Labor standards firms or corporation who may be required to pay said
Labor Law 1 compensation. That is, that the Court of Industrial
BOOK III CONTINUATION
1. The Manila Electric Company v The Public
Utilities Employees Association
Facts:
This is an appeal in the decision of the Court of
Industrial Relations which orders the respondent
company (Manila Electric Company Inc.) to pay 50%
increase for over time work done by ordinary days and
50%% increase for work done during Sundays and legal
holidays irrespective of the number of days they work
during the weekdays. The MEC.inc contends that such
decision is against the provision of section 4,
Commemwealth Act No. 444 which states that No
person, firm, or corporation, business establishment or
place or center of labor shall compel an employee or
laborer to work during Sundays and legal holidays,
unless he is paid an additional sum of at least twenty-
five per centum of his regular remuneration: Provided,
however, That this prohibition shall not apply to public
utilities performing some public service such as
supplying gas, electricity, power, water, or providing
means of transportation or communication.
Issue:
WON the decision of the Court of Industrial
Relation was erroneous to section 4, Commemwealth
Act No. 444
Held:
The CA holds the decision that the decision made
by the Court of Industrial Relations was erroneous of
contrary to the clear and express provision of the above
mentioned provision because it restricts section 1 of the
Commomwealth Act No. 103 in the sense that public
utilities supplying electricity, gas, power, water, or
providing means of transportation or communication
may compel their employees or laborers to work during
Sundays and legal holidays without paying them an
additional compensation of not less than 25% of their
regular renumeration of the said days.
In accordance with this rule, the provision of
Commonwealth Act No. 103 which confers upon the
Court of Industrial Relations power to settle dispute
between employers and employees in general, including
those relating to compulsion of laborers to work on
Sundays and legal holidays and additional
compensation for those working on those days, should
be considered as impliedly repealed by section 4 of Act
No. 444, which limits or restricts the minimum of the
additional compensation and specifies the persons,
Relations may, under the provision of said section 4,
order a person, firm or corporation or business
establishment or place or center of labor who compel an
employee or laborer to work on Sundays and legal
holidays, to pay him an additional compensation of at
least 25 per centum of his regular remuneration; but said
court can not require public utilities performing public
service mentioned therein to pay said extra
compensation to laborers and employees required by
them to work on Sundays and legal holidays, because
the necessity of public service so requires.
Annent to this, the principal purpose of the
Legislature in enacting said section 4, is not only to
restrict the general power of the Court of Industrial
Relations granted by Act No. 103, [to fix the minimum
additional compensation which an employer may be
required to pay a laborer compelled to work on those
days], but principally to exempt public utilities affected
with public interest, from the payment of such
additional compensation. If it were the intention of the
law makers in enacting section 4 of the Act No. 444 to
fix the limit of the minimum of additional compensation
of laborers working on those days, without exempting
the public utilities, that is, leaving intact the general
power of the court to require the public utilities to pay
said additional compensation, the law would have only
provided, in substance, that all employers are prohibited
from compelling their laborers to work on Sundays and
legal holidays without paying them an additional
compensation of not less than 50 per cent of their regular
remuneration.
2. MANTRADE v. ARBITRATOR FROILAN
M. BACUNGAN
This is a petition for Certiorari and Mandamus filed by
petitioner against arbitrator Froilan M. Bacungan and
Mantrade Development Corporation arising from the
decision of respondent arbitrator, the dispositive part of
which reads as follows:
"CONSIDERING ALL THE ABOVE, We rule that
Mantrade Development Corporation is not under legal
obligation to pay holiday pay (as provided for in Article
94 of the Labor Code in the third official Department of
Labor edition) to its monthly paid employees who are
uniformly paid by the month, irrespective of the number
of working days therein, with a salary of not less than
the statutory or established minimum wage, and this rule
is applicable not only as of March 2, 1976 but as of
November 1, 1974."
Petitioner questions the validity of the pertinent section
of the Rules and Regulations implementing the Labor
Code as amended on which respondent arbitrator based
his decision.

On the other hand, respondent corporation has raised
procedural and substantive objections. It contends that
petitioner is barred from pursuing the present action in
view of Article 263 of the Labor Code which provides
in part that "voluntary arbitration awards or decisions
shall be final, inappealable, and executory," as well as
the rules implementing the same; the pertinent provision
of the Collective Bargaining Agreement between
petitioner and respondent corporation; and Article 2044
of the Civil Code which provides that "any stipulation
that the arbitrators' award or decision shall be final, is
valid, without prejudice to Articles 2038, 2039, and
2040." Respondent corporation further contends that the
special civil action of certiorari does not lie because
respondent arbitrator is not an "officer exercising
judicial functions" within the contemplation of Rule 65,
Section 1, of the Rules of Court; that the instant petition
raises an error of judgment on the part of respondent
arbitrator and not an error of jurisdiction; that it prays
for the annulment of certain rules and regulations issued
by the Department of Labor, not for the annulment of
the voluntary arbitration proceedings; and that appeal by
certiorari under Section 29 of the Arbitration Law,
Republic Act No. 876, is not applicable to the case at
bar because arbitration in labor disputes is expressly
excluded by Section 3 of said law.
These contentions have been ruled against in the
decision of this Court in the case of Oceanic Bic
Division (FFW) vs. Romero, promulgated on July 16,
1984, wherein it stated:
"We agree with the petitioner that the decisions of
voluntary arbitrators must be given the highest respect
and as a general rule must be accorded a certain measure
of finality. This is especially true where the arbitrator
chosen by the parties enjoys the first rate credentials of
Professor Flerida Ruth Pineda Romero, Director of the
U. P. Law Center and an academician of unquestioned
expertise in the field of Labor Law. It is not correct,
however, that this respect precludes the exercise of
judicial review over their decisions. Article 262 of the
Labor Code making voluntary arbitration awards final,
inappealable and executory, except where the money
claims exceed P100,000.00 or 40% of the paid-up
capital of the employer or where there is abuse of
discretion or gross incompetence refers to appeals to the
National Labor Relations Commission and not to
judicial review.
"In spite of statutory provisions making 'final' the
decisions of certain administrative agencies, we have
taken cognizance of petitions questioning these
decisions where want of jurisdiction, grave abuse of
discretion, violation of due process, denial of substantial
justice, or erroneous interpretation of the Law were
brought to our attention.
"A voluntary arbitrator by the nature of her functions
acts in a quasi-judicial capacity. There is no reason why
her decisions involving interpretation of law should be
beyond this Court's review. Administrative officials are
presumed to act in accordance with law and yet we do
not hesitate to pass upon their work where a question of
law is involved or where a showing of abuse of
discretion in their official acts is properly raised in
petitions for certiorari." (130 SCRA 392, 399, 400-401)
In denying petitioner's claim for holiday pay,
respondent arbitrator stated that although monthly
salaried employees are not among those excluded from
receiving such additional pay under Article 94 of the
Labor Code of the Philippines, to wit:
ART. 94. Right to holiday pay. - (a) Every worker shall
be paid his regular daily wage during regular holidays,
except in retail and service establishments regularly
employing less than ten (10) workers;
(b) The employer may require an employee to work on
any holiday but such employee shall be paid
compensation equivalent to twice his regular rate; and
(c) As used in this Article, "holiday" includes: New
Year's Day, Maundy Thursday, Good Friday, the-ninth
of April, the first of May, the twelfth of June, the fourth
of July, the thirtieth of November, the twenty-fifth and
the thirtieth of December, and the day designated by law
for holding a general election.
they appear to be excluded under Sec. 2, Rule IV, Book
III of the Rules and Regulations implementing said
provision which reads thus:
SEC. 2. Status of employees paid by the month. -
Employees who are uniformly paid by the month,
irrespective of the number of working days therein, with
a salary of not less than the statutory or established
minimum wage shall be presumed to be paid for all days
in the month whether worked or not.
Respondent arbitrator further opined that respondent
corporation does not have any legal obligation to grant
its monthly salaried employees holiday pay, unless it is
argued that the pertinent section of the Rules and
Regulations implementing Section 94 of the Labor Code
is not in conformity with the law, and thus, without force
and effect.
This issue was subsequently decided on October 24,
1984 by a division of this Court in the case of Insular
Bank of Asia and America Employees' Union (IBAAEU)
vs. Inciong, wherein it held as follows:
"WE agree with the petitioner's contention that Section
2, Rule IV, Book III of the implementing rules and
Policy Instruction No. 9 issued by the then Secretary of
Labor are null and void since in the guise of clarifying
the Labor Code's provisions on holiday pay, they in
effect amended them by enlarging the scope of their
exclusion (p. 11, rec.).
"Article 94 of the Labor Code, as amended by P. D. 850,
provides:
'Art. 94. Right to holiday pay.- (a) Every worker shall
be paid his regular daily wage during regular holidays,
except in retail and service establishments regularly
employing less than ten (10) workers. x x x'
"The coverage and scope of exclusion of the Labor
Code's holiday pay provisions is spelled out under
Article 82 thereof which reads:
'Art. 82. Coverage.- The provision of this Title shall
apply to employees in all establishments and
undertakings, whether for profit or not, but not to
government employees, managerial employees, field
personnel, members of the family of the employer who
are dependent on him for support, domestic helpers,
persons in the personal service of another, and workers
who are paid by results as determined by the Secretary
of Labor in appropriate regulations.'
"From the above-cited provisions, it is clear that
monthly paid employees are not excluded from the
benefits of holiday pay. However, the implementing
rules on holiday pay promulgated by the then Secretary
of Labor excludes monthly paid employees from the
said benefits by inserting under Rule IV, Book III of the
implementing rules, Section 2, which provides that:
'employees who are uniformly paid by the month,
irrespective of the number of working days therein, with
a salary of not less than the statutory or established
minimum wage shall be presumed to be paid for all days
in the month whether worked or not.'" (132 SCRA 663,
672-673)
This ruling was reiterated by the Court en banc on
August 28, 1985 in the case of Chartered Bank
Employees Association vs. Ople, wherein it added that:
"The questioned Sec. 2, Rule IV, Book III of the
Integrated Rules and the Secretary's Policy Instruction
No. 9 add another excluded group, namely 'employees
who are uniformly paid by the month'. While the
additional exclusion is only in the form of a presumption
that all monthly paid employees have already been paid
holiday pay, it constitutes a taking away or a deprivation
which must be in the law if it is to be valid. An
administrative interpretation which diminishes the
benefits of labor more than what the statute delimits or
withholds is obviously ultra vires." (138 SCRA 273,
282. See also CBTC Employees Union vs. Clave,
January 7, 1986, 141 SCRA 9.)
Lastly, respondent corporation contends that mandamus
does not lie to compel the performance of an act which
the law does not clearly enjoin as a duty. True it is also
that mandamus is not proper to enforce a contractual
obligation, the remedy being an action for specific
performance (Province of Pangasinan vs. Reparations
Commission, November 29, 1977, 80 SCRA 376). In
the case at bar, however, in view of the above-cited
subsequent decisions of this Court clearly defining the
legal duty to grant holiday pay to monthly salaried
employees, mandamus is an appropriate equitable
remedy (Dionisio vs. Paterno, July 23, 1980, 98 SCRA
677; Gonzales vs. Government Service Insurance
System, September 10, 1981, 107 SCRA 492).
WHEREFORE, the questioned decision of respondent
arbitrator is SET ASIDE and respondent corporation is
ordered to GRANT holiday pay to its monthly salaried
employees. No costs.
3. G.R. No. 118289 December 13, 1999
TRANS-ASIA PHILS. EMPLOYEES
ASSOCIATION (TAPEA) and ARNEL
GALVEZ, petitioners,
vs.
NATIONAL LABOR RELATIONS
COMMISSION, TRANS-ASIA (PHILS.) and
ERNESTO S. DE CASTRO, respondents.
Facts:
On 7 July 1988, Trans-Asia Philippines Employees
Association (TAPEA) entered into a Collective
Bargaining Agreement (CBA) with their employer.
The CBA provided for, among others, the payment of
holiday pay with a stipulation that if an employee is
permitted to work on a legal holiday, the said employee
will receive a salary equivalent to 200% of the regular
daily wage plus a 60% premium pay.
Despite the conclusion of the CBA, however, an issue
was still left unresolved with regard to the claim of
TAPEA for payment of holiday pay. Since the parties
were not able to arrive at an amicable settlement despite
the conciliation meetings, TAPEA, led by its President,
petitioner Arnie Galvez, filed a complaint for the
payment of their holiday pay in arrears. On 18
September 1988, petitioners amended their complaint to
include the payment of holiday pay for the duration of
the recently concluded CBA (from 1988 to 1991), unfair
labor practice, damages and attorneys fees.
In their Position Paper, TAPEA contended that their
claim for holiday pay in arrears is based on the non-
inclusion of the same in their monthly pay.
In response, Trans-Asia contended that it has always
honored the labor law provisions on holiday pay by
incorporating the same in the payment of the monthly
salaries of its employees. In support of this claim, Trans-
Asia pointed out that it has long been the standing
practice of the company to use the divisor of 286 days
in computing for its employees overtime pay and daily
rate deductions for absences.
52 x 44 / 8 = 286 days
Where: 52 = number of weeks in a year
44 = number of work hours per week
8 = number of work hours per day
Trans-Asia further clarified that the 286 days divisor
already takes into account the ten (10) regular holidays
in a year since it only subtracts from the 365 calendar
days the unworked and unpaid 52 Sundays and 26
Saturdays (employees are required to work half-day
during Saturdays). Trans-Asia claimed that if the ten
(10) regular holidays were not included in the
computation of their employees monthly salary, the
divisor which they would have used would only be 277
days which is arrived at by subtracting 52 Sundays, 26
Saturdays and the 10 legal holidays from 365 calendar
days.
Labor Arbiter and NLRC: Dismissed the complaint for
lack of merit.
Issue: Whether the Trans-Asias use of 286 days as
divisor is invalid.
Held:
No, it is not in such a way that the Supreme
Court adjusted the divisor.
Trans-Asias inclusion of holiday pay in petitioners
monthly salary is clearly established by its consistent
use of the divisor of 286 days in the computation of
its employees benefits and deductions. The use by
Trans-Asia of the 286 days divisor was never disputed
by petitioners. A simple application of mathematics
would reveal that the ten (10) legal holidays in a year
are already accounted for with the use of the said
divisor. As explained by Trans-Asia, if one is to deduct
the unworked 52 Sundays and 26 Saturdays (derived by
dividing 52 Saturdays in half since petitioners are
required to work half-day on Saturdays) from the 365
calendar days in a year, the resulting divisor would be
286 days (should actually be 287 days). Since the ten
(10) legal holidays were never included in subtracting
the unworked and unpaid days in a calendar year, the
only logical conclusion would be that the payment for
holiday pay is already incorporated into the said divisor.
However, SC held that that there is a need to adjust the
divisor used by Trans-Asia to 287 days, instead of only
286 days, in order to properly account for the entirety of
regular holidays and special days in a year as prescribed
by Executive Order No. 203 in relation to Section 6 of
the Rules Implementing Republic Act 6727.
Sec. 1 of Executive Order No. 203 provides:
Sec. 1. Unless otherwise modified by law, order or
proclamation, the following regular holidays and special
days shall be observed in the country:
A. Regular Holidays
New Years Day January 1
Maundy Thursday Movable Date
Good Friday Movable Date
Araw ng Kagitingan April 9
(Bataan and Corregidor Day)
Labor Day May 1
Independence Day June 12
National Heroes Day Last Sunday of August
Bonifacio Day November 30
Christmas Day December 25
Rizal Day December 30
B. Nationwide Special Days
All Saints Day November 1
Last Day of the Year December 31
On the other hand, Section 6 of the Implementing Rules
and Regulations of Republic Act No. 6727 provides:
Sec. 6. Suggested Formula in Determining the
Equivalent Monthly Statutory Minimum Wage Rates.
Without prejudice from existing company practices,
agreements or policies, the following formulas may be
used as guides in determining the equivalent monthly
statutory minimum wage rates:
xxx xxx xxx
d) For those who do not work and are not considered
paid on Saturdays and Sundays or rest days:
Equivalent Monthly = Average Daily Wage Rate x 262
days / 12 months
Where 262 days =
250 days Ordinary working days
10 days Regular holidays
2 days Special days (If considered paid; if actually
worked, this is equivalent to 2.6
Based on the above, the proper divisor that should be
used for a situation wherein the employees do not work
and are not considered paid on Saturdays and Sundays
or rest days is 262 days. In the present case, since the
employees of Trans-Asia are required to work half-day
on Saturdays, 26 days should be added to the divisor of
262 days, thus, resulting to 288 days. However, due to
the fact that the rest days of petitioners fall on a Sunday,
the number of unworked but paid legal holidays should
be reduced to nine (9), instead of ten (10), since one
legal holiday under E.O. No. 203 always falls on the last
Sunday of August, National Heroes Day. Thus, the
divisor that should be used in the present case should be
287 days.
However, the Court notes that if the divisor is increased
to 287 days, the resulting daily rate for purposes of
overtime pay, holiday pay and conversions of
accumulated leaves would be diminished. To illustrate,
if an employee receives P8,000.00 as his monthly
salary, his daily rate would be P334.49, computed as
follows:
P8,000.00 x 12 months / 287 days = P334.49/day
Whereas if the divisor used is only 286 days, the
employees daily rate would be P335.66, computed as
follows:
P8,000.00 x 12 months / 286 days = P335.66/day
Clearly, this muddled situation would be violative of the
proscription on the non-diminution of benefits under
Section 100 of the Labor Code. On the other hand, the
use of the divisor of 287 days would be to the advantage
of petitioners if it is used for purposes of computing for
deductions due to the employees absences. In view of
this situation, the Court rules that the adjusted divisor of
287 days should only be used by Trans-Asia for
computations which would be advantageous to
petitioners (i.e., deductions for absences), and not for
computations which would diminish the existing
benefits of the employees (i.e., overtime pay, holiday
pay and leave conversions.)
SC Decision:
WHEREFORE, the Resolutions of the NLRC, dated 23
November 1993 and 13 September 1994, are hereby
AFFIRMED with the MODIFICATION that Trans-
Asia is hereby ordered to adjust its divisor to 287 days
and pay the resulting holiday pay in arrears brought
about by this adjustment starting from 30 June 1987, the
date of effectivity of E.O. No. 203.
4. G.R. No. 114698 July 3, 1995
Wellington Investment vs Trajano
Facts:
Upon an inspection of the Wellington Flour Mills,
owned and operated by petitioner, the latter was accused
of non-payment of regular holidays falling on a Sunday
for monthly-paid employees.
Petitioners Arguments:
1 Monthly salary of the monthly-paid employees
already includes holiday pay for all the regular
holidays.
2 To pay for the extra days (regular holidays on
a Sunday), as compelled by the Order of the
DOLE, it is in effect being compelled to pay
for alleged extra working days.
DOLEs Contentions:
1 Regular holidays falling on Sundays have
precluded the enjoyment by the employees of
a non-working day and the employees
consequently have to work for additional days.
2 When a regular holiday falls on a Sunday, an
extra or additional working day is created and
the employer has the obligation to pay its
employees for the extra day.
Issue: Whether or not a monthly-paid employee is
entitled to an additional pay aside from his usual holiday
pay, whenever a regular holiday falls on a Sunday.
Held:
No.
To agree with DOLEs theory would increase the
number of days in a year, instead of 365 days, as basis
for computation of salary for monthly-paid employees.
There is no provision of law requiring employers to
make adjustments in the monthly salary rate set by them
to take account of the legal holiday falling on Sundays
or to reckon a year at more than 365 days.
5. G.R. No. 146775. January 30, 2002
San Miguel vs CA
Facts:
Upon a routine inspection done by the Department of
Labor and Employment in the premises of San Miguel
Corporation in Iligan City, it was discovered that there
was underpayment by SMC of regular Muslim Holiday
pay to its employees. SMC received the inspection
result which later on contested such thus DOLE
conducted summary hearings. Both DOLE Regional
Office and National Office ruled against SMC ordering
the latter to consider Muslim Holidays as regular
holidays and to pay its Muslim and non-Muslim
employees holiday pay.
Thus, this appeal.
Issue:
Whether or not the Muslim holiday pay is applicable to
employees regardless of faith or religion
Held:
Yes.
Although Article 3 of Presidential Decree 1083 (Code
of Muslim Personal Laws) provides that the provisions
of the code shall be applicable only to Muslims, on
which the petitioner based its defense, the same article
provides further that nothing in the code shall be
construed to the prejudice of non-Muslims. The
Supreme Court stated that there should be no distinction
between Muslims and non-Muslims as regards the
payment of benefits for Muslim Holidays. The Court,
quoting the Court of Appeals, assuming that the SMC
is correct, then Muslims throughout the Philippines are
also not entitled to holiday pays on Christian holidays
declared by law. We must remind (SMC) that wages and
other emoluments granted by law are determined not on
the basis of the workers faith or religion, finds against
the petitioner, and dismissed the petition.

6. Makati Haberdashery vs NLRC, 179 SCRA
449 (89)
Penned by Justice Fernan
Nature:
Petition for certiorari to review the decision of the
NLRC which affirmed the decision of the Labor Arbiter
who jointly heard and decided two cases filed by the
Union in behalf of the private respondents
Facts:
Private complainants are working for Makati
Haberdashery Inc as tailors, seamstress,
sewers, basters, and plantsadoras and are paid
on a piece-rate basis (except two petitioners
who are paid on a monthly basis) and in
addition, they are given a daily allowance of P
3.00 provided they report before 9:30 a.m.
Work sked: 9:30-6 or 7 p.m., Mondays to
Saturdays and even on Sundays and holidays
during peak periods.
Unions first case was on:
underpayment of
basic wage
living allowance
non-payment of
holiday pay
service incentive pay
13th month pay
benefits provided for under Wage
Orders 1-5
While the first case was pending decision,
Pelobello left an open package containing a
jusi barong tagalong with salesman Rivera. He
was caught and confronted about this and he
explained that this was ordered by Zapata, also
a worker, for his (personal) customer. Zapata
allegedly admitted that he copied the design of
the company but later denied ownership of the
same.
They were made to explain why no action
should be taken against them for accepting a
job order which is prejudicial and in direct
competition with the business. However they
did not submit and went on AWOL until the
period given for them to explain expired hence
the dismissal.
Illegal dismissal complaint on the second case
filed before the LA Diosana.
LA declared petitioners guilty of illegal
dismissal and ordered to reinstate Pelobello
and Zapata and found petitioners violating
decrees of COLA, service incentive and 13th
month pay. Commission analyst was directed
to compute the monetary awards which
retroacts to three years prior to filing of case.
NLRC affirmed but limited backwages to one
year.
Issue: WON employees paid on piece-rate basis are
entitled to service incentive pay (relevant to title)
Held: NO, fall under exceptions set forth in the
implementing rules
Ratio:
As to the service incentive leave pay: as piece-
rate workers being paid at a fixed amount for
performing work irrespective of time
consumed in the performance thereof, they fall
under the exceptions stated in Sec 1(d), Rule
V, IRR, Book III, Labor Code.
Service Incentive Leave
SECTION 1. Coverage. This rule shall apply to
all employees except:
(d) Field personnel and other employees whose
performance is unsupervised by the employer
including those who are engaged on task or contract
basis, purely commission basis, or those who are
paid a fixed amount for performing work
irrespective of the time consumed in the
performance thereof;
Other issues discussed:
ER-EE relationship
Held: There is such relationship because in the
application of the four-fold test, it was found that
petitioners had control over the respondents not only as
to the result but also as to the means and method by
which the same is to be accomplished. Such control is
proven by a memorandum which enumerates
procedures and instructions regarding job orders,
alterations, and their behavior inside the shop.
Minimum Wage
Held: No dispute that entitled to minimum wage but
court dismissed case for lack of sufficient evidence to
support claim that there was in fact underpayment which
was ruled by the LA and which the private resp did not
appeal to in the NLRC nor in the SC. Well-settled is the
rule that an appellee who has not himself appealed
cannot obtain from the appellate court any affirmative
relief other than the ones granted in the decision of the
court below.
COLA
Held: Entitled. They are regular employees. IRR of
Wage No. 1, 2, and 5 provide that all workers in the
private sector, regardless of their position, designation
of status, and irrespective of the method by which
their wages are paid are entitled to such allowance.
13th Month pay
Held: Entitled under Sec. 3(e) of the IRR of PD 851
which is an exception to the exception of such provision
which states that employers whose workers are paid on
piece-rate basis in which are covered by such issuance
in so far as such workers are concerned.
Illegal dismissal
Held: Dismissed for justifiable ground based on Article
283 (a) and (c). Inimical to the interest of the employer.
Not dismissed just because of union activities.
7. G.R. No. 123938 May 21, 1998
Labor Congress of the Philippines vs. NLRC
Ponente: J. Davide, Jr.
Doctrine:
Application of LC Article 286(n) in determination of
status of piece workers as regular workers versus LC
Article 86 definition
Facts:
The 99 persons (Ana Marie Ocampo, Mary Intal, et al)
as private petitioners in the proceeding (represented
by the Labor Congress of the Phils.) were rank-and-file
employees of private respondent Empire Food
Products (a food and fruit processing company), hired
on various dates.
Ocampo et al filed against Empire an NLRC complaint
for payment of money claims and for violation of labor
standards laws. Alongside this they also filed a petition
for direct certification for the Labor Congress to be
their bargaining representative. On Oct. 23, 1990,
petitioners represented by LCP, and private
respondents Gonzalo and Evelyn Kehyeng (Kehyeng
spouses) entered into a Memorandum of Agreement,
recognizing the following:
Status of LCP as sole and exclusive Bargaining
Agent and Representative for all rank and file
employees of the Empire Food Products
regarding "wages, hours of work, and other
terms and conditions of employment";
With regard to the NLRC complaint, all parties
agree to resolve the issues during the
Collective Bargaining Agreement;
Proper adjustment of wages, withdrawal of
case from the Calendar of NLRC, non-
interference or any ULP act, etc.
On Oct. 24, 1990, the Mediator Arbiter approved the
memorandum and certified LCP as the sole and
exclusive bargaining agent for the rank-and-file
employees of Empire.
On November 1990, LCP President Navarro submitted
to Empire a proposal for collective bargaining.
However, on January 1991, the private petitioners Ana
Marie et al filed a complaint for:
Unfair Labor Practices via Illegal Lockout and
Dismissal;
Union-Busting through harassment, threats
and interference to the right for self-
organization;
Violation of the Oct. 23, 1990 memorandum
Underpayment of wages
Actual, moral and exemplary damages
Labor Arbiter (Part 1):
Absolved Empire for ULP, union busting,
violation of the memorandum of agreement,
underpayment of wages and denied
petitioners' prayer for actual, moral and
exemplary damages.
Denied prayer for actual, moral and
exemplary damages
Directed reinstatement of complainants, due
to the fact that Empire did not keep its payroll
records as per requirement of the DOLE.
Admonition to Empire given as well re: further
harassment and intimidation.
NLRC (Part 1):
Remanded case to Labor Arbiter for further
proceedings due to overlooking the
testimonies of some of the individual
complainants which are now on record.
Labor Arbiter (Part 2):
Complainants failed to present with
definiteness and clarity the particular act or
acts constitutive of unfair labor practice.
Declaration of ULP connotes a finding of prima
facie evidence of probability that a criminal
offense may have been committed so as to
warrant the filing of a criminal information
before the regular court.
As regards the issue of harassment, threats
and interference with the rights of employees
 to self-organization which is actually an
ingredient of unfair labor practice,
complainants failed to specify what type of
threats or intimidation was committed and
who committed the same.
NLRC (Part 2):
Affirmed LA decision Part 2.
Petitioners:
The fact that they are piece workers does not
imply that they are not regular employees
entitled for reinstatement.
LA and NLRC decisions were not supported by
substantial evidence;
Abandonment of work was not proved by
substantial evidence;
Much credit given to the Kehyeng spouses
self-serving arguments.
Respondents:
Ana Marie, et al were piece workers hence
they are exempt from labor standards
benefits
Issues:
1. [RELEVANT] WON the petitioners are entitled
to labor standard benefits, considering their
status as piece rate workers.
2. WON the actions of Ana Marie, et al
constituted abandonment of work.
Held:
1. YES, petitioners are entitled to labor standards
benefits, namely, holiday pay, premium pay,
13th month pay and service incentive leave.
2. NO, failure to appear to work did not
constitute abandonment,
Ratio:
Supreme Court decision cites that Ana Marie, et al,
despite being pakyao or piece workers does not
imply that they are not regular employees entitled to
reinstatement. Applying the two-fold test from LC
Article 286(n) [Art. 280 (old)], the SC found that the
supposedly piece workers had three factors in their
favor:
a) The nature of the tasks of Ana Marie, et al of
repacking snack food items was NECESSARY
and DESIRABLE in the usual business of Empire
Foods, which is a food and fruit processing
company. According to Tabas vs California
Manufacturing, merchandisers of processed
food who coordinates for sales of processed
food was a necessity and was desirable for the
day-to-day operations of a food processing
company. With more reason would the job of
food packers be necessary for the day-to-day
operations of a food processing plant.
b) Ana Marie et al worked throughout the year,
with their employment being independent
from a specific project or season.
c) The length of time that petitioners fulfilled the
requirement of Article 286(n).
Therefore, the SC considered the employees as regular
employees despite their status as piece workers,
according them benefits such as holiday pay, premium
pay, 13th month pay and service incentive leave.
The Rules Implementing the Labor Code exclude
certain employees from receiving benefits such as
nighttime pay, holiday pay, service incentive leave and
13th month pay, inter alia, "field personnel and other
employees whose time and performance is
unsupervised by the employer, including those who are
engaged on task or contract basis, purely commission
basis, or those who are paid a fixed amount for
performing work irrespective of the time consumed in
the performance thereof." However, petitioners as
piece-rate workers do not fall within this group. Not
only did the employees labor under the control of
Empire, the employees also worked throughout the
year to fulfil their quota as basis for compensation.
Further, in Section 8 (b), Rule IV, Book III, piece workers
are specifically mentioned as being entitled to holiday
pay.
Sec. 8. Holiday pay of certain employees.
(b) Where a covered employee is paid by
results or output, such as payment on piece
work, his holiday pay shall not be less than his
average daily earnings for the last seven (7)
actual working days preceding the regular
holiday: Provided, however, that in no case
shall the holiday pay be less than the
applicable statutory minimum wage rate.
In addition, the Revised Guidelines on the
Implementation of the 13th Month Pay Law, in view of
the modifications to P.D. No. 851 19 by Memorandum
Order No. 28, clearly exclude the employer of piece
rate workers from those exempted from paying 13th
month pay, to wit:
 2. EXEMPTED EMPLOYERS - The
following employers are still not covered by
P.D. No. 851:
d. Employers of those who are
paid on purely commission,
boundary or task basis, and those
who are paid a fixed amount for
performing specific work,
irrespective of the time consumed in
the performance thereof, except
where the workers are paid on piece-
rate basis in which case the employer
shall grant the required 13th month
pay to such workers.
However, the Revised Guidelines as well as the Rules
and Regulations identify those workers who fall under
the piece-rate category as those who are paid a
standard amount for every piece or unit of work
produced that is more or less regularly replicated,
without regard to the time spent in producing the
same.
They should also be paid for overtime pay, even though
Sec. 2(e), Rule I, Book III of the Implementing Rules
states that:
workers who are paid by results including
those who are paid on piece-work, takay,
pakiao, or task basis, if their output rates are
in accordance with the standards prescribed
under Sec. 8, Rule VII, Book III, of these
regulations, or where such rates have been
fixed by the Secretary of Labor in accordance
with the aforesaid section, are not entitled to
receive overtime pay.
In this case, Empire Foods did not allege that they
adhered to the standards set forth in Sec. 8, Rule
VII, Book III, nor with the rates prescribed by
the Secretary of Labor. Therefore, even though they
are piece workers, they are entitled to overtime pay.
With regard to the issue of abandonment of work, the
SC cited the Office of Solicitor Generals observations:
In finding that petitioner employees
abandoned their work, the Labor Arbiter and
the NLRC relied on the testimony of Security
Guard Rolando Cairo that on January 21, 1991,
petitioners refused to work. As a result of their
failure to work, the cheese curls ready for
repacking on said date were spoiled
The failure to work for one day, which
resulted in the spoilage of cheese curls does
not amount to abandonment of work. In fact
two (2) days after the reported abandonment
of work or on January 23, 1991, petitioners
filed a complaint for, among others, unfair
labor practice, illegal lockout and/or illegal
dismissal.
Furthermore, the SC stressed that the burden of
proving the existence of just cause for dismissing an
employee, such as abandonment, rests on the
employer. According to the SC, Empire Foods failed to
discharge this burden as basis for dismissing the
employees.
Also, the SC considered that, in terminating the
employees for abandonment of work, Empire failed to
serve to the employees a written notice of termination
(as required by the Two-Notice rule and Section 2, Rule
XIV, Book V of the Omnibus Rules), violating the
employees right to security of tenure and the
constitutional right to due process.
8. Sentinel Security Agency, Inc. v. NLRC, 295
SCRA 123 1998)
Penned by Justice Panganiban
Nature:
Certiorari seeking the reversal of the two petitions to the
NLRC
Facts:
Five employees of Sentinel Security Agency
filed for illegal dismissal against the Agency
and its Client Philamlife Cebu and prayed for
payment of salary differential, service
incentive pay, and separation pay.
The complainants were assigned to Philamlife
Cebu but after nearly 20 years for some
 employees and more than 20 years for some,
Philam requested on Dec 16, 1993 that security
guards be replaced in the Clients offices in
Cebu, Bacolod, CDO, Dipolog and Iligan.
Agency issued a Relief and Transfer Order
replacing the guards and for them to be
reassigned to other clients effective on Jan 16
1994. On Jan 18 and Feb 4 1994, the
employees filed an illegal dismissal complaint
because of a threat from the personnel manager
who told them that they were replaced because
they were old.
Hence the complaint against the Agency and
the Client.
Client and Agencys defense: No dismissal
because the contract allows them to recall
security guards from assigned posts at the will
of either party and that the Agency is allowed
for a period of not more than six months, to
retain the complainants on floating status.
Agency should have been given a chance to
give new assignments to complainants.
Clients defense: No ER-EE relationship. Job
contract, separate corporate personalities and
not necessary and desirable to the business or
trade.
LA: Agency and Client ordered to pay solidarily
complainants 13th month pay and service incentive leave
benefits amounting to a little more than P60K.
NLRC: There was constructive dismissal. Modified
awards. Deleted 13th month pay for previous years.
Twin remedies. Ordered:
1) Agency to give separation pay at the rate of
month pay for every year of service and
2) Agency and Client to solidarily pay backwages
and 13th month pay for one year (Jan 1994-
1995).
Issue: 1) WON there was illegal dismissal
2) And if so, WON Philam may be held liable
Held:
1) Yes there was illegal dismissal but SC does not
agree with NLRC for its reasons for ruling that
there was ID. NLRCs reason: Client and
Agency wanted to circumvent the Retirement
Law. SC: You NLRC are speculating and your
contention is unsupported!
SOLGEN: Complainants were placed on
temporary off-detail which is a standard
stipulation in employment contracts since the
availability of assignment for security guards
is dependent on contracts entered into by the
agency. Off-detail or Floating status means
waiting to be posted and this is not dismissal
so long as such status does not continue beyond
a reasonable time.
However SOLGEN made a pronouncement that
although abandonment is inconsistent with
illegal dismissal, such rule is not applicable
when the complainants expressly reject this
relief and ask for separation pay instead.
SC (with conviction): You are wrong SolGen!
How dare you be wrong? You know that
abandonment requires a deliberate and
unjustified refusal of an employee to resume to
his work coupled with a clear absence of any
intention to return to his/her work and the fact
that complainants did not pray for
reinstatement is not a sufficient proof of
abandonment, you moron. They reported to the
Agency on several dates but it did not give any
reassignment. Abandonment has been ruled to
be incompatible with constructive dismissal as
stated in Escobin vs NLRC. Because I am
infallible and you are in dire need of
enlightenment, let me demonstrate the correct
reasoning why they are illegally dismissed.
It has been recognized that the management has
a prerogative to transfer an employee from one
office to another within the same business
establishment as the exigency of the business
may require provided that transfer:
- does not result in a demotion in rank
- diminution in salary, benefits, and other
privileges
- not unreasonable, inconvenient or prejudicial to
the latter
- not used as a subterfuge by the employer to rid
himself of an undesirable worker
SC: Solgen, in case you dont know what a
transfer means, let me extend my unparalleled
mastery of this craft which,unfortunately, you
dont have:
- Transfer may mean two things: a) from one
position to another of equivalent rank, level or
salary b) from one office to another within the same
business establishment. Oh please, do not even
think this is equivalent to promotion because the
latter involves a scalar ascent.
It should have been a mere changing of the
guards, a reshuffling or exchange of their posts or
assignments to their posts and such that no
security guard would be without assignment. But
did the Agency implement such recognized
concept? NO!!! It hired new security guards,
younger, braver, full of life men whose age are in
their prime! This resulted in a lack of posts to
which the senile, used and wrinkled men could
have been reassigned.
 Floating status requires the dire exigency of the
employers bona fide suspension of operation,
business or undertaking. In security services, this
happens when the clients do not renew their
contracts with a security agency but in the case at
bar, the Client awarded a new contract to the
Agency. No surplus of security guards over
available assignments. No suspension of
operation that would have justified placing the
complainants off-detail and making them wait for
6 months.
SC: The logical conclusion here Solgen, in case
you dont know whats logical, is that the Agency
illegally dismissed the complainants.
2) Only solidarily to the service incentive leave pay.
Since no ER-EE relationship between Client
and complainants, cannot be held liable for
separation pay and backwages.
Art 106, 107 and 109 provide when the principal
who contracted the contractor/subcontractor
may be held solidarily liable. Art 109 states
that every employer or indirect employer shall
be held responsible with his contractor or
subcontractor for any violation of any
provision of this Code. In determining the
extent of their civil liability under this Chapter,
they shall be considered direct employers.
Such liability covers service incentive leave pay
of the complainant during the time they were
posted at the Cebu Branch. Service had been
rendered, liability accrued even when they
were eventually transferred or reassigned.
Art. 95 of the LC expressly provides that service
incentive leave is expressly granted to every
employee who has rendered at least one year or
service shall be entitled to a yearly service
incentive leave of five days with pay.
IRR of the LC: Unused service incentive leave is
commutable to its money equivalent as
provided by Sec. 5: The service incentive leave
shall be commutable to its money equivalent if
not used or exhausted at the end of the year
Pau: May the contrary be stipulated? If yes, when?
Supposing the employer gives more than 5 days of
service incentive leave, can they now stipulate that
such leaves may not be converted to its money
equivalent? When can such leaves be not converted
into cash?
9. AUTO BUS TRANSPORT SYSTEMS, INC.
v. ANTONIO BAUTISTA
G.R. No. 156367, May 16, 2005
CHICO-NAZARIO, J.
FACTS: Antonio Bautista has been employed by
Autobus, as driver-conductor and was paid on
commission basis, seven percent (7%) of the total gross
income per travel, on a twice a month basis. One day,
while Bautista was driving Autobus No. 114, he
accidentally bumped the rear portion of Autobus No.
124. Bautista averred that the accident happened
because he was compelled by the management to go
back to Roxas, Isabela, although he had not slept for
almost 24 hours, as he had just arrived in Manila from
Roxas, Isabela. He further alleged that he was not
allowed to work until he fully paid 30% of the cost of
repair of the damaged buses and that his pleas for
reconsideration were ignored by management. After a
month, management sent him a letter of termination.
Thus, he instituted a Complaint for Illegal Dismissal
with Money Claims for nonpayment of 13th month pay
and service incentive leave pay. Autobus maintained
that Bautistas employment was replete with offenses.
Furthermore, Autobus avers that in the exercise of its
management prerogative, Bautista's employment was
terminated only after the latter was provided with an
opportunity to explain.
The Labor Arbiter dismissed the complaint but ordered
Autobus to pay his 13th month pay from the date of his
hiring to the date of his dismissal, as well as his service
incentive leave pay for all the years he had been in
service. Autobus appealed to the NLRC which deleted
the award of 13th month pay based on the Rules and
Regulations Implementing Presidential Decree No. 851,
particularly Sec. 3 which exempts employers of those
who are paid on purely commission, boundary, or task
basis. Records showed that Bautista, in his position
paper, admitted that he was paid on a commission basis.
The award of service incentive leave pay was
maintained. Thus, Autobus sought a reconsideration
which was denied by NLRC. CA affirmed the decision
of the NLRC.
ISSUE: Whether or not Bautista is entitled to service
incentive leave.
HELD: The contention of Autobus that Bautista is not
entitled to the grant of service incentive leave just
because he was paid on purely commission basis is
misplaced. What must be ascertained in order to resolve
the issue of propriety of the grant of service incentive
leave to respondent is whether or not he is a field
personnel.
Along the routes that are plied by these bus companies,
there are its inspectors assigned at strategic places who
board the bus and inspect the passengers, the punched
tickets, and the conductors reports. There is also the
mandatory once-a-week car barn or shop day, where the
bus is regularly checked as to its mechanical, electrical,
and hydraulic aspects, whether or not there are problems
thereon as reported by the driver and/or conductor.
They too, must be at a specific place at a specified time,
as they generally observe prompt departure and arrival
from their point of origin to their point of destination.
In each and every depot, there is always the Dispatcher
whose function is precisely to see to it that the bus and
its crew leave the premises at specific times and arrive
at the estimated proper time. These, are present in the
case at bar. The driver, the complainant herein, was
therefore under constant supervision while in the
performance of this work. He cannot be considered a
field personnel.
Therefore, Bautista is not a field personnel but a regular
employee who performs tasks usually necessary and
desirable to the usual trade of business of Autobus.
Accordingly, Bautista is entitled to the grant of service
incentive leave.
10. Philippine Fisheries Development Authority
v. NLRC, 213 SCRA 621 (1992)
Issue 1: WON an indirect employer is bound by the
ruling of NLRC which made the indirect employer
liable when the guards are not employees of the
petitioner because the contract of services explicitly
states that the security guards are not their employees
thus, no employer-employee relationship, thus the
jurisdiction of the CSC may not be invoked in this case.
Held:
Notwithstanding that the petitioner is a
government agency, its liabilities, which are
jointly and solidary with that of the contractor
are provided in Art. 106, 107 and 109.
Its liabilities are under the NLRC scope and in
addition, book three title ii on wages provides
that the term employer includes any person
acting directly or indirectly in the interest of
an employer in relation to an employee and
shall include the Government and all its
branches, subdivisions and
instrumentalities, all GOCCs and
institutions as well as non-profit private
institutions or organizations.
Issue 2: Who should carry the burden of the wage
increases?
Held:
It is settled that in job contracting, the
petitioner as principal is jointly and severally
liable with the contractor for the payment of
unpaid wages. In the case at bar, the action was
for the payment of unpaid wage differentials
under Wage Order No. 6.
In the case of Eagle Security vs. NLRC:
The solidary liability of PTSI and EAGLE, however,
does not preclude the right of reimbursement from his
co-debtor by the one who paid. It is with respect to this
right of reimbursement that petitioners can find support
in the aforecited contractual stipulation and Wage Order
provision.
The Wage Orders are explicit that the payment of the
increases are to be borne by the principal or client.
To be borne, however, does not mean that the
principal, PTSI in this case, would directly pay the
security guards the wage and allowance increases
because there is no privity of contract between them.
The security guards contractual relationship is with
their immediate employer, EAGLE. As an employer,
EAGLE is tasked, among others, with the payment of
their wages.
Premises considered, the security guards immediate
recourse for the payment of the increases is with their
direct employer, EAGLE. However, in order for the
security agency to comply with the new wage and
allowance rates it has to pay the security guards, the
Wage Order made specific provision to amend existing
contracts for security services by allowing the
adjustments of the consideration paid by the principal to
the security agency concerned. What the Wage orders
require, therefore, is the amendment of the contract as
to the consideration to cover the service contractors
payment of the increases mandated. In the end,
therefore, ultimate liability for the payment of the
increasees rests with the principal.

The Wage Orders are statutory and mandatory
and can not be waived. The petitioner can not
escape liability since the law provides the joint
and solidary liability of the principal and the
contractor for the protection of the laborers.
But the Court here did not apply the Eagle case
because the petitioner is equally guilty by not
abiding to the law in the subsequent change of
contract even when the WO6 was already
implemented.
Therefore, security guards immediate recourse
is with direct employer but the latter is not
prejudiced as to the claim of of the wages it
shall give the guards.
Doctrine: Principal liable for Wage Orders
mandating wage increases. But when principal
cannot pay, contractor is the immediate recourse
and should pay the whole claim with right to
reimbursement from principal. But if contractor is
at fault, will be liable to of the claim.
11. Chavez v. NLRC
448 SCRA 478
Facts
Petitioner Pedro Chavez was hired as truck
driver of Private Respondent Supreme
Packaging, Inc.
Chavez requested to avail himself of the
benefits that a regular employees were
receiving but his request was denied
Chavez filed before NLRC a complaint for
regularization. Later on he was dismissed by
SPI
He later on filed an amended complaint for
illegal dismissal
Issue
1. W/N there existed an employer-employee
relationship between SPI and Chavez?
2. W/N Chavez is an independent contractor?
Held
1. Yes, there existed an employer-employee
relationship between SPI and Chavez
Applying four-fold test, all elements are
present
1. selection and engagement of the
employee
- it was SPI who engaged the services of
Chavez without intervention of third party
2. payment of wages
- that petitioner was paid on per trip basis is
not significant, this is merely a method of
computing compensation and not a basis
for determining the existence or absence of
er-ee relationship
3. power of dismissal
- power to dismiss was inherent in the fact
that they engaged the services of Chavez as
driver
4. power to control employee's conduct
- an employee is subject to employer's
power to control the means and method by
which the work is to be performed while an
independent contractor is free from control
and supervision of employer
* Manifestation of Power of Control of SPI
to Chavez
1. truck was owned by SPI
2. express instruction in the method of delivery
3. instruction on parking of delivery truck
4. instruction on when and where Chavez would
perform his task by issuing to him gate
passes and routing slips
2. Chavez is not and Independent Contractor
* Proof that Chavez is not an Independent
Contractor
1. Chavez did not own the truck
2. SPI did not have substantial capitalization or
investment
3. Delivery was exclusively done for SPI for
10years
* Er-Ee Relationship cannot be negated by
expressly repudiating it in contract and
providing therein that the employee is an
independent contractor. Indeed the
employment status of the person is defined
and prescribed by law and not by what
parties say it should be.
12. Aklan Electric Corp., Inc. v. NLRC, 323
SCRA 259 (2000)
Facts:
Employees working at Lezo but were told to transfer to
Kalibo but they did not transfer. Claiming salaries,
wages and benefits.
Issue: WON they are entitled to salaries and benefits.
Held: No. The employer gave orders to the employees
to transfer office because of the dangers the
environment poses to the company, yet the employees
disobeyed. Moreover, the transfer of office was
approved by NEA Administrator in its exercise of
supervision and control over all electric cooperatives.
When the business transferred, what was left to the
employees to work on? Thus no basis that the
employees continued to report for work in Lezo.
The age-old rule governing the relation between labor
and capital, or management and employee of a fair
days wage for a fair days labor remains as the basic
factor in determining employees wages. If there is no
work performed by the employee there can be no wage
or pay unless, of course, the laborer was able, willing
and ready to work but was illegally locked out,
suspended or dismissed, or otherwise illegally
prevented from working, a situation we find is not
present in the instant case. It would neither be fair nor
just to allow private respondents to recover something
they have not earned and could have not earned because
they did not render services at the Kalibo office during
the stated period.
13. INTERNATIONAL SCHOOL ALLIANCE
OF EDUCATORS (ISAE), petitioner, vs. HON.
LEONARDO A. QUISUMBING in his capacity as
the Secretary of Labor and Employment; HON.
CRESENCIANO B. TRAJANO in his capacity as
the Acting Secretary of Labor and Employment; DR.
BRIAN MACCAULEY in his capacity as the
Superintendent of International School-Manila; and
INTERNATIONAL SCHOOL, INC., respondents.,
G.R. No. 128845, June 1, 2000
FACTS:Private respondent International School, Inc.
(School), pursuant to PD 732, is a domestic educational
institution established primarily for dependents of
foreign diplomatic personnel and other temporary
residents. The decree authorizes the School to employ
its own teaching and management personnel selected by
it either locally or abroad, from Philippine or other
nationalities, such personnel being exempt from
otherwise applicable laws and regulations attending
their employment, except laws that have been or will be
enacted for the protection of employees. 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 grants foreign-hires certain benefits not
accorded local-hires. Foreign-hires are also paid a salary
rate 25% more than local-hires.
When negotiations for a new CBA were held on June
1995, petitioner ISAE, 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. This issue,
as well as the question of whether foreign-hires should
be included in the appropriate bargaining unit,
eventually caused a deadlock between the parties.
ISAE filed a notice of strike. Due to the failure to reach
a compromise in the NCMB, the matter reached the
DOLE which favored the School. Hence this petition.
ISSUE:
Whether the foreign-hires should be included in
bargaining unit of local- hires.
RULING:
NO. The Constitution, Article XIII, Section 3,
specifically provides that labor is entitled to humane
conditions of work. These conditions are not restricted
to the physical workplace the factory, the office or the
field but include as well the manner by which
employers treat their employees.
Discrimination, particularly in terms of wages, is
frowned upon by the Labor Code. Article 248 declares
it an unfair labor practice for an employer to
discriminate in regard to wages in order to encourage or
discourage membership in any labor organization.
The Constitution enjoins the State to protect the rights
of workers and promote their welfare, In Section 18,
Article II of the constitution mandates to afford labor
full protection. The State has the right and duty to
regulate the relations between labor and capital. These
relations are not merely contractual but are so impressed
with public interest that labor contracts, collective
bargaining agreements included, must yield to the
common good.
However, foreign-hires do not belong to the same
bargaining unit as the local-hires.
A bargaining unit is a group of employees of a given
employer, comprised of all or less than all of the entire
body of employees, consistent with equity to the
employer indicate to be the best suited to serve the
reciprocal rights and duties of the parties under the
collective bargaining provisions of the law.
The factors in determining the appropriate collective Issue:
bargaining unit are (1) the will of the employees (Globe
Doctrine); (2) affinity and unity of the employees
interest, such as substantial similarity of work and
Does wage distortion exist in this situation?
duties, or similarity of compensation and working
conditions (Substantial Mutual Interests Rule); (3) prior Ruling:
collective bargaining history; and (4) similarity of
employment status. The basic test of an asserted
bargaining units acceptability is whether or not it is Article 124 of the Labor Code defines
fundamentally the combination which will best assure wage distortion as a situation where an
to all employees the exercise of their collective increase in prescribed wage rates results in the
bargaining rights. elimination or severe contraction of intentional
quantitative differences in wage or salary rates
In the case at bar, it does not appear that foreign-hires between & among employee groups in an
have indicated their intention to be grouped together establishment as to effectively obliterate the
with local-hires for purposes of collective bargaining.
distinctions embodied in such wage structure
The collective bargaining history in the School also
shows that these groups were always treated separately. based on skills, length of service, or other
Foreign-hires have limited tenure; local-hires enjoy logical bases of differentiation.
security of tenure. Although foreign-hires perform
similar functions under the same working conditions as
the local-hires, foreign-hires are accorded certain The four elements of wage distortion are:
benefits not granted to local-hires such as housing,
transportation, shipping costs, taxes and home leave . 1) An existing hierarchy of positions
travel allowances. These benefits are reasonably related with corresponsing salary rates
to their status as foreign-hires, and justify the exclusion
of the former from the latter. To include foreign-hires in
a bargaining unit with local-hires would not assure
either group the exercise of their respective collective . 2) A significant change in the salary
bargaining rights. rate of a lower pay class without
concomitant increase
WHEREFORE, the petition is GIVEN DUE COURSE. in the salary rate of a higher one
The petition is hereby GRANTED IN PART.

. 3) The elimination of the distinction

14. Bankard Employees Union-Workers between the two levels
Alliance Trade Unions v. NLRC
Facts:
. 4) The existence of the distortion in
The Board of Directors of Bankard, Inc. the same region of the country.
approved a New Salary Scale which
increased the hiring rates of new employees.
Accordingly, the salaries of employees who Bankards wage structure is based on level,
fell below the new minimum rates were also and not seniority; hence there is no hierarchy
adjusted to reach such rates under their levels. of positions. Even assuming that there is a
decrease in the wage gap of the old and new
employees, the Court finds that the gap is not
Bankard Employees Union-WATU pressed nd
so significant so as to satisfy the the 2 and
for an increase in the salary of its old, regular rd
3 elements of wage distortion.
employees, but Bankard took the position that
it had no obligation to grant an across-the-
board salary increase. In addition, Article 124 (LC) refers to a
wage distortion resulting from a prescribed
 wage increase by virtue of a law or Wage Order
issued by any Regional Board. Clearly,
Bankards New Salary Scale is neither of the
two.
The mere factual existence of wage
distortion does not, ipso facto result to an
obligation to rectify it, absent a law or other
source of obligation which requires its
rectification. This Court will not step in to
interfere with Bankards management
prerogative.
The is no wage distortion in the instant case.
15. Arms Taxi v NLRC SCRA
16. Iran v. NLRC, 289 SCRA 433 (1998)
The case where the salesman and truck helpers received
commission for cases sold. Then there were
irregularities and the respondents were prompted to
report cash shortages. After a few days, they stopped
reporting for work, thus the conclusion of abandonment.
Terminated without notice.
On the other hand, complain for illegal dismissal,
deduction, underpayment of wages, premium pay for
holiday and rest day, holiday pay, incentive pay, etc.
Issue:
WON commissions in the computation of wages must
only be paid after the minimum wage has been paid, thus
excluding commissions in the computation for benefits
which rely on wage.
Held: No.
The Court has taken judicial notice of the fact that some
salesman do not receive any basic salary but depend
entirely on commissions and allowances or
commissions alone, although an employer-employee
relationship exists.
This salary structure is intended for the benefit of the
corporation establishing such, on the apparent
assumption that thereby its salesmen would be moved
to greater enterprise and diligence and close more sales
in the expectation of increasing their sales commission.
But this does not detract from the character of such
commissions as part of the salary or wage paid to each
of its salesmen for rendering services to the corporation.
There is no law mandating that commissions be paid
only after the minimum wage has been paid to the
employee. Verily, the establishment of a minimum
wage only sets a floor below which an employees
remuneration cannot fall, not that commissions are
excluded from wages in determining compliance with
the minimum wage law.
In one case it was acknowledged that drivers and
conductors who are compensated purely on a
commission basis are automatically entitled to the basic
minimum pay mandated by law should said commission
be less than their basic minimum for eight hours work.
It can thus be inferred that where said commissions
equal to or even exceed the minimum wage, the
employer need not pay, in addition, the basic minimum
pay prescribed by law. It follow then that commissions
are included in determining compliance with minimum
wage requirements.
17. Millares v. NLRC & PICOP, 305 SCRA 500
(1999)
18. Songco v. NLRC (1990)
G.R. Nos. 50999-51000 | 1990-03-23
Subject: Transportation and emergency living
allowances are included in the computation of
separation pay; Earned sales commissions are included
in the computation of separation pay; Judicial Notice:
some salesmen do not receive any basic salary but
depend on commissions and allowances or commissions
alone; Commissions must be earned by actual market
transactions attributable to the employee; All doubts in
the implementation and interpretation of the provisions
of the Labor Code shall be resolved in favor of labor
Facts:
F.E. Zuellig (M), Inc., filed with the Department of
Labor an application seeking clearance to terminate the
services of Jose Songco, Romeo Cipres, and Amancio
Manuel allegedly on the ground of retrenchment due to
financial losses. This application was seasonably
opposed by the employees alleging that the company is
not suffering from any losses.

Songco, Cipres and Manile alleged that they are being
dismissed because of their membership in the union. At
the last hearing of the case, they manifested that they are
no longer contesting their dismissal. However, they
argued that they should receive separation pay.
Under the employment contract, each of the dismissed
employees receive a monthly salary of P40,000 plus
commissions for every sale they made. On the other
hand, the CBA entered between Zuellig and the union
contained the provision that an employee who is
permanent lay-off, should receive an amount equivalent
to one month's salary per year of service. On the other
hand, Article 284 of the Labor Code and Implementing
Rules provide that the retrenched employees should
receive a separation pay equivalent to one month pay or
at least one-half month pay for every year of service,
whichever is higher.
The dismissed employees alleged that their earned sales
commission should be included in their monthly salary
for the purpose of computation of their separation pay.
In defense, Zuellig argued that if it were really the
intention of the Labor Code to include commission in
the computation of separation pay, it could have
explicitly said so in clear and unequivocal terms.
Furthermore, in the definition of the term "wage",
"commission" is used only as one of the features or
designations attached to the word remuneration or
earnings.
The Labor Arbiter ordered the company to pay the
dismissed employees their separation pay equivalent to
their one month salary (exclusive of commissions,
allowances, etc.) for every year of service. The NLRC
affirmed the Labor Arbiters decision.
Held:
Transportation and emergency living allowances are
included in the computation of separation pay
1. In the computation of backwages and separation pay,
the transportation and emergency living allowances
should also be taken together with the basic salary. (See
Santos v. NLRC)
Earned sales commissions are included in the
computation of separation pay
2. Article 97(f) of the Labor Code is explicit
that commission is included in the definition of the term
"wage". It has been repeatedly declared that where the
law speaks in clear and categorical language, there is no
room for interpretation or construction but only for
application.
3. The words salary and wage are generally refer to
one and the same meaning, that is, a reward or
recompense for services performed. Likewise, "pay" is
the synonym of "wages" and "salary". Since the words
"wages", "pay" and "salary" have the same meaning,
and commission is included in the definition of "wage",
it only follows that in the computation of the separation
pay, the salary base should also include the earned sales
commissions.
4. Whether the commissions were in the form of
incentives or encouragement, still these are direct
remuneration services rendered and contributed to the
increase of income of Zuellig .
Judicial Notice: some salesmen do not receive any
basic salary but depend on commissions and
allowances or commissions alone
5. Commission is the recompense, 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 commissions are part of their wage or
salary.
6. The Supreme Court took judicial notice of the fact
that some salesmen do not receive any basic salary but
depend on commissions and allowances or commissions
alone, although an employer-employee relationship
exists.
Commissions must be earned by actual market
transactions attributable to the employee
7. The commissions also claimed ('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 the employee. (See Soriano
v. NLRC)
8. In the instant case, since the commissions were
earned by actual market transactions attributable to the
employees, 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.
All doubts in the implementation and interpretation
of the provisions of the Labor Code shall be resolved
in favor of labor
9. It should always be the final consideration that in
carrying out and interpreting the Labor Code's
provisions and its implementing regulations, the
workingman's welfare should be the primordial and
paramount consideration. This kind of interpretation
gives meaning and substance to the liberal and
compassionate spirit of the law as provided for in
Article 4 of the Labor Code and Article 1702 of the Civil
Code that all doubts in the implementation and
interpretation of the provisions of the Labor Code shall
be resolved in favor of labor. (See Abella v. NLRC)
19. Boie-Takeda Chemicals, Inc. vs. de la Serna
228 SCRA 329, Dec. 10, 1993
Facts: P.D. No. 851 provides for the Thirteen-Month
Pay Law. Under Sec. 1 of said law, all employers are
required to pay all their employees receiving basic
salary of not more than P 1,000.00 a month, regardless
of the nature of the employment, and such should be
paid on December 24 of every year. The Rules and
Regulations Implementing P.D. 851 contained
provisions defining 13-month pay and basic salary
and the employers exempted from giving it and to
whom it is made applicable. Supplementary Rules and
Regulations Implementing P.D. 851 were subsequently
issued by Minister Ople which inter alia set items of
compensation not included in the computation of 13-
month pay. (overtime pay, earnings and other
remunerations which are not part of basic salary shall
not be included in the computation of 13-month pay).
Pres. Corazon Aquino promulgated on August 13, 1985
M.O. No. 28, containing a single provision that modifies
P.D. 851 by removing the salary ceiling of P 1,000.00 a
month. More than a year later, Revised Guidelines on
the Implementation of the 13-month pay law was
promulgated by the then Labor Secretary Franklin
Drilon, among other things, defined particularly what
remunerative items were and were not included in the
concept of 13-month pay, and specifically dealt with
employees who are paid a fixed or guaranteed wage
plus commission or commissions were included in the
computation of 13th month pay)
A routine inspection was conducted in the
premises of petitioner. Finding that petitioner had not
been including the commissions earned by its medical
representatives in the computation of their 1-month
pay, a Notice of Inspection Result was served on
petitioner to effect restitution or correction of the
underpayment of 13-month pay for the years, 1986 to
1988 of Medical representatives. Petitioner wrote the
Labor Department contesting the Notice of Inspection
Results, and expressing the view that the commission
paid to its medical representatives are not to be
included in the computation of the 13-moth pay since
the law and its implementing rules speak of REGULAR
or BASIC salary and therefore exclude all
remunerations which are not part of the REGULAR
salary. Regional Dir. Luna Piezas issued an order for the
payment of underpaid 13-month pay for the years
1986, 1987 and 1988. A motion for reconsideration was
filed and the then Acting labor Secretary Dionisio de la
Serna affirmed the order with modification that the
sales commission earned of medical representatives
before August 13, 1989 (effectivity date of MO 28 and
its implementing guidelines) shall be excluded in the
computation of the 13-month pay.
Similar routine inspection was conducted in
the premises of Phil. Fuji Xerox where it was found
there was underpayment of 13th month pay since
commissions were not included. In their almost
identically-worded petitioner, petitioners, through
common counsel, attribute grave abuse of discretion to
respondent labor officials
Hon. Dionisio dela Serna and Undersecretary
Cresenciano B. Trajano.
ISSUE: Whether or not commissions are included in the
computation of 13-month pay
HELD: NO. Contrary to respondents contention, M.O
No. 28 did not repeal, supersede or abrogate P.D. 851.
As may be gleaned from the language of MO No. 28, it
merely modified Section 1 of the decree by removing
the P 1,000.00 salary ceiling. The concept of 13th
Month pay as envisioned, defined and implemented
under P.D. 851 remained unaltered, and while
entitlement to said benefit was no longer limited to
employees receiving a monthly basic salary of not more
than P 1,000.00 said benefit was, and still is, to be
computed on the basic salary of the employee-
recipient as provided under P.D. 851. Thus, the
interpretation given to the term basic salary was
defined in PD 851 applies equally to basic salary
under M.O. No. 28. The term basic salary is to be
understood in its common, generally accepted
meaning, i.e., as a rate of pay for a standard work
period exclusive of such additional payments as
bonuses and overtime. In remunerative schemes
consists of a fixed or guaranteed wage plus
commission, the fixed or guaranteed wage is patently
the basic salary for this is what the employee receives
for a standard work period. Commissions are given for
extra efforts exerted in consummating sales of other
related transactions. They are, as such, additional pay,
which the SC has made clear do not from part of the
basic salary.
Moreover, the Supreme Court said that, including
commissions in the computation of the 13th month
pay, the second paragraph of Section 5(a) of the
Revised Guidelines on the Implementation of the 13th
Month Pay Law unduly expanded the concept of "basic
salary" as defined in P.D. 851. It is a fundamental rule
that implementing rules cannot add to or detract from
the provisions of the law it is designed to implement.
Administrative regulations adopted under legislative
authority by a particular department must be in
harmony with the provisions of the law they are
intended to carry into effect. They cannot widen its
scope. An administrative agency cannot amend an act
of Congress.
20. Philippine Duplicators, Inc. vs. NLRC, 241
SCRA 380 (1995)
Posted by Pius Morados on November 10, 2011
(Labor Standards Commissions included in the
computation of 13th month pay)
Facts: Petitioner Corporation pays its salesmen a small
fixed or guaranteed wage; the greater part of the latters
wages or salaries being composed of the sales or
incentive commissions earned on actual sales of
duplicating machines closed by them. Thus the sales
commissions received for every duplicating machine
sold constituted part of the basic compensation or
remuneration of the salesmen of the Philippine
Duplicators for doing their job.
The Labor Arbiter directed Petitioner Duplicators to pay
13th month pay to private respondent employees
computed on the basis of their fixed wages plus sales
commission.
Sec. 4 of the Supplementary Rules and Regulations
Implementing PD No. 851 (Revised Guidelines
Implementing 13th Month Pay) provides that overtime
pay, earning and other remuneration which are not part
of the basic salary shall not be included in the
computation of the 13th month pay.
Petitioner Corporation contends that their sales
commission should not be included in the computation
of the 13th month pay invoking the consolidated cases of
Boie-Takeda Chemicals, Inc. vs Hon. Dionisio dela
Serna and Philippine Fuji Xerox Corp. vs Hon.
Crecencio Trajano, were the so-called commissions of
medical representatives of Boie-Takeda Chemicals and
rank-and-file employees of Fuji Xerox Co. were not
included in the term basic salary in computing the
13th month pay.
Issue: WON sales commissions comprising a pre-
determined percent of the selling price of the goods are
included in the computation of the 13th month pay.
Held: Yes. These commission which are an integral part
of the basic salary structure of the Philippine
Duplicators employees-salesmen, are not overtime
payments, nor profit-sharing payments nor any other
fringe benefit. Thus, salesmens commissions
comprising a pre-determined percent of the selling price
of the goods were properly included in the term basic
salary for purposes of computing the 13th month pay.
Commissions of medical representatives of Boie-
Takeda Chemicals and rank-and-file employees of Fuji
Xerox Co. were not included in the term basic salary
because these were paid as productivity bonuses
which is not included in the computation of 13th month
pay.
21. PLASTIC TOWN CENTER
CORPORATION, petitioner, vs. NATIONAL
LABOR RELATIONS COMMISSION AND
NAGKAKAISANG LAKAS NG MANGGAGAWA
(NLM)-KATIPUNAN, respondents.
Facts:
On September 1984, respondent Nagkakaisang Lakas
ng Manggagawa (NLM)-Katipunan filed a complaint
against petitioner Plastic Town Center Corporation
with:
violation of CBA by crediting the P1 per day increase
in gratuity pay to resigning employees instead of 30
days equivalent to one month
unfair labor practice by giving only 26 days pay
instead of 30 days equivalent to one month as gratuity
pay to resigning employees.
In the CBA, it was provided that:
Company agreed to grant regular workers who rendered
at least one year of continuous service of P1 per worked
day.
Company to grant gratuity pay to a resigning employee
or laborer amounting to, among others, one month
salary for those who rendered two to five years of
service.
Plastic Town Center Corporation maintained that under
the principle of fair days wage for fair days labor,
gratuity pay should be computed on the basis of 26 days
for one month salary considering that the employees are
daily paid.
Labor Arbiter: Ruled in favor of NLM Union. As daily
wage earner, there would be no instance that the worker
would work for 30 days a month since work does not
include Sunday or rest days.
NLRC: Reversed the decision of Labor Arbiter and
held that PTC should grant gratuity pay equivalent of
thirty days salary.
Issue:
Whether the PTCs contention that the gratuity pay
should be computed on the basis of 26 days for one
month salary instead of 30 days is valid.
Held:
No, PTCs contention does not hold merit in this case.
Gratuity pay is not intended to pay a worker for actual
services rendered. It is a money benefit given to the
workers whose purpose is to reward employees or
laborers who have rendered satisfactory and efficient
service to the company.
While it may be enforced once it forms part of a
contractual undertaking, the grant of such benefit is not
mandatory so as to be considered a part of labor standard
law unlike salary, which are covered in Labor Code.
Nowhere has it ever been stated that gratuity pay should
be based on actual number of days worked over the
period of years forming its basis. Court saw no point in
counting the number of days worked over a ten-year
period to determine the meaning of two and one- half
months gratuity.
Moreover any doubts or ambiguity in the contract
between management and the union members should be
resolved in favor of the laborer. When months are not
designated by name, a month is understood to be 30
days.
As such, NLRC did not act with grave abuse of
discretion when it decided that the gratuity pay should
be equivalent to 30 days.
WHEREFORE, the petition is hereby DISMISSED for
lack of merit.
22. Davao Fruits Corporation vs Associated
Labor Unions, G.R. No. 85073, August 24, 1993; 225
SCRA 562
Posted by Pius Morados on November 10, 2011
(Labor Standards Fringe benefits not included in
13th month pay)
Facts: Respondent ALU for and in behalf of all the
rank-and-file workers and employees of petitioner
sought to recover from the latter the 13th month pay
differential for 1982 of said employees, equivalent to
their sick, vacation and maternity leaves, premium for
work done on rest days and special holidays, and pay for
regular holidays which petitioner, allegedly in disregard
of company practice since 1975, excluded from the
computation of the 13th month pay for 1982.
Issue: WON in the computation of the 13th month pay
under PD No. 851, payments for sick, vacation and
maternity leaves, premiums for work done on rest days
and special holidays, and pay for regular holidays may
be excluded in the computation and payment thereof.
Held: Yes. Basic salary does not merely exclude the
benefits expressly mentioned but all payments which
may be in the form of fringe benefits or allowances.
Sec. 4 of the Supplementary Rules and Regulations
Implementing PD No. 851 provides that overtime pay,
earnings and other remunerations which are not part of
the basic salary shall not be included in the computation
of the 13th month pay.
Whatever compensation an employee receives for an 8
hour work daily or the daily wage rate is the basic salary.
Any compensation or remuneration other than the daily
wage rate is excluded. It follows therefore, that
payments for sick, vacation and maternity leaves,
premiums for work done on rest days and special
holidays, as well as pay for regular holidays, are
likewise excluded in computing the basic salary for the
purpose of determining the 13th month pay.
23. Nasipit Lumber Company Inc. v NLRC
SCRA
SALARY-CEILING METHOD
24. EMPLOYERS CONFEDERATION OF THE
PHILIPPINES, petitioner, vs. NATIONAL WAGES
AND PRODUCTIVITY COMMISSION AND
REGIONAL TRIPARTITE WAGES AND
PRODUCTIVITY BOARD-NCR, TRADE UNION
CONGRESS OF THE PHILIPPINES, respondents.
J. SARMIENTO; September 24, 1991
FACTS
On October 15, 1990, the Regional Board of NCR
issued Wage Order No. NCR-01, increasing the
minimum wage by P17 daily.
The Trade Union Congress of the Philippines
(TUCP) and Personnel Management Association of
the Philippines (PMAP) moved for reconsideration.
Petitioner Employers Confederation of the
Philippines (ECOP) opposed.
Board then issued Wage Order No. NCR-01-A,
amending the wage order by stating that all workers
and employees in the private sector already
receiving wages above the statutory minimum
wage rates up to P125 per day shall also receive the
P17 daily increase.
Petitioner ECOP appealed to respondent National
Wages and Productivity Commission (NWPC).
NWPC: Appeal dismissed for lack of merit.
Motion for reconsideration denied. Hence, this
petition.
ISSUE:
Whether or not respondent NWPC committed grave
abuse of discretion. NO.
REASONING:
Petitioner says
Wage Order No. NCR-01-A is an excess of
authority as under RA 6727, the boards may
only prescribe minimum wages, not
determine salary ceilings.
RA 6727 is meant to promote collective
bargaining as the primary mode of settling
wages, so boards cannot preempt CBAs by
establishing ceilings
Boards may only adjust floor wages
Solicitor-General (for NWPC) comments
The across-the-board hike did not grant
additional or other benefits to workers and
employees, but rather fixed minimum wages
according to the salary-ceiling method
RA 6727 is to correct wage distortions and
the salary-ceiling method does just that
Court rules
The Court is inclined to agree with the Government.
The NWPC noted that the determination of wages
involved 2 methods: the floor-wage method and the
salary-ceiling method.
Floor-wage method- involves the fixing of a
determinate amount that would be added to the
prevailing statutory minimum wage
-adopted in earlier wage orders
Salary-ceiling method- wage adjustment is applied to
employees receiving a certain denominated salary
ceiling
-used in RAs 6640 and 6727 as well as 11
COLA issuances
The shift is due to the labor disputes arising from wage
distortions.
RA 6727 was intended to rationalize wages.
This is done by:
1. providing full-time boards to police wages
round-the-clock
2. giving the boards enough power to achieve this
objective
SO, if RA 6727 only intended boards to set floor wages
only, the Act would not need a board but only an
accountant to keep track of the latest consumer price
index or have Congress do it when the need arises.
The Board did not perform an unlawful act of
legislation.
Congress may delegate he power to fix rates, provided
that it leaves sufficient standards. RA 6727 gave
statutory standards for fixing the minimum wage.
ART. 124. Standards/Criteria for Minimum Wage
Fixing The regional minimum wages to be
established by the Regional Board shall be as nearly
adequate as is economically feasible to maintain the
minimum standards of living necessary for the health,
efficiency and general well-being of the employees
within the framework of the national economic and
social development program. In the determination of
such regional minimum wages, the Regional Board
shall, among other relevant factors, consider the
following:
(a) The demand for living wages;
(b) Wage adjustment vis-a-vis the consumer price
index;
(c) The cost of living and changes or increases
therein;
(d) The needs of workers and their families;
(e) The need to induce industries to invest in the
countryside;
(f) Improvements in standards of living;
(g) The prevailing wage levels;
(h) Fair return of the capital invested and capacity
to pay of employers;
(i) Effects of employment generation and family
income; and
(j) The equitable distribution of income and
wealth along the imperatives of economic and social
development."
The wage order was not acted in excess of boards
authority. The law gave reasonable limitations to the
delegated power of the board.
ECOP is of the mistaken impression that RA 6727
leaves labor and management alone to decide wages.
The Court does not believe RA 6727 is meant to
deregulate the relation between labor and capital for
several reasons:
1. The Constitution calls upon the State to protect
labor
2. The Constitution calls upon the State to
intervene when the common goal so demands
I regulating property and property relations
3. The Charter urges Congress to diffuse the
wealth of the nation and regulate the use of
property
4. The Charter recognizes the just share of labor
in the fruits of production
5. Under the LC, the State shall regulate the
relations between labor and management
6. Under RA 6727, the State is interested in
seeing that workers receive fair and equitable
wages
7. The Constitution is primarily a document of
Social Justice and has not fully embraced the
concept of laissez-faire
Court cannot give an Act a meaning that will conflict
with these basic principles.
The concept of minimum wage is more than setting of a
floor wage to upgrade existing wages as ECOP believes.
Minimum wages underlies the rationales of RA 6727
and the Constitution.
The salary-cap method serves the purposes of RA 6727.
Whether or not it is a permanent policy of the Board s a
question we may only speculate. At the moment, it is a
reasonable policy.
Dispositive: Petition denied.
25. Cagayan Sugar Milling Co. v. Secretary of
Labor and Employment, 284 SCRA 150 (1998)
SCRA
26. Prubankers Association v. Prudential Bank &
Trust Co. (1999)
Ponente: Panganiban, J.
Petitioners: Prubankers Association
Respondents: Prudential Bank & Trust Co.
Facts:
1. On Nov 18 1993 the Regional Tripartite Wages
and Productivity Board of Region V issued
Wage Order No. RB 05-03 which provided for
a Cost of Living Allowance (COLA) to
workers in the private sector who had
rendered service for at least 3 months before
its effectivity, and for the same period
thereafter, in the following categories:
P17.50 in Naga & Legaspi;
P15.50 in the municipalities of
Tabaco, Daraga & Pili and the city of
Iriga;
P10.00 in all other areas of the Bicol
Region.
On Nov 23 1993 the Regional Tripartite
Wages and Productivity Board of
Region VII issued Wage Order No. RB VII-03,
which directed the integration of the COLA
mandated pursuant to Wage Order No. RO
VII-02-A into the basic pay of all workers.
The wage order also called for an increase in
the minimum wage rates for all workers
and and employees in the private sector as
follows:
P10.00 in Cebu, Mandaue &
Lapulapu;
P5.00 in the municipalities of
Compostela, Liloan, Consolacion,
Cordova, Talisay, Minglanilla, Naga
and the cities of Davao, Toledo,
Dumaguete, Bais, Canlaon and
Tagbilaran.
2. Pursuant to the said wage orders, RESP
granted a COLA of P17.50 to its employees at
its Naga branch and integrated the P150.00 per
month COLA into the basic pay of its rank-
and-file employees at its Cebu, Mabolo and
P. del Rosario branches.
3. On June 7 1994, PET wrote to RESP
requesting that a Labor Management
Committee be convened to discuss and resolve
the wage distortions that resulted from the
implementation of the wage orders. PET also
 demanded that PET extend the application of
the wage orders to its employees outside
Region V & Region VII, claiming that the
regional implementation of the said orders
resulted in a wage distortion.
4. As the matter could not be settled by both
parties, both agreed to submit the matter to
voluntary arbitration.
VA: Ruled that the regional implementation of
the wage orders by PET resulted in a wage
distortion nationwide which should be
resolved in accordance with Art. 124 of Labor
Code.
CA: Ruled that there was no wage distortion
on the following grounds:
The variance in the salary rates in
different regions are justified by R.A.
6727.
The distinctions between each
employee group in the region are
maintained, as all employees were
granted an increase in minimum wage
rate.
PETs contentions: RESPs regional
implementation:
1. A wage distortion exists, because the
implementation of the two Wage
Orders has resulted in the
discrepancy in the compensation of
employees of similar pay
classification in different regions.
2. Implementation violated the principle
of equal work, equal pay;
3. RESP-Bank when it adopted a
uniform wage policy has sufficiently
established a management practice
thus, it is estopped from
implementing a wage order for a
specific region only.
Issue/s:
1. WON PET is guilty of forum shopping?
2. WON a wage distortion resulted from RESPs
implementation of the aforecited Wage
Orders?
Held + Rationale:
1. YES. PET failed to comply with Section 2
of Rule 42 of the Rules of Court, which
requires that parties must certify under oath
that they have not commenced any other
action involving the same issues in the
Supreme Court, the Court of Appeals, or
different divisions thereof, or any other
tribunal or agency... as PET failed to inform
the SC that an action involving the same parties
and issues allegedly similar to those raised in
the present controversy, NCMB-NCR-RVA-
O4-012-97 (In Re: Voluntary Arbitration
between Prudential Bank and Prubankers
Association) is pending.
2. NO. There was no wage distortion as there is
no wage parity between employees in different
rungs, instead there is a wage disparity
between employees in the same rung but
located in different regions of the country.
Art. 124 of LC gives the statutory definition of
wage distortion: a wage distortion shall
mean a situation where an increase in
prescribed wage results in the elimination of
severe contraction of intentional quantitative
differences in wage or salary rates between
and among employee groups in an
establishment as to effectively obliterate the
distinctions embodied in such wage structure
based on skills, length of service, or other
logical bases of differentiation.
Wage distortion involves 4 elements:
1. An existing hierarchy of positions
with corresponding salary rates;
2. A significant change in the salary
rate of a lower pay class without a
concomitant increase in the salary
rate of a higher one;
3. The elimination of the distinction
between the two levels; and
4. The existence of the distortion in the
same region of the country.

In the case at bar, there is no wage distortion
because elements 2 and 3 are missing. First,
the implementation of the wage orders in the
covered branches resulted in an increase in
the salary rates of all pay classes. Also, the
quantitative difference in compensation
between the pay classes remained the same in
all branches in the affected region hence the
hierarchy of positions based on skills, length of
service and other logical bases of
differentiation was preserved.
Answer to PETs contentions:
1. A disparity in wages between
employees holding similar positions
but in different regions does not
constitute wage distortion as
contemplated by law. Different
regional wages are mandated by the
law (specifically RA 6727) as there is
recognition that there exist regional
disparities in the cost of living. RA
6727 recognizes that there are
different needs for the different
situations in different regions of the
country.
2. Equal pay, equal work contention:
RA 6727 mandates that wages in
every region must be set by the
particular wage board of that region,
based on the prevailing situation
therein. Necessarily, the wages in
different regions will not be uniform.
Thus, under RA 6727, the minimum
wage in Region 1 may be different
from that in Region 13, because
the socioeconomic conditions in the
two regions are different.
3. Management practice contention:
Said nationwide uniform wage policy
of the Bank had been adopted prior to
the enactment of RA 6727. After the
passage of said law, the Bank was
mandated to regionalize its wage
structure.
Dispositive: Petition is DENIED and CAs decision is
AFFIRMED.
27. DOMINICO C. CONGSON, petitioner, vs.
NATIONAL LABOR RELATIONS COMMISSION, NOE
BARGO, ROGER HIMENO, RAYMUNDO BADAGOS,
PATRICIO SALVADOR, SR., NEHIL BARGO, JOEL
MENDOZA, and EMMANUEL CALIXIHAN, respondents
G.R. No. 114250 (April 5, 1995)
FACTS:
Petitioner is the registered owner of Southern
Fishing Industry. Private respondents were hired on
various dates by petitioner as regular piece-rate
workers. They were uniformly paid at a rate of P1.00
per tuna weighing thirty (30) to eighty (80) kilos per
movement, that is from the fishing boats down to
petitioner's storage plant at a load/unload cycle of
work until the tuna catch reached its final
shipment/destination. They worked seven (7) days a
week.During the first week of June 1990, petitioner
notified his workers of his proposal to reduce the rate-
per-tuna movement due to the scarcity of tuna. Private
respondents resisted petitioner's proposed rate
reduction. When they reported for work the next day,
they were informed that they had been replaced by a
new set of workers, When they requested for a
dialogue with the management, they were instructed
to wait for further notice. They waited for the notice of
dialogue for a full week but in vain.
No amicable settlement was reached between
the parties before the Labor Arbiter. Petitioner sought
recourse with the NLRC. Petitioner admits that the
P1.00-per-tuna movement is the actual wage rate
applied to private respondents as expressly agreed
upon by both parties. Petitioner further admits that
private respondents, per their request, were entitled to
retrieve the tuna intestines and liver as part of their
compensation and even exceeded what was provided
under the Minimum Wage Law.
ISSUES:
1) Whether or not petitioner complied with the
Minimum Wage Law regarding their form of payment.
2) Did the Court err in granting separation pay to the
private respondents.
HELD:
1) NO. The Labor Code expressly provides:
Article 102. Forms of Payment. No.
employer shall pay the wages of an
employee by means of, promissory
notes, vouchers, coupons, tokens
tickets, chits, or any object other
than legal tender,even when
expressly requested by the employee.
 Payment of wages by check or money
order shall be allowed when such
manner of payment is customary on
the date of effectivity of this Code, or
is necessary as specified in
appropriate regulations to be issued
by the Secretary of Labor or as
stipulated in a collective bargaining
agreement.
Undoubtedly, petitioner's practice of paying
the private respondents the minimum wage by means
of legal tender combined with tuna liver and intestines
runs counter to the above cited provision of the Labor
Code. The fact that said method of paying the minimum
wage was not only agreed upon by both parties in the
employment agreement but even expressly requested
by private respondents, does not shield petitioner.
Article 102 of the Labor Code is clear. Wages shall be
paid only by means of legal tender. The only instance
when an employer is permitted to pay wages informs
other than legal tender, that is, by checks or money
order, is when the circumstances prescribed in the
second paragraph of Article 102 are present.
2) NO. A careful scrutiny of the records of the case at
bench, however, readily discloses the existence of
strained relationship between the petitioner and
private respondents.Firstly, petitioner consistently
refused to re-admit private respondents in his
establishment. Petitioner even replaced private
respondents with a new set of workers to perform the
tasks of private respondents. And secondly, private
respondents themselves, from the very start, had
already indicated their aversion to their continued
employment in petitioner's establishment. The very
filing of their second case before Labor Arbiter
Aponesto (RAB-1 1-07-90179-90) specifically for
separation pay is conclusive of private respondents'
intention to sever their working ties with petitioner.
28. EUFROCIO BERMISO, ET AL., petitioners, vs.
HIJOS DE F. ESCAO, INC., ET AL., respondents.
FACTS:
Petitioners instituted an action before the Court of
Industrial Relations, praying for reinstatement with
back wages, direct payment of wages to the laborers
instead of through the union, payment of accrued
overtime pay and wage differentials, prohibition from
carrying load in excess of 50 kilos, minimum daily wage
of P5.00, vacation and sick leave, free hospitalization,
accident insurance, free choice of labor union and
grievance committee.
Of the original petitioners only five continued to take
interest in the action, the other having desisted
therefrom. After hearing the Court of Industrial
Relations ordered the reinstatement of the said five
laborers to their former work and positions in the
Sabay group, but without back wages, but dismissed
the other claims.
Petitioners argue that the decision violates the law on
direct payment of wages.
ISSUE:
Whether the payment of wages must be directly paid
to the workers.
HELD:
Payment of wages to a leader of group is not in
violation of direct payment since the contract to
perform the services was made by the leader of the
group, for and in behalf of the latter, not for each and
every one of them individually.
As the group undertook to render service for vessels
other than those of the Escao, it was absolutely
necessary that some sort of leadership be instituted in
the group to determine which of the members will
work for one vessel and which for another. Leadership
is also essential to obtain work for the group as
employers naturally prefer to deal with a leader of a
group than with each member individually. Leadership
was, therefore, essential not only to secure work for
the group but to arrange the laborers who are to
perform the service. The leadership must be paid for
and it was not shown that the head of the groups got
the lion's share of the cost of the service rendered.
Under the circumstances that the provision of law on
direct payment of wages has been violated.
29. ERNESTO M. APODACA, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, JOSE M.
MIRASOL and INTRANS PHILS., INC., respondents.
G.R. No. 80039 April 18, 1989
GANCAYCO, J.:
FACTS: Petitioner was employed in respondent
corporation. He was persuaded by respondent Mirasol
to subscribe to 1,500 shares or for a total of
P150,000.00. He paid P37,500.00. On September 1,
1975, petitioner was appointed President and General
Manager of the respondent corporation. However, on
January 2, 1986, he resigned. petitioner instituted with
the NLRC a complaint against private respondents for
the payment of his unpaid wages, his cost of living
allowance, the balance of his gasoline and
representation expenses and his bonus compensation
for 1986. Private respondents admitted that there is
due to petitioner the amount of P17,060.07 but this
was applied to the unpaid balance of his subscription in
the amount of P95,439.93. Petitioner questioned the
set-off alleging that there was no call or notice for the
payment of the unpaid subscription and that,
accordingly, the alleged obligation is not enforceable.
ISSUES: (1) Whether or not NLRC has jurisdiction to
resolve a claim for non-payment of stock subscriptions
to a corporation. (2) If so, whether or not an obligation
arising therefrom be offset against a money claim of an
employee against the employer.
RULING: (1) NLRC has no jurisdiction to determine such
intra-corporate dispute between the stockholder and
the corporation as in the matter of unpaid
subscriptions. This controversy is within the exclusive
jurisdiction of the Securities and Exchange
Commission.
(2) No. the unpaid subscriptions are not due and
payable until a call is made by the corporation for
payment. Private respondents have not presented a
resolution of the board of directors of respondent
corporation calling for the payment of the unpaid
subscriptions. It does not even appear that a notice of
such call has been sent to petitioner by the respondent
corporation. As there was no notice or call for the
payment of unpaid subscriptions, the same is not yet
due and payable.
Even if there was a call for payment, the NLRC cannot
validly set it off against the wages and other benefits
due petitioner. Article 113 of the Labor Code allows
such a deduction from the wages of the employees by
the employer, only in three instances.
30. Dentech vs. NLRC
172 SCRA 588 | April 19, 1989
Facts:
Benjamin Marbella, Armando Torno, Juanito Tajan,
Jr. and Joel Torno were employed as welders,
upholsterers and painters by of Dentech
Manufacturing Corporation, a firm engaged in the
manufacture and sale of dental equipment and
supplies. However, they were dismissed from the
firm due to their alleged abandonment of their work
without informing the company about their reasons
fordoing so. Marbella et al filed a complaint with
the arbitration branch of the NLRC for illegal
dismissal and violation of Presidential Decree No.
851. Among other things they sought the payment of
the cash bond they filed with the company at the
start of their employment.
Issue:
Whether or not Marbella et al are entitled to the
refund of the cash bond they filed with Dentech at
the start of their service.
Held:
The Court held that refund of the cash bond filed by
Marbella et al is in order.Article 114 of the Labor
Code prohibits an employer from requiting his
employees to file a cashbond or to make deposits,
subject to certain exceptions: "when the employer is
engaged in such trades, occupations or business
where the practice of making deductions or
requiring deposits is a recognize done, or is
necessary or desirable as determined by the
Secretary of Labor in appropriate rules and
regulations."Dentech have not satisfactorily
disputed the applicability of this provision of the
Labor Code tothe case at bar and further failed to
show that the company is authorized by law to
require the private respondents to file the cash bond
in question. Its to the effect that the proceeds of the
cash bond had already been given to a certain
carinderia to pay for the accounts of the private
respondents there in does not merit serious
consideration. In fact, no evidence or receipt has
been shown to prove such payment.
31. Five J Taxi vs NLRC
Facts:
- Private Respondent Maldigan and Sabsalon
was hired by the Petitioner Company as taxi
drivers. The contract was composed of a 24-
hour shifting sched on 4 days. They had to
make a boundary from 450 (non aircon) and
700 (aircon), adding to that are car washing
expense and deposit for any deficiency in the
boundary
- Petitioner learned Maldigan has been working
for another taxi company, while Sabsalon was
held up by armed passengers.
- Sabsalon went back to work but failed to report
on several occasions, even leaving his taxi, and
failing to remit his boundary mark
- Respondents requested for the reimbursements
of their respective deposits, but petitioner
refused because of the repairs incurred by their
vehicles.
- Respondent now files complaint for illegal
dismissal and deduction
Issue:
- W/N deductions were illegal.
Held:
- Yes, the deposits made were illegal
- Article 114 of the Labor Code provides as
follows:
Deposits for loss or damage. No employer
shall require his worker to make deposits from
which deductions shall be made for the
reimbursement of loss of or damage to tools,
materials, or equipment supplied by the
employer, except when the employer is
engaged in such trades, occupations or
business where the practice of making
deposits is a recognized one, or is necessary or
desirable as determined by the Secretary of
Labor in appropriate rules and regulations.
32. SOUTH MOTORISTS v. TOSOC
SOUTH MOTORISTS ENTERPRISES, petitioner, vs.
ROQUE TOSOC, ET AL. (46 employees in total),
and HON. SECRETARY OF LABOR AND
EMPLOYMENT, respondents.
January 23, 1990
WAGE PROHIBITIONS: Prohibition against
keeping of employees records in a place other
than the workplace
FACTS
In January of 1983, complaints for non-
payment of emergency cost of living
allowances were filed by 46 workers, Tosoc,
et al., against SOUTH MOTORISTS before
the Naga City District Office of Regional
Office No. 5 of the then Ministry of Labor.
The Labor Regulation Officers were ordered
by the District Labor Officer to conduct an
inspection and verification of SOUTH
MOTORISTS' employment records. However,
SOUTH MOTORISTS was unable to present
its employment records on the allegation that
they had been sent to the main office in
Manila.
The case was then set for conference on 25
January 1983 but had to be reset 3 times: 1st to
enable SOUTH MOTORISTS to present all its
employment records; 2nd because of its
lawyer's tight schedule; and 3rd because of the
alleged voluminous records it had to locate and
its desire to submit a memorandum regarding
complainants' claims. However, on 2 March
1983, SOUTH MOTORISTS once again
requested an extension of 30 days on the
ground that the documents were still being
prepared and collated and that a formal
manifestation or motion would follow.
Nothing did.
On 7 March 1983, the assigned Labor
Regulation Officers submitted an Inspection
Report on the basis of which an Order dated
14 April 1983 was issued by Labor Officer
Domingo Reyes directing SOUTH
MOTORISTS to pay Tosoc, et al., the total
amount of P184,689.12 representing the latter's
corresponding emergency cost of living
allowances. SOUTH MOTORISTS moved for
reconsideration of the Order, which was
denied.
The Secretary of Labor and Employment
affirmed the appealed Order. SOUTH
MOTORISTS moved for reconsideration but
this proved unsuccessful. A Second Motion for
Reconsideration was filed, which was likewise
denied in an Order dated 7 March 1989.
Hence, this certiorari Petition questioning the
monetary award by the Regional Director and,
 in general, his jurisdiction to validly award
money claims.
SOUTH MOTORISTS maintains that said
officials are bereft of authority to act on such
claims as this falls under the original and
exclusive jurisdiction of Labor Arbiters.
Respondents maintain otherwise.
ISSUES
1. Main issue in this case: WON the Regional
Director has jurisdiction to try this case on
money claims
2. Relevant to our topic: WON the Secretary of
xxx xxx xxx
Labor and Employment erred in affirming the
award based on a mere Inspection Report
RULING
1. Partly yes, the Regional Director has
jurisdiction only over those claims not
exceeding P5,000.
2. No, SOUTH MOTORISTS was afforded
ample opportunity to present its side.
Disposition:
The award of P 184,689.12 is hereby MODIFIED. The
individual claims of Macario Gavino, Vito T. Euste
Jose, Brequillo, Domingo Cis, Alberto Agreda,
Amancio Galona, Roque Tosoc, Hilarion P. Guinoo,
Felipe Cea, Roberto Guinoo, and Ernesto Osoc, each
of which exceeds P5,000.00, are hereby
remanded to the Labor Arbiter for proper
disposition. All other individual awards not in excess
of P5,000.00 are hereby AFFIRMED. Costs against
petitioner.
REASONING
ON THE REGIONAL DIRECTORS JURISDICTION
Two provisions of law are crucial to the issue
Art. 129. Recovery of wages, simple
money claims and other benefits. Upon
ON THE SUFFICIENCY OF THE INSPECTION
complaint of any interested party, the
REPORT AS THE BASIS OF THE AWARD
Regional Director of the Department of
Labor and Employment or any of the duly
authorized hearing officers of the
Department is empowered, through
summary proceeding and after due notice,
to hear and decide cases involving the
recovery of wages and other monetary
claims and benefits, including legal
interest, owing to an employee or person
employed in domestic or household
service and househelper under this Code,
arising from employer-employee
relations: Provided, That such complaint
does not include a claim for
reinstatement: Provided, further, That
the aggregate claim of each employee or
househelper does not exceed five
thousand pesos (P5,000.00). . . .
Art. 217. Jurisdiction of Labor Arbiters
and the Commission. (a) Except as
otherwise provided under this Code, the
Labor Arbiters shall have original and
exclusive jurisdiction to hear and decide,
within thirty (30) calendar days after the
submission of the case by the parties for
decision without extension, even in the
absence of stenographic notes, the
following cases involving all workers,
whether agricultural or non-agricultural:
(6) Except claims for employees
compensation, social security, medicare
and maternity benefits, all other
claims arising from employer-
employee relations, including those of
persons in domestic or household
service, involving an amount exceeding
five thousand pesos (P5,000), whether
or not accompanied with a claim for
reinstatement.
xxx xxx xxx
In accordance with Articles 129 and 217 of the
Labor Code, as amended, supra, those awards
in excess of P5,000.00, particularly those given
to Macario Gavino, Vito T. Euste, Jose
Brequillo, Domingo Cis, Alberto Agreda,
Amancio Galona, Roque Tosoc, Hilarion P.
Guinoo, Felipe Cea, Roberto Guinoo, and
Ernesto Osoc, each of which exceeds
P5,000.00, should be ventilated in a
proceeding before the Labor Arbiters. The
other awards, or those not in excess of
P5,000.00 and having no issue of reinstatement
set forth, should be affirmed.
SOUTH MOTORISTS failed to present
employment records giving as an excuse that
they were sent to the main office in Manila, in
violation of Section 11 of Rule X, Book II of
the Omnibus Rules Implementing the Labor
Code providing that:
All employment records of the
employees of the employer shall be kept
and maintained in or about the
premises of the workplace. The
premises of a workplace shall be
understood to mean the main or branch
office or establishment, if any,
depending, upon where the employees
are regularly assigned. The keeping of
 the employee's records in another place
is prohibited.
SOUTH MOTORISTS also caused the
resettings of all subsequent hearings. Its
repeated failure to attend the hearings, and to
submit any motion as manifested may be
construed as a waiver of its right to adduce
evidence to controvert the worker's claims.
33. Gaa vs Court of Appeals (1985) 140 SCRA 304
Facts:
It appears that respondent Europhil Industries
Corporation was formerly one of the tenants in
Trinity Building at T.M. Kalaw Street, Manila,
while petitioner Gaa was then the building
administrator.
On December 12, 1973, Europhil commenced an
action in CFI Manila for damages against
petitioner for having perpetrated certain acts
that Europhil considered a trespass upon its
rights, namely, cutting of its electricity, and
removing its name from the building directory
and gate passes of its officials and employees",
On June 28, 1974, said court rendered judgment in favor
of respondent Europhil, ordering petitioner to pay
the former the sum of P10,000.00 as actual
damages, P5,000.00 as moral damages, P5,000.00 as
exemplary damages and to pay the costs.
The said decision having become final and executory, a
writ of garnishment was issued pursuant to which
Deputy
Sheriff Roxas on August 1, 1975 served a Notice of
Garnishment upon El Grande Hotel, where
petitioner was then employed, garnishing her
"salary, commission and/or remuneration."
Petitioner then filed with the CIF of Manila a
motion to lift said garnishment on the ground that her
salaries, commission and or remuneration" are exempted
from execution under Article 1708 of the New Civil
Code.
Said motion was denied by the lower Court
CA dismissed the petition holding that
petitioner is not a mere laborer as contemplated
under
Article 1708 as the term laborer does not apply
to one who holds a managerial or supervisory
position like that of petitioner, but only to those laborers
occupying the lower strata.
Issue: WON the Petitioner is covered by Article 1708 of the New
Civil Code.
RULING: Petitioner is not covered by Article 1708 since
she does not fall within the criteria of laborer.
Article 1708 of the Civil Code provides: The laborer's
wage shall not be subject to execution or attachment,
except for debts incurred for food, shelter, clothing and
medical attendance."
It is beyond dispute that petitioner is not an ordinary or
rank and file laborer but a responsibly place employee,
of El Grande Hotel, responsible for planning, directing,
controlling, and coordinating the activities of all
housekeeping personnel so as to ensure the
cleanliness, maintenance and orderliness of all
guestrooms, function rooms, public areas, and the
surroundings of the hotel. Considering the importance
of petitioner's function in El Grande Hotel, it is
undeniable that petitioner is occupying a position
equivalent to that of a managerial or supervisory position. We
do not think that the legislature intended the exemption in Article
1708 of the New Civil Code to operate in favor of any but
those who are laboring men or women in the sense that their work
is manual.
Persons belonging to this class usually look to the reward of a day's
labor for immediate or present support, and such persons are more
in need of the exemption than any others. Petitioner is
definitely not within that class.
34. REPUBLIC V PERALTA
150 SCRA 37
FELICIANO; May 20, 1987
NATURE:
Review on certiorari
FACTS:
- The Republic of the Philippines seeks the review on
certiorari
of the Order of the CFI of Manila in its Civil Case No.
108395
entitled "In the Matter of Voluntary Insolvency of
Quality
Tobacco Corporation, Quality Tobacco.
- In its questioned Order, the trial court held that the
above enumerated
claims of USTC and FOITAF (hereafter collectively
referred to as the "Unions") for separation pay of their
respective members embodied in final awards of the
NLRC were
to be preferred over the claims of the Bureau of Customs
and
the BIR. The trial court, in so ruling, relied primarily
upon Article
110 of the Labor Code.
- The Solicitor General, in seeking the reversal of the
questioned
Orders, argues that Article 110 of the Labor Code is not
applicable as it speaks of "wages," a term which he
asserts
does not include the separation pay claimed by the
Unions.
"Separation pay," the Solicitor General contends: is
given to a
laborer for a separation from employment computed on
the
basis of the number of years the laborer was employed
by the
7 SEC. 1. Requirements for Issuance of License. Every
applicant for license to operate
a private employment agency or manning agency shall
submit a written application
together with the following requirements:
xxx xxx
f. A verified undertaking stating that the applicant:
xxx xxx xxx
(3) Shall assume joint and solidary liability with the
employer for all claims and
liabilities which may arise in connection with the
implementation of the contract;
including but not limited to payment of wages, health
and disability compensation
and reparation.
employer; it is a form of penalty or damage against the
employer in favor of the employee for the latter's
dismissal or
separation from service
ISSUE
WON separation pay of their respective members
embodied in
final awards of the NLRC were to be preferred over the
claims of
the Bureau of Customs and the BIR (WON separation
pay is
included in the term wages8)
HELD
1. YES
Ratio For the specific purposes of Article 1109 and in
the
context of insolvency termination or separation pay is
reasonably regarded as forming part of the remuneration
or
other money benefits accruing to employees or workers
by
reason of their having previously rendered services to
their
employer; as such, they fall within the scope of
"remuneration
or earnings for services rendered or to be rendered
."
Liability for separation pay might indeed have the effect
of a
penalty, so far as the employer is concerned. So far as
concerns
the employees, however, separation pay is additional
remuneration to which they become entitled because,
having
previously rendered services, they are separated from
the
employer's service.
Reasoning
- We note, in this connection, that in Philippine
Commercial and
Industrial Bank (PCIB) us. National Mines and Allied
Workers
Union, the Solicitor General took a different view and
there
urged that the term "wages" under Article 110 of the
Labor
Code may be regarded as embracing within its scope
severance
pay or termination or separation pay. In PCIB, this
Court agreed
with the position advanced by the Solicitor General. We
see no
reason for overturning this particular position.
- The resolution of the issue of priority among the
several
claims filed in the insolvency proceedings instituted by
the
Insolvent cannot, however, rest on a reading of Article
110 of
the labor Code alone.
- Article 110 of the Labor Code, in determining the
reach of its
terms, cannot be viewed in isolation. Rather, Article 110
must
be read in relation to the provisions of the Civil Code
concerning
the classification, concurrence and preference of credits,
which
provisions find particular application in insolvency
proceedings
where the claims of all creditors, preferred or non-
preferred,
may be adjudicated in a binding manner.
Disposition MODIFIED and REMANDED to the trial
court for
further proceedings in insolvency.
Article 97 (f) of the Labor Code defines "wages" in the
following terms:
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 includes
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. 'Fair and reasonable value' shall not
include any profit to the
employer or to any person affiliated with the
employer.(emphasis supplied)
9 the jurisdiction to decide on such case, thus, praying
Article 110. Worker preference in case of bankruptcy
In the event of bankruptcy
or liquidation of an employer's business, his workers
shall enjoy first preference as
regards wages due them for services rendered during the
period prior to the
bankruptcy or liquidation, any provision of law to the
contrary notwithstanding. Union
paid wages shall be paid in full before other creditors
may establish any claim to a
share in the assets of the employer. (emphasis supplied).
35. Manila Banking Corp. v. NLRC, 279 SCRA 602,
621-642 (1997) SCRA
36. CIRINEO BOWLING PLAZA,
INC., petitioner, vs. GERRY SENSING, BELEN
FERNANDEZ, MIRASOL DIAZ, MARGARITA ABRIL,
DARIO BENITEZ, MANUEL BENITEZ, RONILLO TANDOC,
EDGAR DIZON, JOVELYN QUINTO, KAREN REMORAN,
JENIFFER RINGOR, DEPARTMENT OF LABOR AND
EMPLOYMENT and COURT of APPEALS, respondents.
NATURE OF THE CASE: Special Civil Action for Certiorari
under Rule 65 of Rules of Court
FACTS: On November 27, 1995, one of the employee
of the petitioner filed a letter complaint with the DOLE
in Dagupan District, Dagupan City for inspection and
investigation of the petitioner for various labor law
violations such as underpayment of wages, 13th month
pay, non-payment of rest day pay, overtime pay,
holiday pay and service incentive pay. Pursuant to the
visitorial and enforcement of the Secretary of Labor
and Employment, his duly authorized representative
conducted an inspection/investigation and validated
such complaint. Petitioner was then called for a hearing
for four(4) times, however, failed to appear. DOLE then
ordered the petitioner for lawful remuneration
amounting to Php377,500.58 for the thirteen(13)
affected employees and also to submit proof of
payments, and adjust the salaries of the employees and
to submit proof thereof within the same period.
The claims of two(2) of the thirteen(13) affected
employees have been settled and thereby dismissed.
However the order for the remaining eleven(11)
employees still stands. On October 21, 1996, DOLE
Director Maximo B. Lim issued a writ of execution.
Having such act, the petitioner attacked the validity of
such writ, averring that the DOLE Director do not have
that it should be dismissed.
ISSUE: WON the DOLE Director has a jurisdiction over
the case.
HELD: YES. Pursuant to the provisions of Article 128 of
the Labor Code, the Secretary of Labor or his duly
authorized representatives, including labor regulation
officers, shall have access to employers records and
premises at any time of the day or night whenever work
is being undertaken, and the right to copy therefrom,
to question any employee and investigate any fact,
condition or matter which may be necessary to
determine violations or which may aid in the
enforcement of this Code and of any labor law, wage
order or rules and regulartions issued pursuant
thereto. Therefore, the instant petition was dismissed.
37. Francis Guico, Jr., doing business under the
name and style of COPYLANDIA SERVICES & TRADING
vs. Hon. Secretary of Labor & Employment Leonardo
Quisumbing, the Office of Regional Director of Region
I, Dept of Labor & Employment, Rosalina Carrera, Et.
Al.. (November 16, 1998) G.R. 131750
Facts:
The case started when the Office of the Regional
Director, Department of Labor and Employment
(DOLE), Region I, San Fernando, La Union, received a
letter-complaint datedApril25, 1995, requesting for an
investigation of petitioner's establishment, Copylandia
Services &Trading, for violation of labor standards
laws. Pursuant to the visitorial and enforcement
powers of the Secretary of Labor and Employment or
his duly authorized representative under Article 128 of
the Labor Code, as amended, inspections were
conducted at Copylandia's outlets on April 27 and May
2, 1995. The inspections yielded the following
violations involving twenty-one (21) employees who
are copier operators: (1) underpayment of wages; (2)
underpayment of 13th month pay; and (3) no service
incentive leave with pay.
Issue:
WON the Regional Director has jurisdiction over the
labor standards case.
Held:
Regional Director has jurisdiction over the case citing
Article 128 (b) of the Labor Code, as amended.
We sustain the jurisdiction of the respondent
Secretary. As the respondent correctly pointed out, this
Court's ruling in Servando that the visitorial power
of the Secretary of Labor to order and enforce
compliance with labor standard laws cannot be
exercised where the individual claim exceeds
P5,000.00, can no longer be applied in view of the
enactment of R.A. No. 7730 amendingArticle 128 (b) of
the Labor Code, viz: Art. 128 (b) Notwithstanding the
provisions of Articles 129 and 217 of this Code to the
contrary, and in cases where the relationship of
employer-employee still exists, the Secretary of
Labor and Employment or his duly authorized
representatives shall have the power to issue
compliance orders to give effect to the labor standards
provisions of the Code and other labor legislation
based on the findings of the labor employment and
enforcement officers or industrial safety engineers
made in the course of inspection. The Secretary or his
duly authorized representatives shall issue writs of
execution to the appropriate authority for the
enforcement of their orders, except in cases where the
employer contests the findings of the labor
employment and enforcement officer and raises issues
supported by documentary proofs which were not
considered in the course of inspection. An order issued
by the duly authorized representative of the Secretary
of Labor and Employment under this article may be
appealed to the latter. In case said order involves a
monetary award, an appeal by the employer may be
perfected only upon the posting of a cash or surety
bond issued by are putable bonding company duly
accredited by the Secretary of Labor and Employment
in the amount equivalent to the monetary award in the
order appealed from. (Emphasis supplied.)The records
of the House of Representatives show that
Congressmen Alberto S. Veloso and Eriberto V. Loreto
sponsored the law. In his sponsorship speech,
Congressman Veloso categorically declared that "this
bill seeks to do away with the jurisdictional limitations
imposed through said ruling (referring to Servando)
and to finally settle any lingering doubts on the
visitorial and enforcement powers of the Secretary of
Labor and Employment."Petitioner's reliance on
Servando is thus untenable
38. Dentech MFG. Corp v NRC Supra
39. ARCHILLES MANUFACTURING
CORPORATION, ALBERTO YU and ADRIAN
YU, petitioners, vs. NATIONAL LABOR
RELATIONS COMMISSION, GERONIMO
MANUEL, ARNULFO DIAZ, JAIME
CARUNUNGAN and BENJAMIN RINDON,
respondents.
There are three issues to be resolved in this special civil
action for certiorari under Rule 65 of the
Revised Rules of Court, namely: (a) whether a writ of
execution is still necessary to enforce the Labor
Arbiter's order of immediate reinstatement pending
appeal; (b) whether dismissal for cause results
in the forfeiture of the employee's right to a 13th month
pay; and, (c) whether the award of
attorney's fees is proper in the instant case.
Archilles Manufacturing Corporation (ARCHILLES for
brevity), Alberto Yu and Adrian Yu are the
petitioners, the latter two (2) being the Chairman and the
Vice-President of ARCHILLES,
respectively. Private respondents Geronimo Manuel,
Arnulfo Diaz, Jaime Carunungan and
Benjamin Rindon were employed by ARCHILLES as
laborers in its steel factory located in Barangay
Pandayan, Meycauayan, Bulacan, each receiving a daily
wage of P96.00. 1
ARCHILLES was maintaining a bunkhouse in the work
area which served as resting place for its
workers including private respondents. In 1988 a
mauling incident nearly took place involving a
relative of an employee. As a result ARCHILLES
prohibited its workers from bringing any member
of their family to the bunkhouse. But despite this
prohibition, private respondents continued to
bring their respective families to the bunkhouse, causing
annoyance and discomfort to the other
workers. 2 This was brought to the attention of
ARCHILLES.
On 11 May 1990 the management ordered private
respondent to remove their families from the
bunkhouse and to explain their violation of the company
rule. Private respondents remove their
families from the premises but failed to report to the
management as required; instead, they
absented themselves from 14 to 18 May 1990.
Consequently, on 18 May 1990, ARCHILLES
terminated their employment for abandonment and for
violation of the company rule regarding the
use of the bunkhouse. 3
Private respondents filed a complaint for illegal
dismissal. On 10 July 1991 the Labor Arbiter found
the dismissal of private respondents illegal and ordered
their reinstatement as well as the payment
to them the backwages, proportionate 13th month pay
for the year 1990 and attorney's
fees. 4 ARCHILLES appealed.
On 10 September 1991 private respondent filed with
public respondent National Labor Relations
Commission a motion for the issuance of a writ of
execution for their immediate reinstatement,
pending appeal, either physically or in the company
payroll. On 19 September 1991 ARCHILLES
opposed the motion.
Since no action was taken by NLRC on the motion of
10 September 1991, private respondents filed a
similar motion on 15 July 1992. Both motions however
have remained unresolved.
On 11 August 1992 NLRC vacated and set aside the
decision of the Labor Arbiter and ruled that the
dismissal of private respondents was valid since they
wilfully disobeyed a lawful order of their
employer requiring them to explain their infraction of a
company rule. In the dispute part of its
decision, however, NLRC ordered ARCHILLES to pay
private respondents their "withheld" salaries
from 19 September 1991 when it filed its opposition to
the motion for issuance of a writ of execution
until the promulgation of the NLRC Decision (11
August 1992) on the ground that the order of
reinstatement of the Labor Arbiter was immediately
executory, even pending appeal. And since
ARCHILLES in its opposition alleged that actual
reinstatement was no longer possible as it would
affect the peace and order situation in the steel factory,
clearly, ARCHILLES had opted for payroll
reinstatement of private respondents. NLRC also
ordered ARCHILLES to pay their proportionate
13th month pay for 1990 and P12,351.30 representing
10% of the total judgment award of
P123,513.00 as attorney's fees. 5
Their motion for partial reconsideration having been
denied by public respondent in its resolution of
8 September 1992, petitioners filed the instant petition
praying that the questioned NLRC decision of
11 August 1992 as well as its resolution of 8 September
1992 be partially annulled in connection with
the award of "withheld" salaries, proportionate 13th
month pay and attorney's fees.
As regards the first issue, i.e., whether a writ of
execution is still necessary to enforce the Labor
Arbiter's order of immediate reinstatement even when
pending appeal, we agree with petitioners
that it is necessary. The third paragraph of Art. 223 of
the Labor Code provides
In any event, the decision of the Labor Arbiter
reinstating a dismissed or separated
employee, insofar as the reinstatement aspect is
concerned, shall be immediately
executory, even pending appeal. The employee shall
either be admitted back to work
under the same terms and conditions prevailing prior to
his dismissal or separation
or, at the option of the employer, merely reinstated in
the payroll. The posting of the
bond by the employer shall not stay the execution for
reinstatement provided herein.
We have fully explained the legal basis for this
conclusion in Maranaw Hotel Resort Corporation
(Century Park Sheraton Manila) v. NLRC and Gina G.
Castro 6 thus
It must be stressed, however, that although the
reinstatement aspect of the decision
is immediately executory, it does not follow that it is
self-executory. There must be a writ
of execution which may be issued motu proprio or on
motion of an interested party.
Article 224 of the Labor Code provides:
Art. 224. Execution of decisions, orders or awards.
(a) The
Secretary of Labor and Employment or any Regional
Director, the
Commission or any Labor Arbiter, or med-Arbiter or
voluntary
arbitrator may, motu proprio or on motion of any
interested party, issue a
writ of execution on a judgment within five (5) years
from the date it
becomes final and executory . . . .
The second paragraph of Section 1, Rule XVIII of the
New Rules of Procedure of the
NLRC also provides:
The Labor Arbiter, POEA Administrator, or the
Regional Director, or his duly
authorized hearing officer of origin shall, motu proprio
or upon motion of any interested
party, issue a writ of execution on a judgment only
within five (5) years from the date
it becomes final and executory . . . . No motion for
execution shall be entertained nor
a writ be issued unless the Labor Arbiter is in possession
of the records of the case
which shall include an entry of judgment.
In the absence . . . of an order for the issuance of a writ
of execution on the
reinstatement aspect of the decision of the Labor
Arbiter, the petitioner was under no
legal obligation to admit back to work the private
respondent under the terms and
conditions prevailing prior to her dismissal or, at the
petitioner's option, to merely
reinstate her in the payroll. An option is a right of
election to exercise a privilege, and
the option in Article 223 of the Labor code is
exclusively granted to the employer.
The event that gives rise for its exercise is not the
reinstatement decree of the Labor
Arbiter, but the writ for its execution commanding the
employer to reinstate the
employee, while the final act which compels the
employer to exercise the option is
the service upon it of the writ of execution when, instead
of admitting the employee
back to his work, the employee chooses to reinstate the
employee in the payroll only.
If the employer does not exercise this option, it must
forthwith admit the employee
back to work, otherwise it may be punished for
contempt.
In the case at bench, there was no occasion for
petitioners to exercise their option under Art. 223 of
the Labor Code in connection with the reinstatement
aspect of the decision of the Labor Arbiter. The
motions of private respondents for the issuance of a writ
of execution were not acted upon by
NLRC. It was not shown that respondent exerted efforts
to have their motions resolved. They are
deemed to have abandoned their motions for execution
pending appeal. They cannot now ask that
the writ of execution be issued since their dismissal was
found to be for cause.
On the second issue, which refers to the propriety of the
award of a 13th month pay, paragraph 6 of
the Revised Guidelines on the Implementation of the
13th Month Pay Law (P. D. 851) provides that
"(a)n employee who has resigned or whose services
were terminated at any time before the payment
of the 13th month pay is entitled to this monetary benefit
in proportion to the length of time he
worked during the year, reckoned from the time he
started working during the calendar year up to
the time of his resignation or termination from the
service . . . The payment of the 13th month pay may be
demanded by the employee upon the
cessation of employer-employee relationship. This is
consistent with the principle of equity that as
the employer can require the employee to clear himself
of all liabilities and property accountability,
so can the employee demand the payment of all benefits
due him upon the termination of the
relationship."
Furthermore, Sec. 4 of the original Implementing Rules
of P.D. 851 mandates employers to pay their
employees a 13th month pay not later than the 24th of
December every year provided that they have
worked for at least one (1) month during a calendar year.
In effect, this statutory benefit is
automatically vested in the employee who has at least
worked for one month during the calendar
year. As correctly stated by the Solicitor General, such
benefit may not be lost or forfeited even in the
event of the employee's subsequent dismissal for cause
without violating his property rights.
With respect to the third issue, the disputed attorney's
fees can only be assessed in cases of unlawful
withholding of wages. 7 It cannot be said that petitioners
were guilty of unlawfully withholding private
respondents' salaries since, as earlier discussed, the
occasion never arose for them to exercise that option
under Art. 223 of the Labor Code. Clearly, the award of
attorney's fees is baseless.
WHEREFORE, the instant petition is partly granted.
The challenged Decision of the National Labor
Relations Commission dated 11 August 1992 is
MODIFIED by deleting that portion ordering
petitioners to pay private respondents their salaries from
19 September 1991 to 20 September 1992 as
well as that portion awarding 10% of the total judgment
award as attorney's fees for lack of legal and
factual basis. In other respects, the Decision is
AFFIRMED.
40. Ultra Villa Food Haus vs, Geniston (1999)
G.R. 120473
Facts:
Private respondent Renato Geniston was
employed by petitioner Ultra Villa Food House
and/or its alleged owner Rosie Tio. Private
respondent alleged that he was employed as a "do
it all guy" acting as waiter, driver and maintenance
man, in said restaurant. During the elections of
May 11, 1992, private respondent acted as Poll
Watcher. The counting of votes lasted until 3:00
p.m. the next day, May 12. Private respondent did
not report for work on both days on account of his
poll watching. As a result, his employment was
terminated by petitioner Tio on the ground of
abandonment.
Private respondent filed a case of illegal dismissal
against petitioners. Petitioner Tio maintained that
private respondent was her personal driver, not an
employee of Ultra Villa Food Haus and denied
dismissing private respondent whom she claimed
abandoned his job.
The Labor Arbiter found that private respondent observation that private respondents' position as
was indeed petitioner's personal driver. The Labor driver would be "incongruous" with his functions
Arbiter concluded that private respondent, being a as a waiter of Ultra Villa Food Haus.
personal driver, was not entitled to overtime pay,
(5) The Joint Affidavit of the warehouseman and
premium pay, service incentive leave and 13th
warehouse checker of the CFC Corporation stating
month pay.On appeal, the NLRC reversed the
that: Renato Geniston usually drive[s] Mrs. Tio
decision of the labor arbiter and ordered the
from her residence to the office. Thereafter, Mr.
reinstatement of private respondent and payment
Geniston will wait for Mrs. Tio in her car. Most of
of backwages, overtime pay, premium pay for
the time, Renato Geniston slept in the car of Mrs.
holiday and rest days, etc. The NLRC also granted
Tio and will be awakened only when the latter will
private respondent separation pay in lieu of
leave the office for lunch. Mr. Geniston will again
reinstatement on account of the establishment's
drive Mrs. Tio to the office at around 2:00 o'clock
closure but denied his prayer for moral, actual and
in the afternoon and thereafter the former will
exemplary damages, and attorney's fees. Petitioner
again wait for Mrs. Tio at the latter's car until Mrs.
moved for reconsideration but was denied.
Tio will again leave the office to make her rounds
Issues: at our branch office at the downtown area. In
contrast, private respondent has not presented any
(1) Whether private respondent was an
evidence other than his self-serving allegation to
employee of the Ultra Villa Food Haus or the
show that he was employed in the Ultra Villa Food
personal driver of petitioner; and
Haus.
(2) Whether private respondent was illegally
On this issue, therefore, the evidence weighs
dismissed from employment.
heavily in petitioner's favor. The Labor Arbiter

Held: thus correctly ruled that private respondent was

petitioner's personal driver and not an employee
I. THE LABOR ARBITER CORRECTLY RULED of the subject establishment. Accordingly, the
THAT PRIVATE RESPONDENT WAS terms and conditions of private respondent's
PETITIONER'S PERSONAL DRIVER AND NOT employment are governed by Chapter III, Title III,
AN EMPLOYEE OF THE SUBJECT Book III of the Labor Code as well as by the
ESTABLISHMENT. We find that private pertinent provisions of the Civil Code.
respondent was indeed the personal driver of
petitioner, and not an employee of the Ultra Villa I. PETITIONER IS NOT OBLIGED

Food Haus. There is substantial evidence to UNDER THE LAW TO GRANT

support such conclusion, namely: PRIVATE RESPONDENT

OVERTIME PAY, HOLIDAY PAY,
(1) Private respondent's admission during the PREMIUM PAY AND SERVICE
mandatory conference that he was petitioner's INCENTIVE LEAVE.
personal driver.

(2) Copies of the Ultra Villa Food Haus payroll

which do not contain private respondent's name. II. RIVATE RESPONDENT IS
ENTITLED TO BE INDEMNIFIED
(3) Affidavits of Ultra Villa Food Haus employees FOR HIS UNJUST DISMISSAL AND
attesting that private respondent was never an FOR PETITIONER'S FAILURE TO
employee of said establishment. COMPLY WITH THE
REQUIREMENTS OF DUE PROCESS
(4) Petitioner Tio's undisputed allegation that she
IN EFFECTING HIS DISMISSAL.
works as the branch manager of the CFC
Corporation whose office is located in Mandaue To constitute abandonment, two requisites must
City. This would support the Labor Arbiter's concur: (1) the failure to report to work or absence
without valid or justifiable reason, and (2) a clear
intention to sever the employer-employee
relationship as manifested by some overt acts, with
the second requisite as the more determinative
factor.
The burden of proving abandonment as a just
cause for dismissal is on the employer. Petitioner
failed to discharge this burden. The only evidence
adduced by petitioner to prove abandonment is
her affidavit. It is quite unbelievable that private
respondent would leave a stable and relatively
well paying job as petitioner's family driver to
work as an election watcher.
Though the latter may pay more in a day, elections
in this country are so far in between that it is
unlikely that any person would abandon his job to
embark on a career as an election watcher, the
functions of which are seasonal and temporary in
nature. Consequently, we do not find private
respondent to have abandoned his job. His
dismissal from petitioner's employ being unjust,
petitioner is entitled to an indemnity under Article
149 of the Labor Code.
Petitioner likewise concedes that she failed to
comply with due process in dismissing private
respondent since private respondent had already
abandoned his job. As we have shown earlier
however, petitioner's theory of abandonment has
no leg to stand on, and with it, her attempts to
justify her failure to accord due process must also
fall. Accordingly, private respondent is ordered to
pay private respondent the sum of P1,000.00.
41. Boie Takeda v Dela Serna Supra
42. Iran v NLRC Supra
43. Honda Phils., Inc., vs Samahan ng Malayang
Manggagawa sa Honda (2005) G.R. 145561
Facts:
The case stems from the collective bargaining
agreement between Honda and the respondent union
that it granted the computation of 14th month pay as
the same as 13th month pay. Honda continues the
practice of granting financial assistance covered every
December each year of not less than 100% of the basic
salary. In the latter part of 1998, the parties started to
re-negotiate for the fourth and fifth years of the CBA.
The union filed a notice of strike on the ground of unfair
labor practice for deadlock.
DOLE assumed jurisdiction over the case and certified
it to the NLRC for compulsory arbitration. The striking
employees were ordered to return to work and
management to accept them back under the same
terms prior to the strike staged. Honda issued a
memorandum of the new computation of the 13th
month and 14th month pay to be granted to all its
employees whereby the 31 long strikes shall be
considered unworked days for purpose of computing
the said benefits. The amount equivalent to of the
employees basic salary shall be deducted from these
bonuses, with a commitment that in the event that the
strike is declared legal, Honda shall pay the amount.
The respondent union opposed the pro-rated
computation of bonuses. This issue was submitted to
voluntary arbitration where it ruled that the companys
implementation of the pro-rated computation is
invalid.
Issue: WON the pro-rated computation of the 13th and
14th month pays and other bonuses in question is valid
and lawful.
Held: The pro-rated computation is invalid.
The pro-rated computation of Honda as a company
policy has not ripened into a company practice and it
was the first time they implemented such practice.
The payment of the 13th month pay in full month
payment by Honda has become an established
practice. The length of time where it should be
considered in practice is not being laid down by
jurisprudence. The voluntary act of the employer
cannot be unilaterally withdrawn without violating
Article 100 of the Labor Code.
The court also rules that the withdrawal of the benefit
of paying a full month salary for 13th month pay shall
constitute a violation of Article 100 of the Labor Code.
44. Framanlis Farms, Inc., et. al. v. Hon. Minister
of Labor, et. al.
G.R. No. 72616-17 March 8, 1989
Case Doctrine: Productivity Standards
Minister did not err in requiring the petitioners to pay
wage differentials to their pakyaw workers who
worked for at least eight hours daily and earned less
than P8.00 per day.
Under Section 3 of PD No. 851, such benefits in the
form of food or free electricity, assuming they were
given, were not a proper substitute for the 13th month
pay required by law. Neither may year-end rewards for
loyalty and service be considered in lieu of 13th month
pay.
Facts: Eighteen (18) employees of Framanlis Farms, Inc.
filed against their employer two labor standard cases
alleging that in 1977 to 1979 they were not paid
emergency cost of living allowance (ECOLA) minimum
wage, 13th month pay, holiday pay, and service
incentive leave pay.
In their answer, Framanlis Farms alleged that the
employees were not regular workers on their hacienda
but were migratory (sacadas) or pakyaw workers who
worked on-and-off and were hired seasonally, or only
during the milling season, to do piece-work on the
farms, hence, they were not entitled to the benefits
claimed by them.
The Minister of Labor directed Framanlis Farms to pay
the deficiency payment of emergency living allowance
and service incentive leave pay, holiday pay and social
amelioration bonus for 3 years for 1977 to 1979. Upon
the petitioners' appeal of that Order, the Deputy
Minister of Labor modified it by ordering the employer
to pay all non-pakyaw workers their claim for holiday
and incentive leave pay for the years 1977, 1978, all
'pakyaw' workers their pay differentials for the same
period on days they worked for at least eight (8) hours
and earned below P8.06 daily, and all complainants
their 13th month pay for the years 1978 and 1979. The
Deputy Minister clarified that pakyaw workers were
excluded from holiday and service incentive leave pay.
Issue: Whether awarding pay differentials, holiday and
service incentive leave for pakyaw workers who are not
regular employees but are merely paid on piece-rate,
contrary to Art. 82 of the Labor Code;
Whether or not Framanlis Farm is required to pay 13th
month pay despite the fact that they had substantially
complied with the requirement by extending yearly
bonuses and other benefits in kind and in cash to the
complainants, pursuant to Section 3(c) of PD 851 which
exempts the employer from paying 13th month pay
when its equivalent has already been given;
Ruling:
In 1976, PD No. 928 fixed a minimum wage of P7.00 for
agricultural workers in any plantation or agricultural
enterprise irrespective of whether or not the worker
was paid on a piece-rate basis. However, effective July
1, 1978, the minimum wage was increased to P8.00
(Sec. 1, PD 1389). Subsequently, PD 1614 provided for
a P2.00 increase in the daily wage of all workers
effective April 1, 1979. The petitioners admit that those
were the minimum rates prevailing then. Therefore,
the respondent Minister did not err in requiring the
petitioners to pay wage differentials to their pakyaw
workers who worked for at least eight hours daily and
earned less than P8.00 per day in 1978 to 1979.
With regard to the 13th month pay, petitioners
admitted that they failed to pay their workers 13th
month pay in 1978 and 1979. However, they argued
that they substantially complied with the law by giving
their workers a yearly bonus and other non-monetary
benefits amounting to not less than 1/12th of their
basic salary, in the form of food and free electricity.
Unfortunately, under Section 3 of PD No. 851, such
benefits in the form of food or free electricity, assuming
they were given, were not a proper substitute for the
13th month pay required by law. PD 851 provides:
Section 3. Employees covered The
Decree shall apply to all employees
except to:
xxx
The term 'its equivalent' as used in
paragraph (c) hereof shall include
Christmas bonus, mid-year bonus,
profit-sharing payments and other
cash bonuses amounting to not less
than 1/12 of the basic salary but shall
not include cash and stock dividends,
cost of living allowances and all other
allowances regularly enjoyed by the
employee, as well as non-monetary
benefits.xxx
Neither may year-end rewards for loyalty and service
be considered in lieu of 13th month pay. Section 10 of
the Rules and Regulations Implementing Presidential
Decree No. 851 provides for the prohibition against
reduction or elimination of benefits or favorable
practice being enjoyed by the employee.

45. Kamaya Point Hotel vs. NLRC GR 86200,
Feb 25, 1992
Facts: Respondent Memia Quiambao with thirty others
who are members of private respondent Federation of
Free Workers (FFW) were employed by petitioner as
hotel crew. On the basis of the profitability of the
company's business operations, management granted a
14th month pay to its employees starting in 1979. In
January 1982, operations ceased to give way to the
hotel's conversion into a training center for Libyan
scholars. . However, due to technical and financing
problems, the Libyans pre-terminated the program on
July 7, 1982, leaving petitioner without any business,
aside from the fact that it was not paid for the use of the
hotel premises and in addition had to undertake repairs
of the premises damaged by the Libyan students.
Although petitioner reopened the hotel premises to the
public, it was not able to pick-up its lost patronage. In a
couple of months it effected a retrenchment program
until finally on January 7, 1984, it totally closed its
business. On April 18, 1983, private respondent
Federation of Free Workers (FFW); a legitimate labor
organization, filed a complaint against petitioner for
illegal suspension, violation of the CBA and non-
payment of the 14th month pay.
Executive Labor Arbiter ordered Kamaya Point Hotel to
pay the 14th month pay for 1982 of all its rank and file
employees and to pay the monetary equivalent of the
benefits of then existing Collective Bargaining
Agreement which will expire on 1 July 1984.
NLRC set aside the award of monetary benefits under
the CBA but affirmed the grant of the 14th month pay
for the reason that it already ripened into a company
practice which respondent company cannot withdraw
unilaterally without violating article 100 of the Labor
Code.
Issue: Whether or not respondents are entitled the 14th
month pay in 1982?
Ruling: There is no law that mandates the payment of
the 14th month pay neither is there stipulation as to such
extra remuneration in the CBA. The granting of the 14th
month pay is a management prerogative which cannot
be forced upon the employer. It is patently obvious that
Article 100 is clearly without applicability. The date of
effectivity of the Labor Code is May 1, 1974. In the case
at bar, petitioner extended its 14th month pay beginning
1979 until 1981. What is demanded is payment of the
14th month pay for 1982. Indubitably from these facts
alone, Article 100 of the Labor Code cannot apply.
46. Marcos, et. al. vs. NLRC AND Insular Life
Assurance (1995)
FACTS:
Petitioners herein have served respondent
Insular for more than 20 years in multiples of
five (20-30 years). They were terminated due
to redundancy and thus were given special
redundancy benefits. But they were denied
their service awards which was set apart from
the redundancy fund. They were made to sign
a quit claim, which they complied, but they
still submitted a letter of protest. They
inquired from the DOLE-LS on the validity of
the denial of their service awards, to which
DOLE decided in their favour. The service
awards were part of the Employees Manual
and were therefore company policies. The
award was earned on the anniversary date.
Even if the employees were separated from
service before the anniversary date, they were
still entitled to the material benefits of the
award.
However, respondent still refused to pay this.
On its 80th anniversary, the company
approved an anniversary equivalent of one-
month salary to its employees. The petitioners
alleged that they were entitled to this.
The LA ruled in petitioners favour, but NLRC
reversed this, upholding the validity of the
quitclaim they signed voluntarily.
ISSUE:
W/N the quitclaim was invalid and if so,
petitioners would be entitled to their service
award.
HELD:
Release and Quitclaim INVALID, petitioners
were ENTITLED to the service awards.
A deed of release or quitclaim cannot bar an
employee from demanding payment to which
he is entitled. Quitclaims are against public
policy and are therefore null and void. The
Court does not believe that petitioners signed
the Release and Quitclaim voluntarily, as the
subsequent submission of a letter of protest
 and the inquiry before the NLRC contradicted
their willingness to execute the quitclaim.
The special redundancy package could not
have covered the service awards, and
respondents actions estopped it from
claiming such. Service awards are not
bonuses. They are stated in the Employees
Manual, which is contractual in nature
therefor the law between the parties. It is
company policy and has been in practice by
the company.
48. Businessday Information Systems and
Services, Inc. v. NLRC
G.R. No. 103575 | 05 April 1993
CASE LAW/ DOCTRINE:
LABOR LAWS AND SOCIAL LEGISLATION;
TERMINATION OF EMPLOYMENT;
EMPLOYER MAY NOT, IN THE GUISE OF
EXERCISING MANAGEMENT
PREROGATIVES, PAY SEPARATION
BENEFITS UNEQUALLY; CASE AT BAR.
Petitioners' right to terminate employees on
account of retrenchment to prevent losses or
closure of business operations, is recognized
by law, but it may not pay separation benefits
unequally for such discrimination breeds
resentment and ill-will among those who have
been treated less generously than others... xxx
Clearly, there was impermissible
discrimination against the private respondents
in the payment of their separation benefits. The
law requires an employer to extend equal
treatment to its employees. It may not, in the
guise of exercising management prerogatives,
grant greater benefits to some and less to
others. Management prerogatives are not
absolute prerogatives but are subject to legal
limits, collective bargaining agreements, or
general principles of fair play and justice (UST
vs. NLRC, 190 SCRA 758). Article 283 of the
Labor Code, as amended, protects workers
whose employment is terminated because of
closure of the establishment or reduction of
personnel (Abella vs. NLRC, 152 SCRA 141,
145).
FACTS:
Businessday Information Systems and
Services Inc. (BSSI) and its President/Manager
(Raul Locsin) sought to annul an NLRC
Decision which affirmed the finding that BSSI
is liable to pay the respondents separation pay
differentials and mid-year bonus.
BSSI was engaged in the manufacture and sale
of computer forms. Due to financial reverses,
its creditors namely the DBP and the Asset
Privatization Trust (APT) took possession of
BSSIs assets including its manufacturing
plant in Marilao, Bulacan.
Due to the action of its creditors, BSSI had to
lay off some plant employees, after prior
notice, as a retrenchment measure. They were
provided separation pay equivalent to
month pay for every year of service. Upon
receipt, they signed individual releases and
quitclaims in favor of BSSI.
Not all employees were laid off. Some were
retained in an attempt to rehabilitate the
company.
Unfortunately, 2 and months later, the
remaining employees were also laid off when
the company decided to end the business
altogether. Unlike the first batch of laid
employees, this batch received separation pay
equivalent to a full months salary for every
year of service plus mid-year bonus.
Due to this obvious discrimination, the first
batch of laid employees (27) filed a protest
against BSSI and Raul Locsin.
During the conciliation proceedings with the
Labor Arbiter, BSSI denied that there was
unlawful discrimination in the payment of
separation benefits to the first batch of laid
workers. BSSI argued that they were paid
retrenchment benefits mandated by law,
while the remaining employees were granted
higher separation benefits because their
termination was on account of the closure of
the business.
Labor Arbiter Decision: In favor of the first
batch of laid employees.
NLRC: Affirmed Decision of the Labor
Arbiter. MR was likewise denied.
ISSUE(S):
W/N BSSI is liable for separation pay
differentials and mid-year bonus to the first
batch of laid employees.
HELD:
Yes, BSSI is liable to pay separation pay
differentials to the employees. However, mid-
year bonus is deleted and set aside. Further,
Raul Locsin is absolved from any personal
liability.
RATIO:
 While the law recognizes BSSIs right to
terminate its employees on account of
retrenchment to prevent losses or closure of
business operations, it may not pay separation
benefits unequally for such discrimination
breeds resentment and ill-will among those
who have been treated less generously.
The NLRC observed that the business climate
did not improve during the small gaps in
between the retrenchment.
There was obviously discrimination against the
first batch of employees. The law requires an
employer to extend equal treatment to its
employees. It may not, in the guise of
exercising management prerogatives, grant
greater benefits to some and less to others.
Management prerogatives are not absolute
prerogatives but are subject to legal limits,
collective bargaining agreements, or general
principles of fair play and justice. Article
283 of the Labor Code protects workers whose
employment is terminated because of closure
of the establishment or reduction of personnel.
In so far as the mid-year bonus, it is settled
doctrine that the grant of a bonus is a
prerogative, not an obligation, of the employer.
The matter of giving a bonus over and above
the workers lawful salaries and allowances is
entirely dependent on the financial capability
of the employer to give it. The fact that the
BSSI was no longer profitable and that the
workers did not work up to the middle of the
year were valid reasons for not granting them a
mid-year bonus.
As regards Raul Locsin, he is not liable as a
corporate officer unless he acted with evident
malice and bad faith in terminating their
employment. No evidence was presented.
49. Philippine Appliance Corp. v. Court of
Appeals, 430 SCRA 525 (2004)- SCRA
50. Philippine Association of Service Exporters,
Inc. v. Drilon
G.R. No. 81958, 30 June 1988, EN BANC
(Sarmiento, J.)
The Philippine Association of Service
Exporters, Inc. (PASEI), a firm "engaged principally in
the recruitment of Filipino workers, male and female,
for overseas placement," challenges the Constitutional
validity of Department Order No. 1, Series of 1988,
of the Department of Labor and Employment, in the
character of "GUIDELINES GOVERNING THE
TEMPORARY SUSPENSION OF DEPLOYMENT
OF FILIPINO DOMESTIC AND HOUSEHOLD
WORKERS." The measure is assailed for
"discrimination against males or females;" that it
"does not apply to all Filipino workers but only to
domestic helpers and females with similar skills;"
that it is violative of the right to travel; and that it is an
invalid exercise of the lawmaking power, police
power being legislative, and not executive in character.
ISSUE:
Whether or not Department Order No. 1, a
police power measure, is valid under the Constitution
HELD:
As a general rule, official acts enjoy a
presumed validity. In the absence of clear and
convincing evidence to the contrary, the presumption
logically stands. The petitioner has shown no
satisfactory reason why the contested measure should be
nullified. There is no question that Department Order
No. 1 applies only to "female contract workers," but it
does not thereby make an undue discrimination between
the sexes. It is well-settled that "equality before the law"
under the Constitution does not import a perfect Identity
of rights among all men and women. It admits of
classifications, provided that (1) such classifications rest
on substantial distinctions; (2) they are germane to the
purposes of the law; (3) they are not confined to existing
conditions; and (4) they apply equally to all members of
the same class.
The Court is satisfied that the classification
made-the preference for female workers rests on
substantial distinctions. As a matter of judicial notice,
the Court is well aware of the unhappy plight that has
befallen our female labor force abroad, especially
domestic servants, amid exploitative working
conditions marked by, in not a few cases, physical and
personal abuse. The sordid tales of maltreatment
suffered by migrant Filipina workers, even rape and
various forms of torture, confirmed by testimonies of
returning workers, are compelling motives for urgent
Government action. As precisely the caretaker of
Constitutional rights, the Court is called upon to protect
victims of exploitation. In fulfilling that duty, the Court
sustains the Government's efforts. Discrimination in this
case is justified.
There is likewise no doubt that such a
classification is germane to the purpose behind the
measure. Unquestionably, it is the avowed objective of
Department Order No. 1 to "enhance the protection for
Filipino female overseas workers" this Court has no
quarrel that in the midst of the terrible mistreatment
Filipina workers have suffered abroad, a ban on
deployment will be for their own good and welfare.
The Order does not narrowly apply to existing
conditions. Rather, it is intended to apply indefinitely so
long as those conditions exist. This is clear from the
Order itself ("Pending review of the administrative and
legal measures, in the Philippines and in the host
countries . . ."), meaning to say that should the
authorities arrive at a means impressed with a greater
degree of permanency, the ban shall be lifted. As a stop-
gap measure, it is possessed of a necessary malleability,
depending on the circumstances of each case.
The Court finds, finally, the impugned
guidelines to be applicable to all female domestic
overseas workers. That it does not apply to "all Filipina
workers" is not an argument for unconstitutionality. Had
the ban been given universal applicability, then it would
have been unreasonable and arbitrary. For obvious
reasons, not all of them are similarly circumstanced.
What the Constitution prohibits is the singling out of a
select person or group of persons within an existing
class, to the prejudice of such a person or group or
resulting in an unfair advantage to another person or
group of persons.
Department Order No. 1 is a valid
implementation of the Labor Code, in particular, its
basic policy to "afford protection to labor," pursuant to
the respondent Department of Labor's rule-making
authority vested in it by the Labor Code. The petitioner
assumes that it is unreasonable simply because of its
impact on the right to travel, but as we have stated, the
right itself is not absolute. The disputed Order is a valid
qualification thereto. Neither is there merit in the
contention that Department Order No. 1 constitutes an
invalid exercise of legislative power. It is true that police
power is the domain of the legislature, but it does not
mean that such an authority may not be lawfully
delegated. As we have mentioned, the Labor Code itself
vests the Department of Labor and Employment with
rulemaking powers in the enforcement whereof.
The petitioners's reliance on the Constitutional
guaranty of worker participation "in policy and
decision-making processes affecting their rights and
benefits" is not well-taken. The right granted by this
provision, again, must submit to the demands and
necessities of the State's power of regulation.
51. Phil. Telegraph and Telephone Co. v. NLRC
SCRA
52. Libres v NLRC G.R. No. 123737. May 28,
1999.
BELLOSILLO, J
Facts:
Petitioner Carlos G. Libres, an electrical engineer, was
holding a managerial position with National Steel
Corporation (NSC) as Assistant Manager. He was then
asked to comment regarding the charge of sexual
harrassment filed against him by the VP's secretary
Capiral. This was included with a waiver of his right
tobe heard once he didn't comment.
On 14 August 1993 petitioner submitted his written
explanation denying the accusation against him and
offering to submit himself for clarificatory
interrogation.
The Management Evaluation Committee said that
"touching a female subordinate's hand and shoulder,
caressing her nape and telling other people that Capiral
was the one who hugged and kissed or that she
responded to the sexual advances are unauthorized acts
that damaged her honor." They suspended Libres for 30
days without pay.
He filed charges against the corporation in the Labor
Arbiter, but the latter held that the company acted with
due process and that his punishment was only mild.
Moreover, he assailed the NLRC decision as without
basis due to the massaging of her shoulders never
discriminated against her continued employment,
impaired her rights and privileges under the Labor
Code, or created a hostile, intimidating or offensive
environment.
He claimed that he wasn't guaranteed due process
because he wasn't given the right be heard. This was due
to his demand for personal confrontation not being
recognized by the MEC.
In the Supreme Court, petitioner assailed the failure of
the NLRC to strictly apply RA No. 7877 or the law
against sexual harassment to the instant case. Moreover,
petitioner also contends that public respondents
reliance on Villarama v. NLRC and Golden Donuts was
misplaced. He draws attention to victim Divina
Gonzagas immediate filing of her letter of resignation
in the Villarama case as opposed to the one year delay
of Capiral in filing her complaint against him. He now
surmises that the filing of the case against him was
merely an afterthought and not borne out of a valid
complaint, hence, the Villarama case should have no
bearing on the instant case.
Issue: Was Libres accorded due process when the MEC
denied his request for personal confrontatiom?
Held: Yes Petition denied.
Ratio:
On not strictly applying RA 7877- Republic Act No.
7877 was not yet in effect at the time of the occurrence
of the act complained of. It was still being deliberated
upon in Congress when petitioners case was decided by
the Labor Arbiter. As a rule, laws shall have no
retroactive effect unless otherwise provided, or except
in a criminal case when their application will favor the
accused. Hence, the Labor Arbiter have to rely on the
MEC report and the common connotation of sexual
harassment as it is generally understood by the
public. Faced with the same predicament, the NLRC
had to agree with the Labor Arbiter. In so doing, the
NLRC did not commit any abuse of discretion in
affirming the decision of the Labor Arbiter.
On the Villarama afterthought-it was both fitting and
appropriate since it singularly addressed the issue of a
managerial employee committing sexual harassment on
a subordinate. The disparity in the periods of filing the
complaints in the two (2) cases did not in any way
reduce this case into insignificance. On the contrary, it
even invited the attention of the Court to focus on sexual
harassment as a just and valid cause for
termination. Whereas petitioner Libres was only meted
a 30-day suspension by the NLRC, Villarama, in the
other case was penalized with termination. As a
managerial employee, petitioner is bound by more
exacting work ethics. He failed to live up to his higher
standard of responsibility when he succumbed to his
moral perversity. And when such moral perversity is
perpetrated against his subordinate, he provides a
justifiable ground for his dismissal for lack of trust and
confidence.
It is the the duty of every employer to protect its
employees from oversexed superiors. Public
respondent therefore is correct in its observation that the
Labor Arbiter was in fact lenient in his application of the
law and jurisprudence for which petitioner must be
grateful for.
As pointed out by the Solicitor General, it could be
expected since Libres was Capirals immediate
superior. Fear of retaliation and backlash, not to forget
the social humiliation and embarrassment that victims
of this human frailty usually suffer, are all realities that
Capiral had to contend with. Moreover, the delay did
not detract from the truth derived from the
facts. Petitioner Libres never questioned the veracity of
Capirals allegations. In fact his narration even
corroborated the latters assertion in several material
points. He only raised issue on the complaints
protracted filing.
On the question of due process- Requirements were
sufficiently complied with. Due process as a
constitutional precept does not always and in all
situations require a trial type proceeding. Due process
is satisfied when a person is notified of the charge
against him and given an opportunity to explain or
defend himself. The essence of due process is simply to
be heard, or as applied to administrative proceedings, an
opportunity to explain ones side, or an opportunity to
seek a reconsideration of the action or ruling
complained of.
It is undeniable that petitioner was given a Notice of
Investigation informing him of the charge of sexual
harassment as well as advising him to submit a written
explanation regarding the matter; that he submitted his
written explanation to his superior. The VP further
allowed him to air his grievance in a private session He
was given more than adequate opportunity to explain his
side and air his grievances.
Personal confrontation was not necessary. Homeowners
v NLRC- litigants may be heard through pleadings,
written explanations, position papers, memoranda or
oral arguments.
53. Philippine Aeolus Automotive United
Corporatoin v. NLRC
FACTS: Private respondent was a company nurse for
the Philippine Aelous United Corporation. A
memorandum was issued by the personnel manager of
petitioner corporation to respondent Cortez asking her
to explain why no action should be taken against her for
(1) throwing a stapler at plant manager William Chua;
(2) fro losing the amount of Php 1,488 entrusted to her;
(3) for asking a co- employee to punch in her time card
one morning when she was not there. She was then
placed on preventive suspension. Another
memorandum was sent to her asking her to explain why
she failed to process the ATM applications of her co-
employees. She submitted a written explanation as to
the loss of Php 1,488 and the punching in of her time
card. A third memorandum was sent to her informing
her of her termination from service for gross and
habitual neglect of duties, serious misconduct, and fraud
or willful breach of trust.
ISSUES:
1. W/N petitioner was illegally dismissed.
2. If such dismissal was illegal, W/N petitioner should
be entitled to damages.
HELD:
1. Yes. The grounds by which an employer may validly
terminate the services of an employee must be strictly
construed. As to the first charge, respondent claims that
plant manager William Chua had been making sexual
advances on her since her first year of employment and
that when she would not accede to his requests, he
threatened that he would cause her termination from
service. As to the second charge, the money entrusted to
her was not lost, but given to the personnel-in-charge for
proper transmittal as evidence by a receipt signed by the
latter. As to the third charge, she explains that she asked
someone to punch in her card as she was doing an errand
for one of the companys officers and with the
permission of William Chua. As to the fourth charge,
she asserts that she had no knowledge thereof. To
constitute serious misconduct to justify dismissal, the
acts must be done in relation to the performance of her
duties as would show her to be unfit to continue working
for her employer. The acts of did not pertain to her
duties as a nurse nor did they constitute serious
misconduct. However due to the strained relations, in
lieu of reinstatement, she is to be awarded separation
pay of one month for every year of service until finality
of this judgment.
2. Yes. Private respondent admittedly allowed four
years to pass before coming out with her employers
sexual impositions; but the time to do such varies
depending upon the needs, circumstances and emotional
threshold of the employee. It is clear that respondent has
suffered anxiety, sleepless nights, besmirched
reputation and social humiliation by reason of the act
complained of. Thus, she should be entitled to moral and
exemplary damages for the oppressive manner with
which petitioners effected her dismissal and to serve as
a warming to officers who take advantage of their
ascendancy over their employees.
54. APEX MINING CO., INC. versus NLRC
FACTS:
Private respondent Sinclita Candida was
employed by petitioner Apex Mining
Company, Inc to perform laundry services at
its staff house.
On December 18, 1987, while she was
attending to her assigned task and she was
hanging her laundry, she accidentally slipped
and hit her back on a stone. As a result of the
accident she was not able to continue with her
work. She was permitted to go on leave for
medication.
De la Rosa offered her the amount of P
2,000.00 which was eventually increased to
P5,000.00 to persuade her to quit her job, but
she refused the offer and preferred to return to
work.
Petitioner did not allow her to return to work
and dismissed her on February 4, 1988.
Private respondent filed a request for
assistance with the Department of Labor and
Employment, which the latter rendered its
Decision by ordering the Apex Mining Co. to
pay Candida the total amount of P55,161.42
for salary differential, emergency living
allowance, 13th month pay differential and
separation pay.
Petitioner appealed the case before the NLRC,
which was subsequently dismissed for lack of
merit.
ISSUE:
Whether or not the private respondent should
be treated as househelper or domestic servant
or a regular employee.
HELD:
Under Rule XIII, Section l(b), Book 3 of the
Labor Code, as amended, the term
"househelper" as used herein is synonymous to
the term "domestic servant" and shall refer to
any person, whether male or female, who
renders services in and about the employer's
home and which services are usually necessary
or desirable for the maintenance and
enjoyment thereof, and ministers exclusively
to the personal comfort and enjoyment of the
employer's family.
The definition cannot be interpreted to include
househelper or laundrywomen working in
staffhouses of a company, like private
respondent who attends to the needs of the
 company's guest and other persons availing of
said facilities.

The mere fact that the househelper or domestic

servant is working within the premises of the
business of the employer and in relation to or
in connection with its business, as in its
staffhouses for its guest or even for its officers
and employees, warrants the conclusion that
such househelper or domestic servant is and
should be considered as a regular employee.

WHEREFORE, the petition is DISMISSED and the

appealed decision and resolution of public respondent
NLRC are hereby AFFIRMED. No pronouncement as to
costs.