People's Broadcasting vs Secretary of DOLE (2009) G.R.

179652
Facts:
Jandeleon Juezan filed a complaint against People?s Broadcasting Service, Inc. (Bombo
Radyo Phils., Inc) for
th illegal deduction, non-payment of service incentive leave, 13 month pay, premium pay for
holiday and rest
day and illegal diminution of benefits, delayed payment of wages and non-coverage of SSS,
PAG-IBIG and Philhealth before the Department of Labor and Employment (DOLE) Regional
Office No. VII,Cebu City.
On the basis of the complaint, the DOLE conducted a plant level inspection on 23 September
2003. In the Inspection Report Form, the Labor Inspector wrote under the heading ?
Findings/Recommendations? ?non-diminution of benefits? and ?Note: Respondent deny
employer-employee relationship with the complainant- see Notice of Inspection results.?
Petitioner was required to rectify/restitute the violations within five (5) days from receipt. No
rectification was effected by petitioner; thus, summary investigations were conducted, with the
parties eventually ordered to submit their respective position papers.
In his Order dated 27 February 2004, DOLE Regional Director Atty. Rodolfo M. Sabulao
(Regional Director)
ruled that respondent is an employee of petitioner, and that the former is entitled to his money
claims
amounting toP203, 726.30. Petitioner sought reconsideration of the Order, claiming that
theRegional
Director gave credence to the documents offered by respondent without examining the
originals, but at the
same time he missed or failed to consider petitioner?s evidence. Petitioner?s motion for
reconsideration was
[ denied. On appeal to the DOLE Secretary, petitioner denied once more the existence of
employer-employee
relationship. In its Order dated 27 January 2005, the Acting DOLE Secretary dismissed the
appeal on the ground that petitioner did not post a cash or surety bond and instead submitted
a Deed of Assignment of Bank Deposit. Petitioner maintained that there is no employeremployee relationship had ever existed between it and respondent because it was the drama
directors and producers who paid, supervised and disciplined respondent. It also added that
the case was beyond the jurisdiction of the DOLE and should have been considered by the
labor arbiter because respondent?s claim exceeded P5,000.00.
Issue: Whether the Secretary of Labor has the power to determine the existence of an
employer-employee relationship.
Held: Secretary of Labor has the power to determine the existence of an employer-employee
relationship.
Clearly the law accords a prerogative to the NLRC over the claim when the employeremployee relationship has terminated or such relationship has not arisen at all. The reason is
obvious. In the second situation especially, the existence of an employer-employee

relationship is a matter which is not easily determinable from an ordinary inspection,

necessarily so, because the elements of such a relationship are not verifiable from a mere
ocular examination. The intricacies and implications of an employer-employee relationship
demand that the level of scrutiny should be far above the cursory and the mechanical. While
documents, particularly documents found in the employer?s office are the primary source
materials, what may prove decisive are factors related to the history of the employer?s
business operations, its current state as well as accepted contemporary practices in the
industry. More often than not, the question of employer-employee relationship becomes a
battle of evidence, the determination of which should be comprehensive and intensive and
therefore best left to the specialized quasi-judicial body that is the NLRC.
It can be assumed that the DOLE in the exercise of its visitorial and enforcement power
somehow has to make a determination of the existence of an employer-employee
relationship. Such prerogatival determination, however, cannot be coextensive with the
visitorial and enforcement power itself. Indeed, such determination is merely
preliminary, incidental and collateral to the DOLE?s primary function of enforcing labor
standards provisions. The determination of the existence of employer-employee
relationship is still primarily lodged with the NLRC. This is the meaning of the clause ?
in cases where the relationship of employer-employee still exists? in Art. 128 (b).
Thus, before the DOLE may exercise its powers under Article 128, two important questions
must be resolved: (1) Does the employer-employee relationship still exist, or alternatively, was
there ever an employer-employee relationship to speak of; and (2) Are there violations of the
Labor Code or of any labor law?
The existence of an employer-employee relationship is a statutory prerequisite to and a
limitation on the power of the Secretary of Labor, one which the legislative branch is
entitled to impose. The rationale underlying this limitation is to eliminate the prospect of
competing conclusions of the Secretary of Labor and the NLRC, on a matter fraught with
questions of fact and law, which is best resolved by the quasi-judicial body, which is the
NRLC, rather than an administrative official of the executive branch of the government. If the
Secretary of Labor proceeds to exercise his visitorial and enforcement powers absent the first
requisite, as the dissent proposes, his office confers jurisdiction on itself which it cannot
otherwise acquire.
Reading of Art. 128 of the Labor Code reveals that the Secretary of Labor or his authorized
representatives was granted visitorial and enforcement powers for the purpose of determining
violations of, and enforcing, the Labor Code and any labor law, wage order, or rules and
regulations issued pursuant thereto. Necessarily, the actual existence of an employeremployee relationship affects the complexion of the putative findings that the Secretary of
Labor may determine, since employees are entitled to a different set of rights under the Labor
Code from the employer as opposed to non-employees. Among these differentiated rights are
those accorded by the ?labor standards? provisions of the Labor Code, which the Secretary
of Labor is mandated to enforce. If there is no employer-employee relationship in the first
place, the duty of the employer to adhere to those labor standards with respect to the nonemployees is questionable.
At least a prima facie showing of such absence of relationship, as in this case, is needed to
preclude the DOLE from the exercise of its power. The Secretary of Labor would not have
been precluded from exercising the powers under Article 128 (b) over petitioner if another
person with better-grounded claim of employment than that which respondent had.

Respondent, especially if he were an employee, could have very well enjoined other
employees to complain with the DOLE, and, at the same time, petitioner could ill- afford to
disclaim an employment relationship with all of the people under its aegis.
The most important consideration for the allowance of the instant petition is the
opportunity for the Court not only to set the demarcation between the NLRC?s
jurisdiction and the DOLE?s prerogative but also the procedure when the case
involves the fundamental challenge on the DOLE?s prerogative based on lack of
employer-employee relationship. As exhaustively discussed here, the DOLE?s
prerogative hinges on the existence of employer-employee relationship, the issue is
which is at the very heart of this case. And the evidence clearly indicates private
respondent has never been petitioner?s employee.

EJR Crafts Corp., vs CA (2006)

Facts:
In 1997, private respondents filed a complaint for underpayment of wages, regular holiday
pay, overtime pay, non-payment of 13th month pay and service incentive leave pay against
petitioner before the Regional Office, NCR of the Department of Labor and Employment
(DOLE). Acting on the complaint, Regional Director issued an inspection authority to Senior
Labor Enforcement Officer.
On August 1997, an inspection was conducted on the premises of petitioner?s offices wherein
the following violations of labor standards law were discovered, to wit: non-presentation of
employment records (payrolls and daily time records); underpayment of wages, regular
holiday pay, and overtime pay; and non-payment of 13th month pay and service incentive
leave pay. On the same day, the Notice of Inspection Result was received by and explained to
the manager of petitioner corporation Mr. Jae Kwan Lee, with the corresponding directive that
necessary restitution be effected within five days from said receipt.
As no restitution was made, the Regional Office thereafter conducted summary investigations.
However, despite due notice, petitioner failed to appear for two consecutive scheduled
hearings. Petitioner failed to question the findings of the Labor Inspector received by and
explained to the corporation?s manager. Petitioner then filed a Motion for Reconsideration of
said Order arguing that the Regional Director has no jurisdiction over the case as private
respondents were allegedly no longer connected with petitioner corporation at the time of the
filing of the complaint and when the inspection was conducted, and that private respondents?
claims are within the exclusive and original jurisdiction of the Labor Arbiters.
Issue: WON the Regional Director has jurisdiction over the claims of the private respondents.
Held: Regional Director has jurisdiction to hear and decide the instant case.
The Court favors the respondents in the money claims against the petitioner company. It is
admitted that for the Regional Director to exercise the power to order compliance, or the socalled "enforcement power" under Article 128(b) of P.D. No. 442 as amended, it is
necessary that the employer-employee relationship still exists.

In support of its contention that it is the Labor Arbiter and not the Regional Director who has
jurisdiction over the claims of herein private respondents, petitioner contends that at the time
the complaint was filed, the private respondents were no longer its employees. Considering
thus that there still exists an employer- employee relationship between petitioner and private
respondents and that the case involves violations of labor standard provisions of the Labor
Code, we agree with the Undersecretary of Labor and the appellate court that the Regional
Director has jurisdiction to hear and decide the instant case in conformity with Article 128(b) of
the Labor Code which states:
Art. 128. Visitorial and Enforcement Power. ?(b) Notwithstanding the provisions of Articles 129
and 217 of this Code to the contrary, and in cases where the relationship of employeremployee still exists, the Secretary of Labor and Employment or his duly authorized
representatives shall have the power to issue compliance orders to give effect to the labor
standards provisions of this Code and other labor legislation based on the findings of labor
employment and enforcement officers or industrial safety engineers made in the course of
inspection. The Secretary or his duly authorized representatives shall issue writs of execution
to the appropriate authority for the enforcement of their orders, except in cases where the
employer contests the findings of the labor employment and enforcement officer and raises
issues supported by documentary proofs which were not considered in the course of
inspection.

EJR Crafts Corp., vs Court of Appeals (2006) G.R. 154101

Facts:
Sometime in 1997, private respondents filed a complaint for underpayment of wages, regular
holiday pay, overtime pay, nonpayment of 13th month pay and service incentive leave pay
against petitioner before the Regional Office, NCR of the DOLE. Acting on the complaint, an
inspection was conducted on the premises of petitioner?s offices on August 22, 1997 wherein
violations of labor standards law were discovered. Petitioner argued that the Regional
Director has no jurisdiction over the case as private respondents were allegedly no longer
connected with petitioner corporation at the time of the filing of the complaint and when the
inspection was conducted, and that private respondents? claims are within the exclusive and
original jurisdiction of the Labor Arbiters.
Issue: WON public respondent Regional Director has jurisdiction over the case.
Held: The Regional Director has jurisdiction over the case.
As found by both Undersecretary of Labor and the Court of Appeals, the said quitclaim and
release forms are unreliable and do not correspond to other documents on record which
would prove that private respondents were working for the petitioner up to August 1997.
Considering thus that there still exists an employer-employee relationship between petitioner
and private respondents and that the case involves violations of labor standard provisions of
the Labor Code, this Court rules with the Undersecretary of Labor and the appellate court that
the Regional Director has jurisdiction to hear and decide the instant case in conformity with
Article 128(b) of the Labor Code which states that: ?Notwithstanding the provisions of Articles

129 and 217 of this Code to the contrary, and in cases where the relationship of employeremployee still exists, the Secretary of Labor and Employment or his duly authorized
representatives shall have the power to issue compliance orders to give effect to the labor
standards provisions of this Code and other labor legislation based on the findings of labor
employment and enforcement officers or industrial safety engineers made in the course of
inspection. The Secretary or his duly authorized representatives shall issue writs of execution
to the appropriate authority for the enforcement of their orders, except in cases where the
employer contests the findings of the labor employment and enforcement officer and raises
issues supported by documentary proofs which were not considered in the course of
inspection.

Bay Haven v. Abuan

Facts:
This is a petition for certiorari on the decision of the CA, who denied their petition to annul the
resolution of theDOLE .Upon complaint of Florentino Abuan, one of herein respondents, the
DOLE, in the exercise of its visitorial,inspection and enforcement powers, through its Regional
Director for the National Capital Region (NCR), issued anOrder commanding petitioners to
pay respondents a total of P638,187.15 corresponding to the latter's claims forunderpayment
as petitioners' workers. The Regional Director based his Order on the results of the
inspectionconducted on April 23, 1997 by one of its inspectors who found that petitioner New Bay
Haven Restaurant,committed the following violations under the labor standards law which are
Underpayment of minimum wage,Underpayment of thirteenth month pay, Underpayment of regular
holiday pay, Underpayment of special holidaypay, Non-payment of night shift differential pay
and Non-registration of the firm under Rule of Occupational Safetyand Health Standards. The
petitioners filed with the DOLE-NCR Regional Office a Motion for Reconsideration,alleging
that the office had no jurisdiction over the case and that the order was issued in denial
of petitioners' rightto due process, and the jurisdiction rest on the NLRC. they added that their
right to due process was also deniedbecause the order was issued without them being
furnished copies of the complaint and the inspection report andwithout being notified of the
hearings held in the case. The DOLE-NCR Assistant Regional Director, acting for theRegional
Director, issued an Order granting petitioners' motion for reconsideration as he found merit
inpetitioners' allegation of absence of due process in the issuance of the first order. The order,
however, stated thatthe DOLE had jurisdiction over the case, pursuant to the Labor Code.
The next hearing was set wherein thepetitioners showed payroll sheets and waivers of
quitclaims which were signed by the respondents. However, thelatter denied of the amount
stated in the payroll as they contend they receive lesser that what is stated there andalso they
were forced to sign the quitclaims. The DOLE issues an order holding the petitioners liable to
therespondents. The case was elevated to the CA. The CA ruled in dismissing the petition,
ruling that the DOLE hadjurisdiction over the labor standards case and that petitioners did not
present enough evidence to refute theclaims made by respondents.
Issues:

1) whether the DOLE Secretary and her authorized representatives have jurisdiction to
impose the monetaryliability against petitioners; and
2) whether the DOLE-NCR, as upheld by the DOLE Secretary and the CA committed an error in
awarding the claimsof respondents.
Ruling:
1. The DOLE Secretary and her authorized representatives such as the DOLE-NCR Regional Director,
havejurisdiction to enforce compliance with labor standards laws under the broad visitorial and
enforcementpowers. The Court has held that the visitorial and enforcement powers of the
Secretary, exercisedthrough his representatives, encompass compliance with all labor
standards laws and other laborlegislation,
regardless
of the amount of the claims filed by workers.
2.
The mere disagreement by the employer with the findings of the labor officer, or the simple act
of presenting controverting evidence, does not automatically divest the DOLE Secretary
or any of hisauthorized representatives such as the regional directors, of jurisdiction
to exercise their visitorial andenforcement powers under the Labor Code. Thus, the key
requirement for the Regional Director and theDOLE Secretary to be divested of jurisdiction is
that the evidentiary matters are not verifiable in thecourse of inspection. Where the evidence
presented was verifiable in the normal course of inspection,even if presented belatedly by the
employer, the Regional Director, and later the DOLE Secretary, may stillexamine them; and
these officers are not divested of jurisdiction to decide the case
In the present case, petitioners' pieces of evidence of the alleged contract of lease, payroll
sheets, andquitclaims were all verifiable in the normal course of inspection and, granting that
they were notexamined by the labor inspector, they have nevertheless been thoroughly
examined by the RegionalDirector and the DOLE Secretary. For these reasons, the exclusion
clause of Art. 128(b) does not apply.

St. Joseph College vs. SJC Workers, GR 155609, Jan 17, 2005
Petitioner is a non-stock, non-profit Catholic educational institution while respondent is a
legitimate labor organization which is currently the official bargaining representative of all
employees of petitioner except the faculty and consultants of the Graduate School,
managerial employees and those who occupy confidential positions. Respondent has an
existing CBA with petitioner for the period from June 1, 1999 to May 31, 2004. For the SY
2000-2001, petitioner increased its tuition fees for all its departments. Based on petitioners
computation, the incremental proceeds from the tuition fees increase for SY 2000-2001 is
P1,560,942.74, 85% of which is equivalent to P1,326,801.33. Consequently, respondent
averred that 85% of P4,906,307.58, which is P4,170,360.59 should have been released to its
members as provided for in their CBA effective June 1, 2000.
ISSUE:

How should the 70%-30% tuition fee increase be allocated?

RULING:
The law allows an increase in school tuition fees on the condition that 70 percent of the
increase shall go to the payment of personnel benefits. Plainly unsupported by the law or
jurisprudence is petitioners contention that the payment of such benefits should be based not
only on the rate of tuition fee increases, but also on other factors like the decrease in the
number of enrollees; the number of those exempt from paying the fees, like scholars; the
number of dropouts who, as such, do not pay the whole fees; and the bad debts incurred by
the school. The financial dilemma of petitioner may deserve sympathy and support, but its
remedy lies not in the judiciary but in the lawmaking body.
The law plainly states that 70 percent of the tuition fee increase shall be allotted for the
teaching and the nonteaching personnel; and that the payment of other costs of operation,
together with the improvement of the schools infrastructure, shall be taken only from the
remaining 30 percent. The law does not speak, directly or indirectly, of the contention of
petitioner that in the event that its total tuition income is lesser than that in the previous year,
then the whole amount of the increase in tuition fee, and not merely up to 30 percent as
provided by law, may be used for the improvement and modernization of infrastructure and for
the payment of other costs of operation.

URBANES VS. SEC OF LABORFACTS:

Petitioner Placido O. Urbanes, Jr., doing business under the name and style of
CatalinaSecurity Agency, entered into an agreement
1
to provide security services to respondent SocialSecurity System (SSS).petitioner, by letter of
May 16, 1994, requested the SSS for the upward adjustment of their contract rate in view of
Wage Order No. NCR-03 which was issued by the Regional TripartiteWages and Productivity
Board-NCR pursuant to Republic Act 6727 otherwise known as theWage Rationalization
ActOn June 24, 1994, petitioner pulled out his agencys services from the premises of the
SSS andanother security agency, Jaguar, took over.On June 29, 1994, petitioner filed a
complaint with the DOLE-NCR against the SSS seeking theimplementation of Wage Order
No. NCR-03.In its position paper ,
7
the SSS prayed for the dismissal of the complaint on the ground thatpetitioner is not the real
party in interest and has no legal capacity to file the same. In any event,it argued that if it had
any obligation, it was to the security guards.The SSS moved to reconsider the September 16,
1994 Order of the Regional Director, prayingthat the computation be revised.By Order of
December 9, 1994, the Regional Director modified his September 16, 1994 Order by reducing
the amount payable by the SSS to petitioner.The Secretary of Labor, by Order of June 22,
1995, set aside the order of the Regional Director and remanded the records of the case "for
recomputation of the wage differentials using P5,281.00 as the basis of the wage adjustment."
And the Secretary held petitioners securityagency "JOINTLY AND SEVERALLY liable
for wage differentials, the amount of which shouldbe paid DIRECTLY to the security guards
concerned."Petitioners Motion for Reconsideration of the DOLE Secretarys Order of June

22, 1995 havingbeen denied by Order of October 10, 1995, the present petition was filed,
petitioner contendingthat the DOLE Secretary committed grave abuse of discretionPetitioner
thus contends that as the appeal of SSS was filed with the wrong forum, it shouldhave been
dismissed.The SSS, on the other hand, contends that Article 128, not Article 129, is
applicable to the case.Article 128 provides:
ISSUE:
Whether or not NLRC has jurisdiction over the said case.
HELD
We agree with the respondent that the RTC has jurisdiction over the subject matter of
thepresent case. It is well settled in law and jurisprudence that where no employeremployeerelationship exists between the parties and no issue is involved which may be
resolved byreference to the Labor Code, other labor statutes or any collective bargaining
agreement, it isthe Regional Trial Court that has jurisdiction. In its complaint, private
respondent is not seekingany relief under the Labor Code but seeks payment of a sum of
money and damages onaccount of petitioner's alleged breach of its obligation under their
Guard Service Contract. Theaction is within the realm of civil law hence jurisdiction over the
case belongs to the regular courts. While the resolution of the issue involves the application of
labor laws, reference to thelabor code was only for the determination of the solidary liability of
the petitioner to therespondent where no employer-employee relation exists.
Bisig Manggagawa sa Tryco vs NLRC (2008) G.R. 151309 Facts:
Tryco and the petitioners signed separate Memoranda of Agreement (MOA), providing for a
compressed workweek schedule to be implemented in the company effective May 20, 1996.
The MOA was entered into pursuant to Department of Labor and Employment Department
Order (D.O.) No. 21, Series of 1990, Guidelines on the Implementation of Compressed
Workweek. As provided in the MOA, 8:00a.m. to 6:12p.m., from Monday to Friday, shall be
considered as the regular working hours, and no overtime pay shall be due and payable to
the employee for work rendered during those hours. The MOA specifically stated that the
employee waives the right to overtime pay for work rendered after 5p.m. until 6:12p.m. from
Monday to Friday considering that the compressed workweek schedule is adopted in lieu of
the regular workweek schedule which also consists of 46 hours. However, should an
employee be permitted or required to work beyond 6:12p.m., such employee shall be entitled
to overtime pay.
Tryco informed the Bureau of Working Conditions of the Department of Labor and
Employment of the implementation of a compressed workweek in the company. In January
1997, BMT and Tryco negotiated for the renewal of their collective bargaining agreement
(CBA) but failed to arrive at a new agreement.
Issue: WON the MOA providing for compressed workweek is unenforceable as it is contrary
to law.
Held: The MOA is enforceable and binding against the petitioner.
Where it is shown that the person making the waiver did so voluntarily, with full understanding
of what he was doing, and the consideration for the quitclaim is credible and reasonable, the
transaction must be recognized as a valid and binding undertaking. Notably, the MOA
complied with the following conditions set by the DOLE, under D.O. No. 21, to protect the
interest of the employees in the implementation of a compressed workweek scheme:
1. The employees voluntarily agree to work more than eight (8) hours a day the total in a

week of which shall not exceed their normal weekly hours of work prior to adoption of
the compressed workweek arrangement.
2. There will not be any diminution whatsoever in the weekly or monthly take-home pay
and fringe benefits of the employees.
3. If an employee is permitted or required to work in excess of his normal weekly hours of
work prior to the adoption of the compressed workweek scheme, all such excess hours
shall be considered overtime work and shall be compensated in accordance with the
provisions of the Labor Code or applicable CBA.
4. Appropriate waivers with respect to overtime premium pay for work performed in
excess of eight (8) hours a day may be devised by the parties to the agreement.
5. The effectivity and implementation of the new working time arrangement shall be by
agreement of the parties.
Considering that the MOA clearly states that the employee waives the payment of overtime
pay in exchange of a five-day workweek, there is no room for interpretation and its terms
should be implemented as they are written.

Union of Filipro Employees (UFE) vs. Benigno Vivar

[205 SCRA 203 (1992)]
Facts:
On November 8, 1985, respondent Filipro, Inc. (now Nestle Philippines, Inc.) filed with the
National Labor Relations Commission a petition for declaratory relief seeking a ruling on its
rights and obligations respecting claims of its monthly paid employees for holiday pay.
Both Filipro and the Union of Filipro Employees (UFE) agreed to submit the case for voluntary
arbitration and appointed respondent Benigno Vivar, Jr. as voluntary arbitrator. Arbitrator Vivar
rendered a decision directing Filipro to pay its monthly paid employees holiday pay pursuant
to Article 94 of the Code, subject only to the exclusions and limitations specified in Article 82
and such other legal restrictions as are provided for in the Code.
However,the respondent arbitrator refused to take cognizance of the case reasoning that he
had no more jurisdiction to continue as arbitrator because he had resigned from service
effective May 1, 1986.
Issue:
Whether or not sales personnel are excluded in the payment of holiday pay.
SC Ruling:
The Court ruled that field personnel are not entitled to such pay. Under Article 82, field
personnel are not entitled to holiday pay. Said article defines field personnel as "nonagricultural employees who regularly perform their duties away from the principal place of
business or branch office of the employer and whose actual hours of work in the field cannot
be determined with reasonable certainty."

The controversy centers on the interpretation of the clause "whose actual hours of work in the
field cannot be determined with reasonable certainty." It is undisputed that these sales
personnel start their field work at 8:00 a.m. after having reported to the office and come back
to the office at 4:00 p.m. or 4:30 p.m. if they are Makati-based.
The petitioner maintains that the period between 8:00 a.m. to 4:00 or 4:30 p.m. comprises the
sales personnel's working hours which can be determined with reasonable certainty.
The Court does not agree. The law requires that the actual hours of work in the field be
reasonably ascertained. The company has no way of determining whether or not these sales
personnel, even if they report to the office before 8:00 a.m. prior to field work and come back
at 4:30 p.m., really spend the hours in between in actual field work.
The Court concurs with the arbitrator when it disposed that the requirement for the salesmen
and other similarly situated employees to report for work at the office at 8:00 a.m. and return
at 4:00 or 4:30 p.m. is not within the realm of work in the field as defined in the Code but an
exercise of purely management prerogative of providing administrative control over such
personnel. This does not in any manner provide a reasonable level of determination on the
actual field work of the employees which can be reasonably ascertained. Actual field work
begins after 8:00 a.m. when the sales personnel follow their field itinerary, and ends
immediately before 4:00 or 4:30 p.m. when they report back to their office. The period
between 8:00 a.m. and 4:00 or 4:30 p.m. comprises their hours of work in the field, the extent
or scope and result of which are subject to their individual capacity and industry and which
'cannot be determined with reasonable certainty.' This is the reason why effective supervision
over field work of salesmen and medical representatives, truck drivers and merchandisers is
practically a physical impossibility. Consequently, they are excluded from the ten holidays with
pay.
Moreover, the requirement that "actual hours of work in the field cannot be determined with
reasonable certainty" must be read in conjunction with Rule IV, Book III of the Implementing
Rules which provides:
"Rule IV Holidays with Pay. SECTION 1. Coverage. This rule shall apply to all employees
except: (e) Field personnel and other employees whose time and performance is
unsupervised by the employer
The Court finds that the rule did not add another element to the Labor Code definition of field
personnel. The clause "whose time and performance is unsupervised by the employer" did
not amplify but merely interpreted and expounded the clause "whose actual hours of work in
the field cannot be determined with reasonable certainty." The former clause is still within the
scope and purview of Article 82 which defines field personnel. Hence, in deciding whether or
not an employee's actual working hours in the field can be determined with reasonable
certainty, query must be made as to whether or not such employee's time and performance is
constantly supervised by the employer.
The petitioner claims that the fact that these sales personnel are given incentive bonus every
quarter based on their performance is proof that their actual hours of work in the field can be
determined with reasonable certainty. The Court thinks otherwise.
The criteria for granting incentive bonus are:
(1) attaining or exceeding sales volume based on sales target;
(2) good collection performance;
(3) proper compliance with good market hygiene;
(4) good merchandising work;
(5) minimal market returns and
(6) proper truck maintenance.

The above criteria indicate that these sales personnel are given incentive bonuses precisely
because of the difficulty in measuring their actual hours of field work. These employees are
evaluated by the result of their work and not by the actual hours of field work which are hardly
susceptible to determination.
In San Miguel Brewery, Inc. v. Democratic Labor Organization, the Court had occasion to
discuss the nature of the job of a salesman. It states that :
"The reasons for excluding an outside salesman are fairly apparent. Such a salesman, to a
greater extent, works individually. There are no restrictions respecting the time he shall work
and he can earn as much or as little, within the range of his ability, as his ambition dictates. In
lieu of overtime he ordinarily receives commissions as extra compensation. He works away
from his employer's place of business, is not subject to the personal supervision of his
employer, and his employer has no way of knowing the number of hours he works per day."

INTERPHIL LABORATORIES EMPLOYEES UNION FFW V. INTERPHILLABORATORIES372

SCRA 658KAPUNAN, J.
FACTS
1.Interphil Laboratories Employees Union-FFW is the sole and exclusive
bargainingagent of the rank-and file employees of Interphil Laboratories, Inc., a
companyengaged in the business of manufacturing and packaging pharmaceutical products.
2.They had a Collective Bargaining Agreement (CBA) effective from August 1, 1990
toJuly 31, 1993.
3.Prior to the expiration of the CBA, Allesandro Salazar, the vice-president of the
HRDepartment and Nestor Ocampo, the union president and Hernando Clemente, aunion
director had a meeting. The representatives of the union were asking to makethe new CBA
effective for 2 yeas.
4.Salazar informed them that it was still premature to discuss the new CBA.
5.The following day, all the rank-and-file employees refused to follow their regular
two-shift work schedule 6:00am to 6:00pm and from 6:00pm to 6:00am.
6.At 2:00 pm and 2:00 am respectively, the employees stopped working
withoutsealing the containers and securing the raw materials they were working on.
7.Enrico Gonzales, a union director, told Salazar that the employees would only
returnto their normal work schedule if the company would agree to their demands as to
theeffectivity and duration of the new CBA.
8.In addition, the employees started to engage in a work slowdown campaign
duringthe time they were working thus substantially delaying the production of thecompany.
9.Respondent company filed with the NLRC to declare illegal the petitioner
unionsovertime boycott and work slowdown which amounted to illegal strike.
10.The respondent company filed with the NCMB an urgent request for mediation.However
the parties failed to arrive at an agreement.
11.Petitioner union then filed with NCMB a notice of strike citing unfair labor practiceallegedly
committed by respondent company.

12.In the interim, the case before NLRC continued. The labor arbiter then found that
theovertime boycott and the work slowdown as illegal strike.
13.Petitioner union contended that according to the provisions of their CBA on workinghours
clearly state that the normal working hours were from 7:30 am to 4:30pm. Thelabor arbiter
should not have admitted other evidence than that stated in the CBA.
ISSUE
Whether or not the working hours of the petitioner is only from 7:30 am to 4:30 pm.
HELD NO.
The parties in the CBA stipulated that: the schedule of shift work shall be
maintained;however the company may change the prevailing work time at its discretion,
should changebe necessary in the operations of the Company. All employees shall observe
such rules ashave been laid down by the company for the purpose of effecting control over
workinghours.It is evident from the foregoing provisions that the working hours may be
changed, at thediscretion of the company, should such change be necessary for its
operations and that theemployees shall observe such rules as have been laid down by the
company. The companyhad to adopt a continuous 24-hour work daily schedule by reason of
the nature of itsbusiness and the demands of its clients. It was established that the
employees adhered tothe said work schedule since 1988. The employees are deemed to
have waived the eight-hour schedule since they followed, without any question or complain,
the two shift schedulewhile their CBA was still in force and even prior thereto. As the
employees assented bypractice to this arrangement, they cannot now be heard to claim that
the overtime boycott is justified because they were not obliged to work beyond eight hours.

Odango v. NLRC
Chester Cabalza recommends his visitors to please read the original & full text of the case
cited. Xie xie!
Odango vs NLRC
G.R. No. 147420
June 10, 2004
Facts:
Petitioners are monthly-paid employees of ANTECO whose workdays are from Monday to
Friday and half of Saturday. After a routine inspection, the Regional Branch of the Department
of Labor and Employment ("DOLE") found ANTECO liable for underpayment of the monthly
salaries of its employees.
On 10 September 1989, the DOLE directed ANTECO to pay its employees wage differentials
amounting to P1,427,412.75. ANTECO failed to pay.

On 29 November 1996, the Labor Arbiter rendered a Decision in favor of petitioners granting
them wage differentials amounting to P1,017,507.73 and attorneys fees of 10%. Florentino
Tongson, whose case the Labor Arbiter dismissed, was the sole exception.
The Labor Arbiters Ruling
The Labor Arbiter reasoned that ANTECO failed to refute petitioners argument that monthlypaid employees are considered paid for all the days in a month under Section 2, Rule IV of
Book 3 of the Implementing Rules of the Labor Code ("Section 2").5 Petitioners claim that this
includes not only the 10 legal holidays, but also their un-worked half of Saturdays and all of
Sundays.
The Labor Arbiter gave credence to petitioners arguments on the computation of their wages
based on the 304 divisor used by ANTECO in converting the leave credits of its employees.
The Labor Arbiter agreed with petitioners that ANTECOs use of 304 as divisor is an
admission that it is paying its employees for only 304 days a year instead of the 365 days as
specified in Section 2. The Labor Arbiter concluded that ANTECO owed its employees the
wages for 61 days, the difference between 365 and 304, for every year.
The NLRCs Ruling
On appeal, the NLRC reversed the Labor Arbiters ruling that ANTECO underpaid its
employees. The NLRC pointed out that the Labor Arbiters own computation showed that the
daily wage rates of ANTECOs employees were above the minimum daily wage of P124.The
lowest paid employee of ANTECO was then receiving a monthly wage of P3,788.
The NLRC applied the formula in Section 2 [(Daily Wage Rate = (Wage x 12)/365)] to the
monthly wage of P3,788 to arrive at a daily wage rate of P124.54, an amount clearly above
the minimum wage.
The NLRC noted that while the reasoning in the body of the Labor Arbiters decision
supported the view that ANTECO did not underpay, the conclusion arrived at was the
opposite. Finally, the NLRC ruled that the use of 304 as a divisor in converting leave credits is
more favorable to the employees since a lower divisor yields a higher rate of pay.
The Ruling of the Court of Appeals
The Court of Appeals held that the petition was insufficient in form and substance since it
"does not allege the essential requirements of the extra-ordinary special action of certiorari."
The Court of Appeals faulted petitioners for failing to recite "where and in what specific
instance public respondent abused its discretion." The appellate court characterized the
allegations in the petition as "sweeping" and clearly falling short of the requirement of Section
3, Rule 46 of the Rules of Court.
Issues:
Whether the court is correct in dismissing the case and whether the petitioners are entitled to
their money claim?

Held:
We agree with the Court of Appeals that nowhere in the petition is there any acceptable
demonstration that the NLRC acted either with grave abuse of discretion or without or in
excess of its jurisdiction. Petitioners merely stated generalizations and conclusions of law.
Rather than discussing how the NLRC acted capriciously, petitioners resorted to a litany of
generalizations.
Petitioners claim that the Court of Appeals gravely erred in denying their claim for wage
differentials. Petitioners base their claim on Section 2, Rule IV of Book III of the Omnibus
Rules Implementing the Labor Code. Petitioners argue that under this provision monthly-paid
employees are considered paid for all days of the month including un-worked days.
Petitioners assert that they should be paid for all the 365days in a year. They argue that since
in the computation of leave credits, ANTECO uses a divisor of 304, ANTECO is not paying
them 61 days every year.
Thus, petitioners claim is without basis.