Labor Digests

LABOR LAW 1 DIGESTS BATCH 6 (Cases 96-111) Batch 4 Block 4 (2015)

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CASE 96: BERNARDO VS. NLRC Author: Karla Rose Gutierrez Topic: Rights and Privileges DOCTRINE: The Magna Carta for Disabled Persons mandates that qualified disabled persons be granted the same terms and conditions of employment as qualified able-bodied employees. Once they have attained the status of regular workers, they should be accorded all the benefits granted by law, notwithstanding written or verbal contracts to the contrary. This treatments is rooted not merely on charity or accomodation, but on justice for all. FACTS: Complainants numbering 43 are deaf-mutes who were hired on various periods from 1988 to 1993 by respondent Far East Bank and Trust Co. as Money Sorters and Counters through a uniformly worded agreement called "Employment Contract for Handicapped Workers". (pp. 68 & 69, Records). Disclaiming that complainants were regular employees, respondent Far East Bank and Trust Company maintained that complainants who are a special class of workers — the hearing impaired employees were hired temporarily under [a] special employment arrangement which was a result of overtures made by some civic and political personalities to the respondent Bank; that complainant[s] were hired due to "pakiusap" which must be considered in the light of the context career and working environment which is to maintain and strengthen a corps of professionals trained and qualified officers and regular employees who are baccalaureate degree holders from excellent schools which is an unbending policy in the hiring of regular employees;

that in addition to this, training continues so that the regular employee grows in the corporate ladder;

that the idea of hiring handicapped workers was acceptable to them only on a special arrangement basis;

that it was adopted the special program to help tide over a group of workers such as deaf-mutes like the complainants who could do manual work for the respondent Bank;

that the task of counting and sorting of bills which was being performed by tellers could be assigned to deaf-mutes that the counting and sorting of money are tellering works which were always logically and naturally part and parcel of the tellers' normal functions;

that from the beginning there have been no separate items in the respondent Bank plantilla for sortes or counters;

that the tellers themselves already did the sorting and counting chore as a regular feature and integral part of their duties (p. 97, Records);

that through the "pakiusap" of Arturo Borjal, the tellers were relieved of this task of counting and sorting bills in favor of deaf-mutes without creating new positions as there is no position either in the respondent or in any other bank in the Philippines which deals with purely counting and sorting of bills in banking operations.

The Labor Arbiter and NLRC ruled that Article 280 was not controlling as complainants were hired as an accommodation to the recommendation of civic oriented personalities whose employments were covered by Employment Contracts with special provisions on duration of contract as specified under Art. 80. Hence, the terms of the contract was be the law between the parties. Complainants allege that the contracts served to preclude the application of Article 280 and to bar them from becoming regular employees. Company F submits that complainants were hired as special workers under Art. 80 of the Labor Code and they never solicited the services of petitioners. ISSUE: Whether complainants regular employees? RULING: Yes. The enactment of RA 7277, the Magna Carta for Disabled Persons, justify the application of Art. 280 of the Labor Code. Such law mandates that a qualified disabled employee should be given the same terms and conditions of employment as a qualified able bodies person. The fact that complainants were qualified disabled persons removes the employment contracts from the ambit of Art. 280, since the Magna Carta accords them the rights of qualified able-bodied persons. The task of complainants was necessary and desirable in the usual trade of the employer and therefore they should be deemed regular employees. The term limit in the contract was premised on the fact that the petitioners were disabled, and that the bank had to determine their fitness for the position. Indeed, its validity is based on Article 80 of the Labor Code. But as noted earlier, petitioners proved themselves to be qualified disabled persons who, under the Magna Carta for


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Disabled Persons, are entitled to terms and conditions of employment enjoyed by qualified able-bodied individuals; hence, Article 80 does not apply because petitioners are qualified for their positions. The validation of the limit imposed on their contracts, imposed by reason of their disability, was a glaring instance of the very mischief sought to be addressed by the new law. Moreover, it must be emphasized that a contract of employment is impressed with public interest. Provisions of applicable statutes are deemed written into the contract, and the "parties are not at liberty to insulate themselves and their relationships from the impact of labor laws and regulations by simply contracting with each other."

Clearly, the agreement of the parties regarding the period of employment cannot prevail over the provisions of the Magna Carta for Disabled Persons, which mandate that petitioners must be treated as qualified able-bodied employees. DISPOSITIVE: Petition Granted. The June 20, 1995 Decision and the August 4, 1995 Resolution of the NLRC are REVERSED and SET ASIDE. Respondent Far East Bank and Trust Company is hereby ORDERED to pay back wages and separation pay to each of the following twenty-seven (27) petitioners CASE 97: MANILA TERMINAL COMPANY, INC., vs. THE COURT OF INDUSTRIAL RELATIONS and MANILA TERMINAL RELIEF AND MUTUAL AID ASSOCIATION Author: LJ Pantorgo Topic: illegal Recruitment DOCTRINE: It is high time that all employers were warned that the

public is interested in the strict enforcement of the Eight – Hour

Labor Law. This was designed not only to safeguard the health and

welfare of the laborer or employee, but in a way to minimize

unemployment by forcing employers, in cases where more than 8 –

hour operation is necessary, to utilize different shifts of laborers or

employees working only for 8 hour each.

FACTS: In 1945, the Manila Terminal Company, Inc. undertook the arrastre service in some of the piers in Manila's Port Area at the request and under the control of the United States Army. The

petitioner hired some thirty men as watchmen on twelve-hour shifts at a compensation of P3 per day for the day shift and P6 per day for the night shift. In 1946, the petitioner began the postwar operation of the arrastre service at the present at the request and under the control of the Bureau of Customs, by virtue of a contract entered into with the Philippine Government. The watchmen of the petitioner continued in the service with a number of substitutions and additions, their salaries having been raised during the month of February to P4 per day for the day shift and P6.25 per day for the nightshift. In 1947, Dominador Jimenez, a member of the Manila Terminal Relief and Mutual Aid Association, sent a letter to the Department of Labor, requesting that the matter of overtime pay be investigated, but nothing was done by the Department. Victorino Magno Cruz and five other employees, also member of the Manila Transit Mutual Aid Association, filed a 5-point demand with the Department of Labor, including overtime pay, but the Department again filed to do anything about the matter. On May 27, 1947, the petitioner instituted the system of strict eight-hour shifts. The Manila Port Terminal Police Association, not registered in accordance with the provisions of Commonwealth Act No. 213, filed a petition with the Court of Industrial Relations. On July 16, 1947, the Manila Terminal Relief and Mutual Aid Association was organized for the first time, having been granted certificate No. 375 by the Department of Labor. Manila Terminal Relief and Mutual Aid Association filed an amended petition with the CIR praying that the petitioner be ordered to pay its watchmen or police force overtime pay from the commencement of their employment. By virtue of Customs Administrative Order No. 81 and Executive Order No. 228 of the President of the Philippines, the entire police force of the petitioner was consolidated with the Manila Harbor Police of the Customs Patrol Service, a Government agency under the exclusive control of the Commissioner of Customs and the Secretary of Finance The Manila Terminal Relief and Mutual Aid Association will hereafter be referred to as the Association.


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Judge V. Jimenez Yanson of the Court of Industrial Relations ordered the petitioner to pay to its police force. The case alleviated in which Judge Lanting ruled; 1.) The decision under review should be affirmed in so far it grants compensation for overtime on regular days during the period from the date of entrance to duty to May 24, 1947, such compensation to consist of the amount that corresponds to the four hours’ overtime at the regular rate and an additional amount of 25 per cent thereof. 2.) As the compensation for work done on Sundays and legal holidays, the petitioner should pay its watchmen the compensation that corresponds to the overtime (in excess of 8 hours) at the regular rate only. 3.) The watchmen are not entitled to night differential pay for past service, and therefore the decision should be reversed. The petitioner has filed a present petition for certiorari contending that the agreement under which its police force were paid certain specific wages for twelve-hour shifts, included overtime compensation. ISSUE: WON the agreement under which its police force were paid certain specific wages for 12 hour shifts, includes the overtime compensation RULING: No. The important point stressed by the petitioner is that the contract between it and the Association upon the commencement of the employment of its watchman was to the certain rates of pay, including overtime compensation namely, P3 per day for the day shift and P6 per day for night shift beginning September 1, 1945, and P4 per day shift and P6.25 per day for the night shift since February, 1946. The record does not bear out these allegations. The petitioner has relied merely on the facts that its watchmen had worked on twelve-hour shifts at specific wages per day and that no complaint was made about the matter until, first on March 28, 1947 and, secondly, on April 29, 1947 The Court ruled that in times of acute employment, regardless of its terms and conditions, their main concern in the first place being admission to some work. The petitioner’s watchmen must have railroaded themselves into their employment for their subsistence,

although they found themselves required to work for 12 hours a day. True, there was agreement to work, but it cannot fairly be supposed that they had the freedom to bargain in any way, much less to insist in the observance of the 8 hour labor law. Also, there was no reduction was made in the salaries which its watchmen received under the 12 hour arrangement. Although, it may be argued that the salary for the night shift was lessened, the fact that the rate for the day shift was increased in a sense tends to militate against the contention that the salaries given during the 12 hour shifts included overtime compensation. The law gives the Association the right to extra compensation. And they could not be held to have impliedly waived such extra compensation, for the obvious reason that could not have expressly waived it. It is high time that all employers were warned that the public is interested in the strict enforcement of the Eight – Hour Labor Law. This was designed not only to safeguard the health and welfare of the laborer or employee, but in a way to minimize unemployment by forcing employers, in cases where more than 8 – hour operation is necessary, to utilize different shifts of laborers or employees working only for 8 hour each. DISPOSITIVE PORTION: Wherefore, the appealed decision, in the form voted by Judge Lanting, is affirmed, it being understood that the petitioner's watchmen will be entitled to extra compensation only from the dates they respectively entered the service of the petitioner, hereafter to be duly determined by the Court of Industrial Relations. CASE 98: SAN MIGUEL CORP. VS LAYOC JR. Author: Jimuel Dave L. Matias Topic: Managerial Employees DOCTRINE: Generally, managerial employees are not entitled to overtime pay for services rendered in excess of eight hours a day. FACTS: Respondents were among the Supervisory Security Guards of the Beer Division of the San Miguel Corporation. They started working as guards with the petitioner San Miguel Corporation assigned to the Beer Division on different dates until such time that they were promoted as supervising security guards. As supervising


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security guards, the private respondents were performing a lot of functions. From the commencement of their employment, the private respondents were required to punch their time cards for purposes of determining the time they would come in and out of the company’s work place. Private respondents were availing the benefits for overtime, holiday and night premium duty through time card punching. However, San Miguel Corporation embarked on a Decentralization Program aimed at enabling the separate divisions of the San Miguel Corporation to pursue a more efficient and effective management of their respective operations. As a result of the Decentralization Program, the Beer Division of the San Miguel Corporation implemented a no time card policy whereby the Supervisory I and II composing of the supervising security guards of the Beer Division were no longer required to punch their time cards. Without prior consultation with the private respondents, the time cards were ordered confiscated and the latter were no longer allowed to render overtime work. In lieu of the overtime pay and the premium pay, the personnel of the Beer Division of the petitioner San Miguel Corporation affected by the No Time Card Policy were given a 10% across-the-board increase on their basic pay while the supervisors who were assigned in the night shift were given night shift allowance ranging from P2,000.00 to P2,500.00 a month. Respondents filed a complaint for unfair labor practice, violation of Article 100 of the Labor Code of the Philippines, and violation of the equal protection clause and due process of law in relation to paragraphs 6 and 8 of Article 32 of the New Civil Code of the Philippines. Respondents stated that the Beer Division of SMC maliciously and fraudulently refused payment of their overtime, holiday, and night premium pay because of the no time card policy. Moreover, petitioners had no written authority to stop respondents from punching their time cards because the alleged memorandum authorizing such stoppage did not include supervisory security guards. Thus, the respondents suffered a diminution of benefits, making petitioners liable for non-payment of overtime, holiday, and night premium pay. Petitioners maintained that respondents were supervisory security guards who were exempt from the provisions of the Labor Code on hours of work, weekly rest periods, and rest days. The no time card policy did not just prevent respondents from punching their time cards, but it also granted respondents an across-the-board increase of 10% of basic salary and either a P2,000 or P2,500 night shift

allowance on top of their yearly merit increase. Petitioners further asserted that the no time card policy was a valid exercise of management prerogative and that all supervisors in the Beer Division were covered by the no time card policy, which classification was distinct and separate from the other divisions within SMC. ISSUE: Whether the circumstances in the present case constitute an exception to the rule that supervisory employees are not entitled to overtime pay. RULING: The petition has merit. Both petitioners and respondents agree that respondents are supervising security guards and, thus, managerial employees. The dispute lies on whether respondents are entitled to render overtime work and receive overtime pay despite the institution of the no time card policy because (1) SMC previously allowed them to render overtime work and paid them accordingly, and (2) supervising security guards in other SMC divisions are allowed to render overtime work and receive the corresponding overtime pay. Article 82 of the Labor Code states that the provisions of the Labor Code on working conditions and rest periods shall not apply to managerial employees. The other provisions in the Title include normal hours of work (Article 83), hours worked (Article 84), meal periods (Article 85), night shift differential (Article 86), overtime work (Article 87), undertime not offset by overtime (Article 88), emergency overtime work (Article 89), and computation of additional compensation (Article 90). It is thus clear that, generally, managerial employees such as respondents are not entitled to overtime pay for services rendered in excess of eight hours a day. Respondents failed to show that the circumstances of the present case constitute an exception to this general rule. First, respondents assert that Article 100 of the Labor Code prohibits the elimination or diminution of benefits. However, contrary to the nature of benefits, petitioners did not freely give the payment for overtime work to respondents. Petitioners paid respondents overtime pay as compensation for services rendered in addition to the regular work hours. Respondents rendered overtime work only when their services were needed after their regular working hours and only upon the instructions of their superiors. Respondents even differ as to the amount of overtime pay received on account of the difference


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in the additional hours of services rendered. Aside from their allegations, respondents were not able to present anything to prove that petitioners were obliged to permit respondents to render overtime work and give them the corresponding overtime pay. Even if petitioners did not institute a no time card policy, respondents could not demand overtime pay from petitioners if respondents did not render overtime work. The requirement of rendering additional service differentiates overtime pay from benefits such as thirteenth month pay or yearly merit increase. These benefits do not require any additional service from their beneficiaries. Thus, overtime pay does not fall within the definition of benefits under Article 100 of the Labor Code. Second, respondents allege that petitioners discriminated against them vis-a-vis supervising security guards in other SMC divisions. Respondents state that they should be treated in the same manner as supervising security guards in the Packaging Products Division, who are allowed to render overtime work and thus receive overtime pay. Petitioners counter by saying that the no time card policy was applied to all supervisory personnel in the Beer Division. Petitioners further assert that there would be discrimination if respondents were treated differently from other supervising security guards within the Beer Division or if other supervisors in the Beer Division are allowed to render overtime work and receive overtime pay. The Beer Division merely exercised its management prerogative of treating its supervisors differently from its rank-and-file employees, both as to responsibilities and compensation, as they are not similarly situated. We agree with petitioners position that given the discretion granted to the various divisions of SMC in the management and operation of their respective businesses and in the formulation and implementation of policies affecting their operations and their personnel, the no time card policy affecting all of the supervisory employees of the Beer Division is a valid exercise of management prerogative. The no time card policy undoubtedly caused pecuniary loss to respondents. However, petitioners granted to respondents and other supervisory employees a 10% across-the-board increase in pay and night shift allowance, in addition to their yearly merit increase in basic salary, to cushion the impact of the loss. So long as a company’s management prerogatives are exercised in good faith for the advancement of the employer’s interest and not for the purpose of defeating or circumventing the rights of the employees

under special laws or under valid agreements, this Court will uphold them. DISPOSITION: WHEREFORE, the petition is GRANTED. The Decision dated 29 August 2001 of the Court of Appeals in CA-G.R. SP No. 55838 ordering petitioners San Miguel Corporation, Andres Soriano III, Francisco C. Eizmendi, Jr., and Faustino F. Galangto pay Numeriano Layoc, Jr. overtime pay and the other respondents nominal damages is SET ASIDE. The complaint of respondents is DISMISSED. SO ORDERED. CASE 99: NAWASA vs. NAWASA CONSOLIDATED UNIONS (1964) Author: Ma. Patricia Cañalita Topic: Hours of work, Exemptions, Managerial Employees, Rationale, page 14 DOCTRINE: The philosophy behind the exemption of managerial employees from the 8-Hour Labor Law is that such workers are not usually employed for every hour of work but their compensation is determined considering their special training, experience or knowledge which requires the exercise of discretion and independent judgment, or perform work related to management policies or general business operations along specialized or technical lines. For these workers it is not feasible to provide a fixed hourly rate of pay or maximum hours of labor. FACTS: Petitioner National Waterworks & Sewerage Authority is a government-owned and controlled corporation created under Republic Act No. 1383, while respondent NWSA Consolidated Unions are various labor organizations composed of laborers and employees of the NAWASA. The other respondents are intervenors Jesus Centeno, et al., hereinafter referred to as intervenors. One of the issues being disputed by the petitioner and the respondent is whether the petitioner can be made liable to pay additional compensation for work on Sundays and legal holidays conformably to Commonwealth Act No. 444, known as the Eight-Hour Labor Law. Subsequently, respondent intervenors filed a petition in intervention on the issue for additional compensation for night work. Later, however, they amended their petition by including a new demand for overtime pay in favor of Jesus Centeno, Cesar


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Cabrera, Feliciano Duiguan, Cecilio Remotigue, and other employees receiving P4,200.00 per annum or more. The said intervenors are holding position of responsibility. One of them is the Secretary of the Board of Directors. Another is the private secretary of the general manager. Another is a public relations officer, and many other chiefs of divisions or sections and others are supervisors and overseers. The lower court ruled that the NAWASA is an agency not performing governmental functions and, therefore, is liable to pay additional compensation for work on Sundays and legal holidays conformably to Commonwealth Act No. 444, known as the Eight-Hour Labor Law, even if said days should be within the staggered five work days authorized by the President. Also the lower court held that the intervenors do not fall within the category of "managerial employees" as contemplated in Republic Act 2377 and so are not exempt from the coverage of the Eight-Hour Labor Law. Therefore they are entitled to the privileges granted by Commonwealth Act No.444. ISSUE: WON the intervenors are "managerial employees" within the meaning of Republic Act 2377 and, therefore, not entitled to the benefits of Commonwealth Act No. 444, as amended. RULING: NO. It was established that NAWASA should pay additional compensation for work on Sundays and legal holidays, not really because of the compulsion of law but because of a contractual obligation. Focusing on the issue of WON the intervenors are considered managerial employees so as to determine if they are entitled to benefits of CA No. 444, as amended, it is important to have careful scrutiny of their work. Section 2 of Republic Act 2377 provides: Sec. 2. This Act shall apply to all persons employed in any industry or occupation, whether public or private with the exception of farm laborers, laborers who prefer to be paid on piece work basis, managerial employees, outside sales personnel, domestic servants, persons in the personal service of another and members of the family of the employer working for him.

The term "managerial employee" in this Act shall mean either (a) any person whose primary duty consists of the management of the establishment in which he is employed or of a customarily recognized department or subdivision thereof, or (b) ally officer or member of the managerial staff. One of the distinguishing characteristics managerial employee may be known as expressed in the explanatory note of Republic Act No. 2377 is that he is not subject to the rigid observance of regular office hours. The true worth of his service does not depend so much on the time he spends in office but more on the results he accomplishes. In fact, he is free to go out of office anytime. The intervenors herein are holding position of responsibility. One of them is the Secretary of the Board of Directors. Another is the private secretary of the general manager. Another is a public relations officer, and many other chiefs of divisions or sections and others are supervisors and overseers. The lower court, however, after examining carefully their respective functions, duties and responsibilities found that their primary duties do not bear any direct relation with the management of the NAWASA, nor do they participate in the formulation of its policies nor in the hiring and firing of its employees. The chiefs of divisions and sections are given ready policies to execute and standard practices to observe for their execution. Hence, it concludes, they have little freedom of action, as their main function is merely to carry out the company's orders, plans and policies. To the foregoing comment, the Court agrees. As a matter of fact, they are required to observe working hours and record their time work and are not free to come and go to their offices, nor move about at their own discretion. They do not, therefore, come within the category of "managerial employees" within the meaning of the law. In the Fair Labor Standards Act of the United States, which was taken into account by the sponsors of the present Act 2377 in defining the degree of work of a managerial employee, it was provided that “executive employees are exempted from the statutory requirements as to minimum wages and overtime pay. ...” Thus the exemption attaches only where it appears that the employee's primary duty consists of the management of the establishment or of a customarily recognized department or subdivision thereof, that he customarily and regularly directs the


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work of other employees therein, that he has the authority to hire or discharge other employees or that his suggestions and recommendations as to the hiring or discharging and as to the advancement and promotion or any other change of status of other employees are given particular weight, that he customarily and, regularly exercises discretionary powers. The reason underlying each exemption is in reality apparent. Executive, administrative and professional workers are not usually employed at hourly wages nor is it feasible in the case of such employees to provide a fixed hourly rate of pay nor maximum hours of labor. DISPOSITIVE: Intervenors won. Not being managerial employees, they are not exempt from the benefit provided by CA No.444, as amended. CASE 100: NATIONAL SUGAR REFINERIES CORP. V. NLRC, Author: Jasmine Molon Topic: Supervisors are managerial employees

Doctrine: “(m) ‘Managerial employee’ is one who is vested with

powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharged, assign or discipline employees. Supervisory employees are those who, in the interest of the employer effectively recommend such managerial actions if the exercise of such authority is not merely routinary or clerical in nature but requires the use of independent judgment. All employees not falling within any of those above

definitions are considered rank-and-file employees of this Book.”

Facts: It is the submission of petitioner that while the members of respondent union, as supervisors, may not be occupying managerial positions, they are clearly officers or members of the managerial staff because they meet all the conditions prescribed by law and, hence, they are not entitled to overtime, rest day and supervisory employees under Article 212 (m) should be made to apply only to the provisions on Labor Relations, while the right of said employees to the questioned benefits should be considered in the light of the meaning of a managerial employee and of the officers or members of the managerial staff, as contemplated under Article 82 of the Code and Section 2, Rule I Book III of the implementing rules.

1) In other words, for purposes of forming and joining unions,

certification elections, collective bargaining, and so forth, the union members are supervisory employees.

2) In terms of working conditions and rest periods and

entitlement to the questioned benefits, however, they are officers or members of the managerial staff, hence they are not entitled thereto. Petitioner National Sugar Refineries Corporation (NASUREFCO), a corporation which is fully owned and controlled by the Government, operates three (3) sugar refineries located at Bukidnon, Iloilo and Batangas. Private respondent union represents the former supervisors of the NASUREFCO Batangas Sugar Refinery. On June 1, 1988, petitioner implemented a Job Evaluation (JE) Program affecting all employees, from rank-and-file to department heads. As a result, all positions were re-evaluated, and all employees including the members of respondent union were granted salary adjustments and increases in benefits commensurate to their actual duties and functions. For about ten years prior to the JE Program, the members of respondent union were treated in the same manner as rank-and file employees. As such, they used to be paid overtime, rest day and holiday pay. With the implementation of the JE Program, the following adjustments among others were made: (1) the members of respondent union were re-classified under levels S-5 to S-8 which are considered managerial staff for purposes of compensation and benefits; (2) there was an increase in basic pay of the average of 50% of their basic pay prior to the JE Program, with the union members now enjoying a wide gap (P1,269.00 per month) in basic pay compared to the highest paid rank-and-file employee. On May 11, 1990, petitioner NASUREFCO recognized herein respondent union as the bargaining representative of all the supervisory employees at the NASUREFCO Batangas Sugar Refinery. Two years after the implementation of the JE Program the members of herein respondent union filed a complaint for non-payment of overtime, rest day and holiday pay allegedly in violation of Article 100 of the Labor Code.


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ISSUE: W/N supervisory employees should be considered as officers or members of the managerial staff under Article 82, Book III of the same Code, and hence are not entitled to overtime rest day and holiday pay. HELD: YES. Article 212(m), Book V of the Labor Code on Labor Relations reads:

“(m) ‘Managerial employee’ is one who is vested with powers or

prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharged, assign or discipline employees. Supervisory employees are those who, in the interest of the employer effectively recommend such managerial actions if the exercise of such authority is not merely routinary or clerical in nature but requires the use of independent judgment. All employees not falling within any of those above definitions are considered rank-and-file employees of

this Book.”

Respondent NLRC, in holding that the union members are entitled to overtime, rest day and holiday pay, and in ruling that the latter are not managerial employees, adopted the definition stated in the aforequoted statutory provision. A cursory perusal of the Job Value Contribution Statements of the union members will readily show that these supervisory employees are under the direct supervision of their respective department superintendents and that generally they assist the latter in planning, organizing, staffing, directing, controlling communicating and in

making decisions in attaining the company’s set goals and

objectives. These supervisory employees are likewise responsible for the effective and efficient operation of their respective departments. The members of respondent union discharge duties and responsibilities which ineluctably qualify them as officers or members of the managerial staff, as defined in Section 2, Rule I Book III of the aforestated Rules to Implement the Labor Code, viz.: (1) their primary duty consists of the performance of work directly related to management policies of their employer; (2) they

customarily and regularly exercise discretion and independent judgment; (3) they regularly and directly assist the managerial employee whose primary duty consist of the management of a department of the establishment in which they are employed (4) they execute, under general supervision, work along specialized or technical lines requiring special training, experience, or knowledge; (5) they execute, under general supervision, special assignments and tasks; and (6) they do not devote more than 20% of their hours worked in a work-week to activities which are not directly and clearly related to the performance of their work hereinbefore described. Under the facts obtaining in this case, the union members should be considered as officers and members of the managerial staff and are, therefore, exempt from the coverage of Article 82 hence they are not entitled to overtime, rest day and holiday. WHEREFORE, the impugned decision and resolution of respondent National Labor Relations Commission promulgated on July 19, 1991 and August 30, 1991, respectively, are hereby ANNULLED and SET ASIDE for having been rendered and adopted with grave abuse of discretion, and the basic complaint of private respondent union is DISMISSED. CASE 101: FAR EAST AGRICULTURAL SUPPLY, INC. v. LEBATIQUE Author: Shirley Marie Cada Topic: Labor Standards; Field Personnel DOCTRINE: Field personnel are those who regularly perform their duties away from the principal place of business of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty. Thus, in order to determine whether an employee is a field employee, it is also necessary to ascertain if actual hours of work in the field can be determined with reasonable certainty by the employer. In so doing, an inquiry must be made as to whether or not the employee’s time and performance are constantly supervised by the employer. FACTS: Far East hired Lebatique as truck driver. He delivered animal feeds to the company’s clients. Lebatique complained of


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nonpayment of overtime work. That same day, Manuel Uy, brother of Far East’s Gen. Mgr. and Alexander Uy, suspended Lebatique apparently for illegal use of company vehicle. Even so, Lebatique reported for work the next day but he was prohibited from entering the company premises. Lebatique sought the assistance of the DOLE Public Assistance and Complaints Unit. Two days later, he received a telegram from petitioners requiring him to report for work. When he did the next day, Alexander asked him why he was claiming overtime pay. Lebatique explained that he had never been paid for overtime work. After, Alexander terminated Lebatique and told him to look for another job. Hence, Lebatique filed a complaint for illegal dismissal and nonpayment of overtime pay. LA found that Lebatique was illegally dismissed, and ordered his reinstatement and payment of his full backwages, 13th mo. pay, service incentive leave pay, and overtime pay. NLRC reversed, ruling that there was no dismissal but merely suspension. It found that Lebatique was a field personnel, hence, not entitled to overtime pay and service incentive leave pay. CA reversed NLRC decision, holding that Lebatique was suspended on January 24, 2000 but was illegally dismissed on January 29, 2000 when Alexander told him to look for another job. It also found that Lebatique was not a field personnel and therefore entitled to payment of overtime pay, service incentive leave pay, and 13th mo. pay. Hence, the instant petition. ISSUE: WON Lebatique was a field personnel, not entitled to overtime pay. RULING: No. Lebatique was not a field personnel. Article 82 of the Labor Code is decisive on the question of who are referred to by the term "field personnel." It provides, as follows: ART. 82. Coverage. - The provisions of this title [Working Conditions and Rest Periods] shall apply to employees in all establishments and undertakings whether for profit or not, but not to government employees, managerial employees, field personnel, members of the family of the employer who are dependent on him for support, domestic helpers, persons in the personal service of another, and

workers who are paid by results as determined by the Secretary of Labor in appropriate regulations. x x x x "Field personnel" shall refer to non-agricultural employees who regularly perform their duties away from the principal place of business or branch office of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty. As correctly found by the CA, Lebatique is not a field personnel as defined above for the following reasons: (1) company drivers, including Lebatique, are directed to deliver the goods at a specified time and place; (2) they are not given the discretion to solicit, select and contact prospective clients; and (3) Far East issued a directive that company drivers should stay at the client’s premises during truck-ban hours which is from 5:00 to 9:00 a.m. and 5:00 to 9:00 p.m. Drivers, like Lebatique, are under the control and supervision of management officers. Lebatique, therefore, is a regular employee whose tasks are usually necessary and desirable to the usual trade and business of the company. Thus, he is entitled to the benefits accorded to regular employees, including overtime pay and service incentive leave pay. DISPOSITIVE: Petition denied. CASE 102: MERDICAR FISHING COR. VS. NLRC, 1998 Topic: Hours of Work; Exemptions; Field Personnel Author: Olive Cachapero FACTS: Private respondent Fermin Agao, Jr. filed a complaint against petitioner Mercidar Fishing Corporation for illegal dismissal, violation of P.D. No. 851, and non-payment of five days service incentive leave. Private respondent had been employed as a "bodegero" or ship's quartermaster. He complained that he had been constructively dismissed by petitioner when the latter refused him assignments aboard its boats after he had reported to work.

Private respondent alleged that he had been sick and thus allowed to go on leave without pay for one month but that when he reported to work at the end of such period with a health clearance, he was told to come back another time as he could not be reinstated immediately. Thereafter, petitioner refused to give him work.


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Petitioner alleged that it was private respondent who actually abandoned his work. It claimed that the latter failed to report for work after his leave had expired and was, in fact, absent without leave for three months.

Labor Arbiter: respondents are ordered to reinstate complainant with backwages, pay him his 13th month pay and incentive leave pay for 1990.

Petitioner argued that it cannot be held for service incentive leave pay by fishermen in its employ as the latter supposedly are "field personnel" and thus not entitled to such pay under the Labor Code.

NLRC dismissed petitioner's claim.

Petitioner argues essentially that since the work of private respondent is performed away from its principal place of business, it has no way of verifying his actual hours of work on the vessel. It contends that private respondent and other fishermen in its employ should be classified as "field personnel" who have no statutory right to service incentive leave pay.

ISSUE: WON fishing crew members, like Fermin Agao, Jr., are field personnels under Article 82 of the Labor Code. NO Art. 82 of the Labor Code provides:

Art. 82. Coverage. — The provisions of this Title [Working Conditions and Rest Periods] shall apply to employees in all establishments and undertakings whether for profit or not, but not to government employees, field personnel, members of the family of the employer who are dependent on him for support, domestic helpers, persons in the personal service of another, and workers who are paid by results as determined by the Secretary of Labor in appropriate regulations. "Field personnel" shall refer to non-agricultural employees who regularly perform their duties away from the principal place of business or branch office of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty.

HELD:

In the case of Union of Pilipro Employees (UFE) v. Vicar, this Court explained the meaning of the phrase "whose actual hours of work in the field cannot be determined with reasonable certainty" in Art. 82 of the Labor Code, as follows:

Moreover, the requirement that "actual hours of work in the field cannot be determined with reasonable certainty" must be read in conjunction with Rule IV, Book III of the Implementing Rules which provides:

Rule IV Holidays with Pay Sec. 1. Coverage — This rule shall apply to all employees except:

(e) Field personnel and other employees whose time and performance is unsupervised by the employer . . .

The clause "whose time and performance is unsupervised by the employer" did not amplify but merely interpreted and expounded the clause "whose actual hours of work in the field cannot be determined with reasonable certainty." The former clause is still within the scope and purview of Article 82 which defines field personnel. Hence, in deciding whether or not an employee's actual working hours in the field can be determined with reasonable certainty, query must be made as to whether or not such employee's time and performance is constantly supervised by the employer.

In the case at bar, during the entire course of their fishing voyage, fishermen employed by petitioner have no choice but to remain on board its vessel. Although they perform non-agricultural work away from petitioner's business offices, the fact remains that throughout the duration of their work they are under the effective control and supervision of petitioner through the vessel's patron or master as the NLRC correctly held.

CASE 103: UNION OF FILIPRO EMPLOYEES v VIVAR, JR. Author: Rebecca Flores


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Topic: Field personnel, page 14 DOCTRINE: Under Article 82, field personnel are not entitled to holiday pay. It defines field personnel as “non-agricultural employees who regularly perform their duties away from the principal place of business or branch of office of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty.” FACTS: This labor dispute stems from the exclusion of sales personnel from the holiday pay award. Filipro, now Nestle filed with NLRC a petition for declaratory relief seeking a ruling on its rights and obligations respecting claims of its monthly paid employees for holiday pay in the light of the Court’s decision in the Chartered bank Employees Association v. Ople. Both Filipro and Union of Filipro Employeesv(UFE) agreed to submit the case for voluntary arbitration and appointed Vivar as voluntary arbitrator for which Vivar rendered a decision directing Filipro to pay its monthly paid employees holiday pay. Filipro filed a motion for clarification seeking 1) limitation of award to 3 years 2) exclusion of salesmen, sales representatives, truck drives, merchandiers and medical representatives (referred as sales personnel) from the award of the holiday pay and 3) deduction from the holiday pay award of overpayment for overtime, night differential, vacation and sick leave benefits due to the use of 251 divisor. UFE alleged that sales personnel are not field personal and are therefore entitled to holiday pay and that the use of 251 divisor is an established employee benefit which cannot be diminished. Vivar ruled that the sales personnel are field personnel and are not entitled to holiday pay. UFE here insists that the sales personnel are not field personnel under Article 82 of the Labor Code.

ISSUE: Whether or not Filipro (Nestle’s) sales personnel are entitled to holiday pay? RULING: They are not entitled to holiday pay. Under Article 82, field personnel are not entitled to holiday pay. It defines field personnel as “non-agricultural employees who regularly perform their duties away from the principal place of business or branch of office of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty.” The controversy centers on the interpretation of “whose actual hours of work in the field cannot be determined with reasonable certainty” It is undisputed that these sales personnel start their field work at 8am after having reported to the office and come back to the office at 4pm or 430 if they are Makati based. UFE maintains that the period between 8-4 or 430 comprises the sales personnel’s working hours which can be determined with reasonable certainty. The court does not agree. The law requires that the actual hours of work in the field be reasonable ascertained. The company has no way of determining whether or not these sales personnel, even if they report to the office before 8am prior to field work and come back at 430 really spend the hours in between in actual field. The requirement for the salesmen and other similarly situated employees to report for work at the office at 8:00 a.m. and return at 4:00 or 4:30 p.m. is not within the realm of work in the field as defined in the Code but an exercise of purely management prerogative of providing administrative control over such personnel. This does not in any manner provide a reasonable level of determination on the actual field work of the employees which can be reasonably ascertained.


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The requirement that "actual hours of work in the field cannot be determined with reasonable certainty" must be read in conjunction with Rule IV, Book III of the Implementing Rules which provides: "Rule IV Holidays with Pay Section 1. Coverage—This rule shall apply to all employees except: xxx xxx xxx (e) Field personnel and other employees whose time and performance is unsupervised by the employer x x x (Italics supplied) The clause "whose time and performance is unsupervised by the employer" did not amplify but merely interpreted and expounded the clause "whose actual hours of work in the field cannot be determined with reasonable certainty." The former clause is still within the scope and purview of Article 82 which defines field personnel. Hence, in deciding whether or not an employee's actual working hours in the field can be determined with reasonable certainty, query must be made as to whether or not such employee's time and performance is constantly supervised by the employer. The Supervisor of the Day schedule adverted to by the petitioner does not in the least signify that these sales personnel's time and performance are supervised. The purpose of this schedule is merely to ensure that the sales personnel are out of the office not later than 8:00 a.m. and are back in the office not earlier than 4:00 p.m. The sales personnel are evaluated by the result of their work and not by the actual hours of field work which are hardly susceptible to determination. The criteria for granting incentive bonus are: (1) attaining or exceeding sales volume based on sales target; (2) good collection performance; (3) proper compliance with good market hygiene; (4) good merchandising work; (5) minimal market returns and (6) proper truck maintenance. The above criteria indicate that these sales personnel are given incentive bonuses precisely because of the difficulty in measuring their actual hours of field work.

DISPOSITIVE: Petition to review the order of the NLRC is AFFIRMED. The sales personnel are not covered by the holiday pay. The law requires that the actual hours of work in the field be reasonably ascertained. CASE 104: LABOR CONGRESS OF THE PHILIPPINES V. NLRC Author: Charlene Mae C. Dacara Topic: Piece workers, page 14 DOCTRINE: Petitioners, as piece-rate workers having been paid by the piece, there is need to determine the varying degrees of production and days worked by each worker. FACTS The 99 persons named as petitioners in this proceeding were rank-and-file employees of respondent Empire Food Products, which hired them on various dates. Petitioners filed against private respondents a complaint for payment of money claims and for violation of labor standards laws. They also filed a petition for direct certification of petitioner Labor Congress of the Philippines as their bargaining representative. In an Order dated October 24, 1990, Mediator Arbiter approved the memorandum of agreement and certified LCP "as the sole and exclusive bargaining agent among the rank-and-file employees of Empire Food Products for purposes of collective bargaining with respect to wages, hours of work and other terms and conditions of employment". On November 1990, petitioners through LCP President Navarro submitted to private respondents a proposal for collective bargaining. On January 1991, petitioners filed a complaint against private respondents for Unfair Labor Practice by way of Illegal Lockout and/or Dismissal; Union busting thru Harassments, threats, and interfering with the rights of employees to self-organization; Violation of the Memorandum of Agreement dated October 23, 1990; Underpayment of Wages in violation of R.A. No. 6640 and R.A. No. 6727, such as Wages promulgated by the Regional Wage Board; Actual, Moral and Exemplary Damages." Issue: WON the petitioners are entitled to labor standard benefits, considering their status as piece rate workers.


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Held: YES. The petitioners are so entitled to these benefits namely, holiday pay, premium pay, 13th month pay and service incentive leave. Three (3) factors lead us to conclude that petitioners, although piece-rate workers, were regular employees of private respondents. First, as to the nature of petitioners' tasks were necessary or desirable in the usual business of private respondents, who were engaged in the manufacture and selling of such food products; second, petitioners worked for private respondents throughout the year, and third, the length of time that petitioners worked for private respondents. Thus, while petitioners' mode of compensation was on a "per piece basis," the status and nature of their employment was that of regular employees. The Rules Implementing the Labor Code exclude certain employees from receiving benefits such as nighttime pay, holiday pay, service incentive leave and 13th month pay, "field personnel and other employees whose time and performance is unsupervised by the employer, including those who are engaged on task or contract basis, purely commission basis, or those who are paid a fixed amount for performing work irrespective of the time consumed in the performance thereof." Plainly, petitioners as piece-rate workers do not fall within this group. As mentioned earlier, not only did petitioners labor under the control of private respondents as their employer, likewise did petitioners toil throughout the year with the fulfillment of their quota as supposed basis for compensation. Further, in Section 8(b), Rule IV, Book III which we quote hereunder, piece workers are specifically mentioned as being entitled to holiday pay. SEC. 8. Holiday pay of certain employees. — (b) Where a covered employee is paid by results or output, such as payment on piece work, his holiday pay shall not be less than his average daily earnings for the last seven (7) actual working days preceding the regular holiday: Provided,

however, that in no case shall the holiday pay be less than the applicable statutory minimum wage rate. In addition, the Revised Guidelines on the Implementation of the 13th Month Pay Law, in view of the modifications to P.D. No. 851 19 by Memorandum Order No. 28, clearly exclude the employer of piece rate workers from those exempted from paying 13th month pay, to wit: 2. EXEMPTED EMPLOYERS The following employers are still not covered by P.D. No. 851: d. Employers of those who are paid on purely commission, boundary or task basis, and those who are paid a fixed amount for performing specific work, irrespective of the time consumed in the performance thereof, except where the workers are paid on piece-rate basis in which case the employer shall grant the required 13th month pay to such workers. The Revised Guidelines as well as the Rules and Regulations identify those workers who fall under the piece-rate category as those who are paid a standard amount for every piece or unit of work produced that is more or less regularly replicated, without regard to the time spent in producing the same. As to overtime pay, the rules, however, are different. According to Sec 2(e), Rule I, Book III of the Implementing Rules, workers who are paid by results including those who are paid on piece-work, takay, pakiao, or task basis, if their output rates are in accordance with the standards prescribed under Sec. 8, Rule VII, Book III, of these regulations, or where such rates have been fixed by the Secretary of Labor in accordance with the aforesaid section, are not entitled to receive overtime pay. As such, petitioners are beyond the ambit of exempted persons and are therefore entitled to overtime pay. DISPOSITIVE: Petitioners won.


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CASE 105: Union Carbide Labor Union v. Union Carbide Phils, Inc. 1992 Author: Patrick Mendoza Topic: Change in Work Hours p. 14

DOCTRINE: This does not necessarily mean that the company can no longer change its working schedule, for Section 2, Article II of the same CBA expressly provides that:

Sec. 2. In the exercise of its functions of management, the COMPANY shall have the sole and exclusive right and power, among other things, to direct the operations and the working force of its business in all respects; to be the sole judge in determining the capacity or fitness of an employee for the position or job to which he has been assigned; to schedule the hours of work, shifts and work schedules; to require work to be done in excess of eight hours or Sundays or holidays as the exigencies of the service may require; to plan, schedule, direct, curtail and control factory operations and schedules of production; to introduce and install new or improved methods or facilities; to designate the work and the employees to perform it; to select and hire new employees; to train new employees and improve the skill and ability of employees from one job to another or form one shift to another; to classify or reclassify employees; and to make such changes in the duties of its employees as the COMPANY may see fit or convenient for the proper conduct of its business.

Verily and wisely, management retained the prerogative, whenever exigencies of the service so require, to change the working hours of its employees. And as long as such prerogative is exercised in good faith for the advancement of the employer's interest and not for the purpose of defeating or circumventing the rights of the employees under special laws or under valid agreements, this Court will uphold such exercise (San Miguel Brewery Sales Force Union (PTGWO) vs. Ople, 170 SCRA 25 [1989])

FACTS: Complainants Agapito Duro, Alfredo Torio, and Rustico Javillonar, were dismissed from their employment after an application for clearance to terminate them was approved by the Secretary of Labor on December 19, 1972. Respondent's application

for clearance was premised on "willful violation of Company regulations, gross insubordination and refusal to submit to a Company investigation. It appears that the Company is operating on three (3) shifts namely: morning, afternoon and night shifts. The workers in the third shift normally work from Monday to Saturday, the last working day being Friday or forty (40) hours a week or from Monday to Friday.

Sometime in July 1972, there seems to be a change in the working schedule from Monday to Friday as contained in the collective bargaining agreement aforecited to Sunday thru Thursday. The change became effective July 5, 1972. The third shift employees were required to start the new work schedule from Sunday thru Thursday.

The three respondents Duro, Torio, and Javillonar did not report for work on November 26, 1972 which was a Sunday since it was not a working day according to the provisions of the Collecrtive Bargaining Agreement. They were suspended for 14 days due to this. On May 4, 1973, the Arbitrator rendered a decision ordering the reinstatement with backwages of the complainants. On June 8, 1973, the National Labor Relations Commission dismissed respondent company's appeal for having been filed out of time. A motion for reconsideration which was treated as an appeal was then filed by respondent company before the Secretary of Labor, resulting in the modification of the Arbitrator's decision by awarding complainants separation pay. A motion for reconsideration subsequently filed by the petitioner was denied for lack of merit. Hence, this petition to the SC.

ISSUE: WON the complainants could be validly dismissed from their employment on the ground of insubordination for refusing to comply with the new work schedule

DISPOSITIVE: Verily and wisely, management retained the prerogative, whenever exigencies of the service so require, to change the working hours of its employees. And as long as such prerogative is exercised in good faith for the advancement of the employer's interest and not for the purpose of defeating or


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circumventing the rights of the employees under special laws or under valid agreements, this Court will uphold such exercise (San Miguel Brewery Sales Force Union (PTGWO) vs. Ople, 170 SCRA 25 [1989]).

Thus, in the case of Abbott Laboratories (Phil.), Inc. vs. NLRC (154 SCRA 713 [1987]), We ruled:

. . . Even as the law is solicitous of the welfare of employees, it must also protect the right of an employer to exercise what are clearly management prerogatives. The free will of management to conduct its own business affairs to achieve its purpose cannot be denied.

Further, the incident complained of took place sometime in 1972, so there is no violation of the 1973 Constitution to speak of because the guarantee of security of tenure embodied under Section 9, Article II may not be given a retroactive effect. It is the basic norm that provisions of the fundamental law should be given prospective application only, unless legislative intent for its retroactive application is so provided.

As pointed out by Justice Isagani Cruz, to wit:

Finally, it should be observed that the provisions of the Constitution should be given only a prospective application unless the contrary is clearly intended. Were the rule otherwise, rights already acquired or vested might be unduly disturbed or withdrawn even in the absence of an unmistakable intention to place them within the scope of the Constitution.

We agree with the findings arrived at by both Arbitrator and the Secretary of Labor that there is no unfair labor practice in this case. Neither was there gross and habitual neglect of complainants' duties. Nor did the act of complainants in refusing to follow the new working hours amount to serious misconduct or willful disobedience to the orders of respondent company.

RULING: The petition is of no merit, the decision appealed from is affirmed. CASE 106: BISIG MANGGAGAWA SA TRYCO V. NLRC (2008)

Author: Carlo Guevara Topic: Compressed work week (page 15) DOCTRINE: The compressed workweek scheme was originally conceived for establishments wishing to save on energy costs, promote greater work efficiency and lower the rate of employee absenteeism, among others. Workers favor the scheme considering that it would mean savings on the increasing cost of transportation fares for at least one (1) day a week; savings on meal and snack expenses; longer weekends, or an additional 52 off-days a year, that can be devoted to rest, leisure, family responsibilities, studies and other personal matters, and that it will spare them for at least another day in a week from certain inconveniences that are the normal incidents of employment, such as commuting to and from the workplace, travel time spent, exposure to dust and motor vehicle fumes, dressing up for work, etc. Thus, under this scheme, the generally observed workweek of six (6) days is shortened to five (5) days but prolonging the working hours from Monday to Friday without the employer being obliged for pay overtime premium compensation for work performed in excess of eight (8) hours on weekdays, in exchange for the benefits abovecited that will accrue to the employees. FACTS: Tryco Pharma Corporation (Tryco) is a manufacturer of veterinary medicines with its principal office in Caloocan City. Petitioners are its regular employees, occupying the positions of helper, shipment helper and factory workers assigned to the Production Department. They are members of Bisig Manggagawa sa Tryco (BMT), the exclusive bargaining representative of the rank-and-file employees. Tryco and the petitioners signed separate MOA providing for a compressed workweek schedule to be implemented in the company effective May 20, 1996. The MOA was entered into pursuant to DOLE Order (D.O.) No. 21, Series of 1990, Guidelines on the Implementation of Compressed Workweek. As provided in the MOA, 8:00 a.m. to 6:12 p.m., from Monday to Friday, shall be considered as the regular working hours, and no overtime pay shall be due and payable to the employee for work rendered during those hours. The MOA specifically stated that the employee waives the right to claim overtime pay for work rendered after 5:00 p.m. until 6:12 p.m. from Monday to Friday considering that the compressed workweek


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schedule is adopted in lieu of the regular workweek schedule which also consists of 46 hours. However, should an employee be permitted or required to work beyond 6:12 p.m., such employee shall be entitled to overtime pay.

BMT and Tryco negotiated for the renewal of their CBA but failed to arrive at a new agreement. In the meantime, the Bureau of Animal Industry of the Department of Agriculture informed Tyco that its License to Operate should be conducted in San Rafael, Bulacan, not in Caloocan City. Accordingly, Tyco issued a memorandum directing petitioners to report to the company's plant site in Bulacan. BMT opposed the transfer of its members, contending that it constitutes unfair labor practice. Hence, BMT declared a strike on May 26, 1997. Petitioners filed their separate complaints for illegal dismissal, underpayment of wages, nonpayment of overtime pay and service incentive leave, and refusal to bargain against Tryco and its President. They alleged that the company acted in bad faith during the CBA negotiations because it sent representatives without authority to bind the company, and this was the reason why the negotiations failed. They added that the transfer of petitioners to Bulacan was a move to paralyze the union. Tryco averred that the petitioners were not dismissed but they refused to comply with the management's directive for them to report to the company's plant in Bulacan. They denied the allegation that they negotiated in bad faith, stating that, in fact, they sent the EVP and Legal Counsel as the company's representatives to the CBA negotiations. They claim that the failure to arrive at an agreement was due to the stubbornness of the union panel. They further averred that the company had already been planning to decongest the Caloocan office to comply with the government policy to shift the concentration of manufacturing activities from the metropolis to the countryside. The LA dismissed the complaint stating that the transfer was pursuant to the directive of the Department of Agriculture. Likewise, it ruled that nonpayment of wages was justified because the petitioners did not render work from May 26 to 31, 1997; overtime pay is not due because of the compressed workweek agreement between the union and management; and service incentive leave pay cannot be claimed by the complainants because they are already enjoying

vacation leave with pay for at least five days. The NLRC affirmed the LA’s decision. On appeal, the CA ruled that the transfer order was a management prerogative not amounting to a constructive dismissal or an unfair labor practice. The CA further sustained the enforceability of the MOA, particularly the waiver of overtime pay in light of this Court's rulings upholding a waiver of benefits in exchange of other valuable privileges. Hence, they filed with the SC. ISSUE: WON the petitioners are entitled to the money claims. RULING: No, the MOA is enforceable and binding against the petitioners. Where it is shown that the person making the waiver did so voluntarily, with full understanding of what he was doing, and the consideration for the quitclaim is credible and reasonable, the transaction must be recognized as a valid and binding undertaking. D.O. No. 21 sanctions the waiver of overtime pay in consideration of the benefits that the employees will derive from the adoption of a compressed workweek scheme. Moreover, the adoption of a compressed workweek scheme in the company will help temper any inconvenience that will be caused the petitioners by their transfer to a farther workplace. The MOA complied with the following conditions set by the DOLE, under D.O. No. 21, to protect the interest of the employees in the implementation of a compressed workweek scheme:

1. The employees voluntarily agree to work more than eight (8) hours a day the total in a week of which shall not exceed their normal weekly hours of work prior to adoption of the compressed workweek arrangement;

2. There will not be any diminution whatsoever in the weekly or monthly take-home pay and fringe benefits of the employees;

3. If an employee is permitted or required to work in excess of his normal weekly hours of work prior to the adoption of the compressed workweek scheme, all such excess hours shall be considered overtime work and shall be compensated in accordance with the provisions of the Labor Code or applicable Collective Bargaining Agreement (CBA);


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4. Appropriate waivers with respect to overtime premium pay for work performed in excess of eight (8) hours a day may be devised by the parties to the agreement.

5. The effectivity and implementation of the new working time arrangement shall be by agreement of the parties.

The MOA clearly states that the employee waives the payment of overtime pay in exchange of a five-day workweek, there is no room for interpretation and its terms should be implemented as they are written.

DISPOSITIVE: Respondent won. CASE 107: PAL v. NLRC Author: Ralph Agbisit Topic: Regular meal period (one hour), page 15 Doctrine: The eight-hour work period does not include the meal break. Nowhere in the law may it be inferred that employees must take their meals within the company premises. Employees are not prohibited from going out of the premises as long as they return to their posts on time. Facts: Private respondent Dr. Fabros was employed as flight surgeon at petitioner company. He was assigned at the PAL Medical Clinic and was on duty from 4:00 in the afternoon until 12:00 midnight. On Feb.17, 1994, at around 7:00 in the evening, Dr. Fabros left the clinic to have his dinner at his residence, which was abou t5-minute drive away. A few minutes later, the clinic received an emergency call from the PAL Cargo Services. One of its employees had suffered a heart attack. The nurse on duty, Mr. Eusebio, called private respondent at home to inform him of the emergency. The patient arrived at the clinic at 7:50 in the evening and Mr. Eusebio immediately rushed him to the hospital. When Dr. Fabros reached the clinic at around 7:51 in the evening, Mr. Eusebio had already left with the patient to the hospital. The patient died the following day. Upon learning about the incident, PAL Medical Director ordered the Chief Flight Surgeon to conduct an investigation. In his explanation, Dr. Fabros asserted that he was entitled to a thirty-minute meal break; that he immediately left his

residence upon being informed by Mr. Eusebio about the emergency and he arrived at the clinic a few minutes later; that Mr. Eusebio panicked and brought the patient to the hospital without waiting for him. Finding private respondent’s explanation unacceptable, the management charged private respondent with abandonment of post while on duty. He denied that he abandoned his post on February 17, 1994. He said that he only left the clinic to have his dinner at home. In fact, he returned to the clinic at 7:51 in the evening upon being informed of the emergency. After evaluating the charge as well as the answer of private respondent, he was given a suspension for three months effective December 16, 1994. Private respondent filed a complaint for illegal suspension against petitioner. Issue: Whether or not Dr. Fabros is guilty of abandonment for leaving the company premises, during the 8-hour work period, to take his meals? Held: No. The facts do not support petitioner’s allegation that private respondent abandoned his post on the evening of Feb. 17, 1994. Dr. Fabros left the clinic that night only to have his dinner at his house, which was only a few minutes’ drive away from the clinic. His whereabouts were known to the nurse on duty so that he could be easily reached in case of emergency. Upon being informed of Mr. Acosta’s condition, private respondent immediately left his home and returned to the clinic. These facts belie petitioner’s claim of abandonment. Petitioner argues that being a full-time employee, private respondent is obliged to stay in the company premises for not less than eight (8) hours. Hence, he may not leave the company premises during such time, even to take his meals. We are not impressed. Art. 83 and 85 of the Labor Code read: Art. 83. Normal hours of work. — The normal hours of work of any employee shall not exceed eight (8) hours a day. Health personnel in cities and municipalities with a population of at least one million (1,000,000) or in hospitals and clinics with a bed capacity of at least one hundred (100) shall hold regular office hours for eight (8) hours a day, for five (5) days a week, exclusive of time for meals, except where the exigencies of the service require that such personnel work for six (6) days or forty-eight (48) hours, in which case they shall be entitled to an additional compensation of at least thirty per cent


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(30%) of their regular wage for work on the sixth day. For purposes of this Article, “health personnel” shall include: resident physicians, nurses, nutritionists, dieticians, pharmacists, social workers, laboratory technicians, paramedical technicians, psychologists, midwives, attendants and all other hospital or clinic personnel. (emphasis supplied) Art. 85. Meal periods. — Subject to such regulations as the Secretary of Labor may prescribe, it shall be the duty of every employer to give his employees not less than sixty (60) minutes time-off for their regular meals. Sec. 7, Rule I, Book III of the Omnibus Rules Implementing the Labor Code further states: Sec. 7. Meal and Rest Periods. — Every employer shall give his employees, regardless of sex, not less than one (1) hour time-off for regular meals, except in the following cases when a meal period of not less than twenty (20) minutes may be given by the employer provided that such shorter meal period is credited as compensable hours worked of the employee; (a) Where the work is non-manual work in nature or does not involve strenuous physical exertion; (b) Where the establishment regularly operates not less than sixteen hours a day; (c) In cases of actual or impending emergencies or there is urgent work to be performed on machineries, equipment or installations to avoid serious loss which the employer would otherwise suffer; and (d) Where the work is necessary to prevent serious loss of perishable goods. Rest periods or coffee breaks running from five (5) to twenty (20) minutes shall be considered as compensable working time. Thus, the eight-hour work period does not include the meal break. Nowhere in the law may it be inferred that employees must take their meals within the company premises. Employees are not prohibited from going out of the premises as long as they return to their posts on time. Private respondent’s act, therefore, of going home to take his dinner does not constitute abandonment. CASE 108: ARICA VS NLRC AND STANDARD (PHILIPPINES) FRUIT CORPORATION Topic: Waiting Time Author: Jan Dennis S. Reyes

DOCTRINE: the thirty (30)-minute assembly is a deeply- rooted, routinary practice of the employees, and the proceedings attendant thereto are not infected with complexities as to deprive the workers the time to attend to other personal pursuits FACTS: Petitioners filed against private respondent for damages and for allegedly not paying the workers for their assembly time which takes place every work day from 5:30am to 6am. The assembly time consists of the (a) there is the roll call. This is followed by getting their individual work assignments from the foreman. (b) Petitioners are individually required to accomplish the Laborer's Daily Accomplishment Report during which they are often made to explain about their reported accomplishment the following day. (c) Then petitioners go to the stockroom to get the working materials, tools and equipment. (d) Petitioners travel to the field bringing with them their tools, equipment and materials. LA ruled in favor of Private respondents NLRC affirmed the decision of the LA. CA ISSUE: Whether or not the worker’s assembly time should be paid. HELD: The thirty (30)-minute assembly time long practiced and institutionalized by mutual consent of the parties under Article IV, Section 3, of the Collective Bargaining Agreement cannot be considered as waiting time within the purview of Section 5, Rule I, Book III of the Rules and Regulations Implementing the Labor Code. Furthermore, the thirty (30)-minute assembly is a deeply- rooted, routinary practice of the employees, and the proceedings attendant thereto are not infected with complexities as to deprive the workers the time to attend to other personal pursuits. They are not new employees as to require the company to deliver long briefings regarding their respective work assignments. Their houses are situated right on the area where the farm are located, such that after the roll call, which does not necessarily require the personal presence, they can go back to their houses to attend to


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some chores. In short, they are not subject to the absolute control of the company during this period, otherwise, their failure to report in the assembly time would justify the company to impose disciplinary measures. The CBA does not contain any provision to this effect; the record is also bare of any proof on this point. This, therefore, demonstrates the indubitable fact that the thirty (30)-minute assembly time was not primarily intended for the interests of the employer, but ultimately for the employees to indicate their availability or non-availability for work during every working day. CASE 109: UNIVERSITY OF PANGASINAN FACULTY UNION v. NLRC (1993) Author: Geloace Topic: “No work, no pay” principle

DOCTRINE: 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. FACTS: Petitioner filed a total of 6 complaints against the University of Pangasinan (University) before the Arbitration Branch of the NLRC in Dagupan City concerning the following: (1) nonpayment of benefits emergency cost of living allowance (ecola) to part-time teachers, and for prompt and accurate computation of benefits (2) nonpayment of all ecolas to instructors (3) nonpayment of extra loads during typhoons "Nitang" and "Osang" (4) violation of P.D. No. 1751 and nonpayment of extra loads (5) nonpayment of all ecolas to faculty members who were also members of the union (6) violation of Wage Order No. 1 and delayed payment of salaries (7) nonpayment of salary differentials. The Regional Director in San Fernando, La Union certified six (6) of these complaints to LA Pedro Fernandez of the Dagupan City District Office of the then Ministry of Labor and Employment for compulsory arbitration. LA dismissed the complaints for lack of merit respondent however, is required to integrate the

allowance of P60.00 under P.D. 1123 into the basic pay of the covered employees if the same has not as yet been complied with. The petitioner appealed the said decision to the NLRC. In its resolution, the NLRC affirmed the decision of Executive Labor Article Tumang. Hence, the instant petition for mandamus and certiorari. ISSUE: W/N the NLRC abused its discretion in the disallowing the emergency cost of living allowance to members of the petitioner. RULING: YES. The Rules Implementing P.D. No. 1713 provide:

Sec. 6. Allowances of full-time and part-time employees. — Employees shall be paid in full the monthly allowance on the basis of the scales provided in Section 3 hereof, regardless of the number of their regular working days if they incur no absences during the month. If they incur absences without pay, the amounts corresponding to the absences may be deducted from the monthly allowance provided that in determining the equivalent daily allowance of such deduction, the applicable monthly allowance shall be divided by thirty (30) days.

In University of Pangasinan Faculty Union v. University of Pangasinan and NLRC, a case involving the same parties as in the instant petition and dealing with a complaint filed by the petitioner seeking, among others, the payment of emergency cost of living allowances for a semestral break. The Court held therein:

The "No work, no pay" principle does not apply in the instant case. The petitioner's members received their regular salaries during this period. It is clear from the . . . law that it contemplates a "no work" situation where the employees voluntarily absent themselves. Petitioners, in the case at bar, certainly do not, ad voluntatem absent themselves during semestral breaks. Rather, they are constrained to take mandatory leave from work. For this, they cannot be faulted nor can they be begrudged that which is due them under the law. To a certain extent, the private respondent can specify dates when no classes would be held. Surely, it was not the intention of the framers of the law to allow employers to withhold employee benefits by the simple expedient of


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unilaterally imposing "no work" days and consequently avoiding compliance with the mandate of the law for those days.

As interpreted and emphasized in the same case, the law granting emergency cost of living allowances was designed to augment the income of the employees to enable them to cope with the rising cost of living and inflation. Clearly, it was enacted in pursuance of the State's duty to protect labor and to alleviate the plight of the workers. To uphold private respondent's interpretation of the law would be running counter to the intent of the law and the Constitution. DISPOSITIVE: The decision of the NLRC is AFFIRMED subject to the MODIFICATION that private respondent University of Pangasinan shall pay its regular and fulltime teachers and employees emergency cost of living allowance for the period April 1-15, 1981. CASE 110: PRIETO v. NLRC (1993)

Author: Michelle Sy

Topic: No Work, No Pay Principle, page 16

DOCTRINE: The principle of "no work, no pay" does not apply in

this case for, as correctly pointed out by POEA, the fact that the

complainants had not worked at the jobsite was not of their own

doing. If they were not able to work at all, it was because they

refused to sign the third contract providing for another lowering of

their salaries in violation of their first agreement as approved by the

POEA. They had a right to insist on the higher salaries agreed upon

in the original contract and to reject the subsequent impositions of

SAM, which obviously thought the petitioners would have to accept

because they had no choice.

FACTS: The complainants alleged they were recruited by AR and

Sons International Development Corporation (AR and Sons) for

employment for a period of 24 months with Saudi Services and

Operating Co., Ltd. (SSOC) in Saudi Arabia. The corresponding

Agency Worker Agreements, which were duly approved by the

POEA, provided for their respective positions and salaries as follows:

Name Position Salary (per month in US

Dollars)

Prieto Mechanic A/C $370.00

Azuela Mechanic A/C $370.00

Canillo Clerk $420.00

Later, however, taking advantage of their need for employment, the

respondent placement agency coerced them into signing another

employment contract with Saudi Arabia Morrison (SAM) without the

knowledge and approval of the POEA. The second contract gave all

three of them the lower positions of assistant cook with a salary of

only SR625.00 per month for a period of three years.

The complainants said that when they reached Jeddah, Saudi

Arabia, in November 1987, they were asked to sign still another

employment contract by a certain Muhammad Abbas, a

representative of SAM, which would further lower their salaries to

SR250.00 a month. When they refused, they were not assigned any

work but were confined in a small room in a villa and given spoiled

food for their sustenance. On December 22, 1987, they were

summarily dismissed and repatriated to the Philippines.

The respondents denied the charges and said that the complainants

entered into separate uniform Agency Worker Agreements where it

was stipulated that they would be employed by SSOC for 24 months

upon departure from the Philippines. When the petitioners arrived in

Jeddah, it was discovered that Prieto and Azuela were not qualified

as mechanics and that Canillo was not qualified as clerk, so all three

of them were rejected. The complainants then requested SSOC to

help them secure employment as assistant cooks with SAM, which at

that time was also a foreign principal of AR and Sons. Taking pity on

them, SSOC referred them to the latter agency but they also failed to

pass the trade tests for assistant cooks. It was for this reason that

they were finally repatriated to the Philippines at the expense of the

latter agency.


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POEA ruled in favor of the complainants and ordered the private

respondents to pay jointly and severally the complainants. The

NLRC however, ordered the dismissal of the complaint. The NLRC

found that the complainants had misrepresented themselves as

mechanics and cooks when they were not qualified for these

positions and so had only themselves to blame if they were

subsequently rejected by a foreign employer.

ISSUE: Whether or not NLRC erred in dismissing the complaint?

RULING: Yes. We reject the respondents' argument that the

petitioners' services were terminated because they were not qualified

either as mechanics or as assistant cooks. It is presumed that before

their deployment, the petitioners were subjected to the trade tests

required by law to be conducted by the recruiting agency to insure

employment of only technically qualified workers for the foreign

principal. There was no misrepresentation on the part of the

petitioners. They had applied as A/C mechanics and clerk, and we

may assume that the trade tests conducted on them were for these

positions and not for the position of assistant cook. If they fell short of

the employer's expectations, the fault lies not with the petitioners but

with the recruiting agency for deploying them even if they did not

possess the skills necessary for the positions they were seeking.

We find no basis either for the conclusion of the NLRC that there

was no employer-employee relationship between the parties. The

record shows that the petitioners became employees of Saudi

Services and Operating Company, Ltd., and later of Saudi Arabian

Morrison, both entities being represented by AR and Sons

International Development Corporation, which admitted in its

Comment that the petitioners were "hired and deployed abroad . . ."

This relationship is even more firmly supported by the Agency

Worker Agreements between the petitioners and AR and Sons acting

for SSOC which were approved by the POEA under Accreditation

Certificate No 8181, and by the second contract under which the

petitioners were deployed to SAM, its other principal, by AR and

Sons.

DISPOSITIVE: Petitioners won. NLRC Decision is reversed and set

aside.

CASE 111: PNB V PHILIPPINE NATIONAL BANK EMPLOYEES ASSOCIATION (PEMA) Author: Rob Estomo Topic: Rationale for overtime pay, P.16 Doctrine: Doctrinally, We hold that, in the absence of any specific provision on the matter in a collective bargaining agreement, 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. We reiterate, 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. Facts: Arising from the certification by the President of the Philippines of an existence of an industrial dispute between PNB and PEMA whereby the latter alleged that the former failed to comply with its commitment of organizing a Committee on Personnel Affairs (CPA) to take charge of screening and deliberating on the promotion of employees covered by the collective bargaining agreement then in force between the said parties. The Court of Industrial Relations (CIR), in order to settle the dispute, issued an order establishing the CPA and issuing a restraining order; good for six months, against any strikes that PEMA may hold while negotiations between the parties are on going. PEMA submitted another pleading, asserting an issue that cannot be resolved by the on-going negotiations. PEMA demanded that in calculating the overtime pay of PNB’s employees, the cost of living allowance and longevity pay given by PNB to its employees should be included, in light of NWSA v NAWASA. PNB defended by stating that the CIR has no jurisdiction to take cognizance of the case as the supplemental pleading presented by


22

PEMA states a cause of action based on money claim, irrelevant to the labor dispute initially at issue. PNB also asserts that what was being prayed for by PEMA is not included in the CBA between the parties, still in force at that time. The CIR rendered a decision in favor of PEMA, ordering PNB to include the cost of living allowance as well as the longevity pay in the computation of overtime pay, in light of the ruling in NWSA v NAWASA. Hence this present appeal. Issue: W/N the cost of living allowance and longevity pay should be included in the computation of overtime pay? Held: No. The Court ruled that the NWSA v NAWASA case is not on all fours with the demand of PEMA. What the parties commonly desire is for this Court to construe CA 444 in the light of NAWASA, considering the fact-situation of the instant case. In this respect, it is the Court’s considered opinion, after mature deliberation, that notwithstanding the portions of the NAWASA's opinion relied upon by PEMA, there is nothing in CA 444 that could justify its posture that cost-of-living allowance should be added to the regular wage in computing overtime pay. We have already pointed out to start with, that as far as longevity pay is concerned, it is beyond question that the same cannot be included in the computation of overtime pay for the very simple reason that the contrary is expressly stipulated in the collective bargaining agreement and, as should be the case, it is settled that the terms and conditions of a collective bargaining agreement constitute the law between the parties. However, the matter of the cost-of-living allowance has to be examined from another perspective, namely, that while PEMA had been always demanding for its integration into the basic pay, it never succeeded in getting the conformity of PNB thereto, and so, all collective bargaining agreements entered into periodically by the said parties did not provide therefor. And it would appear that PEMA took the non agreement of the bank in good grace, for the record does not show that any remedial measure was ever taken by it in connection therewith. In any event the basis of computation of overtime pay beyond that required by CA 444 must be the collective bargaining agreement. To reiterate, it is not for the court to impose upon the parties anything beyond what they have agreed upon which is not tainted with illegality. On the other hand, where the parties fail to come to an agreement, on a matter not legally required, the court abuses its

discretion when it obliges any of them to do more than what is legally obliged. Dispositive: PNB Won CA 444 - Commonwealth Act 444 prescribes that overtime work shall be paid at the same rate as their regular wages or salary, plus at least twenty-five per centum additional.

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