01 Mantrade/FMMC Division Employees and Workers Union v.

Bacungan AUTHOR: S A Y O
No. L-48437. September 30, 1986.* On the issue of Arbitration: Decisions of voluntary arbitrators given the highest
TOPIC: Holiday Pay PONENTE: respect and generally accorded finality.
CASE LAW/ DOCTRINE:
Insular Bank of Asia and America Employees Union (IBAAEU) vs. Inciong:

WE agree with the petitioners contention that Section 2, Rule IV, Book III of the implementing rules and Policy Instruction No. 9, issued by the then Secretary of
Labor are null and void since in the guise of clarifying the Labor Codes provisions on holiday pay, they in effect amended them by enlarging the scope of their
exclusion (p. 11, rec.).

Article 94 of the Labor Code, as amended by P.D. 850, provides:

Art. 94. 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. x x x
The coverage and scope of exclusion of the Labor Codes holiday pay provisions is spelled out under Article 82 thereof which reads:

Art. 82. Coverage.The provision of this Title shall apply to employees in all establishments and undertakings, whether for profit or not, but not to government
employees, managerial employees, field personnel, members of the family of the employer who are dependent on him for support, domestic helpers, persons, in the
personal service of another, and workers who are paid by results as determined by the Secretary of Labor in appropriate regulations.

From the above-cited provisions, it is clear that monthly paid employees are not excluded from the benefits of holiday pay. However, the implementing rules on
holiday pay promulgated by the then Secretary of Labor excludes monthly paid employees from the said benefits by inserting under Rule IV, Book III of the
implementing rules, Section 2, which provides that: employees who are uniformly paid by the month, irrespective of the number of working days therein, with a
salary of not less than the statutory or established minimum wage shall be presumed to be paid for all days in the month whether worked or not
FACTS:

This is a petition for Certiorari and Mandamus filed by petitioner against arbitrator Froilan M. Bacungan and Mantrade Development Corporation arising
from the decision of respondent arbitrator, ruling that Mantrade Development Corporation is not under legal obligation to pay holiday pay (as provided
for in Article 94 of the Labor Code in the third official Department of Labor edition) to its monthly paid employees who are uniformly paid by the month,
irrespective of the number of working days therein, with a salary of not less than the statutory or established minimum wage, and this rule is applicable
not only as of March 2, 1976 but as of November 1, 1974.

Petitioner questions the validity of the pertinent section of the Rules and Regulations Implementing the Labor Code as amended on which respondent
arbitrator based his decision.

On the other hand, (not related) respondent corporation has raised procedural and substantive objections. It contends that petitioner is barred from
pursuing the present action in view of Article 263 of the Labor Code, which provides in part that voluntary arbitration awards or decisions shall be final,
inappealable, and executory, as well as the rules implementing the same; the pertinent provision of the Collective Bargaining Agreement between
petitioner and respondent corporation; and Article 2044 of the Civil Code which provides that any stipulation that the arbitrators award or decision shall
be final, is valid, without prejudice to Articles 2038, 2039, and 2040

In denying petitioners claim for holiday pay, respondent arbitrator stated that although monthly salaried employees are not among those excluded
from receiving such additional pay under Article 94 of the Labor Code of the Philippines, to wit:

ART. 94. 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 compensation equivalent to twice his regular rate; and

(c) As used in this Article, "holiday" includes: New Years 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 the thirtieth of December, and the day designated by law for holding a general election.

they appear to be excluded under Sec. 2, Rule IV, Book III of the Rules and Regulations implementing said provision which reads thus:chanrob1es virtual
1aw library

SEC. 2. Status of employees paid by the month. Employees who are uniformly paid by the month, irrespective of the number of working days therein,
with a salary of not less than the statutory or established minimum wage shall be presumed to be paid for all days in the month whether worked or not.

Respondent arbitrator further opined that respondent corporation does not have any legal obligation to grant its monthly salaried employees holiday pay,
unless it is argued that the pertinent section of the Rules and Regulations implementing Section 94 of the Labor Code is not in conformity with the law, and
thus, without force and effect.
ISSUE(S): WON monthly salaried employees are excluded from holiday pay- NO
This ruling was reiterated by the Court en banc on August 28, 1985 in the case of Chartered Bank Employees Association vs. Ople, wherein it added that:
The questioned Sec. 2, Rule IV, Book III of the Integrated Rules and the Secretarys Policy Instruction No. 9 add another excluded group, namely employees who are
uniformly paid by the month. While the additional exclusion is only in the form of a presumption that all monthly paid employees have already been paid holiday
pay, it constitutes a taking away or a deprivation which must be in the law if it is to be valid. An administrative interpretation which diminishes the benefits of labor
more than what the statute
delimits or withholds is obviously ultra vires. (138 SCRA 273, 282. See also CBTC Employees Union vs., Clave, January 7, 1986, 141 SCRA 9.)

02. David Vs. Macasio AUTHOR: Valera ( SORRY MAHABA TALAGA)

G.R. No. 195466; July 2, 2014 NOTES:
Holdiays: Brion: Article 82 of the Labor Code provides the exclusions from the coverage of Title I, Book III of the Labor Code - provisions governing
working conditions and rest periods.
 Art. 82. Coverage. The provisions of [Title I] shall apply to employees in all establishments and undertakings whether for profit or
not, but not to government employees, managerial employees, field personnel, members of the family of the employer who are
dependent on him for support, domestic helpers, persons in the personal service of another, and workers who are paid by results as
determined by the Secretary of Labor in appropriate regulations.
xxxx
"Field personnel" shall refer to non-agricultural 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.

Among the Title I provisions are the provisions on holiday pay (under Article 94 of the Labor Code) and SIL pay (under Article 95 of
the Labor Code). Under Article 82,"field personnel" on one hand and "workers who are paid by results" on the other hand, are not
covered by the Title I provisions. The wordings of Article82 of the Labor Code additionally categorize workers "paid by results" and
"field personnel" as separate and distinct types of employees who are exempted from the Title I provisions of the Labor Code.

The pertinent portion of Article 94 of the Labor Code and its corresponding provision in the IRR47 reads:

Art. 94. 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 (10) workers[.] [emphasis ours]
xxxx
SECTION 1. Coverage. This Rule shall apply to all employees except:
xxxx
(e)Field personnel and other employees whose time and performance is unsupervised by the employer including those who are
engaged on task or contract basis, purely commission basis, or those who are paid a fixed amount for performing work irrespective
of the time consumed in the performance thereof. [emphases ours]

On the other hand, Article 95 of the Labor Code and its corresponding provision in the IRR48 pertinently provides:

Art. 95. Right to service incentive. (a) Every employee who has rendered at least one year of service shall be entitled to a yearly
service incentive leave of five days with pay.

(b) This provision shall not apply to those who are already enjoying the benefit herein provided, those enjoying vacation leave with
pay of at least five days and those employed in establishments regularly employing less than ten employees or in establishments
exempted from granting this benefit by the Secretary of Labor and Employment after considering the viability or financial condition
of such establishment. [emphases ours]
xxxx
Section 1. Coverage. This rule shall apply to all employees except:
xxxx
(e) Field personnel and other employees whose performance is unsupervised by the employer including those who are engaged on
task or contract basis, purely commission basis, or those who are paid a fixed amount for performing work irrespective of the time
consumed in the performance thereof.
CASE LAW/ DOCTRINE: the payment of an employee on a pakyaw basis alone is insufficient to exclude one from the coverage of SIL and holiday pay. They are only
exempted only if they qualify as Field personal Therefore the IRR validly qualifies and limits the exclusion of workers paid by results found in Art 82 from the
coverage of holiday and SIL pay. This is the only reasonable interpretation since the determination of excluded workers who are paid by results is determined by the
Sec. of Labor in appropriate regulations
FACTS:
In Jan 2009, Macasio filed a complaint against David, doing business under Yiels Hog Dealer in the LA for non-payment of overtime pay, holiday pay, and 13th
month pay. He is also claiming for payment for moral and exemplary damages and attorneys fees. Along with payment for service incentive leave.
Macasio alleges that he had been working as a butcher for David since 1995. And that David exercised effective control and supervision over his work. He
pointed out that:
1.) David sets the work day, reporting time and hogs to be chopped as well as the manner by which he was to perform his work
2.) David pays him a daily salary of P700 which was increased from P600 in 2007, P500 in 2006, and P400 in 2005.
3.) David Approved/Disapproved his leaves,
4.) David owned the hogs delivered for chopping as well as the tools and implements, rented the workspace and employs about 25 butchers and deliver
drivers.
Daivd in his defense, that he only started his hog dealership in 2005 and he only has 10 employees and that he hired Macasio as a butcher on the pakyaw
basis thus not entitled to pay he is claiming in his complaint pursuant to the provisions of the IRR of the labor code. David pointed out that Macasio:
1.) Usually starts his work at 10pm and ends at 2am the following day
2.) Received the fixed amount of P700 per engagement, regardless of the actual number of hours he spent working.
3.) He was not engaged to report for work and did not receive any fee when no hogs are delivered.
Macasio disputed Davids allegations, arguing that David did not start his business only in 2005, and pointed out the Certificate of Employment that David
issued in his favor which placed the date of his employment in January 2000. And that he reported for work every day which the payroll or time record could
have easily proved if David submitted them in evidence
David refuting Macasios further allegations asserted further that Macasio was not his employee as he hired him only on a pakyaw basis and that the
Certificate of Employment was only issued on Macasios request only for overseas employment purposes
The LA dismissed Macasios complaint and concluded that he was engaged on a pakyaw basis thus not entitled to overtime, holiday, SIL and 13 month pay.
Based on these findings:
1.) He received the fixed amount of {700 for every work done regardless of the number of hours he spent or the number of hogs he chopped.
2.) He usually worked for only 4 hours.
3.) P700 wage far exceeds the then prevailing daily minimum wage of P382
The NLRC affirmed the LAs ruling and observed that Macasio was not required to render 8 hours of work to earn the fixed P700 and that Macasio had been
working a non-time work pointing out that Macaso was paid a fixed amount for the completion of the assigned task, irrespective of the time consumed in its
performance. Since Macasio was paid by result and not in terms of the time spent He is not covered by Labor standards law.
NLRC denied MR
 The CA partly granted Macasios petition for certiorari and reversed the NLRC ruling.
While the CA agreed with the LA and NLRC that Macasio was a Task Based employee, The CA found him entitled to his monetary claims following the doctrine
of Serrano v. Severino Santos Transit. The CA explained that as a Task Based employee, Macasio is excluded from the coverage of the holiday, SIL and 13th
month pay only if he is a field personnel. And as defined by the Labor Code a field personnel is one who performs the work away from the workplace and
whose regular work hours cannot be determined with reasonable certainty. In Macasios case, the elements of being a field personnel are evidently lacking
as he had been working as a butcher in Davids hog dealership under Davids supervision and control and for a fixed working schedule that starts at 10 pm.
The CA awarded Macasios claim for holiday, SIL and 13th month pay for 3 years with 10% attorneys fees by denied his claim for moral and exemplary damages
for lack of basis.
ISSUE(S): WON Labor Law provisions on Holiday, SIL and 13th month pay is available for a worker engaged on a pakyaw or task basis.
HELD: Yes, as long as he doesnt fall under the description of a field personnel. (only HOLDIAY and SIL PAY)
The SC states that WON Macasio is entitled to the pay he is claiming, is a question of law and such is intertwined with the factual issue of the existence of an
employer-employee relationship.
David in insisting that Macasio was not his employee, states that he engaged him on a task basis. The court rejects such assertion and states that the
Engagement on a task basis does not characterize the relationship that may exist between the parties. Since the LC in Art 97(6) defines wages as
remuneration or earnings, however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece, or
commission basis, or other method of calculating the same, which is payable by an employer to an employee under a written or unwritten contract of
employment for work done or to be done, or for services rendered or to be rendered. In relation to such Art. 101 of the LC speaks of workers paid by
results or those whose pay is calculated in terms of quantity or quality of their work includes pakyaw work and other non-time work.
The SC finds an employer-employee relationship exists between Macasio and David. Since he passes the 4 fold test:
1.) The is the element of selection and engagement of the employee, since David Engaged the services of Macsasio as confirmed by his Sinumpaang
Salaysay,
2.) The element of payment of wages was satisfied since both parties stated in their pleadings that David had been paying Macasio P700 each.
3.) The power to control is exercised since David sets the time and day when Macasio should report for work. Thus by having the power to control
Macasios schedule, David could regulate Macasios work and could even refuse to give him any assignment thus effectively dismissing him.
4.) The power to control and supervise is evidenced since David had control over Macasios work as to its means and methods of performing such.
Macasio is engages on a Pakyaw/ Task basis.
All 3 trbunals(LA NLRC and the CA) found that Macasio was engaged on a pakyaw basis.
A distinguishing characteristic of the Pakyaw or task basis, as opposed to the straight-hour wage payment is the non-consideration of the time spent in
work. In a task-basis work the emphasis is on the task itself, in the sense that payment is reckoned in terms of completion of the work, not in terms of the
number of time spent in the completion of work. Once the wrok is completed, the worker receives a fixed amount as wage w/o regard to time spent.
In Macasios case, it is established that he would start work at 10pm and regardless of the toal hours he spent or the number of hogs hes chopped. He
would receive the fixed amount of P700 once he had completed his task. Clearly these circumstance show a pakyaw or task basis.
The existence of employment between the parties is determined by the 4-fold test; the engagement of on a pakyaw basis does not determine the parties
relation as it is simply a method of pay computation. Accordingly, Macasio is Davids employee engaged on a pakyaw basis.
Entitlement to holiday, SIL and 13th month pay.
Under the provisions of the LC(NOTES)**** the general rules is that Holiday, and SIL pay cover all employees, and to be excluded from their coverage, the
employee must be one of those that the provisions expressly exempt, Under the IRR, exemption from the coverage of Holiday and SIL pay refer to Field
personnel and other employees whose time and performance is unsupervised by the employer including those who are engaged on task or contract basis.
Unlike in Art 82 of the LC, the IRR on holiday and SIL pay does not exclude employees engaged on task basis as a separate and distinct category from
employees classified as field personnel. Rather, these employees are altogether merged into 1 classification of exempted employees. Because of this
difference it may be argued that the LC may be interpreted to mean that those who are engaged on task basis, per se are excluded from the SIL and
holiday payment since this is what the LC provisions n contrast with the IRR, strongly suggest.
However in 1987 in the case of Cebu Institute of Technology vs. Ople the phrase those who are engage on task or contract basis in the rule has already
been interpreted should however, be related with "field personnel" applying the rule on ejusdem generis that general and unlimited terms are restrained
and limited by the particular terms that they follow xxx Clearly, petitioner's teaching personnel cannot be deemed field personnel which refers "to non-
agricultural 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. [Par. 3, Article 82, Labor Code of the Philippines]. Petitioner's claim that private
respondents are not entitled to the service incentive leave benefit cannot therefore be sustained.
In short the payment of an employee on a pakyaw basis alone is insufficient to exclude one from the coverage of SIL and holiday pay. They are only
exempted only if they qualify as Field personal Therefore the IRR validly qualifies and limits the exclusion of workers paid by results found in Art 82 from
the coverage of holiday and SIL pay. This is the only reasonable interpretation since the determination of excluded workers who are paid by results is
determined by the Sec. of Labor in appropriate regulations.
The Cebu Institute of Technology was reiterated in 2005 in Autobus Transport systems vs. Bautista. The Autobus ruling in turn was the basis of Serrano v.
Santos Transit which the CA cited in support of granting Macasios petition.
In Serrano, the Court, applying the rule on ejusdem generis declared that "employees engaged on task or contract basis xxx are not automatically
exempted from the grant of service incentive leave, unless, they fall under the classification of field personnel." The Court explained that the phrase
"including those who are engaged on task or contract basis, purely commission basis" found in Section 1(d), Rule V of Book III of the IRR should not be
understood as a separate classification of employees to which SIL shall not be granted. Rather, as with its preceding phrase - "other employees whose
performance is unsupervised by the employer" - the phrase "including those who are engaged on task or contract basis" serves to amplify the
interpretation of the Labor Code definition of "field personnel" as those "whose actual hours of work in the field cannot be determined with reasonable
certainty."
In determining whether workers engaged on pakyaw basis is entitled to holiday and SIL pay the presence of employer supervision as regards the workers
time and performance is the key if the worker is simply engaged on pakyaw basis, then the general rule is that he is enttilted to a holiday pay and SIL pay
unless exempted from the exceptions specifically provided under Art 94 Art 95 of the LC. However, if the worker engaged on pakyaw or task basis also
falls within the meaning of field personnel under the law then he is not entitled to these monetary benefits.
Macasio does not fall under the classification of field personnel. Based on the definition in Art 82. The SC agrees that Macasio does not fall under the
definition of field personnel since Macasio regularly performed his duties at Davids place of business and his actual hours of work could be determined
with reasonable certainty and David supervised his time and performance thus Macasio cannot be considered a field personnel then he is not exempted
from the grant of holiday, SIL pay
However for the 13th month pay, the governing law is PD 851, 131th month pay generally covers all employees excluding those expressly enumerated to
be exempted. And under PD 851 those who are paid in a task basis is exempted

3. Asian Transmission Corporation vs Court of Appeals, Froilan M. Bacungan AUTHOR: The Talio
(Voluntary Arbitrator), Kishin A. Lalwani, Bisig ng Asian Transmission Labor NOTES: Short and Easy Case
Union, Bienvenido T. Laguesma (Sec. of Labor), and Chita G. Clindra (Director of ATC Asian Transmission Corporation
Bureau of Working Conditions) BATLU Bisig ng Asian Transmission Labor Union
[G.R. No. 144664; March 15, 2004]
TOPIC: 15.2 Holidays Holiday Pay
PONENTE: Carpio-Morales, J.
CASE LAW/ DOCTRINE:
Art. 94 of the Labor Code, as amended, affords a worker the enjoyment of 10 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.
FACTS:
DOLE, through Undersecretary Cresenciano B. Trajano, issued an Explanatory Bulletin dated Mar. 11, 1993 wherein it clarified, inter alia, that employees are
entitled to 200% of their basic wage on Apr. 9, 1993, whether unworked, which, apart from being Good Friday [and, therefore, a legal holiday], is also Araw ng
Kagitingan [which is also a legal holiday].
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., 2 regular holidays
falling on the same day, this Department is of the view that the covered employees are entitled to at least 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.
The bulletin was reproduced on Jan. 23, 1998, when Apr. 9, 1998 was both Maundy Thursday and Araw ng Kagitingan.
Despite the explanatory bulletin, ATC opted to pay its daily paid employees only 100% of their basic pay on Apr. 9, 1998. BATLU protested.
In accordance with Step 6 of the grievance procedure of the CBA existing between ATC and BATLU, the controversy was submitted for voluntary arbitration.
Bacungan (Voluntary Arbitrator) rendered a decision directing ATC to pay its covered employees "200% and not just 100% of their regular daily wages for the
unworked Apr. 9, 1998 which covers 2 regular holidays, namely, Araw ng Kagitignan and Maundy Thursday."
In deciding in favor of BATLU, Bacungan held that:
o Art. 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 2 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
o that the law (as amended) enumerates 10 regular holidays for every year should not be interpreted as authorizing a reduction to 9 the number of
paid regular holidays "just because Apr. 9 (Araw ng Kagitingan) in certain years, like 1993 and 1998, is also Holy Friday or Maundy Thursday."
CA: Upheld the findings of Bacungan, holding that the CBA between ATC and BATLU recognizes their intent to consider Araw ng Kagitingan and Maundy
Thursday, on whatever date they may fall in any calendar year, as paid legal holidays during the effectivity of the CBA and that "there is no condition,
qualification or exception for any variance from the clear intent that all holidays shall be compensated." Also, in the absence of an explicit provision in law which
provides for a reduction of holiday pay if 2 holidays happen to fall on the same day, any doubt in the interpretation and implementation of the Labor Code
provisions on holiday pay must be resolved in favor of labor.
ISSUE: WON BATLU should be paid 200% of their regular daily wages. (Another Way: WON daily-paid employees are entitled to be paid for two regular holidays which
fall on the same day.)
HELD: Yepperz.
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." 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.
Art. 94 of the Labor Code, as amended, affords a worker the enjoyment of 10 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.
In the case at bar, there is nothing in the law which provides or indicates that the entitlement to ten days of holiday pay shall be reduced to nine when two
holidays fall on the same day.
ATCs assertion that Wellington v. Trajano has "overruled" the DOLE March 11, 1993 Explanatory Bulletin does not lie. In Wellington, the issue was
whether monthly-paid employees are entitled to an additional days pay if a holiday falls on a Sunday. This Court, in answering the issue in the negative,
observed that in fixing the monthly salary of its employees, Wellington took into account "every working day of the year including the holidays specified by
law and excluding only Sunday." In the instant case, the issue is whether daily-paid employees are entitled to be paid for two regular holidays which fall on the
same day.
Sec. 11, Rule IV, Book III of the Omnibus Rules to Implement the Labor Code provides that "Nothing in the law or the rules shall justify an employer in
withdrawing or reducing any benefits, supplements or payments for unworked regular holidays as provided in existing individual or collective agreement or
employer practice or policy."

4. JOSE RIZAL COLLEGE vs NLRC and NATIONAL ALLIANCE OF TEACHERS/OFFICE AUTHOR: TAN
WORKERS [G.R. No. L-65482 December 1, 1987] NOTES:
TOPIC: Holiday Pay PONENTE: Paras, J
CASE LAW/ DOCTRINE: The purpose of a holiday pay is to prevent diminution of the monthly income of the workers because work interruptions. In other words,
although the worker is forced to take a rest, he earns what he should earn.
FACTS:
Jose Rizal College is a non-stock, non-profit educational institution duly organized and existing under the laws of the Philippines. It has three groups of
employees categorized as follows:
a) personnel on monthly basis, who receive their monthly salary uniformly throughout the year, irrespective of the actual number of working days in a
month without deduction for holidays;
b) personnel on daily basis who are paid on actual days worked and they receive unworked holiday pay and
 c) collegiate faculty who are paid on the basis of student contract hour.
Unable to receive their corresponding holiday pay, as claimed, from 1975 to 1977, private respondent National Alliance of Teachers and Office Workers
(NATOW) in behalf of the faculty and personnel of Jose Rizal College filed with the Ministry of Labor a complaint against the college for said alleged non-
payment of holiday pay.
Due to the failure of the parties to settle their differences on conciliation, the case was certified for compulsory arbitration.
LA:
1. Personnel on monthly basis are not entitled to separate payment for unworked regular holidays. They are paid uniformly in a school year,
irrespective of the number of working days in a month, without deduction for holidays, and are presumed to be already paid the 10 paid legal
holidays;
2. Personnel on daily basis are entitled to be paid the 10 unworked regular holidays according to the pertinent provisions of the Rules and Regulations
Implementing the Labor Code;
3. Collegiate faculty of the respondent Jose Rizal College who are paid compensation per student contract hour are not entitled to unworked regular
holiday pay considering that these regular holidays have been excluded in the programming of the student contact hours.
NLRC: modified the decision of the LA in the sense that teaching personnel paid by the hour are declared to be entitled to holiday pay.
ISSUE(S): Whether the school faculty who, per their contracts, are paid per lecture hour are entitled to unworked holiday pay.
HELD: QUALIFIED YES. If REGULAR holidays, NOT ENTITLED. If SPECIAL holidays, ENTITLED.
Petitioner argues:
o That it is not covered by Book V of the Labor Code on Labor Relations considering that it is a non- profit institution and that its hourly paid faculty
members are paid on a "contract" basis because they are required to hold classes for a particular number of hours.
o In the programming of these student contract hours, legal holidays are excluded and labelled in the schedule as "no class day. "
o On the other hand, if a regular week day is declared a holiday, the school calendar is extended to compensate for that day.
o Thus the advent of any of the legal holidays within the semester will not affect the faculty's salary because this day is not included in their schedule
while the calendar is extended to compensate for special holidays.
o Thus the programmed number of lecture hours is not diminished.
Solicitor General argues:
o That under Article 94 of the Labor Code (P.D. No. 442 as amended), holiday pay applies to all employees except those in retail and service
establishments.
o That to deprive employees paid at an hourly rate of unworked holiday pay is contrary to the policy considerations underlying such presidential
enactment, and its precursor, the Blue Sunday Law (Republic Act No. 946) apart from the constitutional mandate to grant greater rights to labor.
Subject holiday pay is provided for in the Labor Code (Presidential Decree No. 442, as amended), which reads:
Art. 94. 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 in the Implementing Rules and Regulations, Rule IV, Book III, which reads:
SEC. 8. Holiday pay of certain employees. (a) Private school teachers, including faculty members of colleges and universities, may not be paid for
the regular holidays during semestral vacations. They shall, however, be paid for the regular holidays during Christmas vacations.
Under the foregoing provisions, apparently, the petitioner, although a non-profit institution is under obligation to give pay even on unworked regular holidays
to hourly paid faculty members subject to the terms and conditions provided for therein.
However, the Court believes that the implementing rule is not justified by the provisions of the law which after all is silent with respect to faculty members paid
by the hour who because of their teaching contracts are obliged to work and consent to be paid only for work actually done (except when an emergency or a
fortuitous event or a national need calls for the declaration of special holidays). Regular holidays specified as such by law are known to both school and faculty
members as no class days;" certainly the latter do not expect payment for said unworked days, and this was clearly in their minds when they entered into the
teaching contracts.
On the other hand, both the law and the Implementing Rules governing holiday pay are silent as to payment on Special Public Holidays.
The declared purpose of the holiday pay which is the prevention of diminution of the monthly income of the employees because work interruptions is defeated
when a regular class day is cancelled because a special public holiday and class hours are held on another working day to make up for time lost in the school
calendar. Otherwise stated, the faculty member, although forced to take a rest, does not earn what he should earn on that day. Be it noted that when a special
public holiday is declared, the faculty member paid by the hour is deprived of expected income, and it does not matter that the school calendar is extended in
view of the days or hours lost, for their income that could be earned from other sources is lost during the extended days. Similarly, when classes are called off or
shortened because typhoons, floods, rallies, and the like, these faculty members must likewise be paid, whether extensions are ordered.

5. Trans-Asia Phils. Employees Association (TAPEA) v. NLRC AUTHOR: TIGLAO

[G.R. No. 118289 | 13 December 1999] NOTES: TAPEA is the duly recognized CB agent of the monthly-paid rank and file
TOPIC: Holiday Pay | PONENTE: J. Kapunan employees.
CASE LAW/ DOCTRINE: The proper divisor that should be used for a situation wherein the employees do not work and are not considered paid on Saturdays and
Sundays or rest days is 262 days. In the present case, since the employees of Trans-Asia are required to work half-day on Saturdays, 26 days should be added to the
divisor of 262 days, thus, resulting to 288 days. However, due to the fact that the rest days of petitioners fall on a Sunday, the number of unworked but paid legal
holidays should be reduced to nine (9), instead of ten (10), since one legal holiday under E.O. No. 203 always falls on the last Sunday of August, National Heroes Day.
Thus, the divisor that should be used in the present case should be 287 days.
FACTS:
On 7 July 1988, Trans-Asia Philippines Employees Association (TAPEA) entered into a Collective Bargaining Agreement (CBA) with their employer. The CBA
provided for, among others, the payment of holiday pay with a stipulation that if an employee is permitted to work on a legal holiday, the said employee will
receive a salary equivalent to 200% of the regular daily wage plus a 60% premium pay.
Despite the conclusion of the CBA, however, an issue was still left unresolved with regard to the claim of TAPEA for payment of holiday pay. Since the parties
were not able to arrive at an amicable settlement despite the conciliation meetings, TAPEA, led by its President, petitioner Arnie Galvez, filed a complaint for the
payment of their holiday pay in arrears. On 18 September 1988, petitioners amended their complaint to include the payment of holiday pay for the duration of
the recently concluded CBA (from 1988 to 1991), unfair labor practice, damages and attorneys fees.
In their Position Paper, TAPEA contended that their claim for holiday pay in arrears is based on the non-inclusion of the same in their monthly pay.
In response, Trans-Asia contended that it has always honored the labor law provisions on holiday pay by incorporating the same in the payment of the monthly
salaries of its employees. In support of this claim, Trans-Asia pointed out that it has long been the standing practice of the company to use the divisor of 286
days in computing for its employees overtime pay and daily rate deductions for absences.
 52 x 44 / 8 = 286 days
Where: 52 = number of weeks in a year
44 = number of work hours per week
8 = number of work hours per day
Trans-Asia further clarified that the 286 days divisor already takes into account the ten (10) regular holidays in a year since it only subtracts from the 365
calendar days the unworked and unpaid 52 Sundays and 26 Saturdays (employees are required to work half-day during Saturdays). Trans-Asia claimed that if the
ten (10) regular holidays were not included in the computation of their employees monthly salary, the divisor which they would have used would only be 277
days which is arrived at by subtracting 52 Sundays, 26 Saturdays and the 10 legal holidays from 365 calendar days.
Labor Arbiter: Dismissed the complaint. Ruled in favor of Trans Asia.
NLRC: Affirmed the LAs Decision.
ISSUE(S): W/N the Trans-Asias use of the the 286 days as divisor is invalid.
HELD: No. Affirmed with modification. HOWEVER, Trans-Asia is ordered to adjust its divisor to 287 days.
Trans-Asias inclusion of holiday pay in petitioners monthly salary is clearly established by its consistent use of the divisor of 286 days in the computation of
its employees benefits and deductions. Since the ten (10) legal holidays were never included in subtracting the unworked and unpaid days in a calendar year,
the only logical conclusion would be that the payment for holiday pay is already incorporated into the said divisor.
When viewed against this very convincing piece of evidence, the arguments regarding the pre-condition stated in the Employees Manual for entitlement to
holiday pay, the absence of a stipulation in the employees appointment papers for the inclusion of holiday pay in their monthly salary, and the stipulation in the
CBA recognizing the entitlement of the petitioners to holiday pay with a concomitant provision for the granting of an allegedly very generous holiday pay rate,
would appear to be merely inferences and suppositions.
The Court said that TAPEAs reliance to the case of Chartered Bank Employees Association v. Ople for its allegation on the generous holiday pay rate cannot be
held true because the facts are very different. In the mentioned case, the bank used different divisors in computing for its employees benefits and deductions.
Due to this confusing situation, the Court declared that there existed a doubt as to whether holiday pay is already incorporated in the employees monthly
salary; and doubts should be resolved in favor of labor.
The Court then noted that there is a need to adjust the divisor used by Trans-Asia to 287 days instead of only 286 days. This will account for the entirety of
regular holidays and special days in a year as prescribed by Executive Order No. 203 and Republic Act No. 6727 which a suggested Formula in Determining the
Equivalent Monthly Statutory Minimum Wage Rates. Based on both the proper divisor that should be used for a situation wherein the employees do not work
and are not considered paid on Saturdays and Sundays or rest days is 262 days. In the present case, since the employees of Trans-Asia are required to work half
day on Saturdays, 26 days should be added to the divisor of 262 days, thus, resulting to 288 days. However, due to the fact that the rest days of petitioners fall
on a Sunday, the number of unworked but paid legal holidays should be reduced to nine (9), instead of ten (10), since one legal holiday under E.O. No. 203
always fall on the last Sunday of August, National Heroes Day.
However, the Court noted that if the divisor is increased to 287 days, the resulting daily rate for purposes of overtime pay, holiday pay and conversions of
accumulated leaves would be diminished. If, for example, a worker had an 8000 peso/monthly salary, his daily rate would be 335.66 (286 days), while it would
be 334.49 in the alternative (287 days).
Clearly, this muddled situation would be violative of the proscription on the non-diminution of benefits under Section 100 of the Labor Code. In view of this
situation, the Court ruled that the adjusted divisor of 287 days should only be used by Trans-Asia for computations which would be advantageous (e.g. if it used
for purposes of computing for deductions due to employees absences).

06. Union of Filipro Employees (UFE) vs Benigno Vivar, Jr., NLRC, and Nestle AUTHOR: Talino , VALERA(added several discussion on the computation for
Philippines, Inc. [G.R. No. 79255; January 20, 1992] wages with consideration of holiday pay)
TOPIC: 13.3.3 Exemptions Field Personnel PONENTE: Gutierrez, Jr., J. NOTES:
UFE Union of Filipro Employees
CASE LAW/ DOCTRINE:
Under Art. 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 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.
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:
(e) Field personnel and other employees whose time and performance is unsupervised by the employer .
FACTS:
Nov. 8, 1985 Nestle Philippines (formerly known as Filipro, Inc.) filed with the 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.
Both Nestle and the UFE agreed to submit the case for voluntary arbitration and appointed Vivar as voluntary arbitrator.
Jan. 2, 1980 - Vivar rendered a decision directing Nestle to pay its monthly paid employees holiday pay pursuant to Art. 94 of the Code, subject only to the
exclusions and limitations specified in Art. 82 and such other legal restrictions as are provided for in the Code.
Nestle filed a motion for clarification seeking
o the limitation of the award to 3 years;
o 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
o deduction from the holiday pay award of overpayment for overtime, night differential, vacation and sick leave benefits due to the use of 251 divisor.
UFE answered that:
o the award should be made effective from the date of effectivity of the Labor Code;
o that their sales personnel are not field personnel and are therefore entitled to holiday pay; and
o that the use of 251 as divisor is an established employee benefit which cannot be diminished.
Jan. 14, 1986 Vivar issued an order declaring that the effectivity of the holiday pay award shall retroact to Nov. 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.
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.
Both Nestle and UFE filed their respective motions for partial reconsideration. Vivar treated the two motions as appeals and forwarded the case to the NLRC
which issued a resolution remanding the case to Vivar on the ground that it has no jurisdiction to review decisions in voluntary arbitration cases pursuant to Art.
263 of the Labor Code as amended by Sec. 10 of BP Blg. 130, and as implemented by Sec. 5 of the rules implementing BP Blg. 130.
July 6, 1987 - Vivar 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.
ISSUE: WON Nestles sales personnel are entitled to holiday pay.
HELD: No I wont wait forever
Under Art. 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. UFE 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 disquisition by the respondent arbitrator.
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:
(e) Field personnel and other employees whose time and performance is unsupervised by the employer .
While contending that such rule added another element not found in the law, UFE nevertheless attempted to show that its affected members are not covered
by the abovementioned rule. UFE 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.
Contrary to the contention of UFE, 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 Art. 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.
UFE 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.
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.

RE the DIVISOR FOR INCLUDING HOLIDAY

Arbitrator Vivars rational for his decision, is that the divisor no longer 251 but 261 since the ordered payment of 10 holidays adds to the basis of
conversion, 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.
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 was the thrust in the courts decision of Chartered Bank Employees Association v. Ople.
The court fnded that in this case, the computation of daily ratio is the ((monthly rate x12) / 251 days) and following the criterion in Chartered Banks, the
use of 251 days as divisor by Filipro indicates that holiday pay is not yet included in the employees salary, other wise the divisor should have been 261.
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.
Filipro/Nestles invocation of solute indebiti, due to its use of 251 days as divisor must fail because of the Labor Codes mandate that all doubts in the
interpretation shall be resolved in favor of Labor. Moreover before to sept 1, 1980 when the company was on a 6 day working sched, the divisor used was
303, indicating that the 10 holidays were also not paid. When they shifted a 5 day working sched on Sept 1, 1980, they had the chance to correct its error,
if ever there was one but did not doo so It is now too late to allege payment by mistake.

07 Wellington Investment and Manufacturing AUTHOR: Adre

Corporation vs. CRESENCIANO B. TRAJANO, NOTES: The case is a special civil action of certiorari in an attempt to nullify the orders of Regional Director.
Under-Secretary of Labor and Employment, Detailed yung Ratio kasi mahaba yung explanation ng Court.
ELMER ABADILLA, and 34 others Rule X, Book III of the Implementing Rules, giving the Regional Director power
[245 SCRA 561, G.R. No. 114698 July 3, 1995] . . . to order and administer (in cases where employer-employee relations still exist), after due notice and hearing,
TOPIC: Sunday compliance with the labor standards provisions of the Code and the other labor legislations based on the findings of
PONENTE: NARVASA, C.J their Regulations Officers or Industrial Safety Engineers (Labor Standard and Welfare Officers) and made in the
course of inspection, and to issue writs of execution to the appropriate authority for the enforcement of his order,
in line with the provisions of Article 128 in relation to Articles 289 and 290 of the Labor Code, as amended. . . .
CASE LAW/ DOCTRINE: A legal holiday falling on a Sunday does not create an additional workday and creates no obligation for the employer to pay extra, aside from
the usual holiday pay, to its monthly-paid employees.
FACTS:
The case arose from a routine inspection conducted by a Labor Enforcement Officer on August 6, 1991 of the Wellington Flour Mills, an establishment owned
and operated by petitioner Wellington Investment and Manufacturing Corporation (Wellington).
The officer drew up a report, a copy of which was "explained to and received by" Wellington's personnel manager
o his finding was "(n)on-payment of regular holidays falling on a Sunday for monthly-paid employees.
Wellington sought reconsideration of the Labor Inspector's report, by letter dated August 10, 1991.
It argued that "the monthly salary of the company's monthly-salaried employees already includes holiday pay for all regular holidays . . . (and hence) there
is no legal basis for the finding of alleged non-payment of regular holidays falling on a Sunday."
o It expounded on this thesis in a position paper subsequently submitted to the Regional Director, asserting that it pays its monthly-paid employees
a fixed monthly compensation "using the 314 factor which undeniably covers and already includes payment for all the working days in a month as
well as all the 10 unworked regular holidays within a year."
Regional Director was not persuaded.
o ruled that "when a regular holiday falls on a Sunday, an extra or additional working day is created and the employer has the obligation to pay the
employees for the extra day except the last Sunday of August since the payment for the said holiday is already included in the 314 factor,"
o directed Wellington to pay its employees compensation corresponding to four (4) extra working days
Wellington filed MR: It pointed out that it was in effect being compelled to "shell out an additional pay for an alleged extra working day" despite its
complete payment of all compensation lawfully due its workers, using the 314 factor.
o Its motion was treated as an appeal and was acted on by respondent Undersecretary. It held that "the divisor being used by the respondent
(Wellington) does not reliably reflect the actual working days in a year, " and consequently commanded Wellington to pay its employees the "six
additional working days resulting from regular holidays falling on Sundays in 1988, 1989 and 1990."
o Wellington moved for reconsideration: DENIED.
Wellington filed the case at bar
Contention of Labor Officer:
Discovered that in certain years, two or three regular holidays had fallen on Sundays.
He reasoned that this had precluded the enjoyment by the employees of a non-working day, and the employees had consequently had to work an additional
day for that month.
This ratiocination received the approval of his Regional Director who opined that "when a regular holiday falls on a Sunday, an extra or additional working
day is created and the employer has the obligation to pay its employees for the extra day except the last Sunday of August since the payment for the said
holiday is already included in the 314 factor.
Contention of Undersecretary:
pointed out that in 1988 there was "an increase of three (3) working days resulting from regular holidays falling on Sundays;" hence Wellington "should pay
for 317 days, instead of 314 days."
theorized that there should be additional payment by Wellington to its monthly-paid employees for "an increment of three (3) working days" for 1989 and
again, for 1990. What he is saying is that in those years, Wellington should have used the "317 factor," not the "314 factor."
Public respondents argue that their challenged conclusions and dispositions may be justified by Section 2, Rule X, Book III of the Implementing Rules.
ISSUE(S): whether or not a monthly-paid employee, receiving a fixed monthly compensation, is entitled to an additional pay aside from his usual holiday pay,
whenever a regular holiday falls on a Sunday.
HELD: NO!
Every worker should, according to the Labor Code, "be paid his regular daily wage during regular holidays, except in retail and service establishments regularly
employing less than ten (10) workers;" this, of course, even if the worker does no work on these holidays. The regular holidays include: "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 of December, and the
day designated by law for holding a general election (or national referendum or plebiscite).

Particularly as regards employees "who are uniformly paid by the month, "the monthly minimum wage shall not be less than the statutory minimum wage multiplied
by 365 days divided by twelve." This monthly salary shall serve as compensation "for all days in the month whether worked or not," and "irrespective of the number
of working days therein."

In other words, whether the month is of thirty (30) or thirty-one (31) days' duration, or twenty-eight (28) or twenty-nine (29) (as in February), the employee is
entitled to receive the entire monthly salary.
So, too, in the event of the declaration of any special holiday, or any fortuitous cause precluding work on any particular day or days (such as transportation strikes,
riots, or typhoons or other natural calamities), the employee is entitled to the salary for the entire month and the employer has no right to deduct the
proportionate amount corresponding to the days when no work was done.
The monthly compensation is evidently intended precisely to avoid computations and adjustments resulting from the contingencies just mentioned which are
routinely made in the case of workers paid on daily basis.

In Wellington's case, there seems to be no question that at the time of the inspection conducted by the Labor Enforcement Officer on August 6, 1991, it was and had
been paying its employees "a salary of not less than the statutory or established minimum wage," and that the monthly salary thus paid was "not . . . less than the
statutory minimum wage multiplied by 365 days divided by twelve," supra. There is, in other words, no issue that to this extent, Wellington complied with the
minimum norm laid down by law.
Apparently the monthly salary was fixed by Wellington to provide for compensation for every working day of the year including the holidays specified by
law and excluding only Sundays. In fixing the salary, Wellington used what it calls the "314 factor;" that is to say, it simply deducted 51 Sundays from the
365 days normally comprising a year and used the difference, 314, as basis for determining the monthly salary. The monthly salary thus fixed actually
 covers payment for 314 days of the year, including regular and special holidays, as well as days when no work is done by reason of fortuitous cause, as
above specified, or causes not attributable to the employees.

The respondents' theory would make each of the years in question (1988, 1989, 1990), a year of 368 days. Pursuant to this theory, no employer opting to pay his
employees by the month would have any definite basis to determine the number of days in a year for which compensation should be given to his work force. He
would have to ascertain the number of times legal holidays would fall on Sundays in all the years of the expected or extrapolated lifetime of his business.
Alternatively, he would be compelled to make adjustments in his employees' monthly salaries every year, depending on the number of times that a legal holiday fell
on a Sunday.

There is no provision of law requiring any employer to make such adjustments in the monthly salary rate set by him to take account of legal holidays falling on
Sundays in a given year, or, contrary to the legal provisions bearing on the point, otherwise to reckon a year at more than 365 days. As earlier mentioned, what
the law requires of employers opting to pay by the month is to assure that "the monthly minimum wage shall not be less than the statutory minimum wage
multiplied by 365 days divided by twelve," and to pay that salary "for all days in the month whether worked or not," and "irrespective of the number of working
days therein.

08. SAN MIGUEL CORPORATION v. THE HONORABLE COURT OF APPEALS-FORMER THIRTEENTH DIVISION, HON. UNDERSECRETARY JOSE AUTHOR: ACIDO
M. ESPAOL, JR., Hon. CRESENCIANO B. TRAJANO, and HON. REGIONAL DIRECTOR ALLAN M. MACARAYA [G.R. No. 146775, Jan 30, 2002] NOTES:
TOPIC: Muslim holiday PONENTE: Kapunan, J.
CASE LAW/ DOCTRINE:
There should be no distinction between Muslims and non-Muslims as regards payment of benefits for Muslim holidays.
FACTS:
October 17, 1992: DOLEs Iligan District Office conducted a routine inspection in San Miguel Corporations premises in Sta. Filomena, Iligan, during which it was
found that there was underpayment by SMC of regular Muslim holiday pay to its employees.
DOLE sent a copy of the inspection results to SMC, received by and explained to its personnel officer Elena dela Puerta. Despite SMCs contest of the findings
and DOLEs conduct of summary hearings, SMC failed to submit proof that it was paying regular Muslim holiday pay to its employees.
A compliance order dated December 17, 1993 was issued by the Director Alan Macaraya of the DOLE Iligan District Office, directing SMC to consider Muslim
holidays as regular holidays and to pay both its Muslim and non-Muslim employees holiday pay within 30 days from the receipt of the order.
DOLE main office: Dismissed SMCs appeal first for being late, then for lack of merit.
SC via petition for certiorari: Referred case to the CA pursuant to St. Martin Funeral Homes v. NLRC
CA: Modified Directors Order with regard to the payment of Muslim holiday pay from 200% to 150% of the employee's basic salary; remanded to Regional
Director for computation.
Hence this petition for certiorari (under Rule 65, sabi ng SC Rule 45 dapat, pero siyempre tinuloy pa rin ng SC haha)
ISSUE: Whether or not both Muslim and non-Muslim employees are entitled to Muslim holiday pay.
HELD: Yes. Petition dismissed.
Muslim holidays are provided under Articles 169 and 170, Title I, Book V, of Presidential Decree No. 1083,8 otherwise known as the Code of Muslim Personal
Laws, which states:
Art. 169. Official Muslim holidays. - The following are hereby recognized as legal Muslim holidays:
(a) Amun Jadd (New Year), which falls on the first day of the first lunar month of Muharram;
(b) Maulid-un-Nab (Birthday of the Prophet Muhammad), which falls on the twelfth day of the third lunar month of Rabi-ul-Awwal;
(c) Lailatul Isr Wal Mirj (Nocturnal Journey and Ascension of the Prophet Muhammad), which falls on the twenty-seventh day of the seventh lunar month of
Rajab;
(d) d-ul-Fitr (Hari Raya Puasa), which falls on the first day of the tenth lunar month of Shawwal, commemorating the end of the fasting season; and
(e) d-l-Adh (Hari Raya Haji),which falls on the tenth day of the twelfth lunar month of Dhl-Hijja.
Art. 170. Provinces and cities where officially observed. - (1) Muslim holidays shall be officially observed in the Provinces of Basilan, Lanao del Norte, Lanao del
Sur, Maguindanao, North Cotabato, Iligan, Marawi, Pagadian, and Zamboanga and in such other Muslim provinces and cities as may hereafter be created;
(2) Upon proclamation by the President of the Philippines, Muslim holidays may also be officially observed in other provinces and cities.
The foregoing provisions should be read in conjunction with Article 94 of the Labor Code, which provides:
Art. 94. 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; x x x.
Petitioner asserts that Article 3(3) of Presidential Decree No. 1083 provides that "(t)he provisions of this Code shall be applicable only to Muslims x x x."
However, there should be no distinction between Muslims and non-Muslims as regards payment of benefits for Muslim holidays. At any rate, Article 3(3) of
Presidential Decree No. 1083 also declares that "x x x nothing herein shall be construed to operate to the prejudice of a non-Muslim."
In addition, the 1999 Handbook on Workers Statutory Benefits, approved by then DOLE Secretary Bienvenido E. Laguesma on 14 December 1999 categorically
stated: Considering that all private corporations, offices, agencies, and entities or establishments operating within the designated Muslim provinces and cities
are required to observe Muslim holidays, both Muslim and Christians working within the Muslim areas may not report for work on the days designated by
law as Muslim holidays.
Issue on Regional Directors jurisdiction: he acted as the duly authorized representative of the Secretary of Labor and Employment and it was within his power
to issue the compliance order to SMC in the exercise of the visitorial and enforcement power.
The Court agrees with the Solicitor General that the petitioner did not deny that it was not paying Muslim holiday pay to its non-Muslim employees. Indeed,
petitioner merely contends that its non-Muslim employees are not entitled to Muslim holiday pay. Hence, the issue could be resolved even without
documentary proofs.
Finally, as regards the allegation that the issue on Muslim holiday pay was already resolved in NLRC CA No. M-000915-92 (Napoleon E. Fernan vs. San Miguel
Corporation Beer Division and Leopoldo Zaldarriaga), the Court notes that the case was primarily for illegal dismissal and the claim for benefits was only
incidental to the main case.

09 Re: Request of Muslim AUTHOR: Adre

Employees in the Different NOTES: wala naman na mention about Holiday Pay except sa Sec.3
Courts in Iligan City (Re: Sec. 2 (P.D. 322): a. Eid-ul-Fitr (Hariraya Puasa) - which falls on the 1st day of the lunar month of Shawwal commemorating the end of
Office Hours), A.M. No. 02-2- the fasting season;
10-SC, December 14, 2005 b. Eid-ul-Adha (Hariraya Haj) - which falls on the 10th day of the 12th Lunar month of Zul Hajj;
TOPIC: MUSLIM HOLIDAY c. Mauledan Nabi - Birthday of Prophet Mohammad (P.B.U.H), which falls on the 12th day of the 3rd Lunar month of Rabbiol-Awwal;
PONENTE: CALLEJO, SR., J d. Lailatul Isra Wal Miraj - (Ascension) which falls on the 27th day of the 8th Lunar month of Rajjab;
e. Muharram (Ashura) - which falls on the 10th Lunar month of Muharram; and
f. Amon Jaded (New Year) - which falls on the 1st day of the 1st Lunar month of Muharram.
Sec. 3. (a) During the fasting season on the month of Ramadan, all Muslim employees in the national government, government-
owned or controlled corporations, provinces, cities, municipalities and other instrumentalities shall observe office hours from seven-
thirty in the morning (7:30 a.m.) to three-thirty in the afternoon (3:30 p.m.) without lunch break or coffee breaks, and that there
shall be no diminution of salary or wages, provided, that the employee who is not fasting is not entitled to the benefit of this
provision.
(b) Regulations for the implementation of this section shall be issued together with the implementing directives on Muslim holidays.
CASE LAW/ DOCTRINE: The need of the State to prescribe government office hours as well as to enforce them uniformly to all civil servants cannot be disregarded.
With regard to their pay during the month of Ramdan, Sec. 3 (a) of P.D. No. 291, as amended by P.D. No. 322, there shall be no diminution of salary or wages,
provided, that the employee who is not fasting is not entitled to the benefit of this provision. (yan lang yung mention about pay/wages)

FACTS:
In a Letter dated November 19, 2001 addressed to Executive Judge Valerio M. Salazar, Regional Trial Court of Iligan City, several Muslim employees in the
different courts in the said city request that they be allowed to enjoy the following privileges:
o to hold office hours from 7:30 a.m. to 3:30 p.m. without lunch break or coffee breaks during the month of Ramadan;
o to be excused from work from 10:00 a.m. to 2:00 p.m. every Friday (Muslim Prayer Day) during the entire calendar year.
Request was forwarded to the Office of the Court Administrator (OCA).
Judge Salazar expressed his conformity with the first request:
o Allowing them to hold office from 7:30 a.m. to 3:30 p.m. without any break during the month of Ramadan.
o However, he expressed some misgivings about the second request, i.e., excusing them from work from 10:00 a.m. to 2:00 p.m. every Friday
during the entire calendar year
Muslim employees contention: They invoke Presidential Decree (P.D.) No. 291 as amended by P.D. No. 322 enacted by then President Ferdinand E.
Marcos.
o Purpose: reinforce national unity by recognizing Muslim holidays and making them part of our national holidays
o Section 2, as amended by P.D. No. 322, provided a list of recognized Muslim holidays and Muslims employees in the government are
excused from reporting to office during these holidays in order that they may be able to properly observe them.
o Section 3 of the same law, as amended by P.D. No. 322 further provided the working hours during the month of Ramadan
Civil Service Commission (CSC) promulgated Resolution No. 81-1277 dated November 13, 1981:
o During Ramadan the Fasting month (30 days) of the Muslims, the Civil Service official time of 8:00-12:00 and 1:00-5: 00 is modified
to 7:30 A.M. to 3:30 P.M. without noon break and the difference of 2 hours is not counted as undertime;
o During Friday, the Muslim pray day, Muslims are excused from work from 10 oclock in the morning to 2 oclock in the afternoon
Another Resolution was issued clarified that the term Friday in the above resolution is not limited to the Fridays during the month
of Ramadan, but refers to all Fridays of the calendar year.
However, in order not to run afoul of Section 5, Rule XVII of the Omnibus Rules Implementing Book V of Executive Order (E.O.) No. 292 which
enjoins civil servants to render public service not less than eight hours a day or forty (40) hours a week, the CSC prescribes the adoption of a
flexible working schedule to accommodate the Muslims Friday Prayer Day subject to certain conditions, e.g., the flexible working hours shall
not start earlier than 7:00 a.m. and end not later than 7:00 p.m.
Court required the Court Administrator to study the matter and Court Administrator Presbitero J. Velasco, Jr. recommend:
o that the Muslim employees in the Judiciary be allowed to hold flexible office hours from 7:30 a.m. to 3:30 p.m. without break
during the month of Ramadan. Further, that they be excused from work from 10:00 a.m. to 2:00 p.m. every Friday to allow them
to attend the Muslim Prayer Day.
o However, to compensate for the lost hours, they should be required to observe flexible working schedule which should start from
7:00 a.m. to 10:00 a.m. and from 2:00 p.m. to 7:00 p.m. every Friday. In that way, the working hours mandated by the civil service
rules is complied with.
ISSUE(S): WON the Court Administrators recommendation was proper.
HELD: ACCORDINGLY, the Court resolved to:
1. GRANT the request to allow the Muslim employees in the Judiciary to hold office hours from 7:30 a.m. to 3:30 p.m. without break during the month
of Ramadan pursuant to Section 3 (a) of Presidential Decree No. 291, as amended by Presidential Decree No. 322; and
2. DENY for lack of legal basis the request that the Muslim employees in the Judiciary be excused from work from 10:00 a.m. to 2:00 p.m. every Friday, the
Muslim Prayer Day, during the entire calendar year.
The need of the State to prescribe government office hours as well as to enforce them uniformly to all civil servants cannot be disregarded.
The Court recognizes that the observance of Ramadan and the Friday Muslim Prayer Day is integral to the Islamic faith. However, while the observance
of Ramadan and allowing the Muslim employees in the Judiciary to hold flexible office hours from 7:30 a.m. to 3:30 p.m. without any break during the
month of Ramadan finds support in Section 3 (a) of P.D. No. 291, as amended by P.D. No. 322, there is no such basis to excuse them from work from 10:00
a.m. to 2:00 p.m. every Friday, the Muslim Prayer Day, during the entire calendar year.
To allow the Muslim employees in the Judiciary to be excused from work from 10:00 a.m. to 2:00 p.m. every Friday (Muslim Prayer Day) during the entire
calendar year would mean a diminution of the prescribed government working hoursthe performance of religious practices, whether by the Muslim
employees or those belonging to other denominations, should not prejudice the court and the public.
o Because, they would be rendering service twelve (12) hours less than that required by the civil service rules for each month. Further, this would
encourage other religious denominations to request for similar treatment.
o The performance of religious practices, whether by the Muslim employees or those belonging to other religious denominations, should not
prejudice the courts and the public. Indeed, the exercise of religious freedom does not exempt anyone from compliance with reasonable
requirements of the law, including civil service laws.

PROPER REMEDY:
The remedy of the Muslim employees, with respect to their request to be excused from work from 10:00 a.m. to 2:00 p.m. every Friday during the entire calendar
year, is legislative, which is to ask Congress to enact a legislation expressly exempting them from compliance with the prescribed government working hours.
JUST IN CASE: The right to religious profession and worship has a two-fold aspect, viz., freedom to believe and freedom to act on ones beliefsthe first is absolute as
long as the belief is confined within the realm of thought but the second is subject to regulation where belief is translated into external acts that affect the public
welfare.The Court is not unmindful that the subject requests are grounded on Section 5, Article III of the Constitution: No law shall be made respecting an
establishment of religion, or prohibiting the free exercise thereof. The exercise and enjoyment of religious profession and worship, without discrimination or
preference, shall forever be allowed. No religious test shall be required for the exercise of civil and political rights. This provision contains two aspects: (1) the non-
establishment clause; and (2) the free exercise clause. The subject requests are based on the latter and in interpreting this clause (the free exercise clause) embodied
in the Constitution, the Court has consistently adhered to the doctrine that: The right to religious profession and worship has a two-fold aspect, viz., freedom to
believe and freedom to act on ones beliefs. The first is absolute as long as the belief is confined within the realm of thought. The second is subject to regulation
where the belief is translated into external acts that affect the public welfare.

10 David v. Macasio AUTHOR: Castro

[G.R. No. 195466. July 2, 2014] NOTES: Supra case (Boss Allens). Asked permission to use/edit his digest.
TOPIC: Service Incentive Leave Art. 95. Right to service incentive. (a) Every employee who has rendered at least one year of service shall be entitled to a yearly
Coverage service incentive leave of five days with pay.
PONENTE: Brion, J. (b) This provision shall not apply to those who are already enjoying the benefit herein provided, those enjoying vacation leave with
pay of at least five days and those employed in establishments regularly employing less than ten employees or in establishments
exempted from granting this benefit by the Secretary of Labor and Employment after considering the viability or financial condition
of such establishment.
CASE LAW/ DOCTRINE:
The payment of an employee on task or pakyaw basis alone is insufficient to exclude one from the coverage of SIL and holiday pay. They are exempted from the
coverage of Title I (including the holiday and SIL pay) only if they qualify as field personnel.
FACTS:
John Macasio filed a complaint against David, doing business under Yiels Hog Dealer, in the LA for non-payment of overtime pay, holiday pay, and 13th month
pay, and service incentive leave.
Macasio alleges that he had been working as a butcher for David since 1995.
o David sets the work day, reporting time and hogs to be chopped as well as the manner by which he was to perform his work
o David pays him a daily salary of P700 which was increased from P600 in 2007, P500 in 2006, and P400 in 2005.
o David Approved/Disapproved his leaves,
o David owned the hogs delivered for chopping as well as the tools and implements, rented the workspace and employs about 25 butchers and deliver
drivers.
David claims that he hired Macasio as a butcher on the pakyaw basis thus not entitled to the payment he is claiming in his complaint pursuant to the
provisions of the IRR of the Labor Code.

Labor Arbiter: dismissed Macasios complaint and concluded that he was engaged on a pakyaw basis thus not entitled to overtime, holiday, SIL and 13 month pay.
NLRC: affirmed the LAs ruling and ruled that since Macasio was paid by result and not in terms of the time spent, he is not covered by Labor standards law.
Court of Appeals: partly granted Macasios petition for certiorari and reversed the NLRC ruling. The CA awarded Macasios claim for holiday, SIL and 13 th month pay
for 3 years with 10% attorneys fees by denied his claim for moral and exemplary damages for lack of basis.

The CA found Macasio entitled to his monetary claims following the doctrine of Serrano v. Severino Santos Transit. The CA explained that as a Task Based employee,
Macasio is excluded from the coverage of the holiday, SIL and 13th month pay only if he is a field personnel.
ISSUE: Whether Macasio is entitled to service incentive leave pay
HELD: Yes. Since Macasio cannot be considered as a field personnel, then he is not exempted from the grant of holiday, SIL pay even as he was engaged on
pakyaw or task basis.
General rule: Holiday and SIL pay provisions cover all employees. To be excluded from their coverage, an employee must be one of those that these provisions
expressly exempt, strictly in accordance with the exemption.
Under the IRR, exemption from the coverage of holiday and SIL pay refer to field personnel and other employees whose time and performance is
unsupervised by the employer including those who are engaged on task or contract basis[.] Note that unlike Article 82 of the Labor Code, the IRR on holiday
and SIL pay do not exclude employees engaged on task basis as a separate and distinct category from employees classified as field personnel. Rather, these
employees are altogether merged into one classification of exempted employees.
Because of this difference, it may be argued that the Labor Code may be interpreted to mean that those who are engaged on task basis, per se, are excluded
from the SIL and holiday payment since this is what the Labor Code provisions, in contrast with the IRR, strongly suggest. The arguable interpretation of this rule
may be conceded to be within the discretion granted to the LA and NLRC as the quasi-judicial bodies with expertise on labor matters.
However, as early as 1987 in the case of Cebu Institute of Technology v. Ople, the phrase those who are engaged on task or contract basis in the rule has
already been interpreted to mean as follows: [the phrase] should however, be related with field personnel applying the rule on ejusdem generis that general
and unlimited terms are restrained and limited by the particular terms that they follow. x x x Clearly, petitioners teaching personnel cannot be deemed field
personnel which refers 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. [Par. 3, Article 82, Labor Code of the Philippines].
Petitioners claim that private respondents are not entitled to the service incentive leave benefit cannot therefore be sustained.
The payment of an employee on task or pakyaw basis alone is insufficient to exclude one from the coverage of SIL and holiday pay. They are exempted from the
coverage of Title I (including the holiday and SIL pay) only if they qualify as field personnel. The IRR therefore validly qualifies and limits the general exclusion
of workers paid by results found in Article 82 from the coverage of holiday and SIL pay. This is the only reasonable interpretation since the determination of
excluded workers who are paid by results from the coverage of Title I is determined by the Secretary of Labor in appropriate regulations.
The Cebu Institute Technology ruling was reiterated in 2005 in Auto Bus Transport Systems, Inc. v. Bautista: 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 Implementing Rules, Service Incentive Leave shall not apply to employees
classified as field personnel. 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, it serves as an amplification of the interpretation of the definition of
field personnel under the Labor Code as those whose actual hours of work in the field cannot be determined with reasonable certainty. The same is true with
respect to the phrase those who are engaged on task or contract basis, purely commission basis. Said phrase should be related with field personnel, applying
the rule on ejusdem generis that general and unlimited terms are restrained and limited by the particular terms that they follow.
Serrano v. Santos Transit: The Court, applying the rule on ejusdem generis declared that employees engaged on task or contract basis x x x are not
automatically exempted from the grant of service incentive leave, unless, they fall under the classification of field personnel. The Court explained that the
phrase including those who are engaged on task or contract basis, purely commission basis found in Section 1(d), Rule V of Book III of the IRR should not be
understood as a separate classification of employees to which SIL shall not be granted. Rather, as with its preceding phrase other employees whose
performance is unsupervised by the employer the phrase including those who are engaged on task or contract basis serves to amplify the interpretation of
 the Labor Code definition of field personnel as those whose actual hours of work in the field cannot be determined with reasonable certainty.
In contrast and in clear departure from settled case law, the LA and the NLRC still interpreted the Labor Code provisions and the IRR as exempting an employee
from the coverage of Title I of the Labor Code based simply and solely on the mode of payment of an employee. The NLRCs utter disregard of this consistent
jurisprudential ruling is a clear act of grave abuse of discretion. In other words, by dismissing Macasios complaint without considering whether Macasio was a
field personnel or not, the NLRC proceeded based on a significantly incomplete consideration of the case. This action clearly smacks of grave abuse of
discretion.

11. PHILIPPINE HOTELIERS, INC., DUSIT HOTEL NIKKO-MANILA v. NATIONAL UNION OF WORKERS IN HOTEL, RESTAURANT, AUTHOR: ACIDO
AND ALLIED INDUSTRIES (NUWHRAIN-APL-IUF)- DUSIT HOTEL NIKKO CHAPTER [G.R. No. 181972, Aug 25, 2009] Included the ECOLA issue because
TOPIC: Service Charges Covered employees/sharing PONENTE: Chico-Nazario, J. its linked to the service charge
issue.
CASE LAW/ DOCTRINE:
Article 96. Service charges. All service charges collected by hotels, restaurants and similar establishments shall be distributed at the rate of eighty-five percent
(85%) for all covered employees and fifteen percent (15%) for management. The share of employees shall be equally distributed among them. In case the
service charge is abolished, the share of the covered employees shall be considered integrated in their wages.
Since Dusit Hotel is explicitly mandated by the aforequoted statutory provision to pay its employees and management their respective shares in the service
charges collected, the hotel cannot claim that payment thereof to its 82 employees constitute substantial compliance with the payment of ECOLA under WO No.
9. Undoubtedly, the hotel employees right to their shares in the service charges collected by Dusit Hotel is distinct and separate from their right to ECOLA;
gratification by the hotel of one does not result in the satisfaction of the other.
FACTS:
November 5, 2001: Wage Order No. 9, approved by the Regional Tripartite Wages and Productivity Board (RTWPB) of the NCR, took effect, granting P30.00
ECOLA to particular employees and workers (of all private sectors) receiving daily wage rates of P250.00 up to P290.00.
March 20, 2002: Respondent National Union of Workers in Hotel, Restaurant and Allied Industries-Dusit Hotel Nikko Chapter (Union), through its President
Reynaldo C. Rasing, sent a letter to Director Alex Maraan DOLE-NCR, reporting the non-compliance of Dusit Hotel with WO No. 9, while there was an on-going
compulsory arbitration before the NLRC due to a bargaining deadlock between the Union and Dusit Hotel; and requesting immediate assistance on this matter.
Acting on Rasings letters, the DOLE-NCR sent Labor Standards Officer Estrellita Natividad to conduct an inspection of Dusit Hotel premises on April 24, 2002.
LSO Natividads Inspection Results Report dated May 2, 2002 stated: Based on interviews/affidavits of employees, they are receiving more than P290.00
average daily rate which is exempted from the compliance of Wage Order NCR-09.
By virtue of Rasings request for another inspection, LSO Natividad conducted a second inspection of Dusit Hotel premises on May 29, 2002. In her Inspection
Results Report dated May 29, 2002, LSO Natividad noted: Based on submitted payrolls & list of union members by NUWHRAIN-DUSIT HOTEL NIKKO Chapter,
there are one hundred forty-four (144) affected in the implementation of Wage Order No. NCR-09-> ECOLA covering the periods from Nov.5/01 to present.
Accordingly, the DOLE-NCR issued a Notice of Inspection Result directing Dusit Hotel to effect restitution and/or correction of the noted violations within 5
days from receipt of the Notice, and to submit any question on the findings of the labor inspector within the same period, otherwise, an order of compliance
would be issued.
In the meantime, the NLRC rendered a Decision dated October 9, 2002 in the compulsory arbitration involving the CBA deadlock between Dusit Hotel and
the Union granting the hotel employees wage increases:
Effective January 1, 2001- P500.00/month
Effective January 1, 2002- P550.00/month
Effective January 1, 2003- P600.00/month
October 22, 2002: Based on the results of the second inspection of Dusit Hotel premises, DOLE-NCR issued the Order directing Dusit Hotel to pay 144 of its
employees the total amount of P1,218,240.00, corresponding to their unpaid ECOLA under WO No. 9; plus, the penalty of double indemnity, pursuant to
Section 12 of Republic Act No. 6727, as amended by Republic Act No. 8188 (The employer concerned shall be ordered to pay an amount equivalent to double
the unpaid benefits owing to the employees: Provided, That payment of indemnity shall not absolve the employer from the criminal liability under this Act.)
Dusit Hotel filed an MR arguing that the NLRC Decision rendered the DOLE-NCR Order moot and academic. With the increase in the salaries of the hotel
employees ordered by the NLRC Decision, along with the hotel employees share in the service charges, the 144 hotel employees would already be receiving
salaries beyond the coverage of WO No. 9.
DOLE-NCR: Set aside October 22, 2002 Order and dismissed the Unions complaint against Dusit.
DOLE Secretary: Granted Unions appeal, declaring that the wage increase under the CBA finalized between Dusit Hotel and the Union shall not be credited as
compliance with WOs No. 8 and No. 9
MR to DOLE Secretary: Granted Dusit Hotels MR and reversed his earlier Order, stating that the said wage increase, taken together with the hotel employees
share in the service charges of Dusit Hotel, already constituted compliance with the WO No. 9.
CA: Favored the Union. Set aside [MR to DOLE Secretary] Order, reinstated [DOLE Secretary] Order.
ISSUE: Whether or not the receipt by the 82 (see below) hotel employees of their shares in the service charges already constituted substantial compliance with the
prescribed payment of ECOLA under WO No. 9.
HELD: No. Affirmed with modifications: (1) Dusit Hotel Nikko is ORDERED to pay its 82 employees who, after applying the salary increases for 1 January 2001, had
daily salaries of P250.00 to P290.00 the first tranch of Emergency Cost of Living Allowance, equivalent to P15.00 per day, from 5 November 2001 to 31 December
2001, within 10 days from finality of this Decision; and (2) the penalty for double indemnity is DELETED
Section 1 of WO No. 9 very plainly stated that only private sector workers and employees in the NCR receiving daily wage rates of P250.00 to P290.00 shall be
entitled to ECOLA. Necessarily, private sector workers and employees receiving daily wages of more than P290.00 were no longer entitled to ECOLA. The ECOLA
was to be implemented in two tranches: P15.00/day beginning 5 November 2001; and the full amount of P30.00/day beginning 1 February 2002. WO No. 9 took
effect on 5 November 2001. The Decision rendered by the NLRC on 9 October 2002 ordered Dusit Hotel to grant its employees salary increases retroactive to 1
January 2001 and 1 January 2002. In determining which of its employees were entitled to ECOLA, Dusit Hotel used as bases the daily salaries of its
employees, inclusive of the retroactive salary increases.
Dusit Hotel is not contending creditability of the hotel employees salary increases as compliance with the ECOLA mandated by WO No. 9. Creditability
means that Dusit Hotel would have been allowed to pay its employees the salary increases in place of the ECOLA required by WO No. 9. This, however, is not
what Dusit Hotel is after. The position of Dusit Hotel is merely that the salary increases should be taken into account in determining the employees
entitlement to ECOLA. The retroactive increases could raise the hotel employees daily salary rates above P290.00, consequently, placing said employees
beyond the coverage of WO No. 9.
The Court agrees with Dusit Hotel that the increased salaries of the employees should be used as bases for determining whether they were entitled to ECOLA
under WO No. 9. The increased salaries were the rightful salaries of the hotel employees by 1 January 2001, then again by 1 January 2002. Although belatedly
paid, the hotel employees still received their salary increases. It is only fair and just, therefore, that in determining entitlement of the hotel employees to
ECOLA, their increased salaries by 1 January 2001 and 1 January 2002 shall be made the bases. There is no logic in recognizing the salary increases for one
 purpose (i.e., to recover the unpaid amounts thereof) but not for the other (i.e., to determine entitlement to ECOLA). For the Court to rule otherwise would
be to sanction unjust enrichment on the part of the hotel employees, who would be receiving increases in their salaries, which would place them beyond the
coverage of Section 1 of WO No. 9, yet still be paid ECOLA under the very same provision.
The NLRC, in its Decision dated 9 October 2002, directed Dusit Hotel to increase the salaries of its employees by P500.00 per month, retroactive to 1 January
2001. After applying the said salary increase, only 82 hotel employees would have had daily salary rates falling within the range of P250.00 to P290.00. Thus,
upon the effectivity of WO No. 9 on 5 November 2001, only the said 82 employees were entitled to receive the first tranch of ECOLA, equivalent to P15.00 per
day. The NLRC Decision dated 9 October 2002 also ordered Dusit Hotel to effect a second round of increase in its employees salaries, equivalent to P550.00 per
month, retroactive to 1 January 2002. As a result of this increase, the daily salary rates of all hotel employees were already above P290.00. Consequently, by 1
January 2002, no more hotel employee was qualified to receive ECOLA.
It must be noted that the 82 hotel employees have a right to their share in the service charges collected by Dusit Hotel, pursuant to Article 96 of the Labor
Code of 1991. Since Dusit Hotel is explicitly mandated by the aforequoted statutory provision to pay its employees and management their respective shares
in the service charges collected, the hotel cannot claim that payment thereof to its 82 employees constitute substantial compliance with the payment of
ECOLA under WO No. 9. Undoubtedly, the hotel employees right to their shares in the service charges collected by Dusit Hotel is distinct and separate from
their right to ECOLA; gratification by the hotel of one does not result in the satisfaction of the other.