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G.R. No.

L-4148 July 16, 1952


MANILA TERMINAL COMPANY, INC., petitioner,
vs.
THE COURT OF INDUSTRIAL RELATIONS and MANILA TERMINAL RELIEF AND
MUTUAL AID ASSOCIATION, respondents.
Perkins, Ponce Enrile and Contreras for petitioner.
Antonio V. Raquiza, Honesto Ricobal and Perfecto E. Llacarfor respondent Association.
Mariano R. Padilla for respondent Court of Industrial Relations.
PARAS, C. J .:
On September 1, 1945, the Manila Terminal Company, Inc. hereinafter to be referred as to the
petitioner, undertook the arrastre service in some of the piers in Manila's Port Area at the request
and under the control of the United States Army. The petitioner hired some thirty men as
watchmen on twelve-hour shifts at a compensation of P3 per day for the day shift and P6 per day
for the night shift. On February 1, 1946, the petitioner began the postwar operation of the arrastre
service at the present at the request and under the control of the Bureau of Customs, by virtue of
a contract entered into with the Philippine Government. The watchmen of the petitioner
continued in the service with a number of substitutions and additions, their salaries having been
raised during the month of February to P4 per day for the day shift and P6.25 per day for the
nightshift. On March 28, 1947, Dominador Jimenez, a member of the Manila Terminal Relief
and Mutual Aid Association, sent a letter to the Department of Labor, requesting that the matter
of overtime pay be investigated, but nothing was done by the Department. On April 29, 1947,
Victorino Magno Cruz and five other employees, also member of the Manila Transit Mutual Aid
Association, filed a 5-point demand with the Department of Labor, including overtime pay, but
the Department again filed to do anything about the matter. On May 27, 1947, the petitioner
instituted the system of strict eight-hour shifts. On June 19, 1947, the Manila Port Terminal
Police Association, not registered in accordance with the provisions of Commonwealth Act No.
213, filed a petition with the Court of Industrial Relations. On July 16, 1947, the Manila
Terminal Relief and Mutual Aid Association was organized for the first time, having been
granted certificate No. 375 by the Department of Labor. On July 28, 1947, Manila Terminal
Relief and Mutual Aid Association filed an amended petition with the Court of Industrial
Relations praying, among others, that the petitioner be ordered to pay its watchmen or police
force overtime pay from the commencement of their employment. On May 9, 1949, by virtue of
Customs Administrative Order No. 81 and Executive Order No. 228 of the President of the
Philippines, the entire police force of the petitioner was consolidated with the Manila Harvor
Police of the Customs Patrol Service, a Government agency under the exclusive control of the
Commissioner of Customs and the Secretary of Finance The Manila Terminal Relief and Mutual
Aid Association will hereafter be referred to as the Association.
Judge V. Jimenez Yanson of the Court of Industrial Relations in his decision of April 1, 1950, as
amended on April 18, 1950, while dismissing other demands of the Association for lack of
jurisdiction, ordered the petitioner to pay to its police force
(a) Regular or base pay corresponding to four hours' overtime plus 25 per cent thereof as
additional overtime compensation for the period from September 1, 1945 to May 24, 1947;
(b) Additional compensation of 25 per cent to those who worked from 6:00 p.m. to 6:00 a.m.
during the same period:
(c) Additional compensation of 50 per cent for work performed on Sundays and legal holidays
during the same period;
(d) Additional compensation of 50 per cent for work performed on Sundays and legal holidays
from May 24, 1947 to May 9, 1949; and
(e) Additional compensation of 25 per cent for work performed at night from May 29, 1947 to
May 9, 1949.
With reference to the pay for overtime service after the watchmen had been integrated into the
Manila Harbor Police, Judge Yanson ruled that the court has no jurisdiction because it affects the
Bureau of Customs, an instrumentality of the Government having no independent personality
and which cannot be sued without the consent of the State. (Metran vs. Paredes, 45. Off. Gaz.,
2835.)
The petitioner find a motion for reconsideration. The Association also filed a motion for
reconsideration in so far its other demands were dismissed. Judge Yanson, concurred in by Judge
Jose S. Bautista, promulgated on July 13, 1950, a resolution denying both motions for
reconsideration. Presiding Judge Arsenio C. Roldan, in a separate opinion concurred in by Judge
Modesto Castillo, agreed with the decision of Judge Yanson of April 1, 1950, as to the dismissal
of other demands of the Association, but dissented therefrom as to the granting of overtime pay.
In a separate decisive opinion, Judge Juan S. Lanting concurred in the dismissal of other
demands of the Association. With respect to overtime compensation, Judge Lanting ruled:
1. The decision under review should be affirmed in so far it grants compensation for overtime on
regular days (not Sunday and legal holidays)during the period from the date of entrance to duty
to May 24, 1947, such compensation to consists of the amount corresponding to the four hours'
overtime at the regular rate and an additional amount of 25 per cent thereof.
2. As to the compensation for work on Sundays and legal holidays, the petitioner should pay to
its watchmen the compensation that corresponds to the overtime (in excess of 8 hours) at the
regular rate only, that is, without any additional amount, thus modifying the decision under
review accordingly.
3. The watchmen are not entitled to night differential pay for past services, and therefore the
decision should be reversed with the respect thereto.
The petitioner has filed a present petition for certiorari. Its various contentions may be briefly
summed up in the following propositions: (1) The Court of Industrial Relations has no
jurisdiction to render a money judgment involving obligation in arrears. (2) The agreement under
which its police force were paid certain specific wages for twelve-hour shifts, included overtime
compensation. (3) The Association is barred from recovery by estoppel and laches. (4) the nullity
or invalidity of the employment contract precludes any recovery by the Association. (5)
Commonwealth Act No. 4444 does not authorize recovery of back overtime pay.
The contention that the Court of Industrial Relations has no jurisdiction to award a money
judgment was already overruled by this Court in G.R. No. L-4337, Detective & protective
Bureau, Inc. vs. Court of Industrial Relations and United Employees Welfare Association, 90
Phil., 665, in this wise: "It is also argued that the respondent court has no jurisdiction to award
overtime pay, which is money judgment. We believe that under Commonwealth Act No. 103 the
Court is empowered to make the order for the purpose of settling disputes between the employer
and employee
1
. As a matter of fact this Court has confirmed an order of the Court of Industrial
Relations requiring the Elks Club to pay to its employees certain sum of money as overtime back
wages from June 3, 1939 to March 13, 1941. This, in spite the allegation of lack or excess of
jurisdiction on the part of said court. (45 Off. Gaz., 3829; 80 Phil. 272)"
The important point stressed by the petitioner is that the contract between it and the Association
upon the commencement of the employment of its watchman was to the certain rates of pay,
including overtime compensation namely, P3 per day for the day shift and P6 per day for night
shift beginning September 1, 1945, and P4 per day shift and P6.25 per day for the night shift
since February, 1946. The record does not bear out these allegations. The petitioner has relied
merely on the facts that its watchmen had worked on twelve-hour shifts at specific wages per day
and that no complaint was made about the matter until, first on March 28, 1947 and, secondly, on
April 29, 1947.
In times of acute unemployment, the people, urged by the instinct of self-preservation, go from
place to place and from office to office in search for any employment, regardless of its terms and
conditions, their main concern in the first place being admission to some work. Specially for
positions requiring no special qualifications, applicants would be good as rejected if they ever try
to be inquisitive about the hours of work or the amount of salary, ever attempt to dictate their
terms. The petitioner's watchmen must have railroaded themselves into their employment, so to
speak, happy in the thought that they would then have an income on which to subsist. But, at the
same time, they found themselves required to work for twelve hours a day. True, there was
agreement to work, but can it fairly be supposed that they had the freedom to bargain in any way,
much less to insist in the observance of the Eight Hour Labor Law?
As was aptly said in Floyd vs. Du Bois Soap Co., 1942, 317 U. S. 596, 63 Sup. Ct. 159; 6 CCH
Labor Cases, Par. 51, 147, "A contract of employment, which provides for a weekly wage for a
specified number of hours, sufficient to cover both the statutory minimum wage and overtime
compensation, if computed on the basis of the statutory minimum wage, and which makes no
provision for a fixed hourly rate or that the weekly wage includes overtime compensation, does
not meet the requirements of the Act."
Moreover, we note that after the petition had instituted the strict eight-hour shifts, no reduction
was made in the salaries which its watchmen received under the twelve hour arrangement.
Indeed, as admitted by the petitioner, "when the members or the respondent union were placed
on strict eight-hour shifts, the lowest salary of all the members of the respondent union was P165
a month, or P5.50 daily, for both day and night shifts." Although it may be argued that the salary
for the night shift was somewhat lessened, the fact that the rate for the day shift was increased in
a sense tends to militate against the contention that the salaries given during the twelve-hour
shifts included overtime compensation.
Petitioner's allegation that the association had acquiesced in the twelve-hour shifts for more than
18 months, is not accurate, because the watchmen involved in this case did not enter the service
of the petitioner, at one time, on September 1, 1945. As Judge Lanting found, "only one of them
entered the service of the company on said date, very few during the rest of said month, some
during the rest of that year (1945) and in 1946, and very many in 1947, 1948 and 1949."
The case at bar is quite on all fours with the case of Detective & Protective Bureau, Inc. vs.
Court of Industrial Relations and United Employees Welfare Association, supra, in which the
facts were as follows: "The record discloses that upon petition properly submitted, said court
made an investigation and found that the members of the United Employees Welfare Association
(hereafter called the Association) were in the employ of the petitioner Detective and Protective
Bureau, Inc. (herein called the Bureau) which is engaged in the business of furnishing security
guards to commercial and industrial establishments, paying to said members monthly salaries out
of what it received from the establishments benefited by guard service. The employment called
for daily tours of duty for more than eight hours, in addition to work on Sundays and holidays.
Nonetheless the members performed their labors without receiving extra compensation." The
only difference is that, while in said case the employees concerned were paid monthly salaries, in
the case now before us the wages were computed daily. In the case cited, we held the following:
It appears that the Bureau had been granting the members of the Association, every
month, "two days off" days in which they rendered no service, although they received
salary for the whole month. Said Bureau contended below that the pay corresponding to
said 2 day vacation corresponded to the wages for extra work. The court rejected the
contention, quite properly we believe, because in the contract there was no agreement to
that effect; and such agreement, if any, would probably be contrary to the provisions of
the Eight-Hour Law (Act No. 444, sec. 6) and would be null and void ab initio.
It is argued here, in opposition to the payment, that until the commencement of this
litigation the members of the Association never claimed for overtime pay. That may be
true. Nevertheless the law gives them the right to extra compensation. And they could not
be held to have impliedly waived such extra compensation, for the obvious reason that
could not have expressly waived it.
The foregoing pronouncements are in point. The Association cannot be said to have impliedly
waived the right to overtime compensation, for the obvious reason that they could not have
expressly waived it."
The principle of estoppel and the laches cannot well be invoked against the Association. 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 or laborer 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 any claim which may cause the employer to devise a way for
exercising his right to terminate the employment.
If the principle of estoppel and laches is to be applied, it may bring about a situation, whereby
the employee or laborer, who cannot expressly renounce their 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 purpose of law by indirection.
While counsel for the petitioner has cited authorities in support of the doctrine invoked, there are
also authorities pointed out in the opinion of Judge Lanting to the contrary. Suffice it to say, in
this connection, that we are inclined to rule adversely against petitioner for the reasons already
stated.
The argument that the nullity or invalidity of the employment contract precludes recovery by the
Association of any overtime pay is also untenable. The argument, based on the supposition that
the parties are in pari delicto, was in effect turned down in Gotamo Lumber Co. vs. Court of
Industrial Relations,
*
47 Off. Gaz., 3421, wherein we ruled: "The petitioner maintains that as the
overtime work had been performed without a permit from the Department of Labor, no extra
compensation should be authorized. Several decisions of this court are involved. But those
decisions were based on the reasoning that as both the laborer and employer were duty bound to
secure the permit from the Department of Labor, both were in pari delicto. However the present
law in effect imposed that duty upon the employer (C.A. No. 444). Such employer may not
therefore be heard to plead his own neglect as exemption or defense.
The employee in rendering extra service at the request of his employer has a right to
assume that the latter has complied with the requirement of the law, and therefore has
obtained the required permission from the Department of Labor.
Moreover, the Eight-Hour Law, in providing that "any agreement or contract between the
employer and the laborer or employee contrary to the provisions of this Act shall be null avoid
ab initio," (Commonwealth Act No. 444, sec. 6), obviously intended said provision for the
benefit of the laborers or employees. The employer cannot, therefore, invoke any violation of the
act to exempt him from liability for extra compensation. This conclusion is further supported by
the fact that the law makes only the employer criminally liable for any violation. It cannot be
pretended that, for the employer to commit any violation of the Eight-Hour Labor Law, the
participation or acquiescence of the employee or laborer is indispensable, because the latter in
view of his need and desire to live, cannot be considered as being on the same level with the
employer when it comes to the question of applying for and accepting an employment.
Petitioner also contends that Commonwealth Act No. 444 does not provide for recovery of back
overtime pay, and to support this contention it makes referrence to the Fair Labor Standards Act
of the United States which provides that "any employer who violates the provisions of section
206 and section 207 of this title shall be liable to the employee or employees affected in the
amount of their unpaid minimum wages or their unpaid overtime compensation as the case may
be," a provision not incorporated in Commonwealth Act No. 444, our Eight-Hour Labor Law.
We cannot agree to the proposition, because sections 3 and 5 of Commonwealth Act 444
expressly provides for the payment of extra compensation in cases where overtime services are
required, with the result that the employees or laborers are entitled to collect such extra
compensation for past overtime work. To hold otherwise would be to allow an employer to
violate the law by simply, as in this case, failing to provide for and pay overtime compensation.
The point is stressed that the payment of the claim of the Association for overtime pay covering
a period of almost two years may lead to the financial ruin of the petitioner, to the detriment of
its employees themselves. It is significant, however, that not all the petitioner's watchmen would
receive back overtime pay for the whole period specified in the appealed decision, since the
record shows that the great majority of the watchmen were admitted in 1946 and 1947, and even
1948 and 1949. At any rate, we are constrained to sustain the claim of the Association as a matter
of simple justice, consistent with the spirit and purpose of the Eight-Hour Labor Law. The
petitioner, in the first place, was required to comply with the law and should therefore be made
liable for the consequences of its violation.
It is high time that all employers were warned that the public is interested in the strict
enforcement of the Eight-Hour Labor Law. This was designed not only to safeguard the health
and welfare of the laborer or employee, but in a way to minimize unemployment by forcing
employers, in cases where more than 8-hour operation is necessary, to utilize different shifts of
laborers or employees working only for eight hours each.
Wherefore, the appealed decision, in the form voted by Judge Lanting, is affirmed, it being
understood that the petitioner's watchmen will be entitled to extra compensation only from the
dates they respectively entered the service of the petitioner, hereafter to be duly determined by
the Court of Industrial Relations. So ordered, without costs.
Feria, Pablo, Bengzon, Padilla, Tuason, Bautista Angelo, and Labrador, JJ., concur.
G.R. No. L-4148 July 16, 1952

MANILA TERMINAL COMPANY, INC., petitioner,
vs.
THE COURT OF INDUSTRIAL RELATIONS and MANILA TERMINAL RELIEF AND MUTUAL AID
ASSOCIATION,respondents.

Facts:

Manila Terminal Company, Inc. hereinafter to be referred as to the petitioner, undertook the arrastre
service in some of the piers in Manila's Port Area at the request and under the control of the United
States Army. The petitioner hired some thirty men as watchmen on twelve-hour shifts at a
compensation of P3 per day for the day shift and P6 per day for the night shift.

The watchmen of the petitioner continued in the service with a number of substitutions and additions,
their salaries having been raised during the month of February to P4 per day for the day shift and P6.25
per day for the nightshift. The private respondent sent a letter to Department of Labor requesting that
the matter of overtime pay be investigated. But nothing was done by the Dept of Labor.

Later on, the petitioner instituted the system of strict eight-hour shifts.

The private respondent filed an amended petition with the Court of Industrial Relations praying, among
others, that the petitioner be ordered to pay its watchmen or police force overtime pay from the
commencement of their employment.

By virtue of Customs Administrative Order No. 81 and Executive Order No. 228 of the President of the
Philippines, the entire police force of the petitioner was consolidated with the Manila Harvor Police of
the Customs Patrol Service, a Government agency under the exclusive control of the Commissioner of
Customs and the Secretary of Finance The Manila Terminal Relief and Mutual Aid Association will
hereafter be referred to as the Association.

Judge V. Jimenez Yanson of the Court of Industrial Relations in his decision ordered the petitioner to pay
to its police force but regards to overtime service after the watchmen had been integrated into the
Manila Harbor Police, the has no jurisdiction because it affects the Bureau of Customs, an
instrumentality of the Government having no independent personality and which cannot be sued
without the consent of the State.
The petitioner filed a motion for reconsideration. The Association also filed a motion for reconsideration
in so far its other demands were dismissed. Both resolutions were denied.

The public respondent decision was to pay the private respondents their overtime on regular days at the
regular rate and additional amount of 25 percent, overtime on Sundays and legal holidays at the regular
rate only, and watchmen are not entitled to night differential pay for past services. The petitioner has
filed a present petition for certiorari.

Issues:

a. Whether or not the CIR has no jurisdiction to render a money judgment involving obligation in arrears.

b. Whether or not the agreement under which its police force were paid certain specific wages for
twelve-hour shifts, included overtime compensation.

c. Whether or not the Association is barred from recovery by estoppel and laches.

d. Whether or not the nullity or invalidity of the employment contract precludes any recovery by the
Association.

e. whether or not the Commonwealth Act No. 4444 does not authorize recovery of back overtime pay.

Held:

The Supreme Court affirmed the appealed decision that the petitioner's watchmen will be entitled to
extra compensation only from the dates they respectively entered the service of the petitioner,
hereafter to be duly determined by the Court of Industrial Relations.

On the first issue, the Court of Industrial Relations has no jurisdiction to award a money judgment was
already overruled by this Court on the case of Detective & protective Bureau, Inc. vs. Court of Industrial
Relations and United Employees Welfare Association that under Commonwealth Act No. 103 the Court
is empowered to make the order for the purpose of settling disputes between the employer and
employee.

On the second issue, based on the case of Detective & Protective Bureau, Inc. vs. Court of Industrial
Relations and United Employees Welfare Association, the law gives them the right to extra
compensation. And they could not be held to have impliedly waived such extra compensation, for the
obvious reason that could not have expressly waived it.

On the third issue, the principle of estoppel and the laches cannot well be invoked against the
Association. 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. If the principle of estoppel and laches is to
be applied, the employee may be compelled to accomplish the same thing by mere silence or lapse of
time, thereby frustrating the purpose of law by indirection.

On the fourth issue, the employee in rendering extra service at the request of his employer has a right to
assume that the latter has complied with the requirement of the law, and therefore has obtained the
required permission from the Department of Labor. This was based on the case of Gotamo Lumber Co.
vs. Court of Industrial Relations, wherein both parties are in pari delicto. Moreover, the Eight-Hour Law,
in providing that "any agreement or contract between the employer and the laborer or employee
contrary to the provisions of this Act shall be null avoid ab initio.

On the fifth issue, based on Fair Labor Standards Act of the United States which provides that "any
employer who violates the provisions of section 206 and section 207 of this title shall be liable to the
employee or employees affected in the amount of their unpaid minimum wages or their unpaid
overtime compensation as the case may be," a provision not incorporated in Commonwealth Act No.
444, our Eight-Hour Labor Law.

We cannot agree to the proposition, because sections 3 and 5 of Commonwealth Act 444 expressly
provides for the payment of extra compensation in cases where overtime services are required, with the
result that the employees or laborers are entitled to collect such extra compensation for past overtime
work. To hold otherwise would be to allow an employer to violate the law by simply, as in this case,
failing to provide for and pay overtime compensation.

G.R. No. 119205 April 15, 1998
SIME DARBY PILIPINAS, INC. petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION (2ND DIVISION) and SIME DARBY SALARIED EMPLOYEES ASSOCIATION (ALU-
TUCP), respondents.

BELLOSILLO, J .:
Is the act of management in revising the work schedule of its employees and discarding their paid lunch break constitutive of unfair labor
practice?
Sime Darby Pilipinas, Inc., petitioner, is engaged in the manufacture of automotive tires, tubes and other rubber products. Sime Darby
Salaried Employees Association (ALU-TUCP), private respondent, is an association of monthly salaried employees of petitioner at its
Marikina factory. Prior to the present controversy, all company factory workers in Marikina including members of private respondent union
worked from 7:45 a.m. to 3:45 p.m. with a 30-minute paid "on call" lunch break.
On 14 August 1992 petitioner issued a memorandum to all factory-based employees advising all its monthly salaried employees in its
Marikina Tire Plant, except those in the Warehouse and Quality Assurance Department working on shifts, a change in work schedule
effective 14 September 1992 thus
TO: ALL FACTORY-BASED EMPLOYEES
RE: NEW WORK SCHEDULE
Effective Monday, September 14, 1992, the new work schedule of the factory office will be as follows:
7:45 A.M. 4:45 P.M. (Monday to Friday)
7:45 A.M. 11:45 A.M. (Saturday).
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.
Lunch break will be between:
12:00 NN 1:00 P.M. (Monday to Friday).
Excluded from the above schedule are the Warehouse and QA employees who are on shifting. Their work and break time
schedules will be maintained as it is now.
1

Since private respondent felt affected adversely by the change in the work schedule and discontinuance
of the 30-minute paid "on call" lunch break, it filed on behalf of its members a complaint with the Labor
Arbiter for unfair labor practice, discrimination and evasion of liability pursuant to the resolution of this
Court in Sime Darby International Tire Co., Inc. v. NLRC.
2
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 unjustly 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. He
also ruled that the decision in the earlier Sime Darby case
3
was not applicable to the instant case
because the former involved discrimination of certain employees who were not paid for their 30-minute
lunch break while the rest of the factory workers were paid; hence, this Court ordered that the
discriminated employees be similarly paid the additional compensation for their lunch break.
Private respondent appealed to respondent National Labor Relations Commission (NLRC) which
sustained the Labor Arbiter and dismissed the appeal.
4
However, upon motion for reconsideration by
private respondent, the NLRC, this time with two (2) new commissioners replacing those who earlier
retired, reversed its earlier decision of 20 April 1994 as well as the decision of the Labor Arbiter.
5
The
NLRC considered the decision of this Court in the Sime Darby case of 1990 as the law of the case
wherein petitioner was ordered to pay "the money value of these covered employees deprived of lunch
and/or working time breaks." The public respondent declared that the new work schedule deprived the
employees of the benefits of a time-honored company practice of providing its employees a 30-minute
paid lunch break resulting in an unjust diminution of company privileges prohibited by Art. 100 of the
Labor Code, as amended. Hence, this petition alleging that public respondent committed grave abuse of
discretion amounting to lack or excess of jurisdiction: (a) in ruling that petitioner committed unfair labor
practice in the implementation of the change in the work schedule of its employees from 7:45 a.m. 3:45
p.m. to 7:45 a.m. 4:45 p.m. with one-hour lunch break from 12:00 nn to 1:00 p.m.; (b) in holding that
there was diminution of benefits when the 30-minute paid lunch break was eliminated; (c) in failing to
consider that in the earlier Sime Darby case affirming the decision of the NLRC, petitioner was authorized
to discontinue the practice of having a 30-minute paid lunch break should it decide to do so; and, (d) in
ignoring petitioner's inherent management prerogative of determining and fixing the work schedule of its
employees which is expressly recognized in the collective bargaining agreement between petitioner and
private respondent.
The Office of the Solicitor General filed in a lieu of comment a manifestation and motion recommending
that the petitioner be granted, alleging that the 14 August 1992 memorandum which contained the new
work schedule was not discriminatory of the union members nor did it constitute unfair labor practice on
the part of petitioner.
We agree, hence, we sustain petitioner. The right to fix the work schedules of the employees rests
principally on their employer. In the instant case petitioner, as the employer, cites as reason for the
adjustment the efficient conduct of its business operations and its improved production.
6
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.
7
Besides, the new
schedule applies to all employees in the factory similarly situated whether they are union members or not.

8

Consequently, it was grave abuse of discretion for public respondent to equate the earlier Sime Darby
case
9
with the facts obtaining in this case. That ruling in the former case is not applicable here. The issue
in that case involved the matter of granting lunch breaks to certain employees while depriving the other
employees of such breaks. This Court affirmed in that case the NLRC's finding that such act of
management was discriminatory and constituted unfair labor practice.
The case before us does not pertain to any controversy involving discrimination of employees but only the
issue of whether the change of work schedule, which management deems necessary to increase
production, constitutes unfair labor practice. As shown by the records, the change effected by
management with regard to working time is made to apply to all factory employees engaged in the same
line of work whether or not they are members of private respondent union. Hence, it cannot be said that
the new scheme adopted by management prejudices the right of private respondent to self-organization.
Every business enterprise endeavors to increase its profits. In the process, it may devise means to attain
that goal. Even as the law is solicitous of the welfare of the employees, it must also protect the right of an
employer to exercise what are clearly management prerogatives.
10
Thus, management is free to regulate,
according to its own discretion and judgment, all aspects of employment, including hiring, work
assignments, working methods, time, place and manner of work, processes to be followed, supervision of
workers, working regulations, transfer of employees, work supervision, lay off of workers and discipline,
dismissal and recall of workers.
11
Further, management retains the prerogative, whenever exigencies of
the service so require, to change the working hours of its employees. So long as such prerogative is
exercised in good faith for the advancement of the employer's interest and not for the purpose of
defeating or circumventing the rights of the employees under special laws or under valid agreements, this
Court will uphold such exercise.
12

While the Constitution is committed to the policy of social justice and the protection of the working class, it
should not be supposed that every dispute will be automatically decided in favor of labor. Management
also has rights which, as such, are entitled to respect and enforcement in the interest of simple fair play.
Although this Court has inclined more often than not toward the worker and has upheld his cause in his
conflicts with the employer, such favoritism has not blinded the Court to the rule that justice is in every
case for the deserving, to be dispensed in the light of the established facts and the applicable law and
doctrine.
13

WHEREFORE, the Petition is GRANTED. The Resolution of the National Labor Relations Commission
dated 29 November 1994 is SET ASIDE and the decision of the Labor Arbiter dated 26 November 1993
dismissing the complaint against petitioner for unfair labor practice is AFFIRMED.
SO ORDERED.
Davide, Jr., Vitug, Panganiban and Quisumbing, JJ., concur.
Sime Darby Pilipinas vs. NLRC [G.R. No. 119205, April 15, 1998]
Facts: Petitioner is engaged in the manufacture of automotive
tires, tubes and other rubber products. Private respondent is an
association of monthly salaried employees of petitioner at its
Marikina factory. Beforehand, all company factory workers in
Marikina including members of private respondent union
worked from 7:45am to 3:45pm with a 30-minute paid on call
lunch break.

Petitioner issued a memorandum to all factory- based employees
advising all its monthly salaried employees in its Marikina Tire
Plant, except those in the Warehouse and Quality Assurance
Department working on shifts.

Private respondent felt affected adversely by the change in the
work schedule and discontinuance of the 30-minute paid on
call lunch break, hence the filling of complaint for unfair labor
practice, discrimination and evasion of liability. The Labor
Article dismissed the complainant on the ground that the change
in the work schedule and the elimination of the 30-minute paid
lunch break of factory workers constituted a valid exercise of
management prerogative and did not decrease the benefits
granted to factory workers as the working time did not go
beyond 8 hours. Hence, this petition.

Issue: Whether or not there was a diminution of benefits when
the 30-minute paid lunch break was eliminated

Held: The right to fix the work, schedules of the employees
rests principally on their employer. The petitioner cities as
reason for the adjustment the efficient conduct of its business
operations and its improved production. Since the employees are
no longer required during this one-hour lunch break, there is no
more need for them to be compensated for this period. The new
work schedule fully complies with the daily work period of eight
(8) hours without violating the Labor Code. Also, the new
schedule applies to all employees in the factory similarly
situated whether they are union members or not; Even as the law
is solicitous of the welfare of the employees; it must also protect
the right of an employer to exercise what are clearly
management prerogatives; Management retains the prerogative,
whenever exigencies of the service so require, to change the
working hours of its employees Petition is granted. The
dismissed complaint against petitioner for unfair labor practice
is affirmed.

G.R. No. 78210 February 28, 1989
TEOFILO ARICA, DANILO BERNABE, MELQUIADES DOHINO, ABONDIO
OMERTA, GIL TANGIHAN, SAMUEL LABAJO, NESTOR NORBE, RODOLFO
CONCEPCION, RICARDO RICHA, RODOLFO NENO, ALBERTO BALATRO,
BENJAMIN JUMAMOY, FERMIN DAAROL, JOVENAL ENRIQUEZ, OSCAR BASAL,
RAMON ACENA, JAIME BUGTAY, and 561 OTHERS, HEREIN REPRESENTED BY
KORONADO B. APUZEN, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, HONORABLE FRANKLIN
DRILON, HONORABLE CONRADO B. MAGLAYA, HONORABLE ROSARIO B.
ENCARNACION, and STANDARD (PHILIPPINES) FRUIT
CORPORATION, respondents.
Koronado B. Apuzen and Jose C. Espinas for petitioners.
The Solicitor General for public respondent.
Dominguez & Paderna Law Offices Co. for private respondent.
D E C I S I O N
PARAS, J.:
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.
This case stemmed from a complaint filed on April 9, 1984 against private respondent Stanfilco
for assembly time, moral damages and attorneys fees, with the aforementioned Regional
Arbitration Branch No. XI, Davao City.
After the submission by the parties of their respective position papers (Annex C, pp. 30-40;
Annex D, Rollo, pp. 41-50), Labor Arbiter Pedro C. Ramos rendered a decision dated October
9, 1985 (Annex E, Rollo, pp. 51-58) in favor of private respondent STANFILCO, holding that:
Given these facts and circumstances, we cannot but agree with respondent that the
pronouncement in that earlier case, i.e. the thirty-minute assembly time long practiced cannot be
considered waiting time or work time and, therefore, not compensable, has become the law of the
case which can no longer be disturbed without doing violence to the time- honored principle
of res judicata.
WHEREFORE, in view of the foregoing considerations, the instant complaint should therefore
be, as it is hereby, DISMISSED.
SO ORDERED. (Rollo, p. 58)
On December 12, 1986, after considering the appeal memorandum of complainant and the
opposition of respondents, the First Division of public respondent NLRC composed of Acting
Presiding Commissioner Franklin Drilon, Commissioner Conrado Maglaya, Commissioner
Rosario D. Encarnacion as Members, promulgated its Resolution, upholding the Labor Arbiters
decision. The Resolutions dispositive portion reads:
Surely, the customary functions referred to in the above- quoted provision of the agreement
includes the long-standing practice and institutionalized non-compensable assembly time. This,
in effect, estopped complainants from pursuing this case.
The Commission cannot ignore these hard facts, and we are constrained to uphold the dismissal
and closure of the case.
WHEREFORE, let the appeal be, as it is hereby dismissed, for lack of merit.
SO ORDERED. (Annex H, Rollo, pp. 86-89).
On January 15, 1987, petitioners filed a Motion for Reconsideration which was opposed by
private respondent (Annex I, Rollo, pp. 90-91; Annex J Rollo, pp. 92-96).
Public respondent NLRC, on January 30, 1987, issued a resolution denying for lack of merit
petitioners motion for reconsideration (Annex K, Rollo, p. 97).
Hence this petition for review on certiorari filed on May 7, 1987.
The Court in the resolution of May 4, 1988 gave due course to this petition.
Petitioners assign the following issues:
1) Whether or not the 30-minute activity of the petitioners before the scheduled working time is
compensable under the Labor Code.
2) Whether or not res judicata applies when the facts obtaining in the prior case and in the case
at bar are significantly different from each other in that there is merit in the case at bar.
3) Whether or not there is finality in the decision of Secretary Ople in view of the compromise
agreement novating it and the withdrawal of the appeal.
4) Whether or not estoppel and laches lie in decisions for the enforcement of labor standards
(Rollo, p. 10).
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 oclock in the morning) since
these preliminary activities are necessarily and primarily for private respondents 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 Laborers 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 respondents 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)
Noteworthy is the decision of the Minister of Labor, on 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.
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 farm 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
merit.
As aptly observed by the Solicitor General that this petition is clearly violative of the familiar
principle of res judicata. There will be no end to this controversy if the light of the Minister of
Labors decision dated May 12, 1979 that had long acquired the character of finality and which
already resolved that petitioners thirty (30)-minute assembly time is not compensable, the same
issue can be re-litigated again. (Rollo, p. 183)
This Court has held:
In this connection account should be taken of the cognate principle that res judicata operates to
bar not only the relitigation in a subsequent action of the issues squarely raised, passed upon and
adjudicated in the first suit, but also the ventilation in said subsequent suit of any other issue
which could have been raised in the first but was not. The law provides that the judgment or
order is, with respect to the matter directly adjudged or as to any other matter that could have
been raised in relation thereto, conclusive between the parties and their successors in interest by
title subsequent to the commencement of the action .. litigating for the same thing and in the
same capacity. So, even if new causes of action are asserted in the second action (e.g. fraud,
deceit, undue machinations in connection with their execution of the convenio de transaccion),
this would not preclude the operation of the doctrine of res judicata. Those issues are also
barred, even if not passed upon in the first. They could have been, but were not, there raised.
(Vda. de Buncio v. Estate of the late Anita de Leon, 156 SCRA 352 [1987]).
Moreover, as a rule, the findings of facts of quasi-judicial agencies which have acquired
expertise because their jurisdiction is confined to specific matters are accorded not only respect
but at times even finality if such findings are supported by substantial evidence (Special Events
& Central Shipping Office Workers Union v. San Miguel Corporation, 122 SCRA 557 [1983];
Dangan v. NLRC, 127 SCRA 706 [1984]; Phil. Labor Alliance Council v. Bureau of Labor
Relations, 75 SCRA 162 [1977]; Mamerto v. Inciong, 118 SCRA 265 (1982]; National
Federation of Labor Union (NAFLU) v. Ople, 143 SCRA 124 [1986]; Edi-Staff Builders
International, Inc. v. Leogardo, Jr., 152 SCRA 453 [1987]; Asiaworld Publishing House, Inc. v.
Ople, 152 SCRA 219 [1987]).
The records show that the Labor Arbiters decision dated October 9, 1985 (Annex E, Petition)
pointed out in detail the basis of his findings and conclusions, and no cogent reason can be found
to disturb these findings nor of those of the National Labor Relations Commission which
affirmed the same.
PREMISES CONSIDERED, the petition is DISMISSED for lack of merit and the decision of
the National Labor Relations Commission is AFFIRMED.
SO ORDERED.
Melencio-Herrera (Chairperson), Padilla and Regalado, JJ., concur.
Teofilo Arica et al and 561 others sued Standard Fruits Corporation (STANFILCO) Philippines
for allegedly not paying the workers for their assembly time which takes place every work day
from 5:30am to 6am. The assembly time consists of the roll call of the workers; their getting of
assignments from the foreman; their filling out of the Laborers Daily Accomplishment Report;
their getting of tools and equipments from the stockroom; and their going to the field to work.
The workers alleged that this is necessarily and primarily for STANFILCOs benefit.
ISSUE: Whether or not the workers assembly time should be paid.
HELD: No. The thirty 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 . . .
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. 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.