UNION OF FILIPRO EMPLOYEES vs.

VIVAR
Petitioner: Union of Filipro Employees (UFE)
Respondents: Benigno Vivar Jr., NLRC, and Nestle Philippines, Inc. (formerly Filipro Inc.)
Ponente: Gutierrez, Jr., J

FACTS:
1. Respondent Nestle filed with the NLRC a petition for declaratory relief seeking a ruling
on its rights and obligations respecting claims of its monthly paid employees for holiday
pay.
2. Both respondent Nestle and petitioner Union agreed to submit the case for voluntary
arbitration, and appointed respondent Vivar as voluntary arbitrator.
3. Voluntary arbitrator decision: directing respondent Nestle to pay its monthly paid
employees holiday pay
4. Respondent filed a motion for clarification seeking:
a. Limitation of award to three years
b. Exclusion of sales personnel (consisted of salesmen, sales representatives, truck
drivers, merchandisers and medical representatives) from the award of holiday
pay
c. Deduction from holiday pay award of overpayment for overtime, night differential,
vacation and sick leave benefits due to the use of 251 divisor.
5. Petitioner Unions contention:
a. Award should be made effective from the date of effectivity of Labor Code
b. Sales personnel are not field personnel and are therefore entitled to holiday pay
pursuant to Art 82
c. Use of 251 as divisor is an established employee benefit which cannot be
diminished
6. Respondent Vivar issued an order declaring that
a. Effectivity of holiday pay award shall retroact to the date of effectivity of Labor
Code
b. Sales personnel as Field personnel, therefore not entitled to holiday pay.
c. The grant of 10 days holiday pay, the divisor should be changed from 251 to 261
and ordered the reimbursement of overpayment for overtime, night differential,
vacation and sick leave pay due to the use of 251
7. Both parties filed a motion for partial reconsideration that were treated as appeals to
NLRC. NLRC remanded the case to the respondent Vivar on the ground that it has no
jurisdiction to review decisions in voluntary arbitration cases
8. However, Respondent Vivar refused to take cognizance of the case reasoning that he
had no more jurisdiction to continue as arbitrator because he had resigned from service
9. Hence, this Petition for declaratory Relief

ISSUES:

1. WON Nestles sales personnel are entitled to holiday pay

2. WON divisor should be changed from 251 to 261 days

HELD/RATIO

1. NO, sales personnel are field personnel and therefore NOT entitled to holiday pay.
Under Article 82, field personnel are not entitled to holiday pay. Said article defines field
personnel as "non-agritultural employees who regularly perform their duties away from
the principal place of business or branch office of the employer and whose actual hours
of work in the field cannot be determined with reasonable certainty."
 It is undisputed that these sales personnel start their field work at 8:00 a.m. after
having reported to the office and come back to the office at 4:00 p.m. or 4:30 p.m. if they
are Makati-based. However, petitioner Union maintains that period between 8:00 a.m. to
4:00 or 4:30 p.m. comprises the sales personnel's working hours which can be
determined with reasonable certainty.

The Court does not agree. The law requires that the actual hours of work in the
field be reasonably ascertained. The company has no way of determining whether or not
these sales personnel, even if they report to the office before 8:00 a.m. prior to field work
and come back at 4:30 p.m, really spend the hours in between in actual field work.

Moreover, the requirement that "actual hours of work in the field cannot be
determined with reasonable certainty" must be read in conjunction with Rule IV, Book III,
Sec 1 of the Implementing Rules which states

(e) Field personnel and other employees whose time and

performance is unsupervised by the employer . . .

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

2. NO, divisor should still be 251. The 251 working days divisor is the result of subtracting
all Saturdays, Sundays and the ten (10) legal holidays from the total number of calendar
days in a year. If the employees are already paid for all non-working days, the divisor
should be 365 and not 251.

In the petitioners case, its computation of daily ratio is as follows: monthly rate x
12 months / 251days

The use of 251 days divisor by respondent Filipro indicates that holiday pay is
not yet included in the employees salary, otherwise the divisor should have been 261.

It must be stressed that the daily rate, assuming there are no intervening salary
increases, is a constant figure for the purpose of computing overtime and night
differential pay and commutation of sick and vacation leave credits. Necessarily, the
daily rate should also be the same basis for computing the 10 unpaid holidays.

The respondent arbitrators order to change the divisor from 251 to 261 days
would result in a lower daily rate which is violative of the prohibition on non-diminution of
benefits found in Article 100 of the Labor Code. To maintain the same daily rate if the
divisor is adjusted to 261 days, then the dividend, which represents the employees
annual salary, should correspondingly be increased to incorporate the holiday pay.