4.

Conditions of Employment When the country is at war or when any other national or local emergency has been declared
by the National Assembly or the Chief Executive;
A. Hours of Work
When it is necessary to prevent loss of life or property or in case of imminent danger to
LC. Art. 82-90 public safety due to an actual or impending emergency in the locality caused by serious
Art. 82. Coverage. The provisions of this Title shall apply to employees in all establishments accidents, fire, flood, typhoon, earthquake, epidemic, or other disaster or calamity;
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 When there is urgent work to be performed on machines, installations, or equipment, in
him for support, domestic helpers, persons in the personal service of another, and workers order to avoid serious loss or damage to the employer or some other cause of similar nature;
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 When the work is necessary to prevent loss or damage to perishable goods; and
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. Where the completion or continuation of the work started before the eighth hour is
"Field personnel" shall refer to non-agricultural employees who regularly perform their necessary to prevent serious obstruction or prejudice to the business or operations of the
duties away from the principal place of business or branch office of the employer and whose employer.
actual hours of work in the field cannot be determined with reasonable certainty. Any employee required to render overtime work under this Article shall be paid the
Art. 83. Normal hours of work. The normal hours of work of any employee shall not exceed additional compensation required in this Chapter.
eight (8) hours a day. Art. 90. Computation of additional compensation. For purposes of computing overtime and
Health personnel in cities and municipalities with a population of at least one million other additional remuneration as required by this Chapter, the "regular wage" of an
(1,000,000) or in hospitals and clinics with a bed capacity of at least one hundred (100) shall employee shall include the cash wage only, without deduction on account of facilities
hold regular office hours for eight (8) hours a day, for five (5) days a week, exclusive of time provided by the employer.
for meals, except where the exigencies of the service require that such personnel work for six Omnibus Rules, Book III, Rules I, IA, II
(6) days or forty-eight (48) hours, in which case, they shall be entitled to an additional 1. Regulation; Rationale
compensation of at least thirty percent (30%) of their regular wage for work on the sixth day.
For purposes of this Article, "health personnel" shall include resident physicians, nurses, Manila Terminal Co. Inc., v CIR
nutritionists, dietitians, pharmacists, social workers, laboratory technicians, paramedical No. L-4148 | Jul 16, 1952 | Paras, CJ
technicians, psychologists, midwives, attendants and all other hospital or clinic personnel. ● Sept 1945 – Manila Terminal Company, Inc. undertook the
Art. 84. Hours worked. Hours worked shall include (a) all time during which an employee is arrastre service in some of the piers in Manila’s Port Area at the
required to be on duty or to be at a prescribed workplace; and (b) all time during which an
employee is suffered or permitted to work. request and under the control of the US Army.
Rest periods of short duration during working hours shall be counted as hours worked. ● Petitioners hires some 30 men as watchmen on 12-hour shifts at a
Art. 85. Meal periods. Subject to such regulations as the Secretary of Labor may prescribe, it compensation of P3 per day for the day shift and P6 per day for
shall be the duty of every employer to give his employees not less than sixty (60) minutes the night shift.
time-off for their regular meals.
Art. 86. Night shift differential. Every employee shall be paid a night shift differential of not
● Feb 1946 – Petitioner began postwar operation of the service at
less than ten percent (10%) of his regular wage for each hour of work performed between the request and under the control of the Bureau of Customs.
ten o’clock in the evening and six o’clock in the morning. ● The watchmen continued in the service with a number of
Art. 87. Overtime work. Work may be performed beyond eight (8) hours a day provided that substitutions and additions. Salaries were raised to P4 per day for
the employee is paid for the overtime work, an additional compensation equivalent to his the day shift and P6.25 per day for the night shift.
regular wage plus at least twenty-five percent (25%) thereof. Work performed beyond eight
hours on a holiday or rest day shall be paid an additional compensation equivalent to the ● Mar 1947 – Dominador Jimenez, a member of the Manila Terminal
rate of the first eight hours on a holiday or rest day plus at least thirty percent (30%) thereof. Relief and Mutual Aid Association (MTRMAA), sent a letter to the
Art. 88. Undertime not offset by overtime. Undertime work on any particular day shall not Dept of Labor, requesting that the matter of overtime pay be
be offset by overtime work on any other day. Permission given to the employee to go on investigated. Nothing was done by the Department.
leave on some other day of the week shall not exempt the employer from paying the
additional compensation required in this Chapter.
● Apr 1947 – Victorino Magno Cruz and 5 other employees, also
Art. 89. Emergency overtime work. Any employee may be required by the employer to members of the MTRMAA, filed a 5-point demand with the Dept of
perform overtime work in any of the following cases: Labor, including overtime pay, but the Dept failed to do anything
 again.
● May 1947 – Petitioner instituted a system of strict 8-hour shifts.
● Jul 1947 – The MTRMAA was organized for the first time, having
been granted a certificate by the Dept of Labor. A petition was
later filed with the Court of Industrial Relations praying that the
petitioner be ordered to pay its watchmen or police force
overtime pay from the commencement of their employment.
● May 1949 – Petitioner’s police force was consolidated with the
Manila Harbor Police of the Customs Patrol Service, under the
Commissioner of Customs and Sec of Finance.
● CIR Decision – CIR ordered petitioner to pay its police force
additional overtime compensation. With regard to the period after
the watchmen have been integrated into the Manila Harbor Police,
the presiding judge ruled that the court has no jurisdiction
because it affects the Bureau of Customs, which cannot be sued
without consent of the State. Both the petitioner and the
MTRMAA filed MRs, but were both denied.
ISSUES
W/N the CIR has jurisdiction to render money judgment involving
obligations in arrears – YES
· Under CA No. 103, the court is empowered to make the order for
the purpose of settling disputes between the employer and the
employee.
W/N the agreement under which the police force were paid certain
specific wages for 12-shifts, included overtime compensation - NO
· Petitioner’s Argument: the contract between it and the MTRMAA
was to the effect that the latter were to work 12 hours a day at
certain rates of pay, including overtime compensation. Petitioner
merely relied on the facts that its watchmen had worked in 12-hour
shifts at specific mages per day and that no complaint has been
made until March and April 1947.
· A contract of employment, which provides for a weekly wage for a
specified number of hours, sufficient to cover both the statutory
minimum wage and overtime compensation, if computed on the
basis of the statutory minimum, and which makes no provision for a
fixed hourly rate or that the weekly wage includes overtime
compensation, does not meet the requirements of the Act (Eight-
Hour Labor Law)
· Furthermore, the watchmen received the same salaries from when
they worked 12-hour shifts and when the petitioner later instituted
strict 8-hour shifts.
o When the watchmen were placed on strict 8-hour shifts, the
petitioner adjusted the salaries and gave P5.5 daily for both day and
night shifts, increasing the salary for the day shift but decreasing that of
the night shift.
W/N MTRMAA was barred from recovery because of a waiver of the right
to overtime compensation and/or by estoppel and laches - NO
· Petitioner’s Argument: the MTRMAA had agreed to the 12-hour
shifts for more than 18 months.
· The Court found that the watchmen involved did not entered the
service of the petitioner at one time. In fact, only one of them
entered on Sept 1945, the others entered during the rest of the
year, and in the following years until 1949.
· Detective & Protective Bureau, Inc. vs. CIR and UEWA– The Court
held that because there was no agreement to the effect that the 2-
day vacation given by the Bureau to its employees corresponded to
the wages for extra work, and if any, the agreement would probably
be null and void ab initio for being contrary to the provisions of the
Eight-Hour Law, the employees in this case could not have waived
their right to extra compensation impliedly, because they could not
have expressly waived it. The same applies to the case at bar.
· The principle of estoppel and laches cannot be invoked against the
MRTMAA. In the first place, it would be contrary to the spirit of the
Eight-Hour Labor Law under which the laborers cannot waive their
right to extra compensation.
· The law principally obligates the employer to observe it, so much so
that it punishes the employer for its violation and leaves the
employee or laborer free and blameless.
· The employee or laborer is in such a disadvantageous position as to
be naturally reluctant or even apprehensive in asserting any claim
which may cause the employer to devise a way for exercising his
right to terminate the employment.
W/N the nullity of the employment contract already precludes a recovery
by MTRMAA – NO
· Parties are not in pari delicto. The employee in rendering extra
service at the request of his employer has a right to assume that the
 latter has complied with the requirement of the law, and therefore
has obtained the required permission from the Department of
Labor.
· The Eight-Hour Law, in providing that "any agreement or contract
between the employer and the laborer or employee contrary to the
provisions of this Act shall be null and void ab initio," intended the
provision for the benefit of the laborers or employees. The employer
cannot invoke any violation of the Act to exempt him from liability
for extra compensation.
W/N CA 444 does not authorize the recovery of back overtime pay
· Sections 3 and 5 of Commonwealth Act 444 expressly provide for
the payment of extra compensation in cases where overtime
services are required, with the result that the employees or laborers
are entitled to collect such extra compensation for past overtime
work. To hold otherwise would be to allow an employer to violate
the law by simply failing to provide for and pay overtime
compensation
RULING
CIR decision is affirmed.
2. Coverage
Omnibus Rules, Book III, Rule I, Secs. 1-2
SECTION 1. General statement on coverage. — The provisions of this Rule shall apply to all
employees in all establishments and undertakings, whether operated for profit or not,
except to those specifically exempted under Section 2 hereof.
SECTION 2. Exemption. — The provisions of this Rule shall not apply to the following
persons if they qualify for exemption under the conditions set forth herein:
(a) Government employees whether employed by the National Government or any of its
political subdivision, including those employed in government-owned and/or controlled
corporations;
(b) Managerial employees, if they meet all of the following conditions:
(1) Their primary duty consists of the management of the establishment in which
they are employed or of a department or sub-division thereof.
(2) They customarily and regularly direct the work of two or more employees
therein.
(3) They have the authority to hire or fire employees of lower rank; or their
suggestions and recommendations as to hiring and firing and as to the promotion
or any other change of status of other employees, are given particular weight.
(c) 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 policies of their employer;
(2) Customarily and regularly exercise discretion and independent judgment; and
(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 work
week to activities which are not directly and closely related to the performance
of the work described in paragraphs (1), (2) and (3) above.
(d) Domestic servants and persons in the personal service of another if they perform such
services in the employer's home which are usually necessary or desirable for the
maintenance and enjoyment thereof, or minister to the personal comfort, convenience, or
safety of the employer as well as the members of his employer's household.
(e) Workers who are paid by results, including those who are paid on piece-work, "takay,"
"pakiao" or task basis, and other non-time work if their output rates are in accordance with
the standards prescribed under Section 8, Rule VII, Book Three of these regulations, or
where such rates have been fixed by the Secretary of Labor and Employment in accordance
with the aforesaid Section.
(f) Non-agricultural field personnel if they regularly perform their duties away from the
principal or branch office or place of business of the employer and whose actual hours of
work in the field cannot be determined with reasonable certainty.
Exemptions
a. Government employees
Art. 291 (276)
Art. 276. Government employees. The terms and conditions of employment of all
government employees, including employees of government-owned and controlled
corporations, shall be governed by the Civil Service Law, rules and regulations. Their
salaries shall be standardized by the National Assembly as provided for in the New
Constitution. However, there shall be no reduction of existing wages, benefits and other
terms and conditions of employment being enjoyed by them at the time of the adoption of
this Code.
Omnibus Rules, Book III, Rule I, Sec. 2 (a)
(a) Government employees whether employed by the National Government or any of its
political subdivision, including those employed in government-owned and/or controlled
corporations;
Exception: Employees of GOCCs created under the Corp. Code
Const. Art. IX-B, Sec. 2 (1)
The civil service embraces all branches, subdivisions, instrumentalities, and agencies of the
Government, including government-owned or controlled corporations with original
charters.
b. Managerial employees
 Art. 219 (212) (m)
"Managerial employee" is one who is vested with the powers or prerogatives to lay down
and execute management policies and/or to hire, transfer, suspend, lay-off, recall,
discharge, assign or discipline employees. Supervisory employees are those who, in the
interest of the employer, effectively recommend such managerial actions if the exercise of
such authority is not merely routinary or clerical in nature but requires the use of
independent judgment. All employees not falling within any of the above definitions are
considered rank-and-file employees for purposes of this Book.
Omnibus Rules, Book III, Rule I, Sec. 2 (b) ©
(b) Managerial employees, if they meet all of the following conditions:
(1) Their primary duty consists of the management of the establishment in which
they are employed or of a department or sub-division thereof.
(2) They customarily and regularly direct the work of two or more employees
therein.
(3) They have the authority to hire or fire employees of lower rank; or their
suggestions and recommendations as to hiring and firing and as to the promotion
or any other change of status of other employees, are given particular weight.
(c) 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 policies of their employer;
(2) Customarily and regularly exercise discretion and independent judgment;
and
(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 work
week to activities which are not directly and closely related to the performance
of the work described in paragraphs (1), (2) and (3) above.
International Pharmaceuticals Inc v NLRC & Virgie C. Quintia
March 9, 1998 || Mendoza, J.
FACTS
● International Pharmaceuticals Inc. (IPI) employed private
respondent Virginia Quintia as Medical Director of its Research
and Development department, replacing one Villaraza.
○ The contract of employment is for a term one year
(starting March 19, 1983), subject to renewal by mutual
consent of the parties at least 30 days before its
expiration.
○ Quintia was also working as a full-time faculty member at
Cebu Doctors Hospital when she was employed by IPI.
● In the same year, IPI ventured into the development of herbal
medicines (alleged to be experimental only). IPI avers that the
government’s requirement of hiring a pharmacologist is the
reason while Quintia was hired.
● Quintia remained employed after her contract expired on March
19, 1984. She performed work not only as Medical Director but
also as company physician. This continued until July 12, 1986.
● July 12, 1986 – she received a memorandum officially terminating
her services allegedly because of the expiration of her contract.
● Quintia filed a complaint charging IPI with illegal dismissal +
prayer for reinstatement.
Quintia argues that:
She was illegally dismissed. The reason for her termination was because
the association officers of IPI resented her for pointing out the inequality
in the imposition of interest rate between rank and file employees and
association officers.
IPI argues that:
Quintia is not a regular employee but only a project employee, whose
employment was terminated upon the abandonment of the herbal
medicine project.
The extension of contract was by virtue of an oral agreement which
lasted until IPI decided that nothing would come out of the project.
LA: in favor of Quintia (she is a regular employee)
NLRC: affirmed
ISSUE: W/N Quintia is a regular employee and was illegally dismissed?
YES
RATIO:
1. RE: REGULAR EMPLOYMENT STATUS. Quintia became a regular
employee after the expiration of the written contract on March
18, 1984.
In Brent School, Inc. v. Zamora, it was held that although work done under
a contract is necessary and desirable in relation to the usual business of
the employer, a contract for a fixed period may nonetheless be made so
long as it is entered into freely, voluntarily and knowingly by the parties.
IN THIS CASE, the NLRC held that the written contract between petitioner
and private respondent was valid, but, after its expiration on March 18,
1984, as IPI had decided to continue her services, it must respect the
security of tenure of the employee in accordance with Art. 280. When
complainant was allowed to continue working without the benefit of a
contract after the expiration of the 1-year period provided in their written
contract, that act completely changed the complexion of the
relationship between the parties.
The NLRC cited the following facts (which the Court agrees to) to justify its
ruling:
a. Quintia was continued as Medical Director and even given the
additional function of company physician after the expiration of
the original contract;
b. She undertook various civic activities for and in behalf of IPI, such
as conducting free clinics and giving out IPI products;
c. She did work which was necessary and desirable in relation to the
trade or business of IPI; and
d. Her employment lasted for more than (3) three years.
Quintia was not hired as a project employee either because there was no
mention whatsoever of any project or of any consultancy in the contract.
It should also be added that Quintia was hired to replace one Villaraza,
which suggests that the position to which she was appointed by petitioner
was an existing one, so much so that after the termination of Quintia’s
employment, somebody else (Paz Wong) was appointed in her place. (If
Quintia’s employment was for a particular project which had allegedly
been terminated, why would there be a need to replace her?)
Neither does the fact that private respondent was teaching full-time at
the Cebu Doctors College negate her regular status since this fact does
not affect the nature of Quintias work. Whether one’s employment is
regular is not determined by the number of hours one works, but by the
nature of the work and by the length of time one has been in that
particular job.
2. RE: MANAGERIAL EMPLOYEES. Quintia is a regular employee
albeit a managerial one, thus, not covered by the LC provisions
on hours of work.
Quintia was working not as a consultant but as a regular employee albeit
a managerial one. The fact that she was not required to report at a fixed
hour or to keep fixed hours of work does not detract from her status as a
regular employee. As IPI itself admits, Quintia was a managerial employee
and therefore not covered by the Labor Code provisions on hours of work.
3. RE: ILLEGAL DISMISSAL. Quintia was illegally dismissed.
It may be that an employer is allowed wider discretion in terminating
employment in respect of managerial personnel compared to
rank-and-file employees, and that such managerial employees can be
separated from the service for loss of confidence. However, a mere
allegation of such ground is not sufficient. The loss of confidence must
be substantiated by evidence. The burden of proof is on the employer to
show grounds justifying the loss of confidence (Western Shipping Agency
Inc v NLRC). IN THIS CASE, IPI was not able to justify such ground.
Moreover, IPI failed to accord due process to Quintia in terminating her
services. The copies furnished to her were insufficient to satisfy the
requirements of notice. She was also not given an opportunity to be
heard.
Reinstatement is no longer feasible due to the antagonism generated by
this case and Quintia’s own preference for separation pay.
PETITION DISMISSED.
IPI TO AWARD SEPARATION PAY TO QUINTIA equivalent to 1 month salary
for every year of service, and BACKWAGES equivalent to 3 years from July
12, 1986.
c. Field Personnel
Omnibus Rules, Book III, Rule I, Sec. 2 (f)
(f) Non-agricultural field personnel if they regularly perform their duties away from the
principal or branch office or place of business of the employer and whose actual hours of
work in the field cannot be determined with reasonable certainty.
Merdicar Fishing Corp v NLRC & Fermin Agao
Mendoza | 1998
FACTS:
● Agao was employed by Mercidar Fishing Corporation as a
bodegero/shimps quartermaster. He complained that he was
constructively dismissed when MFC refused him assignments
aboard its boats
● Agao version: he was sick and allowed to go on leave without pay
for a month, but when he went back to work, he couldn't be
reinstated immediately. Thereafter, MFC refused to give him
work. Agao asked for a certificate of employment, but MFC would
not give it unless he resigned. Agao was prevented from entering
the premises as he didn't submit his resignation.
 ● MFC version: it was Agao who abandoned his work for being
absent without leave for 3 months. MFC still assigned him to
another vessel but Agao was left behind. Later, Agao asked for a
certificate of employment on the pretext that he was applying to
another fishing company. He refused to get the certificate and
resign unless he was given separation pay.
● LA: in favor of Agao, ordering reinstatement and backwages, 13
month pay, and incentive leave pay for 1990.
● NLRC: affirmed, denying MFC's claim that it can't be held liable for
service incentive leave pay by fisherman in its employ as the
latter supposedly are filed personnel and thus not entitled to such
pay under the LC
ISSUES & RESOLUTION:
W/N fishing crew members like Agao can be classified as field personnel
under Art 82 of the LC -- YES
Petitioner: Agao has no statutory right to service incentive leave pay as
his work is performed away from the principal place of business
[ ART. 82. Coverage. - The provisions of this Title [Working Conditions and
Rest Periods] shall apply to employees in all establishments and
undertakings whether for profit or not, but not to government
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.
Field personnel shall refer to non-agricultural 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 requirement that actual hours of work in the field cannot be
determined with reasonable certainty must be read with Rule IV
Book 3 of the IRR which provides that the rule shall apply to all
employees, except (e) Field personnel and other employees
whose time and performance is unsupervised by the employer
(UFE v Vicar)
● in deciding whether or not an employees actual working hours in
the field can be determined with reasonable certainty, query
must be made as to whether or not such employees time and
performance is constantly supervised by the employ
● Here, during the entire course of their fishing voyage, fishermen
employed have no choice but to remain on board the vessel.
Throughout the duration of work, they are under the effective
control and supervision of petitioner through the vessels patron
or master
W/N MFC had constructively dismissed Agao
● actual findings of quasi-judicial bodies are generally binding as
long as supported by evidence (in this case, medical certificate of
fitness)
PETITION DISMISSED.
See: Far East Agricultural Supply Inc v Jimmy Lebatique
F: Far East hired Jimmy as a truck driver who complained of nonpayment
of overtime work. NLRC held that he was a field personnel and therefore
not entitled to overtime and service incentive leave pay.
H: He is not a field personnel as contemplated in Art. 82 of the Labor Code
because Far East’s company drivers are directed to deliver goods at a
specified time and place, not given the discretion to solicit, select and
contact prospective clients, and Far East issued a directive that company
drivers should stay at the client’s premises during truck ban hours. They
are also under control and supervision of management officers. He must
be considered a regular employee whose tasks are usually necessary and
desirable to the usual trade and business of the company. Therefore he is
entitled to the benefits. D.
d. Dependent Family Members
e. Domestic Helpers (now, domestic workers or Kasambahays)
Art. 141. Coverage. This Chapter shall apply to all persons rendering services in
households for compensation.
"Domestic or household service" shall mean service in the employer’s home which is
usually necessary or desirable for the maintenance and enjoyment thereof and includes
ministering to the personal comfort and convenience of the members of the employer’s
household, including services of family drivers.
Art. 145. Assignment to non-household work. No househelper shall be assigned to work
in a commercial, industrial or agricultural enterprise at a wage or salary rate lower than
that provided for agricultural or non-agricultural workers as prescribed herein.
Omnibus Rules, Book III, Rule I, Sec. 2 (d)
(d) Domestic servants and persons in the personal service of another if they perform such
services in the employer's home which are usually necessary or desirable for the
maintenance and enjoyment thereof, or minister to the personal comfort, convenience, or
safety of the employer as well as the members of his employer's household.
Exception: Assignment in a Commercial, Industrial or Agricultural Enterprise
See: RA 10361 (Batas Kasambahay); IRR of RA 10361
 f. Persons in the Personal Service of Another
Omnibus Rules, Book III, Rule I, Sec. 2 (d)
d) Domestic servants and persons in the personal service of another if they perform such
services in the employer's home which are usually necessary or desirable for the
maintenance and enjoyment thereof, or minister to the personal comfort, convenience, or
safety of the employer as well as the members of his employer's household.
g. Piece-Rate Workers
Omnibus Rules, Book III, Rule I, Sec. 2 (e)
(e) Workers who are paid by results, including those who are paid on piece-work, "takay,"
"pakiao" or task basis, and other non-time work if their output rates are in accordance
with the standards prescribed under Section 8, Rule VII, Book Three of these regulations,
or where such rates have been fixed by the Secretary of Labor and Employment in
accordance with the aforesaid Section.
i. Definition
Labor Congress of the Phil (in behalf of Ana Marie Ocampo & 98 others) v.
NLRC & Empire Food Products
J. Davide | May 21, 1998
(Note, 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)
● 99 named as petitioners were rank-and file employees of Empire
Food Products (Empire), a food and fruit processing company
● They filed a complaint for payment of money claims and violation
of labor standard laws with NLRC
● They also filed a petition for direct certification of Labor Congress
of the Philippines as their bargaining representative
● ·Petitioners (represented by LCP President Nacarro) and Empire
(represented by Gonzalo Kehyeng and Evelyn Kehyeng) entered
into a MOA
● Certified LCP as the sole and exclusive bargaining agent among
the rank-and-file employees of Empire Food Products for
purposes of collective bargaining with respect to wages, hours of
work and other terms and conditions of employment
● With regard to the NLRC complaint, they agreed to resolved it in
the CBA
● Hence, the MOA provided for the proper adjustment of wages,
withdrawal of the NLRC case, non-interference or any unfair labor
practice act, etc.
● LCP submitted to Empire a proposal for collective bargaining
● Petitioners filed a complaint against Empire for unfair labor
practice by way of illegal lockout/dismissal, union busting,
violation of the MOA, underpayment of wages and damages.
● Labor Arbiter Ariel C. Santos absolved Empire of the charges of
unfair labor practice, union busting, violation of the
memorandum of agreement, underpayment of wages and denied
petitioners prayer for actual, moral and exemplary damages.
Labor Arbiter Santos, however, directed the reinstatement of the
individual complainants.
● NLRC remanded the case to LA for further proceedings
○ Complainant did not present any witness while Empire
presented four witnesses
○ Complainant failed to specify under what provision of Art
248 Empire violated as to constitute unfair labor practice
● LA dismissed the complaints for lack of merit. NLRC affirmed in
toto.
○ No prima facie evidence of unfair labor practice
○ They were piece-rate workers, hence not entitled to
benefits
○ It was actually laborers who abandoned jobs.
○ They were not underpaid
● · Hence this special civil action for certiorari
W/N NLRC COMMITED GRAVE ABUSE OF DISCRETION – YES
Invocation of the general rule that factual findings of NLRC bind the Court
is unavailing
The complainants should have been afforded the time and opportunity to
fully substantiate their claims against Empire
● Court noted that the LA failed to take into account the
testimonies, position papers and consolidated affidavits
● Other individual complainants should have been summoned with
the end in view of receiving their testimonies.
● Judgment should [have been] rendered only based on the
conflicting positions of the parties. The Labor Arbiter is called
upon to consider and pass upon the issues of fact and law raised
by the parties.
Hence, the case must be remanded to the LA for further proceedings
Also, the decision does not contain a dispositive portion. Therefore, it
does not resolve the issues at hand. There is no decision which could be
carried out by way of execution.
● LA is thus directed to include in his clarificatory decision a
dispositive portion
ON THE DISMISSAL OF EMPLOYEES
● LA and NLRC relied on Security Guard Cairo that on Jan 21, 1991
pet refused to work. Hence, they abandoned their work
● Court held that 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.
○ The Court has held in several cases that one could not
possibly abandon his work and shortly thereafter
vigorously pursue his complaint for illegal dismissal
○ By directing in his first decision the reinstatement of
petitioner employees, the Labor Arbiter impliedly held
that they did not abandon their work but were not
allowed to work without just cause.
On whether or not they are entitled to reinstatement and other benefits
· That petitioners are piece workers (pakyao) does not imply that
they are not regular employees entitled to reinstatement
· Three factors led the Court to the conclusion that although they are
piece workers, they are regular employees of the company
1. Their job of repacking snack food was necessary or desirable in
the usual business of private respondents, who were engaged in
the manufacture and selling of such food products
2. Petitioners worked for private respondents throughout the year,
their employment not having been dependent on a specific
project or season
3. They have worked for a considerable length of time for the
employees
Thus, while petitioners’ mode of compensation was on a per piece basis,
the status and nature of their employment was that of regular employees.
● Burden of proving just cause in dismissal on employer
○ Empire failed to discharged such
● In considering petitioners’ employment as terminated, Empire
violated their rights to security of tenure and constitutional rights
to due process
● Violated Sec 2, Omnibus Rules Implementing the Labor Code
(Notice of Dismissal - shall furnish him a written notice stating the
particular acts or omission constituting the grounds for his
dismissal. In cases of abandonment of work, the notice shall be
served at the workers last known address.)
● Hence, they are entitled to reinstatement with full back wages
pursuant to Art 279 amended by RA 6715 of the Labor Code
○ Considering the length of time elapsed since dismissal
and the perceptible resentment and enmity between
petitioners and private respondents which necessarily
strained their relationship, reinstatement would be
impractical and would not promote of the best interests
of the parties, payment of separation pay is more proper.
● Petitioners, as piece-rate workers having been paid by the piece,
there is need to determine the varying degrees of production and
days worked by each worker.
○ The determination of the value of back wages is thus best
left to the National Labor Relations Commission.
● As to the other benefits, namely, holiday pay, premium pay, 13th
month pay and service incentive leave, Court held that petitioners
are so entitled to these benefits.
○ Petitioners, as piece-rate workers do not fall within the
exception provided for in the Rules Implementing the
Labor Code excluding certain employees from receiving
such benefits (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.)
○ Further, in Section 8 (b), Rule IV, Book III piece workers
are specifically mentioned as being entitled to holiday
pay.
● They are also entitled to overtime pay
○ According to Sec. 2(e), Rule I, Book III of the
 Implementing Rules, 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 the case at hand, however, Empire did not allege
adherence to the standards set forth in Sec. 8 nor with
the rates prescribed by the Secretary of Labor.
○ The employees are thus beyond the ambit of the
exception.
○ NLRC best position to determine proper value
On alleged violation of right to self-organization
● Evidence do not support claim of said violation
● They relied on doc documentary evidence which, per se, did not
prove any wrongdoing on private respondents part.
○ Mere pleadings stating their causes of action – mere
allegations, which are not proven during trial
○ Consolidated Affidavit of Merit and Position Paper, which
also contained mere allegations
○ Petition for certification election and the subsequent
order of certification merely proved that petitioners
sought and acquired the status of bargaining agent for all
rank-and-file employees.
○ MOA presented did not prove the non-compliance of
Empire absent any evidence of any overt
ii. Nature of work of piece-rate workers
Best Wear Garments v Adelaida De Lemos & Cecille Ocubillo
● Best Wear Garments (BWG), as represented by General Manager
Sitosta, hired CECILE OCUBILLO and ADELAIDA DE LEMOS as
sewers on piece-rate basis by BWG. Cecile was hired in 1993,
while Adelaida was hired in 1994.
● In 2004, both Cecile and Adelaida filed a complaint for illegal
dismissal with prayer for backwages and other accrued benefits,
separation pay, service incentive leave pay and attorney’s fees
against BWG. They have the following allegations:
○ That BWG, through Sitosta, arbitrarily transferred them to
other areas of operation of BWGs garments company,
which they said amounted to constructive dismissal as it
resulted in less earnings for them.
○ They claim that they were transferred to different
operations where they could not earn as much as before
because the by-products and garments they are now
tasked to make require a longer period of time to finish,
thus resulting to less earnings for them.
○ That their request to be returned to their previous
stations were rejected.
■ Adelaida claims that her alleged arbitrary transfer
was caused her refusal to render overtime work
up to 7PM.
■ While Cecile claims that her alleged arbitrary
transfer was caused excessive absences since
2001. Her absences were due to the fact that her
father became very sick since 2001; aside from
this, she herself became very sickly.
■ Sitosta assigned them to different machines
“whichever is available” and that “there were
times, they could not earn for a day because
there was no available machine to work for.
● BWG denied the allegations of their 2 employees, claiming that:
○ De Lemos informed Sitosta that due to personal problem,
she intends to resign from the company. She then
demanded the payment of separation pay. Ocubillo
likewise intimated her intention to resign and demanded
separation pay.
○ Sitosta explained to both De Lemos and Ocubillo that the
company had no existing policy on granting separation
pay.
○ As to the allegation of respondents that the reason for
their transfer was their refusal to render overtime work
until 7PM, BWG asserted that respondents are piece-rate
workers and hence they are not paid according to the
number of hours worked.
PROCEDURAL
● LA - in favor of the workers
 ○ Since respondents neither resigned nor abandoned their
jobs, the ambiguities in the circumstances surrounding
their dismissal are resolved in favor of the workers.
● NLRC - in favor of BWG
○ Respondents’ transfer was a valid exercise of
management prerogative.
○ The kind of work it performs is dependent into with its
client which specifies the work it has to perform. Thus,
the work to be performed by its employees will depend
on the work specifications in the contract. Thus, if
respondents have been assigned to different operations,
it was pursuant to the requirements of its contracts
● CA - in favor of the workers
○ Transfer was unreasonable, inconvenient and prejudicial
to them which is tantamount to a constructive dismissal.
ISSUE: W/N CA erred in ruling for Cecile and Adelaide - YES
● GENERAL RULE: an employer may transfer or assign employees
from one office or area of operation to another, provided there is
no demotion in rank or diminution of salary, benefits, and other
privileges, and the action is not motivated by discrimination,
made in bad faith, or effected as a form of punishment or
demotion without sufficient cause. = PROPER EXERCISE OF
MANAGEMENT PREROGATIVE
● Being piece-rate workers assigned to individual sewing machines,
respondents’ earnings depended on the quality and quantity of
finished products.
○ Workers under piece-rate employment have no fixed
salaries and their compensation is computed on the basis
of accomplished tasks.
● That their work output might have been affected by the change in
their specific work assignments does not necessarily imply that
any resulting reduction in pay is tantamount to constructive
dismissal.
○ Some garments or by-products took a longer time to
finish so they could not earn as much as before. Also, the
type of sewing jobs available would depend on the
specifications made by the clients of BWG.
○ Under these circumstances, it cannot be said that the
transfer was unreasonable, inconvenient or prejudicial to
the respondents.
● Such deployment of sewers to work on different types of
garments as dictated by present business necessity is within the
ambit of management prerogative which, in the absence of bad
faith, ill motive or discrimination, should not be interfered with by
the courts.
○ The objection to the transfer being grounded on solely
upon the personal inconvenience or hardship that will
be caused to the employee by reason of the transfer is
not a valid reason to disobey an order of transfer.
● There was no evidence that respondents were dismissed from
employment. In fact, petitioners expressed willingness to accept
them back to work. There being no termination of employment
by the employer, there can be no award of backwages.
○ Backwages may be granted only when there is a finding of
illegal dismissal.
○ Where there is no evidence of dismissal, the remedy is
reinstatement but without backwages.
3. Normal Hours of Work
Art. 83. Normal hours of work. The normal hours of work of any employee shall not
exceed eight (8) hours a day.
Health personnel in cities and municipalities with a population of at least one million
(1,000,000) or in hospitals and clinics with a bed capacity of at least one hundred (100)
shall hold regular office hours for eight (8) hours a day, for five (5) days a week, exclusive
of time for meals, except where the exigencies of the service require that such personnel
work for six (6) days or forty-eight (48) hours, in which case, they shall be entitled to an
additional compensation of at least thirty percent (30%) of their regular wage for work on
the sixth day. For purposes of this Article, "health personnel" shall include resident
physicians, nurses, nutritionists, dietitians, pharmacists, social workers, laboratory
technicians, paramedical technicians, psychologists, midwives, attendants and all other
hospital or clinic personnel.
a. In general
LC. Art. 83, par. 1
The normal hours of work of any employee shall not exceed eight (8) hours a day.
b. Health Personnel
LC. Art. 82, par. 2
Health personnel in cities and municipalities with a population of at least one million
(1,000,000) or in hospitals and clinics with a bed capacity of at least one hundred (100)
shall hold regular office hours for eight (8) hours a day, for five (5) days a week, exclusive
of time for meals, except where the exigencies of the service require that such personnel
work for six (6) days or forty-eight (48) hours, in which case, they shall be entitled to an
additional compensation of at least thirty percent (30%) of their regular wage for work on
the sixth day. For purposes of this Article, "health personnel" shall include resident
physicians, nurses, nutritionists, dietitians, pharmacists, social workers, laboratory
technicians, paramedical technicians, psychologists, midwives, attendants and all other
hospital or clinic personnel.
See again: Legend Hotel (Manila) v Hernani Realuyo
F: Joey worked as a pianist at the Legend Hotel’s Tanglaw Restaurant 3 to
6 times a week from 7-10 pm. Management then notified him that as a
cost-cutting measure his service would no longer be required. Legend
denied the existence of an employer-employee relationship with
respondent, insisting that he had been only a talent engaged to provide
live music three hours a day, 2 times per week.
H: That Joey worked for less than eight hours/day was of no consequence
and did not detract from the CA’s finding on the existence of the
employer-employee relationship. In providing that the " normal hours of
work of any employee shall not exceed8 hours a day," Article 83 of the
Labor Code only set a maximum of number of hours as "normal hours of
work" but did not prohibit work of less than eight hours.
4. Compensable Hours of Work – In General
a. On duty
LC. Art. 84 (a)
Hours worked shall include (a) all time during which an employee is required to be on duty
or to be at a prescribed workplace
Omnibus Rules, Book III, Rule I, Sec. 3 (a)
SECTION 3. Hours worked. — The following shall be considered as compensable hours
worked:
(a) All time during which an employee is required to be on duty or to be at the employer's
premises or to be at a prescribed work place; and
Sec. 4 (a) SECTION 4. Principles in determining hours worked. — The following general
principles shall govern in determining whether the time spent by an employee is
considered hours worked for purposes of this Rule:
(a) All hours are hours worked which the employee is required to give his employer,
regardless of whether or not such hours are spent in productive labor or involve physical
or mental exertion.
b. At work
LC. Art. 84 (b)
Hours worked shall include (b)all time during which an employee is suffered or permitted
to work.
Omnibus Rules, Book III, Rule I, Sec. 3 (b)
An employee need not leave the premises of the work place in order that his rest period
shall not be counted, it being enough that he stops working, may rest completely and may
leave his work place, to go elsewhere, whether within or outside the premises of his work
place.
5. Specific Rules
a. Rest period
i. Short duration or “coffee break”
LC. Art. 84, 2nd par. Rest periods of short duration during working hours shall be counted
as hours worked.
Omnibus Rules, Book III, Rule I, Sec. 7, 2nd par. Rest periods or coffee breaks running
from five (5) to twenty (20) minutes shall be considered as compensable working time.
ii. More than 20 min
Omnibus Rules, Book III, Rule I, Sec. 4 (b)
SECTION 4. Principles in determining hours worked. — The following general principles
shall govern in determining whether the time spent by an employee is considered hours
worked for purposes of this Rule:
(b) An employee need not leave the premises of the work place in order that his rest
period shall not be counted, it being enough that he stops working, may rest completely
and may leave his work place, to go elsewhere, whether within or outside the premises of
his work place.cralaw
b. Meal period
i. Regular Meal Period (One hour)
LC. Art. 85 Meal periods. Subject to such regulations as the Secretary of Labor may
prescribe, it shall be the duty of every employer to give his employees not less than sixty
(60) minutes time-off for their regular meals.
Omnibus Rules, Book III, Rule I, Sec. 7, 1st par.
SECTION 7. Meal and Rest Periods. — Every employer shall give his employees, regardless
of sex, not less than one (1) hour time-off for regular meals, except in the following cases
when a meal period of not less than twenty (20) minutes may be given by the employer
provided that such shorter meal period is credited as compensable hours worked of the
employee:
(a) Where the work is non-manual work in nature or does not involve strenuous physical
exertion;
(b) Where the establishment regularly operates not less than sixteen (16) hours a day;
(c) In case of actual or impending emergencies or there is urgent work to be performed on
machineries, equipment or installations to avoid serious loss which the employer would
otherwise suffer; and
(d) Where the work is necessary to prevent serious loss of perishable goods.
Philippine Airlines v NLRC & Dr. Herminio Fabros
February 2, 1999 | Puno
FACTS:
● Dr. Herminio Fabros was employed as flight surgeon at Philippine
Airlines. He was assigned at the PAL Medical Clinic and was on
duty from 4PM – 12MN.
● On Feb 17, 1994, 7PM, the doctor left the clinic to have his dinner
at his residence, which was about five-minute drive away. A few
minutes later, the clinic received an emergency call that one of its
employees, Mr. Manuel Acosta, had suffered a heart attack. The
nurse on duty called Fabros at home to inform him of the
emergency. The patient arrived at the clinic at 7:50PM and the
nurse immediately rushed him to the hospital. When Fabros
reached the clinic at around 7:51 in the evening, the nurse had
already left with the patient. Mr. Acosta died the following day.
● Upon learning about the incident, PAL Medical Director Dr.
Godofredo B. Banzon ordered the Chief Flight Surgeon to conduct
an investigation. In his explanation, Fabros asserted that he was
entitled to a 30-min meal break; that he immediately left his
residence upon being informed by the nurse about the
emergency and he arrived at the clinic a few minutes later; that
the nurse panicked and brought the patient to the hospital
without waiting for him.
● The management charged private respondent with abandonment
of post while on duty. He was given 10 days to submit a written
answer to the administrative charge. In his answer, Fabros
reiterated the assertions in his previous explanation. The
company then decided to suspend him for 3 months. Fabros filed
a complaint for illegal suspension against petitioner.
● LA: suspension was illegal; PAL to pay the amount equivalent to
all the benefits during his period of suspension + P500,000.00
moral damages
● NLRC: affirmed LA decision, MR denied
ISSUE: WON Dr. Fabros was guilty of abandonment of post
RULING: NO.
● Fabros left the clinic that night only to have his dinner at his
house, which was only a few minutes away from the clinic. His
whereabouts were known to the nurse on duty so that he could
be easily reached in case he immediately left his home and
returned to the clinic. These facts belie petitioner’s claim of
abandonment.
● Petitioner argues that being a full-time employee, private
respondent is obliged to stay in the company premises for not
less than 8 hours. Hence, he may not leave the company premises
during such time, even to take his meals. This is not true.
According to Articles 83 and 85 of the Labor Code:
Art. 83. Normal hours of work. The normal hours of work of any
employee shall not exceed eight (8) hours a day.
…exclusive of time for meals, except where the exigencies of the
service require that such personnel work for six (6) days or forty-eight
(48) hours, in which case they shall be entitled to an additional
compensation of at least thirty per cent (30%) of their regular wage for
work on the sixth day. For purposes of this Article, health personnel
shall include: resident physicians, nurses, nutritionists, dieticians,
pharmacists, social workers, laboratory technicians, paramedical
technicians, psychologists, midwives, attendants and all other hospital
or clinic personnel.
Art. 85. Meal periods. Subject to such regulations as the Secretary of
Labor may prescribe, it shall be the duty of every employer to give his
employees not less than sixty (60) minutes time-off for their regular
meals.
● Section 7, Rule I, Book III of the Omnibus Rules Implementing the
Labor Code further states:
Sec. 7. Meal and Rest Periods. Every employer shall give his employees,
regardless of sex, not less than one (1) hour time-off for regular meals,
except in the following cases when a meal period of not less than
twenty (20) minutes may be given by the employer provided that such
shorter meal period is credited as compensable hours worked of the
employee;
a. Where the work is non-manual work in nature or does not involve
strenuous physical exertion;
b. Where the establishment regularly operates not less than sixteen
hours a day;
c. In cases of actual or impending emergencies or there is urgent
work to be performed on machineries, equipment or installations
to avoid serious loss which the employer would otherwise suffer;
and
d. Where the work is necessary to prevent serious loss of perishable
goods.
Rest periods or coffee breaks running from five (5) to twenty (20) minutes
shall be considered as compensable working time.
● Thus, the eight-hour work period does not include the meal
break. Nowhere in the law may it be inferred that employees
must take their meals within the company premises. Employees
are not prohibited from going out of the premises as long as they
return to their posts on time. Private respondents act, therefore,
of going home to take his dinner does not constitute
abandonment.
● PARTIALLY GRANTED. The portion of the assailed decision
awarding moral damages to private respondent is DELETED. All
other aspects of the decision are AFFIRMED.

ii. Shorter Meal Period

Omnibus Rules, Book III, Rule I, Sec. 7, 1st par.
SECTION 7. Meal and Rest Periods. — Every employer shall give his employees, regardless
of sex, not less than one (1) hour time-off for regular meals, except in the following cases
when a meal period of not less than twenty (20) minutes may be given by the employer
provided that such shorter meal period is credited as compensable hours worked of the
employee:
(a) Where the work is non-manual work in nature or does not involve strenuous physical
exertion;
(b) Where the establishment regularly operates not less than sixteen (16) hours a day;
(c) In case of actual or impending emergencies or there is urgent work to be performed on
machineries, equipment or installations to avoid serious loss which the employer would
otherwise suffer; and
(d) Where the work is necessary to prevent serious loss of perishable goods.
 c. Waiting time
Omnibus Rules, Book III, Rule I, Sec. 5 (a)
SECTION 5. Waiting time. — (a) Waiting time spent by an employee shall be considered as
working time if waiting is an integral part of his work or the employee is required or
engaged by the employer to wait.cralaw
Teofilo Arica etal. (577 others) v NLRC & Standard (Phil) Fruits Co.
Feb. 28, 1989; Paras, J
Facts:
● Teofilo et. al. filed a case in the LA claiming that the 30 minute
assembly prior to their work day should be compensated.
● LA dismissed the case on the basis of res judicata. (Note: res
judicata is when there has already been a prior ruling of the court
about the case with the same cause of action and parties).
● NLRC also dismissed the case.
● They contend that the preliminary activities conducted by the
workers of STANFILO in the assembly area should be
compensable as working time (from 5:30 to 6:00 o’clock in the
morning) since these preliminary activities are necessarily and
primarily for STANFILO’s benefit.
● The preliminary activities of that the workers practice are:
o First there is the roll call. This is followed by getting their
individual work assignments from the foreman.
o Thereafter, they are individually required to accomplish
the Laborer’s Daily Accomplishment Report during which
they are often made to explain about their reported
accomplishment the following day.
o Then they go to the stockroom to get the working
materials, tools and equipment.
o Lastly, they travel to the field bringing with them their
tools, equipment and materials.
● All these activities take 30 minutes to accomplish.
● STANFILO, on the other hand, alleges that the complaint is not
new.
o Insists on res judicata.
o It was the very same claim brought against STANFILO by
the same group of rank and file employees in the case of
Associated Labor Union (ALU) and Standard Fruit
Corporation which was filed in April 27, 1976 when ALU
was the bargaining agent of the STANFILO’s rank and file
workers.
o The case involved a claim for “waiting time”, as the
workers were required to assemble at a designated area
at least 30 minutes prior to the start of their scheduled
working hours “to ascertain the work force available for
the day by means of a roll call, for the purpose of
assignment or reassignment of employees to such areas
in the plantation where they are most needed.”
o The Minister of Labor in this case held that the 30 minute
assembly time cannot be considered as “waiting time”.
▪ It was long practiced and institutionalized by
mutual consent of the parties.
▪ The 30 minute assembly is a deeply-rooted,
routinary practice of the employees and the
proceedings attendant thereto are not infected
with complexities as to deprive the workers the
time to attend to other personal pursuits.
▪ They are not new employees as to require the
company to delivery long briefings regarding their
respective work assignments.
▪ Workers’ houses are situated right on the area
where the farms are located, thus after the roll
call, which does not necessarily require the
personal presence, they can go back to their
houses to attend to some chores.
▪ Thus, they are not subject to the absolute
control of the company during this period,
otherwise, their failure to report in the assembly
time would justify the company to impose
disciplinary measures.
▪ The CBA does not contain any provision about
this. Thus, it demonstrated the fact that the 30
minute assembly time was not primarily intended
for the interests of the employer, but ultimately
for the employees to indicated their availability or
non-availability for work during every working
day.
Issue: WoN the 30 minute activity of the petitioners before their
schedules working time is compensable under the Labor Code - NO
Held: Ruling of the Minister of Labor is Affirmed.
Dispositive: PREMISES CONSIDERED, the petition is DISMISSED for lack of
merit and the decision of the National Labor Relations Commission is
AFFIRMED. SO ORDERED.
d. On call
i. Working while On Call
Omnibus Rules, Book III, Rule I, Sec. 5 (b), 1st sentence. An employee who is required to
remain on call in the employer's premises or so close thereto that he cannot use the time
effectively and gainfully for his own purpose shall be considered as working while on call.
ii. Not working while On Call
Omnibus Rules, Book III, Rule I, Sec. 5 (b), 2nd sentence. An employee who is not
required to leave word at his home or with company officials where he may be reached is
not working while on call.
Union of Sual Power Plant Employees (USPPE) v Team Sual Corp
e. Inactive due to work interruptions
Omnibus Rules, Book III, Rule I, Sec. 4 (d) The time during which an employee is inactive
by reason of interruptions in his work beyond his control shall be considered working time
either if the imminence of the resumption of work requires the employee's presence at
the place of work or if the interval is too brief to be utilized effectively and gainfully in the
employee's own interest.
University of Pangasinan Faculty Union v University of Pangasinan
February 20, 1984 | Gutierrez, Jr., J.
Facts
● The Union’s members are full-time professors, instructors, and
teachers of the University, their salaries paid on a regular monthly
basis
● In Nov and Dec 1981, the teachers were fully paid their regular
monthly salaries. However, from Nov 7 to Dec 5, during the sem
break, they were not paid their ECOLA (Emergency Cost of Living).
o University claims that the teachers are not entitled thereto
because the sem break is not an integral part of the school
year and there being no actual services rendered by the
teachers during said period, the principle of "No work, no
pay" applies.
● Aside from their regular loads, some of the teachers were given extra
loads to handle during the 1981-1982 school year.
o Some had extra loads to teach on Sept 21, 1981, but were
unable to teach as classes in all levels throughout the country
were suspended (although said days was proclaimed by the
President of the Philippines as a working holiday)
o Those with extra loads to teach on said day claimed they
were not paid their salaries for those loads, but the private
respondent claims otherwise.
Issues & Ruling
1. W/N the teachers are entitled to ECOLA during the sem break from
Nov 7 to Dec 5, 1981 - YES
● PD’s 1614, 1634, 1678, and 1713 provide:
o On Allowances of Fulltime Employees: “Employees shall be
paid in full the required monthly allowance regardless of the
number of their regular working days if they incur no
absences during the month. If they incur absences without
pay, the amounts corresponding to the absences may be
deducted from the monthly allowance . . ."
o On Leave of Absence Without Pay: "Leave of Absence
Without Pay", that "All covered employees shall be entitled
to the allowance provided herein when they are on leave of
absence with pay."
● The sem breaks are in the nature of work interruptions beyond the
employees’ control. It cannot be considered as absences within the
meaning of the law for which deductions may be made from monthly
allowances. The provision on absences without pay contemplates a
"no work" situation where the employees voluntarily absent
themselves.
● IN THE CASE AT BAR, the teachers do not, ad voluntatem, absent
themselves during sem breaks. Rather, they are constrained to take
mandatory leave from work. It was not the intention of the framers
of the law to allow employers to withhold employee benefits by the
simple expedient of unilaterally imposing "no work" days and
consequently avoiding compliance with the mandate of the law for
those days
2. W/N the ECOLA is granted upon payment of receiving salary - YES
● Implementing Rules and Regulations of Wage Order No. 1
 o SECTION 5. Allowance for Unworked Days. — dismissal, nonpayment of overtime pay, and nonpayment of
"a) All covered employees whether paid on a monthly or
daily basis shall be entitled to their daily living allowance
when they are paid their basic wage."
● The intention of the law is to grant ECOLA upon the payment of
basic wages – “No pay, no ECOLA”
● IN THE CASE AT BAR, the teachers cannot be on leave without pay so
as not to be entitled to ECOLA because they were paid their wages in
full for the months of November and December of 1981,
notwithstanding the intervening sem break.
● Omnibus Rules Implementing the Labor Code
o Sec. 4. Principles in Determining Hours Worked. — The
following general principles shall govern in determining
whether the time spent by an employee is considered hours
worked for purposes of this Rule:
(d) The time during which an employee is inactive by reason
of interruptions in his work beyond his control shall be
considered time either if the imminence of the resumption of
work requires the employee’s presence at the place of work
or if the interval is too brief to be utilized effectively and
gainfully in the employee’s own interest.
● The sem break scheduled is an interruption beyond petitioner’s
control and it cannot be used "effectively nor gainfully in the
employee’s interest’. Thus, the sem break may also be considered as
"hours worked."
f. Necessary Work after normal working hours
Omnibus Rules, Book III, Rule I, Sec. 4 (c) If the work performed was necessary, or it
benefited the employer, or the employee could not abandon his work at the end of his
normal working hours because he had no replacement, all time spent for such work shall
be considered as hours worked, if the work was with the knowledge of his employer or
immediate supervisor.
Robina Farms Cebu/Universal Robina Corp v Elizabeth Villa
(Bersamin, 2016)
FACTS
● Respondent filed a case for illegal suspension, illegal
service incentive leave pay in the Regional Arbitration Branch
of the NLRC in Cebu City. She was employed as a sales clerk
since August 1981.
● In the latter part of 2001, petitioner enticed her to avail of the
special retirement program. On March 2, 2002, she was asked
to explain her failure to issue invoices for unhatched eggs for
January and February 2002. She explained that the invoices
weren’t delivered on time because of delay with the delivery
receipts. She was then suspended for 10 days from March 8-
19. Upon reporting back to work, she was told that her
application was disapproved. She was then advised by one
Mrs. De Guzman to tender her resignation with a request for
financial assistance. She manifested that she wanted to
return to work but the petitioner confiscated her gate pass,
prevented her from returning to the premises and replaced
her with another employee.
● Petitioner said that when respondent was asked (by Anita
Gabatan of the accounting department ) to explain her failure
to issue the invoices, she said that she was busy. Gabatan
then referred the matter to Florabeth Zanoria who relayed it
to Lily Ngochua who gave respondent a chance to explain.
Petitioner added that after the administrative hearing,
respondent was found to have violated the company rule on
the timely issuances of invoices which caused delay in the
payment of buyers. Payments depended on the receipt of the
invoices. She was suspended and upon her return she
followed up her application for retirement. Mrs. De Guzman
then informed her that management did not approve benefits
equivalent to 86% of her salary rate.
LA: reinstatement but denied claim for backwages and overtime pay
because she did not adduce evidence on the overtime performed. Villa
was not dismissed from employment
NLRC: reversed LA – petitioner’s appeal was defective and dismissed
outright because it lacked verification and certificate of non-forum
shopping. Respondent was illegally dismissed.
ISSUES:
WON petitioner was entitled to overtime pay and service leave
incentive pay– NO to overtime pay but yes to service leave incentive pay.
Overtime pay
● Entitlement to pay must be established by proof that the
overtime work was actually performed. The burden of proving
entitlement is on the employee because the benefit is not
incurred in the normal cause of business. Failure to approve such
actual performance transgresses the principles of fair play and
equity. Also, NLRC relied on the daily time records and this was
misplaced. Such records do not show if the overtime work was
granted prior authorization by management.
● Rule 1 Book III of Omnibus Rules Implementing the Labor Code:
Section 4. Principles in determining hours worked. – The following
general principles shall govern in determining whether the time
spent by an employee is considered hours worked for purposes of
this Rule: (c) If the work performed was necessary, or it benefited
the employer, or the employee could not abandon his work at the
end of his normal working hours because he had no replacement,
all time spent for such work shall be considered as hours worked,
if the work was with the knowledge of his employer or immediate
supervisor.
Service incentive leave pay
● Although the grant of vacation or sick leave with pay of at least 5
days could be credited as compliance with the duty to pay service
incentive leave, the employer is obliged to prove that it fully
paid the accrued service incentive leave pay to the employee. LA
originally awarded it because petitioner failed to present proof
that respondent was justly paid.
WON Villa was illegally dismissed – YES. Petitioner violated Article 282
and the twin notice rule. Respondent did not plan to retire or sever her
relationship with petitioner.
On retirement: Retirement is the result of a bilateral act of both the
employer and the employee based on their voluntary agreement that
upon reaching a certain age, the employee agrees to sever his
employment. In case of early retirement programs, the offer of benefits
must be certain while the acceptance to be retired must be absolute. The
acceptance of the employee must be explicit, voluntary, free and
uncompelled.
Employees are free to accept the employer's offer to lower the
retirement age if they feel they can get a better deal with the retirement
plan presented by the employer. Thus, having terminated petitioner
solely on the basis of a provision of a retirement plan which was not
freely assented to by her, respondent was guilty of illegal dismissal
(Jaculbe v Siliman University).
ITC, private respondent was not admitted immediately after her
suspension. When she reported back to work, Mrs. De Guzman told her
not to report back anymore because her application for retirement was
approved even if she did not intend to sever her relationship with her
employer.
Procedural side: When respondent averred petitioner’s statement that
she voluntarily failed to report to work, petitioner did not refute the
same. Basic is the rule that matters not controverted are deemed
admitted. To contest this allegation at this point of proceeding is not
allowed for it is a settled rule that matters, theories or arguments not
brought out in the original proceedings cannot be considered on review
or appeal where they arc raised for the first time. To consider the alleged
facts and arguments raised belatedly would amount to trampling on the
basic principles of fair play, justice and due process.
Other issues:
WON Villa’s appeal should be treated as an unsigned pleading because
she accompanied her appeal with the same verification attached to her
position paper – NO, The verification is a mere formal requirement
intended to secure and to give assurance that the matters alleged in the
pleading are true and correct. The requirement is complied with when
one who has the ample knowledge to swear to the truth of the allegations
in the complaint or petition signs the verification, or when the matters
contained in the petition have been alleged in good faith or are true and
correct.
➢ DENIED; NLRC decision affirmed with the modification that the
award for overtime pay be deleted
g. Lectures, Meeting, Trainings
Omnibus Rules, Book III, Rule I, Sec. 6 Lectures, meetings, training programs. —
Attendance at lectures, meetings, training programs, and other similar activities shall not
be counted as working time if all of the following conditions are met:
(a) Attendance is outside of the employee's regular working hours;
(b) Attendance is in fact voluntary; and
(c) The employee does not perform any productive work during such attendance.
h. Travel Time
Hilario Rada v NLRC & Philmor Consultants
FACTS:
● Petitioner Hilario Rada was hired as a driver by private
respondent Philnor Consultants and Planners, Inc. (Philnor) for
the construction supervision phase of the Manila North
Expressway Extension, Second Stage (MNEE Stage 2) under a
"Contract of Employment for a Definite Period".
o This was for a term of 24 months effective July 1, 1977.
o Contained in the contract is Annex A which provided that
the Employer does not have a continuing need for the
services of the Employee beyond the termination date of
the contract, that his services shall automatically
terminate without notice upon the completion of the
specified phase of the project, and that the engagement
of his services is coterminous with the same and not with
the whole project.
● When Rada's first contract of employment expired on June 30,
1979, MNEE Stage 2 was not yet finished because of inadequate
funding. A second Contract of Employment for a Definite Period
of 10 months (Jul. 1, 1979 to Apr. 30, 1980) was executed. Philnor
renewed Rada’s contract again for a period of 19 months (May 1,
1980 to Nov. 30, 1981). This third contract was extended for a
number of times, the last extension being for 3 months (Oct. 1 to
Dec. 31, 1985). Rada’s contract was not extended beyond
December 1985 because he had no more work to do in the
project.
● On May 20, 1987, Rada filed before the NLRC a Complaint for
non-payment of separation pay and overtime pay.
● Philnor filed its Position Paper alleging that Rada was not illegally
terminated since he was hired under three distinct contracts of
employment, each of which was for a definite period, and since
the project was finished, his contract was no longer extended.
● Rada filed an Amended Complaint alleging that he was illegally
dismissed and that he was not paid overtime pay although he
was made to render three hours overtime work from Monday to
Saturday for a period of three years. He claimed that:
o He was a regular employee entitled to security of tenure.
o The contract of employment for a definite period is
against public policy and a clear circumvention of the law
designed merely to evade any benefits or liabilities under
the statute.
o His position as driver was essential, necessary and
desirable to the conduct of the business of Philnor.
o He rendered overtime work until 6:00 p.m. daily except
Sundays and holidays and, therefore, he was entitled to
overtime pay.
● Philnor alleged in its Supplemental Position Paper that:
o The office hours observed in the project were from 7:00
a.m. to 4:00 p.m. Mondays through Saturdays.
o Philnor adopted the policy of allowing certain employees
to bring home project vehicles to afford fast and free
transportation to and from the project field office to
avoid project delays and inefficiency due to employee
tardiness caused by transportation problem.
o Rada was allowed to use a project vehicle which he used
to pick up and drop off some ten employees along
Epifanio de los Santos Avenue (EDSA), on his way home to
Marikina, Metro Manila.
o When he was absent or on leave, another employee living
in Metro Manila used the same vehicle in transporting the
same employees.
o The time used by petitioner to and from his residence to
the project site from 5:30 a.m. to 7:00 a.m. and from
4:00 p.m. to 6:00 p.m., or about three hours daily, was
not overtime work as he was merely enjoying the
benefit and convenience of free transportation provided
by Philnor, otherwise without such vehicle he would
have used at least four hours by using public
transportation and spent P12.00 daily fare.
● The Labor Arbiter held that Rada was illegally dismissed, and
should be reinstated. It also ordered Philnor to pay overtime pay.
● The NLRC set aside LA’s decision and dismissed the complaint. It
ruled that Quiwa vs. Philnor was applicable because in that case,
Quiwa was considered a project employee and was not entitled to
termination pay since his employment was coterminous with the
completion of the project.
ISSUE/S AND RULING:
1. W/N Rada is a regular employee – NO (he is a project employee)
● Rada cited the LA decision, arguing that he is a regular employee
since he has worked continuously for 8 years for Philnor.
● The Court held that Rada is a project employee and not a regular
employee. It applied the ruling in Sandoval Shipyards vs. NLRC:
o Project employees, as distinguished from regular or non-
project employees, are mentioned in section 281 of the
Labor Code as those "where the employment has been
fixed for a specific project or undertaking the completion
or termination of which has been determined at the time
of the engagement of the employee."
o Policy Instructions No. 20 of the Secretary of Labor also
defined project employees as those employed in
connection with a particular construction project. Non-
project (regular) employees are those employed by a
construction company without reference to any particular
project.
● In determining if the employee is a project employee, it is
important to take note if the nature of the business the employer
is engaged into allows it to employ workers for an indefinite
period. If the nature of its business is necessarily dependent on
the availability of projects, it would be extremely burdensome for
the employer to employ them as permanent employees and pay
them wages even if there are no projects for them to work in.
● Although Rada worked with Philnor as a driver for eight years, the
fact that his services were rendered only for a particular project
which took that same period of time to complete categorizes him
as a project employee. He was employed for one specific project.
● Rada’s case is different from that of Fegurin vs. NLRC, where the
employee belongs to a “work pool” from which the company
would draw workers for assignment to other projects. Rada was
only hired for one particular project, the MNEE Stage 2. Hence,
his termination is valid by reason of the completion of the project
and the expiration of his employment contract.
2. W/N Rada can claim overtime compensation – YES (his
supposed travel time is compensable work hours)
● The fact that he picks up employees of Philnor at certain specified
points along EDSA in going to the project site and drops them off
at the same points on his way back from the field office going
home to Marikina, Metro Manila is not merely incidental to
Rada’s job as a driver.
● Said transportation arrangement had been adopted, not so much
for the convenience of the employees, but primarily for the
benefit of Philnor.
● Philnor does not hesitate to admit that it is usually the project
driver who is tasked with picking up or dropping off his fellow
employees.
● Proof thereof is the undisputed fact that when Rada is absent,
another driver is supposed to replace him and drive the vehicle
and likewise pick up and/or drop off the other employees at the
designated points on EDSA. If driving these employees to and
from the project site is not really part of petitioner's job, then
there would have been no need to find a replacement driver to
fetch these employees.
● But since the assigned task of fetching and delivering employees
is indispensable and consequently mandatory, then the time
required of and used by petitioner in going from his residence to
the field office and back, that is, from 5:30 a.m. to 7:00 a.m. and
from 4:00 p.m. to around 6:00 p.m., which the labor arbiter
rounded off as averaging three hours each working day, should
be paid as overtime work.
● Quintessentially, Rada should be given overtime pay for the three
excess hours of work performed during working days from Jan.
1983 to Dec. 1985.
3. W/N NLRC had jurisdiction despite Philnor’s failure to file
supersedeas bond within the 10-day reglementary period – YES
● While it is true that the payment of the supersedeas bond is an
essential requirement in the perfection of an appeal, however,
where the fee had been paid although payment was delayed, the
broader interests of justice and the desired objective of resolving
controversies on the merits demands that the appeal be given
due course.
● It was within the inherent power of the NLRC to have allowed late
payment of the bond. The LA decision did not state the amount
awarded as backwages and overtime pay, hence the amount of
the supersedeas bond could not be determined. It was only in the
order of the NLRC of February 16, 1990 that the amount of the
supersedeas bond was specified and which bond, after an
extension granted by the NLRC, was timely filed by private
 respondent. provided by the employer.
● Article 221 of the Labor Code provides that "in any proceeding Omnibus Rules, Book III, Rule I, Sec. 8-11
SECTION 8. Overtime pay. — Any employee covered by this Rule who is permitted or
before the Commission or any of the Labor Arbiters, the rules of required to work beyond eight (8) hours on ordinary working days shall be paid an
evidence prevailing in Courts of law or equity shall not be additional compensation for the overtime work in the amount equivalent to his regular
controlling and it is the spirit and intention of this Code that the wage plus at least twenty-five percent (25%) thereof.
Commission and its members and the Labor Arbiters shall use SECTION 9. Premium and overtime pay for holiday and rest day work. —
(a) Except employees referred to under Section 2 of this Rule, an employee who is
every and all reasonable means to ascertain the facts in each case
permitted or suffered to work on special holidays or on his designated rest days not falling
speedily and objectively without regard to technicalities of law or on regular holidays, shall be paid with an additional compensation as premium pay of not
procedure, all in the interest of due process. less than thirty percent (30%) of his regular wage. For work performed in excess of eight
NLRC Decision AFFIRMED with MODIFICATION regarding the award of (8) hours on special holidays and rest days not falling on regular holidays, an employee
overtime pay to petitioner. shall be paid an additional compensation for the overtime work equivalent to his rate for
the first eight hours on a special holiday or rest day plus at least thirty percent (30%)
6. Overtime Work/Pay thereof.
(b) Employees of public utility enterprises as well as those employed in non-profit
LC. Art. 87-90 institutions and organizations shall be entitled to the premium and overtime pay provided
Art. 87. Overtime work. Work may be performed beyond eight (8) hours a day provided herein, unless they are specifically excluded from the coverage of this Rule as provided in
that the employee is paid for the overtime work, an additional compensation equivalent Section 2 hereof.
to his regular wage plus at least twenty-five percent (25%) thereof. Work performed (c) The payment of additional compensation for work performed on regular holidays shall
beyond eight hours on a holiday or rest day shall be paid an additional compensation be governed by Rule IV, Book Three, of these Rules.
equivalent to the rate of the first eight hours on a holiday or rest day plus at least thirty SECTION 10. Compulsory overtime work. — In any of the following cases, an employer
percent (30%) thereof. may require any of his employees to work beyond eight (8) hours a day, provided that the
Art. 88. Undertime not offset by overtime. Undertime work on any particular day shall employee required to render overtime work is paid the additional compensation required
not be offset by overtime work on any other day. Permission given to the employee to go by these regulations:
on leave on some other day of the week shall not exempt the employer from paying the (a) When the country is at war or when any other national or local emergency has been
additional compensation required in this Chapter. declared by Congress or the Chief Executive;
Art. 89. Emergency overtime work. Any employee may be required by the employer to (b) When overtime work is necessary to prevent loss of life or property, or in case of
perform overtime work in any of the following cases: imminent danger to public safety due to actual or impending emergency in the locality
1. When the country is at war or when any other national or local emergency caused by serious accident, fire, floods, typhoons, earthquake, epidemic or other disaster
has been declared by the National Assembly or the Chief Executive; or calamities;
2, When it is necessary to prevent loss of life or property or in case of imminent (c) When there is urgent work to be performed on machines, installations, or equipment,
danger to public safety due to an actual or impending emergency in the locality in order to avoid serious loss or damage to the employer or some other causes of similar
caused by serious accidents, fire, flood, typhoon, earthquake, epidemic, or other nature;
disaster or calamity; (d) When the work is necessary to prevent loss or damage to perishable goods;
3. When there is urgent work to be performed on machines, installations, or (e) When the completion or continuation of work started before the 8th hour is necessary
equipment, in order to avoid serious loss or damage to the employer or some to prevent serious obstruction or prejudice to the business or operations of the employer;
other cause of similar nature; or
4. When the work is necessary to prevent loss or damage to perishable goods; (f) When overtime work is necessary to avail of favorable weather or environmental
and conditions where performance or quality of work is dependent thereon.
5. Where the completion or continuation of the work started before the eighth In cases not falling within any of these enumerated in this Section, no employee may be
hour is necessary to prevent serious obstruction or prejudice to the business or made to work beyond eight hours a day against his will.
operations of the employer.
Any employee required to render overtime work under this Article shall be paid the a. Overtime in ordinary working day
additional compensation required in this Chapter.
LC. Art. 87. Overtime work. Work may be performed beyond eight (8) hours a day
Art. 90. Computation of additional compensation. For purposes of computing overtime
provided that the employee is paid for the overtime work, an additional compensation
and other additional remuneration as required by this Chapter, the "regular wage" of an
equivalent to his regular wage plus at least twenty-five percent (25%) thereof. Work
employee shall include the cash wage only, without deduction on account of facilities
performed beyond eight hours on a holiday or rest day shall be paid an additional conditions where performance or quality of work is dependent thereon.
compensation equivalent to the rate of the first eight hours on a holiday or rest day plus at In cases not falling within any of these enumerated in this Section, no employee may be
least thirty percent (30%) thereof. made to work beyond eight hours a day against his will.
Omnibus Rules, Book III, Rule I, Sec. 8 Overtime pay. — Any employee covered by this
Rule who is permitted or required to work beyond eight (8) hours on ordinary working
days shall be paid an additional compensation for the overtime work in the amount
ABDULJUAHID PIGCAULAN, Petitioner, vs. SECURITY & CREDIT
equivalent to his regular wage plus at least twenty-five percent (25%) thereof.
INVESTIGATION, INC. (SCII) and/or RENE AMBY REYES, Respondents
b. Emergency or compulsory overtime work 2012; Del Castillo, G.R. No. 173648
LC. Art. 89. Emergency overtime work. Any employee may be required by the employer to FACTS
perform overtime work in any of the following cases: ● Oliver Canoy and Abduljuahid Pigcaulan were both employed by
1. When the country is at war or when any other national or local emergency SCII as security guards and were assigned to SCII’s different
has been declared by the National Assembly or the Chief Executive;
2, When it is necessary to prevent loss of life or property or in case of imminent
clients. Subsequently, however, they filed with the LA separate
danger to public safety due to an actual or impending emergency in the locality complaints for underpayment of salaries and non-payment of OT,
caused by serious accidents, fire, flood, typhoon, earthquake, epidemic, or other holiday, rest day, service incentive leave (SIL) and 13th month
disaster or calamity; pays. These complaints were later on consolidated as they
3. When there is urgent work to be performed on machines, installations, or involved the same causes of action.
equipment, in order to avoid serious loss or damage to the employer or some
other cause of similar nature; o In support of their claim, they submitted their respective daily
4. When the work is necessary to prevent loss or damage to perishable goods; time records reflecting the number of hours served and their
and wages for the same. They also presented itemized lists of their
5. Where the completion or continuation of the work started before the eighth claims for the corresponding periods served.
hour is necessary to prevent serious obstruction or prejudice to the business or
operations of the employer.
● Respondents, however, maintained that Canoy and Pigcaulan
Any employee required to render overtime work under this Article shall be paid the were paid their just salaries and other benefits under the law;
additional compensation required in this Chapter. that the salaries they received were above the statutory min.
wage and the rates provided by the Phil. Assoc. of Detective and
Omnibus Rules, Book III, Rule I, Sec. 10 Protective Agency Operators (PADPAO) for security guards; that
SECTION 10. Compulsory overtime work. — In any of the following cases, an employer
may require any of his employees to work beyond eight (8) hours a day, provided that the their holiday pay were already included in the computation of
employee required to render overtime work is paid the additional compensation required their monthly salaries; that they were paid additional premium of
by these regulations: 30% in addition to their basic salary whenever they were required
(a) When the country is at war or when any other national or local emergency has been to work on Sundays and 200% of their salary for work done on
declared by Congress or the Chief Executive;
(b) When overtime work is necessary to prevent loss of life or property, or in case of
holidays; and, that Canoy and Pigcaulan were paid the
imminent danger to public safety due to actual or impending emergency in the locality corresponding 13th month pay for the years 1998 and 1999.
caused by serious accident, fire, floods, typhoons, earthquake, epidemic or other disaster o In support of their claim, copies of payroll listings and lists of
or calamities; employees who received their 13th month pay for the periods
(c) When there is urgent work to be performed on machines, installations, or equipment, Dec. 1997 to Nov. 1998 and Dec. 1998 to Nov. 1999 were
in order to avoid serious loss or damage to the employer or some other causes of similar
nature; presented.
(d) When the work is necessary to prevent loss or damage to perishable goods; ● In addition, respondents contended that Canoy’s and Pigcaulan’s
(e) When the completion or continuation of work started before the 8th hour is necessary monetary claims should only be limited to the past 3 years of
to prevent serious obstruction or prejudice to the business or operations of the employer; employment pursuant to the rule on prescription of claims.
or
LA Ruling:
(f) When overtime work is necessary to avail of favorable weather or environmental
 o The LA gave credence to the itemized computations and
representative daily time records submitted by Canoy and
Pigcaulan. They were awarded their monetary claims.
o The payroll listings presented by the respondents did not prove
that Canoy and Pigcaulan were duly paid as same were not signed
by the latter or by any SCII officer. The 13th month payroll was,
however, acknowledged as sufficient proof of payment, for it
bears Canoy’s and Pigcaulan’s signatures. Thus, w/o indicating
any detailed computation of the judgment award, the LA ordered
the payment of OT pay, holiday pay, SIL pay and proportionate
13th month pay for the year 2000 in favor of Canoy and Pigcaulan.
Respondents appealed to the NLRC.
o Contentions: No basis for the awards made because aside from
the self-serving itemized computations, no representative daily
time record was presented by Canoy and Pigcaulan. Also, the
payroll listings they submitted should have been given more
probative value.
o Additional evidence: To strengthen their cause, they attached to
their Memorandum on Appeal payrolls bearing the individual
signatures of Canoy and Pigcaulan to show that the latter have
received their salaries, as well as copies of transmittal letters to
the bank to show that the salaries reflected in the payrolls were
directly deposited to the ATM accounts of SCII’s employees.
NLRC Ruling: DISMISSED appeal; the evidence show underpayment of
salaries as well as non-payment of SIL benefit; MR also DISMISSED
Respondents filed a petition for certiorari with prayer for the issuance of
a temporary restraining order and preliminary injunction before the CA.
They attributed grave abuse of discretion on the part of the NLRC.
CA Ruling: set aside LA & NLRC Rulings; there are no factual and legal
bases mentioned in the questioned rulings to support the conclusions
made; DISMISSED claims of Canoy and Pigcaulan
o LA disregarded the NLRC rule that, in cases involving money
awards and at all events, as far as practicable, the decision shall
embody the detailed and full amount awarded.
o LA found that the payrolls submitted by SCII have no probative
value for being unsigned by Canoy, when, in fact, said payrolls,
particularly the payrolls from 1998 to 1999 indicate the individual
signatures of Canoy.
o LA did not state in his decision the substance of the evidence
adduced by Pigcaulan and Canoy as well as the laws or
jurisprudence that would show that the two are indeed entitled to
the salary differential and incentive leave pays.
o LA held Reyes liable together with SCII for the payment of the
claimed salaries and benefits despite the absence of proof that
Reyes deliberately or maliciously designed to evade SCII’s alleged
financial obligation; hence the LA ignored that SCII has a
corporate personality separate and distinct from Reyes.
Canoy and Pigcaulan filed a MR  DENIED by the CA  present petition
for review on certiorari
Pigcaulan’s contentions: The LA and the NLRC are not strictly bound by
the rules. And even so, the rules do not mandate that a detailed
computation of how the amount awarded was arrived at should be
embodied in the decision. Instead, a statement of the nature or a
description of the amount awarded and the specific figure of the same
will suffice. Besides, his and Canoy’s claims were supported by
substantial evidence
Respondents’ contentions: Since it was only Pigcaulan who filed the
petition, the CA Decision has already become final and binding upon
Canoy. As to Pigcaulan’s arguments, they argue that they were able to
present sufficient evidence to prove payment of just salaries and benefits.
Pigcaulan’s (this time joined by Canoy) reply: His filing of the petition
redounds to Canoy’s benefit since their complaints were
consolidated. Hence, the institution of the petition by Pigcaulan does not
render the assailed Decision final as to Canoy.
o In said reply, they appended Canoy’s affidavit where he verified
under oath the contents and allegations of the petition filed by
Pigcaulan and also attested to the authenticity of its
annexes. Canoy, however, failed to certify that he had not filed
any action or claim in another court or tribunal involving the same
issues. He also explains that his absence during the preparation
and filing of the petition was caused by severe financial distress
and his failure to inform anyone of his whereabouts.
ISSUES:
WON the CA decision is considered FINAL as to Canoy -- YES
WON there was substantial evidence to support the grant of OT pay -- NO
WON Pigcaulan is entitled to holiday pay, SIL pay & proportionate 13th
month pay for the year 2000 -- YES
WON the CA erred in dismissing the claims instead of remanding the case
to the LA for a detailed computation of the judgment award -- YES
RULING: Petition granted. CA decision reversed & set aside.
1. The petition was filed by Pigcaulan solely on his own behalf. This is
clear from the petition’s prefatory which is phrased as follows: COMES
NOW Petitioner Abduljuahid R. Pigcaulan, by counsel, unto this Honorable
Court x x x. Also, under the heading “Parties”, only Pigcaulan is mentioned
as petitioner and consistent with this, the body of the petition refers only
to a “petitioner” and never in its plural form “petitioners”. Aside from the
fact that the Verification and Certification of Non-Forum Shopping
attached to the petition was executed by Pigcaulan alone, it was indicated
under the name of the lawyer who prepared the same that he is
the “Counsel for Petitioner Adbuljuahid Pigcaulan” only. In view of these,
there is therefore, no doubt, that the petition was brought only on behalf
of Pigcaulan. Since no appeal from the CA Decision was brought by Canoy,
same has already become final and executory as to him.
Canoy cannot now simply incorporate in his affidavit a verification of the
contents and allegations of the petition as he is not one of the petitioners
therein. It would have been different had the said petition been filed in
behalf of both Canoy and Pigcaulan. In such a case, subsequent
submission of a verification may be allowed as non-compliance therewith
or a defect therein does not necessarily render the pleading, or the
petition as in this case, fatally defective. However, even if it were so,
Canoy still failed to submit or at least incorporate in his affidavit a
certificate of non-forum shopping.
Having declared the present petition as solely filed by Pigcaulan, this
Court shall consider the subsequent pleadings, although apparently filed
under his and Canoy’s name, as solely filed by the former.
2. The handwritten itemized computations are self-serving, unreliable and
unsubstantial evidence to sustain the grant of salary differentials,
particularly OT 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 can hardly be
considered as competent evidence to be used as basis to prove that the
two were underpaid of their salaries. There is nothing in the records
which could substantially support Pigcaulan’s contention that he had
rendered service beyond 8 hrs. to entitle him to OT pay and during
Sundays to entitle him to restday pay.
3. Pertinent provisions: 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 10
workers;
ART. 95. RIGHT TO SERVICE INCENTIVE LEAVE. – (a) Every employee who
has rendered at least one year of service shall be entitled to a yearly
service incentive of five days with pay.
Under the LC, Pigcaulan is entitled to his regular rate on holidays even if
he does not work. He is also entitled to the SIL benefit for he rendered
service for more than a year already. Finally, under PD 851, he should be
paid his 13th month pay.
SCII presented payroll listings and transmittal letters to the bank to show
that Canoy and Pigcaulan received their salaries as well as benefits which
it claimed are already integrated in the employees’ monthly salaries.
However, the documents presented do not prove SCII’s allegation. 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.
The burden of proving payment of these monetary claims rests on SCII,
being the employer. One who pleads payment has the burden of
proving it. Since SCII failed to provide convincing proof that it has already
settled the claims, Pigcaulan should be paid his holiday pay, SIL benefits
and proportionate 13th month pay for the year 2000.
4. Indeed, the LA failed to provide sufficient basis for the monetary
awards granted. Such failure, however, should not result in prejudice to
the substantial rights of the party. While the Court disallows the grant of
OT pay and restday pay in favor of Pigcaulan, he is nevertheless entitled,
as a matter of right, to his holiday pay, SIL pay and 13th month pay for
year 2000. Hence, the CA is not correct in dismissing Pigcaulan’s claims in
its entirety.
Consistent with the rule that all money claims arising from an employer-
employee relationship shall be filed within 3 years from the time the
cause of action accrued, Pigcaulan can only demand the amounts due him
for the period within 3 years preceding the filing of the complaint in
2000. Furthermore, since the records are insufficient to use as bases to
properly compute Pigcaulan’s claims, the case should be remanded to the
LA for a detailed computation of the monetary benefits due to him.
c. Undertime work/leave
LC. Art. 88. Undertime not offset by overtime. Undertime work on any particular day shall
not be offset by overtime work on any other day. Permission given to the employee to go
on leave on some other day of the week shall not exempt the employer from paying the
additional compensation required in this Chapter.
d. Additional compensation
LC. Art. 87. Overtime work. Work may be performed beyond eight (8) hours a day
provided that the employee is paid for the overtime work, an additional compensation
equivalent to his regular wage plus at least twenty-five percent (25%) thereof. Work
performed beyond eight hours on a holiday or rest day shall be paid an additional
compensation equivalent to the rate of the first eight hours on a holiday or rest day plus at
least thirty percent (30%) thereof.
Omnibus Rules, Book III, Rule I, Sec. 9. Premium and overtime pay for holiday and rest
day work. —
(a) Except employees referred to under Section 2 of this Rule, an employee who is
permitted or suffered to work on special holidays or on his designated rest days not falling
on regular holidays, shall be paid with an additional compensation as premium pay of not
less than thirty percent (30%) of his regular wage. For work performed in excess of eight
(8) hours on special holidays and rest days not falling on regular holidays, an employee
shall be paid an additional compensation for the overtime work equivalent to his rate for
the first eight hours on a special holiday or rest day plus at least thirty percent (30%)
thereof.
(b) Employees of public utility enterprises as well as those employed in non-profit
institutions and organizations shall be entitled to the premium and overtime pay provided
herein, unless they are specifically excluded from the coverage of this Rule as provided in
Section 2 hereof.
(c) The payment of additional compensation for work performed on regular holidays shall
be governed by Rule IV, Book Three, of these Rules.
7. Night Work
LC. Art. 86. Night shift differential. Every employee shall be paid a night shift differential
of not less than ten percent (10%) of his regular wage for each hour of work performed
between ten o’clock in the evening and six o’clock in the morning.
Omnibus Rules, Book III, Rule II, Sec. 1-6
RA 10151
AN ACT ALLOWING THE EMPLOYMENT OF NIGHT WORKERS, THEREBY REPEALING
ARTICLES 130 AND 131 OF PRESIDENTIAL DECREE NUMBER FOUR HUNDRED FORTY
a. Coverage
LC. Art. 86. Night shift differential. Every employee shall be paid a night shift differential
of not less than ten percent (10%) of his regular wage for each hour of work performed
between ten o’clock in the evening and six o’clock in the morning.
Omnibus Rules, Book III, Rule II, Sec. 1
SECTION 1. Coverage. — This Rule shall apply to all employees except:
(a) Those of the government and any of its political subdivisions, including government-
owned and/or controlled corporations;
(b) Those of retail and service establishments regularly employing not more than five (5)
workers;
(c) Domestic helpers and persons in the personal service of another;
(d) Managerial employees as defined in Book Three of this Code;
(e) 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.
b. Exclusion
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.
"Field personnel" shall refer to non-agricultural 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
Omnibus Rules, Book III, Rule II, Sec. 1
SECTION 1. Coverage. — This Rule shall apply to all employees except:
(a) Those of the government and any of its political subdivisions, including government-
owned and/or controlled corporations;
(b) Those of retail and service establishments regularly employing not more than five (5)
workers;
(c) Domestic helpers and persons in the personal service of another;
(d) Managerial employees as defined in Book Three of this Code;
(e) 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.
i. Retail establishment
Rules Implementing RA 6727, f
f) "Retail Establishment" is one principally engaged in the sale of goods to end-users for
personal or household use;
ii. Service establishment
Rules Implementing RA 6727, g
g) "Service Establishment" is one principally engaged in the sale of service to individuals
for their own or household use and is generally recognized as such;
c. Additional compensation
LC. Art. 86. Night shift differential. Every employee shall be paid a night shift differential
of not less than ten percent (10%) of his regular wage for each hour of work performed
between ten o’clock in the evening and six o’clock in the morning.
Omnibus Rules, Book III, Rule II, Sec. 2-5
SECTION 2. Night shift differential. — An employee shall be paid night shift differential of
no less than ten per cent (10%) of his regular wage for each hour of work performed
between ten o'clock in the evening and six o'clock in the morning.
SECTION 3. Additional compensation. — Where an employee is permitted or suffered to
work on the period covered after his work schedule, he shall be entitled to his regular
wage plus at least twenty-five per cent (25%) and an additional amount of no less than ten
per cent (10%) of such overtime rate for each hour or work performed between 10 p.m. to
6 a.m.
SECTION 4. Additional compensation on scheduled rest day/special holiday. — An
employee who is required or permitted to work on the period covered during rest days
and/or special holidays not falling on regular holidays, shall be paid a compensation
equivalent to his regular wage plus at least thirty (30%) per cent and an additional amount
of not less than ten (10%) per cent of such premium pay rate for each hour of work
performed.
SECTION 5. Additional compensation on regular holidays. — For work on the period
covered during regular holidays, an employee shall be entitled to his regular wage during
these days plus an additional compensation of no less than ten (10%) per cent of such
premium rate for each hour of work performed.
Lepanto Consolidated Mining Co. v Lepanto Local Staff Union
August 20, 2008 |G.R. No. 161713 | CARPIO, J.:
Facts:
28 November 1998 - petitioner and respondent entered into their fourth
Collective Bargaining Agreement (4th CBA) for the period from 1 July
1998 to 30 June 2000. The 4th CBA provides:
ARTICLE VIII NIGHT SHIFT DIFFERENTIAL
Section 3. Night Differential pay. - The Company shall continue to
pay nightshift differential for work during the first and third shifts
to all covered employees within the bargaining unit as follows:
For the First Shift (11:00 p.m. to 7:00 a.m.), the differential pay
will be 20% of the basic rate. For the Third Shift (3:00 p.m. to
11:00 p.m.), the differential pay will be 15% of the basic rate.
However, for overtime work, which extends beyond the regular
day shift (7:00 a.m. to 3:00 p.m.), there [will] be no night
differential pay added before the overtime pay is calculated.
ARTICLE XII RIGHTS, PRIVILEGES AND OTHER BENEFITS
Section 9. Longevity pay The company shall grant longevity pay
of P30.00 per month effective July 1, 1998 and every year
thereafter
On 23 April 2000, respondent filed a complaint with the National
Conciliation and Mediation Board, Cordillera Administrative Region
(NCMB-CAR)
- alleging that petitioner failed to pay the night shift differential
and longevity pay of respondents members as provided in the
4th CBA.
Petitioner and respondent failed to amicably settle the dispute.
- They agreed to submit the issues to Voluntary Arbitrator Norma
B. Advincula (Voluntary Arbitrator) for resolution.
Arguments:
Petitioners:
- Longevity pay should be paid only on 1 July 1999 onwards.
- Overtime pay only, no night shift differential for those who
extend beyond the second shift
o Although they already paid the night shift differential, it
was by mistake made by their accounting staff
Respondents:
- 2nd shift workers who performed work after 3:00 p.m. should be
given an additional night shift differential pay
Procedural:
Voluntary Arbitrator ruled in favor of respondent
- Lepanto Consolidated Mining Corporation (LCMC) to grant
complainant Lepanto Local Staff Union (LLSU) the following
benefits:
o Longevity from July 1, 1998 and every year thereafter in
consonance with their contract; and
o Night shift differential pay for hours of work rendered
beyond 3:00 p.m. for the following shifts: 7:00 A.M. to
 4:00 P.M., 7:30 A.M. to 4:30 P.M. and 8:00 A.M. to 5:00
P.M. to be reckoned from the date of the effectivity of
the 4th CBA which was on July 1, 1998.
Paragraph 3, Section 3, Article VIII of the 4th CBA is interpreted as that:
Employee who works past 2nd shift gets: night shift differential +
overtime pay
The intent of the parties was to grant night shift differential
benefits to employees who rendered work beyond the regular
day shift.
o if the intention were otherwise, paragraph 3 would have
been deleted.
Court of Appeals - affirmed the Voluntary Arbitrator
Paragraph 3, Section 3, Article VIII was clear and unequivocal.
o It grants night shift differential pay to employees of the
second shift for work rendered beyond their regular day
shift
Payment of differential pay aside from overtime pay was the
intent of the parties
o during the effectivity of the 4th CBA, petitioner voluntarily
complied with paragraph 3, Section 3, Article VIII by
paying night shift differential to employees for hours
worked beyond 3:00 p.m.
o NOT due to error.
▪ records revealed that petitioner still continued to
pay night shift differential for hours worked
beyond 3:00 p.m. after the Voluntary Arbitrator
rendered the 26 May 2000 Decision. Thus,
petitioner is estopped from claiming erroneous
payment on appeal.
WON the workers are entitled to night shift differential for work
performed beyond the regular day shift, from 7:00 a.m. to 3:00 p.m.
Yes, they are entitled.
The first paragraph of Section 3 provides that petitioner shall continue to
pay night shift differential to workers of the first and third shifts.
- It does not provide that workers who performed work beyond the
second shift shall not be entitled to night shift differential.
The inclusion of the third paragraph is not intended to exclude the regular
day shift workers from receiving night shift differential for work
performed beyond 3:00 p.m.
It only provides that the night shift differential pay shall be excluded in
the computation of the overtime pay.
- Note: It is possible the reason for this is that night shift differential
pay is percentage based, therefore if the overtime pay was
included the workers would have a HIGHER night shift differential
pay. Therefore, it was the intent of the CBA to remove the
overtime pay from the computation of the night shift differential
and NOT to remove the night shift differential entirely.
It was the Intent of the parties
In order to ascertain the intention of the contracting parties, their
contemporaneous and subsequent acts as well as their negotiating and
contractual history and evidence of past practices shall be considered.
The provision in question was contained in the 1st, 2nd, and
3rd CBAs between petitioner and respondent.
- During the effectivity of the first three CBAs, petitioner paid night
shift differentials to other workers who were members of
respondent for work performed beyond 3:00 p.m.
- Petitioner also paid night shift differential for work beyond 3:00
p.m. during the effectivity of the 4th CBA.
WHEREFORE, we DENY the petition. We AFFIRM the 22 July
2003 Decision and 20 January 2004 Resolution of the Court of Appeals in
CA-G.R. SP No. 60644. Costs against petitioner.
SO ORDERED.
See: Shell Oil Co of the Phils v National Labor Union
F: The National Labor Union, on behalf of the Shell nightworkers, brought a complaint for
compensation against Shell for compensation or additional wages of the nightworkers
who would work night shifts. CIR: Ordered Shell to pay their nightworkers compensation
of 50% of the regular wage of dayworkers
H: The nightworkers are entitled to the additional 50%. Nightwork is deemed to be more
burdensome for the workers, and also affects their health, hence they are entitled to
compensation. Work during the night is also more cumbersome and it deserves further
remuneration. There is no possible argument against the universal fact that regular work is
normal and ordinary during the day, but is exceptional and justified only for certain grave
reasons during the night. For some, humanity has always worked during the day
NOTE: For purposes of computing additional benefits under Book III, Title I
of the Labor Code - Minimum Wage Rate NCR = P456/day effective Nov. 1,
2012; P466/day effective Sept. 2013; P481/day effective Apr. 4, 2015;
P491/day effective Jun. 2, 2016; P512/day effective Oct. 5, 2017.
B. Weekly Rest Periods
LC. Art. 91. Right to weekly rest day.
1. It shall be the duty of every employer, whether operating for profit or not, to
provide each of his employees a rest period of not less than twenty-four (24)
consecutive hours after every six (6) consecutive normal work days.
2. The employer shall determine and schedule the weekly rest day of his
employees subject to collective bargaining agreement and to such rules and
regulations as the Secretary of Labor and Employment may provide. However,
the employer shall respect the preference of employees as to their weekly rest
day when such preference is based on religious grounds.
Art. 92. When employer may require work on a rest day. The employer may require his
employees to work on any day:
1. In case of actual or impending emergencies caused by serious accident, fire,
flood, typhoon, earthquake, epidemic or other disaster or calamity to prevent
loss of life and property, or imminent danger to public safety;
2. In cases of urgent work to be performed on the machinery, equipment, or
installation, to avoid serious loss which the employer would otherwise suffer;
3. In the event of abnormal pressure of work due to special circumstances, where
the employer cannot ordinarily be expected to resort to other measures;
4. To prevent loss or damage to perishable goods;
5. Where the nature of the work requires continuous operations and the stoppage
of work may result in irreparable injury or loss to the employer; and
6. Under other circumstances analogous or similar to the foregoing as determined
by the Secretary of Labor and Employment.
Art. 93. Compensation for rest day, Sunday or holiday work.
1. Where an employee is made or permitted to work on his scheduled rest day, he
shall be paid an additional compensation of at least thirty percent (30%) of his
regular wage. An employee shall be entitled to such additional compensation for
work performed on Sunday only when it is his established rest day.
2. When the nature of the work of the employee is such that he has no regular
workdays and no regular rest days can be scheduled, he shall be paid an
additional compensation of at least thirty percent (30%) of his regular wage for
work performed on Sundays and holidays.
3. Work performed on any special holiday shall be paid an additional compensation
of at least thirty percent (30%) of the regular wage of the employee. Where such
holiday work falls on the employee’s scheduled rest day, he shall be entitled to
an additional compensation of at least fifty per cent (50%) of his regular wage.
4. Where the collective bargaining agreement or other applicable employment
contract stipulates the payment of a higher premium pay than that prescribed
under this Article, the employer shall pay such higher rate.
Omnibus Rules, Book III, Rule III, Sec. 1-9
SECTION 1. General statement on coverage. — This Rule shall apply to all employers
whether operating for profit or not, including public utilities operated by private persons.
SECTION 2. Business on Sundays/Holidays. — All establishments and enterprises may
operate or open for business on Sundays and holidays provided that the employees are
given the weekly rest day and the benefits as provided in this Rule.
SECTION 3. Weekly rest day. — Every employer shall give his employees a rest period of
not less than twenty-four (24) consecutive hours after every six consecutive normal work
days.
SECTION 4. Preference of employee. — The preference of the employee as to his weekly
day of rest shall be respected by the employer if the same is based on religious grounds.
The employee shall make known his preference to the employer in writing at least seven
(7) days before the desired effectivity of the initial rest day so preferred.
Where, however, the choice of the employee as to his rest day based on religious grounds
will inevitably result in serious prejudice or obstruction to the operations of the
undertaking and the employer cannot normally be expected to resort to other remedial
measures, the employer may so schedule the weekly rest day of his choice for at least two
(2) days in a month.
SECTION 5. Schedule of rest day. —
a. Where the weekly rest is given to all employees simultaneously, the employer
shall make known such rest period by means of a written notice posted
conspicuously in the work place at least one week before it becomes effective.
b. Where the rest period is not granted to all employees simultaneously and
collectively, the employer shall make known to the employees their respective
schedules of weekly rest through written notices posted conspicuously in the
work place at least one week before they become effective.
SECTION 6. When work on rest day authorized. — An employer may require any of his
employees to work on his scheduled rest day for the duration of the following
emergencies and exceptional conditions:
a. In case of actual or impending emergencies caused by serious accident, fire,
flood, typhoon, earthquake, epidemic or other disaster or calamity, to prevent
loss of life or property, or in cases of force majeure or imminent danger to public
safety;
b. In case of urgent work to be performed on machineries, equipment or
installations to avoid serious loss which the employer would otherwise suffer;
c. In the event of abnormal pressure of work due to special circumstances, where
the employer cannot ordinarily be expected to resort to other measures;
d. To prevent serious loss of perishable goods;
e. Where the nature of the work is such that the employees have to work
continuously for seven (7) days in a week or more, as in the case of the crew
members of a vessel to complete a voyage and in other similar cases; and
f. When the work is necessary to avail of favorable weather or environmental
conditions where performance or quality of work is dependent thereon.
No employee shall be required against his will to work on his scheduled rest day except
under circumstances provided in this Section: Provided, However, that where an
employee volunteers to work on his rest day under other circumstances, he shall express
such desire in writing, subject to the provisions of Section 7 hereof regarding additional
compensation. SECTION 7. Compensation on rest day/Sunday/holiday. —
a. Except those employees referred to under Section 2, Rule I, Book Three, an
employee who is made or permitted to work on his scheduled rest day shall be
paid with an additional compensation of at least 30% of his regular wage. An
employee shall be entitled to such additional compensation for work performed
on a Sunday only when it is his established rest day.
b. Where the nature of the work of the employee is such that he has no regular
work days and no regular rest days can be scheduled, he shall be paid an
additional compensation of at least 30% of his regular wage for work performed
on Sundays and holidays.
 c. Work performed on any special holiday shall be paid with an additional
compensation of at least 30% of the regular wage of the employees. Where such
holiday work falls on the employee's scheduled rest day, he shall be entitled to
additional compensation of at least 50% of his regular wage.
d. The payment of additional compensation for work performed on regular holiday
shall be governed by Rule IV, Book Three, of these regulations.
e. Where the collective bargaining agreement or other applicable employment
contract stipulates the payment of a higher premium pay than that prescribed
under this Section, the employer shall pay such higher rate.
SECTION 8. Paid-off days. — Nothing in this Rule shall justify an employer in reducing the
compensation of his employees for the unworked Sundays, holidays, or other rest days
which are considered paid-off days or holidays by agreement or practice subsisting upon
the effectivity of the Code.
SECTION 9. Relation to agreements. — Nothing herein shall prevent the employer and his
employees or their representatives in entering into any agreement with terms more
favorable to the employees than those provided herein, or be used to diminish any benefit
granted to the employees under existing laws, agreements, and voluntary employer
practices.
1. Coverage/Exclusions
LC. 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.
"Field personnel" shall refer to non-agricultural 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.
Art. 91. Right to weekly rest day.
1. It shall be the duty of every employer, whether operating for profit or not, to
provide each of his employees a rest period of not less than twenty-four (24)
consecutive hours after every six (6) consecutive normal work days.
2. The employer shall determine and schedule the weekly rest day of his
employees subject to collective bargaining agreement and to such rules and
regulations as the Secretary of Labor and Employment may provide. However,
the employer shall respect the preference of employees as to their weekly rest
day when such preference is based on religious grounds.
Omnibus Rules, Book, III, Rule III, Sec. 1
SECTION 1. General statement on coverage. — This Rule shall apply to all employers
whether operating for profit or not, including public utilities operated by private persons.
2. Right to Weekly Rest Period
LC. Art. 91 (a) It shall be the duty of every employer, whether operating for profit or not,
to provide each of his employees a rest period of not less than twenty-four (24)
consecutive hours after every six (6) consecutive normal work days.
Omnibus Rules, Book III, Rule III, Sec. 3. Weekly rest day. — Every employer shall give his
employees a rest period of not less than twenty-four (24) consecutive hours after every six
consecutive normal work days.
3. Determination/Preference of Employee
LC. Art. 91 (b) The employer shall determine and schedule the weekly rest day of his
employees subject to collective bargaining agreement and to such rules and regulations as
the Secretary of Labor and Employment may provide. However, the employer shall respect
the preference of employees as to their weekly rest day when such preference is based on
religious grounds.
Omnibus Rules, Book III, Rule III, Sec. 4, 5
SECTION 4. Preference of employee. — The preference of the employee as to his weekly
day of rest shall be respected by the employer if the same is based on religious grounds.
The employee shall make known his preference to the employer in writing at least seven
(7) days before the desired effectivity of the initial rest day so preferred.
Where, however, the choice of the employee as to his rest day based on religious grounds
will inevitably result in serious prejudice or obstruction to the operations of the
undertaking and the employer cannot normally be expected to resort to other remedial
measures, the employer may so schedule the weekly rest day of his choice for at least two
(2) days in a month.
SECTION 5. Schedule of rest day. —
a. Where the weekly rest is given to all employees simultaneously, the employer
shall make known such rest period by means of a written notice posted
conspicuously in the work place at least one week before it becomes effective.
b. Where the rest period is not granted to all employees simultaneously and
collectively, the employer shall make known to the employees their respective
schedules of weekly rest through written notices posted conspicuously in the
work place at least one week before they become effective.
4. Compulsory work on Rest Day
LC. Art. 92 When employer may require work on a rest day. The employer may require his
employees to work on any day:
1. In case of actual or impending emergencies caused by serious accident, fire,
flood, typhoon, earthquake, epidemic or other disaster or calamity to prevent
loss of life and property, or imminent danger to public safety;
2. In cases of urgent work to be performed on the machinery, equipment, or
installation, to avoid serious loss which the employer would otherwise suffer;
3. In the event of abnormal pressure of work due to special circumstances, where
the employer cannot ordinarily be expected to resort to other measures;
4. To prevent loss or damage to perishable goods;
5. Where the nature of the work requires continuous operations and the stoppage
of work may result in irreparable injury or loss to the employer; and
6. Under other circumstances analogous or similar to the foregoing as determined
by the Secretary of Labor and Employment.
Omnibus Rules, Book III, Rule III, Sec. 6. When work on rest day authorized. — An
employer may require any of his employees to work on his scheduled rest day for the
duration of the following emergencies and exceptional conditions:
a. In case of actual or impending emergencies caused by serious accident, fire,
flood, typhoon, earthquake, epidemic or other disaster or calamity, to prevent
loss of life or property, or in cases of force majeure or imminent danger to public
safety;
b. In case of urgent work to be performed on machineries, equipment or
installations to avoid serious loss which the employer would otherwise suffer;
c. In the event of abnormal pressure of work due to special circumstances, where
the employer cannot ordinarily be expected to resort to other measures;
d. To prevent serious loss of perishable goods;
e. Where the nature of the work is such that the employees have to work
continuously for seven (7) days in a week or more, as in the case of the crew
members of a vessel to complete a voyage and in other similar cases; and
g. When the work is necessary to avail of favorable weather or environmental
conditions where performance or quality of work is dependent thereon.
5. Premium Pay
LC. Art. 93. Compensation for rest day, Sunday or holiday work
a. Where an employee is made or permitted to work on his scheduled rest day, he
shall be paid an additional compensation of at least thirty percent (30%) of his
regular wage. An employee shall be entitled to such additional compensation for
work performed on Sunday only when it is his established rest day.
b. When the nature of the work of the employee is such that he has no regular
workdays and no regular rest days can be scheduled, he shall be paid an
additional compensation of at least thirty percent (30%) of his regular wage for
work performed on Sundays and holidays.
c. Work performed on any special holiday shall be paid an additional compensation
of at least thirty percent (30%) of the regular wage of the employee. Where such
holiday work falls on the employee’s scheduled rest day, he shall be entitled to
an additional compensation of at least fifty per cent (50%) of his regular wage.
Omnibus Rules, Book III, Rule III, Sec. 7
SECTION 7. Compensation on rest day/Sunday/holiday. —
a. Except those employees referred to under Section 2, Rule I, Book Three, an
employee who is made or permitted to work on his scheduled rest day shall be
paid with an additional compensation of at least 30% of his regular wage. An
employee shall be entitled to such additional compensation for work performed
on a Sunday only when it is his established rest day.
b. Where the nature of the work of the employee is such that he has no regular
work days and no regular rest days can be scheduled, he shall be paid an
additional compensation of at least 30% of his regular wage for work performed
on Sundays and holidays.
c. Work performed on any special holiday shall be paid with an additional
compensation of at least 30% of the regular wage of the employees. Where such
holiday work falls on the employee's scheduled rest day, he shall be entitled to
additional compensation of at least 50% of his regular wage.
d. The payment of additional compensation for work performed on regular holiday
shall be governed by Rule IV, Book Three, of these regulations.
e. Where the collective bargaining agreement or other applicable employment
contract stipulates the payment of a higher premium pay than that prescribed
under this Section, the employer shall pay such higher rate.
6. Work on a Sunday or holiday which is also scheduled Rest Day
LC. Art 93 (a) (b)
Compensation for rest day, Sunday or holiday work
a. Where an employee is made or permitted to work on his scheduled rest day, he
shall be paid an additional compensation of at least thirty percent (30%) of his
regular wage. An employee shall be entitled to such additional compensation for
work performed on Sunday only when it is his established rest day.
b. When the nature of the work of the employee is such that he has no regular
workdays and no regular rest days can be scheduled, he shall be paid an
additional compensation of at least thirty percent (30%) of his regular wage for
work performed on Sundays and holidays.
Omnibus Rules, Book III, Rule III, Sec. 7 (a) (b)
SECTION 7. Compensation on rest day/Sunday/holiday. —
a. Except those employees referred to under Section 2, Rule I, Book Three, an
employee who is made or permitted to work on his scheduled rest day shall be
paid with an additional compensation of at least 30% of his regular wage. An
employee shall be entitled to such additional compensation for work performed
on a Sunday only when it is his established rest day.
b. Where the nature of the work of the employee is such that he has no regular
work days and no regular rest days can be scheduled, he shall be paid an
additional compensation of at least 30% of his regular wage for work performed
on Sundays and holidays.
7. CBA on higher premium pay
LC. Art. 93 (d) Where the collective bargaining agreement or other applicable employment
contract stipulates the payment of a higher premium pay than that prescribed under this
Article, the employer shall pay such higher rate.
Omnibus Rules, Book III, Rule III, Sec. 7 (e); Where the collective bargaining agreement or
other applicable employment contract stipulates the payment of a higher premium pay
than that prescribed under this Section, the employer shall pay such higher rate.
Sec. 9 Relation to agreements. — Nothing herein shall prevent the employer and his
employees or their representatives in entering into any agreement with terms more
favorable to the employees than those provided herein, or be used to diminish any benefit
granted to the employees under existing laws, agreements, and voluntary employer
practices.
C. Holidays
LC. Art. 94 Right to holiday pay.
1. 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;
 2. The employer may require an employee to work on any holiday but such
employee shall be paid a compensation equivalent to twice his regular rate; and
3. 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 thirtieth of December
and the day designated by law for holding a general election.
Executive Order 203 (1987)
RA 9492 (Rationalizing the Celebration of National Holidays
EO 292 (Adm. Code of 1987, Sec. 26) Jul 26, 2007
Omnibus Rules, Book III, Rule IV
PD 1083 (Code of Muslim PErsonal Laws (Feb. 4, 1977)
1. Coverage/Exclusions
LC. Art. 94(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;
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.
Omnibus Rules Book III, Rule IV, Sec. 1. Coverage. — This rule shall apply to all employees
except:
a. Those of the government and any of the political subdivision, including
government-owned and controlled corporation;
b. Those of retail and service establishments regularly employing less than ten (10)
workers;
c. Domestic helpers and persons in the personal service of another;
d. Managerial employees as defined in Book Three of the Code;
e. 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.
a. Definition
i. Retail Establishment
Rules Implementing RA 6727, par. f "Retail Establishment" is one principally engaged in
the sale of goods to end-users for personal or household use;
ii. Service Establishment
Rules Implementing RA 6727, par. g "Service Establishment" is one principally engaged in
the sale of service to individuals for their own or household use and is generally
recognized as such;
Ariel David, doing business under the name & style “Yiels Hog Dealer” v
John Macasio
(2014, Brion, J.)
FACTS:
● Jan. 2009 - Respondent John Macasio filed before the LA a
complaint vs. petitioner Ariel David for non-payment of overtime
pay, holiday pay and 13th month pay + moral and exemplary
damages and attorney’s fees + service incentive leave (SIL).
● Macasio alleged:
o he had been working as a butcher for David since Jan. 6,
1995
o David exercised effective control and supervision over his
work
1. set the work day, reporting time and hogs to be
chopped, as well as the manner by which he was
to perform his work;
2. daily paid his salary of ₱700, which was increased
from ₱600 in 2007
3. approved and disapproved his leaves.
o David also owned the hogs delivered for chopping, as well
as the work tools and implements + rented the
workplace.
o David employs about 25 butchers and delivery drivers.
● David claimed:
o he started his hog dealer business in 2005 and that he
only has 10 employees.
o he hired Macasio as a butcher or chopper on "pakyaw" or
task basis who is, thus, not entitled to overtime pay,
holiday pay and 13th month pay pursuant to the
provisions of the IRR of the LC.
o Pointed out that Macasio:
1. usually starts his work at 10 p.m. and ends at 2
a.m. of the following day or earlier, depending on
the volume of the delivered hogs
2. received the fixed amount of ₱700per
engagement, regardless of the actual number of
hours that he spent chopping the delivered hogs
3. was not engaged to report for work and did not
receive any fee when no hogs were delivered.
 ● Macasio presented the Certificate of Employment that David
issued in his favor which placed the date of his employment in
January 2000.
o David claimed that he issued the Certificate of
Employment, upon Macasio’s request, only for overseas
employment purposes.
LA dismissed complaint. It gave credence to David’s claim that he
engaged Macasio on "pakyaw" or task basis, thus not entitled to
overtime, holiday, SIL and 13th month pay.
NLRC affirmed LA. David did not require Macasio to observe an eight hour
work schedule to earn the fixed ₱700 wage. Since Macasio was paid by
result and not in terms of the time that he spent in the workplace,
Macasio is not covered by the Labor Standards laws on overtime, SIL and
holiday pay, etc.
CA reversed NLRC. Macasio is entitled to his monetary claims following
the doctrine laid down in Serrano v. Severino Santos Transit: as a task
basis employee, Macasio is excluded from the coverage of holiday, SIL
and 13th month pay only if he is likewise a "field personnel." The
elements that characterize a "field personnel" are evidently lacking as he
had been working as a butcher at David’s business in Manila under
David’s supervision and control, and for a fixed working schedule that
starts at 10 p.m.
ISSUE/RULING: WON Macasio is entitled to holiday, SIL and 13th month
pay as a worker engaged on "pakyaw" or task basis? – YES.
RATIO:
1.) Engagement on "pakyaw" or task basis does not determine the parties’
relationship as it is simply a method of pay computation. Accordingly,
Macasio is David’s employee, albeit engaged on "pakyaw" or task basis.
a. ER-EE relationship is a non-issue in this case. Macasio is David’s
employee.
Art 101 of the LC provides for workers paid by results (or those whose pay
is calculated in terms of the quantity or quality of their work output)
which includes "pakyaw" work and other non-time work.
● LA and the NLRC denied Macasio’s claim not because of the
absence of an employer-employee but because of its finding that
since Macasio is paid on pakyaw or task basis, he is not entitled to
SIL, holiday and 13th month pay.
● In the separate illegal dismissal case Macasio filed with the LA,
the courts found the existence of an ER-EE relationship.
Even if the court indulged the petitioner, employing the control test, such
a relationship exists in the present case:
● David engaged the services of Macasio, thus satisfying the
element of "selection and engagement of the employee." David
categorically confirmed this fact in his "Sinumpaang Salaysay," as
well as Solano and Antonio (co-butchers) in their "Pinagsamang
Sinumpaang Salaysay."
● David paid Macasio’s wages.
● David had been setting the day and time when Macasio should
report for work. This power to determine the work schedule
obviously implies power of control.
● David had the right and power to control and supervise Macasio’s
work as to the means and methods of performing it: David rents
the place where Macasio had been performing his tasks +
Macasio would leave the workplace only after he had finished
chopping all of the hog meats given to him for the day.
b. Macasio is engaged on "pakyaw" or task basis.
A distinguishing characteristic of "pakyaw" or task basis engagement, as
opposed to straight-hour wage payment, is the non-consideration of the
time spent in working. The emphasis is on the task itself, in the sense that
payment is reckoned in terms of completion of the work, not in terms of
the number of time spent in the completion of work.
CASE AT BAR, the facts show Macasio would usually start his work at 10
p.m. Thereafter, regardless of the total hours that he spent at the
workplace or of the total number of the hogs assigned to him for
chopping, Macasio would receive the fixed amount of ₱700 once he had
completed his task.
2.) Macasio is entitled to holiday and SIL pay.
LA and NLRC dismissed Macasio’s claims pursuant to Art 82, Art
94, Art 95 as well as PD No. 851 and its IRR. Uniformly, these
provisions exempt workers paid on "pakyaw" or task basis from
the coverage of holiday, SIL and 13th month pay.
CA relied on these provisions + Sec 1, Rule V of the IRR of the
Labor Code and the Court’s ruling in Serrano v. Severino Santos
Transit. These labor law provisions, when read together with the
Serrano ruling, exempt those engaged on "pakyaw" or task basis
only if they qualify as "field personnel."
The wordings of Article 82 categorize workers "paid by results" and "field
personnel" as separate and distinct types of employees who are
exempted from the Title I provisions of the Labor Code.
The pertinent portion of Article 94 and its corresponding provision in the
IRR reads:
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 (10)
workers[.]
xxxx
SECTION 1. Coverage. – This Rule shall apply to all employees
except:
xxxx
(e)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.
On the other hand, Article 95 and its corresponding provision in the IRR
pertinently provides:
Art. 95. Right to service incentive. (a) Every employee who has
rendered at least one year of service shall be entitled to a yearly
service incentive leave of five days with pay.
(b) This provision shall not apply to those who are already
enjoying the benefit herein provided, those enjoying vacation
leave with pay of at least five days and those employed in
establishments regularly employing less than ten employees or in
establishments exempted from granting this benefit by the
Secretary of Labor and Employment after considering the viability
or financial condition of such establishment.
xxxx
Section 1. Coverage. – This rule shall apply to all employees
except:
xxxx
(e) 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.
GEN. RULE: holiday and SIL pay provisions cover all employees.
EXCEPTION: an employee must be one of those that these provisions
expressly exempt. Under the IRR, exemption from the coverage of holiday
and SIL pay refer to "field personnel and other employees whose time and
performance is unsupervised by the employer including those who are
engaged on task or contract basis."
● Unlike Art 82, the IRR on holiday and SIL pay do not exclude
employees "engaged on task basis" as a separate and distinct
category from employees classified as "field personnel." Rather,
these employees are altogether merged into one classification of
exempted employees.
As early as 1987 in the case of Cebu Institute of Technology v. Ople, the
phrase "those who are engaged on task or contract basis" has already
been interpreted to mean that the payment of an employee on task or
pakyaw basis alone is insufficient to exclude one from the coverage of
SIL and holiday pay. They are exempted from the coverage of Title I
(including the holiday and SIL pay) only if they qualify as "field
personnel." The IRR therefore validly qualifies and limits the general
exclusion of "workers paid by results" found in Article 82 from the
coverage of holiday and SIL pay. This is the only reasonable interpretation
since the determination of excluded workers who are paid by results from
the coverage of Title I is "determined by the Secretary of Labor in
appropriate regulations."
In Serrano which the CA cited in granting Macario’s petition, the Court,
applying the rule on ejusdem generis (that general and unlimited terms
are restrained and limited by the particular terms that they
follow), declared that "employees engaged on task or contract basis xxx
are not automatically exempted from the grant of service incentive leave,
unless, they fall under the classification of field personnel."
CASE AT BAR, Macasio does not fall under the classification of "field
personnel" as defined in Art 82.
● Macasio regularly performed his duties at David’s principal place
of business;
● his actual hours of work could be determined with reasonable
certainty;
● David supervised his time and performance of duties.
Since Macasio cannot be considered a "field personnel," then he is not
exempted from the grant of holiday, SIL pay even as he was engaged on
"pakyaw" or task basis.
Not being a "field personnel," CA was correct when it reversed the NLRC’s
ruling dismissing Macasio’s complaint.
3. ) Macario is not entitled to 13th month pay.
The governing law on 13th month pay is PD No. 851.53
As with holiday and SIL pay, 13th month pay benefits generally cover all
employees; an employee must be one of those expressly enumerated to
be exempted.
Unlike the IRR of the Labor Code on holiday and SIL pay, Section 3(e) of
the IRR of PD No. 851 exempts employees "paid on task basis" without
any reference to "field personnel." This could only mean that insofar as
payment of the 13th month pay is concerned, the law did not intend to
qualify the exemption from its coverage with the requirement that the
task worker be a "field personnel" at the same time.
See: Mantrade/FMMC Division Employees and Workers Union v Artbitrator FM Bacungan
F: The Union questions the decision of the respondent that Mantrade Development
Corporation is not under a legal obligation to pay holiday pay (as provided for in Art. 94 of
the LC) to its monthly paid employees who are uniformly paid by month, irrespective of
the number of working days therein. Under Art. 94 of the LC, monthly salaried employees
are not among those excluded from receiving holiday pay. But they appear to be excluded
under Sec. 2, Rule IV, Book III of the Rules and Regulations implementing the said
provision.
H: Sec. 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 inclusion.
b. Exclusions
A Nate Casket Maker et.al. v Elias Arango plus 9 others
(2016|Peralta)
FACTS:
Armando and Anely Nate are the owners of A. Nate Casket Maker, and
the respondents are their employed carpenters, mascilladors and painters
from 1998- March 2007 (9 years). Nate said that the respondents are
pakyaw workers who are paid per job order, are “stay-in” workers with
free board and lodging. However, they would “always” drink and quarrel
thus they cannot finish their job orders on time. Nate said they would
always have to “contract out” to other workers for the job to be finished.
They met with the respondents on Feb 2007 to present a proposed
employment agreement which would change the existing pakyaw system
to “contractual basis” and would allegedly provide for vacation leave and
sick leave pay and other benefits.
Respondents said that they worked from Mon-Sat, 7AM-10PM with no
overtime pay and benefits. On March 2007, the Nates made them sign a
Contract of Employment that stipulated:
● Contractual basis work for 5 months
● Renewal of employment contract after such period shall be on a
case to case basis, subject to efficiency and performance
● Nates shall reserve to terminate their employment if below
expectations or if the conditions under which they are employed
no longer exist
● Wages on a piece-rate basis
● Strictly follow their work schedules
● Not eligible for sick leave, vacation leave, 13th month pay or
benefits given to regular employees
They allegedly did not sign and the petitioners sent them away
because their employment has been terminated. Complaint for Illegal
Dismissal, Non Payment of Separation Fee, Underpayment, Non-
Payment of Overtime Pay, Holiday Pay, 5-Day Service Incentive Leave
Pay and 13th Month Pay.
LA: Dismissed. Nates did not terminate services, respondents alleged they
were called for the meeting March 2007 but the complaint was filed
February 2007. They were earning more than minimum wage and as
pakyaw workers, albeit regular, they are not entitled to overtime pay,
holiday pay, service incentive leave pay and 13th month pay, citing the
case of field workers and those paid on a purely commission basis.
NLRC: Affirmed. Pakyaw workers not entitled to money claims because
their work depends on the availability of job orders. No proof of overtime
work.
CA: Ruled in favor of respondents.
Issue: W/N they were illegally terminated and W/N pakyaw workers are
entitled to overtime, holiday, service incentive leave pay and 13th month
pay.
Held:
1. Ceritiorari Rule 45 is a mode of appeal where the issue is limited to
questions of law. In labor cases, 45 is limited to reviewing whether the CA
correctly determined the presence or absence of grave abuse of
discretion and deciding other jurisdictional errors of the NLRC.
As to regularity of employment
The employment contract that is supposed to last for 5 months,
renewable upon terms set by the Nates was first presented to the
respondents Feb 2007. The Court held that the respondents’ version of
the story and the employment contract was correct. The Position Paper
of the Nates as to the case are contrary to the presented Employment
Contract (Position Paper “more beneficial”, “will receive a vacation and
sick leave and other benefits given to regular employees” but these were
not in the Employment Contract). There is an absence of proof that the
Nates investigated the alleged drinking and quarrelling. The validity of the
charge must be consistent with due process. The Court held that there
was indeed termination of employment since the employers failed to
discharge the burden of proof that the employees were validly dismissed.
Stipulations in contracts can be ignored when it is prejudicial to the
employees’ security of tenure due to the sheer inequality.
Art. 280 classifies workers into regular, project, seasonal and causal.
Regular employees are further divided into (1) those engaged to
perform activities which are usually necessary/desirable in the usual
business or trade of the employer; (2) casual employees who have
rendered at least one year of service, whether such service is continuous
or broken.
● Regular employment gauged if: (a) manner of selection and
engagement, (b) mode of payment of wages, (c) presence or
absence of the power of dismissal, (d) presence or absence of the
power to control the conduct of the employee or power to
control employee with respect to the means/methods by which
his work is to be accomplished.
CASE AT BAR: The length of time, manner of carpentry, mascilla,
rubbing and painting, had own notebooks where they listed the work
completed with their signature and date finished which would be checked
by the Nates as basis for the compensation for the day show the
respondents were regular employees. While their mode of compensation
was on a per-piece basis, the status and nature of their employment
was that of regular employees.
As to security of tenure
Art. 279. Security of tenure. In cases of regular employment, the employer
shall not terminate the services of an employee except for a just cause or
when authorized by this Title. An employee who is unjustly dismissed from
work shall be entitled to reinstatement without loss of seniority rights and
other privileges and to his full backwages, inclusive of allowances, and to
his other benefits or their monetary equivalent computed from the time
his compensation was withheld from him up to the time of his actual
reinstatement.32chanrobleslaw
Therefore, on the right to security of tenure, no employee shall be
dismissed, unless there are just or authorized causes and only after
compliance with procedural and substantive due process. Section 2, Rule
XIV, Book V of the Omnibus Rules Implementing the Labor Code provides:
CASE AT BAR: Security of tenure and due process was violated
because there was no written notice of termination, they were merely
told their services are terminated. Art. 279 states that they are entitled
to reinstatement and backwages. Reinstatement restores employee to
the position from which he was removed while backwages are when
employee can recover from employer to which he had lost by way of
wages as a result of the dismissal.
As to monetary claims
Separation pay is awarded now instead of reinstatement, which is
the case if reinstatement is no longer practical or in the best interest of
the parties. It had been 9 years since the complaint was filed. In lieu of
reinstatement then, separation pay is at the rate of one month for every
year of service, with a fraction of at least six (6) months of service
considered as one (1) year, is in order. Re amount of backwages, the case
is remanded to the NLRC to know degree of production and days worked
by each worker.
The respondents are also entitled to holiday, overtime and service
incentive leave pay. In the case of David v. Macasio: pakyaw workers are
entitled to holiday and service leave pay provided they are not field
personnel. They are not field personnel because: (1) they regularly do
their duties at the Nates’ place of business, (2) their actual hours of work
could be determined with reasonable certainty, (3) Nates supervised their
time and performance of their duties.
However, they are not entitled to 13th month pay. David v.
Macasio: the law on 13th month pay is PD 851. An employee must be one
of those expressly enumerated in the law to be exempted. Section 3 of
the Rules and Regulations Implementing P.D. No. 851 enumerates the
exemptions from the coverage of 13th month pay benefits. Under Section
3(e), "employers of those who are paid on xxx task basis, and those who
are paid a fixed amount for performing a specific work, irrespective of
the time consumed in the performance thereof' are exempted. Unlike
the IRR of the Labor Code, PD 851 exempts employees “paid on task
basis” w/o reference to field personnel. Thus, ALL workers paid on task
basis are exempted from 13th month pay.
CASE AT BAR: Entitled to all claims because they are not field personnel
but not to 13th month pay by virtue of PD 851. This Act which originated in the Senate was finally passed by the Senate and the House of
Closing: “The law, in protecting the rights of the employees, authorizes Representatives on January 30, 2007 and February 7, 2007, respectively.
Amended EO 929 (Adm. Code 1987)
neither oppression nor self-destruction of the employer. It should be
made clear that when the law tilts the scales of justice in favor of labor, it
is in recognition of the inherent economic inequality between labor and
management. The intent is to balance the scales of justice; to put the two
parties on relatively equal positions.”
2. Regular Holidays/Special Holidays
RA 9492 (2007) - AN ACT RATIONALIZING THE CELEBRATION OF NATIONAL HOLIDAYS
AMENDING FOR THE PURPOSE SECTION 26, CHAPTER 7, BOOK 1 OF EXECUTIVE ORDER
NO. 292, AS AMENDED, OTHERWISE KNOWN AS THE ADMINISTRATIVE CODE OF 1987
SECTION 1. Section 26, Chapter 7, Book 1 of Executive Order No. 292, as amended,
otherwise known as the Administrative Code of 1987, is hereby amended to read as
follows:
“SEC. 26. Regular Holidays and Nationwide Special Days. — (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 Year’s Day -January 1
Maundy Thursday -Movable Date
Good Friday -Movable Date
Eidul Fitr -Movable Date
Araw ng Kagitingan (Bataan 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
b) Nationwide Special Holidays
Ninoy Aquino Day -Monday nearest August 21
All Saints Day -November 1
Last Day of the Year -December 31
c) In the event the holiday falls on a Wednesday, the holiday will be observed on the
Monday of that week. If the holiday falls on a Sunday, the holiday will be observed on the
Monday that follows:
Provided, That for movable holidays, the President shall issue a proclamation, at least six
months prior to the holiday concerned, the specific date that shall be declared as a
nonworking day:
Provided, however, That Eidul Adha shall be celebrated as a regional holiday in the
Autonomous Region in Muslim Mindanao.”
SECTION 2. All laws, orders presidential issuances, rules and regulations or part
thereof inconsistent with this Act are hereby repealed or modified accordingly.
SECTION 3. This Act shall take effect after fifteen (15) days following its publication in
at least two newspapers of general circulation.
 3. Holiday Pay
 NLRC affirmed with modification regarding the teaching personnel
LC. Art. 94(b) The employer may require an employee to work on any holiday but such
employee shall be paid a compensation equivalent to twice his regular rate;
a. Faculty in Private School
Omnibus Rules, Book III, Rule IV, Sec. 8 (a) Private school teachers, including faculty
members of colleges and universities, may not be paid for the regular holidays during
semestral vacations. They shall, however, be paid for the regular holidays during
Christmas vacation;
JOSE RIZAL COLLEGE V. NLRC AND NATIONAL ALLICANCE OF
TEACHERS/PFFOCE WORKERS (NATOW)
J. PARAS | DECEMBER 1, 1987
FACTS
 Petitioner is a non-stock, non-profit educational institution. It has 3
groups of employees (according to how they are paid their wages):
1. personnel on monthly basis: receive monthly salary uniformly
throughout the year, irrespective of the actual number of
working days in a month without deduction or holidays
2. personnel on daily basis: paid on actual days worked and receive
unworked holiday pay
3. personnel on hourly basis: collegiate faculty paid on the basis of
student contract hour. Before the semester they sign contracts
about their schedules
 unable to receive holiday pay from 1975 to 1977, private respondent
NATOW in behalf of the faculty and personnel filed with the Ministry
of Labor a complaint for non-payment of holiday pay
 LA ruled as follows:
personnel on Presumed to be already paid for the 10 legal
monthly basis holidays and are no longer entitled to separate
payment for the said regular holidays
ISSUE: WoN the school faculty who according to their contracts are paid
personnel on Entitled to be paid the 10 unworked regular
per lecture hour are entitled to unworked holiday pay  NO with
daily basis holidays
respect to regular holidays, YES with respect to special holidays
personnel on Not entitled to unworked regular holiday pay
RATIO:
hourly basis considering that these regular holidays have been
excluded in the programming of the student
contract hours
paid hourly, holding that they should also be declared to be entitled
to holiday pay
 On appeal, petitioner argues:
o it is not covered by Book V of the Labor Code considering
that it is a non-profit institution
o its hourly paid faculty members are paid on a contract basis
because they are required to hold classes for a particular
number of hours. In programming these student contract
hours, legal holidays are excluded and labelled in the
schedule as no class day. On the other hand, if a regular
weekday is declared a holiday, the school calendar is
extended to compensate for that day. Thus, if any legal
holiday is declared during the semester, it will not affect the
faculty’s salary because the programmed number of lecture
hours is unchanged.
 Solicitor General argues:
o The only exception o Art.94, LC are retail and service
establishments
o To deprive employees paid at an hourly rate of unworked
holiday pay is contrary to policy considerations of the LC,
Constitution and Blue Sunday Law (RA 946, the precursor of
the holiday pay provision of LC)
 According to the NLRC:
o purpose of holiday pay is to prevent diminution of monthly
income of workers on account of work interruptions.
Therefore, although a worker is forced to rest during holiday,
he should earn what he should earn.
o It is no excuse that the school calendar is extended whenever
holidays occur, because such happens only in cases of special
holidays
 The IRR of the LC, Rule IV, Book III provides that: Private school
teachers, including faculty members of colleges and universities, may
not be paid for the regular holidays during semestral vacations. They
shall, however, be paid for the regular holidays during Christmas
 vacations. among others, the payment of holiday pay with a stipulation that
o Under this provision, petitioner, although a non-profit if an employee is permitted to work on a legal holiday, the
institution, is under obligation to give pay even on unworked employee will receive a salary equivalent to 200% of the regular
regular holidays to hourly paid faculty members daily wage plus 60% premium pay
 The SC held that the said IRR is not justified by Art.94, LC which is  But the claim of TAPEA for holiday pay for 1985 to 1987 was still
silent with respect to faculty members paid by the hour. left unresolved, so they underwent preventive mediation
o By the nature of their work, they are obliged to work and meetings. They weren’t able to arrive at a settlement therefore
consent to be paid only for work actually done. TAPEA filed a complaint before the Labor Arbiter for the payment
o Regular holidays are known to both school and faculty of their holiday pay in arrears.
members as no class days, hence, the faculty members do Arguments
not expect payment for said unworked days Petitioners (TAPEA) Private respondents (Trans-Asia)
 But Art.94, LC and IRR are both silent as to payment on Special Public Non-payment of holiday pay is Trans-Asia has always
Holidays based on non-inclusion of this in incorporated the holiday pay in
o In case of special holidays, the faculty member, although their monthly pay the payment of monthly salaries
forced to take a rest, does not earn what he should earn on
that day Circumstances which support their They have been using the divisor
o When a special holiday is declared, the faculty member paid claim for holiday pay: 286 days in computing for the
by the hour is deprived of expected income 1. Trans-Asia’s Employees’ overtime pay and daily rate
o It does not matter that the school calendar is extended Manual requires that the deductions for absences.
because their income that could be earned from other employee should have worked
sources is lost during the extended days or was on authorized leave 52 x 44 = 286 days
o This also applies to class suspensions due to typhoons, with pay on the day
floods, rallies, etc immediately preceding the Where: 52 = number of weeks in
RULING: decision of NLRC modified: legal holiday a year
 Petitioner exempted from paying hourly paid faculty members their  Arg: If the intention of 44 = number of work hours per
pay for regular holidays intention of the company week
 Petitioner ordered to pay the said faculty members their regularly was not to pay holiday pay 8 = number of work hours per
hourly rate on days declared as special holidays or class suspensions in addition to the day
Other issue: on due process  petitioner was amply heard and employee’s monthly pay,
represented in the instant administraitive proceedings (submitted then there would be no The divisor takes into account the
position paper before LA and NLRC and even got to file MR). Hence no need to impose or specify 10 regular holidays because it
denial of due process the pre-condition for only subtracts 52 Sundays and 26
payment Saturdays (rest days, because
b. Divisor as Factor
2. Their appointment papers they work half-day during
TRANS-ASIA PHILS. EMPLOYEES ASSOCIATION V NLRC didn’t specify any stipulation Saturdays).
G.R. No. 118289 | December 13, 1999 | Kapunan, J. on the inclusion of holiday pay
Facts in their monthly salary The holiday pay rate was
 Trans-Asia Philippines Employees Association (TAPEA) and Trans-  Absence of such stipulation included in the CBA to comply
Asia entered into a CBA (for 1988 to 1991) which, provided for, an indication that it’s not with Sec 4, Rule IV, Book III of the
 incorporated in their salary Omnibus Rues.
3. Inclusion of the provision in the
CBA regarding the payment of
holiday pay
 Tacit admission it wasn’t
paid during the period
prior to the CRA
Procedural History
 Labor Arbiter dismissed the complaint
 NLRC affirmed
Issue: WN holiday pay was already included in the monthly pay of the
petitioners – YES
Ratio
 The inclusion of holiday pay in the monthly salary is clearly
established by its consistent use of the divisor of 286 days
o The 10 legal holidays are already accounted for since
they’re not included in the subtraction of the unworked
and unpaid days in a calendar year
 BUT there is a need to adjust the divisor to 287, instead of 286
days
o Based on EO 203, the proper divisor that should be used
where employees are not considered paid on Saturdays
and Sundays (rest days), is 262 days
o Since they’re required to work half-day on Saturdays, 26
days should be added, making it 288 days
o But the number of unworked but paid legal holidays
should be reduced to 9 instead of 10, because National
Heroes Day is always on the last Sunday of August, so the
divisor should be 287
 HOWEVER if the divisor is increased to 287 days, the daily rate for
purposes of overtime pay, holiday pay and conversions of
accumulated leaves would be diminished
 i.e. (P8,000 monthly salary x 12 months) / 287
days = P334.49 / day
o but if it were 286 days:
 (P 8,000 x 12 months) / 286 days = P335.66/day
o This situation would be violative of the proscription on
the non-dimunition of beneits under Sec 100, LC
 But if 287 days were used for computing deductions due to the
absences, it would be to the employees’ advantage
 THEREFORE: The adjusted divisor of 287 days should only be used
by Trans-Asia for computations which would be advantageous to
the petitioners (i.e. deductions for absences) and not for
computations which would diminish the existing benefits of the
employees (i.e. overtime pay, holiday and leave conversions)
Ruling: NLRC AFFIRMED with modifications
c. Sunday
LC. Art. 93 (a) 2nd sentence
An employee shall be entitled to such additional compensation for work performed on
Sunday only when it is his established rest day.
(b) When the nature of the work of the employee is such that he has no regular workdays
and no regular rest days can be scheduled, he shall be paid an additional compensation of
at least thirty percent (30%) of his regular wage for work performed on Sundays and
holidays.
Omnibus Rules Book III, Rule IV, 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 paid for all days in the month whether worked or not.
For this purpose, the monthly minimum wage shall not be less than the statutory
minimum wage multiplied by 365 days divided by twelve.
Wellington Investment Inc v Hon Trajano & Elmer Abadilla & 34 others
July 3, 1995 || Narvasa, C.J.
FACTS
 Labor Enforcement Officer conducted a routine inspection
of Wellington Flour Mills and found out that there was
“non-payment of regular holidays falling on a Sunday for
monthly-paid employees”.
 Wellington argued that the monthly salary of the company’s
monthly-salaried employees already includes holiday pay for
all regular holidays. They are paid a fixed monthly
compensation "using the 314 factor which undeniably covers
and already includes payment for all the working days in a
month as well as all the 10 unworked regular holidays within
a year."
  The Regional Director was not convinced and ruled in favor
of employees, directing Wellington to pay them
compensation corresponding to 4 extra working days. He
ruled that "when a regular holiday falls on a Sunday, an
extra or additional working day is created and the employer
has the obligation to pay the employees for the extra day
except the last Sunday of August since the payment for the
said holiday is already included in the 314 factor." DOLE
Undersecretary affirmed.
ISSUE
W/N a monthly-paid employee, receiving a fixed monthly compensation,
is entitled to an additional pay aside from his usual holiday pay, whenever
a regular holiday falls on a Sunday? NO
RATIO
 MONTHLY-PAID EMPLOYEES are those uniformly paid by
month, and their monthly minimum wage “shall not be less
than the statutory minimum wage multiplied by 365 days
divided by twelve." This monthly salary shall serve as
compensation "for all days in the month whether worked or
not," and "irrespective of the number of working days
therein." (Sec 1 Omnibus Rules)
 IN OTHER WORDS, the employee is entitled to receive the
entire monthly salary regardless of the number of days in a
month or the declaration of any special holiday or any
fortuitous cause precluding work on any particular day or
days, and the employer has no right to deduct the
proportionate amount corresponding to the days when no
work was done. This is intended precisely to avoid
computations and adjustments resulting from the
contingencies just mentioned which are routinely made in
the case of workers paid on daily basis.
 IN THIS CASE, there is no question that Wellington complied
with the minimum norm laid down by law. Apparently the
monthly salary was fixed by Wellington to provide for
compensation for every working day of the year including
the holidays specified by law — and excluding only Sundays.
Wellington used the "314 factor" – it simply deducted 51
Sundays from the 365 days normally comprising a year and
used the difference, 314, as basis for determining the
monthly salary. The monthly salary thus fixed actually
covers payment for 314 days of the year, including regular
and special holidays, as well as days when no work is done
by reason of fortuitous cause, as above specified, or causes
not attributable to the employees.
 The routine inspection yielded that there were two or three
regular holidays falling on a Sunday. BUT, the Labor Officer,
Regional Director, and Undersecretary were wrong when
they rationalized that there should be an additional
payment by Wellington for those 3 working days for 1988,
1989, and 1990. Such theory would make each of the years
in question a year of 368 days. Pursuant to this theory, no
employer opting to pay his employees by the month would
have any definite basis to determine the number of days in
a year for which compensation should be given to his work
force. He would have to ascertain the number of times legal
holidays would fall on Sundays in all the years of the
expected or extrapolated lifetime of his business.
Alternatively, he would be compelled to make adjustments
in his employees' monthly salaries every year, depending on
the number of times that a legal holiday fell on a Sunday.
 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. Instead, what the rule
requires, as earlier mentioned, is that monthly-paid
employees are assured that their wage shall not be less than
the statutory minimum wage multiplied by 365 divided by
12.
 In promulgating the orders complained of the public
respondents have attempted to legislate, or interpret legal
provisions in such a manner as to create obligations where
 none are intended. They have acted without authority, or at
the very least, with grave abuse of their discretion. Their
acts must be nullified and set aside.
ORDERS OF UNDERSECRETARY AND REGIONAL DIRECTOR NULLIFIED AND
SET ASIDE, and the proceeding against petitioner DISMISSED.
d. Muslim holiday
PD 1083 - BOOK FIVE - MISCELLANEOUS AND TRANSITORY PROVISIONS
TITLE I - MUSLIM HOLIDAYS
Article 169. Official Muslim holidays. The following are hereby recognized as legal Muslim
holidays:
a. 'Amun Jadid (New Year), which falls on the first day of the first lunar month of
Muharram;
b. Maulid-un-Nabi (Birthday of the Prophet Muhammad), which falls on the twelfth
day of the third lunar month of Rabi-ul-Awwal;
c. Lailatul Isra Wal Mi'raj (Nocturnal Journey and Ascension of the Prophet
Muhammad), which falls on the twenty-seventh day of the seventh lunar month
of Rajab;
d. 'Id-ul-Fitr (Hari Raya Pausa), which falls on the first day of the tenth lunar month
of Shawwal, commemorating the end of the fasting season; and
e. 'Id-ul-Adha (Hari Raja Haji), which falls on the tenth day of the twelfth lunar
month of Dhu 1-Hijja.
Article 170. Provinces and cities where officially observed.
1. Muslim holidays shall be officially observed in the Provinces of Basilan, Lanao del
Norte, Lanao del Sur, Maguindanao, North Cotabato, Sultan Kudarat, Sulu, Tawi-
Tawi, Zamboanga del Norte and Zamboanga del Sur, and in the Cities of
Cotabato, Iligan, Marawi, Pagadian, and Zamboanga and in such other Muslim
provinces and cities as may hereafter be created.
2. Upon proclamation by the President of the Philippines, Muslim holidays may
also be officially observed in other provinces and cities.
Article 171. Dates of observance. The dates of Muslim holidays shall be determined by the
Office of the President of the Philippines in accordance with the Muslim Lunar Calendar
(Hijra).
Article 172. Observance of Muslim employees.
1. All Muslim government officials and employees in places other than those
enumerated under Article 170 shall also be excused from reporting to office in
order that they may be able to observe Muslim holidays.
2. The President of the Philippines may, by proclamation, require private offices,
agencies or establishments to excuse their Muslim employees from reporting for
work during a Muslim holiday without reduction in their usual compensation.
RA 9492
Amended EO 292
SAN MIGUEL CORPORATION, petitioner, vs. THE HONORABLE COURT OF
APPEALS-FORMER THIRTEENTH DIVISION, HON. UNDERSECRETARY JOSE
M. ESPAÑOL, JR., Hon. CRESENCIANO B. TRAJANO, and HON. REGIONAL
DIRECTOR ALLAN M. MACARAYA, respondents.
Facts:
 On 17 October 1992, DOLE conducted a routine inspection
in the premises of San Miguel Corporation (SMC) in Sta.
Filomena, Iligan City. In the course of the inspection, it was
discovered that there was underpayment by SMC of regular
Muslim holiday pay to its employees. DOLE sent a copy of
the inspection result to SMC, received by a personnel
officer. SMC contested the findings and DOLE conducted
summary hearings on 19 November 1992, 28 May 1993 and
4 and 5 October 1993. Still, SMC failed to submit proof that
it was paying regular Muslim holiday pay to its
employees. Hence, Alan M. Macaraya, Director IV of DOLE
Iligan District Office issued a compliance order, dated 17
December 1993, directing SMC to consider Muslim holidays
as regular holidays and to pay both its Muslim and non-
Muslim employees holiday pay within thirty (30) days from
the receipt of the order.
 SMC appealed to the DOLE main office in Manila but its
appeal was dismissed for having been filed late. The
dismissal of the appeal for late filing was later on
reconsidered in the order of 17 July 1998 after it was found
that the appeal was filed within the reglementary
period. However, the appeal was still dismissed for lack of
merit and the order of Director Macaraya was affirmed.
 SMC went to this SC via certiorari, which SC referred to CA.
CA ruled as follows: WHEREFORE, the Order
dated December 17, 1993 of Director Macaraya and Order
dated July 17, 1998 of Undersecretary Español, Jr. is hereby
MODIFIED with regards the payment of Muslim holiday pay
from 200% to 150% of the employee's basic salary. Let this
case be remanded to the Regional Director for the proper
computation of the said holiday pay.
Issue: WoN public respondents erred in granting Muslim Holiday Pay to
Non-Muslim employees of SMC.
Held: No.
 Petitioner asserts that Article 3(3) of Presidential Decree No.
1083 provides that “(t)he provisions of this Code shall be
applicable only to Muslims x x x.” However, there should be
no distinction between Muslims and non-Muslims as
regards payment of benefits for Muslim holidays. The Court
of Appeals did not err in sustaining Undersecretary Español
who stated:
 Assuming arguendo that the respondent’s position is
correct, then by the same token, Muslims throughout
the Philippines are also not entitled to holiday pays on
Christian holidays declared by law as regular holidays. We
must remind the respondent-appellant that wages and
other emoluments granted by law to the working man are
determined on the basis of the criteria laid down by laws
and certainly not on the basis of the worker’s faith or
religion.
 At any rate, Article 3(3) of Presidential Decree No. 1083 also
declares that “x x x nothing herein shall be construed to
operate to the prejudice of a non-Muslim.”
 Considering that all private corporations, offices, agencies,
and entities or establishments operating within the
designated Muslim provinces and cities are required to
observe Muslim holidays, both Muslim and Christians
working within the Muslim areas may not report for work
on the days designated by law as Muslim holidays.
 In the case before us, petitioner did not deny that it was not
paying Muslim holiday pay to its non-Muslim
employees. Indeed, petitioner merely contends that its
non-Muslim employees are not entitled to Muslim holiday
pay. Hence, the issue could be resolved even without
documentary proofs. In any case, there was no indication
that Regional Director Macaraya failed to consider any
documentary proof presented by SMC in the course of the
inspection.
 Anent the allegation that petitioner was not accorded due
process, we sustain the Court of Appeals in finding that SMC
was furnished a copy of the inspection order and it was
received by and explained to its Personnel Officer.
4. Absences
Omnibus Rules Book III, Rule IV, Sec. 6 (a) All covered employees shall be entitled to the
benefit provided herein when they are on leave of absence with pay. Employees who are
on leave of absence without pay on the day immediately preceding a regular holiday may
not be paid the required holiday pay if he has not worked on such regular holiday
Sec. 10 Successive regular holidays. — Where there are two (2) successive regular
holidays, like Holy Thursday and Good Friday, an employee may not be paid for both
holidays if he absents himself from work on the day immediately preceding the first
holiday, unless he works on the first holiday, in which case he is entitled to his holiday pay
on the second holiday
5. Non-working day/sched. Rest day
Omnibus Rules Book III, Rule Iv, Sec. 6 (c) Where the day immediately preceding the
holiday is a non-working day in the establishment or the scheduled rest day of the
employee, he shall not be deemed to be on leave of absence on that day, in which case he
shall be entitled to the holiday pay if he worked on the day immediately preceding the
nonworking day or rest day.
D. Service Incentive Leave
LC. Art. 95 Right to service incentive leave.
1. Every employee who has rendered at least one year of service shall be entitled
to a yearly service incentive leave of five days with pay.
2. This provision shall not apply to those who are already enjoying the benefit
herein provided, those enjoying vacation leave with pay of at least five days and
those employed in establishments regularly employing less than ten employees
or in establishments exempted from granting this benefit by the Secretary of
Labor and Employment after considering the viability or financial condition of
such establishment.
3. The grant of benefit in excess of that provided herein shall not be made a
subject of arbitration or any court or administrative action.
Omnibus Rules, Book III, Rule V - Service Incentive Leave
SECTION 1. Coverage. — This rule shall apply to all employees except:
a. Those of the government and any of its political subdivisions, including
government-owned and controlled corporations;
b. Domestic helpers and persons in the personal service of another;
c. Managerial employees as defined in Book Three of this Code;
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;
e. Those who are already enjoying the benefit herein provided;
f. Those enjoying vacation leave with pay of at least five days; and
g. Those employed in establishments regularly employing less than ten employees.
SECTION 2. Right to service incentive leave. — Every employee who has rendered at least
one year of service shall be entitled to a yearly service incentive leave of five days with
pay.
SECTION 3. Definition of certain terms. — The term "at least one-year service" shall mean
service for not less than 12 months, whether continuous or broken reckoned from the
date the employee started working, including authorized absences and paid regular
holidays unless the working days in the establishment as a matter of practice or policy, or
that provided in the employment contract is less than 12 months, in which case said
period shall be considered as one year.
SECTION 4. Accrual of benefit. — Entitlement to the benefit provided in this Rule shall
start December 16, 1975, the date the amendatory provision of the Code took effect.
SECTION 5. Treatment of benefit. — The service incentive leave shall be commutable to its
money equivalent if not used or exhausted at the end of the year.
SECTION 6. Relation to agreements. — Nothing in the Rule shall justify an employer from
withdrawing or reducing any benefits, supplements or payments as provided in existing
individual or collective agreements or employer's practices or policies.
1. Coverage/Exclusions
LC. Art. 95 (a) (b) Right to service incentive leave.
a. Every employee who has rendered at least one year of service shall be entitled
to a yearly service incentive leave of five days with pay.
b. This provision shall not apply to those who are already enjoying the benefit
herein provided, those enjoying vacation leave with pay of at least five days and
those employed in establishments regularly employing less than ten employees
or in establishments exempted from granting this benefit by the Secretary of
Labor and Employment after considering the viability or financial condition of
such establishment.
Omnibus Rules, Book III, Rule V, Sec. 1
SECTION 1. Coverage. — This rule shall apply to all employees except:
a. Those of the government and any of its political subdivisions, including
government-owned and controlled corporations;
b. Domestic helpers and persons in the personal service of another;
c. Managerial employees as defined in Book Three of this Code;
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;
e. Those who are already enjoying the benefit herein provided;
f. Those enjoying vacation leave with pay of at least five days; and
g. Those employed in establishments regularly employing less than ten employees.
Makati Haberdashery Inc v NLRC Sandigan - TUCP & its 17 members
FACTS
 Private respondents are employees of Petitioner. They are
paid on a piece-rate basis. They are required to work from
or before 9:30 a.m. up to 6:00 or 7:00 p.m. from Monday to
Saturday and during peak periods even on Sundays and
holidays.
 Sandigan ng Manggagawang Pilipino (SMP), a labor
organization of the respondent workers, filed a complaint
against petitioner for underpayment of minimum wage,
Cost of living allowance, 13th month pay, and SIL etc.
 During pendency, a complaint for illegal dismissal was filed
by Pelobello and Zapata. They were dismissed for allegedly
accepting a job order which is prejudicial and in direct
competition with the business of the company.
 NLRC rendered judgement in favor of Pelobello and Zapata
in their case.
 NLRC denied SMP’s complaint regarding underpayment of
minimum wage but found MHI to have violated the decrees
on the cost of living allowance, service incentive leave pay
and the 13th Month Pay. Hence.
ISSUES/HELD
1.) W/N an ee-er relationship exists between petitioner and private
respondents – YES
They passed the four fold test. Petitioner exercised control in the
following manner: when a customer enters into a contract with the
haberdashery or its proprietor, the latter directs an employee who may
be a tailor, pattern maker, sewer or "plantsadora" to take the customer's
measurements, and to sew the pants, coat or shirt as specified by the
customer. Supervision is actively manifested in all these aspects — the
manner and quality of cutting, sewing and ironing.
2.) W/N Respondent workers are entitled to monetary claims despite the
finding that they are not entitled to minimum wage – YES
As a consequence of their status as regular employees of the petitioners,
they can claim cost of living allowance. Private respondents are also
entitled to claim their 13th Month Pay. However, they are not entitled to
service incentive leave pay because as piece-rate workers being paid at a
fixed amount for performing work irrespective of time consumed in the
performance thereof, they fall under one of the exceptions stated in
Section 1(d), Rule V, Implementing Regulations, Book III, Labor Code.
2. Requirements
LC. Art. 95 (a) Right to service incentive leave.
a. Every employee who has rendered at least one year of service shall be entitled
to a yearly service incentive leave of five days with pay.
Omnibus Rules, Book III, Rule V, Sec. 2
SECTION 2. Right to service incentive leave. — Every employee who has rendered at least
one year of service shall be entitled to a yearly service incentive leave of five days with
pay.
a. Meaning - “at least one year of service”
Omnibus Rules, Book III, Rule V, Sec. 3
SECTION 3. Definition of certain terms. — The term "at least one-year service" shall mean
service for not less than 12 months, whether continuous or broken reckoned from the
date the employee started working, including authorized absences and paid regular
holidays unless the working days in the establishment as a matter of practice or policy, or
that provided in the employment contract is less than 12 months, in which case said
period shall be considered as one year.
b. Treatment of benefits
Omnibus Rules, Book III, Rule V, Sec. 5
SECTION 5. Treatment of benefit. — The service incentive leave shall be commutable to its
money equivalent if not used or exhausted at the end of the year.
E. Vacation Leave/Sick Leave
PNCC Skyway Traffic Management and Security Division Workers
Organization V PNCC Skyway Corp.
Facts:
 Petitioner PNCC Skyway Corporation Traffic Management and
Security Division Workers’ Organization (PSTMSDWO) is a labor
union duly registered with the (DOLE).
 Respondent PNCC Skyway Corporation is a corporation duly
organized and operating under and by virtue of the laws of the
Philippines.
 On November 15, 2002, petitioner and respondent entered into a
Collective Bargaining Agreement (CBA) incorporating the terms
and conditions of their agreement which included vacation leave
and expenses for security license provisions.
XXX
[b] The company shall schedule the vacation leave of employees during
the year taking into consideration the request of preference of the
employees.
XXX
 On a Memorandum dated December 29, 2003, respondent’s
Head of the Traffic Management and Security Department
(TMSD) published the scheduled vacation leave of its TMSD
personnel for the year 2004.
 The 17 days (15 days SVL plus 2-day-off) scheduled vacation leave
(SVL) with pay for the year 2004 had been published for everyone
to take a vacation with pay which will be our opportunity to enjoy
quality time with our families and perform our other activities
requiring our personal attention and supervision.
o Swapping of SVL schedule is allowed on a one-on-one
basis by submitting a written request at least 30 days
before the actual schedule of SVL duly signed by the
concerned parties.
 Petitioner
o Objected to the implementation of the said
memorandum. It insisted that the individual members of
the union have the right to schedule their vacation leave.
o Scheduling of the employees’ vacation leave was done to
avoid the monetization of their vacation leave in
December as evidence by the following statements from
the company:
 As we are targeting the zero conversion comes
December 2004, it is suggested that the leave
balances as of to date be given preferential
scheduling.
o The requirement for the renewal of their license, be
shouldered by the respondent.
 Respondent stood firm on its decision to schedule all the vacation
leave of petitioner’s members.
 Petitioner elevated the matter to the DOLE-NCMB for preventive
 mediation. For failure to settle the issue amicably, the parties
agreed to submit the issue before the voluntary arbitrator.
 The voluntary arbitrator decided that scheduling of all vacation
leaves under Article VIII, Section 6, thereof, shall be under the
discretion of the union members, the management to convert
them into cash all the leaves which the management compelled
them to use to pay the expenses for the in-service-training of the
company security guards.
o Motion for reconsideration was denied by the arbitrator.
 CA rendered a Decision dated October 4, 2005, annulling and
setting aside the decision and order of the voluntary arbitrator
since the provisions of the CBA were clear, the voluntary
arbitrator has no authority to interpret the same beyond what
was expressly written. Petitioner filed a motion for
reconsideration, which the CA denied through the objection
based on technicality raised by respondent.
Issue:
Procedural: W/N the Union President has authority to sign the pertinent
documents/certifications required in this case? YES
 Respondent: alleged that the petition was fatally defective due to
the lack of authority of its union president, Rene Soriano, to sign
the certification and verification against forum shopping on
petitioner’s behalf. It alleged that the authority of Rene Soriano
to represent the union was only conferred on June 30, 2006 by
virtue of a board resolution, while the Petition for Review had
long been filed on February 27, 2006. Thus, Rene Soriano did not
possess the required authority at the time the petition was filed
on February 27, 2006.
 Petitioner: the Board Resolution11 dated June 30, 2006 merely
reiterated the authority given to the union president to represent
the union, which was conferred as early as October 2005.
 The purpose of requiring verification is to secure an assurance
that the allegations in the petition have been made in good faith;
or are true and correct, not merely speculative.
 The following officials or employees of the company can sign the
verification and certification without need of a board resolution:
(1) the Chairperson of the Board of Directors, (2) the President of
a corporation, (3) the General Manager or Acting General
Manager, (4) Personnel Officer, and (5) an Employment Specialist
in a labor case.
 In the case at bar, We rule that Rene Soriano has sufficient
authority:
o (1) the resolution dated June 30, 2006 was merely a
reiteration of the authority given to the Union President
to file a case before this Court that even prior to the filing
of the petition before Us on February 27, 2006, the
president of the union was duly authorized to represent
the union and to file a case on its behalf.
o (2) being the president of the union, Rene Soriano is in a
position to verify the truthfulness and correctness of the
allegations in the petition.
o (3) assuming that Mr. Soriano has no authority to file the
petition on February 27, 2006, the passing on June 30,
2006 of a Board Resolution authorizing him to represent
the union is deemed a ratification of his prior execution
MERITS OF THE CASE
Issue: W/N the union members have preference in scheduling their VL?
NO
 Petitioner:
o union members have the preference in scheduling their
vacation leave
o respondent to provide and/or shoulder the expenses for
the in-service training
 Respondent:
o Article VIII, Section 1 (b) gives the management the final
say regarding the vacation leave schedule of its employee
o did not accede to the union’s request invoking the CBA
provision which states that all expenses of security guards
in securing /renewing their license shall be for their
personal account.
 Where the language of a contract is plain and unambiguous, its
meaning should be determined without reference to extrinsic
facts or aids.
 In the case at bar, the contested provision of the CBA is clear and
unequivocal. Article VIII, Section 1 (b) of the CBA categorically
provides that the scheduling of vacation leave shall be under the
option of the employer.
 Granting to management of the right to schedule vacation leaves
 is not without good reason. maintain and upgrade the standards of efficiency, discipline,
o It ensures that there would always be enough people performance and competence of their personnel, it follows that
manning and servicing the toll ways, which in turn assures the expenses to be incurred therein shall be for the personal
the public plying the same orderly and efficient toll way account of the company. Further, the intent of the law to impose
service.” upon the employer training is manifested in the aforementioned
o Indeed, the multitude or scarcity of personnel manning law’s provision that Where the quality of training is better served
the tollways should not rest upon the option of the by centralization, the CFSD Directors may activate a training staff
employees, as the public using the skyway system should from local talents to assist. The cost of training shall be pro-rated
be assured of its safety, security and convenience. among the participating agencies/private companies. It can be
 Although the preferred vacation leave schedule of petitioner’s gleaned from the said provision that cost of training shall be pro-
members should be given priority, they cannot demand, as a rated among participating agencies and companies if the training
matter of right, that their request be automatically granted by the is best served by centralization.
respondent. If the petitioners were given the exclusive right to
schedule employer is given the leeway to impose conditions on
See again: Virginia Sugue & the Heirs of Renato Valderrama v Triumph International
the entitlement to and commutation of the same, as the grant of
F: Virginia and Renato worked for Triumph and later filed a complaint for non-payment of
vacation leave is not a standard of law, but a prerogative of unpaid vacation and sick leave credits, birthday leave and 13th month pay. To attend the
management. preliminary conference of the case, they missed office hours and used the company car
 The latter can also compel its employees to exhaust all their which was charged against their vacation leave.
vacation leave credits. BUT days unscheduled by the employer, or H: Laborers who voluntarily absent themselves from work to attend the hearing of a case
in which they seek to prove and establish their demands against the company, the legality
any scheduled vacation leave that was not enjoyed by the and propriety of which demands is not yet known, should lose their pay during the period
employee upon the employer’s directive, due to exigencies of the of such absence from work. The age old rule governing the relation between labor and
service, must be converted to cash, as the vacation leave privilege capital or management and employee is that a "fair day's wage for a fair day's labor."
was not intended to serve as additional salary, but as a
nonmonetary benefit. To give the employees the option not to
consume it with the aim of converting it to cash at the end of the
year would defeat the very purpose of vacation leave.
W/N employer should be accountable for the in service training of SG?
YES
 In-service training is a requirement for the renewal of a security
guard’s license.24 Hence, following the aforementioned CBA
provision, the expenses for the same must be on the personal
account of the employee
XXX
Section 12. In service training.—a. strength. Where the quality of training
is better served by centralization, the CSFD Directors may activate a
training staff from local talents to assist. The cost of training shall be pro-
rated among the participating agencies/private companies.
XXX
 Primary responsibility of operators of company security forces to