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6. Mercidar Fishing Corporation vs. NLRC, G.R. No. 112574. October 8, 1998

Facts: Private respondent employed as a “bodegero” or ship’s 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 employer’s 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 vessel’s patron or master.

7. UNION OF FILIPRO EMPLOYEES (UFE), petitioner, vs. BENIGNO VIVAR, JR., NATIONAL LABOR RELATIONS
COMMISSION and NESTLÉ PHILIPPINES, INC. (formerly FILIPRO, INC.) G.R. No. 79255 January 20, 1992

We used to have ten (10) regular holidays. This is the reason for the 251 divisor, used by some companies in computing
the daily wage, which represents the 365 days of the year, less 52 Saturdays, 52 Sundays and the 10 legal holidays. The
new law added one more regular holiday – the Eid’l Fitr. We thus have eleven (11) regular holidays under R.A. 9492:

 New Year’s Day (January 1)

 Maundy Thursday (Movable date)
 Good Friday (Movable date)
 Eid’l Fitr (Movable date)
 Araw ng Kagitingan – Bataaan and Corregidor Day (Monday nearest April 9)
 Labor Day (Monday nearest May 1)
 Independence Day (Monday nearest June 12)
 National Heroes Day (Last Monday of August)
 Bonifacio Day (Monday nearest November 30)
 Christmas Day (December 25)
 Rizal Day (Monday nearest December 30)

The Labor Code provides that every worker shall be paid his daily wage during regular holidays. Employers are now
required to pay for an extra regular holiday.

Facts:

On November 8, 1985, respondent Filipro, Inc. (now Nestle Philippines, Inc.) filed with the National Labor Relations
Commission (NLRC) a petition for claims of its monthly paid employees for holiday pay.

Abitrator Vivar: Filipro to pay its monthly paid employees holiday pay pursuant to Art 94 of Labor Code, subject to
exclusions and limitations in Art 82.

Filipro filed a motion for clarification seeking (1) the limitation of the award to three years, (2) the exclusion of salesmen,
sales representatives, truck drivers, merchandisers and medical representatives (hereinafter referred to as sales
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personnel) from the award of the holiday pay, and (3) deduction from the holiday pay award of overpayment for
overtime, night differential, vacation and sick leave benefits due to the use of 251 divisor.

Petitioner UFE answered that the award should be made effective from the date of effectivity of the Labor Code, that
their sales personnel are not field personnel and are therefore entitled to holiday pay, and that the use of 251 as divisor
is an established employee benefit which cannot be diminished.

Arbitrator Vivar: On January 14, 1986, the respondent arbitrator issued an order declaring that the effectivity of the
holiday pay award shall retroact to November 1, 1974, the date of effectivity of the Labor Code. He adjudged, however,
that the company’s sales personnel are field personnel and, as such, are not entitled to holiday pay. He likewise ruled
that with the grant of 10 days’ holiday pay, the divisor should be changed from 251 to 261 and ordered the
reimbursement of overpayment for overtime, night differential, vacation and sick leave pay due to the use of 251 days
as divisor.

Issues:

1) Whether or not Nestle’s sales personnel are entitled to holiday pay; and

2) Whether or not, concomitant with the award of holiday pay, the divisor should be changed from 251 to 261 days and
whether or not the previous use of 251 as divisor resulted in overpayment for overtime, night differential, vacation and
sick leave pay.

Held:

1. Sales personnel are not entitled to holiday pay.

Under Article 82, field personnel are not entitled to holiday pay. Said article defines field personnel as “non-agritultural
employees who regularly perform their duties away from the principal place of business or branch office of the
employer and whose actual hours of work in the field cannot be determined with reasonable certainty.”

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

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

Rule IV Holidays with Pay

Sec. 1. Coverage — This rule shall apply to all employees except:

xxx xxx xxx

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

Hence, in deciding whether or not an employee’s actual working hours in the field can be determined with reasonable
certainty, query must be made as to whether or not such employee’s time and performance is constantly supervised by
the employer.

2. The divisor in computing the award of holiday pay should still be 251 days.

While in that case the issue was whether or not salesmen were entitled to overtime pay, the same rationale for their
exclusion as field personnel from holiday pay benefits also applies.
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The petitioner union also assails the respondent arbitrator’s ruling that, concomitant with the award of holiday pay, the
divisor should be changed from 251 to 261 days to include the additional 10 holidays and the employees should
reimburse the amounts overpaid by Filipro due to the use of 251 days’ divisor.

The 251 working days divisor is the result of subtracting all Saturdays, Sundays and the ten (10) legal holidays from the
total number of calendar days in a year. If the employees are already paid for all non-working days, the divisor should be
365 and not 251.

In the petitioner’s case, its computation of daily ratio since September 1, 1980, is as follows:

monthly rate x 12 months / 251 days

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

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

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

To illustrate, if prior to the grant of holiday pay, the employee’s annual salary is P25,100, then dividing such figure by
251 days, his daily rate is P100.00 After the payment of 10 days’ holiday pay, his annual salary already includes holiday
pay and totals P26,100 (P25,100 + 1,000). Dividing this by 261 days, the daily rate is still P100.00. There is thus no merit
in respondent Nestle’s claim of overpayment of overtime and night differential pay and sick and vacation leave benefits,
the computation of which are all based on the daily rate, since the daily rate is still the same before and after the grant
of holiday pay.

SC Decision:

The Court thereby resolves that the grant of holiday pay be effective, not from the date of promulgation of the
Chartered Bank case nor from the date of effectivity of the Labor Code, but from October 23, 1984, the date of
promulgation of the IBAA case (Insular Bank of Asia and America Employees’ Union (IBAAEU) v. Inciong, where the court
declared that Sec 2, Rule IV, Book III of IRR which excluded monthly paid employees from holiday pay benefits, are null
and void).

WHEREFORE, the order of the voluntary arbitrator in hereby MODIFIED. The divisor to be used in computing holiday pay
shall be 251 days. The holiday pay as above directed shall be computed from October 23, 1984. In all other respects, the
order of the respondent arbitrator is hereby AFFIRMED.