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[GR. No.170087 Aug. 31, 2006]

Angelina Francisco has held several positions in Kasei Corporation,
to wit: (1) Accountant and
Corporate Secretary; (2) Liaison Officer to the City of Makati; (3)
Corporate Secretary; and (4)Acting Manager.

She performed the work of Acting Manager for five years but later
she was replaced by Liza R. Fuentes as Manager. Then, Kasei
Corporation reduced her salary and was not paid her mid-year
bonus allegedly because the company was not earning well. She
made repeated follow-ups with the company cashier but she was
advised that the company was not earning well. Ultimately, she did
not report for work and filed an action for constructive dismissal
before the labor arbiter.

Was Francisco an employee of Kasei Corporation?

In certain cases where the control test is not sufficient to give a
complete picture of the relationship between the parties, owing to
the complexity of such a relationship where several positions have
been held by the worker. There are instances when, aside from the
employers power to control the employee with respect to the
means and methods by which the work is to be accomplished,
economic realities of the employment relations help provide a
comprehensive analysis of the true classification of the individual,
whether as employee, independent contractor, corporate officer or
some other capacity.

The better approach would therefore be to adopt a two-tiered test
(1) the putative employerspower to control the employee with
respect to the means and methods by which the work is to be
accomplished; and
(2) the underlying economic realities of the activity or relationship.
This two-tiered test would provide us with a framework of analysis,
which would take into consideration the totality of circumstances
surrounding the true nature of the relationship

G.R. 111501 Case Digest
G.R. No. 111501, March 5, 1996
Phil. Fuji Xerox Corp., Jennifer Bernardo and Atty. Victorino Luis,
Ponente: Mendoza

This is a petition for certiorari to set aside the decision of NLRC
finding Fuji guilty of illegally dismissing privated respondent Pedro
Gerado and ordering him reinstated. NLRC reversed the decision of
Labor Arbiter finding Gerado to be an employee of another firm

May 1977, Fuji entered into an agreement under Skillpower to
operate copier machines of Fuji in its sales offices where Gerado
was assigned as key operator.

February 1983, Gerado went on leave and his place was taken by a
substitute. He returned March and discovered that there was a
apoilage of over 600 copies. He tried to talk to the service
techinician of Fuji to stop the meter of the machine but was
refused. Fuji then knew about the incident and reported to
Skillpower. Skillpower wrote a letter to Gerado asking for
explaination and suspended him from work. Gerado then filed for
illegal dismissal.

Labor Arbiter found that Gerado applied for work to Skillpower and
was made to sign a contract. Although he receives his salaries from
Fuji, Skillpower exercises control and supervision over his wrk.
Labor arbiter then held the decision that Gerado was an employee
of Skillpower.

NLRC found Gerado to be an employee of Fuji and was illegally
dismissed. NLRC found that Skillpower acted on behalf of Fuji in
supervising his work, and that FUji paid his salaries and Skillpower
was just a paymaster-agent.

Here, Fuji petitions that Skillpower is an independent contractor
and Gerado is its employee: (1) Gerado was recruited by
Skillpower, (2) work done by Gerado was not necessary to the
conduct of business of Fuji, (3) Gerado's salaries and benefits were
paid directly by Skillpower, (4) Gerado worked under the control of
Skillpower and (5) Skillpower is a highly-capitalized business

Issue: (1) Whether Gerado is an employee of Fuji or of Skillpower.

Ruling: Contentions are without merit. Gerado is en employee of

(1) Gerado was recruited by Skillpower to be assigned at Fuji. With
a contract between Gerado and Fuji as basis.
(2) The job of Gerado may not generate income directly to Fuji but
it is necessary in their products and promotion of the company's
public image.
(3) The letters of the legal and industrial relations officer of Fuji and
the union president played the dismissal of the employee, the
order of dismissal was issued as a mere obedience to the decision
of petitioner.
(4) The service being rendered by privated respondent was not a
specific or special skill that Skillpower was in the business of
providing. Skillpower is classified under Article 106 of the Labor
Code; where there is "labor only" where the person supplying
workers to an employer does not have suubstantial capital or
investment in the forms of tools, equipment, etc. and workers
recruited and placed are performing activities directly related to
the principal employer. Skillpower merely supplied workers to Fuji.
(5) There is an agreement between Fuji and Skillpower that
Skillpower has no control over the workers they supplied with Fuji.

G.R. No. 83402 Case Digest
G.R. No. 83402, October 6, 1997
Algon Engineering Const. Corp. and Alex Gonzales, petitioners
vs NLRC and Jose Espinosa, respondents
Ponente: Hermosisima

This is a petition for certiorari assailing the resolution of NLRC
dismissing their appeal and denying their motion for
reconsideration and affriming the Labor arbiter's findings that
Espinosa is an employee of Algon.

Algon as standard operating procedure of their construction
business entered into a lease of contract with Espinosa for the
storage and parking of their heavy equipment in exchange for a
storage or parking fee.

Espinosa claims that he was hired by Algon to be a watchman with
the duty of guarding the heavy equipment in other house spaces
his area from 6pm to 6am. This was affirmed by Labor arbiter,
finding that Algon pays Espinosa P20 on a daily basis as watchman.

Algon then appealed to the NLRC, arguing that Algon did not hire
Espinosa, the relationship is merely that of leased storage or
parking space. But NLRC affirmed the Labor Arbiter on the same

Ruling: Petition with no merit.

(1) Cash vouchers issued by Algon as payment to Espinosa illustrate
that Espinosa was paid not only for the storage and parking in his
premisess but also with the other storage of Algon. (2) Algon's
memorandum issued to Espinosa citing him for the loss of 4
batteries is sufficient to prove the existence of en employer-
employee relationship as well. The two evidence fulfilling the
elements of employer-employee relationship: (1) selection and
engagement of the employee; (2) payment of wages; (3) power of
dismissal; and (4) employer's own power to control employee's

29 April 2005 / Labor Standards
Employee-employer Relationship in a Publication Bond
Requirement When Employer Appeals in a Labor Case
Orozco v CA

Orozco was hired as a writer by the Philippine Daily Inquirer in
1990. She was the columnist of Feminist Reflections under the
Lifestyle section of the publication. She writes on a weekly basis
and on a per article basis (P250-300/article).

In 1991, Magsanoc as the editor-in-chief sought to improve the
Lifestyle section of the paper. She said there were too many
Lifestyle writers and that it was time to reduce the number of
writers. Orozcos column was eventually dropped.

Orozco filed for a case for Illegal Dismissal against PDI and
Magsanoc. Orozco won in the Labor Arbiter. The LA ruled that
there exists an employer-employee relationship between PDI and
Orozco hence Orozco is entitled to receive backwages,
reinstatement, and 13th month pay.

PDI appealed to the National Labor Relations Commission. The
NLRC denied the appeal because of the failure of PDI to post a
surety bond as required by Article 223 of the Labor Code. The
Court of Appeals reversed the NLRC.

ISSUE: Whether or not there exists an employer-employee
relationship between PDI and Orozco. Whether or not PDIs appeal
will prosper.

HELD: Under Article 223 of the Labor Code:
ART. 223. Appeal. Decisions, awards or orders of the Labor
Arbiter are final and executory unless appealed to the Commission
by any or both parties within ten (10) calendar days from receipt of
such decisions, awards, or orders.

In case of a judgment involving a monetary award, an appeal by
the employer may be perfected only upon the posting of a cash or
surety bond issued by a reputable bonding company duly
accredited by the Commission in the amount equivalent to the
monetary award in the judgment appealed from.
The requirement that the employer post a cash or surety bond to
perfect its/his appeal is apparently intended to assure the workers
that if they prevail in the case, they will receive the money
judgment in their favor upon the dismissal of the employers
appeal. It was intended to discourage employers from using an
appeal to delay, or even evade, their obligation to satisfy their
employees just and lawful claims.

But in this case, this principle is relaxed by the Supreme Court
considering the fact that the Labor Arbiter, in ruling that the
Orozco is entitled to backwages, did not provide any computation.
The case is then remanded to the Labor Arbiter for the
computation. This necessarily pended the resolution of the other
issue of whether or not there exists an employer-employee
relationship between PDI and Orozco.


Petitioner was the owner of the jeepneys which the
private respondent is the one who is driving in a boundary basis.
Villamaria and Bustamante entered into a contract were the
petitioner agreed to sell the jeepney entitled Kasunduan ng
Bilihan ng Sasakayan sa Pamamagitan ng Boundary-Hulog were
Bustamante would remit to Villamaria P550.00 a day for a period of
four years. Both parties agreed in such terms and stipulations of
the contract.When the private respondent failed to pay the
boundary-hulog, Villarama took back the jeepney driven by
Bustamante and barred the latter from driving the vehicle. Due to
the action of petitioner, Bustamante files a complaint before the

Whether employer-employee relations exists.

The juridical relationship of employer-employee between
petitioner and respondent was not negated by the foregoing
stipulation in the Kasunduan, considering that petitioner retained
control of respondents conduct as driver of the vehicle. Even if the
petitioner was allowed to let some other person drive the unit, it
was not shown that he did so; that the existence of an employment
relation is not dependent on how the worker is paid but on the
presence or absence of control over the means and method of the
work; that the amount earned in excess of the boundary hulog is
equivalent to wages; and that the fact that the power of dismissal
was not mentioned in the Kasunduan did not mean Villamaria
never exercised such power, or could not exercise such power.
Hence, the employer- employee relationship exists.

Caurdanetaan Piece Workers Union v. Laguesma

This case consists of 2 consolidated cases.

The first case is an appeal from the decision of Laguesma, as
Undersecretary of Labor, in the Petition for Certification Election
filed by petitioner-union.

The Caurdenataan Piece Workers Union is composed of the
employees of Corfarm Grains, Inc. They work as cargadores in
the said company and were paid on a piece rate basis.

The said union was organized when some of their benefits were
not given to them. Thus, they filed their petition for certification
election. The Med-Arbiter granted the petition but this decision
was reversed, on appeal, by Laguesma saying that there was no
employer-employee relationship existing.

The second case involves a complaint for illegal dismissal against
Corfarm. This arose because those workers who joined the said
union were replaced with non-members.

As to this case, the labor arbiter first ruled in favor of the workers
but subsequently, the NLRC reversed such ruling.

Whether or not there was an employer-employee relationship
between the cargadores and Corfarm.

YES. To determine the existence of an employer-employee relation,
this Court has consistently applied the four-fold test.

It is undeniable that petitioners members worked as cargadores
for private respondent. They loaded, unloaded and piled sacks of
palay from the warehouses to the cargo trucks and from the cargo
trucks to the buyers. This work is directly related, necessary and
vital to the operations of Corfarm. Moreover, Corfarm did not
even allege, much less prove, that petitioners members have
substantial capital or investment in the form of tools, equipment,
machineries, [and] work premises, among others. Furthermore,
said respondent did not contradict petitioners allegation that it
paid wages directly to these workers without the intervention of
any third-party independent contractor. It also wielded the power
of dismissal over petitioners; in fact, its exercise of this power was
the progenitor of the Second Case. Clearly, the workers are not
independent contractors.

It does not matter that the workers also work for other companies
because this is just their way of coping with their daily expenses.

No particular form of proof is required to prove the existence of an
employer-employee relationship. Any competent and relevant
evidence may show the relationship. If only documentary evidence
would be required to demonstrate that relationship, no scheming
employer would ever be brought before the bar of justice.

To determine the existence of an employer-employee relation, this
Court has consistently applied the four-fold test which has the
following elements: (1) the power to hire, (2) the payment of
wages, (3) the power to dismiss, and (4) the power to control -- the
last being the most important element.

Dy Keh Beng v. International Labor
G.R. No. L-32245 May 25, 1979

DY KEH BENG, petitioner,
ET AL., respondents.


A charge of unfair labor practice was filed against Dy Keh Beng,
proprietor of a basket factory, for discriminatory acts within the
meaning of Section 4(a), sub-paragraph (1) and (4). Republic Act
No. 875, by dismissing on September 28 and 29, 1960, respectively,
Carlos N. Solano and Ricardo Tudla for their union activities.

After preliminary investigation was conducted, a case was filed in
the Court of Industrial Relations for in behalf of the International
Labor and Marine Union of the Philippines and two of its members,
Solano and Tudla In his answer, Dy Keh Beng contended that he did
not know Tudla and that Solano was not his employee because the
latter came to the establishment only when there was work which
he did on pakiaw basis, each piece of work being done under a
separate contract. Moreover, Dy Keh Beng countered with a
special defense of simple extortion committed by the head of the
labor union, Bienvenido Onayan.

According to Dy Keh Beng, however, Solano was not his employee
for the following reasons:

(1) Solano never stayed long enought at Dy's establishment;
(2) Solano had to leave as soon as he was through with the
(3) order given him by Dy;
(4) When there were no orders needing his services there was
nothing for him to do;
(5) When orders came to the shop that his regular workers could
not fill it was then that Dy went to his address in Caloocan and
fetched him for these orders; and
(6) Solano's work with Dy's establishment was not continuous.


Whether there existed an employee-employer relation between
petitioner Dy Keh Beng and the respondents Solano and Tudla.


The Hearing Examiner prepared a report which was subsequently
adopted in toto by the Court of Industrial Relations. An employee-
employer relationship was found to have existed between Dy Keh
Beng and complainants Tudla and Solano, although Solano was
admitted to have worked on piece basis. According to the Hearing
Examiner, the evidence for the complainant Union tended to show
that Solano and Tudla became employees of Dy Keh Beng from
May 2, 1953 and July 15, 1955, respectively, and that except in the
event of illness, their work with the establishment was continuous
although their services were compensated on piece basis. Evidence
likewise showed that at times the establishment had eight (8)
workers and never less than five (5); including the complainants,
and that complainants used to receive P5.00 a day. Sometimes

The award of backwages granted by the Court of Industrial
Relations is herein modified to an award of backwages for three
years without qualification and deduction at the respective rates of
compensation the employees concerned were receiving at the time
of dismissal. The execution of this award is entrusted to the
National Labor Relations Commission. Costs against petitioner.

G.R. No. 119205, April 15, 1998
Sime Darby Pilipinas, Inc. petitioner,
vs NLRC and Sime Darby Salaried Employees Assoc., respondents
Ponente: Bellosillo

Issue: Is the act of management in revising the work schedule of its
employees and discarding their paid lunch break constitutive of
unfair labor practice?

Sime Darby is engaged in the manufacture of automotive tires,
tubes and other rubber products. Private respondent is an
association of the monthly salaried employees of the Sime Darby
factory workers in Marikina. Prior to the controversy, all employees
of Sime Darby worked from 7:45am to 3:45pm with a 30-minute
paid "on call" lunch break.

On August 14, 1992, the company issued a memorandum to all
factory employees advising all its monthly salaried employees in
Marikina Tire plant except those in the warehouse and Quality
Assurance Dept., of a change in work schedules. (M-F, 7:45am-
4:45pm and Sat 7:45am-11:45am) with cofee break of 10 minutes
between 9:30am-10:30am and 2:30pm-3:30pm and lunch break
between 12nn-1pm(M-F).

Because of this memorandum, the association filed a complaint in
behalf of its members a complaint with labor Arbiter for unfair
labor practice, discrimination and evasion of liability. However, the
labor arbiter dismissed the complaint on the grounds that the
elimination of the 30 minute paid lunch break constituted a valid
exercise of management prerogative and that the new work
schedule did not have the effect of dimishing the benefits for the
work did not exceed 8 hours.

Labor arbiter added that it would be unjust if they continue to be
paid during their lunch break even if they are no longer on call or
required to work during the break.

The association appealed to the NLRC but NLRC has affirmed the
labor arbiter's decision and dismissed the appeal. However, in the
motion for reconsideration, NLRC having two new commissioners
has reversed the earlier decision. Stating that,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.

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.

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.

Management is free to regulate, according to its own discretion
and judgment, all aspects of employment, including hiring, work
assignments, working methods, time, place and manner of work,
processes to be followed, supervision of workers, working
regulations, transfer of employees, work supervision, lay off of
workers and discipline, dismissal and recall of workers. Further,
management retains the prerogative, whenever exigencies of the
service so require, to change the working hours of its employees.
So long as such prerogative is exercised in good faith for the
advancement of the employer's interest and not for the purpose of
defeating or circumventing the rights of the employees under
special laws or under valid agreements, this Court will uphold such

Petition granted.

Full Text

Private respondent, a corporation engaged in providing security
services to its client, hired petitioner on November 4, 1980 as one
of its security guards. Thereafter, he was assigned to the Cat
House Bar and Restaurant with a monthly salary of P2,000.00 until
its closure on August 31, 1993.

On May 4, 1994, petitioner filed a complaint[1] against private
respondent for underpayment of wages, non-payment of salary
from August 16-31, 1993, overtime pay, premium pay for holiday,
rest day, night shift differential, uniform allowance, service
incentive leave pay and 13th month pay from the year 1990 to

Private respondent, in its position paper,[2] rejected petitioners
claim alleging it merely acted as an agent of the latter in securing
his employment at the Cat House Bar and Restaurant. Thus, the
liability for the claims of the petitioner should be charged to Cat
House Bar and its owner, being his direct employer.

In resolving the dispute in a decision dated May 31, 1995,[3] the
Labor Arbiter brushed aside the private respondents contention
that it was merely an agent of the petitioner and concluded:

hereby ORDERED to pay within ten (10) days from receipt hereof
herein complainant EDUARDO B. PRANGAN, the total sum of Nine
Thousand Nine Hundred Thirty Two Pesos & Sixteen Centavos
(P9,932.16) premium pay for holiday and rest days, night shift
differential, service incentive leave pay, 13th month pay, uniform
allowance, and unpaid salary.

Complainants other claims as well as respondents counter claim
are hereby DISMISSSED either for the reason of prescription and/or
lack of merit.


Apparently not satisfied with the above-mentioned monetary
award, petitioner appealed to the National Labor Relations
Commission (NLRC) contending that the Labor Arbiter erred in
concluding that he only worked for four hours and not twelve
hours a day. Evidently, the shorter work hours resulted in a lower
monetary award by the Labor Arbiter. However, the NLRC
dismissed his appeal for failure to file the same within ten-day
reglementary period.[4]

Undaunted, petitioner filed a motion for reconsideration which, in
the interest of justice, was favorably granted by the NLRC
resulting in the reinstatement of his appeal. Nonetheless,
petitioners victory was short-lived as the NLRC eventually
dismissed his appeal for lack of merit,[5] the dispositive portion of
the decision reads:

WHEREFORE, the appeal is hereby dismissed for lack of merit and
decision is affirmed in toto.


Petitioner is now before us imputing grave abuse of discretion on
the part of respondent NLRC (a) declaring that he rendered only
four hours and not twelve hours of work, and (b) affirming the
monetary award.

The public respondent, through the Solicitor General, and the
private respondent filed their respective comments on the petition
refuting the allegation of the petitioner. Specifically, they asserted
that the decision was supported by ample evidence showing that
petitioner indeed worked for only four hours and not twelve hours
a day.

A review of the alleged error raised by the instant petition leads us
to conclude that the same is factual in nature which, as a rule, we
do not pass upon. As a general rule, it is not for us to correct the
NLRCs evaluation of the evidence, as our task is confined to issues
of jurisdiction or grave abuse of discretion.[6] Obviously, however,
the same will not apply where the evidence require a reversal or

As proof of petitioners actual hours of work, private respondent
submitted the daily time records allegedly signed by the petitioner
himself showing that he only worked four hours daily.

In contrast, petitioner argues that these daily time records were
falsified for the simple reason that he was not required to submit
one. He further stressed that, assuming such documents exist, its
authenticity and due execution are questionable and of doubtful

We find merit in the petition.

To be sure, findings of fact of quasi-judicial bodies like the NLRC,
particularly when they coincide with those of the Labor Arbiter, are
accorded with respect even finality if supported by substantial
evidence.[8] In this regard, we have defined substantial evidence
as such amount of relevant evidence which a reasonable mind
might accept as adequate to justify a conclusion.[9] Absent such
quantum of evidence, the Court is not precluded from making its
own independent evaluation of facts.[10]

In the instant case, there is no dispute that matters concerning an
employees actual hours of work are within the ambit of
management prerogative. However, when an employer alleges
that his employee works less than the normal hours of
employment as provided for in the law,[11] he bears the burden of
proving his allegation with clear and satisfactory evidence.

In the instant petition, the NLRC, in declaring that petitioner only
worked for four hours, relied solely on the supposed daily time
records of the petitioner submitted by the private respondent.[12]
We, however, are of the opinion that these documents cannot be
considered substantial evidence as to conclude that petitioner only
worked for four hours. It is worth mentioning that petitioner, in his
Sur-Rejoinder to Respondents Rejoinder,[13] unequivocably stated

Complainant (petitioner herein) never made nor submitted any
daily time record with respondent company considering the fact
that he was assigned to a single post and that the daily time
records he allegedly submitted with respondent company are all
falsified and his signature appearing therein forged.

Private respondent hardly bothered to controvert petitioners
assertion, much less bolster its own contention. As petitioners
employer, private respondent has unlimited access to all relevant
documents and records on the hours of work of the petitioner.
Yet, even as it insists that petitioner only worked for four hours and
not twelve, no employment contract, payroll, notice of assignment
or posting, cash voucher or any other convincing evidence which
may attest to the actual hours of work of the petitioner were even
presented. Instead, what the private respondent offered as
evidence were only petitioners daily time record, which the latter
categorically denied ever accomplishing, much less signing.

In said alleged daily time record, it showed that petitioner started
work at 10:00 p.m. and would invariably leave his post at exactly
2:00 a.m. Obviously, such unvarying recording of a daily time
record is improbable and contrary to human experience. It is
impossible for an employee to arrive at the workplace and leave at
exactly the same time, day in day out. The very uniformity and
regularity of the entries are badges of untruthfulness and as such
indices of dubiety.[14]

Another consideration which militates against private respondents
claim is the fact that in the personnel data sheet of the
petitioner,[15] duly signed by the formers operation manager, it
shows on its face that the latters hours of work are from 7:00 p.m.
to 7:00 a.m. or twelve hours a day. Hence, private respondent is
estopped from assailing the contents of its own documents.

Further, the attendance sheets of Cat House Bar and
Restaurant[16] showed that petitioner worked from 7:00 p.m. to
7:00 a.m. daily, documents which were never repudiated by the
private respondent.

All told, private respondent has not adequately proved that
petitioners actual hours of work is only four hours. Its unexplained
silence contravening the personnel data sheet and the attendance
sheets of Cat House Bar and Restaurant presented by the
petitioner showing he worked for twelve hours, has assumed the
character of an admission. No reason was proffered for this silence
despite private respondent, being the employer, could have easily
done so.

As is well-settled, if doubts exist between the evidence presented
by the employer and the employee, the scales of justice must be
tilted in favor of the employee. Since it is a time-honored rule that
in controversies between a laborer and his master, doubts
reasonably arising from the evidence, or in the interpretation of
agreements and writings should be resolved in the formers

WHEREFORE, in view of the foregoing, the instant petition is
hereby GRANTED. Accordingly, the decision of the NLRC dated July
31, 1996 is hereby VACATED. Whatever money claims due to the
petitioner shall be computed on the basis of a twelve-hour daily
work schedule. For this purpose, the case is hereby REMANDED to
the Labor Arbiter for immediate recomputation of said claims in
accordance with the foregoing findings. No costs.


G.R. No. 123520, June 26, 1998
National Semiconductor Distribution, Ltd., petitioner,
vs NLRC and Edgar Philip Santos, respondents
Ponente: Bellosillo

Issue: (1) Who has the burden of providing a claim for night shift
differential pay, the worker who claims not to have been paid night
shift differentials, or the employer in custody of pertinent
documents which would prove the fact of payment of the same?
(2) Were the requirements of due process substantially complied
with in dismissing the worker?

NSC a foreign corporation licensed to do business in the Phil.
manufactures and assembles electronic parts for export in mactan,
lapu-lapu city. Santos was employed by NSC as a technicioan in its
special products group assigned to the graveyard shift from 10pm-

On January 8, 1993 Santos did not report for work on his shift. He
resumed his duties as night shift on January 9. However, at the end
of his shift, he made 2 entries in his DTR to make it appear that he
worked on both the 8th and 9th.

His supervisor Limisiaco, received the report that there was no
technician in the graveyard shift on January 8. Limsiaco then
checked the DTRs and found out that Santos did not report on 8th
and have found in the DTR the otherwise.

Informal investigation were conducted by management and have
required Santos to explain in writing why no disciplinary action
should be taken against him for dishonesty, falsifying DTR and
violation of company rules. Santos explain that he was sick on the
8th and his DTR was a mere oversight or carelessness on his part.

Not satisfied with the explanation, NSC dismissed Santos for the
violations made. Santos then filed a complaint for illegal dismissal
and non-payment of wages and other money claims.

Labor arbiter found that Santos was dismissed on legal grounds
although he was not afforded due process, ordering NSC to
indemnify him and the unpaid night shift differentials.

NSC appealed to NLRC, but NLRC affirmed the labor arbiter holding
that the conclusions were sufficiently supported by the evidence.

NSC now imputes grave abuse of discretion to NLRC in affirming
the labor arbiter. Contending that the night shift differentials were
never raised as an issue nor pusued by Santos; also denied that
Santos was not given due process because he was afforded ample
opportunity to be heard.

Issues: (1) Was Santos illegally dismissed? (2) Santos entitled for
the money claims?

The fact that Santos neglected to substantiate his claim for night
shift differentials is not prejudicial to his cause. After all, the
burden of proving payment rests on petitioner NSC. Santos'
allegation of non-payment of this benefit, to which he is by law
entitled, is a negative allegation which need not be supported by
evidence unless it is an essential part of his cause of action. It must
be noted that his main cause of action is his illegal dismissal, and
the claim for night shift differential is but an incident of the protest
against such dismissal. Thus, the burden of proving that payment
of such benefit has been made rests upon the party who will suffer
if no evidence at all is presented by either party. By choosing not to
fully and completely disclose information to prove that it had paid
all the night shift differentials due to private respondent, petitioner
failed to discharge the burden of proof.

On the issue of due process, we agree with petitioner that Santos
was accorded full opportunity to be heard before he was
The essence of due process is simply an opportunity to be heard, or
as applied to administrative proceedings, an opportunity to explain
one's side. In the instant case, petitioner furnished private
respondent notice as to the particular acts which constituted the
ground for his dismissal. By requiring him to submit a written
explanation within 48 hours from receipt of the notice, the
company gave him the opportunity to be heard in his defense.
Private respondent availed of this chance by submitting a written
explanation. Furthermore, investigations on the incident were
actually conducted.

Finally, private respondent was notified on 14 January 1993 of the
management's decision to terminate his services.
Thus, it is clear the minimum requirements of due process have
been fulfilled by petitioner.

Petition Dismissed.

Full text
G.R. No. 91298 June 22, 1990

Construction Development Corp. of the Phils.), respondents.

Tabaquero, Albano & Associates for petitioner.

The Government Corporate Counsel for private respondent.


It is said that a woman has the privilege of changing her mind but
this is usually allowed only in affairs of the heart where the rules
are permissibly inconstant. In the case before us, Corazon Periquet,
the herein petitioner, exercised this privilege in connection with
her work, where the rules are not as fickle.

The petitioner was dismissed as toll collector by the Construction
Development Corporation of the Philippines, private respondent
herein, for willful breach of trust and unauthorized possession of
accountable toll tickets allegedly found in her purse during a
surprise inspection. Claiming she had been "framed," she filed a
complaint for illegal dismissal and was sustained by the labor
arbiter, who ordered her reinstatement within ten days "without
loss of seniority rights and other privileges and with fun back
wages to be computed from the date of her actual dismissal up to
date of her actual reinstatement." 1 On appeal, this order was
affirmed in toto by public respondent NLRC on August 29, 1980. 2

On March 11, 1989, almost nine years later, the petitioner filed a
motion for the issuance of a writ of execution of the decision. The
motion was granted by the executive labor arbiter in an order
dated June 26, 1989, which required payment to the petitioner of
the sum of P205,207.42 "by way of implementing the balance of
the judgment amount" due from the private respondent. 3
Pursuant thereto, the said amount was garnished by the NLRC
sheriff on July 12, 1989. 4 On September 11, 1989, however, the
NLRC sustained the appeal of the CDCP and set aside the order
dated June 20, 1989, the corresponding writ of execution of June
26, 1989, and the notice of garnishment. 5

In its decision, the public respondent held that the motion for
execution was time-barred, having been filed beyond the five-year
period prescribed by both the Rules of Court and the Labor Code. It
also rejected the petitioner's claim that she had not been
reinstated on time and ruled as valid the two quitclaims she had
signed waiving her right to reinstatement and acknowledging
settlement in full of her back wages and other benefits. The
petitioner contends that this decision is tainted with grave abuse of
discretion and asks for its reversal. We shall affirm instead.

Sec. 6, Rule 39 of the Revised Rules of Court, provides:

SEC. 6. Execution by motion or by independent action. A
judgment may be executed on motion within five (5) years from
the date of its entry or from the date it becomes final and
executory. After the lapse of such time, and before it is barred by
the statute of limitations, a judgment may be enforced by action.

A similar provision is found in Art. 224 of the Labor Code, as
amended by RA 6715, viz.

ART. 224. Execution of decision, orders, awards. (a) The
Secretary of Labor and Employment or any Regional Director, the
Commission or any Labor Arbiter or Med-Arbiter, or the Voluntary
Arbitrator may, motu propio, or on motion of any interested party,
issue a writ of execution on a judgment within five (5) years from
the date it becomes final and executory, requiring a sheriff or a
duly deputized officer to execute or enforce a final decision, order
or award. ...

The petitioner argues that the above rules are not absolute and
cites the exception snowed in Lancita v. Magbanua, 6 where the
Court held:

Where judgments are for money only and wholly unpaid, and
execution has been previously withheld in the interest of the
judgment debtor, which is in financial difficulties, the court has no
discretion to deny motions for leave to issue execution more than
five years after the judgments are entered. (Application of Molnar,
Belinsky, et al. v. Long Is. Amusement Corp., I N.Y.S, 2d 866)

In computing the time limited for suing out of an execution,
although there is authority to the contrary, the general rule is that
there should not be included the time when execution is stayed,
either by agreement of the parties for a definite time, by
injunction, by the taking of an appeal or writ of error so as to
operate as a supersedeas, by the death of a party, or otherwise.
Any interruption or delay occasioned by the debtor will extend the
time within which the writ may be issued without scire facias.

xxx xxx xxx

There has been no indication that respondents herein had ever
slept on their rights to have the judgment executed by mere
motions, within the reglementary period. The statute of limitation
has not been devised against those who wish to act but cannot do
so, for causes beyond their central.

Periquet insists it was the private respondent that delayed and
prevented the execution of the judgment in her favor, but that is
not the way we see it. The record shows it was she who dilly-

The original decision called for her reinstatement within ten days
from receipt thereof following its affirmance by the NLRC on
August 29, 1980, but there is no evidence that she demanded her
reinstatement or that she complained when her demand was
rejected. What appears is that she entered into a compromise
agreement with CDCP where she waived her right to reinstatement
and received from the CDCP the sum of P14,000.00 representing
her back wages from the date of her dismissal to the date of the
agreement. 7

Dismissing the compromise agreement, the petitioner now claims
she was actually reinstated only on March 16, 1987, and so should
be granted back pay for the period beginning November 28, 1978,
date of her dismissal, until the date of her reinstatement. She
conveniently omits to mention several significant developments
that transpired during and after this period that seriously cast
doubt on her candor and bona fides.

After accepting the sum of P14,000.00 from the private respondent
and waiving her right to reinstatement in the compromise
agreement, the petitioner secured employment as kitchen
dispatcher at the Tito Rey Restaurant, where she worked from
October 1982 to March 1987. According to the certification issued
by that business, 8 she received a monthly compensation of
P1,904.00, which was higher than her salary in the CDCP.

For reasons not disclosed by the record, she applied for re-
employment with the CDCP and was on March 16,1987, given the
position of xerox machine operator with a basic salary of P1,030.00
plus P461.33 in allowances, for a total of P1,491.33 monthly. 9

On June 27, 1988; she wrote the new management of the CDCP
and asked that the rights granted her by the decision dated August
29, 1980, be recognized because the waiver she had signed was
invalid. 10

On September 19, 1988, the Corporate Legal Counsel of the private
respondent (now Philippine National Construction Corporation)
recommended the payment to the petitioner of the sum of
P9,544.00, representing the balance of her back pay for three years
at P654. 00 per month (minus the P14,000.00 earlier paid). 11

On November 10, 1988, the petitioner accepted this additional
amount and signed another Quitclaim and Release reading as


THAT, I CORAZON PERIQUET, of legal age, married and resident of
No. 87 Annapolis St., Quezon City, hereby acknowledged receipt of
PESOS ONLY (P9,544.00) Philippine currency, representing the
unpaid balance of the back wages due me under the judgment
award in NLRC Case No. AB-2-864-79 entitled "Corazon Periquet vs.
PNCC- TOLLWAYS" and I further manifest that this payment is in
full satisfaction of all my claims/demands in the aforesaid case.
Likewise, I hereby manifest that I had voluntarily waived
reinstatement to my former position as TOLL TELLER and in lieu
thereof, I sought and am satisfied with my present position as
XEROX MACHINE OPERATOR in the Central Office.

Finally, I hereby certify that delay in my reinstatement, after
finality of the Decision dated 10 May 1979 was due to my own fault
and that PNCC is not liable thereto.

I hereby RELEASE AND DISCHARGE the said corporation and its
officers from money and all claims by way of unpaid wages,
separation pay, differential pay, company, statutory and other
benefits or otherwise as may be due me in connection with the
above-entitled case. I hereby state further that I have no more
claims or right of action of whatever nature, whether past, present,
future or contingent against said corporation and its officers,
relative to NLRC Case No. AB-2-864-79.

IN WITNESS WHEREOF, I have hereunto set my hand this 10th day
of November 1988 at Mandaluyong, Metro Manila. (Emphasis
supplied.) 12

The petitioner was apparently satisfied with the settlement, for in
the memorandum she sent the PNCC Corporate Legal Counsel on
November 24, 1988, 13 she said in part:

Sir, this is indeed my chance to express my gratitude to you and all
others who have helped me and my family enjoy the fruits of my
years of stay with PNCC by way of granting an additional amount of
P9,544.00 among others ...

As per your recommendation contained therein in said memo, I am
now occupying the position of xerox machine operator and is (sic)
presently receiving a monthly salary of P2,014.00.

Reacting to her inquiry about her entitlement to longevity pay,
yearly company increases and other statutory benefits, the private
respondent adjusted her monthly salary from P2,014.00 to
P3,588.00 monthly.

Then the lull. Then the bombshell.

On March 11, 1989, she filed the motion for execution that is now
the subject of this petition.

It is difficult to understand the attitude of the petitioner, who has
blown hot and cold, as if she does not know her own mind. First
she signed a waiver and then she rejected it; then she signed
another waiver which she also rejected, again on the ground that
she had been deceived. In her first waiver, she acknowledged full
settlement of the judgment in her favor, and then in the second
waiver, after accepting additional payment, she again
acknowledged fun settlement of the same judgment. But now she
is singing a different tune.

In her petition she is now disowning both acknowledgments and
claiming that the earlier payments both of which she had accepted
as sufficient, are insufficient. They were valid before but they are
not valid now. She also claimed she was harassed and cheated by
the past management of the CDCP and sought the help of the new
management of the PNCC under its "dynamic leadership." But now
she is denouncing the new management-for also tricking her into
signing the second quitclaim.

Not all waivers and quitclaims are invalid as against public policy. If
the agreement was voluntarily entered into and represents a
reasonable settlement, it is binding on the parties and may not
later be disowned simply because of a change of mind. It is only
where there is clear proof that the waiver was wangled from an
unsuspecting or gullible person, or the terms of settlement are
unconscionable on its face, that the law will step in to annul the
questionable transaction. But where it is shown that the person
making the waiver did so voluntarily, with full understanding of
what he was doing, and the consideration for the quitclaim is
credible and reasonable, the transaction must be recognized as a
valid and binding undertaking. As in this case.

The question may be asked: Why did the petitioner sign the
compromise agreement of September 16, 1980, and waive all her
rights under the judgment in consideration of the cash settlement
she received? It must be remembered that on that date the
decision could still have been elevated on certiorari before this
Court and there was still the possibility of its reversal. The
petitioner obviously decided that a bird in hand was worth two on
the wing and so opted for the compromise agreement. The amount
she was then waiving, it is worth noting, had not yet come up to
the exorbitant sum of P205,207.42 that she was later to demand
after the lapse of eight years.

The back pay due the petitioner need not detain us. We have held
in countless cases that this should be limited to three years from
the date of the illegal dismissal, during which period (but not
beyond) the dismissed employee is deemed unemployed without
the necessity of proof. 14 Hence, the petitioner's contention that
she should be paid from 1978 to 1987 must be rejected, and even
without regard to the fact (that would otherwise have been
counted against her) that she was actually employed during most
of that period.

Finally, the petitioner's invocation of Article 223 of the Labor Code
to question the failure of the private respondent to file a
supersedeas bond is not well-taken. As the Solicitor General
correctly points out, the bond is required only when there is an
appeal from the decision with a monetary award, not an order
enforcing the decision, as in the case at bar.

As officers of the court, counsel are under obligation to advise their
clients against making untenable and inconsistent claims like the
ones raised in this petition that have only needlessly taken up the
valuable time of this Court, the Solicitor General, the Government
Corporate Counsel, and the respondents. Lawyers are not merely
hired employees who must unquestioningly do the bidding of the
client, however unreasonable this may be when tested by their
own expert appreciation of the pertinent facts and the applicable
law and jurisprudence. Counsel must counsel.

WHEREFORE, the petition is DENIED, with costs against the
petitioner. It is so ordered.

Songco v NLRC
G.R. 50999

Facts: Zuellig (M) Inc. filed with the Department of Labor (Regional
Office No. 4) a clearance to terminate the services of petitioners
Jose Songco, Romeo Cipres and Amancio Manuel due to alleged
financial losses. However, the petitioners argued that the company
is not suffering any losses and the real reason for their termination
was their membership in the union. At the last hearing of the case,
the petitioner manifested that they no longer contesting their
dismissal, however, they argued that they should be granted a
separation pay. Each of the petitioners was receiving a monthly
salary of P40, 000.00 plus commissions for every sale they made.
Under the CBA entered by the Zuellig Inc. and the petitioners, in
Article XIV, Section 1(a), Any employee, who is separated from
employment due to old age, sickness, death or permanent lay-off
not due to the fault of said employee shall receive from the
company a retirement gratuity in an amount equivalent to one
months salary per year of service. One month of salary as used in
this paragraph shall be deemed equivalent to the salary at date of
retirement; years of service shall be deemed equivalent to total
service credits, a fraction of at least six months being considered
one year, including probationary employment. Other basis for
petitioners contention are Article 284 of the Labor Code with
regards to reduction of personnel and Sections 9(b) and 10 of Rule
1, Book VI of the Rules Implementing the Labor Code. The Labor
Arbiter rendered his decision directing the company to pay the
complainants separation pay equivalent to their one month salary
(exclusive of commissions, allowances, etc.) for every year of
service that they have worked with the company. The petitioners
appealed to the NLRC but it was denied. Petitioner Romeo Cipres
filed a Notice of Voluntary Abandonment and Withdrawal of
petition contending that he had received, to his full and complete
satisfaction, his separation pay. Hence, this petition.

Issue: Whether or not earned sales commissions and allowances
should be included in the monthly salary of petitioners for the
purpose of computation of their separation pay.

Held: The petition is granted. Petitioners contention that in
arriving at the correct and legal amount of separation pay due to
them, whether under the Labor Code or the CBA, their basic salary,
earned sales commissions and allowances should be added
together. Insofar as whether the allowances should be included in
the monthly salary of petitioners for the purpose of computation of
their separation pay is concerned, this has been settled in the case
of Santos vs. NLRC, 76721, in the computation of backwages and
separation pay, account must be taken not only of the basic salary
of petitioner but also of her transportation and emergency living
allowances. In the issue of whether commission should be included
in the computation of their separation pay, it is proper to define
first commission. Blacks Law Dictionary defined commission as the
recompensed, compensation or reward of an agent, salesman,
executor, trustees, receiver, factor, broker or bailee, when the
same is calculated as a percentage on the amount of his
transactions or on the profit to the principal. The nature of the
work of a salesman and the reason for such type of remuneration
for services rendered demonstrate clearly that the commission are
part of petitioners wage and salary. Some salesmen do not receive
any basic salary but depend on commission and allowances or
commissions alone, are part of petitioners wage and salary. Some
salesman do not received any basic salary but depend on
commission and allowances or commissions alone, although an
employer-employee relationship exist. In Soriano v. NLRC, it is
ruled then that, the commissions also claimed by petitioner
(override commission plus net deposit incentive) are not properly
includible in such base figure since such commissions must be
earned by actual market transactions attributable to petitioner.
Applying this by analogy, since the commissions in the present case
were earned by actual market transactions attributable to
petitioners, these should be included in their separation pay. In the
computation thereof, what should be taken into account is the
average commissions earned during their last year of employment.

Full Text
G.R. No. L-7349 July 19, 1955


Pablo C. Sanidad for petitioner.
Roxas and Sarmiento for respondents.

REYES, J. B. L., J.:

On September 4, 1950, the petitioner labor union, the Atok-Big
Wedge Mutual Benefit Association, submitted to the Atok-Big
Wedge Mining Co., Inc. (respondent herein) several demands,
among which was an increase of P0.50 in daily wage. The matter
was referred by the mining company to the Court of Industrial
Relations for arbitration and settlement (Case No. 523-V). In the
course of conciliatory measures taken by the Court, some of the
demands were granted, and others (including the demand for
increased wages) rejected, and so, hearings proceeded and
evidence submitted on the latter. On July 14, 1951, the Court
rendered a decision (Record, pp. 25-32) fixing the minimum wage
at P2.65 a day with the rice ration, or P3.20 without rice ration;
denying the deduction from such minimum wage, of the value of
housing facilities furnished by the company to the laborers, as well
as the efficiency bonus given to them by the company; and ordered
that the award be made effective retroactively from the date of
the demand, September 4, 1950, as agreed by the parties. From
this decision, the mining company appealed to this Court (G.R. No.

Subsequently, an urgent petition was presented in Court on
October 15, 1952 by the Atok-Big Wedge Mining Company for
authority to stop operations and lay off employees and laborers,
for the reason that due to the heavy losses, increased taxes, high
cost of materials, negligible quantity of ore deposits, and the
enforcement of the Minimum Wage Law, the continued operation
of the company would lead to its immediate bankruptcy and
collapse (Rec. pp. 100-109). To avert the closure of the company
and the consequent lay-off of hundreds of laborers and employees,
the Court, instead of hearing the petition on the merits, convened
the parties for voluntary conciliation and mediation. After lengthy
discussions and exchange of views, the parties on October 29, 1952
reached an agreement effective from August 4, 1952 to December
31, 1954 (Rec. pp. 18-23). The Agreement in part provides:


That the petitioner, Atok-Big Wedge Mining Company,
Incorporated, agrees to abide by whatever decision that the
Supreme Court may render with respect to Case No. 523-V (G.R.
5276) and Case No. 523-1 (10) (G.R. 5594).

x x x x x x x x x


x x x x x x x x x

That the petitioner, Atok-Big Wedge Mining Company,
Incorporated, and the respondent, Atok-Big Wedge Mutual Benefit
Association, agree that the following facilities heretofore given or
actually being given by the petitioner to its workers and laborers,
and which constitute as part of their wages, be valued as follows:

Rice ration

P.55 per day

Housing facility

40 per day

All other facilities such as recreation facilities, medical treatment to
dependents of laborers, school facilities, rice ration during off-days,
water, light, fuel, etc., equivalent to at least

85 per day

It is understood that the said amount of facilities valued at the
abovementioned prices, may be charged in full or partially by the
Atok-Big Wedge Mining Company, Inc., against laborer or
employee, as it may see fit pursuant to the exigencies of its

The agreement was submitted to the Court for approval and on
December 26, 1952, was approved by the Court in an order giving
it effect as an award or decision in the case (Rec., p. 24).

Later, Case No. G.R. No. L-5276 was decided by this Court
(promulgated March 3, 1953), affirming the decision of the Court
of Industrial Relations fixing the minimum cash wage of the
laborers and employees of the Atok-Big Wedge Mining Co. at P3.20
cash, without rice ration, or P2.65, with rice ration. On June 13,
1953, the labor union presented to the Court a petition for the
enforcement of the terms of the agreement of October 29, 1952,
as allegedly modified by the decision of this Court in G.R. No. L-
5276 and the provisions of the Minimum Wage Law, which has
since taken effect, praying for the payment of the minimum cash
wage of P3.45 a day with rice ration, or P4.00 without rice ration,
and the payment of differential pay from August 4, 1952, when the
award became effective. The mining company opposed the
petition claiming that the Agreement of October 29, 1952 was
entered into by the parties with the end in view that the company's
cost of production be not increased in any way, so that it was
intended to supersede whatever decision the Supreme Court
would render in G.R. No. L-5276 and the provisions of the
Minimum Wage Law with respect to the minimum cash wage
payable to the laborers and employees. Sustaining the opposition,
the Court of Industrial Relations, in an order issued on September
22, 1953 (Rec. pp. 44-49), denied the petition, upon the ground
that when the Agreement of the parties of October 29, 1952 was
entered into by them, they already knew the decision of said Court
(although subject to appeal to the Supreme Court) fixing the
minimum cash wage at P3.20 without rice ration, or P2.65 with rice
ration, as well as the provisions of the Minimum Wage Law
requiring the payment of P4 minimum daily wage in the provinces
effective August 4, 1952; so that the parties had intended to be
regulated by their Agreement of October 29, 1952. On the same
day, the Court issued another order (Rec. pp. 50-55), denying the
claim of the labor union for payment of an additional 50 per cent
based on the basic wage of P4 for work on Sundays and holidays,
holding that the payments being made by the company were
within the requirements of the law. Its motion for the
reconsideration of both orders having been denied, the labor union
filed this petition for review by certiorari.

The first issue submitted to us arises from an apparent
contradiction in the Agreement of October 29, 1952. By paragraph
III thereof, the parties by common consent evaluated the facilities
furnished by the Company to its laborers (rice rations, housing,
recreation, medical treatment, water, light, fuel, etc.) at P1.80 per
day, and authorized the company to have such value "charge in full
or partially against any laborer or employee as it may see fit";
while in paragraph I, the Company agreed to abide by the decision
of this Court (pending at the time the agreement was had) in G.R.
No. L-5594; and as rendered, the decision was to the effect that
the Company could deduct from the minimum wage only the value
of the rice ration.

It is contended by the petitioner union that the two provisions
should be harmonized by holding paragraph III (deduction of all
facilities) to be merely provisional, effective only while this Court
had not rendered its decision in G.R. No. L-5594; and that the
terms of said paragraph should be deemed superseded by the
decision from the time the latter became final, some four or five
months after the agreement was entered into; in consequence, (it
is claimed), the laborers became entitled by virtue of said decision
to the prevailing P4.00 minimum wage with no other deduction
than that of the rice ration, or a net cash wage of P3.45.

This contention, in our opinion, is untenable. The intention of the
parties could not have been to make the arrangement in paragraph
III a merely provisional arrangement pending the decision of the
Supreme Court for "this agreement" was expressly made
retroactive and effective as of August 4, 1952, and to be in force up
to and including December 31, 1954" (Par. IV). When concluded on
October 29, 1952, neither party could anticipate the date when the
decision of the Supreme Court would be rendered; nor is any
reason shown why the parties should desire to limit the effects of
the decision to the period 1952-1954 if it was to supersede the
agreement of October 29, 1952.

To ascertain the true import of paragraph I of said Agreement
providing that the respondent company agreed to abide by
whatever decision the Supreme Court would render in G.R. No. L-
5276, it is important to remember that, as shown by the records,
the agreement was prompted by an urgent petition filed by the
respondent mining company to close operations and lay-off
laborers because of heavy losses and the full enforcement of the
Minimum Wage Law in the provinces, requiring it to pay its
laborers the minimum wage of P4; to avoid such eventuality,
through the mediation of the Court of Industrial Relations, a
compromise was reached whereby it was agreed that the company
would pay the minimum wage fixed by the law, but the facilities
then being received by the laborers would be evaluated and
charged as part of the wage, but without in any way reducing the
P2.00 cash portion of their wages which they were receiving prior
to the agreement (hearing of Oct. 28, 1952, CIR, t.s.n. 47). In other
words, while it was the objective of the parties to comply with the
requirements of the Minimum Wage Law, it was also deemed
important that the mining company should not have to increase
the cash wages it was then paying its laborers, so that its cost of
production would not also be increased, in order to prevent its
closure and the lay-off of employees and laborers. And as found by
the Court below in the order appealed from (which finding is
conclusive upon us), "it is this eventuality that the parties did not
like to happen, when they have executed the said agreement"
(Rec. p. 49). Accordingly, after said agreement was entered into,
the Company started paying its laborers a basic cash or "take-
home" wage of P2.20 (Rec. p. 9), representing the difference
between P4 (minimum wage) and P1.80 (value of all facilities).

With this background, the provision to abide by our decision in G.R.
No. L-5276 can only be interpreted thus: That the company agreed
to pay whatever award this Court would make in said case from the
date fixed by the decision (which was that of the original demand,
September 4, 1950) up to August 3, 1952 (the day previous to the
effectivity of the Compromise Agreement) and from August 4, 1954
to December 31, 1954, they are to be bound by their agreement of
October 29, 1952.

This means that during the first period (September 4, 1950 to
August 3, 1952), only rice rations given to the laborers are to be
regarded as forming part of their wage and deductible therefrom.
The minimum wage was then fixed (by the Court of Industrial
Relations, and affirmed by this Court) at P3.20 without rice ration,
or P2.65 with rice ration. Since the respondent company had been
paying its laborers the basic cash or "take-home" wage of P2 prior
to said decision and up to August 3, 1952, the laborers are entitled
to a differential pay of P0.65 per working day from September 4,
1950 (the date of the effectivity of the award in G.R. L-5276) up to
August 3, 1952.

From August 4, 1952, the date when the Agreement of the parties
of October 29, 1952 became effective (which was also the date
when the Minimum Wage Law became fully enforceable in the
provinces), the laborers should be paid a minimum wage of P4 a
day. From this amount, the respondent mining company is given
the right to charge each laborer "in full or partially", the facilities
enumerated in par. III of the Agreement; i.e., rice ration at P0.55
per day, housing facility at P0.40 per day, and other facilities
"constitute part of his wages". It appears that the company had
actually been paying its laborers the minimum wage of P2.20 since
August 4, 1952; hence they are not entitled to any differential pay
from this date.

Petitioner argues that to allow the deductions stipulated in the
Agreement of October 29, 1952 from the minimum daily wage of
P4 would be a waiver of the minimum wage fixed by the law and
hence null and void, since Republic Act No. 602, section 20,
provides that "no agreement or contract, oral or written, to accept
a lower wage or less than any other under this Act, shall be valid".
An agreement to deduct certain facilities received by the laborers
from their employer is not a waiver of the minimum wage fixed by
the law. Wage, as defined by section 2 of Republic Act No. 602,
"includes the fair and reasonable value as determined by the
Secretary of Labor, of board, lodging, or other facilities customarily
furnished by the employer to the employee." Thus, the law permits
the deduction of such facilities from the laborer's minimum wage
of P4, as long as their value is "fair and reasonable". It is not here
claimed that the valuations fixed in the Agreement of October 29,
1952 are not fair and reasonable. On the contrary, the agreement
expressly states that such valuations:

"have been arrived at after careful study and deliberation by both
representatives of both parties, with the assistance of their
respective counsels, and in the presence of the Honorable
Presiding Judge of the Court of Industrial Relations" (Rec. p. 2).

Neither is it claimed that the parties, with the aid of the Court of
Industrial Relations in a dispute pending before it, may not fix by
agreement the valuation of such facilities, without referring the
matter to the Department of Labor.

Petitioner also argues that to allow the deductions of the facilities
appearing in the Agreement referred to, would be contrary to the
mandate of section 19 of the law, that "nothing in this Act . . .
justify an employer . . . in reducing supplements furnished on the
date of enactment.

The meaning of the term "supplements" has been fixed by the
Code of Rules and Regulations promulgated by the Wage
Administration Office to implement the Minimum Wage Law (Ch.
1, [c]), as:

extra renumeration or benefits received by wage earners from
their employees and include but are not restricted to pay for
vacation and holidays not worked; paid sick leave or maternity
leave; overtime rate in excess of what is required by law; sick,
pension, retirement, and death benefits; profit-sharing; family
allowances; Christmas, war risk and cost-of-living bonuses; or other
bonuses other than those paid as a reward for extra output or time
spent on the job.

"Supplements", therefore, constitute extra renumeration or special
privileges or benefits given to or received by the laborers over and
above their ordinary earnings or wages. Facilities, on the other
hand, are items of expense necessary for the laborer's and his
family's existence and subsistence, so that by express provision of
the law (sec. 2 [g]) they form part of the wage and when furnished
by the employer are deductible therefrom since if they are not so
furnished, the laborer would spend and pay for them just the
same. It is thus clear that the facilities mentioned in the agreement
of October 29, 1952 do not come within the term "supplements" as
used in Art. 19 of the Minimum Wage Law.

For the above reasons, we find the appeal from the Order of the
Court a quo of September 22, 1953 denying the motion of the
petitioner labor union for the payment of the minimum wage of
P3.45 per day plus rice ration, or P4 without rice ration, to be
unmeritorious and untenable.

The second question involved herein relates to the additional
compensation that should be paid by the respondent company to
its laborers for work rendered on Sundays and holidays. It is
admitted that the respondent company is paying an additional
compensation of 50 per cent based on the basic "cash portion" of
the laborer's wage of P2.20 per day; i.e., P1.10 additional
compensation for each Sunday or holiday's work. Petitioner union
insists, however, that this 50 per cent additional compensation
should be computed on the minimum wage of P400 and not on the
"cash portion" of the laborer's wage of P2.20, under the provisions
of the Agreement of October 29, 1952 and the Minimum Wage

SEC. 4. Commonwealth Act No. 444 (otherwise known as the Eight
Hour Labor Law) provides:

No person, firm, or corporations, business establishment or place
or center of labor shall compel an employee or laborer to work
during Sundays and holidays, unless he is paid an additional sum of
at least twenty-five per centum of his regular renumeration:

The minimum legal additional compensation for work on Sundays
and legal holidays is, therefore, 25 per cent of the laborer's regular
renumeration. Under the Minimum Wage Law, this minimum
additional compensation is P1 a day (25 per cent of P4, the
minimum daily wage).

While the respondent company computes the additional
compensation given to its laborers for work on Sundays and
holidays on the "cash portion" of their wages of P2.20, it is giving
them 50 per cent thereof, or P1.10 a day. Considering that the
minimum additional compensation fixed by the law is P1 (25 per
cent of P4), the compensation being paid by the respondent
company to its laborers is even higher than such minimum legal
additional compensation. We, therefore, see no error in the
holding of the Court a quo that the respondent company has not
violated the law with respect to the payment of additional
compensation for work rendered by its laborers on Sundays and
legal holidays.

Finding no reason to sustain the present petition for review, the
same is, therefore, dismissed, with costs against the petitioner
Atok-Big Wedge Mutual Benefit Association.

Mabeza v NLRC

Norma Mabeza was an employee hired by Hotel Supreme in Baguio
City. In 1991, an inspection was made by the Department of Labor
and Employment (DOLE) at Hotel Supreme and the DOLE
inspectors discovered several violations by the hotel management.
Immediately, the owner of the hotel, Peter Ng, directed his
employees to execute an affidavit which would purport that they
have no complaints whatsoever against Hotel Supreme. Mabeza
signed the affidavit but she refused to certify it with the
prosecutors office. Later, when she reported to work, she was not
allowed to take her shift. She then asked for a leave but was not
granted yet shes not being allowed to work. In May 1991, she then
sued Peter Ng for illegal dismissal. Peter Ng, in his defense, said
that Mabeza abandoned her work. In July 1991, Peter Ng also filed
a criminal complaint against Mabeza as he alleged that she had
stolen a blanket and some other stuff from the hotel. Peter Ng
went on to amend his reply in the labor case to make it appear that
the reason why he dismissed Mabeza was because of his loss of
confidence by reason of the theft allegedly committed by Mabeza.
The labor arbiter who handled the case, a certain Felipe Pati, ruled
in favor of Peter Ng.

Whether or not there is abandonment in the case at bar. Whether
or not loss of confidence as ground for dismissal applies in the case
at bar.

No. The side of Peter Ng is bereft of merit so is the decision of the
Labor Arbiter which was unfortunately affirmed by the NLRC.
Abandonment is not present. Mabeza returned several times to
inquire about the status of her work or her employment status.
She even asked for a leave but was not granted. Her asking for
leave is a clear indication that she has no intention to abandon her
work with the hotel. Even the employer knows that his purported
reason of dismissing her due to abandonment will not fly so he
amended his reply to indicate that it is actually loss of confidence
that led to Mabezas dismissal.
Loss of Confidence
It is true that loss of confidence is a valid ground to dismiss an
employee. But this is ideally only applied to workers whose
positions require a certain level or degree of trust particularly
those who are members of the managerial staff. Evidently, an
ordinary chambermaid who has to sign out for linen and other
hotel property from the property custodian each day and who has
to account for each and every towel or bedsheet utilized by the
hotels guests at the end of her shift would not fall under any of
these two classes of employees for which loss of confidence, if ably
supported by evidence, would normally apply. Further, the
suspicious filing by Peter Ng of a criminal case against Mabeza long
after she initiated her labor complaint against him hardly warrants
serious consideration of loss of confidence as a ground of
Mabezas dismissal.

petitioner, vs. HON. LEONARDO A. QUISUMBING in his capacity as
the Secretary of Labor and Employment; HON. CRESENCIANO B.
TRAJANO in his capacity as the Acting Secretary of Labor and
Employment; DR. BRIAN MACCAULEY in his capacity as the
Superintendent of International School-Manila; and

G.R. No. 128845, June 1, 2000

Private respondent International School, Inc. (School), pursuant to
PD 732, is a domestic educational institution established primarily
for dependents of foreign diplomatic personnel and other
temporary residents. The decree authorizes the School to employ
its own teaching and management personnel selected by it either
locally or abroad, from Philippine or other nationalities, such
personnel being exempt from otherwise applicable laws and
regulations attending their employment, except laws that have
been or will be enacted for the protection of employees. School
hires both foreign and local teachers as members of its faculty,
classifying the same into two: (1) foreign-hires and (2) local-hires.

The School grants foreign-hires certain benefits not accorded local-
hires. Foreign-hires are also paid a salary rate 25% more than local-

When negotiations for a new CBA were held on June 1995,
petitioner ISAE, a legitimate labor union and the collective
bargaining representative of all faculty members of the School,
contested the difference in salary rates between foreign and local-
hires. This issue, as well as the question of whether foreign-hires
should be included in the appropriate bargaining unit, eventually
caused a deadlock between the parties.

ISAE filed a notice of strike. Due to the failure to reach a
compromise in the NCMB, the matter reached the DOLE which
favored the School. Hence this petition.

Whether the foreign-hires should be included in bargaining unit of
local- hires.

NO. The Constitution, Article XIII, Section 3, specifically provides
that labor is entitled to humane conditions of work. These
conditions are not restricted to the physical workplace the
factory, the office or the field but include as well the manner by
which employers treat their employees.

Discrimination, particularly in terms of wages, is frowned upon by
the Labor Code. Article 248 declares it an unfair labor practice for
an employer to discriminate in regard to wages in order to
encourage or discourage membership in any labor organization.

The Constitution enjoins the State to protect the rights of workers
and promote their welfare, In Section 18, Article II of the
constitution mandates to afford labor full protection. The State
has the right and duty to regulate the relations between labor and
capital. These relations are not merely contractual but are so
impressed with public interest that labor contracts, collective
bargaining agreements included, must yield to the common good.

However, foreign-hires do not belong to the same bargaining unit
as the local-hires.

A bargaining unit is a group of employees of a given employer,
comprised of all or less than all of the entire body of employees,
consistent with equity to the employer indicate to be the best
suited to serve the reciprocal rights and duties of the parties under
the collective bargaining provisions of the law.

The factors in determining the appropriate collective bargaining
unit are (1) the will of the employees (Globe Doctrine); (2) affinity
and unity of the employees interest, such as substantial similarity
of work and duties, or similarity of compensation and working
conditions (Substantial Mutual Interests Rule); (3) prior collective
bargaining history; and (4) similarity of employment status. The
basic test of an asserted bargaining units acceptability is whether
or not it is fundamentally the combination which will best assure to
all employees the exercise of their collective bargaining rights.

In the case at bar, it does not appear that foreign-hires have
indicated their intention to be grouped together with local-hires
for purposes of collective bargaining. The collective bargaining
history in the School also shows that these groups were always
treated separately. Foreign-hires have limited tenure; local-hires
enjoy security of tenure. Although foreign-hires perform similar
functions under the same working conditions as the local-hires,
foreign-hires are accorded certain benefits not granted to local-
hires such as housing, transportation, shipping costs, taxes and
home leave travel allowances. These benefits are reasonably
related to their status as foreign-hires, and justify the exclusion of
the former from the latter. To include foreign-hires in a bargaining
unit with local-hires would not assure either group the exercise of
their respective collective bargaining rights.

WHEREFORE, the petition is GIVEN DUE COURSE. The petition is