V. Working Conditions

A.

MANAGEMENT PREROGATIVE Article 136 of the Labor Code, one of the protective laws for women,
explicitly prohibits discrimination merely by reason of marriage of a female
1. PT&T v. NLRC employee. It is recognized that company is free to regulate manpower and
employment from hiring to firing, according to their discretion and best
Facts: PT&T (Philippine Telegraph & Telephone Company) initially hired Grace business judgment, except in those cases of unlawful discrimination or those
de Guzman specifically as reliever for C.F. Tenorio who went on maternity provided by law.
leave. She was again invited for employment as replacement of Erlina F. Dizon PT&T’s policy of not accepting or disqualifying from work any woman
who went on leave on 2 periods. De Guzman was again asked to join PT&T as worker who contracts marriage is afoul of the right against discrimination
a probationary employee. She indicated in the portion of the job application provided to all women workers by our labor laws and by our Constitution. The
form under civil status that she was single although she had contracted record discloses clearly that de Guzman’s ties with PT&T were dissolved
marriage a few months earlier. principally because of the company’s policy that married women are not
When petitioner learned later about the marriage, its branch qualified for employment in the company, and not merely because of her
supervisor sent de Guzman a memorandum requiring her to explain the supposed acts of dishonesty.
discrepancy including a reminder about the company’s policy of not accepting The policy of PT&T is in derogation of the provisions stated in Art.136
married women for employment. She was dismissed from the company and of the Labor Code on the right of a woman to be free from any kind of
Labor Arbiter handed down a decision declaring that petitioner illegally stipulation against marriage in connection with her employment and it
dismissed de Guzman, who had already gained the status of a regular likewise is contrary to good morals and public policy, depriving a woman of
employee. It was apparent that she had been discriminated on account of her her freedom to choose her status, a privilege that is inherent in an individual
having contracted marriage in violation of company policies. as an intangible and inalienable right. The kind of policy followed by PT&T
strikes at the very essence, ideals and purpose of marriage as an inviolable
Issue: Whether or not the alleged concealment of civil status can be grounds social institution and ultimately, family as the foundation of the nation. Such
to terminate the services of an employee. policy must be prohibited in all its indirect, disguised or dissembled forms as
discriminatory conduct derogatory of the laws of the land not only for order
Held: No. Private respondent’s act of concealing the true nature of her status but also imperatively required. However, SC nevertheless ruled that Grace did
from PT&T could not be properly characterized as in bad faith as she was commit an act of dishonesty, which should be sanctioned and therefore
moved to act the way she did mainly because she wanted to retain a agreed with the NLRC’s decision that the dishonesty warranted temporary
permanent job in a stable company. Thus, could not be a ground to terminate suspension of Grace from work.
her services.

1 of 24 working conditions case digest compilation – labor law B– atty. chan-gonzaga

2. Goya v. Goya Employees Union The Voluntary Arbitrator ruled that the engagement of PESO is not in
keeping with the intent and spirit of the CBA. The Company filed a petition for
Facts: Petitioner Goya, Inc. (Company), a domestic corporation engaged in review in the Court of Appeals.
the manufacture, importation, and wholesale of top quality food products. It
hired contractual employees from PESO Resources Development Corporation Issue: Whether or not the Company is guilty of violating the CBA in engaging
(PESO) to perform temporary and occasional services in its factory in Parang, the services of a third party service provider.
Marikina City.
This prompted respondent Goya, Inc. Employees Union–FFW (Union) Held: A careful reading of the above-enumerated categories of employees
to request for a grievance conference on the ground that the contractual reveals that the PESO contractual employees do not fall within the
workers do not belong to the categories of employees stipulated in the enumerated categories of employees stated in the CBA of the parties. Since
existing Collective Bargaining Agreement (CBA). The matter was unresolved the Company had admitted that it engaged the services of PESO to perform
and referred to National Conciliation and Mediation Board (NCMB) for temporary or occasional services which is akin to those performed by casual
voluntary arbitration. The Union asserted that the hiring of contractual employees, the Company should have tapped the services of casual
employees from PESO is not a management prerogative and in gross violation employees instead of engaging PESO.
of the CBA tantamount to unfair labor practice (ULP). It noted that the While contracting out services is a management prerogative, however,
contractual workers engaged have been assigned to work in positions is not without limitation. In contracting out services, the management must
previously handled by regular workers and Union members in effect violating be motivated by good faith and the contracting out should not be resorted to
CBA’s provision on Categories of Employees which provide only for circumvent the law or must not have been the result of malicious arbitrary
Probationary, Regular, and Casual. With the hiring of contractual employees, actions. In the case at bench, the CBA of the parties has already provided for
the Union contended that it would no longer have probationary and casual the categories of the employees in the Company’s establishment. As stated
employees from which it could obtain additional Union members. earlier, the work to be performed by PESO was similar to that of the casual
In countering the Union’s allegations, the Company argued that: (a) employees. With the provision on casual employees, the hiring of PESO
the law expressly allows contracting and subcontracting arrangements and contractual employees, therefore, is not in keeping with the spirit and intent
that the CBA merely provides for the definition of the categories of of their CBA. It is familiar and fundamental doctrine in labor law that the CBA
employees and does not put a limitation on the Company’s right to engage is the law between the parties and they are obliged to comply with its
the services of job contractors or its management prerogative to address provisions. However, this cannot be considered unfair labor practice, because
temporary/occasional needs in its operation. it is not a gross violation of the CBA.
*** Definition under CBA: Casual Employee – One hired by the Company to
perform occasional or seasonal work directly connected with the regular

operations of the Company, or one hired for specific projects of limited Upon discovery of the said irregularity, TAMPCO BOD initiated an
duration not connected directly with the regular operations of the Company. investigation. Respondent and the other officers who appeared to be
responsible were made to explain. Respondent admitted to her failure to
3. Tabuk Multipurpose Cooperative, Inc. v. Duclan obey BA Nos. 28 & 55 despite knowledge of the directives. Thus, TAMPCO
BOD suspended them from work and were ordered to collect the amount lost
Facts: Petitioner Tabuk Multi-Purpose Cooperative, Inc. (TAMPCO) is a duly by the cooperative with a threat that should they fail to collect, they would
registered cooperative based in Tabuk City, Kalinga. It is engaged in the be dismissed.
business of obtaining investments from its members which are lent out to Respondent failed to collect the amount she was told to collect and
qualified member-borrowers. The two other petitioners are both officers of thereafter, after notice, the cooperative dismissed her service. Thus,
TAMPCO. respondent filed a complaint for illegal dismissal.
On the other hand, respondent Duclan, was employed as TAMPCO
cashier. One of her duties as Cashier was to sign checks for release. Issue: Whether or not respondent was dismissed for a just cause.
In 2002, TAMPCO introduced Special Investment Loans (SILs) to its
members and prospective borrowers. A year after introducing the SIL Held: The dismissal is proper. Under Article 282 of the Labor Code, the
program, TAMPCO realized that a considerable amount of the cooperative's employer may terminate the services of its employee for the latter's serious
loanable funds was being allocated to SILs, which thus adversely affected its misconduct or willful disobedience of its or its representative's lawful orders.
ability to lend under the regular loan program. It further discovered that And for willful disobedience to constitute a ground, it is required that: "(a)
single individual borrowings under the SIL program reached precarious levels, the conduct of the employee must be willful or intentional; and (b) the order
thus placing the resources of the cooperative at risk. Thus, in June 2003, the the employee violated must have been reasonable, lawful, made known to
TAMPCO BOD issued BA No. 28, putting a cap on SIL borrowings at P5 million. the employee, and must pertain to the duties that he had been engaged to
In October of the same year, BA No. 55 was issued, completely prohibiting the discharge.
grant of SILs. In releasing loan proceeds to SIL borrowers like Falgui and Kotoken
Despite issuance of BA Nos. 28 and 55, respondent and the other even after the BOD issued BA Nos. 28 and 55, respondent, and the other
officers of the cooperative including its former General Manager, continued cooperative officers, willfully and repeatedly defied a necessary, reasonable
to approve and release SILs to borrowers, among them Falgui and Kotoken, and lawful directive of the cooperative's BOD, which directive was made
who received millions of pesos in loans in January and December of 2004, known to them and which they were expected to know and follow as a
and in January 2005. Eventually, Falgui claimed insolvency, and Kotoken failed necessary consequence of their respective positions in the cooperative. They
to pay back her loans. placed the resources of the cooperative - the hard-earned savings of its
members - in a precarious state as a result of the inability to collect the loans

owing to the borrowers' insolvency or refusal to honor their obligations, process and valid grounds in accordance with law. Furthermore, he was not
Respondent committed gross insubordination which resulted in massive paid his overtime pay, premium pay for working during holidays/rest days,
financial losses to the cooperative. Applying Article 282, her dismissal is only
night shift differentials and finally claimed for payment of damages and
proper. attorney's fees having been forced to litigate the present complaint.
In termination proceedings of employees, procedural due process Respondent BPC is a domestic corporation duly organized and existing
consists of the twin requirements of notice and hearing. In this case, due under Philippine laws and is represented herein by its General Manager
process was properly observed since respondent was given a chance to HUDSON CHUA, the individual respondent. Respondents allege that
explain and was informed of the decision after a thorough investigation. complainant's separation from service was done pursuant to Art. 283 of the
Respondent cannot question the TAMPCO BOD’s decision as regards Labor Code. The respondent BPC was on temporary closure due to repair and
the General Manager, whom the BOD permitted to retire and collect his general maintenance and it applied for clearance with the Department of
benefits in full, for such decision is management’s prerogative on which the Labor and Employment, Regional Office No. XI, to shut down and to dismiss
courts cannot interfere unless they violate labor laws, CBA and general employees. And due to the insistence of herein complainant he was paid his
principles of fairness & justice. separation benefits.
Consequently, when respondent BPC partially reopened in January
B. COVERAGE (Art. 82) 2001, Peñaranda failed to reapply.
The labor arbiter ruled that there was no illegal dismissal and that
1. Penaranda v. Banganga Plywood Corp petitioner's Complaint was premature because he was still employed by BPC.
Petitioner’s money claims for illegal dismissal was also weakened by his
Facts: Sometime in June 1999, Petitioner Charlito Peñaranda was hired as an quitclaim and admission during the clarificatory conference that he accepted
employee of Baganga Plywood Corporation (BPC) to take charge of the separation benefits, sick and vacation leave conversions and thirteenth
operations and maintenance of its steam plant boiler. In May 2001, month pay.
Peñaranda filed a Complaint for illegal dismissal with money claims against
BPC and its general manager, Hudson Chua, before the NLRC. Issue: Whether or not Peñaranda is a regular, common employee entitled to
After the parties failed to settle amicably, the labor arbiter directed monetary benefits under Art. 82 of the Labor Code and is entitled to the
the parties to file their position papers and submit supporting documents. payment of overtime pay and other monetary benefits.
Peñaranda alleges that he was employed by respondent Banganga on
March 15, 1999 with a monthly salary of P5,000.00 as Foreman/Boiler Held: The petitioner is not entitled to overtime pay and other monetary
Head/Shift Engineer until he was illegally terminated on December 19, 2000. benefits. The Court disagrees with the NLRC's finding that petitioner was a
he alleges that his services were terminated without the benefit of due managerial employee. However, petitioner was a member of the managerial

staff, which also takes him out of the coverage of labor standards. Like The foregoing enumeration, particularly items, 1, 2, 3, 5 and 7
managerial employees, officers and member of the managerial staff are not illustrates that petitioner was a member of the managerial staff. His duties
entitled to the provisions of law on labor standards. and responsibilities conform to the definition of a member of a managerial
The Implementing Rules of the Labor Code define members of a staff under the Implementing Rules.
managerial staff as those with the following duties and responsibilities: (1) Petitioner supervised the engineering section of the steam plant
The primary duty consists of the performance of work directly related to boiler. His work involved overseeing the operation of the machines and the
management policies of the employer; (2) Customarily and regularly exercise performance of the workers in the engineering section. This work necessarily
discretion and independent judgment; (3) (i) Regularly and directly assist a required the use of discretion and independent judgment to ensure the
proprietor or a managerial employee whose primary duty consists of the proper functioning of the steam plant boiler. As supervisor, petitioner is
management of the establishment in which he is employed or subdivision deemed a member of the managerial staff.
thereof; or (ii) execute under general supervision work along specialized or Noteworthy, even petitioner admitted that he was a supervisor. In his
technical lines requiring special training, experience, or knowledge; or (iii) Position Paper, he stated that he was the foreman responsible for the
execute under general supervision special assignments and tasks; and (4) who operation of the boiler. The term foreman implies that he was the
do not devote more than 20 percent of their hours worked in a workweek to representative of management over the workers and the operation of the
activities which are not directly and closely related to the performance of the department. Petitioner's evidence also showed that he was the supervisor of
work described in paragraphs (1), (2), and (3) above." the steam plant. His classification as supervisors is further evident from the
The petitioner’s work involves: 1. To supply the required and manner his salary was paid. He belonged to the 10% of respondent's 354
continuous steam to all consuming units at minimum cost. 2. To supervise, employees who were paid on a monthly basis; the others were paid only on a
check and monitor manpower workmanship as well as operation of boiler daily basis.
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 2. David v. Macasio
employees for effective and safety white working. 6. Recommend parts and
suppliers purchases. 7. To recommend personnel actions such as: promotion, Facts: Macasio filed before the Labor Arbiter a complaint against petitioner
or disciplinary action. 8. To check water from the boiler, feedwater and Ariel L. David, doing business under the name and style “Yiels Hog Dealer,” for
softener, regenerate softener if beyond hardness limit. 9. Implement nonpayment of overtime pay, holiday pay, and 13th month pay. He also
Chemical Dosing. 10. Perform other task as required by the superior from claimed payment for moral and exemplary damages and attorney’s fees; and
time to time. for payment of service incentive leave (SIL).
Macasio alleged before the Labor Arbiter that he had been working as a
butcher for David since January 6, 1995. He claimed that David exercised

effective control and supervision over his work, pointing out that David: (1) “pakyaw” or task basis. The LA concluded that since Macasio was engaged on
set the work day, reporting time and hogs to be chopped, as well as the “pakyaw” or task basis, he is not entitled to overtime, holiday, SIL and 13th
manner by which he was to perform his work; (2) daily paid his salary of month pay.
P700.00, which was increased from P600.00 in 2007, P500.00 in 2006 and The NLRC affirmed the Labor arbiter’s ruling.
P400.00 in 2005; and (3) approved and disapproved his leaves. The CA partly granted Macasio’s certiorari petition and reversed the
Macasio added that David owned the hogs delivered for chopping, as well NLRC’s ruling for having been rendered with grave abuse of discretion. While
as the work tools and implements; David also rented the workplace. He the CA agreed with the LA and the NLRC that Macasio was a task basis
further claimed that David employs about twenty-five (25) butchers and employee, it nevertheless found Macasio entitled to his monetary claims. The
delivery drivers. CA explained that as a task basis employee, Macasio is excluded from the
David claimed that he started his hog dealer business in 2005, and that coverage of holiday, SIL and 13th month pay only if he is likewise a “field
he only has ten employees. He alleged that he hired Macasio as a butcher or personnel.”
chopper on “pakyaw” or task basis who is, therefore, not entitled to overtime As defined by the Labor Code, a “field personnel” is one who performs
pay, holiday pay and 13th month pay. the work away from the office or place of work, and whose regular work
David pointed out that Macasio: (1) usually starts his work at 10:00 hours cannot be determined with reasonable certainty.
p.m. and ends at 2:00 a.m. of the following day or earlier, depending on the In Macasio’s case, the elements that characterize a “field personnel”
volume of the delivered hogs; (2) received the fixed amount of P700.00 per are evidently lacking as he had been working as a butcher at David’s “Yiels
engagement, regardless of the actual number of hours that he spent Hog Dealer” business in Sta. Mesa, Manila under David’s supervision and
chopping the delivered hogs; and (3) was not engaged to report for work and, control, and for a fixed working schedule that starts at 10:00 p.m.
accordingly, did not receive any fee when no hogs were delivered. Accordingly, the CA awarded Macasio’s claim for holiday, SIL and 13th
Macasio disputed David’s allegations. He argued that, first, David did month pay for three years, with 10% attorney’s fees on the total monetary
not start his business only in 2005. He pointed to the Certificate of award. Hence, David filed the present petition.
Employment that David issued in his favor which placed the date of his
employment, albeit erroneously, in January 2000. Second, he reported for Issue: Whether or not Macasio is entitled of overtime pay, holiday pay, 13th
work every day which the payroll or time record could have easily proved had month pay and payment for service incentive leave.
David submitted them in evidence.
David claimed that he issued the Certificate of Employment, upon Held: David confuses engagement on “pakyaw” or task basis with the lack of
Macasio’s request, only for overseas employment purposes. employment relationship. Impliedly, David asserts that their “pakyawan” or
The Labor Arbiter dismissed Macasio’s complaint for lack of merit. The task basis arrangement negates the existence of employment relationship.
Labor Arbiter gave credence to David’s claim that he engaged Macasio on

The Supreme Court reject this assertion of the petitioner. With respect to the payment of 13th month pay however, the
Engagement on “pakyaw” or task basis does not characterize the relationship Supreme Court find that the CA legally erred in finding that the NLRC gravely
that may exist between the parties, i.e., whether one of employment or abused its discretion in denying this benefit to Macasio.
independent contractorship. The governing law on 13th month pay is PD 8 5 1. As with holiday and
To determine the existence of an employer-employee relationship, SIL pay, 13th month pay benefits generally cover all employees; an employee
four elements generally need to be considered, namely: (1) the selection and must be one of those expressly enumerated to be exempted. Section 3 of the
engagement of the employee; (2) the payment of wages; (3) the power of Rules and Regulations Implementing P.D. 851 enumerates the exemptions
dismissal; and (4) the power to control the employee’s conduct. These from the coverage of 13th month pay benefits. Under said law, “employers of
elements or indicators comprise the so-called “four-fold” test of employment those who are paid on task basis, and those who are paid a fixed amount for
relationship. performing a specific work, irrespective of the time consumed in the
Macasio’s relationship with David satisfies this test. A distinguishing performance thereof” are exempted.
characteristic of “pakyaw” or task basis engagement, as opposed to straight- Note that unlike the IRR of the Labor Code on holiday and SIL pay,
hour wage payment, is the non-consideration of the time spent in working. Section 3(e) of the Rules and Regulations Implementing PD 851 exempts
The payment of an employee on task or pakyaw basis alone is insufficient to employees “paid on task basis” without any reference to “field personnel.”
exclude one from the coverage of Service Incentive Leave (SIL) and holiday This could only mean that insofar as payment of the 13th month pay is
pay. concerned, the law did not intend to qualify the exemption from its coverage
In determining whether workers engaged on “pakyaw” or task basis is with the requirement that the task worker be a “field personnel” at the same
entitled to holiday and Service Incentive Leave (SIL) pay, the presence (or time.
absence) of employer supervision as regards the worker’s time and
performance is the key. C. HOURS OF WORK (Art. 83-90)
The Supreme Court agree with the CA that Macasio does not fall
under the definition of “field personnel.” The CA’s finding in this regard is Art. 83
supported by the established facts of this case: first, Macasio regularly 1. San Juan De Dios Hospital Employees Association v. NLRC
performed his duties at David’s principal place of business; second, his actual
hours of work could be determined with reasonable certainty; and third, Facts: The officers and members of San Juan De Dios Hospital Employees
David supervised his time and performance of duties. Association, herein petitioners, sent a letter requesting and pleading for the
Since Macasio cannot be considered a “field personnel,” then he is not expeditious implementation and payment by respondent San Juan De Dios
exempted from the grant of holiday, SIL pay even as he was engaged on Hospital of the “40 HOURS/5-DAY WORKWEEK with compensable weekly two
“pakyaw” or task basis. (2) days off” provided for by Republic Act (RA) 5901 (An Act prescribing 40

hours a week of labor for government and private hospitals or clinic Republic Act No. 5901 may support Policy Instructions No. 54 on which the
personnel) as clarified for enforcement by the Secretary of Labors Policy latter’s validity may be gauged. Article 83 of the Labor Code states: Normal
Instructions No. 54. Hours of Work. -- The normal hours of work of any employee shall not exceed
Respondent hospital, however, failed to give a favorable response; eight (8) hours a day.
thus, petitioners filed a complaint regarding their claims for statutory benefits “Health personnel in cities and municipalities with a population of at
under the above-cited law and policy issuance. least one million (1,000,000) or in hospitals and clinics with a bed capacity of
The Labor Arbiter dismissed the complaint. Petitioners appealed at least one hundred (100) shall hold regular office hours for eight (8) hours a
before public respondent National Labor Relations Commission (NLRC), which day, for five (5) days a week, exclusive of time for meals, except where the
affirmed the Labor Arbiters decision. Hence, the petitioners filed for petition exigencies of the service require that such personnel work for six (6) days or
for certiorari, ascribing grave abuse of discretion on the part of NLRC in forty-eight (48) hours, in which case they shall be entitled to an additional
concluding that Policy Instructions No. 54 proceeds from a wrong compensation of at least thirty per cent (30%) of their regular wage for work
interpretation of RA 5901 and Article 83 of the Labor Code. on the sixth day. For purposes of this Article, “health personnel” shall include:
resident physicians, nurses, nutritionists, dietitians, pharmacists, social
Issue: Whether Policy Instructions No. 54 issued by the Labor Secretary is workers, laboratory technicians, paramedical technicians, psychologists,
valid. midwives, attendants and all other hospital or clinic personnel.”
A cursory reading of Article 83 of the Labor Code betrays petitioners’
Held: The policy instruction is not valid. This issuance clarifies the position that “hospital employees” are entitled to “a full weekly salary with
enforcement policy of this Department on the working hours and paid two (2) days’ off if they have completed the 40-hour/5-day workweek”.
compensation of personnel employed by hospital/clinics with a bed capacity What Article 83 merely provides are: (1) the regular office hour of eight hours
of 100 or more and those located in cities and municipalities with a a day, five days per week for health personnel, and (2) where the exigencies
population of one million or more. of service require that health personnel work for six days or forty-eight hours
Reliance on Republic Act No. 5901, however, is misplaced for the said then such health personnel shall be entitled to an additional compensation of
statute, as correctly ruled by respondent NLRC, and has long been repealed at least thirty percent of their regular wage for work on the sixth day. There is
with the passage of the Labor Code on May 1, 1974. Article 302 of which nothing in the law that supports then Secretary of Labor’s assertion that
explicitly provide: “All labor laws not adopted as part of this Code either “personnel in subject hospitals and clinics are entitled to a full weekly wage
directly or by reference are hereby repealed. All provisions of existing laws, for seven (7) days if they have completed the 40-hour/5-day workweek in any
orders, decrees, rules and regulations inconsistent herewith are likewise given workweek”. Needless to say, the Secretary of Labor exceeded his
repealed.” Accordingly, only Article 83 of the Labor Code which appears to authority by including a two days off with pay in contravention of the clear
have substantially incorporated or reproduced the basic provisions of mandate of the statute. Administrative interpretation of the law is at best

merely advisory, and the Court will not hesitate to strike down an been adopted, not so much for the convenience of the employees, but
administrative interpretation that deviates from the provision of the statute. primarily for the benefit of Philnor. As embodied in Philnor’s memorandum,
they allowed their drivers to bring home their transport vehicles in order for
Art. 84 them to provide a timely transport service and to avoid delay – not really so
2. Rada v. NLRC that the drivers could enjoy the benefits of the company vehicles nor for
them to save on fare.
Facts: In 1977, Rada was contracted by Philnor Consultants and Planners, Inc Private respondent does not hesitate to admit that it is usually the
as a driver. He was assigned to a specific project in Manila. The contract he project driver who is tasked with picking up or dropping off his fellow
signed was for 2.3 years. His task was to drive employees to the project from employees. Proof thereof is the undisputed fact that when petitioner is
7am to 4pm. He was allowed to bring home the company vehicle in order to absent, another driver is supposed to replace him and drive the vehicle and
provide a timely transportation service to the other project workers. The likewise pick up and/or drop off the other employees at the designated points
project he was assigned to was not completed as scheduled hence, since he on EDSA. If driving these employees to and from the project site is not really
has a satisfactory record, he was re-contracted for an additional 10months. part of petitioner's job, then there would have been no need to find a
After 10 months the project was not yet completed. Several contracts replacement driver to fetch these employees. But since the assigned task of
thereafter were made until the project was finished in1985.At the completion fetching and delivering employees is indispensable and consequently
of the project, Rada was terminated as his employment was co-terminous mandatory, then the time required of and used by petitioner in going from his
with the project. He later sued Philnorfor for non-payment of separation pay residence to the field office and back, that is, from 5:30 a.m. to 7:00 a.m. and
and overtime pay. He said he is entitled to be paid overtime pay because he from 4:00 p.m. to around 6:00 p.m., which the labor arbiter rounded off as
uses extra time to get to the project site from his home and from the project averaging three hours each working day, should be paid as overtime work.
site to his home every day – in total, he spends an average of 3 hours Quintessentially, petitioner should be given overtime pay for the three excess
overtime everyday. hours of work performed during working days from January, 1983 to
December, 1985.
Issue: Whether or not Rada is entitled to overtime pay.
Art. 85
Held: Yes. Rada is entitled to overtime pay. The fact that he picks up 1. Sime Darby Pilipinas v. NLRC
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 Facts: All company factory workers of Sime Darby Pilipinas, Inc., manufacturer
field office going home to Marikina, Metro Manila is not merely incidental to of automotive tires, tubes and other rubber products, in Marikina including
Rada's job as a driver. On the contrary, said transportation arrangement had members of private respondent union, Sime Darby Salaried Employees

Association (ALU-TUCP), worked from 7:45 a.m. to 3:45 p.m. with a 30- work assignments, working methods, time, place and manner of work,
minute paid on-call lunch break. On August 14, 1992, the petitioner issued a processes to be followed, supervision of workers, working regulations,
memorandum to all factory-based employees advising all its monthly salaried transfer of employees, work supervision, lay off of workers and discipline,
employees in its Marikina Tire Plant a change in work schedule. The new dismissal and recall of workers. Management retains the prerogative,
schedule extends to 9 hours with two 10-minute paid coffee break and 1- whenever exigencies of the service so require, to change the working hours
hour unpaid and undisturbed lunch break. The Warehouse and Quality of its employees. So long as such prerogative is exercised in good faith for the
Assurance Department working on shifts, are excluded from this change in advancement of the employers interest and not for the purpose of defeating
work schedule. or circumventing the rights of the employees under special laws or under
Private respondent, which is an association of monthly salaried valid agreements.
employees of petitioner at its Marikina factory, filed on behalf of its members In this case, the new work schedule set by the employer fully complies
a complaint with the Labor Arbiter for unfair labor practice, discrimination with the daily work period of eight (8) hours without violating the Labor
and evasion of liability. Code. Although the old work schedule included a 30-minute paid lunch break,
The Labor Arbiter dismissed the complaint on the ground that the the employees were on call and could be called upon to do jobs during lunch
change in the work schedule and the elimination of the 30-minute paid lunch break. With the new schedule, they can take one-hour lunch break without
break of the factory workers constituted a valid exercise of management any interruption from their employer.
prerogative and that the new work schedule, break time and one-hour lunch Moreover, this act was not discriminatory as the new schedule applies
break did not have the effect of diminishing the benefits granted to factory to all employees in the factory similarly situated whether they are union
workers as the working time did not exceed eight (8) hours. members or not.
NLRC sustained the decision of Labor Arbiter but upon motion for
reconsideration by private respondent, the NLRC, having two new Art. 86
commissioners, reversed its earlier decision. 3. Mercury Drug Co. v. Dayao
Issue: Whether or not the act of management in revising the work schedule Facts: This is a verified petition dated March 17, 1964 which was
of its employees and eliminating their paid lunch break constitutes unfair subsequently amended on July 31, 1964 filed by Nardo Dayao and 70 others
labor practice? against Mercury Drug Co., Inc.,and/or Mariano Que, President & General
Manager, and Mercury Drug Co., Inc.
Held: The Court held that the employer has the right to exercise its Dayao, et al. had filed a petition against Mercury Drug, Co. praying: 1)
management prerogatives. Management is free to regulate, according to its payment of their unpaid back wages for work done on Sundays and legal
own discretion and judgment, all aspects of employment, including hiring, holidays plus 25c/c additional compensation from date of their employment

up to June 30, 1962; 2) payment of extra compensation on work done at Held: YES. The Court had declared that the contention of Mercury Drug, Co. is
night; 3) reinstatement of Januario Referente and Oscar Echalar to their without merit. While an employer may compel his employees to perform
former positions with back salaries; and, as against the respondent union, forservice on such days, the law nevertheless imposes upon him the obligation
its disestablishment and the refund of all monies it had collected from to pay his employees at least 25% additional of their basic or regular salaries.
petitioners. Under Section 4 of C. A. No. 444, no person, firm or corporation, business
The Court of Industrial Relations (CIR) had rendered its decision that:
establishment or place of center of labour shall compel an employee or
1. The claim of the petitioners for payment of back wages corresponding to laborer to work during Sundays and legal holidays unless he is paid an
the first four hours work rendered on every other Sunday and first four hours additional sum of at least twenty-five per centum of his regular
on legal holidays should be denied for lack of merit; 2. Respondent Mercury remuneration:Provided, However, That this prohibition shall not apply to
Drug Company, Inc. is hereby ordered to pay the sixty-nine (69) petitioners: public utilities performing some public service such as supplying gas,
(a) An additional sum equivalent to 25% of their respective basic or regular electricity, power, water, or providing means of transportation or
salaries for services rendered on Sundays and legal holidays during the periodcommunication.
from March 20, 1961 up to June 30, 1962; and (b) Another additional sum or Although a service enterprise, respondent company's employees are
premium equivalent to 25% of their respective basic or regular salaries for within the coverage of C. A. No. 444, as amended known as the Eight Hour
nighttime services rendered from March 20, 1961 up to June 30, 1962; and 3. Labor Law, for they do not fall within the category or class of employees or
Petitioners’ petition to convert them to monthly employees should be, as it islaborers excluded from its provisions.
hereby, denied for lack of merit. In not giving weight to the evidence of the petitioner company, the
Not satisfied with the decision, the respondents filed a motion for its
respondent court sustained the private respondents' evidence to the effect
reconsideration. The motion for reconsideration, was however, denied by the that their 25% additional compensation for work done on Sundays and Legal
Court en banc. With the decision of the CIR, Mercury Drug, Co. had filed the Holidays were not included in their respective monthly salaries. The private
petition contending Dayao, et al.'s' claims for 25% Sunday and Legal Holiday respondents presented evidence through the testimonies of Nardo, Dayao,
premiums are not supported by substantial evidence, thus infringing upon Ernesto Talampas, and Josias Federico who are themselves among the
the cardinal rights of the petitioner, and that assuming it is, such premiums employees who filed the case for unfair labor practice in the respondent
are already included in the salary of private respondents. court and are private respondents herein. The petitioner-company's
contention that the respondent court's conclusion on the issue of the 25%
Issue: Whether Dayao, et al. are entitled to the 25% Sunday and Legal Holiday additional compensation for work done on Sundays and legal holidays during
premiums. the first four hours that the private respondents had to work under their
respective contracts of employment was not supported by substantial
evidence is, therefore, unfounded.

Furthermore, the Mercury Drug Co., Inc., maintains a chain of The petitioner contends that the fact that the monthly salary of the
drugstores that are open every day of the week and, for some stores, up to petitioner is higher than the minimum wage provided by law is already
very late at night because of the nature of the pharmaceutical retail business. compensatory of the excess of 4 hours of work rendered by the said
The respondents knew that they had to work Sundays and holidays and at employee. It argues that the salary of the petitioner already includes the
night, not as exceptions to the rule but as part of the regular course of payment for the excess of 4 hours of work rendered by the respondent. It
employment. Presented with contracts setting their compensation on an also contends that since there is a meeting of the minds between the
annual basis with an express waiver of extra compensation for work on respondent and the petitioner, there is already a perfected contract which
Sundays and holidays, the workers did not have much choice. means that the parties are bound by their agreements.
The private respondents were at a disadvantage insofar as the
contractual relationship was concerned. Workers in our country do not have Issue: Whether or not the respondent is entitled to an overtime pay.
the luxury or freedom of declining job openings or filing resignations even
when some terms and conditions of employment are not only onerous and Held: The Supreme Court ruled that the respondent is entitled to an overtime
inequitous but illegal. pay. The contention of the petitioner that since the respondent’s monthly
It is precisely because of this situation that the framers of the salary is higher than the minimum wage, it is already commensurate of the 4
Constitution embodied the provisions on social justice (Section 6, Article II) hours excess of work rendered by the respondent. The Supreme Court held
and protection to labor (Section 9, Article II) in the Declaration of Principles that the fact that one’s salary is higher than the minimum wage does not in
and State Policies. any way offset the other benefits that are due to the employees, in the
absence of an agreement to the contrary. To consider the overtime pay of the
respondent included in his monthly salary would be in contravention of the
Art. 87 rule against non-diminution of benefits and a violation of the Labor Code
4. PAL Employees Savings and Loan Association, Inc. (PESALA) v. NLRC since it prescribes a certain manner on how overtime pay is included.
Moreover, the Supreme Court found that contrary to what the petitioner
Facts: The respondent used to be a security guard under the employ of the aver, as shown in the computation of the petitioner itself, the monthly salary
petitioner company. He works for 12 hours a day and is receiving a monthly of the respondent is only a basic salary which is exclusive of all the other
salary. He was then dismissed by the petitioner company. Because of this, the benefits that the respondent is to receive.
respondent filed a complaint with the Labor Arbiter for the payment of his With regard to the petitioner’s second contention that there is already
overtime pay. The Labor Arbiter ruled that the respondent is entitled to an a perfected contract, hence the terms and conditions imposed therein binds
overtime pay. The NLRC affirmed the decision of the Labor Arbiter. Hence, the the parties to the contract, the Supreme Court held that while such
current petition. contention has the weight and force of law, it is still subject to certain

exception. The general right to contract is subject to a limitation that such his concentration on other aspects of his job. Cityland found said excuse
terms and conditions must not be contrary to law, public order, public policy, inadequate and, on November 9, 1992, suspended him for three days, with a
morals and good customs. Employment contracts are imbued with public similar warning.
interest and are therefore subject to the police power of the state. The Notwithstanding the aforesaid suspension and warning, petitioner
subject contract in the case at bar is contrary to labor laws. Therefore, not again failed to submit cold call reports for February 5, 6, 8, 10 and 12, 1993.
binding to the parties of the case. He was verbally reminded to submit the same and was even given up to
February 17, 1993 to do so. Instead of complying with said directive,
Art. 88 petitioner, on February 16, 1993, wrote a note, "TO HELL WITH COLD CALLS!
5. Lagatic v. NLRC WHO CARES?" and exhibited the same to his co-employees. To worsen
matters, he left the same lying on his desk where everyone could see it.
Facts: Petitioner Romeo Lagatic was employed in May 1986 by Cityland, first On February 23, 1993, petitioner received a memorandum requiring
as a probationary sales agent, and later on as a marketing specialist. He was him to explain why Cityland should not make good its previous warning for
tasked with soliciting sales for the company, with the corresponding duties of his failure to submit cold call reports, as well as for issuing the written
accepting call-ins, referrals, and making client calls and cold calls. Cold calls statement aforementioned. On February 24, 1993, he sent a letter-reply
refer to the practice of prospecting for clients through the telephone alleging that his failure to submit cold call reports should trot be deemed as
directory. Cityland, believing that the same is an effective and cost-efficient gross insubordination. He denied any knowledge of the damaging statement,
method of finding clients, requires all its marketing specialists to make cold "TO HELL WITH COLD CALLS!"
calls. The number of cold calls depends on the sales generated by each: more Finding petitioner guilty of gross insubordination, Cityland served a
sales mean less cold calls. Likewise, in order to assess cold calls made by the notice of dismissal upon him on February 26, 1993. Aggrieved by such
sales staff, as well as to determine the results thereof, Cityland requires the dismissal, petitioner filed a complaint against Cityland for illegal dismissal,
submission of daily progress reports on the same. illegal deduction, underpayment, overtime and rest day pay, damages and
On October 22, 1991, Cityland issued a written reprimand to attorney's fees. The labor arbiter dismissed the petition for lack of merit. On
petitioner for his failure to submit cold call reports for September 10, October appeal, the same was affirmed by the NLRC; hence the present recourse.
1 and 10, 1991. This notwithstanding, petitioner again failed to submit cold
call reports for September 2, 5, 8, 10, 11, 12, 15, 17, 18, 19, 20, 22, and 28, as Issue: W/N NLRC gravely abused its discretion in not finding that petitioner
well as for October 6, 8, 9, 10, 12, 13 and 14, 1992. Petitioner was required to was illegally dismissed?
explain his inaction, with a warning that further non-compliance would result Whether or not he was entitled to separation pay, premium pay, and
in his termination from the company. In a reply dated October 18, 1992, overtime pay
petitioner claimed that the same was an honest omission brought about by

Held: The petition lacks merit. To constitute a valid dismissal from for HR, many times whether they were amenable to make a new CBA. Salazar
employment, two requisites must be met, namely: (1) the employee must be declared that the company could not make a decision at the moment.
afforded due process, and (2) the dismissal must be for a valid cause. The very next day after that declaration, workers having a 2 straight
Employers may, thus, make reasonable rules and regulations for the 12-hour shifts, decided that after working 8 hours per shift company
government of their employees, and when employees, with knowledge of an conducted an overtime boycott.
established rule, enter the service, the rule becomes a part of the contract of Upon inquiry by Salazar for the boycott, he was told to ask the union
employment. It is also generally recognized that company policies and officers. At a meeting, Gonzales, a union director, told Salazar that the
regulations, unless shown to be grossly oppressive or contrary to law, are employees would only return to their normal work schedule if the company
generally valid and binding on the parties and must be complied with. would agree to their demands as to the effectivity and duration of the new
Corollary, an employee may be validly dismissed for violation of a reasonable CBA. Salazar declared that such agreement could only be conducted through
company rule or regulation adopted for the conduct of the company formal negotiations. Dissatisfied, workers proceeded with the strike.
business. An employer cannot rationally be expected to retain the The employees also engaged in a work slowdown campaign – which
employment of a person whose . . . lack of regard for his employer's rules . . . delayed the production of the company. Then, the company submitted its
has so plainly and completely been bared." 5 Petitioner's continued infraction CBA proposal, and the union its counter-proposal.
of company policy requiring cold call reports, as evidenced by the 28 The company filed with the NLRC a petition to declare illegal
instances of non-submission of aforesaid reports, justifies his dismissal. petitioner union’s overtime boycott and work slowdown, which the company
With the finding that petitioner's dismissal was for a just and valid claimed to amount to illegal strike.
cause, his claims for moral and exemplary damages, as well as attorney's fees, At mediation in the National Conciliation and Mediation Board, the
must fail. Resolution is AFFIRMED and this petition is hereby DISMISSED for parties failed to arrive to an agreement.
lack of merit. Costs against petitioner. The union filed with the NCMB a Notice of Strike citing unfair labor
practice – they did eventually stage a strike.
Art. 89 The Sec. of Labor assumed jurisdiction and the company was ordered
6. Interphil Laboratories Employees Union v. Interphil Laboratories to accept the striking workers, while the union was directed to comply with
the return-to-work orders.
Facts: Interphil Lab Employees Union is the sole and exclusive bargaining Eventually, in the hearing in the LA, which was recommended to the
agent of the rank-and-file employees of Interphil Lab (company engaged in Sec. of Labor, resulted in an Order stating: (1) The OT Boycott and Work
manufacturing and packaging pharmaceutical products). They had a CBA from Slowdown were declared as illegal strike; (2) Declared the union officers to
1990-1993. Nearing the expiry, the officers of the union asked Salazar, the VP have lost their employment; and (3) Found the company guilty of unfair labor

practice for violating the then existing CBA. MR denied, CA dismissed appeal differentials, or the employer in custody of pertinent documents which would
of the union. prove the fact of payment of the same? (2) Were the requirements of due
Union is contending that the CBA stated working hours to be 8 hours, process substantially complied with in dismissing the worker?
and that the regular working hours is 7:30am-4:30pm. But there is a however
clause which allows the company to change the prevailing work time at its Facts: NSC a foreign corporation licensed to do business in the Phil.
discretion. manufactures and assembles electronic parts for export in mactan, lapu-lapu
Issue: Whether or not the working hours contained in the CBA should be the city. Santos was employed by NSC as a technicioan in its special products
controlling evidence of the work hours. group assigned to the graveyard shift from 10pm-6am.
On January 8, 1993 Santos did not report for work on his shift. He
Held: No, petition denied. In resolving the case, the Supreme Court held that resumed his duties as night shift on January 9. However, at the end of his
it is evident that the working hours may be changed, at the discretion of the shift, he made 2 entries in his DTR to make it appear that he worked on both
company, should such change be necessary for its operations, and that the the 8th and 9th.
employees shall observe such rules as have been laid down by the company. His supervisor Limisiaco, received the report that there was no
In the case at bar, the LA found that the company had to adopt a technician in the graveyard shift on January 8. Limsiaco then checked the
continuous 24-hour work daily schedule by reason of the nature of its DTRs and found out that Santos did not report on 8th and have found in the
business and the demands of the clients. It was established that the DTR the otherwise.
employees adhered to the said work schedule since 1988. The employees are Informal investigation were conducted by management and have
deemed to have waived the 8-hour schedule since they followed, without any required Santos to explain in writing why no disciplinary action should be
question or complaint, the 2-shift schedule while their CBA was still in force taken against him for dishonesty, falsifying DTR and violation of company
and even prior thereto. The 2-shift schedule effectively changed the working rules. Santos explain that he was sick on the 8th and his DTR was a mere
hours stipulated in the CBA. As the employees assented by practice to this oversight or carelessness on his part.
arrangement, they cannot now be heard to claim that the OT boycott is Not satisfied with the explanation, NSC dismissed Santos for the
justified because they were not obliged to work beyond the 8 hours. violations made. Santos then filed a complaint for illegal dismissal and non-
payment of wages and other money claims.
Evidence Labor arbiter found that Santos was dismissed on legal grounds
7. National Semiconductors Distribution Ltd. v. NLRC although he was not afforded due process, ordering NSC to indemnify him
and the unpaid night shift differentials.
Principles: (1) Who has the burden of providing a claim for night shift NSC appealed to NLRC, but NLRC affirmed the labor arbiter holding
differential pay, the worker who claims not to have been paid night shift that the conclusions were sufficiently supported by the evidence.

NSC now imputes grave abuse of discretion to NLRC in affirming the legal certainty that the obligation has been discharged by payment. For sure,
labor arbiter. Contending that the night shift differentials were never raised as private respondent cannot adequately prove the fact of non-payment of night
an issue nor pusued by Santos; also denied that Santos was not given due shift differentials since the pertinent employee files, payrolls, records,
process because he was afforded ample opportunity to be heard. remittances and other similar documents — which will show that private
respondent rendered night shift work; the time he rendered services; and,
Issue: (1) Was Santos illegally dismissed? (2) Santos entitled for the money the amounts owed as night shift differentials — are not in his possession but
claims? in the custody and absolute control of petitioner.
On the issue of due process, we agree with petitioner that Santos was
Held: The fact that Santos neglected to substantiate his claim for night shift accorded full opportunity to be heard before he was dismissed.
differentials is not prejudicial to his cause. After all, the burden of proving The essence of due process is simply an opportunity to be heard, or as
payment rests on petitioner NSC. Santos' allegation of non-payment of this applied to administrative proceedings, an opportunity to explain one's side.
benefit, to which he is by law entitled, is a negative allegation which need not In the instant case, petitioner furnished private respondent notice as to the
be supported by evidence unless it is an essential part of his cause of action. particular acts which constituted the ground for his dismissal. By requiring
It must be noted that his main cause of action is his illegal dismissal, and the him to submit a written explanation within 48 hours from receipt of the
claim for night shift differential is but an incident of the protest against such notice, the company gave him the opportunity to be heard in his defense.
dismissal. Thus, the burden of proving that payment of such benefit has been Private respondent availed of this chance by submitting a written explanation.
made rests upon the party who will suffer if no evidence at all is presented by Furthermore, investigations on the incident were actually conducted.
either party. Finally, private respondent was notified on 14 January 1993 of the
By choosing not to fully and completely disclose information to prove management's decision to terminate his services. Thus, it is clear the
that it had paid all the night shift differentials due to private respondent, minimum requirements of due process have been fulfilled by petitioner.
petitioner failed to discharge the burden of proof. Its failure gives rise to the Petition Dismissed.
presumption that either it does not have them or if it does, their presentation
is prejudicial to its cause. We rule therefore that complainant should be D. REST PERIODS AND HOLIDAYS (Art. 91-94)
awarded a night shift differential but limited to there (3) years considering the
prescriptive period of money claims. 1. Jose Rizal College v. NLRC
As a general rule, one who pleads payment has the burden of proving
it. Even where the plaintiff must allege non-payment, the general rule is that Facts: Petitioner has 3 groups of employees categorized as follows: (a)
the burden rests on the defendant to prove payment, rather than on the personnel on monthly basis, who receive their monthly salary uniformly
plaintiff to prove non-payment. The debtor has the burden of showing with throughout the year, irrespective of the actual number of working days in a

month without deduction for holidays; (b) personnel on daily basis who are semester will not affect the faculty's salary because this day is not included in
paid on actual days worked and they receive unworked holiday pay; and (c) their schedule while the calendar is extended to compensate for special
collegiate faculty who are paid on the basis of student contract hour. holidays. Hence the programmed number of lecture hours is not diminished.
Unable to receive their corresponding holiday pay, as claimed, from Soliciter General's arguments: 1. Under Art. 94 of the LC (as
1975 to 1977, respondent NATOW, in behalf of the faculty and personnel of amended), holiday pay applies to all employees except those in retail and
Jose Rizal College filed with the Ministry of Labor a complaint against the service establishments. To deprive therefore employees paid at an hourly rate
college for said alleged non-payment of holiday pay. The case was certified for of unworked holiday pay is contrary to the policy considerations underlying
compulsory arbitration due to the failure of the parties to settle. such presidential enactment, and its precursor, the Blue Sunday Law (RA 946)
LA rendered a decision, declaring that: 1. The faculty and personnel of apart from the constitutional mandate to grant greater rights to labor
Jose Rizal College who are paid their salary by the month uniformly in a (CONST, Art. II, Sec. 9); 2. NLRC ruled that the purpose of a holiday pay is to
school year, irrespective of the number of working days in a month, without prevent diminution of the monthly income of the workers on account of work
deduction for holidays, are presumed to be already paid the 10 paid legal interruptions. It is no excuse therefore that the school calendar is extended
holidays and are no longer entitled to separate payment for the said regular whenever holidays occur, because such happens only in case of special
holidays; 2. The personnel of Jose Rizal College who are paid their wages daily holidays.
are entitled to be paid the 10 unworked regular holidays according to the
pertinent provisions of the Rules and Regulations Implementing the Labor Issue: Whether or not the school faculty who, according to their contracts are
Code; and 3. Collegiate faculty of the Jose Rizal College who by contract are paid per lecture hour are entitled to unworked holiday pay
paid compensation per student contract hour are not entitled to unworked
regular holiday pay considering that these regular holidays have been Held: No. The provisions in the Labor Code as to holiday pay do not apply in
excluded in the programming of the student contact hours. this case.
NLRC modified LA decision and declared that teaching personnel paid Subject holiday pay is provided for in the Labor Code (Presidential
by the hour are entitled to holiday pay. Hence, this petition. Decree No. 442, as amended), which reads: Art. 94. Right to holiday pay — (a)
Petitioner's arguments: 1. It is not covered by Book V of the LC as it is Every worker shall be paid his regular daily wage during regular holidays,
a non-profit institution; 2. Its hourly paid faculty members are paid on a except in retail and service establishments regularly employing less than ten
contract basis because they are required to hold classes for a particular (10) workers; (b) The employer may require an employee to work on any
number of hours. In the programming of these student contract hours, legal holiday but such employee shall be paid a compensation equivalent to twice
holidays are excluded and labeled in the schedule as "no class day", but if a his regular rate; … “
regular week day is declared a holiday, the school calendar is extended to and in the Implementing Rules and Regulations, Rule IV, Book III,
compensate for that day. Thus, the advent of any legal holidays within the which reads: SEC. 8. Holiday pay of certain employees. — (a) Private school

teachers, including faculty members of colleges and universities, may not be regular hourly rate on days declared as special holidays or for some reason
paid for the regular holidays during semestral vacations. They shall, however, classes are called off or shortened for the hours they are supposed to have
be paid for the regular holidays during Christmas vacations. … taught, whether extensions of class days be ordered or not; in case of
The aforementioned implementing rule is not justified by the extensions said faculty members shall likewise be paid their hourly rates
provisions of the law which after all is silent with respect to faculty members should they teach during said extensions.
paid by the hour. Regular holidays specified as such by law are known to both
school and faculty members as no class days;” certainly the latter do not 2. San Miguel Corp. v. CA
expect payment for said unworked days, and this was clearly in their minds
when they entered into the teaching contracts. Facts: On 17 October 1992, the Department of Labor and Employment
On the other hand, both the law and the Implementing Rules conducted a routine inspection in the premises of San Miguel Corporation in
governing holiday pay are silent as to payment on Special Public Holidays. Sta. Filomena, Iligan City. In the course of the inspection, it was discovered
It is readily apparent that the declared purpose of the holiday pay that there was underpayment by SMC of regular Muslim holiday pay to its
which is the prevention of diminution of the monthly income of the employees. DOLE sent a copy of the inspection result to SMC and it was
employees on account of work interruptions is defeated when a regular class received by and explained to its personnel officer Elena dela Puerta.
day is canceled on account of a special public holiday and class hours are held SMC contested the findings and DOLE conducted summary hearings
on another working day to make up for time lost in the school calendar. on 19 November 1992, 28 May 1993 and 4 and 5 October 1993. Still, SMC
Otherwise stated, the faculty member, although forced to take a rest, does failed to submit proof that it was paying regular Muslim holiday pay to its
not earn what he should earn on that day. Be it noted that when a special employees. Hence, Director IV of DOLE Iligan District Office issued a
public holiday is declared, the faculty member paid by the hour is deprived of compliance order directing SMC to consider Muslim holidays as regular
expected income, and it does not matter that the school calendar is extended holidays and to pay both its Muslim and non-Muslim employees holiday pay
in view of the days or hours lost, for their income that could be earned from within thirty (30) days from the receipt of the order. SMC appealed but it was
other sources is lost during the extended days. Similarly, when classes are dismissed.
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 Issue: Whether or not the Muslim holiday pay is applicable to employees
ordered. regardless of faith or religion
SC Decision: (a) exempting petitioner from paying hourly paid faculty
members their pay for regular holidays, whether the same be during the Held: Yes. Although Article 3 of Presidential Decree 1083 (Code of Muslim
regular semesters of the school year or during semestral, Christmas, or Holy Personal Laws) provides that the provisions of the code shall be applicable
Week vacations; (b) but ordering petitioner to pay said faculty members their only to Muslims, on which the petitioner based its defense, the same article

provides further that nothing in the code shall be construed to the prejudice working within the Muslim areas may not report for work on the days
of non-Muslims. The Supreme Court stated that there should be no designated by law as Muslim holidays.]
distinction between Muslims and non-Muslims as regards the payment of
benefits for Muslim Holidays. The Court, quoting the Court of Appeals, 3. Wellington Investment and Manufacturing Corporation v. Trajano
“assuming that the SMC is correct, then Muslims throughout the Philippines
are also not entitled to holiday pays on Christian holidays declared by law. We Facts: On 6 August 1991, a routine inspection was conducted by a Labor
must remind (SMC) that wages and other emoluments granted by law are Enforcement Office on Wellington Flour Mills, an establishment owned &
determined not on the basis of the worker’s faith or religion”, finds against operated by Petitioner Wellington Investment and Manufacturing
the petitioner, and dismissed the petition. Corporation. His report, with a copy “explained to and received by”
[Muslim holidays are provided under Articles 169 and 170, Title I, Wellington’s personnel manager, set forth the finding of “non-payment of
Book V, of Presidential Decree No. 1083, otherwise known as the Code of regular holidays falling on a Sunday for monthly-paid employees.” Petitioner
Muslim Personal Laws. sought reconsideration, arguing that their monthly-salaries already includes
The foregoing provisions should be read in conjunction with Article 94 holiday pay for all regular holidays, hence there is no legal basis for LEO’s
of the Labor Code, which provides: Right to holiday pay. (a) Every worker shall finding. It pays its employees a fixed monthly compensation using the “314”
be paid his regular daily wage during regular holidays, except in retail and factor, which undeniably covers and already includes payment for all the
service establishments regularly employing less than ten (10) workers; (b) The working days in a month as well as the 10 unworked regular holidays within a
employer may require an employee to work on any holiday but such year.
employee shall be paid a compensation equivalent to twice his regular rate; The Regional Director ruled that “when a regular holiday falls on a
However, there should be no distinction between Muslims and non- Sunday, an extra or additional working day is created and the employer has
Muslims as regards payment of benefits for Muslim holidays. The Court the obligation to pay the employees for the extra day except the last Sunday
reminds the respondent-appellant that wages and other emoluments granted of August since the payment for the said holiday is already included in the
by law to the working man are determined on the basis of the criteria laid 314 factor,” and accordingly directed Wellington to pay its employees
down by laws and certainly not on the basis of the worker's faith or religion. compensation corresponding to four (4) extra working days.
At any rate, Article 3(3) of Presidential Decree No. 1083 also declares Petitioner filed a motion for reconsideration, pointing out that it was
that ". . . nothing herein shall be construed to operate to the prejudice of a in effect being compelled to “shell out an additional pay for an alleged extra
non-Muslim." In addition, the 1999 Handbook on Workers' Statutory Benefits working day” despite its complete payment of all compensation lawfully due
states considering that all private corporations, offices, agencies, and entities its workers, using the 314 factor. This was taken as an appeal, and acted on by
or establishments operating within the designated Muslim provinces and Respondent Undersecretary Trajano. The latter held that the “divisor being
cities are required to observe Muslim holidays, both Muslim and Christians used by Petitioner does not reliably reflect the actual working days in a year,”

and demanded Wellington to pay the six additional working days resulting given to his work force. He would have to ascertain the number of times legal
from regular holidays falling on Sundays in 1988, 1989 and 1990. Petitioner’s holidays would fall on Sundays in all the years of the expected or extrapolated
reconsideration was denied. lifetime of his business. Alternatively, he would be compelled to make
Petitioner instituted this special civil action of certiorari to nullify the adjustments in his employees' monthly salaries every year, depending on the
above orders. SC granted TRO enjoining Respondent from enforcing the number of times that a legal holiday fell on a Sunday. To agree with DOLE’s
above orders. theory would increase the number of days in a year, instead of 365 days, as
[Petitioner’s Arguments: 1. Monthly salary of the monthly-paid basis for computation of salary for monthly-paid employees.
employees already includes holiday pay for all the regular holidays.; 2. To pay There is no provision of law requiring employers to make adjustments
for the extra days (regular holidays on a Sunday), as compelled by the Order in the monthly salary rate set by them to take account of the legal holiday
of the DOLE, it is in effect being compelled to pay for alleged extra working falling on Sundays or to reckon a year at more than 365 days. What the law
days. requires of employers opting to pay by the month is to assure that "the
DOLE’s Contentions: 1. Regular holidays falling on Sundays have monthly minimum wage shall not be less than the statutory minimum wage
precluded the enjoyment by the employees of a non-working day and the multiplied by 365 days divided by twelve," and to pay that salary "for all days
employees consequently have to work for additional days.; 2. When a regular in the month whether worked or not," and "irrespective of the number of
holiday falls on a Sunday, an extra or additional working day is created and working days therein."
the employer has the obligation to pay its employees for the extra day.]
Divisor
Issue: W/N a monthly-paid employee, receiving a fixed monthly 4. Odango v. NLRC
compensation, is entitled to an additional pay aside from his usual holiday
pay, whenever a regular holiday falls on a Sunday Facts: Petitioners are monthly-paid employees of ANTECO whose workdays
are from Monday to Friday and half of Saturday. After a routine inspection,
Held: No. The monthly salary in Wellington — which is based on the so- the Regional Branch of the Department of Labor and Employment found
called "314 factor" — accounts for all 365 days of a year; i.e., Wellington's ANTECO liable for underpayment of the monthly salaries of its employees. On
"314 factor" leaves no day unaccounted for; it is paying for all the days of a September 1989, the DOLE directed ANTECO to pay its employees wage
year with the exception only of 51 Sundays. differentials amounting to P1,427,412.75. ANTECO failed to pay. On various
The respondents' theory would make each of the years in question dates in 1995, thirty-three (33) monthly-paid employees filed complaints with
(1988, 1989, 1990), a year of 368 days. Pursuant to this theory, no employer the NLRC praying for payment of wage differentials, damages and attorney’s
opting to pay his employees by the month would have any definite basis to fees.
determine the number of days in a year for which compensation should be

On November 1996, the Labor Arbiter rendered a Decision in favor of The use of a divisor less than 365 days cannot make ANTECO
petitioners granting them wage differentials amounting to P1,017,507.73 and automatically liable for underpayment. The facts show that petitioners are
attorney’s fees of 10%. ANTECO appealed the Decision to the NLRC where it required to work only from Monday to Friday and half of Saturday. Thus, the
reversed the Labor Arbiter’s Decision. The NLRC denied petitioners’ motion minimum allowable divisor is 287, which is the result of 365 days, less 52
for reconsideration. Petitioners then elevated the case to CA where it Sundays and less 26 Saturdays (or 52 half Saturdays). Any divisor below 287
dismissed the petition for failure to comply with Section 3, Rule 46 of the days means that ANTECO’s workers are deprived of their holiday pay for some
Rules of Court. The Court of Appeals explained that petitioners failed to or all of the ten legal holidays. The 304 days divisor used by ANTECO is clearly
allege the specific instances where the NLRC abused its discretion. The above the minimum of 287 days.
appellate court denied petitioners’ motion for reconsideration. Hence, this
petition. E. SERVICE INCENTIVE LEAVE (Art. 95)
Issue: Whether or not the petitioners are entitled to money claims. 1. Auto Bus Transport System v. Bautista
Held: NO. The Court ruled that the petitioners are not entitled to money Facts: Respondent Antonio Bautista was employed with petitioner Auto Bus
claims or wage differentials. Transport System, Inc. since May 24, 1995 as a driver-conductor of the latter’s
The petitioners claim is based on Section 2, Rule IV, Book III of the bus. Bautista was paid on commission basis per travel on a twice a month
Implementing Rules and Policy Instructions No. 9 issued by the Secretary of basis. On January 3, 2000, the bus driven by Bautista accidentally bumped
Labor which was declared null and void in Insular Bank of Acia v. Inciong since another bus owned by the respondent.
in the guise of clarifying the Labor Code’s provisions on holiday pay, they in As a result, Auto Bus did not allow Bautista to work until he paid the
effect amended them by enlarging the scope of their exclusion. cost of the repair of the damaged bus. Bautista failed to pay and after given
Even assuming that Section 2, Rule IV of Book III is valid, their claim the opportunity to explain his side, Auto Bus sent him a letter for termination.
will still fail. The basic rule in this jurisdiction is "no work, no pay." The right to Bautista then instituted a Complaint for Illegal Dismissal with Money Claims
be paid for un-worked days is generally limited to the ten legal holidays in a for nonpayment of 13th month pay and service incentive leave pay (SILP)
year. Petitioners’ claim is based on a mistaken notion that Section 2, Rule IV against Auto Bus.
of Book III gave rise to a right to be paid for un-worked days beyond the ten Labor Arbiter Tabingan decided on the case in favor of Auto Bus,
legal holidays. Petitioners’ line of reasoning is not only a violation of the "no dismissing the Complaint of Bautista. However, the LA ordered Auto Bus to
work, no pay" principle, it also gives rise to an invidious classification, a pay Bautista his 13th month pay from the date of his hiring to the date of his
violation of the equal protection clause. dismissal and his SILP for all the years he has been in service for the former.

Auto Bus appealed the decision to the NLRC wherein the latter of work in the field can be determined with reasonable certainty by the
affirmed with modification LA’s decision. It held that Bautista, being an employer.
employee paid on commission basis, was not entitled for 13th month pay in In the case of Bautista, it was observed in the facts found by the LA
accordance with Section 3 of the Rules and Regulations Implementing PD No. that he must be at a specific place in a specified time to be able to observe
851, leaving Bautista with a claim for his SILP. prompt departure and arrival from his point of origin to his point of
Auto Bus filed a motion for reconsideration on the ground that destination. In each and every depot, there is always a dispatcher whose
Bautista was also not entitled for it. It averred that Bautista, being a “field function is to see to it that Bautista’s bus and its crew leave the premises at
personnel”, was an exception to the rule that employees are entitled to SILP. specific time and arrive at the estimated proper time. Therefore, Bautista was
As a legal basis, it cited Section 1(d), Rule V, Book 3 of the under constant supervision while in the performance of his work. In
Implementing Rules and Regulations of the Labor Code which delimits the conclusion, he was not a field personnel but a regular employee who
grant of the SIL, excluding among others “field personnel and other performs tasks usually necessary and desirable to the usual trade of Auto Bus.
employees whose performance is unsupervised by the employer including 2. The Court ruled in affirmative. Being a regular employee, he has the
those who are engaged on task or contract basis, purely commission basis, or right to claim service incentive leave pay under Article 95 of the Labor Code,
those who are paid in a fixed amount for performing work irrespective of the which provides that every employee who has rendered at least one year of
time consumed in the performance thereof”. Auto Bus’ motion was denied service shall be entitled to a yearly service incentive leave of five days with
and so it elevated the case to the CA which affirmed NLRC’s decision. pay.
Issue: 1. Whether or not Bautista is a field personnel.

2. Whether or not Bautista is entitled for service incentive leave pay. F. EMPLOYEES PAID BY RESULTS (Art. 101)
Held: 1. The Court ruled in negative. According to Article 82 of the Labor 1. Serrano v. Severino Santos Transit
Code, “field personnel” shall refer to non-agricultural employees who
regularly perform their duties away from the principal place of business or Facts: After 14 years of service or on July 14, 2006, petitioner applied for
branch office of the employer and whose actual hours of work in the field optional retirement from the company whose representative advised him
cannot be determined with reasonable certainty. The term “field personnel” that he must first sign the already prepared Quitclaim before his retirement
is not merely concerned with the location where the employee regularly pay could be released. As petitioner’s request to first go over the
performs his duties but also with the fact that the employee’s performance is computation of his retirement pay was denied, he signed the Quitclaim on
unsupervised by the employer. Thus, in order to conclude whether an which he wrote “U.P.” (under protest) after his signature, indicating his
employee is a field employee, it is also necessary to ascertain if actual hours

protest to the amount of P75,277.45 which he received, computed by the for every year of service, a fraction of at least six (6) months being considered
company at 15 days per year of service. as one whole year.
Petitioner soon after filed a complaint, alleging that the company Unless the parties provide for broader inclusions, the term one-half
erred in its computation since under Republic Act No. 7641, otherwise known (1/2) month salary shall mean fifteen (15) days plus one-twelfth (1/12) of the
as the Retirement Pay Law, his retirement pay should have been computed at 13th month pay and the cash equivalent of not more than five (5) days of
22.5 days per year of service to include the cash equivalent of the 5-day service incentive leaves.
service incentive leave (SIL) and 1/12 of the 13th month pay which the Admittedly, petitioner worked for 14 years for the bus company which
company did not. did not adopt any retirement scheme. Even if petitioner as bus conductor was
The company maintained, however, that the Quitclaim signed by paid on commission basis then, he falls within the coverage of R.A. 7641 and
petitioner barred his claim and, in any event, its computation was correct its implementing rules. As thus correctly ruled by the Labor Arbiter,
since petitioner was not entitled to the 5-day SIL and pro-rated 13th month petitioner’s retirement pay should include the cash equivalent of the 5-day
pay for, as a bus conductor, he was paid on commission basis. SIL and 1/12 of the 13th month pay.
Issue: WON 22.5 days retirement pay per year of service is the correct 2. David v. Macasio
formula.
Facts: In January 2009, Macasio filed before the LA a complaint against
Held: Republic Act No. 7641 which was enacted on December 9, 1992 petitioner Ariel L. David, doing business under the name and style “Yiels Hog
amended Article 287 of the Labor Code by providing for retirement pay to Dealer,” for non-payment of overtime pay, holiday pay and 13th month pay.
qualified private sector employees in the absence of any retirement plan in He also claimed payment for moral and exemplary damages and attorney’s
the establishment. The pertinent provision of said law reads: Section 1. fees. Macasio also claimed payment for service incentive leave (SIL) David
Article 287 of Presidential Decree No. 442, as amended, otherwise known as claimed that he started his hog dealer business in 2005 and that he only has
the Labor Code of the Philippines, is hereby amended to read as follows: ten employees. The LA concluded that as Macasio was engaged on “pakyaw”
In the absence of a retirement plan or agreement providing for or task basis, he is not entitled to overtime, holiday, SIL and 13th month pay.
retirement benefits of employees in the establishment, an employee upon The NLRC a rmed the LA decision, thus this case reached the CA which says
reaching the age of sixty (60) years or more, but not beyond sixty-five (65) that Macasio is entitled to his monetary claims following the doctrine laid
years which is hereby declared the compulsory retirement age, who has down in Serrano v. Severino Santos Transit. The CA explained that as a task
served at least five (5) years in the said establishment, may retire and shall be basis employee, Macasio is excluded from the coverage of holiday, SIL and
entitled to retirement pay equivalent to at least one-half (1/2) month salary 13th month pay only if he is likewise a field personnel.”Thus this case reached
the SC.

Note that unlike the IRR of the Labor Code on holiday and SIL pay, Section
Issue: Whether or not Macasio is entitled of overtime pay, holiday pay, 13th 3(e) of the Rules and Regulations Implementing PD No. 851exempts
month pay and payment for service incentive leave. 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
Held: Yes, in so far as the Holiday and SIL pay is concerned. To determine concerned, the law did not intend to qualify the exemption from its coverage
whether workers engaged on “pakyaw” or task basis” is entitled to holiday with the requirement that the task worker be a " field personnel" at the same
and SIL pay, the presence (or absence) of employer supervision as regards the time. Thus Macasio is not entitled to 13th month pay.
worker’s time and performance is the key: if the worker is simply engaged on Wherefore, the petition was partially granted the petition insofar as
pakyaw or task basis, then the general rule is that he is entitled to a holiday the payment of 13th month pay to respondent is concerned. But all other
pay and SIL pay unless exempted from the exceptions specifically provided aspect of the CA’s decision was affirmed.
under Article 94 (holiday pay) and Article 95 (SIL pay) of the Labor Code.
However, if the worker engaged on pakyaw or task basis also falls within the
meaning of “field personnel” under the law, then he is not entitled to these
monetary benefits. CA that Macasio does not fall under the definition of “
field personnel.” The CA’s finding in this regard is supported by the
established facts of this case: first, Macasio regularly performed his duties at
David’s 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.
However, the governing law on 13th month pay is PD No. 851. As with
holiday and SIL pay, 13th month pay benefits generally cover all employees;
an employee must be one of those expressly enumerated to be exempted.
Section 3 of the Rules and Regulations Implementing P.D. No. 851
enumerates the exemptions from the coverage of 13th month pay bene ts.
Under Section 3(e), “employers of those who are paid on 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.

V. Working Conditions

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A.

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Issue: 1. Whether or not Bautista is a field personnel.

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