Meal Periods

NDC vs. CIR (supra.)

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

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

Sime Darby Pilipinas, Inc., petitioner, is engaged in the manufacture of automotive tires, tubes and
other rubber products. Sime Darby Salaried Employees Association (ALU-TUCP), private
respondent, is an association of monthly salaried employees of petitioner at its Marikina factory. Prior
to the present controversy, all company factory workers in Marikina including members of private
respondent union worked from 7:45 a.m. to 3:45 p.m. with a 30-minute paid "on call" lunch break.
On 14 August 1992 petitioner issued a memorandum to all factory-based employees advising all its
monthly salaried employees in its Marikina Tire Plant, except those in the Warehouse and Quality
Assurance Department working on shifts, a change in work schedule effective 14 September 1992
thus
TO: ALL FACTORY-BASED EMPLOYEES
RE: NEW WORK SCHEDULE
Effective Monday, September 14, 1992, the new work schedule of the factory office will be as
follows:
7:45 A.M. 4:45 P.M. (Monday to Friday)
7:45 A.M. 11:45 A.M. (Saturday).
Coffee break time will be ten minutes only anytime between:
9:30 A.M. 10:30 A.M. and
2:30 P.M. 3:30 P.M.
Lunch break will be between:
12:00 NN 1:00 P.M. (Monday to Friday).

Excluded from the above schedule are the Warehouse and QA employees who are on
shifting. Their work and break time schedules will be maintained as it is now. 1
Since private respondent felt affected adversely by the change in the work schedule and discontinuance
of the 30-minute paid "on call" lunch break, it filed on behalf of its members a complaint with the Labor
Arbiter for unfair labor practice, discrimination and evasion of liability pursuant to the resolution of this
Court in Sime Darby International Tire Co., Inc. v.NLRC. 2 However, the Labor Arbiter dismissed the
complaint on the ground that the change in the work schedule and the elimination of the 30-minute paid
lunch break of the factory workers constituted a valid exercise of management prerogative and that the
new work schedule, break time and one-hour lunch break did not have the effect of diminishing the
benefits granted to factory workers as the working time did not exceed eight (8) hours.

The Labor Arbiter further held that the factory workers would be unjustly enriched if they continued to
be paid during their lunch break even if they were no longer "on call" or required to work during the
break. He also ruled that the decision in the earlier Sime Darby case 3 was not applicable to the instant
case because the former involved discrimination of certain employees who were not paid for their 30minute lunch break while the rest of the factory workers were paid; hence, this Court ordered that the
discriminated employees be similarly paid the additional compensation for their lunch break.
Private respondent appealed to respondent National Labor Relations Commission (NLRC) which
sustained the Labor Arbiter and dismissed the appeal. 4 However, upon motion for reconsideration by
private respondent, the NLRC, this time with two (2) new commissioners replacing those who earlier
retired, reversed its earlier decision of 20 April 1994 as well as the decision of the Labor Arbiter. 5 The
NLRC considered the decision of this Court in the Sime Darby case of 1990 as the law of the case
wherein petitioner was ordered to pay "the money value of these covered employees deprived of lunch
and/or working time breaks." The public respondent declared that the new work schedule deprived the
employees of the benefits of a time-honored company practice of providing its employees a 30-minute
paid lunch break resulting in an unjust diminution of company privileges prohibited by Art. 100 of the
Labor Code, as amended. Hence, this petition alleging that public respondent committed grave abuse of
discretion amounting to lack or excess of jurisdiction: (a) in ruling that petitioner committed unfair labor
practice in the implementation of the change in the work schedule of its employees from 7:45 a.m. 3:45
p.m. to 7:45 a.m. 4:45 p.m. with one-hour lunch break from 12:00 nn to 1:00 p.m.; (b) in holding that
there was diminution of benefits when the 30-minute paid lunch break was eliminated; (c) in failing to
consider that in the earlier Sime Darby case affirming the decision of the NLRC, petitioner was authorized
to discontinue the practice of having a 30-minute paid lunch break should it decide to do so; and, (d) in
ignoring petitioner's inherent management prerogative of determining and fixing the work schedule of its
employees which is expressly recognized in the collective bargaining agreement between petitioner and
private respondent.
The Office of the Solicitor General filed in a lieu of comment a manifestation and motion
recommending that the petitioner be granted, alleging that the 14 August 1992 memorandum which
contained the new work schedule was not discriminatory of the union members nor did it constitute
unfair labor practice on the part of petitioner.
We agree, hence, we sustain petitioner. The right to fix the work schedules of the employees rests
principally on their employer. In the instant case petitioner, as the employer, cites as reason for the
adjustment the efficient conduct of its business operations and its improved production. 6 It
rationalizes that while the old work schedule included a 30-minute paid lunch break, the employees could
be called upon to do jobs during that period as they were "on call." Even if denominated as lunch break,
this period could very well be considered as working time because the factory employees were required
to work if necessary and were paid accordingly for working. With the new work schedule, the employees
are now given a one-hour lunch break without any interruption from their employer. For a full one-hour
undisturbed lunch break, the employees can freely and effectively use this hour not only for eating but
also for their rest and comfort which are conducive to more efficiency and better performance in their

work. Since the employees are no longer required to work during this one-hour lunch break, there is no
more need for them to be compensated for this period. We agree with the Labor Arbiter that the new work
schedule fully complies with the daily work period of eight (8) hours without violating the Labor
Code. 7 Besides, the new schedule applies to all employees in the factory similarly situated whether they
are union members or not. 8
Consequently, it was grave abuse of discretion for public respondent to equate the earlier Sime Darby
case 9 with the facts obtaining in this case. That ruling in the former case is not applicable here. The issue
in that case involved the matter of granting lunch breaks to certain employees while depriving the other
employees of such breaks. This Court affirmed in that case the NLRC's finding that such act of
management was discriminatory and constituted unfair labor practice.

The case before us does not pertain to any controversy involving discrimination of employees but
only the issue of whether the change of work schedule, which management deems necessary to
increase production, constitutes unfair labor practice. As shown by the records, the change effected
by management with regard to working time is made to apply to all factory employees engaged in
the same line of work whether or not they are members of private respondent union. Hence, it
cannot be said that the new scheme adopted by management prejudices the right of private
respondent to self-organization.
Every business enterprise endeavors to increase its profits. In the process, it may devise means to
attain that goal. Even as the law is solicitous of the welfare of the employees, it must also protect the
right of an employer to exercise what are clearly management prerogatives. 10 Thus, management is
free to regulate, according to its own discretion and judgment, all aspects of employment, including hiring,
work assignments, working methods, time, place and manner of work, processes to be followed,
supervision of workers, working regulations, transfer of employees, work supervision, lay off of workers
and discipline, dismissal and recall of workers. 11 Further, management retains the prerogative, whenever
exigencies of the service so require, to change the working hours of its employees. So long as such
prerogative is exercised in good faith for the advancement of the employer's interest and not for the
purpose of defeating or circumventing the rights of the employees under special laws or under valid
agreements, this Court will uphold such exercise.12
While the Constitution is committed to the policy of social justice and the protection of the working class, it
should not be supposed that every dispute will be automatically decided in favor of labor. Management
also has rights which, as such, are entitled to respect and enforcement in the interest of simple fair play.
Although this Court has inclined more often than not toward the worker and has upheld his cause in his
conflicts with the employer, such favoritism has not blinded the Court to the rule that justice is in every
case for the deserving, to be dispensed in the light of the established facts and the applicable law and
doctrine. 13
WHEREFORE, the Petition is GRANTED. The Resolution of the National Labor Relations Commission
dated 29 November 1994 is SET ASIDE and the decision of the Labor Arbiter dated 26 November 1993
dismissing the complaint against petitioner for unfair labor practice is AFFIRMED.

SO ORDERED.

Night Shift Differential

GR No. L-1309 July 26, 1948
SHELL COMPANY OF THE PHILIPPINE ISLANDS, LIMITED, recurrent
vs. NATIONAL LABOR UNION appeal.

Messrs. Ross, Selph, Carrascoso and Janda on behalf of the appellant.

Messrs. Paguia and Villanueva on behalf of the respondent.
Briones, J. :
Acting on a request from the working entity called "National Labor Union," the Court of Industrial
Relations has issued a decision in which, among other things, the oil company "The Shell Company
of Philippine Islands, Limited" is obliged to pay His workers who work at night (since the sun goes
until he gets up the next day) an additional compensation of 50% of their regular wages if they
worked by day. It seems that the comania night service needs a certain number of workers, because
the planes from abroad often come off and landing at night, and is thus necessary that evening
chores for supplying fuel and lubricants are made, and other purposes. The oil company has
excepcionado against that decision hence this action for certiorari so that we reverse.
The appellant company claims and argues that not only there is no legal provision empowering the
Industrial Relations Court to order the payment of additional workers who work at night, but
compensation, on the contrary, the Commonwealth Act No. 444 relieve the employer of such
obligation since in such cases where law is compulsory payment of "overtime" (additional
compensation) are provided, and among such cases do not include the work at night.
Meanwhile, the labor union appeal argues that the authority at issue is part of the extensive and
effective powers to the Commonwealth Act No. 103 - the charter of the Industrial Relations Court the court grants; and that Act No. 444 cited Commonwealth has no aplication to this case, as it is
necessarily limited in scope, particularly referring exclusively to maximum hours of work allowed
contidiano industrial establishments - the day of 8 hours.
Our conclusion is that the labor union has appealed the reason on your part. For clear and full
elucidation of the points discussed, we estmamos convenient, even at the risk of prolonging this
paper, transcribe relevant legal lasdisposiciones are Articles 1, 4 and 13 of the Commonwealth Act
No. 103. Here they are:
SECTION 1. The Judge: his appointment, qualifications, compensation, tenure . - There is
hereby created a Court of Industrial Relations, Which Shall Have Entire jurisdiction over the
Philippines, to consider, investigate, choose, and settle any question, matter, controversy or
dispute Arising between, and / or Affecting, Employers and employees or laborers , and
landlords and tenants or farm-laborers, and Regulate the relation Between them, subject to,
and in Accordance With, esta Provisions of the Act. The Court Shall keep a record of all its
proceedings and Shall be presided over by a Judge to be appointed by the President of the
Philippines With the consent of the Commission on Appointments of the National
Assembly. The Judge of the Court Shall hold office During good behavior have Reaches
Until the age of seventy years, or Becomes incapacitated to discharge the duties of His
office. His qualifications Shall be the same as provided in the Constitution Those for
members of the Supreme Court and I Shall Receive an annual compensation of ten
thousand pesos and Shall Be Entitled to traveling expenses and per diems When performing
official duties outside of the City of Manila. The Department of Justice Shall Have executive
supervision over the Court.
SEC. 4. Strikes and lockouts . - The Court Shall take cognizance for purpose of prevention,
arbitration, and settlement decision, of any industry or agricultural dispute Causing or likely
to cause a strike or lockout, form Differences Arising as regards wages, shares or
compensation, hours of work or conditions of tenancy or employment, Between Employers
and employees or laborers and Between landlords and tenants or farm-laborers, provided

That the number of employees, laborers or tenants or farm-laborers Involved Exceeds thirty,
and industry or agricultural Such dispute is Submitted to the Court by the Secretary of Labor,
or by any or Both of the parties to the controversy and certified by the Secretary of Labor as
Existing and proper to be Dealt With by the Court for the sake of public interest. Such In all
cases, the Secretary of Labor or the party or parties Submitting the disputes, and Specifically
Shall Clearly state in writing the questions to be decided.Upon the submission of Such a
controversy or question by the Secretary of Labor, His intervention therein as authorized by
law, Shall cease.
The Court Shall, before hearing the dispute and in the course of Such hearing, endeavor to
reconcile the parties and induce them to settle the dispute by amicable agreement. If any
agreement as to the whole or any part of the dispute is arrived at by the parties, a
memorandum of Its terms Shall Be made in writing, signed and Acknowledged by the parties
thereto before the Judge of the Court or any official acting in His Behalf and authorized to
administer oaths or acknowledgments, or, before a notary public. The memorandum Shall be
filed in the office of the Clerk of the Court, and, unless otherwise ordered by the Court, Shall,
as Between the parties to the agreement, have the same effect as, and be Deemed to be, a
decision or award .
SEC. 13. Character of the award . - In making an award, order or decision, under the
Provisions of section four of esta Act, the Court Shall not be restricted to the specific relief or
Claimed Demands made by the parties to the industry or agricultural dispute, but in May
include the award , any order or decision or determination Which my matter be Deemed
Necessary or expedient for the purpose of setting the dispute or of preventative Further
Industrial or agricultural disputes.
Clearly the transcribed the following provisions: (a) that when a dispute between the principal and
the employee or worker, viz arises. on issue of wages, the Industrial Relations Court has jurisdiction
throughout the territory of the Philippines to consider, investigate and resolve the dispute, setting
wages deemed fair and reasonable; (B) for the purposes of prevention, arbitration decision and
under the same Industrial Relations Court also tien jurisdiction to hear any dispute - industrial and
agricultural - resulting from any differences in wages, or compensation units, hours work,
employment conditions or sharecropping between employers and employees or workers and
between owners and landowners or agricultural workers subject to compliance with certain
requirements and conditions, when he sees that the dispute causes or may cause a strike; (C) that
in exercising its powers specified above, the Industrial Relations Court is not limited, to decide the
dispute, to grant the remedy or remedies requested by the parties to the dispute, but may include in
the order or decision any matter or determination for the purpose of settling the dispute or to prevent
further industrial or agricultural disputes.
In the case we are concerned there is undoubtedly an industrial dispunta. While the company, the
company Shell, is not willing to pay their workers higher wages night the workers back, the
"NationalLabor Union", which are affiliated workersin Shell, other wage claims for service night - 50%
more. Herein lies the dispute industrial dispute. Now, what has made the Court of Industrial
Relations, after the conflict subject to its jurisdiction? Precisely what rules the Act No. 103
Commonwealth charter of its creation and operation, namely: consider, investigate and prosecute
the dispute, after resolviedola in the sense that resolved, ie remunerating work night with 50% more
than the wages of day. And this is perfectly legal both within the scope of Article 1 of the Act No. 103
empowers the Court of Industrial Relations to decide any dispute over wages and compensation in
the way it deems reasonable and appropriate, and within the framework of Article 4 of the Act which
authorizes the court to try and decide any litigation or agricultural or industrial controversy determine
the outbreak of a strike or tends to cause it. But still: what was done by the Industrial Relations

Trbunal in this case is also legal within the framework of Article 13 of the Act No. 103, article, as is
seen not only empowers the court to grant the remedy recabanlas parts, but even go beyond, that is
not specifically requested to grant remedies, provided they are encamienen to resolve once the
dispute or to prevent the outbreak of further disputes or strikes.
It is evident that these broad powers the proposed equipping Estadose Industrial Relations Court to
the maximum possible utility and effectiveness, making it not just an academic agency, but truly
active, dynamic and efficient - in short, the official machinery for excellence in the formidable thorny
task of resolving industrial disputes, yagricolas of some sort, preventing and thereby avoiding such
stoppages and strikes that afflict and hurt not only businesses and workers but, in general, any
community. In his concurring opinion issued in the authoritative case against Ang Tibay Industrial
Relations Court 1 (RG No. 46496), the Magistado Laurel had rightly expressed the fundamental idea
that emphasizes the creation of the court, with the following statement:
In Commonwealth Act No. 103, and by it, our government no longer performs the role of
mediator or intervenor but mere That of supreme arbiter . (Emphasis added.).
The appellant argues, however, that while it is true that in case of dispute the Court of Industrial
relaciiones has, under its organic law, the power to set wages, such power is not absolute, but is
subject to certain and cortapizas restrictions, provided in the law commonly known law on the eight
hours, the Commonwealth Act No. 444, which is entirely relevant articles transacriben below:
SECTION 1. The legal working day for any person employed by another Shall Be of not
more than eight hours daily. When the work is not continuous, the time During Which the
laborer is not working and can leave His working place and can rest completely Shall Not Be
Counted.
SEC. 3. May be Performed Work beyond eight hours a day in case of actual or impending
emergencies Caused by serious accidents, fire, flood, typhoon, earthquake, epidemic, or
other disaster or calamity in order to Prevent loss to life and property or imminent danger to
public safety; or in case urgent work to be Performed on the machines, equipment, or
installations in order to avoid a serious loss Which Otherwise the employer would suffer, or
some other just cause of a like nature; Such cases but in all the laborers and employees
Shall Be Entitled to Receive compensation for the overtime work Performed at the same rate
as Their wages or salary regularly, plus AT LEAST twenty-five per centum additional.
In case of national emergency the government is empowered to Establish rules and
regulations for the operation of the plants and factories and to determine the wages to be
paid the laborers.
SEC. 4. No person, firm, or corporation, or business establishment or place of work Shall
center compel an employee or laborer to work During Sundays and legal holidays, UNLESS
I have is paid an additional sum of at Least Twenty-five per centum of His regulate
remuneration: Provided however , That prohibition esta Shall not apply to public utilities
performing some public service: such as supply supplying gas, electricity, power, water, or
providing Means of transportation or communication.
Since - argumentanlos recurring lawyers - that in these articles where the payment of additional
compensation or additional authorized and are alone, namely specified: (a) in case of "overtime" or
work in excess of the regular hours for reasons imperiosasde urgency because of some disaster or
accident, or to avoid losses or repair; (B) in the case of work on Sundays and holidays; (C)
emergency, and nothing that refers to night work; then the order in question is illegal because it is

not authorized by law. "In the absence - stress lawyers recurring - legislation Authorizing the
payment of additional compensation for work done at night, the Court of Industrial Relations has no
power or authority to order the petitioner company to pay additional compensation for work done by
ITS laborers at night. Expressio unius . Where, as inthe case at bar, EXPRESSLY statute specifies
the cases Where payment of additional compensation May be Demanded, additional compensation
be allowed in May Those cases only, and in no others. The Provisions of the Commonwealth Act No.
444 can not be enlarged by implication or otherwise.Expressum facit cessare tacitum .
The argument is erroneous. Law No. 444 is not applicable to this case, it is evident that it has a
specific purpose, namely: (a) fix the maximum 8-hour working day; (B) identify certain exceptional
cases you can authorize work outside the working day; (C) provide a bonus, which should not be
less than 25% of regular salary for the "overtime" or work in excess of 8 hours.
In the case of Manila Electric, applicant-appellant against Utities The Public Employees'
Association, 2 appeal, L-1206 (45 Off. Gaz., 1760), this Court has held that the power conferred by
Article 1 of the law Commonwealth No. 103 the Industrial Relations Court to decide enjuciar and
industrial disputes and disputes between capital and labor, including that of setting wages and
compnsaciones of employees and workers, has been restricted by Article 4 of Law No
Commonwealth . 444, at the same time limited to 25% of salary or regular compensation of workers
the minimum additional relief that the court may grant for work on Sundays and public holidays,
exempted from the payment of such additional compensation to entities public utility providing a
public service, such as supplying gas, electricity, mortriz power, water, or provide transportation or
communication skills. Such restriction becomes an exception to the general power of the court to fix,
in cases of dispute, wages and compensation to be paid by employers to employees and
workers; and inasmuch as that Article 4 relates only to salary or compensation for work during the
day Sunday and public holidays, it obviously can not refer to additional salary or compensation for
work beyond eight hours lajornada are generally made from first hours of the morning to late in the
evening, it is one thing to work on days Sunday and public holidays, and quite another night of work
is outside the eight-hour working days. Applying the legal maximum " expressio unius , "it can be
sustained without fear of being wrong, that a law provides an exception to the general provisions
specified as additional compensation for work days Sunday and public holidays, excluding any
another, as additional compensation for work at night on weekdays. "Another case in Which May
esta maxim almost invariably Followed by statute Which Is That Makes Certain of specific
exceptions to STI General provisions. Here wemay safely assume all other exceptions That Were
Intended to be excluded. "(Wabash R. Co.vs. United States, 178 Fed 5, 101 CCA 133;. Cella
Commision Co. vs. Bohlinger, Fed 147, 419,. 78 CCA 467; Kunkalman vs. Gibson, Ind 171, 503.; 84
NE 985; Hering vs. Clement App Div 133, 293,.. 117 NY 747 Supp.).
Work denoche the Shell company requires its workers tally is not a 'overtime "in the sense that this
word is used in the Le No. 444, but a day full of work, also of 8 hours: only that, rather than done in a
day, it gets dark. In other words, night work here is not only unexceso, prolongation or "overtime"
regular work day, but that is another kind of work, absolutely independent of the day shift. So there
are two shifts: the shift workers who work day; and the turn of those who work at night. So it is not
strange that the legislature did not include this type of work between cases of "overtime" indicated in
the aforementioned law No. 444.
The question, in our view, must be determined is whether among the general powers of the Court of
Industrial Relations who are admitted without dipusta, this time considering the night as a day full of
work; of estimating it asmore burdensome than day by day; and consequently, that of providing and
order remunerated with 50% more than regular wages daytime. Our answer is yes: this is between
the general powers of the Court of Industrial Relations. If the court has, in cases of dispute, the
power to set wages it deems fair and reasonable for the work day, there is no reason why it must not

have the same power over wages night; so work is the one and the other. And as appreciation wing
that night work is heavier and cumbersome than the day and therefore deserve higher pay, there is
no motivospara revoke or alter. There is no possible argument against universal fact that regular,
normal, ordinary work is the day, and night work is very exceptional and justified only by certain
unavoidable imperative reasons. For something humanity has trabajadosiempre of day.
Reasons of hygiene, medicine, morality, culture, sociology, establish together the work of Nocho has
many drawbacks, as there is no choice but to do so is only fair to remunerated better than usual to
compensate certain hasa the workers' point of such drawbacks. Undoubtedly night work not only in
the long run affects the health of workers, but this deprives him of certain things that make relatively
pleasant life, like, viz., A full and uninterrupted rest and some moments of solace , entertainment or
spiritual and cultural expansion that could have after work in the evening and during the first hours of
the night. It is said that the workers can rest during the day after working all night; but perhaps you
can give the rest of the body one day and one full restorative tonic effect that can only provide the
natural sleep at night? It is said also that some prefer to work at night under our scorching weather,
thus avoiding the heat of the day. We fear, however, that this is better spoken than praticado. We
believe that from time immemorial the universal rule is that man trabja night irremediable more by
necessity than pleasant convenience.
A vulgar, universal opinion, we must add the opinionpericial, the specialist criterion. The opinion of
writers and experts strongly militates in favor of the theory that night work is harder and onerous
work that day, considered for this with strong disgust and consequently compelling the capitalistic
managers to establish a higher level of wages as an incentive for workers to accept it . Virias
authorities could be cited, but not to overextend this paper we choose transcriber only a few, namely:
. . . Then, It Must Be Remembered That it is distinctly unphysiological to turn the night into
day and deprive the body of the beneficial effects of sunshine. The human organism Revolts
Against esta procedure. Added to artificial lighting are reversed and unnatural times of
eating, resting, and sleeping. Much of the inferiority of Nightwork can doubtless be traced to
the failure of the workers to secure proper rest and sleep, by day.Because of the inability or
lack of opportunity to sleep, nightworkers Their Often spend days in performing domestic
duties, joining the family in the midday meal, 'tinkering about the place', watching the
baseball game, attending the theater or taking a ride in the car. It is not strange nightworkers
That Tend to be less efficient than dayworkers and lose more time. . . (The Management of
Labor Relations, by Watkins & Dodd, page 524).
Nightwork. - Nightwork've Gained a measure of prominence in the modern industry system in
Connection with continuous industries, That Is, Which industries in the nature of the
Processes Makes it Necessary to keep machinery and equipment in constant
operation. Even in continuous industries the tendency is definitely in the direction of Four
shifts of 6 hours each, with provision for an automatic change of shift for all workers Stated at
intervals. Some discussion has taken place with regard to the lengths of the period Should
any workers be allowed to REMAIN on the night shift. A weekly change of shifts is common,
specially Where three or four shifts are in operation; in other cases the change is made
fortnightly or monthly; in still other instances, no alternation is provided for, the remaining
workers on day - Nightwork or permanently, except Where temporary Changes are made
individually for convenience.
There is sharp difference of opinion Concerning the relative Merits of These
systems. Advocates of the change of shifts weekly contend That the strain of Nightwork and
the difficulty of getting adequate sleep during the day make it unwise for workers to REMAIN
on the "graveyard" shift for more than a week at a time.Opponents urged Repeated Changes

That make it more difficult to settle down to Either That kind of shift and after the first week
Nightwork Becomes less while trying to sleep the Ability Increases by day. Workers
Themselves react in various ways to the different systems. This much, however, Is Certain:
Few persons react favorably to Nightwork, Whether the shift be continuous or
alternating. Outside of continuous industries, Nightwork can scarcely be justified, and, even
in These, it presents serious Disadvantages Which Must Be Recognized in planing for
Industrial efficiency, stabilization of the working force, the promotion of industry good-will,
and the conservation of the health and vitality of the workers.
Nightwork Can not Be Regarded as desirable, Either from the point of view of the employer
or of the wage earner. It is uneconomical UNLESS overhead costs are unusually
heavy. Frequently the scale of wages is higher as an inducement to employees to accept
employment on the night shift, and the rate of production is Generally lower. (Management of
Labor Relations, by Watkins & Dodd, pp 522-524;. Emphasis ours.)
. . . The lack of sunlight Tends to produce anemia and tuberculosis and to predispose to
other ills. Nightwork Brings Increased liability to eyestrain and accident. Serious moral
dangers are there also likely to result from the necessity of traveling the streets alone at
night, and from the interference With ordinary home life. From an economic point of view,,
Moreover, the investigations Showed That Nightwork was unprofitable, Being lower to day
work Both in quality and in quantity. Wherever it HAD Been abolished, in the long run Both
the efficiency of the management and of the workers was raised. Furthermore, it was found
Nightwork That laws are a valuable aid in enforcing acts fixing the maximum period of
employment. (Principles of Labor Legislation, by Commons and Andrews, 4th Revised
Edition, p. 142.)
Special regulation of Nightwork for adult men is a comparatively recent development. Some
European Countries Have Placing special laws ADOPTED Limitations on hours of Nightwork
for men, and others prohibit Such work except in Processes continuous. (Principles of Labor
Legislation, 4th Revised Edition by Common & Andrews, p. 147.)
Nightwork have almost invariably Been With disfavor Looked upon by students of the
problem Because of the excessive strain Involved, Especially for women and young persons,
the large amount of lost time consequent upon exhaustion of the workers, and the additional
strain upon the executive staff Responsibility , the tendency of excessively fatigued workers
to "keep going" on artificial stimulants, the overall curtailment of time for rest, leisure, and
culture improvement, and the fact That night workers, to an extent, Although precluded from
the day activities of life, do Attempt to enter into These activities, with resultant impairment of
physical well-being. It is not contended, of course, Nightwork That Could be abolished in the
continuous-process industries, but it is possible to put Such industries upon a Three- or fourshifts basis, and to prohibit Nightwork for women and children. (Labor's Progress and
Problems, Vol. I, p. 464, by Professors Millis and Montgomery.)
Nightwork. - Civilized peoples are beginning to Recognize That the fact except in cases of
necessity or in periods of great emergency, Nightwork is socially undesirable. Under our
modern industry system, however, has Nightwork Greatly aided the production of
commodities, and have Offered a significant method of cutting down the ever-Increasing
overhead costs of industry. This result has led to believe That Employers Such work is
Necessary and profitable. Here again one meets a conflict of economic and social
interests. Under These Circumstances it is Necessary to discover Whether Nightwork has
deleterious effects upon the health of laborers and Tends to reduce the ultimate supply of
efficient work. If it can adversely PROVED That Nightwork Affects Both the quality and

quantity of productive labor, ITS discontinuance will undoubtedly be sanctioned by

Employers. From a social point of view, even to Relatively high degree of efficiency in night
operations must be forfeited if it is Purchased With rapid exhaustion of the health and energy
of the workers.From an economic point of view, Nightwork May be Necessary if the employer
is to meet the demand for His product, or if I have is to Maintain his market in the face of
mounting Variable Increasing competition or production costs.
Industrial experience has shown That the possession of extra-ordinary physical strength and
self-monitoring Facilitates the reversal of the ordinary routine of work day and night rest, with
the little or no unfavorable effect on health and efficiency. Unusual vitality and selfmonitoring, however, are not common possessions.That it has-been found The most serious
obstacle to a reversal of the routine is the lack of self-discipline.Many night workers
Numerous enter into the activities of sleep PRECLUDE That day life, and continue to Attempt
to do Their Work at night. Evidence Gathered by the British Health of Munition Workers'
Committee places permanent night workers, Whether Judged on the basis of output or loss
of time, in a very unfavorable positions as Compared With day workers.
Systems of Nightwork Differ. There is the continuous system, in Which employees work by
night and do not Attend the establishment at all by day, and the discontinuous system, in
Which the workers change to turn the day at regular intervals, Usually every other
week. There are, of course, minor variations In These systems, Depending upon the nature
of the industry and the wishes of management. Such bodies as the British Health Munition
Workers' Committee Have Given us valuable conclusions Concerning the effect of
Nightwork.Continuous Nightwork is definitely less productive than the discontinuous
system. The output of the continuous day shift does not make up for esta loss in production.
There is,, Moreover, a marked difference Between the rates of output of night and day shifts
on the discontinuous plan. Investigated In each case the inferiority of night work was
definitely established. This inferiority is evidently the result of the night worker's failure to
secure proper Amounts of sleep and rest during the day. The system of continuous shifts,
Especially for women, is Investigators Regarded by all as undesirable. Women on
continuous Nightwork are likely to perform domestic duties, and added strain esta
undoubtedly accounts for the Poorer results of Industrial Their activities. The tendency to
devote to amusement and other things The Time That Should be spent in rest and sleep is
as common Certainly Among Men Among women as workers and accounts Largely for the
loss of efficiency and time on the part of Both Sexes in Nightwork.
The Case Against Nightwork, then a, May be Said to rest upon several grounds. In the first
place, there are the injurious effects of permanent remotely Nightwork Manifested in the later
years of the worker's life.Importance Of more immediate to the average worker is the
disarrangement of His social life, Including the recreational activities of His leisure hours and
the ordinary associations of regular family relations. From an economic point of view,
Nightwork is to be discouraged Because of Its adverse effect upon efficiency and
output. Nightwork Against A moral argument in the case of women Is That the night shift
forces the workers to go to and from the factory in darkness. Recent experiences of nations
unavailable Industrial added much to the Evidence Against the continuation of Nightwork,
except in extraordinary and unavoidable emergencies Circumstances. The immediate
prohibition of Nightwork for all laborers is hardly practicable; ITS discontinuance in the case
of women employees is unquestionably desirable. 'The night was made for rest and sleep
and not for work' is a common saying Among wage-earning people, and many of them
dream of an order in Which industry there will be no night shift. (Labor Problems, 3rd Edition,
pp. 325-328, by Watkins & Dodd.).

In merits of the above, the appeal is denied certiorari filed and the Court of Industrial Reclaciones
confirmed, with costs of a recurring charge. So it is ordered.
G.R. No. L-12075

May 29, 1959

NATIONAL RICE AND CORN CORPORATION (NARIC), petitioner,

vs.
NARIC WORKERS UNION, ET AL., respondents.
Zosimo Q. Pizarro for for petitioner.
Vicente T. Ocampo for respondent NARIC Worker's Union.
Edilberto J. Pangan fo respondent CIR.
BAUTISTA ANGELO, J.:
In Case No. 746-V of the Court of Industrial Relations, entitled NARIC Workers Union vs. National
Rice and Corn Corporation, the industrial court promulgated a decision dated February 15, 1956
directing that the corporation pay to its workers 25 per cent additional compensation for night work
rendered by them.
On May 21, 1956, upon motion of the union, the industrial court issued an order directing its chief
examiner, or any of his assistants, to compute the additional compensation for night work granted in
the decision covering the period from October 3, 1952 to February 16, 1953. The chief examiner
acted as directed and submitted his report to the court on August 7, 1956. The report shows that
there are 163 workers and employees of the corporation who have rendered night work from
October 3, 1952, to February 16, 1953 and the 25 per cent additional compensation of said workers
and employees computed on the basis of their respective monthly salaries amounted to P5,221.84.
On September 24, 1956, the union filed with the court a petition for execution of the decision praying
that the corporation be ordered to deposit with the court the said sum of P5,221.84. On September
27, 1956, the corporation filed its opposition contending that said motion is premature because the
report of the examiner has not yet been passed upon and approved by the court and therefore is not
yet final.
The motion, as well as the opposition, were set for hearing, during which the chief examiner was
called upon to explain his report. He stated that in making his report he considered any all work
performed between 6:00 o'clock in the afternoon and 6:00 o'clock in the morning as "night work" and
accordingly has awarded each employee or worker an additional compensation of 25 per cent for
"night work". He further stated that if a particular employee worked from 8:00 o'clock in the morning
to 5:00 o'clock in the afternoon and then rendered overtime service from 5:00 o'clock in the
afternoon of the same day to 7:00 o'clock in the evening of the same day, he considered the work
from 5:00 to 6:00 p.m. as overtime work and entitled to 25 per cent additional compensation as
overtime work, and the same work from 6:00 to 7:00 p.m. as both overtime work and night work and
therefore entitled to 25 per cent additional compensation as overtime work and another 25 per cent
additional compensation as night work.
Notwithstanding the opposition of the corporation to the report of the chief examiner as explained by
him, the industrial court issued an order on December 28, 1956 approving the same and ordering
the corporation to deposit with said court the amount of P5,221.84 within five days from receipt of
the order. On January 3, 1957, the corporation filed a motion for reconsideration praying that a
recomputation of the additional compensation due the employees be ordered, but the Court of
Industrial Relations en banc issued a resolution on February 13, 1957 stating that it finds no

sufficient justification for altering or modifying its previous order, Hence the present petition for
review.
The main issue raised by the corporation is: "Should the employee performing his regular eight
hours work during the daytime from 8:00 o'clock in the morning to 12:00 o'clock at noon and from
1:00 o'clock to 5:00 o'clock in the afternoon . . . be paid for his services from 5:00 o'clock to 9:00 in
the afternoon as "overtime work" and at the same time be paid from 6:00 o'clock to 9:00 o'clock in
the evening as night work?"
The respondent court, in issuing its order of December 28, 1956, as well as its resolution en
banc dated February 13, 1957, has in effect held that "night work" is any and all work rendered
between 6:00 o'clock in the afternoon and 6:00 o'clock in the morning, and consequently, if a certain
employee performs his regular eight hours up to 5:00 o'clock in the afternoon and renders overtime
from 5:00 p.m. to 9:00 p.m. of the same day, the said employee is entitled to an additional
compensation for overtime services from 5:00 p.m. to 9:00 p.m. and at the same time to additional
compensation for "night work" from 6:00 p.m. to 9:00 p.m. for the very same work. In other words,
respondent court upheld the manner of computation made by its chief examiner in implementing its
decision rendered on February 15, 1956. This interpretation of the term "night work" is, according to
the corporation, erroneous for it runs counter to the definition given to said term by this Court
in Shell Company of the Philippines vs. National Labor Union, 81 Phil., 315; 46 Off. Gaz., 97.
Thus, in said case, the following comment was made: "The night work which the Shell Company
demands of its laborers is not merely an overtime work in the sense in which this word is issued in
Act No. 444, but it is in reality a complete working day also of eight hours, only that, instead of its
being done at daytime, it is performed at night. In other words, the night work referred to here is not
an excess, extension or overtime of the regular work during the day time, but it is rather another kind
of work absolutely independent of the work being done during the day. For this reason, there are two
shifts: the shift of laborers who work during the day and the shift of those who work at night."
(Translated into English)
While it is true that this Court made the above comment in the aforementioned case, it does not
intend to convey the idea that work done at night cannot also be an overtime work. The comment
only served to emphasize that the demand which the Shell company made upon its laborers is not
merely an overtime work but night work and so there was need to differentiate night work from
daytime work. In fact, the company contended that there was no law that required the payment of
additional compensation for night work unlike an overtime work which is covered by Commonwealth
Act No. 444 (Eight Hour Labor Law). And this Court in that case said that while there was no law
actually requiring payment of additional compensation for night work, the industrial court has the
power to determine the wages that night workers should receive under Commonwealth Act No. 103,
and so it justified the additional compensation given to night workers by the industrial court in the
Shell case for "hygienic, medical, moral, cultural and sociological reasons." That case therefore
cannot be invoked as an authority for concluding that one who does night work cannot be paid
additional compensation for the same work as overtime. One is paid for his work done during the
night and the other is paid because it is excess of the regular eight-hour work may be legally
required to do. One is done for reasons of health and the other because of an express mandate of
the law (Commonwealth Act No. 444). We find therefore correct the computation made by the chief
examiner as affirmed by the industrial court.
The logic of this conclusion may be better seen by an example. Let us suppose that the workers of
an industrial company work in three shifts: one from 8:00 o'clock a.m. to 4:00 o'clock p.m.; another
from 4:00 o'clock p.m. to 12:00 o'clock p.m.; and still another from 12:00 o'clock p.m. to 8:00 o'clock
a.m. Supposing that night work begins from 6:00 o'clock p.m. and ends at 6:00 o'clock a.m. (Article

13, New Civil Code.) Under the law and jurisprudence, the first shift workers will have to be paid a
compensation as day workers; the second shift workers will have to be partly as day workers and
partly as night workers; and the third workers will have to be partly paid as night workers and partly
as day workers.
Supposing again that the second shift workers, for some justifiable reasons, are required to extend
their work from 12:00 o'clock p.m. to 2:00 o'clock a.m. Under the law, they are entitled to additional
compensation for overtime work on the basis of their wages as night workers. If the first shift workers
were required to extend their work up to 8:00 o'clock p.m., is it not fair and logical that for the two
hours they work at night (6:00 to 8:00) they also be paid an overtime compensation on the basis of
wages paid for night workers? This is the only logical conclusion based on our ruling in the Shell
case which requires payment of additional compensation for night work. In other words, work done
at night should be paid more than work done by the chief examiner. Respondent court is thereworkers regular hour of duty, he should also be paid additional compensation for overtime work. This
is what was done by the chief examiner. Respondent court is therefore justified in affirming his
report.
Wherefore, the order and resolution appealed from are affirmed, with costs against petitioner.

G.R. No. L-30452 September 30, 1982

MERCURY DRUG CO., INC., petitioner,
vs.
NARDO DAYAO, ET AL., respondents,
Caparas & Ilagan for petitioner.
Gerardo P. Cabo Chan and Elias Banzali for respondents.

GUTIERREZ, JR., J.:

This is a petition for review on certiorari of the decision of the Court of Industrial Relations dated
March 30, 1968 in Case No. 1926-V and the Resolution of the Court en banc dated July 6, 1968
denying two separate motions for reconsideration filed by petitioners and respondents.
The factual background of Case No. 1926-V is summarized by the respondent Court of Industrial
Relations as follows:
This is a verified petition dated March 17, 1964 which was subsequently amended on
July 31, 1964 filed by Nardo Dayao and 70 others against Mercury Drug Co., Inc.,
and/or Mariano Que, President & General Manager, and Mercury Drug Co., Inc.,
Employees Association praying, with respect to respondent corporation and its
president and general manager: 1) payment of their unpaid back wages for work
done on Sundays and legal holidays plus 25c/c additional compensation from date of
their employment up to June 30, 1962; 2) payment of extra compensation on work
done at night; 3) reinstatement of Januario Referente and Oscar Echalar to their
former positions with back salaries; and, as against the respondent union, for its
disestablishment and the refund of all monies it had collected from petitioners.

In separate motions, respondent management and respondent union move to

dismiss, the first on the ground that:
I. The petition states no cause of action.
II. This Court has no jurisdiction over the subject of the claims of petitioners Januario
Referente and Oscar Echalar.
III. There is another action pending between the same parties, namely, Mercury Drug
Co., Inc., and/or Mariano Que and Nardo Dayao.
while on the other hand, the second alleges that this Court has no jurisdiction over the acts
complained of against the respondent union.
For reasons stated in the Order dated March 24, 1965, two Court resolved the
motions to dismiss, as follows:
1. Ground No. 1 of management's motion to dismiss was denied for lack of merit.
2. Its second ground was found meritorious and, accordingly Januario Referente and
Oscar Echalar were dropped as party petitioners in this case.
3. The third ground was denied, holding that there still exists the employer- employee
relationship between Nardo Dayao and the management.
4. With respect to the fourth ground, the Court held that on the basis of section 7-A of
C.A. No. 444, as amended by R.A. No. 1993, 'it can be safely said that,
counting backward the three (3) year prescriptive period from the date of the filing of
the instant petition - March 20, 1964 - all-of petitioners' claims have not yet
prescribed.'
5. In so far as respondent union's motion is concerned, the Court held that
'petitioners' cause of action against the respondent Association should be dismissed
without prejudice to the refiling of the same as an unfair labor practice case.'
Only the respondent management moved to reconsider the Order of March 24, 1965
but the same was denied by the Court en banc in a resolution dated August 26,
1965. Respondent submitted an answer to the amended petition which was
subsequently amended on January 6, 1966, containing some admissions and some
denials of the material averments of the amended petition. By way of affirmative and
special defenses,, respondents alleged that petitioners have no cause of action
against Mariano Que because their employer respondent Mercury Drug Company,
Inc., an existing corporation which has a separate and distinct personality from its
incorporators stockholders and/or officer, that the company being a service
enterprise is excluded from the coverage of the Eight Hour Labor Law, as amended;
that no court has the power to set wages, rates of pay, hours of employment, or other
conditions of employment to the extent of disregarding an agreement thereon
between the respondent company and the petitioners, and of fixing night differential
wages; that the petitioners were fully paid for services rendered under the terms and
conditions of the individual contracts of employment; that the petition having been

verified by only three of the petitioners without showing that the others authorized the
inclusion of their names as petitioners does not confer jurisdiction to this Court; that
there is no employer-employee relationship between management and petitioner
Nardo Dayao and that his claim has been released and/or barred by another action
and that petitioners' claims accuring before March 20, 1961 have prescribed." (Annex
"P", pp. 110-112, rollo).
After hearing on the merits, the respondent court rendered its decision. The dispositive portion of the
March 30, 1968 decision reads:
IN VIEW OF THE FOREGOING, the Court hereby resolves that:
1. The claim of the petitioners for payment of back wages correspoding to the first
four hours work rendered on every other Sunday and first four hours on legal
holidays should be denied for lack of merit.
2. Respondent Mercury Drug Company, Inc.. is hereby ordered to pay the sixty- nine
(69) petitioners:
(a) An additional sum equivalent to 25% of their respective basic or
regular salaries for services rendered on Sundays and legal holidays
during the period from March 20. 1961 up to June 30, 1962; and
(b) Another additional sum or premium equivalent to 25% of their
respective basic or regular salaries for nighttime services rendered
from March 20, 1961 up to June 30, 1962.
3. Petitioners' petition to convert them to monthly employees should be, as it is
hereby, denied for lack of merit.
4. Respondent Mariano Que, being an officer and acted only as an agent in behalf of
the respondent corporation, should be absolved from the money claims of herein
petitioners whose employer, according to the pleadings and evidence, is the Mercury
Drug Company,, Inc.
To expedite the computation of the money award, the Chief Court Examiner or his
authorized representative is hereby directed to proceed to the office of the
respondent corporation at Bambang Street, Sta. Cruz, Manila, the latter to make
available to said employee its records, like time records, payrolls and other pertinent
papers, and compute the money claims awarded in this decision and, upon the
completion thereof, to submit his report as soon as possible for further disposition of
the Court.
Not satisfied with the decision, the respondents filed a motion for its reconsideration. The motion for
reconsideration, was however, denied by the Court en banc in its Resolution dated July 6, 1968.
Petitioner Mercury Drug Company, Inc., assigned the following errors in this petition:
I

RESPONDENT CIR ERRED IN DECLARING THE CONTRACTS OF

EMPLOYMENT, EXHIBITS "A" AND "B", NULL AND VOID AS BEING CONTRARY
TO PUBLIC POLICY AND IN SUSTAINING, ACCORDINGLY, PRIVATE
RESPONDENTS' CLAIMS FOR 25% SUNDAY AND LEGAL HOLIDAY PREMIUMS
BECAUSE SUCH DECLARATION AND AWARD ARE NOT SUPPORTED BY
SUBSTANTIAL EVIDENCE, THUS INFRINGING UPON THE CARDINAL RIGHTS
OF THE PETITIONER; AND ALSO BECAUSE THE VALIDITY OF SAID t
CONTRACTS OF EMPLOYMENT HAS NOT BEEN RAISED.
II
RESPONDENT CIR ERRED IN SUSTAINING PRIVATE RESPONDENTS' CLAIMS
FOR NIGHTTIME WORK PREMIUMS NOT ONLY BECAUSE OF THE DECLARED
POLICY ON COLLECTIVE BARGAINING FREEDOM EX. PRESSED IN REPUBLIC
ACT 875 AND THE EXPRESS PROHIBITION IN SECTION 7 OF SAID STATUTE,
BUT ALSO BECAUSE OF THE WAIVER OF SAID CLAIMS AND THE TOTAL
ABSENCE OF EVIDENCE THEREON.
III
RESPONDENT CIR ERRED IN MAKING AWARDS IN FAVOR OF THE PRIVATE
RESPONDENTS WHO NEITHER GAVE EVIDENCE NOR EVEN APPEARED TO
SHOW THEIR INTEREST.
Three issues are discussed by the petitioner in its first assignment of error. The first issue refers to
its allegation that the respondent Court erred in declaring the contracts of employment null and void
and contrary to law. This allegation is premised upon the following finding of the respondent court:
But the Court finds merit in the claim for the payment of additional compensation for
work done on Sundays and holidays. While an employer may compel his employees
to perform service on such days, the law nevertheless imposes upon him the
obligation to pay his employees at least 25% additional of their basic or regular
salaries.
No person, firm or corporation, business establishment or place of
center of labor shall compel an employee or laborer to work during
Sundays and legal holidays unless he is paid an additional sum of at
least twenty-five per centum of his regular remuneration: PROVIDED,
HOWEVER, That this prohibition shall not apply to public utilities
performing some public service such as supplying gas, electricity,
power, water, or providing means of transportation or communication.
(Section 4, C. A. No. 444) (Emphasis supplied)
Although a service enterprise, respondent company's employees are within the
coverage of C. A. No. 444, as amended known as the Eight Hour Labor Law, for they
do not fall within the category or class of employees or laborers excluded from its
provisions. (Section 2, Ibid.)
The Court is not impressed by the argument that under the contracts of employment
the petitioners are not entitled to such claim for the reason that the same are contrary
to law. Payment of extra or additional pay for services rendered during Sundays and
legal holidays is mandated by law. Even assuming that the petitioners had agreed to

work on Sundays and legal holidays without any further consideration than their
monthly salaries, they are not barred nevertheless from claiming what is due them,
because such agreement is contrary to public policy and is declared nun and void by
law.
Any agreement or contract between employer and the laborer or employee contrary
to the provisions of this Act shall be null and void ab initio.
Under the cited statutory provision, the petitioners are justified to receive additional
amount equivalent to 25% of their respective basic or regular salaries for work done
on Sundays and legal holidays for the period from March 20, 1961 to June 30, 1962.
(Decision, pp. 119-120, rollo)
From a perusal of the foregoing statements of the respondent court, it can be seen readily that the
petitioner-company based its arguments in its first assignment of error on the wrong premise. The
contracts of employment signed by the private respondents are on a standard form, an example of
which is that of private respondent Nardo Dayao quoted hereunder:
Mercury Drug Co., Inc. 1580 Bambang, Manila
October 30, 1959
Mr. Nardo Dayao
1015 Sta. Catalina
Rizal Ave., Exten.
Dear Mr. Dayao:
You are hereby appointed as Checker, in the Checking Department of MERCURY
DRUG CO., INC., effective July 1, 1959 and you shall receive an annual
compensation the amount of Two Thousand four hundred pesos only (P2,400.00),
that includes the additional compensation for work on Sundays and legal holidays.
Your firm being a Service Enterprise, you will be required to perform work every day
in a year as follows:
8 Hours work on regular days and-all special Holidays that may be declared but with
the 25% additional compensation;
4 Hours work on every other Sundays of the month;
For any work performed in excess of the hours as above mentioned, you shall be paid 25 %
additional compensation per hour.
This appointment may be terminated without notice for cause and without cause upon thirty days
written notice.
This supersedes your appointment of July 1, 1959.
Very truly yours,
MERCURY DRUG CO., INC.

(Sgd.) MARIANO QUE General Manager

ACCEPTED WITH FULL CONFORMITY:
(Sgd.) NARDO DAYAO
(EXH. "A" and "l ")
(Decision, pp. 114-115, rollo)
These contracts were not declared by the respondent court null and void in their entirety. The
respondent court, on the basis of the conflicting evidence presented by the parties, in effect: 1)
rejected the theory of the petitioner company that the 25% additional compensation claimed by the
private respondents for the four-hour work they rendered during Sundays and legal holidays
provided in their contracts of employment were covered by the private respondents' respective
monthly salaries; 2) gave credence to private respondents', (Nardo Dayao, Ernesto Talampas and
Josias Federico) testimonies that the 25% additional compensation was not included in the private
respondents' respective monthly salaries and 3) ruled that any agreement in a contract of
employment which would exclude the 25% additional compensation for work done during Sundays
and holidays is null and void as mandated by law.
On the second issue, the petitioner-company reiterated its stand that under the,- respective
contracts of employment of the private respondents, the subject 25 % additional compensation had
already been included in the latter's respective monthly salaries. This contention is based on the
testimony of its lone witness, Mr. Jacinto Concepcion and pertinent exhibits. Thus:
Exhibit A shows that for the period of October 30, 1960, the annual compensation of
private respondent Nardo Dayao, including the additional compensation for the work
he renders during the first four (4) hours on every other Sunday and on the eight (8)
Legal Holidays at the time was P2,400.00 or P200.00 per month. These amounts did
not represent basic salary only, but they represented the basic daily wage of Nardo
Dayao considered to be in the amount of P7.36 x 305 ordinary working days at the
time or in the total amount of P2,144.80. So plus the amount of P156.40 which is the
equivalent of the Sunday and Legal Holiday rate at P9.20 basic rate of P7.36 plus
25% thereof or P1.84) x 17, the latter figure representing 13 Sundays and 4 Legal
Holidays of 8 hours each. ...
xxx xxx xxx
That the required minimum 25% Sunday and Legal Holiday additional compensation
was paid to and received by the employees for the work they rendered on every
other Sunday and on the eight Legal Holidays for the period October, 1959 to June
30, 1962 is further corroborated by Exhibits 5, 6, 8, 9 and 9-A and the testimony of
Mr. Jacinto Concepcion thereon. (Brief for the Petitioner, pp. 24, 27).
The aforesaid computations were not given credence by the respondent court. In fact the same
computations were not even mentioned in the court's decision which shows that the court found such
computations incredible. The computations, supposedly patterned after the WAS Interpretative
Bulletin No. 2 of the Department Labor demonstrated in Exhibits "6", "7", "8", "9", and "9-A",
miserably failed to show the exact and correct annual salary as stated in the respective contracts of
employment of the respondent employees. The figures arrived at in each case did not tally with the
annual salaries on to the employees' contracts of employment, the difference varying from P1.20 to
as much as P14.40 always against the interest of the employees. The petitioner's defense consists
of mathematical computations made after the filing of the case in order to explain a clear attempt to

make its employees work without the extra compensation provided by law on Sundays and legal
holidays.
In not giving weight to the evidence of the petitioner company, the respondent court sustained the
private respondents' evidence to the effect that their 25% additional compensation for work done on
Sundays and Legal Holidays were not included in their respective monthly salaries. The private
respondents presented evidence through the testimonies of Nardo Dayao, Ernesto Talampas, and
Josias Federico who are themselves among the employees who filed the case for unfair labor
practice in the respondent court and are private respondents herein. The petitioner- company's
contention that the respondent court's conclusion on the issue of the 25% additional compensation
for work done on Sundays and legal holidays during the first four hours that the private respondents
had to work under their respective contracts of employment was not supported by substantial
evidence is, therefore, unfounded. Much less do We find any grave abuse of discretion on the part of
the respondent court in its interpretation of the employment contract's provision on salaries. In view
of the controlling doctrine that a grave abuse of discretion must be shown in order to warrant our
disturbing the findings of the respondent court, the reversal of the court's endings on this matter is
unwarranted. (Sanchez vs. Court of Industrial Relations, 27 SCRA 490).
The last issue raised in the first assignment of error refers to a procedural matter. The petitionercompany contends that ,-the question as to whether or not the contracts of employment were null
and void was not put in issue, hence, the respondent court pursuant to the Rules of Court should
have refrained from ruling that such contracts of employment were null and void. In this connection
We restate our finding that the respondent court did not declare the contracts of employment null
and void in their entirety. Only the objectionable features violative of law were nullified. But even
granting that the Court of Industrial Relations declared the contracts of employment wholly void, it
could do so notwithstanding the procedural objection. In Sanchez u. Court of Industrial Relations,
supra, this Court speaking through then Justice, now Chief Justice Enrique M. Fernando, stated:
xxx xxx xxx
Moreover, petitioners appear to be oblivious of the statutory mandate that respondent
Court in the hearing, investigation and determination of any question or controversy
and in the exercise of any of its duties or power is to act 'according to justice and
equity and substantial merits of the case, without regard to technicalities or legal
forms and shall not be bound by any technical rules of legal evidence' informing its
mind 'in such manner as it may deem just and equitable.' Again, this Court has
invariably accorded the most hospitable scope to the breadth and amplitude with
which such provision is couched. So it has been from the earliest case decided in
1939 to a 1967 decision.
Two issues are raised in the second assignment of error by the petitioner-company.
The first hinges on the jurisdiction of the respondent court to award additional
compensation for nighttime work. Petitioner wants Us to re- examine Our rulings on
the question of nighttime work. It contends that the respondent court has no
jurisdiction to award additional compensation for nighttime work because of the
declared policy on freedom of collective bargaining expressed in Republic Act 875
and the express prohibition in Section 7 of the said statute. A re- examination of the
decisions on nighttime pay differential was the focus of attention in Rheem of the
Philippines, Inc. et al., v. Ferrer, et al (19 SCRA 130). The earliest cases cited by the
petitioner-company, Naric v. Naric Workers Union L-12075, - May 29, 1959 and
Philippine Engineers' Syndicate u. Bautista, L-16440, February 29, 196.4, were
discussed lengthily. Thus -

xxx xxx xxx

2. On the claim for night differentials, no extended discussion is necessary. To be
read as controlling here is Philippine Engineers' Syndicate, Inc. vs. Hon. Jose S.
Bautista, et al., L-16440, February 29, 1964, where this Court, speaking thru Mr.
Chief Justice Cesar Bengzon, declared
Only one issue is raised: whether or not upon the enactment of
Republic Act 875, the CIR lost its jurisdiction over claims for
additional compensation for regular night work. Petitioner says that
this Act reduced the jurisdiction of respondent court and limited it to
specific cases which this Court has defined as: ... (1) when the labor
dispute affects an industry which is indispensable to the national
interest and is so certified by the President to the industrial court
(Sec. 10, Republic Act 875); (2) when the controversy refers to
minimum wage under the Minimum Wage Law (Republic Act 602); (3)
when it involves hours of employment under the Eight-Hour Labor
Law (Commonwealth Act 444) and (4) when it involves an unfair labor
practice [Sec. 5(a), Republic Act 8751', [Paflu, et al. vs. Tan, et al., 52
Off. Gaz, No. 13, 5836].
Petitioner insists that respondents' case falls in none of these
categories because as held in two previous cases, night work is not
overtime but regular work; and that respondent court's authority to try
the case cannot be implied from its general jurisdiction and broad
powers' under Commonwealth Act 103 because Republic Act 875
precisely curbed such powers limiting them to certain specific
litigations, beyond which it is not permitted to act.
We believe petitioner to be in error. Its position collides with our ruling in the Naric
case [National Rice & Corn Corp. (NARIC) vs. NARIC Workers' Union, et al., G.R.
No. L-12075, May 29, 1959] where we held;
While it is true that this Court made the above comment in the
aforementioned case, it does not intend to convey the Idea that work
done at night cannot also be an overtime work. The comment only
served to emphasize that the demand which the Shell Company
made upon its laborers is not merely overtime work but night work
and so there was need to differentiate night work from daytime work.
In fact, the company contended that there was no law that required
the payment of additional compensation for night work unlike an
overtime work which is covered by Commonwealth Act No. 444 (Eight
Hour Labor Law). And this Court in that case said that while there
was no law actually requiring payment of additional compensation for
night work, the industrial court has the power to determine the wages
that night workers should receive under Commonwealth Act No. 103,
and so it justified the additional compensation in the Shell case for
'hygienic, medical, moral, cultural and sociological reasons.
xxx xxx xxx

True, in Paflu, et al. vs. Tan, et al., supra, and in a series of cases thereafter, We held that the broad
powers conferred by Commonwealth Act 103 on the CIR may have been curtailed by Republic Act
875 which limited them to the four categories therein expressed in line with the public policy of
allowing settlement of industrial disputes via the collective bargaining process; but We find no cogent
reason for concluding that a suit of this nature for extra compensation for night work falls outside the
domain of the industrial court. Withal, the record does not show that the employer-employee relation
between the 64 respondents and the petitioner had ceased.
After the passage of Republic Act 875, this Court has not only upheld the industrial court's
assumption of jurisdiction over cases for salary differentials and overtime pay [Chua Workers Union
(NLU) vs. City Automotive Co., et al., G.R. No. L- 11655, April 29, 1959; Prisco vs. CIR, et al., G.R.
No. L-13806, May 23, 1960] or for payment of additional compensation for work rendered on
Sundays and holidays and for night work [Nassco vs. Almin, et al., G.R. No. L9055, November 28,
1958; Detective & Protective Bureau, Inc. vs. Felipe Guevara, et al., G.R. No. L-8738, May 31, 1957]
but has also supported such court's ruling that work performed at night should be paid more than
work done at daytime, and that if that work is done beyond the worker's regular hours of duty, he
should also be paid additional compensation for overtime work. [Naric vs. Naric Workers' Union. et
al., G. R No. L-12075, May 29, 1959, citing Shell Co. vs. National Labor Union, 81 Phil. 315].
Besides, to hold that this case for extra compensation now falls beyond the powers of the industrial
court to decide, would amount to a further curtailment of the jurisdiction of said court to an extent
which may defeat the purpose of the Magna Carta to the prejudice of labor.' [Luis Recato Dy, et al v9. CIR, G.R. No. L-17788, May 25,1962]"
The petitioner-company's arguments on the respondent court's alleged lack of jurisdiction over
additional compensation for work done at night by the respondents is without merit.
The other issue raised in the second assignment of error is premised on the petitioner-company's
contention that the respondent court's ruling on the additional compensation for nighttime work is not
supported by substantial evidence.
This contention is untenable. Pertinent portions of the respondent court's decision read:
xxx xxx xxx
There is no serious disagreement between the petitioners and respondent
management on the facts recited above. The variance in the evidence is only with
respect to the money claims. Witnesses for petitioners declared they worked on
regular days and on every other Sunday and also during all holidays; that for
services rendered on Sundays and holidays they were not paid for the first four (4)
hours and what they only received was the overtime compensation corresponding to
the number of hours after or in excess of the first four hours; and that such payment
is being indicated in the overtime pay for work done in excess of eight hours on
regular working days. It is also claimed that their nighttime services could well be
seen on their respective daily time records. .. (Emphasis supplied) (p.116, rollo)
The respondent court's ruling on additional compensation for work done at night is, therefore, not
without evidence. Moreover, the petitioner-company did not deny that the private respondents
rendered nighttime work. In fact, no additional evidence was necessary to prove that the private
respondents were entitled to additional compensation for whether or not they were entitled to the
same is a question of law which the respondent court answered correctly. The "waiver rule" is not
applicable in the case at bar. Additional compensation for nighttime work is founded on public policy,
hence the same cannot be waived. (Article 6, Civil Code). On this matter, We believe that the

respondent court acted according to justice and equity and the substantial merits of the case, without
regard to technicalities or legal forms and should be sustained.
The third assignment of error is likewise without merit. The fact that only three of the private
respondents testified in court does not adversely affect the interests of the other respondents in the
case. The ruling in Dimayuga V. Court of Industrial Relations (G.R. No. L-0213, May 27, 1957) has
been abandoned in later rulings of this Court. In Philippine Land Air-Sea Labor Union (PLASLU) vs.
Sy Indong Company Rice And Corn Mill (11 SCRA 277) We had occasion to re-examine the ruling
in Dimayuga We stated:
The latter reversed the decision of the trial Judge as regards the reinstatement with
backwages of ... upon the theory that this is not a class suit; that, consequently, it is
necessary and imperative that they should personally testify and prove the charges
in the complaint', and that, having failed to do so, the decision of the trial Judge in
their favor is untenable under the rule laid down in Dimayuga vs. Court of Industrial
Relations, G.R. No. L-0213 (May 27,1957).
We do not share the view taken in the resolution appealed from. As the trial Judge
correctly said, in Ms dissent from said resolution,:
xxx xxx xxx
In the case of Sanchez v. Court of Industrial Relations, supra, this Court stated:
To the reproach against the challenged order in the brief of petitioners in view of only
two of the seven claimants testifying, a statement by this Court in Ormoc Sugar Co.,
Inc. vs. OSCO Workers Fraternity Labor Union would suffice by way of refutation.
Thus: "This Court fully agrees with the respondent that quality and not quantity of
witnesses should be the primordial consideration in the appraisal of evidence.' Barely
eight days later, in another decision, the above statement was given concrete
expression. Thus: 'The bases of the awards were not only the respective affidavits of
the claimants but the testimonies of 24 witnesses (because 6 were not given
credence by the court below) who Identified the said 239 claimants. The contention
of petitions on this point is therefore unfounded Moveover inPhilippine Land-Air-Sea
Labor Union (PLASLU) v. Sy Indong company Rice & Corn Mill, this Court, through
the present Chief Justice rejected as untenable the theory of the Court of Industrial
Relations concerning the imperative needs of all the claimants to testify personality
and prove their charges in the complaint. As tersely put: 'We do not share the view
taken in the resolution appealed from.
The petitioner's contention that its employees fully understood what they signed when they entered
into the contracts of employment and that they should be bound by their voluntary commitments is
anachronistic in this time and age.
The Mercury Drug Co., Inc., maintains a chain of drugstores that are open every day of the week
and, for some stores, up to very late at night because of the nature of the pharmaceutical retail
business. The respondents knew that they had to work Sundays and holidays and at night, not as
exceptions to the rule but as part of the regular course of employment. Presented with contracts
setting their compensation on an annual basis with an express waiver of extra compensation for
work on Sundays and holidays, the workers did not have much choice. The private respondents
were at a disadvantage insofar as the contractual relationship was concerned. Workers in our
country do not have the luxury or freedom of declining job openings or filing resignations even when

some terms and conditions of employment are not only onerous and inequitous but illegal. It is
precisely because of this situation that the framers of the Constitution embodied the provisions on
social justice (Section 6, Article 11) and protection to labor (Section 9, Article I I) in the Declaration of
Principles And State Policies.
It is pursuant to these constitutional mandates that the courts are ever vigilant to protect the rights of
workers who are placed in contractually disadvantageous positions and who sign waivers or
provisions contrary to law and public policy.
WHEREFORE, the petition is hereby dismissed. The decision and resolution appealed from are
affirmed with costs against the petitioner.
SO ORDERED.
G.R. No. 88795 October 4, 1994
SEABORNE CARRIERS CORPORATION and JERRY RONALDO GATAN, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and ARMANDO A. TERNIDA, respondents.
Atienza, Tabora, Del Rosario & Castillo for petitioners.
Julio F. Andress, Jr. for private respondent.

ROMERO, J.:
The private respondent began working for Seaborne Carriers Corporation (Seaborne) on April 8,
1983 as Tug Master with a monthly salary of P2,475.00. On September 15, 1987, the tugboat he
was manning met an accident. Half of the cost of repairs totalling P5,000.00 was shouldered by
Seaborne. Private respondent was required to pay for the other half, and an initial salary deduction
of P250.00 was actually made by Seaborne. On September 24, 1987, he sought permission to go on
leave of absence to ask from the Department of Labor and Employment if such deduction was legal,
but this request was not granted. Instead, he was asked by petitioner Gatan, Seaborne's president
and manager, to tender his resignation. When he refused to resign, as he had not yet received any
separation pay, he was dismissed.
A complaint was then filed by the private respondent against Seaborne for illegal dismissal, illegal
deduction, and unpaid wages, which was later amended to include petitioner Gatan as partyrespondent and to embrace claims for overtime pay, holiday pay, 13th month pay, sick leave pay,
damages, and attorney's fees.
Labor Arbiter Eduardo G. Magno rendered judgment on August 5, 1988, the dispositive portion of
which reads thus:
WHEREFORE, judgment is hereby rendered declaring the dismissal of the
complainant as illegal. Respondent is hereby ordered to reinstate complainant to his
former position without loss of seniority rights but without backwages. Backwages will
lie upon refusal of respondent to reinstate complainant. However, respondent is

hereby ordered to pay complainant the amount of Two Hundred Fifty (P250.00)
Pesos representing the amount illegally deducted from complainant.
SO ORDERED.
The private respondent appealed to the National Labor Relations Commission which, in a decision
promulgated on March 21, 1989, modified the labor arbiter's ruling, to wit:
WHEREFORE, the decision appealed from is hereby MODIFIED, ordering the
respondents to reinstate complainant to his former position, without loss of seniority
right and other privileges, with full backwages from the date his salary is (sic)
withheld from him until his actual reinstatement, and to pay complainant his holiday
pay, 13th month pay, service incentive leave benefits for 1987 and 1988, plus the
amount illegally deducted from his salary, and attorney's fees of 10% of the total
amount herein awarded.
SO ORDERED.
Petitioners' first and second motions for reconsideration were both denied by the public respondent
for lack of merit.
In this petition, the petitioners are asking the Court to set aside and nullify the NLRC's decision dated
March 21, 1989, and the resolutions denying their motions for reconsideration, on the following
grounds: (a) the NLRC erred in concluding that the private respondent is entitled to service incentive
leave benefits as well as holiday and 13th month pay; and (b) the NLRC erred in holding petitioner
Jerry Ronaldo Gatan personally liable, with the petitioner corporation, for the payment of backwages,
holiday pay, 13th month pay, service incentive leave benefits, and attorney's fees.
Having limited the issues to these two questions, the other portions of the challenged decision are
deemed admitted by the petitioners. Hence, we will no longer dwell on the issue of dismissal,
reinstatement, award of backwages and attorney's fees, and reimbursement of the amount illegally
deducted from the private respondent's salary.
The petitioners aver that the award to private respondent should not have included service incentive
pay because it was never sought in the complaint and the private respondent is already enjoying
vacation leave benefits, which bars the employee from entitlement to the yearly service incentive
leave benefit mandated by Article 95 of the Labor Code.
With regard to the award of 13th month pay and holiday pay, the petitioners allege that the private
respondent failed to prove or establish that he is entitled to the same, and that he did not specify
which holiday or what year he was not paid said benefits.
These arguments are untenable.
The private respondent's allegation of non-payment of these benefits, 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 the
cause of action. 1 It must be noted that the main cause of action of the private respondent is his illegal
dismissal, and the claim for the monetary benefits is but an incident of the protest against such dismissal.
Thus, the burden of proving that payment of said benefits has been made rests upon the party who will
suffer if no evidence at all is presented by either party, that is, the petitioners as private respondent's
employer.

This brings us to the second issue raised by the petitioners: Should Jerry Ronaldo Gatan, as
president and general manager of Seaborne be held responsible to the private respondent for the
payment of backwages and other monetary benefits awarded by the NLRC?
The petitioners rely on the case of Garcia v. NLRC, et al., 2 where the personal liability of corporate
officers to dismissed employees was made to depend on whether such officers acted with evident malice
and bad faith. They argue that the assailed decision did not make any finding that Jerry Gatan acted
maliciously or in bad faith in terminating the services of private respondent.
This contention is meritorious.
All that the evidence shows is that petitioner Gatan ordered the private respondent to resign and
dismissed him when he failed to do so without considering the reason for such refusal, which is the
non-payment of his separation pay. There is nothing on record which would prove the insinuation
that Jerry Gatan sanctioned the deduction of P250.00 from private respondent's salary, as well as
the denial of the latter's request for leave of absence.
These factors are simply not sufficient to convince this Court that petitioner Gatan acted with malice
and in bad faith in the termination of private respondent's employment. In this regard only, the
assailed decision dated
March 21, 1989 should be accordingly modified.
IN VIEW OF THE FOREGOING, the instant petition is DISMISSED and the liability of petitioner
Seaborne Carriers Corporation to private respondent is hereby affirmed. Petitioner Jerry Ronaldo
Gatan is, however, exempted from said liability for lack of material proof on his culpability. Let the
records of this case be remanded to the public respondent for immediate execution of judgment.
SO ORDERED.
G.R. No. 123520 June 26, 1998
NATIONAL SEMICONDUCTOR (HK) DISTRIBUTION, LTD., petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION (4TH DIVISION) and EDGAR PHILIP C.
SANTOS, respondents.

BELLOSILLO, J.:
The main issues to be resolved in his petition for certiorari are: First, 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? Second, were the requirements of due process substantially complied with in
dismissing the worker?
Petitioner National Semiconductor (HK) Distribution, Ltd. (NSC for brevity), a foreign corporation
licensed to do business in the Philippines, manufactures and assembles electronic parts for export
with principal office at the Mactan Export Processing Zone, Mactan, Lapu-Lapu City. Private
respondent Edgar Philip C. Santos was employed by NSC as a technician in its Special Products

Group with a monthly salary of P5,501.00 assigned to the graveyard shift starting at ten o' clock in
the evening until six o' clock in the morning.
On 8 January 1993 Santos did not report for work on his shift. He resumed his duties as night shift
Technician Support only on 9 January 1993. However, at the end of his shift the following morning,
he made two (2) entries in his daily time record (DTR) to make it appear that he worked on both the
8th and 9th of January 1993.
His immediate supervisor, Mr. Joel Limsiaco, unknown to private respondent Santos, received the
report that there was no technician in the graveyard shift of 8 January 1993. Thus, Limsiaco checked
the DTRs and found out that Santos indeed did not report for work on 8 January. But when he
checked Santos' DTR again in the morning of 9 January 1993 he found the entry made by Santos for
the day before.
Informal investigations were conducted by management. Santos was required in a memorandum to
explain in writing within 48 hours from notice why no disciplinary action should be taken against him
for dishonesty, falsifying daily time record (DTR) and violation of company rules and regulations. 1 On
11 January 1993 Santos submitted his written explanation alleging that he was ill on the day he was
absent. As regards the entry on 8 January, he alleged that it was merely due to oversight or carelessness
on his part. 2
Finding Santos' explanation unsatisfactory, NSC dismissed him on 14 January 1993 on the ground
of falsification of his DTR, which act was inimical to the company and constituted dishonesty and
serious misconduct. 3
Thus, on 20 January 1993, Santos filed a complaint for illegal dismissal and non-payment of back
wages, premium pay for holidays and rest days, night shift differential pay, allowances, separation
pay, moral damages and attorney's fees.
Labor Arbiter Dominador A. Almirante found that Santos was dismissed on legal grounds although
he was not afforded due process, hence, NSC was ordered to indemnify him P1,000.00. The Labor
Arbiter likewise ordered the payment of P19,801.47 representing Santos' unpaid night shift
differentials. 4
NSC appealed to the National Labor Relations Commission (NLRC). In its Decision of 29 September
1995 the NLRC affirmed the Labor Arbiter holding that his conclusions were sufficiently supported by
the evidence and therefore must be respected by the appellate tribunal because the hearing officer
was in a unique position to observe the demeanor of witnesses and to judge their credibility. 5
NSC imputes grave abuse of discretion to the NLRC in affirming the Labor Arbiter's award of night
shift differentials and P1,000.00 indemnity for alleged violation of due process. It contends that the
question of non-payment of night shift differentials was never raised as an issue nor pursued and
proved by Santos in the proceeding before the Labor Arbiter; that Santos was already paid his night
shift differentials, and any further payment to him would amount to unjust enrichment; and, that the
P1,000.00 indemnity is totally unjustified as he was afforded ample opportunity to be heard.
We now resolve. A perusal of Santos' position paper filed before the Labor Arbiter reveals that the
question of non-payment of night shift differentials was specifically raised as an issue in the
proceedings below which was never abandoned by Santos as erroneously claimed by NSC thus
ISSUES

1. Did respondent National Semiconductor (HK) Distribution Ltd. illegally dismiss

complainant Edgar Philip Santos?
2. Is complainant Edgar Philip Santos entitled to recover unpaid salary, holiday pay,
night shift differential, allowances, separation pay, retirement benefits and moral
damages? 6
And, in his prayer, Santos sought to be afforded the reliefs prayed for in his complaint.

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. 8 Moreover, in Jimerez v. National Labor Relations Commission, 9 we declared
As a general rule, one who pleads payment has the burden of proving it. Even where
the plaintiff must allege non-payment, the general rule is that the burden rests on the
defendant to prove payment, rather than on the plaintiff to prove non-payment. The
debtor has the burden of showing with legal certainty that the obligation has been
discharged by payment.
For sure, private respondent cannot adequately prove the fact of non-payment of night shift
differentials since the pertinent employee files, payrolls, records, remittances and other similar
documents which will show that private respondent rendered night shift work; the time he
rendered services; and, the amounts owed as night shift differentials are not in his possession but
in the custody and absolute control of petitioner.
Private respondent has been in petitioner's employ for five (5) years starting 13 January 1988
when he was hired to 14 January 1993 when his services were terminated and petitioner never
denied that private respondent rendered night shift work. In fact, it even presented some documents
purporting to prove that private respondent was assigned to work on the night shift.
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.
Consequently, no grave abuse of discretion can be ascribed to the NLRC for sustaining the Labor
Arbiter when it ruled thus
It is not disputed that complainant was regularly assigned to a night shift (10:00 P.M.
to 7:00 A.M.). Under Section 2, Rule II, Book Three of the Implementing Rules of the
Labor Code, complainant is entitled to an additional benefit of not less ten percent
(10%) of his regular wage for each hour of work performed. The record is bereft of
evidence that respondent has paid complainant this benefit. The best evidence for
respondent corporation would have been the payrolls, vouchers, daily time records
and the like which under Sections 6, 7, 8, 11 and 12, Rule X, Book III of the
Implementing Rules it is obliged to keep. Its failure gives rise to the presumption that
either it does not have them or if it does, their presentation is prejudicial to its cause.
We rule therefore that complainant should be awarded a night shift differential but
limited to there (3) years considering the prescriptive period of money claims. 10

On the issue of due process, we agree with petitioner that Santos was accorded full opportunity to
be heard before he was dismissed.
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. 11 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 on 9 January 1993 and
11 January 1993. Mr. Reynaldo Gandionco, petitioner's witness, testified:
Q: I reform my question. Was there an investigation conducted on the
complainant regarding the alleged falsification of DTR?
A: Yes, ma'am, there was.
Q: Who was present during the alleged investigation? I am referring
to the first investigation?
A: The first investigation we were many. We were Daryll Go, Joel
Limsiaco, Edgar Philip Santos and me.
Q: When was the first investigation conducted?
A: On the night of January 9, 1993.
xxx xxx xxx
Q: During the second investigation, who were present?
A: We were: Daryll Go, Edgar Philip Santos and me.
Q: And when was the second investigation conducted?
A: It was on January 11, 1993 in the afternoon. 12
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.
That the investigations conducted by petitioner may not be considered formal or recorded hearings
or investigations is immaterial. A formal or trial type hearing is not all times and in all instances
essential to due process, the requirements of which are satisfied where the parties are afforded fair
and reasonable opportunity to explain their side of the controversy. 13 It is deemed sufficient for the
employer to follow the natural sequence of notice, hearing and judgment. 14
WHEREFORE, petition is DISMISSED. The NLRC Decision of 29 September 1995 is AFFIRMED
subject to the modification that the award of P1,000.00 as indemnity is DELETED in accordance with
the foregoing discussion.

SO ORDERED.