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1. ARIZALA VS. COURT OF APPEALS

FACTS:

The Industrial Peace Act, prohibited supervisors to become or continue to be members of labororganizations composed of rank and file employees and it prescribed criminal sanctions for the violationsfor the break of prohibition. It was under the regime of said IPA that the GSIS became bound by a collectivebargaining agreement executed between it the labor organization of its employees, aka GSIS Employees

Association. The agreement contained a maintainance of membership clause which provides that allemployees who, at the time of the execution of said agreement, were members of the union or becamemembers of the union thereafter were obliged to maintain membership in said union as a condition for theircontinued employment in the GSIS.

At that time the petitioners Pablo Arizala and Sergio Maribao were respectively the Chief of the AccountingDivision and the Chief of the Billing Section of the said Division in the Central Visayas Regional Office ofthe GSIS, while Leonardo Joven and FelindoBulandus were respectively Asst. Chief of the AccountingDivision and Asst. Chief of the Field Service and Non-Life Insurance Division of the same office.

They were demanded to resign from the GSIS Employees Association in view of their supervisory positions

but they refused to do so. 2 criminal cases for violation of the Industrial Peace Act was filed against themand they were convicted before the City Court of Cebu.

The employees contend that that since the provisions of 1987 Constitution and of the Labor Codesubsequently promulgated, it repealed the Industrial Peace Act-placed employees of all categories ingovernment-owned or controlled corporations without distinction within the Civil Service, and provided thatthe terms and conditions of their employment were to be "governed by the Civil Service Law, rules andregulations" and hence, no longer subject of collective bargaining, the appellants ceased to fall within thecoverage of the Industrial Peace Act and should thus no longer continue to be prosecuted and exposed topunishment for a violation thereof.

ISSUE: W/N the petitioners criminal liability for violation of the industrial peace act may be deemed to havebeen obliterated by virtue of subsequent legislation and the provisions of 1973 and 1987 constitution

HELD:

YES.

The Labor Code exempted government employees from the right to self organization for purposes ofcollective bargaining. The reason for denying to government employees the right to "self-organization andto form, join or assist labor organizations for purposes of collective bargaining" is presumably the same asthat under the Industrial Peace Act, i.e., that the terms and conditions of government employment are fixedby law and not by collective bargaining.

But EO 111 restored the right to organize and to negotiate and bargain of employees of "governmentcorporations established under the Corporation Code." And EO 180, and apparently RA 6715(amended of

Labor Code), too, granted to all government employees the right of collective bargaining or negotiationexcept as regards those terms of their employment which were fixed by law; and as to said terms fixed bylaw, they were prohibited to strike to obtain changes thereof.

Under RA 6715 labor unions are regarded as organized either (a) "for purposes of negotiation," or (b) "forfurtherance and protection"of the members' rights. Membership in unions organized "for purposes ofnegotiation" is open only to rank-and-file employees. "Supervisory employees" are ineligible "formembership in a labor organization of the rank-and-file employees but may join, assist or form separatelabor organizations of their own," i.e., one organized "for furtherance and protection" of their rights andinterests. However, according to the Rules implementing RA 6715, "supervisory employees who areincluded in an existing rank-and- file bargaining unit, upon the effectivity of Republic Act No. 6715 shallremain in that unit ..." Supervisory employees are "those who, in the interest of the employer, effectivelyrecommend such managerial actions 45 if the exercise of such authority is not merely routinary or clerical

in nature but requires the use of independent judgment. 46

Membership in employees' organizations formed for purposes of negotiation are open to rank-and-fileemployees only, as above mentioned, and not to high level employees. Indeed, "managerial employees" or

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"high level employees" are, to repeat, "not eligible to join, assist or form any labor organization" at all. Amanagerial employee is defined as "one who is vested with powers or prerogatives to lay down andexecute, management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign ordiscipline employees

The petitioners appear to be correct in their view of the disappearance from the law of the prohibition onsupervisors being members of labor organizations composed of employees under their supervision. TheLabor Code (PD 442) allowed supervisors (if not managerial) to join rank-and-file unions. And under theImplementing Rules of RA 6715, supervisors who were members of existing labor organizations on theeffectivity of said RA 6715 were explicitly authorized to "remain therein."

The decisive consideration is that at present, supervisors who were already members of a rank-and-filelabor organization at the time of the effectivity of R.A. No. 6715, are authorized to "remain therein." Itseems plain, in other words, that the maintenance by supervisors of membership in a rank-and-file labororganization even after the enactment of a statute imposing a prohibition on such membership, is not onlynot a crime, but is explicitly allowed, under present law.

ACQUITTED

2. PHILIPPINE NATIONAL COMPANY ENERGY DEVT CORP. VS LEGARDA

FACTS:

Petitioner PNOC-EDC is a subsidiary of the Phil. National Oil Company. It filed with the Ministry of Laborand Employment (MOLE) a clearance application to dismiss the services or private respondent

VicentaEllelina, contractual employee on the ground of her alleged commission of crime (Alarm and PublicScandal) during the Christmas party at the premises of the petitioner, when the raffle committee refused tofive him the prize corresponding his lost winning ticket, he tried to grab the armalite rifle of the PC Officeroutside the building despite the warning shots fired by the latter.

Petitioner was ordered by MOLE to reinstate Ellelina. Petitioner then questioned the jurisdiction of MOLEover it on the ground that it is a government owned or controlled corporation. On the other hand, publicrespondent contends that while petitioner is a subsidiary of PNOC, it is still covered by the Labor Code andtherefore within the jurisdiction of MOLE was it was organized under the Corporation Law and registeredwith the SEC and that petitioner is estopped from questioning the Labor Depts jurisdiction as it subjecteditself to latter when it filed the application to terminate Ellelinas services.

ISSUE: Whether or not petitioner is governed by the Labor Code

HELD:

YES. Under the present Constitution, Sec. 2(1) Art. IX- B, The Civil Service embraces all branchessubdivisions instrumentalities and agencies of the the Government, including government owned orcontrolled corporations with original charter.

Thus, under the present law, the test in determining whether a GOCC is subject to the Civil Service Law isthe manner of its creation such that government corporations created by special charter are subject toprovisions while those incorporated under the Corporation are NOT within its coverage.

PNOC-EDC having been incorporated under the general Corporation Law, is a GOCC whose employeesare subject to the provisions of the Labor Code.

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3. NWSA VS. NWSA CONSOLIDATED UNIONS

FACTS:

Petitioner National Waterworks & Sewerage Authority is a government-owned and controlled corporationcreated under Republic Act No. 1383, while respondent NWSA Consolidated Unions are various labororganizations composed of laborers and employees of the NAWASA. The other respondents areintervenors Jesus Centeno, et al., hereinafter referred to as intervenors.

The Court of Industrial Relations (now NLRC) conducted a hearing on the controversy then existingbetween petitioner and respondent unions specifically the implementation of the 40-Hour Week Law(Republic Act No. 1880) Respondent intervenors filed a petition in intervention on the issue of additionalcompensation for night work.

The court ruled that The NAWASA is an agency not performing governmental functions and, therefore, isliable to pay additional compensation for work on Sundays and legal holidays conformably toCommonwealth Act No. 444, known as the Eight-Hour Labor Law, even if said days should be within thestaggered five-work days authorized by the President; the intervenors do not fall within the category ofmanagerial employees as contemplated in Republic Act 2377 and so are not exempt from the coverage ofthe Eight- Hour Labor Law

ISSUE: Whether the intervenors are managerial employees within the meaning of Republ ic Act 2377 and,therefore, not entitled to the benefits of Commonwealth Act No. 444, as amended;

HELD:

NO.

Section 2 of Republic Act 2377 provides.Sec. 2.This Act shall apply to all persons employed in any industry or occupation, whether public orprivate, with the exception of farm laborers, laborers who prefer to be paid on piece work basis, managerialemployees outside sales personnel, domestic servants persons in the personal service of another and

members of the family of the employer working for him.The term managerial employee in this Act shall mean either (a) any person whose primary duty consistsof the management of the establishment in which he is employed or of a customarily recognizeddepartment or subdivision thereof, or (b) any o fficer or member of the managerial staff.

One of the distinguishing characteristics by which a managerial employee may be known as expressed inthe explanatory note of Republic Act No. 2377 is that he is not subject to the rigid observance of regularoffice hours. The true worth of his service does not depend so much on the time he spends in office butmore on the results he accomplishes. In fact, he is free to go out of office anytime.

NON-MANAGERIAL EMPLOYEES COVERED BY COMMONWEALTH ACT NO. 444. Employees whohave little freedom of action and whose main function is merely to carry out the companys orders, plansand policies, are not managerial employees and hence are covered by Commonwealth Act No. 444.

The philosophy behind the exemption of managerial employees from the 8-Hour Labor Law is that suchworkers are not usually employed for every hour of work but their compensation is determined consideringtheir special training, experience or knowledge which requires the exercise of discretion and independent

judgment, or perform work related to management policies or general business operations alongspecialized or technical lines. For these workers it is not feasible to provide a fixed hourly rate of pay ormaximum hours of labor.

The intervenors herein are holding position of responsibility. One of them is the Secretary of the Board ofDirectors. Another is the private secretary of the general manager. Another is a public relations officer, andmany chiefs of divisions or sections and others are supervisors and overseers. Respondent court, however,after examining carefully their respective functions, duties and responsibilities found that their primaryduties do not bear any direct relation with the management of the NAWASA, nor do they participate in theformulation of its policies nor in the hiring and firing of its employees. The chiefs of divisions and sections

are given ready policies to execute and standard practices to observe for their execution. Hence, itconcludes, they have little freedom of action, as their main function is merely to carry out the companysorders, plans and policies.

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4.SAN MIGUEL BREWERY VS. DEMOCRATIC LABOR ORG.

FACTS:

The workers are employed by San Miguel Brewery and are members of Democratic Labor Organization. After the morning roll call, the employees leave the plant of the company to go on their respective salesroutes either at 7:00 a.m. for soft drinks trucks, or 8:00 a.m. for beer trucks. They do not have a daily timerecord. The company never require them to start their work as outside sales personnel earlier than theabove schedule.

The Democratic Labor Association filed a complaint against San Miguel Brewery demanding for overtime,night shift differential pay and additional compensation for work done during Sundays and holidays. This isdenied by San Miguel on the ground that since the employees concerned are paid a commission on thesales they make outside of the required 8 hours besides the fixed salary that is paid to them, they are notentitled to overtime pay as for the reason that the commission they are paid already takes the place of suchovertime compensation. The company contends, that the employees can be likened to an employee who ispaid on piece-work, "pakiao", or commission basis, which is expressly excluded from the operation of theEight-Hour Labor Law

Judge Bautista who presided before the CIR:1. With regard to overtime compensation, Judge Bautista held that the provisions of the Eight-HourLabor Law apply to the employees concerned for those working in the field or engaged in the saleof the company's products outside its premises and consequently they should be paid the extracompensation.

2. As to employees who work at night, Judge Bautista decreed that they be paid theircorresponding salary differentials for work done at night prior to January 1, 1949 with the presentqualification: 25% on the basis of their salary to those who work from 6:00 to 12:00 p.m., and 75%to those who work from 12:01 to 6:00 in the morning.

3. With regard to work done during Sundays and holidays, Judge Bautista also decreed that the

employees concerned be paid an additional compensation of 25% as provided for inCommonwealth Act No. 444 even if they had been paid a compensation on monthly salary basis.

ISSUE: Whether or not the field or outside employees are entitled to the benefits of the Eight Hour LaborLaw

HELD:

No. Eight-Hour Labor Law only has application where an employee or laborer is paid on a monthly or dailybasis, or is paid a monthly or daily compensation, in which case, if he is made to work beyond the requisiteperiod of 8 hours, he should be paid the additional compensation prescribed by law. This law has noapplication when the employee or laborer is paid on a piece-work, "pakiao", or commission basis,

regardless of the time employed. The philosophy behind this exemption is that his earnings in the form ofcommission based on the gross receipts of the day. His participation depends upon his industry so that themore hours he employs in the work the greater are his gross returns and the higher his commission.

He works away from his employer's place of business, is not subject to the personal supervision of hisemployer, and his employer has no way of knowing the number of hours he works per day

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Case 5 Apex Mining Company v. NLRCFACTS:

- Sinclitica Candido was employed by Apex Mining to perform laundry services at its staffhouse.

- In the beginning, she was paid on a piece rate basis then on a monthly basis.- On December 18, 1987, while she was attending to her assigned task, she accidentally slipped

and hit her back on a stone.- She was permitted to go on leave for medication.- Mila de la Rosa, the supervisor, offered P5,000 to Sinclitica in order to persuade the latter to

quit her job. However, Sinclitica refused the offer and preferred to work.- Sinclitica Candido was dismissed on February 4, 1988.

Issue: Whether or not the househelper in the staff house of an industrial company a domestic helperor a regular employee

Held: REGULAR EMPLOYEE.

Under Rule XIII, Section 1(b), Book 3 of the Labor Code: The term househelper as used herein is synonymous to the term domestic servant andshall refer to any person, whether male or female, who renders services in and about theemployers home and which services are usually necessary or desirable for the maintenanceand enjoyment thereof, and ministers exclusively to the personal comfort and enjoyment ofthe employers family

The foregoing definition clearly contemplates such househelper or domestic servant who isemployed in the employers home to minister exclusively to the personal comfort and enjoym ent ofthe employers family.

The criteria is the personal comfort and enjoyment of the family of the employer in the home of saidemployer.

While it may be true that the nature of the work of a househelper, domestic servant orlaundrywoman in a home or in a company staffhouse may be similar in nature, the difference in theircircumstances is that in the former instance they are actually serving the family while in the lattercase, service is being rendered in the staffhouse or within the premises of the business of theemployer. In such instance, THEY ARE EMPLOYEES OF THE COMPANY OR EMPLOYER IN THEBUSINESS CONCERNED.

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Case 6 Tan v. Lagrama

FACTS:- Rolando Tan is the president of Supreme Theater Corp and the general magnager of Corwn

and Empire Theaters in Butuan City.- Leovigildo Lagrama is a painter, making ad billboards and murals for the motion pictures

shown at the Empress, Supreme, and Crown theaters for 10 years.- On October 17, 1998, Lagrama was scolded by Tan alleging that the former had urinated in

his workplace.- Lagrama denied the allegations and claimed that he was not the only one who entered the

drawing area.- Tan dismissed Lagrama.- Lagrama filed a complaint before the NLRC.- Lagrama was paid on a fixed piece work basis, i.e., that he was paid for every painting

turned as ad billboard or mural for the pictures shown in three theaters, on the basis of nomural/billboard drawn, no pay policy.

Issue: Whether or not an employer-employee relationship existed between petitioner and privaterespondent.

Held: YES. In determining whether there is an employer-employee relationship, the four-fold testmust be applied, to wit: (1) The power of selection and engagement of employees; (2) The control ofthe employee with respect to the means and methods by which work is to be accomplished; (3) Thepower to dismiss; and (4) The payment of wages.

Of the four, the control test is the most important. Compared to an employee, an independentcontractor is one who carries on a distinct and independent business and undertakes to perform thejob, work, or service on its own account and under its own responsibility according to its ownmanner and method, free from the control and direction of the principal in all matters connectedwith the performance of the work.

In the case, Tan claims that Lagrama was an independent contractor and never his employeeHOWEVER, evidence shows that the Lagrama performed his work as painter UNDER THESUPERVISION AND CONTROL OF TAN. Lagrama worked in a designated work area inside the Crowntheater of petitioner, for the use of which petitioner prescribed rules. The rules included theobservance of cleanliness and hygiene and a prohibition against unirating in the work area and anyplace other than the toiler or restroom. Therefore, there exist an employer-employee relationshipbetween Tan and Lagrama.

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Case 7 Rada v. NLRCFACTS:

- Hilario Radas initial employment with Philnor Consultants and planners, inc. was under aContract of Employment for a Definite Period. He was hired as Driver for the constructionsupervision phase of the Manila North Expressway Extension for a term of about 24 monthseffective July 1, 1977

- Rada s employment expired on June 30, 1979.- At the time the first contract of employment expired, respondent was in need of driver.- Rada was offered the position of driver. The second contract of employment for a definite

period was for 10 months. (July 1, 1979 to April 30, 1980)- The second contract expired. Radas contract was renewed for a period of 19 months, from

May 1, 1980 to November 30, 1981.- The third contract was extended for a number of times, the last extension being for the period

of October 1, 1985 to December 31, 1985.- Sometime in the second week of December 1985,Rada applied for Personal Clearance and

acknowledged having received the amount of P 3,796.20 representing conversion to cash of

unused leave credits and financial assistance. Rada aloes released the company from allobligations in a Release, Waiver, and Quitclaim.

- Rada later sued Philnor for non payment of separation pay and overtime pay. He said he isentitled to be paid OT pay because he uses extra time to get to the project site from his homeand from the project site to his home everyday in total, he spends an average of 3 hours OTevery day.

Issue: Whether or not Rada is entitled to Separation and Overtime payHeld: Separation pay NO. Overtime pay Yes.

Separation Pay The SC ruled that Rada was a project employee whose work was coterminous with the project forwhich he was hired. Project employees, as distinguished from regular or non-project employees, arementioned in Section 281 of the Labor Code as those where the emplo yment has been fixed for aspecific project or undertaking the completion or termination of which has been determined at thetime of the engagement of the employee.Project employees are not entitled to termination pay if they are terminated as a result o f thecompletion of the project or any phase thereof in which they are employed, regardless of the numberof projects in which they have been employed by a particular construction company. Moreover, thecompany is not required to obtain clearance from the Secretary of Labor in connection with suchtermination.

OT Pay Rada is entitled to OT pay. The fact that he picks up employees of Philnor at certain specified pointsalong EDSA in going to the project site and drops them off at the same points on his way back fromthe field office going home to Marikina, Metro Manila is not merely incidental to Radas job as adriver. On the contrary, said transportation arrangement had been adopted, not so much for theconvenience of the employees, but primarily for the benefit of Philnor. As embodied in Philnorsmemorandum, they allowed their drivers to bring home their transport vehicles in order for them toprovide a timely transport service and to avoid delay not really so that the drivers could enjoy thebenefits of the company vehicles nor for them to save on fair.

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Case 8 Philippine Airlines v. NLRCFACTS:

- Dr. Herminio A. Fabros was employed as a flight surgeon. He was assigned at the PAL MedicalClinic at Nichols and was on duty from 4:00 in the afternoon until 12:00 midnight.

- On February 17, 1994, at around 7:00 in the evening, Dr. Fabros left the clinic to have dinnerat his residence, which was about five-minute drive away.

- A few minutes later, the clinic received an emergency call from the PAL Cargo Services. One ofits employees, Mr. Manuel Acosta, had suffered a heart attack.

- The patient arrived at the clinic at 7:50 and Mr. Eusebio immediately rushed him to thehospital.

- When Dr. Fabros reached the clinic at 7:51, Mr. Eusebio had already left with the patient.- Upon learning about the incident, the Medical Director of the PAL ordered an investigation. In

his explanation, Dr. Fabros asserted that he was entitled to thirty-minute meal break and thathe immediately left his residence upon being informed about the emergency.

- PAL found that Dr. Fabros abandoned his post on February 17, 1994.- Dr. Fabros was suspended for three months effective December 16, 1994.- Dr. Fabros filed a complaint for illegal suspension against PAL.

Issue: Whether or not there was abandonment of post on the part of Dr. Fabros

Held: NO.The facts depict that Dr. Fabros did not abandon his post. He left the clinic to eat dinnerat his house. Further, the nurse on duty knew the whereabouts of Dr. Fabros so that hecould be contacted easily. Furthermore, he immediately left his home knowing about theemergency.

PAL contends that Dr. Fabros is obliged to stay at the company premises for not less than8 hours. Thus, he may not leave even if he has to take his meal.

Under article 83 of the labor code, health personnel x x x shall hold regular office hoursfor eight hours a day, for five days a week, EXCLUSIVE OF TIME FOR MEALS x x x

Article 85. Meal periods. X X X it shall be the duty of every employer to give hisemployees NOT LESS THAN SIXTY MINUTES time-off for their regular meals.

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 thecompany premises. Employees are not prohibited from going out of the premises as longas they return to their posts on time. The act of Dr. Fabros of going home does notconstitute abandonment.

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Case 9 National Development Company v. Court of Industrial RelationsFACTS:

- At the National Development Co., a government-owned and controlled corporation, therewere four shifts of work.

- From 8am to 4pm; From 6am to 2pm; From 2pm to 10pm; From 10pm to 6am.- In each shift, there was a one-hour mealtime period.- In 1953, whenever workers in one shift were required to continue working until the next

shift, petitioner, instead of crediting them with eight hours of overtime work, has been payingthem for six hours only, claiming that the two hours corresponding to the mealtime periodsshould not be included in computing compensation.

- The workers asked the Court of Industrial Relations to order payment of additional overtimepay corresponding to the mealtime periods.

Issue: Whether or not the workers are entitled to the payment corresponding to themealtime periods.

HELD: Yes.Under section 1, Com. Act no. 444, When the work is not continuous, the tim e during whichthe laborer is not working and can leave his working place and can rest completely shall notbe counted

In the case, while it may be correct to say that it is well-high impossible for an employee towork while he is eating, yet under Section 1 of Com. Act No. 444 such a time for eating canonly be segregated or deducted from his work, if the same is not continuous and theemployee can leave his working place and rest completely.

The time cards show that the work was continuous and without interruption.is also evidence that the employees cannot freely leave their working paces nor restcompletely.

Therefore, the workers are entitled to the payment corresponding to the mealtime periods.

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2. G.R. No. L-9831 October 30, 1957

ISAAC PERAL BOWLING ALLEY, petitioner,vs. UNITED EMPLOYEES WELFARE ASSOCIATION and THE COURT OF INDUSTRIALRELATIONS, respondents.

FACTS:

On October 6, 1952, the United Employees Welfare Association, a legitimate labor union,presented a petition before the Department of Labor on behalf of the 36 pinboys of the IsaacPeral Bowling Alley, allegedly affiliated with the said union. The petition (Case No. 754 of theDepartment of Labor) made specific demands from the company among which were theconversion of their (pinboys') wages from hourly to daily basis; vacation and sick leaves; medicaland hospital bills; payment of their wages during a strike if such strike had to be declared due tothe refusal of the company to consider their demands; and that the United Employees Welfare

Association be recognized as the sole bargaining agency.

The company filed its answer denying the material averments of the petition and contended thatin view of the nature of the business of the company, the payment of the wages of its pinboyscannot be converted from the hourly to daily basis; that said pinboys were receiving wages inaccordance with law and were being paid additional compensation was actually shoulderingmedical and hospitals bills of those injured or who become ill in line of duty; that the pinboys were

just casual workers and not permanently employed by the company; that the Union cannot berecognized as the sole bargaining agency because aside form the fact that the pinboys were notthe only ones working in that establishment, the company had no confidence in said union. Itwas, therefore prayed that the petition be dismissed with costs against therein petitioner.

ISSUE 1. whether those working in the night shift are entitled to 25 per cent additional compensation;and.

2. whether the Court was right in awarding vacation and sick leave to the said 36 pinboys.

HELD:

1. the grant of additional compensation to those working at night has been recognized by thisCourt as a valid exercise of the general powers of the Court of Industrial Relations and may beallowed for "hygienic, medical, moral, cultural, and sociological reasons" (Shell Co. of the Phil.Islands, Ltd. vs. National Labor Union,2 G. R. No. L-1309, July 26, 1948), and We find no reasonwhy the lower cannot apply the same measure to be workers involvqed herein considering thatirrespective of the nature of their jobs, those working at night suffer a continued general loss ofenergies and are deprived of the same comfort. The ruling of the court a quo on his matter shouldbe, therefrom, affirmed.

2. In view of the absence of express legislation granting employees of private firms orestablishments the benefits of vacation and sick leaves with pay, said employees are not assuredof such privileges, which are proper subject matters for collective bargaining between employersand employees. Although strictly speaking, therefore, there is no ground for the granting of saidprivileges, the Court of Industrial Relations in the exercise of its broad powers under

Commonwealth Act No. 103 had on several occasions dealt with and granted claims for thesebenefits. With the enactment of Republic Act No. 875 and the abolition of the Court's general jurisdiction over labor disputes, this power seems to have been curtailed. It is believed, however,that whenever the Court of Industrial Relations may exercise its powers of compulsory

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arbitrations when a case is certified to it by the President of the Philippines, being againpossessed a general powers, said Court may still grant these benefits. (See authorities cited inFrancisco's Labor Laws, Vol. II, 3rd ed. p. 508 et seq).

In the case at bar, We cannot ignore the fact that the claim was passed upon by the lower Courtwhen it was still possessed of its broad powers and could have validly granted the same, as itdid. But it also appears that the Court a quo was aware of the financial condition of the companyas "not very sound due to losses reported during the years 1952 and 1953 although it had a littleprofit in 1951" (p. 6 Decision), and considering that the ability of the employer to make payment ofthese privileges must also be reckoned with, it is but just that this demand (sick and vacationleaves with pay) be denied, at least for the time being. Anyway, this could be made the subject ofa future agreement between workers and the management.

Wherefore, the decision appealed from is modified in so far as it grants the 36 pinboysrepresented by respondent United Employees Welfare Association sick and vacation leaves, amatter which is left to further bargaining agreement between the parties, and with regard to thepayment of the hours of overtime allegedly earned by said pinboys of the hours which shall bedetermined in the proper incident in the Lower Court after this decision becomes final, subject to

the doctrine on the point laid down by this Court in the case of Luzon Stevedoring Co., Inc. vs.Luzon Marine Department Union (101 Phil., 257). Without pronouncement as to costs. It is soordered.

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G.R. No. 78210

TEOFILO ARICA, DANILO BERNABE, MELQUIADES DOHINO, ABONDIO OMERTA, GILTANGIHAN, SAMUEL LABAJO, NESTOR NORBE, RODOLFO CONCEPCION, RICARDORICHA, RODOLFO NENO, ALBERTO BALATRO, BENJAMIN JUMAMOY, FERMIN DAAROL,JOVENAL ENRIQUEZ, OSCAR BASAL, RAMON ACENA, JAIME BUGTAY, and 561 OTHERS,HEREIN REPRESENTED BY KORONADO B. APUZEN, petitioners,

Vs.

NATIONAL LABOR RELATIONS COMMISSION, HONORABLE FRANKLIN DRILON,HONORABLE CONRADO B. MAGLAYA, HONORABLE ROSARIO B. ENCARNACION, andSTANDARD (PHILIPPINES) FRUIT CORPORATION, respondents.,

Labor Standards Hours of Work Assembly Time

FACTS:

Teofilo Arica et al and 561 others sued Standard Fruits Corporation (STANFILCO) Philippines forallegedly not paying the workers for their assembly time which takes place every work day from5:30am to 6am. The assembly time consists of the roll call of the workers; their getting ofassignments from the foreman; their filling out of the Laborer s Daily Accomplishment Report;their getting of tools and equipments from the stockroom; and their going to the field to work. Theworkers alleged that this is necessarily and primarily for STANFILCO s benefit.

ISSUE: Whether or not the worker s assembly time should be paid.

HELD: No. The thirty minute assembly time long practiced and institutionalized by mutual consentof the parties under Article IV, Section 3, of the Collective Bargaining Agreement cannot beconsidered as waiting time within the purview of Section 5, Rule I, Book III of the Rules andRegulations Implementing the Labor Code . . . Furthermore, the thirty (30)-minute assembly is a deeply-rooted, routinary practice of theemployees, and the proceedings attendant thereto are not infected with complexities as todeprive the workers the time to attend to other personal pursuits. In short, they are not subject tothe 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.

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G.R. No. L-23458, National Shipyards and Steel Corporation v. National Shipyards Employeesand Workers Asso. and CIR, 18 SCRA 946

FACTS:

Following are the grievances lodged in the Court of Industrial Relations (herein referred to asCIR)1 by respondent union against petitioner, Bay View Hotel, Inc., on September 27, 1962, viz:

"3. That the respondent [petitioner herein], in violation of Commonwealth Act No. 444, betterknown as the Eight-Hour Labor Law, has not been paying full overtime compensation to theemployees who have worked and have been working for more than eight hours a day due to theexigency of the service and those also who have worked and have been working on Sundays andlegal holidays;

4. That the respondent, in violation of Sec. 10, letters (f) and (g), of Republic Act No. 602, betterknown as the Minimum Wage Law, has been deducting the amount of P2.00 from each employeeevery month allegedly for medical fees thus reducing the salaries of the employees without theconsent of the employees concerned;

5. That the respondent has not also been paying or has not been refunding in full to theemployees concerned the collection from the customers of the Manila Hotel of the extra "servicecharge" in lieu of "tips" to the waiters or roomboys and which therefore are supposed to be paidto said employees but respondent has not been able to pay or refund in full said collection to theemployees concerned;

6. That the respondent has not been complying with the grant of vacation leave of three (3) daysa year in accordance with the Collective Bargaining Contract between the respondent and theHotel Employees Union, another union in the respondent premises which is the collectivebargaining agency in the Collective Bargaining Contract with the respondent;

7. That the respondent has been dismissing many of the members of the petitioner union sincethe organization and registration of the petitioner herein with the Department of Labor on May 31,1962 beginning with the dismissal of the Treasurer Ramiro Zamora, and Manuel Braga, boardmember, on the same date and thereafter, has dismissed and has been dismissing from theservice its employees who are members of the petitioner union without just cause or for unionactivities up to this date, numbering 65 employees in all, 41 of whom were refused admission byan illegal lock-out in the Laundry Department of the respondent on August 26, 1962, and [of] theBamboo Room on September 10, 1962, whose names and dates of dismissal are herewithattached as Annex "A" and made a part of this petition;

ISSUE:

whether or not Cir has jurisdiction?

Held:

The jurisdiction of the Court of Industrial Relations, under the law and the jurisprudence, extendsonly to cases involving (a) labor disputes affecting an industry which is indispensable to thenational interest and so certified by the President to the Court, Section 10, Republic Act No. 875;(b) controversy about the minimum wage under the Minimum Wage Law, Republic Act No. 602;(c) hours of employment under the Eight-Hour Labor Law, Commonwealth Act No. 444; and (d)unfair labor practice. Section 5(a), Republic Act No. 875. PAFLU vs. Tan, 52 O.G. 5836. . . . And

such disputes and controversies, in order that they may fall under the jurisdiction of the Court ofIndustrial Relations, must arise while the employer-employee relationship between the partiesexists, or the employee seeks reinstatement. When such relationship is over and the employee

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does not seek reinstatement, all claims become money claims that fall under the jurisdiction ofthe regular courts.

The industrial court has jurisdiction over the main causes of action with respect to minimumwage, overtime compensation and unfair labor practice. Which places the complaint herein in itsentirety, including the two, within the jurisdiction of the industrial court. Because, all of said claimsarose out of the same employment.

We find reinforcement of this view in PRISCO, supra, where express pronouncement was madethat as long as the employer-employee relationship exists or is sought to be re-established, theindustrial court "has jurisdiction over all claims arising out of, or in connection with,employment."11

We are unprepared to break away from the teaching in the cases just adverted to. To draw atenuous jurisdictional line is to undermine stability in labor litigations. A piecemeal resort to onecourt and another gives rise to multiplicity of suits. To force the employees to shuttle from onecourt to another to secure full redress is a situation gravely prejudicial. The time to be lost, effort

wasted, anxiety augmented, additional expense incurred - these are considerations which weighheavily against split jurisdiction. Indeed, it is more in keeping with orderly administration of justicethat all the causes of action here "be cognizable and heard by only one court: the Court ofIndustrial Relations."

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13) CALTEX REGULAR EMPLOYEES v CALTEX and NLRCG.R. No. 111359August 15, 1995

FACTSPetitioner Union and Caltex entered into a Collective Bargaining Agreement. The CBA included this

provisionthe regular work week shall consist of eight (8) hours per day,

seven (7) days, Monday through Sunday, during which regular rates of payshall be paid in accordance with Annex B and work on the employee's one"Day of Rest ," shall be considered a special work day, during which "Day ofRest " rates of pay shall be paid as provided in Annex B . Daily workingschedules shall be established by management in accordance with therequirements of efficient operations on the basis of eight (8) hours per dayfor any five (5) days . Provided , however employees required to work inexcess of forty (40) hours in any week shall be compensated in accordancewith Annex B of this Agreement.

The Annex B of the agreement includes the computations of the overtime pay, nightshiftdifferential, day off pay, holiday premium pay, Sunday premium pay.

Sometime in August 1986, the union called the attention of Caltex for the latters alleged violationsof Annex B (non payment of ot, nsd, etc). The industrial relations manager of Caltex informed the union thatthe differential would be timely implemented. However, no differential payment was made for the workperformed on the first 2.5 hours on a Saturday.

The union filed a case against Caltex for unfair labor practice. Petitioner charged Caltex forshortchanging its employees by paying the work performed on the first 2.5 hours of Saturday (rest day dawnila) at regular rates when it should be paying at rest day rates. Caltex denied the charge and said thatSunday was their rest day and not Saturday.

Labor Arbiter Guanio ruled in favor of the union and ruled that according to the CBA the employeesare given 2 rest days (sat and sun). On appeal by Caltex, the NLRC set aside the decision of the laborarbiter. NLRC concluded that under the CBA, there is only 1 rest day (Sunday).

ISSUEWhether the CBA provides 2 rest days (sat and sun) and therefore the first 2.5 hours of Saturday

be based on rest day rates.

HELD:We agree with the NLRC that the intention of the parties to the 1985 CBA was to provide the

employees with only one (1) day of rest. The plain and ordinary meaning of the language of Article III is thatCaltex and the Union had agreed to pay "day of rest" rates for work performed on "an employee's one dayof rest". To the Court's mind, the use of the word "one" describing the phrase "day of rest [of an employee]"

emphasizes the fact that the parties had agreed that only a single day of rest shall be scheduled and shallbe provided to the employee.

In the present case, under the 1985 CBA, hours worked on a Saturday do not, by that fact alone ,necessarily constitute overtime work compensable at premium rates of pay, contrary to petitioner'sassertion. These are normal or regular work hours, compensable at regular rates of pay, as provided in the1985 CBA; under that CBA, Saturday is not a rest day or a "day off". It is only when an employee has beenrequired on a Saturday to render work in excess of the forty (40) hours which constitute the regular workweek that such employee may be considered as performing overtime work on that Saturday. We considerthat the statutory prohibition against offsetting undertime one day with overtime another day has noapplication in the case at bar.

In recapitulation, the parties' 1985 CBA stipulated that employees at the Manila Office, as well as

those similarly situated at the Legazpi and Marinduque Bulk Depots, shall be provided only one (1) day ofrest; Sunday, and not Saturday, was designated as this day of rest. Work performed on a Saturday isaccordingly to be paid at regular rates of pay, as a rule, unless the employee shall have been required torender work in excess of forty (40) hours in a calendar week. The employee must, however, have in fact

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rendered work in excess of forty (40) hours before hours subsequently worked become payable at premiumrates. We conclude that the NLRC correctly set aside the palpable error committed by Labor ArbiterGuanio, when the latter imposed upon one of the parties to the 1985 CBA, an obligation which it had neverassumed.

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14) PNB V PNB EMPLOYEES ASSOCIATION 115 SCRA 507 July 30, 1982

FACTS- PNB and PNB Employees Association (PEMA) had a dispute regarding the proper computation ofovertime pay. PEMA wanted the cost of living allowance (granted in 1958) and longevity pay (granted in1961) to be included in the computation. PNB disagreed and the 2 parties later went before the CIR toresolve the dispute.- CIR decided in favor of PEMA and held that PNB should compute the overtime pay of its employees onthe basis of the sum total of the employees b asic salary or wage plus cost of living allowance and longevitypay. The CIR relied on the ruling in NAWASA v NAWASA Consolidated Unions, which held that forpurposes of computing overtime compensation, regular wage includes all payments which the parties haveagreed shall be received during the work week, including differentiated payments for working atundesirable times, such as at night and the board and lodging customarily furnished the employee. Thisprompted PNB to appeal, hence this case.

ISSUE

WON the cost of living allowance and longevity pay should be included in the computation of overtime pay

as held by the CIRHELDNO.

Ratio Overtime pay is for extra effort beyond that contemplated in the employment contract; additional

pay given for any other purpose cannot be included in the basis for the computation of overtime pay.

Absent a specific provision in the CBA, the bases for the computation of overtime pay are 2computations, namely:

1. WON the additional pay is for extra work done or service rendered

2. WON the same is intended to be permanent and regular, not contingent nor temporary as a given only toremedy a situation which can change any time.

ReasoningLongevity pay cannot be included in the computation of overtime pay for the very simple reason

that the contrary is expressly stipulated in the CBA, which constitutes the law between the parties.

As regards cost of living allowance, there is nothing in Commonwealth Act 444 [or the 8 -hourLabor Law, now Art. 87 Labor Code] that could justify PEMAs posture that it should be added to theregular wage in computing overtime pay. C.A. 444 prescribes that overtime work shall be paid at the samerate as their regular wages or salary, plus at least 25% additional. The law did not define what is a regularwage or salary. What the law emphasized is that in addition to regular wage, there must be paid anadditional 25% of that regular wage to constitute overtime rate of pay. Parties were thus allowed to agree

on what shall be mutually considered regular pay from or upon which a 25% premium shall be based andadded to makeup overtime compensation.

No rule of universal application to other cases may be justifiably extracted from the NAWASA case.CIR relies on the part of the NAWASA decision where the SC cited American decisions whose legislationon overtime is at variance with the law in this jurisdiction. The US legislation considers work in excess offorty hours a week as overtime; whereas, what is generally considered overtime in the Philippines is workin excess of the regular 8 hours a day. It is understandably material to refer to precedents in the US forpurposes of computing weekly wages under a 40-hour week rule, since the particular issue involved inNAWASA is the conversion of prior weekly regular earnings into daily rates without allowing diminution oraddition.

To apply the NAWASA computation would require a different formula for each and every

employee. It would require reference to and continued use of individual earnings in the past, thusmultiplying the administrative difficulties of the Company. It would be cumbersome and tedious a process tocompute overtime pay and this may again cause delays in payments, which in turn could lead to seriousdisputes. To apply this mode of computation would retard and stifle the growth of unions themselves as

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Companies would be irresistibly drawn into denying, new and additional fringe benefits, if not those alreadyexisting, for fear of bloating their overhead expenses through overtime which, by reason of being unfixed,becomes instead a veritable source of irritant in labor relations.

**Overtime Pay Rationale Why is a laborer or employee who works beyond the regular hours of workentitled to extra compensation called, in this enlightened time, overtime pay?Verily, there can be no other reason than that he is made to work longer than what is commensurate withhis agreed compensation for the statutorily fixed or voluntarily agreed hours of labor he is supposed to do.When he thus spends additional time to his work, the effect upon him is multi- faceted; he puts in moreeffort, physical and/or mental; he is delayed in going home to his family to enjoy the comforts thereof; hemight have no time for relaxation, amusement or sports; he might miss important pre-arrangedengagements; etc. It is thus the additional work, labor or service employed and the adverse effects justmentioned of his longer stay in his place of work that justify and are the real reasons for the extracompensation that is called overtime pay.

**Overtime Pay Definition The additional pay for service or work rendered or performed in excess of 8hours a day by employees or laborers in employment covered by the 8 hour Labor Law [C.A. 444, now Art.87 Labor Code] and not exempt from its requirements. It is computed by multiplying the overtime hourlyrate by the number of hours worked in excess of eight.

Disposition decision appealed from is REVERSED

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15) ENGINEERING EQUIPMENT, INC. v MINISTER OF LABORG.R. No. L-64967September 23, 1985

FACTSMiguel Aspera, private respondent, was a mechanical engineer who worked for the petitioner in

Saudi Arabia for nearly a year. His contract of employment provides

1. Work Schedule/Assignment. ... Your workdays shall be on a six-day workweek basis, with a working day consisting of ten (10) working hours. Youmay be required to work overtime in excess of ten (10) hours each workday and to work on your restdays and on Saudi Arabian legal holidays.

2. A monthly salary of P750.00 plus overtime pay for work rendered duringrestdays/holidays and/or in excess of ten (10) hours during regular workingdays.

Aspera worked 10 hours daily for 335 days. He claims that his monthly salary should correspond toeight hours of daily work and that for the additional two hours daily, he was entitled to overtime pay at$1.2162 per hour or to $814.85 for 670 hours during 335 working days.

NLRC and the Director of Employment Services sustained his claim and declared void thestipulation for the 10-hour working day because it was contrary to the Eight- hour Labor Law. Hence, thispetition.

Petitioner contends that Aspera was a managerial employee hence, he should not be entitled toovertime pay. It also asserts that Aspera was one of several employees who signed written contracts with a"built-in" overtime pay in the ten-hour working day and that their basic monthly pay was adjusted to reflectthe higher amount covering the guaranteed two-hour extra time whether worked or unworked.

Moreover, it argues that the contracts were submitted to BES (Bureau of Employment Services)Director Jonathan M.R.A. de la Cruz, the same director who rendered the questioned decision Heapproved the same. Without his approval, the petitioner would not have stipulated the ten-hour work

schedule and would have provided for a lower basic salary for an eight-hour working day.

ISSUEWhether Aspera is entitled to overtime pay.

HELDWe hold that under the particular circumstances of this case the Acting Minister of Labor and

Director De la Cruz committed a grave abuse of discretion amounting to lack of jurisdiction in awardingovertime pay and in disregarding a contract that De la Cruz himself, who is supposed to know the Eight-Hour Labor Law, had previously sealed with his imprimatur. Because of that approval, the petitioner actedin good faith in enforcing the contract.

Furthermore, Aspera had not denied that he was a managerial employee within the meaning ofSection 82. As such, he was not entitled to overtime pay.

WHEREFORE, the resolution of the Acting Minister of Labor dated November 16, 1981 is reversed and setaside. Aspera's complaint is dismissed. No costs.

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16) DEPARTMENT ADVISORY No. 2, series of 2004HERE IS THE LINKhttp://www.dole11.net/downloads/Department-Advisory-No.02-s2004.pdf

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17) MERCURY DRUG CO., INC., petitioner, vs. NARDO DAYAO, ET AL., respondentsG.R. No. L-30452 September 30, 1982

FACTS:

NardoDayao and 70 others filed a petition in the Court of Industrial Relations against Mercury Drug Co., Inc., and/or Mariano Que,President & General Manager, and Mercury Drug Co., Inc., Employees Association praying, with respect to respondent corporationand its president and general manager: 1) payment of their unpaid back wages for work done on Sundays and legal holidays plus25c/c additional compensation from date of their employment up to June 30, 1962; 2) payment of extra compensation on work done atnight; 3) reinstatement of JanuarioReferente and Oscar Echalar to their former positions with back salaries; and, as against therespondent union, for its disestablishment and the refund of all monies it had collected from petitioners.

CIR rendered its decision that:

1. The claim of the petitioners for payment of back wages corresponding to the first four hours of work rendered on every otherSunday and first four hours on legal holidays should be denied for lack of merit;

2. Respondent Mercury Drug Company, Inc. is hereby ordered to pay the sixty- nine (69) petitioners: (a) An additional sum equivalentto 25% of their respective basic or regular salaries for services rendered on Sundays and legal holidays during the period from March20, 1961 up to June 30, 1962; and (b) Another additional sum or premium equivalent to 25% of their respective basic or regularsalaries for nighttime services rendered from March 20, 1961 up to June 30, 1962; and

3. Petitioners' petition to convert them to monthly employees should be, as it is hereby, denied for lack of merit. Not satisfied with thedecision, the respondents filed a motion for its reconsideration. The motion for reconsideration, was however, denied by the Court en

banc.

ISSUES:

a. Whether or not private respondent is entitled to claims for 25% additional compensation performing work during Sunday andlegal holidays.

b. Whether or not the 25% compensation had already been included in the private respondents monthly salaries.

c. Whether or not the contracts of employment were null and void was not put in issue, hence, the respondent court pursuantto the Rules of Court should have refrained from ruling that such contracts of employment were null and void.

HELD:

The Supreme Court dismissed the petition. On the first issue, based on Sec. 4 CA No. 444, No person, firm or corporation, businessestablishment or place of center of labor shall compel an employee or laborer to work during Sundays and legal holidays unless he ispaid an additional sum of at least twenty-five per centum of his regular remuneration: PROVIDED, HOWEVER, That this prohibitionshall not apply to public utilities performing some public service such as supplying gas, electricity, power, water, or providing means oftransportation or communication. In this case, the petitioner does not fall on exemptions.

On the second issue, their 25% additional compensation for work done on Sundays and Legal Holidays were not included in theirrespective monthly salaries. The petitioner contention was not supported by substantial evidence.

The last issue, the Mercury Drug Co., Inc., maintains a chain of drugstores that are open every day of the week and, for some stores,up to very late at night because of the nature of the pharmaceutical retail business. The respondents knew that they had to workSundays and holidays and at night, not as exceptions to the rule but as part of the regular course of employment. Presented withcontracts setting their compensation on an annual basis with an express waiver of extra compensation for work on Sundays andholidays, the workers did not have much choice.

The private respondents were at a disadvantage insofar as the contractual relationship was concerned. Workers in our country do nothave the luxury or freedom of declining job openings or filing resignations even when some terms and conditions of employment arenot only onerous and inequitous but illegal.

It is precisely because of this situation that the framers of the Constitution embodied the provisions on social justice (Section 6, Article11) and protection to labor (Section 9, Article I I) in the Declaration of Principles and State Policies.

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18) INTERPHIL LABORATORIES EMPLOYEES UNION-FFW, ENRICO GONZALES and MA. THERESAMONTEJO, petitioners, vs. INTERPHIL LABORATORIES, INC., AND HONORABLE LEONARDO A. QUISUMBING,SECRETARY OF LABOR AND EMPLOYMENT, respondents.

FACTS:

Petitioner is the sole and exclusive bargaining agent of the rank-and-file employees of Respondent. They had a CBA.

Prior to the expiration of the CBA, respondent company was approached by the petitioner, through its officers. The Union inquiredabout the stand of the company regarding the duration of the CBA which was set to expire in a few months. Salazar told the unionofficers that the matter could be best discussed during the formal negotiations which would start soon.

All the rank-and-file employees of the company refused to follow their regular two-shift work schedule. The employees stoppedworking and left their workplace without sealing the containers and securing the raw materials they were working on.

To minimize the damage the overtime boycott was causing the company, Salazar immediately asked for a meeting with the unionofficers. In the meeting, Enrico Gonzales, a union director, told Salazar that the employees would only return to their normal workschedule if the company would agree to their demands as to the effectivity and duration of the new CBA. Salazar again told the unionofficers that the matter could be better discussed during the formal renegotiations of the CBA. Since the union was apparentlyunsatisfied with the answer of the company, theovertime boycott continued. In addition, the employees started to engage in a workslowdown campaign during the time they were working, thus substantially delaying the production of the company.

Responden t company filed with the National NLRC a petition to declare illegal petitioner unions overtime boycott and workslowdown which, according to respondent company, amounted to illegal strike. It also filed with Office Secretary of Labor a petitionfor assumption of jurisdiction. Secretary of Labor Nieves Confesor issued an assumption order over the labordispute.

Labor Arbiter Caday submitted his recommendation to the then Secretary of Labor Leonardo A. Quisumbing. Then SecretaryQuisumbing approved and adopted the report in his Order, finding illegal strike on the part of petitioner Union.

ISSUES:

a. WON the Labor Secretary has jurisdiction to rule over an illegal strike.b. WON the respondents have engaged in "overtime boycott" and "work slowdown".c. WON Priv ate Respondents act of extending substantial separation package to almost all involved officers of petitioner

union, during the pendency of the case, as tantamount to condonation, if indeed, there was any misdeed committed.

HELD:

a. On the matter of the authority and jurisdiction of the Secretary of Labor and Employment to rule on the illegal strikecommitted by petitioner union, it cannot be denied that the issues of overtime boycott and work slowdown amounting to

illegal strike before Labor Arbiter Caday are intertwined with the labor dispute before the Labor Secretary.The appellate court also correctly held that the question of the Secretary of Labor and Employments jurisdiction over labor -related disputes was already settled in International Pharmaceutical, Inc. vs. Hon. Secretary of Labor and Associated LaborUnion (ALU) where the Court declared:

In the present case, the Secretary was explicitly granted by Article 263(g) of the Labor Code the authority to assume jurisdiction over a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the nationalinterest, and decide the same accordingly. Necessarily, this authority to assume jurisdiction over the said labor dispute mustinclude and extend to all questions and controversies arising therefrom, including cases over which the labor arbiter hasexclusive jurisdiction.

Moreover, Article 217 of the Labor Code is not without, but contemplates, exceptionsthereto. This is evident from theopening proviso therein read ing (e)xcept as otherwise provided under this Code x xx. Plainly, Article 263(g) of the LaborCode was meant to make both the Secretary (or the various regional directors) and the labor arbiters share jurisdiction,subject to certain conditions. Otherwise, the Secretary would not be able to effectively and efficiently dispose of the primary

dispute. To hold the contrary may even lead to the absurd and undesirable result wherein the Secretary and the laborarbiter concerned may have diametrically opposed r ulings. As we have said, it is fundamental that a statute is to be read ina manner that would breathe life into it, rather than defeat it.

In fine, the issuance of the assailed orders is within the province of the Secretary as authorized by Article 263(g) of theLabor Code and Article 217(a) and (5) of the same Code, taken conjointly and rationally construed to subserve the objectiveof the jurisdiction vested in the Secretary. Petition denied.

b. Yes. Members of the union by their own volition decided not to render overtime services in April 1993. Petitioner union evenadmitted this in its Memorandum, dated 12 April 1999, filed with the Court of Appeals, as well as in the petition before thisCourt, which both stated that "(s)sometime in April 1993, members of herein petitioner, on their own volition and in keepingwith the regular working hours in the Company x xx decided not to render overtime".[21] Such admission confirmed theallegation of respo ndent company that petitioner engaged in overtime boycott and work slowdown which, to use thewords of Labor Arbiter Caday, was taken as a means to coerce respondent company to yield to its unreasonable demands.

More importantly, the overtime boycott or work slowdown by the employees constituted a violation of their CBA, whichprohibits the union or employee, during the existence of the CBA, to stage a strike or engage in slowdown or interruption ofwork.

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c. No. Respondent company correctly postured that at the time these union officers obtained their separation benefits, theywere still considered employees of the company. Hence, the company was merely complying with its legal obligations.Respondent company could have withheld these benefits pending the final resolution of this case. Yet, considering perhapsthe financial hardships experienced by its employees and the economic situation prevailing, respondent company chose tolet its employees avail of their separation benefits. The Court views the gesture of respondent company as an act ofgenerosity for which it should not be punished.

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19) REMERCO GARMENTS MANUFACTURING, petitioner, vs. HON. MINISTER OF LABOR AND EMPLOYMENTand ZENAIDA BUSTAMANTE, LUZ RAYMUNDO and RUTH CORPUZ, respondents.

FACTS:

During the period of their employment with petitioner, Luz Raymundo and Zenaida Bustamante were given three consecutivewarnings for alleged refusal to render overtime work. Finally, they were penalized with one week's suspension.

It appears that Luz Raymundo was required to work on October 15, 1978, a Sunday, despite her request for exemption to work on

that Sunday, her rest day. Her request was disapproved. For failure to report for work despite denial of her request, she was notifiedof her dismissal effective upon expiration of her suspension. Thereafter, petitioner filed a clearance application to dismiss her ongrounds of insubordination. Raymundo opposed said application by filing a complaint for illegal dismissal and for money claims.Withrespect to Zenaida Bustamante, she failed to report for work despite the expiration of her suspension. Petitioner contends that saidfailure constitutes abandonment which it later invoke as ground for clearance application to dismiss her from employment. LikeRaymundo, Zenaida Bustamante opposed the clearance application by filing a complaint for illegal dismissal claiming that her allegedfailure toreport for work was due to illness, as in fact, she was treated by one Dr. Lorenzo Yuson for fever and severe stomachache.Ruth Corpuz was also given a warning for refusal to render overtime work on another date, August 30, 1978. She wassubsequently dismissed on October 4, 1978 for having written a chalk mark on a nylon jacket for export allegedly a violation of Rule26 of petitioner's rules and regulations, which provides: "Employees are strictly prohibited from defacing or writing on walls of thefactory, toilets or any other company property." The clearance application for her dismissal which she also opposed by filing acomplaint for illegal dismissal. The case was submitted for conciliation proceedings, but no settlement was arrived.

Acting Director of National Capital Region, MOLE, issued an order granting petitioner's application for clearance to terminate theemployment of private respondents and dismissing their complaints for lack of merit.Private respondents appealed the order to theNational Labor Relations Commission. Meanwhile, the Acting Director of the National Capital Region, MOLE, elevated the records of

the case to the Labor Appeals and Review Staff, Office of the Minister of Labor.Minister of Labor rendered a decision reversing the appealed order and directed petitioner to reinstate private respondents LuzRaymundo, Zenaida Bustamante and Ruth Corpuz to their former positions without loss of seniority rights and privileges and with fullbackwages.

Petitioner's motion for reconsideration was denied by the Minister of Labor.

A petition for certiorari was filed by Petitioner with the prayer to annul the decision of the Minister of Labor assailed to have beenrendered without and/or lack of jurisdiction, and in lieu thereof, sustain the order of the Acting Director of the National Capital Region,MOLE, granting the clearance application to dismiss Luz Raymundo, Zenaida Bustamante and Ruth Corpuz.

ISSUE:

WON sufficient legal grounds exist under the relevant facts and applicable law to justify the dismissal of private respondents LuzRaymundo and Zenaida Bustamante.

HELD:

SC answers in the negative and affirmed the decision of the Minister of Labor. While it is true that it is the sole prerogative of themanagement to dismiss or lay-off an employee, the exercise of such a prerogative, however, must be made without abuse ofdiscretion, for what is at stake is not only private respondents' positions but also their means of livelihood. Basically, the right of anemployer to dismiss an employee differs from and should not be confused with the manner in which such right is exercised. It mustnot be oppressive and abusive since it affects one's person and property.

In the case of Luz Raymundo, she was charged of insubordination for allegedly refusing to work on a Sunday, which was her rest day.The records show that the day before, she requested exemption from work on that Sunday and she was granted a clearance slipallowing her to be absent on that Sunday by her immediate supervisor (Department Head). She had a valid ground, therefore, not towork on that Sunday, and her failure to report that day cannot be considered as gross insubordination. The disapproval of her requestby top management reasonably creates the impression of a hostile attitude characterizing the efforts of petitioner (Management) ofeasing out with undue haste the services of private respondents. Besides, petitioner has not shown that Luz Raymundo's failure toreport for work on that Sunday constitutes one of the just causes for termination under Article 283 of the New Labor Code.

On the other hand, in the case of Zenaida Bustamante, she allegedly abandoned her employment by failing to report for work after theexpiration of her suspension. Like Luz Raymundo, her one week suspension arose from her failure to report for work on a Sundaywhich as explained in her opposition to the clearance application, was not without reason because on that day, she was ill and in facttreated by Dr. Lorenzo Yuson for fever and severe stomach ache as shown by the medical certificate. On the consequent charge ofabandonment, it must be noted that Zenaida Bustamante filed a complaint for illegal dismissal to oppose the clearance application todismiss her. Of course, it is a recognized principle that abandonment of work by an employee is inconsistent with the immediate filingof a complaint for illegal dismissal. It would be illogical for Zenaida Bustamante to abandon her job and then immediately file an actionseeking her reinstatement. At that time, no employee would recklessly abandon her job knowing fully well the acute unemploymentproblem then existing and the difficulty of looking for a means of livelihood.

The illegality of the dismissal of the herein private respondents, under the facts and circumstances disclosed, becomes even moreapparent in the light of the express provision of the Constitution, requiring the State to assure the workers "security of tenure" and "justand humane conditions of work.The penalty of dismissal from the service, even assuming petitioner's charges to be true, is t oosevere a penalty. It is a penalty out of proportion to the offense committed-failure to report for work on a Sunday - when after all,suspension would suffice.The New Labor Code is clear on this point. It is the duty of every employer, whether operating for profit ornot, to provide each of his employees a rest period of not less than twenty four (24) hours after every six (6) consecutive normal workdays. Even if there really existed an urgency to require work on a rest day, (which is not in the instant case) outright dismissal fromemployment is so severe a consequence, more so when justifiable grounds exist for failure to report for work.

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Petitioner Remerco Garments Manufacturing is hereby ordered to reinstate Luz Raymundo and Zenaida Bustamante to their former orsubstantially equivalent position without loss of seniority rights and privileges with three-year (3) backwages computed from October23, 1978.

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20) PRODUCERS BANK OF THE PHILIPPINES, petitioner, vs. NATIONAL LABOR RELATIONSCOMMISSION and PRODUCERS BANK EMPLOYEES ASSOCIATION, respondents.[G.R. No. 100701. March 28, 2001 ]

FACTS:

Private respondent filed a complaint with the Arbitration Branch, National Capital Region, National Labor Relations Commission(NLRC), charging petitioner with diminution of benefits, non-compliance with Wage Order No. 6 and non-payment of holiday pay. Inaddition, private respondent prayed for damages.Labor Arbiter Nieves V. de Castro found private respondents claims to be

unmeritorious and dismissed its complai nt. In a complete reversal, however, the NLRC granted all of private respondents claims,except for damages.Petitioner filed a Motion for Partial Reconsideration, which was denied by the NLRC. Hence, recourse to SC.

Petitioner contentions with regards t o NLRCs ruling:

1. On the alleged diminution of benefits, the NLRC gravely abused its discretion when (1) it contravened the Supreme Court decisionin Traders Royal Bank v. NLRC, et al., G.R. No. 88168 (2) its ruling is not justified by law and Art. 100 of the Labor Code, (3) its rulingis contrary to the CBA, and (4) the so- called company practice invoked by it has no legal and moral bases.

2. On the alleged non-compliance with Wage Order No. 6, the NLRC again gravely abused its discretion when it patently andpalpably erred in holding that it is more inclined to adopt the stance of appellant (private respondent UNION) in this issue since it ismore in keeping with the law and its implementing provisions and the intendment of the parties as revealed in their CBA withoutgiving any reason or justification for such conclusions as the stance of appellant (private respondent UNION) does not traverse theclear and correct finding and conclusion of the Labor Arbiter.

Furthermore, the petitioner, under conservatorship and distressed, is exempted under Wage Order No. 6.

Finally, the wage differentials under Wage Order No. 6 for November 1, 1984 and the corresponding adjustment thereof hasprescribed.

3. On the alleged non-payment of legal holiday pay, the NLRC again gravely abused its discretion when it patently and palpably erredin approving and adopting the position of appellant (private respondent UNION) without giving any reason or justification t hereforwhich position does not squarely travers e or refute the Labor Arbiters correct finding and ruling.

ISSUES:

WON petitioner has violated the provisions of the Labor Code with regards to diminution of benefits, non-compliance with Wage No. 6and non-payment of holiday pay.

HELD: No. In Bonuses

Private respondent argument - the mid-year and Christmas bonuses, by reason of their having been given for thirteen consecutiveyears, have ripened into a vested right and, as such, can no longer be unilaterally withdrawn by petitioner without violating Article 100of Presidential Decree No. 442 which prohibits the diminution or elimination of benefits already being enjoyed by the employees.

Although private respondent concedes that the grant of a bonus is discretionary on the part of the employer, it argues that, by reasonof its long and regular concession, it may become part of the employees regular compensation.

Petitoners argument - it cannot be compelled to pay the alleged bonus differentials due to its depressed financial condition, asevidenced by the fact that in 1984 it was placed under conservatorship by the Monetary Board. According to petitioner, it sustainedlosses in the millions of pesos from 1984 to 1988, an assertion which was affirmed by the labor arbiter. Moreover, petitioner points outthat the collective bargaining agreement of the parties does not provide for the payment of any mid-year or Christmas bonus.

SC - A bonus is an amount granted and paid to an employee for his industry and loyalty which contributed to the success of theemployers business and made possible the realization of profits. It is an act of generosity granted by an enlightened employ er to spurthe employee to greater efforts for the success of the business and realization of bigger profits. The granting of a bonus is amanagement prerogative, something given in addition to what is ordinarily received by or strictly due the recipient. Thus, a bonus is

not a demandable and enforceable obligation, except when it is made part of the wage, salary or compensation of the employee. Anemployer cannot be forced to distribute bonuses which it can no longer afford to pay. To hold otherwise would be to penalize theemployer for his past generosity.

13 th Month Pay

The intention of the law was to grant some relief not to all workers but only to those not actually paid a 13th month salary or whatamounts to it, by whatever name called. It was not envisioned that a double burden would be imposed on the employer alreadypaying his employees a 13th month pay or its equivalent whether out of pure generosity or on the basis of a binding agreement. Toimpose upon an employer already giving his employees the equivalent of a 13th month pay would be to penalize him for his liberalityand in all probability, the employer would react by withdrawing the bonuses or resist further voluntary grants for fear that if and when alaw is passed giving the same benefits, his prior concessions might not be given due credit.

In the case at bar, even assuming the truth of private respondents claims as contained in its position paper or Memorandumregarding the payments received by its members in the form of 13th month pay, mid-year bonus and Christmas bonus, it is noted that,for each and every year involved, the total amount given by petitioner would still exceed, or at least be equal to, one month basic

salary and thus, may be considered as an equivalent of the 13th m onth pay mandated by PD 851. Thus, petitioner is justified increditing the mid-year bonus and Christmas bonus as part of the 13th month pay.

Wage Order No. 6

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Wage Order No. 6, which came into effect on 1 November 1984, increased the statutory minimum wage of workers, with differentincreases being specified for agricultural plantation and non-agricultural workers. The bone of contention, however, involves Section4 thereof which reads -

All wage increase in wage and/or allowance granted by employers between June 17, 1984 and the effectivity of this Order shall becredited as compliance with the minimum wage and allowance adjustments prescribed herein provided that where the increases areless than the applicable amount provided in this Order, the employer shall pay the difference. Such increases shall not includeanniversary wage increases provided in collective bargaining agreements unless the agreement expressly provide otherwise.

The parties entered into a collective bargaining agreement providing for salary adjustments. In addition, the collective bargainingagreement of the parties also included a provision on the chargeability of such salary or allowance increases against government-ordered or legislated income adjustment.

Section 1 of Articl e VIII of the collective bargaining agreement of the parties states that the parties have formulated and agreed onthe following highly substantial packaged increases in salary and allowance which take into account and cover (a) any deflation inincome of employees because of such price increases and inflation and (b) the expected governmental response thereto in the formof statutory adjustments in wages, allowances and benefits, during the next three (3) years of this Agreement The unequivoc alwording of this provision manifests the clear intent of the parties to apply the wage and allowance increases stipulated in the collectivebargaining agreement to any statutory wage and allowance adjustments issued during the effectivity of such agreement - from 1March 1984 to 28 February 1987. Furthermore, contrary to private respondents contentions, there is nothing in the wording o fSection 2 of Article VIII of the collective bargaining agreement that would prevent petitioner from crediting the first year salary andallowance increases against the increases prescribed by Wage Order No. 6.

It would be inconsistent with the rationale underlying the creditability provision of Wage Order No. 6 if, after applying the first yearincrease to Wage Order No. 5, the balance was not made chargeable to the increases under Wage Order No. 6 for the fact remainsthat petitioner actually granted wage and allowance increases sufficient to cover the increases mandated by Wage Order No. 5 andpart of the increases mandated by Wage Order No. 6.

Holiday Pay

Petitioner has complied with the requirements of Article 94 of the Labor Code.Article 94 of the Labor Code provides that every workershall be paid his regular daily wage during regular holidays and that the employer may require an employee to work on any holidaybut such employee shall be paid a compensation equivalent to twice his regular rate.

In this case, the Labor Arbiter found that the divisor used by petitioner in arriving at the employees daily rate for the pu rpose ofcomputing salary-related benefits is 314. This finding was not disputed by the NLRC. However, the divisor was reduced to 303 byvirtue of an inter-office memorandum. Corollarily, the Acting Convservator also approved the increase of meal allowance from P25.00to P30.00 for a minimum of four (4) hours of work for Saturdays.

Proceeding from the unambiguous terms of the memorandum, the Labor Arbiter observed that the reduction of the divisor to 303 wasfor the sole purpose of increasing the employees over time pay and was not meant to replace the use of 314 as the divisor in thecomputation of the daily rate for salary-related benefits.

One strong argument in favor of the petitioners stand is the fact that the Chartered Bank, in computing overtime compens ation for itsemployees, employs a divisor of 251 days. The 251 working days divisor is the result of subtracting all Saturdays, Sundays and theten (10) legal holidays form the total number of calendar days in a year. If the employees are already paid for all non-working days,the divisor should be 365 and not 251.

Apparently, the divisor of 314 is arrived at by subtracting all Sundays from the total number of calendar days in a year, sinceSaturdays are considered paid rest days, as stated in the inter-office memorandum. Thus, the use of 314 as a divisor leads to theinevitable conclusion that the ten legal holidays are already included therein.

We agree with the labor arbiter that the reduction of the divisor to 303 was done for the sole purpose of in creasing the employeesovertime pay, and was not meant to exclude holiday pay from the monthly salary of petitioners employees. In fact, it was expresslystated in the inter-office memorandum - also referred to by private respondent in its pleadings - that the divisor of 314 will still be usedin the computation for cash conversion and in the determination of the daily rate.

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21. Asian Transmission Corp vs CAFacts: The DOLE, through Undersecretary Cresenciano B. Trajano, issued an Explanatory Bulletindated March 11, 1993 wherein it clarified, inter alia , that employees are entitled to 200% of theirbasic wage on April 9, 1993, whether unworked, which apart from being Good Friday is also Arawng Kagitingan. The bulletin was reproduced on January 23, 1998 when April 9 was both MaundyThursday and Araw ng Kagitingan. Despite the explanatory bulletin, petitioner AsianTransmission Corporation opted to pay its dailypaid employees only 100% of their basic pay onApril 9, 1998. Respondent Bisig ng Asian Transmission Labor Union (BATLU) protested. Hence,the controversy was submitted for voluntary arbitration.

On July 31, 1998, the Office of the Voluntary Arbitrator rendered a decision directing petitioner to pay itscovered employees "200% and not just 100% of their regular daily wages for the unworked April 9, 1998which covers two regular holidays, namely, Araw ng Kagitignan and Maundy Thursday." The VoluntaryArbitrator held that Article 94 of the Labor Code provides for holiday pay for every regular holiday, thecomputation of which is determined by a legal formula which is not changed by the fact that there aretwo holidays falling on one day, like on April 9, 1998 when it was Araw ng Kagitingan and at the sametime was Maundy Thursday; and that that the law, as amended, enumerates ten regular holidays forevery year should not be interpreted as authorizing a reduction to nine the number of paid regularholidays "just because April 9 (Araw ng Kagitingan) in certain years, like 1993 and 1998, is also Holy Fridayor Maundy Thursday." The Court of Appeals upheld the findings of the Voluntary Arbitrator.

Issue: Whether or not the daily-paid employees are entitled to be paid for two regular holidays which fallon the same day?

Ruling: Yes. Art. 94 of the Labor Code, as amended, affords a worker the enjoyment of ten paid regularholidays. The provision is mandatory, regardless of whether an employee is paid on a monthly or dailybasis. Unlike a bonus, which is a management prerogative, holiday pay is a statutory benefit demandableunder the law. Since a worker is entitled to the enjoyment of ten paid regular holidays, the fact that twoholidays fall on the same date should not operate to reduce to nine the ten holiday pay benefits a workeris entitled to receive.In the case at bar, there is nothing in the law which provides or indicates that theentitlement to ten days of holiday pay shall be reduced to nine when two holidays fall on the same day.

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22. Jose Rizal College vs NLRC

Facts: Petitioner Jose Rizal College(JRU) is a non-stock, non-profit educational institution duly organizedand existing under the laws of the Philippines. It has three groups of employees categorized as follows: (a)personnel on monthly basis, who receive their monthly salary uniformly throughout the year, irrespectiveof the actual number of working days in a month without deduction for holidays; (b) personnel on daily

basis who are paid on actual days worked and they receive unworked holiday pay and (c) collegiatefaculty who are paid on the basis of student contract hour. Before the start of the semester they signcontracts with the college undertaking to meet their classes as per schedule. Unable to receive theircorresponding holiday pay, as claimed, from 1975 to 1977, private respondent National Alliance ofTeachers and Office Workers (NATOW) in behalf of the faculty and personnel of Jose Rizal College filedwith the Ministry of Labor a complaint against the college for said alleged non-payment of holiday pay.

Labor Arbiter ** rendered a decision on February 5, 1979, the dispositive portion of which reads:WHEREFORE, judgment is hereby rendered as follows:1. The faculty and personnel of the respondent Jose Rizal College who are paid their salary by themonth uniformly in a school year, irrespective of the number of working days in a month,

without deduction for holidays, are presumed to be already paid the 10 paid legal holidays andare no longer entitled to separate payment for the said regular holidays;2. The personnel of the respondent Jose Rizal College who are paid their wages daily are entitledto be paid the 10 unworked regular holidays according to the pertinent provisions of the Rulesand Regulations Implementing the Labor Code;3. Collegiate faculty of the respondent Jose Rizal College who by contract are paid compensationper student contract hour are not entitled to unworked regular holiday pay considering thatthese regular holidays have been excluded in the programming of the student contact hours.On appeal, respondent National Labor Relations Commission modified the decision appealed from, in thesense that teaching personnel paid by the hour are declared to be entitled to holiday pay.

Issue: whether or not the school faculty who are paid per lecture hour are entitled to unworked holidaypay

Ruling: No. The court believe that the implementing rule (Implementing Rules and Regulations, Rule IV,Book III, which reads: SEC. 8. Holiday pay of certain employees . (a) Private school teachers, includingfaculty members of colleges and universities, may not be paid for the regular holidays during semestralvacations. They shall, however, be paid for the regular holidays during Christmas vacations. ...)is not justified by the provisions of the law which after all is silent with respect to faculty members paid bythe hour who because of their teaching contracts are obliged to work and consent to be paid only forwork actually done (except when an emergency or a fortuitous event or a national need calls for the

declaration of special holidays). Regular holidays specified as such by law are known to both school andfaculty members as no class days;" certainly the latter do not expect payment for said unworked days,and this was clearly in their minds when they entered into the teaching contracts

PREMISES CONSIDERED, the decision of respondent National Labor Relations Commission ishereby set aside, and a new one is hereby RENDERED:(a) exempting petition