondent who quit her
employment and refused to return to work, greater stock may be taken of the respondent’s immediate filing of her complaint with the NLRC. Indeed,
an employee who loses no time in protesting her layoff cannot by any reasoning be said to have abandoned her work, for it is well-settled that the
filing of an employee of a complaint for illegal dismissal with a prayer for reinstatement is proof enough of her desire to return to work, thus,
negating the employer’s charge of abandonment.

IX. HEALTH, SAFETY & SOCIAL WELFARE BENEFITS

Vistal vs. ECC

Employees’ Compensation Commission; Workmen’s Compensation Act; An employee is entitled to compensation benefits when he contracts an
illness directly caused by such employment or aggravated by or the result of the nature of such employment.—Under the Workmen’s Compensation
Act, an employee is entitled to compensation benefits when he contracts an illness directly caused by such employment, or aggravated by or the
result of the nature of such employment (Section 2, Act No. 3428, amended). Moreover, the principle of presumption of compensability, although
rebuttable by substantial evidence to the contrary, obtained under said law (Section 44, Act 3428, as amended).

Tuberculosis considered occupational disease or work connected in such occupations as that of a teacher, laborer, driver, land inspector and other
similar occupations.—In any event, it has been held that tuberculosis may be considered an occupational disease or work-connected in such
occupations as that of a teacher, laborer, driver, land inspector and other similar occupations; hence compensable.

Prescription; Pursuant to Article 1144 of the Civil Code an action upon an obligation created by law must be brought within ten years from the time
such right of action accrues.—Whether or not petitioner’s claim has already prescribed, the Solicitor General is of the view that the same had been
filed well within the ten-year prescriptive period. The law and jurisprudence limit the period of filing of any cause of action under the Workmen’s
Compensation Act (WCA) to ten (10) years. This is so because any claim under the WCA creates an obligation. Pursuant to Article 1144 of the Civil
Code, an action upon an obligation created by law must be brought within ten years from the time such right of action accrues. Even the respondent
ECC admits that it erred in applying the provisions of Article 1144 of the Civil Code on prescriptive period.

That any doubt must be resolved in favor of the worker is a time-honored principle.—Respondents’ record shows that petitioner’s ailments accrued in
1973 without any specific date being stated therein. Accordingly, under the time-honored doctrine that any doubt must be resolved in favor of the
worker, petitioner’s claim for compensation, filed on September 9, 1983, must be construed as having been filed within the allowable period of ten
(10) years from accrual of cause of action.

Hinoguin vs. ECC

Labor Law; Labor Standards; Death Benefits; Work-Connected Injuries; The work-connected character of Sgt. Hinoguin’s injury and death was not
precluded by the fact that he was on an overnight pass at the time he was accidentally shot by a fellow soldier.–––Turning to the question of whether
Sgt. Hinoguin was performing official functions at the time he sustained the gunshot wound, it has already been pointed out above that the Line of
Duty Board of Officers of the 14th Infantry Battalion Headquarters had already determined that the death of Sgt. Hinoguin had occurred “in line of
duty.” It may be noted in this connection that a soldier on active duty status is really on 24 hours a day official duty status and is subject to military
discipline and military law 24 hours a day. He is subject to call and to the orders of his superior officers at all times, 7 days a week, except, of course,
when he is on vacation leave status (which Sgt. Hinoguin was not). Thus, we think that the work-connected character of Sgt. Hinoguin’s injury and
death was not effectively precluded by the simple circumstance that he was on an overnight pass to go to the home of Dft. Alibuyog, a soldier under
his own command. Sgt. Hinoguin did not effectively cease performing “official functions” because he was granted a pass. While going to a fellow
soldier’s home for a few hours for a meal and some drinks was not a specific military duty, he was nonetheless in the course of performance of
official functions. Indeed, it appears to us that a soldier should be presumed to be on official duty unless he is shown to have clearly and
unequivocally put aside that status or condition temporarily by, e.g., going on an approved vacation leave. Even vacation leave may, it should be
remembered, be preterminated by superior orders.

From the very nature of his occupation, a soldier assumes the risk of being accidentally shot or fired upon by his fellow soldiers.–––More generally,
a soldier in the Armed Forces must accept certain risks, for instance, that he will be fired upon by forces hostile to the State or the Government. That
is not, of course, the only risk that he is compelled to accept by the very nature of his occupation or profession as a soldier. Most of the persons
around him are necessarily also members of the Armed Forces who carry firearms, too. In other words, a soldier must also assume the risk of being
accidentally fired upon by his fellow soldiers. This is reasonably regarded as a hazard or risk inherent in his employment as a soldier.

The death of Sgt. Hinoguin which resulted from the accidental discharge of his fellow soldier’s firearm, is work-connected and therefore,
compensable.–––We hold, therefore, that the death of Sgt. Hinoguin that resulted from his being hit by an accidental discharge of the M-16 of Dft.
Alibuyog, in the circumstances of this case, arose out of and in the course of his employment as a soldier on active duty status in the Armed Forces of
the Philippines and hence compensable.

Labor Code provisions must be given interpretation most likely to effectuate their beneficient and humanitarian purposes.–––It may be well to add
that what we have written above in respect of performance of official functions of members of the Armed Forces must be understood in the context
of the specific purpose at hand, that is, the interpretation and application of the compensation provisions of the Labor Code and applicable related
regulations. It is commonplace that those provisions should, to the extent possible, be given the interpretation most likely to effectuate the beneficient
and humanitarian purposes infusing the Labor Code.

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 Valeriano vs. ECC

Employees’ Compensation; Words and Phrases; An injury or accident is said to arise “in the course of employment” when it takes place within the
period of the employment, at a place where the employee may reasonably be, and while he is fulfilling his duties or is engaged in doing something
incidental thereto.—In Iloilo Dock & Engineering Co. v. Workmen’s Compensation Commission, the Court explained the phrase “arising out of and
in the course of employment” in this wise: “The two components of the coverage formula—“arising out of and “in the course of employment”—are
said to be separate tests which must be independently satisfied; however, it should not be forgotten that the basic concept of compensation coverage
is unitary, not dual, and is best expressed in the word, “work-connection,” because an uncompromising insistence on an independent application of
each of the two portions of the test can, in certain cases, exclude clearly work-connected injuries. The words “arising out of refer to the origin or
cause of the accident, and are descriptive of its character, while the words “in the course of refer to the time, place and circumstances under which the
accident takes place. “As a matter of general proposition, an injury or accident is said to arise “in the course of employment” when it takes place
within the period of the employment, at a place where the employee may reasonably x x x be, and while he is fulfilling his duties or is engaged in
doing something incidental thereto.”

The injury and the resulting disability sustained by reason of employment are compensable regardless of the place where the injury occurred, if it
can be proven that at the time of the injury, the employee was acting within the purview of his or her employment and performing an act reasonably
necessary or incidental thereto.—For injury to be compensable, the standard of “work connection” must be substantially satisfied. The injury and the
resulting disability sustained by reason of employment are compensable regardless of the place where the injury occurred, if it can be proven that at
the time of the injury, the employee was acting within the purview of his or her employment and performing an act reasonably necessary or
incidental thereto.

24-hour-Duty Doctrine; Firemen; The 24-hour-duty doctrine is inapplicable where the employee, a fireman, was neither at his assigned work place
nor in pursuit of the orders of his superiors when he met an accident and, more importantly, he was not doing an act within his duty and authority as
a firetruck driver, or any other act of such nature, at the time he sustained his injuries.—We recognize the importance and laud the efforts of firemen
in our society. Indeed, the nature of their job requires them to be always on alert, like soldiers and police officers, and to respond to fire alarms which
may occur anytime of the day. Be that as it may, the circumstances in the present case do not call for the application of Hinoguin and Nitura.
Following the rationalization in GSIS, the 24-hour-duty doctrine cannot be applied to petitioner’s case, because he was neither at his assigned work
place nor in pursuit of the orders of his superiors when he met an accident. But the more important justification for the Court’s stance is that he was
not doing an act within his duty and authority as a firetruck driver, or any other act of such nature, at the time he sustained his injuries. We cannot
find any reasonable connection between his injuries and his work as a firetruck driver.

Social Justice; True, the policy is to extend the applicability of P.D. No. 626 to as many qualified employees as possible, but this must be balanced by
the equally vital interest of denying undeserving claims for compensation.—While we sympathize with petitioner’s plight, we cannot grant his
Petition. True, the policy is to extend the applicability of Presidential Decree No. 626 to as many qualified employees as possible, but this must be
balanced by the equally vital interest of denying undeserving claims for compensation. Considering the circumstances in petitioner’s case, he cannot
be deemed qualified for disability benefits under the law.

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