G.R. No. 198783 April 15, 2013
Sometime in September
ROYAL PLANT WORKERS UNION, Petitioner,
vs.
COCA-COLA BOTTLERS PHILIPPINES, INC.-CEBU PLANT,
Respondent.
DECISION
MENDOZA, J.:
Assailed in this petition is the May 24, 2011 Decision 1 and the
September 2, 2011 Resolution2 of the Court of Appeals (CA) in CA-
G.R. SP No. 05200, entitled Coca-Cola Bottlers Philippines, Inc.-
Cebu Plant v. Royal Plant Workers Union, which nullified and set
aside the June 11, 2010 Decision3 of the Voluntary Arbitration Panel
(Arbitration Committee) in a case involving the removal of chairs in
the bottling plant of Coca-Cola Bottlers Philippines, Inc. (CCBPI).
The Factual and Procedural
Antecedents
The factual and procedural antecedents have been accurately recited
in the May 24, 2011 CA decision as follows:
Petitioner Coca-Cola Bottlers Philippines, Inc. (CCBPI) is a domestic
corporation engaged in the manufacture, sale and distribution of
softdrink products. It has several bottling plants all over the country,
one of which is located in Cebu City. Under the employ of each
bottling plant are bottling operators. In the case of the plant in Cebu
City, there are 20 bottling operators who work for its Bottling Line 1
while there are 12-14 bottling operators who man its Bottling Line
2. All of them are male and they are members of herein respondent
Royal Plant Workers Union (ROPWU).
The bottling operators work in two shifts. The first shift is from 8
a.m. to 5 p.m. and the second shift is from 5 p.m. up to the time
production operations is finished. Thus, the second shift varies and
may end beyond eight (8) hours. However, the bottling operators
are compensated with overtime pay if the shift extends beyond eight
(8) hours. For Bottling Line 1, 10 bottling operators work for each
shift while 6 to 7 bottling operators work for each shift for Bottling
Line 2.
Each shift has rotations of work time and break time. Prior to
September 2008, the rotation is this: after two and a half (2 ½)
hours of work, the bottling operators are given a 30-minute break
and this goes on until the shift ends. In September 2008 and up to
the present, the rotation has changed and bottling operators are now
given a 30-minute break after one and one half (1 ½) hours of work.
In 1974, the bottling operators of then Bottling Line 2 were provided
with chairs upon their request. In 1988, the bottling operators of
then Bottling Line 1 followed suit and asked to be provided also with
chairs. Their request was likewise granted.
2008, the chairs provided for the operators were removed pursuant
to a national directive of petitioner. This directive is in line with the
"I Operate, I Maintain, I Clean" program of petitioner for bottling
operators, wherein every bottling operator is given the responsibility
to keep the machinery and equipment assigned to him clean and
safe. The program reinforces the task of bottling operators to
constantly move about in the performance of their duties and
responsibilities.
With this task of moving constantly to check on the machinery and
equipment assigned to him, a bottling operator does not need a chair
anymore, hence, petitioner’s directive to remove them.
Furthermore, CCBPI rationalized that the removal of the chairs is
implemented so that the bottling operators will avoid sleeping, thus,
prevent injuries to their persons. As bottling operators are working
with machines which consist of moving parts, it is imperative that
they should not fall asleep as to do so would expose them to hazards
and injuries. In addition, sleeping will hamper the efficient flow of
operations as the bottling operators would be unable to perform their
duties competently.
The bottling operators took issue with the removal of the chairs.
Through the representation of herein respondent, they initiated the
grievance machinery of the Collective Bargaining Agreement (CBA)
in November 2008. Even after exhausting the remedies contained in
the grievance machinery, the parties were still at a deadlock with
petitioner still insisting on the removal of the chairs and respondent
still against such measure. As such, respondent sent a Notice to
Arbitrate, dated 16 July 2009, to petitioner stating its position to
submit the issue on the removal of the chairs for arbitration.
Nevertheless, before submitting to arbitration the issue, both parties
availed of the conciliation/mediation proceedings before the National
Conciliation and Mediation Board (NCMB) Regional Branch No. VII.
They failed to arrive at an amicable settlement.
Thus, the process of arbitration continued and the parties appointed
the chairperson and members of the Arbitration Committee as
outlined in the CBA. Petitioner and respondent respectively
appointed as members to the Arbitration Committee Mr. Raul A.
Kapuno, Jr. and Mr. Luis Ruiz while they both chose Atty. Alice
Morada as chairperson thereof. They then executed a Submission
Agreement which was accepted by the Arbitration Committee on 01
October 2009. As contained in the Submission Agreement, the sole
issue for arbitration is whether the removal of chairs of the operators
assigned at the production/manufacturing line while performing their
duties and responsibilities is valid or not.
Both parties submitted their position papers and other subsequent
pleadings in amplification of their respective stands. Petitioner
argued that the removal of the chairs is valid as it is a legitimate
exercise of management prerogative, it does not violate the Labor
Code and it does not violate the CBA it contracted with respondent.
On the other hand, respondent espoused the contrary view. It
contended that the bottling operators have been performing their
assigned duties satisfactorily with the presence of the chairs; the
removal of the chairs constitutes a violation of the Occupational
Health and Safety Standards, the policy of the State to assure the
right of workers to just and humane conditions of work as stated in
Article 3 of the Labor Code and the Global Workplace Rights Policy.
Ruling of the Arbtration Committee
On June 11, 2010, the Arbitration Committee rendered a decision in
favor of the Royal Plant Workers Union (the Union) and against
CCBPI, the dispositive portion of which reads, as follows:
Wherefore, the undersigned rules in favor of ROPWU declaring that
the removal of the operators chairs is not valid. CCBPI is hereby
ordered to restore the same for the use of the operators as before
their removal in 2008.4
The Arbitration Committee ruled, among others, that the use of
chairs by the operators had been a company practice for 34 years in
Bottling Line 2, from 1974 to 2008, and 20 years in Bottling Line 1,
from 1988 to 2008; that the use of the chairs by the operators
constituted a company practice favorable to the Union; that it
ripened into a benefit after it had been enjoyed by it; that any benefit
being enjoyed by the employees could not be reduced, diminished,
discontinued, or eliminated by the employer in accordance with
Article 100 of the Labor Code, which prohibited the diminution or
elimination by the employer of the employees’ benefit; and that
jurisprudence had not laid down any rule requiring a specific
minimum number of years before a benefit would constitute a
voluntary company practice which could not be unilaterally
withdrawn by the employer.
The Arbitration Committee further stated that, although the removal
of the chairs was done in good faith, CCBPI failed to present evidence
regarding instances of sleeping while on duty. There were no specific
details as to the number of incidents of sleeping on duty, who were
involved, when these incidents happened, and what actions were
taken. There was no evidence either of any accident or injury in the
many years that the bottling operators used chairs. To the
Arbitration Committee, it was puzzling why it took 34 and 20 years
for CCBPI to be so solicitous of the bottling operators’ safety that it
removed their chairs so that they would not fall asleep and injure
themselves.
Finally, the Arbitration Committee was of the view that, contrary to
CCBPI’s position, line efficiency was the result of many factors and
it could not be attributed solely to one such as the removal of the
chairs.
Not contented with the Arbitration Committee’s decision, CCBPI filed
a petition for review under Rule 43 before the CA.
Ruling of the CA
On May 24, 2011, the CA rendered a contrasting decision which
nullified and set aside the decision of the Arbitration Committee. The
dispositive portion of the CA decision reads:
WHEREFORE, premises considered, the petition is hereby GRANTED
and the Decision, dated 11 June 2010, of the Arbitration Committee
in AC389-VII-09-10-2009D is NULLIFIED and SET ASIDE. A new one
is entered in its stead SUSTAINING the removal of the chairs of the
bottling operators from the manufacturing/production line.5
The CA held, among others, that the removal of the chairs from the
manufacturing/production lines by CCBPI is within the province of
management prerogatives; that it was part of its inherent right to
control and manage its enterprise effectively; and that since it was
the employer’s discretion to constantly develop measures or means
to optimize the efficiency of its employees and to keep its
machineries and equipment in the best of conditions, it was only
appropriate that it should be given wide latitude in exercising it.
The CA stated that CCBPI complied with the conditions of a valid
exercise of a management prerogative when it decided to remove
the chairs used by the bottling operators in the
manufacturing/production lines. The removal of the chairs was solely
motivated by the best intentions for both the Union and CCBPI, in
line with the "I Operate, I Maintain, I Clean" program for bottling
operators, wherein every bottling operator was given the
responsibility to keep the machinery and equipment assigned to him
clean and safe. The program would reinforce the task of bottling
operators to constantly move about in the performance of their
duties and responsibilities. Without the chairs, the bottling operators
could efficiently supervise these machineries’ operations and
maintenance. It would also be beneficial for them because the
working time before the break in each rotation for each shift was
substantially reduced from two and a half hours (2 ½ ) to one and a
half hours (1 ½) before the 30-minute break. This scheme was
clearly advantageous to the bottling operators as the number of
resting periods was increased. CCBPI had the best intentions in
removing the chairs because some bottling operators had the
propensity to fall asleep while on the job and sleeping on the job ran
the risk of injury exposure and removing them reduced the risk.
The CA added that the decision of CCBPI to remove the chairs was
not done for the purpose of defeating or circumventing the rights of
its employees under the special laws, the Collective Bargaining
Agreement (CBA) or the general principles of justice and fair play. It
opined that the principles of justice and fair play were not violated
because, when the chairs were removed, there was a commensurate
reduction of the working time for each rotation in each shift. The
provision of chairs for the bottling operators was never part of the
CBAs contracted between the Union and CCBPI. The chairs were not
provided as a benefit because such matter was dependent upon the
exigencies of the work of the bottling operators. As such, CCBPI
could withdraw this provision if it was not necessary in the exigencies
of the work, if it was not contributing to the efficiency of the bottling
operators or if it would expose them to some hazards. Lastly, the CA
explained that the provision of chairs to the bottling operators cannot
be covered by Article 100 of the Labor Code on elimination or
diminution of benefits because the employee’s benefits referred to
therein mainly involved monetary considerations or privileges
converted to their monetary equivalent.
Disgruntled with the adverse CA decision, the Union has come to this
Court praying for its reversal on the following GROUNDS
I is no record of poor performance because the operators are sitting
THAT WITH DUE RESPECT, THE COURT OF APPEALS COMMITTED
REVERSIBLE ERROR IN HOLDING THAT A PETITION FOR REVIEW
UNDER RULE 43 OF THE RULES OF COURT IS THE PROPER REMEDY
OF CHALLENGING BEFORE SAID COURT THE DECISION OF THE
VOLUNTARY ARBITRATOR OR PANEL OF VOLUNTARY ARBITRATORS
UNDER THE LABOR CODE.
II
THAT WITH DUE RESPECT, THE COURT OF APPEALS GRAVELY
ABUSED ITS DISCRETION IN NULLIFYING AND SETTING ASIDE THE
DECISION OF THE PANEL OF VOLUNTARY ARBITRATORS WHICH
DECLARED AS NOT VALID THE REMOVAL OF THE CHAIRS OF THE
OPERATORS IN THE MANUFACTURING AND/OR PRODUCTION LINE.
In advocacy of its positions, the Union argues that the proper
remedy in challenging the decision of the Arbitration Committee
before the CA is a petition for certiorari under Rule 65. The petition
for review under Rule 43 resorted to by CCBPI should have been
dismissed for being an improper remedy. The Union points out that
the parties agreed to submit the unresolved grievance involving the
removal of chairs to voluntary arbitration pursuant to the provisions
of Article V of the existing CBA. Hence, the assailed decision of the
Arbitration Committee is a judgment or final order issued under the
Labor Code of the Philippines. Section 2, Rule 43 of the 1997 Rules
of Civil Procedure, expressly states that the said rule does not cover
cases under the Labor Code of the Philippines. The judgments or
final orders of the Voluntary Arbitrator or Panel of Voluntary
Arbitrators are governed by the provisions of Articles 260, 261, 262,
262-A, and 262-B of the Labor Code of the Philippines.
On the substantive aspect, the Union argues that there is no
connection between CCBPI’s "I Operate, I Maintain, I Clean" program
and the removal of the chairs because the implementation of the
program was in 2006 and the removal of the chairs was done in
2008. The 30-minute break is part of an operator’s working hours
and does not make any difference. The frequency of the break period
is not advantageous to the operators because it cannot compensate
for the time they are made to stand throughout their working time.
The bottling operators get tired and exhausted after their tour of
duty even with chairs around. How much more if the chairs are
removed?
The Union further claims that management prerogatives are not
absolute but subject to certain limitations found in law, a collective
bargaining agreement, or general principles of fair play and justice.
The operators have been performing their assigned duties and
responsibilities satisfactorily for thirty (30) years using chairs. There
all the time. There is no single incident when the attention of an
operator was called for failure to carry out his assigned tasks. CCBPI
has not submitted any evidence to prove that the performance of
the operators was poor before the removal of the chairs and that it
has improved after the chairs were removed. The presence of chairs
for more than 30 years made the operators awake and alert as they
could relax from time to time. There are sanctions for those caught
sleeping while on duty. Before the removal of the chairs, the
efficiency of the operators was much better and there was no
recorded accident. After the removal of the chairs, the efficiency of
the operators diminished considerably, resulting in the drastic
decline of line efficiency.
Finally, the Union asserts that the removal of the chairs constitutes
violation of the Occupational Health and Safety Standards, which
provide that every company shall keep and maintain its workplace
free from hazards that are likely to cause physical harm to the
workers or damage to property. The removal of the chairs
constitutes a violation of the State policy to assure the right of
workers to a just and humane condition of work pursuant to Article
3 of the Labor Code and of CCBPI’s Global Workplace Rights Policy.
Hence, the unilateral withdrawal, elimination or removal of the
chairs, which have been in existence for more than 30 years,
constitutes a violation of existing practice.
The respondent’s position
CCBPI reiterates the ruling of the CA that a petition for review under
Rule 43 of the Rules of Court was the proper remedy to question the
decision of the Arbitration Committee. It likewise echoes the ruling
of the CA that the removal of the chairs was a legitimate exercise of
management prerogative; that it was done not to harm the bottling
operators but for the purpose of optimizing their efficiency and
CCBPI’s machineries and equipment; and that the exercise of its
management prerogative was done in good faith and not for the
purpose of circumventing the rights of the employees under the
special laws, the CBA or the general principles of justice and fair
play.
The Court’s Ruling
The decision in this case rests on the resolution of two basic
questions. First, is an appeal to the CA via a petition for review under
Rule 43 of the 1997 Rules of Civil Procedure a proper remedy to
question the decision of the Arbitration Committee? Second, was the
removal of the bottling operators’ chairs from CCBPI’s
production/manufacturing lines a valid exercise of a management
prerogative?
The Court sustains the ruling of the CA on both issues.
Regarding the first issue, the Union insists that the CA erred in ruling
that the recourse taken by CCBPI in appealing the decision of the
Arbitration Committee was proper. It argues that the proper remedy
in challenging the decision of the Voluntary Arbitrator before the CA
is by filing a petition for certiorari under Rule 65 of the Rules of
Court, not a petition for review under Rule 43.
CCBPI counters that the CA was correct in ruling that the recourse it
took in appealing the decision of the Arbitration Committee to the
CA via a petition for review under Rule 43 of the Rules of Court was
proper and in conformity with the rules and prevailing jurisprudence.
A Petition for Review
under Rule 43 is the
proper remedy
CCBPI is correct. This procedural issue being debated upon is not
novel. The Court has already ruled in a number of cases that a
decision or award of a voluntary arbitrator is appealable to the CA
via a petition for review under Rule 43. The recent case of Samahan
Ng Mga Manggagawa Sa Hyatt (SAMASAH-NUWHRAIN) v. Hon.
Voluntary Arbitrator Buenaventura C. Magsalin and Hotel Enterprises
of the Philippines6 reiterated the well-settled doctrine on this issue,
to wit:
In the case of Samahan ng mga Manggagawa sa Hyatt-NUWHRAIN-
APL v. Bacungan,7 we repeated the well-settled rule that a decision
or award of a voluntary arbitrator is appealable to the CA via petition
for review under Rule 43. We held that:
"The question on the proper recourse to assail a decision of a
voluntary arbitrator has already been settled in Luzon Development
Bank v. Association of Luzon Development Bank Employees, where
the Court held that the decision or award of the voluntary arbitrator
or panel of arbitrators should likewise be appealable to the Court of
Appeals, in line with the procedure outlined in Revised
Administrative Circular No. 1-95 (now embodied in Rule 43 of the
1997 Rules of Civil Procedure), just like those of the quasi-judicial
agencies, boards and commissions enumerated therein, and
consistent with the original purpose to provide a uniform procedure
for the appellate review of adjudications of all quasi-judicial entities.
Subsequently, in Alcantara, Jr. v. Court of Appeals, and Nippon Paint
Employees Union-Olalia v. Court of Appeals, the Court reiterated the
aforequoted ruling. In Alcantara, the Court held that notwithstanding
Section 2 of Rule 43, the ruling in Luzon Development Bank still
stands. The Court explained, thus:
‘The provisions may be new to the Rules of Court but it is far from
being a new law. Section 2, Rules 42 of the 1997 Rules of Civil
Procedure, as presently worded, is nothing more but a reiteration of
the exception to the exclusive appellate jurisdiction of the Court of
Appeals, as provided for in Section 9, Batas Pambansa Blg. 129, as
amended by Republic Act No. 7902:
(3) Exclusive appellate jurisdiction over all final judgments,
decisions, resolutions, orders or awards of Regional Trial Courts and
quasi-judicial agencies, instrumentalities, boards or commissions,
including the Securities and Exchange Commission, the Employees’
Compensation Commission and the Civil Service Commission, except
those falling within the appellate jurisdiction of the Supreme Court
in accordance with the Constitution, the Labor Code of the
Philippines under Presidential Decree No. 442, as amended, the
provisions of this Act and of subparagraph (1) of the third paragraph
and subparagraph (4) of the fourth paragraph of Section 17 of the
Judiciary Act of 1948.’
The Court took into account this exception in Luzon Development
Bank but, nevertheless, held that the decisions of voluntary
arbitrators issued pursuant to the Labor Code do not come within its
ambit x x x."
Furthermore, Sections 1, 3 and 4, Rule 43 of the 1997 Rules of Civil
Procedure, as amended, provide:
"SECTION 1. Scope. - This Rule shall apply to appeals from
judgments or final orders of the Court of Tax Appeals and from
awards, judgments, final orders or resolutions of or authorized by
any quasi-judicial agency in the exercise of its quasi-judicial
functions. Among these agencies are the x x x, and voluntary
arbitrators authorized by law.
xxxx
SEC. 3. Where to appeal. - An appeal under this Rule may be taken
to the Court of Appeals within the period and in the manner therein
provided, whether the appeal involves questions of fact, of law, or
mixed questions of fact and law.
SEC. 4. Period of appeal. - The appeal shall be taken within fifteen
(15) days from notice of the award, judgment, final order or
resolution, or from the date of its last publication, if publication is
required by law for its effectivity, or of the denial of petitioner’s
motion for new trial or reconsideration duly filed in accordance with
the governing law of the court or agency a quo. x x x. (Emphasis
supplied.)’
Hence, upon receipt on May 26, 2003 of the Voluntary Arbitrator’s
Resolution denying petitioner’s motion for reconsideration, petitioner
should have filed with the CA, within the fifteen (15)-day
reglementary period, a petition for review, not a petition for
certiorari.
On the second issue, the Union basically claims that the CCBPI’s
decision to unilaterally remove the operators’ chairs from the
production/manufacturing lines of its bottling plants is not valid
because it violates some fundamental labor policies. According to the
Union, such removal constitutes a violation of the 1) Occupational
Health and Safety Standards which provide that every worker is
entitled to be provided by the employer with appropriate seats,
among others; 2) policy of the State to assure the right of workers
to a just and humane condition of work as provided for in Article 3
of the Labor Code;8 3) Global Workplace Rights Policy of CCBPI which
provides for a safe and healthy workplace by maintaining a
productive workplace and by minimizing the risk of accident, injury
and exposure to health risks; and 4) diminution of benefits provided
in Article 100 of the Labor Code.9
Opposing the Union’s argument, CCBPI mainly contends that the
removal of the subject chairs is a valid exercise of management
prerogative. The management decision to remove the subject chairs
was made in good faith and did not intend to defeat or circumvent
the rights of the Union under the special laws, the CBA and the
general principles of justice and fair play.
Again, the Court agrees with CCBPI on the matter.
A Valid Exercise of
Management Prerogative
The Court has held that management is free to regulate, according
to its own discretion and judgment, all aspects of employment,
including hiring, work assignments, working methods, time, place,
and manner of work, processes to be followed, supervision of
workers, working regulations, transfer of employees, work
supervision, lay-off of workers, and discipline, dismissal and recall of
workers. The exercise of management prerogative, however, is not
absolute as it must be exercised in good faith and with due regard
to the rights of labor.10
In the present controversy, it cannot be denied that CCBPI removed
the operators’ chairs pursuant to a national directive and in line with
its "I Operate, I Maintain, I Clean" program, launched to enable the
Union to perform their duties and responsibilities more efficiently.
The chairs were not removed indiscriminately. They were carefully
studied with due regard to the welfare of the members of the Union.
The removal of the chairs was compensated by: a) a reduction of
the operating hours of the bottling operators from a two-and-one-
half (2 ½)-hour rotation period to a one-and-a-half (1 ½) hour
rotation period; and b) an increase of the break period from 15 to
30 minutes between rotations.
Apparently, the decision to remove the chairs was done with good
intentions as CCBPI wanted to avoid instances of operators sleeping
on the job while in the performance of their duties and
responsibilities and because of the fact that the chairs were not
necessary considering that the operators constantly move about
while working. In short, the removal of the chairs was designed to
increase work efficiency. Hence, CCBPI’s exercise of its management
prerogative was made in good faith without doing any harm to the
workers’ rights.
The fact that there is no proof of any operator sleeping on the job is
of no moment. There is no guarantee that such incident would never
happen as sitting on a chair is relaxing. Besides, the operators
constantly move about while doing their job. The ultimate purpose
is to promote work efficiency.
No Violation of Labor Laws
The rights of the Union under any labor law were not violated. There
is no law that requires employers to provide chairs for bottling
operators. The CA correctly ruled that the Labor Code, specifically
Article 13211 thereof, only requires employers to provide seats for
women. No similar requirement is mandated for men or male
workers. It must be stressed that all concerned bottling operators in
this case are men.
There was no violation either of the Health, Safety and Social Welfare
Benefit provisions under Book IV of the Labor Code of the Philippines.
As shown in the foregoing, the removal of the chairs was
compensated by the reduction of the working hours and increase in
the rest period. The directive did not expose the bottling operators
to safety and health hazards.
The Union should not complain too much about standing and moving
about for one and one-half (1 ½) hours because studies show that
sitting in workplaces for a long time is hazardous to one’s health.
The report of VicHealth, Australia,12 disclosed that "prolonged
workplace sitting is an emerging public health and occupational
health issue with serious implications for the health of our working
population. Importantly, prolonged sitting is a risk factor for poor
health and early death, even among those who meet, or exceed,
national13 activity guidelines." In another report,14 it was written:
Workers needing to spend long periods in a seated position on the
job such as taxi drivers, call centre and office workers, are at risk for
injury and a variety of adverse health effects.
The most common injuries occur in the muscles, bones, tendons and
ligaments, affecting the neck and lower back regions. Prolonged
sitting:
● reduces body movement making muscles more likely to pull, cramp
or strain when stretched suddenly, causes fatigue in the back and
neck muscles by slowing the blood supply and puts high tension on
the spine, especially in the low back or neck, and
● causes a steady compression on the spinal discs that hinders their
nutrition and can contribute to their premature degeneration.
Sedentary employees may also face a gradual deterioration in health
if they do not exercise or do not lead an otherwise physically active
life. The most common health problems that these employees
experience are disorders in blood circulation and injuries affecting
their ability to move. Deep Vein Thrombosis (DVT), where a clot
forms in a large vein after prolonged sitting (eg after a long flight)
has also been shown to be a risk.
Workers who spend most of their working time seated may also
experience other, less specific adverse health effects. Common
effects include decreased fitness, reduced heart and lung efficiency,
and digestive problems. Recent research has identified too much
sitting as an important part of the physical activity and health
equation, and suggests we should focus on the harm caused by daily
inactivity such as prolonged sitting.
Associate professor David Dunstan leads a team at the Baker IDI in
Melbourne which is specifically researching sitting and physical
activity. He has found that people who spend long periods of time
seated (more than four hours per day) were at risk of:
● higher blood levels of sugar and fats,
● larger waistlines, and
● higher risk of metabolic syndrome
regardless of how much moderate to vigorous exercise they had.
In addition, people who interrupted their sitting time more often just
by standing or with light activities such as housework, shopping, and
moving about the office had healthier blood sugar and fat levels, and
smaller waistlines than those whose sitting time was not broken up.
Of course, in this case, if the chairs would be returned, no risks would
be involved because of the shorter period of working time. The study
was cited just to show that there is a health risk in prolonged sitting.
No Violation of the CBA
The CBA15 between the Union and CCBPI contains no provision
whatsoever requiring the management to provide chairs for the
operators in the production/manufacturing line while performing
their duties and responsibilities. On the contrary, Section 2 of Article
1 of the CBA expressly provides as follows:
Article I
SCOPE
SECTION 2. Scope of the Agreement. All the terms and conditions of
employment of employees and workers within the appropriate
bargaining unit (as defined in Section 1 hereof) are embodied in this
Agreement and the same shall govern the relationship between the
COMPANY and such employees and/or workers. On the other hand,
all such benefits and/or privileges as are not expressly provided for
in this Agreement but which are now being accorded, may in the
future be accorded, or might have previously been accorded, to the
employees and/or workers, shall be deemed as purely voluntary acts
on the part of the COMPANY in each case, and the continuance and
repetition thereof now or in the future, no matter how long or how
often, shall not be construed as establishing an obligation on the part
of the COMPANY. It is however understood that any benefits that are
agreed upon by and between the COMPANY and the UNION in the
Labor-Management Committee Meetings regarding the terms and
conditions of employment outside the CBA that have general
application to employees who are similarly situated in a Department
or in the Plant shall be implemented. [emphasis and underscoring
supplied]
As can be gleaned from the aforecited provision, the CBA expressly
provides that benefits and/or privileges, not expressly given therein
but which are presently being granted by the company and enjoyed
by the employees, shall be considered as purely voluntary acts by
the management and that the continuance of such benefits and/or
privileges, no matter how long or how often, shall not be understood
as establishing an obligation on the company’s part. Since the matter
of the chairs is not expressly stated in the CBA, it is understood that
it was a purely voluntary act on the part of CCBPI and the long
practice did not convert it into an obligation or a vested right in favor
of the Union.
No Violation of the general principles
of justice and fair play
The Court completely agrees with the CA ruling that the removal of
the chairs did not violate the general principles of justice and fair
play because the bottling operators’ working time was considerably
reduced from two and a half (2 ½) hours to just one and a half (1
½) hours and the break period, when they could sit down, was
increased to 30 minutes between rotations. The bottling operators’
new work schedule is certainly advantageous to them because it
greatly increases their rest period and significantly decreases their
working time. A break time of thirty (30) minutes after working for
only one and a half (1 ½) hours is a just and fair work schedule.
No Violation of Article 100
of the Labor Code
The operators’ chairs cannot be considered as one of the employee
benefits covered in Article 10016 of the Labor Code. In the Court’s
view, the term "benefits" mentioned in the non-diminution rule
refers to monetary benefits or privileges given to the employee with
monetary equivalents.
Such benefits or privileges form part of the employees’ wage, salary
or compensation making them enforceable obligations.
This Court has already decided several cases regarding the non-
diminution rule where the benefits or privileges involved in those
cases mainly concern monetary considerations or privileges with
monetary equivalents. Some of these cases are: Eastern
Telecommunication Phils. Inc. v. Eastern Telecoms Employees
Union,17 where the case involves the payment of 14th, 15th and 16th
month bonuses; Central Azucarera De Tarlac v. Central Azucarera
De Tarlac Labor Union-NLU,18 regarding the 13th month pay,
legal/special holiday pay, night premium pay and vacation and sick
leaves; TSPIC Corp. v. TSPIC Employees Union,19 regarding salary
wage increases; and American Wire and Cable Daily Employees
Union vs. American Wire and Cable Company, Inc.,20 involving
service awards with cash incentives, premium pay, Christmas party
with incidental benefits and promotional increase.
In this regard, the Court agrees with the CA when it resolved the
matter and wrote:
Let it be stressed that the aforequoted article speaks of non-
diminution of supplements and other employee benefits.
Supplements arc privileges given to an employee which constitute
as extra remuneration besides his or her basic ordinary earnings and
wages. From this definition, We can only deduce that the other
employee benefits spoken of by Article 100 pertain only to those
which are susceptible of monetary considerations. Indeed, this could
only be the most plausible conclusion because the cases tackling
Article 100 involve mainly with monetary considerations or privileges
converted to their monetary equivalents.
xxxx
Without a doubt, equating the provision of chairs to the bottling
operators Ds something within the ambit of "benefits'' in the context
of Article 100 of the Labor Code is unduly stretching the coverage of
the law. The interpretations of Article 100 of the Labor Code do not
show even with the slightest hint that such provision of chairs for
the bottling operators may be sheltered under its mantle.21
Jurisprudence recognizes the exercise of management prerogatives.
Labor Jaws also discourage interference with an employer's
judgment in the conduct of its business. For this reason, the Court
often declines to interfere in legitimate business decisions of
employers. The law must protect not only the welfare of the
employees, but also the right of the employers. 22
WHEREFORE, the petition is DENIED.
SO ORDERED.
UNICORN SAFETY GLASS, INC., LILY YULO and HILARIO
YULO, petitioners, vs. RODRIGO BASARTE, JAIMELITO
FLORES, TEODOLFO LOR, RONNIE DECIO, ELMER SULTORA
and JOSELITO DECIO, respondents.
DECISION
YNARES-SANTIAGO, J.:
This is a Petition for Review on Certiorari seeking to set aside the
Decision[1] of the Court of Appeals dated October 18, 2001 and its
subsequent Resolution dated August 7, 2002, which reversed the
decisions of the Labor Arbiter and the National Labor Relations
Commission (NLRC).
Respondents were regular employees of petitioner Unicorn Safety
Glass Incorporated, a company engaged in the business of glass
manufacturing. Respondents normally worked six (6) times a week,
from Monday to Saturday, and were paid on a weekly basis. They
were likewise officers of the organized union in petitioner company,
owned and managed by the Spouses Lily and Hilario Yulo.
On March 2, 1998, Hilario Yulo, as general manager of Unicorn,
issued a Memorandum[2] informing respondents that effective April
13, 1998, their workdays shall be reduced due to economic
considerations. Yulo cited several factors such as decrease in sales,
increase in the cost of production, devaluation of the peso and
increase in minimum wage, which contributed to the current
economic state of the company. In a letter dated March 12, 1998,
respondents registered their protest to the proposed reduction of
working days and expressed doubts on the reasons offered by the
company.[3] Respondents also surmised that the management was
merely getting back at them for forming a union especially since only
the union officers were affected by the work reduction.
On April 6, 1998, Hilario Yulo issued another Memorandum [4]
announcing the implementation of a work rotation schedule to take
effect from April 13, 1998 to April 30, 1998, which will effectively
reduce respondents workdays to merely three days a week. A copy
of the planned rotation scheme was sent to the Department of Labor
and Employment. Respondents wrote another letter of protest dated
April 7, 1998[5] expressing their frustrations at the apparent lack of
willingness on the part of petitioner companys management to
address their concerns and objections. On the same day,
respondents met with the Spouses Yulo and inquired as to the
reasons for the imposition of the reduced workweek. They were told
that it was managements prerogative to do so.[6]
On April 13, 1998, instead of reporting for work, respondents filed a
complaint against petitioner company with the National Labor
Relations Commission, docketed as NLRC Case No. NCR-00-04-
03277-98, for constructive dismissal and unfair labor practice, i.e.,
union busting, non-payment of five days service incentive leave pay
and payment of moral and exemplary damages as well as attorneys
fees. Respondents prayed for reinstatement and payment of full
backwages.
Meanwhile, since respondents failed to report for work, petitioners
sent each of them a telegram directing them to do so. On April 18,
1998, respondents sent Yulo a letter informing him that, in view of
the managements apparent indifference to their plight and blatant
violation of their rights, a complaint was lodged against petitioner
company for constructive dismissal. Moreover, given the working
environment they were subjected to, they decided not to report for
work at all.[7] Petitioner company replied by asking them to explain
why they have not been reporting for work. However, respondents
neither reported for work nor replied to petitioner companys
telegrams.
On January 26, 1999, Labor Arbiter Felipe Pati rendered judgment
finding that respondents were not constructively terminated by
petitioner company. Thus:
Complainants claim that they were constructively terminated.
However, evidence extant do not support this contention. What we
see on records are the telegrams, letters and memoranda sent by
respondents to complainants ordering the latter to report for work.
Despite due receipt by the complainants of these communications,
they simply ignored respondents plea. Complainants deliberate
refusal to report for work is very much evident from the number of
letters they received from respondents which were all ignored.
It is true that complainants have sent to respondent a joint letter-
reply dated April 18, 1998 (Annexes 35, Respondents Position
Paper). However, said joint letter reinforces the fact that
complainants were not terminated by respondents. In fact
complainants admitted in this joint letter-reply that they have
decided not to report for work because they did not agree with the
report rotation adopted by respondents. From this admission and
statement of complainant, we feel that the charge of illegal dismissal
they filed against respondents is misplaced. If complainants strongly
opposed the rotation adopted by respondents, they could have
initiated an illegal rotation and not illegal dismissal case against
respondents. As good soldiers complainants could initiate this case
while they are reporting for work based on the adopted work rotation
and let the Court decides whether or not this rotation is valid and
legal. Certainly refusal to report for work is not a proper remedy.[8]
The Labor Arbiter likewise dismissed the charge of unfair labor
practice for lack of legal and factual basis. Nonetheless, the Labor
Arbiter ordered petitioner company to pay the respondents claim for
unpaid service incentive leave pay. The Labor Arbiter disposed of the
case, thus:
WHEREFORE, the instant case is hereby dismissed for lack of merit.
Respondents however, are ordered to pay complainants the total
amount of P5,110.00 for unpaid service incentive leave pay as
alluded in the above computation.
On the grounds of amicable settlement and subsequent withdrawals
of their complaints, the cases of PAQUITO MANONGSONG and ELMER
SULTORA are hereby dismissed with prejudice.
SO ORDERED.[9]
The case was appealed to the NLRC. During the pendency of the
appeal, however, petitioner company filed a Motion to Dismiss
alleging that respondents Basarte, Flores, Decio and Lor entered into
amicable settlements and executed a Waiver, Release &
Quitclaim.[10] Respondents representative filed an Opposition thereto
alleging that the Waiver, Release & Quitclaim executed by
respondents were entered into without his knowledge and not in the
presence of the Labor Arbiter; and that the amounts received by
respondents were unconscionably inadequate.
In a decision dated October 31, 2000, the NLRC sustained the
findings of the Labor Arbiter. On the issue of the amicable
settlements, the NLRC stated:
We are not convinced that the amicable settlement entered into by
complainants were involuntary and that the consideration thereof
are unconscionable.
It is to be stressed that the complainants were the ones who went
to the office of respondent for settlement. They acknowledged
having signed the Waiver, Release and Quitclaim and brought the
same before a Notary Public. Given these factual circumstances, it is
hard to believe that there was involuntariness on the part of the
complainant when they settled their claims with respondent. In fact,
almost a year have already lapsed since then. It is only now that
complainants are claiming that their settlement was involuntary.
Anent complainants claim that the consideration of settlement is
unconscionable suffice it to state that the amount granted by way of
settlement to complainants Rodrigo Basarte, Jaimelito Flores,
Joselito Decio including that of complainant Teodolfo Lor (Records,
p. 179) are more than the judgment award.[11]
The dispositive portion of the NLRCs decision states:
PREMISES CONSIDERED, the appeal from the Decision dated
January 26, 1999 is hereby DISMISSED for lack of merit and the
Decision is AFFIRMED.
Further, the motions to dismiss filed by respondents with respect to
complainants Rodrigo Basarte, Jaimelito Flores, Joselito Decio and
Teodolfo Lor are hereby GRANTED. Thus, insofar as said
complainants are concerned their cases are dismissed with
prejudice, as prayed for by respondents.
SO ORDERED.[12]
Unrelenting, the respondents filed a petition for certiorari with the
Court of Appeals, which found respondents case partly meritorious.
However, it declined to make a contrary finding on the charge of
unfair labor practice for lack of clear-cut and convincing evidence.
The dispositive portion of the Court of Appeals decision is as follows:
UPON THE VIEW WE TAKE OF THIS CASE, THUS, the petition is
substantially GRANTED. Private respondents are hereby ordered to
reinstate to their former positions Rodrigo Basarte, Jaimelito Flores
and Ronnie Decio, without loss of seniority rights and privileges, and
to pay these three their full backwages from April 13, 1998 until their
reinstatement. Or, to award them separation pay, in case
reinstatement is no longer feasible or possible. Private respondents
are further sentenced to pay the aforenamed petitioners ten per cent
(10%) of the total awards by way of attorneys fees. Costs shall also
be taxed against private respondents.
SO ORDERED.[13]
Its Motion for Reconsideration having been denied, petitioners are
before us on Petition for Review on Certiorari, raising the following
assignment of errors:
I.
THE HONORABLE COURT OF APPEALS ERRED IN REVERSING THE
RULING OF THE LABOR ARBITER A QUO WHICH WAS AFFIRMED BY
THE NLRC HOLDING THAT PRIVATE RESPONDENTS WERE NOT
ILLEGALLY DISMISSED FROM THEIR EMPLOYMENT.
II.
THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE
RELEASE, WAIVER AND QUITCLAIMS EXECUTED BY PRIVATE
RESPONDENTS RODRIGO BASARTE AND JAIMELITO FLORES NULL
AND VOID.[14]
The petition lacks merit.
Constructive dismissal or a constructive discharge has been defined
as quitting because continued employment is rendered impossible,
unreasonable or unlikely, as an offer involving a demotion in rank
and a diminution in pay.[15] Constructive dismissal, however, does
not always take the form of a diminution. In several cases, we have
ruled that an act of clear discrimination, insensibility, or disdain by
an employer may become so unbearable on the part of the employee
so as to foreclose any choice on his part except to resign from such
employment. This constitutes constructive dismissal.[16]
In the case at bar, we agree with the Court of Appeals that
petitioners bare assertions on the alleged reason for the rotation plan
as well as its failure to refute respondents contention that they were
targeted due to their union activities, merit the reversal of the Labor
Arbiters decision. It was incumbent upon petitioners to prove that
the rotation scheme was a genuine business necessity and not meant
to subdue the organized union. The reasons enumerated by
petitioners in their Memoranda dated March 2, 1998 were factors too
general to actually substantiate the need for the scheme. Petitioners
cite the reduction in their electric consumption as proof of an
economic slump. This may be true to an extent. But it does not, by
itself, prove that the rotation scheme was the most reasonable
alternative to remedy the companys problems.
The petitioners unbending stance on the implementation of the
rotation scheme was an indication that the rotation plan was being
implemented for reasons other than business necessity. It appears
that respondents attempted on more than one occasion to have a
dialogue with petitioner Hilario Yulo to discuss the work reduction.
Good faith should have prompted Yulo to hear the side of the
respondents, to come up with a scheme amenable to both parties or
attempt to convince the employees concerned that there was no
other viable option. However, petitioners ignored the letters sent by
respondents, which compelled the latter to seek redress with the
Labor Arbiter.
We are mindful that every business strives to keep afloat during
these times when prevailing economic situations turns such
endeavor into a near struggle. With as much latitude as our laws
would allow, the Court has always respected a companys exercise of
its prerogative to devise means to improve its operations. Thus, we
have held that management is free to regulate, according to its own
discretion and judgment, all aspects of employment, including
hiring, work assignments, working methods, time, place and manner
of work, processes to be followed, supervision of workers, working
regulations, transfer of employees, work supervision, lay off of
workers and discipline, dismissal and recall of workers.[17] Further,
management retains the prerogative, whenever exigencies of the
service so require, to change the working hours of its employees. [18]
However, the exercise of management prerogative is not absolute.
By its very nature, encompassing as it could be, management
prerogative must be exercised in good faith and with due regard to
the rights of laborverily, with the principles of fair play at heart and
justice in mind. While we concede that management would best
know its operational needs, the exercise of management prerogative
cannot be utilized as an implement to circumvent our laws and
oppress employees. The prerogative accorded management cannot
defeat the very purpose for which our labor laws exist: to balance
the conflicting interests of labor and management, not to tilt the
scale in favor of one over the other, but to guaranty that labor and
management stand on equal footing when bargaining in good faith
with each other.[19]
In the case at bar, the manner by which petitioners exercised their
management prerogative appears to be an underhanded
circumvention of the law. Petitioners were keen on summarily
implementing the rotation plan, obviously singling out respondents
who were all union officers. The managements apparent lack of
interest to hear what the respondents had to say, created an
uncertain situation where reporting for work was tantamount to an
acquiescence in an unjust situation.
Petitioners argued that they exerted diligent and massive efforts to
make respondents return to work, highlighting the telegrams and
memoranda sent to respondents.[20] It is well established that to
constitute abandonment, two elements must concur: (1) the failure
to report for work or absence without valid or justifiable reason, and
(2) a clear intention to sever the employer-employee relationship,
with the second element as the more determinative factor and being
manifested by some overt acts. Abandoning ones job means the
deliberate, unjustified refusal of the employee to resume his
employment and the burden of proof is on the employer to show a
clear and deliberate intent on the part of the employee to discontinue
employment.[21]
However, petitioners charge of abandonment of work by
respondents does not hold water when taken in light of the complaint
for constructive dismissal. We have held that a charge of
abandonment is totally inconsistent with the filing of a complaint for
constructive dismissal and with reason.[22] Respondents cannot be
said to have abandoned their jobs when precisely, the root cause of
their protest is their demand to maintain their regular work hours.
What is more, respondents even prayed for reinstatement and
backwages. Clearly, these are incompatible with the proposition that
respondents sought to abandon their work.
Anent the issue of the validity of the waivers and quitclaims executed
by some of the respondents, petitioners argue that while admittedly,
the amounts indicated therein were not substantial, it does not
necessarily follow that these were executed under duress. Moreover,
the waivers and quitclaims were executed when the complaint for
illegal dismissal was already dismissed by the Labor Arbiter. Thus,
the waivers and quitclaims were executed under valid employer has the alternative of paying the employee his separation
circumstances. pay in lieu of reinstatement.
We do not agree. To be sure, the law looks with disfavor upon WHEREFORE, the instant petition is DENIED, and the decision of
quitclaims and releases by employees who are inveigled or pressured the Court of Appeals of October 18, 2001 in CA-G.R. SP No. 63577
into signing them by unscrupulous employers seeking to evade their is AFFIRMED in toto. Costs against petitioners.
legal responsibilities. We have clarified the standards for determining SO ORDERED.
the validity of quitclaim or waiver in the case of Periquet v. National
Labor Relations Commission,[23] to wit:
If the agreement was voluntarily entered into and represents a
reasonable settlement, it is binding on the parties and may not later
be disowned simply because of a change of mind. It is only where
there is clear proof that the waiver was wangled from an
unsuspecting or gullible person, or the terms of settlement are
unconscionable on its face, that the law will step in to annul the
questionable transaction. But where it is shown that the person
making the waiver did so voluntarily, with full understanding of what
he was doing, and the consideration for the quitclaim is credible and
reasonable, the transaction must be recognized as a valid and
binding undertaking.
In the instant case, while it is true that the complaint for illegal
dismissal filed by respondents with the Labor Arbiter has been
dismissed, their appeal before the NLRC was still pending. In fact,
petitioners even filed a Motion to Dismiss with the NLRC on the very
ground that the respondents, or at least most of them, have
executed said Waivers, Releases and Quitclaims. Petitioners cannot
therefore deny that it was in their interest to have respondents
execute the quitclaims.
Furthermore, the considerations received by respondents Basarte
and Flores were grossly inadequate considering the length of time
that they were employed in petitioner company. As correctly pointed
out by the Court of Appeals, Basarte worked for petitioner company
for 21 years, that is, from 1976 to 1998, while Flores worked from
1991 to 1998. Basarte and Flores only received P10,000.00 and
P3,000.00, respectively. In contrast, Manongsong and Soltura, two
workers who opted to settle their respective cases earlier on, both
started in 1993 only, but were able to take home P16,434.00 each
after executing their waivers.
Article 279 of the Labor Code provides that an employee who is
unjustly dismissed from work is entitled to reinstatement without
loss of seniority rights and other privileges, and to his full
backwages, inclusive of allowances, and to the other benefits or their
monetary equivalent computed from the time of his actual
reinstatement. However, if reinstatement is no longer possible, the
CHARLITO PEÑARANDA, Petitioner,
vs.
BAGANGA PLYWOOD CORPORATION and HUDSON CHUA,
Respondents.
DECISION
PANGANIBAN, CJ:
Managerial employees and members of the managerial staff are
exempted from the provisions of the Labor Code on labor standards.
Since petitioner belongs to this class of employees, he is not entitled
to overtime pay and premium pay for working on rest days.
The Case
Before us is a Petition for Review1 under Rule 45 of the Rules of
Court, assailing the January 27, 20032 and July 4, 20033 Resolutions
of the Court of Appeals (CA) in CA-GR SP No. 74358. The earlier
Resolution disposed as follows:
"WHEREFORE, premises considered, the instant petition is hereby
DISMISSED."4
The latter Resolution denied reconsideration.
On the other hand, the Decision of the National Labor Relations
Commission (NLRC) challenged in the CA disposed as follows:
"WHEREFORE, premises considered, the decision of the Labor Arbiter
below awarding overtime pay and premium pay for rest day to
complainant is hereby REVERSED and SET ASIDE, and the complaint
in the above-entitled case dismissed for lack of merit.5
The Facts
Sometime in June 1999, Petitioner Charlito Peñaranda was hired as
an employee of Baganga Plywood Corporation (BPC) to take charge
of the operations and maintenance of its steam plant boiler.6 In May
2001, Peñaranda filed a Complaint for illegal dismissal with money
claims against BPC and its general manager, Hudson Chua, before
the NLRC.7
After the parties failed to settle amicably, the labor arbiter 8 directed
the parties to file their position papers and submit supporting
documents.9 Their respective allegations are summarized by the
labor arbiter as follows:
"[Peñaranda] through counsel in his position paper alleges that he
was employed by respondent [Baganga] on March 15, 1999 with a
monthly salary of P5,000.00 as Foreman/Boiler Head/Shift Engineer
until he was illegally terminated on December 19, 2000. Further,
[he] alleges that his services [were] terminated without the benefit
of due process and valid grounds in accordance with law.
Furthermore, he was not paid his overtime pay, premium pay for
working during holidays/rest days, night shift differentials and finally
claims for payment of damages and attorney’s fees having been
forced to litigate the present complaint.
"Upon the other hand, respondent [BPC] is a domestic corporation
duly organized and existing under Philippine laws and is represented
herein by its General Manager HUDSON CHUA, [the] individual
respondent. Respondents thru counsel allege that complainant’s
separation from service was done pursuant to Art. 283 of the Labor
Code. The respondent [BPC] was on temporary closure due to repair
and general maintenance and it applied for clearance with the
Department of Labor and Employment, Regional Office No. XI to shut
down and to dismiss employees (par. 2 position paper). And due to
the insistence of herein complainant he was paid his separation
benefits (Annexes C and D, ibid). Consequently, when respondent
[BPC] partially reopened in January 2001, [Peñaranda] failed to
reapply. Hence, he was not terminated from employment much less
illegally. He opted to severe employment when he insisted payment
of his separation benefits. Furthermore, being a managerial
employee he is not entitled to overtime pay and if ever he rendered
services beyond the normal hours of work, [there] was no office
order/or authorization for him to do so. Finally, respondents allege
that the claim for damages has no legal and factual basis and that
the instant complaint must necessarily fail for lack of merit."10
The labor arbiter ruled that there was no illegal dismissal and that
petitioner’s Complaint was premature because he was still employed
by BPC.11 The temporary closure of BPC’s plant did not terminate his
employment, hence, he need not reapply when the plant reopened.
According to the labor arbiter, petitioner’s money claims for illegal
dismissal was also weakened by his quitclaim and admission during
the clarificatory conference that he accepted separation benefits,
sick and vacation leave conversions and thirteenth month pay.12
Nevertheless, the labor arbiter found petitioner entitled to overtime
pay, premium pay for working on rest days, and attorney’s fees in
the total amount of P21,257.98.13
Ruling of the NLRC
Respondents filed an appeal to the NLRC, which deleted the award
of overtime pay and premium pay for working on rest days.
According to the Commission, petitioner was not entitled to these
awards because he was a managerial employee.14
Ruling of the Court of Appeals
In its Resolution dated January 27, 2003, the CA dismissed
Peñaranda’s Petition for Certiorari. The appellate court held that he
failed to: 1) attach copies of the pleadings submitted before the labor
arbiter and NLRC; and 2) explain why the filing and service of the
Petition was not done by personal service.15
In its later Resolution dated July 4, 2003, the CA denied
reconsideration on the ground that petitioner still failed to submit
the pleadings filed before the NLRC.16
Hence this Petition.17
The Issues
Petitioner states the issues in this wise:
"The [NLRC] committed grave abuse of discretion amounting to
excess or lack of jurisdiction when it entertained the APPEAL of the
respondent[s] despite the lapse of the mandatory period of TEN
DAYS.1avvphil.net
"The [NLRC] committed grave abuse of discretion amounting to an
excess or lack of jurisdiction when it rendered the assailed
RESOLUTIONS dated May 8, 2002 and AUGUST 16, 2002
REVERSING AND SETTING ASIDE the FACTUAL AND LEGAL
FINDINGS of the [labor arbiter] with respect to the following:
"I. The finding of the [labor arbiter] that [Peñaranda] is a regular,
common employee entitled to monetary benefits under Art. 82 [of
the Labor Code].
"II. The finding that [Peñaranda] is entitled to the payment of
OVERTIME PAY and OTHER MONETARY BENEFITS."18
The Court’s Ruling
The Petition is not meritorious.
Preliminary Issue:
Resolution on the Merits
The CA dismissed Peñaranda’s Petition on purely technical grounds,
particularly with regard to the failure to submit supporting
documents.
In Atillo v. Bombay,19 the Court held that the crucial issue is whether
the documents accompanying the petition before the CA sufficiently
supported the allegations therein. Citing this case, Piglas-Kamao v.
NLRC20 stayed the dismissal of an appeal in the exercise of its equity
jurisdiction to order the adjudication on the merits.
The Petition filed with the CA shows a prima facie case. Petitioner
attached his evidence to challenge the finding that he was a
managerial employee.21 In his Motion for Reconsideration, petitioner
also submitted the pleadings before the labor arbiter in an attempt
to comply with the CA rules.22 Evidently, the CA could have ruled on
the Petition on the basis of these attachments. Petitioner should be
deemed in substantial compliance with the procedural requirements.
Under these extenuating circumstances, the Court does not hesitate
to grant liberality in favor of petitioner and to tackle his substantive
arguments in the present case. Rules of procedure must be adopted
to help promote, not frustrate, substantial justice.23 The Court
frowns upon the practice of dismissing cases purely on procedural
grounds.24 Considering that there was substantial compliance,25 a
liberal interpretation of procedural rules in this labor case is more in
keeping with the constitutional mandate to secure social justice.26
First Issue:
Timeliness of Appeal
Under the Rules of Procedure of the NLRC, an appeal from the
decision of the labor arbiter should be filed within 10 days from
receipt thereof.27
Petitioner’s claim that respondents filed their appeal beyond the
required period is not substantiated. In the pleadings before us,
petitioner fails to indicate when respondents received the Decision
of the labor arbiter. Neither did the petitioner attach a copy of the
challenged appeal. Thus, this Court has no means to determine from
the records when the 10-day period commenced and terminated.
Since petitioner utterly failed to support his claim that respondents’
appeal was filed out of time, we need not belabor that point. The
parties alleging have the burden of substantiating their allegations.28
Second Issue:
Nature of Employment
Petitioner claims that he was not a managerial employee, and
therefore, entitled to the award granted by the labor arbiter.
Article 82 of the Labor Code exempts managerial employees from
the coverage of labor standards. Labor standards provide the
working conditions of employees, including entitlement to overtime
pay and premium pay for working on rest days.29 Under this
provision, managerial employees are "those whose primary duty
consists of the management of the establishment in which they are
employed or of a department or subdivision."30
The Implementing Rules of the Labor Code state that managerial
employees are those who meet the following conditions:
"(1) Their primary duty consists of the management of the
establishment in which they are employed or of a department or
subdivision thereof;
"(2) They customarily and regularly direct the work of two or more
employees therein;
"(3) They have the authority to hire or fire other employees of lower
rank; or their suggestions and recommendations as to the hiring and
firing and as to the promotion or any other change of status of other
employees are given particular weight."31
The Court disagrees with the NLRC’s finding that petitioner was a
managerial employee. However, petitioner was a member of the
managerial staff, which also takes him out of the coverage of labor
standards. Like managerial employees, officers and members of the
managerial staff are not entitled to the provisions of law on labor
standards.32 The Implementing Rules of the Labor Code define As supervisor, petitioner is deemed a member of the managerial
members of a managerial staff as those with the following duties and staff.35
responsibilities: Noteworthy, even petitioner admitted that he was a supervisor. In
"(1) The primary duty consists of the performance of work directly his Position Paper, he stated that he was the foreman responsible
related to management policies of the employer; for the operation of the boiler.36 The term foreman implies that he
"(2) Customarily and regularly exercise discretion and independent was the representative of management over the workers and the
judgment; operation of the department.37 Petitioner’s evidence also showed
"(3) (i) Regularly and directly assist a proprietor or a managerial that he was the supervisor of the steam plant.38 His classification as
employee whose primary duty consists of the management of the supervisor is further evident from the manner his salary was paid.
establishment in which he is employed or subdivision thereof; or (ii) He belonged to the 10% of respondent’s 354 employees who were
execute under general supervision work along specialized or paid on a monthly basis; the others were paid only on a daily basis.39
technical lines requiring special training, experience, or knowledge; On the basis of the foregoing, the Court finds no justification to
or (iii) execute under general supervision special assignments and award overtime pay and premium pay for rest days to petitioner.
tasks; and WHEREFORE, the Petition is DENIED. Costs against petitioner.
"(4) who do not devote more than 20 percent of their hours worked SO ORDERED.
in a workweek to activities which are not directly and closely related
to the performance of the work described in paragraphs (1), (2), and
(3) above."33
As shift engineer, petitioner’s duties and responsibilities were as
follows:
"1. To supply the required and continuous steam to all consuming
units at minimum cost.
"2. To supervise, check and monitor manpower workmanship as well
as operation of boiler and accessories.
"3. To evaluate performance of machinery and manpower.
"4. To follow-up supply of waste and other materials for fuel.
"5. To train new employees for effective and safety while working.
"6. Recommend parts and supplies purchases.
"7. To recommend personnel actions such as: promotion, or
disciplinary action.
"8. To check water from the boiler, feedwater and softener,
regenerate softener if beyond hardness limit.
"9. Implement Chemical Dosing.
"10. Perform other task as required by the superior from time to
time."34
The foregoing enumeration, particularly items 1, 2, 3, 5 and 7
illustrates that petitioner was a member of the managerial staff. His
duties and responsibilities conform to the definition of a member of
a managerial staff under the Implementing Rules.
Petitioner supervised the engineering section of the steam plant
boiler. His work involved overseeing the operation of the machines
and the performance of the workers in the engineering section. This
work necessarily required the use of discretion and independent
judgment to ensure the proper functioning of the steam plant boiler.
ASSOCIATION OF MARINE OFFICERS AND SEAMEN OF REYES
AND LIM CO. (MANAGERS FOR CARGO MARINE CORP.),
petitioner,
vs.
HON. BIENVENIDO E. LAGUESMA, REYES AND LIM CO. INC.
(MANAGERS FOR CARGO MARINE CORP.), respondent.
Ruscius G. Zaragoza for petitioner.
Jonathan M. Polines for private respondent.
ROMERO, J.:
The question before us in this petition for certiorari is whether or not
the major patron, minor patron, chief mate and chief engineer of a
vessel are managerial employees.
Public respondent Undersecretary of Labor has ruled that they are,
contrary to petitioner labor organization's contention that they are
rank and file employees who may form part of the union.
The facts antecedent to this petition are as follows:
The Association of Marine Officers and Seamen of Reyes and Lim
Co., a legitimate labor organization, filed a petition for certification
election on March 11, 1992. On June 1, 1992 the Med-Arbiter issued
an Order for the conduct of a certification election in the bargaining
unit covering the entire complement of four vessels.
He ruled that even as private respondent company alleges certain
employees to be managerial, supervisory and confidential
employees (master, chief mate, second mate, third mate, radio
officer, chief engineer and second engineer), the records is bereft of
any showing that the marine officers are performing managerial,
supervisory, and confidential functions.1
The dispositive portion of the Med-Arbiter's Order reads:
WHEREFORE, on the foregoing consideration, let a certification
election be conducted among the regular marine officers and seamen
of Reyes and Lim Co., Inc. (Managers for Cargo Marine Corp.) within
twenty (20) days from receipt hereof, subject to the usual pre-
election conference of the parties to thresh out the mechanics and
other details of the election. The payroll of the company three (3)
months prior to the filing of the petition shall be used as the basis in
determining the list of eligible voters.
The choices are:
a) Association of Marine Officers and Seamen of Reyes and Lim Co.,
Inc. (Managers for Cargo Marine Corp.); and
b) No Union.
SO ORDERED.2
Private respondent Reyes and Lim Co. Inc. appealed this Order to
the Secretary of Labor and Employment on the issues of employees'
status as well as the composition of the bargaining unit. In a
resolution dated October 8, 1992, Undersecretary Bienvenido E.
Laguesma modified the order and held that:
PREMISES CONSIDERED, the Resolution of the Med-Arbiter dated 01
June 1992 is hereby modified so as to exclude Major Patron, Minor
Patron, and Chief (Mate) and Chief Marine Engineer from the
bargaining unit.
SO RESOLVED.3
Their motion for reconsideration having been denied for lack of merit
on November 5, 1992,4 petitioner comes to us seeking to have the
Resolution of public respondent set aside and to have us rule that
the major patron, minor patron, chief mate and chief engineer are
not managerial employees but rank and file. As members of the rank
and file, these employees would be eligible to form part of the union
and take part in the certification election.
To buttress their position that the aforementioned employees are not
managerial but rank and file employees, petitioner advances the
following arguments.
Firstly, it is petitioner's belief that aside from having the power to
execute management policies and to hire and fire, transfer, suspend,
lay-off, recall, discharge, assign or discipline employees, a
managerial employee should also have the power and prerogative to
lay down management policies. Petitioner claims that the major
patron, minor patron, and chief mate and chief engineer do not have
the power to lay down management policies because they merely
navigate the bay and rivers of Pasig and Bataan hauling liquefied
petroleum (gasul). Moreover, private respondent's operations
department has "high-tech maritime gadgets and equipment" in
order to monitor and direct the operations of the boats while en route
to its destination.5
Secondly, petitioner asserts that the job descriptions submitted by
private respondent Reyes and Lim Co., Inc. 6 and relied upon by
public respondent Undersecretary of Labor do not apply to the
situation of the aforementioned employees. Furthermore, the job
descriptions were not acknowledged and even outrightly denied by
the workers themselves.7 The employees of Reyes and Lim Co., Inc.
possess no seamen's book, for they do not traverse the high seas
but merely the bay and rivers from Pasig to Bataan. They therefore,
are not covered by the job descriptions applicable to Filipino
seafarers, but are ordinary workers.8
Finally, public respondent's determination of who are managerial
employees constitutes a deprivation of the worker's right to self-
organization and free collective bargaining since such resolution is
made during pre-election conference on "inclusion-exclusion"
proceedings.9
Petitioner's arguments fail to persuade.
The only question for resolution is whether or not the major patron,
minor patron, chief mate and chief engineer of the vessels, M/T
Banak, M/T Butane, M/T Biya, and M/T Alkane are managerial
employees, and as such, not qualified, therefore, to join a union.
Public respondent opined in the following manner:
An evaluation of the afore-mentioned job descriptions submitted by
respondent-appellant vis-a-vis Article 212 (m) of the Labor Code, as
amended, showed that the following are managerial positions,
namely: Major Patron, Minor Patron, Chief Mate and Chief Marine
Engineer. This must be so, because among the Major Patron's duties
and functions are to take complete charge and command of the ship
and to perform the duties and responsibilities of a ship captain; a
Minor Patron commands a vessel, plying within limits of inland
waterways, ports and estuaries, while a Chief Mate acts as the
executive officer next in command to the captain on board a ship;
and a Chief Marine Engineer plans, coordinates the engine-room
department including supervision of subordinates. In the
performance of said functions, it is clear that they are vested with
powers or prerogatives to lay down and execute management
policies.10
While petitioners assail public respondent for the use of the "Job
Descriptions of Main Category of Particular Ranks and Ratings of
Filipino Seafarers" submitted by private respondent, they offer no
other superior proof by way of reliability and substance.
Such an attack on these job descriptions cannot be considered
adequate. Apart from general claims made in a joint affidavit
executed by 18 employees, including the masters, chief mates and
chief engineers of three vessels,11 there appears no other proof on
record of the functions they actually perform on board the vessels
and of the functions performed by other marine officers of the same
position.
To buttress their position, private respondents assert that these "Job
Descriptions" have been adopted as reference by the POEA and
considered as matters of public knowledge in consonance with the
provisions of the Code of Commerce, Philippine Merchant Marine
Rules and Regulations and customary maritime practice with respect
to the inherent and customary duties of captains, chief mates, and
chief marine engineers on board the vessels.12 This declaration
remaining unrebutted, we are led to the conclusion that the job
descriptions submitted constitute industry practice, at the very least.
More importantly, the credence accorded by public respondent to
these job descriptions is worthy of due respect. The factual findings
of quasi-judicial agencies, such as the Department of Labor and
Employment which are supported by substantial evidence, are
binding on us and entitled to great respect considering their
expertise in their respective fields.13
Petitioner's failure to overcome the submissions of private
respondent as regards these descriptions and to rebut the same
leaves us no alternative but to accept public respondent's evaluation
of facts.
Furthermore, petitioner's arguments that the employees who work
on board the vessels are not seamen bound by the job descriptions,
is untenable. The fact that they transport liquefied petroleum gas
(LPG) and the vessels operate for only five hours are immaterial for
these do not remove them from the coverage of maritime law. While
they haul LPG, they continue to do so on board a vessel which
traverses waters. Neither the length of operating time nor the area
traveled would alter the fact that the vessels are used as means of
transportation by water and within the sphere of maritime law to
which the job descriptions are applicable. The workers on board are
not, as petitioners would have us believe, in the category of gasoline
delivery helpers or ordinary employees.14
We next consider the law concerning managerial employees.
The second paragraph of Article 82 referring to managerial
employees in the Labor Code reads, thus:
. . . "managerial employees" refers to those whose primary duty
consists of the management of the establishment in which they are
employed or of a department or subdivision thereof, and to other
officers or members of the managerial staff. . . .
Article 212 (m) of the Code further defines managerial employees
as:
(m) "Managerial employee" is one who is vested with powers or
prerogatives to lay down and execute management policies and/or
to
hire, transfer, suspend, lay-off, recall, discharge, assign or discipline
employees. . . ..
The implementing rules and regulations of the Labor Code further
provide a more detailed definition of managerial employees. Rule I,
Book III, Section 2 states:
Sec. 2. Exemption. — The provisions of this Rule shall not apply to
the following persons if they qualify for exemption under the
conditions set forth herein:
(a) . . . .
(b) Managerial employees, if they meet all of the following
conditions, namely:
(1) Their primary duty consists of the management of the
establishment in which they are employed or of a department or should be done during the
subdivision thereof; pre-election conference on "inclusion-exclusion proceeding," and not
(2) They customarily and regularly direct the work of two or more during the processing of their petition for certification election. We
employees therein; find this issue not a proper one for consideration since it is raised in
(3) They have the authority to hire or fire other employees of lower this petition for the first time. The well-settled principle that issues
rank; or their suggestions and recommendations as to the hiring and not raised in the court a quo cannot be raised for the first time on
firing and as to the promotion or any other change of status of other appeal for being offensive to basic rules of fair play, justice, and due
employees are given particular weight. process applies even in labor cases.15
(c) . . . . IN VIEW WHEREOF, the instant petition is DISMISSED. The
It is very significant to note that we are not dealing here with challenged resolution of the Undersecretary of Labor is AFFIRMED.
employees of an ordinary business establishment. The business of a SO ORDERED.
marine or shipping corporation is, by its very nature, different from
other corporate concerns.
Petitioner claims that the marine officers in question must possess
the power to lay down and formulate management policies aside
from just executing such policies.
Public respondent committed no error in concluding that the
positions of major patron, minor patron, chief mate, and chief
engineer are managerial because the job descriptions on record
disclose that the major patron's duties include taking complete
charge and command of the ship and performing the responsibilities
and duties of a ship captain; the minor patron also commands the
vessel, plying the limits of inland waterways, ports and estuaries;
the chief mate performs the functions of an executive officer next in
command to the captain; and the chief marine engineer takes over-
all charge of the operation of the ship's mechanical and electrical
equipment. Public respondent's assessment of these managerial
functions of the subject officers has adequate basis and should not
be disturbed.
The functions which these officers discharge pertain to the
navigation of the vessel. Even if there are advanced communications
equipment on board, the importance of the position of the officers in
assessing risks and evaluating the vessel's situation remains
indisputable. The exercise of discretion and judgment in directing a
ship's course is as much managerial in nature as decisions arrived at
in the confines of the more conventional board room or executive
office.
We find that there has been no grave abuse of discretion on the part
of the respondent Undersecretary of Labor when it ruled that the
major patron, minor patron, chief mate and chief engineer are
managerial employees who are not allowed under Article 245 of the
Labor Code to join, assist or form any labor organization.
With regard to the next issue, petitioners content that the
determination of whether or not said employees are managerial
G.R. No. 101761. March 24, 1993.
NATIONAL SUGAR REFINERIES CORPORATION, petitioner, vs.
NATIONAL LABOR RELATIONS COMMISSION and NBSR
SUPERVISORY UNION, (PACIWU) TUCP, respondents.
Jose Mario C. Bunag for petitioner.
The Solicitor General and the Chief Legal Officer, NLRC, for public
respondent.
Zoilo V. de la Cruz for private respondent.
DECISION
REGALADO, J p:
The main issue presented for resolution in this original petition for
certiorari is whether supervisory employees, as defined in Article 212
(m), Book V of the Labor Code, should be considered as officers or
members of the managerial staff under Article 82, Book III of the
same Code, and hence are not entitled to overtime rest day and
holiday pay.
Petitioner National Sugar Refineries Corporation (NASUREFCO), a
corporation which is fully owned and controlled by the Government,
operates three (3) sugar refineries located at Bukidnon, Iloilo and
Batangas. The Batangas refinery was privatized on April 11, 1992
pursuant to Proclamation No. 50. 1 Private respondent union
represents the former supervisors of the NASUREFCO Batangas
Sugar Refinery, namely, the Technical Assistant to the Refinery
Operations Manager, Shift Sugar Warehouse Supervisor, Senior
Financial/Budget Analyst, General Accountant, Cost Accountant,
Sugar Accountant, Junior Financial/Budget Analyst, Shift Boiler
Supervisor,, Shift Operations Chemist, Shift Electrical Supervisor,
General Services Supervisor, Instrumentation Supervisor,
Community Development Officer, Employment and Training
Supervisor, Assistant Safety and Security Officer, Head and
Personnel Services, Head Nurse, Property Warehouse Supervisor,
Head of Inventory Control Section, Shift Process Supervisor, Day
Maintenance Supervisor and Motorpool Supervisor.
On June 1, 1988, petitioner implemented a Job Evaluation (JE)
Program affecting all employees, from rank-and-file to department
heads. The JE Program was designed to rationalized the duties and
functions of all positions, reestablish levels of responsibility, and
recognize both wage and operational structures. Jobs were ranked
according to effort, responsibility, training and working conditions
and relative worth of the job. As a result, all positions were re-
evaluated, and all employees including the members of respondent
union were granted salary adjustments and increases in benefits
commensurate to their actual duties and functions.
We glean from the records that for about ten years prior to the JE
Program, the members of respondent union were treated in the
same manner as rank-and file employees. As such, they used to be
paid overtime, rest day and holiday pay pursuant to the provisions
of Articles 87, 93 and 94 of the Labor Code as amended. With the
implementation of the JE Program, the following adjustments were
made: (1) the members of respondent union were re-classified
under levels S-5 to S-8 which are considered managerial staff for
purposes of compensation and benefits; (2) there was an increase
in basic pay of the average of 50% of their basic pay prior to the JE
Program, with the union members now enjoying a wide gap
(P1,269.00 per month) in basic pay compared to the highest paid
rank-and-file employee; (3) longevity pay was increased on top of
alignment adjustments; (4) they were entitled to increased company
COLA of P225.00 per month; (5) there was a grant of P100.00
allowance for rest day/holiday work.
On May 11, 1990, petitioner NASUREFCO recognized herein
respondent union, which was organized pursuant to Republic Act NO.
6715 allowing supervisory employees to form their own unions, as
the bargaining representative of all the supervisory employees at the
NASUREFCO Batangas Sugar Refinery.
Two years after the implementation of the JE Program, specifically
on June 20, 1990, the members of herein respondent union filed a
complainant with the executive labor arbiter for non-payment of
overtime, rest day and holiday pay allegedly in violation of Article
100 of the Labor Code.
On January 7, 1991, Executive Labor Arbiter Antonio C. Pido
rendered a decision 2 disposing as follows:
"WHEREFORE, premises considered, respondent National Sugar
refineries Corporation is hereby directed to —
1. pay the individual members of complainant union the usual
overtime pay, rest day pay and holiday pay enjoyed by them instead
of the P100.00 special allowance which was implemented on June
11, 1988; and
2. pay the individual members of complainant union the difference
in money value between the P100.00 special allowance and the
overtime pay, rest day pay and holiday pay that they ought to have
received from June 1, 1988.
All other claims are hereby dismissed for lack of merit.
SO ORDERED."
In finding for the members therein respondent union, the labor ruled
that the along span of time during which the benefits were being
paid to the supervisors has accused the payment thereof to ripen
into contractual obligation; at the complainants cannot be estopped
from questioning the validity of the new compensation package
despite the fact that they have been receiving the benefits
therefrom, considering that respondent union was formed only a
year after the implementation of the Job Evaluation Program, hence
there was no way for the individual supervisors to express their
collective response thereto prior to the formation of the union; and
the comparative computations presented by the private respondent
union showed that the P100.00 special allowance given NASUREFCO
fell short of what the supervisors ought to receive had the overtime
pay rest day pay and holiday pay not been discontinued, which
arrangement, therefore, amounted to a diminution of benefits.
On appeal, in a decision promulgated on July 19, 1991 by its Third
Division, respondent National Labor Relations Commission (NLRC)
affirmed the decision of the labor arbiter on the ground that the
members of respondent union are not managerial employees, as
defined under Article 212 (m) of the Labor Code and, therefore, they
are entitled to overtime, rest day and holiday pay. Respondent NLRC
declared that these supervisory employees are merely exercising
recommendatory powers subject to the evaluation, review and final
action by their department heads; their responsibilities do not
require the exercise of discretion and independent judgment; they
do not participate in the formulation of management policies nor in
the hiring or firing of employees; and their main function is to carry
out the ready policies and plans of the corporation. 3
Reconsideration of said decision was denied in a resolution of public
respondent dated August 30, 1991. 4
Hence this petition for certiorari, with petitioner NASUREFCO
asseverating that public respondent commission committed a grave
abuse of discretion in refusing to recognized the fact that the
members of respondent union are members of the managerial staff
who are not entitled to overtime, rest day and holiday pay; and in
making petitioner assume the "double burden" of giving the benefits
due to rank-and-file employees together with those due to
supervisors under the JE Program.
We find creditable merit in the petition and that the extraordinary
writ of certiorari shall accordingly issue.
The primordial issue to be resolved herein is whether the members
of respondent union are entitled to overtime, rest day and holiday
pay. Before this can be resolved, however it must of necessity be
ascertained first whether or not the union members, as supervisory
employees, are to be considered as officers or members of the
managerial staff who are exempt from the coverage of Article 82 of
the Labor Code.
It is not disputed that the members of respondent union are
supervisory employees, as defined employees, as defined under
Article 212(m), Book V of the Labor Code on Labor Relations, which
reads:
"(m) 'Managerial employee' is one who is vested with powers or
prerogatives to lay down and execute management policies and/or
to hire, transfer, suspend, lay-off, recall, discharged, assign or
discipline employees. Supervisory employees are those who, in the
interest of the employer effectively recommend such managerial
actions if the exercise of such authority is not merely routinary or
clerical in nature but requires the use of independent judgment. All
employees not falling within any of those above definitions are
considered rank-and-file employees of this Book."
Respondent NLRC, in holding that the union members are entitled to
overtime, rest day and holiday pay, and in ruling that the latter are
not managerial employees, adopted the definition stated in the
aforequoted statutory provision.
Petitioner, however, avers that for purposes of determining whether
or not the members of respondent union are entitled to overtime,
rest day and holiday pay, said employees should be considered as
"officers or members of the managerial staff" as defined under
Article 82, Book III of the Labor Code on "Working Conditions and
Rest Periods" and amplified in Section 2, Rule I, Book III of the Rules
to Implement the Labor Code, to wit:
"Art. 82 Coverage. — The provisions 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.
"As used herein, 'managerial employees' refer to those whose
primary duty consists of the management of the establishment in
which they are employed or of a department or subdivision thereof,
and to other officers or members of the managerial staff." (Emphasis
supplied.)
xxx xxx xxx
'Sec. 2. Exemption. — The provisions of this rule shall not apply to
the following persons if they qualify for exemption under the
condition set forth herein:
xxx xxx xxx
(b) Managerial employees, if they meet all of the following
conditions, namely:
(1) Their primary duty consists of the management of the
establishment in which they are employed or of a department or
subdivision thereof:
(2) They customarily and regularly direct the work of two or more
employees therein:
(3) They have the authority to hire or fire other employees of lower
rank; or their suggestions and recommendations as to the hiring and
firing and as to the promotion or any other change of status of other
employees are given particular weight.
(c) Officers or members of a managerial staff if they perform the
following duties and responsibilities:
(1) The primary duty consists of the performance of work directly
related to management policies of their employer;
(2) Customarily and regularly exercise discretion and independent
judgment;
(3) (i) Regularly and directly assist a proprietor or a managerial
employee whose primary duty consists of the management of the
establishment in which he is employed or subdivision thereof; or (ii)
execute under general supervision work along specialized or
technical lines requiring special training, experience, or knowledge;
or (iii) execute under general supervision special assignments and
tasks; and
(4) Who do not devote more 20 percent of their hours worked in a
work-week to activities which are not directly and closely related to
the performance of the work described in paragraphs (1), (2), and
above."
It is the submission of petitioner that while the members of
respondent union, as supervisors, may not be occupying managerial
positions, they are clearly officers or members of the managerial
staff because they meet all the conditions prescribed by law and,
hence, they are not entitled to overtime, rest day and supervisory
employees under Article 212 (m) should be made to apply only to
the provisions on Labor Relations, while the right of said employees
to the questioned benefits should be considered in the light of the
meaning of a managerial employee and of the officers or members
of the managerial staff, as contemplated under Article 82 of the Code
and Section 2, Rule I Book III of the implementing rules. In other
words, for purposes of forming and joining unions, certification
elections, collective bargaining, and so forth, the union members are
supervisory employees. In terms of working conditions and rest
periods and entitlement to the questioned benefits, however, they
are officers or members of the managerial staff, hence they are not
entitled thereto.
While the Constitution is committed to the policy of social justice and
the protection of the working class, it should not be supposed that
every labor dispute will be automatically decided in favor of labor.
Management also has its own rights which, as such, are entitled to
respect and enforcement in the interest of simple fair play. Out of its
concern for those with less privileges in life, this Court has inclined
more often than not toward the worker and upheld his cause in his
conflicts with the employer. Such favoritism, however, has not
blinded us to the rule that justice is in every case for the deserving,
to be dispensed in the light of the established facts and the
applicable law and doctrine. 5
This is one such case where we are inclined to tip the scales of justice
in favor of the employer.
The question whether a given employee is exempt from the benefits
of the law is a factual one dependent on the circumstances of the
particular case, In determining whether an employee is within the
terms of the statutes, the criterion is the character of the work
performed, rather than the title of the employee's position. 6
Consequently, while generally this Court is not supposed to review
the factual findings of respondent commission, substantial justice
and the peculiar circumstances obtaining herein mandate a deviation
from the rule.
A cursory perusal of the Job Value Contribution Statements 7 of the
union members will readily show that these supervisory employees
are under the direct supervision of their respective department
superintendents and that generally they assist the latter in planning,
organizing, staffing, directing, controlling communicating and in
making decisions in attaining the company's set goals and
objectives. These supervisory employees are likewise responsible for
the effective and efficient operation of their respective departments.
More specifically, their duties and functions include, among others,
the following operations whereby the employee:
1) assists the department superintendent in the following:
a) planning of systems and procedures relative to department
activities;
b) organizing and scheduling of work activities of the department,
which includes employee shifting scheduled and manning
complement;
c) decision making by providing relevant information data and other
inputs;
d) attaining the company's set goals and objectives by giving his full
support;
e) selecting the appropriate man to handle the job in the
department; and
f) preparing annual departmental budget;
2) observes, follows and implements company policies at all times
and recommends disciplinary action on erring subordinates;
3) trains and guides subordinates on how to assume responsibilities
and become more productive;
4) conducts semi-annual performance evaluation of his subordinates
and recommends necessary action for their
development/advancement;
5) represents the superintendent or the department when appointed
and authorized by the former;
6) coordinates and communicates with other inter and intra
department supervisors when necessary;
7) recommends disciplinary actions/promotions;
8) recommends measures to improve work methods, equipment
performance, quality of service and working conditions;
9) sees to it that safety rules and regulations and procedure and are
implemented and followed by all NASUREFCO employees,
recommends revisions or modifications to said rules when deemed
necessary, and initiates and prepares reports for any observed
abnormality within the refinery;
10) supervises the activities of all personnel under him and goes to
it that instructions to subordinates are properly implemented; and
11) performs other related tasks as may be assigned by his
immediate superior.
From the foregoing, it is apparent that the members of respondent
union discharge duties and responsibilities which ineluctably qualify
them as officers or members of the managerial staff, as defined in
Section 2, Rule I Book III of the aforestated Rules to Implement the
Labor Code, viz.: (1) their primary duty consists of the performance
of work directly related to management policies of their employer;
(2) they customarily and regularly exercise discretion and
independent judgment; (3) they regularly and directly assist the
managerial employee whose primary duty consist of the
management of a department of the establishment in which they are
employed (4) they execute, under general supervision, work along
specialized or technical lines requiring special training, experience,
or knowledge; (5) they execute, under general supervision, special
assignments and tasks; and (6) they do not devote more than 20%
of their hours worked in a work-week to activities which are not
directly and clearly related to the performance of their work
hereinbefore described.
Under the facts obtaining in this case, we are constrained to agree
with petitioner that the union members should be considered as
officers and members of the managerial staff and are, therefore,
exempt from the coverage of Article 82. Perforce, they are not
entitled to overtime, rest day and holiday.
The distinction made by respondent NLRC on the basis of whether or
not the union members are managerial employees, to determine the
latter's entitlement to the questioned benefits, is misplaced and
inappropriate. It is admitted that these union members are
supervisory employees and this is one instance where the
nomenclatures or titles of their jobs conform with the nature of their
functions. Hence, to distinguish them from a managerial employee,
as defined either under Articles 82 or 212 (m) of the Labor Code, is
puerile and in efficacious. The controversy actually involved here
seeks a determination of whether or not these supervisory
employees ought to be considered as officers or members of the
managerial staff. The distinction, therefore, should have been made
along that line and its corresponding conceptual criteria.
II. We likewise no not subscribe to the finding of the labor arbiter
that the payment of the questioned benefits to the union members
has ripened into a contractual obligation.
A. Prior to the JE Program, the union members, while being
supervisors, received benefits similar to the rank-and-file employees
such as overtime, rest day and holiday pay, simply because they
were treated in the same manner as rank-and-file employees, and
their basic pay was nearly on the same level as those of the latter,
aside from the fact that their specific functions and duties then as
supervisors had not been properly defined and delineated from those
of the rank-and-file. Such fact is apparent from the clarification
made by petitioner in its motion for reconsideration 8 filed with
respondent commission in NLRC Case No. CA No. I-000058, dated
August 16, 1991, wherein, it lucidly explained:
"But, complainants no longer occupy the same positions they held
before the JE Program. Those positions formerly classified as
'supervisory' and found after the JE Program to be rank-and-file were
classified correctly and continue to receive overtime, holiday and
restday pay. As to them, the practice subsists.
"However, those whose duties confirmed them to be supervisory,
were re-evaluated, their duties re-defined and in most cases their
organizational positions re-designated to confirm their superior rank
and duties. Thus, after the JE program, complainants cannot be said
to occupy the same positions." 9
It bears mention that this positional submission was never refuted
nor controverted by respondent union in any of its pleadings filed
before herein public respondent or with this Court. Hence, it can be
safely concluded therefrom that the members of respondent union
were paid the questioned benefits for the reason that, at that time,
they were rightfully entitled thereto. Prior to the JE Program, they
could not be categorically classified as members or officers of the
managerial staff considering that they were then treated merely on
the same level as rank-and-file. Consequently, the payment thereof
could not be construed as constitutive of voluntary employer Not so long ago, on this particular score, we had the occasion to hold
practice, which cannot be now be unilaterally withdrawn by that:
petitioner. To be considered as such, it should have been practiced ". . . it is the prerogative of the management to regulate, according
over a long period of time, and must be shown to have been to its discretion and judgment, all aspects of employment. This flows
consistent and deliberate. 10 from the established rule that labor law does not authorize the
The test or rationale of this rule on long practice requires an substitution of the judgment of the employer in the conduct of its
indubitable showing that the employer agreed to continue giving the business. Such management prerogative may be availed of without
benefits knowingly fully well that said employees are not covered by fear of any liability so long as it is exercised in good faith for the
the law requiring payment thereof. 11 In the case at bar, respondent advancement of the employer's interest and not for the purpose of
union failed to sufficiently establish that petitioner has been defeating on circumventing the rights of employees under special
motivated or is wont to give these benefits out of pure generosity. laws or valid agreement and are not exercised in a malicious, harsh,
B. It remains undisputed that the implementation of the JE Program, oppressive, vindictive or wanton manner or out of malice or spite."
the members of private respondent union were re-classified under 13
levels S-5 S-8 which were considered under the program as WHEREFORE, the impugned decision and resolution of respondent
managerial staff purposes of compensation and benefits, that they National Labor Relations Commission promulgated on July 19, 1991
occupied re-evaluated positions, and that their basic pay was and August 30, 1991, respectively, are hereby ANNULLED and SET
increased by an average of 50% of their basic salary prior to the JE ASIDE for having been rendered and adopted with grave abuse of
Program. In other words, after the JE Program there was an ascent discretion, and the basic complaint of private respondent union is
in position, rank and salary. This in essence is a promotion which is DISMISSED.
defined as the advancement from one position to another with an Narvasa, C . J ., Padilla, Nocon and Campos, Jr., JJ., concur.
increase in duties and responsibilities as authorized by law, and
usually accompanied by an increase in salary. 12
Quintessentially, with the promotion of the union members, they are
no longer entitled to the benefits which attach and pertain
exclusively to their positions. Entitlement to the benefits provided
for by law requires prior compliance with the conditions set forth
therein. With the promotion of the members of respondent union,
they occupied positions which no longer met the requirements
imposed by law. Their assumption of these positions removed them
from the coverage of the law, ergo, their exemption therefrom.
As correctly pointed out by petitioner, if the union members really
wanted to continue receiving the benefits which attach to their
former positions, there was nothing to prevent them from refusing
to accept their promotions and their corresponding benefits. As the
sating goes by, they cannot have their cake and eat it too or, as
petitioner suggests, they could not, as a simple matter of law and
fairness, get the best of both worlds at the expense of NASUREFCO.
Promotion of its employees is one of the jurisprudentially-recognized
exclusive prerogatives of management, provided it is done in good
faith. In the case at bar, private respondent union has miserably
failed to convince this Court that the petitioner acted implementing
the JE Program. There is no showing that the JE Program was
intended to circumvent the law and deprive the members of
respondent union of the benefits they used to receive.
APEX MINING COMPANY, INC., petitioner, service [1973-19881) –– 25,119.30
vs. or in the total of FIFTY FIVE THOUSAND ONE HUNDRED SIXTY ONE
NATIONAL LABOR RELATIONS COMMISSION and SINCLITICA PESOS AND 42/100 (P55,161.42).
CANDIDO, respondents. SO ORDERED.1
Bernabe B. Alabastro for petitioner. 
 Angel Fernandez for private Not satisfied therewith, petitioner appealed to the public respondent
National Labor Relations Commission (NLRC), wherein in due course
respondent.
a decision was rendered by the Fifth Division thereof on July 20,
1989 dismissing the appeal for lack of merit and affirming the
GANCAYCO, J.:
appealed decision. A motion for reconsideration thereof was denied
Is the househelper in the staff houses of an industrial company a
in a resolution of the NLRC dated June 29, 1990.
domestic helper or a regular employee of the said firm? This is the
Hence, the herein petition for review by certiorari, which
novel issue raised in this petition.
appopriately should be a special civil action for certiorari, and which
Private respondent Sinclita Candida was employed by petitioner
in the interest of justice, is hereby treated as such.2 The main thrust
Apex Mining Company, Inc. on May 18, 1973 to perform laundry
of the petition is that private respondent should be treated as a mere
services at its staff house located at Masara, Maco, Davao del Norte.
househelper or domestic servant and not as a regular employee of
In the beginning, she was paid on a piece rate basis. However, on
petitioner.
January 17, 1982, she was paid on a monthly basis at P250.00 a
The petition is devoid of merit.
month which was ultimately increased to P575.00 a month.
Under Rule XIII, Section l(b), Book 3 of the Labor Code, as amended,
On December 18, 1987, while she was attending to her assigned
the terms "househelper" or "domestic servant" are defined as
task and she was hanging her laundry, she accidentally slipped and
follows:
hit her back on a stone. She reported the accident to her immediate
The term "househelper" as used herein is synonymous to the term
supervisor Mila de la Rosa and to the personnel officer, Florendo D.
"domestic servant" and shall refer to any person, whether male or
Asirit. As a result of the accident she was not able to continue with
female, who renders services in and about the employer's home and
her work. She was permitted to go on leave for medication. De la
which services are usually necessary or desirable for the
Rosa offered her the amount of P 2,000.00 which was eventually
maintenance and enjoyment thereof, and ministers exclusively to
increased to P5,000.00 to persuade her to quit her job, but she
the personal comfort and enjoyment of the employer's family.3
refused the offer and preferred to return to work. Petitioner did not
The foregoing definition clearly contemplates such househelper or
allow her to return to work and dismissed her on February 4, 1988.
domestic servant who is employed in the employer's home to
On March 11, 1988, private respondent filed a request for assistance
minister exclusively to the personal comfort and enjoyment of the
with the Department of Labor and Employment. After the parties
employer's family. Such definition covers family drivers, domestic
submitted their position papers as required by the labor arbiter
servants, laundry women, yayas, gardeners, houseboys and other
assigned to the case on August 24, 1988 the latter rendered a
similar househelps.
decision, the dispositive part of which reads as follows:
The definition cannot be interpreted to include househelp or
WHEREFORE, Conformably With The Foregoing, judgment is hereby
laundrywomen working in staffhouses of a company, like petitioner
rendered ordering the respondent, Apex Mining Company, Inc.,
who attends to the needs of the company's guest and other persons
Masara, Davao del Norte, to pay the complainant, to wit:
availing of said facilities. By the same token, it cannot be considered
1 Salary
to extend to then driver, houseboy, or gardener exclusively working
Differential –– P16,289.20
in the company, the staffhouses and its premises. They may not be
2. Emergency Living
considered as within the meaning of a "househelper" or "domestic
Allowance –– 12,430.00
servant" as above-defined by law.
3. 13th Month Pay
The criteria is the personal comfort and enjoyment of the family of
Differential –– 1,322.32
the employer in the home of said employer. While it may be true
4. Separation Pay
that the nature of the work of a househelper, domestic servant or
(One-month for
laundrywoman in a home or in a company staffhouse may be similar
every year of
in nature, the difference in their circumstances is that in the former
instance they are actually serving the family while in the latter case,
whether it is a corporation or a single proprietorship engaged in
business or industry or any other agricultural or similar pursuit,
service is being rendered in the staffhouses or within the premises
of the business of the employer. In such instance, they are
employees of the company or employer in the business concerned
entitled to the privileges of a regular employee.
Petitioner contends that it is only when the househelper or domestic
servant is assigned to certain aspects of the business of the
employer that such househelper or domestic servant may be
considered as such as employee. The Court finds no merit in making
any such distinction. The mere fact that the househelper or domestic
servant is working within the premises of the business of the
employer and in relation to or in connection with its business, as in
its staffhouses for its guest or even for its officers and employees,
warrants the conclusion that such househelper or domestic servant
is and should be considered as a regular employee of the employer
and not as a mere family househelper or domestic servant as
contemplated in Rule XIII, Section l(b), Book 3 of the Labor Code,
as amended.
Petitioner denies having illegally dismissed private respondent and
maintains that respondent abandoned her work.1âwphi1 This
argument notwithstanding, there is enough evidence to show that
because of an accident which took place while private respondent
was performing her laundry services, she was not able to work and
was ultimately separated from the service. She is, therefore, entitled
to appropriate relief as a regular employee of petitioner. Inasmuch
as private respondent appears not to be interested in returning to
her work for valid reasons, the payment of separation pay to her is
in order.
WHEREFORE, the petition is DISMISSED and the appealed decision
and resolution of public respondent NLRC are hereby AFFIRMED. No
pronouncement as to costs.
SO ORDERED.
Narvasa, Cruz, Griño-Aquino and Medialdea, JJ., concur.
SAN MIGUEL BREWERY, INC., petitioner, workers paid on "pakiao" basis, payment of accumulated vacation
vs. and sick leave and attorney's fees, as well as the award of additional
DEMOCRATIC LABOR ORGANIZATION, ET AL., respondents. separation pay, were either dismissed, denied, or set aside.
Paredes, Poblador, Cruz and Nazareno for petitioner. 
 Delfin N. Its motion for reconsideration having been denied by the industrial
court en banc, which affirmed the decision of the court a quo with
Mercader for respondents.
few exceptions, the San Miguel Brewery, Inc. interposed the present
BAUTISTA ANGELO, J.:
petition for review.
On January 27, 1955, the Democratic Labor Association filed
Anent the finding of the court a quo, as affirmed by the Court of
complaint against the San Miguel Brewery, Inc. embodying 12
Industrial Relations, to the effect that outside or field sales personnel
demands for the betterment of the conditions of employment of its
are entitled to the benefits of the Eight-Hour Labor Law, the
members. The company filed its answer to the complaint specifically
pertinent facts are as follows:
denying its material averments and answering the demands point by
After the morning roll call, the employees leave the plant of the
point. The company asked for the dismissal of the complaint.
company to go on their respective sales routes either at 7:00 a.m.
At the hearing held sometime in September, 1955, the union
for soft drinks trucks, or 8:00 a.m. for beer trucks. They do not have
manifested its desire to confine its claim to its demands for overtime,
a daily time record. The company never require them to start their
night-shift differential pay, and attorney's fees, although it was
work as outside sales personnel earlier than the above schedule.
allowed to present evidence on service rendered during Sundays and
The sales routes are so planned that they can be completed within 8
holidays, or on its claim for additional separation pay and sick and
hours at most, or that the employees could make their sales on their
vacation leave compensation.1äwphï1.ñët
routes within such number of hours variable in the sense that
After the case had been submitted for decision, Presiding Judge Jose
sometimes they can be completed in less than 8 hours, sometimes
S. Bautista, who was commissioned to receive the evidence,
6 to 7 hours, or more. The moment these outside or field employees
rendered decision expressing his disposition with regard to the points
leave the plant and while in their sales routes they are on their own,
embodied in the complaint on which evidence was presented.
and often times when the sales are completed, or when making short
Specifically, the disposition insofar as those points covered by this
trip deliveries only, they go back to the plant, load again, and make
petition for review are concerned, is as follows:
another round of sales. These employees receive monthly salaries
1. With regard to overtime compensation, Judge Bautista held that
and sales commissions in variable amounts. The amount of
the provisions of the Eight-Hour Labor Law apply to the employees
compensation they receive is uncertain depending upon their
concerned for those working in the field or engaged in the sale of the
individual efforts or industry. Besides the monthly salary, they are
company's products outside its premises and consequently they
paid sales commission that range from P30, P40, sometimes P60,
should be paid the extra compensation accorded them by said law in
P70, to sometimes P90, P100 and P109 a month, at the rate of P0.01
addition to the monthly salary and commission earned by them,
to P0.01-½ per case.
regardless of the meal allowance given to employees who work up
It is contended that since the employees concerned are paid a
to late at night.
commission on the sales they make outside of the required 8 hours
2. As to employees who work at night, Judge Bautista decreed that
besides the fixed salary that is paid to them, the Court of Industrial
they be paid their corresponding salary differentials for work done
Relations erred in ordering that they be paid an overtime
at night prior to January 1, 1949 with the present qualification: 25%
compensation as required by the Eight-Hour Labor Law for the
on the basis of their salary to those who work from 6:00 to 12:00
reason that the commission they are paid already takes the place of
p.m., and 75% to those who work from 12:01 to 6:00 in the
such overtime compensation. Indeed, it is claimed, overtime
morning.
compensation is an additional pay for work or services rendered in
3. With regard to work done during Sundays and holidays, Judge
excess of 8 hours a day by an employee, and if the employee is
Bautista also decreed that the employees concerned be paid an
already given extra compensation for labor performed in excess of 8
additional compensation of 25% as provided for in Commonwealth
hours a day, he is not covered by the law. His situation, the company
Act No. 444 even if they had been paid a compensation on monthly
contends, can be likened to an employee who is paid on piece-work,
salary basis.
"pakiao", or commission basis, which is expressly excluded from the
The demands for the application of the Minimum Wage Law to
operation of the Eight-Hour Labor Law.1
We are in accord with this view, for in our opinion the Eight-Hour
Labor Law only has application where an employee or laborer is paid
on a monthly or daily basis, or is paid a monthly or daily
compensation, in which case, if he is made to work beyond the
requisite period of 8 hours, he should be paid the additional
compensation prescribed by law. This law has no application when
the employee or laborer is paid on a piece-work, "pakiao", or
commission basis, regardless of the time employed. The philosophy
behind this exemption is that his earnings in the form of commission
based on the gross receipts of the day. His participation depends
upon his industry so that the more hours he employs in the work the
greater are his gross returns and the higher his commission. This
philosophy is better explained in Jewel Tea Co. v. Williams, C.C.A.
Okla., 118 F. 2d 202, as follows:
The reasons for excluding an outside salesman are fairly apparent.
Such salesman, to a greater extent, works individually. There are no
restrictions respecting the time he shall work and he can earn as
much or as little, within the range of his ability, as his ambition
dictates. In lieu of overtime he ordinarily receives commissions as
extra compensation. He works away from his employer's place of
business, is not subject to the personal supervision of his employer,
and his employer has no way of knowing the number of hours he
works per day.
True it is that the employees concerned are paid a fixed salary for
their month of service, such as Benjamin Sevilla, a salesman, P215;
Mariano Ruedas, a truck driver, P155; Alberto Alpaza and Alejandro
Empleo, truck helpers, P125 each, and sometimes they work in
excess of the required 8-hour period of work, but for their extra work
they are paid a commission which is in lieu of the extra compensation
to which they are entitled. The record shows that these employees
during the period of their employment were paid sales commission
ranging from P30, P40, sometimes P60, P70, to sometimes P90,
P100 and P109 a month depending on the volume of their sales and
their rate of commission per case. And so, insofar is the extra work
they perform, they can be considered as employees paid on piece
work, "pakiao", or commission basis. The Department of Labor,
called upon to implement, the Eight-Hour Labor Law, is of this
opinion when on December 9, 1957 it made the ruling on a query
submitted to it, thru the Director of the Bureau of Labor Standards,
to the effect that field sales personnel receiving regular monthly
salaries, plus commission, are not subject to the Eight-Hour Labor
Law. Thus, on this point, said official stated:
. . . Moreover, when a fieldman receives a regular monthly salary
plus commission on percentage basis of his sales, it is also the
established policy of the Office to consider his commission as
payment for the extra time he renders in excess of eight hours,
thereby classifying him as if he were on piecework basis, and
therefore, technically speaking, he is not subject to the Eight-Hour
Labor Law.
We are, therefore, of the opinion that the industrial court erred in
holding that the Eight-Hour Labor Law applies to the employees
composing the outside service force and in ordering that they be paid
the corresponding additional compensation.
With regard to the claim for night salary differentials, the industrial
court found that claimants Magno Johnson and Jose Sanchez worked
with the respondent company during the period specified by them in
their testimony and that watchmen Zoilo Illiga, Inocentes Prescillas
and Daniel Cayuca rendered night duties once every three weeks
continuously during the period of the employment and that they
were never given any additional compensation aside from their
monthly regular salaries. The court found that the company started
paying night differentials only in January, 1949 but never before that
time. And so it ordered that the employees concerned be paid 25%
additional compensation for those who worked from 6:00 to 12:00
p.m. and 75% additional compensation for those who worked from
12:01 to 6: 00 in the morning. It is now contended that this ruling
is erroneous because an award for night shift differentials cannot be
given retroactive effect but can only be entertained from the date of
demand which was on January 27, 1953, citing in support thereof
our ruling in Earnshaws Docks & Honolulu Iron Works v. The Court
of Industrial Relations, et al., L-8896, January 25, 1957.
This ruling, however, has no application here for it appears that
before the filing of the petition concerning this claim a similar one
had already been filed long ago which had been the subject of
negotiations between the union and the company which culminated
in a strike in 1952. Unfortunately, however, the strike fizzled out and
the strikers were ordered to return to work with the understanding
that the claim for night salary differentials should be settled in court.
It is perhaps for this reason that the court a quo granted this claim
in spite of the objection of the company to the contrary.
The remaining point to be determined refers to the claim for pay for
Sundays and holidays for service performed by some claimants who
were watchmen or security guards. It is contended that these
employees are not entitled to extra pay for work done during these
days because they are paid on a monthly basis and are given one
day off which may take the place of the work they may perform
either on Sunday or any holiday.
We disagree with this claim because it runs counter to law. Section
4 of Commonwealth Act No. 444 expressly provides that no person,
firm or corporation may compel an employee or laborer to work
during Sundays and legal holidays unless he is paid an additional
sum of 25% of his regular compensation. This proviso is mandatory,
regardless of the nature of compensation. The only exception is with
regard to public utilities who perform some public service.
WHEREFORE, the decision of the industrial court is hereby modified
as follows: the award with regard to extra work performed by those
employed in the outside or field sales force is set aside. The rest of
the decision insofar as work performed on Sundays and holidays
covering watchmen and security guards, as well as the award for
night salary differentials, is affirmed. No costs.
Bengzon, C.J., Labrador, Concepcion, Reyes, J.B.L., Barrera,
Paredes, Dizon, Regala and Makalintal, JJ., concur.
 Padilla, J., took
no part.
UNION OF FILIPRO EMPLOYEES (UFE), petitioner,
vs.
BENIGNO VIVAR, JR., NATIONAL LABOR RELATIONS
COMMISSION and NESTLÉ PHILIPPINES, INC. (formerly
FILIPRO, INC.), respondents.
Jose C. Espinas for petitioner.
Siguion Reyna, Montecillo & Ongsiako for private respondent.
GUTIERREZ, JR., J.:
This labor dispute stems from the exclusion of sales personnel from
the holiday pay award and the change of the divisor in the
computation of benefits from 251 to 261 days.
On November 8, 1985, respondent Filipro, Inc. (now Nestle
Philippines, Inc.) filed with the National Labor Relations Commission
(NLRC) a petition for declaratory relief seeking a ruling on its rights
and obligations respecting claims of its monthly paid employees for
holiday pay in the light of the Court's decision in Chartered Bank
Employees Association v. Ople (138 SCRA 273 [1985]).
Both Filipro and the Union of Filipino Employees (UFE) agreed to
submit the case for voluntary arbitration and appointed respondent
Benigno Vivar, Jr. as voluntary arbitrator.
On January 2, 1980, Arbitrator Vivar rendered a decision directing
Filipro to:
pay its monthly paid employees holiday pay pursuant to Article 94
of the Code, subject only to the exclusions and limitations specified
in Article 82 and such other legal restrictions as are provided for in
the Code. (Rollo,
p. 31)
Filipro filed a motion for clarification seeking (1) the limitation of the
award to three years, (2) the exclusion of salesmen, sales
representatives, truck drivers, merchandisers and medical
representatives (hereinafter referred to as sales personnel) from the
award of the holiday pay, and (3) deduction from the holiday pay
award of overpayment for overtime, night differential, vacation and
sick leave benefits due to the use of 251 divisor. (Rollo, pp. 138-
145)
Petitioner UFE answered that the award should be made effective
from the date of effectivity of the Labor Code, that their sales
personnel are not field personnel and are therefore entitled to
holiday pay, and that the use of 251 as divisor is an established
employee benefit which cannot be diminished.
On January 14, 1986, the respondent arbitrator issued an order
declaring that the effectivity of the holiday pay award shall retroact
to November 1, 1974, the date of effectivity of the Labor Code. He
adjudged, however, that the company's sales personnel are field
personnel and, as such, are not entitled to holiday pay. He likewise
ruled that with the grant of 10 days' holiday pay, the divisor should
be changed from 251 to 261 and ordered the reimbursement of
overpayment for overtime, night differential, vacation and sick leave
pay due to the use of 251 days as divisor.
Both Nestle and UFE filed their respective motions for partial
reconsideration. Respondent Arbitrator treated the two motions as
appeals and forwarded the case to the NLRC which issued a
resolution dated May 25, 1987 remanding the case to the respondent
arbitrator on the ground that it has no jurisdiction to review decisions
in voluntary arbitration cases pursuant to Article 263 of the Labor
Code as amended by Section 10, Batas Pambansa Blg. 130 and as
implemented by Section 5 of the rules implementing B.P. Blg. 130.
However, in a letter dated July 6, 1987, the respondent arbitrator
refused to take cognizance of the case reasoning that he had no
more jurisdiction to continue as arbitrator because he had resigned
from service effective May 1, 1986.
Hence, this petition.
The petitioner union raises the following issues:
1) Whether or not Nestle's sales personnel are entitled to holiday
pay; and
2) Whether or not, concomitant with the award of holiday pay, the
divisor should be changed from 251 to 261 days and whether or not
the previous use of 251 as divisor resulted in overpayment for
overtime, night differential, vacation and sick leave pay.
The petitioner insists that respondent's sales personnel are not field
personnel under Article 82 of the Labor Code. The respondent
company controverts this assertion.
Under Article 82, field personnel are not entitled to holiday pay. Said
article defines field personnel as "non-agritultural employees who
regularly perform their duties away from the principal place of
business or branch office of the employer and whose actual hours of
work in the field cannot be determined with reasonable certainty."
The controversy centers on the interpretation of the clause "whose
actual hours of work in the field cannot be determined with
reasonable certainty."
It is undisputed that these sales personnel start their field work at
8:00 a.m. after having reported to the office and come back to the
office at 4:00 p.m. or 4:30 p.m. if they are Makati-based.
The petitioner maintains that the period between 8:00 a.m. to 4:00
or 4:30 p.m. comprises the sales personnel's working hours which
can be determined with reasonable certainty.
The Court does not agree. The law requires that the actual hours of
work in the field be reasonably ascertained. The company has no
way of determining whether or not these sales personnel, even if
they report to the office before 8:00 a.m. prior to field work and
come back at 4:30 p.m, really spend the hours in between in actual
field work.
We concur with the following disquisition by the respondent
arbitrator:
The requirement for the salesmen and other similarly situated
employees to report for work at the office at 8:00 a.m. and return
at 4:00 or 4:30 p.m. is not within the realm of work in the field as
defined in the Code but an exercise of purely management
prerogative of providing administrative control over such personnel.
This does not in any manner provide a reasonable level of
determination on the actual field work of the employees which can
be reasonably ascertained. The theoretical analysis that salesmen
and other similarly-situated workers regularly report for work at
8:00 a.m. and return to their home station at 4:00 or 4:30 p.m.,
creating the assumption that their field work is supervised, is surface
projection. Actual field work begins after 8:00 a.m., when the sales
personnel follow their field itinerary, and ends immediately before
4:00 or 4:30 p.m. when they report back to their office. The period
between 8:00 a.m. and 4:00 or 4:30 p.m. comprises their hours of
work in the field, the extent or scope and result of which are subject
to their individual capacity and industry and which "cannot be
determined with reasonable certainty." This is the reason why
effective supervision over field work of salesmen and medical
representatives, truck drivers and merchandisers is practically a
physical impossibility. Consequently, they are excluded from the ten
holidays with pay award. (Rollo, pp. 36-37)
Moreover, the requirement that "actual hours of work in the field
cannot be determined with reasonable certainty" must be read in
conjunction with Rule IV, Book III of the Implementing Rules which
provides:
Rule IV Holidays with Pay
Sec. 1. Coverage — This rule shall apply to all employees except:
xxx xxx xxx
(e) Field personnel and other employees whose time and
performance is unsupervised by the employer . . . (Emphasis
supplied)
While contending that such rule added another element not found in
the law (Rollo, p. 13), the petitioner nevertheless attempted to show
that its affected members are not covered by the abovementioned
rule. The petitioner asserts that the company's sales personnel are
strictly supervised as shown by the SOD (Supervisor of the Day)
schedule and the company circular dated March 15, 1984 (Annexes
2 and 3, Rollo, pp. 53-55).
Contrary to the contention of the petitioner, the Court finds that the
aforementioned rule did not add another element to the Labor Code
definition of field personnel. The clause "whose time and
performance is unsupervised by the employer" did not amplify but
merely interpreted and expounded the clause "whose actual hours
of work in the field cannot be determined with reasonable certainty."
The former clause is still within the scope and purview of Article 82
which defines field personnel. Hence, in deciding whether or not an
employee's actual working hours in the field can be determined with
reasonable certainty, query must be made as to whether or not such
employee's time and performance is constantly supervised by the
employer.
The SOD schedule adverted to by the petitioner does not in the least
signify that these sales personnel's time and performance are
supervised. The purpose of this schedule is merely to ensure that
the sales personnel are out of the office not later than 8:00 a.m. and
are back in the office not earlier than 4:00 p.m.
Likewise, the Court fails to see how the company can monitor the
number of actual hours spent in field work by an employee through
the imposition of sanctions on absenteeism contained in the
company circular of March 15, 1984.
The petitioner claims that the fact that these sales personnel are
given incentive bonus every quarter based on their performance is
proof that their actual hours of work in the field can be determined
with reasonable certainty.
The Court thinks otherwise.
The criteria for granting incentive bonus are: (1) attaining or
exceeding sales volume based on sales target; (2) good collection
performance; (3) proper compliance with good market hygiene; (4)
good merchandising work; (5) minimal market returns; and (6)
proper truck maintenance. (Rollo, p. 190).
The above criteria indicate that these sales personnel are given
incentive bonuses precisely because of the difficulty in measuring
their actual hours of field work. These employees are evaluated by
the result of their work and not by the actual hours of field work
which are hardly susceptible to determination.
In San Miguel Brewery, Inc. v. Democratic Labor Organization (8
SCRA 613 [1963]), the Court had occasion to discuss the nature of
the job of a salesman. Citing the case of Jewel Tea Co. v. Williams,
C.C.A. Okla., 118 F. 2d 202, the Court stated:
The reasons for excluding an outside salesman are fairly apparent.
Such a salesman, to a greater extent, works individually. There are
no restrictions respecting the time he shall work and he can earn as
much or as little, within the range of his ability, as his ambition
dictates. In lieu of overtime he ordinarily receives commissions as
extra compensation. He works away from his employer's place of
business, is not subject to the personal supervision of his employer,
and his employer has no way of knowing the number of hours he
works per day.
While in that case the issue was whether or not salesmen were
entitled to overtime pay, the same rationale for their exclusion as
field personnel from holiday pay benefits also applies.
The petitioner union also assails the respondent arbitrator's ruling
that, concomitant with the award of holiday pay, the divisor should
be changed from 251 to 261 days to include the additional 10
holidays and the employees should reimburse the amounts overpaid
by Filipro due to the use of 251 days' divisor.
Arbitrator Vivar's rationale for his decision is as follows:
. . . The new doctrinal policy established which ordered payment of
ten holidays certainly adds to or accelerates the basis of conversion
and computation by ten days. With the inclusion of ten holidays as
paid days, the divisor is no longer 251 but 261 or 262 if election day
is counted. This is indeed an extremely difficult legal question of
interpretation which accounts for what is claimed as falling within
the concept of "solutio indebti."
When the claim of the Union for payment of ten holidays was
granted, there was a consequent need to abandon that 251 divisor.
To maintain it would create an impossible situation where the
employees would benefit with additional ten days with pay but would
simultaneously enjoy higher benefits by discarding the same ten
days for purposes of computing overtime and night time services
and considering sick and vacation leave credits. Therefore,
reimbursement of such overpayment with the use of 251 as divisor
arises concomitant with the award of ten holidays with pay. (Rollo,
p. 34)
The divisor assumes an important role in determining whether or not
holiday pay is already included in the monthly paid employee's salary
and in the computation of his daily rate. This is the thrust of our
pronouncement in Chartered Bank Employees Association v. Ople
(supra). In that case, We held:
It is argued that even without the presumption found in the rules
and in the policy instruction, the company practice indicates that the
monthly salaries of the employees are so computed as to include the
holiday pay provided by law. The petitioner contends otherwise.
One strong argument in favor of the petitioner's stand is the fact
that the Chartered Bank, in computing overtime compensation for
its employees, employs a "divisor" of 251 days. The 251 working
days divisor is the result of subtracting all Saturdays, Sundays and
the ten (10) legal holidays from the total number of calendar days
in a year. If the employees are already paid for all non-working days,
the divisor should be 365 and not 251.
In the petitioner's case, its computation of daily ratio since
September 1, 1980, is as follows:
monthly rate x 12 months
———————————
251 days
Following the criterion laid down in the Chartered Bank case, the use
of 251 days' divisor by respondent Filipro indicates that holiday pay
is not yet included in the employee's salary, otherwise the divisor
should have been 261.
It must be stressed that the daily rate, assuming there are no
intervening salary increases, is a constant figure for the purpose of
computing overtime and night differential pay and commutation of
sick and vacation leave credits. Necessarily, the daily rate should
also be the same basis for computing the 10 unpaid holidays.
The respondent arbitrator's order to change the divisor from 251 to
261 days would result in a lower daily rate which is violative of the
prohibition on non-diminution of benefits found in Article 100 of the
Labor Code. To maintain the same daily rate if the divisor is adjusted
to 261 days, then the dividend, which represents the employee's
annual salary, should correspondingly be increased to incorporate
the holiday pay. To illustrate, if prior to the grant of holiday pay, the
employee's annual salary is P25,100, then dividing such figure by
251 days, his daily rate is P100.00 After the payment of 10 days'
holiday pay, his annual salary already includes holiday pay and totals
P26,100 (P25,100 + 1,000). Dividing this by 261 days, the daily rate
is still P100.00. There is thus no merit in respondent Nestle's claim
of overpayment of overtime and night differential pay and sick and
vacation leave benefits, the computation of which are all based on
the daily rate, since the daily rate is still the same before and after
the grant of holiday pay.
Respondent Nestle's invocation of solutio indebiti, or payment by
mistake, due to its use of 251 days as divisor must fail in light of the
Labor Code mandate that "all doubts in the implementation and
interpretation of this Code, including its implementing rules and
regulations, shall be resolved in favor of labor." (Article 4).
Moreover, prior to September 1, 1980, when the company was on a
6-day working schedule, the divisor used by the company was 303,
indicating that the 10 holidays were likewise not paid. When Filipro
shifted to a 5-day working schebule on September 1, 1980, it had
the chance to rectify its error, if ever there was one but did not do
so. It is now too late to allege payment by mistake.
Nestle also questions the voluntary arbitrator's ruling that holiday
pay should be computed from November 1, 1974. This ruling was
not questioned by the petitioner union as obviously said decision was
favorable to it. Technically, therefore, respondent Nestle should have
filed a separate petition raising the issue of effectivity of the holiday
pay award. This Court has ruled that an appellee who is not an
appellant may assign errors in his brief where his purpose is to
maintain the judgment on other grounds, but he cannot seek
modification or reversal of the judgment or affirmative relief unless
he has also appealed. (Franco v. Intermediate Appellate Court, 178
SCRA 331 [1989], citing La Campana Food Products, Inc. v.
Philippine Commercial and Industrial Bank, 142 SCRA 394 [1986]).
Nevertheless, in order to fully settle the issues so that the execution
of the Court's decision in this case may not be needlessly delayed by
another petition, the Court resolved to take up the matter of
effectivity of the holiday pay award raised by Nestle.
Nestle insists that the reckoning period for the application of the
holiday pay award is 1985 when the Chartered Bank decision,
promulgated on August 28, 1985, became final and executory, and
not from the date of effectivity of the Labor Code. Although the Court
does not entirely agree with Nestle, we find its claim meritorious.
In Insular Bank of Asia and America Employees' Union (IBAAEU) v.
Inciong, 132 SCRA 663 [1984], hereinafter referred to as the IBAA
case, the Court declared that Section 2, Rule IV, Book III of the
implementing rules and Policy Instruction No. 9, issued by the then
Secretary of Labor on February 16, 1976 and April 23, 1976,
respectively, and which excluded monthly paid employees from
holiday pay benefits, are null and void. The Court therein reasoned
that, in the guise of clarifying the Labor Code's provisions on holiday
pay, the aforementioned implementing rule and policy instruction
amended them by enlarging the scope of their exclusion. The
Chartered Bank case reiterated the above ruling and added the
"divisor" test.
However, prior to their being declared null and void, the
implementing rule and policy instruction enjoyed the presumption of
validity and hence, Nestle's non-payment of the holiday benefit up
to the promulgation of the IBAA case on October 23, 1984 was in
compliance with these presumably valid rule and policy instruction.
In the case of De Agbayani v. Philippine National Bank, 38 SCRA 429
[1971], the Court discussed the effect to be given to a legislative or
executive act subsequently declared invalid:
xxx xxx xxx
. . . It does not admit of doubt that prior to the declaration of nullity
such challenged legislative or executive act must have been in force
and had to be complied with. This is so as until after the judiciary,
in an appropriate case, declares its invalidity, it is entitled to
obedience and respect. Parties may have acted under it and may
have changed their positions. What could be more fitting than that
in a subsequent litigation regard be had to what has been done while
such legislative or executive act was in operation and presumed to
be valid in all respects. It is now accepted as a doctrine that prior to
its being nullified, its existence as a fact must be reckoned with. This
is merely to reflect awareness that precisely because the judiciary is
the government organ which has the final say on whether or not a
legislative or executive measure is valid, a period of time may have
elapsed before it can exercise the power of judicial review that may
lead to a declaration of nullity. It would be to deprive the law of its
quality of fairness and justice then, if there be no recognition of what
had transpired prior to such adjudication.
In the language of an American Supreme Court decision: "The actual
existence of a statute, prior to such a determination of
[unconstitutionality], is an operative fact and may have
consequences which cannot justly be ignored. The past cannot
always be erased by a new judicial declaration. The effect of the
subsequent ruling as to invalidity may have to be considered in
various aspects, — with respect to particular relations, individual and
corporate, and particular conduct, private and official." (Chicot
County Drainage Dist. v. Baxter States Bank, 308 US 371, 374
[1940]). This language has been quoted with approval in a resolution
in Araneta v. Hill (93 Phil. 1002 [1952]) and the decision in Manila
Motor Co., Inc. v. Flores (99 Phil. 738 [1956]). An even more recent
instance is the opinion of Justice Zaldivar speaking for the Court in
Fernandez v. Cuerva and Co. (21 SCRA 1095 [1967]. (At pp. 434-
435)
The "operative fact" doctrine realizes that in declaring a law or rule
null and void, undue harshness and resulting unfairness must be
avoided. It is now almost the end of 1991. To require various
companies to reach back to 1975 now and nullify acts done in good
faith is unduly harsh. 1984 is a fairer reckoning period under the
facts of this case.
Applying the aforementioned doctrine to the case at bar, it is not far-
fetched that Nestle, relying on the implicit validity of the
implementing rule and policy instruction before this Court nullified
them, and thinking that it was not obliged to give holiday pay
benefits to its monthly paid employees, may have been moved to
grant other concessions to its employees, especially in the collective
bargaining agreement. This possibility is bolstered by the fact that
respondent Nestle's employees are among the highest paid in the
industry. With this consideration, it would be unfair to impose
additional burdens on Nestle when the non-payment of the holiday
benefits up to 1984 was not in any way attributed to Nestle's fault.
The Court thereby resolves that the grant of holiday pay be effective,
not from the date of promulgation of the Chartered Bank case nor
from the date of effectivity of the Labor Code, but from October 23,
1984, the date of promulgation of the IBAA case.
WHEREFORE, the order of the voluntary arbitrator in hereby
MODIFIED. The divisor to be used in computing holiday pay shall be
251 days. The holiday pay as above directed shall be computed from
October 23, 1984. In all other respects, the order of the respondent
arbitrator is hereby AFFIRMED.
SO ORDERED.
MANILA TERMINAL COMPANY, INC., petitioner,
vs.
THE COURT OF INDUSTRIAL RELATIONS and MANILA
TERMINAL RELIEF AND MUTUAL AID ASSOCIATION,
respondents.
Perkins, Ponce Enrile and Contreras for petitioner.
 Antonio V.
Raquiza, Honesto Ricobal and Perfecto E. Llacarfor respondent
Association.
 Mariano R. Padilla for respondent Court of Industrial
Relations.
PARAS, C. J.:
On September 1, 1945, the Manila Terminal Company, Inc.
hereinafter to be referred as to the petitioner, undertook the arrastre
service in some of the piers in Manila's Port Area at the request and
under the control of the United States Army. The petitioner hired
some thirty men as watchmen on twelve-hour shifts at a
compensation of P3 per day for the day shift and P6 per day for the
night shift. On February 1, 1946, the petitioner began the postwar
operation of the arrastre service at the present at the request and
under the control of the Bureau of Customs, by virtue of a contract
entered into with the Philippine Government. The watchmen of the
petitioner continued in the service with a number of substitutions
and additions, their salaries having been raised during the month of
February to P4 per day for the day shift and P6.25 per day for the
nightshift. On March 28, 1947, Dominador Jimenez, a member of the
Manila Terminal Relief and Mutual Aid Association, sent a letter to
the Department of Labor, requesting that the matter of overtime pay
be investigated, but nothing was done by the Department. On April
29, 1947, Victorino Magno Cruz and five other employees, also
member of the Manila Transit Mutual Aid Association, filed a 5-point
demand with the Department of Labor, including overtime pay, but
the Department again filed to do anything about the matter. On May
27, 1947, the petitioner instituted the system of strict eight-hour
shifts. On June 19, 1947, the Manila Port Terminal Police Association,
not registered in accordance with the provisions of Commonwealth
Act No. 213, filed a petition with the Court of Industrial Relations.
On July 16, 1947, the Manila Terminal Relief and Mutual Aid
Association was organized for the first time, having been granted
certificate No. 375 by the Department of Labor. On July 28, 1947,
Manila Terminal Relief and Mutual Aid Association filed an amended
petition with the Court of Industrial Relations praying, among others,
that the petitioner be ordered to pay its watchmen or police force
overtime pay from the commencement of their employment. On May
9, 1949, by virtue of Customs Administrative Order No. 81 and
Executive Order No. 228 of the President of the Philippines, the
entire police force of the petitioner was consolidated with the Manila
Harvor Police of the Customs Patrol Service, a Government agency
under the exclusive control of the Commissioner of Customs and the
Secretary of Finance The Manila Terminal Relief and Mutual Aid
Association will hereafter be referred to as the Association.
Judge V. Jimenez Yanson of the Court of Industrial Relations in his
decision of April 1, 1950, as amended on April 18, 1950, while
dismissing other demands of the Association for lack of jurisdiction,
ordered the petitioner to pay to its police force —
(a) Regular or base pay corresponding to four hours' overtime plus
25 per cent thereof as additional overtime compensation for the
period from September 1, 1945 to May 24, 1947;
(b) Additional compensation of 25 per cent to those who worked
from 6:00 p.m. to 6:00 a.m. during the same period:
(c) Additional compensation of 50 per cent for work performed on
Sundays and legal holidays during the same period;
(d) Additional compensation of 50 per cent for work performed on
Sundays and legal holidays from May 24, 1947 to May 9, 1949; and
(e) Additional compensation of 25 per cent for work performed at
night from May 29, 1947 to May 9, 1949.
With reference to the pay for overtime service after the watchmen
had been integrated into the Manila Harbor Police, Judge Yanson
ruled that the court has no jurisdiction because it affects the Bureau
of Customs, an instrumentality of the Government having no
independent personality and which cannot be sued without the
consent of the State. (Metran vs. Paredes, 45. Off. Gaz., 2835.)
The petitioner find a motion for reconsideration. The Association also
filed a motion for reconsideration in so far its other demands were
dismissed. Judge Yanson, concurred in by Judge Jose S. Bautista,
promulgated on July 13, 1950, a resolution denying both motions for
reconsideration. Presiding Judge Arsenio C. Roldan, in a separate
opinion concurred in by Judge Modesto Castillo, agreed with the
decision of Judge Yanson of April 1, 1950, as to the dismissal of other
demands of the Association, but dissented therefrom as to the
granting of overtime pay. In a separate decisive opinion, Judge Juan
S. Lanting concurred in the dismissal of other demands of the
Association. With respect to overtime compensation, Judge Lanting
ruled:
1. The decision under review should be affirmed in so far it grants
compensation for overtime on regular days (not Sunday and legal
holidays)during the period from the date of entrance to duty to May
24, 1947, such compensation to consists of the amount
corresponding to the four hours' overtime at the regular rate and an
additional amount of 25 per cent thereof.
2. As to the compensation for work on Sundays and legal holidays,
the petitioner should pay to its watchmen the compensation that
corresponds to the overtime (in excess of 8 hours) at the regular
rate only, that is, without any additional amount, thus modifying the
decision under review accordingly.
3. The watchmen are not entitled to night differential pay for past
services, and therefore the decision should be reversed with the
respect thereto.
The petitioner has filed a present petition for certiorari. Its various
contentions may be briefly summed up in the following propositions:
(1) The Court of Industrial Relations has no jurisdiction to render a
money judgment involving obligation in arrears. (2) The agreement
under which its police force were paid certain specific wages for
twelve-hour shifts, included overtime compensation. (3) The
Association is barred from recovery by estoppel and laches. (4) the
nullity or invalidity of the employment contract precludes any
recovery by the Association. (5) Commonwealth Act No. 4444 does
not authorize recovery of back overtime pay.
The contention that the Court of Industrial Relations has no
jurisdiction to award a money judgment was already overruled by
this Court in G.R. No. L-4337, Detective & protective Bureau, Inc.
vs. Court of Industrial Relations and United Employees Welfare
Association, 90 Phil., 665, in this wise: "It is also argued that the
respondent court has no jurisdiction to award overtime pay, which
is money judgment. We believe that under Commonwealth Act No.
103 the Court is empowered to make the order for the purpose of
settling disputes between the employer and employee1. As a matter
of fact this Court has confirmed an order of the Court of Industrial
Relations requiring the Elks Club to pay to its employees certain sum
of money as overtime back wages from June 3, 1939 to March 13,
1941. This, in spite the allegation of lack or excess of jurisdiction on
the part of said court. (45 Off. Gaz., 3829; 80 Phil. 272)"
The important point stressed by the petitioner is that the contract
between it and the Association upon the commencement of the
employment of its watchman was to the certain rates of pay,
including overtime compensation namely, P3 per day for the day
shift and P6 per day for night shift beginning September 1, 1945,
and P4 per day shift and P6.25 per day for the night shift since
February, 1946. The record does not bear out these allegations. The
petitioner has relied merely on the facts that its watchmen had
worked on twelve-hour shifts at specific wages per day and that no
complaint was made about the matter until, first on March 28, 1947
and, secondly, on April 29, 1947.
In times of acute unemployment, the people, urged by the instinct
of self-preservation, go from place to place and from office to office
in search for any employment, regardless of its terms and
conditions, their main concern in the first place being admission to
some work. Specially for positions requiring no special qualifications,
applicants would be good as rejected if they ever try to be inquisitive
about the hours of work or the amount of salary, ever attempt to
dictate their terms. The petitioner's watchmen must have railroaded
themselves into their employment, so to speak, happy in the thought
that they would then have an income on which to subsist. But, at
the same time, they found themselves required to work for twelve
hours a day. True, there was agreement to work, but can it fairly be
supposed that they had the freedom to bargain in any way, much
less to insist in the observance of the Eight Hour Labor Law?
As was aptly said in Floyd vs. Du Bois Soap Co., 1942, 317 U. S.
596, 63 Sup. Ct. 159; 6 CCH Labor Cases, Par. 51, 147, "A contract
of employment, which provides for a weekly wage for a specified
number of hours, sufficient to cover both the statutory minimum
wage and overtime compensation, if computed on the basis of the
statutory minimum wage, and which makes no provision for a fixed
hourly rate or that the weekly wage includes overtime compensation,
does not meet the requirements of the Act."
Moreover, we note that after the petition had instituted the strict
eight-hour shifts, no reduction was made in the salaries which its
watchmen received under the twelve hour arrangement. Indeed, as
admitted by the petitioner, "when the members or the respondent
union were placed on strict eight-hour shifts, the lowest salary of all
the members of the respondent union was P165 a month, or P5.50
daily, for both day and night shifts." Although it may be argued that
the salary for the night shift was somewhat lessened, the fact that
the rate for the day shift was increased in a sense tends to militate
against the contention that the salaries given during the twelve-hour
shifts included overtime compensation.
Petitioner's allegation that the association had acquiesced in the
twelve-hour shifts for more than 18 months, is not accurate, because
the watchmen involved in this case did not enter the service of the
petitioner, at one time, on September 1, 1945. As Judge Lanting
found, "only one of them entered the service of the company on said
date, very few during the rest of said month, some during the rest
of that year (1945) and in 1946, and very many in 1947, 1948 and
1949."
The case at bar is quite on all fours with the case of Detective &
Protective Bureau, Inc. vs. Court of Industrial Relations and United
Employees Welfare Association, supra, in which the facts were as
follows: "The record discloses that upon petition properly submitted,
said court made an investigation and found that the members of the
United Employees Welfare Association (hereafter called the
Association) were in the employ of the petitioner Detective and
Protective Bureau, Inc. (herein called the Bureau) which is engaged
in the business of furnishing security guards to commercial and
industrial establishments, paying to said members monthly salaries
out of what it received from the establishments benefited by guard
service. The employment called for daily tours of duty for more than
eight hours, in addition to work on Sundays and holidays.
Nonetheless the members performed their labors without receiving
extra compensation." The only difference is that, while in said case
the employees concerned were paid monthly salaries, in the case
now before us the wages were computed daily. In the case cited, we
held the following:
It appears that the Bureau had been granting the members of the
Association, every month, "two days off" days in which they
rendered no service, although they received salary for the whole
month. Said Bureau contended below that the pay corresponding to
said 2 day vacation corresponded to the wages for extra work. The
court rejected the contention, quite properly we believe, because in
the contract there was no agreement to that effect; and such
agreement, if any, would probably be contrary to the provisions of
the Eight-Hour Law (Act No. 444, sec. 6) and would be null and void
ab initio.
It is argued here, in opposition to the payment, that until the
commencement of this litigation the members of the Association
never claimed for overtime pay. That may be true. Nevertheless the
law gives them the right to extra compensation. And they could not
be held to have impliedly waived such extra compensation, for the
obvious reason that could not have expressly waived it.
The foregoing pronouncements are in point. The Association cannot
be said to have impliedly waived the right to overtime compensation,
for the obvious reason that they could not have expressly waived it."
The principle of estoppel and the laches cannot well be invoked
against the Association. In the first place, it would be contrary to the
spirit of the Eight Hour Labor Law, under which as already seen, the
laborers cannot waive their right to extra compensation. In the
second place, the law principally obligates the employer to observe
it, so much so that it punishes the employer for its violation and
leaves the employee or laborer free and blameless. In the third
place, the employee or laborer is in such a disadvantageous position
as to be naturally reluctant or even apprehensive in asserting any
claim which may cause the employer to devise a way for exercising
his right to terminate the employment.
If the principle of estoppel and laches is to be applied, it may bring
about a situation, whereby the employee or laborer, who cannot
expressly renounce their right to extra compensation under the
Eight-Hour Labor Law, may be compelled to accomplish the same
thing by mere silence or lapse of time, thereby frustrating the
purpose of law by indirection.
While counsel for the petitioner has cited authorities in support of
the doctrine invoked, there are also authorities pointed out in the
opinion of Judge Lanting to the contrary. Suffice it to say, in this
connection, that we are inclined to rule adversely against petitioner
for the reasons already stated.
The argument that the nullity or invalidity of the employment
contract precludes recovery by the Association of any overtime pay
is also untenable. The argument, based on the supposition that the
parties are in pari delicto, was in effect turned down in Gotamo
Lumber Co. vs. Court of Industrial Relations,* 47 Off. Gaz., 3421,
wherein we ruled: "The petitioner maintains that as the overtime
work had been performed without a permit from the Department of
Labor, no extra compensation should be authorized. Several
decisions of this court are involved. But those decisions were based
on the reasoning that as both the laborer and employer were duty
bound to secure the permit from the Department of Labor, both were
in pari delicto. However the present law in effect imposed that duty
upon the employer (C.A. No. 444). Such employer may not therefore
be heard to plead his own neglect as exemption or defense.
The employee in rendering extra service at the request of his
employer has a right to assume that the latter has complied with the
requirement of the law, and therefore has obtained the required
permission from the Department of Labor.
Moreover, the Eight-Hour Law, in providing that "any agreement or
contract between the employer and the laborer or employee contrary
to the provisions of this Act shall be null avoid ab initio,"
(Commonwealth Act No. 444, sec. 6), obviously intended said
provision for the benefit of the laborers or employees. The employer
cannot, therefore, invoke any violation of the act to exempt him from
liability for extra compensation. This conclusion is further supported
by the fact that the law makes only the employer criminally liable for
any violation. It cannot be pretended that, for the employer to
commit any violation of the Eight-Hour Labor Law, the participation
or acquiescence of the employee or laborer is indispensable, because
the latter in view of his need and desire to live, cannot be considered
as being on the same level with the employer when it comes to the
question of applying for and accepting an employment.
Petitioner also contends that Commonwealth Act No. 444 does not
provide for recovery of back overtime pay, and to support this
contention it makes referrence to the Fair Labor Standards Act of the
United States which provides that "any employer who violates the
provisions of section 206 and section 207 of this title shall be liable
to the employee or employees affected in the amount of their unpaid
minimum wages or their unpaid overtime compensation as the case
may be," — a provision not incorporated in Commonwealth Act No.
444, our Eight-Hour Labor Law. We cannot agree to the proposition,
because sections 3 and 5 of Commonwealth Act 444 expressly
provides for the payment of extra compensation in cases where
overtime services are required, with the result that the employees
or laborers are entitled to collect such extra compensation for past
overtime work. To hold otherwise would be to allow an employer to
violate the law by simply, as in this case, failing to provide for and
pay overtime compensation.
The point is stressed that the payment of the claim of the Association
for overtime pay covering a period of almost two years may lead to
the financial ruin of the petitioner, to the detriment of its employees
themselves. It is significant, however, that not all the petitioner's
watchmen would receive back overtime pay for the whole period
specified in the appealed decision, since the record shows that the
great majority of the watchmen were admitted in 1946 and 1947,
and even 1948 and 1949. At any rate, we are constrained to sustain
the claim of the Association as a matter of simple justice, consistent
with the spirit and purpose of the Eight-Hour Labor Law. The
petitioner, in the first place, was required to comply with the law and
should therefore be made liable for the consequences of its violation.
It is high time that all employers were warned that the public is
interested in the strict enforcement of the Eight-Hour Labor Law.
This was designed not only to safeguard the health and welfare of
the laborer or employee, but in a way to minimize unemployment by
forcing employers, in cases where more than 8-hour operation is
necessary, to utilize different shifts of laborers or employees working
only for eight hours each.
Wherefore, the appealed decision, in the form voted by Judge
Lanting, is affirmed, it being understood that the petitioner's
watchmen will be entitled to extra compensation only from the dates
they respectively entered the service of the petitioner, hereafter to
be duly determined by the Court of Industrial Relations. So ordered,
without costs.
Feria, Pablo, Bengzon, Padilla, Tuason, Bautista Angelo, and
Labrador, JJ., concur.
PHILIPPINE GRAPHIC ARTS INC., IGMIDIO R. SILVERIO AND
CARLOS CABAL, Petitioners, v. NATIONAL LABOR RELATIONS
COMMISSION, ROSALINA M. PULPULAAN AND EMELITA
SALONGA, Respondents.
George L. Howard, for Petitioners.
The Office of the Solicitor General for public Respondent.
Raul E. Espinosa for Private Respondents.
SYLLABUS
1. LABOR LAW; LABOR CODE; UNFAIR LABOR PRACTICE;
TEMPORARY REDUCTION OF WORK SCHEDULE WITH THE
ACQUIESCENCE OF EMPLOYEES AND PROMPTED BY ECONOMIC
CRISES DOES NOT CONSTITUTE UNFAIR LABOR PRACTICE. — The
Court is convinced from the records now before it, that there was no
unfair labor practice. As found by the NLRC, the private respondents
themselves never questioned the existence of an economic crisis
but, in fact, admitted its existence. There is basis for the petitioner’s
contentions that the reduction of work schedule was temporary, that
it was taken only after notice and consultations with the workers and
supervisors, that a consensus was reached on how to deal with
deteriorating economic conditions and reduced sales and that the
temporary reduction of working days was a more humane solution
instead of a retrenchment and reduction of personnel. The petitioner
further points out that this is in consonance with the collective
bargaining agreement between the employer and its employees.
2. ID.; ID.; ID.; COLLECTIVE BARGAINING AGREEMENT; DECISION
TO RESORT TO FORCED LEAVES, A MANAGEMENT PREROGATIVE;
WORKER’S CLAIM OF NON-RESORT TO GRIEVANCE MACHINERY,
NEGATED BY THEIR FAILURE TO INITIATE STEPS FOR ITS
EMPLOYMENT. — The decision to resort to forced leaves was, under
the circumstances, a management prerogative. The workers’ claim
of non-resort to the grievance machinery is negated by their failure
to initiate steps for its employment. (See: Art. 261, Labor Code.) As
the Solicitor General stressed: "in the case at bar, when petitioners
sent notice to complainants, no grievance between petitioners and
private respondents that need be threshed out before the grievance
machinery has yet materialized. But then, private respondents, who
received such notice and being aggrieved thereof, instituted a case
before the Labor Arbiter for unfair labor practices and discrimination,
prior to any referral to the grievance machinery, which they are
equally mandated to go through and under the circumstances they
were better situated to initiate; likewise, petitioners even prayed
before the Labor Arbiter that the complaint be dismissed and/or
referred to the grievance machinery. Thus, petitioner should not be
faulted if the grievance machinery was in any way bypassed."
DECISION
GUTIERREZ, JR., J.:
In October, 1984, the petitioner corporation was forced by economic
circumstances to require its workers to go on mandatory vacation
leave in batches of seven or nine for periods ranging from 15, 30, to
45 days. The workers were paid while on leave but the pay was
charged against their respective earned
leaves.chanrobles.com:cralaw:red
As a result, the private respondents filed complaints for unfair labor
practice and discrimination.
On April 9, 1986, the Labor Arbiter rendered a decision the
dispositive portion of which reads:chanrob1es virtual 1aw library
Wherefore, for lack of merit, the complaint for unfair labor practice
on grounds of discrimination, forced leave and reduction of working
days is hereby, DISMISSED. Respondent is hereby ordered to
restore and grant to all its employees the company policy regarding
groceries previously enjoyed by them." (p. 27, Rollo)
The private respondents filed a "partial appeal" with the National
Labor Relations Commission (NLRC) questioning the Labor Arbiter’s
dismissal of their complaint for unfair labor practice and the resultant
forced vacation leaves which were actually without pay.chanrobles
virtualawlibrary chanrobles.com:chanrobles.com.ph
On June 19, 1986, the NLRC affirmed the arbiter’s decision with
modification as follows:jgc:chanrobles.com.ph
"Be that as it may, since as intimated at the outset, the vacation
leave forced upon the complainants was visited with arbitrariness
not amounting to unfair labor practice, a refund of the amount
equivalent to the earned leave of each of the complainants treated
as their pay during their vacation is believed in order.
"WHEREFORE, modified as above indicated, the decision appealed
from is hereby AFFIRMED. (PARTIAL APPEAL TO THE NATIONAL
LABOR RELATIONS COMMISSION, P. 1)" (p. 60, Rollo).
The petitioners raise two issues in their petition, namely:chanrob1es
virtual 1aw library
A. PUBLIC RESPONDENT COMMITTED A GRAVE ABUSE OF
DISCRETION IN RENDERING A RESOLUTION ON AN ISSUE
INVOLVING A MONEY CLAIM, WHICH WAS NOT A SUBJECT OF AN
APPEAL NOR ASSIGNED AS AN ERROR.
B. PUBLIC RESPONDENT COMMITTED A GRAVE ABUSE OF
DISCRETION IN RENDERING A RESOLUTION IN FAVOR OF THE
UNION AND/OR 23 OTHER EMPLOYEES WHO ARE NOT REAL
PARTIES IN THE CASE, NOR IN THE PARTIAL APPEAL. (pp. 17 & 22,
Rollo)
After considering the petition and treating the comments of the
private respondents and the Solicitor General as Answers, the Court
resolved to give due course to the petition and decide it on the basic
merits.
The principal issue now before the Court is the forced vacation leave
without pay — whether or not it is unfair labor practice and if not an
unfair labor practice, whether or not it was tainted with arbitrariness.
The Court is convinced from the records now before it, that there
was no unfair labor practice. As found by the NLRC, the private
respondents themselves never questioned the existence of an
economic crisis but, in fact, admitted its existence. There is basis for
the petitioner’s contentions that the reduction of work schedule was
temporary, that it was taken only after notice and consultations with
the workers and supervisors, that a consensus was reached on how
to deal with deteriorating economic conditions and reduced sales and
that the temporary reduction of working days was a more humane
solution instead of a retrenchment and reduction of personnel. The
petitioner further points out that this is in consonance with the
collective bargaining agreement between the employer and its
employees.chanrobles.com:cralaw:red
The Court, therefore, agrees with the Solicitor General in his
submission that:jgc:chanrobles.com.ph
"There is also no showing that the imposition of forced leave was
exercised for the purpose of defeating or circumventing the rights of
employees under special laws or under valid agreements. As the
records show, petitioners instituted the forced leave due to economic
crisis, which private respondents do not even question. (Position
Paper [Private Respondents’], dated July 1985, p. 2).
"Likewise the forced leave was enforced neither in a malicious,
harsh, oppressive, vindictive nor wanton manner, or out of malice or
spite. Apart from private respondents’ concurrence that the forced
leave was implemented due to economic crisis, what only ‘hurts’
(ibid.) them ‘is that said management’s plan was not even discussed
in the grievance procedure so that the Union members thereof may
well be apprised of the reason therefor.’ (Ibid.)
"However, to rule that petitioners’ failure to bring the question of
necessity in the imposition of forced leave and the distribution of
work availability before the grievance machinery, as a prior requisite
for the implementation of the forced leave scheme, constitutes
arbitrariness is erroneous." (Rollo, pp. 63-64)
The decision to resort to forced leaves was, under the circumstances,
a management prerogative. The workers’ claim of non-resort to the
grievance machinery is negated by their failure to initiate steps for
its employment.
As stressed by the Solicitor General:jgc:chanrobles.com.ph
"The statutory law on grievance procedure provides
that:jgc:chanrobles.com.ph
"‘ART. 261. Grievance machinery. Whenever a grievance arises from
the interpretation or implementation of a collective agreement,
including disciplinary actions imposed on members of the bargaining
unit, the employer and the bargaining representative shall meet to
adjust the grievance. Where the grievance procedure as provided
herein does not apply, grievances shall be subject to negotiation,
conciliation or arbitration as provided elsewhere in this Code.’"
(Labor Code (Emphasis supplied)

"As the law stands, both employers and bargaining representative of

the employees are required to go through the grievance machinery
in case a grievance arises. And though the law does not provide who,
as between labor and capital, should initiate that said grievance be
brought first to the grievance machinery, it is only logical, just and
equitable that whoever is aggrieved should initiate settlement of the
grievance through the grievance machinery. To impose the
compulsory procedure on employers alone would be oppressive of
capital, notwithstanding the fact that in most cases the grievance is
of the employees.

"In the case at bar, when petitioners sent notice to complainants, no

grievance between petitioners and private respondents that need be
threshed out before the grievance machinery has yet materialized.
But then, private respondents, who received such notice and being
aggrieved thereof, instituted a case before the Labor Arbiter for
unfair labor practices and discrimination, prior to any referral to the
grievance machinery, which they are equally mandated to go
through and under the circumstances they were better situated to
initiate; likewise, petitioners even prayed before the Labor Arbiter
that the complaint be dismissed and/or referred to the grievance
machinery. (Position Paper (Petitioners’), dated 24 July 1985, p. 7)
Thus, petitioner should not be faulted if the grievance machinery was
in any way bypassed." (Rollo, pp. 64-66).

WHEREFORE, the petition is hereby GRANTED. The June 19, 1987

resolution of the National Labor Relations Commission is set aside
and the April 9, 1986 decision of the Labor Arbiter is
REINSTATED.chanrobles virtualawlibrary
chanrobles.com:chanrobles.com.ph

SO ORDERED.

Fernan (C.J.), Feliciano, Bidin and Cortes, JJ., concur.

LUZON STEVEDORING CO., INC., Petitioner, v. LUZON
MARINE DEPARTMENT UNION and THE HON. MODESTO
CASTILLO, THE HON. JOSE S. BAUTISTA, THE HON. V.
JIMENEZ YANSON and THE HON. JUAN L. LANTING, Judges of
the Court of Industrial Relations, Respondents.
Perkins, Ponce Enrile & Associates for Petitioner.
Mariano B. Tuason for respondent Judges of the Court of
Industrial Relations.
Sioson, Roldan & Vidanes for respondent union.
SYLLABUS
1. MINIMUM WAGE LAW; NON-WORKING HOURS, CONSTRUED;
PERIOD NOT COUNTED IF REQUISITES ARE COMPLIED WITH. — A
laborer need not leave the premises of the factory, shop or boat in
order that his period of rest shall not be counted, it being enough
that he "cease to work", may rest completely and leave or may leave
at his will the spot where he actually stays while working, to go
somewhere else, whether within or outside the premises of said
factory, shop or boat. If these requisites are complied with, the
period of such rest shall not be counted.
2. ID.; ACTION TO RECOVER COMPENSATION FOR PAST OVERTIME
WORK; ESTOPPEL AND LACHES, NOT DEFENSES. — The principles
of estoppel and laches cannot be invoked against employees or
laborers in an action for the recovery of compensation for past
overtime work. In the first place, it would be contrary to the spirit of
the Eight Hour Labor Law, under which the laborers cannot waive
their right to extra compensation. In the second place, the law
principally obligates the employer to observe it, so much so that it
punishes the employer for its violation and leaves the employee free
and blameless. In the third place, the employee or laborer is in such
a disadvantageous position as to be naturally reluctant or even
apprehensive in asserting a claim which may cause the employer to
devise a way for exercising his right to terminate the employment.
Moreover, an employee or laborer, who can not expressly renounce
the right to extra compensation under the Eight-Hour Labor Law,
may be compelled to accomplish the same thing by mere silence or
lapse of time, thereby frustrating the purpose of the law by
indirection. (Manila Terminal Co. v. Court of Industrial Relations Et.
Al., 91 Phil., 625, 48 Off. Gaz. 2725.) However, there may be cases
in which the silence of the employee or laborer who lets the time go
by for quite a long period without claiming or asserting his right to
overtime compensation may favor the inference that he may not
have worked any such overtime or that his extra work has been duly
compensated, but this is not so in the case at bar.
3. ID.; ID.; ID.; OVERTIME PAY IN ARREARS RETROACTS TO THE
DATE WHEN SERVICES WERE ACTUALLY RENDERED. — The
employee, in rendering extra services at the request of his employer,
has a right to assume that the latter has complied with the
requirements of the law and therefore has obtained the required
permission from the Department of Labor (Gotamco Lumber Co. v.
Ct. 8 Industrial Relations, 85 Phil., 242, 47 Off. Gaz., 3421). Fear of
possible unemployment sometimes is a very strong factor that gags
the workingman from demanding payment for such extra services
and it may take him months or years before he could be made to
present a claim against his employer. To allow the workingman to
be compensated only from the date of the filing of the petition with
the court would be to penalize him for his acquiescence of silence
which is beyond the intent of the law. It is not just and humane that
he should be deprived of what is lawfully his under the law, for the
true intendment of Commonwealth Act No. 444 is to compensate the
worker for services rendered beyond the statutory period and this
should be made to retroact to the date when such services were
actually performed.
4. COURT OF INDUSTRIAL RELATIONS; NATURE AND POWERS OF;
POWER TO MODIFY OR ALTER JUDGMENT SO AS TO CONFORM WITH
LAW AND EVIDENCE. — For procedural purposes, the Court of
Industrial Relations is a court with well-defined powers vested by the
law creating it with such other powers as generally pertain to a court
of justice (Sec. 20, Com. Act. No. 103). As such, the general rule
that before a judgment becomes final, the Court that rendered the
same may alter or modify it so as to conform with the law and the
evidence, is applicable to the Court of Industrial Relations (Connel
Bros. Co. (Phil.) v. National Labor Union, G. R. No. L-3631, prom.
January 30, 1956).
DECISION
FELIX, J.:
This case involves a petition for certiorari filed by the Luzon
Stevedoring Co., Inc., to review a resolution dated June 5, 1955,
issued by the Court of Industrial Relations. On September 5, 1955,
with leave of court, a supplemental petition was filed by said
petitioner, and both petitions were given due course by resolution of
this Court of September 15, 1955. The facts of the case may be
summarized as follows:chanrob1es virtual 1aw library
On June 21, 1948, herein respondent Luzon Marine Department
Union filed a petition with the Court of Industrial Relations containing
several demands against herein petitioner Luzon Stevedoring Co.,
Inc., among which were the petition for full recognition of the right
of COLLECTIVE bargaining, close shop and check off. However, on
July 18, 1948, while the case was still pending with the CIR, said
labor union declared a strike which was ruled down as illegal by this
Court in case G. R. No. L-2660, promulgated on May 30, 1950. In
view of said ruling, the Union filed a "Constancia" with the Court of
Industrial Relations praying that the remaining unresolved demands
of the Union presented in their original petition, be granted. Said
unresolved demands are the following:chanrob1es virtual 1aw
library
a. Point No. 2
"That the work performed in excess of eight (8) hours be paid an
overtime pay of 50 per cent the regular rate of pay, and that work
performed on Sundays and legal holidays be paid double the regular
rate of pay."
b. Point No. 7
"That all officers, engineers and crew members of motor tugboats
who have not received their pay corresponding to the second half of
December, 1941, be paid accordingly."
c. Point No. 11
"That Ciriaco Sarmiento, Chief Mate, M/V Marlin, Rafael Santos, Port
Engineer, and Lorenzo de la Cruz, Chief Engineer, M/V Shark, who
have been suspended without justifiable cause and for union
activities, be reinstated with pay from time of suspension."
d. Point No. 12
"That all officers, engineers and crew members of the motor
tugboats "Shark", "Herring", "Pike" and "Ray", who have been
discharged without justifiable cause and for union activities, be
reinstated with pay from time of discharge." (p. 65-66, Record).
On the basis of these demands, the case was set for hearing and the
parties submitted their respective evidence, both oral and
documentary, from June 8, 1951, to January 7, 1954. In one of the
hearings of the case, the original intervenor in L-2660, Union de
Obreros Estibadores de Filipinas (UOEF), through counsel, moved for
the withdrawal of said Union from the case, which motion was
granted by the Court.
After the parties had submitted exhaustive memoranda, the trial
Judge rendered a decision on February 10, 1955, finding that the
company gave said employees 3 free meals every day and about 20
minutes rest after each mealtime; that they worked from 6:00 a.m.
to 6:00 p.m. every day including Sundays and holidays, and for work
performed in excess of 8 hours, the officers, patrons and radio
operators were given overtime pay in the amount of P4 each and P2
each for the rest of the crew up to March, 1947, and after said date,
these payments were increased to P5 and P2.50, respectively, until
the time of their separation or the strike of July 19, 1948; that when
the tugboats underwent repairs, their personnel worked only 8 hours
a day excluding Sundays and holidays; that although there was an
effort on the part of claimants to show that some had worked beyond
6:00 p.m., the evidence was uncertain and indefinite and that
demand was, therefore, denied; that respondent Company, by the
nature of its business and as defined by law (Section 18-b of
Commonwealth Act No. 146, as amended) is considered a public
service operator by the Public Service Commission in its decision in
case No. 3035-C entitled "Philippine Shipowners Association v. Luzon
Stevedoring Co., Inc., Et. Al." (Exh. 23), and, therefore, exempt
from paying additional remuneration or compensation for work
performed on Sundays and legal holidays, pursuant to the provisions
of section 4 of Commonwealth Act No. 444 (Manila Electric Co. v.
Public Utilities Employees Association, 79 Phil., 408, 44 Off. Gaz.,
1760); and ruled that:jgc:chanrobles.com.ph
"For the above reasons, the aforementioned employees are only
entitled to receive overtime pay for work rendered in excess of 8
hours on ordinary days including Sundays and legal holidays.
"However, the respondent company has proved to the satisfaction of
the Court that it has paid its employees for such overtime work as
shown above Exhs. 1 to 20-B).
"It is, therefore, only a matter of computation whether such over
time pay by the respondent for overtime services rendered covers
the actual overtime work performed by the employees concerned
equivalent to 25 per cent which is the minimum rate fixed by law in
the absence of other proof to justify the granting of more beyond
said minimum rate."cralaw virtua1aw library
Demands Nos. 11 and 12 regarding the reinstatement to the service
of the employees named therein were denied and respondent
Company was only ordered to pay the separation pay and overtime
work rendered by Ciriaco Sarmiento, Rafael Santos and Lorenzo de
la Cruz, after making the pronouncement that their separation or
dismissal was not due to union activities but for valid and legal
grounds.
The Luzon Marine Department Union, through counsel, therefore,
filed a motion for reconsideration praying that the decision of
February 10, 1955, be modified so as to declare and rule that the
members of the Union who had rendered services from 6:00 a.m. to
6:00 p.m. were entitled to 4 hours’ overtime pay; that whatever little
time allotted to the taking of their meals should not be deducted
from the 4 hours of overtime rendered by said employees, that the
amounts of P3 and P2 set aside for the daily meals of the employees
be considered as part of their actual compensation in determining
the amount due to said employees for their unpaid overtime work;
that the employees separated from the service without just cause be
paid their unearned wages and salaries from the date of their
separation up to the time the decision in case L-2660 became final;
and for such other relief as may be just and equitable in the
premises.
Luzon Stevedoring Co., Inc. also sought for the reconsideration of
the decision only in so far as it interpreted that the period during
which a seaman is aboard a tugboat shall be considered as "working
time" for the purpose of the Eight-Hour-Labor Law.
In pursuance of Section 1 of Commonwealth Act No. 103, as
amended by Commonwealth Act No. 254 and further amended by
Commonwealth Act No. 559, the motions for reconsideration were
passed upon by the Court en banc, and on June 6, 1955, a resolution
modifying the decision of February 10, 1955, was issued, in the
sense that the 4 hours of overtime work included in the regular daily
schedule of work from 6:00 a.m. to 6:00 p.m. should be paid
independently of the so-called "coffee-money", after making a
finding that said extra amounts were given to crew members of some
tugboats for work performed beyond 6:00 p.m. over a period of
some 16 weeks. The Company’s motion for reconsideration was
denied.
From this resolution, the Luzon Stevedoring Co., Inc. filed the
present petition for certiorari and when the Court of Industrial
Relations, acting upon said Company’s motion for clarification, ruled
that the 20 minutes’ rest given the claimants after mealtime should
not be deducted from the 4 hours of overtime worked performed by
said claimants, petitioner filed a supplemental petition for certiorari
dated September 5, 1955, and both petitions were given due course
by this Court.
Respondent Luzon Marine Labor Union filed within the reglementary
period a motion to dismiss, which this Court considered as an answer
by resolution of October 14, 1955, alleging that the decision,
resolution and order of the Court of Industrial Relations sought to be
reviewed by petitioner do not present any question of law, the issues
in said CIR case No. 147-V being purely factual. The respondent
Judges of the Court of Industrial Relations, represented by counsel,
timely filed an answer likewise asserting that there could have been
no question of law involved or error of law committed by the said
Judges in the resolutions appealed from, same having been based
on purely findings of fact.
In this instance, petitioner does not seek to alter the lower court’s
finding that the regular daily schedule of work of the members of the
herein respondent Union was from 6:00 a.m. to 6:00 p.m. Petitioner,
however, submits several "issues" which We will proceed to discuss
one after the other. They are the following:chanrob1es virtual 1aw
library
I. Is the definition for "hours of work" as presently applied to dryland
laborers equally applicable to seamen? Or should a different criterion
be applied by virtue of the fact that the seamen’s employment is
completely different in nature as well as in condition of work from
that of a dryland laborer?

Petitioner questions the applicability to seamen of the interpretation
given to the phrase "hours of work" for the purpose of the Eight-
Hour Labor Law, insinuating that although the seamen concerned
stayed in petitioner’s tugboats, or merely within its compound, for
12 hours, yet their work was not continuous but interrupted or
broken. It has been the consistent stand of petitioner that while it is
true that the workers herein were required to report for work at 6:00
a.m. and were made to stay up to 6:00 p.m., their work was not
continuous and they could have left the premises of their working
place were it not for the inherent physical impossibility peculiar to
the nature of their duty which prevented them from leaving the
tugboats. It is the Company’s defense that a literal interpretation of
what constitutes non-working hours would result in absurdity if
made to apply to seamen aboard vessels in bays and rivers, and We
are called upon to make an interpretation of the law on "non-working
hours" that may comprehend within its embrace not only the non-
working hours of laborers employed in land jobs, but also of that
particular group of seamen, i.e., those employed in vessels plying in
rivers and bays, since admittedly there is no need for such ruling
with respect to officers and crew of interisland vessels which have
aboard 2 shifts of said men and strictly follow the 8-hour working
period.
Section 1 of Commonwealth Act No. 444, known as the Eight-Hour
Labor Law, provides:jgc:chanrobles.com.ph
"SEC. 1. The legal working day for any person employed by another
shall be of not more than eight hours daily. When the work is not
continuous, the time during which the laborer is not working AND
CAN LEAVE HIS WORKING PLACE and can rest completely, shall not
be counted."cralaw virtua1aw library
The requisites contained in this section are further implemented by
contemporary regulations issued by administrative authorities
(Sections 4 and 5 of Chapter III, Article 1, Code of Rules and
Regulations to Implement the Minimum Wage Law).
For the purposes of this ease, We do not need to set for seamen a
criterion different from that applied to laborers on land, for under
the provisions of the above quoted section, the only thing to be done
is to determine the meaning and scope of the term "working place"
used therein. As We understand this term, a laborer need not leave
the premises of the factory, shop or boat in order that his period of
rest shall not be counted, it being enough that he "cease to work",
may rest completely and leave or may leave at his will the spot
where he actually stays while working, to go somewhere else,
whether within or outside the premises of said factory, shop or boat.
If these requisites are complied with, the period of such rest shall
not be counted.
In the case at bar We do not need to look into the nature of the work
of claimant mariners to ascertain the truth of petitioner’s allegation
that this kind of seamen have had enough "free time", a task of
which We are relieved, for although after an ocular inspection of the
working premises of the seamen affected in this case the trial Judge
declared in his decision that the Company gave the complaining
laborers 3 free meals a day with a recess of 20 minutes after each
meal, this decision was specifically amended by the Court en banc in
its Resolution of June 6, 1955, wherein it held that the claimants
herein rendered services to the Company from 6:00 a.m. to 6:00
p.m. including Sundays and holidays, which implies either that said
laborers were not given any recess at all, or that they were not
allowed to leave the spot of their working place, or that they could
not rest completely. And such resolution being on a question
essentially of fact, this Court is now precluded to review the same
(Com. Act No. 103, Sec. 15, as amended by Sec. 2 of Com. Act No.
559; Rule 44 of the Rules of Court; Kaisahan Ng Mga Manggagawa
sa Kahoy sa Filipinas v. Gotamco Sawmill, 80 Phil., 521; Operators,
Inc. v. Pelagio, 99 Phil., 893, and others).
II. Should a person be penalized for following an opinion issued by
the Secretary of Justice in the absence of any judicial
pronouncement whatsoever?
Petitioner cites Opinion No. 247, Series of 1941 of the Secretary of
Justice to a query made by the Secretary of Labor in connection with
a similar subject matter as the one involved in this issue, but that
opinion has no bearing on the case at bar because it refers to officers
and crew on board interisland boats whose situation is different from
that of mariners or sailors working in small tugboats that ply along
bays and rivers and have no cabins or resting places for persons that
man the same. Moreover, We cannot pass upon this second issue
because, aside from the fact that there appears nothing on record
that would support petitioner’s assertion that in its dealing with its
employees, it was guided by an opinion of the Secretary of Justice,
the issue involves a mere theoretical question.
III. When employees with full knowledge of the law, voluntarily
agreed to work for so many hours in consideration of a certain
definite wage, and continue working without any protest for a period
of almost two years, is said compensation as agreed upon legally
deemed and retroactively presumed to constitute full payment for all
services rendered, including whatever overtime wages might be
due? Especially so if such wages, though received years before the
enactment of the Minimum Wage Law, were already set mostly
above said minimum wage?
IV. The members of respondent Union having expressly manifested
acquiescence over a period of almost two years with reference to the
sufficiency of their wages and having made no protest whatsoever
with reference to said compensation, does the legal and equitable
principle of estoppel operate to bar them from making a claim for,
or making any recovery of, back overtime compensation?
We are going to discuss these two issues jointly. Section 6 of
Commonwealth Act No. 444 provides:jgc:chanrobles.com.ph
"SEC. 6. Any agreement or contract between the employer and the
laborer or employee contrary to the provisions of this Act shall be
null and void ab initio."cralaw virtua1aw library
In the case of the Manila Terminal Co. v. Court of Industrial Relations
Et. Al., 91 Phil., 625, 48 Off. Gaz., 2725, this Court
held:jgc:chanrobles.com.ph
"The principles of estoppel and laches cannot be invoked against
employees or laborers in an action for the recovery of compensation
for past overtime work. In the first place, it would be contrary to the
spirit of the Eight-Hour Labor Law, under which, as already seen, the
laborers cannot waive their right to extra compensation. In the
second place, the law principally obligates the employer to observe
it, so much so that it punishes the employer for its violation and
leaves the employee free and blameless. In the third place, the
employee or laborer is in such a disadvantageous position as to be
naturally reluctant or even apprehensive in asserting a claim which
may cause the employer to devise a way for exercising his right to
terminate the employment.
Moreover, if the principle of estoppel and laches is to be applied, it
would bring about a situation whereby the employee or laborer who
can not expressly renounce the right to extra compensation under
the Eight-Hour Labor Law, may be compelled to accomplish the same
thing by mere silence or lapse of time. thereby frustrating the
purpose of the law by indirection."cralaw virtua1aw library
This is the law on the matter and We certainly adhere to it in the
present case. We deem it, however, convenient to say a few words
of explanation so that the principle enunciated herein may not lead
to any misconstruction of the law in future cases. There is no
question that the right of the laborers to overtime pay cannot be
waived. But there may be cases in which the silence of the employee
or laborer who lets the time go by for quite a long period without
claiming or asserting his right to overtime compensation may favor
the inference that he has not worked any such overtime or that his
extra work has been duly compensated. But this is not so in the case
at bar. The complaining laborers have declared that long before the
filing of this case, they had informed Mr. Martinez, a sort of overseer
of the petitioner, that they had been working overtime and claiming
the corresponding compensation therefor, and there is nothing on
record to show that the claimants, at least the majority of them, had
received wages in excess of the minimum wage later provided by
Republic Act No. 602, approved April 6, 1951. On the contrary, in
the decision of the trial Judge, it appears that 34 out of the 58
claimants received salaries less than the minimum wage authorized
by said Minimum Wage Law, to wit:chanrob1es virtual 1aw library
Consequently, for lack of the necessary supporting evidence for the
petitioner, the inference referred to above cannot be drawn in this
case.
V. Granting, without conceding, that any overtime pay in arrears is
due, what is the extent and rule of retroactivity with reference to
overtime pay in arrears as set forth and established by the
precedents and policies of the Court of Industrial Relations in past
decisions duly affirmed by the Honorable Supreme Court?
VI. Is the grant of a sizeable amount as back overtime wages by the
Court of Industrial Relations in consonance with the dictates of public
policy and the avowed national and government policy on economic
recovery and financial stability?
In connection with issue No. 5, petitioner advances the theory that
the computation of the overtime payment in arrears should be based
from the filing of the petition. In support of this contention, petitioner
cites the case of Gotamco Lumber Co. v. Court of Industrial
Relations, 85 Phil., 242; 47 Off. Gaz., 3421. This case is not in point;
it merely declares that Commonwealth Act No. 444 imposes upon
the employer the duty to secure the, permit for overtime work, and
the latter may not therefore be heard to plead his own negligence as
exemption or defense. The employee in rendering extra services at
the request of his employer has a right to assume that the latter has
complied with the requirements of the law and therefore has
obtained the required permission from the Department of Labor (47
Off. Gaz., 3421). The other decisions of the Court of Industrial
Relations cited by petitioner, to wit: Cases 6-V, 7-V and 8-V,
Gotamco & Co., Dy Pac & Co., Inc. and D. C. Chuan; Case 110-V,
National Labor Union v. Standard Vacuum Oil Co.; Case No. 76-V,
Dee Cho Workers, CLO v. Dee Cho Lumber Co., and Case No. 70-V,
National Labor Union v. Benguet Consolidated Mining Co., do not
seem to have reached this Court and to have been affirmed by Us.
It is of common occurrence that a workingman has already rendered
services in excess of the statutory period of 8 hours for some time
before he can be led or he can muster enough courage to confront
his employer with a demand for payment thereof. Fear of possible
unemployment sometimes is a very strong factor that gags the
workingman from asserting his right under the law and it may take
him months or years before he could be made to present a claim
against his employer. To allow the workingman to be compensated
only from the date of the filing of the petition with the court would
be to penalize him for his acquiescence or silence which We have
declared in the case of the Manila Terminal Co. v. CIR, supra, to be
beyond the intent of the law. It is not just and humane that he should
be deprived of what is lawfully his under the law, for the true
intendent of Commonwealth Act No. 444 is to compensate the
worker for services rendered beyond the statutory period and this
should be made to retroact to the date when such services were
actually performed.
Anent issue No. VI, petitioner questions the reasonableness of the
law providing for the grant of overtime wages. It is sufficient for Us
to state here that courts cannot go outside of the field of
interpretation so as to inquire into the motive or motives of Congress
in enacting a particular piece of legislation. This question, certainly,
is not within Our province to entertain.
It may be alleged, however, that the delay in asserting the right to
back overtime compensation may cause an unreasonable or
irreparable injury to the employer, because the accumulation of such
back overtime wages may become so great that their payment might
cause the bankruptcy or the closing of the business of the employer
who might not be in a position to defray the same. Perhaps this
situation may occur, but We shall not delve on it this time because
petitioner does not claim that the payment of the back overtime
wages it is ordered to pay to its claimant laborers will cause the
injury it foresees or force it to close its business, a situation which it
speaks of theoretically and in general.
VII. Should not a Court of Industrial Relations’ resolution, en banc,
which is clearly unsupported in fact and in law, patently arbitrary
and capricious and absolutely devoid of sustaining reason, be
declared illegal? Especially so, if the trial court’s decision which the
resolution en banc reversed, is most detailed, exhaustive and
comprehensive in its findings as well as most reasonable and legal
in its conclusions?
This issue was raised by petitioner in its supplemental petition and
We have this much to say. The Court of Industrial Relations has been
considered "a court of justice" (Metropolitan Transportation Service
v. Paredes, * G. R. No. L-1232, prom. January 12, 1948), although
in another case. We said that it is "more an administrative board
than a part of the integrated judicial system of the nation" (Ang
Tibay v. Court of Industrial Relations, 69 Phil., 635). But for
procedural purposes, the Court of Industrial Relations is a court with
well-defined powers vested by the law creating it and with such other
powers as generally pertain to a court of justice (Sec. 20, Com. Act
No. 103). As such, the general rule that before judgment becomes
final, the Court that rendered the same may alter or modify it so as
to conform with the with the law and the evidence, is applicable to
the Court of Industrial Relations (Connel Bros. Co. (Phil.) v. National
Labor Union, G. R. No. L-3631 prom. January 30, 1956). The law
also provides that after a judge of the Court of Industrial Relations,
duly designated by the Presiding Judge therein to hear a particular
case, had rendered a decision, any agrieved party may request for
reconsideration thereof and the judges of said Court shall sit
together, the concurrence of the 3 of them being necessary for the
pronouncement of a decision, order or award (Sec. 1, Com. Act No.
103). It was in virtue of these rules and upon motions for
reconsideration presented by both parties that resolution subject of
the present petition was issued, the Court en banc finding it
necessary to modify a part of the decision of February 10, 1955,
which is clearly within its power to do.
On the other hand, the issue under consideration is predicated on a
situation which is not obtaining in the case at bar, for it presupposes
that the resolutions en banc of the respondent Court "are clearly
unsupported in fact and in law, patently arbitrary and capricious and
absolutely devoid of any sustaining reason", which does not seem to
be the case as a matter of fact.

Wherefore, and on the strength of the foregoing consideration, the

resolutions of the Court of Industrial Relations appealed from are
hereby affirmed, with costs against petitioner. It is so ordered.

Bengzon, Padilla, Reyes, A., Bautista Angelo, Labrador, Concepcion,

Reyes, J.B.L. and Endencia, JJ., concur.
J. P. HEILBRONN CO., Petitioner, v. NATIONAL LABOR UNION,
Respondent.
Ross, Selph, Carrascoso & Janda for Petitioner.
Eulogio R. Lerum for Respondent.
SYLLABUS
1. EMPLOYER AND LABORERS; PAY DURING THE PERIOD OF
STRIKE; WHO SHOULD BEAR IT. — The age age-old rule governing
the relation between labor and capital or management and employee
is that of a "fair day’s wage for a fair day’s labor." If there is no work
performed by the employee there can be no wage or pay, unless of
course the laborer was able, willing and ready to work but was
illegally locked out, dismissed or suspended. It is hardly fair or just
for an employee or laborer to fight or litigate against his employer
on the employer’s time.
2. ID.; ID.; ID. — In a case where a laborer absents himself from
work because of a strike or to attend a conference or hearing in a
case or incident between him and his employer, he might seek
reimbursement of his wages from his union which had declared the
strike or filed the case in the industrial court. Or he might have his
absence from his work charged against his vacation leave.
DECISION
MONTEMAYOR, J.:
On July 12, 1948, the Secretary of Labor certified to the Court of
Industrial Relations (CIR) a dispute between the National Labor
Union, a labor organization organized under the provisions of
Commonwealth Act 213 and the J. P. Heilbronn Co., hereinafter to
be called the Company, a domestic corporation domiciled in the City
of Manila. The case was docketed as "National Labor Union,
Petitioner, v. J. P. Heilbronn Co., respondent, case No. 160-V." In
connection with the hearing of that case, particularly incidental
motions and petitions concerning questions that arose between the
management and its employees who were members of J. P.
Heilbronn Employees Association affiliated with the National Labor
Union, Armando Ocampo and Protacio Ty, President and Secretary,
respectively, of the local union attended the conferences and
hearings before the CIR, in some cases assisting the lawyer who
represented them. Subsequently, a motion was filed in the case by
the Labor Union in behalf of Armando Ocampo and Protacio Ty
praying the court to order the Company to pay to these men the
amounts of P88 and P64.65 respectively, corresponding to the
deductions in their salaries made by the Company on the days or
hours of their absence from their work while attending the
conferences and hearings already mentioned. Despite opposition of
the company to the said motion, the same was granted by the CIR
through Associate Judge V. Jimenez Yanson. After petition for
reconsideration of said order was denied by the Court of Industrial
Relations in banc, the company has brought the case to us seeking
to reverse the said order.
The action taken by the CIR is hardly consistent with its previous
rulings regarding payment of wages or salaries to laborers or
employees who had voluntarily absented themselves from work. In
the case of San Miguel Brewery, Inc. v. National Labor Union, Et Al.,
case No. 271-V, in passing upon a demand of laborers for their
wages corresponding to the days that they were on strike, said CIR
held:jgc:chanrobles.com.ph
"As to the demand for the payment of the wages that the strikers
lost on the occasion of their strike on November 22, 1948, the Court
understands that a strike is a voluntary and deliberate cessation of
work on the part of the workers. Upon this consideration and based
on the equitable tenet of a fair day’s wage for a fair day’s labor, this
demand falls of its own weight and must be, as it is hereby,
denied."cralaw virtua1aw library
Again, in the case of Federacion Obrera de Filipinas (FOF) v.
Philippine Rubber Projects Co., Inc., case No. 346-V, ruling upon a
similar demand the CIR said:jgc:chanrobles.com.ph
"The strike was, therefore, justified under the circumstances, but for
reasons that wages and salaries represent the compensation of the
labor performed by the laborers or employees and, not having
performed any work during the strike, they should not be paid any
wage or salary therefor. For this reason this demand is hereby
denied."cralaw virtua1aw library
When in case of strikes, and according to the CIR even if the strike
is legal, strikers may not collect their wages during the days they did
not go to work, for the same reasons if not more, laborers who
voluntarily absent themselves from work to attend the hearing of a
case in which they seek to prove and establish their demands against
the company, the legality and propriety of which demands is not yet
known, should lose their pay during the period of such absence from
work. The age-old rule governing the relation between labor and
capital or management and employee is that of a "fair day’s wage
for a fair day’s labor." If there is no work performed by the employee
there can be no wage or pay, unless of course, the laborer was able,
willing and ready to work but was illegally locked out, dismissed or
suspended. It is hardly fair or just for an employee or laborer to fight
or litigate against his employer on the employer’s time.

In a case where a laborer absents himself from work because of a

strike or to attend a conference or hearing in a case or incident
between him and his employer, he might seek reimbursement of his
wages from his union which had declared the strike or filed the case
in the industrial court. Or, in the present case, he might have his
absence from his work charged against his vacation leave. Three of
the Justices who sign the present decision believe that the
deductions made from the wages of Armando Ocampo and Protacio
Ty might possibly be charged as damages in the case in the event
that the said case in the CIR prosecuted in behalf of their union is
finally decided in their favor and against the company.

In view of the foregoing, the order appealed from ordering the

reimbursement of the salaries or wages of Armando Ocampo and
Protacio Ty corresponding to the days or portions of days they were
absent from work is hereby set aside, with costs.

Paras, C.J., Feria, Pablo, Bengzon, Padilla, Tuason, Reyes, Jugo,

Bautista Angelo and Labrador, JJ., concur.
TEOFILO ARICA, DANILO BERNABE, MELQUIADES DOHINO,
ABONDIO OMERTA, GIL TANGIHAN, SAMUEL LABAJO,
NESTOR NORBE, RODOLFO CONCEPCION, RICARDO RICHA,
RODOLFO NENO, ALBERTO BALATRO, BENJAMIN JUMAMOY,
FERMIN DAAROL, JOVENAL ENRIQUEZ, OSCAR BASAL,
RAMON ACENA, JAIME BUGTAY, and 561 OTHERS, HEREIN
REPRESENTED BY KORONADO B. APUZEN, petitioners
vs.
NATIONAL LABOR RELATIONS COMMISSION, HONORABLE
FRANKLIN DRILON, HONORABLE CONRADO B. MAGLAYA,
HONORABLE ROSARIO B. ENCARNACION, and STANDARD
(PHILIPPINES) FRUIT CORPORATION, respondents.
Koronado B. Apuzen and Jose C. Espinas for petitioners.
The Solicitor General for public respondent.
Dominguez & Paderna Law Offices Co. for private respondent.
PARAS, J.:
This is a petition for review on certiorari of the decision of the
National Labor Relations Commission dated December 12, 1986 in
NLRC Case No. 2327 MC-XI-84 entitled Teofilo Arica et al. vs.
Standard (Phil.) Fruits Corporation (STANFILCO) which affirmed the
decision of Labor Arbiter Pedro C. Ramos, NLRC, Special Task Force,
Regional Arbitration Branch No. XI, Davao City dismissing the claim
of petitioners.
This case stemmed from a complaint filed on April 9, 1984 against
private respondent Stanfilco for assembly time, moral damages and
attorney's fees, with the aforementioned Regional Arbitration Branch
No. XI, Davao City.
After the submission by the parties of their respective position
papers (Annex "C", pp. 30-40; Annex "D", Rollo, pp. 41-50), Labor
Arbiter Pedro C. Ramos rendered a decision dated October 9, 1985
(Annex 'E', Rollo, pp. 51-58) in favor of private respondent
STANFILCO, holding that:
Given these facts and circumstances, we cannot but agree with
respondent that the pronouncement in that earlier case, i.e. the
thirty-minute assembly time long practiced cannot be considered
waiting time or work time and, therefore, not compensable, has
become the law of the case which can no longer be disturbed without
doing violence to the time- honored principle of res-judicata.
WHEREFORE, in view of the foregoing considerations, the instant
complaint should therefore be, as it is hereby, DISMISSED.
SO ORDERED. (Rollo, p. 58)
On December 12, 1986, after considering the appeal memorandum
of complainant and the opposition of respondents, the First Division
of public respondent NLRC composed of Acting Presiding
Commissioner Franklin Drilon, Commissioner Conrado Maglaya,
Commissioner Rosario D. Encarnacion as Members, promulgated its
Resolution, upholding the Labor Arbiters' decision. The Resolution's
dispositive portion reads:
'Surely, the customary functions referred to in the above- quoted
provision of the agreement includes the long-standing practice and
institutionalized non-compensable assembly time. This, in effect,
estopped complainants from pursuing this case.
The Commission cannot ignore these hard facts, and we are
constrained to uphold the dismissal and closure of the case.
WHEREFORE, let the appeal be, as it is hereby dismissed, for lack of
merit.
SO ORDERED. (Annex "H", Rollo, pp. 86-89).
On January 15, 1987, petitioners filed a Motion for Reconsideration
which was opposed by private respondent (Annex "I", Rollo, pp. 90-
91; Annex J Rollo, pp. 92-96).
Public respondent NLRC, on January 30, 1987, issued a resolution
denying for lack of merit petitioners' motion for reconsideration
(Annex "K", Rollo, p. 97).
Hence this petition for review on certiorari filed on May 7, 1987.
The Court in the resolution of May 4, 1988 gave due course to this
petition.
Petitioners assign the following issues:
1) Whether or not the 30-minute activity of the petitioners before
the scheduled working time is compensable under the Labor Code.
2) Whether or not res judicata applies when the facts obtaining in
the prior case and in the case at bar are significantly different from
each other in that there is merit in the case at bar.
3) Whether or not there is finality in the decision of Secretary Ople
in view of the compromise agreement novating it and the withdrawal
of the appeal.
4) Whether or not estoppel and laches lie in decisions for the
enforcement of labor standards (Rollo, p. 10).
Petitioners contend that the preliminary activities as workers of
respondents STANFILCO in the assembly area is compensable as
working time (from 5:30 to 6:00 o'clock in the morning) since these
preliminary activities are necessarily and primarily for private
respondent's benefit.
These preliminary activities of the workers are as follows:
(a) First there is the roll call. This is followed by getting their
individual work assignments from the foreman.
(b) Thereafter, they are individually required to accomplish the
Laborer's Daily Accomplishment Report during which they are often
made to explain about their reported accomplishment the following
day.
(c) Then they go to the stockroom to get the working materials, tools
and equipment.
(d) Lastly, they travel to the field bringing with them their tools,
equipment and materials.
All these activities take 30 minutes to accomplish (Rollo, Petition, p.
11).
Contrary to this contention, respondent avers that the instant
complaint is not new, the very same claim having been brought
against herein respondent by the same group of rank and file
employees in the case of Associated Labor Union and Standard Fruit
Corporation, NLRC Case No. 26-LS-XI-76 which was filed way back
April 27, 1976 when ALU was the bargaining agent of respondent's
rank and file workers. The said case involved a claim for "waiting
time", as the complainants purportedly were required to assemble
at a designated area at least 30 minutes prior to the start of their
scheduled working hours "to ascertain the work force available for
the day by means of a roll call, for the purpose of assignment or
reassignment of employees to such areas in the plantation where
they are most needed." (Rollo, pp. 64- 65)
Noteworthy is the decision of the Minister of Labor, on May 12, 1978
in the aforecited case (Associated Labor Union vs. Standard (Phil.)
Fruit Corporation, NLRC Case No. 26-LS-XI-76 where significant
findings of facts and conclusions had already been made on the
matter.
The Minister of Labor held:
The thirty (30)-minute assembly time long practiced and
institutionalized by mutual consent of the parties under Article IV,
Section 3, of the Collective Bargaining Agreement cannot be
considered as waiting time within the purview of Section 5, Rule I,
Book III of the Rules and Regulations Implementing the Labor Code.
...
Furthermore, the thirty (30)-minute assembly is a deeply- rooted,
routinary practice of the employees, and the proceedings attendant
thereto are not infected with complexities as to deprive the workers
the time to attend to other personal pursuits. They are not new
employees as to require the company to deliver long briefings
regarding their respective work assignments. Their houses are
situated right on the area where the farm are located, such that after
the roll call, which does not necessarily require the personal
presence, they can go back to their houses to attend to some chores.
In short, they are not subject to the absolute control of the company
during this period, otherwise, their failure to report in the assembly
time would justify the company to impose disciplinary measures. The
CBA does not contain any provision to this effect; the record is also
bare of any proof on this point. This, therefore, demonstrates the
indubitable fact that the thirty (30)-minute assembly time was not
primarily intended for the interests of the employer, but ultimately
for the employees to indicate their availability or non-availability for
work during every working day. (Annex "E", Rollo, p. 57).
Accordingly, the issues are reduced to the sole question as to
whether public respondent National Labor Relations Commission
committed a grave abuse of discretion in its resolution of December
17, 1986.
The facts on which this decision was predicated continue to be the
facts of the case in this questioned resolution of the National Labor
Relations Commission.
It is clear that herein petitioners are merely reiterating the very
same claim which they filed through the ALU and which records show
had already long been considered terminated and closed by this
Court in G.R. No. L-48510. Therefore, the NLRC can not be faulted
for ruling that petitioners' claim is already barred by res-judicata.
Be that as it may, petitioners' claim that there was a change in the
factual scenario which are "substantial changes in the facts" makes
respondent firm now liable for the same claim they earlier filed
against respondent which was dismissed. It is thus axiomatic that
the non-compensability of the claim having been earlier established,
constitute the controlling legal rule or decision between the parties
and remains to be the law of the case making this petition without
merit.
As aptly observed by the Solicitor General that this petition is "clearly
violative of the familiar principle of res judicata. There will be no end
to this controversy if the light of the Minister of Labor's decision
dated May 12, 1979 that had long acquired the character of finality
and which already resolved that petitioners' thirty (30)-minute
assembly time is not compensable, the same issue can be re-
litigated again." (Rollo, p. 183)
This Court has held:
In this connection account should be taken of the cognate principle
that res judicata operates to bar not only the relitigation in a
subsequent action of the issues squarely raised, passed upon and
adjudicated in the first suit, but also the ventilation in said
subsequent suit of any other issue which could have been raised in
the first but was not. The law provides that 'the judgment or order
is, with respect to the matter directly adjudged or as to any other
matter that could have been raised in relation thereto, conclusive
between the parties and their successors in interest by title
subsequent to the commencement of the action .. litigating for the
same thing and in the same capacity.' So, even if new causes of
action are asserted in the second action (e.g. fraud, deceit, undue
machinations in connection with their execution of the convenio de
transaccion), this would not preclude the operation of the doctrine
of res judicata. Those issues are also barred, even if not passed upon
in the first. They could have been, but were not, there raised. (Vda.
de Buncio v. Estate of the late Anita de Leon, 156 SCRA 352 [1987]).
Moreover, as a rule, the findings of facts of quasi-judicial agencies
which have acquired expertise because their jurisdiction is confined
to specific matters are accorded not only respect but at times even
finality if such findings are supported by substantial evidence
(Special Events & Central Shipping Office Workers Union v. San
Miguel Corporation, 122 SCRA 557 [1983]; Dangan v. NLRC, 127
SCRA 706 [1984]; Phil. Labor Alliance Council v. Bureau of Labor
Relations, 75 SCRA 162 [1977]; Mamerto v. Inciong, 118 SCRA 265
(1982]; National Federation of Labor Union (NAFLU) v. Ople, 143
SCRA 124 [1986]; Edi-Staff Builders International, Inc. v. Leogardo,
Jr., 152 SCRA 453 [1987]; Asiaworld Publishing House, Inc. v. Ople,
152 SCRA 219 [1987]).
The records show that the Labor Arbiters' decision dated October 9,
1985 (Annex "E", Petition) pointed out in detail the basis of his
findings and conclusions, and no cogent reason can be found to
disturb these findings nor of those of the National Labor Relations
Commission which affirmed the same.
PREMISES CONSIDERED, the petition is DISMISSED for lack of merit
and the decision of the National Labor Relations Commission is
AFFIRMED.
SO ORDERED.