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AutoBusTransportSystemsIncvsBautista:156367:May16,2005:J.ChicoNazario:SecondDivision:Decision

SECONDDIVISION

[G.R.No.156367.May16,2005]

AUTO BUS TRANSPORT SYSTEMS, INC., petitioner, vs.ANTONIO BAUTISTA,

respondent.
DECISION
CHICONAZARIO,J.:
[1]

[2]

Before Us is a Petition for Review on Certiorari assailing the Decision and Resolution of the
[3]

Court of Appeals affirming the Decision of the National Labor Relations Commission (NLRC). The
NLRCrulingmodifiedtheDecisionoftheLaborArbiter(findingrespondententitledtotheawardof13th
monthpayandserviceincentiveleavepay)bydeletingtheawardof13thmonthpaytorespondent.
THEFACTS
Since 24 May 1995, respondent Antonio Bautista has been employed by petitioner Auto Bus
TransportSystems,Inc.(Autobus),asdriverconductorwithtravelroutesManilaTuguegaraoviaBaguio,
Baguio Tuguegarao via Manila and ManilaTabuk via Baguio. Respondent was paid on commission
basis,sevenpercent(7%)ofthetotalgrossincomepertravel,onatwiceamonthbasis.
On03January2000,whilerespondentwasdrivingAutobusNo.114alongSta.Fe,NuevaVizcaya,
the bus he was driving accidentally bumped the rear portion of Autobus No. 124, as the latter vehicle
suddenlystoppedatasharpcurvewithoutgivinganywarning.
Respondentaverredthattheaccidenthappenedbecausehewascompelledbythemanagementto
go back to Roxas, Isabela, although he had not slept for almost twentyfour (24) hours, as he had just
arrivedinManilafromRoxas,Isabela.Respondentfurtherallegedthathewasnotallowedtoworkuntilhe
fully paid the amount of P75,551.50, representing thirty percent (30%) of the cost of repair of the
damaged buses and that despite respondents pleas for reconsideration, the same was ignored by
management.Afteramonth,managementsenthimaletteroftermination.
Thus, on 02 February 2000, respondent instituted a Complaint for Illegal Dismissal with Money
Claimsfornonpaymentof13thmonthpayandserviceincentiveleavepayagainstAutobus.
Petitioner, on the other hand, maintained that respondents employment was replete with offenses
involving reckless imprudence, gross negligence, and dishonesty. To support its claim, petitioner
presented copies of letters, memos, irregularity reports, and warrants of arrest pertaining to several
incidentswhereinrespondentwasinvolved.
Furthermore, petitioner avers that in the exercise of its management prerogative, respondents
employment was terminated only after the latter was provided with an opportunity to explain his side
regardingtheaccidenton03January2000.

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On29September2000,basedonthepleadingsandsupportingevidencepresentedbytheparties,
[4]

LaborArbiterMonroeC.TabinganpromulgatedaDecision, thedispositiveportionofwhichreads:
WHEREFORE,allpremisesconsidered,itisherebyfoundthatthecomplaintforIllegalDismissalhasnolegtostandon.
ItisherebyorderedDISMISSED,asitisherebyDISMISSED.
However,stillbasedontheabovediscussedpremises,therespondentmustpaytothecomplainantthefollowing:
a.his13thmonthpayfromthedateofhishiringtothedateofhisdismissal,presentlycomputedat
P78,117.87
b.hisserviceincentiveleavepayforalltheyearshehadbeeninservicewiththerespondent,presently
computedatP13,788.05.
[5]

Allotherclaimsofbothcomplainantandrespondentareherebydismissedforlackofmerit.

Not satisfied with the decision of the Labor Arbiter, petitioner appealed the decision to the NLRC
whichrendereditsdecisionon28September2001,thedecretalportionofwhichreads:
[T]heRulesandRegulationsImplementingPresidentialDecreeNo.851,particularlySec.3provides:
Section3.Employerscovered.TheDecreeshallapplytoallemployersexceptto:
xxxxxxxxx
e)employersofthosewhoarepaidonpurelycommission,boundary,ortaskbasis,performingaspecificwork,
irrespectiveofthetimeconsumedintheperformancethereof.xxx.
Recordsshowthatcomplainant,inhispositionpaper,admittedthathewaspaidonacommissionbasis.
Inviewoftheforegoing,wedeemitjustandequitabletomodifytheassailedDecisionbydeletingtheawardof13th
monthpaytothecomplainant.
WHEREFORE,theDecisiondated29September2000isMODIFIEDbydeletingtheawardof13thmonthpay.The
[6]

otherfindingsareAFFIRMED.

In other words, the award of service incentive leave pay was maintained. Petitioner thus sought a
reconsiderationofthisaspect,whichwassubsequentlydeniedinaResolutionbytheNLRCdated31
October2001.
DispleasedwithonlythepartialgrantofitsappealtotheNLRC,petitionersoughtthereviewofsaid
decisionwiththeCourtofAppealswhichwassubsequentlydeniedbytheappellatecourtinaDecision
dated06May2002,thedispositiveportionofwhichreads:
WHEREFORE,premisesconsidered,thePetitionisDISMISSEDforlackofmeritandtheassailedDecisionof
[7]

respondentCommissioninNLRCNCRCANo.0265842000isherebyAFFIRMEDintoto.Nocosts.
Hence,theinstantpetition.
ISSUES
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1.Whetherornotrespondentisentitledtoserviceincentiveleave
2. Whether or not the three (3)year prescriptive period provided under Article 291 of the Labor
Code,asamended,isapplicabletorespondentsclaimofserviceincentiveleavepay.
RULINGOFTHECOURT
ThedispositionofthefirstissuerevolvesaroundtheproperinterpretationofArticle95oftheLabor
CodevisvisSection1(D),RuleV,BookIIIoftheImplementingRulesandRegulationsoftheLaborCode
whichprovides:
Art.95.RIGHTTOSERVICEINCENTIVELEAVE
(a)Everyemployeewhohasrenderedatleastoneyearofserviceshallbeentitledtoayearlyserviceincentive
leaveoffivedayswithpay.
BookIII,RuleV:SERVICEINCENTIVELEAVE
SECTION1.Coverage.Thisruleshallapplytoallemployeesexcept:
(d)Fieldpersonnelandotheremployeeswhoseperformanceisunsupervisedbytheemployerincludingthose
whoareengagedontaskorcontractbasis,purelycommissionbasis,orthosewhoarepaidinafixed
amountforperformingworkirrespectiveofthetimeconsumedintheperformancethereof...
A careful perusal of said provisions of law will result in the conclusion that the grant of service
incentive leave has been delimited by the Implementing Rules and Regulations of the Labor Code to
apply only to those employees not explicitly excluded by Section 1 of Rule V. According to the
ImplementingRules,ServiceIncentiveLeaveshallnotapplytoemployeesclassifiedasfieldpersonnel.
The phrase other employees whose performance is unsupervised by the employer must not be
understood as a separate classification of employees to which service incentive leave shall not be
granted.Rather,itservesasanamplificationoftheinterpretationofthedefinitionoffieldpersonnelunder
theLaborCodeasthosewhoseactualhoursofworkinthefieldcannotbedeterminedwithreasonable
[8]

certainty.

Thesameistruewithrespecttothephrasethosewhoareengagedontaskorcontractbasis,purely
commissionbasis.Said phrase should be related with field personnel, applying the rule on ejusdem
generisthatgeneralandunlimitedtermsarerestrainedandlimitedbytheparticulartermsthattheyfollow.
[9]

Hence, employees engaged on task or contract basis or paid on purely commission basis are not
automaticallyexemptedfromthegrantofserviceincentiveleave,unless,theyfallundertheclassification
offieldpersonnel.
Therefore,petitionerscontentionthatrespondentisnotentitledtothegrantofserviceincentiveleave
justbecausehewaspaidonpurelycommissionbasisismisplaced.Whatmustbeascertainedinorder
toresolvetheissueofproprietyofthegrantofserviceincentiveleavetorespondentiswhetherornothe
isafieldpersonnel.
AccordingtoArticle82oftheLaborCode,fieldpersonnelshallrefertononagriculturalemployees
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.
ThisdefinitionisfurtherelaboratedintheBureauofWorkingConditions(BWC),AdvisoryOpinionto
PhilippineTechnicalClericalCommercialEmployeesAssociation
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[10]

whichstatesthat:
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Asageneralrule,[fieldpersonnel]arethosewhoseperformanceoftheirjob/serviceisnotsupervisedbytheemployer
orhisrepresentative,theworkplacebeingawayfromtheprincipalofficeandwhosehoursanddaysofworkcannotbe
determinedwithreasonablecertaintyhence,theyarepaidspecificamountforrenderingspecificserviceorperforming
specificwork.Ifrequiredtobeatspecificplacesatspecifictimes,employeesincludingdriverscannotbesaidto
befieldpersonneldespitethefactthattheyareperformingworkawayfromtheprincipalofficeoftheemployee.
[Emphasisours]
TothisdiscussionbytheBWC,thepetitionerdiffersandpostulatesthatundersaidadvisoryopinion,
noemployeewouldeverbeconsideredafieldpersonnelbecauseeveryemployer,inonewayoranother,
exercises control over his employees. Petitioner further argues that the only criterion that should be
consideredisthenatureofworkoftheemployeeinthat,iftheemployeesjobrequiresthatheworksaway
fromtheprincipalofficelikethatofamessengerorabusdriver,thenheisinevitablyafieldpersonnel.
Wearenotpersuaded.Atthispoint,itisnecessarytostressthatthedefinitionofafieldpersonnelis
notmerelyconcernedwiththelocationwheretheemployeeregularlyperformshisdutiesbutalsowiththe
fact that the employees performance is unsupervised by the employer. As discussed above, field
personnelarethosewhoregularlyperformtheirdutiesawayfromtheprincipalplaceofbusinessofthe
employerandwhoseactualhoursofworkinthefieldcannotbedeterminedwithreasonablecertainty.
Thus,inordertoconcludewhetheranemployeeisafieldemployee,itisalsonecessarytoascertainif
actualhoursofworkinthefieldcanbedeterminedwithreasonablecertaintybytheemployer.Insodoing,
an inquiry must be made as to whether or not the employees time and performance are constantly
supervisedbytheemployer.
AsobservedbytheLaborArbiterandconcurredinbytheCourtofAppeals:
Itisofjudicialnoticethatalongtheroutesthatarepliedbythesebuscompanies,thereareitsinspectorsassignedat
strategicplaceswhoboardthebusandinspectthepassengers,thepunchedtickets,andtheconductorsreports.Thereis
alsothemandatoryonceaweekcarbarnorshopday,wherethebusisregularlycheckedastoitsmechanical,
electrical,andhydraulicaspects,whetherornotthereareproblemsthereonasreportedbythedriverand/orconductor.
Theytoo,mustbeatspecificplaceas[sic]specifiedtime,astheygenerallyobservepromptdepartureandarrivalfrom
theirpointoforigintotheirpointofdestination.Ineachandeverydepot,thereisalwaystheDispatcherwhosefunction
ispreciselytoseetoitthatthebusanditscrewleavethepremisesatspecifictimesandarriveattheestimatedproper
time.These,arepresentinthecaseatbar.Thedriver,thecomplainantherein,wasthereforeunderconstantsupervision
[11]

whileintheperformanceofthiswork.Hecannotbeconsideredafieldpersonnel.

We agree in the above disquisition. Therefore, as correctly concluded by the appellate court,
respondentisnotafieldpersonnelbutaregularemployeewhoperformstasksusuallynecessaryand
desirable to the usual trade of petitioners business. Accordingly, respondent is entitled to the grant of
serviceincentiveleave.
The question now that must be addressed is up to what amount of service incentive leave pay
respondentisentitledto.
Theresponsetothisqueryinevitablyleadsustothecorrelativeissueofwhetherornotthethree(3)
year prescriptive period under Article 291 of the Labor Code is applicable to respondents claim of
serviceincentiveleavepay.
Article 291 of the Labor Code states that all money claims arising from employeremployee
relationshipshallbefiledwithinthree(3)yearsfromthetimethecauseofactionaccruedotherwise,they
shallbeforeverbarred.
IntheapplicationofthissectionoftheLaborCode,thepivotalquestiontobeanswerediswhendoes
thecauseofactionformoneyclaimsaccrueinordertodeterminethereckoningdateofthethreeyear
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prescriptiveperiod.
Itissettledjurisprudencethatacauseofactionhasthreeelements,towit,(1)arightinfavorofthe
plaintiffbywhatevermeansandunderwhateverlawitarisesoriscreated(2)anobligationonthepartof
thenameddefendanttorespectornottoviolatesuchrightand(3)anactoromissiononthepartofsuch
defendantviolativeoftherightoftheplaintifforconstitutingabreachoftheobligationofthedefendantto
[12]

theplaintiff.

ToproperlyconstrueArticle291oftheLaborCode,itisessentialtoascertainthetimewhenthethird
element of a cause of action transpired. Stated differently, in the computation of the threeyear
prescriptiveperiod,adeterminationmustbemadeastotheperiodwhentheactconstitutingaviolation
oftheworkersrighttothebenefitsbeingclaimedwascommitted.Forifthecauseofactionaccruedmore
thanthree(3)yearsbeforethefilingofthemoneyclaim,saidcauseofactionhasalreadyprescribedin
[13]

accordancewithArticle291.

Consequently,incasesofnonpaymentofallowancesandothermonetarybenefits,ifitisestablished
thatthebenefitsbeingclaimedhavebeenwithheldfromtheemployeeforaperiodlongerthanthree(3)
years,theamountpertainingtotheperiodbeyondthethreeyearprescriptiveperiodisthereforebarred
byprescription.Theamountthatcanonlybedemandedbytheaggrievedemployeeshallbelimitedtothe
[14]

amountofthebenefitswithheldwithinthree(3)yearsbeforethefilingofthecomplaint.

Itisessentialatthispoint,however,torecognizethattheserviceincentiveleaveisacuriousanimalin
relationtootherbenefitsgrantedbythelawtoeveryemployee.Inthecaseofserviceincentiveleave,the
employee may choose to either use his leave credits or commute it to its monetary equivalent if not
[15]

exhaustedattheendoftheyear. Furthermore,iftheemployeeentitledtoserviceincentiveleavedoes
not use or commute the same, he is entitled upon his resignation or separation from work to the
commutationofhisaccruedserviceincentiveleave.AsenunciatedbytheCourtinFernandezv.NLRC:
[16]

TheclearpolicyoftheLaborCodeistograntserviceincentiveleavepaytoworkersinallestablishments,subjecttoa
fewexceptions.Section2,RuleV,BookIIIoftheImplementingRulesandRegulationsprovidesthat[e]veryemployee
whohasrenderedatleastoneyearofserviceshallbeentitledtoayearlyserviceincentiveleaveoffivedayswithpay.
Serviceincentiveleaveisarightwhichaccruestoeveryemployeewhohasservedwithin12months,whethercontinuous
orbrokenreckonedfromthedatetheemployeestartedworking,includingauthorizedabsencesandpaidregular
holidaysunlesstheworkingdaysintheestablishmentasamatterofpracticeorpolicy,orthatprovidedinthe
employmentcontracts,islessthan12months,inwhichcasesaidperiodshallbeconsideredasoneyear.Itisalso
commutabletoitsmoneyequivalentifnotusedorexhaustedattheendoftheyear.Inotherwords,anemployee
whohasservedforoneyearisentitledtoit.Hemayuseitasleavedaysorhemaycollectitsmonetaryvalue.To
[17]

limittheawardtothreeyears,asthesolicitorgeneralrecommends,istoundulyrestrictsuchright.

[Italicssupplied]

Correspondingly,itcanbeconscientiouslydeducedthatthecauseofactionofanentitledemployee
toclaimhisserviceincentiveleavepayaccruesfromthemomenttheemployerrefusestoremunerateits
monetaryequivalentiftheemployeedidnotmakeuseofsaidleavecreditsbutinsteadchosetoavailof
its commutation. Accordingly, if the employee wishes to accumulate his leave credits and opts for its
commutationuponhisresignationorseparationfromemployment,hiscauseofactiontoclaimthewhole
amountofhisaccumulatedserviceincentiveleaveshallarisewhentheemployerfailstopaysuchamount
atthetimeofhisresignationorseparationfromemployment.
ApplyingArticle291oftheLaborCodeinlightofthispeculiarityoftheserviceincentiveleave,we
canconcludethatthethree(3)yearprescriptiveperiodcommences,notattheendoftheyearwhenthe
employeebecomesentitledtothecommutationofhisserviceincentiveleave,butfromthetimewhenthe
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employerrefusestopayitsmonetaryequivalentafterdemandofcommutationoruponterminationofthe
employeesservices,asthecasemaybe.
TheaboveconstrualofArt.291,visvistherulesonserviceincentiveleave,isinkeepingwiththe
rudimentaryprinciplethatintheimplementationandinterpretationoftheprovisionsoftheLaborCode
and its implementing regulations, the workingmans welfare should be the primordial and paramount
[18]

consideration. Thepolicyistoextendtheapplicabilityofthedecreetoagreaternumberofemployees
whocanavailofthebenefitsunderthelaw,whichisinconsonancewiththeavowedpolicyoftheStateto
[19]

givemaximumaidandprotectiontolabor.

Inthecaseatbar,respondenthadnotmadeuseofhisserviceincentiveleavenordemandedforits
commutation until his employment was terminated by petitioner. Neither did petitioner compensate his
accumulated service incentive leave pay at the time of his dismissal. It was only upon his filing of a
complaintforillegaldismissal,onemonthfromthetimeofhisdismissal,thatrespondentdemandedfrom
his former employer commutation of his accumulated leave credits. His cause of action to claim the
payment of his accumulated service incentive leave thus accrued from the time when his employer
dismissedhimandfailedtopayhisaccumulatedleavecredits.
Therefore, the prescriptive period with respect to his claim for service incentive leave pay only
commencedfromthetimetheemployerfailedtocompensatehisaccumulatedserviceincentiveleave
payatthetimeofhisdismissal.Sincerespondenthadfiledhismoneyclaimafteronlyonemonthfromthe
timeofhisdismissal,necessarily,hismoneyclaimwasfiledwithintheprescriptiveperiodprovidedforby
Article291oftheLaborCode.
WHEREFORE,premisesconsidered,theinstantpetitionisherebyDENIED.TheassailedDecision
oftheCourtofAppealsinCAG.R.SP.No.68395isherebyAFFIRMED.NoCosts.
SOORDERED.
Puno,(Chairman),AustriaMartinez,Callejo,Sr.,andTinga,JJ.,concur.
[1]

[2]
[3]
[4]
[5]
[6]
[7]
[8]
[9]

CAG.R.SPNo.68395,dated06May2002,pennedbyAssociateJusticeAndresB.Reyes,Jr.withAssociateJustices
ConradoM.Vasquez,Jr.andMarioL.Guaria,III,concurring.
Dated12December2002.
NLRCNCRCANo.0265842000(NLRCCaseNo.RABCAR02008800),dated28September2001.
NLRCCaseNo.RABCAR02008800.
Rollo,pp.4647.
Rollo,pp.5253.
CADecision,p.10Rollo,p.24.
SeeMercidarFishingCorporationv.NLRC,G.R.No.112574,08October1998,297SCRA440.
CebuInstituteofTechnologyv.Ople,G.R.No.L58870,18December1987,156SCRA629,672,citingVerav.Cuevas,
G.R.No.L33693,31May1979,90SCRA379.

[10]
[11]

06April1989Rollo.p.20.

Rollo,pp.4546.

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[12]

[13]
[14]
[15]
[16]
[17]
[18]

[19]

AutoBusTransportSystemsIncvsBautista:156367:May16,2005:J.ChicoNazario:SecondDivision:Decision

Baliwag Transit, Inc. v. Ople, G.R. No. 57642, 16 March 1989, 171 SCRA 250, citing Agric. Credit & Cooperative
Financing Administration v. Alpha Ins. & Surety Co., Inc., G.R. No. L24566, 29 July 1968, 24 SCRA 151 Summit
Guaranty and Insurance Co., Inc. v. De Guzman, G.R. No. L50997, 30 June 1987, 151 SCRA 389 Tormon v.
Cutanda,G.R.No.L18785,23December1963,9SCRA698.
SeeDeGuzman,etal.v.CAandNasipitLumberCo.,G.R.No.132257,12October1998,297SCRA743.
SeeE.Ganzon,Inc.v.NLRC,G.R.No.123769,22December1999,321SCRA434.
Fernandezv.NLRC,G.R.No.105892,28January1998,349Phil65.
Ibid.
Ibid.,pp.9495.
Abella v. NLRC, G.R. No. L71813, 20 July 1987, 152 SCRA 140, citing Volkschel Labor Union v. Bureau of Labor
Relations,G.R.No.L45824,19June1985,137SCRA43.
Sarmiento v. Employees Compensation Commission, G.R. No. L68648, 24 September 1986, 144 SCRA 421, citing
Cristobalv.EmployeesCompensationCommission,G.R.No.L49280,26February1981,103SCRA329Acostav.
EmployeesCompensationCommission,G.R.No.L55464,12November1981,109SCRA209.

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