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.