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G.R. No. 144664 March 15, 2004
ASIAN TRANSMISSION CORPORATION, petitioner,
vs.
The Hon. COURT OF APPEALS, Thirteenth Division, HON. FROILAN
M. BACUNGAN as Voluntary Arbitrator, KISHIN A. LALWANI,
Union, Union representative to the Panel Arbitrators; BISIG NG
ASIAN TRANSMISSION LABOR UNION (BATLU); HON. BIENVENIDO
T. LAGUESMA in his capacity as Secretary of Labor and
Employment; and DIRECTOR CHITA G. CILINDRO in her capacity as
Director of Bureau of Working Conditions, respondents.

D E C I S I O N
CARPIO-MORALES, J.:
Petitioner, Asian Transmission Corporation, seeks via petition
for certiorari under Rule 65 of the 1995 Rules of Civil Procedure the
nullification of the March 28, 2000 Decision
1
of the Court of Appeals
denying its petition to annul 1) the March 11, 1993 "Explanatory
Bulletin"
2
of the Department of Labor and Employment (DOLE)
entitled "Workers’ Entitlement to Holiday Pay on April 9, 1993,
Araw ng Kagitingan and Good Friday", which bulletin the DOLE
reproduced on January 23, 1998, 2) the July 31, 1998 Decision
3
of
the Panel of Voluntary Arbitrators ruling that the said explanatory
bulletin applied as well to April 9, 1998, and 3) the September 18,
1998
4
Resolution of the Panel of Voluntary Arbitration denying its
Motion for Reconsideration.

The following facts, as found by the Court of Appeals, are
undisputed:
The Department of Labor and Employment (DOLE), through
Undersecretary Cresenciano B. Trajano, issued an Explanatory
Bulletin dated March 11, 1993 wherein it clarified, inter alia, that
employees are entitled to 200% of their basic wage on April 9, 1993,
whether unworked, which[,] apart from being Good Friday [and,
therefore, a legal holiday], is also Araw ng Kagitingan [which is also
a legal holiday]. The bulletin reads:
"On the correct payment of holiday compensation on April 9, 1993
which apart from being Good Friday is also Araw ng Kagitingan,
i.e., two regular holidays falling on the same day, this Department is
of the view that the covered employees are entitled to at least two
hundred percent (200%) of their basic wage even if said holiday is
unworked. The first 100% represents the payment of holiday pay on
April 9, 1993 as Good Friday and the second 100% is the payment of
holiday pay for the same date as Araw ng Kagitingan.

Said bulletin was reproduced on January 23, 1998, when April 9,
1998 was both Maundy Thursday and Araw ng Kagitingan x x x x
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. x x x x 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 which covers two regular
holidays, namely,Araw ng Kagitignan and Maundy Thursday."
(Emphasis and underscoring supplied)

Subject of interpretation in the case at bar is Article 94 of the Labor
Code which reads:
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;
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(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; and
(c) As used in this Article, "holiday" includes: New Year’s Day,
Maundy Thursday, Good Friday, the ninth of April, the first of May,
the twelfth of June, the fourth of July, the thirtieth of November,
the twenty-fifth and thirtieth of December and the day designated
by law for holding a general election, which was amended by
Executive Order No. 203 issued on June 30, 1987, such that the
regular holidays are now:
1. New Year’s Day January 1
2. Maundy Thursday Movable Date
3. Good Friday Movable Date
4. Araw ng Kagitingan April 9 (Bataan and Corregidor Day)
5. Labor Day May 1
6. Independence Day June 12
7. National Heroes Day Last Sunday of August
8. Bonifacio Day November 30
9. Christmas Day December 25
10. Rizal Day December 30

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,
like on April 9, 1998 when it was Araw ng Kagitingan and at the
same time was Maundy Thursday; and that that the law, as
amended, enumerates ten regular holidays for every year 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."
In the assailed decision, 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 "[t]here is no condition,
qualification or exception for any variance from the clear intent that
all holidays shall be compensated."
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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."
By the present petition, petitioners raise the following issues:
I
WHETHER OR NOT THE RESPONDENT COURT OF APPEALS
COMMITTED GRAVE ABUSE OF DISCRETION IN ERRONEOUSLY
INTERPRETING THE TERMS OF THE COLLECTIVE BARGAINING
AGREEMENT BETWEEN THE PARTIES AND SUBSTITUTING ITS OWN
JUDGMENT IN PLACE OF THE AGREEMENTS MADE BY THE PARTIES
THEMSELVES
II
WHETHER OR NOT THE RESPONDENT COURT OF APPEALS
COMMITTED GRAVE ABUSE OF DISCRETION IN HOLDING THAT ANY
DOUBTS ABOUT THE VALIDITY OF THE POLICIES ENUNCIATED IN THE
EXPLANATORY BULLETIN WAS LAID TO REST BY THE REISSUANCE OF
THE SAID EXPLANATORY BULLETIN
III
WHETHER OR NOT THE RESPONDENT COURT OF APPEALS
COMMITTED GRAVE ABUSE OF DISCRETION IN UPHOLDING THE
VALIDITY OF THE EXPLANATORY BULLETIN EVEN WHILE ADMITTING
THAT THE SAID BULLEITN WAS NOT AN EXAMPLE OF A JUDICIAL,
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QUASI-JUDICIAL, OR ONE OF THE RULES AND REGULATIONS THAT
[Department of Labor and Employment] DOLE MAY PROMULGATE
IV
WHETHER OR NOT THE SECRETARY OF THE DEPARTMENT OF LABOR
AND EMPLOYMENT (DOLE) BY ISSUING EXPLANATORY BULLETIN
DATED MARCH 11, 1993, IN THE GUISE OF PROVIDING GUIDELINES
ON ART. 94 OF THE LABOR CODE, COMMITTED GRAVE ABUSE OF
DISCRETION, AS IT LEGISLATED AND INTERPRETED LEGAL
PROVISIONS IN SUCH A MANNER AS TO CREATE OBLIGATIONS
WHERE NONE ARE INTENDED BY THE LAW
V
WHETHER OR NOT THE RESPONDENT COURT OF APPEALS
COMMITTED GRAVE ABUSE OF DISCRETION IN SUSTAINING THE
SECRETARY OF THE DEPARTMENT OF LABOR IN REITERATING ITS
EXPLANATORY BULLETIN DATED MARCH 11, 1993 AND IN
ORDERING THAT THE SAME POLICY OBTAINED FOR APRIL 9, 1998
DESPITE THE RULINGS OF THE SUPREME COURT TO THE CONTRARY
VI
WHETHER OR NOT RESPONDENTS’ ACTS WILL DEPRIVE PETITIONER
OF PROPERTY WITHOUT DUE PROCESS BY THE "EXPLANATORY
BULLETIN" AS WELL AS EQUAL PROTECTION OF LAWS

The petition is devoid of merit.
At the outset, it bears noting that instead of assailing the Court of
Appeals Decision by petition for review oncertiorari under Rule 45
of the 1997 Rules of Civil Procedure, petitioner lodged the present
petition for certiorari under Rule 65.
[S]ince the Court of Appeals had jurisdiction over the petition under
Rule 65, any alleged errors committed by it in the exercise of its
jurisdiction would be errors of judgment which are reviewable by
timely appeal and not by a special civil action of certiorari. If the
aggrieved party fails to do so within the reglementary period, and
the decision accordingly becomes final and executory, he cannot
avail himself of the writ of certiorari, his predicament being the
effect of his deliberate inaction.
The appeal from a final disposition of the Court of Appeals is a
petition for review under Rule 45 and not a special civil action under
Rule 65 of the Rules of Court, now Rule 45 and Rule 65, respectively,
of the 1997 Rules of Civil Procedure. Rule 45 is clear that the
decisions, final orders or resolutions of the Court of Appeals in any
case, i.e., regardless of the nature of the action or proceeding
involved, may be appealed to this Court by filing a petition for
review, which would be but a continuation of the appellate process
over the original case. Under Rule 45 the reglementary period to
appeal is fifteen (15) days from notice of judgment or denial of
motion for reconsideration.
x x x
For the writ of certiorari under Rule 65 of the Rules of Court to
issue, a petitioner must show that he has no plain, speedy and
adequate remedy in the ordinary course of law against its perceived
grievance. A remedy is considered "plain, speedy and adequate" if it
will promptly relieve the petitioner from the injurious effects of the
judgment and the acts of the lower court or agency. In this case,
appeal was not only available but also a speedy and adequate
remedy.
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The records of the case show that following petitioner’s receipt on
August 18, 2000 of a copy of the August 10, 2000 Resolution of the
Court of Appeals denying its Motion for Reconsideration, it filed the
present petition for certiorari on September 15, 2000, at which time
the Court of Appeals decision had become final and executory, the
15-day period to appeal it under Rule 45 having expired.
Technicality aside, this Court finds no ground to disturb the assailed
decision.


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Holiday pay is a legislated benefit enacted as part of the
Constitutional imperative that the State shall afford protection to
labor.
7
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."
8
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.
9
The provision is
mandatory,
10
regardless of whether an employee is paid on a
monthly or daily basis.
11
Unlike a bonus, which is a management
prerogative,
12
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.
13
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.

Petitioner’s assertion that Wellington v. Trajano
14
has "overruled"
the DOLE March 11, 1993 Explanatory Bulletin does not lie.
In Wellington, the issue was whether monthly-paid employees are
entitled to an additional day’s pay if a holiday falls on a Sunday. This
Court, in answering the issue in the negative, observed that in fixing
the monthly salary of its employees, Wellington took into account
"every working day of the year including the holidays specified by
law and excluding only Sunday." In the instant case, the issue is
whether daily-paid employees are entitled to be paid for two
regular holidays which fall on the same day.
15

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.
16

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."
17







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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. Thus, the 1997-1998 CBA incorporates the
following provision:
ARTICLE XIV
PAID LEGAL HOLIDAYS
The following legal holidays shall be paid by the COMPANY as
required by law:
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.
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WHEREFORE, the petition is hereby DISMISSED.
SO ORDERED.
Vitug, (Chairman), Sandoval-Gutierrez, and Corona, JJ., concur.


















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G.R. No. 79255 January 20, 1992
UNION OF FILIPRO EMPLOYEES (UFE), petitioner,
vs.
BENIGNO VIVAR, JR., NATIONAL LABOR RELATIONS COMMISSION
and NESTLÉ PHILIPPINES, INC. (formerly FILIPRO,
INC.), respondents.
Jose C. Espinas for petitioner.
Siguion Reyna, Montecillo & Ongsiako for private respondent.

GUTIERREZ, JR., J.:
This labor dispute stems from the exclusion of sales personnel from
the holiday pay award and the change of the divisor in the
computation of benefits from 251 to 261 days.
On November 8, 1985, respondent Filipro, Inc. (now Nestle
Philippines, Inc.) filed with the National Labor Relations Commission
(NLRC) a petition for declaratory relief seeking a ruling on its rights
and obligations respecting claims of its monthly paid employees for
holiday pay in the light of the Court's decision in Chartered Bank
Employees Association v. Ople (138 SCRA 273 [1985]).
Both Filipro and the Union of Filipino Employees (UFE) agreed to
submit the case for voluntary arbitration and appointed respondent
Benigno Vivar, Jr. as voluntary arbitrator.
On January 2, 1980, Arbitrator Vivar rendered a decision directing
Filipro to: pay its monthly paid employees holiday pay pursuant to
Article 94 of the Code, subject only to the exclusions and limitations
specified in Article 82 and such other legal restrictions as are
provided for in the Code. (Rollo, p. 31)

Filipro filed a motion for clarification seeking (1) the limitation of
the award to three years, (2) the exclusion of salesmen, sales
representatives, truck drivers, merchandisers and medical
representatives (hereinafter referred to as sales personnel) from
the award of the holiday pay, and (3) deduction from the holiday
pay award of overpayment for overtime, night differential, vacation
and sick leave benefits due to the use of 251 divisor.
(Rollo, pp. 138-145)

Petitioner UFE answered that the award should be made effective
from the date of effectivity of the Labor Code, that their sales
personnel are not field personnel and are therefore entitled to
holiday pay, and that the use of 251 as divisor is an established
employee benefit which cannot be diminished.

On January 14, 1986, the respondent arbitrator issued an order
declaring that the effectivity of the holiday pay award shall retroact
to November 1, 1974, the date of effectivity of the Labor Code. He
adjudged, however, that the company's sales personnel are field
personnel and, as such, are not entitled to holiday pay. He likewise
ruled that with the grant of 10 days' holiday pay, the divisor should
be changed from 251 to 261 and ordered the reimbursement of
overpayment for overtime, night differential, vacation and sick
leave pay due to the use of 251 days as divisor.

Both Nestle and UFE filed their respective motions for partial
reconsideration. Respondent Arbitrator treated the two motions as
appeals and forwarded the case to the NLRC which issued a
resolution dated May 25, 1987 remanding the case to the
respondent arbitrator on the ground that it has no jurisdiction to
review decisions in voluntary arbitration cases pursuant to Article
263 of the Labor Code as amended by Section 10, Batas Pambansa
Blg. 130 and as implemented by Section 5 of the rules implementing
B.P. Blg. 130.




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However, in a letter dated July 6, 1987, the respondent arbitrator
refused to take cognizance of the case reasoning that he had no
more jurisdiction to continue as arbitrator because he had resigned
from service effective May 1, 1986.

Hence, this petition.
The petitioner union raises the following issues:
1) Whether or not Nestle's sales personnel are entitled to holiday
pay; and

2) Whether or not, concomitant with the award of holiday pay, the
divisor should be changed from 251 to 261 days and whether or not
the previous use of 251 as divisor resulted in overpayment for
overtime, night differential, vacation and sick leave pay.
The petitioner insists that respondent's sales personnel are not field
personnel under Article 82 of the Labor Code. The respondent
company controverts this assertion.

Under Article 82, field personnel are not entitled to holiday pay.
Said article defines field personnel as "non-agritultural employees
who regularly perform their duties away from the principal place of
business or branch office of the employer and whose actual hours
of work in the field cannot be determined with reasonable
certainty."
The controversy centers on the interpretation of the clause "whose
actual hours of work in the field cannot be determined with
reasonable certainty."

It is undisputed that these sales personnel start their field work at
8:00 a.m. after having reported to the office and come back to the
office at 4:00 p.m. or 4:30 p.m. if they are Makati-based.
The petitioner maintains that the period between 8:00 a.m. to 4:00
or 4:30 p.m. comprises the sales personnel's working hours which
can be determined with reasonable certainty.
The Court does not agree. The law requires that the actual hours of
work in the field be reasonably ascertained. The company has no
way of determining whether or not these sales personnel, even if
they report to the office before 8:00 a.m. prior to field work and
come back at 4:30 p.m, really spend the hours in between in actual
field work.

We concur with the following disquisition by the respondent
arbitrator: The requirement for the salesmen and other similarly
situated employees to report for work at the office at 8:00 a.m. and
return at 4:00 or 4:30 p.m. is not within the realm of work in the
field as defined in the Code but an exercise of purely management
prerogative of providing administrative control over such personnel.

This does not in any manner provide a reasonable level of
determination on the actual field work of the employees which can
be reasonably ascertained. The theoretical analysis that salesmen
and other similarly-situated workers regularly report for work at
8:00 a.m. and return to their home station at 4:00 or 4:30 p.m.,
creating the assumption that their field work is supervised, is
surface projection. Actual field work begins after 8:00 a.m., when
the sales personnel follow their field itinerary, and ends
immediately before 4:00 or 4:30 p.m. when they report back to
their office. The period between 8:00 a.m. and 4:00 or 4:30 p.m.
comprises their hours of work in the field, the extent or scope and
result of which are subject to their individual capacity and industry
and which "cannot be determined with reasonable certainty."

This is the reason why effective supervision over field work of
salesmen and medical representatives, truck drivers and
merchandisers is practically a physical impossibility. Consequently,
they are excluded from the ten holidays with pay award. (Rollo, pp.
36-37)
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Moreover, the requirement that "actual hours of work in the field
cannot be determined with reasonable certainty" must be read in
conjunction with Rule IV, Book III of the Implementing Rules which
provides: Rule IV Holidays with Pay
Sec. 1. Coverage — This rule shall apply to all employees except:
xxx xxx xxx
(e) Field personnel and other employees whose time and
performance is unsupervised by the employer . . .
(Emphasis supplied)

While contending that such rule added another element not found
in the law (Rollo, p. 13), the petitioner nevertheless attempted to
show that its affected members are not covered by the
abovementioned rule. The petitioner asserts that the company's
sales personnel are strictly supervised as shown by the SOD
(Supervisor of the Day) schedule and the company circular dated
March 15, 1984 (Annexes 2 and 3, Rollo, pp. 53-55).

Contrary to the contention of the petitioner, the Court finds that
the aforementioned rule did not add another element to the Labor
Code definition of field personnel. The clause "whose time and
performance is unsupervised by the employer" did not amplify but
merely interpreted and expounded the clause "whose actual hours
of work in the field cannot be determined with reasonable
certainty."

The former clause is still within the scope and purview of Article 82
which defines field personnel. Hence, in deciding whether or not an
employee's actual working hours in the field can be determined
with reasonable certainty, query must be made as to whether or
not such employee's time and performance is constantly supervised
by the employer.

The SOD schedule adverted to by the petitioner does not in the
least signify that these sales personnel's time and performance are
supervised. The purpose of this schedule is merely to ensure that
the sales personnel are out of the office not later than 8:00 a.m. and
are back in the office not earlier than 4:00 p.m.

Likewise, the Court fails to see how the company can monitor the
number of actual hours spent in field work by an employee through
the imposition of sanctions on absenteeism contained in the
company circular of March 15, 1984.

The petitioner claims that the fact that these sales personnel are
given incentive bonus every quarter based on their performance is
proof that their actual hours of work in the field can be determined
with reasonable certainty.

The Court thinks otherwise.
The criteria for granting incentive bonus are: (1) attaining or
exceeding sales volume based on sales target; (2) good collection
performance; (3) proper compliance with good market hygiene; (4)
good merchandising work; (5) minimal market returns; and (6)
proper truck maintenance. (Rollo, p. 190).

The above criteria indicate that these sales personnel are given
incentive bonuses precisely because of the difficulty in measuring
their actual hours of field work. These employees are evaluated by
the result of their work and not by the actual hours of field work
which are hardly susceptible to determination.





9

In San Miguel Brewery, Inc. v. Democratic Labor Organization (8
SCRA 613 [1963]), the Court had occasion to discuss the nature of
the job of a salesman. Citing the case of Jewel Tea
Co. v. Williams, C.C.A. Okla., 118 F. 2d 202, the Court stated:
The reasons for excluding an outside salesman are fairly apparent.
Such a salesman, to a greater extent, works individually.

There are no restrictions respecting the time he shall work and he
can earn as much or as little, within the range of his ability, as his
ambition dictates. In lieu of overtime he ordinarily receives
commissions as extra compensation. He works away from his
employer's place of business, is not subject to the personal
supervision of his employer, and his employer has no way of
knowing the number of hours he works per day.

While in that case the issue was whether or not salesmen were
entitled to overtime pay, the same rationale for their exclusion as
field personnel from holiday pay benefits also applies.

The petitioner union also assails the respondent arbitrator's ruling
that, concomitant with the award of holiday pay, the divisor should
be changed from 251 to 261 days to include the additional 10
holidays and the employees should reimburse the amounts
overpaid by Filipro due to the use of 251 days' divisor.

Arbitrator Vivar's rationale for his decision is as follows:
. . . The new doctrinal policy established which ordered payment of
ten holidays certainly adds to or accelerates the basis of conversion
and computation by ten days. With the inclusion of ten holidays as
paid days, the divisor is no longer 251 but 261 or 262 if election day
is counted. This is indeed an extremely difficult legal question of
interpretation which accounts for what is claimed as falling within
the concept of "solutio indebti."
When the claim of the Union for payment of ten holidays was
granted, there was a consequent need to abandon that 251 divisor.
To maintain it would create an impossible situation where the
employees would benefit with additional ten days with pay but
would simultaneously enjoy higher benefits by discarding the same
ten days for purposes of computing overtime and night time
services and considering sick and vacation leave credits. Therefore,
reimbursement of such overpayment with the use of 251 as divisor
arises concomitant with the award of ten holidays with pay. (Rollo,
p. 34)

The divisor assumes an important role in determining whether or
not holiday pay is already included in the monthly paid employee's
salary and in the computation of his daily rate. This is the thrust of
our pronouncement in Chartered Bank Employees Association
v. Ople (supra).

In that case, We held: It is argued that even without the
presumption found in the rules and in the policy instruction, the
company practice indicates that the monthly salaries of the
employees are so computed as to include the holiday pay provided
by law. The petitioner contends otherwise.

One strong argument in favor of the petitioner's stand is the fact
that the Chartered Bank, in computing overtime compensation for
its employees, employs a "divisor" of 251 days. The 251 working
days divisor is the result of subtracting all Saturdays, Sundays and
the ten (10) legal holidays from the total number of calendar days in
a year. If the employees are already paid for all non-working days,
the divisor should be 365 and not 251.



10

In the petitioner's case, its computation of daily ratio since
September 1, 1980, is as follows:
monthly rate x 12 months
———————————
251 days
Following the criterion laid down in the Chartered Bank case, the
use of 251 days' divisor by respondent Filipro indicates that holiday
pay is not yet included in the employee's salary, otherwise the
divisor should have been 261.

It must be stressed that the daily rate, assuming there are no
intervening salary increases, is a constant figure for the purpose of
computing overtime and night differential pay and commutation of
sick and vacation leave credits. Necessarily, the daily rate should
also be the same basis for computing the 10 unpaid holidays.

The respondent arbitrator's order to change the divisor from 251 to
261 days would result in a lower daily rate which is violative of the
prohibition on non-diminution of benefits found in Article 100 of
the Labor Code. To maintain the same daily rate if the divisor is
adjusted to 261 days, then the dividend, which represents the
employee's annual salary, should correspondingly be increased to
incorporate the holiday pay.

To illustrate, if prior to the grant of holiday pay, the employee's
annual salary is P25,100, then dividing such figure by 251 days, his
daily rate is P100.00 After the payment of 10 days' holiday pay, his
annual salary already includes holiday pay and totals P26,100
(P25,100 + 1,000). Dividing this by 261 days, the daily rate is still
P100.00.

There is thus no merit in respondent Nestle's claim of overpayment
of overtime and night differential pay and sick and vacation leave
benefits, the computation of which are all based on the daily rate,
since the daily rate is still the same before and after the grant of
holiday pay.

Respondent Nestle's invocation of solutio indebiti, or payment by
mistake, due to its use of 251 days as divisor must fail in light of the
Labor Code mandate that "all doubts in the implementation and
interpretation of this Code, including its implementing rules and
regulations, shall be resolved in favor of labor." (Article 4).

Moreover, prior to September 1, 1980, when the company was on a
6-day working schedule, the divisor used by the company was 303,
indicating that the 10 holidays were likewise not paid. When Filipro
shifted to a 5-day working schebule on September 1, 1980, it had
the chance to rectify its error, if ever there was one but did not do
so. It is now too late to allege payment by mistake.

Nestle also questions the voluntary arbitrator's ruling that holiday
pay should be computed from November 1, 1974. This ruling was
not questioned by the petitioner union as obviously said decision
was favorable to it.

Technically, therefore, respondent Nestle should have filed a
separate petition raising the issue of effectivity of the holiday pay
award. This Court has ruled that an appellee who is not an appellant
may assign errors in his brief where his purpose is to maintain the
judgment on other grounds, but he cannot seek modification or
reversal of the judgment or affirmative relief unless he has also
appealed. (Franco v. Intermediate Appellate Court, 178 SCRA 331
[1989], citing La Campana Food Products, Inc. v. Philippine
Commercial and Industrial Bank, 142 SCRA 394 [1986]).



11

Nevertheless, in order to fully settle the issues so that the execution
of the Court's decision in this case may not be needlessly delayed by
another petition, the Court resolved to take up the matter of
effectivity of the holiday pay award raised by Nestle.

Nestle insists that the reckoning period for the application of the
holiday pay award is 1985 when the Chartered Bank decision,
promulgated on August 28, 1985, became final and executory, and
not from the date of effectivity of the Labor Code. Although the
Court does not entirely agree with Nestle, we find its claim
meritorious.

In Insular Bank of Asia and America Employees' Union (IBAAEU)
v. Inciong, 132 SCRA 663 [1984], hereinafter referred to as the IBAA
case, the Court declared that Section 2, Rule IV, Book III of the
implementing rules and Policy Instruction No. 9, issued by the then
Secretary of Labor on February 16, 1976 and April 23, 1976,
respectively, and which excluded monthly paid employees from
holiday pay benefits, are null and void. The Court therein reasoned
that, in the guise of clarifying the Labor Code's provisions on holiday
pay, the aforementioned implementing rule and policy instruction
amended them by enlarging the scope of their exclusion.
The Chartered Bank case reiterated the above ruling and added the
"divisor" test.
However, prior to their being declared null and void, the
implementing rule and policy instruction enjoyed the presumption
of validity and hence, Nestle's non-payment of the holiday benefit
up to the promulgation of the IBAA case on October 23, 1984 was in
compliance with these presumably valid rule and policy instruction.
In the case of De Agbayani v. Philippine National Bank, 38 SCRA 429
[1971], the Court discussed the effect to be given to a legislative or
executive act subsequently declared invalid:
xxx xxx xxx
. . . It does not admit of doubt that prior to the declaration of nullity
such challenged legislative or executive act must have been in force
and had to be complied with. This is so as until after the judiciary, in
an appropriate case, declares its invalidity, it is entitled to
obedience and respect. Parties may have acted under it and may
have changed their positions. What could be more fitting than that
in a subsequent litigation regard be had to what has been done
while such legislative or executive act was in operation and
presumed to be valid in all respects. It is now accepted as a doctrine
that prior to its being nullified, its existence as a fact must be
reckoned with.

This is merely to reflect awareness that precisely because the
judiciary is the government organ which has the final say on
whether or not a legislative or executive measure is valid, a period
of time may have elapsed before it can exercise the power of
judicial review that may lead to a declaration of nullity. It would be
to deprive the law of its quality of fairness and justice then, if there
be no recognition of what had transpired prior to such adjudication.
In the language of an American Supreme Court decision: "The actual
existence of a statute, prior to such a determination of
[unconstitutionality], is an operative fact and may have
consequences which cannot justly be ignored.

The past cannot always be erased by a new judicial declaration. The
effect of the subsequent ruling as to invalidity may have to be
considered in various aspects, — with respect to particular
relations, individual and corporate, and particular conduct, private
and official." (Chicot County Drainage Dist. v. Baxter States Bank,
308 US 371, 374 [1940]). This language has been quoted with
approval in a resolution in Araneta v. Hill (93 Phil. 1002 [1952]) and
the decision in Manila Motor Co., Inc. v. Flores (99 Phil. 738 [1956]).
An even more recent instance is the opinion of Justice Zaldivar
12

speaking for the Court in Fernandez v. Cuerva and Co. (21 SCRA
1095 [1967]. (At pp. 434-435)
The "operative fact" doctrine realizes that in declaring a law or rule
null and void, undue harshness and resulting unfairness must be
avoided. It is now almost the end of 1991. To require various
companies to reach back to 1975now and nullify acts done in good
faith is unduly harsh. 1984 is a fairer reckoning period under the
facts of this case.

Applying the aforementioned doctrine to the case at bar, it is not
far-fetched that Nestle, relying on the implicit validity of the
implementing rule and policy instruction before this Court nullified
them, and thinking that it was not obliged to give holiday pay
benefits to its monthly paid employees, may have been moved to
grant other concessions to its employees, especially in the collective
bargaining agreement. This possibility is bolstered by the fact that
respondent Nestle's employees are among the highest paid in the
industry.

With this consideration, it would be unfair to impose additional
burdens on Nestle when the non-payment of the holiday benefits
up to 1984 was not in any way attributed to Nestle's fault.
The Court thereby resolves that the grant of holiday pay be
effective, not from the date of promulgation of the Chartered Bank
case nor from the date of effectivity of the Labor Code, but from
October 23, 1984, the date of promulgation of the IBAA case.

WHEREFORE, the order of the voluntary arbitrator in hereby
MODIFIED. The divisor to be used in computing holiday pay shall be
251 days. The holiday pay as above directed shall be computed from
October 23, 1984. In all other respects, the order of the respondent
arbitrator is hereby AFFIRMED.
SO ORDERED.
Narvasa, C.J., Melencio-Herrera, Paras, Feliciano, Padilla, Bidin,
Medialdea, Griño-Aquino, Regalado, Davide, Jr. and Romero, JJ.,
concur.

















13

G.R. No. 114698 July 3, 1995
WELLINGTON INVESTMENT AND MANUFACTURING
CORPORATION, petitioner,
vs.
CRESENCIANO B. TRAJANO, Under-Secretary of Labor and
Employment, ELMER ABADILLA, and 34 others, respondents.

NARVASA, C.J.:
The basic issue raised by petitioner in this case is, as its counsel puts
it, "whether or not a monthly-paid employee, receiving a fixed
monthly compensation, is entitled to an additional pay aside from
his usual holiday pay, whenever a regular holiday falls on a Sunday."

The case arose from a routine inspection conducted by a Labor
Enforcement Officer on August 6, 1991 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 of the Labor Inspector's report,
by letter dated August 10, 1991. It argued that "the monthly salary
of the company's monthly-salaried employees already includes
holiday pay for all regular holidays . . . (and 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
who, in an Order issued on July 28, 1992, ruled that "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,"
and accordingly directed Wellington to pay its employees
compensation corresponding to four (4) extra working days.


Wellington timely filed a motion for reconsideration of this Order of
August 10, 1992, pointing out that it was in effect being compelled
to "shell out an additional pay for an alleged extra working day"
despite its complete payment of all compensation lawfully due its
workers, using the 314 factor.

Its motion was treated as an appeal
and was acted on by respondent Undersecretary.

By Order dated September 22, the latter affirmed the challenged
order of the Regional Director, holding that "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."

Again,
Wellington moved for reconsideration,

and again was rebuffed.


Wellington then instituted the special civil action of certiorari at bar
in an attempt to nullify the orders above mentioned. By Resolution
dated July 4, 1994, this Court authorized the issuance of a
temporary restraining order enjoining the respondents from
enforcing the questioned orders.


Every worker should, according to the Labor Code, "be paid his
regular daily wage during regular holidays, except in retail and
service establishments regularly employing less than ten (10)
workers;" this, of course, even if the worker does no work on these
holidays. The regular holidays include: "New Year's Day, Maundy
14

Thursday, Good Friday, the ninth of April, the first of May, the
twelfth of June, the fourth of July, the thirtieth of November, the
twenty-fifth of December, and the day designated by law for
holding a general election (or national referendum or plebiscite).


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.

Apparently the monthly salary was fixed by Wellington to provide
for compensation for every working day of the year including the
holidays specified by law — and excluding only Sundays. In fixing
the salary, Wellington used what it calls the "314 factor;" that is to
say, it simply deducted 51 Sundays from the 365 days normally
comprising a year and used the difference, 314, as basis for
determining the monthly salary. The monthly salary thus fixed
actually covers payment for 314 days of the year, including regular
and special holidays, as well as days when no work is done by reason
of fortuitous cause, as above specified, or causes not attributable to
the employees.

The Labor Officer who conducted the routine inspection of
Wellington discovered that in certain years, two or three regular
holidays had fallen on Sundays. He reasoned that this had precluded
the enjoyment by the employees of a non-working day, and the
employees had consequently had to work an additional day for that
month. This ratiocination received the approval of his Regional
Director who opined that "when a regular holiday falls on a Sunday,
an extra or additional working day is created and the employer has
the obligation to pay its 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."


This ingenuous theory was adopted and further explained by
respondent Labor Undersecretary, to whom the matter was
appealed, as follows:
. . . By using said (314) factor, the respondent (Wellington) assumes
that all the regular holidays fell on ordinary days and never on a
Sunday. Thus, the respondent failed to consider the circumstance
15

that whenever a regular holiday coincides with a Sunday, an
additional working day is created and left unpaid. In other words,
while the said divisor may be utilized as proof evidencing payment
of 302 working days, 2 special days and the ten regular holidays in a
calendar year, the same does not cover or include payment of
additional working days created as a result of some regular holidays
falling on Sundays.

He pointed out that in 1988 there was "an increase of three (3)
working days resulting from regular holidays falling on Sundays;"
hence Wellington "should pay for 317 days, instead of 314 days." By
the same process of ratiocination, respondent Undersecretary
theorized that there should be additional payment by Wellington to
its monthly-paid employees for "an increment of three (3) working
days" for 1989 and again, for 1990. What he is saying is that in those
years, Wellington should have used the "317 factor," not the "314
factor."

The theory loses sight of the fact that the monthly salary in
Wellington — which is based on the so-called "314 factor" —
accounts for all 365 days of a year; i.e., Wellington's "314 factor"
leaves no day unaccounted for; it is paying for all the days of a year
with the exception only of 51 Sundays.

The respondents' theory would make each of the years in question
(1988, 1989, 1990), a year of 368 days. Pursuant to this theory, no
employer opting to pay his employees by the month would have
any definite basis to determine the number of days in a year for
which compensation should be given to his work force. He would
have to ascertain the number of times legal holidays would fall on
Sundays in all the years of the expected or extrapolated lifetime of
his business. Alternatively, he would be compelled to make
adjustments in his employees' monthly salaries every year,
depending on the number of times that a legal holiday fell on a
Sunday.
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," and to pay that salary "for all days in
the month whether worked or not," and "irrespective of the
number of working days therein."


That salary is due and payable regardless of the declaration of any
special holiday in the entire country or a particular place therein, or
any fortuitous cause precluding work on any particular day or days
(such as transportation strikes, riots, or typhoons or other natural
calamities), or cause not imputable to the worker.

And as also earlier pointed out, the legal provisions governing
monthly compensation are evidently intended precisely to avoid re-
computations and alterations in salary on account of the
contingencies just mentioned, which, by the way, are routinely
made between employer and employees when the wages are paid
on daily basis.

The public respondents argue that their challenged conclusions and
dispositions may be justified by Section 2, Rule X, Book III of the
Implementing Rules, giving the Regional Director power —
. . . to order and administer (in cases where employer-employee
relations still exist), after due notice and hearing, compliance with
the labor standards provisions of the Code and the other labor
16

legislations based on the findings of their Regulations Officers or
Industrial Safety Engineers (Labor Standard and Welfare Officers)
and made in the course of inspection, and to issue writs of
execution to the appropriate authority for the enforcement of his
order, in line with the provisions of Article 128 in relation to Articles
289 and 290 of the Labor Code, as amended. . . .

The respondents beg the question. Their argument assumes that
there are some "labor standards provisions of the Code and the
other labor legislations" imposing on employers the obligation to
give additional compensation to their monthly-paid employees in
the event that a legal holiday should fall on a Sunday in a particular
month — with which compliance may be commanded by the
Regional Director — when the existence of said provisions is
precisely the matter to be established.

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.

WHEREFORE, the orders complained of, namely: that of the
respondent Undersecretary dated September 22, 1993, and that of
the Regional Director dated July 30, 1992, are NULLIFIED AND SET
ASIDE, and the proceeding against petitioner DISMISSED.
SO ORDERED.
Regalado, Puno and Mendoza, JJ., concur.





















17

THIRD DIVISION


LEYTE IV ELECTRIC
COOPERATIVE, INC.,
Petitioner,
- versus -
LEYECO IV Employees Union-
ALU,
Respondent.
*



D E C I S I O N


AUSTRIA-MARTINEZ, J.:


Before the Court is a Petition for Review on Certiorari under Rule 45
of the Rules of Court assailing the Resolution

dated September 4,
2002 of the Court of Appeals (CA) in CA-G.R. SP No. 72336 which
dismissed outright petitioner's Petition forCertiorari for adopting a
wrong mode of appeal and the CA Resolution dated February 28,
2003 which denied petitioner's Motion for Reconsideration.

The facts:
On April 6, 1998, Leyte IV Electric Cooperative, Inc. (petitioner)
and Leyeco IV Employees Union-ALU (respondent) entered into a
Collective Bargaining Agreement (CBA)

covering petitioner rank-and-
file employees, for a period of five (5) years effective January 1,
1998.

On June 7, 2000, respondent, through its Regional Vice-President,
Vicente P. Casilan, sent a letter to petitioner demanding holiday pay
for all employees, as provided for in the CBA.

On June 20, 2000, petitioner, through its legal counsel, sent a letter-
reply to Casilan, explaining that after perusing all available
pay slips, it found that it had paid all employees all the holiday pays
enumerated in the CBA.

After exhausting the procedures of the grievance machinery, the
parties agreed to submit the issues of the interpretation and
implementation of Section 2, Article VIII of the CBA on the payment
of holiday pay, for arbitration of the National Conciliation and
Mediation Board (NCMB), Regional Office No. VIII
in Tacloban City. The parties were required to submit their
respective position papers, after which the dispute was submitted
for decision.

While admitting in its Position Paper

that the employees were paid
all of the days of the month even if there was no work, respondent
alleged that it is not prevented from making separate demands for
the payment of regular holidays concomitant with the provisions of
the CBA, with its supporting documents consisting of a letter
demanding payment of holiday pay, petitioner's reply thereto and
respondent's rejoinder, a computation in the amount
of P1,054,393.07 for the unpaid legal holidays, and several pay slips.

Petitioner, on the other hand, in its Position Paper, insisted
payment of the holiday pay in compliance with the CBA provisions,
stating that payment was presumed since the formula used in
determining the daily rate of pay of the covered employees is Basic
Monthly Salary divided by 30 days or Basic Monthly Salary
multiplied by 12 divided by 360 days, thus with said formula, the
employees are already paid their regular and special days, the days
18

when no work is done, the 51 un-worked Sundays and the 51 un-
worked Saturdays.

On March 1, 2001, Voluntary Arbitrator Antonio C. Lopez, Jr.
rendered a Decision in favor of respondent, holding petitioner liable
for payment of unpaid holidays from 1998 to 2000 in the sum
of P1,054,393.07. He reasoned that petitioner miserably failed to
show that it complied with the CBA mandate that holiday pay be
“reflected during any payroll period of occurrence” since the payroll
slips did not reflect any payment of the paid holidays. He found
unacceptable not only petitioner's presumption of payment of
holiday pay based on a formula used in determining and computing
the daily rate of each covered employee, but also petitioner's
further submission that the rate of its employees is not less than the
statutory minimum wage multiplied by 365 days and divided by
twelve.

On April 11, 2001, petitioner filed a Motion for Reconsideration but
it was denied by the Voluntary Arbitrator in a Resolution dated June
17, 2002. Petitioner received said Resolution on June 27, 2002.

Thirty days later, or on July 27, 2002, petitioner filed a Petition
for Certiorari in the CA, ascribing grave abuse of discretion
amounting to lack of jurisdiction to the Voluntary Arbitrator: (a) for
ignoring that in said company the divisor for computing the
applicable daily rate of rank-and-file employees is 360 days which
already includes payment of 13 un-worked regular holidays under
Section 2, Article VIII of the CBA; and (b) for holding the petitioner
liable for the unpaid holidays just because the payroll slips
submitted as evidence did not show any payment for the regular
holidays.

In a Resolution dated September 4, 2002, the CA dismissed outright
petitioner's Petition for Certiorari for adopting a wrong mode of
appeal. It reasoned:

Considering that what is assailed in the present recourse is a
Decision of a Voluntary Arbitrator, the proper remedy is a petition
for review under Rule 43 of the 1997 Rules of Civil Procedure;
hence, the present petition for certiorari under Rule 65 filed on
August 15, 2002, should be rejected, as such a petition cannot be a
substitute for a lost appeal. And in this case, the period for appeal
via a petition for review has already lapsed since the petitioner
received a copy of the Resolution denying its motion for
reconsideration on June 27, 2002, so that its last day to appeal
lapsed on July 12, 2002.

Petitioner filed a Motion for Reconsideration but it was denied by
the CA in a Resolution dated February 28, 2003.

Hence, the present petition anchored on the following grounds:

(1) The Honorable Court of Appeals erred in rejecting the petition
for certiorari under Rule 65 of the Rules of Court filed by herein
petitioner to assail the Decision of the Voluntary Arbitrator.

(2) Even if decisions of voluntary arbitrator or panel of voluntary
arbitrators are appealable to the Honorable Court of Appeals under
Rule 43, a petition for certiorari under Rule 65 is still available if it is
grounded on grave abuse of discretion. Hence, the Honorable Court
of Appeals erred in rejecting the petition for certiorari under Rule
65 of the Rules of Court filed by herein petitioner.

(3) The Honorable Court of Appeals erred in refusing to rule on the
legal issue presented by herein petitioner in the petition for
certiorari that it had filed and in putting emphasis instead on a
19

technicality of procedure. The legal issues needs a clear-cut ruling
by this Honorable Court for the guidance of herein petitioner and
private respondent.

Petitioner contends that Rule 65 of the Rules of Court is the
applicable mode of appeal to the CA from judgments issued by a
voluntary arbitrator since Rule 43 only allows appeal from
judgments of particular quasi-judicial agencies and voluntary
arbitrators authorized by law and not those judgments and orders
issued under the Labor Code; that the petition before the CA did not
raise issues of fact but was founded on jurisdictional issues and,
therefore, reviewable through a special civil action
for certiorari under Rule 65; that technicalities of law and procedure
should not be utilized to subvert the ends of substantial justice.

In its Comment, respondent avers that Luzon Development Bank
v. Association of Luzon Development Bank Employees laid down the
prevailing rule that judgments of the Voluntary Arbitrator
are appealable to the CA under Section 1, Rule 43 of the Rules of
Court; that having failed to file the appropriate remedy due to the
lapse of the appeal period, petitioner cannot simply invoke Rule 65
for its own convenience, as an alternative remedy.

In its Reply, petitioner submits that the ruling
in Luzon Development Bank does not expressly exclude the filing of
a petition for certiorari under Rule 65 of the Rules of Court to assail
a decision of a voluntary arbitrator. It reiterates that technicalities
of law and procedure should not be utilized to subvert the ends of
substantial justice.

It has long been settled in the landmark
case Luzon Development Bank that a voluntary arbitrator, whether
acting solely or in a panel, enjoys in law the status of a quasi-judicial
agency; hence, his decisions and awards are appealable to the
CA. This is so because the awards of voluntary arbitrators become
final and executory upon the lapse of the period to appeal; and
since their awards determine the rights of parties, their decisions
have the same effect as judgments of a court. Therefore, the
proper remedy from an award of a voluntary arbitrator is a petition
for review to the CA, following Revised Administrative Circular No.
1-95, which provided for a uniform procedure for appellate review
of all adjudications of quasi-judicial entities, which is now embodied
in Section 1, Rule 43 of the 1997 Rules of Civil Procedure, which
reads:

SECTION 1. Scope. — This Rule shall apply to appeals from
judgments or final orders of the Court of Tax Appeals and from
awards, judgments, final orders or resolutions of or authorized by
any quasi-judicial agency in the exercise of its quasi-judicial
functions. Among these agencies are the Civil Service Commission,
Central Board of Assessment Appeals, Securities and Exchange
Commission, Office of the President, Land Registration Authority,
Social Security Commission, Civil Aeronautics Board, Bureau of
Patents, Trademarks and Technology Transfer, National
Electrification Administration, Energy Regulatory Board, National
Telecommunications Commission, Department of Agrarian Reform
under Republic Act No. 6657, Government Service Insurance
System, Employees Compensation Commission, Agricultural
Inventions Board, Insurance Commission, Philippine Atomic Energy
Commission, Board of Investments, Construction Industry
Arbitration Commission, and voluntary arbitrators authorized by
law. (Emphasis supplied)
Section 2, Rule 43 of the 1997 Rules of Civil Procedure which
provides that:

SEC. 2. Cases not covered. - This Rule shall not apply to judgments or
final orders issued under the Labor Code of the Philippines.

20

did not alter the Court's ruling in Luzon Development Bank. Section
2, Rule 42 of the 1997 Rules of Civil Procedure, is nothing more than
a reiteration of the exception to the exclusive appellate jurisdiction
of the CA, as provided for in Section 9, BatasPambansa Blg. 129, as
amended by Republic Act No. 7902:

(3) Exclusive appellate jurisdiction over all final judgments,
decisions, resolutions, orders or awards of Regional Trial Courts and
quasi-judicial agencies, instrumentalities, boards or commissions,
including the Securities and Exchange Commission, the Employees’
Compensation Commission and the Civil Service Commission, except
those falling within the appellate jurisdiction of the Supreme Court
in accordance with the Constitution, the Labor Code of the
Philippines under Presidential Decree No. 442, as amended, the
provisions of this Act and of subparagraph (1) of the third paragraph
and subparagraph (4) of the fourth paragraph of Section 17 of the
Judiciary Act of 1948.

The Court took into account this exception in Luzon Development
Bank but, nevertheless, held that the decisions of voluntary
arbitrators issued pursuant to the Labor Code do not come within
its ambit, thus:

x x x. The fact that *the voluntary arbitrator’s+ functions and powers
are provided for in the Labor Code does not place him within the
exceptions to said Sec. 9 since he is a quasi-judicial instrumentality
as contemplated therein. It will be noted that, although the
Employees’ Compensation Commission is also provided for in the
Labor Code, Circular No. 1-91, which is the forerunner of the
present Revised Administrative Circular No. 1-95, laid down the
procedure for the appealability of its decisions to the Court of
Appeals under the foregoing rationalization, and this was later
adopted by Republic Act No. 7902 in amending Sec. 9 of B.P. 129.

A fortiori, the decision or award of the voluntary arbitrator or panel
of arbitrators should likewise be appealable to the Court of Appeals,
in line with the procedure outlined in Revised Administrative
Circular No. 1-95, just like those of the quasi-judicial agencies,
boards and commissions enumerated therein.

This would be in furtherance of, and consistent with, the original
purpose of Circular No. 1-91 to provide a uniform procedure for the
appellate review of adjudications of all quasi-judicial entities not
expressly excepted from the coverage of Sec. 9 of B.P. 129 by either
the Constitution or another statute. Nor will it run counter to the
legislative intendment that decisions of the
NLRC be reviewable directly by the Supreme Court since, precisely,
the cases within the adjudicative competence of the voluntary
arbitrator are excluded from the jurisdiction of the NLRC or the
labor arbiter.

This ruling has been repeatedly reiterated in subsequent cases and
continues to be the controlling doctrine. Thus, the general rule is
that the proper remedy from decisions of voluntary arbitrators is a
petition for review under Rule 43 of the Rules of Court.

Nonetheless, a special civil action for certiorari under Rule 65 of the
Rules of Court is the proper remedy for one who complains that the
tribunal, board or officer exercising judicial or quasi-judicial
functions acted in total disregard of evidence material to or decisive
of the controversy. As this Court elucidated in Garcia v.
National Labor Relations Commission-

[I]n Ong v. People, we ruled that certiorari can be properly resorted
to where the factual findings complained of are not supported by
the evidence on record. Earlier, in Gutib v. Court of Appeals, we
emphasized thus:

21

[I]t has been said that a wide breadth of discretion is granted a
court of justice in certiorari proceedings. The cases in which
certiorari will issue cannot be defined, because to do so would be to
destroy its comprehensiveness and usefulness. So wide is the
discretion of the court that authority is not wanting to show
that certiorari is more discretionary than either prohibition or
mandamus. In the exercise of our superintending control over
inferior courts, we are to be guided by all the circumstances of each
particular case “as the ends of justice may require.” So it is that
the writ will be granted where necessary to prevent a substantial
wrong or to do substantial justice.

In addition, while the settled rule is that an independent action
for certiorari may be availed of only when there is no appeal or any
plain, speedy and adequate remedy in the ordinary course of
law

and certiorari is not a substitute for the lapsed remedy of
appeal, there are a few significant exceptions when the
extraordinary remedy of certiorari may be resorted to despite the
availability of an appeal, namely: (a) when public welfare and the
advancement of public policy dictate; (b) when the broader
interests of justice so require; (c) when the writs issued are null; and
(d) when the questioned order amounts to an oppressive exercise
of judicial authority.

In this case, while the petition was filed on July 27, 2002, 15 days
after July 12, 2002, the expiration of the 15-dayreglementary period
for filing an appeal under Rule 43, the broader interests of justice
warrant relaxation of the rules on procedure. Besides, petitioner
alleges that the Voluntary Arbitrator’s conclusions have no basis in
fact and in law; hence, the petition should not be dismissed on
procedural grounds.

The Voluntary Arbitrator gravely abused its discretion in giving a
strict or literal interpretation of the CBA provisions that the holiday
pay be reflected in the payroll slips. Such literal interpretation
ignores the admission of respondent in its Position Paper that the
employees were paid all the days of the month even if not
worked. In light of such admission, petitioner's submission of its
360 divisor in the computation of employees’ salaries gains
significance.

In Union of Filipro Employees v. Vivar, Jr. the Court held that “*t+he
divisor assumes an important role in determining whether or not
holiday pay is already included in the monthly paid employee’s
salary and in the computation of his daily rate”. This ruling was
applied in Wellington Investment and Manufacturing Corporation
v. Trajano, Producers Bank of thePhilippines v. National Labor
Relations Commission

and Odango v. National Labor Relations
Commission,

among others.

In Wellington, the monthly salary was fixed by Wellington to
provide for compensation for every working day of the year
including the holidays specified by law – and excluding only
Sundays. In fixing the salary, Wellington used what it called the
“314 factor”; that is, it simply deducted 51 Sundays from the 365
days normally comprising a year and used the difference, 314, as
basis for determining the monthly salary. The monthly salary thus
fixed actually covered payment for 314 days of the year, including
regular and special holidays, as well as days when no work was done
by reason of fortuitous cause, such as transportation strike, riot, or
typhoon or other natural calamity, or cause not attributable to the
employees.

In Producers Bank, the employer used the divisor 314 in arriving at
the daily wage rate of monthly salaried employees. The divisor 314
was arrived at by subtracting all Sundays from the total number of
calendar days in a year, since Saturdays are considered paid rest
days. The Court held that the use of 314 as a divisor leads to the
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inevitable conclusion that the ten legal holidays are already
included therein.

In Odango v. National Labor Relations Commission,

the Court ruled
that the use of a divisor that was less than 365 days cannot make
the employer automatically liable for underpayment of holiday
pay. In said case, the employees were required to work only from
Monday to Friday and half of Saturday. Thus, the minimum
allowable divisor is 287, which is the result of 365 days, less 52
Sundays and less 26 Saturdays (or 52 half Saturdays). Any divisor
below 287 days meant that the employees were deprived of their
holiday pay for some or all of the ten legal holidays. The 304-day
divisor used by the employer was clearly above the minimum of 287
days.

In this case, the employees are required to work only from Monday
to Friday. Thus, the minimum allowable divisor is 263,
which is arrived at by deducting 51 un-worked Sundays and 51 un-
worked Saturdays from 365 days. Considering that petitioner used
the 360-day divisor, which is clearly above the minimum,
indubitably, petitioner's employees are being given their holiday
pay.

Thus, the Voluntary Arbitrator should not have simply brushed aside
petitioner's divisor formula. In granting respondent's claim of non-
payment of holiday pay, a “double burden” was imposed upon
petitioner because it was being made to pay twice for its
employees' holiday pay when payment thereof had already been
included in the computation of their monthly salaries. Moreover, it
is absurd to grant respondent's claim of non-payment when they in
fact admitted that they were being paid all of the days of the month
even if not worked. By granting respondent's claim, the Voluntary
Arbitrator sanctioned unjust enrichment in favor of the respondent
and caused unjust financial burden to the petitioner. Obviously, the
Court cannot allow this.

While the Constitution is committed to the policy
of social justice
[50]
and the protection of the working class,
[51]
it
should not be supposed that every labor dispute would
automatically be decided in favor of labor. Management also has it
own rights which, as such, are entitled to respect and enforcement
in the interest of simple fair play. Out of concern for those with less
privileges in life, this Court has inclined more often than not toward
the worker and upheld his cause in his conflicts with the employer.
Such favoritism, however, has not blinded us 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.
[52]


WHEREFORE, the petition for review is GRANTED. The
Resolutions dated September 4, 2002 and February 28, 2003 of the
Court of Appeals in CA-G.R. SP No. 72336 are REVERSED and SET
ASIDE. The Decision dated March 1, 2001 and Resolution
dated June 17, 2002 of the Voluntary Arbitrator are declared NULL
and VOID.

SO ORDERED.











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