Page | 1
G.R. No. L-9265 April 29, 1957

Luzon Stevedoring Co., Inc., a public service operator by the Public
Service Commission, gives its employees 3 free meals 3 free meals
every day and about 20 minutes rest after each mealtime; employees
worked from 6:00 am. to 6:00 p.m. every day including Sundays and
holidays, and for work performed in excess of 8 hours, the officers,
patrons and radio operators were given overtime pay in the amount of
P4 each and P2 each for the rest of the crew up to March, 1947, and
after said date, these payments were increased to P5 and P2.50,
respectively until July 1948. When the tugboats underwent repairs,
their personnel worked only 8 hours a day excluding Sundays and

Luzon Marine Department Union filed a petition with the Court of
Industrial Relations containing several demands against herein
petitioner Luzon Stevedoring Co., Inc., among which were the petition
for full recognition of the right of COLLECTIVE bargaining, close shop
and check off. However, on July 18, 1948, while the case was still
pending with the CIR, said labor union declared a strike which was
ruled down as illegal by the Supreme Court in another case. In view of
said ruling, the Union filed a "Constancia
" with the Court of Industrial
Relations praying, among others, that the work performed in excess of
eight (8) hours be paid an overtime pay of 50 per cent the regular rate
of pay, and that work performed on Sundays and legal holidays be paid
double the regular rate of pay.

CIR’s decision: Although there was an effort on the part of claimants
to show that some had worked beyond 6:00 p.m., the evidence was
uncertain and indefinite and that said employees were only entitled to
receive overtime pay for work rendered in excess of 8 hours on
ordinary days including Sundays and legal holidays. However, the
respondent company has proved to the satisfaction of the Court that it
has paid its employees for such overtime work. It is, therefore, only a
matter of computation whether such overtime pay by the respondent
for overtime services rendered covers the actual overtime work
performed by the employees concerned. It further held that, by the
nature of its business and as defined by law is considered a public
service operator it is exempt from paying additional remuneration or
compensation for work performed on Sundays and legal holidays.

Motion for Reconsideration: (1) Luzon Marine Department Union
prayed that the decision be modified so as to declare and rule that the
members of the Union who had rendered services from 6:00 a.m. to
6:00 p.m. were entitled to 4 hours' overtime pay; that allotted to the
taking of their meals should not be deducted from the 4 hours of
overtime rendered by said employees, that the amounts of P3 and P2
set aside for the daily meals of the employees be considered as part of
their actual compensation in determining the amount due to said
employees separated from the service without just cause be paid their
unearned wages and salaries from the date of their separation up to
the time the decision in the other case became final; and for such other
relief as may be just and equitable in the premises.

(2) Luzon Stevedoring Co., Inc. also sought for the reconsideration of
the decision only in so far as it interpreted that the period during which


Under the Eight-Hour Labor Law, the legal working day for any
person employed by another shall be of not more than eight hours
daily. When the work is not continuous, the time during which the
laborer is not working AND CAN LEAVE HIS WORKING PLACE and can
rest completely, shall not be counted.

For the purposes of this case, We do not need to set for seamen a
criterion different from that applied to laborers on land, for under
the provisions said law, the only thing to be done is to determine the
meaning and scope of the term "working place" used therein.

A laborer need not leave the premises of the factory, shop
or boat in order that his period of rest shall not be
counted, it being enough that he "cease to work", may
rest completely and leave or may leave at his will the spot
where he actually stays while working, to go somewhere
else, whether within or outside the premises of said
factory, shop or boat. If these requisites are complied
with, the period of such rest shall not be counted.


In Manila Terminal Co. vs. Court of Industrial Relations et al., the
Court held:

The principles of estoppel and laches cannot be, invoked against
employees or laborers in an action for the recovery of compensation
for past overtime work. In the first place, it would be contrary to the
spirit of the Eight-Hour Labor Law, under which. as already seen, the
laborers cannot waive their right to extra compensation. In the
second place, the law principally obligates the employer to observe
it, so much so that it punishes the employer for its violation and
leaves the employee free and blameless. In the third place, the
employee or laborer is in such a disadvantageous position as to be
naturally reluctant or even apprehensive in asserting a claim which
may cause the employer to devise a way for exercising his right to
terminate the employment.

Moreover, if the principle of estoppel and laches is to be applied, it
would bring about a situation whereby the employee or laborer, can
not expressly renounce the right to extra compensation under the
Eight-Hour Labor Law, may be compelled to accomplish the same
thing by mere silence or lapse of time, thereby frustrating the


Page | 2
a seaman is aboard a tugboat shall be considered as "working time"
for the purpose of the Eight-Hour-Labor Law.

purpose of the law by indirection.

It is of common occurrence that a workingman has already rendered
services in excess of the statutory period of 8 hours for some time
before he can be led or he can muster enough courage to confront
his employer with a demand for payment thereof. Fear of possible
unemployment sometimes is a very strong factor that gags the man
from asserting his right under the law and it may take him months
or years before he could be made to present a claim against his
employer. To allow the workingman to be compensated only from
the date of the filing of the petition with the court would be to
penalize him for his acquiescence or silence.

It is not just and humane that he should be deprived of what is
lawfully his under the law, for the true intendent of Commonwealth
Act No. 444 is to compensate the worker for services rendered
beyond the statutory period and this should be made to retroact to
the date when such services were actually performed.

G.R. No. L-119205 November 30, 1962

At the National Development Co., a government-owned and controlled
corporation, there were four shifts of work: (1) 8AM-4PM; (2) 6AM-2PM;
(3) 2PM-10PM; (4) 10PM-6AM. In each shift, there is a 1-hour mealtime
period: from (1) 11 a.m. to 12 noon for those working between 6 a.m.
and 2 p.m. and from (2) 7 p.m. to 8 p.m. for those working between 2
p.m. and 10 p.m.

Although there was a 1-hour mealtime, petitioner credited the workers
with 8 hours for each shift and paid them for the same number of
hours. However, since 1953, whenever workers in one shift were
required to continue working until the next shift, petitioner instead of
crediting them with 8 hours of overtime work, has been paying them
for 6 hours only, asserting that the 2 hours corresponding to the
mealtime periods should not be included in computing compensation.
On the other hand, respondent National Textile Workers Union whose
members are employed at the NDC, maintained the opposite view and
asked the Court of Industrial Relations to order the payment of
additional overtime pay.

CIR held that mealtime should be counted in the determination of overtime.
Petitioner filed an MR but the same was dismissed by the CIR en banc.
Petitioner appealed to the SC contending, first, that the CIR has no
jurisdiction over claims for overtime compensation and, secondary that the
CIR did not make "a correct appraisal of the facts, in the light of the
evidence" in holding that mealtime periods should be included in overtime
work because workers could not leave their places of work and rest
completely during those hours.


Petitioner anchors the petition on this law saying, to wit:

The legal working day for any person employed by another shall be
of not more than eight hours daily.When the work is not continuous,
the time during which the laborer is not working and can leave his
working place and can rest completely shall not be counted. (Sec. 1,
Com. Act No. 444, as amended)

Under the law, the idle time that an employee may spend for resting
and during which he may leave the spot or place of work though not
the premises of his employer, is not counted as working time only
where the work is broken or is not continuous. The determination as
to whether work is continuous or not is mainly one of fact which the
SC shall not review as long as the same is supported by evidence.

No general rule can be laid down is to what constitutes compensable
work, rather the question is one of fact depending upon particular
circumstances. In this case, the CIR's finding that work in the
petitioner company was continuous and did not permit employees
and laborers to rest completely is not without basis in evidence. CIR
correctly concluded that work in petitioner company was continuous
and therefore the mealtime breaks should be counted as working
time for purposes of overtime compensation.
Petitioner gives an eight-hour credit to its employees who work a
single shift say from 6 a.m. to 2 p.m. There is no reason why it
cannot credit them sixteen hours should they work in two shifts.

Page | 3

G.R. No.119205 April 15, 1998

Sime Darby Pilipinas, Inc., (Sime), 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.

Sime 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:

1. 7:45 A.M. – 4:45 P.M. (Monday to Friday); 7:45 A.M. – 11:45
P.M. (Saturday).
2. Coffee break time will be ten minutes only anytime between:
9:30 A.M. –10:30 A.M. and 2:30 P.M. –3:30 P.M.
3. Lunch break will be between: 12:00 NN –1:00 P.M. (Monday to
ALU-TUCP 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.

However, 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. The Labor Arbiter further held that the factory workers
would be justly enriched if they continued to be paid during their lunch
break even if they were no longer “on call” or required to work during
the break.

National Labor Relations Commission (NLRC): 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

Office of the Solicitor General: not discriminatory of the union members
nor did it constitute unfair labor practice on the part of petitioner.


NO. 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.

Hence, it cannot be said that the new scheme adopted by
management prejudices the right of private respondent to self-


Page | 4
G.R. No.78210 February 28, 1989

This case stemmed from a complaint filed on April 9, 1984 against
private respondent Stanfilco for assembly time, moral damages and
attorney’s fees, with the aforementioned Regional Arbitration Branch
No. XI, Davao City.

This is a petition for review on certiorari of the decision of the National
Labor Relations Commission dated December 12, 1986 in NLRC Case No.
2327 MC-XI-84 entitled Teofilo Arica et al. vs. Standard (Phil.) Fruits
Corporation (STANFILCO) which affirmed the decision of Labor Arbiter
Pedro C. Ramos, NLRC, Special Task Force, Regional Arbitration Branch
No. XI, Davao City dismissing the claim of petitioners.

Petitioners contend that the preliminary activities as workers of
respondents STANFILCO in the assembly area is compensable as
working time (from 5:30 to 6:00 o’clock in the morning) since these
preliminary activities are necessarily and primarily for private
respondent’s benefit.

These preliminary activities of the workers are as follows:

(a) First there is the roll call. This is followed by getting their
individual work assignments from the foreman.
(b) Thereafter, they are individually required to accomplish the
Laborer’s Daily Accomplishment Report during which they are
often made to explain about their reported accomplishment the
following day.
(c) Then they go to the stockroom to get the working materials,
tools and equipment.
(d) Lastly, they travel to the field bringing with them their tools,
equipment and materials.

All these activities take 30 minutes to accomplish (Rollo, Petition, p. 11).
Contrary to this contention, respondent avers that the instant complaint
is not new, the very same claim having been brought against herein
respondent by the same group of rank and file employees in the case
of Associated Labor Union and Standard Fruit Corporation, NLRC Case
No. 26-LS-XI-76 which was filed way back April 27, 1976 when ALU was
the bargaining agent of respondent’s rank and file workers. The said
case involved a claim for “waiting time”, as the complainants
purportedly were required to assemble at a designated area at least 30
minutes prior to the start of their scheduled working hours “to
ascertain the work force available for the day by means of a roll call,
for the purpose of assignment or reassignment of employees to such
areas in the plantation where they are most needed.” (Rollo, pp. 64-65)


NO, it is not compensable. May 12, 1978 in the aforecited case
(Associated Labor Union vs. Standard (Phil.) Fruit Corporation, NLRC
Case No. 26-LS-XI-76) where significant findings of facts and
conclusions had already been made on the matter.

The Minister of Labor held:

“The thirty (30)-minute assembly time long practiced and
institutionalized by mutual consent of the parties under Article IV,
Section 3, of the Collective Bargaining Agreement cannot be
considered as ‘waiting time’ within the purview of Section 5, Rule I,
Book III of the Rules and Regulations Implementing the Labor Code.
x x x

“Furthermore, the thirty (30)-minute assembly is a deeply-rooted,
routinary practice of the employees, and the proceedings attendant
thereto are not infected with complexities as to deprive the workers
the time to attend to other personal pursuits. They are not new
employees as to require the company to deliver long briefings
regarding their respective work assignments. Their houses are
situated right on the area where the farms are located, such that
after the roll call, which does not necessarily require the personal
presence, they can go back to their houses to attend to some chores.
In short, they are not subject to the absolute control of the company
during this period, otherwise, their failure to report in the assembly
time would justify the company to impose disciplinary measures. The
CBA does not contain any provision to this effect; the record is also
bare of any proof on this point. This, therefore, demonstrates the
indubitable fact that the thirty (30)-minute assembly time was not
primarily intended for the interests of the employer, but ultimately
for the employees to indicate their availability or non-availability
for work during every working day.” (Annex “E”, Rollo, p. 57).

Accordingly, the issues are reduced to the sole question as to
whether public respondent National Labor Relations Commission
committed a grave abuse of discretion in its resolution of December
17, 1986.

The facts on which this decision was predicated continue to be the
facts of the case in this questioned resolution of the National Labor
Relations Commission.

It is clear that herein petitioners are merely reiterating the very
same claim which they filed through the ALU and which records show
had already long been considered terminated and closed by this
Court in G.R. No. L-48510. Therefore, the NLRC cannot be faulted for
ruling that petitioners’ claim is already barred by res judicata.

Be that as it may, petitioners’ claim that there was a change in the
factual scenario which are “substantial changes in the facts” makes
respondent firm now liable for the same claim they earlier filed
against respondent which was dismissed. It is thus axiomatic that
the non-compensability of the claim having been earlier established,
constitute the controlling legal rule or decision between the parties
and remains to be the law of the case making this petition without


Page | 5
G.R. No.L-63122

Petitioner filed the following complaints against the University of Pangasinan
(University for brevity) before the Arbitration Branch of the NLRC in Dagupan

1. October 14, 1980: for nonpayment of benefits under P.D. No.
1713 and emergency cost of living allowance (ecola) to part-time
teachers, and for prompt and accurate computation of benefits
under P.D. No. 451 and the payment of ecolas;

2. November 7, 1980: for nonpayment of all ecolas to
instructors from October 18-31, 1980;

3. November 20, 1980: for nonpayment of ecolas under P.D. Nos.
525, 1123, 1614, 1634, 1678 and 1713 for November 1-15, 1980,
and extra loads during typhoons "Nitang" and "Osang" on July 21
and 25, 1980, respectively;

4. April 13, 1981: for violation of P.D. No. 1751 and nonpayment of
extra loads on February 12-13, 1980 (Anniversary celebration);

5. April 27, 1981: for nonpayment of all ecolas for April 1-15, 1981 to
faculty members who were also members of the union;

6. May 21, 1981: for violation of Wage Order No. 1 and delayed
payment of salaries; and

7. June 17, 1981: for nonpayment of salary differentials for summer
under P.D. No. 451.

The Regional Director in San Fernando, La Union certified six (6) of these
complaints to Labor Arbiter Pedro Fernandez of the Dagupan City District Office
of the then Ministry of Labor and Employment for compulsory arbitration. 2
According to the petitioner, it was made to understand by Fernandez that the
seventh complaint should also be discussed in its position paper. Accordingly,
petitioner filed a position paper discussing the merits of all the seven
complaints. On the other hand, the University limited its discussion to only four:
numbers 4, 5, 6 and 7.

On the alleged nonpayment of extra loads handled by the employees on
February 12 and 13, 1981 when classes were suspended, Tumang stated that
Consuelo Abad, the petitioner's president, had no cause to complain because
her salary was fully paid and that, since there were "no complainants for the
alleged nonpayment of extra loads for two days," the issue had become

Executive Labor Arbiter Sotero L. Tumang ruled that on complaint about for
nonpayment of all ecolas for April 1-15, 1981 to faculty members who were
also members of the union; since the salary paid to Consuelo Abad and other
faculty members for the April 1-15, 1981 period had been earned "as part of
their salary for the ten-month period," she was no longer entitled to an
emergency cost of living allowance. He added that "payment of emergency cost
of living allowance is based on actual work performed except when they
(employees) are on leave with pay." Hence, because classes ended in March
1981, the teachers who did not report for work could not be considered on
leave with pay and, therefore, they were not entitled to an emergency cost of
living allowance.

Cases were dismissed for lack of merit. Respondent however, required to
integrate the allowance of P60.00 under P.D. 1123.

The petitioner appealed the said decision to the NLRC. In its resolution of June
20, 1993, the NLRC affirmed the decision of Executive Labor Article Tumang.
Hence this petition.


Yes. P.D. No. 1713 which took effect on August 18, 1980 provide:
Sec. 6. Allowances of full-time and part-time employees. —
Employees shall be paid in full the monthly allowance on the basis of
the scales provided in Section 3 hereof, 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 provided that in determining the equivalent daily
allowance of such deduction, the applicable monthly allowance shall
be divided by thirty (30) days.

This Section, which is a virtual reproduction of Section 12 of the old
Rules Implementing P.D. No. 1123, has been interpreted by this
Court as requiring that the full amount of the cost of living allowance
mandated by law should be given monthly to each employee if the
latter has worked continuously for each month, regardless of the
number of the regular working days. But more apropos is the ruling
of this Court in University of Pangasinan Faculty Union v. University
of Pangasinan and NLRC, a case involving the same parties as in the
instant petition and dealing with a complaint filed by the petitioner
on December 18, 1981 seeking, among others, the payment of
emergency cost of living allowances for November 7 to December 5,
1981, a semestral break. The Court held therein:

. . . 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 . . . 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. To a certain extent, the private respondent can
specify dates when no classes would be held. Surely, it was not the
intention of the framers of the law to allow employers to withhold
employee benefits by the simple expedient of unilaterally imposing
"no work" days and consequently avoiding compliance with the
mandate of the law for those days.

As interpreted and emphasized in the same case, the law granting
emergency cost of living allowances was designed to augment the
income of the employees to enable them to cope with the rising cost
of living and inflation. Clearly, it was enacted in pursuance of the
State's duty to protect labor and to alleviate the plight of the
workers. To uphold private respondent's interpretation of the law
would be running counter to the intent of the law and the

WHEREFORE, the petition for mandamus is hereby DISMISSED. The
decision of the NLRC is AFFIRMED subject to the MODIFICATION that
private respondent University of Pangasinan shall pay its regular
and fulltime teachers and employees emergency cost of living
allowance for the period April 1-15, 1981.


Page | 6

G.R. No.132805, February 2, 1999

Private respondent was employed as flight surgeon at petitioner company. He
was assigned at the PAL Medical Clinic at Nichols and was on duty from 4:00 in
the afternoon until 12:00 midnight.

On February 17, 1994, at around 7:00 in the evening, private respondent left
the clinic to have his dinner at his residence, which was about five-minute drive
away. A few minutes later, the clinic received an emergency call from the PAL
Cargo Services. One of its employees, Mr. Manuel Acosta, had suffered a heart
attack. The nurse on duty, Mr. Merlino Eusebio, called private respondent at
home to inform him of the emergency. The patient arrived at the clinic at 7:50
in the evening and Mr. Eusebio immediately rushed him to the hospital. When
private respondent reached the clinic at around 7:51 in the evening, Mr.
Eusebio had already left with the patient. Mr. Acosta died the following day.

Upon learning about the incident, PAL Medical Director Dr. Godofredo B. Banzon
ordered the Chief Flight Surgeon to conduct an investigation. The Chief Flight
Surgeon, in turn, required private respondent to explain why no disciplinary
sanction should be taken against him.

In his explanation, private respondent asserted that he was entitled to a thirty-
minute meal break; that he immediately left his residence upon being informed
by Mr. Eusebio about the emergency and he arrived at the clinic a few minutes
later;Â that Mr. Eusebio panicked and brought the patient to the hospital
without waiting for him.

Finding private respondent’s explanation unacceptable, the management
charged private respondent with abandonment of post while on duty.

Petitioner company decided to suspend private respondent for three months.

Private respondent filed a complaint for illegal suspension against petitioner.

Labor Arbiter's decision: LA Romulus A. Protasio rendered a decision declaring
the suspension of private respondent illegal. It also ordered petitioner to pay
private respondent the amount equivalent to all the benefits he should have
received during his period of suspension plus P500,000.00 moral damages.

Petitioner appealed to the NLRC.

NLRC's decision: The NLRC dismissed the appeal after finding that the decision
of the Labor Arbiter is supported by the facts on record and the law on the
matter. The NLRC likewise denied petitioner’s motion for reconsideration.


As regards the legality of private respondent’s suspension. The facts
do not support petitioner’s allegation that private respondent
abandoned his post on the evening of February 17, 1994. Private
respondent left the clinic that night only to have his dinner at his
house, which was only a few minutes’ drive away from the clinic.
His whereabouts were known to the nurse on duty so that he could
be easily reached in case of emergency. Upon being informed of Mr.
Acosta’s condition, private respondent immediately left his home
and returned to the clinic. These facts belie petitioner’s claim of

Art. 85. Meal periods. Subject to such regulations as the Secretary of
Labor may prescribe, it shall be the duty of every employer to give
his employees not less than sixty (60) minutes time-off for their
regular meals.

Section 7, Rule I, Book III of the Omnibus Rules Implementing the
Labor Code further states:

Sec. 7. Meal and Rest Periods. Every employer shall give his
employees, regardless of sex, not less than one (1) hour time-off for
regular meals, except in the following cases when a meal period of
not less than twenty (20) minutes may be given by the employer
provided that such shorter meal period is credited as compensable
hours worked of the employee;

xxx xxx xxx

(c) In cases of actual or impending emergencies or there is urgent
work to be performed on machineries, equipment or installations to
avoid serious loss which the employer would otherwise suffer;

xxx xxx xxx

Rest periods or coffee breaks running from five (5) to twenty (20)
minutes shall be considered as compensable working time.

Thus, the eight-hour work period does not include the meal break.
Nowhere in the law may it be inferred that employees must take
their meals within the company premises. Employees are not
prohibited from going out of the premises as long as they return to
their posts on time. Private respondent’s act, therefore, of going
home to take his dinner does not constitute abandonment.


Page | 7
543 SCRA 26

The Letran Calamba Faculty and Employees Association filed a Complaint
in behalf of its members against Colegio de San Juan de Letran, Calamba,
Inc. (CSJDLCI) for collection of various monetary claims due its members.

In the computation of the thirteenth month pay of its academic personnel,
CSJDLCI does not include as basis therefor their compensation for
overloads. It only takes into account the pay the faculty members receive
for their teaching loads not exceeding (18) units. The teaching overloads
are rendered within (8) hours a day. CSJDLCI has not paid the wage
increases required by Wage Order No. 5 to its employees who qualify
thereunder. CSJDLCI has not followed the formula prescribed by DECS
Memorandum Circular No. 2 dated March 10, 1989 in the computation of
the compensation per unit of excess load or overload of faculty members.
This has resulted in the diminution of the compensation of faculty
members. The salary increases due the non-academic personnel as a
result of job grading has not been given. The same is done for the purpose
of increasing the salaries of non-academic personnel and as the
counterpart of the ranking systems of faculty members. CSJDLCI has not
paid to its employees the balances of (70%) percent of the tuition fee
increases for the years 1990, 1991 and 1992. CSJDLCI has not also paid its
employees the holiday pay for the (10) regular holidays as provided for in
Article 94 of the Labor Code.

CSJDLCI has refused without justifiable reasons and despite repeated
demands to pay its obligations. CSJDLCI petition to declare as illegal a
strike staged by petitioner in January 1994. These cases were

LA and NLRC: Both cases were dismissed.
Petitioner then filed a special civil action for certiorari with the CA. The
court dismissed. Petitioner filed a motion for reconsideration but was also


No. the Court invariably sustains the unanimous factual findings of the LA,
the NLRC and the CA. The Court finds that overload pay should be
excluded from the computation of the 13th-month pay of petitioner's

In resolving the issue of the inclusion or exclusion of overload pay in the
computation of a teacher's 13th-month pay, it is decisive to determine
what “basic salary” includes and excludes. The basic salary of an
employee is used as the basis in the determination of his 13th month pay.
Any compensations or remunerations which are deemed not part of the
basic pay is excluded as basis in the computation of the mandatory

Under the Rules and Regulations Implementing Presidential Decree 851,
the following compensations are deemed not part of the basic salary:

a) Cost-of-living allowances granted pursuant to Presidential Decree
525 and Letter of Instruction No. 174;
b) Profit sharing payments;
c) All allowances and monetary benefits which are not considered or
integrated as part of the regular basic salary of the employee at
the time of the promulgation of the Decree on December 16, 1975.

Under a later set of Supplementary Rules and Regulations Implementing
Presidential Decree 851 overtime pay, earnings and other remunerations
are excluded as part of the basic salary and in the computation of the
13th-month pay.
This conclusion finds strong support under the Labor Code of the
Philippines. To cite a few provisions:

“Art. 87 – Overtime work. Work may be performed beyond eight (8)
hours a day provided that the employee is paid for the overtime work,
additional compensation equivalent to his regular wage plus at least
twenty-five (25%) percent thereof.”
It is clear that overtime pay is an additional compensation other than and
added to the regular wage or basic salary, for reason of which such is
categorically excluded from the definition of basic salary under the
Supplementary Rules and Regulations Implementing Presidential Decree

In Article 93 of the same Code, paragraph “c.) work performed on any
special holiday shall be paid an additional compensation of at least thirty
percent (30%) of the regular wage of the employee.”

It is likewise clear that premium for special holiday which is at least 30%
of the regular wage is an additional compensation other than and added
to the regular wage or basic salary. For similar reason it shall not be
considered in the computation of the 13th -month pay.

In the same manner that payment for overtime work and work performed
during special holidays is considered as additional compensation apart
and distinct from an employee's regular wage or basic salary, an
overload pay, owing to its very nature and definition, may not be
considered as part of a teacher's regular or basic salary, because it is
being paid for additional work performed in excess of the regular
teaching load.


Page | 8

The peculiarity of an overload lies in the fact that it may be performed
within the normal eight-hour working day. This is the only reason why
the DOLE, in its explanatory bulletin, finds it proper to include a teacher's
overload pay in the determination of his or her 13th-month pay.
However, the DOLE loses sight of the fact that even if it is performed
within the normal eight-hour working day, an overload is still an
additional or extra teaching work which is performed after the regular
teaching load has been completed. Hence, any pay given as compensation
for such additional work should be considered as extra and not deemed
as part of the regular or basic salary.

Moreover, petitioner failed to refute private respondent's contention that
excess teaching load is paid by the hour, while the regular teaching load
is being paid on a monthly basis; and that the assignment of overload is
subject to the availability of teaching loads. This only goes to show that
overload pay is not integrated with a teacher's basic salary for his or her
regular teaching load. In addition, overload varies from one semester to
another, as it is dependent upon the availability of extra teaching loads.
As such, it is not legally feasible to consider payments for such overload
as part of a teacher's regular or basic salary. Verily, overload pay may
not be included as basis for determining a teacher's 13th-month pay.


Page | 9
GR 11359, August 15, 1995

Petition for certiorari (dismissed, affirmed NLRC). Caltex Regular
Employees Association at the Manila Office, Legazpi Bulk Depot
and the Marinduque Bulk Depot (hereinafter referred to as
"Union"), seeks to annul and set aside the decision of the National
Labor Relations Commission ("NLRC"). Union and Caltex
(Philippines), Inc. ("Caltex") entered into a Collective Bargaining
Agreement ("1985 CBA") which was to be in effect until midnight of
31 December 1988. CBA included,

the regular work week shall consist of eight (8) hours per day,
seven (7) days, Monday through Sunday, during which regular
rates of pay shall be paid in accordance with Annex B
Daily working schedules shall be established by management in
accordance with the requirements of efficient operations on the
basis of eight (8) hours per day for any five (5) days. Provided,
however employees required to work in excess of forty (40) hours
in any week shall be compensated in accordance with Annex B of
this agreement.

Annex "B"
Computation of:
Regular Day Pay
Overtime Pay
Night Shift Differential Pay
Day Off Pay
Excess of 40 hours within a calendar week
Sunday Premium Pay
Holiday Premium Pay
Employee's Basic Hourly Wage Rate:
Monthly Base Pay
X = (21.667) (8)

A. Regular Pay

1) Hourly rate
= X
2) OT Hourly Rate 12 MN
= (X + 50% X)
3) NSD 6 PM - 12 MN
= (X + 25% X)
4) OT Hourly Rate NSD 6 PM - 12 MN
= (X + 25% X) + 50% (X + 25% X)
5) NSD 12 MN - 6 AM
= (X + 50% X)
6) OT Hourly Rate NSD 12 MN - 6 AM
= (X + 50% X) + 50% (X + 50% X)

B. Regular First Day Off

1. Hourly Rate
= (X + 50% X)
2. OT Hourly Rate
= (X + 50% X) + 50% (x + 50% X)
3. NSD 6 PM - 12 MN


We agree with the NLRC that the intention of the parties to the 1985 CBA
was to provide the employees with only one (1) day of rest. The plain and
ordinary meaning of the language of Article III is that Caltex and the
Union had agreed to pay "day of rest" rates for work performed on "an
employee's one day of rest". To the Court's mind, the use of the word
"one" describing the phrase "day of rest [of an employee]" emphasizes
the fact that the parties had agreed that only a single day of rest shall be
scheduled and shall be provided to the employee.

We find, under the foregoing circumstances, that the purported intention
inferred from Annex "B" by the Labor Arbiter was based merely on
conjecture and speculation.

Union contended that private respondent Caltex in the instant petition
was violating the statutory prohibition against off-setting undertime for
overtime work on another day. Union counsel attempted to establish this
charge by asserting that the employees had been required to render
"overtime work" on a Saturday but compensated only at regular rates of
pay, because they had not completed the eight (8)-hour work period daily
from Monday thru Friday.

The Court finds petitioner's contention bereft of merit.

In the present case, under the 1985 CBA, hours worked on a Saturday do
not, by that fact alone, necessarily constitute overtime work compensable
at premium rates of pay, contrary to petitioner's assertion. These are
normal or regular work hours, compensable at regular rates of pay, as
provided in the 1985 CBA; under that CBA, Saturday is not a rest day or a
"day off". It is only when an employee has been required on a Saturday
to render work in excess of the forty (40) hours which constitute the
regular work week that such employee may be considered as performing
overtime work on that Saturday. We consider that the statutory
prohibition against offsetting undertime one day with overtime another
day has no application in the case at bar.

Petitioner's counsel insists that private respondent cannot require its
employees to complete the 40-hour regular work week on a Saturday,
after it has allowed its employees to render only 37-1/2 hours of work.
The company practice of allowing employees to leave thirty (30) minutes
earlier than the scheduled off-time had been established primarily for the
convenience of the employees.

There is no allegation here by petitioner Union that such practice was
resorted to by Caltex in order to escape its contractual obligations. This
practice while it effectively reduced to 37-1/2 the number of hours
actually worked is not be construed as modifying the other terms of the
1985 CBA. The shortened work period did not result in likewise
shortening the work required for purposes of determining overtime pay,
as well as for purposes of determining premium pay for work beyond
forty (40) hours within the calendar week. It follows that an employee is
entitled to be paid premium rates, whether for work in excess of eight (8)
hours on any given day, or for work beyond the forty (40)-hour
requirement for the calendar week, only when the employee had, in fact
already rendered the requisite number of hours — 8 or 40 —
prescribed in the 1985 CBA.

Court Resolved to DISMISS the Petition for lack of merit.

Page | 10
= [ (X + 50% X) + 25% (X + 50% X) ]
4. OT Hourly Rate NSD 6 PM - 12 MN
= [ (X + 50% X) + 25% (X + 50% X) ] +
50% [ (X + 50% X) + 25% (X + 50%) ]
5. NSD 12 MN - 6 AM
= [ (X + 50% X) + 50% (X + 50% X) ]
6. OT Hourly Rate NSD 12 MN - 6 AM
= [ (X + 50% X) + 50% (X + 50% X) ] +
50% [ (X + 50% X) + 50% (X + 50% X) ]

C. Regular Second Day Off

1. Hourly Rate
= (X + 100% X)
2. OT Hourly Rate
= (X + 100% X) + 50% (X + 100% X)
3. NSD 6 PM - 12MN
= [ (X + 100% X) + 25% (X + 100%) ]
4. OT Hourly Rate NSD 6 PM - 12 MN
= [ (X + 100% X) + 25% (X + 100% X) ] +
50% [ (X + 100% X) + 25% (X + 100% X) ]
5. NSD 12 MN - 6 AM
= [ (X + 100% X) + 50% (X + 100% X) ]
6. OT Hourly Rate NSD 12 MN - 6 AM
= [ (X + 100% X) + 50% (X + 100% X) ] +
50% [ (X + 100% X) + 50% (X + 100% X) ]

1. Hourly Rate
= (X + 50% X)
2. OT Hourly Rate
= (X + 50% X) + 50% (X + 50% X)
3. NSD 6 PM - 12MN
= [ (X + 50% X) + 25% (X + 50% X) ]
4. OT Hourly Rate NSD 6 PM - 12 MN
= [ (X + 50% X) + 25% (X + 50% X) ] +
50% [ (X + 50% X) + 25% (X + 50% X) ]
5. NSD 12 MN - 6 AM
= [ (X + 50% X) + 50% (X + 50% X) ]
6. OT Hourly Rate NSD 12 MN - 6 AM
= [ (X + 50% X) + 50% (X + 50% X) ] +
50% [ (X + 50% X) + 50% (X + 50% X) ]

E. Sunday as a Normal Work Day

1. Hourly Rate
= (X + 100% X)
2. OT Hourly Rate
= (X + 100% X) + 50% (X + 100% X)
3. NSD 6 PM - 12 MN
= [ (X + 100% X) + 25% (X + 100% X) ]
4. OT Hourly Rate NSD 6 PM - 12 MN
= [ (X + 100% X) + 25% (X + 100% X) ] +
50% [ (X + 100% X) + 25% (X + 100% X) ]
5. NSD 12 MN - 6 AM
= [ (X + 100% X) + 50% (X + 100% X) ]
6. OT Hourly Rate NSD 12 MN - 6 AM
= [ (X + 100% X) + 50% (X + 100% X) ] +
50% [ (X + 100% X) + 50% (X + 100% X) ]

F. Sunday as day off

1. Hourly Rate
= (X + 100% X)
2. OT Hourly Rate
= (X + 100% X) + 50% (X + 100% X)

Page | 11
3. NSD 6 PM - 12 MN
= [ (X + 100% X) + 25% (X+ 100% X) ]
4. OT Hourly Rate NSD 6 PM - 12 MN
= [ (X + 100% X) + 25% (X + 100% X) ] +
50% [ (X+ 100% X) + 25% (X + 100% X) ]
5. NSD 12 MN - 6 AM
= [ (X + 100% X) + 50% (X + 100% X) ]
6. OT Hourly Rate NSD 12 MN - 6 AM
= [ (X + 100% X) + 50% (X + 100% X) ] +
50% [ (X + 100% X) + 50% (X + 100% X) ]

G. Holiday as Normal Work Day

1. Hourly Rate
= (X + 150% X)
2. OT Hourly Rate
= (X + 150% X) + 50% (X + 150% X)
3. NSD 6 PM - 12 MN
= [ (X + 150% X) + 25% (X + 150% X) ]
4. OT Hourly Rate NSD 6 PM - 12 MN
= [ (X + 150% X) + 25% (X + 150% X) ] +
50% [ (X + 150% X) + 25% (X + 150% X) ]
5. NSD 12 MN - 6 AM
= [ (X + 150% X) + 50% (X + 150% X) ]
6. OT Hourly Rate NSD 12 MN - 6 AM
= [ (X + 150% X) + 50% (X + 150% X) ] +
50% [ (X + 150% X) + 50% (X + 150% X) ]

H. Holiday as Day Off

1. Hourly Rate
= (X + 150% X)
2. OT Hourly Rate
= (X + 150% X) + 50% (X + 150% X)
3. NSD 6 PM - 12 MN
= [ (X + 150% X) + 25% (X + 150% X) ]
4. OT Hourly Rate NSD 6 PM - 12 MN
= [ (X + 150% X) + 25% (X + 150% X) ] + 50%
[ (X + 150% X) + 25% (X + 150% X) ]
5. NSC 12 MN - 6 AM
= [ (X + 150% X) + 50% (X + 150% X) ]
6. OT Hourly Rate
= [ (X + 150% X) + 50% (X + 150% X) ] + 50%
[ (X + 150% X) + 50% (X + 150% X) ]
7. * Hourly Rate for less than 8 hours
= (150% X)
* For work of less than 8 hours, the employee will receive
his basic daily rate —
(Monthly Base Pay)
plus the hourly rate multiplied by the number of hours worked.

Union called Caltex's attention to alleged violations by Caltex of
Annex "B" of the 1985 CBA, e.g. non-payment at "first day-off
rates" for work performed on a Saturday. Caltex Industrial
Relations manager evaluated petitioner's claims and accordingly
informed Union that differential payments would be timely
implemented, however, no differential payment was made with
respect to work performed on the first 2 1/2 hours on a Saturday.

On 7 July 1987, the Union instituted a complaint for unfair labor
practice against Caltex alleging violation of the provisions of the
1985 CBA. It charged Caltex with shortchanging its employees
when Caltex compensated work performed on the first 2 1/2 hours

Page | 12

of Saturday, an employees' day of rest, at regular rates, when it
should be paying at "day of rest" or "day off" rates.

Caltex denied the accusations of the Union. It averred that
Saturday was never designated as a day of rest, much less a "day-
off", maintained that the 1985 CBA provided only 1 day of rest for
Labor Arbiter ruled in favor of petitioner Union, while
finding Caltex was not guilty of any unfair labor practice
and concluded that Caltex's employees had been given two (2)
days (instead of one [1] day) of rest, Saturday, should be
compensated at "First day-off" rates.
On appeal by Caltex, NLRC set aside the decision of Labor
Arbiter found that the conclusions of the Labor Arbiter were not
supported by the evidence on record and concluded that CBA
granted only one (1) day of rest, e.g., Sunday. MR was denied.

Page | 13

G.R. No.122240, November 18, 1999

Cristonico B. Legahi was employed as "Chief Cook" aboard M/V "Federal Nord"
by the Northsouth Ship Management (PTE), Ltd., Singapore. According to the
contract of employment, his term of employment was for ten months beginning
October 9, 1992 with a basic monthly salary of US$450.00 with 44 hours weekly
as minimum number of hours worked with a fixed overtime pay (OT) of $185.00
and three (3) days leave with pay every month.

Sometime in November, 1992 petitioner was asked by the Shipmaster to
prepare a victualling cost statement but after learning that such preparation
involves mathematical skills, he refused and reasoned that he did not know
how to do such work as it was not part of the duties of a chief cook. However,
petitioner nonetheless prepared the statement in deference to the Shipmaster.

In December, petitioner still prepared the victualling cost statement for the
month of November since he was afraid he would earn the ire of his superiors
if he refused. When asked to prepare the statement for a third time, petitioner
asked the Shipmaster if he could defer the correction as he was busy doing his
chores. The response certainly did not sit well with the Shipmaster so a
committee was formed headed by the Shipmaster himself which convened and
the Shipmaster read to Legahi the offenses he committed on board. He was
asked to answer the charges but petitioner remained silent. Thereafter,
petitioner was informed that he was dismissed and he was at once repatriated
to the Philippines through the assistance of the Philippine Consulate.

Legahi then filed with the POEA a complaint for illegal dismissal against private
respondents. He sought the payment of his salary corresponding to the
unexpired portion of his contract, unpaid overtime pay, leave pay, salary
differential and damages.

In answer to the complaint, private respondent stated that when petitioner was
asked to prepare the statement, he refused and subsequently petitioner left
the vessel without permission and did not perform his job that day. In the
meeting held for the petitioner, the latter remained silent so the committee
decided to send him home. Petitioner was terminated for just cause and must,
therefore, reimburse private respondent for the cost of repatriation.

POEA found that there was just cause for petitioner's dismissal which the NLRC
affirmed in toto.


Yes, petitioner was illegally dismissed. The court found no just cause
for petitioner's dismissal. According to POEA and NLRC, petitioner
was found guilty for insubordination for his refusal "to obey the
order of the master to prepare the victual statement.

For willful disobedience to be considered as just cause for dismissal,
the employee's conduct must be willful or intentional, the willfulness
being characterized by a wrongful and perverse attitude and the
order violated must have been reasonable, lawful, made known to
the employee and must pertain to the duties which he has been
engaged to discharge.

It was actually not petitioner's duty to prepare the victualling
statement and the employment contract does not mention anything
that this was part of his duty as chief cook. And even assuming that
petitioner refused to obey, he merely asked for time to do it, as he
was then busy performing his usual duty and therefore this refusal
cannot be considered as one being characterized by a "wrongful and
perverse attitude." Petitioner’s failure or alleged refusal to go did
not merit the severest penalty of dismissal from the service and his
immediate repatriation without even affording him due process of

Petitioner's dismissal without a valid cause constitute a breach of
contract and he must be paid the unexpired portion of his
employment contract.

Wherefore, the petition is granted and the questioned order is set

Page | 14
G.R. No. 173648, January 16, 2012

Oliver R. Canoy (Canoy) and petitioner Abduljuahid R. Pigcaulan (Pigcaulan)
were both employed by SCII as security guards and were assigned to SCII’s
different clients. They filed with the Labor Arbiter separate complaints for
underpayment of salaries and non-payment of overtime, holiday, rest day,
service incentive leave and 13th month pays. These complaints were
consolidated as they involved the same causes of action. They submitted their
respective daily time records, reflecting the number of hours served and their
wages for the same, and the itemized lists of their claims.

Respondents countered that Canoy and Pigcaulan were paid their just salaries
and other benefits.

• The salaries were above the statutory minimum wage and
the rates provided by the Philippine Association of
Detective and Protective Agency Operators (PADPAO) for
security guards.
• Their holiday pay was already included in the computation
of their monthly salaries.
• They were paid additional premium of 30% in addition to
their basic salary whenever they were required to work
on Sundays and 200% of their salary for work done on
• They were paid the corresponding 13th month pay for
1998 and 1999.
• Respondents presented copies of payroll listings and lists
of employees who received their 13thmonth pay for
December 1997-November 1999.
• Respondents contended that Canoy’s and Pigcaulan’s
monetary claims should only be limited to the past three
years of employment pursuant to the rule on prescription
of claims.

Labor Arbiter ruled in favor of Canoy and Pigcaulan without indicating any
detailed computation of the judgment award. The LA held that the payroll
listings did not prove that Canoy and Pigcaulan were duly paid as same were
not signed by the latter or by any SCII officer. The 13th month payroll was
acknowledged as sufficient proof of payment, for it bears Canoy’s and
Pigcaulan’s signatures. NLRC sustained the LA’s decision. The evidence show
underpayment of salaries and non-payment of service incentive leave benefit.

CA set aside the NLRC and LA’s rulings. It dismissed all the monetary claims of
Canoy and Pigcaulan.

• The LA decision did not indicate the detailed and full
amount rewarded.
• The payrolls actually had the signatures of Canoy,
contrary to LA’s findings.
• The LA did not state in his decision the substance of the
evidence adduced by Pigcaulan and Canoy and the laws or
jurisprudence to support their claims.
• The Labor Arbiter held Reyes liable together with SCII for
the payment of the claimed salaries and benefits despite
the absence of proof that Reyes deliberately or
maliciously designed to evade SCII’s alleged financial


NO. There was no substantial evidence to support the grant of
overtime pay.

[NOTE: While the caption of the petition reflects both the names of
Canoy and Pigcaulan as petitioners, it appears from its body that it
is being filed solely by Pigcaulan. The Verification and Certification
of Non-Forum Shopping was executed by Pigcaulan alone. Thus, CA
decision is considered as final as to Canoy. Canoy cannot merely
submit an affidavit verifying the contents and allegations of the
petition as he is not one of the petitioners. His failure to sign in the
certificate of non-forum shopping negates his participation in the
case and the Court will consider the pleadings as solely filed by

The LA, in relying heavily on the itemized computations submitted
which he considered as representative daily time records, and the
NLRC, in sustaining the award on the ground that there was
substantial evidence of underpayment of salaries and benefits, both
erred in awarding the claims.

The handwritten itemized computations are self-serving, unreliable
and unsubstantial evidence to sustain the grant of salary
differentials, particularly overtime pay. Unsigned and
unauthenticated as they are, there is no way of verifying as to their
truthfulness. Written only in pieces of paper and solely prepared by
Canoy and Pigcaulan, these representative daily time records can
hardly be considered as competent evidence to be used as basis to
prove that the two were underpaid of their salaries. We find nothing
in the records which could substantially support Pigcaulan’s
contention that he had rendered service beyond eight hours to
entitle him to overtime pay and during Sundays to entitle him to
restday pay. Hence, in the absence of any concrete proof that
additional service beyond the normal working hours and days had
indeed been rendered, the grant of overtime pay to Pigcaulan cannot
be affirmed.

However, Pigcaulan is entitled to service incentive leave pay and
13th month pay. Under the Labor Code, Pigcaulan is entitled to his
regular rate on holidays even if he does not work. The law also
entitles him to service incentive leave benefit for he rendered
service for more than a year already. Under Presidential Decree No.
851, he should be paid his 13th month pay. SCII has the burden of
proving that it has paid these benefits to its employees, yet the
latter was not able to prove it substantially. SCII presented payroll
listings and transmittal letters to the bank to show that Canoy and
Pigcaulan received their salaries and benefits, which it claimed are
already integrated in the employees’ monthly salaries. However,
SCII failed to show any other concrete proof by means of records,
pertinent files or similar documents reflecting that the specific
claims have been paid. With respect to 13th month pay, SCII
presented proof that this benefit was paid but only for the years
1998 and 1999.

To repeat, the burden of proving payment of monetary claims rests
on SCII, being the employer. Even when the plaintiff alleges non-
payment, still the general rule is that the burden rests on the

Page | 15

defendant to prove payment, rather than on the plaintiff to prove
non-payment.” Since SCII failed to provide convincing proof that it
has already settled the claims, Pigcaulan should be paid his holiday
pay, service incentive leave benefits and proportionate 13th month
pay for the year 2000.
G.R. No.122240, November 18, 1999

On March 1, 1985, the Philippine Ports Authority (PPA) issued PPA
Administrative Order (AO) No. 03-85 substantially adopting the provisions of
Customs Administrative Order (CAO) No. 15-65 on the payment of additional
charges for pilotage service[5] rendered "between 1800H to 1600H," or on
"Sundays or Holidays," practically referring to "nighttime and overtime pay."Â
Section 16 of the AO reads:

Section 16. Payment of Pilotage Service Fees. –Any vessel which employs a
Harbor Pilot shall pay the pilotage fees prescribed in this Order and shall
comply with the following conditions:

x x x x

c) When pilotage service is rendered at any port between 1800H to 1600H,
Sundays or Holidays, an additional charge of one hundred (100%) percentum
over the regular pilotage fees shall be paid by vessels engaged in foreign
trade, and fifty (50%) percentum by coastwise vessels. This additional charge
or premium fee for nighttime pilotage service shall likewise be paid when the
pilotage service is commenced before and terminated after sunrise.

Provided, however, that no premium fee shall be considered for service
rendered after 1800H if it shall be proven that the service can be undertaken
before such hours after the one (1) hour grace period, as provided in paragraph
(d) of this section, has expired. (Emphasis supplied)

On February 3, 1986, responding to the clamor of harbor pilots for the increase
and rationalization of pilotage service charges, then President Ferdinand E.
Marcos issued Executive Order (EO) No. 1088 providing for uniform and
modified rates for pilotage services rendered in all Philippine ports. It fixed
the rate of pilotage fees on the basis of the "vessel's tonnage" and provided
that the "rate for docking and undocking anchorage, conduction and shifting
and other related special services is equal to 100%."Â EO No. 1088 also
contained a repealing clause stating that all orders, letters of instruction, rules,
regulations, and issuances inconsistent with it are repealed or amended

Subsequently, pursuant to EO No. 1088, the PPA issued several resolutions
disallowing overtime premium or charge and recalling its recommendation for
a reasonable night premium pay or night differential pay.

RTC granted the petition and declared that respondent UHPAP is not authorized
to collect any overtime or night shift differential for pilotage services rendered.

Respondent UHPAP moved for reconsideration but the motion was denied.

Desiring to secure for its members the payment of nighttime and overtime pay,
respondent UHPAP filed directly before this Court a petition for review on

Court granted the petition and reversed the RTC.


As we held in Philippine Interisland Shipping Association of the
Philippines v. Court of Appeals:

"The power of the PPA to fix pilotage rates and its authority to
regulate pilotage still remain notwithstanding the fact that a
schedule for pilotage fees has already been prescribed by the
questioned executive order (referring to E.O. No. 1088). PPA is at
liberty to fix new rates of pilotage subject only to the limitation that
such new rates should not go below the rates fixed under E.O. No.
1088. x x x."

There is no inconsistency between EO No. 1088 and the provisions of
PPA AO No. 03-85. These two orders dwell on entirely different
subject matters. EO No. 1088 provides for uniform and modified
rates for pilotage services rendered to foreign and coastwise
vessels in all Philippine ports, public or private. On the other hand,
the subject matter of the provisions of PPA AO No. 03-85 is the
payment of the additional charges of nighttime and overtime pay.Â
Plainly, EO No. 1088 involves the basic compensation for pilotage
service while PPA AO No. 03-85 provides for the additional charges
where pilotage service is rendered under certain circumstances.

Obviously, this Court's ruling in G.R. No. 133763 was that EO No.
1088 did not repeal the provisions of PPA AO No. 03-85 on nighttime
and overtime pay as there was no inconsistency between the two
orders. The ruling rendered "without legal effect" PPA Resolution
Nos. 1486, 1541, and 1554, which were all issued by PPA pursuant to
Section 3 of EO No. 1088. Upon the other hand, the validity of the
earlier PPA AO No. 03-85, which allowed nighttime and overtime pay
to harbor pilots, was affirmed.

It is noteworthy that when this Court, in G.R. No. 133763, reversed
the RTC Decision dated January 26, 1998 (which declared, among
others, that in view of the repealing clause in EO No. 1088
respondent UHPAP is not authorized to collect any overtime or night
shift differential for pilotage services rendered), the Court likewise
recognized the right of the members of respondent UHPAP to
overtime and nighttime pay under PPA AO No. 03-85. Indeed, a
harbor pilot who has rendered nighttime and overtime work must be
paid nighttime and overtime pay.

Members of respondent UHPAP are entitled to nighttime and
overtime pay. Undoubtedly, pursuant to PPA AO No. 03-85,
members of respondent UHPAP are legally entitled to nighttime and
overtime pay.

It bears pointing out that additional compensation for nighttime
work is founded on public policy. Working at night is violative of the
law of nature for it is the period for rest and sleep. An employee
who works at night has less stamina and vigor. Thus, he can easily
contract disease. The lack of sunlight tends to produce anemia and

Page | 16

tuberculosis and predispose him to other ills. Night work brings
increased liability to eyestrain and accident. Serious moral
dangers also are likely to result from the necessity of traveling the
street alone at night, and from the interference with normal home
life. Hygienic, medical, moral, cultural and socio-biological reasons
are in accord that night work has many inconveniences and when
there is no alternative but to perform it, it is but just that the laborer
should earn greater salary than ordinary work so as to compensate
the laborer to some extent for the said inconveniences.

Anent the payment of overtime pay, the Court explained its
rationale in Philippine National Bank v. Philippine National Bank
Employees Association (PEMA):

x x x Why is a laborer or employee who works beyond the regular
hours of work entitled to extra compensation called in this
enlightened time, overtime pay? Verily, there can be no other
reason than that he is made to work longer than what is
commensurate with his agreed compensation for the statutorily
fixed or voluntarily agreed hours of labor he is supposed to do.Â
When he thus spends additional time to his work, the effect upon
him is multi-faceted: he puts in more effort, physical and/or mental;
he is delayed in going home to his family to enjoy the comforts
thereof; he might have no time for relaxation, amusement or sports;
he might miss important pre-arranged engagements; etc., etc. It is
thus the additional work, labor or service employed and the adverse
effects just mentioned of his longer stay in his place of work that
justify and is the real reason for the extra compensation that he
called overtime pay.

Overtime work is actually the lengthening of hours developed to the
interests of the employer and the requirements of his enterprise.Â
It follows that the wage or salary to be received must likewise be
increased, and more than that, a special additional amount must be
added to serve either as encouragement or inducement or to make
up for the things he loses which we have already referred to. And
on this score, it must always be borne in mind that wage is
indisputably intended as payment for work done or services

Moreover, We agree with the CA that the RTC correctly denied
respondent's motion for execution.

Page | 17

G.R. No.122240, November 18, 1999

Petitioners Lazaro V. Dacut, Cesario G. Cajote, Romerlo F. Tungala, Lowel Z.
Zubista, and Orlando P. Taboy were crew members of the LCT “BASILISA,” an
inter-island cargo vessel owned by private respondent Sta. Clara International
Transport and Equipment Corporation.

On November 29, 1998, Dacut discovered a hole in the vessel’s engine room.
The company had the hole patched up with a piece of iron and cement. Despite
the repair, Dacut and Tungala resigned in July 1999 due to the vessel’s alleged

On the other hand, Cajote went on leave from April 12-28, 1999 to undergo eye
treatment. Since then, he has incurred several unauthorized absences. Fearing
that he will be charged as Absent Without Leave (AWOL), Cajote resigned in
June 1999.

On September 22, 1999, petitioners filed a complaint7 for constructive
dismissal amounting to illegal dismissal (except for Zubista and Taboy);
underpayment of wages, special and regular holidays; non-payment of rest
days, sick and vacation leaves, night shift differentials, subsistence allowance,
and fixed overtime pay; actual, moral and exemplary damages; and litigation
costs and attorney’s fees.

Dacut and Tungala claimed that they resigned after Reynalyn G. Orlina, the
secretary of the Personnel Manager, told them that they will be paid their
separation pay if they voluntarily resigned. They also resigned because the
vessel has become unseaworthy after the company refused to have it repaired
properly.8 Meanwhile, Cajote alleged that he resigned because the company
hired a replacement while he was still on leave. When he returned, the
Operations Manager told him that he will be paid his separation pay if he
voluntarily resigned; otherwise, he would be charged for being AWOL. On the
other hand, Zubista claimed that his wage was below the minimum set by the
Regional Tripartite Wages and Productivity Board. Finally, petitioners alleged
that they were not paid their rest days, sick and vacation leaves, night shift
differentials, subsistence allowance, and fixed overtime pay.

After the Labor Arbiter declared the case submitted for decision, the company
filed its reply to petitioners’ position paper. It countered that Dacut and
Tungala voluntarily resigned due to the vessel’s alleged unseaworthiness while
Cajote resigned to avoid being charged as AWOL. It also claimed that
petitioners’ monetary claims had no basis.

On August 2, 2000, the Labor Arbiter dismissed petitioners’ complaint. The
Labor Arbiter ruled that there was sufficient evidence to prove that the vessel
was seaworthy. Thus, the fear of Dacut and Tungala was unfounded, and they
must bear the consequence of their resignation. The Labor Arbiter also
observed that Cajote has incurred excessive unauthorized absences which
would warrant his dismissal under the Labor Code. Thus, the Labor Arbiter
upheld the company’s position that Cajote resigned to avoid being charged as
AWOL. Finally, the Labor Arbiter noted that except for the holiday pay, accrued
sick and vacation leaves, and wage differential, petitioners failed to
substantiate their monetary claims.

NLRC-AFFIRMED decision of LA
CA- Affirmed decision of NLRC


Apropos the monetary claims, there is insufficient evidence to prove
petitioners’ entitlement thereto. As crew members, petitioners were
required to stay on board the vessel by the very nature of their
duties, and it is for this reason that, in addition to their regular
compensation, they are given free living quarters and subsistence
allowances when required to be on board. It could not have been the
purpose of our law to require their employers to give them overtime
pay or night shift differential, even when they are not actually
working. Thus, the correct criterion in determining whether they are
entitled to overtime pay or night shift differential is not whether
they were on board and cannot leave ship beyond the regular eight
working hours a day, but whether they actually rendered service in
excess of said number of hours. In this case, petitioners failed to
submit sufficient proof that overtime and night shift work were
actually performed to entitle them to the corresponding pay.

Page | 18
G.R. No.144644, March 15, 2004

The Department of Labor and Employment (DOLE), through Undersecretary
Cresenciano B. Trajano, issued an Explanatory Bulletin dated March 11, 1993,
wherein it clarified, that employees are entitled to 200% of their basic wage on
April 9,1993, which, apart from being Good Friday, and, therefore, a legal
holiday, is also Araw ng Kagitingan, which is also a legal holiday, even if
unworked. - Said bulletin was reproduced on January 23, 1998, when April 9,
1998 was both Maundy Thursday and Araw ng Kagitingan.

Despite the explanatory bulletin, petitioner Asian Transmission Corporation
opted to pay its daily paid employees only 100% of their basic pay on April 9,
1998.- Respondent Bisig ng Asian Transmission Labor Union (BATLU) protested.
In accordance with Step 6 of the grievance procedure of the Collective
Bargaining Agreement (CBA) existing between petitioner and BATLU, the
controversy was submitted for voluntary arbitration. On July 31, 1998, the
Office of the Voluntary Arbitrator rendered a decision directing petitioner to
pay its covered employees "200% and not just 100% of their regular daily
wages for the unworked April 9, 1998- Subject of interpretation in the case at
bar is Article 94 of the Labor which was amended by Executive Order No. 2034.

In deciding in favor of the Bisig ng Asian Transmission Labor Union (BATLU), the
Voluntary Arbitrator held that Article 94 of the Labor Code provides for holiday
pay for every regular holiday, the computation of which is determined by a
legal formula which is not changed by the fact that there are two holidays
falling on one day; and that that the law, as amended, enumerates ten regular
holidays for every year, and should not be interpreted as authorizing a
reduction to nine the number of paid regular holidays "just because April 9
(Araw ng Kagitingan) in certain years, like 1993 and 1998, is also Holy Friday
or Maundy Thursday." The Court of Appeals upheld the findings of the
Voluntary Arbitrator, holding that the Collective Bargaining Agreement (CBA)
between petitioner and BATLU, the law governing the relations between them,
clearly recognizes their intent to consider Araw ng Kagitingan and Maundy
Thursday, on whatever date they may fall in any calendar year, as paid legal
holidays during the effectivity of the CBA and that "there is no condition,
qualification or exception for any variance from the clear intent that all
holidays shall be compensated. The Court of Appeals further held that "in the
absence of an explicit provision in law which provides for [a] reduction of
holiday pay if two holidays happen to fall on the same day, any doubt in the
interpretation and implementation of the Labor Code provisions on holiday pay
must be resolved in favor of labor."

Hence, this petition.


YES. Holiday pay is a legislated benefit enacted as part of the
Constitutional imperative that the State shall afford protection to
labor. Its purpose is not merely "to prevent diminution of the
monthly income of the workers on account of work interruptions. In
other words, although the worker is forced to take a rest, he earns
what he should earn, that is, his holiday pay."It is also intended to
enable the worker to participate in the national celebrations held
during the days identified as with great historical and cultural
significance. Independence Day (June 12), Araw ng Kagitingan (April
9),National Heroes Day (last Sunday of August), Bonifacio
Day(November 30) and Rizal Day (December 30) were declared
national holidays to afford Filipinos with a recurring opportunity to
commemorate the heroism of the Filipino people, promote national
identity, and deepen the spirit of patriotism. Labor Day (May 1) is a
day traditionally reserved to celebrate the contributions of the
working class to the development of the nation, while the religious
holidays designated in Executive Order No. 203 allow the worker to
celebrate his faith with his family.- As reflected above, Art. 94 of the
Labor Code, as amended, affords a worker the enjoyment of ten paid
regular holidays. The provision is mandatory, regardless of whether
an employee is paid on a monthly or daily basis. Unlike a bonus,
which is a management prerogative, holiday pay is a statutory
benefit demandable under the law.

Since a worker is entitled to the enjoyment of ten paid regular
holidays, the fact that two holidays fall on the same date should not
operate to reduce to nine the ten holiday pay benefits a worker is
entitled to receive. It is elementary, under the rules of statutory
construction, that when the language of the law is clear and
unequivocal, the law must be taken to mean exactly what it says. In
the case at bar, there is nothing in the law which provides or
indicates that the entitlement to ten days of holiday pay shall be
reduced to nine when two holidays fall on the same day. In any
event, Art. 4 of the Labor Code provides that all doubts in the
implementation and interpretation of its provisions including its
implementing rules and regulations, shall be resolved in favor of
labor. For the working man’s welfare should be the primordial and
paramount consideration.

Moreover, Sec. 11, Rule IV, Book III of the Omnibus Rules to
Implement the Labor Code provides that "Nothing in the law or the
rules shall justify an employer in withdrawing or reducing any
benefits, supplements or payments for unworked regular holidays
as provided in existing individual or collective agreement or
employer practice or policy. From the pertinent provisions of the CBA
entered into by the parties, petitioner had obligated itself to pay for
the legal holidays as required by law.

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

Page | 19

his regular rate; and

(c) As used in this Article, "holiday" includes:

1. New Year’s Day (January 1st)
2. Holy Thursday (moveable)
3. Good Friday (moveable)
4. Araw ng Kagitingan (April 9th)
5. Labor Day (May 1st)
6. Independence Day (June 12th)
7. Bonifacio Day [November 30]
8. Christmas Day (December 25th)
9. Rizal Day (December 30th)
10. General Election designated by law, if declared public non-
working holiday
11. National Heroes Day (Last Sunday of August)

Only an employee who works on the day immediately preceding or
after a regular holiday shall be entitled to the holiday pay.
A paid legal holiday occurring during the scheduled vacation leave
will result in holiday payment in addition to normal vacation pay but
will not entitle the employee to another vacation leave.

Under similar circumstances, the COMPANY will give a day’s wage
for November 1st and December 31st whenever declared a holiday.
When required to work on said days, the employee will be paid
according to Art. VI, Sec. 3B hereof.

WHEREFORE, the petition is hereby DISMISSED..

Page | 20

G.R. No.L-65482, December 1, 1987

Petitioner is a non-stock, non-profit educational institution. Its employees are
categorized as follows: (a) personnel on monthly basis; (b) personnel on daily
basis; and (c) collegiate faculty paid on the basis of student contract hour.
Alleging that they were unable to receive their corresponding holiday pay, as
claimed, from 1975 to 1977, private respondent National Alliance of Teachers
and Office Workers (NATOW) in behalf of the faculty and personnel of Jose Rizal
College filed with the Ministry of Labor a complaint against the college for said
alleged non-payment of holiday pay.

The Labor arbiter ruled that the faculty and personnel paid by month are
presumed to be already paid the 10 paid legal holidays and are no longer
entitled to separate payment for the said regular holidays while those who are
daily paid are entitled to such payment. As to the faculty of the respondent
Jose Rizal College who are paid compensation per student contract hour, they
are not entitled to unworked regular holiday pay as these regular holidays
have been excluded in the programming of the student contact hours.

Respondent National Labor Relations Commission ruled that teaching personnel
paid by the hour are entitled to holiday pay. Hence, this petition.


Yes, but the entitlement of school faculty paid by hour to holiday pay
depends on whether what is involved is a special holiday or a
regular or a legal holiday.

The right to holiday pay is provided for in Article 94 of the Labor
Code and in Sec. 8, Rule 4, Book III of its Implementing rules and
Regulations. The purpose of a holiday pay is obvious; that is to
prevent diminution of the monthly income of the workers on account
of work interruptions. In other words, although the worker is forced
to take a rest, he earns what he should earn. That is his holiday pay.
Under the foregoing provisions, apparently, the petitioner, although
a non-profit institution is under obligation to give pay even on
unworked regular holidays to hourly paid faculty members subject
to the terms and conditions provided for therein.

As to hourly paid faculty members, employees falling within such
category are not entitled to be paid for regular holidays, whether
the same be during the regular semesters of the school year or
during semestral, Christmas, or Holy Week vacations as they cannot
expect to be paid for such days. However, they are entitled regular
hourly rate on days declared as special holidays or when for some
reason classes are called off or shortened for the hours they are
supposed to have taught and whether extensions of class days be
ordered or not .
G.R. No.146775, December 1, 1987

DOLE conducted a routine inspection in the premises of San Miguel Corporation
(SMC) in Sta. Filomena, Iligan City. In the course of the inspection, it was
discovered that there was underpayment by SMC of regular Muslim holiday pay
to its employees. DOLE sent a copy of the inspection result to SMC and it was
received by and explained to its personnel officer Elena dela Puerta.

SMC contested the findings and DOLE conducted summary hearings. Still, SMC
failed to submit proof that it was paying regular Muslim holiday pay to its
employees. Hence, Alan M. Macaraya, Director IV of DOLE Iligan District Office
issued a compliance order, directing SMC to consider Muslim holidays as
regular holidays and to pay both its Muslim and non-Muslim employees holiday
pay within thirty (30) days from the receipt of the order.


Yes, the Court finds no reason to reverse the decision of the CA.
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, which states:

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 Mi’rāj (Nocturnal Journey and Ascension of the
Prophet Muhammad), which falls on the twenty-seventh day of the
seventh lunar month of Rajab;

(d) ‘Īd-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


Page | 21

(e) ‘Īd-ūl-Adhā (Hari Raya Haji),which falls on the tenth day of the
twelfth lunar month of Dhū’l-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

The foregoing provisions should be read in conjunction with Article
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.

However, there should be no distinction between Muslims and non-
Muslims as regards payment of benefits for Muslim holidays. The
Court of Appeals did not err in sustaining Undersecretary Español
who stated:

Assuming arguendo that the respondent’s position is correct, then by
the same token, Muslims throughout the Philippines are also not
entitled to holiday pays on Christian holidays declared by law as
regular holidays. We must remind the respondent-appellant that
wages and other emoluments granted by law to the working man
are determined on the basis of the criteria laid down by laws and
certainly not on the basis of the worker’s faith or religion. the
petition is DISMISSED.

Note: It is only upon Presidential Proclamation that Muslim holidays
may be officially observed outside the Autonomous Region and
generally extends to Muslims to enable them the observe said
holidays. supposed to have taught and whether extensions of class
days be ordered or not .

Page | 22

G.R. No. 114698, July 3, 1995

A routine inspection was conducted by a Labor Enforcement Officer of the
Wellington Flour Mills, an establishment owned and operated by petitioner
Wellington Investment and Manufacturing Corporation (hereafter, simply
Wellington). The officer thereafter drew up a report, a copy of which was
"explained to and received by" Wellington's personnel manager, in which he
set forth his finding of "(n)on-payment of regular holidays falling on a Sunday
for monthly-paid employees."

Wellington sought reconsideration. It argued that "the monthly salary of the
company's monthly-salaried employees already includes holiday pay for all
regular holidays. Hence, there is no legal basis for the finding of alleged non-
payment of regular holidays falling on a Sunday." It expounded on this thesis
in a position paper subsequently submitted to the Regional Director, asserting
that it pays its monthly-paid employees a fixed monthly compensation "using
the 314 factor which undeniably covers and already includes payment for all
the working days in a month as well as all the 10 unworked regular holidays
within a year."

Wellington's arguments failed to persuade the Regional Director ruled:
- when a regular holiday falls on a Sunday, an extra or additional working day
is created and the employer has the obligation to pay the employees for the
extra day except the last Sunday of August since the payment for the said
holiday is already included in the 314 factor"

- directed Wellington to pay its employees compensation corresponding to four
(4) extra working days

MR by Wellington: Its motion was treated as an appeal, acted on by respondent
Undersecretary. By Order affirmed the challenged order of the Regional
Director, "the divisor being used by the respondent (Wellington) does not
reliably reflect the actual working days in a year, " and consequently
commanded Wellington to pay its employees the "six additional working days
resulting from regular holidays falling on Sundays in 1988, 1989 and 1990."
Wellington then instituted the special civil action of certiorari.


No. Particularly as regards employees "who are uniformly paid by
the month, "the monthly minimum wage shall not be less than the
statutory minimum wage multiplied by 365 days divided by twelve."
This monthly salary shall serve as compensation "for all days in the
month whether worked or not," and "irrespective of the number of
working days therein." In other words, whether the month is of
thirty (30) or thirty-one (31) days' duration, or twenty-eight (28) or
twenty-nine (29) (as in February), the employee is entitled to receive
the entire monthly salary. So, too, in the event of the declaration of
any special holiday, or any fortuitous cause precluding work on any
particular day or days (such as transportation strikes, riots, or
typhoons or other natural calamities), the employee is entitled to the
salary for the entire month and the employer has no right to deduct
the proportionate amount corresponding to the days when no work
was done. The monthly compensation is evidently intended precisely
to avoid computations and adjustments resulting from the
contingencies just mentioned which are routinely made in the case of
workers paid on daily basis.

In Wellington's case, there seems to be no question that at the time
of the inspection conducted by the Labor Enforcement Officer on
August 6, 1991, it was and had been paying its employees "a salary
of not less than the statutory or established minimum wage," and
that the monthly salary thus paid was "not less than the statutory
minimum wage multiplied by 365 days divided by twelve," supra.
There is, in other words, no issue that to this extent, Wellington
complied with the minimum norm laid down by law.

There is no provision of law requiring any employer to make such
adjustments in the monthly salary rate set by him to take account of
legal holidays falling on Sundays in a given year, or, contrary to the
legal provisions bearing on the point, otherwise to reckon a year at
more than 365 days. As earlier mentioned, what the law requires of
employers opting to pay by the month is to assure that "the monthly
minimum wage shall not be less than the statutory minimum wage
multiplied by 365 days divided by twelve," 17 and to pay that salary
"for all days in the month whether worked or not," and
"irrespective of the number of working days therein."

In promulgating the orders complained of the public respondents
have attempted to legislate, or interpret legal provisions in such a
manner as to create obligations where none are intended. They have
acted without authority, or at the very least, with grave abuse of
their discretion. Their acts must be nullified and set aside.