MANILA TERMINAL CO. INC. v.

CIR
FACTS: Manila Terminal Company, Inc. undertook the arrastre service in
some of the piers in Manila's Port Area at the request and under the
control of the United States Army. The petitioner hired some thirty men as
watchmen on twelve-hour shifts at a compensation of P3 per day for the
day shift and P6 per day for the night shift.
The watchmen of the petitioner continued in the service with a number of
substitutions and additions, their salaries having been raised during the
month of February to P4 per day for the day shift and P6.25 per day for the
nightshift. The private respondent sent a letter to Department of Labor
requesting that the matter of overtime pay be investigated. But nothing
was done by the Dept of Labor.
Later on, the petitioner instituted the system of strict eight-hour shifts.
The private respondent filed an amended petition with the CIR praying,
among others, that the petitioner be ordered to pay its watchmen or
police force overtime pay from the commencement of their employment.
By virtue of Customs Administrative Order No. 81 and Executive Order No.
228 of the President of the Philippines, the entire police force of the
petitioner was consolidated with the Manila Harbor Police of the Customs
Patrol Service, a Government agency under the exclusive control of the
Commissioner of Customs and the Secretary of Finance The Manila
Terminal Relief and Mutual Aid Association will hereafter be referred to as
the Association.
Judge V. Jimenez Yanson of the CIR in his decision ordered the petitioner
to pay to its police force but regards to overtime service after the
watchmen had been integrated into the Manila Harbor Police, the has no
jurisdiction because it affects the Bureau of Customs, an instrumentality of
the Government having no independent personality and which cannot be
sued without the consent of the State.
The petitioner filed a motion for reconsideration. The Association also filed
a motion for reconsideration in so far its other demands were dismissed.
Both resolutions were denied.
The public respondent decision was to pay the private respondents their

G.R. No. L-4148 July 16, 1952

overtime on regular days at the regular rate and additional amount of 25
percent, overtime on Sundays and legal holidays at the regular rate only,
and watchmen are not entitled to night differential pay for past services.
The petitioner has filed a present petition for certiorari.
ISSUES: 1.) Whether or not the CIR has no jurisdiction to render a money
judgment involving obligation in arrears?
2.) Whether or not the agreement under which its police force were paid
certain specific wages for twelve-hour shifts, included overtime
compensation.
3.) Whether or not the nullity or invalidity of the employment contract
precludes any recovery by the Association.
4.) Whether or not the Commonwealth Act No. 4444 does not authorize
recovery of back overtime pay.
HELD: The Supreme Court affirmed the appealed decision that the
petitioner's watchmen is entitled to extra compensation only from the
dates they respectively entered the service of the petitioner, hereafter to
be duly determined by the Court of Industrial Relations.
1.) The Court of Industrial Relations has no jurisdiction to award a money
judgment was already overruled by this Court on the case of Detective &
protective Bureau, Inc. vs. Court of Industrial Relations and United
Employees Welfare Association that under Commonwealth Act No. 103
the Court is empowered to make the order for the purpose of settling
disputes between the employer and employee.
2.) Based on the case of Detective & Protective Bureau, Inc. vs. Court of
Industrial Relations and United Employees Welfare Association, the law
gives them the right to extra compensation. And they could not be held to
have impliedly waived such extra compensation, since it can not expressly
be waived.
3.) The employee in rendering extra service at the request of his employer
has a right to assume that the latter has complied with the requirement of
the law, and therefore has obtained the required permission from the
Department of Labor. This was based on the case of Gotamo Lumber Co.
vs. Court of Industrial Relations, wherein both parties are in pari delicto.

Ponente: PARAS, C. J.:

Moreover, the Eight-Hour Law, in providing that "any agreement or
contract between the employer and the laborer or employee contrary to
the provisions of this Act shall be null avoid ab initio.
4.) Based on Fair Labor Standards Act of the United States which provides
that "any employer who violates the provisions of section 206 and section
207 of this title shall be liable to the employee or employees affected in
the amount of their unpaid minimum wages or their unpaid overtime
compensation as the case may be," a provision not incorporated in
Commonwealth Act No. 444, our Eight-Hour Labor Law.
We cannot agree to the proposition, because sections 3 and 5 of
Commonwealth Act 444 expressly provides for the payment of extra
compensation in cases where overtime services are required, with the
result that the employees or laborers are entitled to collect such extra
compensation for past overtime work. To hold otherwise would be to
allow an employer to violate the law by simply, as in this case, failing to
provide for and pay overtime compensation.
ASIA PACIFIC CHARTERING (PHILS.) INC. v. MARIA LINDA R. FAROLAN393
SCRA 454 (2002), THIRD DIVISION (Carpio Morales, J.)
The termination of a managerial employee on the ground of loss of
confidence should have a basis and the determination of the same
cannot be left entirely to the employer.
Petitioner Asia Pacific Chartering (Phils.) Inc. (Asia) is tasked with the selling
of passenger and cargo spacesfor Scandinavian Airlines System. Petitioner
Asia, through its Vice President Catalino Bondoc (Bondoc),offered
Respondent Maria Linda R. Farolan (Farolan) the sales manager position to
which Farolan accepted.Upon Vice President Bondocs
request, Farolan submitted a detailed report attributing the drop of
salesrevenue to market forces beyond her control. Consequently, Asia
directed Roberto Zozobrado (Zozobrado)to implement solutions.
Zozobrado informally took over Farolans marketing and sales
responsibilities butshe continued to receive her salary.
Asia claims that the increase in sales revenue was due to
Zozobradosmanagement. Asia then sent a letter of termination

to Farolan on the ground of loss of confidence, forcing Farolan tofile a

complaint for illegal dismissal.

the letter of termination) for her dismissal, loss of confidence, should have
a basis and determination thereof cannot be left entirely to the employer.

The Labor Arbiter found that the dismissal was illegal for lack of justcause,
however, such decision was reversed by the National Labor Relations
Commission (NLRC) stating that the termination of employment due to
loss of confidence is within management prerogative. On appeal,the Court
of Appeals upheld the labor arbiters decision. Hence, the filing of this
petition.
ISSUE:
Whether or not Respondent Farolans dismissal was illegal
HELD:
A statement of the requisites for a valid dismissal of an employee is thus in
order, to wit: (a) the employeemust be afforded due process, i.e., he must
be given opportunity to be heard and to defend himself; and (b)dismissal
must be for a valid cause.

MERCIDAR FISHING CORPORATION represented by its President DOMINGO

B. NAVAL, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and FERMIN AGAO,
JR., respondents/1998
FACTS:
Fermin Agao, a bodegero (or para sosy, ships quartermaster) at
Mercidar Fishing Corp., filed complaint for illegal dismissal, violation of PD
851 and non-payment of 5-days service incentive leave; he started work
there in 1988 and claims to have been constructively dismissed in 1990
when his employer refused to give him assignments aboard the companys
boats
LA ordered Agaos reinstatement with backwages and payment of 13th
month pay and service incentive leave pay; NLRC dismissed the appeal of
Mercidar Fishing which claimed that Agao, as a field personnel was not
entitled under the LC to such service incentive leave pay
Petitioner contends that Agao abandoned his work, while the latter alleges
that after having been on one-month leave following a sickness, his
employer refused to give him further assignments after he reported for
work
ISSUE:
WON fishing crew members are deemed field personnel, as defined
under Art. 82 of LC (NO)
WON Agao had been constructively dismissed (YES)
HELD/RATIO:
Art. 82 - "Field personnel" shall refer to non-agricultural employees who
regularly perform their duties away from the principal place of business or
branch office of the employer and whose actual hours of work in the field
cannot be determined with reasonable certainty. (The provisions of the
Title on Working Conditions & Rest Period according to par.1 of Art. 82
do not apply, among others, to field personnel.)
Citing Union of Pilipro Employees (UFE) v. Vicar, which sought to explain
the meaning of "whose actual hours of work in the field cannot be
determined with reasonable certainty", the Court said that, in deciding
whether or not an employee's actual working hours in the field can be
determined with reasonable certainty, query must be made as to whether
or not such employee's time and performance is constantly supervised by
the employer.

The manner by which Respondent Farolan was dismissed violated thebasic

precepts of fairness and due process - Respondent Farolan was dismissed,
without being afforded theopportunity to be heard and to present
evidence in her defense.
She was never given a written notice stating the particular acts or omission
constituting the grounds for her dismissal as required by law. With respect
to rank and file personnel, loss of trust and confidence as ground for valid
dismissal requiresproof of involvement in the alleged events in question
and that mere uncorroborated assertions andaccusations by the employer
will not be sufficient.
But as regards a managerial employee, mere existence of abasis for
believing that such employee has breached the trust of his employer
would suffice for his dismissal.Loss of trust and confidence to be a valid
ground for an employees dismissal must be based on a willful breach and
founded on clearly established facts.
A breach is willful if it is done intentionally, knowingly andpurposely,
without justifiable excuse.It is not disputed that Farolans job description,
and the terms and conditions of her employment, with theexception of her
salary and allowances, were never reduced to writing. Even assuming,
however, that Farolan was a managerial employee, the stated ground (in

Here, the nature of the work necessarily means that the fishing crew stays
on board the vessel in the course of the fishing voyage. Although they
perform non-agricultural work away from petitioner's business offices, the
fact remains that throughout the duration of their work they are under the
effective control and supervision of petitioner through the vessel's patron
or master as the NLRC correctly held.
The Court also ruled that there was constructive dismissal of Agao.
Medical certificate shows his fitness to work when he presented the same
to his employer. Beside, as already established in jurisprudence, to
constitute abandonment of position, there must be concurrence of the
intention to abandon and some overt acts from which it may be inferred
that the employee concerned has no more interest in working. Here, the
filing of the complaint which asked for reinstatement plus backwages
renders inconsistent the respondents' defense of abandonment.

LABOR CONGRESS OF THE PHILIPPINES V NATIONAL LABOR RELATIONS

COMMISSION,
FACTS:
The 99 persons named as petitioners in this proceeding were rank-and-file
employees of respondent Empire Food Products, which hired them on
various dates. Petitioners filed against private respondents a complaint for
payment of money claim[s] and for violation of labor standard[s] laws.
On January 23, 1991, petitioners filed a complaint docketed as NLRC Case
No. RAB-III-01-1964-91 against private respondents for:
After the submission by the parties of their respective position papers and
presentation of testimonial evidence, Labor Arbiter Ariel C. Santos
absolved private respondents of the charges of unfair labor practice, union
busting, violation of the memorandum of agreement, underpayment of
wages and denied petitioners' prayer for actual, moral and exemplary
damages. Labor Arbiter Santos, however, directed the reinstatement of
the individual complainants:
ISSUE:
Whether or not the petitioners are pakyao or per piece workers and
therefore not entitled to benefits as that of a regular employee.
HELD:
As to the other benefits, namely, holiday pay, premium pay, 13th month
pay and service incentive leave which the labor arbiter failed to rule on but

which petitioners prayed for in their complaint, 15 we hold that petitioners

are so entitled to these benefits. Three (3) factors lead us to conclude that
petitioners, although piece-rate workers, were regular employees of
private respondents. First, as to the nature of petitioners' tasks, their job
of repacking snack food was necessary or desirable in the usual business of
private respondents, who were engaged in the manufacture and selling of
such food products; second, petitioners worked for private respondents
throughout the year, their employment not having been dependent on a
specific project or season; and third, the length of time 16 that petitioners
worked for private respondents. Thus, while petitioners' mode of
compensation was on a "per piece basis," the status and nature of their
employment was that of regular employees.
The Rules Implementing the Labor Code exclude certain employees from
receiving benefits such as nighttime pay, holiday pay, service incentive
leave 17 and 13th month pay, 18 inter alia, "field personnel and other
employees whose time and performance is unsupervised by the employer,
including those who are engaged on task or contract basis, purely
commission basis, or those who are paid a fixed amount for performing
work irrespective of the time consumed in the performance thereof."
Plainly, petitioners as piece-rate workers do not fall within this group. As
mentioned earlier, not only did petitioners labor under the control of
private respondents as their employer, likewise did petitioners toil
throughout the year with the fulfillment of their quota as supposed basis
for compensation. Further, in Section 8 (b), Rule IV, Book III which we
quote hereunder, piece workers are specifically mentioned as being
entitled to holiday pay.
Sec. 8. Holiday pay of certain employees.
(b) Where a covered employee is paid by results or output, such as
payment on piece work, his holiday pay shall not be less than his average
daily earnings for the last seven (7) actual working days preceding the
regular holiday: Provided, however, that in no case shall the holiday pay be
less than the applicable statutory minimum wage rate.
The Supreme Court in its decision held: DECLARING petitioners to have
been illegally dismissed by private respondents, thus entitled to full back
wages and other privileges, and separation pay in lieu of reinstatement at
the rate of one month's salary for every year of service with a fraction of
six months of service considered as one year

PHILIPPINE AIRLINES, INC., vs. NATIONAL LABOR RELATIONS COMMISSION

G.R. No. 115785
August 4, 2000

PARDO, J.
FACTS: On June 30, 1975, Philippine Airlines hired respondent Raul
Diamante as Integrated Ticket Representative for Bacolod City station.
On April 8, 1988, Edgardo Pineda, Rizalino Cabarloc, Ernesto Subia and
Rolando Velasco went to Bacolod Airport to have their tickets booked for
their flight to Manila on April 9 and 10, 1988. Romeo Vista, a former
officemate of Edgardo Pineda, was their contact person. At the airport,
Leticia Vista, wife of Romeo Vista, introduced Raul Diamante to Edgardo
Pineda as the person who could help in the booking of his ticket. Pineda
requested Diamante if he could book their tickets for the April 8, 1988
flight, particularly Subia, who had to attend an important meeting in
Manila. Diamante answered that all flights for the week were fully booked.
He suggested that he leave with him their tickets. Pineda gave four (4)
tickets to Diamante together with the amount of (P1,000.00) then
Diamante assured them that they will be accommodated. Subia was
booked for the April 8, 1988 flight to Manila while Pineda, Velasco and
Cabarloc were booked for the April 10, 1988 flight. When Subia failed to
take the flight due to illness, Diamante returned Subia's ticket to Vista the
following day since it was Diamante's day off. In order to facilitate Subia's
re-booking, Vista asked for the help of her friend Nelia Cawaling, a
neighbor of PAL Station Agent Rodolfo Puentebella. With the help of
Cawaling and Puentebella, Subia was able to take the April 9, 1988 flight to
Manila.
Upon their arrival in Manila, on June 20, 1988, Pineda executed an affidavit
charging Diamante with bribery/corruption. On July 08, 1988 petitioner's
Bacolod Branch Manager required Diamante to comment on the affidavit.
On July 13, 1988, Diamante submitted his sworn statement denying the
allegations against him.
On July 27, 1988, after evaluation of the complaint and finding the
explanation of Diamante insufficient, petitioner's manager charged
Diamante administratively with bribery/extortion and violation of PAL's
Code of Discipline, particularly Article VIII, Section 1, paragraph 2 thereof,
which provides:
"Any employee who directly or indirectly requests or receives any
consideration, share, percentage or commission for himself or for another
person in connection with the performance of his duties."

Thereafter, petitioner convened an ad-hoc Committee on Administrative

Investigation and conducted an investigation. On October 3, 1988 at a
clarificatory hearing of the committee Diamante appeared and was
investigated with the assistance of his counsel, Atty. Allan Zamora, and
PALEA representative Mario Cornelio. During the hearing, it was agreed to
reset the hearing on October 24, 1988, to give Diamante a chance to
confront Pineda. After several postponements, there was never a
confrontation. No confrontation occurred due to the fact that the
committee unilaterally set the confrontation on November 11, 1988, at
Tuguegarao Airport, Cagayan, despite the previous agreement of the
parties and respondent counsel's request to reset it on November 22,
1988, in Manila. The Committee, after deliberation, resolved the case on
the basis of the evidence on record.
On December 14, 1988, Diamante received a notice of his dismissal from
the service by an office memorandum, dated November 29, 1988.
Diamante filed with the National Labor Relations Commission for illegal
dismissal, reinstatement with backwages and damages. Labor Arbiter
rendered a decision declaring the dismissal legal and valid. Diamante
appealed the decision to the National Labor Relations Commission (NLRC).
NLRC rendered a decision granting Diamante's appeal and setting aside the
Labor Arbiter's decision and ordering the reinstatement of Diamante with
three years backwages. Petitioner filed a motion for reconsideration which
the NLRC denied in a resolution Hence, this petition.6
ISSUE: Whether respondent was illegally dismissed which would entitle
him to reinstatement with backwages?
HELD:
Regarding the legality of respondent's dismissal, we note that
respondent was found to have violated the Company Code of Discipline.
We recognize the right of an employer to regulate all aspects of
employment. This right, aptly called management prerogative, gives
employers the freedom to regulate, according to their discretion and best
judgment, all aspects of employment, including work assignment, working
methods, processes to be followed, working regulations transfer of
employees, work supervision, lay-off of workers and the discipline,
dismissal and recall of workers. In general, management has the
prerogative to discipline its employees and to impose appropriate
penalties on erring workers pursuant to company rules and regulations.
Since private respondent's dismissal was for just and valid cause, the order
of public respondent for the reinstatement of private respondent with
award of backwages has no factual and legal basis.

WHEREFORE, the petition is hereby GRANTED. The challenged decision

and resolution of the National Labor Relations Commission are SET ASIDE.
In lieu thereof, the decision of the Labor Arbiter dated October 28, 1992, is
AFFIRMED.
Arica vs NLRC
170 SCRA 776 Labor Law Labor Standards Hours of Work Assembly
Time
Teofilo Arica et al and 561 others sued Standard Fruits Corporation
(STANFILCO) Philippines for allegedly not paying the workers for their
assembly time which takes place every work day from 5:30am to 6am. The
assembly time consists of the roll call of the workers; their getting of
assignments from the foreman; their filling out of the Laborers Daily
Accomplishment Report; their getting of tools and equipments from the
stockroom; and their going to the field to work. The workers alleged that
this is necessarily and primarily for STANFILCOs benefit.
ISSUE: Whether or not the workers assembly time should be paid.
HELD: No. The thirty minute assembly time long practiced and
institutionalized by mutual consent of the parties under Article IV, Section
3, of the Collective Bargaining Agreement cannot be considered as waiting
time within the purview of Section 5, Rule I, Book III of the Rules and
Regulations Implementing the Labor Code . . .
Furthermore, the thirty (30)-minute assembly is a deeply-rooted, routinary
practice of the employees, and the proceedings attendant thereto are not
infected with complexities as to deprive the workers the time to attend to
other personal pursuits. 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.
University of Pangasinan Faculty Union vs. University of Pangasinan
G.R. No. L-63122 Feburuary 20, 1984
Facts:
The petitioners members are full time professors, instructors, and
teachers of the respondent University. The teachers in the college level
teach for a normal duration of ten (10) months in a school year, divided
into two (2) semesters of five months each, excluding the two-month
summer vacation. These teachers are paid their salaries on a regular
monthly basis.

In November and December, 1981, the petitioners members were fully

paid their regular monthly salaries. However, from November 7 to
December 5, during the semestral break, they were not paid their
emergency cost of living allowance(ECOLA). The University claims that the
teachers are not entitled thereto because the semestral break is not an
integral part of the school year and there being no actual services
rendered by the teachers during said period, the principle of No work, no
pay appllies.
Issue:
Whether or not petitioner members are not entitled to ECOLA under No
work, no pay principle.
Held:
The No work, no pay does not apply in the instant case. The petitioners
members received their regular salaries during this period. It is clear from
the aforeqouted provision of the law that it contemplates a no work
situation where the employees voluntarily absent themselves. Petitioners,
in the case at bar certainly do not, ad voluntatem, absent themselves
during semestral breaks. Rather, they are constrained to take mandatory
leave from work. For this, they cannot be faulted nor can they be
begrudged that which is due them under the law. To a certain extent, the
private respondent can specify dates when no classes would be held..
Surely, it was no the intention of the framers of the law to allow employers
to withhold employee benefits by simple expedient of unilaterally
imposing no work days and consequently avoiding compliance with the
mandate of the law for these days.
Thus, the legal principles of No work, no pay; No pay, no ECOLA must
necessarily give way to the purpose of the law to augment the income of
the employees to enable them to cope with the harsh living conditions
brought about by inflation; and to protect employees and their wages
against the ravages brought by these conditions.
Rada vd NLRC
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.

G.R. No. 173648 : January 16, 2012

ABDULJUAHID R. PIGCAULAN, Petitioner, v. SECURITY AND CREDIT
INVESTIGATION, INC. AND/OR RENE AMBY REYES, Respondents.
DEL CASTILLO,J.:
FACTS
Canoy and Pigcaulan were both employed by SCII as security guards and
were assigned to SCIIs different clients. Subsequently, however, Canoy and
Pigcaulan filed with the Labor Arbiter separate complaintsfor
underpayment of salaries and non-payment of overtime, holiday, rest day,
service incentive leave and 13th month pays.
Respondents, however, maintained 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 addition, respondents
contended that Canoys and Pigcaulans monetary claims should only be
limited to the past three years of employment pursuant to the rule on
prescription of claims.
Giving credence to the itemized computations and representative daily
time records submitted by Canoy and Pigcaulan, Labor Arbiter Manuel P.
Asuncion awarded them their monetary claims.
Respondents appealed to the NLRC. The NLRC dismissed the appeal and
held that the evidence show underpayment of salaries as well as nonpayment of service incentive leave benefit.

The CA set aside the rulings of both the Labor Arbiter and the NLRC after
noting that there were no factual and legal bases mentioned in the
questioned rulings to support the conclusions made. Consequently, it
dismissed all the monetary claims of Canoy and Pigcaulan.

NO SSS VS CA

ISSUE: Whether or not Pigcaulan and Canoy are entitled to their money
claims?

National Labor Union instituted this action to ask for 50% additional
compensation for the employees of Shell Company who work at night to
attend to the foreign planes landing and taking off (at night), to supply
petrol and lubricants, and perform other duties.
Court of Industrial Relations held that The Shell Company pay its
workers working at night an additional compensation of 50% over their
regular salaries by working during daytime.

HELD: Court of Appeals decision is reversed and set aside.

LABOR LAW
Article 94 of the Labor Code provides that:
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;
xxxx
While Article 95 of the Labor Code provides:
ART. 95.RIGHT TO SERVICE INCENTIVE LEAVE. (a) Every employee who has
rendered at least one year of service shall be entitled to a yearly service
incentive of five days with pay.
xxxx
Under the Labor Code, Pigcaulan is entitled to his regular rate on holidays
even if he does not work. Likewise, express provision of the law entitles
him to service incentive leave benefit for he rendered service for more
than a year already. Furthermore, under Presidential Decree No. 851,he
should be paid his 13th month pay. As employer, SCII has the burden of
proving that it has paid these benefits to its employees.
Since SCII failed to provide convincing proof that it has already settled the
claims, Pigcaulan should be paid his holiday pay, service incentive leave
benefits and proportionate 13thmonth pay for the year 2000.
Consistent with the rule that all money claims arising from an employeremployee relationship shall be filed within three years from the time the
cause of action accrued,Pigcaulan can only demand the amounts due him
for the period within three years preceding the filing of the complaint in
2000. Furthermore, since the records are insufficient to use as bases to
properly compute Pigcaulans claims, the case should be remanded to the
Labor Arbiter for a detailed computation of the monetary benefits due to
him.

THE SHELL COMPANY OF PHILIPPINE ISLANDS, LIMITED vs.

NATIONAL LABOR UNION

Shell argues that there is no legal provision empowering CIR to order

payment of additional compensation to workers who work at night, and
that Act No. 444 relieved the employer of such obligation as it is provided
in the Act where it made compulsory the "overtime" (additional
compensation) pay for work rendered beyond 8 hours, and such cases do
not include the work at night.
NLU argues decision of the CIR is part of its broad and effective powers as
granted by Commonwealth Act No. 103 - the charter of the Industrial
Relations Court, and that Act No. 444 has no Application to this case
because it is referring only to particular and the maximum working day
permitted in industrial establishments - the 8-hour day.
ISSUES:
WON CIR has the authority to order payment of additional compensation
to workers who work at night?
SC: YES
Articles 1, 4 and 13 of Commonwealth Act No. 103:
It is evident from the Com Act. No. 103 : SECTION 1. (a) that when a
dispute arises between the principal and the employee or worker on the
question of wages, CIR has jurisdiction throughout the Philippines to
consider, investigate and resolve the dispute, setting the wages they deem
fair and reasonable,
SEC. 4. (b) that for the purposes of prevention, arbitration, decision and
arrangement, CIR also has jurisdiction over any dispute - industry and
agriculture - resulting from any differences in wages, compensation or
participation, working hours, conditions of employment or tenancy

between the employers and employees or between workers and owners

and the landowners or farm workers subject to the fulfillment of certain
requirements and conditions when it sees that the dispute could cause
results or a strike,
SEC. 13. (c) that in exercising its powers specified above, the Court
Industrial Relations is not limited, to decide the dispute, to grant the
remedy or remedies requested by the parties to the dispute, but may
include in any order or decision or determination relating to the purpose
of settling the dispute or to prevent further agricultural or industrial
disputes.
Shells Arguments:
The power of CIR to fix wages is subject to restrictions of law. Com. Act No.
444 expressly specified those items where payment of extra compensation
is authorized:
for "overtime" or work in excess of regular hours for emergency imposed
during any disaster or accident, or to avoid loss or repair, (b) for work on
Sundays and holidays, (c) in case of emergency,
There is nothing that relates to the work done at night, then the order in
question is illegal because not authorized by law ( expressio unius est
exclusio alterius).
SC:
The argument of Shell is mistaken. Law No. 444 does not apply to this
case, it is evident that it has a specific objective, namely: (a) set at 8 hours
the maximum working day, (b) at some exceptional cases employees could
be allowed Work off the day, (c) provide increment, which must be not less
than 25% of regular salary for the "overtime" or work in excess of 8 hours.
The work required by Shell is not covered by the overtime of Com Act. 444
since the work which is the subject of controversy in this case is not
overtime but a full day of work for 8 hours, done at night or in night shift.
Hence, if CIR has the authority to fix wages for the work done during the
day, it also has the authority to fix wages done at night.
(Work Day- 24-hr period commencing from the time an employee regularly
starts to work regardless of whether the work is broken or continuous. It
may not coincide with a calendar day. -Beda Reviewer)
WON those who work at night are entitled to 50% additional
compensation?(YES)

SC discussed a lot of issues about the pernicious effect of working at night

justifying the award of additional 50% to the compensation of affected
workers, affirming the decision of CIR.
Conclusion of SC
The case against nightwork, then, may be said to rest upon several
grounds. In the first place, there are the remotely injurious effects of
permanent nightwork manifested in the later years of the worker's life. Of
more immediate importance to the average worker is the disarrangement
of his social life, including the recreational activities of his leisure hours and
the ordinary associations of normal family relations. From an economic
point of view, nightwork is to be discouraged because of its adverse effect
upon efficiency and output. A moral argument against nightwork in the
case of women is that the night shift forces the workers to go to and from
the factory in darkness. Recent experiences of industrial nations have
added much to the evidence against the continuation of nightwork, except
in extraordinary circumstances and unavoidable emergencies. The
immediate prohibition of nightwork for all laborers is hardly practicable; its
discontinuance in the case of women employees is unquestionably
desirable. 'The night was made for rest and sleep and not for work' is a
common saying among wage-earning people, and many of them dream of
an industrial order in which there will be no night shift. (Labor Problems,
3rd Edition, pp. 325-328, by Watkins & Dodd.).
[G.R. No. L-48437. September 30, 1986.]
MANTRADE/FMMC DIVISION EMPLOYEES AND WORKERS UNION
(represented by PHILIPPINE SOCIAL SECURITY LABOR UNION PSSLU Fed.
TUCP), Petitioner, v. ARBITRATOR FROILAN M. BACUNGAN and
MANTRADE DEVELOPMENT CORPORATION,Respondents.
Facts:
Petitoner Mantrade Union files a petition for certiorari and mandamus
against the respondent Voluntary Arbitrator Bancungan and Mantrade
Development.
The voluntary arbitrator ruled that Mantrade Development Corporation is
not under legal obligation to pay holiday pay (as provided for in Article 94
of the Labor Code in the third official Department of Labor edition) to its
monthly paid employees who are uniformly paid by the month,
irrespective of the number of working days therein, with a salary of not
less than the statutory or established minimum wage.
The respondent raised its objection that the petitioner is barred from
pursuing the present action in view of Article 263 of the Labor Code, which

provides in part that "voluntary arbitration awards or decisions shall be

final, inappealable, and executory," as well as the rules implementing the
same; the pertinent provision of the Collective Bargaining Agreement
between petitioner and respondent corporation; and Article 2044 of the
Civil Code which provides that "any stipulation that the arbitrators award
or decision shall be final, is valid, without prejudice to Articles 2038, 2039,
and 2040. ." (Respondent corporation further contends that the special
civil action of certiorari does not lie because respondent arbitrator is not
an "officer exercising judicial functions" within the contemplation of Rule
65, Section 1, of the Rules of Court; that the instant petition raises an error
of judgment on the part of respondent arbitrator and not an error of
jurisdiction; that it prays for the annulment of certain rules and regulations
issued by the Department of Labor, not for the annulment of the voluntary
arbitration proceedings; and that appeal by certiorari under Section 29 of
the Arbitration Law, Republic Act No. 876, is not applicable to the case at
bar because arbitration in labor disputes is expressly excluded by Section 3
of said law.)
Issue: 1. WON the decision of the Voluntary Arbitrator is Final.
2. WON A CERTIORARI is applicable to the instant case.
Held: 1. NO. "We agree with the petitioner that the decisions of voluntary
arbitrators must be given the highest respect and as a general rule must be
accorded a certain measure of finality.
It is not correct, however, that this respect precludes the exercise of
judicial review over their decisions. Article 262 of the Labor Code making
voluntary arbitration awards final, inappealable and executory, except
where the money claims exceed P100,000.00 or 40% of the paid-up capital
of the employer or where there is abuse of discretion or gross
incompetence refers to appeals to the National Labor Relations
Commission and not to judicial review.
In spite of statutory provisions making final the decisions of certain
administrative agencies, we have taken cognizance of petitions
questioning these decisions where want of jurisdiction, grave abuse of
discretion, violation of due process, denial of substantial justice, or
erroneous interpretation of the Law were brought to our attention. . . .
2. YES. A voluntary arbitrator by the nature of her functions acts in a quasijudicial capacity. There is no reason why her decisions involving

interpretation of law should be beyond this Courts review. Administrative

officials are presumed to act in accordance with law and yet we do not
hesitate to pass upon their work where a question of law is involved or
where a showing of abuse of discretion in their official acts is properly
raised in petitions for certiorari."

Wellington Investment and Manufacturing Corp., vs Trajano

G.R. No. 114698
July 3, 1995
SECOND DIVISION, NARVASA, C.J.:
Facts:
The case arose from a routine inspection conducted by a Labor
Enforcement Officer on August 6, 1991 of the Wellington Flour Mills, an
establishment owned and operated by petitioner Wellington Investment
and Manufacturing Corporation (hereafter, simply Wellington). The officer
thereafter drew up a report, a copy of which was "explained to and
received by" Wellington's personnel manager, in which he set forth his
finding of "(n)on-payment of regular holidays falling on a Sunday for
monthly-paid employees." 1
Wellington sought reconsideration of the Labor Inspector's report, by
letter dated August 10, 1991. However, respondents arguments failed to
persuade the Regional Director who, in an Order issued on July 28, 1992,
ruled and accordingly directed Wellington to pay its employees
compensation corresponding to four (4) extra working days. 4Wellington
timely filed a motion for reconsideration of this Order of August 10, 1992.
5 Its motion was treated as an appeal and was acted on by respondent
Undersecretary. By Order dated September 22, the latter affirmed the
challenged order of the Regional Director." 6 Again, Wellington moved for
reconsideration, 7 and again was rebuffed. 8
Wellington then instituted the special civil action of certiorari at bar in an
attempt to nullify the orders above mentioned. By Resolution dated July 4,
1994, this Court authorized the issuance of a temporary restraining order
enjoining the respondents from enforcing the questioned orders. 9
Issue:
Whether a monthly-paid employee, receiving a fixed monthly
compensation, is entitled to an additional pay aside from his usual holiday
pay, whenever a regular holiday falls on a Sunday
Held:
Every worker should, according to the Labor Code, 10 "be paid his regular
daily wage during regular holidays, except in retail and service

establishments regularly employing less than ten (10) workers;" this, of

course, even if the worker does no work on these holidays. Particularly as
regards employees "who are uniformly paid by the month, "the monthly
minimum wage shall not be less than the statutory minimum wage
multiplied by 365 days divided by twelve." 12 This monthly salary shall
serve as compensation "for all days in the month whether worked or not,"
and "irrespective of the number of working days therein." 13. So, too, in
the event of the declaration of any special holiday, or any fortuitous cause
precluding work on any particular day or days (such as transportation
strikes, riots, or typhoons or other natural calamities), the employee is
entitled to the salary for the entire month and the employer has no right
to deduct the proportionate amount corresponding to the days when no
work was done. The monthly compensation is evidently intended precisely
to avoid computations and adjustments resulting from the contingencies
just mentioned which are routinely made in the case of workers paid on
daily basis.
In Wellington's case, no issue that to this extent, it complied with the
minimum norm laid down by law. Apparently the monthly salary was fixed
by Wellington to provide for compensation for every working day of the
year including the holidays specified by law and excluding only Sundays.
In fixing the salary, Wellington used what it calls the "314 factor;" that is to
say, it simply deducted 51 Sundays from the 365 days normally comprising
a year and used the difference, 314, as basis for determining the monthly
salary. The monthly salary thus fixed actually covers payment for 314 days
of the year, including regular and special holidays, as well as days when no
work is done by reason of fortuitous cause, as above specified, or causes
not attributable to the employees.
There is no provision of law requiring any employer to make such
adjustments in the monthly salary rate set by him to take account of legal
holidays falling on Sundays in a given year, or, contrary to the legal
provisions bearing on the point, otherwise to reckon a year at more than
365 days. As earlier mentioned, what the law requires of employers opting
to pay by the month is to assure that "the monthly minimum wage shall
not be less than the statutory minimum wage multiplied by 365 days
divided by twelve," 17 and to pay that salary "for all days in the month
whether worked or not," and "irrespective of the number of working days
therein." 18 That salary is due and payable regardless of the declaration of
any special holiday in the entire country or a particular place therein, or
any fortuitous cause precluding work on any particular day or days (such as
transportation strikes, riots, or typhoons or other natural calamities), or
cause not imputable to the worker. And as also earlier pointed out, the

legal provisions governing monthly compensation are evidently intended

precisely to avoid re-computations and alterations in salary on account of
the contingencies just mentioned, which, by the way, are routinely made
between employer and employees when the wages are paid on daily basis.
Decision:
In promulgating the orders complained of the public respondents have
attempted to legislate, or interpret legal provisions in such a manner as to
create obligations where none are intended. They have acted without
authority, or at the very least, with grave abuse of their discretion. Their
acts must be nullified and set aside.
WHEREFORE, the orders complained of, namely: that of the respondent
Undersecretary dated September 22, 1993, and that of the Regional
Director dated July 30, 1992, are NULLIFIED AND SET ASIDE, and the
proceeding against petitioner DISMISSED. SO ORDERED.
Regalado, Puno and Mendoza, JJ., concur

G.R. No. 146775. January 30, 2002

SAN MIGUEL CORPORATION, petitioner,
vs.
THE HONORABLE COURT OF APPEALS-FORMER THIRTEENTH DIVISION, HON.
UNDERSECRETARY JOSE M. ESPAOL, JR., Hon. CRESENCIANO B. TRAJANO,
and HON. REGIONAL DIRECTOR ALLAN M. MACARAYA, respondents.
Facts:
The Department of Labor and Employment conducted a routine inspection
in San Miguel Corporation, Iligan City and it was discovered that there was
underpayment by SMC of regular Muslim holiday pay to its employees.
DOLE sent a copy of inspection result to SMC which the latter contested
the findings. SMC failed to submit proof and hence the Director of DOLE of
Iligan District Office issued a compliance order to pay both its Muslim and
non-Muslim employees the Muslim Holidays. SMC appealed to DOLE main
office but dismissed for having been filed late but later on reconsidered
because it is within reglementary period but still dismissed for lack of
merit. Hence, this present petition for certiorari.
Issue:
Whether or not non-Muslim employees working in Muslim areas is entitled
to Muslim Holiday Pay.
Held:
The Supreme Court dismissed the petition and ordered the petitioner to
pay its non-Muslim employees. The basis for this decision were Articles

169 and 170 of P.D. No. 1083 Code of Muslim Personal Laws which listed
all official Muslim holidays and provincies and cities where officially
observed. In this case, SMC is located in Iligan which is covered in the
those provisions. Also Article 169 and 170 of PD No. 1083 should be read
in conjunction with Article 94 of Labor Code which provides for the right of
every worker to be paid of holiday pay.

incentive pay; (f) 13th month pay; and (g) benefits provided for under
Wage Orders Nos. 1, 2, 3, 4 and 5.
Labor Arbiter rendered judgment in favor of complainants. The NLRC
affirmed the arbiters decision.
Petitioner urged that the NLRC erred in concluding that an employeremplyee relationship existed between petitioner and the workers.

Petitioner asserts Art.3(3) of PD No. 1083 provides that it shall be

applicable only to Muslims. However, the Court said that said article
declares that nothing herein shall be construed to operate to the prejudice
of a non-Muslim. There should be no distinction between Muslims and
non-Muslims as regards payment of benefits for Muslim holidays.

ISSUE: Whether employees paid on piece-rate basis are entitled to service

incentive pay.

It was said also that the The Court of Appeals did not err in sustaining
Undersecretary Espaol who stated: Assuming arguendo that the
respondents position is correct, then by the same token, Muslims
throughout the Philippines are also not entitled to holiday pays on
Christian holidays declared by law as regular holidays. We must remind the
respondent-appellant that wages and other emoluments granted by law to
the working man are determined on the basis of the criteria laid down by
laws and certainly not on the basis of the workers faith or religion.
MAKATI HABERDASHERY, INC., vs. NATIONAL LABOR RELATIONS
COMMISSION
G.R. Nos. 83380-81 November 15, 1989
FACTS:
Individual complainants have been working for petitioner Makati
Haberdashery, Inc. as tailors, seamstress, sewers, basters (manlililip) and
"plantsadoras". They are paid on a piece-rate basis except Maria Angeles
and Leonila Serafina who are paid on a monthly basis. In addition to their
piece-rate, they are given a daily allowance of three (P 3.00) pesos
provided they report for work before 9:30 a.m. everyday. Private
respondents are required to work from or before 9:30 a.m. up to 6:00 or
7:00 p.m. from Monday to Saturday and during peak periods even on
Sundays and holidays.
The Sandigan ng Manggagawang Pilipino, a labor organization of the
respondent workers, filed a complaint for (a) underpayment of the basic
wage; (b) underpayment of living allowance; (c) non-payment of overtime
work; (d) non-payment of holiday pay; (e) non-payment of service

RULING:
The facts at bar indubitably reveal that the most important requisite of
control is present. As gleaned from the operations of petitioner, when a
customer enters into a contract with the haberdashery or its proprietor,
the latter directs an employee who may be a tailor, pattern maker, sewer
or "plantsadora" to take the customer's measurements, and to sew the
pants, coat or shirt as specified by the customer. Supervision is actively
manifested in all these aspects the manner and quality of cutting,
sewing and ironing.
Petitioner has reserved the right to control its employees not only as to
the result but also the means and methods by which the same are to be
accomplished. That private respondents are regular employees is further
proven by the fact that they have to report for work regularly from 9:30
a.m. to 6:00 or 7:00 p.m. and are paid an additional allowance of P 3.00
daily if they report for work before 9:30 a.m. and which is forfeited when
they arrive at or after 9:30 a.m.
The workers did not exercise independence in their own methods, but on
the contrary were subject to the control of petitioners from the beginning
of their tasks to their completion. Unlike independent contractors who
generally rely on their own resources, the equipment, tools, accessories,
and paraphernalia used by private respondents are supplied and owned by
petitioners. Private respondents are totally dependent on petitioners in all
these aspects.
The piece-rate workers in the case at bar are employees which fall under
exceptions set forth in the implementing rules and therefore not entitled
to service incentive leave and holiday pay.

NO SENTINEL SECURY AGENCY VS NLRC