Professional Documents
Culture Documents
The law, in defining their contractual relationship, does so, not necessarily or
exclusively upon the terms of their written or oral contract, but also on the
basis of the nature of the work petitioner has been called upon to perform.
The law affords protection to an employee, and it will not countenance any
attempt to subvert its spirit and intent. A stipulation in an agreement can be
ignored as and when it is utilized to deprive the employee of his security of
tenure.
A lawful dismissal must meet both substantive and procedural requirements;
in fine, the dismissal must be for a just or authorized cause and must comply
with the rudimentary due process of notice and hearing. It is not shown that
respondent company has fully bothered itself with either of these
requirements in terminating the services of petitioner. The notice of
termination recites no valid or just cause for the dismissal of petitioner nor
does it appear that he has been given an opportunity to be heard in his
defense.
the second category are not required to report for work at anytime, they do
not have to devote their time exclusively to or work solely for the company
since the time and the effort they spend in their work depend entirely upon
their own will and initiative; they are not required to account for their time
nor submit a report of their activities; they shoulder their own selling
expenses as well as transportation; and they are paid their commission
based on a certain percentage of their sales. One salient point in the
determination of employer-employee relationship which cannot be easily
ignored is the fact that the compensation that these agents on commission
received is not paid by the insurance company but by the investor (or the
person insured). After determining the commission earned by an agent on his
sales the agent directly deducts it from the amount he received from the
investor or the person insured and turns over to the insurance company the
amount invested after such deduction is made. The test therefore is whether
the "employer" controls or has reserved the right to control the "employee"
not only as to the result of the work to be done but also as to the means and
methods by which the same is to be accomplished.
Applying the aforementioned test to the case at bar, we can readily see that
the element of control by the petitioner on Judico was very much present.
The record shows that petitioner Judico received a definite minimum amount
per week as his wage known as "sales reserve" wherein the failure to
maintain the same would bring him back to a beginner's employment with a
fixed weekly wage of P 200.00 for thirteen weeks regardless of production.
He was assigned a definite place in the office to work on when he is not in
the field; and in addition to his canvassing work he was burdened with the
job of collection. In both cases he was required to make regular report to the
company regarding these duties, and for which an anemic performance
would mean a dismissal. Conversely faithful and productive service earned
him a promotion to Zone Supervisor with additional supervisor's allowance, a
definite amount of P110.00 aside from the regular P 200.00 weekly
"allowance". Furthermore, his contract of services with petitioner is not for a
piece of work nor for a definite period.
On the other hand, an ordinary commission insurance agent works at his own
volition or at his own leisure without fear of dismissal from the company and
short of committing acts detrimental to the business interest of the company
or against the latter, whether he produces or not is of no moment as his
salary is based on his production, his anemic performance or even dead
result does not become a ground for dismissal. Whereas, in private
respondent's case, the undisputed facts show that he was controlled by
petitioner insurance company not only as to the kind of work; the amount of
results, the kind of performance but also the power of dismissal.
Undoubtedly, private respondent, by nature of his position and work, had
been a regular employee of petitioner and is therefore entitled to the
protection of the law and could not just be terminated without valid and
justifiable cause.
Facts:
Individual complainants have been working for Makati Haberdashery,
Inc. as tailors, seamsters, sewers, basters and plantsadoras. They were
paid on a piece-rate basis except the two who were paid on a monthly basis.
In addition to their piece-rate, they were given a daily allowance of three
(P3.00) pesos provided they report for work before 9:30 a.m. everyday. They
were required to work from or before 9:30 a.m. up to 6:00 or 7:00 p.m. from
Monday to Saturday and during peak periods even on Sundays and holidays.
Issue:
Ruling:
The facts at bar indubitably reveal that the most important requisite of
control is present. When a customer enters into a contract with the
haberdashery or its proprietor, the latter directs an employee who may be a
tailor, pattern maker, sewer or plantsadora to take the customers
measurement and to sew the pants, coat or shirt as specified by the
customer. Supervision is actively manifested in all these acts the manner
and quality of cutting, sewing and ironing.
Petitioner has reserved the right to control its employees not only as to
the result but also the means and methods by which the same are to be
accomplished. Unlike independent contractors who generally rely on their
own resources, the equipment, tools, accessories and paraphernalia used by
the workers are supplied and owned by the Haberdashery. The workers are
totally dependent on the employer in all theses aspects.
Facts:
The complainants worked as cargador at the warehouse and ricemills
of private respondent Corfarm at Umingan, Pangasinan since 1982. As
cargadores, they loaded, unloaded and piled sacks of palay from the
warehouse to the cargo trucks and those brought by cargo trucks for delivery
to different places. They were paid by Corfarm on a piece-rate basis. When
Corfarm denied them some benefits, they formed their union. Corfarm
replaced them with non-members of the union.
Respondent Corfamr denies that ut had the power to control over the
complainants, rationalizing that they were street-hired workers engaged
from time to time to do loading and unloading work; there was no
superintendent-in-charge to give orders; and there were no gate passes
issued, nor tools, equipment and paraphernalia issued by Corfarm for
loading/unloading. It attributes error to the solicitors generals reliance on
Article 280 [now 294] of the Labor Code. Citing Brent School, Inc. vs. Zamora
(181 SCRA 702, February 5, 1990), it asserts that a literal application of such
article will result in absurdity, where petitioners members will be regular
employees not only of respondents but also of several other rice mills, where
they allegedly also render service. Finally, Corfarm submits that the OSGs
position is negated by the fact petitioners members contracted for loading
and unloading services with respondent company when such work was
available when they felt lik it x x x.
Issue:
Whether street-hired cargadores be considered as regular
employees
Ruling:
The Court considers cargadores as regular employee. It is undeniable
that petitioners members worked as cargadores for private respondent.
They loaded, unloaded and pile sacks of palay from the warehouses to the
cargo trucks and from the cargo trucks to the buyers. This work is directly
related, necessary and vital to the operations of Corfarm. Moreover, Corfarm
did not even allege, much less prove, that petitioners members have
substantial capital or investment in the form of tools, equipment,
machineries, and work premises among others. Furthermore, said
respondent did no contradict petitioners allegation that it paid wages
directly to these workers without the intervention of any third-party
independent contractor. It also wielded the power of dismissal over
petitioners; in fact, its exercise of this power. Clearly, the workers are not
independent contractors.
111. Ruga et. al vs. NLRC ,GR No. 72654-61, January 22, 1990
Facts:
Petitioners were the fishermen-crew members of 7/B Sandyman II, one of
several fishing vessels owned and operated by private respondent De
Guzman Fishing Enterprises which is primarily engaged in the fishing
business with port and office at Camaligan, Camarines Sur. Petitioners
rendered service aboard said fishing vessel in various capacities, as follows:
Alipio Ruga and Jose Parma patron/pilot; Eladio Calderon, chief engineer;
Laurente Bautu, second engineer; Jaime Barbin, master fisherman; Nicanor
Francisco, second fisherman; Philip Cervantes and Eleuterio Barbin,
fishermen.
Disputing the finding of public respondent that a "joint fishing venture" exists
between private respondent and petitioners, petitioners claim that public
respondent exceeded its jurisdiction and/or abused its discretion when it
added facts not contained in the records when it stated that the pilot-crew
members do not receive compensation from the boat-owners except their
share in the catch produced by their own efforts; that public respondent
ignored the evidence of petitioners that private respondent controlled the
fishing operations; that public respondent did not take into account
established jurisprudence that the relationship between the fishing boat
operators and their crew is one of direct employer and employee.
We have consistently ruled that in determining the existence of an employeremployee relationship, the elements that are generally considered are the
following (a) the selection and engagement of the employee; (b) the
payment of wages; (c) the power of dismissal; and (d) the employer's power
to control the employee with respect to the means and methods by which
the work is to be accomplished. 8 The employment relation arises from
contract of hire, express or implied. 9 In the absence of hiring, no actual
employer-employee relation could exist.
From the four (4) elements mentioned, we have generally relied on the socalled right-of-control test where the person for whom the services are
performed reserves a right to control not only the end to be achieved but
also the means to be used in reaching such end. The test calls merely for the
existence of the right to control the manner of doing the work, not the actual
exercise of the right.
The petition is GRANTED. The questioned resolution of the National Labor
Relations Commission dated May 30,1985 is hereby REVERSED and SET
ASIDE. Private respondent is ordered to reinstate petitioners to their former
positions or any equivalent positions with 3-year backwages and other
monetary benefits under the law. No pronouncement as to costs.
112.
113.
114.
115.
116. Autobus transport system vs bautista (GR 156367, May 16 2005)
117. Union of Filipino Employees vs Vivar (GR 79255)
118. SAN MIGUEL BREWERY, INC V. DOMESTIC LABOR ORGANIZATION
FACTS:
The Democratic Labor Association filed complaint against the San Miguel
Brewery, Inc. embodying 12 demands for the betterment of the conditions of
employment of its members. The company filed its answer to the complaint
specifically denying its material averments and answering the demands point
by point. The company asked for the dismissal of the complaint.
At the hearing, the union manifested its desire to confine its claim to its
demands for overtime, night-shift differential pay, and attorney's fees,
although it was allowed to present evidence on service rendered during
Sundays and holidays, or on its claim for additional separation pay and sick
and vacation leave compensation.
After the case had been submitted for decision, the Presiding Judge held that
the employees are entitled to the additional compensation provided in the
Eight Hour Labor Law, night-shift differential pay and additional
compensation on work done during Sunday or holiday. The motion for
reconsideration of the petitioner was denied by the industrial court en banc,
which affirmed the decision of the court a quo with few exceptions, the San
Miguel Brewery, Inc. interposed the present petition for review.
ISSUE:
Whether or not the employees are entitled to the benefits of Eight Hour
Labor Law.
RULING:
The Eight-Hour Labor Law only has application where an employee or laborer
is paid on a monthly or daily basis, or is paid a monthly or daily
compensation, in which case, if he is made to work beyond the requisite
period of 8 hours, he should be paid the additional compensation prescribed
by law. This law has no application when the employee or laborer is paid on a
piece-work, "pakiao", or commission basis, regardless of the time employed.
The philosophy behind this exemption is that his earnings in the form of
commission based on the gross receipts of the day. His participation depends
upon his industry so that the more hours he employs in the work the greater
are his gross returns and the higher his commission.
The Department of Labor, called upon to implement, the Eight-Hour Labor
Law, is of this opinion when on December 9, 1957 it made the ruling on a
query submitted to it, thru the Director of the Bureau of Labor Standards, to
the effect that field sales personnel receiving regular monthly salaries, plus
commission, are not subject to the Eight-Hour Labor Law. Thus, on this point,
said official stated:
. . . Moreover, when a fieldman receives a regular monthly salary plus
commission on percentage basis of his sales, it is also the established policy
of the Office to consider his commission as payment for the extra time he
renders in excess of eight hours, thereby classifying him as if he were on
piecework basis, and therefore, technically speaking, he is not subject to the
Eight-Hour Labor Law.
The Supreme Court held that the industrial court erred in holding that the
Eight-Hour Labor Law applies to the employees composing the outside
service force and in ordering that they be paid the corresponding additional
compensation. The rest of the decision insofar as work performed on
Sundays and holidays as well as the award for night salary differentials, is
affirmed.
DOCTRINE:
Regular full-time monthly paid teachers in private school are entitled to
salary and emergency cost-of-living allowance during semestral breaks.
FACTS:
The petitioner is a labor union composed of full-time faculty members of the
respondent University of Pangasinan paid on a regular monthly basis. The
petitioner filed a claim with the NLRC for respondents non-payment of the
ECOLA (emergency cost-of-living allowance) during the semestral break. The
private respondent claims that the teachers are not entitled thereto because
the semestral break is not an integral part of the school year and there being
no actual services rendered by the teachers during said period, the principle
of "No work, no pay" applies.
ISSUE:
Whether or not the petitioners are entitled to ECOLA during the semestral
break?
RULING:
Yes, the petitioners are entitled to receive ECOLA during the semestral break.
It is beyond dispute that the petitioners members are full-time employees
receiving their monthly salaries irrespective of the number of working days
or teaching hours in a month. However, they find themselves in a most
peculiar situation whereby they are forced to go on leave during semestral
breaks. These semestral breaks are in the nature of work interruptions
beyond the employees control. The duration of the semestral break varies
from year to year dependent on a variety of circumstances affecting at times
only the private respondent but at other times all educational institutions in
the country. As such, these breaks cannot be considered as absences within
the meaning of the law for which deductions may be made from monthly
allowances. The "No work, no pay" principle does not apply in the instant
case. The petitioners members received their regular salaries during this
period. Petitioners, in the case at bar, certainly do not, ad voluntatem,
absent themselves during semestral breaks. Rather, they are constrained to
take mandatory leave from work. For this they cannot be faulted nor can
they be begrudged that which is due them under the law. To a certain extent,
the private respondent can specify dates when no classes would be held.
Surely, it was not the intention of the framers of the law to allow employers
to withhold employee benefits by the simple expedient of unilaterally
imposing "no work" days and consequently avoiding compliance with the
mandate of the law for those days.
The semestral break scheduled is an interruption beyond petitioners control
and it cannot be used "effectively nor gainfully in the employees interest.
Thus, the semestral break may also be considered as "hours worked." For
this, the teachers are paid regular salaries and, for this, they should be
entitled to ECOLA. Not only do the teachers continue to work during this
short recess but much less do they cease to live for which the cost of living
allowance is intended. The legal principles of "No work, no pay; No pay, no
ECOLA" must necessarily give way to the purpose of the law to augment the
income of employees to enable them to cope with the harsh living conditions
brought about by inflation; and to protect employees and their wages against
the ravages brought by these conditions. Significantly, it is the commitment
of the State to protect labor and to provide means by which the difficulties
faced by the working force may best be alleviated. To submit to the
respondents interpretation of the no work, no pay policy is to defeat this
noble purpose. The Constitution and the law mandate otherwise.
128. Luzon Stevedoring Co., Inc. vs. Luzon Marine Department Union, G.R. No. L-9265,
April 29, 1957
DOCTRINE:
A laborer need not leave the premises of the factory, shop or boat in order that his period of rest
shall not be counted, it being enough that he ceases to work, may rest completely and leave or
may leave at his will the spot where he actually stays while working to go somewhere else,
whether within or outside the premises of said factory, shop or boat. The period of such reach
shall not be counted as hours worked.
FACTS:
Petitioner is a corporation engaged in the operation of motor tugboats and employment of
officers, engineers and crewmembers to work thereat. The seamen union declared a strike against
the corporation for several issues including the nonpayment of overtime pay despite the fact that
they are being required to report for 12 hours from 6:00 am to 6:00pm.
ISSUE:
Whether or not the hours that a seaman stayed onboard a vessel without actually working could
be considered as hours worked?
RULING:
No, the hours that a seaman stayed onboard a vessel without performing actual working could
not be considered as hours worked. Hence, the seamen in this case are not entitled to overtime
pay even though they stayed in the motorboat beyond eight hours.For the purposes of this case,
the Supreme Court said that it do not need to set for seamen a criterion different from that
applied to laborers on land. The only thing to be done is to determine the meaning and scope of
the term "working place" used in the law. A laborer need not leave the premises of the factory,
shop or boat in order that his period of rest shall not be counted, it being enough that he "cease to
work", may rest completely and leave or may leave at his will the spot where he actually stays
while working, to go somewhere else, whether within or outside the premises of said factory,
shop or boat. If these requisites are complied with, the period of such rest shall not be counted.
129. Cagampan, et al. vs. NLRC, G.R. Nos. 85122-24, March 12, 1991
DOCTRINE:
A laborer need not leave the premises of the factory, shop or boat in order that his period of rest
shall not be counter, it being enough that he ceases to work, may rest completely and leave or
may leave at his will the spot where he actually stays while working to go somewhere else,
whether within or outside the premises of said factory, shop or boat. The period of such reach
shall not be counted as hours worked.
FACTS:
Petitioners are seafarers who entered into separate contracts of employment with Golden Light
Ocean Transport, Ltd. and were deployed thereafter. After they were discharged, petitioners filed
complaints against the company for non-payment of overtime pay, vacation pay and terminal
pay. The POEA found for the petitioners and the agency ordered the company to pay the
petitioners their leave pay and overtime pay. On appeal, the NLRC found that the petitioners in
this case is not entitled to overtime pay.
ISSUE:
Whether or not seafarers onboard the vessel without performing actual work is entitled to
overtime pay?
RULING:
No, the hours that a seaman stayed onboard a vessel without performing actual working could
not be considered as hours worked. Hence, the seamen in this case are not entitled to overtime
pay even though they stayed in the motorboat beyond eight hours.
As regards the question of overtime pay, the NLRC cannot be faulted for disallowing the
payment of said pay because it merely straightened out the distorted interpretation asserted by
petitioners and defined the correct interpretation of the provision on overtime pay embodied in
the contract conformably with settled doctrines on the matter. Notably, the NLRC ruling on the
disallowance of overtime pay is ably supported by the fact that petitioners never produced any
proof of actual performance of overtime work.
The Supreme Court also said that it can not agree with the Court below that peitioners should be
paid overtime compensation for every hour in excess of the regular working hours that he was on
board his vessel or barge each day, irrespective of whether or not he actually put in work during
those hours. Seamen are required to stay on board their vessels by the very nature of their duties,
and it is for this reason that, in addition to their regular compensation, they are given free living
quarters and subsistence allowances when required to be on board. It could not have been the
purpose of our law to require their employers to pay them overtime even when they are not
actually working; otherwise, every sailor on board a vessel would be entitled to overtime for
sixteen hours each day, even if he spent all those hours resting or sleeping in his bunk, after his
regular tour of duty. The correct criterion in determining whether or not sailors are entitled to
overtime pay is not, therefore, whether they were on board and can not leave ship beyond the
regular eight working hours a day, but whether they actually rendered service in excess of said
number of hours.
130. National development company vs CIR (L-15422)
131. Sime darby pilipinas, inc., vs. NLRC (119205)
132.Mercury drug co., inc. vs nardo dayao (L-30452)
133. NATIONAL SHIPYARDS AND STEEL CORPORATION vs. CIR
DOCTRINE:
The correct criterion in determining whether or not sailors are entitled to overtime pay is
not, therefore, whether they were on board and can not leave ship beyond the regular
eight working hours a day, but whether they actually rendered service in excess of said
number of hours.
FACTS:
The petitioner NASSCO, a government-owned and controlled corporation, is
the owner of several barges and tugboats used in the transportation of
cargoes and personnel in connection with its business of shipbuilding and
repair. In order that its bargeman could immediately be called to duty
whenever their services are needed, they are required to stay in their
respective barges, for which reason they are given living quarters therein as
well as subsistence allowance of P1.50 per day during the time they are on
board. However, upon prior authority of their superior officers, they may
leave their barges when said barges are idle.
The 39 crew members of petitioner's tugboat service, including therein
respondent Dominador Malondras, filed a complaint for the payment of
overtime compensation .In the course of the proceeding, the parties entered
into a stipulation of facts wherein the NASSCO recognized and admitted 4. That to meet the exigencies of the service in the performance of the
above work, petitioners have to work when so required in excess of eight (8)
hours a day and/or during Sundays and legal holidays (actual overtime
service is subject to determination on the basis of the logbook of the vessels,
time sheets and other pertinent records of the respondent).
6. The petitioners are paid by the respondent their regular salaries and
subsistence allowance, without additional compensation for overtime work;
On February 20, 1960, the Court ordered the examiner to make a reexamination of the records with a view to determining Malondras' overtime
service from January 1, 1954 to December 31, 1956, and from January 1,
1957 to April 30, 1957, but without deducting from the compensation to be
paid to him his subsistence allowance. The examiner, on April 23, 1960,
submitted a report giving Malondras an average of sixteen (16) overtime
hours a day, on the basis of his time sheets, and recommending the payment
to him of the total amount of P15,242.15 as overtime compensation during
the periods covered by the report.
ISSUE:
Whether or not Malondras is entitled to the 16 hours overtime as a worker in
a barge.
RULING:
The only matter to be determined here is, the number of hours of overtime
for which Malondras should be paid for the periods January 1, 1954 to
December 31, 1956, and from January to April 30, 1957. Respondents urge
that this is a question of fact and not subject to review by this Court, there
being sufficient evidence to support the Industrial Court's ruling on this point.
It appears, however, that in crediting Malondras with 16 hours of overtime
service daily for the periods in question, the court examiner relied only on his
daily time sheets which, although approved by petitioner's officers in charge
and its auditors, do not show the actual number of hours of work rendered by
him each day.
We can not agree with the Court below that respondent Malondras should be
paid overtime compensation for every hour in excess of the regular working
hours that he was on board his vessel or barge each day, irrespective of
whether or not he actually put in work during those hours. Seamen are
required to stay on board their vessels by the very nature of their duties, and
it is for this reason that, in addition to their regular compensation, they are
given free living quarters and subsistence allowances when required to be on
board. It could not have been the purpose of our law to require their
employers to pay them overtime even when they are not actually working;
otherwise, every sailor on board a vessel would be entitled to overtime for
sixteen hours each day, even if he had spent all those hours resting or
sleeping in his bunk, after his regular tour of duty.
While Malondras' daily time sheets do not show his actual working hours,
nevertheless, petitioner has already admitted in the Stipulation of Facts in
this case that Malondras and his co-claimants did render service beyond
eight (8) hours a day when so required by the exigencies of the service; and
in fact, Malondras was credited and already paid for five (5) hours daily
overtime work during the period from May 1 to December 31, 1957, under
the examiner's first report. Since Malondras has been at the same job since
1954, it can be reasonably inferred that the overtime service he put in
whenever he was required to be aboard his barge all day from 1954 to 1957
would be more or less consistent.
WHEREFORE, the order appealed from is modified in the sense that
respondent Malondras should be credited five (5) overtime hours instead of
sixteen (16) hours a day for the periods covered by the examiner's report.
Whether or not the cost of living allowance and longevity pay be included in
the computation of overtime pay
Held:
The cost-of-living allowance began to be granted in 1958 and the longevity pay in
1981. In other words, they were granted by PNB upon realizing the difficult plight of
its labor force in the face of the unusual inflationary situation in the economy of the
country, which, however acute, was nevertheless expected to improve. There was
thus evident an inherently contingent character in said allowances. They were not
intended to be regular, much less permanent additional part of the compensation of
the employees and workers. Also with the longevity pay; manifestly, this was not
based on the daily or monthly amount of work done or service rendered it was more
of a gratuity for their loyalty, or their having been in the bank's employment for
consideration periods of time. What are decisive in determining the basis for the
computation of overtime pay are two very germane considerations, namely, (1)
whether or not the additional pay is for extra work done or service rendered and (2)
whether or not the same is intended to be permanent and regular, not contingent
nor temporary and given only to remedy a situation which can change any time.
Overtime pay is for extra effort beyond that contemplated in the employment
contract, hence when additional pay is given for any other purpose, it is illogical to
include the same in the basis for the computation of overtime pay. This holding
supersedes NAWASA.
pay which was different from "regular pay". It declared that "regular base
pay" referred only to the basic or monthly pay exclusive of Christmas bonus
and other fringe benefits. Furthermore, the validity of the provision of the
1965 collective bargaining agreement concerning the computation of the
employees' overtime pay on the basis of their "regular base pay" was upheld
by the court for the reason that the same was even higher than the overtime
pay prescribed by law. The court emphasized that contracts are binding on
the parties insofar as they are not contrary to law, morals and public order
FACTS:
On April 15,1966, the Bisig ng Manggagawa ng Philippine Refining Company,
Inc., as the representative union of the rank and file employees of the
Philippine Refining Co., Inc., filed with the Court of First Instance of Manila a
petition for declaratory relief praying, among others
That a
declaratory judgment be rendered declaring and adjudicating the e rights
and duties of petitioner and respondent under the above quoted provision of
their Collective 13 - agreements and further declaring that the Christmas
bonus of one month or thirty days pay and other de determinable benefits
should be included for the purpose of computation of the overtime pay
spread throughout the twelve months period of each year from August, 1963
up to the present and subsequently hereafter; and that respondent be
therefore directed to pay such differential in the overtime pay of all the
employees of the herein respondent ;
Petitioner union contended that the respondent company was under
obligation to include the employees' Christmas bonus and other fringe
benefits in the computation of their overtime pay by virtue of the ruling of
this Court in the case of NAWASA vs. NAWASA Consolidated Unions
On May 3, 1966, the Philippine Refining Co.. Inc. filed its answer to the
petition alleging, among others, that never did the parties intend, in the
1965 collective bargaining agreement and in prior agreements, to include
the employees' Christmas bonus and other fringe benefits in the
computation of the overtime pay and that the company precisely agreed to a
rate of 50%, which is much higher than the 25% required by the Eight-Hour
Labor Law (Commonwealth Act No. 444, as amended), on the condition that
in computing the overtime pay only the "regular base pay" would be
considered. Furthermore, respondent company contended that the ruling of
this Court in the NAWASA case relative to the computation of overtime
This is an appeal from the decision of the Court of First Instance of Manila
dated December 8, 1966, in Civil Case No. 65082, holding that Christmas
bonus and other fringe benefits are excluded in the computation of the
overtime pay of the members of the appellant union under Section 6, Article
VI of the 1965 collective bargaining agreement which reads as follows:
Overtime pay at the rate of regular base pay plus 50% thereof shag be
paid for all work performed in excess of eight hours on ordinary days within
the work week (that is to say, Monday to Friday).
ISSUE:
Whether or not the phrase "regular base pay" as used in the above-quoted
provision of the 1965 CBA includes Christmas bonus and other fringe
benefits?
HELD:
NO, the phrase "regular base pay" is clear, unequivocal and requires no
interpretation. It means regular basic pay and necessarily excludes money
received in different concepts such as Christmas bonus and other fringe
the petitioners were paid their monthly salaries plus 25% additional
compensation for work performed on Sundays and holidays. The findings of
fact of the CIR are conclusive to the Court
140. JOSE RIZAL COLLEGE v. NLRC and NATOW G.R. 65482 dated 1 Dec.
1987(art. 94)
SYLLABUS:
LABOR LAW; HOLIDAY and HOLIDAY PAYS; ARTICLE 8
FACTS:
Petitioner is a non-stock, non-profit educational institution duly organized
and existing under the laws of the Philippines. It has three groups of
employees categorized as follows: (a) personnel on monthly basis, who
receive their monthly salary uniformly throughout the year, irrespective of
the actual number of working days in a month without deduction for
holidays; (b) personnel on daily basis who are paid on actual days worked
and they receive unworked holiday pay and (c) collegiate faculty who are
paid on the basis of student contract hour. Before the start of the semester
they sign contracts with the college undertaking to meet their classes as per
schedule. Unable to receive their corresponding holiday pay, as claimed,
from 1975 to 1977.
ISSUE:
The sole issue in this case is whether or not the school faculty who according
to their contracts are paid per lecture hour are entitled to unworked holiday
pay.
HELD:
Petitioner maintains the position among others, that it is not covered by Book
V of the Labor Code on Labor Relations considering that it is a non- profit
institution and that its hourly paid faculty members are paid on a "contract"
basis because they are required to hold classes for a particular number of
hours.
if a regular week day is declared a holiday, the school calendar is extended
to compensate for that day. Thus petitioner argues that the advent of any of
the legal holidays within the semester will not affect the faculty's salary
because this day is not included in their schedule while the calendar is
extended to compensate for special holidays.
Regular holidays specified as such by law are known to both school and
faculty members as no class days;" certainly the latter do not expect
payment for said unworked days, and this was clearly in their minds when
they entered into the teaching contracts.
On the other hand, both the law and the Implementing Rules governing
holiday pay are silent as to payment on Special Public Holidays.
Declared purpose of the holiday pay which is the prevention of diminution of
the monthly income of the employees on account of work interruptions is
defeated when a regular class day is cancelled on account of a special public
holiday and class hours are held on another working day to make up for time
lost in the school calendar.
PREMISES CONSIDERED, the decision of respondent National Labor Relations
Commission is hereby set aside, and a new one is hereby RENDERED:
(a) exempting petitioner from paying hourly paid faculty members their pay
for regular holidays, whether the same be during the regular semesters of
the school year or during semestral, Christmas, or Holy Week vacations;
(b) but ordering petitioner to pay said faculty members their regular hourly
rate on days declared as special holidays or for some reason classes are
called off or shortened for the hours they are supposed to have taught,
whether extensions of class days be ordered or not; in case of extensions
said faculty members shall likewise be paid their hourly rates should they
teach during said extensions.
Article 169 and 170 of PD No. 1083 should be read in conjunction with Article
94 of Labor Code which provides for the right of every worker to be paid of
holiday pay.
Petitioner asserts Art.3(3) of PD No. 1083 provides that it shall be applicable
only to Muslims. However, the Court said that said article declares that
nothing herein shall be construed to operate to the prejudice of a nonMuslim. There should be no distinction between Muslims and non-Muslims as
regards payment of benefits for Muslim holidays.
It was said also that the The Court of Appeals did not err in sustaining
Undersecretary Espaol who stated: Assuming arguendo that the
respondents position is correct, then by the same token, Muslims throughout
the Philippines are also not entitled to holiday pays on Christian holidays
declared by law as regular holidays. We must remind the respondentappellant that wages and other emoluments granted by law to the working
man are determined on the basis of the criteria laid down by laws and
certainly not on the basis of the workers faith or religion.
142. Insular bank of asia and American employees union vs Inciong (L52415)
143. the chartered bank employees association vs. Hon Blas OPLE (L44717)
144. Obango vs NLRC (L-147420)
145 Union of Filipro Employees vs Benigno vivar (79255)
146 Wellington Investment and Manufacturing Corporation
147 Jose rizal College vs NLRC (65482)
148 Baltazar vs San Miguel brewery (L- 23076)
149 Davao integrated port stevedoring services vs abarquez
150 Kwok vs Philippine Carpet Manufacturing Corp.
102132
DOCTRINE
Applying this by analogy, since the commissions in the present case were earned by actual
market transactions attributable to petitioners, these should be included in their separation pay
FACTS
F.E. Zuellig Inc. filed with the Department of Labor an application seeking clearance to
terminate the services of Jose Songco, Romeo Cipres and Amancio Manuel on the ground of
retrenchment due to financial losses. It was opposed by the petitioners because they claim that
the company is not suffering any loss. The further claim that they were terminated because of
their membership in the union. However, on the last hearing of the case, the petitioners
manifested that they are no longer contesting their dismissal. The petitioners were part of the
sales force of Zuellig and were receiving P40,000 plus their commission for every sale that they
were able to make.
ISSUE
Whether or not earned sales commissions and allowances should be included in the
monthly salary of petitioners for the purpose of computation of their separation pay?
RULING
Yes, insofar as whether the allowances should be included in the monthly salary of petitioners for
the purpose of computation of their separation pay is concerned, this has been settled in the case of Santos
vs. NLRC, 76721, in the computation of backwages and separation pay, account must be taken not only of
the basic salary of petitioner but also of her transportation and emergency living allowances. In the issue
of whether commission should be included in the computation of their separation pay, it is proper to
define first commission. Blacks Law Dictionary defined commission as the recompensed, compensation
or reward of an agent, salesman, executor, trustees, receiver, factor, broker or bailee, when the same is
calculated as a percentage on the amount of his transactions or on the profit to the principal. The nature of
the work of a salesman and the reason for such type of remuneration for services rendered demonstrate
clearly that the commission are part of petitioners wage and salary. Some salesmen do not receive any
basic salary but depend on commission and allowances or commissions alone, are part of petitioners
wage and salary. Some salesman do not received any basic salary but depend on commission and
allowances or commissions alone, although an employer-employee relationship exist. In Soriano v.
NLRC, it is ruled then that, the commissions also claimed by petitioner (override commission plus net
deposit incentive) are not properly includible in such base figure since such commissions must be earned
by actual market transactions attributable to petitioner. Applying this by analogy, since the commissions
in the present case were earned by actual market transactions attributable to petitioners, these should be
included in their separation pay. In the computation thereof, what should be taken into account is the
average commissions earned during their last year of employment.
DOCTRINE
Percentage commission based on the gross sale of the fish-catch i.e. 13% of the proceeds of the
sale if the total proceeds exceeded the cost of the crude oil consumed during the fishing trip,
otherwise only 10% of the proceeds of the sale. Such compensation falls within the scope and
meaning of the term "wage" as defined under Article 97(f) of the Labor Code
FACTS
Petitioners were the fishermen-crew members of 7/B Sandyman II, one of several fishing
vessels owned and operated by private respondent De Guzman Fishing Enterprises which is
primarily engaged in the fishing business with port and office at Camaligan, Camarines Sur.
Petitioners rendered service aboard said fishing vessel in various capacities, as follows: Alipio
Ruga and Jose Parma patron/pilot; Eladio Calderon, chief engineer; Laurente Bautu, second
engineer; Jaime Barbin, master fisherman; Nicanor Francisco, second fisherman; Philip
Cervantes and Eleuterio Barbin, fishermen.
For services rendered in the conduct of private respondent's regular business of "trawl" fishing,
petitioners were paid on percentage commission basis in cash by one Mrs. Pilar de Guzman,
cashier of private respondent. As agreed upon, they received thirteen percent (13%) of the
proceeds of the sale of the fish-catch if the total proceeds exceeded the cost of crude oil
consumed during the fishing trip, otherwise, they received ten percent (10%) of the total
proceeds of the sale. The patron/pilot, chief engineer and master fisherman received a minimum
income of P350.00 per week while the assistant engineer, second fisherman, and fishermanwinchman received a minimum income of P260.00 per week.
On September 11, 1983 upon arrival at the fishing port, petitioners were told by Jorge de
Guzman, president of private respondent, to proceed to the police station at Camaligan,
Camarines Sur, for investigation on the report that they sold some of their fish-catch at midsea to
the prejudice of private respondent. Petitioners denied the charge claiming that the same was a
countermove to their having formed a labor union and becoming members of Defender of
Industrial Agricultural Labor Organizations and General Workers Union (DIALOGWU) on
September 3, 1983.
During the investigation, no witnesses were presented to prove the charge against petitioners, and
no criminal charges were formally filed against them. Notwithstanding, private respondent
refused to allow petitioners to return to the fishing vessel to resume their work on the same day,
September 11, 1983.
On September 22, 1983, petitioners individually filed their complaints for illegal dismissal and
non-payment of 13th month pay, emergency cost of living allowance and service incentive pay,
with the then Ministry (now Department) of Labor and Employment, Regional Arbitration
Branch No. V, Legaspi City, Albay. They uniformly contended that they were arbitrarily
dismissed without being given ample time to look for a new job.
ISSUES
Whether or not the fishermen-crew members of the trawl fishing vessel 7/B Sandyman II
are employees of its owner-operator, De Guzman Fishing Enterprises.
Whether or not the commission received by the fishermen can be considered as wage
RULING
1. Yes, the Court ruled that in determining the existence of an employer-employee
relationship, the elements that are generally considered are the following (a) the selection and
engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the
employer's power to control the employee with respect to the means and methods by which the
work is to be accomplished. 8 The employment relation arises from contract of hire, express or
implied. 9 In the absence of hiring, no actual employer-employee relation could exist.
From the four (4) elements mentioned, we have generally relied on the so-called right-of-control
test where the person for whom the services are performed reserves a right to control not only the
end to be achieved but also the means to be used in reaching such end. The test calls merely for
the existence of the right to control the manner of doing the work, not the actual exercise of the
right. We have examined the jurisprudence on the matter and find the same to be supportive of
petitioners' stand. In Negre vs. WCC 135 SCRA 653 (1985), we held that fishermen crew
members who were recruited by one master fisherman locally known as "maestro" in charge of
recruiting others to complete the crew members are considered employees, not industrial
partners, of the boat-owners.
2. Yes, it must be noted that petitioners received compensation on a percentage commission
based on the gross sale of the fish-catch i.e. 13% of the proceeds of the sale if the total proceeds
exceeded the cost of the crude oil consumed during the fishing trip, otherwise only 10% of the
proceeds of the sale. Such compensation falls within the scope and meaning of the term "wage"
as defined under Article 97(f) of the Labor Code, thus:
(f) "Wage" paid to any employee shall mean the remuneration or earnings, however designated,
capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece
or commission basis, or other method of calculating the same, which is payable by an employer
to an employee under a written or unwritten contract of employment for work done or to be
done, or for services rendered or to be rendered, and included the fair and reasonable value, as
determined by the Secretary of Labor, of board, lodging, or other facilities customarily furnished
by the employer to the employee. . . .
The petition is GRANTED. The questioned resolution of the National Labor Relations
Commission dated May 30,1985 is hereby REVERSED and SET ASIDE. Private respondent is
ordered to reinstate petitioners to their former positions or any equivalent positions with 3-year
backwages and other monetary benefits under the law. No pronouncement as to costs.
FACTS
States Marine Corporation and Royal Line, Inc. were engaged in the business of marine
coastwise transportation, employing therein several steamships of Philippine registry. They had a
collective bargaining contract with the respondent Cebu Seamen's Association, Inc. On
September 12, 1952, the respondent union filed a complaint against the petitioners alleging that
the officers and men working on board the petitioners vessels have not been paid their sick
leave, vacation leave and overtime pay; that the petitioners threatened then to accept the
reduction of salaries, observed by other ship owners.
After the Minimum Wage Law had taken effect, the petitioners required their employees on
board their vessels, to pay the sum of P0.40 for every meal, while the masters and officers were
required to pay their meals and that because the captain had refused to yield to the general
reduction of salaries, the petitioners dismissed the captain. The petitioner, on their defense, stated
that they have suffered a financial losses in the operation of their vessels and there is no law
which provides for the payment of sick leave or vacation leave to employees of private firms;
that with regards to their overtime pay, they have always observed the Eight-hour labor Law and
that overtime does not apply to those who provide means of transportation.
ISSUE
Whether or not the employees should be required to pay for their meals
RULING
No, the benefit or privilege given to the employee which constitutes an extra
remuneration above and over his basic or ordinary earning or wage, is supplement; and when
said benefit or privilege is part of the laborers' basic wages, it is a facility. The criterion is not so
much with the kind of the benefit or item (food, lodging, bonus or sick leave) given, but its
purpose. Considering, therefore, as definitely found by the respondent court that the meals were
freely given to crew members prior to August 4, 1951, while they were on the high seas "not as
part of their wages but as a necessary matter in the maintenance of the health and efficiency of
the crew personnel during the voyage", the deductions therein made for the meals given after
August 4, 1951, should be returned to them, and the operator of the coastwise vessels affected
should continue giving the same benefit..
The shipping companies argue that the furnishing of meals to the crew before the
effectivity of Rep. Act No. 602, is of no moment, because such circumstance was already taken
into consideration by Congress, when it stated that "wage" includes the fair and reasonable value
of boards customarily furnished by the employer to the employees. If We are to follow the theory
of the herein petitioners, then a crew member, who used to receive a monthly wage of P100.00,
before August 4, 1951, with no deduction for meals, after said date, would receive only P86.00
monthly (after deducting the cost of his meals at P.40 per meal), which would be very much less
than the P122.00 monthly minimum wage, fixed in accordance with the Minimum Wage Law.
Instead of benefiting him, the law will adversely affect said crew member. Such interpretation
does not conform with the avowed intention of Congress in enacting the said law.
DOCTRINE:
rule of "a fair day's wage for a fair day's labor"
FACTS:
Private respondent Dolina was admitted to the Philippine Airlines (PAL) Aviation School
for training as a pilot beginning 16 January 1973. The training agreement bound PAL to provide
regular and permanent employment to Dolina upon completion of the training course. On 25
January 1974, Dolina completed the course, and undertook an equipment qualification course up
to 4 October 1974. On 9 October 1974, the Civil Aeronautics Administration issued him a license
as Commercial Pilot and PAL then extended him a temporary appointment for six (6) months as
Limited First Officer. When his appointment was due to expire on 30 April 1975, Dolina had
only logged eighty four (84) hours and fifty five (55) minutes flying time, short of the minimum
500 flying hours required for regularization as First Officer. To enable him to complete the
requirement, his employment was extended for another six months which appointment was
described as "permanent." On 31 October 1975, when his appointment was again due to expire,
he was still short of the minimum flying time requirement such that his appointment was again
extended up to 30 April 1976. During this third extension of his appointment, Dolina completed
the 500 flying hours requirement, and thus on 31 March 1976 he applied for regularization as
First Officer. Pending his physical examination by the chief Flight Surgeon, his appointment was
again extended to 31 October 1976. On 17 August 1976, Dolina took a psychological
examination wherein his "Adaptability Rating" was found to be "unacceptable" .On 23
September 1976, complainant was again subjected to an examination and interview by the Pilot
Acceptance Qualifications Board as part of the regularization process wherein Dolina was
declared unfit to work. After the recommendation of the Board of his termination and while
under preventive suspension, the parties signed an agreement with the Secretary of Labor, but
subsequently PAL removed Dolina from its payroll effective 1 April 1979. Dolina then appealed
the Labor Arbiter's decision to the public respondent NLRC on 29 April 1979 and there filed a
motion praying that PAL be ordered to return him to PAL's payroll, contending that the Labor
Arbiter's decision was not yet final because of his timely appeal. PAL opposed the motion
claiming that it was no longer obliged to return Dolina to its payroll since the decision of the
Labor Arbiter dated 23 March 1979 in its favor was a final resolution of the case by arbitration.
Public respondent NLRC rendered its decision affirming the appealed ruling, hence this petition
for temporary restraining order.
ISSUE:
Whether private respondent was entitled to his salaries from April 1, 1979 until the case
is finally resolved.
RULING:
In view of the above finding of valid dismissal, the NLRC had no authority to order the
continued payment of Dolina's salaries from 1 April 1979 until the case is finally resolved. The
NLRC's order would result in compensating Dolina for services no longer rendered and when he
is no longer in PAL's employ. This is contrary to the age-old rule of "a fair day's wage for a fair
day's labor" which continues to govern the relation between labor and capital and remains a basic
factor in determining employees' wages [Durabilt Recapping Plant & Co. v. National Labor
Relations Commission, G.R. No. 76746, July 27, 1987, 152 SCRA 328]. So that, if there is no
work performed by the employee there can be no wage or pay unless the laborer was able,
willing and ready to work but was prevented by management or was illegally locked out,
suspended or dismissed. Where the employee's dismissal was for a just cause, it would neither be
fair nor just to allow the employee to recover something he has not earned and could not have
earned [Santos v. National Labor Relations Commission, G.R. No. 76721, September 21, 1987,
154 SCRA 166].
Moreover, in ordering the continued payment of Dolina's salaries from 1 April 1979 until
the case is finally resolved, the NLRC in effect ordered the payment of backwages to Dolina
notwithstanding its finding of a valid dismissal
DOCTRINE:
"Equal pay for equal work." Persons who work with substantially equal qualifications,
skill, effort and responsibility, under similar conditions, should be paid similar salaries.
FACTS:
Private respondent International School, Inc is a domestic educational institution
established primarily for dependents of foreign diplomatic personnel and other temporary
residents. Accordingly, the School hires both foreign and local teachers as members of its faculty,
classifying the same into two: (1) foreign-hires and (2) local-hires. The School employs four tests
to determine whether a faculty member should be classified as a foreign-hire or a local hire: a.)
What is one's domicile? b.) Where is one's home economy? c.) To which country does one owe
economic allegiance? d.) Was the individual hired abroad specifically to work in the School and
was the School responsible for bringing that individual to the Philippines?
The School grants foreign-hires certain benefits not accorded local-hires. These include
housing, transportation, shipping costs, taxes, and home leave travel allowance. Foreign-hires are
also paid a salary rate twenty-five percent (25%) more than local-hires. The School justifies the
difference on two "significant economic disadvantages" foreign-hires have to endure, namely: (a)
the "dislocation factor" and (b) limited tenure. When negotiations for a new collective bargaining
agreement were held on June 1995, petitioner International School Alliance of Educators, "a
legitimate labor union and the collective bargaining representative of all faculty members" of the
School, contested the difference in salary rates between foreign and local-hires.
On September 7, 1995, petitioner filed a notice of strike. The failure of the National
Conciliation and Mediation Board to bring the parties to a compromise prompted the Department
of Labor and Employment (DOLE) to assume jurisdiction over the dispute. On June 10, 1996,
the DOLE Acting Secretary, Crescenciano B. Trajano, issued an Order resolving the parity and
representation issues in favor of the School. Then DOLE Secretary Leonardo A. Quisumbing
subsequently denied petitioner's motion for reconsideration in an Order dated March 19, 1997.
Petitioner claims that the point-of-hire classification employed by the School is
discriminatory to Filipinos and that the grant of higher salaries to foreign-hires constitutes racial
discrimination. The School disputes these claims and gives a breakdown of its faculty members,
numbering in all, with nationalities other than Filipino, who have been hired locally and
classified as local hires. The Acting Secretary of Labor found that these non-Filipino local-hires
received the same benefits as the Filipino local-hires.
ISSUE:
Whether or not there was an equal pay for an equal work.
RULING:
We cannot agree. The foregoing provisions impregnably institutionalize in this
jurisdiction the long honored legal truism of "equal pay for equal work." Persons who work with
substantially equal qualifications, skill, effort and responsibility, under similar conditions, should
be paid similar salaries. This rule applies to the School, its "international character"
notwithstanding.
If an employer accords employees the same position and rank, the presumption is that
these employees perform equal work. This presumption is borne by logic and human experience.
If the employer pays one employee less than the rest, it is not for that employee to explain why
he receives less or why the others receive more. That would be adding insult to injury. The
employer has discriminated against that employee; it is for the employer to explain why the
employee is treated unfairly.
The local-hires perform the same services as foreign-hires and they ought to be paid the
same salaries as the latter. For the same reason, the "dislocation factor" and the foreign-hires'
limited tenure also cannot serve as valid bases for the distinction in salary rates. The dislocation
factor and limited tenure affecting foreign-hires are adequately compensated by certain benefits
accorded them which are not enjoyed by local-hires, such as housing, transportation, shipping
costs, taxes and home leave travel allowances.
In this case, we find the point-of-hire classification employed by respondent School to
justify the distinction in the salary rates of foreign-hires and local hires to be an invalid
classification. There is no reasonable distinction between the services rendered by foreign-hires
and local-hires. The practice of the School of according higher salaries to foreign-hires
contravenes public policy and, certainly, does not deserve the sympathy of this Court.
156. ATOK-BIG WEDGE MINING CO., INC., vs. ATOK-BIG WEDGE MUTUAL
BENEFIT ASSOCIATION,
DOCTRINE:
The "minimum wage" can by no means imply only the actual minimum. Some margin or
leeway must be provided, over and above the minimum, to take care of contingencies such as
increase of prices of commodities and desirable improvement in his mode of living.
FACTS:
Demand was submitted to petitioner by respondent union through its officers for various
concession, among which were (a) an increase of P0.50 in wages, (b) commutation of sick and
vacation leave if not enjoyed during the year, (c) various privileges, such as free medical care,
medicine, and hospitalization, (d) right to a closed shop, check off, etc., (e) no dismissal without
prior just cause and with a prior investigation, etc. Some of the demands, were granted by the
petitioner, and the other were rejected, and so hearings were held and evidence submitted on the
latter. After the hearing the respondent court rendered a decision, the most important provisions
of which were those fixing the minimum wage for the laborers at P3.20, declaring that additional
compensation representing efficiency bonus should not be included as part of the wage, and
making the award effective from September 4, 1950. It is against these portion of thedecision
that this appeal is taken.
On the issue of the wage, it is contended by petitioner that as the respondent court found that the
laborer and his family at least need the amount of P2.58 for food, this should be the basis for the
determination of his wage, not what he actually spends; that it is not justifiable to fix a wage
higher than that provided by Republic Act No. 602; and that respondent union made the demand
in accordance with a pernicious practice of claiming more after an original demand is granted.
The respondent court found that P2.58 is the minimum amount actually needed by the laborer
and his family
ISSUE:
What will be the basis to determine the minimum wage.
RULING:
A person's needs increase as his means increase. This is true not only as to food but as to
everything else education, clothing, entertainment, etc. The law guarantees the laborer a fair
and just wage. The minimum must be fair and just. The "minimum wage" can by no means
imply only the actual minimum. Some margin or leeway must be provided, over and above the
minimum, to take care of contingencies such as increase of prices of commodities and desirable
improvement in his mode of living.
157. De racho vs municipality of iligan
L-23442
144619
Doctrine:
While it is not disputed that the retirement plan is non-contributory on the part of the workers,
tills does not automatically remove it from the ambit of collective bargaining negotiations.
The fact that the retirement plan is non-contributory, that the employees contribute
nothing to the operation of the plan.
Facts:
UFE was certified as the sole and exclusive bargaining agent for all regular rank-and file
employees of Nestle Phils. Cagayan de oro factory as well as its Cebu/Davao Sales office. While
the parties negotiating their CBA, the employees of Cabuyao resorted to a slow down and
walk-outs prompting the petitioner to shut down the factory, subsequently, the Sec. of Labor
assumed jurisdiction and issued a return to work order, in spite of the order, the union struck
without notice. The company retaliated by dismissing the union officers and members of
negotiating panel who participated in the illegal strike. UFE declared a bargaining deadlock.
Thereafter, the union filed a notice of strike and filed a case of unfair labor practice against the
company. After conciliation efforts the NCMB yielded negative results, the dispute was certified
to the NLRC by the Sec. of Labor. The NLRC issued a resolution that the company shall
continue implementing its retirement Plan modified as follows;
1.) For 15 years of service or less- an amount equal to 100% of the employees monthly salary
for every year of service;
2.) For more that 15 but not less than 20 years in service 125% of the employees monthly
salary for every year of service
3.) For 29 years or more 150% of the employees monthly salary for every year of service.
Issues:
Whether or not the employees have not vested demandable right to a contributory
retirement plan?
Ruling:
The Supreme Court held that the employees have vested and demandable right over existing
benefits Voluntary granted to them by their employer. The employer may not unilaterally
withdraw, eliminate or diminish such benefits. The NLRC correctly observed that the inclusion
of the retirement plan in the CBA as part of the package of economic benefit extended by the
company to its employees to provide them a measure of financial security after they shall have
ceased to be employed in the company, reward their loyalty, boost their morale and efficiency
and promote industrial peace, gives consensual character to the plan so that it may not be
terminated or modified at the will by either party. The fact that the retirement plan is noncontributory, the employees contribute nothing to the operation of the plan, does not make it a
non-issue in the CBA. Salary increases, rice allowances, mid-year bonuses, 13th and 14th
month pay, seniority pay, medical and hospitalization plans, health and dental services, vacation,
sick and other Leaves with pay are non-contributory benefits. Since the retirement plan has
been an integral part of the CBA. The decision of the NLRC is not vitiated by abuse of
discretion. The benefits and concessions given to the employees were based on the NLRCs
evaluation of the unions demand, the evidence adduced by the parties, the financial capacity of
the company to grant such demands, its long-term viability, the economic conditions prevailing
in the country as they affect the purchasing power of the employees as well as it concomitant
effect on the other factors of production, the recent trends in the industry to which it belongs.
Batobalanos, Aguedo Marabe, Gregorio Laylay, Fruto Gihapon, Solomon Clarin, Pepito Batoy,
Jose Ofqueria, Daniel Cabrera, Juan Castro, Alcafone Esgana, Tomas Capalar, Antonio Gilbuena,
Ernesto Batoy, Serafio Yadawon, Juan Gihapon, Elias Escaran and Roberto Bayon-on, were
batillos engaged by Victoria Tiangco. 3 The work of these batillos were limited to days of arrival
of the fishing vessels and their working days in a month are comparatively few. Their working
hours average four (4) hours a day. On April 8, 1980, the private respondents filed a complaint
against the petitioners with the Ministry of Labor and Employment for non-payment of their
legal holiday pay and service incentive leave pay, as well as underpayment of their emergency
cost of living allowances which used to be paid in full irrespective of their working days, but
which were reduced effective February, 1980, in contravention of Article 100 of the new Labor
Code which prohibits the elimination or diminution of existing benefits. The petitioners denied
the laborers' contention, claiming that the laborers were all given, in addition to their regular
daily wage, a daily extra pay in amounts ranging from 30 centavos to 10 pesos which are
sufficient to offset the laborers' claim for service incentive leave and legal holiday pay. As
regards the claim for emergency allowance differentials, the petitioners admitted that they
discontinued their practice of paying their employees a fixed monthly allowance, and effective
February, 1980, they no longer paid allowances for non-working days. They argued, however,
that no law was violated as their refusal to pay allowances for non-working days is in
consonance with the principle of "no work, no allowance"; and that they could not pay private
respondents a fixed monthly allowance without risking the viability of their business. Resolving
the case, the Director of the National Capitol Region of the Ministry of Labor and Employment
ruled that the daily extra pay given to private respondents was a ,'production incentive benefit",
separate and distinct from the service incentive leave pay and legal holiday pay, payment of
which cannot be used to offset a benefit provided by law, and ordered the petitioners to pay the
private respondents their service incentive leave pay and legal holiday pay. However, he denied
the laborers' claim for differentials in the emergency cost of living allowance for the reason that
the emergency cost of living allowance accrues only when the laborers actually work following
the principle of "no work, no pay," and private respondents are not entitled to a fixed monthly
allowance since they work on a part time basis which average only four (4) days a week. The
private respondents should not be paid their allowances during non-working days. From this
order, both parties appealed. On May 22, 1981, the respondent Deputy Minister of Labor and
Employment modified the order and directed the petitioners to restore and pay the individual
respondents their fixed monthly 19 allowance from March, 1980 and to pay them the amount of
P58,860.00, as underpayment of their living allowance from May, 1977 to February 21, 1980.
Issues:
Whether or not the Deputy Minister of Labor and Employment acted in excess of his
jurisdiction?
Ruling:
We find no merit in the contention. However, a revision of the amount due the private
respondents is in order for the reason that the respondent Deputy Minister of Labor and
Employment failed to take into consideration, in computing the amount due each worker, the fact
that the private respondents are employed by two different individuals whose businesses are
divergent and capitalized at various amounts, contrary to the provisions of P.D. 525 and
subsequent amendatory decrees, wherein the amount of the emergency cost of living allowance
to be paid to a worker is made to depend upon the capitalization of the business of his employer
or its total assets, whichever is higher. Hence, for the period from November, 1976 to April 30,
1977, the petitioner Victoria Tiangco should pay her workers a fixed monthly allowance of P
30.00, while the workers of the petitioner Reynaldo Tiangco were entitled to a fixed monthly
allowance of P50.00, each. The record shows that during this period, the petitioner Victoria
Tiangco was paying her workers a monthly allowance of P30.00 each. Accordingly, there was no
underpayment for this period insofar as her batillos are concerned. The petitioner Reynaldo
Tiangco, however, paid his employees P30.00, instead of P50.00, as mandated by law. Therefore,
there was an underpayment of P20.00 a month for each batillo under his employ. For the 6month period, he should pay his workers differentials in the amount of P120.00 each. For the
period from May, 1977 to March 1979, the workers of the petitioner Victoria Tiangco were
entitled to a fixed monthly allowance of P90.00 in view of the promulgation of P.D. 1123 which
granted an across-the-board increase of P60.00 a month in their allowances. For this period,
however, the said petitioner paid her workers only P60.00 a month, or a difference of P30.00 a
month. There was, therefore, an underpayment of P690.00 for every batillo under her employ for
the 23-month period. With the addition of P60.00 across-the-board increase in their allowances,
the workers of the petitioner Reynaldo Tiangco were entitled to receive a fixed monthly
allowance of P110.00. However, the record shows that his workers were only paid P60.00 a
month, or a difference of P50.00 a month. Consequently, each batillo hired by him should be
paid a differential of P1,150.00 for the 23-month period. For the period from April, 1979 to
August, 1979, the employees of the petitioner Victoria Tiangco were entitled to a fixed monthly
allowance of P150.00 while the workers employed by the petitioner Reynaldo Tiangco were
entitled to an allowance of P170.00, pursuant to P.D. 1614. The record shows, however, that both
petitioners paid their workers only P120.00 a month. There was a difference of P30.00 a month
in the case of the petitioner Victoria Tiangco, and P50.00, a month, in the case of the petitioner
Reynaldo Tiangco. Hence, for this period, the petitioner Victoria Tiangco should pay the amount
of P150.00 to each batillo in her employ, while the petitioner Reynaldo Tiangco should pay the
amount of P250.00, as differentials in the cost of living allowances of the workers under his
employ. With this modification, the judgment appealed from is AFFIRMED in all other respects.
With costs against the petitioners.
the company. The order of CIR to the company to continue granting this privilege, was upheld by
this Court.
The shipping company argue that the furnishing of meals to the crew before the effectivity of
Rep. Act No. 602, is of no moment, because such circumstance was already taken into
consideration by Congress, when it stated that wage includes the fair and reasonable value of
boards customarily furnished by the employer to the employees.
Issues:
Whether or Not wage includes the fair and reasonable value of boards customarily
furnished by the employer to the employees.
Ruling:
No, if We are to follow the theory of the herein petitioners, then a crew member, who used to
receive a monthly wage of P100.00, before August 4, 1951, with no deduction for meals, after
said date, would receive only P86.00 monthly (after deducting the cost of his meals at P.40 per
meal), which would be very much less than the P122.00 monthly minimum wage, fixed in
accordance with the Minimum Wage Law. Instead of benefiting him, the law will adversely
affect said crew member. Such interpretation does not conform with the avowed intention of
Congress in enacting the said law.
166647
101761
166. Case Title No.: American Wire and Cable Daily Rated Employees
Union vs. American Wire and Cable Co., and the Court of Appeals
(GR No. 155059, April 29, 2005)
FACTS:
American Wire and Cable Co., Inc., is a corporation engaged in the
manufacture of wires and cables. There are two unions in this company, the
American Wire and Cable Monthly-Rated Employees Union and the American
Wire and Cable Daily-Rated Employees. An original action was filed before
the NCMB of the Department of Labor and Employment (DOLE) by the two
unions for voluntary arbitration. The petitioner submits that the withdrawal
of the private respondent of the 35%premium pay for selected days during
the Holy Week and Christmas season, the holding of the Christmas Party and
its incidental benefits, and the giving of service awards, which they have
long enjoyed, violated Article 100 of the Labor Code. A decision was rendered
by the Voluntary Arbitrator in favor of the private respondent. On appeal, CA
affirmed and upheld the Arbitrators decision.
ISSUE: Whether or not private respondent is guilty of violating Article 100 of
the Labor Code, as amended, when the benefits/entitlements given to the
members of petitioner union were withdrawn.
HELD: The Court ruled that respondent is not guilty of violating Art. 100 of
the Labor Code.
ART. 100. PROHIBITION AGAINST ELIMINATION OR DIMINUTION OF BENEFITS.
Nothing in this Book shall be construed to eliminate or in any way diminish
supplements, or other employee benefits being enjoyed at the time of
promulgation of this Code.
The benefits and entitlements mentioned in the instant case are all
considered bonuses which were given by the private respondent out of its
generosity and munificence. A bonus is an amount granted and paid to an
employee for his industry and loyalty which contributed to the success of the
employers business and made possible the realization of profits. The
granting of a bonus is a management prerogative, something given in
addition to what is ordinarily received by or strictly due the recipient. Thus, a
bonus is not a demandable and enforceable obligation, except when it is
made part of the wage, salary or compensation of the employee.
168. Case Title/No.: Traders Royal Bank Vs. NLRC (GR No. 88168,
August 30,1990)
Facts:
`Respondent Traders Royal Bank Employees Union filed a complaint to the
NLRC on the account of diminution of their benefits by the petitioner.
Said diminution was effected through ;mid-year bonus, from two (2) months
gross pay to two (2) months basic and year-end bonus from three (3) months
gross to only two (2) months. NLRC rendered a decision in favor of
the Employees union and ordered Traders Royal Bank to pay to employees
the mid-year bonus differential representing the difference between wo (2)
months gross pay and two (2) months basic pay and end-year bonus
differential of one(1) month gross pay for 1986.The motion for
reconsideration of Traders Royal Bank was then denied. Thus the petition for
certiorari.
Issue:
Whether or not the reduction in bonuses is tantamount to diminution of
benefits?
Held:
The petition for Certiorari was granted. A bonus is a gratuity or act of
liberality of the giver which the recipient has no right to demand as a matter
of right. The discretion of giving bonuses rests upon the management and
the income of the operations of the past year. It has been claimed that the
income of the petitioner has indeed decreased yet the bank still gave out the
usual bonuses. Any claim that the receipt of the employees of bonuses has
been a company tradition and cannot be adjusted to its fiscal position is
without merit. The company cannot be forced to give bonuses which it can
no longer afford and in effect, be penalized for its past generosity. Bonuses
are not part of labor standards like salaries, cost of living allowances, and
leave benefits, which are provided by the Labor Code.
13th month pay would amount to a penalty for his munificence or liberality.
The probable reaction of one so circumstance would be to withdraw the
bonuses or resist further voluntary grants for fear that if and when a law is
passed giving the same benefits, his prior concessions might not be given
due credit; and this negative attitude would have an adverse impact on the
employees.
At any rate, in view of the rulings made herein, NFSW cannot insist on its
claim that its members are entitled to a 13th month pay in addition to the
bonuses already paid by CAC.
WHEREFORE, the petition is dismissed for lack of merit. No costs. SO
ORDERED.
In May 1972, Universal Corn Products, petitioner, and the Universal Corn
Products Workers Union entered into a collective bargaining agreement
wherein the petitioner agrees to grant all regular workers within the
bargaining unit with at least one (1) year of continuous service, a Christmas
bonus equivalent to the regular wages for seven (7) working days. The
agreement had a duration of three years, effective June 1, 1971, or until June
1, 1974.
The collective bargaining agreement in question expired without being
renewed. On June 1, 1979, they entered into a collective bargaining
agreement for the years from 1979 to 1981. The new collective bargaining
agreement did not refer to the "Christmas bonus" but dealt only with salary
adjustments. According to the petitioner, the new agreements deliberately
excluded the grant of Christmas bonus with the enactment of Presidential
Decree No. 8514 on December 16, 1975. It further claims that since 1975, it
had been paying its employees 13th-month pay pursuant to the Decree.
For failure of the petitioner to pay the seven-day Christmas bonus for 1975 to
1978 inclusive, in accordance with the 1972 CBA, the union went to the labor
arbiter who ruled that the payment of the 13th month pay precluded the
payment of further Christmas bonus. The union appealed to the National
Labor Relations Commission (NLRC) which set aside the decision of the labor
arbiter on the opinion that the crediting of said benefit to the 13th month
pay cannot be sanctioned on the ground that it is contrary to Section 10 of
the Rules and Regulations Implementing Presidential Decree No. 851, which
prohibits the reduction or elimination of benefits or favorable practice being
enjoyed by the employees. Moreover, that same parties entered into another
3-year CBA, which no longer provides for a 7-day wage Christmas bonus. In
effect, therefore, the parties agreed to discontinue the privilege, which
agreement should also be respected.
Issue:
Whether the seven-day Christmas bonus constitute 13th month pay.
Ruling:
We hold that in the case at bar, Ovejera (La Carlota) case does not apply. We
apply instead, United CMC Textile Workers Union v. Valenzuela, a recent
decision. In that case this Court, speaking through Mr. Justice Edgardo Paras,
held: x x x If the Christmas bonus was included in the 13th month pay, then
Still dissatisfied, the parties sought reconsideration which was denied by the
NLRC.
Issue:
1.
Whether payment of the thirteenth month pay under P.D. 851 and
Memorandum Order No. 28 covers only rank and file employees.
2.
Whether the payment of a year-end bonus is already equivalent to a
thirteenth month pay.
Decision:
The absence of an express provision in the CBA between PAL and ALPAP
obligating the former to pay the members of the latter a thirteenth month
pay is immaterial. It cannot be disputed that the tenor of P.D. 851 as
amended by Memorandum Order No. 28 is mandatory in so providing that
all employers are hereby required to pay all their rank and file employees a
thirteenth month pay not later than December 24 of every year. Noncompliance with this mandate cannot be excused by the simple expedient of
pointing to the absence of a similar provision in the CBA for this would
contravene the basic rule that an existing law enters into and forms part of a
valid contract without the need for the parties to expressly make reference
to it. Notwithstanding therefore the absence of any contractual agreement,
the payment of a thirteenth month pay being a statutory grant, compliance
with the same is mandatory and is deemed incorporated in the CBA.
Although P.D. 851 as amended by Memorandum Order No. 28 requires all
employers to pay all their rank and file employees a thirteenth month pay,
the rule is subject to certain exceptions. Excluded from the coverage are
employers already paying their employees a thirteenth month pay or more
in a calendar year or its equivalent at the time of the issuance of the law.
Construing the term its equivalent, the same was defined as inclusive of
Christmas bonus, midyear bonus, profit-sharing payments and other cash
bonuses amounting to not less than 1/12th of the basic salary but shall not
include cash and stock dividend, cost of living allowances and all other
allowances regularly enjoyed by the employee, as well as nonmonetary
benefits. When an employer pays less than 1/12th of the employees basic
salary, the employer shall pay the difference.
Bonus is an amount granted and paid to an employee for his industry and
loyalty which contributed to the success of the employers business and
made possible the realization of profits.The term bonus was in turn
interpreted to mean: [A] bonus is an amount granted and paid to an
employee for his industry and loyalty which contributed to the success of the
employers business and made possible the realization of profits. It is an act
of generosity of the employer . . . It is also granted by an enlightened
employer to spur the employee to greater efforts for the success of the
business and realization of bigger profits.
Applying the aforecited definitions, it would seem that the year-end bonus
being granted by PAL to the employees may be considered as an equivalent
of the thirteenth month pay considering the similarity in the purpose for
granting the same. As advanced by ALPAP, the rationale for PALs grant of a
year-end bonus was to give regard for the loyalty, dedication and hard work
of the employee. Confirming this purpose is the declaration made by then
PAL President, Feliciano Belmonte, Jr. in his letter addressed to the
employees of the PAL dated October 30, 1991, announcing the granting of a
Christmas bonus equivalent to 125% of the employees monthly pay for a
job well done to wit: x x x x x x x x x In simple terms, we made a profit
from our efforts to increase revenues and cut costs. I believe it is only proper
that appreciation for a job well done should be expressed in a tangible
manner. I am therefore pleased to announce that for this year, management
has decided to award a Christmas bonus equivalent to 125% of your monthly
basic pay. x x x x x x. From the foregoing, it appears that the rationale for
the grant of the year-end bonus by PAL coincides with the nature of the
bonus which can be equated with the payment of a thirteenth month pay.
WHEREFORE, finding no merit in the petitions, the same are hereby DENIED
and the Resolutions of public respondent NLRC promulgated on November
23, 1993 and February 28, 1994 are hereby AFFIRMED.
72616-17
and/or Dr. Bernardo Jimenez. Complainants alleged that they were hired by
herein petitioner Bernardo Jimenez as driver, mechanic and helper,
respectively, in his trucking firm, JJ Trucking. They were assigned to a tenwheeler truck to haul soft drinks of Coca-Cola Bottling Company and paid on
commission basis, initially fixed at 17% but later increased to 20% in 1988.
They further alleged that for the years 1988 and 1989 they received only a
partial commission of P84,000.00 from petitioners total gross income of
almost P1,000,000.00 for the said two years. Hence, the Jimenez still owes
them 106,211.86. On March 1990 services of the complainant were illegally
terminated.
Petitioners, on the other hand, contend that respondent Fredelito Juanatas
was not an employee of the firm but was merely a helper of his father Pedro;
that all commissions for 1988 and 1989, as well as those up to March, 1990,
were duly paid; and that the truck driven by respondent Pedro Juanatas was
sold to one Winston Flores in 1991 and, therefore, private respondents were
not illegally dismissed.
The Labor Arbiter rendered a decision in favor of respondent Pedro Juanatas
ordering Jimenez to pay the former a separation pay of P15,050.00, but
dismissing the claim as regard to Fredelito Juanatas. On appeal filed by
private respondents, the NLRC modified the decision of the labor arbiter
declaring Pedro and Fredelito Juanatas as employees and ordering petitioners
to pay the unpaid commission amounting to P84,387.05. Petitioners motion
for reconsideration was denied, hence this petition.
ISSUE:
Whether or not the NLRC committed a grave abuse of discretion in ruling that
private respondents were not paid their commissions in full.
HELD:
No. There is no reason to disturb the findings of respondent NLRC that the
entire amount of commissions was not paid, this by reason of the evident
failure of herein petitioners to present evidence that full payment thereof has
been made. It is a basic rule in evidence that each party must prove his
affirmative allegations. Since the burden of evidence lies with the party who
asserts an affirmative allegation, the plaintiff or complainant has to prove his
affirmative allegation, in the complaint and the defendant or respondent has
182. Neri vs. NLRC, Far East Bank and Trust Co.
[G.R. Nos. 97008-09. July 23, 1993]
DOCTRINE:
There is "labor-only" contracting where: (a) the person supplying workers to
an employer does not have substantial capital or investment in the form of
tools, equipment, machineries, work premises, among others; and, (b) the
workers recruited and placed by such person are performing activities which
are directly related to the principal business of the employer.
FACTS:
Far Bast Bank and Trust Company (FBTC) was sued by two employees of
Building Care Corporation (BCC) to compel the former to recognize them as
its regular employees and be paid the same wages which its employees
receive. In the proceeding, it was established that BCC had substantial
capitalization of P1 Million or a stockholders equity of P1.5 Million. Thus the
Labor Arbiter ruled that BCC was only job contracting and that consequently
its employees were not employees of FEBTC. On appeal, such factual finding
was affirmed by the NLRC. Nevertheless, petitioners insist that BCC is
engaged in "labor-only" contracting because it failed to adduce evidence
purporting to show that it invested in the form of tools, equipment,
machineries, work premises and other materials which are necessary in the
conduct of its business. Moreover, petitioners argue that they perform duties
which are directly related to the principal business or operation of FEBTC.
Consequently, they must be deemed employees of respondent bank by
operation of law since BCC is merely an agent of FEBTC.
ISSUE:
Whether or not BCC is engaged in labor-only contracting, making FBTC the
employer of the petitioners.
HELD:
No. BCC cannot be considered a "labor-only" contractor because it has
substantial capital. While there may be no evidence that it has investment in
the form of tools, equipment, machineries, work premises, among others, it
is enough that it has substantial capital, as was established before the Labor
Arbiter as well as the NLRC. In other words, the law does not require both
substantial capital and investment in the form of tools, equipment,
machineries, etc. This is clear from the use of the conjunction "or". If the
intention was to require the contractor to prove that he has both capital and
the requisite investment, then the conjunction "and" should have been used.
But, having established that it has substantial capital, it was no longer
necessary for BCC to further adduce evidence to prove that it does not fall
within the purview of "labor-only" contracting. There is even no need for it to
refute petitioners' contention that the activities they perform are directly
related to the principal business of respondent bank.
183. Manila Water Co. vs. Pena, et al.
[G.R. No. 158255. July 8, 2004]
DOCTRINE:
Job contracting is permissible only if the following conditions are met: 1) the
contractor carries on an independent business and undertakes the contract
work on his own account under his own responsibility according to his own
manner and method, free from the control and direction of his employer or
principal in all matters connected with the performance of the work except
as to the results thereof; and 2) the contractor has substantial capital or
investment in the form of tools, equipment, machineries, work premises, and
other materials which are necessary in the conduct of the business.
FACTS:
Under a Concession Agreement with Manila Water Sewerage System (MWSS),
Manila Water Co. undertook to absorb former employees of the MWSS whose
names and positions were in the list furnished by the latter, while the
employment of those not in the list was terminated on the day petitioner
took over the operation. Private respondents, being contractual collectors of
the MWSS, were among the 121 employees not included in the list;
nevertheless, petitioner engaged their services without written contract from
August 1, 1997 to August 31, 1997. Thereafter, on September 1, 1997, they
signed a three-month contract to perform collection services for eight
branches of petitioner in the East Zone. Before the end of the three-month
contract, the 121 collectors incorporated the Association Collectors Group,
Inc. (ACGI), which was contracted by petitioner to collect charges for the
Balara Branch. Subsequently, most of the 121 collectors were asked by the
petitioner to transfer to the First Classic Courier Services, a newly registered
corporation. Only private respondents herein remained with ACGI. Petitioner
continued to transact with ACGI to do its collection needs until February 8,
1999, when petitioner terminated its contract with ACGI.
Private respondents filed a complaint for illegal dismissal and money claims
against petitioner, contending that they were petitioners employees as all
the methods and procedures of their collections were controlled by the latter.
184. San Miguel Corp. Vs. Aballa, et al., G.R. No. 149011, June 28,
2005
Facts:
San Miguel Corp. Entered into a Contract of Services with Sunflower
Multi-Purpose Cooperative, to be effective for one year, starting January 1,
1993, subject to renewal. The services, to be redered to SMCs Shrimp
Processing Plant at Bacolod, would consist of (1) messengerial-janitorial
work, (2) shrimp harvesting and receiving, and (3) sanitation, washing, and
cold storage. The contract stipulated that: (1) the cooperative shall employ
the necessary personnel and provide adequate equipment, materials, and
tools, over which the coop shall have the entire control and supervision; (2)
no employer-employee relationship shall exist between SMC, and the coop
and any of its members; the cooperative is an association of self-employed
members, an independent contractor; subject to the control and the direction
of San Miguel Corp. only as to the result of the work or service; (3) the coop
shall have the exclusive direction in the selection, engagement and
discharge of its member-workers; and (4) the coop undertakes to pay the
wages, premium pay and benefits of its member-workers as well as the
taxes.
In July 1995, 97 worker-members filed their complaint before the NLRC
demanding their regularization as SMC employees with appertaining benefits
and privileges. On September 15, 1995, SMC closed its Bacolod Shrimp
Processing Plant and reported the closure to the DOLE. The workers charged
SMC with illegal dismissal.
Ruling:
The Contract of Service between SMC and Sunflower shows that the
parties clearly disavowed the existence of employer-employee relationship
between SMC and the workers. The language of the contract is not. However,
determinative of the parties relationship, rather it is the totality of the facts
and surrounding circumstances of the case.
While indeed Sunflower was issued Certificate of Registration No. ILO875 on February 10, 1992 by the Cooperative Development Authority, this
merely shows that it had at least P2,000.00 in paid-up share capital, which
amount cannot be considered substantial capitalization.
What appears is that Sunflower does not have substantial
capitalization or investment in the form of tools, equipment, machineries,
work premises and other materials to qualify it as an independent contractor.
On the other hand, it is gathered that the lot, building, machineries and
all other working tools utilized by private respondents (the complaint
workers) in carrying out their tasks were owned and provided by SMC.
The alleged office of Sunflower is found within the confines of a small
carinderia or refreshment (sic) owned by the mother of the Cooperative
Chairman Roy Asong.
xxxIn said . . . . . office, the only equipment used and owned by Sunflower
was a typewriter.
Facts:
Philippine Bank of Communications and the Corporate Executive
Search, Inc. (CESI) entered into and agreement under which CESI would
provide Temporary Services to PBCom consisting of eleven (11)
messengers, one of whom was Orpiada who had been assigned to the bank
since June 1975.
He rendered messengerial services to the bank, within its premises,
together with others doing similar job. In or about October 1976, the bank
requested CESI to withdraw Orpiadas assignment because Orpiadas
services were no longer needed. Orpiada filed a complaint against the
bank for illegal dismissal and failure to pay the 13th-month pay.
tenure on their jobs. Article 106 of the Labor Code is precisely designed to
prevent such a result.
We hold that, in the circumstances of this case, CESI was engaged in
labor-only contracting vis-a-vis the petitioner bank and in respect of
Ricardo Orpiada, and that consequently, the petitioner bank is liable to
Orpiada as if Orpiada had been directly employed not only by CESI but also
by the bank. It may well be that the bank may in turn proceed against CESI
to obtain reimbursement of, or some contribution to, the amounts which the
bank will have to pay to Orpiada; but this is not necessary to determine here.
186. Tabas, et al. vs. California Manufacturing Company, Inc., et. al.,
G.R. No. 80680, January 26, 1989Facts:
The petitioner employees were employees of Livi Manpower Services,
Inc. (Livi), which assigned them to work as promotional merchandisers of
California Manufacturing under a manpower supply agreement. The
agreement provided that California has no control or supervision whatsoever
over Livis workers with respect ti how they accomplish their work, that Livi is
an independent contractor and that it is hereby agreed that it is the sole
responsibility o Livi to comply with all existing as well as future laws, rules
and regulations pertinent to employment of labor.
It was further expressly stipulated that the assignment of workers to
California shall be on a seasonal and contractual basis.
The petitioner employees were made to sign employment contracts
with duration of six months, upon the expiration of which they signed new
agreements with the same period, and so on. Unlike regular California
employees, who received not less than P2,823.00 a month in addition to a
host of fringe benefits and binuses, they received P38.56 plus P15.00 in
allowance daily.
The petitioners now allege that they had become regular California
employees and demand, as a consequence whereof, similar benefits. They
likewise claim that they were notified by California that they would not be
rehired, hence, they filed an amended complaint charging California with
illegal dismissal.
Issue:
The labor arbiters decision, affirmed by NLRC on appeal that no
employer-employee relation exists between the petitioners and California.
Ruling:
We reverse.
The existence of an employer-employee relation is a question of law
and being such, it cannot be made subject of agreement. Hence, the fact
that the manpower supply agreement between Livi and California had
specifically designated the former as the petitioners employer and had
absolved the latter from any liability as an employer, will not erase either
partys obligations as an employer, if an employer-employee relation
otherwise exist between the workers and either firm. At any rate, since the
agreement between Livi and California, they alone are bound by it, and the
petitioners cannot be made to suffer from its adverse consequences.
This Court has consistently ruled that the determination of whether or
not there is an employer-employee relation depends upon four (4) standards:
(10) the manner of selection and engagement of the putative employee; (2)
the mode of payment of wages; 3) the presence or absence of a power of
dismissal; and (4) the presence or absence of a power to control the putative
employees conduct. Of the four, the right-of-control test has been held to be
the decisive factor.
Issue:
whether or not D.L. Admark is a labor-only contractor or an independent contractor?
Decision:
Affirmed assailed decision of NLRC in toto.
For union dues, in cases where the right of the worker or his union to checkoff
has been recognized by the employer or authorized in writing by the
individual worker concerned; and
In cases where the employer is authorized by law or regulations issued by
the Secretary of Labor.
102636
violated the wage order as it did not implement an across the board increase
in the salary of its employees
At the hearing at the DOLE Regional Office for the alleged violation,
petitioner maintained that it complied with Wage Order No. RO2-02 as it paid
the mandated increase in the minimum wage.
public respondent Regional Director Ricardo S. Martinez, Sr. ruled that
petitioner violated Wage Order RO2-02 by failing to implement an across the
board increase in the salary of its employees. He ordered petitioner to pay
the deficiency in the salary of its employees in the total amount of
P555,133.41
petitioner appealed to public respondent Labor Secretary Leonardo A.
Quisumbing On the same date Regional Wage Board issued Wage Order No.
RO2-02-Aamending the earlier wage order
Secretary of Labor dismissed petitioner's appeal and affirmed the Order of
Regional Director Martinez, Sr. Petitioner's motion for reconsideration was
likewise denied
private respondent CARSUMCO EMPLOYEES UNION moved for execution of
the December 16, 1994 Order. Regional Director Martinez, Sr. granted the
motion and issued the writ of execution
petitioner moved for reconsideration to set aside the writ of execution. On
March 5, the DOLE regional sheriff served on petitioner a notice of
garnishment of its account with the Far East Bank and Trust Company. On
March 10, the sheriff seized petitioner's dump truck and scheduled its public
sale on March 20, 1997
Hence, this petition, with a prayer for the issuance of a temporary restraining
order (TRO)
Court issued a TRO enjoining respondents from enforcing the writ of
execution. upon petitioner's motion, Court amended the TRO by also
enjoining respondents from enforcing the Decision of the Secretary of Labor
and conducting further proceedings until further orders from this Court.
ISSUE:
WON THE WAGE ORDER RO2-02 IS NULL AND VOID FOR HAVING BEEN
ISSUED IN VIOLATION OF THE PROCEDURE PROVIDED BY LAW AND IN
VIOLATION OF PETITIONER'S RIGHT TO DUE PROCESS OF LAW. And THE
The court held that RO2-02-A is invalid for lack of public consultations and
hearings and non-publication in a newspaper of general circulation, in
violation of Article 123 of the Labor Code. We likewise find that public
respondent Secretary of Labor committed grave abuse of discretion in
upholding the findings of Regional Director Ricardo S. Martinez, Sr. that
petitioner violated Wage Order RO2-02
On October 23, 1990, the Board issued Wage Order No. NCR-01-A amending
Wage Order No. NCR-01, as follows:
Section 1. Upon the effectivity of this Wage Order, all workers and employees
in the private sector in the National Capital Region already receiving wages
above the statutory minimum wage rates up to one hundred and twenty-five
pesos (P125.00) per day shall also receive an increase of seventeen pesos
(P17.00) per day.
ECOP appealed to the National Wages and Productivity Commission. On
November 6, 1990, the Commission promulgated an Order, dismissing the
appeal for lack of merit. On November 14, 1990, the Commission denied
reconsideration.
Issue:
The Employers Confederation of the Philippines (ECOP) is questioning the
validity of Wage Order No. NCR-01-A dated October 23, 1990 of the Regional
Tripartite Wages and Productivity Board, National Capital Region,
promulgated pursuant to the authority of Republic Act No. 6727.
Held:
The Commission noted that the increasing trend is toward the salary-cap
method, which has reduced disputes arising from wage distortions (brought
about, apparently, by the floor-wage method). Precisely, Republic Act No.
6727 was intended to rationalize wages, first, by providing for full-time
boards to police wages round-the-clock, and second, by giving the boards
enough powers to achieve this objective. The Court is of the opinion that
Congress meant the boards to be creative in resolving the annual question of
wages without labor and management knocking on the legislature's door at
every turn.
WHEREFORE, premises considered, the petition is DENIED. No
pronouncement as to costs.
Petitioner is a private educational institution duly organized and existing under Philippine laws,
and operating in Meycauayan, Bulacan. On January 16, 1987, its board of trustees recognized
the Meycauayan College Faculty and Personnel Association as the employees union in the
Meycauayan College.
Prior to said recognition or on July 17, 1983, petitioner and the union, then headed by Mrs.
Teresita V. Lim, entered into a collective bargaining agreement for 1983-1986. Article IV thereof
provides:
SALARY SCALE
IV. 4.0 ANG ANTAS NG PAGPAPASUWELDO SA MGA GURO SA MATAAS NG
PAARALAN AY UMAALINSUNOD SA PARAAN NG PAGRARANGGONG
KALAKIP NITO BILANG "TAKDA" AT AYON PA RIN SA SUMUSUNOD NA
HALAGA NG PAGPAPASUWELDO (IPATUTUPAD SA AO-ESCOLAR 19831986):
PAGSUBOK A (1-3 TAON) P51.50
KLASE 1 (4-5 TAON) P52.00
(6-8 TAON) P53.00
KLASE II (9-12 TAON) P54.00
KLASE III (13-14 TAON) P57.00
KLASE IV (15-17 TAON) P60.00
KLASE V (18-21 TAON) P63.00
(22 PATAAS) P70.00
When the collective bargaining agreement was entered into, the following presidential decrees
were in effect:
(a) P.D No. 1389 dated May 29, 1978 adjusting the existing statutory minimum wages;
(b) P.D. No. 1713 dated August 18, 1980 providing for an increase in the minimum daily wage
rates and for additional mandatory living allowances, and ;
(c) P.D. No. 1751 dated May 14, 1980 increasing the statutory daily minimum wage at all levels
by P4.00 after integrating the mandatory emergency living allowance under P.D. Nos. 525 and
1123 into the basic pay of all covered workers. Wage Order No. 2 increasing the mandatory
basic minimum wage and living allowance was also issued on July 6, 1983 just before the
collective bargaining agreement herein involved was entered into.
During the lifetime of the collective bargaining agreement, the following were issued:
(a) Wage Order No. 3 dated November 7, 1983 increasing the minimum daily living allowance in
the private sector;
(b) Wage Order No. 4 dated May 1, 1984 integrating as of said date the emergency cost of living
allowances under P.D. Nos. 1614, 1634 and 1713 into the basic pay of covered workers in the
private sector;
(c) Wage Order No. 5 dated June 11, 1984 increasing the cost of living allowance of workers in
the private sector whose basic salary or wage is not more than P1,800 a month; and
(d) Wage Order No. 6 dated October 26, 1984 increasing the daily living allowances.
The union admits herein that its members were paid all these increases in pay mandated by
law. It appears, however, that in 1987, shortly after union president Mrs. Teresita V. Lim, who
held the managerial position of registrar of the college, had turned over the presidency of the
union to Mrs. Fe Villarico, the latter unintentionally got a copy of the collective bargaining
agreement and discovered that Article IV thereof had not been implemented by the petitioner.
Consequently, on March 27, 1987, the union filed with the Department of Labor and
Employment, Regional Office No. III in San Fernando, Pampanga, a notice of strike on the
ground of unfair labor practice alleging therein violation of the collective bargaining agreement
particularly the provisions of Article IV thereof on salary scale.
ISSUE:
1. Whether increases in employees' salaries resulting from the implementation of presidential
decrees and wage orders, which are over and above the agreed salary scale contracted for
between the employer and the employees in a collective bargaining agreement, preclude the
employees from claiming the difference between their old salaries and those provided for under
said salary scale.
RULING:
"Non-compliance with the mandate of a standards law or decree may give rise to an ordinary
action for recovery while violation of a collective bargaining agreement may even give rise to a
criminal action for unfair labor practice. And while the relief sought for violation of a standards
law or decree is primarily for restitution of (an) unpaid benefits, the relief sought for violating a
CBA is ordinarily for compliance and desistance. Moreover, there is no provision in the
aforecited Presidential Decrees providing that compliance thereto is sufficient compliance with a
provision of a collective bargaining agreement and vice-versa." The dispositive portion of the
Secretary's order of September 9, 1987 states:
WHEREFORE, the Management of Meycauayan College is hereby ordered to:
1) Strictly effect the payment of salaries of the union members in accordance
with the provisions of the collective bargaining agreement;
2) Pay the covered union members salary differential computed by subtracting
the salary actually paid and received by them per period provided in the
collective bargaining agreement for school years 1983-1984; 1984-1985 and
1985-1986 including the differential for the 13th month pay for the same period. 5
The petition has no merit.
As correctly ruled by public respondent, a collective bargaining agreement is a contractual
obligation. It is distinct from an obligation imposed by law. The terms and conditions of a
collective bargaining contract constitute the law between the parties. Beneficiaries thereof are
therefore, by right, entitled to the fulfillment of the obligation prescribed therein. Consequently,
to deny binding force to the collective bargaining agreement would place a premium on a refusal
by a party thereto to comply with the terms of the agreement. Such refusal would constitute an
unfair labor practice.
Nevertheless, as the key to the interpretation of contracts, including collective bargaining
agreements, is the intention of the parties, we examined the record and found the undisputed
allegation of private respondent that the collective bargaining agreement herein involved was
entered into by the parties to improve the plight of the teachers by increasing their salary. The
parties increased the teachers' salary or rate per period, by drafting a salary scale "based on the
length of service" of the teachers and eventually came up with Article IV aforequoted. From this
unrebutted allegation, it is clear that the parties wanted to attain one goal increase the
salaries of the teachers on the basis of their length of service. Hence, it is immaterial that the
means by which said goal is achieved is through the alteration of the salary scale.
On the issue of prescription, Article 291 (now Art. 290) of the Labor Code herein invoked by
petitioner, provides:
Offenses. Offenses penalized under this Code and the rules and regulations
issued pursuant thereto shall prescribe in three (3) years.
All unfair labor practices arising from Book V shall be filed with the appropriate
agency within one (1) year from accrual of such unfair labor practice; otherwise,
they shall be forever barred.
The one-year prescriptive period is inapplicable in this case because of peculiar factual
circumstances which petitioner has not denied. Although the collective bargaining agreement
covers school years 1983 to 1986, a copy of the agreement was only made available to the
union in 1987. Immediately thereafter, the union sought its implementation. The union members
might have been aware of the existence of the collective bargaining agreement but that fact that
their president was actually a management employee being petitioner's registrar, they must
have been deterred from demanding its implementation earlier. Hence, to apply the provisions
of Article 290 (Art. 291) would be unfair and prejudicial to the union members particularly those
who have served petitioner for a number of years who stand to benefit most from the salary
scale.
Article 264(g), now Article 263(g) of the Labor Code is broad enough to give the Secretary of
Labor the power to take jurisdiction over what appears at first blush to be an ordinary money
claim. Claims for pay differentials may have that character but, as earlier stated, if they arise out
of a violation of a collective bargaining agreement, they assume the character of an unfair labor
practice and are, therefore, well within the ambit of the jurisdiction of the Secretary of Labor to
decide.the decision of the Secretary of Labor is hereby AFFIRMED and the temporary
restraining order of February 15,1989 is LIFTED.
This decision is immediately executory. Costs against the petitioner.
199. St. Joseph College vs. St. Joseph College Workers Association
The financial dilemma of petitioner may deserve sympathy and support, but its remedy lies not in
the judiciary but in the lawmaking body.
The law plainly states that 70 percent of the tuition fee increase shall be allotted for the teaching
and the nonteaching personnel; and that the payment of other costs of operation, together with
the improvement of the schools infrastructure, shall be taken only from the remaining 30
percent. The law does not speak, directly or indirectly, of the contention of petitioner that in the
event that its total tuition income is lesser than that in the previous year, then the whole amount
of the increase in tuition fee, and not merely up to 30 percent as provided by law, may be used
for the improvement and modernization of infrastructure and for the payment of other costs of
operation.
DOCTRINE
Under RA No. 6727, otherwise known as the Wage Rationalization Act and its
implementing rules, the Department of Labor and Employment shall conduct inspection as often
as possible or necessary, within its manpower constraint, of the payroll and other financial
records kept by the company or business, to determine whether the workers are paid the
prescribed minimum wage rates and other benefits granted by law or any wage order.
FACTS
An inspection conducted by the Department in response to the complaints filed by two
employees, revealed that COCOFED was guilty of underpayment of wages, emergency cost of
living allowance (ECOLA) and 130-month pay. A notice of inspection results was issued
requiring COCOFED to effect restitution or correction within five (5) days from notice.
Thereafter, summary investigations were conducted. COCOFED alleged that complainants
worked for less than eight hours minimum of four and a maximum of six, and that, therefore,
COCOFED was justified in paying an amount less than the statutory minimum wage. The
Regional Director issued a Compliance Order, ruling that the documents confirmed the
manifestation by the counsel of complainants that the workers paid on a daily and monthly basis
are receiving wages below the statutory minimum.
COCOFED appealed to the Secretary of Labor and Employment who denied the appeal
and ruled that:
On the basis of the payrolls submitted by the respondents, we find that the Regional
Director was correct in ruling that the complainants are daily-paid workers. While respondents
claims that in 1985 these workers were paid on a piece-rate-basis, still the payrolls show that
from March 1985 to February 1989, the complainants were paid on a daily basis. Granting that
these workers were indeed converted to piece-rate-workers, said conversion is an outright
violation of the Labor Code. An employer cannot unilaterally decrease the salary being given to
the employees pursuant to Article 100 of the Labor Code. What it has voluntarily given cannot be
unilaterally withdrawn. Besides, the implementing rules are explicit to the effect that nothing
therein shall justify an employer from withdrawing or reducing benefits or supplements provided
in existing individual or collective agreement or employer practice or policy.
ISSUES
Whether the Regional Director and the Secretary of Labor committed grave abuse of
discretion in not categorizing COCOFED as an establishment with less than 30 employees and
with a paid-up capital of P500,000.00 or less,?
Whether the Regional Director and the Secretary of Labor committed grave abuse of
discretion in not finding that complainants are piece-rate workers or paid by results?
RULING
The Court found no grave abuse of discretion on the part of the public respondent.
The petitioner
would
have
the
factual
finding
of
public
respondents, in that its contention is that the employees are daily paid workers. The Court
however ruled to the contrary, since the payroll submitted does not support the petitioners
contention. Findings of administrative agencies which have acquired expertise because their
jurisdiction is confined to specific matters are generally accorded not only respect but finality.
Moreover, there is absolutely nothing in the records which show that petitioner's employees
worked for less than eight hours. Finally, there would have been no need for petitioner to
make an offer increasing the wage to P45.00 per day if complainants were indeed piece rate
workers, as it claimed and if their wages were not underpaid, as found by public respondents.
DOCTRINE
The provisions of Republic Act No. 6640, do not prohibit the crediting of CBA
anniversary wage increases for purposes of compliance with Republic Act No. 6640. The
implementing rules cannot provide for such a prohibition not contemplated by the law.
Administrative regulations adopted under legislative authority by a particular department must
be in harmony with the provisions of the law, and should be for the sole purpose of carrying into
effect its general provisions. The law itself cannot be expanded by such regulations. An
administrative agency cannot amend an act of Congress.
FACTS
RA No. 6640, passed on December 14, 1987, increased by ten pesos the statutory
minimum daily wage rate of workers and employees in the private sector, whether agricultural or
non-agricultural. The Secretary of Labor issued the pertinent rules implementing RA No. 6640,
Sec. 8 of which provides: No wage increase shall be credited as compliance with the increase
prescribed herein unless expressly provided under valid individual written/ collective
agreements; and, provided further, that such wage increase was granted in anticipation of the
legislated wage increase under the Act. Such increases shall not include anniversary wage
increase provided in collective bargaining agreements.
Cebu Oxygen Co. and the union of its rank-and-file employees entered into a collective
bargaining agreement covering the years 1986 to 1988. Under the CBA, the management gave
salary increases. The Regional Director ordered Cebu Oxygen Co. to pay the deficiency of P200
in the monthly salary and P231 in the 13 th-month pay of its employees for the period stated. Cebu
Oxygen protested the directors order, saying that the anniversary wage increase under the CBA
could be credited against the wage increase mandated by RA No. 6640. It argued that the
payment of the differentials constituted full compliance with RA No. 6640.
ISSUE
Whether the wage increase under the CBA can be credited as compliance with the
statutory wage increase?
HELD
Cebu Oxygen correctly contended that the salary increases granted by it pursuant to the
existing CBA including anniversary wage increase should be considered in determining
compliance with the wage increase mandated by RA No. 6640. It therefore correctly credited its
employees P62 for the differential of two (2) months increase and P31.00 each for the
differential in the 13th-month pay after deducting the P200 anniversary wage increase for 1987
under the Collective Bargaining Agreement.
Section 8 of the Rules Implementing RA No. 6640 is declared null and void insofar as it
excluded the anniversary wage increases negotiated under collective bargaining agreements from
being credited to the wage increases provided for under RA No. 6640.
DOCTRINE
The requirement of due process is satisfied when the parties are given an opportunity to
submit position papers; what the fundamental law abhors is not absence of previous notice but
the absolute lack of opportunity to be heard.
FACTS
The private respondents (employee) filed with the Department of Labor and
Employment, a complaint charging the petitioner employer with underpayment of wages, illegal
deductions, non-payment of night shift differential, overtime pay, etc. When conciliation efforts
failed, the parties were required to submit their position papers. Based on the position papers, the
Regional Director issued an order directing the employer to pay the employees the benefits
prayed for.
Claiming that he was denied due process, the petitioner filed a motion for reconsideration
which was treated as an appeal. The Undersecretary affirmed with modification then order of the
Regional Director.
Hence, the petitioner filed a petition for certiorari and prohibition.
ISSUE
Whether the requirement of due process had been satisfied?
RULING
Requirement of the process is satisfied when the parties are given an opportunity to
submit position papers; what the fundamental law abhors is not absence of previous notice but
the absolute lack of opportunity to be heard. The petitioner was not denied due process, for
several hearings were in fact conducted by the hearing officer of the Regional Office of the
DOLE and the parties submitted position papers upon which in the Regional Director based his
decision in the case. The requirements of due process are satisfied when the parties are given an
opportunity to submit position papers.
The principle of jurisdiction by estoppel. The petitioner is stopped from questioning the
alleged lack of jurisdiction of the Regional Director over the private respondents claims.
Petitioner submitted to the jurisdiction of the Regional Director by taking part in the hearings
before him and by submitting a position paper. This act of participation amounts to estoppels,
that is, action speaks louder than words; the law does not allow a person to speak against his own
act or deed.
203. Urbanes Etc. vs Hon. Security of Labor
204. Zialeita vs PAL
205. Olympia Gualberto vs Marinduque Mining Industrial Corporation
206. Apex Mining Co., Inc. vs NLRC
207. Philippine Global Communications Inc.
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