Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 78409 September 14, 1989
NORBERTO SORIANO, petitioner,
vs.
OFFSHORE SHIPPING AND MANNING CORPORATION, KNUT KNUTSEN O.A.S., and NATIONAL LABOR
RELATIONS COMMISSION (Second Division), respondents.
R. C. Carrera Law Firm for petitioner.
Elmer V. Pormento for private respondents.

FERNAN, C.J.:
This is a petition for certiorari seeking to annul and set aside the decision of public respondent National Labor
Relations Commission affirming the decision of the Philippine Overseas Employment Administration in POEA
Case No. (M)85-12-0953 entitled "Norberto Soriano v. Offshore Shipping and Manning Corporation and Knut
Knutsen O.A.S.", which denied petitioner's claim for salary differential and overtime pay and limited the
reimbursement of his cash bond to P15,000.00 instead of P20,000.00.
In search for better opportunities and higher income, petitioner Norberto Soriano, a licensed Second Marine
Engineer, sought employment and was hired by private respondent Knut Knutsen O.A.S. through its authorized
shipping agent in the Philippines, Offshore Shipping and Manning Corporation. As evidenced by the Crew
Agreement, petitioner was hired to work as Third Marine Engineer on board Knut Provider" with a salary of
US$800.00 a month on a conduction basis for a period of fifteen (15) days. He admitted that the term of the
contract was extended to six (6) months by mutual agreement on the promise of the employer to the petitioner
that he will be promoted to Second Engineer. Thus, while it appears that petitioner joined the aforesaid vessel
on July 23, 1985 he signed off on November 27, 1985 due to the alleged failure of private respondentemployer to fulfill its promise to promote petitioner to the position of Second Engineer and for the unilateral
decision to reduce petitioner's basic salary from US$800.00 to US$560.00. Petitioner was made to shoulder
his return airfare to Manila.
In the Philippines, petitioner filed with the Philippine Overseas Employment Administration (POEA for short), a
complaint against private respondent for payment of salary differential, overtime pay, unpaid salary for
November, 1985 and refund of his return airfare and cash bond allegedly in the amount of P20,000.00
contending therein that private respondent unilaterally altered the employment contract by reducing his salary
of US$800.00 per month to US$560.00, causing him to request for his repatriation to the Philippines. Although
repatriated, he claims that he failed to receive payment for the following:
1. Salary for November which is equivalent to US$800.00;
2. Leave pay equivalent to his salary for 16.5 days in the sum of US$440.00;
3. Salary differentials which is equivalent to US$240.00 a month for four (4) months and one (1)
week in the total sum of US$1,020,00;
4. Fixed overtime pay equivalent to US$240.00 a month for four (4) months and one (1) week in
the sum of US$1,020.00;
5. Overtime pay for 14 Sundays equivalent to US$484.99;

6. Repatriation cost of US$945.46;

7. Petitioner's cash bond of P20,000.00. 1
In resolving aforesaid case, the Officer-in-Charge of the Philippine Overseas Employment Administration or POEA found that petitionercomplainant's total monthly emolument is US$800.00 inclusive of fixed overtime as shown and proved in the Wage Scale submitted to
the Accreditation Department of its Office which would therefore not entitle petitioner to any salary differential; that the version of
complainant that there was in effect contract substitution has no grain of truth because although the Employment Contract seems to
have corrections on it, said corrections or alterations are in conformity with the Wage Scale duly approved by the POEA; that the
withholding of a certain amount due petitioner was justified to answer for his repatriation expenses which repatriation was found to have
been requested by petitioner himself as shown in the entry in his Seaman's Book; and that petitioner deposited a total amount of
P15,000.00 only instead of P20,000.00 cash bond. 2
Accordingly, respondent POEA ruled as follows:
VIEWED IN THE LIGHT OF THE FOREGOING, respondents are hereby ordered to pay complainant, jointly and
severally within ten (10) days from receipt hereof the amount of P15,000.00 representing the reimbursement of the
cash bond deposited by complainant less US$285.83 (to be converted to its peso equivalent at the time of actual
payment).
Further, attorney's fees equivalent to 10 % of the aforesaid award is assessed against respondents.
All other claims are hereby dismissed for lack of merit.
SO ORDERED. 3
Dissatisfied, both parties appealed the aforementioned decision of the POEA to the National Labor Relations Commission.
Complainant-petitioner's appeal was dismissed for lack of merit while respondents' appeal was dismissed for having been filed out of
time.
Petitioner's motion for reconsideration was likewise denied. Hence this recourse.
Petitioner submits that public respondent committed grave abuse of discretion and/or acted without or in excess of jurisdiction by
disregarding the alteration of the employment contract made by private respondent. Petitioner claims that the alteration by private
respondent of his salary and overtime rate which is evidenced by the Crew Agreement and the exit pass constitutes a violation of Article
34 of the Labor Code of the Philippines. 6
On the other hand, public respondent through the Solicitor General, contends that, as explained by the POEA: "Although the
employment contract seems to have corrections, it is in conformity with the Wage Scale submitted to said office. 7
Apparently, petitioner emphasizes the materiality of the alleged unilateral alteration of the employment contract as this is proscribed by
the Labor Code while public respondent finds the same to be merely innocuous. We take a closer look at the effects of these alterations
upon petitioner's right to demand for his differential, overtime pay and refund of his return airfare to Manila.
A careful examination of the records shows that there is in fact no alteration made in the Crew Agreement 8 or in the Exit Pass. 9 As the
original data appear, the figures US$800.00 fall under the column salary, while the word "inclusive" is indicated under the column
overtime rate. With the supposed alterations, the figures US$560.00 were handwritten above the figures US$800.00 while the figures
US$240.00 were also written above the word "inclusive".
As clearly explained by respondent NLRC, the correction was made only to specify the salary and the overtime pay to which petitioner
is entitled under the contract. It was a mere breakdown of the total amount into US$560.00 as basic wage and US$240.00 as overtime
pay. Otherwise stated, with or without the amendments the total emolument that petitioner would receive under the agreement as
approved by the POEA is US$800.00 monthly with wage differentials or overtime pay included. 10
Moreover, the presence of petitioner's signature after said items renders improbable the possibility that petitioner could have
misunderstood the amount of compensation he will be receiving under the contract. Nor has petitioner advanced any explanation for
statements contrary or inconsistent with what appears in the records. Thus, he claimed: [a] that private respondent extended the
duration of the employment contract indefinitely, 11 but admitted in his Reply that his employment contract was extended for another six
(6) months by agreement between private respondent and himself: 12 [b] that when petitioner demanded for his overtime pay,
respondents repatriated him 13 which again was discarded in his reply stating that he himself requested for his voluntary repatriation
because of the bad faith and insincerity of private respondent; 14 [c] that he was required to post a cash bond in the amount of
P20,000.00 but it was found that he deposited only the total amount of P15,000.00; [d] that his salary for November 1985 was not paid
when in truth and in fact it was petitioner who owes private respondent US$285.83 for cash advances 15 and on November 27, 1985 the

final pay slip was executed and signed; 16 and [e] that he finished his contract when on the contrary, despite proddings that he continue
working until the renewed contract has expired, he adamantly insisted on his termination.
Verily, it is quite apparent that the whole conflict centers on the failure of respondent company to give the petitioner the desired
promotion which appears to be improbable at the moment because the M/V Knut Provider continues to be laid off at Limassol for lack of
charterers. 17
It is axiomatic that laws should be given a reasonable interpretation, not one which defeats the very purpose for which they were
passed. This Court has in many cases involving the construction of statutes always cautioned against narrowly interpreting a statute as
to defeat the purpose of the legislator and stressed that it is of the essence of judicial duty to construe statutes so as to avoid such a
deplorable result (of injustice or absurdity) and that therefore "a literal interpretation is to be rejected if it would be unjust or lead to
absurd results." 18
There is no dispute that an alteration of the employment contract without the approval of the Department of Labor is a serious violation
of law.
Specifically, the law provides:
Article 34 paragraph (i) of the Labor Code reads:
Prohibited Practices. It shall be unlawful for any individual, entity, licensee, or holder of authority:
xxxx
(i) To substitute or alter employment contracts approved and verified by the Department of Labor from the time of
actual signing thereof by the parties up to and including the period of expiration of the same without the approval of
the Department of Labor.
In the case at bar, both the Labor Arbiter and the National Labor Relations Commission correctly analyzed the questioned annotations
as not constituting an alteration of the original employment contract but only a clarification thereof which by no stretch of the
imagination can be considered a violation of the above-quoted law. Under similar circumstances, this Court ruled that as a general
proposition, exceptions from the coverage of a statute are strictly construed. But such construction nevertheless must be at all times
reasonable, sensible and fair. Hence, to rule out from the exemption amendments set forth, although they did not materially change the
terms and conditions of the original letter of credit, was held to be unreasonable and unjust, and not in accord with the declared
purpose of the Margin Law. 19
The purpose of Article 34, paragraph 1 of the Labor Code is clearly the protection of both parties. In the instant case, the alleged
amendment served to clarify what was agreed upon by the parties and approved by the Department of Labor. To rule otherwise would
go beyond the bounds of reason and justice.
As recently laid down by this Court, the rule that there should be concern, sympathy and solicitude for the rights and welfare of the
working class, is meet and proper. That in controversies between a laborer and his master, doubts reasonably arising from the evidence
or in the interpretation of agreements and writings should be resolved in the former's favor, is not an unreasonable or unfair rule. 20 But
to disregard the employer's own rights and interests solely on the basis of that concern and solicitude for labor is unjust and
unacceptable.
Finally, it is well-settled that factual findings of quasi-judicial agencies like the National Labor Relations Commission which have
acquired expertise because their jurisdiction is confined to specific matters are generally accorded not only respect but at times even
finality if such findings are supported by substantial evidence. 21
In fact since Madrigal v. Rafferty 22 great weight has been accorded to the interpretation or construction of a statute by the government
agency called upon to implement the same. 23
WHEREFORE, the instant petition is DENIED. The assailed decision of the National Labor Relations Commission is AFFIRMED in toto.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC
G.R. No. 46727

September 27, 1939

PAMBUSCO EMPLOYEES' UNION, INC., petitioner,

vs.
THE COURT OF INDUSTRIAL RELATIONS, composed to Honorables Francisco Zulueta, Leopoldo Rovira, and
Jose Generoso, and PAMPANGA BUS COMPANY, INC., respondents.
Jose Alejandrino for petitioner.
Manuel Escudero for respondent court.
L.D. Lockwood for respondent Pampanga Bus Co., Inc.
LAUREL, J.:
This is a petition for a writ of certiorari to review the decision of the Court of Industrial Relations promulgated on
January 14, 1939, denying the demands of the Pambusco Employees' Union, Inc.
The following are the pertinent facts which have given occasion to this industrial dispute: On March 26, 1938, the
Pambusco Employees' Union, Inc., addressed a thirteen- point petition to the management of the Pampanga Bus Co. Upon
the failure of the company officials to act upon the petition, a strike was declared by the workers on April 14, 1938.
However, through the timely mediation of the Department of Labor, a provisional agreement was reached, by virtue of
which the strike was called off, eight demands were granted, and the remaining five were submitted to the Court of
Industrial Relations for settlement. One of these demands, in the language of the petitioner, is that the respondent
Pampanga Bus Co. "pay to all Company drivers affiliated with the Pambusco Employees' Union, Inc., all the back
overtime pay due them under the law." After trial on the disputed demands, the Court of Industrial Relations decided inter
alia that the claim for back overtime pay could not be allowed.
The pertinent portion of the decision of the respondent Court of Industrial Relations is as follows:
The evidence is clear that even before the final approval of Act No. 4242 amending Act No. 4123, the Eight Hour
Labor Law, by extending the provisions of the latter to other class of laborers including drivers of public service
vehicles, a petition was addressed by 44 drivers of the company to the Governor-General asking him to veto the
bill amending the law extending it to drivers for the reason stated in their petition (Exhibit 5 and 5-a). About the
6th day of September, 1935, a petition was again addressed by 97 drivers of the company to the Commissioner of
Labor requesting adjustment of working hours to permit them to retain their present status with the company as
nearly as possible under the law (Exhibits 4, 4-a, 4-b, 4-c, 4-d and 4-e). This petition was prepared after a meeting
of the employees was held and was drawn with the help of the manager of the respondent about the last days of
August, 1935. In September, 1937, about 347 employees of the different departments of the company again
addresses a petition to the Director of Labor expressing their satisfaction with the hours they work and the pay
they receive for their labor including the special bonuses and overtime pay they receive for extra work, and
asking, in view thereof, that the law be not applied to them (Exhibits 6, 6-a to 6-g).
After the enactment of Act No. 4242 several transportation companies operating motor buses filed with
Commissioner of Labor petitions for a readjustment of the hours of labor specified in section 1 of the Act on the
basis of maintaining the status quo as to the hours the drivers were required to be actually on duty in order to
enable them to make the prescribed hours daily that the exigencies of the service required. The petitions were
based on the impracticability of applying the provisions of the law to drivers of public service vehicles without
disrupting the public service and causing pecuniary loss to both employers and employees alike, and the resulting
difficulties on the part of the drivers. The testimony of Atty. Carlos Alvear on this point in uncontradicted. He
testified that in 1935, he was president of the Philippine Motor Association composed of bus operators operating
in the Philippines, of which the respondent is a member. Major Olson, who was at the time the executive secretary
of the association, and himself took up the matter with the Secretary of the Interior and the Secretary of Labor
after the passage of the Act extending the operation of the Eight Labor Law to drivers. In their conference with the
Commissioner of Labor, they were told to take advantage of the provisions of the law in which they may apply for

the readjustment of the working hours, and in conformity with that suggestion, the executive secretary of the
association filed a formal petition, Exhibit 10, on September 5, 1935. When this was filed the Department of
Labor further suggested that the drivers of each company file and address a petition of similar nature designating
their representatives who will represent them in a conference that the Commissioner of Labor may call for the
purpose. With the filing of the petition, the conferees were assured by the Under-Secretary of Labor that the
enforcement of the Eight Hour Labor Law in so far as the drivers were concerned, will be held in abeyance until
such time as the meeting or investigations are held. It is not clear as to whether investigations and hearings were
finally made but the evidence indicates that the petition was never decided and the companies continued its
schedule of hours.
Sections 3 and 4 of Act No. 4123 read as follows:
"SEC. 3. The Commissioner of Labor, with the advice of two representatives of the employers concerned,
designated by the latter, and of two representatives of the laborers concerned, designated by these, shall, at the
request of an interested party, decide in each case whether or not it is proper to increase or decrease the number of
hours of labor fixed in section one of this Act, either because the organization or nature of the work require it, or
because of lack or insufficiency of competent laborers for certain work in a locality, or because the relieving of
the laborers must be done under certain conditions, or by reason of any other exceptional circumstances or
conditions of the work or industry concerned; but the number of hours of labor shall in no case exceed twelve
daily or seventy-two weekly.
"SEC. 4. Employees or laborers desiring an increase or decrease of the number of hours of labor shall address an
application to this effect to the Commissioner of Labor, stating their reasons. Upon receipt of an application of
this kind, the Commissioner of Labor shall call a meeting of the employers and laborers of the establishment or
industry concerned, for the designation of advisers as provided in the preceding section hereof. The
Commissioner of Labor or his authorized representative, together with the advisers, shall make an investigation of
the facts, giving special attention, in the first place, to the human aspect, and in the second place, to the economic
aspect of the matter, and he may for this purpose administer oaths, take affidavits examine witnesses and
documents and issue subpoenas and subpoenas duces tecum. The decision of the Commissioner of Labor may be
reconsidered by him at any time."
It seems clear that the petitions of both employers and employees for the non-enforcement of the Eight Hour
Labor Law were made in accordance with these provisions of the law. Exhibit 9 of the respondent which is a
communication addressed by the Under-Secretary of Labor on September 6, 1935, to the A.L. Ammen
Transportation Company, Inc., defines the attitude taken by the Department of Labor in connection with those
petitions. It advises the company to submit an application under sections 3 and 4 of Act No. 4123 above-quoted
for an increase of working hours of such laborers as may fall under the amendment and that pending final solution
of said application, the Department of Labor will not make any attempt to enforce said amendment. As has
already been stated it is not clear whether final action or decision has been made on the applications with respect
to the drivers of the respondent; that it is undeniable fact that up to the outbreak of the dispute, the law was not
observed nor enforced in the company; and that upon mutual agreement arrived at by the parties on April 14,
1938, the company worked out a schedule beginning May 1, 1938, placing all its employees under an eight-hour
schedule.
In view of the foregoing fact, the court is the opinion that the drivers are not entitled to the overtime pay
demanded for the whole period the law was not observed or enforced in the company. They are entitled to
payment of wages for hours worked in excess of the legal hours only beginning May 1, 1938.
On January 30, 1939, the petitioner filed a motion for reconsideration which was denied by the Court of Industrial
Relations, sitting in banc, with the following observations:
We have reviewed carefully the evidence on record with regard to the claim for back overtime pay we find that it
amply supports the findings and conclusions set forth in support of the motion for reconsideration are virtually a
repetition of the reasons advanced in the memorandum of the petitioner filed before the case was decided and
were already discussed and considered in the decision. The evidence permits no other conclusion than that the
employees were not coerced not intimidated by the respondent on the repeated occasions they signed and

presented to the Department of Labor their petitions for non-enforcement of the Eight Hour Labor Law. The
employees were indubitably aware of certain hardships the enforcement of the law at that time would bring to
them and these prompted their attitude of preferring the continuation of the schedule of hours observed prior to
the enactment of the legislation extending the benefits of the Eight Hour Labor Law to drivers of motor vehicles
in public utility enterprises. Whatever pecuniary advantage they would have gained by the strict observance of the
law by the company should they be made to work more than eight hours a day was apparently waived or given up
by them in exchange of their personal convenience and of the additional monthly pay the respondent gave to those
employees who were assigned to routes where the daily working hours exceeded the maximum fixed by law. The
evidence that the company paid additional salaries not only to drivers but also to its conductors who were
assigned to such routes stands uncontradicted and no attempt even was made by the petitioner to deny it. Without
need of passing on the question as to whether the provisions of the law are mandatory or not, in the light of the
above facts and applying the rules of equity invoked by the union, we are constrained to hold that the petitioners
are not rightly entitled to the payment sought.
In Kapisanan ng mga Manggagawa sa Pantranco vs. Pangasinan Transportation Co. (39 Off. Gaz., 1217), we have held
that, to be entitled to the benefits of section 5 of Act No. 4123, fulfillment of the mandate of the law is necessary, this
being a matter of public interest. Where both parties, as in this case, we have violated the law, this court must decline to
extend the strong arm of equity, as neither party is entitled to its aid. This is especially true in view of the findings of fact
made by the Court of Industrial Relations which we should not disturb.
We are not, to be sure insensible to the argument that industrial disputes should be decided with an eye on the welfare of
the working class, who, in the inter-play of economic forces, is said to find itself in the "end of the stick." In the case at
bar, however, we find no reason for disturbing the action taken by the respondent Court of Industrial Relations, which is a
special court enjoined to "act according to justice and equity and substantial merits of the case, without regard to
technicalities or legal forms and shall not be bound by any technical rules of legal evidence but may inform its mind in
such manner as it may deem just and equitable" (sec. 20, Commonwealth Act No. 103).
The petition is dismissed, without pronouncement regarding costs. So ordered.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 79255 January 20, 1992
UNION OF FILIPRO EMPLOYEES (UFE), petitioner,
vs.
BENIGNO VIVAR, JR., NATIONAL LABOR RELATIONS COMMISSION and NESTL PHILIPPINES, INC. (formerly
FILIPRO, INC.), respondents.
Jose C. Espinas for petitioner.
Siguion Reyna, Montecillo & Ongsiako for private respondent.

GUTIERREZ, JR., J.:

This labor dispute stems from the exclusion of sales personnel from the holiday pay award and the change of the divisor
in the computation of benefits from 251 to 261 days.

On November 8, 1985, respondent Filipro, Inc. (now Nestle Philippines, Inc.) filed with the National Labor Relations
Commission (NLRC) a petition for declaratory relief seeking a ruling on its rights and obligations respecting claims of its
monthly paid employees for holiday pay in the light of the Court's decision in Chartered Bank Employees Association v.
Ople (138 SCRA 273 [1985]).
Both Filipro and the Union of Filipino Employees (UFE) agreed to submit the case for voluntary arbitration and appointed
respondent Benigno Vivar, Jr. as voluntary arbitrator.
On January 2, 1980, Arbitrator Vivar rendered a decision directing Filipro to:
pay its monthly paid employees holiday pay pursuant to Article 94 of the Code, subject only to the
exclusions and limitations specified in Article 82 and such other legal restrictions as are provided for in the
Code. (Rollo,
p. 31)
Filipro filed a motion for clarification seeking (1) the limitation of the award to three years, (2) the exclusion of salesmen,
sales representatives, truck drivers, merchandisers and medical representatives (hereinafter referred to as sales
personnel) from the award of the holiday pay, and (3) deduction from the holiday pay award of overpayment for overtime,
night differential, vacation and sick leave benefits due to the use of 251 divisor. (Rollo, pp. 138-145)
Petitioner UFE answered that the award should be made effective from the date of effectivity of the Labor Code, that their
sales personnel are not field personnel and are therefore entitled to holiday pay, and that the use of 251 as divisor is an
established employee benefit which cannot be diminished.
On January 14, 1986, the respondent arbitrator issued an order declaring that the effectivity of the holiday pay award shall
retroact to November 1, 1974, the date of effectivity of the Labor Code. He adjudged, however, that the company's sales
personnel are field personnel and, as such, are not entitled to holiday pay. He likewise ruled that with the grant of 10 days'
holiday pay, the divisor should be changed from 251 to 261 and ordered the reimbursement of overpayment for overtime,
night differential, vacation and sick leave pay due to the use of 251 days as divisor.
Both Nestle and UFE filed their respective motions for partial reconsideration. Respondent Arbitrator treated the two
motions as appeals and forwarded the case to the NLRC which issued a resolution dated May 25, 1987 remanding the
case to the respondent arbitrator on the ground that it has no jurisdiction to review decisions in voluntary arbitration cases
pursuant to Article 263 of the Labor Code as amended by Section 10, Batas Pambansa Blg. 130 and as implemented by
Section 5 of the rules implementing B.P. Blg. 130.
However, in a letter dated July 6, 1987, the respondent arbitrator refused to take cognizance of the case reasoning that he
had no more jurisdiction to continue as arbitrator because he had resigned from service effective May 1, 1986.
Hence, this petition.
The petitioner union raises the following issues:
1) Whether or not Nestle's sales personnel are entitled to holiday pay; and
2) Whether or not, concomitant with the award of holiday pay, the divisor should be changed from 251 to 261 days and
whether or not the previous use of 251 as divisor resulted in overpayment for overtime, night differential, vacation and sick
leave pay.
The petitioner insists that respondent's sales personnel are not field personnel under Article 82 of the Labor Code. The
respondent company controverts this assertion.
Under Article 82, field personnel are not entitled to holiday pay. Said article defines field personnel as "non-agritultural
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."
The controversy centers on the interpretation of the clause "whose actual hours of work in the field cannot be determined
with reasonable certainty."

It is undisputed that these sales personnel start their field work at 8:00 a.m. after having reported to the office and come
back to the office at 4:00 p.m. or 4:30 p.m. if they are Makati-based.
The petitioner maintains that the period between 8:00 a.m. to 4:00 or 4:30 p.m. comprises the sales personnel's working
hours which can be determined with reasonable certainty.
The Court does not agree. The law requires that the actual hours of work in the field be reasonably ascertained. The
company has no way of determining whether or not these sales personnel, even if they report to the office before 8:00
a.m. prior to field work and come back at 4:30 p.m, really spend the hours in between in actual field work.
We concur with the following disquisition by the respondent arbitrator:
The requirement for the salesmen and other similarly situated employees to report for work at the office at
8:00 a.m. and return at 4:00 or 4:30 p.m. is not within the realm of work in the field as defined in the Code
but an exercise of purely management prerogative of providing administrative control over such
personnel. This does not in any manner provide a reasonable level of determination on the actual field
work of the employees which can be reasonably ascertained. The theoretical analysis that salesmen and
other similarly-situated workers regularly report for work at 8:00 a.m. and return to their home station at
4:00 or 4:30 p.m., creating the assumption that their field work is supervised, is surface projection. Actual
field work begins after 8:00 a.m., when the sales personnel follow their field itinerary, and ends
immediately before 4:00 or 4:30 p.m. when they report back to their office. The period between 8:00 a.m.
and 4:00 or 4:30 p.m. comprises their hours of work in the field, the extent or scope and result of which
are subject to their individual capacity and industry and which "cannot be determined with reasonable
certainty." This is the reason why effective supervision over field work of salesmen and medical
representatives, truck drivers and merchandisers is practically a physical impossibility. Consequently, they
are excluded from the ten holidays with pay award. (Rollo, pp. 36-37)
Moreover, the requirement that "actual hours of work in the field cannot be determined with reasonable certainty" must be
read in conjunction with Rule IV, Book III of the Implementing Rules which provides:
Rule IV Holidays with Pay
Sec. 1. Coverage This rule shall apply to all employees except:
xxx xxx xxx
(e) Field personnel and other employees whose time and performance is unsupervised by the
employer . . . (Emphasis supplied)
While contending that such rule added another element not found in the law (Rollo, p. 13), the petitioner nevertheless
attempted to show that its affected members are not covered by the abovementioned rule. The petitioner asserts that the
company's sales personnel are strictly supervised as shown by the SOD (Supervisor of the Day) schedule and the
company circular dated March 15, 1984 (Annexes 2 and 3, Rollo, pp. 53-55).
Contrary to the contention of the petitioner, the Court finds that the aforementioned rule did not add another element to the
Labor Code definition of field personnel. The clause "whose time and performance is unsupervised by the employer" did
not amplify but merely interpreted and expounded the clause "whose actual hours of work in the field cannot be
determined with reasonable certainty." The former clause is still within the scope and purview of Article 82 which defines
field personnel. Hence, in deciding whether or not an employee's actual working hours in the field can be determined with
reasonable certainty, query must be made as to whether or not such employee's time and performance is constantly
supervised by the employer.
The SOD schedule adverted to by the petitioner does not in the least signify that these sales personnel's time and
performance are supervised. The purpose of this schedule is merely to ensure that the sales personnel are out of the
office not later than 8:00 a.m. and are back in the office not earlier than 4:00 p.m.
Likewise, the Court fails to see how the company can monitor the number of actual hours spent in field work by an
employee through the imposition of sanctions on absenteeism contained in the company circular of March 15, 1984.

The petitioner claims that the fact that these sales personnel are given incentive bonus every quarter based on their
performance is proof that their actual hours of work in the field can be determined with reasonable certainty.
The Court thinks otherwise.
The criteria for granting incentive bonus are: (1) attaining or exceeding sales volume based on sales target; (2) good
collection performance; (3) proper compliance with good market hygiene; (4) good merchandising work; (5) minimal
market returns; and (6) proper truck maintenance. (Rollo, p. 190).
The above criteria indicate that these sales personnel are given incentive bonuses precisely because of the difficulty in
measuring their actual hours of field work. These employees are evaluated by the result of their work and not by the actual
hours of field work which are hardly susceptible to determination.
In San Miguel Brewery, Inc. v. Democratic Labor Organization (8 SCRA 613 [1963]), the Court had occasion to discuss
the nature of the job of a salesman. Citing the case of Jewel Tea Co. v. Williams, C.C.A. Okla., 118 F. 2d 202, the Court
stated:
The reasons for excluding an outside salesman are fairly apparent. Such a salesman, to a greater extent,
works individually. There are no restrictions respecting the time he shall work and he can earn as much or
as little, within the range of his ability, as his ambition dictates. In lieu of overtime he ordinarily receives
commissions as extra compensation. He works away from his employer's place of business, is not subject
to the personal supervision of his employer, and his employer has no way of knowing the number of hours
he works per day.
While in that case the issue was whether or not salesmen were entitled to overtime pay, the same rationale for their
exclusion as field personnel from holiday pay benefits also applies.
The petitioner union also assails the respondent arbitrator's ruling that, concomitant with the award of holiday pay, the
divisor should be changed from 251 to 261 days to include the additional 10 holidays and the employees should
reimburse the amounts overpaid by Filipro due to the use of 251 days' divisor.
Arbitrator Vivar's rationale for his decision is as follows:
. . . The new doctrinal policy established which ordered payment of ten holidays certainly adds to or
accelerates the basis of conversion and computation by ten days. With the inclusion of ten holidays as
paid days, the divisor is no longer 251 but 261 or 262 if election day is counted. This is indeed an
extremely difficult legal question of interpretation which accounts for what is claimed as falling within the
concept of "solutio indebti."
When the claim of the Union for payment of ten holidays was granted, there was a consequent need to
abandon that 251 divisor. To maintain it would create an impossible situation where the employees would
benefit with additional ten days with pay but would simultaneously enjoy higher benefits by discarding the
same ten days for purposes of computing overtime and night time services and considering sick and
vacation leave credits. Therefore, reimbursement of such overpayment with the use of 251 as divisor
arises concomitant with the award of ten holidays with pay. (Rollo, p. 34)
The divisor assumes an important role in determining whether or not holiday pay is already included in the monthly paid
employee's salary and in the computation of his daily rate. This is the thrust of our pronouncement in Chartered Bank
Employees Association v. Ople (supra). In that case, We held:
It is argued that even without the presumption found in the rules and in the policy instruction, the company
practice indicates that the monthly salaries of the employees are so computed as to include the holiday
pay provided by law. The petitioner contends otherwise.
One strong argument in favor of the petitioner's stand is the fact that the Chartered Bank, in computing
overtime compensation for its employees, employs a "divisor" of 251 days. The 251 working days divisor
is the result of subtracting all Saturdays, Sundays and the ten (10) legal holidays from the total number of
calendar days in a year. If the employees are already paid for all non-working days, the divisor should be
365 and not 251.

In the petitioner's case, its computation of daily ratio since September 1, 1980, is as follows:
monthly rate x 12 months

251 days
Following the criterion laid down in the Chartered Bank case, the use of 251 days' divisor by respondent Filipro indicates
that holiday pay is not yet included in the employee's salary, otherwise the divisor should have been 261.
It must be stressed that the daily rate, assuming there are no intervening salary increases, is a constant figure for the
purpose of computing overtime and night differential pay and commutation of sick and vacation leave credits. Necessarily,
the daily rate should also be the same basis for computing the 10 unpaid holidays.
The respondent arbitrator's order to change the divisor from 251 to 261 days would result in a lower daily rate which is
violative of the prohibition on non-diminution of benefits found in Article 100 of the Labor Code. To maintain the same daily
rate if the divisor is adjusted to 261 days, then the dividend, which represents the employee's annual salary, should
correspondingly be increased to incorporate the holiday pay. To illustrate, if prior to the grant of holiday pay, the
employee's annual salary is P25,100, then dividing such figure by 251 days, his daily rate is P100.00 After the payment of
10 days' holiday pay, his annual salary already includes holiday pay and totals P26,100 (P25,100 + 1,000). Dividing this
by 261 days, the daily rate is still P100.00. There is thus no merit in respondent Nestle's claim of overpayment of overtime
and night differential pay and sick and vacation leave benefits, the computation of which are all based on the daily rate,
since the daily rate is still the same before and after the grant of holiday pay.
Respondent Nestle's invocation of solutio indebiti, or payment by mistake, due to its use of 251 days as divisor must fail in
light of the Labor Code mandate that "all doubts in the implementation and interpretation of this Code, including its
implementing rules and regulations, shall be resolved in favor of labor." (Article 4). Moreover, prior to September 1, 1980,
when the company was on a 6-day working schedule, the divisor used by the company was 303, indicating that the 10
holidays were likewise not paid. When Filipro shifted to a 5-day working schebule on September 1, 1980, it had the
chance to rectify its error, if ever there was one but did not do so. It is now too late to allege payment by mistake.
Nestle also questions the voluntary arbitrator's ruling that holiday pay should be computed from November 1, 1974. This
ruling was not questioned by the petitioner union as obviously said decision was favorable to it. Technically, therefore,
respondent Nestle should have filed a separate petition raising the issue of effectivity of the holiday pay award. This Court
has ruled that an appellee who is not an appellant may assign errors in his brief where his purpose is to maintain the
judgment on other grounds, but he cannot seek modification or reversal of the judgment or affirmative relief unless he has
also appealed. (Franco v. Intermediate Appellate Court, 178 SCRA 331 [1989], citing La Campana Food Products, Inc. v.
Philippine Commercial and Industrial Bank, 142 SCRA 394 [1986]). Nevertheless, in order to fully settle the issues so that
the execution of the Court's decision in this case may not be needlessly delayed by another petition, the Court resolved to
take up the matter of effectivity of the holiday pay award raised by Nestle.
Nestle insists that the reckoning period for the application of the holiday pay award is 1985 when the Chartered Bank
decision, promulgated on August 28, 1985, became final and executory, and not from the date of effectivity of the Labor
Code. Although the Court does not entirely agree with Nestle, we find its claim meritorious.
In Insular Bank of Asia and America Employees' Union (IBAAEU) v. Inciong, 132 SCRA 663 [1984], hereinafter referred to
as the IBAA case, the Court declared that Section 2, Rule IV, Book III of the implementing rules and Policy Instruction No.
9, issued by the then Secretary of Labor on February 16, 1976 and April 23, 1976, respectively, and which excluded
monthly paid employees from holiday pay benefits, are null and void. The Court therein reasoned that, in the guise of
clarifying the Labor Code's provisions on holiday pay, the aforementioned implementing rule and policy instruction
amended them by enlarging the scope of their exclusion. The Chartered Bank case reiterated the above ruling and added
the "divisor" test.
However, prior to their being declared null and void, the implementing rule and policy instruction enjoyed the presumption
of validity and hence, Nestle's non-payment of the holiday benefit up to the promulgation of the IBAA case on October 23,
1984 was in compliance with these presumably valid rule and policy instruction.
In the case of De Agbayani v. Philippine National Bank, 38 SCRA 429 [1971], the Court discussed the effect to be given to
a legislative or executive act subsequently declared invalid:

xxx xxx xxx

. . . It does not admit of doubt that prior to the declaration of nullity such challenged legislative or
executive act must have been in force and had to be complied with. This is so as until after the judiciary,
in an appropriate case, declares its invalidity, it is entitled to obedience and respect. Parties may have
acted under it and may have changed their positions. What could be more fitting than that in a
subsequent litigation regard be had to what has been done while such legislative or executive act was in
operation and presumed to be valid in all respects. It is now accepted as a doctrine that prior to its being
nullified, its existence as a fact must be reckoned with. This is merely to reflect awareness that precisely
because the judiciary is the government organ which has the final say on whether or not a legislative or
executive measure is valid, a period of time may have elapsed before it can exercise the power of judicial
review that may lead to a declaration of nullity. It would be to deprive the law of its quality of fairness and
justice then, if there be no recognition of what had transpired prior to such adjudication.
In the language of an American Supreme Court decision: "The actual existence of a statute, prior to such
a determination of [unconstitutionality], is an operative fact and may have consequences which cannot
justly be ignored. The past cannot always be erased by a new judicial declaration. The effect of the
subsequent ruling as to invalidity may have to be considered in various aspects, with respect to
particular relations, individual and corporate, and particular conduct, private and official." (Chicot County
Drainage Dist. v. Baxter States Bank, 308 US 371, 374 [1940]). This language has been quoted with
approval in a resolution in Araneta v. Hill (93 Phil. 1002 [1952]) and the decision in Manila Motor Co., Inc.
v. Flores (99 Phil. 738 [1956]). An even more recent instance is the opinion of Justice Zaldivar speaking
for the Court in Fernandez v. Cuerva and Co. (21 SCRA 1095 [1967]. (At pp. 434-435)
The "operative fact" doctrine realizes that in declaring a law or rule null and void, undue harshness and resulting
unfairness must be avoided. It is now almost the end of 1991. To require various companies to reach back to 1975 now
and nullify acts done in good faith is unduly harsh. 1984 is a fairer reckoning period under the facts of this case.
Applying the aforementioned doctrine to the case at bar, it is not far-fetched that Nestle, relying on the implicit validity of
the implementing rule and policy instruction before this Court nullified them, and thinking that it was not obliged to give
holiday pay benefits to its monthly paid employees, may have been moved to grant other concessions to its employees,
especially in the collective bargaining agreement. This possibility is bolstered by the fact that respondent Nestle's
employees are among the highest paid in the industry. With this consideration, it would be unfair to impose additional
burdens on Nestle when the non-payment of the holiday benefits up to 1984 was not in any way attributed to Nestle's
fault.
The Court thereby resolves that the grant of holiday pay be effective, not from the date of promulgation of the Chartered
Bank case nor from the date of effectivity of the Labor Code, but from October 23, 1984, the date of promulgation of the
IBAA case.
WHEREFORE, the order of the voluntary arbitrator in hereby MODIFIED. The divisor to be used in computing holiday pay
shall be 251 days. The holiday pay as above directed shall be computed from October 23, 1984. In all other respects, the
order of the respondent arbitrator is hereby AFFIRMED.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION

G.R. Nos. 117442-43 January 11, 1995

FEM'S ELEGANCE LODGING HOUSE, FENITHA SAAVEDRA and IRIES ANTHONY SAAVEDRA, petitioners,
vs.
The Honorable LEON P. MURILLO, Labor Arbiter, Regional Arbitration Branch, Region X, National Labor Relations
Commission, Cagayan de Oro City, ALFONSO GALLETO, GEORGE VEDAD, ROLAND PANTONIAL, REYNALDO
DELAORAO, FELICISIMO BAQUILID, CECILIO SAJOL, ANNABEL CASTRO, BENJAMIN CABRERA, RHONDEL
PADERANGA, ZENAIDA GUTIB, AIDA IMBAT and MARIA GRACE ATUEL, respondents.
RESOLUTION

QUIASON, J.:
This is a petition for certiorari under Rule 65 of the Revised Rules of court with temporary restraining order to reverse and
set aside the Order dated September 21, 1994 of the Labor Arbiter in the NLRC RAB X Cases Nos. 10-04-00232 (00233)-94.
Petitioner FEM's elegance Lodging House is a business enterprise engaged in providing lodging accommodations. It is
owned by petitioner Fenitha Saavedra and managed by petitioner Iries Anthony Saavedra. Private respondents are former
employees of petitioners whose services were terminated between March and April, 1994.
Sometime after their dismissal from the employment of petitioners, private respondents separately filed two cases against
petitioners before the National Labor Relations Commission (NLRC), Regional Arbitration Branch No. X, Cagayan de Oro
City, docketed as NLRC RAB X Cases Nos. 10-04-00232-(0023)-94. Private respondents sought for unpaid benefits such
as minimum wage, overtime pay, rest day pay, holiday pay, full thirteenth-month pay and separation pay (Rollo, pp. 4042).
On May 31, 1994, a pre-arbitration conference of the cases took place before the Labor Arbiter. It was agreed therein: (1)
that both labor cases should be consolidated; and (2) that the parties would file their respective position papers within
thirty days from said date or until June 30, 1994, after which the cases would be deemed submitted for resolution (Rollo,
p. 14).
On June 29, petitioners filed their position paper. On July 7, they inquired from the NLRC whether private respondents
had filed their position paper. The receiving clerk of the NLRC confirmed that as of said date private respondents had not
yet filed their position paper.
The following events then transpired: on July 8, petitioners filed a Motion to dismiss for failure of private respondents to
file their position paper within the agreed period (Rollo, p. 38); on July 15, private respondents belatedly filed their position
paper; on July 18, petitioners filed a Motion to Expunge [private respondents'] Position Paper from the records of the case
(Rollo, p. 45); and on August 23, the Labor Arbiter issued a notice of clarificatory hearing, which was set for September 7
(Rollo, p. 47). Prior to the hearing, petitioners filed a Motion to Resolve [petitioners'] Motion to dismiss and Motion to
Expunge [private respondent'] Position Paper from the Records of the Case (Rollo, p. 48).
On September 21, the Labor Arbiter issued the order denying the motions filed by petitioners. He held that a fifteen-day
delay in filing the position paper was not unreasonable considering that the substantive rights of litigants should not be
sacrificed by technicality. He cited Article 4 of the Labor Code of the Philippines, which provides that all doubts in the
interpretation thereof shall be resolved in favor of labor. He said that even under Section 15, Rule 5 of the Revised Rules
of Court, a delay in the filing of a position paper is not a ground for a motion to dismiss under the principle of exclusio
unius est excludio alterius (Rollo, pp. 51-52).
Hence, the present petition where petitioners charged the Labor Arbiter with grave abuse of discretion for issuing the
order in contravention of Section 3, Rule V of The New Rules of Procedure of the NLRC, Said section provides:
Submission of Position Papers/Memorandum. . . . Unless otherwise requested in writing by both
parties, the Labor Arbiter shall direct both parties to submit simultaneously their position
papers/memorandum with the supporting documents and affidavits within fifteen (15) calendar days from
the date of the last conference, with proof of having furnished each other with copies thereof (Emphasis
supplied).

Petitioners claimed that they were denied due process and that the Labor Arbiter should have cited private respondents in
contempt for their failure to comply with their agreement in the pre-arbitration conference.
We dismiss the petition for failure of petitioners to exhaust their remedies, particularly in seeking redress from the NLRC
prior to the filing of the instant petition. Article 223 of the Labor code of the Philippines provides that decisions, awards or
orders of the Labor Arbiter are appealable to the NLRC. Thus, petitioners should have first appealed the questioned order
of the Labor Arbiter to the NLRC, and not to this court. their omission is fatal to their cause.
However, even if the petition was given due course, we see no merit in petitioners' arguments. The delay of private
respondents in the submission of their position paper is a procedural flaw, and the admission thereof is within the
discretion of the Labor Arbiter.
Well-settled is the rule that technical rules of procedure are not binding in labor cases, for procedural lapses may be
disregarded in the interest of substantial justice, particularly where labor matters are concerned (Ranara v. National Labor
Relations commission, 212 SCRA 631 [1992]).
The failure to submit a position paper on time is not on of the grounds for the dismissal of a complaint in labor cases (The
New Rules of procedure of the NLRC, Rule V, Section 15). It cannot therefore be invoked by petitioners to declare private
respondents as non-suited. This stance is in accord with Article 4 of the Labor Code of the Philippines, which resolves that
all doubts in the interpretation of the law and its implementing rules and regulations shall be construed in favor of labor.
Needless to state, our jurisprudence is rich with decisions adhering to the State's basic policy of extending protection to
Labor where conflicting interests between labor and management exist (Aquino v. National Labor Relations Commission,
206 SCRA 118 [1992]).
Petitioners cannot claim that they were denied due process inasmuch as they were able to file their position paper. The
proper party to invoke due process would have been private respondents, had their position paper been expunged from
the records for mere technicality. Since petitioners assert that their defense is meritorious, it is to their best interest that
the cases be resolved on the merits. In this manner, the righteousness of their cause can be vindicated.
IN VIEW OF THE FOREGOING, the Court Resolved to DISMISS the petition for lack of merit.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
[G.R. No. 58176. March 23, 1984.]
RUTH JIMENEZ, Petitioner, v. EMPLOYEES COMPENSATION COMMISSION and GOVERNMENT SERVICE
INSURANCE SYSTEM, Respondents.
Isidro Pasana for Petitioner.
The Solicitor General for Respondents.
SYLLABUS
1. LABOR AND SOCIAL LEGISLATION; LABOR CODE; EMPLOYEES COMPENSATION COMMISSION;
COMPENSABILITY OF ILLNESS; CANCER OF THE LUNGS, A BORDERLINE CASE REQUIRING STUDY OF
CIRCUMSTANCES OF CASE. Admittedly, cancer of the lungs (bronchogenic carcinoma) is one of those borderline cases where a
study of the circumstances of the case is mandated to fully appreciate whether the nature of the work of the deceased increased the

possibility of contracting such an ailment. WE have ruled in the case of Dator v. Employees Compensation Commission (111 SCRA
634, L-57416, January 30, 1982) that" (U)ntil now, the cause of cancer is not known." Indeed, the respondent has provided an opening
through which petitioner can pursue and did pursue the possibility that the deceaseds ailment could have been caused by the working
conditions while employed with the Philippine Constabulary. Respondents maintain that the deceased was a smoker and the logical
conclusion is that the cause of the fatal lung cancer could only be smoking which cannot in any way be justified as work-connected.
However, medical authorities support the conclusion that up to now, the etiology or cause of cancer of the lungs is still largely
unknown.
2. ID.; ID.; ID.; ID.; CONCLUSION OF COMMISSION NOT IN ACCORDANCE WITH MEDICAL AUTHORITIES AND FACTS
ON RECORD. The sweeping conclusion of the respondent Employees Compensation Commission to the effect that the cause of
the bronchogenic carcinoma of the deceased was due to his being a smoker and not in any manner connected with his work as a
soldier, is not in accordance with medical authorities nor with the facts on record. No certitude can arise from a position of uncertainty.
WE are dealing with possibilities and medical authorities have given credence to the stand of the petitioner that her husband developed
bronchogenic carcinoma while working as a soldier with the Philippine Constabulary. The records show that when the deceased
enlisted with the Philippine Constabulary in 1969, he was found to be physically and mentally healthy. A soldiers life is a hard one.
As a soldier assigned to field duty, exposure to the elements, dust and dirt, fatigue and lack of sleep and rest is a common occurrence.
Exposure to chemicals while handling ammunition and firearms cannot be discounted. WE take note also of the fact that he became
the security of one Dr. Emilio Cordero of Anulung, Cagayan, and he always accompanied the doctor wherever the latter went (p. 26,
rec.). Such assignment invariably involved irregular working hours, exposure to different working conditions, and body fatigue, not to
mention psychological stress and other similar factors which influenced the evolution of his ailment.
3. ID.; ID.; ID.; ID.; THEORY OF INCREASED RISK. The theory of increased risk is applicable in the case at bar. In the case of
Cristobal v. ECC (103 SCRA, 336-337) where the Court held that "to establish compensability under the said theory, the claimant
must show proof of work-connection. Impliedly, the degree of proof required is merely substantial evidence, which means such
relevant evidence to support a decision (Ang Tibay v. The Court of Industrial Relations and National Labor Union, Inc., 69 Phil. 635)
or clear and convincing evidence. In this connection, it must be pointed out that the strict rules of evidence are not applicable in claims
for compensation. Respondents however insist on evidence which would establish direct causal relation between the disease rectal
cancer and the employment of the deceased. Such a strict requirement which even medical experts cannot support considering the
uncertainty of the nature of the disease would negate the principle of the liberality in the matter of evidence. Apparently, what the law
merely requires is a reasonable work-connection and not a direct causal relation. This kind of interpretation gives meaning and
substance to the liberal and compassionate spirit of the law as embodied in Article 4 of the new Labor Code which states that all
doubts in the implementation of the provisions of this Code, including its implementing rules and regulations shall be resolved in
favor of labor."
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4. ID.; ID.; ID.; STRICT RULES ON EVIDENCE NOT APPLICABLE; STATE POLICY OF LIBERALITY TOWARDS LABOR
MUST BE MAINTAINED. In San Valentin v. ECC (118 SCRA 160), the Court held that "In compensation cases, strict rules on
evidence are not applicable. A reasonable work-connection is all that is required or that the risk of contracting the disease is increased
by the working condition." This is in line with the avowed policy of the State as mandated by the Constitution (Art. II, Sec. 9) and
restated in the New Labor Code (Art. 4) to give maximum aid and protection to labor.
DECISION
MAKASIAR, J.:
This is a petition to review the decision of respondent Employees Compensation Commission (ECC) dated August 20, 1981 (Annex
"A", Decision, pp. 10-12, rec.) in ECC Case No. 1587, which affirmed the decision of respondent Government Service Insurance
System (GSIS), denying petitioners claim for death benefits under Presidential Decree No. 626, as amended.
The undisputed facts are as follows:

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Petitioner is the widow of the late Alfredo Jimenez, who joined the government service in June, 1969 as a constable in the Philippine
Constabulary (p. 2, rec.)
After rendering service for one year, he was promoted to the rank of constable second class. On December 16, 1974, he was again
promoted to the rank of sergeant (p. 26, rec.)
Sometime in April, 1976, he and his wife boarded a bus from Tuguegarao, Cagayan, to Anulung, Cagayan. While on their way, Sgt.
Jimenez, who was seated on the left side of the bus, fell down from the bus because of the sudden stop of the vehicle. As a result, he
was confined at the Cagayan Provincial Hospital for about one (1) week, and thereafter, released (comment of respondent ECC, pp.

25-36, rec.). He was again confined for further treatment from November 7, 1978 to May 16, 1979 at the AFP Medical Center in
Quezon City.
While on duty with the 111th PC Company, Tuguegarao, Cagayan, he was assigned as security to one Dr. Emilio Cordero of Anulung,
Cagayan (ECC rec., Proceedings of the PC Regional Board, June 6, 1980). In compliance with his duty, he always accompanied the
doctor wherever the latter went (p. 26, rec.)
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On November 7, 1978, the deceased was again confined at the Cagayan Provincial Hospital and then transferred to the AFP V. Luna
Medical Center at Quezon City for further treatment. He complained of off-and-on back pains, associated with occasional cough and
also the swelling of the right forearm. The doctors found a mass growth on his right forearm, which grew to the size of 3 by 2 inches,
hard and associated with pain, which the doctors diagnosed as "aortic aneurysm, medrastinal tumor" (p. 27, rec.)
His condition improved somewhat after treatment and he was released on May 16, 1979. He was advised to have complete rest and to
continue medication. He was then given light duty inside the barracks of their company.
Unfortunately, his ailment continued and became more serious.
On May 12, 1980, he died in his house at Anulung, Cagayan, at about 9:00 oclock in the evening. He was barely 35 years old at the
time of his death.
The cause of death, as found by the doctors, is "bronchogenic carcinoma" which is a malignant tumor of the lungs.
On June 6, 1980, an administrative hearing was conducted before the PC Regional Board. It was their official findings that the subject
enlisted man "died in line of duty" ; that the deceased was a PC member of the 111th PC Company at Tuguegarao, Cagayan; that he
died due to "bronchogenic CA" ; and that he "died not as a result of his misconduct and did not violate any provisions of the Articles
of War" (ECC rec., Proceedings of the PC Regional Board, June 6, 1980).
The Board recommended "that all benefits due to or become due subject EP be paid and settled to his legal heirs" (ECC rec.,
Proceedings of the PC Regional Board, June 6, 1980). Thus, as per records of the GSIS, petitioner was paid benefits due to her
deceased husband under Republic Act No. 610 (Comment of respondent ECC, p. 27, rec.)
cralawnad

Nevertheless, petitioner filed a claim for death benefits under PD No. 626, as amended with the respondent GSIS. Said claim was
denied by the GSIS on the ground that her husbands death is not compensable "for the reason that the injury/sickness that caused his
death is not due to the circumstances of the employment or in the performance of the duties and responsibilities of said employment"
(Letter of denial by the GSIS dated July 14, 1980, ECC rec.)
The said decision was affirmed by respondent Employees Compensation Commission in its decision dated August 21, 1981, stating
among others:
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"After an exhausted (sic) study of the evidences (sic) on record and the applicable law on the case, we conclude that the law has been
properly applied by the respondent System. . . .
"Bronchogenic carcinoma, medical authorities disclose, is the most common form of malignancy in males reaching a peak between
the fifth and seventh decades and accounting for one in four male cancer deaths. The sex incidence is at least 5 to 1, male to female.
Extensive statistical analysis by medical authorities have confirmed the relationship between lung cancer and cigarette smoking. Other
factors that may have potential roles are exposure to ionizing radiation, exposure to chromates, metallic iron and iron oxides, arsenic,
nickel, beryllium and asbestos (Harrisons Principles of Internal Medicine by Wintrobe, Et Al., 7th Edition, p. 1322).
"Although Presidential Decree No. 626, as amended, was envisioned to give relief to workingmen, who sustain an injury or contract
an ailment in the course of employment and that to best attain its lofty objective, a liberal interpretation of the law should pervade in
its implementation, this precept, however, may not be invoked as not even a slight causal link between the development of the ailment
and the decedents (sic) duties and working conditions as a PC sergeant could be deduced from the records of this case. The
respondent Systems ruling that appellants claim does not fall within the beneficiant provisions of Presidential Decree No. 626, as
amended, and therefore the same should be denied, is in full harmony with the law and the facts obtaining herein.
. . ." (Decision, pp. 10-12, rec.)
On September 28, 1981, Petitioner, assisted by counsel, filed the instant petition, the only pertinent issue being whether or not her
husbands death from bronchogenic carcinoma is compensable under the law.

The petitioner contends that her husbands death is compensable and that respondent Commission erred in not taking into
consideration the uncontroverted circumstance that when the deceased entered into the Philippine Constabulary, he was found to be
physically and mentally healthy. She farther contends that as a soldier, her husbands work has always been in the field where
exposure to the elements, dust and dirt, fatigue and lack of sleep and rest was the rule rather than the exception. The nature of work of
a soldier being to protect life and property of citizens, he was subject to call at any time of day or night. Furthermore, he was even
assigned as security to one Emilio Cordero and always accompanied the latter wherever he went. Exposed to these circumstances for
several years, the deceaseds physical constitution began to deteriorate, which eventually resulted to his death from bronchogenic
carcinoma (Petition, pp. 2-9, rec.)
On the other hand, respondent Commission maintains that while the deceased soldier may have been exposed to elements of dust and
dirt and condition of lack of rest and continued fatigue by virtue of his duties to protect the life and property of the citizens, such
conditions have no causal relation to his contraction of bronchogenic carcinoma. It is also the opinion of the respondent that since
there is evidence of the deceased to be a smoker, "the late Sgt. Jimenez may have indulged heavily in smoking and drinking, not
merely occasionally. And it has been demonstrated medically that the more cigarettes a person smokes, the greater the risk of
developing lung cancer" (Memorandum, p. 62, rec.). In short, the respondent alleges that the deceased was responsible to a large
degree for his having contracted bronchogenic carcinoma that led to his demise.
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WE find the petitioners claim meritorious.

Primary carcinoma of the lung is the most common fatal cancer and its frequency is increasing (The Merck Manual, 13th Edition, p.
647). Admittedly, cancer of the lungs (bronchogenic carcinoma) is one of those borderline cases where a study of the circumstances of
the case is mandated to fully appreciate whether the nature of the work of the deceased increased the possibility of contracting such an
ailment. In the case of Laron v. Workmens Compensation Commission (73 SCRA 90), WE held, citing Schmidts Attorneys
Dictionary of Medicine, 165 Sup. 143; Beerman v. Public Service Coordinated Transport, 191 A 297, 299; Words and Phrases, 6
Permanent Edition 61, "The English word cancer means crab, in the medical sense, it refers to a malignant, usually fatal, tumor or
growth." Findings of fact by the respondent points out that bronchogenic carcinoma is a malignant tumor of the lungs. WE have ruled
in the case of Dator v. Employees Compensation Commission (111 SCRA 634, L-57416, January 30, 1982) that" (U)ntil now, the
cause of cancer is not known." Indeed, the respondent has provided an opening through which petitioner can pursue and did pursue the
possibility that the deceaseds ailment could have been caused by the working conditions while employed with the Philippine
Constabulary.
Respondents maintain that the deceased was a smoker and the logical conclusion is that the cause of the fatal lung cancer could only
be smoking which cannot in any way be justified as work-connected. However, medical authorities support the conclusion that up to
now, the etiology or cause of cancer of the lungs is still largely unknown as provided for in the following:
jgc:chanrobles.com.ph

"Although the etiology of cancer in humans cannot yet be explained at the molecular level, it is clear that genetic composition of the
host is important in cancer induction. Related immunologic factors may predispose the host to a putative carcinogen. There is some
evidence that viruses may play a role in the neoplastic process. In addition, both environmental and therapeutic agents have been
identified of carcinogens" (Harrison, Principles of Internal Medicine, 9th Edition, 1980, p. 1584).
"Considerable attention has been directed to the potential role of air pollution exposure to ionizing radiation and numerous
occupational hazards, including exposure to chromates, metallic iron and iron oxides, arsenic, nickel, beryllium and asbestos"
(Harrison, Ibid, p. 1259).
"The lungs are the site of origin of primary benign and malignant tumors and receive metastases from many other organs and tissues.
Specific causes have not been established but a strong dose-related statistical association exists between cigarette smoking and
squamous cell and undifferentiated small (oat) cell bronchogenic carcinomas. There is suggestive evidence that prolonged exposure to
air pollution promotes lung neoplasms" (The Merck Manual, 13th Edition, p. 647).
"What emerges from such concepts is the belief that cancers in man do not appear suddenly out of the blue. . . . Moreover, there need
not be a single etiology or pathogenesis. Many influences may be at work during the evolution of the lesion and many pathways may
be involved. Indeed, the term cancer may embrace a multiplicity of diseases of diverse origins" (Robbins, Pathologic Basis of Disease,
2nd Edition, 1979, p. 185, Emphasis supplied).
WE cannot deny the fact that the causes of the illness of the deceased are still unknown and may embrace such diverse origins which
even the medical sciences cannot tell with reasonable certainty. Indeed, scientists attending the World Genetic Congress in New Delhi,
India, have warned that about 25,000 chemicals used around the world could potentially cause cancer, and Lawrence Fishbein of the
U.S. National Center for Toxilogical Research pointed out that humans were daily exposed to literally hundreds of chemical agents via
air, food, medication, both in their industrial home and environments (Evening Post, December 16, 1983, p. 3, cols. 2-3).
The theory of increased risk is applicable in the instant case. WE had the occasion to interpret the theory of increased risk in the case

of Cristobal v. Employees Compensation Commission (103 SCRA, 336-337, L-49280, February 26, 1981):

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"To establish compensability under the said theory, the claimant must show proof of work-connection. Impliedly, the degree of proof
required is merely substantial evidence, which means such relevant evidence to support a decision (Ang Tibay v. The Court of
Industrial Relations and National Labor Union, Inc., 69 Phil. 635) or clear and convincing evidence. In this connection, it must be
pointed out that the strict rules of evidence are not applicable in claims for compensation. Respondents however insist on evidence
which would establish direct causal relation between the disease rectal cancer and the employment of the deceased. Such a strict
requirement which even medical experts cannot support considering the uncertainty of the nature of the disease would negate the
principle of the liberality in the matter of evidence, Apparently, what the law merely requires is a reasonable work-connection and not
a direct causal relation. This kind of interpretation gives meaning and substance to the liberal and compassionate spirit of the law as
embodied in Article 4 of the new Labor Code which states that all doubts in the implementation of the provisions of this Code,
including its implementing rules and regulations shall be resolved in favor of labor.
". . . As the agents charged by the law to implement the social justice guarantee secured by both 1935 and 1973 Constitutions,
respondents should adopt a more liberal attitude in deciding claims for compensation especially when there is some basis in the facts
inferring a work-connection. This should not be confused with the presumption of compensability and theory of aggravation under the
Workmens Compensation Act. While these doctrines may have been abandoned under the New Labor Code (the constitutionality of
such abrogation may still be challenged), it is significant that the liberality of the law, in general, still subsists. . . ." (Emphasis
supplied)
The sweeping conclusion of the respondent Employees Compensation Commission to the effect that the cause of the bronchogenic
carcinoma of the deceased was due to his being a smoker and not in any manner connected with his work as a soldier, is not in
accordance with medical authorities nor with the facts on record. No certitude can arise from a position of uncertainty.
WE are dealing with possibilities and medical authorities have given credence to the stand of the petitioner that her husband developed
bronchogenic carcinoma while working as a soldier with the Philippine Constabulary. The records show that when the deceased
enlisted with the Philippine Constabulary in 1969, he was found to be physically and mentally healthy. A soldiers life is a hard one.
As a soldier assigned to field duty, exposure to the elements, dust and dirt, fatigue and lack of sleep and rest is a common occurrence.
Exposure to chemicals while handling ammunition and firearms cannot be discounted. WE take note also of the fact that he became
the security of one Dr. Emilio Cordero of Anulung, Cagayan, and he always accompanied the doctor wherever the latter went (p. 26,
rec.). Such assignment invariably involved irregular working hours, exposure to different working conditions, and body fatigue, not to
mention psychological stress and other similar factors which influenced the evolution of his ailment.
WE held in the case of San Valentin v. Employees Compensation Commission (118 SCRA 160) that:
"x

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"In compensation cases. strict rules of evidence are not applicable. A reasonable work-connection is all that is required or that the risk
of contracting the disease is increased by the working conditions."
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In the case of Dator v. Employees Compensation Commission

(L-57416, January 30, 1982), WE held the death of Wenifreda Dator, a librarian for 15 years, caused by bronchogenic carcinoma
compensable. Being a librarian, "she was exposed to duty books and other deleterious substances in the library under unsanitary
conditions" (Ibid., 632). WE do not see any reason to depart from the ruling in the said case, considering that a soldiers duties and
environment are more hazardous.
This is in line with the avowed policy of the State as mandated by the Constitution (Article II, Section 9) and restated in the new Labor
Code (Article 4), to give maximum aid and protection to labor.
WHEREFORE, THE DECISION APPEALED FROM IS HEREBY SET ASIDE AND THE GOVERNMENT SERVICE
INSURANCE SYSTEM IS HEREBY ORDERED.
1. TO PAY THE PETITIONER THE SUM OF TWELVE THOUSAND (P12,000.00) PESOS AS DEATH BENEFITS;
2. TO REIMBURSE THE PETITIONERs MEDICAL AND HOSPITAL EXPENSES DULY SUPPORTED BY PROPER
RECEIPTS; AND
3. TO PAY THE PETITIONER THE SUM OF ONE THOUSAND TWO HUNDRED (P1,200.00) PESOS FOR BURIAL
EXPENSES.
SO ORDERED.