BERNARDO V NLRC (FAR EAST BANK AND TRUST COMPANY)

310 SCRA 186

PANGANIBAN; July 12, 1999
NATURE
Petition for Certiorari of June 20, 1995 Decision of NLRC which affirmed the August, 22 1994
ruling of Labor Arbiter Linsangan and August 4, 1995 Resolution of NLRC denying the MFR
FACTS
- Complainants numbering 43 are deaf-mutes who were hired on various periods from 1988 to
1993 by respondent Far East Bank and Trust Co. as Money Sorters and Counters through a
uniformly worded agreement called "Employment Contract for Handicapped Workers".
In compliance with Article 80 of the Labor Code of the Philippines as amended, the BANK and the
EMPLOYEE have entered into this Employment Contract as follows:
1. The BANK agrees to employ and train the EMPLOYEE, and the EMPLOYEE agrees to diligently
and faithfully work with the BANK, as Money Sorter and Counter.
2. The EMPLOYEE shall perform among others, the following duties and responsibilities:
i. Sort out bills according to color;
ii. Count each denomination per hundred, either manually or with the aid of a counting machine;
iii. Wrap and label bills per hundred;
iv. Put the wrapped bills into bundles; and
v. Submit bundled bills to the bank teller for verification.
3. The EMPLOYEE shall undergo a training period of one (1) month, after which the BANK shall
determine whether or not he/she should be allowed to finish the remaining term of this Contract.
4. The EMPLOYEE shall be entitled to an initial compensation of P118.00 per day, subject to
adjustment in the sole judgment of the BANK, payable every 15th and end of the month
5. The regular work schedule of the EMPLOYEE shall be five (5) days per week, from Mondays
thru Fridays, at eight (8) hours a day. The EMPLOYEE may be required to perform overtime work
as circumstance may warrant, for which overtime work he/she [shall] be paid an additional
compensation of 125% of his daily rate if performed during ordinary days and 130% if performed
during Saturday or [a] rest day.
6. The EMPLOYEE shall likewise be entitled to the following benefits:
i. Proportionate 13th month pay based on his basic daily wage.
ii. Five (5) days incentive leave.
iii. SSS premium payment.
7. The EMPLOYEE binds himself/herself to abide [by] and comply with all the BANK Rules and
Regulations and Policies, and to conduct himself/herself in a manner expected of all employees
of the BANK.
8. The EMPLOYEE acknowledges the fact that he/she had been employed under a special
employment program of the BANK, for which reason the standard hiring requirements of the
BANK were not applied in his/her case.
9. The Employment Contract shall be for a period of six (6) months unless earlier terminated by
the BANK for any just or reasonable cause.
- DEAF-MUTES HIRED
> 1988 - 2
> 1989 2
> 1990 19
> 1991 6
> 1992 6
> 1993 21
TOTAL: 56 (last: Thelma Malindoy who was employed in 1992 and whose contract expired on July
1993)
- FAR EAST states:

> disclaimed that BERNARDO ET AL were regular employees AND that they are a special class of
workers the hearing impaired employees
> BERNARDO ET AL were hired temporarily under a special employment arrangement which was
a result of overtures made by some civic and political personalities to the Bank
> BERNARDO ET AL were hired due to "pakiusap" which must be considered in the light of the
context career and working environment which is to maintain and strengthen a corps of
professionals trained and qualified officers and regular employees who are baccalaureate degree
holders from excellent schools which is an unbending policy in the hiring of regular employees
> training continues so that the regular employee grows in the corporate ladder; that the idea of
hiring handicapped workers was acceptable to them only on a special arrangement basis
> counting and sorting of money are tellering works which were always logically and naturally
part and parcel of the tellers' normal functions
> the tellers themselves already did the sorting and counting chore as a regular feature and
integral part of their duties > through the "pakiusap" of Arturo Borjal, the tellers were relieved of
this task of counting and sorting bills in favor of deaf-mutes without creating new positions as
there is no position either in FAR EAST or any other Bank in the Philippines which deals with
purely counting and sorting of bills in banking operations.
- NLRC: affirmed ruling of the labor arbiter that BERNARDO ET AL could not be deemed regular
employees under A280 LC; gave credence to conclusion that BERNARDO ET AL were hired as an
accommodation to recommendation of civic oriented personalities; the terms of the contract
shall be the law between the parties; AND Magna Carta for Disabled Persons is not applicable,
"considering the prevailing circumstances/milieu of the case."
ISSUES
WON NLRC is guilty of grave abuse of discretion in holding that
1. money sorters and counters working in a bank are not regular employees
2. employment contracts signed and renewed by the petitioners, which provide for a period of 6
months, were valid
3. not applying the provisions of the Magna Carta for the Disabled (RA 7277), on proscription
against discrimination against disabled persons.
HELD
Preliminary Matter
- Propriety of Certiorari: the Court, as a rule, does not review the factual findings of public
respondents in a certiorari proceeding. In resolving whether the petitioners have become regular
employees, SC shall not change the facts found by NLRC. SCs task is merely to determine
whether the NLRC committed grave abuse of discretion in applying the law to the established
facts
1. YES. Only the employees, who worked for more than 6 months and whose contracts were
renewed are deemed regular. Hence, their dismissal from employment was illegal.
Reasoning
- According to FAR EAST, the employment contracts were prepared in accordance with A80 LC,
which provides
Art. 80. Employment agreement. Any employer who employs handicapped workers shall enter
into an employment agreement with them, which agreement shall include:
(a) The names and addresses of the handicapped workers to be employed;
(b) The rate to be paid the handicapped workers which shall be not less than seventy five (75%)
per cent of the applicable legal minimum wage;
(c) The duration of employment period; and
(d) The work to be performed by handicapped workers.
The employment agreement shall be subject to inspection by the Secretary of Labor or his duly
authorized representatives.

- However, succeeding events and the enactment of RA No. 7277 (the Magna Carta for Disabled
Persons) justify the application of A280 LC.
- FAR EAST entered into contract with a total of 56 handicapped workers and renewed the
contracts of 37 of them. In fact, two of them worked from 1988 to 1993. Verily, the renewal of
the contracts of the handicapped workers and the hiring of others lead to the conclusion that
their tasks were beneficial and necessary to the bank. More important, these facts show that
they were qualified to perform the responsibilities of their positions. In other words, their
disability did not render them unqualified or unfit for the tasks assigned to them.
- Magna Carta for Disabled Persons mandates that a qualified disabled employee should be given
the same terms and conditions of employment as a qualified able-bodied person.
- Section 5 of the Magna Carta provides:
Sec. 5. Equal Opportunity for Employment. No disabled person shall be denied access to
opportunities for suitable employment. A qualified disabled employee shall be subject to the
same terms and conditions of employment and the same compensation, privileges, benefits,
fringe benefits, incentives or allowances as a qualified able bodied person.
- Since the Magna Carta accords them the rights of qualified able-bodied persons, they are thus
covered by Article 280 of the Labor Code, which provides:
Art. 280. Regular and Casual Employment. The provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreement of the parties, an employment shall be
deemed to be regular where the employee has been engaged to perform activities which are
usually necessary or desirable in the usual business or trade of the employer, except where the
employment has been fixed for a specific project or undertaking the completion or termination of
which has been determined at the time of the engagement of the employee or where the work or
services to be performed is seasonal in nature and the employment is for the duration of the
season.
An employment shall be deemed to be casual if it is not covered by the preceding paragraph:
Provided, That, any employee who has rendered at least one year of service, whether such
service is continuous or broken, shall be considered as regular employee with respect to the
activity in which he is employed and his employment shall continue while such activity exists.
- The test of whether an employee is regular
> De Leon v. NLRC: The primary standard, therefore, of determining regular employment is the
reasonable connection between the particular activity performed by the employee in relation to
the usual trade or business of the employer. The test is whether the former is usually necessary
or desirable in the usual business or trade of the employer. The connection can be determined by
considering the nature of the work performed and its relation to the scheme of the particular
business or trade in its entirety. Also if the employee has been performing the job for at least one
year, even if the performance is not continuous and merely intermittent, the law deems repeated
and continuing need for its performance as sufficient evidence of the necessity if not
indispensibility of that activity to the business. Hence, the employment is considered regular, but
only with respect to such activity, and while such activity exist.
- The task of counting and sorting bills is necessary and desirable to the business of respondent
bank. With the exception of sixteen of them, BERNARDO ET AL performed these tasks for more
than six months.
- As held by the Court, "Articles 280 and 281 of the Labor Code put an end to the pernicious
practice of making permanent casuals of our lowly employees by the simple expedient of
extending to them probationary appointments, ad infinitum." The contract signed by petitioners
is akin to a probationary employment, during which the bank determined the employees' fitness
for the job. When the bank renewed the contract after the lapse of the six-month probationary
period, the employees thereby became regular employees. No employer is allowed to determine
indefinitely the fitness of its employees.

- As regular employees, the 27 petitioners are entitled to security of tenure; that is, their services
may be terminated only for a just or authorized cause. Therefore, when FAR EAST failed to show
such cause, they are deemed illegally dismissed and entitled to back wages and reinstatement
without loss of seniority rights and other privileges. Considering that the job of money sorting is
no longer available because it has been assigned back to the tellers to whom it originally
belonged, petitioners are hereby awarded separation pay in lieu of reinstatement.
2. YES
- Brent Ruling, which upheld the validity of an employment contract with a fixed term, is not
applicable. The term limit in the contract was premised on the fact that the petitioners were
disabled, and that the bank had to determine their fitness for the position. Its validity is based on
A80 LC. Petitioners proved themselves to be qualified disabled persons who, under the Magna
Carta for Disabled Persons, are entitled to terms and conditions of employment enjoyed by
qualified able-bodied individuals; hence, A80 does not apply.
- Moreover, it must be emphasized that a contract of employment is impressed with public
interest. Provisions of applicable statutes are deemed written into the contract, and the "parties
are not at liberty to insulate themselves and their relationships from the impact of labor laws and
regulations by simply contracting with each other." 23 Clearly, the agreement of the parties
regarding the period of employment cannot prevail over the provisions of the Magna Carta for
Disabled Persons, which mandate that petitioners must be treated as qualified able-bodied
employees.
- Because sorting is done in the nighttime, FAR EAST contended that this task "could not be done
by deaf mutes because of their physical limitations as it is very risky for them to travel at night."
But the court found no basis in this because traveling at night involves risks to handicapped and
able-bodied persons alike
- Datu v. NLRC: the determination of whether employment is casual or regular does not depend
on the will or word of the employer, and the procedure of hiring . . . but on the nature of the
activities performed by the employee, and to some extent, the length of performance and its
continued existence.
- The well-settled rule is that the character of employment is determined not by stipulations in
the contract, but by the nature of the work performed. Otherwise, no employee can become
regular by the simple expedient of incorporating this condition in the contract of employment.
> Romares v. NLRC: A280 was emplaced in our statute books to prevent the circumvention of the
employee's right to be secure in his tenure by indiscriminately and completely ruling out all
written and oral agreements inconsistent with the concept of regular employment defined
therein. Where an employee has been engaged to perform activities which are usually necessary
or desirable in the usual business of the employer, such employee is deemed a regular employee
and is entitled to security of tenure notwithstanding the contrary provisions of his contract of
employment.
3. YES
- The noble objectives of Magna Carta for Disabled Persons are not based merely on charity or
accommodation, but on justice and the equal treatment of qualified persons, disabled or not. The
Court believes, that, after showing their fitness for the work assigned to them, they should be
treated and granted the same rights like any other regular employees.
Disposition Petition is hereby GRANTED. The June 20, 1995 Decision and the August 4, 1995
Resolution of the NLRC are REVERSED and SET ASIDE. Respondent Far East Bank and Trust
Company is hereby ORDERED to pay back wages and separation pay to each of the following
twenty-seven (27) petitioners
BATONG BUHAY GOLDMINES V DELA SERNA
PURISIMA, August 6, 1999

FACTS
- Employees filed a complaint against Batong Buhay for: unpaid salaries from March 16, 1987 to
present, unpaid and ECOLA differentials under Wage Order Nos. 2 and 5, unpaid 13th months pay
for 1985 and 1986, and upaid vacation/sick/compensatory leave benefits.
- Labor Standards and Welfare Officers & Regional Director: Batong Buhay must pay Ty et al.
P4,818,746.40
- Regional Director directed Batong Buhay to put up a cash or surety bond otherwise a writ of
execution will be issued.
- The Special Sheriff seized three units of Peterbuilt trucks and then sold the same by public
auction. Various materials and motor vehicles were also seized on different dates and sold at
public auction.
- Batong Buhay finally posted a supersedeas bond and appealed the Order contending that the
Regional Director had no jurisdiction over the case.
- Undersec dela Serna upheld the jurisdiction of the Regional Director and annulled all the
auction sales conducted by Special Sheriff. MR denied.
- Motion for Intervention was filed by MFT Corporation and Salter Holdings Pty., Ltd. For exclusion
from annulment of the properties sold at the auction sale. Granted. MR denied.
ISSUES
1. WON the Regional Director has jurisdiction over the complaint filed by the employees of
BBGMI
2. WON the auction sales conducted by the said Special Sheriff are valid
HELD
1. YES
- The subject labor standards case of the petition arose from the visitorial and enforcement
powers by the Regional Director of DOLE.
- Labor standards refers to the minimum requirements prescribed by existing laws, rules and
regulations relating to wages, hours of work, cost of living allowance and other monetary and
welfare benefits, including occupational, safety and health standards. Labor standards cases are
governed by Article 128(b) of the Labor Code.
- Even in the absence of E.O. 111 , Regional Directors already had enforcement powers over
money claims, effective under P.D. 850, issued on December 16, 1975, which transferred labor
standards cases from the arbitration system to the enforcement system.
- E.O. No. 111 was issued on December 24, 1986 or three(3) months after the promulgation of
the Secretary of Labor's decision upholding private respondents' salary differentials and ECOLAs
on September 24, 1986. The amendment of the visitorial and enforcement powers of the
Regional Director (Article 128(b)) by said E.O. 111 reflects the intention enunciated in Policy
Instructions Nos. 6 and 37 to empower the Regional Directors to resolve uncontested money
claims in cases where an employer-employee relationship still exists. This intention must be
given weight and entitled to great respect.
- The Court would have ruled differently had the petitioner shown that subject labor standards
case is within the purview of the exception clause in Article 128 (b) of the Labor Code. Said
provision requires the concurrence of the following elements in order to divest the Regional
Director or his representatives of jurisdiction, to wit: (a) that the petitioner (employer) contests
the findings of the labor regulations officer and raises issues thereon; (b) that in order to resolve
such issues, there is a need to examine evidentiary matters; and (c) that such matters are not
verifiable in the normal course of inspection.

- Petitioner's refusal to allow the Labor Standards and Welfare Officers to conduct inspection in
the premises of their head office and the failure to file their position paper is equivalent to a
waiver of its right to contest the claims of the employees.
- This involves a labor standards case and it is in keeping with the law that "the worker need not
litigate to get what legally belongs to him, for the whole enforcement machinery of the
Department of Labor exists to insure its expeditious delivery to him free of charge.
- The present law, RA 7730, can be considered a curative statute to reinforce the conclusion that
the Regional Director has jurisdiction over the present labor standards case.
2. NO
- As a general rule, findings of fact and conclusion of law arrived at by quasi-judicial agencies are
not to be disturbed absent any showing of grave abuse of discretion tainting the same.
- There was grave abuse of discretion when the Undersec, without any evidentiary support,
adjudged such prices as "scandalously low". He merely relied on the self-serving assertion by the
petitioner that the value of the auctioned properties was more than the price bid.
- The sales are null and void since on the properties of petitioner involved was constituted a
mortgage between petitioner and the Development Bank of the Philippines
JOSE SONZA vs. ABS-CBN BROADCASTING CORPORATION
[G.R. No. 138051. June 10, 2004]
Facts:
In May 1994, ABS-CBN signed an agreement with the Mel and Jay Management and Development Corporation
(MJMDC). ABS-CBN was represented by its corporate officers while MJMDC was represented by Sonza, as President
and general manager, and Tiangco as its EVP and treasurer. Referred to in the agreement as agent, MJMDC agreed to
provide Sonzas services exclusively to ABS-CBN as talent for radio and television. ABS-CBN agreed to pay Sonza a
monthly talent fee of P310, 000 for the first year and P317, 000 for the second and third year.
On April 1996, Sonza wrote a letter to ABS-CBN where he irrevocably resigned in view of the recent events concerning
his program and career. After the said letter, Sonza filed with the Department of Labor and Employment a complaint
alleging that ABS-CBN did not pay his salaries, separation pay, service incentive pay,13 th month pay, signing bonus, travel
allowance and amounts under the Employees Stock Option Plan (ESOP). ABS-CBN contended that no employeeemployer relationship existed between the parties. However, ABS-CBN continued to remit Sonzas monthly talent fees but
opened another account for the same purpose.
The Labor Arbiter dismissed the complaint and found that there is no employee-employer relationship. NLRC affirmed the
decision of the Labor Arbiter. CA also affirmed the decision of NLRC.
Issue:
Whether or not there was employer-employee relationship between the parties.
SC Ruling:
Case law has consistently held that the elements of an employee-employer relationship are selection and engagement of
the employee, the payment of wages, the power of dismissal and the employers power to control the employee on the
means and methods by which the work is accomplished. The last element, the so-called "control test", is the most
important element.
Sonzas services to co-host its television and radio programs are because of his peculiar talents, skills and celebrity
status. Independent contractors often present themselves to possess unique skills, expertise or talent to distinguish them
from ordinary employees. The specific selection and hiring of SONZA, because of his unique skills, talent and celebrity
status not possessed by ordinary employees, is a circumstance indicative, but not conclusive, of an independent
contractual relationship. All the talent fees and benefits paid to SONZA were the result of negotiations that led to the
Agreement. For violation of any provision of the Agreement, either party may terminate their relationship. Applying the
control test to the present case, we find that SONZA is not an employee but an independent contractor.
The control test is the most important test our courts apply in distinguishing an employee from an independent contractor.
This test is based on the extent of control the hirer exercises over a worker. The greater the supervision and control the
hirer exercises, the more likely the worker is deemed an employee. The converse holds true as well the less control the
hirer exercises, the more likely the worker is considered an independent contractor. To perform his work, SONZA only
needed his skills and talent. How SONZA delivered his lines, appeared on television, and sounded on radio were outside
ABS-CBNs control. ABS-CBN did not instruct SONZA how to perform his job. ABS-CBN merely reserved the right to
modify the program format and airtime schedule "for more effective programming." ABS-CBNs sole concern was the
quality of the shows and their standing in the ratings.

Clearly, ABS-CBN did not exercise control over the means and methods of performance of Sonzas work. A radio
broadcast specialist who works under minimal supervision is an independent contractor. Sonzas work as television and
radio program host required special skills and talent, which SONZA admittedly possesses.
ABS-CBN claims that there exists a prevailing practice in the broadcast and entertainment industries to treat talents like
Sonza as independent contractors. The right of labor to security of tenure as guaranteed in the Constitution arises only if
there is an employer-employee relationship under labor laws. Individuals with special skills, expertise or talent enjoy the
freedom to offer their services as independent contractors. The right to life and livelihood guarantees this freedom to
contract as independent contractors. The right of labor to security of tenure cannot operate to deprive an individual,
possessed with special skills, expertise and talent, of his right to contract as an independent contractor.

San Juan de Dios Hospital Employees Association-AFW vs. NLRC

[282 SCRA 316 (1997)]
Facts:
Petitioners, the rank-and-file employee-union officers and members of San Juan De Dios Hospital
Employees Association sent a four (4)-page letter with attached support signatures requesting
and pleading for the expeditious implementation and payment by respondent Juan De Dios
Hospital of the 40 HOURS/5-DAY WORKWEEK with compensable weekly two (2) days off provided
for by Republic Act 5901 as clarified for enforcement by the Secretary of Labors Policy
Instructions No. 54 dated April 12, 1988.
Respondent hospital failed to give a favorable response; thus, petitioners filed a complaint
regarding their claims for statutory benefits under the above-cited law and policy issuance. On
February 26, 1992, the Labor Arbiter dismissed the complaint. Petitioners appealed before public
respondent National Labor Relations Commission which affirmed the Labor Arbiters decision.
Issue:
Whether Policy Instructions No. 54 issued by then Labor Secretary (now Senator) Franklin M.
Drilon is valid or not.
SC Ruling:
The policy instruction is not valid. This issuance clarifies the enforcement policy of this
Department on the working hours and compensation of personnel employed by hospital/clinics
with a bed capacity of 100 or more and those located in cities and municipalities with a
population of one million or more.
Reliance on Republic Act No. 5901, however, is misplaced for the said statute, as correctly ruled
by respondent NLRC, and has long been repealed with the passage of the Labor Code on May 1,
1974. Article 302 of which explicitly provide: All labor laws not adopted as part of this Code
either directly or by reference are hereby repealed. All provisions of existing laws, orders,
decrees, rules and regulations inconsistent herewith are likewise repealed. Accordingly, only
Article 83 of the Labor Code which appears to have substantially incorporated or reproduced the
basic provisions of Republic Act No. 5901 may support Policy Instructions No. 54 on which the
latters validity may be gauged. Article 83 of the Labor Code states: Normal Hours of Work. -The normal hours of work of any employee shall not exceed eight (8) hours a day.
Health personnel in cities and municipalities with a population of at least one million (1,000,000)
or in hospitals and clinics with a bed capacity of at least one hundred (100) shall hold regular
office hours for eight (8) hours a day, for five (5) days a week, exclusive of time for meals, except
where the exigencies of the service require that such personnel work for six (6) days or fortyeight (48) hours, in which case they shall be entitled to an additional compensation of at least
thirty per cent (30%) of their regular wage for work on the sixth day. For purposes of this Article,
health personnel shall include: resident physicians, nurses, nutritionists, dietitians,
pharmacists, social workers, laboratory technicians, paramedical technicians, psychologists,
midwives, attendants and all other hospital or clinic personnel.
A cursory reading of Article 83 of the Labor Code betrays petitioners position that hospital
employees are entitled to a full weekly salary with paid two (2) days off if they have
completed the 40-hour/5-day workweek. What Article 83 merely provides are: (1) the regular

office hour of eight hours a day, five days per week for health personnel, and (2) where the
exigencies of service require that health personnel work for six days or forty-eight hours then
such health personnel shall be entitled to an additional compensation of at least thirty percent of
their regular wage for work on the sixth day. There is nothing in the law that supports then
Secretary of Labors assertion that personnel in subject hospitals and clinics are entitled to a full
weekly wage for seven (7) days if they have completed the 40-hour/5-day workweek in any given
workweek. Needless to say, the Secretary of Labor exceeded his authority by including a two
days off with pay in contravention of the clear mandate of the statute. Administrative
interpretation of the law is at best merely advisory, and the Court will not hesitate to strike down
an administrative interpretation that deviates from the provision of the statute.
Philippine Airlines, Inc., vs. NLRC
[302 SCRA 582 (1999)]
Facts:
Private respondent was employed as flight surgeon at petitioner company. He was assigned at
the PAL Medical Clinic at Nichols and was on duty from 4:00 in the afternoon until 12:00
midnight. On February 17, 1994, at around 7:00 in the evening, private respondent left the clinic
to have his dinner at his residence, which was about five-minute drive away. A few minutes later,
the clinic received an emergency call from the PAL Cargo Services.
One of its employees, Mr. Manuel Acosta, had suffered a heart attack. The nurse on duty, Mr.
Merlino Eusebio, called private respondent at home to inform him of the emergency. The patient
arrived at the clinic at 7:50 in the evening and Mr. Eusebio immediately rushed him to the
hospital.
When private respondent reached the clinic at around 7:51 in the evening, Mr. Eusebio had
already left with the patient. Mr. Acosta died the following day. Upon learning about the incident,
PAL Medical Director Dr. Godofredo B. Banzon ordered the Chief Flight Surgeon to conduct an
investigation. The Chief Flight Surgeon required private respondent to explain why no
disciplinary sanction should be taken against him.
In his explanation, private respondent asserted that he was entitled to a thirty-minute meal
break; that he immediately left his residence upon being informed by Mr. Eusebio about the
emergency and he arrived at the clinic a few minutes later; that Mr. Eusebio panicked and
brought the patient to the hospital without waiting for him.
Finding private respondents explanation unacceptable, the management charged private
respondent with abandonment of post while on duty. He was given ten days to submit a written
answer to the administrative charge.
In his answer, private respondent reiterated the assertions in his previous explanation. He
further denied that he abandoned his post on February 17, 1994. He said that he only left the
clinic to have his dinner at home.
In fact, he returned to the clinic at 7:51 in the evening upon being informed of the emergency.
After evaluating the charge as well as the answer of private respondent, petitioner company
decided to suspend private respondent for three months effective December 16, 1994.
Issue:
Whether or not being a full-time employee is obliged to stay in the company premises for not
less than eight (8) hours. Hence, he may not leave the company premises during such time, even
to take his meals.
SC Ruling:
The Court does not agree with the petitioner. Articles 83 and 85 of the Labor Code read: Normal
hours of workThe normal hours of work of any employee shall not exceed eight (8) hours a day.
Health personnel in cities and municipalities with a population of at least one million (1,000,000)
or in hospitals and clinics with a bed capacity of at least one hundred (100) shall hold regular
office hours for eight (8) hours a day, for five (5) days a week, exclusive of time for meals, except
where the exigencies of the service require that such personnel work for six (6) days or forty-

eight (48) hours, in which case they shall be entitled to an additional compensation of at least
thirty per cent (30%) of their regular wage for work on the sixth day. For purposes of this Article,
health personnel shall include: resident physicians, nurses, nutritionists, dieticians,
pharmacists, social workers, laboratory technicians, paramedical technicians, psychologists,
midwives, attendants and all other hospital or clinic personnel.
Art. 85. Meal periods.Subject to such regulations as the Secretary of Labor may prescribe, it
shall be the duty of every employer to give his employees not less than sixty (60) minutes timeoff for their regular meals.
Section 7, Rule I, Book III of the Omnibus Rules Implementing the Labor Code further states:
Sec. 7. Meal and Rest Periods.Every employer shall give his employees, regardless of sex, not
less than one (1) hour time-off for regular meals, except in the following cases when a meal
period of not less than twenty (20) minutes may be given by the employer provided that such
shorter meal period is credited as compensable hours worked of the employee;
(a) Where the work is non-manual work in nature or does not involve strenuous physical exertion;
(b) Where the establishment regularly operates not less than sixteen hours a day;
(c) In cases of actual or impending emergencies or there is urgent work to be performed on
machineries, equipment or installations to avoid serious loss which the employer would
otherwise suffer; and
(d) Where the work is necessary to prevent serious loss of perishable goods.
Rest periods or coffee breaks running from five (5) to twenty (20) minutes shall be considered as
compensable working time.
Thus, the eight-hour work period does not include the meal break. Nowhere in the law may it be
inferred that employees must take their meals within the company premises. Employees are not
prohibited from going out of the premises as long as they return to their posts on time. Private
respondents act of going home to take his dinner does not constitute abandonment
Asian Transmission Corporation vs. Court of Appeals
[425 SCRA 478 (2004).]
Facts:
The Department of Labor and Employment (DOLE) issued an Explanatory Bulletin dated March
11, 1993 wherein it clarified that employees are entitled to 200% of their basic wage on April 9,
1993, whether unworked, which apart from being Good Friday is also Araw ng Kagitingan, both
legal holidays.
The bulletin reads: "On the correct payment of holiday compensation on April 9, 1993 which
apart from being Good Friday is also Araw ng Kagitingan, i.e., two regular holidays falling on the
same day, this Department is of the view that the covered employees are entitled to at least two
hundred percent (200%) of their basic wage even if said holiday is unworked. The first 100%
represents the payment of holiday pay on April 9, 1993 as Good Friday and the second 100% is
the payment of holiday pay for the same date as Araw ng Kagitingan.
Said bulletin was reproduced on January 23, 1998, when April 9, 1998 was both Maundy
Thursday and Araw ng Kagitingan. Despite the explanatory bulletin, [Asian Transmission
Corporation opted to pay its daily paid employees only 100% of their basic pay on April 9, 1998.
Respondent Bisig ng Asian Transmission Labor Union (BATLU) protested.
In accordance with Step 6 of the grievance procedure of the Collective Bargaining Agreement
(CBA) existing between petitioner and BATLU, the controversy was submitted for voluntary
arbitration. On July 31, 1998, the Office of the Voluntary Arbitrator rendered a decision directing
petitioner to pay its covered employees "200% and not just 100% of their regular daily wages for
the unworked April 9, 1998 which covers two regular holidays, namely, Araw ng Kagitingan and
Maundy Thursday."
Issue:
Whether or not the employees are entitled to the computation embodied in the bulletin
clarification.

SC Ruling:
The employees are entitled to the computation given in the bulletin clarification.
Subject of interpretation in the case at bar is Article 94 of the Labor Code which reads:
Right
to holiday pay. (a) Every worker shall be paid his regular daily wage during regular holidays,
except in retail and service establishments regularly employing less than ten (10) workers; (b)
The employer may require an employee to work on any holiday but such employee shall be paid
a compensation equivalent to twice his regular rate; and (c) As used in this Article, "holiday"
includes: New Year's Day, Maundy Thursday, Good Friday, the ninth of April, the first of May, the
twelfth of June, the fourth of July, the thirtieth of November, the twenty-fifth and thirtieth of
December and the day designated by law for holding a general election, which was amended by
Executive Order No. 203 issued on June 30, 1987, such that the regular holidays are now:
1.
New Year's Day
January 1
2.
Maundy Thursday Movable Date
3.
Good Friday
Movable Date
4.
Araw ng KagitinganApril 9 (Bataan and Corregidor Day)
5.
Labor Day
May 1
6.
Independence Day June 12
7.
National Heroes Day
Last Sunday of August
8.
Bonifacio Day
November 30
9.
Christmas Day
December 25
10.
Rizal Day
December 30
The Court agrees with the voluntary arbitrator. The Voluntary Arbitrator held that Article 94 of
the Labor Code provides for holiday pay for every regular holiday, the computation of which is
determined by a legal formula which is not changed by the fact that there are two holidays
falling on one day, like on April 9, 1998 when it was Araw ng Kagitingan and at the same time
was Maundy Thursday; and that that the law, as amended, enumerates ten regular holidays for
every year should not be interpreted as authorizing a reduction to nine the number of paid
regular holidays "just because April 9 (Araw ng Kagitingan) in certain years, like 1993 and 1998,
is also Holy Friday or Maundy Thursday."
Holiday pay is a legislated benefit enacted as part of the Constitutional imperative that the State
shall afford protection to labor. Its purpose is not merely "to prevent diminution of the monthly
income of the workers on account of work interruptions. In other words, although the worker is
forced to take a rest, he earns what he should earn, that is, his holiday pay." 8 It is also intended
to enable the worker to participate in the national celebrations held during the days identified as
with great historical and cultural significance.
Independence Day (June 12), Araw ng Kagitingan (April 9), National Heroes Day (last Sunday of
August), Bonifacio Day (November 30) and Rizal Day (December 30) were declared national
holidays to afford Filipinos with a recurring opportunity to commemorate the heroism of the
Filipino people, promote national identity, and deepen the spirit of patriotism.
Labor Day (May 1) is a day traditionally reserved to celebrate the contributions of the working
class to the development of the nation, while the religious holidays designated in Executive
Order No. 203 allow the worker to celebrate his faith with his family.
As reflected above, Art. 94 of the Labor Code, as amended, afford a worker the enjoyment of ten
paid regular holidays. The provision is mandatory, regardless of whether an employee is paid on
a monthly or daily basis. Unlike a bonus, which is a management prerogative, holiday pay is a
statutory benefit demandable under the law. Since a worker is entitled to the enjoyment of ten
paid regular holidays, the fact that two holidays fall on the same date should not operate to
reduce to nine the ten holiday pay benefits a worker is entitled to receive.