San Miguel Brewery Sales Force Union(PTGWO) vs. Hon. Blas Ople G.R. No. L-53515, February 8, 1989 FACTS: For 3 years, a collective bargaining agreement was being implemented by San Miguel Corporation Sales Force Union(PTGWO), and San Miguel Corporation. Section 1, of Article IV of which provided “Employees within the appropriate bargaining unit shall be entitled to a basic monthly compensation plus commission based on their respective sales.” Then, the company introduced a marketing scheme known as “Complementary Distribution System” (CDS) whereby its beer products were offered for sale directly to wholesalers through San Miguel’s Sales Offices. The union alleged that the new marketing scheme violates Sec 1, Art IV f the CBA because the introduction of the CDS would reduce the take home pay of the salesmen. ISSUE: Whether or not the new marketing scheme should be upheld considering that the act was unilaterally made by the employer. RULING: Yes, because it is a valid exercise of managerial prerogative. So long as a company’s management prerogatives are exercised in good faith for the advancement of the employer’s interest and not for the purpose of defeating or circumventing the rights of t he employees under special laws or under valid agreements, this Court will uphold them. San Miguel Corporation’s offer to compensate the members of its sales force who will be adversely affected by the implementation of the CDS by paying them a so-called “back adjustment commission” to make up for the commissions they might lose as a result of the CDS proves the company’s good faith and lack of intention to bust their union. Pasay City Alliance Church vs. Benito, G.R. No. 226908, November 28, 2019 FACTS: Respondent Fe P. Benito (Benito) is a licensed Christian Minister of Christian and Missionary Alliance Churches of the Philippines (CAMACOP). In 2005, Benito was appointed Head of PCAC's Membership and Evangelism Ministry, which was renamed Pastoral Care and Membership in 2009. Benito served without a written contract. Pastoral Care and Membership is under the supervision of the Church Ministry Team (CMT) and copetitioner Reverend William Cargo (Rev. Cargo). The present controversy stemmed from CAMACOP and PCAC's policy requiring pastors or ministers without written contracts to tender a courtesy resignation every year. On February 12, 2012, CMT then decided not to reappoint Benito and recommended that she reapply to a more suitable position. Benito was informed, through a letter dated December 15, 2013, of the CMT's decision to uphold its February 12, 2012 recommendation to the District Ministry Supervisor regarding the non-extension of her engagement as PCAC's Head of Pastoral are and Membership. Aggrieved, Benito filed a complaint for illegal dismissal, damages and attorney's fees before the Labor Arbiter, anchored on the claim that she had already attained regular status by operation of law and entitled to security of tenure in view of her long years of service with PCAC. ISSUE: Is the termination issue of its pastor an ecclesiastical matter that is well-within the church to determine and adjudicate? RULING: YES If a church or religious association has the sole prerogative to exclude members perceived to be unworthy in light of its doctrinal standards, all the more does it have sole prerogative in determining who are best fit to minister to its members in activities attached with religious significance. We disagree with the CA's interpretation that the non-renewal of Benito's appointment was due to her inefficiency as an administrative officer for her ministry and, thus, purely secular. This conclusion ignores the significance of Benito's position under contention, as the Head of Pastoral Care and Membership. Here, the CMT cited failure on Benito's part to "share" with new attendees, Benito's inaction on the death of a member, and several other administrative lapses that impact on the conduct of PCAC's ecclesiastical activities, such as evangelism, baptism and Sunday praise or worship activities. We hold that the termination of a religious minister's engagement at a local church due to administrative lapses, when it relates to the perceived effectivity of a minister as a charismatic leader of a congregation, is a prerogative best left to the church affected by such choice. If a religious association enacts guidelines that reserve the right to transfer or reassign its licensed ministers according to what it deems best for a particular congregation, ministry or undertaking in pursuit of its mission, then the State cannot validly interfere. CHARLITO PEÑARANDA, Petitioner, vs. BAGANGA PLYWOOD CORPORATION and HUDSON CHUA, Respondents. SYNOPSIS: Managerial employees and members of the managerial staff are exempted from the provisions of the Labor Code on labor standards. Since petitioner belongs to this class of employees, he is not entitled to overtime pay and premium pay for working on rest days. FACTS: Petitioner Charlito Peñaranda was hired as an employee of Baganga Plywood Corporation (BPC) to take charge of the operations and maintenance of its steam plant boiler. Respondent (BPC) is a domestic corporation duly organized and existing under Philippine laws and is represented herein by its General Manager HUDSON CHUA, the individual respondent. Peñaranda through counsel in his position paper alleges that he was employed by respondent Baganga on March 15, 1999 with a monthly salary of P5,000.00 as Foreman/Boiler Head/Shift Engineer until he was allegedly illegally terminated on December 19, 2000. Further, he was not paid his overtime pay, premium pay for working during holidays/rest days, night shift differentials. The respondent [BPC] was on temporary closure due to repair and general maintenance and it applied for clearance with the DOLE, and due to the insistence of herein complainant he was paid his separation benefits. Hence, he was not terminated from employment much less illegally. Being a managerial employee he is not entitled to overtime pay and if ever he rendered services beyond the normal hours of work, there was no office order/or authorization for him to do so. Labor Arbiter ruled that there was no illegal dismissal because Penaranda’s complaint was premature because he was still employed with Baganga. The petitioner is also entitled to OT pay, premium pay, and attorney’s fees. On appeal, NLRC deleted the award of OT pay, premium pay and attorney’s fees. CA dismissed Penaranda’s petition based on procedural failures. ISSUE: WON Penaranda is entitled to monetary benefits under art. 82 of the Labor Code. HELD: No. Article 82 of the Labor Code exempts managerial employees from the coverage of labor standards. Labor standards provide the working conditions of employees, including entitlement to overtime pay and premium pay for working on rest days. Under this provision, managerial employees are "those whose primary duty consists of the management of the establishment in which they are employed or of a department or subdivision." The Court disagrees with the NLRC’s finding that petitioner was a managerial employee. However, petitioner was a member of the managerial staff, which also takes him out of the coverage of labor standards. Like managerial employees, officers and members of the managerial staff are not entitled to the provisions of law on labor standards. The Implementing Rules of the Labor Code define members of a managerial staff as those with the following duties and responsibilities: "(1) The primary duty consists of the performance of work directly related to management policies of the employer; "(2) Customarily and regularly exercise discretion and independent judgment; "(3) (i) Regularly and directly assist a proprietor or a managerial employee whose primary duty consists of the management of the establishment in which he is employed or subdivision thereof; or (ii) execute under general supervision work along specialized or technical lines requiring special training, experience, or knowledge; or (iii) execute under general supervision special assignments and tasks; and "(4) who do not devote more than 20 percent of their hours worked in a workweek to activities which are not directly and closely related to the performance of the work described in paragraphs (1), (2), and (3) above." Petitioner supervised the engineering section of the steam plant boiler. His work involved overseeing the operation of the machines and the performance of the workers in the engineering section. This work necessarily required the use of discretion and independent judgment to ensure the proper functioning of the steam plant boiler. As supervisor, petitioner is deemed a member of the managerial staff. Auto Bus Transport vs Bautista G.R. No. 156367. May 16, 2005 Facts: Bautista, a driver-conductor of the Autobus transport, was dismissed after his failure to pay an amount demanded by the company for the repair of the bus damaged in an accident caused by him. He receives compensation by way of commission per travel. Bautista complained for illegal dismissal with money claims for nonpayment of 13th month pay and service incentive leave pay against Autobus. Auto Bus’ Defenses: 1. Bautista’s employment was replete with offenses involving reckless imprudence, gross negligence, and dishonesty supported with copies of letters, memos, irregularity reports, warrants of arrest; 2. In the exercise of management prerogative, Bautista was terminated only after providing for an opportunity to explain. Labor Arbiter dismissed the complaint however awarded Bautista his 13th month pay and service incentive leave pay. Auto Bus appealed. NLRC deleted the 13th month pay award. In the CA, NLRC’s decision was affirmed. Issue: 1. Whether or not respondent is entitled to service incentive leave pay. 2. Whether or not the three (3)-year prescriptive period provided under Article 291 of the Labor Code, as amended, is applicable to respondent’s claim of service incentive leave pay. Held: 1. Yes. Under Article 95 of the Labor Code, every employee who has rendered at least one year or service shall be entitled to a yearly service incentive leave of five days with pay. In Section 1, Rule V, Book III of the Implementing Rules and Regulations of the Labor Code, the rule shall apply to all, except… (d) Field personnel and other employees whose performance is unsupervised by the employer including those who are engaged on task or contract basis, purely commission basis, or those who are paid in a fixed amount for performing work irrespective of the time consumed in the performance thereof. Petitioner’s contention that Bautista is not entitled to service incentive leave because he is paid on a purely commission basis must fail. The phrase following “Field personnel” should not be construed as a separate classification of employees but is merely an amplification of the definition of field personnel defined under the Labor Code. Bautista neither falls under the category field personnel. As defined, field personnel are those whose performance of service is unsupervised by the employer, the workplace being away from the principal place of business and whose hours and days of work cannot be determined with reasonable certainty. Bus companies have ways of determining the hours worked by their drivers and conductors with reasonable certainty. The courts have taken judicial notice of the following: Along the routes traveled, there are inspectors assigned at strategic places who board the bus to inspect the passengers, the punched tickets, and the conductor’s reports; There is a mandatory once-a week car barn or shop day, where the bus is regularly checked; The drivers and conductors must be at specified place and time, as they observe prompt departure and arrival; At every depot, there is always a dispatcher whose function is to see to it that the bus and crew leaves and arrives at the estimated proper time. By these reasons, drivers and conductors are therefore under constant supervision while in the performance of their work. 2. In the computation of the three-year prescriptive period, a determination must be made as to the period when the... act constituting a violation of the workers' right to the benefits being claimed was committed. For if the cause of action accrued more than three (3) years before the filing of the money claim, said cause of action has already prescribed in accordance with Article 291 of the Labor Code. Consequently, in cases of nonpayment of allowances and other monetary benefits, if it is established that the benefits being claimed have been withheld from the employee for a period longer than three (3) years, the amount pertaining to the period beyond the three-year... prescriptive period is therefore barred by prescription. The amount that can only be demanded by the aggrieved employee shall be limited to the amount of the benefits withheld within three (3) years before the filing of the complaint. In the case of service incentive leave, the employee may choose to either use his leave credits or... commute it to its monetary equivalent if not exhausted at the end of the year. Furthermore, if the employee entitled to service incentive leave does not use or commute the same, he is entitled upon his resignation or separation from work to the... commutation of his accrued service incentive leave. it can be conscientiously deduced that the cause of action of an entitled employee to claim his service incentive leave pay accrues from the moment the employer refuses to remunerate its monetary equivalent if the employee did not make use of said leave credits... but instead chose to avail of its commutation. Accordingly, if the employee wishes to accumulate his leave credits and opts for its commutation upon his resignation or separation from employment, his cause of action to claim the whole amount of his accumulated service incentive... leave shall arise when the employer fails to pay such amount at the time of his resignation or separation from employment. Therefore, the prescriptive period with respect to his claim for service incentive leave pay only commenced from the time the employer failed to compensate his accumulated service incentive leave pay at the time of his dismissal. Since respondent had filed his money claim after... only one month from the time of his dismissal, necessarily, his money claim was filed within the prescriptive period provided for by Article 291 of the Labor Code. Rada v NLRC G.R. No. 96078 January 9, 1992 Special Civil Action Justice Regalado Facts: 1. In 1977, Hilario Rada was contracted by Philnor Consultants and Planners, Inc as a driver. 2. He was assigned to a specific project in Manila. The contract he signed was for 2.3 years. 3. His task was to drive employees to the project from 7am to 4pm. 4. He was allowed to bring home the company vehicle in order to provide a timely transportation service to the other project workers. The project he was assigned to was not completed as scheduled hence, since he has a satisfactory record, he was re-contracted for an additional 10 months. 5. After 10 months the project was not yet completed. Several contracts thereafter were made until the project was finished in 1985. 6. At the completion of the project, Rada was terminated as his employment was co-terminous with the project. 7. Petitioner filed before the NLRC, National Capital Region, Department of Labor and Employment, a Complaint for non-payment of separation pay and overtime pay. 8. Subsequently petitioner 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 form Monday to Saturday for a period of three years. Issue: 1. Rada claims he is entitled to be paid OT pay because he uses extra time to get to the project site from his home and from the project site to his home everyday – in total, he spends an average of 3 hours OT every day. Held: 1. Petitioner postulates that as a regular employee, he is entitled to security of tenure, hence he cannot be terminated without cause. Private respondent Philnor believes otherwise and asserts that petitioner is merely a project employee who was terminated upon the completion of the project for which he was employed. DOCTRINE: Our ruling in Sandoval Shipyards, Inc. vs. National Labor Relations Commission, et al. is applicable to the case at bar. Thus: We hold that private respondents were project employees whose work was coterminous with the project or which they were hired. 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." Policy Instructions No. 20 of the Secretary of Labor, which was issued to stabilize employer-employee relations in the construction industry, provides: Project employees are 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. Project employees are not entitled to termination pay if they are terminated as a result of the completion of the project or any phase thereof in which they are employed, regardless of the number of projects in which they have been employed by a particular construction company. Moreover, the company is not required to obtain clearance from the Secretary of Labor in connection with such termination. 2. 3. Anent the claim for overtime compensation, we hold that petitioner is entitled to the same. 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 petitioner's job as a driver. 4. On the contrary, said transportation arrangement had been adopted, not so much for the convenience of the employees, but primarily for the benefit of the employer, herein private respondent. 5. This fact is inevitably deducible from the Memorandum of respondent company. 6. 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. 7. 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. DISPOSITVE: WHEREFORE, subject to the modification regarding the award of overtime pay to herein petitioner, the decision appealed from is AFFIRMED in all other respects. G.R. No. L-63122. February 20, 1984. UNIVERSITY OF PANGASINAN FACULTY UNION, Petitioner, v. UNIVERSITY OF PANGASINAN And NATIONAL LABOR RELATIONS COMMISSION, Respondents. FACTS: On December 18, 1981, the petitioner, through its President, filed a complaint against the private respondent with the Arbitration Branch of the NLRC. The complaint seeks: (a) the payment of Emergency Cost of Living Allowances (ECOLA) for November 7 to December 5, 1981, a semestral break; (b) salary increases from the sixty (60%) percent of the incremental proceeds of increased tuition fees; and (c) payment of salaries for suspended extra loads. The petitioner’s members are full-time professors, instructors, and teachers of respondent University. The teachers in the college level teach for a normal duration of ten (10) months a school year, divided into two (2) semesters of five (5) months each, excluding the two (2) months summer vacation. These teachers are paid their salaries on a regular monthly basis In November and December, 1981, the petitioner’s members were fully paid their regular monthly salaries. However, from November 7 to December 5, during the semestral break, they were not paid their ECOLA. The private respondent claims that the teachers are not entitled thereto because the semestral 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. During the same school year (1981-1982), the private respondent was authorized by the Ministry of Education and Culture to collect, as it did collect, from its students a fifteen (15%) percent increase of tuition fees. Petitioner’s members demanded a salary increase effective the first semester of said schoolyear to be taken from the sixty (60%) percent incremental proceeds of the increased tuition fees. Private respondent refused, compelling the petitioner to include said demand in the complaint filed in the case at bar. While the complaint was pending in the arbitration branch, the private respondent granted an across-the-board salary increase of 5.86%. Nonetheless, the petitioner is still pursuing full distribution of the 60% of the incremental proceeds as mandated by the Presidential Decree No. 451 Aside from their regular loads, some of petitioner’s members were given extra loads to handle during the same 1981-1982 schoolyear. Some of them had extra loads to teach on September 21, 1981, but they 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. 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 1ST ISSUE: "WHETHER OR NOT PETITIONER’S MEMBERS ARE ENTITLED TO ECOLA DURING THE SEMESTRAL BREAK FROM NOVEMBER 7 TO DECEMBER 5, 1981 OF THE 1981-82 SCHOOL YEAR. RULING: YES. The various Presidential Decrees on ECOLAs to wit: PD’s 1614, 1634, 1678 and 1713, provide on "Allowances of Fulltime Employees . . ." that "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 . . ." ; and on "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." It is beyond dispute that the petitioner’s members are full-time employees receiving their monthly salaries irrespective of the number of working days or teaching hours in a month. However, they find themselves in a most peculiar situation whereby they are forced to go on leave during semestral breaks. These semestral breaks are in the nature of work interruptions beyond the employees’ control. The duration of the semestral break varies from year to year dependent on a variety of circumstances affecting at times only the private respondent but at other times all educational institutions in the country. As such, these breaks cannot be considered as absences within the meaning of the law for which deductions may be made from monthly allowances. The "No work, no pay" principle does not apply in the instant case. The petitioner’s members received their regular salaries during this period. It is clear from the aforequoted provision of law that it contemplates a "no work" situation where the employees voluntarily absent themselves. Petitioners, in the case at bar, certainly do not, ad voluntatem, absent themselves during semestral breaks. Rather, they are constrained to take mandatory leave from work. For this they cannot be faulted nor can they be begrudged that which is due them under the law. Respondent’s contention that "the fact of receiving a salary alone should not be the basis of receiving ECOLA", is, likewise, without merit. Particular attention is brought to the Implementing Rules and Regulations of Wage Order No. 1 to wit. SECTION 5. Allowance for Unworked Days. — "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." It is evident that the intention of the law is to grant ECOLA upon the payment of basic wages. Hence, we have the principle of "No pay, no ECOLA" the converse of which finds application in the case at bar. Petitioners cannot be considered to be on leave without pay so as not to be entitled to ECOLA, for, as earlier stated, the petitioners were paid their wages in full for the months of November and December of 1981, notwithstanding the intervening semestral break. This, in itself, is a tacit recognition of the rather unusual state of affairs in which teachers find themselves. Although said to be on forced leave, professors and teachers are, nevertheless, burdened with the task of working during a period of time supposedly available for rest and private matters. There are papers to correct, students to evaluate, deadlines to meet, and periods within which to submit grading reports. Although they may be considered by the respondent to be on leave, the semestral break could not be used effectively for the teacher’s own purposes for the nature of a teacher’s job imposes upon him further duties which must be done during the said period of time. Learning is a never ending process. Teachers and professors must keep abreast of developments all the time. Teachers cannot also wait for the opening of the next semester to begin their work. Arduous preparation is necessary for the delicate task of educating our children. It would be most unfair for the private respondent to consider these teachers as employees on leave without pay to suit its purposes and, yet, in the meantime, continue availing of their services as they prepare for the next semester or complete all of the last semester’s requirements. Furthermore, we may also by analogy apply the principle enunciated in the Omnibus Rules Implementing the Labor Code to wit: 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: x x x "(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." (Emphasis supplied). The petitioner’s members in the case at bar, are exactly in such a situation. The semestral break scheduled is an interruption beyond petitioner’s control and it cannot be used "effectively nor gainfully in the employee’s interest’. Thus, the semestral break may also be considered as "hours worked." For this, the teachers are paid regular salaries and, for this, they should be entitled to ECOLA. Not only do the teachers continue to work during this short recess but much less do they cease to live for which the cost of living allowance is intended. The legal principles of "No work, no pay; No pay, no ECOLA" must necessarily give way to the purpose of the law to augment the income of employees to enable them to cope with the harsh living conditions brought about by inflation; and to protect employees and their wages against the ravages brought by these conditions. 2ND ISSUE: "WHETHER OR NOT ALLEGED PAYMENT OF SALARIES FOR EXTRA LOADS ON SEPTEMBER 21, 1981 WAS PROVEN BY SUBSTANTIAL EVIDENCE." RULIING: NO. The respondents are of the considered view that as evidenced by the payrolls submitted by them during the period September 16 to September 30, 1981, the faculty members have been paid for the extra loads. Assuming arguendo, however, that the petitioners have not been paid for these extra loads, they are not entitled to payment following the principles of "No work, no pay." This time, the rule applies. Involved herein is a matter different from the payment of ECOLA under the first issue. We are now concerned with extra, not regular loads for which the petitioners are paid regular salaries every month regardless of the number of working days or hours in such a month. Extra loads should be paid for only when actually performed by the employee. Compensation is based, therefore, on actual work done and on the number of hours and days spent over and beyond their regular hours of duty. Since there was no work on September 21, 1981, it would now be unfair to grant petitioner’s demand for extra wages on that day. SIME DARBY PILIPINAS, INC. petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION (2ND DIVISION) and SIME DARBY SALARIED EMPLOYEES ASSOCIATION (ALUTUCP), respondents. G.R. No. 119205 April 15, 1998 Facts: Sime Darby Pilipinas, Inc., petitioner, is engaged in the manufacture of automotive tires, tubes and other rubber products. Sime Darby Salaried Employees Association (ALU-TUCP), private respondent, is an association of monthly salaried employees of petitioner at its Marikina factory. Prior to the present controversy, all company factory workers in Marikina including members of private respondent union worked from 7:45 a.m. to 3:45 p.m. with a 30-minute paid "on call" lunch break. On 14 August 1992 petitioner issued a memorandum to all factory-based employees advising all its monthly salaried employees in its Marikina Tire Plant, except those in the Warehouse and Quality Assurance Department working on shifts, a change in work schedule effective 14 September 1992 thus — factory office hours was changed to 7:45 AM – 4:45 PM (Monday to Friday), 7:45 AM – 11:45 AM (Saturday), with ten minute coffee breaks from 9:30 AM – 10:30 AM and 2:30 PM – 3:30 PM and a lunch break from 12:00 NN – 1:00 PM. Since private respondent felt affected adversely by the change in the work schedule and discontinuance of the 30-minute paid "on call" lunch break, it filed on behalf of its members a complaint with the Labor Arbiter for unfair labor practice, discrimination and evasion of liability pursuant to the resolution. The Labor Arbiter dismissed the complaint on the ground that the change in the work schedule and the elimination of the 30-minute paid lunch break of the factory workers constituted a valid exercise of management prerogative and that the new work schedule, break time and one-hour lunch break did not have the effect of diminishing the benefits granted to factory workers as the working time did not exceed eight (8) hours. Private respondent appealed to respondent National Labor Relations Commission (NLRC) which sustained the Labor Arbiter and dismissed the appeal. However, upon motion for reconsideration by private respondent, the NLRC, this time with two (2) new commissioners replacing those who earlier retired, reversed its earlier decision of 20 April 1994 as well as the decision of the Labor Arbiter. Hence this petition. Issue: Is the act of management in revising the work schedule of its employees and discarding their paid lunch break constitutive of unfair labor practice? Ruling: No. The Court ruled in favor of petitioner. The right to fix the work schedules of the employees rests principally on their employer. In the instant case petitioner, as the employer, cites as reason for the adjustment the efficient conduct of its business operations and its improved production. It rationalizes that while the old work schedule included a 30- minute paid lunch break, the employees could be called upon to do jobs during that period as they were "on call." Even if denominated as lunch break, this period could very well be considered as working time because the factory employees were required to work if necessary and were paid accordingly for working. With the new work schedule, the employees are now given a one-hour lunch break without any interruption from their employer. For a full one-hour undisturbed lunch break, the employees can freely and effectively use this hour not only for eating but also for their rest and comfort which are conducive to more efficiency and better performance in their work. Since the employees are no longer required to work during this one-hour lunch break, there is no more need for them to be compensated for this period. We agree with the Labor Arbiter that the new work schedule fully complies with the daily work period of eight (8) hours without violating the Labor Code. Besides, the new schedule applies to all employees in the factory similarly situated whether they are union members or not. The case does not pertain to any controversy involving discrimination of employees but only the issue of whether the change of work schedule, which management deems necessary to increase production, constitutes unfair labor practice. As shown by the records, the change effected by management with regard to working time is made to apply to all factory employees engaged in the same line of work whether or not they are members of private respondent union. Hence, it cannot be said that the new scheme adopted by management prejudices the right of private respondent to self-organization. Every business enterprise endeavors to increase its profits. In the process, it may devise means to attain that goal. Even as the law is solicitous of the welfare of the employees, it must also protect the right of an employer to exercise what are clearly management prerogatives. Thus, management is free to regulate, according to its own discretion and judgment, all aspects of employment, including hiring, work assignments, working methods, time, place and manner of work, processes to be followed, supervision of workers, working regulations, transfer of employees, work supervision, lay off of workers and discipline, dismissal and recall of workers. Further, management retains the prerogative, whenever exigencies of the service so require, to change the working hours of its employees. So long as such prerogative is exercised in good faith for the advancement of the employer's interest and not for the purpose of defeating or circumventing the rights of the employees under special laws or under valid agreements, this Court will uphold such exercise. BISIG NG MANGGAGAWA NG PHILIPPINE REFINING CO., INC vs. PHILIPPINE REFINING CO., INC. G.R. No. L-27761-September 30, 1981 FACTS: On April 15,1966, the Bisig ng Manggagawa ng Philippine Refining Company, Inc., as the representative union of the rank and file employees of the Philippine Refining Co., Inc., filed with the Court of First Instance of Manila a petition for declaratory relief praying, among othersThat a declaratory judgment be rendered declaring and adjudicating the e rights and duties of petitioner and respondent under the above quoted provision of their Collective 13 agreements and further declaring that the Christmas bonus of one month or thirty days pay and other de determinable benefits should be included for the purpose of computation of the overtime pay spread throughout the twelve months period of each year from August, 1963 up to the present and subsequently hereafter; and that respondent be therefore directed to pay such differential in the overtime pay of all the employees of the herein respondent ; On May 3, 1966, the Philippine Refining Co.. Inc. filed its answer to the petition alleging, among others, that never did the parties intend, in the 1965 collective bargaining agreement and in prior agreements, to include the employees' Christmas bonus and other fringe benefits in the computation of the overtime pay and that the company precisely agreed to a rate of 50%, which is much higher than the 25% required by the Eight-Hour Labor Law (Commonwealth Act No. 444, as amended), on the condition that in computing the overtime pay only the "regular base pay" would be considered. ISSUE: Whether or not the phrase "regular base pay" as used in the above-quoted provision of the 1965 CBA includes Christmas bonus and other fringe benefits? HELD: NO. The phrase "regular base pay" is clear, unequivocal and requires no interpretation. It means regular basic pay and necessarily excludes money received in different concepts such as Christmas bonus and other fringe benefits. In this connection it is necessary to remember that in the enforcement of previous collective bargaining agreements containing the same provision of overtime pay at the rate of regular base pay plus 50@'c thereof", the overtime compensation was invariably based only on the regular basic pay, exclusive of Christmas bonus and other tinge benefits. Appellant union knew all the while of such interpretation and precisely attempted to negotiate for a provision in the subject collective bargaining agreement that would include the Christmas bonus and other fringe benefits in the computation of the overtime pay. Significantly, the appellee company did not agree to change the phrase "regular base pay" as it could not consent to the inclusion of the fringe benefits in the computation of the overtime pay. Hence, the appellant union could not question the intended definition of the phrase but could only claim that the same violated the Nawasa doctrine and insist that the phrase should be redefined to conform to said doctrine. In the case at bar, it is admitted that the contractual formula of "regular base pay plus 50% thereof" yields an overtime compensation which is higher than the result in applying the statutory formula as elaborated in the Nawasa case. Consequently, its validity is upheld and the parties are enjoined to accord due respect to it. Decision appealed from is hereby affirmed in all respects. Ramirez vs. Polyson Industries, Inc. G.R. No. 207898 October 19, 2016 Petitioners: ERROL RAMIREZ, JULITO APAS, RICKY ROSELO and ESTEBAN MISSION, JR. Respondents: POLYSON INDUSTRIES, INC. and WILSON S. YU Ponente: PERALTA, J. FACTS 1. Petitioners, on the other hand, were employees of Polyson and were officers of Obrero Pilipino (Obrero), the union of the employees of Polyson 2. Labor dispute certified by SOLE to NLRC for compulsory arbitration 3. In its position paper, the Company alleged: a. It received a notice of hearing for PCE from DOLE b. Company and Union officers met, led by petitioner Union President Ramirez c. Union asked that it be voluntarily recognized by Polyson as the exclusive bargaining agent of the rank-and-file employees of Polyson i. Company refused and asked for PCE instead d. Union officers threatened management that the union will show its collective strength in the coming days e. A few days later, the Company received a rush order for production of 100k plastic bags f. Management informed the operators of its Cutting Section that they would be needing workers to work OT because of the said order i. Based on the usual practice of the company, those who intend to perform OT work were expected to sign the “time sheet” indicating their willingness to work after their shift g. The supervisors approached the operators but were told that they would be unable to work overtime because they have other commitments after their shift i. Supervisors then requested that the operators set aside their time for the following day to work beyond their regular shift h. The following day, 5 operators indicated their desire to work OT; i. However, after their regular shift, 3 of the 5 workers didn’t work OT which resulted in the delay in delivery of the client’s order and eventually resulted in the cancellation of the said order i. When management asked the workers, who initially manifested their desire to work OT, to indicate in the time sheet the reason for their failure to do so, 2 of the 3 workers, namely, Leuland Visca (Visca) and Samuel Tuting (Tuting) gave the same reason i. “Ayaw nila/ng iba na mag-OT [overtime]ako” j. Management then conducted an investigation and a hearing where Visca affirmed his previous claim that petitioners were the ones who pressured him to desist from rendering overtime work 4. 5. 6. 7. 8. k. Tuting executed a written statement claiming that herein petitioners induced or threatened them not to work overtime l. Management then gave notices to petitioners asking them to explain why no disciplinary action would be taken against them i. Petitioners denied liability m. Management informed petitioners that it has decided to terminate petitioners’ employment on the ground that they instigated an illegal concerted activity resulting in losses to the company Petitioners’ position paper: dismissed for establishing a union, not for not working overtime Union filed a Notice of Strike a. Grounds: illegal dismissal SOLE certified dispute to NLRC for compulsory arbitration NLRC: illegal dismissal a. MR: reversed CA: affirmed NLRC MR ISSUE: W/N petitioners are guilty of an illegal act and, if so, whether such act is a valid ground for their termination from employment 1. The evidence presented by Polyson has proven that petitioners are indeed guilty of instigating two employees to abstain from working overtime 2. In the Cutting Section Overtime Sheet, employees Visca and Tuting indicated that “ayaw nila/ng iba na mag-OT [overtime] ako” as the reason why they did not render overtime work despite having earlier manifested their desire to do so 3. In the administrative hearing, Visca identified petitioners as the persons who pressured them not to work overtime 4. In the same manner, Tuting, in his written statement, also pointed to petitioners as the ones who told him not to work overtime 5. Petitioners: statements of Visca and Tuting are self-serving a. SC: nothing on record to indicate any ulterior motive on the part of Visca and Tuting to fabricate their claim 6. The Court finds no error in the findings of the NLRC in its questioned Resolution that, contrary to petitioners’ claims, the slowdown was indeed planned a. In incident report, upon inquiry by respondent Yu as regards the reason for nonrendering of overtime, petitioner Ramirez said: “[DI BA] SABI NINYO EIGHT (8) HOURS LANG KAMI. EH DI EIGHT (8) NA LANG. KUNG MAG[]OOVERTIME KAMI DAPAT LAHAT MAY OVERTIME. AYAW KO JOSE RIZAL COLLEGE vs. NATIONAL LABOR RELATIONS COMMISSION AND NATIONAL ALLIANCE OF TEACHERS/OFFICE WORKERS G. R. No. L-65482 December 1, 1987 J. Paras Facts: 1. 2. 3. 4. That the petitioner JRC is a non-stock, non-profit educational institution. Has 3 groups of employees: a. Personnel on a monthly basis, who receive their monthly salary uniformly through out the year, irrespective of the actual number of working days in a month without deduction for holidays b. Personnel on a daily basis who are paid on actual days worked and they receive unworked holiday pay c. Collegiate faculty who are paid on the basis of student contract hour – before the start of the semester they sign contracts with the college undertaking to meet their classes as per schedule Private respondent National Alliance of Teachers and Officer Workers (NATOW) in behalf of the faculty and personal of JRC filed a case to the Ministry of Labor – due to not receiving their corresponding holiday pay (1975-1977). LA rendered the following: a. The faculty and personnel of the respondent Jose Rizal College who are paid their salary by the month 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 and are no longer entitled to separate payment for the said regular holidays b. The personnel of the respondent Jose Rizal College who are paid their wages daily are entitled to be paid the 10 unworked regular holidays according to the pertinent provisions of the Rules and Regulations Implementing the Labor Code c. Collegiate faculty of the respondent Jose Rizal College who by contract are paid compensation per student contract hour are not entitled to unworked regular holiday pay considering that these regular holidays have been excluded in the programming of the student contact hours NLRC modified the decision stating: a. Teaching personnel paid by the hour are entitled to holiday pay Issue: W/N the teaching personnel paid by the hour are entitled to regular holiday, NO special holiday, YES Held: There appears to be no problem therefore as to the first 2 classes of petitioner’s workers. Petitioner’s side: Petitioner maintains the position among others, that it is not covered by Book V of the Labor Code on Labor Relations considering that it is a non- profit institution and that 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 the programming of these student contract hours, legal holidays are excluded and labelled in the schedule as "no class day. " On the other hand, if a regular week day is declared a holiday, the school calendar is extended to compensate for that day. Thus petitioner argues that the advent of any of the legal holidays within the semester will not affect the faculty's salary because this day is not included in their schedule while the calendar is extended to compensate for special holidays. Thus the programmed number of lecture hours is not diminished Solicitor General Argument: The Solicitor General on the other hand, argues that under Article 94 of the Labor Code (P.D. No. 442 as amended), holiday pay applies to all employees except those in retail and service establishments. To deprive therefore employees paid at an hourly rate of unworked holiday pay is contrary to the policy considerations underlying such presidential enactment, and its precursor, the Blue Sunday Law (Republic Act No. 946) apart from the constitutional mandate to grant greater rights to labor SC: (a) exempting petitioner from paying hourly paid faculty members their pay for regular holidays, whether the same be during the regular semesters of the school year or during semestral, Christmas, or Holy Week vacations; (b) but ordering petitioner to pay said faculty members their regular hourly rate on days declared as special holidays or for some reason classes are called off or shortened for the hours they are supposed to have taught, whether extensions of class days be ordered or not; in case of extensions said faculty members shall likewise be paid their hourly rates should they teach during said extensions. Regular Holiday: We believe that the aforementioned implementing rule is not justified by the provisions of the law which after all is silent with respect to faculty members paid by the hour who because of their teaching contracts are obliged to work and consent to be paid only for work 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 and faculty 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. Special Holiday: It is readily apparent that the declared purpose of the holiday pay which is the prevention of diminution of the monthly income of the employees on account of work interruptions is defeated when a regular class day is cancelled on account of a special public holiday and class hours are held on another working day to make up for time lost in the school calendar. Otherwise stated, the faculty member, although forced to take a rest, does not earn what he should earn on that day. Be it noted that when a special public holiday is declared, the faculty member paid by the hour is deprived of expected income, and it does not matter that the school calendar is extended in view of the days or hours lost, for their income that could be earned from other sources is lost during the extended days. Similarly, when classes are called off or shortened on account of typhoons, floods, rallies, and the like, these faculty members must likewise be paid, whether or not extensions are ordered. Topic Case No. Case Name Ponente MUSLIM HOLIDAY G.R. No. 146775 / January 30, 2002 SAN MIGUEL CORPORATION vs. CA KAPUNAN, j. RELEVANT FACTS Oct. 17, 1992 – DOLE Iligan District Office, conducted a routine inspection in the premises of San Miguel Corporation (SMC) in Sta. Filomena, Iligan City. 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 and it was received by and explained to its personnel officer Elena dela Puerta. SMC contested the findings and so DOLE conducted summary hearings on different dates. Still, SMC failed to submit proof that it was paying regular Muslim holiday pay to its employees. Hence, the Regional Director Alan Macaraya issued a compliance order directing SMC to consider Muslim holidays as regular holidays and to pay both its Muslim and non-Muslim employees holiday pay within 30 days from receipt of the order. SMC appealed to the DOLE main office in Manila Dismissed for lack of merit. SMC appealed to the SC via Rule 65, which it referred to the CA. CA modified the compliance order issued by the Regional Director with regards the payment of Muslim holiday pay from 200% to 150% of the employee’s basic salary. SMC filed MR but it was denied by the CA. Hence, this petition via Rule 65. ISSUE AND RATIO DECIDENDI Issue W/N the petition under Rule 65 is proper? W/N SMC’s non-Muslim employees are also entitled to Muslim holiday pay? Ratio NO. 1. SC held that the proper remedy for SMC is to file a petition for review under Rule 45. 2. Well-settled is the rule that certiorari cannot be availed of as a substitute for a lost appeal. For failure of petitioner to file a timely appeal, the questioned decision of the Court of Appeals had already become final and executory. YES. 1. Muslim holidays are provided under Articles 169 and 170, Title I, Book V, of Presidential Decree No. 1083, otherwise known as the Code of Muslim Personal Laws. (see Notes) 2. SC stated that these provisions must be read in conjunction with Art. 94 of the Labor Code which provides: Art. 94. Right to holiday pay. – (a) Every worker shall be paid his regular daily wage during regular holidays, except in retail and service establishments regularly employing less than ten (10) workers; (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; x x x. 3. SMC argues that according to Art. 3 (3) of PD 1083 (see Notes), the provisions of the Code shall be applicable only to Muslims. However, the Court held that there should be no distinction between Muslims and non-Muslims as regards payment of benefits for Muslim holidays. Assuming arguendo that SMC’s position is correct, then Muslims throughout the Philippines are also not entitled to holiday pays on Christian holidays declared by law as regular holidays. Wages and other emoluments granted by law to the working man are determined on the basis of the criteria laid down by laws not on the basis of the worker’s faith or religion. The said Art. 3(3) also provides that nothing herein shall be construed to operate to the prejudice of a non-Muslim. 4. Moreover, in the the 1999 Handbook on Workers Statutory Benefits, approved by then DOLE Secretary Bienvenido E. Laguesma, it was said that both Muslim and Christians working within the Muslim areas may not report for work on the days designated by law as Muslim holidays. W/N the Regional Director has the jurisdiction and authority to issue the compliance order? W/N SMC was accorded due process? YES. 1. By virtue of Art. 128 of the Labor Code, the RD acted as the duly authorized representative of the SOLE and it was within his power to issue the compliance order to SMC. YES. 1. SMC was furnished a copy of the inspection order and it was received by and explained to its Personnel Officer. 2. Further, a series of summary hearings were conducted by DOLE. 3. Thus, SMC could not claim that it was not given an opportunity to defend itself. RULING WHEREFORE, in view of the foregoing, the petition is DISMISSED. NOTES PD 1083 Art. 169. Official Muslim holidays. - The following are hereby recognized as legal Muslim holidays: (a) Amun Jadīd (New Year), which falls on the first day of the first lunar month of Muharram; (b) Maulid-un-Nabī (Birthday of the Prophet Muhammad), which falls on the twelfth day of the third lunar month of Rabi-ul-Awwal; (c) Lailatul Isrā Wal Mirāj (Nocturnal Journey and Ascension of the Prophet Muhammad), which falls on the twenty-seventh day of the seventh lunar month of Rajab; (d) I ̄d-ul-Fitr (Hari Raya Puasa), which falls on the first day of the tenth lunar month of Shawwal, commemorating the end of the fasting season; and (e) I ̄d-ūl-Adhā (Hari Raya Haji),which falls on the tenth day of the twelfth lunar month of Dhūl-Hijja. Art. 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, 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. PD 1083 Article 3. Conflict of provisions. (3) The provisions of this Code shall be applicable only to Muslims and nothing herein shall be construed to operate to the prejudice of a non-Muslim. G.R. No.147420. June 10, 2004 Cesar Odango Vs NLRC and Antique Electric Cooperative, Inc. (ANTECO) Facts Petitioners are monthly-paid employees of ANTECO whose workdays are from Monday to Friday and half of Saturday. After inspection the DOLE found ANTECO liable for underpayment of its employees. DOLE then directed ANTECO to pay its employees wage differentials amounting to P1,427,412.75, but ANTECO failed to pay. On various dates thirty-three (33) monthly-paid employees filed complaints with the NLRC praying for payment of wage differentials, damages and attorney’s fees. The Labor Arbiter rendered a Decision in favor of petitioners granting them wage differentials amounting to P1,017,507.73 and attorney’s fees of 10%. ANTECO appealed to the NLRC which reversed the Labor Arbiter’s Decision. The NLRC denied petitioners’ motion for reconsideration. Petitioners then elevated to the CA which dismissed the petition for failure to comply with Section 3, Rule 46 of the Rules of Court. The CA explained that petitioners failed to allege the specific instances where NLRC abused its discretion. CA then denied petitioners’ motion for reconsideration. Hence, this petition. Issue: Whether or not the petitioners are entitled to money claims. Ruling: NO. Petitioners are not entitled to money claims or wage differentials. The petitioners’ claim is without basis. They based their claim on Section 2, Rule IV, Book III of the Implementing Rules and Policy Instructions No. 9 issued by the Secretary of Labor. Rule IV (Holidays With Pay) SECTION 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. In Insular Bank of Asia vs Inciong, the court ruled that it was null and void since in the guise of clarifying the Labor Code’s provisions on holiday pay, they in effect amended them by enlarging the scope of their exclusion. EVEN IF Section 2, Rule IV of Book III is valid, their claim will still fail. The basic rule in this jurisdiction is "no work, no pay." The right to be paid for un-worked days is generally limited to the ten legal holidays in a year. Petitioners’ claim is based on a mistaken notion that Section 2, gave the right to be paid for un-worked days outside of the ten legal holidays. Petitioners’ reasoning does not only violate "no work, no pay", it also gives rise to an invidious classification, a violation of the equal protection clause. Sustaining petitioners’ argument would make monthly-paid employees a privileged class who are paid even when they do not work. The use of a divisor less than 365 days cannot make ANTECO automatically liable for underpayment. The facts show that petitioners are required to work only from Monday to Friday and half of Saturday. Thus, the minimum allowable divisor is 287, which is the result of 365 days, less 52 Sundays and less 26 Saturdays (or 52 half Saturdays). Any divisor below 287 days means that ANTECOs workers are deprived of their holiday pay for some or all of the ten legal holidays. The 304 days divisor used by ANTECO is clearly above the minimum of 287 days. Adminstrative Law Arellano Univeristy School of Law aiza ebina/2015 CEBU INSTITUTE OF TECHNOLOGY vs OPLE 156 SCRA 629 Delegation to Administrative Agencies FACTS: Six cases involving various private schools, their teachers and non-teaching school personnel, and even parents with children studying in said schools, as well as the then Minister of Labor and Employment, his Deputy, the National Labor Relations Commission, and the then Minister of Education, Culture and Sports, have been consolidated in this single Decision in order to dispose of uniformly the common legal issue raised therein, namely, the allocation of the incremental proceeds of authorized tuition fee increases of private schools provided for in section 3 (a) of Presidential Decree No. 451, and thereafter, under the Education Act of 1982 (Batas Pambansa Blg. 232). Specifically, the common problem presented by these cases requires an interpretation of section 3 (a) of Pres. Decree No. 451 which states: SEC. 3. Limitations. — The increase in tuition or other school fees or other charges as well as the new fees or charges authorized under the next preceding section shall be subject to the following conditions; (a) That no increase in tuition or other school fees or charges shall be approved unless sixty (60%) per centum of the proceeds is allocated for increase in salaries or wages of the members of the faculty and all other employees of the school concerned, and the balance for institutional development, student assistance and extension services, and return to investments: Provided That in no case shall the return to investments exceed twelve (12%) per centum of the incremental proceeds. In addition, there is also a need for a pronouncement on the effect of the subsequent enactment of B.P. Blg. 232 which provides for the allocation of tuition fee increases in section 42 thereof. In a nutshell, the present controversy was precipitated by the claims of some school personnel for allowances and other benefits and the refusal of the private schools concerned to pay said allowances and benefits on the ground that said items should be deemed included in the salary increases they had paid out of the 60% portion of the proceeds from tuition fee increases provided for in section 3 (a) of Pres. Decree No. 451. Under Pres. Dec. No. 451, the authority to regulate the imposition of tuition and other school fees or charges by private schools is lodged with the Secretary of Education and Culture (Sec. 1), where section 42 of B.P. Blg. 232 liberalized the procedure by empowering each private school to determine its rate of tuition and other school fees or charges. Pres. Dec. No. 451 provides that 60% of the incremental proceeds of tuition fee increases shall be applied or used to augment the salaries and wages of members of the faculty and other employees of the school, while B.P. Blg. 232 provides that the increment shall be applied or used in accordance with the regulations promulgated by the MECS. Petitioners insist that the questioned rules and regulations contravene the statutory authority granted to the Minister of Education, and that there is an invalid exercise of rule-making authority ISSUE: Whether or not there was a valid exercise of rule-making authority in the statutory authority granted to the Minister of Education RULING: Yes. The Court finds that there was a valid exercise of rule-making authority. The statutory grant of rule-making power to administrative agencies like the Secretary of Education is a valid exception to the rule on non-delegation of legislative power provided two conditions concur, namely: 1) the statute is complete in itself, setting forth the policy to be executed by the agency, and 2) said statute fixes a standard to which the latter must conform. With the The Education Act of 1982's basic policy as well as, specific policies clearly set forth in its various provisions, the Act is complete in itself and does not leave any part of the policy-making, a strictly legislative function, to any administrative agency. Coming now to the presence or absence of standards to guide the Minister of Education in the exercise of rule-making power, the standard may be either expressed or implied. If the former, the non-delegation objection is easily met. The standard though does not have to be spelled out specifically. It could be implied from the policy and purpose of the act considered as a whole. RATIO: The standard guide to an administrative agency in the exercise of its rule-making power may be either expressed or implied. In the former, the non-delegation objection is easily met. The standard though does not have to be spelled out specifically. It could be implied from the policy and purpose of the statute considered as a whole. --- 39 Serrano v. Severino Santos Transit G.R. No. 187698 | 9 August 2010 | Carpio Morales | Santos PETITIONER: Rodolfo Serrano RESPONDENTS: Severino Santos Transit, Severino Santos RECIT-READY*doctrine in bold*: Petitioner Rodolfo Serrano was hired as a bus conductor by respondent Severino Santos Transait, a bus company owned and operated by its co-respondent Severino Santos. After 14 years of service, petitioner applied for optional retirement from the company whose representative advised him that he must first sign the already prepared Quitclaim before his retirement pay could be released. Petitioner requested that he first go over the computation of his retirement pay. However, such request was denied. He still received 75k as his retirement pay, but signed the Quitclaim under protest. Petitioner lodged a complaint before the LA. He claims that the company erred in its computation since under RA 7641/Retirement Pay Law, his retirement pay should have have been accorded the following: computed at 22.5 days per year of service; to include the cash equivalent of the 5-day SIL; 1/12 of the 13 th month pay. The LA ruled in favor of petitioner. NLRC reversed. The NLRC cited R&E Transport, Inc v. Latag, and that since petitioner was paid on a purely commission basis, he was excluded from the coverage of the laws on 13th month pay and SIL pay. Under RA 7641, otherwise known as the Retirement Pay Law, in the absence of a retirement plan or applicable agreement, an employee who retires shall be entitled to retirement pay equivalent to at least one-half month salary for every year of service, a fraction of at least 6 months being considered as one whole year. exempted from the grant of service incentive leave unless, they fall under the classificarion of field personnel. In practice, taxi drivers do not receive fixed wages. They retain only those sums in excess of the boundary or free they pay to the owners or operators of the vehicles. Conductors, on the other hand, are paid a certain percentage of the bus earnings for the day. Conductors cannot be considered as field personnel because they are required to be at specific places at specific times, despite the fact that they are performing work away from the principal office of the employee. FACTS: 1. The components of one-half month salary shall include all of the following: 2. a) b) c) d) 3. 15 days salary of the employee based on his latest salary rate; The cash equivalent of not more than 5 days of service incentive leave; 1/12 of the 13th month pay due to the employee; All other benefits that the employer and the employee may agree upon that should be included in the computation of the employee’s retirement pay. In this case, petitioner worked for 14 years for the bus company which did not adopt any retirement scheme. Even if petitioner as bus conductor was paid on a commission basis, he still falls within the coverage of RA 7641 and its implementing rules. Thus, petitioner’s retirement pay should include the cash equivalent of the 5-day SIL and 1/12 of the 13th month pay. Furthermore, the SC held there is a difference between drivers paid under the boundary system and conductors who are paid on a commission basis. Employees engaged on a task or contract basis or paid purely on commission basis are not automatically 4. Petitioner Rodolfo Serrano was hired as a bus conductor around 1992 by respondent Severino Santos Transait, a bus company owned and operated by its co-respondent Severino Santos. After 14 years of service, petitioner applied for optional retirement from the company whose representative advised him that he must first sign the already prepared Quitclaim before his retirement pay could be released. Petitioner requested that he first go over the computation of his retirement pay. However, such request was denied. He signed the Quitclaim on which he wrote “U.P” (under protest) after his signature, indiciating his protest to the amount of 75,277.45php he received, computed by the company at 15 days per year of service. Petitioner lodged a complaint before the LA. He claims that the company erred in its computation since under RA 7641/Retirement Pay Law, his retirement pay should have have been accorded the following: a) Computed at 22.5 days per year of service; b) To include the cash equivalent of the 5-day SIL; c) 1/12 of the 13th month pay. Respondent company counters that the Quitclaim signed by petitioner barred his claim and it was in correct in computing his retirement pay. LA: Ruled in favor of petitioner, awarding him 116,135.54php as retirement pay differential. NLRC: Reversed LA and dismissed petitioner’s complaint. However, it ordered respondent company to pay petitioner the amound of 2,365.35 as retirement pay differential. The NLRC cited R&E Transport, Inc v. Latag, and that since petitioner was paid on a purely commission basis, he was excluded from the coverage of the laws on 13 th month pay and SIL pay. Hence, the 1/12 of the 13th month pay and the 5-day SIL should not be factored in the computation fo his retirement pay. ISSUES: 1. W/N the NLRC erred in disallowing the claims of petitioner for his retirement pay? YES RULING: 1. RA 7641, otherwise known as the Retirement Pay Law, amended Art. 287 of the Labor Code by providing for retirement pay to qualified private sector employees in the absence of any retirement plan in the establishment. The pertinent provision of said law provides: Sec. 1. In the absence of a retirement plan or agreement providing for retirement benefits of employees in the establishment, an employee upon reaching the age of sixty (60) years or more, but not beyond sixty-five (65) years which is hereby declared the compulsory retirement age, who has served at least five (5) years in the said establishment, may retire and shall be entitled to retirement pay equivalent to at least one-half (1/2) month salary for every year of service, a fraction of at least six (6) months being considered as one whole year. Unless the parties provide for broader inclusions, the term one-half (1/2) month salary shall mean fifteen (15) days plus one-twelfth (1/12) of the 13th month pay and the cash equivalent of not more than five (5) days of service incentive leaves. Retail, service and agricultural establishments or operations employing not more than (10) employees or workers are exempted from the coverage of this provision. Under Sec. 5 of the above act, it likewise provided for the components of the one-half month salary shall include all the following: e) f) g) h) 15 days salary of the employee based on his latest salary rate; The cash equivalent of not more than 5 days of service incentive leave; 1/12 of the 13th month pay due to the employee; All other benefits that the employer and the employee may agree upon that should be included in the computation of the employee’s retirement pay. 2. In this case, petitioner worked for 14 years for the bus company which did not adopt any retirement scheme. Even if petitioner as bus conductor was paid on a commission basis, he still falls within the coverage of RA 7641 and its implementing rules. Thus, petitioner’s retirement pay should include the cash equivalent of the 5day SIL and 1/12 of the 13th month pay. 3. The SC held that the reliance of NLRC on R&E Transport, Inc v. Latag is erroneous. In said case, the Court held that a taxi driver paid accocrding to the boundary system is not entitled to the 13th month pay and SIL pay, hence, his retirement pay should be computed on the sole basis of his salary. There is a difference between drivers paid under the boundary system and conductors who are paid on a commission basis. Under PD 851/SIL Law, the exclusion from its coverage of workers who are paid on a purely commission basis is only with respect to field personnel. Equally important is the ruling in Auto Bus Transport System case, where the Court held that employees engaged on a task or contract basis or paid purely on commission basis are not automatically exempted from the grant of service incentive leave unless, they fall under the classificarion of field personnel. In practice, taxi drivers do not receive fixed wages. They retain only those sums in excess of the boundary or free they pay to the owners or operators of the vehicles. Conductors, on the other hand, are paid a certain percentage of the bus earnings for the day. Conductors cannot be considered as field personnel because they are required to be at specific places at specific times, despite the fact that they are performing work away from the principal office of the employee. Clearly, their hours and days of work can be determined with reasonable certainty – an element of a field personnel which is lacking. G.R. No. 195466 July 2, 2014 ARIEL L. DAVID, doing business under the name and style "YIELS HOG DEALER," Petitioner, vs. JOHN G. MACASIO, Respondent. Facts: In January 2009, Macasio filed before the LA a complaint against petitioner Ariel L. David, doing business under the name and style “Yiels Hog Dealer,” for non-payment of overtime pay, holiday pay and 13th month pay. He also claimed payment for moral and exemplary damages and attorney’s fees. Macasio also claimed payment for service incentive leave (SIL) David claimed that he started his hog dealer business in 2005 and that he only has ten employees. The LA concluded that as Macasio was engaged on “pakyaw” or task basis, he is not entitled to overtime, holiday, SIL and 13th month pay.The NLRC affirmed the LA decision, thus this case reach the CA which says that Macasio is entitled to his monetary claims following the doctrine laid down in Serrano v. Severino Santos Transit.The CA explained that 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.”Thus this case reached the SC. Issue: Whether or not Macasio is entitled of overtime pay, holiday pay, 13th month pay and payment for service incentive leave Ruling: Yes, in so far as the Holiday and SIL pay is concern. To determine whether workers engaged on “pakyaw” ortask basis” is entitled to holiday and SIL pay, the presence (or absence) of employer supervision as regards the worker’s time and performance is the key: if the worker is simply engaged on pakyaw or task basis, then the general rule is that he is entitled to a holiday pay and SIL pay unless exempted from the exceptions specifically provided under Article 94 (holiday pay) and Article 95 (SIL pay) of the Labor Code. However, if the worker engaged on pakyaw or task basis also falls within the meaning of “field personnel” under the law, then he is not entitled to these monetary benefits. CA that Macasio does not fall under the definition of “field personnel.” The CA’s finding in this regard is supported by the established facts of this case: first, Macasio regularly performed his duties at David’s principal place of business; second, his actual hours of work could be determined with reasonable certainty; and, third, 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. However, the governing law on 13th month pay is PD No. 851. 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. 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 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. Note that unlike the IRR of the Labor Code on holiday and SIL pay, Section 3(e) of the Rules and Regulations Implementing PD No. 851exempts 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. Thus Macasio is not entitled to 13th month pay.