205 SCRA 69 Labor Law Labor Standards Hours of Work OT Pay of a Project Based

Employee
In 1977, Hilario Rada was contracted by Philnor Consultants and Planners, Inc as a driver. He
was assigned to a specific project in Manila. The contract he signed was for 2.3 years. His task
was to drive employees to the project from 7am to 4pm. He was allowed to bring home the
company vehicle in order to provide a timely transportation service to the other project
workers. The project he was assigned to was not completed as scheduled hence, since he has
a satisfactory record, he was re-contracted for an additional 10 months. After 10 months the
project was not yet completed. Several contracts thereafter were made until the project was
finished in 1985.
At the completion of the project, Rada was terminated as his employment was co-terminous
with the project. He later sued Philnor for non payment of separation pay and overtime pay.
He said he is entitled to be paid OT pay because he uses extra time to get to the project site
from his home and from the project site to his home everyday in total, he spends an
average of 3 hours OT every day.
ISSUE: Whether or not Rada is entitled to separation pay and OT pay.
HELD: Separation pay NO. Overtime pay Yes.
Separation Pay
The SC ruled that Rada was a project employee whose work was coterminous with the project
for which he was hired. Project employees, as distinguished from regular or non-project
employees, are mentioned in Section 281 of the Labor Code as those 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.
Project employees are not entitled to termination pay if they are terminated as a result of the
completion of the project or any phase thereof in which they are employed, regardless of the
number of projects in which they have been employed by a particular construction company.
Moreover, the company is not required to obtain clearance from the Secretary of Labor in
connection with such termination.
OT Pay
Rada is entitled to OT pay. The fact that he picks up employees of Philnor at certain specified
points along EDSA in going to the project site and drops them off at the same points on his
way back from the field office going home to Marikina, Metro Manila is not merely incidental
to Radas job as a driver. On the contrary, said transportation arrangement had been adopted,
not so much for the convenience of the employees, but primarily for the benefit of Philnor. As

embodied in Philnors memorandum, they allowed their drivers to bring home their transport
vehicles in order for them to provide a timely transport service and to avoid delay not really
so that the drivers could enjoy the benefits of the company vehicles nor for them to save on
fair.

PHILIPPINE AIRLINES vs. NLRC et al

G.R. No. 132805
Feb. 2, 1999

FACTS: Private respondent Dr. Fabros was employed as flight surgeon at petitioner company.
He was assigned at the PAL Medical Clinic and was on duty from 4:00 in the afternoon until
12:00 midnight.
On Feb.17, 1994, at around 7:00 in the evening, Dr. FAbros left the clinic to have his dinner at
his residence, which was abou t5-minute drive away. A few minutes later, the clinic received
an emergency call from the PAL Cargo Services. One of its employeeshad suffered a heart
attack. The nurse on duty, Mr. Eusebio, called private respondent at home to inform him of
the emergency. The patient arrived at the clinic at 7:50 in the evening and Mr. Eusebio
immediately rushed him to the hospital. When Dr. Fabros reached the clinic at around 7:51 in
the evening, Mr. Eusebio had already left with the patient to the hospital. The patient died the
following day.
Upon learning about the incident, PAL Medical Director ordered the Chief Flight Surgeon to
conduct an investigation. In his explanation, Dr. Fabros asserted that he was entitled to a
thirty-minute meal break; that he immediately left his residence upon being informed by Mr.
Eusebio about the emergency and he arrived at the clinic a few minutes later; that Mr.
Eusebio panicked and brought the patient to the hospital without waiting for him.

Finding private respondents explanation unacceptable, the management charged private

respondent with abandonment of post while on duty. He denied that he abandoned his post
on February 17, 1994. He said that he only left the clinic to have his dinner at home. In fact,
he returned to the clinic at 7:51 in the evening upon being informed of the emergency.
After evaluating the charge as well as the answer of private respondent, he was given a
suspension for three months effective December 16, 1994.
Private respondent filed a complaint for illegal suspension against petitioner.
On July 16, 1996, the Labor Arbiter rendered a decision declaring the suspension of private
respondent illegal. It also ordered petitioner to pay private respondent the amount equivalent
to all the benefits he should have received during his period of suspension plus P500,000.00
moral damages.
Petitioner appealed to the NLRC.
The NLRC, however, dismissed the appeal after finding that the decision of the Labor Arbiter
is supported by the facts on record and the law on the matter. The NLRC likewise denied
petitioners motion for reconsideration.
Hence, this petition.
ISSUE:
WON the nullifying of the 3-month suspension by the NLRC erroneous.
WON the awarding of moral damages is proper.
HELD: The petition is PARTIALLY GRANTED. The portion of the assailed decision awarding
moral damages to private respondent is DELETED. All other aspects of the decision are
AFFIRMED
The legality of private respondents suspension: Dr. Fabros left the clinic that night only to
have his dinner at his house, which was only a few minutes drive away from the clinic. His

whereabouts were known to the nurse on duty so that he could be easily reached in case of
emergency. Upon being informed of Mr. Acostas condition, private respondent immediately
left his home and returned to the clinic. These facts belie petitioners claim of abandonment.
Petitioner argues that being a full-time employee, private respondent is obliged to stay in the
company premises for not less than eight (8) hours. Hence, he may not leave the company
premises during such time, even to take his meals. We are not impressed. Art. 83 and 85 of
the Labor Code read: Art. 83. Normal hours of work. The normal hours of work of any
employee shall not exceed eight (8) hours a day. Health personnel in cities and municipalities
with a population of at least one million (1,000,000) or in hospitals and clinics with a bed
capacity of at least one hundred (100) shall hold regular office hours for eight (8) hours a day,
for five (5) days a week, exclusive of time for meals, except where the exigencies of the
service require that such personnel work for six (6) days or forty-eight (48) hours, in which
case they shall be entitled to an additional compensation of at least thirty per cent (30%) of
their regular wage for work on the sixth day. For purposes of this Article, health personnel
shall include: resident physicians, nurses, nutritionists, dieticians, pharmacists, social workers,
laboratory technicians, paramedical technicians, psychologists, midwives, attendants and all
other hospital or clinic personnel. (emphasis supplied) Art. 85. Meal periods. Subject to
such regulations as the Secretary of Labor may prescribe, it shall be the duty of every
employer to give his employees not less than sixty (60) minutes time-off for their regular
meals. Sec. 7, Rule I, Book III of the Omnibus Rules Implementing the Labor Code further
states: Sec. 7. Meal and Rest Periods. Every employer shall give his employees, regardless
of sex, not less than one (1) hour time-off for regular meals, except in the following cases
when a meal period of not less than twenty (20) minutes may be given by the employer
provided that such shorter meal period is credited as compensable hours worked of the
employee; (a) Where the work is non-manual work in nature or does not involve strenuous
physical exertion; (b) Where the establishment regularly operates not less than sixteen hours
a day; (c) In cases of actual or impending emergencies or there is urgent work to be
performed on machineries, equipment or installations to avoid serious loss which the
employer would otherwise suffer; and (d) Where the work is necessary to prevent serious loss
of perishable goods. Rest periods or coffee breaks running from five (5) to twenty (20)
minutes shall be considered as compensable working time. Thus, the eight-hour work period

does not include the meal break. Nowhere in the law may it be inferred that employees must
take their meals within the company premises. Employees are not prohibited from going out
of the premises as long as they return to their posts on time. Private respondents act,
therefore, of going home to take his dinner does not constitute abandonment. 2. The award of
moral damages: Not every employee who is illegally dismissed or suspended is entitled to
damages. As a rule, moral damages are recoverable only where the dismissal or suspension
of the employee was attended by bad faith or fraud, or constituted an act oppressive to labor,
or was done in a manner contrary to morals, good customs or public policy In the case at bar,
there is no showing that the management of petitioner company was moved by some evil
motive in suspending private respondent. It suspended private respondent on an honest,
albeit erroneous, belief that private respondents act of leaving the company premises to take
his meal at home constituted abandonment of post which warrants the penalty of suspension.
Under the circumstances, we hold that private respondent is not entitled to moral damages.
Interphil Laboratories Ee Union vs Interphil Laboratories
GR 142824
Facts:
Petitioner is the sole and exclusive bargaining agent of the rank-and-file employees
of Respondent. They had a CBA.
Prior to the expiration of the CBA, respondent company was approached by the
petitioner, through its officers. The Union inquired about the stand of the company regarding
the duration of the CBA which was set to expire in a few months. Salazar told the union
officers that the matter could be best discussed during the formal negotiations which would
start soon.
All the rank-and-file employees of the company refused to follow their regular two-shift work
schedule. The employees stopped working and left their workplace without sealing
the containers and securing the raw materials they were working on.

To minimize the damage the overtime boycott was causing the company, Salazar
immediately asked for a meeting with the union officers. In the meeting, Enrico Gonzales, a
union director, told Salazar that the employees would only return to their normal work
schedule if the company would agree to their demands as to the effectivity and duration of
the new CBA. Salazar again told the union officers that the matter could be better discussed
during the formal renegotiations of the CBA. Since the union was apparently unsatisfied with
the answer of the company, the
overtime boycott continued. In addition, the employees started to engage in a work
slowdown campaign during the time they were working, thus substantially delaying the
production of the company.
Respondent company filed with the National NLRC a petition to declare illegal
petitioner unions overtime boycott and work slowdown which, according to respondent
company, amounted to illegal strike. It also filed with Office Secretary of Labor a petition for
assumption
of jurisdiction. Secretary of Labor Nieves Confesor issued an assumption order over the
labor dispute.
Labor Arbiter Caday submitted his recommendation to the then Secretary of Labor Leonardo
A. Quisumbing. Then Secretary Quisumbing approved and adopted the report in his Order,
finding illegal strike on the part of petitioner Union.
Issue: WON the Labor Secretary has jurisdiction to rule over an illegal strike.
Held:
On the matter of the authority and jurisdiction of the Secretary of Labor and Employment
to rule on the illegal strike committed by petitioner union, it cannot be denied that the
issues of overtime boycott and work slowdown amounting to illegal strike before Labor
Arbiter
Caday are intertwined with the labor dispute before the Labor Secretary.

The appellate court also correctly held that the question of the Secretary of Labor
and Employments jurisdiction over labor-related disputes was already settled in
International Pharmaceutical, Inc. vs. Hon. Secretary of Labor and Associated Labor Union
(ALU) where the Court declared:
In the present case, the Secretary was explicitly granted by Article 263(g) of the Labor Code
the authority to assume jurisdiction over a labor dispute causing or likely to cause a strike or
lockout in an industry indispensable to the national interest, and decide the same accordingly.
Necessarily, this authority to assume jurisdiction over the said labor dispute must include and
extend to all questions and controversies arising therefrom, including cases over which the
labor arbiter has exclusive jurisdiction.
Moreover, Article 217 of the Labor Code is not without, but contemplates, exceptions thereto.
This is evident from the opening proviso therein reading (e)xcept as otherwise provided
under this Code x x x. Plainly, Article 263(g) of the Labor Code was meant to make both the
Secretary (or the various regional directors) and the labor arbiters share jurisdiction,
subject to certain conditions. Otherwise, the Secretary would not be able to effectively
and efficiently dispose of the primary dispute. To hold the contrary may even lead to the
absurd and undesirable result wherein the Secretary and the labor arbiter concerned may
have diametrically
opposed rulings. As we have said, it is fundamental that a statute is to be read in a manner
that would breathe life into it, rather than defeat it.
In fine, the issuance of the assailed orders is within the province of the Secretary as
authorized by Article 263(g) of the Labor Code and Article 217(a) and (5) of the same Code,
taken conjointly and rationally construed to subserve the objective of the jurisdiction vested
in the
Secretary.
Petition denied.
Acua vs CA (2006) G.R. 159832
MERCEDITA ACUA, MYRNA RAMONES, and JULIET MENDEZ, Petitioners, vs. HON.
COURT OF APPEALS and JOIN INTERNATIONAL CORPORATION and/or ELIZABETH

ALAON,Respondents.
Facts:
Petitioners are Filipino overseas workers deployed by private respondent Join International
Corporation (JIC), a licensed recruitment agency, to its principal, 3D Pre-Color Plastic, Inc.,
(3D) in Taiwan, Republic of China, under a uniformly-worded employment contract for a period
of two years. Private respondent Elizabeth Alaon is the president of Join International
Corporation.
Sometime in September 1999, petitioners filed with private respondents applications for
employment abroad. After their papers were processed, petitioners claimed they signed a
uniformly-worded employment contract with private respondents which stipulated that they
were to work as machine operators with a monthly salary of NT$15,840.00, exclusive of
overtime, for a period of two years.
On December 9, 1999, they left for Taiwan. Upon arriving at the job site, a factory owned by
3D, they were made to sign another contract which stated that their salary was only
NT$11,840.00. They were informed that the dormitory which would serve as their living
quarters was still under construction. They were requested to temporarily bear with the
inconvenience but were assured that their dormitory would be completed in a short time.
Petitioners alleged that they were brought to a "small room with a cement floor so dirty and
smelling with foul odor". Forty women were jampacked in the room and each person was
given a pillow. Since the ladies' comfort room was out of order, they had to ask permission to
use the men's comfort room. Petitioners claim they were made to work twelve hours a day,
from 8:00 p.m. to 8:00 a.m.
On December 16, 1999, due to unbearable working conditions, they were constrained to
inform management that they were leaving. They booked a flight home, at their own expense.
Before they left, they were made to sign a written waiver. In addition, petitioners were not
paid any salary for work rendered on December 11-15, 1999. Immediately upon arrival in the
Philippines, petitioners went to private respondents' office, narrated what happened, and
demanded the return of their placement fees and plane fare. Private respondents refused.
On December 28, 1999, private respondents offered a settlement. Petitioner Mendez received
P15,080. The next day, petitioners Acua and Ramones went back and received P13,640 10
and P16,200, respectively. They claim they signed a waiver, otherwise they would not be
refunded.
On January 14, 2000, petitioners Acua and Mendez invoking Republic Act No. 8042 filed a
complaint for illegal dismissal and non-payment/underpayment of salaries or wages, overtime
pay, refund of transportation fare, payment of salaries/wages for 3 months, moral and
exemplary damages, and refund of placement fee before the National Labor Relations
Commission (NLRC).
Issue: Whether or not petitioners were illegally dismissed under Rep. Act No. 8042, thus
entitling them to benefits plus damages.

Held: No illegal dismissal. Constructive dismissal covers the involuntary resignation

resorted to when continued employment becomes impossible, unreasonable or
unlikely; when there is a demotion in rank or a diminution in pay; or when a clear
discrimination, insensibility or disdain by an employer becomes unbearable to an
employee. Court found that petitioners did not deny that the accommodations were not as
homely as expected. Petitioners' admitted that they were told by the principal, upon their
arrival, that the dormitory was still under construction and were requested to bear with the
temporary inconvenience and the dormitory would soon be finished. Petitioners did not refute
private respondents' assertion that they had deployed approximately sixty other workers to
their principal, and to the best of their knowledge, no other worker assigned to the same
principal has resigned, much less, filed a case for illegal dismissal. These cited circumstances
do not reflect malice by private respondents nor do they show the principal's intention to
subject petitioners to unhealthy accommodations. Under these facts, we cannot rule that
there was constructive dismissal.
Overtime pay is granted despite petitioners lack of proof that they actually rendered overtime
work, since their employment records were in the custody of the principal employer. It is a
time-honored rule that in controversies between a worker and his employer, doubts
reasonably arising from the evidence, or in the interpretation of agreements and
writing should be resolved in the worker's favor. private respondents are solidarily
liable with the foreign principal for the overtime pay claims of petitioners.
On the award of moral and exemplary damages, we hold that such award lacks legal basis.
Moral and exemplary damages are recoverable only where the dismissal of an
employee was attended by bad faith or fraud, or constituted an act oppressive to
labor, or was done in a manner contrary to morals, good customs or public policy.
The person claiming moral damages must prove the existence of bad faith by clear and
convincing evidence, for the law always presumes good faith. Petitioners failed to prove bad
faith, fraud or ill motive on the part of private respondents. Moral damages cannot be
awarded.
Without the award of moral damages, there can be no award of exemplary damages, nor
attorney's fees.
Quitclaims are valid. Quitclaims executed by the employees are commonly frowned upon as
contrary to public policy and ineffective to bar claims for the full measure of the workers' legal
rights, considering the economic disadvantage of the employee and the inevitable pressure
upon him by financial necessity. Nonetheless, the so-called "economic difficulties and financial
crises" allegedly confronting the employee is not an acceptable ground to annul the
compromise agreement unless it is accompanied by a gross disparity between the actual
claim and the amount of the settlement.
Records reveal that petitioners were not in any way deceived, coerced or intimidated into
signing a quitclaim waiver in the amounts of P13,640, P15,080 and P16,200 respectively. Nor
was there a disparity between the amount of the quitclaim and the amount actually due the
petitioners. After conversion to Philippine pesos, the amount of the quitclaim paid to
petitioners was actually higher than the amount due them.
WHEREFORE, the petition is DISMISSED, without prejudice to the filing of illegal recruitment
complaint against the respondents pursuant to Section 6(i) of The Migrant Workers and
Overseas Filipino Act of 1995 (Rep. Act No. 8042).

North Davao Mining Corp. and Asset Privatization Trust vs. NLRC Case Digest
North Davao Mining Corp. & Asset Privatization Trust vs. NLRC
254 SCRA 721 (1996)
Facts: Petitioner North Davao Mining Corporation was incorporated in 1974 as a 100%
privately-owned company. Later, the Philippine National Bank became part owner thereof as a
result of a conversion into equity of a portion of loans obtained by North Davao from said bank.
On June 30, 1986, PNB transferred all its loans to and equity in North Davao in favor of the
national government which later turned them over to petitioner Asset Privatization Trust As of
December 31, 1990 the national government held 81.8% of the common stock and 100% of the
preferred stock of said company.
Respondent Wilfredo Guillema is one among several employees of North Davao who were
separated by reason of the companys closure on May 31, 1992, and who were the complainants
in the cases before the respondent labor arbiter. On May 31, 1992, petitioner North Davao
completely ceased operations due to serious business reverses. From 1988 until its closure in
1992, North Davao suffered net losses averaging three billion pesos per year, for each of the five
years prior to its closure. All told five months prior to its closure, its total liabilities had exceeded
its assets by 20.392 billion pesos. When it ceased operations, its remaining employees were
separated and given the equivalent of 12.5 days pay for every year of service, computed on
their basic monthly pay, in addition to the commutation to cash of their unused vacation and sick
leaves. However, it appears that, during the life of the petitioner corporation, from the beginning
of its operations in 1981 until its closure in 1992, it had been giving separation pay equivalent to
thirty days pay for every year of service. Moreover, the employees had to collect their salaries at
a bank in Tagum, Davao del Norte, some 58 kilometers from their workplace and about 2 hours
travel time by public transportation; this arrangement lasted from 1981 up to 1990.
Subsequently, a complaint was filed with respondent labor arbiter by respondent Wilfredo
Guillema and 271 other seperated employees for additional separation pay; back wages;
transportation allowance; hazard pay; etc., amounting to P58,022,878.31.
Issue: Whether or not time spent in collecting wages in a place other than the place of
employment is compensable notwithstanding that the same is done during official time.
Ruling: It is undisputed that because of security reasons, from the time of its operations,
petitioner NDMC maintained its policy of paying its workers at a bank in Tagum, Davao del Norte,
which usually took the workers about two and a half (2 1/2) hours of travel from the place of
work and such travel time is not official. Records also show that on February 12,1992, when an
inspection was conducted by the Department of Labor and Employment at the premises of
petitioner NDMC at Amacan, Maco, Davao del Norte, it was found out that petitioners had
violated labor standards law, one of which is the place of payment of wages.
Section 4, Rule VIII, Book III of the Omnibus Rules Implementing the Labor Code provides
that: Place of payment. - (a) As a general rule, the place of payment shall be at or near the place

of undertaking. Payment in a place other than the workplace shall be permissible only under the
following circumstances: (1) When payment cannot be effected at or near the place of work by
reason of the deterioration of peace and order conditions, or by reason of actual or impending
emergencies caused by fire, flood, epidemic or other calamity rendering payment thereat
impossible; (2) When the employer provides free transportation to the employees back and forth;
and (3) Under any analogous circumstances; provided that the time spent by the employees in
collecting their wages shall be considered as compensable hours worked.
From the evidence on record, we find that the hours spent by complainants in collecting
salaries at a bank in Tagum, Davao del Norte shall be considered compensable hours worked.
Considering further the distance between Amacan, Maco to Tagum which is 2 hours by travel
and the risks in commuting all the time in collecting complainants salaries, would justify the
granting of backwages equivalent to 2 days in a month.
Issue: 1) whether or not petitioner was validly dismissed by respondent with his actions
2) Whether or not he was entitled to separation pay, premium pay, and overtime pay
Facts:
-

Petitioner was hired as a probationary sales agent on May 86, promoted to marketing
specialist
o Tasked to solicit calls, accept call-ins, referrals, make client calls and cold calls which
they had to submit progress reports of, daily
Oct 22 1991, respondent issues a written reprimand regarding his non submission of
reports
o Given a warning for multiple non-compliance throughout Sept. and Oct.
Warned that further non-compliance=termination (2nd notice)
Replied that it was an honest omission and not gross insubordination
Excuse inadequate, suspended 3 days
Feb 93, failed to submit again, and was verbally reminded to submit within a few days
o Feb 16 93 petitioner wrote a note which says To hell with cold calls! Who cares?
This was shown to co-workers and left on his desk
o Feb 23, 93, petitioner receives memo asking to explain his non-submission and
note
Feb 24, Replies: failure to submit=/= gross insubordination
denies knowledge of note
found guilty, Feb 26, 93, served a notice of dismissal

Pet. Complains of illegal dismissal, deductions, underpayment

o Valid dismissal requirements:
a. Employee must be afforded due process. B. dismissal must be for a valid cause
Petitioner: failure to submit =/= willful disobedience, and cold calls are least effective
Respondent allowed to regulate all aspects of employment (rules), when employee enters
establishment, knowing the rules, rule becomes part of contract
o Employee may be dismissed for violation
Respondent produces affidavits of co-employees attesting that petitioner wrote note which
he denied knowledge of
o Denial= if unsubstantiated by clear and convincing evidence, is negative and selfserving evidence which has no weight in law

o He did not deny writing it, only denied knowledge of allegation that he issued note
Willful disobedience: (1) conduct must be willful or intentional (2) order violated must be
reasonable, lawful, made known to the employee and must pertain to the duties
HELD:

Due process given: notice (2 written notices, (1) particular acts (2) decision to dismiss) &
hearing
Hearing: complied w/ as long as there was an opportunity to be heard as he submitted
reply
No law that employees need to be paid commission, so no specific formula, only through
Collective Bargaining negotiations or what employer practices. Not non-diminution of benefits
when he is not always affected by wage increase since commissions are larger, nondiminution would be if company removes commission. As for OT, rest day, holiday pays, his
minutes of the meeting does not prove that he worked those days, when they were not
actually required to go to work on weekends.
David versus Macasio
Facts:
1. Macasio filed before the Labor Arbiter a complaint against petitioner Ariel L. David, doing
business under the name and style Yiels Hog Dealer, for nonpayment of overtime pay,
holiday pay, and 13th month pay.
2. He also claimed payment for moral and exemplary damages and attorneys fees; and for
payment of service incentive leave(SIL).
3. Macasio alleged before the Labor Arbiter that he had been working as a butcher for David
since January 6, 1995.
4. 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 P700.00, which was increased from P600.00 in 2007,
P500.00 in 2006 and P400.00 in 2005; and
(3) approved and disapproved his leaves.
5. Macasio added that David owned the hogs delivered for chopping, as well as the work
tools and implements; David also rented the workplace.
6. Macasio further claimed that David employs about twenty-five (25) butchers and delivery
drivers.
7. David claimed that he started his hog dealer business in 2005, and that he only has ten
employees.
8. He alleged that he hired Macasio as a butcher or chopper on pakyaw or task basis who
is, therefore, not entitled to overtime pay, holiday pay and 13th month pay.
9. David pointed out that Macasio:
(1) usually starts his work at 10:00 p.m. and ends at 2:00 a.m. of the following day or
earlier, depending on the volume of the delivered hogs;
(2) received the fixed amount of P700.00 per engagement, regardless of the actual
number of hours that he spent chopping the delivered hogs; and

(3) was not engaged to report for work and, accordingly, did not receive any fee when
no hogs were delivered.
10.Macasio disputed Davids allegations.
11.He argued that, first, David did not start his business only in 2005. He pointed to the
Certificate of Employment that David issued in his favor which placed the date of his
employment, albeit erroneously, in January 2000.
12.Second, he reported for work every day which the payroll or time record could have easily
proved had David submitted them in evidence.
13.David claimed that he issued the Certificate of Employment, upon Macasios request, only
for overseas employment purposes.
14.The Labor Arbiter dismissed Macasios complaint for lack of merit. The Labor Arbiter gave
credence to Davids claim that he engaged Macasio on pakyaw or task basis.
15.The LA concluded that since Macasio was engaged on pakyaw or task basis, he is not
entitled to overtime, holiday, SIL and 13th month pay.
16.The NLRC affirmed the Labor arbiters ruling.
17.The CA partly granted Macasios certiorari petition and reversed the NLRCs ruling for
having been rendered with grave abuse of discretion.
18.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.
19.The CA explained that as a task basis employee, Macasio is excluded from the coverage of
holiday, SIL and 13th month pay only if he is likewise a field personnel.
20.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.
21.In Macasios case, the elements that characterize a field personnel are evidently lacking
as he had been working as a butcher at Davids Yiels Hog Dealer business in Sta. Mesa,
Manila under Davids supervision and control, and for a fixed working schedule that starts
at 10:00 p.m.
22.Accordingly, the CA awarded Macasios claim for holiday, SIL and 13th month pay for three
years, with 10% attorneys fees on the total monetary award.
23.Hence, David filed the present petition.

Issue
The issue revolves around 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.
Held:
1. David confuses engagement on pakyaw or task basis with the lack of employment
relationship. Impliedly, David asserts that their pakyawan or task basis arrangement
negates the existence of employment relationship.
2. The Supreme Court reject this assertion of the petitioner.
3. Engagement on pakyaw or task basis does not characterize the relationship that may
exist between the parties, i.e., whether one of employment or independent contractorship.
4. 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 employees conduct.

5. These elements or indicators comprise the so-called four-fold test of employment

relationship.
6. Macasios relationship with David satisfies this test.
7. A distinguishing characteristic of pakyaw or task basis engagement, as opposed to
straight-hour wage payment, is the non-consideration of the time spent in working.
8. The payment of an employee on task or pakyaw basis alone is insufficient to exclude one
from the coverage of Service Incentive Leave (SIL) and holiday pay.
9. In determining whether workers engaged on pakyaw or task basis is entitled to holiday
and Service Incentive Leave (SIL) pay, the presence (or absence) of employer supervision
as regards the workers time and performance is the key.
10.The Supreme Court agree with the CA that Macasio does not fall under the definition of
field personnel.
11.The CAs finding in this regard is supported by the established facts of this case:
first, Macasio regularly performed his duties at Davids principal place of business;
second, his actual hours of work could be determined with reasonable certainty; and
third, David supervised his time and performance of duties.
12.Since Macasio cannot be considered a field personnel, then he is not exempted from the
grant of holiday, SIL pay even as he was engaged on pakyaw or task basis.
13.With respect to the payment of 13th month pay however, the Supreme Court find that the
CA legally erred in finding that the NLRC gravely abused its discretion in denying this
benefit to Macasio.
14.The governing law on 13th month pay is PD 851. As with holiday and SIL pay, 13th month
pay benefits generally cover all employees; an employee must be one of those expressly
enumerated to be exempted.
15.Section 3 of the Rules and Regulations Implementing P.D. 851enumerates the exemptions
from the coverage of 13th month pay benefits. Under said law, employers of those who
are paid on task basis, and those who are paid a fixed amount for performing a specific
work, irrespective of the time consumed in the performance thereof are exempted.
16.Note that unlike the IRR of the Labor Code on holiday and SIL pay, Section 3(e) of the
Rules and Regulations Implementing PD 851 exempts employees paid on task basis
without any reference to field personnel. This could only mean that insofar as payment
of the 13th month pay is concerned, the law did not intend to qualify the exemption from
its coverage with the requirement that the task worker be a field personnel at the same
time.
~END
Case: JOSE RIZAL COLLEGES vs. NLRC
G.R. No. L-65482 December 1, 1987
JOSE RIZAL COLLEGE, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION AND
NATIONAL ALLIANCE OF TEACHERS/OFFICE WORKERS, respondents.
FACTS: - Jose Rizal Colleges (JRC) is a non-stock, non-profit educational institution. It has 3
groups of employees:
o
o
o
-

Personnel on monthly basis (uniformed salary over the year) (MONTHLY)

Personnel on a daily basis who are paid on actual days worked with unworked
holiday pay (DAILY)
Collegiate faculty paid on the basis of student contract hour (BY HOUR)

The National Alliance of Teachers and Office Workers (NATOW) filed a complaint against
JRC for alleged nonpayment of holiday pay from 1975-1977.

Labor Arbiters decision:

1. The MONTHLY personnel are presumed to be already paid the 10 paid legal holidays and
are no longer entitled to separate payment for the said regular holidays
2. The DAILY personnel are entitled to be paid the 10 unworked regular holidays
3. The personnel paid BY HOUR are NOT entitled to unworked regular holiday pay
considering that these regular holidays have been excluded in the programming of the student
contact hours
NLRC decision: Modified LAs decision in the sense that teaching personnel paid BY HOUR are
declared to be ENTITLED to holiday pay.
JRCs CONTENTION:
a. It is not covered by Book V of the Labor Code on Labor Relations since it is a non- profit
institution and that its hourly paid faculty members are paid on a "contract" basis because they
are required to hold classes for a particular number of hours.
b. legal holidays are excluded and labelled in the schedule as "no class day. " On the other
hand, if a regular week day is declared a holiday, the school calendar is extended to compensate
for that day.
c. the advent of any of the legal holidays within the semester will not affect the faculty's
salary because this day is not included in their schedule while the calendar is extended to
compensate for special holidays.
ISSUE: WON the school faculty who according to their contracts are paid per lecture hour
are entitled to unworked holiday pay. YES (Special Public Holidays)
RULING: The Holiday Pay is provided under Article 94 of the LC (PD 442, as mended) which
states:
Art. 94. Right to holiday pay (a) Every worker shall be paid his regular daily wage
during regular holidays, except in retail and service establishments regularly employing less
than ten (10) workers;
(b) The employer may require an employee to work on any holiday but such employee shall
be paid a compensation equivalent to twice his regular rate; ... "
and in the Implementing Rules and Regulations, Rule IV, Book III, which reads:
SEC. 8. Holiday pay of certain employees. (a) Private school teachers, including
faculty members of colleges and universities, may not be paid for the regular holidays
during semestral vacations. They shall, however, be paid for the regular holidays
during Christmas vacations. ...
Apparently, JRC is obliged to give pay even on unworked regular holidays (with
respect to first contention)
JRC, although a non-profit institution, is under obligation to give pay even
on unworked regular holidays to hourly paid faculty members subject to the terms and conditions
provided for under the law.
Faculty members paid by hour are NOT entitled to be paid on REGULAR HOLIDAYS
as these are already labeled in the schedule (or calendar?) as NO CLASS
Regular holidays specified as such by law are known to both school and faculty members as
no class days;" certainly the latter do not expect payment for said unworked days, and this was
clearly in their minds when they entered into the teaching contracts.
Hence, JRC is exempted from paying hourly paid faculty members their pay for regular
holidays, whether the same be during the regular semesters of the school year or during
semestral, Christmas, or Holy Week vacations

Faculty members who are paid by hour should be paid of their expected income
when classes are called off or shortened (because of declared SPECIAL PUBLIC
HOLIDAYS) even when school calendar is extended to compensate the special holidays
It is readily apparent that the declared purpose of the holiday pay which is the prevention of
diminution of the monthly income of the employees on account of work interruptions is defeated
when a regular class day is cancelled on account of a special public holiday and class hours are
held on another working day to make up for time lost in the school calendar.
Otherwise stated, the faculty member, although forced to take a rest, does not earn what he
should earn on that day. Be it noted that when a special public holiday is declared, the faculty
member paid by the hour is deprived of expected income, and it does not matter that the school
calendar is extended in view of the days or hours lost, for their income that could be earned from
other sources is lost during the extended days. Similarly, when classes are called off or
shortened on account of typhoons, floods, rallies, and the like, these faculty members must
likewise be paid, whether or not extensions are ordered.

INSULAR BANK OF ASIA AND AMERICA EMPLOYEES UNION (IBAA-EU), petitioner, vs.HON. AMADO
G. INCIONG, and IBAA, respondents.
G.R. No. L-52415
October 23, 1984
FACTS:
The Department of Labor promulgated the rules and regulations for the implementation of
holidays with pay. The controversial section thereof reads: Sec. 2. Status of employees paid by
the month. Employees who are uniformly paid by the month, irrespective of the number of
working days therein, with a salary of not less than the statutory or established minimum wage
shall be presumed to be paid for all days in the month whether worked or not. For this purpose,
the monthly minimum wage shall not be less than the statutory minimum wage multiplied by
365 days divided by twelve
Later, Policy Instruction No. 9 was issued by the then Secretary of Labor interpreting the abovequoted rule, pertinent portions of which read:
xxx xxx xxx
The ten (10) paid legal holidays law, to start with, is intended to benefit principally daily
employees. In the case of monthly, only those whose monthly salary did not yet include payment
for the ten (10) paid legal holidays are entitled to the benefit.
Respondent IBAA by reason of the ruling laid down by the aforecited rule implementing Article 94
of the Labor Code and by Policy Instruction No. 9, stopped the payment of holiday pay to all its
employees.
Writ of execution of the previously decided case for them to be paid their holiday pay was filed
by the petitioner. Labor arbiter and NLRC ruled in their favor. IBAA filed an MR to the Office of the
Minister of Labor which set aside the decision of NLRC. Hence this petition.

ISSUE:
WON holiday pay does not apply to monthly- paid employees.
HELD:
No.
Section 2, Rule IV, Book III of the implementing rules and Policy Instruction No. 9 issued by the
then Secretary of Labor are null and void since in the guise of clarifying the Labor Codes
provisions on holiday pay, they in effect amended them by enlarging the scope of their exclusion.
The provisions of the Labor Code on the entitlement to the benefits of holiday pay are clear and
explicit it provides for both the coverage of and exclusion from the benefits. In Policy Instruction
No. 9, the then Secretary of Labor went as far as to categorically state that the benefit is
principally intended for daily paid employees, when the law clearly states that every worker shall
be paid their regular holiday pay.