Clientlogic (SITEL) vs.

Castro

GR 186070 April 11, 2011

Facts:
Respondent was employed by petitioner ClientLogic Philippines, Inc. (now known and shall hereafter be referred to as SITEL)
on February 14, 2005 as a call center agent for its Bell South Account. After six (6) months, he was promoted to the Mentor
position, and thereafter to the Coach position. A Coach is a team supervisor who is in charge of dealing with customer
complaints which cannot be resolved by call center agents. In June 2006, he was transferred to the Dot Green Account.

During respondents stint at the Dot Green Account, respondent noticed that some of the call center agents under him
would often make excuses to leave their work stations. Their most common excuse was that they would visit the companys
medical clinic. To verify that they were not using the clinic as an alibi to cut their work hours, respondent sent an e-mail to the
clinics personnel requesting for the details of the agents alleged medical consultation. His request was denied on the ground
that medical records of employees are highly confidential and can only be disclosed in cases involving health issues, and not to
be used to build any disciplinary case against them.

On October 11, 2006, respondent received a notice requiring him to explain why he should not be penalized for: (1) violating
Green Dot Companys Policy and Procedure for Direct Deposit Bank Info Request when he accessed a customers online
account and then gave the latters routing and reference numbers for direct deposit; and (2) gravely abusing his discretion when
he requested for the medical records of his team members. Respondent did not deny the infractions imputed against him. He,
however, justified his actuations by explaining that the customer begged him to access the account because she did not have a
computer or an internet access and that he merely requested for a patient tracker, not medical records

On January 22, 2007, SITEL posted a notice of vacancy for respondents position, and on February 12, 2007, he received
a Notice of Termination. These events prompted him to file a complaint for illegal dismissal; non-payment of overtime pay, rest
day pay, holiday pay, service incentive leave pay; full backwages; damages; and attorneys fees before the Labor Arbiter
against herein petitioners SITEL and its officers, Joseph Velasquez, Irene Roa, and Rodney Spires.

Issue: WON respondent is a member of the managerial staff of petitioner.

Held: Article 82 of the Labor Code states that the provisions of the Labor Code on working conditions and rest periods shall
not apply to managerial employees. Generally, managerial employees are not entitled to overtime pay for services rendered in
excess of eight hours a day.

Article 212 (m) of the Labor Code defines a managerial employee as one who is vested with powers or prerogatives to lay
down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline
employees, or to effectively recommend such managerial actions.
Employees are considered occupying managerial positions if they meet all of the following conditions, namely:
1) Their primary duty consists of management of the establishment in which they are employed or of a department or
subdivision thereof;
2) They customarily and regularly direct the work of two or more employees therein;
3) They have the authority to hire or fire other employees of lower rank; or their suggestions and recommendations as
to the hiring and firing and as to the promotion or any other change of status of other employees are given particular weight.
They are considered as officers or members of a managerial staff if they perform the following duties and
responsibilities:
1) The primary duty consists of the performance of work directly related to management of policies of their employer;
2) Customarily and regularly exercise discretion and independent judgment;
3) (a) Regularly and directly assist a proprietor or a managerial employee whose primary duty consists of management
of the establishment in which he is employed or subdivision thereof; or (b) execute under general supervision work along
specialized or technical lines requiring special training, experience, or knowledge; or (c) execute, under general supervision,
special assignment and tasks xxx.
The test of supervisory or managerial status depends on whether a person possesses authority to act in the interest of his
employer and whether such authority is not merely routinary or clerical in nature, but requires the use of independent
judgment. The position held by respondent and its concomitant duties failed to hurdle this test.

As a coach or team supervisor, respondents main duty was to deal with customer complaints which could not be handled or
solved by call center agents. If the members of his team could not meet the needs of a customer, they passed the customers call
to respondent.

This job description does not indicate that respondent can exercise the powers and prerogatives equivalent to managerial
actions which require the customary use of independent judgment. There is no showing that he was actually conferred or was
actually exercising the following duties attributable to a member of the managerial staff,

From the foregoing, respondent is entitled to holiday pay, service incentive leave pay, overtime pay, and rest day.
Petition denied.
 Charlito Pearanda vs Baganga Plywood Corporation and Hudson Chua
489 SCRA 94 Labor Law Labor Standards Overtime Pay and Premium Pay of Managerial Employees
In June 1999, Pearanda was hired by Baganga Plywood Corporation (owned by Hudson Chua) to take charge of the operations
and maintenance of its steam plant boiler. Pearanda was employed as a Foreman/Boiler Head/Shift Engineer tasked to do the
following tasks among others:
1. To supply the required and continuous steam to all consuming units at minimum cost.
2. To supervise, check and monitor manpower workmanship as well as operation of boiler and accessories.
3. To evaluate performance of machinery and manpower.
xxx
5. To train new employees for effective and safety while working.
xxx
7. To recommend personnel actions such as: promotion, or disciplinary action.
xxx
In 2001, BPC shut down due to some repairs and maintenance. BPC did not technically fire Pearanda but due to the latters
insistence, BPC gave him his separation benefits.
BPC subsequently reopened but Pearanda did not reapply.
Pearanda now claims that BPC still needed to pay him his overtime pays and premium pays.
The NLRC ruled that Pearanda is a managerial employee and as such he is not entitled to overtime and premium pay as stated
under the Labor Code. Pearanda appealed. He said that he is not a managerial employee.
ISSUE: Whether or not Pearanda is entitled to overtime and premium pay.
HELD: No. Though there is an error made by the NLRC in finding Pearanda as a managerial employee, the Supreme Court
still ruled that Pearanda is not entitled to overtime and premium pay.
Pearanda is not a managerial employee. Under the Implementing Rules and Regulations of the Labor Code, managerial
employees are those that perform the following:
(1) Their primary duty consists of the management of the establishment in which they are employed or of a department or
subdivision thereof;
(2) They customarily and regularly direct the work of two or more employees therein;
(3) They have the authority to hire or fire other employees of lower rank; or their suggestions and recommendations as to the
hiring and firing and as to the promotion or any other change of status of other employees are given particular weight.
Pearanda does not meet the above requirements. Pearanda is instead considered as a managerial staff. Under the
Implementing Rules and Regulations of the Labor Code, managerial staffs are those that perform the following:
(1) The primary duty consists of the performance of work directly related to management policies of the employer;
(2) Customarily and regularly exercise discretion and independent judgment;
(3) (i) Regularly and directly assist a proprietor or a managerial employee whose primary duty consists of the management of
the establishment in which he is employed or subdivision thereof; or (ii) execute under general supervision work along
specialized or technical lines requiring special training, experience, or knowledge; or (iii) execute under general supervision
special assignments and tasks; and
(4) who do not devote more than 20 percent of their hours worked in a workweek to activities which are not directly and
closely related to the performance of the work described in paragraphs (1), (2), and (3) above.
Pearandas function as a shift engineer illustrates that he was a member of the managerial staff. His duties and responsibilities
conform to the definition of a member of a managerial staff under the Implementing Rules.
Pearanda supervised the engineering section of the steam plant boiler. His work involved overseeing the operation of the
machines and the performance of the workers in the engineering section. This work necessarily required the use of discretion
and independent judgment to ensure the proper functioning of the steam plant boiler.
Further, Pearanda in his position paper admitted that he was a supervisor for BPC. As supervisor, petitioner is deemed a
member of the managerial staff.
 SALAZAR VS. NLRC
G.R. No 109210 APRIL 17, 1996
FACTS: On 17 April 1990, private respondent Carlos Construction, at a monthly salary of P4,500.00, employed Salazar as
construction/project engineer for the construction of a building in Cubao. Allegedly, by virtue of an oral contract, petitioner
would also receive a share in the profits after completion of the project and that petitioners services in excess of 8 ours on
regular days and services rendered on weekends and legal holidays shall be compensable overtime.
On 16 April 1991, petitioner received a memorandum issued by private respondents project manager informing him of the
termination of his services effective on 30 April 1991.
On 13 September 1991, Salazar filed a complaint against private respondent for illegal dismissal, unfair labor practice, illegal
deduction, non-payment of wages, overtime rendered, service incentive leave pay, commission, allowances, profit-sharing and
separation pay with the NLRC-NCR Arbitration Branch, Manila.

The Labor Arbiter rendered a decision dismissing the instant case for lack of merit. Petitioner appealed to the NLRC, where it
affirmed in toto the decision of the Labor Arbiter. His MR was likewise dismissed. Hence the instant petition.

ISSUE:
1) WON petitioner is entitled to overtime pay, premium pay for services rendered on rest days and holidays and service
incentive leave pay

HELD: The assailed decision is modified.

1. NO. Although petitioner cannot strictly be classified as a managerial employee, nonetheless he is still not entitled to
payment of the aforestated benefits because he falls squarely under another exempt category officers or members of a
managerial staff as defined under sec. 2(c) of the abovementioned implementing rules:

Sec. 2. Exemption. The provisions of this Rule shall not apply to the following persons if they qualify for exemption under
the condition set forth herein:xxx
(c) Officers or members of a managerial staff xxx

That petitioner was paid overtime benefits does not automatically and necessarily denote that petitioner is entitled to such
benefits
 G.R. No. 101761 March 24, 1993
NATIONAL SUGAR REFINERIES CORPORATION, petitioner, vs. NATIONAL LABOR RELATIONS
COMMISSION and NBSR SUPERVISORY UNION, (PACIWU) TUCP, respondents.

Facts:
Petitioner National Sugar Refineries Corporation (NASUREFCO), a corporation which is fully owned and controlled by the
Government, operates three (3) sugar refineries located at Bukidnon, Iloilo and Batangas. Private respondent union represents
the former supervisors of the NASUREFCO Batangas Sugar Refinery.
In 1988, petitioner implemented a Job Evaluation (JE) Program affecting all employees, from rank-and-file to department
heads. We glean from the records that for about ten years prior to the JE Program, the members of respondent union were
treated in the same manner as rank-and file employees. As such, they used to be paid overtime, rest day and holiday pay
pursuant to the provisions of Articles 87, 93 and 94 of the Labor Code as amended.
With the implementation of the JE Program, members of respondent union were re-classified under levels S-5 to S-8 which are
considered managerial staff for purposes of compensation and benefits.
In May 1990, petitioner NASUREFCO recognized herein respondent union, which was organized pursuant to Republic Act
NO. 6715 allowing supervisory employees to form their own unions, as the bargaining representative of all the supervisory
employees at the NASUREFCO Batangas Sugar Refinery.
In June 1990, the members of herein respondent union filed a complainant with the executive labor arbiter for non-payment of
overtime, rest day and holiday pay allegedly in violation of Article 100 of the Labor Code.
In 1991, Executive Labor Arbiter Pido directed NASUREFCO to pay for the wages complained of.
On appeal, in a decision promulgated on July 1991, respondent National Labor Relations Commission (NLRC) affirmed the
decision of the labor arbiter on the ground that the members of respondent union are not managerial employees, and, therefore,
they are entitled to overtime, rest day and holiday pay. Respondent NLRC declared that these supervisory employees are
merely exercising recommendatory powers subject to the evaluation, review and final action by their department heads.

Issue: W/N the Supervisors are considered Managerial Employees and should no longer receive overtime, rest day and
holiday pay.
Ruling: Yes. "Art. 82 Coverage. The provisions 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.
"As used herein, 'managerial employees' refer to those whose primary duty consists of the management of the establishment in
which they are employed or of a department or subdivision thereof, and to other officers or members of the managerial staff."
It is the submission of petitioner that while the members of respondent union, as supervisors, may not be occupying managerial
positions, they are clearly officers or members of the managerial staff because they meet all the conditions prescribed by law
and, hence, they are not entitled to overtime, rest day.
Quintessentially, with the promotion of the union members, they are no longer entitled to the benefits which attach and pertain
exclusively to their positions. Entitlement to the benefits provided for by law requires prior compliance with the conditions set
forth therein. With the promotion of the members of respondent union, they occupied positions which no longer met the
requirements imposed by law. Their assumption of these positions removed them from the coverage of the law, ergo, their
exemption therefrom.
As correctly pointed out by petitioner, if the union members really wanted to continue receiving the benefits which attach to
their former positions, there was nothing to prevent them from refusing to accept their promotions and their corresponding
benefits. As the saying goes by, they could not, as a simple matter of law and fairness, get the best of both worlds at the
expense of NASUREFCO.

Promotion of its employees is one of the jurisprudentially-recognized exclusive prerogatives of management, provided it is
done in good faith. In the case at bar, private respondent union has miserably failed to convince this Court that the petitioner
acted implementing the JE Program. There is no showing that the JE Program was intended to circumvent the law and deprive
the members of respondent union of the benefits they used to receive.
 Far East Agricultural Supply, Inc. vs Jimmy Lebatique
515 SCRA 491 Labor Law Labor Standards Abandonment Service Incentive Leave Field Personnel
In March 1996, Lebatique was hired as a driver by FAR EAST AGRICULTURAL SUPPLY, INC. with a daily wage of
P223.50. His job as a driver includes the delivery of animal feeds to the clients of the company. He must report either in the
morning or in the afternoon to make the deliveries.
On January 24, 2000, Lebatique was suspended by Manuel Uy (brother of FEASIs General Manager Alexander Uy) for
allegedly using the company vehicle illegally.
On the same day, Lebatique filed a complaint for nonpayment of overtime pay against Alexander Uy.
Uy summoned Lebatique and asked why he was claiming overtime pay. Lebatique said since he started working with the
company he has never been paid OT pay. Uy consulted with his brother. On January 29, 2000, Uy told Lebatique to look for
another job.
Lebatique then filed an Illegal Dismissal case against the company.
The Labor Arbiter ruled in favor of Lebatique. Uy was ordered to reinstate Lebatique and at the same time to pay Lebatique his
13th month pay, back wages (time when case was pending), service incentive leave pay and OT pay all amounting to
P196,659.72.
Uy argued that Lebatique was not dismissed and that he was merely suspended; that he abandoned his job; and that Lebatique
was a field personnel not entitled to overtime pay and service incentive leave.
ISSUE: Whether or not Lebatique is a field personnel.
HELD: No. Lebatique is a regular employee.
Uy illegally dismissed Lebatique when he told him to look for another job. Judging at the sequence of event, Lebatique earned
the ire of Uy when he filed a complaint for nonpayment of OT pay on the day Lebatique was suspended by Manuel Uy. Such is
not a valid reason for dismissing Lebatique.
Uy cannot therefore claim that he merely suspended Lebatique.
Further, Lebatique did not abandon his job. His filing of this case is proof enough that he had no intention to abandon his job.
To constitute abandonment as a just cause for dismissal, there must be:
(a) absence without justifiable reason; and
(b) a clear intention, as manifested by some overt act, to sever the employer-employee relationship.
None of the above was proven by Uy.
Also, Lebatique is not a field personnel as defined above for the following reasons:
(1) company drivers, including Lebatique, are directed to deliver the goods at a specified time and place;
(2) they are not given the discretion to solicit, select and contact prospective clients; and
(3) Far East issued a directive that company drivers should stay at the clients premises during truck-ban hours which is from
5:00 to 9:00 a.m. and 5:00 to 9:00 p.m.
As a regular employee, Lebatique is entitled to service incentive leave and OT pay.
The Supreme Court affirmed the Labor Arbiters decision but remanded the case for properly computing Lebatiques OT pay
taking in to consideration the companys time keeping records.

Field Personnel Defined

Field personnel are those who regularly perform their duties away from the principal place of business of the employer and
whose actual hours of work in the field cannot be determined with reasonable certainty.
 Auto Bus Transport vs Bautista
G.R. No. 156367. May 16, 2005

Facts:
Bautista, a driver-conductor of the Autobus transport, was dismissed after his failure to pay an amount demanded by the
company for the repair of the bus damaged in an accident caused by him.
He receives compensation by way of commission per travel.
Bautista complained for illegal dismissal with money claims for nonpayment of 13th month pay and service incentive leave pay
against Autobus.
Auto Bus Defenses:
1. Bautistas employment was replete with offenses involving reckless imprudence, gross negligence, and dishonesty
supported with copies of letters, memos, irregularity reports, warrants of arrest;
2. In the exercise of management prerogative, Bautista was terminated only after providing for an opportunity to explain:
Labor Arbiter dismissed the complaint however awarded Bautista his 13thmonth pay and service incentive leave pay.
Auto Bus appealed. NLRC deleted the 13th month pay award. In the CA, NLRCs decision was affirmed.

Issue: Whether or not respondent is entitled to service incentive leave pay.

Held: Yes.
Under Article 95 of the Labor Code, 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. In Section 1, Rule V, Book III of the Implementing Rules and Regulations of the
Labor Code, the rule shall apply to all, 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 in a
fixed amount for performing work irrespective of the time consumed in the performance thereof.
Petitioners contention that Bautista is not entitled to service incentive leave because he is paid on a purely commission basis
must fail. The phrase following Field personnel should not be construed as a separate classification of employees but is
merely an amplification of the definition of field personnel defined under the Labor Code.
Bautista neither falls under the category field personnel. As defined, field personnel are those whose performance of service is
unsupervised by the employer, the workplace being away from the principal place of business and whose hours and days of
work cannot be determined with reasonable certainty. Bus companies have ways of determining the hours worked by their
drivers and conductors with reasonable certainty. The courts have taken judicial notice of the following:
1. Along the routes traveled, there are inspectors assigned at strategic places who board the bus to inspect the passengers, the
punched tickets, and the conductors reports;
2. There is a mandatory once-a week car barn or shop day, where the bus is regularly checked;
3. The drivers and conductors must be at specified place and time, as they observe prompt departure and arrival;
4. At every depot, there is always a dispatcher whose function is to see to it that the bus and crew leaves and arrives at the
estimated proper time.
By these reasons, drivers and conductors are therefore under constant supervision while in the performance of their work.
 Mercidar Fishing Corporation vs. NLRC, G.R. No. 112574. October 8, 1998; 297 SCRA 440
(Labor Standards Fishermen are not field personnels, Article 82)

Facts: Private respondent employed as a bodegero or ships quartermaster complained of being constructively dismissed by
petitioner corporation when the latter refused him assignments aboard its boats after he had reported to work. The Larbor
Arbiter rendered a decision ordering petitioner corporation to reinstate complainant with back wages, pay him his 13th month
pay and incentive leave. Petitioner claims that it cannot be held liable for service incentive leave pay by fishermen in its employ
as the latter supposedly are field personnel and thus not entitled to such pay under the Labor Code.
Article 82 of the Labor Code provides among others that field personnel shall refer to non-agricultural employees who
regularly perform their duties away from the principal place of business or branch of office of the employer and whose actual
hours of work in the field cannot be determined with reasonable certainty.

Issue: WON fishermen are considered field personnel.

Held: No. Although fishermen perform non-agricultural work away from their employers business offices, the fact remains
that throughout the duration of their work they are under the effective control and supervision of the employer through the
vessels patron or master.
 Realda v. New Age Graphics
G.R. No. 192190 April 25, 2012

Facts: Petitioner Billy Realda was the former machine operator of respondent New Age Graphics Inc.

The company dismissed him on the ground of repeated violations of companys rules and regulations, namely: insubordination,
deliberate slowdown of work, habitual tardiness, absence without official leave and inefficiency.

Furthermore, private respondents refusal to render overtime work when required upon him, contributed to losses incurred by
the petitioner.

Nonetheless, while the CA recognized the existence of just causes for petitioners dismissal, it found that the petitioner is
entitled to nominal damages due to Graphics, Inc.s failure to observe the procedural requirements of due process.

Issue: Whether or not the petitioner exhibited willful disobedience to a reasonable order from his employer thus making his
dismissal valid

Held: Yes, the dismissal is valid but there is a lack of due process.

Ratio: In the present case, the companys business is a printing press whose production schedule is sometimes flexible and
varying. It is only reasonable that workers are sometimes asked to render overtime work in order to meet production deadlines.

The petitioners arbitrary defiance to Graphics, Inc.s order for him to render overtime work constitutes willful disobedience.

Security of tenure is guaranteed by the Constitution but it is not an absolute rule and cannot be used as a legal shield by an
employee who has exhibited habitual tardiness and absenteeism, and willful disobedience.

In Merin v. National Labor Relations Commission, this Court expounded on the principle of totality of infractions as follows:

The totality of infractions or the number of violations committed during the period of employment shall be considered
in determining the penalty to be imposed upon an erring employee. The offenses committed by petitioner should not be
taken singly and separately. Fitness for continued employment cannot be compartmentalized into tight little cubicles
of aspects of character, conduct and ability separate and independent of each other. While it may be true that
petitioner was penalized for his previous infractions, this does not and should not mean that his employment record
would be wiped clean of his infractions. After all, the record of an employee is a relevant consideration in determining
the penalty that should be meted out since an employee's past misconduct and present behavior must be taken together
in determining the proper imposable penalty.

But, the employer, is not exempt from observing due process for every infraction. The Supreme Court found the memorandum
asking for a written explanation within 24 hours to be unreasonable.

Also, there is no indication that Graphics, Inc. issued a second notice, informing the petitioner of his dismissal. The
respondents admit that Graphics, Inc. decided to terminate the petitioners employment after he ceased reporting for work from
the time he received the memorandum requiring him to explain and subsequent to his failure to submit a written
explanation. However, there is nothing on record showing that Graphics, Inc. placed its decision to dismiss in writing and that
a copy thereof was sent to the petitioner.

Dispositive: The petition is DENIED. The Decision of the Court of Appeals in CA-G.R. SP No. 106928 is AFFIRMED with
MODIFICATION in that respondent New Age Graphics, Inc. is hereby ordered to pay petitioner Billy M. Realda nominal
damages in the amount of Thirty Thousand Pesos (P30,000.00) because such dismissal was for a just cause but there is a lack of
due process.
 G.R. No. 173648 January 16, 2012 ABDULJUAHID R. PIGCAULAN,* Petitioner, vs.
SECURITY and CREDIT NVESTIGATION, INC. and/or RENE AMBY REYES, Respondents.

FACTS: It is not for an employee to prove non-payment of benefits to which he is entitled by law. Rather, it is on the employer
that the burden of proving payment of these claims rests.

Canoy and Pigcaulan were both employed by SCII as security guards and were assigned to SCIIs different clients.
Subsequently, however, Canoy and Pigcaulan filed with the Labor Arbiter separate complaints7 for underpayment of salaries
and non-payment of overtime, holiday, rest day, service incentive leave and 13th month pays. These complaints were later on
consolidated as they involved the same causes of action. Canoy and Pigcaulan, in support of their claim, submitted their
respective daily time records reflecting the number of hours served and their wages for the same. They likewise
presented itemized lists of their claims for the corresponding periods served.

RESPONDENT MAINTAINS: that Canoy and Pigcaulan were paid their just salaries and other benefits under the
law; that the salaries they received were above the statutory minimum wage and the rates provided by the Philippine
Association of Detective and Protective Agency Operators (PADPAO) for security guards; that their holiday pay were already
included in the computation of their monthly salaries; that they were paid additional premium of 30% in addition to their basic
salary whenever they were required to work on Sundays and 200% of their salary for work done on holidays; and, that Canoy
and Pigcaulan were paid the corresponding 13th month pay for the years 1998 and 1999. In support thereof, copies of payroll
listings8 and lists of employees who received their 13th month pay, for the said periods.

ISSUE: WON the Honorable Court of Appeals erred when it dismissed the complaint allegedly due to absence of legal and
factual [bases] despite attendance of substantial evidence in the records.

HELD: YES. There was no substantial evidence to support the grant of overtime pay. The Labor Arbiter relied heavily on the
itemized computations they submitted which he considered as representative daily time records to substantiate the award of
salary differentials. The NLRC then sustained the award on the ground that there was substantial evidence of underpayment of
salaries and benefits.

We find that both the Labor Arbiter and the NLRC erred in this regard. The handwritten itemized computations are
self-serving, unreliable and unsubstantial evidence to sustain the grant of salary differentials, particularly overtime pay.
Unsigned and unauthenticated as they are, there is no way of verifying the truth of the handwritten entries stated
therein. Written only in pieces of paper and solely prepared by Canoy and Pigcaulan, these representative daily time
records, as termed by the Labor Arbiter, can hardly be considered as competent evidence to be used as basis to prove
that the two were underpaid of their salaries.

Hence, in the absence of any concrete proof that additional service beyond the normal working hours and days had indeed been
rendered, we cannot affirm the grant of overtime pay to Pigcaulan.

However, with respect to the award for holiday pay, service incentive leave pay and 13th month pay, we affirm and rule that
Pigcaulan is entitled to these benefits [under the Labor Code, Article 94-95].
SCII failed to show any other concrete proof by means of records, pertinent files or similar documents reflecting that
the specific claims have been paid. With respect to 13th month pay, SCII presented proof that this benefit was paid but only
for the years 1998 and 1999. To repeat, the burden of proving payment of these monetary claims rests on SCII, being the
employer.

PETITION GRANTED. Pigcaulan is hereby declared entitled to holiday pay and service incentive leave pay for the years
1997-2000 and proportionate 13th month pay for the year 2000. The case is REMANDED to the Labor Arbiter for further
proceedings to determine the exact amount and to make a detailed computation of the monetary benefits due
 GLOBAL INC. vs. ATIENZA ET AL
G.R. No.L-51612-13 JULY 22, 1986

FACTS: Rosal, herein private respondent, commenced her employment with petitioner Global Incorporated in February, 1970,
as a Sales Clerk. In November 1976 Global Inc. filed with the Department of Labor Regional Office, an application for
clearance to terminate the services of Clarita Rosal, for having violated company rules and regulations by incurring repeated
absences and tardiness. The subject employee was placed under preventive suspension on November 16, 1976 pending
resolution of the application for clearance. Clarita Rosal filed her opposition to the clearance application as well as a counter-
complaint against Global Inc., for illegal dismissal, overtime pay and premium pay.

The officer-in-charge of Regional Office, Ministry of labor Leogardo, Jr. lifted the preventive suspension of Clarita Rosal,
finding her suspension not warranted, and reinstated her to her former position without loss of rights and with full backwages
from the time of preventive suspension up to the date of her actual reinstatement. The Labor Arbiter rendered his decision
dismissing the complaint for illegal dismissal, overtime compensation and premium pay, and the clearance for the
complainants termination is granted.

Rosal appealed the aforesaid decision to the NLRC.Respondents Commissioners Atienza and Quadra modified the appealed
decision, whereby:
(a) respondent is ordered to pay complainant overtime pay for the period Nov. 1, 1974 to Nov. 16, 1976 when she was suspended;
(b) respondent is likewise ordered to pay complainant backwages from Dec. 2, 1976 to May 31, 1978;
(c) the decision of the Labor Arbiter granting clearance to terminate the services of the complainant is affirmed.
Respondent Commissioner Villatuya voted to affirm the Labor Arbiters decision. Hence, the instant petition.

ISSUE: WON
1. Rosal is entitled to overtime pay

HELD: The assailed decision of the NLRC is modified, where the order to pay overtime pay to Rosal is set aside, the order to
pay Rosal backwages affirmed, and the decision granting clearance to terminate the services of Rosal likewise affirmed.

1. NO. We agree with the conclusion of the Labor Arbiter that the same should be denied for want of sufficient factual and
legal basis. No employee is authorized to work after office hours, during Sundays and Holidays unless required by a written
memorandum from the General Manager. During the period from Nov. 1, 1974 to Nov. 16, 1976, no employee of the company
was never required to work after 5:00 in the afternoon. There is nothing in the record except her bare allegations which would
show that she truly and actually rendered said overtime work
 Atok Big Wedge Mutual Benefit Association v Atok Big Wedge Mining Co. Inc.
GR No. L-7349 July 19, 1955

FACTS:
On September 4, 1950, a demand was submitted to petitioner by respondent union through its officers for various concessions,
among which were:
(a) An increase of P0.50 in wages;
(b) Commutation of sick and vacation leave if not enjoyed during the year;
(c) Various privileges, such as free medical care, medicine, and hospitalization;
(d) Right to a closed shop, check off etc.;
(e) No dismissal without prior just cause and with a prior investigation, etc.

Some of the demands were granted by petitioner and the others were rejected. Hearings were held in the Court of Industrial
Relations. After the hearing, the respondent court rendered a decision fixing the minimum wage for the laborers at P3.20
without rice ration and 2.65 a day with rice ration, declaring that additional compensation representing efficiency bonus should
not be included as part of the wage, and making the award effective from September 4, 1950 (the date of the presentation of the
original demand, instead of from April 5, 1951, the date of the amended demand).

Atok Company asked the Court for authority to stop operations & lay off employees and laborers, for the reason that due to the
heavy losses, increased taxes, high cost of materials, negligible quantity of ore deports, and the enforcement of the Minimum
Wage Law, the continued operation of the company and the consequent lay-off of hundreds of laborers and employees.

The parties reached an agreement on October 29, 1952 after the SC decision which states agreement that the following facilities
heretofore given or actually being given by petitioner to its workers and laborers, and which constitute as part of their wages, be
valued as follows:

Rice ration P.55 per day

Housing facility 40 per day
All other facilities at least 85 per day

It is understood that the said amount of facilities valued at the above mentioned prices, may be charged in full or partially by
the Company against laborer or employee, as they may see fit pursuant to the exigencies of its operation.

This was approved by the Court on December 26, 1952.

Later, another case was decided involving the 2 parties giving the employees minimum cash wage of 3.45 a day with rice ration
or 4.00 without rice ration.

ISSUES:
WON the Agreement of October 29, 1952 from the minimum daily wage of P4 would be a waiver of the minimum wage fixed
by the law and hence null and void, since RA 602 sec. 20 provides that no agreement or contract, oral or written, to accept a
lower wage or less than any other under this Act, shall be valid.

(2) WON additional compensation should be paid by the Company to its workers for work rendered on Sundays and holidays
which should be based on the minimum wage of 4.00 and not on the cash portion which is 2.20. [Currently the company pays
additional compensation of 50% based on the 2.20 wage]

HELD:
(1) The Agreement subsists. An agreement to deduct certain facilities received by the laborers from their employer is not a
waiver of the minimum wage fixed by the law. Wage 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 (Sec 2 of RA 602).

Thus, the law permits the deduction of such facilities from the laborers minimum wage of P4, as long as their value is fair and
reasonable
(2) NO. The Company is correct.

Section 4 of the Commonwealth Act No. 444 (Eight Hour Labor Law) provides:
No person, firm, or corporations... shall compel an employee or laborer to work during Sundays and holidays, unless he is paid
an additional sum of at least 25% of his regular remuneration.
Thus, the Company even pays the laborers higher wage than the minimum. Thus, no law is violated.
OTHER NOTES:

DIFFERENCE BETWEEN A SUPPLEMENT and FACILITY

(1) Supplements, defined extra remuneration or special privileges or benefits given to or received by the laborers over and
above their ordinary earnings or wages [vacation and holidays not worked; paid sick leave or maternity leave; overtime rate in
excess of what is required by law; sick, pension, retirement and death benefits; profit sharing; family allowances; Christmas,
war risk and cost of living bonuses or other bonuses other than those paid as a reward for extra output or time spent on the job].

1.

(2) Facilities, defined items of expense necessary for laborers and his familys existence and subsistence, so that by express
provision of the law, they form part of the wage and when furnished by the employer are deductible therefrom since if they are
not so furnished, the laborer would spend and pay for them just the same.
 Philippine Appliance Co. vs Court of AppealsG.R. No. 149434June 3, 2004

Facts:This is a case by appeal for certiorari by the petitioner to set aside the decision of the
Court of Appeals, in connection with the petitioners partial appeal and as well
as the resolutionof the same court, denying the motion for reconsideration. The case involves the payment ofsigning
bonus, to which the employees of the herein petitioner were deemed to be entitled to bythe Court of Appeals, in affirming
the order of the Secretary of Labor and Employment.
The petitioner contends the principle laid down in the case of Caltex vs. Brillantes, which held thatthe award for a signing
bonus should partake the nature of an incentive and premium for
the peaceful negotiations and amicable resolution of disputes. The court on the other hand, arguesthat award of the
signing bonus was affirmed since petitioner itself offered the same as anincentive to expedite the CBA negotiations. This
offer was not withdrawn and was stilloutstanding when the dispute reached the DOLE, therefore still covered by the
maintenance ofexisting benefits clause.

Issue: Whether or not the signing bonus is covered under the maintenance of existing benefitsclause.

Ruling:
No, the signing bonus is no longer covered under the maintenance of existingbenefits clause.
The petitioner can longer be obliged to pay the signing bonus because the requirement ofa speedy and amicable
conclusion of the CBA negotiations was not complied with. As stated inthe case of Meralco vs. The Honorable Secretary
of Labor the court stated that, a signing bonusis a grant motivated by the goodwill generated when a CBA is successfully
negotiated andsigned between the employer and the union. In the present case, such signing bonus cannot beconsidered
covered by the maintenance of existing benefits clause because, the award for asigning bonus is in the nature of an
incentive and premium for peaceful negotiations andamicable resolution of disputes which apparently are not present in
the instant case.
 ETPI VS. ETEU G.R. No. 185665 February 8, 2012

FACTS: Eastern Telecommunications Phils., Inc. (ETPI) is a corporation engaged in the business of providing
telecommunications facilities. Eastern Telecoms Employees Union (ETEU) is the certified exclusive bargaining agent of the
companys rank and file employees. It has an existing CBA with the company to expire in the year 2004 with a Side
Agreement signed on September 3, 2001.

In essence, the labor dispute was a spin-off of the companys plan to defer payment of the 2003 14th, 15th and 16th month
bonuses sometime in April 2004. The companys main ground in postponing the payment of bonuses is due to allege
continuing deterioration of companys financial position which started in the year 2000. However, ETPI
while postponing payment of bonuses sometime in April 2004, such payment would also be subject to availability of funds.
Invoking the Side Agreement of the existing CBA for the period 2001-2004 between ETPI and ETEU, the union strongly
opposed the deferment in payment of the bonuses by filing a preventive mediation complaint with the NCMB.

Later, the company made a sudden turnaround in its position by declaring that they will no longer pay the bonuses until the
issue is resolved through compulsory arbitration.

Thus ETEU filed a Notice of Strike on the ground of unfair labor practice for failure of ETPI to pay the bonuses in gross
violation of the economic provision of the existing CBA.

ETPI insists that it is under no legal compulsion to pay 14th, 15th and 16th month bonuses for the year 2003 and 14th month
bonus for the year 2004 contending that they are not part of the demandable wage or salary and that their grant is conditional
based on successful business performance and the availability of company profits from which to source the same. To thwart
ETEUs monetary claims, it insists that the distribution of the subject bonuses falls well within the companys prerogative,
being an act of pure gratuity and generosity on its part. Thus, it can withhold the grant thereof especially since it is currently
plagued with economic difficulties and financial losses.

ETPI further avers that the act of giving the subject bonuses did not ripen into a company practice arguing that it has always
been a contingent one dependent on the realization of profits and, hence, the workers are not entitled to bonuses if the company
does not make profits for a given year. It asseverates that the 1998 and 2001 CBA Side Agreements did not contractually afford
ETEU a vested property right to a perennial payment of the bonuses. It opines that the bonus provision in the Side Agreement
allows the giving of benefits only at the time of its execution. For this reason, it cannot be said that the grant has ripened into a
company practice.

ISSUES: Is ETPI is liable to pay 14th, 15th and 16th month bonuses for the year 2003 and 14th month bonus for the year 2004
to the members of respondent union?

HELD: YES. From a legal point of view, a bonus is a gratuity or act of liberality of the giver which the recipient has no right to
demand as a matter of right. The grant of a bonus is basically a management prerogative which cannot be forced upon the
employer who may not be obliged to assume the onerous burden of granting bonuses or other benefits aside from the
employees basic salaries or wages.

A bonus, however, becomes a demandable or enforceable obligation when it is made part of the wage or salary or
compensation of the employee. Particularly instructive is the ruling of the Court in Metro Transit Organization, Inc. v.
NLRC, where it was written:
Whether or not a bonus forms part of wages depends upon the circumstances and conditions for its payment. If it is additional
compensation which the employer promised and agreed to give without any conditions imposed for its payment, such as
success of business or greater production or output, then it is part of the wage. But if it is paid only if profits are realized or if a
certain level of productivity is achieved, it cannot be considered part of the wage. Where it is not payable to all but only to
some employees and only when their labor becomes more efficient or more productive, it is only an inducement for efficiency,
a prize therefore, not a part of the wage.

In the case at bench, it is indubitable that ETPI and ETEU agreed on the inclusion of a provision for the grant of 14th, 15th and
16th month bonuses in the 1998-2001 CBA Side Agreement, as well as in the 2001-2004 CBA Side Agreement, which was
signed on September 3, 2001. The provision, which was similarly worded, states:
Employment-Related Bonuses
The Company confirms that the 14th, 15th and 16th month bonuses (other than the 13th month pay) are granted.

A reading of the above provision reveals that the same provides for the giving of 14th, 15th and 16th month bonuses without
qualification. The wording of the provision does not allow any other interpretation. There were no conditions specified in the
CBA Side Agreements for the grant of the benefits contrary to the claim of ETPI that the same is justified only when there are
profits earned by the company. Terse and clear, the said provision does not state that the subject bonuses shall be made to
depend on the ETPIs financial standing or that their payment was contingent upon the realization of profits. Neither does it
state that if the company derives no profits, no bonuses are to be given to the employees. In fine, the payment of these bonuses
was not related to the profitability of business operations.

The records are also bereft of any showing that the ETPI made it clear before or during the execution of the Side Agreements
that the bonuses shall be subject to any condition. Indeed, if ETPI and ETEU intended that the subject bonuses would be
dependent on the company earnings, such intention should have been expressly declared in the Side Agreements or the bonus
provision should have been deleted altogether. Verily, by virtue of its incorporation in the CBA Side Agreements, the grant of
14th, 15th and 16th month bonuses has become more than just an act of generosity on the part of ETPI but a contractual
obligation it has undertaken. Moreover, the continuous conferment of bonuses by ETPI to the union members from 1998 to 2002 by
virtue of the Side Agreements evidently negates its argument that the giving of the subject bonuses is a management prerogative.

Granting arguendo that the CBA Side Agreement does not contractually bind petitioner ETPI to give the subject bonuses,
nevertheless, the Court finds that its act of granting the same has become an established company practice such that it has
virtually become part of the employees salary or wage. A bonus may be granted on equitable consideration when the giving of
such bonus has been the companys long and regular practice. In Philippine Appliance Corporation v. CA, it was
pronounced: To be considered a regular practice, however, the giving of the bonus should have been done over a
long period of time, and must be shown to have been consistent and deliberate. The test or rationale of this rule on long practice
requires an indubitable showing that the employer agreed to continue giving the benefits knowing fully well that said
employees are not covered by the law requiring payment thereof.

The records show that ETPI, aside from complying with the regular 13th month bonus, has been further giving its employees
14th month bonus every April as well as 15th and 16th month bonuses every December of the year, without fail, from 1975 to
2002 or for 27 years whether it earned profits or not. The considerable length of time ETPI has been giving the special grants
to its employees indicates a unilateral and voluntary act on its part to continue giving said benefits knowing that such act was
not required by law. Accordingly, a company practice in favor of the employees has been established and the payments made
by ETPI pursuant thereto ripened into benefits enjoyed by the employees.

NOTES:
1. From the foregoing, ETPI cannot insist on business losses as a basis for disregarding its undertaking. It is manifestly clear
that although it incurred business losses in the year 2000, it continued to distribute 14th, 15th and 16th month bonuses for
said year. Notwithstanding such huge losses, ETPI entered into the 2001-2004 CBA Side Agreement on September 3,
2001 whereby it contracted to grant the subject bonuses to ETEU in no uncertain terms. ETPI continued to sustain losses
for the succeeding years of 2001 and 2002. Still and all, this did not deter it from honoring the bonus provision in the Side
Agreement as it continued to give the subject bonuses to each of the union members in 2001 and 2002 despite its alleged
precarious financial condition. Parenthetically, it must be emphasized that ETPI even agreed to the payment of the 14th,
15th and 16th month bonuses for 2003 although it opted to defer the actual grant in April 2004. All given, business losses
could not be cited as grounds for ETPI to repudiate its obligation under the 2001-2004 CBA Side Agreement.
2. The Court finds no merit in ETPIs contention that the bonus provision confirms the grant of the subject bonuses only on a
single instance because if this is so, the parties should have included such limitation in the agreement. Nowhere in the Side
Agreement does it say that the subject bonuses shall be conferred once during the year the Side Agreement was signed.
3. The giving of the subject bonuses cannot be peremptorily withdrawn by ETPI without violating Article 100 of the Labor Code:
Art. 100. Prohibition against elimination or diminution of benefits. Nothing in this Book shall be construed to eliminate or in
any way diminish supplements, or other employee benefits being enjoyed at the time of promulgation of this Code.
The rule is settled that any benefit and supplement being enjoyed by the employees cannot be reduced, diminished,
discontinued or eliminated by the employer. The principle of non-diminution of benefits is founded on the constitutional
mandate to protect the rights of workers and to promote their welfare and to afford labor full protection.
 William Barroga vs Data Center College et al
Labor Law Labor Standards Protection To Labor When Is There No Diminution of Benefits

In November 1991, William Barroga was hired as an instructor by Data Center College in its Laoag City, Ilocos Norte campus.
In June 1992, Barroga was re-assigned to Vigan, Ilocos Sur. Part of the deal for his re-assignment was that Barroga will receive
a monthly allowance of P1,200.00 for board and lodging while performing his job in Vigan. However, Data Center made it
clear in writing that Barroga is only entitled to the additional allowance while assigned in Vigan and such allowance may be
changed or forfeited if he will be re-assigned somewhere. In 1994, he was recalled to Laoag. Later, Barroga was also assigned
as the temporary Head of Education; he was also given a scholarship grant to support his post-graduate studies. In 2003,
Barroga was advised that he will be transferred to Bangued, Abra. Barroga refused because his father was sick and second, he
found out that there will be no additional allowance this time and that he will be working there as an instructor and not as a
Head of Education. In the same year, he filed a labor case against Data College for constructive dismissal. Barroga alleged that
the real purpose of his transfer is to demote him to the rank of an instructor from being the Head for Education performing
administrative functions and that his re-assignment will entail an indirect reduction of his salary or diminution of pay
considering that no additional allowance will be given to cover for board and lodging expenses. He claims that such additional
allowance was given in the past and therefore cannot be discontinued and withdrawn without violating the prohibition against
non-diminution of benefits.
ISSUE: Whether or not the absence of additional allowance in Barrogas supposed re-assignment constitutes a diminution of
benefits.
HELD: No. It is true that as a general rule, benefits and perks enjoyed by employees cannot be reduced and discontinued or
diminished. But this rule is only applicable to grants or benefits which are founded on an express policy or has ripened into a
practice over a long period which is consistent and deliberate. In the case at bar, Barrogas additional allowance while in Vigan
is not permanent. In fact, Data College made clear that such allowance is only applicable while Barroga is in Vigan and such
allowance is no longer applicable if he is going to be assigned somewhere. Further, Data College showed that it is experiencing
financial difficulties hence the need to withdraw the scholarship previously granted to Barroga. On the issue of his removal as
Head for Education, the same is valid. Barroga was merely assigned in a temporary capacity, such designation is terminable at
the pleasure of Data College which made such appointment.