103. Paguio vs NLRC, G.R. No. 147816, May 9, 2013

Facts:

On June 22, 1992, respondent Metromedia Times Corporation entered into a contract with petitioner Efren P. Paguio, appointing the latter to be an account executive and to solicit advertisements for “The Manila Times.” Petitioner was to receive compensation consisting of a 15% commission on direct advertisements less withholding tax and a 10% commission on agency advertisements based on gross revenues less agency commission and the corresponding withholding tax. The commissions, released every fifteen days of each month, were to be given to petitioner only after the clients would have paid for the advertisements. Apart from commissions, petitioner was also entitled to a monthly allowance of P2,000.00 as long as he met the P30,000.00-monthly quota.

It was stipulated in the contract that the petitioner is not an employee of the company nor does the company have any obligations anyone the petitioner may employ, nor any responsibility for the operating expenses or liabilities he may incur. Also, it was stipulated that either party may terminate the contract at any time by giving written notice to the other.

On August 15, 1992, petitioner received notice from the firm that he has been terminated from service.

Issue:

Whether or not petitioner’s dismissal is legal.

Held:

YES. A regular employment, whether it is one or not, is aptly gauged from the concurrence, or the non-concurrence, of the following factors - a) the manner of selection and engagement of the putative employee, b) the mode of payment of wages, c) the presence or absence of the power of dismissal; and d) the presence or absence of the power to control the conduct of the putative employee or the power to control the employee with respect to the means or methods by which his work is to be accomplished. The "control test" assumes primacy in the overall consideration. Under this test, an employment relation obtains where work is performed or services are rendered under the control and supervision of the party contracting for the service, not only as to the result of the work but also as to the manner and details of the performance desired.

The law, in defining their contractual relationship, does so, not necessarily or exclusively upon the terms of their written or oral contract, but also on the basis of the nature of the work petitioner has been called upon to perform. The law affords protection to an employee, and it

will not countenance any attempt to subvert its spirit and intent. A stipulation in an agreement can be ignored as and when it is utilized to deprive the employee of his security of tenure.

A lawful dismissal must meet both substantive and procedural requirements; in fine, the dismissal must be for a just or authorized cause and must comply with the rudimentary due process of notice and hearing. It is not shown that respondent company has fully bothered itself with either of these requirements in terminating the services of petitioner. The notice of termination recites no valid or just cause for the dismissal of petitioner nor does it appear that he has been given an opportunity to be heard in his defense.

104. Great Pacific Life Assurance Corp. (Grepalife) vs. Judico

Facts:

Honorato Judico filed a complaint for illegal dismissal against Grepalife, a duly organized insurance firm. Grepalife admits that Judico entered into an agreement with them to become a debit agent. According to Grepalife, a debit agent is an insurance agent who has definite work assignments including but not limited to collection of premiums from policyholders and selling insurance to prospective agent.

Judico was promoted to the position of Zone Supervisor and was given an additional supervisor’s allowance fixed at Php 110.00 per week. However, on November 1981, he was reverted to his former position as debit agent but, for unknown reasons, not paid so-called weekly sales reserve of at Php 200.00. On June 1982, Judico was dismissed by way of termination of his agency contract.

Petitioner argued that respondent was not an employee and that the compensation was not based on any fixed number of hours he was required to devote to the service of the company by rather it was the production or result of his efforts or his work that was being compensated.

Respondent Judico’s argued that he received a definite amount as his wage known as “sales reserve” the failure to maintain the same would bring him back to a beginner’s employment with a fixed weekly wage of Php 200.00 regardless of production.

Issue:

Whether or not employee-employer relationship existed between the parties.

Held:

Yes. Aan insurance company may have two classes of agents who sell its insurance policies: (1) salaried employees who keep definite hours and work under the control and supervision of the company; and (2) registered representatives who work on commission basis. The agents who belong to the second category are not required to report for work at anytime, they do not have to devote their time exclusively to or work solely for the company since the time and the effort they spend in their work depend entirely upon their own will and initiative; they are not required to account for their time nor submit a report of their activities; they shoulder their own selling expenses as well as transportation; and they are paid their commission based on a certain percentage of their sales. One salient point in the determination of employer-employee relationship which cannot be easily ignored is the fact that the compensation that these agents on commission received is not paid by the insurance company but by the investor (or the

person insured). After determining the commission earned by an agent on his sales the agent directly deducts it from the amount he received from the investor or the person insured and turns over to the insurance company the amount invested after such deduction is made. The test therefore is whether the "employer" controls or has reserved the right to control the "employee" not only as to the result of the work to be done but also as to the means and methods by which the same is to be accomplished.

Applying the aforementioned test to the case at bar, we can readily see that the element of control by the petitioner on Judico was very much present. The record shows that petitioner Judico received a definite minimum amount per week as his wage known as "sales reserve" wherein the failure to maintain the same would bring him back to a beginner's employment with a fixed weekly wage of P 200.00 for thirteen weeks regardless of production. He was assigned a definite place in the office to work on when he is not in the field; and in addition to his canvassing work he was burdened with the job of collection. In both cases he was required to make regular report to the company regarding these duties, and for which an anemic performance would mean a dismissal. Conversely faithful and productive service earned him a promotion to Zone Supervisor with additional supervisor's allowance, a definite amount of P110.00 aside from the regular P 200.00 weekly "allowance". Furthermore, his contract of services with petitioner is not for a piece of work nor for a definite period.

On the other hand, an ordinary commission insurance agent works at his own volition or at his own leisure without fear of dismissal from the company and short of committing acts detrimental to the business interest of the company or against the latter, whether he produces or not is of no moment as his salary is based on his production, his anemic performance or even dead result does not become a ground for dismissal. Whereas, in private respondent's case, the undisputed facts show that he was controlled by petitioner insurance company not only as to the kind of work; the amount of results, the kind of performance but also the power of dismissal. Undoubtedly, private respondent, by nature of his position and work, had been a regular employee of petitioner and is therefore entitled to the protection of the law and could not just be terminated without valid and justifiable cause.

109. Makati Haberdashery, Inc. vs. National Labor Relations Commission, G.R. Nos. 83380-81, November 15,1989-

Facts:

Individual complainants have been working for Makati Haberdashery, Inc. as tailors, seamsters, sewers, basters and “plantsadoras”. They were paid on a piece-rate basis except the two who were paid on a monthly basis. In addition to their piece-rate, they were given a daily allowance of three (P3.00) pesos provided they report for work before 9:30 a.m. everyday. They were 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 filed a complaint for underpayment of the basic wage, underpayment of living allowance, non-payment of overtime work, non-payment of holiday pay, and other money claims.

The labor arbiter rendered judgement in favor of complainants which the NLRC affirmed.

Petitioner [employer] urged that the NLRC erred in concluding that an employer-employee relationship existed between petitioner and the workers.

Issue: Whether or not piece-rate workers are employees

Ruling:

The facts at bar indubitably reveal that the most important requisite of control is present. 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 measurement and to sew the pants, coat or shirt as specified by the customer. Supervision is actively manifested in all these acts – 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. Unlike independent contractors who generally rely on their own resources, the equipment, tools, accessories and paraphernalia used by the workers are supplied and owned by the Haberdashery. The workers are totally dependent on the employer in all theses aspects.

110. Caurdanetaan Piece Workers Union vs. Undersecretary Bienvenido E. Laguesma and Corfarm Grains, Inc., G.R. No. 113542, February 24, 1998 –

Facts:

The complainants worked as ‘cargador’ at the warehouse and ricemills of private respondent Corfarm at Umingan, Pangasinan since 1982. As cargadores, they loaded, unloaded and piled sacks of palay from the warehouse to the cargo trucks and those brought by cargo trucks for delivery to different places. They were paid by Corfarm on a piece-rate basis. When Corfarm denied them some benefits, they formed their union. Corfarm replaced them with non-members of the union.

Respondent Corfamr denies that ut had the power to control over the complainants, rationalizing that they were ‘street-hired’ workers engaged from time to time to do loading and unloading work; there was no superintendent-in-charge to give orders; and there were no gate passes issued, nor tools, equipment and paraphernalia issued by Corfarm for loading/unloading. It attributes error to the solicitor’s general’s reliance on Article 280 [now 294] of the Labor Code. Citing Brent School, Inc. vs. Zamora (181 SCRA 702, February 5, 1990), it asserts that a literal application of such article will result in “absurdity”, where petitioner’s members will be regular employees not only of respondents but also of several other rice mills, where they allegedly also render service. Finally, Corfarm submits that the OSG’s position is negated by the fact “petitioner’s members contracted for loading and unloading services with respondent company when such work was available when they felt lik it x x x.”

Issue: Whether street-hired cargadores be considered as regular employees

Ruling:

The Court considers cargadores as regular employee. It is undeniable that petitioner’s members worked as cargadores for private respondent. They loaded, unloaded and pile sacks of palay from the warehouses to the cargo trucks and from the cargo trucks to the buyers. This work is directly related, necessary and vital to the operations of Corfarm. Moreover, Corfarm did not even allege, much less prove, that petitioner’s members have “substantial capital or

investment in the form of tools, equipment, machineries, and work premises among others.” Furthermore, said respondent did no contradict petitioner’s allegation that it paid wages directly to these workers without the intervention of any third-party independent contractor. It also wielded the power of dismissal over petitioners; in fact, its exercise of this power. Clearly, the workers are not independent contractors.

111. Ruga et. al vs. NLRC ,GR No. 72654-61, January 22, 1990

Facts:

Petitioners were the fishermen-crew members of 7/B Sandyman II, one of several fishing vessels owned and operated by private respondent De Guzman Fishing Enterprises which is primarily engaged in the fishing business with port and office at Camaligan, Camarines Sur. Petitioners rendered service aboard said fishing vessel in various capacities, as follows: Alipio Ruga and Jose Parma patron/pilot; Eladio Calderon, chief engineer; Laurente Bautu, second engineer; Jaime Barbin, master fisherman; Nicanor Francisco, second fisherman; Philip Cervantes and Eleuterio Barbin, fishermen.

For services rendered in the conduct of private respondent's regular business of "trawl" fishing, petitioners were paid on percentage commission basis in cash by one Mrs. Pilar de Guzman, cashier of private respondent. As agreed upon, they received thirteen percent (13%) of the proceeds of the sale of the fish-catch if the total proceeds exceeded the cost of crude oil consumed during the fishing trip, otherwise, they received ten percent (10%) of the total proceeds of the sale. The patron/pilot, chief engineer and master fisherman received a minimum income of P350.00 per week while the assistant engineer, second fisherman, and fisherman-winchman received a minimum income of P260.00 per week.

On September 11, 1983 upon arrival at the fishing port, petitioners were told by Jorge de Guzman, president of private respondent, to proceed to the police station at Camaligan, Camarines Sur, for investigation on the report that they sold some of their fish-catch at midsea to the prejudice of private respondent. Petitioners denied the charge claiming that the same was a countermove to their having formed a labor union and becoming members of Defender of Industrial Agricultural Labor Organizations and General Workers Union (DIALOGWU) on September 3, 1983.

During the investigation, no witnesses were presented to prove the charge against petitioners, and no criminal charges were formally filed against them.

Notwithstanding, private respondent refused to allow petitioners to return to the fishing vessel to resume their work on the same day, September 11, 1983.

On September 22, 1983, petitioners individually filed their complaints for illegal dismissal and non-payment of 13th month pay, emergency cost of living allowance and service incentive pay, with the then Ministry (now Department) of Labor and Employment, Regional Arbitration Branch No. V, Legaspi City, Albay. They uniformly contended that they were arbitrarily

dismissed without being given ample time to look for a new job. Issue: Whether or not the fishermen-crew members of the trawl fishing vessel 7/B Sandyman II are employees of its owner-operator, De Guzman Fishing Enterprises.

Ruling:

Disputing the finding of public respondent that a "joint fishing venture" exists between private respondent and petitioners, petitioners claim that public respondent exceeded its jurisdiction and/or abused its discretion when it added facts not contained in the records when it stated that the pilot-crew members do not receive compensation from the boat-owners except their share in the catch produced by their own efforts; that public respondent ignored the evidence of petitioners that private respondent controlled the fishing operations; that public respondent did not take into account established jurisprudence that the relationship between the fishing boat operators and their crew is one of direct employer and employee.

We have consistently ruled that in determining the existence of an employer-employee relationship, the elements that are generally considered are the following (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer's power to control the employee with respect to the means and methods by which the work is to be accomplished. 8 The employment relation arises from contract of hire, express or implied. 9 In the absence of hiring, no actual employer-employee relation could exist.

From the four (4) elements mentioned, we have generally relied on the so-called right-of-control test where the person for whom the services are performed reserves a right to control not only the end to be achieved but also the means to be used in reaching such end. The test calls merely for the existence of the right to control the manner of doing the work, not the actual exercise of the right.

The petition is GRANTED. The questioned resolution of the National Labor Relations Commission dated May 30,1985 is hereby REVERSED and SET ASIDE. Private respondent is ordered to reinstate petitioners to their former positions or any equivalent positions with 3-year backwages and other monetary benefits under the law. No pronouncement as to costs.

112.

113.

114.

115.

116. Autobus transport system vs bautista (GR 156367, May 16 2005)

117. Union of Filipino Employees vs Vivar (GR 79255)

118. SAN MIGUEL BREWERY, INC V. DOMESTIC LABOR ORGANIZATION

FACTS:

The Democratic Labor Association filed complaint against the San Miguel Brewery, Inc. embodying 12 demands for the betterment of the conditions of employment of its members. The company filed its answer to the complaint specifically denying its material averments and answering the demands point by point. The company asked for the dismissal of the complaint.

At the hearing, the union manifested its desire to confine its claim to its demands for overtime, night-shift differential pay, and attorney's fees, although it was allowed to present evidence on service rendered during Sundays and holidays, or on its claim for additional separation pay and sick and vacation leave compensation.

After the case had been submitted for decision, the Presiding Judge held that the employees are entitled to the additional compensation provided in the Eight Hour Labor Law, night-shift differential pay and additional compensation on work done during Sunday or holiday. The motion for reconsideration of the petitioner was denied by the industrial court en banc, which affirmed the decision of the court a quo with few exceptions, the San Miguel Brewery, Inc. interposed the present petition for review.

ISSUE:

Whether or not the employees are entitled to the benefits of Eight Hour Labor Law.

RULING:

The Eight-Hour Labor Law only has application where an employee or laborer is paid on a monthly or daily basis, or is paid a monthly or daily compensation, in which case, if he is made to work beyond the requisite period of 8 hours, he should be paid the additional compensation prescribed by law. This law has no application when the employee or laborer is paid on a piece-work, "pakiao", or commission basis, regardless of the time employed. The philosophy behind

this exemption is that his earnings in the form of commission based on the gross receipts of the day. His participation depends upon his industry so that the more hours he employs in the work the greater are his gross returns and the higher his commission.

The Department of Labor, called upon to implement, the Eight-Hour Labor Law, is of this opinion when on December 9, 1957 it made the ruling on a query submitted to it, thru the Director of the Bureau of Labor Standards, to the effect that field sales personnel receiving regular monthly salaries, plus commission, are not subject to the Eight-Hour Labor Law. Thus, on this point, said official stated:

. . . Moreover, when a fieldman receives a regular monthly salary plus commission on percentage basis of his sales, it is also the established policy of the Office to consider his commission as payment for the extra time he renders in excess of eight hours, thereby classifying him as if he were on piecework basis, and therefore, technically speaking, he is not subject to the Eight-Hour Labor Law.

The Supreme Court held that the industrial court erred in holding that the Eight-Hour Labor Law applies to the employees composing the outside service force and in ordering that they be paid the corresponding additional compensation. The rest of the decision insofar as work performed on Sundays and holidays as well as the award for night salary differentials, is affirmed.

119. Abundio Cadiz vs Philippine Sinter Corporation

120. Rosales vs Tan Que

121. Adriano Quintos vs D.D. transport Co., Inc.

122. Lara vs Del Rosario (L-6339)

123. Manila terminal Co. vs CIR (L-4148)

124. Interphil laboratories employees union –FFW vs Interphil Laboratories (142824)

125.Pan American world airways system vs. Pan American Employees Association (L-16275)

126. Jose gayona vs Good earth emporium and supermarket

127. University of Pangasinan Faculty Union vs. University of Pangasinan, No. L-63122, February 20, 1984

DOCTRINE:

Regular full-time monthly paid teachers in private school are entitled to salary and emergency cost-of-living allowance during semestral breaks.

FACTS:

The petitioner is a labor union composed of full-time faculty members of the respondent University of Pangasinan paid on a regular monthly basis. The petitioner filed a claim with the NLRC for respondent’s non-payment of the ECOLA (emergency cost-of-living allowance) during the semestral break. The private respondent 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" applies.

ISSUE:

Whether or not the petitioners are entitled to ECOLA during the semestral break?

RULING:

Yes, the petitioners are entitled to receive ECOLA during the semestral break.

It is beyond dispute that the petitioner’s members are full-time employees receiving their monthly salaries irrespective of the number of working days or teaching hours in a month. However, they find themselves in a most peculiar situation whereby they are forced to go on leave during semestral breaks. These semestral breaks are in the nature of work interruptions beyond the employees’ control. The duration of the semestral break varies from year to year dependent on a variety of circumstances affecting at times only the private respondent but at other times all educational institutions in the country. As such, these breaks cannot be considered as absences within the meaning of the law for which deductions may be made from monthly allowances. The "No work, no pay" principle does not apply in the instant case. The petitioner’s members received their regular salaries during this period. 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 not the intention of the framers of the law to allow employers to withhold employee benefits by the simple expedient of unilaterally imposing "no work" days and consequently avoiding compliance with the mandate of the law for those days.

The semestral break scheduled is an interruption beyond petitioner’s control and it cannot be used "effectively nor gainfully in the employee’s interest’. Thus, the semestral break may also be considered as "hours worked." For this, the teachers are paid regular salaries and, for this, they should be entitled to ECOLA. Not only do the teachers continue to work during this short recess but much less do they cease to live for which the cost of living allowance is intended. 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 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. Significantly, it is the commitment of the State to protect labor and to provide means by which the difficulties faced by the working force may best be alleviated. To submit to the respondents’ interpretation of the no work, no pay policy is to defeat this noble purpose. The Constitution and the law mandate otherwise.

128. Luzon Stevedoring Co., Inc. vs. Luzon Marine Department Union, G.R. No. L-9265, April 29, 1957

DOCTRINE:

A laborer need not leave the premises of the factory, shop or boat in order that his period of rest shall not be counted, it being enough that he “ceases to work,” may rest completely and leave or may leave at his will the spot where he actually stays while working to go somewhere else, whether within or outside the premises of said factory, shop or boat. The period of such reach shall not be counted as hours worked.

FACTS:

Petitioner is a corporation engaged in the operation of motor tugboats and employment of officers, engineers and crewmembers to work thereat. The seamen union declared a strike against the corporation for several issues including the nonpayment of overtime pay despite the fact that they are being required to report for 12 hours from 6:00 am to 6:00pm.

ISSUE:

Whether or not the hours that a seaman stayed onboard a vessel without actually working could be considered as hours worked?

RULING:

No, the hours that a seaman stayed onboard a vessel without performing actual working could not be considered as hours worked. Hence, the seamen in this case are not entitled to overtime pay even though they stayed in the motorboat beyond eight hours.For the purposes of this case, the Supreme Court said that it do not need to set for seamen a criterion different from that applied to laborers on land. The only thing to be done is to determine the meaning and scope of the term "working place" used in the law. A laborer need not leave the premises of the factory, shop or boat in order that his period of rest shall not be counted, it being enough that he "cease to work", may rest completely and leave or may leave at his will the spot where he actually stays while working, to go somewhere else, whether within or outside the premises of said factory, shop or boat. If these requisites are complied with, the period of such rest shall not be counted.

129. Cagampan, et al. vs. NLRC, G.R. Nos. 85122-24, March 12, 1991

DOCTRINE:

A laborer need not leave the premises of the factory, shop or boat in order that his period of rest shall not be counter, it being enough that he “ceases to work,” may rest completely and leave or may leave at his will the spot where he actually stays while working to go somewhere else, whether within or outside the premises of said factory, shop or boat. The period of such reach shall not be counted as hours worked.

FACTS:

Petitioners are seafarers who entered into separate contracts of employment with Golden Light Ocean Transport, Ltd. and were deployed thereafter. After they were discharged, petitioners filed complaints against the company for non-payment of overtime pay, vacation pay and terminal pay. The POEA found for the petitioners and the agency ordered the company to pay the petitioners their leave pay and overtime pay. On appeal, the NLRC found that the petitioners in this case is not entitled to overtime pay.

ISSUE:

Whether or not seafarers onboard the vessel without performing actual work is entitled to overtime pay?

RULING:

No, the hours that a seaman stayed onboard a vessel without performing actual working could not be considered as hours worked. Hence, the seamen in this case are not entitled to overtime pay even though they stayed in the motorboat beyond eight hours.

As regards the question of overtime pay, the NLRC cannot be faulted for disallowing the payment of said pay because it merely straightened out the distorted interpretation asserted by petitioners and defined the correct interpretation of the provision on overtime pay embodied in the contract conformably with settled doctrines on the matter. Notably, the NLRC ruling on the disallowance of overtime pay is ably supported by the fact that petitioners never produced any proof of actual performance of overtime work.

The Supreme Court also said that it can not agree with the Court below that peitioners should be paid overtime compensation for every hour in excess of the regular working hours that he was on board his vessel or barge each day, irrespective of whether or not he actually put in work during those hours. Seamen are required to stay on board their vessels by the very nature of their duties, and it is for this reason that, in addition to their regular compensation, they are given free living quarters and subsistence allowances when required to be on board. It could not have been the purpose of our law to require their employers to pay them overtime even when they are not

actually working; otherwise, every sailor on board a vessel would be entitled to overtime for sixteen hours each day, even if he spent all those hours resting or sleeping in his bunk, after his regular tour of duty. The correct criterion in determining whether or not sailors are entitled to overtime pay is not, therefore, whether they were on board and can not leave ship beyond the regular eight working hours a day, but whether they actually rendered service in excess of said number of hours.

130. National development company vs CIR (L-15422)

131. Sime darby pilipinas, inc., vs. NLRC (119205)

132.Mercury drug co., inc. vs nardo dayao (L-30452)

133. NATIONAL SHIPYARDS AND STEEL CORPORATION vs. CIR

DOCTRINE:

The correct criterion in determining whether or not sailors are entitled to overtime pay is not, therefore, whether they were on board and can not leave ship beyond the regular eight working hours a day, but whether they actually rendered service in excess of said number of hours.

FACTS:

The petitioner NASSCO, a government-owned and controlled corporation, is the owner of several barges and tugboats used in the transportation of cargoes and personnel in connection with its business of shipbuilding and repair. In order that its bargeman could immediately be called to duty whenever their services are needed, they are required to stay in their respective barges, for which reason they are given living quarters therein as well as subsistence allowance of P1.50 per day during the time they are on board. However, upon prior authority of their superior officers, they may leave their barges when said barges are idle.

The 39 crew members of petitioner's tugboat service, including therein respondent Dominador Malondras, filed a complaint for the payment of overtime compensation .In the course of the proceeding, the parties entered into a stipulation of facts wherein the NASSCO recognized and admitted -

4. That to meet the exigencies of the service in the performance of the above work, petitioners have to work when so required in excess of eight (8) hours a day and/or during Sundays and legal holidays (actual overtime service is subject to determination on the basis of the logbook of the vessels, time sheets and other pertinent records of the respondent).

6. The petitioners are paid by the respondent their regular salaries and subsistence allowance, without additional compensation for overtime work;

On February 20, 1960, the Court ordered the examiner to make a re-examination of the records with a view to determining Malondras' overtime service from January 1, 1954 to December 31, 1956, and from January 1, 1957 to April 30, 1957, but without deducting from the compensation to be paid to him his subsistence allowance. The examiner, on April 23, 1960, submitted a report giving Malondras an average of sixteen (16) overtime hours a day, on the basis of his time sheets, and recommending the payment to him of the total amount of P15,242.15 as overtime compensation during the periods covered by the report.

ISSUE:

Whether or not Malondras is entitled to the 16 hours overtime as a worker in a barge.

RULING:

The only matter to be determined here is, the number of hours of overtime for which Malondras should be paid for the periods January 1, 1954 to December 31, 1956, and from January to April 30, 1957. Respondents urge that this is a question of fact and not subject to review by this Court, there being sufficient evidence to support the Industrial Court's ruling on this point. It appears, however, that in crediting Malondras with 16 hours of overtime service daily for the periods in question, the court examiner relied only on his daily time sheets which, although approved by petitioner's officers in charge and its auditors, do not show the actual number of hours of work rendered by him each day.

We can not agree with the Court below that respondent Malondras should be paid overtime compensation for every hour in excess of the regular working hours that he was on board his vessel or barge each day, irrespective of whether or not he actually put in work during those hours. Seamen are required to stay on board their vessels by the very nature of their duties, and it is for this reason that, in addition to their regular compensation, they are given free living quarters and subsistence allowances when required to be on board. It could not have been the purpose of our law to require their employers to pay them overtime even when they are not actually working; otherwise, every sailor on board a vessel would be entitled to overtime for sixteen hours each day, even if he had spent all those hours resting or sleeping in his bunk, after his regular tour of duty.

While Malondras' daily time sheets do not show his actual working hours, nevertheless, petitioner has already admitted in the Stipulation of Facts in

this case that Malondras and his co-claimants did render service beyond eight (8) hours a day when so required by the exigencies of the service; and in fact, Malondras was credited and already paid for five (5) hours daily overtime work during the period from May 1 to December 31, 1957, under the examiner's first report. Since Malondras has been at the same job since 1954, it can be reasonably inferred that the overtime service he put in whenever he was required to be aboard his barge all day from 1954 to 1957 would be more or less consistent.

WHEREFORE, the order appealed from is modified in the sense that respondent Malondras should be credited five (5) overtime hours instead of sixteen (16) hours a day for the periods covered by the examiner's report.

134. PNB vs. PHILIPPINE NATIONAL BANK EMPLOYEES ASSOCIATION

Facts:

The case involves a 25 year dispute. PNB assails the decision of the Court of Industrial Relations pursuant to a jurisprudence (NAWASA vs NAWASA Consolidated Unions) that in the computation of overtime pay the cost of living pay and longevity pay be taken into account. PNB questions the ruling doctrine as well as asks the court for the correct interpretation of CA 444 or the eight hour law in the determination of the overtime pay.

Issue:

Whether or not the cost of living allowance and longevity pay be included in the computation of overtime pay

Held:The cost-of-living allowance began to be granted in 1958 and the longevity pay in 1981. In other words, they were granted by PNB upon realizing the difficult plight of its labor force in the face of the unusual inflationary situation in the economy of the country, which, however acute, was nevertheless expected to improve. There was thus evident an inherently contingent character in said allowances. They were not intended to be regular, much less permanent additional part of the compensation of the employees and workers. Also with the longevity pay; manifestly, this was not based on the daily or monthly amount of work done or service rendered it was more of a gratuity for their loyalty, or their having been in the bank's employment for consideration periods of time. What are decisive in determining the basis for the computation of overtime pay are two very germane considerations, namely, (1) whether or not the additional pay is for extra work done or service rendered and (2) whether or not the same is intended to be permanent and regular, not contingent nor temporary and given only to remedy a situation which can change any time. Overtime pay is for extra effort beyond that contemplated in the employment contract, hence when additional pay is given for any other purpose, it is illogical to include the same in the basis for the computation of overtime pay. This holding supersedes NAWASA.

135. BISIG NG MANGGAGAWA NG PHILIPPINE REFINING CO., INC vs.

PHILIPPINE REFINING CO., INC.,

DOCTRINE:

The ruling concerning the meaning of the phrase "regular pay" of the Eight-Hour Labor Law could be applied to employees of private corporations like the Philippine Refining Company, the same was, nevertheless, inapplicable to the case at bar which involved the interpretation of the phrase "regular base pay which was different from "regular pay". It declared that "regular base pay" referred only to the basic or monthly pay exclusive of Christmas bonus and other fringe benefits. Furthermore, the validity of the provision of the 1965 collective bargaining agreement concerning the computation of the employees' overtime pay on the basis of their "regular base pay" was upheld by the court for the reason that the same was even higher than the overtime pay prescribed by law. The court emphasized that contracts are binding on the parties insofar as they are not contrary to law, morals and public order

FACTS:

On April 15,1966, the Bisig ng Manggagawa ng Philippine Refining Company, Inc., as the representative union of the rank and file employees of the Philippine Refining Co., Inc., filed with the Court of First Instance of Manila a petition for declaratory relief praying, among others — That a declaratory judgment be rendered declaring and adjudicating the e rights and duties of petitioner and respondent under the above quoted provision of their Collective 13 - agreements and further declaring that the Christmas bonus of one month or thirty days pay and other de determinable benefits should be included for the purpose of computation of the overtime pay spread throughout the twelve months period of each year from August, 1963 up to the present and subsequently hereafter; and that respondent be therefore directed to pay such differential in the overtime pay of all the employees of the herein respondent ;

Petitioner union contended that the respondent company was under obligation to include the employees' Christmas bonus and other fringe benefits in the computation of their overtime pay by virtue of the ruling of this Court in the case of NAWASA vs. NAWASA Consolidated Unions

On May 3, 1966, the Philippine Refining Co.. Inc. filed its answer to the petition alleging, among others, that never did the parties intend, in the 1965 collective bargaining agreement and in prior agreements, to include the employees' Christmas bonus and other fringe benefits in the computation of the overtime pay and that the company precisely agreed to a rate of 50%, which is much higher than the 25% required by the Eight-Hour Labor Law (Commonwealth Act No. 444, as amended), on the condition that in computing the overtime pay only the "regular base pay" would be considered. Furthermore, respondent company contended that the ruling of this Court in the NAWASA case relative to the computation of overtime compensation could not be applied to its employees since it was a private corporation and not a government-owned or controlled corporation like the NAWASA.

Court of First Instance of Manila rendered a decision declaring that the term "regular base pay" in Section 6, Article VI of Exhibit A refers only to "regular base pay" and does not include Christmas bonus and other fringe benefits. Held that while the NAWASA ruling concerning the meaning of the phrase "regular pay" of the Eight-Hour Labor Law could be applied to employees of private corporations like the Philippine Refining Company, the same was, nevertheless, inapplicable to the case at bar which involved the interpretation of the phrase "regular base pay which was different from "regular pay". It declared that "regular base pay" referred only to the basic or monthly pay exclusive of Christmas bonus and other fringe benefits. Furthermore, the validity of the provision of the 1965 collective bargaining agreement concerning the computation of the employees' overtime pay on the basis of their "regular base pay" was upheld by the court for the reason that the same was even higher than the overtime pay prescribed by law. The court emphasized that contracts are binding on the parties insofar as they are not contrary to law, morals and public order.

This is an appeal from the decision of the Court of First Instance of Manila dated December 8, 1966, in Civil Case No. 65082, holding that Christmas bonus and other fringe benefits are excluded in the computation of the

overtime pay of the members of the appellant union under Section 6, Article VI of the 1965 collective bargaining agreement which reads as follows:

Overtime pay at the rate of regular base pay plus 50% thereof shag be paid for all work performed in excess of eight hours on ordinary days within the work week (that is to say, Monday to Friday).

ISSUE:

Whether or not the phrase "regular base pay" as used in the above-quoted provision of the 1965 CBA includes Christmas bonus and other fringe benefits?

HELD:

NO, the phrase "regular base pay" is clear, unequivocal and requires no interpretation. It means regular basic pay and necessarily excludes money received in different concepts such as Christmas bonus and other fringe benefits. In this connection it is necessary to remember that in the enforcement of previous collective bargaining agreements containing the same provision of overtime pay at the rate of regular base pay plus 50@'c thereof", the overtime compensation was invariably based only on the regular basic pay, exclusive of Christmas bonus and other tinge benefits. Appellant union knew all the while of such interpretation and precisely attempted to negotiate for a provision in the subject collective bargaining agreement that would include the Christmas bonus and other fringe benefits in the computation of the overtime pay. Significantly, the appellee company did not agree to change the phrase "regular base pay" as it could not consent to the inclusion of the fringe benefits in the computation of the overtime pay. Hence, the appellant union could not question the intended definition of the phrase but could only claim that the same violated the Nawasa doctrine and insist that the phrase should be redefined to conform to said doctrine.

In the case at bar, it is admitted that the contractual formula of "regular base pay plus 50% thereof" yields an overtime compensation which is higher than the result in applying the statutory formula as elaborated in the Nawasa case. Consequently, its validity is upheld and the parties are enjoined to accord due respect to it.

Decision appealed from is hereby affirmed in all respects.

136. Pampanga sugar development co. vs CIR (L-139987)

137. NWSA vs NWSA consolidated unions

138. Rodrigo Sto. Domingo vs phil rock Products

139. FELIPE DE LEON et. al v. PAMPANGA SUGAR DEVELOPMENT CO., INC.

20 SCRA 628 (art. 91-93)

SYLLABUS:

LABOR LAW; WEEKLY REST DAY; Every employer shall give his employees a rest period of not less than twenty-four (24) consecutive hours after every six consecutive normal work days. The rest day or day off shall be determined by the employer subject to CBA and to such rules and regulations as the Secretary of labor may provide. The preference of the employee shall be respected by the employer if the same is based on religious grounds.

same; COMPENSATION FOR REST DAY, SUNDAY OR HOLIDAY; Where an employee is permitted to work on his scheduled rest day, he shall be paid an additional compensation of at least 30% (then 25% based on C.A. 444) of his regular wage. An employee shall be entitled to such additional compensation for work performed on Sunday only when it is his established rest day.

FACTS:

Petitioners were the company’s 21 security guards who were required to work 8 hours a day, seven days a week. They filed with the CIR a complaint seeking payment to them an additional 25% compensation for work performed on Sundays and holidays as provided by law.

ISSUE:

WON the petitioners were entitled to premium or differential based on their claim.

HELD:

For employees paid on a monthly basis, the first 100% (of the 125%) corresponding to the regular remuneration may or may not be included in the monthly salary. If it is, then the employee is entitled to collect only the premium of 30%. If it is not, then the employee has the right to receive the entire 130%.

The regular remuneration of 100% is already included in the computation of monthly salaries. And that there is a factual findings of the trial court, that the “petitioners were paid their monthly salaries plus 25% additional compensation for work performed on Sundays and holidays.” The findings of fact of the CIR are conclusive to the Court

140. JOSE RIZAL COLLEGE v. NLRC and NATOW G.R. 65482 dated 1 Dec. 1987(art. 94)

SYLLABUS:

LABOR LAW; HOLIDAY and HOLIDAY PAYS; ARTICLE 8

FACTS:

Petitioner is a non-stock, non-profit educational institution duly organized and existing under the laws of the Philippines. It has three groups of employees categorized as follows: (a) personnel on monthly basis, who receive their monthly salary uniformly throughout the year, irrespective of the actual number of working days in a month without deduction for holidays; (b) personnel on daily basis who are paid on actual days worked and they receive unworked holiday pay and (c) collegiate faculty who are paid on the basis of student contract hour. Before the start of the semester they sign contracts with the college undertaking to meet their classes as per schedule. Unable to receive their corresponding holiday pay, as claimed, from 1975 to 1977.

ISSUE:

The sole issue in this case is whether or not the school faculty who according to their contracts are paid per lecture hour are entitled to unworked holiday pay.

HELD:

Petitioner maintains the position among others, that it is not covered by Book V of the Labor Code on Labor Relations considering that it is a non- profit institution and that its hourly paid faculty members are paid on a "contract" basis because they are required to hold classes for a particular number of hours.

if a regular week day is declared a holiday, the school calendar is extended to compensate for that day. Thus petitioner argues that 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.

Regular holidays specified as such by law are known to both school and faculty members as no class days;" certainly the latter do not expect payment for said unworked days, and this was clearly in their minds when they entered into the teaching contracts.

On the other hand, both the law and the Implementing Rules governing holiday pay are silent as to payment on Special Public Holidays.

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.

PREMISES CONSIDERED, the decision of respondent National Labor Relations Commission is hereby set aside, and a new one is hereby RENDERED:

(a) exempting petitioner 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;

(b) but ordering petitioner to pay said faculty members their regular hourly rate on days declared as special holidays or for some reason classes are called off or shortened for the hours they are supposed to have taught, whether extensions of class days be ordered or not; in case of extensions said faculty members shall likewise be paid their hourly rates should they teach during said extensions.

141. SAN MIGUEL CORP. V. CA G.R. 146775 dated 30 January 2002

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.

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.

It was said also that the The Court of Appeals did not err in sustaining Undersecretary Español who stated: “Assuming arguendo that the respondent’s 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 worker’s faith or religion.”

142. Insular bank of asia and American employees union vs Inciong (L-52415)

143. the chartered bank employees association vs. Hon Blas OPLE (L-44717)

144. Obango vs NLRC (L-147420)

145 Union of Filipro Employees vs Benigno vivar (79255)

146 Wellington Investment and Manufacturing Corporation

147 Jose rizal College vs NLRC (65482)

148 Baltazar vs San Miguel brewery (L- 23076)

149 Davao integrated port stevedoring services vs abarquez

150 Kwok vs Philippine Carpet Manufacturing Corp. 102132

151. SONGCO ET. AL VS NLRC

DOCTRINE

Applying this by analogy, since the commissions in the present case were earned by actual market transactions attributable to petitioners, these should be included in their separation pay

FACTS

F.E. Zuellig Inc. filed with the Department of Labor an application seeking clearance to terminate the services of Jose Songco, Romeo Cipres and Amancio Manuel on the ground of retrenchment due to financial losses. It was opposed by the petitioners because they claim that the company is not suffering any loss. The further claim that they were terminated because of their membership in the union. However, on the last hearing of the case, the petitioners manifested that they are no longer contesting their dismissal. The petitioners were part of the sales force of Zuellig and were receiving P40,000 plus their commission for every sale that they were able to make.

ISSUE

Whether or not earned sales commissions and allowances should be included in the monthly salary of petitioners for the purpose of computation of their separation pay?

RULING

Yes, insofar as whether the allowances should be included in the monthly salary of petitioners for the purpose of computation of their separation pay is concerned, this has been settled in the case of Santos vs. NLRC, 76721, in the computation of backwages and separation pay, account must be taken not only of the basic salary of petitioner but also of her transportation and emergency living allowances. In the issue of whether commission should be included in the computation of their separation pay, it is proper to define first commission. Black’s Law Dictionary defined commission as the recompensed, compensation or reward of an agent, salesman, executor, trustees, receiver, factor, broker or bailee, when the same is calculated as a percentage on the amount of his transactions or on the profit to the principal. The nature of the work of a salesman and the reason for such type of remuneration for services rendered demonstrate clearly that the commission are part of petitioners’ wage and salary. Some salesmen do not receive any basic salary but depend on commission and allowances or commissions alone, are part of petitioners’ wage and salary. Some salesman do not received any basic salary but depend on commission and allowances or commissions alone, although an employer-employee relationship exist. In Soriano v. NLRC, it is ruled then that, the commissions also claimed by petitioner (override commission plus net deposit incentive) are not properly includible in such base figure since such commissions must be earned by actual market transactions attributable to petitioner. Applying this by analogy, since the commissions in the present case were earned by actual market transactions attributable to petitioners, these should be included in their separation pay. In the computation thereof, what should be taken into account is the average commissions earned during their last year of employment.

152. RUGA ET. AL VS NLRC

DOCTRINE

Percentage commission based on the gross sale of the fish-catch i.e. 13% of the proceeds of the sale if the total proceeds exceeded the cost of the crude oil consumed during the fishing trip, otherwise only 10% of the proceeds of the sale. Such compensation falls within the scope and meaning of the term "wage" as defined under Article 97(f) of the Labor Code

FACTS

Petitioners were the fishermen-crew members of 7/B Sandyman II, one of several fishing vessels owned and operated by private respondent De Guzman Fishing Enterprises which is primarily engaged in the fishing business with port and office at Camaligan, Camarines Sur. Petitioners rendered service aboard said fishing vessel in various capacities, as follows: Alipio Ruga and Jose Parma patron/pilot; Eladio Calderon, chief engineer; Laurente Bautu, second engineer; Jaime Barbin, master fisherman; Nicanor Francisco, second fisherman; Philip Cervantes and Eleuterio Barbin, fishermen.

For services rendered in the conduct of private respondent's regular business of "trawl" fishing, petitioners were paid on percentage commission basis in cash by one Mrs. Pilar de Guzman,

cashier of private respondent. As agreed upon, they received thirteen percent (13%) of the proceeds of the sale of the fish-catch if the total proceeds exceeded the cost of crude oil consumed during the fishing trip, otherwise, they received ten percent (10%) of the total proceeds of the sale. The patron/pilot, chief engineer and master fisherman received a minimum income of P350.00 per week while the assistant engineer, second fisherman, and fisherman-winchman received a minimum income of P260.00 per week.

On September 11, 1983 upon arrival at the fishing port, petitioners were told by Jorge de Guzman, president of private respondent, to proceed to the police station at Camaligan, Camarines Sur, for investigation on the report that they sold some of their fish-catch at midsea to the prejudice of private respondent. Petitioners denied the charge claiming that the same was a countermove to their having formed a labor union and becoming members of Defender of Industrial Agricultural Labor Organizations and General Workers Union (DIALOGWU) on September 3, 1983.

During the investigation, no witnesses were presented to prove the charge against petitioners, and no criminal charges were formally filed against them. Notwithstanding, private respondent refused to allow petitioners to return to the fishing vessel to resume their work on the same day, September 11, 1983.

On September 22, 1983, petitioners individually filed their complaints for illegal dismissal and non-payment of 13th month pay, emergency cost of living allowance and service incentive pay, with the then Ministry (now Department) of Labor and Employment, Regional Arbitration Branch No. V, Legaspi City, Albay. They uniformly contended that they were arbitrarily dismissed without being given ample time to look for a new job.

ISSUES

Whether or not the fishermen-crew members of the trawl fishing vessel 7/B Sandyman II are employees of its owner-operator, De Guzman Fishing Enterprises.Whether or not the commission received by the fishermen can be considered as wage

RULING

1. Yes, the Court ruled that in determining the existence of an employer-employee relationship, the elements that are generally considered are the following (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer's power to control the employee with respect to the means and methods by which the work is to be accomplished. 8 The employment relation arises from contract of hire, express or implied. 9 In the absence of hiring, no actual employer-employee relation could exist.

From the four (4) elements mentioned, we have generally relied on the so-called right-of-control test where the person for whom the services are performed reserves a right to control not only the end to be achieved but also the means to be used in reaching such end. The test calls merely for the existence of the right to control the manner of doing the work, not the actual exercise of the right. We have examined the jurisprudence on the matter and find the same to be supportive of petitioners' stand. In Negre vs. WCC 135 SCRA 653 (1985), we held that fishermen crew members who were recruited by one master fisherman locally known as "maestro" in charge of recruiting others to complete the crew members are considered employees, not industrial partners, of the boat-owners. 

2. Yes, it must be noted that petitioners received compensation on a percentage commission based on the gross sale of the fish-catch i.e. 13% of the proceeds of the sale if the total proceeds exceeded the cost of the crude oil consumed during the fishing trip, otherwise only 10% of the proceeds of the sale. Such compensation falls within the scope and meaning of the term "wage" as defined under Article 97(f) of the Labor Code, thus:

(f) "Wage" paid to any employee shall mean the remuneration or earnings, however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece or commission basis, or other method of calculating the same, which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done, or for services rendered or to be rendered, and included the fair and reasonable value, as determined by the Secretary of Labor, of board, lodging, or other facilities customarily furnished by the employer to the employee. . . .

The petition is GRANTED. The questioned resolution of the National Labor Relations Commission dated May 30,1985 is hereby REVERSED and SET ASIDE. Private respondent is ordered to reinstate petitioners to their former positions or any equivalent positions with 3-year backwages and other monetary benefits under the law. No pronouncement as to costs.

153. STATE MARINE CORPORATION AND ROYAL LINE VS CEBU SEAMEN’S ASSOCIATION, INC.

DOCTRINE

"Wage" includes the fair and reasonable value of boards customarily furnished by the employer to the employees

FACTS

States Marine Corporation and Royal Line, Inc. were engaged in the business of marine coastwise transportation, employing therein several steamships of Philippine registry. They had a collective bargaining contract with the respondent Cebu Seamen's Association, Inc. On September 12, 1952, the respondent union filed a complaint against the petitioners alleging that the officers and men working on board the petitioners’ vessels have not been paid their sick leave, vacation leave and overtime pay; that the petitioners’ threatened then to accept the reduction of salaries, observed by other ship owners.

After the Minimum Wage Law had taken effect, the petitioners required their employees on board their vessels, to pay the sum of P0.40 for every meal, while the masters and officers were required to pay their meals and that because the captain had refused to yield to the general reduction of salaries, the petitioners dismissed the captain. The petitioner, on their defense, stated that they have suffered a financial losses in the operation of their vessels and there is no law which provides for the payment of sick leave or vacation leave to employees of private firms;

that with regards to their overtime pay, they have always observed the Eight-hour labor Law and that overtime does not apply to those who provide means of transportation.

ISSUE

Whether or not the employees should be required to pay for their meals

RULING

No, the benefit or privilege given to the employee which constitutes an extra remuneration above and over his basic or ordinary earning or wage, is supplement; and when said benefit or privilege is part of the laborers' basic wages, it is a facility. The criterion is not so much with the kind of the benefit or item (food, lodging, bonus or sick leave) given, but its purpose. Considering, therefore, as definitely found by the respondent court that the meals were freely given to crew members prior to August 4, 1951, while they were on the high seas "not as part of their wages but as a necessary matter in the maintenance of the health and efficiency of the crew personnel during the voyage", the deductions therein made for the meals given after August 4, 1951, should be returned to them, and the operator of the coastwise vessels affected should continue giving the same benefit..

The shipping companies argue that the furnishing of meals to the crew before the effectivity of Rep. Act No. 602, is of no moment, because such circumstance was already taken into consideration by Congress, when it stated that "wage" includes the fair and reasonable value of boards customarily furnished by the employer to the employees. If We are to follow the theory of the herein petitioners, then a crew member, who used to receive a monthly wage of P100.00, before August 4, 1951, with no deduction for meals, after said date, would receive only P86.00 monthly (after deducting the cost of his meals at P.40 per meal), which would be very much less than the P122.00 monthly minimum wage, fixed in accordance with the Minimum Wage Law. Instead of benefiting him, the law will adversely affect said crew member. Such interpretation does not conform with the avowed intention of Congress in enacting the said law.

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

DOCTRINE:

rule of "a fair day's wage for a fair day's labor"

FACTS:

Private respondent Dolina was admitted to the Philippine Airlines (PAL) Aviation School for training as a pilot beginning 16 January 1973. The training agreement bound PAL to provide regular and permanent employment to Dolina upon completion of the training course. On 25 January 1974, Dolina completed the course, and undertook an equipment qualification course up to 4 October 1974. On 9 October 1974, the Civil Aeronautics Administration issued him a license as Commercial Pilot and PAL then extended him a temporary appointment for six (6) months as Limited First Officer. When his appointment was due to expire on 30 April 1975, Dolina had only logged eighty four (84) hours and fifty five (55) minutes flying time, short of the minimum 500 flying hours required for regularization as First Officer. To enable him to complete the requirement, his employment was extended for another six months which appointment was described as "permanent." On 31 October 1975, when his appointment was again due to expire, he was still short of the minimum flying time requirement such that his appointment was again extended up to 30 April 1976. During this third extension of his appointment, Dolina completed the 500 flying hours requirement, and thus on 31 March 1976 he applied for regularization as First Officer. Pending his physical examination by the chief Flight

Surgeon, his appointment was again extended to 31 October 1976. On 17 August 1976, Dolina took a psychological examination wherein his "Adaptability Rating" was found to be "unacceptable" .On 23 September 1976, complainant was again subjected to an examination and interview by the Pilot Acceptance Qualifications Board as part of the regularization process wherein Dolina was declared unfit to work. After the recommendation of the Board of his termination and while under preventive suspension, the parties signed an agreement with the Secretary of Labor, but subsequently PAL removed Dolina from its payroll effective 1 April 1979. Dolina then appealed the Labor Arbiter's decision to the public respondent NLRC on 29 April 1979 and there filed a motion praying that PAL be ordered to return him to PAL's payroll, contending that the Labor Arbiter's decision was not yet final because of his timely appeal. PAL opposed the motion claiming that it was no longer obliged to return Dolina to its payroll since the decision of the Labor Arbiter dated 23 March 1979 in its favor was a final resolution of the case by arbitration. Public respondent NLRC rendered its decision affirming the appealed ruling, hence this petition for temporary restraining order.

ISSUE:

Whether private respondent was entitled to his salaries from April 1, 1979 until the case is finally resolved.

RULING:

In view of the above finding of valid dismissal, the NLRC had no authority to order the continued payment of Dolina's salaries from 1 April 1979 until the case is finally resolved. The NLRC's order would result in compensating Dolina for services no longer rendered and when he is no longer in PAL's employ. This is contrary to the age-old rule of "a fair day's wage for a fair day's labor" which continues to govern the relation between labor and capital and remains a basic factor in determining employees' wages [Durabilt Recapping Plant & Co. v. National Labor Relations Commission, G.R. No. 76746, July 27, 1987, 152 SCRA 328]. So that, if there is no work performed by the employee there can be no wage or pay unless the laborer was able, willing and ready to work but was prevented by management or was illegally locked out, suspended or dismissed. Where the employee's dismissal was for a just cause, it would neither be fair nor just to allow the employee to recover something he has not earned and could not have earned [Santos v. National Labor Relations Commission, G.R. No. 76721, September 21, 1987, 154 SCRA 166].

Moreover, in ordering the continued payment of Dolina's salaries from 1 April 1979 until the case is finally resolved, the NLRC in effect ordered the payment of backwages to Dolina notwithstanding its finding of a valid dismissal

155. INTERNATIONAL SCHOOL ALLIANCE OF EDUCATORS vs. Quisumbing

DOCTRINE:

"Equal pay for equal work." Persons who work with substantially equal qualifications, skill, effort and responsibility, under similar conditions, should be paid similar salaries.

FACTS:

Private respondent International School, Inc is a domestic educational institution established primarily for dependents of foreign diplomatic personnel and other temporary residents. Accordingly, the School hires both foreign and local teachers as members of its faculty, classifying the same into two: (1) foreign-hires and (2) local-hires. The School employs four tests to determine whether a faculty member should be classified as a foreign-hire or a local hire: a.) What is one's domicile? b.) Where is one's home economy? c.) To which country does one owe economic allegiance? d.) Was the individual hired abroad specifically to work in the School and was the School responsible for bringing that individual to the Philippines?

The School grants foreign-hires certain benefits not accorded local-hires. These include housing, transportation, shipping costs, taxes, and home leave travel allowance. Foreign-hires are also paid a salary rate twenty-five percent (25%) more than local-hires. The School justifies the

difference on two "significant economic disadvantages" foreign-hires have to endure, namely: (a) the "dislocation factor" and (b) limited tenure. When negotiations for a new collective bargaining agreement were held on June 1995, petitioner International School Alliance of Educators, "a legitimate labor union and the collective bargaining representative of all faculty members" of the School, contested the difference in salary rates between foreign and local-hires.

On September 7, 1995, petitioner filed a notice of strike. The failure of the National Conciliation and Mediation Board to bring the parties to a compromise prompted the Department of Labor and Employment (DOLE) to assume jurisdiction over the dispute. On June 10, 1996, the DOLE Acting Secretary, Crescenciano B. Trajano, issued an Order resolving the parity and representation issues in favor of the School. Then DOLE Secretary Leonardo A. Quisumbing subsequently denied petitioner's motion for reconsideration in an Order dated March 19, 1997.

Petitioner claims that the point-of-hire classification employed by the School is discriminatory to Filipinos and that the grant of higher salaries to foreign-hires constitutes racial discrimination. The School disputes these claims and gives a breakdown of its faculty members, numbering in all, with nationalities other than Filipino, who have been hired locally and classified as local hires. The Acting Secretary of Labor found that these non-Filipino local-hires received the same benefits as the Filipino local-hires.

ISSUE:

Whether or not there was an equal pay for an equal work.

RULING:

We cannot agree. The foregoing provisions impregnably institutionalize in this jurisdiction the long honored legal truism of "equal pay for equal work." Persons who work with substantially equal qualifications, skill, effort and responsibility, under similar conditions, should be paid similar salaries. This rule applies to the School, its "international character" notwithstanding.

If an employer accords employees the same position and rank, the presumption is that these employees perform equal work. This presumption is borne by logic and human experience. If the employer pays one employee less than the rest, it is not for that employee to explain why he receives less or why the others receive more. That would be adding insult to injury. The employer has discriminated against that employee; it is for the employer to explain why the employee is treated unfairly.

The local-hires perform the same services as foreign-hires and they ought to be paid the same salaries as the latter. For the same reason, the "dislocation factor" and the foreign-hires' limited tenure also cannot serve as valid bases for the distinction in salary rates. The dislocation factor and limited tenure affecting foreign-hires are adequately compensated by certain benefits accorded them which are not enjoyed by local-hires, such as housing, transportation, shipping

costs, taxes and home leave travel allowances.

In this case, we find the point-of-hire classification employed by respondent School to justify the distinction in the salary rates of foreign-hires and local hires to be an invalid classification. There is no reasonable distinction between the services rendered by foreign-hires and local-hires. The practice of the School of according higher salaries to foreign-hires contravenes public policy and, certainly, does not deserve the sympathy of this Court.

156. ATOK-BIG WEDGE MINING CO., INC., vs. ATOK-BIG WEDGE MUTUAL BENEFIT ASSOCIATION,

DOCTRINE:

The "minimum wage" can by no means imply only the actual minimum. Some margin or leeway must be provided, over and above the minimum, to take care of contingencies such as increase of prices of commodities and desirable improvement in his mode of living.

FACTS:

Demand was submitted to petitioner by respondent union through its officers for various concession, among which were (a) an increase of P0.50 in wages, (b) commutation of sick and vacation leave if not enjoyed during the year, (c) various privileges, such as free medical care, medicine, and hospitalization, (d) right to a closed shop, check off, etc., (e) no dismissal without prior just cause and with a prior investigation, etc. Some of the demands, were granted by the petitioner, and the other were rejected, and so hearings were held and evidence submitted on the latter. After the hearing the respondent court rendered a decision, the most important provisions of which were those fixing the minimum wage for the laborers at P3.20, declaring that additional compensation representing efficiency bonus should not be included as part of the wage, and making the award effective from September 4, 1950. It is against these portion of thedecision that this appeal is taken.

On the issue of the wage, it is contended by petitioner that as the respondent court found that the laborer and his family at least need the amount of P2.58 for food, this should be the basis for the determination of his wage, not what he actually spends; that it is not justifiable to fix a wage higher than that provided by Republic Act No. 602; and that respondent union made the demand

in accordance with a pernicious practice of claiming more after an original demand is granted. The respondent court found that P2.58 is the minimum amount actually needed by the laborer and his family

ISSUE:

What will be the basis to determine the minimum wage.

RULING:

A person's needs increase as his means increase. This is true not only as to food but as to everything else — education, clothing, entertainment, etc. The law guarantees the laborer a fair and just wage. The minimum must be fair and just. The "minimum wage" can by no means imply only the actual minimum. Some margin or leeway must be provided, over and above the minimum, to take care of contingencies such as increase of prices of commodities and desirable improvement in his mode of living.

157. De racho vs municipality of iligan L-23442

158. C. Planas Commercial vs NLRC 144619

159. Davao Integrated Ports Stevedoring Services vs. Abarquez

160. Nestle Philippines vs. NLRC

Doctrine:

While it is not disputed that the retirement plan is non-contributory on the part of the workers, tills does not automatically remove it from the ambit of collective bargaining negotiations. 

The fact that the retirement plan is non-contributory, that the employees contribute nothing to the operation of the plan.

Facts:

UFE was certified as the sole and exclusive bargaining agent for all regular rank-and file employees of Nestle Phils. Cagayan de oro factory as well as its Cebu/Davao Sales office. While the parties negotiating their CBA, the employees of Cabuyao resorted to a “slow down” and “walk-outs” prompting the petitioner to shut down the factory, subsequently, the Sec. of Labor assumed jurisdiction and issued a return to work order, in spite of the order, the union struck without notice. The company retaliated by dismissing the union officers and members of negotiating panel who participated in the illegal strike. UFE declared a bargaining deadlock. Thereafter, the union filed a notice of strike and filed a case of unfair labor practice against the company. After conciliation efforts the NCMB yielded negative results, the dispute was certified

to the NLRC by the Sec. of Labor. The NLRC issued a resolution that the company shall continue implementing its retirement Plan modified as follows;

1.) For 15 years of service or less- an amount equal to 100% of the employees’ monthly salary for every year of service;

2.) For more that 15 but not less than 20 years in service – 125% of the employees monthly salary for every year of service

3.) For 29 years or more – 150% of the employees’ monthly salary for every year of service.

Issues:

Whether or not the employees have not vested demandable right to a contributory retirement plan?

Ruling:

The Supreme Court held that the employees have vested and demandable right over existing benefits Voluntary granted to them by their employer. The employer may not unilaterally withdraw, eliminate or diminish such benefits. The NLRC correctly observed that the inclusion of the retirement plan in the CBA as part of the package of economic benefit extended by the company to its employees to provide them a measure of financial security after they shall have ceased to be employed in the company, reward their loyalty, boost their morale and efficiency and promote industrial peace, gives “consensual character” to the plan so that it may not be terminated or modified at the will by either party. The fact that the retirement plan is non-contributory, the employees contribute nothing to the operation of the plan, does not make it a non-issue in the CBA. – Salary increases, rice allowances, mid-year bonuses, 13th and 14th month pay, seniority pay, medical and hospitalization plans, health and dental services, vacation, sick and other Leaves with pay – are non-contributory benefits. Since the retirement plan has been an integral part of the CBA. The decision of the NLRC is not vitiated by abuse of discretion. The benefits and concessions given to the employees were based on the NLRC’s evaluation of the unions’ demand, the evidence adduced by the parties, the financial capacity of the company to grant such demands, its long-term viability, the economic conditions prevailing in the country as they affect the purchasing power of the employees as well as it concomitant effect on the other factors of production, the recent trends in the industry to which it belongs.

161. REYNALDO TIANGCO vs HON. VICENTE LEOGARDO, JR

Doctrine:

Under Section 15 of the Rules on P.D. 525 and Section 16 of the Rules on P. D. 1123 also prohibits the diminution of any benefit granted to the employees under existing laws, agreements, and voluntary employer practice.

Facts:

Reynaldo Tiangco, is a fishing operator who owns the Reynaldo Tiangco Fishing Company and a fleet of fishing vessels engaged in deep-sea fishing which operates from Navotas, Rizal. His business is capitalized at P2,000,000.00, while the petitioner, Victoria Tiangco, is a fish broker whose business is capitalized at P100,000.00. The private respondents, Aurelio Ilustrisimo, Pepito Gilbuena, Rogelio Carabio, Abraham Gilbuena, Rustom Ofqueria, Ernesto Diong, Jesus Gilbuena, Clemente (Emerenciano) Villaruel, Dominador Lacerna, and Graciano Durana, are batillos engaged by the petitioner Reynaldo Tiangco to unload the fish catch from the vessels and take them to the Fish Stall of the petitioner Victoria Tiangco. The private respondents, Eddie Batobalanos, Aguedo Marabe, Gregorio Laylay, Fruto Gihapon, Solomon Clarin, Pepito Batoy, Jose Ofqueria, Daniel Cabrera, Juan Castro, Alcafone Esgana, Tomas Capalar, Antonio Gilbuena, Ernesto Batoy, Serafio Yadawon, Juan Gihapon, Elias Escaran and Roberto Bayon-on, were batillos engaged by Victoria Tiangco. 3 The work of these batillos were limited to days of arrival of the fishing vessels and their working days in a month are comparatively few. Their working hours average four (4) hours a day. On April 8, 1980, the private respondents filed a complaint against the petitioners with the Ministry of Labor and Employment for non-payment of their legal holiday pay and service incentive leave pay, as well as underpayment of their emergency cost of living allowances which used to be paid in full irrespective of their working days, but which were reduced effective February, 1980, in contravention of Article 100 of the new Labor Code which prohibits the elimination or diminution of existing benefits. The petitioners denied the laborers' contention, claiming that the laborers were all given, in addition

to their regular daily wage, a daily extra pay in amounts ranging from 30 centavos to 10 pesos which are sufficient to offset the laborers' claim for service incentive leave and legal holiday pay. As regards the claim for emergency allowance differentials, the petitioners admitted that they discontinued their practice of paying their employees a fixed monthly allowance, and effective February, 1980, they no longer paid allowances for non-working days. They argued, however, that no law was violated as their refusal to pay allowances for non-working days is in consonance with the principle of "no work, no allowance"; and that they could not pay private respondents a fixed monthly allowance without risking the viability of their business. Resolving the case, the Director of the National Capitol Region of the Ministry of Labor and Employment ruled that the daily extra pay given to private respondents was a ,'production incentive benefit", separate and distinct from the service incentive leave pay and legal holiday pay, payment of which cannot be used to offset a benefit provided by law, and ordered the petitioners to pay the private respondents their service incentive leave pay and legal holiday pay. However, he denied the laborers' claim for differentials in the emergency cost of living allowance for the reason that the emergency cost of living allowance accrues only when the laborers actually work following the principle of "no work, no pay," and private respondents are not entitled to a fixed monthly allowance since they work on a part time basis which average only four (4) days a week. The private respondents should not be paid their allowances during non-working days. From this order, both parties appealed. On May 22, 1981, the respondent Deputy Minister of Labor and Employment modified the order and directed the petitioners to restore and pay the individual respondents their fixed monthly 19 allowance from March, 1980 and to pay them the amount of P58,860.00, as underpayment of their living allowance from May, 1977 to February 21, 1980.

Issues:

Whether or not the Deputy Minister of Labor and Employment acted in excess of his jurisdiction?

Ruling:

We find no merit in the contention. However, a revision of the amount due the private respondents is in order for the reason that the respondent Deputy Minister of Labor and Employment failed to take into consideration, in computing the amount due each worker, the fact that the private respondents are employed by two different individuals whose businesses are divergent and capitalized at various amounts, contrary to the provisions of P.D. 525 and subsequent amendatory decrees, wherein the amount of the emergency cost of living allowance to be paid to a worker is made to depend upon the capitalization of the business of his employer or its total assets, whichever is higher. Hence, for the period from November, 1976 to April 30, 1977, the petitioner Victoria Tiangco should pay her workers a fixed monthly allowance of P 30.00, while the workers of the petitioner Reynaldo Tiangco were entitled to a fixed monthly allowance of P50.00, each. The record shows that during this period, the petitioner Victoria Tiangco was paying her workers a monthly allowance of P30.00 each. Accordingly, there was no underpayment for this period insofar as her batillos are concerned. The petitioner Reynaldo Tiangco, however, paid his employees P30.00, instead of P50.00, as mandated by law.

Therefore, there was an underpayment of P20.00 a month for each batillo under his employ. For the 6-month period, he should pay his workers differentials in the amount of P120.00 each. For the period from May, 1977 to March 1979, the workers of the petitioner Victoria Tiangco were entitled to a fixed monthly allowance of P90.00 in view of the promulgation of P.D. 1123 which granted an across-the-board increase of P60.00 a month in their allowances. For this period, however, the said petitioner paid her workers only P60.00 a month, or a difference of P30.00 a month. There was, therefore, an underpayment of P690.00 for every batillo under her employ for the 23-month period. With the addition of P60.00 across-the-board increase in their allowances, the workers of the petitioner Reynaldo Tiangco were entitled to receive a fixed monthly allowance of P110.00. However, the record shows that his workers were only paid P60.00 a month, or a difference of P50.00 a month. Consequently, each batillo hired by him should be paid a differential of P1,150.00 for the 23-month period. For the period from April, 1979 to August, 1979, the employees of the petitioner Victoria Tiangco were entitled to a fixed monthly allowance of P150.00 while the workers employed by the petitioner Reynaldo Tiangco were entitled to an allowance of P170.00, pursuant to P.D. 1614. The record shows, however, that both petitioners paid their workers only P120.00 a month. There was a difference of P30.00 a month in the case of the petitioner Victoria Tiangco, and P50.00, a month, in the case of the petitioner Reynaldo Tiangco. Hence, for this period, the petitioner Victoria Tiangco should pay the amount of P150.00 to each batillo in her employ, while the petitioner Reynaldo Tiangco should pay the amount of P250.00, as differentials in the cost of living allowances of the workers under his employ. With this modification, the judgment appealed from is AFFIRMED in all other respects. With costs against the petitioners.

162. CEBU AUTOBUS CO vs UNITED CEBU AUTOBUS EMPLOYEES ASSN

Doctrine:

Rule on deductibility of “facilities” or “supplements” from wages

Facts:

The company used to pay to its drivers and conductors, who were assigned outside of the City limits, aside from their regular salary, a certain percentage of their daily wage, as allowance for food. Upon the effectivity of the Minimum Wage Law, however, that privilege was stopped by the company. The order of CIR to the company to continue granting this privilege, was upheld by this Court.

The shipping company argue that the furnishing of meals to the crew before the effectivity of Rep. Act No. 602, is of no moment, because such circumstance was already taken into consideration by Congress, when it stated that “wage” includes the fair and reasonable value of boards customarily furnished by the employer to the employees.

Issues:

Whether or Not “wage” includes the fair and reasonable value of boards customarily furnished by the employer to the employees.

Ruling:

No, if We are to follow the theory of the herein petitioners, then a crew member, who used to receive a monthly wage of P100.00, before August 4, 1951, with no deduction for meals, after said date, would receive only P86.00 monthly (after deducting the cost of his meals at P.40 per meal), which would be very much less than the P122.00 monthly minimum wage, fixed in

accordance with the Minimum Wage Law. Instead of benefiting him, the law will adversely affect said crew member. Such interpretation does not conform with the avowed intention of Congress in enacting the said law.

163. Pag-asa steel works vs. CA 166647

164. Lexal Laboratories vs CIR L-24632

165. National Sugar Refineries Corp. vs. NLRC 101761

166. Case Title No.: American Wire and Cable Daily Rated Employees Union vs. American Wire and Cable Co., and the Court of Appeals (GR No. 155059, April 29, 2005)

FACTS:

American Wire and Cable Co., Inc., is a corporation engaged in the manufacture of wires and cables. There are two unions in this company, the American Wire and Cable Monthly-Rated Employees Union and the American Wire and Cable Daily-Rated Employees. An original action was filed before the NCMB of the Department of Labor and Employment (DOLE) by the two unions for voluntary arbitration. The petitioner submits that the withdrawal of the private respondent of the 35%premium pay for selected days during the Holy Week and Christmas season, the holding of the Christmas Party and its incidental benefits, and the giving of service awards, which they have long enjoyed, violated Article 100 of the Labor Code. A decision was rendered by the Voluntary Arbitrator in favor of the private respondent. On appeal, CA affirmed and upheld the Arbitrator’s decision.

ISSUE: Whether or not private respondent is guilty of violating Article 100 of the Labor Code, as amended, when the benefits/entitlements given to the members of petitioner union were withdrawn.

HELD: The Court ruled that respondent is not guilty of violating Art. 100 of the Labor Code.

ART. 100. PROHIBITION AGAINST ELIMINATION OR DIMINUTION OF BENEFITS. –Nothing in this Book shall be construed to eliminate or in any way diminish supplements, or other employee benefits being enjoyed at the time of promulgation of this Code.

The benefits and entitlements mentioned in the instant case are all considered bonuses which were given by the private respondent out of its generosity and munificence. A bonus is an amount granted and paid to an employee for his industry and loyalty which contributed to the success of the employer’s business and made possible the realization of profits. The granting of a bonus is a management prerogative, something given in addition to what is ordinarily received by or strictly due the recipient. Thus, a bonus is not a demandable and enforceable obligation, except when it is made part of the wage, salary or compensation of the employee.

For a bonus to be enforceable, it must have been promised by the employer and expressly agreed upon by the parties or it must have had a fixed amount and had been a long and regular practice on the part of the employer. The assailed benefits were never subjects of any agreement between the union and the company. It was never incorporated in the CBA. To be considered a “regular practice,” the giving of the bonus should have been done over a long period of time, and must be shown to have been consistent and deliberate. The downtrend in the grant of these two bonuses over the years demonstrates that there is nothing consistent about it. To hold that an employer should be forced to distribute bonuses which it granted out of kindness is to penalize him for his past generosity.

167. Case Title/No: LG Marcos et.al Vs. NLRC and Insular Life Assurance Co., Ltd (GR No. 111744, September 8, 1995)

Facts:

Petitioners were regular employees of private respondent Insular Life Assurance Co:, Ltd., but they were dismissed when their positions were declared redundant. A special redundancy benefit was paid to them, which included payment of accrued vacation leave and fifty percent(50%) of unused current sick leave, special redundancy benefit, equivalent to three (3) month salary for every year of service; and additional cash benefits, in lieu of other benefits provided by the company or required by law.

Before the termination of their services, petitioner Marcos had been in the employ of private respondent for more than twenty (20) years; petitioner Andrada, more than twenty-five (25)years; petitioner Lopez, exactly thirty (30) years; and petitioner Cruz, more than twenty (20)years.

Petitioners, particularly Baltazara J. Lopez, sent a letter dated October 23, 1990 to respondent company questioning the redundancy package, She claimed that they should receive their respective service awards and other prorated bonuses which they had earned at the time

they were dismissed. In addition, Lopez argued that "the cash service awards have already been budgeted in a fund distinct and apart from redundancy fund.

Thereafter, private respondent required petitioners to execute a "Release and Quitclaim,"

And petitioners complied but with a written protest reiterating their previous demand that they were nonetheless entitled to receive their service awards. Meanwhile, in the same year, private respondent celebrated its 80th anniversary wherein the management approved the grant of an anniversary bonus equivalent to one (1) month salary only to permanent and probationary employees as of November 15, 1990.

On March 26, 1991, respondent company announced the grant of performance bonus to both rank and file employees and supervisory specialist grade and managerial staff equivalent to two(2) months salary and 2.75 basic salary, respectively, as of December 30, 1990. The performance bonus, however, would be given only to permanent employees as of March 30,1991.

In a decision dated October 8, 1992, the labor arbiter ordered respondent company to pay petitioners their service awards, anniversary bonuses and prorated performance bonuses, including ten percent (10%) thereof as attorney's fees.

Issue:

WON respondent NLRC committed reversible error or grave abuse of discretion in affirming the validity of the "Release and Quitclaim" and, consequently, that petitioners are not entitled to payment of service awards and other bonuses.

Held:

Under prevailing jurisprudence, the fact that an employee has signed a satisfaction receipt for his claims does not necessarily result in the waiver thereof. The law does not consider as valid ny agreement whereby a worker agrees to receive less compensation than what he is entitled to recover. A deed of release or quitclaim cannot bar an employee from demanding benefits to which he is legally entitled. Furthermore, in the instant case, it is an undisputed fact that when petitioners signed the instrument of release and quitclaim, they made a written manifestation reserving their right to demand the payment of their service awards. The element of total voluntariness in executing that instrument is negated by the fact that they expressly stated therein their claim for the service awards, a manifestation equivalent to a protest and a disavowal of any waiver thereof. The grant of service awards in favor of petitioners is more importantly underscored in the precedent case of Insular Life Assurance Co., Ltd., et al. vs. NLRC, et al.,

where this Court ruled that "as to the service award differentials claimed by some respondent union members, the company policy shall likewise prevail, the same being based on the employment contracts or collective bargaining agreements between the parties. As the petitioners had explained, pursuant to their policies on the matter, the service award differential is given at the end of the year to an employee who has completed years of service divisible by 5.A bonus is not a gift or gratuity, but is paid for some services or consideration and is in addition to what would ordinarily be given.

The term "bonus" as used in employment contracts, also conveys an idea of something which is gratuitous, or which may be claimed to be gratuitous, over and above the prescribed wage which the employer agrees to pay. While there is a conflict of opinion as to the validity of an agreement to pay additional sums for the performance of that which the promise is already under obligation to perform, so as to give the latter the right to enforce such promise after performance, the authorities hold that if one enters into a contract of employment under an agreement that he shall be paid a certain salary by the week or some other stated period and, in addition, a bonus, in case he serves for as specified length of time, there is no reason for refusing to enforce the promise to pay the bonus, if the employee has served during the stipulated time, on the ground that it was a promise of a mere gratuity. This is true if the contract contemplates a continuance of the employment for a definite term, and the promise of the bonus is made at the time the contract is entered into. If no time is fixed for the duration of the contract of employment, but the employee enters upon or continues in service under an offer of a bonus if he remains therein for a certain time, his service, in case he remains for the required time, constitutes an acceptance of the offer of the employer to pay the bonus and, after that acceptance, the offer cannot be withdrawn, but can be enforced by the employee. The weight of authority in American jurisprudence, with which we are persuaded to agree, is that after the acceptance of a promise by an employer to pay the bonus, the same cannot be withdrawn, but may be enforced by the employee. However, in the case at bar, equity demands that the performance and anniversary bonuses should be prorated to the number of months that petitioners actually served respondent company in the year 1990. This observation should betaken into account in the computation of the amounts to be awarded to petitioners. WHEREFORE the decision of Labor Arbiter Alex Arcadio Lopez is upheld.

168. Case Title/No.: Traders Royal Bank Vs. NLRC (GR No. 88168, August 30,1990)

Facts:

`Respondent Traders Royal Bank Employees Union filed a complaint to the NLRC on the account of diminution of their benefits by the petitioner. Said diminution was effected through ;mid-year bonus, from two (2) months gross pay to two (2) months basic and year-end bonus from three (3) months gross to only two (2) months. NLRC rendered a decision in favor of the Employees union and ordered Traders Royal Bank to pay to employees the mid-year bonus differential representing the difference between wo (2) months gross pay and two (2) months basic pay and end-year bonus differential of one(1) month gross pay for 1986.The motion for reconsideration of Traders Royal Bank was then denied. Thus the petition for certiorari.

Issue:

Whether or not the reduction in bonuses is tantamount to diminution of benefits?

Held:

The petition for Certiorari was granted. A bonus is a “gratuity or act of liberality of the giver which the recipient has no right to demand as a matter of right.” The discretion of giving bonuses rests upon the management and the income of the operations of the past year. It has been claimed that the income of the petitioner has indeed decreased yet the bank still gave out the usual bonuses. Any claim that the receipt of the employees of bonuses has been a company tradition and cannot be adjusted to its fiscal position is without merit. The company cannot be forced to give bonuses which it can no longer afford and in effect, be penalized for its past

generosity. Bonuses are not part of labor standards like salaries, cost of living allowances, and leave benefits, which are provided by the Labor Code.

169. NATIONAL FEDERATION OF SUGAR WORKERS vs. OVEJERA

G.R. No. L-59743 May 31 1982

Facts:

National Federation of Sugar Workers (NFSW) has been the bargaining agent of CENTRAL AZUCARERA DE LA CARLOTA (CAC) rank and file employees and has concluded with CAC a collective bargaining agreement stipulating a provision regarding the grant of bonuses.

On November 28, 1981, NFSW struck allegedly to compel the payment of the 13th month pay under PD 851, in addition to the Christmas, milling and amelioration bonuses being enjoyed by CAC workers.

To settle the strike, a compromise agreement was concluded between CAC and NFSW on November stipulating that the parties agree to abide by the final decision of the Supreme Court in any case involving the 13th Month Pay Law if it is clearly held that the employer is liable to pay a 13th month pay separate and distinct from the bonuses already given.

Meanwhile, a motion for reconsideration on the case of Marcopper Mining Corp. vs. Blas Ople et. al. (G.R. No. 51254) for the payment of 13th month pay under PD 851 was denied and an entry of judgment was made in favor of the Union. After the Marcopper decision had become final, NFSW renewed its demand that CAC give the 13th month pay. CAC refused. A notice of strike was filed with the Ministry of Labor and Employment and was subsequently commenced based on the non-payment of the 13th month pay.

Issue:

Whether under PD 851, CAC is obliged to give its workers a 13th month salary in addition to Christmas, milling and amelioration bonuses stipulated in a collective bargaining agreement amounting to more than a month's pay.

Ruling:

The evident intention of the law, as revealed by the law itself, was to grant an additional income in the form of a 13th month pay to employees not already receiving the same. Otherwise put, the intention was to grant some relief — not to all workers — but only to the unfortunate ones not actually paid a 13th month salary or what amounts to it, by whatever name called; but it was not envisioned that a double burden would be imposed on the employer already paying his employees a 13th month pay or its equivalent — whether out of pure generosity or on the basis of a binding agreement and, in the latter ease, regardless of the conditional character of the grant (such as making the payment dependent on profit), so long as there is actual payment. Otherwise, what was conceived to be a 13th month salary would in effect become a 14th or possibly 15th month pay. This view is justified by the law itself which makes no distinction in the grant of exemption: "Employers already paying their employees a 13th month pay or its equivalent are not covered by this Decree." (P.D. 851.)

To require employers (already giving their employees a 13th month salary or its equivalent) to give a second 13th month pay would be unfair and productive of undesirable results. To the employer who had acceded and is already bound to give bonuses to his employees, the additional burden of a 13th month pay would amount to a penalty for his munificence or liberality. The probable reaction of one so circumstance would be to withdraw the bonuses or resist further voluntary grants for fear that if and when a law is passed giving the same benefits, his prior concessions might not be given due credit; and this negative attitude would have an adverse impact on the employees.

At any rate, in view of the rulings made herein, NFSW cannot insist on its claim that its members are entitled to a 13th month pay in addition to the bonuses already paid by CAC.

WHEREFORE, the petition is dismissed for lack of merit. No costs. SO ORDERED.

170. UNIVERSAL CORN PRODUCTS vs.

THE NATIONAL LABOR RELATIONS COMMISSION et. al

G.R. No. L-60337 August 21, 1987

Facts:

In May 1972, Universal Corn Products, petitioner, and the Universal Corn Products Workers Union entered into a collective bargaining agreement wherein the petitioner agrees to grant all regular workers within the bargaining unit with at least one (1) year of continuous service, a Christmas bonus equivalent to the regular wages for seven (7) working days. The agreement had a duration of three years, effective June 1, 1971, or until June 1, 1974.

The collective bargaining agreement in question expired without being renewed. On June 1, 1979, they entered into a collective bargaining agreement for the years from 1979 to 1981. The new collective bargaining agreement did not refer to the "Christmas bonus" but dealt only with salary adjustments. According to the petitioner, the new agreements deliberately excluded the grant of Christmas bonus with the enactment of Presidential Decree No. 8514 on December 16, 1975. It further claims that since 1975, it had been paying its employees 13th-month pay pursuant to the Decree.

For failure of the petitioner to pay the seven-day Christmas bonus for 1975 to 1978 inclusive, in accordance with the 1972 CBA, the union went to the labor arbiter who ruled that the payment of the 13th month pay precluded the payment of further Christmas bonus. The union appealed to the National Labor Relations Commission (NLRC) which set aside the decision of the labor

arbiter on the opinion that the crediting of said benefit to the 13th month pay cannot be sanctioned on the ground that it is contrary to Section 10 of the Rules and Regulations Implementing Presidential Decree No. 851, which prohibits the reduction or elimination of benefits or favorable practice being enjoyed by the employees. Moreover, that same parties entered into another 3-year CBA, which no longer provides for a 7-day wage Christmas bonus. In effect, therefore, the parties agreed to discontinue the privilege, which agreement should also be respected.

Issue:

Whether the seven-day Christmas bonus constitute 13th month pay.

Ruling:

We hold that in the case at bar, Ovejera (La Carlota) case does not apply. We apply instead, United CMC Textile Workers Union v. Valenzuela, a recent decision. In that case this Court, speaking through Mr. Justice Edgardo Paras, held: x x x If the Christmas bonus was included in the 13th month pay, then there would be no need for having a specific provision on Christmas bonus in the CBA. But it did not provide for a bonus in graduated amounts depending on the length of service of the employee. The intention is clear therefore that the bonus provided in the CBA was meant to be in addition to the legal requirement. Moreover, why exclude the payment of the 1978 Christmas bonus and pay only the 1979-1980 bonus. The classification of the company's workers in the CBA according to their years of service supports the allegation that the reason for the payment of bonus was to give bigger award to the senior employees—a purpose which is not found by P.D. 851. A bonus under the CBA is an obligation created by the contract between the management and workers while the 13th month pay is mandated by the law (P.D. 851).

ln the same vein, we consider the seven-day bonus here demanded "to be in addition to the legal requirement." Although unlike the Valenzuela CBA, which took effect after the promulgation of Presidential Decree No. 851 in 1975, the subject agreement was entered into as early as 1972, that is no bar to our application of Valenzuela. What is significant for us is the fact that, like the Valenzuela agreement, the Christmas bonus provided in the collective bargaining agreement accords a reward, in this case, for loyalty, to certain employees. This is evident from the stipulation granting the bonus in question to workers "with at least one (1) year of continuous service." As we said in Valenzuela, this is "a purpose not found in P.D. 851."

WHEREFORE, premises considered, the petition is hereby DISMISSED. The Decision of the public respondent NLRC promulgated on February 11, 1982, and its Resolution dated March 23, 1982, are hereby AFFIRMED. The temporary restraining order issued on May 19,1982 is LIFTED.

171. PHILIPPINE AIRLINES, INC. (PAL) vs. NATIONAL LABOR RELATIONS COMMISSION and AIRLINE PILOTS ASSOCIATION OF THE PHILIPPINES (ALPAP)

G.R. No. 114280 July 26, 1996

Facts:

ALPAP filed its complaint on September, 1991, charging PAL of violating Presidential Decree No. 851, its Implementing Rules and Regulations and Memorandum Order No. 28 issued by then President Corazon C. Aquino, for unlawfully refusing and failing to pay the pilots their thirteenth month pay from 1988 to 1990. Aside from their accumulated thirteenth month pay with claim for damages and attorney’s fees.

In answer to the complaint, PAL denied any liability to ALPAP and maintained that it was not obliged to give its pilots a thirteenth month pay under P.D. 851 as it was already paying said employees the equivalent of a thirteenth month pay in the form of a year-end bonus. PAL invokes that under Section 2 of PD 851 and its Implementing Rules and Regulations, "employers already paying their employees a 13th month pay or more in a calendar year or its equivalent at the time of this issuance," are not covered by PD 851. Additionally, PAL contends that there is no demandable obligation in the absence of any contractual stipulation or a legal provision requiring it to give its pilots a thirteenth month pay as aside from a year-end bonus that the latter are already receiving.

ALPAP argued that the payment of the year-end bonus cannot be equated with the thirteenth month pay since the payment of the former is conditional in character and not fixed in its amount, while that of the thirteenth month pay is mandatory in character and definite in its amount.

Judgment was rendered by the Labor Arbiter in ALPAP’s favour. PAL's argument that it is exempted from the coverage of P.D. 851 was ruled out because it was shown that except for the pilots, all other employees of PAL were receiving both the thirteenth month pay and the year-end bonus. However, the coverage of the award for thirteenth month pay was confined to 1988 until 1990, excluding those from 1986 and 1987, due to ALPAP’s failure to amend its complaint.

Both parties appealed to the NLRC which affirmed with modifications the decision of the labor arbiter.

Still dissatisfied, the parties sought reconsideration which was denied by the NLRC.

Issue:

1. Whether payment of the thirteenth month pay under P.D. 851 and Memorandum Order No. 28 covers only rank and file employees.

2. Whether the payment of a year-end bonus is already equivalent to a thirteenth month pay.

Decision:

The absence of an express provision in the CBA between PAL and ALPAP obligating the former to pay the members of the latter a thirteenth month pay is immaterial. It cannot be disputed that the tenor of P.D. 851 as amended by Memorandum Order No. 28 is mandatory in so providing that “all employers are hereby required to pay all their rank and file employees a thirteenth month pay not later than December 24 of every year.” Non-compliance with this mandate cannot be excused by the simple expedient of pointing to the absence of a similar provision in the CBA for this would contravene the basic rule that an existing law enters into and forms part of a valid contract without the need for the parties to expressly make reference to it. Notwithstanding therefore the absence of any contractual agreement, the payment of a thirteenth month pay being a statutory grant, compliance with the same is mandatory and is deemed incorporated in the CBA.

Although P.D. 851 as amended by Memorandum Order No. 28 requires all employers to pay all their rank and file employees a thirteenth month pay, the rule is subject to certain exceptions. Excluded from the coverage are “employers already paying their employees a thirteenth month pay or more in a calendar year or its equivalent at the time of the issuance of the law.” Construing the term “its equivalent,” the same was defined as inclusive of “Christmas bonus, midyear bonus, profit-sharing payments and other cash bonuses amounting to not less than 1/12th of the basic salary but shall not include cash and stock dividend, cost of living allowances and all other allowances regularly enjoyed by the employee, as well as nonmonetary benefits. When an employer pays less than 1/12th of the employee’s basic salary, the employer shall pay the difference.”

“Bonus” is an amount granted and paid to an employee for his industry and loyalty which contributed to the success of the employer’s business and made possible the realization of profits.—The term “bonus” was in turn interpreted to mean: “[A] bonus is an amount granted and paid to an employee for his industry and loyalty which contributed to the success of the employer’s business and made possible the realization of profits. It is an act of generosity of the employer . . . It is also granted by an enlightened employer to spur the employee to greater efforts for the success of the business and realization of bigger profits.”

Applying the aforecited definitions, it would seem that the year-end bonus being granted by PAL to the employees may be considered as an equivalent of the thirteenth month pay considering the similarity in the purpose for granting the same. As advanced by ALPAP, the rationale for PAL’s grant of a year-end bonus was to give regard for the loyalty, dedication and hard work of the employee. Confirming this purpose is the declaration made by then PAL President, Feliciano Belmonte, Jr. in his letter addressed to the employees of the PAL dated October 30, 1991, announcing the granting of a Christmas bonus equivalent to 125% of the employee’s monthly pay for a “job well done” to wit: “x x x x x x x x x In simple terms, we made a profit from our efforts to increase revenues and cut costs. I believe it is only proper that appreciation for a job well done should be expressed in a tangible manner. I am therefore pleased to announce that for this year, management has decided to award a Christmas bonus equivalent to 125% of your monthly basic pay. x x x x x x.” From the foregoing, it appears that the rationale for the grant of the year-end bonus by PAL coincides with the nature of the bonus which can be equated with the payment of a thirteenth month pay.

WHEREFORE, finding no merit in the petitions, the same are hereby DENIED and the Resolutions of public respondent NLRC promulgated on November 23, 1993 and February 28, 1994 are hereby AFFIRMED.

172. Framanlis Farms Inc vs Minister of Labor 72616-17

173. San Miguel corp vs Inciong 103 scra 139

174. Philippine duplicators Inc vs NLRC

175. Isalama Machine works vs NLRC

176.Alliance of Government workers et al vs Minister of labor and employment

177. Tan vs. Lagrama

178. Lambo vs NLRC

179. Makati Haberdashery vs NLRC

180. Labor Congress of the Philippines

181. Jimenez et al. vs. NLRC and Juanata

[G.R. No. 116960. April 2, 1996]

DOCTRINE:

As a general rule, one who pleads payment has the burden of proving it. Even where the plaintiff must allege non-payment, the general rule is that the burden rests on the defendant to prove payment, rather than on the plaintiff to prove non-payment

FACTS:

Pedro and Fredelito Juanatas, herein respondents, filed a claim for unpaid wages/commissions, separation pay and damages against JJ s Trucking and/or Dr. Bernardo Jimenez. Complainants alleged that they were hired by herein petitioner Bernardo Jimenez as driver, mechanic and helper, respectively, in his trucking firm, JJ Trucking. They were assigned to a ten-wheeler truck to haul soft drinks of Coca-Cola Bottling Company and paid on commission basis, initially fixed at 17% but later increased to 20% in 1988. They further alleged that for the years 1988 and 1989 they received only a partial commission of P84,000.00 from petitioners total gross income of almost P1,000,000.00 for the said two years. Hence, the Jimenez still owes them 106,211.86. On March 1990 services of the complainant were illegally terminated.

Petitioners, on the other hand, contend that respondent Fredelito Juanatas was not an employee of the firm but was merely a helper of his father Pedro; that all commissions for 1988 and 1989, as well as those up to March, 1990, were duly paid; and that the truck driven by respondent Pedro Juanatas was sold to one Winston Flores in 1991 and, therefore, private respondents were not illegally dismissed.

The Labor Arbiter rendered a decision in favor of respondent Pedro Juanatas ordering Jimenez to pay the former a separation pay of P15,050.00, but dismissing the claim as regard to Fredelito Juanatas. On appeal filed by private respondents, the NLRC modified the decision of the labor arbiter declaring Pedro and Fredelito Juanatas as employees and ordering petitioners to pay the unpaid commission amounting to P84,387.05. Petitioners motion for reconsideration was denied, hence this petition.

ISSUE:

Whether or not the NLRC committed a grave abuse of discretion in ruling that private respondents were not paid their commissions in full.

HELD:

No. There is no reason to disturb the findings of respondent NLRC that the entire amount of commissions was not paid, this by reason of the evident failure of herein petitioners to present evidence that full payment thereof has been made. It is a basic rule in evidence that each party must prove his affirmative allegations. Since the burden of evidence lies with the party who

asserts an affirmative allegation, the plaintiff or complainant has to prove his affirmative allegation, in the complaint and the defendant or respondent has to prove the affirmative allegations in his affirmative defenses and counterclaim. Considering that petitioners herein assert that the disputed commissions have been paid, they have the bounden duty to prove that fact.

As a general rule, one who pleads payment has the burden of proving it. Even where the plaintiff must allege non-payment, the general rule is that the burden rests on the defendant to prove payment, rather than on the plaintiff to prove non-payment. The debtor has the burden of showing with legal certainty that the obligation has been discharged by payment.

The testimony of petitioners which merely denied the claim of private respondents, unsupported by documentary evidence, is not sufficient to establish payment. Although petitioners submitted a notebook showing the alleged vales of private respondents for the year 1990, the same is inadmissible and cannot be given probative value considering that it is not properly accomplished, is undated and unsigned, and is thus uncertain as to its origin and authenticity.

The positive testimony of a creditor may be sufficient of itself to show non-payment, even when met by indefinite testimony of the debtor. Similarly, the testimony of the debtor may also be sufficient to show payment, but, where his testimony is contradicted by the other party or by a disinterested witness, the issue may be determined against the debtor since he has the burden of proof. The testimony of the debtor creating merely an inference of payment will not be regarded as conclusive on that issue.

Hence, for failure to present evidence to prove payment, petitioners defaulted in their defense and in effect admitted the allegations of private respondents.

182. Neri vs. NLRC, Far East Bank and Trust Co.

[G.R. Nos. 97008-09. July 23, 1993]

DOCTRINE:There is "labor-only" contracting where: (a) the person supplying workers to an employer does not have substantial capital or investment in the form of tools, equipment, machineries, work premises, among others; and, (b) the workers recruited and placed by such person are performing activities which are directly related to the principal business of the employer.

FACTS:Far Bast Bank and Trust Company (FBTC) was sued by two employees of Building Care Corporation (BCC) to compel the former to recognize them as its regular employees and be paid the same wages which its employees receive. In the proceeding, it was established that BCC had substantial capitalization of P1 Million or a stockholders equity of P1.5 Million. Thus the Labor Arbiter ruled that BCC was only job contracting and that consequently its employees were not employees of FEBTC. On appeal, such factual finding was affirmed by the NLRC. Nevertheless, petitioners insist that BCC is engaged in "labor-only" contracting because it failed to adduce evidence purporting to show that it invested in the form of tools, equipment, machineries, work premises and other materials which are necessary in the conduct of its business. Moreover, petitioners argue that they perform duties which are directly related to the principal business or operation of FEBTC. Consequently, they must be deemed employees of respondent bank by operation of law since BCC is merely an agent of FEBTC.

ISSUE:Whether or not BCC is engaged in “labor-only” contracting, making FBTC the employer of the petitioners.

HELD:No. BCC cannot be considered a "labor-only" contractor because it has substantial capital. While there may be no evidence that it has investment in the form of tools, equipment, machineries, work premises, among others, it is enough that it has substantial capital, as was established before the Labor Arbiter as well as the NLRC. In other words, the law does not require both substantial capital and investment in the form of tools, equipment, machineries, etc. This is clear from the use of the conjunction "or". If the intention was to require the contractor to prove that he has both capital and the requisite investment, then the conjunction "and" should have been used. But, having established that it has substantial capital, it was no longer necessary for BCC to further adduce evidence to prove that it does not fall within the purview of "labor-only" contracting. There is even no need for it to refute petitioners' contention that the activities they perform are directly related to the principal business of respondent bank.

183. Manila Water Co. vs. Pena, et al.

[G.R. No. 158255. July 8, 2004]

DOCTRINE:

Job contracting is permissible only if the following conditions are met: 1) the contractor carries on an independent business and undertakes the contract work on his own account under his own responsibility according to his own manner and method, free from the control and direction of his employer or principal in all matters connected with the performance of the work except as to the results thereof; and 2) the contractor has substantial capital or investment in the form of tools, equipment, machineries, work premises, and other materials which are necessary in the conduct of the business.

FACTS:

Under a Concession Agreement with Manila Water Sewerage System (MWSS), Manila Water Co. undertook to absorb former employees of the MWSS whose names and positions were in the list furnished by the latter, while the employment of those not in the list was terminated on the day petitioner took over the operation. Private respondents, being contractual collectors of the MWSS, were among the 121 employees not included in the list; nevertheless, petitioner engaged their services without written contract from August 1, 1997 to August 31, 1997. Thereafter, on September 1, 1997, they signed a three-month contract to perform collection services for eight branches of petitioner in the East Zone. Before the end of the three-month contract, the 121 collectors incorporated the Association Collectors Group, Inc. (ACGI), which was contracted by petitioner to collect charges for the Balara Branch. Subsequently, most of the 121 collectors were asked by the petitioner to transfer to the First Classic Courier Services, a newly registered corporation. Only private respondents herein remained with ACGI. Petitioner continued to transact with ACGI to do its collection needs until February 8, 1999, when petitioner terminated its contract with ACGI.

Private respondents filed a complaint for illegal dismissal and money claims against petitioner, contending that they were petitioners employees as all the methods and procedures of their collections were controlled by the latter.

Petitioner, however, asserted that private respondents were employees of ACGI, an independent contractor. It maintained that it had no control and supervision over private

respondents manner of performing their work except as to the results. Thus, petitioner did not have an employer-employee relationship with the private respondents, but only a service contractor-client relationship with ACGI.

ISSUE:

Whether or not the employment of the respondents with ACGI was labor-only contracting.

HELD:

Yes. Under the following factual milieu, there is no doubt that ACGI was engaged in labor-only contracting, and as such, is considered merely an agent of the petitioner.

ACGI does not have substantial capitalization or investment in the form of tools, equipment, machineries, work premises, and other materials, to qualify as an independent contractor. Having only P62,500 as paid-in capital.The work of the private respondents was directly related to the principal business or operation of the petitioner. Being in the business of providing water to the consumers in the East Zone, the collection of the charges therefor by private respondents for the petitioner can only be categorized as clearly related to, and in the pursuit of the latters business.ACGI did not carry on an independent business or undertake the performance of its service contract according to its own manner and method, free from the control and supervision of its principal, petitioner. Prior to private respondents alleged employment withACGI, they were already working for petitioner, subject to its rules and regulations in regard to the manner and method of performing their tasks. This form of control and supervision never changed although they were already under the seeming employ of ACGI.

In labor-only contracting, the statute creates an employer-employee relationship for a comprehensive purpose: to prevent a circumvention of labor laws. The contractor is considered merely an agent of the principal employer and the latter is responsible to the employees of the labor-only contractor as if such employees had been directly employed by the principal employer.[20] Since ACGI is only a labor-only contractor, the workers it supplied should be considered as employees of the petitioner.

184. San Miguel Corp. Vs. Aballa, et al., G.R. No. 149011, June 28, 2005

Facts:

San Miguel Corp. Entered into a “Contract of Services” with Sunflower Multi-Purpose Cooperative, to be effective for one year, starting January 1, 1993, subject to renewal. The services, to be redered to SMC’s Shrimp Processing Plant at Bacolod, would consist of (1) messengerial-janitorial work, (2) shrimp harvesting and receiving, and (3) sanitation, washing, and cold storage. The contract stipulated that: (1) the cooperative shall employ the necessary personnel and provide adequate equipment, materials, and tools, over which the coop shall have the entire control and supervision; (2) no employer-employee relationship shall exist between SMC, and the coop and any of its members; the cooperative is an association of self-employed members, an independent contractor; subject to the control and the direction of San Miguel Corp. only as to the result of the work or service; (3) the coop shall have the exclusive direction in the selection, engagement and discharge of its member-workers; and (4) the coop undertakes to pay the wages, premium pay and benefits of its member-workers as well as the taxes.

In July 1995, 97 worker-members filed their complaint before the NLRC demanding their regularization as SMC employees with appertaining benefits and privileges. On September 15, 1995, SMC closed its Bacolod Shrimp Processing Plant and reported the closure to the DOLE. The workers charged SMC with illegal dismissal.

Denying employer-employee relationship, SMC pointed to Sunflower as the employer.

The labor arbiter and subsequently the NLRC dismissed the complaint. They held that the charge that the coop was a mere labor-only contractor had not been substantiated.

But the Court of Appeals reversed the ruling, a reversal that the Supreme Court substantially sustained. Citing the definitions of legitimate contracting and labor-only contracting in D.O. No. 18-02, the court concluded that the cooperative in this case did not qualify as an independent contractor. It was a labor-only contractor; hence, it was a mere agent of SMC, who therefore, was the employer of the complaining workers.

Issue: When is a Cooperative a Labor-only Contractor?

Ruling:

The Contract of Service between SMC and Sunflower shows that the parties clearly disavowed the existence of employer-employee relationship between SMC and the workers.

The language of the contract is not. However, determinative of the parties’ relationship, rather it is the totality of the facts and surrounding circumstances of the case.

While indeed Sunflower was issued Certificate of Registration No. ILO-875 on February 10, 1992 by the Cooperative Development Authority, this merely shows that it had at least P2,000.00 in paid-up share capital, which amount cannot be considered substantial capitalization.

What appears is that Sunflower does not have substantial capitalization or investment in the form of tools, equipment, machineries, work premises and other materials to qualify it as an independent contractor.

On the other hand, it is gathered that the lot, building, machineries and all other working tools utilized by private respondents (the complaint workers) in carrying out their tasks were owned and provided by SMC.

The alleged office of Sunflower is found within the confines of a small “carinderia” or “refreshment” (sic) owned by the mother of the Cooperative Chairman Roy Asong.

xxxIn said . . . . . office, the only equipment used and owned by Sunflower was a typewriter.

Furthermore, Sunflower did not carry on an independent business or undertake the performance of its service contract according to its own manner and method, free from the control and supervision of its principal, SMC, its apparent role having been merely to recruit persons to work for SMC.

Thus, it is gathered from the evidence adduced by the complaining workers before the labor arbiter that their daily time records were signed by SMC supervisors... which fact shows that SMC exercised the power of control and supervision over its employees. And control of the premises in which the workers worked was by SMC. These tend to disprove the independence of the contractor.

185. Philippine Bank of Communications vs. National Labor Relations Commission, Honorable Arbiter T.L. Dogelio, and R. Orpiada, G.R. No. L-66598, December 19, 1986

Facts:

Philippine Bank of Communications and the Corporate Executive Search, Inc. (CESI) entered into and agreement under which CESI would provide “Temporary Services” to PBCom consisting of eleven (11) messengers, one of whom was Orpiada who had been assigned to the bank since June 1975.

He rendered messengerial services to the bank, within its premises, together with others doing similar job. In or about October 1976, the bank requested CESI to withdraw Orpiada’s assignment because Orpiada’s services “were no longer needed.” Orpiada filed a complaint against the bank for illegal dismissal and failure to pay the 13th-month pay.

During the compulsory arbitration proceedings, the Bank impleaded CESI as an additional respondent. Both the bank and CESI maintained that CESI (and not the bank) was Orpiada’s employer.

Issue: Whether or not an employer-employee relationship existed between the bank and Orpiada.

Ruling:

The bank maintained that Orpiada was an employee of CESI. The bank documents its position by pointing to the following provisions of its letter agreement with CESI: xxx

2. Such individuals will nevertheless remain your (CESI’s) employees and you will, therefore, retain all liabilities arising from the new Labor Code as amended, Social Security act and other applicable governmental decrees, rules and regulations, xxx

There is of course, nothing illegal about hiring persons to carry out “a specific project or undertaking the completion or termination of which was determined at the time of engagement of the employee, or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season.” The letter f agreement itself, however, merely required CESI to furnish the bank with eleven (11) messengers for “a contract period from January 19, 1976-.” The eleven (11) messengers were thus supposed to render “temporary” services for an indefinite or unstated period of time. Ricardo Orpiada himself was assigned to the bank’s offices from June 25, 1975 and rendered services to the bank until sometime in October 1976, or a period of about sixteen months. Under the Labor Code,

however, any employee who has rendered at least one year of service, whether such service is continuous or not, shall be considered a regular employee (Article 281, second paragraph). Assuming, therefore, that Orpiada could properly be regarded as casual (as distinguished from a regular) employee of the bank, he becomes entitled to be regarded as a regular employee of the bank as soon as he had completed one year of service to the bank. Employers may not terminate the service of a regular employee except for a just cause or when authorized under the Labor Code (Article 280 [now 279], Labor Code). It is not difficult to see that to uphold the contractual agreement between the bank and CESI would in effect be to permit employers to avoid the necessity of hiring regular employees or permanent employees and to enable them to keep their employees indefinitely on a temporary or casual status, thus to deny them security of tenure on their jobs. Article 106 of the Labor Code is precisely designed to prevent such a result.

We hold that, in the circumstances of this case, CESI was engaged in “labor-only” contracting vis-a-vis the petitioner bank and in respect of Ricardo Orpiada, and that consequently, the petitioner bank is liable to Orpiada as if Orpiada had been directly employed not only by CESI but also by the bank. It may well be that the bank may in turn proceed against CESI to obtain reimbursement of, or some contribution to, the amounts which the bank will have to pay to Orpiada; but this is not necessary to determine here.

186. Tabas, et al. vs. California Manufacturing Company, Inc., et. al., G.R. No. 80680, January 26, 1989-

Facts:

The petitioner employees were employees of Livi Manpower Services, Inc. (Livi), which assigned them to work as “promotional merchandisers” of California Manufacturing under a manpower supply agreement. The agreement provided that California has no control or supervision whatsoever over Livi’s workers with respect ti how they accomplish their work, that Livi is an independent contractor and that “it is hereby agreed that it is the sole responsibility o Livi to comply with all existing as well as future laws, rules and regulations pertinent to employment of labor.”

It was further expressly stipulated that the assignment of workers to California shall be on a “seasonal and contractual basis.”

The petitioner employees were made to sign employment contracts with duration of six months, upon the expiration of which they signed new agreements with the same period, and so on. Unlike regular California employees, who received not less than P2,823.00 a month in addition to a host of fringe benefits and binuses, they received P38.56 plus P15.00 in allowance daily.

The petitioners now allege that they had become regular California employees and demand, as a consequence whereof, similar benefits. They likewise claim that they were notified by California that they would not be rehired, hence, they filed an amended complaint charging California with illegal dismissal.

Issue: The labor arbiter’s decision, affirmed by NLRC on appeal that no employer-employee relation exists between the petitioners and California.

Ruling:

We reverse.

The existence of an employer-employee relation is a question of law and being such, it cannot be made subject of agreement. Hence, the fact that the manpower supply agreement between Livi and California had specifically designated the former as the petitioner’s employer and had absolved the latter from any liability as an employer, will not erase either party’s obligations as an employer, if an employer-employee relation otherwise exist between the workers and either firm. At any rate, since the agreement between Livi and California, they alone are bound by it, and the petitioners cannot be made to suffer from its adverse consequences.

This Court has consistently ruled that the determination of whether or not there is an employer-employee relation depends upon four (4) standards: (10) the manner of selection and engagement of the putative employee; (2) the mode of payment of wages; 3) the presence or absence of a power of dismissal; and (4) the presence or absence of a power to control the putative employee’s conduct. Of the four, the right-of-control test has been held to be the decisive factor.

On the other hand, we have likewise held, based on Article 106 of Labor Code, xxx that notwithstanding the absence of a direct employer-employee relationship between the employer in whose favor work had been contracted out by a “labor-only” contractor, and the employees, the former has the responsibility, together with the “labor-only” contractor for any valid labor claims, by operation of law. The reason, so we held, is that the “labor-only” contractor is considered “merely an agent of the employer,” and liability must be shouldered by either one or shared by both.

It would have been different, we believe, had Livi been discretely a promotions firm, and that California had hired it to perform the latter’s merchandising activities. For then, Livi would have been truly the employer of its employees, and California, its client. The client, in that instant case, would have been a mere patron, and not an employer. The employees would not in that event be unlike waiters, who, although at the service of customers, are no the latter’s employees, but of the restaurant.

xxx

WHEREFORE, the petition is GRANTED. Judgement is hereby RENDERED: 2) ORDERING the respondent, California Manufacturing Company to REINSTATE the petitioners with full status and rights of regular employees; xxx all such other and further benefits as may be provided by exisiting collective bargaining agreement(s) or other relations, or by law xxx.

187. Mafinco trading corporation vs Ople

188. Insular Life Insurance Co vs NLRC

189. Rhone-Poulene Agrochemicals Philippines vs NLRC

190. Roland Escario and et.al vs. NLRC

Facts: Petitioners were employed by California Marketing Co., Inc. as merchandisers, whose main task is to withdraw stocks from warehouse, fix the prices, price tagging, displaying the products and inventory. Respondent, CMC is a domestic corporation principally engaged in the manufacturing of food products and distribution to retailers and wholesalers, while Donna Louise Advertising and Marketing Associates, Inc. is a duly registered promotional firm.

The petitioners alleged that their wages are only paid through CMC’s agent D.L Admark to avoid liability. But, the hiring, control, supervision and determination of wages are covered by CMC, even the equipment used in their job are all provided by CMC and not its agent. Petitioners filed a case before the Labor Arbiter for the regularization of their employment status. While the case is pending, D.L Admark sent a notice of termination, hence the information was amended which includes illegal dismissal.

The private respondent contends the CMC is not liable, since there’s no employer-employee relationship between them and the petitioners. It alleged that employees were hired by D.L Admark an independent job contractors who provide the necessary promotional activities for its product lines.

The Labor Arbiter held that petitioners are the employees of CMC as they were engaged in activities that are necessary and desirable in the usual business or trade of CMC. But, on appeal, the NLRC set aside the decision of the Labor Arbiter. It ruled that no employer-employee relationship existed between the petitioners and CMC. It, likewise, held that D.L. Admark is a legitimate independent contractor, hence, the employer of the petitioners.

Hence a petition for certiorari was filed.

Issue:

whether or not D.L. Admark is a labor-only contractor or an independent contractor?

Decision:

Affirmed assailed decision of NLRC in toto.

Ruling: D.L Admark is an independent contractor, as shown by below circumstances the respondent is a legitimate job contractor, to wit:(a) The SEC registration certificate of D.L. Admark states that it is a firm engaged in promotional, advertising, marketing and merchandising activities.(b) The service contract between CMC and D.L. Admark clearly provides that the agreement is for the supply of sales promoting merchandising services rather than one of manpower placement.(c) D.L. Admark was actually engaged in several activities, such as advertising, publication, promotions, marketing and merchandising. It had several merchandising contracts with companies like Purefoods, Corona Supply, Nabisco Biscuits, and Licron. It was likewise engaged in the publication business as evidenced by it magazine the "Phenomenon. (d) It had its own capital assets to carry out its promotion business. It then had current assets amounting to P6 million and is therefore a highly capitalized venture.

Moreover, by applying the four-fold test used in determining employer-employee relationship, the status of D.L. Admark as the true employer of petitioners is further established. The elements of this test are (1) the selection and engagement of employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employees conduct.

There is labor-only contracting when the contractor or sub-contractor merely recruits, supplies or places workers to perform a job, work or service for a principal. In labor-only contracting, the following elements are present: (a) The person supplying workers to an employer does not have substantial capital or investment in the form of tools, equipment, machineries, work premises, among others; and (b) The workers recruited and placed by such person are performing activities which are directly related to the principal business of the employer.

In Vinoya vs. NLRC, to be considered an independent contractor it is not enough to show substantial capitalization or investment in the form of tools, equipment, and machinery and work premises. In addition, the following factors need be considered: (a) whether the contractor is carrying on an independent business; (b) the nature and extent of the work; (c) the skill required; (d) the term and duration of the relationship; (e) the right to assign the performance of specified pieces of work; (f) the control and supervision of the workers; (g) the power of the employer with respect to the hiring, firing and payment of workers of the contractor; (h) the control of the premises; (i) the duty to supply premises, tools, appliances, materials, and labor; and (j) the mode, manner and terms of payment.

191. Radio Communication of the Philippines, Inc. vs. NLRC

Facts: On May 04, 1981, petitioner file with National Wages and Council an application for exemption from the coverage of Wage Order No. 1, but it was opposed by URCPICLA-FUR, a labor organization affiliated with the Federation of Unions of Rizal (FUR). The application was disapproved by NWC and ordered the petitioner to pay its covered employees the mandatory living allowance of P2.00 daily.

In March 1985, respondent filed a writ of execution asserting their claim of 15% of the total backpay due to all its members as "union service fee" for having successfully prosecuted the latter's claim for payment of wages and for reimbursement of expenses incurred by FUR and prayed for the segregation and remittance of said amount to FUR thru its National President. September of same year the union now claim 20% of total backpay.

The petitioner, entered into a compromise agreement with BMRCPI-NFL as the new bargaining agent of oppositors RCPI employee, without the knowledge of the union. The union filed a joint motion with NWC, alleging that compromise agreement between petitioner and BMRCPI-NFL is unjust and invalid being not a party in the case-at-bar.

Director of NWC, awarded the union 15% of total backpay and ordered petitioner to deposit the amount to the Regional Office. However, Secretary of Labor and Employment issued an order on August 18, 1986 modifying the order appealed from by holding petitioner solely liable to respondent union for 10% of the awarded amounts as attorney’s fees.

Issue: Whether or not the deduction of 10% to RCPI employee is valid?

Decision:

Petition is dismissed at bar

Ruling:

In Cristobal vs. ECC, Attorney's fee due the oppositor is chargeable against RCPI. The defaulting employer or government agency remains liable for attorney's fees because it compelled the complainant to employ the services of counsel by unjustly refusing to recognize the validity of the claim.

It is undisputed that oppositor (private respondent herein) was the counsel on record of the RCPI employees in their claim for ECOLA under Wage Order No. 1 since the inception of the proceedings at the National Wages Council up to the Supreme Court. It had therefore a valid claim for attorney's fee which it called union service fee.

Article 222 of the Labor Code requiring an individual written authorization as a prerequisite to wage deductions seeks to protect the employee against unwarranted practices that would diminish his compensation without his knowledge and consent. However, for all intents and purposes, the deductions required of the petitioner and the employees do not run counter to the express mandate of

the law since the same are not unwarranted or without their knowledge and consent. Also, the deductions for the union service fee in question are authorized by law and do not require individual check-off authorizations

192. Apodaca vs. NLRC

Facts: Petitioner, Ernesto Apodaca was employed by Intrans, Phils, Inc. On August 1985 he was persuaded by respondent Mirasol to subscribe to Php1,500 shares or for a total of Php150,000.00. He paid Php37,500.00. On September 1, 1975, petitioner was appointed President and General Manager of. However, on January 2, 1986, he resigned. Petitioner instituted with the NLRC a complaint against private respondents for the payment of his unpaid wages, his cost of living, and allowance, the balance of his gasoline and representation expenses and his bonus compensation for 1986. Private respondents admitted that there is due to petitioner the amount of Php17,060.07 but this was applied to the unpaid balance of his subscription in the amount of Php95,439.93. Petitioner questioned the set-off alleging that there was no call or notice for the payment of the unpaid subscription.

Issue:

Whether or not the unpaid subscription shall be deducted from his wage/salary?

Decision:

Petition is granted

Ruling:

For payment of the unpaid subscription, the NLRC cannot validly set it off against the wages and other benefits due petitioner. Article 113 of the Labor Code allows such a deduction from the wages of the employees by the employer, only in three instances, to wit:

ART. 113. Wage Deduction. — No employer, in his own behalf or in behalf of any person, shall make any deduction from the wages of his employees, except:

In cases where the worker is insured with his consent by the employer, and the deduction is to recompense the employer for the amount paid by him as premium on the insurance;

For union dues, in cases where the right of the worker or his union to checkoff has been recognized by the employer or authorized in writing by the individual worker concerned; and In cases where the employer is authorized by law or regulations issued by the Secretary of Labor.

193. Metropolitan Bank and trust company employees 102636

194. national federation of labor vs NLRC

195. manila mandarin in employees union vs NLRC

196. CAGAYAN SUGAR MILLING COMPANY, petitioner, vs. SECRETARY OF LABOR AND EMPLOYMENT, DIRECTOR RICARDO S. MARTINEZ, SR., and CARSUMCO EMPLOYEES UNION, respondents.

FACTS:

In this petition for certiorari, petitioner CAGAYAN SUGAR MILLING COMPANY (CARSUMCO) impugns the October 8, 1996 Decision of the Secretary of Labor, dismissing its appeal and upholding the Order of Regional Director Ricardo S. Martinez, Sr. Finding petitioner guilty of violating Regional Wage Order No. RO2-02.

On November 16, 1993, Regional Wage Order No. RO2-02was issued by the Regional Tripartite Wage and Productivity Board, Regional Office No. II of the Department of Labor and Employment (DOLE). It provided, inter alia, that:

"Section 1. Upon effectivity of this Wage Order, the statutory minimum wage rates applicable to workers and employees in the private sector in Region II shall be increased

labor inspectors from the DOLE Regional Office examined the books of petitioner to determine its compliance with the wage order and found violated the wage order as it did not implement an across the board increase in the salary of its employees

At the hearing at the DOLE Regional Office for the alleged violation, petitioner maintained that it complied with Wage Order No. RO2-02 as it paid the mandated increase in the minimum wage.

public respondent Regional Director Ricardo S. Martinez, Sr. ruled that petitioner violated Wage Order RO2-02 by failing to implement an across the board increase in the salary of its employees. He ordered petitioner to pay the deficiency in the salary of its employees in the total amount of P555,133.41

petitioner appealed to public respondent Labor Secretary Leonardo A. Quisumbing On the same date Regional Wage Board issued Wage Order No. RO2-02-Aamending the earlier wage order

Secretary of Labor dismissed petitioner's appeal and affirmed the Order of Regional Director Martinez, Sr. Petitioner's motion for reconsideration was likewise denied

private respondent CARSUMCO EMPLOYEES UNION moved for execution of the December 16, 1994 Order. Regional Director Martinez, Sr. granted the motion and issued the writ of execution

petitioner moved for reconsideration to set aside the writ of execution. On March 5, the DOLE regional sheriff served on petitioner a notice of garnishment of its account with the Far East Bank and Trust Company. On March 10, the sheriff seized petitioner's dump truck and scheduled its public sale on March 20, 1997

Hence, this petition, with a prayer for the issuance of a temporary restraining order (TRO)

Court issued a TRO enjoining respondents from enforcing the writ of execution. upon petitioner's motion, Court amended the TRO by also enjoining respondents from enforcing the Decision of the Secretary of Labor and conducting further proceedings until further orders from this Court.

ISSUE:

WON THE WAGE ORDER RO2-02 IS NULL AND VOID FOR HAVING BEEN ISSUED IN VIOLATION OF THE PROCEDURE PROVIDED BY LAW AND IN VIOLATION OF PETITIONER'S RIGHT TO DUE PROCESS OF LAW. And THE DECISION OF THE SECRETARY OF LABOR AND EMPLOYMENT IS NULL AND VOID FOR LACK OF ANY LEGAL BASIS.

HELD:

The petition has merit. Wage Order No. RO2-02, passed on November 16, 1993, provided for an increase in the statutory minimum wage rates for Region II. More than a year later, or on January 6, 1995, the Regional Board passed Wage Order RO2-02-A amending the earlier wage order and providing instead for an across the board increase in wages of employees in Region II, retroactive to the date of effectivity of Wage Order RO2-02.

We agree with Petitioner in holding public respondent Labor Secretary Quisumbing abused his discretion in upholding the validity of said wage order. The record shows that there was no prior public consultation or hearings and newspaper publication insofar as Wage Order No. RO2-02-A is concerned. In fact, these allegations were not denied by public respondents in their Comment. The public respondents' position is that there was no need to comply with the legal requirements of consultation and newspaper publication as Wage Order No. RO2-02-A merely clarified the ambiguous provision of the original wage order.

In passing RO2-02-A without going through the process of public consultation and hearings, the Regional Board deprived petitioner and other employers of due process as they were not given the opportunity to ventilate their positions regarding the proposed wage increase. In wage-fixing, factors such as fair return of capital invested, the need to induce industries to invest in

the countryside and the capacity of employers to pay are, among others, taken into consideration. Our legislators provide Regional Tripartite Boards composed of representatives from the government, the workers and the employers to determine the appropriate wage rates per region to ensure that all sides are heard. The Wage Order shall take effect only after publication in a newspaper of general circulation in the region. It is a fundamental rule, borne out of a sense of fairness, that the public is first notified of a law or wage order before it can be held liable for violation thereof. It is indisputable that there was no public consultation or hearing conducted prior to the passage of RO2-02-A. Neither was it published in a newspaper of general circulation as attested in the February 3, 1995 minutes of the meeting of the Regional Wage Board that the non-publication was by consensus of all the board members. Hence, RO2-02-A must be struck down for violation of Article 123 of the Labor Code

The court held that RO2-02-A is invalid for lack of public consultations and hearings and non-publication in a newspaper of general circulation, in violation of Article 123 of the Labor Code. We likewise find that public respondent Secretary of Labor committed grave abuse of discretion in upholding the findings of Regional Director Ricardo S. Martinez, Sr. that petitioner violated Wage Order RO2-02

197. ECOP vs. NWPC

(G.R. No. 96169 September 24, 1991)

Facts :

On October 15, 1990, the Regional Board of the National Capital Region issued Wage Order No. NCR-01, increasing the minimum wage by P17.00 daily in the National Capital Region. The Trade Union Congress of the Philippines (TUCP) moved for reconsideration; so did the Personnel Management Association of the Philippines (PMAP). ECOP opposed.

On October 23, 1990, the Board issued Wage Order No. NCR-01-A amending Wage Order No. NCR-01, as follows:

Section 1. Upon the effectivity of this Wage Order, all workers and employees in the private sector in the National Capital Region already receiving wages above the statutory minimum wage rates up to one hundred and twenty-five pesos (P125.00) per day shall also receive an increase of seventeen pesos (P17.00) per day.

ECOP appealed to the National Wages and Productivity Commission. On November 6, 1990, the Commission promulgated an Order, dismissing the appeal for lack of merit. On November 14, 1990, the Commission denied reconsideration.

Issue :

The Employers Confederation of the Philippines (ECOP) is questioning the validity of Wage Order No. NCR-01-A dated October 23, 1990 of the Regional Tripartite Wages and Productivity Board, National Capital Region, promulgated pursuant to the authority of Republic Act No. 6727.

Held :

The Commission noted that the increasing trend is toward the salary-cap method, which has reduced disputes arising from wage distortions (brought about, apparently, by the floor-wage method). Precisely, Republic Act No. 6727 was intended to rationalize wages, first, by providing for full-time boards to police wages round-the-clock, and second, by giving the boards enough powers to achieve this objective. The Court is of the opinion that Congress meant the boards to be creative in resolving the annual question of wages without labor and management knocking on the legislature's door at every turn.

WHEREFORE, premises considered, the petition is DENIED. No pronouncement as to costs.

198. MEYCAUAYAN COLLEGE, vs Drilon

FACTS:

Petitioner is a private educational institution duly organized and existing under Philippine laws, and operating in Meycauayan, Bulacan. On January 16, 1987, its board of trustees recognized the Meycauayan College Faculty and Personnel Association as the employees union in the Meycauayan College.

Prior to said recognition or on July 17, 1983, petitioner and the union, then headed by Mrs. Teresita V. Lim, entered into a collective bargaining agreement for 1983-1986. Article IV thereof provides:

SALARY SCALE

IV. 4.0 ANG ANTAS NG PAGPAPASUWELDO SA MGA GURO SA MATAAS NG PAARALAN AY UMAALINSUNOD SA PARAAN NG PAGRARANGGONG KALAKIP NITO BILANG "TAKDA" AT AYON PA RIN SA SUMUSUNOD NA HALAGA NG PAGPAPASUWELDO (IPATUTUPAD SA AÑO-ESCOLAR 1983-1986):

PAGSUBOK A (1-3 TAON) P51.50

KLASE 1 (4-5 TAON) P52.00

(6-8 TAON) P53.00

KLASE II (9-12 TAON) P54.00

KLASE III (13-14 TAON) P57.00

KLASE IV (15-17 TAON) P60.00

KLASE V (18-21 TAON) P63.00

(22 PATAAS) P70.00

When the collective bargaining agreement was entered into, the following presidential decrees were in effect:

(a) P.D No. 1389 dated May 29, 1978 adjusting the existing statutory minimum wages;

(b) P.D. No. 1713 dated August 18, 1980 providing for an increase in the minimum daily wage rates and for additional mandatory living allowances, and ;

(c) P.D. No. 1751 dated May 14, 1980 increasing the statutory daily minimum wage at all levels by P4.00 after integrating the mandatory emergency living allowance under P.D. Nos. 525 and 1123 into the basic pay of all covered workers. Wage Order No. 2 increasing the mandatory

basic minimum wage and living allowance was also issued on July 6, 1983 just before the collective bargaining agreement herein involved was entered into.

During the lifetime of the collective bargaining agreement, the following were issued:

(a) Wage Order No. 3 dated November 7, 1983 increasing the minimum daily living allowance in the private sector;

(b) Wage Order No. 4 dated May 1, 1984 integrating as of said date the emergency cost of living allowances under P.D. Nos. 1614, 1634 and 1713 into the basic pay of covered workers in the private sector;

(c) Wage Order No. 5 dated June 11, 1984 increasing the cost of living allowance of workers in the private sector whose basic salary or wage is not more than P1,800 a month; and

(d) Wage Order No. 6 dated October 26, 1984 increasing the daily living allowances.

The union admits herein that its members were paid all these increases in pay mandated by law. It appears, however, that in 1987, shortly after union president Mrs. Teresita V. Lim, who held the managerial position of registrar of the college, had turned over the presidency of the union to Mrs. Fe Villarico, the latter unintentionally got a copy of the collective bargaining agreement and discovered that Article IV thereof had not been implemented by the petitioner.

Consequently, on March 27, 1987, the union filed with the Department of Labor and Employment, Regional Office No. III in San Fernando, Pampanga, a notice of strike on the ground of unfair labor practice alleging therein violation of the collective bargaining agreement particularly the provisions of Article IV thereof on salary scale.

ISSUE:

1. Whether increases in employees' salaries resulting from the implementation of presidential decrees and wage orders, which are over and above the agreed salary scale contracted for between the employer and the employees in a collective bargaining agreement, preclude the employees from claiming the difference between their old salaries and those provided for under said salary scale.

RULING:

"Non-compliance with the mandate of a standards law or decree may give rise to an ordinary action for recovery while violation of a collective bargaining agreement may even give rise to a criminal action for unfair labor practice. And while the relief sought for violation of a standards law or decree is primarily for restitution of (an) unpaid benefits, the relief sought for violating a CBA is ordinarily for compliance and desistance. Moreover, there is no provision in the aforecited Presidential Decrees providing that compliance thereto is sufficient compliance with a provision of a collective bargaining agreement and vice-versa." The dispositive portion of the Secretary's order of September 9, 1987 states:

WHEREFORE, the Management of Meycauayan College is hereby ordered to:

1) Strictly effect the payment of salaries of the union members in accordance with the provisions of the collective bargaining agreement;

2) Pay the covered union members salary differential computed by subtracting the salary actually paid and received by them per period provided in the collective bargaining agreement for school years 1983-1984; 1984-1985 and 1985-1986 including the differential for the 13th month pay for the same period. 5

The petition has no merit.

As correctly ruled by public respondent, a collective bargaining agreement is a contractual obligation. It is distinct from an obligation imposed by law. The terms and conditions of a collective bargaining contract constitute the law between the parties. Beneficiaries thereof are therefore, by right, entitled to the fulfillment of the obligation prescribed therein. Consequently, to deny binding force to the collective bargaining agreement would place a premium on a refusal by a party thereto to comply with the terms of the agreement. Such refusal would constitute an unfair labor practice.

Nevertheless, as the key to the interpretation of contracts, including collective bargaining agreements, is the intention of the parties, we examined the record and found the undisputed allegation of private respondent that the collective bargaining agreement herein involved was entered into by the parties to improve the plight of the teachers by increasing their salary. The parties increased the teachers' salary or rate per period, by drafting a salary scale "based on the length of service" of the teachers and eventually came up with Article IV aforequoted. From this unrebutted allegation, it is clear that the parties wanted to attain one goal — increase the salaries of the teachers on the basis of their length of service. Hence, it is immaterial that the means by which said goal is achieved is through the alteration of the salary scale.

On the issue of prescription, Article 291 (now Art. 290) of the Labor Code herein invoked by petitioner, provides:

Offenses. — Offenses penalized under this Code and the rules and regulations issued pursuant thereto shall prescribe in three (3) years.

All unfair labor practices arising from Book V shall be filed with the appropriate agency within one (1) year from accrual of such unfair labor practice; otherwise, they shall be forever barred.

The one-year prescriptive period is inapplicable in this case because of peculiar factual circumstances which petitioner has not denied. Although the collective bargaining agreement covers school years 1983 to 1986, a copy of the agreement was only made available to the union in 1987. Immediately thereafter, the union sought its implementation. The union members might have been aware of the existence of the collective bargaining agreement but that fact that their president was actually a management employee being petitioner's registrar, they must have been deterred from demanding its implementation earlier. Hence, to apply the provisions of Article 290 (Art. 291) would be unfair and prejudicial to the union members particularly those who have served petitioner for a number of years who stand to benefit most from the salary scale.

Article 264(g), now Article 263(g) of the Labor Code is broad enough to give the Secretary of Labor the power to take jurisdiction over what appears at first blush to be an ordinary money claim. Claims for pay differentials may have that character but, as earlier stated, if they arise out of a violation of a collective bargaining agreement, they assume the character of an unfair labor practice and are, therefore, well within the ambit of the jurisdiction of the Secretary of Labor to decide.the decision of the Secretary of Labor is hereby AFFIRMED and the temporary restraining order of February 15,1989 is LIFTED.

This decision is immediately executory. Costs against the petitioner.

199. St. Joseph College vs. St. Joseph College Workers Association

Facts: Petitioner is a non-stock, non-profit Catholic educational institution while respondent is a

legitimate labor organization which is currently the official bargaining representative of all

employees of petitioner except the faculty and consultants of the Graduate School, managerial

employees and those who occupy confidential positions. Respondent has an existing CBA with

petitioner for the period from June 1, 1999 to May 31, 2004. For the SY 2000-2001, petitioner

increased its tuition fees for all its departments. Based on petitioner’s computation, the

incremental proceeds from the tuition fees increase for SY 2000-2001 is P1,560,942.74, 85% of

which is equivalent to P1,326,801.33. Consequently, respondent averred that 85% of

P4,906,307.58, which is P4,170,360.59 should have been released to its members as provided for

in their CBA effective June 1, 2000.

Issue: Whether the 70% - 30% tuition fee increase or the Incremental Proceeds from Tuition Fee

Increase is allocated properly.

Held: Petitioner argues that incremental proceeds should be determined on the basis of the

schools income, not merely on the categorical increase in tuition fee as determined by the

CA. Petitioner explains that if the present years income is less than that of the previous year due

to a lesser number of current enrollees, then there may be no gain or incremental proceeds, but a

loss or decreased proceeds.

The law allows an increase in school tuition fees on the condition that 70 percent of the

increase shall go to the payment of personnel benefits. Plainly unsupported by the law or

jurisprudence is petitioner’s contention that the payment of such benefits should be based not

only on the rate of tuition fee increases, but also on other factors like the decrease in the number

of enrollees; the number of those exempt from paying the fees, like scholars; the number of

dropouts who, as such, do not pay the whole fees; and the bad debts incurred by the school.

The financial dilemma of petitioner may deserve sympathy and support, but its remedy lies not in the judiciary but in the lawmaking body.

The law plainly states that 70 percent of the tuition fee increase shall be allotted for the teaching and the nonteaching personnel; and that the payment of other costs of operation, together with the improvement of the school’s infrastructure, shall be taken only from the remaining 30 percent. The law does not speak, directly or indirectly, of the contention of petitioner that in the event that its total tuition income is lesser than that in the previous year, then the whole amount

of the increase in tuition fee, and not merely up to 30 percent as provided by law, may be used for the improvement and modernization of infrastructure and for the payment of other costs of operation.

200. COCOFED ET AL. vs. HON. CRESENCIANO B. TRAJANO, ET AL.

DOCTRINE

Under RA No. 6727, otherwise known as the Wage Rationalization Act and its

implementing rules, the Department of Labor and Employment shall conduct inspection as often

as possible or necessary, within its manpower constraint, of the payroll and other financial

records kept by the company or business, to determine whether the workers are paid the

prescribed minimum wage rates and other benefits granted by law or any wage order.

FACTS

An inspection conducted by the Department in response to the complaints filed by two

employees, revealed that COCOFED was guilty of underpayment of wages, emergency cost of

living allowance (ECOLA) and 130-month pay. A notice of inspection results was issued

requiring COCOFED to effect restitution or correction within five (5) days from notice.

Thereafter, summary investigations were conducted. COCOFED alleged that complainants

worked for less than eight hours minimum of four and a maximum of six, and that, therefore,

COCOFED was justified in paying an amount less than the statutory minimum wage. The

Regional Director issued a Compliance Order, ruling that the documents confirmed the

manifestation by the counsel of complainants that the workers paid on a daily and monthly basis

are receiving wages below the statutory minimum.

COCOFED appealed to the Secretary of Labor and Employment who denied the appeal

and ruled that:

“On the basis of the payrolls submitted by the respondents, we find that the Regional

Director was correct in ruling that the complainants are daily-paid workers. While respondents

claims that in 1985 these workers were paid on a piece-rate-basis, still the payrolls show that

from March 1985 to February 1989, the complainants were paid on a daily basis. Granting that

these workers were indeed converted to piece-rate-workers, said conversion is an outright

violation of the Labor Code. An employer cannot unilaterally decrease the salary being given to

the employees pursuant to Article 100 of the Labor Code. What it has voluntarily given cannot

be unilaterally withdrawn. Besides, the implementing rules are explicit to the effect that nothing

therein shall justify an employer from withdrawing or reducing benefits or supplements provided

in existing individual or collective agreement or employer practice or policy.”

ISSUES

Whether the Regional Director and the Secretary of Labor committed grave abuse of

discretion in not categorizing COCOFED as an establishment with less than 30 employees and

with a paid-up capital of P500,000.00 or less,?

Whether the Regional Director and the Secretary of Labor committed grave abuse of

discretion in not finding that complainants are piece-rate workers or paid by results?

RULING

The Court found no grave abuse of discretion on the part of the public respondent.

The petitioner would have the Court overturn the factual finding of public

respondents, in that its contention is that the employees are daily paid workers. The Court

however ruled to the contrary, since the payroll submitted does not support the petitioner’s

contention. Findings of administrative agencies which have acquired expertise because their

jurisdiction is confined to specific matters are generally accorded not only respect but finality.

Moreover, there is absolutely nothing in the records which show that petitioner's employees

worked for less than eight hours. Finally, there would have been no need for petitioner to

make an offer increasing the wage to P45.00 per day if complainants were indeed piece rate

workers, as it claimed and if their wages were not underpaid, as found by public respondents.

201. CEBU OXYGEN & ACETEYLENE CO., INC V. DRILON

DOCTRINE

The provisions of Republic Act No. 6640, do not prohibit the crediting of CBA

anniversary wage increases for purposes of compliance with Republic Act No. 6640. The

implementing rules cannot provide for such a prohibition not contemplated by the law.

Administrative regulations adopted under legislative authority by a particular department must

be in harmony with the provisions of the law, and should be for the sole purpose of carrying into

effect its general provisions. The law itself cannot be expanded by such regulations. An

administrative agency cannot amend an act of Congress.

FACTS

RA No. 6640, passed on December 14, 1987, increased by ten pesos the statutory

minimum daily wage rate of workers and employees in the private sector, whether agricultural or

non-agricultural. The Secretary of Labor issued the pertinent rules implementing RA No. 6640,

Sec. 8 of which provides: “No wage increase shall be credited as compliance with the increase

prescribed herein unless expressly provided under valid individual written/ collective

agreements; and, provided further, that such wage increase was granted in anticipation of the

legislated wage increase under the Act. Such increases shall not include anniversary wage

increase provided in collective bargaining agreements.”

Cebu Oxygen Co. and the union of its rank-and-file employees entered into a collective

bargaining agreement covering the years 1986 to 1988. Under the CBA, the management gave

salary increases. The Regional Director ordered Cebu Oxygen Co. to pay the deficiency of P200

in the monthly salary and P231 in the 13th-month pay of its employees for the period stated. Cebu

Oxygen protested the director’s order, saying that the anniversary wage increase under the CBA

could be credited against the wage increase mandated by RA No. 6640. It argued that the

payment of the differentials constituted full compliance with RA No. 6640.

ISSUE

Whether the wage increase under the CBA can be credited as compliance with the

statutory wage increase?

HELD

Cebu Oxygen correctly contended that the salary increases granted by it pursuant to the

existing CBA including anniversary wage increase should be considered in determining

compliance with the wage increase mandated by RA No. 6640. It therefore correctly credited its

employees P62 for the differential of two (2) month’s increase and P31.00 each for the

differential in the 13th-month pay after deducting the P200 anniversary wage increase for 1987

under the Collective Bargaining Agreement.

Section 8 of the Rules Implementing RA No. 6640 is declared null and void insofar as it

excluded the anniversary wage increases negotiated under collective bargaining agreements from

being credited to the wage increases provided for under RA No. 6640.

202. ODIN SECURITY AGENCY VS. HON. DIONISIO DE LA SERNA ET AL.

DOCTRINE

The requirement of due process is satisfied when the parties are given an opportunity to

submit position papers; what the fundamental law abhors is not absence of previous notice but

the absolute lack of opportunity to be heard.

FACTS

The private respondents (employee) filed with the Department of Labor and

Employment, a complaint charging the petitioner employer with underpayment of wages, illegal

deductions, non-payment of night shift differential, overtime pay, etc. When conciliation efforts

failed, the parties were required to submit their position papers. Based on the position papers, the

Regional Director issued an order directing the employer to pay the employees the benefits

prayed for.

Claiming that he was denied due process, the petitioner filed a motion for reconsideration

which was treated as an appeal. The Undersecretary affirmed with modification then order of the

Regional Director.

Hence, the petitioner filed a petition for certiorari and prohibition.

ISSUE

Whether the requirement of due process had been satisfied?

RULING

Requirement of the process is satisfied when the parties are given an opportunity to

submit position papers; what the fundamental law abhors is not absence of previous notice but

the absolute lack of opportunity to be heard. – The petitioner was not denied due process, for

several hearings were in fact conducted by the hearing officer of the Regional Office of the

DOLE and the parties’ submitted position papers upon which in the Regional Director based his

decision in the case. The requirements of due process are satisfied when the parties are given an

opportunity to submit position papers.

The principle of jurisdiction by estoppel. – The petitioner is stopped from questioning the

alleged lack of jurisdiction of the Regional Director over the private respondent’s claims.

Petitioner submitted to the jurisdiction of the Regional Director by taking part in the hearings

before him and by submitting a position paper. This act of participation amounts to estoppels,

that is, action speaks louder than words; the law does not allow a person to speak against his own

act or deed.

203. Urbanes Etc. vs Hon. Security of Labor

204. Zialeita vs PAL

205. Olympia Gualberto vs Marinduque Mining Industrial Corporation

206. Apex Mining Co., Inc. vs NLRC

207. Philippine Global Communications Inc. 157214

208. Jose B. Sarmiento vs Employees Compensation commission 65680

209. raro vs employees 58445

210. belarmino vs employees 90104

211. Hinoguin 8430

212. GSIS vs CA 128524

213. Valeriano 136200

214. Iloilo dock L-26341

215. Alano vs ECG L-48594

216. Lazo vs Employees 78617

217. Menez 48488

218. Mabuhay shipping vs NLRC 94167

219 IME vs PINEDA 115497

220 NAESS vs NLRC 73441

221 Ysmael vs Avelino 43674

222 Vicente vs ECC 85024

223 Abaya vs Employees 64255

224 Orlino vs Employees 85015

225 Vicente vs ECC 85024

226 GSIS vs Court of Appeals 117572

227 Canonizado vs Almeda L-13005

228 Manzuno vs ECC 88573

229 ECC vs E. Sanico 13428

230 Suanes vs. Workmen’s Compensation Commission 42808