CASES FOR THIRD WEEK

1.) ARIEL L. DAVID, doing

v.
JOHN G. MACASIO, Respondent.

business

under

the

name

and

style

"YIELS

HOG

DEALER," Petitioner,

G.R. No. 195466 July 2, 2014

TOPIC:

Art. 82 Labor Code

Book III, Rule 1, Sec. 2 IRR (Labor Code)
The IRR therefore validly qualifies and limits the general exclusion of "workers paid by results" found in Article 82
from the coverage of holiday and SIL pay. This is the only reasonable interpretation since the determination of
excluded workers who are paid by results from the coverage of Title I is "determined by the Secretary of Labor in
appropriate regulations."
Employee engaged in pakyaw basis is not excluded from the coverage of SIL or Holiday pay provided they are not
field personnel.
The governing law on 13th moth pay is PD No. 851.53 exempts employees paid on task basis without reference
to field personnel.

FACTS: Macasio filed before the LA a complaint against petitioner for non-payment of overtime pay, holiday pay and 13th
month pay. He also claimed payment for moral and exemplary damages and attorneys fees. And payment for service
incentive leave (SIL).
Macasio alleged that he had been working as a butcher for David since January 6, 1995.
Macasio claimed that David exercised effective control and supervision over his work, pointing out that David:
(1) set the work day, reporting time and hogs to be chopped, as well as the manner by which he was to perform his work;
(2) daily paid his salary of P700.00, which was increased from P600.00 in 2007, P500.00 in 2006 and P400.00 in 2005; and
(3) approved and disapproved his leaves. Macasio added that David owned the hogs delivered for chopping, as well as the
work tools and implements; the latter also rented the workplace
In his defense, David claimedThat he hired Macasio as a butcher or chopper on "pakyaw" or task basis who is, therefore,
not entitled to overtime pay, holiday pay and 13th month pay pursuant to the provisions of the IRR of the Labor Code.
LABOR ARBITER
The LA gave credence to Davids claim that he engaged Macasio on "pakyaw" or task basis. The LA noted the following facts
to support this finding: (1) Macasio received the fixed amount of P700.00 for every work done, regardless of the number of
hours that he spent in completing the task and of the volume or number of hogs that he had to chop per engagement; (2)
Macasio usually worked for only four hours, beginning from 10:00 p.m. up to 2:00 a.m. of the following day; and (3)
the P700.00 fixed wage far exceeds the then prevailing daily minimum wage of P382.00. The LA added that the nature of
Davids business as hog dealer supports this "pakyaw" or task basis arrangement. concluded that as Macasio was engaged
on "pakyaw" or task basis, he is not entitled to overtime, holiday, SIL and 13th month pay.
NLRC affirmed the LA ruling. THUS, to the CA via a petition for certiorari.
CA partly granted Macasios certiorari petition and reversed the NLRCs ruling for having been rendered with grave abuse
of discretion.
While the CA agreed with the LA and the NLRC that Macasio was a task basis employee, it nevertheless found Macasio
entitled to his monetary claims following the doctrine laid down in Serrano v. Severino Santos Transit.

The CA explained that as a task basis employee, Macasio is excluded from the coverage of holiday, SIL and 13th month pay
only if he is likewise a "field personnel." As defined by the Labor Code, a "field personnel" is one who performs the work
away from the office or place of work and whose regular work hours cannot be determined with reasonable certainty. In
Macasios case, the elements that characterize a "field personnel" are evidently lacking as he had been working as a
butcher at Davids "Yiels Hog Dealer" business in Sta. Mesa, Manila under Davids supervision and control, and for a fixed
working schedule that starts at 10:00 p.m.
the CA awarded Macasios claim for holiday, SIL and 13th month pay for three years, with 10% attY. fees on the total
monetary award. The CA, however, denied Macasios claim for moral and exemplary damages for lack of basis.
ISSUES: (1) Whether there is employee employer relationship - YES
(2) Whether respondent Macasio engaged on PAKYAW or Task basis employee YES
(3) Whether respondent Macasia is a Field personnel - NO
(4) Whether respondent Macasio is entitled to 3th month pay NO
(5) Whether respondent Macasia is entitled to SIL, Holiday pay YES
RULING:
1.) Whether there is employee employer relationship YES
Macasio is Davids employee
To determine the existence of an employer-employee relationship, four elements generally need to be considered, namely:
(1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power
to control the employees conduct. These elements or indicators comprise the so-called "four-fold" test of employment
relationship. Macasios relationship with David satisfies this test.
First, David engaged the services of Macasio, thus satisfying the element no. 1. David categorically confirmed this fact
when, in his "Sinumpaang Salaysay," he stated that "nag apply po siya sa akin at kinuha ko siya na chopper. Also, Solano
and Antonio stated in their "Pinagsamang Sinumpaang Salaysay"40 that "[k]ami po ay nagtratrabaho sa Yiels xxx na pag-aari
ni Ariel David bilang butcher" and "kilalanamin si xxx Macasio na isa ring butcher xxx ni xxx David at kasama namin siya sa
aming trabaho." Second, David paid Macasios wages. Third, David had been setting the day and time when Macasio should
report for work. This power to determine the work schedule obviously implies power of control. David could regulate
Macasios work and could even refuse to give him any assignment, thereby effectively dismissing him. And fourth, David
had the right and power to control and supervise Macasios work as to the means and methods of performing it. In addition
to setting the day and time when Macasio should report for work.
2.) Whether respondent Macasio engaged on PAKYAW or Task basis employee YES
YES. A distinguishing characteristic of "pakyaw" or task basis engagement, as opposed to straight-hour wage payment, is
the non-consideration of the time spent in working. In a task-basis work, the emphasis is on the task itself, in the sense that
payment is reckoned in terms of completion of the work, not in terms of the number of time spent in the completion of
work.45 Once the work or task is completed, the worker receives a fixed amount as wage, without regard to the standard
measurements of time generally used in pay computation
In Macasios case, the established facts show that he would usually start his work at 10:00 p.m. Thereafter, regardless of
the total hours that he spent at the workplace or of the total number of the hogs assigned to him for chopping, Macasio
would receive the fixed amount of P700.00 once he had completed his task. Clearly, these circumstances show a "pakyaw"
or task basis engagement that all three tribunals uniformly found.

3.) Whether respondent Macasia is a Field personnel NO

Based on the definition of field personnel under Article 82, we agree with the CA that Macasio does not fall under the
definition of "field personnel." The CAs finding in this regard is supported by the established facts of this case: first,
Macasio regularly performed his duties at Davids principal place of business; second, his actual hours of work could be
determined with reasonable certainty; and, third, David supervised his time and performance of duties. Since Macasio
cannot be considered a "field personnel," then he is not exempted from the grant of holiday, SIL pay even as he was
engaged on "pakyaw" or task basis.
4.) Whether respondent Macasio is entitled to 3th month pay NO
that the CA erred in finding that the NLRC gravely abused its discretion in denying this benefit to Macasio.
The governing law on 13th month pay is PD No. 851.53
13th month pay benefits generally cover all employees; an employee must be one of those expressly enumerated to be
exempted. Section 3 of the IRR of P.D. No. 851 enumerates the exemptions from the coverage of 13th month pay benefits.
Under Section 3(e), "employers of those who are paid on xxx task basis, and those who are paid a fixed amount for
performing a specific work, irrespective of the time consumed in the performance thereof" are exempted.
Note that unlike the IRR of the Labor Code on holiday and SIL pay, Section 3(e) of the IRR ofPD No. 851 exempts employees
"paid on task basis" without any reference to "field personnel." This could only mean that insofar as payment of the 13th
month pay is concerned, the law did not intend to qualify the exemption from its coverage with the requirement that the
task worker be a "field personnel" at the same time
5.) Whether respondent Macasia is entitled to SIL, Holiday pay YES
The payment of an employee on task or pakyaw basis alone is insufficient to exclude one from the coverage of SIL and
holiday pay. They are exempted from the coverage of Title I (including the holiday and SIL pay) only if they qualify as "field
personnel." The IRR therefore validly qualifies and limits the general exclusion of "workers paid by results" found in Article
82 from the coverage of holiday and SIL pay. This is the only reasonable interpretation since the determination of
excluded workers who are paid by results from the coverage of Title I is "determined by the Secretary of Labor in
appropriate regulations."
The Cebu Institute Technology ruling was reiterated in 2005 in Auto Bus Transport Systems, Inc., v. Bautista:
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 IRR 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.
The Autobus ruling was in turn the basis of Serrano v. Santos Transit which the CA cited in support of granting Macasios
petition.
In Serrano, the Court, applying the rule on ejusdem generis 50 declared that "employees engaged on task or contract basis
xxx are not automatically exempted from the grant of service incentive leave, unless, they fall under the classification of

field personnel."51 The Court explained that the phrase "including those who are engaged on task or contract basis, purely
commission basis" found in Section 1(d), Rule V of Book III of the IRR should not be understood as a separate classification
of employees to which SIL shall not be granted. Rather, as with its preceding phrase - "other employees whose performance
is unsupervised by the employer" - the phrase "including those who are engaged on task or contract basis" serves to
amplify the interpretation of the Labor Code definition of "field personnel" as those "whose actual hours of work in the
field cannot be determined with reasonable certainty."
__________________________________________________________________________
Under these provisions, the general rule is that holiday and SIL pay provisions cover all employees. To be excluded from
their coverage, an employee must be one of those that these provisions expressly exempt, strictly in accordance with the
exemption. Under the IRR, exemption from the coverage of holiday and SIL pay refer to "field personnel and other
employees whose time and performance is unsupervised by the employer including those who are engaged on task or
contract basis[.]" Note that unlike Article 82 of the Labor Code, the IRR on holiday and SIL pay do not exclude employees
"engaged on task basis" as a separate and distinct category from employees classified as "field personnel." Rather, these
employees are altogether merged into one classification of exempted employees.
REFERENCE:
Provisions governing SIL and holiday pay
Article 82 of the Labor Code provides the exclusions from the coverage of Title I, Book III of the Labor Code - provisions
governing working conditions and rest periods.
Art. 82. Coverage. The provisions of [Title I] shall apply to employees in all establishments and undertakings whether for
profit or not, but not to government employees, managerial employees, field personnel, members of the family of the
employer who are dependent on him for support, domestic helpers, persons in the personal service of another, and
workers who are paid by results as determined by the Secretary of Labor in appropriate regulations.
xxxx
"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
Among the Title I provisions are the provisions on holiday pay (under Article 94 of the Labor Code) and SIL pay (under
Article 95 of the Labor Code). Under Article 82,"field personnel" on one hand and "workers who are paid by results" on the
other hand, are not covered by the Title I provisions. The wordings of Article82 of the Labor Code additionally categorize
workers "paid by results" and "field personnel" as separate and distinct types of employees who are exempted from the
Title I provisions of the Labor Code.
The pertinent portion of Article 94 of the Labor Code and its corresponding provision in the IRR (Section 1, Rule IV of Book
3) reads:
Art. 94. Right to holiday pay. (a) Every worker shall be paid his regular daily wage during regular holidays, except in retail
and service establishments regularly employing less than (10) workers.
xxxx
SECTION 1. Coverage. This Rule shall apply to all employees except:
xxxx
(e)Field personnel and other employees whose time and performance is unsupervised by the employer including those who
are engaged on task or contract basis, purely commission basis, or those who are paid a fixed amount for performing work
irrespective of the time consumed in the performance thereof.
On the other hand, Article 95 of the Labor Code and its corresponding provision in the IRR(Section 1, Rule V of Book
3) pertinently provides:
Art. 95. Right to service incentive. (a) Every employee who has rendered at least one year of service shall be entitled to a
yearly service incentive leave of five days with pay.

(b) This provision shall not apply to those who are already enjoying the benefit herein provided, those enjoying vacation
leave with pay of at least five days and those employed in establishments regularly employing less than ten employees or in
establishments exempted from granting this benefit by the Secretary of Labor and Employment after considering the
viability or financial condition of such establishment.
xxxx
Section 1. Coverage. This rule shall apply to all employees except:
(e) Field personnel and other employees whose performance is unsupervised by the employer including those who are
engaged on task or contract basis, purely commission basis, or those who are paid a fixed amount for performing work
irrespective of the time consumed in the performance thereof.

2. CHARLITO PEARANDA, G.R. No. 159577

- versus
BAGANGA PLYWOOD
CORPORATION and Promulgated:
HUDSON CHUA,
Respondents. May 3, 2006

Managerial employees and members of the managerial staff are exempted from the provisions of the
Labor Code on labor standards. Since petitioner belongs to this class of employees, he is not entitled to
overtime pay and premium pay for working on rest days.

FACTS:
Sometime in June 1999 petitioner was hired by the respondent with a monthly salary of P5,000 to take
charge of the operation and maintenance of its steam plant boiler (foreman/boiler head/ shift engineer). On December
2000, Pearanda filed a complaint before the NLR for illegal dismissal with money claim. Petitioner allege that he was
dismissed without benefit of due process he was not paid his overtime pay, premium pay for working during holidays/rest
days, night shift differentials and finally claims for payment of damages and attorneys fees having been forced to litigate
the present complaint. Respondent as a defense allege that the termination of the petitioner was in accordance with the
law, and that the petitioner was not entitled to the money claim since he is a managerial employee. LA ruled that there was
no illegal dismissal. Petitioner file an appeal before the NLRC. NLRC ruled that petitioner is not entitled to the award
because he is a managerial employee. Petitioners petition for certiorari was dismissed by the CA. hence present petition
ISSUE:

WON the petitioner is entitled to the claims

RULING:
no, the petitioner is not entitled to the claim for he is a member of the managerial staff. The
Implementing Rules of the Labor Code define members of a managerial staff as those with the following duties and
responsibilities:
(1) The primary duty consists of the performance of work directly related to management policies of the employer;
(2) Customarily and regularly exercise discretion and independent judgment;
(3) (i) Regularly and directly assist a proprietor or a managerial employee whose primary duty consists of the management
of the establishment in which he is employed or subdivision thereof; or (ii) execute under general supervision work along
specialized or technical lines requiring special training, experience, or knowledge; or (iii) execute under general supervision
special assignments and tasks; and
(4) who do not devote more than 20 percent of their hours worked in a workweek to activities which are not directly and
closely related to the performance of the work described in paragraphs (1), (2), and (3) above
Being a shift engineer, petitioners duties and responsibilities were as follows:
1. To supply the required and continuous steam to all consuming units at minimum cost.
2. To supervise, check and monitor manpower workmanship as well as operation of boiler and accessories.
3. To evaluate performance of machinery and manpower.

4. To follow-up supply of waste and other materials for fuel.

5. To train new employees for effective and safety while working.
6. Recommend parts and supplies purchases.
7. To recommend personnel actions such as: promotion, or disciplinary action.
8. To check water from the boiler, feedwater and softener, regenerate softener if beyond hardness limit.
9. Implement Chemical Dosing.
10. Perform other task as required by the superior from time to time
The foregoing enumeration, particularly items 1, 2, 3, 5 and 7 illustrates that petitioner was a member of the managerial
staff. His duties and responsibilities conform to the definition of a member of a managerial staff under the Implementing
Rules.
Petitioner supervised the engineering section of the steam plant boiler. His work involved overseeing the operation of the
machines and the performance of the workers in the engineering section. This work necessarily required the use of
discretion and independent judgment to ensure the proper functioning of the steam plant boiler. As supervisor, petitioner
is deemed a member of the managerial staff.
Article 82 of the Labor Code exempts managerial employees from the coverage of labor standards. Labor standards provide
the working conditions of employees, including entitlement to overtime pay and premium pay for working on rest days.
Under this provision, managerial employees are those whose primary duty consists of the management of the
establishment in which they are employed or of a department or subdivision.

3. SIME DARBY PILIPINAS, INC. vs. NATIONAL LABOR RELATIONS COMMISSION (2ND DIVISION) and SIME DARBY
SALARIED EMPLOYEES ASSOCIATION (ALU-TUCP) (G.R. No. 119205 April 15, 1998)
Topic: Right of an employer to exercise its management prerogatives
Even as the law is solicitous of the welfare of the employees, it must also protect the right of an
employer to exercise what are clearly management prerogatives. Thus, management is free to
regulate, according to its own discretion and judgment, all aspects of employment, including hiring,
work assignments, working methods, time, place and manner of work, processes to be followed,
supervision of workers, working regulations, transfer of employees, work supervision, lay off of workers
and discipline, dismissal and recall of workers. Further, management retains the prerogative, whenever
exigencies of the service so require, to change the working hours of its employees. So long as such
prerogative is exercised in good faith for the advancement of the employer's interest and not for the
purpose of defeating or circumventing the rights of the employees under special laws or under valid
agreements, this Court will uphold such exercise.
While the Constitution is committed to the policy of social justice and the protection of the working
class, it should not be supposed that every dispute will be automatically decided in favor of labor.
Management also has rights which, as such, are entitled to respect and enforcement in the interest of
simple fair play. Although this Court has inclined more often than not toward the worker and has
upheld his cause in his conflicts with the employer, such favoritism has not blinded the Court to the rule
that justice is in every case for the deserving, to be dispensed in the light of the established facts and
the applicable law and doctrine.
FACTS: Petitioner Sime Darby Pilipinas, Inc. is engaged in the manufacture of automotive tires, tubes and other rubber
products. Sime Darby Salaried Employees Association (ALU-TUCP), private respondent, is an association of monthly salaried
employees of petitioner at its Marikina factory. Prior to the present controversy, all company factory workers in Marikina
including members of private respondent union worked from 7:45 a.m. to 3:45 p.m. with a 30-minute paid "on call" lunch
break.

On 14 August 1992 petitioner issued a memorandum to all factory-based employees advising all its monthly salaried
employees in its Marikina Tire Plant, except those in the Warehouse and Quality Assurance Department working on shifts, a
change in work schedule effective 14 September 1992 as follows: 7:45 A.M. 4:45 P.M. (Monday to Friday), 7:45 A.M.
11:45 A.M. (Saturday). Coffee break time was allotted ten minutes only anytime between: 9:30 A.M. 10:30 A.M. and 2:30
P.M. 3:30 P.M. Lunch break was scheduled between: 12:00 NN 1:00 P.M. (Monday to Friday).
Since private respondent felt affected adversely by the change in the work schedule and discontinuance of the 30-minute
paid "on call" lunch break, it filed on behalf of its members a complaint with the Labor Arbiter for unfair labor practice,
discrimination and evasion of liability pursuant to the resolution of this Court in Sime Darby International Tire Co., Inc. v.
NLRC. However, the Labor Arbiter dismissed the complaint on the ground that the change in the work schedule and the
elimination of the 30-minute paid lunch break of the factory workers constituted a valid exercise of management
prerogative and that the new work schedule, break time and one-hour lunch break did not have the effect of diminishing
the benefits granted to factory workers as the working time did not exceed eight (8) hours.
On appeal, respondent National Labor Relations Commission (NLRC) sustained the Labor Arbiter and dismissed the appeal.
However, upon motion for reconsideration by private respondent, the NLRC, this time with two (2) new commissioners
replacing those who earlier retired, reversed its earlier decision of 20 April 1994 as well as the decision of the Labor Arbiter.
The NLRC declared that the new work schedule deprived the employees of the benefits of a time-honored company
practice of providing its employees a 30-minute paid lunch break resulting in an unjust diminution of company privileges
prohibited by Art. 100 of the Labor Code, as amended. Hence, this petition.
ISSUE: Whether or not the revision of the work schedule of employees discarding their paid lunch break was constitutive of
unfair labor practice.
RULING: No, the Court in dismissing the complaint against petitioner, held that the right to fix the work schedules of the
employees rests principally on their employer.
In the instant case petitioner, as the employer, cites as reason for the adjustment the efficient conduct of its business
operations and its improved production. It rationalizes that while the old work schedule included a 30-minute paid lunch
break, the employees could be called upon to do jobs during that period as they were "on call." Even if denominated as
lunch break, this period could very well be considered as working time because the factory employees were required to
work if necessary and were paid accordingly for working. With the new work schedule, the employees are now given a onehour lunch break without any interruption from their employer. For a full one-hour undisturbed lunch break, the employees
can freely and effectively use this hour not only for eating but also for their rest and comfort which are conducive to more
efficiency and better performance in their work. Since the employees are no longer required to work during this one-hour
lunch break, there is no more need for them to be compensated for this period.
We agree with the Labor Arbiter that the new work schedule fully complies with the daily work period of eight (8) hours
without violating the Labor Code. Besides, the new schedule applies to all employees in the factory similarly situated
whether they are union members or not. The ruling in the earlier Sime Darby case is not applicable here. The issue in that
case involved the matter of granting lunch breaks to certain employees while depriving the other employees of such breaks.
This Court affirmed in that case the NLRC's finding that such act of management was discriminatory and constituted unfair
labor practice. The case before us does not pertain to any controversy involving discrimination of employees but only the
issue of whether the change of work schedule, which management deems necessary to increase production, constitutes
unfair labor practice.

4. RE: Meal Break

G.R. No. L-16275

February 23, 1961

PAN AMERICAN WORLD AIRWAYS SYSTEM (PHILIPPINES), petitioner, vs. PAN AMERICAN EMPLOYEES ASSOCIATION,
respondent.
DOCTRINES:
The one-hour meal period should be considered as overtime work (deducting 15 minutes as time allotted for eating)
because during the so called meal period, the mechanics were required to stand by for emergency work. (It is not one of
complete rest, but was actually a work hour)
The adoption of a straight 8-hour shift including the meal period is valid because the meal hour was not one of complete
rest, but was actually a work hour, since for its duration, the laborers had to be on ready call.
FACTS
This is an appeal by certiorari from the decision of the Court of Industrial Relations. The dispositive portion of the appealed
decision reads:
WHEREFORE, the Court orders the Chief of the Examining Division or his representative to compute the overtime
compensation due the aforesaid fourteen (14) aircraft mechanic and the two employees from the Communication
Department.
The company is also ordered to permanently adopt the straight 8-hour shift inclusive of meal period which is mutually
beneficial to the parties.
ISSUES
1.) Whether or not the finding that the one-hour meal period should be considered overtime work (deducting 15 minutes as
time allotted for eating)
2.) Whether or not the court below had the authority to order the company to adopt a straight 8-hour shift inclusive of
meal period.
RULING
1.) YES, the one-hour meal period should be considered overtime work.
The court below found that during the so called meal period, the mechanics were required to stand by for emergency work;
that if they happened not to be available when called, they were reprimanded by the leadman; that as in fact it happened
on many occasions, the mechanics had been called from their meals or told to hurry Employees Association up eating to
perform work during this period. The record clearly confirms the above factual findings of the Industrial Court.
2.) YES, it had the authority to order the company to adopt a straight 8-hour shift inclusive of meal period.
The Industrial Court's order for permanent adoption of a straight 8-hour shift including the meal period was but a
consequence of its finding that THE MEAL HOUR WAS NOT ONE OF COMPLETE REST, BUT WAS ACTUALLY A WORK HOUR,
SINCE FOR ITS DURATION, THE LABORERS HAD TO BE ON RADY CALL. Of course, if the Company practices in this regard
should be modified to afford the mechanics a real rest during that hour (f. ex., by installing an entirely different emergency
crew, or any similar arrangement), then the modification of this part of the decision may be sought from the Court below.
As things now stand, we see no warrant for altering the decision.
Other Ruling:

On the issue of jurisdiction over claims for overtime pay, we have since definitely ruled in a recent decisions that the
Industrial Court may properly take cognizance of such cases if, at the time of the petition, the complainants were still in the
service of the employer, or, having been separated from such service, should ask for reinstatement; otherwise, such claims
should be brought before the regular courts (NASSCO v. CIR, et al., L-13888, April 29, 1960; FRISCO v. CIR, et al., L-13806,
May 23, 1960;xxx)
Since, in the instant case there is no question that the employees claiming overtime compensation were still in the service
of the company when the case was filed, the jurisdiction of the Court of Industrial Relations cannot be assailed.

5. Pigcaulan vs. Security and Credit, G.R. No. 173648, January 16, 2012
Ratio
It is not for an employee to prove non-payment of benefits to which he is entitled by law. Rather, it is on the employer that
the burden of proving payment of these claims rests.
Facts
Canoy and Pigcaulan were both employed by SCII as security guards and were assigned to SCIIs different clients.
Subsequently, however, Canoy and Pigcaulan filed with the Labor Arbiter separate complaints for underpayment of salaries
and non-payment of overtime, holiday, rest day, service incentive leave and 13th month pays. In support of their claim,
they have submitted their respective daily time records reflecting the number of hours served and their wages for the
same. They have also presented itemized lists of their claims for the corresponding periods served.

The respondent maintained that Cano and Pagcaulan were paid their just salaries and other benefits. In support
thereof, copies of payroll listings and lists of employees who received their 13th month pay for the periods December 1997
to November 1998 and December 1998 to November 1999 were presented.
The Labor Arbiter awarded Canoy and Pagcaulan their monetary claims and the NLRC affirmed the same.
However, the Court of Appeals set aside the rulings of both Labor Arbiter and NLRC after noting that there were no factual
and legal bases mentioned in the questioned rulings to support the conclusions made.
Issue
Whether or not Pigcaulan is entitled to Overtime, Holiday, SIL and 13 th month Pay.
Whether or not the CA erred when it dismissed the complaint allegedly due to absence of legal and factual [bases]
despite attendance of substantial evidence in the records.
Ruling
NOTE: The Supreme Court has declared that the assailed CA decision for CANOY has become final and executory for failure
to appeal. It was Pagcaulan who signed the verification and certification and non-forum shopping.

There was no substantial evidence to support the grant of overtime pay.

The Labor Arbiter ordered reimbursement of overtime pay, holiday pay, service incentive leave pay and 13th
month pay for the year 2000 in favor of Canoy and Pigcaulan. The Labor Arbiter relied heavily on the itemized computations
they submitted which he considered as representative daily time records to substantiate the award of salary differentials.
The NLRC then sustained the award on the ground that there was substantial evidence of underpayment of salaries and
benefits.

The handwritten itemized computations are self-serving, unreliable and unsubstantial evidence to sustain the
grant of salary differentials, particularly overtime pay. Unsigned and unauthenticated as they are, there is no way of
verifying the truth of the handwritten entries stated therein. We find nothing in the records which could substantially
support Pigcaulans contention that he had rendered service beyond eight hours to entitle him to overtime pay and during
Sundays to entitle him to restday pay. Hence, in the absence of any concrete proof that additional service beyond the
normal working hours and days had indeed been rendered, we cannot affirm the grant of overtime pay to Pigcaulan.
Pigcaulan is entitled to holiday pay, service incentive leave pay and proportionate 13th month pay for year 2000.
Under the Labor Code, Pigcaulan is entitled to his regular rate on holidays even if he does not work. Likewise,
express provision of the law entitles him to service incentive leave benefit for he rendered service for more than a year
already.

SCII presented payroll listings and transmittal letters to the bank to show that Canoy and Pigcaulan received their
salaries as well as benefits which it claimed are already integrated in the employees monthly salaries. However, the
documents presented do not prove SCIIs allegation.

To repeat, the burden of proving payment of these monetary claims rests on SCII, being the employer. It is a rule
that one who pleads payment has the burden of proving it. "Even when the plaintiff alleges non-payment, still the
general rule is that the burden rests on the defendant to prove payment, rather than on the plaintiff to prove nonpayment." Since SCII failed to provide convincing proof that it has already settled the claims, Pigcaulan should be paid his
holiday pay, service incentive leave benefits and proportionate 13th month pay for the year 2000.

6. PAL vs. Pascua et al, [Gr No. 143258, Aug. 15, 2003]
Art. 280 (Labor Code):
Regular Employment:
1. the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or
trade of the employer;
2. any employee who has rendered at least one year of service, whether such service is continuous or broken.
FACTS:

April, August & September 1992: PAL hired private respondents as station attendants on a four or six-hour work-shift a day
at five to six days a week, and were assigned to PAL's Air services Department & ASD/CARGO to load cargo to departing &
unload cargo from arriving PAL international flights & flights of Cathay Pacific, Northwest Airlines & Thai Airlines with which
PAL had service contracts.

On occasion, PAL compelled private respondents to work overtime because of urgent necessity. The (contracts with private
respondents were extended twice, the last of which appears to have been for an indefinite period.

February 3, 1994: private respondent Joselito Pascua, in his and on behalf of other 79 part-time station attendants, filed
with DOLE a complaint for: (1) Regularization;(2) Underpayment of wages;(3) Overtime pay;(4) Thirteenth month pay;(5)
Service incentive leave pay;(6) Full time of eight hours employment;(7) Recovery of benefits due to regular employees;(8)
Night differential pay;(9) Moral damages and;(10) Attorneys fees.
However, during the pendency of the case, PAL President & Chairman converted the employment status of private
respondents from temporary part-time to regular part-time.
February 24, 1995: private respondents dropped their money claim then pending before the Office of Executive Labor
Arbiter, thus leaving for consideration their complaint for regularization -conversion of their employment status from parttime to regular (working on an 8-hour shift).
Executive Labor Arbiter: dismissed private respondents complaint because private respondents' remaining cause of action
was rendered moot and academic by their supervening regularization
NLRC: declared private respondents as regular employees of PAL with an eight-hour work-shift.
MR of Petitioner was denied so petitioner filed a special civil action for certiorari with CA to annul the NLRC decision.
CA: dismissed the said petition.

ISSUES:
1. Did petitioners act of converting respondents status from temporary to regular employees render the original complaint
for regularization moot and academic?

2. Did the appellate court err when it upheld the decision of the NLRC to accord respondents regular full-time employment
although petitioner, in the exercise of its management prerogative, requires only part-time services?

RULING:
1. No, the petitioner only converted the private respondents' status from temporary part-time to regular part-time. The
mere regularization of respondents would still not entitle them to all benefits under the CBA, which regular full-time

employees enjoy. In fact, regular part-time employees are covered by the benefits under Personnel Policies and Procedures
Manual, not the CBA. The dismissal then of the complaint by the labor arbiter is reversible error, and the NLRC still acted
within its power and authority as a quasi-judicial agency in finding that respondents deserve more than just being regular
employees but must be regular full-time employees.

(2) No, CA did not err because management prerogative is not absolute and it could not be
used to circumvent the law and public policy on labor and social
justice. Records show that respondents were first hired to work for a period of one year. Notwithstanding the fact that
respondents perform duties that are usually necessary or desirable in the usual trade or business of petitioner, respondents
were considered temporary employees as their engagement was fixed for a specific period. However, equally borne by the
records, is the fact that respondents employment was extended for more than two years. Evidently, there was a continued
and repeated necessity for their services, which puts to naught the contention that respondents, beyond the one-year
period, still continued to be temporary part-time employees. Article 280 of the Labor Code provides that any employee who
has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular
employee with respect to the activity in which he is employed, and his employment shall continue while such activity
actually exists.

Additional Notes bcn mosimang pangutana:

An issue becomes moot and academic when it ceases to present a justiciable controversy, so that a declaration on the
issue would be of no practical use or value. In that situation, there is no actual substantial relief to which respondents
would be entitled and which would be negated by the dismissal of their original complaint.

7. PERPETUAL HELP CREDIT COOPERATIVE, INC. (PHCCI) V.FABURADA

Topic: Part-time Worker
FACTS:

Private respondents Faburada et. al. filed a complaint against PHCCI for illegal dismissal, premium pay, separation pay,
wage differential, moral damages and attorneys fees. PHCCI filed a motion to dismiss on the ground that noemployeremployee relationship exists since privaterespondents are all members and co-owners of thecooperative. Also, private
respondents have not exhausted the remedies provided in the coop by laws. PHCCI also filed a supplemental motion to
dismiss alledging that RA 6939, the Cooperative Development Authority Law, requires conciliation or mediation within the
cooperative before a resort to judicial proceeding. 3.The Labor Arbiter ruled in favor of the private respondents, holding
that the case is impressed with employer-employee relationship and that the laws on cooperatives is subservient to the
Labor Code. The NLRC affirmed.

ISSUE: WON private respondent, Faburada was a regular employee.

HELD: YES. Art. 280, Labor Code comprehends 3 kinds of employees: 1)REGULAR EMPLOYEES or those whose work is
necessary or desirable to the usual business of the employer 2)PROJECT EMPLOYEES or those whoseemployment has been
fixed for a specificproject or undertaking the completion ortermination of which has been determined at the time of the
engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is
for the duration of the season 3)CASUAL EMPLOYEES or those who are neither regular nor project employees There are 2
separate instances whereby it can be determined that an employment is regular: 1)If the particular activity performed by
the employee is necessary or desirable in the usual business or trade of the employer 2)If the employee has been
performing the job for at least a year Private respondents were rendering services necessary to the day-to-day operations
of PHCCI. This alone qualified them as regular employees. Moreover, all of them except one worked with PHCCI for more
than 1 year. That Faburada worked only on a part-time basis does not mean that he is not a regular employee .Regularity of
employment is not determined by the number of hours one works but by the nature and length of time one has been in
that particular job.

8. G.R. No. L-58870 December 18, 1987

CEBU INSTITUTE OF TECHNOLOGY (CIT), petitioner,
vs.
HON. BLAS OPLE, in his capacity as Minister, Ministry of Labor and Employment, JULIUS ABELLA, ARSENIO ABELLANA,
RODRIGO ALIWALAS, ZOSIMO ALMOCERA, GERONIDES ANCOG, GREGORIO ASIA, ROGER BAJARIAS, BERNARDO
BALATAYO, JR., BASILIO CABALLES, DEMOCRITO TEVES, VOLTAIRE DELA CERNA, ROBERTO COBARRUBIAS, VILMA GOMEZ
CHUA, RUBEN GALLITO, EDGARDO CONCEPCION, VICTOR COQUILLA, JOSE DAKOYKOY, PATERNO WONG, EVELYN
LACAYA, RODRIGO GONZALES, JEOGINA GOZO, MIGUEL CABALLES, CONSUELO JAVELOSA, QUILIANO LASCO, FRANKLIN
LAUTA, JUSTINIANA LARGO, RONALD LICUPA, ALAN MILANO, MARIA MONSANTO, REYNALDO NOYNAY, RAMON
PARADELA, NATALIO PLAZA, LUZPURA QUIROGA, NOE RODIS, COSMENIA SAAVEDRA, LEONARDO SAGARIO, LETICIA
SERRA, SIEGFREDO TABANAG, LUCINO TAMAOSO, DANILO TERANTE, HELEN CALVO TORRES, ERNESTO VILLANUEVA,
DOLORES VILLONDO, EDWARD YAP, ROWENA VIVARES, DOLORES SANANAM, RODRIGO BACALSO, YOLANDA TABLANTE,
ROMERO BALATUCAN, CARMELITA LADOT, PANFILO CANETE, EMMANUEL CHAVEZ, JR., SERGIO GALIDO, ANGEL
COLLERA, ZOSIMO CUNANAN, RENE BURT LLANTO, GIL BATAYOLA, VICENTE DELANTE, CANDELARIO DE DIOS, JOSE MA.
ESTELLA, NECITA TRINIDAD, ROTELLO ILUMBA, TEODORICO JAYME, RAYMUNDO ABSIN, RUDY MANEJA, REYNA RAMOS,
ANASTACIA BLANCO, FE DELMUNDO, ELNORA MONTERA, MORRISON MONTESCLAROS, ELEAZAR PANIAMOGAN,
BERNARDO PILAPIL, RODOLFO POL, DEMOSTHENES REDOBLE, PACHECO ROMERO, DELLO SABANAL, SARAH SALINAS,
RENATO SOLATORIO, EDUARDO TABLANTE, EMMANUEL TAN, FELICISIMO TESALUNA, JOSE VERALLO, JR., MAGDALENO
VERGARA, ESMERALDA ABARQUEZ, MAC ARTHUR DACUYCUY ACOMPANADA, TRINIDAD ADLAWAN, FE ELIZORDO
ALCANTARA, REOSEBELLA AMPER, ZENAIDA BACALSO, ELIZA BADANA, GEORGIA BAS, ERLINDA BURIAS, ELDEFONSO
BURIAS, CORAZON CASENAS, REGINO CASTANEDA, GEORGE CATADA, CARMENCITA G. CHAVEZ, LORETIA CUNANAN,
FLORES DELFIN, TERESITA ESPINO, ELVIE GALANZA, AMADEA GALELA, TERESITA. JUNTILLA, LEONARDA KAPUNGAN,
ADORACION LANAWAN, LINDA LAYAO, GERARDO LAYSON, VIRGILIO LIBETARIO, RAYMOND PAUL LOGARTA, NORMA
LUCERO, ANATOLIA MENDEZ, ELIODORO MENDEZ, JUDALINE MONTE, ELMA OCAMPO, ESTEFA OLIVARES, GEORGE
ORAIS, CRISPINA PALANG, GRETA PEGARIDO, MELBA QUIACHON, REMEDIOS QUIROS, VIRGINIA RANCES, EDNA DELOS
REYES, VICENTE TAN, EMERGENCIA ROSELL, JULIETA TATING, MERCIA TECARRO, FELISA VERGARA, WEMINA VILLACIN,
MACRINA YBARSABAL, MILAGROS CATALAN, JULIETA AQUINDE, SONIA ARTIAGA, MA. TERESITA OBANDO, ASUNCION

ABAYAN, ESTHER CARREON, ECHEVARRE, BUENAFE SAMSON, CONCEPCION GONZALES, VITALIANA VENERACION,
LEONCIA ABELLAR, REYNITA VILLACARLOS. respondents.
No. L-68345 December 18, 1987
DIVINE WORD COLLEGE OF LEGAZPI, petitioner,
vs.
The Honorable Deputy Minister of Labor and Employment, VICENTE LEOGARDO, JR., the HONORABLE REGIONAL DIRECTOR
(Regional Office No. 5) of the Ministry of Labor & Employment GERARDO S. CASTILLO, CECILIA MANUEL and other alleged
complainants, respondents.
Nos. L-69224-5 December 18, 1987
FAR EASTERN UNIVERSITY EMPLOYEES LABOR UNION, petitioner,
vs.
FAR EASTERN UNIVERSITY and the NATIONAL LABOR RELATIONS COMMISSION, respondents.
No. 70832 December 18, 1987
GREGORIO T. FABROS, ROGELIO B. DE GUZMAN, CRESENCIANO ESPINO, JOSE RAMOS SUNGA, BAYLON BANEZ FERNANDO
ELESTERIO, ISMAEL TABO, AMABLE TUIBEO CELSO TUBAY, RAFAEL HERNANDEZ, GERONIMO JASARENO, MEL BALTAZAR,
MA. LOURDES PASCUAL, T. DEL ROSARIO ACADEMY TEACHERS and EMPLOYEES ASSOCIATION, DENNIS MONTE, BECKY
TORRES, LOIDA VELASCO, ROMLY NERY, DAISY N. AMPIG, PATRICIO DOLORES, ROGELIO RAMIREZ, and NILDA L. SEVILLA,
petitioners,
vs.
The HON. JAIME C. LAYA, in his capacity as Minister of Education, Culture and Sports, respondents.
No. L-76524 December 18, 1987
JASMIN BISCOCHO, ROWENA MARIANO, AGNES GALLEGO, MA. ANA ORDENES, ISABEL DE LEON, LUZVIMINDA FIDEL,
MARIQUIT REYES, SOTERA ORTIZ, ANGELINA ROXAS, BITUIN DE PANO, ELIZABETH ORDEN, APOLLO ORDEN, GUILLERMA
CERCANO, IMELDA CARINGAL, EFREN BATIFORA, ROSIE VALDEZ, DELIA QUILATEZ, FELIX RODRIGUEZ, OSCAR RODRIGUEZ,
JOVITA CEREZO, JOSEFINA BONDOC, BELEN POSADAS, DOLORES PALMA, ANTONINA CRUS, CONRADO BANAYAT, TERESITA
LORBES, and CORAZON MIRANDA, petitioners,
vs.
THE HONORABLE AUGUSTO SANCHEZ, in his capacity as Minister of Labor and Employment, ESPIRITU SANTO PAROCHIAL
SCHOOL AND ESPIRITU SANTO PAROCHIAL SCHOOL FACULTY ASSOCIATION,respondents.
No. 76596 December 18, 1987
RICARDO C. VALMONTE and CORAZON BADIOLA, petitioners,
vs.

THE HONORABLE AUGUSTO SANCHEZ, in his capacity as Minister of Labor and Employment, ESPIRITU SANTO PAROCHIAL
SCHOOL FACULTY ASSOCIATION, and ESPIRITU SANTO PAROCHIAL SCHOOL, respondents.

Facts:
This is a six consolidated cases involving various private schools, their teachers and non-teaching school personnel, and
even parents with children studying in said schools, as well as the then Minister of Labor and Employment, his Deputy, the
National Labor Relations Commission, and the then Minister of Education, Culture and Sports in order to dispose of
uniformly the common legal issue raised therein, namely, the allocation of the incremental proceeds of authorized tuition
fee increases of private schools provided for in section 3 (a) of Presidential Decree No. 451, and thereafter, under the
Education Act of 1982 (Batas Pambansa Blg. 232).
Specifically, the common problem presented by these cases requires an interpretation of section 3(a) of Pres. Decree No.
451 which states:
SEC. 3. Limitations. The increase in tuition or other school fees or other charges as well as the new fees or charges
authorized under the next preceding section shall be subject to the following conditions;
(a) That no increase in tuition or other school fees or charges shall be approved unless sixty (60%) per centum of the
proceeds is allocated for increase in salaries or wages of the members of the faculty and all other employees of the school
concerned, and the balance for institutional development, student assistance and extension services, and return to
investments: Provided That in no case shall the return to investments exceed twelve (12%) per centum of the incremental
proceeds;
xxx xxx xxx
In addition, there is also a need for a pronouncement on the effect of the subsequent enactment of B.P. Blg. 232 which
provides for the allocation of tuition fee increases in section 42 thereof.
The present controversy arises from the claims of some school personnel for allowances and other benefits and the refusal
of the private schools concerned to pay said allowances and benefits on the ground that said items should be deemed
included in the salary increases they had paid out of the 60% portion of the proceeds from tuition fee increases provided
for in section 3 (a) of Pres. Decree No. 451.

G. R. No. 58870 CEBU INSTITUTE OF TECHNOLOGY CASE

This case originated from a Complaint filed by private respondents, CIT Teachers, with the Regional Office No. VII of the
Ministry of Labor against petitioner Cebu Institute of Technology (CIT) for non-payment of:
a) cost of living allowances (COLA) under Pres. Dec. Nos. 525, 1123, 1614, 1678 and 1713,
b) thirteenth (13th) month pay differentials and
c) service incentive leave.

By virtue of an Order issued by a labor management committee through the then Deputy Minister of Labor Carmelo C.
Noriel, The said committee was to ascertain compliance with the legal requirements for the payment of COLA, thirteenth
(13th) month pay and service incentive leave.
During the conference, CIT held that it had paid the allowances mandated by various decrees but the same had been
integrated in the teacher's hourly rate. It also alleged that the payment of COLA by way of salary increases is in line with
Pres. Dec. No. 451. It also claimed in its position paper that it had paid thirteenth month pay to its employees and that it
was exempt from the payment of service incentive leave to its teachers who were employed on contract basis.
After the report and recommendation of the committee, public respondent, Minister of Labor and Employment issued an
Order and held that the basic hourly rate designated in the Teachers' Program is regarded as the basic hourly rate of
teachers exclusive of the COLA, and that COLA should not be taken from the 60% incremental proceeds of the approved
increase in tuition fee.
Hence, petitioner assails the aforesaid Order in this Special Civil Action of Certiorari with Preliminary Injunction and/or
Restraining Order.

G.R. No. L-68345 DIVINE WORD COLLEGE OF LEGAZPI CASE

A complaint was filed by the ten faculty members of the herein petitioner, Divine Word College of Legazpi for alleged noncompliance with, among others, Pres. Dec. No. 451, i.e., allowances were charged to the 60% incremental proceeds of
tuition fee increase.
Thus, the Labor Regulation Section of Regional Office No. V (Legazpi City) of the Ministry of Labor and Employment
conducted an inspection of the employment records of said school.
On the basis of the report on the special inspection, it was found out that the school did not comply with Pres. Dec. No.
451. Hence, public respondent Regional Director issued an Order requiring compliance by the Divine Word College.
However, petitioner failed to comply with the issued order. Another order was then issued by respondent Regional
Director requiring petitioner to pay the faculty members- complainants (private respondents) the total amount of Six
Hundred Seventeen Thousand Nine Hundred Sixty Seven Pesos and Seventy Seven Centavos (P 617,967.77).

G.R. No. L-69224-5 FAR EASTERN UNIVERSITY CASE

Petitioner Union filed with the Ministry of Labor and Employment a complaint against respondent University for nonpayment of legal holiday pay and under-payment of the thirteenth (13th) month pay.
While the case was pending, the Union President, in his personal capacity, filed another complaint for violation of Pres. Dec.
No. 451 against the same respondent.
Thus, the case was consolidated and jointly heard and tried. The Labor Arbiter rendered a decision in favor of the petitioner
Union with a limitation that money claims beyond three (3) years from the time the course (sic) of action occurred are
already barred and the claim for based on P.D. 451 was dismissed.

On appeal by both parties, the respondent Commission modify the decision rendered by the Labor Arbiter by which
complainant's claims for legal holiday pay and 13th month pay are likewise dismissed for lack of merit and the dismissal of
the claim under P.D. 451 was Affirmed en toto.

G.R. No. 70832 FABROS CASE

The case is a petition in the nature of a class suit brought by petitioners in behalf of the faculty members and other
employees of more than 4000 private schools nationwide.
Petitioners seek to enjoin the implementation of paragraphs 7 to 7.5 of MECS Order No. 5, series of 1985 on the ground
that the said order is null and void for being contrary to Pres. Dec. No. 451 and the rulings of the Supreme Court in the
cases of University of the East v. UE Faculty Association [G.R. No. L-57387, September 20, 1982, 117 SCRA 5541, University
of Pangasinan Faculty Union v. University of Pangasinan and NLRC [G.R. No. 63122, February 20, 1984, 127 SCRA 691 ], St.
Louis University Faculty Club v. NLRC and St. Louis University [G.R. No. 65585, September 28, 1984, 132 SCRA 380].
On September 11, 1982, Batas Pambansa Blg. 232 (Education Act of 1982) was signed into law. On the matter of tuition and
other school fees of private schools, section 42 of said law provides as follows:
Sec. 42. Tuition and other School Fees. Each private School shall determine its rate of tuition and other school fees or
charges. The rates and charges adopted by schools pursuant to this provision shall be collectible, and their application or
use authorized subject to rules and regulations promulgated by the Ministry of Education, Culture and Sports. (Emphasis
supplied).
Invoking section 42 of B.P. Blg. 232, among others, as its legal basis, the then Minister of Education Jaime C. Laya
promulgated on April 1, 1985 the disputed MECS Order No. 25, s. 1985 entitled Rules and Regulations To Implement the
Provisions of B.P. Blg. 232. The Education Act of 1982, Relative to Student Fees for School Year 1985-1986. The relevant
portions of said Order:
7. Application or Use of Tuition and Other School Fees or Charges.
7.1. The proceeds from tuition fees and other school charges as well as other income of each school shall be treated as an
institutional fund which shall be administered and managed for the support of school purposes strictly: Provided, That for
the purpose of generating additional financial resources or income for the operational support and maintenance of each
school two or more schools may pool their institutional funds, in whole or in part, subject to the prior approval of their
respective governing boards.
7.2. Tuition fees shag be used to cover the general expenses of operating the school in order to allow it to meet the
minimum standards required by the Ministry or any other higher standard, to which the school aspires. They may be used
to meet the costs of operation for maintaining or improving the quality of instruction/training/research through improved
facilities and through the payment of adequate and competitive compensation for its faculty and support personnel,
including compliance with mandated increases in personnel compensation and/or allowance.
7.3. Tuition fees shag be used to cover minimum and necessary costs including the following: (a) compensation of school
personnel such as teaching or academic staff, school administrators, academic non-teaching personnel, and non-academic
personnel, (b) maintenance and operating expenses, including power and utilities, rentals, depreciation, office supplies; and
(c) interest expenses and installment payments on school debts.

7.4. Not less than sixty (60) percent of the incremental tuition proceeds shall be used for salaries or wages, allowances and
fringe benefits of faculty and support staff, including cost of living allowance, imputed costs of contributed services,
thirteenth (13th) month pay, retirement fund contributions, social security, medicare, unpaid school personnel claims and
payments as may be prescribed by mandated wage orders. collective bargaining agreements and voluntary employer
practices, Provided That increases in fees specifically authorized for the purposes listed in paragraph 4.3.3 hereof shall be
used entirely for those purposes. (Italics supplied).
7.5. Other student fees and charges as may be approved, including registration, library, laboratory, athletic, application,
testing fees and charges shall be used exclusively for the indicated purposes, including (a) the acquisition and maintenance
of equipment, furniture and fixtures, and buildings, (b) the payment of debt amortization and interest charges on debt
incurred for school laboratory, athletic, or other purposes, and (c) personal services and maintenance and operating
expenses incurred to operate the facilities or services for which fees and charges are collected.
The Petition prayed for the issuance of a temporary restraining order which was granted by this Court after hearing.

G. R. No. L-76524 BISCOCHO CASE

The Espiritu Santo Parochial School and the Espiritu Santo Parochial School Faculty Association were parties to a labor
dispute which arose from a deadlock in collective bargaining. The parties entered into conciliation proceedings. The union
went on strike after efforts at the conciliation failed.
Subsequently, a return to work agreement was forged between the parties and both agreed to submit their labor dispute to
the jurisdiction of the Minister of Labor.
In the exercise of his power to assume jurisdiction, the Ministry of Labor and Employment issued an Order declaring the
strike staged by the Union to be legal.
xxx

xxxx

xxx

e) the parties to execute a collective bargaining agreement with an economic package equivalent to 90% of the proceeds
from tuition fee increases for school year 1985-1986 and another 90% for school year 1986-1987 and 85% for school year
1987-1988. The amount aforementioned shall be divided equally to all members of the bargaining unit as their respective
salary adjustments. Such other benefits being enjoyed by the members of the bargaining unit prior to the negotiation of the
CBA shall remain the same and shall not be reduced.
f) the School to deduct the amount equivalent to ten (10%) per cent of the backwages payable to all members of the
bargaining unit as negotiation fee and to deliver the same to the Union Treasurer for proper disposition
Pursuant to the said order, petitioners, employees and faculty members of the respondent School, filed the present petition
for prohibition to restrain the implementation of the said Order contending that that said Order and agreements affect
their rights to the 60% incremental proceeds under Pres. Dec. No. 451 which provide for the exclusive application of the
60% incremental proceeds to basic salary.

G.R. No. 76596 VALMONTE CASE

This Petition was filed by parents with children studying at respondent school, Espiritu Santo Parochial School to nullify the
Order dated April 14, 1986 issued by public respondent, then Minister of Labor and Employment, specifically paragraphs (e)
and (f) thereof, quoted in the Biscocho case.
The award contained in the said Order is the result of the assumption of jurisdiction by the public respondent over a labor
dispute involving the private respondents school and faculty association. The latter had earlier filed a notice of strike
because of a bargaining deadlock on the demands of its members for additional economic benefits. After numerous
conciliation conferences held while the union was on strike, the parties voluntarily agreed that the public respondent shall
assume jurisdiction over all the disputes between them. As to the subject matter of the instant case, the public respondent
found that the latest proposals of the respondent school was to give 85% of the proceeds from tuition fee increases for the
school years to be divided among the teachers and employees as salary adjustments. What the respondent faculty
association offered to accept was a package of 95% for school year 1985-1986, 90% for school year 1986- 1987. The
respondent school offered to strike the middle of the two positions, hence the Order complained of by the petitioners.
Issues:
Sub-Issue (Common to the Cases)
1.
Whether or not allowances and other fringe benefits of employees may be charged against the 60% portion of the
incremental proceeds provided for in sec. 3(a) of Pres. Dec. No. 451.
ARGUMENTS:
Cebu Institute of Technology
Petitioner contends that the salary increases it had paid to its employees should be considered to have included the COLA
in consonant to Pres. Dec. No. 451 and its Implementing Rules.
The line of reasoning of the petitioner appears to be based on the major premise that under said decree and rules, 60% of
the incremental proceeds from tuition fee increases may be applied to salaries, allowances and other benefits of teachers
and other school personnel. In support of thereof, petitioner cites various implementing rules and regulations of the then
Minister of Education, Culture and Sports, to the effect that 60% of the incremental proceeds may be applied to salaries,
allowances and other benefits for members of the faculty and other school personnel
Petitioner concludes that the salary increases it had granted the CIT teachers out of the 60% portion of the incremental
proceeds of its tuition fee increases from 1974-1980 pursuant to Pres. Dec. No. 451 and the MECS implementing rules and
regulations must be deemed to have included the COLA payable to said employees for those years

Divine Word College Case

Petitioner Divine Word College of Legazpi (DWC) advances the theory that the COLA, 13th month pay and other personnel
benefits decreed by law, must be deemed chargeable against the 60% portion allocated for increase of salaries or wages of
faculty and all other school employees.
In support of this stance, petitioner points out that said personnel benefits are not included in the enumeration of the
items for which the balance (less 60%) or 40% portion of the incremental proceeds may be alloted under section 3(a) of
Pres. Dec. No. 45, that the 60% incremental proceeds of authorized tuition fee increases may be applied to increases in

emoluments and/or benefits for members of faculty, including staff and administrative employees of the school as the valid
interpretation of the law, as against that made by the respondent Deputy Minister of Labor in the assailed Order.
According to the petitioner, the discrimination takes the form of requiring said class of employers to give 60% of their
profits to their employees in addition to the COLA mandated by law, while other employers have to contend only with
salary increases and COLA.
Far Eastern University case
It is the petitioner's contention that in respect of Pres. Dec. No. 451, the decision of the NLRC is a defiance of the rulings of
this Court in the cases of University of the East v. U.E. Faculty, Association et al. and of University of Pangasinan Faculty
Union v. University of Pangasinan and NLRC (supra).
The Union submits that monetary benefits, other than increases in basic salary, are not chargeable to the 60% incremental
proceeds.
The Union agreed with the position taken by the Solicitor General that under Pres. Dec. No. 451, 60% of the tuition fee
increases, shall answer exclusively for salary increase. However, it expressed disagreement with the opinion that during the
effectivity of B.P. Blg. 232, the 60% incremental proceeds shall answer not only for salary increases but also for other
employment benefits.
The Union argues that whereas "Pres. Dec. No. 451 is a law on a particular subject, viz., increase of tuition fee by
educational institutions and how such increase shall be allocated B.P. Blg. 232 is not a law on a particular subject of increase
of tuition fee . . . ; at most it is a general legislation on tuition fee as it touches on such subject in general, " [Comment on
Compliance; Rollo, p. 376], Suppletory to its argument that B.P. Blg. 232 did not impliedly repeal Pres. Dec. No. 451, the
Union also invokes the principle that a special or particular law cannot be repealed by a general law.

Courts Ruling on the FIRST SUB-ISSUE

The court reiterate the case of University of the East,
that if the schools have no resources other than those derived from tuition fee increases, allowances and benefits should
be charged against the proceeds of tuition fee increases which the law allows for return on investments under section 3(a)
of Pres. Dec. No. 451, therefore, not against the 60% portion allocated for increases in salaries and wages (See 117 SCRA at
571).
Section 3(a) of Pres. Dec. No. 451 imposes among the conditions for the approval of tuition fee increases, the allocation of
60% per cent of the incremental proceeds thereof for increases in salaries or wages of school personnel and not for any
other item such as allowances or other fringe benefits.
As aptly put by the Court in University of Pangasinan Faculty Union v. University of Pangasinan, supra:
... The sixty (60%) percent incremental proceeds from the tuition increase are to be devoted entirely to wage or salary
increases which means increases in basic salary. The law cannot be construed to include allowances which are benefits over
and above the basic salaries of the employees. To charge such benefits to the 60% incremental proceeds would be to
reduce the increase in basic salary provided by law, an increase intended also to help the teachers and other workers tide
themselves and their families over these difficult economic times. [Emphasis supplied] (127 SCRA 691, 702).

This interpretation of the law is consistent with the legislative intent expressed in the Decree itself, i.e., to alleviate the sad
plight of private schools and that of their personnel wrought by slump in enrollment and increasing operational costs on the
part of the schools, and the increasing costs of living on the part of the personnel. While coming to the aid of the private
school system by simplifying the procedure for increasing tuition fees, the Decree imposes as a condition for the approval
of any such increase in fees, the allocation of 60% of the incremental proceeds thereof, to increases in salaries or wages of
school personnel.
This condition makes for a quid pro quo of the approval of any tuition fee hike by a school, thereby assuring the school
personnel concerned, of a share in its proceeds. The condition having been imposed to attain one of the main objectives of
the Decree, which is to help the school personnel cope with the increasing costs of living, the same cannot be interpreted in
a sense that would diminish the benefit granted said personnel.
As to the alleged implementing rules and regulations promulgated by the then MECS to the effect that allowances and
other benefits may be charged against the 60% portion of the proceeds of tuition fee increases provided for in Section 3(a)
of Pres. Dec. No. 45 1, suffice it to say that these were issued ultra vires, and therefore not binding upon this Court.
The rule-making authority granted by Pres. Dec. No. 451 is confined to the implementation of the Decree and to the
imposition of limitations upon the approval of tuition fee increases, to wit:
SEC. 4. Rules and Regulations. The Secretary of Education and Culture is hereby authorized, empowered and directed to
issue the requisite rules and regulations for the effective implementation of this Decree. He may, in addition to the
requirements and limitations provided for under Sections 2 and 3 hereof, impose other requirements and limitations as he
may deem proper and reasonable.
The power does not allow the inclusion of other items in addition to those for which 60% of the proceeds of tuition fee
increases are allocated under Section 3(a) of the Decree.
Since the implementing rules and regulations cited by the private schools adds allowances and other benefits to the items
included in the allocation of 60% of the proceeds of tuition fee increases expressly provided for by law, the same were
issued in excess of the rule-making authority of said agency, and therefore without binding effect upon the courts.
At best the same may be treated as administrative interpretations of the law and as such, they may be set aside by this
Court in the final determination of what the law means.

2. Whether or not allowances and other fringe benefits may be charged against the 60% portion of the incremental
proceeds of tuition fee increases upon the effectivity of the Education Act of 1982 (B.P. Blg. 232).

ARGUMENTS:
Fabros case
In assailing MECS Order No. 25, s. 1985, petitioners argue that the matter of allocating the proceeds from tuition fee
increases is still governed by Pres. Dec. No. 451. It is their opinion that section 42 of B.P. Blg. 232 did not repeal Pres. Dec.
No. 451.
Reasons:

1.
There is no conflict between section 42 of B.P. Blg. 232 and section 3(a) of Pres. Dec. No. 451 or any semblance of
inconsistency to deduce a case of a repeal by implication.
2.
Pres. Dec. No. 451 is a specific law upon a particular subject-the purposes and distribution of the incremental
proceeds of tuition fee increases, while B.P. Blg. 232 is a general law on the educational system; as such, a specific law is not
repealed by a subsequent general law in the absence of a clear intention.
3.
Pres. Dec. No. 451 is still the only law on the subject of tuition fee increases there being no prescription or
provision in section 42 of B.P. Blg. 232 or elsewhere in the law.

Courts Ruling on the SECOND SUB-ISSUE

On the matter of tuition fee increases section 42 of B.P. Blg. 232 provides:
SEC. 42. Tuition and Other School Fees. Each private school shall determine its rate of tuition and other school fees or
charges. The rates and charges adopted by schools pursuant to this provision shall be collectible and their application or use
authorized, subject to rules and regulations promulgated by the Ministry of Education, Culture and Sports. (Emphasis
supplied).
The Court after comparing section 42 of B.P. Blg. 232 and Pres. Dec. No. 451, particularly section 3(a) thereof, finds evident
irreconcilable differences.
Under Pres. Dec. No. 451, the authority to regulate the imposition of tuition and other school fees or charges by private
schools is lodged with the Secretary of Education and Culture (Sec. 1), where section 42 of B.P. Blg. 232 liberalized the
procedure by empowering each private school to determine its rate of tuition and other school fees or charges.
Pres. Dec. No. 451 provides that 60% of the incremental proceeds of tuition fee increases shall be applied or used to
augment the salaries and wages of members of the faculty and other employees of the school, while B.P. Blg. 232 provides
that the increment shall be applied or used in accordance with the regulations promulgated by the MECS.
The Court leads to resolve that the question is in favor of repeal.
Three Aspects of the disputed provisions of law:
1.
The legislative authority under Pres. Dec. No. 451 retained the power to apportion the incremental proceeds of the
tuition fee increases; such power is delegated to the Ministry of Education and Culture under B.P. Blg. 232.
2.
Pres. Dec. No. 451 limits the application or use of the increment to salary or wage increase, institutional
development, student assistance and extension services and return on investment, whereas B.P. Blg. 232 gives the MECS
discretion to determine the application or use of the increments.
3.
The extent of the application or use of the increment under Pres. Dec. No. 451 is fixed at the pre-determined
percentage allocations; 60% for wage and salary increases, 12% for return in investment and the balance of 28% to
institutional development, student assistance and extension services, while under B.P. Blg. 232, the extent of the allocation
or use of the increment is likewise left to the discretion of the MECS.

3. Whether or not schools and their employees may enter into a collective bargaining agreement allocating more than 60%
of said incremental proceeds for salary increases and other benefits of said employees.

Biscocho and Valmonte cases

Assailed by the petitioners in the Biscocho and the Valmonte cases is the Order of the respondent Minister of Labor
directing the execution of a CBA between the school and the respondent Espiritu Santo Parochial School Faculty Association
which provides for an economic package equivalent to 90% of the proceeds of tuition fee increases for school year 19851986, another 90% for school year 1986-1987 and 85% for school year 1987-1988.
The petitioners in the two cases seek the nullification of the MOLE Order for exactly opposite reasons.
In the Biscocho case, the controversy springs from what petitioners perceive to be a diminution of the benefits to be
received by the school employees insofar as the CBA allocates only 45% for salary increases instead of 60%, which
petitioners claim to be the portion set aside by Pres. Dec. No. 451 for that purpose. The question is whether or not the 90%
portion of the proceeds of tuition fee increases alloted for the economic package may be allocated for both salary increases
and allowances.
Petitioners in the Valmonte case believe that the MOLE cannot order the execution of a CBA which would allocate more
than 60% of the proceeds of tuition fee increases for salary increases of school employees. They argue that the assailed
Order collides with the provisions of Pres. Dec. No. 451 insofar as it allocates 90% of the tuition fee increases for salary
adjustments of the members of the bargaining unit which exceeds the 60% of the said increases allocated by the Decree for
the same purpose.

Courts Ruling on the Third Sub-Issue

Based on the aforequoted MECS and DECS rules and regulations which implement BP Blg. 232, the 60% portion of the
proceeds of tuition fee increases may now be allotted for both salaries and allowances and other benefits. The 60% figure
is, however, a minimum which means that schools and their employees may agree on a larger portion, or in this case, as
much as 90% for salaries and allowances and other benefits. This is not in any way to allow diminution or loss of the portion
allotted for institutional development of the school concerned. Thus, paragraph 7.5 of MECS Order No. 25, series of 1985
specifically provides that other student fees and charges like registration, library, laboratory or athletic fees shall be used
exclusively for the purposes indicated.
SPECIFIC ISSUES AND COURTS RULING
CEBU INSTITUTE OF TECHNOLOGY CASE
Issues:
1.

Whether or not petitioner is exempted and/or not obliged to pay service incentive leave.

2.
Whether or not private respondents claims for COLA and service incentive leave are barred by laches and
prescription.

Courts Ruling:
First Issue:
Rule V of the Implementing Rules and Regulations of the Labor Code to wit:
Sec. 1. Coverage. This rule [on Service Incentive Leave] shall apply to all employees, except:
xxx xxx xxx
(d) Field personnel and other employees whose performance is unsupervised by the employer including those who are
engaged on task or contract basis, purely commission basis, or those who are paid in a fixed amount for performing work
irrespective of the time consumed in the performance thereof; (MOLE Rules and Regulations, Rule V, Book III)

The phrase "those who are engaged on task or contract basis" should however, 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.
Clearly, petitioner's teaching personnel cannot be deemed field personnel which refers "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. [Par. 3, Article 82, Labor Code of the
Philippines]. Petitioner's claim that private respondents are not entitled to the service incentive leave benefit cannot
therefore be sustained.

Second Issue:
Article 291 of the Labor Code which provides:
Art. 291. Money claims. All money claims arising from employer-employee , relations accruing during the effectivity of
this Code shall be filed within three (3) years from the time the cause of action accrued; otherwise, they shall be forever
barred.
All money claims accruing prior to the effectivity of this Code shall be filed with the appropriate entities established under
this Code within one (1) year from the date of effectivity, and shall be processed or determined in accordance with
implementing rules and regulations of the Code; otherwise, they shall be forever barred.
xxx xxx xxx
It is not fully accurate to conclude that the entire claims for COLA and service incentive leave are no longer recoverable.

DIVINE WORD COLLEGE CASE

Issues:

1.
Whether or not the Regional Director has jurisdiction over money claims arising from employer-employee
relationship.
2.
Whether or not the Regional Director and Deputy Minister of Labor adopted the report of the Labor Standards
Division without affording the petitioner the opportunity to be heard.

Courts Ruling:
First Issue:
The Secretary of Labor or his duly authorized representatives (which includes Regional Directors) are accorded the power to
investigate complaints for non- compliance with labor laws, particularly those which deal with labor standards such as
payment of wages and other forms of compensation, working hours, industrial safety, etc. This is provided for in article 128
of the Labor Code, as amended:
Art. 128. Visitorial and enforcement power.
(a) The Secretary of Labor or his duly authorized representatives including labor regulation officers, shall have access to
employers' records and premises at any time of the day or night, whenever work is being undertaken therein, and the right
to copy therefrom, to question any employee and investigate any fact, condition or matter which may be necessary to
determine violations or which may aid in the enforcement of this Code and of any labor law, wage order or rules and
regulations issued pursuant thereto.
(b) The Secretary of Labor or his duly authorized representatives shall have the power to order and administer, after due
notice and hearing, compliance with the labor standards provisions of this Code based on the findings of labor regulation
officers or industrial safety engineers made in the course of inspection, and to issue writs of execution to the appropriate
authority for the enforcement of their order, except in cases where the employer contests the findings of the labor
regulations officer and raises issues which cannot be resolved without considering evidentiary matters that are not
verifiable in the normal course of inspection. (Emphasis supplied).
Furthermore, Policy Instruction No. 6 which deals with the distribution of jurisdiction over labor cases restates inter alia
that "(L)abor standards cases arising from violation of labor standards laws discovered in the course of inspection or
complaints where employer-employee relations still exist" are under the exclusive original jurisdiction of the Regional
Director.
Even assuming that respondent Regional Director was without jurisdiction to entertain the case at bar, petitioner is now
barred at this stage to claim lack of jurisdiction having actively participated in the proceedings below. Petitioner never
questioned the jurisdiction of the respondent Regional Director.
Second Issue:
Petitioner had the opportunity to refute the report on the inspection conducted. It submitted a comment thereto, which
was in effect its position paper. The arguments therein and evidence attached thereto were considered by respondent
Regional Director in the order issued subsequently. They, therefore, had ample opportunity to present their side of the
controversy.
What due process contemplates is not merely the existence of an actual hearing. The "right to be heard" focuses more on
the substance rather than the form. In the case at bar, petitioner was actually heard through the pleadings that it filed with

the Regional Office V. As itself admitted in its petition that it was afforded the right to be heard on appeal, petitioner
cannot therefore insist that it was denied due process.
FAR EASTERN UNIVERSITY CASE
Issues:
1.
WHETHER OR NOT 'TRANSPORTATION ALLOWANCE' SHOULD BE CONSIDERED AS 'EQUIVALENT TO 13TH-MONTH
PAY UNDER PRES. DEC. NO. 851.

Courts Ruling:
The issue on the thirteenth (13th) month pay involves an interpretation of the provisions of Pres. Dec. No. 851 which
requires all employers "to pay all their employees receiving a basic salary of not more than Pl,000 a month, regardless of
the nature of the employment, a 13th- month pay" (Sec. 1). However, "employer[s] already paying their employees a 13thmonth pay or its equivalent are not covered" (Sec. 2). (Emphasis supplied)
The Rules and Regulations Implementing Pres. Dec. No. 851 provide the following:
SEC. 3. Employees. The Decree shall apply to all employers except to: ...
c) Employers already paying their employees 13th-month or more in a calendar year or its equivalent at the time of this
issuance; ...
xxx xxx xxx
The term "its equivalent" as used in paragraph (c) hereof shall include Christmas bonus, mid-year bonus, profit-sharing
payments and other cash bonuses amounting to not less than 1/12th of the basic salary but shall not include cash and stock
dividends, cost of living allowances and all other allowances regularly enjoyed by the employer, as well as non-monetary
benefits. Where an employer pays less than 1/1 2th of the employees basic salary, the employer shall pay the difference.

The Court held that the benefit herein designated as "transportation allowance" is a form of bonus equivalent to the 13th
month pay. Nevertheless, where this does not amount to 1/12 of the employees basic salary, the employer shall pay the
difference.
The evident intention of the law was to grant an additional income in the form of a 13th month pay to employees not
already receiving the same.
To hold otherwise would be to impose an unreasonable and undue burden upon those employers who had demonstrated
their sensitivity and concern for the welfare of their employees. A contrary stance would indeed create an absurd situation
whereby an employer who started giving his employees the 13th month pay only because of the unmistakable force of the
law would be in a far better position than another who, by his own magnanimity or by mutual agreement, had long been
extending his employees the benefits contemplated under PD No. 851, by whatever nomenclature these benefits have
come to be known. Indeed, PD No. 851, a legislation benevolent in its purpose, never intended to bring about such
oppressive situation.

BISCOCHO CASE
Issue:
Whether or not the 60% incremental proceeds may be subjected to attorney's fees, negotiation fees, agency fees and the
like.

Courts Ruling:
The Court notes the fact that there are two classes of employees among the petitioners:
(1) those who are members of the bargaining unit and
(2) those who are not members of the bargaining unit.
The first class may be further subdivided into two:
a.

those who are members of the collective bargaining agent and

b.

those who are not.

It is clear that the questioned Order of the respondent Minister applies only to members of the bargaining unit. The CBA
prepared pursuant to said Order, however, covered employees who are not members of the bargaining unit, although said
CBA had not yet been signed at the time this petition was filed on November 24, 1986.
Assuming it was signed thereafter, the inclusion of employees outside the bargaining unit should be nullified as this does
not conform to said order which directed private respondents to execute a CBA covering only members of the bargaining
unit.
Being outside the coverage of respondent Minister's order, and thus, not entitled to the economic package involved
therein, employees who are non- members of the bargaining unit should not be assessed negotiation fees, attorney's fees,
agency fees and the like, for the simple reason that the resulting collective bargaining agreement does not apply to them. It
should be clear, however, that while non-members of the bargaining unit are not entitled to the economic package
provided by said order, they are, in lieu thereof, still entitled to their share in the 60% incremental proceeds of increases in
tuition or other school fees or charges.
As far as assessment of fees against employees of the collective bargaining unit who are not members of the collective
bargaining agent is concerned, Article 249 of the Labor Code, as amended by B.P. Blg. 70, provides the rule:
Art. 249. Unfair labor practices of employers.xxx xxx xxx

(e) ... Employees of an appropriate collective bargaining unit who are not members of the recognized collective bargaining
agent may be assessed a reasonable fee equivalent to the dues and other fees paid by members of the recognized
collective bargaining agent, if such non- union members accept the benefits under the collective agreement . . .
Employees of the collective bargaining unit who are not members of the collective bargaining agent have to pay the
foregoing fees if they accept the benefits under the collective bargaining agreement and if such fees are not unreasonable.
Petitioners who are members of the bargaining unit failed to show that the equivalent of ten (10%) percent of their
backwages sought to be deducted is unreasonable.

9. According to Policy Instructions No. 11 issued by the Department of Labor and Employment, "the probationary
employment of professors, instructors and teachers shall be subject to standards established by the Department of
Education and Culture." Said standards are embodied in paragraph 75 of the Manual of Regulations for Private Schools, to
wit:
Par. 75. Full time teachers who have rendered three consecutive years of satisfactory service
shall be considered permanent."
The legal requisites, therefore, for acquisition by a teacher of permanent employment, or security of tenure, are as follows:
1. the teacher is a full time teacher;
2. the teacher must have rendered three (3) consecutive years of service; and
3. such service must have been satisfactory.

Par. 77 "a full-time teacher" is "one whose total working day is devoted to the school, has no
other regular remunerative employment and is paid on a regular monthly basis
regardless of the number of teaching hours"
Par. 78 in college, "the nominal teaching load of a full-time instructor shall be eighteen hours a
week"

UST vs. NLRC.

G.R. No. 85519 February 15, 1990
Private respondent Dr. Basilio E. Borja was first appointed as "affiliate faculty" in the Faculty of Medicine and Surgery at the
University of Sto. Tomas on September 29, 1976. In the second semester of the school year 1976-77 he was appointed
instructor with a load of twelve (12) hours a week. He was reappointed instructor for the school year 1977-78 with a load of
nine (9) hours a week in the first semester and two (2) hours a week in the second. On June 10, 1978 he was appointed as
Instructor III for the school year 1978-79. His load for the first semester was eight (8) hours a week, and for the second
semester, seven (7) hours a week.
On March 19, 1979 Dean Gilberto Gamez observed that Dr. Borja should not be reappointed based on the evaluation sheet
that shows his sub-standard and inefficient performance. Nevertheless in view of the critical shortage of staff members in
the Department of Neurology and Psychiatry Dr. Gamez recommended the reappointment of Dr. Borja, after informing the
latter of the negative feedbacks regarding his teaching and his promise to improve his performance. Thus on July 27, 1979
he was extended a reappointment as Instructor III in the school year 1979-80. He was given a load of six (6) hours a week. In
all these appointments he was a part time instructor.

At the end of the academic year, it appearing that Dr. Borja had not improved his performance in spite of his assurances of
improvement, his reappointment was not recommended.
In July, 1982 he filed a complaint in the National Labor Relations Commission for illegal dismissal against the UST. The
commission rendered judgment in favor of the complainant and ordered respondent university to effect the immediate
reinstatement of complainant to his former position with full backwages, rights and benefits appertaining thereto.
Respondent university was likewise ordered to pay the complainant the sum of FIVE HUNDRED THOUSAND PESOS
(P500,000.00) as and by way of moral damages and another 10% of the gross amount due him, and as and by way of
attorney's fees.
UST appealed therefrom to the NLRC which in due course rendered a decision on September 30, 1988, modifying the
appealed decision, limiting the backwages to three (3) years without qualification or deduction, computed at P660.00 per
month, ordered respondents to pay complainant P100,000.00 as and for actual or compensatory damages, ordered
respondents to pay complainant P300,000.00 as and for moral damages, and further ordered them to pay complainant
P100,000.00 as and for exemplary damages, respondents were likewise ordered to pay to complainant the sum of ten (10%)
percent of the total sum due as and for attorney's fees.
Hence the petition for certiorari and prohibition with a prayer for the issuance of a writ of preliminary injunction and
restraining order that was filed by UST and its officers, alleging that the public respondent nlrc committed serious reversible
errors of substance amounting to grave abuse of discretion and/or lack or excess of jurisdiction
ISSUE: Whether or not the private respondent was a full-time or part-time member of the faculty
(3) years that he served in the petitioner-university's College of Medicine.

during the three

RULING:
In the questioned decision of the public respondent NLRC, it found that private respondent had earned to his credit eight
(8) semesters or four (4) academic years of professional duties with UST and that he has met the requirements to become a
regular employee under the three (3) years requirement in the Manual of Regulations for Private Schools.
The appealed decision is correct insofar as it declares that it is the Manual of Regulations for Private Schools, NOT THE
LABOR CODE, that determines the acquisition of regular or permanent status of faculty members in an educational
institution, but the Court disagrees with the observation that it is only the completion of three (3) years of service that is
required to acquire such status.
According to Policy Instructions No. 11 issued by the Department of Labor and Employment, "the probationary
employment of professors, instructors and teachers shall be subject to standards established by the Department of
Education and Culture." Said standards are embodied in paragraph 75 of the Manual of Regulations for Private Schools,
to wit:
75. Full time teachers who have rendered three consecutive years of satisfactory service shall be considered permanent."
The legal requisites, therefore, for acquisition by a teacher of permanent employment, or security of tenure, are as
follows:
1) the teacher is a full time teacher;
2) the teacher must have rendered three (3) consecutive years of service; and
3) such service must have been satisfactory.
Now, the Manual of Regulations also states that "a full-time teacher" is "one whose total working day is devoted to the
school, has no other regular remunerative employment and is paid on a regular monthly basis regardless of the number

of teaching hours" (Par. 77); and that in college, "the nominal teaching load of a full-time instructor shall be eighteen
hours a week" (par. 78).
It follows that a part-time member of the faculty cannot acquire permanence in employment under the Manual of
Regulations in relation to the Labor Code.
It cannot be said that respondent's total working day was devoted to the school alone. It is clear from the record that he
was practising his profession as a doctor and maintaining a clinic in the hospital for this purpose during the time that he was
given a teaching load. In other words, he had another regular remunerative work aside from teaching. His total working day
was not, therefore, devoted to the school.
Indeed, his salaries from teaching were computed by the respondent Commission itself at only an average of P660.00 per
month; he, therefore, had to have other sources of income, and this of course was his self-employment as a practising
psychiatrist. That the compensation for teaching had to be averaged also shows that he was not paid on a regular monthly
basis. Moreover, there is absolutely no evidence that he performed other functions for the school when not teaching. All
things considered, it would appear that teaching was only a secondary occupation or "sideline," his professional practice as
a psychiatrist being his main vocation.
The record also discloses that he never had a normal teaching load of eighteen (18) hours a week during the time that he
was connected with the university. Gilberts Gamez who was the dean of the medical school during the time material to the
proceedings at bar submitted a sworn declaration to the effect that as "affiliate faculty" member of the Department of
Neurology and Psychiatry from September 29,1976, private respondent had no teaching functions: that in fact, when he
was appointed in September, 1976, classes for the first semester were already nearing their end; that as "affiliate faculty"
he was merely an observer acquainting himself with the functions of an instructor while awaiting issuance of a formal
appointment as such; that in the school year 1977-78 he had a teaching load of nine (9) hours a week in the first semester
and two (2) hours a week in the second semester; that in the school year 1978-1979 he had a load of eight (8) hours a
week in the first semester and seven (7) hours a week in the second semester; that in the school year 1979-1980 he had a
load of six (6) hours a week in each semester. This evidence does not appear to have been refuted at all by the private
respondent, and has inexplicably been ignored by public respondent. No discussion of this particular point is found in the
decisions of the Labor Arbiter or the NLRC.
The private respondent, therefore, could not be regarded as a full- time teacher in any aspect. He could not be regarded as
such because his total working day was not devoted to the school and he had other regular remunerative employment.
Moreover, his average teaching load was only 6.33 hours a week.
In view of the explicit provisions of the Manual of Regulations above-quoted, and the fact that private respondent was not a
full- time teacher, he could not have and did not become a permanent employee even after the completion of three (3)
years of service.
Having found that private respondent did not become a permanent employee of petitioner UST, it correspondingly follows
that there was no duty on the part of petitioner UST to reappoint private respondent as Instructor, the temporary
appointment having lapsed. Such appointment is a matter addressed to the discretion of said petitioner.
The petition is hereby GRANTED. The questioned orders of public respondent NLRC dated September 13, 1988 and public
respondent labor arbiter Hernandez dated July 19,1988 are hereby SET ASIDE and another judgment is hereby rendered
DISMISSING the complaint of private respondent.

10. LACUESTA vs Ateneo de Manila University (ADMU)

G.R. No. 152777

December 9, 2005
What determines acquisition of regular or permanent status of faculty members in an educational institution?
-

Manual of Regulations for Private Schools, and not the Labor Code

However, probationary employees enjoy security of tenure, but only within the period of probation. Likewise, an
employee on probation can only be dismissed for just cause or when he fails to qualify as a regular employee in accordance
with the reasonable standards made known by the employer at the time of his hiring.
FACTS:
Respondent hired Lacuestra on a contractual basis as a part-time lecturer in its English Department for the 2nd
semester of SY 1988-1989. She was re-hired, still on a contractual basis, for the 1st and 2nd semesters of SY 1989-1990.
On July 13, 1990, petitioner was first appointed as full-time instructor on probation, in the same department
effective June 1, 1990 until March 31, 1991. Thereafter, her contract as faculty on probation was renewed effective April 1,
1991 until March 31, 1992. She was again hired for a third year effective April 1, 1992 until March 31, 1993. During these
three years she was on probation status.
In a letter, respondent Dr. Garcia notified petitioner that her contract would no longer be renewed because she
did not integrate well with the English Department. Petitioner then appealed to the President of the Ateneo at the time, Fr.
Joaquin Bernas, S.J.
Fr. Bernas explained to petitioner that she was not being terminated, but her contract would simply expire. In
another letter, he offered petitioner the job as book editor in the University Press under terms comparable to that of a
faculty member.
On March 26, 1993, petitioner applied for clearance to collect her final salary as instructor. Petitioner also signed a
Quitclaim, Discharge and Release on April 16, 1993.
Petitioner worked as editor from April 1, 1993 to March 31, 1994 including an extension of two months after her
contract expired. Upon expiry of her contract, petitioner applied for clearance to collect her final salary as editor. Later, she
agreed to extend her contract from June 16, 1994 to October 31, 1994. Petitioner decided not to have her contract
renewed due to a severe back problem. She did not report back to work, but she submitted her clearance on February 20,
1995.
On December 23, 1996, petitioner filed a complaint for illegal dismissal with prayer for reinstatement, back wages,
and moral and exemplary damages. Dr. Leovino Ma. Garcia and Dr. Marijo Ruiz were sued in their official capacities as the
previous and present deans of the College of Arts and Sciences, respectively.
Labor Arbiter:
-

petitioner may not be terminated by mere lapse of the probationary period but only for just cause or failure to
meet the employers standards
the quitclaim, discharge and release executed by petitioner was not a bar to filing a complaint for illegal dismissal
ordered reinstatement with payment of full back wages.

NLRC reversed the LAs decision.

Not illegally dismissed

quitclaim was valid

Court of Appeals:
-

dismissed the petition saying there was no grave abuse of discretion and affirmed the NLRC decision.

Hence this petition.

ISSUE: WON the petitioner was illegally dismissed.
RULING: No, petitioner, did not attain permanent status and was not illegally dismissed. As found by the NLRC, her contract
merely expired.
The Manual of Regulations for Private Schools, and not the Labor Code, determines whether or not a faculty
member in an educational institution has attained regular or permanent status. In University of Santo Tomas v. National
Labor Relations Commission the Court en banc said that under Policy Instructions No. 11 issued by the Department of Labor
and Employment, the probationary employment of professors, instructors and teachers shall be subject to the standards
established by the Department of Education and Culture. Said standards are embodied in paragraph 75 (now Section 93) of
the Manual of Regulations for Private Schools.
Section 93 of the 1992 Manual of Regulations for Private Schools provides that full-time teachers who have
satisfactorily completed their probationary period shall be considered regular or permanent. Moreover, for those teaching
in the tertiary level, the probationary period shall not be more than six consecutive regular semesters of satisfactory
service. The requisites to acquire permanent employment, or security of tenure, are (1) the teacher is a full-time teacher;
(2) the teacher must have rendered three consecutive years of service; and (3) such service must have been satisfactory.
As previously held, a part-time teacher cannot acquire permanent status. Only when one has served as a full-time
teacher can he acquire permanent or regular status. The petitioner was a part-time lecturer before she was appointed as a
full-time instructor on probation. As a part-time lecturer, her employment as such had ended when her contract expired.
Thus, the three semesters she served as part-time lecturer could not be credited to her in computing the number of years
she has served to qualify her for permanent status.
Moreover, completing the probation period does not automatically qualify her to become a permanent employee
of the university. Petitioner could only qualify to become a permanent employee upon fulfilling the reasonable standards
for permanent employment as faculty member. Consistent with academic freedom and constitutional autonomy, an
institution of higher learning has the prerogative to provide standards for its teachers and determine whether these
standards have been met. At the end of the probation period, the decision to re-hire an employee on probation, belongs to
the university as the employer alone.
Lastly, had already signed a valid quitclaim, discharge and release which bars the present action. SC held that not
all quitclaims are per se invalid or against public policy, except (1) where there is clear proof that the waiver was wangled
from an unsuspecting or gullible person, or (2) where the terms of settlement are unconscionable on their face. In this case,
there is no showing that petitioner was coerced into signing the quitclaim. In her sworn quitclaim, she freely declared that
she received to her full satisfaction all that is due her by reason of her employment and that she was voluntarily releasing
respondent Ateneo from all claims in relation to her employment. Nothing on the face of her quitclaim has been shown as
unconscionable.

11. SAINT MARYS UNIVERSITY vs. COURT OF APPEALS, GR No. 157788, March 08, 2005
Case Principle: A part-time employee does not attain permanent status no matter how long he has served the
school. And as a part-timer, his services could be terminated by the school without being held liable for illegal dismissal.
Facts: Respondent Marcelo Donelo started teaching on a contractual basis at St. Marys University in 1992. In 1995, he was
issued an appointment as an Assistant Professor I. Later on, he was promoted to Assistant Professor III. He taught until the
first semester of school year 1999-2000 when the school discontinued giving him teaching assignments. For this,
respondent filed a complaint for illegal dismissal against the university.
In its defense, petitioner St. Marys University showed that respondent was merely a part-time instructor and, except for
three semesters, carried a load of less than eighteen units. Petitioner argued that respondent never attained permanent or
regular status for he was not a full-time teacher.
The Labor Arbiter ruled that respondent was lawfully dismissed because he had not attained permanent or regular status
pursuant to the Manual of Regulations for Private Schools. The Labor Arbiter held that only full-time teachers with regular
loads of at least 18 units, who have satisfactorily completed three consecutive years of service qualify as permanent or
regular employees.
On appeal, the National Labor Relations Commission (NLRC) reversed the Decision and ordered the reinstatement of
respondent. It held that respondent was a full-time teacher as he did not appear to have other regular remunerative
employment and was paid on a regular monthly basis regardless of the number of teaching hours. As a full-time teacher
and having taught for more than 3 years, respondent qualified as a permanent or regular employee of the university.
The Court of Appeals affirmed the Decision of the NLRC.
Issues: a.) Whether or not respondent is a full-time teacher.
b.) Whether or not there was illegal dismissal
Held: Section 93 of the 1992 Manual of Regulations for Private Schools, provides that full-time teachers who have
satisfactorily completed their probationary period shall be considered regular or permanent. Furthermore, the probationary
period shall not be more than six consecutive regular semesters of satisfactory service for those in the tertiary level. Thus,
the following requisites must concur before a private school teacher acquires permanent status: (1) the teacher is a fulltime teacher; (2) the teacher must have rendered three consecutive years of service; and (3) such service must have been
satisfactory.
Section 45 of the 1992 Manual of Regulations for Private Schools provides that full-time academic personnel are those
meeting all the following requirements:
a. Who possess at least the minimum academic
qualifications prescribed by the Department under
this Manual for all academic personnel;
b. Who are paid monthly or hourly, based on the
regular teaching loads as provided for in the
policies, rules and standards of the Department and
the school;

c. Whose total working day of not more than eight

hours a day is devoted to the school;
d. Who have no other remunerative occupation
elsewhere requiring regular hours of work that will
conflict with the working hours in the school; and
e. Who are not teaching full-time in any other
educational institution.

All teaching personnel who do not meet the

foregoing qualifications are considered part-time.

A perusal of the various orders of the then Department of Education, Culture and Sports prescribing teaching loads
shows that the regular full-time load of a faculty member is in the range of 15 units to 24 units a semester or term,
depending on the courses taught. Part-time instructors carry a load of not more than 12 units.
The evidence on record reveals that, except for four non-consecutive terms, respondent generally carried a load of
twelve units or less from 1992 to 1999. There is also no evidence that he performed other functions for the school
when not teaching. These give the impression that he was merely a part-time teacher. Although this is not
conclusive since there are full-time teachers who are allowed by the university to take fewer load, in this case,
respondent did not show that he belonged to the latter group, even after the university presented his teaching
record. Furthermore, the records also indubitably show he was employed elsewhere from 1993 to 1996.
Since there is no showing that respondent worked on a full-time basis for at least three years, he could not have
acquired a permanent status. A part-time employee does not attain permanent status no matter how long he
has served the school. And as a part-timer, his services could be terminated by the school without being held
liable for illegal dismissal. Moreover, the requirement of twin-notice applicable only to regular or permanent
employees could not be invoked by respondent.
The school could not lawfully terminate a part-timer before the end of the agreed period without just cause. But
once the period, semester, or term ends, there is no obligation on the part of the school to renew the contract
of employment for the next period, semester, or term.

12. TEOFILO ARICA, DANILO BERNABE, MELQUIADES DOHINO, ABONDIO OMERTA, GIL TANGIHAN, SAMUEL
LABAJO, NESTOR NORBE, RODOLFO CONCEPCION, RICARDO RICHA, RODOLFO NENO, ALBERTO BALATRO,
BENJAMIN JUMAMOY, FERMIN DAAROL, JOVENAL ENRIQUEZ, OSCAR BASAL, RAMON ACENA, JAIME BUGTAY,
and 561 OTHERSversusNATIONAL LABOR RELATIONS COMMISSIONand STANDARD (PHILIPPINES) FRUIT
CORPORATION
G.R. No. 78210

February 28, 1989

DOCTRINE/PRINCIPLE:
SECTION 5. Waiting time.
(a) Waiting time spent by an employee shall be considered as working time if waiting is an integral part of his work
or the employee is required or engaged by the employer to wait.
(b) An employee who is required to remain on call in the employer's premises or so close thereto that he cannot
use the time effectively and gainfully for his own purpose shall be considered as working while on call. An
employee who is not required to leave word at his home or with company officials where he may be reached is not
working while on call.
FACTS:

Herein petitioners Teofilo Arica, et al and 561 others, filed a suit against Standard Fruits Corporation
(STANFILCO) Philippines for allegedly not paying the workers for their assembly time which takes place every work
day from 5:30am to 6am.
These preliminary activities of the workers are as follows:
(a) First there is the roll call. This is followed by getting their individual work assignments from the foreman.
(b) Thereafter, they are individually required to accomplish the Laborer's Daily Accomplishment Report during
which they are often made to explain about their reported accomplishment the following day.
(c) Then they go to the stockroom to get the working materials, tools and equipment.
(d) Lastly, they travel to the field bringing with them their tools, equipment and materials.
All these activities take 30 minutes to accomplish.
Petitioners contended that the preliminary activities as workers of STANFILCO in the assembly area is
compensable as working time (from 5:30 to 6:00 o'clock in the morning) since these preliminary activities are
necessarily
and
primarily
for
private
respondent's
benefit.

ISSUE:
Whether or not the 30-minute activity of the petitioners before the scheduled working time is
compensable under the Labor Code.
HELD:
No, the 30-minute activity of the petitioners is not compensable. 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. ...
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 farm 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. The CBA does not contain any provision to this effect; the record is also bare of any proof on this point.
This, therefore, demonstrates the indubitable fact that the thirty (30)-minute assembly time was not primarily
intended for the interests of the employer, but ultimately for the employees to indicate their availability or nonavailability for work during every working day.
Petition is dismissed.
DISSENTING OPINION:

(a) First, there is the roll call. This is followed by getting their individual work assignments from the
foreman.(b) Thereafter,they are individually required to accomplish the Laborer's Daily Accomplishment Report
during which they are oftenmade to explain about their reported accomplishment the following day.(c) Then they
go to the stockroom to get the workingmaterials, tools and equipment.(d) Lastly, they travel to the field bringing
with them their tools, equipment and materials. Asindicated, by the petitioners, things had since changed, and
remarkably so, and the latter had since been placed under a number of restrictions. My considered opinionis that
the thirty-minute assembly time had become, in truth and fact, a "waiting time" as contemplated by the Labor
Code. Making the same compensable.