Manila Terminal Co. vs.

CIR
Facts: Petitioner Manila Terminal hired some thirty men as watchmen on twelve-hour shifts at a
compensation of P3 per day for the day shift and P6 per day for the night shift. They are engaged
in arrastre servicing in piers of Manila.
The watchmen of the petitioner continued in the service with a number of substitutions
and additions, their salaries having been raised during the month of February to P4 per day for
the day shift and P6.25 per day for the nightshift. The private respondent sent a letter to
Department of Labor requesting that the matter of overtime pay be investigated. But nothing was
done by the Dept of Labor. Later on, the petitioner instituted the system of strict eight-hour
shifts.
The private respondent filed an amended petition with the Court of Industrial Relations
praying, among others, that the petitioner be ordered to pay its watchmen or police force
overtime pay from the commencement of their employment.
By virtue of Customs Administrative Order No. 81 and Executive Order No. 228 of the
President of the Philippines, the entire police force of the petitioner was consolidated with the
Manila Harvor Police of the Customs Patrol Service, a Government agency.
The public respondent decision was to pay the private respondents their overtime on
regular days at the regular rate and additional amount of 25 percent, overtime on Sundays and
legal holidays at the regular rate only, and watchmen are not entitled to night differential pay for
past services. The petitioner has filed a present petition for certiorari.

Issue: WON the agreement under which its police force were paid certain specific wages for
twelve-hour shifts, included overtime compensation.
Held: The principle of estoppel and the laches cannot well be invoked against the Association. it
would be contrary to the spirit of the Eight Hour Labor Law, under which as already seen, the
laborers cannot waive their right to extra compensation. If the principle of estoppel and laches is
to be applied, the employee may be compelled to accomplish the same thing by mere silence or
lapse of time, thereby frustrating the purpose of law by indirection.

Joenalyn Mae G. Galang

Labor Standards
LLB-3

Asia Pacific Christening vs. Farolan

Facts: Petitioner hired respondent Farolan as Sales Manager for its passenger and cargo
operations for Scandinavian Airline System. When respondent took over the job she attended
several meetings and seminars for her to improve in her marketing and sales skills.
However, when she submitted reports, there was a drop of respondents sales revenues
which to her was attributable to market forces beyond her control. Petitioner then directed its
high ranking officer Roberto Zozobrado to conduct an investigation on the matter and identify
the problems and implement possible solutions. The latter informally took over the respondents
responsibilities but Farolan still received her salary and Sales Manager. As a result, Soren
Jespersen the general manager of the company was convinced that the respondent was not fit for
the job.
Respondent Farolan nevertheless, received letter from Jespersen congratulating him for
the exceeding sale results in April and number of recommendations for improvement. However,
on even date, petitioner terminated the employment of respondent on ground of loss of trust and
confidence. Thus, she filed a complaint foe illegal dismissal.
Issue: WON petitioner illegally dismissed the respondent on the ground that she was not
physically fit for the job.

Held: Recent decisions of this Court distinguish the treatment of managerial employees from
that of rank and file personnel insofar as the application of the doctrine of loss of trust and
confidence is concerned
MANAGERIAL EMPLOYEES; CONDITIONS THAT MUST BE MET BEFORE ONE MAY
BE CONSIDERED A MANAGERIAL EMPLOYEE. As enunciated in Samson v. NLRC, 330
SCRA 460, Before one may be properly considered a managerial employee, all the following
conditions must be met: (1) Their primary duty consists of the management of the establishment
in which they are employed or of a department or subdivision thereof; (2) They customarily and
regularly direct the work of two or more employees therein; (3) They have the authority to hire
or fire other employees of lower rank; or their suggestions and recommendations as to the hiring
and firing and as to the promotion or any other change of status of other employees are given
particular weight. (Section 2(b), Rule I, Book III of the Omnibus Rules Implementing the Labor
Code,
italics
supplied).
It is not disputed that her job description, and the terms and conditions of her employment, with
the exception of her salary and allowances, were never reduced to writing.
By respondents claim, her function, as verbally explained to her by Murray, dealt mainly with
servicing of existing clientele. Bondoc, however, described respondents functions and duties as
critical
Joenalyn Mae G. Galang
Labor Standards
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DISMISSAL; LOSS OF TRUST AND CONFIDENCE; MUST BE BASED ON A WILLFUL

BREACH AND FOUNDED ON CLEARLY ESTABLISHED FACTS; BREACH OF DUTIES;
WHEN CONSIDERED WILLFUL; CASE AT BAR. Even assuming, however, that
respondent was a managerial employee, the stated ground (in the letter of termination) for her
dismissal, loss of confidence, should have a basis and determination thereof cannot be left
entirely to the employer. Loss of trust and confidence to be a valid ground for an employees
dismissal must be based on a willful breach and founded on clearly established facts. A breach is
willful if it is done intentionally, knowingly and purposely, without justifiable excuse, as
distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently.
Respondents detailed REPORT dated September 8, 1993, relative to SAS profit and loss for
1993, which was closely examined and analyzed by the LA contains an explanation of what
brought about the decline in sales revenues. And it contains too a number of recommended
measures on improvement of sales for the remainder of 1993 and for 1994. As did the Labor
Arbiter and the Court of Appeals, this Court finds respondents explanation in her Report behind
the decline in sales revenues as due to market forces beyond respondents control plausible. In
any event, there is no showing that the decline is reflective of any willful breach of duties by
respondent.

Joenalyn Mae G. Galang

Labor Standards
LLB-3

Charlito Pearanda vs Baganga Plywood Corporation and Hudson Chua

Facts: Petitioner Pearanda was hired by Baganga Plywood Corporation to take charge of the
operations and maintenance of its steam plant boiler. Pearanda was employed as a
Foreman/Boiler Head/Shift Engineer tasked to do the following tasks among others:
1. To supply the required and continuous steam to all consuming units at minimum cost.
2. To supervise, check and monitor manpower workmanship as well as operation of boiler and
accessories.
3. To evaluate performance of machinery and manpower.
xxx
5. To train new employees for effective and safety while working.
xxx
7. To recommend personnel actions such as: promotion, or disciplinary action.
xxx
In 2001, BPC shut down due to some repairs and maintenance. BPC did not technically
fire Pearanda but due to the latters insistence, BPC gave him his separation benefits.
BPC subsequently reopened but Pearanda did not reapply.
Pearanda now claims that BPC still needed to pay him his overtime pays and premium
pays.
The NLRC ruled that Pearanda is a managerial employee and as such he is not entitled
to overtime and premium pay as stated under the Labor Code. Pearanda appealed. He said that
he is not a managerial employee.
Joenalyn Mae G. Galang
Labor Standards
LLB-3

ISSUE: Whether or not Pearanda is entitled to overtime and premium pay.

HELD: No. Though there is an error made by the NLRC in finding Pearanda as a managerial
employee, the Supreme Court still ruled that Pearanda is not entitled to overtime and premium
pay.
Pearanda is not a managerial employee. Under the Implementing Rules and Regulations
of the Labor Code, managerial employees are those that perform the following:
(1) Their primary duty consists of the management of the establishment in which they are
employed or of a department or subdivision thereof;
(2) They customarily and regularly direct the work of two or more employees therein;
(3) They have the authority to hire or fire other employees of lower rank; or their suggestions
and recommendations as to the hiring and firing and as to the promotion or any other change of
status of other employees are given particular weight.
Pearanda does not meet the above requirements.
Pearanda is instead considered as a managerial staff. Under the Implementing Rules and
Regulations of the Labor Code, managerial staffs are those that perform the following:
(1) The primary duty consists of the performance of work directly related to management
policies of the employer;
(2) Customarily and regularly exercise discretion and independent judgment;
(3) (i) Regularly and directly assist a proprietor or a managerial employee whose primary duty
consists of the management of the establishment in which he is employed or subdivision thereof;
or (ii) execute under general supervision work along specialized or technical lines requiring
special training, experience, or knowledge; or (iii) execute under general supervision special
assignments and tasks; and
(4) who do not devote more than 20 percent of their hours worked in a workweek to activities
which are not directly and closely related to the performance of the work described in paragraphs
(1), (2), and (3) above.
Pearandas function as a shift engineer illustrates that he was a member of the
managerial staff. His duties and responsibilities conform to the definition of a member of a
managerial staff under the Implementing Rules.
Joenalyn Mae G. Galang
Labor Standards
LLB-3

Pearanda supervised the engineering section of the steam plant boiler. His work
involved overseeing the operation of the machines and the performance of the workers in the
engineering section. This work necessarily required the use of discretion and independent
judgment to ensure the proper functioning of the steam plant boiler.
Further, Pearanda in his position paper admitted that he was a supervisor for BPC. As
supervisor, petitioner is deemed a member of the managerial staff.

Mercidar Fishing Corporation vs. NLRC

Facts: This is a petition for certiorari to set aside the decision, dated August 30, 1993, of the
National Labor Relations Commission dismissing the appeal of petitioner Mercidar Fishing
Corporation from the decision of the Labor Arbiter in NLRC NCR Case No. 09-05084-90, as
well as the resolution dated October 25, 1993, of the NLRC denying reconsideration.
Private respondent alleged that he had been sick and thus allowed to go on leave without pay
for one month from April 28, 1990 but that when he reported to work at the end of such period
with a health clearance, he was told to come back another time as he could not be reinstated
immediately. Thereafter, petitioner refused to give him work. For this reason, private respondent
asked for a certificate of employment from petitioner on September 6, 1990. However, when he
came back for the certificate on September 10, petitioner refused to issue the certificate unless he
Joenalyn Mae G. Galang
Labor Standards
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submitted his resignation. Since private respondent refused to submit such letter unless he was
given separation pay, petitioner prevented him from entering the premises.
The Larbor Arbiter rendered a decision ordering petitioner corporation to reinstate
complainant with back wages, pay him his 13th month pay and incentive leave
Issue: WON respondent committed a grave abuse of discretion when it upheld the findings of
the Labor Arbiter that herein petitioner had constructively dismissed Fermin Agao, Jr. from
employment.

Held: Neither did petitioner gravely abuse its discretion in ruling that private respondent had
constructively been dismissed by petitioner. Such factual finding of both the NLRC and the
Labor Arbiter is based not only on the pleadings of the parties but also on a medical certificate of
fitness which, contrary to petitioners claim, private respondent presented when he reported to
work on May 28, 1990.[9] As the NLRC held:
Anent grounds (a) and (b) of the appeal, the respondent, in a nutshell, would like us to
believe that the Arbiter abused his discretion (or seriously erred in his findings of facts)
in giving credence to the factual version of the complainant. But it is settled that
(W)hen confronted with conflicting versions of factual matters, the Labor Arbiter has
the discretion to determine which party deserves credence on the basis of evidence
received. [Gelmart Industries (Phils.), Inc. vs. Leogardo, 155 SCRA 403, 409, L-70544,
November 5, 1987]. And besides, it is settled in this jurisdiction that to constitute
abandonment of position, there must be concurrence of the intention to abandon and
some overt acts from which it may be inferred that the employee concerned has no
more interest in working (Dagupan Bus Co., Inc. vs. NLRC, 191 SCRA 328), and that
the filing of the complaint which asked for reinstatement plus backwages (Record, p.
20) is inconsistent with respondents defense of abandonment (Hua Bee Shirt
Factory vs. NLRC, 188 SCRA 586).
It is trite to say that the factual findings of quasi-judicial bodies are generally binding as
long as they are supported substantially by evidence in the record of the case. [11] This is
especially so where, as here, the agency and its subordinate who heard the case in the first
instance are in full agreement as to the facts.

Joenalyn Mae G. Galang

Labor Standards
LLB-3

Auto Bus Transport Systems vs Bautista

Facts: Antonio Bautista was employed by Auto Bus Transport Systems, Inc. in May
1995. He was assigned to the Isabela-Manila route and he was paid by commission
(7% of gross income per travel for twice a month).

Joenalyn Mae G. Galang

Labor Standards
LLB-3

In January 2000, while he was driving his bus he bumped another bus owned
by Auto Bus. He claimed that he accidentally bumped the bus as he was so tired
and that he has not slept for more than 24 hours because Auto Bus required him to
return to Isabela immediately after arriving at Manila. Damages were computed and
30% or P75,551.50 of it was being charged to Bautista. Bautista refused payment.
Auto Bus terminated Bautista after due hearing as part of Auto Bus
management prerogative. Bautista sued Auto Bus for Illegal Dismissal. The Labor
Arbiter Monroe Tabingan dismissed Bautistas petition but ruled that Bautista is
entitled to P78,117.87 13th month pay payments and P13,788.05 for his unpaid
service incentive leave pay.
The case was appealed before the National Labor Relations Commission.
NLRC modified the LAs ruling. It deleted the award for 13 th Month pay. The court of
Appeals affirmed the NLRC.
Auto Bus averred that Bautista is a commissioned employee and if that is not
reason enough that Bautista is also a field personnel hence he is not entitled to a
service incentive leave. They invoke Art. 95.

ISSUE: Whether or not Bautista is entitled to Service Incentive Leave.

HELD: Yes, Bautista is entitled to Service Incentive Leave. The Supreme Court
emphasized that it does not mean that just because an employee is paid on
commission basis he is already barred to receive service incentive leave pay.
The question actually boils down to whether or not Bautista is a field
employee.
According to Article 82 of the Labor Code, field personnel shall refer to nonagricultural 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.
As a general rule, field personnel are those whose performance of their
job/service is not supervised by the employer or his representative, the workplace
being away from the principal office and whose hours and days of work cannot be
determined with reasonable certainty; hence, they are paid specific amount for
Joenalyn Mae G. Galang
Labor Standards
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rendering specific service or performing specific work. If required to be at specific

places at specific times, employees including drivers cannot be said to be field
personnel despite the fact that they are performing work away from the principal
office of the employee.
Certainly, Bautista is not a field employee. He has a specific route to traverse
as a bus driver and that is a specific place that he needs to be at work. There are
inspectors hired by Auto Bus to constantly check him. There are inspectors in bus
stops who inspects the passengers, the punched tickets, and the driver. Therefore
he is definitely supervised though he is away from the Auto Bus main office.

Joenalyn Mae G. Galang

Labor Standards
LLB-3

Joenalyn Mae G. Galang

Labor Standards
LLB-3