LABOR DIGEST COMPILATION 2
HOURS OF WORK
International Pharmaceuticals, Inc. v. NLRC
FACTS:
International Pharmaceuticals, Inc. (IPI) employed private
respondent Virginia Quintia as Medical Director of its R&D
dept. replacing one Diana Villaraza.
Because that year, the government launched a program
encouraging development of herbal medicine, IPI decided to
venture into that and hired private respondent as
pharmacologist only for this purpose. Hence, the contention
that private respondent was a project employee.
The contract of employment provided for a term of one year
subject to renewal by mutual consent at least 30 days before
expiration. It was also agreed that Quintia can continue teaching
as a full-time faculty member at Cebu Doctors Hospital.
Quintia claimed that when her contract was about to expire, she
was invited by Xavier University to be chairperson of its
pharmacology dept. But Castillo, present and gen mgr of IPI
asked her to stay and assured her of security of tenure. Hence,
she declined the offer of Xavier and remained an employ and as
company physician of IPI after her contract expired. This
continued until her termination on July 12, 1986.
She alleges that her reason for her termination was because she
led the rank and file employees in the demand for a full
disclosure of the Savings and Loan Associations financial
status. Her participation was resented by association officers.
On July 10, 1986, Quintia was replaced as head of the R&D
dept by Paz Wong. Two days later, she received a
memorandum officially terminating her services.
Quintia filed a complaint for illegal dismissal praying for
reinstatement and payment of full backwages and moral
damages.
LA found private respondent to have been illegally dismissed.
He held that private respondent was a regular employee and not
a project employee and could not be dismissed without just
causes. NLRC affirmed ruling and asked LA to determine
whether reinstatement is possible.
ISSUE: WON reinstatement is feasible
HELD: Petition DISMISSED.
RATIO:
Art. 280. Regular and casual employment. - The provisions of written
agreement to the contrary notwithstanding and regardless of the oral
agreement of the parties, an employment shall be deemed to be regular
where the employee has been engaged to perform activities which are
usually necessary or desirable in the usual business or trade of the
employer except where the employment has been fixed for a specific
project or undertaking, the completion or termination of which has been
determined at the time of the engagement of the employee or where the
work or service to be performed is seasonal in nature and the
employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the
preceding paragraph: Provided, 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 exists.
1
LABOR DIGEST COMPILATION 2
In Brent School, Inc. v. Zamora, it was held that although work done
under a contract is necessary and desirable in relation to the usual
business of the employer, a contract for a fixed period may nonetheless
be made so long as it is entered into freely, voluntarily and knowingly
by the parties.
When complainant was allowed to continue working without the benefit
of a contract after the expiration of the one year period provided in their
written contract, that act completely changed the complexion of the
relationship between the parties.
Quintias status as an employee is not disputed in this case. Therefore,
in determining whether she was a project employee or a regular
employee, the question is whether her work was necessary and
desirable to the main business of the employer. It is true that, as held
in Singer, parties can enter into an agreement for the rendering of
services by one to the other and that however necessary such services
may be to the latters business the contract will not necessarily give rise
to an employer-employee relationship if the elements of such
relationship are not present. But that is not the question in this
case. Quintia was an employee. The question is whether, given the fact
that she was an employee, she was a regular or a project employee,
considering that she had been continued in the service of petitioner for
more than two years following the expiration of her written contract.
Petitioners allegations are contrary to the factual findings of both the
NLRC and the Labor Arbiter, particularly their findings that she was the
head of petitioners Research and Development department; that in
addition, she performed the function of company physician; and that she
undertook various civic activities in behalf of petitioner and that this
engagement lasted for more than three years (1983 - 1986). Certainly, as
the NLRC observed, these facts show complainant working not as
consultant but as a regular employee albeit a managerial one. It
should be added that Quintia was hired to replace one Diana
Villaraza, which suggests that the position to which she was appointed
by petitioner was an existing one, so much so that after the
termination of Quintias employment, somebody else (Paz Wong) was
appointed in her place. If private respondents employment was for a
particular project which had allegedly been terminated, why would there
be a need to replace her?
There is no mention whatsoever of any project or of any consultancy in
the contract. As aptly observed by the Solicitor General, the duties of
Quintia as provided for in the contract reject any notion of
consultancy. Clearly, she was hired as Medical Director of the Research
and Development department of petitioner company and not as
consultant nor for any particular project. The work she performed
was manifestly necessary and desirable to the usual business of
petitioner, considering that it is engaged in the manufacture and
production of medicinal preparations.
We agree with the Labor Arbiter that the fact that she was not required
to report at a fixed hour or to keep fixed hours of work does not detract
from her status as a regular employee. As petitioner itself admits,
Quintia was a managerial employee and therefore not covered by the
Labor Code provisions on hours of work. What this Court said in once
case is apropos:
The primary standard, . . . of determining a regular employment is the
reasonable connection between the particular activity performed by the
employee in relation to the usual business or trade of the employer. The
test is whether the former is usually necessary or desirable in the usual
business or trade of the employer. The connection can be determined by
considering the nature of the work performed and its relation to the
scheme of the particular business or trade in its entirety. Also, if the
employee has been performing the job for at least one year, even if the
performance is not continuous or merely intermittent, the law deems the
2
LABOR DIGEST COMPILATION 2
repeated and continuing need for its performance as sufficient evidence
of the necessity if not indispensability of that activity to the
business. Hence, the employment is also considered regular, but only
with respect to such activity and while such activity exists
2. WON after petitioner discontinued its herbal medicine project after it
had been shown not to be viable, private respondents employment had
to be terminated, too
As this Court has held in Western Shipping Agency, Inc. v. NLRC:
Loss of confidence is a valid ground for the dismissal of managerial
employees . . . But even managerial employees enjoy security of tenure,
. . . and, . . . can only be dismissed after cause is shown in an
appropriate proceeding. The loss of confidence must be substantiated by
evidence. The burden of proof is on the employer to show grounds
justifying the loss of confidence.
3. WON reinstatement of private respondent is not feasible because the
position which she held was abolished on account of its decision to
discontinue its herbal medicine development project and that, in any
event, because the position is a sensitive one which needs an employee
in whom the petitioner has full faith and confidence.
As regards the claim that the position has already been abolished and,
therefore, reinstatement is impossible, suffice it to state that the factual
findings of the Labor Arbiter belie this. A replacement for private
respondent was appointed two (2) days prior to her termination. If the
position had been abolished, there would have been no necessity for a
replacement.
But we agree that because of antagonism generated by this case and the
private respondents own preference for separation pay, reinstatement
would no longer be feasible.
Mercidar Fishing Corporation vs. NLRC & Fermin Agao, Jr.
FACTS:
This case originated from a complaint filed on September 20, 1990 by
private respondent FerminAgao, Jr. against petitioner for illegal
dismissal, violation of P.D. No. 851, and non-payment of five days
service incentive leave for 1990. Private respondent had been employed
as a "bodegero" or ship's quartermaster on February 12, 1988. He
complained that he had been constructively dismissed by petitioner
when the latter refused him assignments aboard its boats after he had
reported to work on May 28, 1990. Private respondent alleged that he
had been sick and thus allowed to go on leave without pay for one
month from April 28, 1990 but that when he reported to work at the end
of such period with a health clearance, he was told to come back another
time as he could not be reinstated immediately. Thereafter, petitioner
refused to give him work. For this reason, private respondent asked for a
certificate of employment from petitioner on September 6, 1990.
However, when he came back for the certificate on September 10,
petitioner refused to issue the certificate unless he submitted his
resignation. Since private respondent refused to submit such letter
unless he was given separation pay, petitioner prevented him from
entering the premises. Petitioner, on the other hand, alleged that it was
private respondent who actually abandoned his work.
ISSUE:
Whether or not the fishing crew members are considered field personnel
as classified in Art. 82 of the Labor Code.
3
LABOR DIGEST COMPILATION 2
HELD:
Art. 82 of the Labor Code provides: The provisions of this title
[Working Conditions and Rest Periods] shall apply to employees in all
establishments and undertakings whether for profit or not, but not to
government employees, field personnel, members of the family of the
employer who are dependent on him for support, domestic helpers,
persons in the personal service of another, and workers who are paid by
results as determined by the Secretary of Labor in appropriate
regulations. "Field personnel" shall refer to non-agricultural employees
who regularly perform their duties away from the principal place of
business or branch office of the employer and whose actual hours of
work in the field cannot be determined with reasonable certainty. In
contrast, in the case at bar, during the entire course of their fishing
voyage, fishermen employed by petitioner have no choice but to remain
on board its vessel. Although they perform non-agricultural work away
from petitioner's business offices, the fact remains that throughout the
duration of their work they are under the effective control and
supervision of petitioner through the vessel's patron or master.
Far East Agricultural Supply v. Jimmy Lebatique
FACTS:
In March 1996, Lebatique was hired as a driver by FAR EAST
AGRICULTURAL SUPPLY, INC. with a daily wage of P223.50. His
job as a driver includes the delivery of animal feeds to the clients of the
company. He must report either in the morning or in the afternoon to
make the deliveries.
On January 24, 2000, Lebatique was suspended by Manuel Uy (brother
of FEASIs General Manager Alexander Uy) for allegedly using the
company vehicle illegally.
On the same day, Lebatique filed a complaint for nonpayment of
overtime pay against Alexander Uy.
Uy summoned Lebatique and asked why he was claiming overtime pay.
Lebatique said since he started working with the company he has never
been paid OT pay. Uy consulted with his brother. On January 29, 2000,
Uy told Lebatique to look for another job.
Lebatique then filed an Illegal Dismissal case against the company.
The Labor Arbiter ruled in favor of Lebatique. Uy was ordered to
reinstate Lebatique and at the same time to pay Lebatique his 13th month
pay, back wages (time when case was pending), service incentive leave
pay and OT pay all amounting to P196,659.72.
Uy argued that Lebatique was not dismissed and that he was merely
suspended; that he abandoned his job; and that Lebatique was a field
personnel not entitled to overtime pay and service incentive leave.
ISSUE: Whether or not Lebatique is a field personnel.
HELD: No. Lebatique is a regular employee.
Uy illegally dismissed Lebatique when he told him to look for another
job. Judging at the sequence of event, Lebatique earned the ire of Uy
when he filed a complaint for nonpayment of OT pay on the day
Lebatique was suspended by Manuel Uy. Such is not a valid reason for
dismissing Lebatique.
Uy cannot therefore claim that he merely suspended Lebatique.
Further, Lebatique did not abandon his job. His filing of this case is
proof enough that he had no intention to abandon his job.
To constitute abandonment as a just cause for dismissal, there must be:
(a) absence without justifiable reason; and
(b) a clear intention, as manifested by some overt act, to sever the
employer-employee relationship.
None of the above was proven by Uy.
Also, Lebatique is not a field personnel as defined above for the
following reasons:
(1) company drivers, including Lebatique, are directed to deliver the
goods at a specified time and place;
4
LABOR DIGEST COMPILATION 2
(2) they are not given the discretion to solicit, select and contact
prospective clients; and
(3) Far East issued a directive that company drivers should stay at the
clients premises during truck-ban hours which is from 5:00 to 9:00 a.m.
and 5:00 to 9:00 p.m.
As a regular employee, Lebatique is entitled to service incentive leave
and OT pay.
The Supreme Court affirmed the Labor Arbiters decision but remanded
the case for properly computing Lebatiques OT pay taking in to
consideration the companys time keeping records.
Field Personnel Defined
Field personnel are those who regularly perform their duties away from
the principal place of business of the employer and whose actual hours
of work in the field cannot be determined with reasonable certainty.
Labor Congress Of The Philippines v National Labor Relations
Commission
FACTS: The 99 persons named as petitioners in this proceeding were
rank-and-file employees of respondent Empire Food Products, which
hired them on various dates. Petitioners filed against private respondents
a complaint for payment of money claim[s] and for violation of labor
standard[s] laws. On January 23, 1991, petitioners filed a complaint
docketed as NLRC Case No. RAB-III-01- 1964-91 against private
respondents for: After the submission by the parties of their respective
position papers and presentation of testimonial evidence, Labor Arbiter
Ariel C. Santos absolved private respondents of the charges of unfair
labor practice, union busting, violation of the memorandum of
agreement, underpayment of wages and denied petitioners' prayer for
actual, moral and exemplary damages. Labor Arbiter Santos, however,
directed the reinstatement of the individual complainants:
ISSUE: Whether or not the petitioners are pakyao or per piece
workers and therefore not entitled to benefits as that of a regular
employee.
HELD: As to the other benefits, namely, holiday pay, premium pay,
13th month pay and service incentive leave which the labor arbiter
failed to rule on but which petitioners prayed for in their complaint, 15
we hold that petitioners are so entitled to these benefits. Three (3)
factors lead us to conclude that petitioners, although piece-rate workers,
were regular employees of private respondents.
First, as to the nature of petitioners' tasks, their job of repacking snack
food was necessary or desirable in the usual business of private
respondents, who were engaged in the manufacture and selling of such
food products; second, petitioners worked for private respondents
throughout the year, their employment not having been dependent on a
specific project or season; and third, the length of time 16 that
petitioners worked for private respondents.
Thus, while petitioners' mode of compensation was on a "per piece
basis," the status and nature of their employment was that of regular
employees. The Rules Implementing the Labor Code exclude certain
employees from receiving benefits such as nighttime pay, holiday pay,
service incentive leave 17 and 13th month pay, 18 inter alia, "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." Plainly, petitioners as piece-rate workers do not
fall within this group. As mentioned earlier, not only did petitioners
labor under the control of private respondents as their employer,
likewise did petitioners toil throughout the year with the fulfillment of
their quota 23 as supposed basis for compensation. Further, in Section 8
5
LABOR DIGEST COMPILATION 2
(b), Rule IV, Book III which we quote hereunder, piece workers are
specifically mentioned as being entitled to holiday pay.
Sec. 8. Holiday pay of certain employees. (b) Where a covered
employee is paid by results or output, such as payment on piece work,
his holiday pay shall not be less than his average daily earnings for the
last seven (7) actual working days preceding the regular holiday:
Provided, however, that in no case shall the holiday pay be less than the
applicable statutory minimum wage rate.
The Supreme Court in its decision held: DECLARING petitioners to
have been illegally dismissed by private respondents, thus entitled to full
back wages and other privileges, and separation pay in lieu of
reinstatement at the rate of one month's salary for every year of service
with a fraction of six months of service considered as one year
Best Wear Garments v. De Lemos and Ocubillo
FACTS:
Respondents Adelaida De Lemos and Cecile Ocubillo were employees
of Best Wear Garments (Best Wear) owned by Warren Pardilla. In 2004,
De Lemos and Ocubillo filed a case for illegal dismissal. Both alleged
that they were arbitrarily transferred to other areas of operation of
Pardillas garments company, which they said amounted to constructive
dismissal as it resulted in less earnings for them. They also claimed that
the reason for their transfer is their refusal to render overtime work until
7:00 p.m.
Best wear countered that De Lemos and Ocubillo are piece-rate workers
and hence they are not paid according to the number of hours worked.
Best Wear also averred that the two were not illegally terminated;
rather, they were the ones who resigned.
The Labor Arbiter ruled that De Lemos and Ocubillo were
constructively dismissed from employment. On appeal, the NLRC found
no basis for the charge of constructive dismissal. Aggrieved, De Lemos
and Ocubillo appealed to the Court of Appeals. The CA reinstated the
LAs decision. Hence, this instant petition.
ISSUE: Whether or not the Court of Appeals erred in ruling that De
Lemos and Ocubillo were constructively dismissed?
HELD: De Lemos and Ocubillo were not constructively dismissed.
LABOR LAW: transfer; management prerogative; piece-rate workers
The right of employees to security of tenure does not give them vested
rights to their positions to the extent of depriving management of its
prerogative to change their assignments or to transfer them. Thus, an
employer may transfer or assign employees from one office or area of
operation to another, provided there is no demotion in rank or
diminution of salary, benefits, and other privileges, and the action is not
motivated by discrimination, made in bad faith, or effected as a form of
punishment or demotion without sufficient cause.
Being piece-rate workers assigned to individual sewing machines, their
earnings depended on the quality and quantity of finished products. That
their work output might have been affected by the change in their
specific work assignments does not necessarily imply that any resulting
reduction in pay is tantamount to constructive dismissal. Workers under
piece-rate employment have no fixed salaries and their compensation is
computed on the basis of accomplished tasks. The constitutional policy
of providing full protection to labor is not intended to oppress or destroy
management. While the Constitution is committed to the policy of social
justice and the protection of the working class, it should not be supposed
that every labor dispute will be automatically decided in favor of labor.
6
LABOR DIGEST COMPILATION 2
Management also has its rights which are entitled to respect and
enforcement in the interest of simple fair play. Thus, where management
prerogative to transfer employees is validly exercised, as in this case,
courts will decline to interfere.
Legend Hotel Manila v.Hernani S. Realuyo
FACTS:
This is a labor case involving Realuyo, with stage name Joey Roa, a
pianist employed by Legend Hotel. Realuyo filed a complaint for
alleged ULP, constructive illegal dismissal, and underpayment of
premium pay for holidays, separation pay, service incentive leave pay,
and 13th month pay, with further prayer for attorneys fees and moral
and exemplary damages.
Realuyo averred that he had worked as a pianist for the Legend Hotels
Tanglaw Restaurant from September 1992, starting with an initial rate of
P400/night, eventually increasing to P750/night. He could not choose
the time of his performance, as it was fixed from 7:00 pm to 10:00 pm
for 3-6 times per week. He also stated that the Legend Hotels restaurant
manager required him to follow the hotel motif, and that he had been
subjected to the rules on employees representation checks and chits
(which was a privilege given to employees).
On July 9, 1999, however, hotel management informed Realuyo that,
due to cost-cutting measures undertaken by the hotel, his services would
no longer be required effective July 30, 1999 (only 21 days after
informing him of his dismissal). Realuyo insisted, however, that the
hotel was lucratively operating at the time of filing of the complaint.
In its defense, Legend denied the existence of any employer-employee
(ER-EE) relationship with Realuyo, and that he was only a talent
engaged to provide live music at Legends Madison Coffee Shop for 3
hours/day on 2 days/week. Legend also averred that, due to the
economic crisis, management was constrained to dispense with his
services.
The Labor Arbiter (LA) dismissed the complaint for lack of merit upon
the finding that there was no ER-EE relationship between Realuyo and
Legend. This finding was based on the admission of Realuyo on a letter
stating that what he received from Legend in exchange for his services
was a talent fee and not a salary. This was reinforced by the fact that
Realuyo received his salary nightly, unlike the other employees who
received their salaries monthly. Upon appeal, the NLRC affirmed the
same.
The CA, however, reversed the LA and NLRC, stating that the four
elements of ER-EE relationship exists, most importantly the element of
employee control in the form of the supervision and control exercised by
the restaurant manager of Legend.
ISSUES:
1. WON Realuyo was an employee of Legend Hotel. YES, ER-EE
relationship existed between the parties.
2. WON Realuyo was validly terminated.
RATIO:
1. The Court found for Realuyo in stating that an ER-EE
relationship indeed existed between the parties. The Court
enumerated the four-fold test factors, namely:
Power to select the employee
Payment of employees wages
Power to dismiss the employee
Exercise of control over the methods and results by which
the work of the employee is accomplished (employee
control)
7
LABOR DIGEST COMPILATION 2
Applying these factors to the case at hand, the Court found that Realuyo
was indeed Legend Hotels employee. He was employed as a pianist in
the Madison Coffee Shop and Tanglaw Restaurant from September
1992 until July 1999.
Legend was found to have wielded the power of selection when it
entered into the service contract with Realuyo, as well as express written
recommendations by the restaurant manager for increase of
remuneration.
Further to this, the Court pointed out that, despite the denomination of
the received remuneration as talent fees, these remunerations were
considered as included in the term wage in the sense and context of
the Labor Code, regardless of the designation. As stated in Article 97(f)
of the Labor Code:
Wage paid to any employee shall mean the remuneration or
earnings, however designated, capable of being expressed in terms of
money, whether fixed or ascertained on a time, task, piece, or
commission basis, or other method of calculating the same, which is
payable by an employer to an employee under a written or unwritten
contract of employment for work done or to be done, or for services
rendered or to be rendered, and includes the fair and reasonable value,
as determined by the Secretary of Labor, of board, lodging, or other
facilities customarily furnished by the employer to the employee.
From the case, it was clear that Realuyo indeed received compensation
for services rendered as the hotels pianist.
Also, the fact that Realuyo worked for less than 8 hours/day was of no
consequence and did not detract from finding for the existence of the
ER-EE relationship. In providing that the "normal hours of work of any
employee shall not exceed eight (8) hours a day," Article 83 of the
Labor Code only set a maximum of number of hours as "normal hours
of work" but did not prohibit work of less than eight hours.
Thirdly, the power of control over the work of Realuyo, considered as
the most significant determinant of the existence of an ER-EE
relationship, was seen on the following facts:
He could not choose the time of his performance, which
petitioners had fixed from 7:00 pm to 10:00 pm, three to six
times a week;
He could not choose the place of his performance;
The restaurants manager required him at certain times to
perform only Tagalog songs or music, or to wear barong
Tagalog to conform to the Filipiniana motif; and
He was subjected to the rules on employees representation
check and chits, a privilege granted to other employees.
It must be noted that the employer need not actually supervise the
performance of duties by the employee, for it sufficed that the employer
has the right to wield that power.
Finally, the Court pointed out that Legend possessed the power to
dismiss Realuyo in that the memorandum informing Realuyo of the
discontinuance of his service because of the present business or
financial condition of Legend showed that the latter had the power to
dismiss him from employment.
2. It must be noted that retrenchment is one of the authorized
causes for the dismissal of employees recognized by the Labor
Code. It is a management prerogative resorted to by employers
to avoid or to minimize business losses. Article 283 of the
Labor Code states:
8
LABOR DIGEST COMPILATION 2
Article 283. Closure of establishment and reduction of personnel. The
employer may also terminate the employment of any employee due to
the installation of labor-saving devices, redundancy, retrenchment to
prevent losses or the closing or cessation of operation of the
establishment or undertaking unless the closing is for the purpose of
circumventing the provisions of this Title, by serving a written notice on
the workers and the Ministry of Labor and Employment at least one (1)
month before the intended date thereof. xxx. In case of retrenchment to
prevent losses and in cases of closures or cessation of operations of
establishment or undertaking not due to serious business losses or
financial reverses, the separation pay shall be equivalent to one (1)
month pay or at least one-half (1/2) month pay for every year of service,
whichever is higher. A fraction of at least six (6) months shall be
considered one (1) whole year.
The Court has provided the standards that an employer should meet to
justify retrenchment, namely:
(a) The expected losses should be substantial and not merely de minimis
in extent;
(b) The substantial losses apprehended must be reasonably imminent;
(c) The retrenchment must be reasonably necessary and likely to
effectively prevent the expected losses; and
(d) The alleged losses, if already incurred, and the expected imminent
losses sought to be forestalled must be proved by sufficient and
convincing evidence.
From the case itself, the Court concluded that the burden of proof of
Legend to prove that the dismissal was for a valid or authorized cause
was not given by Legend, as it did not submit evidence of the losses to
its business operations and the economic chaos it would imminently
suffer. The statements regarding Realuyos termination due to present
business/financial condition were considered as insufficient to show a
valid retrenchment. As a result, the Court cannot allow the termination
of Realuyo due to retrenchment.
However, the lapse of time since the retrenchment may have made a
return to the job as unfeasible, therefore the Court ordered Legend to
pay separation pay at the rate of 1 month pay for every year of service
rendered, as well as full backwages.
MEAL PERIOD
Philippine Air Lines v. NLRC
FACTS:
Private respondent Dr. Fabros was employed as flight surgeon at
petitioner company. He was assigned at the PAL Medical Clinic and
was on duty from 4:00 in the afternoon until 12:00 midnight.
On Feb.17, 1994, at around 7:00 in the evening, Dr. FAbros left the
clinic to have his dinner at his residence, which was abou t5-minute
drive away. A few minutes later, the clinic received an emergency call
from the PAL Cargo Services. One of its employeeshad suffered a heart
attack. The nurse on duty, Mr. Eusebio, called private respondent at
home to inform him of the emergency. The patient arrived at the clinic
at 7:50 in the evening and Mr. Eusebio immediately rushed him to the
hospital. When Dr. Fabros reached the clinic at around 7:51 in the
evening, Mr. Eusebio had already left with the patient to the hospital.
The patient died the following day.
Upon learning about the incident, PAL Medical Director ordered the
Chief Flight Surgeon to conduct an investigation. In his explanation, Dr.
Fabros asserted that he was entitled to a thirty-minute meal break; that
he immediately left his residence upon being informed by Mr. Eusebio
about the emergency and he arrived at the clinic a few minutes later; that
Mr. Eusebio panicked and brought the patient to the hospital without
waiting for him.
9
LABOR DIGEST COMPILATION 2
Finding private respondents explanation unacceptable, the management
charged private respondent with abandonment of post while on duty. He
denied that he abandoned his post on February 17, 1994. He said that he
only left the clinic to have his dinner at home. In fact, he returned to the
clinic at 7:51 in the evening upon being informed of the emergency.
After evaluating the charge as well as the answer of private respondent,
he was given a suspension for three months effective December 16,
1994.
Private respondent filed a complaint for illegal suspension against
petitioner.
On July 16, 1996, the Labor Arbiter rendered a decision declaring the
suspension of private respondent illegal. It also ordered petitioner to pay
private respondent the amount equivalent to all the benefits he should
have received during his period of suspension plus P500,000.00 moral
damages.
Petitioner appealed to the NLRC.
The NLRC, however, dismissed the appeal after finding that the
decision of the Labor Arbiter is supported by the facts on record and the
law on the matter. The NLRC likewise denied petitioners motion for
reconsideration.
Hence, this petition.
ISSUE:
1. WON the nullifying of the 3-month suspension by the NLRC
erroneous.
2. WON the awarding of moral damages is proper.
HELD:
The petition is PARTIALLY GRANTED. The portion of the assailed
decision awarding moral damages to private respondent is DELETED.
All other aspects of the decision are AFFIRMED
1. The legality of private respondents suspension: Dr. Fabros left the
clinic that night only to have his dinner at his house, which was only a
few minutes drive away from the clinic. His whereabouts were known
to the nurse on duty so that he could be easily reached in case of
emergency. Upon being informed of Mr. Acostas condition, private
respondent immediately left his home and returned to the clinic. These
facts belie petitioners claim of abandonment. Petitioner argues that
being a full-time employee, private respondent is obliged to stay in the
company premises for not less than eight (8) hours. Hence, he may not
leave the company premises during such time, even to take his meals.
We are not impressed. Art. 83 and 85 of the Labor Code read: Art. 83.
Normal hours of work. The normal hours of work of any employee
shall not exceed eight (8) hours a day. Health personnel in cities and
municipalities with a population of at least one million (1,000,000) or in
hospitals and clinics with a bed capacity of at least one hundred (100)
shall hold regular office hours for eight (8) hours a day, for five (5) days
a week, exclusive of time for meals, except where the exigencies of the
service require that such personnel work for six (6) days or forty-eight
(48) hours, in which case they shall be entitled to an additional
compensation of at least thirty per cent (30%) of their regular wage for
work on the sixth day. For purposes of this Article, health personnel
shall include: resident physicians, nurses, nutritionists, dieticians,
pharmacists, social workers, laboratory technicians, paramedical
technicians, psychologists, midwives, attendants and all other hospital or
clinic personnel. (emphasis supplied) Art. 85. Meal periods. Subject
to such regulations as the Secretary of Labor may prescribe, it shall be
the duty of every employer to give his employees not less than sixty (60)
minutes time-off for their regular meals. Sec. 7, Rule I, Book III of the
Omnibus Rules Implementing the Labor Code further states: Sec. 7.
Meal and Rest Periods. Every employer shall give his employees,
regardless of sex, not less than one (1) hour time-off for regular meals,
except in the following cases when a meal period of not less than twenty
(20) minutes may be given by the employer provided that such shorter
meal period is credited as compensable hours worked of the employee;
(a) Where the work is non-manual work in nature or does not involve
10
LABOR DIGEST COMPILATION 2
strenuous physical exertion; (b) Where the establishment regularly
operates not less than sixteen hours a day; (c) In cases of actual or
impending emergencies or there is urgent work to be performed on
machineries, equipment or installations to avoid serious loss which the
employer would otherwise suffer; and (d) Where the work is necessary
to prevent serious loss of perishable goods. Rest periods or coffee
breaks running from five (5) to twenty (20) minutes shall be considered
as compensable working time. Thus, the eight-hour work period does
not include the meal break. Nowhere in the law may it be inferred that
employees must take their meals within the company premises.
Employees are not prohibited from going out of the premises as long as
they return to their posts on time. Private respondents act, therefore, of
going home to take his dinner does not constitute abandonment. 2. The
award of moral damages: Not every employee who is illegally dismissed
or suspended is entitled to damages. As a rule, moral damages are
recoverable only where the dismissal or suspension of the employee was
attended by bad faith or fraud, or constituted an act oppressive to labor,
or was done in a manner contrary to morals, good customs or public
policy In the case at bar, there is no showing that the management of
petitioner company was moved by some evil motive in suspending
private respondent. It suspended private respondent on an honest, albeit
erroneous, belief that private respondents act of leaving the company
premises to take his meal at home constituted abandonment of post
which warrants the penalty of suspension. Under the circumstances, we
hold that private respondent is not entitled to moral damages.
WAITING TIME
Arica v NLRC
FACTS: Teofilo Arica et al and 561 others sued Standard Fruits
Corporation (STANFILCO) Philippines for allegedly not paying the
workers for their assembly time which takes place every work day from
5:30am to 6am. The assembly time consists of the roll call of the
workers; their getting of assignments from the foreman; their filling out
of the Laborers Daily Accomplishment Report; their getting of tools
and equipments from the stockroom; and their going to the field to
work. The workers alleged that this is necessarily and primarily for
STANFILCOs benefit.
ISSUE: Whether or not the workers assembly time should be paid.
HELD: No. The thirty minute assembly time long practiced and
institutionalized by mutual consent of the parties under Article IV,
Section 3, of the Collective Bargaining Agreement cannot be considered
as waiting time within the purview of Section 5, Rule I, Book III of the
Rules and Regulations Implementing the Labor Code . . .
Furthermore, the thirty (30)-minute assembly is a deeply-rooted,
routinary practice of the employees, and the proceedings attendant
thereto are not infected with complexities as to deprive the workers the
time to attend to other personal pursuits. In short, they are not subject to
the absolute control of the company during this period, otherwise, their
failure to report in the assembly time would justify the company to
impose disciplinary measures.
TRAVEL TIME
Rada v NLRC
FACTS: In 1977, Hilario Rada was contracted by Philnor Consultants
and Planners, Inc as a driver. He was assigned to a specific project in
Manila. The contract he signed was for 2.3 years. His task was to drive
employees to the project from 7am to 4pm. He was allowed to bring
home the company vehicle in order to provide a timely transportation
service to the other project workers. The project he was assigned to was
not completed as scheduled hence, since he has a satisfactory record, he
11
LABOR DIGEST COMPILATION 2
was re-contracted for an additional 10 months. After 10 months the
project was not yet completed. Several contracts thereafter were made
until the project was finished in 1985.
At the completion of the project, Rada was terminated as his
employment was co-terminous with the project. He later sued Philnor
for non payment of separation pay and overtime pay. He said he is
entitled to be paid OT pay because he uses extra time to get to the
project site from his home and from the project site to his home
everyday in total, he spends an average of 3 hours OT every day.
ISSUE: Whether or not Rada is entitled to separation pay and OT pay.
HELD: Separation pay NO. Overtime pay Yes.
Separation Pay
The SC ruled that Rada was a project employee whose work was
coterminous with the project for which he was hired. Project employees,
as distinguished from regular or non-project employees, are mentioned
in Section 281 of the Labor Code as those where the employment has
been fixed for a specific project or undertaking the completion or
termination of which has been determined at the time of the engagement
of the employee.
Project employees are not entitled to termination pay if they are
terminated as a result of the completion of the project or any phase
thereof in which they are employed, regardless of the number of projects
in which they have been employed by a particular construction
company. Moreover, the company is not required to obtain clearance
from the Secretary of Labor in connection with such termination.
OT Pay
Rada is entitled to OT pay. The fact that he picks up employees of
Philnor at certain specified points along EDSA in going to the project
site and drops them off at the same points on his way back from the field
office going home to Marikina, Metro Manila is not merely incidental to
Radas job as a driver. On the contrary, said transportation arrangement
had been adopted, not so much for the convenience of the employees,
but primarily for the benefit of Philnor. As embodied in Philnors
memorandum, they allowed their drivers to bring home their transport
vehicles in order for them to provide a timely transport service and to
avoid delay not really so that the drivers could enjoy the benefits of
the company vehicles nor for them to save on fair.
OVERTIME WORK
Pigcaulan v. Security and Credit investigation
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. Respondents, however, maintained that Canoy and Pigcaulan
were paid their just salaries and other benefits under the law; that the
salaries they received were above the statutory minimum wage and the
rates provided by the Philippine Association of Detective and Protective
Agency Operators (PADPAO) for security guards; that their holiday pay
were already included in the computation of their monthly salaries; that
they were paid additional premium of 30% in addition to their basic
salary whenever they were required to work on Sundays and 200% of
their salary for work done on holidays; and, that Canoy and Pigcaulan
were paid the corresponding 13th month pay for the years 1998 and
1999. Labor arbiter favored to the Petitioner and NLRC affirmed the
decision of the labor arbiter. Respondent appeal to the Court of Appeals
set aside the ruling of the NLRC and Labor Arbiter. Hence, the present
Petition for Review on Certiorari.
12
LABOR DIGEST COMPILATION 2
Issues
I. The Honorable Court of Appeals erred when it dismissed the
complaint on mere alleged failure of the Labor Arbiter and the NLRC to
observe the prescribed form of decision, instead of remanding the case
for reformation of the decision to include the desired detailed
computation.
II. The Honorable Court of Appeals erred when it [made] complainants
suffer the consequences of the alleged non-observance by the Labor
Arbiter and NLRC of the prescribed forms of decisions considering that
they have complied with all needful acts required to support their
claims.
III. The Honorable Court of Appeals erred when it dismissed the
complaint allegedly due to absence of legal and factual [bases] despite
attendance of substantial evidence in the records.
Ruling
The Verification and Certification of Non-Forum Shopping
attached to the petition was executed by Pigcaulan alone, it was plainly
and particularly indicated under the name of the lawyer who prepared
the same, Atty. Josefel P. Grageda, that he is the Counsel for Petitioner
Adbuljuahid Pigcaulan only. In view of these, there is therefore, no
doubt, that the petition was brought only on behalf of Pigcaulan. Since
no appeal from the CA Decision was brought by Canoy, same has
already become final and executory as to him. Canoy failed to show any
reasonable cause for his failure to join Pigcaulan to personally sign the
Certification of Non-Forum Shopping. It is his duty, as a litigant, to be
prudent in pursuing his claims against SCII, especially so, if he was
indeed suffering from financial distress.
The Labor Arbiter and the NLRC erred in this regard. 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. Written only in pieces of paper and solely prepared by Canoy
and Pigcaulan, these representative daily time records, as termed by the
Labor Arbiter, can hardly be considered as competent evidence to be
used as basis to prove that the two were underpaid of their salaries. We
find nothingcontention 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 in the records which could
substantially support Pigcaulans 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. Article 94 of the Labor
Code provides that Every worker shall be paid his regular daily wage
during regular holidays, except in retail and service establishments
regularly employing less than ten (10) workers. While Article 95 of the
Labor Code provides Every employee who has rendered at least one
year of service shall be entitled to a yearly service incentive of five days
with pay. Hence for he rendered service for more than a year
already. Furthermore, under Presidential Decree No. 851,[31] he should
be paid his 13th month pay. As employer, SCII has the burden of
proving that it has paid these benefits to its employees. The CA is not
correct in dismissing Pigcaulans claims in its entirety.
Consistent with the rule that all money claims arising from an
employer-employee relationship shall be filed within three years from
the time the cause of action accrued,[34] Pigcaulan can only demand the
amounts due him for the period within three years preceding the filing
of the complaint in 2000. Furthermore, since the records are insufficient
to use as bases to properly compute Pigcaulans claims, the case should
be remanded to the Labor Arbiter for a detailed computation of the
monetary benefits due to him.
13
LABOR DIGEST COMPILATION 2
HOLIDAY PAY
Mantrade Workers Union v. Bacungan
FACTS:
Petitoner Mantrade Union files a petition for certiorari and mandamus
against the respondent Voluntary Arbitrator Bacungan and Mantrade
Development Corporation.
Bacungan ruled that, Mantrade Development Corporation is not under
legal obligation to pay holiday pay (as provided for in Article 94 of the
Labor Code in the third official Department of Labor edition) to its
monthly paid employees who are uniformly paid by the month,
irrespective of the number of working days therein, with a salary of not
less than the statutory or established minimum wage.
Mantrade Union questions the validity of the Sec. 2, Rule IV, Book III
of the Rules and Regulations Implementing the Labor Code as amended
on which Bacungan based his decision.
Respondents raised procedural and substantive objections. They
contend that:
O The decision of the voluntary arbitrator is final, as provided by law
O Mantrade Development Corp. does not have any legal obligation to
grant its montly salaried employees holiday pay, unless it is argued that
the pertinent section of the Rules and Regulations implementing Sec. 94
of the Labor Code is not in conformity with the law, and thus, without
force and effect
O mandamus does not lie to compel the performance of an act which
law does not clearly enjoin as a duty
*see notes for complete arguments raised
ISSUE/ HELD:
1. WON decision of the Voluntary Arbitrator is final NO.
The decision of a voluntary arbitrator is reviewable by the court. Citing
its decision in Oceanic Bic Division (FFW) v. Romero, the Court
reasoned that a voluntary arbitrator by the nature of her functions acts in
a quasi-judicial capacity. There is no reason why her decisions involving
interpretation of law should be beyond this Courts review.
Administrative officials are presumed to act in accordance with law and
yet we do not hesitate to pass upon their work where a question of law is
involved or where a showing of abuse of discretion in their official acts
is properly raised in petitions for certiorari.
2. WON monthly salaried workers are excluded from holiday pay- NO
Respondent corporation is under legal obligation to grant its monthly
salaried employees holiday pay. As decided by the court in Insular Bank
of Asia and American Employees Union v Inciong, Sec. 2, Rule IV,
Book III of the Rules and Regulations Implementing the Labor Code is
null and void for enlarging the scope of the exclusion provided for in
Art. 94. Art. 82 provides for the inclusion, and Art. 94 provides for
exclusion. Taken together, it is clear that monthly-paid employees are
not excluded from payment of holiday pay. An administrative
interpretation which diminishes the benefits of labor more than what the
statute delimits or withholds is ultra vires.
2. WON mandamus is the proper remedy YES
Mandamus is an appropriate equitable remedy, in view of the
above-cited subsequent decisions of this Court clearly defining the legal
duty to grant holiday pay to monthly salaried employees
14
LABOR DIGEST COMPILATION 2
Jose Rizal College v NLRC
FACTS:
The National Alliance of Teachers sued Jose Rizal College for alleged
nonpayment of unworked holidays from 1975 to 1977. The members of
the Alliance concerned are faculty members who are paid on the basis of
student contract hour.
ISSUE: Whether or not the school faculty are entitled to unworked
holiday pay.
HELD: As far as unworked regular holidays are concerned, the teachers
are not entitled to holiday pay. Regular holidays specified as such by
law are known to both school and faculty members as no class days;
certainly the latter do not expect payment for said unworked days, and
this was clearly in their minds when they entered into the teaching
contracts.
On the other hand, the teachers are entitled to be paid for unworked
special holidays. Otherwise stated, the faculty member, although forced
to take a rest, does not earn what he should earn on that day. Be it noted
that when a special public holiday is declared, the faculty member paid
by the hour is deprived of expected income, and it does not matter that
the school calendar is extended in view of the days or hours lost, for
their income that could be earned from other sources is lost during the
extended days. Similarly, when classes are called off or shortened on
account of typhoons, floods, rallies, and the like, these faculty members
must likewise be paid, whether or not extensions are ordered.
TAPEA v. NLRC
Facts:
On 7 July 1988, Trans-Asia Philippines Employees Association
(TAPEA) entered into a Collective Bargaining Agreement (CBA)
with their employer. The CBA provided for, among others, the payment
of holiday pay with a stipulation that if an employee is permitted to
work on a legal holiday, the said employee will receive a salary
equivalent to 200% of the regular daily wage plus a 60% premium pay.
Despite the conclusion of the CBA, however, an issue was still left
unresolved with regard to the claim of TAPEA for payment of holiday
pay. Since the parties were not able to arrive at an amicable settlement
despite the conciliation meetings, TAPEA, led by its President,
petitioner Arnie Galvez, filed a complaint for the payment of their
holiday pay in arrears. On 18 September 1988, petitioners amended their
complaint to include the payment of holiday pay for the duration of the
recently concluded CBA (from 1988 to 1991), unfair labor practice,
damages and attorneys fees.
In their Position Paper, TAPEA contended that their claim for holiday
pay in arrears is based on the non-inclusion of the same in their monthly
pay.
In response, Trans-Asia contended that it has always honored the labor
law provisions on holiday pay by incorporating the same in the payment
of the monthly salaries of its employees. In support of this claim, Trans-
Asia pointed out that it has long been the standing practice of the
company to use the divisor of 286 days in computing for its
employees overtime pay and daily rate deductions for absences.
52 x 44 / 8 = 286 days
Where: 52 = number of weeks in a year
44 = number of work hours per week
8 = number of work hours per day
Trans-Asia further clarified that the 286 days divisor already takes
into account the ten (10) regular holidays in a year since it only subtracts
from the 365 calendar days the unworked and unpaid 52 Sundays and 26
Saturdays (employees are required to work half-day during Saturdays).
Trans-Asia claimed that if the ten (10) regular holidays were not
included in the computation of their employees monthly salary, the
divisor which they would have used would only be 277 days which is
15
LABOR DIGEST COMPILATION 2

arrived at by subtracting 52 Sundays, 26 Saturdays and the 10 legal Maundy Thursday Movable Date
holidays from 365 calendar days. Good Friday Movable Date
Labor Arbiter and NLRC: Dismissed the complaint for lack of merit. Araw ng Kagitingan April 9
(Bataan and Corregidor Day)
Issue: Whether the Trans-Asias use of 286 days as divisor is invalid. Labor Day May 1
Independence Day June 12
Held: National Heroes Day Last Sunday of August
No, it is not in such a way that the Supreme Court adjusted the divisor. Bonifacio Day November 30
Trans-Asias inclusion of holiday pay in petitioners monthly salary is Christmas Day December 25
clearly established by its consistent use of the divisor of 286 days in Rizal Day December 30
the computation of its employees benefits and deductions. The use by B. Nationwide Special Days
Trans-Asia of the 286 days divisor was never disputed by petitioners. All Saints Day November 1
A simple application of mathematics would reveal that the ten (10) legal Last Day of the Year December 31
holidays in a year are already accounted for with the use of the said On the other hand, Section 6 of the Implementing Rules and Regulations
divisor. As explained by Trans-Asia, if one is to deduct the unworked 52 of Republic Act No. 6727 provides:
Sundays and 26 Saturdays (derived by dividing 52 Saturdays in half Sec. 6. Suggested Formula in Determining the Equivalent Monthly
since petitioners are required to work half-day on Saturdays) from the Statutory Minimum Wage Rates. Without prejudice from existing
365 calendar days in a year, the resulting divisor would be 286 days company practices, agreements or policies, the following formulas may
(should actually be 287 days). Since the ten (10) legal holidays were be used as guides in determining the equivalent monthly statutory
never included in subtracting the unworked and unpaid days in a minimum wage rates:
calendar year, the only logical conclusion would be that the payment for xxx xxx xxx
holiday pay is already incorporated into the said divisor. d) For those who do not work and are not considered paid on Saturdays
However, SC held that that there is a need to adjust the divisor used by and Sundays or rest days:
Trans-Asia to 287 days, instead of only 286 days, in order to properly Equivalent Monthly = Average Daily Wage Rate x 262 days / 12 months
account for the entirety of regular holidays and special days in a year as Where 262 days =
prescribed by Executive Order No. 203 in relation to Section 6 of the 250 days Ordinary working days
Rules Implementing Republic Act 6727. 10 days Regular holidays
Sec. 1 of Executive Order No. 203 provides: 2 days Special days (If considered paid; if actually worked, this is
Sec. 1. Unless otherwise modified by law, order or proclamation, the equivalent to 2.6
following regular holidays and special days shall be observed in the Based on the above, the proper divisor that should be used for a
country: situation wherein the employees do not work and are not considered
A. Regular Holidays paid on Saturdays and Sundays or rest days is 262 days. In the
New Years Day January 1 present case, since the employees of Trans-Asia are required to work

16
LABOR DIGEST COMPILATION 2
half-day on Saturdays, 26 days should be added to the divisor of 262
days, thus, resulting to 288 days. However, due to the fact that the rest
days of petitioners fall on a Sunday, the number of unworked but paid
legal holidays should be reduced to nine (9), instead of ten (10), since
one legal holiday under E.O. No. 203 always falls on the last Sunday of
August, National Heroes Day. Thus, the divisor that should be used in
the present case should be 287 days.
However, the Court notes that if the divisor is increased to 287 days, the
resulting daily rate for purposes of overtime pay, holiday pay and
conversions of accumulated leaves would be diminished. To illustrate, if
an employee receives P8,000.00 as his monthly salary, his daily rate
would be P334.49, computed as follows:
P8,000.00 x 12 months / 287 days = P334.49/day
Whereas if the divisor used is only 286 days, the employees daily rate
would be P335.66, computed as follows:
P8,000.00 x 12 months / 286 days = P335.66/day
Clearly, this muddled situation would be violative of the proscription on
the non-diminution of benefits under Section 100 of the Labor Code. On
the other hand, the use of the divisor of 287 days would be to the
advantage of petitioners if it is used for purposes of computing for
deductions due to the employees absences. In view of this situation, the
Court rules that the adjusted divisor of 287 days should only be used by
Trans-Asia for computations which would be advantageous to
petitioners (i.e., deductions for absences), and not for computations
which would diminish the existing benefits of the employees (i.e.,
overtime pay, holiday pay and leave conversions.)
SC Decision:
WHEREFORE, the Resolutions of the NLRC, dated 23 November 1993
and 13 September 1994, are hereby AFFIRMED with the
MODIFICATION that Trans-Asia is hereby ordered to adjust its divisor
to 287 days and pay the resulting holiday pay in arrears brought about
by this adjustment starting from 30 June 1987, the date of effectivity of
E.O. No. 203.
Wellington Investment & Manufacturing Corporation vs. Trajano
Facts: By virtue of the routine inspection conducted by a Labor
Enforcement Officer, Wellington Flour Mills owned by the petitioner-
company was found non-payment of regular holidays falling on a
Sunday for monthly-paid employees. Wellington argued that the
monthly-paid employees already includes holiday pay for all regular
holidays and there is no legal basis for the finding of alleged non-
payment of regular holidays falling on a Sunday. It further contends that
it pays its monthly paid employees a fixed monthly compensation using
the 314 factor which undeniably covers and already includes payment
for all the working days in a month as well as all the 10 un-worked
regular holidays within a year. The Regional Director ordered the
petitioner to pay the employees additional compensation corresponding
to 4 extra working days. However, the petitioner argued that the
company, using the 314 factor already gave complete payment of all
compensation due to its workers. Petitioner appealed and was acted on
by the respondent Undersecretary. But still, Regional Directors
decision was affirmed. Hence, this petition.
Issue: Whether or not a monthly-paid employees, receiving a fixed
monthly compensation, is entitled to an additional pay aside from his
usual holiday pay whenever a regular holiday falls on a Sunday.
Held: Regional Directors decision, affirmed by the Undersecretary, is
nullified and set aside. Every worker should be paid his regular daily
wage during regular holidays; except in retail and service establishments
regularly employing less than 10 workers, even if the worker does not
work on these regular holidays. The Wellington had been paying its
employees a salary of not less than the statutory minimum wage and that
the monthly salary, thus, paid was not less than the statutory minimum
wage multiplied by 365 days divided by 12. Apparently the monthly
salary was fixed by Wellington to provide for compensation for every
17
LABOR DIGEST COMPILATION 2
working day of the year including holidays specified by law and
excluding only Sundays. Wellington leaves no day unaccounted for, it is
paying for all the days of a year with the exception only of 51 Sundays.
San Miguel Corp. v. Court of Appeals
Facts:
The Department of Labor and Employment conducted a routine
inspection in San Miguel Corporation, Iligan City and it was discovered
that there was underpayment by SMC of regular Muslim holiday pay to
its employees. DOLE sent a copy of inspection result to SMC which the
latter contested the findings. SMC failed to submit proof and hence the
Director of DOLE of Iligan District Office issued a compliance order to
pay both its Muslim and non-Muslim employees the Muslim Holidays.
SMC appealed to DOLE main office but dismissed for having been filed
late but later on reconsidered because it is within reglementary period
but still dismissed for lack of merit. Hence, this present petition for
certiorari.
Issue:
Whether or not non-Muslim employees working in Muslim areas is
entitled to Muslim Holiday Pay.
Held:
The Supreme Court dismissed the petition and ordered the petitioner to
pay its non-Muslim employees. The basis for this decision were Articles
169 and 170 of P.D. No. 1083 Code of Muslim Personal Laws which
listed all official Muslim holidays and provincies and cities where
officially observed. In this case, SMC is located in Iligan which is
covered in the those provisions. Also Article 169 and 170 of PD No.
1083 should be read in conjunction with Article 94 of Labor Code
which provides for the right of every worker to be paid of holiday pay.
Petitioner asserts Art.3(3) of PD No. 1083 provides that it shall be
applicable only to Muslims. However, the Court said that said article
declares that nothing herein shall be construed to operate to the
prejudice of a non-Muslim. There should be no distinction between
Muslims and non-Muslims as regards payment of benefits for Muslim
holidays.
It was said also that the The Court of Appeals did not err in sustaining
Undersecretary Espaol who stated: Assuming arguendo that the
respondents position is correct, then by the same token, Muslims
throughout the Philippines are also not entitled to holiday pays on
Christian holidays declared by law as regular holidays. We must remind
the respondent-appellant that wages and other emoluments granted by
law to the working man are determined on the basis of the criteria laid
down by laws and certainly not on the basis of the workers faith or
religion.
Makati Haberdashery v NLRC et al.
Nature: Petition for certiorari to review the decision of the NLRC
which affirmed the decision of the Labor Arbiter who jointly heard and
decided two cases filed by the Union in behalf of the private
respondents
FACTS:
Individual complainants are working for Makati Haberdashery Inc as
tailors, seamstress, sewers, basters, and plantsadoras and are paid on a
piece-rate basis (except two petitioners who are paid on a monthly basis)
In addition, they are given a daily allowance of P 3.00 provided they
report before 9:30 a.m. every day.
Work schedule: 9:30-6 or 7 p.m., Mondays to Saturdays and even on
Sundays and holidays during peak periods.
18
LABOR DIGEST COMPILATION 2
The Sandigan ng Manggagawang Pilipino filed a complaint for
underpayment of the basic wages, underpayment of living allowance,
nonpayment of overtime work, nonpayment of holiday pay, and other
money claims.
The Labor Arbiter rendered judgment in favor of complainants which
the NLRC affirmed but limited back wages to one year.
Petitioner urged that the NLRC erred in concluding that an employer-
employee relationship existed between the petitioner and the workers.
Issue:
1. WON employees paid on piece-rate basis are entitled to service
incentive pay?
2. WON there is an Employer-Employee Relationship?
Held:
1. NO, fall under exceptions set forth in the implementing rules (this
will be reexamined under Article 101).
2. Yes, evident in a Memorandum issued by the Assistant Manager.
Ratio:
1. As to the service incentive leave pay: as piece-rate workers being paid
at a fixed amount for performing work irrespective of time consumed in
the performance thereof, they fall under the exceptions stated in
Sec1(d), Rule V, IRR, Book III, Labor Code.
Service Incentive Leave
SECTION 1. Coverage. This rule shall apply to all employees
except:
(d) Field personnel and other employees whose performance is
unsupervised by the employer including those who are engaged on task
or contract basis, purely commission basis, or those who are paid a fixed
amount for performing work irrespective of the time consumed in the
performance thereof;
2. Employer-Employee Relationship
There is such relationship because in the application of the four-fold
test, it was found that petitioners had control over the respondents not
only as to the result but also as to the means and method by which the
same is to be accomplished. Such control is proven by a memorandum
which enumerates procedures and instructions regarding job orders,
alterations, and their behavior inside the shop issued by the Assistant
Manager which reads in part:
"Effective immediately, new procedures shall be followed:
a. To follow instruction and orders from the undersigned
b. Before accepting the job orders, tailors must check the
materials, job orders, due dates, and other things to
maximize efficiency
c. Effective immediately all job orders, must be finished one
day before the due date. This can be done by proper
scheduling of job order and if you will cooperate with your
supervisors. xxxx
d. If there is any problem regarding supervisors or co-tailor
inside our shop, consult with me at once to settle the
problem. Fighting inside the shop is strictly prohibited. Any
tailor violating this memorandum will be subject to
disciplinary action.
OTHER FACTS: (there are only two main issues, just in case this is
going to be asked)
19
LABOR DIGEST COMPILATION 2

While the first case was pending decision, Pelobello left an open
package containing a jusi barong tagalong with salesman Rivera. He
was caught and confronted about this and he explained that this was
ordered by Zapata, also a worker, for his (personal) customer. Zapata
allegedly admitted that he copied the design of the company but later
denied ownership of the same.
They were made to explain why no action should be taken against them
for accepting a job order which is prejudicial and in direct competition
with the business. However they did not submit and went on AWOL
until the period given for them to explain expired hence the dismissal.
Illegal dismissal complaint on the second case filed before the Labor
Arbiter Diosana (THIS IS THE 3rd ISSUE IN THE FULL CASE).
Held: Entitled. They are regular employees. IRR of Wage No. 1, 2, and
5 provide that all workers in the private sector, regardless of their
position, designation of status, and irrespective of the method by which
their wages are paid are entitled to such allowance.
13th Month pay
Held: Entitled under Sec. 3(e) of the IRR of PD 851 which is an
exception to the exception of such provision which states that employers
whose workers are paid on piece-rate basis in which are covered by such
issuance in so far as such workers are concerned.
Illegal dismissal

LA declared petitioners guilty of illegal dismissal and ordered to
reinstate Pelobello and Zapata and found petitioners violating decrees of
Cost-Of-Living Allowance (COLA), service incentive and 13th month
pay. Commission analyst was directed to compute the monetary awards
which retroacts to three years prior to filing of case.
Held: Dismissed for justifiable ground based on Article 283 (a)and (c).
Inimical to the interest of the employer. Not dismissed just because of
union activities.

Other issues discussed:

Minimum Wage

Held: No dispute that entitled to minimum wage but court dismissed

case for lack of sufficient evidence to support claim that there was in
fact underpayment which was ruled by the LAand which the private
respondents did not appeal to in the NLRC nor in the SC. Well-settled is
the rule that an appellee who has not himself appealed cannot obtain
from the appellate court any affirmative relief other than the ones
granted in the decision of the court below.

COLA (Cost-Of-Living Allowance)

20