G.R. No.
195466 July 2, 2014 as a butcher or chopper on "pakyaw" or task basis
ARIEL L. DAVID, doing business under the
name and style "YIELS HOG DEALER,"
Petitioner,
vs. JOHN G. MACASIO, Respondent.
SUMMARY:
LA = Dismissed monetary claims of Macasio
(respondent in this case)
NLRC = affirmed LA decision
CA = annulled NLRC’s decision
SC = partially granted petition of petitioner as to the
non-payment of 13th month pay only
Antecedent Facts:
In January 2009, Macasio filed before the LA a
complaint against petitioner Ariel L. David, doing
business under the name and style "Yiels Hog
Dealer," for:
1. non-payment of overtime pay,
2. holiday pay
3. 13th month pay
4. payment for moral and exemplary
damages
5. attorney’s fees
6. service incentive leave (SIL).
Macasio alleged before the LA that he had been
working as a butcher for David since January 6,
1995. Macasio claimed that David exercised
effective control and supervision over his work,
pointing out that David: (1) set the work day,
reporting time and hogs to be chopped, as well as
the manner by which he was to perform his work;
(2) daily paid his salary of ₱700.00, which was
increased from ₱600.00 in 2007, ₱500.00 in 2006
and ₱400.00 in 2005; and (3) approved and
disapproved his leaves. Macasio added that David
owned the hogs delivered for chopping, as well as
the work tools and implements; the latter also
rented the workplace. Macasio further claimed that
David employs about twenty-five (25) butchers and
delivery drivers.
In his defense,10 David claimed that he started his
hog dealer business in 2005 and that he only has
ten employees. He alleged that he hired Macasio
who is, therefore, not entitled to overtime pay,
holiday pay and 13th month.
LA’s Ruling:
LA dismissed Macasio’s complaint for lack of merit.
The LA gave credence to David’s claim that he
engaged Macasio on "pakyaw" or task basis. T
NLRC’s Ruling:
The NLRC observed that David did not require
Macasio to observe an eight hour work schedule to
earn the fixed ₱700.00 wage; and that Macasio
had been performing a non-time work, pointing out
that Macasio was paid a fixed amount for the
completion of the assigned task, irrespective of the
time consumed in its performance. Since Macasio
was paid by result and not in terms of the time that
he spent in the workplace, Macasio is not covered
by the Labor Standards laws on overtime, SIL and
holiday pay, and 13th month pay under the Rules
and Regulations Implementing the 13th month pay
law.
CA Ruling:
While the CA agreed with the LA and the NLRC
that Macasio was a task basis employee, it
nevertheless found Macasio entitled to his
monetary claims following the doctrine laid down in
Serrano v. Severino Santos Transit.
As defined by the Labor Code, a "field personnel"
is one who performs the work away from the office
or place of work and whose regular work hours
cannot be determined with reasonable certainty. In
Macasio’s case, the elements that characterize a
"field personnel" are evidently lacking as he had
been working as a butcher at David’s "Yiels Hog
Dealer" business in Sta. Mesa, Manila under
David’s supervision and control, and for a fixed
working schedule that starts at 10:00 p.m.
Accordingly, the CA awarded Macasio’s claim for
holiday, SIL and 13th month pay for three years,
with 10% attorney’s fees on the total monetary
award. The CA, however, denied Macasio’s claim
for moral and exemplary damages for lack of basis.
Hence, this petition.
ISSUE: What is the proper application and
interpretation of the labor law provisions on holiday,
SIL and 13th month pay to a worker engaged on
"pakyaw" or task basis.
RULING:
Petition partially granted.
Engagement on "pakyaw" or task basis does not
characterize the relationship (ER-EE) that may
exist between the parties, i.e., whether one of
employment or independent contractorship.
Employing the control test,38 we find that such a
(ER-EE) relationship exist in the present case.
To determine the existence of an employer-
employee relationship, four elements generally
need to be considered, namely: (1) the selection
and engagement of the employee; (2) the payment
of wages; (3) the power of dismissal; and (4) the
power to control the employee’s conduct. These
elements or indicators comprise the so-called "four-
fold" test of employment relationship. Macasio’s
relationship with David satisfies this test.
In sum, the existence of employment relationship
between the parties is determined by applying the
"four-fold" test; engagement on "pakyaw" or task
basis does not determine the parties’ relationship
as it is simply a method of pay computation.
Accordingly, Macasio is David’s employee, albeit
engaged on "pakyaw" or task basis.
The payment of an employee on task or pakyaw
basis alone is insufficient to exclude one from the
coverage of SIL and holiday pay. They are
exempted from the coverage of Title I (including the
holiday and SIL pay) only if they qualify as "field
personnel."
With respect to the phrase "those who are engaged
on task or contract basis, purely commission
basis." Said phrase should be related with "field
personnel," applying the rule on ejusdem generis
that general and unlimited terms are restrained and
limited by the particular terms that they follow.
WEEK 3 LABOR LAW REVIEW WEEKDAY CLASS 2019 | 1
As with 13th month pay benefits generally
cover all employees; an employee must be one of
those expressly enumerated to be exempted.
Section 3 of the Rules and Regulations
Implementing P.D. No. 85154 enumerates the
exemptions from the coverage of 13th month pay
benefits. Under Section 3(e), "employers of those
who are paid on xxx task basis, and those who are
paid a fixed amount for performing a specific work,
irrespective of the time consumed in the
performance thereof"55 are exempted.
III. A. CHARLITO PENARANDA V BANGANGA
PLYWOOD CORPORATION AND CHUA
Facts:
Charlito Penaranda was hired as an employee of
Baganga Corporation with a monthly salary of
P5,000 as Foreman/Boiler Head/ Shift Engineer to
take charge of the operations and maintenance of
its steam plant boiler.
He alleges that he was illegally terminated and that
his termination was without due process and valid
grounds. Furthermore, he was not paid his OT pay,
premium pay for working during holidays, and night
shift differentials. So he filed an action for illegal
dismissal.
Hudson Chua, the General Manager of Baganga
alleges that Penaranda’s separation was done
pursuant to Art. 238 of the Labor Code. The
company was on temporary closure due to repair
and general maintenance and it applied for
clearance with the DOLE to shut down and dismiss
employees. He claims that due to the insistence of
complainant, he was paid his separation benefits.
But when the company partially re-opened,
Penaranda faild to re-apply.
Chua also alleges that since he is a managerial
employee, he is not entitled to OT pay and if ever
he rendered services beyond the normal hours of
work, there was no office order/authorization for
him to do so.
The Labor Arbiter ruled that there was no illegal
dismissal and that Penaranda’s complaint was
premature because he was still employed with
Baganga. As regards the benefits, the Labor Arbiter
found petitioner entitled to OT pay, premium pay for
working on rest days and attorney’s fees.
On appeal, NLRC deleted the award of OT pay,
premium pay and attorney’s fees.
The CA dismissed Penaranda’s Petition for
Certiorari based on procedural failures.
Issue:
Whether or not Penaranda is a regular employee
entitled to monetary benefits under Art. 82 of the
Labor Code.
Held:
NO. Penaranda is part of the managerial staff
which takes him out of the coverage of labor
standards. The Implementing Rules define
members of a managerial staff as those with the ff.
responsibilities:
(1) The primary duty consists of the performance of
work directly related to management policies of the
employer;
(2) Customarily and regularly exercise discretion
and independent judgment;
(3) (i) Regularly and directly assist a proprietor or a
managerial employee whose primary duty consists
of the management of the establishment in which
he is employed or subdivision thereof; or (ii)
execute under general supervision work along
specialized or technical lines requiring special
training, experience, or knowledge; or (iii) execute
under general supervision special assignments and
tasks; and
(4) who do not devote more than 20 percent of
their hours worked in a workweek to activities
which are not directly and closely related to the
performance of the work described in paragraphs
(1), (2), and (3) above."
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. As supervisor,
petitioner is deemed a member of the managerial
staff.
Even Penaranda admitted that he was a
supervisor. In his Position Paper, he stated that he
was the foreman responsible for the operation of
the boiler. The term foreman implies that he was
the representative of management over the
workers and the operation of the department. His
classification as supervisor is further evident from
the manner his salary was paid. He belonged to the
10% of respondent’s 354 employees who were
paid on a monthly basis; the others were paid only
on a daily basis.
*No justification to award overtime pay and
premium pay for rest days to Penaranda.
PAPER INDUSTRIES CORPORATION OF THE
PHILIPPINES, petitioner,
vs.
HON. BIENVENIDO E. LAGUESMA,
Undersecretary of Labor and Employment,
HON. HENRY PABEL, Director of the
Department of Labor and Employment Regional
Office No. XI and/or the Representation Officer
of the Industrial Relations Division who will act
for and in his behalf, PCOP- BISLIG
SUPERVISORY AND TECHNICAL STAFF
EMPLOYEES UNION, ASSOCIATED LABOR
UNION and FEDERATION OF FREE
WORKERS, respondents.
DOCTRINE: Managerial employees are ranked as
Top Managers, Middle Managers and First Line
Managers. Top and Middle Managers have the
authority to devise, implement and control strategic
and operational policies while the task of First-Line
Managers is simply to ensure that such policies are
carried out by the rank-and- file employees of an
organization. Under this distinction, "managerial
employees" therefore fall in two (2) categories,
namely, the "managers" per se composed of Top
and Middle Managers, and the "supervisors"
composed of First-Line Managers. Thus, the mere
fact that an employee is designated manager" does
not ipso facto make him one. Designation should
be reconciled with the actual job description of the
employee, for it is the job description that
determines the nature of employment.
FACTS:
Petitioner Paper Industries Corporation of the
Philippines is engaged in the manufacture of paper
and timber products
PICOP-Bislig instituted a Petition for Certification
Election to determine the sole and exclusive
bargaining agent of the supervisory and technical
staff employees of PICOP for collective bargaining
agreement (CBA) purposes.
Initial hearing was set. Paper Industries Corp failed
to file any comment or position paper. Meanwhile,
private respondents Federation of Free Workers
(FFW) and Associated Labor Union (ALU) filed
their respective petitions for intervention.
An Order was issued granting the petitions for
interventions of the FFW and ALU. Another Order
issued on the same day set the holding of a
certification election among PICOP's supervisory
and technical staff employees in with four choices,
WEEK 3 LABOR LAW REVIEW WEEKDAY CLASS 2019 | 2
namely: (1) PICOP Bislig Union; (2) FFW; (3) ALU;
and (4) no union.
Paper Industries Corp appealed the Order which
set the holding of the certification election
contending that the Med-Arbiter committed grave
abuse of discretion in deciding the case without
giving the corporation the opportunity to file its
comments/answer, and that PICOP-Bislig Union
had no personality to file the petition for certification
election.
PICOP questioned and objected to the inclusion of
some section heads and supervisors in the list of
voters whose positions it averred were reclassified
as managerial employees in the light of the
reorganization effected by it.
PICOP’s contention: the company was divided into
four (4) main business groups, namely: Paper
Products Business, Timber Products Business,
Forest Resource Business and Support Services
Business. A vice- president or assistant vice-
president heads each of these business groups. A
division manager heads the divisions comprising
each business group. A department manager
heads the departments comprising each division.
Section heads and supervisors, now called section
managers and unit managers, head the sections
and independent units, respectively, comprising
each department. PICOP advanced the view that
considering the alleged present authority of these
section managers and unit managers to hire and
fire, they are classified as managerial employees,
and hence, ineligible to form or join any labor
organization.
Med-Arbiter ruling: supervisors and section heads
of the petitioner are managerial employees and
therefore excluded from the list of voters for
purposes of certification election.
DOLE Under Sec Laguesma: issued an order
declaring that the subject supervisors and section
heads are supervisory employees eligible to vote in
the certification election.

ISSUE:
Whether or not the positions Section Heads and
Supervisors, who have been designated as Section
Managers and Unit Managers, were converted to
managerial employees under the decentralization
and reorganization program
RULING:
No, they are not managerial employees
A thorough dissection of the job description of the
concerned supervisory employees and section
heads indisputably show that they are not actually
managerial but only supervisory employees since
they do not lay down company policies. PICOP's
contention that the subject section heads and unit
managers exercise the authority to hire and fire is
ambiguous and quite misleading for the reason that
any authority they exercise is not supreme but
merely advisory in character. Theirs is not a final
determination of the company policies inasmuch as
any action taken by them on matters relative to
hiring, promotion, transfer, suspension and
termination of employees is still subject to
confirmation and approval by their respective
superior. Thus, where such power, which is in
effect recommendatory in character, is subject to
evaluation, review and final action by the
department heads and other higher executives of
the company, the same, although present, is not
effective and not an exercise of independent
judgment as required by law.
DISPOSITIVE: Under Sec. Laguesma was correct.
The members of the labor unions won.
SIME DARBY PILIPINAS v. NLRC, G.R. NO.
119205, APR 15, 1998
FACTS:
All company factory workers of Sime Darby
Pilipinas, Inc., manufacturer of automotive tires,
tubes and other rubber products, in Marikina
including members of private respondent union,
Sime Darby Salaried Employees Association (ALU-
TUCP), worked from 7:45 a.m. to 3:45 p.m. with a
30-minute paid on-call lunch break. On August 14,
1992, the petitioner issued a memorandum to all
factory-based employees advising all its monthly
salaried employees in its Marikina Tire Plant a
change in work schedule. The new schedule
extends to 9 hours with two 10-minute paid coffee
break and 1-hour unpaid and undisturbed lunch
break. The Warehouse and Quality Assurance
Department working on shifts, are excluded from
this change in work schedule.
Private respondent, which is an association of
monthly salaried employees of petitioner at its
Marikina factory, filed on behalf of its members a
complaint with the Labor Arbiter for unfair labor
practice, discrimination and evasion of liability.
The Labor Arbiter dismissed the complaint on the
ground that the change in the work schedule and
the elimination of the 30-minute paid lunch break of
the factory workers constituted a valid exercise of
management prerogative and that the new work
schedule, break time and one-hour lunch break did
not have the effect of diminishing the benefits
granted to factory workers as the working time did
not exceed eight (8) hours.
NLRC sustained the decision of Labor Arbiter but
upon motion for reconsideration by private
respondent, the NLRC, having two new
commissioners, reversed its earlier decision.
ISSUE:
Whether or not the act of management in revising
the work schedule of its employees and eliminating
their paid lunch break constitutes unfair labor
practice?
RULING:
The Court held that the employer has the right to
exercise its management prerogatives.
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. Management
retains the prerogative, whenever exigencies of the
service so require, to change the working hours of
its employees. So long as such prerogative is
exercised in good faith for the advancement of the
employers interest and not for the purpose of
defeating or circumventing the rights of the
employees under special laws or under valid
agreements.
In this case, the new work schedule set by the
employer fully complies with the daily work period
of eight (8) hours without violating the Labor Code.
Although the old work schedule included a 30-
minute paid lunch break, the employees were on
call and could be called upon to do jobs during
lunch break. With the new schedule, they can take
one-hour lunch break without any interruption from
their employer.
Moreover, this act was not discriminatory as the
new schedule applies to all employees in the
factory similarly situated whether they are union
members or not.
Pan Am v. Pan Am Employees, G.R. No. L-
16275, February 23, 1961
PRINCIPLE: When meal period is part of
overtime work.—Where during the so-called
meal period, the laborers are required to stand
by for emergency work, or where said meal
hour is not one of complete rest, such period
is considered overtime.
FACTS:
Petitioner claims that the one-hour meal period
should not be considered overtime work (after
deducting 15 minutes), because the evidence
showed that respondent could rest completely,
and were not in any manner under the control
WEEK 3 LABOR LAW REVIEW WEEKDAY CLASS 2019 | 3
of the company during that period. The Court
found that during the so called meal period,
the mechanics were required to stand by for
emergency work; that if they happened not to
be available when called, they were
reprimanded by the leadman; that as in fact it
happened on many occasions, the mechanics
had been called from their meals or told to
hurry up eating to perform work during this
period.
ISSUE: Whether or not the one-hour meal
period is part of overtime work.
HELD: Yes. The meal hour was not one of
complete rest, but was actually a work hour,
since for its duration, the laborers had to be
on ready call. Of course, if the Company
practices in this regard should be modified to
afford the mechanics a real rest during that
hour (i.e. by installing an entirely different
emergency crew, or any similar arrangement),
then the modification of this part of the
decision may be sought from the Court below.
As things now stand, the Court sees no
warrant for altering the decision.
TEOFILO ARICA, DANILO BERNABE,
MELQUIADES DOHINO, ABONDIO OMERTA,
GIL TANGIHAN, SAMUEL IABAJO, 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, HONOR. ABLE ROSARIO B.
ENCARNACION, and STANDARD
(PHILIPPINES) FRUIT CORPORATION,
respondents.
GRN 78210 February 28, 1989

FACTS:
This case stemmed from a complaint filed against
private respondent Stanfilco for assembly time,
moral damages and attorney’s fees, with the
Regional Arbitration- Davao City. The Labor Arbiter
rendered a decision in favor of private respondent
STANFILCO, holding that:
“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
resjudicata.”
NLRC uphold the Labor Arbiters’ decision and
declared that:
“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.
MR was denied hence this petition for review on
certiorari. Petitioners contend that the preliminary
activities as workers of respondents STANFILCO in
the assembly area is compensable as working time
(from 5:30am to 6:00 am) 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. Followed by getting
their individual work assignments from the
foreman.
(b) Then, 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.
.Respondent avers that the instant complaint is not
new because it is the very same claim they brought
against respondent by the same group of rank and
file employees in the case of Arica vs. National
Labor Relations Commission which was filed
before in a different case. The said case involved a
claim for “waiting time”, as the complainants
purportedly were required to assemble.
In the previous case, the 30-minute assembly time
long practiced and institutionalized by mutual
consent of the parties under their CBA cannot be
considered as ‘waiting time’ within the purview of
Section 5, Rule 1, Book III of the Rules and
Regulations Implementing the Labor.
ISSUE:
WON the “assembly time” is compensable.
RULING:
The 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 farms 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 evidence of the
case demonstrates that the 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.
Herein petitioners are merely reiterating the very
same claim which they filed in Arica vs NLRC and
which records show had already long been
considered terminated and closed by this Court.
Therefore, the NLRC can not be faulted for ruling
that petitioners’ claim is already barred by res
judicata.
Petition is DISMISSED for lack of merit and the
decision of the National Labor Relations
Commission is AFFIRMED.
ROBINA FARMS CEBU V. VILLA, G.R. NO.
175869, APRIL 18, 2016
FACTS:
Respondent Elizabeth Villa brought against the
petitioner her complaint for illegal suspension,
illegal dismissal, nonpayment of overtime pay, and
nonpayment of service incentive leave pay in the
RAB No. VII of the NLRC in Cebu City.
In her verified position paper, Villa averred that she
had been employed by petitioner Robina Farms as
sales clerk since August 1981; that in the later part
of 2001, the petitioner had enticed her to avail
herself of the company's special retirement
program; that on March 2, 2002, she had received
a memorandum from Lily Ngochua requiring her to
explain her failure to issue invoices for unhatched
eggs in the months of January to February 2002;
that she had explained that the invoices were not
delivered on time because the delivery receipts
were delayed and overlooked; that despite her
explanation, she had been suspended for 10 days;
that upon reporting back to work, she had been
advised to cease working because her application
WEEK 3 LABOR LAW REVIEW WEEKDAY CLASS 2019 | 4
for retirement had already been approved; that she
had been subsequently informed that her
application had been disapproved, and had then
been advised to tender her resignation with a
request for financial assistance; that she had
manifested her intention to return to work but the
petitioner had confiscated her gate pass; and that
she had since then been prevented from entering
the company premises and had been replaced by
another employee.
The petitioner admitted that Villa had been its sales
clerk at Robina Farms. It stated that her attention
had been called by the accounting department to
explain her failure to issue invoices for the
unhatched eggs for the month of February; After
the administrative hearing Villa was found to have
violated the company rule on the timely issuance of
the invoices that had resulted in delay in the
payment of buyers considering that the payment
had depended upon the receipt of the invoices; that
she had been suspended from her employment as
a consequence; that after serving the suspension,
she had returned to work and had followed up her
application for retirement with Lucina de Guzman,
who had then informed her that the management
did not approve the benefits equivalent to 86% of
her salary rate applied for, but only 1/2 month for
every year of service; and that disappointed with
the outcome, she had then brought her complaint
against the petitioners
LA rendered a decision finding that Villa had not
been dismissed from employment. The NLRC
rendered its judgment dismissing the appeal by the
petitioner but granting that of Villa. CA upheld the
finding of the NLRC that the petitioner had illegally
dismissed Villa
ISSUES:
(1) Was Villa illegally dismissed?
(2) Was Villa entitled to overtime pay and SIL
pay?
RULING:
(1) Yes, private respondent was illegally
dismissed.
It is undeniable that private respondent was
suspended for ten (10) days. Ordinarily, after an
employee [has] served her suspension, she should
be admitted back to work and to continue to
receive compensation for her services.
In the case at bar, it is clear that private respondent
was not admitted immediately after her suspension.
When she reported back after her suspension, she
was advised not to report back anymore as her
application was approved, which was latter [sic] on
disapproved. She was then advised to tender a
resignation letter with request for financial
assistance by Lucy de Guzman. After that another
letter of petitioner Lily Ngochua advised private
respondent to do the same. Clearly, these acts are
strong indication that petitioners wanted to severe
[sic] the employer-employee relationship between
them and that of private respondent. This is
buttressed by the fact that when private respondent
signified her intention to return back to work after
learning of the disapproval of her application, she
was prevented to enter the petitioner's premises by
confiscating her ID and informing her that a new
employee has already replaced her.
Moreover, private respondent’s application for early
retirement did not manifest her intention to sever
the employer-employee relationship. Although she
applied for early retirement, she did so upon the
belief that she would receive a higher benefit
based on the petitioner's offer. As such, her
consent to be retired could not be fairly deemed to
have been knowingly and freely given.
(2) Private Respondent is entitled to SIL pay but
not to overtime payment
OVERTIME PAYMENT
Firstly, entitlement to overtime pay must first be
established by proof that the overtime work was
actually performed before the employee may
properly claim the benefit. The burden of proving
entitlement to overtime pay rests on the employee
because the benefit is not incurred in the normal
course of business.
And, secondly, the NLRC's reliance on the daily
time records (DTRs) showing that Villa had stayed
in the company's premises beyond eight hours was
misplaced. The DTRs did not substantially prove
the actual performance of overtime work. An
employee could render overtime work only when
there was a prior authorization therefor by the
management. Without the prior authorization,
therefore, Villa could not validly claim having
performed work beyond the normal hours of work
SERVICE INCENTIVE LEAVE PAY
The LA originally awarded the SIL pay because the
petitioner did not present proof showing that Villa
had been justly paid. The petitioner submitted the
affidavits of Zanoria explaining the payment of
service incentive leave after the Labor Arbiter had
rendered her decision. But that was not enough, for
evidence should be presented in the proceedings
before the Labor Arbiter, not after the rendition of
the adverse decision by the Labor Arbiter or during
appeal. Such a practice of belated presentation
cannot be tolerated because it defeats the speedy
administration of justice in matters concerning the
poor worker.
G.R. No. 173648 January 16, 2012
ABDULJUAHID R. PIGCAULAN,* Petitioner, vs.
SECURITY and CREDIT NVESTIGATION, INC.
and/or RENE AMBY REYES, Respondents.
FACTS:
It is not for an employee to prove non-payment of
benefits to which he is entitled by law. Rather, it is
on the employer that the burden of proving
payment of these claims rests.
Canoy and Pigcaulan were both employed by SCII
as security guards and were assigned to SCII’s
different clients. Subsequently, however, Canoy
and Pigcaulan filed with the Labor Arbiter separate
complaints for underpayment of salaries and non-
payment of overtime, holiday, rest day, service
incentive leave and 13th month pays. These
complaints were later on consolidated as they
involved the same causes of action. Canoy and
Pigcaulan, in support of their claim, submitted their
respective daily time records reflecting the number
of hours served and their wages for the same.
They likewise presented itemized lists of their
claims for the corresponding periods served.
RESPONDENT MAINTAINS: that Canoy and
Pigcaulan were paid their just salaries and other
benefits under the law; that the salaries they
received were above the statutory minimum wage
and the rates provided by the Philippine
Association of Detective and Protective Agency
Operators (PADPAO) for security guards; that their
holiday pay were already included in the
computation of their monthly salaries; that they
were paid additional premium of 30% in addition to
their basic salary whenever they were required to
work on Sundays and 200% of their salary for work
done on holidays; and, that Canoy and Pigcaulan
were paid the corresponding 13th month pay for
the years 1998 and 1999. In support thereof,
copies of payroll listings8 and lists of employees
who received their 13th month pay, for the said
periods.
LABOR ARBITER: (in favor of petitioner herein)
held that the payroll listings presented by the
respondents did not prove that Canoy and
Pigcaulan were duly paid as same were not signed
by the latter or by any SCII officer. The 13th month
payroll was, however, acknowledged as sufficient
proof of payment, for it bears Canoy’s and
Pigcaulan’s signatures.
NLRC affirmed; CA however reversed in favor of
respondent.
Hence, the present Petition for Review on
Certiorari [filed by petitioner PIGCAULAN alone]
WEEK 3 LABOR LAW REVIEW WEEKDAY CLASS 2019 | 5
ISSUE:
Whether or not the Honorable Court of Appeals
erred when it dismissed the complaint allegedly
due to absence of legal and factual [bases] despite
attendance of substantial evidence in the records.
HELD:
YES
There was no substantial evidence to support the
grant of overtime pay.
The Labor Arbiter relied heavily on the itemized
computations they submitted which he considered
as representative daily time records to substantiate
the award of salary differentials. The NLRC then
sustained the award on the ground that there was
substantial evidence of underpayment of salaries
and benefits.
We find that both the Labor Arbiter and the NLRC
erred in this regard. The handwritten itemized
computations are self-serving, unreliable and
unsubstantial evidence to sustain the grant of
salary differentials, particularly overtime pay.
Unsigned and unauthenticated as they are, there is
no way of verifying the truth of the handwritten
entries stated therein. Written only in pieces of
paper and solely prepared by Canoy and
Pigcaulan, these representative daily time records,
as termed by the Labor Arbiter, can hardly be
considered as competent evidence to be used as
basis to prove that the two were underpaid of their
salaries.
Hence, in the absence of any concrete proof that
additional service beyond the normal working hours
and days had indeed been rendered, we cannot
affirm the grant of overtime pay to Pigcaulan.
However, with respect to the award for holiday pay,
service incentive leave pay and 13th month pay,
we affirm and rule that Pigcaulan is entitled to
these benefits [under the Labor Code, Article 94-
95].
SCII failed to show any other concrete proof by
means of records, pertinent files or similar
documents reflecting that the specific claims have
been paid. With respect to 13th month pay, SCII
presented proof that this benefit was paid but only
for the years 1998 and 1999. To repeat, the burden
of proving payment of these monetary claims rests
on SCII, being the employer.
The CA erred in dismissing the claims instead of
remanding the case to the Labor Arbiter for a
detailed computation of the judgment award.
PETITION GRANTED. Pigcaulan is hereby
declared entitled to holiday pay and service
incentive leave pay for the years 1997-2000 and
proportionate 13th month pay for the year 2000.
The case is REMANDED to the Labor Arbiter for
further proceedings to determine the exact amount
and to make a detailed computation of the
monetary benefits due.
GMA NETWORK, INC., Petitioner, vs. CARLOS
P. PABRIGA, GEOFFREY F. ARIAS, KIRBY N.
CAMPO, ARNOLD L. LAGAHIT, and ARMANDO
A. CATUBIG, Respondents.
FACTS: Private respondents were engaged by
petitioner for the latters operations in the Technical
Operations Center as Transmitter/VTR men, as
Maintenance staff and as Cameramen On July 19
1999 due to the miserable working conditions
private respondents were forced to file a complaint
against petitioner before the NLRC Regional
Arbitration Branch No. VII Cebu City.
Private respondents filed an amended complaint
raising the following additional issues of 1) Unfair
Labor Practice; 2) Illegal dismissal; and 3)
Damages and Attorneys fees.
An amicable settlement between the parties was
set but the same proved to be futile.
The Labor Arbiter dismissed the complaint of
respondents for illegal dismissal and unfair labor
practice, but held petitioner liable for 13th month
pay.
The NLRC reversed the Decision of the Labor
Arbiter, and held that
a) All complainants are regular employees with
respect to the particular activity to which they were
assigned, until it ceased to exist. As such, they are
entitled to payment of separation pay computed at
one (1) month salary for every year of service;
b) They are not entitled to overtime pay and holiday
pay; and
c) They are entitled to 13th month pay, night shift
differential and service incentive leave pay.
When Petitioner elevated the case to the CA via a
Petition for Certiorari, it rendered its Decision
denying the petition for lack of merit. Hence, this
present Petition for Review on Certiorari.
ISSUES: [1] Did the CA err in finding the
respondents as regular employees of the
petitioner?
[2] Did the CA err in awarding separation pay to the
respondents absent a finding that respondents
were illegally dismissed?
HELD: Respondents claim that they are regular
employees of petitioner GMA Network, Inc. The
latter, on the other hand, interchangeably
characterize respondents employment as project
and fixed period/fixed term employment.
ARTICLE 280. Regular and casual employment.
The provisions of written agreement to the contrary
notwithstanding and regardless of the oral
agreement of the parties, an employment shall be
deemed to be regular where the employee has
been engaged to perform activities which are
usually necessary or desirable in the usual
business or trade of the employer, except where
the employment has been fixed for a specific
project or undertaking the completion or
termination of which has been determined at the
time of the engagement of the employee or where
the work or services to be performed is seasonal in
nature and employment is for the duration of the
season.
An employment shall be deemed to be casual if it is
not covered by the preceding paragraph: Provided,
That, any employee who has rendered at least one
year of service, whether such service is continuous
or broken, shall be considered a regular employee
with respect to the activity in which he is employed
and his employment shall continue while such
activity actually exist.
Pursuant to the above-quoted Article 280 of the
Labor Code, employees performing activities which
are usually necessary or desirable in the employers
usual business or trade can either be regular,
project or seasonal employees, while, as a general
rule, those performing activities not usually
necessary or desirable in the employers usual
business or trade are casual employees. The
consequence of the distinction is found in Article
279 of the Labor Code, which provides:
ARTICLE 279. Security of tenure. In cases of
regular employment, the employer shall not
terminate the services of an employee except for a
just cause or when authorized by this Title. An
employee who is unjustly dismissed from work
shall be entitled to reinstatement without loss of
seniority rights and other privileges and to his full
backwages, inclusive of allowances, and to his
other benefits or their monetary equivalent
computed from the time his compensation was
withheld from him up to the time of his actual
reinstatement.
WEEK 3 LABOR LAW REVIEW WEEKDAY CLASS 2019 | 6
On the other hand, the activities of project
employees may or may not be usually necessary or
desirable in the usual business or trade of the
employer.
The term "project" could also refer to, secondly, a
particular job or undertaking that is not within the
regular business of the corporation. Such a job or
undertaking must also be identifiably separate and
distinct from the ordinary or regular business
operations of the employer. The job or undertaking
also begins and ends at determined or
determinable times. ALU-TUCP v. National Labor
Relations Commission, G.R. No. 109902, August 2,
1994
The jobs and undertakings are clearly within the
regular or usual business of the employer company
and are not identifiably distinct or separate from the
other undertakings of the company. There is no
denying that the manning of the operations center
to air commercials, acting as transmitter/VTR men,
maintaining the equipment, and acting as
cameramen are not undertakings separate or
distinct from the business of a broadcasting
company.
In sum, we affirm the findings of the NLRC and the
Court of Appeals that respondents are regular
employees of petitioner. As regular employees,
they are entitled to security of tenure and therefore
their services may be terminated only for just or
authorized causes. Since petitioner failed to prove
any just or authorized cause for their termination,
we are constrained to affirm the findings of the
NLRC and the Court of Appeals that they were
illegally dismissed.
Since the respondents were illegally dismissed,
they entitled to separation pay in lieu of
reinstatement.
As regards night shift differential, the Labor Code
provides that every employee shall be paid not less
than ten percent (10%) of his regular wage for each
hour of work performed between ten o'clock in the
evening and six o'clock in the morning.
As employees of petitioner, respondents are
entitled to the payment of this benefit in
accordance with the number of hours they worked
from 10:00 p.m. to 6:00 a.m., if any.
The matter of attorney's fees cannot be touched
once and only in the fallo of the decision, else, the
award should be thrown out for being speculative
and conjectural. In the absence of a stipulation,
attorney's fees are ordinarily not recoverable;
otherwise a premium shall be placed on the right to
litigate. They are not awarded every time a party
wins a suit.
In the case at bar, the factual basis for the award of
attorney's fees was not discussed in the text of
NLRC Decision. Thus, the Court constrained to
delete the same.
PHILIPPINE AIRLINES, INC., PETITIONER, VS.
PASCUA
PAL hired private respondents as station
attendants on a four or six-hour work-shift a day at
five to six days a week. The primary duty of private
respondents who were assigned to PAL’s Air
services Department and ASD/CARGO was to load
cargo to departing, and unload cargo from arriving
PAL international flights as well as flights of Cathay
Pacific, Northwest Airlines and Thai Airlines with
which PAL had service contract[s]. On certain
occasions, PAL compelled private respondents to
work overtime because of urgent necessity. The
contracts with private respondents were extended
twice, the last of which appears to have been for an
indefinite period.
Private respondent Joselito Pascua, in his and on
behalf of other 79 part-time station attendants, filed
with the Department of Labor and Employment a
complaint for:
(1) Regularization
(2) Underpayment of wages
(3) Overtime pay
(4) Thirteenth month pay
(5) Service incentive leave pay
(6) Full time of eight hours employment
(7) Recovery of benefits due to regular employees
(8) Night differential pay
(9) Moral damages and
(10) Attorney’s fees,
which was docketed as NLRC NCR Case No. 00-
02-00953-94.
During the pendency of the case, PAL President
Jose Antonio Garcia and PAL Chairman &
Corporate Executive Officer Carlos G. Dominguez
converted the employment status of private
respondents from temporary part-time to regular
part-time.
Private respondents dropped their money claim
then pending before the Office of Executive Labor
Arbiter Guanio, thus leaving for consideration their
complaint for "regularization" - conversion of their
employment status from part-time to regular
(working on an 8-hour shift).
Finding private respondents’ remaining cause of
action was rendered "moot and academic" by their
supervening regularization and denying their
prayer that their status as regular employees be
given retroactive effect to "six months after their
stint as temporary contractual employees," the
Executive Labor Arbiter dismissed private
respondents’ complaint.
On appeal, the NLRC, finding for private
respondents, declared them as regular employees
of PAL with an eight-hour work-shift. As such, they
should be entitled to the compensation and other
benefits provided in the Collective Bargaining
Agreement for regular employees from or day after
one year [of] service. Having been paid less than
what they should receive, complainants are
therefore, entitled to the differentials.
The appellate court upheld the decision of the
NLRC.
ISSUE:
(1) Did petitioner’s act of converting respondents’
status from temporary to regular employees render
the original complaint for "regularization" moot and
academic?
(2) Did the appellate court err when it upheld the
decision of the NLRC to accord respondents
regular full-time employment although petitioner, in
the exercise of its management prerogative,
requires only part-time services?
Held:
1. An issue becomes moot and academic when it
ceases to present a justiciable controversy, so that
a declaration on
the issue would be of no practical use or value. In
that situation, there is no actual substantial relief to
which respondents would be entitled and which
would be negated by the dismissal of their original
complaint.11 Here, it is readily apparent that the
dismissal of the original complaint by the labor
arbiter would negate the substantial relief to which
respondents would have been entitled. They seek
regular full-time employment and this claim is fully
set forth in the original complaint. They specifically
prayed for entitlement to benefits due to a regular
full-time employee with seniority rights.12 The
mere regularization of respondents would still not
entitle them to all benefits under the CBA, which
regular full-time employees enjoy. In fact, regular
part-time employees are covered by the benefits
under Personnel Policies and Procedures Manual,
not the CBA. The dismissal then of the complaint
by the labor arbiter is reversible error, and the
NLRC still acted within its power and authority as a
WEEK 3 LABOR LAW REVIEW WEEKDAY CLASS 2019 | 7
quasi-judicial agency in finding that respondents
deserve more than just being regular employees
but must be regular full-time employees.
2. The exercise of management prerogative is
not absolute. While it may be conceded that
management is in the best position to know its
operational needs, the exercise of management
prerogative cannot be utilized to circumvent the law
and public policy on labor and social justice. That
prerogative accorded management could not
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. By its very
nature, encompassing as it could be, management
prerogative must be exercised always with the
principles of fair play at heart and justice in mind.
Records show that respondents were first hired to
work for a period of one year. Notwithstanding the
fact that respondents perform duties that are
usually necessary or desirable in the usual trade or
business of petitioner, respondents were
considered temporary employees as their
engagement was fixed for a specific period.
However, equally borne by the records, is the fact
that respondents’ employment was extended for
more than two years. Evidently, there was a
continued and repeated necessity for their
services, which puts to naught the contention that
respondents, beyond the one-year period, still
continued to be temporary part-time employees.
Article 280 of the Labor Code13 provides that any
employee who has rendered at least one year of
service, whether such service is continuous or
broken, shall be considered a regular employee
with respect to the activity in which he is employed,
and his employment shall continue while such
activity actually exists.
Here we find no compelling reason to go against
the factual findings of the NLRC. More so, when as
here, these NLRC conclusions are affirmed by the
appellate court.
G.R. No. 121948 October 8, 2001
PERPETUAL HELP CREDIT COOPERATIVE,
INC., vs. BENEDICTO FABURADA, SISINITA
VILLAR, IMELDA TAMAYO, HAROLD CATIPAY,
and the NATIONAL LABOR RELATIONS
COMMISSION, Fourth Division, Cebu City
Facts: On January 3, 1990, Benedicto Faburada,
Sisinita Vilar, Imelda Tamayo and Harold Catipay,
private respondents, filed a complaint against the
Perpetual Help Credit Cooperative, Inc. (PHCCI)
for illegal dismissal. While PHCCI alleged that
there is no employer-employee relationship
between them as private respondents are all
members and co-owners of the cooperative and
that private respondents are its members and are
working for it as volunteers. Not being regular
employees, they cannot sue petitioner.
The Labor Arbiter ruled in favor of the private
respondents that indeed there is an employer-
employee relationship that exists between the
parties. On appeal, the NLRC affirmed the decision
of the Labor Arbiter. Hence, this petition of the
PHCCI.
Issue: Whether or not private respondents are
regular employees.
Ruling: Private respondents are regular
employees of the petitioner.
Article 280 of the Labor Code provides for three
kinds of employees: (1) regular employees or those
who have been engaged to perform activities which
are usually necessary or desirable in the usual
business or trade of the employer; (2) project
employees or those whose employment has been
fixed for a specific project or undertaking, the
completion or termination of which has been
determined at the time of the engagement of the
employee or where the work or service to be
performed is seasonal in nature and the
employment is for the duration of the season; and
(3) casual employees or those who are neither
regular nor project employees. The employees who
are deemed regular are: (a) those who have been
engaged to perform activities which are usually
necessary or desirable in the usual trade or
business of the employer; and (b) those casual
employees who have rendered at least one (1 )
year of service, whether such service is continuous
or broken, with respect to the activity in which they
are employed. Undeniably, private respondents
were rendering services necessary to the day-to-
day operations of petitioner PHCCI. This fact alone
qualified them as regular employees.
One’s regularity of employment is not determined
by the number of hours one works but by the
nature and by the length of time one has been in
that particular job. All of them, except Harold D.
Catipay, worked with petitioner for more than one
(1) year: Benedicto Faburada, for one and a half (1
1/2) years; Sisinita Vilar, for two (2) years; and
Imelda C. Tamayo, for two (2) years and two (2)
months. That Benedicto Faburada worked only on
a part-time basis, does not mean that he is not a
regular employee. One's regularity of employment
is not determined by the number of hours one
works but by the nature and by the length of time
one has been in that particular job. Petitioner's
contention that private respondents are mere
volunteer workers, not regular employees, must
necessarily fail. Its invocation of San Jose City
Electric Cooperative vs. Ministry of Labor and
Employment (173 SCRA 697, 703 (1989) is
misplaced. The issue in this case is whether or not
the employees-members of a cooperative can
organize themselves for purposes of collective
bargaining, not whether or not the members can be
employees. Petitioner missed the point.
The petition is hereby denied.
Cebu Institute of Technology (CIT) vs. Hon.
Blas Ople
GR No. L-58870 December 18, 1987
FACTS:
This is a consolidation of six cases involving
various private schools as well as the then Minister
of Labor and Employment inorder to dispose
uniformly the common legal issue raised namely
the allocation of the incremental proceeds of
authorized tuition fee increases of private schools
provided for in section 3 (a) of Presidential Decree
No. 451, and thereafter, under the Education Act of
1982 (Batas Pambansa Blg. 232).
3(a) of Pres. Decree No. 451 which states:
SEC. 3. Limitations. — The increase in tuition or
other school fees or other charges as well as the
new fees or charges authorized under the next
preceding section shall be subject to the following
conditions;
(a) That no increase in tuition or other school fees
or charges shall be approved unless sixty (60%)per
centum of the proceeds is allocated for increase in
salaries or wages of the members of the faculty
and all other employees of the school concerned,
and the balance for institutional development,
student assistance and extension services, and
return to investments: Provided That in no case
shall the return to investments exceed twelve
(12%) per centum of the incremental proceeds;
This case originated from a Complaint filed with the
Regional Office No. VII of the Ministry of Labor
against petitioner Cebu Institute of Technology
(CIT) by private respondents, Panfilo Canete, et al.,
teachers of CIT, for non-payment of: a) cost of
living allowances (COLA) b) thirteenth (13th) month
pay differentials and c) service incentive leave.
CIT contended that it had paid the allowances
mandated by various decrees but the same had
been integrated in the teacher's hourly rate. It
alleged that the payment of COLA by way of salary
increases is in line with Pres. Dec. No. 451. It also
WEEK 3 LABOR LAW REVIEW WEEKDAY CLASS 2019 | 8
claimed in its position paper that it had paid
thirteenth month pay to its employees and that it
was exempt from the payment of service incentive
leave to its teachers who were employed on
contract basis.
Minister of Labor and Employment held that the
basic hourly rate designated in the Teachers'
Program is regarded as the basic hourly rate of
teachers exclusive of the COLA, and that COLA
should not be taken from the 60% incremental
proceeds of the approved increase in tuition fee.
Petitioner assails the aforesaid Order in this
Special Civil Action of certiorari with Preliminary
Injunction and/or Restraining Order. The Court
issued a Temporary Restraining Order on
December 7, 1981 against the enforcement of the
questioned Order of the Minister of Labor and
Employment.
B.
In another complaint filed by ten faculty members,
for alleged non-compliance by herein petitioner
Divine Word College of Legazpi with, among
others, Pres. Dec. No. 451, i.e., allowances were
charged to the 60% incremental proceeds of tuition
fee increase, the Labor Regulation Section of
Regional Office No. V (Legazpi City) of the Ministry
of Labor and Employment conducted an inspection
of the employment records of said school. On the
basis of the report on the special inspection that
the school did not comply with Pres. Dec. No. 451,
herein respondent Regional Director issued an
Order dated May 30, 1983, requiring compliance by
the Divine Word College.
Upon failure of the school to comply with the
aforesaid Order, another Order (August 2, 1983)
was issued by herein respondent Regional Director
requiring herein petitioner to pay the faculty
members- complainants (herein private
respondents) the amounts indicated therein or the
total sum of Six Hundred Seventeen Thousand
Nine Hundred Sixty Seven Pesos and Seventy
Seven Centavos (P 617,967.77). Petitioner's
Motion for Reconsideration of the Order was
denied.
C.
In the case of the Far Eastern University, the
petitioner Union filed with the Ministry of Labor and
Employment a complaint against respondent
University for non-payment of legal holiday pay and
under-payment of the thirteenth (13th) month pay.
While the case was pending, the Union President,
in his personal capacity, filed another complaint for
violation of Pres. Dec. No. 451 against the same
respondent.
D.
In the Fabros case, which is in the nature of a class
suit, brought by petitioners in behalf of the faculty
members and other employees of more than 4000
private schools nationwide. Petitioners seek to
enjoin the implementation of paragraphs 7 to 7.5 of
MECS Order No. 5, series of 1985 on the ground
that the said order is null and void for being
contrary to Pres. Dec. No. 451 and the rulings of
the Supreme Court.
On September 11, 1982, Batas Pambansa Blg. 232
(Education Act of 1982) was signed into law. On
the matter of tuition and other school fees of private
schools, section 42 of said law provides as follows:
Sec. 42. Tuition and other School Fees. — Each
private School shall determine its rate of tuition and
other school fees or charges. The rates and
charges adopted by schools pursuant to this
provision shall be collectible, and their application
or use authorized subject to rules and regulations
promulgated by the Ministry of Education, Culture
and Sports.
Invoking section 42 of B.P. Blg. 232, among others,
as its legal basis, the then Minister of Education the
disputed MECS Order No. 25, s. 1985 entitled
Rules and Regulations To Implement the
Provisions of B.P. Blg. 232.
The petitioners prayed for the issuance of a
temporary restraining order which was granted by
the Court after hearing the motions in separate
resolutions lifting the temporary restraining order
with respect to these schools in order that they may
proceed with the implementation of the general
salary increase for their employees.
E.
In Biscocho Case, The Espiritu Santo Parochial
School and the Espiritu Santo Parochial School
Faculty Association were parties to a labor dispute
which arose from a deadlock in collective
bargaining. The union went on strike after efforts at
the conciliation failed.
The petitioners, Jasmin Biscocho and 26 others, all
employees and faculty members of the respondent
School, filed the present petition for prohibition to
restrain the implementation of the April 14, 1986
Order of respondent Labor Minister as well as the
agreements arrived at pursuant thereto. They
contend that said Order and agreements affect
their rights to the 60% incremental proceeds under
Pres. Dec. No. 451 which provide for the exclusive
application of the 60% incremental proceeds to
basic salary.
The Court immediately issued a temporary
restraining order on enjoining the respondents from
enforcing, implementing and proceeding with the
questioned order and collective bargaining
agreement executed between respondents Union
and the School Administration in pursuance
thereof.
F.
In Valmonte Case, the petition was filed by parents
with children studying at respondent school,
Espiritu Santo Parochial School to nullify the Order
dated April 14, 1986 issued by public respondent,
then Minister of Labor and Employment.
The subject matter of the instant case, the public
respondent found that the latest proposals of the
respondent school was to give 85% of the
proceeds from tuition fee increases for the school
years to be divided among the teachers and
employees as salary adjustments. What the
respondent faculty association offered to accept
was a package of 95% for school year 1985-1986,
90% for school year 1986- 1987. The respondent
school offered to strike the middle of the two
positions, hence the Order complained of by the
petitioners.
ISSUE:
Whether or not the alleged implementing rules and
regulations promulgated by the then MECS to the
effect that allowances and other benefits may be
charged against the 60% portion of the proceeds of
tuition fee increases provided for in Section 3(a) of
Pres. Dec. No. 45 1 were issued ultra vires, and
therefore not binding upon this Court
RULING:
Yes.
The Court has consistently held that if the schools
have no resources other than those derived from
tuition fee increases, allowances and benefits
should be charged against the proceeds of tuition
fee increases which the law allows for return on
investments under section 3(a) of Pres. Dec. No.
451, therefore, not against the 60% portion
allocated for increases in salaries and wages (See
117 SCRA at 571). This ruling was reiterated in the
University of Pangasinan case and in the Saint
Louis University case.
There is no cogent reason to reverse the Court's
ruling in the aforecited cases. Section 3(a) of Pres.
Dec. No. 451 imposes among the conditions for the
approval of tuition fee increases, the allocation of
60% per cent of the incremental proceeds thereof
for increases in salaries or wages of school
personnel and not for any other item such as
allowances or other fringe benefits.
As decided by the Court in University of
Pangasinan Faculty Union v. University of
Pangasinan, supra:
WEEK 3 LABOR LAW REVIEW WEEKDAY CLASS 2019 | 9
... The sixty (60%) percent incremental proceeds
from the tuition increase are to be devoted entirely
to wage or salary increases which means
increases in basic salary. The law cannot be
construed to include allowances which are benefits
over and above the basic salaries of the
employees. To charge such benefits to the 60%
incremental proceeds would be to reduce the
increase in basic salary provided by law, an
increase intended also to help the teachers and
other workers tide themselves and their families
over these difficult economic times. [Italics
supplied] (127 SCRA 691, 702).
This interpretation of the law is consistent with the
legislative intent expressed in the Decree itself, i.e.,
to alleviate the sad plight of private schools and
that of their personnel wrought by slump in
enrollment and increasing operational costs on the
part of the schools, and the increasing costs of
living on the part of the personnel (Preamble, Pres.
Dec. No. 451).
While coming to the aid of the private school
system by simplifying the procedure for increasing
tuition fees, the Decree imposes as a condition for
the approval of any such increase in fees, the
allocation of 60% of the incremental proceeds
thereof, to increases in salaries or wages of school
personnel. This condition makes for a quid pro quo
of the approval of any tuition fee hike by a school,
thereby assuring the school personnel concerned,
of a share in its proceeds. The condition having
been imposed to attain one of the main objectives
of the Decree, which is to help the school
personnel cope with the increasing costs of living,
the same cannot be interpreted in a sense that
would diminish the benefit granted said personnel.
In the light of existing laws which exclude
allowances from the basic salary or wage in the
computation of the amount of retirement and other
benefits payable to an employee, the Court did not
adopt a different meaning of the terms "salaries or
wages" to mean the opposite, i.e. to include
allowances in the concept of salaries or wages.

As to the alleged implementing rules and
regulations promulgated by the then MECS to the
effect that allowances and other benefits may be
charged against the 60% portion of the proceeds of
tuition fee increases provided for in Section 3(a) of
Pres. Dec. No. 45 1, suffice it to say that these
were issued ultra vires, and therefore not binding
upon this Court.
UST Faculty Union vs. NLRC
G.R. No. 89885 August 6, 1990
Facts: Professor Tranquilina Marino was a
member of the Faculty of Pharmacy of UST, upon
reaching the age of 65, UST allowed her to
continue teaching for the school years 1986-1987
and 1987-1989. However, UST denied her
extension of tenure for the school year 1988-1989.
Several other professors from other colleges of
UST were also denied extension of tenure upon
reaching the age of 65.
The UST Faculty Union filed a complaint for unfair
labor practice and against UST with the NLRC,
alleging that it violated Sec. 1, Article XII of the
CBA, entered into in 1986, which provides among
others: a) that upon reaching the age of 65 years
they may be granted extension of tenure unless
they are manifestly inefficient or incompetent or are
otherwise removed for cause; and that b) they shall
continue to enjoy the usual benefits and privileges
until the extension of their tenure is validly denied
by the university in consultation with the Union or
until they are separated from service. The NLRC
dismissed the case for lack of merit. The Union
filed an appeal which was also denied. Hence, this
petition.
Issue: WON UST committed ULP in denying the
extension of service of Prof. Marino.
Held: No. It is important to state that upon the
compulsory retirement of an employee of official in
the public or private service his employment is
deemed terminated. The matter of extension of
service of such employee or official is addressed to
the sound discretion of the employer. It is a
privilege only the employer can grant.
The required consultation with the Union as
provided in the CBA should be interpreted to mean
as one which is advisory in character and as such,
the opinion of the Union is not binding on the UST
authorities. The final say as to the denial of
extension of a retiree still rests with the employer,
UST.
JOCELYN HERRERA-MANAOIS, petitioner, vs.
ST. SCHOLASTICA'S COLLEGE, respondent.
The present case concerns the academic
qualifications required in attaining the status of a
permanent full-time faculty member in the tertiary
level of a private educational institution. Petitioner
Jocelyn Herrera-Manaois (Manaois) assails the
judgments of the Court of Appeals which ruled that
respondent St. Scholastica's College (SSC) was
not guilty of illegal dismissal. SSC did not extend to
Manaois the position of permanent full-time faculty
member with the rank of instructor because she
failed to acquire a master's degree and because
her specialization could no longer be maximized by
the institution due to the changes in its curriculum
and streamlining.
THE FACTS:
SSC is a private educational institution offering
elementary, secondary, and tertiary education.
Manaois graduated from SSC in October 1992 with
a degree in Bachelor of Arts in English. In 1994,
she returned to her alma mater as a part-time
English teacher. After taking a leave of absence for
one year, she was again rehired by SSC for the
same position. Four years into the service, she was
later on recommended by her Department
Chairperson to become a full-time faculty member
of the English Department.
Manaois thus applied for a position as full-time
instructor for school year 2000-2001. She
mentioned in her application letter that she had
been taking the course Master of Arts in English
Studies, Major in Creative Writing, at the University
of the Philippines, Diliman (UP); that she was
completing her master's thesis; and that her oral
defense was scheduled for June 2000. In a reply
letter dated 17 April 2000, the Dean of Arts and
Sciences informed her of the SSC Administrative
Council's approval of her application. She was then
advised to maintain the good performance that she
had shown for the past years and to submit the
necessary papers pertaining to her master's
degree. Accordingly, SSC hired her as a
probationary full-time faculty member with the
assigned rank of instructor for the school year
2000-2001. Her probationary employment
continued for a total of three consecutive years.
Throughout her service as a probationary full-time
faculty member with no derogatory record, she was
given above-satisfactory ratings by both the
Department Chairperson and the Dean of Arts and
Sciences.
Because of the forthcoming completion of her third
year of probationary employment, Manaois wrote
the Dean of Arts and Sciences requesting an
extension of her teaching load for the school year
2003-2004. She again mentioned in her letter that
she was a candidate for a master's degree in
English Studies; that the schedule of her oral
defense may actually materialize anytime within the
first academic semester of 2003; and that she
intended to fully earn her degree that year. She
also furnished the school with a Certification from
UP, stating that she had already finished her
coursework in her master's studies. Furthermore,
she indicated that it was her long-term goal to
apply for a return to full-time faculty status by then
and for SSC to consider the aforesaid matters.
WEEK 3 LABOR LAW REVIEW WEEKDAY CLASS 2019 | 10
Manaois eventually received a letter from the Dean
of College and Chairperson of the Promotions and
Permanency Board officially informing her of the
board's decision not to renew her contract.
Manaois sought clarification and reconsideration of
the decision of SSC to terminate her services. SSC
denied her request in a letter dated 11 July 2003.
Consequently, she filed a complaint for illegal
dismissal, payment of 13th month pay, damages,
and attorney's fees against SSC.
SSC explained that upon consideration of the
written application of Manaois, the Dean of Arts
and Sciences wrote the following notation at the
bottom of her letter of application — "APPROVED:
on the basis that she finishes her MA." The college
clarified that the application for full-time faculty
status of Manaois was accepted with the specific
qualification that she would submit the necessary
papers pertaining to her master's degree. It
stressed that permanency may only be extended to
full-time faculty members if they had fulfilled the
criteria provided in the SSC Faculty Manual.
According to SSC, the Chair of the English
Department did not endorse the application for
permanency of Manaois, since the latter had not
finished her master's degree within the three-year
probationary period. SSC then refuted the
supposed performance ratings of Manaois and
instead pointed out that she had merely received
an average rating from her students. Finally, it
asserted that her specialization was the subject of
writing and not English Literature, which was the
subject area that they needed a faculty member for.
THE ISSUE
Whether the completion of a master's degree is
required in order for a tertiary level educator to
earn the status of permanency in a private
educational institution.
OUR RULING
Probationary employment refers to the trial stage or
period during which the employer examines the
competency and qualifications of job applicants,
and determines whether they are qualified to be
extended permanent employment status. Such an
arrangement affords an employer the opportunity
— before the full force of the guarantee of security
of tenure comes into play — to fully scrutinize and
observe the fitness and worth of probationers while
on the job and to determine whether they would
become proper and efficient employees. It also
gives the probationers the chance to prove to the
employer that they possess the necessary qualities
and qualifications to meet reasonable standards for
permanent employment. Article 281 of the Labor
Code, as amended, provides as follows:
Art. 281.Probationary employment. — Probationary
employment shall not exceed six (6) months from
the date the employee started working, unless it is
covered by an apprenticeship agreement
stipulating a longer period. The services of an
employee who has been engaged on a
probationary basis may be terminated for a just
cause or when he fails to qualify as a regular
employee in accordance with reasonable
standards made known by the employer to the
employee at the time of his engagement. An
employee who is allowed to work after a
probationary period shall be considered a regular
employee. (Emphases supplied)
We agree with the CA that the requirement to
obtain a master's degree was made known to
Manaois. The contract she signed clearly
incorporates the rules, regulations, and
employment conditions contained in the SSC
Faculty Manual, viz.:
I.EMPLOYMENT
A.. . .
B.After having read and understood in full the
contents of the COLLEGE UNIT's current
FACULTY MANUAL, the FACULTY MEMBER
agrees to faithfully perform all the duties and
responsibilities attendant to her position as
PROBATIONARY FULL-TIME FACULTY MEMBER
and comply with all the rules, regulations and
employment conditions of the SCHOOL, as
provided in said FACULTY MANUAL including any
amendment/s pertinent to her position as may be
hereinafter incorporated therein. ISCaTE
xxx xxx xxx
IV.EFFECTIVITY
A.The SCHOOL has the right to terminate the
FACULTY MEMBER'S services for just cause such
as, among others, failure to comply with any of the
provisions of the FACULTY MANUAL pertinent to
her status as FULL-TIME PROBATIONARY
FACULTY MEMBER.
CRITERIA FOR PERMANENCY DCaSHI
1.The faculty member must have completed at
least a master's degree.
X x x that the section in the SSC Faculty Manual on the
Viewed next to the statements and actions of
Manaois — i.e., the references to obtaining a
master's degree in her application letter, in the
subsequent correspondences between her and
SSC, and in the letter seeking the extension of a
teaching load for the school year 2003-2004; and
her submission of certifications from UP and from
her thesis adviser — we find that there is indeed
substantial evidence proving that she knew about
the necessary academic qualifications to obtain the
status of permanency.
We also agree with the CA that the labor arbiter
and the NLRC gravely misinterpreted the section in
the SSC Faculty Manual, which purportedly
provided for a lower academic requirement for full-
time faculty members with the rank of instructor,
regardless of whether they have attained
permanency or are still on probation. The labor
arbiter refers to the following section in the SSC
Manual:
B.ACCORDING TO RANK
Only full-time and half-time faculty members are
ranked. Subsidiary faculty members follow a
separate ranking system. Based on academic
preparation, fulfillment of duties and
responsibilities, performance, research, output
and/or community service, a full-time or half-time
faculty member may be appointed to any of the
following ranks: HCTaAS
1.INSTRUCTOR
There are 4 probationary ranks and 8 permanent
ranks
a.Minimum Requirements
1.A bachelor's degree with at least 25% masteral
units completed
X x x Notwithstanding the existence of the SSC Faculty
As correctly pointed out by the CA, the aforecited
minimum requirements provided for the rank of
instructor merely refer to how instructors are
ranked, and not to the academic qualifications
required to attain permanency. It must be noted
ranking of instructors cover those who are still on
probationary employment and those who have
already attained permanency. It would therefore be
erroneous to simply read the section on the ranking
of instructors — without taking into consideration
the previously quoted section on permanency — in
order to determine the academic qualifications for
the position of permanent full-time faculty member
with the rank of instructor. Thus, to properly arrive
at the criteria, the sections on both the permanency
and the ranking of an instructor, as provided in the
SSC Manual, must be read in conjunction with
each another.
At this juncture, we reiterate the rule that mere
completion of the three-year probation, even with
an above-average performance, does not
guarantee that the employee will automatically
acquire a permanent employment status. It is
settled jurisprudence that the probationer can only
qualify upon fulfillment of the reasonable standards
set for permanent employment as a member of the
teaching personnel. In line with academic freedom
and constitutional autonomy, an institution of higher
learning has the discretion and prerogative to
impose standards on its teachers and determine
whether these have been met. Upon conclusion of
the probation period, the college or university,
being the employer, has the sole prerogative to
make a decision on whether or not to re-hire the
WEEK 3 LABOR LAW REVIEW WEEKDAY CLASS 2019 | 11
probationer. The probationer cannot automatically
assert the acquisition of security of tenure and
force the employer to renew the employment
contract. In the case at bar, Manaois failed to
comply with the stated academic qualifications
required for the position of a permanent full-time
faculty member.
Manual, Manaois still cannot legally acquire a
permanent status of employment. Private
educational institutions must still supplementarily
refer to the prevailing standards, qualifications, and
conditions set by the appropriate government
agencies (presently the Department of Education,
the Commission on Higher Education, and the
Technical Education and Skills Development
Authority). This limitation on the right of private
schools, colleges, and universities to select and
determine the employment status of their academic
personnel has been imposed by the state in view of
the public interest nature of educational institutions,
so as to ensure the quality and competency of our
schools and educators.
The applicable guidebook at the time petitioner
was engaged as a probationary full-time instructor
for the school year 2000 to 2003 is the 1992
Manual of Regulations for Private Schools (1992
Manual). It provides the following conditions of a
probationary employment:
Section 89.Conditions of Employment. — Every
private school shall promote the improvement of
the economic, social and professional status of all
its personnel.
In recognition of their special employment status
and their special role in the advancement of
knowledge, the employment of teaching and non-
teaching academic personnel shall be governed by
such rules as may from time to time be
promulgated, in coordination with one another, by
the Department of Education, Culture and Sports
and the Department of Labor and Employment. X-
x-x

Section 92.Probationary Period. — Subject in all
instances to compliance with Department and
school requirements, the probationary period for
academic personnel shall not be more than three
(3) consecutive years of satisfactory service for
those in the elementary and secondary levels, six
(6) consecutive regular semesters of satisfactory
service for those in the tertiary level, and nine (9)
consecutive trimesters of satisfactory service for
those in the tertiary level where collegiate courses
are offered on the trimester basis.
Section 93.Regular or Permanent Status. — Those
who have served the probationary period shall be
made regular or permanent. Full-time teachers who
have satisfactorily completed their probationary
period shall be considered regular or permanent.
(Emphases supplied)
Considering that petitioner ultimately sought for the
position of a permanent full-time instructor, we
must further look into the following provisions under
the 1992 Manual, which set out the minimum
requirements for such status:
Section 44.Minimum Faculty Qualifications. — The
minimum qualifications for faculty for the different
grades and levels of instruction duly supported by
appropriate credentials on file in the school shall be
as follows:
xxx xxx xxx
c.Tertiary
(1)For undergraduate courses, other than
vocational:
(a)Holder of a master's degree, to teach largely in
his major field; or, for professional courses, holder
of the appropriate professional license required for
at least a bachelor's degree. Any deviation from
this requirement will be subject to regulation by the
Department.
Section 45.Full-time and Part-time Faculty. — As a
general rule, all private schools shall employ full-
time academic personnel consistent with the levels
of instruction.
Full-time academic personnel are those meeting all
the following requirements:
a.Who possess at least the minimum academic
qualifications prescribed by the Department under
this Manual for all academic personnel;
b.Who are paid monthly or hourly, based on the
regular teaching loads as provided for in the
policies, rules and standards of the Department
and the school;TcIaHC
c.Whose total working day of not more than eight
hours a day is devoted to the school;
d.Who have no other remunerative occupation
elsewhere requiring regular hours of work that will
conflict with the working hours in the school; and
e.Who are not teaching full-time in any other
educational institution.
All teaching personnel who do not meet the
foregoing qualifications are considered part-time.
xxx xxx xxx
Section 47.Faculty Classification and Ranking. —
At the tertiary level, the academic teaching
positions shall be classified in accordance with
academic qualifications, training and scholarship
preferably into academic ranks of Professor,
Associate Professor, Assistant Professor, and
Instructor, without prejudice to a more simplified or
expanded system of faculty ranking, at the option
of the school.
Thus, pursuant to the 1992 Manual, private
educational institutions in the tertiary level may
extend "full-time faculty" status only to those who
possess, inter alia, a master's degree in the field of
study that will be taught. This minimum
requirement is neither subject to the prerogative of
the school nor to the agreement between the
parties. For all intents and purposes, this
qualification must be deemed impliedly written in
the employment contracts between private
educational institutions and prospective faculty
members. The issue of whether probationers were
informed of this academic requirement before they
were engaged as probationary employees is thus
no longer material, as those who are seeking to be
educators are presumed to know these mandated
qualifications. Thus, all those who fail to meet the
criteria under the 1992 Manual cannot legally attain
the status of permanent full-time faculty members,
even if they have completed three years of
satisfactory service.
In the light of the failure of Manaois to satisfy the
academic requirements for the position, she may
only be considered as a part-time instructor
pursuant to Section 45 of the 1992 Manual. In turn,
as we have enunciated in a line of cases, a part-
time member of the academic personnel cannot
acquire permanence of employment and security of
tenure under the Manual of Regulations in relation
to the Labor Code. We thus quote the ruling of this
Court in Lacuesta, viz.:
Section 93 of the 1992 Manual of Regulations for
Private Schools provides that full-time teachers
who have satisfactorily completed their
probationary period shall be considered regular or
permanent. Moreover, for those teaching in the
tertiary level, the probationary period shall not be
more than six consecutive regular semesters of
satisfactory service. The requisites to acquire
permanent employment, or security of tenure, are
(1) the teacher is a full-time teacher; (2) the teacher
must have rendered three consecutive years of
service; and (3) such service must have been
satisfactory.
As previously held, a part-time teacher cannot
acquire permanent status. Only when one has
served as a full-time teacher can he acquire
permanent or regular status. The petitioner was a
part-time lecturer before she was appointed as a
full-time instructor on probation. As a part-time
lecturer, her employment as such had ended when
her contract expired. Thus, the three semesters
she served as part-time lecturer could not be
credited to her in computing the number of years
she has served to qualify her for permanent status.
WEEK 3 LABOR LAW REVIEW WEEKDAY CLASS 2019 | 12
Petitioner posits that after completing the three-
year [full-time instructor on] probation with an
above-average performance, she already acquired
permanent status. On this point, we are unable to
agree with petitioner.
Completing the probation period does not
automatically qualify her to become a permanent
employee of the university. Petitioner could only
qualify to become a permanent employee upon
fulfilling the reasonable standards for permanent
employment as faculty member. Consistent with
academic freedom and constitutional autonomy, an
institution of higher learning has the prerogative to
provide standards for its teachers and determine
whether these standards have been met. At the
end of the probation period, the decision to re-hire
an employee on probation, belongs to the
university as the employer alone. (Emphases
supplied).
For the foregoing reasons, we rule that there is no
legal obligation on the part of SSC to reappoint
Manaois after the lapse of her temporary
appointment.
LOLITA R. LACUESTA, Petitioner, versus
ATENEO DE MANILA UNIVERSITY, DR.
LEOVINO MA. GARCIA and DR. MARIJO RUIZ,
Respondents.,
G.R. No. 152777, Dec 9, 2005
FACTS:
Respondent Ateneo hired, on a contractual
basis, petitioner Lolita R. Lacuesta as a part-time
lecturer in its English Department for the 2nd
semester of school year 1988-1989. She was re-
hired, still on a contractual basis, for the 1st and
2nd semesters of school year 1989-1990.
On July 13, 1990, the petitioner was first
appointed as full-time instructor on probation,
effective June 1, 1990 – March 31, 1991.
Thereafter, her contract as faculty on probation was
renewed effective April 1, 1991 – March 31, 1992.
She was again hired for a 3rd year effective April 1,
1992 – March 31, 1993. During these 3 years she
was on probation status.
Respondents Dr. Leovino Ma. Garcia, Dean
of Ateneo’s Graduate School and College of Arts
and Sciences, notified petitioner that her contract
would no longer be renewed because she did not
integrate well with the English Department.
Petitioner appealed to the President of the Ateneo.
Then President Fr. Bernas explained to petitioner
that she was not being terminated, but her contract
would simply expire. Fr. Bernas offered petitioner
the job as book editor in the University Press under
terms comparable to that of a faculty member.
March 26, 1993, petitioner applied for clearance to
collect her final salary as instructor. Petitioner also
signed a Quitclaim, Discharge and Release.
Petitioner worked as editor in the University
Press from April 1, 1993 – March 31, 1994
including an extension of two months after her
contract expired. Upon expiry of her contract,
petitioner applied for clearance to collect her final
salary as editor. Petitioner decided not to have her
contract renewed due to a severe back problem.
She did not report back to work, but she submitted
her clearance. Petitioner filed a complaint for illegal
dismissal with prayer for reinstatement, back
wages, and moral and exemplary damages.
LA held that petitioner may not be terminated by
mere lapse of the probationary period but only for
just cause or failure to meet the employer’s
standards and that the quitclaim, discharge and
release executed by petitioner was not a bar to
filing a complaint for illegal dismissal. He ordered
reinstatement with payment of full back wages.
The NLRC reversed LA’s decision and ruled that
petitioner was not illegally dismissed, and that her
quitclaim was valid. Petitioner sought MR but it
was denied. She went to CA but it affirmed
NLRC’s decision. Hence, this petition.
ISSUE:
Whether the petitioner became a regular
employee of Ateneo.
RULING:
The “Manual of Regulations for Private Schools,”
and not the Labor Code, determines whether or not
a faculty member in an educational institution has
attained regular or permanent status. Under Policy
Instructions No. 11 issued by DOLE “the
probationary employment of professors, instructors
and teachers shall be subject to the standards
established by the Department of Education and
Culture.” Said standards are embodied in
paragraph 75 (now Section 93) of the Manual of
Regulations for Private Schools.
Section 93 of the 1992 Manual of Regulations
for Private Schools provides that full-time teachers
who have satisfactorily completed their
probationary period shall be considered regular or
permanent. Moreover, for those teaching in the
tertiary level, the probationary period shall not be
more than 6 consecutive regular semesters of
satisfactory service. The requisites to acquire
permanent employment, or security of tenure, are
(1) the teacher is a full-time teacher; (2) the teacher
must have rendered three consecutive years of
service; and (3) such service must have been
satisfactory.
A part-time teacher cannot acquire permanent
status. Only when one has served as a full-time
teacher can he acquire permanent or regular
status. The petitioner was a part-time lecturer
before she was appointed as a full-time instructor
on probation. As a part-time lecturer, her
employment as such had ended when her contract
expired. Thus, the three semesters she served as
part-time lecturer could not be credited to her in
computing the number of years she has served to
qualify her for permanent status.
Completing the probation period does not
automatically qualify her to become a permanent
employee of the university. Petitioner could only
qualify to become a permanent employee upon
fulfilling the reasonable standards for permanent
employment as faculty member. Consistent with
academic freedom and constitutional autonomy, an
institution of higher learning has the prerogative to
provide standards for its teachers and determine
whether these standards have been met. At the
end of the probation period, the decision to re-hire
an employee on probation, belongs to the
university as the employer alone.
Probationary employees enjoy security of tenure,
but only within the period of probation. Likewise,
an employee on probation can only be dismissed
for just cause or when he fails to qualify as a
regular employee in accordance with the
reasonable standards made known by the
employer at the time of his hiring. Upon expiration
of their contract of employment, academic
personnel on probation cannot automatically claim
security of tenure and compel their employers to
renew their employment contracts. In the instant
case, petitioner, did not attain permanent status
and was not illegally dismissed. As found by the
NLRC, her contract merely expired.
Petitioner had already signed a valid quitclaim,
discharge and release which bars the present
action. This Court has held that not all quitclaims
are per se invalid or against public policy, except
(1) where there is clear proof that the waiver was
wangled from an unsuspecting or gullible person,
or (2) where the terms of settlement are
unconscionable on their face. In this case, there is
no showing that petitioner was coerced into signing
the quitclaim. In her sworn quitclaim, she freely
declared that she received to her full satisfaction all
that is due her by reason of her employment and
that she was voluntarily releasing respondent
Ateneo from all claims in relation to her
employment. Nothing on the face of her quitclaim
has been shown as unconscionable.
WEEK 3 LABOR LAW REVIEW WEEKDAY CLASS 2019 | 13
WHEREFORE, petition is DENIED for lack of
merit.
SAINT MARY’S UNIVERSITY vs. COURT OF
APPEALS, GR No. 157788, March 08, 2005
Case Principle: A part-time employee does not
attain permanent status no matter how long he has
served the school. And as a part-timer, his services
could be terminated by the school without being
held liable for illegal dismissal.
Facts:
Respondent Marcelo Donelo started teaching on a
contractual basis at St. Mary’s University in 1992.
In 1995, he was issued an appointment as an
Assistant Professor I. Later on, he was promoted to
Assistant Professor III. He taught until the first
semester of school year 1999-2000 when the
school discontinued giving him teaching
assignments. For this, respondent filed a complaint
for illegal dismissal against the university. In its
defense, petitioner St. Mary’s University showed
that respondent was merely a part-time instructor
and, except for three semesters, carried a load of
less than eighteen units. Petitioner argued that
respondent never attained permanent or regular
status for he was not a full-time teacher. The Labor
Arbiter ruled that respondent was lawfully
dismissed because he had not attained permanent
or regular status pursuant to the Manual of
Regulations for Private Schools. The Labor Arbiter
held that only full-time teachers with regular loads
of at least 18 units, who have satisfactorily
completed three consecutive years of service
qualify as permanent or regular employees.
On appeal, the National Labor Relations
Commission (NLRC) reversed the Decision and
ordered the reinstatement of respondent. It held
that respondent was a full-time teacher as he did
not appear to have other regular remunerative
employment and was paid on a regular monthly
basis regardless of the number of teaching hours.
As a full-time teacher and having taught for more
than 3 years, respondent qualified as a permanent
or regular employee of the university. The Court of
Appeals affirmed the Decision of the NLRC.
Issues:
a.) Whether or not respondent is a full-time
teacher. b.) Whether or not there was illegal
dismissal
Held:
Section 93 of the 1992 Manual of Regulations
for Private Schools, provides that full-time
teachers who have satisfactorily completed their
probationary period shall be considered regular or
permanent. Furthermore, the probationary period
shall not be more than six consecutive regular
semesters of satisfactory service for those in the
tertiary level. Thus, the following requisites must
concur before a private school teacher acquires
permanent status:
(1) The teacher is a full-time teacher;
(2) The teacher must have rendered three
consecutive years of service; and
(3) Such service must have been satisfactory.
Section 45 of the 1992 Manual of Regulations
for Private Schools provides that
Full-time academic personnel are those meeting all
the following requirements:
a. Who possess at least the minimum academic
qualifications prescribed by the Department under
this Manual for all academic personnel;
b. Who are paid monthly or hourly, based on the
regular teaching loads as provided for in the
policies, rules and standards of the Department
and the school;
c. Whose total working day of not more than eight
hours a day is devoted to the school;
d. Who have no other remunerative occupation
elsewhere requiring regular hours of work that will
conflict with the working hours in the school; and
e. Who are not teaching full-time in any other
educational institution. All teaching personnel who
do not meet the foregoing qualifications are was entered into only after public bidding pursuant
considered part-time. Ruling: to existing regulations through canvass among
No. The reason of COA’a disallowance is that the three qualified "bidders." Since Layson submitted
rate applied by Dingcong was P40.00/day when the lowest price, each contract was awarded to
the prevailing rate at that time was only P25.00/day him. The Court also notes that Layson was
ATTY. PRAXEDIO P. DINGCONG vs. HON. for casuals, hence, excessive and subsequently hired as a casual in the Bureau of
TEOFISTO T. GUINGONA, JR., Chairman, B. C. disadvantageous to the government. Treasury Office in order to do away with the hiring
FERNANDEZ, JR., and COMMISSIONER of a carpenter and electrician, thereby exhibiting an
EUFEMIO C. DOMINGO Commissioner, COA The criteria for a daily wage rate contract can awareness on petitioner's part of government
G.R. No. 76044 June 28, 1988 hardly be applied to "pakyao" arrangements, the interests and a positive effort to avail of cost-cutting
two being worlds apart. options.
Facts:
Atty. Dingcong was the former Acting Regional In "pakyao" a worker is paid by results. It is akin to Contract for piece of work vs Daily wage basis.
Director of Region VI Bureau of Treasury in Iloilo a contract for a piece of work where-by the Contract for piece
City. On three occasions, after public bidding, contractor binds himself to execute a piece of work Daily Wage Basis
of work/Pakyao
contracted, admittedly on an "emergency labor for the employer, in consideration of a certain price
basis," the services of one Rameses Layson, a or consideration. The contractor may either employ The worker is paid
private carpenter and electrician on "pakyao" basis The worker is paid
his labor or skill, or also furnish the material (Article by results, akin to
for the renovation and improvement of the Bureau. on the basis of actual
1713, Civil Code). Not so in a contract on a daily contract for piece of
The contracts amounted to a total of P8,302.00 days worked.
wage basis, where what is paid for is the labor work
alone. Under the "pakyao" system, payment is
Subsequently, Layson was hired as a casual made in a lump sum; the laborer makes a profit for the contractor binds
employee in the Bureau of Treasury Office in order himself, which is justified by the fact that any loss himself to execute a
to do away with the hiring of a private carpenter would also be borne by him. On the other hand, no piece of work for the
and electrician. profit inures to the daily wage worker and no employer, in
materials are furnished by him. The "pakyao" consideration of a
When Dingcong retired, among the items arrangement is not without its advantages. The certain price or
disallowed by the Resident Auditor was the amount what is paid for is the
tendency to dilly-dally on the work, generally consideration. The
of P6,574.00 from the labor contracts with Layson, labor alone.
experienced in a daily wage contract, is hardly contractor may
by reducing the latter's daily rate from P40.00 per present in labor on a "pakyao" basis. The latter can either employ his
day to P18.00 daily. also be more flexible, with the need for supervision labor or skill, or also
reduced to the minimum. It is not necessarily furnish the material
Dingcong appealed to the Chairman of the COA, frowned upon. In fact; it is recognized in the Labor (Article 1713, Civil
who affirmed the disallowance as being "excessive Code (Article 101), and even in the Revised Code)
and disadvantageous to the government," but Manual of Instructions to Treasurers, which
increased Layson's daily rate to P25.00 thereby The payment is
provides that "except in construction or repairs
reducing the total amount disallowed to P4,276.00. made in a lump
requiring technical skill such as upon buildings,
Despite Dingcong's request for reconsideration, sum; the laborer
bridges, water works structures, culverts, etc., no profit inures to the
respondent Commission remained unmoved, makes a profit for
when the total cost of the work does not exceed daily wage worker
hence, the instant appeal. himself, which is
P3,000.00, the same may be performed under the and no materials are
justified by the fact
"pakyao" contract ..." (Section 750). In this case, furnished by him.
Issue: W/N the payments for the "pakyao" labor that any loss would
each contract with Layson did not exceed
contract that were disallowed on the ground that also be borne by
P3,000.00.
the cost of that contract was excessive and, him
therefore, disadvantageous to the government, Recourse to a "pakyao" labor contract, therefore, is
proper? not necessarily disadvantageous. In this case, it
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The tendency to
dilly-dally on the
dilly-dally on the
work is generally
work is hardly
experienced in a
present in labor on a
daily wage contract
"pakyao" basis
MACKAY VS. SPOUSES CASWELL, GR NO.
183872, NOV. 17, 2014
Contract for Piece of Work
Contributor: Abigail Licayan
Facts:
Sps. Caswell hired Owen Mackay, who offered to
provide electrical installation service in their home
in Zambales for 250, 000. Owen claimed that the
installation was complete and ready for power
service connection by August 1998 (after three
days of work). Sps. Caswell had paid him 227, 000.
However, when ZAMECO (Zambales Electric
Cooperative) inspected the installation work and
tested the distribution transformers, they found
multiple defects. Because of the defects and
incomplete requirements, Zameco refused to
provide service connection to the Caswell home.
The spouses were constrained to ask Zameco to
correct the defects on cost.
Sps. Caswell charged Mackay with swindling.
Mackay on the other hand filed complaint for
collection of sum of money for unpaid 23, 000 for
the installation work. The spouses alleged that
Mackay is not entitled to any money as he failed to
finish the job and that they were the ones entitled
to reimbursement of expenses for the correction of
Mackay’s defective work.
Issue:
WON Sps. Caswell is entitled to reimbursement.
Ruling:
Yes.
Mackay was hired for contract for a piece of work.
Under Art. 1713 of the Civil Code, by the contract
for a piece of work, the contractor binds himself to
execute a piece of work for the employer, in
consideration of a certain price of compensation.
The contractor may either employ only his labor or
skill, or also furnish the material.
Further, under Article 1715 of the Civil Code, if the
work of a contractor has defects which destroy or
lessen its value or fitness for its ordinary or
stipulated use, he may be required to remove the
defect or execute another work. If he fails to do so,
he shall be liable for the expenses by the employer
for the correction of the work.
The demand required of the employer under the
subject provision need not be in a particular form.
In the case at bar, Mackay was given the
opportunity to rectify his work. Subsequent to
Zameco II’s disapproval to supply the Caswells
electricity for several reasons, the Spouses looked
for Mackay to demand a rectification of the work,
but Mackay and his group were nowhere to be
found. Had Mackay really been readily available to
the Caswells to correct any deficiency in the work,
the latter would not have entertained the thought
that they were deceived and would not have been
constrained to undergo the rigors of filing a criminal
complaint and testifying therein. Without doubt, the
Caswells exercised due diligence when they
demanded from Owen the proper rectification of his
work. As correctly held by the CA, the Caswells
substantially complied with the requirement of
Article 1715 of the Civil Code.
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